o
|
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
|
x
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2010 |
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to |
o
|
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shell company report:
|
Large accelerated filer
o
|
Accelerated filer
o
|
Non-accelerated filer
x
|
U.S. GAAP
x
|
International Financial Reporting Standards as issued by the International Accounting Standards Board
o
|
Other
o
|
PART I
|
||
Item 1.
|
Identity of Directors, Senior Management and Advisors.
|
5
|
Item 2.
|
Offer Statistics and Expected Timetable.
|
5
|
Item 3.
|
Key Information.
|
5
|
Item 4.
|
Information on the Company.
|
53
|
Item 4B.
|
Unresolved Staff Comments.
|
74
|
Item 5.
|
Operating and Financial Review and Prospects.
|
74
|
Item 6.
|
Directors, Senior Management and Employees.
|
87
|
Item 7.
|
Major Shareholders and Related-Party Transactions.
|
93
|
Item 8.
|
Financial Information.
|
98
|
Item 9.
|
The Offer and Listing.
|
100
|
Item 10.
|
Additional Information.
|
101
|
Item 11.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
112
|
Item 12.
|
Description of Securities Other than Equity Securities.
|
113
|
Item 13.
|
Defaults, Dividend, Arrearages and Delinquencies.
|
113
|
Item 14.
|
Material Modifications to the Rights of Security Holders and Use of Proceeds.
|
113
|
Item 15.
|
Controls and Procedures.
|
113
|
Item 16A.
|
Audit Committee Financial Expert.
|
114
|
Item 16B.
|
Code of Ethics.
|
114
|
Item 16C.
|
Principal Accountant Fees and Services.
|
115
|
Item 16D.
|
Exemptions from the Listing Standards for Audit Committees.
|
115
|
Item 16E.
|
Purchases of Equity Securities by the Issuer and Affiliated Purchasers.
|
115
|
Item 16F.
|
Change in Registrant’s Certifying Accountant.
|
115
|
Item 16G.
|
Corporate Governance.
|
115
|
PART II
|
||
Item 17.
|
Financial Statements
|
117
|
Item 18.
|
Financial Statements
|
117
|
Item 19.
|
Exhibits
|
118
|
|
·
|
expectations of our ability to pay dividends on our common stock;
|
|
·
|
future financial condition or results of operations and future revenues and expenses, including revenues from profit sharing arrangements;
|
|
·
|
general market conditions and shipping market trends, including charter rates and factors affecting supply and demand;
|
|
·
|
the repayment of our debt;
|
|
·
|
our ability to access debt, credit and equity markets;
|
|
·
|
changes in interest rates;
|
|
·
|
expected compliance with financing agreements and the expected effect of restrictive covenants in such agreements;
|
|
·
|
planned capital expenditures and the ability to fund capital expenditures from external financing sources;
|
|
·
|
the need to establish reserves that would reduce dividends on our common stock;
|
|
·
|
future supply of, and demand for, crude oil generally or in particular regions;
|
|
·
|
changes in demand or charterhire rates in the tanker shipping industry;
|
|
·
|
future utilization rates of our fleet;
|
|
·
|
the financial viability and sustainability of our customers;
|
|
·
|
changes in the supply of tanker vessels, including newbuildings or lower than anticipated scrapping of older vessels;
|
|
·
|
changes in regulatory requirements applicable to the oil transport industry, including, without limitation, requirements adopted by international organizations or by individual countries and actions taken by regulatory authorities and governing such areas as safety and environmental compliance;
|
|
·
|
changes in the requirements and standards imposed on shipping companies by the oil majors;
|
|
·
|
increases in costs and expenses including but not limited to crew wages, insurance, provisions, lube oil, bunkers, repairs, maintenance and general and administrative expenses;
|
|
·
|
the adequacy of our insurance arrangements;
|
|
·
|
changes in general domestic and international political conditions;
|
|
·
|
changes in the condition of our vessels or applicable maintenance or regulatory standards (which may affect, among other things, our anticipated drydocking or maintenance and repair costs) and unanticipated drydock expenditures;
|
|
·
|
the ability to leverage Capital Maritime’s relationships and reputation in the shipping industry;
|
|
·
|
the ability to maintain qualifications for long-term business with oil majors and other major charterers;
|
|
·
|
the ability to maximize the use of vessels;
|
|
·
|
the ability to charter-in and subsequently charter-out profitably;
|
|
·
|
voyage expenses, including the cost of bunker fuel, commissions, agent and port costs;
|
|
·
|
operating expenses, availability of crew, number of off-hire days, drydocking requirements, maintenance costs of our fleet, spare and store expenses, lubricant and insurance costs;
|
|
·
|
expected pursuit of strategic opportunities, including the acquisition of vessels and expansion into new markets;
|
|
·
|
expected financial flexibility to pursue acquisitions and other expansion opportunities;
|
|
·
|
the ability to compete successfully for future chartering and newbuilding opportunities;
|
|
·
|
the anticipated expenses under service agreements with Capital Ship Management or other affiliates of Capital Maritime or third parties;
|
|
·
|
the anticipated taxation of our company and distributions to our shareholders;
|
|
·
|
the expected lifespan of our vessels;
|
|
·
|
the ability to employ and retain key employees;
|
|
·
|
customers’ increasing emphasis on environmental and safety concerns;
|
|
·
|
anticipated funds for liquidity needs and the sufficiency of cash flows; and
|
|
·
|
our business strategy and other plans and objectives for future operations.
|
Item 1.
|
Identity of Directors, Senior Management and Advisors.
|
Item 2.
|
Offer Statistics and Expected Timetable.
|
Item 3.
|
Key Information.
|
A.
|
Selected Financial Data
|
Year Ended
Dec. 31, 2010 |
Year Ended
Dec. 31, 2009 |
Year Ended
Dec. 31, 2008 |
Year Ended
Dec. 31, 2007 |
Period from
April 6, 2006 (inception) to Dec. 31, 2006 |
|
Income Statement Data:
|
|||||
Revenues
|
$ 55,882
|
$ 16,870
|
$ 39,166
|
$ 24,665
|
$ 15,017
|
Expenses:
|
|||||
Voyage expenses(1)
|
18,482
|
6,252
|
14,317
|
10,800
|
5,182
|
Vessel voyage expenses—related party(1)
|
611
|
-
|
-
|
-
|
-
|
Vessel operating expenses(2)
|
9,152
|
2,457
|
2,351
|
2,243
|
1,292
|
Vessel operating expenses—related party(2)
|
1,086
|
540
|
540
|
270
|
176
|
General and administrative expenses
|
3,264
|
-
|
301
|
-
|
-
|
Vessel depreciation
|
11,317
|
3,357
|
3,356
|
3,356
|
2,238
|
Other operating income
|
(1,286)
|
-
|
-
|
-
|
-
|
Total operating expenses
|
42,626
|
12,606
|
20,865
|
16,669
|
8,888
|
Operating income
|
13,256
|
4,264
|
18,301
|
7,996
|
6,129
|
Interest expense and finance costs
|
(3,687)
|
(530)
|
(1,590)
|
(3,132)
|
(3,059)
|
Interest and other income / (expenses)
|
328
|
2
|
1
|
(18)
|
(4)
|
Net income
|
$ 9,897
|
$ 3,736
|
$ 16,712
|
$ 4,846
|
$ 3,066
|
Net income per share (basic and diluted):
|
$0.76
|
$1.77
|
$7.94
|
$2.30
|
$1.97
|
Weighted-average number of shares (basic and diluted):
|
|||||
Common shares (basic and diluted)
|
10,726,027
|
-
|
-
|
-
|
-
|
Class B shares (basic and diluted)
(3)
|
2,105,263
|
2,105,263
|
2,105,263
|
2,105,263
|
1,557,318
|
|
|
|
|
|
|
Year Ended
Dec. 31, 2010 |
Year Ended
Dec. 31, 2009 |
Year Ended
Dec. 31, 2008 |
Year Ended
Dec. 31, 2007 |
Period from
April 6, 2006 (inception) to Dec. 31, 2006 |
|
Balance Sheet Data
(at end of period):
|
|||||
Total shares (basic and diluted) | 12,831,290 | 2,105,263 | 2,105,263 | 2,105,263 | 1,577,318 |
Vessels, net
|
$ 392,969
|
$ 76,238
|
$ 79,595
|
$ 82,951
|
$ 86,307
|
Total assets
|
418,297
|
81,260
|
82,174
|
88,413
|
89,150
|
Total long-term debt including current portion
|
134,580
|
32,460
|
35,621
|
39,587
|
65,800
|
Total stockholders’ equity
(4)
|
277,620
|
46,860
|
43,124
|
26,412
|
21,566
|
Number of common shares
|
13,894,400
|
-
|
-
|
-
|
-
|
Number of Class B shares
(3)
|
2,105,263
|
2,105,263
|
2,105,263
|
2,105,263
|
2,105,263
|
Total number of shares
|
15,999,663
|
2,105,263
|
2,105,263
|
2,105,263
|
2,105,263
|
Dividends declared per share
|
$0.70
|
-
|
-
|
-
|
-
|
Cash Flow Data:
|
|||||
Net cash provided by operating activities
|
$ 18,755
|
$ 3,161
|
$ 20,859
|
$ 9,313
|
$ 4,471
|
Net cash used in investing activities
|
(404,274)
|
-
|
-
|
-
|
(88,545)
|
Net cash provided by / (used in) financing activities
|
396,443
|
(3,161)
|
(20,869)
|
(9,310)
|
84,082
|
(1)
|
Voyage expenses primarily consist of commissions, port expenses, canal dues and bunkers. Vessel voyage expenses—related party includes commissions payable to our Manager.
|
(2)
|
Our vessel operating expenses consist primarily of crew costs, insurance, repairs and maintenance, stores, lubricants, spares and consumables, professional and legal fees and miscellaneous expenses. Vessel operating expenses—related party also includes management fees payable to our Manager.
|
(3)
|
The Company considers the issuance of Class B shares as an equity recapitalization. We have used the 2,105,263 Class B shares in the calculation of net income per share for all the periods presented herein, with the exception of 2006 where the weighted-average number of Class B shares outstanding during the year was used in the calculation.
|
(4)
|
On March 1, 2010, the Company adopted an equity incentive plan. On August 31, 2010, we issued 394,400 restricted shares in the aggregate to the members of our board of directors, all employees of the company, our manager, Capital Maritime, and certain key affiliates and other eligible persons. An additional 5,000 shares were issued in March 2011. Please read “Item 6E: 2010 Equity Incentive Plan” and Note 11 (Equity Incentive Plan) to our Financial Statements included herein for additional information.
|
B.
|
Capitalization and Indebtedness.
|
C.
|
Reasons for the Offer and Use of Proceeds.
|
D.
|
Risk Factors
|
|
·
|
We may not be able to employ our vessels at favorable charter rates or operate our vessels profitably.
|
|
·
|
The market value of our vessels could significantly decrease, which may cause us to recognize losses if any of our vessels are sold or if their values are impaired and it may also affect our compliance with a number of our loan covenants.
|
|
·
|
demand for crude oil and oil products;
|
|
·
|
supply of crude oil and oil products;
|
|
·
|
r
egional availability of refining capacity;
|
|
·
|
acts of God and natural disasters including, but not limited to, earthquakes, tsunamis, hurricanes and typhoons;
|
|
·
|
global and regional economic and political conditions, including developments in international trade, national oil reserves policies, fluctuations in industrial and agricultural production and armed conflicts;
|
|
·
|
the distance oil and oil products are to be moved by sea;
|
|
·
|
demand for seaborne storage of crude oil or oil products;
|
|
·
|
increases in the production of oil in areas linked by pipelines to consuming areas, the extension of existing, or the development of new, pipeline systems in markets we may serve, or the conversion of existing non-oil pipelines to oil pipelines in those markets;
|
|
·
|
changes in seaborne and other transportation patterns;
|
|
·
|
disruption of normal trading patterns due to weather or regional conflicts;
|
|
·
|
competition from alternative sources of energy, including nuclear power, natural gas and coal;
|
|
·
|
refinery utilization and maintenance; and
|
|
·
|
regulatory changes including regulations adopted by supranational authorities such as the IMO and/or industry bodies, such as safety and environmental regulations and requirements by oil major companies.
|
|
·
|
the number of newbuilding deliveries;
|
|
·
|
any potential delays in the delivery of newbuilding vessels and/or cancellations of newbuilding orders;
|
|
·
|
the scrapping rate of older vessels;
|
|
·
|
global scrapping capacity;
|
|
·
|
the price of steel;
|
|
·
|
conversion of tankers to other uses;
|
|
·
|
the successful implementation of the single hull phase out;
|
|
·
|
port and canal congestion;
|
|
·
|
the number of vessels that are out of service; and
|
|
·
|
environmental and other concerns and regulations.
|
|
·
|
increased crude oil production from other areas;
|
|
·
|
increased refining capacity in the Arabian Gulf, West Africa or the FSU;
|
|
·
|
increased use of existing and future crude oil pipelines in the Arabian Gulf, West Africa and the FSU;
|
|
·
|
a decision by Arabian Gulf, West African and the FSU oil-producing nations to increase their crude oil prices or to further decrease or limit their crude oil production;
|
|
·
|
armed conflict in the Arabian Gulf and West Africa and political or other factors;
|
|
·
|
escalating tensions with Iran and other regional conflicts in the Middle East, such as unrest in Egypt, Syria, Yemen and Bahrain and their potential spill over effects on other oil producing countries in the Middle East.
|
|
·
|
Protracted conflict or civil war in Libya or other oil producing countries; and
|
|
·
|
Natural catastrophes such as the March 2011 earthquake and tsunami in Japan, which could affect the country’s short- and long term crude oil imports.
|
|
·
|
the supply of crude oil, which is influenced by, amongst others:
|
|
·
|
international economic activity;
|
|
·
|
geographic changes in oil production, processing and consumption;
|
|
·
|
oil price levels;
|
|
·
|
storage and inventory policies of the major oil and oil trading companies;
|
|
·
|
competition from alternative sources of energy; and
|
|
·
|
strategic inventory policies of countries such as the United States, China and India;
|
|
·
|
the demand for oil;
|
|
·
|
prevailing economic conditions in the market in which the vessel trades;
|
|
·
|
availability of credit to charterers and traders in order to finance expenses associated with the relevant trades;
|
|
·
|
regulatory change;
|
|
·
|
lower levels of demand for the seaborne transportation of refined products and crude oil;
|
|
·
|
demand for floating storage of oil and oil products;
|
|
·
|
increases in the supply of vessel capacity; and
|
|
·
|
the cost of retrofitting or modifying existing ships, as a result of technological advances in vessel design or equipment, changes in applicable environmental or other regulations or standards, or otherwise.
|
|
·
|
decreased demand and supply of crude oil;
|
|
·
|
decreased demand for the transportation of crude oil;
|
|
·
|
reduced refinery throughputs and refinery margins;
|
|
·
|
decreased demand for floating storage of crude oil and oil products;
|
|
·
|
an absence of financing for vessels;
|
|
·
|
limited second-hand market for the sale of vessels;
|
|
·
|
extremely low charter rates, particularly for vessels employed in the spot market, which might not be sufficient to cover the vessel’s operating expenses;
|
|
·
|
widespread loan covenant defaults in the tanker shipping industry; and
|
|
·
|
declaration of bankruptcy by some operators, traders and shipowners as well as charterers.
|
|
·
|
the customer faces financial difficulties forcing it to declare bankruptcy or making it impossible for it to perform its obligations under the charter, including the payment of the agreed rates in a timely manner;
|
|
·
|
the customer fails to make charter payments because of its financial inability, disagreements with us or otherwise;
|
|
·
|
the customer tries to re-negotiate the terms of the charter agreement due to prevailing economic and market conditions;
|
|
·
|
the customer exercises certain rights to terminate a charter;
|
|
·
|
the customer terminates the charter because we fail to deliver the vessel within a fixed period of time, the vessel is lost or damaged beyond repair, there are serious deficiencies in the vessel or prolonged periods of off-hire, or we default under the charter;
|
|
·
|
a prolonged force majeure event affecting the customer, including damage to or destruction of relevant production facilities, war or political unrest prevents us from performing services for that customer; or
|
|
·
|
the customer terminates the charter because we fail to comply with the strict safety, environmental and vetting criteria of the charterer or the rules and regulations of various maritime organizations and bodies.
|
|
·
|
the operator’s environmental, health and safety record;
|
|
·
|
compliance with the standards set by the International Maritime Organization (“IMO”) (the United Nations agency for maritime safety and the prevention of marine pollution by ships) and the heightened industry standards that have been set by some energy companies;
|
|
·
|
shipping industry relationships;
|
|
·
|
reputation for customer service, technical and operating expertise;
|
|
·
|
shipping experience and quality of ship operations, including cost-effectiveness;
|
|
·
|
quality, experience and technical capability of crews;
|
|
·
|
the ability to finance vessels at competitive rates and overall financial stability;
|
|
·
|
relationships with shipyards and the ability to obtain suitable berths;
|
|
·
|
construction management experience, including the ability to procure on-time delivery of new vessels according to customer specifications;
|
|
·
|
willingness to accept operational risks pursuant to the charter, such as allowing termination of the charter for force majeure events; and
|
|
·
|
competitiveness of the bid in terms of overall price.
|
|
·
|
marine disasters;
|
|
·
|
bad weather;
|
|
·
|
mechanical failures;
|
|
·
|
grounding, fire, explosions and collisions;
|
|
·
|
piracy;
|
|
·
|
human error; and
|
|
·
|
war and terrorism.
|
|
·
|
environmental damage, including potential liabilities or costs, which could exceed the insurance coverage available to us, to recover any spilled oil or other petroleum products and to restore the eco-system where the spill occurred;
|
|
·
|
death or injury to persons or loss of property;
|
|
·
|
delays in the delivery of cargo;
|
|
·
|
loss of revenues from or termination of charter contracts;
|
|
·
|
governmental fines, penalties or restrictions on conducting business;
|
|
·
|
higher insurance rates; and
|
|
·
|
damage to our reputation and customer relationships generally.
|
|
·
|
identify suitable vessels or shipping companies for acquisitions or combinations with or joint ventures to establish our initial fleet and grow our fleet in the future;
|
|
·
|
successfully integrate any acquired vessels or businesses with our existing operations; and
|
|
·
|
obtain required debt or equity financing for our existing and any new operations.
|
|
·
|
fail to realize anticipated benefits, such as new customer relationships, cost-savings or cash flow enhancements;
|
|
·
|
incur or assume unanticipated liabilities, losses or costs associated with any vessels or businesses acquired, particularly if any vessel we acquire proves not to be in good condition;
|
|
·
|
be unable to hire, train or retain qualified shore and seafaring personnel to manage and operate our growing business and fleet;
|
|
·
|
decrease our liquidity by using a significant portion of available cash or borrowing capacity to finance acquisitions;
|
|
·
|
significantly increase our interest expense or financial leverage if we incur additional debt to finance acquisitions;
|
|
·
|
dilute our existing shareholders by issuing equity to fund our growth strategy; or
|
|
·
|
incur other significant charges, such as impairment of goodwill or other intangible assets, asset devaluation or restructuring charges.
|
|
·
|
the cyclicality in the spot and period vessel market;
|
|
·
|
the rates we obtain from our charters for spot or period charters;
|
|
·
|
the performance of pools and the rating of our vessels under such pool agreements if we choose to enter into such an agreement;
|
|
·
|
the price and demand for tanker cargoes;
|
|
·
|
the level of our operating costs, such as the cost of crews, spares, stores, lubricants and insurance;
|
|
·
|
the number of off-hire days for our fleet and the timing of, and number of days required for, maintenance and drydocking of our vessels;
|
|
·
|
delays in the delivery of any vessels we have agreed to acquire;
|
|
·
|
prevailing global and regional economic and political conditions;
|
|
·
|
force majeure events;
|
|
·
|
compliance with oil major requirements and the vetting process;
|
|
·
|
the effect of governmental regulations and maritime self-regulatory organization standards on the conduct of our business; and
|
|
·
|
the amount of interest payable on our loans.
|
|
·
|
the level of capital expenditures we make, including for maintaining existing vessels and acquiring new vessels, which we expect will be substantial;
|
|
·
|
our debt service requirements and the terms, covenants and restrictions on distributions contained in any credit agreement we may enter into;
|
|
·
|
our debt service amortization payments;
|
|
·
|
limitations in our credit facilities;
|
|
·
|
fluctuations in our working capital needs; and
|
|
·
|
the amount of any cash reserves established by our board of directors, including reserves for the conduct of our operations and growth and other matters.
|
|
·
|
the economic and financial developments globally, including actual and projected global economic growth;
|
|
·
|
fluctuations in the actual or projected price of crude oil and refined products;
|
|
·
|
refining capacity and its geographical location;
|
|
·
|
increases in the production of oil in areas linked by pipelines to consuming areas, the extension of existing, or the development of new, pipeline systems in markets we may serve, or the conversion of existing non-oil pipelines to oil pipelines in those markets;
|
|
·
|
decreases in the consumption of oil due to increases in its price relative to other energy sources, other factors making consumption of oil less attractive, energy conservation measures or environmental requirements on consumers;
|
|
·
|
availability of new, alternative energy sources; and
|
|
·
|
negative or deteriorating global or regional economic or political conditions, particularly in oil consuming regions, which could reduce energy consumption or its growth.
|
|
·
|
paying dividends;
|
|
·
|
incurring or guaranteeing indebtedness;
|
|
·
|
change ownership or structure, including mergers, consolidations, liquidations and dissolutions;
|
|
·
|
grow our business through borrowings alone;
|
|
·
|
charging, pledging or encumbering our vessels;
|
|
·
|
changing the flag, class, management or ownership of our vessels;
|
|
·
|
selling or changing the beneficial ownership or control of our vessels;
|
|
·
|
make certain investments; and
|
|
·
|
enter into a new line of business.
|
|
·
|
maintain minimum free consolidated liquidity of at least $1.0 million per collateralized vessel
|
|
·
|
maintain a ratio of EBITDA to net interest expense of at least 3.00 to 1.00 on a trailing four-quarter basis; and
|
|
·
|
maintain a ratio of Stockholders’ Equity to total assets of no less than 30:100.
|
|
·
|
our ability to obtain additional financing, if necessary, for working capital, capital expenditures, acquisitions or other purposes may be impaired, or such financing may not be available on favorable terms;
|
|
·
|
in the event we convert our credit facility into a term loan we will need a substantial portion of our cash flow to make relevant interest and principal payments on our debt, reducing the funds that would otherwise be available for operations, future business opportunities and for the payment of dividends;
|
|
·
|
our debt level will make us more vulnerable to competitive pressures, or to a downturn in our business or in the economy in general, than our competitors with less debt; and
|
|
·
|
our debt level may limit our flexibility in responding to changing business and economic conditions.
|
|
·
|
failure to pay principal or interest when due;
|
|
·
|
breach of certain undertakings, negative covenants and financial covenants contained in the credit facility, any related security document or guarantee or the interest rate swap agreements, including failure to maintain unencumbered title to any of the vessel-owning subsidiaries or any of the assets of the vessel-owning subsidiaries and failure to maintain proper insurance;
|
|
·
|
any breach of the credit facility, any related security document or guarantee or the interest rate swap agreements (other than breaches described in the preceding two bullet points) if, in the opinion of the lenders, such default is capable of remedy and continues unremedied after written notice of the lenders;
|
|
·
|
any representation, warranty or statement made by us in the credit facility or any drawdown notice thereunder or related security document or guarantee or the interest rate swap agreements is untrue or misleading when made;
|
|
·
|
a cross-default of any other indebtedness of $10.0 million or greater;
|
|
·
|
we become, in the reasonable opinion of the lenders, unable to pay our debts when due;
|
|
·
|
any of our or our subsidiaries’ assets are subject to any form of execution, attachment, arrest, sequestration or distress above certain limits and not discharged within certain time frame;
|
|
·
|
an event of insolvency or bankruptcy;
|
|
·
|
cessation or suspension of our business or of a material part thereof;
|
|
·
|
unlawfulness, non-effectiveness or repudiation of any material provision of our credit facility, of any of the related finance and guarantee documents or of our interest rate swap agreements;
|
|
·
|
failure of effectiveness of security documents or guarantee;
|
|
·
|
our shares cease to be listed on the New York Stock Exchange or on any other recognized securities exchange;
|
|
·
|
any breach under any provisions contained in our interest rate swap agreements;
|
|
·
|
termination of our interest rate swap agreements or an event of default thereunder that is not remedied within five business days;
|
|
·
|
invalidity of a security document in any material respect or if any security document ceases to provide a perfected first priority security interest; or
|
|
·
|
any other event that occurs or circumstance that arises in light of which the lenders reasonably consider that there is a significant risk that we will be unable to discharge our liabilities under the credit facility, related security and guarantee documents or interest rate swap agreements.
|
|
·
|
failure to pay any principal, interest, fees, expenses or other amounts when due;
|
|
·
|
failure to notify the lenders of any material oil spill or discharge of hazardous material, or of any action or claim related thereto;
|
|
·
|
breach or lapse of any insurance with respect to the vessels;
|
|
·
|
breach of certain financial or other covenants;
|
|
·
|
failure to observe any other agreement, security instrument, obligation or covenant beyond specified cure periods in certain cases;
|
|
·
|
default under other indebtedness;
|
|
·
|
bankruptcy or insolvency events;
|
|
·
|
failure of any representation or warranty to be materially correct;
|
|
·
|
a change of control, as defined in the applicable agreement; and
|
|
·
|
a material adverse effect, as defined in the applicable agreement.
|
|
·
|
The Business Opportunities Agreement specifies that Capital Maritime must only inform us of certain spot, period and bareboat charter opportunities, certain vessel acquisition opportunities and certain other business opportunities that we would be capable of pursuing. We have a limited time to exercise our right to pursue such opportunities before Capital Maritime can take advantage of such opportunities. The time period to take advantage of such opportunities can be 48 hours, 120 hours, 192 hours or a reasonable time in light of the circumstances, depending on the opportunity. See “Related-Party Transactions—Business Opportunity Agreement” for more information.
|
|
·
|
Our Manager advises our board of directors about the amount and timing of asset purchases and sales, capital expenditures, borrowings, issuances of additional common stock, acquisition of or mergers with other companies and cash reserves, each of which can affect the amount of the cash available for distribution to our shareholders.
|
|
·
|
Our executive officers and certain of our directors also serve as officers or directors of our Manager or its affiliates and such officers and directors do not spend all of their time on matters related to our business.
|
|
·
|
Our Manager advises us of costs incurred by it and its affiliates that it believes are reimbursable by us.
|
|
·
|
acquire new vessels;
|
|
·
|
enter into new charters for our vessels or extend current charters;
|
|
·
|
obtain financing on commercially acceptable terms;
|
|
·
|
issue new equity; or
|
|
·
|
maintain satisfactory relationships with charterers, suppliers and other third parties.
|
|
·
|
Our existing shareholders’ proportionate ownership interest in us will decrease.
|
|
·
|
The amount of cash available for distribution as dividends payable on our common stock may decrease.
|
|
·
|
The relative voting strength of each previously outstanding share may be diminished.
|
|
·
|
The market price of our common stock may decline.
|
|
·
|
the failure of securities analysts to publish research about us after this offering, or analysts making changes in their financial estimates;
|
|
·
|
announcements by us or our competitors of significant contracts, acquisitions or capital commitments;
|
|
·
|
variations in quarterly operating results;
|
|
·
|
general economic conditions;
|
|
·
|
terrorist acts;
|
|
·
|
future sales of our common stock or other securities; and
|
|
·
|
investors’ perception of us and the tanker shipping industry.
|
Item 4.
|
Information on the Company.
|
A.
|
History and Development of the Company
|
B.
|
Business Overview
|
|
·
|
Strategically deploy our vessels in order to optimize the opportunities in the chartering market.
We intend to maintain a flexible approach to chartering with the strategy of optimizing our selection of the available commercial opportunities over time. We
|
|
|
currently employ our vessels under spot market related arrangements, as we expect to benefit from a potential recovery of the spot market from the current historically low levels. However, we retain the ability to evaluate and enter into longer-term period charters, subject to the prevailing market conditions at the time. We may also charter-in vessels, meaning we may charter vessels we do not own with the intention of chartering them in accordance with our chartering and fleet management strategy.
|
|
·
|
Strategically develop and grow our fleet.
We intend to acquire modern, high-quality tanker vessels through timely and selective acquisitions of vessels in a manner that is accretive to our shareholders. We currently view VLCC and Suezmax vessel classes as providing attractive return characteristics but will evaluate all classes of crude oil tanker vessels for potential acquisition, including Aframax and Panamax tankers.
|
|
·
|
Return a substantial portion of our cash flow to shareholders through variable quarterly dividends.
We intend to distribute to our shareholders on a quarterly basis substantially all of our cash less any amount required to maintain a reserve that our board of directors determines from time to time is appropriate for the operation and future growth of our fleet. See “Our Dividend Policy and Restrictions on Dividends.”
|
|
·
|
Maintain a strong balance sheet.
We believe that primarily using equity and internally-generated cash flows to finance our business will provide for a strong balance sheet and, as a result, greater flexibility to capture market opportunities. Although our use of equity rather than debt financing may result in substantial dilution to our shareholders, we believe that this approach is suited to the current global economic conditions, including the relatively restrictive credit environment and the prevailing low charter rates. It is our current expectation that spot rates will increase over time and we believe that having a strong balance sheet and trading in the spot market will allow us to take advantage of higher charter rates as they increase while allowing us the flexibility to take advantage of other attractive business opportunities when they arise.
|
|
·
|
Operate a high-quality fleet.
We intend to maintain a modern, high-quality fleet that satisfies all current and pending safety and environmental standards and complies with charterer requirements through our Managers’ comprehensive maintenance program. In addition, our Manager will maintain the quality of our vessels by carrying out regular inspections, both while in port and at sea.
|
|
·
|
Maintain cost-competitive, highly efficient operations.
Under the Management Agreement, Capital Maritime coordinates and oversees the commercial and technical management of our fleet. We believe that Capital Maritime is able to do so at a cost to us that would be competitive to what could be achieved by performing these functions in-house and that Capital Maritime’s rates are competitive with those that would be available to us through third-party managers. We expect the efficiency and operational expertise of the Capital Maritime fleet to provide our vessels with a competitive advantage over other charterers in the market.
|
|
·
|
We own a modern, high-quality fleet of tanker vessels
. We currently own a high specification fleet with an average age of 2.0 years as of March 31, 2011 built at reputable shipyards in Japan and Korea. We believe that owning a modern, high-quality fleet is more attractive to charterers, reduces operating costs and allows our fleet to be more reliable, which improves utilization. The tanker shipping industry is highly regulated and we aim to own and operate vessels that satisfy all current and pending safety and environmental regulations. We expect that the combination of these factors will provide us with a competitive advantage in securing favorable employment for our vessels.
|
|
·
|
We benefit from Capital Maritime’s history of satisfying the operational, safety, environmental and technical vetting criteria imposed by oil majors and its relationships within the shipping industry.
We believe our strong relationship with Capital Maritime and its affiliates provides numerous benefits which are essential to our long-term growth and success. Capital Maritime has a well-established reputation within the shipping industry and strong relationships with many of the world’s leading oil companies, commodity traders and shipping companies. We also benefit from Capital Maritime’s expertise in technical fleet management and its ability to meet the rigorous vetting requirements of some of the world’s most selective major international oil companies, including BP p.l.c., Chevron Corporation, Conoco-Phillips Inc., ExxonMobil Corporation, Royal Dutch Shell plc, Statoil ASA, Total S.A. and many others.
|
|
·
|
We maintain an efficient management structure with competitive operating costs.
We believe our management structure enhances the scalability of our business, allowing us to expand our fleet without substantial increases in overhead costs. We believe we realize cost benefits based on a network of providers of vessel supplies, bunkers suppliers, crewing agencies, insurers and other service providers that Capital Maritime and its management team have established over the years. See “Item 7B: Related-Party Transactions—Management Agreement.
|
|
·
|
We intend to continue pursuing a strategy of medium to low leverage to maintain a strong balance sheet.
We have financed the acquisition of our initial five vessels through equity and draw downs on our revolving credit facility. Any future vessel acquisitions are expected to be financed primarily through future equity follow-on offerings and internally-generated cash flow. We also have $65.4 million currently available under our revolving credit facility.
|
|
·
|
Shell International Trading & Shipping Co Ltd. (Shell)
, a subsidiary of Royal Dutch Shell plc., is the principal trading and shipping business of the Royal Dutch/Shell Group. It trades millions of barrels crude oil and oil products and moves cargoes on some 100 deep-sea tankers and gas carriers around the world on a daily basis.
|
|
·
|
Petroleo Brasileiro S.A.
(
Petrobras
)
, the Brazilian state-run energy company, is an integrated oil and gas company with interests in exploration, production, refining, marketing and distribution. Petrobras also operates a fleet of close to 200 vessels and is
|
|
|
listed on Sao Paolo’s Bovespa and the New York Stock Exchange. Petrobras is one of the world’s biggest companies by market value.
|
|
·
|
Repsol YPF Trading Y Transporte S.A. (Repsol)
, is the business unit in charge of the marketing, supply and transportation activities in the international markets of Repsol YPF, Spain’s largest oil company. Repsol YPF is a fully integrated oil and gas company engaged in the petroleum business, including exploration, development, production and refining of crude oil.
|
Vessel Name
|
Sister Vessels
|
Size (DWT)
|
Year Built
|
Yard
(1)
|
Delivery Date
|
Employment
(2)
|
Expiry
(3)
|
Description
|
Acquisition Price (ml)
|
VESSELS CURRENTLY IN OUR FLEET
|
|||||||||
Alexander the Great
|
A
|
297,958
|
2010
|
Universal
|
Mar 2010
|
Shell TD3 +PS
|
May 2011
|
VLCC
|
$96.5
|
Miltiadis M II
|
162,397
|
2006
|
Daewoo
|
Mar 2010
|
Spot
|
-
|
Ice Class 1A Suezmax
|
$71.25
|
|
Achilleas
|
A
|
297,863
|
2010
|
Universal
|
Jun 2010
|
Shell TD3 +PS
|
Aug 2011
|
VLCC
|
$96.5
|
Amoureux
|
B
|
150,393
|
2008
|
Universal
|
May 2010
|
Shell TD5 +PS
|
Jul 2011
|
Suezmax
|
$66.2
|
Aias
|
B
|
150,096
|
2008
|
Universal
|
Jun 2010
|
Shell TD5 +PS
|
Aug 2011
|
Suezmax
|
$66.2
|
TOTAL FLEET DWT:
|
1,058,344
|
||||||||
OPTIONAL VESSEL WE MAY ACQUIRE FROM CAPITAL MARITIME
(4)
|
|||||||||
Atlantas
|
321,300
|
2010
|
Daewoo
|
June 2010
|
-
|
-
|
VLCC
|
$108.0
|
1.
|
Universal: Universal Shipbuilding Corporation, Ariake, Japan. Daewoo: Daewoo Shipbuilding & Marine Engineering Co. Ltd.
|
2.
|
Shell: Shell International Trading & Shipping Co. Ltd. TD3: Baltic Dirty Tanker Route 3 (Arabian Gulf –Japan) index. TD5: Baltic Dirty Tanker Route 5 (West Africa-US East Coast) index. PS: Profit Sharing. All charters with Shell are subject to a profit sharing arrangement, settled quarterly, allowing the Company to receive 50 percent of any additional revenues earned by the vessels in excess of the index related minimum base rate over the period that the actual voyage took place. All charters with Shell are also subject to 1.25% third party commissions on gross revenues including profit share.
|
3.
|
Earliest possible redelivery date. For A sister vessels, the redelivery date is +/- 30 days at the charterer’s option and for B sister vessels, the redelivery date is +/- 15 days at the charterer’s option.
|
4.
|
The option to purchase the M/T Atlantas from Capital Maritime at cost plus delivery expenses is expected to expire on June 2, 2011.
|
|
·
|
commercial services
, which include vessel chartering and marketing;
|
|
·
|
technical services
, which include vessel maintenance; ensuring regulatory and classification society compliance; crewing; insurance; purchasing; and shipyard supervision;
|
|
·
|
administrative services
, which include legal and financial compliance services; bookkeeping and accounting services; and banking and financial services;
|
|
·
|
strategic services
, which include strategic planning; mergers and acquisitions of assets and businesses; financing negotiations; and general management of our business; and
|
|
·
|
investor relations services
, which include assisting with the preparation and dissemination of information; interacting with investors; and engaging in public relations activities.
|
|
·
|
Technical management fee
at a rate of $850 per vessel per day for the first year, to be updated on each anniversary following the Consumer Price Index. As of March 18, 2011 this rate was revised to $869 per day per vessel;
|
|
·
|
Sale & purchase fee
equal to 1% of the gross purchase or sale price upon the consummation of any purchase or sale of a vessel; and
|
|
·
|
Commercial services fee
equal to 1.25% of all gross charter revenues generated by each vessel for Commercial Services rendered.
|
|
·
|
Hull and machinery insurance
covers loss of or damage to a vessel due to marine perils such as collisions, grounding and weather and the coverage is usually to an agreed “insured value” which, as a matter of policy, is never less than the particular vessel’s fair market value. Cover is subject to policy deductibles which are always subject to change.
|
|
·
|
Increased value insurance
augments hull and machinery insurance cover by providing a low-cost means of increasing the insured value of the vessels in the event of a total loss casualty.
|
|
·
|
Protection and indemnity insurance
is the principal coverage for third party liabilities and indemnifies against such liabilities incurred while operating vessels, including injury to the crew, third parties, cargo or third party property loss (including oil pollution) for which the shipowner is responsible. We carry the current maximum available amount of coverage for oil pollution risks, $1 billion per vessel per incident.
|
|
·
|
War risks insurance
covers such items as piracy and terrorism.
|
|
·
|
Freight, demurrage & defense
cover is a form of legal costs insurance which responds as appropriate to the costs of prosecuting or defending commercial (usually uninsured operating) claims.
|
Type
|
Aggregate Sum Insured For All Vessels in our Existing Fleet
|
Hull and Machinery
|
$460.0 million (increased value insurance (including excess liabilities) provides additional coverage).
|
Increased Value (including Excess Liabilities)
|
Up to $180.0 million additional coverage in total.
|
Protection and Indemnity (P&I)
|
Pollution liability claims: limited to $1billion per vessel per incident.
|
|
·
|
on-board installation of automatic identification systems to enhance vessel-to-vessel and vessel-to-shore communications;
|
|
·
|
on-board installation of ship security alert systems;
|
|
·
|
the development of vessel security plans; and
|
|
·
|
compliance with flag state security certification requirements.
|
D.
|
Property, Plants and Equipment
|
Item 4B.
|
Unresolved Staff Comments.
|
Item 5.
|
Operating and Financial Review and Prospects.
|
A.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
·
|
levels of crude oil and oil product demand and inventories;
|
|
·
|
spot market rates, freight and charter hire levels and our ability to re-charter our vessels as their charters expire;
|
|
·
|
our ability to repay our debt as it becomes due, and, in the event we elect to convert the facility into a term loan facility, to comply with the repayment schedule when amortization commences in September 2011;
|
|
·
|
our ability to comply with the covenants in our credit facilities, including covenants relating to the maintenance of asset value ratios and the exercise of the term-out option in our revolving credit facility;
|
|
·
|
the supply of crude oil tankers and factors affecting supply, including the number of newbuildings entering the world tanker fleet each year;
|
|
·
|
the ability to increase the size of our fleet and make additional acquisitions that are accretive to our shareholders;
|
|
·
|
the ability of Capital Maritime’s commercial and chartering operations to successfully employ our vessels at economically attractive rates, particularly as our fleet expands and our charters expire;
|
|
·
|
our ability to benefit from new maritime regulations concerning the phase-out of single-hull vessels and the more restrictive regulations for the transport of certain products and cargoes;
|
|
·
|
the effective and efficient technical management of our vessels;
|
|
·
|
Capital Maritime’s ability to obtain and maintain major international oil company approvals and to satisfy their technical, health, safety and compliance standards; and
|
|
·
|
the strength of and growth in the number of our customer relationships, especially with major international oil companies and major commodity traders.
|
|
·
|
the freight and charter hire earned by our vessels under voyage, spot charters, time and bareboat charters;
|
|
·
|
the level of voyage and operating expenses we incur for the running of our fleet;
|
|
·
|
the utilization level of our fleet;
|
|
·
|
our access to debt, and equity and the cost of such capital, required to acquire additional vessels and/or to implement our business strategy;
|
|
·
|
our ability to comply with the covenants in our revolving credit facility, including covenants relating to the maintenance of asset value ratios, as the recent decline in asset values and charter rates may limit our ability to pursue our business strategy;
|
|
·
|
the prevailing spot market rates and the number of our vessels which we operate on the spot market;
|
|
·
|
our ability to sell vessels at prices we deem satisfactory;
|
|
·
|
our level of debt and the related interest expense and amortization of principal; and
|
|
·
|
the level of any dividends on our common stock.
|
|
·
|
Financial Statements
. Our Financial Statements include the balance sheets and the results of operations of different numbers of vessels. For the years ended December 31, 2009 and 2008 only the M/T Miltiadis M II was in operation. During 2010 we acquired four additional vessels; the M/T Alexander the Great, the M/T Achilleas, the M/T Amoureux and the M/T Aias. Please read Note 1 of our Financial Statements included herein for a description of the financial treatment of vessel acquisitions and dispositions. The table below shows the periods for which the results of operations and cash flows for each vessel-owning subsidiary are included in our Financial Statements.
|
VESSEL INCLUSION IN FINANCIAL STATEMENTS
|
||||
Vessel
|
Incorporation date of VOC*
|
Date acquired
by Capital Maritime
|
Date acquired
by us
|
Vessel included in Financial Statements for the year ended December 31, 2010 as of below date:
|
M/T Alexander the Great
|
01/26/2010
|
03/26/2010
|
03/26/2010
|
03/26/2010
|
M/T Miltiadis M II
|
04/06/2006
|
04/26/2006
|
03/31/2010
|
01/01/2010
|
M/T Amoureux
|
04/14/2010
|
-
|
05/10/2010
|
05/10/2010
|
M/T Aias
|
04/14/2010
|
-
|
06/03/2010
|
06/03/2010
|
M/T Achilleas
|
01/26/2010
|
06/25/2010
|
06/25/2010
|
06/25/2010
|
|
·
|
Different Financing Arrangements
. The M/T Miltiadis M II was purchased by Capital Maritime in 2006 under that company’s financing arrangements with terms that differ significantly from our revolving credit facility currently in place which we have used to finance the acquisition of the M/T Achilleas and the M/T Aias. For a description of our revolving credit facility please see “—Liquidity and Capital Resources—Revolving Credit Facilities” below.
|
|
·
|
Different Structure of General and Administrative Expenses
. Since our IPO we have incurred certain general and administrative expenses as a publicly listed company that we had not previously incurred.
|
|
·
|
The Size of our Fleet Continues to Change.
At the time of our IPO, only one of the vessels in our fleet was in operation. The remaining four vessels were delivered to us between March and June 2010. We intend to continue to evaluate potential acquisitions of vessels or other shipping businesses in a prudent manner that is accretive to our distributable cash flow per share
.
|
B.
|
Liquidity and Capital Resources
|
2010
|
2009
|
2008
|
||||||||||
Net Cash Provided by Operating Activities
|
$ | 18.8 | $ | 3.2 | $ | 20.9 | ||||||
Net Cash (Used in) Investing Activities
|
$ | (404.3 | ) | $ | - | $ | - | |||||
Net Cash Provided by / (Used in) Financing Activities
|
$ | 396.4 | $ | (3.2 | ) | $ | (20.9 | ) |
|
A.
|
Vessel acquisitions of $399.3 which is analyzed as follows:
|
|
·
|
$194.3 million, representing the construction cost plus initial expenses of the M/T Alexander the Great and the M/T Achilleas; and
|
|
·
|
$205.0
million, representing the acquisition cost of the M/T Miltiadis M II, the M/T Amoureux and the M/T Aias. This amount also includes the 1% sales and purchase commission of $1.3 million on the acquisition price of the M/T Aias and the M/T Amoureux which was paid to Capital Maritime under the terms of our management agreement; and
|
|
B.
|
$5.0 million representing the increase to our restricted cash which is the minimum amount of free cash we were required to maintain under our revolving credit facility for the period.
|
Bank loans repayment schedule
|
|||
Year ending December 31,
|
i
|
ii
|
Total
|
2011
|
4,964
|
4,688
|
9,652
|
2012
|
9,930
|
9,375
|
19,305
|
2013
|
9,930
|
9,375
|
19,305
|
2014
|
9,930
|
9,375
|
19,305
|
2015
|
24,826
|
42,187
|
67,013
|
Total
|
$ 59,580
|
$ 75,000
|
$ 134,580
|
C.
|
Research and Development, Patent and Licenses
|
D.
|
Trend Information
|
E.
|
Off-Balance Sheet Arrangements
|
F.
|
Contractual Obligations and Contingencies
|
Payment due by period
|
||||||||||||||||||||
Total
|
Less than 1 year
|
1-3 years
|
3-5 years
|
More than 5 years
|
||||||||||||||||
Long-term Debt Obligations (1)
|
$ | 134,580 | $ | 9,652 | $ | 38,610 | $ | 86,318 | $ | - | ||||||||||
Interest Obligations (2)
|
21,894 | 4,629 | 11,059 | 6,206 | - | |||||||||||||||
Management fees (3)
|
17,454 | 1,579 | 3,265 | 3,406 | 9,204 | |||||||||||||||
Total:
|
$ | 173,929 | $ | 15,860 | $ | 52,934 | $ | 95,930 | $ | 9,204 |
(1)
|
Calculations for the Long-term Debt Obligations have been based on the assumption that the Company will exercise the option to convert its revolving credit facility into a term loan.
|
(2)
|
Calculations for interest obligations, have been based on:
|
|
·
|
margin of 3% up to 6/2/2011 and 3.25% for the remaining of 2011 plus a Libor of 0.2859% which represents the last interest roll-over of our revolving credit facility in 2010;
|
|
·
|
Bloomberg forward rates plus a margin of 3.25% thereafter.
|
(3)
|
Management fees represent fees for the provision of technical services provided by our Manager pursuant to the Management agreement. Calculations for the management fees have been based on an annual increase of 2.2% which represents the United States of America year on year consumer price index as published in March 2011.
|
Item 6.
|
Directors, Senior Management and Employees.
|
A.
|
Directors and Senior Management
|
Name
|
Age
|
Position*
|
Evangelos M. Marinakis
|
43
|
Chairman of the Board of Directors, Chief Executive Officer and Class I Director
|
Gregory J. Timagenis
|
65
|
Class I Director
|
Richard C. Sages
|
54
|
Class I Director
|
Andreas C. Konialidis
|
33
|
Chartering Manager and Class II Director
|
Pierre de Demandolx Dedons
|
70
|
Class II Director
|
Gerasimos G. Kalogiratos
|
33
|
Chief Financial Officer and Class III Director
|
Socrates Kominakis
|
43
|
Class III Director
|
Dimitris P. Christacopoulos
|
40
|
Class II Director
|
Ioannis E. Lazaridis
|
43
|
President
|
Karsten Djuve
|
42
|
Chief Commercial Officer
|
* The term of our Class I directors expires in 2013, the term of our Class II directors expires in 2012 and the term of our Class III directors expires in 2011.
|
B.
|
Compensation.
|
C.
|
Board Practices
|
|
·
|
A Code of Ethics;
|
|
·
|
An Audit Committee Charter; and
|
|
·
|
An Independent Directors’ Committee Charter.
|
|
·
|
the integrity of the Company’s and its subsidiaries’ financial statements;
|
|
·
|
the Company’s compliance with legal and regulatory requirements;
|
|
·
|
significant financial transactions and financial policy and standards;
|
|
·
|
the independent auditor’s qualifications and independence;
|
|
·
|
the performance of the Company’s independent auditor and internal audit function;
|
|
·
|
the independent auditor’s annual audit of the Company’s and its subsidiaries’ financial statements; and
|
|
·
|
the Company’s systems of disclosure controls and procedures and internal controls over financial reporting.
|
D.
|
Employees
|
Item 7.
|
Major Shareholders and Related-Party Transactions.
|
A.
|
Major Shareholders
|
Name of Beneficial Owner
|
Shares of
Common
Stock Owned
|
Percentage of Total Common Stock Owned
|
Shares of
Class B Stock Owned
|
Percentage of Total Class B Stock Owned
|
Percentage of Total Common and Class B Stock Owned
|
Crude Carriers Investments Corp. (1)
|
0
|
0
%
|
2, 105, 163
|
100%
|
13.15%
|
All executive officers and directors as a group (10 persons) (2)(3)
|
0
|
0%
|
0
|
0%
|
0%
|
Ameriprise Financial Inc. and Columbia Management Investment Advisers, LLC (4)
|
1,535,075
|
11.04%
|
0
|
0%
|
9.59%
|
Bank of America Corporation, Bank of America, NA and Merril Lynch, Pierce, Fenner & Smith, Inc. (5)
|
1,043,453
|
7.51%
|
0
|
0%
|
6.51%
|
TIAA-CREF Investment Management LLC and Teachers Advisors, Inc. (6)
|
906,928
|
6.52%
|
0
|
0%
|
5.66%
|
(1)
|
The Marinakis family, including our chairman Mr. Marinakis, through its ownership of Crude Carriers Investments Corp., may be deemed to beneficially own, or to have beneficially owned, the Class B stock held by Crude Carriers Investments Corp. Mr. Marinakis, our Chairman, also owns shares directly in us, as described in note (2) below.
|
(2)
|
Other than our Chairman who owns 145,000 shares of our common stock, representing 0.91% ownership in us, no member of our board of directors nor any of our executive officers own common stock in a number representing more than 1.0% of our outstanding common stock.
|
(3)
|
Restricted common stock was issued to all members of our board of directors and certain executive officers in August 2010 (March 2011 in the case of our newly elected Director at the time) under the terms of our Equity Plan which they may be deemed to beneficially own, or to have beneficially owned.
|
(4)
|
This information is based on the Schedule 13G filed jointly by Ameriprise Financial Inc. and Columbia Management Investment Advisers, LLC, on February 11, 2011.
|
(5)
|
This information is based on the Schedule 13G filed jointly by Bank of America Corporation, Bank of America, NA and Merrill Lynch, Pierce, Fenner & Smith, Inc. on February 14, 2011.
|
(6)
|
This information is based on the Schedule 13G filed jointly by TIAA-CREF Investment Management LLC and Teachers Advisors, Inc. on February 11, 2011.
|
B.
|
Related-Party Transactions
|
1.
|
Issuance of shares under Equity Plan.
On August 31, 2010, we issued 394,400 (or 2.5% of the Company’s stock as of December 31, 2010) of the 400,000 common shares authorized under the Equity Plan Awards to all members of our board of directors, employees of our Manager, Capital Maritime and to employees of certain key affiliates and other eligible persons, with the majority vesting after three years from the date of issue, except for awards issued to our Chairman and to the independent members of our board of directors which vest in equal annual installments over a three-year period. An additional 5,000 shares of restricted common stock were issued on March 16, 2011, to the newly elected member of our board of directors.
All awards are conditional upon the grantee’s continued service until the applicable vesting date and all awards accrue distributions payable upon vesting.
|
2.
|
Purchase of M/T Alexander the Great from Capital Maritime.
On March 1, 2010, we entered into a share purchase agreement with Capital Maritime pursuant to which we acquired all of Capital Maritime’s interests in the wholly owned subsidiary that owns the M/T Alexander the Great. The agreement became binding upon us on the completion of our IPO on March 17, 2010. The aggregate purchase price for the vessel was $96.5 million and was financed with proceeds from our IPO. We also paid 1% sales and purchase commission to Capital Maritime in compliance with the terms of our management agreement. The vessel was delivered on March 26, 2010 to us. The transaction was approved by our board of directors following approval by the independent director’s committee. Please see Note 1 (Basis of Presentation and General Information) to our Financial Statements included herein for more information regarding this acquisition, including a detailed explanation of its accounting treatment.
|
3.
|
Purchase of M/T Achilleas from Capital Maritime.
On March 1, 2010, we entered into a share purchase agreement with Capital Maritime pursuant to which we acquired all of Capital Maritime’s interests in the wholly owned subsidiary that owns the M/T Achilleas. The agreement became binding upon us on the completion of our IPO on March 17, 2010. The aggregate purchase price for the vessel was $96.5 million and was financed with amounts drawn under our revolving credit facility and proceeds from our IPO. We also paid 1% sales and purchase commission to Capital Maritime in compliance with the terms of our management agreement. The vessel was delivered on June 25, 2010 to us. The transaction was approved by our board of directors following approval by the independent director’s committee. Please see Note 1 (Basis of Presentation and General Information) to our Financial Statements included herein for more information regarding this acquisition, including a detailed explanation of its accounting treatment.
|
4.
|
Purchase of M/T Miltiadis M II from Capital Maritime.
On March 1, 2010, we entered into a share purchase agreement with Capital Maritime pursuant to which we acquired all of Capital Maritime’s interests in the wholly owned subsidiary that owns the M/T Miltiadis M II. The aggregate purchase price for the vessel was $71.25 million and was financed with proceeds from our IPO. The vessel was delivered on March 30, 2010, to us. The transaction was approved by our board of directors following approval by the independent director’s committee. Please see Note 1 (Basis of Presentation and General Information) to our Financial Statements included herein for more information regarding this acquisition, including a detailed explanation of its accounting treatment.
|
5.
|
Related Party Loan – M/T Miltiadis M II.
Prior to its acquisition by us, the vessel-owning company of the M/T Miltiadis M II received a capital contribution from Capital Maritime, made payments to the Manager and other affiliates of Capital Maritime for the provision of certain services. In addition, the vessel-owning company acted as guarantor in a loan entered into on June 26, 2006, by Capital Maritime of up to $187.0 million for the refinancing of the existing debt of certain vessel-owning subsidiaries of Capital Maritime, which was increased by $70.0 million in September 2006 to include the acquisition of the M/T Miltiadis M II. Under this loan agreement Capital Maritime was the borrower and the vessel-owning companies, including the vessel-owning company of the M/T Miltiadis M II, acted as guarantors and all the vessels were provided as collateral to the loan. The loan was comprised of a number of tranches and the guarantors in all tranches were jointly and severally liable under the terms of the loan agreement. On March 31, 2010, the balance of the related party loan for the M/T Miltiadis M II amounting to $31.7 million was fully repaid by Capital Maritime. Please see Note 3 (Transactions with Related Parties) to our Financial Statements included herein for more information regarding this acquisition, including a detailed explanation of its accounting treatment.
|
6.
|
Subscription Agreement.
On March 17, 2010, we entered into a subscription agreement with Crude Carriers Investments Corp. pursuant to which they made a capital contribution to the Company of $40.0 million in exchange for 2,105,263 shares of the Company’s Class B stock upon the completion of our IPO. Under the terms of this agreement Crude Carriers Investments Corp. was entitled, so long as Capital Maritime or any of its affiliates is our manager, to subscribe for an additional number of shares of Class B stock equal to 2.0% of the number of shares of common stock issued, excluding shares of common stock issued in the IPO, shares of common stock issued under our Equity Plan and future equity compensation. These additional shares would be issued for additional nominal consideration equal to their par value. On August 5, 2010, the agreement was amended and Crude Carriers Investments Corp. no longer is entitled to subscribe for additional shares.
|
7.
|
Registration Rights Agreement.
On March 17, 2010, we entered into a registration rights agreement with Crude Carriers Investments Corp. pursuant to which they were granted certain registration rights with respect to our common stock and Class B stock owned by them. Pursuant to the agreement, they have the right, subject to certain terms and conditions, to require us, on up to four separate occasions
|
|
following the expiration of 180 days from the date of our IPO, to register under the Securities Act shares of our common stock, including common stock issuable upon conversion of Class B stock, held by Crude Carriers Investments Corp. for offer and sale to the public (including by way of underwritten public offering) and incidental or “piggyback” rights permitting participation in certain registrations of common stock by us. We will be obligated to pay all expenses incidental to the registration excluding underwriting discounts and commissions.
|
8.
|
Dividends to Crude Carriers Investment Corp
.
and its affiliates
. Crude Carriers Investments Corp., as the owner of all our Class B stock had received quarterly dividends from the Company in the amount of $1.5 million as of December 31, 2010.
|
9.
|
Management Agreement
. On March 17, 2010, we entered into a management agreement with Capital Ship Management, an affiliate of Capital Maritime, pursuant to which Capital Ship Management, our Manager, provides to us commercial, technical, administrative and strategic services necessary to support our business. The fee structure set out in the agreement was amended on August 5, 2010.
|
|
(a)
|
Fee Structure
. We currently pay our Manager a technical management fee at a rate of $869 (revised from $850 as of the March 18, 2011, the first anniversary of the Management Agreement) per vessel per day, a sale and purchase fee equal to 1% of the gross purchase or sale price upon consummation of any purchase or sale of a vessel by us and a commercial services fee of 1.25% of all gross charter revenues generated by each of our vessels. As of December 31, 2010, the sale and purchase fee of 1% paid to our Manager in connection with the acquisition of the M/T Alexander the Great, the M/T Achilleas, the M/T Amoureux and the M/T Aias was $3.25 million.
|
|
(b)
|
In addition, we reimburse our Manager for all of direct and indirect costs, expenses and liabilities incurred in providing services to us, including, but not limited to, employment costs for any personnel of our Manager for time spent on matters related to providing services to us.
|
|
(c)
|
Term and Termination.
Subject to certain termination rights the initial term of the Management Agreement will expire on December 31, 2020. If not terminated, the Management Agreement shall automatically renew for a five-year period and shall thereafter be extended in additional five-year increm
ents if we do not prov
ide notice of termination in the fourth quarter of the year immediately preceding the end of the respective term. Under certain circumstances, including a change of control of the Company, we may be obliged to pay our Manager a termination payment of a lump sum within 30 days following the termination date of the Management Agreement. The termination payment was initially set at $9 million and increased on an annual compound basis in accordance with the total percentage increase, if any, in the Consumer Price Index over the immediately preceding twelve months.
|
10.
|
Business Opportunities Agreement
. On March 1, 2010, we entered into the Business Opportunities Agreement with Capital Maritime reflecting the provisions and principles described below. Under the Business Opportunities Agreement, Capital Maritime and we agreed that either party may pursue any business opportunity of which we, Capital Maritime or its affiliates become aware, subject to certain procedures and conditions. The Business Opportunities Agreement specifies that we have a right to take advantage of certain business opportunities, including certain spot charter, period charter, bareboat charter and vessel purchase opportunities. However, we have a limited time period within which to exercise such right after which Capital Maritime has the right to take advantage of any such opportunities for its own account. For example, we have (a) a maximum of 48 hours to take
|
|
advantage of period and bareboat charter opportunities, (b) a reasonable amount of time in light of the facts and circumstances to take advantage of spot charter opportunities, (c) 120 hours (and an additional 72 hours upon our request) to take advantage of vessel acquisition opportunities and (d) a maximum of 120 hours to take advantage of other business opportunities. The Business Opportunities Agreement shall terminate immediately upon a change of control of Capital Maritime or Crude Carriers and in certain other circumstances, including the termination of the Management Agreement.
|
C.
|
Interest of Experts and Counsel
|
Item 8.
|
Financial Information.
|
|
·
|
Net income (loss)
|
|
·
|
plus
|
|
-
|
depreciation and amortization,
|
|
-
|
non- cash items,
|
|
-
|
loan fees amortization,
|
|
-
|
any write-offs or other non-recurring items
|
|
·
|
less
|
|
-
|
any net income attributable to the historical results of vessels acquired by the company from Capital Maritime,
|
|
-
|
any amount required to maintain a reserve that our board of directors determines from time to time is appropriate for the conduct and growth of the company’s fleet.
|
|
·
|
Our shareholders have no contractual or other legal right to receive dividends under our dividend policy or otherwise.
|
|
·
|
Our board of directors has authority to establish reserves for the prudent conduct and the growth of our business, after giving effect to contingent liabilities, the terms of any credit facilities we may enter into, our other cash needs and the requirements of Marshall Islands law. The establishment of these reserves could result in a reduction in dividends to our shareholders. We do not anticipate the need for reserves at this time.
|
|
·
|
Our board of directors may modify or terminate our dividend policy at any time. Even if our dividend policy is not modified or revoked, the amount of dividends we pay under our dividend policy and the decision to pay any dividend is determined by our board of directors.
|
|
·
|
Marshall Islands law generally prohibits the payment of a dividend when a company is insolvent or would be rendered insolvent by the payment of such a dividend or when the declaration or payment would be contrary to any restriction contained in the company’s articles of incorporation. Dividends may be declared and paid out of surplus only, but if there is no surplus, dividends may be declared or paid out of the net profits for the fiscal year in which the dividend is declared and for the preceding fiscal year.
|
|
·
|
We may lack sufficient cash to pay dividends due to decreases in net voyage revenues or increases in operating expenses, principal and interest payments on outstanding debt, tax expenses, working capital requirements, capital expenditures or other anticipated or unanticipated cash needs.
|
|
·
|
Our dividend policy may be affected by restrictions on dividends under any credit facilities we may enter into, which contain material financial tests and covenants that must be satisfied. If we are unable to satisfy these restrictions included in the credit facilities or if we are otherwise in default under the facilities, we would be prohibited from paying dividends to our shareholders, notwithstanding our dividend policy.
|
|
·
|
While we intend that future acquisitions to expand our fleet will enhance our ability to pay dividends over time, acquisitions could limit our cash available for distribution.
|
B.
|
Significant Changes
|
|
1.
|
On February 3, 2011, the Company’s board of directors declared a dividend of $0.30 per share, which was paid on March 2, 2011, to share holders of record on February 23, 2011.
|
|
2.
|
On March 11, 2011, we elected an additional independent member to our board of directors, bringing the number of members on our board of directors to eight and the number of independent directors to five.
|
Item 9.
|
The Offer and Listing.
|
High
|
Low
|
|
Year Ended:
|
||
December 31, 2010*
|
$18.89
|
$15.24
|
Quarter Ended:
|
||
December 31, 2010
|
$18.24
|
$15.60
|
September 30, 2010
|
$18.65
|
$16.12
|
June 30, 2010
|
$18.89
|
$15.24
|
March 31, 2010*
|
$18.55
|
$16.30
|
Month Ended:
|
||
April 30, 2011**
|
$15.29
|
$14.71
|
March 31, 2011
|
$15.50
|
$14.51
|
February 28, 2011
|
$15.72
|
$14.15
|
January 31, 2011
|
$17.07
|
$15.44
|
December 31, 2010
|
$16.89
|
$15.60
|
November 30, 2010
|
$18.07
|
$15.60
|
October 31, 2010
|
$18.24
|
$16.92
|
|
*
For the period commencing on March 12, 2010.
|
|
**
For the period up to and including April 14, 2011.
|
A.
|
Share Capital
|
B.
|
Articles of Incorporation and By-laws
|
C.
|
Material Contracts
|
|
·
|
Acquisition of M/T Amoureux and the M/T Aias. During April 2010, the Company agreed to acquire two modern sistership Suezmax–class oil tankers, the M/T Amoureux (150,393 dwt) and the M/T Aias (150,096 dwt) from unrelated third parties, for a total purchase price of $66.2 million per vessel under the terms of two separate Memoranda of Agreement. The vessels, which were built in 2008 at Universal Shipbuilding Corporation in Japan, were delivered to the Company on May 10, 2010 and June 3, 2010, respectively. The acquisition of the vessels was financed with proceeds from the IPO and debt from our revolving credit facility, respectively. The acquisition of the two vessels was unanimously approved by our board of directors.
|
|
·
|
Purchase of M/T Alexander the Great from Capital Maritime. Please read “Item 7B: Related-Party Transactions” for a full description of this transaction.
|
|
·
|
Purchase of M/T Achilleas from Capital Maritime. Please read “Item 7B: Related-Party Transactions” for a full description of this transaction.
|
|
·
|
Purchase of M/T Miltiadis M II from Capital Maritime. Please read “Item 7B: Related-Party Transactions” for a full description of this transaction.
|
|
·
|
Revolving Facility Agreement with Nordea Bank Finland PLC, as amended and restated as of September 30, 2010. This revolving credit facility has a total commitment of $200 million, a portion of which has been used to partially finance the acquisition of the M/T Aias and the M/T Achilleas. As of December 31, 2010, we had $65.4 million in undrawn amounts under the facility. The Company also has the option to convert the revolving
|
|
|
credit facility into a term loan facility twelve months following any drawdown. The revolving credit facility bears interest at Libor plus a margin of 3%; once the facility is converted into a term loan facility, the margin will be increased to 3.25% for the amounts that are considered to be a term loan. Borrowings under the credit facility are jointly and severally secured by the vessel-owning companies of the collateral vessels. Please read “Item 5B: Liquidity and Capital Resources—Revolving Credit Facilities” for a full description of our revolving credit facility and certain restrictions imposed on us by this facility.
|
|
·
|
2010 Equity Incentive Plan. On March 1, 2010 the Company adopted an equity incentive plan according to which we may issued restricted stock, stock options, non-qualified stock options, stock appreciation rights and other stock or cash-based awards. Please read “Item 6E: 2010 Equity Incentive Plan” and “Item 7B: Related-Party Transactions” for a full description of the Equity Plan and issuances that have taken place under its terms and Note 11 (Equity Incentive Plan) to our Financial Statements included herein for additional information on our Equity Plan.
|
|
·
|
Management Agreement with Capital Ship Management. Please read “Item 7B: Related-Party Transactions” for a full description of this agreement.
|
|
·
|
Registration Rights Agreement with Crude Carriers Investments Corp. Please read “Item 7B: Related-Party Transactions” for a full description of this agreement.
|
|
·
|
Subscription Agreement with Crude Carriers Investments Corp. Please read “Item 7B: Related-Party Transactions” for a full description of this agreement.
|
|
·
|
Business Opportunity Agreement with Capital Maritime & Trading Corp. Please read “Item 7B: Related-Party Transactions” for a full description of this agreement.
|
D.
|
Exchange Controls and Other Limitations Affecting Shareholders
|
E.
|
Taxation
|
|
(a)
|
it is organized in a qualified foreign country, which is one that grants an “equivalent exemption” from tax to corporations organized in the United States in respect of each category of shipping income for which exemption is being claimed under Section 883, and to which we refer as the “Country of Organization Test”; and
|
|
(b)
|
either:
|
|
(1)
|
more than 50% of the value of its stock is beneficially owned, directly or indirectly, by qualified shareholders, which includes individuals who are “residents” of a qualified foreign country, to which we refer as the “50% Ownership Test”;
|
|
(2)
|
one or more classes of its stock representing, in the aggregate, more than 50% of the combined voting power and value of all classes of its stock are “primarily and regularly traded on one or more established securities markets” in a qualified foreign country or in the United States, to which we refer as the “Publicly Traded Test”; or
|
|
(3)
|
it is a “controlled foreign corporation” and it satisfies an ownership test to which, collectively, we refer as the “CFC Test.”
|
|
·
|
we have, or are considered to have, a fixed place of business in the United States involved in the earning of U.S. source international shipping income; and
|
|
·
|
substantially all of our U.S. source international shipping income is attributable to regularly scheduled transportation, such as the operation of a vessel that follows a published schedule with repeated sailings at regular intervals between the same points for voyages that begin or end in the United States.
|
|
·
|
75% or more of our gross income for the taxable year consists of “passive income” (generally including dividends, interest, gains from the sale or exchange of investment property and rents and royalties other than rents and royalties which are received from unrelated parties in connection with the active conduct of a trade or business, as defined in applicable Treasury regulations); or
|
|
·
|
at least 50% of our assets for the taxable year (averaged over the year and generally determined based upon value) produce or are held for the production of passive income.
|
|
·
|
the gain is effectively connected income (and the gain is attributable to a permanent establishment maintained by the Non-U.S. Holder in the United States if that is required by an applicable income tax treaty); or
|
|
·
|
the Non-U.S. Holder is an individual who is present in the United States for 183 days or more during the taxable year of disposition and certain other conditions are met.
|
|
·
|
fail to provide us with an accurate taxpayer identification number;
|
|
·
|
are notified by the IRS that you have failed to report all interest or dividends required to be shown on your federal income tax returns; or
|
|
·
|
fail to comply with applicable certification requirements.
|
F.
|
Dividends and Paying Agents
|
G.
|
Statements by Experts
|
H.
|
Documents on Display
|
I.
|
Subsidiary Information
|
Item 11.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
Year
|
Amount
|
2011
|
$ 1.3 million
|
2012
|
$ 1.2 million
|
2013
|
$ 1.0 million
|
2014
|
$ 0.8 million
|
2015
|
$ 0.1 million
|
Item 12.
|
Description of Securities Other than Equity Securities.
|
Item 13.
|
Defaults, Dividend, Arrearages and Delinquencies.
|
Item 14.
|
Material Modifications to the Rights of Security Holders and Use of Proceeds.
|
Item 15.
|
Controls and Procedures.
|
Item 16A.
|
Audit Committee Financial Expert.
|
Item 16B.
|
Code of Ethics.
|
Item 16C.
|
Principal Accountant Fees and Services.
|
Our principal accountant for 2010 was Deloitte. The following table shows the fees we paid or accrued for audit services provided by Deloitte for these periods (in thousands of U.S. Dollars).
Fees
|
2010
|
|
Audit Fees (1)
|
$ 651.0
|
|
Audit-Related Fees
|
-
|
|
Tax Fees (2)
|
30.0
|
|
Total
|
$681.0
|
(1)
|
Audit fees represent fees for professional services provided in connection with the audit of our Financial Statements included herein, review of our quarterly consolidated financial statements and audit services provided in connection with our IPO.
|
(2)
|
Tax fees represent fees for professional services provided in connection with various U.S. income tax compliance and information reporting matters.
|
Item 16D.
|
Exemptions from the Listing Standards for Audit Committees.
|
Item 16E.
|
Purchases of Equity Securities by the Issuer and Affiliated Purchasers.
|
Item 16F.
|
Change in Registrant’s Certifying Accountant.
|
Item 16G.
|
Corporate Governance.
|
Item 17.
|
Financial Statements
|
Item 18.
|
Financial Statements
|
Page
|
|
Report of Independent Registered Public Accounting Firm
|
F-1
|
Consolidated Balance Sheets as of December 31, 2010 and 2009
|
F-2
|
Consolidated Statements of Income for the years ended December 31, 2010, 2009 and 2008
|
F-3
|
Consolidated Statements of Stockholder’s Equity for the years ended December 31, 2010, 2009 and 2008
|
F-4
|
Consolidated Statements of Cash Flows for the years ended December 31, 2010, 2009 and 2008
|
F-5
|
Notes to the Consolidated Financial Statements
|
F-6
|
Item 19.
|
Exhibits
|
Exhibit
No.
|
Description
|
1.1
|
Amended and Restated Articles of Incorporation of Crude Carriers Corp. (1)
|
1.2
|
Amended and Restated Bylaws of Crude Carriers Corp. (1)
|
2.1
|
Cancellation of March 31, 2010 Revolving Credit Facility of $100 million with Nordea Bank Finland plc dated April 22, 2010
|
2.2
|
Revolving Credit Facility of $150 million with Nordea Bank Finland plc dated April 22, 2010
|
2.3
|
Restatement and amendment to Revolving Credit Facility with Nordea Bank Finland plc dated September 30, 2010
|
2.4
|
Specimen stock certificate representing Crude Carriers Corp.’s common stock (1)
|
4.1
|
Form of Registration Rights Agreement between Crude Carriers Corp. and Crude Carriers Investments Corp. (1)
|
4.2
|
Form of Subscription Agreement for Class B stock between Crude Carriers Corp. and Crude Carriers Investments Corp. (1)
|
4.3
|
Amendment No.1 to Subscription Agreement dated August 5, 2010
|
4.4
|
Form of Management Agreement between Crude Carriers Corp. and Capital Ship Management Corp. (1)
|
4.5
|
Form of Business Opportunities Agreement between Crude Carriers Corp. and Capital Maritime & Trading Corp. (1)
|
4.6
|
Form of Share Purchase Agreement between Crude Carriers Corp. and Capital Maritime & Trading Corp. for Cooper Consultants Co. (1)
|
4.7
|
Form of Share Purchase Agreement between Crude Carriers Corp. and Capital Maritime & Trading Corp. for Alexander the Great Carriers Corp. (1)
|
4.8
|
Form of Share Purchase Agreement between Crude Carriers Corp. and Capital Maritime & Trading Corp. for Achilleas Carriers Corp. (1)
|
4.9
|
Memorandum of Agreement for acquisition of M/T Amoureux dated April 19, 2010
|
4.10
|
Memorandum of Agreement for acquisition of M/T Aias dated April 19, 2010
|
4.11
|
Crude Carriers 2010 Equity Incentive Plan (1)
|
4.12
|
Form of Restricted Unit Award
|
4.13
|
Amendment No.1 to Management Agreement dated August 5, 2010
|
4.14
|
Amendment No.2 to Management Agreement dated August 6, 2010
|
8.1
|
List of Subsidiaries of Crude Carriers Corp.
|
12.1
|
Rule 13a-14(a) Certification of Crude Carriers Corp.’s Chief Executive Officer
|
12.2
|
Rule 13a-14(a) Certification of Crude Carriers Corp.’s Chief Financial Officer
|
13.1
|
Crude Carriers Corp.’s Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the U.S. Sarbanes-Oxley Act of 2002*
|
13.2
|
Crude Carriers Corp.’s Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the U.S. Sarbanes-Oxley Act of 2002*
|
(1)
|
Previously filed as an exhibit to Crude Carriers Corp.’s Registration Statement on Form F-1 (File No.333-165138), filed with the SEC on March 1, 2010, and incorporated by reference to such Registration Statement.
|
*
|
Furnished only and not filed.
|
CRUDE CARRIERS CORP.
|
|
By:
/s/ Evangelos M. Marinakis
|
|
Name: Evangelos M. Marinakis
Title: Chief Executive Officer
|
As of
December 31, 2010
|
As of
December 31, 2009
|
|
ASSETS
|
||
Current assets
|
||
Cash and cash equivalents
|
$10,925
|
$1
|
Trade accounts receivable
|
5,722
|
1,340
|
Due from related parties (Note 3)
|
-
|
1,878
|
Prepayments and other assets
|
453
|
45
|
Inventories
|
1,630
|
1,411
|
Total current assets
|
18,730
|
4,675
|
Fixed assets
|
||
Vessels, net (Note 4)
|
392,969
|
76,238
|
Total fixed assets
|
392,969
|
76,238
|
Other non-current assets
|
||
Deferred charges, net
|
1,598
|
347
|
Restricted cash
|
5,000
|
-
|
Total non-current assets
|
399,567
|
76,585
|
TOTAL ASSETS
|
$418,297
|
$81,260
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||
Current liabilities
|
||
Current portion of long term debt (Note 5)
|
$9,652
|
$-
|
Current portion of related-party long-term debt (Note 3)
|
-
|
3,161
|
Trade accounts payable
|
1,726
|
1,344
|
Due to related parties (Note 3)
|
2,333
|
27
|
Accrued liabilities (Note 6)
|
2,038
|
569
|
Total current liabilities
|
15,749
|
5,101
|
Long-term liabilities
|
||
Long term debt (Note 5)
|
124,928
|
-
|
Long-term related-party debt (Note 3)
|
-
|
29,299
|
Total long-term liabilities
|
124,928
|
29,299
|
Total liabilities
|
140,677
|
34,400
|
Commitments and contingencies (Note 13)
|
||
Stockholders’ equity (Note 10)
|
||
Common stock (par value $0.0001 per share: 1 billion shares authorized; 13,894,400 issued and outstanding at December 31, 2010.
|
2
|
-
|
Class B stock (par value $0.0001 per share: 100 million shares authorized; 2,105,263 issued and outstanding at December 31, 2010 and December 31, 2009.
|
-
|
-
|
Additional paid-in capital
|
280,793
|
18,500
|
(Accumulated (deficit))/Retained earnings
|
(3,175)
|
28,360
|
Total stockholder’s equity
|
277,620
|
46,860
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$418,297
|
$81,260
|
For the years ended December 31,
|
|||
2010
|
2009
|
2008
|
|
Revenues
|
$55,882
|
$16,870
|
$39,166
|
Expenses:
|
|||
Voyage expenses (Note 7)
|
18,482
|
6,252
|
14,317
|
Voyage expenses- related party (Notes 3, 7)
|
611
|
-
|
-
|
Vessel operating expenses (Note 7)
|
9,152
|
2,457
|
2,351
|
Vessel operating expenses -related party (Notes 3, 7)
|
1,086
|
540
|
540
|
General and administrative expenses (Note 3)
|
3,264
|
-
|
301
|
Vessel depreciation (Note 4)
|
11,317
|
3,357
|
3,356
|
Other operating income
|
(1,286)
|
-
|
-
|
Operating income
|
$13,256
|
$4,264
|
$18,301
|
Other income (expense), net:
|
|||
Interest expense and finance cost
|
(3,687)
|
(530)
|
(1,590)
|
Interest and other income
|
328
|
2
|
1
|
Total other expense, net
|
(3,359)
|
(528)
|
(1,589)
|
Net income
|
$9,897
|
$3,736
|
$16,712
|
Net income per share (basic and diluted) (Note 12):
|
$0.76
|
$1.77
|
$7.94
|
Weighted-average number of shares
|
|||
Common shares (basic and diluted)
|
10,726,027
|
-
|
-
|
Class B shares (basic and diluted)
|
2,105,263
|
2,105,263
|
2,105,263
|
Total shares (basic and diluted)
|
12,831,290
|
2,105,263
|
2,105,263
|
Comprehensive Income
|
Common Stock
|
Class B Stock
|
Additional paid-in capital
|
Retained
Earnings
|
Total
Stockholder’s Equity
|
|||
Number of
Shares
|
Par Value
|
Number of
Shares
|
Par Value
|
|||||
Balance at January 1, 2008
|
-
|
$-
|
2,105,263
|
$-
|
$18,500
|
$7,912
|
$26,412
|
|
Net Income
|
16,712
|
-
|
-
|
-
|
-
|
-
|
16,712
|
16,712
|
Comprehensive Income
|
16,712
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Balance at December 31, 2008
|
-
|
$-
|
2,105,263
|
$-
|
$18,500
|
$24,624
|
$43,124
|
|
Net Income
|
3,736
|
-
|
-
|
-
|
-
|
-
|
3,736
|
3,736
|
Comprehensive Income
|
3,736
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Balance at December 31, 2009
|
-
|
$-
|
2,105,263
|
$-
|
$18,500
|
$28,360
|
$46,860
|
|
Net income
|
9,897
|
9,897
|
9,897
|
|||||
Dividends declared and paid
|
-
|
-
|
-
|
-
|
-
|
(11,003)
|
(11,003)
|
|
Additional paid-in capital of the contributed company retained by CMTC
|
-
|
-
|
-
|
(18,500)
|
-
|
(18,500)
|
||
Distribution of the contributed Company’s retained earnings to CMTC as of March 30, 2010
|
-
|
-
|
-
|
-
|
-
|
(30,429)
|
(30,429)
|
|
Issuance of 13,500,000 common shares (Notes 1, 10)
|
13,500,000
|
2
|
-
|
-
|
237,797
|
-
|
237,799
|
|
Issuance of 2,105,263 Class B shares to Crude Carriers Investment Inc. (Note 10)
|
-
|
-
|
-
|
-
|
40,000
|
-
|
40,000
|
|
Issuance of common stock according to the Company’s equity incentive plan (Note 11)
|
394,400
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Share based compensation expense (Note 11)
|
-
|
-
|
-
|
-
|
768
|
-
|
768
|
|
Difference of net book value of the M/T Miltiadis M II over the cash consideration paid to CMTC (Note 4)
|
-
|
-
|
-
|
-
|
4,158
|
-
|
4,158
|
|
Purchase commission paid to CMTC (Notes 3, 4)
|
-
|
-
|
-
|
-
|
(1,930)
|
-
|
(1,930)
|
|
Comprehensive income
|
9,897
|
|||||||
Balance at December 31, 2010
|
-
|
13,894,400
|
$2
|
2,105,263
|
-
|
$280,793
|
$(3,175)
|
$277,620
|
For the years ended December 31,
|
|||
2010
|
2009
|
2008
|
|
Cash flows from operating activities:
|
|||
Net income
|
$9,897
|
$3,736
|
$16,712
|
Adjustments to reconcile net income to net cash provided by operating activities
:
|
|||
Vessel depreciation
|
11,317
|
3,357
|
3,356
|
Provision for allowance of bad debts
|
-
|
-
|
301
|
Amortization of deferred charges
|
617
|
12
|
14
|
Share based compensation expense (Note 11)
|
768
|
-
|
-
|
Changes in operating assets and liabilities:
|
|||
Trade accounts receivable
|
(7,123)
|
249
|
2,235
|
Due from related parties
|
1,878
|
(1,822)
|
(8)
|
Prepayments and other assets
|
(561)
|
38
|
(21)
|
Inventories
|
(1,474)
|
(626)
|
352
|
Trade accounts payable
|
1,549
|
20
|
(220)
|
Due to related parties
|
(328)
|
(1,764)
|
(1,901)
|
Accrued liabilities
|
2,215
|
(39)
|
39
|
Net cash provided by operating activities
|
18,755
|
3,161
|
20,859
|
Cash flow for investing activities:
|
|||
Vessels’ acquisition
|
(399,274)
|
-
|
-
|
Additions to restricted cash
|
(5,000)
|
-
|
-
|
Net cash used in investing activities
|
(404,274)
|
-
|
-
|
Cash flows from financing activities:
|
|||
Offering proceeds
|
278,545
|
-
|
-
|
Offering expenses paid
|
(719)
|
(27)
|
-
|
Loan proceeds
|
134,580
|
-
|
-
|
(Payment)/receipt of advances from related party
|
(27)
|
27
|
-
|
Due to related party – debt financing
|
-
|
-
|
(16,903)
|
Repayments of related party debt
|
(791)
|
(3,161)
|
(3,966)
|
Payment of loan issuance costs
|
(2,212)
|
-
|
-
|
Commission paid for vessel acquisition (Notes 3, 4)
|
(1,930)
|
-
|
-
|
Dividends paid
|
(11,003)
|
-
|
-
|
Net cash provided by/(used in) financing activities
|
396,443
|
(3,161)
|
(20,869)
|
Net increase in cash and cash equivalents
|
10,924
|
-
|
(10)
|
Cash and cash equivalents at beginning of the period
|
1
|
1
|
11
|
Cash and cash equivalents at end of period
|
$10,925
|
$1
|
$1
|
Supplemental Cash Flow Information
|
|||
Cash paid for interest
|
$2,348
|
$513
|
$1,596
|
Non Cash Investing and Financing activities
|
|||
Net liabilities assumed by CMTC upon contribution of vessel to the Company (Note 9)
|
56,908
|
-
|
-
|
Difference of net book value of the M/T Miltiadis M II over the cash consideration paid to CMTC (Note 4)
|
4,158
|
-
|
-
|
Capital expenditures included in liabilities at the year end.
|
24
|
-
|
-
|
1.
|
Basis of Presentation and General Information
|
|
·
|
Three separate share purchase agreements with Capital Maritime and Trading Corp. (“CMTC”), a company under common control with CRU prior to this Offering, for:
|
|
a.
|
the acquisition of the shares of Cooper Consultants Co., the vessel-owning company of the M/T Miltiadis M II, a modern, 2006-built Suezmax crude tanker, for a total consideration of $71,250;
|
|
b.
|
the acquisition of the shares of Alexander the Great Carriers Corp., the vessel-owning company of the M/T Alexander the Great a new building Very Large Crude Carrier (“VLCC”) which was under construction by Universal Shipbuilding Corporation in Japan, bearing Hull number S-093. The purchase price of this vessel was $96,500;
|
|
c.
|
the acquisition of the shares of Achilleas Carriers Corp., the vessel-owning company of the M/T Achilleas a new building VLCC which was under construction by Universal Shipbuilding Corporation in Japan bearing Hull number S-094. The purchase price of this vessel was $96,500.
|
|
·
|
A subscription agreement pursuant to which at the completion of the Offering CCI made a capital contribution to the Company of $40,000 in exchange for 2,105,263 shares of the Company’s Class B stock.
|
|
·
|
A management agreement with Capital Ship Management Corp. (“CSM” or the “Manager”), a fully owned subsidiary of CMTC, under which it provides to the Company commercial, technical, administrative, investor relations and strategic services.
|
|
·
|
A business opportunities agreement by which we have a right to take advantage of certain business opportunities that may be attractive to CMTC and vice versa.
|
|
·
|
A registration rights agreement pursuant to which the Company grants CCI certain registration rights with respect to the Company’s common stock and Class B stock owned by them.
|
|
·
|
A credit facility of $100,000. The Company signed a commitment letter with Nordea Bank Finland Plc, London Branch for a $100,000 senior secured credit facility (Note 5).
|
|
·
|
The Company’s balance sheets as of December 31, 2010 and December 31, 2009,
|
|
·
|
The Company’s results of operations and cash flows since its incorporation, on October 29, 2009,
|
|
·
|
Cooper Consultants Co., the owner of the M/T Miltiadis M II, balance sheets as of December 31, 2009 and
|
|
·
|
Cooper Consultants Co., results of operations and cash flows for the years ended December 31, 2009, 2008 and for the period from January 1, 2010 through March 30, 2010. During those periods the M/T Miltiadis M II was operated as part of CMTC fleet.
|
Subsidiary
|
Date of
Incorporation
|
Name of Vessel
Owned by
Subsidiary
|
DWT
|
Subsidiary acquired by the Company
|
Vessel’s delivery date to the Company
|
Vessels’ delivery to CMTC
|
Crude Carriers Operating Corp.
|
01/21/2010
|
-
|
-
|
-
|
-
|
-
|
Cooper Consultants Co.
|
04/06/2006
|
M/T Miltiadis M II
|
162,000
|
03/30/2010
|
03/30/2010
|
04/26/2006
|
Alexander the Great Carriers Corp.
|
01/26/2010
|
M/T Alexander
the Great
|
297,958
|
03/17/2010
|
03/26/2010
|
03/26/2010
|
Achilleas Carriers Corp.
|
01/26/2010
|
M/T Achilleas
|
297,863
|
06/17/2010
|
06/25/2010
|
06/25/2010
|
Amoureux Carriers Corp.
|
04/14/2010
|
M/T Amoureux
|
150,000
|
-
|
05/10/2010
|
-
|
Aias Carriers Corp.
|
04/14/2010
|
M/T Aias
|
150,000
|
-
|
06/03/2010
|
-
|
2.
|
Significant Accounting Policies
|
(a)
|
Principles of Consolidation and Combination:
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), after giving retroactive effect to the combination of entity under common control in 2010, 2009 and 2008 as described in Note 1 to the consolidated financial statements; Intercompany balances and transactions have been eliminated upon consolidation. Balances and transactions with CMTC and its affiliates have not been eliminated, but are presented as balances and transactions with related parties.
|
(b)
|
Use of Estimates:
Preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the amounts of revenues and expenses recognized during the reporting period. Actual results could differ from those estimates. Additionally, these consolidated financial statements include allocations for certain expenses, including corporate overhead expenses that are normally incurred by a listed company.
|
(c)
|
Accounting for Revenue, Voyage and Operating Expenses:
Revenues are generated from voyage and time charter agreements. If a time or voyage charter agreement exists, the price is fixed, service is provided and the collection of the related revenue is reasonably assured, revenues are recorded over the term of the charter as service is provided and recognized on a pro-rata basis over the duration of the charter. A voyage is deemed to commence upon the later of the completion of discharge of the vessel’s previous cargo or upon vessel arrival to the agreed upon port based on the terms of a voyage contract that is not cancelable and voyage is deemed to end upon the completion of discharge of the delivered cargo. A time charter contract is deemed to commence from the time of the delivery of the vessel to an agreed port and is deemed to end upon the re-delivery of the vessel at an agreed port and adjusted for the off-hire days that a vessel spends undergoing repairs, maintenance or upgrade work. We do not begin recognizing voyage or time charter revenue until a charter contract has been agreed to both by us and the charterer.
|
(d)
|
Foreign Currency Transactions:
The functional currency of the Company is the United States Dollar because the Company’s vessels operate in international shipping markets that utilize the United States Dollar as the functional currency. The accounting records of the Company are maintained in United States Dollars. Transactions involving other currencies during the year are converted into United States Dollars using the exchange rates in effect at the time of the transactions. At the balance sheet dates, monetary assets and liabilities, which are denominated in currencies other than the United States Dollar, are translated into the functional currency using the exchange rate at that date. Gains or losses resulting from foreign currency transactions and translations are included in foreign currency gains and losses, net in the accompanying consolidated statements of income.
|
(e)
|
Cash and Cash Equivalents:
The Company considers highly-liquid investments such as time deposits and certificates of deposit with an original maturity of three months or less to be cash equivalents.
|
(f)
|
Restricted cash:
For the Company to comply with debt covenants under its credit facility, it must maintain minimum cash deposits equal to $1,000 per vessel. Such deposits are considered by the Company to be restricted cash. As of December 31, 2010 and 2009 restricted cash amounted to $5,000 and $0 and is presented under other non current assets.
|
(g)
|
Trade Accounts Receivable:
The amounts shown as trade accounts receivable, reflect the estimated recoveries from charterers for hire, freight and demurrage billings. At each balance sheet date, all potentially uncollectible accounts are assessed individually for purposes of determining the appropriate provision for doubtful accounts. No allowance for doubtful accounts was established as of December 31, 2010 and 2009.
|
(h)
|
Inventories:
Inventories consist of consumable bunkers, lubricants, spares and stores and are stated at the lower of cost or market value. The cost is determined by the first-in, first-out method.
|
(i)
|
Fixed Assets:
Fixed assets, net consist of vessels which are stated at cost, less accumulated depreciation. Vessel cost consists of the contract price of the vessels and any other expenses to prepare the vessel for its intended use. The vessels are depreciated beginning when they are delivered from the shipyard and ready for their intended use, on a straight-line basis over the remaining economic useful life, after considering the estimated residual value. Residual value calculation is based upon a vessel’s lightweight tonnage multiplied by a scrap rate of $0.2 per light weight ton which represents management’s best estimate of what we expect to receive at the end of the vessel’s useful life. Management estimates the useful life to be 25 years.
|
(j)
|
Impairment of Long-lived Assets:
Impairment loss is recognized on long-lived assets used in operations when indicators of impairment are present and the carrying amount of the long-lived assets is higher than its fair value and it is not recoverable from the undiscounted cash flows estimated to be generated by the assets. In determining future benefits derived from use of long-lived assets, the Company performs an analysis of the anticipated undiscounted future net cash flows of the related long-lived assets. If the carrying value of the related asset exceeds its undiscounted future net cash flows, the carrying value is reduced to its fair value. The Company did not note for the year ended December 31, 2008 any events or changes in circumstances indicating that the carrying amount of its vessels may not be recoverable. However, during 2009 and 2010 market conditions changed as a result of the demand and supply of vessels tonnage affecting charter rates and asset values for tanker vessels. The Company considered these market developments as indicators of potential impairment of the carrying amount of its assets. The Company performed an undiscounted cash flow test as of December 31, 2010 and 2009, determining undiscounted projected net operating cash flows for the vessels and comparing them to the vessels’ carrying values on a vessel by vessel basis. In developing estimates of future cash flows, the Company made assumptions about future charter rates, utilization rates, vessel operating expenses, future dry docking costs and the estimated remaining useful life of the vessels. These assumptions are based on historical trends as well as future expectations that are in line with the historical performance of the Manager and expectations for the vessels’ utilization under the fleet deployment strategy. Based on these assumptions, the Company determined that the undiscounted cash flows supported the vessels’ carrying amounts as of December 31, 2010 and 2009.
|
(k)
|
Deferred Charges:
Deferred charges mainly consist of fees paid to lenders for obtaining new loans or refinancing existing loans and are capitalized as deferred finance charges and amortized to interest expense over the term of the respective loan using the effective interest rate method.
|
(l)
|
Concentration of Credit Risk:
Financial instruments which are potentially subject to significant concentrations of credit risk consist principally of trade accounts receivable. Most of the Company’s revenues were derived from a few charterers. For the year ended December 31, 2010 Shell International Trading and Shipping Inc., Petroleo Brasileiro SA – Petrobrass and Repsol YPF Trading Y Transporte S.A. accounted for 67%, 11% and 11% of total revenue, respectively. For the year ended December 31, 2009 Clearlake Shipping Ltd, ST Shipping and Transport Pte and Standard Tankers Bahamas (an affiliate of Exxon Mobil) accounted for 46%, 24% and 16% of total revenue, respectively. For the year ended December 31, 2008 Petroleo Brasileiro SA, Sun International LTD, Valero Marketing and Supply Company, Petro-Canada and British Petroleum
|
|
Shipping Limited accounted for 31%, 12%, 11%, 10% and 10% of total revenue, respectively. The Company does not obtain rights of collateral from its charterers to reduce its credit risk.
|
(m)
|
Fair Value of Financial Instruments:
The Company applies the accounting guidance relating to fair value measurement for financial assets and liabilities and any other assets and liabilities carried at fair value. This guidance defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The carrying value of trade receivables, due from related party, due to related party, accounts payable and accrued liabilities approximates fair value. The fair values of long-term variable rate bank loans approximate the recorded values, due to their variable interest.
|
(n)
|
Equity incentive plan awards:
Share based compensation expense represents the amortization of the cost of awards granted to the Company’s board of directors (“Employees”) and to employees of the Company’s affiliates and other eligible persons (“Non-employees”), and are included in “General and administrative expenses” in the consolidated statements of income. Share based compensation expense for employee awards that contain a time-based service vesting condition is measured at fair value on the grant date and is amortized using straight line method over the requisite service period. Share based compensation expense for non-employee awards that contain a time-based service vesting condition is measured at fair value as of the financial reporting dates and is amortized using straight line method over the requisite service period.
|
(o)
|
Earnings per Share:
Basic earnings per share are calculated by dividing net income available to common and Class B shareholders less net income allocable to unvested shares by the basic weighted average number of common and Class B shares outstanding during the period. Diluted income per share reflects the potential dilution that could occur if securities or other contracts were exercised. Dilution has been computed by the treasury stock method whereby all of the Company’s dilutive securities (unvested common stock) are assumed to be exercised or converted and the proceeds used to repurchase common shares at the weighted average market price of the Company’s common stock during the relevant periods. The incremental shares (the difference between the number of shares assumed issued and the number of shares assumed purchased) are included in the denominator of the diluted earnings per share computation, if dilutive.
|
(p)
|
Income Taxes:
The Company is not subject to the payment of any Marshall Islands income tax on its income. Instead, a tax is levied based on the tonnage of the vessel, which is included in operating expenses (Note 8).
|
(q)
|
Segment Reporting:
The Company reports financial information and evaluates its operations by charter revenues and not by the length or type of ship employment for its customers, i.e. time or voyage charters. The Company does not use discrete financial information to evaluate the operating results for each such type of charter. Although revenue can be identified for these types of charters, management cannot and does not identify expenses, profitability or other financial information for these charters. As a result, management, including the chief operating decision maker, reviews operating results solely by revenue per day and operating results of the fleet, and thus the Company has determined that it operates under one reportable segment. Furthermore, when the Company charters a vessel to a charterer, the charterer is free to trade the vessel worldwide and, as a result, the disclosure of geographic information is impracticable.
|
(r)
|
Recent Accounting Pronouncements:
There are no recent accounting pronouncements whose adoption would have a material effect on the Company’s consolidated financial statements in the current year or whose adoption would be expected to have an impact on future years.
|
3.
|
Transactions with Related Parties
|
|
·
|
Capital contribution from CMTC;
|
|
·
|
Loan agreements that CMTC entered into, acting as the borrower, for the financing of the acquisition of the M/T Miltiadis M II;
|
|
·
|
Manager payments on behalf of the vessel-owning company and hire receipts from charterers;
|
|
·
|
Management agreement for providing services such as chartering, technical support and maintenance, insurance, consulting, financial and accounting services with different terms and conditions than the management agreement that the Company entered into with CMTC upon the closing of the Offering; and
|
|
·
|
Funds advanced to and received from entities with common ownership.
|
As of December 31, 2010
|
As of December 31, 2009
|
|
Due from Related Parties:
|
||
CSM (a)
|
$-
|
$1,878
|
Total due from related parties
|
$-
|
$1,878
|
Due to Related Parties:
|
||
CMTC loan (b)
|
$-
|
$32,460
|
CCI (c)
|
-
|
27
|
CMTC payments on behalf of CRU and other (d)
|
2,333
|
-
|
Total due to related parties
|
$2,333
|
$32,487
|
For the years ended December 31,
|
|||
2010
|
2009
|
2008
|
|
Voyage expenses
|
$611
|
$-
|
$-
|
Operating expenses
|
1,086
|
540
|
540
|
General and administrative (e)
|
1,288
|
-
|
-
|
(a)
|
CSM:
The balance in this line item relates to funds that are received from charterers, less disbursement made to creditors, including loan principal and loan interest repayments that were made by the Manager on behalf of the vessel-owning company of the M/T Miltiadis M II.
|
(b)
|
CMTC Loans:
On June 26, 2006 CMTC entered into a loan agreement up to $187,000, divided in three tranches (A, B and C), with a bank for the refinancing of the existing debt of 13 vessel-owning subsidiaries. CMTC drew down the amount of $168,600 under the respective loan agreement. On September 15, 2006 CMTC amended the loan agreement with the tranche D to include an additional $70,000 for the financing of the acquisition of the M/T Miltiadis M II (the “related-party loan”). CMTC drew down the amount of $70,000 on the same date. Under this loan agreement CMTC was the borrower and the vessel-owning companies, including the vessel-owning company of the M/T Miltiadis M II, acted as guarantors and all the vessels have been
|
(b)
|
provided as collateral to the loan. The loan was comprised of a number of tranches and the guarantors in all tranches were jointly and severally liable under the terms of the loan agreement.
|
As of December 31, 2010
|
As of December 31, 2009
|
|
Total related-party loan
|
$-
|
$32,460
|
Less: Current portion
|
-
|
(3,161)
|
Long-term portion
|
$-
|
$29,299
|
(c)
|
CCI:
This balance item relates to amount payable to CCI for the offering expenses paid on the Company’s behalf.
|
(d)
|
CMTC payments on behalf of CRU and other:
This balance item mainly relates to payments by the Manager on behalf of the Company and unpaid balances resulting from the consultancy agreements with related parties.
|
(e)
|
General and administrative expenses:
include consultancy fees and employment costs for consultants and personnel of the Manager and its affiliates.
|
4.
|
Vessels
|
As of December 31, 2010
|
As of December 31, 2009
|
|
Cost:
|
||
Vessel cost
|
416,593
|
88,545
|
Less: accumulated depreciation
|
(23,624)
|
(12,307)
|
Vessels, net
|
$392,969
|
$76,238
|
5.
|
Long Term Debt
|
Bank Loans
|
Vessels Acquired
|
As of December 31, 2010
|
|
(i)
|
Issued on June 2, 2010
maturing in March 2015.
|
M/T Aias
|
$59,580
|
(ii)
|
Issued on June 22, 2010
maturing in March 2015.
|
M/T Achilleas
|
$75,000
|
Total
|
$134,580
|
||
Less: Current portion
|
(9,652)
|
||
Long-term portion
|
$124,928
|
Bank loans repayment schedule
|
|||
Year ending December 31,
|
i
|
ii
|
Total
|
2011
|
4,964
|
4,688
|
9,652
|
2012
|
9,930
|
9,375
|
19,305
|
2013
|
9,930
|
9,375
|
19,305
|
2014
|
9,930
|
9,375
|
19,305
|
2015
|
24,826
|
42,187
|
67,013
|
Total
|
$ 59,580
|
$ 75,000
|
$ 134,580
|
6.
|
Accrued Liabilities
|
As of December 31, 2010
|
As of December 31, 2009
|
|
Loan interest and loan fees
|
$725
|
$4
|
Wages and crew expenses
|
508
|
75
|
Other operating expenses
|
180
|
85
|
Accrued general and administrative expenses
|
106
|
267
|
Voyage expenses and commissions
|
519
|
138
|
Total
|
$2,038
|
$569
|
7.
|
Voyage Expenses and Vessel Operating Expenses
|
For the years ended December 31,
|
|||
2010
|
2009
|
2008
|
|
Voyage expenses:
|
|||
Commissions
|
$ 1,217
|
$ 423
|
$ 604
|
Commissions - related party (Note 3)
|
611
|
-
|
-
|
Bunkers
|
13,985
|
5,353
|
11,601
|
Port expenses
|
3,193
|
476
|
2,096
|
Other
|
87
|
-
|
16
|
Total
|
$ 19,093
|
$ 6,252
|
$ 14,317
|
Operating expenses:
|
|||
Crew costs and related costs
|
$ 4,886
|
$ 1,195
|
$ 1,243
|
Insurance expense
|
1,243
|
460
|
362
|
Spares, repairs, maintenance and other expenses
|
1,050
|
388
|
282
|
Stores and lubricants
|
1,677
|
324
|
376
|
Management fees
|
74
|
-
|
-
|
Management fees – related party
(Note 3)
|
1,086
|
540
|
540
|
Other operating expenses
|
222
|
90
|
88
|
Total
|
$ 10,238
|
$ 2,997
|
$ 2,891
|
8.
|
Income Taxes
|
9.
|
Cash Flow
|
As of March 30, 2010
|
|
Cash and cash equivalents
|
$-
|
Trade receivables
|
2,741
|
Prepayments and other assets
|
153
|
Inventories
|
1,255
|
Deferred charges
|
50
|
Total assets
|
4,199
|
Trade accounts payable
|
1,191
|
Due to related parties
|
27,768
|
Accrued liabilities
|
479
|
Related-party loan
|
31,669
|
Total liabilities
|
61,107
|
Net liabilities assumed by
CMTC upon vessel’s contribution
to the Company
|
56,908
|
10.
|
Stockholder’s Equity
|
|
·
|
upon any transfer of shares of Class B stock to a holder other than CCI or any of its affiliates, such shares of Class B stock will automatically convert into Common Stock upon such transfer and
|
|
·
|
all Class B stock shares will automatically convert into shares of Common Stock if the aggregate number of shares of Common Stock and Class B stock beneficially owned by CCI and its affiliates falls below 2,105,263, the number of shares of Class B stock issued to CCI for its $40,000 subscription made in connection with this offering.
|
|
·
|
Capital contribution made by CMTC for the acquisition of the M/T Miltiadis M II in 2006 amounting to $18,500 which was retained by CMTC upon the completion of the Offering in March 2010;
|
|
·
|
A reduction of $30,429 that represents the cumulative earnings of the M/T Miltiadis M II retained by CMTC upon the vessel’s transfer to the Company;
|
|
·
|
Net proceeds of $277,799 from the Company’s Offering in NYSE on March 17, 2010 and the contribution of $40,000 by CCI (Note 1);
|
|
·
|
Difference of $4,158 between the net book value of the M/T Miltiadis M II over the cash consideration paid to CMTC for the acquisition of the shares of the vessel-owning company by the Company (Note 4);
|
|
·
|
Net income of $9,897;
|
|
·
|
Sale and Purchase commission of $1,930 on the gross acquisition price of the M/T Alexander the Great and the M/T Achilleas (Notes 3, 4)
|
|
·
|
Dividend distribution of $11,003. During the period from March 17, 2010 to December 31, 2010 the Company declared and paid dividends of $11,003 to its share holders; and
|
|
·
|
Additional issuance of common stock according to the Company’s equity incentive awards (Note 11).
|
11.
|
Equity Incentive Plan
|
Employee share based compensation
|
Non-Employee share based compensation
|
|||
Unvested Shares
|
Shares
|
Weighted-average grant-date fair value
|
Shares
|
Weighted-average award-date fair value
|
Unvested on January 1, 2010
|
-
|
-
|
||
Granted
|
200,000
|
$ 3,616
|
194,400
|
$ 3,515
|
Vested
|
-
|
-
|
-
|
-
|
Forfeited
|
-
|
-
|
-
|
-
|
Unvested on December 31, 2010
|
200,000
|
$ 3,616
|
194,400
|
$ 3,515
|
12.
|
Net income per share
|
For the years ended December 31,
|
|||
Numerators
|
2010
|
2009
|
2008
|
Net income
|
$ 9,897
|
$ 3,736
|
$ 16,712
|
Less: Company’s net income allocated to unvested shares
|
(101)
|
-
|
-
|
Net income available to common and class B shareholders
|
$9,796
|
$3,736
|
$16,712
|
Denominators
|
|||
Weighted average number of common and class B shares outstanding - basic and diluted
|
12,831,290
|
2,105,263
|
2,105,263
|
Net income per share:
|
|||
Basic and diluted
|
$0.76
|
$1.77
|
$7.94
|
13.
|
Commitments and Contingencies
|
|
·
|
Information available prior to the issuance of the financial statement indicates that it is probable that a liability has been incurred at the date of the financial statements.
|
|
·
|
The amount of the loss can be reasonably estimated.
|
|
·
|
The amount is material.
|
14.
|
Subsequent Events
|
(a)
|
Dividends:
On February 3, 2011, the Company’s board of directors declared a dividend of $0.30 per share, which was paid on March 2, 2011, to share holders of record on February 23, 2011.
|
Clause
|
Page
|
|
|
||
1
|
INTERPRETATION
|
1
|
|
||
2
|
FACILITY
|
14
|
|
||
3
|
POSITION OF THE LENDERS
|
14
|
|
||
4
|
DRAWDOWN
|
15
|
|
||
5
|
INTEREST
|
16
|
|
||
6
|
INTEREST PERIODS
|
18
|
|
||
7
|
DEFAULT INTEREST
|
18
|
|
||
8
|
REPAYMENT AND PREPAYMENT
|
19
|
|
||
9
|
CONDITIONS PRECEDENT
|
22
|
|
||
10
|
REPRESENTATIONS AND WARRANTIES
|
22
|
|
||
11
|
GENERAL UNDERTAKINGS
|
24
|
|
||
12
|
CORPORATE UNDERTAKINGS
|
29
|
|
||
13
|
INSURANCE
|
29
|
|
||
14
|
SHIP COVENANTS
|
34
|
|
||
15
|
SECURITY COVER
|
37
|
|
||
16
|
PAYMENTS AND CALCULATIONS
|
39
|
|
||
17
|
APPLICATION OF RECEIPTS
|
40
|
|
||
18
|
APPLICATION OF EARNINGS
|
41
|
|
||
19
|
EVENTS OF DEFAULT
|
42
|
|
||
20
|
FEES AND EXPENSES
|
46
|
|
||
21
|
INDEMNITIES
|
47
|
|
||
22
|
NO SET-OFF OR TAX DEDUCTION
|
49
|
|
||
23
|
ILLEGALITY, ETC
|
50
|
|
||
24
|
INCREASED COSTS
|
50
|
|
||
25
|
SET OFF
|
52
|
|
||
26
|
TRANSFERS AND CHANGES IN LENDING OFFICES
|
52
|
27
|
VARIATIONS AND WAIVERS
|
56
|
|
||
28
|
NOTICES
|
57
|
|
||
29
|
SUPPLEMENTAL
|
58
|
|
||
30
|
LAW AND JURISDICTION
|
59
|
SCHEDULE 1
|
LENDERS AND COMMITMENTS
|
61
|
|
||
SCHEDULE 2
|
DRAWDOWN NOTICE
|
62
|
|
||
SCHEDULE 3
|
CONDITION PRECEDENT DOCUMENTS
|
63
|
|
||
SCHEDULE 4
|
TRANSFER CERTIFICATE
|
67
|
|
||
SCHEDULE 5
|
FORM OF COMPLIANCE CERTIFICATE
|
71
|
|
||
SCHEDULE 6
|
MANDATORY COST FORMULA
|
73
|
EXECUTION PAGE
|
75
|
(1)
|
CRUDE CARRIERS CORP.
, a corporation incorporated in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 (the “
Borrower
”);
|
(2)
|
THE BANKS AND FINANCIAL INSTITUTIONS
listed in Schedule 1, as
Lenders
;
|
(3)
|
NORDEA BANK FINLAND PLC, LONDON BRANCH
, as
Lead Arranger
;
|
(4)
|
NORDEA BANK FINLAND PLC, LONDON BRANCH
, as
Agent
; and
|
(5)
|
NORDEA BANK FINLAND PLC, LONDON BRANCH
, as
Security
Trustee
.
|
(A)
|
The Lenders have agreed to make available to the Borrower:
|
|
(i)
|
an acquisition facility of up to $140,000,000 for the purpose of financing up to 100 per cent. of the purchase price of each Acquired Ship; and
|
|
(ii)
|
a working capital facility of up to $10,000,000 for working capital and other general corporate purposes.
|
1
|
INTERPRETATION
|
1.1
|
Definitions.
Subject to Clause 1.5, in this Agreement:
|
|
(a)
|
R.S. Platou Shipbrokers a.s.;
|
|
(b)
|
Fearnleys AS;
|
|
(c)
|
Pareto Shipbrokers AS;
|
|
(d)
|
Braemar Shipping Services Plc;
|
|
(e)
|
Arrow Valuations;
|
|
(f)
|
Clarksons Plc; and
|
|
(g)
|
any other independent sale and purchase shipbroker which the Agent (with the authorisation of the Majority Lenders and the agreement of the Borrower) has approved or selected,
|
|
(a)
|
the Maturity Date (or such later date as the Agent may, with the authorisation of the Majority Lenders, agree with the Borrower); or
|
|
(b)
|
if earlier, the date on which the Total Commitments are fully cancelled or terminated;
|
|
(a)
|
except to the extent that they fall within paragraph (b);
|
|
(i)
|
all freight, hire and passage moneys;
|
|
(ii)
|
compensation payable to that Guarantor or the Security Trustee in the event of requisition of that Ship for hire;
|
|
(iii)
|
remuneration for salvage and towage services;
|
|
(iv)
|
demurrage and detention moneys;
|
|
(v)
|
damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of that Ship; and
|
|
(vi)
|
all moneys which are at any time payable under any Insurances in respect of loss of hire; and
|
|
(b)
|
if and whenever that Ship is employed on terms whereby any moneys falling within paragraphs (a)(i) to (vi) are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to that Ship;
|
|
(a)
|
any claim by any governmental, judicial or regulatory authority which arises out of an Environmental Incident or an alleged Environmental Incident or which relates to any Environmental Law; or
|
|
(b)
|
any claim by any other person which relates to an Environmental Incident or to an alleged Environmental Incident,
|
|
(a)
|
any release of Environmentally Sensitive Material from that Ship; or
|
|
(b)
|
any incident in which Environmentally Sensitive Material is released from a vessel other than that Ship and which involves a collision between that Ship and such other vessel or some other incident of navigation or operation, in either case, in connection with which that Ship is actually or potentially liable to be arrested, attached, detained or injuncted and/or that Ship and/or the Guarantor owning that Ship and/or any operator and/or any manager of that Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action; or
|
|
(c)
|
any other incident in which Environmentally Sensitive Material is released otherwise than from that Ship and in connection with which that Ship is actually or potentially liable to be arrested and/or where the Guarantor owning that Ship and/or any operator and/or any manager of that Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action;
|
|
(a)
|
this Agreement;
|
|
(b)
|
the Fee Letter(s);
|
|
(c)
|
the Agency and Trust Deed;
|
|
(d)
|
the Guarantees;
|
|
(e)
|
the Mortgages;
|
|
(f)
|
the Charter Assignments (if any);
|
|
(g)
|
the General Assignments;
|
|
(h)
|
the Account Security Deeds;
|
|
(i)
|
the Shares Pledges; and
|
|
(j)
|
any other document (whether creating a Security Interest or not) which is executed at any time by the Borrower or any other person as security for, or to establish any form of subordination or priorities arrangement in relation to, any amount payable to the Lenders under this Agreement or any of the other documents referred to in this definition;
|
|
(a)
|
for principal, interest or any other sum payable in respect of any moneys borrowed or raised by the debtor;
|
|
(b)
|
under any loan stock, bond, note or other security issued by the debtor;
|
|
(c)
|
under any acceptance credit, guarantee or letter of credit facility or dematerialised equivalent made available to the debtor;
|
|
(d)
|
under a financial lease, a deferred purchase consideration arrangement or any other agreement having the commercial effect of a borrowing or raising of money by the debtor;
|
|
(e)
|
under any foreign exchange transaction, any interest or currency swap or any other kind of derivative transaction entered into by the debtor; or
|
|
(f)
|
under a guarantee, indemnity or similar obligation entered into by the debtor in respect of a liability of another person which would fall within paragraphs (a) to (e) if the references to the debtor referred to the other person;
|
|
(a)
|
m.v. “MILTIADIS M II” registered in the name of Cooper Consultants Co. (one of the Guarantors) under the flag of Liberia;
|
|
(b)
|
the Liberian flag m.v. “TANGO” currently registered in the name of Frisia Schiffahrt mt “Tango” GmbH & Co. KG which is to be sold to, and to be registered
|
|
(c)
|
m.v. “ALEXANDER THE GREAT” registered in the name of Alexander the Great Carriers Corp. (one of the Guarantors) under the flag of Liberia,
|
|
(a)
|
all policies and contracts of insurance, including entries of that Ship in any protection and indemnity or war risks association, effected in respect of that Ship, its Earnings or otherwise in relation to that Ship whether before, on or after the date of this Agreement; and
|
|
(b)
|
all rights and other assets relating to, or derived from, any of the foregoing, including any rights to a return of a premium and any rights in respect of any claim whether or not the relevant policy, contract of insurance or entry has expired on or before the date of this Agreement;
|
|
(a)
|
Nordea Bank Finland Plc, London Branch, acting in such capacity through its office at 8th Floor, City Place House, 55 Basinghall Street, London EC2V 5NB; and
|
|
(b)
|
any other Lender notified by the Agent to the Borrower as being a lead arranger under this Agreement,
|
|
(a)
|
the applicable Screen Rate; or
|
|
(b)
|
if no Screen Rate is available for that period, the rate per annum determined by the Agent to be the arithmetic mean (rounded upwards to 4 decimal places) of the
|
|
(a)
|
before an Advance has been made, Lenders whose Commitments total 66.66 per cent. of the Total Commitments; and
|
|
(b)
|
after an Advance has been made, Lenders whose Contributions total 66.66 per cent. of the Loan;
|
|
(a)
|
on any of the rights or remedies of he Creditor Parties (or any of them) under the Finance Documents (or any of them) or the general law in relation to the Finance Documents (or any of them);
|
|
(b)
|
on the discharge and performance by the Borrower or any Security Party of an of its liabilities and obligations under the Finance Documents (or any of them);
|
|
(c)
|
with respect to this Agreement or any other Finance Document; or
|
|
(d)
|
on the property, assets, nature of assets, operations, liabilities, condition or prospects (financial or otherwise) of the Borrower or any Security Party;
|
|
(a)
|
Security Interests created by the Finance Documents;
|
|
(b)
|
liens for unpaid master’s and crew’s wages in accordance with usual maritime practice;
|
|
(c)
|
liens for salvage;
|
|
(d)
|
liens arising by operation of law for not more than 2 months’ prepaid hire under any charter in relation to any Ship not prohibited by this Agreement;
|
|
(e)
|
liens for master’s disbursements incurred in the ordinary course of trading and any other lien arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of any Ship, provided such liens do not secure amounts more than 30 days overdue (unless the overdue amount is being contested by the Guarantor owning that Ship in good faith by appropriate steps) and subject, in the case of liens for repair or maintenance, to Clause 14.12(g);
|
|
(f)
|
any Security Interest created in favour of a plaintiff or defendant in any proceedings or arbitration as security for costs and expenses while the Borrower or (as the case may be) the relevant Security Party is actively prosecuting or defending such proceedings or arbitration in good faith; and
|
|
(g)
|
Security Interests arising by operation of law in respect of taxes which are not overdue for payment or in respect of taxes being contested in good faith by appropriate steps and in respect of which appropriate reserves have been made;
|
|
(a)
|
any Finance Document;
|
|
(b)
|
any policy or contract of insurance contemplated by or referred to in Clause 13 or any other provision of this Agreement or another Finance Document;
|
|
(c)
|
any other document contemplated by or referred to in any Finance Document; and
|
|
(d)
|
any document which has been or is at any time sent by or to a Servicing Bank in contemplation of or in connection with any Finance Document or any policy, contract or document falling within paragraphs (b) or (c);
|
|
(a)
|
England and Wales;
|
|
(b)
|
the country under the laws of which the company is incorporated or formed;
|
|
(c)
|
a country in which the company has the centre of its main interests or in which the company’s central management and control is or has recently been exercised;
|
|
(d)
|
a country in which the overall net income of the company is subject to corporation tax, income tax or any similar tax;
|
|
(e)
|
a country in which assets of the company (other than securities issued by, or loans to, related companies) having a substantial value are situated, in which the company maintains a branch or permanent place of business, or in which a Security Interest created by the company must or should be registered in order to ensure its validity or priority; and
|
|
(f)
|
a country the courts of which have jurisdiction to make a winding up, administration or similar order in relation to the company, whether as main or territorial or ancillary proceedings or which would have such jurisdiction if their assistance were requested by the courts of a country referred to in paragraphs (b) or (c);
|
|
(a)
|
any transaction or matter contemplated by, arising out of, or in connection with a Pertinent Document; or
|
|
(b)
|
any statement relating to a Pertinent Document or to a transaction or matter falling within paragraph (a);
|
|
(a)
|
a mortgage, charge (whether fixed or floating) or pledge, any maritime or other lien or any other security interest of any kind;
|
|
(b)
|
the security rights of a plaintiff under an action
in rem
; and
|
|
(c)
|
any arrangement entered into by a person (A) the effect of which is to place another person (B) in a position which is similar, in economic terms, to the position in which B would have been had he held a security interest over an asset of A; but this paragraph (c) does not apply to a right of set off or combination of accounts conferred by the standard terms of business of a bank or financial institution;
|
|
(a)
|
all amounts which have become due for payment by the Borrower or any Security Party under the Finance Documents have been paid;
|
|
(b)
|
no amount is owing or has accrued (without yet having become due for payment) under any Finance Document;
|
|
(c)
|
neither the Borrower nor any Security Party has any future or contingent liability under Clause 20, 21 or 22 or any other provision of this Agreement or another Finance Document; and
|
|
(d)
|
the Agent, the Security Trustee and the Majority Lenders do not consider that there is a significant risk that any payment or transaction under a Finance Document would be set aside, or would have to be reversed or adjusted, in any present or possible future bankruptcy of the Borrower or a Security Party or in any present or possible future proceeding relating to a Finance Document or any asset covered (or previously covered) by a Security Interest created by a Finance Document;
|
|
(a)
|
actual, constructive, compromised, agreed or arranged total loss of that Ship;
|
|
(b)
|
any expropriation, confiscation, requisition or acquisition of that Ship, whether for full consideration, a consideration less than its proper value, a nominal consideration or without any consideration, which is effected by any government or official authority or by any person or persons claiming to be or to represent a government or official authority (excluding a requisition for hire for a fixed period not exceeding 1 year without any right to an extension) unless it is within 1 month redelivered to the full control of the Guarantor owning that Ship; and
|
|
(c)
|
any arrest, capture, seizure or detention of that Ship (including any hijacking or theft) unless it is within 2 months redelivered to the full control of the Guarantor owning that Ship;
|
|
(a)
|
in the case of an actual loss of that Ship, the date on which it occurred or, if that is unknown, the date when that Ship was last heard of;
|
|
(b)
|
in the case of a constructive, compromised, agreed or arranged total loss of that Ship, the earliest of:
|
|
(i)
|
the date on which a notice of abandonment is given to the insurers; and
|
|
(ii)
|
the date of any compromise, arrangement or agreement made by or on behalf of the Guarantor owning that Ship with that Ship’s insurers in which the insurers agree to treat that Ship as a total loss; and
|
|
(c)
|
in the case of any other type of total loss, on the date (or the most likely date) on which it appears to the Agent that the event constituting the total loss occurred;
|
1.2
|
Construction of certain terms.
In this Agreement:
|
1.3
|
Meaning of “month”.
A period of one or more “months” ends on the day in the relevant calendar month numerically corresponding to the day of the calendar month on which the period started (“
the numerically corresponding day
”), but:
|
(a)
|
on the Business Day following the numerically corresponding day if the numerically corresponding day is not a Business Day or, if there is no later Business Day in the same calendar month, on the Business Day preceding the numerically corresponding day; or
|
(b)
|
on the last Business Day in the relevant calendar month, if the period started on the last Business Day in a calendar month or if the last calendar month of the period has no numerically corresponding day,
|
1.4
|
Meaning of “subsidiary”.
A company (S) is a subsidiary of another company (P) if:
|
(a)
|
a majority of the issued shares in S (or a majority of the issued shares in S which carry unlimited rights to capital and income distributions) are directly owned by P; or
|
(b)
|
P has direct control over a majority of the voting rights attaching to the issued shares of S; or
|
(c)
|
P has the direct power to appoint or remove a majority of the directors of S;
|
1.5
|
General Interpretation.
In this Agreement:
|
(a)
|
references to, or to a provision of, a Finance Document or any other document are references to it as amended or supplemented, whether before the date of this Agreement or otherwise;
|
(b)
|
references to, or to a provision of, any law include any amendment, extension, re-enactment or replacement, whether made before the date of this Agreement or otherwise;
|
(c)
|
words denoting the singular number shall include the plural and vice versa; and
|
(d)
|
Clauses 1.1 to 1.5 apply unless the contrary intention appears.
|
1.6
|
Headings.
In interpreting a Finance Document or any provision of a Finance Document, all clause, sub-clause and other headings in that and any other Finance Document shall be entirely disregarded.
|
2
|
FACILITY
|
2.1
|
Amount of facility.
Subject to the other provisions of this Agreement, the Lenders shall make an aggregate loan facility not exceeding $150,000,000 available to the Borrower consisting of the Acquisition Facility and the Working Capital Facility.
|
2.2
|
Lenders’ participations in Loan.
Subject to the other provisions of this Agreement, each Lender shall participate in each Advance in the proportion which, as at the relevant Drawdown Date, its Commitment bears to the Total Commitments.
|
2.3
|
Purpose of Loan.
|
(a)
|
The Borrower undertakes with each Creditor Party to use each Advance under the Acquisition Facility only for the purpose stated in Recital (A)(i).
|
(b)
|
The Borrower undertakes with each Creditor Party to use each Advance under the Working Capital Facility only for the purpose stated in Recital (A)(ii).
|
3
|
POSITION OF THE LENDERS
|
3.1
|
Interests of Lenders several.
The rights of the Lenders under this Agreement are several.
|
3.2
|
Individual Lender’s right of action.
Each Lender shall be entitled to sue for any amount which has become due and payable by the Borrower to it under this Agreement without joining any Lead Arranger, the Agent, the Security Trustee or any other Lender as additional parties in the proceedings.
|
3.3
|
Proceedings by individual Lender requiring Majority Lender consent.
Except as provided in Clause 3.2, no Lender may commence proceedings against the Borrower or any Security Party in connection with a Finance Document without the prior consent of the Majority Lenders.
|
3.4
|
Obligations of Lenders several.
The obligations of the Lenders under this Agreement are several; and a failure of a Lender to perform its obligations under this Agreement shall not result in:
|
(a)
|
the obligations of the other Lenders being increased; nor
|
(b)
|
the Borrower, any Security Party or any other Lender being discharged (in whole or in part) from its obligations under any Finance Document,
|
4
|
DRAWDOWN
|
4.1
|
Request for Advance.
Subject to the following conditions, the Borrower may request an Advance to be made by ensuring that the Agent receives a completed Drawdown Notice not later than 11.00 a.m. (London time) 3 Business Days prior to the intended Drawdown Date.
|
4.2
|
Availability.
The conditions referred to in Clause 4.1 are that:
|
(a)
|
an Advance shall be made available under either the Acquisition Facility or the Working Capital Facility;
|
(b)
|
a Drawdown Date has to be a Business Day during the Availability Period;
|
(c)
|
the aggregate amount of the Advances under the Acquisition Facility shall not exceed the Acquisition Facility;
|
(d)
|
the aggregate amount of the Advances under the Working Capital Facility shall not exceed the Working Capital Facility;
|
(e)
|
the amount of an Advance under the Acquisition Facility shall not exceed the total acquisition cost payable by the buyer under the Purchase Contract for the Acquired Ship to which that Advance relates on the Drawdown Date for that Advance (and, for the avoidance of doubt, no Advance shall be used for the purpose of financing part or all of the acquisition cost of an Initial Ship);
|
(f)
|
immediately following the making of the Advance, the Loan will not exceed 40 per cent. of the aggregate market value of all of the Ships then subject to a Mortgage (
Provided that
no Ship then subject to a Mortgage will be included in the calculation set out in this Clause unless the Agent has first received for that Ship all of the documents and evidence described in Part B of Schedule 3, each in form and substance satisfactory to the Agent and its lawyers); and
|
(g)
|
the aggregate amount of the Advances shall not exceed the Total Commitments.
|
4.3
|
Notification to Lenders of receipt of a Drawdown Notice.
The Agent shall promptly notify the Lenders that it has received a Drawdown Notice and shall inform each Lender of:
|
(a)
|
the amount of the Advance and the Drawdown Date;
|
(b)
|
the amount of that Lender’s participation in the Advance; and
|
(c)
|
the duration of the first Interest Period.
|
4.4
|
Drawdown Notice irrevocable.
A Drawdown Notice must be signed by an authorised signatory of the Borrower; and once served, a Drawdown Notice cannot be revoked without the prior consent of the Agent, acting on the authorisation of the Majority Lenders.
|
4.5
|
Lenders to make available Contributions.
Subject to the provisions of this Agreement, each Lender shall, on and with value on each Drawdown Date, make available to the Agent for the account of the Borrower the amount due from that Lender on that Drawdown Date under Clause 2.2.
|
4.6
|
Disbursement of Advance.
Subject to the provisions of this Agreement, the Agent shall on each Drawdown Date pay to the Borrower the amounts which the Agent receives from the Lenders under Clause 4.5; and that payment to the Borrower shall be made:
|
(a)
|
to the account which the Borrower specifies in the Drawdown Notice; and
|
(b)
|
in the like funds as the Agent received the payments from the Lenders.
|
4.7
|
Disbursement of Advance to third party.
The payment by the Agent under Clause 4.6 shall constitute the making of the Advance and the Borrower shall at that time become indebted, as principal and direct obligor, to each Lender in an amount equal to that Lender’s Contribution.
|
5
|
INTEREST
|
5.1
|
Payment of normal interest.
Subject to the provisions of this Agreement, interest on each Advance in respect of each Interest Period applicable to that Advance shall be paid by the Borrower on the last day of that Interest Period.
|
5.2
|
Normal rate of interest.
Subject to the provisions of this Agreement, the rate of interest on each Advance in respect of each Interest Period applicable to that Advance shall be the aggregate of the Margin, the Mandatory Cost (if any) and LIBOR for that Interest Period.
|
5.3
|
Payment of accrued interest.
In the case of an Interest Period longer than 3 months, accrued interest shall be paid every 3 months during that Interest Period and on the last day of that Interest Period.
|
5.4
|
Notification of Interest Periods and rates of normal interest.
The Agent shall notify the Borrower and each Lender of:
|
(a)
|
each rate of interest; and
|
(b)
|
the duration of each Interest Period,
|
5.5
|
Obligation of Reference Banks to quote.
A Lender which is a Reference Bank shall use all reasonable efforts to supply the quotation required of it for the purposes of fixing a rate of interest under this Agreement.
|
5.6
|
Absence of quotations by Reference Banks.
If any Reference Bank fails to supply a quotation, the Agent shall determine the relevant LIBOR on the basis of the quotations supplied by the other Reference Bank or Banks; but if 2 or more of the Reference Banks fail to provide a quotation, the relevant rate of interest shall be set in accordance with the following provisions of this Clause 5.
|
5.7
|
Market disruption.
The following provisions of this Clause 5 apply if:
|
(a)
|
no screen rate is available for an Interest Period and 2 or more of the Reference Banks do not, before 1.00 p.m. (London time) on the Quotation Date for an Interest Period, provide quotations to the Agent in order to fix LIBOR; or
|
(b)
|
at least 1 Business Day before the start of an Interest Period, Lenders having Contributions together amounting to more than 50 per cent. of the Loan (or, if an Advance has not been made, Commitments amounting to more than 50 per cent. of the Total Commitments) notify the Agent that LIBOR fixed by the Agent would not accurately reflect the cost to those Lenders of funding their respective Contributions (or any part of them) during the Interest Period in the London Interbank Market at or about 11.00 a.m. (London time) on the Quotation Date for the Interest Period; or
|
(c)
|
at least 1 Business Day before the start of an Interest Period, the Agent is notified by a Lender (the “
Affected Lender
”) that for any reason it is unable to obtain Dollars in the London Interbank Market in order to fund its Contribution (or any part of it) during the Interest Period.
|
5.8
|
Notification of market disruption.
The Agent shall promptly notify the Borrower and each of the Lenders stating the circumstances falling within Clause 5.7 which have caused its notice to be given.
|
5.9
|
Suspension of drawdown.
If the Agent’s notice under Clause 5.8 is served before an Advance is made:
|
(a)
|
in a case falling within Clauses 5.7(a) or (b), the Lenders’ obligations to make the Advance;
|
(b)
|
in a case falling within Clause 5.7(c), the Affected Lender’s obligation to participate in the Advance,
|
5.10
|
Negotiation of alternative rate of interest.
If the Agent’s notice under Clause 5.8 is served after an Advance is made, the Borrower, the Agent and the Lenders or (as the case may be) the Affected Lender shall use reasonable endeavours to agree, within the 30 days after the date on which the Agent serves its notice under Clause 5.8 (the “
Negotiation Period
”), an alternative interest rate or (as the case may be) an alternative basis for the Lenders or (as the case may be) the Affected Lender to fund or continue to fund their or its Contribution during the Interest Period concerned.
|
5.11
|
Application of agreed alternative rate of interest.
Any alternative interest rate or an alternative basis which is agreed during the Negotiation Period shall take effect in accordance with the terms agreed.
|
5.12
|
Alternative rate of interest in absence of agreement.
If an alternative interest rate or alternative basis is not agreed within the Negotiation Period, and the relevant circumstances are continuing at the end of the Negotiation Period, then the Agent shall, with the agreement of each Lender or (as the case may be) the Affected Lender, set an interest period and interest rate representing the cost of funding of the Lenders or (as the case may be) the Affected Lender in Dollars or in any available currency of their or its Contribution plus the Margin plus the Mandatory Cost (if any) from whatever source(s) as each Lender or (as the case may be) the Affected Lender may reasonably select; and the procedure provided for by this Clause 5.12 shall be repeated if the relevant circumstances are continuing at the end of the interest period so set by the Agent.
|
5.13
|
Notice of prepayment.
If the Borrower does not agree with an interest rate set by the Agent under Clause 5.12, the Borrower may give the Agent not less than 5 Business Days’ notice of its intention to prepay at the end of the interest period set by the Agent.
|
5.14
|
Prepayment; termination of Commitments.
A notice under Clause 5.13 shall be irrevocable; the Agent shall promptly notify the Lenders or (as the case may require) the Affected Lender of the Borrower’s notice of intended prepayment; and:
|
(a)
|
on the date on which the Agent serves that notice, the Total Commitments or (as the case may require) the Commitment of the Affected Lender shall be cancelled (with such cancellation to be applied against the Acquisition Facility and the Working Capital Facility pro rata to their respective amounts); and
|
(b)
|
on the last Business Day of the interest period set by the Agent, the Borrower shall prepay (without premium or penalty) the Loan or, as the case may be, the Affected Lender’s Contribution, together with accrued interest thereon at the applicable rate plus the Margin plus the Mandatory Cost (if any).
|
5.15
|
Application of prepayment.
The provisions of Clause 8 shall apply in relation to the prepayment.
|
6
|
INTEREST PERIODS
|
6.1
|
Commencement of Interest Periods.
The first Interest Period applicable to an Advance shall commence on the Drawdown Date of that Advance and each subsequent Interest Period shall commence on the expiry of the preceding Interest Period.
|
6.2
|
Duration of normal Interest Periods.
Subject to Clauses 6.3 and 6.4, each Interest Period shall be:
|
(a)
|
1, 3 or 6 months as notified by the Borrower to the Agent not later than 11.00 a.m. (London time) 3 Business Days before the commencement of the Interest Period;
|
(b)
|
in the case of the first Interest Period applicable to the second and any subsequent Advance under the Working Capital Facility, a period ending on the last day of the Interest Period applicable to the first Advance under the Working Capital Facility then current, whereupon all the Advances under the Working Capital Facility shall be consolidated and treated as a single Advance under the Working Capital Facility;
|
(c)
|
3 months, if the Borrower fails to notify the Agent by the time specified in paragraph (a); or
|
(d)
|
such other period as the Agent may, with the authorisation of all the Lenders, agree with the Borrower.
|
6.3
|
Duration of Interest Periods for repayment instalments.
In respect of an amount due to be repaid under Clause 8 on a particular Repayment Date, an Interest Period shall end on that Repayment Date.
|
6.4
|
Non-availability of matching deposits for Interest Period selected.
If, after the Borrower has selected and the Lenders have agreed an Interest Period longer than 6 months, any Lender notifies the Agent by 11.00 a.m. (London time) on the second Business Day before the commencement of the Interest Period that it is not satisfied that deposits in Dollars for a period equal to the Interest Period will be available to it in the London Interbank Market when the Interest Period commences, the Interest Period shall be of 6 months.
|
7
|
DEFAULT INTEREST
|
7.1
|
Payment of default interest on overdue amounts.
The Borrower shall pay interest in accordance with the following provisions of this Clause 7 on any amount payable by the Borrower under any Finance Document which the Agent, the Security Trustee or the other designated payee does not receive on or before the relevant date, that is:
|
(a)
|
the date on which the Finance Documents provide that such amount is due for payment; or
|
(b)
|
if a Finance Document provides that such amount is payable on demand, the date on which the demand is served; or
|
(c)
|
if such amount has become immediately due and payable under Clause 19.4, the date on which it became immediately due and payable.
|
7.2
|
Default rate of interest.
Interest shall accrue on an overdue amount from (and including) the relevant date until the date of actual payment (as well after as before judgment) at the rate per annum determined by the Agent to be 2 per cent. above:
|
(a)
|
in the case of an overdue amount of principal, the higher of the rates set out at Clauses 7.3(a) and (b); or
|
(b)
|
in the case of any other overdue amount, the rate set out at Clause 7.3(b).
|
7.3
|
Calculation of default rate of interest.
The rates referred to in Clause 7.2 are:
|
(a)
|
the rate applicable to the overdue principal amount immediately prior to the relevant date (but only for any unexpired part of any then current Interest Period);
|
(b)
|
the Margin plus the Mandatory Cost (if any) plus, in respect of successive periods of any duration (including at call) up to 3 months which the Agent may select from time to time:
|
|
(i)
|
LIBOR; or
|
|
(ii)
|
if the Agent (after consultation with the Reference Banks) determines that Dollar deposits for any such period are not being made available to any Reference Bank by leading banks in the London Interbank Market in the ordinary course of business, a rate from time to time determined by the Agent by reference to the cost of funds to the Reference Banks from such other sources as the Agent (after consultation with the Reference Banks) may from time to time determine.
|
7.4
|
Notification of interest periods and default rates.
The Agent shall promptly notify the Lenders and the Borrower of each interest rate determined by the Agent under Clause 7.3 and of each period selected by the Agent for the purposes of paragraph (b) of that Clause; but this shall not be taken to imply that the Borrower is liable to pay such interest only with effect from the date of the Agent’s notification.
|
7.5
|
Payment of accrued default interest.
Subject to the other provisions of this Agreement, any interest due under this Clause shall be paid on the last day of the period by reference to which it was determined; and the payment shall be made to the Agent for the account of the Creditor Party to which the overdue amount is due.
|
7.6
|
Compounding of default interest.
Any such interest which is not paid at the end of the period by reference to which it was determined shall thereupon be compounded.
|
8
|
REPAYMENT AND PREPAYMENT
|
8.1
|
Repayment.
|
(a)
|
The Borrower shall repay each Advance under the Acquisition Facility by two instalments as follows:
|
|
(i)
|
a first instalment in an amount equal to two thirds of the amount of that Advance drawndown to be repaid on the date falling 9 months after the Drawdown Date of that Advance (or, if earlier, the Maturity Date); and
|
|
(ii)
|
a second instalment in an amount equal to the outstanding amount of that Advance to be repaid on the date falling 12 months after the Drawdown Date of that Advance (or, if earlier, the Maturity Date).
|
(b)
|
The Borrower shall repay each Advance under the Working Capital Facility in full on the Maturity Date.
|
8.2
|
Maturity Date.
On the Maturity Date, the Borrower shall additionally pay to the Agent for the account of the Creditor Parties all sums then accrued or owing under this Loan Agreement or any other Finance Document.
|
8.3
|
Voluntary prepayment.
Subject to the following conditions, the Borrower may prepay the whole or any part of any Advance.
|
8.4
|
Conditions for voluntary prepayment.
The conditions referred to in Clause 8.3 are that:
|
(a)
|
a partial prepayment shall be $1,000,000 or an integral multiple of $1,000,000;
|
(b)
|
the Agent has received from the Borrower at least 10 days’ prior written notice specifying the amount to be prepaid and the date on which the prepayment is to be made; and
|
(c)
|
the Borrower has provided evidence satisfactory to the Agent that any consent required by the Borrower or any Security Party in connection with the prepayment has been obtained and remains in force, and that any requirement relevant to this Agreement which affects the Borrower or any Security Party has been complied with.
|
8.5
|
Effect of notice of prepayment.
A prepayment notice may not be withdrawn or amended without the consent of the Agent, given with the authorisation of the Majority Lenders, and the amount specified in the prepayment notice shall become due and payable by the Borrower on the date for prepayment specified in the prepayment notice.
|
8.6
|
Notification of notice of prepayment.
The Agent shall notify the Lenders promptly upon receiving a prepayment notice, and shall provide any Lender which so requests with a copy of any document delivered by the Borrower under Clause 8.4(c).
|
8.7
|
Mandatory prepayment.
Without prejudice to Clause 15, the Borrower shall be obliged to prepay the Loan by an amount at least equal to the Required Prepayment Amount (as defined below):
|
(a)
|
if a Ship is sold, on or before the date on which the sale is completed by delivery of that Ship to the buyer; or
|
(b)
|
if a Ship becomes a Total Loss, on the earlier of the date falling 120 days after the Total Loss Date and the date of receipt by the Security Trustee of the proceeds of insurance relating to such Total Loss,
|
|
(i)
|
an amount equal to the Loan multiplied by a fraction where the numerator is the market value (determined as provided in Clause 15.3 on the basis of valuations provided to the Agent which are no older than 60 days before the date of prepayment) of the Ship which is the subject of sale or Total Loss and the denominator is the aggregate market value (determined as provided in Clause 15.3 on the basis of valuations provided to the Agent which are no older than 60 days before the date of prepayment) of all of the Ships then subject to a Mortgage immediately before such sale or Total Loss (
Provided that
no Ship then subject to a Mortgage will be included in the calculation set out in this Clause unless the Agent has first received for that Ship all of the documents and evidence described in Part B of Schedule 3, each in form and substance satisfactory to the Agent and its lawyers); or
|
|
(ii)
|
such amount required to ensure that following the prepayment required by this Clause 8.7 the Loan does not exceed 40 per cent. of the aggregate market value (determined as provided in Clause 15.3 on the basis of valuations provided to the Agent which are no older than 60 days before the date of prepayment) of all of the Ships then subject to a Mortgage (excluding, for the avoidance of doubt, the Ship which is the subject of sale or Total Loss) (
Provided that
no Ship then subject to a Mortgage will be included in the calculation set out in this Clause unless the Agent has first received for that Ship all of the documents and evidence described in Part B of Schedule 3, each in form and substance satisfactory to the Agent and its lawyers).
|
8.8
|
Amounts payable on prepayment.
A prepayment shall be made together with accrued interest (and any other amount payable under Clause 21 or otherwise) in respect of the amount prepaid and, if the prepayment is not made on the last day of an Interest Period together with any sums payable under Clause 21.1(b) but without premium or penalty.
|
8.9
|
Reborrowing
. Subject to the other provisions of this Agreement, any amount prepaid which is applied against the Loan may be reborrowed prior to the expiry of the Availability Period.
|
8.10
|
Voluntary cancellation.
Subject to the following conditions, the Borrower may cancel the whole or any part of the Total Commitments.
|
8.11
|
Conditions for cancellation of Commitment.
The conditions referred to in Clause 8.10 are that:
|
(a)
|
a partial cancellation shall be an $1,000,000 or an integral multiple of $1,000,000;
|
(b)
|
the Agent has received from the Borrower at least 3 Business Days’ prior written notice specifying the amount of the Total Commitments to be cancelled and the date on which the cancellation is to take effect; and
|
(c)
|
the Total Commitments following the cancellation shall not be less than the Loan.
|
8.12
|
Effect of notice of cancellation.
The service of a cancellation notice given under Clause 8.11 shall cause the amount of the Total Commitments specified in the notice to be permanently cancelled; and such cancellation of the Total Commitments shall be applied against (i) the Commitments of the Lenders pro rata to their respective amounts and (ii) the Acquisition Facility and the Working Capital Facility pro rata to their respective amounts.
|
9
|
CONDITIONS PRECEDENT
|
9.1
|
Documents, fees and no default.
Each Lender’s obligation to contribute to an Advance is subject to the following conditions precedent:
|
(a)
|
that, on or before the service of the first Drawdown Notice, the Agent receives the documents and evidence described in Part A of Schedule 3 and Part B of Schedule 3 in relation to each of the Initial Ships, each in form and substance satisfactory to the Agent and its lawyers;
|
(b)
|
that, on or before the Drawdown Date for any Advance under the Acquisition Facility but prior to the making of that Advance, the Agent receives (or is satisfied that it will receive immediately following the making of that Advance) the documents and evidence described in Part B of Schedule 3 in relation to the Acquired Ship to which that Advance relates, each in form and substance satisfactory to the Agent and its lawyers;
|
(c)
|
that, on or before the service of the first Drawdown Notice, the Agent has received all of the fees required to be paid under Clause 20.1 and the Fee Letter(s) and the Agent has received payment of the expenses referred to in Clause 20.2;
|
(d)
|
that both at the date of each Drawdown Notice and at each Drawdown Date:
|
|
(i)
|
no Event of Default or Potential Event of Default has occurred and is continuing or would result from the borrowing of the Advance;
|
|
(ii)
|
the representations and warranties in Clause 10.1 and those of the Borrower or any Security Party which are set out in the other Finance Documents would be
|
|
(iii)
|
none of the circumstances contemplated by Clause 5.7 has occurred and is continuing;
|
(e)
|
that, if the ratio set out in Clause 15.1 were applied immediately following the making of the Advance, the Borrower would not be obliged to provide additional security or prepay part of the Loan under that Clause; and
|
(f)
|
that the Agent has received, and found to be acceptable to it, any further opinions, consents, agreements and documents in connection with the Finance Documents which the Agent may, with the reasonable authorisation of the Majority Lenders, request by notice to the Borrower prior to the Drawdown Date.
|
9.2
|
Waiver of conditions precedent.
If the Majority Lenders, at their discretion, permit an Advance to be borrowed before certain of the conditions referred to in Clause 9.1 are satisfied, the Borrower shall ensure that those conditions are satisfied within 10 Business Days after the Drawdown Date (or such longer period as the Agent may, with the authorisation of the Majority Lenders, specify).
|
10
|
REPRESENTATIONS AND WARRANTIES
|
10.1
|
General.
The Borrower represents and warrants to each Creditor Party as follows.
|
10.2
|
Status.
The Borrower is duly incorporated and validly existing and in good standing under the laws of the Marshall Islands.
|
10.3
|
Share capital and ownership.
On the date of this Agreement, the Borrower has an authorised share capital of 1,200,000,000 consisting of (x) 1,000,000,000 registered shares of common stock of par value $0.0001 each, (y) 100,000,000 registered shares of Class B stock of par value $0.0001 each and (z) 100,000,000 registered shares of preferred stock of par value $0.0001 each; and on the date of this Agreement, the Borrower has issued 13,500,000 shares of common stock and 2,105,263 shares of Class B Stock, all of which shares are fully paid and non-assessable.
|
10.4
|
Corporate power.
The Borrower has the corporate capacity, and has taken all corporate action and obtained all consents necessary for it:
|
(a)
|
to execute the Finance Documents to which the Borrower is a party; and
|
(b)
|
to borrow under this Agreement and to make all the payments contemplated by, and to comply with, those Finance Documents.
|
10.5
|
Consents in force.
All the consents referred to in Clause 10.4 remain in force and nothing has occurred which makes any of them liable to revocation.
|
10.6
|
Legal validity; effective Security Interests.
The Finance Documents to which the Borrower is a party, do now or, as the case may be, will, upon execution and delivery (and, where applicable, registration as provided for in the Finance Documents):
|
(a)
|
constitute the Borrower’s legal, valid and binding obligations enforceable against the Borrower in accordance with their respective terms; and
|
(b)
|
create legal, valid and binding Security Interests enforceable in accordance with their respective terms over all the assets to which they, by their terms, relate,
|
10.7
|
No third party Security Interests.
Without limiting the generality of Clause 10.6, at the time of the execution and delivery of each Finance Document:
|
(a)
|
the Borrower will have the right to create all the Security Interests which that Finance Document purports to create; and
|
(b)
|
no third party will have any Security Interest (except for Permitted Security Interests) or any other interest, right or claim over, in or in relation to any asset to which any such Security Interest, by its terms, relates.
|
10.8
|
No conflicts.
The execution by the Borrower and each Security Party of each Finance Document to which it is a party, and the borrowing by the Borrower of the Loan, and its compliance with each Finance Document to which it is a party will not involve or lead to a contravention of:
|
(a)
|
any law or regulation; or
|
(b)
|
its constitutional documents; or
|
(c)
|
any contractual or other obligation or restriction which is binding on it or any of its assets.
|
10.9
|
No withholding taxes.
All payments which the Borrower is liable to make under the Finance Documents may be made without deduction or withholding for or on account of any tax payable under any law of any Pertinent Jurisdiction.
|
10.10
|
No default.
No Event of Default or Potential Event of Default has occurred.
|
10.11
|
Information.
All information which has been provided in writing by or on behalf of the Borrower or any Security Party to any Creditor Party in connection with any Finance Document satisfied the requirements of Clause 11.3; all audited and unaudited accounts which have been so provided satisfied the requirements of Clause 11.5; and there has been no material adverse change in the financial position or state of affairs of the Borrower from that disclosed in the latest of those accounts.
|
10.12
|
No litigation.
No legal or administrative action involving the Borrower or any Security Party (including action relating to any Finance Document (or any document executed in connection with any Finance Document) or any alleged or actual breach of the ISM Code or the ISPS Code) has been commenced or taken or, to the Borrower’s knowledge, is likely to be commenced or taken which, in either case, has or would reasonably be likely to have a Material Adverse Effect.
|
10.13
|
Validity and completeness of Purchase Contracts.
Each Purchase Contract constitutes valid, binding and enforceable obligations of the parties to that Purchase Contract respectively in accordance with the terms of that Purchase Contract; and
|
(a)
|
the copy of each Purchase Contract delivered to the Agent before the date of this Agreement is a true and complete copy; and
|
(b)
|
no amendments or additions to any Purchase Contract have been agreed nor has any party to a Purchase Contract waived any of its rights under that Purchase Contract.
|
10.14
|
No rebates etc.
There is no agreement or understanding to allow or pay any rebate, premium, commission, discount or other benefit or payment (howsoever described) to the Borrower or any Security Party in connection with the purchase by any Guarantor of any
|
Acquired Ship, other than as disclosed to the Lenders in writing on or prior to the Drawdown Date of the Advance relating to that Acquired Ship.
|
10.15
|
Compliance with certain undertakings.
At the date of this Agreement, the Borrower is in compliance with Clauses 11.7 and 11.10.
|
10.16
|
Taxes paid.
The Borrower and each Security Party has paid all taxes applicable to, or imposed on or in relation to that party, the business of that party or any Ship owned by that party.
|
10.17
|
ISM Code and ISPS Code compliance.
All requirements of the ISM Code and the ISPS Code as they relate to any Guarantor, any Approved Manager and any Ship have been complied with.
|
10.18
|
No money laundering.
Without prejudice to the generality of Clause 2.3, in relation to the borrowing by the Borrower of each Advance, the performance and discharge of its obligations and liabilities under the Finance Documents, and the transactions and other arrangements effected or contemplated by the Finance Documents to which it is a party, the Borrower confirms that it is acting for its own account and that the foregoing will not involve or lead to contravention of any law, official requirement or other regulatory measure or procedure implemented to combat “money laundering” (as defined in Article 1 of the Directive (91/308/EEC) of the Council of the European Communities).
|
11
|
GENERAL UNDERTAKINGS
|
11.1
|
General.
The Borrower undertakes with each Creditor Party to comply with the following provisions of this Clause 11 at all times during the Security Period except as the Agent may, with the authorisation of the Majority Lenders, otherwise permit.
|
11.2
|
No disposal of assets.
Save pursuant to a transaction on commercial arms’ length terms for full consideration, the Borrower will not transfer, lease or otherwise dispose of:
|
(a)
|
all or a substantial part of its assets, whether by one transaction or a number of transactions, whether related or not; or
|
(b)
|
any debt payable to it or any other right (present, future or contingent right) to receive a payment, including any right to damages or compensation.
|
11.3
|
Information provided to be accurate.
All financial and other information which is provided in writing by or on behalf of the Borrower under or in connection with any Finance Document will be true and not misleading and will not omit any material fact or consideration.
|
11.4
|
Provision of financial statements etc.
The Borrower will send to the Agent:
|
(a)
|
as soon as possible, but in no event later than 150 days after the end of each financial year of the Borrower, the audited consolidated accounts of the Borrower and its subsidiaries and audited individual accounts of the Borrower;
|
(b)
|
as soon as possible, but in no event later than 60 days after the end of each quarter in each financial year of the Borrower, unaudited consolidated accounts (including an income statement and a balance sheet) of the Borrower and its subsidiaries and unaudited individual accounts (including an income statement and a balance sheet) of the Borrower, each certified as to their correctness by the president of the Borrower;
|
(c)
|
together with each set of accounts provided under sub-Clause (a) or (b), a duly completed certificate in the form set out in Schedule 5 (or such other format approved by the Agent) signed by the president of the Borrower, confirming compliance with the financial
|
(d)
|
together with each set of accounts provided under sub-Clause (b) at the end of the second or fourth quarter in each financial year of the Borrower, valuations showing the market value (determined as provided in Clause 15.3) of each Ship and with each valuation no older than 30 days prior to the date of delivery to the Agent.
|
11.5
|
Form of financial statements.
All accounts (audited and unaudited) delivered under Clause 11.4 will:
|
(a)
|
be prepared in accordance with all applicable laws and GAAP consistently applied;
|
(b)
|
give a true and fair view of the state of affairs of the Borrower and its subsidiaries at the date of those accounts and of their profit for the period to which those accounts relate; and
|
(c)
|
fully disclose or provide for all significant liabilities of the Borrower and its subsidiaries.
|
11.6
|
Shareholder, creditor and other notices.
The Borrower will send the Agent, at the same time as they are despatched:
|
(a)
|
copies of all communications (which either the Borrower is legally obliged to send or which are otherwise material) which are despatched to the Borrower’s shareholders or creditors or any class of them; and
|
(b)
|
a copy of any filing made by the Borrower with, or any report or other document forwarded by the Borrower to, the New York Stock Exchange.
|
11.7
|
Consents and compliance with laws.
|
(a)
|
The Borrower will maintain in force and promptly obtain or renew, and will promptly send certified copies to the Agent of, all consents required:
|
|
(i)
|
for the Borrower to perform its obligations under any Finance Document; and
|
|
(ii)
|
for the validity or enforceability of any Finance Document,
|
(b)
|
Without prejudice to the other obligations under the Finance Documents, the Borrower shall comply in all respects with all laws and regulations to which it may be subject.
|
11.8
|
Maintenance of Security Interests.
The Borrower will:
|
(a)
|
at its own cost, do all that it reasonably can to ensure that any Finance Document validly creates the obligations and the Security Interests which it purports to create; and
|
(b)
|
without limiting the generality of paragraph (a), at its own cost, promptly register, file, record or enrol any Finance Document with any court or authority in all Pertinent Jurisdictions, pay any stamp, registration or similar tax in all Pertinent Jurisdictions in respect of any Finance Document, give any notice or take any other step which, in the opinion of the Majority Lenders, is or has become necessary or desirable for any Finance Document to be valid, enforceable or admissible in evidence or to ensure or protect the priority of any Security Interest which it creates.
|
11.9
|
Notification of litigation.
The Borrower will provide the Agent with details of any legal or administrative action involving the Borrower, any Security Party or any Ship, the Earnings of any Ship or the Insurances of any Ship as soon as such action is instituted or it becomes apparent to the Borrower or any Security Party that it is likely to be instituted, unless it is clear that the legal or administrative action cannot be considered material in the context of any Finance Document.
|
11.10
|
Principal place of business.
The Borrower will not establish, or do anything as a result of which it would be deemed to have, a place of business in the USA or the UK. The Borrower will, as soon as reasonably practicable after such change, notify the Agent of any change in its place(s) of business.
|
11.11
|
Confirmation of no default.
The Borrower will, within 5 Business Days after service by the Agent of a written request, serve on the Agent a notice which is signed by 2 directors of the Borrower and which:
|
(a)
|
states that no Event of Default or Potential Event of Default has occurred which is continuing; or
|
(b)
|
states that no Event of Default or Potential Event of Default has occurred which is continuing, except for a specified event or matter, of which all material details are given.
|
11.12
|
Notification of default.
The Borrower will notify the Agent as soon as the Borrower becomes aware of:
|
(a)
|
the occurrence of an Event of Default or a Potential Event of Default; or
|
(b)
|
any matter which indicates that an Event of Default or a Potential Event of Default may have occurred;
|
11.13
|
Provision of further information.
The Borrower will, as soon as practicable after receiving the request, provide the Agent with any additional financial or other information relating:
|
(a)
|
to the Borrower, any Ship, the Earnings of any Ship or the Insurances of any Ship; or
|
(b)
|
to any other matter relevant to, or to any provision of, a Finance Document,
|
11.14
|
Provision of copies and translation of documents.
The Borrower will supply the Agent with a sufficient number of copies of the documents referred to above to provide 1 copy for each Creditor Party; and if the Agent so requires in respect of any of those documents, the Borrower will provide a certified English translation prepared by a translator approved by the Agent.
|
11.15
|
“Know your customer” checks.
If:
|
(a)
|
the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement;
|
(b)
|
any change in the status of the Borrower or any Security Party after the date of this Agreement; or
|
(c)
|
a proposed assignment or transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer,
|
11.16
|
Financial covenants.
The Borrower shall ensure that at all times during the Security Period:
|
(a)
|
commencing on and from 30 June 2010, the ratio of EBITDA to Net Interest Expense shall be no less than 3.0:1.0;
|
(b)
|
the aggregate of Cash and Cash Equivalents shall be equal to or greater than an amount equal to $1,000,000 multiplied by the number of Ships subject to a Mortgage; and
|
(c)
|
the ratio of Stockholders Equity to Total Assets shall be no less than 30:100.
|
|
(a)
|
certificates of deposit of, or time deposits or overnight bank deposits with, any Lender or any commercial bank whose short-term securities are rated at least A-2 by Standard and Poor’s Rating Group and P-3 by Moody’s Investor Services, Inc. having maturities of 12 months or less from the date of acquisition;
|
|
(b)
|
commercial paper of, or money market accounts or funds with or issued by, any Lender or by an issuer rated at least A-2 by Standard & Poor’s Ratings Group and P-3 by Moody’s Investor Services, Inc. and having an original tenor of 12 months or less; and
|
|
(c)
|
medium term fixed or floating rate notes of any Lender or an issuer rated at least AA- by Standard & Poor’s Rating Group and/or Aa3 by Moody’s Investor Services, Inc. at the time of acquisition and having a remaining term of 12 months or less from the date of acquisition,
|
12
|
CORPORATE UNDERTAKINGS
|
12.1
|
General.
The Borrower also undertakes with each Creditor Party to comply with the following provisions of this Clause 12 at all times during the Security Period except as the Agent may, with the authorisation of the Majority Lenders, otherwise permit.
|
12.2
|
Maintenance of status.
The Borrower will maintain its separate corporate existence and remain in good standing under the laws of the Marshall Islands.
|
12.3
|
Negative undertakings.
The Borrower will not:
|
(a)
|
carry on any business not authorised by the Borrower’s constitutional documents; or
|
(b)
|
pay any dividend or make any other form of distribution or effect any form of redemption, purchase or return of share capital save that a dividend may be paid if, both at the time the Borrower declares the dividend and also at the time the Borrower is to pay the dividend, no Event of Default has occurred and is continuing or will occur as a result of the declaration or (as the case may be) payment of such dividend; or
|
(c)
|
provide any form of credit or financial assistance to:
|
|
(i)
|
a person who is directly or indirectly interested in the Borrower’s share or loan capital; or
|
|
(ii)
|
any company in or with which such a person is directly or indirectly interested or connected,
|
(d)
|
open or maintain any account for the purpose of (or relating to) a Guarantor and/or a Ship with any bank or financial institution except accounts with the Agent and the Security Trustee for the purposes of the Finance Documents and then only
Provided that
each such account is subject to an Account Security Deed;
|
(e)
|
acquire any shares or other securities other than US or UK Treasury bills and certificates of deposit issued by major North American or European banks;
|
(f)
|
enter into any form of amalgamation, merger or de-merger or any form of reconstruction or reorganisation; or
|
(g)
|
change its name (without having first given prior notice to the Agent) or its fiscal year end date.
|
13
|
INSURANCE
|
13.1
|
General.
The Borrower also undertakes with each Creditor Party to procure that each Guarantor will comply with the following provisions of this Clause 13 at all times during the Security Period (in the case of an Acquired Ship, after that Acquired Ship has been delivered to the relevant Guarantor under the Purchase Contract for that Acquired Ship) except as the Agent may, with the authorisation of the Majority Lenders, otherwise permit.
|
13.2
|
Maintenance of obligatory insurances.
Each Guarantor shall keep each Ship owned by it insured at the expense of that Guarantor against:
|
(a)
|
fire and usual marine risks (including hull and machinery, excess risks, hull interest and (depending on the level of the hull and machinery policies) freight interest);
|
(b)
|
war risks;
|
(c)
|
protection and indemnity risks; and
|
(d)
|
any other risks against which the Security Trustee considers, having regard to practices and other circumstances prevailing at the relevant time, it would in the opinion of the Security Trustee be reasonable for that Guarantor to insure and which are specified by the Security Trustee by notice to that Guarantor.
|
13.3
|
Terms of obligatory insurances.
Each Guarantor shall effect such insurances in relation to each Ship owned by it:
|
(a)
|
in Dollars;
|
(b)
|
in the case of fire and usual marine risks (including hull interest and freight interest) and war risks, in an amount on an agreed value basis at least the greater of (i) together with the other Ships, 120 per cent. of the Loan and (ii) the market value of that Ship;
|
(c)
|
in the case of fire and usual marine risks (excluding hull interest and freight interest), in an amount on an agreed value basis at least the greater of (i) together with the other Ships, 100 per cent. of the Loan and (ii) 80 per cent. of the market value of that Ship;
|
(d)
|
in the case of oil pollution liability risks, for an aggregate amount equal to the highest level of cover from time to time available under basic protection and indemnity club entry and in the international marine insurance market;
|
(e)
|
in relation to protection and indemnity risks in respect of that Ship’s full tonnage;
|
(f)
|
on approved terms; and
|
(g)
|
through approved brokers and with approved insurance companies and/or underwriters or, in the case of war risks and protection and indemnity risks, in approved war risks and protection and indemnity risks associations.
|
13.4
|
Further protections for the Creditor Parties.
In addition to the terms set out in Clause 13.3, each Guarantor shall procure that the obligatory insurances in relation to each Ship owned by that Guarantor shall:
|
(a)
|
subject always to paragraph (b), name that Guarantor as the sole named assured unless the interest of every other named assured is limited:
|
|
(i)
|
in respect of any obligatory insurances for hull and machinery and war risks;
|
|
(A)
|
to any provable out-of-pocket expenses that that other named assured has incurred and which form part of any recoverable claim on underwriters; and
|
|
(B)
|
to any third party liability claims where cover for such claims is provided by the policy (and then only in respect of discharge of any claims made against it); and
|
|
(ii)
|
in respect of any obligatory insurances for protection and indemnity risks, to any recoveries that that other named assured is entitled to make by way of reimbursement following discharge of any third party liability claims made specifically against that other named assured;
|
(b)
|
whenever the Security Trustee requires, name (or be amended to name) the Security Trustee as additional named assured for its rights and interests, warranted no operational interest and with full waiver of rights of subrogation against the Security Trustee, but without the Security Trustee thereby being liable to pay (but having the right to pay) premiums, calls or other assessments in respect of such insurance;
|
(c)
|
name the Security Trustee as loss payee with such directions for payment as the Security Trustee may specify;
|
(d)
|
provide that all payments by or on behalf of the insurers under the obligatory insurances to the Security Trustee shall be made without set-off, counterclaim or deductions or condition whatsoever;
|
(e)
|
provide that such obligatory insurances shall be primary without right of contribution from other insurances which may be carried by the Security Trustee or any other Creditor Party; and
|
(f)
|
provide that the Security Trustee may make proof of loss if that Guarantor fails to do so.
|
13.5
|
Renewal of obligatory insurances.
Each Guarantor shall in relation to each Ship owned by it:
|
(a)
|
at least 21 days before the expiry of any obligatory insurance:
|
|
(i)
|
notify the Security Trustee of the brokers (or other insurers) and any protection and indemnity or war risks association through or with whom that Guarantor proposes to renew that obligatory insurance and of the proposed terms of renewal; and
|
|
(ii)
|
obtain the Security Trustee’s approval to the matters referred to in paragraph (i);
|
(b)
|
at least 14 days before the expiry of any obligatory insurance, renew that obligatory insurance in accordance with the Security Trustee’s approval pursuant to paragraph (a); and
|
(c)
|
procure that the approved brokers and/or the war risks and protection and indemnity associations with which such a renewal is effected shall promptly after the renewal notify the Security Trustee in writing of the terms and conditions of the renewal.
|
13.6
|
Copies of policies; letters of undertaking.
Each Guarantor shall in relation to each Ship owned by it ensure that all approved brokers provide the Security Trustee with pro forma copies of all policies relating to the obligatory insurances which they are to effect or renew and of a letter or letters or undertaking in a form required by the Security Trustee and including undertakings by the approved brokers that:
|
(a)
|
they will have endorsed on each policy, immediately upon issue, a loss payable clause and a notice of assignment complying with the provisions of Clause 13.4;
|
(b)
|
they will hold such policies, and the benefit of such insurances, to the order of the Security Trustee in accordance with the said loss payable clause;
|
(c)
|
they will advise the Security Trustee immediately of any material change to the terms of the obligatory insurances;
|
(d)
|
they will notify the Security Trustee, not less than 14 days before the expiry of the obligatory insurances, in the event of their not having received notice of renewal instructions from that Guarantor or its agents and, in the event of their receiving instructions to renew, they will promptly notify the Security Trustee of the terms of the instructions; and
|
(e)
|
they will not set off against any sum recoverable in respect of a claim relating to that Ship under such obligatory insurances any premiums or other amounts due to them or any other person whether in respect of that Ship or otherwise, they waive any lien on the policies, or any sums received under them, which they might have in respect of such premiums or other amounts, and they will not cancel such obligatory insurances by reason of non-payment of such premiums or other amounts, and will arrange for a separate policy to be issued in respect of that Ship forthwith upon being so requested by the Security Trustee.
|
13.7
|
Copies of certificates of entry.
Each Guarantor shall in relation to each Ship owned by it ensure that any protection and indemnity and/or war risks associations in which that Ship is entered provides the Security Trustee with:
|
(a)
|
a certified copy of the certificate of entry for that Ship;
|
(b)
|
a letter or letters of undertaking in such form as may be required by the Security Trustee; and
|
(c)
|
a certified copy of each certificate of financial responsibility for pollution by oil or other Environmentally Sensitive Material issued by the relevant certifying authority in relation to that Ship.
|
13.8
|
Deposit of original policies.
Each Guarantor shall in relation to each Ship owned by it ensure that all policies relating to obligatory insurances are deposited with the approved brokers through which the insurances are effected or renewed.
|
13.9
|
Payment of premiums.
Each Guarantor shall in relation to each Ship owned by it punctually pay all premiums or other sums payable in respect of the obligatory insurances and produce all relevant receipts when so required by the Security Trustee.
|
13.10
|
Guarantees.
Each Guarantor shall in relation to each Ship owned by it ensure that any guarantees required by a protection and indemnity or war risks association are promptly issued and remain in full force and effect.
|
13.11
|
Compliance with terms of insurances.
Each Guarantor shall in relation to each Ship owned by it neither do nor omit to do (nor permit to be done or not to be done) any act or thing which would or might render any obligatory insurance invalid, void, voidable or unenforceable or render any sum payable under an obligatory insurance repayable in whole or in part; and, in particular:
|
(a)
|
that Guarantor shall take all necessary action and comply with all requirements which may from time to time be applicable to the obligatory insurances, and (without limiting the obligation contained in Clause 13.6(c)) ensure that the obligatory insurances are not made subject to any exclusions or qualifications to which the Security Trustee has not given its prior approval;
|
(b)
|
that Guarantor shall not make any changes relating to the classification or classification society or manager or operator of that Ship approved by the underwriters of the obligatory insurances;
|
(c)
|
that Guarantor shall make (and promptly supply copies to the Agent of) all quarterly or other voyage declarations which may be required by the protection and indemnity risks association in which that Ship is entered to maintain cover for trading to the United States of America and Exclusive Economic Zone (as defined in the United States Oil Pollution Act 1990 or any other applicable legislation); and
|
(d)
|
that Guarantor shall not employ that Ship, nor allow it to be employed, otherwise than in conformity with the terms and conditions of the obligatory insurances, without first obtaining the consent of the insurers and complying with any requirements (as to extra premium or otherwise) which the insurers specify.
|
13.12
|
Alteration to terms of insurances.
Each Guarantor shall in relation to each Ship owned by it neither make or agree to any alteration to the terms of any obligatory insurance nor waive any right relating to any obligatory insurance.
|
13.13
|
Settlement of claims.
Each Guarantor shall in relation to each Ship owned by it not settle, compromise or abandon any claim under any obligatory insurance for Total Loss or for a Major Casualty, and shall do all things necessary and provide all documents, evidence and information to enable the Security Trustee to collect or recover any moneys which at any time become payable in respect of the obligatory insurances.
|
13.14
|
Provision of copies of communications.
Each Guarantor shall in relation to each Ship owned by it provide the Security Trustee, at the time of each such communication, copies of all material written communications between that Guarantor and:
|
(a)
|
the approved brokers; and
|
(b)
|
the approved protection and indemnity and/or war risks associations; and
|
(c)
|
the approved insurance companies and/or underwriters, which relate directly or indirectly to:
|
|
(i)
|
that Guarantor’s obligations relating to the obligatory insurances including, without limitation, all requisite declarations and payments of additional premiums or calls; and
|
|
(ii)
|
any credit arrangements made between that Guarantor and any of the persons referred to in paragraphs (a) or (b) relating wholly or partly to the effecting or maintenance of the obligatory insurances.
|
13.15
|
Provision of information.
In addition, each Guarantor shall in relation to each Ship owned by it promptly provide the Security Trustee (or any persons which it may designate) with any information which the Security Trustee (or any such designated person) requests for the purpose of:
|
(a)
|
obtaining or preparing any report from an independent marine insurance broker as to the adequacy of the obligatory insurances effected or proposed to be effected; and/or
|
(b)
|
effecting, maintaining or renewing any such insurances as are referred to in Clause 13.16 or dealing with or considering any matters relating to any such insurances,
|
13.16
|
Mortgagee’s interest and additional perils.
The Security Trustee shall be entitled from time to time to effect, maintain and renew a mortgagee’s interest additional perils insurance and a mortgagee’s interest marine insurance in such amounts, on such terms, through such insurers and generally in such manner as the Security Trustee may from time to time consider appropriate and the Borrower shall upon demand fully indemnify the Security Trustee in respect of all premiums and other expenses which are incurred in connection with or with a view to effecting, maintaining or renewing any such insurance or dealing with, or considering, any matter arising out of any such insurance.
|
14
|
SHIP COVENANTS
|
14.1
|
General.
The Borrower also undertakes with each Creditor Party to procure that each Guarantor will comply with the following provisions of this Clause 14 at all times during the Security Period (in the case of an Acquired Ship, after that Acquired Ship has been delivered to the relevant Guarantor under the Purchase Contract for that Acquired Ship) except as the Agent, with the authorisation of the Majority Lenders (such authorisation not to be unreasonably withheld or delayed in the case of Clauses 14.12(a), 14.12(b), 14.12(c) or 14.12(f)), may otherwise permit.
|
14.2
|
Ship’s name and registration.
Each Guarantor shall in relation to each Ship owned by it keep that Ship registered in its name under the flag of that Ship; shall not do nor omit to do nor allow to be done anything as a result of which such registration might be cancelled or imperilled; and shall not change the name or port of registry of that Ship.
|
14.3
|
Repair and classification.
Each Guarantor shall in relation to each Ship owned by it keep that Ship in a good and safe condition and state of repair:
|
(a)
|
consistent with first-class ship ownership and management practice;
|
(b)
|
so as to maintain that Ship’s class (as approved by the Majority Lenders) with a class society (as approved by the Majority Lenders) free of overdue recommendations and conditions affecting that Ship’s class; and
|
(c)
|
so as to comply with all laws and regulations applicable to vessels registered under the flag of that Ship or to vessels trading to any jurisdiction to which that Ship may trade from time to time, including but not limited to the ISM Code or the ISPS Code.
|
14.4
|
Modification.
Each Guarantor shall in relation to each Ship owned by it not make any modification or repairs to, or replacement of, that Ship or equipment installed on it which would or might materially alter the structure, type or performance characteristics of that Ship or materially reduce its value.
|
14.5
|
Removal of parts.
Each Guarantor shall in relation to each Ship owned by it not remove any material part of that Ship, or any item of equipment installed on, that Ship unless the part or item so removed is forthwith replaced by a suitable part or item which is in the same condition as or better condition than the part or item removed, is free from any Security Interest or any right in favour of any person other than the Security Trustee and becomes on installation on that Ship the property of that Guarantor and subject to the security constituted by the Mortgage of that Ship
Provided that
that Guarantor may install equipment owned by a third party if the equipment can be removed without any risk of damage to that Ship.
|
14.6
|
Surveys.
Each Guarantor shall in relation to each Ship owned by it submit that Ship regularly to all periodical or other surveys which may be required for classification purposes and, if so required by the Security Trustee provide the Security Trustee, with copies of all survey reports.
|
14.7
|
Inspection.
Each Guarantor shall in relation to each Ship owned by it permit the Security Trustee (by surveyors or other persons appointed by it for that purpose) to board that Ship at all reasonable times to inspect its condition or to satisfy themselves about proposed or executed repairs and shall afford all proper facilities for such inspections.
|
14.8
|
Prevention of and release from arrest.
Each Guarantor shall in relation to each Ship owned by it promptly discharge:
|
(a)
|
all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against that Ship, that Ship’s Earnings or that Ship’s Insurances;
|
(b)
|
all taxes, dues and other amounts charged in respect of that Ship, that Ship’s Earnings or that Ship’s Insurances; and
|
(c)
|
all other outgoings whatsoever in respect of that Ship, that Ship’s Earnings or that Ship’s Insurances,
|
14.9
|
Compliance with laws etc.
Each Guarantor shall in relation to each Ship owned by it:
|
(a)
|
comply, or procure compliance with the ISM Code, the ISPS Code, all Environmental Laws and all other laws or regulations relating to that Ship, its ownership, operation and management or to the business of that Guarantor;
|
(b)
|
not employ that Ship nor allow its employment in any manner contrary to any law or regulation in any relevant jurisdiction including but not limited to the ISM Code and the ISPS Code; and
|
(c)
|
in the event of hostilities in any part of the world (whether war is declared or not), not cause or permit that Ship to enter or trade to any zone which is declared a war zone by any government or by that Ship’s war risks insurers unless the prior written consent of the Security Trustee has been given and that Guarantor has (at its expense) effected any special, additional or modified insurance cover which the Security Trustee may require.
|
14.10
|
Provision of information.
Each Guarantor shall in relation to each Ship owned by it promptly provide the Security Trustee with any information which it requests regarding:
|
(a)
|
that Ship, its employment, position and engagements;
|
(b)
|
that Ship’s Earnings and payments and amounts due to that Ship’s master and crew;
|
(c)
|
any expenses incurred, or likely to be incurred, in connection with the operation, maintenance or repair of that Ship and any payments made in respect of that Ship;
|
(d)
|
any towages and salvages; and
|
(e)
|
that Guarantor’s, the Approved Manager’s or that Ship’s compliance with the ISM Code and the ISPS Code,
|
14.11
|
Notification of certain events.
Each Guarantor shall in relation to each Ship owned by it immediately notify the Security Trustee by fax, confirmed forthwith by letter, of:
|
(a)
|
any casualty which is or is likely to be or to become a Major Casualty;
|
(b)
|
any occurrence as a result of which that Ship has become or is, by the passing of time or otherwise, likely to become a Total Loss;
|
(c)
|
any requirement or recommendation made by any insurer or classification society or by any competent authority which is not immediately complied with;
|
(d)
|
any arrest or detention of that Ship, any exercise or purported exercise of any lien on that Ship or its Earnings or any requisition of that Ship for hire;
|
(e)
|
any intended dry docking of that Ship;
|
(f)
|
any Environmental Claim made against the Borrower or any Security Party or in connection with that Ship, or any Environmental Incident in connection with that Ship;
|
(g)
|
any claim for breach of the ISM Code or the ISPS Code being made against that Guarantor, the Approved Manager of that Ship or otherwise in connection with that Ship; or
|
(h)
|
any other matter, event or incident, actual or threatened, the effect of which will or could lead to the ISM Code or ISPS Code not being complied with,
|
14.12
|
Restrictions on chartering, appointment of managers etc.
No Guarantor shall in relation to each Ship owned by it:
|
(a)
|
let that Ship on demise charter for any period;
|
(b)
|
enter into any time or consecutive voyage charter in respect of that Ship for a term which exceeds, or which by virtue of any optional extensions may exceed, 13 months;
|
(c)
|
enter into any charter in relation to that Ship under which more than 4 months’ hire (or the equivalent) is payable in advance;
|
(d)
|
charter that Ship otherwise than on bona fide arm’s length terms at the time when that Ship is fixed;
|
(e)
|
permit that Ship to be managed by anyone other than the Approved Manager for that Ship nor agree to any material alteration to the terms of that Approved Manager’s appointment as manager of that Ship;
|
(f)
|
de-activate or lay up that Ship; or
|
(g)
|
put that Ship into the possession of any person for the purpose of work being done upon it in an amount exceeding or likely to exceed $3,000,000 (or the equivalent in any other currency) unless that person has first given to the Security Trustee and in terms satisfactory to it a written undertaking not to exercise any lien on that Ship or its Earnings for the cost of such work or for any other reason.
|
14.13
|
Notice of Mortgage.
Each Guarantor shall in relation to each Ship owned by it keep the Mortgage of that Ship registered against that Ship as a valid first preferred/priority mortgage, carry on board that Ship a certified copy of that Mortgage and place and maintain in a conspicuous place in the navigation room and the Master’s cabin of that Ship a framed printed notice stating that that Ship is mortgaged by that Guarantor to the Security Trustee.
|
14.14
|
Sharing of Earnings.
Neither the Borrower nor any Guarantor shall enter into any agreement or arrangement for the sharing of any Earnings.
|
14.15
|
ISPS Code.
Each Guarantor shall in relation to each Ship owned by it comply with the ISPS Code and in particular, without limitation, shall:
|
(a)
|
procure that that Ship and the company responsible for that Ship’s compliance with the ISPS Code comply with the ISPS Code;
|
(b)
|
maintain for that Ship an ISSC; and
|
(c)
|
notify the Agent immediately in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC.
|
14.16
|
Charter Assignments.
The Borrower will procure that, at any time following the first Drawdown Date, no Ship shall be subject to a time charter for a term which exceeds 12 months unless the Agent has been provided with:
|
(a)
|
an original of an executed Charter Assignment of that time charter (and of each document required to be delivered by that Charter Assignment);
|
(b)
|
evidence satisfactory to the Agent of the relevant Guarantor’s due authorisation and execution of that Charter Assignment;
|
(c)
|
favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of the jurisdiction of incorporation of that Guarantor and such other relevant jurisdictions relevant to that time charter and/or that Charter Assignment as the Agent may require; and
|
(d)
|
documentary evidence that any agent for service of process named in that Charter Assignment has accepted its appointment.
|
15
|
SECURITY COVER
|
15.1
|
Minimum required security cover.
Clause 15.2 applies if the Agent notifies the Borrower that:
|
(a)
|
the market value (determined as provided in Clause 15.3) of each Ship subject to a Mortgage (
Provided that
no Ship then subject to a Mortgage will be included in the calculation set out in this Clause unless the Agent has first received for that Ship all of the documents and evidence described in Part B of Schedule 3, each in form and substance satisfactory to the Agent and its lawyers); plus
|
(b)
|
the net realisable value of any additional security previously provided under this Clause 15,
|
15.2
|
Provision of additional security; prepayment.
If the Agent serves a notice on the Borrower under Clause 15.1, the Borrower shall, within 45 days after the date on which the Agent’s notice is served, either:
|
(a)
|
provide, or ensure that a third party provides, additional security which, in the reasonable opinion of the Majority Lenders, has a net realisable value at least equal to the shortfall and is documented in such terms as the Agent may, with the reasonable authorisation of the Majority Lenders, approve or require; or
|
(b)
|
prepay such part (at least) of the Loan as will eliminate the shortfall (with such prepayment applied against the Advances pro rata to their respective amounts).
|
15.3
|
Valuation of Ships.
The market value of a Ship at any date is that shown by the average of two valuations each prepared:
|
(a)
|
as at a date not more than 30 days previously;
|
(b)
|
by an Approved Broker selected or approved by the Agent;
|
(c)
|
with or without physical inspection of that Ship (as the Agent may require);
|
(d)
|
on the basis of a sale for prompt delivery for cash on normal arm’s length commercial terms as between a willing seller and a willing buyer, free of any existing charter or other contract of employment; and
|
(e)
|
after deducting the estimated amount of the usual and reasonable expenses which would be incurred in connection with the sale.
|
15.4
|
Value of additional vessel security.
The net realisable value of any additional security which is provided under Clause 15.2 and which consists of a Security Interest over a
|
15.5
|
Valuations binding.
Any valuation under Clause 15.2, 15.3 or 15.4 shall be binding and conclusive as regards the Borrower, as shall be any valuation which the Majority Lenders make of any additional security which does not consist of or include a Security Interest.
|
15.6
|
Provision of information.
The Borrower shall promptly provide (and shall procure that the Guarantor owning that Ship shall provide) the Agent and any shipbroker or expert acting under Clause 15.3 or 15.4 with any information which the Agent or the shipbroker or expert may request for the purposes of the valuation; and, if the Borrower or (as the case may be) the relevant Guarantor fails to provide the information by the date specified in the request, the valuation may be made on any basis and assumptions which the shipbroker or the Majority Lenders (or the expert appointed by them) consider prudent.
|
15.7
|
Payment of valuation expenses.
Without prejudice to the generality of the Borrower’s obligations under Clauses 20.2, 20.3 and 21.3, the Borrower shall, on demand, pay the Agent the amount of the fees and expenses of any shipbroker or expert instructed by the Agent under this Clause and all legal and other expenses incurred by any Creditor Party in connection with any matter arising out of this Clause.
|
15.8
|
Application of prepayment.
Clause 8 shall apply in relation to any prepayment pursuant to Clause 15.2(b).
|
16
|
PAYMENTS AND CALCULATIONS
|
16.1
|
Currency and method of payments.
All payments to be made by the Lenders or by the Borrower under a Finance Document shall be made to the Agent or to the Security Trustee, in the case of an amount payable to it:
|
(a)
|
by not later than 11.00 a.m. (New York City time) on the due date;
|
(b)
|
in same day Dollar funds settled through the New York Clearing House Interbank Payments System (or in such other Dollar funds and/or settled in such other manner as the Agent shall specify as being customary at the time for the settlement of international transactions of the type contemplated by this Agreement);
|
(c)
|
in the case of an amount payable by a Lender to the Agent or by the Borrower to the Agent or any Lender, to such account with such bank as the Agent may from time to time notify to the Borrower and the other Creditor Parties; and
|
(d)
|
in the case of an amount payable to the Security Trustee, to such account as it may from time to time notify to the Borrower and the other Creditor Parties.
|
16.2
|
Payment on non-Business Day.
If any payment by the Borrower under a Finance Document would otherwise fall due on a day which is not a Business Day:
|
(a)
|
the due date shall be extended to the next succeeding Business Day; or
|
(b)
|
if the next succeeding Business Day falls in the next calendar month, the due date shall be brought forward to the immediately preceding Business Day;
|
16.3
|
Basis for calculation of periodic payments.
All interest and commitment/ticking fee and any other payments under any Finance Document which are of an annual or periodic
|
16.4
|
Distribution of payments to Creditor Parties.
Subject to Clauses 16.5, 16.6 and 16.7:
|
(a)
|
any amount received by the Agent under a Finance Document for distribution or remittance to a Lender or the Security Trustee shall be made available by the Agent to that Lender or, as the case may be, the Security Trustee by payment, with funds having the same value as the funds received, to such account as the Lender or the Security Trustee may have notified to the Agent not less than 5 Business Days previously; and
|
(b)
|
amounts to be applied in satisfying amounts of a particular category which are due to the Lenders generally shall be distributed by the Agent to each Lender pro rata to the amount in that category which is due to it.
|
16.5
|
Permitted deductions by Agent.
Notwithstanding any other provision of this Agreement or any other Finance Document, the Agent may, before making an amount available to a Lender, deduct and withhold from that amount any sum which is then due and payable to the Agent from that Lender under any Finance Document or any sum which the Agent is then entitled under any Finance Document to require that Lender to pay on demand.
|
16.6
|
Agent only obliged to pay when monies received.
Notwithstanding any other provision of this Agreement or any other Finance Document, the Agent shall not be obliged to make available to the Borrower or any Lender any sum which the Agent is expecting to receive for remittance or distribution to the Borrower or that Lender until the Agent has satisfied itself that it has received that sum.
|
16.7
|
Refund to Agent of monies not received.
If and to the extent that the Agent makes available a sum to the Borrower or a Lender, without first having received that sum, the Borrower or (as the case may be) the Lender concerned shall, on demand:
|
(a)
|
refund the sum in full to the Agent; and
|
(b)
|
pay to the Agent the amount (as certified by the Agent) which will indemnify the Agent against any funding or other loss, liability or expense incurred by the Agent as a result of making the sum available before receiving it.
|
16.8
|
Agent may assume receipt.
Clause 16.7 shall not affect any claim which the Agent has under the law of restitution, and applies irrespective of whether the Agent had any form of notice that it had not received the sum which it made available.
|
16.9
|
Creditor Party accounts.
Each Creditor Party shall maintain accounts showing the amounts owing to it by the Borrower and each Security Party under the Finance Documents and all payments in respect of those amounts made by the Borrower and any Security Party.
|
16.10
|
Agent’s memorandum account.
The Agent shall maintain a memorandum account showing the amounts advanced by the Lenders and all other sums owing to the Agent, the Security Trustee and each Lender from the Borrower and each Security Party under the Finance Documents and all payments in respect of those amounts made by the Borrower and any Security Party.
|
16.11
|
Accounts prima facie evidence.
If any accounts maintained under Clauses 16.9 and 16.10 show an amount to be owing by the Borrower or a Security Party to a Creditor Party, those accounts shall be prima facie evidence that that amount is owing to that Creditor Party.
|
17
|
APPLICATION OF RECEIPTS
|
17.1
|
Normal order of application.
Except as any Finance Document may otherwise provide, any sums which are received or recovered by any Creditor Party under or by virtue of any Finance Document shall be applied:
|
(a)
|
FIRST: in or towards payment pro rata of any unpaid fees, costs and expenses of the Agent and the Security Trustee under the Finance Documents;
|
(b)
|
SECONDLY: in or towards payment pro rata of any accrued interest or commission due but unpaid under this Agreement;
|
(c)
|
THIRDLY: in or towards payment pro rata of any principal due but unpaid under this Agreement;
|
(d)
|
FOURTHLY: in or towards payment pro rata of any other amounts due but unpaid under any Finance Document;
|
(e)
|
FIFTHLY: in retention of an amount equal to any amount not then due and payable under any Finance Document but which the Agent, by notice to the Borrower, the Security Parties and the other Creditor Parties, states in its opinion will or may become due and payable in the future and, upon those amounts becoming due and payable, in or towards satisfaction of them in accordance with the provisions of Clause 17.1(a), 17.1(b), 17.1(c) and 17.1(d); and
|
(f)
|
SIXTHLY: any surplus shall be paid to the Borrower or to any other person appearing to be entitled to it.
|
17.2
|
Variation of order of application.
The Agent may, with the authorisation of the Majority Lenders, by notice to the Borrower, the Security Parties and the other Creditor Parties provide for a different manner of application from that set out in Clause 17.1 either as regards a specified sum or sums or as regards sums in a specified category or categories.
|
17.3
|
Notice of variation of order of application.
The Agent may give notices under Clause 17.2 from time to time; and such a notice may be stated to apply not only to sums which may be received or recovered in the future, but also to any sum which has been received or recovered on or after the third Business Day before the date on which the notice is served.
|
17.4
|
Appropriation rights overridden.
This Clause 17 and any notice which the Agent gives under Clause 17.2 shall override any right of appropriation possessed, and any appropriation made, by the Borrower or any Security Party.
|
18
|
APPLICATION OF EARNINGS
|
18.1
|
Payment of Earnings.
The Borrower undertakes with each Creditor Party to ensure that, throughout the Security Period (and subject only to the provisions of the General Assignments and the Charter Assignments), all the Earnings of each Ship are paid to the Earnings Account for that Ship.
|
18.2
|
Location of accounts.
The Borrower shall promptly:
|
(a)
|
comply with any requirement of the Agent as to the location or re-location of the Earnings Accounts (or any of them); and
|
(b)
|
execute any documents which the Agent specifies to create or maintain in favour of the Security Trustee a Security Interest over (and/or rights of set-off, consolidation or other rights in relation to) the Earnings Accounts (or any of them).
|
18.3
|
Debits for expenses
etc. The Agent shall be entitled (but not obliged) from time to time to debit any Earnings Account without prior notice in order to discharge any amount due and payable under Clause 20 or 21 to a Creditor Party or payment of which any Creditor Party has become entitled to demand under Clause 20 or 21.
|
18.4
|
Borrower’s obligations unaffected.
The provisions of this Clause 18 do not affect:
|
(a)
|
the liability of the Borrower to make payments of principal and interest on the due dates; or
|
(b)
|
any other liability or obligation of the Borrower or any Security Party under any Finance Document.
|
19
|
EVENTS OF DEFAULT
|
19.1
|
Events of Default.
An Event of Default occurs if:
|
(a)
|
the Borrower or any Security Party fails to pay when due any sum payable under a Finance Document or under any document relating to a Finance Document; or
|
(b)
|
any breach occurs of Clause 9.2, 11.2, 11.16, 12.2, 12.3 or 15.2; or
|
(c)
|
any breach by the Borrower or any Security Party occurs of any provision of a Finance Document (other than a breach covered by paragraphs (a) or (b)) which, in the reasonable opinion of the Majority Lenders, is capable of remedy, and such default continues unremedied 30 days after written notice from the Agent requesting action to remedy the same; or
|
(d)
|
(subject to any applicable grace period specified in the Finance Document) any breach by the Borrower or any Security Party occurs of any provision of a Finance Document (other than a breach falling within paragraphs (a), (b) or (c)); or
|
(e)
|
any material (in the reasonable opinion of the Majority Lenders) representation, warranty or statement made or repeated by, or by an officer of, the Borrower or a Security Party in a Finance Document or in a Drawdown Notice or any other notice or document relating to a Finance Document is materially untrue or misleading when it is made or repeated; or
|
(f)
|
any of the following occurs in relation to any Financial Indebtedness of a Relevant Person in respect of $10,000,000 or more or, as regards Financial Indebtedness arising under different documents or transactions, an aggregate amount of $10,000,000 or more:
|
|
(i)
|
any Financial Indebtedness of a Relevant Person is not paid when due (after taking into account any applicable grace period); or
|
|
(ii)
|
any Financial Indebtedness of a Relevant Person becomes due and payable or capable of being declared due and payable prior to its stated maturity date as a consequence of any event of default; or
|
|
(iii)
|
a lease, hire purchase agreement or charter creating any Financial Indebtedness of a Relevant Person is terminated by the lessor or owner or becomes capable of being terminated as a consequence of any termination event; or
|
|
(iv)
|
any overdraft, loan, note issuance, acceptance credit, letter of credit, guarantee, foreign exchange or other facility, or any swap or other derivative contract or
|
|
(v)
|
any Security Interest securing any Financial Indebtedness of a Relevant Person becomes enforceable; or
|
(g)
|
any of the following occurs in relation to a Relevant Person:
|
|
(i)
|
a Relevant Person becomes, in the reasonable opinion of the Majority Lenders, unable to pay its debts as they fall due; or
|
|
(ii)
|
either:
|
|
(A)
|
a Relevant Person fails to comply with or pay any sum due from it under any final judgment (or any other judgment which is not appealed by that Relevant Person within the applicable time) or any final order (or any other order which is not appealed by that Relevant Person within the applicable time) made or given by any court of competent jurisdiction in respect of a sum of, or sums aggregating, $1,000,000 or more or the equivalent in another currency; or
|
|
(B)
|
as a result of non-compliance and/or non-payment in full with any final judgment (or any other judgment which is not appealed by that Relevant Person within the applicable time) or any final order (or any other order which is not appealed by that Relevant Person within the applicable time) made or given by any court of competent jurisdiction, any assets of a Relevant Person are subject to any form of execution, attachment, arrest, sequestration or distress in respect of a sum of, or sums aggregating, $1,000,000 or more or the equivalent in another currency; or
|
|
(iii)
|
any administrative or other receiver is appointed over any asset of a Relevant Person; or
|
|
(iv)
|
an administrator is appointed (whether by the court or otherwise) in respect of a Relevant Person; or
|
|
(v)
|
any formal declaration of bankruptcy or any formal statement to the effect that a Relevant Person is insolvent or likely to become insolvent is made by a Relevant Person or by the directors of a Relevant Person or, in any proceedings, by a lawyer acting for a Relevant Person; or
|
|
(vi)
|
a provisional liquidator is appointed in respect of a Relevant Person, a winding up order is made in relation to a Relevant Person or a winding up resolution is passed by a Relevant Person; or
|
|
(vii)
|
a resolution is passed, an administration notice is given or filed, an application or petition to a court is made or presented or any other step is taken by (aa) a Relevant Person, (bb) the members or directors of a Relevant Person, (cc) a holder of Security Interests which together relate to all or substantially all of the assets of a Relevant Person, or (dd) a government minister or public or regulatory authority for or with a view to the winding up of that or another Relevant Person or the appointment of a provisional liquidator or administrator in respect of that or another Relevant Person, or that or another Relevant Person ceasing or suspending business operations or payments to creditors, save that this paragraph does not apply to a fully solvent winding up of a Relevant Person other than the Borrower or any Guarantor which is, or is to be, effected for the purposes of an
|
|
(viii)
|
an administration notice is given or filed, an application or petition to a court is made or presented or any other step is taken by a creditor of a Relevant Person (other than a holder of Security Interests which together relate to all or substantially all of the assets of a Relevant Person) for the winding up of a Relevant Person or the appointment of a provisional liquidator or administrator in respect of a Relevant Person, unless the proposed winding up, appointment of a provisional liquidator or administration is being contested in good faith, on substantial grounds and not with a view to some other insolvency law procedure being implemented instead and either (aa) the application or petition is dismissed or withdrawn within 30 days of being made or presented, or (bb) within 30 days of the administration notice being given or filed, or the other relevant steps being taken, other action is taken which will ensure that there will be no administration and (in both cases (aa) or (bb)) the Relevant Person will continue to carry on business in the ordinary way and without being the subject of any actual, interim or pending insolvency law procedure; or
|
|
(ix)
|
a Relevant Person or its directors take any steps (whether by making or presenting an application or petition to a court, or submitting or presenting a document setting out a proposal or proposed terms, or otherwise) with a view to obtaining, in relation to that or another Relevant Person, any form of moratorium, suspension or deferral of payments, reorganisation of debt (or certain debt) or arrangement with all or a substantial proportion (by number or value) of creditors or of any class of them or any such moratorium, suspension or deferral of payments, reorganisation or arrangement is effected by court order, by the filing of documents with a court, by means of a contract or in any other way at all; or
|
|
(x)
|
any meeting of the members or directors, or of any committee of the board or senior management, of a Relevant Person is held or summoned for the purpose of considering a resolution or proposal to authorise or take any action of a type described in paragraphs (iv) to (ix) or a step preparatory to such action, or (with or without such a meeting) the members, directors or such a committee resolve or agree that such an action or step should be taken or should be taken if certain conditions materialise or fail to materialise; or
|
|
(xi)
|
in a country other than England, any event occurs, any proceedings are opened or commenced or any step is taken which, in the opinion of the Majority Lenders is similar to any of the foregoing; or
|
(h)
|
the Borrower ceases or suspends carrying on its business or a part of its business which, in the reasonable opinion of the Majority Lenders, is material in the context of this Agreement; or
|
(i)
|
it becomes unlawful or impossible:
|
|
(i)
|
for the Borrower or any Security Party to discharge any liability under a Finance Document or to comply with any other obligation which the Majority Lenders consider material under a Finance Document; or
|
|
(ii)
|
for the Agent, the Security Trustee or the Lenders to exercise or enforce any right under, or to enforce any Security Interest created by, a Finance Document; or
|
(j)
|
any official consent necessary to enable any Guarantor to own, operate or charter any Ship or to enable the Borrower or any Security Party to comply with any provision which the Majority Lenders consider material of a Finance Document or any Purchase Contract
|
(k)
|
it appears to the Majority Lenders that, without their prior consent:
|
|
(i)
|
the Marinakis Family does not have control of the Borrower (and, for the purposes of this Clause 19.1(k)(i), “
control
” by the Marinakis Family of the Borrower means either (x) Mr Evangelos Marinakis holds an executive position in the management of the Borrower; or (y) the Marinakis Family (whether directly or indirectly and whether by the ownership of share capital, the possession of voting power, contract or otherwise) controls or has the power to control (in either case whether directly or indirectly) the affairs and policies of B); or
|
|
(ii)
|
two or more persons acting in concert (other than the Marinakis Family) or any single person (other than a member of the Marinakis Family):
|
|
(A)
|
acquires legally and/or beneficially (either directly or indirectly) an ownership interest and/or voting rights in respect of more than 50 per cent. of the issued share capital of the Borrower; or
|
|
(B)
|
has control of the Borrower; or
|
|
(iii)
|
any Guarantor is not a wholly owned direct subsidiary of the Borrower; or
|
(l)
|
the Borrower ceases to be listed on the New York Stock Exchange; or
|
(m)
|
any provision which the Majority Lenders reasonably considers material of a Finance Document proves to have been or becomes invalid or unenforceable, or a Security Interest created by a Finance Document proves to have been or becomes invalid or unenforceable or such a Security Interest proves to have ranked after, or loses its priority to, another Security Interest or any other third party claim or interest; or
|
(n)
|
the security constituted by a Finance Document is in any way imperilled or in jeopardy; or
|
(o)
|
any other event occurs or any other circumstances arise or develop including, without limitation:
|
|
(i)
|
a change in the financial position, state of affairs or prospects of any Relevant Person; or
|
|
(ii)
|
any accident or other event involving any Ship or another vessel owned, chartered or operated by a Relevant Person,
|
19.2
|
Actions following an Event of Default.
On, or at any time after, the occurrence of an Event of Default:
|
(a)
|
the Agent may, and if so instructed by the Majority Lenders, the Agent shall:
|
|
(i)
|
serve on the Borrower a notice stating that the Commitments and all other obligations of each Lender to the Borrower under this Agreement are cancelled; and/or
|
|
(ii)
|
serve on the Borrower a notice stating that the Loan, all accrued interest and all other amounts accrued or owing under this Agreement are immediately due and payable or are due and payable on demand; and/or
|
|
(iii)
|
take any other action which, as a result of the Event of Default or any notice served under paragraph (i) or (ii), the Agent and/or the Lenders are entitled to take under any Finance Document or any applicable law; and/or
|
(b)
|
the Security Trustee may, and if so instructed by the Agent, acting with the authorisation of the Majority Lenders, the Security Trustee shall take any action which, as a result of the Event of Default or any notice served under paragraph (a) (i) or (ii), the Security Trustee, the Agent and/or the Lenders are entitled to take under any Finance Document or any applicable law.
|
19.3
|
Termination of Commitments.
On the service of a notice under Clause 19.2(a)(i), the Commitments and all other obligations of each Lender to the Borrower under this Agreement shall be cancelled.
|
19.4
|
Acceleration of Loan.
On the service of a notice under Clause 19.2(a)(ii), the Loan, all accrued interest and all other amounts accrued or owing from the Borrower or any Security Party under this Agreement and every other Finance Document shall become immediately due and payable or, as the case may be, payable on demand.
|
19.5
|
Multiple notices; action without notice.
The Agent may serve notices under Clauses 19.2(a)(i) or (ii) simultaneously or on different dates and it and/or the Security Trustee may take any action referred to in Clause 19.2 if no such notice is served or simultaneously with or at any time after the service of both or either of such notices.
|
19.6
|
Notification of Creditor Parties and Security Parties.
The Agent shall send to each Lender, the Security Trustee and each Security Party a copy or the text of any notice which the Agent serves on the Borrower under Clause 19.2; but the notice shall become effective when it is served on the Borrower, and no failure or delay by the Agent to send a copy or the text of the notice to any other person shall invalidate the notice or provide the Borrower or any Security Party with any form of claim or defence.
|
19.7
|
Lender’s rights unimpaired.
Nothing in this Clause shall be taken to impair or restrict the exercise of any right given to individual Lenders under a Finance Document or the general law; and, in particular, this Clause is without prejudice to Clause 3.1.
|
19.8
|
Exclusion of Creditor Party liability.
No Creditor Party, and no receiver or manager appointed by the Security Trustee, shall have any liability to the Borrower or a Security Party:
|
(a)
|
for any loss caused by an exercise of rights under, or enforcement of a Security Interest created by, a Finance Document or by any failure or delay to exercise such a right or to enforce such a Security Interest; or
|
(b)
|
as mortgagee in possession or otherwise, for any income or principal amount which might have been produced by or realised from any asset comprised in such a Security Interest or for any reduction (however caused) in the value of such an asset,
|
19.9
|
Relevant Persons.
In this Clause 19, a “
Relevant Person
” means the Borrower, a Security Party or any company which is a subsidiary of the Borrower or a Security Party;
|
19.10
|
Interpretation.
In Clause 19.1(f), references to an event of default or a termination event include any event, howsoever described, which is similar to an event of default in a facility agreement or a termination event in a finance lease; and in Clause 19.1(g) “petition” includes an application.
|
20
|
FEES AND EXPENSES
|
20.1
|
Fees.
The Borrower shall pay to the Agent:
|
(a)
|
on each date for the payment of any fee set out in any Fee Letter, that fee in the amount set out in that Fee Letter, for distribution among the Creditor Parties (or any of them) as set out in that Fee Letter;
|
(b)
|
quarterly in arrears on the last day of each fiscal quarter of the Borrower during the period from (and including) the date of this Agreement to (and including) the earlier of (i) the end of the Availability Period and (ii) the date on which the Total Commitments are cancelled and on the last day of that period, for the account of the Lenders, a commitment fee at the rate of 1 per cent. per annum on the amount of the Total Commitments less the amount of the Loan, for distribution among the Lenders pro rata to their Commitments; and
|
(c)
|
on the date of this Agreement and on each anniversary thereof during the Security Period, an annual agency fee of the amount set out in the Fee Letter(s), such agency fee to be payable to the Agent in advance for its own account.
|
20.2
|
Costs of negotiation, preparation etc.
The Borrower shall pay to the Agent on its demand the amount of all expenses incurred by the Agent or the Security Trustee in connection with the negotiation, preparation, execution or registration of any Finance Document or any related document or with any transaction contemplated by a Finance Document or a related document.
|
20.3
|
Costs of variations, amendments, enforcement etc.
The Borrower shall pay to the Agent, on the Agent’s demand, for the account of the Creditor Party concerned the amount of all expenses incurred by a Creditor Party in connection with:
|
(a)
|
any amendment or supplement to a Finance Document, or any proposal for such an amendment to be made;
|
(b)
|
any consent or waiver by the Lenders, the Majority Lenders or the Creditor Party concerned under or in connection with a Finance Document, or any request for such a consent or waiver;
|
(c)
|
the valuation of any security provided or offered under Clause 15 or any other matter relating to such security; or
|
(d)
|
any step taken by the Creditor Party concerned with a view to the protection, exercise or enforcement of any right or Security Interest created by a Finance Document or for any similar purpose.
|
20.4
|
Documentary taxes.
The Borrower shall promptly pay any tax payable on or by reference to any Finance Document, and shall, on the Agent’s demand, fully indemnify
|
20.5
|
Certification of amounts.
A notice which is signed by 2 officers of a Creditor Party, which states that a specified amount, or aggregate amount, is due to that Creditor Party under this Clause 20 and which indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or aggregate amount, is due shall be prima facie evidence that the amount, or aggregate amount, is due.
|
21
|
INDEMNITIES
|
21.1
|
Indemnities regarding borrowing and repayment of Loan.
The Borrower shall fully indemnify the Agent and each Lender on the Agent’s demand and the Security Trustee on its demand in respect of all claims, expenses, liabilities and losses which are made or brought against or incurred by that Creditor Party, or which that Creditor Party reasonably and with due diligence estimates that it will incur, as a result of or in connection with:
|
(a)
|
an Advance not being borrowed on the date specified in the Drawdown Notice for any reason other than a default by the Lender claiming the indemnity;
|
(b)
|
the receipt or recovery of all or any part of the Loan or an overdue sum otherwise than on the last day of an Interest Period or other relevant period;
|
(c)
|
any failure (for whatever reason) by the Borrower to make payment of any amount due under a Finance Document on the due date or, if so payable, on demand (after giving credit for any default interest paid by the Borrower on the amount concerned under Clause 7);
|
(d)
|
the occurrence of an Event of Default or a Potential Event of Default and/or the acceleration of repayment of the Loan under Clause 19,
|
21.2
|
Breakage costs.
Without limiting its generality, Clause 21.1 covers any claim, expense, liability or loss, including a loss of a prospective profit, incurred by a Lender:
|
(a)
|
in liquidating or employing deposits from third parties acquired or arranged to fund or maintain all or any part of its Contribution and/or any overdue amount (or an aggregate amount which includes its Contribution or any overdue amount); and
|
(b)
|
in terminating, or otherwise in connection with, any interest and/or currency swap or any other transaction entered into (whether with another legal entity or with another office or department of the Lender concerned) to hedge any exposure arising under this Agreement or that part which the Lender concerned determines is fairly attributable to this Agreement of the amount of the liabilities, expenses or losses (including losses of prospective profits) incurred by it in terminating, or otherwise in connection with, a number of transactions of which this Agreement is one.
|
21.3
|
Miscellaneous indemnities.
The Borrower shall fully indemnify each Creditor Party severally on their respective demands in respect of all claims, expenses, liabilities and losses which may be made or brought against or incurred by a Creditor Party, in any country, as a result of or in connection with:
|
(a)
|
any action taken, or omitted or neglected to be taken, under or in connection with any Finance Document by the Agent, the Security Trustee or any other Creditor Party or by any receiver appointed under a Finance Document; or
|
(b)
|
any other Pertinent Matter,
|
21.4
|
Currency indemnity.
If any sum due from the Borrower or any Security Party to a Creditor Party under a Finance Document or under any order or judgment relating to a Finance Document has to be converted from the currency in which the Finance Document provided for the sum to be paid (the “
Contractual Currency
”) into another currency (the “
Payment Currency
”) for the purpose of:
|
(a)
|
making or lodging any claim or proof against the Borrower or any Security Party, whether in its liquidation, any arrangement involving it or otherwise; or
|
(b)
|
obtaining an order or judgment from any court or other tribunal; or
|
(c)
|
enforcing any such order or judgment,
|
21.5
|
Certification of amounts.
A notice which is signed by 2 officers of a Creditor Party, which states that a specified amount, or aggregate amount, is due to that Creditor Party under this Clause 21 and which indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or aggregate amount, is due shall be prima facie evidence that the amount, or aggregate amount, is due.
|
21.6
|
Sums deemed due to a Lender.
For the purposes of this Clause 21, a sum payable by the Borrower to the Agent or the Security Trustee for distribution to a Lender shall be treated as a sum due to that Lender.
|
22
|
NO SET-OFF OR TAX DEDUCTION
|
22.1
|
No deductions.
All amounts due from the Borrower under a Finance Document shall be paid:
|
(a)
|
without any form of set-off, cross-claim or condition; and
|
(b)
|
free and clear of any tax deduction except a tax deduction which the Borrower is required by law to make.
|
22.2
|
Grossing-up for taxes.
If the Borrower is required by law to make a tax deduction from any payment:
|
(a)
|
the Borrower shall notify the Agent as soon as it becomes aware of the requirement;
|
(b)
|
the Borrower shall pay the tax deducted to the appropriate taxation authority promptly, and in any event before any fine or penalty arises; and
|
(c)
|
the amount due in respect of the payment shall be increased by the amount necessary to ensure that each Creditor Party receives and retains (free from any liability relating to the tax deduction) a net amount which, after the tax deduction, is equal to the full amount which it would otherwise have received.
|
22.3
|
Evidence of payment of taxes.
Within 1 month after making any tax deduction, the Borrower shall deliver to the Agent documentary evidence satisfactory to the Agent that the tax had been paid to the appropriate taxation authority.
|
22.4
|
Exclusion of tax on overall net income.
In this Clause 22 “
tax deduction
” means any deduction or withholding for or on account of any present or future tax except tax on a Creditor Party’s overall net income.
|
23
|
ILLEGALITY, ETC
|
23.1
|
Illegality.
This Clause 23 applies if a Lender (the “
Notifying Lender
”) notifies the Agent that it has become, or will with effect from a specified date, become:
|
(a)
|
unlawful or prohibited as a result of the introduction of a new law, an amendment to an existing law or a change in the manner in which an existing law is or will be interpreted or applied; or
|
(b)
|
contrary to, or inconsistent with, any regulation,
|
23.2
|
Notification of illegality.
The Agent shall promptly notify the Borrower, the Security Parties, the Security Trustee and the other Lenders of the notice under Clause 23.1 which the Agent receives from the Notifying Lender.
|
23.3
|
Prepayment; termination of Commitment.
On the Agent notifying the Borrower under Clause 23.2, the Notifying Lender’s Commitment shall terminate (with such termination to be applied against the Acquisition Facility and the Working Capital Facility pro rata to their respective amounts); and thereupon or, if later, on the date specified in the Notifying Lender’s notice under Clause 23.1 as the date on which the notified event would become effective the Borrower shall prepay the Notifying Lender’s Contribution in accordance with Clause 8.
|
24
|
INCREASED COSTS
|
24.1
|
Increased costs.
This Clause 24 applies if a Lender (the “
Notifying Lender
”) notifies the Agent that the Notifying Lender considers that as a result of:
|
(a)
|
the introduction or alteration after the date of this Agreement of a law or an alteration after the date of this Agreement in the manner in which a law is interpreted or applied
|
(b)
|
complying with any regulation (including any which relates to capital adequacy or liquidity controls or which affects the manner in which the Notifying Lender allocates capital resources to its obligations under this Agreement) which is introduced, or altered, or the interpretation or application of which is altered, after the date of this Agreement,
|
24.2
|
Meaning of “increased cost”. In this Clause 24, “
increased cost
” means, in relation to a Notifying Lender:
|
(a)
|
an additional or increased cost incurred as a result of, or in connection with, the Notifying Lender having entered into, or being a party to, this Agreement or a Transfer Certificate, of funding or maintaining its Commitment or Contribution or performing its obligations under this Agreement, or of having outstanding all or any part of its Contribution or other unpaid sums;
|
(b)
|
a reduction in the amount of any payment to the Notifying Lender under this Agreement or in the effective return which such a payment represents to the Notifying Lender or on its capital;
|
(c)
|
an additional or increased cost of funding all or maintaining all or any of the advances comprised in a class of advances formed by or including the Notifying Lender’s Contribution or (as the case may require) the proportion of that cost attributable to the Contribution; or
|
(d)
|
a liability to make a payment, or a return foregone, which is calculated by reference to any amounts received or receivable by the Notifying Lender under this Agreement;
|
24.3
|
Notification to Borrower of claim for increased costs.
The Agent shall promptly notify the Borrower and the Security Parties of the notice which the Agent received from the Notifying Lender under Clause 24.1.
|
24.4
|
Payment of increased costs.
The Borrower shall pay to the Agent, on the Agent’s demand, for the account of the Notifying Lender the amounts which the Agent from time to time notifies the Borrower that the Notifying Lender has specified to be necessary to compensate the Notifying Lender for the increased cost.
|
24.5
|
Notice of prepayment.
If the Borrower is not willing to continue to compensate the Notifying Lender for the increased cost under Clause 24.4, the Borrower may give the Agent not less than 14 days’ notice of its intention to prepay the Notifying Lender’s Contribution at the end of an Interest Period.
|
24.6
|
Prepayment; termination of Commitment.
A notice under Clause 24.5 shall be irrevocable; the Agent shall promptly notify the Notifying Lender of the Borrower’s notice of intended prepayment; and:
|
(a)
|
on the date on which the Agent serves that notice, the Commitment of the Notifying Lender shall be cancelled (with such cancellation to be applied against the Acquisition Facility and the Working Capital Facility pro rata to their respective amounts); and
|
(b)
|
on the date specified in its notice of intended prepayment, the Borrower shall prepay (without premium or penalty) the Notifying Lender’s Contribution, together with accrued interest thereon at the applicable rate plus the Margin plus the Mandatory Cost (if any).
|
24.7
|
Application of prepayment.
Clause 8 shall apply in relation to the prepayment.
|
25
|
SET-OFF
|
25.1
|
Application of credit balances.
Each Creditor Party may without prior notice:
|
(a)
|
apply any balance (whether or not then due) which at any time stands to the credit of any account in the name of the Borrower at any office in any country of that Creditor Party in or towards satisfaction of any sum then due from the Borrower to that Creditor Party under any of the Finance Documents; and
|
(b)
|
for that purpose:
|
|
(i)
|
break, or alter the maturity of, all or any part of a deposit of the Borrower;
|
|
(ii)
|
convert or translate all or any part of a deposit or other credit balance into Dollars; and
|
|
(iii)
|
enter into any other transaction or make any entry with regard to the credit balance which the Creditor Party concerned considers appropriate.
|
25.2
|
Existing rights unaffected.
No Creditor Party shall be obliged to exercise any of its rights under Clause 25.1; and those rights shall be without prejudice and in addition to any right of set-off, combination of accounts, charge, lien or other right or remedy to which a Creditor Party is entitled (whether under the general law or any document).
|
25.3
|
Sums deemed due to a Lender.
For the purposes of this Clause 25, a sum payable by the Borrower to the Agent or the Security Trustee for distribution to, or for the account of, a Lender shall be treated as a sum due to that Lender; and each Lender’s proportion of a sum so payable for distribution to, or for the account of, the Lenders shall be treated as a sum due to such Lender.
|
25.4
|
No Security Interest.
This Clause 25 gives the Creditor Parties a contractual right of set-off only and does not create any equitable charge or other Security Interest over any credit balance of the Borrower.
|
26
|
TRANSFERS AND CHANGES IN LENDING OFFICES
|
26.1
|
Transfer by Borrower.
The Borrower may not, without the consent of the Agent, given on the instructions of all the Lenders transfer any of its rights, liabilities or obligations under any Finance Document.
|
26.2
|
Transfer by a Lender.
Subject to Clause 26.4, a Lender (the “
Transferor Lender
”) may at any time, with the prior written consent of the Borrower (not to be unreasonably withheld or delayed and without any cost whatsoever to the Borrower) or without the consent of the Borrower if an Event of Default or a Potential Event of Default has occurred and is continuing but without in any case needing the consent of any Security Party, cause:
|
(a)
|
its rights in respect of all or part of its Contribution; or
|
(b)
|
its obligations in respect of all or part of its Commitment; or
|
(c)
|
a combination of (a) and (b),
|
|
(i)
|
the amount of the Contribution and/or Commitment of the Lender which is to be transferred shall not be less than $10,000,000 or, if less, the remaining amount of its Contribution and Commitment, unless the Agent agrees otherwise;
|
|
(ii)
|
the Agent shall approve the transfer (such approval not to be unreasonably withheld); and
|
|
(iii)
|
payment of the fee in accordance with Clause 26.11.
|
26.3
|
Transfer Certificate, delivery and notification.
As soon as reasonably practicable after a Transfer Certificate is delivered to the Agent, it shall (unless it has reason to believe that the Transfer Certificate may be defective):
|
(a)
|
sign the Transfer Certificate on behalf of itself, the Borrower, the Security Parties, the Security Trustee, each of the Lead Arrangers and each of the other Lenders;
|
(b)
|
on behalf of the Transferee Lender, send to the Borrower and each Security Party letters or faxes notifying them of the Transfer Certificate and attaching a copy of it;
|
(c)
|
send to the Transferee Lender copies of the letters or faxes sent under paragraph (b) above,
|
26.4
|
Effective Date of Transfer Certificate.
A Transfer Certificate becomes effective on the date, if any, specified in the Transfer Certificate as its effective date
Provided that
it is signed by the Agent under Clause 26.3 on or before that date.
|
26.5
|
No transfer without Transfer Certificate.
Except as provided in Clause 26.17, no assignment or transfer of any right or obligation of a Lender under any Finance Document is binding on, or effective in relation to, the Borrower, any Security Party, the Agent or the Security Trustee unless it is effected, evidenced or perfected by a Transfer Certificate.
|
26.6
|
Lender re-organisation; waiver of Transfer Certificate.
However, if a Lender enters into any merger, de-merger or other reorganisation as a result of which all its rights or obligations vest in another person (the “
successor
”), the Agent may, if it sees fit, by
|
26.7
|
Effect of Transfer Certificate.
A Transfer Certificate takes effect in accordance with English law as follows:
|
(a)
|
to the extent specified in the Transfer Certificate, all rights and interests (present, future or contingent) which the Transferor Lender has under or by virtue of the Finance Documents are assigned to the Transferee Lender absolutely, free of any defects in the Transferor Lender’s title and of any rights or equities which the Borrower or any Security Party had against the Transferor Lender;
|
(b)
|
the Transferor Lender’s Commitment is discharged to the extent specified in the Transfer Certificate;
|
(c)
|
the Transferee Lender becomes a Lender with the Contribution previously held by the Transferor Lender and a Commitment of an amount specified in the Transfer Certificate;
|
(d)
|
the Transferee Lender becomes bound by all the provisions of the Finance Documents which are applicable to the Lenders generally, including those about pro-rata sharing and the exclusion of liability on the part of, and the indemnification of, the Agent and the Security Trustee and, to the extent that the Transferee Lender becomes bound by those provisions (other than those relating to exclusion of liability), the Transferor Lender ceases to be bound by them;
|
(e)
|
any part of the Loan which the Transferee Lender advances after the Transfer Certificate’s effective date ranks in point of priority and security in the same way as it would have ranked had it been advanced by the transferor, assuming that any defects in the transferor’s title and any rights or equities of the Borrower or any Security Party against the Transferor Lender had not existed;
|
(f)
|
the Transferee Lender becomes entitled to all the rights under the Finance Documents which are applicable to the Lenders generally, including but not limited to those relating to the Majority Lenders and those under Clause 5.7 and Clause 20, and to the extent that the Transferee Lender becomes entitled to such rights, the Transferor Lender ceases to be entitled to them; and
|
(g)
|
in respect of any breach of a warranty, undertaking, condition or other provision of a Finance Document or any misrepresentation made in or in connection with a Finance Document, the Transferee Lender shall be entitled to recover damages by reference to the loss incurred by it as a result of the breach or misrepresentation, irrespective of whether the original Lender would have incurred a loss of that kind or amount.
|
26.8
|
Maintenance of register of Lenders
. During the Security Period the Agent shall maintain a register in which it shall record the name, Commitment, Contribution and administrative details (including the lending office) from time to time of each Lender holding a Transfer Certificate and the effective date (in accordance with Clause 26.4) of the Transfer Certificate; and the Agent shall make the register available for inspection by any Lender, the Security Trustee and the Borrower during normal banking hours, subject to receiving at least 3 Business Days’ prior notice.
|
26.9
|
Reliance on register of Lenders.
The entries on that register shall, in the absence of manifest error, be conclusive in determining the identities of the Lenders and the amounts
|
26.10
|
Authorisation of Agent to sign Transfer Certificates.
The Borrower, the Security Trustee, each Lead Arranger and each Lender irrevocably authorise the Agent to sign Transfer Certificates on its behalf.
|
26.11
|
Registration fee.
In respect of any Transfer Certificate, the Agent shall be entitled to recover a registration fee of $3,500 from the Transferor Lender or (at the Agent’s option) the Transferee Lender.
|
26.12
|
Sub-participation; subrogation assignment.
A Lender may sub-participate all or any part of its rights and/or obligations under or in connection with the Finance Documents without the consent of, or any notice to, the Borrower, any Security Party, the Agent or the Security Trustee; and the Lenders may assign, in any manner and terms agreed by the Majority Lenders, the Agent and the Security Trustee, all or any part of those rights to an insurer or surety who has become subrogated to them.
|
26.13
|
Disclosure of information.
A Lender may disclose to a potential Transferee Lender or sub-participant any information which the Lender has received in relation to the Borrower, any Security Party or their affairs under or in connection with any Finance Document, unless the information is clearly of a confidential nature. Without prejudice to the foregoing, a Lender may disclose any financial information delivered by the Borrower hereunder and such other information in relation to the Borrower and its subsidiaries which it may obtain pursuant to this Agreement to authorities in any other countries where that Lender, its subsidiaries, branches and representative officers or any other entity of that Lender are represented:
|
(a)
|
where such authority has requested information from the relevant entity of that Lender; and
|
(b)
|
such disclosure is required by law, regulation or administrative order in order for that Lender to meet its legal requirements relating to reduction and/or prevention of money laundering, terrorism or corruption.
|
26.14
|
Change of lending office.
A Lender may change its lending office by giving notice to the Agent and the change shall become effective on the later of:
|
(a)
|
the date on which the Agent receives the notice; and
|
(b)
|
the date, if any, specified in the notice as the date on which the change will come into effect.
|
26.15
|
Notification.
On receiving such a notice, the Agent shall notify the Borrower and the Security Trustee; and, until the Agent receives such a notice, it shall be entitled to assume that a Lender is acting through the lending office of which the Agent last had notice.
|
26.16
|
Replacement of Reference Bank.
If any Reference Bank ceases to be a Lender or is unable on a continuing basis to supply quotations for the purposes of Clause 5 then, unless the Borrower, the Agent and the Majority Lenders otherwise agree, the Agent, acting on the instructions of the Majority Lenders, and after consulting the Borrower, shall appoint another bank (whether or not a Lender) to be a replacement Reference Bank; and, when that appointment comes into effect, the first-mentioned Reference Bank’s appointment shall cease to be effective.
|
26.17
|
Security over Lenders’ rights.
In addition to the other rights provided to Lenders under this Clause 26, each Lender may without consulting with or obtaining consent from the
|
(a)
|
any charge, assignment or other Security Interest to secure obligations to a federal reserve or central bank; and
|
(b)
|
in the case of any Lender which is a fund, any charge, assignment or other Security Interest granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by that Lender as security for those obligations or securities;
|
|
(i)
|
release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or Security Interest for the Lender as a party to any of the Finance Documents; or
|
|
(ii)
|
require any payments to be made by the Borrower or any Security Party or grant to any person any more extensive rights than those required to be made or granted to the relevant Lender under the Finance Documents.
|
27
|
VARIATIONS AND WAIVERS
|
27.1
|
Variations, waivers etc. by Majority Lenders.
Subject to Clause 27.2, a document shall be effective to vary, waive, suspend or limit any provision of a Finance Document, or any Creditor Party’s rights or remedies under such a provision or the general law, only if the document is signed, or specifically agreed to by fax, by the Borrower, by the Agent on behalf of the Majority Lenders, by the Agent and the Security Trustee in their own rights, and, if the document relates to a Finance Document to which a Security Party is party, by that Security Party.
|
27.2
|
Variations, waivers etc. requiring agreement of all Lenders.
However, as regards the following, Clause 27.1 applies as if the words “by the Agent on behalf of the Majority Lenders” were replaced by the words “by or on behalf of every Lender”:
|
(a)
|
a reduction in the Margin or a change to the definition of “Mandatory” Cost or to Schedule 6;
|
(b)
|
a postponement to the date for, or a reduction in the amount of, any payment of principal, interest, fees or other sum payable under this Agreement;
|
(c)
|
an increase in any Lender’s Commitment;
|
(d)
|
a change to the definition of “
Majority Lenders
”;
|
(e)
|
a change to Clause 3 or this Clause 27;
|
(f)
|
any release of, or material variation to, a Security Interest, guarantee, indemnity or subordination arrangement set out in a Finance Document; and
|
(g)
|
any other change or matter as regards which this Agreement or another Finance Document expressly provides that each Lender’s consent is required.
|
27.3
|
Exclusion of other or implied variations.
Except for a document which satisfies the requirements of Clauses 27.1 and 27.2, no document, and no act, course of conduct, failure or neglect to act, delay or acquiescence on the part of the Creditor Parties or any of them (or any person acting on behalf of any of them) shall result in the Creditor Parties or any of them (or any person acting on behalf of any of them) being taken to have varied,
|
(a)
|
a provision of this Agreement or another Finance Document; or
|
(b)
|
an Event of Default; or
|
(c)
|
a breach by the Borrower or a Security Party of an obligation under a Finance Document or the general law; or
|
(d)
|
any right or remedy conferred by any Finance Document or by the general law,
|
28
|
NOTICES
|
28.1
|
General.
Unless otherwise specifically provided, any notice under or in connection with any Finance Document shall be given by letter or fax and references in the Finance Documents to written notices, notices in writing and notices signed by particular persons shall be construed accordingly.
|
28.2
|
Addresses for communications.
A notice by letter of fax shall be sent:
|
(a)
|
to the Borrower:
|
c/o Capital Ship Management Corp.
|
3 Iassonos Street
|
||
185 37 Piraeus
|
||
Greece
|
||
Fax No: +30 210 4285 679
|
||
Attn: Chief Financial Officer of Crude Carriers Corp.
|
||
(b)
|
to a Lender:
|
At the address below its name in Schedule 1 or (as the case may require) in the relevant Transfer Certificate.
|
(c)
|
to a Lead Arranger:
|
At the address for that party in its capacity as a Lender
|
(d)
|
to the Agent or the Security Trustee:
|
Nordea Bank Finland Plc, London Branch
|
8th Floor
|
||
City Place House
|
||
55 Basinghall Street
|
||
London EC2V 5NB
|
||
Fax No: +44 (0) 20 7726 9188
|
||
Attn: Shipping Department
|
28.3
|
Effective date of notices.
Subject to Clauses 28.4 and 28.5:
|
(a)
|
a notice which is delivered personally or posted shall be deemed to be served, and shall take effect, at the time when it is delivered; and
|
(b)
|
a notice which is sent by fax shall be deemed to be served, and shall take effect, 2 hours after its transmission is completed.
|
28.4
|
Service outside business hours.
However, if under Clause 28.3 a notice would be deemed to be served:
|
(a)
|
on a day which is not a business day in the place of receipt; or
|
(b)
|
on such a business day, but after 5 p.m. local time,
|
28.5
|
Illegible notices.
Clauses 28.3 and 28.4 do not apply if the recipient of a notice notifies the sender within 1 hour after the time at which the notice would otherwise be deemed to be served that the notice has been received in a form which is illegible in a material respect.
|
28.6
|
Valid notices.
A notice under or in connection with a Finance Document shall not be invalid by reason that its contents or the manner of serving it do not comply with the requirements of this Agreement or, where appropriate, any other Finance Document under which it is served if:
|
(a)
|
the failure to serve it in accordance with the requirements of this Agreement or other Finance Document, as the case may be, has not caused any party to suffer any significant loss or prejudice; or
|
(b)
|
in the case of incorrect and/or incomplete contents, it should have been reasonably clear to the party on which the notice was served what the correct or missing particulars should have been.
|
28.7
|
Electronic communication.
Any communication to be made between the Agent and a Lender under or in connection with the Finance Documents may be made by electronic mail or other electronic means, if the Agent and the relevant Lender:
|
(a)
|
agree that, unless and until notified to the contrary, this is to be an accepted form of communication;
|
(b)
|
notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and
|
(c)
|
notify each other of any change to their respective addresses or any other such information supplied to them.
|
28.8
|
Any electronic communication made between the Agent and a Lender will be effective only when actually received in readable form and, in the case of any electronic communication made by a Lender to the Agent, only if it is addressed in such a manner as the Agent shall specify for this purpose.
|
28.9
|
English language.
Any notice under or in connection with a Finance Document shall be in English.
|
28.10
|
Meaning of “notice”.
In this Clause 28, “
notice
” includes any demand, consent, authorisation, approval, instruction, waiver or other communication.
|
29
|
SUPPLEMENTAL
|
29.1
|
Rights cumulative, non-exclusive.
The rights and remedies which the Finance Documents give to each Creditor Party are:
|
(a)
|
cumulative;
|
(b)
|
may be exercised as often as appears expedient; and
|
(c)
|
shall not, unless a Finance Document explicitly and specifically states so, be taken to exclude or limit any right or remedy conferred by any law.
|
29.2
|
Severability of provisions.
If any provision of a Finance Document is or subsequently becomes void, unenforceable or illegal, that shall not affect the validity, enforceability or legality of the other provisions of that Finance Document or of the provisions of any other Finance Document.
|
29.3
|
Counterparts.
A Finance Document may be executed in any number of counterparts.
|
29.4
|
Third Party rights.
A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Agreement.
|
30
|
LAW AND JURISDICTION
|
30.1
|
English law.
This Agreement and any non-contractual obligations arising out of or in connection with it shall be governed by, and construed in accordance with, English law.
|
30.2
|
Exclusive English jurisdiction.
Subject to Clause 30.3, the courts of England shall have exclusive jurisdiction to settle any Dispute.
|
30.3
|
Choice of forum for the exclusive benefit of the Creditor Parties.
Clause 30.2 is for the exclusive benefit of the Creditor Parties, each of which reserves the right:
|
(a)
|
to commence proceedings in relation to any Dispute in the courts of any country other than England and which have or claim jurisdiction to that Dispute; and
|
(b)
|
to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in England or without commencing proceedings in England.
|
30.4
|
Process agent.
The Borrower irrevocably appoints Curzon Maritime Limited at its principal office for the time being, presently at St. Clare House, 30/33 Minories, London EC3N 1DJ, England, to act as its agent to receive and accept on its behalf any process or other document relating to any proceedings in the English courts which are connected with a Dispute.
|
30.5
|
Creditor Party rights unaffected.
Nothing in this Clause 30 shall exclude or limit any right which any Creditor Party may have (whether under the law of any country, an international convention or otherwise) with regard to the bringing of proceedings, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction.
|
30.6
|
Meaning of “proceedings”.
In this Clause 30, “
proceedings
” means proceedings of any kind, including an application for a provisional or protective measure and a “
Dispute
” means any dispute arising out of or in connection with this Agreement (including a
|
Lender
|
Lending Office
|
Commitment
(US Dollars)
|
Nordea Bank Finland Plc, London Branch
|
8th Floor
City Place House
55 Basinghall Street
London EC2V 5NB
|
150,000,000
|
To:
|
Nordea Bank Finland Plc, London Branch
|
8th Floor
|
|
City Place House
|
|
55 Basinghall Street
|
|
London EC2V 5NB
|
Attention:
|
Loans Administration
|
[
date
]
|
1
|
We refer to the loan agreement (the “
Loan Agreement
”) dated 22 April 2010 and made between ourselves, as Borrower, the Lenders referred to therein, the Lead Arrangers referred to therein, and yourselves as Bookrunner, as Agent and as Security Trustee in connection with an acquisition facility of up to US$140,000,000 and a working capital facility of up to US$10,000,000. Terms defined in the Loan Agreement have their defined meanings when used in this Drawdown Notice.
|
2
|
We request to borrow under the [Acquisition Facility][Working Capital Facility] as follows:
|
(a)
|
Amount: US$[
·
];
|
(b)
|
Drawdown Date: [
·
]; [and]
|
(c)
|
[Duration of the first Interest Period shall be [
·
] months; and]
|
(d)
|
Payment instructions: [
·
].
|
3
|
We represent and warrant that:
|
(a)
|
the representations and warranties in Clause 10 of the Loan Agreement would remain true and not misleading if repeated on the date of this notice with reference to the circumstances now existing; and
|
(b)
|
no Event of Default or Potential Event of Default has occurred or will result from the borrowing of the Loan.
|
4
|
This notice cannot be revoked without the prior consent of the Majority Lenders.
|
|
[Name of Signatory]
|
|
|
||
|
||
for and on behalf of
|
||
CRUDE CARRIERS CORP.
|
1
|
|
1
|
A duly executed original of each Finance Document (and of each document required to be delivered by each Finance Document) other than those referred to in Part B.
|
2
|
Copies of the certificate of incorporation (if applicable) and constitutional documents of the Borrower.
|
3
|
Copies of resolutions of the shareholders (if advised by the provider of any legal opinion to be issued to the Agent) and directors of the Borrower authorising the execution of each of the Finance Documents to which the Borrower is a party and authorising named officers to give the Drawdown Notices and other notices under this Agreement.
|
4
|
The original of any power of attorney under which any Finance Document is executed on behalf of the Borrower.
|
5
|
Copies of all consents which the Borrower requires to enter into, or make any payment under, any Finance Document.
|
6
|
Documentary evidence that the agent for service of process named in Clause 30 has accepted its appointment on behalf of the Borrower.
|
7
|
Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of the Marshall Islands and such other relevant jurisdictions as the Agent may require.
|
8
|
The capitalisation and organisational structure of the Borrower and its subsidiaries (including the tax structure) being satisfactory in form, scope and substance to the Agent, in its reasonable assessment.
|
9
|
The Agent has received valuations establishing the market value (determined as provided in Clause 15.3 on the basis of valuations which are no older than 30 days prior to the date such valuations are provided to the Agent) of each Initial Ship.
|
10
|
Such documentation and other evidence as is reasonably requested by the Agent or any Lender in order to carry out and be satisfied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated under this Agreement.
|
11
|
If the Agent so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the Agent.
|
1
|
|
1
|
Evidence satisfactory to the Agent that the relevant Ship is:
|
(a)
|
a crude oil tanker;
|
(b)
|
between 80,000 dwt and 310,000 dwt;
|
(c)
|
no greater than 5 years in age on the Drawdown Date; and
|
(d)
|
otherwise acceptable to the Agent in all respects.
|
2
|
The structure, terms and conditions relating to the purchase of the relevant Ship being satisfactory in form and substance to the Agent, in its reasonable assessment.
|
3
|
The Lenders being satisfied that since the most recent financial statements of the Borrower included in the Form F-1 Registration Statement under the Securities Act 1933 which the Borrower has filed with the Securities and Exchange Commission, nothing has occurred (and no Creditor Party has become aware of any condition or circumstance not previously known to it) which the Lenders shall determine in their reasonable opinion has had, or could reasonably be expected to have, a Material Adverse Effect.
|
4
|
Duly executed originals of:
|
(a)
|
the Guarantee from the relevant Guarantor;
|
(b)
|
the Mortgage of the relevant Ship;
|
(c)
|
the General Assignment in relation to the relevant Ship;
|
(d)
|
the Charter Assignment (if any) in relation to the relevant Ship;
|
(e)
|
the Account Security Deed for the Earnings Account for the relevant Ship; and
|
(f)
|
the Shares Pledge(s) in respect of all of the shares of the relevant Guarantor,
|
5
|
Copies of the certificate of incorporation (if applicable) and constitutional documents of the relevant Guarantor and the Borrower.
|
6
|
Copies of resolutions of the shareholders (if advised by the provider of any legal opinion to be issued to the Agent) and directors of the relevant Guarantor and also of the directors of the Borrower in each case authorising the execution of each of the Finance Documents to which that person is a party and ratifying the execution of any Purchase Contract to which that person is a party.
|
7
|
The original of any power of attorney under which any Finance Document is executed on behalf of the relevant Guarantor or the Borrower.
|
8
|
Copies of all consents which the relevant Guarantor or the Borrower requires to enter into, or make any payment under, any Finance Document or any Purchase Contract.
|
9
|
Copies of the Purchase Contract for the relevant Ship and of all documents signed or issued by any party to that Purchase Contract under or in connection with that Purchase Contract.
|
10
|
Such documentary evidence as the Agent and its legal advisers may require in relation to the due authorisation and execution by each party to the Purchase Contract for the relevant Ship of that Purchase Contract and of all documents to be executed by any such party under that Purchase Contract.
|
11
|
Documentary evidence that:
|
(a)
|
the relevant Ship has been unconditionally delivered by the Seller of the relevant Ship to, and accepted by, the relevant Guarantor under the Purchase Contract for the relevant Ship, and the full purchase price payable under that Purchase Contract (if any, in addition to the part to be financed by the Advance) has been duly paid;
|
(b)
|
the relevant Ship is definitively and permanently (or, in the case of Panamanian flag, provisionally) registered in the name of the relevant Guarantor under an Approved Flag;
|
(c)
|
the relevant Ship is in the absolute and unencumbered ownership of the relevant Guarantor save as contemplated by the Finance Documents;
|
(d)
|
the relevant Ship maintains a class acceptable to the Majority Lenders with a class society acceptable to the Majority Lenders free of all overdue recommendations and conditions of such Classification Society;
|
(e)
|
the Mortgage of the relevant Ship has been duly registered/recorded against the relevant Ship as a valid first preferred/priority ship mortgage governed by the laws of the flag of the relevant Ship in accordance with those laws; and
|
(f)
|
the relevant Ship is insured in accordance with the provisions of this Agreement and all requirements therein in respect of insurances have been complied with.
|
12
|
Documents establishing that the relevant Ship will, as from the Drawdown Date, be managed by the Approved Manager for that Ship on terms acceptable to the Lenders, together with:
|
(a)
|
a letter of undertaking executed by that Approved Manager in favour of the Agent in the terms required by the Agent agreeing certain matters in relation to the management of the relevant Ship and subordinating the rights of that Approved Manager against the relevant Ship and the relevant Guarantor to the rights of the Creditor Parties under the Finance Documents; and
|
(b)
|
copies of that Approved Manager’s Document of Compliance and of the relevant Ship’s Safety Management Certificate (together with any other details of the applicable safety management system which the Agent requires) and ISSC.
|
13
|
The originals of any mandates or other documents required in connection with the opening or operation of the Earnings Account for the relevant Ship.
|
14
|
Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of the jurisdiction of incorporation of each of the relevant Guarantor and the Borrower, the flag governing the Mortgage of the relevant Ship and such other relevant jurisdictions as the Agent may require.
|
15
|
A favourable opinion from an independent insurance consultant acceptable to the Agent on such matters relating to the insurances for the relevant Ship as the Agent may require.
|
16
|
The Agent has received valuations establishing the market value (determined as provided in Clause 15.3 on the basis of valuations which are no older than 30 days before the Drawdown Date) of the relevant Ship and the other Ships.
|
17
|
Documentary evidence that the agent for service of process named in any Finance Document executed by the relevant Guarantor or the Borrower has accepted its appointment on behalf of that person.
|
18
|
If the Agent so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the Agent.
|
To:
|
Nordea Bank Finland Plc, London Branch for itself and for and on behalf of the Borrower, each Security Party, the Security Trustee, each Lead Arranger and each Lender, as defined in the Loan Agreement referred to below.
|
1
|
This Certificate relates to a Loan Agreement (the “
Loan Agreement
”) dated 22 April 2010 and made between (1) Crude Carriers Corp., as borrower (the “
Borrower
”), (2) the banks and financial institutions named therein, as lenders (together in such capacity, the “
Lenders
”), (3) the banks and financial institutions named therein, as lead arrangers (together in such capacity, the “
Lead Arrangers
”), (4) Nordea Bank Finland Plc, London Branch, as agent (in such capacity, the “
Agent
”) and (5) Nordea Bank Finland Plc, London Branch, as security trustee (in such capacity, the “
Security Trustee
”) for an acquisition facility of up to US$140,000,000 and a working capital facility of up to US$10,000,000.
|
2
|
In this Certificate, terms defined in the Loan Agreement shall, unless the contrary intention appears, have the same meanings and:
|
3
|
The effective date of this Certificate is [
l
]
Provided that
this Certificate shall not come into effect unless it is signed by the Agent on or before that date.
|
4
|
The Transferor assigns to the Transferee absolutely all rights and interests (present, future or contingent) which the Transferor has as Lender under or by virtue of the Loan Agreement and every other Finance Document in relation to [
l
] per cent. of its Contribution, which percentage represents $[
l
].
|
5
|
By virtue of this Transfer Certificate and Clause 26 of the Loan Agreement, the Transferor is discharged [entirely from its Commitment which amounts to $[
l
]] [from [
l
] per cent. of its Commitment, which percentage represents $[
l
]] and the Transferee acquires a Commitment of $[
l
].
|
6
|
The Transferee undertakes with the Transferor and each of the Relevant Parties that the Transferee will observe and perform all the obligations under the Finance Documents
|
7
|
The Agent, at the request of the Transferee (which request is hereby made) accepts, for the Agent itself and for and on behalf of every other Relevant Party, this Certificate as a Transfer Certificate taking effect in accordance with Clause 26 of the Loan Agreement.
|
8
|
The Transferor:
|
(a)
|
warrants to the Transferee and each Relevant Party that:
|
|
(i)
|
the Transferor has full capacity to enter into this transaction and has taken all corporate action and obtained all consents which are in connection with this transaction; and
|
|
(ii)
|
this Certificate is valid and binding as regards the Transferor;
|
(b)
|
warrants to the Transferee that the Transferor is absolutely entitled, free of encumbrances, to all the rights and interests covered by the assignment in paragraph 4; and
|
(c)
|
undertakes with the Transferee that the Transferor will, at its own expense, execute any documents which the Transferee reasonably requests for perfecting in any relevant jurisdiction the Transferee’s title under this Certificate or for a similar purpose.
|
9
|
The Transferee:
|
(a)
|
confirms that it has received a copy of the Loan Agreement and each other Finance Document;
|
(b)
|
agrees that it will have no rights of recourse on any ground against either the Transferor, the Agent, the Security Trustee, any Lead Arranger or any Lender in the event that:
|
|
(i)
|
any of the Finance Documents prove to be invalid or ineffective,
|
|
(ii)
|
the Borrower or any Security Party fails to observe or perform its obligations, or to discharge its liabilities, under any of the Finance Documents; and
|
|
(iii)
|
it proves impossible to realise any asset covered by a Security Interest created by a Finance Document, or the proceeds of such assets are insufficient to discharge the liabilities of the Borrower or Security Party under the Finance Documents;
|
(c)
|
agrees that it will have no rights of recourse on any ground against the Agent, the Security Trustee, any Lead Arranger or any Lender in the event that this Certificate proves to be invalid or ineffective;
|
(d)
|
warrants to the Transferor and each Relevant Party that:
|
|
(i)
|
it has full capacity to enter into this transaction and has taken all corporate action and obtained all consents which it needs to take or obtain in connection with this transaction; and
|
|
(ii)
|
this Certificate is valid and binding as regards the Transferee; and
|
(e)
|
confirms the accuracy of the administrative details set out below regarding the Transferee.
|
10
|
The Transferor and the Transferee each undertake with the Agent and the Security Trustee severally, on demand, fully to indemnify the Agent and/or the Security Trustee in respect of any claim, proceeding, liability or expense (including all legal expenses) which they or either of them may incur in connection with this Certificate or any matter arising out of it, except such as are shown to have been mainly and directly caused by the gross and culpable negligence or dishonesty of the Agent’s or the Security Trustee’s own officers or employees.
|
11
|
The Transferee shall repay to the Transferor on demand so much of any sum paid by the Transferor under paragraph 10 as exceeds one-half of the amount demanded by the Agent or the Security Trustee in respect of a claim, proceeding, liability or expense which was not reasonably foreseeable at the date of this Certificate; but nothing in this paragraph shall affect the liability of each of the Transferor and the Transferee to the Agent or the Security Trustee for the full amount demanded by it.
|
[
Name of Transferor
]
|
|
[
Name of Transferee
]
|
||
|
|
|
||
By:
|
|
By:
|
||
|
|
|
||
Date:
|
|
Date:
|
Agent
|
|||
|
|||
Signed for itself and for and on behalf of itself as Agent and for every other Relevant Party
|
|||
NORDEA BANK FINLAND PLC, LONDON BRANCH
|
|||
|
|||
By:
|
|||
|
|||
Date:
|
Name of Transferee:
|
|
|
|
Lending Office:
|
|
|
|
Contact Person
|
|
(Loan Administration Department):
|
|
|
|
Telephone:
|
|
|
|
Fax:
|
|
|
|
Contact Person
|
|
(Credit Administration Department):
|
|
|
|
Telephone:
|
|
|
|
Fax:
|
|
|
|
Account for payments:
|
Note
:
|
This Transfer Certificate alone may not be sufficient to transfer a proportionate share of the Transferor’s interest in the security constituted by the Finance Documents in the Transferor’s or Transferee’s jurisdiction. It is the responsibility of each Lender to ascertain whether any other documents are required for this purpose.
|
To:
|
Nordea Bank Finland Plc, London Branch
|
8th Floor
|
|
City Place House
|
|
55 Basinghall Street
|
|
London EC2V 5NB
|
(a)
|
Clause 11.16(a); the ratio of EBITDA to Net Interest Expense shall be no less than 3.0:1.0: [not] complied;
|
(b)
|
Clause 11.16(b); the aggregate of Cash and Cash Equivalents shall be equal to or greater than an amount equal to $1,000,000 multiplied by the number of Ships subject to a Mortgage: [not] complied; and
|
(c)
|
Clause 11.16(c); the ratio of Stockholders Equity to Total Assets shall be no less than 30:100: [not] complied.
|
President
|
|
for and on behalf of
|
|
CRUDE CARRIERS CORP.
|
1
|
The Mandatory Cost is an addition to the interest rate to compensate Lenders for the cost of compliance with (a) the requirements of the Financial Services Authority (or any other authority which replaces all or any of its functions) or (b) the requirements of the European Central Bank.
|
2
|
On the first day of each Interest Period (or as soon as possible thereafter) the Agent shall calculate, as a percentage rate, a rate (the
“Additional Cost Rate”
) for each Lender, in accordance with the paragraphs set out below. The Mandatory Cost will be calculated by the Agent as a weighted average of the Lenders’ Additional Cost Rates (weighted in proportion to the percentage participation of each Lender in the relevant Advance) and will be expressed as a percentage rate per annum.
|
3
|
The Additional Cost Rate for any Lender lending from a lending office in a Participating Member State will be the percentage notified by that Lender to the Agent. This percentage will be certified by that Lender in its notice to the Agent to be its reasonable determination of the cost (expressed as a percentage of that Lender’s participation in all Advances made from that lending office) of complying with the minimum reserve requirements of the European Central Bank in respect of loans made from that lending office.
|
4
|
The Additional Cost Rate for any Lender lending from a lending office in the United Kingdom will be calculated by the Agent as follows:
|
|
|
E x
0.01
|
per cent. per annum
|
|
|
300
|
|
E
|
is designed to compensate Lenders for amounts payable under the Fees Rules and is calculated by the Agent as being the average of the most recent rates of charge supplied by the Reference Banks to the Agent pursuant to paragraph 6 below and expressed in pounds per £1,000,000.
|
5
|
For the purposes of this Schedule:
|
(a)
|
“
Eligible Liabilities
” and “
Special Deposits
” have the meanings given to them from time to time under or pursuant to the Bank of England Act 1998 or (as may be appropriate) by the Bank of England;
|
(b)
|
“
Fees Rules
” means the rules on periodic fees contained in the FSA Supervision Manual or such other law or regulation as may be in force from time to time in respect of the payment of fees for the acceptance of deposits;
|
(c)
|
“
Fee Tariffs
” means the fee tariffs specified in the Fees Rules under the activity group A.1 Deposit acceptors (ignoring any minimum fee or zero rated fee required pursuant to the Fees Rules but taking into account any applicable discount rate);
|
(d)
|
“
Participating Member State
” means any member state of the European Union that adopts or has adopted the euro as its lawful currency in accordance with legislation of the European Union relating to European Monetary Union; and
|
(e)
|
“
Tariff Base
” has the meaning given to it in, and will be calculated in accordance with, the Fees Rules.
|
6
|
If requested by the Agent, each Reference Bank shall, as soon as practicable after publication by the Financial Services Authority, supply to the Agent, the rate of charge payable by that Reference Bank to the Financial Services Authority pursuant to the Fees Rules in respect of the relevant financial year of the Financial Services Authority (calculated for this purpose by that Reference Bank as being the average of the Fee Tariffs applicable to that Reference Bank for that financial year) and expressed in pounds per £1,000,000 of the Tariff Base of that Reference Bank.
|
7
|
Each Lender shall supply any information required by the Agent for the purpose of calculating its Additional Cost Rate. In particular, but without limitation, each Lender shall supply the following information in writing on or prior to the date on which it becomes a Lender:
|
8
|
The rates of charge of each Reference Bank for the purpose of E above shall be determined by the Agent based upon the information supplied to it pursuant to paragraph 6 above and on the assumption that, unless a Lender notifies the Agent to the contrary, each Lender’s obligations in relation to cash ratio deposits and special Deposits are the same as those of a typical bank from its jurisdiction of incorporation with a lending office in the same jurisdiction as its lending office.
|
9
|
The Agent shall have no liability to any person if such determination results in an Additional Cost Rate which over or under compensates any Lender and shall be entitled to assume that the information provided by any Lender or Reference Bank pursuant to paragraphs 3, 6 and 7 above is true and correct in all respects.
|
10
|
The Agent shall distribute the additional amounts received as a result of the Mandatory Cost to the Lenders on the basis of the Additional Cost Rate for each Lender based on the information provided by each Lender and each Reference Bank pursuant to paragraphs 3, 6 and 7 above.
|
11
|
Any determination by the Agent pursuant to this Schedule in relation to a formula, the Mandatory Cost, an Additional Cost Rate or any amount payable to a Lender shall, in the absence of manifest error, be conclusive and binding on all parties.
|
12
|
The Agent may from time to time, after consultation with the Borrower and the Lenders, determine and notify to all parties any amendments which are required to be made to this Schedule in order to comply with any change in law, regulation or any requirements from time to time imposed by the Financial Services Authority or the European Central Bank (or, in any case, any other authority which replaces all or any of its functions) and any such determination shall, in the absence of manifest error, be conclusive and binding on all parties.
|
Clause
|
Page
|
|
1
|
INTERPRETATION
|
1
|
2
|
FACILITY
|
15
|
3
|
POSITION OF THE LENDERS
|
15
|
4
|
DRAWDOWN
|
16
|
5
|
INTEREST
|
17
|
6
|
INTEREST PERIODS
|
19
|
7
|
DEFAULT INTEREST
|
20
|
8
|
REPAYMENT, PREPAYMENT AND CONVERSION TO TERM LOAN FACILITY
|
21
|
9
|
CONDITIONS PRECEDENT
|
23
|
10
|
REPRESENTATIONS AND WARRANTIES
|
24
|
11
|
GENERAL UNDERTAKINGS
|
26
|
12
|
CORPORATE UNDERTAKINGS
|
30
|
13
|
INSURANCE
|
31
|
14
|
SHIP COVENANTS
|
35
|
15
|
SECURITY COVER
|
39
|
16
|
PAYMENTS AND CALCULATIONS
|
40
|
17
|
APPLICATION OF RECEIPTS
|
42
|
18
|
APPLICATION OF EARNINGS
|
43
|
19
|
EVENTS OF DEFAULT
|
43
|
20
|
FEES AND EXPENSES
|
48
|
21
|
INDEMNITIES
|
49
|
22
|
NO SET-OFF OR TAX DEDUCTION
|
51
|
23
|
ILLEGALITY, ETC
|
51
|
24
|
INCREASED COSTS
|
52
|
25
|
SET-OFF
|
53
|
26
|
TRANSFERS AND CHANGES IN LENDING OFFICES
|
54
|
27
|
VARIATIONS AND WAIVERS
|
58
|
28
|
NOTICES
|
58
|
29
|
SUPPLEMENTAL
|
60
|
30
|
LAW AND JURISDICTION
|
61
|
SCHEDULE 1 LENDERS AND COMMITMENTS
|
62
|
|
SCHEDULE 2 DRAWDOWN NOTICE
|
63
|
|
SCHEDULE 3 CONDITION PRECEDENT DOCUMENTS
|
64
|
|
SCHEDULE 4 TRANSFER CERTIFICATE
|
68
|
|
SCHEDULE 5 FORM OF COMPLIANCE CERTIFICATE
|
72
|
|
SCHEDULE 6 MANDATORY COST FORMULA
|
73
|
|
EXECUTION PAGE
|
75
|
(1)
|
CRUDE CARRIERS CORP.
, a corporation incorporated in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 (the “
Borrower
”);
|
(2)
|
THE BANKS AND FINANCIAL INSTITUTIONS
listed in Schedule 1, as
Lenders
;
|
(3)
|
NORDEA BANK FINLAND PLC, LONDON BRANCH
, as
Lead Arranger
;
|
(4)
|
NORDEA BANK FINLAND PLC, LONDON BRANCH
, as
Agent
; and
|
(5)
|
NORDEA BANK FINLAND PLC, LONDON BRANCH
, as
Security
Trustee
.
|
(A)
|
By a loan agreement dated 22 April 2010 and made between the Borrower, the Lenders, the Lead Arranger, the Bookrunner, the Agent and the Security Trustee, the Lenders agreed to make available to the Borrower:
|
(i)
|
an acquisition facility of up to $140,000,000 for the purpose of financing up to 100 per cent. of the purchase price of each Acquired Ship; and
|
(ii)
|
a working capital facility of up to $10,000,000 for working capital and other general corporate purposes.
|
(B)
|
By the Amending and Restating Agreement, the Lenders have agreed to certain amendments to the loan agreement and the other Finance Documents.
|
(C)
|
This agreement sets out the terms and conditions of the loan agreement as amended and restated by the Amending and Restating Agreement.
|
1
|
INTERPRETATION
|
1.1
|
Definitions.
Subject to Clause 1.5, in this Agreement:
|
|
“
Account Security Deed
” means, in relation to an Earnings Account, a deed creating security in respect of that Earnings Account and in the case of the deeds executed by:
|
(a)
|
Amoureux Carriers Corp., Cooper Consultants Co. and Alexander the Great Carriers Corp., dated 2 June 2010;
|
(b)
|
Aias Carriers Corp., dated 4 June 2010; and
|
(c)
|
Achilleas Carriers Corp., dated 25 June 2010,
|
(a)
|
m.v. “AIAS” (ex “WALTZ”) registered in the name of Aias Carriers Corp. (one of the Guarantors) under the flag of Liberia;
|
(b)
|
m.v. “ACHILLEAS” registered in the name of Achilleas Carriers Corp. (one of the Guarantors) under the flag of Liberia; and
|
(c)
|
each other ship owned or to be owned by a wholly owned direct or indirect subsidiary of the Borrower, registered or to be registered on an Approved Flag and the purchase of which is financed or to be financed under this Agreement;
|
|
“
Acquisition Facility
” means a portion of the Total Commitments not exceeding $190,000,000 (as that amount may be reduced, cancelled or terminated in accordance with this Agreement) which is to be used by the Borrower for the purpose set out in Recital (A)(i);
|
|
“
Advance
” means the principal amount of each borrowing by the Borrower under this Agreement;
|
|
“
Affected Lender
” has the meaning given in Clause 5.7;
|
|
“
Agency and Trust Deed
” means the agency and trust deed dated 22 April 2010 and made between the same parties as are party to this Agreement and as amended and supplemented by the Amending and Restating Agreement;
|
|
“
Agent
” means Nordea Bank Finland Plc, London Branch, acting in such capacity through its office at 8th Floor, City Place House, 55 Basinghall Street, London EC2V 5NB, or any successor of it appointed under clause 5 of the Agency and Trust Deed;
|
|
“
Agreed Form
” means in relation to any document, that document in the form approved in writing by the Agent or as otherwise approved in accordance with any other approval procedure specified in any relevant provision of any Finance Document;
|
|
(a)
|
R.S. Platou Shipbrokers a.s.;
|
|
(b)
|
Fearnleys AS;
|
|
(c)
|
Pareto Shipbrokers AS;
|
|
(d)
|
Braemar Shipping Services Plc;
|
|
(e)
|
Arrow Valuations;
|
|
(f)
|
Clarksons Plc; and
|
|
(g)
|
any other independent sale and purchase shipbroker which the Agent (with the authorisation of the Majority Lenders and the agreement of the Borrower) has approved or selected,
|
|
“
Approved Flag
” means Greece, Liberia, Marshall Islands, Panama or any other flag acceptable to the Agent, acting with the authorisation of the Majority Lenders;
|
|
“
Availability Period
” means the period commencing on the date of this Agreement and ending on:
|
(a)
|
the Maturity Date (or such later date as the Agent may, with the authorisation of the Majority Lenders, agree with the Borrower); or
|
(b)
|
if earlier, the date on which the Total Commitments are fully cancelled or terminated;
|
|
“
Business Day
” means a day on which banks are open in Athens and London and, in respect of a day on which a payment is required to be made under a Finance Document, also in New York City;
|
|
“
Charter Assignment
” means, in relation to a time charter as referred to in Clause 14.16, a first priority assignment in the Agreed Form (or, in the case of a time charter governed by any law other than English law, in the form reasonably required by the Agent) by the Guarantor owning the Ship to which that time charter relates in favour of the Security Trustee of that time charter and any supporting guarantee in relation to that time charter;
|
|
“
Commitment
” means, in relation to a Lender, the amount set opposite its name in Schedule 1, or, as the case may require, the amount specified in the relevant Transfer Certificate, as that amount may be reduced, cancelled or terminated in accordance with this Agreement (and “
Total Commitments
” means the aggregate of the Commitments of all the Lenders);
|
|
“
Contractual Currency
” has the meaning given in Clause 21.4;
|
|
“
Contribution
” means, in relation to a Lender, the part of the Loan which is owing to that Lender;
|
|
“
Creditor Party
” means any Lead Arranger, the Agent, the Security Trustee or any Lender, whether as at the date of this Agreement or at any later time;
|
|
“
Dollars
” and “
$
” means the lawful currency for the time being of the United States of America;
|
|
“
Drawdown Date
” means, in relation to an Advance, the date requested by the Borrower for the Advance to be made, or (as the context requires) the date on which the Advance is actually made;
|
|
“
Drawdown Notice
” means a notice in the form set out in Schedule 2 (or in any other form which the Agent approves or reasonably requires);
|
(a)
|
except to the extent that they fall within paragraph (b);
|
(i)
|
all freight, hire and passage moneys;
|
(ii)
|
compensation payable to that Guarantor or the Security Trustee in the event of requisition of that Ship for hire;
|
(iii)
|
remuneration for salvage and towage services;
|
(iv)
|
demurrage and detention moneys;
|
(v)
|
damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of that Ship; and
|
(vi)
|
all moneys which are at any time payable under any Insurances in respect of loss of hire; and
|
|
(b)
|
if and whenever that Ship is employed on terms whereby any moneys falling within paragraphs (a)(i) to (vi) are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to that Ship;
|
|
“
Earnings Account
” means, in relation to a Ship, an account in the name of the Guarantor owning that Ship with the Agent in London designated with that Ship’s name and “Earnings Account”, or any other account (with that or another office of the Agent or with a bank or financial institution other than the Agent) which is designated by the Agent as the Earnings Account for that Ship for the purposes of this Agreement;
|
|
“
Environmental Claim
” means:
|
(a)
|
any claim by any governmental, judicial or regulatory authority which arises out of an Environmental Incident or an alleged Environmental Incident or which relates to any Environmental Law; or
|
(b)
|
any claim by any other person which relates to an Environmental Incident or to an alleged Environmental Incident,
|
|
“
Environmental Incident
” means, in relation to a Ship:
|
(a)
|
any release of Environmentally Sensitive Material from that Ship; or
|
(b)
|
any incident in which Environmentally Sensitive Material is released from a vessel other than that Ship and which involves a collision between that Ship and such other vessel or some other incident of navigation or operation, in either case, in connection with which that Ship is actually or potentially liable to be arrested, attached, detained or injuncted and/or that Ship and/or the Guarantor owning that Ship and/or any operator and/or any manager of that Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action; or
|
(c)
|
any other incident in which Environmentally Sensitive Material is released otherwise than from that Ship and in connection with which that Ship is actually or potentially liable to be arrested and/or where the Guarantor owning that Ship and/or any operator and/or any manager of that Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action;
|
|
“
Environmentally Sensitive Material
” means oil, oil products and any other substance (including any chemical, gas or other hazardous or noxious substance) which is (or is capable of being or becoming) polluting, toxic or hazardous;
|
|
“
Event of Default
” means any of the events or circumstances described in Clause 19.1;
|
|
“
Fee Letter
” means the letter or letters signed or to be signed by the Borrower and Nordea Bank Finland Plc, London Branch setting out fees in relation to this Agreement;
|
|
“
Finance Documents
” means:
|
(a)
|
this Agreement;
|
(b)
|
the Fee Letter(s);
|
(c)
|
the Agency and Trust Deed;
|
(d)
|
the Guarantees;
|
(e)
|
the Mortgages;
|
(f)
|
the Charter Assignments (if any);
|
(g)
|
the General Assignments;
|
(h)
|
the Account Security Deeds;
|
(i)
|
the Shares Pledges; and
|
(j)
|
any other document (whether creating a Security Interest or not) which is executed at any time by the Borrower or any other person as security for, or to establish any form of subordination or priorities arrangement in relation to, any amount payable to the Lenders under this Agreement or any of the other documents referred to in this definition;
|
|
“
Financial Indebtedness
” means, in relation to a person (the “
debtor
”), a liability of the debtor:
|
(a)
|
for principal, interest or any other sum payable in respect of any moneys borrowed or raised by the debtor;
|
(b)
|
under any loan stock, bond, note or other security issued by the debtor;
|
(c)
|
under any acceptance credit, guarantee or letter of credit facility or dematerialised equivalent made available to the debtor;
|
(d)
|
under a financial lease, a deferred purchase consideration arrangement or any other agreement having the commercial effect of a borrowing or raising of money by the debtor;
|
(e)
|
under any foreign exchange transaction, any interest or currency swap or any other kind of derivative transaction entered into by the debtor; or
|
(f)
|
under a guarantee, indemnity or similar obligation entered into by the debtor in respect of a liability of another person which would fall within paragraphs (a) to (e) if the references to the debtor referred to the other person;
|
|
“
General Assignment
” means, in relation to a Ship, a general assignment by the Guarantor owning that Ship in favour of the Security Trustee of the Earnings of that Ship, the Insurances of that Ship and any Requisition Compensation in relation to that Ship and in the case of:
|
(a)
|
the Initial Ships, each dated 2 June 2010 and as amended and supplemented by the Amending and Restating Agreement;
|
(b)
|
m.v. “AIAS” (ex “WALTZ”), dated 4 June 2010 and as amended and supplemented by the Amending and Restating Agreement;
|
(c)
|
m.v. “ACHILLEAS”, dated 25 June 2010 and as amended and supplemented by the Amending and Restating Agreement; and
|
(d)
|
any other Ship, in the Agreed Form;
|
|
“
Group
” means the Borrower and its subsidiaries (whether direct or indirect) from time to time during the Security Period;
|
|
“
Guarantee
” means, in relation to a Guarantor, a guarantee executed or to be executed by the Guarantor in favour of the Security Trustee in respect of the liabilities of the Borrower under this Agreement and the other Finance Documents and in relation to:
|
(a)
|
the guarantees provided by Cooper Consultants Co., Amoureux Carriers Corp., and Alexander the Great Carriers Corp., each dated 1 June 2010 and as amended and supplemented by the Amending and Restating Agreement;
|
(b)
|
the guarantee provided by Aias Carriers Corp., dated 4 June 2010 and as amended and supplemented by the Amending and Restating Agreement;
|
(c)
|
the guarantee provided by Achilleas Carriers Corp., dated 25 June 2010 and as amended and supplemented by the Amending and Restating Agreement; and
|
(d)
|
any other Guarantor, a guarantee in the Agreed Form;
|
|
“
Guarantor
” means a company or corporation incorporated in a jurisdiction acceptable to the Lenders, which is a wholly owned direct subsidiary of the Shareholder and which owns or will own a Ship;
|
|
“
Initial Ships
” means:
|
|
(a)
|
m.v. “MILTIADIS M II” registered in the name of Cooper Consultants Co. (one of the Guarantors) under the flag of Liberia;
|
|
(b)
|
m.v. “AMOUREUX” (ex “TANGO”) registered in the name of, Amoureux Carriers Corp. (one of the Guarantors) under the flag of Liberia; and
|
|
(c)
|
m.v. “ALEXANDER THE GREAT” registered in the name of Alexander the Great Carriers Corp. (one of the Guarantors) under the flag of Liberia,
|
|
and, in the singular, means any of them;
|
|
“
Insurances
” means, in relation to a Ship:
|
(a)
|
all policies and contracts of insurance, including entries of that Ship in any protection and indemnity or war risks association, effected in respect of that Ship, its Earnings or otherwise in relation to that Ship whether before, on or after the date of this Agreement; and
|
(b)
|
all rights and other assets relating to, or derived from, any of the foregoing, including any rights to a return of a premium and any rights in respect of any claim whether or not the relevant policy, contract of insurance or entry has expired on or before the date of this Agreement;
|
|
“
ISM Code
” means the International Safety Management Code (including the guidelines on its implementation), adopted by the International Maritime Organisation, as the same may be amended or supplemented from time to time (and the terms “safety management system”, “Safety Management Certificate” and “Document of Compliance” have the same meanings as are given to them in the ISM Code);
|
|
“ISSC”
means a valid and current International Ship Security Certificate issued under the ISPS Code;
|
|
(a)
|
Nordea Bank Finland Plc, London Branch, acting in such capacity through its office at 8th Floor, City Place House, 55 Basinghall Street, London EC2V 5NB; and
|
|
(b)
|
any other Lender notified by the Agent to the Borrower as being a lead arranger under this Agreement,
|
|
“
Lender
” means a bank or financial institution listed in Schedule 1 and acting through its branch indicated in Schedule 1 (or through another branch notified to the Borrower under Clause 26.14) or its transferee, successor or assign;
|
|
(a)
|
the applicable Screen Rate; or
|
(b)
|
if no Screen Rate is available for that period, the rate per annum determined by the Agent to be the arithmetic mean (rounded upwards to 4 decimal places) of the rates, as supplied to the Agent at its request, quoted by each Reference Bank to leading banks in the London Interbank Market,
|
|
as of 11 a.m. (London time) on the Quotation Date for that period for the offering of deposits in the relevant currency and for a period comparable to that period;
|
|
“
Major Casualty
” means, in relation to a Ship, any casualty to that Ship in respect of which the claim or the aggregate of the claims against all insurers, before adjustment for any relevant franchise or deductible exceeds $3,000,000 or the equivalent in any other currency;
|
|
“
Majority Lenders
” means:
|
(a)
|
before an Advance has been made, Lenders whose Commitments total 66.66 per cent. of the Total Commitments; and
|
(b)
|
after an Advance has been made, Lenders whose Contributions total 66.66 per cent. of the Loan,
|
|
“
Mandatory Cost
” means the percentage rate per annum calculated by the Agent in accordance with Schedule 6;
|
|
“
Margin
” means:
|
(a)
|
in relation to any Advance made pursuant to the Acquisition Facility or the Working Capital Facility, 3 per cent. per annum; and
|
(b)
|
in relation to any Advance converted into an Advance under the Term Loan Facility, 3.25 per cent. per annum;
|
|
“
Marinakis Family
” means Mr Evangelos Marinakis, his spouse, his direct lineal descendants, the personal estate of any of the aforementioned persons and any trust created for the benefit of one or more of the aforementioned persons and their estates;
|
|
“
Material Adverse Effect
” means a material adverse effect:
|
|
(a)
|
on any of the rights or remedies of he Creditor Parties (or any of them) under the Finance Documents (or any of them) or the general law in relation to the Finance Documents (or any of them);
|
|
(b)
|
on the discharge and performance by the Borrower or any Security Party of an of its liabilities and obligations under the Finance Documents (or any of them);
|
|
(c)
|
with respect to this Agreement or any other Finance Document; or
|
|
(d)
|
on the property, assets, nature of assets, operations, liabilities, condition or prospects (financial or otherwise) of the Borrower or any Security Party;
|
|
“
Maturity Date
” means 31 March 2015;
|
|
“
Mortgage
” means in relation to:
|
(a)
|
the Initial Ships, a first preferred Liberian Ship mortgage on each Ship, each dated 1 June 2010 and as amended and supplemented by the relevant Mortgage Addendum;
|
(b)
|
m.v. “AIAS” (ex “WALTZ”), a first preferred Liberian Ship mortgage dated 4 June 2010 as amended and supplemented by the relevant Mortgage Addendum;
|
(c)
|
m.v. “ACHILLEAS”, a first preferred Liberian Ship mortgage dated 25 June 2010 as amended and supplemented by the relevant Mortgage Addendum; and
|
(d)
|
any other Ship, the first priority/preferred ship mortgage on that Ship governed by the law of the flag of that Ship (together with, if applicable, a collateral deed of covenant) in the Agreed Form;
|
|
“
Mortgage Addendum
” means, in relation to the Mortgage in respect of each of the Initial Ships, m.v. “AIAS” and m.v. “ACHILLEAS”, the amendment to such Mortgage in the Agreed Form and in the plural means all of them;
|
|
“
Negotiation Period
” has the meaning given in Clause 5.10;
|
|
“
Notifying Lender
” has the meaning given in Clause 23.1 or Clause 24.1 as the context requires;
|
|
“
Payment Currency
” has the meaning given in Clause 21.4;
|
|
“
Permitted Security Interests
” means:
|
(a)
|
Security Interests created by the Finance Documents;
|
(b)
|
liens for unpaid master’s and crew’s wages in accordance with usual maritime practice;
|
(c)
|
liens for salvage;
|
(d)
|
liens arising by operation of law for not more than 2 months’ prepaid hire under any charter in relation to any Ship not prohibited by this Agreement;
|
(e)
|
liens for master’s disbursements incurred in the ordinary course of trading and any other lien arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of any Ship, provided such liens do not secure amounts more than 30 days overdue (unless the overdue amount is being contested by the Guarantor owning that Ship in good faith by appropriate steps) and subject, in the case of liens for repair or maintenance, to Clause 14.12(g);
|
(f)
|
any Security Interest created in favour of a plaintiff or defendant in any proceedings or arbitration as security for costs and expenses while the Borrower or (as the case may be) the relevant Security Party is actively prosecuting or defending such proceedings or arbitration in good faith; and
|
(g)
|
Security Interests arising by operation of law in respect of taxes which are not overdue for payment or in respect of taxes being contested in good faith by appropriate steps and in respect of which appropriate reserves have been made;
|
|
“
Pertinent Document
” means:
|
(a)
|
any Finance Document;
|
(b)
|
any policy or contract of insurance contemplated by or referred to in Clause 13 or any other provision of this Agreement or another Finance Document;
|
(c)
|
any other document contemplated by or referred to in any Finance Document; and
|
(d)
|
any document which has been or is at any time sent by or to a Servicing Bank in contemplation of or in connection with any Finance Document or any policy, contract or document falling within paragraphs (b) or (c);
|
|
“
Pertinent Jurisdiction
”, in relation to a company, means:
|
(a)
|
England and Wales;
|
(b)
|
the country under the laws of which the company is incorporated or formed;
|
(c)
|
a country in which the company has the centre of its main interests or in which the company’s central management and control is or has recently been exercised;
|
(d)
|
a country in which the overall net income of the company is subject to corporation tax, income tax or any similar tax;
|
(e)
|
a country in which assets of the company (other than securities issued by, or loans to, related companies) having a substantial value are situated, in which the company maintains a branch or permanent place of business, or in which a Security Interest created by the company must or should be registered in order to ensure its validity or priority; and
|
(f)
|
a country the courts of which have jurisdiction to make a winding up, administration or similar order in relation to the company, whether as main or territorial or ancillary proceedings or which would have such jurisdiction if their assistance were requested by the courts of a country referred to in paragraphs (b) or (c);
|
|
“
Pertinent Matter
” means:
|
(a)
|
any transaction or matter contemplated by, arising out of, or in connection with a Pertinent Document; or
|
(b)
|
any statement relating to a Pertinent Document or to a transaction or matter falling within paragraph (a);
|
|
“
Potential Event of Default
” means an event or circumstance which, with the giving of any notice, the lapse of time, a reasonable determination of the Majority Lenders and/or the satisfaction of any other condition, would constitute an Event of Default;
|
|
“
Purchase Contract
” means, in relation to an Acquired Ship, the agreement in respect of the sale of that Acquired Ship made or to be made between the seller of that Acquired Ship, as seller and a Guarantor, as buyer;
|
|
“
Quotation Date
” means, in relation to any period for which an interest rate is to be determined under any provision of a Finance Document, the day which is 2 Business Days before the first day of that period, unless market practice differs in the London Interbank Market for a currency, in which case the Quotation Date will be determined by the Agent in accordance with market practice in the London Interbank Market (and if quotations would normally be given by leading banks in the London Interbank Market on more than one day, the Quotation Date will be the last of those days);
|
|
“
Reference Banks
” means, subject to Clause 26.16, Nordea Bank Finland Plc, London Branch and the principal London branches of up to 2 other prime international banks which the Agent may from time to time select;
|
|
“
Relevant Person
” has the meaning given in Clause 19.9;
|
|
“
Repayment Date
” means a date on which a repayment is required to be made under Clause 8;
|
|
“
Requisition Compensation
” includes, in relation to a Ship, all compensation or other moneys payable by reason of any act or event such as is referred to in paragraph (b) of the definition of “Total Loss”;
|
|
“
Screen Rate
” means, in relation to any period for which an interest rate is to be determined under any provision of a Finance Document, the British Bankers’ Association Interest Settlement Rate for the relevant currency and period displayed on the appropriate page of the Reuters screen. If the agreed page is replaced or service ceases to be available, the Agent may specify another page or service displaying the appropriate rate after consultation with the Borrower and the Lenders;
|
|
“
Secured Liabilities
” means all liabilities which the Borrower, the Security Parties or any of them have, at the date of this Agreement or at any later time or times, under or in connection with any Finance Document or any judgment relating to any Finance Document; and for this purpose, there shall be disregarded any total or partial discharge of these liabilities, or variation of their terms, which is effected by, or in connection with, any bankruptcy, liquidation, arrangement or other procedure under the insolvency laws of any country;
|
|
“
Security Interest
” means:
|
(a)
|
a mortgage, charge (whether fixed or floating) or pledge, any maritime or other lien or any other security interest of any kind;
|
(b)
|
the security rights of a plaintiff under an action
in rem
; and
|
(c)
|
any arrangement entered into by a person (A) the effect of which is to place another person (B) in a position which is similar, in economic terms, to the position in which B would have been had he held a security interest over an asset of A; but this paragraph (c) does not apply to a right of set off or combination of accounts conferred by the standard terms of business of a bank or financial institution;
|
|
“
Security Party
” means each Guarantor, the Shareholder and any other person (except a Creditor Party, an Approved Manager or a charterer of any Ship which is not a company in the Group) who, as a surety or mortgagor, as a party to any subordination or priorities arrangement, or in any similar capacity, executes a document falling within the last paragraph of the definition of “Finance Documents”;
|
|
“
Security Period
” means the period commencing on the date of this Agreement and ending on the date on which the Agent notifies the Borrower, the Security Parties and the Lenders that:
|
(a)
|
all amounts which have become due for payment by the Borrower or any Security Party under the Finance Documents have been paid;
|
(b)
|
no amount is owing or has accrued (without yet having become due for payment) under any Finance Document;
|
(c)
|
neither the Borrower nor any Security Party has any future or contingent liability under Clause 20, 21 or 22 or any other provision of this Agreement or another Finance Document; and
|
(d)
|
the Agent, the Security Trustee and the Majority Lenders do not consider that there is a significant risk that any payment or transaction under a Finance Document would be set aside, or would have to be reversed or adjusted, in any present or possible future bankruptcy of the Borrower or a Security Party or in any present or possible future proceeding relating to a Finance Document or any asset covered (or previously covered) by a Security Interest created by a Finance Document;
|
|
“
Security Trustee
” means Nordea Bank Finland Plc, London Branch, acting in such capacity through its office at 8th Floor, City Place House, 55 Basinghall Street, London EC2V 5NB, or any successor of it appointed under clause 5 of the Agency and Trust Deed;
|
|
“
Seller
” means, in relation to an Acquired Ship, the seller of that Acquired Ship under the Purchase Contract for that Acquired Ship;
|
|
“
Servicing Bank
” means the Agent or the Security Trustee;
|
|
“
Shareholder
” means Crude Carriers Operating Corp. a corporation incorporated in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960;
|
|
“
Ships
” means the Acquired Ships and the Initial Ships and, in the singular, means any of them;
|
|
“
SMC
” means, in relation to a Ship, a safety management certificate issued in respect of that Ship in accordance with Rule 13 of the ISM Code;
|
|
“
Term Loan Facility
” means such proportion of the Acquisition Facility as the Borrower may have converted into a term loan in accordance with Clause 8.1(c) (as that amount may be reduced, cancelled or terminated in accordance with this Agreement);
|
|
“
Total Loss
” means, in relation to a Ship:
|
(a)
|
actual, constructive, compromised, agreed or arranged total loss of that Ship;
|
(b)
|
any expropriation, confiscation, requisition or acquisition of that Ship, whether for full consideration, a consideration less than its proper value, a nominal consideration or without any consideration, which is effected by any government or official authority or by any person or persons claiming to be or to represent a government or official authority (excluding a requisition for hire for a fixed period not exceeding 1 year without any right to an extension) unless it is within 1 month redelivered to the full control of the Guarantor owning that Ship; and
|
(c)
|
any arrest, capture, seizure or detention of that Ship (including any hijacking or theft) unless it is within 2 months redelivered to the full control of the Guarantor owning that Ship;
|
|
“
Total Loss Date
” means, in relation to a Ship:
|
(a)
|
in the case of an actual loss of that Ship, the date on which it occurred or, if that is unknown, the date when that Ship was last heard of;
|
(b)
|
in the case of a constructive, compromised, agreed or arranged total loss of that Ship, the earliest of:
|
(i)
|
the date on which a notice of abandonment is given to the insurers; and
|
(ii)
|
the date of any compromise, arrangement or agreement made by or on behalf of the Guarantor owning that Ship with that Ship's insurers in which the insurers agree to treat that Ship as a total loss; and
|
(c)
|
in the case of any other type of total loss, on the date (or the most likely date) on which it appears to the Agent that the event constituting the total loss occurred;
|
|
“
Transfer Certificate
” has the meaning given in Clause 26.2;
|
|
“
Trust Property
” has the meaning given in clause 3.1 of the Agency and Trust Deed; and
|
|
“
Working Capital Facility
” means a portion of the Total Commitments not exceeding $10,000,000 (as that amount may be reduced, cancelled or terminated in accordance with this Agreement) which is to be used by the Borrower for the purpose set out in Recital (A)(ii).
|
1.2
|
Construction of certain terms.
In this Agreement:
|
|
“
approved
” means, for the purposes of Clause 13, approved in writing by the Agent;
|
|
“
asset
” includes every kind of property, asset, interest or right, including any present, future or contingent right to any revenues or other payment;
|
|
“
company
” includes any partnership, joint venture and unincorporated association;
|
|
“
contingent liability
” means a liability which is not certain to arise and/or the amount of which remains unascertained;
|
|
“
control
” by one person (A) of another (B) means that A (whether directly or indirectly and whether by the ownership of share capital, the possession of voting power, contract or otherwise) has the power to appoint and/or remove all or the majority of the members of the board of directors or other governing body of B or otherwise controls or has the power to control (in either case whether directly or indirectly) the affairs and policies of B;
|
|
“
document
” includes a deed; also a letter or fax;
|
|
“
excess risks
” means, in relation to a Ship, the proportion of claims for general average, salvage and salvage charges not recoverable under the hull and machinery policies in respect of that Ship in consequence of its insured value being less than the value at which that Ship is assessed for the purpose of such claims;
|
|
“
expense
” means any kind of cost, charge or expense (including all legal costs, charges and expenses) and any applicable value added or other tax;
|
|
“
law
” includes any order or decree, any form of delegated legislation, any treaty or international convention and any regulation or resolution of the Council of the European Union, the European Commission, the United Nations or its Security Council;
|
|
“
legal or administrative action
” means any legal proceeding or arbitration and any administrative or regulatory action or investigation;
|
|
“
liability
” includes every kind of debt or liability (present or future, certain or contingent), whether incurred as principal or surety or otherwise;
|
|
“
months
” shall be construed in accordance with Clause 1.3;
|
|
“
obligatory insurances
” means all insurances effected, or which any Guarantor is obliged to effect, under Clause 13 or any other provision of this Agreement or another Finance Document;
|
|
“
parent company
” has the meaning given in Clause 1.4;
|
|
“
person
” includes any company; any state, political sub-division of a state and local or municipal authority; and any international organisation;
|
|
“
policy
”, in relation to any insurance, includes a slip, cover note, certificate of entry or other document evidencing the contract of insurance or its terms;
|
|
“
protection and indemnity risks
” means the usual risks covered by a protection and indemnity association managed in London, including pollution risks and the proportion (if any) of any sums payable to any other person or persons in case of collision which are not recoverable under the hull and machinery policies by reason of the incorporation in them of clause 6 of the International Hull Clauses (1/11/02 or 1/11/03), clause 8 of the Institute Time Clauses (Hulls) (1/11/95) or clause 8 of the Institute Time Clauses (Hulls) (1/10/83) or the Institute Amended Running Down Clause (1/10/71) or any equivalent provision;
|
|
“
subsidiary
” has the meaning given in Clause 1.4;
|
|
“
tax
” includes any present or future tax, duty, impost, levy or charge of any kind which is imposed by any state, any political sub-division of a state or any local or municipal authority (including any such imposed in connection with exchange controls), and any connected penalty, interest or fine; and
|
|
“
war risks
” includes the risk of mines, terrorism, confiscation and all risks excluded by clause 29 of the International Hull Clauses (1/11/02 or 1/11/03), clause 24 of the Institute Time Clauses (Hulls)(1/11/95) or clause 23 of the Institute Time Clauses (Hulls) (1/10/83).
|
1.3
|
Meaning of “month”.
A period of one or more “months” ends on the day in the relevant calendar month numerically corresponding to the day of the calendar month on which the period started (“
the numerically corresponding day
”), but:
|
(a)
|
on the Business Day following the numerically corresponding day if the numerically corresponding day is not a Business Day or, if there is no later Business Day in the same calendar month, on the Business Day preceding the numerically corresponding day; or
|
(b)
|
on the last Business Day in the relevant calendar month, if the period started on the last Business Day in a calendar month or if the last calendar month of the period has no numerically corresponding day,
|
1.4
|
Meaning of “subsidiary”.
A company (S) is a subsidiary of another company (P) if:
|
(a)
|
a majority of the issued shares in S (or a majority of the issued shares in S which carry unlimited rights to capital and income distributions) are directly owned by P; or
|
(b)
|
P has direct control over a majority of the voting rights attaching to the issued shares of S; or
|
(c)
|
P has the direct power to appoint or remove a majority of the directors of S;
|
1.5
|
General Interpretation.
In this Agreement:
|
(a)
|
references to, or to a provision of, a Finance Document or any other document are references to it as amended or supplemented, whether before the date of this Agreement or otherwise;
|
(b)
|
references to, or to a provision of, any law include any amendment, extension, re-enactment or replacement, whether made before the date of this Agreement or otherwise;
|
(c)
|
words denoting the singular number shall include the plural and vice versa; and
|
(d)
|
Clauses 1.1 to 1.5 apply unless the contrary intention appears.
|
1.6
|
Headings.
In interpreting a Finance Document or any provision of a Finance Document, all clause, sub-clause and other headings in that and any other Finance Document shall be entirely disregarded.
|
2
|
FACILITY
|
2.1
|
Amount of facility.
Subject to the other provisions of this Agreement, the Lenders shall make an aggregate loan facility not exceeding $200,000,000 available to the Borrower consisting of the Acquisition Facility, the Working Capital Facility and, in the event that the Borrower exercises its option under Clause 8.1(c), the Term Loan Facility.
|
2.2
|
Lenders' participations in Loan.
Subject to the other provisions of this Agreement, each Lender shall participate in each Advance in the proportion which, as at the relevant Drawdown Date, its Commitment bears to the Total Commitments.
|
2.3
|
Purpose of Loan.
|
(a)
|
The Borrower undertakes with each Creditor Party to use each Advance under the Acquisition Facility only for the purpose stated in Recital (A)(i).
|
(b)
|
The Borrower undertakes with each Creditor Party to use each Advance under the Working Capital Facility only for the purpose stated in Recital (A)(ii).
|
3
|
POSITION OF THE LENDERS
|
3.1
|
Interests of Lenders several.
The rights of the Lenders under this Agreement are several.
|
3.2
|
Individual Lender’s right of action.
Each Lender shall be entitled to sue for any amount which has become due and payable by the Borrower to it under this Agreement without joining any Lead Arranger, the Agent, the Security Trustee or any other Lender as additional parties in the proceedings.
|
3.3
|
Proceedings by individual Lender requiring Majority Lender consent.
Except as provided in Clause 3.2, no Lender may commence proceedings against the Borrower or any Security Party in connection with a Finance Document without the prior consent of the Majority Lenders.
|
3.4
|
Obligations of Lenders several.
The obligations of the Lenders under this Agreement are several; and a failure of a Lender to perform its obligations under this Agreement shall not result in:
|
(a)
|
the obligations of the other Lenders being increased; nor
|
(b)
|
the Borrower, any Security Party or any other Lender being discharged (in whole or in part) from its obligations under any Finance Document,
|
|
and in no circumstances shall a Lender have any responsibility for a failure of another Lender to perform its obligations under this Agreement.
|
4
|
DRAWDOWN
|
4.1
|
Request for Advance.
Subject to the following conditions, the Borrower may request an Advance to be made by ensuring that the Agent receives a completed Drawdown Notice not later than 11.00 a.m. (London time) 3 Business Days prior to the intended Drawdown Date.
|
4.2
|
Availability.
The conditions referred to in Clause 4.1 are that:
|
(a)
|
an Advance shall be made available under either the Acquisition Facility or the Working Capital Facility;
|
(b)
|
a Drawdown Date has to be a Business Day during the Availability Period;
|
(c)
|
the aggregate amount of the Advances under the Acquisition Facility shall not exceed the Acquisition Facility or, in the event that the Borrower has exercised its option under Clause 8.1(c), the aggregate of the Acquisition Facility and the Term Loan Facility;
|
(d)
|
the aggregate amount of the Advances under the Working Capital Facility shall not exceed the Working Capital Facility;
|
(e)
|
the amount of an Advance under the Acquisition Facility shall not exceed the total acquisition cost payable by the buyer under the Purchase Contract for the Acquired Ship to which that Advance relates on the Drawdown Date for that Advance (and, for the avoidance of doubt, no Advance shall be used for the purpose of financing part or all of the acquisition cost of an Initial Ship);
|
(f)
|
immediately following the making of the Advance, the Loan will not exceed 40 per cent. of the aggregate market value of all of the Ships then subject to a Mortgage (
Provided that
no Ship then subject to a Mortgage will be included in the calculation set out in this Clause unless the Agent has first received for that Ship all of the documents and evidence
|
|
described in Part B of Schedule 3, each in form and substance satisfactory to the Agent and its lawyers); and
|
(g)
|
the aggregate amount of the Advances shall not exceed the Total Commitments.
|
4.3
|
Notification to Lenders of receipt of a Drawdown Notice.
The Agent shall promptly notify the Lenders that it has received a Drawdown Notice and shall inform each Lender of:
|
(a)
|
the amount of the Advance and the Drawdown Date;
|
(b)
|
the amount of that Lender's participation in the Advance; and
|
(c)
|
the duration of the first Interest Period.
|
4.4
|
Drawdown Notice irrevocable.
A Drawdown Notice must be signed by an authorised signatory of the Borrower; and once served, a Drawdown Notice cannot be revoked without the prior consent of the Agent, acting on the authorisation of the Majority Lenders.
|
4.5
|
Lenders to make available Contributions.
Subject to the provisions of this Agreement, each Lender shall, on and with value on each Drawdown Date, make available to the Agent for the account of the Borrower the amount due from that Lender on that Drawdown Date under Clause 2.2.
|
4.6
|
Disbursement of Advance.
Subject to the provisions of this Agreement, the Agent shall on each Drawdown Date pay to the Borrower the amounts which the Agent receives from the Lenders under Clause 4.5; and that payment to the Borrower shall be made:
|
(a)
|
to the account which the Borrower specifies in the Drawdown Notice; and
|
(b)
|
in the like funds as the Agent received the payments from the Lenders.
|
4.7
|
Disbursement of Advance to third party.
The payment by the Agent under Clause 4.6 shall constitute the making of the Advance and the Borrower shall at that time become indebted, as principal and direct obligor, to each Lender in an amount equal to that Lender's Contribution.
|
5
|
INTEREST
|
5.1
|
Payment of normal interest.
Subject to the provisions of this Agreement, interest on each Advance in respect of each Interest Period applicable to that Advance shall be paid by the Borrower on the last day of that Interest Period.
|
5.2
|
Normal rate of interest.
Subject to the provisions of this Agreement, the rate of interest on each Advance in respect of each Interest Period applicable to that Advance shall be the aggregate of the Margin, the Mandatory Cost (if any) and LIBOR for that Interest Period.
|
5.3
|
Payment of accrued interest.
In the case of an Interest Period longer than 3 months, accrued interest shall be paid every 3 months during that Interest Period and on the last day of that Interest Period.
|
5.4
|
Notification of Interest Periods and rates of normal interest.
The Agent shall notify the Borrower and each Lender of:
|
(a)
|
each rate of interest; and
|
(b)
|
the duration of each Interest Period,
|
5.5
|
Obligation of Reference Banks to quote.
A Lender which is a Reference Bank shall use all reasonable efforts to supply the quotation required of it for the purposes of fixing a rate of interest under this Agreement.
|
5.6
|
Absence of quotations by Reference Banks.
If any Reference Bank fails to supply a quotation, the Agent shall determine the relevant LIBOR on the basis of the quotations supplied by the other Reference Bank or Banks; but if 2 or more of the Reference Banks fail to provide a quotation, the relevant rate of interest shall be set in accordance with the following provisions of this Clause 5.
|
5.7
|
Market disruption.
The following provisions of this Clause 5 apply if:
|
(a)
|
no screen rate is available for an Interest Period and 2 or more of the Reference Banks do not, before 1.00 p.m. (London time) on the Quotation Date for an Interest Period, provide quotations to the Agent in order to fix LIBOR; or
|
(b)
|
at least 1 Business Day before the start of an Interest Period, Lenders having Contributions together amounting to more than 50 per cent. of the Loan (or, if an Advance has not been made, Commitments amounting to more than 50 per cent. of the Total Commitments) notify the Agent that LIBOR fixed by the Agent would not accurately reflect the cost to those Lenders of funding their respective Contributions (or any part of them) during the Interest Period in the London Interbank Market at or about 11.00 a.m. (London time) on the Quotation Date for the Interest Period; or
|
(c)
|
at least 1 Business Day before the start of an Interest Period, the Agent is notified by a Lender (the “
Affected Lender
”) that for any reason it is unable to obtain Dollars in the London Interbank Market in order to fund its Contribution (or any part of it) during the Interest Period.
|
5.8
|
Notification of market disruption.
The Agent shall promptly notify the Borrower and each of the Lenders stating the circumstances falling within Clause 5.7 which have caused its notice to be given.
|
5.9
|
Suspension of drawdown.
If the Agent's notice under Clause 5.8 is served before an Advance is made:
|
(a)
|
in a case falling within Clauses 5.7(a) or (b), the Lenders' obligations to make the Advance;
|
(b)
|
in a case falling within Clause 5.7(c), the Affected Lender's obligation to participate in the Advance,
|
|
shall be suspended while the circumstances referred to in the Agent's notice continue.
|
5.10
|
Negotiation of alternative rate of interest.
If the Agent’s notice under Clause 5.8 is served after an Advance is made, the Borrower, the Agent and the Lenders or (as the case may be) the Affected Lender shall use reasonable endeavours to agree, within the 30 days after the date on which the Agent serves its notice under Clause 5.8 (the “
Negotiation Period
”), an alternative interest rate or (as the case may be) an alternative basis for the Lenders or (as the case may be) the Affected Lender to fund or continue to fund their or its Contribution during the Interest Period concerned.
|
5.11
|
Application of agreed alternative rate of interest.
Any alternative interest rate or an alternative basis which is agreed during the Negotiation Period shall take effect in accordance with the terms agreed.
|
5.12
|
Alternative rate of interest in absence of agreement.
If an alternative interest rate or alternative basis is not agreed within the Negotiation Period, and the relevant circumstances are continuing at the end of the Negotiation Period, then the Agent shall, with the agreement of each Lender or (as the case may be) the Affected Lender, set an interest period and interest rate representing the cost of funding of the Lenders or (as the case may be) the Affected Lender in Dollars or in any available currency of their or its Contribution plus the Margin plus the Mandatory Cost (if any) from whatever source(s) as each Lender or (as the case may be) the Affected Lender may reasonably select; and the procedure provided for by this Clause 5.12 shall be repeated if the relevant circumstances are continuing at the end of the interest period so set by the Agent.
|
5.13
|
Notice of prepayment.
If the Borrower does not agree with an interest rate set by the Agent under Clause 5.12, the Borrower may give the Agent not less than 5 Business Days' notice of its intention to prepay at the end of the interest period set by the Agent.
|
5.14
|
Prepayment; termination of Commitments.
A notice under Clause 5.13 shall be irrevocable; the Agent shall promptly notify the Lenders or (as the case may require) the Affected Lender of the Borrower's notice of intended prepayment; and:
|
(a)
|
on the date on which the Agent serves that notice, the Total Commitments or (as the case may require) the Commitment of the Affected Lender shall be cancelled (with such cancellation to be applied against the Acquisition Facility and the Working Capital Facility pro rata to their respective amounts); and
|
(b)
|
on the last Business Day of the interest period set by the Agent, the Borrower shall prepay (without premium or penalty) the Loan or, as the case may be, the Affected Lender's Contribution, together with accrued interest thereon at the applicable rate plus the Margin plus the Mandatory Cost (if any).
|
5.15
|
Application of prepayment.
The provisions of Clause 8 shall apply in relation to the prepayment.
|
6
|
INTEREST PERIODS
|
6.1
|
Commencement of Interest Periods.
The first Interest Period applicable to an Advance shall commence on the Drawdown Date of that Advance and each subsequent Interest Period shall commence on the expiry of the preceding Interest Period.
|
6.2
|
Duration of normal Interest Periods.
Subject to Clauses 6.3 and 6.4, each Interest Period shall be:
|
(a)
|
1, 3 or 6 months as notified by the Borrower to the Agent not later than 11.00 a.m. (London time) 3 Business Days before the commencement of the Interest Period;
|
(b)
|
in the case of the first Interest Period applicable to the second and any subsequent Advance under the Working Capital Facility, a period ending on the last day of the Interest Period applicable to the first Advance under the Working Capital Facility then current, whereupon all the Advances under the Working Capital Facility shall be consolidated and treated as a single Advance under the Working Capital Facility;
|
(c)
|
3 months, if the Borrower fails to notify the Agent by the time specified in paragraph (a); or
|
(d)
|
such other period as the Agent may, with the authorisation of all the Lenders, agree with the Borrower.
|
6.3
|
Duration of Interest Periods for repayment instalments.
In respect of an amount due to be repaid under Clause 8 on a particular Repayment Date, an Interest Period shall end on that Repayment Date.
|
6.4
|
Non-availability of matching deposits for Interest Period selected.
If, after the Borrower has selected and the Lenders have agreed an Interest Period longer than 6 months, any Lender notifies the Agent by 11.00 a.m. (London time) on the second Business Day before the commencement of the Interest Period that it is not satisfied that deposits in Dollars for a period equal to the Interest Period will be available to it in the London Interbank Market when the Interest Period commences, the Interest Period shall be of 6 months.
|
7
|
DEFAULT INTEREST
|
7.1
|
Payment of default interest on overdue amounts.
The Borrower shall pay interest in accordance with the following provisions of this Clause 7 on any amount payable by the Borrower under any Finance Document which the Agent, the Security Trustee or the other designated payee does not receive on or before the relevant date, that is:
|
(a)
|
the date on which the Finance Documents provide that such amount is due for payment; or
|
(b)
|
if a Finance Document provides that such amount is payable on demand, the date on which the demand is served; or
|
(c)
|
if such amount has become immediately due and payable under Clause 19.4, the date on which it became immediately due and payable.
|
7.2
|
Default rate of interest.
Interest shall accrue on an overdue amount from (and including) the relevant date until the date of actual payment (as well after as before judgment) at the rate per annum determined by the Agent to be 2 per cent. above:
|
(a)
|
in the case of an overdue amount of principal, the higher of the rates set out at Clauses 7.3(a) and (b); or
|
(b)
|
in the case of any other overdue amount, the rate set out at Clause 7.3(b).
|
7.3
|
Calculation of default rate of interest.
The rates referred to in Clause 7.2 are:
|
(a)
|
the rate applicable to the overdue principal amount immediately prior to the relevant date (but only for any unexpired part of any then current Interest Period);
|
(b)
|
the Margin plus the Mandatory Cost (if any) plus, in respect of successive periods of any duration (including at call) up to 3 months which the Agent may select from time to time:
|
(i)
|
LIBOR; or
|
(ii)
|
if the Agent (after consultation with the Reference Banks) determines that Dollar deposits for any such period are not being made available to any Reference Bank by leading banks in the London Interbank Market in the ordinary course of business, a rate from time to time determined by the Agent by reference to the cost of funds to the Reference Banks from such other sources as the Agent (after consultation with the Reference Banks) may from time to time determine.
|
7.4
|
Notification of interest periods and default rates.
The Agent shall promptly notify the Lenders and the Borrower of each interest rate determined by the Agent under Clause 7.3 and of each period selected by the Agent for the purposes of paragraph (b) of that Clause; but this shall not be taken to imply that the Borrower is liable to pay such interest only with effect from the date of the Agent's notification.
|
7.5
|
Payment of accrued default interest.
Subject to the other provisions of this Agreement, any interest due under this Clause shall be paid on the last day of the period by reference to which it was determined; and the payment shall be made to the Agent for the account of the Creditor Party to which the overdue amount is due.
|
7.6
|
Compounding of default interest.
Any such interest which is not paid at the end of the period by reference to which it was determined shall thereupon be compounded.
|
8
|
REPAYMENT, PREPAYMENT AND CONVERSION TO TERM LOAN FACILITY
|
8.1
|
Repayment and conversion to Term Loan Facility.
|
(a)
|
Subject to Clause 8.1(c), the Borrower shall repay each Advance under the Acquisition Facility in full on the date falling 12 months after the Drawdown Date of that Advance or, if earlier, the Maturity Date.
|
(b)
|
The Borrower shall repay each Advance under the Working Capital Facility in full on the Maturity Date.
|
(c)
|
The Borrower shall have the option, by giving at least 10 Business Days’ written notice to the Agent, to convert any Advance under the Acquisition Facility into an Advance under the Term Loan Facility. Such conversion shall take place on the expiry of the 10 Business Day’s notice period (the “
Conversion Date
”).
|
8.2
|
Maturity Date.
On the Maturity Date, the Borrower shall additionally pay to the Agent for the account of the Creditor Parties all sums then accrued or owing under this Loan Agreement or any other Finance Document.
|
8.3
|
Voluntary prepayment.
Subject to the following conditions, the Borrower may prepay the whole or any part of any Advance.
|
8.4
|
Conditions for voluntary prepayment.
The conditions referred to in Clause 8.3 are that:
|
(a)
|
a partial prepayment shall be $1,000,000 or an integral multiple of $1,000,000;
|
(b)
|
the Agent has received from the Borrower at least 10 days’ prior written notice specifying the amount to be prepaid and the date on which the prepayment is to be made; and
|
(c)
|
the Borrower has provided evidence satisfactory to the Agent that any consent required by the Borrower or any Security Party in connection with the prepayment has been obtained and remains in force, and that any requirement relevant to this Agreement which affects the Borrower or any Security Party has been complied with.
|
8.5
|
Effect of notice of prepayment.
A prepayment notice may not be withdrawn or amended without the consent of the Agent, given with the authorisation of the Majority Lenders, and the amount specified in the prepayment notice shall become due and payable by the Borrower on the date for prepayment specified in the prepayment notice.
|
8.6
|
Notification of notice of prepayment.
The Agent shall notify the Lenders promptly upon receiving a prepayment notice, and shall provide any Lender which so requests with a copy of any document delivered by the Borrower under Clause 8.4(c).
|
8.7
|
Mandatory prepayment.
Without prejudice to Clause 15, the Borrower shall be obliged to prepay the Loan by an amount at least equal to the Required Prepayment Amount (as defined below):
|
(a)
|
if a Ship is sold, on or before the date on which the sale is completed by delivery of that Ship to the buyer; or
|
(b)
|
if a Ship becomes a Total Loss, on the earlier of the date falling 120 days after the Total Loss Date and the date of receipt by the Security Trustee of the proceeds of insurance relating to such Total Loss,
|
|
(i)
|
an amount equal to the Loan multiplied by a fraction where the numerator is the market value (determined as provided in Clause 15.3 on the basis of valuations provided to the Agent which are no older than 60 days before the date of prepayment) of the Ship which is the subject of sale or Total Loss and the denominator is the aggregate market value (determined as provided in Clause 15.3 on the basis of valuations provided to the Agent which are no older than 60 days before the date of prepayment) of all of the Ships then subject to a Mortgage immediately before such sale or Total Loss (
Provided that
no Ship then subject to a Mortgage will be included in the calculation set out in this Clause unless the Agent has first received for that Ship all of the documents and evidence described in Part B of Schedule 3, each in form and substance satisfactory to the Agent and its lawyers); or
|
|
(ii)
|
such amount required to ensure that following the prepayment required by this Clause 8.7 the Loan does not exceed 40 per cent. of the aggregate market value (determined as provided in Clause 15.3 on the basis of valuations provided to the Agent which are no older than 60 days before the date of prepayment) of all of the Ships then subject to a Mortgage (excluding, for the avoidance of doubt, the Ship which is the subject of sale or Total Loss) (
Provided that
no Ship then subject to a Mortgage will be included in the calculation set out in this Clause unless the Agent has first received for that Ship all of the documents and evidence described in Part B of Schedule 3, each in form and substance satisfactory to the Agent and its lawyers).
|
8.8
|
Amounts payable on prepayment.
A prepayment shall be made together with accrued interest (and any other amount payable under Clause 21 or otherwise) in respect of the amount prepaid and, if the prepayment is not made on the last day of an Interest Period together with any sums payable under Clause 21.1(b) but without premium or penalty.
|
8.9
|
Reborrowing
. Subject to the other provisions of this Agreement, any amount prepaid which is applied against the Loan may be reborrowed prior to the expiry of the Availability Period.
|
8.10
|
Voluntary cancellation.
Subject to the following conditions, the Borrower may cancel the whole or any part of the Total Commitments.
|
8.11
|
Conditions for cancellation of Commitment.
The conditions referred to in Clause 8.10 are that:
|
(a)
|
a partial cancellation shall be an $1,000,000 or an integral multiple of $1,000,000;
|
(b)
|
the Agent has received from the Borrower at least 3 Business Days’ prior written notice specifying the amount of the Total Commitments to be cancelled and the date on which the cancellation is to take effect; and
|
(c)
|
the Total Commitments following the cancellation shall not be less than the Loan.
|
8.12
|
Effect of notice of cancellation.
The service of a cancellation notice given under Clause 8.11 shall cause the amount of the Total Commitments specified in the notice to be permanently cancelled; and such cancellation of the Total Commitments shall be applied against (i) the Commitments of the Lenders pro rata to their respective amounts and (ii) the Acquisition Facility and the Working Capital Facility pro rata to their respective amounts.
|
9
|
CONDITIONS PRECEDENT
|
9.1
|
Documents, fees and no default.
Each Lender's obligation to contribute to an Advance is subject to the following conditions precedent:
|
(a)
|
that, on or before the service of the first Drawdown Notice, the Agent receives the documents and evidence described in Part A of Schedule 3 and Part B of Schedule 3 in relation to each of the Initial Ships, each in form and substance satisfactory to the Agent and its lawyers;
|
(b)
|
that, on or before the Drawdown Date for any Advance under the Acquisition Facility but prior to the making of that Advance, the Agent receives (or is satisfied that it will receive immediately following the making of that Advance) the documents and evidence described in Part B of Schedule 3 in relation to the Acquired Ship to which that Advance relates, each in form and substance satisfactory to the Agent and its lawyers;
|
(c)
|
that, on or before the service of the first Drawdown Notice, the Agent has received all of the fees required to be paid under Clause 20.1 and the Fee Letter(s) and the Agent has received payment of the expenses referred to in Clause 20.2;
|
(d)
|
that both at the date of each Drawdown Notice and at each Drawdown Date:
|
(i)
|
no Event of Default or Potential Event of Default has occurred and is continuing or would result from the borrowing of the Advance;
|
(ii)
|
the representations and warranties in Clause 10.1 and those of the Borrower or any Security Party which are set out in the other Finance Documents would be
|
|
true and not misleading if repeated on each of those dates with reference to the circumstances then existing (both before and after the making of the Advance); and
|
(iii)
|
none of the circumstances contemplated by Clause 5.7 has occurred and is continuing;
|
(e)
|
that, if the ratio set out in Clause 15.1 were applied immediately following the making of the Advance, the Borrower would not be obliged to provide additional security or prepay part of the Loan under that Clause; and
|
(f)
|
that the Agent has received, and found to be acceptable to it, any further opinions, consents, agreements and documents in connection with the Finance Documents which the Agent may, with the reasonable authorisation of the Majority Lenders, request by notice to the Borrower prior to the Drawdown Date.
|
9.2
|
Waiver of conditions precedent.
If the Majority Lenders, at their discretion, permit an Advance to be borrowed before certain of the conditions referred to in Clause 9.1 are satisfied, the Borrower shall ensure that those conditions are satisfied within 10 Business Days after the Drawdown Date (or such longer period as the Agent may, with the authorisation of the Majority Lenders, specify).
|
10
|
REPRESENTATIONS AND WARRANTIES
|
10.1
|
General.
The Borrower represents and warrants to each Creditor Party as follows.
|
10.2
|
Status.
The Borrower is duly incorporated and validly existing and in good standing under the laws of the Marshall Islands.
|
10.3
|
Share capital and ownership.
On the date of this Agreement, the Borrower has an authorised share capital of 1,200,000,000 consisting of (x) 1,000,000,000 registered shares of common stock of par value $0.0001 each, (y) 100,000,000 registered shares of Class B stock of par value $0.0001 each and (z) 100,000,000 registered shares of preferred stock of par value $0.0001 each; and on the date of this Agreement, the Borrower has issued 13,500,000 shares of common stock and 2,105,263 shares of Class B Stock, all of which shares are fully paid and non-assessable.
|
10.4
|
Corporate power.
The Borrower has the corporate capacity, and has taken all corporate action and obtained all consents necessary for it:
|
(a)
|
to execute the Finance Documents to which the Borrower is a party; and
|
(b)
|
to borrow under this Agreement and to make all the payments contemplated by, and to comply with, those Finance Documents.
|
10.5
|
Consents in force.
All the consents referred to in Clause 10.4 remain in force and nothing has occurred which makes any of them liable to revocation.
|
10.6
|
Legal validity; effective Security Interests.
The Finance Documents to which the Borrower is a party, do now or, as the case may be, will, upon execution and delivery (and, where applicable, registration as provided for in the Finance Documents):
|
(a)
|
constitute the Borrower's legal, valid and binding obligations enforceable against the Borrower in accordance with their respective terms; and
|
(b)
|
create legal, valid and binding Security Interests enforceable in accordance with their respective terms over all the assets to which they, by their terms, relate,
|
10.7
|
No third party Security Interests.
Without limiting the generality of Clause 10.6, at the time of the execution and delivery of each Finance Document:
|
(a)
|
the Borrower will have the right to create all the Security Interests which that Finance Document purports to create; and
|
(b)
|
no third party will have any Security Interest (except for Permitted Security Interests) or any other interest, right or claim over, in or in relation to any asset to which any such Security Interest, by its terms, relates.
|
10.8
|
No conflicts.
The execution by the Borrower and each Security Party of each Finance Document to which it is a party, and the borrowing by the Borrower of the Loan, and its compliance with each Finance Document to which it is a party will not involve or lead to a contravention of:
|
(a)
|
any law or regulation; or
|
(b)
|
its constitutional documents; or
|
(c)
|
any contractual or other obligation or restriction which is binding on it or any of its assets.
|
10.9
|
No withholding taxes.
All payments which the Borrower is liable to make under the Finance Documents may be made without deduction or withholding for or on account of any tax payable under any law of any Pertinent Jurisdiction.
|
10.10
|
No default.
No Event of Default or Potential Event of Default has occurred.
|
10.11
|
Information.
All information which has been provided in writing by or on behalf of the Borrower or any Security Party to any Creditor Party in connection with any Finance Document satisfied the requirements of Clause 11.3; all audited and unaudited accounts which have been so provided satisfied the requirements of Clause 11.5; and there has been no material adverse change in the financial position or state of affairs of the Borrower from that disclosed in the latest of those accounts.
|
10.12
|
No litigation.
No legal or administrative action involving the Borrower or any Security Party (including action relating to any Finance Document (or any document executed in connection with any Finance Document) or any alleged or actual breach of the ISM Code or the ISPS Code) has been commenced or taken or, to the Borrower's knowledge, is likely to be commenced or taken which, in either case, has or would reasonably be likely to have a Material Adverse Effect.
|
10.13
|
Validity and completeness of Purchase Contracts.
Each Purchase Contract constitutes valid, binding and enforceable obligations of the parties to that Purchase Contract respectively in accordance with the terms of that Purchase Contract; and
|
(a)
|
the copy of each Purchase Contract delivered to the Agent before the date of this Agreement is a true and complete copy; and
|
(b)
|
no amendments or additions to any Purchase Contract have been agreed nor has any party to a Purchase Contract waived any of its rights under that Purchase Contract.
|
10.14
|
No rebates etc.
There is no agreement or understanding to allow or pay any rebate, premium, commission, discount or other benefit or payment (howsoever described) to the Borrower or any Security Party in connection with the purchase by any Guarantor of any
|
|
Acquired Ship, other than as disclosed to the Lenders in writing on or prior to the Drawdown Date of the Advance relating to that Acquired Ship.
|
10.15
|
Compliance with certain undertakings.
At the date of this Agreement, the Borrower is in compliance with Clauses 11.7 and 11.10.
|
10.16
|
Taxes paid.
The Borrower and each Security Party has paid all taxes applicable to, or imposed on or in relation to that party, the business of that party or any Ship owned by that party.
|
10.17
|
ISM Code and ISPS Code compliance.
All requirements of the ISM Code and the ISPS Code as they relate to any Guarantor, any Approved Manager and any Ship have been complied with.
|
10.18
|
No money laundering.
Without prejudice to the generality of Clause 2.3, in relation to the borrowing by the Borrower of each Advance, the performance and discharge of its obligations and liabilities under the Finance Documents, and the transactions and other arrangements effected or contemplated by the Finance Documents to which it is a party, the Borrower confirms that it is acting for its own account and that the foregoing will not involve or lead to contravention of any law, official requirement or other regulatory measure or procedure implemented to combat “money laundering” (as defined in Article 1, Section 2 of the Directive (2005/60/EEC) of the Council of the European Communities).
|
11
|
GENERAL UNDERTAKINGS
|
11.1
|
General.
The Borrower undertakes with each Creditor Party to comply with the following provisions of this Clause 11 at all times during the Security Period except as the Agent may, with the authorisation of the Majority Lenders, otherwise permit.
|
11.2
|
No disposal of assets.
Save pursuant to a transaction on commercial arms’ length terms for full consideration, the Borrower will not transfer, lease or otherwise dispose of:
|
(a)
|
all or a substantial part of its assets, whether by one transaction or a number of transactions, whether related or not; or
|
(b)
|
any debt payable to it or any other right (present, future or contingent right) to receive a payment, including any right to damages or compensation.
|
11.3
|
Information provided to be accurate.
All financial and other information which is provided in writing by or on behalf of the Borrower under or in connection with any Finance Document will be true and not misleading and will not omit any material fact or consideration.
|
11.4
|
Provision of financial statements etc.
The Borrower will send to the Agent:
|
(a)
|
as soon as possible, but in no event later than 150 days after the end of each financial year of the Borrower, the audited consolidated accounts of the Borrower and its subsidiaries and audited individual accounts of the Borrower;
|
(b)
|
as soon as possible, but in no event later than 60 days after the end of each quarter in each financial year of the Borrower, unaudited consolidated accounts (including an income statement and a balance sheet) of the Borrower and its subsidiaries and unaudited individual accounts (including an income statement and a balance sheet) of the Borrower, each certified as to their correctness by the president of the Borrower;
|
(c)
|
together with each set of accounts provided under sub-Clause (a) or (b), a duly completed certificate in the form set out in Schedule 5 (or such other format approved by the Agent) signed by the president of the Borrower, confirming compliance with the financial covenants set out in Clause 11.16 for the 12 months ending as at the date to which such accounts are prepared and supported by calculations referring to those accounts (audited or, as the case may be, unaudited) and setting out in detail (as reasonably required by the Agent) the materials underlying the statements made in such compliance certificate; and
|
(d)
|
together with each set of accounts provided under sub-Clause (b) at the end of the second or fourth quarter in each financial year of the Borrower, valuations showing the market value (determined as provided in Clause 15.3) of each Ship and with each valuation no older than 30 days prior to the date of delivery to the Agent.
|
11.5
|
Form of financial statements.
All accounts (audited and unaudited) delivered under Clause 11.4 will:
|
(a)
|
be prepared in accordance with all applicable laws and GAAP consistently applied;
|
(b)
|
give a true and fair view of the state of affairs of the Borrower and its subsidiaries at the date of those accounts and of their profit for the period to which those accounts relate; and
|
(c)
|
fully disclose or provide for all significant liabilities of the Borrower and its subsidiaries.
|
11.6
|
Shareholder, creditor and other notices.
The Borrower will send the Agent, at the same time as they are despatched:
|
(a)
|
copies of all communications (which either the Borrower is legally obliged to send or which are otherwise material) which are despatched to the Borrower's shareholders or creditors or any class of them; and
|
(b)
|
a copy of any filing made by the Borrower with, or any report or other document forwarded by the Borrower to, the New York Stock Exchange.
|
11.7
|
Consents and compliance with laws.
|
(a)
|
The Borrower will maintain in force and promptly obtain or renew, and will promptly send certified copies to the Agent of, all consents required:
|
(i)
|
for the Borrower to perform its obligations under any Finance Document; and
|
(ii)
|
for the validity or enforceability of any Finance Document,
|
(b)
|
Without prejudice to the other obligations under the Finance Documents, the Borrower shall comply in all respects with all laws and regulations to which it may be subject.
|
11.8
|
Maintenance of Security Interests.
The Borrower will:
|
(a)
|
at its own cost, do all that it reasonably can to ensure that any Finance Document validly creates the obligations and the Security Interests which it purports to create; and
|
(b)
|
without limiting the generality of paragraph (a), at its own cost, promptly register, file, record or enrol any Finance Document with any court or authority in all Pertinent Jurisdictions, pay any stamp, registration or similar tax in all Pertinent Jurisdictions in respect of any Finance Document, give any notice or take any other step which, in the
|
|
opinion of the Majority Lenders, is or has become necessary or desirable for any Finance Document to be valid, enforceable or admissible in evidence or to ensure or protect the priority of any Security Interest which it creates.
|
11.9
|
Notification of litigation.
The Borrower will provide the Agent with details of any legal or administrative action involving the Borrower, any Security Party or any Ship, the Earnings of any Ship or the Insurances of any Ship as soon as such action is instituted or it becomes apparent to the Borrower or any Security Party that it is likely to be instituted, unless it is clear that the legal or administrative action cannot be considered material in the context of any Finance Document.
|
11.10
|
Principal place of business.
The Borrower will not establish, or do anything as a result of which it would be deemed to have, a place of business in the USA or the UK. The Borrower will, as soon as reasonably practicable after such change, notify the Agent of any change in its place(s) of business.
|
11.11
|
Confirmation of no default.
The Borrower will, within 5 Business Days after service by the Agent of a written request, serve on the Agent a notice which is signed by 2 directors of the Borrower and which:
|
(a)
|
states that no Event of Default or Potential Event of Default has occurred which is continuing; or
|
(b)
|
states that no Event of Default or Potential Event of Default has occurred which is continuing, except for a specified event or matter, of which all material details are given.
|
11.12
|
Notification of default.
The Borrower will notify the Agent as soon as the Borrower becomes aware of:
|
(a)
|
the occurrence of an Event of Default or a Potential Event of Default; or
|
(b)
|
any matter which indicates that an Event of Default or a Potential Event of Default may have occurred;
|
11.13
|
Provision of further information.
The Borrower will, as soon as practicable after receiving the request, provide the Agent with any additional financial or other information relating:
|
(a)
|
to the Borrower, any Ship, the Earnings of any Ship or the Insurances of any Ship; or
|
(b)
|
to any other matter relevant to, or to any provision of, a Finance Document,
|
11.14
|
Provision of copies and translation of documents.
The Borrower will supply the Agent with a sufficient number of copies of the documents referred to above to provide 1 copy for each Creditor Party; and if the Agent so requires in respect of any of those documents, the Borrower will provide a certified English translation prepared by a translator approved by the Agent.
|
11.15
|
“Know your customer” checks.
If:
|
(a)
|
the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement;
|
(b)
|
any change in the status of the Borrower or any Security Party after the date of this Agreement; or
|
(c)
|
a proposed assignment or transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer,
|
11.16
|
Financial covenants.
The Borrower shall ensure that at all times during the Security Period:
|
(a)
|
commencing on and from 30 June 2010, the ratio of EBITDA to Net Interest Expense shall be no less than 3.0:1.0;
|
(b)
|
the aggregate of Cash and Cash Equivalents shall be equal to or greater than an amount equal to $1,000,000 multiplied by the number of Ships subject to a Mortgage; and
|
(c)
|
the ratio of Stockholders Equity to Total Assets shall be no less than 30:100.
|
|
(a)
|
certificates of deposit of, or time deposits or overnight bank deposits with, any Lender or any commercial bank whose short-term securities are rated at least A-2 by Standard and Poor's Rating Group and P-3 by Moody's Investor Services, Inc. having maturities of 12 months or less from the date of acquisition;
|
|
(b)
|
commercial paper of, or money market accounts or funds with or issued by, any Lender or by an issuer rated at least A-2 by Standard & Poor's Ratings Group and
|
|
|
P-3 by Moody's Investor Services, Inc. and having an original tenor of 12 months or less; and
|
|
(c)
|
medium term fixed or floating rate notes of any Lender or an issuer rated at least AA- by Standard & Poor's Rating Group and/or Aa3 by Moody's Investor Services, Inc. at the time of acquisition and having a remaining term of 12 months or less from the date of acquisition,
|
12
|
CORPORATE UNDERTAKINGS
|
12.1
|
General.
The Borrower also undertakes with each Creditor Party to comply with the following provisions of this Clause 12 at all times during the Security Period except as the Agent may, with the authorisation of the Majority Lenders, otherwise permit.
|
12.2
|
Maintenance of status.
The Borrower will maintain its separate corporate existence and remain in good standing under the laws of the Marshall Islands.
|
12.3
|
Negative undertakings.
The Borrower will not:
|
(a)
|
carry on any business not authorised by the Borrower’s constitutional documents; or
|
(b)
|
pay any dividend or make any other form of distribution or effect any form of redemption, purchase or return of share capital save that a dividend may be paid if, both at the time the Borrower declares the dividend and also at the time the Borrower is to pay
|
|
the dividend, no Event of Default has occurred and is continuing or will occur as a result of the declaration or (as the case may be) payment of such dividend; or
|
(c)
|
provide any form of credit or financial assistance to:
|
(i)
|
a person who is directly or indirectly interested in the Borrower's share or loan capital; or
|
(ii)
|
any company in or with which such a person is directly or indirectly interested or connected,
|
(d)
|
open or maintain any account for the purpose of (or relating to) a Guarantor and/or a Ship with any bank or financial institution except accounts with the Agent and the Security Trustee for the purposes of the Finance Documents and then only
Provided that
each such account is subject to an Account Security Deed;
|
(e)
|
acquire any shares or other securities other than US or UK Treasury bills and certificates of deposit issued by major North American or European banks;
|
(f)
|
enter into any form of amalgamation, merger or de-merger or any form of reconstruction or reorganisation; or
|
(g)
|
change its name (without having first given prior notice to the Agent) or its fiscal year end date.
|
13
|
INSURANCE
|
13.1
|
General.
The Borrower also undertakes with each Creditor Party to procure that each Guarantor will comply with the following provisions of this Clause 13 at all times during the Security Period (in the case of an Acquired Ship, after that Acquired Ship has been delivered to the relevant Guarantor under the Purchase Contract for that Acquired Ship) except as the Agent may, with the authorisation of the Majority Lenders, otherwise permit.
|
13.2
|
Maintenance of obligatory insurances.
Each Guarantor shall keep each Ship owned by it insured at the expense of that Guarantor against:
|
(a)
|
fire and usual marine risks (including hull and machinery, excess risks, hull interest and (depending on the level of the hull and machinery policies) freight interest);
|
(b)
|
war risks;
|
(c)
|
protection and indemnity risks; and
|
(d)
|
any other risks against which the Security Trustee considers, having regard to practices and other circumstances prevailing at the relevant time, it would in the opinion of the Security Trustee be reasonable for that Guarantor to insure and which are specified by the Security Trustee by notice to that Guarantor.
|
13.3
|
Terms of obligatory insurances.
Each Guarantor shall effect such insurances in relation to each Ship owned by it:
|
(a)
|
in Dollars;
|
(b)
|
in the case of fire and usual marine risks (including hull interest and freight interest) and war risks, in an amount on an agreed value basis at least the greater of (i) together with the other Ships, 120 per cent. of the Loan and (ii) the market value of that Ship;
|
(c)
|
in the case of fire and usual marine risks (excluding hull interest and freight interest), in an amount on an agreed value basis at least the greater of (i) together with the other Ships, 100 per cent. of the Loan and (ii) 80 per cent. of the market value of that Ship;
|
(d)
|
in the case of oil pollution liability risks, for an aggregate amount equal to the highest level of cover from time to time available under basic protection and indemnity club entry and in the international marine insurance market;
|
(e)
|
in relation to protection and indemnity risks in respect of that Ship's full tonnage;
|
(f)
|
on approved terms; and
|
(g)
|
through approved brokers and with approved insurance companies and/or underwriters or, in the case of war risks and protection and indemnity risks, in approved war risks and protection and indemnity risks associations.
|
13.4
|
Further protections for the Creditor Parties.
In addition to the terms set out in Clause 13.3, each Guarantor shall procure that the obligatory insurances in relation to each Ship owned by that Guarantor shall:
|
(a)
|
subject always to paragraph (b), name that Guarantor as the sole named assured unless the interest of every other named assured is limited:
|
(i)
|
in respect of any obligatory insurances for hull and machinery and war risks;
|
(A)
|
to any provable out-of-pocket expenses that that other named assured has incurred and which form part of any recoverable claim on underwriters; and
|
(B)
|
to any third party liability claims where cover for such claims is provided by the policy (and then only in respect of discharge of any claims made against it); and
|
(ii)
|
in respect of any obligatory insurances for protection and indemnity risks, to any recoveries that that other named assured is entitled to make by way of reimbursement following discharge of any third party liability claims made specifically against that other named assured;
|
(b)
|
whenever the Security Trustee requires, name (or be amended to name) the Security Trustee as additional named assured for its rights and interests, warranted no operational interest and with full waiver of rights of subrogation against the Security Trustee, but without the Security Trustee thereby being liable to pay (but having the right to pay) premiums, calls or other assessments in respect of such insurance;
|
(c)
|
name the Security Trustee as loss payee with such directions for payment as the Security Trustee may specify;
|
(d)
|
provide that all payments by or on behalf of the insurers under the obligatory insurances to the Security Trustee shall be made without set-off, counterclaim or deductions or condition whatsoever;
|
(e)
|
provide that such obligatory insurances shall be primary without right of contribution from other insurances which may be carried by the Security Trustee or any other Creditor Party; and
|
(f)
|
provide that the Security Trustee may make proof of loss if that Guarantor fails to do so.
|
13.5
|
Renewal of obligatory insurances.
Each Guarantor shall in relation to each Ship owned by it:
|
(a)
|
at least 21 days before the expiry of any obligatory insurance:
|
(i)
|
notify the Security Trustee of the brokers (or other insurers) and any protection and indemnity or war risks association through or with whom that Guarantor proposes to renew that obligatory insurance and of the proposed terms of renewal; and
|
(ii)
|
obtain the Security Trustee's approval to the matters referred to in paragraph (i);
|
(b)
|
at least 14 days before the expiry of any obligatory insurance, renew that obligatory insurance in accordance with the Security Trustee's approval pursuant to paragraph (a); and
|
(c)
|
procure that the approved brokers and/or the war risks and protection and indemnity associations with which such a renewal is effected shall promptly after the renewal notify the Security Trustee in writing of the terms and conditions of the renewal.
|
13.6
|
Copies of policies; letters of undertaking.
Each Guarantor shall in relation to each Ship owned by it ensure that all approved brokers provide the Security Trustee with pro forma copies of all policies relating to the obligatory insurances which they are to effect or renew and of a letter or letters or undertaking in a form required by the Security Trustee and including undertakings by the approved brokers that:
|
(a)
|
they will have endorsed on each policy, immediately upon issue, a loss payable clause and a notice of assignment complying with the provisions of Clause 13.4;
|
(b)
|
they will hold such policies, and the benefit of such insurances, to the order of the Security Trustee in accordance with the said loss payable clause;
|
(c)
|
they will advise the Security Trustee immediately of any material change to the terms of the obligatory insurances;
|
(d)
|
they will notify the Security Trustee, not less than 14 days before the expiry of the obligatory insurances, in the event of their not having received notice of renewal instructions from that Guarantor or its agents and, in the event of their receiving instructions to renew, they will promptly notify the Security Trustee of the terms of the instructions; and
|
(e)
|
they will not set off against any sum recoverable in respect of a claim relating to that Ship under such obligatory insurances any premiums or other amounts due to them or any other person whether in respect of that Ship or otherwise, they waive any lien on the
|
|
policies, or any sums received under them, which they might have in respect of such premiums or other amounts, and they will not cancel such obligatory insurances by reason of non-payment of such premiums or other amounts, and will arrange for a separate policy to be issued in respect of that Ship forthwith upon being so requested by the Security Trustee.
|
13.7
|
Copies of certificates of entry.
Each Guarantor shall in relation to each Ship owned by it ensure that any protection and indemnity and/or war risks associations in which that Ship is entered provides the Security Trustee with:
|
(a)
|
a certified copy of the certificate of entry for that Ship;
|
(b)
|
a letter or letters of undertaking in such form as may be required by the Security Trustee; and
|
(c)
|
a certified copy of each certificate of financial responsibility for pollution by oil or other Environmentally Sensitive Material issued by the relevant certifying authority in relation to that Ship.
|
13.8
|
Deposit of original policies.
Each Guarantor shall in relation to each Ship owned by it ensure that all policies relating to obligatory insurances are deposited with the approved brokers through which the insurances are effected or renewed.
|
13.9
|
Payment of premiums.
Each Guarantor shall in relation to each Ship owned by it punctually pay all premiums or other sums payable in respect of the obligatory insurances and produce all relevant receipts when so required by the Security Trustee.
|
13.10
|
Guarantees.
Each Guarantor shall in relation to each Ship owned by it ensure that any guarantees required by a protection and indemnity or war risks association are promptly issued and remain in full force and effect.
|
13.11
|
Compliance with terms of insurances.
Each Guarantor shall in relation to each Ship owned by it neither do nor omit to do (nor permit to be done or not to be done) any act or thing which would or might render any obligatory insurance invalid, void, voidable or unenforceable or render any sum payable under an obligatory insurance repayable in whole or in part; and, in particular:
|
(a)
|
that Guarantor shall take all necessary action and comply with all requirements which may from time to time be applicable to the obligatory insurances, and (without limiting the obligation contained in Clause 13.6(c)) ensure that the obligatory insurances are not made subject to any exclusions or qualifications to which the Security Trustee has not given its prior approval;
|
(b)
|
that Guarantor shall not make any changes relating to the classification or classification society or manager or operator of that Ship approved by the underwriters of the obligatory insurances;
|
(c)
|
that Guarantor shall make (and promptly supply copies to the Agent of) all quarterly or other voyage declarations which may be required by the protection and indemnity risks association in which that Ship is entered to maintain cover for trading to the United States of America and Exclusive Economic Zone (as defined in the United States Oil Pollution Act 1990 or any other applicable legislation); and
|
(d)
|
that Guarantor shall not employ that Ship, nor allow it to be employed, otherwise than in conformity with the terms and conditions of the obligatory insurances, without first obtaining the consent of the insurers and complying with any requirements (as to extra premium or otherwise) which the insurers specify.
|
13.12
|
Alteration to terms of insurances.
Each Guarantor shall in relation to each Ship owned by it neither make or agree to any alteration to the terms of any obligatory insurance nor waive any right relating to any obligatory insurance.
|
13.13
|
Settlement of claims.
Each Guarantor shall in relation to each Ship owned by it not settle, compromise or abandon any claim under any obligatory insurance for Total Loss or for a Major Casualty, and shall do all things necessary and provide all documents, evidence and information to enable the Security Trustee to collect or recover any moneys which at any time become payable in respect of the obligatory insurances.
|
13.14
|
Provision of copies of communications.
Each Guarantor shall in relation to each Ship owned by it provide the Security Trustee, at the time of each such communication, copies of all material written communications between that Guarantor and:
|
(a)
|
the approved brokers; and
|
(b)
|
the approved protection and indemnity and/or war risks associations; and
|
(c)
|
the approved insurance companies and/or underwriters, which relate directly or indirectly to:
|
(i)
|
that Guarantor’s obligations relating to the obligatory insurances including, without limitation, all requisite declarations and payments of additional premiums or calls; and
|
(ii)
|
any credit arrangements made between that Guarantor and any of the persons referred to in paragraphs (a) or (b) relating wholly or partly to the effecting or maintenance of the obligatory insurances.
|
13.15
|
Provision of information.
In addition, each Guarantor shall in relation to each Ship owned by it promptly provide the Security Trustee (or any persons which it may designate) with any information which the Security Trustee (or any such designated person) requests for the purpose of:
|
(a)
|
obtaining or preparing any report from an independent marine insurance broker as to the adequacy of the obligatory insurances effected or proposed to be effected; and/or
|
(b)
|
effecting, maintaining or renewing any such insurances as are referred to in Clause 13.16 or dealing with or considering any matters relating to any such insurances,
|
|
and the Borrower shall, forthwith upon demand, indemnify the Security Trustee in respect of all fees and other expenses incurred by or for the account of the Security Trustee in connection with any such report as is referred to in paragraph (a).
|
13.16
|
Mortgagee's interest and additional perils.
The Security Trustee shall be entitled from time to time to effect, maintain and renew a mortgagee’s interest additional perils insurance and a mortgagee’s interest marine insurance in such amounts, on such terms, through such insurers and generally in such manner as the Security Trustee may from time to time consider appropriate and the Borrower shall upon demand fully indemnify the Security Trustee in respect of all premiums and other expenses which are incurred in connection with or with a view to effecting, maintaining or renewing any such insurance or dealing with, or considering, any matter arising out of any such insurance.
|
14
|
SHIP COVENANTS
|
14.1
|
General.
The Borrower also undertakes with each Creditor Party to procure that each Guarantor will comply with the following provisions of this Clause 14 at all times during
|
|
the Security Period (in the case of an Acquired Ship, after that Acquired Ship has been delivered to the relevant Guarantor under the Purchase Contract for that Acquired Ship) except as the Agent, with the authorisation of the Majority Lenders (such authorisation not to be unreasonably withheld or delayed in the case of Clauses 14.12(a), 14.12(b), 14.12(c) or 14.12(f)), may otherwise permit.
|
14.2
|
Ship's name and registration.
Each Guarantor shall in relation to each Ship owned by it keep that Ship registered in its name under the flag of that Ship; shall not do nor omit to do nor allow to be done anything as a result of which such registration might be cancelled or imperilled; and shall not change the name or port of registry of that Ship.
|
14.3
|
Repair and classification.
Each Guarantor shall in relation to each Ship owned by it keep that Ship in a good and safe condition and state of repair:
|
(a)
|
consistent with first-class ship ownership and management practice;
|
(b)
|
so as to maintain that Ship's class (as approved by the Majority Lenders) with a class society (as approved by the Majority Lenders) free of overdue recommendations and conditions affecting that Ship’s class; and
|
(c)
|
so as to comply with all laws and regulations applicable to vessels registered under the flag of that Ship or to vessels trading to any jurisdiction to which that Ship may trade from time to time, including but not limited to the ISM Code or the ISPS Code.
|
14.4
|
Modification.
Each Guarantor shall in relation to each Ship owned by it not make any modification or repairs to, or replacement of, that Ship or equipment installed on it which would or might materially alter the structure, type or performance characteristics of that Ship or materially reduce its value.
|
14.5
|
Removal of parts.
Each Guarantor shall in relation to each Ship owned by it not remove any material part of that Ship, or any item of equipment installed on, that Ship unless the part or item so removed is forthwith replaced by a suitable part or item which is in the same condition as or better condition than the part or item removed, is free from any Security Interest or any right in favour of any person other than the Security Trustee and becomes on installation on that Ship the property of that Guarantor and subject to the security constituted by the Mortgage of that Ship
Provided that
that Guarantor may install equipment owned by a third party if the equipment can be removed without any risk of damage to that Ship.
|
14.6
|
Surveys.
Each Guarantor shall in relation to each Ship owned by it submit that Ship regularly to all periodical or other surveys which may be required for classification purposes and, if so required by the Security Trustee provide the Security Trustee, with copies of all survey reports.
|
14.7
|
Inspection.
Each Guarantor shall in relation to each Ship owned by it permit the Security Trustee (by surveyors or other persons appointed by it for that purpose) to board that Ship at all reasonable times to inspect its condition or to satisfy themselves about proposed or executed repairs and shall afford all proper facilities for such inspections.
|
14.8
|
Prevention of and release from arrest.
Each Guarantor shall in relation to each Ship owned by it promptly discharge:
|
(a)
|
all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against that Ship, that Ship’s Earnings or that Ship’s Insurances;
|
(b)
|
all taxes, dues and other amounts charged in respect of that Ship, that Ship’s Earnings or that Ship’s Insurances; and
|
(c)
|
all other outgoings whatsoever in respect of that Ship, that Ship’s Earnings or that Ship’s Insurances,
|
|
and, forthwith upon receiving notice of the arrest of that Ship, or of its detention in exercise or purported exercise of any lien or claim, that Guarantor shall procure its release by providing bail or otherwise as the circumstances may require.
|
14.9
|
Compliance with laws etc.
Each Guarantor shall in relation to each Ship owned by it:
|
(a)
|
comply, or procure compliance with the ISM Code, the ISPS Code, all Environmental Laws and all other laws or regulations relating to that Ship, its ownership, operation and management or to the business of that Guarantor;
|
(b)
|
not employ that Ship nor allow its employment in any manner contrary to any law or regulation in any relevant jurisdiction including but not limited to the ISM Code and the ISPS Code; and
|
(c)
|
in the event of hostilities in any part of the world (whether war is declared or not), not cause or permit that Ship to enter or trade to any zone which is declared a war zone by any government or by that Ship's war risks insurers unless the prior written consent of the Security Trustee has been given and that Guarantor has (at its expense) effected any special, additional or modified insurance cover which the Security Trustee may require.
|
14.10
|
Provision of information.
Each Guarantor shall in relation to each Ship owned by it promptly provide the Security Trustee with any information which it requests regarding:
|
(a)
|
that Ship, its employment, position and engagements;
|
(b)
|
that Ship’s Earnings and payments and amounts due to that Ship's master and crew;
|
(c)
|
any expenses incurred, or likely to be incurred, in connection with the operation, maintenance or repair of that Ship and any payments made in respect of that Ship;
|
(d)
|
any towages and salvages; and
|
(e)
|
that Guarantor’s, the Approved Manager’s or that Ship’s compliance with the ISM Code and the ISPS Code,
|
|
and, upon the Security Trustee's request, provide copies of any current charter relating to that Ship and of any current charter guarantee, and copies of the Guarantor’s or that Approved Manager’s Document of Compliance.
|
14.11
|
Notification of certain events.
Each Guarantor shall in relation to each Ship owned by it immediately notify the Security Trustee by fax, confirmed forthwith by letter, of:
|
(a)
|
any casualty which is or is likely to be or to become a Major Casualty;
|
(b)
|
any occurrence as a result of which that Ship has become or is, by the passing of time or otherwise, likely to become a Total Loss;
|
(c)
|
any requirement or recommendation made by any insurer or classification society or by any competent authority which is not immediately complied with;
|
(d)
|
any arrest or detention of that Ship, any exercise or purported exercise of any lien on that Ship or its Earnings or any requisition of that Ship for hire;
|
(e)
|
any intended dry docking of that Ship;
|
(f)
|
any Environmental Claim made against the Borrower or any Security Party or in connection with that Ship, or any Environmental Incident in connection with that Ship;
|
(g)
|
any claim for breach of the ISM Code or the ISPS Code being made against that Guarantor, the Approved Manager of that Ship or otherwise in connection with that Ship; or
|
(h)
|
any other matter, event or incident, actual or threatened, the effect of which will or could lead to the ISM Code or ISPS Code not being complied with,
|
|
and that Guarantor shall keep the Security Trustee advised in writing on a regular basis and in such detail as the Security Trustee shall require of that Guarantor’s, that Approved Manager’s or any other person's response to any of those events or matters.
|
14.12
|
Restrictions on chartering, appointment of managers etc.
No Guarantor shall in relation to each Ship owned by it:
|
(a)
|
let that Ship on demise charter for any period;
|
(b)
|
enter into any time or consecutive voyage charter in respect of that Ship for a term which exceeds, or which by virtue of any optional extensions may exceed, 13 months;
|
(c)
|
enter into any charter in relation to that Ship under which more than 4 months' hire (or the equivalent) is payable in advance;
|
(d)
|
charter that Ship otherwise than on bona fide arm's length terms at the time when that Ship is fixed;
|
(e)
|
permit that Ship to be managed by anyone other than the Approved Manager for that Ship nor agree to any material alteration to the terms of that Approved Manager's appointment as manager of that Ship;
|
(f)
|
de-activate or lay up that Ship; or
|
(g)
|
put that Ship into the possession of any person for the purpose of work being done upon it in an amount exceeding or likely to exceed $3,000,000 (or the equivalent in any other currency) unless that person has first given to the Security Trustee and in terms satisfactory to it a written undertaking not to exercise any lien on that Ship or its Earnings for the cost of such work or for any other reason.
|
14.13
|
Notice of Mortgage.
Each Guarantor shall in relation to each Ship owned by it keep the Mortgage of that Ship registered against that Ship as a valid first preferred/priority mortgage, carry on board that Ship a certified copy of that Mortgage and place and maintain in a conspicuous place in the navigation room and the Master's cabin of that Ship a framed printed notice stating that that Ship is mortgaged by that Guarantor to the Security Trustee.
|
14.14
|
Sharing of Earnings.
Neither the Borrower nor any Guarantor shall enter into any agreement or arrangement for the sharing of any Earnings.
|
14.15
|
ISPS Code.
Each Guarantor shall in relation to each Ship owned by it comply with the ISPS Code and in particular, without limitation, shall:
|
(a)
|
procure that that Ship and the company responsible for that Ship’s compliance with the ISPS Code comply with the ISPS Code;
|
(b)
|
maintain for that Ship an ISSC; and
|
(c)
|
notify the Agent immediately in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC.
|
14.16
|
Charter Assignments.
The Borrower will procure that, at any time following the first Drawdown Date, no Ship shall be subject to a time charter for a term which exceeds 12 months unless the Agent has been provided with:
|
(a)
|
an original of an executed Charter Assignment of that time charter (and of each document required to be delivered by that Charter Assignment);
|
(b)
|
evidence satisfactory to the Agent of the relevant Guarantor’s due authorisation and execution of that Charter Assignment;
|
(c)
|
favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of the jurisdiction of incorporation of that Guarantor and such other relevant jurisdictions relevant to that time charter and/or that Charter Assignment as the Agent may require; and
|
(d)
|
documentary evidence that any agent for service of process named in that Charter Assignment has accepted its appointment.
|
15
|
SECURITY COVER
|
15.1
|
Minimum required security cover.
Clause 15.2 applies if the Agent notifies the Borrower that:
|
(a)
|
the market value (determined as provided in Clause 15.3) of each Ship subject to a Mortgage (
Provided that
no Ship then subject to a Mortgage will be included in the calculation set out in this Clause unless the Agent has first received for that Ship all of the documents and evidence described in Part B of Schedule 3, each in form and substance satisfactory to the Agent and its lawyers); plus
|
(b)
|
the net realisable value of any additional security previously provided under this Clause 15,
|
|
is below the aggregate of:
|
(i)
|
160 per cent. of the aggregate principal amount for the time being outstanding under the Acquisition Facility and the Working Capital Facility; and
|
(ii)
|
180 per cent. of the aggregate principal amount for the time being outstanding under the Term Loan Facility.
|
15.2
|
Provision of additional security; prepayment.
If the Agent serves a notice on the Borrower under Clause 15.1, the Borrower shall, within 45 days after the date on which the Agent's notice is served, either:
|
(a)
|
provide, or ensure that a third party provides, additional security which, in the reasonable opinion of the Majority Lenders, has a net realisable value at least equal to the shortfall and is documented in such terms as the Agent may, with the reasonable authorisation of the Majority Lenders, approve or require; or
|
(b)
|
prepay such part (at least) of the Loan as will eliminate the shortfall (with such prepayment applied against the Advances pro rata to their respective amounts).
|
15.3
|
Valuation of Ships.
The market value of a Ship at any date is that shown by the average of two valuations each prepared:
|
(a)
|
as at a date not more than 30 days previously;
|
(b)
|
by an Approved Broker selected or approved by the Agent;
|
(c)
|
with or without physical inspection of that Ship (as the Agent may require);
|
(d)
|
on the basis of a sale for prompt delivery for cash on normal arm's length commercial terms as between a willing seller and a willing buyer, free of any existing charter or other contract of employment; and
|
(e)
|
after deducting the estimated amount of the usual and reasonable expenses which would be incurred in connection with the sale.
|
15.4
|
Value of additional vessel security.
The net realisable value of any additional security which is provided under Clause 15.2 and which consists of a Security Interest over a vessel shall be that shown by a valuation complying with the requirements of Clause 15.3.
|
15.5
|
Valuations binding.
Any valuation under Clause 15.2, 15.3 or 15.4 shall be binding and conclusive as regards the Borrower, as shall be any valuation which the Majority Lenders make of any additional security which does not consist of or include a Security Interest.
|
15.6
|
Provision of information.
The Borrower shall promptly provide (and shall procure that the Guarantor owning that Ship shall provide) the Agent and any shipbroker or expert acting under Clause 15.3 or 15.4 with any information which the Agent or the shipbroker or expert may request for the purposes of the valuation; and, if the Borrower or (as the case may be) the relevant Guarantor fails to provide the information by the date specified in the request, the valuation may be made on any basis and assumptions which the shipbroker or the Majority Lenders (or the expert appointed by them) consider prudent.
|
15.7
|
Payment of valuation expenses.
Without prejudice to the generality of the Borrower's obligations under Clauses 20.2, 20.3 and 21.3, the Borrower shall, on demand, pay the Agent the amount of the fees and expenses of any shipbroker or expert instructed by the Agent under this Clause and all legal and other expenses incurred by any Creditor Party in connection with any matter arising out of this Clause.
|
15.8
|
Application of prepayment.
Clause 8 shall apply in relation to any prepayment pursuant to Clause 15.2(b).
|
16
|
PAYMENTS AND CALCULATIONS
|
16.1
|
Currency and method of payments.
All payments to be made by the Lenders or by the Borrower under a Finance Document shall be made to the Agent or to the Security Trustee, in the case of an amount payable to it:
|
(a)
|
by not later than 11.00 a.m. (New York City time) on the due date;
|
(b)
|
in same day Dollar funds settled through the New York Clearing House Interbank Payments System (or in such other Dollar funds and/or settled in such other manner as the Agent shall specify as being customary at the time for the settlement of international transactions of the type contemplated by this Agreement);
|
(c)
|
in the case of an amount payable by a Lender to the Agent or by the Borrower to the Agent or any Lender, to such account with such bank as the Agent may from time to time notify to the Borrower and the other Creditor Parties; and
|
(d)
|
in the case of an amount payable to the Security Trustee, to such account as it may from time to time notify to the Borrower and the other Creditor Parties.
|
16.2
|
Payment on non-Business Day.
If any payment by the Borrower under a Finance Document would otherwise fall due on a day which is not a Business Day:
|
(a)
|
the due date shall be extended to the next succeeding Business Day; or
|
(b)
|
if the next succeeding Business Day falls in the next calendar month, the due date shall be brought forward to the immediately preceding Business Day;
|
|
and interest shall be payable during any extension under paragraph (a) at the rate payable on the original due date.
|
16.3
|
Basis for calculation of periodic payments.
All interest and commitment/ticking fee and any other payments under any Finance Document which are of an annual or periodic nature shall accrue from day to day and shall be calculated on the basis of the actual number of days elapsed and a 360 day year.
|
16.4
|
Distribution of payments to Creditor Parties.
Subject to Clauses 16.5, 16.6 and 16.7:
|
(a)
|
any amount received by the Agent under a Finance Document for distribution or remittance to a Lender or the Security Trustee shall be made available by the Agent to that Lender or, as the case may be, the Security Trustee by payment, with funds having the same value as the funds received, to such account as the Lender or the Security Trustee may have notified to the Agent not less than 5 Business Days previously; and
|
(b)
|
amounts to be applied in satisfying amounts of a particular category which are due to the Lenders generally shall be distributed by the Agent to each Lender pro rata to the amount in that category which is due to it.
|
16.5
|
Permitted deductions by Agent.
Notwithstanding any other provision of this Agreement or any other Finance Document, the Agent may, before making an amount available to a Lender, deduct and withhold from that amount any sum which is then due and payable to the Agent from that Lender under any Finance Document or any sum which the Agent is then entitled under any Finance Document to require that Lender to pay on demand.
|
16.6
|
Agent only obliged to pay when monies received.
Notwithstanding any other provision of this Agreement or any other Finance Document, the Agent shall not be obliged to make available to the Borrower or any Lender any sum which the Agent is expecting to receive for remittance or distribution to the Borrower or that Lender until the Agent has satisfied itself that it has received that sum.
|
16.7
|
Refund to Agent of monies not received.
If and to the extent that the Agent makes available a sum to the Borrower or a Lender, without first having received that sum, the Borrower or (as the case may be) the Lender concerned shall, on demand:
|
(a)
|
refund the sum in full to the Agent; and
|
(b)
|
pay to the Agent the amount (as certified by the Agent) which will indemnify the Agent against any funding or other loss, liability or expense incurred by the Agent as a result of making the sum available before receiving it.
|
16.8
|
Agent may assume receipt.
Clause 16.7 shall not affect any claim which the Agent has under the law of restitution, and applies irrespective of whether the Agent had any form of notice that it had not received the sum which it made available.
|
16.9
|
Creditor Party accounts.
Each Creditor Party shall maintain accounts showing the amounts owing to it by the Borrower and each Security Party under the Finance Documents and all payments in respect of those amounts made by the Borrower and any Security Party.
|
16.10
|
Agent's memorandum account.
The Agent shall maintain a memorandum account showing the amounts advanced by the Lenders and all other sums owing to the Agent, the Security Trustee and each Lender from the Borrower and each Security Party under the Finance Documents and all payments in respect of those amounts made by the Borrower and any Security Party.
|
16.11
|
Accounts prima facie evidence.
If any accounts maintained under Clauses 16.9 and 16.10 show an amount to be owing by the Borrower or a Security Party to a Creditor Party, those accounts shall be prima facie evidence that that amount is owing to that Creditor Party.
|
17
|
APPLICATION OF RECEIPTS
|
17.1
|
Normal order of application.
Except as any Finance Document may otherwise provide, any sums which are received or recovered by any Creditor Party under or by virtue of any Finance Document shall be applied:
|
(a)
|
FIRST: in or towards payment pro rata of any unpaid fees, costs and expenses of the Agent and the Security Trustee under the Finance Documents;
|
(b)
|
SECONDLY: in or towards payment pro rata of any accrued interest or commission due but unpaid under this Agreement;
|
(c)
|
THIRDLY: in or towards payment pro rata of any principal due but unpaid under this Agreement;
|
(d)
|
FOURTHLY: in or towards payment pro rata of any other amounts due but unpaid under any Finance Document;
|
(e)
|
FIFTHLY: in retention of an amount equal to any amount not then due and payable under any Finance Document but which the Agent, by notice to the Borrower, the Security Parties and the other Creditor Parties, states in its opinion will or may become due and payable in the future and, upon those amounts becoming due and payable, in or towards satisfaction of them in accordance with the provisions of Clause 17.1(a), 17.1(b), 17.1(c) and 17.1(d); and
|
(f)
|
SIXTHLY: any surplus shall be paid to the Borrower or to any other person appearing to be entitled to it.
|
17.2
|
Variation of order of application.
The Agent may, with the authorisation of the Majority Lenders, by notice to the Borrower, the Security Parties and the other Creditor Parties provide for a different manner of application from that set out in Clause 17.1 either as regards a specified sum or sums or as regards sums in a specified category or categories.
|
17.3
|
Notice of variation of order of application.
The Agent may give notices under Clause 17.2 from time to time; and such a notice may be stated to apply not only to sums which may be received or recovered in the future, but also to any sum which has been received or recovered on or after the third Business Day before the date on which the notice is served.
|
17.4
|
Appropriation rights overridden.
This Clause 17 and any notice which the Agent gives under Clause 17.2 shall override any right of appropriation possessed, and any appropriation made, by the Borrower or any Security Party.
|
18
|
APPLICATION OF EARNINGS
|
18.1
|
Payment of Earnings.
The Borrower undertakes with each Creditor Party to ensure that, throughout the Security Period (and subject only to the provisions of the General Assignments and the Charter Assignments), all the Earnings of each Ship are paid to the Earnings Account for that Ship.
|
18.2
|
Location of accounts.
The Borrower shall promptly:
|
(a)
|
comply with any requirement of the Agent as to the location or re-location of the Earnings Accounts (or any of them); and
|
(b)
|
execute any documents which the Agent specifies to create or maintain in favour of the Security Trustee a Security Interest over (and/or rights of set-off, consolidation or other rights in relation to) the Earnings Accounts (or any of them).
|
18.3
|
Debits for expenses
etc. The Agent shall be entitled (but not obliged) from time to time to debit any Earnings Account without prior notice in order to discharge any amount due and payable under Clause 20 or 21 to a Creditor Party or payment of which any Creditor Party has become entitled to demand under Clause 20 or 21.
|
18.4
|
Borrower's obligations unaffected.
The provisions of this Clause 18 do not affect:
|
(a)
|
the liability of the Borrower to make payments of principal and interest on the due dates; or
|
(b)
|
any other liability or obligation of the Borrower or any Security Party under any Finance Document.
|
19
|
EVENTS OF DEFAULT
|
19.1
|
Events of Default.
An Event of Default occurs if:
|
(a)
|
the Borrower or any Security Party fails to pay when due any sum payable under a Finance Document or under any document relating to a Finance Document; or
|
(b)
|
any breach occurs of Clause 9.2, 11.2, 11.16, 12.2, 12.3 or 15.2; or
|
(c)
|
any breach by the Borrower or any Security Party occurs of any provision of a Finance Document (other than a breach covered by paragraphs (a) or (b)) which, in the reasonable opinion of the Majority Lenders, is capable of remedy, and such default continues unremedied 30 days after written notice from the Agent requesting action to remedy the same; or
|
(d)
|
(subject to any applicable grace period specified in the Finance Document) any breach by the Borrower or any Security Party occurs of any provision of a Finance Document (other than a breach falling within paragraphs (a), (b) or (c)); or
|
(e)
|
any material (in the reasonable opinion of the Majority Lenders) representation, warranty or statement made or repeated by, or by an officer of, the Borrower or a Security Party in a Finance Document or in a Drawdown Notice or any other notice or document relating to a Finance Document is materially untrue or misleading when it is made or repeated; or
|
(f)
|
any of the following occurs in relation to any Financial Indebtedness of a Relevant Person in respect of $10,000,000 or more or, as regards Financial Indebtedness arising under different documents or transactions, an aggregate amount of $10,000,000 or more:
|
(i)
|
any Financial Indebtedness of a Relevant Person is not paid when due (after taking into account any applicable grace period); or
|
(ii)
|
any Financial Indebtedness of a Relevant Person becomes due and payable or capable of being declared due and payable prior to its stated maturity date as a consequence of any event of default; or
|
(iii)
|
a lease, hire purchase agreement or charter creating any Financial Indebtedness of a Relevant Person is terminated by the lessor or owner or becomes capable of being terminated as a consequence of any termination event; or
|
(iv)
|
any overdraft, loan, note issuance, acceptance credit, letter of credit, guarantee, foreign exchange or other facility, or any swap or other derivative contract or transaction, relating to any Financial Indebtedness of a Relevant Person ceases to be available or becomes capable of being terminated as a result of any event of default, or cash cover is required, or becomes capable of being required, in respect of such a facility as a result of any event of default; or
|
(v)
|
any Security Interest securing any Financial Indebtedness of a Relevant Person becomes enforceable; or
|
(g)
|
any of the following occurs in relation to a Relevant Person:
|
(i)
|
a Relevant Person becomes, in the reasonable opinion of the Majority Lenders, unable to pay its debts as they fall due; or
|
(ii)
|
either:
|
(A)
|
a Relevant Person fails to comply with or pay any sum due from it under any final judgment (or any other judgment which is not appealed by that Relevant Person within the applicable time) or any final order (or any other order which is not appealed by that Relevant Person within the applicable time) made or given by any court of competent jurisdiction in respect of a sum of, or sums aggregating, $1,000,000 or more or the equivalent in another currency; or
|
(B)
|
as a result of non-compliance and/or non-payment in full with any final judgment (or any other judgment which is not appealed by that Relevant Person within the applicable time) or any final order (or any other order which is not appealed by that Relevant Person within the applicable time) made or given by any court of competent jurisdiction, any assets of a Relevant Person are subject to any form of execution, attachment, arrest, sequestration or distress in respect of a sum of, or sums aggregating, $1,000,000 or more or the equivalent in another currency; or
|
(iii)
|
any administrative or other receiver is appointed over any asset of a Relevant Person; or
|
(iv)
|
an administrator is appointed (whether by the court or otherwise) in respect of a Relevant Person; or
|
(v)
|
any formal declaration of bankruptcy or any formal statement to the effect that a Relevant Person is insolvent or likely to become insolvent is made by a Relevant
|
|
Person or by the directors of a Relevant Person or, in any proceedings, by a lawyer acting for a Relevant Person; or
|
(vi)
|
a provisional liquidator is appointed in respect of a Relevant Person, a winding up order is made in relation to a Relevant Person or a winding up resolution is passed by a Relevant Person; or
|
(vii)
|
a resolution is passed, an administration notice is given or filed, an application or petition to a court is made or presented or any other step is taken by (aa) a Relevant Person, (bb) the members or directors of a Relevant Person, (cc) a holder of Security Interests which together relate to all or substantially all of the assets of a Relevant Person, or (dd) a government minister or public or regulatory authority for or with a view to the winding up of that or another Relevant Person or the appointment of a provisional liquidator or administrator in respect of that or another Relevant Person, or that or another Relevant Person ceasing or suspending business operations or payments to creditors, save that this paragraph does not apply to a fully solvent winding up of a Relevant Person other than the Borrower or any Guarantor which is, or is to be, effected for the purposes of an amalgamation or reconstruction previously approved by the Majority Lenders and effected not later than 3 months after the commencement of the winding up; or
|
(viii)
|
an administration notice is given or filed, an application or petition to a court is made or presented or any other step is taken by a creditor of a Relevant Person (other than a holder of Security Interests which together relate to all or substantially all of the assets of a Relevant Person) for the winding up of a Relevant Person or the appointment of a provisional liquidator or administrator in respect of a Relevant Person, unless the proposed winding up, appointment of a provisional liquidator or administration is being contested in good faith, on substantial grounds and not with a view to some other insolvency law procedure being implemented instead and either (aa) the application or petition is dismissed or withdrawn within 30 days of being made or presented, or (bb) within 30 days of the administration notice being given or filed, or the other relevant steps being taken, other action is taken which will ensure that there will be no administration and (in both cases (aa) or (bb)) the Relevant Person will continue to carry on business in the ordinary way and without being the subject of any actual, interim or pending insolvency law procedure; or
|
(ix)
|
a Relevant Person or its directors take any steps (whether by making or presenting an application or petition to a court, or submitting or presenting a document setting out a proposal or proposed terms, or otherwise) with a view to obtaining, in relation to that or another Relevant Person, any form of moratorium, suspension or deferral of payments, reorganisation of debt (or certain debt) or arrangement with all or a substantial proportion (by number or value) of creditors or of any class of them or any such moratorium, suspension or deferral of payments, reorganisation or arrangement is effected by court order, by the filing of documents with a court, by means of a contract or in any other way at all; or
|
(x)
|
any meeting of the members or directors, or of any committee of the board or senior management, of a Relevant Person is held or summoned for the purpose of considering a resolution or proposal to authorise or take any action of a type described in paragraphs (iv) to (ix) or a step preparatory to such action, or (with or without such a meeting) the members, directors or such a committee resolve or agree that such an action or step should be taken or should be taken if certain conditions materialise or fail to materialise; or
|
(xi)
|
in a country other than England, any event occurs, any proceedings are opened or commenced or any step is taken which, in the opinion of the Majority Lenders is similar to any of the foregoing; or
|
(h)
|
the Borrower ceases or suspends carrying on its business or a part of its business which, in the reasonable opinion of the Majority Lenders, is material in the context of this Agreement; or
|
(i)
|
it becomes unlawful or impossible:
|
(i)
|
for the Borrower or any Security Party to discharge any liability under a Finance Document or to comply with any other obligation which the Majority Lenders consider material under a Finance Document; or
|
(ii)
|
for the Agent, the Security Trustee or the Lenders to exercise or enforce any right under, or to enforce any Security Interest created by, a Finance Document; or
|
(j)
|
any official consent necessary to enable any Guarantor to own, operate or charter any Ship or to enable the Borrower or any Security Party to comply with any provision which the Majority Lenders consider material of a Finance Document or any Purchase Contract is not granted, expires without being renewed, is revoked or becomes liable to revocation or any condition of such a consent is not fulfilled; or
|
(k)
|
it appears to the Majority Lenders that, without their prior consent:
|
(i)
|
the Marinakis Family does not have control of the Borrower (and, for the purposes of this Clause 19.1(k)(i), “
control
” by the Marinakis Family of the Borrower means either (x) Mr Evangelos Marinakis holds an executive position in the management of the Borrower; or (y) the Marinakis Family (whether directly or indirectly and whether by the ownership of share capital, the possession of voting power, contract or otherwise) controls or has the power to control (in either case whether directly or indirectly) the affairs and policies of B); or
|
(ii)
|
two or more persons acting in concert (other than the Marinakis Family) or any single person (other than a member of the Marinakis Family):
|
(A)
|
acquires legally and/or beneficially (either directly or indirectly) an ownership interest and/or voting rights in respect of more than 50 per cent. of the issued share capital of the Borrower; or
|
(B)
|
has control of the Borrower; or
|
(iii)
|
any Guarantor is not a wholly owned indirect subsidiary of the Borrower; or
|
(iv)
|
the Shareholder is not a wholly owned direct subsidiary of the Borrower; or
|
(v)
|
any Guarantor is not a wholly owned direct subsidiary of the Shareholder; or
|
(l)
|
the Borrower ceases to be listed on the New York Stock Exchange; or
|
(m)
|
any provision which the Majority Lenders reasonably considers material of a Finance Document proves to have been or becomes invalid or unenforceable, or a Security Interest created by a Finance Document proves to have been or becomes invalid or unenforceable or such a Security Interest proves to have ranked after, or loses its priority to, another Security Interest or any other third party claim or interest; or
|
(n)
|
the security constituted by a Finance Document is in any way imperilled or in jeopardy; or
|
(o)
|
any other event occurs or any other circumstances arise or develop including, without limitation:
|
(i)
|
a change in the financial position, state of affairs or prospects of any Relevant Person; or
|
(ii)
|
any accident or other event involving any Ship or another vessel owned, chartered or operated by a Relevant Person,
|
19.2
|
Actions following an Event of Default.
On, or at any time after, the occurrence of an Event of Default:
|
(a)
|
the Agent may, and if so instructed by the Majority Lenders, the Agent shall:
|
(i)
|
serve on the Borrower a notice stating that the Commitments and all other obligations of each Lender to the Borrower under this Agreement are cancelled; and/or
|
(ii)
|
serve on the Borrower a notice stating that the Loan, all accrued interest and all other amounts accrued or owing under this Agreement are immediately due and payable or are due and payable on demand; and/or
|
(iii)
|
take any other action which, as a result of the Event of Default or any notice served under paragraph (i) or (ii), the Agent and/or the Lenders are entitled to take under any Finance Document or any applicable law; and/or
|
(b)
|
the Security Trustee may, and if so instructed by the Agent, acting with the authorisation of the Majority Lenders, the Security Trustee shall take any action which, as a result of the Event of Default or any notice served under paragraph (a) (i) or (ii), the Security Trustee, the Agent and/or the Lenders are entitled to take under any Finance Document or any applicable law.
|
19.3
|
Termination of Commitments.
On the service of a notice under Clause 19.2(a)(i), the Commitments and all other obligations of each Lender to the Borrower under this Agreement shall be cancelled.
|
19.4
|
Acceleration of Loan.
On the service of a notice under Clause 19.2(a)(ii), the Loan, all accrued interest and all other amounts accrued or owing from the Borrower or any Security Party under this Agreement and every other Finance Document shall become immediately due and payable or, as the case may be, payable on demand.
|
19.5
|
Multiple notices; action without notice.
The Agent may serve notices under Clauses 19.2(a)(i) or (ii) simultaneously or on different dates and it and/or the Security Trustee may take any action referred to in Clause 19.2 if no such notice is served or simultaneously with or at any time after the service of both or either of such notices.
|
19.6
|
Notification of Creditor Parties and Security Parties.
The Agent shall send to each Lender, the Security Trustee and each Security Party a copy or the text of any notice which the Agent serves on the Borrower under Clause 19.2; but the notice shall become effective when it is served on the Borrower, and no failure or delay by the Agent to send a copy or the text of the notice to any other person shall invalidate the notice or provide the Borrower or any Security Party with any form of claim or defence.
|
19.6
|
Notification of Creditor Parties and Security Parties.
The Agent shall send to each Lender, the Security Trustee and each Security Party a copy or the text of any notice which the Agent serves on the Borrower under Clause 19.2; but the notice shall become effective when it is served on the Borrower, and no failure or delay by the Agent to send a copy or the text of the notice to any other person shall invalidate the notice or provide the Borrower or any Security Party with any form of claim or defence.
|
19.7
|
Lender's rights unimpaired.
Nothing in this Clause shall be taken to impair or restrict the exercise of any right given to individual Lenders under a Finance Document or the general law; and, in particular, this Clause is without prejudice to Clause 3.1.
|
19.8
|
Exclusion of Creditor Party liability.
No Creditor Party, and no receiver or manager appointed by the Security Trustee, shall have any liability to the Borrower or a Security Party:
|
(a)
|
for any loss caused by an exercise of rights under, or enforcement of a Security Interest created by, a Finance Document or by any failure or delay to exercise such a right or to enforce such a Security Interest; or
|
(b)
|
as mortgagee in possession or otherwise, for any income or principal amount which might have been produced by or realised from any asset comprised in such a Security Interest or for any reduction (however caused) in the value of such an asset,
|
|
except that this does not exempt a Creditor Party or a receiver or manager from liability for losses shown to have been directly and mainly caused by the dishonesty or the wilful misconduct of such Creditor Party's own officers and employees or (as the case may be) such receiver's or manager's own partners or employees.
|
19.9
|
Relevant Persons.
In this Clause 19, a “
Relevant Person
” means the Borrower, a Security Party or any company which is a subsidiary of the Borrower or a Security Party; but excluding any such subsidiary which is dormant and the value of whose gross assets is $500,000 or less.
|
19.10
|
Interpretation.
In Clause 19.1(f), references to an event of default or a termination event include any event, howsoever described, which is similar to an event of default in a facility agreement or a termination event in a finance lease; and in Clause 19.1(g) “petition” includes an application.
|
20
|
FEES AND EXPENSES
|
20.1
|
Fees.
The Borrower shall pay to the Agent:
|
(a)
|
on each date for the payment of any fee set out in any Fee Letter, that fee in the amount set out in that Fee Letter, for distribution among the Creditor Parties (or any of them) as set out in that Fee Letter;
|
(b)
|
quarterly in arrears on the last day of each fiscal quarter of the Borrower during the period from (and including) the date of this Agreement to (and including) the earlier of (i) the end of the Availability Period and (ii) the date on which the Total Commitments are cancelled and on the last day of that period, for the account of the Lenders, a commitment fee at the rate of 1 per cent. per annum on the amount of the Total Commitments less the amount of the Loan, for distribution among the Lenders pro rata to their Commitments; and
|
(c)
|
on the date of this Agreement and on each anniversary thereof during the Security Period, an annual agency fee of the amount set out in the Fee Letter(s), such agency fee to be payable to the Agent in advance for its own account.
|
20.2
|
Costs of negotiation, preparation etc.
The Borrower shall pay to the Agent on its demand the amount of all expenses incurred by the Agent or the Security Trustee in connection with the negotiation, preparation, execution or registration of any Finance
|
|
Document or any related document or with any transaction contemplated by a Finance Document or a related document.
|
20.3
|
Costs of variations, amendments, enforcement etc.
The Borrower shall pay to the Agent, on the Agent's demand, for the account of the Creditor Party concerned the amount of all expenses incurred by a Creditor Party in connection with:
|
(a)
|
any amendment or supplement to a Finance Document, or any proposal for such an amendment to be made;
|
(b)
|
any consent or waiver by the Lenders, the Majority Lenders or the Creditor Party concerned under or in connection with a Finance Document, or any request for such a consent or waiver;
|
(c)
|
the valuation of any security provided or offered under Clause 15 or any other matter relating to such security; or
|
(d)
|
any step taken by the Creditor Party concerned with a view to the protection, exercise or enforcement of any right or Security Interest created by a Finance Document or for any similar purpose.
|
|
There shall be recoverable under paragraph (d) the full amount of all legal expenses, whether or not such as would be allowed under rules of court or any taxation or other procedure carried out under such rules.
|
20.4
|
Documentary taxes.
The Borrower shall promptly pay any tax payable on or by reference to any Finance Document, and shall, on the Agent's demand, fully indemnify each Creditor Party against any claims, expenses, liabilities and losses resulting from any failure or delay by the Borrower to pay such a tax.
|
20.5
|
Certification of amounts.
A notice which is signed by 2 officers of a Creditor Party, which states that a specified amount, or aggregate amount, is due to that Creditor Party under this Clause 20 and which indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or aggregate amount, is due shall be prima facie evidence that the amount, or aggregate amount, is due.
|
21
|
INDEMNITIES
|
21.1
|
Indemnities regarding borrowing and repayment of Loan.
The Borrower shall fully indemnify the Agent and each Lender on the Agent's demand and the Security Trustee on its demand in respect of all claims, expenses, liabilities and losses which are made or brought against or incurred by that Creditor Party, or which that Creditor Party reasonably and with due diligence estimates that it will incur, as a result of or in connection with:
|
(a)
|
an Advance not being borrowed on the date specified in the Drawdown Notice for any reason other than a default by the Lender claiming the indemnity;
|
(b)
|
the receipt or recovery of all or any part of the Loan or an overdue sum otherwise than on the last day of an Interest Period or other relevant period;
|
(c)
|
any failure (for whatever reason) by the Borrower to make payment of any amount due under a Finance Document on the due date or, if so payable, on demand (after giving credit for any default interest paid by the Borrower on the amount concerned under Clause 7);
|
(d)
|
the occurrence of an Event of Default or a Potential Event of Default and/or the acceleration of repayment of the Loan under Clause 19,
|
|
and in respect of any tax (other than tax on its overall net income) for which a Creditor Party is liable in connection with any amount paid or payable to that Creditor Party (whether for its own account or otherwise) under any Finance Document.
|
21.2
|
Breakage costs.
Without limiting its generality, Clause 21.1 covers any claim, expense, liability or loss, including a loss of a prospective profit, incurred by a Lender:
|
(a)
|
in liquidating or employing deposits from third parties acquired or arranged to fund or maintain all or any part of its Contribution and/or any overdue amount (or an aggregate amount which includes its Contribution or any overdue amount); and
|
(b)
|
in terminating, or otherwise in connection with, any interest and/or currency swap or any other transaction entered into (whether with another legal entity or with another office or department of the Lender concerned) to hedge any exposure arising under this Agreement or that part which the Lender concerned determines is fairly attributable to this Agreement of the amount of the liabilities, expenses or losses (including losses of prospective profits) incurred by it in terminating, or otherwise in connection with, a number of transactions of which this Agreement is one.
|
21.3
|
Miscellaneous indemnities.
The Borrower shall fully indemnify each Creditor Party severally on their respective demands in respect of all claims, expenses, liabilities and losses which may be made or brought against or incurred by a Creditor Party, in any country, as a result of or in connection with:
|
(a)
|
any action taken, or omitted or neglected to be taken, under or in connection with any Finance Document by the Agent, the Security Trustee or any other Creditor Party or by any receiver appointed under a Finance Document; or
|
(b)
|
any other Pertinent Matter,
|
|
other than claims, expenses, liabilities and losses which are shown to have been caused by the gross negligence, dishonesty or wilful misconduct of the officers or employees of the Creditor Party concerned.
|
|
Without prejudice to its generality, this Clause 21.3 covers any claims, expenses, liabilities and losses which arise, or are asserted, under or in connection with any law relating to safety at sea, the ISM Code, the ISPS Code or any Environmental Law.
|
21.4
|
Currency indemnity.
If any sum due from the Borrower or any Security Party to a Creditor Party under a Finance Document or under any order or judgment relating to a Finance Document has to be converted from the currency in which the Finance Document provided for the sum to be paid (the “
Contractual Currency
”) into another currency (the “
Payment Currency
”) for the purpose of:
|
(a)
|
making or lodging any claim or proof against the Borrower or any Security Party, whether in its liquidation, any arrangement involving it or otherwise; or
|
(b)
|
obtaining an order or judgment from any court or other tribunal; or
|
(c)
|
enforcing any such order or judgment,
|
|
the Borrower shall indemnify the Creditor Party concerned against the loss arising when the amount of the payment actually received by that Creditor Party is converted at the available rate of exchange into the Contractual Currency.
|
|
In this Clause 21.4, the “
available rate of exchange
” means the rate at which the Creditor Party concerned is able at the opening of business (London time) on the Business Day after it receives the sum concerned to purchase the Contractual Currency with the Payment Currency.
|
|
This Clause 21.4 creates a separate liability of the Borrower which is distinct from its other liabilities under the Finance Documents and which shall not be merged in any judgment or order relating to those other liabilities.
|
21.5
|
Certification of amounts.
A notice which is signed by 2 officers of a Creditor Party, which states that a specified amount, or aggregate amount, is due to that Creditor Party under this Clause 21 and which indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or aggregate amount, is due shall be prima facie evidence that the amount, or aggregate amount, is due.
|
21.6
|
Sums deemed due to a Lender.
For the purposes of this Clause 21, a sum payable by the Borrower to the Agent or the Security Trustee for distribution to a Lender shall be treated as a sum due to that Lender.
|
22
|
NO SET-OFF OR TAX DEDUCTION
|
22.1
|
No deductions.
All amounts due from the Borrower under a Finance Document shall be paid:
|
(a)
|
without any form of set-off, cross-claim or condition; and
|
(b)
|
free and clear of any tax deduction except a tax deduction which the Borrower is required by law to make.
|
22.2
|
Grossing-up for taxes.
If the Borrower is required by law to make a tax deduction from any payment:
|
(a)
|
the Borrower shall notify the Agent as soon as it becomes aware of the requirement;
|
(b)
|
the Borrower shall pay the tax deducted to the appropriate taxation authority promptly, and in any event before any fine or penalty arises; and
|
(c)
|
the amount due in respect of the payment shall be increased by the amount necessary to ensure that each Creditor Party receives and retains (free from any liability relating to the tax deduction) a net amount which, after the tax deduction, is equal to the full amount which it would otherwise have received.
|
22.3
|
Evidence of payment of taxes.
Within 1 month after making any tax deduction, the Borrower shall deliver to the Agent documentary evidence satisfactory to the Agent that the tax had been paid to the appropriate taxation authority.
|
22.4
|
Exclusion of tax on overall net income.
In this Clause 22 “
tax deduction
” means any deduction or withholding for or on account of any present or future tax except tax on a Creditor Party's overall net income.
|
23
|
ILLEGALITY, ETC
|
23.1
|
Illegality.
This Clause 23 applies if a Lender (the “
Notifying Lender
”) notifies the Agent that it has become, or will with effect from a specified date, become:
|
(a)
|
unlawful or prohibited as a result of the introduction of a new law, an amendment to an existing law or a change in the manner in which an existing law is or will be interpreted or applied; or
|
(b)
|
contrary to, or inconsistent with, any regulation,
|
|
for the Notifying Lender to maintain or give effect to any of its obligations under this Agreement in the manner contemplated by this Agreement.
|
23.2
|
Notification of illegality.
The Agent shall promptly notify the Borrower, the Security Parties, the Security Trustee and the other Lenders of the notice under Clause 23.1 which the Agent receives from the Notifying Lender.
|
23.3
|
Prepayment; termination of Commitment.
On the Agent notifying the Borrower under Clause 23.2, the Notifying Lender's Commitment shall terminate (with such termination to be applied against the Acquisition Facility and the Working Capital Facility pro rata to their respective amounts); and thereupon or, if later, on the date specified in the Notifying Lender's notice under Clause 23.1 as the date on which the notified event would become effective the Borrower shall prepay the Notifying Lender's Contribution in accordance with Clause 8.
|
24
|
INCREASED COSTS
|
24.1
|
Increased costs.
This Clause 24 applies if a Lender (the “
Notifying Lender
”) notifies the Agent that the Notifying Lender considers that as a result of:
|
(a)
|
the introduction or alteration after the date of this Agreement of a law or an alteration after the date of this Agreement in the manner in which a law is interpreted or applied (disregarding any effect which relates to the application to payments under this Agreement of a tax on the Lender's overall net income); or
|
(b)
|
complying with any regulation (including any which relates to capital adequacy or liquidity controls or which affects the manner in which the Notifying Lender allocates capital resources to its obligations under this Agreement) which is introduced, or altered, or the interpretation or application of which is altered, after the date of this Agreement,
|
|
the Notifying Lender (or a parent company of it) has incurred or will incur an “
increased cost
”.
|
24.2
|
Meaning of “increased cost”. In this Clause 24, “
increased cost
” means, in relation to a Notifying Lender:
|
(a)
|
an additional or increased cost incurred as a result of, or in connection with, the Notifying Lender having entered into, or being a party to, this Agreement or a Transfer Certificate, of funding or maintaining its Commitment or Contribution or performing its obligations under this Agreement, or of having outstanding all or any part of its Contribution or other unpaid sums;
|
(b)
|
a reduction in the amount of any payment to the Notifying Lender under this Agreement or in the effective return which such a payment represents to the Notifying Lender or on its capital;
|
(c)
|
an additional or increased cost of funding all or maintaining all or any of the advances comprised in a class of advances formed by or including the Notifying Lender's Contribution or (as the case may require) the proportion of that cost attributable to the Contribution; or
|
(d)
|
a liability to make a payment, or a return foregone, which is calculated by reference to any amounts received or receivable by the Notifying Lender under this Agreement;
|
|
but not an item attributable to a change in the rate of tax on the overall net income of the Notifying Lender (or a parent company of it) or an item covered by the indemnity for tax in Clause 21.1 or by Clause 22.
|
|
For the purposes of this Clause 24.2 the Notifying Lender may in good faith allocate or spread costs and/or losses among its assets and liabilities (or any class of its assets and liabilities) on such basis as it considers appropriate.
|
24.3
|
Notification to Borrower of claim for increased costs.
The Agent shall promptly notify the Borrower and the Security Parties of the notice which the Agent received from the Notifying Lender under Clause 24.1.
|
24.4
|
Payment of increased costs.
The Borrower shall pay to the Agent, on the Agent's demand, for the account of the Notifying Lender the amounts which the Agent from time to time notifies the Borrower that the Notifying Lender has specified to be necessary to compensate the Notifying Lender for the increased cost.
|
24.5
|
Notice of prepayment.
If the Borrower is not willing to continue to compensate the Notifying Lender for the increased cost under Clause 24.4, the Borrower may give the Agent not less than 14 days' notice of its intention to prepay the Notifying Lender's Contribution at the end of an Interest Period.
|
24.6
|
Prepayment; termination of Commitment.
A notice under Clause 24.5 shall be irrevocable; the Agent shall promptly notify the Notifying Lender of the Borrower's notice of intended prepayment; and:
|
(a)
|
on the date on which the Agent serves that notice, the Commitment of the Notifying Lender shall be cancelled (with such cancellation to be applied against the Acquisition Facility and the Working Capital Facility pro rata to their respective amounts); and
|
(b)
|
on the date specified in its notice of intended prepayment, the Borrower shall prepay (without premium or penalty) the Notifying Lender's Contribution, together with accrued interest thereon at the applicable rate plus the Margin plus the Mandatory Cost (if any).
|
24.7
|
Application of prepayment.
Clause 8 shall apply in relation to the prepayment.
|
25
|
SET-OFF
|
25.1
|
Application of credit balances.
Each Creditor Party may without prior notice:
|
(a)
|
apply any balance (whether or not then due) which at any time stands to the credit of any account in the name of the Borrower at any office in any country of that Creditor Party in or towards satisfaction of any sum then due from the Borrower to that Creditor Party under any of the Finance Documents; and
|
(b)
|
for that purpose:
|
(i)
|
break, or alter the maturity of, all or any part of a deposit of the Borrower;
|
(ii)
|
convert or translate all or any part of a deposit or other credit balance into Dollars; and
|
(iii)
|
enter into any other transaction or make any entry with regard to the credit balance which the Creditor Party concerned considers appropriate.
|
25.2
|
Existing rights unaffected.
No Creditor Party shall be obliged to exercise any of its rights under Clause 25.1; and those rights shall be without prejudice and in addition to any right of set-off, combination of accounts, charge, lien or other right or remedy to which a Creditor Party is entitled (whether under the general law or any document).
|
25.3
|
Sums deemed due to a Lender.
For the purposes of this Clause 25, a sum payable by the Borrower to the Agent or the Security Trustee for distribution to, or for the account of, a Lender shall be treated as a sum due to that Lender; and each Lender's proportion of a sum so payable for distribution to, or for the account of, the Lenders shall be treated as a sum due to such Lender.
|
25.4
|
No Security Interest.
This Clause 25 gives the Creditor Parties a contractual right of set-off only and does not create any equitable charge or other Security Interest over any credit balance of the Borrower.
|
26
|
TRANSFERS AND CHANGES IN LENDING OFFICES
|
26.1
|
Transfer by Borrower.
The Borrower may not, without the consent of the Agent, given on the instructions of all the Lenders transfer any of its rights, liabilities or obligations under any Finance Document.
|
26.2
|
Transfer by a Lender.
Subject to Clause 26.4, a Lender (the “
Transferor Lender
”) may at any time, with the prior written consent of the Borrower (not to be unreasonably withheld or delayed and without any cost whatsoever to the Borrower) or without the consent of the Borrower if an Event of Default or a Potential Event of Default has occurred and is continuing but without in any case needing the consent of any Security Party, cause:
|
(a)
|
its rights in respect of all or part of its Contribution; or
|
(b)
|
its obligations in respect of all or part of its Commitment; or
|
(c)
|
a combination of (a) and (b),
|
|
to be (in the case of its rights) transferred to, or (in the case of its obligations) assumed by, another bank or financial institution (a “
Transferee Lender
”) by delivering to the Agent a completed certificate in the form set out in Schedule 4 with any modifications approved or required by the Agent (a “
Transfer Certificate
”) executed by the Transferor Lender and the Transferee Lender
Provided that
a Lender may make such transfer to any wholly owned subsidiary of it, to its parent company or to another subsidiary of its parent company without the consent of the Borrower.
|
|
Without prejudice to the foregoing, any such transfer by a Lender shall be subject to the following further conditions:
|
|
(i)
|
the amount of the Contribution and/or Commitment of the Lender which is to be transferred shall not be less than $20,000,000 or, if less, the remaining amount of its Contribution and Commitment, unless the Agent agrees otherwise;
|
|
(ii)
|
the Agent shall approve the transfer (such approval not to be unreasonably withheld); and
|
|
(iii)
|
payment of the fee in accordance with Clause 26.11.
|
|
However any rights and obligations of the Transferor Lender in its capacity as Agent or Security Trustee will have to be dealt with separately in accordance with the Agency and Trust Deed.
|
26.3
|
Transfer Certificate, delivery and notification.
As soon as reasonably practicable after a Transfer Certificate is delivered to the Agent, it shall (unless it has reason to believe that the Transfer Certificate may be defective):
|
(a)
|
sign the Transfer Certificate on behalf of itself, the Borrower, the Security Parties, the Security Trustee, each of the Lead Arrangers and each of the other Lenders;
|
(b)
|
on behalf of the Transferee Lender, send to the Borrower and each Security Party letters or faxes notifying them of the Transfer Certificate and attaching a copy of it;
|
(c)
|
send to the Transferee Lender copies of the letters or faxes sent under paragraph (b) above,
|
26.4
|
Effective Date of Transfer Certificate.
A Transfer Certificate becomes effective on the date, if any, specified in the Transfer Certificate as its effective date
Provided that
it is signed by the Agent under Clause 26.3 on or before that date.
|
26.5
|
No transfer without Transfer Certificate.
Except as provided in Clause 26.17, no assignment or transfer of any right or obligation of a Lender under any Finance Document is binding on, or effective in relation to, the Borrower, any Security Party, the Agent or the Security Trustee unless it is effected, evidenced or perfected by a Transfer Certificate.
|
26.6
|
Lender re-organisation; waiver of Transfer Certificate.
However, if a Lender enters into any merger, de-merger or other reorganisation as a result of which all its rights or obligations vest in another person (the “
successor
”), the Agent may, if it sees fit, by notice to the successor and the Borrower and the Security Trustee waive the need for the execution and delivery of a Transfer Certificate; and, upon service of the Agent's notice, the successor shall become a Lender with the same Commitment and Contribution as were held by the predecessor Lender.
|
26.7
|
Effect of Transfer Certificate.
A Transfer Certificate takes effect in accordance with English law as follows:
|
(a)
|
to the extent specified in the Transfer Certificate, all rights and interests (present, future or contingent) which the Transferor Lender has under or by virtue of the Finance Documents are assigned to the Transferee Lender absolutely, free of any defects in the Transferor Lender's title and of any rights or equities which the Borrower or any Security Party had against the Transferor Lender;
|
(b)
|
the Transferor Lender's Commitment is discharged to the extent specified in the Transfer Certificate;
|
(c)
|
the Transferee Lender becomes a Lender with the Contribution previously held by the Transferor Lender and a Commitment of an amount specified in the Transfer Certificate;
|
(d)
|
the Transferee Lender becomes bound by all the provisions of the Finance Documents which are applicable to the Lenders generally, including those about pro-rata sharing and the exclusion of liability on the part of, and the indemnification of, the Agent and the
|
|
Security Trustee and, to the extent that the Transferee Lender becomes bound by those provisions (other than those relating to exclusion of liability), the Transferor Lender ceases to be bound by them;
|
(e)
|
any part of the Loan which the Transferee Lender advances after the Transfer Certificate's effective date ranks in point of priority and security in the same way as it would have ranked had it been advanced by the transferor, assuming that any defects in the transferor's title and any rights or equities of the Borrower or any Security Party against the Transferor Lender had not existed;
|
(f)
|
the Transferee Lender becomes entitled to all the rights under the Finance Documents which are applicable to the Lenders generally, including but not limited to those relating to the Majority Lenders and those under Clause 5.7 and Clause 20, and to the extent that the Transferee Lender becomes entitled to such rights, the Transferor Lender ceases to be entitled to them; and
|
(g)
|
in respect of any breach of a warranty, undertaking, condition or other provision of a Finance Document or any misrepresentation made in or in connection with a Finance Document
, the Transferee Lender shall be entitled to recover damages by reference to the loss incurred by it as a result of the breach or misrepresentation, irrespective of whether the original Lender would have incurred a loss of that kind or amount.
|
|
The rights and equities of the Borrower or any Security Party referred to above include, but are not limited to, any right of set off and any other kind of cross-claim.
|
26.8
|
Maintenance of register of Lenders
. During the Security Period the Agent shall maintain a register in which it shall record the name, Commitment, Contribution and administrative details (including the lending office) from time to time of each Lender holding a Transfer Certificate and the effective date (in accordance with Clause 26.4) of the Transfer Certificate; and the Agent shall make the register available for inspection by any Lender, the Security Trustee and the Borrower during normal banking hours, subject to receiving at least 3 Business Days’ prior notice.
|
26.9
|
Reliance on register of Lenders.
The entries on that register shall, in the absence of manifest error, be conclusive in determining the identities of the Lenders and the amounts of their Commitments and Contributions and the effective dates of Transfer Certificates and may be relied upon by the Agent and the other parties to the Finance Documents for all purposes relating to the Finance Documents.
|
26.10
|
Authorisation of Agent to sign Transfer Certificates.
The Borrower, the Security Trustee, each Lead Arranger and each Lender irrevocably authorise the Agent to sign Transfer Certificates on its behalf.
|
26.11
|
Registration fee.
In respect of any Transfer Certificate, the Agent shall be entitled to recover a registration fee of $3,500 from the Transferor Lender or (at the Agent's option) the Transferee Lender.
|
26.12
|
Sub-participation; subrogation assignment.
A Lender may sub-participate all or any part of its rights and/or obligations under or in connection with the Finance Documents without the consent of, or any notice to, the Borrower, any Security Party, the Agent or the Security Trustee; and the Lenders may assign, in any manner and terms agreed by the Majority Lenders, the Agent and the Security Trustee, all or any part of those rights to an insurer or surety who has become subrogated to them.
|
26.13
|
Disclosure of information.
A Lender may disclose to a potential Transferee Lender or sub-participant any information which the Lender has received in relation to the Borrower, any Security Party or their affairs under or in connection with any Finance
|
|
Document, unless the information is clearly of a confidential nature. Without prejudice to the foregoing, a Lender may disclose any financial information delivered by the Borrower hereunder and such other information in relation to the Borrower and its subsidiaries which it may obtain pursuant to this Agreement to authorities in any other countries where that Lender, its subsidiaries, branches and representative officers or any other entity of that Lender are represented:
|
(a)
|
where such authority has requested information from the relevant entity of that Lender; and
|
(b)
|
such disclosure is required by law, regulation or administrative order in order for that Lender to meet its legal requirements relating to reduction and/or prevention of money laundering, terrorism or corruption.
|
26.14
|
Change of lending office.
A Lender may change its lending office by giving notice to the Agent and the change shall become effective on the later of:
|
(a)
|
the date on which the Agent receives the notice; and
|
(b)
|
the date, if any, specified in the notice as the date on which the change will come into effect.
|
26.15
|
Notification.
On receiving such a notice, the Agent shall notify the Borrower and the Security Trustee; and, until the Agent receives such a notice, it shall be entitled to assume that a Lender is acting through the lending office of which the Agent last had notice.
|
26.16
|
Replacement of Reference Bank.
If any Reference Bank ceases to be a Lender or is unable on a continuing basis to supply quotations for the purposes of Clause 5 then, unless the Borrower, the Agent and the Majority Lenders otherwise agree, the Agent, acting on the instructions of the Majority Lenders, and after consulting the Borrower, shall appoint another bank (whether or not a Lender) to be a replacement Reference Bank; and, when that appointment comes into effect, the first-mentioned Reference Bank's appointment shall cease to be effective.
|
26.17
|
Security over Lenders’ rights.
In addition to the other rights provided to Lenders under this Clause 26, each Lender may without consulting with or obtaining consent from the Borrower or any Security Party, at any time charge, assign or otherwise create a Security Interest in or over (whether by way of collateral or otherwise) all or any of its rights under any Finance Document to secure obligations of that Lender including, without limitation:
|
(a)
|
any charge, assignment or other Security Interest to secure obligations to a federal reserve or central bank; and
|
(b)
|
in the case of any Lender which is a fund, any charge, assignment or other Security Interest granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by that Lender as security for those obligations or securities;
|
(i)
|
release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or Security Interest for the Lender as a party to any of the Finance Documents; or
|
(ii)
|
require any payments to be made by the Borrower or any Security Party or grant to any person any more extensive rights than those required to be made or granted to the relevant Lender under the Finance Documents.
|
27
|
VARIATIONS AND WAIVERS
|
27.1
|
Variations, waivers etc. by Majority Lenders.
Subject to Clause 27.2, a document shall be effective to vary, waive, suspend or limit any provision of a Finance Document, or any Creditor Party's rights or remedies under such a provision or the general law, only if the document is signed, or specifically agreed to by fax, by the Borrower, by the Agent on behalf of the Majority Lenders, by the Agent and the Security Trustee in their own rights, and, if the document relates to a Finance Document to which a Security Party is party, by that Security Party.
|
27.2
|
Variations, waivers etc. requiring agreement of all Lenders.
However, as regards the following, Clause 27.1 applies as if the words “by the Agent on behalf of the Majority Lenders” were replaced by the words “by or on behalf of every Lender”:
|
(a)
|
a reduction in the Margin or a change to the definition of “Mandatory” Cost or to Schedule 6;
|
(b)
|
a postponement to the date for, or a reduction in the amount of, any payment of principal, interest, fees or other sum payable under this Agreement;
|
(c)
|
an increase in any Lender's Commitment;
|
(d)
|
a change to the definition of “
Majority Lenders
”;
|
(e)
|
a change to Clause 3 or this Clause 27;
|
(f)
|
any release of, or material variation to, a Security Interest, guarantee, indemnity or subordination arrangement set out in a Finance Document; and
|
(g)
|
any other change or matter as regards which this Agreement or another Finance Document expressly provides that each Lender's consent is required.
|
27.3
|
Exclusion of other or implied variations.
Except for a document which satisfies the requirements of Clauses 27.1 and 27.2, no document, and no act, course of conduct, failure or neglect to act, delay or acquiescence on the part of the Creditor Parties or any of them (or any person acting on behalf of any of them) shall result in the Creditor Parties or any of them (or any person acting on behalf of any of them) being taken to have varied, waived, suspended or limited, or being precluded (permanently or temporarily) from enforcing, relying on or exercising:
|
(a)
|
a provision of this Agreement or another Finance Document; or
|
(b)
|
an Event of Default; or
|
(c)
|
a breach by the Borrower or a Security Party of an obligation under a Finance Document or the general law; or
|
(d)
|
any right or remedy conferred by any Finance Document or by the general law,
|
|
and there shall not be implied into any Finance Document any term or condition requiring any such provision to be enforced, or such right or remedy to be exercised, within a certain or reasonable time.
|
28
|
NOTICES
|
28.1
|
General.
Unless otherwise specifically provided, any notice under or in connection with any Finance Document shall be given by letter or fax and references in the Finance
|
|
Documents to written notices, notices in writing and notices signed by particular persons shall be construed accordingly.
|
28.2
|
Addresses for communications.
A notice by letter of fax shall be sent:
|
(a)
|
to the Borrower:
|
c/o Capital Ship Management Corp.
|
3 Iassonos Street
|
||
185 37Piraeus
|
||
Greece
|
||
Fax No: +30 210 4285 679
|
||
Attn: Chief Financial Officer of Crude Carriers Corp.
|
||
(b)
|
to a Lender:
|
At the address below its name in Schedule 1 or (as the
|
case may require) in the relevant Transfer Certificate.
|
||
(c)
|
to a Lead Arranger:
|
At the address for that party in its capacity as
|
a Lender
|
||
(d)
|
to the Agent or the Security Trustee:
|
Nordea Bank Finland Plc, London Branch
|
8th Floor
|
||
City Place House
|
||
55 Basinghall Street
|
||
London EC2V 5NB
|
||
Fax No: +44 (0) 20 7726 9188
|
||
Attn: Shipping Department
|
|
or to such other address as the relevant party may notify the Agent or, if the relevant party is the Agent or the Security Trustee, the Borrower, the Lenders, the Lead Arrangers and the Security Parties.
|
28.3
|
Effective date of notices.
Subject to Clauses 28.4 and 28.5:
|
(a)
|
a notice which is delivered personally or posted shall be deemed to be served, and shall take effect, at the time when it is delivered; and
|
(b)
|
a notice which is sent by fax shall be deemed to be served, and shall take effect, 2 hours after its transmission is completed.
|
28.4
|
Service outside business hours.
However, if under Clause 28.3 a notice would be deemed to be served:
|
(a)
|
on a day which is not a business day in the place of receipt; or
|
(b)
|
on such a business day, but after 5 p.m. local time,
|
|
the notice shall (subject to Clause 28.5) be deemed to be served, and shall take effect, at 9 a.m. on the next day which is such a business day.
|
28.5
|
Illegible notices.
Clauses 28.3 and 28.4 do not apply if the recipient of a notice notifies the sender within 1 hour after the time at which the notice would otherwise be deemed to be served that the notice has been received in a form which is illegible in a material respect.
|
28.6
|
Valid notices.
A notice under or in connection with a Finance Document shall not be invalid by reason that its contents or the manner of serving it do not comply with the requirements of this Agreement or, where appropriate, any other Finance Document under which it is served if:
|
(a)
|
the failure to serve it in accordance with the requirements of this Agreement or other Finance Document, as the case may be, has not caused any party to suffer any significant loss or prejudice; or
|
(b)
|
in the case of incorrect and/or incomplete contents, it should have been reasonably clear to the party on which the notice was served what the correct or missing particulars should have been.
|
28.7
|
Electronic communication.
Any communication to be made between the Agent and a Lender under or in connection with the Finance Documents may be made by electronic mail or other electronic means, if the Agent and the relevant Lender:
|
(a)
|
agree that, unless and until notified to the contrary, this is to be an accepted form of communication;
|
(b)
|
notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and
|
(c)
|
notify each other of any change to their respective addresses or any other such information supplied to them.
|
28.8
|
Any electronic communication made between the Agent and a Lender will be effective only when actually received in readable form and, in the case of any electronic communication made by a Lender to the Agent, only if it is addressed in such a manner as the Agent shall specify for this purpose.
|
28.9
|
English language.
Any notice under or in connection with a Finance Document shall be in English.
|
28.10
|
Meaning of “notice”.
In this Clause 28, “
notice
” includes any demand, consent, authorisation, approval, instruction, waiver or other communication.
|
29
|
SUPPLEMENTAL
|
29.1
|
Rights cumulative, non-exclusive.
The rights and remedies which the Finance Documents give to each Creditor Party are:
|
(a)
|
cumulative;
|
(b)
|
may be exercised as often as appears expedient; and
|
(c)
|
shall not, unless a Finance Document explicitly and specifically states so, be taken to exclude or limit any right or remedy conferred by any law.
|
29.2
|
Severability of provisions.
If any provision of a Finance Document is or subsequently becomes void, unenforceable or illegal, that shall not affect the validity, enforceability or legality of the other provisions of that Finance Document or of the provisions of any other Finance Document.
|
29.3
|
Counterparts.
A Finance Document may be executed in any number of counterparts.
|
29.4
|
Third Party rights.
A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Agreement.
|
30
|
LAW AND JURISDICTION
|
30.1
|
English law.
This Agreement and any non-contractual obligations arising out of or in connection with it shall be governed by, and construed in accordance with, English law.
|
30.2
|
Exclusive English jurisdiction.
Subject to Clause 30.3, the courts of England shall have exclusive jurisdiction to settle any Dispute.
|
30.3
|
Choice of forum for the exclusive benefit of the Creditor Parties.
Clause 30.2 is for the exclusive benefit of the Creditor Parties, each of which reserves the right:
|
(a)
|
to commence proceedings in relation to any Dispute in the courts of any country other than England and which have or claim jurisdiction to that Dispute; and
|
(b)
|
to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in England or without commencing proceedings in England.
|
|
The Borrower shall not commence any proceedings in any country other than England in relation to a Dispute.
|
30.4
|
Process agent.
The Borrower irrevocably appoints Curzon Maritime Limited at its principal office for the time being, presently at St. Clare House, 30/33 Minories, London EC3N 1DJ, England, to act as its agent to receive and accept on its behalf any process or other document relating to any proceedings in the English courts which are connected with a Dispute.
|
30.5
|
Creditor Party rights unaffected.
Nothing in this Clause 30 shall exclude or limit any right which any Creditor Party may have (whether under the law of any country, an international convention or otherwise) with regard to the bringing of proceedings, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction.
|
30.6
|
Meaning of “proceedings”.
In this Clause 30, “
proceedings
” means proceedings of any kind, including an application for a provisional or protective measure and a “
Dispute
” means any dispute arising out of or in connection with this Agreement (including a dispute relating to the existence, validity or termination of this Agreement) or any non-contractual obligation arising out of or in connection with this Agreement.
|
Lender
|
Lending Office
|
Commitment
(US Dollars)
|
Nordea Bank Finland Plc, London Branch
|
8th Floor
City Place House
55 Basinghall Street
London EC2V 5NB
|
150,000,000
|
Skandinaviska Enskilda Banken AB (publ)
|
SE-106 40 Stockholm, Sweden
|
50,000,000
|
1
|
We refer to the loan agreement (the “
Loan Agreement
”) dated 22 April 2010 (as amended and restated by an amending and restating agreement dated [
l
] 2010) and made between ourselves, as Borrower, the Lenders referred to therein, the Lead Arrangers referred to therein, and yourselves as Bookrunner, as Agent and as Security Trustee in connection with an acquisition facility of up to US$190,000,000 and a working capital facility of up to US$10,000,000. Terms defined in the Loan Agreement have their defined meanings when used in this Drawdown Notice.
|
2
|
We request to borrow under the [Acquisition Facility][Working Capital Facility] as follows:
|
(a)
|
Amount: US$[
l
];
|
(b)
|
Drawdown Date: [
l
]; [and]
|
(c)
|
[Duration of the first Interest Period shall be [
l
] months; and]
|
(d)
|
Payment instructions: [
l
].
|
3
|
We represent and warrant that:
|
(a)
|
the representations and warranties in Clause 10 of the Loan Agreement would remain true and not misleading if repeated on the date of this notice with reference to the circumstances now existing; and
|
(b)
|
no Event of Default or Potential Event of Default has occurred or will result from the borrowing of the Loan.
|
4
|
This notice cannot be revoked without the prior consent of the Majority Lenders.
|
1
|
A duly executed original of each Finance Document (and of each document required to be delivered by each Finance Document) other than those referred to in Part B.
|
2
|
Copies of the certificate of incorporation (if applicable) and constitutional documents of the Borrower.
|
3
|
Copies of resolutions of the shareholders (if advised by the provider of any legal opinion to be issued to the Agent) and directors of the Borrower authorising the execution of each of the Finance Documents to which the Borrower is a party and authorising named officers to give the Drawdown Notices and other notices under this Agreement.
|
4
|
The original of any power of attorney under which any Finance Document is executed on behalf of the Borrower.
|
5
|
Copies of all consents which the Borrower requires to enter into, or make any payment under, any Finance Document.
|
6
|
Documentary evidence that the agent for service of process named in Clause 30 has accepted its appointment on behalf of the Borrower.
|
7
|
Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of the Marshall Islands and such other relevant jurisdictions as the Agent may require.
|
8
|
The capitalisation and organisational structure of the Borrower and its subsidiaries (including the tax structure) being satisfactory in form, scope and substance to the Agent, in its reasonable assessment.
|
9
|
The Agent has received valuations establishing the market value (determined as provided in Clause 15.3 on the basis of valuations which are no older than 30 days prior to the date such valuations are provided to the Agent) of each Initial Ship.
|
10
|
Such documentation and other evidence as is reasonably requested by the Agent or any Lender in order to carry out and be satisfied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated under this Agreement.
|
11
|
If the Agent so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the Agent.
|
1
|
Evidence satisfactory to the Agent that the relevant Ship is:
|
(a)
|
a crude oil tanker;
|
(b)
|
between 80,000 dwt and 310,000 dwt;
|
(c)
|
no greater than 5 years in age on the Drawdown Date; and
|
(d)
|
otherwise acceptable to the Agent in all respects.
|
2
|
The structure, terms and conditions relating to the purchase of the relevant Ship being satisfactory in form and substance to the Agent, in its reasonable assessment.
|
3
|
The Lenders being satisfied that since the most recent financial statements of the Borrower included in the Form F-1 Registration Statement under the Securities Act 1933 which the Borrower has filed with the Securities and Exchange Commission, nothing has occurred (and no Creditor Party has become aware of any condition or circumstance not previously known to it) which the Lenders shall determine in their reasonable opinion has had, or could reasonably be expected to have, a Material Adverse Effect.
|
4
|
Duly executed originals of:
|
(a)
|
the Guarantee from the relevant Guarantor;
|
(b)
|
the Mortgage of the relevant Ship;
|
(c)
|
the General Assignment in relation to the relevant Ship;
|
(d)
|
the Charter Assignment (if any) in relation to the relevant Ship;
|
(e)
|
the Account Security Deed for the Earnings Account for the relevant Ship; and
|
(f)
|
the Shares Pledge(s) in respect of all of the shares of the relevant Guarantor,
|
5
|
Copies of the certificate of incorporation (if applicable) and constitutional documents of the relevant Guarantor and the Borrower.
|
6
|
Copies of resolutions of the shareholders (if advised by the provider of any legal opinion to be issued to the Agent) and directors of the relevant Guarantor and also of the directors of the Borrower in each case authorising the execution of each of the Finance Documents to which that person is a party and ratifying the execution of any Purchase Contract to which that person is a party.
|
7
|
The original of any power of attorney under which any Finance Document is executed on behalf of the relevant Guarantor or the Borrower.
|
8
|
Copies of all consents which the relevant Guarantor or the Borrower requires to enter into, or make any payment under, any Finance Document or any Purchase Contract.
|
9
|
Copies of the Purchase Contract for the relevant Ship and of all documents signed or issued by any party to that Purchase Contract under or in connection with that Purchase Contract.
|
10
|
Such documentary evidence as the Agent and its legal advisers may require in relation to the due authorisation and execution by each party to the Purchase Contract for the relevant Ship of that Purchase Contract and of all documents to be executed by any such party under that Purchase Contract.
|
11
|
Documentary evidence that:
|
(a)
|
the relevant Ship has been unconditionally delivered by the Seller of the relevant Ship to, and accepted by, the relevant Guarantor under the Purchase Contract for the relevant Ship, and the full purchase price payable under that Purchase Contract (if any, in addition to the part to be financed by the Advance) has been duly paid;
|
(b)
|
the relevant Ship is definitively and permanently (or, in the case of Panamanian flag, provisionally) registered in the name of the relevant Guarantor under an Approved Flag;
|
(c)
|
the relevant Ship is in the absolute and unencumbered ownership of the relevant Guarantor save as contemplated by the Finance Documents;
|
(d)
|
the relevant Ship maintains a class acceptable to the Majority Lenders with a class society acceptable to the Majority Lenders free of all overdue recommendations and conditions of such Classification Society;
|
(e)
|
the Mortgage of the relevant Ship has been duly registered/recorded against the relevant Ship as a valid first preferred/priority ship mortgage governed by the laws of the flag of the relevant Ship in accordance with those laws; and
|
(f)
|
the relevant Ship is insured in accordance with the provisions of this Agreement and all requirements therein in respect of insurances have been complied with.
|
12
|
Documents establishing that the relevant Ship will, as from the Drawdown Date, be managed by the Approved Manager for that Ship on terms acceptable to the Lenders, together with:
|
(a)
|
a letter of undertaking executed by that Approved Manager in favour of the Agent in the terms required by the Agent agreeing certain matters in relation to the management of the relevant Ship and subordinating the rights of that Approved Manager against the relevant Ship and the relevant Guarantor to the rights of the Creditor Parties under the Finance Documents; and
|
(b)
|
copies of that Approved Manager’s Document of Compliance and of the relevant Ship’s Safety Management Certificate (together with any other details of the applicable safety management system which the Agent requires) and ISSC.
|
13
|
The originals of any mandates or other documents required in connection with the opening or operation of the Earnings Account for the relevant Ship.
|
14
|
Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of the jurisdiction of incorporation of each of the relevant Guarantor and the Borrower, the flag governing the Mortgage of the relevant Ship and such other relevant jurisdictions as the Agent may require.
|
15
|
A favourable opinion from an independent insurance consultant acceptable to the Agent on such matters relating to the insurances for the relevant Ship as the Agent may require.
|
16
|
The Agent has received valuations establishing the market value (determined as provided in Clause 15.3 on the basis of valuations which are no older than 30 days before the Drawdown Date) of the relevant Ship and the other Ships.
|
17
|
Documentary evidence that the agent for service of process named in any Finance Document executed by the relevant Guarantor or the Borrower has accepted its appointment on behalf of that person.
|
18
|
If the Agent so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the Agent.
|
|
Each of the documents specified in paragraphs 2, 3 and 5 of Part A and every other copy document delivered under this Schedule shall be certified as a true and up to date copy by a director or the secretary (or equivalent officer) of the Borrower or (as the case may be) the relevant Security Party.
|
To:
|
Nordea Bank Finland Plc, London Branch for itself and for and on behalf of the Borrower, each Security Party, the Security Trustee, each Lead Arranger and each Lender, as defined in the Loan Agreement referred to below.
|
1
|
This Certificate relates to a Loan Agreement (the “
Loan Agreement
”) dated 22 April 2010 (as amended and restated by an amending and restating agreement dated [
l
] 2010) and made between (1) Crude Carriers Corp., as borrower (the “
Borrower
”), (2) the banks and financial institutions named therein, as lenders (together in such capacity, the “
Lenders
”), (3) the banks and financial institutions named therein, as lead arrangers (together in such capacity, the “
Lead Arrangers
”), (4) Nordea Bank Finland Plc, London Branch, as agent (in such capacity, the “
Agent
”) and (5) Nordea Bank Finland Plc, London Branch, as security trustee (in such capacity, the “
Security Trustee
”) for an acquisition facility of up to US$190,000,000 and a working capital facility of up to US$10,000,000.
|
2
|
In this Certificate, terms defined in the Loan Agreement shall, unless the contrary intention appears, have the same meanings and:
|
|
“
Relevant Parties
” means the Agent, the Borrower, each Security Party, the Security Trustee, each Lead Arranger and each Lender;
|
|
“
Transferor
” means [
full name
] of [
lending office
]; and
|
|
“
Transferee
” means [
full name
] of [
lending office
].
|
3
|
The effective date of this Certificate is [
l
]
Provided that
this Certificate shall not come into effect unless it is signed by the Agent on or before that date.
|
4
|
The Transferor assigns to the Transferee absolutely all rights and interests (present, future or contingent) which the Transferor has as Lender under or by virtue of the Loan Agreement and every other Finance Document in relation to [
l
] per cent. of its Contribution, which percentage represents $[
l
].
|
5
|
By virtue of this Transfer Certificate and Clause 26 of the Loan Agreement, the Transferor is discharged [entirely from its Commitment which amounts to $[
l
]] [from [
l
] per cent. of its Commitment, which percentage represents $[
l
]] and the Transferee acquires a Commitment of $[
l
].
|
6
|
The Transferee undertakes with the Transferor and each of the Relevant Parties that the Transferee will observe and perform all the obligations under the Finance Documents
|
|
which Clause 26 of the Loan Agreement provides will become binding on it upon this Certificate taking effect.
|
7
|
The Agent, at the request of the Transferee (which request is hereby made) accepts, for the Agent itself and for and on behalf of every other Relevant Party, this Certificate as a Transfer Certificate taking effect in accordance with Clause 26 of the Loan Agreement.
|
8
|
The Transferor:
|
(a)
|
warrants to the Transferee and each Relevant Party that:
|
(i)
|
the Transferor has full capacity to enter into this transaction and has taken all corporate action and obtained all consents which are in connection with this transaction; and
|
(ii)
|
this Certificate is valid and binding as regards the Transferor;
|
(b)
|
warrants to the Transferee that the Transferor is absolutely entitled, free of encumbrances, to all the rights and interests covered by the assignment in paragraph 4; and
|
(c)
|
undertakes with the Transferee that the Transferor will, at its own expense, execute any documents which the Transferee reasonably requests for perfecting in any relevant jurisdiction the Transferee's title under this Certificate or for a similar purpose.
|
9
|
The Transferee:
|
(a)
|
confirms that it has received a copy of the Loan Agreement and each other Finance Document;
|
(b)
|
agrees that it will have no rights of recourse on any ground against either the Transferor, the Agent, the Security Trustee, any Lead Arranger or any Lender in the event that:
|
(i)
|
any of the Finance Documents prove to be invalid or ineffective,
|
(ii)
|
the Borrower or any Security Party fails to observe or perform its obligations, or to discharge its liabilities, under any of the Finance Documents; and
|
(iii)
|
it proves impossible to realise any asset covered by a Security Interest created by a Finance Document, or the proceeds of such assets are insufficient to discharge the liabilities of the Borrower or Security Party under the Finance Documents;
|
(c)
|
agrees that it will have no rights of recourse on any ground against the Agent, the Security Trustee, any Lead Arranger or any Lender in the event that this Certificate proves to be invalid or ineffective;
|
(d)
|
warrants to the Transferor and each Relevant Party that:
|
(i)
|
it has full capacity to enter into this transaction and has taken all corporate action and obtained all consents which it needs to take or obtain in connection with this transaction; and
|
(ii)
|
this Certificate is valid and binding as regards the Transferee; and
|
(e)
|
confirms the accuracy of the administrative details set out below regarding the Transferee.
|
10
|
The Transferor and the Transferee each undertake with the Agent and the Security Trustee severally, on demand, fully to indemnify the Agent and/or the Security Trustee in respect of any claim, proceeding, liability or expense (including all legal expenses) which they or either of them may incur in connection with this Certificate or any matter arising out of it, except such as are shown to have been mainly and directly caused by the gross and culpable negligence or dishonesty of the Agent's or the Security Trustee's own officers or employees.
|
11
|
The Transferee shall repay to the Transferor on demand so much of any sum paid by the Transferor under paragraph 10 as exceeds one-half of the amount demanded by the Agent or the Security Trustee in respect of a claim, proceeding, liability or expense which was not reasonably foreseeable at the date of this Certificate; but nothing in this paragraph shall affect the liability of each of the Transferor and the Transferee to the Agent or the Security Trustee for the full amount demanded by it.
|
[
Name of Transferor
]
|
[
Name of Transferee
]
|
By:
|
By:
|
Date:
|
Date:
|
Note
:
|
This Transfer Certificate alone may not be sufficient to transfer a proportionate share of the Transferor's interest in the security constituted by the Finance Documents in the Transferor's or Transferee's jurisdiction. It is the responsibility of each Lender to ascertain whether any other documents are required for this purpose.
|
(a)
|
Clause 11.16(a); the ratio of EBITDA to Net Interest Expense shall be no less than 3.0:1.0: [not] complied;
|
(b)
|
Clause 11.16(b); the aggregate of Cash and Cash Equivalents shall be equal to or greater than an amount equal to $1,000,000 multiplied by the number of Ships subject to a Mortgage: [not] complied; and
|
(c)
|
Clause 11.16(c); the ratio of Stockholders Equity to Total Assets shall be no less than 30:100: [not] complied.
|
1
|
The Mandatory Cost is an addition to the interest rate to compensate Lenders for the cost of compliance with (a) the requirements of the Financial Services Authority (or any other authority which replaces all or any of its functions) or (b) the requirements of the European Central Bank.
|
2
|
On the first day of each Interest Period (or as soon as possible thereafter) the Agent shall calculate, as a percentage rate, a rate (the
“Additional Cost Rate”
) for each Lender, in accordance with the paragraphs set out below. The Mandatory Cost will be calculated by the Agent as a weighted average of the Lenders’ Additional Cost Rates (weighted in proportion to the percentage participation of each Lender in the relevant Advance) and will be expressed as a percentage rate per annum.
|
3
|
The Additional Cost Rate for any Lender lending from a lending office in a Participating Member State will be the percentage notified by that Lender to the Agent. This percentage will be certified by that Lender in its notice to the Agent to be its reasonable determination of the cost (expressed as a percentage of that Lender’s participation in all Advances made from that lending office) of complying with the minimum reserve requirements of the European Central Bank in respect of loans made from that lending office.
|
4
|
The Additional Cost Rate for any Lender lending from a lending office in the United Kingdom will be calculated by the Agent as follows:
|
E x
0.01
300
|
per cent. per annum
|
where:
|
||
E
|
is designed to compensate Lenders for amounts payable under the Fees Rules and is calculated by the Agent as being the average of the most recent rates of charge supplied by the Reference Banks to the Agent pursuant to paragraph 6 below and expressed in pounds per £1,000,000.
|
5
|
For the purposes of this Schedule:
|
(a)
|
“
Eligible Liabilities
” and “
Special Deposits
” have the meanings given to them from time to time under or pursuant to the Bank of England Act 1998 or (as may be appropriate) by the Bank of England;
|
(b)
|
“
Fees Rules
” means the rules on periodic fees contained in the FSA Supervision Manual or such other law or regulation as may be in force from time to time in respect of the payment of fees for the acceptance of deposits;
|
(c)
|
“
Fee Tariffs
” means the fee tariffs specified in the Fees Rules under the activity group A.1 Deposit acceptors (ignoring any minimum fee or zero rated fee required pursuant to the Fees Rules but taking into account any applicable discount rate);
|
(d)
|
“
Participating Member State
” means any member state of the European Union that adopts or has adopted the euro as its lawful currency in accordance with legislation of the European Union relating to European Monetary Union; and
|
(e)
|
“
Tariff Base
” has the meaning given to it in, and will be calculated in accordance with, the Fees Rules.
|
6
|
If requested by the Agent, each Reference Bank shall, as soon as practicable after publication by the Financial Services Authority, supply to the Agent, the rate of charge payable by that Reference Bank to the Financial Services Authority pursuant to the Fees Rules in respect of the relevant financial year of the Financial Services Authority (calculated for this purpose by that Reference Bank as being the average of the Fee Tariffs applicable to that Reference Bank for that financial year) and expressed in pounds per £1,000,000 of the Tariff Base of that Reference Bank.
|
7
|
Each Lender shall supply any information required by the Agent for the purpose of calculating its Additional Cost Rate. In particular, but without limitation, each Lender shall supply the following information in writing on or prior to the date on which it becomes a Lender:
|
8
|
The rates of charge of each Reference Bank for the purpose of E above shall be determined by the Agent based upon the information supplied to it pursuant to paragraph 6 above and on the assumption that, unless a Lender notifies the Agent to the contrary, each Lender’s obligations in relation to cash ratio deposits and special Deposits are the same as those of a typical bank from its jurisdiction of incorporation with a lending office in the same jurisdiction as its lending office.
|
9
|
The Agent shall have no liability to any person if such determination results in an Additional Cost Rate which over or under compensates any Lender and shall be entitled to assume that the information provided by any Lender or Reference Bank pursuant to paragraphs 3, 6 and 7 above is true and correct in all respects.
|
10
|
The Agent shall distribute the additional amounts received as a result of the Mandatory Cost to the Lenders on the basis of the Additional Cost Rate for each Lender based on the information provided by each Lender and each Reference Bank pursuant to paragraphs 3, 6 and 7 above.
|
11
|
Any determination by the Agent pursuant to this Schedule in relation to a formula, the Mandatory Cost, an Additional Cost Rate or any amount payable to a Lender shall, in the absence of manifest error, be conclusive and binding on all parties.
|
12
|
The Agent may from time to time, after consultation with the Borrower and the Lenders, determine and notify to all parties any amendments which are required to be made to this Schedule in order to comply with any change in law, regulation or any requirements from time to time imposed by the Financial Services Authority or the European Central Bank (or, in any case, any other authority which replaces all or any of its functions) and any such determination shall, in the absence of manifest error, be conclusive and binding on all parties.
|
CRUDE CARRIERS CORP.
By:
/s/ Gerasimos G. Kalogiratos
Name: Gerasimos G. Kalogiratos
Title: CFO
|
|
CRUDE CARRIERS INVESTMENTS CORP.
By:
/s/ Evangelos G. Bairactaris
Name: Evangelos G. Bairactaris
Title: Director
|
MEMORANDUM OF AGREEMENT
Dated: 19th April, 2010
|
Norwegian Shipbrokers’ Association’s Memo-randum of Agreement for sale and purchase of ships. Adopted by the Baltic and International Maritime Council (BIMCO) in 1956.
Code-name
SALEFORM 1993
Revised 1966, 1983 and 1986/87.
|
1.
|
Purchase Price
US$ 66,200,000.-- (in words : United States Dollars Sixty-Six Million Two Hundred Thousand) cash on delivery.
|
16
|
2.
|
Deposit
|
17
|
As security for the correct fulfilment of this Agreement the Buyers shall pay a deposit of 10%
|
18
|
(ten per cent) of the Purchase Price within 3 (three) banking days
from the date of this
|
19
|
Agreement
after both parties have signed a faxed copy of this Memorandum of Agreement - which to be fax-signed within one business day after all terms and conditions have been agreed and an escrow agreement (the “Escrow Agreement”) has been signed between Sellers, Buyers and Frachtcontor Junge & Co. GmbH (the “Escrow Agrent”). This deposit shall be placed with the following bank account in the name of the Escrow Agent
|
20
|
M.M. Warburg Bank Hamburg (the “Bank”)
BIC/SWIFT: WBWC DE HH
Account No: 1001 1876 07
IBAN: DE76 2012 0100 1001 1876 07
Beneficiary: Frachtcontor Junge & Co., Ballindamm 17, 20095 Hamburg
|
Reference: Sale MT “TANGO” Deposit
|
|
and held by this Escrow Agent in the above interest bearing account on account of the Sellers and the Buyers, to be released in accordance
|
21
|
with joint written instructions of the Sellers and the Buyers or as otherwise provided in the Escrow Agreement. Interest
, if any
, to be credited to the
|
22
|
Buyers.
|
23
|
24
|
3.
|
Payment
|
25
|
The deposit together with 90 percent balance
said
of the Purchase Price plus any additional payments due under this Memorandum of Agreement (such as payment for bunkers/lubricating oils, etc.)
shall
to be released/paid in full free of any bank charges to Sellers’ nominated German Bank
|
26
|
Norddeutsche Landesbank, Hannover/Germany
Swift Code : NOLADE2XXX
account to be advised
|
|
on delivery of the vessel against Protocol of Delivery signed by both the Sellers and the Buyers, Bill of Sale and all other delivery documents reasonably required for the valid transfer of ownership and the Buyers’ registration of the Vessel, but not later than 3 banking days after the vessel is in every respect
|
27
|
physically ready for delivery in accordance with the terms and conditions of this Agreement and
|
28
|
Notice of Readiness has been given in accordance with Clause 5.
|
29
|
4.
|
Inspections
|
30
|
a)*
|
The Buyers have waived to inspect
ed
and accepted the Vessel’s classification records without inspection.
The Buyers
|
31
|
have also inspected the Vessel at/in on
|
32
|
|
and have accepted the Vessel following this inspection and the sale is outright and definite,
|
33
|
|
subject only to the terms and conditions of this Agreement.
|
34
|
|
The Buyers have accepted the Vessel without inspection.
The sale is outright and definite, subject only to the terms and conditions of this Agreement.
|
||
b)*
|
The Buyers shall have the right to inspect the Vessel’s classification records and declare
|
35
|
whether same are accepted or not within.
|
36
|
|
The Sellers shall provide for inspection of the Vessel at/in
|
37
|
|
The Buyers shall undertake the inspection without undue delay to the Vessel. Should the
|
38
|
|
Buyers cause undue delay they shall compensate the Sellers for the losses thereby incurred.
|
39
|
|
The Buyers shall inspect the Vessel without opening up and without cost to the Sellers.
|
40
|
|
During the inspection, the Vessel’s deck and engine log books shall be made available for
|
41
|
|
examination by the Buyers. If the Vessel accepted after such inspection, the sale shall
|
42
|
|
become outright and definite, subject only to the terms and conditions of this Agreement,
|
43
|
|
provided the Sellers receive written notice of acceptance from the Buyers within 72 hours
|
44
|
|
after completion of such inspection.
|
45
|
|
Should notice of acceptance of the Vessel’s classification records and of the Vessel not be
|
46
|
|
received by the Sellers as aforesaid, the deposit together with interest earned shall be
|
47
|
|
released immediately to the Buyers, whereafter this Agreement shall be null and void.
|
48
|
|
*
|
4 a) and 4 b) are alternatives; delete whichever is not applicable, in the absence of deletions,
|
49
|
alternative 4 a) to apply.
|
50
|
5.
|
Notices, time and place of delivery
|
51
|
6.
|
Drydocking/Divers Inspection
|
80
|
In this case, the canceling date specified in clause 5 herein shall be extended by the time necessary for such repairing work up to a maximum of 10 days.
In case the Vessel would be drydocked, the Buyers have the right to clean and paint the Vessel's bottom and other underwater parts during drydock at their time, risk and expenses without interference to the Sellers' works subject to prior consent of the Sellers, which not to be unreasonably
withheld.
In the event that the Sellers' works are completed prior to the Buyers completion of their works, if any, the Sellers have the right to tender a notice of readiness for delivery whilst the Vessel is in drydock and deliver the Vessel in drydock, and the Buyers shall be obliged to take delivery of
the Vessel in accordance with Clause 3 herein, whether the Vessel is in drydock or not.
|
7.
|
Spares/bunkers, etc.
|
154
|
The Sellers shall deliver the Vessel to the Buyers with everything belonging to her on board,
and
on
|
155
|
shore and on order without any additional charge to the Buyers. All spare parts and spare equipment
including spare tail-end shaft(s) and/or spare
|
156
|
propeller(s)/propeller blade(s), if any
, belonging to the Vessel at the date
time
of this Agreement
inspection
used or
|
157
|
unused, whether on board or not shall become the Buyers’ property,
spares on order are to be
|
158
|
excluded.
Forwarding charges, if any, shall be for the Buyers’ account. The Sellers are not required to
|
159
|
replace spare parts
including spare tail-end shaft(s) and spare propeller(s)/propeller blade(s)
which
|
160
|
are taken out of spare and used as replacement prior to delivery, but the replaced items shall be the
|
161
|
property of the Buyers. The radio installation and wireless navigational equipment shall be included in the sale
|
162
|
without extra payment
if they are the property of the Sellers
.
Unused
Broached/unbroached stores and provisions shall be
|
163
|
included in the sale and be taken over by the Buyers without extra payment.
Following spare parts are available covering this Vessel and MT “TANGO” (not each vessel) :
4 spare cylinder liners in Houston and 1 spare electric motor for inertgas plant in Leer.
|
164
|
The Sellers have the right to take ashore crockery, plates, cutlery, linen and other articles bearing the
|
165
|
Sellers’ flag or name, provided they replace same with similar unmarked items. Library, forms, etc.,
|
166
|
exclusively for use in the Sellers’ vessel(s), shall be excluded without compensation. Captain’s,
|
167
|
Officers’ and Crew’s personal effects/belongings including the slop chest are to be excluded from the sale,
|
168
|
as well as the following additional items (including items on hire):
- log books according to Clause 8. hereof.
- certificates which the Sellers have to return to issuing authorities according to law, but the Buyers
to have the right to take photocopies.
- I.S.M. manuals / ISPS manuals.
- Blue Ocean satphone/email installation, which is property of Blue Ocean Wireless Limited,
Unit 8, Fulcum 4, Solent Way, Whiteley, Hampshire, PO15 7FT, UK.
|
169
|
The Buyers shall take over and pay extra only for the remaining bunkers and unused/unbroached lubricating oils in storage tanks and
|
170
|
sealed drums and pay
the
current net market
Sellers’ last invoiced prices less all Sellers’ discounts (and excluding
barging
lighterage expenses) at the port and date
|
171
|
of delivery of the Vessel. Prices are to be supported by invoices/vouchers.
|
172
|
Payment under this Clause shall be made at the same time and place and in the same currency as
|
173
|
the Purchase Price.
|
174
|
|
8.
|
Documentation
|
175
|
The place of closing/payment formalities :
to take place in Sellers’ office or Sellers’ Bank.
|
176
|
In exchange for payment of the Purchase Price the Sellers shall furnish the Buyers with delivery
|
177
|
documents,
namely
: as reasonably required for valid transfer of title and registration under Buyers’ flag of choice. Such documents to be listed in an Addendum to this Memorandum of Agreement, however such agreement is not to prejudice/delay the signing of this Memorandum of Agreement and lodging of the deposit.
|
178
|
a)
|
Legal Bill of Sale in a form recordable in (the country in which the Buyers are
|
179
|
to register the Vessel), warranting that the Vessel is free from all encumbrances, mortgages
|
180
|
|
and maritime liens or any other debts or claims whatsoever, duly notarially attested and
|
181
|
|
legalized by the consul of such country or other competent authority.
|
182
|
|
b)
|
Current Certificate of Ownership issued by the competent authorities of the flag state of
|
183
|
the Vessel.
|
184
|
|
c)
|
Confirmation of Class issued within 72 hours prior to delivery.
|
185
|
d)
|
Current Certificate issued by the competent authorities stating that the Vessel is free from
|
186
|
registered encumbrances.
|
187
|
|
e)
|
Certificate of Deletion of the Vessel from the Vessel’s registry or other official evidence of
|
188
|
deletion appropriate to the Vessel’s registry at the time of delivery, or, in the event that the
|
189
|
|
registry does not as a matter of practice issue such documentation immediately, a written
|
190
|
|
undertaking by the Sellers to effect deletion from the Vessel’s registry forthwith and furnish a
|
191
|
|
Certificate or other official evidence of deletion to the Buyers promptly and latest within 4
|
192
|
|
(four) weeks after the Purchase Price has been paid and the Vessel has been delivered.
|
193
|
|
f)
|
Any such additional documents as may reasonably be required by the competent authorities
|
194
|
for the purpose of registering the Vessel, provided the Buyers notify the Sellers of any such
|
195
|
|
documents as soon as possible after the date of this Agreement.
|
196
|
At the time of delivery the Buyers and Sellers shall sign and deliver to each other a Protocol of
|
197
|
Delivery and Acceptance confirming the date and time of delivery of the Vessel from the Sellers to the
|
198
|
Buyers.
|
199
|
At the time of delivery the Sellers shall hand to the Buyers the classification certificate(s) as well as all
|
200
|
plans, drawings, instruction booklets, nautical publications, charts, copies of all manuals and code-books, as well as oil record books of the last three months etc., which are on board the Vessel. Other certificates which are on board the Vessel shall also
|
201
|
be handed over to the Buyers unless the Sellers are required to retain same, in which case the
|
202
|
Buyers to have the right to take copies. Other technical documentation which may
|
203
|
be in the Sellers’ possession shall be promptly forwarded to the Buyers at their expense, if they so
|
204
|
request. The Sellers may keep the Vessel’s log books but the Buyers to have the right to take
|
205
|
copies of same.
|
206
|
9.
|
Encumbrances
|
207
|
The Sellers warrant that the Vessel, at the time of delivery, is free from all charters, encumbrances, taxes,
|
208
|
mortgages and maritime liens or any other debts or claims whatsoever. The Sellers hereby undertake
|
209
|
to indemnify the Buyers against all consequences of claims made against the Vessel which have
|
210
|
been incurred prior to the time of delivery.
|
211
|
10.
|
Taxes, etc.
|
212
|
Any taxes, fees and expenses in connection with the purchase and registration under the Buyers’ flag
|
213
|
shall be for the Buyers’ account, whereas similar charges in connection with the closing of the Sellers’
|
214
|
register shall be for the Sellers’ account.
|
215
|
11.
|
Condition on delivery
|
216
|
*
|
Notes, if any, in the surveyor’s report which are accepted by the Classification Society
|
228
|
without condition of Class
/recommendation
are not to be taken into account.
|
229
|
12.
|
Name/markings
|
230
|
Upon delivery the Buyers undertake to change the name of the Vessel and alter funnel markings.
|
231
|
13.
|
Buyers’ default
|
232
|
Should the deposit not be paid in accordance with Clause 2, the Sellers have the right to cancel this
|
233
|
Agreement, and they shall be entitled to claim compensation for their losses and for all expenses
|
234
|
incurred together with interest.
|
235
|
Should the Purchase Price not be paid in accordance with Clause 3, the Sellers have the right to
|
236
|
cancel the Agreement, in which case the deposit together with interest earned shall be released to the
|
237
|
Sellers. If the deposit does not cover their loss, the Sellers shall be entitled to claim further
|
238
|
compensation for their losses and for all expenses incurred together with interest.
|
239
|
14.
|
Sellers’ default
|
240
|
Should the Sellers fail to give Notice of Readiness in accordance with Clause 5 a) or fail to be ready
|
241
|
to validly complete a legal transfer by the date stipulated in line 61 the Buyers shall have
|
242
|
the option of cancelling this Agreement provided always that the Sellers shall be granted a
|
243
|
maximum of 3 banking days after Notice of Readiness has been given to make arrangements
|
244
|
for the documentation set out in Clause 8. If after Notice of Readiness has been given but before
|
245
|
the Buyers have taken delivery, the Vessel ceases to be physically ready for delivery and is not
|
246
|
made physically ready again in every respect by the date stipulated in line 61 and new Notice of
|
247
|
Readiness given, the Buyers shall retain their option to cancel. In the event that the Buyers elect
|
248
|
to cancel this Agreement the deposit together with interest earned shall be released to them
|
249
|
immediately.
|
250
|
Should the Sellers fail to give Notice of Readiness by the date stipulated in line 61 or fail to be ready
|
251
|
to validly complete a legal transfer as aforesaid they shall make due compensation to the Buyers for
|
252
|
their loss and for all expenses together with interest if their failure is due to proven
|
253
|
negligence and whether or not the Buyers cancel this Agreement.
|
254
|
15.
|
Buyers’ representatives
|
255
|
17.
|
Blacklisting
|
On delivery the Sellers shall hand to the Buyers a letter of undertaking stating that to the best of Sellers’ knowledge the Vessel under present Ownership is not blacklisted by any nation including the Arab Boycott League in Damascus and the Vessel is in all respects compliant with the U.S. Coastguard regulations.
|
18.
|
Private and Confidential Clause
The terms and conditions of this sale to be kept strictly private and confidential by all parties. However should the sale be reported, neither the Buyers or the Sellers have any right to withdraw from the contract and its obligations. The Buyers shall have the right to publicly disclose information regarding the sale as per the SEC disclosure requirements.
|
Copyright Norwegian Shipbrokers’ Association, Oslo, Norway.
Printed and sold by S-Gruppen A/S, Halvorsen & Larsen, Oslo, Norway.
Fax: 47-22-25 28 69. Phone: 47-22-25 81 90.
|
MEMORANDUM OF AGREEMENT
Dated: 19th April, 2010
|
Norwegian Shipbrokers’ Association’s Memo-randum of Agreement for sale and purchase of ships. Adopted by the Baltic and International Maritime Council (BIMCO) in 1956.
Code-name
SALEFORM 1993
Revised 1966, 1983 and 1986/87.
|
1.
|
Purchase Price
US$ 66,200,000.-- (in words : United States Dollars Sixty-Six Million Two Hundred Thousand) cash on delivery.
|
16
|
2.
|
Deposit
|
17
|
As security for the correct fulfilment of this Agreement the Buyers shall pay a deposit of 10%
|
18
|
(ten per cent) of the Purchase Price within 3 (three) banking days
from the date of this
|
19
|
Agreement
after both parties have signed a faxed copy of this Memorandum of Agreement - which to be fax-signed within one business day after all terms and conditions have been agreed and an escrow agreement (the “Escrow Agreement”) has been signed between Sellers, Buyers and Frachtcontor Junge & Co. GmbH (the “Escrow Agrent”). This deposit shall be placed with the following bank account in the name of the Escrow Agent
|
20
|
M.M. Warburg Bank Hamburg (the “Bank”)
BIC/SWIFT: WBWC DE HH
Account No: 1001 1876 07
IBAN: DE76 2012 0100 1001 1876 07
Beneficiary: Frachtcontor Junge & Co., Ballindamm 17, 20095 Hamburg
|
Reference: Sale MT “WALTZ” Deposit
|
|
and held by this Escrow Agent in the above interest bearing account on account of the Sellers and the Buyers, to be released in accordance
|
21
|
with joint written instructions of the Sellers and the Buyers or as otherwise provided in the Escrow Agreement. Interest
, if any
, to be credited to the
|
22
|
Buyers.
|
23
|
24
|
3.
|
Payment
|
25
|
The deposit together with 90 percent balance
said
of the Purchase Price plus any additional payments due under this Memorandum of Agreement (such as payment for bunkers/lubricating oils, etc.)
shall
to be released/paid in full free of any bank charges to Sellers’ nominated German Bank
|
26
|
Norddeutsche Landesbank, Hannover/Germany
Swift Code : NOLADE2XXX
account to be advised
|
|
on delivery of the vessel against Protocol of Delivery signed by both the Sellers and the Buyers, Bill of Sale and all other delivery documents reasonably required for the valid transfer of ownership and the Buyers’ registration of the Vessel, but not later than 3 banking days after the vessel is in every respect
|
27
|
physically ready for delivery in accordance with the terms and conditions of this Agreement and
|
28
|
Notice of Readiness has been given in accordance with Clause 5.
|
29
|
4.
|
Inspections
|
30
|
a)*
|
The Buyers have waived to inspect
ed
and accepted the Vessel’s classification records without inspection.
The Buyers
|
31
|
have also inspected the Vessel at/in on
|
32
|
|
and have accepted the Vessel following this inspection and the sale is outright and definite,
|
33
|
|
subject only to the terms and conditions of this Agreement.
|
34
|
|
The Buyers have accepted the Vessel without inspection.
The sale is outright and definite, subject only to the terms and conditions of this Agreement.
|
||
b)*
|
The Buyers shall have the right to inspect the Vessel’s classification records and declare
|
35
|
whether same are accepted or not within.
|
36
|
|
The Sellers shall provide for inspection of the Vessel at/in
|
37
|
|
The Buyers shall undertake the inspection without undue delay to the Vessel. Should the
|
38
|
|
Buyers cause undue delay they shall compensate the Sellers for the losses thereby incurred.
|
39
|
|
The Buyers shall inspect the Vessel without opening up and without cost to the Sellers.
|
40
|
|
During the inspection, the Vessel’s deck and engine log books shall be made available for
|
41
|
|
examination by the Buyers. If the Vessel accepted after such inspection, the sale shall
|
42
|
|
become outright and definite, subject only to the terms and conditions of this Agreement,
|
43
|
|
provided the Sellers receive written notice of acceptance from the Buyers within 72 hours
|
44
|
|
after completion of such inspection.
|
45
|
|
Should notice of acceptance of the Vessel’s classification records and of the Vessel not be
|
46
|
|
received by the Sellers as aforesaid, the deposit together with interest earned shall be
|
47
|
|
released immediately to the Buyers, whereafter this Agreement shall be null and void.
|
48
|
|
*
|
4 a) and 4 b) are alternatives; delete whichever is not applicable, in the absence of deletions,
|
49
|
alternative 4 a) to apply.
|
50
|
5.
|
Notices, time and place of delivery
|
51
|
6.
|
Drydocking/Divers Inspection
|
80
|
In this case, the canceling date specified in clause 5 herein shall be extended by the time necessary for such repairing work up to a maximum of 10 days.
In case the Vessel would be drydocked, the Buyers have the right to clean and paint the Vessel's bottom and other underwater parts during drydock at their time, risk and expenses without interference to the Sellers' works subject to prior consent of the Sellers, which not to be unreasonably
withheld.
In the event that the Sellers' works are completed prior to the Buyers completion of their works, if any, the Sellers have the right to tender a notice of readiness for delivery whilst the Vessel is in drydock and deliver the Vessel in drydock, and the Buyers shall be obliged to take delivery of
the Vessel in accordance with Clause 3 herein, whether the Vessel is in drydock or not.
|
7.
|
Spares/bunkers, etc.
|
154
|
The Sellers shall deliver the Vessel to the Buyers with everything belonging to her on board,
and
on
|
155
|
shore and on order without any additional charge to the Buyers. All spare parts and spare equipment
including spare tail-end shaft(s) and/or spare
|
156
|
propeller(s)/propeller blade(s), if any
, belonging to the Vessel at the date
time
of this Agreement
inspection
used or
|
157
|
unused, whether on board or not shall become the Buyers’ property,
spares on order are to be
|
158
|
excluded.
Forwarding charges, if any, shall be for the Buyers’ account. The Sellers are not required to
|
159
|
replace spare parts
including spare tail-end shaft(s) and spare propeller(s)/propeller blade(s)
which
|
160
|
are taken out of spare and used as replacement prior to delivery, but the replaced items shall be the
|
161
|
property of the Buyers. The radio installation and wireless navigational equipment shall be included in the sale
|
162
|
without extra payment
if they are the property of the Sellers
.
Unused
Broached/unbroached stores and provisions shall be
|
163
|
included in the sale and be taken over by the Buyers without extra payment.
Following spare parts are available covering this Vessel and MT “WALTZ” (not each vessel) :
4 spare cylinder liners in Houston and 1 spare electric motor for inertgas plant in Leer.
|
164
|
The Sellers have the right to take ashore crockery, plates, cutlery, linen and other articles bearing the
|
165
|
Sellers’ flag or name, provided they replace same with similar unmarked items. Library, forms, etc.,
|
166
|
exclusively for use in the Sellers’ vessel(s), shall be excluded without compensation. Captain’s,
|
167
|
Officers’ and Crew’s personal effects/belongings including the slop chest are to be excluded from the sale,
|
168
|
as well as the following additional items (including items on hire):
- log books according to Clause 8. hereof.
- certificates which the Sellers have to return to issuing authorities according to law, but the Buyers
to have the right to take photocopies.
- I.S.M. manuals / ISPS manuals.
- Blue Ocean satphone/email installation, which is property of Blue Ocean Wireless Limited,
Unit 8, Fulcum 4, Solent Way, Whiteley, Hampshire, PO15 7FT, UK.
|
169
|
The Buyers shall take over and pay extra only for the remaining bunkers and unused/unbroached lubricating oils in storage tanks and
|
170
|
sealed drums and pay
the
current net market
Sellers’ last invoiced prices less all Sellers’ discounts (and excluding
barging
lighterage expenses) at the port and date
|
171
|
of delivery of the Vessel. Prices are to be supported by invoices/vouchers.
|
172
|
Payment under this Clause shall be made at the same time and place and in the same currency as
|
173
|
the Purchase Price.
|
174
|
|
8.
|
Documentation
|
175
|
The place of closing/payment formalities :
to take place in Sellers’ office or Sellers’ Bank.
|
176
|
In exchange for payment of the Purchase Price the Sellers shall furnish the Buyers with delivery
|
177
|
documents,
namely
: as reasonably required for valid transfer of title and registration under Buyers’ flag of choice. Such documents to be listed in an Addendum to this Memorandum of Agreement, however such agreement is not to prejudice/delay the signing of this Memorandum of Agreement and lodging of the deposit.
|
178
|
a)
|
Legal Bill of Sale in a form recordable in (the country in which the Buyers are
|
179
|
to register the Vessel), warranting that the Vessel is free from all encumbrances, mortgages
|
180
|
|
and maritime liens or any other debts or claims whatsoever, duly notarially attested and
|
181
|
|
legalized by the consul of such country or other competent authority.
|
182
|
|
b)
|
Current Certificate of Ownership issued by the competent authorities of the flag state of
|
183
|
the Vessel.
|
184
|
|
c)
|
Confirmation of Class issued within 72 hours prior to delivery.
|
185
|
d)
|
Current Certificate issued by the competent authorities stating that the Vessel is free from
|
186
|
registered encumbrances.
|
187
|
|
e)
|
Certificate of Deletion of the Vessel from the Vessel’s registry or other official evidence of
|
188
|
deletion appropriate to the Vessel’s registry at the time of delivery, or, in the event that the
|
189
|
|
registry does not as a matter of practice issue such documentation immediately, a written
|
190
|
|
undertaking by the Sellers to effect deletion from the Vessel’s registry forthwith and furnish a
|
191
|
|
Certificate or other official evidence of deletion to the Buyers promptly and latest within 4
|
192
|
|
(four) weeks after the Purchase Price has been paid and the Vessel has been delivered.
|
193
|
|
f)
|
Any such additional documents as may reasonably be required by the competent authorities
|
194
|
for the purpose of registering the Vessel, provided the Buyers notify the Sellers of any such
|
195
|
|
documents as soon as possible after the date of this Agreement.
|
196
|
At the time of delivery the Buyers and Sellers shall sign and deliver to each other a Protocol of
|
197
|
Delivery and Acceptance confirming the date and time of delivery of the Vessel from the Sellers to the
|
198
|
Buyers.
|
199
|
At the time of delivery the Sellers shall hand to the Buyers the classification certificate(s) as well as all
|
200
|
plans, drawings, instruction booklets, nautical publications, charts, copies of all manuals and code-books, as well as oil record books of the last three months etc., which are on board the Vessel. Other certificates which are on board the Vessel shall also
|
201
|
be handed over to the Buyers unless the Sellers are required to retain same, in which case the
|
202
|
Buyers to have the right to take copies. Other technical documentation which may
|
203
|
be in the Sellers’ possession shall be promptly forwarded to the Buyers at their expense, if they so
|
204
|
request. The Sellers may keep the Vessel’s log books but the Buyers to have the right to take
|
205
|
copies of same.
|
206
|
9.
|
Encumbrances
|
207
|
The Sellers warrant that the Vessel, at the time of delivery, is free from all charters, encumbrances, taxes,
|
208
|
mortgages and maritime liens or any other debts or claims whatsoever. The Sellers hereby undertake
|
209
|
to indemnify the Buyers against all consequences of claims made against the Vessel which have
|
210
|
been incurred prior to the time of delivery.
|
211
|
10.
|
Taxes, etc.
|
212
|
Any taxes, fees and expenses in connection with the purchase and registration under the Buyers’ flag
|
213
|
shall be for the Buyers’ account, whereas similar charges in connection with the closing of the Sellers’
|
214
|
register shall be for the Sellers’ account.
|
215
|
11.
|
Condition on delivery
|
216
|
*
|
Notes, if any, in the surveyor’s report which are accepted by the Classification Society
|
228
|
without condition of Class
/recommendation
are not to be taken into account.
|
229
|
12.
|
Name/markings
|
230
|
Upon delivery the Buyers undertake to change the name of the Vessel and alter funnel markings.
|
231
|
13.
|
Buyers’ default
|
232
|
Should the deposit not be paid in accordance with Clause 2, the Sellers have the right to cancel this
|
233
|
Agreement, and they shall be entitled to claim compensation for their losses and for all expenses
|
234
|
incurred together with interest.
|
235
|
Should the Purchase Price not be paid in accordance with Clause 3, the Sellers have the right to
|
236
|
cancel the Agreement, in which case the deposit together with interest earned shall be released to the
|
237
|
Sellers. If the deposit does not cover their loss, the Sellers shall be entitled to claim further
|
238
|
compensation for their losses and for all expenses incurred together with interest.
|
239
|
14.
|
Sellers’ default
|
240
|
Should the Sellers fail to give Notice of Readiness in accordance with Clause 5 a) or fail to be ready
|
241
|
to validly complete a legal transfer by the date stipulated in line 61 the Buyers shall have
|
242
|
the option of cancelling this Agreement provided always that the Sellers shall be granted a
|
243
|
maximum of 3 banking days after Notice of Readiness has been given to make arrangements
|
244
|
for the documentation set out in Clause 8. If after Notice of Readiness has been given but before
|
245
|
the Buyers have taken delivery, the Vessel ceases to be physically ready for delivery and is not
|
246
|
made physically ready again in every respect by the date stipulated in line 61 and new Notice of
|
247
|
Readiness given, the Buyers shall retain their option to cancel. In the event that the Buyers elect
|
248
|
to cancel this Agreement the deposit together with interest earned shall be released to them
|
249
|
immediately.
|
250
|
Should the Sellers fail to give Notice of Readiness by the date stipulated in line 61 or fail to be ready
|
251
|
to validly complete a legal transfer as aforesaid they shall make due compensation to the Buyers for
|
252
|
their loss and for all expenses together with interest if their failure is due to proven
|
253
|
negligence and whether or not the Buyers cancel this Agreement.
|
254
|
15.
|
Buyers’ representatives
|
255
|
17.
|
Blacklisting
|
On delivery the Sellers shall hand to the Buyers a letter of undertaking stating that to the best of Sellers’ knowledge the Vessel under present Ownership is not blacklisted by any nation including the Arab Boycott League in Damascus and the Vessel is in all respects compliant with the U.S. Coastguard regulations.
|
18.
|
Private and Confidential Clause
The terms and conditions of this sale to be kept strictly private and confidential by all parties. However should the sale be reported, neither the Buyers or the Sellers have any right to withdraw from the contract and its obligations. The Buyers shall have the right to publicly disclose information regarding the sale as per the SEC disclosure requirements.
|
Copyright Norwegian Shipbrokers’ Association, Oslo, Norway.
Printed and sold by S-Gruppen A/S, Halvorsen & Larsen, Oslo, Norway.
Fax: 47-22-25 28 69. Phone: 47-22-25 81 90.
|
|
(i)
|
August 31, 2013, or
|
|
(ii)
|
if not then fully vested, in full upon the death or total and permanent disability of the Recipient (such disability as determined in good faith by the Board based on an examination by a qualified medical doctor appointed by the Board), or
|
|
(iii)
|
if not then fully vested, upon the Recipient’s Retirement (defined as the termination of employment after attainment of age 65 or other mutually agreed retirement date, whichever later) pro rata in an amount equal to the Recipient’s Restricted Stock times the Number of days from Award Date to Retirement divided by the Number of days from the Award Date to the Vesting Date,
|
|
1.
|
A technical management fee equal to $850 per Vessel per day for technical services provided to CC. Subject to approval by CSM, such $850 amount will be subject to increase on each anniversary of the date hereof based on the total percentage increase, if any, in the Consumer Price Index over the immediately preceding twelve months of the Term.
|
|
2.
|
A management fee of 1.25% of all gross charter revenues generated by each Vessel for Commercial Services rendered.
|
|
3.
|
Upon consummation of the sale or purchase of a Vessel, CC shall pay CSM a fee equal to 1% of the gross purchase or sale price.
|
|
4.
|
CSM shall, at no extra cost to CC, provide its own office accommodation, office staff and stationary.
|
CRUDE CARRIERS CORP.,
|
|||
By:
|
|||
Name:
|
|||
Title:
|
|||
CAPITAL SHIP MANAGEMENT CORP.,
|
|||
By:
|
|||
Name:
|
|||
Title:
|
Vessel
|
Capacity
|
Year Built
|
Flag
|
Delivery Date/ Expected Delivery Date
|
Miltiadis M II
|
162,397 dwt
|
2006
|
Liberia
|
03/2010
|
Alexander the Great
|
297,958 dwt
|
2010
|
Liberia
|
03/2010
|
Achilleas
|
297,000 dwt
|
2010
|
Liberia
|
06/2010
|
Amoureux
|
150,393 dwt
|
2008
|
Liberia
|
05/2010
|
Aias
|
150,096 dwt
|
2008
|
Liberia
|
06/2010
|
CRUDE CARRIERS CORP.,
|
|||
By:
|
|||
Name:
|
|||
Title:
|
|||
CAPITAL SHIP MANAGEMENT CORP.,
|
|||
By:
|
|||
Name:
|
|||
Title:
|
Name of Subsidiary
|
Jurisdiction of Incorporation
|
Proportion of Ownership Interest
|
Crude Carriers Operating Corp.
|
Republic of The Marshall Islands
|
100%
|
Achilleas Carriers Corp.
|
Liberia
|
100%
|
Alexander the Great Carriers Corp.
|
Liberia
|
100
%
|
Aias Carriers Corp.
|
Liberia
|
100%
|
Amoureux Carriers Corp.
|
Liberia
|
100%
|
Miltiadis M II Carriers Corp.
|
Republic of The Marshall Islands
|
100%
|
1.
|
I have reviewed this annual report on Form 20-F of Crude Carriers Corp.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
|
4.
|
The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the company and have:
|
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b.
|
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
c.
|
Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
|
5.
|
The company’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
|
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
|
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
|
By:
|
/s/ Evangelos M. Marinakis
|
|
Name:
|
Evangelos M. Marinakis
|
|
Title:
|
Chief Executive Officer
|
|
1.
|
I have reviewed this annual report on Form 20-F of Crude Carriers Corp.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
|
4.
|
The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the company and have:
|
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b.
|
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
c.
|
Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
|
5.
|
The company’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
|
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
|
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
|
Dated:
|
April 18, 2011
|
By:
|
/s/ Gerasimos G. Kalogiratos
|
Name:
|
Gerasimos G. Kalogiratos
|
Title:
|
Chief Financial Officer
|
1.
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
By:
|
/s/ Evangelos M. Marinakis
|
Name:
|
Evangelos M. Marinakis
|
Title:
|
Chief Executive Officer
|
1.
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
By:
|
/s/ Gerasimos G. Kalogiratos
|
Name:
|
Gerasimos G. Kalogiratos
|
Title:
|
Chief Financial Officer
|