[ ]
|
REPORT
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
|
[ ]
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
[ ]
|
SHELL
COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
|
|
||
TOP
SHIPS INC.
|
||
(Exact
name of Registrant as specified in its charter)
|
||
(Translation
of Registrant's name into English)
|
||
Republic
of the Marshall Islands
|
||
(Jurisdiction
of incorporation or organization)
|
||
1
Vas. Sofias and Meg. Alexandrou Str, 15124 Maroussi,
Greece
|
||
(Address
of principal executive offices)
|
||
Alexandros Tsirikos, (Tel) +30 210 8128180, atsirikos@topships.org, (Fax) +30 210 6141273, 1 Vas. | ||
Sofias and Meg. Alexandrou Str, 15124 Maroussi, Greece | ||
(Name,
Telephone, E-mail and/or Facsimile number and Address of Company Contact
Person)
|
Title of each class
|
Name of each exchange
on which registered
|
|
Common
Stock par value $0.01 per share
|
NASDAQ
Global Select
Market
|
NONE
|
|
(Title of
class)
|
|
Securities for which
there is a reporting obligation pursuant to Section 15(d) of the
Act.
|
|
NONE
|
(Title of
class)
|
|
Yes
|
No
|
X
|
||
Yes
|
No
|
X
|
||
Yes
|
X |
No
|
|
|
Yes
|
No
|
|
||
X
|
U.S.
GAAP
|
International
Financial Reporting Standards as issued by the
International
|
|
Accounting
Standards Board
|
|
Other
|
|
Item
17
|
Item
18
|
|||
PART I
|
|
ITEM 1 -
IDENTITY OF
DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
|
1
|
ITEM 2 -
OFFER
STATISTICS AND EXPECTED TIMETABLE
|
1
|
ITEM 3 -
KEY
INFORMATION
|
1
|
ITEM 4 -
INFORMATION ON
THE COMPANY
|
27
|
ITEM 4A –
UNRESOLVED
STAFF COMMENTS
|
48
|
ITEM 5 -
OPERATING AND
FINANCIAL REVIEW AND PROSPECTS
|
49
|
ITEM 6 -
DIRECTORS,
SENIOR MANAGEMENT AND EMPLOYEES
|
88
|
ITEM 7 -
MAJOR
SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
|
93
|
ITEM 8 -
FINANCIAL
INFORMATION
|
94
|
ITEM 9 -
THE OFFER AND
LISTING
|
94
|
ITEM 10 -
ADDITIONAL
INFORMATION
|
95
|
ITEM 11 -
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
109
|
ITEM 12 -
DESCRIPTION OF
SECURITIES OTHER THAN EQUITY SECURITIES
|
111
|
PART II
|
|
ITEM 13 -
DEFAULTS,
DIVIDEND ARREARAGES AND DELINQUENCIES
|
112
|
ITEM
14 -
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND
USE OF PROCEEDS
|
112
|
ITEM
15 -
CONTROLS AND PROCEDURES
|
112
|
ITEM
16A-
AUDIT COMMITTEE FINANCIAL EXPERT
|
115
|
ITEM
16B-
CODE OF ETHICS
|
115
|
ITEM
16C-
PRINCIPAL ACCOUNTANT FEES AND RELATED
SERVICES
|
115
|
ITEM
16D-
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT
COMMITTEE
|
116
|
ITEM
16E-
PURCHASES OF EQUITY SECURITIES BY ISSUER AND
AFFILIATES.
|
116
|
ITEM
16F-
CHANGE IN REGISTRANT'S CERTIFYING
ACCOUNTANT.
|
116
|
ITEM
16G-
CORPORATE
GOVERNANCE.
|
116
|
PART
III
|
|
ITEM
17 -
FINANCIAL STATEMENTS
|
117
|
ITEM
18 -
FINANCIAL STATEMENTS
|
117
|
INDEX
TO CONSOLIDATED FINANCIAL STATEMENTS
|
F-1
|
ITEM
19 –
EXHIBITS
|
Year Ended December 31,
|
||||||||||||||||||||
Dollars
in thousands, except per share data and average daily
results
|
2004
|
2005
|
2006
|
2007
|
2008
|
|||||||||||||||
INCOME
STATEMENT DATA
|
||||||||||||||||||||
Revenues
|
$93,829 | $244,215 | $310,043 | $252,259 | $257,380 | |||||||||||||||
Voyage
expenses
|
16,898 | 36,889 | 55,351 | 59,414 | 38,656 | |||||||||||||||
Charter
hire expense
|
- | 7,206 | 96,302 | 94,118 | 53,684 | |||||||||||||||
Amortization
of deferred gain on sale and leaseback of vessels
|
- | (837 | ) | (8,110 | ) | (15,610 | ) | (18,707 | ) | |||||||||||
Other
vessel operating expenses
|
16,859 | 47,315 | 66,082 | 67,914 | 67,114 | |||||||||||||||
Dry-docking
costs
|
7,365 | 10,478 | 39,333 | 25,094 | 10,036 | |||||||||||||||
General
and administrative expenses (1)
|
8,579 | 23,818 | 23,016 | 24,824 | 31,473 | |||||||||||||||
Foreign
currency (gains) losses, net
|
75 | (68 | ) | 255 | 176 | (85 | ) | |||||||||||||
Gain
on sale of vessels
|
(1,889 | ) | (10,831 | ) | (12,667 | ) | (1,961 | ) | (19,178 | ) | ||||||||||
Depreciation
|
13,108 | 47,055 | 35,266 | 27,408 | 32,664 | |||||||||||||||
Total
operating expenses
|
60,995 | 161,025 | 294,828 | 281,377 | 195,657 | |||||||||||||||
Operating
income (loss)
|
32,834 | 83,190 | 15,215 | (29,118 | ) | 61,723 | ||||||||||||||
Interest
and finance costs
|
(4,839 | ) | (19,430 | ) | (27,030 | ) | (19,518 | ) | (25,764 | ) | ||||||||||
Gain
/ (loss) on financial instruments
|
(362 | ) | (747 | ) | (2,145 | ) | (3,704 | ) | (12,024 | ) | ||||||||||
Interest
income
|
481 | 1,774 | 3,022 | 3,248 | 1,831 | |||||||||||||||
Other
income (expense), net
|
80 | 134 | (67 | ) | 16 | (127 | ) | |||||||||||||
Net
income (loss)
|
$28,194 | $64,921 | $(11,005 | ) | $(49,076 | ) | $25,639 | |||||||||||||
Earnings
(loss) per share, basic and diluted
|
$6.54 | $6.97 | $(1.16 | ) | $(4.09 | ) | $1.01 | |||||||||||||
Weighted
average common shares outstanding, basic
|
4,307,483 | 9,308,923 | 10,183,424 | 11,986,857 | 25,445,031 | |||||||||||||||
Weighted
average common shares outstanding, diluted
|
4,307,483 | 9,310,670 | 10,183,424 | 11,986,857 | 25,445,031 | |||||||||||||||
Dividends
declared per share
|
$1.80 | $2.64 | $23.13 | - | - |
Dollars
in thousands, except per share data and average daily
results
|
2004
|
2005
|
2006
|
2007
|
2008
|
|||||||||||||||
BALANCE
SHEET DATA, at end of period
|
||||||||||||||||||||
Current
assets
|
$ | 141,051 | $ | 67,574 | $ | 72,799 | $ | 102,161 | $ | 57,088 | ||||||||||
Total
assets
|
533,138 | 970,386 | 490,885 | 776,917 | 698,375 | |||||||||||||||
Current
liabilities, including current portion of long-term debt
|
42,811 | 76,143 | 45,416 | 153,290 | 386,934 | |||||||||||||||
Total
long-term debt, including current portion
|
194,806 | 564,103 | 218,052 | 438,884 | 342,479 | |||||||||||||||
Common
Stock
|
278 | 280 | 108 | 205 | 283 | |||||||||||||||
Stockholders' equity | 315,061 | 359,147 | 161,198 | 211,408 | 292,051 | |||||||||||||||
FLEET
DATA
|
||||||||||||||||||||
Total
number of vessels at end of period
|
15.0 | 27.0 | 24.0 | 23.0 | 12.0 | |||||||||||||||
Average
number of vessels
(2)
|
9.6 | 21.7 | 26.7 | 22.4 | 18.8 | |||||||||||||||
Total
voyage days for fleet
(3)
|
3,215 | 7,436 | 8,634 | 7,032 | 6,099 | |||||||||||||||
Total
time charter days for
fleet
|
1,780 | 5,567 | 6,223 | 4,720 | 5,064 | |||||||||||||||
Total
spot market days for
fleet
|
1,435 | 1,869 | 2,411 | 2,312 | 1,035 | |||||||||||||||
Total
calendar days for fleet
(4)
|
3,517 | 7,905 | 9,747 | 8,176 | 6,875 | |||||||||||||||
Fleet
utilization
(5)
|
91.4 | % | 94.1 | % | 88.6 | % | 86.0 | % | 88.7 | % | ||||||||||
AVERAGE
DAILY RESULTS
|
||||||||||||||||||||
Time
charter equivalent
(6)
|
$ | 23,929 | $ | 27,881 | $ | 29,499 | $ | 27,424 | $ | 35,862 | ||||||||||
Other
vessel operating expenses (7)
|
4,794 | 5,985 | 6,780 | 8,307 | 9.762 | |||||||||||||||
General
and administrative expenses (8)
|
2,439 | 3,013 | 2,361 | 3,036 | 4,578 | |||||||||||||||
(1)
|
General
and administrative expenses include, sub-manager fees and other general
and administrative expenses. During 2004, 2005, 2006, 2007 and 2008, we
paid to the members of our senior management and to our directors'
aggregate compensation of approximately $4.4 million, $8.1 million, $4.2
million, $4.8 million and $5.6 million
respectively.
|
(2)
|
Average
number of vessels is the number of vessels that constituted our fleet for
the relevant period, as measured by the sum of the number of days each
vessel was a part of our fleet during the period divided by the number of
calendar days in that period.
|
(3)
|
Total
voyage days for fleet are the total days the vessels were in our
possession for the relevant period net of off hire days associated with
major repairs, dry-dockings or special or intermediate
surveys.
|
(4)
|
Calendar
days are the total days the vessels were in our possession for the
relevant period including off hire days associated with major repairs,
dry-dockings or special or intermediate
surveys.
|
(5)
|
Fleet
utilization is the percentage of time that our vessels were available for
revenue generating voyage days, and is determined by dividing voyage days
by fleet calendar days for the relevant
period.
|
(6)
|
Time
charter equivalent rate, or TCE rate, is a measure of the average daily
revenue performance of a vessel on a per voyage basis. Our method of
calculating TCE rate is consistent with industry standards and is
determined by dividing time charter equivalent revenues or TCE revenues by
voyage days for the relevant time period. TCE revenues are revenues minus
voyage expenses. Voyage expenses primarily consist of port, canal and fuel
costs that are unique to a particular voyage, which would otherwise be
paid by the charterer under a time charter contract, as well as
commissions. TCE revenues and TCE rate non-GAAP measures, provide
additional meaningful information in conjunction with shipping revenues,
the most directly comparable GAAP measure, because it assists Company's
management in making decisions regarding the deployment and use of its
vessels and in evaluating their financial
performance.
|
(7)
|
Daily
other vessel operating expenses, which includes crew costs, provisions,
deck and engine stores, lubricating oil, insurance, maintenance and
repairs is calculated by dividing other vessel operating expenses by fleet
calendar days for the relevant time
period.
|
(8)
|
Daily
general and administrative expenses are calculated by dividing general and
administrative expenses by fleet calendar days for the relevant time
period.
|
2004
|
2005
|
2006
|
2007
|
2008
|
||||||||||||||||
On a consolidated basis
|
||||||||||||||||||||
Revenues
|
$93,829 | $244,215 | $310,043 | $252,259 | $257,380 | |||||||||||||||
Less:
|
||||||||||||||||||||
Voyage
expenses
|
(16,898 | ) | (36,889 | ) | (55,351 | ) | (59,414 | ) | (38,656 | ) | ||||||||||
Time
charter equivalent revenues
|
$76,931 | $207,326 | $254,692 | $192,845 | $218,724 | |||||||||||||||
Total
voyage days
|
3,215 | 7,436 | 8,634 | 7,032 | 6,099 | |||||||||||||||
Average
Daily Time Charter Equivalent
|
$23,929 | $27,881 | $29,499 | $27,424 | $35,862 | |||||||||||||||
2004
|
2005
|
2006
|
2007
|
2008
|
||||||||||||||||
Tanker Fleet
|
||||||||||||||||||||
Revenues
|
$93,829 | $244,215 | $310,043 | $248,944 | $163,995 | |||||||||||||||
Less:
|
||||||||||||||||||||
Voyage
expenses
|
(16,898 | ) | (36,889 | ) | (55,351 | ) | (59,253 | ) | (34,215 | ) | ||||||||||
Time
charter equivalent revenues
|
$76,931 | $207,326 | $254,692 | $189,691 | $129,780 | |||||||||||||||
Total
voyage days
|
3,215 | 7,436 | 8,634 | 6,991 | 4,357 | |||||||||||||||
Average
Daily Time Charter Equivalent
|
$23,929 | $27,881 | $29,499 | $27,134 | $29,786 | |||||||||||||||
2007
|
2008
|
|||||||
Drybulk Fleet
|
||||||||
Revenues
|
$1,902 | $71,590 | ||||||
Less:
|
||||||||
Voyage
expenses
|
(161 | ) | (4,441 | ) | ||||
Time
charter equivalent revenues
|
$1,741 | $67,149 | ||||||
Total
voyage days
|
41 | 1,742 | ||||||
Average
Daily Time Charter Equivalent
|
$42,463 | $38,547 | ||||||
|
•
|
demand
for refined petroleum products and crude oil for tankers and drybulk
commodities for drybulk vessels;
|
|
•
|
changes
in crude oil production and refining capacity as well as drybulk commodity
production and resulting shifts in trade flows for crude oil, petroleum
product and drybulk commodities;
|
|
•
|
the
location of regional and global crude oil refining facilities and drybulk
commodities markets that affect the distance refined petroleum products
and crude oil or drybulk commodities are to be moved by
sea;
|
|
•
|
global
and regional economic and political
conditions;
|
|
•
|
the
location of regional and global crude oil refining facilities and drybulk
commodities markets that affect the distance refined petroleum products
and crude oil or drybulk commodities are to be moved by
sea;
|
|
•
|
environmental
and other regulatory developments;
|
|
•
|
currency
exchange rates; and
|
|
•
|
weather.
|
|
•
|
the
number of newbuilding deliveries;
|
|
•
|
the
scrapping rate of older vessels;
|
|
•
|
the
price of steel;
|
|
•
|
vessel
casualties;
|
|
•
|
potential
conversion of vessels to alternative
use;
|
|
•
|
changes
in environmental and other regulations that may limit the useful lives of
vessels;
|
|
•
|
port
or canal congestion;
|
|
•
|
the
number of vessels that are out of service at a given time;
and
|
|
•
|
changes
in global crude oil and drybulk commodity
production.
|
|
•
|
the
United States Oil Pollution Act of 1990, or OPA, which imposes strict
liability for the discharge of oil into the 200-mile United States
exclusive economic zone, the obligation to obtain certificates of
financial responsibility for vessels trading in United States waters and
the requirement that newly constructed tankers that trade in United States
waters be constructed with
double-hulls;
|
|
•
|
the
International Convention on Civil Liability for Oil Pollution Damage of
1969, as amended in 2000, or the CLC, entered into by many countries
(other than the United States) relating to strict liability for pollution
damage caused by the discharge of
oil;
|
|
•
|
the
International Maritime Organization, or IMO (the United Nations agency for
maritime safety and the prevention of pollution by ships), International
Convention for the Prevention of Pollution from Ships, 1973, as modified
by the related Protocol of 1978 relating thereto, or the MARPOL
Convention, which has been updated through various amendments, with
respect to strict technical and operational requirements for
tankers;
|
|
•
|
the
IMO International Convention for the Safety of Life at Sea, or SOLAS
Convention, with respect to crew and passenger
safety;
|
|
•
|
the
International Convention on Load Lines, 1966, or LL Convention, with
respect to the safeguarding of life and property through limitations on
load capability for vessels on international voyages;
and
|
|
•
|
the
United States Marine Transportation Security Act of 2002, or
MTSA.
|
|
•
|
general
economic and market conditions affecting the international tanker and
drybulk shipping industries;
|
|
•
|
prevailing
level of charter rates;
|
|
•
|
competition
from other shipping companies;
|
|
•
|
types,
sizes and ages of vessels;
|
|
•
|
other
modes of transportation;
|
|
•
|
cost
of newbuildings;
|
|
•
|
price
of steel;
|
|
•
|
governmental
or other regulations; and
|
|
•
|
technological
advances.
|
|
•
|
increase
our vulnerability to general economic downturns and adverse competitive
and industry conditions;
|
|
•
|
require
us to dedicate a substantial portion, if not all, of our cash flow from
operations to payments on our indebtedness, thereby reducing the
availability of our cash flow to fund working capital, capital
expenditures and other general corporate
purposes;
|
|
•
|
limit
our flexibility in planning for, or reacting to, changes in our business
and the industry in which we
operate;
|
|
•
|
place
us at a competitive disadvantage compared to competitors that have less
debt or better access to capital;
|
|
•
|
limit
our ability to raise additional financing on satisfactory terms or at all;
and
|
|
•
|
adversely
impact our ability to comply with the financial and other restrictive
covenants in the indenture governing the notes and the credit agreements
governing the debts of our subsidiaries, which could result in an event of
default under such agreements.
|
|
•
|
incur
additional indebtedness;
|
|
•
|
create
liens on our assets;
|
|
•
|
sell
capital stock of our subsidiaries;
|
|
•
|
engage
in mergers or acquisitions;
|
|
•
|
pay
dividends;
|
|
•
|
make
capital expenditures or other
investments;
|
|
•
|
change
the management of our vessels or terminate or materially amend the
management agreement relating to each vessel;
and
|
|
•
|
sell
our vessels.
|
|
•
|
locating
and acquiring suitable vessels;
|
|
•
|
mechanical
failure, human error, war, terrorism, political action in various
countries, labor strikes or adverse weather
conditions.
|
|
•
|
actual
or anticipated fluctuations in our quarterly and annual results and those
of other public companies in our
industry;
|
|
•
|
mergers
and strategic alliances in the drybulk shipping
industry;
|
|
•
|
market
conditions in the drybulk shipping industry and the general state of the
securities markets;
|
|
•
|
changes
in government regulation;
|
|
•
|
shortfalls
in our operating results from levels forecast by securities analysts;
and
|
|
•
|
announcements
concerning us or our
competitors.
|
|
•
|
authorizing
our board of directors to issue "blank check" preferred stock without
shareholder approval;
|
|
•
|
providing
for a classified board of directors with staggered, three-year
terms;
|
|
•
|
prohibiting
cumulative voting in the election of
directors;
|
|
•
|
authorizing
the removal of directors only for cause and only upon the affirmative vote
of the holders of at least 80% of the outstanding shares of our capital
stock entitled to vote for the
directors;
|
|
•
|
prohibiting
shareholder action by written consent unless the written consent is signed
by all shareholders entitled to vote on the
action;
|
|
•
|
limiting
the persons who may call special meetings of shareholders;
and
|
|
•
|
establishing
advance notice requirements for nominations for election to our board of
directors or for proposing matters that can be acted on by shareholders at
shareholder meetings.
|
Dwt
|
Year
Built
|
Charter Type
|
Expiry
|
Daily Base Rate
|
Profit Sharing
Above Base Rate (2009)
|
|
Eight
Tanker Vessels
|
||||||
Relentless
(A)
|
47,084
|
1992
|
Time
Charter
|
Q2/2009
|
$14,000
|
50%
thereafter
|
Dauntless
(B)
|
46,168
|
1999
|
Time
Charter
|
Q1/2010
|
$16,250
|
100%
first $1,000 + 50% thereafter
|
Ioannis
P (B)
|
46,346
|
2003
|
Time
Charter
|
Q4/2010
|
$18,000
|
100%
first $1,000 + 50% thereafter
|
Miss
Marilena (B)
|
50,000
|
2009
|
Bareboat
Charter
|
Q1-2/2019
|
$14,400
|
None
|
Lichtenstein
(B)
|
50,000
|
2009
|
Bareboat
Charter
|
Q1-2/2019
|
$14,550
|
None
|
Ionian
Wave (B)
|
50,000
|
2009
|
Bareboat
Charter
|
Q1-2/2016
|
$14,300
|
None
|
Thyrrhenian
Wave (B)
|
50,000
|
2009
|
Bareboat
Charter
|
Q1-2/2016
|
$14,300
|
None
|
Britto
(B)
|
50,000
|
2009
|
Bareboat
Charter
|
Q1-2/2019
|
$14,550
|
None
|
One
Newbuilding Product Tanker
|
||||||
Hull
S-1033
|
50,000
|
2009
|
Bareboat
Charter
|
Q1-2/2019
|
$14,550
|
None
|
Total
Tanker dwt
|
439,598
|
|||||
Five
Drybulk Vessels
|
||||||
Cyclades
(B)
|
75,681
|
2000
|
Time
Charter
|
Q2/2011
|
$54,250
|
None
|
Amalfi
(B)
|
45,526
|
2000
|
Time
Charter
|
Q2/2009
|
$10,000
|
None
|
Voc
Gallant (B)
|
51,200
|
2002
|
Bareboat
Charter
|
Q2/2012
|
$24,000
|
None
|
Pepito
(B)
|
75,928
|
2001
|
Time
Charter
|
Q2/2013
|
$41,000
|
None
|
Astrale
(B)
|
75,933
|
2000
|
Time
Charter
|
Q2/2011
|
$18,000
|
None
|
Total
Drybulk dwt
|
324,268
|
|||||
TOTAL
DWT
|
763,866
|
|
•
|
general
economic conditions, including increases and decreases in industrial
production and transportation, in which China has played a significant
role since it joined the World Trade
Organization.
|
|
•
|
oil
prices;
|
|
•
|
environmental
issues or
concerns;
|
|
•
|
climate;
|
|
•
|
competition
from alternative energy sources;
and
|
|
•
|
regulatory
environment.
|
|
•
|
the
number of combined carriers, or vessels capable of carrying oil or drybulk
cargoes, carrying oil
cargoes;
|
|
•
|
the
number of newbuildings on order and being
delivered;
|
|
•
|
the
number of tankers in lay-up, which refers to vessels that are in storage,
dry-docked, awaiting repairs or otherwise not available or out of
commission; and
|
|
•
|
the
number of tankers scrapped for obsolescence or subject to
casualties;
|
|
•
|
prevailing
and expected future charterhire
rates;
|
|
•
|
is
the subject of a contract for a major conversion or original construction
on or after July 6,
1993;
|
Category
of Oil Tankers
|
Date
or Year for Phase Out
|
|
Category
1 – oil tankers of 20,000 dwt and above carrying crude oil, fuel oil,
heavy diesel oil or lubricating oil as cargo, and of 30,000 dwt and above
carrying other oils, which do not comply with the requirements for
protectively located segregated ballast tanks
|
April
5, 2005 for ships delivered on April 5, 1982 or earlier
2005
for ships delivered after April 5, 1982
|
|
Category
2 – oil tankers of 20,000 dwt and above carrying crude oil, fuel oil,
heavy diesel oil or lubricating oil as cargo, and of 30,000 dwt and above
carrying other oils, which do comply with the protectively located
segregated ballast tank requirements
and
Category
3 – oil tankers of 5,000 dwt and above but less than the tonnage specified
for Category 1 and 2 tankers.
|
April
5, 2005 for ships delivered on April 5, 1977 or earlier
2005
for ships delivered after April 5, 1977 but before January 1,
1978
2006
for ships delivered in 1978 and 1979
2007
for ships delivered in 1980 and 1981
2008
for ships delivered in 1982
2009
for ships delivered in 1983
2010
for ships delivered in 1984 or
later
|
|
•
|
natural
resource damage and related assessment
costs;
|
|
•
|
real
and personal property
damage;
|
|
•
|
net
loss of taxes, royalties, rents, profits or earnings
capacity;
|
|
•
|
net
cost of public services necessitated by a spill response, such as
protection from fire, safety or health hazards;
and
|
|
•
|
loss
of subsistence use of natural
resources.
|
|
•
|
on-board
installation of automatic identification systems to provide a means for
the automatic transmission of safety-related information from among
similarly equipped ships and shore stations, including information on a
ship's identity, position, course, speed and navigational
status;
|
|
•
|
on-board
installation of ship security alert systems, which do not sound on the
vessel but only alerts the authorities on
shore;
|
|
•
|
the
development of vessel security
plans;
|
|
•
|
ship
identification number to be permanently marked on a vessel's
hull;
|
|
•
|
a
continuous synopsis record kept onboard showing a vessel's history
including, name of the ship and of the state whose flag the ship is
entitled to fly, the date on which the ship was registered with that
state, the ship's identification number, the port at which the ship is
registered and the name of the registered owner(s) and their registered
address; and
|
|
•
|
compliance
with flag state security certification
requirements.
|
Shipowning
Companies with vessels sold
|
|
1
|
Olympos
Shipping Company Limited
|
2
|
Vermio
Shipping Company Limited ( "Faithful")
|
3
|
Kalidromo
Shipping Company Limited ("Kalidromo")
|
4
|
Olympos
Shipping Company Limited ("Olympos")
|
5
|
Rupel
Shipping Company Inc. ("Rupel")
|
6
|
Helidona
Shipping Company Limited ("Helidona")
|
7
|
Mytikas
Shipping Company Ltd. ("Mytikas")
|
8
|
Litochoro
Shipping Company Ltd. ("Litochoro")
|
9
|
Vardousia
Shipping Company Ltd. ("Vardousia")
|
10
|
Psiloritis
Shipping Company Ltd. ("Psiloritis")
|
11
|
Menalo
Shipping Company Ltd. ("Menalo")
|
12
|
Pintos
Shipping Company Ltd. ("Pintos")
|
13
|
Pylio
Shipping Company Ltd. ("Pylio")
|
14
|
Taygetus
Shipping Company Ltd. ("Taygetus")
|
15
|
Imitos
Shipping Company Limited ("Imitos")
|
16
|
Parnis
Shipping Company Limited ("Parnis")
|
17
|
Parnasos
Shipping Company Limited ("Parnasos")
|
18
|
Vitsi
Shipping Company Limited ("Vitsi")
|
19
|
Kisavos
Shipping Company Limited ("Kisavos")
|
20
|
Agion
Oros Shipping Company Limited ("Agion Oros")
|
21
|
Giona
Shipping Company Limited ("Giona")
|
22
|
Agrafa
Shipping Company Limited ("Agrafa")
|
23
|
Ardas
Shipping Company Limited ("Ardas")
|
24
|
Nedas
Shipping Company Limited ("Nedas")
|
25
|
Kifisos
Shipping Company Limited ("Kifisos")
|
26
|
Sperhios
Shipping Company Limited ("Sperhios")
|
27
|
Noir
Shipping S.A. ("Noir")
|
Shipowning
Companies with sold and leased back vessels at December 31,
2008
|
|
28
|
Gramos
Shipping Company Inc. ("Gramos")
|
29
|
Falakro
Shipping Company Ltd. ("Falakro")
|
30
|
Pageon
Shipping Company Ltd. ("Pageon")
|
31
|
Idi
Shipping Company Ltd. ("Idi")
|
32
|
Parnon
Shipping Company Ltd. ("Parnon")
|
Shipowning
Companies with vessels in operations at December 31,
2008
|
|
33
|
Lefka
Shipping Company Limited ("Lefka")
|
34
|
Ilisos
Shipping Company Limited ("Ilisos")
|
35
|
Amalfi
Shipping Company Limited ("Amalfi")
|
36
|
Jeke
Shipping Company Limited ("Jeke")
|
37
|
Japan
I Shipping Company Limited ("Japan I")
|
38
|
Japan
II Shipping Company Limited ("Japan II")
|
39
|
Japan
III Shipping Company Limited ("Japan III")
|
Shipowning
Companies with vessels under construction at December 31,
2008
|
|
40
|
Warhol
Shipping Company Limited ("Warhol")
|
41
|
Lichtenstein
Shipping Company Limited ("Lichtenstein")
|
42
|
Banksy
Shipping Company Limited ("Banksy")
|
43
|
Indiana
R Shipping Company Limited ("Indiana R")
|
44
|
Britto
Shipping Company Limited ("Britto")
|
45
|
Hongbo
Shipping Company Limited ("Hongbo")
|
Other
Companies
|
|
46
|
Top
Tankers (U.K.) Limited
|
47
|
Top
Bulker Management Inc
|
48
|
TOP
Tanker Management Inc ((the "Manager")
|
49
|
Ierissos
Shipping Inc
|
|
•
|
obtain
the charterer's consent to us as the new
owner;
|
|
•
|
obtain
the charterer's consent to a new technical
manager;
|
|
•
|
in
some cases, obtain the charterer's consent to a new flag for the
vessel;
|
|
•
|
arrange
for a new crew for the vessel, and where the vessel is on charter, in some
cases, the crew must be approved by the
charterer;
|
|
•
|
replace
all hired equipment on board, such as gas cylinders and communication
equipment;
|
|
•
|
negotiate
and enter into new insurance contracts for the vessel through our own
insurance brokers;
and
|
|
•
|
register
the vessel under a flag state and perform the related inspections in order
to obtain new trading certificates from the flag
state.
|
|
•
|
employment
and operation of our tanker and drybulk vessels;
and
|
|
•
|
management
of the financial, general and administrative elements involved in the
conduct of our business and ownership of our tanker and drybulk
vessels.
|
|
•
|
vessel
maintenance and
repair;
|
|
•
|
crew
selection and
training;
|
|
•
|
vessel
spares and stores
supply;
|
|
•
|
contingency
response
planning;
|
|
•
|
onboard
safety procedures
auditing;
|
|
•
|
accounting;
|
|
•
|
vessel
insurance
arrangement;
|
|
•
|
vessel
chartering;
|
|
•
|
vessel
security training and security response plans
(ISPS);
|
|
•
|
obtain
ISM certification and audit for each vessel within the six months of
taking over a
vessel;
|
|
•
|
vessel
hire
management;
|
|
•
|
vessel
surveying;
and
|
|
•
|
vessel
performance
monitoring.
|
|
•
|
management
of our financial resources, including banking relationships, i.e.,
administration of bank loans and bank
accounts;
|
|
•
|
management
of our accounting system and records and financial
reporting;
|
|
•
|
administration
of the legal and regulatory requirements affecting our business and
assets;
and
|
|
•
|
management
of the relationships with our service providers and
customers.
|
|
•
|
Charter
rates and periods of charter hire for our tanker and drybulk
vessels;
|
Year
Ended December 31,
|
change
|
|||||||||||||||||||||||||||
2006
|
2007
|
2008
|
YE07
v YE06
|
YE08
v YE07
|
||||||||||||||||||||||||
($
in thousands)
|
$ | % | $ | % | ||||||||||||||||||||||||
Voyage
Revenues
|
310,043 | 252,259 | 257,380 | (57,784 | ) | -18.6 | % | 5,121 | 2.0 | % | ||||||||||||||||||
Voyage
expenses
|
55,351 | 59,414 | 38,656 | 4,063 | 7.3 | % | (20,758 | ) | -34.9 | % | ||||||||||||||||||
Charter
hire expenses
|
96,302 | 94,118 | 53,684 | (2,184 | ) | -2.3 | % | (40,434 | ) | -43.0 | % | |||||||||||||||||
Amortization
of deferred gain on sale and lease
|
(8,110 | ) | (15,610 | ) | (18,707 | ) | (7,500 | ) | 92.5 | % | (3,097 | ) | 19.8 | % | ||||||||||||||
Other
Vessel operating expenses
|
66,082 | 67,914 | 67,114 | 1,832 | 2.8 | % | (800 | ) | -1.2 | % | ||||||||||||||||||
Dry-docking
costs
|
39,333 | 25,094 | 10,036 | (14,239 | ) | -36.2 | % | (15,058 | ) | -60.0 | % | |||||||||||||||||
Depreciation
|
35,266 | 27,408 | 32,664 | (7,858 | ) | -22.3 | % | 5,256 | 19.2 | % | ||||||||||||||||||
Sub-Manager
fees
|
2,755 | 1,828 | 1,159 | (927 | ) | -33.6 | % | (669 | ) | -36.6 | % | |||||||||||||||||
Other
general and administrative expenses
|
20,261 | 22,996 | 30,314 | 2,735 | 13.5 | % | 7,318 | 31.8 | % | |||||||||||||||||||
Foreign
currency (gains) / losses, net
|
255 | 176 | (85 | ) | (79 | ) | -31.0 | % | (261 | ) | -148.3 | % | ||||||||||||||||
Gain
on sale of vessels
|
(12,667 | ) | (1,961 | ) | (19,178 | ) | 10,706 | -84.5 | % | (17,217 | ) | 878.0 | % | |||||||||||||||
Expenses
|
294,828 | 281,377 | 195,657 | (13,451 | ) | -4.6 | % | (85,720 | ) | -30.5 | % | |||||||||||||||||
Operating
income (loss)
|
15,215 | (29,118 | ) | 61,723 | (44,333 | ) | -291.4 | % | 90,841 | -312.0 | % | |||||||||||||||||
Interest
and finance costs
|
(27,030 | ) | (19,518 | ) | (25,764 | ) | 7,512 | -27.8 | % | (6,246 | ) | 32.0 | % | |||||||||||||||
Gain
/ (loss) on financial instruments
|
(2,145 | ) | (3,704 | ) | (12,024 | ) | (1,559 | ) | 72.7 | % | (8,320 | ) | 224.6 | % | ||||||||||||||
Interest
income
|
3,022 | 3,248 | 1,831 | 226 | 7.5 | % | (1,417 | ) | -43.6 | % | ||||||||||||||||||
Other,
net
|
(67 | ) | 16 | (127 | ) | 83 | -123.9 | % | (143 | ) | -893.8 | % | ||||||||||||||||
Total
other income (expenses), net
|
(26,220 | ) | (19,958 | ) | (36,084 | ) | 6,262 | -23.9 | % | (16,126 | ) | 80.8 | % | |||||||||||||||
Net
income (loss)
|
(11,005 | ) | (49,076 | ) | 25,639 | (38,071 | ) | 345.9 | % | 74,715 | -152.2 | % | ||||||||||||||||
12-months
ended December 31,
|
change
|
|||||||||||||||||||
2006
|
2007
|
2008
|
YE07
v YE06
|
YE08
v YE07
|
||||||||||||||||
($
in thousands)
|
%
|
%
|
||||||||||||||||||
TANKER
FLEET***
|
||||||||||||||||||||
Total
number of vessels at end of period
|
24.0 | 20.0 | 7.0 | -16.7 | % | -65.0 | % | |||||||||||||
Average
number of vessels
|
26.7 | 22.2 | 13.9 | -16.8 | % | -37.3 | % | |||||||||||||
Total
calendar days for fleet
|
9,747 | 8,110 | 5,095 | -16.8 | % | -37.2 | % | |||||||||||||
Total
voyage days for fleet under SPOT
|
2,411 | 2,312 | 1,035 | -4.1 | % | -55.2 | % | |||||||||||||
Total
voyage days for fleet under time charters
|
6,223 | 4,679 | 3,322 | -24.8 | % | -29.0 | % | |||||||||||||
Fleet
utilization
|
88.6 | % | 86.2 | % | 85.5 | % | -2.7 | % | -0.8 | % | ||||||||||
Average
TCE ($/day)
|
29,499 | 27,134 | 29,786 | -8.0 | % | 9.8 | % | |||||||||||||
DRY
BULKER FLEET
|
||||||||||||||||||||
Total
number of vessels at end of period
|
- | 3.0 | 5.0 | - | 66.7 | % | ||||||||||||||
Average
number of vessels
|
- | 0.2 | 4.9 | - | 2589.6 | % | ||||||||||||||
Total
calendar days for fleet*
|
- | 66 | 1,780 | - | 2597.0 | % | ||||||||||||||
Total
voyage days for fleet under time charters
|
- | 41 | 1,742 | - | 4148.8 | % | ||||||||||||||
Fleet
utilization
|
- | 62.1 | % | 97.9 | % | - | 57.5 | % | ||||||||||||
Average
TCE ($/day)**
|
- | 42,463 | 38,547 | - | -9.2 | % | ||||||||||||||
TOTAL
FLEET
|
||||||||||||||||||||
Total
number of vessels at end of period
|
24.0 | 23.0 | 12.0 | -4.2 | % | -47.8 | % | |||||||||||||
Average
number of vessels
|
26.7 | 22.4 | 18.8 | -16.1 | % | -16.1 | % | |||||||||||||
Total
calendar days for fleet*
|
9,747 | 8,176 | 6,875 | -16.1 | % | -15.9 | % | |||||||||||||
Total
voyage days for fleet under SPOT
|
2,411 | 2,312 | 1,035 | -4.1 | % | -55.2 | % | |||||||||||||
Total
voyage days for fleet under time charters
|
6,223 | 4,720 | 5,064 | -24.2 | % | 7.3 | % | |||||||||||||
Fleet
utilization
|
88.6 | % | 86.0 | % | 88.7 | % | -2.9 | % | 3.1 | % | ||||||||||
Average
TCE ($/day)**
|
29,499 | 27,424 | 35,862 | -7.0 | % | 30.8 | % | |||||||||||||
Year
Ended December 31,
|
change
|
|||||||||||||||||||||||||||
2006
|
2007
|
2008
|
YE07
v YE06
|
YE08
v YE07
|
||||||||||||||||||||||||
Revenues
by Segment
|
($
in thousands)
|
$ | % | $ | % | |||||||||||||||||||||||
Tanker
Fleet
|
310,043 | 248,944 | 163,995 | (61,099 | ) | -19.7 | % | (84,949 | ) | -34.1 | % | |||||||||||||||||
Drybulk
Fleet
|
- | 1,902 | 71,590 | 1,902 | - | 69,688 | 3663.9 | % | ||||||||||||||||||||
Unallocated
|
- | 1,413 | 21,795 | 1,413 | - | 20,382 | 1442.5 | % | ||||||||||||||||||||
Consolidated
Revenues
|
310,043 | 252,259 | 257,380 | (57,784 | ) | -18.6 | % | 5,121 | 2.0 | % | ||||||||||||||||||
1.
|
Voyage
expenses
|
Year
Ended December 31,
|
change
|
||||||
2006
|
2007
|
2008
|
YE07
v YE06
|
YE08
v YE07
|
|||
Voyage
Expenses by Segment
|
($
in thousands)
|
$
|
%
|
$
|
%
|
||
Tanker
Fleet
|
55,351
|
59,253
|
34,215
|
3,902
|
7.0%
|
(25,038)
|
-42.3%
|
Drybulk
Fleet
|
-
|
161
|
4,441
|
161
|
-
|
4,280
|
2658.4%
|
Consolidated
Voyage Expenses
|
55,351
|
59,414
|
38,656
|
4,063
|
7.3%
|
(20,758)
|
-34.9%
|
2.
|
Charter
hire expenses
|
Year
Ended December 31,
|
change
|
||||||
2006
|
2007
|
2008
|
YE07
v YE06
|
YE08
v YE07
|
|||
Charter
Hire Expense by Segment
|
($
in thousands)
|
$
|
%
|
$
|
%
|
||
Tanker
Fleet
|
96,302
|
94,118
|
53,684
|
(2,184)
|
-2.3%
|
(40,434)
|
-43.0%
|
Drybulk
Fleet
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Consolidated
Charter Hire Expense
|
96,302
|
94,118
|
53,684
|
(2,184)
|
-2.3%
|
(40,434)
|
-43.0%
|
3.
|
Amortization
of deferred gain on sale and leaseback of
vessels
|
Year
Ended December 31,
|
change
|
||||||
2006
|
2007
|
2008
|
YE07
v YE06
|
YE08
v YE07
|
|||
Amortization
of Deferred Gain on Sale and Leaseback of Vessels by
Segment
|
($
in thousands)
|
$
|
%
|
$
|
%
|
||
Tanker
Fleet
|
(8,110)
|
(15,610)
|
(18,707)
|
(7,500)
|
92.5%
|
(3,097)
|
19.8%
|
Drybulk
Fleet
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Consolidated
Amortization of Deferred Gain on Sale and Leaseback of
Vessels
|
(8,110)
|
(15,610)
|
(18,707)
|
(7,500)
|
92.5%
|
(3,097)
|
19.8%
|
4.
|
Other
Vessel Operating Expenses
|
Year
Ended December 31,
|
change
|
||||||
2006
|
2007
|
2008
|
YE07
v YE06
|
YE08
v YE07
|
|||
Vessel
Operating Expense by Segment
|
($
in thousands)
|
$
|
%
|
$
|
%
|
||
Tanker
Fleet
|
66,082
|
67,225
|
56,272
|
1,143
|
1.7%
|
(10,953)
|
-16.3%
|
Drybulk
Fleet
|
-
|
689
|
10,842
|
689
|
-
|
10,153
|
1473.6%
|
Consolidated
Other Vessel Operating Expenses
|
66,082
|
67,914
|
67,114
|
1,832
|
2.8%
|
(800)
|
-1.2%
|
-
|
crew
wages and related costs,
|
-
|
insurance,
|
-
|
repairs
and maintenance,
|
-
|
spares
and consumable stores,
|
-
|
tonnage
taxes and VAT.
|
5.
|
Dry-docking
costs
|
Year
Ended December 31,
|
change
|
||||||
2006
|
2007
|
2008
|
YE07
v YE06
|
YE08
v YE07
|
|||
Dry-docking
Costs by Segment
|
($
in thousands)
|
$
|
%
|
$
|
%
|
||
Tanker
Fleet
|
39,333
|
25,094
|
9,450
|
(14,239)
|
-36.2%
|
(15,644)
|
-62.3%
|
Drybulk
Fleet
|
-
|
-
|
586
|
-
|
-
|
586
|
-
|
Consolidated
Dry-docking Costs
|
39,333
|
25,094
|
10,036
|
(14,239)
|
-36.2%
|
(15,058)
|
-60.0%
|
6.
|
Depreciation
|
Year
Ended December 31,
|
change
|
||||||
2006
|
2007
|
2008
|
YE07
v YE06
|
YE08
v YE07
|
|||
Deprecation
by Segment
|
($
in thousands)
|
$
|
%
|
$
|
%
|
||
Tanker
Fleet
|
35,266
|
26,560
|
13,867
|
(8,706)
|
-24.7%
|
(12,693)
|
-47.8%
|
Drybulk
Fleet
|
-
|
848
|
18,797
|
848
|
-
|
17,949
|
2116.6%
|
Consolidated
Depreciation
|
35,266
|
27,408
|
32,664
|
(7,858)
|
-22.3%
|
5,256
|
19.2%
|
7.
|
Sub
Managers Fees
|
Year
Ended December 31,
|
change
|
||||||
2006
|
2007
|
2008
|
YE07
v YE06
|
YE08
v YE07
|
|||
Sub-Manager
Fees by Segment
|
($
in thousands)
|
$
|
%
|
$
|
%
|
||
Tanker
Fleet
|
2,755
|
1,821
|
1,096
|
(934)
|
-33.9%
|
(725)
|
-39.8%
|
Drybulk
Fleet
|
-
|
7
|
79
|
7
|
-
|
72
|
1028.6%
|
Unallocated
|
-
|
-
|
(16)
|
-
|
-
|
(16)
|
-
|
Consolidated
Sub-Manager Fees
|
2,755
|
1,828
|
1,159
|
(927)
|
-33.6%
|
(669)
|
-36.6%
|
8.
|
Other
General and Administrative Expenses
|
Year
Ended December 31,
|
change
|
||||||
2006
|
2007
|
2008
|
YE07
v YE06
|
YE08
v YE07
|
|||
Other
General and Administrative Expenses by Segment
|
($
in thousands)
|
$
|
%
|
$
|
%
|
||
Tanker
Fleet
|
20,261
|
22,729
|
22,458
|
2,468
|
12.2%
|
(271)
|
-1.2%
|
Drybulk
Fleet
|
-
|
267
|
7,856
|
267
|
-
|
7,589
|
2842.3%
|
Consolidated
Other General and Administrative Expenses
|
20,261
|
22,996
|
30,314
|
2,735
|
13.5%
|
7,318
|
31.8%
|
9.
|
Gain
on sale of vessels
|
Year
Ended December 31,
|
change
|
||||||
2006
|
2007
|
2008
|
YE07
v YE06
|
YE08
v YE07
|
|||
Gain
on Sale of Vessels by Segment
|
($
in thousands)
|
$
|
%
|
$
|
%
|
||
Tanker
Fleet
|
(12,667)
|
(1,961)
|
(21,347)
|
(19,386)
|
988.6%
|
10,706
|
-84.5%
|
Drybulk
Fleet
|
-
|
-
|
2,169
|
2,169
|
-
|
-
|
-
|
Consolidated
Gain on Sale of Vessels
|
(12,667)
|
(1,961)
|
(19,178)
|
(17,217)
|
878.0%
|
10,706
|
-84.5%
|
10.
|
Interest
and Finance Costs
|
11.
|
Gain
/ (loss) on financial instruments
|
Year
Ended December 31,
|
change
|
||||||
2006
|
2007
|
2008
|
YE07
v YE06
|
YE08
v YE07
|
|||
Gain
/ (loss) on Financial Instruments
|
($
in thousands)
|
$
|
%
|
$
|
%
|
||
Fair
value change on financial instruments
|
(2,733)
|
(4,904)
|
(10,650)
|
(2,171)
|
79.4%
|
(5,746)
|
117.2%
|
Swap
Interest
|
588
|
1,200
|
(1,374)
|
612
|
104.1%
|
(2,574)
|
-214.5%
|
Total
Gain / (loss) on Financial Instruments
|
(2,145)
|
(3,704)
|
(12,024)
|
(1,559)
|
72.7%
|
(8,320)
|
224.6%
|
12.
|
Interest
Income
|
Cash
(non restricted)
|
$46.2
|
Other
current assets
|
$10.9
|
Total
current assets
|
$57.1
|
Current
portion of debt
|
$52.5
|
Current
portion of debt (previously categorised as long term)
|
$290.0
|
Other
current liabilities
|
$44.4
|
Total
current liabilities
|
$386.9
|
Long term debt | $ 346.9 |
Interest payments | $ 20.7 |
Newbuilding
instalments
|
$
133.3
|
Operating
leases
|
$
2.0
|
Lease
payments under sale and leasebacks
|
$
23.2
|
Total
requirements:
|
$
526.1
|
The
total capital available as of December 31, 2008 was as follows (figures in
millions):
|
|
Cash – non restricted | $ 46.2 |
Undrawn amount from secured financing for newbuildings | $ 132.2 |
Total
available capital:
|
$
178.4
|
Cash shortfall
(Total
Requirements less Total available capital)
|
$
347.7
|
F.
|
Tabular
Disclosure of Contractual
Obligations
|
Payments due by period
|
||||||||||||||||||||
Contractual Obligations:
|
Total
|
Less than 1
year
|
1-3
years
|
3-5
years
|
More than
5 years
|
|||||||||||||||
(1) (i)
Long term debt (A)
|
$346,907 | $346,907 | - | - | - | |||||||||||||||
(ii)
Interest (B)
|
$20,712 | $20,712 | ||||||||||||||||||
(2)
Newbuildings (C)
|
$133,344 | $133,344 | - | - | - | |||||||||||||||
(3)
Operating leases (D)
|
$18,700 | $2,004 | $2,004 | $2,004 | $12,688 | |||||||||||||||
(4)
Lease payments under sale and leasebacks (E)
|
$57,483 | $23,206 | $23,206 | $8,104 | $2,967 | |||||||||||||||
Total
|
$577,146 | $526,173 | $25,210 | $10,108 | $15,655 | |||||||||||||||
A.
Relates to the outstanding balance as of December 31, 2008, consisting of
1(a) (60.9 million), 1(b) (i) ($53.2 million), 1(b) (ii) ($56.6 million),
1(c) (i) ($41.0 million), 1(c) (ii) ($26.7 million), 1(d) (i) ($37.0
million), 1(d) (ii) ($24.8 million) and 1(e) ($46.7 million), discussed
below.
|
B.
Interest payments are calculated using the Company's average going
interest rate of 5.97%, as of December 31, 2008, which takes
into account additional interest expense from interest rate swaps, applied
on the amortized long term debt as presented in the table
above.
|
C.
Relates to the remaining construction installments for the construction of
six newbuildings.
|
D.
Relates to the minimum rentals payable for the office
space.
|
E.
Relates to remaining lease payments for the five vessels that were sold
and leased back as of December 31,
2008.
|
|
(i)
|
for
a notional amount of $25.4 million, with effective date of June 30, 2005
and for a period of four years, we pay a fixed rate of 4.66%, in order to
hedge portion of the variable interest rate exposure. As of the
date of this annual report this SWAP has
expired.
|
(ii)
|
for
a notional amount of $10.0 million, with effective date of September 30,
2006 and for a period of seven years, with an initial fixed interest rate
of 4.23%, in order to hedge portion of the variable interest rate
exposure.
|
(iii)
|
for
a notional amount of $10.0 million, with effective date of September 30,
2006 and for a period of seven years, with an initial fixed interest rate
of 4.11%, in order to hedge portion of the variable interest rate
exposure.
|
(i-iii)
|
3
swaps for a notional amount, as of December 31, 2008 of $11.2 million,
with effective date of December 12, 2008 and for a period of two years. We
pay a fixed interest rate of 4.80% and receive 3 month Libor, in order to
hedge portion of the variable interest rate exposure of the newbuildings'
loans.
|
(iv)
|
for
a notional amount, as of December 31, 2008, of $7.4 million with effective
date of March 27, 2008 and for a period of five years. If 3 month Libor is
greater than or equal to 4.842105% or lower than 1.5% we pay a fixed
interest rate of 4.6% and receive 3 month libor. If 3 month Libor is
greater than or equal to 1.5% and less than or equal to 4.842105% we pay 3
month Libor multiplied by 0,95 and receive 3 month
libor.
|
(v)
|
for
a notional amount, as of December 31, 2008, of $15.1 million with
effective date of March 27, 2008 and for a period of five years. If 3
month Libor is greater than or equal to 4.842105% or lower than 1.5% we
pay a fixed interest rate of 4.6% and receive 3 month libor. If 3 month
Libor is greater than or equal to 1.5% and less than or equal to 4.842105%
we pay 3 month Libor multiplied by 0,95 and receive 3 month
libor.
|
(vi)
|
for
a notional amount, as of December 31, 2008, of $13.4 million with
effective date of July 15, 2008 and for a period of seven years. We pay
5.55% less a variable which depends on whether the 3 month libor is within
an upper and a lower limit or outside these limits and receive 3 month
libor. Our current swap rollover has been fixed at
5.55%.
|
(vii)
|
for
a notional amount of $15.1 million, with effective date of June 28, 2010
and for a period of four years. We pay a fixed interest rate of 4.73% and
receive 3 month Libor, in order to hedge portion of the variable interest
rate exposure under the Amalfi
loan.
|
-
|
100%
until March 31, 2010
|
-
|
105%
until March 31, 2011
|
-
|
110%
until March 31, 2012
|
-
|
120%
thereafter
|
Number
of non-vested shares
|
Weighted
average grant date fair value per non-vested share
|
|
As
of December 31, 2007
|
213,333
|
$23.97
|
Granted
in 2008
|
2,060,331
|
$5.34
|
Vested
in 2008
|
(157,078)
|
$14.56
|
Forfeited
in 2008
|
(39,322)
|
$12.59
|
As
of December 31, 2008
|
2,077,264
|
$6.42
|
Number
of vested shares
|
|
As
of December 31, 2007
|
229,917
|
Granted
in 2008
|
500,000
|
Non-vested
shares granted in 2007 and 2008, vested during 2008
|
157,078
|
As
of December 31, 2008
|
886,995
|
Title of Class
|
Identity of Person or Group
|
Amount
Owned
|
Percent
of Class
|
Common
Stock, par value $.01 per share
|
Sphinx
Investment Corp.*
|
4,133,333
|
13.99%
|
Maryport
Navigation Corp.*
|
4,133,333
|
13.99%
|
|
George
Economou*
|
4,133,333
|
13.99%
|
|
QVT
Financial LP**
|
2,899,568
|
9.81%
|
|
QVT
Financial GP LLC**
|
2,899,568
|
9.81%
|
|
QVT
Associates GP LLC**
|
2,305,801
|
7.80%
|
|
Kingdom
Holdings Inc.***
|
1,065,393
|
3.60%
|
|
Sovereign
Holdings****
|
2,826,564
|
9.57%
|
|
Evangelos
Pistiolis*****
|
2,826,564
|
9.57%
|
|
Shares
of Officers and directors other than Evangelos Pistiolis
|
567,880
|
1.92%
|
|
All
officers and directors as a group
|
3,394,444
|
11.49%
|
|
|
_______________________
|
*
|
As
of October 24, 2008. Sphinx Investment Corp., Maryport Navigation Corp.
and Mr. Economou may constitute a "group" for reporting purposes of Rule
13d-5 promulgated under the Exchange
Act.
|
**
|
As
of January, 16, 2009. QVT Financial LP, QVT Financial GP LLC and QVT
Associates GP LLC share beneficial ownership of the shares listed in this
table.
|
***
|
A
company owned primarily by adult relatives of our President, Chief
Executive Officer, and Director, Evangelos
Pistiolis.
|
****
|
A
company that is wholly owned by Evangelos
Pistiolis.
|
*****
|
By
virtue of the shares owned directly through Sovereign Holdings
Inc.
|
HIGH
|
LOW
|
|
For
the Fiscal Year Ended December 31, 2008
For
the Fiscal Year Ended December 31, 2007*
For
the Fiscal Year Ended December 31, 2006*
For
the Fiscal Year Ended December 31, 2005*
For
the Fiscal Year Ended December 31, 2004 (beginning July 23,
2004)*
|
$10.62
$25.2
$54.96
$66.00
$72.42
|
$1.40
$9.09
$13.83
$36.81
$31.53
|
For
the Quarter Ended*
|
||
March
31, 2009
December
31, 2008
September
30, 2008
June
30, 2008
March
31, 2008*
December
31, 2007*
September
30, 2007*
June
30, 2007*
March
31, 2007*
|
$2.30
$4.66
$6.31
$10.28
$10.65
$22.23
$25.20
$22.41
$15.75
|
$0.77
$1.40
$3.81
$6.40
$6.06
$9.09
$14.88
$13.44
$13.35
|
(1)
|
we
are organized in a foreign country, or our country of organization, that
grants an "equivalent exemption" to corporations organized in the United
States; and
|
(2)
|
either
|
|
(A)
|
more
than 50% of the value of our stock is owned, directly or indirectly, by
individuals who are "residents" of our country of organization or of
another foreign country that grants an "equivalent exemption" to
corporations organized in the United States, which we refer to as the "50%
Ownership Test," or
|
|
(B)
|
our
stock is "primarily and regularly traded on an established securities
market" in our country of organization, in another country that grants an
"equivalent exemption" to United States corporations, or in the United
States, which we refer to as the "Publicly-Traded
Test".
|
|
•
|
We
have, or are considered to have, a fixed place of business in the United
States involved in the earning of shipping income;
and
|
|
•
|
substantially
all of our U.S. source 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.
|
|
•
|
is
a United States citizen or resident, United States corporation or other
United States entity taxable as a corporation, an estate the income of
which is subject to United States federal income taxation regardless of
its source, or a trust if a court within the United States is able to
exercise primary jurisdiction over the administration of the trust and one
or more United States persons have the authority to control all
substantial decisions of the
trust,
|
|
•
|
owns
the common stock as a capital asset, generally, for investment purposes,
and
|
|
•
|
owns
less than 10% of our common stock for United States federal income tax
purposes.
|
|
•
|
at
least 75% of our gross income for such taxable year consists of passive
income (e.g., dividends, interest, capital gains and rents derived other
than in the active conduct of a rental business),
or
|
|
•
|
the
excess distribution or gain would be allocated ratably over the
Non-Electing Holders aggregate holding period for the common
stock;
|
|
•
|
the
amount allocated to the current taxable year would be taxed as ordinary
income;
and
|
|
•
|
the
amount allocated to each of the other taxable years would be subject to
tax at the highest rate of tax in effect for the applicable class of
taxpayer for that year, and an interest charge for the deemed deferral
benefit would be imposed with respect to the resulting tax attributable to
each such other taxable
year.
|
|
•
|
the
gain is effectively connected with the Non-U.S. Holder's conduct of a
trade or business in the United States. If the Non-U.S. Holder is entitled
to the benefits of an income tax treaty with respect to that gain, that
gain is taxable only if it is attributable to a permanent establishment
maintained by the Non-U.S. Holder in the United States;
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 other
conditions are
met.
|
|
•
|
fail
to provide an accurate taxpayer identification
number;
|
|
•
|
are
notified by the Internal Revenue Service that you have failed to report
all interest or dividends required to be shown on your federal income tax
returns;
or
|
|
•
|
in
certain circumstances, fail to comply with applicable certification
requirements.
|
Counterparty
|
Nr
|
Notional
Amount
|
Period
|
Effective
Date
|
Interest
Rate
Payable
|
Fair
Value – Asset
(Liability)
|
||||||||||||||||
31-Dec-07
|
31-Dec-08
|
|||||||||||||||||||||
RBS
|
1
|
$ | 25,357 |
4
years
|
30-Jun-05
|
4.66 | % | $ | (240 | ) | $ | (270 | ) | |||||||||
HSH
NORDBANK
|
2
|
$ | 11,193 |
2
years
|
12-Dec-08
|
4.80 | % | $ | (701 | ) | ||||||||||||
HSH
NORDBANK
|
3
|
$ | 11,193 |
2
years
|
12-Dec-08
|
4.80 | % | $ | (779 | ) | $ | (701 | ) | |||||||||
HSH
NORDBANK
|
4
|
|
$ | 11,193 |
2
years
|
12-Dec-08
|
4.80 | % | $ | (701 | ) | |||||||||||
RBS
|
5
|
$ | 10,000 |
7
years
|
30-Sep-06
|
4.23 | % | $ | (514 | ) | $ | (1,852 | ) | |||||||||
RBS
|
6
|
|
$ | 10,000 |
7
years
|
30-Sep-06
|
4.11 | % | $ | (461 | ) | $ | (1,812 | ) | ||||||||
DEUTSCHE
|
7
|
$ | 50,000 |
6
years
|
28-Sep-07
|
- | $ | (3,530 | ) | - | ||||||||||||
EGNATIA
|
8
|
$ | 10,000 |
7
years
|
3-Jul-06
|
4.76 | % | $ | (588 | ) | $ | (1,650 | ) | |||||||||
HSH
NORDBANK
|
9
|
$ | 15,072 |
5
years
|
27-Mar-08
|
3.03 | % | - | $ | (732 | ) | |||||||||||
HSH
NORDBANK
|
10
|
|
$ | 7,443 |
5
years
|
27-Mar-08
|
4.60 | % | - | $ | (468 | ) | ||||||||||
EMPORIKI
|
11
|
$ | 20,000 |
7
years
|
15-May-08
|
5.50 | % | - | $ | (3,944 | ) | |||||||||||
HSH
NORDBANK
|
12
|
$ | 13,359 |
7
years
|
15-Jul-08
|
5.44 | % | - | $ | (2,344 | ) | |||||||||||
HSH
NORDBANK
|
13
|
$ | 15,108 |
4
years
|
28-Jun-10
|
- | - | $ | (1,263 | ) | ||||||||||||
$ | (6,112 | ) | $ | (16,438 | ) | |||||||||||||||||
c)
|
Report
of Independent Registered Public Accounting
Firm
|
d)
|
Changes
in Internal Control over Financial
Reporting
|
|
•
|
The
Company holds annual meetings of shareholders under the BCA, similar to
NASDAQ
requirements.
|
|
•
|
In
lieu of obtaining an independent review of related party transactions for
conflicts of interests, the disinterested members of the Board of
Directors approve related party transactions under the
BCA.
|
|
•
|
In
lieu of obtaining shareholder approval prior to the issuance of designated
securities, the Company complies with provisions of the BCA requiring that
the Board of Directors approves share
issuances.
|
Page
|
||
Report
of Independent Registered Public Acc
ou
nting
Firm
|
F-
2
|
|
Consolidated
Balance Sheets as of December 31, 2007 and 2008
|
F-3
|
|
Consolidated
Statements of Operations
for
the years ended December 31, 2006, 2007 and 2008
|
F-4
|
|
Consolidated
Statements of Stockholders' Equity
for
the years ended December 31, 2006, 2007 and 2008
|
F-5
|
|
Consolidated
Statements of Cash Flows
for
the years ended December 31, 2006, 2007 and 2008
|
F-6
|
|
Notes
to Consolidated Financial Statements
|
F-7
|
|
Schedule
I – Condensed Financial Information of Top Ships Inc. (Parent Company
Only)
|
F-52
|
TOP
SHIPS INC.
|
||||||||||||
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
||||||||||||
FOR
THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
|
||||||||||||
(Expressed
in thousands of U.S. Dollars - except share and per share
data)
|
||||||||||||
2006
|
2007
|
2008
|
||||||||||
REVENUES:
|
||||||||||||
Revenues
(Notes 4 and 11)
|
310,043 | $ | 252,259 | $ | 257,380 | |||||||
EXPENSES:
|
||||||||||||
Voyage
expenses (Note 19)
|
55,351 | 59,414 | 38,656 | |||||||||
Charter
hire expense (Note 6)
|
96,302 | 94,118 | 53,684 | |||||||||
Amortization
of deferred gain on sale and leaseback of vessels (Note 6)
|
(8,110 | ) | (15,610 | ) | (18,707 | ) | ||||||
Other
vessel operating expenses (Note 19)
|
66,082 | 67,914 | 67,114 | |||||||||
Dry-docking
costs
|
39,333 | 25,094 | 10,036 | |||||||||
Depreciation
(Note 10)
|
35,266 | 27,408 | 32,664 | |||||||||
Sub-Manager
fees (Note 1)
|
2,755 | 1,828 | 1,159 | |||||||||
Other
general and administrative expenses
|
20,261 | 22,996 | 30,314 | |||||||||
Foreign
currency (gains) / losses, net
|
255 | 176 | (85 | ) | ||||||||
Gain
on sale of vessels (Note 10)
|
(12,667 | ) | (1,961 | ) | (19,178 | ) | ||||||
Operating
income (loss)
|
15,215 | (29,118 | ) | 61,723 | ||||||||
OTHER
INCOME (EXPENSES):
|
||||||||||||
Interest
and finance costs (Notes 12 and 20)
|
(27,030 | ) | (19,518 | ) | (25,764 | ) | ||||||
Gain
/ (loss) on financial instruments (Note 12)
|
(2,145 | ) | (3,704 | ) | (12,024 | ) | ||||||
Interest
income
|
3,022 | 3,248 | 1,831 | |||||||||
Other,
net
|
(67 | ) | 16 | (127 | ) | |||||||
Total
other expenses, net
|
(26,220 | ) | (19,958 | ) | (36,084 | ) | ||||||
Net
Income (loss)
|
(11,005 | ) | $ | (49,076 | ) | $ | 25,639 | |||||
Earnings
(loss) per share, basic and diluted (Note 18)
|
(1.16 | ) | $ | (4.09 | ) | $ | 1.01 | |||||
Weighted
average common shares outstanding, basic
|
10,183,424 | 11,986,857 | 25,445,031 | |||||||||
Weighted
average common shares outstanding, diluted
|
10,183,424 | 11,986,857 | 25,445,031 |
TOP
SHIPS INC.
|
||||||||||
CONSOLIDATED
STATEMENTS OF STOCKHOLDERS' EQUITY
|
||||||||||
FOR
THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
|
||||||||||
(Expressed
in thousands of U.S. Dollars - except share and per share
data)
|
Common
Stock
|
||||||||||||||||||||||||||||
Comprehensive
Income
|
#
of Shares
|
Par
Value
|
Additional
Paid-in
Capital
|
Accumulated
Other
Comprehensive
Income (loss)
|
Retained
Earnings
/
(Accumulated
Deficit)
|
Total
|
||||||||||||||||||||||
BALANCE,
December
31, 2005
|
9,360,213 | $ | 94 | $ | 297,902 | $ | 98 | $ | 61,053 | $ | 359,147 | |||||||||||||||||
Net
loss
|
$ | (11,005 | ) | 0 | 0 | 0 | - | (11,005 | ) | (11,005 | ) | |||||||||||||||||
Dividends
paid
(US
dollars 0.21 per share)
|
0 | 0 | 0 | 0 | - | (5,923 | ) | (5,923 | ) | |||||||||||||||||||
Dividends
paid
(US
dollars 5.00 per share)
|
0 | 0 | 0 | (141,028 | ) | - | 0 | (141,028 | ) | |||||||||||||||||||
Dividends
paid
(US
dollars 2.50 per share)
|
0 | 0 | 0 | (70,515 | ) | - | 0 | (70,515 | ) | |||||||||||||||||||
Issuance
of restricted shares, net of forfeitures
|
0 | 147,034 | 1 | 3,709 | - | 0 | 3,710 | |||||||||||||||||||||
Issuance
of common stock
|
0 | 1,302,454 | 13 | 26,903 | - | 0 | 26,916 | |||||||||||||||||||||
Other
comprehensive income
|
||||||||||||||||||||||||||||
-
Accumulated unrecognized actuarial losses
|
0 | 0 | 0 | 0 | (6 | ) | 0 | (6 | ) | |||||||||||||||||||
-
Reclassification of gains to earnings due to discontinuance of cash flow
hedges
|
(98 | ) | 0 | 0 | 0 | (98 | ) | 0 | (98 | ) | ||||||||||||||||||
Comprehensive
loss
|
$ | (11,103 | ) | |||||||||||||||||||||||||
BALANCE,
December
31, 2006
|
10,809,701 | $ | 108 | $ | 116,971 | $ | (6 | ) | $ | 44,125 | $ | 161,198 | ||||||||||||||||
Net
loss
|
$ | (49,076 | ) | 0 | 0 | 0 | - | (49,076 | ) | (49,076 | ) | |||||||||||||||||
Issuance
of restricted shares, net of forfeitures
|
0 | 213,000 | 2 | 933 | - | 0 | 935 | |||||||||||||||||||||
Issuance
of common stock
|
0 | 9,485,874 | 95 | 98,246 | - | 0 | 98,341 | |||||||||||||||||||||
Other
comprehensive income
|
||||||||||||||||||||||||||||
-
Accumulated unrecognized actuarial gain
|
10 | 0 | 0 | 0 | 10 | 0 | 10 | |||||||||||||||||||||
Comprehensive
loss
|
$ | (49,066 | ) | |||||||||||||||||||||||||
BALANCE,
December
31, 2007
|
20,508,575 | $ | 205 | $ | 216,150 | $ | 4 | $ | (4,951 | ) | $ | 211,408 | ||||||||||||||||
Net
income
|
$ | 25,639 | - | - | - | - | 25,639 | 25,639 | ||||||||||||||||||||
Issuance
of restricted shares, net of forfeitures
|
- | 2,521,009 | 9 | 5,107 | - | - | 5,116 | |||||||||||||||||||||
Cancellation
of fractional shares
|
- | (279 | ) | - | (2 | ) | - | - | (2 | ) | ||||||||||||||||||
Repurchase
and cancellation of common stock (396.949 shares)
|
(396,949 | ) | (4 | ) | (727 | ) | (731 | ) | ||||||||||||||||||||
Issuance
of common stock
|
- | 7,268,692 | 73 | 50,528 | - | - | 50,601 | |||||||||||||||||||||
Other
comprehensive income
|
||||||||||||||||||||||||||||
-
Accumulated unrecognized actuarial gain
|
20 | - | - | - | 20 | - | 20 | |||||||||||||||||||||
Comprehensive
income
|
$ | 25,659 | ||||||||||||||||||||||||||
BALANCE,
December
31, 2008
|
29,901,048 | $ | 283 | $ | 271,056 | $ | 24 | $ | 20,688 | $ | 292,051 |
TOP
SHIPS INC.
|
|||||||
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|||||||
FOR
THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
|
(Expressed
in thousands of U.S. Dollars)
|
||||||||||||
2006
|
2007
|
2008
|
||||||||||
Cash
Flows from (used in) Operating Activities:
|
||||||||||||
Net
income (loss)
|
(11,005 | ) | (49,076 | ) | 25,639 | |||||||
Adjustments
to reconcile net income to net cash
|
||||||||||||
provided
by operating activities:
|
||||||||||||
Depreciation
|
35,594 | 28,043 | 33,474 | |||||||||
Amortization
and write off of deferred financing costs
|
4,534 | 2,081 | 5,131 | |||||||||
Stock-based
compensation expense
|
3,710 | 935 | 5,116 | |||||||||
Change
in fair value of financial instruments
|
3,711 | 4,904 | 10,650 | |||||||||
Amortization
of deferred gain on sale and leaseback of vessels
|
(8,110 | ) | (15,610 | ) | (18,707 | ) | ||||||
Amortization
of fair value of below market time charter
|
(1,413 | ) | (21,795 | ) | ||||||||
(Gain)
/ Loss on sale of other fixed assets
|
(10 | ) | 69 | 126 | ||||||||
Gain
on sale of vessels
|
(12,667 | ) | (1,961 | ) | (19,178 | ) | ||||||
Provision
for Doubtful Accounts
|
508 | 1,302 | 3,142 | |||||||||
(Increase)
Decrease in:
|
||||||||||||
Trade
accounts receivable
|
11,832 | 10,701 | 7,834 | |||||||||
Insurance
claims
|
11 | (1,656 | ) | (3,569 | ) | |||||||
Inventories
|
(152 | ) | (1,498 | ) | 6,993 | |||||||
Advances
to various creditors
|
(624 | ) | 2,599 | 332 | ||||||||
Prepayments
and other
|
(4,270 | ) | (374 | ) | 874 | |||||||
Increase
(Decrease) in:
|
||||||||||||
Accounts
payable
|
2,586 | 6,350 | (12,428 | ) | ||||||||
Accrued
liabilities
|
(1,142 | ) | (1,460 | ) | (4,451 | ) | ||||||
Unearned
revenue
|
(3,436 | ) | 4,774 | 164 | ||||||||
Financial
instrument termination payments
|
- | - | (7,500 | ) | ||||||||
Net
Cash from (used in) Operating Activities
|
21,070 | (11,290 | ) | 11,847 | ||||||||
Cash
Flows from (used in) Investing Activities:
|
||||||||||||
Principal
payments received under capital lease
|
46,000 | |||||||||||
Principal
payments paid under capital lease
|
- | (68,828 | ) | |||||||||
Advances
for vessels acquisition / under construction
|
(28,683 | ) | (37,343 | ) | (114,260 | ) | ||||||
Vessel
acquisitions and improvements
|
(18 | ) | (355,045 | ) | (118,142 | ) | ||||||
Insurance
claims recoveries
|
- | 1,852 | 3,447 | |||||||||
Increase
in restricted cash
|
(36,500 | ) | - | (26,075 | ) | |||||||
Decrease
in restricted cash
|
- | 23,500 | - | |||||||||
Net
proceeds from sale of vessels
|
599,176 | 51,975 | 338,143 | |||||||||
Net
proceeds from sale of fixed assets
|
255 | 74 | 58 | |||||||||
Acquisition
of other fixed assets
|
(2,639 | ) | (3,295 | ) | (1,792 | ) | ||||||
Net
Cash from (used in) Investing Activities
|
531,591 | (318,282 | ) | 58,551 | ||||||||
Cash
Flows used in (from) Financing Activities:
|
||||||||||||
Proceeds
from long-term debt
|
20,000 | 316,851 | 271,156 | |||||||||
Principal
payments of long-term debt
|
(19,119 | ) | (26,955 | ) | (51,413 | ) | ||||||
Prepayment
of long-term debt
|
(350,399 | ) | (65,582 | ) | (317,150 | ) | ||||||
Financial
instrument upfront receipt
|
8,500 | 1,500 | ||||||||||
Issuance
of common stock, net of issuance costs
|
26,916 | 98,341 | 50,601 | |||||||||
Cancellation
of fractional shares
|
- | - | (2 | ) | ||||||||
Repurchase
and cancellation of common stock
|
(731 | ) | ||||||||||
Payment
of financing costs
|
(63 | ) | (5,563 | ) | (4,129 | ) | ||||||
Dividends
paid
|
(217,466 | ) | - | |||||||||
Net
Cash used in (from) Financing Activities
|
(540,131 | ) | 325,592 | (50,168 | ) | |||||||
Net
increase (decrease) in cash and cash equivalents
|
12,530 | (3,980 | ) | 20,230 | ||||||||
Cash
and cash equivalents at beginning of year
|
17,462 | 29,992 | 26,012 | |||||||||
Cash
and cash equivalents at end of year
|
29,992 | 26,012 | 46,242 | |||||||||
SUPPLEMENTAL
CASH FLOW INFORMATION
|
||||||||||||
Interest
paid
|
22,307 | 13,731 | 19,616 | |||||||||
SUPPLEMENTAL
DISCLOSURE OF NON-CASH INVESTING ACTIVITIES
|
||||||||||||
Fair
value of below market time charter
|
0 | 30,612 | 12,647 | |||||||||
Amounts
owed for capital expenditures
|
0 | 1,215 | 55 | |||||||||
Shipowning
Companies
with vessels sold |
Date
of
Incorporation |
Country
of
Incorporation |
Vessel
|
|
1
|
Olympos
Shipping Company Limited
|
December
1999
|
British
Cayman Islands
|
Med
Prologue (sold to "Olympos Shipping Company Limited")
|
2
|
Vermio
Shipping Company Limited ("Faithful")
|
December
2001
|
Marshall
Islands
|
Faithful
(sold to "Gramos Shipping Company Inc" - July 2003)
|
3
|
Kalidromo
Shipping Company Limited ("Kalidromo")
|
May
2003
|
Marshall
Islands
|
Tireless
(sold - September 2004)
|
4
|
Olympos
Shipping Company Limited ("Olympos")
|
May
2003
|
Marshall
Islands
|
Med
Prologue (sold - December 2004)
|
5
|
Rupel
Shipping Company Inc. ("Rupel")
|
January
2003
|
Marshall
Islands
|
Fearless
(sold - July 2005)
|
6
|
Helidona
Shipping Company Limited ("Helidona")
|
May
2003
|
Marshall
Islands
|
Yapi
(sold - September 2005)
|
7
|
Mytikas
Shipping Company Ltd. ("Mytikas")
|
February
2004
|
Marshall
Islands
|
Limitless
(sold - September 2008) (Note 6, 10)
|
8
|
Litochoro
Shipping Company Ltd. ("Litochoro")
|
March
2004
|
Marshall
Islands
|
Endless
(sold - September 2008) (Note 6, 10)
|
9
|
Vardousia
Shipping Company Ltd. ("Vardousia")
|
July
2004
|
Cyprus
|
Invincible
(sold by its new owners - July 2007) (Note 6)
|
10
|
Psiloritis
Shipping Company Ltd. ("Psiloritis")
|
July
2004
|
Liberia
|
Victorious
(sold by its new owners - August 2007) (Note 6)
|
11
|
Menalo
Shipping Company Ltd. ("Menalo")
|
July
2004
|
Cyprus
|
Restless
(sold by its new owners - September 2007) (Note 6)
|
12
|
Pintos
Shipping Company Ltd. ("Pintos")
|
July
2004
|
Cyprus
|
Sovereign
(sold by its new owners - August 2008) (Note 6)
|
13
|
Pylio
Shipping Company Ltd. ("Pylio")
|
July
2004
|
Liberia
|
Flawless
(sold by its new owners - September 2008) (Note 6)
|
14
|
Taygetus
Shipping Company Ltd. ("Taygetus")
|
July
2004
|
Liberia
|
Timeless
(sold by its new owners - September 2008) (Note 6)
|
15
|
Imitos
Shipping Company Limited
("Imitos")
|
November
2004
|
Marshall
Islands
|
Noiseless
(sold - January 2008) (Note 6, 10)
|
16
|
Parnis
Shipping Company Limited
("Parnis")
|
November
2004
|
Marshall
Islands
|
Stainless
(sold - January 2008) (Note 6)
|
17
|
Parnasos
Shipping Company Limited
("Parnasos")
|
November
2004
|
Liberia
|
Faultless
(sold by its new owners - March 2008) (Note 6)
|
18
|
Vitsi
Shipping Company Limited
("Vitsi")
|
November
2004
|
Liberia
|
Stopless
(sold by its new owners - September 2008) (Note
6)
|
19
|
Kisavos
Shipping Company Limited
("Kisavos")
|
November
2004
|
Marshall
Islands
|
Priceless
(sold by its new owners - September 2008) (Note 6)
|
20
|
Agion Oros Shipping Company Limited
("Agion Oros")
|
February
2005
|
Marshall
Islands
|
Topless
(sold - December
2006)
|
|
TOP
SHIPS INC.
|
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
DECEMBER
31, 2007 AND 2008
|
|
(Expressed in
thousands of United States Dollars – except share and per share data,
unless otherwise stated)
|
21
|
Giona
Shipping Company Limited (
"
Giona
"
)
|
March
2005
|
Marshall
Islands
|
Taintless
(sold – November 2006)
|
22
|
Agrafa
Shipping Company Limited (
"
Agrafa
"
)
|
March
2005
|
Marshall
Islands
|
Soundless
(sold – November 2006)
|
23
|
Ardas
Shipping Company Limited (
"
Ardas
"
)
|
April
2005
|
Marshall
Islands
|
Errorless
(sold – April 2007)
|
24
|
Nedas
Shipping Company Limited (
"
Nedas
"
)
|
April
2005
|
Marshall
Islands
|
Stormless
(sold – June 2008) (Note 10)
|
25
|
Kifisos
Shipping Company Li
mited
(
"
Kifisos
"
)
|
April
2005
|
Marshall
Islands
|
Edgeless
(sold – July 2008) (Note 10)
|
26
|
Sperhios
Shipping Company Limited (
"
Sperhios
"
)
|
April
2005
|
Marshall
Islands
|
Ellen
P. (sold – September 2008) (Note 10)
|
27
|
Noir
Shipping S.A. (
"
Noir
"
)
|
June
2007
|
Marshall
Islands
|
Bertram
(sold – April 2008) (Note 10,
11
)
|
Shipowning
Companies with sold and leased back vessels at December 31,
2008
|
Date
of
Incorporation |
Country
of
Incorporation |
Vessel
|
|
28
|
Gramos
Shipping Company Inc. ("Gramos")
|
January
2003
|
Marshall
Islands
|
Faithful
(sold and leased back - March 2006) (Note 6)
|
29
|
Falakro
Shipping Company Ltd. ("Falakro")
|
July
2004
|
Liberia
|
Doubtless
(sold and leased back - March 2006) (Note 6)
|
30
|
Pageon
Shipping Company Ltd. ("Pageon")
|
July
2004
|
Cyprus
|
Vanguard
(sold and leased back - March 2006) (Note 6)
|
31
|
Idi
Shipping Company Ltd. ("Idi")
|
July
2004
|
Liberia
|
Spotless
(sold and leased back - March 2006) (Note 6)
|
32
|
Parnon
Shipping Company Ltd. ("Parnon")
|
July
2004
|
Cyprus
|
Relentless
(sold and leased back - September 2005) (Note 6, 23)
|
Shipowning
Companies with vessels
in operations at December 31, 2008 |
Date
of
Incorporation |
Country
of
Incorporation |
Vessel
|
|
33
|
Lefka
Shipping Company Limited (
"
Lefka
"
)
|
March
2005
|
Marshall
Islands
|
Dauntless
(acquired – March 2005)
|
34
|
Ilisos
Shipping Company Limited (
"
Ilisos
"
)
|
April
2005
|
Marshall
Islands
|
Ioannis
P. (acquired in November 2005)
|
35
|
Amalfi
Shipping Company Limited (
"
Amalfi
"
)
|
July
2007
|
Marshall
Islands
|
Amalfi
(acquired – December 2007) (Note 11)
|
36
|
Jeke
Shipping
Company
Limited (
"
Jeke
"
)
|
July
2007
|
Liberia
|
Voc
Gallant (acquired – February 2008) (Note 10, 11)
|
37
|
Japan
I Shipping Company Limited (
"
Japan
I
"
)
|
August
2007
|
Liberia
|
Pepito
(acquired – March 2008) (Note 10)
|
38
|
Japan
II Shipping Company Limited (
"
Japan
II
"
)
|
August
2007
|
Liberia
|
Astrale
(acquired
–
May
2008) (Note
6
,
10
)
|
39
|
Japan
III Shipping Company Limited (
"
Japan
III
"
)
|
August
2007
|
Liberia
|
Cyclades
(acquired – December 2007)
|
Shipowning
Companies with vessels under construction at December 31,
2008
|
Date
of
Incorporation |
Country
of
Incorporation |
Vessel
|
|
40
|
Warhol
Shipping Company Limited ("Warhol")
|
July
2008
|
Liberia
|
Miss
Marilena (delivered - February 2009) (Note 9,
23)
|
41
|
Lichtenstein
Shipping Company Limited ("Lichtenstein")
|
July
2008
|
Liberia
|
L
ichtenstein
(delivered February 2009) (Note
9
,
23)
|
42
|
Banksy
Shipping Company Limited ("Banksy")
|
July
2008
|
Liberia
|
Ionian
Wave (delivered March 2009) (Note 9, 23)
|
43
|
Indiana
R Shipping Company Limited ("
Indiana
R")
|
July
2008
|
Liberia
|
Tyrrhenian
Wave (delivered March 2009) (Note 9, 23)
|
44
|
Britto
Shipping Company Limited ("Britto")
|
July
2008
|
Liberia
|
Britto
(delivered May 2009) (Note
9
,
23)
|
45
|
Hongbo
Shipping Company Limited ("Hongbo")
|
July
2008
|
Liberia
|
Hull
No.
S-1033
|
Other
Companies
|
Date
of
Incorporation |
Country
of
Incorporation |
Activity
|
|
46
|
Top
Tankers (U.K.) Limited
|
January
2005
|
England
and Wales
|
Representative
office in London
|
47
|
Top
Bulker Management Inc
|
April
2005
|
Marshall
Islands
|
Inactive
Management Company
|
48
|
TOP
Tanker Management Inc
|
May
2004
|
Marshall
Islands
|
Management
Company
|
49
|
Ierissos
Shipping Inc
|
November
2008
|
Marshall
Islands
|
Cash
Manager
|
|
TOP
SHIPS INC.
|
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
DECEMBER
31, 2007 AND 2008
|
|
(Expressed
in thousands of United States Dollars – except share and per share data,
unless otherwise stated)
|
(a)
|
Principles
of Consolidation:
The
accompanying consolidated financial statements have been prepared in
accordance with U.S generally accepted accounting principles ("US GAAP")
and include the accounts and operating results of Top Ships Inc. and
its wholly-
owned
subsidiaries referred t
o
in Note 1. Intercompany balances and transactions have been
eliminated in
consolidation.
|
(b)
|
Use
of
Estimates
:
The
preparation of consolidated financial statements in conformity with U.S
generally accepted accounting principles requires management to
ma
ke
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the consolidated financial statements and the reported amounts of
revenues and expenses during the r
e
porting
period. Actual results could differ from those
estimates.
|
(c)
|
Other
Comprehensive
Income
(Loss):
The
Company follows the provisions of Statement of Financial Accounting
Standards "Statement of Comprehensive Income" (SFAS 130), which
requires separ
ate
presentation of certain transactions, which are recorded directly as
components of stockholders'
equity.
|
(d)
|
Foreign
Currency Translation:
The
Company's functional currency is the U.S. Dollar because all vessels
operate in international shipping marke
ts,
and therefore primarily transact business in U.S. Dollars. The Company's
books of accounts are maintained in U.S. Dollars. Transactions involving
other currencies during the year are converted into U.S. Dollars using the
exchange rates in effect at th
e
time
of the transactions. At the balance sheet dates, monetary assets and
liabilities, which are denominated in other currencies, are translated to
reflect the year-end exchange rates. Resulting gains or losses are
reflected separately in the accompanyin
g
consolidated
statements of
operations.
|
(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: The Company considers amounts that are pledged, blocked, held as cash collateral, required to be maintained with a specific bank or be maintained by the Company as an overall cash position as part of a loan agreement, as restricted (Notes 6, 12 and 13 ). |
(g)
|
Trade
Accounts Receivable, net:
The
amount shown as Trade Accounts Receivable, net at each balance sheet date,
includes estimated recoveries from charterers for hire, freight and
demurrage billings, net of a provision for doubtful accounts. At each
balance sheet date, all potentially u
n
collectible
accounts are assessed individually, combined with the application of a
historical recoverability ratio, for purposes of determining the
appropriate provision for doubtful accounts. Provision for doubtful
accounts at December 31, 2007 and 2008
t
otalled
$801 and $3,275, and is summarized as
follows:
|
|
TOP
SHIPS INC.
|
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
DECEMBER
31, 2007 AND 2008
|
|
(Expressed
in thousands of United States Dollars – except share and per share data,
unless otherwise stated)
|
Provision
for
doubtful accounts |
|
Balance,
December 31, 2005
|
316
|
—
Additions
|
508
|
—
Reversals
/ write-offs
|
(541)
|
Balance,
December 31, 2006
|
283
|
—
Additions
|
1,302
|
—
Reversals
/ write-offs
|
(784)
|
Balance,
December 31, 2007
|
801
|
—
Additions
|
3,866
|
—
Reversals
/ write-offs
|
(1,392)
|
Balance,
December 31, 2008
|
3,275
|
(h)
|
Insurance
Claims:
Insurance
claims, relating mainly to crew medical expenses and hull and machinery
incidents are recorded upon collection or agreement with the relevant
party of the collectible
amount.
|
|
(i)
|
Inventories
:
Inventories
consist of bunkers, lubricants and consumable stores which are stated at
the lower of cost or market. Cost, which consists of the purchase price,
is determined by the first in, first out
method.
|
|
(j)
|
Vessel
Cost:
Vessels
are stated at cost, w
hich
consists of the contract price, pre-delivery costs incurred during the
construction of newbuildings, capitalized interest and any material
expenses incurred upon acquisition (improvements and delivery costs).
Subsequent expenditures for conversions a
n
d
major improvements are also capitalized when they appreciably extend the
life, increase the earning capacity or improve the efficiency or safety of
the vessels. Repairs and maintenance are charged to expense as incurred
and are included in Other vessel
o
perating
expenses in the accompanying consolidated statements of
operations.
|
(k)
|
Impairment
of Long-Lived Assets:
Long-lived
assets are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of the asset
may
not
be recoverable. When the estimate of undiscounted cash flows, excluding
interest charges is expected to be generated by the use of the asset is
less than the asset's carrying amount, the Company
performs an analysis of the anticipated undiscounted
f
uture
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. Various
factors including future charter rates and vessel o
p
erating
costs are included in this analysis. The Company did not note for 2006 and
2007, any events or changes in circumstances indicating that the carrying
amount of its vessels may not be recoverable. However, in the
fourth quarter of 2008, market cond
i
tions
changed significantly as a result of the credit crisis and resulting
slowdown in world trade. Charter rates for both drybulk carriers and
tanker vessels fell significantly and values of assets were significantly
affected although there were limited
t
ransactions
to confirm that. The Company considered these market developments as
indicators of potential impairment of the carrying amount of its assets.
The Company performed the undiscounted cash flow test as of December 31,
2008 for its vessels held fo
r
use
and determined that the carrying amount of those vessels were not
impaired.
|
|
TOP
SHIPS INC.
|
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
DECEMBER
31, 2007 AND 2008
|
|
(Expressed
in thousands of United States Dollars – except share and per share data,
unless otherwise stated)
|
|
(l)
|
Assets
Held for
Sale
:
It
is the Company's policy to dispose of vessels when suitable opportunities
occur and not n
ecessarily
to keep them until the end of their useful life. The Company classifies
vessels as being held for sale when: management has committed to a plan to
sell the vessels; the vessels are available for immediate sale in their
present condition; an act
i
ve
program to locate a buyer and other actions required to complete the plan
to sell the vessels have been initiated; the sale of the vessels is
probable, and transfer of the asset is expected to qualify for recognition
as a completed sale within one year
;
the
vessels are being actively marketed for sale at a price that is reasonable
in relation to their current fair value and actions required to complete
the plan to sell indicate that it is unlikely that significant changes to
the plan will be made or tha
t
the
plan will be withdrawn. Long-lived assets classified as held for sale are
measured at the lower of their carrying amount or fair value less cost to
sell. These vessels are not depreciated once they meet the criteria to be
classified as held for sale.
At
December 31, 2007, the tanker vessel M/T Noiseless was classified as held
for sale and its carrying amount of $46,268 is separately reflected in the
2007 accompanying consolidated balance sheet. No vessels were
determined to be held for sale at Decemb
e
r
31, 2008.
|
(m)
|
Vessel
Depreciation:
Depreciation
is calculated using the straight-line method over the estimated useful
life of the vessels, after deducting the estimated salvage value. Each
vessel's salvage value is equal to the product of its
lightweig
ht
tonnage and estimated scrap rate. Management estimates the useful life of
the Company's vessels to be 25 years from the date of initial
delivery from the shipyard. Second hand vessels are depreciated from the
date of their acquisition through their rem
a
ining
estimated useful life. When regulations place limitations over the ability
of a vessel to trade on a worldwide basis, its useful life is adjusted at
the date such regulations are
adopted.
|
(n)
|
Other
Fixed Assets, Net:
Other fixed assets, net consists of furniture,
office equipment, cars and leasehold improvements, stated at cost, which
consists of the purchase / contract price less accumulated depreciation.
Depreciation is calculated using the straight-line method over the
estimated useful life of the assets, while leasehold improvements are
depreciated over the lease term, as presented
below:
|
Description
|
Useful
Life (years)
|
|
Leasehold
improvements
|
12
|
|
Cars
|
6
|
|
Office
equipment
|
5
|
|
Furniture
and fittings
|
5
|
|
Computer
equipment
|
3
|
(o)
|
Accounting
for Dry-Docking Costs:
All
dry-docking costs are accounted for under the direct expense
method, under which they are expensed as incurred and
are
reflected separately in the accompanying consolidated statements of
operations.
|
(p)
|
Sale
and Leaseback Transactions:
The
gains on sale of vessel sale and leaseback transactions are deferred and
amortized to income over the lease
period.
|
(q)
|
Financing
Costs:
Fees
incurred and paid to the lenders for obtaining new loans or refinancing
existing ones are recorded as a contra to debt and such fees are amortized
to
|
|
TOP
SHIPS INC.
|
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
DECEMBER
31, 2007 AND 2008
|
|
(Expressed
in thousands of United States Dollars – except share and per share data,
unless otherwise stated)
|
2.
|
Significant
Accounting Policies -
(continued):
|
|
interest
expense over the life of the related debt using the effective interest
method. Unamortized fees relating to loans repaid or refinanced are
expensed when a repayment or refinancing is made and charged to interest
and finance costs.
|
(r)
|
Pension
and Retirement Benefit Obl
igations
—
Crew:
The
ship-owning companies included in the consolidation, employ the crew on
board, under short-term contracts (usually up to nine months) and
accordingly, they are not liable for any pension or post retirement
benefits.
|
|
(s)
|
Staff
leaving Indemnities –
Administrative
personnel:
The Company's employees are entitled to termination
payments in the event of dismissal or retirement with the amount of
payment varying in relation to the employee's compensation, length of
service and manner of termination (dismissed or retired). Employees who
resign, or are dismissed with cause are not entitled to termination
payments. The Company's liability on an actuarially determined basis, at
December 31, 2007 and 2008 amounted to $288 and $258,
respectively.
|
(t)
|
Accounting
for Revenue and Expenses:
Revenues
are generated from voyage and time charter agreements. Time charter
revenues are recorded over the term of the charter as service is provided.
Profit sharing represents the excess between an agreed daily base rate and
the actual rate generated by the vessel every quarter, if any, and is
settled and recorded on a quarterly basis. Under a voyage charter the
revenues, including demurrages and associated voyage costs, with the
exception of port expenses which are recorded as incurred, are recognized
on a proportionate performance method over the duration of the voyage. A
voyage is deemed to commence upon the latest between the completion of
discharge of the vessel's previous cargo and the charter party date of the
current voyage and is deemed to end upon the completion of discharge of
the current cargo. Demurrage income represents payments by the charterer
to the Company when loading or discharging time exceeded the stipulated
time in the voyage charter. Vessel operating expenses are accounted for on
the accrual basis. Unearned revenue represents cash received prior to
year-end related to revenue applicable to periods after December 31
of each year.
|
|
When
vessels are acquired with time charters attached and the rates on such
charters are below market on the acquisition date, the Company allocates
the total cost between the vessel and the fair value of below market time
charter based on the relative fair values of the vessel and the liability
acquired. The fair value of the attached time charter is computed as the
present value of the difference between the contractual amount to be
received over the term of the time charter and management's estimates of
the market time charter rate at the time of acquisition. The fair value of
below market time charter is amortized over the remaining period of the
time charter as an increase to
revenues.
|
(u)
|
Stock
Incentive Plan:
All share-based compensation related to the grant
of restricted shares provided to employees and to non-employee directors,
for their services as directors, is included in Other general and
administrative expenses in the consolidated statements of operations. The
shares that do not contain any future service vesting conditions are
considered vested shares and recognized in full on the grant date. The
shares that contain a time-based service vesting condition are considered
non-vested shares on the grant date and recognized on a straight-line
basis over the vesting period. The shares, vested and non-vested are
measured at fair value, which is equal to the market value of the
Company's common stock on the grant
date.
|
(v)
|
Earnings
per Share:
Basic
earnings per share are computed by dividing net
income
by the weighted average number of common shares deemed outstanding during
the year. Diluted
earnings per share reflect the potential dilution
that could occur if securities or other contracts to issue common stock
were exercised.
|
(w)
|
Related
Parties:
The
Company considers as related parties the affiliates of the Company;
entities for which investments are accounted for by the equity method;
principal owners of the Company; its management; members of the immediate
families of principal
owners
of the Company; and other parties with which the Company may deal if one
party controls or can significantly influence the management or operating
policies of the other to an extent that one of the transacting parties
might be prevented from fully
p
ursuing
its own separate interests.
Another party also is a related party if it can significantly influence
the management or operating policies of the transacting parties and can
significantly influence the other to an extent that one or more of
th
e
transacting
parties might be prevented from fully pursuing its own separate interests.
An Affiliate is a party that, directly or indirectly through one or more
intermediaries, controls, is controlled by, or has common control with the
Company. Control is
the
possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of an enterprise through
ownership, by contract and otherwise. Immediate Family is family members
whom a principal owner or a member of manage
m
ent
might control or influence or by whom they might be controlled or
influenced because of the family relationship. Management is the persons
who are responsible for achieving the objectives of the Company and who
have the authority to establish policies
and
make decisions by which those objectives are to be pursued. Management
normally includes members of the board of directors, the CEO, the CFO,
Vice President in charge of principal business functions and other persons
who perform similar policy making
f
unctions.
Persons without formal titles may also be members of management. Principal
owners are owners of record or known beneficial owners of more than 10% of
the voting interests of the
Company.
|
(x)
|
Derivatives
: The
SFAS No. 133, "Accounting for Deriv
ative
Instruments and Hedging Activities" as amended, establishes accounting and
reporting standards requiring that every derivative instrument (including
certain derivative instruments embedded in other contracts) be recorded in
the balance sheet as eith
e
r
an asset or liability measured at its fair value, with changes in the
derivatives' fair value recognized currently in earnings unless specific
hedge accounting criteria are met. The Company has not applied hedge
accounting for its derivative instruments
during
the periods
presented.
|
(y)
|
Segment
Reporting:
In
2007, the Company diversified its fleet portfolio by adding drybulk
vessels to the Company's fleet. Management, including the c
hief
operating decision maker, reviews operating results by vessel type. As a
result the Company's acquisition of drybulk vessels in the fourth quarter
of 2007 has resulted in the Company determining that it operates under two
reportable segments, as a pr
o
vider
of international seaborne transportation services, carrying petroleum
products and crude oil ("Tanker Fleet") and, drybulk commodities for the
steel, electric utility, construction and agri-food industries ("Drybulk
Fleet"). Consequently, the Compan
y
did
not present segment information for 2006. The accounting policies applied
to the reportable segments are the same as those used in the preparation
of the Company's consolidated financial statements.
The
Company's chief operating decision maker started
reviewing
interest expense by segment beginning in
2008
|
|
when
interest expense for its dry bulk vessels became significant. The 2007
segment disclosure has also been revised to include interest
expense.
|
|
The
Company reports financial information and evaluates its operations by
charter revenues and not by the length of ship employment for its
customers (i.e., spot or time charters) or by geographical region as the
charterer is free to trade the vessel worl
d
wide
and, as a result, the disclosure of geographic information is
impracticable. The Company does not have discrete financial information to
evaluate the operating results for each such type of charter. Although
revenue can be identified for these types
o
f
charters, management cannot and does not identify expenses, profitability
or other financial information for these
charters.
|
(aa)
|
Recent
Accounting
Pronouncements:
|
(a)
|
FASB
Statement No. 157:
In September 2006, the FASB issued SFAS
No. 157, "Fair Value Measurement" ("SFAS 157"). SFAS 157
addresses standardizing the measurement of fair value for companies that
are required to use a fair value measure of recognition for recognition or
disclosure purposes. The FASB defines fair value as "the price that would
be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measure date". SFAS 157 is
effective for financial statements issued for fiscal years beginning after
November 15, 2007. The Company has adopted SFAS 157 effective
January 1, 2008 and the adoption of this statement did not have a material
effect on the Company's financial position, results of operations and cash
flows. In February 2008, the FASB issued FASB Staff Position ("FSP") FASB
157-2 "Effective Date of FASB Statement No. 157" ("FSP FASB 157-2"). FSP
FASB 157-2, which was effective upon issuance, delays the effective date
of SFAS 157 for nonfinancial assets and liabilities, except for items
recognized or disclosed at fair value at least once a year, to fiscal
years beginning after November 15, 2008. FSP FASB 157-2 also covers
interim periods within the fiscal years for items within the scope of this
FSP. The adoption of this statement in the first quarter of 2009 did not
have a material effect on the Company's financial position, results of
operations and cash flows. On October 10, 2008, the FASB issued the
proposed FSP FAS 157-3, "Determining the Fair Value of a Financial Asset
When the Market for That Asset Is Not Active", ("FSP FAS 157-3"), on an
expedited basis to clarify the application of FASB Statement No. 157,
"Fair Value Measurements", in a market that is not active and provides an
example to illustrate key considerations in determining the fair value of
a financial asset when the market for that financial asset is not active.
FSP FAS 157-3 was effective upon issuance including prior periods for
which financial statements have not been issued. The Company has
incorporated this new guidance as it relates to the Company's derivative
instruments. The adoption of SFAS 157-3 did not have a material impact on
the Company's financial
statements.
|
(b)
|
FSP
EITF 03-6-1:
In June 2008, the FASB issued FSP No. EITF 03-6-1,
"Determining Whether Instruments Granted in Share-Based Payment
Transactions Are Participating Securities" ("FSP EITF 03-6-1"). FSP EITF
03-6-1 concludes that unvested share-based payment awards that contain
rights to receive non-forfeitable dividends or dividend equivalents are
participating securities, and thus, should be included in the two-class
method of computing earnings per share ("EPS"). FSP EITF 03-6-1 is
effective for fiscal years beginning after December 15, 2008, and interim
periods within those years. Early application of EITF 03-6-1 is
prohibited. It also requires that all prior-period EPS data be adjusted
retrospectively. The Company has adopted EITF 03-6-1 effective January 1,
2009 and the adoption of this statement will result in a decrease of $0.04
in the basic and diluted earnings per share for the year ended December
31, 2008 once retroactively adjusted in 2009. When EITF 03-6-1 was
retrospectively applied to the years ended December 31, 2006 and 2007 EPS
data was not affected due to the fact that the Company was incurring
losses.
|
(c)
|
FASB
Statement No. 159:
In February 2007, the FASB issued SFAS No. 159,
"The Fair Value Option for Financial Assets and Financial Liabilities"
("SFAS 159"), which permits entities to choose to measure many financial
instruments and certain other items at fair value. SFAS 159 is effective
as of the beginning of an entity's first fiscal year that begins after
November 15, 2007. Earlier adoption is permitted as of the beginning of a
fiscal year that begins on or before November 15, 2007, provided the
entity also elects to apply the provisions of FASB Statement No. 157,
"Fair Value Measurements". The Company has not elected to use the Fair
Value Option under SFAS
159.
|
(d)
|
FASB
Statement No. 141R:
In December 2007, the FASB issued SFAS No.
141R, "Business Combinations" ("SFAS 141R"). SFAS 141R establishes
principles and requirements on how the acquirer in a business combination
recognizes and measures in its financial statements the identifiable
assets acquired, the liabilities assumed and any noncontrolling interest
in the entity acquired. In addition, SFAS 141R provides guidance on the
recognition and measurement of goodwill acquired in the business
combination or a gain from a bargain purchase as well as what information
to disclose to enable users of the financial statements to evaluate the
nature and financial impact of the business combination. SFAS 141R is
effective for fiscal years beginning after December 15, 2008 and was
adopted by the Company in the first quarter of fiscal year 2009. The
adoption of SFAS 141R did not have a material effect on the Company's
financial position, results of operations and cash flows.
.
|
(e)
|
FASB
Statement No. 160:
In December 2007, the FASB issued SFAS No. 160,
"Noncontrolling Interests in Consolidated Financial Statements - an
Amendment of ARB No. 51" ("SFAS 160"). SFAS 160 establishes principles and
requirements on how to treat the portion of equity in a subsidiary that is
not attributable directly or indirectly to a parent. This is commonly
known as a minority interest. The objective of SFAS 160 is to improve
relevance, comparability, and transparency concerning ownership interests
in subsidiaries held by parties other than the parent by providing
disclosures that clearly identify between interests of the parent and
interest of the noncontrolling owners and the related impacts on the
consolidated statement of operations and the consolidated statement of
financial position. SFAS 160 also provides guidance on disclosures related
to changes in the parent's ownership interest and deconsolidation of a
subsidiary. SFAS 160 is effective for fiscal years beginning after
December 15, 2008, and was adopted by the Company in the first quarter of
fiscal year 2009. The adoption of SFAS 160 did not have a material effect
on the Company's financial position, results of operations and cash
flows.
|
(f)
|
FASB
Statement No. 161:
In March 2008, the FASB issued SFAS No. 161,
"Disclosures about Derivative Instruments and Hedging Activities". The new
standard is intended to improve financial reporting about derivative
instruments and hedging activities by requiring enhanced disclosures to
enable investors to better understand their effects on an entity's
financial position, financial performance, and cash flows. It
is
|
|
TOP
SHIPS INC.
|
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
DECEMBER
31, 2007 AND 2008
|
|
(Expressed
in thousands of United States Dollars – except share and per share data,
unless otherwise stated)
|
(g)
|
FASB
Statement No. 162:
In May 2008 the FASB issued SFAS No. 162, "The
Hierarchy of Generally Accepted Accounting Principles" ("FASB No. 162").
In June 2009 FASB issued a Statement, "The Hierarchy of Generally Accepted
Accounting Principles—a replacement of FASB Statement No. 162". The new
standards identify the sources of accounting principles and the framework
for selecting the principles used in the preparation of financial
statements by establishing two levels of US GAAP: authoritative and
nonauthoritative. This would be accomplished by authorizing the "FASB
Accounting Standards Codification". On July 1, 2009, the "FASB
Accounting Standards Codification" will become the single source of
authoritative nongovernmental US GAAP, superseding existing FASB, American
Institute of Certified Public Accountants (AICPA), Emerging Issues Task
Force (EITF), and related literature. After that date, only one level of
authoritative GAAP will exist. All other literature will be considered
non-authoritative. The Codification does not change US GAAP;
instead, it introduces a new structure-one that is organized in an easily
accessible, user-friendly online research system. We do not expect that
the new FASB Accounting Standards Codification of US GAAP will have an
effect on our consolidated statement of financial position, results of
operations or cash
flows.
|
(h)
|
FASB
Statement No. 165:
On May 28, 2009, the FASB issued SFAS
No. 165 "Subsequent Events"("SFAS 165"), which provides guidance on
management's assessment of subsequent events. SFAS
165:
|
Year ended
December 31, 2007
|
Tanker
Fleet
|
Drybulk
Fleet
|
Unallocated
(1)
|
Total
|
||||||||||||
REVENUES:
|
||||||||||||||||
Revenues
|
248,944 | 1,902 | 1,413 | 252,259 | ||||||||||||
EXPENSES:
|
||||||||||||||||
Voyage
expenses
|
59,253 | 161 | - | 59,414 | ||||||||||||
Charter
hire expense
|
94,118 | - | - | 94,118 | ||||||||||||
Amortization
of deferred gain on sale and leaseback of vessels
|
(15,610 | ) | - | - | (15,610 | ) | ||||||||||
Other
vessel operating expenses
|
67,225 | 689 | - | 67,914 | ||||||||||||
Dry-docking
costs
|
25,094 | - | - | 25,094 | ||||||||||||
Depreciation
|
26,560 | 848 | - | 27,408 | ||||||||||||
Sub-Manager
fees
|
1,821 | 7 | - | 1,828 | ||||||||||||
Other
general and administrative expenses
|
22,729 | 267 | - | 22,996 | ||||||||||||
Foreign
currency gains (losses), net
|
- | - | 176 | 176 | ||||||||||||
Gain
on sale of vessels
|
(1,961 | ) | - | - | (1,961 | ) | ||||||||||
Operating
income (loss)
|
(3 0,285 | ) | (70 | ) | 1,237 | (29,118 | ) | |||||||||
Interest
and finance costs
|
(17,464 | ) | (2,054 | ) | - | (19,518 | ) | |||||||||
Segment
income (loss)
|
(47,749 | ) | (2,124 | ) | 1,237 | (48,636 | ) | |||||||||
Fair
value change of financial instruments
|
(3,704 | ) | ||||||||||||||
Interest
income
|
3,248 | |||||||||||||||
Other,
net
|
16 | |||||||||||||||
Net
Loss
|
(49,076 | ) |
(1)
Unallocated amounts relate to the drybulk vessels’ amortization of the
fair value of below market time charter contracts acquired of $1,413 less
the foreign currency losses, net of $176. These amounts are unallocated as
they are not included in the financial information used by the chief
operating decision maker to allocate the Company’s
resources.
|
Year ended
December 31, 2008
|
Tanker
Fleet
|
Drybulk
Fleet
|
Unallocated
(1)
|
Total
|
||||||||||||
REVENUES:
|
||||||||||||||||
Revenues
|
163,995 | 71,590 | 21,795 | 257,380 | ||||||||||||
EXPENSES:
|
||||||||||||||||
Voyage
expenses
|
34,215 | 4,441 | - | 38,656 | ||||||||||||
Charter
hire expense
|
53,684 | - | - | 53,684 | ||||||||||||
Amortization
of deferred gain on sale and leaseback of vessels
|
(18,707 | ) | - | - | (18,707 | ) | ||||||||||
Other
vessel operating expenses
|
56,272 | 10,842 | - | 67,114 | ||||||||||||
Dry-docking
costs
|
9,450 | 586 | - | 10,036 | ||||||||||||
Depreciation
|
13,867 | 18,797 | - | 32,664 | ||||||||||||
Sub-Manager
fees
|
1,096 | 79 | (16 | ) | 1,159 | |||||||||||
Other
general and administrative expenses
|
22,458 | 7,856 | - | 30,314 | ||||||||||||
Foreign
currency gains (losses), net
|
- | - | (85 | ) | (85 | ) | ||||||||||
Gain
on sale of vessels
|
(21,347 | ) | 2,169 | - | (19,178 | ) | ||||||||||
Operating
income
|
13,007 | 26,820 | 21,896 | 61,723 | ||||||||||||
Interest
and finance costs
|
(11,888 | ) | (13,876 | ) | - | (25,764 | ) | |||||||||
Segment
income
|
1,119 | 12,944 | 21,896 | 35,959 | ||||||||||||
Fair
value change of financial instruments
|
(12,024 | ) | ||||||||||||||
Interest
income
|
1,831 | |||||||||||||||
Other,
net
|
(127 | ) | ||||||||||||||
Net
Income
|
25,639 |
(1)
Unallocated amounts relate to the drybulk vessels' amortization of the
fair value of below market time charter contracts acquired of $21,795, the
management fees related to the management of third party vessels of $16
less the foreign currency gains, net of $85. These amounts are unallocated
as they are not included in the financial information used by the chief
operating decision maker to allocate the Company's
resources.
|
Charterer
|
Year
Ended December 31,
|
||||
2006
|
2007
|
2008
|
|||
A
|
11%
|
-
|
|||
B
|
29%
|
23%
|
17%
|
||
C
|
-
|
10%
|
Year
ended December 31, 2007
|
Tanker
Fleet
|
Drybulk
Fleet
|
Unallocated
(1)
|
Total
|
||||||||||||||
Trade
accounts receivable, net
|
14,867 | 317 | 15,184 | |||||||||||||||
Vessel
held for sale
|
46,268 | 46,268 | ||||||||||||||||
Vessels,
net
|
355,228 | 198,663 | 553,891 | |||||||||||||||
Long-term
debt (2)
|
305,818 | 133,066 | 438,884 | |||||||||||||||
Total
assets at December 31, 2007
|
504,147 | 223,186 | 49,584 | 776,917 | ||||||||||||||
Cash
paid for vessels
|
187,360 | 167,685 | - | 355,045 |
(1)
Unallocated mainly relates to cash and cash equivalents (including
restricted cash) of $41,566 and other fixed assets of $5,711, which are
not allocated to individual segments.
|
||||||||
|
||||||||
(2)
Current and long-term portion of long term debt are $107,488 and $331,396,
respectively.
|
||||||||
Year
ended December 31, 2008
|
Tanker
Fleet
|
Drybulk
Fleet
|
Unallocated
(1)
|
Total
|
||||||||||||||
Trade
accounts receivable, net
|
4,418 | (210 | ) | - | 4,208 | |||||||||||||
Vessels,
net
|
79,056 | 335,459 | - | 414,515 | ||||||||||||||
Current
portion of long-term debt
|
165,965 | 176,514 | - | 342,479 | ||||||||||||||
Total
assets at December 31, 2008
|
275,932 | 351,331 | 71,112 | 698,375 | ||||||||||||||
Cash
paid for vessels
|
- | 118,142 | - | 118,142 |
(1)
Unallocated mainly relates to cash and cash equivalents (including
restricted cash) of $61,389 and other fixed assets of $6,545, which are
not allocated to individual segments.
|
||||||||
|
5.
|
Transactions
with Related Parties:
|
(a)
|
Pyramis
Technical Co. S.A.:
In January 2006 the Company entered into an
agreement to lease office space in Athens, Greece, with an unrelated
party. The change in office location, due to necessary refurbishments,
took place in October 2006. In April and August 2006, the Company entered
into an agreement with Pyramis Technical Co. S.A., for the renovation of
the new premises. As of December 31, 2007, the total contracted cost
amounted to Euro 2,499 or $3,686 (based on the Dollar/Euro exchange rate
as of December 31, 2007), out of which Euro 2,855, inclusive of the
applicable VAT, or $3,767 (based on the Dollar/Euro exchange rate as of
December 31, 2007) was paid up to December 31, 2007 and is included in the
$3,872 renovation works. As of December 31, 2008, the total contracted
cost amounted to Euro 2,959 or $4,112 (based on the Dollar/Euro exchange
rate as of December 31, 2008), out of which Euro 3,402, inclusive of the
applicable VAT, or $4,555 (based on the Dollar/Euro exchange rate as of
December 31, 2008) was paid up to December 31, 2008 and is included in the
$4,698 renovation works. The renovation works are included in Other fixed
assets, net, which are separately presented in the accompanying December
31, 2008 consolidated balance sheet and are depreciated over the lease
period, which is 12 years.
|
|
|
(b)
|
Cardiff
Marine Inc. ("Cardiff"):
Both
Cardiff and Sphinx Investment Corp. are controlled by Mr. George Economou
who has been a related party since April 2008, when we privately placed
7.3 million with various investors (Note 16). As of December 31, 2008,
Sphinx Investment Corp. holds approximately 13.82% of the Company's
outstanding common stock. Cardiff provides the Company with chartering and
sale and purchase brokerage services. During the twelve months ended
December 31, 2008, Cardiff charged the Company $4,245 and $570 for
commissions for vessels' acquisitions, included in Vessels, net and
chartering services and in Voyage expenses, respectively. As of December
31, 2008, the amount due to Cardiff was $197, which is included in Accrued
Liabilities.
|
A.
|
LEASE
ARRANGEMENTS, UNDER WHICH THE COMPANY ACTS AS THE
LESSEE
|
|
i)
|
Sale
and Leaseback of Vessels:
|
|
(a)
|
In 2005, the Company
sold the vessels Restless, Sovereign, Relentless, Invincible and
Victorious and realized a total gain of $17,159. The Company entered into
bareboat charter agreements to leaseback the same five vessels for a
period of seven years.
The
Company and the owner/lessor of vessels Invincible, Victoriou
s,
Restless and Sovereign mutually agreed to terminate the bareboat charters,
following the sale of vessels to third parties. The termination of the
bareboat charters became effective upon the vessels' delivery to their new
owners, on July 11, 2007, Augus
t
27, 2007, September 17, 2007 and August 14, 2008, respectively. Following
the bareboat charter termination in August 2008, $1,404, net of $480 of
sale expenses is included in Amortization of deferred gain on sale of
vessels in the 2008 accompanying conso
l
idated
statement of
operations.
|
(b)
|
In
2006, the Company sold the vessels Flawless, Timeless, Priceless,
Stopless, Doubtless, Vanguard, Faithful, Spotless, Limitless, Endless,
Stainless, Faultless and Noiseless to three unrelated parties
(buyers/lessors) for $550,000; of which 90% or $495,000 was received upon
closing of the sale. Simultaneous with the sale of the vessels, the
Company entered into bareboat charter agreements to leaseback the same
vessels for a period of five to seven years with no lease renewal option.
Another unrelated party assumed in June 2006 the rights and obligations of
one of the buyers/lessors through a novation agreement with no other
changes to the terms and conditions of the
agreements.
|
Year
ending December 31,
|
Bareboat
Charter
|
Office
Lease
|
Total
|
|||
2009
|
23,206
|
2,004
|
25,210
|
|||
2010
|
23,206
|
2,004
|
25,210
|
|||
2011
|
8,104
|
2,004
|
10,108
|
|||
2012
|
2,967
|
2,004
|
4,971
|
|||
2013
|
-
|
2,004
|
2,004
|
|||
2014
and thereafter
|
-
|
8,680
|
8,680
|
|||
57,483
|
18,700
|
76,183
|
|
TOP
SHIPS INC.
|
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
DECEMBER
31, 2007 AND 2008
|
|
(Expressed
in thousands of United States Dollars – except share and per share data,
unless otherwise stated)
|
B.
|
LEASE
ARRANGEMENTS, UNDER WHICH THE COMPANY ACTS AS THE
LESSOR
|
Year
ending December 31,
|
Time
Charter receipts
|
||
2009
|
89,658
|
||
2010
|
53,461
|
||
2011
|
30,398
|
||
2012
|
18,630
|
||
2013
and thereafter
|
4,879
|
||
197,026
|
December
31, 2007
|
December
31, 2008
|
|||
Bunkers
|
5,723
|
-
|
||
Lubricants
|
1,839
|
795
|
||
Consumable
stores
|
396
|
170
|
||
7,958
|
965
|
December
31, 2007
|
December
31, 2008
|
|||
Prepaid
expenses
|
3,013
|
1,087
|
||
Other
receivables
|
2,567
|
3,637
|
||
5,580
|
4,724
|
Construction
installments
|
Acquisitions
|
Capitalized
interest
|
Capitalized
costs
|
Total
|
||||||||||||||||
Balance,
December 31, 2006
|
28,638 | - | 34 | 11 | 28,683 | |||||||||||||||
-
Additions
|
14,169 | 20,250 | 2,661 | 263 | 37,343 | |||||||||||||||
Balance,
December 31, 2007
|
42,807 | 20,250 | 2,695 | 274 | 66,026 | |||||||||||||||
-
Transfer to vessel cost / obligations under capital lease
|
- | (20,250 | ) | - | (65 | ) | (20,315 | ) | ||||||||||||
-
Additions
|
109,229 | 3,873 | 1,158 | 114,260 | ||||||||||||||||
Balance,
December 31, 2008
|
152,036 | - | 6,568 | 1,367 | 159,971 |
|
TOP
SHIPS INC.
|
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
DECEMBER
31, 2007 AND 2008
|
|
(Expressed
in thousands of United States Dollars – except share and per share data,
unless otherwise stated)
|
Vessel
Cost
|
Accumulated
Depreciation
|
Net
Book
Value
|
||||||||||
Balance,
December 31, 2006
|
331,324 | (24,906 | ) | 306,418 | ||||||||
—
Vessel
held for sale
|
(48,582 | ) | 2,314 | (46,268 | ) | |||||||
—
Acquisitions
|
371,162 | - | 371,162 | |||||||||
—
Disposals
|
(55,638 | ) | 5,625 | (50,013 | ) | |||||||
—
Depreciation
|
- | (27,408 | ) | (27,408 | ) | |||||||
Balance,
December 31, 2007
|
598,266 | (44,375 | ) | 553,891 | ||||||||
—
Acquisitions
|
219,934 | - | 219,934 | |||||||||
—
Disposals
|
(371,039 | ) | 44,393 | (326,646 | ) | |||||||
—
Depreciation
|
- | (32,664 | ) | (32,664 | ) | |||||||
Balance,
December 31, 2008
|
447,161 | (32,646 | ) | 414,515 |
|
During
July 2007, the Company entered into an agreement to acquire one 2002 built
super Handymax, or Supramax, drybulk vessel of 51,200 dwt, built in
China
from
unrelated third party, with an attached time charter contract. The vessel
(M/V Voc Gallant) was delivered to the Company on February 1, 2008 and was
chartered back to the sellers for a period of 18 months at a daily net
rate of $25,650 on a bareboat basis. The purchase price of the vessel with
the attached time charter was
$54,500.
|
|
On
May 1, 2008, the Company took delivery of the drybulk vessel M/V
Astrale.
|
|
TOP
SHIPS INC.
|
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
DECEMBER
31, 2007 AND 2008
|
|
(Expressed
in thousands of United States Dollars – except share and per share data,
unless otherwise stated)
|
Borrower(s)
|
December
31, 2007
|
December
31, 2008
|
|||
(a)
|
The
Company
|
194,367
|
60,599
|
||
(b)
|
Myticas
|
27,863
|
-
|
||
(c)
|
Litochoro
|
27,863
|
-
|
||
(d)
|
Imitos
|
27,863
|
-
|
||
(e)
|
Parnis
|
27,863
|
-
|
||
(f)
|
Noir
|
27,826
|
-
|
||
(g)
|
Amalfi
|
57,490
|
24,570
|
||
(h)
|
Japan
III
|
47,749
|
36,816
|
||
(i)
|
Jeke
|
-
|
28,074
|
||
(j)
|
Japan
I
|
-
|
46,522
|
||
(k)
|
Japan
II
|
-
|
40,532
|
||
(l)
|
Lichtenstein
|
-
|
24,489
|
||
(m)
|
Warhol
|
22,697
|
|||
(n)
|
Indiana
|
16,266
|
|||
(o)
|
Britto
|
16,266
|
|||
(p)
|
Banksy
|
16,169
|
|||
(q)
|
Hongbo
|
9,479
|
|||
Total
|
438,884
|
342,479
|
|||
Less-
current portion
|
(107,488)
|
(342,479)
|
|||
Long-term
portion
|
331,396
|
-
|
|
TOP
SHIPS INC.
|
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
DECEMBER
31, 2007 AND 2008
|
|
(Expressed
in thousands of United States Dollars – except share and per share data,
unless otherwise stated)
|
|
Scheduled
Principal Repayments:
The
annual principal payments required to be made after December 31, 2008, are
as follows:
|
Year
ending December 31,
|
Amount
|
||
2009
|
346,907
|
||
Excluding
unamortized financing fees
|
(4,428)
|
||
342,479
|
|
Interest
Rate Swaps:
The
fair value of the interest rate swaps in the accompanying consolidated
balance sheets are analyzed as
follows:
|
SWAP
|
Notional
Amount
|
Period
|
Effective
Date
|
Fair
Value - Asset
(Liability) |
||
December
31, 2007 |
December
31, 2008 |
|||||
(i)
|
$25,357
|
4
years
|
June
30, 2005
|
4.66%
|
($240)
|
($270)
|
$11,193
|
2
years
|
December
12, 2008
|
4.80%
|
($701)
|
||
(ii)
|
$11,193
|
2
years
|
December
12, 2008
|
4.80%
|
($779)
|
($701)
|
$11,193
|
2
years
|
December
12, 2008
|
4.80%
|
($701)
|
||
(iii)
|
$10,000
|
7
years
|
September
30, 2006
|
4.23%
|
($514)
|
($1,852)
|
(iv)
|
$10,000
|
7
years
|
September
30, 2006
|
4.11%
|
($461)
|
($1,812)
|
(v)
|
$50,000
|
6
years
|
September
28, 2007
|
-
|
($3,530)
|
-
|
(vi)
|
$10,000
|
7
years
|
July
3, 2006
|
4.76%
|
($588)
|
($1,650)
|
(vii)
|
$15,072
|
5
years
|
March
27, 2008
|
3.03%
|
-
|
($732)
|
(viii)
|
$7,443
|
5
years
|
March
27, 2008
|
4.60%
|
-
|
($468)
|
(ix)
|
$20,000
|
7
years
|
May
15, 2008
|
5.50%
|
-
|
($3,944)
|
(x)
|
$13,359
|
7
years
|
July
15, 2008
|
5.44%
|
-
|
($2,344)
|
(xi)
|
$15,108
|
4
years
|
June
28, 2010
|
-
|
-
|
($1,263)
|
($6,112)
|
($16,438)
|
13.
|
Other
current Liabilities:
|
|
Interest
Rate Derivative Product:
In
November 2007, the Company entered into an interest rate
derivative
product. Under this agreement, the Company received an upfront payment of
$8,500 and would have to pay five annual interest payments on a notional
amount of $85,000. Based on the cumulative performance of a portfolio of
systematic foreign exchange trading strategies, the interest payments
would have a minimum floor at 0.00% and a cap at
7.50%.
|
|
On
September 15, 2008, the parent company of the counterparty in this
derivative product, announced its intention to file a petition under
Chapter 11 of the U.S. Bankruptcy Code with the United States Bankruptcy
Court for the Southern District of New York. Soon after this announcement,
the Company initiated discussions with the counterparty in order to
examine the potential effect of this bankruptcy on the Company's
liability.
On December 30, 2008 the Company signed an
agreement with the counterparty terminating the interest rate derivative
product against a one-off termination payment of $5,00
0
by the Company. As of December 31, 2008 the Company classified the $5,000
termination payment within its current liabilities representing the fair
value of the interest rate derivative product as of that date. This
payment was made on January 5,
2009.
|
|
The
termination of the interest rate derivative product resulted in a gain of
$10,215 recorded under the fair value change of financial instruments
(discussed in Note 12), which is separately reflected in the accompanying
consolidated statements of operat
ions.
|
|
TOP
SHIPS INC.
|
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
DECEMBER
31, 2007 AND 2008
|
|
(Expressed
in thousands of United States Dollars – except share and per share data,
unless otherwise stated)
|
14.
|
Accrued
Liabilities:
|
December
31, 2007
|
December
31, 2008
|
|||||||
Interest
on long-
term
debt
|
2,261 | 2,289 | ||||||
Vessel
operating and voyage expenses
|
6,935 | 3,255 | ||||||
General
and administrative expenses
|
2,710 | 1,891 | ||||||
Total
|
11,906 | 7,435 |
|
i.
|
Gran
ts
to Company's CEO.
The Company's CEO shall not sell, assign,
exchange, transfer, pledge, hypothecate or otherwise dispose of or
encumber any of the Shares other than to a company, which is wholly owned
by the Company's CEO. The restrictions lapse on the earlier of (i) one
year from the grant date or (ii) termination of the Company's CEO
employment with the Company for any
reason.
|
ii.
|
Grants
to Other Participants.
The Participants (
officers,
independent members of the Board
and Company's employees) shall not
sell, assign, exchange, transfer, pledge, hypothecate or otherwise dispose
of or encumber any of the Shares. The restrictions lapse on one year from
the grant date conditioned upon the Participant's continued employment
with the Company from the date of the agreement (i.e. July 1, 2005,
January 3, 2006, or July 6, 2006) until the date the restrictions lapse
(the "restricted
period").
|
Number
of non-vested
shares |
Weighted
average grant
date fair value per non-vested share |
|
As
of December 31, 2007
|
213,333
|
$23.97
|
Granted
in 2008
|
2,060,331
|
$5.34
|
Vested
in 2008
|
(157,078)
|
$14.56
|
Forfeited
in 2008
|
(39,322)
|
$12.59
|
As
of December 31, 2008
|
2,077,264
|
$6.42
|
Number
of vested shares
|
|
As
of December 31, 2007
|
229,917
|
Granted
in 2008
|
500,000
|
Non-vested
shares granted in 2007 and 2008, vested during 2008
|
157,078
|
As
of December 31, 2008
|
886,995
|
Type
of
Shares granted |
Quarterly
Dividend per share |
Special
Dividend per share |
Total
Dividends
|
Paid
in year ended
December 31, 2006 |
|||
Vested
|
0.63
|
22.50
|
2,082
|
Non-vested
|
0.63
|
22.50
|
807
|
Year
Ended December 31,
|
||||||||||||
2006
|
2007
|
2008
|
||||||||||
Net
Income (loss) as reported:
|
$ | (11,005 | ) | $ | (49,076 | ) | $ | 25,639 | ||||
Less:
Dividends declared during the year for non-vested shares
|
(807 | ) | - | - | ||||||||
Net
income (loss) available to common shareholders
|
$ | (11,812 | ) | $ | (49,076 | ) | $ | 25,639 | ||||
Weighted
average common shares outstanding, basic
|
10,183,424 | 11,986,857 | 25,445,031 | |||||||||
Add:
Dilutive effect of non-vested shares
|
- | - | - | |||||||||
Weighted
average common shares outstanding, diluted
|
10,183,424 | 11,986,857 | 25,445,031 | |||||||||
Earnings
(loss) per share, basic and diluted
|
$ | (1.16 | ) | $ | (4.09 | ) | $ | 1.01 | ||||
Voya
ge
Expenses
|
Year
Ended December 31,
|
|||||||||||
2006
|
2007
|
2008
|
||||||||||
Port
charges
|
11,265 | 15,473 | 5,377 | |||||||||
Bunkers
|
33,937 | 36,867 | 23,877 | |||||||||
Commissions
|
10,149 | 7,074 | 9,402 | |||||||||
Total
|
55,351 | 59,414 | 38,656 |
Other
Vessel Operating Expenses
|
Year
Ended December 31,
|
|||||||||||
2006
|
2007
|
2008
|
||||||||||
Crew
wages and related costs
|
26,919 | 27,721 | 26,673 | |||||||||
Insurance
|
7,000 | 6,191 | 7,210 | |||||||||
Repairs
and maintenance
|
16,330 | 18,758 | 19,791 | |||||||||
Spares
and consumable stores
|
15,668 | 15,177 | 13,294 | |||||||||
Taxes
(Note 21)
|
165 | 67 | 146 | |||||||||
Total
|
66,082 | 67,914 | 67,114 |
Year
Ended December 31,
|
||||||||||||
2006
|
2007
|
2008
|
||||||||||
Interest
on long-
term
debt (Note 12)
|
21,372 | 19,223 | 22,143 | |||||||||
Less:
Capitalized interest (Note 9)
|
(34 | ) | (2,661 | ) | (3,873 | ) | ||||||
Interest
on capital leases (Note 6)
|
- | - | 1,219 | |||||||||
Commitment
fees
|
392 | |||||||||||
Bank
charges
|
1,158 | 875 | 752 | |||||||||
Amortization
and write-
off
of financing fees
|
4,534 | 2,081 | 5,131 | |||||||||
Total
|
27,030 | 19,518 | 25,764 |
(a)
|
Interest
rate risk:
The
Company's interest rates and long-term loan repayment terms are described
in
Note 12.
|
(c)
|
Fair
value
:
The
carrying values of cash and cash equivalents, accou
nts
receivable and accounts payable are reasonable estimates of their fair
value due to the short-term nature of these financial instruments. The
fair value of long-term bank loans discussed in Note 12 bearing interest
at variable interest rates approxima
t
es
the recorded value. The carrying value of the interest rate swap
agreements and the interest rate derivative product represents their fair
value as the fair value estimates the amount the Company would have paid,
had the interest rate swap agreements a
n
d
the interest rate derivative product been terminated on the balance sheet
date.
|
SWAP
|
Notional
Amount
|
Period
|
Effective
Date
|
Fair Value - Asset
(Liability) |
||
December
31, 2007 |
December
31, 2008 |
|||||
(i)
|
$25,357
|
4
years
|
June
30, 2005
|
4.66%
|
($240)
|
($270)
|
$11,193
|
2
years
|
December
12, 2008
|
4.80%
|
($701)
|
||
(ii)
|
$11,193
|
2
years
|
December
12, 2008
|
4.80%
|
($779)
|
($701)
|
$11,193
|
2
years
|
December
12, 2008
|
4.80%
|
($701)
|
||
(iii)
|
$10,000
|
7
years
|
September
30, 2006
|
4.23%
|
($514)
|
($1,852)
|
(iv)
|
$10,000
|
7
years
|
September
30, 2006
|
4.11%
|
($461)
|
($1,812)
|
(v)
|
$50,000
|
6
years
|
September
28, 2007
|
-
|
($3,530)
|
-
|
(vi)
|
$10,000
|
7
years
|
July
3, 2006
|
4.76%
|
($588)
|
($1,650)
|
(vii)
|
$15,072
|
5
years
|
March
27, 2008
|
3.03%
|
-
|
($732)
|
(viii)
|
$7,443
|
5
years
|
March
27, 2008
|
4.60%
|
-
|
($468)
|
(ix)
|
$20,000
|
7
years
|
May
15, 2008
|
5.50%
|
-
|
($3,944)
|
(x)
|
$13,359
|
7
years
|
July
15, 2008
|
5.44%
|
-
|
($2,344)
|
(xi)
|
$15,108
|
4
years
|
June
28, 2010
|
-
|
-
|
($1,263)
|
($6,112)
|
($16,438)
|
(a)
|
Payment
of termination fee for interest rate derivative:
On
January 5, 2009, t
he Company made a
payment
of $5,000 as a one-off termination fee in relation to an interest rate
derivative product (Note
13).
|
(b)
|
Loan
drawdown for newbuildings
:
During
2009, an amount of $17,003 and $14,204 were drawn down to
finance
the delivery installments of Hull S-1025 and Hull S-1026, respectively.
Furthermore,
an
amount of $17,044, $12,549 and $18,494 were drawn down
to finance
the fourth and the delivery installments of Hull S-1027,
Hull
S-1029 and Hull S-1031, respect
ively.
Finally,
an
amount
of $13,364 was drawn down
to finance the third and fourth
installment of Hull S-1033
(Note 12).
|
(c)
|
Restricted
cash change:
On January 9, 2009, t
he
Company entered into a supplemental agreement
relevant
to
the sale and leaseback transactions'
financial
covenants. Specifically, it was agreed that a minimum cash of $5,000 shall
be maintained on deposit by the Company during the bareboat charter
period. As at December 31, 2008, the Company was requi
red
to maintain consolidated cash balances of $20,000
in connection
with these financial covenants
(Note
6).
|
(d)
|
Share
buyback:
During 2009, the Company repurchased an amount of 358,601
shares from the open market at an average price of $ 2.02. The shares
repurchased under the buyback program of 358,601 were cancelled effective
on February 25, 2009.
|
(e)
|
Delivery
of newbuildings:
During
2009, the Company took delivery of five out of six 50,000dwt product /
chemical tankers from SPP Plant
&
Shipbuilding
Co., Ltd of the Republic of Korea, as follows: On February 19, 2009, the
Company took delivery of the M/T "Miss Marilena", which is employed on a
bareboat time-charter for a period of 10 years at a daily rate of $14,400.
On February 23, 2009
,
the
Company took delivery of the M/T "Lichtenstein", which is employed on a
bareboat time-charter for a period of 10 years at a daily rate of $14,550.
On March 19, 2009 and March 26, 2009, the Company took delivery of the M/T
"Ionian Wave" and the M/T "T
y
rrhenian
Wave", which are employed on a bareboat time-charter for a period of 7
years at a daily rate of $14,300, with three successive one
-
year
options at a higher daily rate. Finally, on May 22, 2009, the Company took
delivery of the M/T "Britto", which
is
employed on a bareboat time-charter for a period of 10 years at a daily
rate of $14,550.
|
(f)
|
Renegotiation
with charterer:
On
February 25, 2009, the
Company agreed with the charterer of M/V
Astrale, Armada Singapore, to lower the daily hire from $72 to $40. In
exchange, the charterer prepaid the full hire under the new rate though
the earliest date of expiry of the time charter, April 18,
2009.
|
(g)
|
Amendment
and Termination of Lease Agreements:
On
April 3, 2009, the Company entered into an agreement to terminate the
bareboat charter of MT Relentless, which has been in force since 2005 and
would have expired in 2012 (Note 6). Under this agreement, during the
third quarter of 2009 the Company will redeliver the M/T Relentless to its
owners and pay a termination fee of $2,500. In addition to the termination
fee the Company has undertaken to perform certain works on the vessel
prior to its redelivery which will involve additional costs. From the date
of the agreement until the date of redelivery the bareboat hire has been
set at $7,000 per day and has been included in the above table. On June
24, 2009, the Company terminated the bareboat charters and redelivered the
vessels M/T Faithful, the M/T Doubtless, the M/T Spotless and the M/T
Vanguard to their owners after paying $11,750 in termination fees and
expenses. In addition to the termination fee and expenses, the Company has
forfeited its right to receive the Seller's credit of $10,000 from the
initial sale of the vessels, which would have been received upon
expiration of the bareboat charter, and the Company has undertaken to pay
for the dry-dock of the M/T Spotless which is currently in progress. The
bareboat charter would have expired in 2011. Also, the Company will remain
the manager of these vessels until the expiration of their current time
charters, in early 2010, and will be reimbursed by the owners for all
expenses incurred. These were the last leased vessels in the Company's
fleet.
|
(h)
|
New
Time Charter:
In
June 2009, the
Company's vessel M/V Astrale entered into a time
charter agreement for two years, starting in July 2009, at a gross daily
rate of $18,000.
|
Balance
Sheets
|
December
31, 2007 and 2008
|
Statements
of Operations
|
For
the years ended December 31, 2006, 2007 and
2008
|
December
31,
|
||||||||||||
2006
|
2007
|
2008
|
||||||||||
EXPENSES
|
||||||||||||
General and administrative
expenses
|
10,647 | 9,493 | 14,365 | |||||||||
Foreign currency (gains) / losses,
net
|
66 | 49 | (96 | ) | ||||||||
Operating
loss
|
(10,713 | ) | (9,542 | ) | (14,269 | ) | ||||||
OTHER INCOME /
(EXPENSES)
|
||||||||||||
Interest and finance
costs
|
(25,420 | ) | (11,264 | ) | (6,896 | ) | ||||||
Gain / (loss) on financial
instruments
|
(2,124 | ) | (3,704 | ) | (3,701 | ) | ||||||
Interest
income
|
2,266 | 2,142 | 1,252 | |||||||||
Total Other (expenses),
net
|
(25,278 | ) | (12,826 | ) | (9,345 | ) | ||||||
Equity in earnings / (loss) of
subsidiaries
|
24,986 | (26,708 | ) | 49,253 | ||||||||
Net Income
(Loss)
|
(11,005 | ) | (49,076 | ) | 25,639 | |||||||
Earnings / (loss) per share, basic
and diluted
|
(1.16 | ) | (4.09 | ) | 1.01 | |||||||
Weighted average number of shares,
basic and diluted
|
10,183,424 | 11,986,857 | 25,445,031 |
Statements
of Cash Flows
|
For
the years ended December 31, 2006, 2007 and
2008
|
(Expressed
in thousands of U.S. Dollars)
|
December
31,
|
||||||||||||
2006
|
2007
|
2008
|
||||||||||
Net cash (used in) / provided by
Operating Activities
|
163,241 | (45,569 | ) | (77,474 | ) | |||||||
Cash flows from Investing
Activities
|
||||||||||||
Return of investment from
subsidiaries
|
398,860 | 75,954 | 243,531 | |||||||||
Investment in
subsidiaries
|
(28,683 | ) | (129,272 | ) | (64,213 | ) | ||||||
Decrease (Increase) in Restricted
cash
|
(6,876 | ) | 0 | 10,000 | ||||||||
Acquisition of fixed
assets
|
0 | 0 | (112 | ) | ||||||||
Net cash (used in) / provided by
Investing Activities
|
363,301 | (53,318 | ) | 189,206 | ||||||||
Cash flows from Financing
Activities
|
||||||||||||
Proceeds from long-term
debt
|
0 | 10,000 | 30,000 | |||||||||
Principal payments of long-term
debt
|
(297,255 | ) | (34,080 | ) | (164,994 | ) | ||||||
Issuance of common stock, net of
issuance costs
|
26,916 | 98,341 | 50,601 | |||||||||
Repurchase and cancellation of
common stock
|
(733 | ) | ||||||||||
Dividends
paid
|
(217,466 | ) | 0 | 0 | ||||||||
Financial instrument upfront
receipt
|
0 | 8,500 | 0 | |||||||||
Payment of financing
costs
|
(63 | ) | 0 | 0 | ||||||||
Net cash (used in ) / provided by
Financing Activities
|
(487,868 | ) | 82,761 | (85,126 | ) | |||||||
Net (decrease) / increase in cash
and cash equivalents
|
38,674 | (16,126 | ) | 26,606 | ||||||||
Cash and cash equivalents at
beginning of year
|
0 | 38,674 | 22,548 | |||||||||
Cash and cash equivalents at end of
year
|
38,674 | 22,548 | 49,154 |
Year
ending December 31, 2009
|
346,907
|
Less
financing fees
|
(4,428)
|
342,479
|
Item
19.
|
EXHIBITS
|
Number
|
Description
of Exhibits
|
1.1
|
Amended
and Restated Articles of Incorporation of TOP SHIPS INC. (1)
|
1.2
|
Amendment
to Amended and Restated Articles of Incorporation of TOP SHIPS INC.
(2)
|
1.3
|
Amendment
to Amended and Restated Articles of Incorporation of TOP SHIPS
INC
|
1.4
|
Amendment
to Amended and Restated Articles of Incorporation of TOP SHIPS
INC
|
1.5
|
Amended
and Restated By-Laws of the Company, as adopted on February 28, 2007
(3)
|
2.1
|
Form
of Share Certificate
|
4.1
|
TOP
SHIPS INC. 2005 Stock Option Plan (4)
|
4.2
|
Loan
Agreement between the Company and the Royal Bank of Scotland plc dated
August 10, 2004 and supplemented September 30, 2004
(5)
|
4.3
|
Loan
Agreement between the Company and DVB Bank dated March 10,
2005(6).
|
4.4
|
Credit
Facility between the Company and the Royal Bank of Scotland dated November
1, 2005 (7)
|
4.4.1
|
Supplement
to credit facility between the Company and the Royal Bank of Scotland
dated December 21, 2006 (8)
|
4.5
|
Credit
Facility between the Company and HSH NORDBANK, AG, dated November 7,
2005(9)
|
4.6
|
Sales
Agreement between the Company and Cantor Fitzgerald & Co. dated April
13, 2006(10)
|
4.7
|
Shareholder
Rights Agreement with Computershare Investor Services, LLC, as Rights
Agent as of August 19, 2005 (11)
|
4.8
|
Memorandum
of Agreement by and between Kisavos Shipping Company Limited and Komarf
Hope 27 Shipping Company dated March 9, 2006 relating to the purchase and
sale of the M/T Priceless (12)
|
4.9
|
Charter
party by and between Kisavos Shipping Company Limited and Komarf Hope
27 Shipping Company in relation to the M/T Priceless, dated
March 9, 2006 (13)
|
4.10
|
Quadripartite
Agreement by and among the Company, Kisavos Shipping Company Limited,
Komarf Hope 27 Shipping Co. and Fortis Bank (Nederland) N.V. dated March
15, 2006 relating to the M/T Priceless (14)
|
4.11
|
Guarantee
given by the Company to Komarf Hope 27 Shipping Co. dated March 15, 2006
in connection with the charter party relating to the M/T Priceless
(15)
|
4.12
|
Memorandum
of Agreement by and between Taygetus Shipping Company Limited and Komarf
Hope 28 Shipping Co. dated March 9, 2006 relating to the purchase and sale
of the M/T Timeless (16)
|
4.13
|
Charter
party by and between Taygetus Shipping Company Limited and Komarf Hope 28
Shipping Co. in relation to the Timeless, dated March 9, 2006
(17)
|
4.14
|
Quadripartite
Agreement by and among the Company, Taygetus Shipping Company Limited,
Komarf Hope 28 Shipping Co. and Fortis Bank (Nederland) N.V. dated March
15, 2006 relating to the M/T Timeless (18)
|
4.15
|
Guarantee
given by the Company to Komarf Hope 28 Shipping Co., dated March 15, 2006
in connection with the charter party relating to the M/T Timeless
(19)
|
4.16
|
Memorandum
of Agreement by and between Pylio Shipping Company Limited and Komarf Hope
29. Shipping Co. dated March 9, 2006 relating to the purchase and sale of
the M/T Flawless (20)
|
4.17
|
Charter
party by and between Pylio Shipping Company Limited and Komarf Hope 29
Shipping Co. in relation to the M/T Flawless, dated March 9, 2006
(21)
|
4.18
|
Quadripartite
Agreement by and among the Company, Pylio Shipping Company Limited, Komarf
Hope 29 Shipping Co. and Fortis Bank (Nederland) N.V. dated March 15, 2006
relating to the M/T Flawless (22)
|
4.19
|
Guarantee
given by the Company to Komarf Hope 29 Shipping Co., dated March 15, 2006
in connection with the charter party relating to the M/T Flawless
(23)
|
4.20
|
Memorandum
of Agreement by and between Vitsi Shipping Company Limited and Komarf Hope
30 Shipping Co. dated March 9, 2006 relating to the purchase and sale of
the M/T Stopless (24)
|
4.21
|
Charter
party by and between Vitsi Shipping Company Limited and Komarf Hope 30
Shipping Co. in relation to the Stopless, dated March 9, 2006
(25)
|
4.22
|
Quadripartite
Agreement by and among the Company, Vitsi Shipping Company Limited, Komarf
Hope 30 Shipping Co. and Fortis Bank (Nederland) N.V. dated March 15, 2006
relating to the M/T Stopless (26)
|
4.23
|
Guarantee
given by the Company to Komarf Hope 30 Shipping Co., dated March 15, 2006
in connection with the charter party relating to the M/T Stopless
(27)
|
4.24
|
Memorandum
of Agreement by and between Parnasos Shipping Company Limited Partankers
III AS, dated April 4, 2006 relating to the purchase and sale of the
M/T Faultless (28)
|
4.25
|
Charter
party by and between Parnasos Shipping Company Limited and Partankers III
AS, in relation to the M/T Faultless, dated April 4, 2006
(29)
|
4.26
|
Memorandum
of Agreement by and between Imitos Shipping Company Limited Partankers III
AS, dated April 4, 2006 relating to the purchase and sale of the M/T
Noiseless (30)
|
4.27
|
Charter
party by and between Imitos Shipping Company Limited and Partankers III
AS, in relation to the M/T Noiseless, dated April 4, 2006
(31)
|
4.28
|
Memorandum
of Agreement by and between Parnis Shipping Company Limited Partankers III
AS, dated April 4, 2006 relating to the purchase and sale of the M/T
Stainless (32)
|
4.29
|
Charter
party by and between Parnis Shipping Company Limited and Partankers III
AS, in relation to the M/T Stainless, dated April 4, 2006
(33)
|
4.30
|
Memorandum
of Agreement by and between Mytikas Shipping Company Limited and
Partankers III AS dated April 4, 2006 relating to the purchase and sale of
the M/T Limitless (34)
|
4.31
|
Charter
party by and between Mytikas Shipping Company Limited and Partankers III
AS in relation to the M/T Limitless, dated April 4, 2006
(35)
|
4.32
|
Memorandum
of Agreement by and between Litochoro Shipping Company Limited and
Partankers III AS dated April 4, 2006 relating to the purchase and sale of
the M/T Endless (36)
|
4.33
|
Charter
party by and between Litochoro Shipping Company Limited and Partankers III
AS in relation to the M/T Endless, dated April 4, 2006 (37)
|
4.34
|
Guarantee
given by the Company to Partankers III AS in connection with the charter
parties relating to the M/T Faultless, M/T Stainless, M/T Noiseless, M/V
Limitless, M/V Endless dated April 4, 2006 (38)
|
4.35
|
Memorandum
of Agreement by and between Idi Shipping Company Limited and Kemp Maritime
S.A. dated March 14, 2006 relating to the purchase and sale of the M/T
Spotless (39)
|
4.36
|
Charter
party by and between Idi Shipping Company Limited and Kemp Maritime S.A.
in relation to the M/T Spotless, dated March 14, 2006 (40)
|
4.37
|
Quadripartite
Agreement by and among the Company, Idi Shipping Company Limited, Kemp
Maritime S.A. and Fortis Bank (Nederland) N.V. dated March 15, 2006
relating to the M/T Spotless (41)
|
4.38
|
Second
Priority Quadripartite Agreement by and among the Company, Idi Shipping
Company Limited, Kemp Maritime S.A. and Mass Capital Investments B.V.
dated March 15, 2006 relating to the M/T Spotless (42)
|
4.39
|
Guarantee
given by the Company to Kemp Maritime S.A. dated March 14, 2006 in
connection with the charter party relating to the M/T Spotless
(43)
|
4.40
|
Memorandum
of Agreement by and between Falarko Shipping Company Limited and Tucker
Navigation Co. dated March 14, 2006 relating to the purchase and sale of
the M/T Doubtless (44)
|
4.41
|
Charter
party by and between Falarko Shipping Company Limited and Tucker
Navigation Co. in relation to the M/T Doubtless, dated March 14, 2006
(45)
|
4.42
|
Quadripartite
Agreement by and among the Company, Falarko Shipping Company Limited,
Tucker Navigation Co. and Fortis Bank (Nederland) N.V. dated March 15,
2006 relating to the M/T Doubtless (46)
|
4.43
|
Second
Priority Quadripartite Agreement by and among the Company, Falarko
Shipping Company Limited, Tucker Navigation Co. and Mass Capital
Investments B.V. dated March 15, 2006 relating to the M/T Doubtless
(47)
|
4.44
|
Guarantee
given by the Company to Tucker Navigation Co. dated March 14, 2006 in
connection with the charter party relating to the M/T Doubtless
(48)
|
4.45
|
Memorandum
of Agreement by and between Pageon Shipping Company Limited and Comoros
Shipping Limited dated March 14, 2006 relating to the purchase and sale of
the M/T Vanguard (49)
|
4.46
|
Charter
party by and between Pageon Shipping Company Limited and Comoros Shipping
Limited. in relation to the M/T Vanguard, dated March 14, 2006
(50)
|
4.47
|
Quadripartite
Agreement by and among the Company, Pageaon Shipping Company Limited,
Comoros Shipping Limited and Fortis Bank (Nederland) N.V. dated March 15,
2006 relating to the M/T Vanguard (51)
|
4.48
|
Second
Priority Quadripartite Agreement by and among the Company, Pageon Shipping
Company Limited, Comoros Shipping Limited and Mass Capital Investments
B.V. dated March 15, 2006 relating to the M/V Vanguard (52)
|
4.49
|
Guarantee
given by the Company to Comoros Shipping Limited dated March 14, 2006 in
connection with the charter party relating to the M/V Vanguard
(53)
|
4.50
|
Memorandum
of Agreement by and between Gramos Shipping Company Inc. and
Starcraft Marine Co. dated March 14, 2006 relating to the purchase and
sale of the M/T Faithful (54)
|
4.51
|
Charter
party by and between Gramos Shipping Company Inc. and Starcraft Marine Co.
in relation to the M/T Faithful, dated March 14, 2006 (55)
|
4.52
|
Quadripartite
Agreement by and among the Company, Gramos Shipping Company Inc.,
Starcraft Marine Co. and Fortis Bank (Nederland) N.V. dated March 15, 2006
relating to the M/T Faithful (56)
|
4.53
|
Second
Priority Quadripartite Agreement by and among the Company, Gramos Shipping
Company Inc., Starcraft Marine Co. and Mass Capital Investments B.V. dated
March 15, 2006 relating to the M/T Faithful (57)
|
4.54
|
Guarantee
given by the Company to Starcraft Marine Co. dated March 14, 2006 in
connection with the charter party relating to the M/T Faithful
(58)
|
4.55
|
Supplemental
Agreement relating to the Memorandum of Agreement dated March 14, 2006
relating to the M/V Spotless made by and among Idi Shipping Company
Limited, Kemp Maritime S.A. and ICON Spotless, LLC dated June 16, 2006
(59)
|
4.56
|
Addendum
No. 1 to charter party by and between Idi Shipping Company Limited and
Kemp Maritime S.A. in relation to the M.V. Spotless, dated March 14, 2006
dated June 16, 2006 (60)
|
4.57
|
Quadripartite
Agreement by and among the Company, Idi Shipping Company Limited, ICON
Spotless, LLC and Fortis Bank (Nederland) N.V. dated June 16, 2006
relating to the M/T Spotless (61)
|
4.58
|
Guarantee
given by the Company to ICON Spotless, LLC dated June 13, 2006 in
connection with the charter party relating to the M/T Spotless
(62)
|
4.59
|
Supplemental
Agreement relating to the Memorandum of Agreement dated March 14, 2006
relating to the M/V Doubtless made by and among Falarko Shipping Company
Limited, Tucker Navigation Co. and ICON Doubtless, LLC dated June 16, 2006
(63)
|
4.60
|
Addendum
No. 1 to charter party by and between Falarko Shipping Company Limited and
Tucker Navigation Co. in relation to the M.V. Doubtless, dated March 14,
2006 dated June 16, 2006 (64)
|
4.61
|
Quadripartite
Agreement by and among the Company, Falarko Shipping Company Limited, ICON
Doubtless, LLC and Fortis Bank (Nederland) N.V. dated June 16, 2006
relating to the M/T Doubtless (65)
|
4.62
|
Guarantee
given by the Company to ICON Doubtless, LLC dated June 13, 2006 in
connection with the charter party relating to the M/T Doubtless
(66)
|
4.63
|
Supplemental
Agreement relating to the Memorandum of Agreement dated March 14, 2006
relating to the M/V Vanguard made by and among Pageon Shipping Company
Limited, Comoros Shipping Limited and Isomar Marine Company Limited dated
June 16, 2006 (67)
|
4.64
|
Addendum
No. 1 to charter party by and between Pageon Shipping Company Limited and
Comoros Shipping Limited in relation to the M.V. Vanguard, dated March 14,
2006 dated June 16, 2006 (68)
|
4.65
|
Quadripartite
Agreement by and among the Company, Pageon Shipping Company Limited,
Isomar Marine Company Limited and Fortis Bank (Nederland) N.V. dated June
16, 2006 relating to the M/T Vanguard (69)
|
4.66
|
Guarantee
given by the Company to Isomar Marine Company Limited dated June 13,
2006 in connection with the charter party relating to the M/T Vanguard
(70)
|
4.67
|
Supplemental
Agreement relating to the Memorandum of Agreement dated March 14, 2006
relating to the M/V Faithful made by and among Gramos Shipping Company
Inc., Starcraft Marine Co. and ICON Faithful LLC dated June 16, 2006
(71)
|
4.68
|
Addendum
No. 1 to charter party by and between Gramos Shipping Company Inc.
and Starcraft Marine Co. in relation to the M.V. Faithful, dated March 14,
2006 dated June 16, 2006 (72)
|
4.69
|
Quadripartite
Agreement by and among the Company, Gramos Shipping Company Inc., ICON
Faithful, LLC and Fortis Bank (Nederland) N.V. dated June 16, 2006
relating to the M/T Faithful (73)
|
4.70
|
Guarantee
given by the Company to ICON Faithful, LLC dated June 13, 2006 in
connection with the charter party relating to the M/T Faithful
(74)
|
4.71
|
Sales
Agreement with Deutsche Bank Securities relating to issuing and selling an
agreed upon number of shares of common stock through Deutsch Bank
Securities. (75)
|
4.72
|
Credit
Facility between Jeke Shipping Company Limited, Noir R Shipping S.A.,
Amalfi Shipping Company Limited and HSH Nordbank AG, dated November 8,
2007
|
4.73
|
Secured
Loan Agreement between Japan III Shipping Company Limited and Alpha Bank
A.E, dated December 17, 2007
|
4.74
|
Supplemental
Agreement between Japan III Shipping Company Limited, Lichtenstein
Shipping Company Limited and Alpha Bank A.E., dated April 3, 2009,to
Secured Loan Facility Agreement dated December 17, 2007
|
4.75
|
Loan
Agreement No. 185/2008 between Emporiki Bank of Greece S.A. and Japan I
Shipping Company Limited, dated March 5, 2008
|
4.76
|
Supplemental
Agreement, dated March 26, 2008 to Facilities Agreement between Top Ships
Inc. and the Royal Bank of Scotland plc, dated November 1,
2005
|
4.77
|
Loan
Agreement between Japan II Shipping Company Limited, Top Ships Inc., DVB
Bank AG and DVB Bank America N.V., dated April 24, 2008
|
4.78
|
Secured
Loan Agreement between Lichtenstein Shipping Company Limited and Alpha
Bank A.E., dated August 18, 2008
|
4.79
|
First
Supplemental Agreement between Lichtenstein Shipping Company Limited and
Alpha Bank A.E, dated February 23, 2009, to Secured Loan Agreement dated
August 18, 2008
|
4.80
|
Second
Supplemental Agreement between Lichtenstein Shipping Company, Japan III
Shipping Company Limited and Alpha Bank A.E., dated April 3, 2009, to
Secured Loan Agreement dated August 18, 2008
|
4.81
|
Credit
Facility between Warhol Shipping Company Limited, Indiana R Shipping
Company Limited, Britto Shipping Company Limited and HSH Nordbank AG,
dated October 1, 2008
|
4.82
|
Loan
Agreement between Banksy Shipping Company Limited, Hongbo Shipping Company
Limited and DVB Bank America N.V., dated October 6, 2008
|
8.1
|
List
of subsidiaries of the Company
|
12.1
|
Rule
13a-14(a)/15d-14(a) Certification of the Company's Principal
Executive Officer
|
12.2
|
Rule
13a-14(a)/15d-14(a) Certification of the Company's Principal
Financial Officer
|
13.1
|
Certification
of the Company's Principal Executive Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002
|
13.2
|
Certification
of the Company's Principal Financial Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.
|
15.1
|
Consent
of Independent Registered Public Accounting
Firm
|
(1)
|
Incorporated
by reference from Exhibit 3.1 to the company's Registration Statement on
Form F-1, filed on October 18, 2004 (File No.
333-119806).
|
(2)
|
Incorporated
by reference from Exhibit 1.2 to the company's Annual Report on Form 20-F,
filed on April 20, 2007 (File No.
000-50859)
|
(3)
|
Incorporated
by reference from our 6-K filed on March 9,
2007
|
(4)
|
Incorporated
by reference from Exhibit 4.1 to the Company's Annual Report on Form 20-F,
filed on April 13, 2006 (File No.
000-50859)
|
(5)
|
Incorporated
by reference from Exhibit 10.1 to the Company's Registration Statement on
Form F-1, filed on November 12, 2004 (File No.
333-119806).
|
(6)
|
Incorporated
by reference from Exhibit 4.3 to the Company's Annual Report on Form 20-F,
filed on April 13, 2006 (File No.
000-50859)
|
(7)
|
Incorporated
by reference from Exhibit 4.4 to the Company's Annual Report on Form 20-F,
filed on April 13, 2006 (File No.
000-50859)
|
(8)
|
Incorporated
by reference from Exhibit 4.4.1 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(9)
|
Incorporated
by reference from Exhibit 4.5 to the Company's Annual Report on Form 20-F,
filed on April 13, 2006 (File No.
000-50859)
|
(10)
|
Incorporated
by reference from Exhibit 4.6 to the Company's Annual Report on Form 20-F,
filed on April 13, 2006 (File No.
000-50859)
|
(11)
|
Incorporated
by reference to Exhibit 4.1 to the Company's Registration Statement on
Form 8A (File No. 000-50859).
|
(12)
|
Incorporated
by reference from Exhibit 4.8 to the Company's Annual Report on Form 20-F,
filed on April 20, 2007 (File No.
000-50859)
|
(13)
|
Incorporated
by reference from Exhibit 4.9 to the Company's Annual Report on Form 20-F,
filed on April 20, 2007 (File No.
000-50859)
|
(14)
|
Incorporated
by reference from Exhibit 4.10 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(15)
|
Incorporated
by reference from Exhibit 4.11 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(16)
|
Incorporated
by reference from Exhibit 4.12 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(17)
|
Incorporated
by reference from Exhibit 4.13 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(18)
|
Incorporated
by reference from Exhibit 4.14 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(19)
|
Incorporated
by reference from Exhibit 4.15 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(20)
|
Incorporated
by reference from Exhibit 4.16 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(21)
|
Incorporated
by reference from Exhibit 4.17 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(22)
|
Incorporated
by reference from Exhibit 4.18 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(23)
|
Incorporated
by reference from Exhibit 4.19 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(24)
|
Incorporated
by reference from Exhibit 4.20 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(25)
|
Incorporated
by reference from Exhibit 4.21 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(26)
|
Incorporated
by reference from Exhibit 4.22 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(27)
|
Incorporated
by reference from Exhibit 4.23 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(28)
|
Incorporated
by reference from Exhibit 4.24 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(29)
|
Incorporated
by reference from Exhibit 4.25 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(30)
|
Incorporated
by reference from Exhibit 4.26 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(31)
|
Incorporated
by reference from Exhibit 4.27 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(32)
|
Incorporated
by reference from Exhibit 4.28 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(33)
|
Incorporated
by reference from Exhibit 4.29 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(34)
|
Incorporated
by reference from Exhibit 4.30 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(35)
|
Incorporated
by reference from Exhibit 4.31 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(36)
|
Incorporated
by reference from Exhibit 4.32 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(37)
|
Incorporated
by reference from Exhibit 4.33 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(38)
|
Incorporated
by reference from Exhibit 4.34 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(39)
|
Incorporated
by reference from Exhibit 4.35 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(40)
|
Incorporated
by reference from Exhibit 4.36 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(41)
|
Incorporated
by reference from Exhibit 4.37 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(42)
|
Incorporated
by reference from Exhibit 4.38 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(43)
|
Incorporated
by reference from Exhibit 4.39 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(44)
|
Incorporated
by reference from Exhibit 4.40 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(45)
|
Incorporated
by reference from Exhibit 4.41 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(46)
|
Incorporated
by reference from Exhibit 4.42 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(47)
|
Incorporated
by reference from Exhibit 4.43 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(48)
|
Incorporated
by reference from Exhibit 4.44 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(49)
|
Incorporated
by reference from Exhibit 4.45 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(50)
|
Incorporated
by reference from Exhibit 4.46 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(51)
|
Incorporated
by reference from Exhibit 4.47 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(52)
|
Incorporated
by reference from Exhibit 4.48 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(53)
|
Incorporated
by reference from Exhibit 4.49 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(54)
|
Incorporated
by reference from Exhibit 4.50 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(55)
|
Incorporated
by reference from Exhibit 4.51 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(56)
|
Incorporated
by reference from Exhibit 4.52 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(57)
|
Incorporated
by reference from Exhibit 4.53 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(58)
|
Incorporated
by reference from Exhibit 4.54 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(59)
|
Incorporated
by reference from Exhibit 4.55 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(60)
|
Incorporated
by reference from Exhibit 4.56 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(61)
|
Incorporated
by reference from Exhibit 4.57 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(62)
|
Incorporated
by reference from Exhibit 4.58 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(63)
|
Incorporated
by reference from Exhibit 4.59 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(64)
|
Incorporated
by reference from Exhibit 4.60 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(65)
|
Incorporated
by reference from Exhibit 4.61 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(66)
|
Incorporated
by reference from Exhibit 4.62 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(67)
|
Incorporated
by reference from Exhibit 4.63 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(68)
|
Incorporated
by reference from Exhibit 4.64 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(69)
|
Incorporated
by reference from Exhibit 4.65 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(70)
|
Incorporated
by reference from Exhibit 4.66 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(71)
|
Incorporated
by reference from Exhibit 4.67 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(72)
|
Incorporated
by reference from Exhibit 4.68 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(73)
|
Incorporated
by reference from Exhibit 4.69 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(74)
|
Incorporated
by reference from Exhibit 4.70 to the Company's Annual Report on Form
20-F, filed on April 20, 2007 (File No.
000-50859)
|
(75)
|
Incorporated
by reference from our 6-K filed on June 13,
2007
|
TOP
SHIPS INC.
|
||||
(Registrant)
|
||||
Date:
June 29, 2009
|
By:
|
/s/
Evangelos Pistiolis
|
||
Evangelos
Pistiolis
|
||||
President,
Chief Executive Officer, and
Director
|
|
1.
|
The
name of the Corporation is: TOP TANKERS
INC.
|
|
2.
|
The
Articles of Incorporation were filed with the Registrar of Corporations on
the 10th day of January, 2000 under the name of “OCEAN HOLDINGS INC.”,
Articles of Amendment were filed with the Registrar of Corporations on the
30th day of April, 2004 changing the name of the Corporation to “TRANS
OCEAN PETROLEUM TANKERS INC.”, Articles of Amendment were filed with the
Registrar of Corporations on the 10th day of May, 2004 changing the name
of the Corporation to “TOP TANKERS INC.”, Articles of Amendment were filed
with the Registrar of Corporations on the 27th day of May, 2004, Amended
and Restated Articles of Incorporation were filed with the Registrar of
Corporations on the 21st day of July, 2004 and Articles of Amendment were
filed with the Registrar of Corporations on the 22nd day of July,
2005.
|
|
3.
|
Section
A of the Articles of Incorporation, as heretofore amended and restated, is
hereby amended by changing the name of the Corporation from “TOP TANKERS
INC.” to “TOP SHIPS INC.”
|
|
4.
|
The
amendment to the Articles of Incorporation, as heretofore amended and
restated, was authorized by vote of the holders of a majority of all
outstanding shares entitled to vote thereon at the meeting of shareholders
of the Corporation held on December 13,
2007.
|
/s/
Evangelos J.
Pistiolis
|
|
Name::
Evangelos J.
Pistiolis
|
|
Title: President
and Director
|
|
1.
|
The
name of the Corporation is: TOP SHIPS
INC.
|
|
2.
|
The
Articles of Incorporation were filed with the Registrar of Corporations on
the 10th day of January, 2000 under the name of “OCEAN HOLDINGS INC.”,
Articles of Amendment were filed with the Registrar of Corporations on the
30th day of April, 2004 changing the name of the Corporation to “TRANS
OCEAN PETROLEUM TANKERS INC.”, Articles of Amendment were filed with the
Registrar of Corporations on the 10th day of May, 2004 changing the name
of the Corporation to “TOP TANKERS INC.”, Articles of Amendment were filed
with the Registrar of Corporations on the 27th day of May, 2004, Amended
and Restated Articles of Incorporation were filed with the Registrar of
Corporations on the 21st day of July, 2004, Articles of Amendment were
filed with the Registrar of Corporations on the 22nd day of July, 2005 and
Articles of Amendment were filed with the Registrar of Corporations on the
17th day of December, 2007 changing the name of the Corporation to “TOP
SHIPS INC.”
|
|
3.
|
Section
D of the Articles of Incorporation, as heretofore amended and restated, is
hereby amended by adding the following
paragraph:
|
|
4.
|
The
amendment to the Articles of Incorporation, as heretofore amended and
restated, was authorized by vote of the holders of a majority of all
outstanding shares entitled to vote thereon at the meeting of shareholders
of the Corporation held on March 13,
2008.
|
|
|
/s/
Anthony Tu-Sekine
|
|
Name: Anthony
Tu-Sekine
|
|
Title: Attorney-in-Fact
|
|
|
|
|
DEFINITIONS
|
1
|
|
1.1
|
Specific
Definitions
|
1
|
|
1.2
|
Computation of Time Periods; Other Definitional Provisions |
16
|
|
1.3
|
Accounting
Terms
|
16
|
|
1.4
|
Certain
Matters Regarding Materiality
|
17
|
|
1.5
|
Forms
of Documents
|
17
|
2.
|
REPRESENTATIONS
AND WARRANTIES
|
17
|
|
2.1
|
Representations
and Warranties
|
17
|
|
(a)
|
Due
Organization and Power
|
17
|
|
(b)
|
Authorization
and Consents
|
17
|
|
(c)
|
Binding
Obligations
|
17
|
|
(d)
|
No
Violation
|
17
|
|
(e)
|
Filings;
Stamp Taxes
|
18
|
|
(f)
|
Litigation
|
18
|
|
(g)
|
No
Default
|
18
|
|
(h)
|
Vessels
|
18
|
|
(i)
|
Insurance
|
18
|
|
(j)
|
Financial
Information
|
18
|
|
(k)
|
Tax
Returns
|
19
|
|
(l)
|
Chief
Executive Office
|
19
|
|
(m)
|
Foreign
Trade Control Regulations; OFAC
|
19
|
|
(n)
|
Equity
Ownership
|
19
|
|
(o)
|
Environmental
Matters and Claims
|
19
|
|
(p)
|
Compliance
with ISM Code, the ISPS Code, the MTSA and Annex VI
|
20
|
|
(q)
|
No
Threatened Withdrawal of DOC, ISSC, SMC or IAPPC
|
20
|
|
(r)
|
Liens
|
20
|
|
(s)
|
Financial
Indebtedness
|
21
|
|
(t)
|
No
Proceedings to Dissolve
|
21
|
|
(u)
|
Solvency
|
21
|
|
(v)
|
Pari
Passu Ranking
|
21
|
|
(w)
|
Taxes
on Payments
|
21
|
|
(x)
|
Jurisdiction/Governing
Law
|
21
|
|
(y)
|
Charters
|
21
|
|
(z)
|
Compliance
with Laws
|
21
|
|
(aa)
|
Survival
|
21
|
3.
|
THE
ADVANCES
|
22
|
|
3.1
|
(a)
|
Purposes
|
22
|
(b) | Making of the Advances |
22
|
|
3.2
|
Drawdown
Notice
|
23
|
|
3.3
|
Effect
of Drawdown Notice
|
23
|
|
3.4
|
Notation
of Advances
|
23
|
4.
|
CONDITIONS
|
24
|
|
4.1
|
Conditions
Precedent to the Effectiveness of this Credit Facility
Agreement
|
24
|
|
(a)
|
Corporate
Authority
|
24
|
|
(b)
|
The
Credit Facility Agreement and the Note
|
24
|
|
(c)
|
Guarantor
Documents
|
25
|
|
(d)
|
Solvency
|
25
|
|
(e)
|
Approved
Manager Documents
|
25
|
|
(f)
|
Environmental
Claims
|
25
|
|
(g)
|
Fees
|
25
|
|
(h)
|
Accounts
|
25
|
|
(i)
|
Compliance
Certificate
|
25
|
|
(j)
|
Vessel
Appraisal and Inspection
|
25
|
|
(k)
|
Money
Laundering Due Diligence
|
26
|
|
(l)
|
Legal
Opinions
|
26
|
|
(m)
|
Know
Your Customer Requirements
|
26
|
|
4.2
|
Conditions
Precedent re Delivery Advances
|
26
|
|
(a)
|
The
Vessels
|
27
|
|
(b)
|
Vessel
Documents
|
27
|
|
(c)
|
Additional
Documents
|
27
|
|
(d)
|
Vessel
Liens
|
28
|
|
(e)
|
ISM
DOC
|
28
|
|
(f)
|
Process
Agent
|
28
|
|
(g)
|
Legal
Opinions
|
28
|
|
4.3
|
Further
Conditions Precedent
|
28
|
|
(a)
|
Drawdown
Notice
|
29
|
|
(b)
|
Representations
and Warranties
|
29
|
|
(c)
|
No
Event of Default
|
29
|
|
(d)
|
No
Change in Laws
|
29
|
|
(e)
|
No
Material Adverse Effect
|
29
|
|
4.4
|
Breakfunding
Costs
|
29
|
|
4.5
|
Satisfaction
after Drawdown
|
29
|
5.
|
REPAYMENT
AND PREPAYMENT
|
29
|
|
5.1
|
Repayment
|
29
|
|
5.2
|
Voluntary
Prepayment; No Re-Borrowing
|
30
|
|
5.3
|
Mandatory
Prepayment
|
30
|
|
(a)
|
Sale
or Loss of Vessel
|
30
|
|
(b)
|
Guarantor
Share Offering
|
31
|
|
5.4
|
Interest
and Costs with Prepayments/Application of
Prepayments
|
31
|
6.
|
INTEREST
AND RATE
|
31
|
|
6.1
|
Applicable
Rate
|
31
|
|
6.2
|
Default
Rate
|
31
|
|
6.3
|
Interest
Periods
|
31
|
|
6.4
|
Interest
Payments
|
32
|
7.
|
PAYMENTS
|
32
|
|
7.1
|
Place
of Payments, No Set Off
|
32
|
|
7.2
|
Tax
Credits
|
32
|
|
7.3
|
Sharing
of Setoffs
|
32
|
|
7.4
|
Computations;
Banking Days
|
33
|
8.
|
EVENTS
OF DEFAULT
|
33
|
|
8.1
|
Events
of Default
|
33
|
|
(a)
|
Non-Payment
of Principal
|
33
|
|
(b)
|
Non-Payment
of Interest or Other Amounts
|
33
|
|
(c)
|
Representations
|
33
|
|
(d)
|
Impossibility;
Illegality
|
33
|
|
(e)
|
Mortgage
|
33
|
|
(f)
|
Covenants
|
33
|
|
(g)
|
Debt
|
34
|
|
(h)
|
Ownership
of Borrowers
|
34
|
|
(i)
|
Bankruptcy
|
34
|
|
(j)
|
Termination
of Operations; Sale of Assets
|
34
|
|
(k)
|
Judgments
|
34
|
|
(l)
|
Inability
to Pay Debts
|
34
|
|
(m)
|
Change
in Financial Position
|
34
|
|
(n)
|
Change
in Control
|
34
|
|
(o)
|
Cross-Default
|
35
|
8.2 | Indemnification |
35
|
|
8.3
|
Application
of Moneys
|
35
|
9.
|
COVENANTS
|
36
|
|
9.1
|
Affirmative
Covenants
|
36
|
|
(a)
|
Performance
of Agreements
|
36
|
|
(b)
|
Notice
of Default, etc
|
36
|
|
(c)
|
Obtain
Consents
|
36
|
|
(d)
|
Financial
Information
|
36
|
|
(e)
|
Vessel
Valuations
|
37
|
|
(f)
|
Corporate
Existence
|
38
|
|
(g)
|
Books
and Records
|
38
|
|
(h)
|
Taxes
and Assessments
|
38
|
|
(i)
|
Inspection
|
38
|
|
(j)
|
Inspection
and Survey Reports
|
38
|
|
(k)
|
Compliance
with Statutes, Agreements, etc
|
38
|
|
(l)
|
Environmental
Matters
|
38
|
|
(m)
|
Vessel
Management
|
39
|
(n) | ISM Code, ISPS Code, MTSA and Annex VI Matters |
39
|
|
(o)
|
Brokerage
Commissions, etc
|
39
|
|
(p)
|
Deposit
Accounts; Assignment
|
39
|
|
(q)
|
Insurance
|
39
|
|
(r)
|
Interest
Rate Agreements
|
40
|
(s) | Compliance with Anti-Money Laundering and OFAC |
40
|
|
9.2
|
Negative
Covenants
|
41
|
|
(a)
|
Liens
|
41
|
|
(b)
|
Debt
|
41
|
(c) | Change of Flag, Class, Management or Ownership |
41
|
|
(d)
|
Chartering
|
41
|
|
(e)
|
Change
in Business
|
41
|
|
(f)
|
Sale
or Pledge of Shares
|
41
|
|
(g)
|
Sale
of Assets
|
41
|
|
(h)
|
Changes
in Offices
|
42
|
|
(i)
|
Consolidation
and Merger
|
42
|
|
(j)
|
Change
Fiscal Year
|
42
|
|
(k)
|
Limitations
on Ability to Make Distributions
|
42
|
|
(l)
|
Use
of Corporate Funds
|
42
|
|
(m)
|
Issuance
of Shares
|
42
|
|
(n)
|
No
Money Laundering
|
42
|
|
(o)
|
Accounts
|
42
|
|
(p)
|
Dividends
and Distributions to the Guarantor
|
43
|
|
(q)
|
Use
of Proceeds
|
43
|
|
(r)
|
Guarantor’s
Chief Executive Officer
|
43
|
|
9.3
|
Financial
Covenants
|
43
|
|
(a)
|
Adjusted
Net Worth
|
43
|
|
(b)
|
EBITDA
to Fixed Charges
|
43
|
|
(c)
|
Minimum
Liquidity
|
43
|
|
9.4
|
Asset
Maintenance
|
43
|
10.
|
ASSIGNMENT
|
44
|
11.
|
ILLEGALITY,
INCREASED COST, NON-AVAILABILITY, ETC
|
44
|
|
11.1
|
Illegality
|
44
|
|
11.2
|
Increased
Costs
|
44
|
|
11.3
|
Nonavailability
of Funds
|
45
|
|
11.4
|
Lender's
Certificate Conclusive
|
46
|
|
11.5
|
Compensation
for Losses
|
46
|
12.
|
CURRENCY
INDEMNITY
|
46
|
|
12.1
|
Currency
Conversion
|
46
|
|
12.2
|
Change
in Exchange Rate
|
46
|
|
12.3
|
Additional
Debt Due
|
46
|
|
12.4
|
Rate
of Exchange
|
46
|
13.
|
FEES
AND EXPENSES
|
46
|
|
13.1
|
Fees
|
46
|
|
13.2
|
Expenses
|
47
|
14.
|
APPLICABLE
LAW, JURISDICTION AND WAIVER
|
47
|
|
14.1
|
Applicable
Law
|
47
|
|
14.2
|
Jurisdiction
|
47
|
|
14.3
|
Waiver
of Jury Trial
|
48
|
15.
|
THE
AGENTS
|
48
|
|
15.1
|
Appointment
of Agents
|
48
|
|
15.2
|
Security
Trustee as Trustee
|
48
|
|
15.3
|
Distribution
of Payments
|
48
|
|
15.4
|
Holder
of Interest in Note
|
49
|
|
15.7
|
Acts
of the Agents
|
49
|
|
15.8
|
Certain
Amendments
|
50
|
|
15.9
|
Assumption
re Event of Default
|
51
|
15.10 | Limitations of Liability |
51
|
|
15.11 | Indemnification of the Agents |
51
|
|
15.12 | Consultation with Counsel |
51
|
|
15.13 | Resignation |
52
|
|
15.14 | Representations of Lenders |
52
|
|
15.15 | Notification of Event of Default |
52
|
|
15.16 | No Agency or Trusteeship if not Syndicated |
52
|
|
15.17 | Nature of Duties |
52
|
|
15.18 | Delegation of Power |
53
|
16.
|
NOTICES
AND DEMANDS
|
53
|
|
16.1
|
Notices
|
53
|
17.
|
MISCELLANEOUS
|
53
|
|
17.1
|
Time
of Essence
|
53
|
|
17.2
|
Unenforceable,
etc., Provisions–Effect
|
53
|
|
17.3
|
References
|
53
|
|
17.4
|
Further
Assurances
|
54
|
|
17.5
|
Prior
Agreements, Merger
|
54
|
|
17.6
|
Entire
Agreement; Amendments
|
54
|
|
17.7
|
Indemnification
|
54
|
|
17.8
|
Headings
|
55
|
|
17.9
|
Waiver
of Immunity
|
55
|
17.10 | USA Patriot Act Notice; OFAC and Bank Secrecy Act |
55
|
|
SCHEDULE
|
1
|
The
Lenders and the Initial Commitments
|
2
|
The
Vessels
|
3
|
Financial
Indebtedness
|
A
|
Form
of Note
|
|
B
|
Form
of Guaranty
|
|
C-1
|
Form
of Retention Account Pledge
|
|
C-2
|
Form
of Earnings Account Pledge
|
|
C-3
|
Form
of Debt Service Reserve Account Pledge
|
|
D
|
Form
of Mortgage
|
|
E
|
Form
of Earnings Assignment
|
|
F
|
Form
of Insurances Assignment
|
|
G
|
Form
of Assignment and Assumption Agreement
|
|
H
|
Form
of Compliance Certificate
|
|
I
|
Form
of Drawdown Notice
|
|
J
|
Form
of Interest Notice
|
|
K
|
Form
of Approved Manager’s
Undertaking
|
1.
|
DEFINITIONS
|
“Acceptable
Accounting Firm”
|
means
Deloitte & Touche, or such other recognized international accounting
firm as shall be approved by the Administrative Agent, such approval not
to be unreasonably withheld;
|
“Account
Pledge(s)”
|
means
each of the pledge agreements to be executed by the Borrowers in favor of
the Finance Parties in respect of the Earnings Accounts, Debt Service
Reserve Account and Retention Account, each pursuant to
Section 4.1(h), and substantially in the form set out in Exhibits
C-1, C-2 and C-3 respectively;
|
“Accounting
Period”
|
means
each consecutive period of three months falling during the period (ending
on the last day in March, June, September and December of each year) for
which quarterly accounting information is required to be provided to the
Administrative Agent hereunder;
|
|
“Adjusted
Net Worth”
|
means,
measured at the end of an Accounting Period, the amount of Total Assets
(as adjusted to include the aggregate Fair Market Value of each of the
vessels owned by the Guarantor and each of its Subsidiaries) less
Consolidated Debt as stated in then most recent accounting information
delivered to the Administrative Agent hereunder;
|
|
“Administrative
Agent”
|
shall
have the meaning ascribed thereto in the preamble;
|
|
“Advance(s)”
|
means
any amount advanced to the Borrowers with respect to the Facility or (as
the context may require) the aggregate amount of all such Advances for the
time being outstanding,
provided
,
however
, that
only one Advance shall be made per Tranche and that no Advance shall be
made available after the Final Availability Date;
|
|
“Affiliate”
|
means
with respect to any Person, any other Person directly or indirectly
controlled by or under common control with such Person. For the
purposes of this definition, “control” (including, with correlative
meanings, the terms “controlled by” and “under common control with”) as
applied to any Person means the possession directly or indirectly of the
power to direct or cause the direction of the management and policies of
that Person whether through ownership of voting securities or by contract
or otherwise;
|
|
“Agents”
|
means
each of the Administrative Agent and the Security Trustee;
|
|
“Amalfi”
|
shall
have the meaning ascribed thereto in the preamble;
|
|
“Annex
VI”
|
means
Regulations for the Prevention of Air Pollution from Ships to the
International Convention for the Prevention of Pollution from Ships 1973
(as modified in 1978 and 1997);
|
|
“Applicable
Rate”
|
means
any rate of interest applicable to the Facility from time to
time pursuant to Section 6.1;
|
“Approved
Manager”
|
means
a direct or indirect wholly-owned subsidiary of the Guarantor or any other
company approved by the Lenders from time to time as the manager of a
Vessel, which approval shall not unreasonably be withheld;
|
|
“Approved
Manager’s Undertaking(s)”
|
means
each of the undertakings made or to be made by an Approved Manager in
favor of the Lenders in respect of a Vessel, substantially in the form set
out in Exhibit K;
|
|
“Assigned
Moneys”
|
means
sums assigned to or received by the Agents pursuant to any Security
Document;
|
|
“Assignment
and Assumption Agreement(s)”
|
means
the Assignment and Assumption Agreement(s) executed pursuant to
Section 10 substantially in the form set out in
Exhibit G;
|
|
“Assignment
Notices”
|
means notices
with respect to the Earnings Assignments substantially in the form set out
in Exhibit 1 thereto and notices with respect to the Insurances
Assignments substantially in the form set out in Exhibit 3
thereto;
|
|
“Assignments”
|
means
the Earnings Assignments and the Insurances Assignments;
|
|
“Banking
Day(s)”
|
means
day(s) on which banks are open for the transaction of business in London,
England, New York, New York (United States of America), Piraeus, Greece
and Hamburg, Germany;
|
|
“Borrower(s)”
|
shall
have the meaning ascribed thereto in the preamble;
|
|
“Change
of Control”
|
means
(a) any “person” (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act), other than a member of the immediate family of Evangelos
Pistiolis, becomes the beneficial owner (as defined in Rules 13d-3 and
13d-5 under the Exchange Act), directly or indirectly, of more than 35% of
the total voting power or ownership interest of the Guarantor or (b)
the Board of Directors of the Guarantor ceases to consist of a majority of
the directors existing on the date hereof or directors nominated by at
least two-thirds (2/3) of the then existing directors;
|
|
“Charterer(s)”
|
shall
mean any bareboat charterer or time charterer who has entered into a
Charter Party Agreement with any of the Borrowers;
|
|
“Charter
Party Agreement(s)”
|
shall
mean any bareboat charter agreement or any time
|
“Consolidated
Debt”
|
means,
measured at the end of an Accounting Period for the Guarantor and its
Subsidiaries on a consolidated basis, the aggregate amount of Debt due by
the Security Parties as stated in the then most recent accounting
information delivered to the Administrative Agent hereunder;
|
|
“Consolidated
Financial Indebtedness”
|
means,
measured at the end of each Accounting Period, the aggregate amount of
Financial Indebtedness (including current maturities) of the Guarantor and
its Subsidiaries on a consolidated basis as stated in the then most recent
accounting information delivered to the Administrative Agent
hereunder;
|
|
“Credit
Facility Agreement”
|
means
this agreement, as the same shall be amended, modified or supplemented
from time to time;
|
|
“Current
Assets”
|
means,
measured at the end of each Accounting Period, the aggregate of
the cash and marketable securities, trade and other receivables of the
Guarantor and its Subsidiaries on a consolidated basis from persons which
can be realized within one year, inventories and prepaid expenses which
are to be charged to income within one year less any doubtful debts and
any discounts or allowances given as stated in the then most recent
accounting information delivered to the Administrative Agent
hereunder;
|
|
“Debt”
|
means,
in relation to the Guarantor and its Subsidiaries (the
“debtor”): (a) Financial Indebtedness of the debtor; (b)
liability for any credit to the debtor from a supplier of goods or
services or under any installment purchase or payment plan or similar
arrangement; (c) contingent liabilities of the debtor (including without
limitation any taxes or other payments under dispute) which have been or,
under GAAP, should be recorded in the notes to the accounting information;
(d) deferred tax of the debtor; and (e) liability under a guarantee,
indemnity or similar obligation entered into by the debtor in respect of a
liability of another person who is not a Security Party which would fall
within (a) to (d) if the references to the debtor referred to the other
Person;
|
|
“Debt
Service Deposit”
|
shall
have the meaning ascribed thereto in Section 4.1(h);
|
|
“Debt
Service Reserve Account”
|
shall
have the meaning ascribed thereto in Section 4.1(h);
|
|
“Default
Rate”
|
shall
have the meaning ascribed thereto in Section 6.2;
|
“Environmental
Approval(s)”
|
shall
have the meaning ascribed thereto in Section 2.1(o);
|
|
“Environmental
Claim(s)”
|
shall
have the meaning ascribed thereto in Section 2.1(o);
|
|
“Environmental
Law(s)”
|
shall
have the meaning ascribed thereto in Section 2.1(o);
|
|
“Event(s)
of Default”
|
means
any of the events set out in Section 8.1;
|
|
“Exchange
Act”
|
shall
mean the Securities and Exchange Act of 1934, as amended;
|
|
“Facility”
|
means
the term loan facility to be made available by the Lenders to the
Borrowers hereunder in three Tranches, each comprised of one (1) Advance
to be made available upon or following the delivery of the respective
Vessel, pursuant to Section 3; and being, in the aggregate, no more than
the lesser of (i) Ninety-Five Million Dollars ($95,000,000) or (ii)
sixty-five percent (65%) of the Fair Market Value of the
Vessels;
|
|
“Fair
Market Value”
|
means
in relation to a Vessel, her sale value (determined as the average of two
valuations prior to the Drawdown Date relating to such Vessel, and
thereafter one valuation per year at twelve month intervals on each
anniversary of such Drawdown Date, each valuation to be not older than six
weeks from any of Simpson, Spence and Young, London, England or Astrup
Fearnley A/S, Oslo, Norway or AC Shipping, London, England or R.S. Platou
Shipbrokers A/S, Oslo, Norway or Galbraith’s Limited, London, England or
H. Clarksons & Co. Ltd., London, England) with or without physical
inspection (as the Lender may require) in United States Dollars on the
basis of the sale of the Vessel (i) for prompt delivery, (ii) for cash,
(iii) without taking into account any charter party relating to the
Vessel, and (iv) at arm's length on normal commercial terms between a
willing seller and a willing buyer. If the two valuations obtained prior
to the Drawdown Date differ by a margin of more than fifteen percent (15%)
then a third appraiser from the aforementioned firms selected by the
Administrative Agent shall make an independent appraisal at the Borrowers’
expense, and the Fair Market Value of the Vessel shall be considered to be
the average of all three valuations obtained;
|
|
“Fee
Letter”
|
means
that certain fee letter of even date herewith, entered into by the
Guarantor and HSH in respect of the Facility;
|
then
most recent accounting information provided to the Administrative Agent
hereunder;
|
||
“GAAP”
|
shall
have the meaning ascribed thereto in Section 1.3;
|
|
“Guarantor”
|
means
Top Tankers Inc., a corporation organized and existing under the laws of
the Republic of the Marshall Islands;
|
|
“Guaranty”
|
means
the unconditional and irrevocable guaranty to be executed by the Guarantor
in respect of the obligations of the Borrowers under and in connection
with this Credit Facility Agreement and the Note in favor of the Security
Trustee pursuant to Section 4.l(c), substantially in the set out in
form of Exhibit B;
|
|
“HSH”
|
shall
have the meaning ascribed thereto in the preamble;
|
|
“Hull
Cover Ratio”
|
shall
mean the ratio, expressed as a percentage, of the Fair Market Value of the
Vessels then mortgaged hereunder divided by the outstanding principal
amount under Facility;
|
|
“IAPPC”
|
means
a valid international air pollution prevention certificate for a Vessel
issued under Annex VI;
|
|
“Indemnitee”
|
shall
have the meaning ascribed thereto in Section 17.7;
|
|
“Initial
Advance”
|
means
the first Advance of a Tranche to be made under the Facility;
|
|
“Insurances
Assignment”
|
means
the assignments in respect of the insurances over each of the Vessels to
be executed by the relevant Borrower in favor of the Security Trustee
pursuant to Section 4.2(b), substantially in the form set out in Exhibit
F;
|
|
“Interest
Expense”
|
means,
measured at the end of an Accounting Period, the aggregate on a
consolidated basis of all interest incurred by the Guarantor and its
Subsidiaries and any net amounts payable under interest rate hedge
agreements, as stated in the then most recent accounting information
provided to the Administrative Agent hereunder;
|
|
“Interest
Notice”
|
means
a notice from the Borrowers to the Administrative Agent specifying the
duration of any relevant Interest Period, each substantially in the form
set out in Exhibit J;
|
“Interest
Payment Date”
|
means
each date on which accrued interest on the Facility shall be payable
pursuant to Section 6.4;
|
|
“Interest
Period(s)”
|
means
period(s) of one (1), three (3), six (6) or twelve (12) months as selected
by the Borrowers, or as otherwise agreed by the Lenders and the Borrowers,
provided, however, that the Borrowers may only select the one (1) month
option up to three (3) times per year;
|
|
“Interest
Rate Agreement”
|
means
any interest rate protection agreement, interest rate future agreement,
interest rate option agreement, interest rate swap agreement, interest
rate cap agreement, interest rate collar agreement, interest rate hedge
agreement or other similar agreement or arrangement entered into between
the Borrowers with the Swap Provider, which is designed to protect the
Borrowers against fluctuations in interest rates applicable under this
Agreement, to or under which the Borrowers, the Guarantor or any of the
Guarantor’s Subsidiaries is a party or a beneficiary on the date of this
Agreement or becomes a party or a beneficiary hereafter;
|
|
“ISM
Code”
|
means
the International Safety Management Code for the Safe Operating of Ships
and for Pollution Prevention constituted pursuant to Resolution A.741(18)
of the International Maritime Organization and incorporated into the
Safety of Life at Sea Convention and includes any amendments or extensions
thereto and any regulation issued pursuant thereto;
|
|
“ISPS
Code”
|
means
the International Ship and Port Facility Security Code adopted by the
International Maritime Organization (as the same may be amended from time
to time);
|
|
“ISSC”
|
means
a valid and current International Ship Security Certificate issued under
the ISPS Code;
|
|
“Jeke”
|
shall
have the meaning ascribed thereto in the preamble;
|
|
“Lender(s)”
|
shall
have the meaning ascribed thereto in the preamble;
|
|
“LIBOR”
|
means
the rate for deposits of Dollars for a period equivalent to the relevant
Interest Period at or about 11:00 a.m. (London time) on the second
London Banking Day before the first day of such period as displayed on
Telerate page 3750 (British Bankers’ Association Interest Settlement
Rates) (or such other page as may replace such
|
page
3750 on such system or on any other system of the information vendor for
the time being designated by the British Bankers’ Association to calculate
the BBA Interest Settlement Rate (as defined in the British Bankers’
Association’s Recommended Terms and Conditions (“BBAIRS” terms) dated
August 1985)), provided that if on such date no such rate is so displayed
for the relevant Interest Period, LIBOR for such period shall be the rate
quoted to the Administrative Agent by the Reference Bank at the request of
the Administrative Agent as the offered rate for deposits of Dollars in an
amount approximately equal to the amount in relation to which LIBOR is to
be determined for a period equivalent to the relevant Interest Period to
prime banks in the London Interbank Market at or about 11:00 a.m.
(London time) on the second Banking Day before the first day of such
period;
|
||
“Liquid
Funds”
|
means,
measured at the end of an Accounting Period: (a) cash in hand
or held with banks or other financial institutions of the Guarantor and/or
any other Security Party in Dollars or another currency freely convertible
into Dollars, which is free of any security interest (other than a
permitted security interest and other than ordinary bankers’ liens which
have not been enforced or become capable of being enforced); or (b) any
other short-term financial investments which is free of any Security
Interest (other than a permitted security interest), as stated in the then
most recent accounting information delivered to the Administrative Agent
hereunder;
|
|
“Loan-to-Value
Ratio”
|
shall
mean the ratio of the outstanding amount of the Facility over the
aggregate Fair Market Value of the Vessels;
|
|
“Majority
Lenders”
|
means,
at any time, Lenders holding an aggregate of more than 60% of the Advances
then outstanding;
|
|
“Mandated
Lead Arranger”
|
shall
have the meaning ascribed thereto in the preamble;
|
|
“Mandatory
Costs”
|
means
the cost of complying with any applicable regulatory requirements of any
relevant regulatory authority;
|
|
“Margin”
|
shall
mean (a) 1.00% per annum while the Vessels are employed under time charter
party agreements acceptable to the Agent for periods of at least twelve
(12) months and (b) 1.125% per annum at all other times;
|
“Material
Adverse Effect”
|
shall
mean a material adverse effect on (i) the ability of the Borrowers to
repay the Advances or perform any of its obligations hereunder or under
the Note, (ii) the ability of any Security Party to perform its
obligations under any Security Documents or (iii) the business,
property, assets, liabilities, operations, condition (financial or
otherwise) or prospects of the Security Parties taken as a
whole;
|
|
“Minimum
Liquidity Amount”
|
shall
have the meaning ascribed thereto in Section 9.3(c);
|
|
“Mortgage(s)”
|
means
each of the first preferred cross-collateralized ship mortgages on each of
the Vessels, to be executed under the laws of a Permitted Jurisdiction by
the respective Borrower, as owner, as listed in Schedule 2 in favor of the
Security Trustee (as trustee for the Lenders) pursuant to
Section 4.2(b), substantially in the form set out in Exhibit
D;
|
|
“MTSA”
|
means
the Maritime and Transportation Security Act, 2002, as amended,
inter
alia
, by Public
Law 107-295;
|
|
“Noir”
|
shall
have the meaning ascribed thereto in the preamble;
|
|
“Note”
|
means
the promissory note to be executed by the Borrowers to the order of the
Administrative Agent pursuant to Section 4.1(b), to evidence the
Facility, substantially in the form set out in
Exhibit A;
|
|
“OCEAN
SPIRIT”
|
means
that certain Vessel to be owned by Amalfi and to be renamed AMALFI, the
details of which are set forth on Schedule 2 hereto, to be delivered with
a time charter contract with China Ocean Shipping (Group) Company with a
maturity date of not less than 14 months from its Delivery Date at a net
rate of not less than $22,000 per day, such charter party agreement to be
subject to the approval of the Mandated Lead Arranger;
|
|
“Operator”
|
means,
in respect of any Vessel, the Person who is concerned with the operation
of such Vessel and falls within the definition of “Company” set out in
rule 1.1.2 of the ISM Code;
|
“Payment
Dates”
|
means
the Initial Payment Date and the dates falling at three month intervals
thereafter, the last of which is the Final Payment Date;
|
|
“Permitted
Jurisdiction”
|
means
the Republic of the Marshall Islands, the Republic of Liberia [, the
Republic of Greece] or such other jurisdiction as may be approved in
writing by the Majority Lenders;
|
|
“Person”
|
means
any individual, sole proprietorship, corporation, partnership (general or
limited), limited liability company, business trust, bank, trust company,
joint venture, association, joint stock company, trust or other
unincorporated organization, whether or not a legal entity, or any
government or agency or political subdivision thereof;
|
|
“Proceeding”
|
shall
have the meaning ascribed thereto in Section 8.1(i);
|
|
“Reference
Bank”
|
means
HSH;
|
|
“Regulation
T”
|
means
Regulation T of the Board of Governors of the Federal Reserve System, as
in effect from time to time;
|
|
“Regulation
U”
|
means
Regulation U of the Board of Governors of the Federal Reserve System, as
in effect from time to time;
|
|
“Regulation
X”
|
means
Regulation X of the Board of Governors of the Federal Reserve System, as
in effect from time to time;
|
|
“Required
Percentage”
|
means,
until the fourth anniversary of this Credit Facility Agreement, one
hundred and thirty percent (130%), and thereafter, one hundred and thirty
five percent (135%) of the amount of the outstanding Facility and the
notional cost or actual cost (if any) as determined by the Lender of
terminating any interest rate swap entered into by the
Borrowers;
|
|
“Retention
Account”
|
shall
have the meaning ascribed thereto in Section 4.1(h);
|
|
“Retention
Amount”
|
shall
mean an amount equal to one third (1/3) of the next quarterly principal
payment due in accordance with Section 5 hereof and the relevant fraction
of interest accruing on the Facility during the next month in
|
accordance
with Section 6 hereof;
|
||
“Retention
Date”
|
shall
mean the date one month after the respective Drawdown Date and at monthly
intervals thereafter;
|
|
“SALMAS”
|
means
that certain Vessel to be owned by Noir and to be renamed BERTRAM, the
details of which are set forth on Schedule 2 hereto, to be delivered with
a time charter contract with Korea Line Corporation with a maturity date
of a minimum of 24 months and a maximum of 28 months from its Delivery
Date at a net rate of not less than $29,680 per day, such charter party
agreement to be subject to the approval of the Mandated Lead
Arranger;
|
|
“Security
Document(s)”
|
means
the Guaranty, the Mortgages, the Assignments, the Account Pledges and any
other documents that may be executed as security for the Facility and the
Borrowers’ obligations in connection therewith;
|
|
“Security
Party(ies)”
|
means
each of the Borrowers and the Guarantor;
|
|
“Security
Trustee”
|
shall
have the meaning ascribed thereto in the preamble;
|
|
“SMC”
|
means
the safety management certificate issued in respect of each Vessel in
accordance with rule 13 of the ISM code;
|
|
“Subsidiary(ies)”
|
means,
with respect to any Person, any business entity of which more than 50% of
the outstanding voting stock or other equity interest is owned directly or
indirectly by such Person and/or one or more other Subsidiaries of such
Person;
|
|
“Swap
Provider”
|
shall
mean HSH or such other Lender as may enter into an Interest Rate
Agreement;
|
|
“Tangible
Fixed Assets”
|
means,
measured at the end of an Accounting Period, the value (less
depreciation computed in accordance with GAAP) on a consolidated basis of
all tangible fixed assets of the Security Parties as stated in the then
most recent accounting information delivered to the Administrative Agent
hereunder;
|
|
“Taxes”
|
means
any present or future income or other taxes, levies, duties, charges,
fees, deductions or withholdings of any nature now or hereafter imposed,
levied, collected, withheld or assessed by any taxing authority
whatsoever, except for taxes on or measured by the overall net income of
each Lender imposed by its jurisdiction of incorporation
|
or
applicable lending office, the United States of America, the State or City
of New York or any governmental subdivision or taxing authority of any
thereof or by any other taxing authority having jurisdiction over such
Lender (unless such jurisdiction is asserted by reason of the activities
of any of the Security Parties);
|
||
“Total
Assets”
|
means,
measured at the end of an Accounting Period, the aggregate of
Current Assets and Tangible Fixed Assets as stated in the then most recent
financial information delivered to the Administrative Agent
hereunder;
|
|
“Total
Loss”
|
shall
have the meaning ascribed thereto in the Mortgages;
|
|
“Tranche(s)”
|
means
any, all or any combination, as the context requires, of Tranche A,
Tranche B and Tranche C;
|
|
“Tranche
A”
|
means
the lesser of Thirty Five Million Seventy Eight Thousand Forty Seven
Dollars ($35,078,047) and sixty-five percent (65%) of the Fair Market
Value of the VOC GALLANT, to be made available to the Borrowers in one (1)
Advance;
|
|
“Tranche
B”
|
means
the lesser of Twenty Nine Million Six Hundred Seventy One Thousand Three
Hundred Forty Three Dollars ($29,671,343) and sixty-five percent (65%) of
the Fair Market Value of the SALMAS, to be made available to the Borrowers
in one (1) Advance;
|
|
“Tranche
C”
|
means
the lesser of Thirty Million Two Hundred Fifty Thousand Six Hundred Ten
Dollars ($30,250,610) and sixty-five percent (65%) of the Fair Market
Value of the OCEAN SPIRIT, to be made available to the Borrowers in one
(1) Advance;
|
|
“Underwriter”
|
shall
have the meaning ascribed thereto in the preamble;
|
|
“Vessel(s)”
|
each
of the VOC GALLANT, SALMAS and OCEAN SPIRIT, registered or to be
registered in the name of the relevant Borrower, as owner, as set forth in
Schedule 2 hereto, but excluding any Vessel for which a mandatory
prepayment is made pursuant to Section 5.3; and
|
|
“VOC
GALLANT”
|
means
that certain Vessel to be owned by Jeke, the details of which are set
forth on Schedule 2 hereto, to be delivered with a bareboat charter with
Harren & Partner Schiffahrts GmbH & Co. KG, as charterer, with a
maturity date
|
|
between
May 1, 2009 and June 30, 2009 at a net rate of not less than $25,650 per
day, such bareboat charter party agreement and charterer to be subject to
the approval of the Mandated Lead Arranger.
|
2.
|
REPRESENTATIONS AND
WARRANTIES
|
|
(i)
|
will
be in the sole and absolute ownership of the respective Borrower as set
forth in Schedule 2 and duly registered in such Borrower's name under
the flag of a Permitted Jurisdiction, unencumbered, save and except for
the Mortgage recorded against it and as permitted
thereby;
|
|
(ii)
|
will
be classed in the highest classification and rating for vessels of the
same age and type with the respective Classification Society as set forth
in Schedule 2 without any outstanding recommendations affecting class
and without any qualifications;
|
|
(iii)
|
will
be operationally seaworthy and in every way fit for its intended service;
and
|
|
(iv)
|
will
be insured in accordance with the provisions of the Mortgage recorded
against it and the requirements thereof in respect of such insurances will
have been complied with;
|
3.
|
THE
ADVANCES
|
(i) |
Each
of the Lenders, relying upon each of the representations and warranties
set out in Section 2, hereby severally and not jointly agrees with
the Borrowers that, subject to and upon the terms of this Credit Facility
Agreement, it will, not later than 11:00 A.M. (New York City time) on the
Drawdown Date of Advance in respect of each Tranche (except as provided in
subsection (ii) of this Section), make its portion of the relevant
Advance, in Federal or other funds immediately available in New York City,
to the Administrative Agent at its address and to such account as set
forth on Schedule 1 or to such account of the Administrative Agent most
recently designated by it for such purpose by notice to the
Lenders. Unless the Administrative Agent determines that any
applicable condition specified in Section 4.1, 4.2, 4.3 or 4.4 has not
been satisfied, the Administrative Agent will make the funds so received
from the Lenders available to the Borrowers at the aforesaid address,
subject to the receipt of the funds by the Administrative Agent as
provided in the immediately preceding sentence, not later than 10:00A.M.
(New York City time) on the date of such Advance, and in any event as soon
as practicable after receipt. All Advances, subject to the other terms and
conditions hereof, shall
|
|
be
in a minimum amount of One Million Dollars ($1,000,000) and in multiples
of Two Hundred Fifty Thousand Dollars ($250,000). The Facility and each
Tranche hereunder shall be repayable as provided in Section
5. The Lenders’ obligation to make any Advance in respect of
any Tranche hereunder shall terminate if the Vessel to which such Tranche
relates is not delivered to the Borrowers by the Commitment Termination
Date.
|
||
|
(ii)
|
Unless
the Administrative Agent shall have received notice from a Lender prior to
the Drawdown Date of any Advance that such Lender will not make available
to the Administrative Agent such Lender’s share of such Advance, the
Administrative Agent may assume that such Lender has made such share
available to the Administrative Agent on the date of such Advance in
accordance with this Section 3.1 and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrowers on such
date a corresponding amount. If and to the extent that such
Lender shall not have so made such share available to the Administrative
Agent, such Lender and the Borrowers (but without duplication and not if
such Lender is an affiliate of the Administrative Agent) severally agree
to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the
date such amount is made available to the Borrowers until the date such
amount is repaid to the Administrative Agent, at (i) in the case of
the Borrowers, a rate per annum equal to the higher of (y) the LIBOR rate
for overnight or weekend deposits plus the Margin and (z) the interest
rate applicable thereto pursuant to Section 6.1 and (ii) in the
case of such Lender, the LIBOR rate for overnight or weekend
deposits. If such Lender shall repay to the Administrative
Agent such corresponding amount, such amount so repaid shall constitute
such Lender’s Advance included in such Advance for purposes of this Credit
Facility Agreement as of the date such Advance was
made. Nothing in this subsection (b)(ii) shall be deemed
to relieve any Lender of its obligation to make Advances to the extent
provided in this Credit Facility Agreement. In the event
that
the Borrowers are required to repay an Advance to the Administrative Agent
pursuant to this Section 3.1(b)(ii), as between the Borrowers and the
defaulting Lender, the liability for any breakfunding costs as described
in Section 4.4 shall be borne by the defaulting Lender. If the
defaulting Lender has not paid any such breakage costs upon demand by the
Administrative Agent therefor, the Borrowers shall pay such breakage costs
upon demand by the Administrative Agent and the Borrowers shall be
entitled to recover any such payment for breakfunding costs made by the
Borrowers from the defaulting
Lender.
|
4.
|
CONDITIONS
|
|
(i)
|
copies, certified as
true and complete by an officer of each of the Borrowers, of the
resolutions of their respective board of directors evidencing approval of
this Credit Facility Agreement, the Note and those Security Documents to
which it is to be a party and authorizing an appropriate officer or
officers or attorney-in-fact or attorneys-in
fact to
execute the same on its behalf, or other evidence of such approvals and
authorizations;
|
|
(ii)
|
copies,
certified as true and complete by an officer of the Guarantor, of the
resolutions of the board of directors evidencing approval of this Credit
Facility, the Guaranty and those Security Documents to which it is to be a
party and authorizing an appropriate officer or officers or
attorney-in-fact or attorneys-in-fact to execute the same on its behalf,
or other evidence of such approvals and
authorizations;
|
|
(iii)
|
copies,
certified as true and complete by an officer of each Security Party, of
all documents evidencing any other necessary action
|
(including
actions by such parties thereto other than the Security Parties as may be
required by the Administrative Agent), approvals or consents with respect
to this Credit Facility Agreement, the Note and the Security
Documents;
|
||
|
(iv)
|
copies,
certified as true and complete by an officer of each Security Party, of
the certificate of incorporation and by-laws, certificate of formation and
operating agreement, or equivalent instruments
thereof;
|
|
(v)
|
certificate
of an authorized officer of the Guarantor certifying that it legally and
beneficially owns, directly or indirectly, all of the issued and
outstanding capital stock, or limited liability company membership
interests, as the case may be, of each of the Borrowers and that such
capital stock or membership interests are free and clear of any liens,
claims, pledges or other encumbrances whatsoever and have been paid in
full; and
|
|
(vi)
|
certificates
of the jurisdiction of incorporation or formation, as the case may be, of
each Security Party as to the good standing
thereof;
|
|
(i)
|
completed
bank account opening mandates with telephone and fax indemnities to
include the list of the Borrowers’ authorized signatories and specimens of
their signatures;
|
|
(ii)
|
certified
list of directors, including titles, business and residential addresses
and dates of birth;
|
|
(iii)
|
certified
true copy of photo identification (i.e. passport or driving license) and
evidence of residential address (i.e. utility bill or bank statement) for
all authorized signatories;
|
|
(iv)
|
certificate
of ultimate beneficial ownership, certified by the respective secretary of
such entity, from the Borrowers with respect to each other Security Party;
and
|
|
(v)
|
non-resident
declaration forms.
|
|
(i)
|
has
been delivered to the relevant Borrower and that the relevant Borrower has
paid its equity portion of the purchase price of the Vessel to the sellers
of the Vessel;
|
|
(ii)
|
is
in the sole and absolute ownership of the relevant Borrower and duly
registered in such Borrower’s name under the flag of a Permitted
Jurisdiction, respectively, unencumbered, save and except for the
Mortgage, recorded against it and as otherwise permitted
thereby;
|
|
(iii)
|
is
classed in the highest classification and rating for vessels of the same
age and type with the respective Classification Society as set forth in
Schedule 2 without any material outstanding
recommendations;
|
|
(iv)
|
is
operationally seaworthy and in every way fit for its intended service;
and
|
|
(v)
|
is
insured in accordance with the provisions of the Mortgage recorded against
it and the requirements thereof in respect of such insurance have been
complied with;
|
|
(i)
|
the
Mortgage over its Vessel;
|
|
(ii)
|
an
Insurances Assignment with respect to its
Vessel;
|
|
(iii)
|
an
Earnings Assignment with respect to its
Vessel;
|
|
(iv)
|
the
Assignment Notices with respect to the above-indicated Insurances
Assignments and Earnings Assignments;
and
|
|
(v)
|
Uniform
Commercial Code Financing Statements for filing with the District of
Columbia and in such other jurisdictions as the Administrative Agent may
reasonably require;
|
|
(i)
|
a
management agreement with an Approved
Manager;
|
|
(ii)
|
any
Charter Party Agreement entered into in respect of the
Vessel;
|
|
(iii)
|
the
memorandum of agreement entered into in respect of the
Vessel;
|
|
(iv)
|
a
copy of the bill of sale for the
Vessel;
|
|
(v)
|
a
copy of the protocol of delivery for the Vessel;
and
|
|
(vi)
|
a
transcript of registry and a certificate of ownership and encumbrance
indicating the Vessel’s registration in the name of such Borrower free and
clear of all registered encumbrances other than the Mortgage
thereon;
|
5.
|
REPAYMENT AND
PREPAYMENT
|
6.
|
INTEREST AND
RATE
|
7.
|
PAYMENTS
|
8.
|
EVENTS OF
DEFAULT
|
9.
|
COVENANTS
|
(i) |
as
soon as available but not later than one hundred twenty (120) days after
the end of each fiscal year of the Guarantor, complete copies of the
consolidated financial reports of the Guarantor and its Subsidiaries
(together with a Compliance Certificate and a detailed reconciliation of
all of the differences between GAAP as at December 31, 2006 and as at the
time of delivery), all in reasonable detail, which shall include at least
the consolidated balance sheet of the Guarantor and its Subsidiaries as of
the end of such year and the related consolidated statements of income and
sources and uses of funds for such year, which shall be audited reports
prepared by an Acceptable Accounting Firm, and each of the Borrowers shall
provide to each Lender as soon as available but not later than one hundred
eighty (180) days after the end of each fiscal year of such Borrower and
any Charterers, complete copies of the consolidated financial reports of
each of the Borrowers and any Charterers;
|
|
|
|
(ii)
|
as
soon as available but not later than forty-five (45) days after the
end of each of the first three quarters of each fiscal year of the
Guarantor, a quarterly interim consolidated balance sheet of the Guarantor
and its Subsidiaries and the related consolidated profit and loss
statements and sources and uses of funds (together with a Compliance
Certificate and a detailed reconciliation of all of the differences
between GAAP as at December 31, 2006 and as at the time of delivery), all
in reasonable detail, unaudited, but certified to be true and complete by
the chief financial officer of the
Guarantor;
|
|
(iii)
|
within
ten (10) days of the filing thereof at the email addresses set forth in
Schedule 1, electronic copies of all registration statements and reports
on Forms 10-K, 10-Q and 8-K (or their equivalents) and other material
filings which the Guarantor shall have filed with the Securities and
Exchange Commission or any similar governmental
authority;
|
|
(iv)
|
promptly
upon the mailing thereof to the shareholders of the Guarantor, copies of
all financial statements, reports, proxy statements and other
communications provided to the Guarantor’s
shareholders;
|
|
(v)
|
within
ten (10) days of the Security Parties’ receipt thereof, copies of all
audit letters or other correspondence from any external auditors including
material financial information in respect of the Security
Parties;
|
|
(vi)
|
such
other statements (including, without limitation, monthly consolidated
statements of operating revenues and expenses), lists of assets and
accounts, budgets, forecasts, reports and other financial information with
respect to its business as the Administrative Agent may from time to time
request, certified to be true and complete by the chief financial officer
of each of the Guarantor;
|
|
(i)
|
the
Mortgages, the Assignments and other liens in favor of the Security
Trustee; and
|
|
(ii)
|
liens,
charges and encumbrances against their respective Vessels permitted to
exist under the terms of the
Mortgages;
|
10.
|
ASSIGNMENT
|
11.
|
ILLEGALITY, INCREASED
COST, NON-AVAILABILITY, ETC.
|
|
(i)
|
subject
any Lender to any Taxes with respect to its income from the Facility, or
any part thereof; or
|
|
(ii)
|
change
the basis of taxation to any Lender of payments of principal or interest
or any other payment due or to become due pursuant to this Credit Facility
Agreement (other than a change in the basis effected by the jurisdiction
of organization of such Lender, the jurisdiction of
|
the
principal place of business of such Lender, the United States of America,
the State or City of New York or any governmental subdivision or other
taxing authority having jurisdiction over such Lender (unless
such jurisdiction is asserted by reason of the activities of the Borrowers
or any of the other Security Parties) or such other jurisdiction where the
Facility may be payable); or
|
||
|
(iii)
|
impose,
modify or deem applicable any reserve requirements or require the making
of any special deposits against or in respect of any assets or liabilities
of, deposits with or for the account of, or loans by, a Lender;
or
|
|
(iv)
|
impose
on any Lender any other condition affecting the Facility or any part
thereof;
|
|
(i)
|
the
Lender shall notify the Administrative Agent and the Borrowers of the
happening of such event, and
|
|
(ii)
|
the
Borrowers agree forthwith upon demand to pay to such Lender such amount as
such Lender certifies to be necessary to compensate such Lender for such
additional cost or such reduction.
|
12.
|
CURRENCY
INDEMNITY
|
13.
|
FEES AND
EXPENSES
|
14.
|
APPLICABLE LAW,
JURISDICTION AND WAIVER
|
15.
|
THE
AGENTS
|
16.
|
NOTICES AND
DEMANDS
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17.
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MISCELLANEOUS
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TOP TANKERS INC. | |
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By:
/s/ Gary Wolfe
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Name:
Gary Wolfe
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Title:
Attorney-in-Fact
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Lenders
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Commitment
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HSH
Nordbank AG
Gerhart-Hauptmann-Platz
50
20095
Hamburg, Germany
Attn:
Shipping, Greek Clients
Fax: +
49 40 3333 34118
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$95,000,000
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Agents
HSH
Nordbank AG
Gerhart-Hauptmann-Platz
50
20095
Hamburg, Germany
Attn:
Shipping, Greek Clients
Fax: +
49 40 3333 34118
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Name of Vessel
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Owner
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Official Number
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IMO Number
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Flag
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DWT
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Year Built
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||||||
VOC
GALLANT
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Jeke
Shipping Company Limited
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9257072 |
Liberia
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51,201 |
2002
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|||||||
SALMAS
(tbr BERTRAM)
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Noir
Shipping S.A.
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9087269 |
Marshall
Islands
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73,506 |
1995
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|||||||
OCEAN
SPIRIT (tbr AMALFI)
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Amalfi
Shipping Company Limited
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9218337 |
Marshall
Islands
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45,526 |
2000
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US$48,000,000
SECURED
LOAN
AGREEMENT
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1
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Definitions
and Interpretation
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1
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2
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The
Loan and its Purpose
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10
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3
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Conditions
of Utilisation
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11
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4
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Advance
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11
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5
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Repayment
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12
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6
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Prepayment
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12
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7
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Interest
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14
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8
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Indemnities
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16
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9
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Fees
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20
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10
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Security
and Application of Moneys
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23
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11.
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Representations
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23
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12
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Undertakings
and Covenants
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26
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13
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Events
of Default
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34
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14
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Assignment
and Sub-Participation
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38
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15
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Set-Off
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38
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16
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Payments
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39
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17
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Notices
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40
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18
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Partial
Invalidity
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41
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19
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Remedies
and Waivers
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42
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20
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Miscellaneous
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42
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21
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Law
and jurisdiction.
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43
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SCHEDULE
1: Conditions Precedent and Subsequent
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45
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Part
I: Conditions precedent
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45
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Part
II Conditions subsequent
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50
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SCHEDULE
3: Form of Drawdown Notice
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51
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JAPAN
III SHIPPING COMPANY LIMITED SCHEDULE 4: Form of Compliance
Certificate
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51
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SCHEDULE
4: Form of Compliance Certificate
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52
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(1)
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JAPAN III SHIPPING COMPANY
LIMITED,
a company incorporated under the laws of the Republic of
Liberia whose registered office is at 80 Broad Street Monrovia, Liberia
(the
"Borrower");
and
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(2)
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ALPHA BANK A.E.,
acting
through its office at 89 Akti Miaouli, GR 185 38 Piraeus, Greece (the
"Lender").
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(A)
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The
Borrower has agreed to purchase the Vessel from the Seller on the terms of
the MOA and intends to register the Vessel under the flag of the Republic
of Liberia.
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(B)
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The
Lender has agreed to advance to the Borrower an amount not exceeding forty
eight million Dollars ($48,000,000) representing sixty five per centum
(65%) of the Purchase Price to assist the Borrower to finance part of the
Purchase Price.
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1.1
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In
this Agreement:
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(a)
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moneys
borrowed;
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(b)
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any
acceptance credit;
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(c)
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any
bond, note, debenture, loan stock or similar instrument;
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(d)
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any
finance or capital lease;
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(e)
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receivables
sold or discounted (other than on a non-recourse basis);
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(f)
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deferred
payments for assets or services;
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(g)
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any
derivative transaction protecting against or benefiting from fluctuations
in any rate or price (and, when calculating the value of any derivative
transaction, only the marked to market value shall be taken into
account);
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(h)
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any
amount raised under any other transaction (including any forward sale or
purchase agreement) having the commercial effect of a
borrowing;
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(i)
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any
counter-indemnity obligation in respect of a guarantee, indemnity, bond,
standby or documentary letter of credit or any other instrument issued by
a bank or financial institution; and
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(j)
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the
amount of any liability in respect of any guarantee or indemnity for any
of the items referred to in paragraphs (a) to (i) above.
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"
Guarantor
" means Top
Tankers Inc., a company incorporated under the laws of the Marshall
Islands, having its registered office at the Trust Company Complex,
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(a)
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the
applicable Screen Rate; or
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(b)
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(if
no Screen Rate is available for any Interest Period) the arithmetic mean
of the rates (rounded upwards to the nearest whole multiple of
one-sixteenth of one per centum) quoted to the Lender in the London
interbank market,
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(a)
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an
actual, constructive, arranged, agreed or compromised total loss of the
Vessel; or
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(b)
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the
requisition for title or compulsory acquisition of the Vessel by any
government or other competent authority (other than by way of requisition
for hire); or
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(c)
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the
capture, seizure, arrest, detention or confiscation of the Vessel by any
government or by persons acting or purporting to act on behalf of any
government, unless the Vessel is released and returned to the possession
of the Borrower within forty five (45) days after the capture, seizure,
arrest, detention or confiscation in question.
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1.2
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In
this Agreement:
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1.2.1
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words
denoting the plural number include the singular and vice
versa;
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1.2.2
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words
denoting persons include corporations, partnerships, associations of
persons (whether incorporated or not) or governmental or
quasi-governmental bodies or authorities and vice versa;
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1.2.3
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references
to Recitals, Clauses and Schedules are references to recitals, clauses and
schedules to or of this Agreement;
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1.2.4
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references
to this Agreement include the Recitals and the Schedules;
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1.2.5
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the
headings and contents page(s) are for the purpose of reference only, have
no legal or other significance, and shall be ignored in the interpretation
of this Agreement;
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1.2.6
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references
to any document (including, without limitation, to all or any of the
Relevant Documents) are, unless the context otherwise requires, references
to that document as amended, supplemented, novated or replaced from time
to time;
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1.2.7
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references
to statutes or provisions of statutes are references to those statutes, or
those provisions, as from time to time amended, replaced or
re-enacted;
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1.2.8
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references
to the Lender include its successors, transferees and assignees;
and
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1.2.9
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a
time of day (unless otherwise specified) is a reference to London
time.
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1.3
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Offer
letter
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2.
1
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Amount
Subject to the
terms of this Agreement, the Lender agrees to make available to the
Borrower a term loan in an aggregate amount not exceeding the Maximum Loan
Amount.
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2.7
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Purpose
The Borrower
shall apply the Loan for the purposes referred to in Recital
(B).
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2.
3
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Monitoring
The Lender
shall not be bound to monitor or verify the application of any amount
borrowed under this Agreement.
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3.1
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Conditions precedent
The
Borrower is not entitled to have the Loan advanced unless the Lender has
received all of the documents and other evidence listed in Part I of
Schedule 1
(Conditions
precedent).
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3.2
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Further conditions precedent
The Lender will only be obliged to advance the Loan if on the date
of the Drawdown Notice and on the proposed Drawdown Date:
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3.2.1
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no
Default is continuing or would result from the advance of the Loan:
and;
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3.2.2
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the
representations made by the Borrower under Clause I1
(Representations)
are
true in all material respects.
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3.3
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Conditions subsequent
The Borrower undertakes to deliver or to cause to be delivered to
the Lender on, or as soon as practicable after, the Drawdown Date the
additional documents and other evidence listed in Part II of Schedule I
(Conditions
subsequent).
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3.4
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No Waiver
If the Lender
in its sole discretion agrees to advance all or any part of the Loan to
the Borrower before all of the documents and evidence required by Clause
3.1
(Conditions
precedent)
have been delivered to or to the order of the Lender,
the Borrower undertakes to deliver all outstanding documents and evidence
to or to the order of the Lender no later than thirty (30) days after the
Drawdown Date or such other date specified by the Lender.
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3.5
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Form and content
All
documents and evidence delivered to the Lender under this Clause 3
shall:
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3.5.1
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be
in form and substance acceptable to the Lender; and
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3.5.2
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if
required by the Lender, be certified, notarised, legalised or attested in
a manner acceptable to the Lender.
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5.1
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Repayment of Loan
The
Borrower agrees to repay the Loan to the Lender by thirty two (32)
consecutive quarterly instalments, the first four such instalments
(1st-4th) each in the sum of two million seven hundred and fifty thousand
Dollars ($2,750,000), the following four such instalments (5th-8th) each
in the sum of two million two hundred and fifty thousand Dollars
($2,250,000), the following four such instalments (9th-12th) each in the
sum of one million two hundred and fifty thousand Dollars ($1,250,000) and
the following nineteen such instalments (13th-31st) each in the amount of
seven hundred and fifty thousand Dollars ($750,000) and the thirty second
(32nd) and final instalment in the amount of eight million seven hundred
and fifty thousand Dollars ($8,750,000) (consisting of an instalment of
seven hundred and fifty thousand Dollars ($750,000) and a balloon payment
of eight million Dollars ($8,000,000) (the
"Balloon Payment")
the
first instalment falling due on the date which is three calendar months
after the Drawdown Date and subsequent instalments falling due at
consecutive intervals of three calendar months thereafter with the last
instalment falling due on the Final Maturity Date.
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5.2
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Reduction of Repayment
Instalments
If the aggregate amount advanced to the Borrower is
less than the Maximum Loan Amount, the amount of each Repayment Instalment
shall be reduced pro rata to the amount actually advanced.
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5.3
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Reborrowing
The Borrower
may not reborrow any part of the Loan which is repaid or
prepaid.
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6.1
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Illegality
If it becomes
unlawful in any jurisdiction for the Lender to perform any of its
obligations as contemplated by this Agreement or to fund or maintain the
Loan:
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6.1.1
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the
Lender shall promptly notify the Borrower of that event; and
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6.1.2
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the
Borrower shall repay the Loan (to the extent already advanced) on the last
day of the current Interest Period or, if earlier, the date. specified by
the Lender in the notice delivered to the Borrower (being no earlier than
the last day of any applicable grace period permitted by
law).
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6.2
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Voluntary prepayment of Loan
The Borrower may prepay the. whole or any part of the Loan (but, if
in part, being an amount that reduces the Loan by a minimum amount of five
hundred thousand Dollars ($500,000) or integral multiples thereof) subject
as follows:
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6.2.1
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it
gives the Lender not less than fifteen (15) Business Days' (or such
shorter period as the Lender may agree) prior notice;
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6.2.2
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no
prepayment may be made until after the Availability Termination Date;
and
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6.2.3
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any
prepayment under this Clause 6.2 shall satisfy the obligations under
Clause 5.1
(Repayment of
Loan)
as follows:
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(a)
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if
prepayment is made within two years after the Drawdown Date, fifty per
cent (50%) of such prepayment shall be applied in reducing pro rata any
unpaid part of the first eight (1st-8th) Repayment Instalments and the
other fifty per cent (50%) of such prepayment shall he applied in reducing
pro rata the following twenty four (9th-32nd) Repayment
Instalments;
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(b)
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if
prepayment is made following the repayment of the eighth (8th) Repayment
Instalment, such prepayment shall be applied in reducing pro rata the
outstanding Repayment Instalments including the Balloon
Payment.
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6.3
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Mandatory prepayment on sale
or
Total Loss
I
f the Vessel is sold by the Borrower or becomes a Total Loss, the
Borrower shall, simultaneously with any such sale or within one hundred
and fifty (150) days after any such Total Loss, prepay the whole of the
Loan.
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6.4
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Restrictions
Any notice
of prepayment given under this Clause 6 shall be irrevocable and, unless a
contrary indication appears in this Agreement, shall
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7.1
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Interest Periods
The
period during which the Loan shall be outstanding under this Agreement
shall be divided into consecutive Interest Periods of one, three or six
months' duration or longer duration subject to the Lender's consent and
market availability, as selected by the Borrower by written notice to the
Lender not later than 11.00 a.m. on the third Business Day before the
beginning of the Interest Period in question, or such other duration as
may be agreed by the Lender.
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7.2
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Beginning and end of Interest
Periods
Each Interest Period shall start on the Drawdown Date or
(if the Loan is already made) on the last day of the preceding Interest
Period and end on the date which numerically corresponds to the Drawdown
Date or the last day of the preceding Interest Period in the relevant
calendar month except that, if there is no numerically corresponding date
in that calendar month, the Interest Period shall end on the last Business
Day in that month.
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7.3
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Interest Periods to meet
Repayment Dates
If an Interest Period would otherwise expire after
the next Repayment Date, there shall be a separate Interest Period for a
part of the Loan equal to the relevant Repayment Instalment which shall
expire on the next Repayment Date and the interest Period determined shall
apply only to the balance of the Loan.
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7.4
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Non-Business
Days
If an Interest Period would
otherwise end on a day which is not a Business Day, that Interest Period
will instead end on the next Business Day in that calendar month (if there
is one) or the preceding Business Day (if there is not).
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7.5
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Interest rate
During
each Interest Period interest shall accrue on the Loan at the rate
determined by the Lender to be the aggregate of (a) the Margin, and (b)
LIBOR.
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7.6
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Failure to select Interest Period
If the
Borrower at any time fails to select or agree an Interest Period in
accordance with Clause 7.1
(Interest Periods)
, the
interest rate
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7.7
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Accrual and payment of interest
Interest shall accrue from day to day, shall be calculated on the
basis of a 360 day year and the actual number of days elapsed (or, in any
circumstance where market practice differs, in accordance with the
prevailing market practice) and shall be paid by the Borrower to the
Lender on the last day of each Interest Period and, if the Interest Period
is longer than three months, on the dates falling at three monthly
intervals after the first day of that Interest Period.
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7.8
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Default interest
If the
Borrower fails to pay any amount payable by it under a Finance Document on
its due date, interest shall accrue on the overdue amount from the due
date up to the date of actual payment (both before and after judgment) at
a rate which is two per cent (2%) higher than the rate which would have
been payable if the overdue amount had, during the period of non-payment,
constituted the Loan in the currency of the overdue amount for successive
Interest Periods, each selected by the Lender (acting reasonably). Any
interest accruing under this Clause 7.8 shall be immediately payable by
the Borrower on demand by the Lender. If unpaid, any such interest will be
compounded with the overdue amount at the end of each Interest Period
applicable to that overdue amount but will remain immediately due and
payable.
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7.9
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Changes in market circumstances
If at any time the Lender determines (which determination shall be
final and conclusive and binding on the Borrower) that, by reason of
changes affecting the London interbank market, adequate and fair means do
not exist for determining the rate of interest on the Loan for any
Interest Period:
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7.9.1
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the
Lender shall give notice to the Borrower of the occurrence of such event;
and
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7.9.2
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the
rate of interest on the Loan for that Interest Period shall be the rate
per annum which is the sum of:
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(a)
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the
Margin; and
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(b)
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the
rate which expresses as a percentage rate per annum the cost to the Lender
of funding the Loan from whatever source it may reasonably
select,
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7.9.3
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the
Lender will negotiate with the Borrower in good faith with a view to
modifying this Agreement to provide a substitute basis for determining the
rate of interest which is financially a substantial equivalent to the
basis provided for in this Agreement;
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7.9.4
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any
substitute basis agreed pursuant to Clause 7.9.3 shall be binding on the
parties to this Agreement; and
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7.9.5
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if,
within thirty (30) days of the giving of the notice referred to in Clause
7.9.1, the Borrower and the Lender fail to agree in writing on a
substitute basis for determining the rate of interest, the Borrower will
immediately prepay the Loan, together with any Break Costs.
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7.10
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Determinations conclusive
The Lender shall promptly notify the Borrower of the determination
of a rate of interest under this Clause 7 and each such determination
shall (save in the case of manifest error) be final and
conclusive.
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8.1
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Transaction expenses
The
Borrower will, within fourteen (14) days of the Lender's written demand,
pay the Lender the amount of all costs and expenses (including legal fees
and Value Added Tax or any similar or replacement tax if applicable)
incurred by the Lender in connection with:
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8.1.1
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the
negotiation, preparation, printing, execution and registration of the
Finance
Documents (whether or not any Finance Document is actually executed or
registered and whether or not all or any part of the Loan is
advanced);
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8.1.2
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any
amendment, addendum or supplement to any Finance Document (whether or not
completed); and:
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8.1.3
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any
other document which may at any time be required by the Lender to give
effect to any Finance Document or which the Lender is entitled to call for
or obtain under any Finance Document.
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8.2
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Funding costs
The
Borrower shall indemnify the Lender on the Lender's written demand against
all losses and costs incurred or sustained by the Lender if, for any
reason, the Loan is not advanced to the Borrower after the relevant
Drawdown Notice has been given to the Lender, or is advanced on a date
other than that requested in the Drawdown Notice (unless, in either case,
as a result of any default by the Lender).
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8.3
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Break Costs
The Borrower
shall indemnify the Lender on the Lender's written demand against all
costs, losses, premiums or penalties incurred by the Lender as a result of
its receiving any prepayment of all or any part of the Loan (whether
pursuant to Clause 6
(Prepayment)
or
otherwise) on a day other than the last day of an Interest Period for the
Loan or relevant part of the Loan, or any other payment under or in
relation to the Finance Documents on a day other than the due date for
payment of the sum in question, including (without limitation) any losses
or costs incurred in liquidating or re-employing deposits from third
parties acquired to effect or maintain all or any part of the Loan, and
any liabilities, expenses or losses incurred by the Lender in terminating
or reversing, or otherwise in connection with, any interest rate andlor
currency swap, transaction or arrangement entered into by the Lender to
hedge any exposure arising under this Agreement, or in terminating or
reversing, or otherwise in connection with, any open position arising
under this Agreement.
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8.4
|
Currency indemnity
In
the event of the Lender receiving or recovering any amount payable under a
Finance Document in a currency other than the Currency of Account, and if
the amount
received
or recovered is insufficient when converted into the Currency of
Account at the date of receipt to satisfy in full the amount due, the
Borrower shall, on the Lender's written demand, pay to the Lender such
further amount in the Currency of Accountt as is sufficient to satisfy in
full the amount due and that further amount shall be due to the Lender as
a separate debt under this Agreement.
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8.5
|
Increased
costs
(subject to
Clause 8.6
(
Exceptions to increased costs))
If, by reason of the introduction of any law, or any change in any
law, or any change in the interpretation or administration of any law, or
compliance with any request or
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8.5.1
|
the
Lender (or the holding company of the Lender) shall be subject to any Tax
with respect to payment of all or any part of the Indebtedness (other than
Tax on overall net income); or
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8.5.2
|
the
basis of Taxation of payments to the Lender in respect of all or any part
of the Indebtedness shall be changed; or
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8.5.3
|
any
reserve requirements shall be imposed, modified or deemed applicable
against assets held by or deposits in or for the account of or loans by
any branch of the Lender; or
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8.5.4
|
the
manner in which the Lender allocates capital resources to its obligations
under this Agreement or any ratio (whether cash, capital adequacy,
liquidity or otherwise) which the Lender is required or requested to
maintain shall be affected; or
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8.5.5
|
there
is imposed on the Lender (or on the holding company of the Lender) any
other condition in relation to the Indebtedness or the Finance
Documents;
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8.6
|
Exceptions to increased
costs
Clause 8.5
(Increased costs)
does
not apply to the extent any additional costs or reduced return referred to
in that Clause is:
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8.6.1
|
compensated
for by a payment made under Clause 8.10
(Taxes);
or
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8.6.2
|
compensated
for by a payment made under Clause 16.3
(Grossing-up);
or
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8.6.3
|
attributable
to the wilful breach by the Lender (or the holding company of the Lender)
of any law or regulation.
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8.7
|
Events of Default
The
Borrower shall indemnify the. Lender from time to time on the Lender's
written demand against all losses, costs and liabilities incurred or
sustained by the Lender as a consequence of any Event of
Default.
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8.8
|
Enforcement costs
The
Borrower shall pay to the Lender on the Lender's written demand the amount
of all costs and expenses (including legal fees) incurred by the Lender in
connection with the enforcement of, or the preservation of any rights
under, any Finance Document including (without limitation) any losses,
costs and expenses which the Lender may from time to time sustain, incur
or become liable for by reason of the Lender being mortgagee of the Vessel
and/or a lender to the Borrower, or by reason of the Lender being deemed
by any court or authority to be an operator or controller, or in any way
concerned in the operation or control, of the Vessel.
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8.9
|
Other costs
The Borrower
shall pay to the Lender on the Lenders written demand the amount of all
sums which the Lender may pay or become actually or contingently liable
for on account of the Borrower in connection with the Vessel (whether
alone or jointly or jointly and severally with any other person) including
(without limitation) all sums which the Lender may pay or guarantees which
it may give in respect of the Insurances, any expenses incurred by the
Lender in connection with the maintenance or repair of the Vessel or in
discharging any lien, bond or other claim relating in any way to the
Vessel, and any sums which the Lender may pay or guarantees which it may
give to procure the release of the Vessel from arrest or
detention.
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8.10
|
Taxes
The Borrower shall
pay all Taxes to which all or any part of the indebtedness or any Finance
Document may be at any time subject (other than Tax on the Lender's
overall net income) and shall indemnify the Lender on the Lender's written
demand against all liabilities, costs, claims and expenses resulting from
any omission to pay or delay in paying any such Taxes.
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|
9.1
|
Commitment fee
The
Borrower shall pay to the Lender a fee computed at the rate of zero point
twenty five per cent (0.25%) per annum on the undrawn amount of the. Loan
from time to time from 22nd October 2007 until the earlier to occur of the
Drawdown Date and the Availability Termination Date (both dates
inclusive). The accrued commitment fee is payable on the last day of each
successive period of three months from the date of this Agreement and on
the Availability Termination Date.
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9.2
|
Arrangement fee
The
Borrower shall pay to the Lender an arrangement fee in the amount of zero
point fifty per cent (0.50%) of the Maximum Loan Amount of which half was
due and payable on the date of acceptance of the offer letter and the
other half is due and payable within 30 days from the Drawdown
Date.
|
|
10.1
|
Security Documents
As
security for the payment of the Indebtedness, the Borrower shall execute
and deliver to the Lender or cause to be executed and delivered to the
Lender the following documents in such forms and containing such terms and
conditions as the Lender shall require:
|
|
10.1.1
|
a
first preferred mortgage over the Vessel;
|
|
10.1.2
|
a
first priority deed or deeds of assignment of the Insurances, Earnings,
any Charter and Requisition Compensation; and
|
|
10.1.3
|
a
guarantee and indemnity from the Guarantor.
|
|
10.2
|
Earnings Account
The
Borrower shall maintain the Earnings Account with the Lender for the.
duration of the Facility Period free of Encumbrances and rights of set off
other than those created by or under the Finance Documents. Interest shall
accrue on a daily basis on any balance from time to time on the Earnings
Account at a rate of interest determined by the Lender in its discretion
as the rate of interest payable to its customers on deposits in thc same
currency and of similar amount and maturity, and shall be credited to the
Earnings Account.
|
10.3 |
Earnings
The
Borrower shall procure that all Earnings and any Requisition Compensation
are credited to the Earnings Account.
|
|
10.4
|
Application of Earnings Account
The Borrower shall procure that there is transferred from the
Earnings Account to the Lender:
|
|
10.4.1
|
on
each Repayment Date, the amount of the Repayment Instalment then due;
and
|
|
10.4.2
|
on
each Interest Payment Date, the amount of interest then due, and
the Borrower irrevocably authorises the Lender to make those
transfers.
|
|
10.5
|
Borrower's obligations not
affected
If for any reason the amount standing to the credit of the
Earnings Account is insufficient to pay any Repayment Instalment or to
make any payment of interest when due, the Borrower's obligation to pay
that Repayment Instalment or to make that payment of interest shall not be
affected.
|
|
10.6
|
Release of surplus
Any
amount remaining to the credit of the Earnings Account following the
making of any transfer required by Clause 10.4
{Application of Earnings
Account)
shall (unless a Default shall have occurred and be
continuing) be released to or to the order of the Borrower.
|
|
10.7
|
Restriction on withdrawal
During the Facility Period no sum may be withdrawn from the
Earnings Account (except in accordance with this Clause 10) without the
prior written consent of the Lender.
|
|
10.8
|
Relocation of Earnings Account
At any time following the occurrence and during the continuation of
a Default, the Lender may without the consent of the Borrower relocate the
Earnings Account to any other branch of the Lender, without prejudice
to
the continued
application of this Clause 10 and the rights of the Lender under the
Finance Documents.
|
|
10.9
|
Application after acceleration
From and after the giving of notice to the Borrower by the Lender
under Clause 13.2 (
Acceleration
),
the Borrower shall procure that all sums from time to time standing to the
credit of the Earnings Account are immediately transferred to the Lender
for application in accordance with Clause 10.10
(General application of
moneys)
and the Borrower irrevocably authorises the Lender to make
those transfers.
|
10.10
|
General application of moneys
The. Borrower, subject to Clause 10.11
(Application of moneys on sale
or Total Loss),
irrevocably authorises the Lender to apply all sums
which the Lender may receive:
|
|
10.10.1
|
pursuant
to a sale or other disposition of the Vessel or any right, title or
interest in the Vessel; or
|
|
10.10.2
|
by
way of payment of any sum in respect of the Insurances, Earnings, Charter
or Requisition Compensation; or
|
|
10.10.3
|
by
way of transfer of any sum from the Earnings Account; or
|
|
10.10.4
|
otherwise
arising under or in connection with any Security Document,
|
10.11
|
Application of moneys on sale
or Total Loss
The Borrower irrevocably authorises the Lender to
apply all sums which the Lender may receive pursuant to a sale by the
Borrower of the Vessel or a Total Loss in or towards satisfaction of the
prepayment due and payable by virtue of that sale or Total Loss under
Clause 6.3
(Mandatory
prepayment on sale or Total Loss),
but the Borrower's obligation to
make that prepayment shall not be affected if those sums are insufficient
to satisfy that obligation.
|
10.12
|
Additional security
If
at any time the aggregate of the market value of the Vessel (such market
value to be conclusively determined at least once during each calendar
year by a reputable, independent and first class firm of shipbrokers
appointed by the Lender on the basis of a charter-free sale for prompt
delivery for cash at arm's length on normal commercial terms as between a
willing seller and a willing buyer) and the value of any additional
security (such value to
be
the face amount of
the deposit (in the case of cash), determined conclusively by appropriate
advisers appointed by the Lender (in the case of other charged assets),
and determined by the Lender in its discretion (in all other cases)) for
the time being provided to the. Lender under this Clause 10.12 is less
than one hundred and thirty per cent (130%) of the Loan the Borrower
shall. within thirty (30) days of the Lender's request, at the Borrower's
option:
|
|
10.12.1
|
pay
to the Lender or to its nominee a cash deposit in the amount of the
shortfall to be secured in favour of the Lender as additional security for
the payment of the Indebtedness; or
|
|
10.12.2
|
give
to the Lender other additional security in amount and form acceptable to
the Lender in its discretion; or
|
|
10.12.3
|
prepay
the amount of the Indebtedness which will ensure that the aggregate of the
market value of the Vessel (determined as stated above) and the value of
any such additional security is not less than one hundred and thirty per
cent (130%) of the Loan.
|
|
11.1
|
Representations
The
Borrower makes the representations and warranties set out in this Clause
11.1 to the Lender on the date of this Agreement except as otherwise
disclosed by the Borrower to the Lender in writing before the date of this
Agreement with specific reference to this Agreement.
|
|
11.1.1
|
Status
Each Security
Party (which is not an individual) is a corporation, duly incorporated and
validly existing under the law of its jurisdiction of incorporation and
has the power to own its assets and carry on its business as it is being
conducted.
|
|
11.1.2
|
Binding obligations
The
obligations expressed to be assumed by each Security Party in each Finance
Document to which it is a party are, subject to any general principles of
law limiting its obligations which are specifically referred to in any
legal opinion delivered pursuant to Clause 3
(Conditions of Utilisation),
legal, valid, binding and enforceable obligations.
|
|
11.1.3
|
Non-conflict with other
obligations
The entry into and performance by each Security Party
of, and the transactions contemplated by, the Finance Documents do not
conflict with:
|
|
(a)
|
any
law or regulation applicable to that Security Party;
|
|
(b)
|
the
constitutional documents of that Security Party; or
|
|
(c)
|
any
document binding on that Security Party or any of its assets, and in
borrowing the Loan, the Borrower is acting for its own
account.
|
|
11.1.4
|
Power and authority
Each
Security Party has the power to enter into, perform and deliver, and has
taken all necessary action to authorise its entry into, performance and
delivery of, the Finance Documents to which it is a party and the
transactions contemplated by those Finance Documents.
|
|
11.1.5
|
Validity and admissibility in
evidence
All consents, licences, approvals, authorisations, filings
and registrations required or desirable:
|
|
(a)
|
to
enable each Security Party lawfully to enter into, exercise its rights and
comply with its obligations in the Finance Documents to which it is a
party or to enable the Lender to enforce and exercise all its rights under
the Finance Documents; and
|
|
(b)
|
to
make the Finance Documents to which any Security Party is a party
admissible in evidence in its jurisdiction of incorporation,
|
|
11.1.6
|
Governing law and enforcement
The choice of English law as the governing law of any Finance
Document expressed to be governed by English law will be recognised and
enforced in the jurisdiction of incorporation of each relevant Security
Party, and any judgment obtained in England in relation to any such
Finance Document will be recognised and enforced in the jurisdiction of
incorporation of each relevant Security Party.
|
|
11.1.7
|
Deduction of Tax
No
Security Party is required under the law of its jurisdiction of
incorporation to make any deduction
f
or
or on account of Tax
from any payment it may make under any Finance Document.
|
|
11.1.8
|
No filing or stamp taxes
Under the law of jurisdiction of incorporation of each relevant
Security Party it is not necessary that the Finance Documents (other than
the Security Documents) be filed, recorded or enrolled with any court or
other authority in that jurisdiction or that any stamp, registration or
similar tax be paid on or in relation to the Finance Documents or the
transactions contemplated by the Finance Documents.
|
|
11.1.9
|
No default
No Event of
Default is continuing or might reasonably be expected to result from the
advance of the Loan.
|
|
11.1.10
|
No
misleading information
Any factual information provided by any Security Party to the
Lender was true and accurate in all material respects as at the date it
was provided.
|
|
11.1.11
|
Pari passu ranking
The
payment obligations of each Security Party under the Finance Documents to
which it is a party rank at least pari passu with the claims of all its
other unsecured and unsubordinated creditors, except for obligations
mandatorily preferred by law applying to companies generally.
|
|
11.1.12
|
No proceedings pending or
threatened
No litigation, arbitration or administrative proceedings
of or before any court, arbitral body or agency have been started or (to
the best of the Borrower's knowledge threatened) which, if adversely
determined, might reasonably be expected to have a materially adverse
effect on the business, assets, financial condition or credit worthiness
of any Security Party.
|
|
11.1.13
|
Disclosure of material facts
The Borrower is not aware of any material facts or circumstances
which have not been disclosed to the Lender and which might, if disclosed,
have adversely affected the decision of a person considering whether or
not to make loan facilities of the nature contemplated by this Agreement
available to the Borrower.
|
|
11.1.14
|
No established place of
business in the UK or US
No Security Party has an established place
of business in the United Kingdom or the United States of
America.
|
|
11.1.15
|
Completeness of Relevant
Documents
The copies of any Relevant Documents provided or to be
provided by the Borrower to the Lender in accordance with Clause 3
(Conditions of Utilisation)
are, or will be, true and accurate copies of the originals and
represent, or will represent, the full agreement between the parties to
those Relevant Documents in relation to the subject matter of those
Relevant Documents and there are no commissions, rebates, premiums or
other payments due or to become due in connection with the subject matter
of those Relevant Documents other than in the ordinary course of business
or as disclosed to, and approved in writing by, the Lender.
|
|
11.2
|
Repetition
Each
representation and warranty in Clause 11.1
(Representations)
is
deemed to be repeated by the Borrower by reference to the facts and
circumstances then existing on the date of the Drawdown Notice and the
first day of each Interest Period.
|
|
12.1
|
Information
Undertakings
|
|
12.1.1
|
Financial statements
The
Borrower shall supply and procure that the Guarantor supplies, to the
Lender as soon as the same become available, but in any event within 180
days after the end of each of its financial years, its audited financial
statements for that financial year, together with a Compliance
Certificate, signed by one director of the Guarantor, setting out (in
reasonable detail) computations as to compliance with Clause 12.2
(Financial covenants)
as at the date as at which those financial statements were drawn
up.
|
|
12.1.2
|
Requirements as to financial
statements
Each set of financial statements delivered by the
Borrower or the Guarantor, under Clause 12.1.1
(Financial
statements):
|
|
(a)
|
shall
be certified by a director of the Borrower or the Guarantor (as the
context may require), as fairly representing its financial condition as at
the date as at which those financial statements were drawn up;
and
|
|
(b)
|
shall
be prepared using GAAP, accounting practices and financial reference
periods consistent with those applied in the preparation of the Original
Financial Statements unless, in Marion. to any set of financial
statements, the Borrower notifies the Lender that there has been a change
in GAAP, the accounting practices or reference periods and the Borrower's
auditors deliver to the Lender:
|
|
(i)
|
a
description of any change necessary for those financial statements to
reflect the GAAP, accounting practices and reference periods upon which
the Original Financial Statements were prepared; and
|
|
(ii)
|
sufficient
information, in form and substance as may be reasonably required by the
Lender, to enable the Lender to make an accurate comparison between the
financial position indicated in those financial statements and that
indicated in the Original Financial Statements.
|
|
12.1.3
|
Information: miscellaneous
The Borrower shall supply to the Lender:
|
|
(a)
|
all
documents dispatched by the Borrower to its shareholders (or any class of
them) or its creditors generally at the same time as they are
dispatched;
|
|
(b)
|
promptly
upon becoming aware of them, details of any litigation, arbitration or
administrative proceedings which are current, threatened or pending
against any Security Party, and which might, if adversely determined, have
a materially adverse effect on the business, assets, financial condition
or credit worthiness of that Security Party; and
|
|
(c)
|
promptly.
such further information regarding the financial condition, business and
operations of any Security Party as the
|
|
12.1.4
|
Notification
of default
|
|
(a)
|
The
Borrower shall notify the Lender of any Default (and the steps, if any,
being taken to remedy it) promptly upon becoming aware of its
occurrence.
|
|
(b)
|
Promptly
upon a request by the Lender, the Borrower shall supply to the Lender a
certificate signed by two of its directors or senior officers on its
behalf certifying that no Default is continuing (or if a Default is
continuing, specifying the Default and the steps, if any, being taken to
remedy it).
|
|
12.1.5
|
"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 after the date of this Agreement;
or
|
|
(c)
|
a
proposed assignment or transfer by the Lender of any of its rights and
obligations under this Agreement,
|
|
12.2
|
Financial
covenants
|
|
12.2.1
|
maintain
a Minimum Liquidity of not less than twenty five million Dollars
($25,000,000); and
|
|
12.2.2
|
maintain
a Minimum Adjusted Net Worth of not less than two hundred and fifty
million Dollars ($250,000,000) : and
|
|
12.2.3
|
maintain
Minimum Equity of not less than one hundred million Dollars
($100,000,000).
|
|
12.3
|
General
undertakings
|
|
12.3.1
|
Authorisations
The
Borrower shall promptly:
|
|
(a)
|
obtain,
comply with and do all that is necessary to maintain in full force and
effect; and
|
|
(b)
|
supply
certified copies to the Lender of,
|
|
12.3.2
|
Compliance with laws
The
Borrower shall comply in all respects with all laws to which it may be
subject, if failure so to comply would materially impair its ability to
perform its obligations under the Finance Documents.
|
|
12.3.3
|
Conduct of business
The
Borrower shall carry on and conduct its business in a proper and efficient
manner, file all requisite tax returns and pay all tax which becomes due
and payable (except
where
contested in good
faith).
|
|
12.3.4
|
Evidence of good standing
The Borrower will from time to time if requested by the Lender
provide the Lender with evidence in form and substance satisfactory to the
Lender that the Security Parties and all corporate shareholders of any
Security Party remain in good standing.
|
|
12.3.5
|
Negative pledge and no
disposals
The Borrower shall not without the prior written consent
of the Lender create nor permit to subsist any Encumbrance or other third
party rights over any of its present or future assets or undertaking nor
dispose of any those assets or of all or part of that
undertaking.
|
|
12.3.6
|
Merger
The Borrower
shall not without the prior written consent of the Lender enter into any
amalgamation, demerger, merger or corporate reconstruction.
|
|
12.3.7
|
Change of business
The
Borrower shall not without the prior written consent of the Lender make
any substantial change to the general nature of its business from that
carried on at the date of this Agreement.
|
|
12.3.8
|
No other business
The
Borrower shall not without the prior written consent of the Lender engage
in any business other than the ownership, operation, chartering and
management of the Vessel.
|
|
12.3.9
|
No place of business in UK or
US
The Borrower shall not have an established place of business in
the United Kingdom or the United States of America at any time during the
Facility Period.
|
|
12.3.10
|
No borrowings
The
Borrower shall not without the prior written consent of the Lender borrow
any money (except for the Loan and unsecured Financial Indebtedness
subordinated to the Loan and arising in the Borrowers normal course of
operating the Vessel) nor incur any obligations under leases.
|
|
12.3.11
|
No substantial liabilities
Except in the ordinary course of business, the Borrower shall not
without the prior written consent of the Lender incur any liability to any
third party which is in the Lender's opinion of a substantial
nature.
|
|
12.3.12
|
No
loans or other financial
commitments
The Borrower shall not without the prior written
consent of the Lender make any loan nor enter into any guarantee or
indemnity or otherwise voluntarily assume any actual or contingent
liability in respect of any obligation of any other person except for
loans made in the ordinary course of business in connection with the
chartering, operation or repair of the. Vessel.
|
|
12.3.13
|
No dividends
The
Borrower shall not without the prior written consent of the Lender pay any
dividends or make any other distributions to shareholders or issue any new
shares following the occurrence of a Default.
|
|
12.3.14
|
Inspection of records
The Borrower will permit the inspection of its financial records
and accounts from time to time by the Lender or its nominee.
|
|
12.3.15
|
No change in Relevant Documents
The Borrower shall procure that, without the prior written consent
of the Lender, there shall be no termination of, alteration to, or waiver
of any term of, any of the Relevant Documents which are not Finance
Documents.
|
|
12.3.16
|
No change in ownership or
control
The Borrower shall not permit any change in its beneficial
ownership and control from that advised to the Lender at the date of this
Agreement without the prior written consent of the Lender.
|
|
12.4
|
Vessel
undertakings
|
|
12.4.1
|
No sale of Vessel
The
Borrower shall not sell or otherwise dispose of the Vessel or any shares
in the Vessel nor agree to do so without the prior written consent of the
Lender.
|
|
12.4.2
|
No chartering after Event of
Default
Following the occurrence and during the continuation of an
Event of Default the Borrower shall not without the prior written consent
of the Lender let the Vessel on charter or renew or extend any charter or
other contract of employment of the Vessel (nor agree to do
so).
|
|
12.4.3
|
No change in management
The Borrower shall procure that, without the prior written consent
of the Lender, there shall be no termination of, alteration to, or waiver
of any term of, the Management Agreement and the Borrower shall not
without the prior written consent of the Lender permit the Managers to
sub-contract or delegate the commercial or technical management of the
Vessel to any third party.
|
|
12.4.4
|
Registration of Vessel
The Borrower undertakes to maintain the registration of the Vessel
under the flag stated in Recital (A) for the duration of the Facility
Period unless the Lender agrees otherwise in writing.
|
|
12.4.5
|
Evidence of current COFR
The Borrower will, if and for so long as the Vessel trades in the
United States of America and Exclusive Economic Zone (as defined in the
United States Oil Pollution Act 1990), obtain, retain and provide the
Lender with a copy of, a valid Certificate of Financial Responsibility for
the Vessel under that Act and will comply strictly with the requirements
of that Act.
|
|
12.4.6
|
ISM Code compliance
The
Borrower will:
|
|
(a)
|
procure
that the Vessel remains for the duration of the Facility Period subject to
a SMS;
|
|
(b)
|
maintain
a valid and current SMC for the Vessel throughout the Facility Period and
provide a copy to the Lender;
|
|
(c)
|
procure
that the ISM Company maintains a valid and current DOC throughout the
Facility Period and provide a copy to the Lender; and
|
|
(d)
|
immediately
notify the Lender in writing of any actual or threatened withdrawal,
suspension, cancellation or modification of the SMC of the Vessel or of
the DOC of the ISM. Company.
|
|
12.4.7
|
ISPS Code Compliance
The
Borrower will:
|
|
(a)
|
for
the duration of the Facility Period comply with the ISPS Code in relation
to the Vessel and procure that the Vessel and the ISPS Company comply with
the ISPS Code;
|
|
(b)
|
maintain
a valid and current ISSC for the Vessel throughout the Facility Period and
provide a copy to the Lender; and
|
|
(c)
|
immediately
notify the Lender in writing of any actual or threatened withdrawal,
suspension, cancellation or modification of the ISSC.
|
|
12.4.8
|
Annex VI compliance
The
Borrower will:
|
|
(a)
|
for
the duration of the Facility Period comply with Annex VI in relation to
the Vessel and procure that the Vessel's master and crew are familiar
with, and that the Vessel complies with, Annex VI;
|
|
(b)
|
maintain
a valid and current IAPPC for the Vessel throughout the Facility Period
and provide a copy to the Lender; and
|
|
(c)
|
immediately
notify the Lender in writing of any actual or threatened withdrawal,
suspension, cancellation or modification of the IAPPC.
|
|
12.4.9
|
Chartering agreement
The
Borrower (as owner) shall, by not later than six (6) months after the
Drawdown Date, enter into a Charter whereby the Vessel is employed for a
period of at least twelve (12) months' duration, such Charter to be in
form and substance, and on terms and conditions, satisfactory to the
Lender in all respects.
|
|
13.1
|
Events of Default
Each
of the events or circumstances set out in this Clause 13.1 is an Event of
Default.
|
|
13.1.1
|
Non-payment
The Borrower
does not pay on the due date any amount payable by it under a Finance
Document at the place at and in the currency in which it is expressed to
he payable.
|
|
13.1.2
|
Other obligations
A
Security Party or any other person (except the Lender) does not comply
with any provision of any of the Relevant Documents to which that Security
Party or person is a party (other than as referred to in Clause 13.1.1
(Non-payment))
|
|
13.1.3
|
Misrepresentation
Any
representation, warranty or statement made or deemed to be repeated by a
Security Party in any Finance Document or any other document delivered by
or on behalf of a Security Party under or in connection with any Finance
Document is or proves to have been incorrect or misleading in any material
respect when made or deemed to be repeated.
|
|
13.1.4
|
Cross default
Any
Financial Indebtedness of a Security Party:
|
|
(a)
|
is
not paid when due or within any originally applicable grace period;
or
|
|
(b)
|
is
declared to be, or otherwise becomes, due and payable before its specified
maturity as a result of an event of default (however described);
or
|
|
(c)
|
is
capable of being declared by a creditor to be due and payable before its
specified maturity as a result of such an event.
|
|
13.1.5
|
Insolvency
|
|
(a)
|
A
Security Party is unable or admits inability to pay its debts as they fall
due, suspends making payments on any of its debts or, by reason of actual
or anticipated financial difficulties, commences negotiations with one or
more of its creditors with a view to rescheduling any of its Financial
Indebtedness.
|
|
(b)
|
The
value of the assets of a Security Party is less than its liabilities
(taking into account contingent and prospective liabilities).
|
|
(c)
|
A
moratorium is declared in respect of any Financial Indebtedness of a
Security Party.
|
|
13.1.6
|
Insolvency proceedings
Any corporate action, legal proceedings or other procedure or step is
taken for:
|
|
(a)
|
the
suspension of payments, a moratorium of any Financial Indebtedness,
winding-up, dissolution, administration, bankruptcy or reorganisation (by
way of voluntary arrangement, scheme of arrangement or otherwise) of a
Security Party;
|
|
(b)
|
a
composition, compromise, assignment or arrangement with any creditor of a
Security Party;
|
|
(c)
|
the
appointment of a liquidator, receiver, administrative receiver,
administrator, compulsory manager, or trustee or other similar officer
in
respect of any Security Party
or any of its assets; or
|
|
(d)
|
enforcement
of any Encumbrance over any assets of a Security Party,
|
|
or
any analogous procedure or step is taken in any jurisdiction.
|
|
13.1.7
|
Creditors' process
Any
expropriation, attachment, sequestration, distress or execution affects
any asset or assets of a Security Party.
|
|
13.1.8
|
Change in ownership or control
of the Borrower
There is any change in the beneficial ownership or
control of the Borrower from that advised to the Lender by the Borrower at
the date of this Agreement.
|
|
13.1.9
|
Repudiation
A Security
Party or any other person (except the Lender) repudiates any of the
Relevant Documents to which that Security Party or person is a party or
evidences an intention to do so.
|
|
13.1.10
|
Impossibility or
illegality
Any event occurs which would, or would with the passage
of time, render performance of any of the Relevant Documents by a Security
Party or any other party to any such document impossible, unlawful or
unenforceable by the Lender or a Security Party.
|
|
13.1.11
|
Conditions subsequent
Any of the conditions referred to in Clause 3.3
(Conditions subsequent)
is not satisfied within the time reasonably required by the
Lender.
|
|
13.1.12
|
Revocation or modification of
authorisation
Any consent, licence, approval,
authorisation, filing, registration or other requirement of any
|
|
13.1.13
|
Curtailment of business
A Security Party ceases, or threatens to cease, to carry on all or
a substantial part of its business or, as a result of intervention. by or
under the authority of any government, the business of a Security Party is
wholly or partially curtailed or suspended, or ail or a substantial part
of the assets or undertaking of a Security Party is seized, nationalised,
expropriated or compulsorily acquired.
|
|
13.1.14
|
Reduction of capital
A
Security Party
reduces its authorised or issued or subscribed capital.
|
|
13.1.15
|
Loss of Vessel
The
Vessel suffers a Total Loss or is otherwise destroyed, abandoned,
confiscated, forfeited or condemned as prize, or a similar event occurs in
relation to any other vessel which may from time to time be mortgaged to
the Lender as security for the payment of all or any part of the
Indebtedness, except that a Total Loss, or event similar to a Total Loss
in relation to any other vessel, shall not be an Event of Default
if:
|
|
(a)
|
the
Vessel or other vessel is insured in accordance with the Security
Documents; and
|
|
(b)
|
no
insurer has refused to meet or has disputed the claim for Total Loss and
it is not apparent to the Lender in its discretion that any such refusal
or dispute is likely to occur; and
|
|
(c)
|
payment
of all insurance proceeds in respect of the Total Loss is made in full to
the Lender within one hundred and eighty (180) days of the occurrence of
the casualty giving rise to the Total Loss in Question or such longer
period as the Lender may in its discretion agree.
|
|
13.1.16
|
Challenge to registration
The registration of the Vessel or the Mortgage is contested or
becomes void or voidable or liable to cancellation or termination, or the
validity or priority of the Mortgage is contested.
|
|
13.1.17
|
War
The country of
registration of the. Vessel becomes involved in war (whether or not
declared) or civil war or is occupied by any other power and the Lender in
its discretion considers that, as a result, the security conferred by the
Security Documents is materially prejudiced.
|
|
13.1.18
|
Notice of termination
The Guarantor gives notice to the Lender to terminate its
obligations under the Guarantee.
|
|
13.1.19
|
Material adverse change
Any event or series of events occurs which, in the opinion of the
Lender, is likely to have a materially adverse effect on the business,
assets, financial condition or credit worthiness of a Security
Party.
|
|
13.2
|
Acceleration
If an Event
of Default is continuing the Lender may by notice to the
Borrower:
|
|
13.2.1
|
declare
that the Loan, together with accrued interest, and all other amounts
accrued or outstanding under the Finance Documents are immediately due and
payable, whereupon they become immediately due and payable;
and/or
|
|
13.2.2
|
declare
that the Loan is payable on demand, whereupon it shall immediately become
payable on demand by the Lender.
|
|
14.1
|
Lender's rights
The
Lender may assign any of its rights under this Agreement or transfer by
novation any of its rights and obligations under this Agreement to any
other branch of the Lender or to any other bank or financial institution,
and may grant sub-participations in all or any part of the
Loan.
|
|
14.2
|
Borrower's co-operation
The Borrower will co-operate fully with the Lender in connection
with any assignment, transfer or sub-participation; will execute and
procure the execution of such documents as the Lender may require in that
connection; and irrevocably authorises the Lender to disclose to any
proposed assignee, transferee or sub-participant (whether before or after
any assignment,
|
|
14.3
|
Rights of assignee or
transferee
Any assignee or transferee of the Lender shall (unless
limited by the express terms of the assignment or novation) take the full
benefit of every provision of the Finance Documents benefitting the
Lender.
|
|
14.4
|
No assignment or transfer by
the Borrower
The Borrower may not assign any of its rights or
transfer any of its rights or obligations under the Finance
Documents.
|
|
15.1
|
Set-off
The Lender may
set off any matured obligation due from the Borrower under any Finance
Document against any matured obligation owed by the Lender
to
the Borrower,
regardless of the place of payment, booking branch or currency of either
obligation. If the obligations are in different currencies, the Lender may
convert either obligation at a market rate of exchange in its usual course
of business for the purpose of the set-off.
|
|
16.1
|
Payments
Each amount
payable by the Borrower under a Finance Document shall be paid to such
account at such bank as the Lender may from time to time direct to the
Borrower in the Currency of Account and in such funds as are customary at
the time for settlement of transactions in the relevant currency in the
place of payment. Payment shall be deemed to have been received by the
Lender on the date on which the Lender receives authenticated advice of
receipt, unless that advice is received by the Lender on a day other than
a Business Day or at a time of day (whether on a Business Day or not) when
the Lender in its discretion considers that it is impossible or
impracticable for the Lender to utilise the amount received for value that
same day, in which event the payment in question shall be deemed to have
been received by the Lender on the Business Day next following the date of
receipt of advice by the Lender.
|
|
16.2
|
No deductions or
withholdings
Each payment (whether of principal or
interest or otherwise) to be made by the Borrower under a Finance Document
shall, subject only
|
|
16.3
|
Grossing-up
If at any
time any law requires (or is interpreted to require) the Borrower to make
any deduction or withholding from any payment, or to change the rate or
manner
in
which
any required deduction or withholding is made, the Borrower will promptly
notify the Lender and, simultaneously with making that payment, will pay
to the Lender whatever additional amount (after taking into account any
additional Taxes on, or deductions or withholdings from, or restrictions
or conditions on, that additional amount) is necessary to ensure that,
after making the deduction or withholding, the Lender receives a net sum
equal to the sum which the Lender would have received had no deduction or
withholding been made.
|
|
16.4
|
Evidence of deductions
If at any time the Borrower is required by law to make any
deduction or withholding from any payment to be made by it under a Finance
Document, the Borrower will pay the amount required to be deducted or
withheld to the relevant authority within the time allowed under the
applicable law and will, no later than thirty (30) days after making that
payment, deliver to the Lender an original receipt issued by the relevant
authority, or other evidence acceptable to the Lender, evidencing the
payment to that authority of all amounts required to be deducted or
withheld.
|
|
16.5
|
Adjustment of due dates
If any payment or transfer of funds to be made under a Finance
Document, other than a payment of interest on the Loan, shall be due on a
day which is not a Business Day, that payment shall be made on the next
succeeding Business Day (unless the next succeeding Business Day falls in
the next calendar month in which event the payment shah be made on the
next preceding Business Day). Any such variation of time shall be taken
into account in computing any interest in respect of that
payment.
|
|
16.6
|
Control Account
The
Lender shall open and maintain on its books a control account in the name
of the Borrower showing the advance of the Loan and the computation and
payment of interest and all other sums due under this
Agreement. The Borrower's obligations to repay the Loan and to
pay interest and all other sums due under this Agreement shall be
evidenced by the entries from time to time made
|
|
17.1
|
Communications in writing
Any communication to be made under or in connection with this
Agreement shall be made in writing and, unless otherwise stated, may be
made by fax or letter.
|
|
17.2
|
Addresses
The address
and fax number (and the department or officer, if any, for whose attention
the communication is to be made) of each party to this Agreement for any
communication or document to
be
made or delivered under or in
connection with this Agreement are:
|
|
17.2.1
|
in
the case of the Borrower, c/o Top Tanker Management Inc., 1 Vassilissis
Sofias Str. & Meg. Alexandrou Str. 151 24 Marousi, Greece (fax no: +30
210 614 1204) marked for the attention of Mr Stamatios Tsantanis;
and
|
|
17.2.2
|
in
the case of the Lender, to the Lender at its address at the head of this
Agreement (fax no: 210 429 0348 telex no: 212435) marked for the attention
of Shipping Division branch 960);
|
|
17.3
|
Delivery
Any
communication or document made or delivered by one party to this Agreement
to the other under or in connection this Agreement will only be
effective:
|
|
17.3.1
|
if
by way of fax, when received in legible form; or
|
|
17.3.2
|
if
by way of letter, when it has been left at the relevant address or five
(5) Business Days after being deposited in the post postage prepaid in an
envelope addressed to it at that address;
|
|
17.4
|
English language
Any
notice given under or in connection with this Agreement must be in
English. All other documents provided under or in connection with this
Agreement must be:
|
|
17.4.1
|
in
English; or
|
|
17.4.2
|
if
not in English, and if so required by the Lender, accompanied by a
certified English translation and, in this case, the English translation
will prevail unless the document is a constitutional, statutory or other
official document.
|
|
20.1
|
No
oral variations No variation or amendment of a Finance Document shall be
valid unless in writing and signed on behalf of the Lender.
|
|
20.2
|
Further Assurance
If any
provision of a Finance Document shall be invalid or unenforceable in whole
or in part by reason of any present or future law or any decision of any
court, or if the documents at any time held by or on behalf of the Lender
are considered by the Lender for any reason insufficient to carry out the
terms
|
|
20.3
|
Rescission of payments etc.
Any discharge, release or reassignment by the Lender of any of the
security constituted by, or any of the obligations of a Security Party
contained in, a Finance Document shall be (and be deemed always to have
been) void if any act (including, without limitation, any payment) as a
result of which such discharge, release or reassignment was given or made
is subsequently wholly or partially rescinded or avoided by operation of
any law.
|
|
20.4
|
Certificates
Any
certificate or statement signed by an authorised signatory of the Lender
purporting to show the amount of the Indebtedness (or any part of the
Indebtedness) or any other amount referred to in any Finance Document
shall, save for manifest error or on any question of law, be conclusive
evidence as against the Borrower of that amount.
|
|
20.5
|
Counterparts
This
Agreement may be executed in any number of counterparts each of which
shall be original but which shall together constitute the same
instrument.
|
|
20.6
|
Contracts (Rights of Third
Parties) Act 1999
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.
|
|
21.1
|
Governing
law
This Agreement shall in all respects
be governed by and interpreted in accordance with English
law.
|
|
21.2
|
Jurisdiction
For the
exclusive benefit of the Lender, the parties to this Agreement irrevocably
agree that the courts of England are to have jurisdiction to settle any
disputes which may arise out of or in connection with this Agreement and
that any proceedings may be brought in those courts.
|
|
21.3
|
Alternative jurisdictions
Nothing contained in this Clause 21 shall limit the right of the
Lender to commence any proceedings against the Borrower in any other court
of competent jurisdiction nor shall the commencement of any proceedings
against the
|
|
21.4
|
Waiver of objections
The
Borrower irrevocably waives any objection which it may now or in the
future have to the laying of the venue of any proceedings in any court
referred to in this Clause 21, and any claim that those proceedings have
been brought in an inconvenient or inappropriate forum, and irrevocably
agrees that a judgment in any proceedings commenced in any such court
shall be conclusive and binding on it and may be enforced in the courts of
any other jurisdiction.
|
|
21.5
|
Service of process
Without prejudice to any other mode of service allowed under any
relevant law, the Borrower:
|
|
21.5.1
|
irrevocably
appoints Top Tankers (UK) Limited of 8 Duke Street , W1U 3EW London, UK as
its agent for service of process in relation to any proceedings before the
English courts in connection with this Agreement; and
|
|
21.5.2
|
agrees
that failure by a process agent to notify the Borrower of the process will
not invalidate the proceedings concerned.
|
|
(a)
|
Constitutional Documents
Copies of the constitutional documents of each Security Party
together with such other evidence as the Lender may reasonably require
that each Security Party is duly incorporated in its country of
incorporation and remains in existence with power to enter into, and
perform its obligations under, the Relevant Documents to which it is or is
to become a party.
|
|
(b)
|
Certificates of good standing
A certificate of good standing in respect of each Security Party
(if such a certificate can be obtained).
|
|
(c)
|
Board resolutions
A copy
of a resolution of the board of directors of each Security
Party:
|
|
(i)
|
approving
the terms of, and the transactions contemplated by, the Relevant Documents
to which it is a party and resolving that it execute those Relevant
Documents: and
|
|
(ii)
|
authorising
a specified person or persons to execute those Relevant Documents (and all
documents and notices to be signed and/or despatched under those
documents) on its behalf.
|
|
(d)
|
Shareholder resolutions
A copy of a resolution signed by all the holders of the issued
shares in each Security Party, approving the terms of, and the
transactions contemplated by, the Relevant Documents to which that
Security Party is a party.
|
|
(e)
|
Officer's certificates
A
certificate of a duly authorised officer of each Security Party certifying
that each copy document relating to it specified in this Part I of
Schedule I is correct, complete and in full force and effect as at a date
no earlier than the date of this Agreement and setting out tiro names of
the directors, officers and shareholders of that Security Party and the
proportion of shares held by
each
shareholder.
|
|
(f)
|
Evidence of registration
Where such registration is required or permitted under the laws of
the relevant jurisdiction, evidence that the names of the directors,
officers and shareholders of each Security Party are duly registered in
the companies registry or other registry in the country of incorporation
of that Security Party.
|
|
(g)
|
Powers of attorney
The
notarially attested and legalised power of attorney of each Security Party
under which any documents are to be executed or transactions undertaken by
that Security Party.
|
|
(a)
|
Vessel documents
Photocopies, certified as true, accurate and complete. by a
director or the secretary or the legal advisers of the Borrower,
of:
|
|
(i)
|
the
MOA;
|
|
(ii)
|
such
documents as the Lender may reasonably require to evidence the nomination
of the Borrower as purchaser of the Vessel pursuant to the
MOA;
|
|
(iii)
|
the
bill of sale transferring title in the Vessel to the Borrower free of all
encumbrances, maritime liens or other debts;
|
|
(iv)
|
the
protocol of delivery and acceptance evidencing the unconditional physical
delivery
of
the
Vessel by the Seller to the Borrower pursuant to the MOA;
|
|
(v)
|
any
charterparty or other contract of employment of the Vessel which will be
in force on the Drawdown Date including, without limitation, the
Charter;
|
|
(vi)
|
the
Management Agreement;
|
|
(vii)
|
the
Vessel's current Safety Construction, Safety Equipment, Safety Radio and
Load Line Certificates;
|
|
(viii)
|
the
Vessel's current Certificate of Financial Responsibility issued pursuant
to the United States Oil Pollution Act 1990;
|
|
(ix)
|
the
Vessel's current SMC;
|
|
(x)
|
the
ISM Company's current DOC;
|
|
(xi)
|
the
Vessel's current ISSC;
|
|
(xii)
|
the
Vessel's current IAPPC;
|
|
(xiii)
|
the
Vessel's current Tonnage Certificate;
|
|
(xiv)
|
the
Borrower's current Carrier Initiative Agreement with the United States'
Customs Service;
|
|
(b)
|
Evidence of Seller's title
Certificate of ownership and encumbrance (or equivalent) issued by
the Registrar of Ships (or equivalent official) of the Vessel's current
flag confirming that the Vessel is owned by the Seller and free of
registered Encumbrances and an undertaking by the Seller to delete the
Vessel from its current flag.
|
|
(c)
|
Evidence of Borrower's title
Evidence that on the Drawdown Date (i) the Vessel will be at least
provisionally registered under the flag stated in Recital (A) in the
ownership of the Borrower and (ii) the Mortgage will be capable of being
registered against the Vessel with first priority.
|
|
(d)
|
Evidence of insurance
Evidence that the Vessel is insured in the manner required by the
Security .Documents and that letters of undertaking wilt be issued in the
manner required by the Security Documents, together with (if required by
the Lender) the written approval of the Insurances by an insurance adviser
appointed by the Lender and at the expense of the Borrower.
|
|
(e)
|
Confirmation of class
A
Certificate of Confirmation of Class for hull and machinery confirming
that the Vessel is classed with the highest class applicable to vessels of
her type with Lloyds Register or such other classification society as may
be acceptable to the Lender free of recommendations affecting
class.
|
|
(f)
|
Instruction to classification
society
A letter of instruction from the Borrower to the Vessel's
classification society.
|
|
(g)
|
Survey report
A report
by a surveyor instructed by the Lender to inspect the Vessel confirming
that the condition of the Vessel is in all respects acceptable to the
Lender and at the expense of the Borrower.
|
|
(h)
|
Valuation
A valuation of
the Vessel addressed to the Lender from an independent broker acceptable
to the Lender certifying a value for the Vessel, assessed in such manner
as the Lender may require in its discretion, acceptable to the Lender and
at the expense of the Borrower,
|
|
(i)
|
Security Documents
The
Security Documents, together with all other documents required by any of
them, including, without limitation, all notices of assignment and/or
charge and evidence that those notices will be duly acknowledged by the
recipients.
|
|
(i)
|
Mandates
Such duly
signed forms of mandate, and/or other evidence of the opening of the
Earnings Account, as the Lender may require.
|
|
(k)
|
Managers' confirmation
The written confirmation of the Managers that, throughout the
Facility Period unless otherwise agreed by the Lender, they will remain
the commercial and technical managers of the Vessel and that they will
not, without the prior written consent of the Lender, sub-contract or
delegate the commercial or technical management of the Vessel to any third
party and confirming in terms acceptable to the Lender that, following the
occurrence of an Event of Default, all claims of the Managers against the
Borrower shall be subordinated to the claims of the Lender under the
Finance Documents.
|
|
(1)
|
No disputes
The written
confirmation of the Borrower that there is no dispute under any of the
Relevant Documents as between the parties to any such
document.
|
|
(m)
|
Other Relevant Documents
Copies of each of the Relevant Documents not otherwise comprised in
the documents listed in this Part I of Schedule I.
|
|
(a)
|
If
a Security Party is incorporated in a jurisdiction other than England and
Wales or if any Finance Document is governed by the laws of a jurisdiction
other than England and Wales, a legal opinion of the legal advisers to the
Lender in each relevant jurisdiction, substantially in the form or forms
provided to the Lender prior to signing this Agreement or confirmation
satisfactory to the Lender that such an opinion will be
given.
|
|
(a)
|
Drawdown Notice
A duly
completed Drawdown Notice.
|
|
(b)
|
Process agent
Evidence
that any process agent referred to in Clause 21.5
(Service of process)
and any process agent appointed under any other Finance Document
has accepted its appointment.
|
|
(c)
|
Other
authorisations
A copy of any other
consent, licence, approval, authorisation or other document, opinion or
assurance which the Lender considers to be necessary or desirable (if it
has notified the Borrower accordingly) in connection with the entry into
and performance of the transactions contemplated by any of the Relevant
Documents or for the validity and enforceability of any of the Relevant
Documents.
|
|
(d)
|
Financial statements
Copies of the Original Financial Statements.
|
|
(e)
|
Fees
Evidence that the
fees, costs and expenses then due from the Borrower under Clause 8
(Indemnities)
and
Clause 9
(Fees)
have been paid or will be paid by the Drawdown Date.
|
|
(f)
|
"Know your customer" documents
Such documentation and other evidence as is reasonably requested by
the. Lender in order for the Lender to comply with all necessary "know
your customer" or similar identification procedures in relation to the
transactions contemplated in the Finance
Documents.
|
1
|
Evidence of Borrower's title
Certificate of ownership and encumbrance (or equivalent) issued by
the Registrar of Ships (or equivalent official) of the flag stated in
Recital (A) confirming that (a) the Vessel is permanently registered under
that flag in the ownership of the Borrower, (b) the Mortgage has been
registered with first priority against the Vessel and (c) there are no
further Encumbrances registered against the Vessel.
|
2
|
Deletion by Seller
Evidence that the Vessel has been deleted from its current
flag.
|
3
|
Letters of undertaking
Letters of undertaking in respect of the Insurances as required by
the Security Documents together with copies of the relevant policies or
cover notes or entry certificates duly endorsed with the interest of the
Lender.
|
4
|
Acknowledgements of notices
Acknowledgements of all notices of assignment and/or charge given
pursuant to the Security Documents.
|
5
|
Legal opinions
Such of
the legal opinions specified in Part I of this Schedule 1 as have not
already been provided to the Lender.
|
6
|
Companies Act registrations
Evidence that the prescribed particulars of the Security Documents
have been delivered to the Registrar of Companies within the statutory
time limit.
|
7
|
Master's receipt
The
master's receipt for the Mortgage.
|
8
|
Chartering agreement
A
copy of the Charter in accordance with the requirements of Clause
12.4.9.
|
Signed:
|
|||
Director
|
Director
|
||
of
|
of
|
||
JAPAN
III SHIPPING COMPANY LIMITED
|
JAPAN
III SHIPPING COMPANY LIMITED
|
||
*
|
If
this statement cannot be made, the certificate should identify any Default
that is continuing and the steps, if any, being taken to remedy
it.
|
SIGNED
by Theodora
Hitropetrou
|
)
|
|
duly
authorised for and on behalf
|
)
|
/s/
Theodora Hitropetrou
|
of
JAPAN III SHIPPING
COMPANY
|
)
|
|
LIMITED
|
)
|
|
SIGNED
Constantine
Flokos, Grigorios Kondilis
|
)
|
|
duly
authorised for and on behalf
|
)
|
/s/
Constantine Flokos
|
of
ALPHA BANK
A.E.
|
)
|
/s/
Grigorios Kondilis
|
1
|
Interpretation
|
3
|
2
|
Conditions
|
3
|
3
|
Representations
and Warranties
|
8
|
4
|
Amendments
to Loan Agreement
|
8
|
5
|
Confirmation
and Undertaking
|
12
|
6
|
Communications,
Law and Jurisdiction
|
13
|
(1)
|
JAPAN III SHIPPING COMPANY
LIMITED,
a company incorporated under the laws of the Republic of
Liberia whose registered office is at 80, Broad Street, Monrovia, Liberia
(the
"Borrower");
and
|
(2)
|
LICHTENSTEIN SHIPPING COMPANY
LIMITED,
a company incorporated under the laws of the Republic of
Liberia whose registered office is at 80, Broad Street Monrovia, Liberia
(the
"Collateral
Guarantor");
and
|
(3)
|
ALPHA BANK A.E.,
acting
through its office at 89 Akti Miaouli, GR 185 38 Piraeus, Greece (the
"Lender").
|
(A)
|
The
Collateral Guarantor and the Lender have entered into a secured loan
agreement dated 18 August 2008 as amended and supplemented by a first
supplemental agreement dated 23 February 2009 and a supplemental agreement
dated April 2009 (together the
"Lichtenstein Loan Agreement")
each made between, among others, the Collateral Guarantor, as
borrower and the Lender, as lender on the terms and subject to the
conditions of which the Lender has agreed to advance to the Collateral
Guarantor an
aggregate
amount not exceeding thirty nine million Dollars ($39,000,000) (the
"Lichtenstein
Loan").
As security for the obligations of the
Collateral Guarantor under the Lichtenstein Loan Agreement, the Collateral
Guarantor executed, delivered and registered (where applicable), in favour
of the Lender, as first mortgagee and assignee, a first preferred
Panamanian mortgage over the Collateral Vessel together with a first
priority assignment of the Collateral Vessel's Insurances, Earnings and
Requisition Compensation and a first priority deed of assignment and
subordination in respect of the bareboat charter of the Collateral
Vessel.
|
|
(B)
|
As
security for the obligations of the Borrower under the Loan Agreement the
Lender has requested and the Collateral Guarantor agreed to execute,
deliver and register (where applicable), in favour of the Lender a
guarantee and indemnity, a second preferred Panamanian mortgage over the
Collateral Vessel, a second priority deed of assignment of the Insurances,
Earnings and Requisition Compensation in respect of the Collateral Vessel
and a second priority deed of assignment and subordination in respect of
the bareboat charter of the Collateral Vessel.
|
(C)
|
The
aggregate of the Market Value of the Vessel pursuant to clause 10.12 of
the Loan Agreement is less than one hundred and thirty per cent (130%) of
the Loan.
|
(D)
|
Pursuant
to the provisions of clauses 10.12.1 to 10.12.3 of the Loan Agreement, the
Borrower has an obligation to take certain action following the occurrence
of the event set out in Recital (C) above.
|
(E)
|
The
Borrower has requested that the Lender agrees to waive the provisions of
clauses 10.12.1 to 10.12.3 and 12.2.2 of the Loan Agreement with effect
from the Effective Date until and including 31 March 2010.
|
(F)
|
Pursuant
to the provisions of clause 12.2.1 of the Loan Agreement, the Borrower
would procure that the Guarantor shall at all times during the Facility
Period on a consolidated basis commencing from the date of the Loan
Agreement maintain a Minimum Liquidity of not less than twenty five
million Dollars ($25,000,000).
|
(G)
|
The
Borrower has requested that the Lender agrees to reduce the amount of the
Minimum Liquidity referred to in clause 12.2.1 of the Loan Agreement to an
amount not less than fifteen million Dollars (S15,000,000) with effect
from the Effective Date up to and including 31 March 2010, whereupon and
for the remaining of the Facility Period the amount of the Minimum
Liquidity will be increased again to an amount of not less than twenty
five million Dollars ($25,000,000).
|
(H)
|
The
Lender is willing to agree to all the foregoing requests and amend the
Loan Agreement and the Security Documents subject to the terms and
conditions set forth in this Supplemental Agreement.
|
(I)
|
At
the date of this Supplemental Agreement the outstanding amount of the Loan
is thirty four million seven hundred and fifty thousand Dollars
(S34,750,000).
|
|
1.1
|
In
this Supplemental Agreement:
|
|
1.2
|
Unless
otherwise defined, all words and expressions defined in the Loan Agreement
shall have the same meaning when used in this Supplemental Agreement
unless the context otherwise requires, and clause
I
.2
of the Loan
Agreement shall apply to the interpretation of this Supplemental Agreement
as if it was set out in full.
|
|
2.1
|
As
conditions for the agreement of the Lender to the requests specified in
Recitals (E) and (G) above, the Borrower shall deliver or cause to be
delivered to or to the order of the Lender the following documents and
evidence:
|
|
2.1.1
|
a
certificate from a duly authorised officer of each of the Borrower and the
Guarantor confirming that none of the documents delivered to the Lender
pursuant to clause 3.1 of the Loan Agreement have been amended or modified
in any way since the date of their delivery to the Lender, or copies,
certified by a duly authorised officer of each of the Borrower and the
Guarantor as true, complete, accurate and neither amended nor revoked, of
any documents which have been amended or
modified;
|
|
2.1.2
|
copies
of the constitutional documents of the Collateral Guarantor together with
such other evidence as the Lender may reasonably require that the
Collateral Guarantor is duly incorporated in its country of incorporation
and remains in existence with power to enter into, and perform its
obligations under, the New Security Documents to which it is or is to
become a party;
|
|
2.1.3
|
the
original resolution of the directors and the shareholders of each of the
Security Parties and the Guarantor (together, where appropriate, with
signed waivers of notice of any directors' or shareholders' meetings)
approving, and authorising or ratifying the execution of, the New Security
Documents and any document to be executed by each of the Security Parties
and the Guarantor pursuant to the New Security
Documents;
|
|
2.1.4
|
a
notarially attested and legalised power of attorney of each of the
Security Parties and the Guarantor under which the New Security Documents
and any documents required pursuant to them are to be executed by each of
the Security Parties and the
Guarantor;
|
|
2.1.5
|
a
certificate of good standing in respect of each of the Security Parties
and the Guarantor;
|
|
2.1.6
|
the
New Security Documents, together with all other documents required by any
of them, including, without limitation, all other notices of assignment
and/or charge duly executed, and registered (where applicable) and
evidence that those notices will be duly acknowledged by the recipients
and in the case of the Collateral Mortgage registered with second priority
at the Ship's Registry (or equivalent office) of the Collateral Vessel's
current flag;
|
|
2.1.7
|
a
certificate of ownership and encumbrance (or equivalent) issued by the
Registrar of Ships (or equivalent official) of the Collateral Vessel's
current flag confirming that the Collateral Vessel is permanently
registered under the flag of the Republic of Panama in the ownership of
the Collateral Guarantor and that the Collateral Mortgage in respect of
the Collateral Vessel has been registered with second priority and that
there are no further encumbrances registered apart from a first preferred
Panamanian mortgage over the Collateral Vessel dated 23 February 2009
executed by the Collateral Guarantor in favour of the
Lender;
|
|
2.1.8
|
evidence
that the Collateral Vessel is insured in the manner required by the New
Security Documents and that letters of undertaking will be issued in the
manner required by the New Security Documents together with copies of the
relevant policies or cover notes or entry certificates duly endorsed with
the interest of the Lender as second mortgagee and assignee, together with
(if required by the Lender) the written approval of the Insurances by an
insurance adviser appointed by the
Lender;
|
|
2.1.9
|
if
required by the Lender, the written confirmation of the Managers that,
throughout the Facility Period unless otherwise agreed by the Lender, they
will remain the commercial and technical managers of the Collateral Vessel
and that they will not, without the prior written consent of the Lender
sub-contract or delegate the commercial or technical management of the
Collateral Vessel to any third party and confirming in terms acceptable to
the Lender that, following the occurrence of an Event of Default, all
claims against the Borrower shall be subordinated to the claims of the
Lender under the Finance Documents;
|
|
2.1.10
|
confirmation
satisfactory to the Lender that all legal opinions required by the Lender
will be given substantially in the form required by the
Lender;
|
|
2.1.11
|
evidence
that any process agent referred to in clause 21.5 of the Loan Agreement
and any process agent appointed under any New Security Document has
accepted its appointment;
|
|
2.1.12
|
such
duly signed forms of mandate, and/or other evidence of the opening of the
Cash Deposit Account, as the Lender may require in respect of the
Borrower;
|
|
2.1.13
|
evidence
satisfactory to the Lender that the Cash Deposit has been credited to the
Cash Deposit Account; and
|
|
2.1.14
|
a
copy of any other consent, licence, approval, authorisation or other
document, opinion or assurance which the Lender considers to be necessary
or desirable (if it has notified the Borrower and/or the Collateral
Guarantor accordingly) in connection with the entry into and performance
of the transactions contemplated by this Supplemental Agreement and the
other New Security Documents or for the validity and enforceability of
this Supplemental Agreement and the other New Security
Documents.
|
|
2.2
|
If
the Lender agrees, in its sole discretion, to waive any conditions under
Clause 2.1 prior to the Effective Date, the Borrower undertakes to deliver
all outstanding documents and evidence to or to the order of the Lender no
later than the date specified by the Lender, which however, shall not be
taken as a waiver of the Lender's right to require production of all the
documents and evidence required by Clause
2.1.
|
|
2.3
|
All
documents and evidence delivered to the Lender pursuant to this Clause
shall:
|
|
2.3.1
|
be
in form and substance acceptable to the
Lender;
|
|
2.3.2
|
be
accompanied, if required by the Lender, by translations into the English
language, certified in a manner acceptable to the Lender;
and
|
|
2.3.3
|
if
required by the Lender, be certified, notarised, legalised or attested in
a manner acceptable to the Lender.
|
|
4.1
|
the
definitions contained in Clause
1.1
(other than the definition
of "
Effective
Date")
of this
Supplemental Agreement shall be added to clause
1.1
of the Loan
Agreement;
|
|
4.2
|
the
definition of
"Collateral
Guarantor"
contained in Recital 2 was added in clause
1.1
of the Loan
Agreement;
|
|
4.3
|
the
definition of the term "
Margin
", as is set out
in clause 1.1 of the Loan Agreement shall be substituted as
follows:-
|
|
"Margin"
means two point
five per cent (2.5%) per annum.";
|
|
4.4
|
where
the context so admits, all references to the term "
Earnings
Account"
(however
defined) in the Loan Agreement and the Security Documents, shall be read
and construed as including the Cash Deposit
Account;
|
|
4.5
|
where
the context so admits, all references to the term "
Mortgage
" (however defined) in the Loan
Agreement and the Security Documents, shall be read and construed as
including the plural of such term or as referring to each
"Mortgage",
as if they
were references to the Mortgage in respect of the Vessel and to the
Collateral Mortgage in respect of the Collateral
Vessel;
|
|
4.6
|
the
definition of "
Security
Documents"
set forth in
clause 1.1 of the Loan Agreement was construed to include the New Security
Documents;
|
|
4.7
|
the
definition of "
Security
Parties"
set forth in
clause 1.1 of the Loan Agreement was construed to include the Collateral
Guarantor;
|
|
4.8
|
where
the context so admits, all references to the term
"Vessel"
(however
defined) in the Loan Agreement, including but not limited to references in
clauses 1.1, 10, 12 and 13 of the Loan Agreement, and the Security
Documents, shall be read and construed as including the plural of such
term or as referring to each
"Vessel"
respectively,
as if they were references to the Vessel in relation to the Borrower and
to the Collateral Vessel in relation to the Collateral
Guarantor;
|
|
4.9
|
clause
6.2.3 of the Loan Agreement was deleted and replaced with the following
clause 6.2.3:
|
|
"6.2.3.
any prepayment under this Clause 6.2 shall satisfy the obligations under
Clause 5.1
(Repayment of
Loan)
as follows:
|
|
(a)
|
if
prepayment is made by 31 March 2010, fifty per cent (50%) of such
prepayment shall be applied in reducing pro rata any unpaid part of the
first thirteen (1st-13th) Repayment Instalments and the other fifty per
cent (50%) of such prepayment shall be applied in reducing pro rata the
following nineteen (14th-32nd) Repayment
Instalments;
|
|
(b)
|
if
prepayment is made following the repayment of the fourteenth (14th)
Repayment Instalment, such prepayment shall be applied in reducing pro
rata the outstanding Repayment Instalments including the Balloon
Payment";
|
|
4.10
|
clause
6.3 of the Loan Agreement was deleted and replaced with the following
clause 6.3:
|
6.3.1 |
pay
to the Lender or to its nominee a cash deposit to be secured in favour of
the Lender as additional security for the payment of the Indebtedness;
or
|
|
|
6.3.2
|
give
to the Lender other additional security in amount and form acceptable to
the Lender in its discretion; or
|
|
6.3.3
|
prepay
an amount of the Indebtedness,
|
|
4.11
|
the
following clause was added as clause 10.13 of the Loan
Agreement:
|
|
4.12
|
the
following clause was added as clause 10.14 of the Loan
Agreement;
|
(a) |
an
amount of two million Dollars ($2,000,000) will be released to the
Borrower or to its order on 31 December 2009; and
|
|
|
(b)
|
an
amount of two million Dollars ($2,000,000) will be released to the
Borrower or to its order on 31 March
2010,
|
|
4.13
|
the
Lender agrees to waive the breach of the covenant contained in clause
10.12 of the Loan Agreement only until 31 March
2010;
|
|
4.14
|
clause
12.2 of the Loan Agreement was deleted and replaced with the following
clause 12.2:-
|
|
"12.2
Financial
covenants
|
|
12.2.1
|
maintain
a Minimum Liquidity of not less than twenty five million Dollars
($25,000,000), but of not less than fifteen million Dollars ($15,000,000)
from the Effective Date until 31 March 2010 whereupon and for the
remaining of the Facility Period the amount of the Minimum Liquidity will
be increased again to an amount of not less than twenty five million
Dollars (525,000,000); and
|
|
12,2,2
|
maintain
a Minimum Adjusted Net Worth of not less than two hundred and fifty
million Dollars ($250,000,000) with the exception of the period between
the Effective Date and 31 March 2010; and
|
|
12.2.3
|
maintain
Minimum Equity of not less than one hundred million Dollars
($100,000,000).";
|
|
4.15
|
clause
13.1.18 of the Loan Agreement was deleted and replaced with the following
clause 13.1.18:-
|
|
"13.1.18
|
Notice of termination
The Guarantor or the Collateral Guarantor gives notice to the
Lender to determine its obligations under the Guarantee or the Collateral
Guarantee."; and
|
|
4.16
|
clause
10.1 of the Loan Agreement shall be read and construed as including the
New Security Documents.
|
|
5.1
|
The
Borrower confirms that all of its respective obligations under or pursuant
to each of the Security Documents to which it is a party remain in full
force and effect, despite the amendments to the Loan Agreement made in
this Supplemental Agreement, as if all references in any of the Security
Documents to the Loan Agreement (however described) were references to the
Loan Agreement as amended and supplemented by this Supplemental
Agreement.
|
|
5.2
|
The
definition of any term defined in any of the Security Documents shall, to
the extent necessary, be modified to reflect the amendments to the Loan
Agreement made in this Supplemental
Agreement.
|
SIGNED and DELIVERED as a DEED
by
|
)
|
|
JAPAN
III SHIPPING COMPANY LIMITED
|
)
|
|
acting
by Andreas Louka
|
)
|
/s/ Andreas Louka |
its
duly authorized attorney-in-fact
|
)
|
|
in
the presence of:
|
)
|
SIGNED and DELIVERED as a DEED
by
|
)
|
|
LICHTENSTEIN
SHIPPING COMPANY LIMITED
|
)
|
|
acting
by Andreas Louka
|
)
|
/s/ Andreas Louka |
its
duly authorized attorney-in-fact
|
)
|
|
in
the presence of:
|
)
|
SIGNED and DELIVERED as a DEED
by
|
)
|
|
ALPHA
BANK A.E.
|
)
|
|
acting
by Constantinos Flokos
|
)
|
/s/ Constantinos Flokos |
and
by Gregorios Kondilis
|
)
|
/s/ Gregorios Kondilis |
its
duly authorized attorneys-in-fact
|
)
|
|
in
the presence of:
|
)
|
Dated: 5
th
March,
2008
|
LOAN
AGREEMENT NO. 185/2008
for
a secured floating interest rate
loan
facility
of
up to US$50,000,000
|
CLAUSE
|
HEADINGS
|
PAGE
|
1.
|
PURPOSE,
DEFINITIONS AND INTERPRETATION
|
1
|
2.
|
THE
LOAN
|
11
|
3.
|
INTEREST
|
14
|
4.
|
REPAYMENT
- PREPAYMENT
|
17
|
5.
|
PAYMENTS,
TAXES, LOAN ACCOUNT AND COMPUTATION
|
21
|
6.
|
REPRESENTATIONS
AND WARRANTIES
|
22
|
7.
|
CONDITIONS
PRECEDENT
|
28
|
8.
|
COVENANTS
|
31
|
9.
|
EVENTS
OF DEFAULT
|
40
|
10.
|
INDEMNITIES
- EXPENSES - FEES
|
45
|
11.
|
SECURITY,
APPLICATION, AND SET-OFF
|
49
|
12.
|
UNLAWFULNESS,
INCREASED COSTS
|
53
|
13.
|
ASSIGNMENT,
PARTICIPATION, LENDING BRANCH
|
54
|
14.
|
MISCELLANEOUS
|
55
|
15.
|
NOTICES
AND OTHER MATTERS
|
57
|
16.
|
APPLICABLE
LAW AND JURISDICTION
|
59
|
1.
|
FORM
OF DRAWDOWN NOTICE
|
54
|
2.
|
INSURANCES
|
56
|
3.
|
FORM
OF COMPLIANCE CERTIFICATE
|
(1)
|
EMPORIKI BANK OF GREECE S.A.,
a Greek banking societe anonyme duly incorporated under the laws of
Greece, having its registered office at 11, Sofokleous Street, Athens,
Greece, acting for the purposes of this Agreement through its office at
114 Kolokotroni Street, Piraeus, Greece and includes its successors in
title, as lender (the
"Bank");
and
|
(2)
|
JAPAN I SHIPPING COMPANY
LIMITED,
a company incorporated in the Republic of Liberia and
having its registered office at 80, Broad Street, Monrovia, Liberia and
includes its successors in title, as borrower (hereinafter called the
"Borrower");
|
1.
|
PURPOSE, DEFINITIONS
AND INTERPRETATION
|
1.1
|
Amount and
Purpose
|
1.2
|
Definitions
|
|
(a)
|
all
losses, liabilities, costs, charges, expenses, damages and outgoings of
whatever nature, (including, without limitation, Taxes, repair costs,
registration fees and insurance premiums, crew wages, repatriation
expenses and seamen's pension fund dues) suffered, incurred, charged to or
paid or committed to be paid by the Bank in connection with the exercise
of the powers referred to in or granted by any of the Security Documents
or otherwise payable by the Borrower in accordance with the terms of any
of the Security Documents;
|
|
(b)
|
the
expenses referred to in Clause 10.2 (a) and (b);
and
|
|
(c)
|
interest
on all such losses, liabilities, costs, charges, expenses, damages and
outgoings from, in the case of Expenses referred to in sub-paragraph (b)
above, the date on which such Expenses were demanded by the Bank from the
Borrower and in all other cases, the date on which the same were suffered,
incurred or paid by the Bank until the date of receipt or recovery thereof
(whether before or after judgement) at the Default Rate (as conclusively
certified by the Bank);
|
|
(a)
|
"The
International Management Code for the Safe Operation of Ships and for
Pollution Prevention", currently known or referred to as the "ISM Code",
adopted by the Assembly of the International Maritime Organisation by
Resolution A. 741(18) on 4
th
November, 1993 and incorporated on 19
th
May, 1994 into chapter IX of the International Convention for the Safety
of Life at Sea 1974 (SOLAS 1974);
and
|
|
(b)
|
all
further resolutions, circulars, codes, guidelines, regulations and
recommendations which are now or in the future issued by or on behalf of
the International Maritime Organisation or any other entity with
responsibility for implementing the ISM Code, including without
limitation, the "Guidelines on implementation or administering of the
International Safety Management (ISM) Code by Administrations" produced by
the International Maritime Organisation pursuant to Resolution A. 788(19)
adopted on 25
th
November, 1995;
|
|
(a)
|
the
DOC and SMC issued by a classification society in all respects acceptable
to the Bank in its absolute discretion pursuant to the ISM Code in
relation to the Vessel within the period specified by the ISM
Code;
|
|
(b)
|
all
other documents and data which are relevant to the ISM SMS and its
implementation and verification which the Bank may require by request;
and
|
|
(c)
|
any
other documents which are prepared or which are otherwise relevant to
establish and maintain the Vessel's or the Borrower's compliance with the
ISM Code which the Bank may require by
request;
|
|
(a)
|
clause
headings and the table of contents are inserted for convenience of
reference only and shall be ignored in the interpretation of this
Agreement;
|
|
(b)
|
subject
to any specific provision of this Agreement or of any assignment and/or
participation or syndication agreement of any nature whatsoever, reference
to each of the parties hereto and to the other Security Documents shall be
deemed to be reference to and/or to include, as appropriate, their
respective successors and permitted
assigns;
|
|
(c)
|
reference
to a person shall be construed as including reference to an individual,
firm, company, corporation, unincorporated body of persons or any State or
any agency thereof;
|
|
(d)
|
where
the context so admits, words in the singular include the plural and vice
versa;
|
|
(e)
|
the
words "including" and "in particular" shall not be construed as limiting
the generality of any foregoing
words;
|
|
(f)
|
references
to (or to any specified provisions of) this Agreement and all documents
referred to in this Agreement shall be construed as references to this
Agreement, that provision or that document as are in force for the time
being and as are amended and/or supplemented from time to
time;
|
|
(g)
|
reference
to this Agreement includes all the terms of this Agreement and any
Schedules, Annexes or Appendices to this Agreement, which form an integral
part of same;
|
|
(h)
|
reference
to Clauses, sub-Clauses and Schedules are to Clauses, sub-Clauses and
Schedules in this Agreement;
|
|
(i)
|
reference
to the opinion of the Bank or a determination or acceptance by the Bank or
to documents, acts, or persons acceptable or satisfactory to the Bank or
the like shall be construed as reference to opinion, determination,
acceptance or satisfaction of the Bank at the sole discretion of the Bank
and such opinion, determination, acceptance or satisfaction of the Bank
shall be conclusive and binding on the
Borrower;
|
|
(j)
|
references
to a
"regulation"
include any present or future regulation, rule, directive,
requirement, request or guideline (whether or not having the force of law)
of any agency, authority, central bank or government department or any
self regulatory or other national or supra-national
authority;
|
|
(k)
|
references
to any person include such person's assignees and successors in
title;
|
|
(1)
|
references
to a
"guarantee"
include references to an indemnity or other assurance against
financial loss including, without limitation, an obligation to purchase
assets or services as a consequence of a default by any other person to
pay any Indebtedness and
"guaranteed"
shall be
construed accordingly; and
|
|
(m)
|
references
to any enactment shall be deemed to include references to such enactment
as re-enacted, amended or extended.
|
2.
|
THE
LOAN
|
|
2.1
|
Commitment to
Lend
|
2.2
|
Drawdown Notice and
Commitment to Borrow
|
2.3
|
Number of Advances
Agreed
|
2.4
|
Disbursement
|
2.5
|
Application of
Proceeds
|
2.6
|
Termination Date of
the Commitment
|
2.7
|
Evidence
|
2.8
|
Cancellation
|
2.9
|
Disbursement of the
Loan to Seller's Bank
|
|
(a)
|
Notwithstanding
the foregoing provisions of this Clause 2, in the event that the
Commitment or any relevant part thereof (as the case may be) is required
to be drawn down prior to the satisfaction of the requirements of Clause 7
and remitted to the Seller's Bank in accordance with Clause 3 of the MOA
(the
"Seller's Bank"),
the Bank may in its absolute discretion agree to remit such amount
to the Seller's Bank prior to the satisfaction of the requirements of
Clause 7 expressly subject to the following
conditions:
|
|
(i)
|
such
amount is remitted to the Seller's Bank to be held by it in an account in
the Bank's name (the
"deposit account")
and
to the order of the Bank;
|
|
(ii)
|
the
principal amount (the
"deposited amount")
of
such funds will only be released to the Seller upon the Seller's
presentation to the Seller's Bank of a copy of the protocol of delivery
and acceptance for the Vessel in the form agreed between the Seller and
the Borrower and duly signed on behalf of the Seller and the Borrower and
countersigned by the Bank's
representative;
|
|
(iii)
|
the
deposited amount so released may be used only for payment to the account
of the Seller with the Seller's Bank in satisfaction of the balance of the
purchase price of the Vessel; and
|
|
(iv)
|
in
the event that none of the said amount so remitted is released in
accordance with the Bank's instructions or any part thereof given in
compliance with the conditions of sub-clauses (i), (ii) and (iii) above is
not so released, the said amount so remitted and any interest earned, the
Bank may, after expiry of five (5) days from the expected Delivery Date,
instruct the Seller's Bank to pay the amount of the Loan and any earned
interest to another account of the Bank and the Borrower shall be obliged
to indemnify the Bank in accordance with Clause 10.1. Thereafter and
subject to the receipt by the Bank of the amount of the Loan and any
interest earned and prompt indemnification of the Bank by the Borrower in
accordance with Clause 10.1, as and when any further Drawdown Notice is
given by the Borrower) the provisions of this Clause shall apply again
(mutatis mutandis).
|
|
(b)
|
When
either:
|
|
(i)
|
the
Commitment or any relevant part thereof (as the case may be) is disbursed
(whether on the expected Delivery Date or thereafter) in accordance with
Clause 2.9(a)(i) and (ii) or
|
|
(ii)
|
the
Bank withdraws the deposited amount under Clause
2.9(d),
|
|
(c)
|
The
Bank shall have no liability to the Borrower if the Seller's Bank fails to
carry out any instructions given to it by the Bank to disburse or refund
the deposited amount.
|
|
(d)
|
If,
upon being instructed to do so by the Bank, the Seller's Bank fails either
to apply the deposited amount in full in accordance with Clause 2.9
(a)(ii) or to refund the deposited amount in full in accordance with
Clause 2.9(a)(iv):
|
|
(i)
|
the
Bank shall cease to be obliged to make the Commitment or relevant part
thereof (as the case may be) available unless and until the Seller's Bank
carries out such instructions;
|
|
(ii)
|
the
continued failure of the Seller's Bank to do so for five Banking Days
after the giving of such instruction shall be deemed to be an Event of
Default for the purposes of this
Agreement;
|
|
(iii)
|
the
Borrower shall indemnify the Bank on demand in respect to all loses
certified by the Bank as suffered or incurred by the Bank as a consequence
of the Seller's Bank failure to carry the Bank's instructions;
and
|
|
(iv)
|
without
prejudice to the obligations of the Borrower so to indemnify the Bank on
demand, the Bank shall in good faith take reasonable and proper steps
diligently to seek recovery of the deposited amount from the Seller's Bank
(provided that prior to taking such action the Borrower shall have agreed
to indemnify the Bank for all costs and expenses which may be incurred in
seeking recovery of such amount, including, without limitation, all legal
fees and disbursements reasonably and properly incurred) and if the Bank
shall recover any part of the deposited amount (and provided that it has
previously recovered full indemnification under Clause 2.9(d)(ii)) the
Bank shall, so long as no Event of Default has occurred and is continuing,
pay to the Borrower the amount so recovered after subtracting any tax
suffered or incurred thereon by the
Bank.
|
|
(e)
|
If,
at the time prior to the deposit of funds by the Bank with the Seller's
Bank, the Bank considers in its absolute discretion that the Seller's Bank
may be or will be unable or unwilling for any reason (including, without
limitation, by reason of the Seller's Bank's financial position or
regulatory requirements applicable to the Seller's Bank) to take and fully
apply such deposit in accordance with the requirements of this Clause 2.9,
the Bank may in its absolute discretion decide not to make such deposit
and this Agreement shall thereupon take effect as if this Clause 2.9 does
not apply and the Commitment or relevant part thereof (as the case may be)
shall, without prejudice to Clause 7, be made and disbursed in the manner
set out in this Agreement.
|
2.9
|
No security or lien
from other person
|
3.
|
INTEREST
|
|
(a)
|
the
initial Interest Period in respect of the Loan will commence on the
Drawdown Date and each subsequent Interest Period will commence forthwith
upon the expiry of the previous Interest
Period;
|
|
(b)
|
if
any Interest Period would otherwise overrun one or more Repayment Dates,
then, in the case of the last Repayment Date, such Interest Period shall
end on such Repayment Date, and in the case of any other Repayment Date or
Dates the Loan shall be divided into parts so that there is one part equal
to the amount of the Repayment Instalment due on each Repayment Date
falling during that Interest Period and having an Interest Period ending
on the relevant Repayment Date and another part equal to the amount of the
balance of the Loan having an Interest Period determined in accordance
with Clause 3.2 and the other provisions of this Clause 3.3 and the
expression
"Interest
Period in respect of the Loan"
when used in this Agreement refers
to the Interest Period in respect of the balance of the
Loan;
|
|
(c)
|
if
the Borrower fails to specify the duration of an Interest Period in
accordance with the provisions of Clause 3.2 and this Clause 3.3, such
Interest Period shall have a duration of three (3) months unless another
period shall be agreed between the Bank and the Borrower provided always
that such period shall comply with this Clause 3.3;
and
|
|
(d)
|
if
the Bank determines that funds for the duration of an Interest Period
specified by the Borrower in accordance with Clause 3.2 are not readily
available, then that Interest Period shall have such duration as the Bank,
in consultation with the Borrower, may
determine.
|
|
(a)
|
If
and whenever, at any time prior to the commencement of any Interest
Period, the Bank shall have determined (which determination shall, in the
absence of manifest error, be conclusive): (i) that adequate and fair
means do not exist for ascertaining LIBOR, during said Interest Period, or
(ii) that deposits in Dollars are not available to the Bank in the London
Interbank Market in the ordinary course of business in sufficient amounts
for any Interest Period or (iii) that by reason of circumstances affecting
the London Interbank Market generally, it is impracticable for the Bank to
advance the Commitment or fund or continue to fund the Loan during any
Interest Period or (iv) that LIBOR for that Interest Period will not
adequately reflect the cost of funding of the Loan for that Interest
Period, the Bank shall forthwith give notice (a
"Determination Notice")
thereof to the Borrower. A Determination Notice shall contain
particulars of the relevant circumstances giving rise to its issue. After
the giving of any Determination Notice the undrawn amount of the
Commitment shall not be borrowed until notice to the contrary is given to
the Borrower by the Bank.
|
|
(b)
|
During
the period of ten (10) days after any Determination Notice has been given
by the Bank under sub-Clause 3.6(a) the Bank and the Borrower shall
negotiate in good faith (but without incurring any legal obligations) with
a view to arriving at an acceptable alternative basis (the
"Substitute Basis"),
for
maintaining the Loan, failing which the Borrower shall promptly, on first
demand or within the time limit which may be determined by the Bank,
prepay the Loan together with accrued interest thereon to the date of
prepayment (calculated at the rate or rates most lately applicable to the
Loan) and all other sums payable by the Borrower under the Security
Documents and the Commitment shall be reduced to zero. In such case the
Borrower shall also reimburse to the Bank such amount as may be determined
by the Bank to be necessary to compensate it for the increased cost (if
any) of maintaining the Loan during the period of negotiation referred to
in this Clause 3.6 until such prepayment. In case the Bank agrees
|
to a
Substitute Basis for funding the Loan the Bank shall certify such
Substitute Basis to the Borrower. The Substitute Basis may (without
limitation) include alternative interest period(s), alternative currencies
or alternative rates of interest but shall include the Margin above the
cost of funds to the Bank. Each Substitute Basis so certified shall be
binding upon the Borrower and shall take effect in accordance with its
terms from the date specified in the Determination Notice until such time
as the Bank notifies the Borrower that none of the circumstances specified
in sub-Clause 3.6(a) continues to exist whereupon the normal interest rate
fixing provisions of this Agreement shall
apply.
|
|
(a)
|
If,
at any time during the Security Period, the Borrower wishes to enter into
swap Transactions so as to (inter alia) hedge all or any part of its
exposure under this Agreement to interest rate fluctuations, it shall
advise the Bank in writing.
|
|
(b)
|
Any
such swap transaction shall be concluded with the Bank under the Master
Agreement provided however that no such swap transaction shall be
concluded unless the Bank first agrees to it in writing at its sole and
absolute discretion. If and when any such swap transaction has been
concluded, it shall constitute a Transaction, and the Borrower shall sign
a Confirmation with the Bank.
|
|
(i)
|
1st
to 4
th
(both inclusive) of such Repayment Instalments shall be in the
amount of $3,337,500 (US Dollars three million three hundred thirty seven
thousand five hundred) each and;
|
|
(ii)
|
5
th
to 14
th
(both inclusive) of such Repayment Instalments shall be in the amount of
$2,375,000 (Dollars two million three hundred seventy five thousand)
each;
|
|
(a)
|
the
giving of such notice by the Borrower will irrevocably commit the Borrower
to prepay such amount as stated in such
notice;
|
|
(b)
|
such
prepayment may take place only on the last day of an Interest Period in
respect of the Loan provided however, that if the Borrower shall request
consent to make such prepayment on another day and the Bank shall accede
to such request (it being in the reasonable discretion of the Bank to
decide whether or not to do so) the Borrower will pay in addition to the
amount to be prepaid, any such sum as may be payable to the Bank pursuant
to Clause 10.1;
|
|
(c)
|
each
partial prepayment shall be equal to Dollars one million ($1,000,000) or a
whole multiple thereof or the balance of the
Loan;
|
|
(d)
|
any
prepayment of less than the whole of the Loan will be applied towards pro
rata satisfaction of the Balloon Instalment and the outstanding Repayment
Instalments;
|
|
(e)
|
every
notice of prepayment shall be effective only on actual receipt (including
by fax) by the Bank, shall be irrevocable and shall oblige the Borrower to
make such prepayment on the date
specified;
|
|
(f)
|
no
amount prepaid may be re-borrowed;
and
|
|
(g)
|
the
Borrower may not prepay the Loan or any part thereof save as expressly
provided in this Agreement.
|
|
(a)
|
On
the Vessel becoming a Total Loss or suffering damage or being involved in
an incident which in the reasonable opinion of the Bank may result in the
Vessel being subsequently determined to be a Total
Loss:
|
|
(iii)
|
prior
to the advancing of the Commitment, the obligation of the Bank to advance
the Commitment shall immediately cease and the Commitment shall be reduced
to zero; or
|
|
(ii)
|
in
case the Commitment has been already advanced, the Borrower shall prepay
the Outstanding Indebtedness the latest on the date falling one hundred
and eighty (180) days after that on which the incident which in the
reasonable opinion of the Bank may result in the Vessel being subsequently
determined to be a Total Loss occurred or, if earlier, on the date upon
which the insurance proceeds in respect of such Total Loss are or
Requisition Compensation is received by the Borrower (or the Bank pursuant
to the Security Documents).
|
|
(i)
|
an
actual total loss of the Vessel shall be deemed to have occurred at the
actual date and time the Vessel was lost but in the event of the date of
the loss being unknown then the actual total loss shall be deemed to have
occurred on the date on which the Vessel was last
reported;
|
|
(ii)
|
a
constructive total loss shall be deemed to have occurred at the date and
time notice of abandonment of the Vessel is given to the insurers of the
Vessel for the time being (provided a claim for total loss is admitted by
such insurers) or, if such insurers do not admit such a claim, at the date
and time at which a total loss is subsequently adjudged by a competent
court of law to have occurred;
|
|
(iii)
|
a
compromised or arranged total loss shall be deemed to have occurred on the
date on which a binding agreement as to such compromised or arranged total
loss has been entered into by the insurers of the
Vessel;
|
|
(iv)
|
requisition
for title or other compulsory acquisition of the Vessel shall be deemed to
have occurred on the date upon which the relevant requisition for title or
other compulsory acquisition occurs;
and
|
|
(v)
|
hijacking,
theft, condemnation, capture, seizure, detention, arrest, or confiscation
of the Vessel by any government or by any person acting or purporting to
act on behalf of any government, which deprives the Borrower of the use of
the Vessel for more than thirty (30) days shall be deemed to occur upon
the expiry of the period of thirty (30) days after the date upon which the
relevant hijacking, theft, condemnation, capture, seizure, detention,
arrest or confiscation occurred.
|
|
(b)
|
In
case of sale or other disposal of the Vessel, immediately upon completion
of such sale or other disposal, the Borrower shall prepay the
Loan.
|
4.4
|
Amounts payable on
prepayment
|
|
(a)
|
Pursuant
to the Master Agreement, the Bank and the Borrower may during the Security
Period enter, into one or more Transactions (pursuant to Clause 3.7), the
terms and conditions of each of which shall be specified in a Confirmation
sent by the Bank to the Borrower.
|
|
(b)
|
Notwithstanding
any provision of the Master Agreement to the contrary, in the case of a
prepayment of all or part of the Loan (including, without limitation, upon
a Total Loss or sale in accordance with clause 4.3), then subject to
Clause 4.5(c) the Bank shall be entitled but not obliged (and, where
relevant, may do so without the consent of the Borrower, where it would
otherwise be required whether under the Master Agreement or otherwise) to
amend, supplement, cancel, net out, terminate, liquidate, transfer or
assign all or any part of the rights, benefits and
|
|
|
obligations
created by any Transaction and/or the Master Agreement and/or to obtain or
re establish any hedge or related trading position in any manner and with
any person the Bank in its absolute discretion may determine and both the
Bank's and the Borrower's continuing obligations under any Transaction
and/or the Master Agreement shall, unless agreed otherwise by the Bank, be
calculated so far as the Bank considers it practicable by reference to the
amended repayment schedule for the Loan taking into account the fact that
less than the full amount of the Loan remains
outstanding.
|
|
(c)
|
If
less than the full amount of the Loan remains outstanding following a
prepayment under this Agreement and the Bank in its absolute discretion
agrees, following a written request of the Borrower, that the Borrower may
be permitted to maintain all or part of a Transaction in an amount not
wholly matched with or linked to all or part of the Loan, the Borrower
shall within ten (10) days of being notified by the Bank of such
requirement, provide the Bank with, or procure the provision to the Bank
of, such additional security as shall in the opinion of the Bank be
adequate to secure the performance of such Transaction, which additional
security shall take such form, be constituted by such documentation and be
entered into between such parties, as the Bank in its absolute discretion
may approve or require, and each document comprising such additional
security shall constitute a Credit Support
Document.
|
|
(d)
|
The
Borrower shall on the first written demand of the Bank indemnify the Bank
in respect of all losses, costs and expenses (including, but not limited
to, legal costs and expenses) incurred or sustained by the Bank as a
consequence of or in relation to the effecting of any matter or
transactions referred to in this Clause
4.5.
|
|
(e)
|
Notwithstanding
any provision of the Master Agreement to the contrary, if for any reason,
a Transaction has been entered into but no Advance is drawn down under
this Agreement then, subject to clause 4.5(f) the Bank shall be entitled
but not obliged (and, where relevant, may do so without the consent of the
Borrower where it would otherwise be required whether under the Master
Agreement or otherwise) to amend, supplement, cancel, net out, terminate,
liquidate, transfer or assign all or any part of the rights, benefits and
obligations created by such Transaction and/or the Master Agreement and/or
to obtain or re-establish any hedge or related trading position in any
manner and with any person the Bank in its absolute discretion may
determine.
|
|
(f)
|
If
a Transaction has been entered into but no Advance is drawn down under
this Agreement and the Bank in its absolute discretion agrees, following a
written request of the Borrower, that the Borrower may be permitted to
maintain all or part of a Transaction, the Borrower shall within ten (10)
days of being notified by the Bank of such requirement, provide the Bank
with, or procure the provision to the Bank of, such additional security as
shall in the opinion of the Bank be adequate to secure the performance of
such Transaction, which additional security shall take such form, be
constituted by such documentation and be entered into between such
parties, as the Bank in its absolute discretion may approve or require,
and each document comprising such additional security shall constitute a
Credit Support Document for the purposes of the Master Agreement and/or
otherwise.
|
|
(g)
|
Without
prejudice to or limitation of the obligations of the Borrower under clause
4.5(c), in the event that the Bank exercises any of its rights under
clauses 4.5 (b), 4.5(c), 4.5(e) or 4.5(f) and such exercise results in all
or part of a Transaction being terminated such termination shall be
treated under the Master Agreement in the same manner as if it were a
Terminated Transaction (as defined in section 14 of the Master Agreement)
effected by the Bank after an Event of Default (as so defined in that
section 14) by the Borrower and, accordingly, the Bank shall be permitted
to recover from the Borrower a payment for early termination calculated in
accordance with the provisions of section 6(e)(i) of the Master
Agreement.
|
|
(h)
|
No
Transaction will be entered into without the specific consent of the
Borrower.
|
|
(a)
|
The
Borrower acknowledges that in performing its obligations under this
Agreement, the Bank will be incurring liabilities to third parties in
relation to the funding of amounts to the Borrower, such liabilities
matching the liabilities of the Borrower to the Bank and that it is
reasonable for the Bank to be entitled to receive payments from the
Borrower gross on the due date in order that the Bank is put in a position
to perform its matching obligations to the relevant third parties.
Accordingly, all payments to be made by the Borrower under this Agreement
and/or any of the other Security Documents shall be made in full, without
any set-off or counterclaim whatsoever and, subject as provided in Clause
5.3, free and clear of any deductions or withholdings or Governmental
Withholdings whatsoever, in Dollars on the due date to the account of the
Bank at such bank and in such place as the Bank may from time to time
specify for that purpose, reference: "JAPAN I SHIPPING COMPANY LIMITED -
LOAN AGREEMENT", Provided however, that the Bank shall have the right to
change the place of account for payment, upon eight (8) Banking Days'
prior written notice to the
Borrower.
|
|
(b)
|
If
at any time it shall become unlawful or impracticable for the Borrower to
make payment under this Agreement to the relevant account or bank referred
to in Clause 5.1(a), the Borrower may request and the Bank may agree to
alternative arrangements for the payment of the amounts due by the
Borrower to the Bank under this Agreement or the other Security
Documents.
|
6.1
|
The
Borrower hereby represents and warrants to the Bank
that:
|
|
(a)
|
Due
Incorporation/Valid
Existence
|
|
(b)
|
Due Corporate
Authority
|
|
(c)
|
Litigation
|
|
(d)
|
No conflict with other
obligations
|
|
(e)
|
Financial
Condition
|
|
(f)
|
No
Immunity
|
|
(g)
|
Shipping
Company
|
|
(h)
|
Licences/Authorisation
|
|
(i)
|
Perfected
Securities
|
|
(j)
|
No
Notarisation/Filing/Recording
|
|
(k)
|
Validity and Binding
effect
|
|
(l)
|
Valid Choice of
Law
|
|
(m)
|
Shareholdings
|
|
(n)
|
Money laundering -
acting for own account
|
6.2
|
The
Borrower hereby further represents and warrants to the Bank
that:
|
|
(i)
|
in
the absolute and free from Encumbrances (other than in favour of the Bank)
ownership of the Borrower who will on and after the Drawdown Date be the
sole legal and beneficial owner of the
Vessel;
|
|
(ii)
|
registered
in the name of the Borrower through the Registry under the laws and flag
of the Flag State;
|
|
(iii)
|
operationally
seaworthy and in every way fit for
service;
|
|
(iv)
|
classed
with a classification society which is a member of IACS and which has been
approved by the Bank in writing and such class will be free of all
requirements and recommendations of such classification
society;
|
|
(v)
|
insured
in accordance with the provisions of this
Agreement;
|
|
(vi)
|
managed
by the Approved Manager; and
|
|
(vii)
|
in
full compliance with the ISM Code and the ISPS
Code;
|
|
(i)
|
the
Borrower and its Related Companies have complied with the provisions of
all Environmental Laws;
|
|
(ii)
|
the
Borrower and its Related Companies have obtained all Environmental
Approvals and are in compliance with all such Environmental Approvals;
and
|
|
(iii)
|
neither
the Borrower nor any of its Related Companies have received notice of any
Environmental Claim that the Borrower or any of its Related Companies are
not in compliance with any Environmental Law or any Environmental
Approval;
|
|
(i)
|
except
as may already have been disclosed by the Borrower in writing to, and
acknowledged in writing by, the
Bank:
|
|
(aa)
|
there
is no Environmental Claim pending or, to the best of the Borrower's
knowledge and belief, threatened against the Borrower or the Vessel or the
Borrower's Related Companies or any other Relevant Ship;
and
|
|
(bb)
|
there
has been no emission, spill, release or discharge of a Material of
Environmental Concern from the Vessel or any other Related Ship or any
vessel owned by, managed or crewed by or chartered to the Borrower which
could give rise to an Environmental
Claim;
|
|
(a)
|
a
duly certified true copy of the Articles of Incorporation and By-Laws or
the Memorandum and Articles of Association, or of any other constitutional
documents, as the case may be, of each corporate Security
Party;
|
|
(b)
|
a
recent certificate of incumbency of each corporate Security Party issued
by the appropriate authority or, as appropriate, signed by the secretary
or a director thereof, stating the officers and the directors of each of
them and containing specimens of their respective
signatures;
|
|
(c)
|
minutes
of separate meetings of the directors and shareholders of each corporate
Security Party at which there was approved (inter alia) the entry into,
execution, delivery and performance of this Agreement, the other Security
Documents and any other documents executed or to be executed pursuant
hereto or thereto to which the relevant corporate Security Party is or is
to be a party;
|
|
(d)
|
the
original of any power(s) of attorney and any further evidence of the due
authority of any person signing this Agreement, the other Security
Documents, and any other documents executed or to be executed pursuant
hereto or thereto on behalf of any corporate
person;
|
|
(e)
|
evidence
that all necessary licences, consents, permits and authorisations
(including exchange control ones) have been obtained by any Security Party
for the execution, delivery, validity, enforceability, admissibility in
evidence and the due performance of the respective obligations under or
pursuant to this Agreement and the other Security Documents;
and
|
|
(f)
|
evidence
that the drawdown fee and the commitment commission due under Clause 10.8
has been paid in full; and
|
|
(g)
|
any
other documents or recent certificates or other evidence which would be
required by the Bank in relation to any corporate Security Party
evidencing that the relevant Security Party has been properly established,
continues to exist validly and to be in good standing;
and
|
|
(h)
|
a
declaration of beneficial shareholding by the ultimate shareholders(s) of
the Borrower and a declaration showing that up to 5% of the shareholding
of the Corporate Guarantor is held by Mr.Evangelos Pistiolis and members
of his family.
|
|
(a)
|
evidence
that the Vessel will be duly registered in the ownership of the Borrower
through the Registry at the port of the Vessel's port of registry under
the laws and flag of the Flag State free from any Encumbrances save for
those in favour of the Bank and otherwise as contemplated herein and free
of any charter;
|
|
(b)
|
evidence
in form and substance satisfactory to the Bank that the Vessel has been or
will - on drawdown - be insured in accordance with the insurance
requirements provided for in Schedule 2 this Agreement and the other
Security Documents (including (a) a Mortgagee's Interest Insurance for an
amount equal to 120% of the amount of the Loan (herein "
MII
") and (b) (in case that the Bank
reasonably determines or in case that the Vessel is scheduled to operate
worldwide which could include USA jurisdiction or the USA Exclusive
Economic Zone (as defined in the United States Oil Pollution Act 1990 or
any other applicable legislation or in waters with similar to the United
States Oil Pollution Act 1990 legislation), a Mortgagee's Interest
Additional Perils (Pollution) insurance policy (herein "
MAPI
"), for an amount equal to 120% of
the amount of the Loan, each of which the Bank may at any time effect on
such terms and with such insurers as shall from time to time be determined
by the Bank) to be followed by full copies of cover notes, policies,
certificates of entry or other contracts of insurance and irrevocable
authority is hereby given to the Bank at any time at its discretion to
obtain copies of the policies, certificates of entry or other contracts of
insurance from the insurers and/or obtain any information in relation to
the Insurances relating to the
Vessel;
|
|
(c)
|
certified
true copy of the Management Agreement evidencing that the Vessel is
managed by the Approved Manager on terms acceptable to the
Bank;
|
|
(d)
|
evidence
that the trading certificates of the Vessel are valid and in
force;
|
|
(e)
|
all
necessary confirmations from the insurers of the Vessel that they will
issue letters of undertaking and endorse notice of assignment and loss
payable clauses on the Insurances, in form and substance satisfactory to
the Bank in its sole discretion and ( - in the event of fleet cover -
accompanied by waivers for liens for unpaid premium of other vessels
managed by the Approved Manager and which are not subject to any mortgage
in favour of the Bank);
|
|
(f)
|
each
of the Security Documents (as set out in Clause 11.1) duly executed and
where appropriate duly registered with the appropriate
Registry;
|
|
(g)
|
evidence
that the Vessel is classed as specified in Clause 6.2(f)(iv) with Lloyds
Register of Shipping, or to a similar standard with another classification
society of like standing to be specifically approved by the Bank, and
remains free from any and all recommendations, overdue notations or
average damage affecting class;
|
|
(h)
|
the
Drawdown Notice in respect of the Commitment duly executed and
issued;
|
|
(i)
|
copies
of the DOC and SMC referred to in paragraph (a) in the definition of the
ISM Code Documentation certified as true and in effect by the Borrower and
the Approved Manager; and
|
|
(j)
|
copies
of such ISM Code Documentation as the Bank may by written notice to the
Borrower have requested not later than two (2) days before the Drawdown
Date certified as true and complete in all material respects by the
Borrower and the Approved Manager;
|
|
(k)
|
if
the Bank so requires, a satisfactory to the Bank physical condition survey
report on the Vessel together with a comprehensive record inspection from
a surveyor appointed by the Bank, at the Borrower's expense;
and
|
|
(1)
|
valuation
of the Vessel, at the Borrower's expense, as at a date determined by the
Bank but in any event before the relevant drawdown, prepared on the basis
specified in Clause 8.6(b) by major shipbrokers appointed and/or approved
by the Bank in form and substance satisfactory to the Bank in its sole
discretion;
|
|
(b)
|
a
copy of the MOA certified as true and complete by the legal counsel of the
Borrower;
|
|
(c)
|
evidence
to the full satisfaction of the Bank, proving the Seller's title to the
Vessel free of any Encumbrances, debts or claims of any nature
whatsoever;
|
|
(d)
|
duly
certified copies of corporate documentation of the Seller - comparable at
the discretion of the Bank to that provided in Clause 7.1 - proving the
due incorporation and existence of the Seller and the due authorisation of
the sale of the Vessel and the execution of all documents required in
connection therewith;
|
|
(e)
|
duly
certified copy of the Bill of Sale, the protocol of delivery and
acceptance of the Vessel as well as of all other Seller's documents;
and
|
|
(e)
|
evidence
that the ten per cent (10%) deposit in respect of the Vessel and all other
sums of money (other than the relevant Advance) required to be paid by the
Borrower to the Seller pursuant to the MOA have been duly
paid.
|
|
(a)
|
the
representations and warranties set out in Clause 6 and in each of the
Security Documents are true and correct on and as of each such time as if
each was made with respect to the facts and circumstances existing at such
time;
|
|
(b)
|
no
Default shall have occurred and be continuing or would result from the
drawdown; and
|
|
(c)
|
the
Bank shall be satisfied that there has been no change in the ownership,
management, operations and/or adverse change in the financial condition of
any Security Party and the Group which (change) might, in the sole opinion
of the Bank, be detrimental to the interests of the
Bank.
|
|
(a)
|
opinions
from lawyers appointed by the Bank as to all the matters referred to in
Clauses 6.1(a) and (b) and all such aspects of law as the Bank shall deem
relevant to this Agreement and the other Security Documents and any other
documents executed pursuant hereto or thereto and any further legal or
other expert opinion as the Bank at its sole discretion may
require;
|
|
(b)
|
confirmation
from any agents nominated in this Agreement and elsewhere in the other
Security Documents for the acceptance of any notice or service of process,
that they consent to such nomination;
and
|
|
(c)
|
a
receipt in writing in form and substance satisfactory to the Bank
including an acknowledgement and admission of the Borrower and/or any
other Security Party to the effect that the Commitment or relevant part
thereof (as the case may be) was drawn by the Borrower and a declaration
by the Borrower that all conditions precedent have been fulfilled, that
there is no Event of Default and that all the representations and
warranties are true and correct.
|
|
(a)
|
Annual financial
Statements
|
|
(b)
|
Financial
Information
|
|
(c)
|
Information on adverse
change or Default
|
|
(d)
|
Information on the
employment of the Vessel
|
|
(a)
|
ensure
that, all banking operations in connection with the Vessel are carried out
through the Lending Branch;
|
|
(b)
|
ensure
that throughout the Security Period, the Borrower shall maintain in the
Earnings Account average monthly balances of Dollars one million
($1,000,000);
|
|
(a)
|
ensure
that, for the duration of the Security Period, the Leverage Ratio of the
Corporate Guarantor will not at any time exceed
75%;
|
|
(b)
|
ensure
that, for the duration of the Security Period, the ratio of EBITDA over
Net Interest Expenses is not lower than
2.5:1.0;
|
|
(c)
|
ensure
that, for the duration of the Security Period, the Corporate Liquidity of
the Corporate Guarantor maintained with the Bank or financial institutions
at any relevant time is of an amount not less than the aggregate of its
next six (6) months overall senior debt servicing
obligations;
|
|
(d)
|
ensure
that a compliance certificate for each financial year of the Corporate
Guarantor, signed by its chief financial officer, is delivered to the Bank
by the Corporate Guarantor within 60 days after the end of the respective
financial semester, substantially in the form set out in Schedule 3, duly
completed and supported by calculations setting out in reasonable detail
the materials underling the statements made in such compliance
certificate;
|
|
(i)
|
additional
pledged cash deposits in favour of the Bank in an amount equal to such
shortfall with a bank and in an account and manner to be determined by the
Bank; and/or
|
|
(ii)
|
any
other security acceptable to the Bank to be provided in a manner
determined by the Bank.
|
8.8
|
Covenants Concerning
the Vessel
|
|
(i)
|
of
any Environmental Claim for an amount or amounts in aggregate exceeding
$300,000 made against the Vessel, any Relevant Ship and/or her respective
owner; and
|
|
(ii)
|
upon
becoming aware of any incident which may give rise to an Environmental
Claim and to keep the Bank advised in writing of the Borrower's response
to such Environmental Claim on such regular basis and in such detail as
the Bank shall require;
|
|
(a)
|
will
comply with and ensure that the Vessel and any Operator by no later than
the Drawdown Date complies with the requirements of the ISM Code,
including (but not limited to) the maintenance and renewal of valid
certificates pursuant thereto throughout the Security
Period;
|
|
(b)
|
immediately
inform the Bank if there is any threatened or actual withdrawal of the
Borrower's, the Approved Manager's or an Operator's DOC or the SMC in
respect of the Vessel; and
|
|
(c)
|
promptly
inform the Bank upon the issue to the Borrower, the Approved Manager or
any Operator of a DOC and to the Vessel of an SMC or the receipt by the
Borrower, the Approved Manager or any Operator of notification that its
application for the same has been
realised.
|
|
(a)
|
maintain
at all times a valid and current ISSC respect of the
Vessel;
|
|
(b)
|
immediately
notify the Bank in writing of any actual or threatened withdrawal,
suspension, cancellation or modification of the ISSC in respect of the
Vessel; and
|
|
(a)
|
the
Borrower or any other Security Party fails to pay any sum due from the
Borrower or, as the case may be such Security Party, under this Agreement
and/or any of the other Security Documents at the time, in the currency
and in the manner stipulated herein and/or any of the other Security
Documents, or, in the case of any sum payable on demand, within three (3)
Banking Days of such demand; or
|
|
(b)
|
the
Borrower or any other Security Party fails to observe and perform any one
or more of the covenants, terms or obligations contained in this Agreement
and/or any other Security Document relating to the Insurances;
or
|
|
(c)
|
the
Borrower or any other Security Party commits any breach of or omits to
observe any of the covenants, terms, obligations or undertakings under
this Agreement and/or any of the other Security Documents (other than
failure to pay any sum when due or to comply with any obligation
concerning the Insurances) and, in respect of any such breach or omission
which in the opinion of the Bank is capable of remedy, such action as the
Bank may require shall not have been taken within seven (7) days of the
Bank notifying the Borrower and/or the relevant Security Party of such
required action to remedy the breach or omission;
or
|
|
(a)
|
any
Security Party is adjudicated or found bankrupt or insolvent or any
judgement or order is made by any competent court or resolution passed or
petition (which is not in the reasonable opinion of the Bank frivolous and
is not being contested in good faith by such Security Party) presented for
the winding-up or dissolution of any Security Party or for the appointment
of a liquidator, trustee, receiver, administrator or conservator of the
whole or any part of the undertakings, assets, rights or revenues of any
Security Party; or
|
|
(b)
|
any
Security Party becomes or is deemed to be insolvent or suspends payment of
its debts or is (or is deemed to be) unable to or admits inability to pay
its debts as they fall due or proposes or enters into any composition,
compromise or other arrangement for the benefit of its creditors generally
or good faith proceedings are commenced in relation to any Security Party
under any law, regulation or procedure relating to reconstruction or
readjustment of debts; or
|
|
(c)
|
an
encumbrancer takes possession or a receiver or similar officer is
appointed of the whole or any part of the undertakings, assets, rights or
revenues of any Security Party or a distress, execution, sequestration or
other process is levied or enforced upon or sued out against any of the
undertakings, assets, rights or revenues of any Security Party and is not
discharged within fifteen (15) days;
or
|
|
(d)
|
all
or a material part of the undertakings, assets, rights or revenues of any
Security Party are seized, nationalised, expropriated or compulsorily
acquired by or under the authority of any government;
or
|
|
(e)
|
any
event occurs or proceeding is taken with respect to any Security Party in
any jurisdiction to which it is subject which has an effect equivalent or
similar to any of the events mentioned in sub-Clauses 9.2(a) to 9.2(d);
or
|
|
(f)
|
any
Security Party suspends or ceases or threatens to suspend or cease to
carry on its business; or
|
|
(g)
|
there
occurs, in the reasonable opinion of the Bank, a material adverse change
in the financial condition of any Security Party;
or
|
|
(h)
|
any
other event occurs or circumstances arise which, in the reasonable opinion
of the Bank, materially and adversely affects either (i) the ability of
any Security Party to perform all or any of its obligations under or
otherwise to comply with the terms of this Agreement and/or any of the
other Security Documents, or (ii) the security created by this Agreement
and/or any of the Security Documents;
or
|
|
(i)
|
there
is any material change in the beneficial ownership of the shares in the
Borrower and/or in any other corporate Security Party;
or
|
|
(j)
|
a
meeting is convened by any Security Party for the purpose of passing any
resolution to purchase, reduce or redeem any of its share capital;
or
|
|
(k)
|
there
is any material change in the beneficial ownership of the shares in any of
the Borrower and/or in any other corporate Security Party, as a result of
which Mr. Evangelos Pistiolis' and/or members of his family's controlling
interest in the Corporate Guarantor shall be reduced to less than five per
centum (5%) of the share capital of the Corporate Guarantor;
or
|
|
(a)
|
this
Agreement or any of the other Security Documents shall at any time and for
any reason become invalid or unenforceable or otherwise cease to remain in
full force and effect, or if the validity or enforceability of any of the
Security Documents shall at any time and for any reason be contested by
any party thereto (other than the Bank), or if any such party shall deny
that it has any, or any further, liability thereunder or it becomes
impossible or unlawful for the Borrower to fulfil any of its covenants and
obligations contained in this Agreement or any of the Security Documents
or for the Bank to exercise the rights vested in it thereunder or
otherwise; or
|
|
(b)
|
any
consent, authorisation, licence or approval of, or registration with or
declaration to, governmental or public bodies or authorities or courts
required by the Borrower to authorise or otherwise in connection with, the
execution, delivery, validity, enforceability or admissibility in evidence
of this Agreement and/or any of the other Security Documents or the
performance by the Borrower of its obligations under this Agreement and/or
any of the other Security Documents is modified in a manner unacceptable
to the Bank or is not granted or is revoked or terminated or expires and
is not renewed or otherwise ceases to be in full force and effect;
or
|
|
(c)
|
any
Encumbrance (other than Permitted Liens) in respect of any of the property
(or part thereof) which is the subject of the Security Documents (or any
of them) becomes enforceable; or
|
|
(a)
|
any
Security Party (other than the Borrower) fails to pay any sum due from it
under this Agreement and/or any of the Security Documents when due, or, in
the case of any sum payable on demand, within three (3) Banking Days of
demand; or
|
|
(b)
|
any
Security Party (other than the Borrower) fails to observe and perform any
one or more of the covenants, terms or obligations contained in this
Agreement (including Schedule 2) and/or the other Security Documents
relating to the Insurances; or
|
|
(c)
|
any
Security Party (other than the Borrower) commits any breach of or omits to
observe any of the covenants, terms, obligations or undertakings expressed
to be assumed by it under this Agreement and/or any of the Security
Documents (other than failure to pay any sum when due or to observe or
perform obligations relating to the Insurances) and, in respect of any
such breach or omission which in the opinion of the Bank is capable of
remedy, such action as the Bank may require shall not have been taken
within seven (7) days of the Bank notifying the relevant Security Party,
of such required action to remedy the breach or omission;
or
|
|
(d)
|
any
representation or warranty made or deemed to be made or repeated by or in
respect of any Security Party (other than the Borrower) in or pursuant to
this Agreement or any of the other Security Documents or in any notice,
certificate or statement referred to in or delivered under this Agreement
or any of the other Security Documents is or proves to have been incorrect
in any material respect; or
|
|
(e)
|
any
of the events referred to in Clauses 9.2 to 9.5 occurs (amended as
appropriate) in relation to any Security Party (other than the Borrower);
or
|
|
(a)
|
the
Vessel becomes a Total Loss or suffers damage or is involved in an
incident which in the reasonable opinion of the Bank may result in the
Vessel being subsequently determined to be a Total Loss and the insurance
indemnity is not paid by the insurers to the Bank under the General
Assignment within a period of one hundred fifty (150) days from the
earlier of: (i) the date such Total Loss occurred and (ii) the date on
which the incident which in the reasonable opinion of the Bank may result
in the Vessel being subsequently determined to be a Total Toss has
occurred; or
|
|
(b)
|
the
Vessel ceases to be managed by the Approved Manager (for any reason other
than the reason of a Total Loss or sale of the Vessel) with the approval
of the Bank, and the Borrower fails to appoint an Approved Manager within
seven (7) days after the termination of the Management Agreement with the
previous Approved Manager; or
|
|
(c)
|
the
Vessel is arrested, confiscated, seized, taken in execution, impounded,
forfeited, detained in exercise or purported exercise of any possessory
lien or other claim and the Owner shall fail to procure the release of the
Vessel within a period of seven (7) days thereafter;
or
|
|
(d)
|
the
registration of the Vessel under the laws and flag of the Flag State is
cancelled or terminated without the prior written consent of the Bank or,
if the Vessel is only provisionally registered on the Drawdown Date and is
not permanently registered under the laws and flag of the Flag State at
least thirty (30) days prior to the deadline for completing such permanent
registration;
|
|
(e)
|
the
Flag State of the Vessel becomes involved in hostilities or civil war or
there is a seizure of power in such Flag State by unconstitutional means
if, in any such case, such event could in the reasonable opinion of the
Bank reasonably be expected to have a material adverse effect on the
security constituted by any of the Security Documents and alternative
arrangements satisfactory to the Bank have not been made promptly upon the
Bank's request; or
|
|
(f)
|
the
Borrower or any other person fails or omits to comply with any
requirements of the protection and indemnity association or other insurer
with which the Vessel is entered for insurance or insured against
protection and indemnity risks (including oil pollution risks) to the
effect that any cover (including, without limitation, any cover in respect
of liability for Environmental Claims arising in jurisdiction where the
Vessel operates or trades) is or may be liable to cancellation,
qualification or exclusion at any time;
or
|
|
(g)
|
(without
prejudice to the generality of sub-Clauses 9.1(b) and (c)) for any reason
whatsoever the provisions of Clause 8.12 are not complied with and/or the
Vessel ceases to comply with the ISM Code;
or
|
|
(h)
|
(without
prejudice to the generality of sub-Clauses 9.1(b) and (c)) for any reason
whatsoever the provisions of Clause 8.13 are not complied with and/or the
Vessel ceases to comply with the ISPS Code;
or
|
|
(a)
|
any
Relevant Party and/or the Approved Manager and/or any of their respective
Environmental Affiliates fails to comply with any Environmental Law or any
Environmental Approval or the Vessel or any Relevant Ship is involved in
any incident which gives rise or which may give rise to any Environmental
Claim, if in any such case, such non compliance or incident or the
consequences thereof could (in the reasonable opinion of the Bank) be
expected to have a material adverse effect on the business assets,
operations, property or financial condition of the Borrower or any other
Security Party or on the security created by any of the Security
Documents; or
|
|
(b)
|
any
Security Party or any other person fails or omits to comply with any
requirements of the protection and indemnity association or other insurer
with which the Vessel is entered for insurance or insured against
protection and indemnity risks (including oil pollution risks) to the
effect that any cover in relation to the Vessel (including without
limitation, liability for Environmental Claims arising in jurisdictions
where the Vessel operates or trades) is or may be liable to cancellation,
qualification or exclusion at any time;
or
|
|
(a)
|
by
notice to the Borrower declare that the obligation of the Bank to make the
Commitment available shall be terminated, whereupon the Commitment shall
be reduced to zero forthwith;
and/or
|
|
(b)
|
by
notice to the Borrower declare that the Loan and all interest and
commitment commission accrued and all other sums payable under this
Agreement and the other Security Documents have become due and payable,
whereupon the same shall, immediately or in accordance with the terms of
such notice, become due and payable without any further diligence,
presentment, demand of payment, protest or notice or any other procedure
from the Bank which are expressly waived by the Borrower;
and/or
|
|
(c)
|
put
into force and exercise all or any of the rights, powers and remedies
possessed by it under this Agreement and/or under any other Security
Document and/or as mortgagee of the Vessel, mortgagee, chargee or assignee
or as the beneficiary of any other property right or any other security
(as the case may be) over the assets charged or assigned to it under the
Security Documents or otherwise (whether at law, by virtue of any of the
Security Documents or otherwise).
|
|
(a)
|
for
any loss caused by an exercise of rights under, or enforcement of an
Encumbrance created by, a Security Document or by any failure or delay to
exercise such a right or to enforce such an Encumbrance;
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 an Encumbrance or for any reduction (however caused) in the value of
such an asset,
|
|
(a)
|
any
default in payment by any of the Security Parties of any sum under any of
the Security Documents when due;
|
|
(b)
|
the
occurrence of any Event of Default;
|
|
(c)
|
any
prepayment of the Loan or part thereof being made under Clauses 4.2(b) and
4.3, 8.6(c) or 12 or any other repayment of the Loan or part thereof being
made otherwise than on an Interest Payment Date relating to the part of
the Loan prepaid or repaid; or
|
|
(d)
|
the
Commitment not being advanced for any reason (excluding any default by the
Bank) after the Drawdown Notice has been
given,
|
|
(a)
|
Initial and Amendment
expenses
|
|
(b)
|
Enforcement
expenses
|
|
(c)
|
MII-MAPI
costs
|
|
(d)
|
Other
expenses
|
|
(a)
|
Express
authority is hereby given by the Borrower to the Bank to accept (at the
sole discretion of the Bank) all tested or untested communications given
by facsimile, telex, cable or otherwise, regarding any or all of the
notices, requests, instructions or other communications under this
Agreement, subject to any restrictions imposed by the Bank relating to
such communications including, without limitation (if so required by the
Bank), the obligation to confirm such communications by
letter.
|
|
(b)
|
The
Borrower shall recognise any and all of the said notices, requests,
instructions or other communications as legal, valid and binding, when
these notices, requests, instructions or communications come from the
telex and fax numbers mentioned in Clause 15.1 or any other telex or fax
usually used by it or its managing
company.
|
|
(c)
|
The
Borrower hereby assumes full responsibility for the execution of the said
notices, requests, instructions or communications by the Bank and promises
and recognises that the Bank shall not be held responsible for any loss,
liability or expense that may result from such notices, requests,
instructions or other communications. It is hereby undertaken by the
Borrower to indemnify in full the Bank from and against all actions,
proceedings, damages, costs, claims, demands, expenses and any and all
direct and/or indirect losses which the Bank may suffer, incur or sustain
by reason of the Bank following such notices, requests, instructions or
communications.
|
|
(d)
|
With
regard to notices, requests, instructions or communications issued by
electronic and/or mechanical processes (e.g. by facsimile, telex), the
risk of equipment malfunction, including, without limitation, paper
shortage, transmission errors, omissions and distortions is assumed fully
and accepted by the Borrower, save in case of Bank's gross
misconduct.
|
|
(e)
|
The
risks of misunderstandings and errors resulting from notices, requests,
instructions or communications being given as mentioned above, are for the
Borrower and the Bank will be indemnified in full pursuant to this Clause
save in case of Bank's gross
misconduct.
|
|
(f)
|
The
Bank shall have the right to ask the Borrower to furnish any information
the Bank may require to establish the authority of any person purporting
to act on behalf of the Borrower for these notices, requests, instructions
or communications but it is expressly agreed that there is no obligation
for the Bank to do so. The Bank shall be fully protected in, and the Bank
shall incur no liability to the Borrower for acting upon the said notices,
requests, instructions or communications which were believed by the Bank
in good faith to have been given by the Borrower or by any of its
authorised representative(s).
|
|
(g)
|
It
is undertaken by the Borrower to safeguard the function and the security
of the electronic and mechanical appliance(s) such as telex(es), fax(es)
etc., as well as the code word list, if any, and to take adequate
precautions to protect such code word list from loss and to prevent its
terms becoming known to any persons not directly concerned with its use.
The Borrower shall hold the Bank harmless and indemnified from all claims,
losses, damages and expenses which the Bank may incur by reason of the
failure of the Borrower to comply with the obligations under this
Clause.
|
|
(a)
|
As
an inducement for the Bank to enter into this Agreement the Borrower shall
pay on the Drawdown Date an arrangement fee in the amount of Dollars one
hundred seventy five thousand ($175,000);
and
|
|
(b)
|
The
Borrower shall pay to the Bank in arrears on each of the dates falling at
three monthly intervals after the date of acceptance of the Commitment
Letter until the earlier of (a) the last day of the Availability Period
(b) the Drawdown Date and (c) the date of cancellation of the Commitment
in full by the Borrower (the
"Commitment Commission Period")
commitment commission at the rate of 0.35% per annum on the daily
undrawn and uncancelled amount of the Commitment, computed from the date
of acceptance of the Commitment Letter (in the case of the first payment
of commission) and from the date of the preceding payment of commission
(in the case of each subsequent payment) until the last day of the
Commitment Commission Period.
|
|
(a)
|
the
Mortgage duly registered over the Vessel through the
Registry;
|
|
(b)
|
the
General Assignment;
|
|
(c)
|
the
Corporate Guarantee;
|
|
(d)
|
the
Accounts Pledge Agreement;
|
|
(e)
|
the
Shares Pledge Agreement;
|
|
(f)
|
the
Manager's Undertaking; and
|
|
(g)
|
any
Charterparty Assignment;
|
|
(a)
|
Firstly
in or towards
payment of Expenses and all sums other than principal or interest which
may be due to the Bank under this Agreement and the other Security
Documents or any of them at the time of
application;
|
|
(b)
|
Secondly
in or towards
payment of any default interest;
|
|
(c)
|
Thirdly
in or towards
payment of any arrears of interest (other than default interest) due in
respect of the Loan or any part
thereof;
|
|
(d)
|
Fourthly
in or towards
repayment of the Loan whether the same is due and payable or
not;
|
|
(e)
|
Fifthly
in or towards
payment to the Bank for any loss suffered by reason of any such payment in
respect of principal not being effected on an Interest Payment Date
relating to the part of the Loan
repaid;
|
|
(f)
|
Sixthly
in or towards
payment of the Master Agreement Liabilities;
and
|
|
(g)
|
Seventhly
the surplus
(if any) shall be paid to the Borrower, or to whomsoever else shall be
entitled to receive such surplus.
|
|
(a)
|
to
apply any credit balance standing upon any account of the Borrower with
any branch of the Bank and in whatever currency in or towards satisfaction
of any sum due to the Bank from the Borrower under this Agreement, the
Master Agreement and/or any of the other Security
Documents;
|
|
(b)
|
in
the name of the Borrower and/or the Bank to do all such acts and execute
all such documents as may be necessary or expedient to effect such
application; and
|
|
(c)
|
to
combine and/or consolidate all or any accounts in the name of the Borrower
with the Bank.
|
|
(d)
|
For
all or any of the above purposes authority is hereby given to the Bank to
purchase with the moneys standing to the credit of any such account or
accounts such other currencies as may be necessary to effect such
application. The Bank shall not be obliged to exercise any right given by
this Clause.
|
|
(e)
|
The
rights conferred on the Bank by this Clause 11.4 shall be in addition to,
and without prejudice to or limitation of, the rights of netting and set
off conferred on the Bank by the Master Agreement. The Borrower
acknowledges that the Bank shall be under no obligation to make any
payment to the Borrower under or pursuant to the Master Agreement if, at
the time that payment becomes due, there shall have occurred an Event of
Default or Termination Event (as those terms are respectively defined in
the Master Agreement).
|
|
(a)
|
The
Borrower shall procure that all moneys payable in respect of the Earnings
of the Vessel shall be paid to the Earnings Account free from
Encumbrances. Unless and until an Event of Default shall occur (whereupon
the provisions of Clause 11.3 shall be applicable) no monies shall be
withdrawn from the Earnings Account save as hereinafter
provided:
|
|
(i)
|
first
: in payment of any and all
sums whatsoever due and payable to the Bank hereunder (such sums to be
paid in such order as the Bank may in its sole discretion
elect);
|
|
(ii)
|
second:
during
each month of the Security Period (but by no later than, in the case of
the first such month, the date falling thirty (30) days after the Drawdown
Date and, in the case of each subsequent month, the same date of that
month), the Borrower shall cause to be transferred from the Earnings
Account to the Retention Account of the aggregate amount of the Earnings
of the Vessel received in the Earnings Account during the preceding
month:
|
|
aa)
|
one
sixth (1/6
th
)
of the amount of the Repayment Instalment specified in Clause 4.1 falling
due for payment on the next following Repayment Date;
and
|
|
bb)
|
the
relevant fraction of the amount of interest on the Loan falling due on the
next due date for payment of interest under this
Agreement.
|
|
|
The expression "relevant fraction" in relation to an amount of interest on the Loan falling due for payment means a fraction (which shall be notified by the Bank to the Borrower at the beginning of each Interest Period) where the numerator is always one and where the denominator shall always be three except in the case of an Interest Period of less than three months, in which case the denominator shall be the number of months comprised in such Interest Period; and |
|
(iii)
|
thirdly:
any
balance shall be released to the
Borrower.
|
|
(b)
|
If
the aggregate amount of the Earnings of the Vessel received in the
Earnings Account is insufficient in any month for the required transfer to
be made from the Earnings Account to the Retention Account in accordance
with Clause 11.5(a), the Borrower shall make up the amount of such
insufficiency on demand from the Bank, but, without prejudice to its right
to make such demand, the Bank may elect to make up the whole or any part
of such insufficiency by increasing the amount of any transfer to be made
in accordance with Clause 11.5(a)(ii) from the aggregate amount of such
Earnings received in the next or subsequent
months.
|
|
(c)
|
Until
the occurrence of an Event of Default (or an event which, with the giving
of notice and/or lapse of time or other applicable condition, might
constitute an Event of Default), the Bank shall on each Repayment Date and
on each due date for the payment of interest under this Agreement apply in
accordance with the provisions of Clause 11.5 (a) the relevant part of the
balance then standing to the credit of the Retention Account as shall be
required to make payment of the Repayment Instalment specified in Clause
4.1 then due under the terms of this Agreement or payment of interest then
due under the terms of this Agreement and such transfer shall constitute a
pro tanto satisfaction of the Borrower's obligations to pay such repayment
instalment or interest (as the case may be) then due under this
Agreement.
|
|
(d)
|
Any
amounts for the time being standing to the credit of the Retention Account
shall bear interest at the rate from time to time offered by the Bank to
its customers for Dollar deposits of similar amounts and for periods
similar to those for which such amounts are likely to remain standing to
the credit of the Retention Account. Such interest shall, provided that
the foregoing provisions of this Clause 11.5 shall have been complied with
and provided that no Event of Default (or event which, with the giving of
notice and/or lapse of time or other applicable condition, might
constitute an Event of Default) shall have occurred, be released to the
Borrower.
|
|
(e)
|
Nothing
herein contained shall be deemed to affect the absolute obligation of the
Borrowers to pay interest on and to repay the Loan as provided in Clauses
3 and 4 or shall constitute a manner or postponement
thereof.
|
|
(f)
|
The
Borrower hereby irrevocably authorises the Bank to make from the Earnings
Account any and all above payments and repayments as and when the same
fall due or at any time thereafter.
|
|
(g)
|
The
Borrower will comply with any written requirement of the Bank from time to
time as to the location or re-location of the Earnings Account and the
Retention Account (or either of them) and will from time to time enter
into such documentation as the Bank may require in order to create or
maintain in favour of the Bank an Encumbrance in the Earnings Account and
the Retention Account, all at cost and expense of the
Borrowers.
|
|
(h)
|
The
Borrower hereby covenants with the Bank that the Earnings Account, the
Retention Account and any moneys therein shall not be charged, assigned,
transferred or pledged nor shall there be granted by the Borrower or
suffered to arise any third party rights over or against the whole or any
part of the Earnings Account other than in favour of the
Bank.
|
|
(i)
|
The
Earnings Account shall be operated in accordance with the Bank's usual
terms and conditions (full knowledge of which the Borrower hereby
acknowledges) and subject to the Bank's usual charges levied on such
accounts and/or transactions conducted on such accounts (as from time to
time notified by the Bank to the
Borrower).
|
|
(j)
|
The
Borrower hereby warrants that sufficient monies to meet the next Repayment
Instalment plus interest thereon will be accumulated each and every month
in the Retention Account.
|
|
(k)
|
After
the occurrence of an Event of Default the balance (if any) including any
accrued interest standing to the credit of the Earnings Account and the
Retention Account shall be applied in accordance with the provisions of
Clause 11.3.
|
|
(1)
|
Upon
payment in full of all principal, interest and all other amounts due to
the Bank under the terms of this Agreement and the other Security
Documents, any balance then standing to the credit of the Retention
Account and/or the Earnings Account shall be released and paid to the
Borrower or to whomsoever else may be entitled to receive such
balance.
|
|
(a)
|
the
cost to the Bank of making the Commitment or any part thereof or
maintaining or funding the Loan is increased or an additional cost on the
Bank is imposed; and/or
|
|
(b)
|
subject
the Bank to Taxes or the basis of Taxation (other than Taxes or Taxation
on the overall net income of the Bank) in respect of any payments to the
Bank under this Agreement or any of the other Security Documents is
changed; and/or
|
|
(c)
|
the
amount payable or the effective return to the Bank under any of the
Security Documents is reduced;
and/or
|
|
(d)
|
the
Bank's rate of return on its overall capital by reason of a change in the
manner in which it is required to allocate capital resources to the Bank's
obligations under any of the Security Document is reduced;
and/or
|
|
(e)
|
require
the Bank to make a payment or forgo a return on or calculated by
references to any amount received or receivable by it under any of the
Security Documents is required;
and/or
|
|
(f)
|
require
the Bank to incur or sustain a loss (including a loss of future potential
profits) by reason of being obliged to deduct all or part of the
Commitment or the Loan from its capital for regulatory
purposes,
|
|
(a)
|
Language
|
|
(b)
|
Certification of
documents
|
|
(c)
|
Certification of
signature
|
|
(a)
|
be
in writing delivered personally or be first-class prepaid letter (airmail
if available), or shall be served through a process server or subject to
Clause 10.7 by fax;
|
|
(b)
|
be
deemed to have been received, subject as otherwise provided in this
Agreement or the relevant Security Document, in the case of fax, at the
time of dispatch as per transmission report (provided that if the date of
despatch is not a business day in the country of the addressee it shall be
deemed to have been received at the opening of business on the next such
business day), and in the case of a letter when delivered or served
personally or five (5) days after it has been put into the post;
and
|
|
(c)
|
be
sent:
|
|
(a)
|
Each
of the parties hereto agrees and undertakes to keep confidential any
documentation and any confidential information concerning the business,
affairs, directors or employees of the other which comes into its
possession in connection with this Agreement and not to use any such
documentation, information for any purpose other than for which it was
provided.
|
|
(b)
|
The
Borrower acknowledges and accepts that the Bank may be required by law,
regulation or regulatory requirement or any request of any central bank or
any court order to disclose information and deliver documentation relating
to the Borrower and the transactions and matters in relation to this
Agreement and/or the other Security Documents to governmental or
regulatory agencies and
authorities.
|
|
(c)
|
The
Borrower acknowledges and accepts that in case of occurrence of any of the
Events of Default the Bank may disclose information and deliver
documentation relating to the Borrower and the transactions and matters in
relation to this Agreement and/or the other Security Documents to third
parties to the extent that this is necessary for the enforcement or the
contemplation of enforcement of the Bank's rights or for any other purpose
for which in the opinion of the Bank, such disclosure would be useful or
appropriate for the interests of the Bank or otherwise and the Borrower
expressly authorises any such disclosure and
delivery.
|
|
(d)
|
The
Borrower acknowledges and accepts that the Bank may be prohibited from
disclosing information to the Borrower by reason of law or duties of
confidentiality owed or to be owed to other
persons.
|
|
(e)
|
The
Borrower shall be entitled to disclose information and deliver
documentation relating to this Loan Agreement and the Security Documents
to third parties including the Borrower's consultants and lawyers to the
extent that it is necessary for the enforcement of the Borrower's rights
or protection of Borrower's interests under the Loan
Agreement.
|
|
(a)
|
For
the exclusive benefit of the Bank, the Borrower hereby (i) irrevocably
submits to the non exclusive jurisdiction of the Courts of Piraeus in
Greece and (ii) agrees that any summons, writ, judicial or extra-judicial
notice, protest, payment order, order for payment, order for enforcement,
announcement of claim or other legal process issued against it in Greece
shall be served upon the Process Agent, who is hereby authorised to accept
such service, which shall be deemed to be good service on the
Borrower.
|
|
(b)
|
The
submission to the jurisdiction of the Courts of Piraeus shall not (and
shall not be construed so as to) limit the right of the Bank to take
proceedings against the Borrower in the courts of any other jurisdiction
nor shall the taking of proceedings in any one or more jurisdictions
preclude the taking of proceedings in any other jurisdiction, whether
concurrently or not.
|
|
(c)
|
The
parties further agree that subject to sub-Clause 16.2(b) the Courts of
Piraeus shall have exclusive jurisdiction to determine any claim which the
Borrower may have against the Bank arising out of or in connection with
this Agreement and the Borrower hereby waives any objections to
proceedings with respect to this Agreement in such courts on the grounds
of venue or inconvenient forum.
|
16.4
|
In
this Clause 16
"proceedings"
means
proceedings of any kind, including an application for a provisional or
protective measure.
|
(a)
|
no
event or circumstance has occurred and is continuing which constitutes a
Default;
|
(b)
|
the
representations and warranties contained in Clause 6 of the Loan Agreement
and the representations and warranties contained in each of the other
Security Documents are true and correct at the date hereof as if made with
respect to the facts and circumstances existing at such
date;
|
(c)
|
the
borrowing to be effected by the drawing down of the Commitment will be
within our corporate powers, has been validly authorised by appropriate
corporate action and will not cause any limit on our borrowings (whether
imposed by statute, regulation, agreement or otherwise) to be exceeded;
and
|
(d)
|
to
the best of our knowledge and belief there has been no material adverse
change in our financial position or in the consolidated financial position
of ourselves and the other Security Parties from that described by us to
the Bank in the negotiation of the Loan
Agreement.
|
1.1
|
Words
and expressions used in this Schedule shall have the meanings given
thereto in the agreement to which this Schedule is attached and the
following expressions shall have the meanings listed
below:
|
2.1
|
The
insurance which must be effected and maintained in accordance with the
provisions of the agreement to which these Insurance Requirements are
attached should be in the name of the Owner and as
follows:
|
|
(a)
|
Hull and
Machinery
|
insurance against fire and usual marine risks on an agreed value basis, on a full cover/all risks basis according to English or American Hull Clauses with a reasonable deductible and upon such terms as shall from time to time be approved in writing by the Bank; and |
|
(b)
|
War Risks
Insurance
|
insurance against War risks according to the London Institute War Clauses, on an agreed value basis attaching also the so called war protection clauses. In this case crew war liabilities insurance shall also have to be effected separately; and |
|
(c)
|
Increased
Value
|
increased Value insurance (Total Loss only, including Excess Liabilities) as per the applicable English or American Institute Clauses (Disbursement/Increased Value/ Excess Liabilities) up to an amount not exceeding the Insurance Amount specified in Clause 3.3 below; and |
|
(d)
|
Protection and
Indemnity
|
insurance against protection and indemnity risks for the full value and tonnage of the vessel insured (as approved in writing by the Bank) according to the relevant rules and deductibles provided thereof for all risks including Pollution (and if the vessel is passenger ship including liability towards third parties which is not covered by the War Risk Insurance) insured by P+I Clubs, members of the International Group of Protection and Indemnity Associations. If any risks are excluded or the deductibles as provided by the rules have been altered, the written consent of the Bank shall have to be previously required. In case that crew liabilities (including without limitation loss of life, injury or illness) have been entirely excluded from the association cover or insured on a deductible excess basis, (always subject to the prior written consent of the Bank) such liabilities shall have to be further insured separately with other underwriters acceptable to the Bank and upon such terms as shall from time to time be approved in writing by the Bank; and |
|
(e)
|
FD & D
Insurance
|
(If so required by the Bank, at its absolute discretion, at any time throughout the Security Period) Freight, Demurrage and Defence insurance as per the terms and conditions of a mutual club or association acceptable to the Bank; and |
|
(f)
|
Pollution Liability
Insurance
|
an extra insurance in respect of excess Oil Pollution Liability (including -if the vessel insured is a tanker- the Civil Liability Convention certificate) including full cover of pollution risks for the amount up to the maximum commercially available limit and upon such terms as shall be commercially available and accepted by the Bank; and |
|
(g)
|
USA Pollution Risk
Insurance
|
(in case that the vessel is scheduled to operate within or nearby USA jurisdiction) to cover and keep such vessel covered with an extra insurance in respect of oil pollution liability for an amount and upon such terms as required by international and national law regulations and shall from time to time be required by the Bank; and |
|
(h)
|
Mortgagee's Interest
Insurance
|
Mortgagee's Interest Insurance which shall be effected by the Bank in its name but at the expense of the Borrower and in an amount equal to 115% of the amount of the Loan including Mortgagee's asset protection (pollution) cover or other similar insurance in respect of any pollution claims against the Vessel under the so called "German wording" for 360 days or upon such terms as shall from time to time be determined by the Bank; and |
|
(i)
|
Other
Insurance
|
insurance in respect of such other matters of whatsoever nature and howsoever arising in respect of which the Bank would at any time require at its discretion the vessel to be insured. |
3.
|
TERMS
AND OBLIGATIONS FOR EFFECTING AND MAINTAINING
INSURANCES
|
3.1
|
The
Insurances to be effected in such currency as the Bank may approve and
through the Approved Brokers (other than the mortgagee's interest
insurance which shall be effected through brokers nominated by the Bank)
and with such insurance companies and/or underwriters as shall from time
to time be approved in writing by the Bank, provided however that the
insurances against war risks, protection and indemnity, FD & D cover
or other mutual insurance risks may be effected by the entry of the vessel
with such war, protection and indemnity or other mutual insurance
associations as shall from time to time be approved in writing by the
Bank.
|
3.2
|
The
Insurances to be effected and maintained free of cost and expense to the
Bank and in the sole name of the Owner or, if so required by the Bank, in
the joint names of the Owner and the Bank (but without liability on the
part of the Bank for premiums or calls). All insurances to be in form and
substance and under terms satisfactory to the Bank and with insurers
acceptable to the Bank.
|
3.3
|
Unless
otherwise agreed in writing by the
Bank:
|
|
(a)
|
The
amount in respect of which the Insurances should be effected shall be an
amount (Insurance Amount) which will be (aa) in respect of Hull and
Machinery Insurance the greater of the market value of the vessel insured
for the time being and 130% of an amount (the "Amount of Debt") equal to
(i) the Loan if the agreement to which these Insurance Requirements are
attached is a Loan Agreement or (ii) the Maximum Limit of the Facility if
the agreement to which these Insurance Requirements are attached is an
Overdraft Facility or a Facility for Issue of Guarantees or Letters of
Credit; and (bb) in respect of Mortgagee's Interest Insurance 110% of the
Amount of Debt.
|
|
(b)
|
In
case that the Amount of Debt is secured by more than one vessel the above
percentages should be covered by the aggregate of the Insurances in
respect of all such vessels.
|
|
(c)
|
In
case that the vessel insured secures by its Insurances Amounts of Debt
under more than one agreement then the above percentages apply to the
aggregate of all the Amounts of Debt under all the
agreements.
|
3.4
|
Any
person which is obliged under the agreement to which these Insurance
Requirements are attached to effect and maintain the Insurances, it will
be obliged and it hereby undertakes, jointly and severally with any other
person having the same obligation to (and will ensure that the Owner, if
it is a different person shall):
|
|
(a)
|
procure
and ensure that the Approved Brokers and/or the Club Managers, as the case
may be, shall send to the Bank a letter of undertaking in respect of the
Insurances in form and substance satisfactory to the Bank and Notice of
Cancellation as per Clause 4(d) below. The Approved Brokers' Letter of
Undertaking shall be compatible with the form recommended by Lloyd's
Insurance Brokers Committee, or any subsequent LIBC form. Such brokers to
further undertake to give immediate notice of any insurance being subject
to the Condition Survey Warranty (J.H.II5) and/or Structural Conditions
Warranty (J.H.722) and/or the Classification Clause (Hulls) 29/6/89, 30
days prior to the attachment date of any insurance bearing any of these
warranties.
|
|
(b)
|
(if
any of the Insurances form part of a fleet cover), procure that the
Approved Brokers shall undertake to the Bank that they shall neither set
off against any claims in respect of the vessel insured any premiums due
in respect of other vessels under such fleet cover or any premiums due for
other insurances, nor cancel the insurance for reasons of non-payment of
premiums for other vessels under such fleet cover or of premiums for such
other insurances, and shall undertake to issue a separate policy in
respect of the vessel insured if and when so requested by the
Bank;
|
|
(c)
|
punctually
pay all premiums, calls, contributions or other sums payable in respect of
all Insurances and produce all relevant receipts or other evidence of
payment when so required by the
Bank;
|
|
(d)
|
at
least fourteen (14) days before the Insurances expire, notify the Bank of
the names of the brokers and/or the war risks and protection and indemnity
risks associations proposed to be employed by the Owner for the purposes
of the renewal of such Insurances and of the amounts in which such
Insurances are proposed to be renewed and the risks to be covered and,
subject to compliance with any requirements of the Bank under the
Insurance Requirements, procure that appropriate instructions for the
renewal of such Insurances on the terms so specified are given to the
Approved Brokers and/or to the approved war risks and protection and
indemnity risks associations at least ten (10) days before the relevant
Insurances expire, and that the Approved Brokers and/or the approved war
risks and protection and indemnity risks associations will at least seven
(7) days before such expiry (or within such shorter period as the Bank may
from time to time agree) confirm in writing to the Bank as and when such
renewals have been effected in accordance with the instructions so
given;
|
|
(e)
|
arrange
for the execution and delivery of such guarantees or indemnities as may
from time to time be required by any protection and indemnity or war risks
association;
|
|
(f)
|
deposit
with the Approved Brokers (or procure the deposit of) all slips, cover
notes, policies, certificates of entry or other instruments of insurance
from time to time issued and procure that the interest of the Bank shall
be endorsed thereon by incorporation of the relevant Loss Payable Clause
and by means of a notice of assignment (signed by the Owner) in the form
set out in Paragraph 4 of this Schedule or in such other form as may from
time to time be agreed in writing by the Bank, and that the Bank shall be
furnished with pro forma copies thereof and a letter or letters of
undertaking from the Approved Brokers in such form as shall from time to
time be required by the Bank;
|
|
(g)
|
procure
that any protection and indemnity and/or war risks associations and/or
Hull and Machinery and/or any other insurance company or underwriters in
which the vessel insured is for the time being entered and/or insured
shall endorse the relevant Loss Payable Clause on the relevant certificate
of entry or policy and shall furnish the Bank with a copy of such
certificate of entry or policy and a letter or letters of undertaking in
such form as shall from time to time be required by the
Bank;
|
|
(h)
|
(if
so requested by the Bank, but at the cost of the Owner) furnish the Bank
from time to time with a detailed report signed by an independent firm of
marine insurance brokers appointed by the Bank dealing with the Insurances
maintained on the vessel insured and stating the opinion of such firm as
to the adequacy thereof;
|
|
(i)
|
do
all things necessary and provide all documents, evidence and information
to enable the Bank to collect or recover any moneys which shall at any
time become due in respect of the
Insurances;
|
|
(j)
|
ensure
that the vessel insured shall not be employed otherwise than in conformity
with the terms of the Insurances (including any warranties express or
implied therein) without first obtaining the consent of the insurers to
such employment and complying with such requirements as to extra premium
or otherwise as the insurers may
prescribe;
|
|
(k)
|
apply
all sums receivable under the Insurances which are paid to the Owner in
accordance with the Loss Payable Clauses in repairing all damage and/or in
discharging the liability in respect of which such sums shall have been
received; and
|
(1)
|
(in
case that the vessel is scheduled to operate or operates within or nearby
USA jurisdiction) make all the Protection & Indemnity Club US Voyage
Quarterly Declarations for each quarter in time and send copies of same to
the Bank.
|
(m)
|
Fleet
Cover is permitted only subject to the prior written approval of the Bank,
to the conditions set out in 3.4(b) above and the Bank's prior express
written approval of fleet aggregate
deductibles.
|
4.
|
LOSS PAYABLE CLAUSES
AND CANCELLATION CLAUSE
|
|
(a)
|
all
claims hereunder in respect of an actual or constructive or compromised or
arranged total loss, and all claims in respect of a major casualty (that
is to say any casualty the claim in respect of which exceeds the Major
Casualty Amount inclusive of any deductible shall be paid in full to the
Mortgagee or to its order; and
|
|
(b)
|
all
other claims hereunder shall be paid in full to the Owner or to its order,
unless and until the Mortgagee shall have notified the insurers hereunder
to the contrary, whereupon all such claims shall be paid to the Mortgagee
or to its order.
|
4.2
|
Notice
of Cancellation
|
|
(a)
|
immediately
of any material changes which are proposed to be made in the terms of the
Insurances or if the insurers cease to be insurers for any purposes
connected with the Insurances;
|
|
(b)
|
not
later than fourteen (14) days prior to the expiry of any of the Insurances
if instructions have not been received for the renewal thereof and, in the
event of instructions being received to renew, of the details
thereof;
|
|
(c)
|
immediately
of any instructions or notices received by insurers with regard to the
cancellation or invalidity of any of the Insurances aforesaid;
and
|
|
(d)
|
immediately
if the insurers give notice of their intention to cancel the Insurances,
provided that the insurers will not exercise any rights of cancellation by
reason of unpaid premiums without giving the Bank fourteen (14) days, from
the receipt of
such notice in which to remit
the sums
due.
|
4.3
|
Notice
of Assignment
|
|
(a)
|
the
Corporate Guarantor's Corporate Leverage ratio in relation to financial
period 31.01. [•] to 31.12. [•], during such period is [•];
|
|
(b)
|
the
Guarantor's minimum Corporate Liquidity is, in relation to the said
financial period, in excess of USD [•] (say United States Dollars
[•])
|
SIGNED
by
|
)
|
||
Mrs.
Eirini Alexandropoulou
|
)
|
||
for
and on behalf of
|
)
|
||
JAPAN
I SHIPPING COMPANY LIMITED
|
)
|
/s/ Eirini Alexandropoulou | |
of
Liberia, in the presence of:
|
)
|
Attorney-in-Fact | |
|
|
|
|
/s/ Angela Arcadis |
|
|
|
Witness: | |||
Name: Angela Arcadis | |||
Address: 13, Defteras Merarchias Street | |||
Pireas, Greece | |||
Occupation: Attorney-at-law | |||
|
|
||
|
|
SIGNED
by
|
)
|
||
Mr.
Serafeim Kriempardis and
|
)
|
/s/ Serafeim Kriempardis | |
Mrs. Christina Margelou | ) | Attorney-in-fact | |
for
and on behalf of
|
)
|
||
EMPORIKI
BANK OF GREECE S.A.
|
)
|
/s/ Christina Margelou | |
in
the presence of:
|
)
|
Attorney-in-Fact | |
|
|
|
|
/s/ Angela Arcadis |
|
|
|
Witness: | |||
Name: Angela Arcadis | |||
Address: 13, Defteras Merarchias Street | |||
Pireas, Greece | |||
Occupation: Attorney-at-law | |||
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Clause |
Page
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1
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Definitions
|
1
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2
|
Agreement
of the Bank
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2
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3
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Amendments
to Principal Agreement
|
2
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4
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Representations
and warranties
|
2
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5
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Conditions
|
4
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6
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Security
Documents
|
5
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7
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Expenses
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5
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8
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Miscellaneous
and notices
|
5
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9
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Law
and jurisdiction
|
5
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Schedule
1 Form of Supplemental Letter
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7
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Schedule
2 Form of Mortgage Addendum
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8
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Part
(a) Dauntless Mortgage Addendum
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9
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Part
(b) loannis P Mortgage Addendum
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10
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Schedule
3 Form of Amended and Restated Loan Agreement
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11
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(1)
|
TOP SHIPS INC.
(formerly
known as Top Tankers Inc.) with its principal place of business at 1, Vas.
Sofias & Meg. Alexandrou Str., 151 24 Maroussi, Greece (the
"Borrower");
and
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(2)
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THE ROYAL BANK OF SCOTLAND plc,
acting for the purposes of this Agreement through its office at the
Shipping Business Centre, 5-10 Great Tower Street, London, EC3P 3HX,
England (the
"Bank").
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(A)
|
this
Agreement is supplemental to a facilities agreement dated 1 November 2005
(the
"Original
Agreement")
made between (1) the Borrower and (2) the Bank as supplemented and
amended by a first supplemental agreement dated 21 December 2006 (the
"First Supplemental
Agreement")
and a second supplemental agreement dated 22 January 2008 (the
"Second
Supplemental Agreement"),
each made between (1) the Borrower and (2) the Bank (the Original
Agreement as supplemented and amended by the First Supplemental Agreement
and the Second Supplemental Agreement and as further supplemented and
amended from time to time, the
"Principal Agreement")
pursuant to which the Bank agreed to make a term loan facility of
up to $195,656,899.82 and a revolving credit facility of up to
$350,000,000 available to the Borrower upon the terms and conditions set
out in the Principal Agreement;
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(B)
|
pursuant
to clause 2.4 of the Principal Agreement the Borrower has requested that a
part of Facility B be drawndown for the purposes of financing part of the
second contract instalments payable under the Contracts relating to the
Additional Ships which are newbuildings with hull numbers 5-1025, S-1026,
S-1027, S-1029, S-1031 and S-1033 (the
"Newbuildings");
and
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(C)
|
the
Bank has agreed to the Borrower's request to make available six Advances
under Facility B (one Advance per Newbuilding) each in the amount of
$5,000,000 subject to the terms of the Principal Agreement including,
without limitation, the satisfaction of all relevant conditions precedent
and subject to the amendment of the Principal Agreement in the manner set
out in this Agreement.
|
2.1 |
The
Bank, relying upon the representations and warranties on the part of the
Borrower
contained
in clause 4, agrees with the Borrower that, subject to the terms and
conditions of this Agreement and in particular, but without prejudice to
the generality of the foregoing, fulfilment on or before 26 March 2008 of
the conditions contained in clause 5 the Bank agrees to the amendment of
the Principal Agreement on the terms set out in clause
3.
|
5.1.5
|
evidence
that the Borrower and each of the other Security Parties have obtained all
consents and authorisations necessary to enable each of them to enter into
this Agreement (in the case of the Borrower) and the Supplemental Letters
(in the case of the Security Parties) and all documents and other
instruments to be executed by each of them in connection therewith or
pursuant thereto;
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5.1.6
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evidence
that the Borrower, each Owner and the Manager are in good standing under
the laws of the Marshall
Islands;
|
5.1.7
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evidence
that the Mortgage Addenda have been properly and validly executed and
registered against the relevant Ship through the
Registry;
|
5.1,8
|
a
legal opinion in relation to the laws of the Marshall Islands in favour of
the Bank confirming (inter alia) the due execution of this Agreement, the
Supplemental Letters and the Mortgage Addenda;
and
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5.1.9
|
an
original or certified true copy of a letter from the Borrower's agent for
receipt of service of proceedings accepting its appointment under this
Agreement as the Borrower's process
agent.
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5.2
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General
conditions precedent
|
The
agreement of the Bank referred to in clause 2 shall be further subject
to:
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|
5.2.1
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the
representations and warranties in clause 4 being true and correct on the
Effective Date as if each was made with respect to the facts and
circumstances existing at such time; and
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5.2.2
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no
Default having occurred and continuing on the Effective
Date.
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5.3
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Waiver
of conditions precedent
|
The
conditions specified in this clause 5 are inserted solely for the benefit
of the Bank and may be waived by the Bank in whole or in part with or
without conditions.
|
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6
|
Security
Documents
|
The
Borrower further acknowledges and agrees, for the avoidance of doubt,
that:
|
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6.1.1
|
each
of the Security Documents to which it is a party, and its respective
obligations thereunder, shall remain in full force and effect
notwithstanding the amendments made to the Principal Agreement by this
Agreement; and
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6.1.2
|
with
effect from the Effective Date, references to "the Agreement" or "the Loan
Agreement" in any of the Security Documents to which each is a party shall
henceforth be reference to the Principal Agreement as amended by this
Agreement and as from time to time hereafter amended.
|
7
|
Expenses
|
The
Borrower hereby undertakes to pay all legal and other expenses or
disbursements incurred by the Bank in the negotiation, preparation and
execution of this Agreement and in connection with the fulfilment of the
conditions specified in clause 5,
|
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8
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Miscellaneous
and notices
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8.1
|
Notices
|
The
provisions of clause 16.1 of the Principal Agreement shall extend and
apply to the giving or making of notices or demands hereunder as if the
same were expressly stated herein.
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8.2
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Third
Party Rights
|
No
term of this Agreement shall be enforceable pursuant to the Contracts
(Rights of Third Parties) Act 1999 by a person who is not a party to this
Agreement.
|
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8.3
|
Counterparts
|
This
Agreement may be executed in any number of counterparts and by the
different parties on separate counterparts, each of which when so executed
and delivered shall be an original but all counterparts shall together
constitute one and the same instrument.
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|
9
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Law
and jurisdiction
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9.1
|
Law
|
This
Agreement shall be governed by, and construed in accordance with, English
law.
|
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9.2
|
Submission
to jurisdiction
|
The
Borrower agrees, for the benefit of the Bank, that any legal action or
proceedings arising out of or in connection with this Agreement against
the Borrower or any of its assets may be brought in the English courts.
The Borrower irrevocably and unconditionally submits to the jurisdiction
of such courts and irrevocably designates, appoints and empowers Top
Tankers (U.K.) Limited at present of 8 Duke Street, London W1 U 3EW,
England to receive for it and on its behalf, service of process issued out
of the English courts in any such legal action or proceedings. The
submission to such jurisdiction shall not (and shall not be construed so
as to) limit the right of the Bank to take proceedings against the
Borrower
in
|
the
courts of any other competent jurisdiction nor shall the taking of
proceedings in any one or more jurisdictions preclude the taking of
proceedings in any other jurisdiction, whether concurrently or
not.
|
|
The
parties further agree that only the courts of England and not those of any
other State shall have jurisdiction to determine any claim which the
Borrower may have against the Bank arising out of or in connection with
this Agreement.
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Private
& Confidential
|
As
amended and restated by a Supplemental Agreement dated 26 March
2008
Dated
1 November 2005
_____________________
|
TOP SHIPS INC.
(1)
and
THE ROYAL BANK OF SCOTLAND
plc (2)
|
____________________________
Term
Loan and
Revolving
Credit Facility
of
originally US$545,656,899.82
_____________________________
|
1
|
Purpose
and definitions
|
1
|
2
|
The
Facilities
|
15
|
3
|
Interest
and Interest Periods
|
18
|
4
|
Repayment,
prepayment and reborrowing
|
20
|
5
|
Commitment
commission, fees and expenses
|
24
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6
|
Payments
and taxes; accounts and calculations
|
25
|
7
|
Representations
and warranties
|
26
|
8
|
Undertakings
|
31
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9
|
Conditions
|
43
|
10
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Events
of Default
|
45
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11
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Indemnities
|
49
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12
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Unlawfulness
and increased costs
|
50
|
13
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Security
and set off
|
51
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14
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Accounts
|
52
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15
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Assignment,
transfer and lending office
|
54
|
16
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Notices
and other matters
|
55
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17
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Governing
law and jurisdiction
|
56
|
Schedule
1 Part 1 - Initial Ships
|
57
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Part
1 - Initial Ships
|
57
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Part
2 - Additional Ship Selection Criteria
|
59
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|
Part
3 - Maximum amount of Intra-Group Loan per Initial Ship
|
60
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|
Part
4 - Details of Initial Owners
|
61
|
Schedule
2 Form of Drawdown Notice
|
62
|
|
Schedule
3 Documents and evidence required as conditions precedent to the
Commitment
|
63
|
|
Schedule
4 Additional Cost
|
72
|
|
Schedule
5 Form of Compliance Certificate
|
73
|
|
Schedule
6 Master Swap Agreement and Novation Agreement
|
74
|
|
Schedule
7 Form of Master Swap Agreement Security Deed
|
75
|
|
Schedule
8 Form of Intra-Group Loan Agreements
|
76
|
|
Schedule
9 Form of Assignment of Intra-Group Loan Agreements
|
77
|
|
Schedule
10 Form of Owner’s Guarantee
|
78
|
|
Schedule
11 Forms of Mortgages
|
79
|
Part
1 - Form of Cyprus Mortgage
|
79
|
|
Part
2 - Form of Liberian/Marshall Islands Mortgage
|
80
|
Schedule
12 Form of Deed of Covenant
|
81
|
|
Schedule
13 Forms of General Assignments
|
82
|
Part
1 - Form of Cyprus General Assignment
|
82
|
|
Part
2 - Form of Liberian/Marshall Island General Assignment
|
83
|
Schedule
14 Form of Operating Accounts Charge
|
84
|
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Schedule
15 Form of Manager’s Undertaking
|
85
|
(1)
|
TOP SHIPS INC.
as
borrower (the “
Borrower
”);
and
|
(2)
|
THE ROYAL BANK OF SCOTLAND
plc
as bank (the “
Bank
”).
|
1
|
Purpose
and definitions
|
1.1
|
Purpose
|
1.2
|
Definitions
|
(a)
|
in
relation to an Initial Ship, the classification set out in Part 1 of
Schedule 1; and
|
(b)
|
in
relation to any Additional Ship, the highest class available to vessels of
its type with the relevant Classification
Society,
|
(a)
|
in
relation to an Initial Ship, the classification society set out in Part 1
of Schedule 1; and
|
(b)
|
in
relation to any Additional Ship, a classification society which is a
member of the International Association of Classification
Societies,
|
(a)
|
in
relation to any second-hand Additional Ship, the memorandum of agreement
or other contract for the sale and purchase of such Ship (to be in a form
and substance satisfactory to the Bank) made or (as the context may
require) to be made, between the Seller of such Ship and the relevant
Owner as buyer of such Ship; and
|
(b)
|
in
relation to any Additional Ship which is a newbuilding, a shipbuilding
contract made between the relevant Builder of such Additional Ship and the
relevant Additional Owner of that Additional Ship and/or the relevant
Seller of that Additional Ship (to be in a form and substance satisfactory
to the Bank) and as the same may subsequently be supplemented and/or
amended,
|
(a)
|
in
relation to Facility A, the period from and including the date of this
Agreement and ending on the Termination Date relative to Facility A;
and
|
(b)
|
in
relation to Facility B, the period from and including the date of this
Agreement and ending on the Termination Date relative to Facility
B,
|
(a)
|
any
and all enforcement, clean-up, removal or other governmental or regulatory
action or order or claim instituted or made pursuant to any Environmental
Law or resulting from a Spill; or
|
(b)
|
any
claim made by any other person relating to a
Spill;
|
(a)
|
from
any Fleet Vessel; or
|
(b)
|
from
any other vessel in circumstances
where:
|
(i)
|
any
Fleet Vessel or its owner, operator or manager may be liable for
Environmental Claims arising from the Spill (other than Environmental
Claims arising and fully satisfied before the date of this Agreement);
and/or
|
(ii)
|
any
Fleet Vessel may be arrested or attached in connection with any such
Environmental Claims;
|
(a)
|
in
connection with the construction of an Additional Ship, all reasonable
pre-delivery costs up to the Delivery Date of such Additional Ship which
have been approved by the Bank in its sole
discretion;
|
(b)
|
in
connection with the acquisition of an Additional Ship from a Seller, the
deposit payable in respect of such Additional Ship pursuant to the
relevant Contract in an amount approved by the Bank;
and
|
(c)
|
all
interest paid by the Borrower on the relevant Advance under clause 3 of
this Agreement up to the Delivery Date of such Additional
Ship;
|
(a)
|
in
relation to an Initial Ship, the flag state set out in Part 1 of Schedule
1
or
such other state or territory designated in writing by the Bank, at the
request of the Borrower or an Owner, as being the “
Flag State
” of that
Owner’s Ship for the purposes of the Security Documents;
or
|
(b)
|
in
relation to an Additional Ship any of the flag states as set out in Part 1
of Schedule 1, or such other state or territory designated in writing by
the Bank, at the request of the Borrower or the Owner, as being the “
Flag State
” of that
Owner’s Ship for the purposes of the Security
Documents;
|
|
(a)
|
up
until 26 March 2008 the margin listed in the following table which shall
be adjusted at each Margin Set
Date:
|
(a)
|
in
relation to an Initial Owner and the Borrower, the accounts with account
numbers as set out in Part 1 of Schedule 1;
and
|
(b)
|
in
relation to any Additional Owner, accounts of the Borrower and such Owner
opened or (as the context may require) to be opened by the Borrower and
such Owner with the Bank
|
(a)
|
in
relation to Facility A, 30 November 2005 and each of the dates falling at
six (6) monthly intervals thereafter up to and including the Final
Repayment Date relative to Facility A;
and
|
(b)
|
in
relation to Facility B, 30 November 2008 and each of the dates falling at
three (3) monthly intervals thereafter up to and including the Final
Repayment Date relative to Facility
B;
|
(a)
|
in
relation to
Dauntless
,
Endless
,
Faithful
,
Faultless
,
Limitless
,
Noiseless
,
Priceless
,
Taintless
and
Timeless
V.Ships Management Limited of Eaglehurst, Belmont Hill, Douglas, Isle of
Man;
|
(b)
|
in
relation to
Doubtless
,
Flawless
,
Spotless
and
Vanguard,
Hanseatic Shipping Co. Ltd of 284, Archbishop Makarios III Avenue,
Limassol, Cyprus; and
|
(c)
|
in
relation to
Soundless
and
Topless
,
Top Tanker Management Inc. with its registered address at Trust Company
Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands
MH96960,
|
(a)
|
in
relation to Facility A, 14 November 2005;
and
|
(b)
|
in
relation to Facility B, the earlier of (i) the date which falls ten (10)
years after the date of this Agreement and (ii) the Final Repayment
Date;
|
|
(a)
|
from
1 November 2005 up until 2 August 2006 the aggregate amount of three
hundred and fifty million Dollars
($350,000,000);
|
|
(b)
|
from
3 August 2006 up until 19 March 2008 the aggregate amount of one hundred
and fifty eight million Dollars ($158,000,000);
and
|
|
(c)
|
from
26 March 2008 the aggregate amount of one hundred and twenty three million
Dollars ($123,000,000) at the date of this
Agreement,
|
|
as
the same may be reduced on each Reduction
Date;
|
(a)
|
actual,
constructive, compromised or arranged total loss of such Ship;
or
|
(b)
|
the
Compulsory Acquisition of such Ship;
or
|
(c)
|
the
hijacking, theft, condemnation, capture, seizure, arrest, detention or
confiscation of such Ship (other than where the same amounts to the
Compulsory Acquisition of such Ship) by any Government Entity, or by
persons acting or purporting to act on behalf of any Government Entity,
unless such Ship be released and restored to the relevant Owner from such
hijacking, theft, condemnation, capture, seizure, arrest, detention or
confiscation within fifteen (15) days after the occurrence
thereof;
|
1.3
|
Headings
|
1.4
|
Construction
of certain terms
|
1.4.1
|
references
to clauses and Schedules are to be construed as references to
clauses of, and Schedules to, this Agreement and references to
this Agreement include its
Schedules;
|
1.4.2
|
references
to (or to any specified provision of) this Agreement or any other document
shall be construed as references to this Agreement, that provision or that
document as in force for the time being and as amended in accordance with
the terms thereof, or, as the case may be, with the agreement of the
relevant parties;
|
1.4.3
|
references
to a “
regulation
”
include any present or future regulation, rule, directive, requirement,
request or guideline (whether or not having the force of law) of any
agency, authority, central bank or government department or any
self-regulatory or other national or supra-national
authority;
|
1.4.4
|
words
importing the plural shall include the singular and vice
versa;
|
1.4.5
|
references
to a time of day are to London
time;
|
1.4.6
|
references
to a person shall be construed as references to an individual, firm,
company, corporation, unincorporated body of persons or any Government
Entity;
|
1.4.7
|
references
to a “
guarantee
”
include references to an indemnity or other assurance against financial
loss including, without limitation, an obligation to purchase assets or
services as a consequence of a default by any other person to pay any
Indebtedness and “
guaranteed
” shall be
construed accordingly; and
|
1.4.8
|
references
to any enactment shall be deemed to include references to such enactment
as re-enacted, amended or extended.
|
1.5
|
Contracts
(Rights of Third Parties) Act 1999
|
2
|
The
Facilities
|
2.1
|
Agreement
to lend
|
(a)
|
a
Dollar term loan facility in an aggregate amount equal to the Total
Facility A Commitment; and
|
(b)
|
a
Dollar revolving credit and term loan facility in an aggregate amount
equal to the Total Facility B
Commitment,
|
(c)
|
in
the aggregate principal sum of originally up to five hundred and forty
five million six hundred and fifty six thousand eight hundred and ninety
nine Dollars and eighty two cents ($545,656,899.82) and from 26 March 2008
up to one hundred and twenty three million Dollars
($123,000,000).
|
2.2
|
Drawdown
|
2.3
|
Facility
A
|
2.3.1
|
Facility
A shall be made in one Advance on a Banking Day falling within the
Drawdown Period.
|
2.3.2
|
Facility
A shall be made available solely for the purpose set out in
1.1(i).
|
2.3.3
|
The
Advance constituting Facility A shall be made in accordance with
clause 6.2 and the maximum amount of such Advance shall be
$195,656,899.82 or such other amount as may be agreed by the
Bank.
|
2.3.4
|
The
Advance constituting Facility A (together with the Advance constituting
the Initial Revolving Amount) shall be applied in refinancing each Initial
Ship in the amount set out alongside that Initial Ship in Part 3 of
Schedule 1.
|
2.4
|
Facility
B
|
2.4.1
|
Each
Advance of Facility B may only be made on Banking Days falling during the
Drawdown Period and the amount of each Advance of Facility B shall,
subject to the following provisions of this clause 2.4, be for such amount
as is specified in the Drawdown Notice of that
Advance.
|
2.4.2
|
The
Initial Revolving Amount of Facility B shall be made available in one
Advance solely for the purpose set out in 1.1(ii)(a) and shall be advanced
at the same time as the Advance constituting Facility A and shall when
aggregated with Facility A refinance the entire amount outstanding under
the Existing Loan Agreement.
|
2.4.3
|
Each
Advance of Facility B shall be made solely for the purpose set out in
clause 1.1(ii).
|
2.4.4
|
Each
Advance constituting part of Facility B shall be made in accordance with
clause 6.2 but so that:
|
(i)
|
Facility
B shall never exceed $350,000,000 up until 26 March 2008 and thereafter
shall never exceed $123,000,000;
and
|
(ii)
|
the
Initial Revolving Amount shall be up to $144,000,000 or such other amount
as agreed by the Bank.
|
2.4.5
|
No
part of Facility B (other than the Initial Revolving Amount to be made
available with the Advance constituting Facility A) shall be made
available unless the vessel which the relevant Additional Owner intends to
acquire using the relevant intra-group loan from the Borrower has been
approved by the Bank in its sole discretion as an Additional Ship, which
approval may only be granted by the Bank if the relevant vessel has met
all the Additional Ship Selection Criteria. In relation to the
acquisition by an Additional Owner of a vessel the Borrower shall be
required to follow the procedure set out
below:
|
(a)
|
if
the Borrower wishes to drawdown any part of Facility B the Borrower shall
first send to the Bank a request (the “
Request
”) which shall
include the information described below and, if so required by the
Bank, a copy of the inspection report for the relevant
vessel;
|
(b)
|
where
the Request relates to a second-hand vessel, the Request shall include the
following information:
|
(c)
|
where
the Request relates to a vessel which is a newbuilding, the Request shall
include the following information:
|
2.4.6
|
With
respect to any vessel to be financed under Facility B, the Bank will use
its best efforts to respond to any Request as soon as possible but in any
event within five (5) Banking Days of the receipt of the
Request.
|
2.4.7
|
No
Advance of Facility B shall:
|
(a)
|
exceed
whichever shall be the lesser of (i) the Contract Price of the Additional
Ship to be financed by way of such Advance of Facility B and (ii) the Fair
Market Value of the Additional Ship to be financed by way of such Advance
of Facility B and in the case where the Additional Ship is a newbuilding,
the Expected Project Costs approved by the Bank in its sole discretion;
nor
|
(b)
|
be
applied in financing any Additional Ship which has not been approved by
the Bank as an Additional Ship (the “
Approval
”) in accordance
with clauses 2.4.5 and 2.4.6
.
|
2.4.8
|
In
relation to an Additional Ship which is a newbuilding, Contract Instalment
Advances and a Delivery Date Advance for that Additional Ship shall be in
sums of up to the amounts set out in the relevant Contract and applied in
or towards payment of the instalment of the Contract Price for that
Additional Ship and may be made on any Banking Day falling within the
Drawdown Period relative to Facility B up to and in the case of the
Delivery Date Advance upon the Delivery Date for that Additional Ship
subject to the relevant instalment of the Contract Price for that
Additional Ship having become due and payable by the relevant Owner under
such Contract.
|
2.4.9
|
Any
Advance constituting a Contract Instalment Advance or a Delivery Date
Advance shall be applied in paying such relevant instalment of the
relevant Contract Price and shall be paid by the Bank to the relevant
Builder or, as the case may be, Seller and any Advance which is to be
applied in meeting Expected Project Costs approved by the Bank in its sole
discretion shall be paid by the Bank to the credit of the relevant
Operating Account as appropriate.
|
2.4.19
|
Each
Advance of Facility B shall be subject
to:
|
(a)
|
the
ratio of the Loan to the Fair Market Value of all the Mortgaged Ships not
exceeding 75% both prior to and immediately following the drawdown of the
relevant Advance of Facility B; and
|
(b)
|
the
aggregate of all Advances of Facility B drawndown at any relevant time
never exceeding the Total Facility B Commitment;
and
|
(c)
|
the
making of such Advance of Facility B not resulting in the Security Value
being less than the Security
Requirement.
|
2.4.11
|
The
parties hereby agree that from 26 March 2008 Facility A is cancelled and
no further Advances shall be made under Facility B other than those
Advances that the Bank has agreed to make for the purposes of financing
part of the second contract instalments payable under the Contracts
relating to the Additional Ships which are newbuildings with hull numbers
S-1025, S-1026, S-1027, S-1029, S-1031 and S-1033 (the “
Newbuildings
”). Subject
to the terms of this Agreement the Bank has agreed to make available one
Advance per Newbuilding each in the maximum sum of five million Dollars
($5,000,000).
|
2.5
|
Amount
of Advance
|
2.6
|
Expected
Project Costs
|
2.7
|
Availability
|
2.8
|
Termination
of Commitment
|
2.8.1
|
If
the Commitment is not drawn down in full by the end of the Drawdown
Period, the undrawn Commitment shall thereupon be automatically
cancelled.
|
2.8.2
|
The
Borrower shall upon three (3) Banking Days’ notice to the Bank be entitled
to permanently reduce or terminate any undrawn portion of Facility B
(being five million Dollars ($5,000,000) or any larger sum which is an
integral multiple of five million Dollars ($5,000,000)) without premium or
penalty.
|
2.9
|
Application
of proceeds
|
3
|
Interest
and Interest Periods
|
3.1
|
Normal
interest rate
|
3.1.1
|
Subject
to paragraph (i) of Part 5 of the Schedule to the Master Swap Agreement,
the Borrower shall pay interest on Facility A, Facility B or, as the case
may be the Loan in respect of each Interest Period relating thereto on
each Interest Payment Date (or, in the case of Interest Periods of more
than three (3) months, by instalments, the first instalment three (3)
months from the commencement of the Interest Period and the subsequent
instalments at intervals of three (3) months or, if shorter, the
period from the date of the preceding instalment until the Interest
Payment Date relative to such Interest Period) at the rate per annum
determined by the Bank to be the aggregate of (a) the relevant Margin, (b)
the Additional Cost and (c) LIBOR for such Interest
Period.
|
3.1.2
|
For
the purposes of this clause 3, the Bank shall on each Margin Set Date,
following the Bank’s determination of the Security Value, which
determination shall as between the Bank and the Borrower be conclusive,
advise the Borrower of the Margin payable in respect of Facility A,
Facility B or, as the case may be, the Loan during each quarter commencing
from the relevant Margin Set Date.
|
3.2
|
Selection
of Interest Periods
|
3.3
|
Determination of
Interest Periods
|
3.3.1
|
the
initial Interest Period in respect of the Advance constituting Facility A
and the Advance constituting the Initial Revolving Amount shall commence
on the date Facility A and the Advance constituting the Initial Revolving
Amount under the Loan Agreement are made and each subsequent Interest
Period of Facility A and the Advance constituting the Initial Revolving
Amount shall commence on the last day of the previous Interest Period
relating to Facility A and the Advance constituting the Initial
Revolving Amount;
|
3.3.2
|
the
initial Interest Period in respect of each Advance of Facility B (after
the Advance constituting the Initial Revolving Amount) shall commence on
the date of the making of that Advance and each subsequent Interest period
of each Advance shall commence on the last day of the previous Interest
Period relating to that Advance;
|
3.3.3
|
if
any Interest Period for any Advance and/or Facility A and/or Facility B
and/or the Loan would otherwise overrun a Final Repayment Date, then, in
the case of the Final Repayment Date, such Interest Period shall end on
such Repayment Date, and in the case of any other Repayment Date or
Repayment Dates (as the case may be) shall be divided into parts so that
there is one part in the amount of the repayment instalment due on each
Repayment Date falling during that Interest Period and having an Interest
Period ending on the relevant Repayment Date and another part in the
amount of the balance of the relevant Advance and/or Facility A and/or
Facility B and/or the Loan as the case may be having an Interest Period
ascertained in accordance with clause 3.2 and the other provisions of
this clause 3.3;
|
3.3.4
|
if
the Borrower fails to specify the duration of an Interest Period in
accordance with the provisions of clause 3.2 and this clause 3.3
such Interest Period shall have a duration of three (3) months or such
other period as shall comply with this
clause 3.3;
|
3.3.5
|
for
the avoidance of doubt, during the currency of any Transaction, Interest
Periods in respect of each Advance or, as the case may be, Facility A or,
as the case may be, Facility B or, as the case may be, the Loan shall
coincide with the payment dates set out in such Transaction and the rate
of interest shall coincide with the fixed rate of interest determined in
accordance with such Transaction;
and
|
3.3.6
|
following
consultation with the Borrower the Bank shall be entitled to require that
the Interest Periods relating to the Loan or any part thereof to be
consolidated.
|
3.4
|
Default
interest
|
3.5
|
Notification
of Interest Periods and interest
rate
|
3.6
|
Market
disruption; non-availability
|
3.6.1
|
If
and whenever, at any time prior to the commencement of any Interest
Period, the Bank shall have determined (which determination shall, in the
absence of manifest error, be
conclusive):
|
(a)
|
that
adequate and fair means do not exist for ascertaining LIBOR during such
Interest Period; or
|
(b)
|
that
deposits in Dollars are not available to the Bank in the London Interbank
Market in the ordinary course of business in sufficient amounts to fund
the Loan for such Interest Period;
|
3.6.2
|
During
the period of ten (10) days after any Determination Notice has been given
by the Bank under clause 3.6.1, the Bank shall certify an alternative
basis (the “
Substitute
Basis
”) for maintaining the Loan. The Substitute Basis
may (without limitation) include alternative interest periods, alternative
currencies or alternative rates of interest but shall include a margin
above the cost of funds including Additional Cost (if any) to the Bank
equivalent to the relevant Margin. Each Substitute Basis so
certified shall be binding upon the Borrower and shall take effect in
accordance with its terms from the date specified in the Determination
Notice until such time as the Bank notifies the Borrower that none of the
circumstances specified in clause 3.6.1 continues to exist whereupon
the normal interest rate fixing provisions of this Agreement shall
apply.
|
4
|
Repayment,
prepayment and reborrowing
|
4.1
|
Repayment
of Facility A
|
4.2
|
Repayment
of Facility B
|
4.2.1
|
Subject
always to the provisions of this clause 4.2 the Borrower shall repay that
part of the Loan forming Facility B (including without limitation the
Initial Revolving Amount) by twenty (20) instalments. One such
instalment shall be repaid on each of the Repayment Dates relative to
Facility B. Subject to the provisions of this Agreement the
amount of each such instalment shall be equal to the Facility B Repayment
Amount as determined by the Bank and notified to the
Borrower. For the avoidance of doubt as from 26 March 2008 (but
following the reduction of the Total Facility B Commitment to
one hundred and twenty three million Dollars ($123,000,000) pursuant to
clause 4.2.2 and subject to the Borrower drawing down the entire available
amount of Facility B) the amount of each of the first to the nineteenth
instalments shall be four million and fifty thousand Dollars ($4,050,000)
and the amount of the twentieth and final instalment shall be forty six
million and fifty thousand Dollars ($46,050,000) (comprising a repayment
instalment of four million and fifty thousand Dollars ($4,050,000) and a
balloon repayment in the amount of forty two million Dollars
($42,000,000).
|
4.2.2
|
The
Total Facility B Commitment shall be reduced by the sum of thirty five
million Dollars ($35,000,000) to one hundred and twenty three million
Dollars ($123,000,000) on 26 March 2008 and thereafter the Total Facility
B Commitment shall be reduced on each Reduction Date by a sum equal to
each of the Facility B Repayment Amounts referred to in clause 4.2.1 so
that on the Final Reduction Date the Total Facility B Commitment shall be
reduced to zero. The Committed Facility B Amount shall be
reduced on each Reduction Date by the same percentage amount as the Total
Facility B Commitment and to zero on the Final Reduction Date and the
Borrower shall on each Repayment Date relative to Facility B repay such
further amount as shall ensure that the aggregate of all Advances of
Facility B never exceed the Total Facility B Commitment or the Committed
Facility B Amount at any relevant
time.
|
4.3
|
Voluntary
prepayment
|
4.3.1
|
Prepayment
of the Loan
|
(a)
|
on
any Interest Payment Date relating to the part of the Loan being prepaid
together with any amounts payable under clause 11 and accrued
interest and commitment commission to the date of prepayment and any other
sums then payable under this Agreement and/or the Master Swap Agreement
and/or the other Security Documents or any of them in respect of the Loan;
and
|
(b)
|
at
any other time upon payment to the Bank
of:
|
(i)
|
accrued
interest to the date of prepayment;
and
|
(ii)
|
such
additional sum as the Bank in its absolute discretion shall determine to
be the loss, cost and expense incurred by the Bank, including in relation
to the Master Swap Agreement, as a result of the prepayment not being made
on an Interest Payment Date for any part of the Loan being prepaid;
and
|
(iii)
|
any
other sums then payable under this Agreement and/or the Master Swap
Agreement and/or the other Security Documents or any of them (including
loss of Margin on the amount prepaid to the end of the then current
Interest Period).
|
4.4
|
Master
Swap Agreement, Repayments and
Prepayments
|
4.4.1
|
Notwithstanding
any provision of the Master Swap Agreement to the contrary, in the case of
a prepayment of all or part of the Loan (including, without limit, upon a
Total Loss in accordance with clause 4.5 and under clause 8.4)
then subject to clause 4.4.2 the Bank shall be entitled but not
obliged (and, where relevant, may do without the consent of the Borrower,
where it would otherwise be required whether under the Master Swap
Agreement or otherwise) to amend, re-book, supplement, cancel, close out,
net out, terminate, liquidate, transfer or assign all or any part of the
rights, benefits and obligations created by any Transaction and/or the
Master
Swap Agreement and/or to obtain or re-establish any hedge or related
trading position in any manner and with any person the Bank in its
absolute discretion may determine and both the Bank’s and the Borrower’s
continuing obligations under any Transaction and/or the Master Swap
Agreement shall, unless agreed otherwise by the Bank, be calculated so far
as the Bank considers it practicable by reference to the amended repayment
Schedule for the Loan taking into account the fact that less than the
full amount of the Loan remains
outstanding.
|
4.4.2
|
If
following a prepayment under this Agreement and the Bank in its absolute
discretion agrees, following a written request of the Borrower, that the
Borrower may be permitted to maintain all or part of a Transaction in an
amount not wholly matched with or linked to all or part of the Loan, the
Borrower shall within ten (10) days of being notified by the Bank of such
requirement, provide the Bank with, or procure the provision to the Bank
of, such additional security as shall in the opinion of the Bank be
adequate to secure the performance of such Transaction, which additional
security shall take such form, be constituted by such documentation and be
entered into between such parties, as the Bank in its absolute discretion
may approve or require, and each document comprising such additional
security shall constitute a Credit Support
Document.
|
4.4.3
|
The
Borrower shall on the first written demand of the Bank indemnify the Bank
in respect of all losses, costs and expenses (including, but not limited
to, legal costs and expenses) incurred or sustained by the Bank as a
consequence of or in relation to the effecting of any matter or
transactions referred to in this
clause 4.4.
|
4.4.4
|
Notwithstanding
any provision of the Master Swap Agreement to the contrary, if for any
reason a Transaction has been entered into but the Loan is not drawn down
under this Agreement then, subject to clause 4.4.5, the Bank shall be
entitled but not obliged (and, where relevant, may do so without the
consent of the Borrower where it would otherwise be required whether under
the Master Swap Agreement or otherwise) to amend, re-book, supplement,
cancel, close out, net out, terminate, liquidate, transfer or assign all
or any part of the rights, benefits and obligations created by such
Transaction and/or the Master Swap Agreement and/or to obtain or
re-establish any hedge or related trading position in any manner and with
any person the Bank in its absolute discretion may
determine.
|
4.4.5
|
If
a Transaction has been entered into but the Loan is not drawn down under
this Agreement and the Bank in its absolute discretion agrees, following a
written request of the Borrower, that the Borrower may be permitted to
maintain all or part of a Transaction, the Borrower shall within ten (10)
days of being notified by the Bank of such requirement, provide the Bank
with, or procure the provision to the Bank of, such additional security as
shall in the opinion of the Bank be adequate to secure the performance of
such Transaction, which additional security shall take such form, be
constituted by such documentation and be entered into between such
parties, as the Bank in its absolute discretion may approve or require,
and each document comprising such additional security shall constitute a
Credit Support Document for the purposes of the Master Swap Agreement
and/or otherwise.
|
4.5
|
Prepayment
on Total Loss and sale
|
(a)
|
in
the case of an Initial Ship to make available the Advance constituting the
Facility A or the Advance constituting the Initial Revolving Amount for
such Initial Ship; or
|
(b)
|
in
the case of an Additional Ship to make that Advance of Facility B for such
Additional Ship
|
(a)
|
in
the case of the Initial Ships that part of the Advance constituting
Facility A or the Initial Revolving Amount as was applied in refinancing
the relevant Initial Ship and set out in Schedule 1, Part 3;
or
|
(b)
|
in
the case of the Additional Ships the relevant Advance of Facility B
applied in the financing of such Additional Ship;
or
|
(c)
|
such
greater proportion of the Loan as the Bank may in its sole discretion
determine to be prepaid but in any event such amount as shall ensure that
on the date of such prepayment the Security Value is not less than the
Security Requirement.
|
4.5.1
|
In
the case of an actual total loss of a Ship on the actual date and at the
time such Ship was lost or, if such date is not known, on the date on
which such Ship was last reported;
|
4.5.2
|
in
the case of a constructive total loss of a Ship, upon the date and at the
time notice of abandonment of a Ship is given to the insurers of a Ship
for the time being (provided a claim for total loss is admitted by such
insurers) or, if such insurers do not forthwith admit such a claim, at the
date and at the time at which either a total loss is subsequently admitted
by the insurers or a total loss is subsequently adjudged by a competent
court of law or arbitration tribunal to have
occurred;
|
4.5.3
|
in
the case of a compromised or arranged total loss, on the date upon which a
binding agreement as to such compromised or arranged total loss has been
entered into by the insurers of such
Ship;
|
4.5.4
|
in
the case of Compulsory Acquisition, on the date upon which the relevant
requisition of title or other compulsory acquisition occurs;
and
|
4.5.5
|
in
the case of hijacking, theft, condemnation, capture, seizure, arrest,
detention or confiscation of a Ship (other than where the same amounts to
Compulsory Acquisition of such Ship) by any Government Entity, or by
persons purporting to act on behalf of any Government Entity, which
deprives the relevant Owner of the use of such Ship for more than thirty
(30) days, upon the expiry of the period of thirty (30) days after the
date upon which the relevant hijacking, theft, condemnation, capture,
seizure, arrest, detention or confiscation
occurred.
|
4.6
|
Amounts
payable on prepayment
|
4.7
|
Notice
of prepayment; reduction of repayment
instalments
|
4.7.1
|
clause 4.3
shall be applied (a) in the case of Facility A first in reducing the
repayment instalments on a pro rata basis and then the balloon payment in
each case as set out in clause 4.1; and (b) in the case of Facility B
in reducing the repayment instalments under clause 4.2.1 on a pro rata
basis; and
|
4.7.2
|
clause
4.4 following the sale or Total Loss of any of the Ships shall be applied
first in reducing the repayment instalments of the Advance pursuant to
which the relevant Ship was financed or refinanced (including for the
avoidance of doubt the balloon payments) on a pro rata basis and
thereafter (and to the extent that the relevant Advance is repaid in full)
shall be applied to the extent required pursuant to clause 4.5 as between
all other Advances on a pro rata basis and in reducing the repayment
instalments of such other Advances on a pro rata
basis.
|
5
|
Commitment
commission, fees and expenses
|
5.1
|
Fees
|
5.1.1
|
on
the date of this Agreement an arrangement fee of one million thirty
thousand Dollars ($1,030,000);
|
5.1.2
|
quarterly
in arrears and at the end of the Drawdown Period, commitment commission
computed from the date of this Agreement at the rate of zero point three
five per cent (0.35%) per annum on the daily undrawn amount of the Loan;
and
|
5.2
|
Expenses
|
5.2.1
|
in
connection with the negotiation, preparation, execution and, where
relevant, registration of the Security Documents and of any amendment or
extension of or the granting of any waiver or consent under, any of the
Security Documents; and
|
5.2.2
|
in
contemplation of, or otherwise in connection with, the enforcement of, or
preservation of any rights under, any of the Security Documents, or
otherwise in respect of the moneys owing under any of the Security
Documents together with interest at the rate referred to in
clause 3.4 from the date on which such expenses were incurred to the
date of payment (as well after as before
judgment).
|
5.3
|
Value
added tax
|
5.4
|
Stamp
and other duties
|
6
|
Payments
and taxes; accounts and
calculations
|
6.1
|
No
set-off or counterclaim
|
6.2
|
Payment
by the Bank
|
6.3
|
Non-Banking
Days
|
6.4
|
Calculations
|
6.5
|
Certificates
conclusive
|
6.6
|
Grossing-up
for Taxes
|
6.7
|
Loan
account
|
7
|
Representations
and warranties
|
7.1
|
Continuing
representations and warranties
|
7.1.1
|
Due
incorporation
|
7.1.2
|
Corporate
power
|
7.1.3
|
Binding
obligations
|
7.1.4
|
No
conflict with other obligations
|
7.1.5
|
No
litigation
|
7.1.6
|
No
filings required
|
7.1.7
|
Choice
of law
|
7.1.8
|
No
immunity
|
7.1.9
|
Financial
statements correct and complete
|
7.1.10
|
Consents
obtained
|
7.1.11
|
No
money laundering
|
7.2
|
Initial
representations and warranties
|
7.2.1
|
Pari
passu
|
7.2.2
|
No
default under other Indebtedness
|
7.2.3
|
Information
|
7.2.4
|
No
withholding Taxes
|
7.2.5
|
No
Default
|
7.2.6
|
No
Default under any Contract or any Refund
Guarantee
|
7.2.7
|
No
Encumbrance in respect of pre-delivery
security
|
7.2.8
|
the
Ships
|
(a)
|
in
the absolute ownership of the relevant Owner who will on and after such
Drawdown Date be the sole, legal and beneficial owner of such
Ship;
|
(b)
|
registered
through the offices of the relevant Registry as a ship under the laws and
flag of the relevant Flag State;
|
(c)
|
operationally
seaworthy and in every way fit for service;
and
|
(d)
|
classed
with the relevant Classification free of all requirements and
recommendations of the relevant Classification
Society;
|
7.2.9
|
Ships'
employment
|
7.2.10
|
Freedom
from Encumbrances
|
7.2.11
|
Environmental
matters
|
(a)
|
all
Environmental Laws applicable to any Fleet Vessel have been complied with
and all consents, licences and approvals required under such Environmental
Laws have been obtained and complied with;
and
|
(b)
|
no
Environmental Claim has been made or threatened or pending against any
member of the Borrower’s Group or any Fleet Vessel and not fully
satisfied; and
|
(c)
|
there
has been no Environmental Incident;
|
7.2.12
|
No
material adverse change
|
7.2.13
|
Parent
company
|
7.2.14
|
Copies
true and complete
|
7.2.15
|
ISM
Code and ISPS Code
|
7.3
|
Repetition
of representations and warranties
|
7.3.1
|
On
and as of each Advance and (except in relation to the representations and
warranties in clause 7.2) on each Interest Payment Date the Borrower
shall (a) be deemed to repeat the representations and warranties in
clauses 7.1 (and so that the representation and warranty in
clause 7.1.9 shall for this purpose refer to the then latest audited
financial statements delivered to the Bank under clause 8.1) and 7.2
as if made with reference to the facts and circumstances existing on such
day and (b) be deemed to further represent and warrant to the Bank that
the then latest audited financial statements delivered to the Bank (if
any) have been prepared in accordance with GAAP which have been
consistently applied and present fairly and accurately the financial
position of the Borrower and the consolidated financial position of the
Borrower and its Related Companies as at the end of the financial period
to which the same relate and the results of the operations of the Borrower
and the consolidated results of the operations of the Borrower and its
Related Companies respectively for the financial period to which the same
relate and, as at the end of such financial period, neither the Borrower
nor any of its Related Companies had any significant liabilities
(contingent or otherwise) or any unrealised or anticipated losses which
are not disclosed by, or reserved against or provided for in, such
financial statements.
|
8
|
Undertakings
|
8.1
|
General
|
8.1.1
|
Notice
of Default
|
8.1.2
|
Consents
and licences
|
8.1.3
|
Use
of proceeds
|
8.1.4
|
Pari
passu
|
8.1.5
|
Financial
statements
|
(a)
|
prepare
financial statements of the Borrower and consolidated financial statements
of the Borrower and its Related Companies in accordance with GAAP and all
requirements of the Securities and Exchange Commission of the United
States of America consistently applied in respect of each financial year
and cause the same to be reported on by its auditors and deliver as many
copies of the same as the Bank may reasonably require as soon as
practicable but not later than seventy five (75) days after the end of the
financial period to which they relate;
and
|
(b)
|
prepare
unaudited financial statements of the Borrower and consolidated financial
statements of the Borrower and its Related Companies in respect of each of
the first three quarters of each financial year on the same basis as the
annual statements and deliver as many copies of the same as the Bank may
reasonably require as soon as practicable but not later than forty five
(45) days after the end of the financial period to which they
relate;
|
8.1.6
|
Delivery
of Compliance Certificate
|
8.1.7
|
Delivery
of reports
|
8.1.8
|
Provision
of further information
|
8.1.9
|
Obligations
under Security Documents
|
8.1.10
|
ISM
Code
|
(a)
|
comply
with and ensure that each Ship and any Operator at all times complies with
the requirements of the ISM Code;
|
(b)
|
immediately
inform the Bank if there is any actual or threatened withdrawal of an
Owner’s or an Operator’s DOC or the SMC in respect of any Ship;
and
|
(c)
|
promptly
inform the Bank upon the issue to the Borrower or any Operator of a DOC
and to any Ship of an SMC or the receipt by any of the Borrower or any
Operator of notification that its application for the same has been
refused;
|
8.1.11
|
ISPS
Code
|
(a)
|
comply
with and ensure that each Ship and any Operator at all times complies with
the requirements of the ISPS Code and with specifications of the
International Maritime Organisation, and any other regulations, either
existing or future, of the International Maritime Authority and the
European Union; and
|
(b)
|
immediately
inform the Bank if there is any actual or threatened withdrawal of any
certification required in order for any of them, any Operator and/or the
Ship to comply with the ISPS Code;
|
8.1.12
|
Documents
and evidence
|
8.1.13
|
Management
of the Borrower
|
8.1.14
|
Owner’s
Guarantee
|
8.1.15
|
Intra-Group
Loan Agreements
|
8.1.16
|
Operating
Accounts balance
|
(a)
|
subject
to this clause 8.1.16, on or before the Drawdown Date of the first Advance
pay to the credit of the Operating Accounts (or other accounts charged in
favour of the Bank in respect of the Ships) an aggregate sum of not less
than ten million Dollars ($10,000,000);
and
|
(b)
|
on
and from the Drawdown Date of the first Advance and throughout the
Security Period maintain an average balance (calculated on a monthly
basis) of not less than ten million Dollars ($10,000,000) and in any event
an aggregate balance of not less than five million Dollars ($5,000,000)
standing to the credit of the Operating Accounts (or other accounts
charged in favour of the Bank in respect of the
Ships);
|
8.1.17
|
Classification
|
(a)
|
to
send to the Bank, following receipt of a written request from the Bank,
certified true copies of all original certificates of class held by any
Classification Society in relation to any
Ship;
|
(b)
|
to
allow the Bank (or its agents), at any time and from time to time, to
inspect the classification reports of any Owner for any Ship at the
offices of any Classification Society and to take copies of
them;
|
(c)
|
to
notify the Bank immediately in writing if any Classification
Society:
|
(i)
|
receives
written notification from any Owner or any other person that the relevant
Ship’s Classification Society is to be changed;
or
|
(ii)
|
becomes
aware of any facts or matters which may result in or have resulted in a
change, suspension, discontinuance, withdrawal or expiry of the relevant
Ship’s Classification under the rules or terms and conditions of any
Owner’s or the relevant Ship’s membership of the Classification
Society;
|
(d)
|
following
receipt by any Classification Society of a written request from the
Bank:
|
(i)
|
to
confirm to the Bank that the relevant Owner is not in default of any of
its contractual obligations or liabilities to the Classification Society
and, without limiting the foregoing, that it has paid in full all fees or
other charges due and payable to the Classification Society;
or
|
(ii)
|
if
the relevant Owner is in default of any of its contractual obligations or
liabilities to the Classification Society, to specify to the Bank in
reasonable detail the facts and circumstances of such default, the
consequences thereof, and any remedy period agreed or allowed by the
Classification Society.
|
8.1.18
|
Newbuilding
|
8.2
|
Security
value
maintenance
|
8.2.1
|
Security
shortfall
|
(a)
|
prepay
within a period of thirty (30) days of the date of receipt by the Borrower
of the Bank’s said notice such sum in Dollars as will result in the
Security Requirement after such prepayment (taking into account any other
repayment of the Loan made between the date of the notice and the date of
such prepayment) being equal to the Security Value;
or
|
(b)
|
within
thirty (30) days of the date of receipt by the Borrower of the Bank’s said
notice constitute to the satisfaction of the Bank such further security
for the Loan as shall be acceptable to the Bank having a value for
security purposes (as determined by the Bank in its absolute discretion)
at the date upon which such further security shall be constituted which,
when added to the Security Value, shall not be less than the Security
Requirement as at such date.
|
8.2.2
|
Valuation
of Ship
|
8.2.3
|
Information
|
8.2.4
|
Costs
|
8.2.5
|
Valuation
of additional security
|
8.2.6
|
Documents
and evidence
|
8.3
|
Negative
undertakings
|
8.3.1
|
Negative
pledge
|
8.3.2
|
No
merger
|
8.3.3
|
Disposals
|
8.3.4
|
Other
business
|
8.3.5
|
Acquisitions
|
8.3.6
|
Other
obligations
|
8.3.7
|
No
borrowing
|
8.3.8
|
Repayment
of borrowings
|
8.3.9
|
Guarantees
|
8.3.10
|
Loans
|
8.3.11
|
Sureties
|
8.3.12
|
Share
capital and distribution
|
8.3.13
|
Subsidiaries
and parent
|
8.3.14
|
Change
of Classification, Classification Society or Flag
State
|
8.3.15
|
Managers
|
8.3.16
|
Constitutional
documents
|
8.3.17
|
Equity
|
8.4
|
Permitted
Ship sales
|
8.5
|
Financial
covenants
|
8.5.1
|
The
Borrower undertakes that at all times during the Security Period the
financial condition of the Borrower, which shall be evidenced by the
Accounting Information provided to the Bank shall be such
that:
|
(a)
|
the
Borrower’s Adjusted Net Worth shall never be less than two hundred and
fifty million Dollars ($250,000,000) and will at all times exceed thirty
five per cent (35%) of Total Assets;
and
|
(b)
|
EBITDA
of the Borrower will at all times exceed one hundred and twenty per cent
(120%) of the aggregate amount of Fixed
Charges;
|
(c)
|
the
Liquid Funds of the Borrower shall not at any time be less than the higher
of:
|
(i)
|
ten
million Dollars ($10,000,000); or
|
(ii)
|
five
hundred thousand Dollars ($500,000) per Group
Vessel.
|
8.5.2
|
For
the purposes of this clause 8.5:
|
(a)
|
Financial
Indebtedness of the debtor;
|
(b)
|
liability
for any credit to the debtor from a supplier of goods or services or under
any instalment purchase or payment plan or other similar
arrangement;
|
(c)
|
contingent
liabilities of the debtor (including without limitation any taxes or other
payments under dispute) which have been or, under GAAP, should be recorded
in the notes to the Accounting
Information;
|
(d)
|
deferred
tax of the debtor; and
|
(e)
|
liability
under a guarantee, indemnity or similar obligation entered into by the
debtor in respect of a liability of another person who is not a member of
the Group which would fall within (a) to (d) if the references to the
debtor referred to the other
person;
|
(a)
|
for
principal, interest or any other sum payable in respect of any moneys
borrowed or raised by the debtor;
|
(b)
|
under
any loan stock, bond, note or other security issued by the
debtor;
|
(c)
|
under
any acceptance credit, guarantee or letter of credit facility made
available to the debtor;
|
(d)
|
under
a financial lease, a deferred purchase consideration arrangement (in each
case, other than in respect of assets or services obtained on normal
commercial terms in the
ordinary
course of business) or any other agreement having the commercial effect of
a borrowing or raising of money by the
debtor;
|
(e)
|
under
any foreign exchange transaction, interest or currency swap or any other
kind of derivative transaction entered into by the debtor or, if the
agreement under which any such transaction is entered into requires
netting of mutual liabilities, the liability of the debtor for the net
amount; or
|
(f)
|
under
a guarantee, indemnity or similar obligation entered into by the debtor in
respect of a liability of another person which would fall within (a) to
(c) if the references to the debtor referred to the other
person;
|
(a)
|
cash
in hand or held with banks or other financial institutions of the Borrower
and/or any other member of the Group in Dollars or another currency freely
convertible into Dollars, which is free of any Encumbrance (other than a
Permitted Encumbrance and other than ordinary bankers’ liens which have
not been enforced or become capable of being
enforced);
|
(b)
|
any
other short-term financial investments which is free of any Security
Interest (other than a Permitted Security
Interest),
|
8.6
|
Pre-delivery
positive undertakings
|
8.6.1
|
Document
of title to an Additional Ship
|
8.6.2
|
Performance
of the Contract
|
8.6.3
|
Performance
by Builder
|
8.6.4
|
Progress
of construction
|
8.6.5
|
Arbitration
under the Contract
|
8.6.6
|
Conveyance
on default
|
8.6.7
|
Enforcement
of Owner’s rights
|
8.6.8
|
Notification
of rejection of an Additional Ship
|
8.6.9
|
Ship’s
name and registration
|
8.6.10
|
Mortgage
|
8.7
|
Pre-delivery
negative undertakings
|
8.7.1
|
Sale
or other disposal
|
8.7.2
|
Creation
of Encumbrances
|
8.7.3
|
Variation
of Contract
|
8.7.4
|
Releases
and waivers of Contract
|
8.7.5
|
Delays
|
8.7.6
|
Rejection
and cancellation
|
8.7.7
|
Assignment
of Earnings
|
8.7.8
|
Variation
of a Refund Guarantee
|
8.7.9
|
Release
and waiver of the Refund Guarantee
|
8.7.10
|
Chartering
|
(a)
|
on
demise charter for any period; or
|
(b)
|
by
any time or consecutive voyage charter for a term which exceeds or which
by virtue of any optional extensions therein contained may exceed twelve
(12) months’ duration; or
|
(c)
|
on
terms whereby more than two months’ hire (or the equivalent) is payable in
advance; or
|
(d)
|
below
the market rate prevailing at the time when such Additional Ship is fixed
or other than on arms length terms;
|
8.7.11
|
Manager
|
9
|
Conditions
|
9.1
|
Commitment
|
9.2
|
First
Advance
|
9.3
|
All
Advances
|
9.4
|
Contract
Instalment Advances of Facility B
|
9.5
|
Expected
Project Costs
|
9.6
|
General
conditions precedent
|
9.6.1
|
the
representations and warranties contained in (i) clauses 7.1 (and so
that the representation and warranty in clause 7.1.9 shall for this
purpose refer to the then latest audited financial statements delivered to
the Bank under clause 8.1.5), 7.2 and 7.3 and (ii) clauses 4.1 and
4.2 of the Owner’s Guarantees (and so that the representation and warranty
in clause 4.1.6 of Owner’s Guarantees shall for this purpose refer to
the then latest audited financial statements delivered to the Bank under
clause 5.1 of the Owner’s Guarantees)
are
true and correct on and as of each such time as if each was made with
respect to the facts and circumstances existing at such time;
and
|
9.6.2
|
no
Default shall have occurred and be continuing or would result from the
making of the relevant Advance
thereof.
|
9.7
|
Waiver
of conditions precedent
|
9.8
|
Further
conditions precedent
|
10
|
Events
of Default
|
10.1
|
Events
|
10.1.1
|
Non-payment
: any
Security Party fails to pay any sum payable by it under any of the
Security Documents or the Underlying Documents at the time, in the
currency and in the manner stipulated in the Security Documents or the
Underlying Documents (and so that, for this purpose, sums payable on
demand shall be treated as having been paid at the stipulated time if paid
within three (3) Banking Days of demand);
or
|
10.1.2
|
Master Swap Agreement:
(a) an Event of Default or Potential Event of Default (in each case as
defined in the Master Swap Agreement) has occurred and is continued under
the Master Swap Agreement or (b) an Early Termination Date (as defined in
the Master Swap Agreement) has occurred or been or become capable of being
effectively designated under the Master Swap Agreement or (c) a person
entitled to do so gives notice of an Early Termination Date under
Section 6(b)(iv) of the Master Swap Agreement or (d) the Master Swap
Agreement is terminated, cancelled, suspended, rescinded or revoked or
otherwise ceases to remain in full force and effect for any reason;
or
|
10.1.3
|
Breach of Insurance and certain
other obligations
: the Borrower fails to obtain and/or
maintain the Insurances (as defined in, and in accordance with the
requirements of, the Ship Security Documents) for any of the Mortgaged
Ships or if any insurer in respect of such Insurances cancels the
Insurances or disclaims liability by reason, in either case, of
mis-statement in any proposal for the Insurances or for any other failure
or default on the part of the Borrower or any other person or the Borrower
or any Owner commits any breach of or omits to observe any of the
obligations or undertakings expressed to be assumed by it under
clauses 8.1 or 8.2 or 8.6 or 8.7;
or
|
10.1.4
|
Breach of other
obligations
: any Security Party commits any breach of or omits to
observe any of its obligations or undertakings including without
limitation, any Financial Covenants expressed to be assumed by it under
any of the Underlying Documents or the Security Documents (other than
those referred to in clauses 10.1.1 and 10.1.2 above) and, in respect
of any such breach or omission which in the opinion of the Bank is capable
of remedy, such action as the Bank may require shall not have been taken
within fourteen (14) days (or any such period as the Bank may agree in
writing) of the Bank notifying the relevant Security Party of such default
and of such required action; or
|
10.1.5
|
Misrepresentation
: any
representation or warranty made or deemed to be made or repeated by or in
respect of any Security Party in or pursuant to any of the Security
Documents or any of the Underlying Documents or in any notice, certificate
or statement referred to in or delivered under any of the Security
Documents or any of the Underlying Documents is or proves to have been
incorrect or misleading in any material respect;
or
|
10.1.6
|
Cross-default
: any
Indebtedness of any Security Party is not paid when due or any
Indebtedness of any Security Party becomes (whether by declaration or
automatically in accordance with the relevant agreement or instrument
constituting the same) due and payable prior to the date when it would
otherwise have become due (unless as a result of the exercise by the
relevant Security Party of a voluntary right of prepayment), or any
creditor of any Security Party becomes entitled to declare any such
Indebtedness due and payable or any facility or commitment available to
any Security Party relating to Indebtedness is withdrawn, suspended or
cancelled by reason of any default (however described) of the person
concerned unless the relevant Security Party shall have satisfied the Bank
that such withdrawal, suspension or cancellation will not affect or
prejudice in any way the relevant Security Party's ability to pay its
debts as they fall due and fund its commitments, or any guarantee given by
any Security Party in respect of Indebtedness is not honoured when due and
called upon; or
|
10.1.7
|
Legal process
: any
judgment or order made against any Security Party is not stayed or
complied with within seven (7) days (or any such period as the Bank may
agree in writing) or a creditor attaches or takes possession of, or a
distress, execution, sequestration or other process is levied or enforced
upon or sued out against, any of the undertakings, assets, rights or
revenues of any Security Party and is not discharged within seven (7) days
(or any such period as the Bank may agree in writing);
or
|
10.1.8
|
Insolvency
: any Security
Party is unable or admits inability to pay its debts as they fall due;
suspends making payments on any of its debts or announces an intention to
do so; or
|
10.1.9
|
Reduction or loss of
capital
: a meeting is convened by any Security Party for the
purpose of passing any resolution to purchase, reduce or redeem any of its
share capital or shares, as the case may be;
or
|
10.1.10
|
Winding up
: any
corporate action, legal proceedings or other procedure or step is taken
for the purpose of winding-up any Security Party or an order is made or
resolution passed for the winding up of any Security Party or a notice is
issued convening a meeting for the purpose of passing any such resolution;
or
|
10.1.11
|
Administration
: any
petition is presented, notice given or other step is taken for the purpose
of the appointment of an administrator of any Security Party or the Bank
believes that any such petition or other step is imminent or an
administration order is made in relation to any Security Party;
or
|
10.1.12
|
Appointment of receivers and
managers
: any administrative or other receiver is appointed of any
Security Party or any part of its assets and/or undertaking or any other
steps are taken to enforce any Encumbrance over all or any part of the
assets of any Security Party; or
|
10.1.13
|
Compositions
: any
corporate action, legal proceedings or other procedures or steps are
taken, or negotiations commenced, by any Security Party or by any of its
creditors with a view to the general readjustment or rescheduling of all
or part of its indebtedness or to proposing any kind of composition,
compromise or arrangement involving such company and any of its creditors;
or
|
10.1.14
|
Analogous proceedings
:
there occurs, in relation to any Security Party, in any country or
territory in which any of them carries on business or to the jurisdiction
of whose courts any part of their assets is subject, any event which, in
the reasonable opinion of the Bank, appears in that country or territory
to correspond with, or have an effect equivalent or similar to, any of
those mentioned in clauses 10.1.7 to 10.1.13 (inclusive) or any
Security Party otherwise becomes subject, in any such country or
territory, to the operation of any law relating to insolvency, bankruptcy
or liquidation; or
|
10.1.15
|
Cessation of business
:
any Security Party suspends or ceases or threatens to suspend or cease to
carry on its business; or
|
10.1.16
|
Seizure
: all or a
material part of the undertaking, assets, rights or revenues of, or shares
or other ownership interests in, any Security Party are seized,
nationalised, expropriated or compulsorily acquired by or under the
authority of any government; or
|
10.1.17
|
Invalidity
: any of the
Security Documents or any of the Underlying Documents shall at any time
and for any reason become invalid or unenforceable or otherwise cease to
remain in full force and effect, or if the validity or enforceability of
any of the Security Documents or any of the Underlying Documents shall at
any time and for any reason be contested by any Security Party which is a
party thereto, or if any such Security Party shall deny that it has any,
or any further, liability thereunder;
or
|
10.1.18
|
Unlawfulness
: it becomes
impossible or unlawful at any time for any Security Party, to fulfil any
of the covenants and obligations expressed to be assumed by it in any of
the Security Documents or any of the Underlying Documents or for the Bank
to exercise the rights or any of them vested in it under any of the
Security Documents or otherwise; or
|
10.1.19
|
Repudiation
: any
Security Party repudiates any of the Security Documents or any of the
Underlying Documents or does or causes or permits to be done any act or
thing evidencing an intention to repudiate any of the Security Documents
or any of the Underlying Documents;
or
|
10.1.20
|
Encumbrances
enforceable
: any Encumbrance (other than Permitted Liens) in
respect of any of the property (or part thereof) which is the subject of
any of the Security Documents becomes enforceable;
or
|
10.1.21
|
Material adverse change
:
there occurs, in the opinion of the Bank, a material adverse change in the
financial condition of any Security Party by reference to the financial
statements referred to in clause 7.1.9 and clause 4.1.6 of
the Owner’s Guarantee; or
|
10.1.22
|
Arrest
: any Ship is
arrested, confiscated, seized, taken in execution, impounded, forfeited,
detained in exercise or purported exercise of any possessory lien or other
claim or otherwise taken from the possession of the Borrower or relevant
Owner and the Borrower or relevant Owner shall fail to procure the release
of such Ship within a period of seven (7) days (or such other period as
the Bank may agree in writing) thereafter;
or
|
10.1.23
|
Registration
: the
registration of any Ship under the laws and flag of the relevant Flag
State is cancelled or terminated without the prior written consent of the
Bank or, if any Ship is only provisionally registered on the Delivery Date
for such Ship, such Ship is not permanently registered under the laws and
flag of the relevant Flag State within ninety (90) days after the Drawdown
Date of the Advance constituting Facility A or, as the case may be, the
Advance constituting the Initial Revolving Amount or, as the case may be,
the Advance for such Ship or if such registration of any Ship is not
renewed at least forty five (45) days (or such other period as the Bank
may agree in writing) prior to the expiry of such registration;
or
|
10.1.24
|
Unrest
: the Flag State
of any Ship becomes involved in hostilities or civil war or there is a
seizure of power in such Flag State by unconstitutional means if, in any
such case, such event could in the opinion of the Bank reasonably be
expected to have a material adverse effect on the security constituted by
any of the Security Documents; or
|
10.1.25
|
Environmental Incidents
:
there is an Environmental Incident which gives rise, or may give rise, to
Environmental Claims which could, in the opinion of the Bank be expected
to have a material adverse effect (i) on the business, assets, operations,
property or financial condition of any Security Party or the Borrower’s
Group taken as a whole or (ii) on the security constituted by any of the
Security Documents or the enforceability of that security in accordance
with its terms; or
|
10.1.26
|
P&I
: the Borrower or
any Owner or any other person fails or omits to comply with any
requirements of the protection and indemnity association or other insurer
with which a Ship is entered for insurance or insured against protection
and indemnity risks (including oil pollution risks) to the effect that any
cover (including, without limitation, any cover in respect of liability
for Environmental Claims arising in jurisdictions where such Ship operates
or trades) is or may be liable to cancellation, qualification or exclusion
at any time; or
|
10.1.27
|
Parent company
: any
Owner ceases to be a wholly-owned subsidiary of the Borrower;
or
|
10.1.28
|
Breach of Contract
:
there is a material breach by the Borrower or any Owner, a Seller or a
Builder of any Contract or the Borrower fails to repay any Advance of
Facility B constituting (in part) Expected Project Costs representing a
10% deposit under a Contract relating to a purchase of an Additional Ship
which is a second hand vessel within 7 days of the date of expiry or
termination of the relevant Contract;
or
|
10.1.29
|
Termination or variation of a
Contract
: a Contract is terminated for any reason whatsoever or a
Contract is frustrated or varied in any manner not permitted by or
pursuant to the relevant Pre-delivery Security Assignment or this
Agreement; or
|
10.1.30
|
Termination of a Refund
Guarantee
: a Refund Guarantee is repudiated, cancelled, rescinded
or otherwise terminated; or
|
10.1.31
|
Non-Delivery of
Ship
:
|
(a)
|
on
or before the Termination Date (or such later date as the Bank in its
absolute discretion may agree in writing);
and/or
|
(b)
|
on
the date that it is obliged to take Delivery of the relevant Ship in
accordance with any relevant Contract and its failure to take such
Delivery will constitute a breach of the provisions of the relevant
Contract; or
|
10.1.32
|
Material events
: any
other event occurs or circumstance arises which, in the opinion of the
Bank, is likely materially and adversely to affect either (i) the ability
of any Security Party to perform all or any of its obligations under or
otherwise to comply with the terms of any of the Security Documents or
(ii) the security created by any of the Security Documents;
or
|
10.1.33
|
ISM Code
: the Borrower
or any Owner or any Operator fails to comply with the
requirements of the ISM Code and/or obtain and/or maintain a DOC for
itself and an SMC in respect of each of the Ships in accordance with the
ISM Code; or
|
10.1.34
|
ISPS Code
: the Borrower
or any Owner or any Operator fails to comply with the requirements of the
ISPS Code and/or obtain and/or maintain the certifications required in
respect of each of the Ships in accordance with the ISPS
Code; or
|
10.1.35
|
Managers
: any Manager
takes any action or institutes any proceedings or makes or asserts any
claim against any Ship in exercise or purported exercise of any claim;
or
|
10.1.36
|
Management of
Borrower
: Evangelos Pistiolis ceases to be the Chief
Executive Officer of the Borrower without the Bank’s prior written
consent; or
|
10.1.37
|
Failure to Drawdown Delivery
Date Advance
: the Borrower fails to drawdown a Delivery Date
Advance without the prior written consent of the Bank which shall not be
unreasonably withheld; or
|
10.1.38
|
Intra-Group Loans
Agreements
: the Borrower demands or accepts any repayments of
principal or interest or any other sum payable under the Intra-Group Loan
Agreements save as envisaged by clause 14.4 or takes any action against
any Owner without the prior written consent of the Bank;
or
|
10.1.39
|
Newbuilding:
the
Borrower or the relevant Owner as the case may be fails to pay all
instalments of the Contract Price or any part of the Contract Price not
being financed under this Agreement in full and in a timely manner and
otherwise in accordance with the terms of the relevant Contract for an
Additional Ship which is a newbuilding or the Bank determines in its
reasonable opinion that the Borrower or the relevant Owner will not be in
a position to pay all such instalments of the Contract Price or any part
of the Contract Price not being financed under this Agreement as
aforesaid; or
|
10.1.40
|
Failure to create a
Mortgage:
The Borrower or the relevant Owner fails to execute and
register at the Registry a valid and effective Mortgage over any
Additional Ship which is a newbuilding immediately following Delivery of
such Additional Ship pursuant to the relevant Contract or the Bank
determines in its reasonable opinion that the Borrower or the relevant
Owner will not (or is unlikely to) be able and/or willing to execute and
register at the Registry such Mortgage immediately upon Delivery of such
Additional Ship.
|
10.2
|
Acceleration
|
10.2.1
|
the
obligation of the Bank to make the Commitment available shall be
terminated, whereupon the Commitment shall be reduced to zero forthwith;
and/or
|
10.2.2
|
the
Loan and all interest and commitment commission accrued and all other sums
payable under the Security Documents have become due and payable,
whereupon the same shall, immediately or in accordance with the terms of
such notice, become due and
payable.
|
10.3
|
Demand
basis
|
11
|
Indemnities
|
11.1
|
Miscellaneous
indemnities
|
11.1.1
|
any
default in payment by the Borrower of any sum under any of the Security
Documents when due;
|
11.1.2
|
the
occurrence of any other Event of
Default;
|
11.1.3
|
any
prepayment of the Loan or part thereof being made under clause 4.4,
4.5 or 12.1, or any other repayment of the Loan or part thereof being made
otherwise than on an Interest Payment Date relating to the part of the
Loan prepaid or repaid; or
|
11.1.4
|
any
Advance not being made for any reason (excluding any default by the Bank)
after the relevant Drawdown Notice for such Advance has been
given,
|
11.2
|
Currency
indemnity
|
11.3
|
Environmental
indemnity
|
12
|
Unlawfulness
and increased costs
|
12.1
|
Unlawfulness
|
12.2
|
Increased
costs
|
12.2.1
|
subject
the Bank to Taxes or change the basis of Taxation of the Bank with respect
to any payment under any of the Security Documents (other than Taxes or
Taxation on the overall net income, profits or gains of the Bank imposed
in the jurisdiction in which its principal or lending office under this
Agreement is located); and/or
|
12.2.2
|
increase
the cost to, or impose an additional cost on, the Bank or its holding
company in making or keeping the Commitment available or maintaining or
funding all or part of the Loan;
and/or
|
12.2.3
|
reduce
the amount payable or the effective return to the Bank under any of the
Security Documents; and/or
|
12.2.4
|
reduce
the Bank's or its holding company's rate of return on its overall capital
by reason of a change in the manner in which it is required to allocate
capital resources to the Bank's obligations under any of the Security
Documents; and/or
|
12.2.5
|
require
the Bank or its holding company to make a payment or forgo a return on or
calculated by reference to any amount received or receivable by the Bank
under any of the Security Documents;
and/or
|
12.2.6
|
require
the Bank or its holding company to incur or sustain a loss (including a
loss of future potential profits) by reason of being obliged to deduct all
or part of the Commitment or the Loan from its capital for regulatory
purposes,
|
(a)
|
the
Bank shall notify the Borrower in writing of such event promptly upon its
becoming aware of the same; and
|
(b)
|
the
Borrower shall on demand pay to the Bank the amount which the Bank
specifies (in a certificate setting forth the basis of the computation of
such amount but not including any matters which the Bank or its holding
company regards as confidential) is required to compensate the Bank and/or
(as the case may be) its holding company for such liability to Taxes,
cost, reduction, payment, forgone return or
loss.
|
12.3
|
Exception
|
13
|
Security
and set-off
|
13.1
|
Application
of moneys
|
13.1.1
|
first
in or toward payment of all unpaid fees, commissions and expenses which
may be owing to the Bank under any of the Security
Documents;
|
13.1.2
|
secondly
in or towards payment of any arrears of interest owing in respect of the
Loan or any part thereof;
|
13.1.3
|
thirdly
in or towards repayment of the Loan (whether the same is due and payable
or not);
|
13.1.4
|
fourthly
in or towards payment to the Bank for any loss suffered by reason of any
such payment in respect of principal not being effected on an Interest
Payment Date relating to the part of the Loan
repaid;
|
13.1.5
|
fifthly
in or towards payment to the Bank of any other sums owing to it under any
of the Security Documents; and
|
13.1.6
|
sixthly
the surplus (if any) shall be paid to the Borrower or to whomsoever else
may be entitled to receive such
surplus,
|
13.2
|
Set-off
|
13.2.1
|
The
Borrower authorises the Bank (without prejudice to any of the Bank's
rights at law, in equity or otherwise), at any time and without notice to
the Borrower, to apply any credit balance to which the Borrower is then
entitled standing upon any account of the Borrower with any branch of the
Bank in or towards satisfaction of any sum due and payable from the
Borrower to the Bank under any of the Security Documents. For
this purpose, the Bank is authorised to purchase with the moneys standing
to the credit of such account such other currencies as may be necessary to
effect such application. The Bank shall not be obliged to
exercise any right given to it by this clause 13.2. The
Bank shall notify the Borrower forthwith upon the exercise or purported
exercise of any right of set-off giving full details in relation
thereto.
|
13.2.2
|
Without
prejudice to its rights hereunder and/or under the Master Swap Agreement,
the Bank may at the same time as, or at any time after, any Default under
this Agreement or the Borrower’s default under the Master Swap Agreement,
set-off any amount due now or in the future from the Borrower to the Bank
under this Agreement against any amount due from the Bank to the Borrower
under the Master Swap Agreement and apply the first amount in discharging
the second amount. The effect of any set-off under this
clause 13.2.2 shall be effective to extinguish or, as the case may
require, reduce the liabilities of the Bank under the Master Swap
Agreement.
|
13.3
|
Further
assurance
|
13.4
|
Conflicts
|
14
|
Accounts
|
14.1
|
General
|
14.1.1
|
The
Borrower undertakes with the Bank that it
will:
|
(a)
|
on
or before the Drawdown Date of the Advance constituting Facility A or the
first Advance (whichever is the earlier) open or procure that there is
opened by the relevant Initial Owner the relevant Operating Account and
prior to the drawdown of any Advance relative to an Additional Ship open
or procure that there is opened by the Owner of the relevant Additional
Ship an Operating Account for that Additional Ship;
and
|
(b)
|
procure
that all moneys payable to the Borrower and/or any Owner in respect of the
Earnings (as defined in the Ship Security Documents) of the Ships shall,
unless and until the Bank directs to the contrary pursuant to proviso (a)
to clause 2.1 of the General Assignments, be paid to the relevant
Operating Account Provided however that if any of the moneys paid to the
Operating Accounts are payable in a currency other than Dollars, the Bank
shall convert such moneys into Dollars at the Bank’s spot rate of exchange
at the relevant time for the purchase of Dollars with such currency and
the term “
spot rate of
exchange
” shall include any premium and costs of exchange payable
in connection with the purchase of Dollars with such currency;
and
|
(c)
|
on
or before the first Drawdown Date pay or procure that there is paid the
sum of ten million Dollars ($10,000,000) by way of working capital to the
Operating Accounts and maintain such balance in accordance with clause
8.1.16.
|
14.2
|
Account
Terms
|
14.2.1
|
Amounts
standing to the credit of the Operating Accounts shall, (unless otherwise
agreed between the Bank the Borrower and each of the Owners) bear interest
at the rates from time to time offered by the Bank to its customers for
Dollar deposits in comparable amounts for comparable
periods. Interest shall accrue on the Operating Accounts from
day to day and be calculated on the basis of actual days elapsed and a 360
day year and shall be credited as appropriate to the Operating Accounts at
such times as the Bank, the Borrower and each of the Owners shall
agree.
|
14.2.2
|
The
Borrower and each of the Owners shall, unless and until a Default shall
occur and the Bank shall direct to the contrary, be entitled from time to
time to require that moneys for the time being standing to the credit of
the Operating Accounts be transferred in such amounts and for such periods
as the Borrower and each of the Owners select to fixed-term deposit
accounts (“
deposit
accounts
”) opened in the name of the Borrower and each of the
Owners with the Bank. The Borrower and each of the Owners shall
not be entitled pursuant to clause 14.3 to withdraw moneys standing to the
credit of the Operating Accounts which are the subject of a fixed term
deposit until the expiry of the period of such deposit unless the Borrower
and each of the Owners shall, on withdrawing such moneys, pay to the Bank
on demand any loss or expense which the Bank shall certify that it has
sustained or incurred as a result of such withdrawal being made prior to
the expiry of the period of the relevant deposit and the Bank shall be
entitled to debit the relevant Operating Account for the amount so
certified prior to such withdrawal being made. In the event
that any moneys deposited are to be applied pursuant to clause 14.5, the
Borrower and each of the Owners shall, on such application being made, pay
to the Bank on demand any loss or expense which the Bank shall certify
that it has sustained or incurred as a result of such application being
made prior to the expiry of the period of the relevant deposit and the
Bank shall be entitled to debit the Operating Accounts for the amount so
certified prior to such application being made. Any deposit
accounts shall, for all the purposes of the Security Documents, be deemed
to be sub-accounts of the Operating Accounts from which the moneys
deposited in the deposit accounts were transferred and all references in
the Security Documents to the Operating Account shall be deemed to include
the deposit accounts deemed as aforesaid to be sub-accounts
thereof.
|
14.3
|
Operating Account:
withdrawals
|
14.3.1
|
to
pay any amount to the Bank in or towards payment of any instalments of
interest or principal or any other amounts then payable pursuant to the
Security Documents and to the extent that there are moneys standing to the
credit of the Operating Accounts as at any Repayment Date and Interest
Payment Date or other relevant date, the Borrower and each of the Owners
hereby irrevocably authorise the Bank to apply such moneys in or towards
payment of any instalments of interest or principal or other amounts
payable pursuant to the Security Documents provided always that this shall
be strictly without prejudice to the obligations of the Borrower and each
of the Owners to make any such payments to the extent that the aforesaid
application by the Bank is insufficient to meet the same;
and
|
14.3.2
|
to
pay the proper and reasonable operating expenses (including costs of
insuring, repairing and maintaining the Ships) of the Ships and the proper
and reasonable expenses of administering the affairs of the Borrower and
each of the Owners; and
|
14.3.3
|
to
pay any Manager’s remuneration under any Management Agreement in the
amounts and at the times therein
stated.
|
14.4
|
Repayment
under the Intra-Group Loan
Agreements
|
14.4.1
|
until
such time as all sums due and payable under this Agreement and each of the
other Security Documents have been satisfied in full the obligation of
each Owner to pay all sums of principal and interest and any other sums
payable under the relevant Intra-Group Loan Agreements shall be fully
satisfied by that Owner depositing the relevant sums to the credit of its
Operating Account and the Borrower hereby irrevocably and unconditionally
acknowledges that all moneys from time to time standing to the credit of
the Operating Accounts shall be freely available to the Bank for
application in or towards payment of any instalments of principal or
interest or any other amounts then due and payable pursuant to this
Agreement and any of the other Security Documents;
and
|
14.4.2
|
at
any time after the occurrence of an Event of Default, the Bank may,
without notice to the Borrower or any Owner, apply all moneys then
standing to the credit of the Operating Accounts (together with interest
from time to time accruing or accrued thereon) in or towards satisfaction
of any sums due to the Bank under the Security Documents in the manner
specified in clause 13.1.
|
14.5
|
Application
of
accounts
|
14.6
|
Charging
of Operating
Accounts
|
14.6.1
|
The
Operating Accounts and all amounts from time to time standing to the
credit thereof shall be subject to the security constituted and the rights
conferred by the Operating Account
Charges.
|
15
|
Assignment,
transfer and lending office
|
15.1
|
Benefit
and burden
|
15.2
|
No
assignment by Borrower
|
15.3
|
Assignment
by Bank
|
15.4
|
Transfer
|
15.5
|
Documenting
assignments and transfers
|
15.6
|
Lending
office
|
15.7
|
Disclosure
of information
|
16
|
Notices
and other matters
|
16.1
|
Notices
|
16.1.1
|
be
in writing delivered personally or by first-class prepaid letter (airmail
if available) or facsimile transmission or other means of
telecommunication in permanent written
form;
|
16.1.2
|
be
deemed to have been received, subject as otherwise provided in the
relevant Security Document, in the case of a letter, when delivered
personally or three (3) days after it has been put in to the post and, in
the case of a facsimile transmission or other means of telecommunication
in permanent written form, at the time of despatch (provided that if the
date of despatch is not a business day in the country of the addressee or
if the time of despatch is after the close of business in the country of
the addressee it shall be deemed to have been received at the opening of
business on the next such business day);
and
|
16.1.3
|
be
sent:
|
(a)
|
to
the Borrower and any Owner at:
|
(b)
|
to
the Bank at:
|
16.2
|
No
implied waivers, remedies
cumulative
|
16.3
|
English
language
|
16.4
|
Counterparts
|
17
|
Governing
law and jurisdiction
|
17.1
|
Law
|
17.2
|
Submission
to jurisdiction
|
Ship
|
Owner
|
Country
of Incorporation of Owner
|
Flag
|
Official
Number
|
Classification
Society
|
Classification
|
Ship
Type
|
Year
Built
|
Deadweight/TEU
|
Account
number
|
“DAUNTLESS”
|
Lefka
Shipping Company Limited
|
Marshall
Islands
|
Marshall
Islands
|
2308
|
Det
Norske Veritas
|
+1A1
Tanker for Oil ESP SPM E0 VCS-2 CSA-1 Nauticus
|
Products
Tanker
|
1999
|
46,168
|
LEFSHI-USD1
|
“DOUBTLESS”
|
Falakro
Shipping Company Limited
|
Liberia
|
Liberia
|
9363
|
Det
Norske Veritas
|
+1A1
Ice-C tanker for oil ESP EO Nauticus
|
Products
Tanker
|
1991
|
47,076
|
FASHOT-USD1
|
“ENDLESS”
|
Litochoro
Shipping Company Limited
|
Marshall
Islands
|
Marshall
Islands
|
2040
|
Det
Norske Veritas
|
+1A1
Ice-C tanker for oil ESP EO Nauticus
|
Oil
Tanker
|
1992
|
135,915
|
LITOSHIP-USD1
|
“FAITHFUL”
|
Gramos
Shipping Company Inc.
|
Marshall
Islands
|
Marshall
Islands
|
1689
|
Det
Norske Veritas
|
+1A1
Ice-C tanker for oil ESP EO Nauticus
|
Products
Tanker
|
1992
|
45,000
|
GRAMSHIP-USD1
|
“FAULTLESS”
|
Parnasos
Shipping Company Limited
|
Liberia
|
Liberia
|
12601
|
Det
Norske Veritas
|
+A1
Tanker for oil, ESP EO PP3 Nauticus
|
Oil
Tanker
|
1992
|
154,970
|
PASHICO-USD1
|
“FLAWLESS”
|
Pylio
Shipping Company Limited
|
Liberia
|
Liberia
|
9475
|
Det
Norske Veritas
|
+1A1
tanker for oil ESP PP3 ED-SBM
|
Oil
Tanker
|
1991
|
154,970
|
PYSHCO-USD1
|
“LIMITLESS”
|
Mytikas
Shipping Company Limited
|
Marshall
Islands
|
Marshall
Islands
|
2034
|
Det
Norske Veritas
|
+1A1
Ice-C tanker for oil ESP EO Nauticus
|
Oil
Tanker
|
1993
|
136,055
|
MYSHCO-USD1
|
“NOISELESS”
|
Imitos
Shipping Company Limited
|
Marshall
Islands
|
Marshall
Islands
|
2234
|
Det
Norske Veritas
|
+A1,
oil carrier, ice class DO, (E) +AMS +ACCU
|
Oil
Tanker
|
1992
|
149,554
|
IMSHCO-USD1
|
“PRICELESS”
|
Kisavos
Shipping Company Limited
|
Marshall
Islands
|
Marshall
Islands
|
1598
|
Det
Norske Veritas
|
+1A1
Tanker for oil ESP PP3 EO
|
Oil
Tanker
|
1991
|
154,970
|
KISHCO-USD1
|
“SOUNDLESS”
|
Agrafa
Shipping Company Limited
|
Marshall
Islands
|
Marshall
Islands
|
2309
|
Det
Norske Veritas
|
+1A1
Tanker for Oil ESP SPM E0 VCS-2 CSA-1 Nauticus
|
Products
Tanker
|
1999
|
46,168
|
AGRSHI-USD1
|
“SPOTLESS”
|
Idi
Shipping Company Limited
|
Liberia
|
Liberia
|
9361
|
Det
Norske Veritas
|
+1A1
Ice-C tanker for oil ESP EO Nauticus
|
Products
Tanker
|
1991
|
47,076
|
IDISHCO-USD1
|
“TAINTLESS”
|
Giona
Shipping Company Limited
|
Marshall
Islands
|
Marshall
Islands
|
2307
|
Det
Norske Veritas
|
+1A1
Tanker for Oil ESP SPM E0 VCS-2 CSA-1 Nauticus
|
Products
Tanker
|
1999
|
47,084
|
GIOSHI-USD1
|
“TIMELESS”
|
Taygetus
Shipping Company Limited
|
Liberia
|
Liberia
|
9480
|
Det
Norske Veritas
|
+1A1
tanker for oil ESP PP3 ED-SBM
|
Oil
Tanker
|
1991
|
154,970
|
TASHCO-USD1
|
“TOPLESS”
|
Agion
Oros Shipping Company Limited
|
Marshall
Islands
|
Marshall
Islands
|
2310
|
Det
Norske Veritas
|
NS
MNS M0
|
Products
Tanker
|
1998
|
47,262
|
AGORSHI-USD1
|
“VANGUARD”
|
Pageon
Shipping Company Limited
|
Cyprus
|
Cyprus
|
709465
|
Det
Norske Veritas
|
+1A1
Ice-C tanker for oil ESP EO Nauticus
|
Products
Tanker
|
1992
|
47,084
|
PAGSHICO-USD1
|
(A)
|
Each
Additional Ship shall:
|
1
|
be
a standard double hull crude oil or double hull product oil
tanker;
|
2
|
be
aged 10 years or less on the relevant Delivery
Date;
|
3
|
maintain
a flag and class acceptable to the
Bank;
|
4
|
be
wholly owned by the Borrower or an Additional Owner;
and
|
5
|
have
a purchase price which shall not exceed the Fair Market Value for such
Additional Ship.
|
(B)
|
The
Bank shall be satisfied that Facility B relating to such Additional Ship
can be repaid by the Borrower in accordance with clause
4.2
; and
|
(C)
|
Each
Additional Ship shall be acceptable to the Bank in its absolute
discretion.
|
Initial
Ships
|
Maximum
Amount
$
|
|||
“DAUNTLESS”
|
36,550,000.00 | |||
“DOUBTLESS”
|
10,500,000.00 | |||
“ENDLESS”
|
19,300,000.00 | |||
“FAITHFUL”
|
11,100,000.00 | |||
“FAULTLESS”
|
25,800,000.00 | |||
“FLAWLESS”
|
18,100,000.00 | |||
“LIMITLESS”
|
19,800,000.00 | |||
“NOISELESS”
|
25,800,000.00 | |||
“PRICELESS”
|
25,800,000.00 | |||
“SOUNDLESS”
|
36,550,000.00 | |||
“SPOTLESS”
|
10,500,000.00 | |||
“TAINTLESS”
|
36,550,000.00 | |||
“TIMELESS”
|
18,100,000.00 | |||
“TOPLESS”
|
34,350,000.00 | |||
“VANGUARD”
|
10,856,899.82 | |||
$339,656,899.82 |
Initial
Ship
|
Initial
Owner
|
Country
of Incorporation
|
Address
|
Shareholder
|
“DAUNTLESS”
|
Lefka
Shipping Company Limited
|
Marshall
Islands
|
Trust
Company Complex, Ajeltake Road, Ajeltake Island, Majuro, the Marshall
Islands
|
Borrower
|
“DOUBTLESS”
|
Falakro
Shipping Company Limited
|
Liberia
|
80
Broad Street, Monrovia, Liberia
|
Borrower
|
“ENDLESS”
|
Litochoro
Shipping Company Limited
|
Marshall
Islands
|
Trust
Company Complex, Ajeltake Road, Ajeltake Island, Majuro, the Marshall
Islands
|
Borrower
|
“FAITHFUL”
|
Gramos
Shipping Company Inc.
|
Marshall
Islands
|
Trust
Company Complex, Ajeltake Road, Ajeltake Island, Majuro, the Marshall
Islands
|
Borrower
|
“FAULTLESS”
|
Parnasos
Shipping Company Limited
|
Liberia
|
80
Broad Street, Monrovia, Liberia
|
Borrower
|
“FLAWLESS”
|
Pylio
Shipping Company Limited
|
Liberia
|
80
Broad Street, Monrovia, Liberia
|
Borrower
|
“LIMITLESS”
|
Mytikas
Shipping Company Limited
|
Marshall
Islands
|
Trust
Company Complex, Ajeltake Road, Ajeltake Island, Majuro, the Marshall
Islands
|
Borrower
|
“NOISELESS”
|
Imitos
Shipping Company Limited
|
Marshall
Islands
|
Trust
Company Complex, Ajeltake Road, Ajeltake Island, Majuro, the Marshall
Islands
|
Borrower
|
“PRICELESS”
|
Kisavos
Shipping Company Limited
|
Marshall
Islands
|
Trust
Company Complex, Ajeltake Road, Ajeltake Island, Majuro, the Marshall
Islands
|
Borrower
|
“SOUNDLESS”
|
Agrafa
Shipping Company Limited
|
Marshall
Islands
|
Trust
Company Complex, Ajeltake Road, Ajeltake Island, Majuro, the Marshall
Islands
|
Borrower
|
“SPOTLESS”
|
Idi
Shipping Company Limited
|
Liberia
|
80
Broad Street, Monrovia, Liberia
|
Borrower
|
“TAINTLESS”
|
Giona
Shipping Company Limited
|
Marshall
Islands
|
Trust
Company Complex, Ajeltake Road, Ajeltake Island, Majuro, the Marshall
Islands
|
Borrower
|
“TIMELESS”
|
Taygetus
Shipping Company Limited
|
Liberia
|
80
Broad Street, Monrovia, Liberia
|
Borrower
|
“TOPLESS”
|
Agion
Oros Shipping Company Limited
|
Marshall
Islands
|
Trust
Company Complex, Ajeltake Road, Ajeltake Island, Majuro, the Marshall
Islands
|
Borrower
|
“VANGUARD”
|
Pageon
Shipping Company Limited
|
Cyprus
|
284
Arch. Makarios III Avenue, Limassol, Cyprus
|
Borrower
|
(a)
|
no
event or circumstance has occurred and is continuing which constitutes a
Default;
|
(b)
|
the
representations and warranties contained
in
|
(i)
|
clauses 7.1
and 7.2 of the Loan Agreement (and so that the representation and warranty
in clause 7.1.9 refers for this purpose to the audited financial
statements of the Borrower and the consolidated financial statements of
the Borrower and its Related Companies in respect of the financial year
ended on {
date
});
and
|
(ii)
|
clause 4.1
and 4.2 of each Owner’s Guarantee (and so that the representation and
warranty in clause 4.1.6 of each Owner’s Guarantee refers for this
purpose to the consolidated financial statements of the Borrower and its
Related Companies in respect of the financial year ended on {
date
};
|
(c)
|
the
borrowing to be effected by the drawdown of the Loan will be within our
corporate powers, has been validly authorised by appropriate corporate
action and will not cause any limit on our borrowings (whether imposed by
statute, regulation, agreement or otherwise) to be exceeded;
and
|
(d)
|
there
has been no material adverse change in our financial position or in the
consolidated financial position of ourselves and our Related Companies
from that set forth in the financial statements referred to in (b)
above.
|
(a)
|
Constitutional
documents
|
(b)
|
Corporate
authorisations
|
(i)
|
being
true and correct;
|
(ii)
|
being
duly passed at meetings of the directors of such Security Party and other
than in the case of the Borrower of the shareholders of such Security
Party each duly convened and held;
|
(iii)
|
not
having been amended, modified or revoked;
and
|
(iv)
|
being
in full force and effect,
|
(c)
|
Specimen
signatures
|
(d)
|
Certificates
of incumbency
|
(e)
|
Borrower’s
consents and approvals
|
(f)
|
Other
consents and approvals
|
(g)
|
Additional
documents and evidence
|
(h)
|
Fees,
commissions and expenses
|
(a)
|
Conditions
precedent
|
(b)
|
Security
Documents
|
(c)
|
Legal
opinions
|
(d)
|
Borrower’s
process agent
|
(e)
|
Owner’s
process agent
|
(f)
|
Manager’s
process agent
|
(g)
|
Valuations
|
(h)
|
Fees,
commissions and expenses
|
(i)
|
Operating
Accounts
|
(j)
|
Ownership
|
(i)
|
each
Owner is the legally and beneficially wholly-owned subsidiary of the
Borrower; and
|
(ii)
|
the
Shareholders are the legal and ultimate beneficial owners of fifteen per
cent (15%) of the issued share capital of the
Borrower;
|
(k)
|
Financial
statements and Compliance
Certificate
|
(l)
|
Subordination
of rights
|
(m)
|
Existing
Loan Agreement
|
(a)
|
Conditions
precedent
|
(b)
|
No
claim
|
(c)
|
No
variations to Contract
|
(d)
|
No
Encumbrance
|
(e)
|
Certified
Underlying Documents
|
(f)
|
Ship
conditions
|
(i)
|
Registration
and Encumbrances
|
(ii)
|
Classification
|
(iii)
|
Insurance
|
(g)
|
Cancellation
|
(h)
|
Borrower’s
and Owner’s further corporate
authorisations
|
(i)
|
Other
further corporate authorisations
|
(j)
|
Updated
certificates of incumbency
|
(k)
|
Management
|
(l)
|
Security
Documents
|
(m)
|
Mortgage
registration
|
(n)
|
Notices
of assignment and acknowledgement
|
(o)
|
Valuations
|
(p)
|
Survey
report
|
(q)
|
Evidence
of subordination
|
(r)
|
ISM
Code and ISPS Code
|
(s)
|
Legal
opinions
|
(i)
|
an
opinion of Chrysses Demetriades & Co., special legal advisers in the
Republic of Cyprus to the Bank;
|
(ii)
|
an
opinion of Seward & Kissel, special legal advisers to the Bank on
Liberian law; and
|
(iii)
|
an
opinion of Seward & Kissel, special legal advisers to the Bank on
Marshall Islands law;
|
(iv)
|
any
such further opinion as may be required by the
Bank;
|
(t)
|
Insurance
Opinion
|
(u)
|
Owner’s
process agent
|
(v)
|
Managers’
process agent
|
(w)
|
Manager's
confirmation
|
(x)
|
Certificates
of financial responsibility
|
(y)
|
Delivery
Documents
|
(z)
|
Contract
Price Payment
|
(a)
|
Conditions
precedent
|
(b)
|
No
claim
|
(c)
|
No
variations to Contract
|
(d)
|
No
Encumbrance
|
(e)
|
Equity
contribution
|
(f)
|
Invoices
|
(g)
|
Fees,
commissions and expenses
|
(h)
|
Title
documents
|
1
|
The
Additional Cost shall be calculated by the Bank in respect of each period
for which it falls to be calculated in relation to the Loan in accordance
with the following formula:
|
|
Y
|
0.01F
|
=
per cent per annum
|
100
|
2
|
For
the purposes of calculating the Additional
Cost:
|
(a)
|
the
formula is applied on the first day of each period for which it falls to
be calculated (and the result shall apply for the duration of such
period);
|
(b)
|
each
amount is rounded up to the nearest four decimal places;
and
|
(c)
|
if
the formula produces a negative percentage, the percentage shall be taken
as zero.
|
3
|
If
alternative or additional financial requirements are imposed by the Bank
of England, the Financial Services Authority or any other United Kingdom
governmental authority or agency which in the Bank’s opinion make the
formula no longer appropriate, the Bank shall be entitled by notice to the
Borrower to stipulate such other formula as shall be suitable to apply in
substitution for the formula. Any such other formula so
stipulated shall take effect in accordance with the terms of such
notice.
|
4
|
In
this Schedule 4:
|
(a)
|
“
Fees Rules
” means the
then current rules on periodic fees contained in the Supervision manual of
the Financial Services Authority’s Handbook of rules and guidance or such
other law or regulation as may be in force from time to time in respect of
the payment of fees for the regulation of the accepting of
deposits;
|
(b)
|
“
Fee Tariffs
” means the
fee tariffs most recently published by the Financial Services Authority in
the Fees Rules in respect of activity group A.1 Deposit acceptors
therein;
|
(c)
|
“
Periodic Fee
” means the
periodic fee for the period to which the Fee Tariffs relate payable to the
Financial Services Authority under the Fees Rules by the Bank in respect
of its being in the activity group A.1 Deposit acceptors in the Fees
Rules;
|
(d)
|
“
Sterling
” means the
lawful currency of the United Kingdom;
and
|
(e)
|
“
Tariff Base
” has the
meaning given to it in the Fees Rules in respect of activity group A.1
Deposit acceptors therein and the period to which the Fee Tariffs relate,
and will be calculated in accordance
therewith.
|
1
|
Financial
Covenants
|
(a)
|
the
Company’s Adjusted Net Worth is not less than two hundred and fifty
million Dollars ($250,000,000) and exceeds thirty five per cent (35%) of
Total Assets; and
|
(b)
|
EBITDA
of the Company exceeds one hundred and twenty per cent (120%) of the
aggregate amount of Fixed Charges;
|
(c)
|
the
Liquid Funds of the Guarantor are not less than the higher
of:
|
(i)
|
ten
million Dollars ($10,000,000); or
|
(ii)
|
five
hundred thousand Dollars ($500,000) per Group
Vessel.
|
2
|
Default
|
The
Borrower
|
||
SIGNED
by
|
)
|
|
for
and on behalf of
|
)
|
|
TOP
SHIPS INC
|
)
|
|
pursuant
to a
|
)
|
|
power
of attorney dated
|
)
|
|
........................................
|
||
Attorney-in-fact
|
||
The
Bank
|
||
SIGNED
by
|
)
|
|
for
and on behalf of
|
)
|
|
THE
ROYAL BANK OF SCOTLAND plc
|
)
|
|
pursuant
to a power
|
)
|
|
of
attorney dated
|
)
|
.........................................
|
Attorney-in-fact
|
||
SIGNED
by
for
and on behalf of
TOP
SHIPS INC.
pursuant
to
board
resolutions dated 25 March 2008
|
)
)
)
)
)
|
/s/Theodora Hitropetrou
Authorized
signatory
|
|
/s/Eirini
Alexandropoulou
Erini Alexandropoulou
Attorney-at-law
|
|||
SIGNED
by Stephen
Moorby
the
duly authorized signatory
for
and on behalf of
THE
ROYAL BANK OF SCOTLAND plc
|
)
)
)
)
|
/s/Stephen Moorby
Authorised
signatory
|
|
Clause
|
Page
|
SCHEDULE
1
|
INITIAL
LENDERS AND COMMITMENTS
|
SCHEDULE
2
|
IRREVOCABLE
DRAWDOWN NOTICE
|
SCHEDULE
3
|
CONDITION
PRECEDENT DOCUMENTS
|
APPENDIX
A
|
FORM
OF COMPLIANCE CERTIFICATE
|
APPENDIX
B
|
FORM
OF EARNINGS ASSIGNMENT
|
APPENDIX
C
|
FORM
OF INSURANCE ASSIGNMENT
|
APPENDIX
D
|
FORM
OF CHARTER ASSIGNMENT
|
APPENDIX
E
|
FORM
OF MANAGER’S UNDERTAKING
|
APPENDIX
F
|
FORM
OF MORTGAGE
|
APPENDIX
G
|
FORM
OF NOTE
|
APPENDIX
H
|
FORM
OF ASSIGNMENT AND ACCEPTANCE
|
(1)
|
JAPAN
II SHIPPING COMPANY LIMITED, a Liberian corporation (the “
Borrower
”);
|
(3)
|
THE
BANKS AND FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF
(each, an “
Initial
Lender
”);
|
(4)
|
DVB
BANK AG, acting through its office at Friedrich-Ebert-Anlage 2-14, 60325
Frankfurt am Main, Germany, as Swap Bank (together with its successors and
permitted assigns, the “
Swap Bank
”);
and
|
(5)
|
DVB
BANK AMERICA N.V., with offices at Zeelandia Office Park, Kaya W.F.G.
Mensing 14, P.O. Box 3107, Curaçao, Netherlands Antilles, as Agent
(together with its successors and permitted assigns, the “
Agent
”) and Security
Trustee (together with its successors and permitted assigns, the “
Security
Trustee
”).
|
1
|
INTERPRETATION
|
1.1
|
Definitions
. Subject
to Clause 1.5, in this Agreement and the other Finance
Documents:
|
|
(a)
|
it
is entered into by the Borrower and the Swap Bank pursuant to the Master
Agreement;
|
|
(b)
|
its
purpose is to hedge the Borrower’s exposure under this Agreement to
fluctuations in the interest rate arising from the funding of the Advance;
and
|
|
(c)
|
the
notional principal amount of such Transaction, together with all other
continuing Designated Transactions, does not and in the future (taking
into account the scheduled amortization thereof) will not exceed the
aggregate amount of the Loan scheduled to be outstanding from time to
time;
|
|
(a)
|
all
freight, hire and passage moneys, compensation payable to the Borrower in
the event of requisition of the Ship for hire, remuneration for salvage
and towage services, demurrage and detention moneys and damages for breach
(or payments for variation or termination) of any charterparty or other
contract for the employment of the
Ship;
|
|
(b)
|
all
moneys that are at any time payable under Insurances in respect of loss of
earnings; and
|
|
(c)
|
if
and whenever the Ship is employed on terms whereby any moneys falling
within paragraph (a) or (b) above are pooled or shared with any other
person, that proportion of the net receipts of the relevant pooling or
sharing arrangement that is attributable to the
Ship;
|
|
(a)
|
any
commercial bank organized under the laws of the United States, or any
State thereof, and having total assets in excess of
$1,000,000,000;
|
|
(b)
|
any
commercial bank organized under the laws of any other country that is a
member of the OECD or has concluded special lending arrangements with the
International Monetary Fund Associated with its General Arrangements to
Borrow, or a political subdivision of any such country, and having total
assets in excess of $1,000,000,000, so long as such bank is acting through
a branch or agency located in the United States or in the country in which
it is organized or another country that is described in this
paragraph (b);
|
|
(d)
|
any
finance company, insurance company or other financial institution or fund
(whether a corporation, partnership, trust or other entity) that (i) is
not affiliated with the Borrower, (ii) is engaged in making, purchasing or
otherwise investing in commercial loans in the ordinary course of its
business and (iii) has total assets in excess of $1,000,000,000;
and
|
|
(e)
|
any
other person (other than an Affiliate of the Borrower or the Guarantor)
approved by the Agent and the Borrower and having assets in excess of
$1,000,000,000, such approval not to be unreasonably
withheld;
|
|
(a)
|
for
principal, interest or any other sum payable in respect of any moneys
borrowed or raised by such person;
|
|
(b)
|
under
any bond, note or other security issued by such
person;
|
|
(c)
|
under
any acceptance credit, guarantee or letter of credit facility made
available to such person;
|
|
(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 such person;
|
|
(e)
|
under
any interest or currency swap or any other kind of derivative transaction
entered into by such person or, if the agreement under which any such
transaction is entered into requires netting of mutual liabilities, the
liability of such person for the net amount;
or
|
|
(f)
|
under
a guarantee, indemnity or similar obligation entered into by such person
in respect of a liability of another person which would fall within any of
paragraphs (a) through (e) above, inclusive, if the references to such
person referred to such other
person;
|
|
(a)
|
all
policies and contracts of insurance, including entries of the Ship in any
protection and indemnity or war risks association, that are effected in
respect of the Ship, her Earnings or otherwise in relation to her;
and
|
|
(b)
|
all
rights and other assets relating to, or derived from, any of the
foregoing, including any rights to a return of a
premium;
|
|
(a)
|
the
International Safety Management Code (including the guidelines on its
implementation) adopted by the International Maritime Organization (“
IMO
”) as
Resolution A.741(18) and Resolution A.913(22) (superseding
Resolution A.788(19)) (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);
and
|
|
(b)
|
all
further resolutions, circulars, codes, guidelines, regulations and
recommendations which are now or in the future issued by or on behalf of
the IMO or any other entity with responsibility for implementing the ISM
Code;
|
|
(a)
|
the
Document of Compliance and Safety Management Certificate issued pursuant
to the ISM Code in relation to the Ship within the periods specified by
the ISM Code;
|
|
(b)
|
all
other documents and data that are relevant to the safety management system
and its implementation and verification that the Agent may require;
and
|
|
(c)
|
all
other documents that are prepared or that are otherwise relevant to
establish and maintain the Ship’s compliance or the compliance of the
Borrower, the Approved Manager (technical) or any Approved Technical
Submanager with the ISM Code that the Agent may
require;
|
|
(a)
|
each
and every person who has assumed responsibility for the operation of the
Ship and has agreed to take over or is required to assume responsibility
for the performance or observance of the duties and responsibilities
imposed by the ISM Code; and
|
|
(b)
|
each
and every person ashore who is a ‘designated person’ for the purposes of
the ISM Code with direct access to the highest level of management of the
Ship’s owner or operator and who, in that capacity, has under the ISM Code
responsibility and authority which
includes:
|
|
(i)
|
monitoring
the safety and pollution prevention aspects of the operation of the Ship;
and
|
|
(ii)
|
ensuring
that adequate resources and shore based support are supplied, as required,
in each case, under the ISM Code;
|
|
(a)
|
the
rate per annum equal to the offered quotation for deposits in Dollars for
a period equal to, or as near as possible equal to, the relevant Interest
Period which appears on Reuters BBA Page LIBOR 01 at or about 11.00 a.m.
(London time) on the Quotation Date for that Interest Period (and, for the
purposes of this Agreement, “
BBA Page
|
|
|
LIBOR
01
”
means that
Reuters’ page or such other page as may replace that page on that service
for the purpose of displaying rates comparable to that rate or on such
other service as may be nominated by the British Bankers’ Association as
the information vendor for the purpose of displaying British Bankers’
Association Interest Settlement Rates for Dollars)
provided
that
should there be a discrepancy between the rate
appearing on BBA Page LIBOR 01 mentioned above and the actual rate at
which deposits in Dollars are offered by leading banks in the London
Interbank Market the “actual” rate (determined in its absolute discretion,
acting reasonably) available to the Agent shall be the rate used in
determining LIBOR;
or
|
|
(b)
|
if
no rate is quoted on BBA Page LIBOR 01, the rate per annum determined by
the Agent to be the arithmetic mean (rounded upwards, if necessary, to the
nearest one-sixteenth of one percent) of the rates per annum notified to
the Agent by each Reference Bank as the rate at which deposits in Dollars
are offered to that Reference Bank by leading banks in the London
Interbank Market at that Reference Bank’s request at or about 11:00 a.m.
(London time) on the Quotation Date for that Interest Period for a period
equal to that Interest Period and for delivery on the first Business Day
of it;
|
|
(b)
|
a
country in which the company’s central management and control is or has
recently been exercised;
|
|
(c)
|
a
country in which the overall net income of the company is subject to
corporation tax, income tax or any similar
tax;
|
|
(d)
|
a
country in which assets of the company (other than securities issued by,
or loans to, related companies) having a substantial value are situated,
in which the company maintains a permanent place of business, or in which
a Security Interest created by the company must or should be registered to
ensure its validity or priority;
|
|
(e)
|
a
country the courts of which have jurisdiction to make a winding-up,
administration or similar order in relation to the company or would have
such jurisdiction if their assistance were requested by the courts of a
country referred to in paragraph (b) or (c) of this definition;
and
|
|
(f)
|
any
political subdivision of any of the
foregoing;
|
|
(b)
|
the
amount that would be payable by the Borrower pursuant to
Section 6(e)(i) of the Master Agreement if an Early Termination Date
(as such term is defined in the Master Agreement) were deemed to have
occurred in relation to all Designated Transactions existing at such time
following an Event of Default by the
Borrower;
|
|
“
Requisition
Compensation
” includes all compensation or other moneys payable by
reason of any act or event such as is referred to in paragraph (b) of
the definition of “Total Loss”;
|
|
(e)
|
all
other documents (whether creating a Security Interest or not) that are
executed at any time by either Obligor or any other person as security
for, or to establish any form of subordination or priorities arrangement
in relation to, any amount payable to or for the benefit of a Lender, the
Swap Bank, the Agent or the Security Trustee under this Agreement or any
other Finance Document;
|
|
(a)
|
a
mortgage, charge or pledge, any maritime or other lien or any other
security interest of any kind;
|
|
(b)
|
the
rights of the plaintiff under an action
in rem
in which the
vessel concerned has been arrested or a writ has been issued or similar
steps taken; and
|
|
(c)
|
any
arrangement entered into by a person, the effect of which is to place
another person in a position that is similar, in economic terms, to the
position in which such other person would have been had such other person
held a security interest over an asset of such person; but this paragraph
(c) shall 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 Period
” means
the period commencing on the date of this Agreement and ending on the date
on which the Agent notifies the Borrower
that:
|
|
(a)
|
all
amounts that have become due for payment by the Borrower 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)
|
no
Obligor has any future or contingent liability under Clause 16 or 17
or any other provision of this Agreement or any other Finance Document;
and
|
|
(d)
|
no
Credit Party believes 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
an Obligor 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;
|
|
(b)
|
any
expropriation, confiscation, requisition or acquisition of the Ship,
whether for full consideration, a consideration less than her 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 one year
without any right to an extension;
|
|
(c)
|
any
final and non-appealable condemnation of the Ship by any tribunal or by
any person or persons claiming to be a tribunal;
or
|
|
(d)
|
any
arrest, capture, seizure or detention of the Ship (including any hijacking
or theft) unless she is within 60 days redelivered to the full control of
the Borrower;
|
|
(a)
|
in
the case of an actual loss of the Ship, the date on which it occurred or,
if that is unknown, the date when the Ship was last heard
from;
|
|
(b)
|
in
the case of a constructive, compromised, agreed or arranged total loss of
the Ship, the earliest of:
|
|
(c)
|
in
the case of any other type of total loss of the Ship, the date (or the
most likely date) on which it appears to the Majority Lenders that the
event constituting such total loss
occurred;
|
1.2
|
Additional Financial
Terms
. Subject to Clause 1.5, in this Agreement and
the other Finance Documents:
|
|
(b)
|
deducting
any amount shown in such consolidated balance sheet in respect of goodwill
(including goodwill arising on consolidation) and other intangible
assets;
|
|
(c)
|
deducting
(so far as not otherwise excluded as attributable to minority interests) a
sum equal to the aggregate of the amount of which the book value of any
fixed assets of any member of the Group has been written up after December
31, 2005 (or, in the case of a company becoming a subsidiary after that
date, the date on which that company became a subsidiary) by way of
revaluation and, for the purposes of this paragraph (c) any increase
in the book value of any fixed assets resulting from its transfer by one
member of the Group to another member of the Group shall be deemed to
result from a writing up of its book value by way of
revaluation;
|
|
(d)
|
excluding
amounts set aside for taxation as at the date of such balance sheet and
making such adjustments as may be appropriate in respect of any
significant additional taxation expected to result from transactions
carried out by any member of the Group after such date and not reflected
in that balance sheet;
|
|
(e)
|
deducting
all amounts attributable to minority interests in
subsidiaries;
|
|
(f)
|
making
such adjustments as may be appropriate in respect of any variation in the
amount of such paid up spare capital or any such reserves after the date
of the relevant balance sheet (but so that no such adjustment shall be
made in respect of any variation in profit and loss account except to the
extent of any profit or loss, calculated on a cumulative basis, recorded
in the consolidated profit and loss account of the Group delivered to the
Agent before the date of this Agreement, or under Clause 10.1(f) in
respect of any subsequent period);
|
|
(g)
|
making
such adjustments as may be appropriate in respect of any distribution
declared, recommended or made by any member of the Group (otherwise than
attributable directly or indirectly to the Guarantor) out of profits
earned up to and including the date of the latest audited balance sheet of
that member of the Group to the extent that such distribution is not
provided for in that balance sheet;
|
|
(h)
|
making
such adjustments as may be appropriate in respect of any variation in the
interests of the Guarantor in its subsidiaries since the date of the
latest published audited consolidated balance sheet of the Group;
and
|
|
(i)
|
if
the calculation is required for the purpose of or in connection with a
transaction under or in connection with when any company is to become or
cease to be a subsidiary of the Guarantor, making all such adjustments as
would be appropriate if that transaction has been carried into
effect;
|
|
(b)
|
bonds,
notes, loan stock, debentures, commercial paper or other debt securities
issued by the Guarantor or any of its subsidiaries not for the time being
beneficially owned by the Guarantor or any of its
subsidiaries;
|
|
(c)
|
sums
outstanding under acceptances by the Guarantor or any of its subsidiaries
or by any bank or acceptable house under acceptance credits opened on
behalf of the Guarantor or any
subsidiary;
|
|
(d)
|
deferred
indebtedness of the Guarantor or any of its subsidiaries for payment of
the acquisition or construction price for assets or services acquired or
constructed;
|
|
(g)
|
the
nominal amount of any issued and paid up share capital (other than equity
share capital) of any subsidiary not beneficially owned by the Guarantor
or another subsidiary;
|
|
(i)
|
indebtedness
secured by any Security Interest over all or any part of the undertaking,
property, assets, rights or revenues of the Guarantor or any of its
subsidiaries irrespective of whether or not such indebtedness is supported
by a personal covenant on the part of the Guarantor or any of its
subsidiaries;
|
|
(j)
|
indebtedness
incurred in respect of swaps, forward exchange contracts, futures or other
derivatives;
|
|
(k)
|
any
other liability arising from a transaction having the commercial effect of
a borrowing or the raising of money;
and
|
|
(l)
|
obligations
under guarantees in respect of the obligations of any other person which,
if such person were the Guarantor or a subsidiary would fall within any of
paragraphs (a) through (k) above,
inclusive;
|
|
(a)
|
the
value (less depreciation computed in accordance with generally accepted
international accounting principles consistently applied) on a
consolidated basis of all tangible fixed assets of the Group, including
long-term cash receivables (seller’s credit), as stated in the relevant
consolidated financial statements of the Group, but excluding any ships at
the relevant time owned by members of the Group which, for the purposes of
such consolidated financial statements, are included in the consolidated
tangible fixed assets of the Group (the “
Relevant Ships
”);
and
|
|
(b)
|
the
aggregate of the market value of the Relevant Ships, as such market value
shall have been most recently determined (as of the date of the relevant
calculation) pursuant to Clause 10.1(v) by means of valuations
obtained by the Agent in accordance therewith (and not the value of the
Relevant Ships as stated in the relevant consolidated financial statements
of the Group).
|
1.3
|
Construction of Certain
Terms
. In this Agreement and the other Finance
Documents:
|
1.4
|
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 last 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;
|
1.5
|
Meaning of
“subsidiary”
. A company (S) is a subsidiary of another
company (P) (the “
parent
company
”) if:
|
|
(a)
|
a
majority of the issued equity in S (or a majority of the issued equity in
S that carries unlimited rights to capital and income distributions) is
directly owned by P or is indirectly attributable to P;
or
|
|
(b)
|
P
has direct or indirect control over a majority of the voting rights
attaching to the issued shares of S;
or
|
|
(c)
|
P
has the direct or indirect power to appoint or remove a majority of the
directors of S; or
|
|
(d)
|
P
otherwise has the direct or indirect power to ensure that the affairs of S
are conducted in accordance with the wishes of
P;
|
1.6
|
General
Interpretation
.
|
(a)
|
In
this Agreement and the other Finance
Documents:
|
(i)
|
references
to, or to a provision of, a Finance Document or any other document are
references to it as amended, restated or otherwise modified, whether
before the date of this Agreement or otherwise, except that any reference
to, or to a provision of, any Junior Loan Document shall include such
Junior Loan Document or provision, as the case may be, as amended,
restated or otherwise modified, but only with the prior written consent of
the Agent;
|
|
(ii)
|
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; | |
(iii)
|
references to “including” shall mean including without limiting the generality of any description preceding such term; | |
(iv)
|
any
reference in any Finance Document to a clause, sub-clause, paragraph,
schedule, exhibit, annex or appendix shall be construed to mean a clause,
sub-clause or paragraph thereof, or a schedule, exhibit, annex or appendix
thereto, respectively;
|
|
(v)
|
words
denoting the singular number shall include the plural and vice versa;
and
|
|
(vi)
|
Clauses 1.1
through 1.5 and this paragraph (a) apply unless the contrary
intention appears;
|
|
(b)
|
References
in Clause 1.1 to a document being in the form of a particular
appendix, exhibit, schedule or annex include references to that form with
any modifications to that form that the Agent shall approve or reasonably
require; and
|
(c)
|
The
table of contents and the headings of the clauses, sub-clauses,
paragraphs, schedules, exhibits, annexes or appendices of this Agreement
or any other Finance Document shall not affect the interpretation of this
Agreement or any other Finance
Document.
|
2
|
FACILITY
|
2.1
|
Amount of
Facility
. Subject to the other provisions of this
Agreement, the Lenders severally agree to make available to the Borrower a
loan facility in the aggregate principal amount of up to $48,000,000 (the
“
Initial Aggregate
Commitment
”).
|
2.2
|
Purpose of
Loan
. The Borrower undertakes to use the Loan only for
the purposes stated in the recitals to this Agreement and in accordance
with Clause 3.2(b).
|
3
|
DRAWDOWN
|
3.1
|
Request for the
Advance
. Subject to the following conditions, the
Borrower may request the Advance by delivering to the Agent a completed
Drawdown Notice in respect of the Advance not later than 11:00 a.m. (New
York time) three Business Days prior to the
|
|
Expected
Drawdown Date thereof. The Agent shall promptly notify the
Lenders that it has received the Drawdown Notice and shall inform each
Lender of:
|
(a)
|
the
amount of the requested Advance and the Expected Drawdown Date
thereof;
|
(b)
|
the
amount of each Lender’s Ratable Portion of the Advance;
and
|
(c)
|
the
duration of the first Interest Period applicable to the
Advance.
|
3.2
|
Conditions to
Availability
. The conditions referred to in
Clause 3.1 are that:
|
(a)
|
the
Expected Drawdown Date shall be a Business Day during the Availability
Period;
|
(b)
|
the
Advance shall be applied as payment for the acquisition of the Ship by the
Borrower that shall not then own the Ship and shall not (i) exceed
the purchase price of the Ship as stated in the Memorandum of Agreement
for the Ship or (ii) exceed the lesser of the Initial Aggregate Commitment
and the sum of all Commitments;
|
(c)
|
there
shall be no more than one Advance;
and
|
(d)
|
the
applicable conditions precedent stated in Clause 8 shall have been
satisfied or waived as provided
therein.
|
3.3
|
Drawdown Notice
Irrevocable
. The Drawdown Notice must be signed by an
officer or duly authorized attorney-in-fact of the Borrower; and once
served, the Drawdown Notice cannot be revoked without the prior consent of
the Agent, acting with the authority of the Majority
Lenders.
|
3.4
|
Disbursement of
Advance
. Subject to the provisions of this
Agreement:
|
(a)
|
Each
Lender shall before 11:00 a.m. (New York City time) make its Ratable
Portion of the Advance available to the Agent, for the account of the
Borrower, on and with the value date of the Expected Drawdown Date for the
Advance. After the Agent’s receipt of such funds and upon
fulfillment or waiver of the applicable conditions set forth in
Clause 8, the Agent shall make such funds available to the Borrower
by paying such funds to such account or accounts that the Borrower
specifies in the Drawdown Notice. The payment by the Agent
under this Clause 3.4 to such account or accounts shall constitute
the making of the Advance to the Borrower and the Borrower shall thereupon
become indebted, as principal and direct obligor, to each Lender in an
amount equal to such Lender’s Ratable Portion of the
Advance.
|
(b)
|
Unless
the Agent shall have received notice from a Lender prior to the Expected
Drawdown Date that such Lender will not make available to the Agent such
Lender’s Ratable Portion of the Advance, the Agent may assume, or at its
option request confirmation from such Lender, that such Lender has made
its Ratable Portion available to the Agent on such date in accordance with
Clause 3.4(a) and the Agent may, in reliance upon such assumption or
confirmation (as the case may be), make available to the Borrower on such
date a corresponding amount. If and to the extent that such
Lender shall not have so made such Ratable Portion available to the Agent,
such Lender and the Borrower (but without duplication) severally agree to
repay to
|
|
the
Agent forthwith on demand such corresponding amount, together with
interest thereon, for each day from the date such amount is made available
to the Borrower by the Agent until the date such amount is repaid to the
Agent, at the LIBOR rate for
overnight
or weekend deposits. If such Lender shall pay to the Agent such
corresponding amount, such amount so paid shall constitute such Lender’s
Ratable Portion of the Advance for purposes of this
Agreement. Nothing in this Clause 3.4(b) shall be deemed
to relieve any Lender of its obligation to make the Advance to the extent
provided in this Agreement.
|
(c)
|
In
the event that the Borrower is required to repay all or a portion of the
Advance pursuant to Clause 3.4(b), as between the Borrower and the
defaulting Lender, the liability for any breakage costs as described in
Clause 16.2 shall be borne by the defaulting Lender,
provided that
if the
defaulting Lender has not paid any such breakage costs upon demand by the
Agent therefor, the Borrower shall pay such breakage costs upon demand by
the Agent and the Borrower shall be entitled to recover from the
defaulting Lender any such payment for breakage costs made by the
Borrower.
|
4
|
INTEREST
|
4.1
|
Payment of Normal
Interest
. Subject to the provisions of this Agreement,
interest on the Advance or any part thereof in respect of each Interest
Period shall be paid by the Borrower on the last day of that Interest
Period.
|
4.2
|
Normal Rate of
Interest
. Subject to the provisions of this Agreement,
the rate of interest on the Advance or any part thereof in respect of an
Interest Period shall be the sum of the Margin and LIBOR for that Interest
Period.
|
4.3
|
Payment of Accrued
Interest
. Accrued interest shall be paid on the last day
of each month and on the last day of each Interest
Period.
|
4.4
|
Notification of Interest
Rate
. The Agent shall notify the Borrower and each
Lender of the rate of interest as soon as it is
determined.
|
4.5
|
Notification of Market
Disruption
. The Agent shall promptly notify the Borrower
if:
|
(a)
|
it
is unable to determine LIBOR; or
|
(b)
|
for
any reason any Lender (the “
Affected Lender
”) is
unable to obtain Dollars in the London Interbank Market to fund all or any
part of its Ratable Portion of the Advance during any Interest
Period,
|
4.6
|
Suspension of
Drawdown
. If the Agent’s notice under Clause 4.5
shall be served before the Advance is made, then while the circumstances
referred to in the Agent’s notice
continue:
|
(a)
|
in
the case of Clause 4.5(a), each Lender’s obligation to make its
Ratable Portion of the Advance shall be suspended;
and
|
(b)
|
in
the case of Clause 4.5(b), the Affected Lender’s obligation to make
its Ratable Portion of the Advance shall be
suspended.
|
4.7
|
Negotiation of Alternative Rate
of Interest
. If the Agent’s notice under Clause 4.5
is served after the Advance is made, the Borrower and the Agent shall use
reasonable endeavors to agree, within the 30 days after the date on which
the Agent serves its notice under Clause 4.5 (the “
Negotiation Period
”), an
alternative interest rate or (as the case may be) an alternative basis for
each Lender or (as the case may be) the Affected Lender to fund or
continue to fund its Ratable Portion of the Advance during the Interest
Period concerned.
|
4.8
|
Application of Agreed
Alternative Rate of Interest
. Any alternative interest
rate or an alternative basis that is agreed during the Negotiation Period
shall take effect in accordance with the terms
agreed.
|
4.9
|
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 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 Ratable Portion of the Advance plus the Margin and the procedure
provided for by this Clause 4.9 shall be repeated if the relevant
circumstances are continuing at the end of the interest period so set by
the Agent.
|
4.10
|
Notice of
Prepayment
. If the Borrower does not agree with an
interest rate set by the Agent under Clause 4.9, the Borrower may
give the Agent not less than three Business Days’ notice of its intention
to prepay the Advance at the end of the interest period set by the
Agent.
|
4.11
|
Prepayment
. A
notice under Clause 4.10 shall be irrevocable. The Agent
shall promptly notify the Lenders or (as the case may be) the Affected
Lender of the Borrower’s notice of intended prepayment
and:
|
(a)
|
on
the date on which the Agent so notifies the Lenders or (as the case may
be) the Affected Lender, the Commitments or (as the case may be) the
Commitment of the Affected Lender shall be cancelled;
and
|
(b)
|
on
the last Business Day of the interest period set by the Agent, the
Borrower shall prepay the Loan or (as the case may be) the Affected
Lender’s Ratable Portion thereof, together with accrued interest thereon
at the applicable rate plus the
Margin.
|
4.12
|
Application of
Prepayment
. The provisions of Clause 7 shall apply
in relation to each prepayment pursuant to
Clause 4.11.
|
5
|
INTEREST
PERIODS
|
5.1
|
Duration of Normal Interest
Periods
. Subject to Clauses 5.2 and 5.3, each
Interest Period shall be:
|
(a)
|
one,
three or six months, but no more than three one-month periods in any
one-year period and provided that no such period shall overrun the first
anniversary of the Actual Drawdown Date, in each case as notified by the
Borrower to the Agent not
|
|
later
than 11:00 a.m. (New York time) three Business Days before the
commencement of such Interest Period;
or
|
(b)
|
three
months or, if such Interest Period would overrun the first anniversary of
the Actual Drawdown Date, a shorter period ending on such anniversary, if
the Borrower fails to notify the Agent by the time specified in
paragraph (a) above; or
|
(c)
|
such
other period as the Majority Lenders may agree with the Borrower,
provided that
if the
Borrower desires an Interest Period longer than six months, the Borrower
must notify the Agent not later than 11:00 a.m. (New York time) five
Business Days before the commencement of such Interest
Period.
|
5.2
|
Duration of Interest Periods
Overrunning Repayment Date.
If the Borrower has selected
an Interest Period that would overrun a Repayment Date or Repayment Dates,
then:
|
(a)
|
in
the case of the final Repayment Date, the Interest Period shall end on the
final Repayment Date; and
|
(b)
|
in
the case of any other Repayment Date, the Loan shall be divided so
that:
|
(i)
|
the
amount of each repayment installment falling due before the end of the
Interest Period selected shall have an Interest Period ending on the
Repayment Date on which it falls due;
and
|
(ii)
|
the
balance of the Loan from time to time outstanding during such Interest
Period shall have an Interest Period ascertained in accordance with the
provisions of Clause 5.1;
|
5.3
|
Duration of First Interest
Period
.
|
(a)
|
The
first Interest Period of the Advance shall commence on the Expected
Drawdown Date and shall expire on the last day of the Interest Period
selected by the Borrower in the Drawdown
Notice.
|
(b)
|
Each
Interest Period following the first Interest Period under
Clause 5.3(a) shall commence on the expiry of the preceding Interest
Period and end on the last day of the Interest Period selected by the
Borrowers pursuant to the provisions of
Clause 5.1.
|
6
|
DEFAULT
INTEREST
|
6.1
|
Payment of Default Interest on
Overdue Amounts
. The Borrower shall pay interest in
accordance with the following provisions of this Clause 6 on all
amounts payable by the Borrower under any Finance Document that the Agent,
the Security Trustee or a Lender, as
|
|
the
case may be, shall not receive on or before the date on which a Finance
Document provides that such amount is due for
payment.
|
6.2
|
Rate of Default
Interest
. Overdue principal and, to the extent permitted
by applicable law, overdue interest in respect of the Advance and every
other overdue amount payable by either Obligor pursuant to Finance
Documents shall accrue interest from (and including) the date due until
the date of actual payment (as well after as before judgment) at the rate
per annum determined by the Agent to be two percent plus the Margin plus
LIBOR for a period of one month (determined by the Agent on the first
Business Day of each calendar
month).
|
6.3
|
Notification of Default Rates
of Interest
. The Agent shall promptly notify the
Borrower of each interest rate determined by the Agent pursuant to
Clause 6.2, but such notice shall not be taken to imply that the
Borrower is obligated to pay such interest only with effect from the date
of such notice.
|
6.4
|
Payment of Accrued Default
Interest
. Subject to the other provisions of this
Agreement, all interest accruing under this Clause 6 shall be due and
payable on demand.
|
7
|
REPAYMENT
AND PREPAYMENT
|
7.1
|
Amount of Repayment
Installments
. The Borrower shall repay the Loan in the
following twenty consecutive quarterly
installments:
|
(a)
|
each
of the first three of which shall be in an amount equal to the lesser of
the aggregate outstanding principal amount of the Loan and
$3,500,000;
|
(b)
|
the
next one of which shall be in an amount equal to the lesser of the
aggregate outstanding principal amount of the Loan and
$9,500,000;
|
(c)
|
each
of the next four of which shall be in an amount equal to the lesser of the
aggregate outstanding principal amount of the Loan and
$2,500,000;
|
(d)
|
each
of the next eleven of which shall be in an amount equal to the lesser of
the aggregate outstanding principal amount of the Loan and $600,000;
and
|
(e)
|
the
last of which shall be payable on the Maturity Date in an amount equal to
the aggregate outstanding principal amount of the
Loan,
|
|
(a)
|
each
of the first eight of which shall be in an amount equal to the lesser of
the aggregate outstanding principal amount of the Loan and
$3,500,000;
|
|
(b)
|
each
of the next four of which shall be in an amount equal to the lesser of the
aggregate outstanding principal amount of the Loan and
$1,100,000;
|
|
(c)
|
each
of the next seven of which shall be in an amount equal to the lesser of
the aggregate outstanding principal amount of the Loan and $600,000;
and
|
|
(d)
|
the
last of which shall be payable on the Maturity Date in an amount equal to
the aggregate outstanding principal amount of the Loan;
or
|
|
(a)
|
each
of the first three of which shall be in an amount equal to the lesser of
the aggregate outstanding principal of the Loan and
$3,500,000;
|
|
(b)
|
the
next one of which shall be in an amount equal to the lesser of the
aggregate outstanding principal amount of the Loan and
$3,000,000;
|
|
(c)
|
each
of the next eight of which shall be in an amount equal to the lesser of
the aggregate outstanding principal amount of the Loan and
$2,550,000;
|
|
(d)
|
each
of the next seven of which shall be in an amount equal to the lesser of
the aggregate outstanding principal amount of the Loan and $600,000;
and
|
|
(e)
|
the
last of which shall be payable on the Maturity Date in an amount equal to
the aggregate outstanding principal amount of the
Loan.
|
7.2
|
Repayment
Dates
. The first repayment installment shall be made on
the First Repayment Date. Each subsequent repayment installment
shall be repaid quarterly thereafter;
provided that
the last
repayment installment shall be repaid on the Maturity Date together with
all other sums then accrued or owing under the Finance
Documents.
|
7.3
|
Voluntary
Prepayment
. The Borrower may prepay the whole or any
part of the Loan on the last day of an Interest Period, subject to the
following conditions:
|
(a)
|
each
partial prepayment shall be in an amount not less than $500,000 and
increments of an integral multiple of
$500,000;
|
(b)
|
the
Agent shall have received from the Borrower at least five Business 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 shall have provided evidence satisfactory to the Agent that any
consent required by the Borrower in connection with the prepayment shall
have been obtained and remains in force and that each regulation relevant
to this Agreement that affects the Borrower shall have been complied
with.
|
7.4
|
Mandatory
Prepayment
.
|
(a)
|
If
the Ship is sold or becomes a Total Loss, the Borrower shall prepay the
aggregate outstanding principal amount of the
Loan.
|
(b)
|
If
(i) the Borrower shall not have (A) elected Option B in
accordance with the first proviso to Clause 7.1 and
(B) delivered to the Agent, at least twenty Business Days prior to
the first anniversary of the Actual Drawdown Date, an irrevocable notice
of its election to continue the term of the Loan beyond such anniversary
and, on or before such anniversary, a written appraisal report prepared by
the Broker stating the Fair Market Value of the Ship as of such
anniversary, which Fair Market Value shall not be less than 140% of the
sum of the aggregate outstanding principal amount of the Loan, plus all
accrued and unpaid interest thereon, plus all other amounts due and
payable by the Borrower pursuant to the Finance Documents as of such
anniversary, and which report shall otherwise be in form and substance
satisfactory to the Agent, or (ii) either the Borrower or the
Guarantor shall not have paid all fees due and payable by it pursuant to
this Agreement and the Finance Documents on or before such anniversary,
the Borrower shall prepay the aggregate outstanding principal amount of
the Loan.
|
(c)
|
The
Borrower shall make each mandatory prepayment pursuant to this
Clause 7.4:
|
(i)
|
in
the case of the sale of the Ship requiring a prepayment pursuant to
Clause 7.4(a), on or before the date on which the sale is completed
by delivery of the Ship to the buyer;
or
|
(ii)
|
in
the case of a Total Loss of the Ship requiring a prepayment pursuant to
Clause 7.4(a), on the earlier of the date falling 180 days after the
Total Loss Date and the date of receipt by the Security Trustee or the
Borrower of the proceeds of insurance relating to such Total
Loss;
|
(iii)
|
in
the case of (A) the Borrower’s failure to elect Option B in
accordance with the first proviso to Clause 7.1 and to deliver the
irrevocable notice and the written appraisal report described in
Clause 7.4(b) or (B) the Borrower’s or the Guarantor’s failure to pay
the fees described in such Clause
|
|
7.4(b) requiring
a prepayment pursuant to Clause 7.4(b), on or before the first
anniversary of the Actual Drawdown
Date.
|
7.5
|
Amounts Payable on
Prepayment
. Each prepayment pursuant to Clause 7.3
or 7.4 shall be made together with:
|
(a)
|
any
and all accrued interest (and any other amount payable under
Clause 16.1 or otherwise) in respect of the amount
prepaid;
|
(b)
|
if
the prepayment is not made on the last day of an Interest Period, any and
all sums payable under Clause 16.2;
and
|
(c)
|
any
and all additional amounts that may need to be paid for the Borrower to
remain in compliance with the requirements of
Clause 10.3.
|
7.6
|
Application of
Prepayments
. Each prepayment pursuant to Clause 7.3
shall be applied pro-rata to the repayment installments (excluding the
balloon payment, if any due on the Maturity Date) of the Loan, and
promptly thereafter the Agent shall recalculate the remaining repayment
installments and advise the Borrower
accordingly.
|
7.7
|
No
Reborrowing
. No amount repaid or prepaid may be
reborrowed.
|
7.8
|
Unwinding of Designated
Transactions
. On or prior to any repayment or prepayment
under this Clause 7 or any other provision of this Agreement, the
Borrower shall wholly or partially reverse, offset, unwind or otherwise
terminate one or more of the continuing Designated Transactions to the
extent necessary to ensure that the aggregate notional principal amount of
the continuing Designated Transactions thereafter remaining does not and
will not in the future (taking into account the scheduled amortization
thereof) exceed the aggregate amount of the Loan scheduled to be
outstanding from time to time
hereunder.
|
7.9
|
Repayment of Swap
Benefit
. If a Designated Transaction is terminated in
circumstances in which the Swap Bank would be obliged to pay an amount to
the Borrower under the Master agreement, the Borrower hereby agrees that
such payment shall be applied in prepayment of the Loan in accordance with
the terms of Clause 7.6 and hereby authorizes the Swap Bank to pay
such amount to the Agent for such
purpose.
|
8
|
CONDITIONS
PRECEDENT
|
8.1
|
Documents, Fees and No
Default
. Each Lender’s obligation to make available its
Ratable Portion of the Advance is subject to the following conditions
precedent:
|
(a)
|
on
or before the delivery of the Drawdown Notice, the Agent shall have
received:
|
(i)
|
the
documents described in Part A of Schedule 3, each in form and
substance satisfactory to the Agent and its lawyers;
and
|
(ii)
|
such
documentation and other evidence as is reasonably requested by the Agent
or a Lender in order for each Lender to carry out and be satisfied with
the results of all necessary “know your customer” or other checks that it
is required to carry out in relation to the transactions contemplated by
this
|
|
Agreement
and the other Finance Documents, including obtaining, verifying and
recording certain information and documentation that will allow the Agent
and each Lender to identify the Borrower and the Guarantor in accordance
with the requirements of the USA PATRIOT Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)) (the “
PATRIOT
Act
”);
|
(b)
|
on
or before the Expected Drawdown Date, the Agent shall have received the
documents described in Part B of Schedule 3, each in form and
substance satisfactory to the Agent and its
lawyers;
|
(c)
|
the
Borrower shall have paid in full all fees and expenses referred to in
Clause 15 that are due, or demanded by the Agent, on or before the
date of the Advance;
|
(d)
|
on
the date of the Drawdown Notice, the Expected Drawdown Date and the Actual
Drawdown Date:
|
(i)
|
no
Event of Default or Potential Event of Default shall have occurred and be
continuing or would result from the borrowing of the Loan or any part
thereof;
|
(ii)
|
the
representations and warranties in Clause 9 and those of each Obligor
in any other Finance Document would be true and not misleading if repeated
on each of those dates with reference to the circumstances then
existing;
|
(iii)
|
there
has been no material change in the financial condition, assets, operations
or business prospects of either of the Obligors since the date on which
either Obligor provided information concerning those topics to the Agent
or any Lender; and
|
(iv)
|
none
of the circumstances described in Clause 4.5 shall have occurred and
be continuing;
|
(e)
|
if
the ratio set out in Clause 10.3 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;
and
|
(f)
|
the
Agent shall have received and found acceptable any further opinions,
consents, agreements and documents in connection with the Finance
Documents that the Agent shall have requested by notice to the
Borrower.
|
8.2
|
Waiver of Conditions
Precedent
. If the Agent, with the consent of the
Majority Lenders, permits the Advance to be borrowed before certain of the
conditions referred to in Clause 8.1 shall be satisfied, the Borrower
shall ensure that those conditions are satisfied within five Business Days
after the Actual Drawdown Date (or such longer period as the Agent may
specify).
|
9
|
REPRESENTATIONS
AND WARRANTIES
|
9.1
|
Status.
Each Obligor
is:
|
(a)
|
a
corporation duly organized, validly existing and in good standing under
the law of the Marshall Islands (in the case of the Guarantor) or Liberia
(in the case of the Borrower); and
|
(b)
|
duly
qualified and in good standing as a foreign corporation in each other
jurisdiction in which it owns or leases property or in which the conduct
of its business requires it to so qualify or be
licensed.
|
9.2
|
Company Power;
Consents
. Each Obligor has the corporate power and has
taken all action required, and no consent of any person is required,
for:
|
(a)
|
it
to own or lease and operate its properties and to carry on its business as
now conducted and as proposed to be
conducted;
|
(b)
|
it
to execute, deliver and perform its obligations under this Agreement, each
other Finance Document, the Memorandum of Agreement and each charter to
which it is or is to be a party, and to consummate the transactions
contemplated hereby and thereby;
|
(c)
|
it
to borrow under this Agreement (in the case of the Borrower) and to make
all payments contemplated by, and to comply with the obligations of, the
Finance Documents to which it is or is to be a
party;
|
(d)
|
it
to grant the liens granted or to be granted by it pursuant to the Finance
Documents to which it is or is to be a
party;
|
(e)
|
to
perfect and maintain the perfection of the liens granted or to be granted
by it pursuant to the Security Documents (including the first-priority
nature thereof); and
|
(f)
|
the
exercise by the Agent, the Security Trustee, Lenders and the Swap Bank of
their rights under the Finance Documents and the remedies in respect of
the Collateral pursuant to the Finance
Documents;
|
9.3
|
Consents Not Capable of
Revocation
. Nothing has occurred that makes any of the
consents referred to in Clause 9.2 capable of being revoked and each
Obligor is in compliance with all applicable
laws.
|
9.4
|
Legal Validity; Effective
Security Interests
.
|
(a)
|
Each
of the Memorandum of Agreement and this Agreement constitutes, and each
other Finance Document to which either Obligor is to be a party will
constitute upon the execution and delivery thereof by such Obligor, the
legal, valid and binding obligations of each Obligor party hereto or
thereto, as the case may be, enforceable against such Obligor in
accordance with its terms.
|
(b)
|
Each
Security Document creates or, upon the execution and delivery thereof by
each Obligor party thereto, will
create:
|
(i)
|
in
the case of the Mortgage, a valid first preferred mortgage in favor of the
Security Trustee over the Collateral described therein, subject to the
registration of the Mortgage as described herein;
and
|
(ii)
|
in
the case of each other Security Document, a legal, valid, binding and
enforceable Security Interest in favor of the Security Trustee over all
the Collateral described therein that shall be duly perfected and have
first priority (A) in the case of the Earnings Assignment and Charter
Assignment, upon notice thereof being given each obligor referenced
therein and proper UCC financing statements describing such Collateral
being filed with the Washington, D.C., Recorder of Deeds, and (B) in
the case of the Insurance Assignment, notice thereof being given to
underwriters and protection and indemnity clubs and their consent being
obtained where policy provisions or club rules so
require.
|
9.5
|
No Conflicts; No
Liens
. The execution, delivery and performance by each
Obligor of the Memorandum of Agreement, this Agreement and each other
Finance Document to which it is or is to be a party, the borrowing by the
Borrower of the Loan, and consummation of the transactions contemplated
hereby and thereby do not and will
not:
|
(a)
|
violate
or contravene (i) any law or regulation or order, writ, judgment,
injunction, decree, determination or award; (ii) the organizational
documents of either Obligor; or (iii) any contractual or other
obligation or restriction that is binding on either Obligor or any of its
assets; and
|
(b)
|
except
for liens created by the Security Documents, result in or require the
creation or imposition of any lien upon or with respect to any of the
properties of either Obligor.
|
9.6
|
No Withholding Taxes; Tax
Returns
.
|
(a)
|
Each
payment that an Obligor is required 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.
|
(b)
|
Each
Obligor has filed or has caused to be filed all tax returns and other
reports that it is required by law or regulation to file in any Pertinent
Jurisdiction, and has paid or caused to be paid all taxes, assessments and
other similar charges that are due and payable in any Pertinent
Jurisdiction, other than taxes and charges that are (i) not yet
delinquent or (ii) being contested in good faith by appropriate
proceedings and for which adequate reserves have been
established. The charges, accruals, and reserves on the books
of each Obligor respecting taxes are adequate in accordance with
Applicable Accounting Principles.
|
9.7
|
No
Default
. No Event of Default or Potential Event of
Default has occurred and is continuing and there is no incipient or other
default under any other agreements of either
Obligor.
|
9.8
|
Compliance with
Laws
. Each Obligor is in compliance with all laws,
orders, writs, injunctions and decrees applicable to it or any of its
assets except to the extent such non-compliance could not reasonably be
expected to have a material adverse effect on the financial condition,
assets, operations or business prospects of either Obligor or to affect
adversely the legality, validity, binding effect of enforceability of this
Agreement, any Finance Document, the Memorandum of Agreement or any
Approved Charter;
|
9.9
|
Information
. All
financial and other information that has been provided in writing by or on
behalf of each Obligor to any of the Credit Parties in connection with any
Finance Document was true and accurate at the time it was given, there are
no other facts or matters the omission of which would have made or make
any such information false or misleading and there has been no material
adverse change in the financial condition, assets, operations or business
prospects of either Obligor since the date on which such information was
provided.
|
9.10
|
No
Litigation
. No legal or administrative action involving
either Obligor (including any action relating to any alleged or actual
breach of the ISM Code or ISPS Code or any Environmental Law) has been
commenced or taken or, to either Obligor’s knowledge is likely to be
commenced or taken, that could reasonably be expected to have a material
adverse effect on the financial condition, assets, operations or business
prospects of either Obligor or to affect adversely the legality, validity,
binding effect or enforceability of this Agreement, any other Finance
Document, the Memorandum of Agreement or any Approved
Charter.
|
9.11
|
ISM Code and ISPS Code
Compliance
. The Borrower has obtained, or has caused the
Approved Manager (technical) and the Approved Technical Submanager, if
any, to obtain, all necessary ISM Code Documentation in connection with
the Ship and its operation and will be, and will cause the Ship, the
Approved Manager and the Approved Technical Submanager, if any, to be, in
full compliance with the ISM Code and the ISPS
Code.
|
9.12
|
Validity
and Completeness of Memorandum of Agreement and
Charters
|
(a)
|
The
Borrower has executed and delivered the Memorandum of Agreement and a
charter in respect of the Ship and such Memorandum of Agreement and
charter constitute the valid, binding and enforceable obligations of the
parties thereto in accordance with their terms and is in full force and
effect. True and complete copies of the Memorandum of Agreement
and each Approved Charter, each agreement, instrument and other document
delivered in connection therewith, and each amendment thereto and waiver
thereof have been delivered to the Agent and the
Lenders.
|
(b)
|
There
is no default on the part of the Borrower or, to the best knowledge of the
Borrower, on the part of the relevant seller or charterer, with respect to
the Memorandum of Agreement or any Approved Charter and no party to the
Memorandum of Agreement or any Approved Charter has any right to terminate
the Memorandum of Agreement or such Approved
Charter.
|
(c)
|
There
is no, nor shall there be, any agreement or understanding to allow or pay
any rebate, premium, commission, discount or other benefit or payment
(howsoever
|
|
described)
to the Borrower or any third party in connection with the purchase of the
Ship other than as disclosed to the Agent in
writing.
|
9.13
|
Margin
Stock
. The Borrower is not engaged in the business of
extending credit for the purpose of purchasing or carrying Margin Stock
and no proceeds of the Loan will be used to buy or carry any Margin Stock
or to extend credit to others for the purpose of buying or carrying any
Margin Stock.
|
9.14
|
Compliance with Environmental
Laws; Environmentally Sensitive Material
. Except to the
extent the following could not reasonably be expected to have a material
adverse effect on the financial condition, assets, operations or business
prospects of either Obligor or that may affect adversely the legality,
validity, binding effect or enforceability of this Agreement, any other
Finance Document, the Memorandum of Agreement or any Approved
Charter:
|
(a)
|
the
operations and assets of each Obligor comply with all Environmental Laws,
all necessary Environmental Permits have been obtained and are in full
force and effect for the operations and properties of each Obligor, and
each Obligor is in compliance in all material respects with all such
Environmental Permits; and
|
(b)
|
none
of the Obligors has been notified in writing by any person that it or any
of its subsidiaries or Affiliates is potentially liable for the remedial
or other costs with respect to treatment, storage, disposal, release,
arrangement for disposal or transportation of any Environmentally
Sensitive Material, except for costs incurred in the ordinary course of
business with respect to treatment, storage, disposal or transportation of
such Environmentally Sensitive
Material.
|
9.15
|
Subsidiaries; Ownership of
Borrower
. The Borrower does not have any
subsidiaries. All of the outstanding equity of the Borrower has
been validly issued, is fully paid, non-assessable and free and clear of
all liens and is owned beneficially and of record by the
Guarantor.
|
9.16
|
Investment Company, Holding
Company, Etc.
None of the Obligors is (a) an
“investment company,” or an “affiliated person” of, or “promoter” or
“principal underwriter” for, an “investment company,” as such terms are
defined in the Investment Company Act of 1940, as amended, or (b) a
“holding company” or a “subsidiary company” of a “holding company” or an
affiliate of a “holding company” or of a “subsidiary company” of a
“holding company” or a “public utility” within the meaning of the Public
Utility Holding Company of 1935, as amended, or (c) a “public
utility” within the meaning of the Federal Power Act of 1920, as
amended.
|
9.17
|
Asset
Control
. None of the Obligors is a “national” of any
“designated foreign country” within the meaning of the Foreign Assets
Control Regulations or the Cuban Asset Control Regulations of the U.S.
Treasury Department, 31 C.F.R., Subtitle B, Chapter V, as
amended, or a “specially designated national” listed by the Office of
Foreign Assets Control (“
OFAC
”), the U.S.
Department of the Treasury, or any regulations or rulings issued
thereunder. Neither the making of the Advance nor the use of
the proceeds thereof nor the performance by the Borrower of its
obligations under any of the Finance Documents to which it is a party
violates any statute, regulation or executive order restricting loans to,
investments in, or the export of assets to, foreign countries or entities
doing business there.
|
9.18
|
ERISA
. None
of the Obligors maintains, or has ever established or maintained, any
employee benefit plan subject to Title IV of the Employee Retirement
Income Security Act of 1974, as
amended.
|
9.19
|
Use of
Proceeds
. The Borrower is using the proceeds of the Loan
only for the purposes stated in the recitals to this
Agreement.
|
9.20
|
Legal Name, Location and Place
of Business
. The Borrower’s exact legal name, as defined
in Section 9-503(a) of the UCC, is correctly set forth on the
signature pages to this Agreement. The Borrower has not
previously changed its name, location, chief executive office, only place
of business, place where it maintains its agreements, type of organization
or jurisdiction of organization. The Borrower is located
(within the meaning of Section 9-307 of the UCC) in Washington, D.C.,
and has its chief executive office or only place of business and the
location at which it conducts its affairs and keeps its records at Vas.
Sofias 1 & Meg. Alexandrou, Maroussi, Athens 151 24,
Greece.
|
9.21
|
Repetition
. The
representations and warranties contained in this Clause 9.3 shall be
deemed to be repeated by each Obligor at the commencement of each Interest
Period until all of the Outstanding Indebtedness has been paid in
full.
|
10
|
COVENANTS
|
10.1
|
Affirmative
Covenants
. From the date of this Agreement and
throughout the Security Period (unless otherwise
specified):
|
(a)
|
each
Obligor shall duly observe and perform its obligations under this
Agreement, the other Finance Documents, the Memorandum of Agreement and
the charters to which it is or will be a party, and each Obligor shall
promptly notify the Agent of (i) any material default by any party to
the Memorandum of Agreement or charter, and (ii) any significant
damage or injury caused by or to the
Ship;
|
(b)
|
each
Obligor shall notify the Agent, promptly upon becoming aware of the same,
of the occurrence of any Event of Default or Potential Event of Default or
any other event (including any litigation) that might adversely affect the
ability of any Obligor to perform its obligations under this Agreement,
any other Finance Document, the Memorandum of Agreement or any Approved
Charter;
|
(c)
|
each
Obligor shall obtain, maintain in full force and effect and comply with
the conditions and restrictions (if any) imposed in connection with each
consent, and shall do all other acts and things, that may from time to
time be necessary or required for the continued due performance of all of
its obligations under this Agreement, the other Finance Documents, the
Memorandum of Agreement and the charters to which it is a party, and shall
deliver a copy of each such consent to the Agent promptly upon its
request;
|
(d)
|
each
Obligor shall comply with all applicable federal, state, local and foreign
laws, ordinances, rules, orders and regulations now in force or hereafter
enacted, including all Environmental Laws and regulations relating to
thereto, the failure to comply with which could reasonably be expected to
have a material adverse effect on the financial
|
condition,
assets, operations or business prospects of either Obligor or to affect
adversely the legality, validity, binding effect or enforceability of this
Agreement, any other Finance Document, the Memorandum of Agreement or any
Approved Charter;
|
(e)
|
each
Obligor shall keep proper books of record and account, in which full and
materially correct entries shall be made of all financial transactions and
the assets and business of such Obligor in accordance with Applicable
Accounting Principles acceptable to the Agent, and the Agent shall have
the right to examine the books and records of the Obligors wherever the
same may be kept from time to time as it sees fit, in its sole discretion,
or to cause an examination to be made by a firm of accountants selected by
it;
|
(f)
|
the
Guarantor shall prepare and deliver to the
Agent:
|
(i)
|
within
45 days after the end of each of the first three quarters of each of its
fiscal years, the consolidated unaudited financial results of the Group in
respect of such quarter (including balance sheet, profit and loss account
and quarterly management accounts), and as soon as practicable, but not
later than 120 days after the end of each of its fiscal years, the
consolidated annual audited financial statements of the Group in respect
of such fiscal year, together with reports of and updates on all
off-balance sheet financings and time charter hire commitments of the
Borrower, in each case (A) prepared in accordance with Applicable
Accounting Principles acceptable to the Agent (and in the case of the
consolidated annual financial statements, audited by a firm of independent
auditors reasonably acceptable to the Agent) and (B) certified as
true, complete and correct by the chief financial officer of the
Guarantor;
|
(ii)
|
together
with each financial statement that the Guarantor delivers in
Clause 10.1(f)(i), a Compliance Certificate;
and
|
(iii)
|
such
other financial statements, annual budgets and projections as may be
reasonably requested by the Agent, in each case in such form as the Agent
may reasonably request;
|
(g)
|
each
Obligor shall prepare and timely file all tax returns required to be filed
by it and pay and discharge all taxes imposed upon it or in respect of any
of its property and assets before the same shall become in default, as
well as all lawful claims (including claims for labor, materials and
supplies) that, if unpaid, might become a lien or charge upon the
Collateral or any part thereof, except in each case, such taxes (i) that
are being contested in good faith by appropriate proceedings or (ii) the
failure of which to pay or discharge could not reasonably be expected to
have a material adverse effect on the financial condition, assets,
operations or business prospects of either Obligor or to affect adversely
the legality, validity, binding effect or enforceability of this
Agreement, any other Finance Document, the Memorandum of Agreement or any
Approved Charter;
|
(h)
|
each
Obligor shall permit each person designated by the Agent to visit and
inspect the Ship, at the risk and cost of the Obligors, at such times and
so often as the Agent may reasonably require,
provided that
no such
visit or inspection shall unduly interfere with the operation of the
Ship;
|
(i)
|
the
Borrower shall cause the Ship at all times to be (i) kept in a good
and safe condition and state of repair that is consistent with first class
ship ownership and management practice, (ii) in compliance with all
laws and regulations applicable to vessels registered under the law of the
Approved Flag in which the Ship is registered and trading to any
jurisdiction to which the Ship may trade from time to time,
(iii) managed by an Approved Manager, or an Approved Manager and an
Approved Technical Submanager, in accordance with vessel management
agreements and vessel technical submanagement agreements acceptable to the
Agent and that shall each have executed and delivered a Manager’s
Undertaking to the Agent, (iv) registered under the law of an
Approved Flag state, and (v) classed with the Classification Society
in the highest classification and rating for vessels of the same age and
type without any outstanding conditions or recommendations affecting class
(other than those for which the time prescribed for curing the condition
or recommendation has not passed);
|
(j)
|
the
Borrower shall (i) cause the operator of the Ship to comply, in all
material respects within the requisite applicable time limits for vessels
of the same type, size, age and flag as the Ship, with the ISM Code and,
in particular, without prejudice to the generality of the foregoing, as
and when required to do so by the ISM Code and at all times thereafter,
(ii) cause the operator of the Ship to hold a valid Document of
Compliance and Safety Management Certificate with respect to the Ship,
(iii) provide the Agent with copies of each such Document of
Compliance and Safety Management Certificate promptly following the
issuance thereof and after every renewal and (iv) cause to kept on board
the Ship a copy of such Document of Compliance and the original of such
Safety Management Certificate;
|
(k)
|
the
Borrower shall:
|
(i)
|
maintain
a valid International Ship Security Certificate with respect to the
Ship;
|
(ii)
|
cause
the Ship’s security system and associated security equipment to comply
with the applicable requirements of Chapter XI-2 of SOLAS and
Part A of the ISPS Code; and
|
(iii)
|
maintain
an approved ship security plan with respect to the
Ship;
|
(l)
|
each
Obligor shall do or cause to be done all things necessary to preserve and
keep in full force and effect its corporate
existence;
|
(m)
|
the
Borrower shall maintain insurance on the Ship as required by the terms of
the Mortgage;
|
(n)
|
each
Obligor shall maintain insurance on all of its properties other than the
Ship, payable in United States Dollars, with responsible companies, in
such amounts and against such risks as is usually carried by owners of
similar businesses and properties in the same general areas in which it
operates, and as shall be satisfactory to the Majority
Lenders;
|
(o)
|
except
as otherwise required by any Finance Document or to the extent the failure
to do so could not reasonably be expected to have a material adverse
effect on the financial condition, assets, operations or business
prospects of any Obligor or to affect adversely the legality, validity,
binding effect or enforceability of this Agreement, any other Finance
Document, the Memorandum of Agreement or any Approved Charter, each
Obligor shall maintain and preserve all of its properties that are used or
useful in the conduct of its business in good working order and condition,
ordinary wear and tear excepted;
|
(p)
|
the
Borrower shall use the proceeds of the Loan solely for the purposes
referenced in Clause 2.2;
|
(q)
|
the
Borrower shall furnish to the Agent a true and complete copy of the
Memorandum of Agreement and each charter to which it becomes a party after
the date hereof and a true and complete copy of each material amendment or
other modification thereto promptly following the execution and delivery
thereof;
|
(r)
|
each
Obligor shall take, or cause to be taken, such actions as may be
reasonably required to mitigate potential liability to it arising out of
pollution incidents or as may be reasonably required to protect the
interests of the Credit Parties with respect
thereto;
|
(s)
|
the
Borrower shall cause all loans made by the Guarantor or any other
Affiliate to it and all sums and other obligations (financial or
otherwise) owed by it to any Approved Manager to be fully subordinated to
all Secured Liabilities of the
Borrower;
|
(t)
|
the
Borrower shall procure and deliver to the Agent, in each case at the
expense of the Borrower (i) on or before the thirtieth day following each
of the second and fourth anniversaries of the Effective Date, a written
appraisal report prepared by the Broker setting forth the Fair Market
Value of the Ship as of such anniversary, and (ii) promptly following
the Agent’s request therefor so long as an Event of Default shall have
occurred and be continuing, such other interim valuation reports that the
Agent may request in each case prepared by the Broker and setting forth
the Fair Market Value of the Ship as of any date requested by the Agent
and following such request;
|
(u)
|
the
Guarantor shall be the sole legal and beneficial shareholder of the
Borrower;
|
(v)
|
the
Guarantor shall:
|
(i)
|
maintain,
at all times until the end of the Security Period, a minimum amount of
$25,000,000 in bank accounts in its name or in the name of any of
a
|
|
member
of the Group and agreed by the Agent in writing from time to time, and for
the purposes of this Clause 10.1(v)(i) the expression “bank accounts”
shall exclude any bank accounts that shall be subject to any Security
Interest;
|
(ii)
|
cause
its Net Asset Value to exceed $125,000,000 at all times until the end of
the Security Period; and
|
(iii)
|
cause
its Book Equity to exceed $100,000,000 at all times until the end of the
Security Period;
|
(w)
|
the
Borrower shall (i) ensure that no person who owns a controlling
interest in or otherwise controls the Borrower or any subsidiary thereof
is or shall be listed on the Specially Designated Nationals and Blocked
Person List or other similar lists maintained by OFAC or included in any
Executive Orders, (ii) comply, and cause each of its subsidiaries to
comply, with all applicable Bank Secrecy Act laws and regulations, as
amended, and (iii) not use or permit the use of the proceeds of the
Loan to violate any of the foreign asset control regulations of OFAC or
any enabling statute or Executive Order relating thereto;
and
|
(x)
|
from
time to time and at its expense, each Obligor shall duly execute and
deliver to the Agent such further documents and assurances as the Majority
Lenders or the
Agent
may request to effectuate the purposes of this Agreement and the other
Finance Documents or to obtain the full benefit of any of the
Collateral.
|
10.2
|
Negative
Covenants
. Without the prior written consent of the
Majority Lenders:
|
(a)
|
none
of the Obligors will create, assume or permit to exist any Security
Interest whatsoever upon any of its properties or assets, whether now
owned or hereafter acquired, except for (i) the Security Interests
created by the Finance Documents to which it is a party, (ii) the
Security Interests created by the Junior Security Documents to which it is
a party, but only so long as all Security Interests created by the Junior
Security Documents shall be subject and subordinate to the Security
Interests created by the Finance Documents, and (iii) liens that
arise by operation of law in the ordinary course of business, the failure
of which to pay or discharge could not reasonably be expected to have a
material adverse effect on the financial condition, assets, operations or
business prospects of any Obligor or to affect adversely the legality,
validity, binding effect or enforceability of this Agreement, any other
Finance Document, the Memorandum of Agreement or any Approved
Charter;
|
(b)
|
none
of the Obligors shall sell, transfer or lease all of or a substantial
portion of its properties and assets, or enter into any transaction of
merger or consolidation or liquidate, windup or dissolve itself (or suffer
any liquidation or dissolution), except that, so long as no Event of
Default or Potential Event of Default shall have occurred or be continuing
or would occur or be continuing immediately after giving effect to such
transaction:
|
(i)
|
the
Borrower may sell the Ship, but only if the proceeds of the sale are
applied in accordance with Clause 7.4 and the sale of the Ship is
effected pursuant to an arm’s length transaction for fair market value;
and
|
(ii)
|
the
Borrower may charter or lease the Ship in accordance with
Clause 10.2(c);
|
(c)
|
the
Borrower shall not charter the Ship, or permit the Ship to be chartered or
sub-chartered, to any person, or permit any person to have possession or
the right to use or direct the use of the Ship, except that the Borrower
may:
|
(i)
|
charter
the Ship to an Approved Charterer pursuant to the terms of an Approved
Charter assigned as Collateral to the Security Trustee for the benefit of
the Credit Parties pursuant to a Charter
Assignment;
|
(ii)
|
permit
each charterer of the Ship to charter or sub-charter the Ship to an
Approved Charterer pursuant to the terms of a charter that is an Approved
Charter but is not an Option B Time Charter or the Initial Approved
Charter; and
|
(iii)
|
cause
or permit the Ship to be managed by an Approved Manager, or an Approved
Manager and an Approved Technical Submanager, pursuant to
|
vessel management and technical submanagement agreements acceptable to the Agent; |
(d)
|
neither
of the Obligors shall enter into any transaction or series of related
transactions, whether or not in the ordinary course of business, with any
Affiliate or subsidiary, other than on terms and conditions substantially
as favorable to such person as would be obtainable by such person at the
time in a comparable arm’s-length transaction with a person other than an
Affiliate or subsidiary;
|
(e)
|
neither
of the Obligors shall make or permit any change in accounting policies
affecting (i) the presentation of financial statements or
(ii) reporting practices, except in either case except as required by
Applicable Accounting Principles or as may be acceptable to the Agent with
the consent of the Majority
Lenders;
|
(f)
|
the
Borrower shall not engage in any business other the execution, delivery
and performance of its obligations under this Agreement, the other Finance
Documents to which it is or will be a party, and the Junior Loan
Documents, the ownership of the Ship, and the execution, delivery and
performance of its obligations under the Memorandum of Agreement and each
charter and management agreement to which it is a party relating to the
Ship and permitted by the terms of this Agreement, the other Finance
Documents to which it is or will be a party, and the Junior Loan
Documents;
|
(g)
|
the
Borrower shall not transfer or change or permit the transfer or change of
the flag of the Ship from the Approved Flag in which the Ship is
registered on the Actual Drawdown Date or change the classification or the
Classification Society of the Ship except with the prior written consent
of the Majority Lenders, such consent not to be unreasonably withheld, or
do or allow to be done anything as a result of which such registration or
classification might be imperiled or
cancelled;
|
(h)
|
the
Borrower shall not replace any Approved Manager or permit the appointment
or replacement of any Approved Technical Submanager for the Ship or agree
or consent to any material amendment or other modification of the terms of
any of technical or commercial management agreements relating to the Ship,
including any increase in the rate of compensation payable thereunder,
except with the prior written consent of the Majority Lenders, such
consent not to be unreasonably withheld;
provided that
, subject
to the requirements of Clause 10.1(i), the Borrower may at any time
and in its discretion replace the manager of the Ship with any Approved
Manager and may permit any Approved Manager to appoint any Approved
Technical Submanager with respect to the Ship or to replace any technical
submanager of the Ship with any Approved Technical
Submanager;
|
(i)
|
the
Borrower shall not permit any act, event or circumstance that would result
in the Guarantor holding directly less than 100% of the Borrower’s
equity;
|
(j)
|
the
Borrower shall not incur any Financial Indebtedness other than the Loan
and pursuant to pursuant to the Junior
Guarantee;
|
(k)
|
the
Borrower shall not declare or pay any dividends or return any capital to
its equity holders or authorize or make any other distribution, payment or
delivery of property
|
or cash to its equity holders, or redeem, retire, purchase or otherwise acquire, directly or indirectly, for value, any share of any class of its capital stock or other form of equity interest (or require any rights, options or warrants relating thereto but not including convertible debt) now or hereafter outstanding, or repay any subordinated shareholder loans or set aside any funds for any of the foregoing purposes; |
(l)
|
the
Borrower shall not increase its capital by way of the creation of
preference securities, further common or ordinary securities or otherwise
howsoever, or create any new class of
equity;
|
(m)
|
the
Borrowers shall not permit any material amendment of or other modification
to the Memorandum of Agreement or any Approved Charter, which, in the case
of any Approved Charter, shall include any amendment or other modification
of the day rates, the allocation of expenses or any provision relating to
the term or termination of such Approved
Charter;
|
(n)
|
the
Borrower shall not make any loan or advance to, make any investment in, or
enter into any working capital maintenance or similar agreement with
respect to any person, whether by acquisition of stock or indebtedness, by
loan, guarantee or otherwise, except pursuant to the Junior
Guarantee;
|
(o)
|
the
Borrower shall not acquire any capital assets (including any vessel other
than the Ship) by purchase, charter or otherwise;
provided that
nothing in
this Clause 10.2(o) shall prevent or be deemed to prevent capital
improvements being made to the
Ship;
|
(p)
|
the
Borrower shall not enter into any arrangements, directly or indirectly,
with any person whereby it shall sell or transfer, or shall be obligated
to sell or transfer, any property, whether real or personal, and used or
useful in its business, whether now owned or hereafter acquired, if at the
time of such sale or disposition, the Borrower shall intend to lease or
otherwise acquire the right to use or possess (except by purchase) such
property or like property for a substantially similar
purpose;
|
(q)
|
the
Borrower shall not change the jurisdiction of its incorporation or amend
its organizational documents except in connection with a merger or
consolidation that is not prohibited by the terms of
Clause 10.2(b);
|
(r)
|
the
Borrower shall not change its name, type or jurisdiction of organization
or location from the name, type or jurisdiction of organization, or
location set forth on the signature pages to this Agreement or in
Clause 9.1(a) or 9.19, as the case may be, without first giving at
least 30 days’ prior written notice to the Agent and the Security Trustee
and taking all action required by the Agent or the Security Trustee for
the purpose of perfecting or protecting the security interest granted by
the Security Documents; and
|
(s)
|
the
Guarantor shall not permit the appointment of any chief executive officer
other than Mr. Evangelos Pistiolis without the prior written consent of
the Majority Lenders.
|
10.3
|
Value
Maintenance.
|
(a)
|
If,
at any time during the first two years following the Effective Date, the
Fair Market Value of the Ship and any additional Collateral provided
pursuant to this Clause 10.3(a) shall be less than 140% of the
Required Fair Market Value as at such time, or if at any time thereafter,
the Fair Market Value of the Ship and any additional Collateral provided
pursuant to this Clause 10.3(a) shall be less than 130% of the Required
Fair Market Value as at such time, the Agent (acting upon the instruction
of the Majority Lenders) shall have the right to require the Borrower and
the Guarantor, within 30 Business Days of the date of the written demand
of the Agent therefor, either (i) to prepay the Loan in such amount as may
be necessary to cause such Fair Market Value of the Ship to equal or
exceed 140% or 130%, as the case may be, of the Required Fair Market Value
as at such time or (ii) to provide such additional Collateral as may be
acceptable to the Agent in its sole reasonable discretion (acting upon the
instruction of the Majority Lenders) so that Fair Market Value of the Ship
and additional Collateral provided pursuant to this Clause 10.3(a)
shall equal or exceed 140% or 130%, as the case may be, of the Required
Fair Market Value as at such time, and the Obligors shall comply with any
such written demand made by the
Agent.
|
(b)
|
Any
prepayment required by this Clause 10.3 shall be subject to the
requirements of Clauses 7.5, 7.6, 7.7, 7.8 and
7.9.
|
10.4
|
Clear
Market
. Without the prior written consent of the Agent,
neither of the Obligors shall, and the Guarantor shall not permit any of
its Affiliates to, syndicate or issue, attempt to syndicate or issue,
announce or authorize the announcement of the syndication or issuance of,
or engage in discussions concerning the syndication or issuance of, any
debt facility or debt security (including any renewals thereof) for a
period of two months following the date
hereof.
|
10.5
|
Forward Freight
Agreements
. Neither of the Obligors shall enter into any
forward freight agreements with counterparties other than DVB Bank AG or
its Affiliates without the prior written consent of the
Agent.
|
11
|
GUARANTY
|
11.1
|
Guaranty
. To
induce the Lenders to make the Loan to the Borrower, and to induce the
Swap Bank to enter into Designated Transactions with the Borrower, the
Guarantor hereby irrevocably and unconditionally guarantees (this “
Guaranty
”), as a primary
obligor and not merely as a surety, the performance and punctual payment
when due, whether at stated maturity, by acceleration or otherwise, of all
Secured Liabilities of the Borrower now or hereafter existing under this
Agreement and the other Finance Documents, whether for principal,
interest, fees, expenses or otherwise (collectively, the “
Guaranteed Obligations
”)
due or owing to the Credit Parties, and agrees to pay any and all expenses
(including counsel fees and expenses) incurred by each Credit Party in
enforcing any rights under this Guaranty. The obligations of
the Guarantor under this Guaranty are in addition to and shall not in any
way be prejudiced by any other guaranty or security now or subsequently
held by any Credit Party.
|
11.2
|
Obligations
Absolute
. The Guarantor guarantees that the Guaranteed
Obligations will be performed and paid to the Credit Parties strictly in
accordance with the terms of any applicable agreement, express or implied,
of the Borrower, regardless of any law, regulation or order of any
jurisdiction affecting any term of any Guaranteed Obligation or the rights
of the Credit Parties with respect thereto, including any law, rule or
policy that is now or hereafter promulgated by any governmental authority
(including any central bank) or regulatory body any of which may adversely
affect the Borrower’s ability or obligation to make, or right of the
Credit Parties to receive, such payments, including any sovereign act or
circumstance that might otherwise constitute a defense to, or a legal or
equitable discharge of, the
Borrower.
|
11.3
|
Guaranty
Unconditional
. The liability of the Guarantor hereunder
shall be unconditional irrespective of, and the Guarantor hereby waives
any defenses it may have with respect
to:
|
(a)
|
any
lack of validity or enforceability of any Guaranteed Obligation or
agreement or instrument relating
thereto;
|
(b)
|
any
change in the time, manner or place of payment of, or in any other term
of, any Guaranteed Obligation;
|
(c)
|
any
exchange, release or non-perfection of any other Collateral securing
payment of any Guaranteed
Obligation;
|
(d)
|
any
moratorium, bankruptcy, insolvency or other similar law or any other law,
regulation or order of any jurisdiction affecting any term of any
Guaranteed Obligation or a Credit Party’s rights with respect thereto;
or
|
(e)
|
any
other circumstance that might otherwise constitute a defense available to,
or the discharge of, the Borrower or the
Guarantor.
|
11.4
|
Waiver of Subrogation;
Contribution
. Notwithstanding any other provision of
this Guaranty, until payment in full of the Guaranteed Obligations in cash
and the termination of the commitments of the Lenders and the Swap Bank
with respect thereto:
|
(a)
|
the
Guarantor hereby irrevocably waives any right to assert, enforce, or
otherwise exercise any right of subrogation to any of the rights, security
interests, claims, or liens that any Credit Party has or may have against
the Borrower in respect of the Guaranteed
Obligations;
|
(b)
|
the
Guarantor shall not have any right of recourse, reimbursements,
contribution, indemnification, or similar right (by contract or otherwise)
against the Borrower in respect of the Guaranteed Obligations;
and
|
(c)
|
the
Guarantor hereby irrevocably waives any and all of the foregoing rights
and also irrevocably waives the benefit of, and any right to participate
in, any Collateral or other security given to the Credit Parties to secure
payment of the Guaranteed
Obligations.
|
11.5
|
Reinstatement
. This
Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is
rescinded or must otherwise be returned by any Credit
Party.
|
11.6
|
Waiver
. The
Guarantor waives promptness, diligence and notices with respect to any
Guaranteed Obligation and this Guaranty and any requirement that a Credit
Party exhaust any right or take any action against the Borrower or any
other entity or any of its
property.
|
11.7
|
Payments; No
Reductions
.
|
(a)
|
All
payments under this Guaranty shall be made in accordance with
Clauses 12, 16, and 17 of this
Agreement.
|
(b)
|
The
Guarantor agrees to pay any and all taxes that arise from any payment made
hereunder or from the execution, delivery or registration by such
Guarantor of, or otherwise with respect to, this
Agreement.
|
(c)
|
The
Guarantor shall indemnify each Credit Party in accordance with
Clause 16.
|
(d)
|
Within
30 days after the date of any payment of taxes, the Guarantor shall
furnish to each Credit Party at its address for notices, the original or a
certified copy of a receipt evidencing payment thereof. If no
taxes are payable in respect of any payment, the Guarantor will furnish to
each Credit Party a certificate from each appropriate taxing authority, or
an opinion of counsel acceptable to each Credit Party, in either case
stating that such payment is exempt from or not subject to
taxes.
|
11.8
|
Continuing
Guarantee
. This Guaranty (a) is a continuing
guaranty, (b) is joint and several with each other guarantee given in
respect of the Guaranteed Obligations, (c) shall, subject to
Clause 11.5, remain in full force and effect until the later of the
termination of the Commitments under this Agreement and the payment in
full of the Guaranteed Obligations and all other amounts payable pursuant
to the Finance Documents and (d) shall be binding upon the Guarantor,
its successors and permitted assigns. The obligations of the
Guarantor under this Guaranty shall rank pari passu with all other
unsecured obligations of the
Guarantor.
|
12
|
PAYMENTS
AND CALCULATIONS
|
12.1
|
Currency and Method of
Payments
. All payments to be made by either Obligor
under the Finance Documents shall be made to the
Agent:
|
(a)
|
not
later than 10:00 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 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);
and
|
(c)
|
to
the account and in favor of the Agent at HSBC Bank USA, New York, New
York, ABA No. 021001088, SWIFT: MRMDUS33, for credit to 1700006231,
Reference:
|
Top Ships, or to such other account with such other bank as the Agent may from time to time notify to the Obligors. |
12.2
|
Payment on a Non-Business
Day
. If any payment by either Obligor under a Finance
Document would otherwise fall due on a day that 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;
|
12.3
|
Basis for Calculation of
Periodic Payments
. All interest, commitment fees and any
other payments under any Finance Document that 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.
|
12.4
|
Distribution of Payments to
Credit Parties
. Subject to Clauses 12.2, 12.6 and
12.7:
|
(a)
|
each
amount received by the Agent under a Finance Document for distribution or
remittance to a Lender shall be made available by the Agent to such Lender
by payment to such account indicated by notice from such Lender to the
Agent not less than five Business Days prior to the date on which such
payment is to be made; and
|
(b)
|
amounts
to be applied in satisfaction of amounts of a particular category that are
due to the Lenders generally shall be distributed by the Agent to each
Lender pro rata to the amount in that category that is due to
it.
|
12.5
|
Permitted Deductions by
Agent
. Notwithstanding any other provision of this
Agreement or any other Finance Document to the contrary, the Agent may, to
the extent permitted by applicable law and before making an amount
available to a Lender, deduct and withhold from that amount any sum that
is then due and payable to the Agent from such Lender under any Finance
Document or any sum that the Agent is then entitled under any Finance
Document to require such Lender to pay on
demand.
|
12.6
|
Agent Only Obliged to Pay
Monies Received
. Notwithstanding any other provision of
this Agreement or any other Finance Document to the contrary, the Agent
shall not be obligated to make available to the Borrower or any Lender any
sum that 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 actually received that sum.
|
12.7
|
Refund to Agent of Monies Not
Received
. Except as is otherwise provided in
Clause 3.4(b) of this Agreement, 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) that 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.
|
12.8
|
Agent May Assume
Receipt
. Clause 12.7 shall not affect any claim
that 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 that it made available (except an express notice from a Lender that it
will not fund its Ratable Portion of the
Advance).
|
12.9
|
Credit Party
Accounts
. Each Credit Party shall maintain accounts
showing the amounts owing to it by the Borrower under the Finance
Documents and all payments in respect of those amounts made by the
Obligors.
|
12.10
|
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 Obligors under
the Finance Documents and all payments in respect of those amounts made by
the Obligors.
|
12.11
|
Accounts
Prima
Facie
Evidence
. If the accounts maintained under
Clauses 12.9 and 12.10 show an amount to be owing by any Obligor to a
Credit Party, those accounts shall be
prima facie
evidence
that that amount is owing to that Credit
Party.
|
13
|
APPLICATION
OF RECEIPTS
|
13.1
|
Normal Order of
Application
. Except as this Agreement or any other
Finance Document may otherwise provide, any sums that are received or
recovered by the Agent or the Security Trustee under or by virtue of any
Finance Document shall be paid to the account of the Agent identified in
Clause 12.1(c) and applied by the Agent in the following
manner:
|
|
FIRST:
|
in
or towards payment of all sums (other than principal of the Loan or
interest owing in respect thereof or amounts due under the Master
Agreement) that may be owing to any Credit Party under this Agreement and
the other Finance Documents (or any of them), including any amounts due
under Clause 16;
|
SECOND:
|
in
or towards payment of any accrued default interest due but unpaid under
Clause 6;
|
|
THIRD:
|
in
or towards payment of any accrued interest due but unpaid under
Clause 4;
|
FOURTH:
|
in
or towards payment, on a pro rata basis, of any amounts then due under the
Master Agreement and any principal due but unpaid under Clause 7,
provided
that any
amounts in payment of any principal due under Clause 7 shall be
applied to the outstanding principal balance of the Loan as provided
therein;
|
|
FIFTH:
|
in
or towards payment of the balance (if any) of the Outstanding
Indebtedness; and
|
|
SIXTH:
|
any
surplus shall be paid to the Borrower as it
directs.
|
13.2
|
Application of Credit
Balances
. Each Credit Party may, upon not less than
seven days’ prior notice to each Obligor or, to the extent permitted by
applicable law, without prior notice if an Event of Default shall have
occurred and be continuing:
|
(a)
|
apply
any balance (whether or not then due) that at any time shall be standing
to the credit of any account in the name of any Obligor at any office of
such Credit Party in any country in or towards satisfaction of any sum
then due from that Obligor to such Credit 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 that
Obligor;
|
(ii)
|
convert
or translate all or any part of a deposit or other credit balance into
Dollars;
|
(iii)
|
enter
into any other transaction or make any entry with regard to the credit
balance that such Credit Party considers
appropriate.
|
13.3
|
Other Rights
Unaffected
. A Credit Party shall not be obliged to
exercise any of its rights under Clause 13.2 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 such Credit
Party is entitled (whether under the general law or any
document).
|
13.4
|
Payments in Excess of Ratable
Share
. If any Lender shall obtain any payment (whether
voluntary, involuntary, through the exercise of any right of set-off,
counterclaim or otherwise) on account of its portion of the Loan and in
excess of its ratable share of payments on account of the Loan obtained by
all the Lenders, such Lender shall forthwith purchase from the other
Lenders such participation in their respective portions of the Loan as
shall be necessary to share the excess payment ratably with each of them;
provided that
if
all or any portion of such excess payment shall be thereafter recovered by
any other Lender from the purchasing Lender, such purchase from such other
Lender shall be rescinded and such other Lender shall repay to the
purchasing Lender the purchase price to the extent of such recovery
together with an amount equal to such Lender’s ratable share (according to
the proportion of (a) the amount of such Lender’s required repayment
to (b) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in
respect of the total amount so recovered. The Borrower agrees
that any Lender so purchasing a participation from another Lender pursuant
to this Clause 13.4 may, to the fullest extent permitted by law,
exercise all of its rights of payment (including any right of set-off)
with respect to such participation as fully as if such Lender were the
direct creditor of the Borrower in the amount of such
participation. Notwithstanding the preceding sentences of this
Clause 13.4, any Lender that shall have commenced or joined (as a
plaintiff) in an action or proceeding in any court to recover sums due to
it under this Agreement or any other Finance Document and pursuant to a
judgment obtained therein or a settlement or compromise of that
action or proceeding shall have received any amount, shall not be
|
required
to share any proportion of that amount with any Lender that shall have had
the legal right to, but shall not have joined such action or proceeding or
commenced and diligently prosecuted a separate action or proceeding to
enforce its rights in the same or another court. Each Lender
exercising or contemplating exercising any right giving rise to a receipt
or receiving any payment of the type referred to in this Clause 13.4
or instituting legal proceedings to recover sums owing to it under this
Agreement shall, as soon as reasonably practicable thereafter, give notice
thereof to the Agent, which shall give notice thereof to the other
Lenders.
|
14
|
EVENTS
OF DEFAULT
|
14.1
|
Events of
Default
. There shall be an Event of Default
if:
|
(a)
|
any
sum payable under this Agreement or any of the other Finance Documents
shall not be paid when due; or
|
(b)
|
either
Obligor or any other party (other than a Credit Party) shall commit any
breach of or fail to perform any of its obligations, covenants or
undertakings in this Agreement or any other Finance Document (except as
provided in Clause 14.1(a)) or any event of default, or any event or
circumstance that with the giving of any notice, the lapse of time or both
would constitute an event of default, shall occur under any other Finance
Document; or
|
(c)
|
any
representation or warranty made by either Obligor or any other party
(other than a Credit Party) in or pursuant to this Agreement or any other
Finance Document shall prove to have been incorrect in any material
respect when made or deemed made or confirmed;
or
|
(d)
|
any
principal of or interest on any Financial Indebtedness of either Obligor
(other than the Financial Indebtedness payable pursuant to this Agreement
or any other Finance Document) shall not be paid when due, subject to any
agreed cure period but only so long as cure shall be made in accordance
with the terms thereof and in any event on or before the thirtieth day
after such principal or interest shall be due;
or
|
(e)
|
any
event of default, or any event or circumstance that, with the giving of
any notice, the lapse of time or both would constitute an event of
default, shall occur under any agreement (other than the Finance
Documents) to which either of the Obligors or a Principal Subsidiary is a
party, including any charter party or other contract of employment for the
Ship; or
|
(f)
|
any
of the consents referred to in Clause 9.3 shall be modified in a
manner that shall be unacceptable to the Majority Lenders, shall be
revoked or terminated, shall expire and not be renewed, or otherwise shall
cease to be in full force and effect;
or
|
(g)
|
either
Obligor shall suspend payment of its debts or shall be unable or shall
admit its inability to pay its debts as they fall due or any proceeding
shall be commenced by or against either Obligor for a composition or other
arrangement for the benefit of its creditors generally relating to
reconstruction or readjustment of it or its debts or any
|
similar process or proceeding shall be instituted by or against either Obligor under the laws of any relevant jurisdiction; or |
(h)
|
either
Obligor shall take any action or any legal proceedings shall be started or
other steps shall be taken for:
|
(i)
|
such
Obligor to be adjudicated or found bankrupt or
insolvent;
|
(ii)
|
the
winding-up or dissolution of such Obligor;
or
|
(iii)
|
the
appointment of a liquidator, trustee, receiver or similar officer of such
Obligor or of the whole or any part of its undertakings, assets, rights or
revenues or any similar process or proceeding shall be instituted under
the laws of any relevant jurisdiction;
or
|
(i)
|
either
Obligor ceases or threatens to cease to carry on its business except, with
respect to the Borrower, in the case of a sale or a proposed sale of the
Ship; or
|
(j)
|
all
or a material part of the undertakings, assets, rights or revenues of, or
shares or other ownership interest in, either Obligor shall be seized,
nationalized, expropriated or compulsorily acquired by or under authority
of any government; or
|
(k)
|
a
creditor shall attach or take possession of, or a distress, execution,
sequestration or process (each an “
action
”) shall be levied
or enforced upon or sued out against, a material part of the undertakings,
assets, rights or revenues of either Obligor in relation to a claim by
such creditor and such action shall not have been lifted, vacated,
released or expunged, or substitute security posted, within 10 Business
Days of such action having been instituted;
or
|
(l)
|
the
Guarantor shall cease to be the legal and beneficial owner of all of the
issued and outstanding shares of the Borrower;
or
|
(m)
|
the
Ship shall be a Total Loss and insurance proceeds with respect to such
Total Loss shall not be collected or received by the Security Trustee
within 150 days thereafter; or
|
(n)
|
any
provision of this Agreement shall cease to be valid and binding on or
enforceable against either Obligor or such Obligor shall so state in
writing, or any other Finance Document executed and delivered by either
Obligor shall for any reason cease to be valid and binding on or
enforceable against such Obligor or any such Obligor shall so state in
writing; or
|
(o)
|
any
Security Document shall cease for any reason (other than pursuant to the
terms thereof) after the execution and delivery thereof to create (i) in
the case of the Mortgage, a valid first priority preferred mortgage under
the laws of the Republic of Liberia on the Ship described therein or (ii)
in the case of the Earnings Assignment, Insurance Assignment or Charter
Assignment, a valid first-priority perfected lien on the Collateral
described therein; or
|
(p)
|
any
Approved Charter shall cease to be in full force and effect at any time
after such Approved Charter shall have been executed and delivered by the
parties thereto; or
|
(q)
|
it
shall be impossible or unlawful:
|
(i)
|
for
either Obligor or any other party (other than a Credit Party) to fulfill
any of the covenants and obligations contained in this Agreement or any
other Finance Document; or
|
(ii)
|
for
any Credit Party to exercise any of the rights vested in it under this
Agreement or any other Finance Documents;
or
|
(r)
|
in
the reasonable opinion of the Majority Lenders, a material adverse change
in the financial condition of either Obligor shall occur;
or
|
(s)
|
any
other event occurs or circumstance shall occur that, in the reasonable
opinion of the Majority Lenders, shall likely materially and adversely
affect:
|
(i)
|
the
ability of either Obligor or any other party (other than a Credit Party)
to perform all or any of its respective obligations under or otherwise to
perform its obligations under this Agreement or any other Finance
Document; or
|
(ii)
|
the
security created by any Collateral.
|
14.2
|
Actions Following an Event of
Default
. If at any time an Event of Default shall have
occurred and be continuing, the Agent may and, if so instructed by the
Majority Lenders, shall:
|
(a)
|
serve
on the Borrower a notice stating that all obligations of the Lenders to
the Borrower under this Agreement are terminated at which time such
obligations shall immediately terminate without any further action by any
party hereto; provided that if any Event of Default described in either of
Clauses 14.1(g) and 14.1(h) shall have occurred and be continuing,
such obligations shall be deemed immediately terminated without notice
thereof or any other action by any party
hereto;
|
(b)
|
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 at which time the Loan, all accrued interest and all other
amounts accrued or owing by the Obligors under this Agreement and the
other Finance Documents shall become immediately due and payable, and the
Security Trustee shall be entitled to enforce the Security Interests
created by this Agreement and the other Finance Documents in any manner
available to it and in such sequence as the Security Trustee may, in its
absolute discretion, determine;
provided that
if any
Event of Default described in either of Clauses 14.1(g) and 14.1(h)
shall have occurred and be continuing, the Loan, all such accrued interest
and all such other amounts shall become immediately due and payable and
the Security Trustee shall be entitled to enforce the Security Interests
as provided herein, in each case without notice or demand therefor or any
other action by any party hereto;
and
|
(c)
|
take
such other actions that, as a result of such Event of Default or any
notice served pursuant to paragraph (a) or (b) above, a Credit Party
shall be entitled to take under any Finance Document or any applicable
law.
|
14.3
|
Multiple Notices; Action
without Notice
. The Agent may serve notices pursuant to
Clauses 14.2(a) and 14.2(b) simultaneously or at different times and
may take any action referred to in either such Clause even if no such
notice is served or simultaneously with or at any time after the service
of both or either of such notices.
|
15
|
FEES
AND EXPENSES
|
15.1
|
Commitment
Fee
. The Borrower shall pay to the Agent for the account
of each Lender a commitment fee equal to 0.50% per annum of the undrawn
portion of the Commitment of such Lender from the Effective Date (in the
case of any Initial Lender) and from the effective date specified in the
Assignment and Acceptance pursuant to which it became a Lender (in the
case of each other Lender) until the end of the Availability Period,
payable in arrears on the last day of the Availability
Period.
|
15.2
|
Other
Fees
. The Guarantor shall pay to DVB Bank America N.V.
for its own account such fees as may from time to time be agreed by DVB
Bank America N.V. and the
Guarantor.
|
15.3
|
Costs of Negotiation,
Preparation, Etc.
The Borrower shall pay to the Agent on
demand the amount of all out-of-pocket expenses incurred by the Agent and
each other Credit Party in connection with the negotiation, preparation,
execution, registration and enforcement of each Finance Document and
related document and each transaction contemplated by any Finance Document
or related document, including the reasonable fees and disbursements of
each Credit Party’s legal counsel and any local counsel retained by
them.
|
15.4
|
Costs of Variations,
Amendments, Enforcement, Etc
. The Borrower shall pay to
the Agent on demand the amount of all expenses incurred by the Credit
Parties (including the legal fees and disbursements of counsel to the
Credit Parties) in connection with:
|
(a)
|
each
amendment or supplement to any Finance Document, and each proposal for any
such amendment or supplement regardless of whether or not such amendment
or supplement shall become
effective;
|
(b)
|
each
consent or waiver by any Credit Party under or in connection with any
Finance Document, and each request for any such waiver or consent
regardless of whether or not such waiver or consent shall be
given;
|
(c)
|
the
valuation of or any other matter relating to the Collateral or the Ship;
and
|
(d)
|
each
action taken by a Credit Party for the protection, exercise or enforcement
of any right or Security Interest created by any Finance Document or for
any similar purpose.
|
15.5
|
Documentary
Taxes
. The Borrower shall promptly pay any tax payable
on or by reference to any Finance Document, and shall, on demand, fully
indemnify any Credit Party against any liabilities and expenses resulting
from any failure or delay by the Borrower to pay such a
tax.
|
16
|
INDEMNITIES
|
16.1
|
Indemnities Regarding Borrowing
and Repayment of Loan
. The Borrower shall indemnify each
Lender on demand for any and all expenses, liabilities and losses incurred
by such Lender as a result of or in connection
with:
|
(a)
|
the
Advance not being borrowed on the Expected Drawdown Date specified in the
Drawdown Notice for any reason other than a default by such
Lender;
|
(b)
|
the
receipt or recovery of all or any part of the Loan or an overdue sum other
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 any Finance Document on the due date (after giving credit
for any default interest paid by the Borrower on the amount
concerned);
|
(d)
|
the
occurrence and continuance of any Event of Default or Potential Event of
Default and the acceleration of repayment of the Loan or any other amounts
pursuant to Clause 14; and
|
(e)
|
any
tax (other than tax on its overall net income imposed by a taxing
jurisdiction in which such Lender is organized, holds or books the Loan or
has a principal place of business) for which such Lender is liable in any
jurisdiction directly in connection with any amount paid or payable to
such Credit Party under any Finance
Document.
|
16.2
|
Breakage
Costs
. Without limiting its generality of
Clause 16.1, the expenses, liabilities and losses indemnified by the
Borrower pursuant to Clause 16.1 shall include those incurred by each
Lender:
|
(a)
|
in
liquidating or employing deposits from third parties acquired or arranged
to fund or maintain all or any part of the Loan or any overdue amount (or
any aggregate amount that includes the Loan or any overdue amount);
and
|
(b)
|
in
terminating, or otherwise in connection with, any interest or currency
swap or any other transaction entered into (whether with another legal
entity or with another office or department of such Lender) to hedge any
exposure arising under this Agreement or that part that such Lender
determines is fairly attributable to this Agreement of the amount of the
liabilities, expenses or losses incurred by it in terminating, or
otherwise in connection with, any number of transactions including those
contemplated by this Agreement.
|
16.3
|
Miscellaneous
Indemnities
. The Borrower shall indemnify each Credit
Party for any and all claims, demands, proceedings, liabilities, taxes,
losses and expenses of every kind that may be made or brought against, or
incurred by, such Credit Party, in any country, in relation
to:
|
(a)
|
any
action taken, or omitted or neglected to be taken, under or in connection
with any Finance Document by such Credit Party or by any receiver
appointed under a Finance Document;
and
|
(b)
|
any
other event, matter or question that occurs or arises at any time during
the Security Period and that has any connection with any payment or other
transaction relating to any Finance Document or any asset covered (or
previously covered) by a Security Interest created (or intended to be
created) by any Finance Document;
|
16.4
|
Other
Indemnities
. The Borrower shall indemnify each Credit
Party for any and all reasonable expenses, liabilities and losses incurred
by such Credit Party as a result of or in connection with the enforcement
(whether through negotiations, legal proceedings or otherwise) of the
Finance Documents and any other document to be delivered
hereunder.
|
16.5
|
Currency
Indemnity.
If any amount payable by either Obligor to
any Credit Party pursuant to any Finance Document or pursuant to any order
or judgment relating to any Finance Document shall be converted from the
currency in which the Finance Documents require such amount 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, whether in
liquidation, bankruptcy, insolvency or otherwise;
or
|
(b)
|
obtaining
an order or a judgment from any court or other tribunal;
or
|
(c)
|
enforcing
any such order or judgment,
|
16.6
|
Increased
Costs
.
|
(a)
|
If,
due to either
|
(i)
|
the
introduction of or any change in or in the interpretation of any law or
regulation; or
|
(ii)
|
the
compliance by any Lender with any guideline or request from any central
bank or other governmental authority after the date hereof (whether or not
having the force of law);
|
|
there
shall be
|
|
(x)
|
imposed,
modified or deemed applicable any reserve, special deposit or similar
requirement against assets held by, or deposits in or for the account of,
any Lender;
|
|
(y)
|
imposed
on any Lender any tax of any kind whatsoever with respect to this
Agreement or the Advance made by it, or any change in the basis of
taxation of payments to any Lender in respect thereof (except for taxes
indemnified pursuant to Clause 17);
or
|
|
(z)
|
imposed
on any Lender any other condition relating to this Agreement or the
Advance made by it;
|
|
(A)
|
if
such Lender fails to so notify the Borrower within such 60-day period,
such increased cost shall commence accruing on such later date on which
the Lender notifies the Borrower;
and
|
|
(B)
|
before
making any such demand, such Lender agrees to use reasonable efforts
(consistent with its internal policy and legal and regulatory
restrictions) to designate a different Lending Office if the making of
such a designation would avoid the need for, or reduce the amount of, such
increased cost and would not, in the reasonable judgment of such Lender,
be otherwise disadvantageous to such
Lender.
|
(b)
|
If
any Lender shall determine that compliance with any law or regulation or
any guideline or request from any central bank or other governmental or
monetary authority in regard to capital adequacy (whether or not having
the force of law) including any guideline contemplated by the report dated
July 1988 entitled “International Convergence of Capital Management and
Capital Standards” issued by the Bank Committee on Banking Regulations and
Supervisory Practices, in any case
|
in
which such law, regulation, guideline or request shall have become
effective or shall have been made after the date hereof, shall or would
have the effect of reducing the rate of return on the capital of, or
maintained by, such Lender or any person controlling such Lender as a
consequence of such Lender making its ratable portion of the Advance or
Commitment hereunder and other commitments of this type, by increasing the
amount of capital required or expected to be maintained by such Lender or
any person controlling such Lender, to a level below that which such
Lender or any person controlling such Lender could have achieved but for
such adoption, effectiveness, change or compliance (taking into account
such Lender’s or such person’s policies with respect to capital adequacy),
then the Borrower shall, from time to time, pay such Lender, upon demand
by such Lender made within 60 days after the first date on which such
Lender has actual knowledge that it is entitled to make demand for payment
under this Clause 16.6(b) of such reduction in return, such
additional amount as may be specified by such Lender as being sufficient
to compensate such Lender for such reduction in return, to the extent that
such Lender reasonably determines such reduction to be attributable to the
existence of such Lender’s commitment to lend hereunder;
provided that
if such
Lender fails to so notify the Borrower within such 60 day period, such
amounts shall commence accruing on such later date on which such Lender
notifies the Borrower. A certificate as to such amounts
submitted to the Borrower by a Lender shall be conclusive and binding for
all purposes, absent manifest
error.
|
17
|
NO
SET-OFF OR TAX DEDUCTION
|
17.1
|
No
Deductions
. All amounts due from either Obligor under
any 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 that the Borrower is
required by law to make.
|
17.2
|
Grossing-Up for
Taxes
. If either Obligor shall be required by law to
make a tax deduction from any
payment:
|
(a)
|
that
Obligor shall notify the Agent as soon as it becomes aware of the
requirement;
|
(b)
|
that
Obligor 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 Credit Party receives and retains (free from
any liability relating to the tax deduction) a net amount that, after the
tax deduction, is equal to the full amount that it would otherwise have
received.
|
17.3
|
Evidence of Payment of
Taxes
. Within 30 days after making any tax deduction, an
Obligor shall deliver to the Agent documentary evidence satisfactory to
the Agent that the tax shall have been paid to the appropriate taxation
authority.
|
17.4
|
Exclusion of Tax on Overall Net
Income
. In this Clause 17, “
tax deduction
” means any
deduction or withholding for or on account of any present or future tax
except tax on a Credit Party’s overall net income imposed by a taxing
jurisdiction in which such Credit Party is organized, holds or books the
Loan (as applicable) or has a principal place of
business.
|
18
|
ILLEGALITY
|
(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;
|
19
|
ASSIGNMENTS
AND PARTICIPATIONS; CHANGES IN LENDING
OFFICE
|
19.1
|
Assignment by
Borrower
. Except as permitted by Clause 10.2(b), no
Obligor may, without the consent of the Majority
Lenders:
|
(a)
|
transfer
any of its rights or obligations under any Finance Document;
or
|
(b)
|
enter
into any merger, de-merger or other reorganization, or carry out any other
act, as a result of which any of its rights or liabilities would vest in,
or pass to, another person.
|
19.2
|
Assignments by Lenders;
Participations
.
|
(a)
|
Each
Lender may at its own expense assign to a bank or other entity all or a
portion of its rights and obligations under this Agreement (including all
or a portion of its Commitment, the Advance owing to it and the Notes held
by it, if any),
provided
that
:
|
(i)
|
each
such assignment shall be of a uniform, and not a varying, percentage of
all rights and obligations under this Agreement and the other Finance
Documents;
|
(ii)
|
except
in the case of an assignment of all of such Lender’s rights and
obligations under this Agreement or an assignment to a person that,
immediately prior to such assignment, shall also be a Lender, the amount
of the Commitment of the assigning Lender being assigned pursuant to each
such assignment (determined as of the date of the Assignment and
|
Acceptance with respect to such assignment) shall in no event be less than $5,000,000 and shall be an integral multiple of $1,000,000 in excess thereof; |
(iii)
|
each
such assignment shall be to (A) an Eligible Assignee acceptable to
the Borrower, which acceptance the Borrower shall not unreasonably
withhold, condition or delay, (B) another Lender or (C) an
Affiliate of the assigning Lender or an Eligible
Assignee;
|
(iv)
|
the
parties to each such assignment shall execute and deliver to the Agent,
for its acceptance and recording in the Register, an Assignment and
Acceptance, together with the Notes (if any) subject to such assignment
and a processing and recordation fee of $5,000 payable by the assigning
Lender; and
|
(v)
|
after
giving effect to each such assignment, there shall be no more than five
Lenders.
|
(b)
|
By
executing and delivering an Assignment and Acceptance, the assigning
Lender thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as
follows:
|
(i)
|
other
than as provided in such Assignment and Acceptance, such assigning Lender
makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any
other instrument or document furnished pursuant
hereto;
|
(ii)
|
such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of either Obligor
or the performance or observance by either Obligor of any of its
obligations under this Agreement, any other Finance Document or any other
instrument or document furnished pursuant hereto or
thereto;
|
(iii)
|
such
assignee confirms that it has received a copy of this Agreement, together
with copies of all financial statements referred to or delivered in
accordance with Clauses 9.9 and 10.1(f) and such other documents and
information as it
|
deems appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; |
(iv)
|
such
assignee will, independently and without reliance upon the Agent, the
Security Trustee, the Swap Bank, the assigning Lender or any other Lender
and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not
taking action under this Agreement;
|
(v)
|
such
assignee confirms that it is another Lender, an Affiliate of the assigning
Lender or an Eligible Assignee;
|
(vi)
|
such
assignee appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement as are
delegated to the Agent by the terms hereof, together with such powers as
are reasonably incidental thereto;
|
(vii)
|
such
assignee agrees that it shall perform in accordance with their terms all
of the obligations which by the terms of this Agreement are required to be
performed by it as a Lender; and
|
(viii)
|
such
assigning Lender and such assignee represent and warrant that such
assignment is not in violation of any applicable law, including any
securities law.
|
(c)
|
The
Agent shall maintain at its address referred to in Clause 21.2 a copy
of each Assignment and Acceptance delivered to and accepted by it and a
register for the recordation of the names and addresses of the Lenders and
the Commitment of, and principal amount of the Advance owing to, each
Lender from time to time (the “
Register
”). The
entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and the Borrower, the Guarantor, the Agent, the
Security Trustee and the Lenders may treat each person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement and the Security Documents. The Register shall be
available for inspection by the Borrower or any Lender at any reasonable
time and from time to time upon reasonable prior
notice.
|
(d)
|
Upon
its receipt of an Assignment and Acceptance executed by an assigning
Lender and an assignee, the Agent shall, if such Assignment and Acceptance
has been completed and is in substantially the form of Appendix H,
(i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt
notice thereof to the Borrower and the
Guarantor.
|
(e)
|
Each
Lender may, at is own expense, sell participations to one or more banks or
other entities in or to all or a portion of its rights and obligations
under this Agreement (including all or a portion of its Commitment and the
Advances owing to it);
provided
that
:
|
(i)
|
such
Lender’s obligations under this Agreement (including its Commitment to the
Borrower hereunder) shall remain
unchanged;
|
(ii)
|
such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations;
|
(iii)
|
such
Lender shall remain a Lender for all purposes of this
Agreement;
|
(iv)
|
the
Borrower, the Guarantor, the Agent, the Security Trustee and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement;
and
|
(v)
|
no
participant under any such participation shall have any right to approve
any amendment or waiver of any provision of any Finance Document, or any
consent to any departure by the Borrower
therefrom.
|
(f)
|
Notwithstanding
any other provision set forth in this Agreement, any Lender may, at its
own expense, at any time create a security interest in all or any portion
of its rights under this Agreement (including the Advance owing to it and
the Notes held by it) in favor of any Federal Reserve Bank in accordance
with Regulation A of the Board of Governors of the Federal Reserve
System.
|
19.3
|
Rights of
Assignee
. In respect of any breach of a warranty,
undertaking, condition or other provision of a Finance Document, or any
misrepresentation made in or in connection with a Finance Document, a
direct or indirect assignee of any of a Lender’s rights or interests under
or by virtue of the Finance Documents shall be entitled to recover damages
by reference to the loss incurred by that assignee as a result of the
breach or misrepresentation irrespective of whether the Lender would have
incurred a loss of that kind or
amount.
|
19.4
|
Subrogation
Assignment
. A Lender may assign, in any manner and on
terms agreed by it, all or any part of those rights to an insurer or
surety who has become subrogated to
them.
|
19.5
|
Disclosure of
Information
. Any Lender may, in connection with any
assignment or participation or proposed assignment or participation
pursuant to this Clause 19.2, disclose
to
|
19.6
|
Change of Lending
Office
. Subject to Clause 16.6, a Lender may change
its Lending Office by notice to the Borrower and such change shall become
effective on the later of:
|
|
(b)
|
the
date, if any, specified in the notice as the date on which the change will
come into effect;
|
20
|
VARIATIONS, WAVIERS, ETC. |
20.1
|
Variations,
Waivers, Etc.
|
(a)
|
A
document shall be effective to vary, waive, suspend or limit any provision
of a Finance Document, or a Credit 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 relevant Obligors and the relevant
Credit Parties.
|
(b)
|
Except
as otherwise provided in this Agreement, this Agreement or any term hereof
may be amended, modified, waived, discharged or terminated only by an
instrument in writing, signed by the Majority Lenders or by the Agent
acting with the consent of the Majority Lenders;
provided that
no
amendment, modification or waiver shall, unless by an instrument signed by
all the Lenders or by the Agent acting with the consent of all the Lenders
(so long as this Agreement remains in effect or there are any Designated
Transactions continuing):
|
(i)
|
increase
the Commitment of any Lender, or increase or extend the term, or extend
the time or waive any requirement for the reduction or termination, of the
Advance;
|
(ii)
|
extend
the date fixed for the payment of principal or interest on the
Loan;
|
(iii)
|
reduce
the amount of any payment of principal thereof or the rate at which
interest is payable thereon or any fee is payable
hereunder;
|
(iv)
|
alter
the terms of this Clause 20;
|
(v)
|
waive
any of the conditions precedent set forth in
Clause 8;
|
(vi)
|
release
any Collateral, except as contemplated by this Agreement or any other
Finance Document; or
|
(vii)
|
change
the definition of the term “Majority
Lenders”;
|
20.2
|
Exclusion of Other or Implied
Variations
. Except as expressly provided in any document
that satisfies the requirements of Clause 20.1, no document, and no
act, course of conduct, failure or neglect to act, delay or acquiescence
on the part of a Credit Party (or any person acting on its behalf) shall
result in such Credit Party (or any person acting on its behalf) being
taken to have varied, waived, suspended or limited, or being precluded
(permanently or temporarily) from enforcing, relying on or
exercising:
|
(a)
|
any
provision of this Agreement or any other Finance Document;
or
|
(b)
|
any
Event of Default or Potential Event of Default;
or
|
(c)
|
any
breach by an Obligor of an obligation under any Finance Document or
applicable law; or
|
(d)
|
any
right or remedy conferred by any Finance Document or applicable
law;
|
21
|
NOTICES
|
21.1
|
General
. Unless
otherwise specifically provided, each notice given pursuant to or in
connection with this Agreement or any other Finance Document shall be
given by registered or certified mail, by FedEx, DHL or similar courier,
by facsimile or by hand.
|
21.2
|
Addresses for Notices,
Etc
. Each such notice shall be
sent:
|
(a)
|
if
to the Borrower, to:
|
Japan
II Shipping Company Limited
c/o
Top Ships Inc.
Vas.
Sofias 1 & Meg. Alexandrou
Maroussi
-- Athens 151 24, GREECE
Facsimile: +30-210-614-1273;
|
|
(b)
|
if
to the Guarantor, to:
|
Top
Ships Inc.
Vas.
Sofias 1 & Meg. Alexandrou
Maroussi
-- Athens 151 24 GREECE
Facsimile: +30-210-614-1273;
|
|
(c)
|
if
to the Agent or the Security Trustee, to:
|
DVB
Bank America N.V.
Zeelandia
Office Park
Kaya
W.F.G. Mensing 14
P.O.
Box 3107
Curaçao,
NETHERLANDS ANTILLES
Attention: Natascha
Bloem
Facsimile: +599-9-465-2366;
|
|
with
a copy to:
|
DVB
Bank AG
Representative
Office -- Greece
95
Akti Miaouli
185
35 Piraeus, GREECE
Attention: Nikolas
Chontzopoulos
Facsimile:
+30-210-455-7420;
|
||
21.3
|
Effective Date of
Notices
. Subject to Clauses 21.4 and
21.5:
|
|
(a)
|
a
notice that is sent by post shall be deemed served and given, and shall
take effect, three days after the date of delivery to the
post;
|
|
(b)
|
a
notice that is sent by FedEx, DHL or similar courier shall be deemed
served and given, and shall take effect, two days after the date of
delivery to such courier;
|
|
(c)
|
a
notice that is sent by facsimile shall be deemed served and given, and
shall take effect, two hours after its successful transmission is
completed; and
|
|
(d)
|
a
notice that is delivered by hand shall deemed served and given, and shall
take effect, at the time that it is
delivered.
|
21.4
|
Service Outside Business
Hours
. However, if under Clause 21.3 a notice would
be deemed to be served:
|
|
(a)
|
on
a day that is not a Business Day in the place of receipt;
or
|
|
(b)
|
on
such a Business Day, but after 5:00 p.m. local time on such Business
Day;
|
21.5
|
Illegible
Notices
. Clauses 21.3 and 21.4 do not apply if the
recipient of a notice notifies the sender within one hour after the time
at which the notice would otherwise be deemed to be served that the notice
has been received in a form that is illegible in any material
respect.
|
21.6
|
English Language . All notices given pursuant to or in connection with this Agreement or any other Finance Document shall be in the English language. |
21.7
|
Meaning of
“notice”
. In this Clause 21, “
notice
” includes any
demand, consent, authorization, approval, instruction, waiver or other
communication.
|
22
|
SUBORDINATION
|
22.1
|
[intentionally
omitted]
|
22.2
|
[intentionally
omitted]
|
22.3
|
[intentionally
omitted]
|
22.4
|
Subordination
. Subject
to Clause 22.5, during the Security Period, neither Obligor
shall:
|
|
(a)
|
claim
by way of any legal or administrative action any amount that may be due to
it from the other Obligor whether in respect of a payment made, or matter
arising out of, this Agreement or any other Finance Document, or any
matter unconnected with this Agreement or any other Finance Document;
or
|
|
(b)
|
take
or enforce any form of security from the other Obligor for such an amount,
or in any other way seek to have recourse in respect of such an amount
against any asset of the other Obligor;
or
|
|
(c)
|
set
off any such amount against any sum due from it to the other Obligor;
or
|
|
(d)
|
prove
or claim for such an amount in any liquidation, administration,
arrangement or similar procedure involving the other Obligor;
or
|
|
(e)
|
exercise
or assert any combination of the
foregoing.
|
22.5
|
Obligors’ Required
Action
. If during the Security Period, the Agent, by
notice to either Obligor, requires such Obligor to take any action
referred to in paragraphs (a) through (d) of Clause 22.4, in
relation to the other Obligor, such Obligor shall take that action as soon
as practicable after receiving the Agent’s
notice.
|
23
|
SUPPLEMENTAL
|
23.1
|
Rights Cumulative,
Non-Exclusive
. The rights and remedies granted to the
Credit Parties pursuant to the Finance
Documents:
|
|
(a)
|
are
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 applicable
law.
|
23.2
|
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.
|
23.3
|
Counterparts
. This
Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same
agreement.
|
23.4
|
Binding
Effect
. This Agreement shall be binding upon and inure
to the benefit of each of the parties hereto and their respective
successors and assigns, except that the Borrower shall not have the right
to assign its rights hereunder or any interest herein except as provided
in Clause 19.1.
|
24
|
THE
AGENT AND THE SECURITY TRUSTEE
|
24.1
|
Appointment and
Granting
.
|
|
(a)
|
Each
of the Lenders and the Swap Bank hereby irrevocably appoints and
authorizes the Agent to act as its agent hereunder and under any of the
other Finance Documents with such powers as are specifically delegated to
the Agent by the terms of this Agreement and the other Finance Documents,
together with such other powers as are reasonably incidental
thereto.
|
|
(b)
|
The
Security Trustee.
|
|
(i)
|
Each
of the Lenders, the Swap Bank and the Agent hereby irrevocably appoints
and authorizes the Security Trustee to act as security trustee hereunder
and under the other Finance Documents (other than the Notes) with such
powers as are specifically delegated to the Security Trustee by the terms
of this Agreement and such other Finance Documents, together with such
other powers as are reasonably incidental
thereto.
|
|
(ii)
|
To
secure the payment of all sums of money from time to time owing to the
Lenders under this Agreement, the Notes and the other Finance Documents in
the maximum principal amount of $48,000,000 plus accrued interest thereon
and all other amounts owing to the Lenders, the Swap Bank, the Agent and
the Security Trustee pursuant to this Agreement, the Notes and the other
Finance Documents, and the performance of the covenants of the Borrower
and the other Obligor herein and therein contained, and in consideration
of the premises and of the covenants herein contained and of the
extensions of credit by the Lenders and the entry by the Swap Bank into
the Master Agreement, the Security Trustee does hereby declare that it
shall hold as such trustee in trust for the benefit of the Lenders, the
Swap Bank and the Agent, from and after the execution and delivery
thereof, all of its right, title and interest as mortgagee in, to and
under each Mortgage and its right, title and interest as assignee and
secured party under the other Finance Documents (the right, title and
interest of the Security Trustee in and to the property, rights
|
and privileges described above, from and after the execution and delivery thereof, and all property hereafter specifically subjected to the lien of the indenture created hereby and by the Finance Documents by any amendment hereto or thereto are herein collectively called the “ Estate ”) TO HAVE AND TO HOLD the Estate unto the Security Trustee and its successors and assigns forever, BUT IN TRUST, NEVERTHELESS, for the equal and proportionate benefit and security of the Lenders, the Swap Bank and the Agent and their respective successors and assigns without any priority of any one over any other, UPON THE CONDITION that, unless and until an Event of Default under this Agreement shall have occurred and be continuing, the Borrower shall be permitted, to the exclusion of the Security Trustee, to possess and use the Ship. IT IS HEREBY COVENANTED, DECLARED AND AGREED that all property subject or to become subject hereto is to be held, subject to the further covenants, conditions, uses and trusts hereinafter set forth, and the Borrower, for itself and its respective successors and assigns, hereby covenants and agrees to and with the Security Trustee and its successors in said trust, for the equal and proportionate benefit and security of the Lenders, the Swap Bank and the Agent as hereinafter set forth. |
|
(iii)
|
The
Security Trustee hereby accepts the trusts imposed upon it as Security
Trustee by this Agreement, and the Security Trustee covenants and agrees
to perform the same as herein expressed and agrees to receive and disburse
all monies constituting part of the Estate in accordance with the terms
hereof.
|
24.2
|
Scope of
Duties
. Neither the Agent nor the Security Trustee
(which terms as used in this sentence and in Clause 24.5 shall
include reference to their respective affiliates and their own respective
and their respective affiliates’ officers, directors, employees, agents
and attorneys-in-fact): (a) shall have any duties or responsibilities
except those expressly set forth in this Agreement and the other Finance
Documents, and shall not by reason of this Agreement or any of the other
Finance Documents be (except, with respect to the Security Trustee, as
specifically stated to the contrary in this Agreement) a trustee for a
Lender; (b) shall be responsible to any Credit Party for any
recitals, statements, representations or warranties contained in this
Agreement or in any of the Finance Documents, or in any certificate or
other document referred to or provided for in, or received by any of them
under, this Agreement or any of the other Finance Documents, or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency
of this Agreement or any of the other Finance Documents or any other
document referred to or provided for herein or therein or for any failure
by the Borrower, the Guarantor or any other person to perform any of its
obligations hereunder or thereunder or for the location, condition or
value of any property covered by any lien under any of the Finance
Documents or for the creation, perfection or priority of any such lien;
(c) shall be required to initiate or conduct any litigation or
collection proceedings hereunder or under any of the Finance Documents
unless expressly instructed to do so in writing by the Majority Lenders;
or (d) shall be responsible for any action taken or omitted to be
taken by it hereunder or under any of the Finance Documents or under any
other document or instrument referred to or provided for herein or therein
or in connection herewith or therewith, except for its own gross
negligence or willful misconduct. Each of the Agent and the
Security Trustee may employ agents and attorneys-in-fact and neither the
Agent nor the Security Trustee shall be responsible for the negligence or
misconduct of any such agents or attorneys-in-fact selected by it in good
faith. Each of the Agent and the Security Trustee may
|
deem and treat the payee of a Note as the holder thereof for all purposes hereof unless and until a written notice of the assignment or transfer thereof shall have been filed with and accepted by the Agent in accordance herewith. |
24.3
|
Reliance
. Each
of the Agent and the Security Trustee shall be entitled to rely upon any
certification, notice or other communication (including any thereof by
telephone, telex, telefacsimile, telegram or cable) believed by it to be
genuine and correct and to have been signed or sent by or on behalf of the
proper person or persons, and upon advice and statements of legal counsel,
independent accountants and other experts selected by the Agent or the
Security Trustee, as the case may be. As to any matters not
expressly provided for by this Agreement or any of the other Finance
Documents, each of the Agent and the Security Trustee shall in all cases
be fully protected in acting, or in refraining from acting, hereunder or
thereunder in accordance with instructions signed by the Majority Lenders,
and such instructions and any action taken or failure to act pursuant
thereto shall be binding on all of the Lenders and the Swap
Bank.
|
24.4
|
Knowledge
. Neither
the Agent nor the Security Trustee shall be deemed to have knowledge or
notice of the occurrence of a Potential Event of Default or an Event of
Default (other than, in the case of the Agent, the non-payment of
principal of or interest on the Loan or the Advance) unless it shall have
received notice from a Lender or an Obligor specifying such Potential
Event of Default or Event of Default and stating that such notice is a
“Notice of Default.” If the Agent receives such a notice of the
occurrence of such Potential Event of Default or Event of Default, the
Agent shall give prompt notice thereof to the Security Trustee, the
Lenders and the Swap Bank (and shall give each of the Security Trustee,
the Lenders and the Swap Bank prompt notice of each such
non-payment). Subject to Clause 24.8, the Agent and the
Security Trustee shall take such action with respect to such Potential
Event of Default or Event of Default or other event as shall be directed
by the Majority Lenders, except that, unless and until the Agent and the
Security Trustee shall have received such directions, each of the Agent
and the Security Trustee may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Potential
Event of Default or Event of Default or other event as it shall deem
advisable in the best interest of the Lenders and the Swap
Bank.
|
24.5
|
Agent and Security Trustee as
Lenders
. Each of the Agent and the Security Trustee (and
any successor acting as Agent or Security Trustee, as the case may be) in
its individual capacity as a Lender hereunder shall have the same rights
and powers hereunder as any other Lender and may exercise the same as
though it were not acting as the Agent or the Security Trustee, as the
case may be, and the term “Lender” and “Lenders” shall, unless the context
otherwise indicates, include each of the Agent and the Security Trustee in
its individual capacity. Each of the Agent and the Security
Trustee (and any successor acting as Agent or Security Trustee, as the
case may be) and their respective affiliates may (without having to
account therefor to any Lender or the Swap Bank) accept deposits from,
lend money to and generally engage in any kind of banking, trust or other
business with the Obligors and any of their respective subsidiaries or
affiliates as if it were not acting as the Agent or the Security Trustee,
as the case may be, and each of the Agent and the Security Trustee and
their respective affiliates may accept fees and other consideration from
the Borrower and the Guarantor for services in connection with this
Agreement or otherwise without having to account for the same to the
Lenders or the Swap Bank.
|
24.6
|
Indemnification of the Agent and the Security
Trustee.
The Lenders agree to
indemnify each of the Agent and the Security Trustee (to the extent not
reimbursed under other provisions of this Agreement, but without limiting
the obligations of either Obligor under said other provisions), ratably in
accordance with the aggregate principal amount of each Lender’s
participation in the Loan, for any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever that may be imposed on,
incurred by or asserted against the Agent or the Security Trustee in any
way relating to or arising out of this Agreement or any other Finance
Document or any other documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby (including the
costs and expenses that the Borrower is to pay hereunder, but excluding,
unless an Event of Default shall have occurred and be continuing, normal
administrative costs and expenses incident to the performance of their
respective agency duties hereunder) or the enforcement of any of the terms
hereof or thereof or of any such other documents, except that no Lender
shall be liable for any of the foregoing to the extent they arise from the
gross negligence or willful misconduct of the party to be
indemnified.
|
24.7
|
Reliance on Agent or Security
Trustee
. Each of the Lenders and the Swap Bank agrees
that it has, independently and without reliance on the Agent, the Security
Trustee or any other Credit Party, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of
the Borrower and the Guarantor and decision to enter into this Agreement
and that it will, independently and without reliance upon the Agent, the
Security Trustee or any other Credit Party, and based on such documents
and information as it shall deem appropriate at the time, continue to make
its own analysis and decisions in taking or not taking action under this
Agreement or any of the Finance Documents. None of the Agent or
the Security Trustee shall be required to keep itself informed as to the
performance or observance by either of the Obligors of its obligations
under this Agreement or any other Finance Document or any other document
referred to or provided for herein or therein or to inspect the properties
or books of either Obligor. Except for notices, reports and
other documents and information expressly required to be furnished to the
Lenders and the Swap Bank by the Agent or the Security Trustee hereunder,
neither the Agent nor the Security Trustee shall have any duty or
responsibility to provide any Lender or the Swap Bank with any credit or
other information concerning the affairs, financial condition or business
of the Borrower or the Guarantor or any of their respective parents,
subsidiaries or Affiliates that may come into the possession of the Agent,
the Security Trustee or any of their respective
Affiliates.
|
24.8
|
Actions by Agent and Security
Trustee
. Except for action expressly required of the
Agent or the Security Trustee hereunder and under the other Finance
Documents, each of the Agent and the Security Trustee shall in all cases
be fully justified in failing or refusing to act hereunder and thereunder
unless it shall receive further assurances to its satisfaction from the
Lenders of their indemnification obligations under Clause 24.6
against any and all liability and expense that may be incurred by it by
reason of taking or continuing to take any such
action.
|
24.9
|
Resignation and
Removal
. Subject to the appointment and acceptance of a
successor Agent or Security Trustee (as the case may be) as provided
below, each of the Agent and the Security Trustee may resign at any time
by giving notice thereof to the Lenders, the Swap Bank and the Obligors,
and the Agent or the Security Trustee may be removed at any time
|
with or without cause by the Majority Lenders. Upon any such resignation or removal, the Majority Lenders shall have the right to appoint a successor Agent or Security Trustee, as the case may be, which shall be a Lender, or a Lender with an Affiliate, that has an office in New York, New York. If no successor Agent or Security Trustee, as the case may be, shall have been so appointed by the Lenders or, if appointed, shall not have accepted such appointment within 30 days after the retiring Agent’s or Security Trustee’s, as the case may be, giving of notice of resignation or the Majority Lenders’ removal of the retiring Agent or Security Trustee, as the case may be, then the retiring Agent or Security Trustee, as the case may be, may, on behalf of the Lenders, appoint a successor Agent or Security Trustee, as the case may be, which shall be a Lender, or a Lender with an Affiliate, that has an office in New York, New York. Upon the acceptance of any appointment as Agent or Security Trustee hereunder by a successor Agent or Security Trustee, such successor Agent or Security Trustee, as the case may be, shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Agent or Security Trustee, as the case may be, and the retiring Agent or Security Trustee shall be discharged from its duties and obligations hereunder. After any retiring Agent’s or Security Trustee’s resignation or removal hereunder as Agent or Security Trustee, as the case may be, the provisions of this Clause 24 shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Agent or the Security Trustee, as the case may be. |
24.10
|
Release of
Collateral
. Without the prior written consent of all of
the Lenders and the Swap Bank, neither the Agent nor the Security Trustee
shall consent to any modification, supplement or waiver under any Finance
Document or release any Collateral or otherwise terminate any lien under
any Finance Document, except that no such consent shall be required, and
each of the Agent and the Security Trustee shall be authorized, to release
any lien covering property that is the subject of a disposition of
property permitted hereunder or to which the Lenders and the Swap Bank
have consented.
|
25
|
LAW
AND JURISDICTION
|
25.1
|
Governing
Law
. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
|
25.2
|
Consent to
Jurisdiction
.
|
|
(a)
|
Each
of parties hereto irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of any New York State court
or Federal court of the United States of America sitting in New York
County, and any appellate court thereof, in any action, suit or proceeding
arising out of or relating to this Agreement or any other Finance Document
or for recognition or enforcement of any judgment, and each of the parties
hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action, suit or proceeding may be heard and determined
in such New York State Court or, to the extent permitted by law, in such
Federal court. Each of the parties hereto agrees that a final
judgment in any such action, suit or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any
other manner provided by law.
|
(b)
|
Nothing
in this Clause 25.2 shall affect the right of any Credit Party to
bring any action or proceeding against an Obligor or its property in the
courts of any other jurisdiction where such action or proceeding may be
heard.
|
|
(c)
|
Each
of the parties hereto irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action, suit
or proceeding arising out of or relating to this Agreement or any other
Finance Document in any New York State or Federal court and the defense of
an inconvenient forum to the maintenance of such action, suit or
proceeding in any such court and any immunity from jurisdiction of any
court or from any legal process with respect to themselves or their
property.
|
|
(d)
|
Each
Obligor irrevocably appoints Seward & Kissel LLP, with an office at
One Battery Park Plaza, New York, New York 10004 U.S.A., as its agent to
receive on its behalf service of copies of the summons and complaint and
any other process which may be served in any such action, suit or
proceeding. If the appointment of Seward & Kissel LLP as
agent pursuant to the preceding sentence shall cease to be effective as to
any Obligor or Seward & Kissel LLP shall at any time cease to have an
office in New York County, each of the Obligors shall immediately appoint
another person having an office in New York County and otherwise
acceptable to the Agent to accept service on its behalf. If
Seward & Kissel LLP shall at any time change its name or shall move
its office in the County of New York from One Battery Park Plaza, New
York, New York 10004 U.S.A., each Obligor shall promptly notify the each
of the Lenders, the Swap Bank and the Agent of such new name or address,
as the case may be. Each Obligor hereby consents to service of
process in connection with the subject matter specified in the first
sentence of Clause 25.2(a) by registered or certified mail, FedEx,
DHL or similar courier at the address to which notices to it are to be
given, it being agreed that service in such manner shall constitute valid
service upon such party or its respective successors or assigns in
connection with any such action or proceeding only; provided, that nothing
in this Clause 25.2(d) shall affect the right of any party to serve
legal process in any other manner permitted by applicable
law.
|
25.3
|
Rights
unaffected
. Nothing in this Clause 25 shall exclude
or limit any right a Credit 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.
|
25.4
|
Meaning of
“proceedings”
. In this Clause 25, “
proceedings
” means
proceedings of any kind, including an application for a provisional or
protective measure.
|
26
|
PATRIOT
ACT
|
27
|
WAIVER
OF JURY TRIAL
|
JAPAN
II SHIPPING COMPANY LIMITED
By:
/s/ Arthur
Lichtenstein
Name:
Arthur Lichtenstein
Title:
Attorney-in-Fact
|
|
TOP
SHIPS INC.,
as
Guarantor
By:
/s/ Arthur
Lichtenstein
Name:
Arthur Lichtenstein
Title:
Attorney-in-Fact
|
|
DVB
BANK AG,
as
Swap Bank
By:
/
s/
John
F.
Imhof, Jr.
Name:
John F. Imhof, Jr.
Title:
Attorney-in-Fact
|
|
DVB
BANK AMERICA N.V.,
as
Agent and Security Trustee
By:
/s/ John F. Imhof,
Jr.
Name:
John F. Imhof, Jr.
Title:
Attorney-in-Fact
|
INITIAL
LENDER(S):
DVB
BANK AMERICA N.V.,
as
Initial Lender
By:
/s/ John F. Imhof,
Jr.
Name:
John F. Imhof, Jr.
Title:
Attorney-in-Fact
|
Lender
|
Commitment
|
|
DVB
BANK AMERICA N.V.
|
$48,000,000
|
|
Lending
Office
:
|
DVB
Bank America N.V.
Zeelandia
Office Park
Kaya
W.F.G. Mensing 14
P.O.
Box 3107
Curaçao,
NETHERLANDS ANTILLES
|
|
Address for
Notices
:
|
DVB
Bank America N.V.
Zeelandia
Office Park
Kaya
W.F.G. Mensing 14
P.O.
Box 3107
Curaçao,
NETHERLANDS ANTILLES
Attention: Natascha
Bloem
Facsimile: +599-9-465-2366;
|
|
with
a copy to:
|
||
DVB
Bank AG
Representative
Office – Greece
95
Akti Miaouli
185
35 Piraeus, GREECE
Attention: Nikolas
Chontzopoulos
Facsimile: +30-210-455-7420
|
||
To:
|
DVB
Bank America N.V., as Agent
Zeelandia
Office Park
Kaya
W.F.G. Mensing 14
P.O.
Box 3107
Curaçao,
Netherlands Antilles
Attention: Natascha
Bloem
Facsimile:
+599-9-465-2366
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|
cc:
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DVB
Bank AG
Representative
Office – Greece
95
Akti Miaouli
185
35 Piraeus, GREECE
Attention: Nikolas
Chonzopoulos
Facsimile:
+30-210455-7420
|
|
Date:
________, 2008
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(a)
|
the
representations and warranties in Clause 9 of the Loan Agreement
would be true and not misleading if repeated on the date of this notice
with reference to the circumstances now
existing;
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(b)
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no
Event of Default or Potential Event of Default has occurred or will result
from the borrowing of the Loan.
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By:
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___________________________
Name:
Title:
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1.
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An
original of each Finance Document (other than those Finance Documents to
be delivered in connection with the Ship pursuant to paragraph 2 of Part B
hereof) and each document required to be delivered by each such Finance
Document, each duly executed by each party
thereto;
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2.
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Copies
of the constitutional documents, and each amendment thereto, of each
Obligor, certified as of a date reasonably near the date of the relevant
Drawdown Notice by the president or the secretary (or equivalent officer)
of such party as being a true and correct copy
thereof;
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3.
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Copies
of certificates dated as of a date reasonably near the date of the
Drawdown Notice, certifying that each Obligor is duly incorporated and in
good standing under the laws of such party’s jurisdiction of
incorporation;
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4.
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Copies
of resolutions of the directors (or equivalent governing body) (and where
required, the shareholders or equivalent equity holders)
of:
|
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(a)
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each
Obligor authorizing the execution of each of the Finance Documents to
which such Obligor is or is to be a party (and additionally, in the case
of the Borrower, the Memorandum of Agreement) and authorizing named
officers or attorneys-in-fact to execute such documents and, in the case
of the Borrower, to give the Drawdown Notice and other notices required by
the Finance Documents; and
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(b)
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the
seller under the Memorandum of Agreement authorizing the execution of the
Memorandum of Agreement and authorizing named officers or
attorneys-in-fact to execute such documents and to give any notices
required thereunder,
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5.
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The
original or a certified copy of any power of attorney under which any
Finance Document is to be executed on behalf of an
Obligor;
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6.
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Copies
of all consents that any of the Obligors requires to enter into, or make
any payment or perform any of its obligations under or in connection with
the transactions contemplated by this Agreement and the Finance Documents,
each certified as of a date reasonably near the date of the relevant
Drawdown Notice by the president or the secretary (or equivalent officer)
of such party as being a true and correct copy thereof, or certification
by such president or secretary (or equivalent officer) that no such
consents are required;
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7.
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A
copy of the Memorandum of Agreement, to be in form and substance
acceptable to the Majority Lenders and certified as of a date reasonably
near the date of the relevant Drawdown Notice by the president or the
secretary (or equivalent officer) of the Borrower as being a true and
correct copy thereof and further
certifying;
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(a)
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such
document remains valid and in full force and effect as of the anticipated
delivery date of the Ship;
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(b)
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the
seller in respect of the Memorandum of Agreement is not in default under
the terms of such document; and
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(c)
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there
is no pending dispute or arbitration proceeding arising out of or in
connection with any such document;
and
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8.
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Documentary
evidence that Seward & Kissel LLP has accepted its appointment as
agent for service of process in respect of each
Obligor.
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9.
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All
know-your-customer information
and information under applicable
anti-money laundering rules and regulations, in each case as requested by
any Lender in connection with its internal compliance regulations, under
the PATRIOT Act, applicable EU regulations or
otherwise.
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1.
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A
certificate of each Obligor, signed on behalf of each such party by the
president or the secretary (or equivalent officer) of such party, dated as
of the Expected Drawdown Date (the statements made in such certificate
shall be true on and as of the Expected Drawdown Date), certifying as
to:
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(a)
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the
absence of any amendments to the constitutive documents of such party
since the date of the certificate referred to in paragraph 2 of
Part A above;
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(b)
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the
absence of any proceeding for the dissolution or liquidation of such
party;
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(c)
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the
veracity in all material respects of the representations and warranties
contained in this Agreement and the other Finance Documents as though made
on and as of the Expected Drawdown
Date;
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(d)
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the
absence of any material misstatement of fact in any information provided
by the Obligors to the Agent, the Security Trustee or any Lender and that
such information did not omit to state any material fact necessary to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; and
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(e)
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the
absence of any event occurring and continuing, or that would result from
the making of the Advance, that constitutes or would constitute a
Potential Event of Default or an Event of
Default;
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2.
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A
duly executed original of the Mortgage, Insurance Assignment, Earnings
Assignment, Charter Assignment and Manager’s Undertakings (and of each
document required to be delivered thereby), duly executed by each party
thereto, and documentary evidence that the Security Interest created by
such Finance Documents have been duly
perfected;
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(a)
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the
Ship has been unconditionally delivered by the seller to, and
unconditionally accepted by, the Borrower in accordance with all of the
terms and conditions of the Memorandum of Agreement, free and clear of all
liens and encumbrances, together with a copy, certified as of the relevant
Expected Drawdown Date by the president or the secretary (or equivalent
officer) of the Borrower as being a true and correct copy of the original,
of:
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(i)
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the
Protocol of Delivery and Acceptance for the Ship, duly executed by the
seller and the relevant Borrower;
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(ii)
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the
Bill of Sale delivered by the seller to the
Borrower;
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(iii)
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the
commercial invoice issued by the seller to the
Borrower;
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(iv)
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the
corporate authorities of the seller permitting such seller to sell the
Ship to the Borrower under the terms of the Memorandum of Agreement;
and
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(v)
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each
charter in effect with respect to the
Ship;
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(b)
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there
is no pending dispute or arbitration proceedings arising out of or in
connection with the Memorandum of Agreement, which may be established by a
certificate dated as of the relevant Expected Drawdown Date by the
president, the secretary or an equivalent officer of the
Borrower;
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(c)
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the
Ship is registered in the name of the Borrower under Liberian registry,
free of all recorded liens and encumbrances, save as contemplated by the
Finance Documents (which shall be established by a Certificate of
Ownership and Encumbrance issued by the appropriate Liberian authorities
stating that the Ship is owned by the Borrower and that there are on
record no other mortgages, liens or other encumbrances on the Ship except
the Mortgage);
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(d)
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the
Mortgage has been preliminarily registered against the Ship as a valid
first preferred ship mortgage in accordance with the laws of Liberia and
the Security Interest created by the Mortgage shall have been duly
perfected;
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(e)
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the
Ship is classed with the Classification Society in the highest
classification and rating for vessels of the same age and type without any
outstanding conditions or recommendations affecting class (other than
those for which the time prescribed for curing the condition or
recommendation has not passed), which shall be established by a
Confirmation of Class Certificate issued by the Classification Society of
the Ship and dated a date reasonably near the relevant Expected Drawdown
Date; a “Class Statement” or similar instrument shall not be acceptable
for purposes of this clause;
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(f)
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the
Ship:
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(i)
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is
insured in compliance with the terms of the Mortgage, including
mortgagee’s interest and loss of hire
insurance;
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(ii)
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is
or will be managed by the Approved Manager and the relevant Approved
Technical Submanager in accordance with management agreements acceptable
to the Agent; and
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(iii)
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has
been inspected and found to be in a satisfactory condition by an inspector
appointed by the Agent at the cost of the Borrower;
and
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(g)
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if
chartered to an Approved Charterer, the Ship has been unconditionally
delivered by the Borrower to, and unconditionally accepted by, such
Approved Charterer in accordance with all of the terms and conditions of
the relevant Approved Charter, together with a copy, certified as of the
Expected Drawdown Date by the president or the secretary (or equivalent
officer) of the Borrower as being a true and correct copy of the original,
of the Protocol of Delivery and Acceptance for the Ship, duly executed by
the Borrower and such Approved
Charterer;
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4.
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A
certificate by the president or the secretary (or equivalent officer) of
the Borrower, or a certificate of the Approved Manager, identifying and
giving the address and other communication details of the ISM Responsible
Person(s) for the Ship;
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5.
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Copies
of the Document of Compliance and Safety Management Certificate referred
to in paragraph (a) of the definition of the ISM Code Documentation
for the Ship, certified as true and in effect by the president or the
secretary (or equivalent officer) of the Borrower or the Approved Manager,
provided that the Borrower may deliver to the Agent on or before the
Expected Drawdown Date an undertaking, in form and substance satisfactory
to the Agent, to deliver a copy of the Safety Management Certificate to
the Agent within ten Business Days after the relevant Expected Drawdown
Date;
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6.
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Copies
of such other ISM Code Documentation as the Agent may have requested by
written notice to the Borrower not later than two days before the relevant
Expected Drawdown Date, certified as true and complete in all material
respects by the Borrower or the relevant Approved
Manager;
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(i)
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the
Ship has and will maintain for the duration of the Security Period a valid
International Ship Security Certificate (and either a true copy of such
International Ship Security Certificate shall be attached to such
Borrower’s certification or the Borrower shall undertake to deliver a
certified copy of such certificate as soon as it becomes
available);
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(ii)
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the
security system of the relevant Ship and associated security equipment
complies with, and at all times during the Security Period will comply
with, the applicable requirements of Chapter XI-2 of SOLAS and Part A of
the ISPS Code; and
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(iii)
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an
approved ship security plan is in place and will be maintained at all
times during the Security Period.
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8.
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A
favorable opinion of Watson, Farley & Williams (New York) LLP, New
York, Marshall Islands and Liberian counsel for the Credit Parties, in
form, scope and substance satisfactory to the Credit
Parties;
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9.
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A
favorable opinion of Seward & Kissel LLP, New York, Marshall Islands
and Liberian counsel for the Obligors, in form, scope and substance
satisfactory to the Credit Parties;
and
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10.
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Documentary
evidence that it has funds adequate to cover the acquisition cost of the
Ship five Business Days prior to the Ship’s expected delivery
date.
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TOP SHIPS INC. | ||
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By:
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_______________________________
Name:
Title: Chief Financial
Officer
|
Clause
10.1(v)(i): Cash in Bank Accounts
:
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|
Names
of members of the Group as of
the
Statement Date:
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______________________________
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Cash
in bank accounts in the name of
the
Guarantor or in the name of any of
a
member of the Group (excluding any
bank
accounts that shall be
subject
to any Security Interest)
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$_____________
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[itemize
by bank and Group
member]
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I.
|
Total
Debt
:
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||
(a)
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moneys
borrowed or raised by the Guarantor and its subsidiaries
|
$_____________
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|
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|||
(b)
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bonds,
notes, loan stock, debentures, commercial paper or other debt securities
issued by the Guarantor or any of its subsidiaries not for the time being
beneficially owned by the Guarantor or any of its
subsidiaries
|
$_____________
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|
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|||
(c)
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sums
outstanding under acceptances by the Guarantor or any of its subsidiaries
or by any bank or acceptable house under acceptance credits opened on
behalf of the Guarantor or any subsidiary
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$_____________
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(d)
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deferred
indebtedness of the Guarantor or any of its subsidiaries for payment of
the acquisition or construction price for assets or services acquired or
constructed
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$_____________
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(e)
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rental
payments under Finance Leases
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$_____________
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(f)
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receivables
sold or discounted with a right of recourse to the Guarantor or any of its
subsidiaries
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$_____________
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(g)
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the
nominal amount of any issued and paid up share capital (other than equity
share capital) of any subsidiary not beneficially owned by the Guarantor
or another subsidiary
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$____________
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(h)
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preference
share capital redeemable prior to the last day of the Security
Period
|
$____________
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(i)
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over
all or any part of the undertaking, property, assets, rights or revenues
of the Guarantor or any of its subsidiaries irrespective of whether or not
such indebtedness is supported by a personal covenant on the part of the
Guarantor or any of its subsidiaries
|
$____________
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(j)
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indebtedness
incurred in respect of swaps, forward exchange contracts, futures or other
derivatives
|
||
(k)
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any
other liability arising from a transaction having the commercial effect of
a borrowing or the raising of money
|
$_____________
plus
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(l)
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obligations
under guarantees in respect of the obligations of any other person which,
if such person were the Guarantor or a subsidiary would fall within
paragraphs (a) to (k) above
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$_____________
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|
minus:
|
|||
moneys
owing by the Guarantor to a subsidiary or by a subsidiary to the Guarantor
or to another subsidiary
|
$_____________
equals
|
||
Total
Debt =
|
$_____________
|
||
The
principal amount of Total Debt deemed to be outstanding in relation to
Finance Leases or hire purchase agreements shall be the present value of
the minimum lease or hire payments discounted at the interest rate
implicit in the relevant lease or hire purchase
agreement
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(c)
|
so
far as not otherwise excluded as attributable to minority interests, a sum
equal to the aggregate of the amount of which the book value of any fixed
assets of any member of the Group has been written up after
December 31, 2005 (or, in the case of a company becoming a subsidiary
after that date, the date on which that company became a subsidiary) by
way of revaluation and, for the purposes of this paragraph (c) any
increase in the book value of any fixed assets resulting from its transfer
by one member of the Group to another member of the Group shall be deemed
to result from a writing up of its book value by way of
revaluation
|
$_____________
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(d)
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amounts
set aside for taxation as at the date of such balance sheet and making
such adjustments as may be appropriate in respect of any significant
additional taxation expected to result from transactions carried out by
any member of the Group after such date and not reflected in
that balance sheet
|
$_____________
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(e)
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all
amounts attributable to minority interests in subsidiaries
|
$_____________ and
plus/minus
|
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(f)
|
adjustments
appropriate in respect of any variation in the amount of such paid up
spare capital or any such reserves after the of the attached financial
statements (but so that no such adjustment shall be made in respect of any
variation in profit and loss account except to the extent of any profit or
loss, calculated on a cumulative basis, recorded in the consolidated
profit and loss account of the Group delivered to the Agent before the
date of this Agreement, or under Clause 10.1(g) in respect of any
subsequent period)
|
$_____________ plus/minus
|
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(g)
|
adjustments
appropriate in respect of any distribution declared, recommended or made
by any member of the Group (otherwise than attributable directly or
indirectly to the Guarantor) out of profits earned up to and including the
date of the latest audited balance sheet of that member of the Group to
the extent that such distribution is not provided for in that balance
sheet
|
$_____________
plus/minus
|
[NAME
OF ASSIGNOR]
|
[NAME
OF ASSIGNEE]
|
By: _____________________________
|
By: _____________________________
|
Name:
|
Name:
|
Title:
|
Title:
|
Address
for Notices to the Assignee:
____________________________
____________________________
____________________________
|
|
Address
of Assignee’s Lending Office:
____________________________
____________________________
____________________________
|
By:
|
_______________________
|
Name: | |
Title: |
1
|
Definitions
and Interpretation
|
1
|
2
|
The
Loan and its Purpose
|
12
|
3
|
Conditions
of Utilisation
|
12
|
4
|
Advance
|
15
|
5
|
Repayment
|
15
|
6
|
Prepayment
|
15
|
7
|
Interest
|
16
|
8
|
Indemnities
|
19
|
9
|
Fees
|
23
|
10
|
Security
and Application of Moneys
|
23
|
11
|
Representations
|
26
|
12
|
Undertakings
and Covenants
|
29
|
13
|
Events
of Default
|
36
|
14
|
Assignment
and Sub-Participation
|
41
|
15
|
Set-Off
|
42
|
16
|
Payments
|
42
|
17
|
Notices
|
44
|
18
|
Partial
Invalidity
|
45
|
19
|
Remedies
and Waivers
|
45
|
20
|
Miscellaneous
|
45
|
21
|
Law
and Jurisdiction
|
46
|
SCHEDULE
1: Conditions Precedent and Subsequent
|
48
|
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Part
I: Conditions precedent
|
48
|
|
Part
II: Conditions subsequent
|
52
|
|
Part
III: Delivery conditions precedent
|
53
|
|
Part
IV: Delivery conditions subsequent
|
56
|
|
SCHEDULE
3: Form of Compliance Certificate
|
58
|
(1)
|
LICHTENSTEIN SHIPPING COMPANY
LIMITED,
a company incorporated under the laws of the Republic of
Liberia whose registered office is at 80, Broad Street Monrovia, Liberia
(the
"Borrower");
and
|
(2)
|
ALPHA BANK A.E.,
acting
through its office at 89 Akti Miaouli, GR 185 38 Piraeus, Greece (the
"Lender").
|
(A)
|
The
Borrower has agreed to purchase the Vessel from the Builder on the terms
of the Building Contract and intends to register the Vessel on delivery
(scheduled to take place on or before February 2009) under the Approved
Flag.
|
(B)
|
The
Lender has agreed to advance to the Borrower 539,000,000 representing
approximately eighty three per cent (83%) of the Contract Price of the
Vessel to assist the Borrower to finance part of the Contract Price of the
Vessel, and to re-finance certain existing indebtedness in respect of the
Vessel in four Drawings.
|
1
|
Definitions
and Interpretation
|
|
1.1
|
In
this Agreement:
|
|
(a)
|
moneys
borrowed;
|
|
(b)
|
any
acceptance credit;
|
|
(c)
|
any
bond, note, debenture, loan stock or similar
instrument;
|
|
(d)
|
any
finance or capital lease;
|
|
(e)
|
receivables
sold or discounted (other than on a non-recourse
basis);
|
|
(f)
|
deferred
payments for assets or services;
|
|
(g)
|
any
derivative transaction protecting against or benefiting from fluctuations
in any rate or price (and, when calculating the value of any derivative
transaction, only the marked to market value shall be taken into
account);
|
|
(h)
|
any
amount raised under any other transaction (including any forward sale or
purchase agreement) having the commercial effect of a
borrowing;
|
(i) | any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; and |
(j) | the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (i) above. |
|
(a)
|
the
applicable Screen Rate; or
|
|
(b)
|
(if
no Screen Rate is available for any Interest Period) the arithmetic mean
of the rates (rounded upwards to the nearest whole multiple of
one-sixteenth of one per centum) quoted to the Lender in the London
interbank market,
|
|
(a)
|
an
actual, constructive, arranged, agreed or compromised total loss of the
Vessel; or
|
|
(b)
|
the
requisition for title or compulsory acquisition of the Vessel by any
government or other competent authority (other than by way of requisition
for hire); or
|
|
(c)
|
the
capture, seizure, arrest, detention or confiscation of the Vessel by any
government or by persons acting or purporting to act on behalf of any
government, unless the Vessel is released and returned to the possession
of
|
|
|
the
Borrower or the Bareboat Charterer within one month after the capture,
seizure, arrest, detention or confiscation in
question.
|
|
1.2
|
In
this Agreement:
|
|
1.2.1
|
words
denoting the plural number include the singular and vice
versa;
|
|
1.2.2
|
words
denoting persons include corporations, partnerships, associations of
persons (whether incorporated or not) or governmental or
quasi-governmental bodies or authorities and vice
versa;
|
|
1.2.3
|
references
to Recitals, Clauses and Schedules are references to recitals, clauses and
schedules to or of this Agreement;
|
|
1.2.4
|
references
to this Agreement include the Recitals and the
Schedules;
|
|
1.2.5
|
the
headings and contents page(s) are for the purpose of reference only, have
no legal or other significance, and shall be ignored in the interpretation
of this Agreement;
|
|
1.2.6
|
references
to any document (including, without limitation, to all or any of the
Relevant Documents) are, unless the context otherwise requires, references
to that document as amended, supplemented, novated or replaced from time
to time;
|
|
1.2.7
|
references
to statutes or provisions of statutes are references to those statutes, or
those provisions, as from time to time amended, replaced or
re-enacted;
|
|
1.2.8
|
references
to the Lender include its successors, transferees and assignees;
and
|
|
1.2.9
|
a
time of day (unless otherwise specified) is a reference to London
time.
|
|
1.3
|
Offer
letter
|
2
|
The
Loan and its Purpose
|
|
2.1
|
Amount
Subject to the
terms of this Agreement, the Lender agrees to make available to the
Borrower a term loan not exceeding the Maximum Loan
Amount.
|
|
2.2
|
Purpose
The Borrower
shall apply the Loan for the purposes referred to in Recital
(B).
|
|
2.3
|
Monitoring
The Lender
shall not be bound to monitor or verify the application of any amount
borrowed under this Agreement.
|
3
|
Conditions
of Utilisation
|
|
3.1
|
Conditions precedent
The
Borrower is not entitled to have any Drawing advanced unless the Lender
has received all of the documents and other evidence listed in Part I of
Schedule 1
(Conditions
precedent).
|
|
3.2
|
Further conditions precedent
The Lender will only be obliged to advance a Drawing if on the date
of the Drawdown Notice and on the proposed Drawdown
Date:
|
|
3.2.1
|
no Default is continuing or would
result from the advance of that Drawing;
and
|
|
3.2.2
|
the
representations made by the Borrower under Clause 11
(Representations)
are
true in all material respects.
|
|
3.3
|
Drawing limit
The Lender
will only be obliged to advance a Drawing
if:
|
|
3.3.1
|
that
Drawing will not increase the Loan to a sum in excess of the Maximum Loan
Amount;
|
|
3.3.2
|
the
proposed Drawing is either applied towards re-financing any amount due
under the RBS Agreement (in the case of the first Drawing to occur) or
coincides with the due date for payment by the Borrower
of
an instalment of the Contract Price of the Vessel and that Drawing will be
applied in payment of that instalment (as applicable);
and
|
|
3.3.3
|
that
Drawing will be applied in or towards refinancing (in the case of the
first and second instalment) or payment of one of the following
instalments of the Contract Price of the Vessel under the Building
Contract and shall amount to a maximum of the sum set out below opposite
the relevant instalment under the column
"Drawing"
and the
Borrower shall pay at least three (3) Business Days prior to the Drawdown
Date of that Drawing (other than in the case of the first Drawing to
occur) the Equity Portion in the sum set out below opposite the relevant
instalment under the column
"Equity
Portion":
|
Instalment
|
Drawing
|
Equity
Portion
|
Total
|
Refinancing
offirst and second
instalment
(already financed by RBS)
(upon
execution of this agreement and delivery of the documents referred to in
Clause 3.1)
|
$
10,626,750
|
||
third
instalment (upon keel laying)
(on
or about 18 August 2008)
|
$7,084,500
|
$2,361,500
|
$9,446,000
|
fourth
instalment (upon launching)
(on
or about 5 November 2008)
|
$7,084,500
|
$2,361,500
|
$9,446,000
|
fifth
instalment
(upon
delivery)
(on
or about 17
|
$14,204,250
|
-
|
$14,204,250
|
February 2009)
|
|
|
3.4
|
Conditions subsequent
The Borrower undertakes to deliver or to cause to be delivered to
the Lender on, or as soon as practicable after, the relevant Drawdown Date
the additional documents and other evidence listed in Part II of Schedule
I
(Conditions
subsequent).
|
|
3.5
|
Delivery conditions precedent
Whether or not a Drawing is advanced on the Delivery Date, the
Borrower undertakes to deliver or to cause to be delivered to the Lender
on the Delivery Date the additional documents and other evidence listed in
Part III of Schedule I
(Delivery conditions
precedent).
|
|
3.6
|
Delivery conditions subsequent
Whether or not a Drawing is advanced on the Delivery Date, the
Borrower undertakes to deliver or to cause to be delivered to the Lender
on, or as soon as practicable after, the Delivery Date the additional
documents and other evidence listed in Part IV of Schedule I
(Delivery conditions
subsequent).
|
|
3.7
|
No Waiver
If the Lender
in its sole discretion agrees to advance a Drawing to the Borrower before
all of the documents and evidence required by Clause 3.1
(Conditions precedent)
and/or Clause 3.5
(Delivery conditions
precedent)
have been delivered to or to the order of the Lender,
the Borrower undertakes to deliver all outstanding documents and evidence
to or to the order of the Lender no later than thirty (30) days after the
relevant Drawdown Date or such other date specified by the
Lender.
|
|
3.8
|
Form and content
All
documents and evidence delivered to the Lender under this Clause 3
shall:
|
|
3.8.1
|
be
in form and substance acceptable to the Lender;
and
|
|
3.8.2
|
if
required by the Lender, be certified, notarised, legalised or attested in
a manner acceptable to the Lender.
|
4
|
Advance
|
5
|
Repayment
|
|
5.1
|
Repayment of Loan
The
Borrower agrees to repay the Loan to the Lender by forty consecutive
quarterly instalments, the first thirty-nine such repayment instalments
(1st-39th), each in the sum of six hundred thousand Dollars ($600,000),
and the fortieth and last such repayment instalment in the sum of fifteen
million six hundred thousand Dollars ($15,600,000) (consisting of an
instalment of six hundred thousand Dollars ($600,000) and a balloon
payment of fifteen million Dollars ($15,000,000) (the
"Balloon Payment"
))
,
the first instalment falling
due on the date which is three calendar months after the earlier to occur
of the Delivery Date and the Availability Termination Date and subsequent
instalments falling due at consecutive intervals of three calendar months
thereafter.
|
|
5.2
|
Reduction of Repayment
Instalments
If the aggregate amount advanced to
the
Borrower is less than the Maximum Loan Amount, the amount of each
Repayment Instalment shall be reduced pro rata to the amount actually
advanced.
|
|
5.3
|
Reborrowing
The Borrower
may not reborrow any part of the Loan which is repaid or
prepaid.
|
6
|
Prepayment
|
|
6.1
|
Illegality
If it becomes
unlawful in any jurisdiction for the Lender to perform any of its
obligations as contemplated by this Agreement or to fund or maintain the
Loan:
|
|
6.1.1
|
the
Lender shall promptly notify the Borrower of that event;
and
|
|
6.1.2
|
the
Borrower shall repay the Loan (to the extent already advanced) on the last
day of the current Interest Period or, if earlier, the date specified by
the Lender in the notice delivered to the Borrower (being no earlier than
the last day of any applicable grace period permitted by
law).
|
|
6.2
|
Voluntary prepayment of Loan
The Borrower may prepay the whole or any part of the Loan (but, if
in part, being an amount that reduces the Loan by a minimum amount of five
hundred thousand Dollars ($500,000) or an integral multiple thereof)
subject as follows:
|
|
6.2.1
|
it
gives the Lender not less than fifteen (15) Business Days' (or such
shorter period as the Lender may agree) prior
notice;
|
|
6.2.2
|
no
prepayment may be made until after the Availability Termination Date;
and
|
|
6.2.3
|
any
prepayment under this Clause 6.2 shall satisfy the obligations
under
Clause 5.1
(Repayment of
Loan)
in inverse order of
maturity.
|
|
6.3
|
Mandatory prepayment on sale or
Total Loss
If the Vessel is sold by the Borrower or becomes a Total
Loss, the Borrower shall, simultaneously with any such sale or within one
hundred and fifty (150) days after any such Total Loss, prepay the whole
of the Loan.
|
|
6.4
|
Restrictions
Any notice
of prepayment given under this Clause 6 shall be irrevocable and, unless a
contrary indication appears in this Agreement, shall specify the date or
dates upon which the relevant prepayment is to be made and the amount of
that prepayment.
|
7
|
Interest
|
|
7.1
|
Interest Periods
The
period during which the Loan shall be outstanding under this Agreement
shall be divided into consecutive Interest Periods of one, three or six
months' duration or longer duration, as selected by the Borrower by
written notice to the Lender not later than 11.00 a.m. on the second
Business Day before the beginning of the Interest Period in question, or
such other duration as may be agreed by the Lender and subject to market
availability.
|
|
7.2
|
Beginning and end of Interest
Periods
Each Interest Period shall start on the first Drawdown Date
or (if a Drawing is already advanced) on the last day of the
|
|
|
preceding Interest Period and end on the date which numerically
corresponds to the first Drawdown Date or the last day of the preceding
Interest Period in the relevant calendar month except that, if there is no
numerically corresponding date in that calendar month, the Interest Period
shall
end on the last Business Day in that
month.
|
|
7.3
|
Second and subsequent Drawings
If the second or any subsequent Drawing is made otherwise than on
the first day of an Interest Period for the
balance of the Loan,
there
shall be a separate initial Interest Period for that Drawing
commencing on its Drawdown Date and expiring on the final date of the then
current Interest Period for the balance of the
Loan.
|
|
7.4
|
Interest Periods to meet
Repayment Dates
If an Interest Period will expire after the next
Repayment Date, there shall be a separate Interest Period for a part of
the Loan equal to the Repayment Instalment due on that next Repayment Date
and that separate Interest Period shall expire on that next Repayment
Date.
|
|
7.5
|
Non-Business Days
If an
Interest Period would otherwise end on a day which is not a Business Day,
that Interest Period will instead end on the next Business Day in that
calendar month (if there is one) or the preceding Business Day (if there
is not).
|
|
7.6
|
Interest rate
During
each Interest Period interest shall accrue on the Loan at the rate
determined by the Lender to be the aggregate of (a) the Margin and (b)
LIBOR .
|
|
7.7
|
Failure
to select Interest Period If the Borrower at any time fails to select or
agree an Interest Period in accordance with Clause 7.1
(Interest Periods),
the
interest rate applicable shall be the rate determined by the Lender in
accordance with Clause 7.6
(Interest rate)
for an
Interest Period of such duration (not exceeding three months) as the
Lender may select.
|
|
7.8
|
Accrual and payment of interest
Interest shall accrue from day to day, shall
be
calculated on the basis of a 360 day year and the actual number of days
elapsed (or, in any circumstance where market practice differs, in
accordance with the prevailing market practice) and shall be paid by the
Borrower to the Lender on the last day of each Interest Period and, if the
Interest Period is longer than three months, on the dates falling at three
monthly intervals after the first day of that Interest
Period.
|
|
7.9
|
Default interest
If the Borrower fails to pay any amount
payable by it under a Finance Document on its due date, interest shall
accrue on the overdue amount
from
|
|
|
the
due date up to the date of actual payment (both before and after judgment)
at a rate which is two per cent (2%) higher than the rate which would have
been payable if the overdue amount had, during the period of non-payment,
constituted the Loan in the currency of the overdue amount for successive
Interest Periods, each selected by the Lender (acting reasonably). Any
interest accruing under this Clause 7.9 shall be immediately payable by
the Borrower on demand by the Lender. If unpaid, any such interest will be
compounded with the overdue amount at the end of each Interest Period
applicable to that overdue amount but will remain immediately due and
payable.
|
|
7.10
|
Changes in market circumstances
If at any time the Lender determines (which determination shall be
final and conclusive and binding on the Borrower) that in the London
interbank market either adequate and fair means do not exist for
determining the rate of interest on the Loan for any Interest Period or
the cost to it of obtaining matching deposits for any Interest Period
would be in excess of LIBOR:
|
|
7.10.1
|
the
Lender shall give notice to the Borrower of the occurrence of such
event;
and
|
|
7.10.2
|
the
rate of interest on the Loan for that Interest Period shall be the rate
per annum which is the sum of:
|
|
(a)
|
the
Margin; and
|
|
(b)
|
the
rate which expresses as a percentage rate per annum the cost to the Lender
of funding the Loan from whatever source it may reasonably
select,
|
|
7.10.3
|
the
Lender will negotiate with the Borrower in good faith with a view to
modifying this Agreement to provide a substitute basis for determining the
rate of interest which is financially a substantial equivalent to the
basis provided for in this
Agreement;
|
|
7.10.4
|
any
substitute basis agreed pursuant to Clause 7.10.3 shall be binding on the
parties to this Agreement; and
|
|
7.10.5
|
if,
within thirty (30) days of the giving of the notice referred to in Clause
7.10.1, the Borrower and the Lender fail to agree in writing on a
substitute basis for determining the rate of interest, the Borrower will
immediately prepay the Loan, together with any Break
Costs.
|
|
7.11
|
Determinations conclusive
The Lender shall promptly notify the Borrower of the determination
of a rate of interest under this Clause 7 and each such determination
shall (save in the case of manifest error) be final and
conclusive.
|
8
|
Indemnities
|
8.1
|
Transaction
expenses
The Borrower will, within
fourteen (14) days of the Lender's written demand, pay the Lender the
amount of all costs and expenses (including legal fees and Value Added Tax
or any similar or replacement tax if applicable) incurred by the Lender in
connection with:
|
|
8.1.1
|
the
negotiation, preparation, printing, execution and registration of the
Finance Documents (whether or not any Finance Document is actually
executed or registered and whether or not all or any part of the Loan is
advanced);
|
|
8.1.2
|
any
amendment, addendum or supplement to any Finance Document (whether or not
completed); and
|
|
8.1.3
|
any
other document which may at any time be required by the Lender to give
effect to any Finance Document or which the Lender is entitled to call for
or obtain under any Finance Document (including, without limitation, any
valuation of the Vessel).
|
|
8.2
|
Funding costs
The
Borrower shall indemnify the Lender on the Lender's written demand against
all losses and costs incurred or sustained by the Lender if, for any
reason, a Drawing is not advanced to the Borrower after the relevant
Drawdown Notice has been given to the Lender, or is advanced on a date
other than that requested in the Drawdown Notice (unless, in either case,
as a result of any default by the
Lender).
|
|
8.3
|
Break Costs
The Borrower
shall indemnify the Lender on the Lender's written demand against all
costs, losses, premiums or penalties incurred by the Lender as a
|
|
result
of its receiving any prepayment of all or any part of the Loan (whether
pursuant to Clause 6
(Prepayment)
or
otherwise) on a day other than the last day of an Interest Period for the
Loan or relevant part of the Loan, or any other payment under or in
relation to the Finance Documents on a day other than the due date for
payment of the sum in question, including (without limitation) any losses
or costs incurred in liquidating or re-employing deposits from third
parties acquired to effect or maintain all or any part of the Loan, and
any liabilities, expenses or losses incurred by the Lender in terminating
or reversing, or otherwise in connection with, any interest rate and/or
currency swap, transaction or arrangement entered into by the Lender to
hedge any exposure arising under this Agreement, or in terminating or
reversing, or otherwise in connection with, any open position arising
under this Agreement.
|
|
8.4
|
Currency indemnity
In
the event of the Lender receiving or recovering any amount payable under a
Finance Document in a currency other than the Currency of Account, and if
the amount received or recovered is insufficient when converted into the
Currency of Account at the date of receipt to satisfy in full the amount
due, the Borrower shall, on the Lender's written demand, pay to the Lender
such further amount in the Currency of Account as is sufficient to satisfy
in full the amount due and that further amount shall be due to the Lender
as a separate debt under this
Agreement.
|
|
8.5
|
Increased costs (subject to
Clause 8.6
(Exceptions
to increased
costs
))
If, by reason of the
introduction of any law, or any change in any law, or any change in the
interpretation or administration of any law, or compliance with any
request or requirement from any central bank or any fiscal, monetary or
other authority occurring after the date of this Agreement (including the
implementation or application of or compliance with the Basel II Accord or
any other Basel II Regulation (whether such implementation, application or
compliance
is by any central bank or any fiscal, monetary or other authority, the
Lender or the holding company of the
Lender)):
|
|
8.5.1
|
the
Lender (or the holding company of the Lender) shall be subject to any Tax
with respect to payment of all or any part of the Indebtedness (other than
Tax on overall net income); or
|
|
8.5.2
|
the
basis of Taxation of payments to the Lender in respect of all or any part
of the Indebtedness shall be changed;
or
|
|
8.5.3
|
any
reserve requirements shall be imposed, modified or deemed applicable
against assets held by or deposits in or for the account of or loans by
any branch of the Lender; or
|
|
8.5.4
|
the
manner in which the Lender allocates capital resources to its obligations
under this Agreement or any ratio (whether cash, capital adequacy,
liquidity or otherwise) which the Lender is required or requested to
maintain shall be affected; or
|
|
8.5.5
|
there
is imposed on the Lender (or on the holding company of the Lender) any
other condition in relation to the Indebtedness or the Finance
Documents;
|
|
8.6
|
Exceptions to increased costs
Clause 8.5
(Increased costs)
does
not apply to the extent any additional cost or reduced return referred to
in that Clause is:
|
|
8.6.1
|
compensated
for by a payment made under Clause 8.10
(Taxes);
or
|
|
8.6.2
|
compensated
for by a payment made under Clause 16.3
(Grossing-up);
or
|
|
8.6.3
|
attributable
to the wilful breach by the Lender (or the holding company of the Lender)
of any law or regulation.
|
|
8.7
|
Events of Default
The
Borrower shall indemnify the Lender from time to time on the Lender's
written demand against all losses, costs and liabilities incurred or
sustained by the Lender as a consequence of any Event of
Default.
|
|
8.8
|
Enforcement costs
The
Borrower shall pay to the Lender on the Lender's written demand the amount
of all costs and expenses (including legal fees) incurred by the Lender in
connection with the enforcement of, or the preservation of any rights
under, any Finance Document including (without limitation) any losses,
costs and expenses which the Lender may from time to time sustain, incur
or become liable for by reason of the Lender being mortgagee of the Vessel
and/or a lender to the Borrower, or by reason of the Lender being deemed
by any court or authority to be an operator or controller, or in any way
concerned in the operation or control, of the
Vessel.
|
|
8.9
|
Other costs
The Borrower
shall pay to the Lender on the Lender's written demand the amount of all
sums which the Lender may pay or become actually or contingently liable
for on account of the Borrower in connection with the Vessel (whether
alone or jointly or jointly and severally with any other person) including
(without limitation) all sums which the Lender may pay or guarantees which
it may give in respect of the Insurances, any expenses incurred by the
Lender in connection with the maintenance or repair of the Vessel or in
discharging any lien, bond or other claim relating in any way to the
Vessel, and any sums which the Lender may pay or guarantees which it
may
give to procure the release of the Vessel from arrest or
detention.
|
|
|
|
8.10
|
Taxes
The Borrower shall
pay all Taxes to which all or any part of the Indebtedness or any Finance
Document may be at any time subject (other than Tax on the Lender's
overall net income) and shall indemnify the Lender on the Lender's written
demand against all liabilities, costs, claims and expenses resulting from
any omission to pay or delay in paying any such
Taxes.
|
9
|
Fees
|
|
9.1
|
Commitment fee
The
Borrower shall pay to the Lender a fee computed at the rate of zero point
forty per cent (0.40%) per annum on the undrawn amount of the Loan from
time to time from 25 June 2008, until the earlier of the Drawdown Date in
respect of the final Drawing and the Availability Termination Date. The
accrued commitment fee is payable on the last day of each successive
period of three months from 25 June 2008 and on the Availability
Termination Date.
|
|
9.2
|
Arrangement fee
The
Borrower shall pay to the Lender, on the date of this Agreement, an
arrangement fee in the amount of two hundred and ninety two thousand five
hundred Dollars ($292,500).
|
10
|
Security
and Application of Moneys
|
|
10.1
|
Security Documents
As
security for the payment of the Indebtedness, the Borrower shall execute
and deliver to the Lender or cause to be executed and delivered to the
Lender the following documents in such forms and containing such terms and
conditions as the Lender shall
require:
|
|
10.1.1
|
a
first priority deed of assignment of the Building Contract and the Refund
Guarantee;
|
|
10.1.2
|
a
guarantee and indemnity from the
Guarantor;
|
|
10.1.3
|
a
first preferred or statutory mortgage over the Vessel together with a
collateral deed of covenants if
applicable;
|
|
10.1.4
|
a
first priority deed of assignment of the Insurances, Earnings and
Requisition Compensation; and
|
|
10.1.5
|
a
first priority deed or deeds of assignment of the Insurances, Earnings,
Bareboat Charter and Requisition Compensation of the Vessel from the
|
Borrower
and the Bareboat Charterer, including (in the case of the Bareboat
Charterer) an agreement whereby its interests under the Bareboat Charter
are subordinated to the interests of the Lender under the Mortgage and an
assignmentof any performance guarantee from Daelim (if the Bareboat
Charterer is a one hundred per cent (100%) subsidiary of
Daelim.
|
||
|
10.2
|
Earnings Account
The
Borrower shall maintain the Earnings Account with the Lender for the
duration of the Facility Period free of Encumbrances and rights of set off
other than those created by or under the Finance Documents. Interest shall
accrue on a daily basis on any balance from time to time on the Earnings
Account at a rate of interest determined by the Lender in its discretion
as the rate of interest payable to its customers on deposits in the same
currency and of similar amount and maturity, and shall be credited to the
Earnings Account.
|
10.3 |
Earnings
The
Borrower shall procure that all Earnings and any Requisition Compensation
are credited to the Earnings
Account.
|
|
10.4
|
Application of Earnings
Account
The Borrower shall procure that there is
transferred
from the Earnings Account to the
Lender:
|
|
10.4.1
|
on
each Repayment Date, the amount of the Repayment Instalment then due;
and
|
|
10.4.2
|
on
each Interest Payment Date, the amount of interest then due,
|
|
10.5
|
Borrower's obligations not
affected
If for any reason the amount standing to the credit of the
Earnings Account is insufficient to pay any Repayment Instalment or to
make any payment of interest when due, the Borrower's obligation to pay
that Repayment Instalment or to make that payment of interest shall not be
affected.
|
|
10.6
|
Release of surplus
Any
amount remaining to the credit of the Earnings Account following the
making of any transfer required by Clause 10.4
(Application of Earnings
Account)
shall (unless a Default shall have occurred and be
continuing) be released to or to the order of the
Borrower.
|
|
10.7
|
Restriction on withdrawal
During the Facility Period no sum may be withdrawn from the
Earnings Account (except in accordance with this Clause 10.7) without the
prior written consent of the
Lender.
|
|
10.8
|
Relocation of Earnings Account
At any time following the occurrence and during the continuation of
a Default, the Lender may without the consent of the Borrower but after
giving notice to the Borrower relocate the Earnings Account to any other
branch of the Lender, without prejudice to the continued application of
this Clause 10.8 and the rights of the Lender under the Finance
Documents.
|
|
10.9
|
Application after acceleration
From and after the giving of notice to the
Borrower
by the Lender under Clause 13.2
(Acceleration),
the
Borrower shall procure that all sums from time to time standing to the
credit of the Earnings Account are immediately transferred to the Lender
for application in accordance with Clause 10.10
(General application of
moneys)
and the Borrower irrevocably authorises the Lender to make
those transfers.
|
10.10 | General application of moneys The Borrower, subject to Clause 10.11 (Application of moneys on sale or Total Loss), irrevocably authorises the Lender to apply all sums which the Lender may receive: |
|
10.10.1
|
pursuant
to a sale or other disposition of the Vessel or any right, title or
interest in the Vessel; or
|
|
10.10.2
|
by
way of payment of any sum in respect of the Insurances, Earnings, Charter
Rights or Requisition Compensation;
or
|
|
10.10.3
|
by
way of transfer of any sum from the Earnings Account;
or
|
|
10.10.4
|
otherwise
arising under or in connection with any Security Document,
|
10.11 |
Application of moneys on sale
or Total Loss
The Borrower irrevocably authorises the Lender to
apply all sums which the Lender may receive pursuant to a sale by the
Borrower of the Vessel or a Total Loss in or towards satisfaction of the
prepayment due and payable by virtue of that sale or Total Loss under
Clause 6.3
(Mandatory
prepayment on sale or Total Loss),
but the Borrower's obligation to
make that
|
prepayment
shall not be affected if those sums are insufficient to satisfy that
obligation.
|
||
10.12 |
Additional security
If
at any time the aggregate of the Market Value of the Vessel and the value
of any additional security (such value to be the face amount of the
deposit (in the case of cash), determined conclusively by appropriate
advisers appointed by the Lender (in the case of other charged assets),
and determined by the Lender in its discretion (in all other cases)) for
the time being provided to the Lender under this Clause 10.12 is less than
one hundred and thirty per cent (130%) of the Loan the Borrower shall,
within thirty (30) days of the Lender's request, at the Borrower's
option:
|
|
10.12.1
|
pay
to the Lender or to its nominee a cash deposit in the amount of the
shortfall to be secured in favour of the Lender as additional security for
the payment of the Indebtedness; or
|
|
10.12.2
|
give
to the Lender other additional security in amount and form acceptable to
the Lender in its discretion; or
|
|
10.12.3
|
prepay
the amount of the Indebtedness which will ensure that the aggregate of the
market value of the Vessel (determined as stated above) and the value of
any such additional security is not less than one hundred and thirty per
cent (130%) of the Loan.
|
11
|
Representations
|
|
11.1
|
Representations
The
Borrower makes the representations and warranties set out in this Clause
11.1 to the Lender on the date of this
Agreement.
|
|
11.11.1
|
Status
Each Security
Party (which is not an individual) is a corporation, duly incorporated and
validly existing under the law of its jurisdiction of incorporation and
has the power to own its assets and carry on its business as it is being
conducted.
|
|
11.1.2
|
Binding obligations
The
obligations expressed to be assumed by each Security Party and the
Bareboat Charterer in each Finance Document to which it is a party are,
legal, valid, binding and enforceable
obligations.
|
|
11.1.3
|
Non-conflict with other
obligations
The entry into and performance by each Security Party
of, and the transactions contemplated by, the Finance Documents do not
conflict with:
|
|
(a)
|
any
law or regulation applicable to that Security
Party;
|
|
(b)
|
the
constitutional documents of that Security Party;
or
|
|
(c)
|
any
document binding on that Security Party or any of its assets,
|
|
11.1.4
|
Power and authority
Each
Security Party has the power to enter into, perform and deliver, and has
taken all necessary action to authorise its entry into, performance and
delivery of, the Finance Documents to which it is a party and the
transactions contemplated by those Finance
Documents.
|
|
11.1.5
|
Validity and admissibility in
evidence
All consents, licences, approvals, authorisations, filings
and registrations required or
desirable:
|
|
(a)
|
to
enable each Security Party lawfully to enter into, exercise its rights and
comply with its obligations in the Finance Documents to which it is a
party or to enable the Lender to enforce and exercise all its rights under
the Finance Documents; and
|
|
(b)
|
to
make the Finance Documents to which any Security Party is a party
admissible in evidence in its jurisdiction of incorporation,
|
|
11.1.6
|
Governing law and enforcement
The choice of English law as the governing law of any Finance
Document expressed to be governed by English law will be recognised and
enforced in the jurisdiction of
|
|
11.1.7
|
Deduction of Tax
No
Security Party is required under the law of its jurisdiction of
incorporation to make any deduction for or on account of Tax from any
payment it may make under any Finance
Document.
|
|
11.1.8
|
No filing or stamp taxes
Under the law of jurisdiction of incorporation of each relevant
Security Party it is not necessary that the
Finance
Documents be filed, recorded or enrolled with any court or other authority
in that jurisdiction or that any stamp, registration or similar tax be
paid on or in relation to the Finance Documents or the transactions
contemplated by the Finance
Documents.
|
|
11.1.9
|
No default
No Event of
Default is continuing or might reasonably be expected to result from the
advance of any Drawing.
|
|
11.1.10
|
No misleading information
Any factual information provided by any Security Party to the
Lender was true and accurate in all material respects as at the date it
was provided.
|
|
11.1.11
|
Pari passu ranking
The
payment obligations of each Security Party and the Bareboat Charterer
under the Finance Documents to which it is a party rank at least pari
passu with the claims of all its other unsecured and unsubordinated
creditors, except for obligations mandatorily preferred by law applying to
companies generally.
|
|
11.1.12
|
No proceedings pending or
threatened
No litigation, arbitration or administrative proceedings
of or before any court, arbitral body or agency have been started or (to
the best of the Borrower's knowledge threatened) which, if adversely
determined, might reasonably be expected to have a materially adverse
effect on the business, assets, financial condition or credit worthiness
of any Security Party.
|
|
11.1.13
|
Disclosure of material facts
The Borrower is not aware of any material facts or circumstances
which have not been disclosed to the Lender
and
|
|
11.1.14
|
No established place of
business in the UK or
US No Security Party has an established place
of business in the United Kingdom or the United States of
America.
|
|
11.1.15
|
Completeness of Relevant
Documents
The copies of any Relevant Documents provided or to be
provided by the Borrower to the Lender in accordance with Clause 3
(Conditions of Utilisation)
are, or will be, true and accurate copies of the originals and
represent, or will represent, the full agreement between the parties to
those Relevant Documents in relation to the subject matter of those
Relevant Documents and there are no commissions, rebates, premiums or
other payments due or to become due in connection with the subject matter
of those Relevant Documents other than in the ordinary course of business
or as disclosed to, and approved in writing by, the
Lender.
|
|
11.2
|
Repetition
Each
representation and warranty in Clause 11.1
(Representations)
is
deemed to be repeated by the Borrower by reference to the facts and
circumstances then existing on the date of each Drawdown Notice and the
first day of each Interest Period.
|
12
|
Undertakings
and Covenants
|
|
12.1
|
Information
Undertakings
|
|
12.1.1
|
Financial statements
The
Borrower shall supply and shall procure that
the
Guarantor supplies, to the Lender as soon as the same become available,
but in any event within one hundred and eighty days (180) after the end of
each of its financial years, its and the Guarantor's combined audited
financial statements for that financial year, together with a Compliance
Certificate, signed by one director of the Guarantor, setting out (in
reasonable detail) computations as to compliance with Clause 12.2
|
|
12.1.2
|
Requirements as to financial
statements
Each set of financial statements
delivered
by the Borrower under Clause 12.1.1
(Financial
statements):
|
|
(a)
|
shall
be certified by a director of the Guarantor, as fairly representing its
financial condition as at the date as at which those financial statements
were drawn up; and
|
|
(b)
|
shall
be prepared using GAAP, accounting practices and financial reference
periods consistent with those applied in the preparation of the Original
Financial Statements unless, in relation to any set of financial
statements, the Borrower notifies the Lender that there has been a change
in GAAP, the accounting practices or reference periods and the Borrower's
auditors deliver to the Lender:
|
|
(i)
|
a
description of any change necessary for those financial statements to
reflect the GAAP, accounting practices and reference periods upon which
the Original Financial Statements were prepared;
and
|
|
(ii)
|
sufficient
information, in form and substance as may be reasonably required by the
Lender, to enable the Lender to make an accurate comparison between the
financial position indicated in those financial statements and that
indicated in the Original Financial Statements.
|
|
12.1.3
|
Information: miscellaneous
The Borrower shall supply to the
Lender:
|
|
(a)
|
all
documents dispatched by the Borrower to its shareholders (or any class of
them) or its creditors generally at the same time as they are
dispatched;
|
|
(b)
|
promptly
upon becoming aware of them, details of any litigation, arbitration or
administrative proceedings which are current, threatened or pending
against any Security Party, and which might, if adversely determined, have
a materially adverse effect on the
|
business,
assets, financial condition or credit worthiness of that Security Party
and/or the Bareboat Charterer; and
|
||
|
(c)
|
promptly,
such further information regarding the financial condition, business and
operations of any Security Party as the Lender may reasonably request
including, without limitation, cash flow analyses and details of the
operating costs of the Vessel.
|
|
12.1.4
|
Notification of
default
|
|
(a)
|
The
Borrower shall notify the Lender of any Default (and the steps, if any,
being taken to remedy it) promptly upon becoming aware of its
occurrence.
|
|
(b)
|
Promptly
upon a request by the Lender, the Borrower shall supply to the Lender a
certificate signed by two of its directors or senior officers on its
behalf certifying that no Default is continuing (or if a Default is
continuing, specifying the Default and the steps, if any, being taken to
remedy it).
|
|
12.1.5
|
"
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 after the date of this Agreement;
or
|
|
(c)
|
a
proposed assignment or transfer by the Lender of any of its rights and
obligations under this Agreement,
|
|
12.2
|
Financial
covenants
|
|
12.2.1
|
maintain
a Minimum Liquidity of not less than twenty five million Dollars
($25,000,000); and
|
|
12.2.2
|
maintain
a Minimum Adjusted Net Worth of not less than two hundred and fifty
million Dollars ($250,000,000); and
|
|
12.2.3
|
maintain
Minimum Equity of not less than one hundred million Dollars
($100,000,000).
|
|
12.3
|
General
undertakings
|
|
12.3.1
|
Authorisations
The
Borrower shall promptly:
|
|
(a)
|
obtain,
comply with and do all that is necessary to maintain in full force and
effect; and
|
|
(b)
|
supply
certified copies to the Lender of,
|
|
12.3.2
|
Compliance with laws
The
Borrower shall comply in all respects with all laws to which it may be
subject, if failure so to comply would materially impair its ability to
perform its obligations under the Finance
Documents.
|
|
12.3.3
|
Conduct of business
The
Borrower shall carry on and conduct its business in a proper and efficient
manner, file all requisite tax returns and pay all tax which becomes due
and payable (except where contested in good
faith).
|
|
12.3.4
|
Evidence of good standing
The Borrower will from time to time if requested by the Lender
provide the Lender with evidence in form and substance satisfactory to the
Lender that the Security Parties and all corporate shareholders of any
Security Party remain in good
standing.
|
|
12.3.5
|
Negative pledge and no
disposals
The Borrower shall not without the prior written consent
of the Lender create nor permit to subsist any Encumbrance or other third
party rights over any of its present or future assets or undertaking nor
dispose of any those assets or of all or part of that
undertaking.
|
|
12.3.6
|
Merger
The Borrower shall not without the prior
written consent of the Lender enter into any amalgamation, demerger,
merger or corporate
reconstruction.
|
|
12.3.7
|
Change of business
The
Borrower shall not without the prior written consent of the Lender make
any substantial change to the general
nature
of its business from that carried on at the date of this
Agreement.
|
|
12.3.8
|
No other business
The
Borrower shall not without the prior written consent of the Lender engage
in any business other than the ownership, operation, chartering and
management of the Vessel.
|
|
12.3.9
|
No place of business in UK or
US
The Borrower shall not
have an established place of business in the United Kingdom or the United
States of America at any time during the Facility
Period.
|
|
12.3.10
|
No borrowings
The
Borrower shall not without the prior written consent of the Lender borrow
any money (except for the Loan and unsecured Financial Indebtedness
subordinated to the Loan and arising in the Borrower's normal course of
operating the Vessel) nor incur any obligations under
leases.
|
|
12.3.11
|
No substantial liabilities
Except in the ordinary course of business, the Borrower shall not
without the prior written consent of the Lender incur any liability to any
third party which is in the Lender's opinion of a substantial
nature.
|
|
12.3.12
|
No loans or other financial
commitments
The Borrower shall not without the prior written
consent of the Lender make any loan nor enter into any guarantee or
indemnity or otherwise voluntarily assume any actual or contingent
liability in respect of any obligation of any other person except for
loans made in the ordinary course of business in connection with the
chartering, operation or repair of the
Vessel.
|
|
12.3.13
|
No dividends
The
Borrower shall not without the prior written consent of the Lender pay any
dividends or make any other
distributions
to shareholders or issue any new shares, following the occurrence of a
Default.
|
|
12.3.14
|
Inspection of records
The Borrower will permit the inspection of its financial records
and accounts from time to time by the Lender or its
nominee.
|
|
12.3.15
|
No change in Relevant Documents
The Borrower shall procure that, without the prior written consent
of the Lender, there shall be no termination of, alteration to, or waiver
of any term of, any of the Relevant Documents which are not Finance
Documents.
|
|
12.3.16
|
No change in ownership or
control
The Borrower shall not permit any change in its beneficial
ownership and control from that advised to the Lender at the date of this
Agreement without the prior written consent of the Lender, such consent
not to be unreasonably withheld.
|
|
12.4
|
Vessel
undertakings
|
|
12.4.1
|
No sale of Vessel
The
Borrower shall not sell or otherwise dispose of the Vessel or any shares
in the Vessel nor agree to do so without the prior written consent of the
Lender.
|
|
12.4.2
|
No chartering after Event of
Default
Following the occurrence and during the continuation of an
Event of Default the Borrower shall not without the
|
prior
written consent of the Lender let the Vessel on charter or renew or extend
any charter or other contract of employment of the Vessel (nor agree to do
so).
|
||
|
12.4.3
|
No change in management
The Borrower shall procure that, without
the
prior written consent of the Lender, such consent not to be unreasonably
withheld, there shall be no termination of, alteration to, or waiver of
any term of, the Management Agreement and the Borrower shall not without
the prior written consent of the Lender permit the Managers to
sub-contract or delegate the commercial or technical management of the
Vessel to any third
party.
|
|
12.4.4
|
Registration of Vessel
The Borrower undertakes to register the Vessel and maintain the
registration of the Vessel under an Approved Flag for the duration of the
Facility Period unless the Lender agrees otherwise in
writing.
|
|
12.4.5
|
Evidence of current COFR
The Borrower will, if and for so long as the Vessel trades in the
United States of America and Exclusive Economic Zone (as defined in the
United States Oil Pollution Act 1990), obtain, retain and provide the
Lender with a copy of, a valid Certificate of Financial Responsibility for
the Vessel under that Act and will comply strictly with the requirements
of that Act.
|
|
12.4.6
|
ISM Code compliance
The
Borrower will:
|
|
(a)
|
procure
that the Vessel remains for the duration of the Facility Period subject to
a SMS;
|
|
(b)
|
maintain
a valid and current SMC for the Vessel throughout the Facility Period and
provide a copy to the Lender;
|
|
(c)
|
procure
that the ISM Company maintains a valid and current DOC throughout the
Facility Period and provide a copy to the Lender;
and
|
|
(d)
|
immediately
notify the Lender in writing of any actual or threatened withdrawal,
suspension, cancellation or modification of the SMC of the Vessel or of
the DOC of the ISM Company.
|
|
12.4.7
|
ISPS Code compliance
The
Borrower will:
|
|
(a)
|
for
the duration of the Facility Period comply with the ISPS Code in relation
to the Vessel and procure that the Vessel and the ISPS Company comply with
the ISPS Code;
|
|
(b)
|
maintain
a valid and current ISSC for the Vessel throughout the Facility Period and
provide a copy to the Lender; and
|
|
(c)
|
immediately
notify the Lender in writing of any actual or threatened withdrawal,
suspension, cancellation or modification of the
ISSC.
|
|
12.4.8
|
Annex VI compliance
The
Borrower will:
|
|
(a)
|
for
the duration of the Facility Period comply with Annex VI in relation to
the Vessel and procure that the Vessel's master and crew are familiar
with, and that the Vessel complies with, Annex
VI;
|
|
(b)
|
maintain
a valid and current IAPPC for the Vessel throughout the Facility Period
and provide a copy to the Lender;
and
|
|
(c)
|
immediately
notify the Lender in writing of any actual or threatened withdrawal,
suspension, cancellation or modification of the
IAPPC.
|
|
12.4.9
|
Bareboat Charter
The
Borrower (as owner) shall, by the date of this Agreement, enter into the
Bareboat Charter, such Bareboat Charter to be in form and substance, and
on terms and conditions, satisfactory to the Lender in all
respects.
|
13
|
Events
of Default
|
|
13.1
|
Events of Default
Each
of the events or circumstances set out in this Clause 13.1
is
an Event of Default.
|
|
|
13.1.1
|
Non-payment
The Borrower
does not pay on the due date any amount payable by it under a Finance
Document at the place at and in the currency in which it is expressed to
be payable.
|
|
13.1.2
|
Other
obligations.
A Security Party or any other person
(except the Lender) does not comply with any provision of any of the
Relevant
|
|
13.1.3
|
Misrepresentation
Any
representation, warranty or statement made or deemed to be repeated by a
Security Party in any Finance Document or any other document delivered by
or on behalf of a Security Party under or in connection with any Finance
Document is or proves to have been incorrect or misleading in any material
respect when made or deemed to be
repeated.
|
|
13.1.4
|
Cross default
Any
Financial Indebtedness of a Security
Party:
|
|
(a)
|
is
not paid when due or within any originally applicable grace period;
or
|
|
(b)
|
is
declared to be, or otherwise becomes, due and payable before its specified
maturity as a result of an event of default (however described);
or
|
|
(c)
|
is
capable of being declared by a creditor to be due and payable before its
specified maturity as a result of such an
event.
|
|
13.1.5
|
Insolvency
|
|
(a)
|
A
Security Party is unable or admits inability to pay its debts as they fall
due, suspends making payments on any of its debts or, by reason of actual
or anticipated financial difficulties, commences negotiations with one or
more of its creditors with a view to rescheduling any of its Financial
Indebtedness.
|
|
(b)
|
The
value of the assets of a Security Party is less than its liabilities
(taking into account contingent and prospective
liabilities).
|
|
(c)
|
A
moratorium is declared in respect of any Financial Indebtedness of a
Security Party.
|
|
13.1.6
|
Insolvency proceedings
Any corporate action, legal proceedings or other procedure or step
is taken for:
|
|
(a)
|
the
suspension of payments, a moratorium of any Financial Indebtedness,
winding-up, dissolution, administration, bankruptcy or reorganisation (by
way of voluntary arrangement, scheme of arrangement or otherwise) of a
Security Party;
|
|
(b)
|
a
composition, compromise, assignment or arrangement with any creditor of a
Security Party;
|
|
(c)
|
the
appointment of a liquidator, receiver, administrative receiver,
administrator, compulsory manager, or trustee or other similar officer in
respect of any Security Party or any of its assets;
or
|
|
(d)
|
enforcement
of any Encumbrance over any assets of a Security
Party,
|
|
13.1.7
|
Creditors' process
Any
expropriation, attachment, sequestration, distress or execution affects
any asset or assets of a Security
Party.
|
|
13.1.8
|
Change in ownership or control
of the Borrower
There is any change in the beneficial ownership or
control of the Borrower from that advised to the Lender by the Borrower at
the date of this Agreement.
|
|
13.1.9
|
Repudiation
A Security
Party or any other person (except the Lender) repudiates any of the
Relevant Documents to which that Security Party or person is a party or
evidences an intention to do so.
|
|
13.1.10
|
Impossibility or illegality
Any event occurs which would, or would with the passage of time,
render performance of any of the
Relevant
Documents by a Security Party or any other party to any such document
impossible, unlawful or unenforceable by the Lender or a Security
Party.
|
|
13.1.11
|
Conditions subsequent
Any of the conditions referred to in Clause 3.4
(Conditions subsequent)
is not satisfied within the time reasonably required by the
Lender.
|
|
13.1.12
|
Revocation or modification of
authorisation
Any consent, licence, approval, authorisation,
filing, registration or other requirement of any governmental, judicial or
other public body or authority which is now, or which at any time during
the Facility Period becomes, necessary to enable a Security Party or any
other person (except the Lender) to comply with any of its obligations
under any of the Relevant Documents is not obtained, is revoked,
suspended, withdrawn or withheld, or is modified in a manner which the
Lender considers is, or may be, prejudicial to the interests of the
Lender, or ceases to remain in full force and
effect.
|
|
13.1.13
|
Curtailment of business
A Security Party ceases, or threatens to cease, to carry on all or
a substantial part of its business or, as a result of intervention by or
under the authority of any government, the business of a Security Party is
wholly or partially curtailed or suspended, or all or a substantial part
of the assets or undertaking of a Security Party is seized, nationalised,
expropriated or compulsorily
acquired.
|
|
13.1.14
|
Reduction of capital
A
Security Party reduces its authorised or
issued
or subscribed capital.
|
|
13.1.15
|
Loss of Vessel
The
Vessel suffers a Total Loss or is otherwise destroyed, abandoned,
confiscated, forfeited or condemned as prize, or a similar event occurs in
relation to any other vessel which may from time to time be mortgaged to
the Lender as security for the payment of all or any part of the
Indebtedness, except that a Total Loss, or event similar to a Total Loss
in relation to any other vessel, shall not be an Event of Default
if:
|
|
(a)
|
the
Vessel or other vessel is insured in accordance with the Security
Documents; and
|
|
(b)
|
no
insurer has refused to meet or has disputed the claim for Total Loss and
it is not apparent to the Lender in its discretion that any such refusal
or dispute is likely to occur; and
|
|
(c)
|
payment
of all insurance proceeds in respect of the Total Loss is made in full to
the Lender within one hundred and fifty (150) days of the occurrence of
the casualty giving rise to the Total Loss in
|
|
13.1.16
|
Challenge to registration
The registration of the Vessel or the Mortgage is contested or
becomes void or voidable or liable to cancellation or termination, or the
validity or priority of the Mortgage is
contested.
|
|
13.1.17
|
War
The country of
registration of the Vessel becomes involved in war (whether or not
declared) or civil war or is occupied by
any
other power and the Lender in its discretion considers that, as a result,
the security conferred by any of the Security Documents is materially
prejudiced.
|
|
13.1.18
|
Notice of termination
The
Guarantor gives notice to the Lender to determine its obligations under
the Guarantee.
|
|
13.1.19
|
The Builder
Any of the
events or circumstances specified in Clauses 13.1.5
(Insolvency),
13.1.6
(Insolvency proceedings)
and 13.1.7
(Creditors' process)
occurs in relation to the Builder and/or to the Bareboat Charterer,
and, in the opinion of the Lender, in the case of the Builder, the Vessel
is unlikely to be delivered to the Borrower by the Builder under the
Building Contract by/on 28 February 2009, or such other later date as may
be agreed with the Builder (and subject to the Lender's consent, such
consent not to be unreasonably withheld) in accordance with the terms of
the Building Contract.
|
|
13.1.20
|
Non-delivery of Vessel
The Vessel is not delivered to the Borrower by the Builder under
the Building Contract by/on 28 February 2009, or such other later date as
may be agreed with the Builder (and subject to the Lender's consent, such
consent not to be unreasonably withheld) in accordance with the terms of
the Building Contract.
|
|
13.1.21
|
Material adverse change
Any event or series of events occurs which, in the opinion of the
Lender, is likely to have a materially adverse effect on the business,
assets, financial condition or credit worthiness of a Security
Party.
|
|
13.1.22
|
Bareboat Charter
If the
Bareboat Charter is terminated, cancelled or repudiated or is not in force
at any time during the period of its duration or if the Bareboat Charterer
defaults in the performance of any of its material obligations under or
pursuant to the Bareboat Charter.
|
|
13.2
|
Acceleration
If an Event
of Default is continuing the Lender may by notice to the Borrower cancel
any part of the Maximum Loan Amount not then advanced
and:
|
|
13.2.1
|
declare
that the Loan, together with accrued interest, and all other amounts
accrued or outstanding under the Finance Documents are immediately due and
payable, whereupon they shall become immediately due and payable;
and/or
|
|
13.2.2
|
declare
that the Loan is payable on demand, whereupon it shall immediately become
payable on demand by the Lender.
|
14
|
Assignment
and Sub-Participation
|
|
14.1
|
Lender's rights
The
Lender may assign any of its rights under this Agreement or transfer by
novation any of its rights and obligations under this Agreement to any
other branch of the Lender or to any other bank or financial institution
or (for the purpose of a securitisation of the Lender's rights or
obligations under the Finance Documents or a similar transaction of
broadly equivalent economic effect) to any special purpose vehicle, and
may grant sub-participations in all or any part of the
Loan.
|
|
14.2
|
Borrower's co-operation
The Borrower will co-operate fully with the Lender in connection
with any assignment, transfer or sub-participation; will execute and
procure the execution of such documents as the Lender may require in that
connection;
and irrevocably authorises the Lender to disclose to any proposed
assignee, transferee or sub-participant (whether before or after any
assignment, transfer or sub-participation and whether or not any
assignment, transfer or sub-participation shall take place) all
information relating to the Security Parties and the Bareboat Charterer,
the Loan, the Relevant Documents and the Vessel which the Lender may in
its discretion consider necessary or
desirable.
|
|
14.3
|
Rights of assignee or
transferee
Any assignee or transferee of the Lender shall (unless
limited by the express terms of the assignment or novation) take the full
benefit of every provision of the Finance Documents benefitting the
Lender.
|
|
14.4
|
No assignment or transfer by
the Borrower
The Borrower may not assign any of its rights or
transfer any of its rights or obligations under the Finance
Documents.
|
|
14.5
|
Securitisation
The
Lender may disclose the size and term of the Loan and the name of each of
the Security Parties to any investor or potential investor in a
securitisation (or similar transaction of broadly equivalent economic
effect) of the Lender's rights or obligations under the Finance
Documents.
|
15
|
Set-Off
|
|
16.1
|
Payments
Each amount
payable by the Borrower under a Finance Document shall be paid to such
account at such bank as the Lender may from time to time direct to the
Borrower in the Currency of Account and in such funds as are customary at
the time for settlement of transactions in the relevant currency in the
place of payment. Payment shall be deemed to have been received by the
Lender on the date on which the Lender receives authenticated advice of
receipt, unless that advice is received by the Lender on a day other than
a Business Day or at a time of day (whether on a Business Day or not) when
the Lender in its discretion considers that it is impossible or
impracticable for the Lender to utilise the amount received for value that
same day, in which event the payment in question shall be deemed to have
been received by the Lender on the Business Day next following the date of
receipt of advice by the Lender.
|
|
16.2
|
No deductions or withholdings
Each payment (whether of principal or interest or otherwise) to be
made by the Borrower under a Finance Document shall, subject only to
Clause 16.3
(Grossing-up),
be made
free and clear of and without deduction for or on account of any Taxes or
other deductions, withholdings, restrictions, conditions or counterclaims
of any nature.
|
|
16.3
|
Grossing-up
If at any
time any law requires (or is interpreted to require) the Borrower to make
any deduction or withholding from any payment, or to change the rate or
manner in which any required deduction or withholding is made, the
Borrower will promptly notify the Lender and, simultaneously with that
payment, will pay to the Lender whatever additional amount (after taking
into account any additional Taxes on, or deductions or withholdings from,
or
restrictions
or conditions on, that additional amount) is necessary to ensure that,
after the deduction or withholding, the Lender receives a net sum equal to
the sum which the Lender would have received had no deduction or
withholding been made.
|
|
16.4
|
Evidence of deductions
If at any time the Borrower is required by law to make any
deduction or withholding from any payment to be made by it under a Finance
Document, the Borrower will pay the amount required to be deducted or
withheld to the relevant authority within the time allowed under the
applicable law and will, no later than thirty (30) days after making that
payment, deliver to the Lender an original receipt issued by the relevant
authority, or other evidence acceptable to the Lender, evidencing the
payment to that authority of all amounts required to be deducted or
withheld.
|
|
16.5
|
Adjustment of due dates
If any payment or transfer of funds to be made under a Finance
Document, other than a payment of interest on the Loan, shall be due on a
day which is not a Business Day, that payment shall be made on the next
succeeding Business Day (unless the next succeeding Business Day falls in
the next calendar month in which event the payment shall be made on the
next preceding Business Day). Any such variation of time shall be taken
into account in computing any interest in respect of that
payment.
|
|
16.6
|
Control Account
The Lender shall open and
maintain on its books a control account in the name of the Borrower
showing the advance of the Loan and the computation and payment of
interest and all other sums due under this Agreement. The Borrower's
obligations to repay the Loan and to pay interest and all other sums due
under this Agreement, shall be evidenced by the entries from time to time
made in the control account opened and maintained under
this
Clause 16.6 and those entries will, in the absence of manifest error, be
conclusive and binding.
|
17
|
Notices
|
|
17.1
|
Communications in writing
Any communication to be made under or in connection with this
Agreement shall be made in writing and, unless otherwise stated, may be
made by fax or letter.
|
|
17.2
|
Addresses
The address
and fax number (and the department or officer, if any, for whose attention
the communication is to be made) of each party to this Agreement for any
communication or document to be made or delivered under or in connection
with this Agreement are:
|
|
17.2.1
|
in
the case of the Borrower, c/o Top Ships Inc., 1 Vassilissis Sofias Str.
& Meg. Alexandrou Str. 151 24 Marousi, Greece (fax no: +30 210 614
1273) marked for the attention of Mr Stamatios Tsantanis;
and
|
|
17.2.2
|
in
the case of the Lender, to the Lender at its address at the head of this
Agreement (fax no: 210 429 0348 telex no: 212435) marked for the attention
of Shipping Division branch 960);
|
|
17.3
|
Delivery
Any
communication or document made or delivered by one party to this Agreement
to the other under or in connection this Agreement will only be
effective:
|
|
17.3.1
|
if
by way of fax, when received in legible form;
or
|
|
17.3.2
|
if
by way of letter, when it has been left at the relevant address or five
(5) Business Days after being deposited in the post postage prepaid in
an
envelope addressed to it at that
address;
|
|
17.4
|
English language
Any
notice given under or in connection with this Agreement must be in
English. All other documents provided under or in connection with this
Agreement must be:
|
|
17.4.1
|
in
English; or
|
|
17.4.2
|
if
not in English, and if so required by the Lender, accompanied by a
certified English translation and, in this case, the English translation
will prevail unless the document is a constitutional, statutory or other
official document.
|
18
|
Partial
Invalidity
|
19
|
Remedies
and Waivers
|
20
|
Miscellaneous
|
|
20.1
|
No oral variations
No
variation or amendment of a Finance Document shall be valid unless in
writing and signed on behalf of the
Lender.
|
|
20.2
|
Further Assurance
If any
provision of a Finance Document shall be invalid or unenforceable in whole
or in part by reason of any present or future law or any decision of any
court, or if the documents at any time held by or on behalf of the Lender
are considered by the Lender for any reason insufficient to carry out the
terms of this Agreement, then from time to time the Borrower will
promptly, on demand by the Lender, execute or procure the execution of
such further documents as in the
|
opinion
of the Lender are necessary to provide adequate security for the repayment
of the Indebtedness.
|
||
|
20.3
|
Rescission of payments etc.
Any discharge, release or reassignment by the Lender of any of the
security constituted by, or any of the obligations of a Security Party
contained in, a Finance Document shall be (and be deemed always to have
been) void if any act (including, without limitation, any payment) as a
result of which such discharge, release or reassignment was given or made
is subsequently wholly or partially rescinded or avoided by operation of
any law.
|
|
20.4
|
Certificates
Any
certificate or statement signed by an authorised signatory of the Lender
purporting to show the amount of the Indebtedness (or any part of
the
Indebtedness) or any other amount referred to in any Finance Document
shall, save for manifest error or on any question of law, be conclusive
evidence as against the Borrower of that
amount.
|
|
20.5
|
Counterparts
This
Agreement may be executed in any number of counterparts each of which
shall be original but which shall together constitute the same
instrument.
|
|
20.6
|
Contracts (Rights of Third
Parties) Act 1999
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 teiiii of this
Agreement.
|
21
|
Law
and Jurisdiction
|
|
21.1
|
Governing law
This
Agreement shall in all respects be governed by and interpreted in
accordance with English law.
|
|
21.2
|
Jurisdiction
For the
exclusive benefit of the Lender, the parties to this Agreement irrevocably
agree that the courts of England are to have jurisdiction to settle any
disputes which may arise out of or in connection with this Agreement and
that any proceedings may be brought in those
courts.
|
|
21.3
|
Alternative jurisdictions
Nothing contained in this Clause 21 shall limit the right of the
Lender to commence any proceedings against the Borrower in any other court
of competent jurisdiction nor shall the commencement of any proceedings
against the Borrower in one or more jurisdictions preclude the
commencement of any proceedings in any other jurisdiction, whether
concurrently or not.
|
|
21.4
|
Waiver of objections
The
Borrower irrevocably waives any objection which it may now or in the
future have to the laying of the venue of any proceedings
in
any court referred to in this Clause 21, and any claim that those
proceedings have been brought in an inconvenient or inappropriate forum,
and irrevocably agrees that a judgment in any proceedings commenced in any
such court shall be conclusive and binding on it and may be enforced in
the courts of any other
jurisdiction.
|
|
21.5
|
Service of process
Without prejudice to any other mode of service allowed under any
relevant law, the Borrower:
|
|
21.5.1
|
irrevocably
appoints Top Tankers (UK) Limited of 8 Duke Street, W1U 3EW London, UK as
its agent for service of process in relation to any proceedings before the
English courts in connection with this Agreement;
and
|
|
21.5.2
|
agrees
that failure by a process agent to notify the Borrower of the process will
not invalidate the proceedings
concerned.
|
|
(a)
|
Constitutional Documents
Copies of the constitutional documents of each Security Party and
the Bareboat Charterer together with such other evidence as the Lender may
reasonably require that each Security Party and the Bareboat Charterer is
duly incorporated in its country of incorporation and remains in existence
with power to enter into, and perform its obligations under, the Relevant
Documents to which it is or is to become a
party.
|
|
(b)
|
Certificates of good standing
A certificate of good standing in respect of each Security Party
and the Bareboat Charterer (if such a certificate can be
obtained).
|
|
(c)
|
Board resolutions
A copy
of a resolution of the board of directors of each Security Party and the
Bareboat Charterer (if applicable):
|
|
(i)
|
approving
the terms of, and the transactions contemplated by, the Relevant Documents
to which it is a party and resolving that it execute those Relevant
Documents; and
|
|
(ii)
|
authorising
a specified person or persons to execute those Relevant Documents (and all
documents and notices to be signed and/or despatched under those
documents) on its behalf.
|
|
(d)
|
Shareholder resolutions
A copy of a resolution signed by all the holders of the issued
shares in each Security Party and the Bareboat Charterer (if applicable),
approving the terms of, and the transactions contemplated by, the Relevant
Documents to which that Security Party and the Bareboat Charterer (if
applicable) is a party.
|
|
(e)
|
Officer's certificates
A
certificate of a duly authorised officer of each Security Party and the
Bareboat Charterer (if applicable) certifying that each copy document
relating to it specified in this Part I of Schedule 1 is correct, complete
and in full force and effect and setting out the names of the directors,
officers and shareholders of that Security Party and the Bareboat
Charterer (if applicable) and the proportion of shares held by each
shareholder.
|
|
(f)
|
Evidence of registration
Where such registration is required or permitted under the laws of
the relevant jurisdiction, evidence that the names of the directors,
officers and shareholders of each Security Party and the Bareboat
Charterer are duly registered in the companies registry or other registry
in the country of incorporation of that Security
Party.
|
|
(g)
|
Powers of attorney
The
notarially attested and legalised power of attorney of each Security Party
and the Bareboat Charterer (if applicable) under which any documents are
to be executed or transactions undertaken by that Security Party and the
Bareboat Charterer (if applicable).
|
|
(a)
|
Vessel documents
Photocopies, certified as true, accurate and complete (and in form
and substance acceptable to the Lender) by a director or the secretary or
the legal advisers of the Borrower,
of:
|
|
(i)
|
the
Building Contract;
|
|
(ii)
|
such
documents as the Lender may reasonably require to evidence the nomination
of the Borrower as purchaser of the Vessel pursuant to the Building
Contract;
|
|
(iii)
|
the
Bareboat Charter;
|
|
(iv)
|
if
the Bareboat Charterer is not Daelim, but a 100% subsidiary of Daelim, the
performance guarantee of Daelim;
|
|
(v)
|
the
Refund Guarantee; and
|
|
(vi)
|
the
notice or invoice issued by the Builder and countersigned by the Vessel's
classification society evidencing the obligation of the Borrower to pay
the relevant instalment to the Builder under the Building Contract on a
date no later than the proposed Drawdown Date of the Drawing in
question.
|
|
(b)
|
Security Documents
The
Building Contract Assignment, the Guarantee, the Charter Assignment,
together with all other documents required by any of them, including,
without limitation, all notices of assignment and/or charge and evidence
that those notices will be duly acknowledged by the
recipients.
|
|
(c)
|
No disputes
The written
confirmation of the Borrower that there is no dispute under any of the
Relevant Documents as between the parties to any such
document.
|
|
(d)
|
Deed of Release
The Deed
of Release in form and substance acceptable to the
Lender.
|
|
(a)
|
If
a Security Party and the Bareboat Charterer is incorporated in a
jurisdiction other than England and Wales or if any Finance Document is
governed by the laws of a jurisdiction other than England and Wales, a
legal opinion of the legal advisers to the Lender in each relevant
jurisdiction, substantially in the form or forms provided to the Lender
prior to signing this Agreement or confirmation satisfactory to the Lender
that such an opinion will be given.
|
|
(a)
|
Drawdown Notice
A duly
completed Drawdown Notice.
|
|
(b)
|
Process agent
Evidence
that any process agent referred to in Clause 21.5
(Service of process)
and any process agent appointed under any other Finance Document
has accepted its appointment.
|
|
(c)
|
Other authorisations
A
copy of any other consent, licence, approval, authorisation or other
document, opinion or assurance which the Lender considers to be necessary
or desirable (if it has notified the Borrower accordingly) in connection
with the entry into and performance of the transactions contemplated by
any of the Relevant Documents or for the validity and enforceability of
any of the Relevant Documents.
|
|
(d)
|
Financial statements
Copies of the Original Financial
Statements.
|
|
(e)
|
Fees
Evidence that the
fees, costs and expenses then due from the Borrower under Clause 8
(Indemnities)
and
Clause 9
(Fees)
have been paid or will be paid by the relevant Drawdown
Date.
|
|
(f)
|
"Know your customer" documents
Such documentation and other evidence as is reasonably requested by
the Lender in order for the Lender to comply with all
|
necessary
"know your customer" or similar identification procedures in relation to
the transactions contemplated in the Finance Documents.
|
||
|
(g)
|
Equity Portion
Evidence
that the relevant Equity Portion of the instalment in question has been
deposited by the Borrower in the Earnings Account at least three Business
Days prior to the proposed Drawdown Date of the Drawing in
question.
|
1
|
Acknowledgements of notices
Acknowledgements of all notices of assignment and/or charge given
pursuant to any Security Documents received by the Lender pursuant to Part
I of this Schedule 1.
|
2
|
Legal opinions
Such of
the legal opinions specified in Part 1 of this Schedule I as have not
already been provided to the
Lender.
|
3
|
Companies Act registrations
Evidence that the prescribed particulars of any Security Documents
received by the Lender pursuant to Part I of this Schedule 1 have been
delivered to the Registrar of Companies of England and Wales within the
statutory time limit.
|
4
|
Loan Acknowledgement
Declaration
The Loan Acknowledgement Declaration duly
executed.
|
1
|
Officer's certificate
A
certificate signed by a duly authorised officer of each Security Party
confirming that none of the documents and evidence delivered to the Lender
pursuant to Clauses 3.1
(Conditions precedent)
and 3.4
(Conditions subsequent)
has been amended, modified or revoked in any way since its delivery
to the Lender.
|
|
(a)
|
Vessel documents
Photocopies, certified as true, accurate and complete by a director
or the secretary of the Borrower,
of:
|
|
(i)
|
the
builder's certificate and/or bill of sale transferring title in the Vessel
to the Borrower free of all encumbrances, maritime liens or other
debts;
|
|
(ii)
|
the
protocol of delivery and acceptance evidencing the unconditional physical
delivery of the Vessel by the Builder to the Borrower pursuant to the
Building Contract;
|
|
(iii)
|
the
commercial invoice issued by the Builder in respect of the final contract
price of the Vessel;
|
|
(iv)
|
the
declaration of warranty issued by the Builder to the Borrower pursuant to
the Building Contract;
|
|
(v)
|
any
charterparty or other contract of employment of the Vessel which will be
in force on the Delivery Date including, without limitation, the Bareboat
Charter;
|
|
(vi)
|
the
Management Agreement;
|
|
(vii)
|
the
Vessel's current Safety Construction, Safety Equipment, Safety Radio, Oil
Pollution Prevention and Load Line
Certificates;
|
|
(viii)
|
the
Vessel's current Certificate of Financial Responsibility issued pursuant
to the United States Oil Pollution Act
1990;
|
|
(ix)
|
the
Vessel's current SMC;
|
|
(x)
|
the
ISM Company's current DOC;
|
|
(xi)
|
the
Vessel's current ISSC;
|
|
(xii)
|
the
Vessel's current IAPPC;
|
|
(xiii)
|
the
Vessel's current Tonnage
Certificate;
|
|
(xiv)
|
the
Borrower's current Carrier Initiative Agreement with the United States'
Customs Service;
|
|
(b)
|
Evidence of Borrower's title
Evidence that any prior registration of the Vessel in the ownership
of the Builder and any Encumbrance registered against that ownership have
been cancelled (or confirmation from the Builder that there was no such
prior registration) and evidence that on the Delivery Date (i) the Vessel
will be at least provisionally registered under the flag stated in Recital
(A) in the ownership of the Borrower and (ii) the Mortgage will be capable
of being registered against the Vessel with first
priority.
|
|
(c)
|
Evidence of insurance
Evidence that the Vessel is insured in the manner required by the
Security Documents and that letters of undertaking will be issued in the
manner required by the Security Documents, together with (if required by
the Lender) the written approval of the Insurances by an insurance adviser
appointed by the Lender and at the expense of the
Borrower.
|
|
(d)
|
Confirmation of class
An
interim Certificate of Confirmation of Class for hull and machinery
confirming that the Vessel is classed with the highest class applicable to
vessels of her type with Lloyd's Register or such other classification
society as may be acceptable to the Lender and at the expense of the
Borrower.
|
|
(e)
|
Survey report
A report
by a surveyor instructed by the Lender to inspect the Vessel confirming
that the condition of the Vessel is in all respects acceptable to the
Lender and at the expense of the
Borrower.
|
(f)
|
Valuation
A valuation of
the Vessel addressed to the Lender from an independent broker acceptable
to the Lender, certifying the Market Value of the Vessel, assessed in such
manner as the Lender may require in its discretion, acceptable to the
Lender and at the expense of the Borrower, confirming that the Maximum
Loan Amount is equal or less than seventy five per cent (75%) of the
Market Value.
|
|
(g)
|
Security Documents
The
Mortgage, the Assignments, together with all other documents required by
any of them, including, without limitation, all notices of assignment
and/or charge and evidence that those notices will be duly acknowledged by
the recipients.
|
|
(h)
|
Mandates
Such duly
signed forms of mandate, and/or other evidence of the opening of the
Earnings Account, as the Lender may
require.
|
|
(i)
|
Managers' confirmation
The written confirmation of the Managers that, throughout the
Facility Period unless otherwise agreed by the Lender, they will remain
the commercial and technical managers of the Vessel and that they will
not, without the prior written consent of the Lender, sub-contract or
delegate the commercial or technical management of the Vessel to any third
party and confirming in terms acceptable to the Lender that, following the
occurrence of an Event of Default, all claims of the Managers against the
Borrower shall be subordinated to the claims of the Lender under the
Finance Documents.
|
|
(a)
|
If
a Security Party is incorporated in a jurisdiction other than England and
Wales or if any Finance Document is governed by the laws of a jurisdiction
other than England and Wales, a legal opinion of the legal advisers to the
Lender in each relevant jurisdiction, substantially in the form or forms
provided to the Lender prior to signing this Agreement or confirmation
satisfactory to the Lender that such an opinion will be
given.
|
|
(a)
|
Process agent
Evidence
that any process agent appointed under any Finance Document has accepted
its appointment.
|
|
(b)
|
Other authorisations
A
copy of any other consent, licence, approval, authorisation or other
document, opinion or assurance which the Lender considers to be necessary
or desirable (if it has notified the Borrower accordingly) in connection
with the entry into and performance of the transactions contemplated by
any of the Relevant Documents or for the validity and enforceability of
any of the Relevant Documents.
|
1
|
Evidence of Borrower's title
Certificate of ownership and encumbrance (or equivalent) issued by
the Registrar of Ships (or equivalent official) of the flag stated in
Recital (A) confirming that (a) the Vessel is permanently registered under
that flag in the ownership of the Borrower, (b) the Mortgage has been
registered with first priority against the Vessel and (c) there are no
further Encumbrances registered against the
Vessel.
|
2
|
Letters of undertaking
Letters of undertaking in respect of the Insurances as required by
the Security Documents together with copies of the relevant policies or
cover notes or entry certificates duly endorsed with the interest of the
Lender.
|
3
|
Acknowledgements of notices
Acknowledgements of all notices of assignment and/or charge given
pursuant to any Security Documents received by the Lender pursuant to Part
III of this Schedule 1.
|
4
|
Legal opinions
Such of
the legal opinions specified in Part III of this Schedule 1 as have not
already been provided to the
Lender.
|
5
|
Companies Act registrations
Evidence that the prescribed particulars of any Security Documents
received by the Lender pursuant to Part III of this Schedule 1 have
been delivered to the Registrar of Companies of England and Wales within
the statutory time limit.
|
6
|
Master's receipt
The
master's receipt for the Mortgage.
|
|
i)
|
maintains
a Minimum Liquidity of not less than twenty five million Dollars
($25,000,000); and
|
|
ii)
|
maintains
a Minimum Adjusted Net Worth of not less than two hundred and fifty
million Dollars ($250,000,000) ;
and
|
|
iii)
|
maintains
Minimum Equity of not less than one hundred million Dollars
($100,000,000).
|
SIGNED
by Andreas
Louka
|
)
|
|
as
duly authorized
|
)
|
|
for
and on behalf of
|
)
|
/s/ Andreas Louka |
LICHTENSTEIN
SHIPPING COMPANY LIMITED
|
)
|
|
in
the presence of:
|
)
|
|
Constantinos Karachallos |
SIGNED
by Konstantinos
Sotiriou
|
)
|
|
Constantinos Flokos | ) | |
as
duly authorized
|
)
|
/s/ Konstantinos Sotiriou |
for
and on behalf of
|
)
|
/s/ Constantinos Flokos |
ALPHA
BANK A.E.
|
)
|
|
in
the presence of:
|
)
|
|
Constantinos Karachallos |
FIRST
SUPPLEMENTAL AGREEMENT TO A SECURED
LOAN
FACILITY AGREEMENT DATED 18 AUGUST 2008
|
||
(1)
|
LICHTENSTEIN SHIPPING COMPANY
LIMITED,
a company incorporated under the laws of the Republic of
Liberia whose registered office is at 80, Broad Street Monrovia, Liberia
(the
"Borrower");
and
|
(2)
|
TOP SHIPS INC.,
a
company incorporated according to the law of the Marshall Islands whose
registered office is at the Trust Company Complex, Ajeltake Road, Ajeltake
Islands, Majuro, Marshall Islands MH96960 (the
"Guarantor");
and
|
(3)
|
ALPHA BANK A.E.,
acting
through its office at 89 Akti Miaouli, GR 185 38 Piraeus, Greece (the
"Lender").
|
(A)
|
DAELIM H&L CO., LTD
., of 1lth Floor,
The Korea Chamber Of Commerce & Industry Building #45, 4-Ga,
Namdaemun-Ro, Jung-Ku. Seoul, Korea 100-743 (the "
Original Bareboat Charterer
") has ceased
to exist with all the rights, interests, obligations and liabilities of
the Original Bareboat Charterer having been assigned to and/or novated to
and/or absorbed by (as appropriate)
DAELLM
CORPORATION
, of 1OF KCCI Bldg, 45 4ga Namdaernunre, Jung gu Seoul,
Korea (the "
Replacement Bareboat
Charterer
"). The Replacement Bareboat Charterer has assumed all of
the Original Bareboat Charterer's rights, obligations and liabilities
under the Bareboat Charter pursuant to Addendum No.2 to the Bareboat
Charter dated 21 November 2008 made between the Borrower, the Original
Bareboat Charterer and the Replacement Bareboat
Charterer.
|
(B)
|
The
Borrower has requested the Lender to agree to the replacement of the
Original Bareboat Charterer by the Replacement Bareboat Charterer in the
Loan Agreement and the Tripartite Deed be cancelled and replaced by the
New Tripartite Deed and all references to the Bareboat Charter and the
Bareboat Charterer in the Loan Agreement and the Security Documents are
amended as more particularly described in this Supplemental
Agreement.
|
(C)
|
The
parties to this Supplemental Agreement have agreed to amend the Loan
Agreement on the terms and subject to the conditions contained in this
Supplemental Agreement.
|
|
1.1
|
In
this Supplemental Agreement:
-
|
|
1.2
|
All
words and expressions defined in the Loan Agreement shall have the same
meaning when used in this Supplemental Agreement unless the context
otherwise requires, and clause 1.2 of the Loan Agreement shall apply to
the interpretation of this Supplemental Agreement as if it was set out in
full.
|
|
2.1
|
As
conditions for the agreement of the Lender to the request specified in
Recital (B) above and for the effectiveness of Clause 4, the Borrower
shall deliver or cause to be delivered to or to the order of the Lender
the following documents and
evidence:
|
|
2.1.1
|
a
certificate from a duly authorised officer of each of the Security Parties
confirming that none of the documents delivered to the Lender pursuant to
Clause 3.1 of the Loan Agreement have been amended or modified in any way
since the date of their delivery to the Lender, or copies, certified by a
duly authorised officer of the Security Party in question as true,
complete, accurate and neither amended nor revoked, of any which have been
amended or modified;
|
|
2.1.2
|
a
copy, certified by a director or the secretary of the Security Party in
question as true, complete and accurate and neither amended nor revoked,
of a resolution of the directors and a resolution of the shareholders of
each Security Party (together, where appropriate, with signed waivers of
notice of any directors' or shareholders' meetings) approving, and
authorising or ratifying the execution of, this Supplemental Agreement and
any document to be executed by that Security Party pursuant to the
Additional Security Documents; and
|
|
2.1.3
|
a
notarially attested and legalised power of attorney of each of the
Security Parties under which the Additional Security Documents and any
documents required pursuant to it are to be executed by that Security
Party; and
|
|
2.1.4
|
if
a Security Party is incorporated in a jurisdiction other than England and
Wales, a legal opinion of the legal advisers to the Lender in each
relevant jurisdiction, substantially in the form or forms provided to the
Lender prior to signing the Additional Security Documents or confirmation
satisfactory to the Lender that such an opinion will be
given;
|
|
2.1.5
|
evidence
in form and substance satisfactory to the Lender in its discretion of the
merger between the Original Bareboat Charterer and the Replacement
Bareboat Charterer; and
|
|
2.1.6
|
the
Additional Security Documents, together with all notices and other
documents required by any of them, duly
executed;
|
|
2.2
|
All
documents and evidence delivered to the Lender pursuant to this Clause
shall:
|
|
2.2.1
|
be
in form and substance acceptable to the
Lender;
|
|
2.2.1
|
be
accompanied, if required by the Lender, by translations into the English
language, certified in a manner acceptable to the Lender;
and
|
|
2.2.3
|
if
required by the Lender, be certified, notarised, legalised or attested in
a manner acceptable to the Lender.
|
|
3.1
|
Each
of the representations and warranties contained in clause 11 of the
Loan Agreement shall be deemed repeated by the Borrower at the date of
this Supplemental Agreement and at the Effective Date, by reference to the
facts and circumstances then pertaining, as if references to the Finance
Documents included this Supplemental
Agreement.
|
|
3.2
|
Each
Security Party further represents and warrants to the Lender
that:
|
|
3.2.1
|
it
is a body corporate duly constituted and existing and (where applicable)
in good standing under the law of its country of incorporation, in each
case with the power to sue and be sued, to own its assets and to carry on
its business, and all of its corporate shareholders are duly constituted
and existing under the laws of their countries of incorporation with
perpetual corporate existence and the power to sue and be sued, to own
their assets and to carry on their
business;
|
|
3.2.2
|
it
has the power to enter into and perform this Supplemental Agreement, the
documentation and the transactions contemplated hereby and has taken all
necessary action to authorise the entry into and performance of this
Supplemental Agreement and such documentation and
transactions;
|
|
3.2.3
|
this
Supplemental Agreement constitutes legal, valid and binding obligations of
that Security Party enforceable in accordance with its terms;
and
|
|
3.2.4
|
the
entry into and performance of this Supplemental Agreement and the
documentation and transactions contemplated hereby do not and will not
conflict with (i) any law or regulation or any official or judicial order,
or (ii) the constitutional documents of that Security Party, or (iii) any
agreement or document to which that Security Party is a party or which is
binding on it or any of its assets, nor result in the creation or
imposition of any encumbrance on any of its
assets.
|
|
4.1
|
the
definition of
"Tripartite
Deed"
set forth in clause 1.1 of the Loan Agreement was deleted and
replaced with the definition of
''New Tripartite Deed"
contained in Clause 1.1 and it was moved
accordingly;
|
|
4.2
|
the
definition of
"Security
Documents"
set out in clause 1.1 of the Loan Agreement was amended
to include the Additional Security Documents and exclude the Tripartite
Deed.
|
|
4.3
|
the
definition of
"Bareboat
Charter"
set out in clause 1.1 of the Loan Agreement was deleted
and replaced as follows:
|
|
4.4
|
the
definition of
"Bareboat
Charterer"
set out in clause 1.1 of the Loan Agreement was deleted
and replaced as follows:
|
|
4.5
|
clause
10.1.5 of the Loan Agreement was deleted and replaced as
follows:-
|
|
4.6
|
schedule
1, Part I, 2, (a) (iv) was deleted and schedule 1, Part I, 2, (a) shall he
renumbered accordingly.
|
|
5.1
|
Each
of the Security Parties confirms that all of its respective obligations
under or pursuant to each of the Security Documents to which it is a party
remain in full force and effect, despite the amendments to the Loan
Agreement made in this Supplemental Agreement, as if all references in any
of the Security Documents to the Loan Agreement were references to the
Loan Agreement as amended, supplemented and novated by this Supplemental
Agreement.
|
|
5.2
|
The
definition of any term defined in any of the Security Documents shall, to
the extent necessary, be modified to reflect the amendments to the Loan
Agreement made in this Supplemental
Agreement.
|
|
6.1
|
The
Borrower undertakes to indemnify the Lender, within fourteen days of the
Lender's written demand, in respect of all costs, charges and expenses
(together with value added tax or any similar tax thereon and including
without limitation the fees and expenses of legal advisers) incurred by
the Lender in connection with the negotiation, preparation, printing,
execution and registration of this Supplemental Agreement, and the
completion of the transactions herein
contemplated.
|
|
6.2
|
The
Borrower undertakes to indemnify the Lender, within fourteen days of the
Lender's written demand against all stamp. registration and similar taxes
which may be payable in connection with the entry into, performance and
enforcement of this Supplemental
Agreement.
|
|
7.1
|
This
Supplemental Agreement may be executed in any number of counterparts, each
of which, when so executed, shall be deemed to be an original, but such
counterparts shall together constitute one and the same
instrument.
|
|
7.2
|
With
effect from the Effective Date, this Supplemental Agreement shall be
construed with and shall constitute an instrument supplemental to the Loan
Agreement. Save as otherwise provided herein and as hereby expressly
varied and supplemented, the Loan Agreement shall remain valid and binding
and in full force and effect after the Effective
Date.
|
Page
|
||
1
|
Interpretation
|
3
|
2
|
Conditions
|
3
|
3
|
Representations
and Warranties
|
7
|
4
|
Amendments
to Loan Agreement
|
7
|
5
|
Confirmation
and Undertaking
|
10
|
6
|
Communications,
Law and Jurisdiction
|
10
|
(1)
|
LICHTENSTEIN
SHIPPING COMPANY LIMITED,
a company incorporated under the laws of
the Republic of Liberia whose registered office is at 80, Broad Street
Monrovia, Liberia (the
"Borrower"
);
and
|
(2)
|
JAPAN
III SHIPPING COMPANY LIMITED,
a company incorporated under the laws
of the Republic of Liberia whose registered office is at 80, Broad Street
Monrovia, Liberia (the
"Collateral
Guarantor"
);
and
|
(3)
|
ALPHA
BANK A.E.,
acting through its office at 89 Akti Miaouli, GR 185 38
Piraeus, Greece (the
"Lender"
).
|
(A)
|
The
Collateral Guarantor and the Lender have entered into a secured loan
agreement dated 17 December 2007 (the
"Japan
Loan Agreement"
)
made
between the Collateral Guarantor, as borrower and the Lender, as lender on
the terms and subject to the conditions of which the Lender has agreed to
advance to the Collateral Guarantor an aggregate amount not exceeding
forty eight million Dollars ($48,000,000) (the
"Japan
Loan"
).
As security for
the obligations of the Collateral Guarantor under the Japan Loan
Agreement, the Collateral Guarantor executed, delivered and registered
(where applicable) in favour of the Lender, as first mortgagee and
assignee, a first preferred Liberian mortgage over the Collateral Vessel
together with a first priority assignment of the Collateral Vessel's
Insurances, Earnings and Requisition
Compensation.
|
(B)
|
As
security for the obligations of the Borrower under the Loan Agreement the
Lender has requested and the Collateral Guarantor agreed to execute,
deliver and register (where applicable) in favour of the Lender a
guarantee and indemnity, a second preferred Liberian mortgage over the
Collateral Vessel and a second priority deed of assignment of the
Insurances, Earnings and Requisition Compensation in respect of the
Collateral Vessel.
|
(C)
|
The
aggregate of the Market Value of the Vessel pursuant to clause 10.12 of
the Loan Agreement is less than one hundred and thirty per cent (130%) of
the Loan.
|
(D)
|
Pursuant
to the provisions of clauses 10.12.1 to 10.12.3 of the Loan Agreement, the
Borrower has an obligation to take certain action following the occurrence
of the event set out in Recital (C)
above.
|
(E)
|
The
Borrower has requested that the Lender agrees to waive the provisions of
clauses 10.12.1 to 10.12.3 and 12.2.2 of the Loan Agreement with effect
from the Effective Date until and including 31 March
2010.
|
(F)
|
Pursuant
to the provisions of clause 12.2.1 of the Loan Agreement, the Borrower
would procure that the Guarantor shall at all times during the Facility
Period on a consolidated basis commencing from the date of the Loan
Agreement maintain a Minimum Liquidity of not less than twenty five
million Dollars ($25,000,000).
|
(G)
|
The
Borrower has requested that the Lender agrees to reduce the amount of the
Minimum Liquidity referred to in clause 12.2.1 of the Loan Agreement to an
amount not less than fifteen million Dollars ($15,000,000) with effect
from the Effective Date up to and including 31 March 2010, whereupon and
for the remaining of the Facility Period the amount of the Minimum
Liquidity will be increased again to an amount of not less than twenty
five million Dollars ($25,000,000).
|
(H)
|
The
Lender is willing to agree to all the foregoing requests and amend the
Loan Agreement and the Security Documents subject to the terms and
conditions set forth in this Second Supplemental
Agreement.
|
(I)
|
At
the date of this Second Supplemental Agreement the outstanding amount of
the Loan is thirty nine million Dollars
($39,000,000).
|
|
1.2
|
Unless
otherwise defined, all words and expressions defined in the Loan Agreement
shall have the same meaning when used in this Second Supplemental
Agreement unless the context otherwise requires, and clause 1.2 of the
Loan Agreement shall apply to the interpretation of this Second
Supplemental Agreement as if it was set out in
full.
|
|
2.1
|
As
conditions for the agreement of the Lender to the requests specified in
Recitals (E) and (G) above, the Borrower shall deliver or cause to be
delivered to or to the order of the Lender the following documents and
evidence:
|
|
2.1.1
|
a
certificate from a duly authorised officer of each of the Borrower and the
Guarantor confirming that none of the documents delivered to the Lender
pursuant to clauses 3.1 and 3.5 of the Loan Agreement have been amended or
modified in any way since the date of their delivery to the Lender, or
copies, certified by a duly authorised officer of each of the Borrower and
the Guarantor as true, complete, accurate and neither amended nor revoked,
of any documents which have been amended or
modified;
|
|
2.1.2
|
copies
of the constitutional documents of the Collateral Guarantor together with
such other evidence as the Lender may reasonably require that the
Collateral Guarantor is duly incorporated in its country of incorporation
and remains in existence with power to enter into, and perform its
obligations under, the New Security Documents to which it is or is to
become a party;
|
|
2.1.3
|
the
original resolution of the directors and the shareholders of each of the
Security Parties and the Guarantor (together, where appropriate, with
signed waivers of notice of any directors' or shareholders' meetings)
approving, and authorising or ratifying the execution of, the New Security
Documents and any document to be executed by each of the Security Parties
and the Guarantor pursuant to the New Security Documents;
|
|
2.1.4
|
a
notarially attested and legalised power of attorney of each of the
Security Parties and the Guarantor under which the New Security Documents
and any documents required pursuant to them are to be executed by each of
the Security Parties and the Guarantor;
|
|
2.1.5
|
a
certificate of good standing in respect of each of the Security Parties
and the Guarantor;
|
|
2.1.6
|
the
New Security Documents, together with all other documents required by any
of them, including, without limitation, all other notices of assignment
and/or charge duly executed and registered (where applicable) and evidence
that those notices will be duly acknowledged by the recipients and in the
case of the Collateral Mortgage registered with second priority at the
Ship's Registry (or equivalent office) of the Collateral Vessel's current
flag;
|
|
2.1.7
|
a
certificate of ownership and encumbrance (or equivalent) issued by the
Registrar of Ships (or equivalent official) of the Collateral Vessel's
current flag confirming that the Collateral Vessel is permanently
registered under the flag of the Republic of Liberia in the ownership of
the Collateral Guarantor and that the Collateral Mortgage in respect of
the Collateral Vessel has been registered with second priority and that
there are no further encumbrances registered apart from a first preferred
Liberian mortgage over the Collateral Vessel dated 19 December 2007
executed by the Collateral Guarantor in favour of the
Lender;
|
|
2.1.8
|
evidence
that the Collateral Vessel is insured in the manner required by the New
Security Documents and that letters of undertaking will be issued in the
manner required by the New Security Documents together with copies of the
relevant policies or cover notes or entry certificates duly endorsed with
the interest of the Lender as second mortgagee and assignee, together with
(if required by the Lender) the written approval of the Insurances by an
insurance adviser appointed by the Lender;
|
|
2.1.9
|
if
required by the Lender, the written confirmation of the Managers that,
throughout the Facility Period unless otherwise agreed by the Lender, they
will remain the commercial and technical managers of the Collateral Vessel
and that they will not, without the prior written consent of the Lender
sub-contract or delegate the commercial or technical management of the
Collateral Vessel to any third party and confirming in terms acceptable to
the Lender that, following the occurrence of an Event of Default, all
claims against the Borrower shall be subordinated to the claims of the
Lender under the Finance Documents;
|
|
2.1.10
|
confirmation
satisfactory to the Lender that all legal opinions required by the Lender
will be given substantially in the form required by the
Lender;
|
|
2.1.11
|
evidence
that any process agent referred to in clause 21.5 of the Loan Agreement
and any process agent appointed under any New Security Document has
accepted its appointment;
|
|
2.1.12
|
a
copy of any other consent, licence, approval, authorisation or other
document, opinion or assurance which the Lender considers to be necessary
or desirable (if it has notified the Borrower and/or the Collateral
Guarantor accordingly) in connection with the entry into and performance
of the transactions contemplated by this Second Supplemental Agreement and
the other New Security Documents or for the validity and enforceability of
this Second Supplemental Agreement and the other New Security
Documents.
|
|
2.2
|
If
the Lender agrees, in its sole discretion, to waive any conditions under
Clause 2.1 prior to the Effective Date, the Borrower undertakes to deliver
all outstanding documents and evidence to or to the order of the Lender no
later than the date specified by the Lender, which however, shall not be
taken as a waiver of the Lender's right to require production of all the
documents and evidence required by Clause 2.1.
|
|
2.3
|
All
documents and evidence delivered to the Lender pursuant to this Clause
shall:
|
|
2.3.1
|
be
in form and substance acceptable to the Lender;
|
|
2
.
3
.
2
|
be
accompanied, if required by the Lender, by translations into the English
language, certified in a manner acceptable to the Lender; and
|
|
2.3.3
|
if
required by the Lender, be certified, notarised, legalised or attested in
a manner acceptable to the Lender.
|
|
4.1
|
the
definitions contained in Clause 1.1 (other than the definition of
"Effective
Date"
)
of this Second
Supplemental Agreement shall be added to clause 1.1 of the Loan
Agreement;
|
|
4.2
|
the
definition of
"Collateral
Guarantor"
contained in Recital 2 was added in clause 1.1 of the
Loan Agreement;
|
|
4.3
|
the
definition of the term
"Margin",
as is set out in clause 1.1 of the Loan Agreement shall be
substituted as follows:-
|
|
4.4
|
where
the context so admits, all references to the term
"Mortgage"
(however defined) in the Loan Agreement and the Security Documents,
shall be read and construed as including the plural of such term or as
referring to each
"Mortgage",
as if they were references to the Mortgage in respect of the Vessel
and to the Collateral Mortgage in respect of the Collateral
Vessel;
|
|
4.5
|
the
definition of
"Security
Documents"
set forth in clause 1.1 of the Loan Agreement was
construed to include the New Security Documents;
|
|
4.6
|
the
definition of
"Security
Parties"
set forth in clause 1.1 of the Loan Agreement was
construed to include the Collateral Guarantor;
|
|
4.7
|
where
the context so admits, all references to the term
"Vessel"
(however defined) in the Loan Agreement, including but not limited
to references in clauses 1.1, 10, 12 and 13 of the Loan Agreement, and the
Security Documents, shall be read and construed as including the plural of
such term or as referring to each
"Vessel"
respectively, as if they were references to the Vessel in relation
to the Borrower and to the Collateral Vessel in relation to the Collateral
Guarantor;
|
|
4.8
|
the
Lender agrees to waive the breach of the covenant contained in clause
10.12 of the Loan Agreement only until 31 March
2010;
|
|
4.9
|
clause
6.3 of the Loan Agreement was deleted and replaced with the following
clause 6.3:
|
|
6.3.1
|
pay
to the Lender or to its nominee a cash deposit to be secured in favour of
the Lender as additional security for the payment of the Indebtedness;
or
|
|
6.3.2
|
give
to the Lender other additional security in amount and form acceptable to
the Lender in its discretion; or
|
|
6.3.3
|
prepay
an amount of the Indebtedness,
|
|
4.10
|
clause
12.2 of the Loan Agreement was deleted and replaced with the following
clause 12.2:
|
|
12.2.1
|
maintain
a Minimum Liquidity of not less than twenty five million Dollars
($25,000,000), but of not less than fifteen million Dollars ($15,000,000)
from the Effective Date until 31 March 2010 whereupon and for the
remaining of the Facility Period the amount of the Minimum Liquidity will
be increased again to an amount of not less than twenty five million
Dollars ($25,000,000); and
|
|
12.2.2
|
maintain
a Minimum Adjusted Net Worth of not less than two hundred and fifty
million Dollars ($250,000,000) with the exception of the period between
the Effective Date and 31 March 2010; and
|
12.2.3 |
maintain
Minimum Equity of not less than one hundred million Dollars
($100,000,000).";
|
|
4.11
|
clause
13.1. I 8 of the Loan Agreement was deleted and replaced with the
following clause 13.1.18:-
|
|
"13.1.18
Notice
of termination
The Guarantor or the Collateral Guarantor gives
notice to the Lender to determine its obligations under the Guarantee or
the Collateral Guarantee."; and
|
|
4.12
|
clause
10.1 of the Loan Agreement shall be read and construed as including the
New Security Documents.
|
|
5.1
|
The
Borrower confirms that all of its respective obligations under or pursuant
to each of the Security Documents to which it is a party remain in full
force and effect, despite the amendments to the Loan Agreement made in
this Second Supplemental Agreement, as if all references in any of the
Security Documents to the Loan Agreement (however described) were
references to the Loan Agreement as amended and supplemented by this
Second Supplemental Agreement.
|
|
5.2
|
The
definition of any term defined in any of the Security Documents shall, to
the extent necessary, be modified to reflect the amendments to the Loan
Agreement made in this Second Supplemental
Agreement.
|
SIGNED and DELIVERED as a DEED
by
|
)
|
LICHTENSTEIN
SHIPPING COMPANY LIMITED
|
)
|
acting
by Andreas Louka
|
)
/s/Andreas
Louka
|
its
duly authorised attorney-in-fact
|
)
|
in
the presence of:
|
)
|
/s/Stephenson Harwood | |
STEPHENSON HARWOOD | |
ARISTON BUILDING | |
2 FILELL NON STR & AKTI MIA OULI | |
PIRAEUS 185 36 GREECE | |
VAT NO 998711156 | |
TEL 210 42 95 160 |
SIGNED and DELIVERED as a DEED
by
|
)
|
JAPAN
III SHIPPING COMPANY LIMITED
|
)
|
acting
by Andreas Louka
|
)
/s/Andreas
Louka
|
its
duly authorised attorney-in-fact
|
)
|
in
the presence of:
|
)
|
/s/Stephenson Harwood | |
STEPHENSON HARWOOD | |
ARISTON BUILDING | |
2 FILELL NON STR & AKTI MIA OULI | |
PIRAEUS 185 36 GREECE | |
VAT NO 998711156 | |
TEL 210 42 95 160 |
SIGNED and DELIVERED as a DEED
by
|
)
|
ALPHA
BANK A.E.
|
)
|
acting
by Constantinos Flokos
|
)
/s/Constantinos
Flokos
|
and
by Gregorios Kondilis
|
)
/s/Gregorios
Kondilis
|
its
duly authorized attorneys-in-fact
|
)
|
in
the presence of:
|
)
|
/ s /Stephenson Harwood | |
STEPHENSON HARWOOD | |
ARISTON BUILDING | |
2 FILELL NON STR & AKTI MIA OULI | |
PIRAEUS 185 36 GREECE | |
VAT NO 998711156 | |
TEL 210 42 95 160 |
1.
|
DEFINITIONS
|
1
|
||
1.1
|
Specific
Definitions
|
1
|
||
1.2
|
Computation
of Time Periods; Other Definitional Provisions
|
22
|
||
1.3
|
Accounting
Terms
|
22
|
||
1.4
|
Certain
Matters Regarding Materiality
|
22
|
||
1.5
|
Forms
of Documents
|
22
|
||
2.
|
REPRESENTATIONS
AND WARRANTIES
|
22
|
||
2.1
|
Representations
and Warranties
|
22
|
||
(a)
|
Due
Organization and Power
|
23
|
||
(b)
|
Authorization
and Consents
|
23
|
||
(c)
|
Binding
Obligations
|
23
|
||
(d)
|
No
Violation
|
23
|
||
(e)
|
Filings;
Stamp Taxes
|
23
|
||
(f)
|
Litigation
|
23
|
||
(g)
|
No
Default
|
24
|
||
(h)
|
Vessels
|
24
|
||
(i)
|
Insurance
|
24
|
||
(j)
|
Financial
Information
|
24
|
||
(k)
|
Tax
Returns
|
24
|
||
(l)
|
Chief
Executive Office
|
25
|
||
(m)
|
Foreign
Trade Control Regulations
|
25
|
||
(n)
|
Equity
Ownership
|
25
|
||
(o)
|
Environmental
Matters and Claims
|
25
|
||
(p)
|
Compliance
with ISM Code, the ISPS Code, the MTSA and Annex VI
|
26
|
||
(q)
|
No
Threatened Withdrawal of DOC, ISSC, SMC or IAPPC
|
26
|
||
(r)
|
Liens
|
26
|
||
(s)
|
Financial
Indebtedness
|
26
|
||
(t)
|
No
Proceedings to Dissolve
|
27
|
||
(u)
|
Solvency
|
27
|
||
(v)
|
Senior/Pari
Passu Ranking
|
27
|
||
(w)
|
Taxes
on Payments
|
27
|
||
(x)
|
Jurisdiction/Governing
Law
|
27
|
||
(y)
|
Charter
Hire
|
27
|
||
(z)
|
Compliance
with Laws
|
27
|
(aa)
|
Survival
|
27
|
||
(e)
|
Additional
Documents
|
37
|
||
(f)
|
Vessel
Liens
|
37
|
||
(g)
|
Vessel
Appraisals
|
37
|
||
(h)
|
ISM
and ISPS Code
|
38
|
||
(i)
|
Approved
Manager Documents
|
38
|
||
(j)
|
Legal
Opinions
|
38
|
||
4.4
|
Further
Conditions Precedent
|
38
|
||
(a)
|
Drawdown
Notice
|
38
|
||
(b)
|
Representations
and Warranties
|
38
|
||
(c)
|
No
Event of Default
|
38
|
||
(d)
|
No
Change in Laws
|
38
|
||
(e)
|
No
Material Adverse Effect
|
38
|
||
(f)
|
Fees
|
39
|
||
4.5
|
Conditions
Subsequent
|
39
|
||
4.6
|
Breakfunding
Costs
|
39
|
||
4.7
|
Satisfaction
after Drawdown
|
39
|
||
5.
|
REPAYMENT
AND PREPAYMENT
|
39
|
||
5.1
|
Repayment
|
39
|
||
5.2
|
Voluntary
Prepayment; No Re-Borrowing
|
41
|
||
5.3
|
Mandatory
Prepayment Upon Sale or Loss of Vessel
|
41
|
||
5.4
|
Sale
or Loss of Collateral Vessel
|
41
|
||
5.5
|
Interest
and Costs with Prepayments/Application of Prepayments
|
41
|
||
6.
|
INTEREST
AND RATE
|
42
|
||
6.1
|
Applicable
Rate
|
42
|
||
6.2
|
Default
Rate
|
42
|
||
6.3
|
Interest
Periods
|
42
|
||
6.4
|
Interest
Payments
|
43
|
||
7.
|
PAYMENTS
|
43
|
||
7.1
|
Place
of Payments, No Set Off
|
43
|
||
7.2
|
Tax
Credits
|
43
|
||
7.3
|
Sharing
of Setoffs
|
43
|
||
7.4
|
Computations;
Banking Days
|
44
|
||
12.
|
CURRENCY
INDEMNITY
|
58
|
||
12.1
|
Currency
Conversion
|
58
|
||
12.2
|
Change
in Exchange Rate
|
58
|
||
12.3
|
Additional
Debt Due
|
58
|
||
12.4
|
Rate
of Exchange
|
58
|
||
13.
|
FEES
AND EXPENSES
|
59
|
||
13.1
|
Fees
|
59
|
||
13.2
|
Expenses
|
59
|
||
14.
|
THE
AGENTS
|
59
|
||
14.1
|
Appointment
of Agents
|
59
|
||
14.2
|
Security
Trustee as Trustee
|
60
|
||
14.3
|
Distribution
of Payments
|
60
|
||
14.4
|
Holder
of Interest in Note
|
60
|
||
14.5
|
No
Duty to Examine, Etc
|
60
|
||
14.6
|
Agents
as Lenders
|
61
|
||
14.7
|
Acts
of the Agents
|
61
|
||
14.8
|
Certain
Amendments
|
62
|
||
14.9
|
Assumption
re Event of Default
|
62
|
||
14.10
|
Limitations
of Liability
|
63
|
||
14.11
|
Indemnification
of the Agents
|
63
|
||
14.12
|
Consultation
with Counsel
|
63
|
||
14.13
|
Resignation
|
63
|
||
14.14
|
Representations
of Lenders
|
64
|
||
14.15
|
Notification
of Event of Default
|
64
|
||
14.16
|
No
Agency or Trusteeship if not Syndicated
|
64
|
||
14.17
|
Nature
of Duties
|
64
|
||
14.18
|
Delegation
of Power
|
64
|
||
15.
|
NOTICES
AND DEMANDS
|
65
|
||
15.1
|
Notices
|
65
|
||
16.
|
MISCELLANEOUS
|
65
|
||
16.1
|
Time
of Essence
|
65
|
||
16.2
|
Invalidity
|
66
|
||
16.3
|
Further
Assurances
|
66
|
||
16.4
|
Prior
Agreements, Merger
|
66
|
||
16.5
|
Entire
Agreement; Amendments
|
66
|
||
16.6
|
Indemnification
|
66
|
||
16.7
|
Remedies
Cumulative and Not Exclusive; No Waiver
|
67
|
||
16.8
|
Successors
and Assigns
|
67
|
||
16.9
|
Counterparts;
Electronic Delivery
|
67
|
||
16.10
|
References
|
68
|
||
16.11
|
Headings
|
68
|
||
17.
|
APPLICABLE
LAW, JURISDICTION AND WAIVERS
|
68
|
||
17.1
|
Applicable
Law
|
68
|
||
17.2
|
Jurisdiction
|
68
|
||
17.3
|
Waiver
of Jury Trial
|
68
|
||
17.4
|
Waiver
of Immunity
|
69
|
SCHEDULE
|
1
|
The
Lenders and the Initial Commitments
|
2
|
The
Vessels
|
3
|
Financial
Indebtedness
|
A
|
Form
of Note
|
|
B
|
Form
of Guaranty
|
|
C-1
|
Form
of Account Pledge (Retention Account)
|
|
C-2
|
Form
of Account Pledge (Earnings Accounts)
|
|
C-3
|
Form
of Account Pledge (Equity and Reserve Account)
|
|
C-4
|
Form
of Collateral Account Pledge (Retention Account)
|
|
C-5
|
Form
of Collateral Account Pledge (Earnings Account)
|
|
C-6
|
Form
of Collateral Account Pledge (Debt Service Reserve
Account)
|
|
D-1
|
Form
of Mortgage
|
|
D-2
|
Form
of Mortgage and Deed of Covenants (Malta)
|
|
D-3
|
Form
of Collateral Mortgage
|
|
E-1
|
Form
of Earnings Assignment
|
|
E-2
|
Form
of Collateral Earnings Assignment
|
|
F-1
|
Form
of Insurances Assignment
|
|
F-2
|
Form
of Collateral Insurances Assignment
|
|
G
|
Form
of Assignment and Assumption Agreement
|
|
H
|
Form
of Compliance Certificate
|
|
I
|
Form
of Drawdown Notice
|
|
J
|
Form
of Interest Notice
|
|
K
|
Form
of Approved Manager's Undertaking
|
|
L
|
Form
of Assignment of Shipbuilding Contract
and
Refund Guarantees
|
|
M
|
Form
of Assignment of Charter Party Agreement
|
|
N
|
Form
of Collateral Assignment of Charter Party Agreement
|
|
O
|
Form
of Management Agreement
Assignment
|
1.
|
DEFINITIONS
|
"Acceptable
Accounting Firm"
|
means
Deloitte & Touche, or such other recognized international accounting
firm as shall be approved by the Administrative Agent, such approval not
to be unreasonably withheld;
|
"Account
Pledge(s)"
|
means
each of the pledge agreements to be executed by the Borrowers in favor of
the Finance Parties in respect of the Retention Account, Earnings Accounts
and Equity and Reserve Account, pursuant to Section 4.1(b) and
Section 4.3(d), as the case may be, substantially in the form set out
|
in Exhibits C-1, C-2 and C-3 respectively; | |
"Accounting
Period"
|
means
each consecutive period of three months falling during the period (ending
on the last day in March, June, September and December of each year) for
which quarterly accounting information is required to be provided to the
Administrative Agent hereunder;
|
"Additional
Deposit"
|
shall
have the meaning set forth in Section 4.1(f);
|
"Adjusted
Net Worth"
|
means,
measured at the end of an Accounting Period, the amount of Total Assets
(as adjusted to include the aggregate Fair Market Value of each of the
vessels owned by the Guarantor and each of its Subsidiaries) less
Consolidated Debt as stated in then most recent accounting information
delivered to the Administrative Agent hereunder;
|
"Administrative
Agent"
|
shall
have the meaning ascribed thereto in the preamble;
|
"Advance(s)"
|
means
any amount advanced to the Borrowers with respect to the Facility or (as
the context may require) the aggregate amount of all such Advances for the
time being outstanding;
provided
,
however
, that
only four Advances shall be made per Tranche and that no Advance shall be
made available after the Final Availability Date;
|
"Affiliate"
|
means
with respect to any Person, any other Person directly or indirectly
controlled by or under common control with such Person. For the
purposes of this definition, "control" (including, with correlative
meanings, the terms "controlled by" and "under common control with") as
applied to any Person means the possession directly or indirectly of the
power to direct or cause the direction of the management and policies of
that Person whether through ownership of voting securities or by contract
or otherwise;
|
"Agents"
|
means
each of the Administrative Agent and the Security
Trustee;
|
"Amalfi"
|
means
Amalfi Shipping Company Limited, a corporation organized and existing
under the laws of the Republic of the Marshall
Islands;
|
to Section 4.1(b), substantially in the form set out in Exhibit L; | |
"Banking
Day(s)"
|
means
day(s) on which banks are open for the transaction of business in London,
England, New York, New York (United States of America), Piraeus, Greece
and Hamburg, Germany;
|
"Borrower(s)"
|
shall
have the meaning ascribed thereto in the preamble;
|
"Britto"
|
shall
have the meaning ascribed thereto in the preamble;
|
"BRITTO"
|
means
that certain Vessel owned or to be owned by Britto, with Hull Number
S-1031 and registered or to be registered under the flag of the Republic
of Liberia;
|
"BRITTO
Charter Party Agreement"
|
means
the bareboat charter agreement between the BRITTO Charterer and Britto
with respect to the BRITTO with a minimum net charter rate of $14,550 per
day and a minimum duration of 10 years;
|
"BRITTO
Charterer"
|
means
Daelim H&L Co., Ltd.;
|
"BRITTO
Refund Guarantee"
|
means
that certain letter of guarantee No. 1372400009198179 dated December 18,
2006 issued by the Refund Guarantor in favor of the Guarantor in
connection with the BRITTO Shipbuilding Contract to be assigned to Britto
on or prior to the date of the Initial Advance with respect to Tranche
C;
|
"BRITTO
Shipbuilding Contract"
|
means
that certain Shipbuilding Contract for construction of the vessel BRITTO
entered into as of October 31, 2006, between the Builder and the Guarantor
to be novated in favor of Britto on or prior to the date of the Initial
Advance with respect to Tranche C;
|
"Builder"
|
means
SPP Plant & Shipbuilding Co., Ltd., a corporation organized under the
laws of the Republic of Korea;
|
"Change
of Control"
|
means
(a) any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act), other than a member of the immediate family of Evangelos
Pistiolis or a member of the immediate family of George Economou, who
becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act), directly or indirectly, of more than 35% of the total
voting power or
|
ownership
interest of the Guarantor or (b) the Board of Directors of the
Guarantor ceases to consist of a majority of the directors existing on the
date hereof or directors nominated by at least two-thirds (2/3) of the
then existing directors;
|
|
"Charter
Party Agreement(s)"
|
means
(i) the WARHOL Charter Party Agreement, (ii) the INDIANA Charter Party
Agreement, (iii) the BRITTO Charter Party Agreement and (iv) any other
bareboat charter agreement or any time charter agreement with any of the
Borrowers which the Borrowers shall from time to time enter, having a
duration of longer than eleven (11) months including but not limited to
the existing charters with respect to each Vessel;
|
"Charterer(s)"
|
means
(i) the WARHOL Charterer, (ii) the INDIANA Charterer, (iii) the BRITTO
Charterer and (iv) any other bareboat charterer or time charterer who has
entered or shall from time to time enter into a Charter Party Agreement
with any of the Borrowers;
|
"Classification
Society"
|
means
Det Norske Veritas or any other member of the International Association of
Classification Societies, as approved by the Administrative Agent, with
whom any of the Vessels are entered and who conducted periodic physical
surveys and/or inspections of any of the Vessels;
|
"Code"
|
means
the Internal Revenue Code of 1986, as amended, and any successor statute
and regulation promulgated thereunder;
|
"Collateral"
|
means
the Vessels, each of the Collateral Vessels, all property or other assets,
real or personal, tangible or intangible, whether now owned or hereafter
acquired in which any Agent or any Lender has been granted a security
interest pursuant to a Security Document;
|
"Collateral
Account Pledge(s)"
|
means
each of the second preferred pledge agreements executed by the relevant
Collateral Obligor in favor of the Finance Parties in respect of the
Retention Accounts, Earnings Account and Debt Service Reserve Account (as
defined in the $95M Credit Agreement) pursuant to Section 4.1(b), and
substantially in the form set out in Exhibits C-4, C-5 and C-6
respectively;
|
all
of its respective covenants contained herein and showing the calculations
thereof in reasonable detail, executed and delivered by the
chief financial officer of the Guarantor to the Administrative Agent from
time to time pursuant to Section 9.1(d) in the form set out in
Exhibit H, or in such other form as the Administrative Agent may
agree;
|
|
"Consent
and Agreement"
|
means
the consent and agreement relating to this Credit Facility Agreement to be
executed by the Guarantor and each of the Collateral Obligors in the form
attached hereto;
|
"Consolidated
Debt"
|
means,
measured at the end of an Accounting Period for the Guarantor and its
Subsidiaries on a consolidated basis, the aggregate amount of Debt due by
the Security Parties as stated in the then most recent accounting
information delivered to the Administrative Agent
hereunder;
|
"Consolidated
Financial
Indebtedness"
|
means,
measured at the end of each Accounting Period, the aggregate amount of
Financial Indebtedness (including current maturities) of the Guarantor and
its Subsidiaries on a consolidated basis as stated in the then most recent
accounting information delivered to the Administrative Agent
hereunder;
|
"Construction
Costs"
|
means,
in relation to a Vessel, the total cost of construction, including, but
not limited to, any amount owed to the Builder under the Shipbuilding
Contracts, as determined by the Administrative Agent in its sole
discretion prior to the date of any Delivery Advance in respect of the
relevant Vessel;
|
"Credit
Facility Agreement"
|
means
this agreement, as the same shall be amended, modified or supplemented
from time to time;
|
"Current
Assets"
|
means,
measured at the end of each Accounting Period, the aggregate of the cash
and marketable securities, trade and other receivables of the Guarantor
and its Subsidiaries on a consolidated basis from Persons which can be
realized within one year, inventories and prepaid expenses which are to be
charged to income within one year less any doubtful debts and any
discounts or allowances given as stated in the then most recent accounting
information delivered to the Administrative Agent
hereunder;
|
"Debt"
|
means,
in relation to the Guarantor and its Subsidiaries (the
"debtor"): (a) Financial Indebtedness of the debtor; (b)
liability for any credit to the debtor from a supplier of goods or
services or under any installment purchase or payment plan or similar
arrangement; (c) contingent liabilities of the debtor (including without
limitation any taxes or other payments under dispute) which have been or,
under GAAP, should be recorded in the notes to the accounting information;
(d) deferred tax of the debtor; and (e) liability under a guarantee,
indemnity or similar obligation entered into by the debtor in respect of a
liability of another Person who is not a Security Party which would fall
within (a) to (d) if the references to the debtor referred to the other
Person;
|
"Default
Rate"
|
shall
have the meaning ascribed thereto in Section 6.2;
|
"Delivery
Advance"
|
means
with respect to each Tranche, the fourth and final Advance to be made to
any Borrower;
provided
,
however
, that
no Delivery Advance shall be made available after the Final Availability
Date with respect to the applicable Tranche;
|
"Delivery
Date"
|
means
with respect to each Vessel the date on which a Vessel is delivered to its
respective Borrower;
|
"DOC"
|
means
a document of compliance issued to an Operator in accordance with rule 13
of the ISM Code;
|
"Dollars"
and the sign "$"
|
means
the legal currency, at any relevant time hereunder, of the United States
of America and, in relation to all payments hereunder, in same day funds
settled through the New York Clearing House Interbank Payments System (or
such other Dollar funds as may be determined by the Administrative Agent
to be customary for the settlement in New York City of banking
transactions of the type herein involved);
|
"Drawdown
Date(s)"
|
means
the dates, each being a Banking Day, upon which the Borrowers have
requested that an Advance be made available to the Borrowers, and such
Advance is made, as provided in Section 3;
provided
, that no Drawdown Date shall occur
after the Final Availability Date with respect to the applicable
Tranche;
|
"Drawdown
Notice"
|
shall
have the meaning ascribed thereto in Section 3.2;
|
"Earnings
Account"
|
shall
have the meaning ascribed thereto in Section 4.3(d);
|
"Earnings
Assignment(s)"
|
means
the assignments in respect of the earnings of each Vessel from any and all
sources, to be executed by the relevant Borrower in favor of the Security
Trustee pursuant to Section 4.3(b), substantially in the form set out
in Exhibit E-1;
|
"EBITDA"
|
means,
in respect of an Accounting Period, the aggregate amount of consolidated
pre-tax profits of the Guarantor and its Subsidiaries before extraordinary
or exceptional items (including drydocking costs), depreciation, interest,
rentals under finance leases and similar charges payable but after the
deduction of payments made under bareboat charters in each case as stated
in the then most recent accounting information;
|
"Environmental
Affiliate(s)"
|
means
any Person, the liability of which for Environmental Claims any Security
Party or Subsidiary of any Security Party may have assumed by contract or
operation of law;
|
"Environmental
Approval(s)"
|
shall
have the meaning ascribed thereto in
Section 2.1(o);
|
"Environmental
Claim(s)"
|
shall
have the meaning ascribed thereto in
Section 2.1(o);
|
"Environmental
Law(s)"
|
shall
have the meaning ascribed thereto in
Section 2.1(o);
|
"Equity
Deposit"
|
shall
have the meaning ascribed thereto in Section 4.1(f);
|
"Equity
and Reserve Account"
|
shall
have the meaning ascribed thereto in Section 4.1(f);
|
"Event(s)
of Default"
|
means
any of the events set out in Section 8.1;
|
"Exchange
Act"
|
means
the Securities and Exchange Act of 1934, as amended;
|
"Facility"
|
means
the term loan facility to be made available by the Lenders to the
Borrowers hereunder in three (3) Tranches, each comprised of four (4)
Advances to be made available pursuant to Section 3; and being, in the
aggregate, no more than the least of (i) One Hundred Twenty One Million
Two Hundred Eighty Six Thousand Five Hundred Dollars ($121,286,500), (ii)
eighty-five percent (85%) of the Construction Costs of the Vessels, or
(iii) eighty percent
|
(80%) of the Fair Market Value of the Vessels; | |
"Fair
Market Value"
|
means
(i) in relation to a Vessel, her sale value, determined as the average of
two valuations per Vessel prior to the Delivery Date relating to such
Vessel, and thereafter one valuation every six months commencing six
months following the Delivery Date relating to such Vessel, and (ii) in
relation to a Collateral Vessel, her sale value, determined as the average
of two valuations per Collateral Vessel prior to the Initial Advance under
any Tranche, and thereafter one valuation per year commencing on the first
anniversary following the first Delivery Date relating to any Vessel, each
valuation to be not older than one month from any of Simpson, Spence and
Young, London, England or Astrup Fearnley A/S, Oslo, Norway or AC
Shipping, London, England or R.S. Platou Shipbrokers A/S, Oslo, Norway or
Galbraith's Limited, London, England or H. Clarksons & Co. Ltd.,
London, England) with or without physical inspection (as the Lender may
require) in United States Dollars on the basis of the sale of the Vessel
(i) for prompt delivery, (ii) for cash, (iii) without taking into account
any charter party relating to the Vessel, and (iv) at arm's length on
normal commercial terms between a willing seller and a willing buyer. If
the two valuations for any Vessel obtained prior to the Drawdown Date
differ by a margin of more than fifteen percent (15%) then a third
appraiser from the aforementioned firms selected by the Administrative
Agent shall make an independent appraisal at the Borrowers' expense, and
the Fair Market Value of the Vessel shall be considered to be the average
of all three valuations obtained;
|
"Fee
Letter"
|
means
that certain fee letter of even date herewith, entered into by the
Guarantor and HSH in respect of the Facility;
|
"Final
Availability Date"
|
means
(i) with respect to Tranche A, July 28, 2009, (ii) with respect to Tranche
B, October 27, 2009 and (iii) with respect to Tranche C, November 27,
2009;
|
"Final
Tranche A
Payment
Date"
|
means,
that date which is ten (10) years after the Delivery Advance under Tranche
A, but in any event not later than December 30, 2019;
|
"Final
Tranche B
Payment
Date"
|
means,
that date which is ten (10) years after the Delivery Advance under Tranche
B, but in any event not later than
|
December 30, 2019; | |
"Final
Tranche C
Payment
Date"
|
means,
that date which is ten (10) years after the Delivery Advance under Tranche
C, but in any event not later than December 30, 2019;
|
"Finance
Parties"
|
means
(i) HSH as the Mandated Lead Arranger, Underwriter, Administrative Agent
and Security Trustee, (ii) the Lenders and (iii) the Swap
Provider;
|
"Financial
Indebtedness"
|
means,
in relation to the Guarantor and its Subsidiaries (the "debtor"), a
liability of the debtor: (a) for principal, interest or any
other sum payable in respect of any moneys borrowed or raised by the
debtor; (b) under any loan, stock, bond, note or other security issued by
the debtor; (c) under any acceptance credit, guarantee or letter of credit
facility made available to the debtor; (d) under a financial lease, a
deferred purchase consideration arrangement (in each case, other than in
respect of assets or services obtained on normal commercial terms in the
ordinary course of business) or any other agreement having the commercial
effect of a borrowing or raising of money by the debtor; (e) under any
foreign exchange transaction, interest or currency swap or any other kind
of derivative transaction entered into by the debtor or, if the agreement
under which any such transaction is entered into requires netting of
mutual liabilities, the liability of the debtor for the net amount; or (f)
under a guarantee, indemnity or similar obligation entered into by the
debtor in respect of a liability of another Person which would fall within
(a) to (e) if the references to the debtor referred to the other
Person;
|
"Fixed
Charges"
|
means,
measured at the end of an Accounting Period, the aggregate of Interest
Expenses and the portion of Consolidated Financial Indebtedness (other
than balloon repayments) in respect of the Guarantor and its Subsidiaries
falling due during that period, as stated in the then most recent
accounting information provided to the Administrative Agent
hereunder;
|
"GAAP"
|
shall
have the meaning ascribed thereto in Section 1.3;
|
"Guarantor"
|
means
Top Ships Inc. (fka Top Tankers Inc.), a corporation organized and
existing under the laws of the Republic of the Marshall
Islands;
|
"Guaranty"
|
means
the unconditional and irrevocable guaranty to be executed by the Guarantor
in respect of the obligations of the Borrowers under and in connection
with this Credit Facility Agreement and the Note in favor of the Security
Trustee pursuant to Section 4.l(b), substantially in the form set out
in form of Exhibit B;
|
"HSH"
|
shall
have the meaning ascribed thereto in the preamble;
|
"Hull
Cover Ratio"
|
means
the ratio, expressed as a percentage, of the Fair Market Value of the
Vessels then mortgaged hereunder divided by the outstanding principal
amount under the Facility;
|
"IAPPC"
|
means
a valid international air pollution prevention certificate for a Vessel
issued under Annex VI;
|
"Indemnitee"
|
shall
have the meaning ascribed thereto in Section 16.6;
|
"Indiana"
|
shall
have the meaning ascribed thereto in the preamble;
|
"INDIANA"
|
means
that certain Vessel owned or to be owned by Indiana, with Hull Number
S-1029 and registered or to be registered under the flag of the Republic
of Malta;
|
"INDIANA
Charter Party
Agreement"
|
means
the bareboat charter agreement between the INDIANA Charterer and Indiana
with respect to the INDIANA with a minimum net charter rate of $14,300 per
day and a minimum duration of 7 years;
|
"INDIANA
Charterer"
|
means
Magellano Marine C.V.;
|
"INDIANA
Refund Guarantee"
|
means
that certain letter of guarantee No. 1372200009194179 dated December 18,
2006 issued by the Refund Guarantor in favor of the Guarantor in
connection with the INDIANA Shipbuilding Contract to be assigned to
Indiana on or prior to the date of the Initial Advance with respect to
Tranche B;
|
"INDIANA
Shipbuilding Contract"
|
means
that certain Shipbuilding Contract for construction of the vessel INDIANA
entered into as of October 31, 2006, between the Builder and the Guarantor
to be novated in favor of Indiana on or prior to the date of the Initial
Advance with respect to Tranche
B;
|
"Initial
Advance"
|
means,
with respect to each Tranche, the first Advance to
|
or
a beneficiary on the date of this Credit Facility Agreement or becomes a
party or a beneficiary hereafter;
|
|
"ISM
Code"
|
means
the International Safety Management Code for the Safe Operating of Ships
and for Pollution Prevention constituted pursuant to Resolution A.741(18)
of the International Maritime Organization and incorporated into the
Safety of Life at Sea Convention and includes any amendments or extensions
thereto and any regulation issued pursuant thereto;
|
"ISPS
Code"
|
means
the International Ship and Port Facility Security Code adopted by the
International Maritime Organization (as the same may be amended from time
to time);
|
"ISSC"
|
means
a valid and current International Ship Security Certificate issued under
the ISPS Code;
|
"Jeke"
|
means
Jeke Shipping Company Limited, a corporation organized and existing under
the laws of the Republic of Liberia;
|
"Lender(s)"
|
shall
have the meaning ascribed thereto in the preamble;
|
"LIBOR"
|
means
the rate for deposits of Dollars for a period equivalent to the relevant
Interest Period at or about 11:00 A.M. (London time) on the second
London Banking Day before the first day of such period as displayed on the
Reuters screen "LIBOR01", or any successor service for the purpose of
displaying the London Interbank rates of major banks for Dollars (the
Reuters screen "LIBOR01" is the display designated as the Reuters screen
"LIBOR01", or such other page as may replace the Reuters screen "LIBOR01"
on that service or such other service or services as may be denominated by
the British Bankers' Association for the purpose of displaying London
Interbank offered rates for Dollar deposits);
provided
,
however
, that if on such date no such rate
is so displayed for the relevant Interest Period, LIBOR for such period
shall be the rate quoted to the Facility Agent by the Reference Bank at
the request of the Facility Agent as the offered rate for deposits of
Dollars in an amount approximately equal to the amount in relation to
which LIBOR is to be determined for a period equivalent to the relevant
Interest Period to prime banks in the London Interbank Market at or about
11:00 A.M. (London time) on
|
the second Banking Day before the first day of such period. | |
"Liquid
Funds"
|
means,
measured at the end of an Accounting Period: (a) cash in hand
or held with banks or other financial institutions of the Guarantor and/or
any other Security Party in Dollars or another currency freely convertible
into Dollars, which is free of any security interest (other than a
permitted security interest and other than ordinary bankers' liens which
have not been enforced or become capable of being enforced); or (b) any
other short-term financial investments which is free of any security
interest (other than a permitted security interest), as stated in the then
most recent accounting information delivered to the Administrative Agent
hereunder;
|
"Majority
Lenders"
|
means,
at any time, Lenders holding an aggregate of more than 60% of the Advances
then outstanding;
|
"Management
Agreement Assignment(s)"
|
means
the assignments in respect of the management agreements with respect to
the Vessels to be executed by the relevant Borrower in favor of the
Security Trustee pursuant to Section 4.3(b), substantially in the form set
out in Exhibit O;
|
"Mandated
Lead Arranger"
|
shall
have the meaning ascribed thereto in the preamble;
|
"Mandatory
Costs"
|
means
the cost of complying with any applicable regulatory requirements of any
relevant regulatory authority;
|
"Margin"
|
means,
with respect to any Advance under a Tranche, (a) 1.75% per annum until and
including the Margin Final Date and (b) after the Margin Final Date, the
Margin as determined between the Lenders and the Borrowers in accordance
with Section 6.1(b);
|
"Margin
Final Date"
|
shall
be August 30, 2010;
|
"Material
Adverse Effect"
|
means
a material adverse effect on (i) the ability of the Borrowers to
repay the Advances or perform any of its obligations hereunder or under
the Note, (ii) the ability of any Security Party to perform its
obligations under any Security Documents or (iii) the business,
property, assets, liabilities, operations, condition (financial or
otherwise) or
|
prospects of the Security Parties taken as a whole; | |
"Minimum
Liquidity Amount"
|
shall
have the meaning ascribed thereto in Section 9.3(c);
|
"Mortgage(s)"
|
means
each of the first preferred ship mortgages (together with any deed of
covenants collateral thereto, if applicable) on each of the Vessels, to be
executed under the laws of a Permitted Jurisdiction by the respective
Borrower, as owner, as listed in Schedule 2 in favor of the Security
Trustee (as trustee for the Lenders) pursuant to Section 4.4(b),
substantially in the form set out in Exhibit D-1 or Exhibit D-2, as
applicable;
|
"MTSA"
|
means
the Maritime and Transportation Security Act, 2002, as amended,
inter
alia
, by Public Law
107-295;
|
"$95M
Credit Agreement"
|
means
that certain senior secured term loan facility agreement dated November 8,
2007 entered into by and among the Collateral Obligors and Noir, as
borrowers, the Guarantor, as guarantor, HSH together with any banks and
financial institutions as are a party thereto (the "$95M Lenders"), as
lenders, and HSH, as agent and security trustee for the $95M Lenders
(together with the $95M Lenders, the "$95M Creditors"), pursuant to which
$95M Lenders made available to the Collateral Obligors and Noir a credit
facility in the amount of $95,000,000 (the "$95M
Facility");
|
"$95M
Mortgage(s)"
|
means
the first preferred mortgages on the VOC GALLANT and the AMALFI, executed
by the relevant Collateral Obligor in favor of HSH as security trustee on
behalf of the $95M Creditors, pursuant to the terms of the $95M Credit
Agreement;
|
"$95M
Transaction Documents"
|
means
each of the $95M Credit Agreement, all promissory notes evidencing the
$95M Facility, the $95M Mortgages and all assignments, pledge agreements,
guaranties and other documents executed as security for the $95M Facility
and the Collateral Obligors' obligations in connection
therewith;
|
"Noir"
|
means
Noir Shipping S.A., a company organized and existing under the laws of the
Republic of the Marshall
Islands;
|
"Note"
|
means
the promissory note to be executed by the Borrowers to the order of the
Administrative Agent pursuant to Section 4.1(b), to evidence the
Facility, substantially in the form set out in
Exhibit A;
|
"Operator"
|
means,
in respect of any Vessel, the Person who is concerned with the operation
of such Vessel and falls within the definition of "Company" set out in
rule 1.1.2 of the ISM Code;
|
"Payment
Dates"
|
means,
with respect to each Tranche, the Initial Payment Date with respect to
such Tranche and the dates falling at three month intervals thereafter,
the last of which is, in respect of Tranche A, the Final Tranche A Payment
Date, in respect of Tranche B, the Final Tranche B Payment Date and, in
respect of Tranche C, the Final Tranche C Payment Date;
|
"Performance
Guarantees"
|
means
the irrevocable performance guarantees to be executed by the relevant
Performance Guarantor in respect of the INDIANA Charter Party Agreement
and the BRITTO Charter Party Agreement, respectively;
|
"Performance
Guarantor(s)"
|
means
Marco Polo Seatrade B.V. in respect of the INDIANA Charter Party Agreement
and Daelim Corp. Co. Ltd. in respect of the BRITTO Charter Party Agreement
and each of them;
|
"Permitted
Jurisdiction"
|
means
the Republic of the Marshall Islands, the Republic of Liberia, the
Republic of Malta or such other jurisdiction as may be approved in writing
by the Majority Lenders;
|
"Person"
|
means
any individual, sole proprietorship, corporation, partnership (general or
limited), limited liability company, business trust, bank, trust company,
joint venture, association, joint stock company, trust or other
unincorporated organization, whether or not a legal entity, or any
government or agency or political subdivision thereof;
|
"Proceeding"
|
shall
have the meaning ascribed thereto in
Section 8.1(i);
|
"Reference
Bank"
|
means
HSH;
|
"Refund
Guarantee(s)"
|
means
the WARHOL Refund Guarantee, the INDIANA Refund Guarantee and the BRITTO
Refund Guarantee, and
|
each of them; | |
"Refund
Guarantor"
|
means
Woori Bank;
|
"Regulation
T"
|
means
Regulation T of the Board of Governors of the Federal Reserve System, as
in effect from time to time;
|
"Regulation
U"
|
means
Regulation U of the Board of Governors of the Federal Reserve System, as
in effect from time to time;
|
"Regulation
X"
|
means
Regulation X of the Board of Governors of the Federal Reserve System, as
in effect from time to time;
|
"Required
Percentage"
|
means,
until the fourth anniversary of this Credit Facility Agreement, one
hundred and twenty percent (120%), and thereafter, one hundred and twenty
five percent (125%) of the amount of the outstanding Facility and the
notional cost or actual cost (if any) as determined by the Lender of
terminating any interest rate swap entered into by the
Borrowers;
|
"Retention
Account"
|
shall
have the meaning ascribed thereto in Section 4.3(d);
|
"Retention
Amount"
|
means,
with respect to any Tranche, an amount equal to one third (1/3) of the
next quarterly principal payment due in accordance with Section 5 hereof
in respect of such Tranche and the relevant fraction of interest accruing
on the relevant Advances during the next month in accordance with Section
6 hereof;
|
"Retention
Date"
|
means
the date one month after the first Initial Advance and at monthly
intervals thereafter;
|
"Secondary
Advance"
|
means
with respect to each Tranche, the second Advance to be made to the
Borrowers for the purpose of financing the third (keel laying) installment
due under the Shipbuilding Contract with respect to the Vessel to which
such Tranche relates;
provided
,
however
, that the Secondary Advance with
respect to Tranche A shall not exceed $6,612,200, the Secondary Advance
with respect to Tranche B shall not exceed $6,682,200 and the Secondary
Advance with respect to Tranche C shall not exceed
$6,682,200;
|
the
Assignment Notices, the Account Pledges, the Collateral Account Pledges,
the Approved Manager's Undertakings and any other documents that may be
executed as security for the Facility and the Borrowers' obligations in
connection therewith;
|
|
"Security
Party(ies)"
|
means
each of the Borrowers, the Collateral Obligors and the
Guarantor;
|
"Security
Trustee"
|
shall
have the meaning ascribed thereto in the preamble;
|
"Shipbuilding
Contract(s)"
|
means
the WARHOL Shipbuilding Contract, the INDIANA Shipbuilding Contract and
the BRITTO Shipbuilding Contract, and each of them;
|
"SMC"
|
means
the safety management certificate issued in respect of each Vessel in
accordance with rule 13 of the ISM code;
|
"Subsidiary(ies)"
|
means,
with respect to any Person, any business entity of which more than 50% of
the outstanding voting stock or other equity interest is owned directly or
indirectly by such Person and/or one or more other Subsidiaries of such
Person and, in the case of the Guarantor, such term shall include, but not
be limited to, the Borrowers, the Collateral Obligors and each of
them;
|
"Swap
Provider"
|
means
HSH;
|
"Tangible
Fixed Assets"
|
means,
measured at the end of an Accounting Period, the value (less depreciation
computed in accordance with GAAP) on a consolidated basis of all tangible
fixed assets of the Security Parties as stated in the then most recent
accounting information delivered to the Administrative Agent
hereunder;
|
"Taxes"
|
means
any present or future income or other taxes, levies, duties, charges,
fees, deductions or withholdings of any nature now or hereafter imposed,
levied, collected, withheld or assessed by any taxing authority
whatsoever, except for taxes on or measured by the overall net income of
each Lender imposed by its jurisdiction of incorporation or applicable
lending office, the United States of America, the State or City of New
York or any governmental subdivision or taxing authority of any thereof or
by any other taxing authority having jurisdiction over such Lender (unless
such jurisdiction is asserted by reason of the
|
activities of any of the Security Parties); | |
"Tertiary
Advance"
|
means
with respect to each Tranche, the third Advance to be made to the
Borrowers for the purpose of financing the fourth (launching) installment
due under the Shipbuilding Contract with respect to the Vessel to which
such Tranche relates;
provided
,
however
, that
the Tertiary Advance with respect to Tranche A shall not exceed
$6,612,200, the Tertiary Advance with respect to Tranche B shall not
exceed $6,682,200 and the Tertiary Advance with respect to Tranche C shall
not exceed $6,682,200;
|
"Total
Assets"
|
means,
measured at the end of an Accounting Period, the aggregate of
Current Assets and Tangible Fixed Assets as stated in the then most recent
financial information delivered to the Administrative Agent
hereunder;
|
"Total
Loss"
|
shall
have the meaning ascribed thereto in the Mortgages;
|
"Tranche(s)"
|
means
any, all or any combination, as the context requires, of Tranche A,
Tranche B and Tranche C;
|
"Tranche
A"
|
means
that portion of the Facility attributable to the WARHOL in an amount equal
to the least of (i) Forty Million One Hundred and Forty Five Thousand Five
Hundred Dollars ($40,145,500), (ii) eighty-five percent (85%) of the
Construction Costs of the WARHOL, and (iii) eighty percent (80%) of the
Fair Market Value of the WARHOL, to be made available to the Borrowers in
four (4) Advances: an Initial Advance, a Secondary Advance, a Tertiary
Advance and a Delivery Advance;
|
"Tranche
B"
|
means
that portion of the Facility attributable to the INDIANA in an amount
equal to the least of (i) Forty Million Five Hundred Seventy Thousand Five
Hundred Dollars ($40,570,500), (ii) eighty-five percent (85%) of the
Construction Costs of the INDIANA, and (iii) eighty percent (80%) of the
Fair Market Value of the INDIANA, to be made available to the Borrowers in
four (4) Advances: an Initial Advance, a Secondary Advance, a Tertiary
Advance and a Delivery Advance;
|
"Tranche
C"
|
means
that portion of the Facility attributable to the BRITTO in an amount equal
to the least of (i) Forty Million Five Hundred Seventy Thousand Five
Hundred Dollars ($40,570,500), (ii) eighty-five percent (85%) of the
|
|
in
favor of Warhol on or prior to the date of the Initial Advance with
respect to Tranche
A;
|
2.
|
REPRESENTATIONS AND
WARRANTIES
|
|
(i)
|
will
be in the sole and absolute ownership of the respective Borrower as set
forth in Schedule 2 and duly registered in such Borrower's name under
the flag of a Permitted Jurisdiction, unencumbered, save and except for
the Mortgage recorded against it and as permitted
thereby;
|
|
(ii)
|
will
be classed in the highest classification and rating for vessels of the
same age and type with the respective Classification Society as set forth
in Schedule 2 without any outstanding recommendations affecting class
and without any qualifications;
|
|
(iii)
|
will
be operationally seaworthy and in every way fit for its intended service;
and
|
|
(iv)
|
will
be insured in accordance with the provisions of the Mortgage recorded
against it and the requirements thereof in respect of such insurances will
have been complied with;
|
|
(i)
|
Each
of the Lenders, relying upon each of the representations and warranties
set out in Section 2, hereby severally and not jointly agrees with
the Borrowers that, subject to and upon the terms of this Credit Facility
Agreement, it will, not later than 11:00 A.M. (New York City time) on the
Drawdown Date of any Advance in respect of each Tranche (except as
provided in subsection (ii) of this Section), make its portion of the
relevant Advance, in Federal or other funds immediately available in New
York City, to the Administrative Agent at its address and to such account
as set forth on Schedule 1 or to such account of the Administrative Agent
most recently designated by it for such purpose by notice to the
Lenders. Unless the Administrative Agent determines that any
applicable condition specified in Section 4 has not been satisfied, the
Administrative Agent will make the funds so received from the Lenders
available to the Borrowers at the aforesaid address, subject to the
receipt of the funds by the Administrative Agent as provided in the
immediately preceding sentence, not later than 10:00A.M. (New York City
time) on the date of such Advance, and in any event as soon as practicable
after receipt. All Advances, subject to the other terms and conditions
hereof, shall be in a minimum amount of One Million Dollars ($1,000,000)
and in multiples of Two Hundred Fifty Thousand Dollars ($250,000). The
Facility and each Tranche hereunder shall be repayable as provided in
Section 5.
|
|
(ii)
|
The
Lenders' obligation to make the relevant Initial Advance in respect of any
Tranche hereunder shall terminate if the conditions precedent provided in
Section 4.1 are not each completed to the satisfaction of the
Administrative Agent upon the date hereof and the Administrative Agent
does not receive a Drawdown Notice in respect of each Initial Advance
under any Tranche within 90 days of the date hereof. The
Lenders' obligation to make the relevant Secondary Advance and/or Tertiary
Advance in respect of any Tranche hereunder shall terminate if the
conditions precedent provided in Section 4.2 are not each completed to the
satisfaction of the Administrative Agent and the Administrative Agent does
not receive a Drawdown Notice in respect of each Secondary
Advance
|
and/or
Tertiary Advance under any Tranche prior to the relevant Delivery Date of
the relevant Vessel. The Lenders' obligation to make the
relevant Delivery Advance in respect of any Tranche hereunder shall
terminate if the conditions precedent provided in Section 4.3 are not each
completed to the satisfaction of the Administrative Agent upon the date of
the relevant Delivery Advance and the Administrative Agent does not
receive a Drawdown Notice in respect of the relevant Delivery Advance at
least three (3) Banking Days before the Final Availability
Date. Notwithstanding the foregoing, the Lenders' obligation to
make any Advance in respect of any Tranche hereunder shall terminate if
the Vessel to which such Tranche relates is not delivered to the Borrowers
by the Final Availability Date with respect to such
Tranche.
|
||
|
(iii)
|
Unless
the Administrative Agent shall have received notice from a Lender prior to
the Drawdown Date of any Advance that such Lender will not make available
to the Administrative Agent such Lender's share of such Advance, the
Administrative Agent may assume that such Lender has made such share
available to the Administrative Agent on the date of such Advance in
accordance with this Section 3.1 and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrowers on such
date a corresponding amount. If and to the extent that such
Lender shall not have so made such share available to the Administrative
Agent, such Lender and the Borrowers (but without duplication and not if
such Lender is an affiliate of the Administrative Agent) severally agree
to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the
date such amount is made available to the Borrowers until the date such
amount is repaid to the Administrative Agent, at (i) in the case of
the Borrowers, a rate per annum equal to the higher of (y) the LIBOR rate
for overnight or weekend deposits plus the Margin and (z) the interest
rate applicable thereto pursuant to Section 6.1 and (ii) in the
case of such Lender, the LIBOR rate for overnight or weekend
deposits. If such Lender shall repay to the Administrative
Agent such corresponding amount, such amount so repaid shall constitute
such Lender's Advance included in such Advance for purposes of this Credit
Facility Agreement as of the date such Advance was
made. Nothing in this subsection (b)(iii) shall be deemed
to relieve any Lender of its obligation to make Advances to the extent
provided in this Credit Facility Agreement. In the event that
the Borrowers are
|
|
|
required
to repay an Advance to the Administrative Agent pursuant to this Section
3.1(b)(iii), as between the Borrowers and the defaulting Lender, the
liability for any breakfunding costs as described in Section 4.6 shall be
borne by the defaulting Lender. If the defaulting Lender has
not paid any such breakage costs upon demand by the Administrative Agent
therefor, the Borrowers shall pay such breakage costs upon demand by the
Administrative Agent and the Borrowers shall be entitled to recover any
such payment for breakfunding costs made by the Borrowers from the
defaulting Lender.
|
4.
|
CONDITIONS
|
|
(i)
|
copies,
certified as true and complete by an officer of each of the Borrowers, the
Collateral Obligors and Noir, of the resolutions of their respective board
of directors and, in the case of the Collateral Obligors and Noir, their
respective shareholders evidencing approval of the
Transaction
|
Documents
to which it is to be a party and authorizing an appropriate officer or
officers or attorney-in-fact or attorneys-in-fact to execute the same on
its behalf, or other evidence of such approvals and
authorizations;
|
||
|
(iii)
|
copies,
certified as true and complete by an officer of the Guarantor, of the
resolutions of the board of directors evidencing approval of the
Transaction Documents to which it is to be a party and authorizing an
appropriate officer or officers or attorney-in-fact or attorneys-in-fact
to execute the same on its behalf, or other evidence of such approvals and
authorizations;
|
|
(iii)
|
copies,
certified as true and complete by an officer of each Security Party and
Noir, of all documents evidencing any other necessary action (including
actions by such parties thereto other than the Security Parties or Noir as
may be required by the Administrative Agent), approvals or consents with
respect to the Transaction
Documents;
|
|
(iv)
|
copies,
certified as true and complete by an officer of each Security Party and
Noir, of the certificate of incorporation and by-laws, certificate of
formation and operating agreement, or equivalent instruments
thereof;
|
|
(v)
|
certificate
of an authorized officer of the Guarantor certifying that it legally and
beneficially owns, directly or indirectly, all of the issued and
outstanding capital stock, or limited liability company membership
interests, as the case may be, of each of the Borrowers, each of the
Collateral Obligors and Noir and that such capital stock or membership
interests are free and clear of any liens, claims, pledges or other
encumbrances whatsoever and have been paid in full;
and
|
|
(vi)
|
certificates
of the jurisdiction of incorporation or formation, as the case may be, of
each Security Party and Noir as to the good standing
thereof;
|
|
(i)
|
this
Credit Facility Agreement;
|
|
(ii)
|
the
Note;
|
|
(iii)
|
the
Consent and Agreement;
|
(iv) | the Guaranty; | |
|
(v)
|
the
Account Pledge with respect to the Equity and Reserve
Account;
|
|
(vi)
|
the
Collateral Account Pledge (which shall also be executed by Noir) with
respect to the 'Retention Account' under the $95 M Credit
Agreement;
|
|
(vii)
|
the
Collateral Account Pledges with respect to the 'Earnings Accounts' under
the $95 M Credit Agreement;
|
|
(viii)
|
the
Collateral Pledge (which shall also be executed by Noir) with respect to
the 'Debt Service Reserve Account' under the $95 M Credit
Agreement;
|
|
(ix)
|
the
Collateral Mortgages;
|
|
(x)
|
the
Assignments of Shipbuilding Contract and Refund
Guarantees;
|
|
(xi)
|
the
Collateral Earnings Assignments;
|
|
(xii)
|
the
Collateral Insurances Assignments (which shall also be executed by the
bareboat charterer, if any, and the manager of the relevant Collateral
Vessel);
|
|
(xiii)
|
the
Collateral Assignments of Charter Party Agreements;
and
|
|
(xiv)
|
the
Assignment Notices with respect to (x), (xi), (xii) and (xiii)
above;
|
|
(i)
|
completed
bank account opening mandates with telephone and fax indemnities to
include the list of the Borrowers' authorized signatories and specimens of
their signatures;
|
|
(ii)
|
certified
list of directors, including titles, business and residential addresses
and dates of birth;
|
|
(iii)
|
certified
true copy of photo identification (i.e. passport or driving license) and
evidence of residential address (i.e. utility bill or bank statement) for
all authorized signatories;
|
(iv) | certificate of ultimate beneficial ownership, certified by the respective secretary of such entity, from the Borrowers with respect to each other Security Party; and | |
|
(v)
|
non-resident
declaration forms;
|
|
(i)
|
copies
of the invoices received from the Builder certified by the relevant
Borrower for the relevant installment due under the Shipbuilding Contract
to which such Advance relates; and
|
|
(ii)
|
instructions
from the relevant Borrower directing the Administrative Agent to release
funds from the Equity and Reserve Account in payment of such Borrower's
equity portion of the third (keel laying) or fourth (launching)
installment, as the case may be, under the relevant Shipbuilding
Contract.
|
|
(i)
|
has
been delivered to the relevant
Borrower;
|
|
(ii)
|
is
in the sole and absolute ownership of the relevant Borrower and duly
registered in such Borrower's name under the flag of
a
|
Permitted Jurisdiction, respectively, unencumbered, save and except for the Mortgage, recorded against it and as otherwise permitted thereby; | ||
|
(iv)
|
is
classed in the highest classification and rating for vessels of the same
age and type with the respective Classification Society as set forth in
Schedule 2 without any material outstanding
recommendations;
|
|
(v)
|
is
operationally seaworthy and in every way fit for its intended service;
and
|
|
(vi)
|
is
insured in accordance with the provisions of the Mortgage recorded against
it and the requirements thereof in respect of such insurance have been
complied with;
|
|
(i)
|
the
Mortgage over its Vessel;
|
|
(ii)
|
the
Insurances Assignment with respect to its Vessel (which shall also be
executed by the relevant Charterer and the manager of the
Vessel);
|
|
(iii)
|
the
Earnings Assignment with respect to its
Vessel;
|
|
(iv)
|
the
Assignment of Charter Party Agreement with respect to its
Vessel;
|
|
(v)
|
the
Management Agreement Assignment with respect to its Vessel (if
applicable);
|
|
(vi)
|
the
Assignment Notices with respect to the above-indicated Assignments;
and
|
|
(vii)
|
Uniform
Commercial Code Financing Statements for filing with the District of
Columbia and in such other jurisdictions as the Administrative Agent may
reasonably require;
|
|
(i)
|
established
with the Administrative Agent (A) an individual earnings account (the
"Earnings Account") into which the Assigned Moneys are to be paid and (B)
a joint retention account (the "Retention Account") into which, on each
Retention Date, the Borrowers shall deposit (from the individual Earnings
Accounts or from such other accounts of the Borrowers) an amount equal to
the Retention Amount shall be transferred;
and
|
|
(ii)
|
duly
executed and delivered to the Administrative Agent (A) the Account Pledge
with respect to the Retention Account and (B) an Account Pledge with
respect to its Earnings Account;
|
|
(i)
|
an
executed management agreement with an Approved Manager, if applicable;
and
|
|
(ii)
|
inspection
reports acceptable to the Administrative Agent by a surveyor appointed by
the Administrative Agent at the Borrowers' expense, of the physical
inspection of the relevant Vessel, provided, however, that the
Administrative Agent may waive this requirement and reserve the right to
have the relevant Vessel inspected after the relevant Advance, if the
Borrowers deliver to the Administrative Agent, prior to the relevant
Advance, its in-house survey report of the relevant Vessel in form and
substance satisfactory to the Administrative Agent, however, all surveys
must be done without undue interference with the operation of the relevant
Vessel;
|
5.
|
REPAYMENT AND
PREPAYMENT
|
(i) |
Tranche
A in forty (40) consecutive installments payable quarterly in arrears
commencing on the date occurring three (3) months after the Delivery
Advance of Tranche A. The amount of each of the installments
shall be as follows: (i) the first through eighth installments shall each
be in the amount of Six Hundred Thousand Dollars ($600,000); (ii) the
ninth through twentieth installments shall each be in the amount of Seven
Hundred Thousand Dollars ($700,000); and (iii) the twenty-first through
fortieth installments shall each be in the amount of Seven Hundred Fifty
Thousand Dollars ($750,000). A balloon payment of Eleven
Million Nine Hundred Forty Five Thousand Five Hundred Dollars
($11,945,500), or such other amount as remains outstanding, shall be
payable on the Final Tranche A Final Payment Date. The amount
of each installment and the balloon payment shall be reduced pro rata in
the event less than the maximum amount of Tranche A is drawn
down;
|
|
|
(ii)
|
Tranche
B in forty (40) consecutive installments payable quarterly in arrears
commencing on the date occurring three (3) months after the Delivery
Advance of Tranche B. The amount of each of the installments
shall be as follows: (i) the first through eighth installments shall each
be in the amount of Six Hundred Thousand Dollars ($600,000); (ii) the
ninth through twentieth installments shall each be in the amount of Seven
Hundred Thousand Dollars ($700,000); (iii) the twenty-first through
fortieth installments shall each be in the amount of Seven Hundred Fifty
Thousand Dollars ($750,000). A balloon payment of Twelve
Million Three Hundred Seventy Thousand Five Hundred Dollars ($12,370,500),
or such other amount as remains outstanding, shall be payable on the Final
Tranche B Final Payment Date. The amount of each installment
and the balloon payment shall be reduced pro rata in the event less than
the maximum amount of Tranche B is drawn down;
and
|
|
(iii)
|
Tranche
C in forty (40) consecutive installments payable quarterly in arrears
commencing on the date occurring three (3) months after the Delivery
Advance of Tranche C. The amount of each of the installments
shall be as follows: (i) the first through eighth installments shall each
be in the amount of Six Hundred Thousand Dollars ($600,000); (ii) the
ninth through twentieth installments shall each be in the amount of Seven
Hundred Thousand Dollars ($700,000); and (iii) the twenty-first through
fortieth installments shall each be in the amount of Seven Hundred Fifty
Thousand Dollars ($750,000). A balloon payment of Twelve
Million Three Hundred Seventy Thousand
|
|
|
Five
Hundred Dollars ($12,370,500), or such other amount as remains
outstanding, shall be payable on the Final Tranche C Payment
Date. The amount of each installment and the balloon payment
shall be reduced pro rata in the event less than the maximum amount of
Tranche C is drawn down.
|
7.
|
PAYMENTS
|
|
(B)
|
Whenever
any payment hereunder or under the Note shall be stated to be due on a day
other than a Banking Day, such payment shall be due and payable on the
next succeeding Banking day unless the next succeeding Banking Day falls
in the following calendar month, in which case it shall be payable on the
immediately preceding Banking Day.
|
8.
|
EVENTS OF
DEFAULT
|
|
(A)
|
first,
in or towards the payment or reimbursement of any expenses or liabilities
incurred by the Finance Parties in connection with the ascertainment,
protection or enforcement of their rights and remedies hereunder, under
the Note and under any of the other Transaction
Documents,
|
|
(B)
|
second,
in or towards payment of any interest owing in respect of the
Facility,
|
|
(C)
|
third,
in or towards repayment of principal owing in respect of the
Facility,
|
|
(D)
|
fourth,
in or towards payment of all other sums which may be owing to the Finance
Parties under the Transaction Documents (other than any Interest Rate
Agreement),
|
|
(E)
|
fifth,
in or towards payments of any amounts then owed under any Interest Rate
Agreement, including, but not limited to, any costs associated with
unwinding any Interest Rate Agreement, on a pari passu basis,
and
|
|
(F)
|
sixth,
the surplus (if any) shall be paid to the Borrowers or to whosoever else
may be entitled thereto.
|
9.
|
COVENANTS
|
|
(i)
|
as
soon as available but not later than one hundred twenty (120) days after
the end of each fiscal year of the Guarantor, complete copies of the
consolidated financial reports of the Guarantor and its Subsidiaries
(together with a Compliance Certificate and a detailed reconciliation of
all of the differences between GAAP as at December 31, 2007 and as at the
time of delivery), all in reasonable detail, which shall include at least
the consolidated balance sheet of the Guarantor and its Subsidiaries as of
the end of such year and the related consolidated statements of income and
sources and uses of funds for such year, which shall be audited reports
prepared by an Acceptable Accounting Firm, and each of the Borrowers shall
provide to each Lender as soon as available but not later than one hundred
eighty (180) days after the end of each fiscal year of such Borrower and
any Charterers, complete copies of the consolidated financial reports of
each of the Borrowers and consolidated, audited financial reports of each
of the Charterers;
|
|
(ii)
|
as
soon as available but not later than forty-five (45) days after the
end of each of the first three quarters of each fiscal year of the
Guarantor, a quarterly interim consolidated balance sheet of the Guarantor
and its Subsidiaries and the related consolidated profit and loss
statements and sources and uses of funds (together with a Compliance
Certificate and a detailed reconciliation of all of the differences
between GAAP as at December 31, 2007 and as at the time of delivery), all
in
|
reasonable detail, unaudited, but certified to be true and complete by the chief financial officer of the Guarantor; | ||
(iii) |
within
ten (10) days of the filing thereof at the email addresses (as provided by
the Administrative Agent from time to time),
electronic
copies of all registration statements and reports on Forms 10-K, 10-Q and
8-K (or their equivalents) and other material filings which the Guarantor
shall have filed with the Securities and Exchange Commission or any
similar governmental authority;
|
|
|
(iv)
|
promptly
upon the mailing thereof to the shareholders of the Guarantor, copies of
all financial statements, reports, proxy statements and other
communications provided to the Guarantor's
shareholders;
|
|
(v)
|
within
ten (10) days of the Security Parties' receipt thereof, copies of all
audit letters or other correspondence from any external auditors including
material financial information in respect of the Security
Parties;
|
|
(vi)
|
such
other statements (including, without limitation, monthly consolidated
statements of operating revenues and expenses), lists of assets and
accounts, budgets, forecasts, reports and other financial information with
respect to its business as the Administrative Agent may from time to time
request, certified to be true and complete by the chief financial officer
of each of the Guarantor;
|
|
(i)
|
the
Mortgages, the Collateral Mortgages, the Assignments, the Collateral
Assignments and other liens in favor of the Security
Trustee;
|
|
(ii)
|
liens,
charges and encumbrances against their respective Vessels or the
Collateral Vessels permitted to exist under the terms of the Mortgages or
the Collateral Mortgages; and
|
|
(iii)
|
liens,
charges and encumbrances on the Collateral Vessels in connection with the
$95M Transaction Documents;
|
10.
|
ASSIGNMENT
|
11.
|
ILLEGALITY, INCREASED
COST, NON-AVAILABILITY, ETC.
|
|
(i)
|
subject
any Lender to any Taxes with respect to its income from the Facility, or
any part thereof; or
|
|
(ii)
|
change
the basis of taxation to any Lender of payments of principal or interest
or any other payment due or to become due pursuant to this Credit Facility
Agreement (other than a change in the basis effected by the jurisdiction
of organization of such Lender, the jurisdiction of the principal place of
business of such Lender, the United States of America, the State or City
of New York or any governmental subdivision or other taxing authority
having jurisdiction over such Lender (unless such jurisdiction
is asserted by reason of the activities of the
Borrowers
or any of the other Security Parties) or such other jurisdiction where the
Facility may be payable); or
|
|
(iii)
|
impose,
modify or deem applicable any reserve requirements or require the making
of any special deposits against or in respect of any assets or liabilities
of, deposits with or for the account of, or loans by, a Lender;
or
|
|
(iv)
|
impose
on any Lender any other condition affecting the Facility or any part
thereof;
|
|
(i)
|
the
Lender shall notify the Administrative Agent and the Borrowers of the
happening of such event, and
|
|
(ii)
|
the
Borrowers agree forthwith upon demand to pay to such Lender such amount as
such Lender certifies to be necessary to compensate such Lender for such
additional cost or such reduction.
|
12.
|
CURRENCY
INDEMNITY
|
13.
|
FEES AND
EXPENSES
|
14.
|
THE
AGENTS
|
|
(A)
|
Obligations of the
Agents
. The obligations of each Agent under the
Transaction Documents are only those expressly set forth herein and
therein.
|
|
(B)
|
No Duty to
Investigate
. No Agent shall at any time be under any
duty to investigate whether an Event of Default, or an event which, with
the giving of notice or lapse of time, or both, would constitute an Event
of Default, has occurred or to investigate the performance of any
Transaction Document by any Security
Party.
|
|
(C)
|
Discretion of the
Agents
. Each Agent shall be entitled to use its
discretion with respect to exercising or refraining from exercising any
rights which may be vested in it by, and with respect to taking or
refraining from taking any action or actions which it may be able to take
under or in respect of, the Transaction Documents, unless the
Administrative Agent shall have been instructed by the Majority Lenders to
exercise such rights or to take or refrain from taking such action;
provided
,
however
, that
no Agent shall be required to take any action which exposes such Agent to
personal liability or which is contrary to this Credit Facility Agreement
or applicable law. Each Agent may refrain from acting in accordance with
the instructions of the Majority Lenders (or, if appropriate, all of the
Lenders) until such Agent has received such security as it may require for
any costs, loss or liability (together with any associated value added
tax) which it may incur in complying with said
instructions.
|
|
(D)
|
Instructions of
Majority Lenders
. Each Agent shall in all cases be fully
protected in acting or refraining from acting under any Transaction
Document in accordance with the instructions of the Majority Lenders (or,
in the case of any Interest Rate Agreement, in accordance with the
instructions of the Swap Provider), and any action taken, or failure to
act pursuant to such instructions, shall be binding on all of the Lenders
any instructions given by the Majority Lenders will be binding on all of
the Lenders.
|
|
(E)
|
Power of
Attorney
. Each Agent has the right to delegate by power
of attorney or otherwise to any Person or Persons all or any of the
rights, trusts, powers, authorities and discretions vested in it by this
Credit Facility Agreement or any other agreement relating hereto on such
terms and
|
|
|
conditions
as such Agent shall think fit and such Agent shall not be bound to
supervise the proceedings or be in any way responsible for any loss
incurred by reason of any misconduct or default on the part of any such
delegate or sub-delegate provided that such Agent shall have acted
reasonably in making such delegation to such delegate and such Agent shall
promptly give notice to each of the Lenders of the appointment of any
delegate or such delegate as
aforesaid.
|
|
(A)
|
to
any Security Party or any other Person or entity as a consequence of any
failure or delay in performance by, or any breach by, any other Lenders or
any other Person of any of its or their obligations under this Credit
Facility Agreement or under any other Transaction
Document;
|
|
(B)
|
to
any Lender or Lenders as a consequence of any failure or delay in
performance by, or any breach by, any Security Party of any of its
respective obligations under this Credit Facility Agreement, under the
Note or under the other Transaction Documents;
or
|
|
(C)
|
to
any Lender or Lenders for any statements, representations or warranties
contained in this Credit Facility Agreement, in any other Transaction
Document or in any document or instrument delivered in connection with the
transaction hereby contemplated; or for the validity, effectiveness,
enforceability or sufficiency of any of the Transaction Documents or any
document or instrument delivered in connection with the transactions
hereby contemplated.
|
|
(A)
|
in
making its decision to enter into this Credit Facility Agreement and to
make its Commitment available hereunder, it has independently taken
whatever steps it considers necessary to evaluate the financial condition
and affairs of the Security Parties, that it has made an independent
credit judgment and that it has not relied upon any statement,
representation or warranty by any other Lender or any Agent;
and
|
|
(B)
|
so
long as any portion of its Commitment remains outstanding, it will
continue to make its own independent evaluation of the financial condition
and affairs of the Security
Parties.
|
16.
|
MISCELLANEOUS
|
17.
|
APPLICABLE LAW,
JURISDICTION AND WAIVERS
|
WARHOL
SHIPPING COMPANY LIMITED
|
|||
By:
|
/s/ Gary Wolfe | ||
Name:
Gary Wolfe
|
|||
Title:
Attorney-in-Fact
|
|||
INDIANA
SHIPPING COMPANY LIMITED
|
|||
By:
|
/s/ Gary Wolfe | ||
Name:
Gary Wolfe
|
|||
Title:
Attorney-in-Fact
|
|||
BRITTO
SHIPPING COMPANY LIMITED
|
|||
By:
|
/s/ Gary Wolfe | ||
Name:
Gary Wolfe
|
|||
Title:
Attorney-in-Fact
|
|||
HSH
NORDBANK AG,
as
Mandated Lead Arranger, Underwriter, Swap Provider, Administrative Agent
and Security Trustee
|
|||
By:
|
/s/ Matthew Cooley | ||
Name:
Matthew Cooley
|
|||
Title:
Attorney-in-Fact
|
|||
The
Lenders:
|
|||
HSH
NORDBANK AG
|
|||
By:
|
/s/ Matthew Cooley | ||
Name:
Matthew Cooley
|
|||
Title:
Attorney-in-Fact
|
|||
Guarantor:
|
|||
TOP
SHIPS INC.
|
|||
By:
|
/s/ Gary Wolfe | ||
Name:
Gary Wolfe
|
|||
Title:
Attorney-in-Fact
|
|||
Collateral
Obligors:
|
|||
AMALFI
SHIPPING COMPANY LIMITED
|
|||
By:
|
/s/ Gary Wolfe | ||
Name:
Gary Wolfe
|
|||
Title:
Attorney-in-Fact
|
|||
JEKE
SHIPPING COMPANY LIMITED
|
|||
By:
|
/s/ Gary Wolfe | ||
Name:
Gary Wolfe
|
|||
Title:
Attorney-in-Fact
|
|||
Lenders | Commitment | |
HSH
Nordbank AG
Gerhart-Hauptmann-Platz
50
20095
Hamburg, Germany
Attn:
Shipping, Greek Clients
Facsimile
No.: + 49 40 3333 34121
|
$121,286,500
|
|
Name of Vessel
|
Owner
|
Hull Number
|
Flag
|
DWT
|
Classification Society
|
WARHOL
|
Warhol
Shipping Company Limited
|
S-1025
|
Liberia
|
50,000
|
Det
Norske Veritas ("DNV")
|
INDIANA
|
Indiana
R Shipping Company Limited
|
S-1029
|
Malta
|
50,000
|
DNV
|
BRITTO
|
Britto
Shipping Company Limited
|
S-1031
|
Liberia
|
50,000
|
DNV
|
Clause
|
Page
|
|
1
|
INTERPRETATION
|
1
|
2
|
FACILITY
|
15
|
3
|
POSITION
OF THE LENDERS AND SWAP BANKS
|
15
|
4
|
DRAWDOWN
|
16
|
5
|
INTEREST
|
18
|
6
|
INTEREST
PERIODS
|
20
|
7
|
DEFAULT
INTEREST
|
20
|
8
|
REPAYMENT
AND PREPAYMENT
|
21
|
9
|
CONDITIONS
PRECEDENT
|
23
|
10
|
REPRESENTATIONS
AND WARRANTIES
|
25
|
11
|
GENERAL
UNDERTAKINGS
|
28
|
12
|
CORPORATE
UNDERTAKINGS
|
34
|
13
|
INSURANCE
|
35
|
14
|
SHIP
COVENANTS
|
39
|
15
|
SECURITY
COVER
|
42
|
16
|
PAYMENTS
AND CALCULATIONS
|
44
|
17
|
APPLICATION
OF RECEIPTS
|
46
|
18
|
APPLICATION
OF EARNINGS
|
47
|
19
|
EVENTS
OF DEFAULT
|
47
|
20
|
FEES
AND EXPENSES
|
52
|
21
|
INDEMNITIES
|
54
|
22
|
NO
SET-OFF OR TAX DEDUCTION
|
55
|
23
|
ILLEGALITY,
ETC
|
56
|
24
|
INCREASED
COSTS
|
57
|
25
|
SET
OFF
|
58
|
26
|
TRANSFERS
AND CHANGES IN LENDING OFFICES
|
59
|
27
|
VARIATIONS
AND WAIVERS
|
62
|
28
|
NOTICES
|
63
|
29
|
JOINT
AND SEVERAL LIABILITY
|
65
|
30
|
SUPPLEMENTAL
|
66
|
31
|
LAW
AND JURISDICTION
|
66
|
(1)
|
BANKSY SHIPPING COMPANY
LIMITED
and
HONGBO
SHIPPING COMPANY LIMITED
, as joint and
several
Borrowers
;
|
(2)
|
THE BANKS AND FINANCIAL
INSTITUTIONS
listed in Schedule 1, as
Lenders
;
|
(3)
|
THE BANKS AND FINANCIAL
INSTITUTIONS
listed in Schedule 2, as
Swap
Banks
;
|
(4)
|
DVB BANK AMERICA N.V.
,
as
Agent
;
and
|
(5)
|
DVB BANK AMERICA N.V.
,
as
Security
Trustee
.
|
(A)
|
The
Lenders have agreed to make available to the Borrowers a facility of up to
$80,000,000 for the purpose of part financing the purchase price of the
Ships which are to be constructed by the Builder for, and purchased by,
the Borrowers.
|
(B)
|
The
Swap Banks may enter into interest rate swap transactions with the
Borrowers from time to time to hedge the Borrowers' exposure under this
Agreement to interest rate
fluctuations.
|
(C)
|
The
Lenders and the Swap Banks have agreed to share
pari passu
in the
security to be granted to the Security Trustee pursuant to this
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 Accounts in the Agreed
Form;
|
|
"
Advance
" means the
principal amount of each borrowing by the Borrowers under this
Agreement;
|
|
"
Affected Lender
" has the
meaning given in Clause 5.7;
|
|
"
Agency and Trust
Agreement
" means the agency and trust agreement dated the same date
as this Agreement and made between the same
parties;
|
|
"
Agent
" means DVB Bank
America N.V., acting in such capacity through its office at Zeelandia
Office Park, Kaya W.F.G. Mensing 14, Curaçao, Netherlands Antilles, or any
successor of it appointed under clause 5 of the Agency and Trust
Agreement;
|
|
"
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 provisions of any Finance
Document;
|
|
"
Approved Manager
" means,
in relation to a Ship, any company which the Agent may, with the
authorisation of the Majority Lenders, approve from time to time as the
technical or commercial manager of the
Ship;
|
|
(a)
|
30
September 2009 (or such later date as the Agent may, with the
authorisation of the Lenders, agree with the Borrowers);
or
|
|
(b)
|
if
earlier, the date on which the Total Commitments are fully borrowed,
cancelled or terminated;
|
|
"
Borrowers
" means each of
Banksy Shipping Company Limited ("
Banksy
") and Hongbo
Shipping Company Limited ("
Hongbo
"), each being a
company incorporated in the Republic of Liberia whose registered office is
at 80 Broad Street, Monrovia, Liberia (and includes their respective
successors);
|
|
"
Builder
" means
SPP Plant & Shipbuilding Co., Ltd. of the Republic of
Korea;
|
|
"
Business Day
" means a
day on which banks are open in Curaçao, Frankfurt, London and Piraeus 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 Ship, an assignment of the Charter and the Charter
Guarantee in the Agreed Form;
|
|
"
Charters
" means:
|
|
(a)
|
in
relation to Ship A, the "hell and high water" bareboat charter dated 27
May 2008 and made between the Guarantor (or its nominee) and Magellano
Marine C.V. for a period of 7 years on a rate of US$14,300 (net) per day
(with the Borrower having options to extend the period for an additional
year on a rate of US$14,800 (net) per day, thereafter for an additional
year on a rate of US$15,300 (net) per day and thereafter for an additional
year on a rate of US$15,800 (net) per day);
and
|
|
(b)
|
in
relation to Ship B, the "hell and high water" bareboat charter dated 8
April 2008 and made between the Guarantor (or its guaranteed nominee) and
Daelim H&L Co., Ltd. for a period of 10 years on a rate of US$14,550
(net) per day,
|
|
each
in a form approved by the Lenders and as supplemented and/or amended from
time to time and, in the singular, means either of
them;
|
|
"
Charter
Guarantees
" means:
|
|
(a)
|
in
relation to the Charter of Ship A, the guarantee dated 27 May 2008 and
issued by Marco Polo Seatrade B.V. in favour of the Guarantor;
and
|
|
(b)
|
in
relation to the Charter of Ship B, the guarantee dated 21 April 2008 and
issued by Daelim Corporation in favour of the Guarantor (or its guaranteed
nominee),
|
|
each
in a form approved by the Lenders and as supplemented and/or amended from
time to time and, in the singular, means either of
them;
|
|
"
Charter
Guarantor
" means, in relation to a Charter Guarantee,
the party which has issued by that Charter Guarantor in favour of the
relevant Borrower;
|
|
"
Charterer
" means,
in relation to a Charter, the party which has entered into that Charter
with the relevant Borrower;
|
|
"
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
|
|
"
Confirmation
" and "
Early Termination Date
",
in relation to any continuing Designated Transaction, have the meanings
given in the relevant Master
Agreement;
|
|
"
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
the Agent, the Security Trustee, any Lender or any Swap Bank, whether as
at the date of this Agreement or at any later
time;
|
|
(a)
|
it
is entered into by the Borrowers pursuant to a Master Agreement with a
Swap Bank which, at the time the Transaction is entered into, is also a
Lender;
|
|
(b)
|
its
purpose is the hedging of the Borrowers' exposure under this Agreement to
fluctuations in LIBOR arising from the funding of the Loan (or any part
thereof) for a period expiring no later than the final Repayment Date;
and
|
|
(c)
|
it
is designated by the Borrowers, by delivery by the Borrowers to the Agent
of a notice of designation in the form set out in Schedule 6, as a
Designated Transaction for the purposes of the Finance
Documents;
|
|
"
Dollars
" and "
$
" means the lawful
currency for the time being of the United States of
America;
|
|
"
Drawdown Date
" means, in
relation to an Advance, the date requested by the Borrowers for the
Advance to be made, or (as the context requires) the date on which the
Advance is actually made;
|
|
"
Drawdown Notice
" means a
notice in the form set out in Schedule 3 (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 any Borrower or the Security Trustee in the event of
requisition of a 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 a 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 a 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 the
Ship;
|
|
"
Earnings Account
" means,
in relation to a Ship, an account in the name of the Borrower owning the
Ship with a bank or financial institution approved by the Agent which is
designated by the Agent as the Earnings Account in relation to 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,
|
|
and
"
claim
" means a
claim for damages, compensation, fines, penalties or any other payment of
any kind whether or not similar to the foregoing; an order or direction to
take, or not to take, certain action or to desist from or suspend certain
action; and any form of enforcement or regulatory action, including the
arrest or attachment of any asset;
|
|
"
Environmental Incident
"
means:
|
|
(a)
|
any
release of Environmentally Sensitive Material from a Ship;
or
|
|
(b)
|
any
incident in which Environmentally Sensitive Material is released from a
vessel other than a Ship and which involves a collision between a Ship and
such other vessel or some other incident of navigation or operation, in
either case, in connection with which a Ship is actually or potentially
liable to be arrested, attached, detained or injuncted and/or a Ship
and/or any Borrower and/or any operator or manager of a Ship is at fault
or allegedly at fault or otherwise liable to any legal or administrative
action; or
|
|
(c)
|
any
other incident in which Environmentally Sensitive Material is released
otherwise than from a Ship and in connection with which a Ship is actually
or potentially liable to be arrested and/or where any Borrower and/or any
operator or manager of a Ship is at fault or allegedly at fault or
otherwise liable to any legal or administrative
action;
|
|
"
Environmental Law
" means
any law relating to pollution or protection of the environment, to the
carriage of Environmentally Sensitive Material or to actual or threatened
releases of Environmentally Sensitive
Material;
|
|
"
Environmentally Sensitive
Material
" means oil, oil products and any other substance
(including any chemical, gas or other hazardous or noxious substance)
which is (or is capable of being or becoming) polluting, toxic or
hazardous;
|
|
"
Fee
Letter
" means a fee letter signed or to be signed on or
around the date of this Agreement between DVB Bank America N.V., the
Borrowers and the Guarantor in the Agreed
Form;
|
|
"
Finance Documents
"
means:
|
|
(a)
|
this
Agreement;
|
|
(b)
|
the
Fee Letter;
|
|
(c)
|
the
Agency and Trust Agreement;
|
|
(d)
|
the
Guarantee;
|
|
(e)
|
the
Master Agreement Assignments;
|
|
(f)
|
the
Account Security Deeds;
|
|
(g)
|
the
Shares Pledges;
|
|
(h)
|
the
Predelivery Security Assignments;
|
|
(i)
|
the
Mortgages;
|
|
(j)
|
the
General Assignments;
|
|
(k)
|
the
Charter Assignments;
|
|
(l)
|
the
Quadripartite Agreements; and
|
|
(m)
|
any
other document (whether creating a Security Interest or not) which is
executed at any time by any Borrower or any other person as security for,
or to establish any form of subordination or priorities arrangement in
relation to, any amount payable to the Lenders and/or the Swap Banks 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 (including, without limitation, off-balance sheet
liabilities such as remaining obligations under any leasing/chartering
arrangement (whether or not 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;
|
|
"
GAAP
" means generally
accepted accounting principles in the United States of
America;
|
|
"
General Assignment
"
means, in relation to a Ship, a general assignment of the Earnings, the
Insurances and any Requisition Compensation in the Agreed
Form;
|
|
"
Guarantee
" means a
guarantee issued by the Guarantor in favour of the Security Trustee in the
Agreed Form;
|
|
"
Guarantor
" means Top
Ships Inc. (formerly known as Top Tankers Inc.), a corporation
incorporated in the Republic of the Marshall Islands whose registered
office is at Trust Company Complex, Ajeltake Island, P.O. Box 1405,
Majuro, Marshall Islands MH96960;
|
|
"
IAPPC
" means
an International Air Pollution Prevention Certificate for the purposes of
MARPOL Annex VI, "Regulations for the Prevention of Air Pollution from
Ships";
|
|
"
Insurances
" means, in
relation to a Ship:
|
|
(a)
|
all
policies and contracts of insurance, including entries of the Ship in any
protection and indemnity or war risks association, which are effected in
respect of the Ship, its Earnings or otherwise in relation to it;
and
|
|
(b)
|
all
rights and other assets relating to, or derived from, any of the
foregoing, including any rights to a return of a
premium;
|
|
"
Interest Period
" means a
period determined in accordance with Clause
6;
|
|
"
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);
|
|
"
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 Agent
under Clause 26.14) or its transferee, successor or
assign;
|
|
(a)
|
the
rate per annum equal to the offered quotation for deposits in Dollars for
a period equal to, or as near as possible equal to, that period which
appears on REUTERS BBA Page LIBOR 01 at or about 11.00 a.m. (London time)
on the Quotation Date for that period (and, for the purposes of this
Agreement, "
REUTERS BBA
Page LIBOR 01
" means the display designated as "Page 01" on the
REUTERS Service or such other page as may replace Page 01 on
that
|
|
(b)
|
if
no rate is quoted on REUTERS BBA Page LIBOR 01, the rate per annum
determined by the Agent to be the arithmetic mean (rounded upwards, if
necessary, to the nearest one-sixteenth of one per cent.) of the rates per
annum notified to the Agent by each Reference Bank as the rate at which
deposits in Dollars are offered to that Reference Bank by leading banks in
the London Interbank Market at that Reference Bank's request at or about
11.00 a.m. (London time) on the Quotation Date for that period for a
period equal to that period and for delivery on the first Business Day of
it;
|
|
"
Loan
" means the
principal amount for the time being outstanding under this
Agreement;
|
|
"
Major Casualty
" means,
in relation to a Ship, any casualty to the Ship in respect of which the
claim or the aggregate of the claims against all insurers, before
adjustment for any relevant franchise or deductible, exceeds $500,000 or
the equivalent in any other
currency;
|
|
"
Majority Lenders
"
means:
|
|
(a)
|
before
an Advance has been made, Lenders whose Commitments total more than 67 per
cent. of the Total Commitments; and
|
|
(b)
|
after
an Advance has been made, Lenders whose Contributions total more than 67
per cent. of the Loan;
|
|
"
Margin
" means 1.55 per
cent. per annum;
|
|
"
Mortgages
"
means:
|
|
(a)
|
in
relation to Ship A, the first priority Maltese ship mortgage on that Ship
and deed of covenant collateral thereto;
and
|
|
(b)
|
in
relation to Ship B, the first preferred Liberian ship mortgage on that
Ship,
|
|
each
in the Agreed Form and, in the singular, means either of
them;
|
|
"
Negotiation Period
" has
the meaning given in Clause
5.10;
|
|
"
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 a Ship not prohibited by this
Agreement;
|
|
(e)
|
liens
for master's disbursements incurred in the ordinary course of trading and
any other lien arising by operation of law or otherwise in the ordinary
course of the operation, repair or maintenance of a Ship, provided such
liens do not secure amounts more than 30 days overdue (unless the
overdue amount is being contested by the relevant Borrower 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 a
Borrower 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);
|
|
"
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 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 a
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 determination of the Majority Lenders
and/or the satisfaction of any other condition, would constitute an Event
of Default;
|
|
"
Predelivery Security
Assignment
" means, in relation to a Ship, an assignment
of the Shipbuilding Contract for that Ship and of the Refund Guarantee in
relation to that Shipbuilding Contract in the Agreed
Form;
|
|
"
Principal
Subsidiaries
" means each company which has total assets
which are valued at 5 per cent. or more of the value of the consolidated
total assets of the Guarantor and its subsidiaries, as calculated by
reference to the then latest audited annual accounts of such subsidiary
and the Guarantor and, in the singular, means any of
them;
|
|
"
Quadripartite Agreement
"
means, in relation to a Ship, an agreement between the Borrower owning or
to own that Ship, the Charterer of that Ship, the relevant Charter
Guarantor and the Security Trustee in the Agreed
Form;
|
|
"
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, DVB Bank America
N.V.;
|
|
"
Refund
Guarantees
" means:
|
|
(a)
|
in
relation to the Shipbuilding Contract for Ship A, the guarantee dated 18
December 2006 and issued by the Refund Guarantor in favour of the
Guarantor together with an agreement made or to be made between the Refund
Guarantor, the Guarantor and Banksy pursuant to which Banksy will become
the beneficiary under such guarantee;
and
|
|
(b)
|
in
relation to the Shipbuilding Contract for Ship B, the guarantee dated 18
December 2006 and issued by the Refund Guarantor in favour of the
Guarantor together with an agreement made or to be made between the Refund
Guarantor, the Guarantor and Hongbo pursuant to which Hongbo will become
the beneficiary under such
guarantee,
|
|
each
in a form approved by the Lenders and as supplemented and/or amended from
time to time and, in the singular, means either of
them;
|
|
"
Refund
Guarantor
" means Woori Bank of the Republic of
Korea;
|
|
"
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 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
";
|
|
"
Secured Liabilities
"
means all liabilities which the Borrowers, the Security Parties or any of
them have, at the date of this Agreement or at any later time or times,
under or in connection with any Finance Document or any Designated
Transaction under any Master Agreement or any judgment relating to any
Finance Document or any Designated Transaction under any Master Agreement;
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
the Guarantor, each party to each Quadripartite Agreement (except a
Creditor Party) and any other person (except a Creditor Party) 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 Borrowers, the Security Parties and the
Lenders that:
|
|
(a)
|
all
amounts which have become due for payment by any Borrower or any Security
Party under the Finance Documents and the Master Agreements have been
paid;
|
|
(b)
|
no
amount is owing or has accrued (without yet having become due for payment)
under any Finance Document or any Master
Agreement;
|
|
(c)
|
neither
any 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 or a Master Agreement;
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 or a Master Agreement would be set aside, or would have
to be reversed or adjusted, in any present or possible future bankruptcy
of a Borrower or a Security Party or in any present or possible future
proceeding relating to a Finance Document or a Master Agreement or any
asset covered (or previously covered) by a Security Interest created by a
Finance Document;
|
|
"
Security
Trustee
" means DVB Bank America N.V., acting in such
capacity through its office at Zeelandia Office Park, Kaya W.F.G. Mensing
14, Curaçao, Netherlands Antilles, or any successor of it appointed under
clause 5 of the Agency and Trust
Agreement;
|
|
"
Servicing Bank
" means
the Agent or the Security Trustee;
|
|
"
Shares Pledge
" means, in
relation to a Borrower, a deed creating security over the share capital of
that Borrower in the Agreed Form;
|
|
"
Ship
" means each
of:
|
|
(a)
|
"
Ship A
", being the
newbuilding IMO III, double hull product tanker of 50,000 dwt which is to
be constructed by the Builder for, and purchased by, Banksy under the
Shipbuilding Contract in respect of hull number S-1027 and upon delivery
registered in the name of Banksy under Maltese flag;
and
|
|
(b)
|
"
Ship B
", being the
newbuilding IMO III, double hull product tanker of 50,000 dwt which is to
be constructed by the Builder for, and purchased by, Hongbo under the
Shipbuilding Contract in respect of hull number S-1033 and upon delivery
registered in the name of Hongbo under Liberian
flag;
|
|
and,
in the singular, means either of
them;
|
|
"
Shipbuilding
Contracts
" means:
|
|
(a)
|
the
shipbuilding contract dated 31 October 2006 and made between the Builder
and the Guarantor for the construction by the Builder of a newbuilding IMO
III, double hull product tanker of 50,000 dwt with hull number S-1027 and
its purchase by Guarantor together with a novation agreement made or to be
made between the Builder, the Guarantor and Banksy pursuant to which the
Guarantor's rights and obligations under such shipbuilding contract are
novated in favour of Banksy; and
|
|
(b)
|
the
shipbuilding contract dated 31 October 2006 and made between the Builder
and the Guarantor for the construction by the Builder of a newbuilding IMO
III, double hull product tanker of 50,000 dwt with hull number S-1033 and
its purchase by Guarantor together with a novation agreement made or to be
made between the Builder, the Guarantor and Hongbo pursuant to which the
Guarantor's rights and obligations under such shipbuilding contract are
novated in favour of Hongbo;
|
|
"
Total Loss
" means, in
relation to a Ship:
|
|
(a)
|
actual,
constructive, compromised, agreed or arranged total loss of the
Ship;
|
|
(b)
|
any
expropriation, confiscation, requisition or acquisition of the Ship,
whether for full consideration, a consideration less than its proper
value, a nominal consideration or without any consideration, which is
effected by any government or official authority or by any person or
persons claiming to be or to represent a government or official authority
(excluding a requisition for hire for a fixed period not exceeding 1 year
without any right to an extension) unless it is within 1 month redelivered
to the full control of the Borrower owning the Ship;
and
|
|
(c)
|
any
arrest, capture, seizure or detention of the Ship (including any hijacking
or theft) unless it is within 1 month redelivered to the full control of
the Borrower owning the Ship;
|
|
"
Total Loss Date
" means,
in relation to a Ship:
|
|
(a)
|
in
the case of an actual loss of the Ship, the date on which it occurred or,
if that is unknown, the date when the Ship was last heard
of;
|
|
(b)
|
in
the case of a constructive, compromised, agreed or arranged total loss of
the Ship, the earliest of:
|
|
(i)
|
the
date on which a notice of abandonment is given to the insurers;
and
|
|
(ii)
|
the
date of any compromise, arrangement or agreement made by or on behalf of
the Borrower owning the Ship with the Ship's insurers in which the
insurers agree to treat the Ship as a total loss;
and
|
|
(a)
|
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;
|
|
"
Tranche
" means,
in relation to a Ship, the aggregate of the Advances relating to that
Ship;
|
|
"
Transaction
" has
the meaning given in each Master
Agreement;
|
|
"
Transaction
Documents
" means the Shipbuilding Contracts, the
Charters and the Charter Guarantees and, in the singular, means any of
them;
|
|
"
Transfer
Certificate
" has the meaning given in Clause 26.2;
and
|
|
"
Trust Property
" has the
meaning given in clause 3.1 of the Agency and Trust
Agreement.
|
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 and whether acting alone or in concert with
one or more other parties) 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 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 the Ship in consequence of its insured value being less than
the value at which the Ship is assessed for the purpose of such
claims;
|
|
"
expense
" means any kind
of cost, charge or expense (including all legal costs, charges and
expenses) and any applicable value added or other
tax;
|
|
"
law
" includes any order
or decree, any form of delegated legislation, any treaty or international
convention and any regulation or resolution of the Council of the European
Union, the European Commission, the United Nations or its Security
Council;
|
|
"
legal or administrative
action
" means any legal proceeding or arbitration and any
administrative or regulatory action or
investigation;
|
|
"
liability
" includes
every kind of debt or liability (present or future, certain or
contingent), whether incurred as principal or surety or
otherwise;
|
|
"
months
" shall
be construed in accordance with Clause
1.3;
|
|
"
obligatory insurances
"
means, in relation to a Ship, all insurances effected, or which the
Borrower owning the Ship is obliged to effect, under Clause 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, blocking, trapping
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 are indirectly attributable to P;
or
|
(b)
|
P
has direct or indirect control over a majority of the voting rights
attaching to the issued shares of S;
or
|
(c)
|
P
has the direct or indirect power to appoint or remove a majority of the
directors of S; or
|
(d)
|
P
otherwise has the direct or indirect power to ensure that the affairs of S
are conducted in accordance with the wishes of
P,
|
|
and
any company of which S is a subsidiary is a parent company of
S.
|
1.5
|
General
Interpretation.
In this
Agreement:
|
(a)
|
references
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 a loan facility not exceeding
$80,000,000 available to the
Borrowers.
|
2.2
|
Lenders' participations in
Advances.
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
Advances.
The Borrowers undertake with each Creditor
Party to use each Advance only for the purpose stated in the preamble to
this Agreement.
|
3
|
POSITION
OF THE LENDERS AND SWAP BANKS
|
3.1
|
Interests
several.
The rights of the Lenders and of the Swap Banks
under this Agreement and under the Master Agreements are
several.
|
3.2
|
Individual right of
action.
Each Lender and each Swap Bank shall be entitled
to sue for any amount which has become due and payable by the Borrowers to
it under this Agreement or under a Master Agreement without joining the
Agent, the Security Trustee, any other Lender or any other Swap Bank as
additional parties in the
proceedings.
|
3.3
|
Proceedings requiring Majority
Lenders' consent.
Except as provided in Clause 3.2, no
Lender and no Swap Bank may commence proceedings against any Borrower or
any Security Party in connection with a Finance Document or a Master
Agreement without the prior consent of the Majority
Lenders.
|
3.4
|
Obligations
several.
The obligations of the Lenders under this
Agreement and of the Swap Banks under the Master Agreement to which each
is a party are several; and a failure of a Lender to perform its
obligations under this Agreement or a failure of a Swap Bank to perform
its obligations under the Master Agreement to which it is a party shall
not result in:
|
(a)
|
the
obligations of the other Lenders or Swap Banks being increased;
nor
|
(b)
|
any
Borrower, any Security Party, any other Lender or any other Swap Bank
being discharged (in whole or in part) from its obligations under any
Finance Document or under any Master
Agreement,
|
|
and
in no circumstances shall a Lender or a Swap Bank have any responsibility
for a failure of another Lender or another Swap Bank to perform its
obligations under this Agreement or a Master
Agreement.
|
4
|
DRAWDOWN
|
4.1
|
Request for
Advance.
Subject to the following conditions, the
Borrowers 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)
|
a
Drawdown Date has to be a Business Day during the Availability
Period;
|
(b)
|
each
Advance shall relate to either Ship A or Ship
B;
|
(c)
|
there
shall be no more than 5 Advances relating to each Ship and the aggregate
of such Advances relating to a Ship shall not exceed
$40,000,000;
|
(d)
|
the
amount of the first Advance relating to a Ship shall not exceed the lesser
of:
|
|
(i)
|
70
per cent. of the net amount of the instalment of the purchase price
already paid to the Builder under article 10(b)(i) (refund guarantee
arrangement) of the Shipbuilding Contract for that
Ship;
|
|
(ii)
|
$5,011,650;
or
|
|
(iii)
|
such
lesser amount required to ensure that, if the ratio set out in Clause
15.1(a) were applied immediately following the making of the Advance, the
Borrowers would not be obliged to provide additional security or prepay
part of the Loan under that Clause;
|
(e)
|
the
amount of the second Advance relating to a Ship shall not exceed the
lesser of:
|
|
(i)
|
70
per cent. of the net amount of the instalment of the purchase price due to
the Builder under article 10(b)(ii) (steel cutting) of the Shipbuilding
Contract for that Ship on the relevant Drawdown
Date;
|
|
(ii)
|
$5,011,650;
or
|
|
(iii)
|
such
lesser amount required to ensure that, if the ratio set out in Clause
15.1(a) were applied immediately following the making of the Advance, the
Borrowers would not be obliged to provide additional security or prepay
part of the Loan under that Clause;
|
(f)
|
the
amount of the third Advance relating to a Ship shall not exceed the lesser
of:
|
|
(i)
|
70
per cent. of the net amount of the instalment of the purchase price due to
the Builder under article 10(b)(iii) (keel laying) of the Shipbuilding
Contract for that Ship on the relevant Drawdown
Date;
|
|
(ii)
|
$6,682,200;
or
|
|
(iii)
|
such
lesser amount required to ensure that, if the ratio set out in Clause
15.1(a) were applied immediately following the making of the Advance, the
Borrowers
|
(g)
|
the
amount of the fourth Advance relating to a Ship shall not exceed the
lesser of:
|
|
(i)
|
70
per cent. of the net amount of the instalment of the purchase price due to
the Builder under article 10(b)(iv) (launching) of the Shipbuilding
Contract for that Ship on the relevant Drawdown
Date;
|
|
(ii)
|
$6,682,200;
or
|
|
(iii)
|
such
lesser amount required to ensure that, if the ratio set out in Clause
15.1(a) were applied immediately following the making of the Advance, the
Borrowers would not be obliged to provide additional security or prepay
part of the Loan under that Clause;
|
(h)
|
the
amount of the final Advance relating to a Ship shall not exceed the lesser
of:
|
|
(i)
|
116
per cent. of the net amount of the instalment of the purchase price due to
the Builder under article 10(b)(v) (delivery) of the Shipbuilding Contract
for that Ship on the relevant Drawdown
Date;
|
|
(ii)
|
$16,612,300;
|
|
(iii)
|
together
with the aggregate amount of the previous Advances relating to that Ship,
75 per cent. of the market value (determined as provided in Clause 15.3 on
the basis of a valuation carried out not more than 2 weeks prior to the
Drawdown Date) of that Ship; or
|
|
(iv)
|
such
lesser amount as the Lenders may determine in their absolute discretion if
the Borrowers have not provided all of the documents and evidence set out
in Clauses 11.28 and 11.29 in form and substance satisfactory to the Agent
and its lawyers; and
|
(i)
|
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 a
director, officer or attorney-in-fact of each Borrower; and once served, a
Drawdown Notice cannot be revoked without the prior consent of the Agent,
acting on the authority 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 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 Borrowers the amounts
which the Agent receives from the Lenders under Clause 4.5; and that
payment to the Borrowers shall be
made:
|
(a)
|
to
the account which the Borrowers specify 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 Borrowers shall at that
time become indebted, as principal and direct obligors, 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 the Loan in respect of each Interest Period shall be paid by
the Borrowers 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 the Loan in respect of an Interest Period shall be
the aggregate of the Margin 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 Borrowers 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 Reference Bank which is a Lender 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 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
rate is quoted on REUTERS BBA Page LIBOR 01 and the Reference Banks do
not, before 1.00 p.m. (London time) on the Quotation Date, 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
|
(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
Borrowers and each of the Lenders and each of the Swap Counterparties
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; and
|
(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 Borrowers, the Agent and the Lenders
or (as the case may be) the Affected Lender and the Swap Counterparties
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; 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 Borrowers do not agree with an
interest rate set by the Agent under Clause 5.12, the Borrowers may give
the Agent not less than 15 Business Days' notice of their 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 Borrowers' 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; and
|
(b)
|
on
the last Business Day of the interest period set by the Agent, the
Borrowers 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.
|
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 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)
|
3,
6, 9 or 12 months as notified by the Borrowers to the Agent not later than
11.00 a.m. (London time) 5 Business Days before the commencement of the
Interest Period
Provided
that
the Borrowers shall only be permitted to select the same
period for both Tranches; or
|
(b)
|
in
the case of the first Interest Period applicable to the second Advance
under a Tranche, a period ending on the last day of the Interest Period
applicable to the first Advance under that Tranche then current, whereupon
both Advances under that Tranche shall be consolidated and treated as a
single Advance under that Tranche;
|
(c)
|
3
months, if the Borrowers fail to notify the Agent by the time specified in
paragraph (a); or
|
(d)
|
such
other period as the Agent may, with the authorisation of the Lenders,
agree with the Borrowers.
|
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
Borrowers have 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 third Business Day before the commencement of the Interest
Period that it is not satisfied that deposits in Dollars for a period
equal to the Interest Period will be available to it in the London
Interbank Market when the Interest Period commences, the Interest Period
shall be of 6 months.
|
7
|
DEFAULT
INTEREST
|
7.1
|
Payment of default interest on
overdue amounts.
The Borrowers shall pay interest in
accordance with the following provisions of this Clause 7 on any amount
payable by the Borrowers 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 applicable to it);
|
(b)
|
the
Margin 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 Borrowers 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 Borrowers are 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 Agent's
demand but also in any event, 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.
|
7.7
|
Application to Master
Agreements.
For the avoidance of doubt, this Clause 7
does not apply to any amount payable under a Master Agreement in respect
of any continuing Designated Transaction as to which section 2(e) (
Default Interest; Other
Amounts
) of that Master Agreement shall
apply.
|
8
|
REPAYMENT
AND PREPAYMENT
|
8.1
|
Amount of repayment
instalments.
The Borrowers shall repay each Tranche by
40 equal consecutive quarterly instalments of $625,000 each together with
a balloon instalment equal to the outstanding balance of that
Tranche.
|
8.2
|
Repayment
Dates.
The first instalment of each Tranche shall be
repaid on the earlier of (i) the date falling 6 months after the first
Delivery Date or (ii) 31 December 2009;
and
|
8.3
|
Final Repayment
Date.
On the earlier of (i) the final Repayment Date or
(ii) 30 September 2019, the Borrowers shall additionally pay to the Agent
for the account of the Creditor Parties all other sums then accrued or
owing under any Finance Document.
|
8.4
|
Voluntary
prepayment.
Subject to the following conditions, the
Borrowers may prepay the whole or any part of a
Tranche.
|
8.5
|
Conditions for voluntary
prepayment.
The conditions referred to in Clause 8.4 are
that:
|
(a)
|
a
partial prepayment shall be $500,000 or an integral multiple of
$500,000;
|
(b)
|
the
Agent has received from the Borrowers at least 3 Business Days' prior
written notice specifying the amount to be prepaid and the date on which
the prepayment is to be made;
|
(c)
|
the
Borrowers have provided evidence satisfactory to the Agent that any
consent required by any Borrower or any Security Party in connection with
the prepayment has been obtained and remains in force, and that any
official regulation relevant to this Agreement which affects
any Borrower or any Security Party has been complied with;
and
|
(d)
|
the
Borrowers have complied with Clause 8.12 on or prior to the date of
prepayment.
|
8.6
|
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 Borrowers on the date for prepayment
specified in the prepayment notice.
|
8.7
|
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 Borrowers under
Clause 8.5(c).
|
8.8
|
Mandatory
prepayment.
The Borrowers shall be obliged to prepay in
full the Tranche relating to that Ship, and to comply with Clause
8.12:
|
(a)
|
if
a Ship is sold, on or before the date on which the sale is completed by
delivery of the Ship to the buyer;
or
|
(b)
|
if
a Ship becomes a Total Loss, on the earlier of the date falling 180 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;
or
|
(c)
|
if
any of a Borrower's rights under a Shipbuilding Contract are assigned
(other than pursuant to a Predelivery Security Assignment), novated or
sold, on or before the date on which such assignment, novation or sale is
executed (in the case of an assignment or novation) or completed (in the
case of a sale); or
|
(d)
|
if,
prior to the Delivery Date of a Ship, the Borrowers arrange financing in
part or full of any pre-delivery instalment or the delivery instalment of
the Shipbuilding Contract for that Ship with a bank or financial
institution (other than DVB Bank America N.V.), on or before the first
drawdown under such financing; or
|
(e)
|
if
any of the following occurs in relation to a Ship, on demand by the
Agent:
|
(i)
|
any
of the events specified in article 11(a) or 11(c) of the Shipbuilding
Contract for that Ship occurs; or
|
|
|
(ii)
|
either
the Shipbuilding Contract for that Ship or the Refund Guarantee in
relation to that Ship is cancelled, terminated, rescinded or suspended or
otherwise ceases to remain in force for any reason;
or
|
|
(iii)
|
the
Shipbuilding Contract for that Ship is amended or varied without the prior
written consent of the Majority Lenders except for any such amendment or
variation as is permitted by this Agreement or any other relevant Finance
Document; or
|
|
(iv)
|
that
Ship has not for any reason been delivered to, and accepted by, the
relevant Borrower under the Shipbuilding Contract for that Ship by the
date specified in article 3(a)(iii) of that Shipbuilding
Contract,
|
8.9
|
Amounts payable on
prepayment.
A prepayment shall be made together
with:
|
(a)
|
accrued
interest (and any other amount payable under Clause 21 or otherwise) in
respect of the amount prepaid;
|
(b)
|
if
the prepayment is not made on the last day of an Interest Period, together
with any sums payable under Clause 21.1(b);
and
|
(c)
|
if
any part of the Loan is prepaid in connection with a financing or
refinancing arranged by a bank or financial institution (other than DVB
Bank America N.V.), as an agreed compensation for the loss of the Lenders'
anticipated return on capital, a prepayment fee equal to 1 per cent. of
the amount prepaid, for distribution among the Lenders pro rata to their
Commitments,
|
8.10
|
Application of partial
prepayment.
Each partial prepayment of a Tranche shall
be applied pro rata against the repayment instalments and the balloon both
specified in Clause 8.1 for that
Tranche.
|
8.11
|
No
reborrowing.
No amount prepaid may be
reborrowed.
|
8.12
|
Unwinding of Designated
Transactions.
On or prior to any repayment or prepayment
of the Loan under this Clause 8 or any other provision of this Agreement,
the Borrowers shall wholly or partially reverse, offset, unwind or
otherwise terminate one or more of the continuing Designated Transactions
so that the notional principal amount of the continuing Designated
Transactions thereafter remaining does not and will not in the future
(taking into account the scheduled amortisation) exceed the amount of the
Loan as reducing from time to time thereafter pursuant to Clause
8.1.
|
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 described in Part A of Schedule 4 in form and substance
satisfactory to the Agent and its
lawyers;
|
(b)
|
that,
on or before each Drawdown Date after the first Advance, but prior to the
making of that subsequent Advance, the Agent
receives:
|
|
(i)
|
evidence
(which shall include a copy of the relevant invoice or invoices and any
class stage certification) that the instalment under the Shipbuilding
Contract to be financed by the Advance is due for payment;
and
|
|
(ii)
|
evidence
that the Builder has been paid or will be paid that part of the relevant
instalment to be financed by the relevant Advance which is not itself
financed by that Advance;
|
(c)
|
that,
on or before the Drawdown Date of an Advance relating to the delivery
instalment under the Shipbuilding Contract for Ship
A:
|
|
(i)
|
the
Agent receives or is satisfied that it will receive on the making of that
Advance the documents described in Part B of Schedule 4 in form and
substance satisfactory to it and its lawyers;
and
|
|
(ii)
|
the
Borrowers enter into one or more Designated Transactions fixing the
interest rate for that Tranche under this Agreement via an interest rate
swap mechanism for a minimum period of 3 years but otherwise, on terms in
all respects approved by the Agent, with the authorisation of the Majority
Lenders;
|
(d)
|
that,
on or before the Drawdown Date of an Advance relating to the delivery
instalment under the Shipbuilding Contract for Ship
B:
|
|
(i)
|
the
Agent receives or is satisfied that it will receive on the making of that
Advance the documents described in Part C of Schedule 4 in form and
substance satisfactory to it and its lawyers;
and
|
|
(ii)
|
the
Borrowers enter into one or more Designated Transactions fixing the
interest rate for that Tranche under this Agreement via an interest rate
swap mechanism for a minimum period of 3 years but otherwise, on terms in
all respects approved by the Agent, with the authorisation of the Majority
Lenders;
|
(e)
|
that,
on or before the service of the first Drawdown Notice, the Agent has
received the upfront fee referred to in Clause 20.1 and the first
instalment of the annual agency fee referred to in Clause 20.1 and has
received payment of the expenses referred to in Clause
20.2;
|
(f)
|
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 or would
result from the borrowing of the
Advance;
|
|
(ii)
|
the
representations and warranties in Clause 10.1 and those of any Borrower or
any Security Party which are set out in the other Finance Documents would
be true and not misleading if repeated on each of those dates with
reference to the circumstances then existing;
and
|
|
(iii)
|
none
of the circumstances contemplated by Clause 5.7 has occurred and is
continuing;
|
|
(g)
|
that,
if the ratio set out in Clause 15.1 (with the market value of the Ship to
which the Advance relates determined as provided in Clause 15.3 on the
basis of a valuation carried out not more than 2 weeks prior to the
Drawdown Date) were applied immediately following the making of the
Advance, the Borrowers would not be obliged to provide additional security
or prepay part of the Loan under that Clause;
and
|
(h)
|
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 authorisation of the
Majority Lenders, request by notice to the Borrowers 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 Borrowers shall ensure that those
conditions are satisfied within 5 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.
Each
Borrower represents and warrants to each Creditor Party as
follows.
|
10.2
|
Status.
Each
Borrower is duly incorporated and validly existing and in good standing
under the laws of the Republic of Liberia and is not immune to any legal
proceedings in such country of
incorporation.
|
10.3
|
Share capital and
ownership.
Each Borrower has an authorised share capital
of 500 registered and/or bearer shares of no par value, all of which
shares have been issued in registered form and the legal title and
beneficial ownership of all those shares is held, free of any Security
Interest or other claim, by the
Guarantor.
|
10.4
|
Corporate
power.
|
(a)
|
Each
Borrower has the corporate capacity, and has taken all corporate action
and obtained all consents, licenses and authorisations necessary for
it:
|
|
(i)
|
to
carry out its business carried on or to be carried on by it and own its
assets owned or to be owned by it;
|
|
(ii)
|
to
purchase and pay for the Ship to be owned by it under the Shipbuilding
Contract for that Ship and register that Ship in its name under Maltese
flag (in the case of Ship A) or Liberian flag (in the case of Ship
B);
|
|
(iii)
|
to
execute the Finance Documents and the Transaction Documents to which that
Borrower is a party and the Master Agreements;
and
|
|
(iv)
|
to
borrow under this Agreement, to enter into Designated Transactions under
the Master Agreements and to make all the payments contemplated by, and to
comply with, the Finance Documents and the Transaction Documents to which
that Borrower is a party and the Master
Agreements.
|
(b)
|
The
copies of the constitutional documents of the Borrower delivered to the
Agent before the date of this Agreement is a true and complete
copy.
|
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; admissibility
in evidence; pari passu ranking; effective Security
Interests.
The Finance Documents and the Transaction
Documents to which each Borrower is a party and the Master Agreements, do
now or, as the case may be, will, upon execution and delivery (and, where
applicable, registration as provided for in the Finance
Documents):
|
(a)
|
constitute
that Borrower's legal, valid and binding obligations enforceable against
that Borrower in accordance with their respective
terms;
|
(b)
|
are
admissible in evidence and are in full force and
effect;
|
(c)
|
rank
at least pari passu with all its other present and future unsecured
liabilities, except for liabilities which are mandatorily preferred by
law; and
|
(d)
|
create
legal, valid and binding first priority 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)
|
each
Borrower which is a party to that Finance Document will have the right to
create all the Security Interests which that Finance Document purports to
create; and
|
(b)
|
no
third party will have any Security Interest (except for Permitted Security
Interests) or any other interest, right or claim over, in or in relation
to any asset to which any such Security Interest, by its terms,
relates.
|
10.8
|
No
conflicts.
The execution by each Borrower of each
Finance Document and each Transaction Document to which it is a party and
each Master Agreement, and the borrowing by that Borrower of the Loan, and
its compliance with each Finance Document and each Transaction Document to
which it is a party and each Master Agreement will not involve or lead to
a contravention of:
|
(a)
|
any
law or regulation; or
|
(b)
|
the
constitutional documents of that Borrower;
or
|
(c)
|
any
contractual or other obligation or restriction which is binding on that
Borrower or any of its assets.
|
10.9
|
No withholding taxes; stamp
duty.
All payments which each Borrower is liable to make
under the Finance Documents to which it is a party may be made without
deduction or withholding for or on account of any tax payable under any
law of any Pertinent Jurisdiction. No Finance Document is
subject to any filing or stamp duty in 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
Borrowers or any Security Party to any Creditor Party in connection with
any Finance Document satisfied the requirements of Clause 11.5; all
audited and unaudited accounts which have been so provided satisfied the
requirements of Clause 11.7; and there has been no material adverse change
in the financial position or state of affairs of any Borrower from that
disclosed in the latest of those
accounts.
|
10.12
|
No
litigation.
No legal or administrative action involving
any Borrower (including action relating to any alleged or actual breach of
the ISM Code or the ISPS Code) has been commenced or taken or, to any
Borrower's knowledge, is likely to be commenced or
taken.
|
10.13
|
Validity and completeness of
Transaction Documents
. Each Transaction Document
constitutes valid, binding and enforceable obligations of the respective
parties thereto in accordance with its terms;
and:
|
(a)
|
the
copy of each Transaction Document delivered to the Agent before the date
of this Agreement is a true and complete copy;
and
|
(b)
|
no
amendments or additions to any Transaction Document have been agreed nor
has the party to any Transaction Document waived any of their respective
rights under that Transaction
Document.
|
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 any party to a Transaction Document or a third
party in connection with any Transaction Document, other than as disclosed
to the Lenders in writing on or prior to the date of this
Agreement.
|
10.15
|
Compliance with certain
undertakings.
At the date of this Agreement, the
Borrowers are in compliance with Clauses 11.2, 11.4, 11.9 and
11.14.
|
10.16
|
Taxes
paid.
Each Borrower has paid all taxes applicable to, or
imposed on or in relation to that Borrower, its business or the Ship owned
by it.
|
10.17
|
ISM Code and ISPS Code
compliance.
All requirements of the ISM Code and the
ISPS Code as they relate to the Borrowers, the Approved Managers and the
Ships 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 Borrowers of the Loan, the
performance and discharge of their obligations and liabilities under the
Finance Documents, and the transactions and other arrangements affected or
contemplated by the Finance Documents to which a Borrower is a party, the
Borrowers confirm (i) that they are acting for their own account; (ii)
that they will use the proceeds of the Loan for their own benefit, under
their full responsibility and exclusively for the purposes specified in
this Agreement; and (iii) that the foregoing will not involve or lead to a
contravention of any law, official requirement or other regulatory measure
or procedure implemented to combat "money laundering" (as defined in
Article 1 of Directive (91/308) (EEC) of the Council of the European
Communities).
|
10.19
|
Title and
ownership.
The Borrower has good title to and is the
ultimate beneficial owner of each of the assets owned or purported to be
owned by it.
|
10.20
|
No prior
business.
The Borrower has not traded or carried on
business prior to the date of this Agreement other than the entering into
of the Transaction Documents.
|
10.21
|
Employees and pension scheme
obligations.
The Borrower does not have any employees or
obligations in respect of any pensions scheme save for, and in relation
to, the master, officers and crew of the Ship owned or to be owned by
it.
|
10.22
|
Submission to jurisdiction and
choice of laws.
Each submission to jurisdiction, and
choice of law, by the Borrower contained in any Finance Document is
effective.
|
10.23
|
No adverse consequences in
jurisdiction of incorporation.
No Creditor Party will be
deemed to be resident, domiciled, carrying on business or subject to
taxation in the
|
10.24
|
Accounting reference
date.
The accounting reference date for the Borrower is
31 December.
|
10.25
|
Repetition of representations
and warranties.
The representations and warranties set
out in this Clause 10 (except Clause 10.12) will be deemed to be repeated
by each Borrower to each Creditor Party at the end of each Interest Period
with reference to the circumstances then
existing.
|
11
|
GENERAL
UNDERTAKINGS
|
11.1
|
General.
Each
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
|
Title; negative
pledge.
Each Borrower
will:
|
(a)
|
hold
the legal title to, and own the entire beneficial interest in the Ship
owned by it, her Insurances and Earnings, free from all Security Interests
and other interests and rights of every kind, except for those created by
the Finance Documents and the effect of assignments contained in the
Finance Documents and except for Permitted Security Interests;
and
|
(b)
|
not
create or permit to arise any Security Interest (except for Permitted
Security Interests) over any other asset, present or future (including,
but not limited to, that Borrower's rights against a Swap Counterparty
under a Master Agreement or all or any part of that Borrower's interest in
any amount payable to that Borrower by a Swap Counterparty under a Master
Agreement).
|
11.3
|
No disposal of
assets.
No Borrower will transfer, lease or otherwise
dispose of:
|
(a)
|
all
or a substantial part of its assets, whether by one transaction or a
number of transactions, whether related or not;
or
|
(b)
|
any
debt payable to it or any other right (present, future or contingent
right) to receive a payment, including any right to damages or
compensation,
|
11.4
|
No other liabilities or
obligations to be incurred.
No Borrower will incur any
liability or obligation except:
|
(a)
|
liabilities
and obligations under the Transaction Documents and the Finance Documents
to which it is a party;
|
(b)
|
liabilities
or obligations reasonably incurred in the ordinary course of operating and
chartering the Ship owned by it (and then only if any such Financial
Indebtedness is unsecured trade credit with an aggregate amount not
exceeding $500,000 (or the equivalent in any other currency) at any time);
and
|
(c)
|
Designated
Transactions.
|
11.5
|
Information provided to be
accurate.
All financial and other information which is
provided in writing by or on behalf of a Borrower under or in connection
with any
|
11.6
|
Provision
of financial statements.
|
(a)
|
Each
Borrower will send to the Agent:
|
|
(i)
|
as
soon as possible, but in no event later than 180 days after the end of
each financial year of that Borrower, the audited accounts of that
Borrower (together with updated details of all off-balance sheet and time
charter hire commitments of the Borrower);
and
|
|
(ii)
|
as
soon as possible, but in no event later than 90 days after the end of each
quarter in each financial year of that
Borrower:
|
|
(A)
|
unaudited
accounts of that Borrower which are certified as to their correctness by
the chief financial officer of that Borrower;
and
|
|
(B)
|
management
accounts in a format approved by the Agent which show the results of the
operation of the Ship owned by it during the preceding financial quarter
and which are certified as to their correctness by the chief financial
officer of that Borrower.
|
(b)
|
Each
Borrower will procure that there is sent to the Agent in relation to each
Charterer and each Charter
Guarantor:
|
|
(i)
|
as
soon as possible, and the Borrower shall use its best efforts to procure
that in no event later than 180 days after the end of each financial year
of that company there is sent to the Agent, the audited consolidated
accounts of that company and its subsidiaries and audited individual
accounts of that company (together with in either case updated details of
all off-balance sheet and time charter hire commitments of that company);
and
|
|
(ii)
|
as
soon as possible, and the Borrower shall use its best efforts to procure
that in no event later than 90 days after the end of each half-year period
in each financial year of that company there is sent to the
Agent:
|
|
(A)
|
unaudited
consolidated accounts of that company and its subsidiaries and unaudited
individual accounts of that company, each of which are certified as to
their correctness by the chief financial officer of that company;
and
|
|
(B)
|
management
accounts in a format approved by the Agent which show the results of the
operation of the Ship chartered by it (or, as the case may be, which is
the subject of a guarantee issued by it) during the preceding financial
half-year and which are certified as to their correctness by the chief
financial officer of that company.
|
11.7
|
Form of financial
statements.
All accounts (audited and unaudited)
delivered under Clause 11.6 will:
|
(a)
|
be
prepared in accordance with all applicable laws and GAAP (or, in the case
of a Charterer or a Charter Guarantor, such other accounting principles
approved by the Agent) consistently
applied;
|
(b)
|
give
a true and fair view of the state of affairs of the relevant company and
(if applicable) its subsidiaries at the date of those accounts and of its
or their profit for the period to which those accounts relate;
and
|
(c)
|
fully
disclose or provide for all significant liabilities of the relevant
company and (if applicable) its
subsidiaries.
|
11.8
|
Shareholder and creditor
notices.
Each Borrower will send the Agent, at the same
time as they are despatched, copies of all communications which are
despatched to that Borrower's shareholders or creditors or any class of
them.
|
11.9
|
Consents
and compliance with laws.
|
(a)
|
Each
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
that Borrower to perform its obligations under any Finance Document or any
Transaction Document to which it is a party or any Master
Agreement;
|
|
(ii)
|
for
the validity or enforceability of any Finance Document or any Transaction
Document to which it is a party or any Master
Agreement;
|
|
(iii)
|
for
that Borrower to continue to own and operate the Ship and any other asset
owned by it;
|
|
(iv)
|
for
that Borrower to continue to carry on its business as currently
conducted,
|
(b)
|
Without
prejudice to the other obligations under the Finance Documents, each
Borrower is in compliance, and shall comply in all respects, with all laws
and regulations to which it may be subject including, without limitation,
all Environmental Laws and all intellectual property
laws.
|
11.10
|
Maintenance of Security
Interests.
Each Borrower
will:
|
(a)
|
at
its own cost, do all that is legally possible 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.
|
11.11
|
Notification of
litigation.
Each Borrower will provide the Agent with
details of any legal or administrative action involving that Borrower, any
Security Party, any Approved Manager or the Ship owned by it, the Earnings
or the Insurances as soon as such action is instituted or it becomes
apparent to that Borrower that it is likely to be instituted, unless it is
clear that the legal or administrative action cannot be considered
material in the context of any Finance
Document.
|
11.12
|
No amendment to Transaction
Documents.
Neither Borrower will agree to any amendment
or supplement to, nor waive nor fail to enforce, any Transaction Document
or any of its provisions.
|
11.13
|
No amendment to Master
Agreements.
Neither Borrower will agree to any amendment
or supplement to, or waive or fail to enforce, any Master Agreement or any
of its provisions.
|
11.14
|
Principal place of
business.
Each Borrower will maintain its place of
business, and keep its corporate documents and records, at the address
stated at the commencement of this Agreement; and no Borrower will
establish, or do anything as a result of which it would be deemed to have,
a place of business in any country other than
Greece.
|
11.15
|
Confirmation of no
default.
Each Borrower will, within 2 Business Days
after service by the Agent of a written request, serve on the Agent a
notice which is signed by 2 directors of that Borrower and
which:
|
(a)
|
states
that no Event of Default or Potential Event of Default has occurred;
or
|
(b)
|
states
that no Event of Default or Potential Event of Default has occurred,
except for a specified event or matter, of which all material details are
given.
|
11.16
|
Notification of
default.
Each Borrower will notify the Agent as soon as
that 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,
|
|
and
will keep the Agent fully up-to-date with all
developments.
|
11.17
|
Provision of further
information.
Each Borrower will, as soon as practicable
after receiving the request, provide the Agent with any additional
financial or other information
relating:
|
(a)
|
to
that Borrower, the Ship owned by it, the Earnings or the Insurances;
or
|
(b)
|
to
any other matter relevant to, or to any provision of, a Finance
Document,
|
11.18
|
Provision of copies and
translation of documents.
Each 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 Borrowers will provide
a certified English translation prepared by a translator approved by the
Agent.
|
11.19
|
"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 Borrowers 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,
|
11.20
|
Splitting
of the Loan.
|
(a)
|
The
Borrowers agree that the Agent (acting with the authorisation of the
Lenders) has the right at any time to request that the Loan is split into
two tranches, which may or may not be ranked pari passu and which may or
may not have identical pricing, so long as the blended margin on the Loan
as split is equal to the Margin and the repayment profile of each tranche
is the same as that of the Loan prior to the
split.
|
(b)
|
If
the Agent notifies the Borrowers that the Agent is exercising the right in
this Clause:
|
|
(i)
|
the
Borrowers will, and will procure that each Security Party will. at the
Borrowers' cost promptly enter into any documentation in a form reasonably
required by the Agent to implement such split required by the Agent
(including, without limitation, any documentation required to amend the
Finance Documents and to secure the Borrower's and the Security Parties'
liabilities and obligations under the Finance Documents as amended and/or
supplemented);
|
|
(ii)
|
the
Borrower shall also at the same time procure that the Agent is promptly
provided with favourable legal opinions from lawyers appointed by the
Agent on such matters concerning the laws of such relevant jurisdictions
as the Agent may require; corporate authorities of the Borrowers and the
Security Parties each in a form approved by the Agent authorising the
execution of any documentation; a process agent letter confirming the
acceptance of appointment of any process agent appointed by the Borrowers
and the Security Parties; and evidence that any filings required in
relation to any Borrower and/or any Security Party and/or any new Finance
Document have been made; and
|
|
(iii)
|
the
Borrowers shall fully indemnify the Agent and each Lender on the Agent's
demand and the Security Trustee on its demand in respect of all reasonable
expenses incurred by that Creditor Party as a result of or in connection
with such splitting of the Loan.
|
11.21
|
Subordination.
Without
prejudice to the generality of Clause 11.4, each Borrower shall procure
that any claim of the Guarantor and/or any Approved Manager against either
Borrower shall at all times be fully subordinated to the Secured
Liabilities to the satisfaction of the
Agent.
|
11.22
|
Bank account
statements.
Each Borrower will procure that the Agent is
sent at its request all of the bank statement for each Earnings Account
(with such statements to be, if available, in electronic
format).
|
11.23
|
Capital
expenditure.
The Borrowers will not, and shall procure
that none of their respective subsidiaries (whether direct or indirect)
will, acquire or permit to be acquired any investments or other assets, or
make or permit to be made any capital expenditure save for any investment
or any other asset acquired by, or any capital expenditure by,
a
|
11.24
|
No petition for
insolvency.
Each Borrower will procure that each of its
material creditors will not petition for that Borrower's insolvency nor
take any related proceedings.
|
11.25
|
Separateness.
Each
Borrower will:
|
(a)
|
keep
its own separate books and records;
|
(b)
|
maintain
its own separate accounts;
|
(c)
|
not
co-mingle its assets with any other
person;
|
(d)
|
conduct
business in its own name;
|
(e)
|
observe
all corporate and other formalities required by its constitutional
documents;
|
(f)
|
prepare
its own separate financial
statements;
|
(g)
|
pay
its liabilities out of its own
funds;
|
(h)
|
maintain
adequate capital for the business carried out or to be carried out by that
Borrower;
|
(i)
|
not
pledge any Creditor Party's credit;
|
(j)
|
(if
applicable) use its own separate stationery, invoices and cheque
books;
|
(k)
|
hold
itself out as a separate legal entity;
and
|
(l)
|
correct
any known misunderstanding regarding its separate
identity.
|
11.26
|
No VAT
group.
Neither Borrower shall be a member of a VAT
(value added tax) group.
|
11.27
|
Change of ownership or control
of a Charter Guarantor.
As soon as it becomes aware,
each Borrower shall notify (and each Borrower shall procure that the
Guarantor notifies) the Agent of any material change in the beneficial or
legal ownership of any of the shares in either Charter Guarantor or in the
ultimate control of the voting rights attaching to any of those
shares.
|
11.28
|
Charter Assignments and
Quadripartite Agreements.
The Borrowers shall procure
that no later than 90 days after the first Drawdown Date (or such later
date as the Agent may, with the authorisation of the Lenders, agree with
the Borrowers) the Agent receives in relation to each Ship the following
documents and evidence in form and substance satisfactory to the Agent and
its lawyers:
|
(a)
|
duly
executed originals of the Quadripartite Agreement and the Charter
Assignment (and of each document to be delivered by each of
them);
|
(b)
|
such
documentary evidence as the Agent and its legal advisers may require in
relation to the due authorisation and execution by any party to that
Quadripartite Agreement or that Charter Assignment of that document and of
all documents to be executed by that party under that document;
and
|
(c)
|
in
relation to each of that Quadripartite Agreement and that Charter
Agreement, such legal opinions required by the Agent and each in a form
approved by the Agent.
|
11.29
|
Charters and Charter
Guarantees.
The Borrowers shall procure that no later
than 90 days after the first Drawdown Date (or such later date as the
Agent may, with the authorisation of the Lenders, agree with the
Borrowers) the Agent receives the following documents and evidence in form
and substance satisfactory to the Agent and its
lawyers:
|
(a)
|
copies
of each Charter and each Charter Guarantee and of all documents signed or
issued by any party to that document under or in connection with
it;
|
(b)
|
evidence
that the relevant Borrower has been nominated as the charterer under each
Charter;
|
(c)
|
evidence
that the relevant Borrower is the beneficiary under each Charter
Guarantee;
|
(d)
|
such
documentary evidence as the Agent and its legal advisers may require in
relation to the due authorisation and execution by any party to a Charter
or a Charter Guarantee of that document and of all documents to be
executed by that party under that document;
and
|
(e)
|
in
relation to each Charter and each Charter Guarantee, such legal opinions
required by the Agent and each in a form approved by the
Agent.
|
12
|
CORPORATE
UNDERTAKINGS
|
12.1
|
General.
Each
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.
Each Borrower will maintain its separate
corporate existence and remain in good standing under the laws of the
Republic of Liberia.
|
12.3
|
Negative
undertakings.
No Borrower
will:
|
(a)
|
carry
on any business other than the ownership, chartering and operation of the
Ship owned by it; or
|
(b)
|
change
its constitutional documents; or
|
(c)
|
pay
any dividend or make any other form of distribution (whether of a revenue
or capital nature or otherwise) or effect any form of redemption, purchase
or return of share capital or (re)pay any principal, interest or any other
amount on any loan from a shareholder or any other connected person;
or
|
(d)
|
provide
any form of credit or financial assistance to any person or enter into any
transaction with or involving any person which is not in the normal course
of business of that Borrower or on terms which are, in any respect, less
favourable to that Borrower than those which it could obtain in a bargain
made at arms' length;
|
(e)
|
open
or maintain any account with any bank or financial institution except any
account with a bank or financial institution approved by the Agent and
then only
Provided
that
a Security Interest created by an Account Security Deed exists
over such account;
|
(f)
|
issue,
allot or grant any person a right to any shares in its capital or
repurchase or reduce its issued share
capital;
|
(g)
|
acquire
any shares or other securities other than US or UK Treasury bills and
certificates of deposit issued by major North American or European banks,
or enter into any transaction in a derivative other than Designated
Transactions; or
|
(h)
|
enter
into any form of amalgamation, merger or de-merger or any form of
reconstruction or reorganisation.
|
13
|
INSURANCE
|
13.1
|
General.
Each
Borrower also undertakes with each Creditor Party to comply with the
following provisions of this Clause 13 at all times during the Security
Period (after the Ship to be owned by it has been delivered to it under
the Shipbuilding Contract for that Ship) except as the Agent may, with the
authorisation of the Majority Lenders, otherwise permit
Provided that
to the
extent that a Charterer, by its performance of the Charter of a Ship,
performs and discharges the obligations of the Borrower owning that Ship
contained in this Clause, then such performance and discharge shall, to
that extent, be deemed due performance and discharge of that Borrower's
corresponding obligations under this
Clause.
|
13.2
|
Maintenance of obligatory
insurances.
Each Borrower shall keep the Ship owned by
it insured at the expense of that Borrower
against:
|
(a)
|
fire
and usual marine risks (including hull and machinery and excess
risks);
|
(b)
|
war
risks;
|
(c)
|
protection
and indemnity risks (including, without limitation, freight, demurrage and
defence cover);
|
(d)
|
risk
of loss of Earnings; and
|
(e)
|
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
Borrower to insure and which are specified by the Security Trustee by
notice to that Borrower.
|
13.3
|
Terms of obligatory
insurances.
Each Borrower shall effect such
insurances:
|
(a)
|
in
Dollars;
|
(b)
|
in
the case of fire and usual marine risks and war risks, in an amount on an
agreed value basis (determined at the time of taking out such insurances
or upon the latest renewal) at least the greater of (i) together with the
Ship owned by the other Borrower, 120 per cent. of the aggregate of the
Loan and the Swap Exposure of each Swap Counterparty and (ii) the market
value of the Ship owned by it;
|
(c)
|
in
the case of oil pollution liability risks, for an aggregate amount equal
to the highest level of cover from time to time available under basic
protection and indemnity club entry and in the international marine
insurance market;
|
(d)
|
in
relation to protection and indemnity risks in respect of the full tonnage
of the Ship owned by it;
|
(e)
|
in
the case of risk of loss of Earnings insurance, in an amount of at least
equal to the daily rate under the Charter of the Ship owned by it for the
best market cover available and a minimum waiting
period;
|
(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 Borrower shall procure that the obligatory insurances
shall:
|
(a)
|
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;
|
(b)
|
name
the Security Trustee as loss payee with such directions for payment as the
Security Trustee may specify;
|
(c)
|
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;
|
(d)
|
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
|
(e)
|
provide
that the Security Trustee may make proof of loss if the Borrowers fail to
do so.
|
13.5
|
Renewal of obligatory
insurances.
Each Borrower
shall:
|
(a)
|
at
least 21 days before the expiry of any obligatory insurance effected by
it:
|
|
(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 Borrower
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 effected by
it, 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 Borrower shall 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 Borrower 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 the Ship owned by that Borrower 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 Borrower shall ensure that any protection
and indemnity and/or war risks associations in which the Ship owned by it
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 Borrower shall ensure that all policies
relating to obligatory insurances effected by it are deposited with the
approved brokers through which the insurances are effected or
renewed.
|
13.9
|
Payment of
premiums.
Each Borrower shall punctually pay all
premiums or other sums payable in respect of the obligatory insurances
effected by it and produce all relevant receipts when so required by the
Security Trustee.
|
13.10
|
Guarantees.
Each
Borrower shall ensure that any guarantees required by a protection and
indemnity or war risks association are promptly issued and remain in full
force and effect.
|
13.11
|
Compliance with terms of
insurances.
No Borrower shall do nor omit to do (nor
permit to be done or not to be done) any act or thing which would or might
render any obligatory insurance invalid, void, voidable or unenforceable
or render any sum payable under an obligatory insurance repayable in whole
or in part; and, in particular:
|
(a)
|
each
Borrower 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)
|
no
Borrower shall make any changes relating to the classification or
classification society or manager or operator of the Ship owned by it
approved by the underwriters of the obligatory
insurances;
|
(c)
|
each
Borrower 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 the Ship owned by it
is entered to maintain cover for trading to the United States of America
and Exclusive Economic Zone (as defined in the United States Oil Pollution
Act 1990 or any other applicable legislation);
and
|
(d)
|
no
Borrower shall employ the Ship owned by it, nor allow it to be employed,
otherwise than in conformity with the terms and conditions of the
obligatory insurances, without first obtaining the consent of the insurers
and complying with any requirements (as to extra premium or otherwise)
which the insurers specify.
|
13.12
|
Alteration to terms of
insurances.
No Borrower shall either 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.
No Borrower shall settle, compromise or abandon
any claim under any obligatory insurance for Total Loss or for a Major
Casualty, and shall do all things necessary and provide all documents,
evidence and information to enable the 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 Borrower shall provide the Security
Trustee, at the time of each such communication, copies of all written
communications between that Borrower
and:
|
(a)
|
the
approved brokers;
|
(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
Borrower'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 Borrower 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 Borrower shall 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 Borrowers 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 insurances.
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 an amount not more than 120 per cent. of the aggregate of the
Loan and the Swap Exposure of each
Swap
|
14
|
SHIP
COVENANTS
|
14.1
|
General.
Each
Borrower also undertakes with each Creditor Party to comply with the
following provisions of this Clause 14 at all times during the Security
Period (after the Ship to be owned by it has been delivered to it under
the Shipbuilding Contract for that Ship) except as the Agent, with the
authorisation of the Majority Lenders (such consent not to be unreasonably
withheld in the case of a change of flag, class, management or bareboat
charter and subject to such conditions as the Majority Lenders may
reasonably require), may otherwise permit
Provided that
to the
extent that a Charterer, by its performance of the Charter of a Ship,
performs and discharges the obligations of the Borrower owning that Ship
contained in this Clause, then such performance and discharge shall, to
that extent, be deemed due performance and discharge of that Borrower's
corresponding obligations under this
Clause.
|
14.2
|
Ship's name and
registration.
Each Borrower shall keep the Ship owned by
it registered in its name as a Maltese ship (in the case of Ship A) or a
Liberian ship (in the case of Ship B); shall not do, omit to do or allow
to be done anything as a result of which such registration might be
cancelled or imperilled; and shall not change the name or port of registry
of the Ship owned by it
Provided that
if the
Agent notifies the Borrower that the country of the flag of either Ship is
affected by instability (as determined by the Majority Lenders acting
reasonably), the Borrower shall within 30 days of such notification
procure that that Ship is reflagged to another flag approved by the
Majority Lenders and shall also:
|
(a)
|
execute
and register a first priority ship mortgage (and, if applicable,
collateral deed of covenant) on that Ship in favour of the Security
Trustee or the Lenders in a form approved by the Security
Trustee;
|
(b)
|
execute
a supplement to this Agreement and the other Finance Documents in a form
approved by the Security Trustee making necessary amendments to this
Agreement and the other Finance
Documents;
|
(c)
|
provide
such corporate authorities, legal opinions and other conditions precedent
documents required by the Security Trustee and each in a form approved by
the Security Trustee;
|
(d)
|
pay
all of the Creditor Parties' reasonable expenses in relation to such
re-flagging; and
|
(e)
|
comply
with such other conditions as the Security Trustee may reasonably
require.
|
14.3
|
Repair and
classification.
Each Borrower shall keep the Ship owned
by it in a good and safe condition and state of
repair:
|
(a)
|
consistent
with first-class ship ownership and management
practice;
|
(b)
|
so
as to maintain that Ship in the highest classification available for ships
of the same type, age and specification as the Ship with Det norske
Veritas free of recommendations and conditions;
and
|
(c)
|
so
as to comply with all laws and regulations applicable to vessels
registered under Maltese flag (in the case of Ship A) or Liberian flag (in
the case of Ship B) or to vessels
|
14.4
|
Modification.
No
Borrower shall make any modification or repairs to, or replacement of, any
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.
No Borrower shall remove any material part of any
Ship, or any item of equipment installed on, any Ship unless the part or
item so removed is forthwith replaced by a suitable part or item which is
in the same condition as or better condition than the part or item
removed, is free from any Security Interest or any right in favour of any
person other than the Security Trustee and becomes on installation on the
relevant Ship the property of the relevant Borrower and subject to the
security constituted by the relevant Mortgage
Provided that
a Borrower
may install equipment owned by a third party if the equipment can be
removed without any risk of damage to the Ship owned by
it.
|
14.6
|
Surveys.
Each
Borrower shall submit the Ship owned by it regularly to all periodical or
other surveys which may be required for classification purposes and, if so
required by the Security Trustee provide the Security Trustee, with copies
of all survey reports.
|
14.7
|
Inspection.
Each
Borrower shall permit the Security Trustee (by surveyors or other persons
appointed by it for that purpose) to board the Ship owned by it at all
reasonable times and without unduly interfering with that Ship's operation
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 Borrower shall promptly
discharge:
|
(a)
|
all
liabilities which give or may give rise to maritime or possessory liens on
or claims enforceable against the Ship owned by it, the Earnings or the
Insurances;
|
(b)
|
all
taxes, dues and other amounts charged in respect of the Ship owned by it,
the Earnings or the Insurances; and
|
(c)
|
all
other outgoings whatsoever in respect of the Ship owned by it, the
Earnings or the Insurances,
|
|
and,
forthwith upon receiving notice of the arrest of the Ship owned by it, or
of its detention in exercise or purported exercise of any lien or claim,
that Borrower shall procure its release by providing bail or otherwise as
the circumstances may require.
|
14.9
|
Compliance with laws
etc.
Each Borrower
shall:
|
(a)
|
comply,
or procure compliance with the ISM Code, the ISPS Code, all Environmental
Laws and all other laws or regulations relating to the Ship owned by it,
its ownership, operation and management or to the business of that
Borrower;
|
(b)
|
not
employ the Ship owned by it nor allow its employment in any manner
contrary to any law or regulation in any relevant jurisdiction including
but not limited to the ISM Code and 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 the Ship owned by it to enter or trade to any
zone which is declared a war zone by any government or by the Ship's war
risks insurers unless the prior written consent of the Security Trustee
has been given and that Borrower has (at its expense) effected any
special, additional or modified insurance cover which the Security Trustee
may require.
|
14.10
|
Provision of
information.
Each Borrower shall promptly provide the
Security Trustee with any information which it requests
regarding:
|
(a)
|
the
Ship owned by it, its employment, position and engagements (including,
without limitation, the provision of the latest complete technical report
from any Approved Manager);
|
(b)
|
the
Earnings and payments and amounts due to the master and crew of the Ship
owned by it;
|
(c)
|
any
expenses incurred, or likely to be incurred, in connection with the
operation, maintenance or repair of the Ship owned by it and any payments
made in respect of that Ship;
|
(d)
|
any
towages and salvages; and
|
(e)
|
its
compliance, any Approved Manager's compliance and the compliance of the
Ship owned by it with the ISM Code and the ISPS
Code,
|
|
and,
upon the Security Trustee's request, provide copies of any current charter
relating to the Ship owned by it, of any current charter guarantee and
copies of the Borrower's or any Approved Manager's Document of
Compliance.
|
14.11
|
Notification of certain
events.
Each Borrower shall 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 the Ship owned by it has become or is, by
the passing of time or otherwise, likely to become a Total
Loss;
|
(c)
|
any
requirement or recommendation made by any insurer or classification
society or by any competent authority which is not immediately complied
with;
|
(d)
|
any
arrest or detention of the Ship owned by it, any exercise or purported
exercise of any lien on that Ship or its Earnings or any requisition of
that Ship for hire;
|
(e)
|
any
intended dry docking of the Ship owned by
it;
|
(f)
|
any
Environmental Claim made against that Borrower or in connection with the
Ship owned by it, or any Environmental
Incident;
|
(g)
|
any
claim for breach of the ISM Code or the ISPS Code being made against that
Borrower, any Approved Manager or otherwise in connection with the Ship
owned by it; or
|
(h)
|
any
other matter, event or incident, actual or threatened, the effect of which
will or could lead to the ISM Code or the ISPS Code not being complied
with,
|
|
and
that Borrower shall keep the Security Trustee advised in writing on a
regular basis and in such detail as the Security Trustee shall require of
that Borrower'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 Borrower shall, in
relation to the Ship owned by it:
|
(a)
|
save
for a Charter, let that Ship on demise charter (or permit that Ship to be
let 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 2 months'
hire (or the equivalent) is payable in
advance;
|
(d)
|
charter
that Ship otherwise than on bona fide arm's length terms at the time when
that Ship is fixed;
|
(e)
|
agree
to any assignment of any charter of that Ship or any charter hire review
of any such charter;
|
(f)
|
appoint
a manager of that Ship other than an Approved Manager (which, each
Borrower represents and warrants to each Creditor Party, has the ability
to carry out such appointment) or agree to any alteration to the terms of
an Approved Manager's appointment;
|
(g)
|
de-activate
or lay up that Ship or permit that Ship to be de-activated or laid up;
or
|
(h)
|
put
that Ship (or permit that Ship to be put) into the possession of any
person for the purpose of work being done upon it in an amount exceeding
or likely to exceed $500,000 (or the equivalent in any other currency)
unless that person has first given to the 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 Borrower shall keep the relevant Mortgage
registered against the Ship owned by it as a valid first priority
mortgage, carry on board that Ship a certified copy of the relevant
Mortgage and place and maintain in a conspicuous place in the navigation
room and the Master's cabin of that Ship a framed printed notice stating
that that Ship is mortgaged by that Borrower to the Security
Trustee.
|
14.14
|
Sharing of
Earnings.
No Borrower shall enter into any
agreement or arrangement for the sharing of any
Earnings.
|
14.15
|
ISPS
Code.
Each Borrower shall comply with the ISPS Code and
in particular, without limitation,
shall:
|
(a)
|
procure
that the Ship owned by that Borrower and the company responsible for that
Ship's compliance with the ISPS Code comply with the ISPS Code;
and
|
(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.
|
15
|
SECURITY
COVER
|
15.1
|
Minimum required security
cover.
Clause 15.2 applies if the Agent notifies the
Borrowers of any of the following:
|
(a)
|
at
the earlier of (i) the end of November 2008 or (ii) the Drawdown Date in
relation to the launching instalment under the Shipbuilding Contract for
the first Ship to reach that stage, the aggregate
of:
|
(i)
|
the
aggregate of the market value (each determined as provided in Clause 15.3
on a resale basis on the basis of a valuation carried out not more than 2
weeks prior to the Drawdown Date (or as the case may be) the end of
November 2008) of each Ship less the aggregate amount of the instalment(s)
to be paid to the Builder under the Shipbuilding Contract for that Ship
(save that if that Shipbuilding Contract is the subject of the
circumstances described in either Clauses 8.8(c) or 8.8(e), the market
value of that Ship for the purposes of this paragraph (i) shall be zero);
plus
|
|
(ii)
|
the
net realisable value of any additional security previously provided under
this Clause 15,
|
(b)
|
at
any time following the Delivery Date of the first Ship but prior to the
Delivery Date of the second Ship, the aggregate
of:
|
|
(i)
|
the
market value (determined as provided in Clause 15.3) of the Ship which has
delivered (save that if that Ship is not subject to a Mortgage, the market
value for the purposes of this paragraph (i) shall be zero);
plus
|
|
(ii)
|
the
market value (determined as provided in Clause 15.3 on a resale basis) of
the Ship which has not yet delivered less the aggregate amount of the
instalment(s) to be paid to the Builder under the Shipbuilding Contract
for that Ship (save that if that Shipbuilding Contract is the subject of
the circumstances described in either Clauses 8.8(c) or 8.8(e), the market
value of that Ship for the purposes of this paragraph (ii) shall be zero);
plus
|
|
(iii)
|
the
net realisable value of any additional security previously provided under
this Clause 15,
|
(c)
|
at
any time following the Delivery Date of both Ships, the aggregate
of:
|
|
(i)
|
the
aggregate of the market value (each determined as provided in Clause 15.3)
of each Ship subject to a Mortgage;
plus
|
|
(ii)
|
the
net realisable value of any additional security previously provided under
this Clause 15,
|
|
is
below 115 per cent. (during the period commencing from the final Delivery
Date and ending on the date falling 5 years after the first Delivery Date)
or 125 per cent. (during the period commencing from the date falling 5
years after the first Delivery Date and ending on the end of the Security
Period) of the aggregate of the Loan and of the Swap Exposure of each Swap
Counterparty.
|
15.2
|
Provision of additional
security; prepayment.
If the Agent serves a notice on
the Borrowers under Clause 15.1, the Borrowers shall, within 30 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
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 authorisation of the Majority Lenders, approve or require;
or
|
(b)
|
prepay
such part (at least) of the Loan as will eliminate the
shortfall.
|
15.3
|
Valuation of
Ships.
The market value of a Ship at any date is that
shown by a valuation prepared:
|
(a)
|
as
at a date not more than 14 days
previously;
|
(b)
|
by
an independent sale and purchase shipbroker which the Agent has approved
or appointed for the purpose;
|
(c)
|
with
or without physical inspection of the 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 Borrowers, 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 Borrowers shall promptly 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 Borrowers fail to provide
the information by the date specified in the request, the valuation may be
made on any basis and assumptions which the shipbroker or the Majority
Lenders (or the expert appointed by them) consider
prudent.
|
15.7
|
Payment of valuation
expenses.
Without prejudice to the generality of the
Borrowers' obligations under Clauses 20.2, 20.3 and 21.3, the Borrowers
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
any 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 any Borrower
to the Agent or any Lender, to such account with such bank as the Agent
may from time to time notify to the Borrowers 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 Borrowers and the other Creditor
Parties.
|
16.2
|
Payment on non-Business
Day.
If any payment by any Borrower under a Finance
Document would otherwise fall due on a day which is not a Business
Day:
|
(a)
|
the
due date shall be extended to the next succeeding Business Day;
or
|
(b)
|
if
the next succeeding Business Day falls in the next calendar month, the due
date shall be brought forward to the immediately preceding Business
Day,
|
16.3
|
Basis for calculation of
periodic payments.
All interest and commitment 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, a Swap Counterparty or the Security Trustee shall
be made available by the Agent to that Lender, that Swap Counterparty 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, the Swap
Counterparty 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 and/or the Swap Counterparties generally shall be
distributed by the Agent to each Lender and each Swap Counterparty 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 or a Swap Counterparty, deduct and withhold
from that amount any sum which is then due and payable to the Agent from
that Lender or that Swap Counterparty under any Finance Document or any
sum which the Agent is then entitled under any Finance Document to require
that Lender or that Swap Counterparty 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 any Borrower or any Lender or any Swap
Counterparty any sum which the Agent is expecting to receive for
remittance or distribution to that Borrower or that Lender or that Swap
Counterparty 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 a Borrower, a Lender or a Swap Counterparty, without
first having received that sum, that Borrower or (as the case may be) the
Lender or the Swap Counterparty 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 Borrowers and each Security Party
under the Finance Documents and all payments in respect of those amounts
made by the Borrowers and any Security
Party.
|
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 Borrowers and
each Security Party under the Finance Documents and all payments in
respect of those amounts made by the Borrowers and any Security
Party.
|
16.11
|
Accounts prima facie
evidence.
If any accounts maintained under Clauses 16.9
and 16.10 show an amount to be owing by a 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 after service of
notice on the Borrowers under Clause 19.2(a)(i) or (ii) shall be
applied:
|
(a)
|
FIRST:
in or towards satisfaction of any amounts then due and payable under the
Finance Documents and the Master Agreements in the following order and
proportions:
|
|
(i)
|
first,
in or towards satisfaction pro rata of all amounts then due and payable to
the Creditor Parties under the Finance Documents other than those amounts
referred to at paragraphs (ii) to (v) inclusive below (including, but
without limitation, all amounts payable by any Borrower under Clauses 20,
21 and 22 of this Agreement or by any Borrower or any Security Party under
any corresponding or similar provision in any other Finance Document or in
any Master Agreement);
|
|
(ii)
|
secondly,
in or towards satisfaction pro rata of any and all amounts of interest or
default interest payable to the Creditor Parties under the Finance
Documents;
|
|
(iii)
|
thirdly,
in or towards satisfaction pro rata of each
Tranche;
|
|
(iv)
|
fourthly,
in or towards satisfaction pro rata of any and all amounts of interest or
default interest payable to the Creditor Parties under the Master
Agreements (and, for this purpose, the expression "
interest
" shall include
any net amount which any Borrower shall have become liable to pay or
deliver under section 2(e) (
Obligations
) of any
Master Agreement but shall have failed to pay or deliver to the relevant
Swap Counterparty at the time of application or distribution under this
Clause 17); and
|
|
(v)
|
fifthly,
in or towards satisfaction pro rata of he Swap Exposure of each Swap
Counterparty (in the case of the latter, calculated as at the actual Early
Termination Date applying to each particular Designated Transaction, or if
no
|
(b)
|
SECONDLY:
in retention of an amount equal to any amount not then due and payable
under any Finance Document or any Master Agreement but which the Agent, by
notice to the Borrowers, 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);
and
|
(c)
|
THIRDLY:
any surplus shall be paid to the Borrowers 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 and the Swap Counterparties, by notice to the
Borrowers, 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 any Borrower or any Security
Party.
|
18
|
APPLICATION
OF EARNINGS
|
18.1
|
Payment of
Earnings.
Each Borrower undertakes with each Creditor
Party to ensure that, throughout the Security Period and subject only to
the provisions of the General Assignment and the Charter Assignment, all
the Earnings of the Ship owned by it are paid to the Earnings Account for
that Ship.
|
18.2
|
Location of
accounts.
Each Borrower shall
promptly:
|
(a)
|
comply
with any requirement of the Agent as to the location or re-location of the
Earnings Accounts (or either 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
either 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.
|
19
|
EVENTS
OF DEFAULT
|
19.1
|
Events of
Default.
An Event of Default occurs
if:
|
(a)
|
any
Borrower or any Security Party fails to pay when due or (if so payable) on
demand any sum payable under a Finance Document or under any document
relating to a Finance Document; or
|
(b)
|
any
breach occurs of Clause 9.2, 11.2, 11.3, 12.2, 12.3 or 15.2;
or
|
(c)
|
any
breach by any Borrower or any Security Party occurs of any provision of a
Finance Document (other than a breach covered by paragraphs (a) or (b))
which, in the opinion of the Majority Lenders, is capable of remedy, and
such default continues unremedied 10 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 any 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
representation, warranty or statement made or repeated by, or by an
officer of, a 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 untrue or misleading when it is made or repeated;
or
|
(f)
|
any
of the following occurs in relation to any secured Financial Indebtedness
(including, without limitation, leases) of $2,500,000 or more in aggregate
of a Relevant Person:
|
|
(i)
|
any
Financial Indebtedness of a Relevant Person is not paid when due;
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 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 opinion of the Majority Lenders, unable to
pay its debts as they fall due; or
|
|
(ii)
|
any
assets of a Relevant Person are subject to any form of execution,
attachment, arrest, sequestration or distress in respect of a sum of, or
sums aggregating, $100,000 or more or the equivalent in another currency
Provided that
in
the case of the arrest of a Ship, it shall only be an Event of Default if
the Borrowers have not procured the release of that Ship by the date
falling 40 days after the commencement of the arrest;
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 a Borrower or the 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
|
|
(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)
|
any
Borrower or any Security Party ceases or suspends carrying on its business
or a part of its business which, in the opinion of the Majority Lenders,
is material in the context of this Agreement;
or
|
(i)
|
it
becomes unlawful or impossible:
|
|
(i)
|
for
any Borrower or any Security Party to discharge any liability under a
Finance Document or to comply with any other obligation which the Majority
Lenders consider material under a Finance Document;
or
|
|
(ii)
|
for
the Agent, the Security Trustee, the Lenders or the Swap Banks 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 Borrower to own, operate or
charter the Ship owned by it or to enable any Borrower or any Security
Party to comply with any provision which the Majority Lenders consider
material of a Finance Document or a Transaction Document 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, at any
time:
|
|
(i)
|
either
Borrower is not a wholly owned direct subsidiary of the Guarantor;
or
|
|
(ii)
|
a
change has occurred or probably has occurred after the date of this
Agreement in the beneficial or legal ownership of any of the shares in
either Borrower or any Security Party (other than the Charterers, the
Charter Guarantors and the Guarantor) or in the ultimate control of the
voting rights attaching to any of those shares;
or
|
|
(iii)
|
either
Charter Guarantor ceases to hold directly or indirectly at least 51 per
cent. of the ultimate beneficial ownership of, or at least 51 per cent. of
the ultimate control of the voting rights in, the shares of the Charterer
under the Charter guaranteed by that Charter Guarantor or ceases to have
sufficient control over that Charterer to remove and appoint a majority to
the board of directors of that Charterer and otherwise exercise control of
that Charterer; or
|
|
(iv)
|
Mr
Evangelos Pistiolis is not the chief executive officer of the Guarantor;
or
|
|
(v)
|
the
person(s) having control of the Guarantor on the date of this Agreement
cease to have sufficient control over the Guarantor to remove and appoint
a majority to the board of directors of the Guarantor and otherwise
exercise control of the Guarantor;
or
|
(l)
|
any
provision which the Majority Lenders consider material of a Finance
Document proves to have been or becomes invalid or unenforceable or a
Borrower or a Security Party repudiates any such provision, or a Security
Interest created by a Finance Document proves to have been or becomes
invalid or unenforceable or such a Security
Interest
|
(m)
|
the
security constituted by a Finance Document is in any way imperilled or in
jeopardy; or
|
(n)
|
any
Charter or any Charter Guarantee is terminated (other than by the
effluxion of time or the sale (with the consent of the Lenders) or Total
Loss of the relevant Ship), becomes invalid or unenforceable or otherwise
ceases to be in full force and effect for any reason or any amount payable
under any Charter or any Charter Guarantee is not paid when due and
payable or any other default (howsoever described) occurs under any
Charter or any Charter Guarantee;
or
|
(o)
|
an
Event of Default (as defined in section 14 of a Master Agreement) occurs;
or
|
(p)
|
a
Master Agreement is terminated, cancelled, suspended, rescinded or revoked
or otherwise ceases to remain in full force and effect for any reason
except with the consent of the Agent, acting with the authorisation of the
Majority Lenders; or
|
(q)
|
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 either
Borrower or the Guarantor; or
|
|
(ii)
|
any
accident or other event involving either Ship or another vessel owned,
chartered or operated by the
Guarantor,
|
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 Borrowers a notice stating that the Commitments and all other
obligations of each Lender to the Borrowers under this Agreement are
cancelled; and/or
|
|
(ii)
|
serve
on the Borrowers a notice stating that the Loan, all accrued interest and
all other amounts accrued or owing under this Agreement are immediately
due and payable or are due and payable on demand;
and/or
|
|
(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 and/or the Swap Counterparties 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 Borrowers 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 Borrowers or any Security Party under this Agreement and
every other Finance Document shall become immediately due and payable or,
as the case may be, payable on
demand.
|
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, each Swap Counterparty, the Security Trustee and each
Security Party a copy or the text of any notice which the Agent serves on
the Borrowers under Clause 19.2; but the notice shall become effective
when it is served on any 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 any Borrower or any Security Party with any form of
claim or defence.
|
19.7
|
Creditor Parties' rights
unimpaired.
Nothing in this Clause shall be taken to
impair or restrict the exercise of any right given to individual Lenders
or Swap Counterparties under a Finance Document, a Master Agreement 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 a Borrower
or a Security Party:
|
(a)
|
for
any loss caused by an exercise of rights under, or enforcement of a
Security Interest created by, a Finance Document or by any failure or
delay to exercise such a right or to enforce such a Security Interest;
or
|
(b)
|
as
mortgagee in possession or otherwise, for any income or principal amount
which might have been produced by or realised from any asset comprised in
such a Security Interest or for any reduction (however caused) in the
value of such an asset,
|
19.9
|
Relevant
Persons.
In this Clause 19, a "
Relevant Person
" means a
Borrower, a Security Party or any Principal
Subsidiary.
|
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.
|
19.11
|
Position of Swap
Counterparties.
Neither the Agent nor the Security
Trustee shall be obliged, in connection with any action taken or proposed
to be taken under or pursuant to the foregoing provisions of this Clause
19, to have any regard to the requirements of a Swap Counterparty except
to the extent that such Swap Counterparty is also a
Lender.
|
20
|
FEES
AND EXPENSES
|
20.1
|
Fees.
The
Borrowers shall pay to the Agent:
|
(a)
|
on
the date of this Agreement, an upfront fee of an amount previously agreed
in writing between the Agent and the Borrowers, for distribution among the
Lenders in the proportions agreed by the Agent and the
Lenders;
|
(b)
|
quarterly
in arrears (with the first payment due on the first end of calendar
quarter after the date of this Agreement) during the period from (and
including) the date of this Agreement to the earlier of (i) the second
Delivery Date and (ii) the end of the Availability Period and on the last
day of that period for the account of the Lenders, a commitment fee at the
rate of 0.50 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;
|
(c)
|
on
the date of this Agreement and on each anniversary thereof during the
Security Period, an annual agency fee of an amount previously agreed in
writing between the Agent and the Borrowers, such agency fee to be payable
to the Agent in advance for its own account;
and
|
(d)
|
the
other fees in the amounts, and on the dates, set out in the Fee
Letter.
|
20.2
|
Costs of negotiation,
preparation etc.
The Borrowers 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 Borrowers 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 Swap Banks, 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 Lender or the Swap Bank 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
|
Extraordinary management
time.
The Borrowers shall pay to the Agent on its demand
compensation in respect of the reasonable and documented amount of time
which the management of either Servicing Bank has spent in connection with
a matter covered by Clause 20.3 and which exceeds the amount of time which
would ordinarily be spent in the performance of the relevant Servicing
Bank's routine functions. Any such compensation shall be based
on such reasonable daily or hourly rates as the Agent
may
|
20.5
|
Documentary
taxes.
The Borrowers 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
Borrowers to pay such a tax.
|
20.6
|
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 Borrowers 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 Borrowers to make payment of any
amount due under a Finance Document on the due date or, if so payable, on
demand (after giving credit for any default interest paid by the Borrowers
on the amount concerned under Clause 7);
and
|
(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 Borrowers shall fully indemnify each
Creditor Party severally on their respective demands in respect of all
claims, expenses, liabilities and
|
(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 any 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 any Borrower or any Security Party,
whether in its liquidation, any arrangement involving it or otherwise;
or
|
(b)
|
obtaining
an order or judgment from any court or other tribunal;
or
|
(c)
|
enforcing
any such order or judgment,
|
21.5
|
Application to Master
Agreements.
For the avoidance of doubt, Clause 21.4 does
not apply in respect of sums due from a Borrower to a Swap Counterparty
under or in connection with a Master Agreement as to which sums the
provisions of section 8 (
Contractual Currency
)
of that Master Agreement shall
apply.
|
21.6
|
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.
|
21.7
|
Sums deemed due to a
Lender.
For the purposes of this Clause 21, a sum
payable by the Borrowers 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 Borrowers under a
Finance Document shall be paid:
|
(a)
|
without
any form of set-off, cross-claim or condition;
and
|
(b)
|
free
and clear of any tax deduction except a tax deduction which a Borrower is
required by law to make.
|
22.2
|
Grossing-up for
taxes.
If a Borrower is required by law to make a tax
deduction from any payment:
|
(a)
|
that
Borrower shall notify the Agent as soon as it becomes aware of the
requirement;
|
(b)
|
that
Borrower shall pay the tax deducted to the appropriate taxation authority
promptly, and in any event before any fine or penalty
arises;
|
(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 concerned 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.
|
22.5
|
Application to Master
Agreements.
For the avoidance of doubt, Clause 22 does
not apply in respect of sums due from a Borrower to a Swap Counterparty
under or in connection with a Master Agreement as to which sums the
provisions of section 2(d) (
Deduction or Withholding for
Tax
) of that Master Agreement shall
apply.
|
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
Borrowers, 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 Borrowers under
Clause 23.2, the Notifying Lender's Commitment shall terminate; and
thereupon or, if later, on the date specified in the Notifying Lender's
notice under Clause 23.1 as the
|
23.4
|
Mitigation
. If
circumstances arise which would result in a notification under
Clause 23.1 then, without in any way limiting the rights of the
Notifying Lender under Clause 23.3, the Notifying Lender shall use
reasonable endeavours to transfer its obligations, liabilities and rights
under this Agreement and the Finance Documents to another office or
financial institution not affected by the circumstances but the Notifying
Lender shall not be under any obligation to take any such action if, in
its opinion, to do would or might:
|
(a)
|
have
an adverse effect on its business, operations or financial condition;
or
|
(b)
|
involve
it in any activity which is unlawful or prohibited or any activity that is
contrary to, or inconsistent with, any regulation;
or
|
(c)
|
involve
it in any expense (unless indemnified to its satisfaction) or tax
disadvantage.
|
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,
|
24.2
|
Meaning of "increase
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 Borrowers of
claim for increased costs.
The Agent shall promptly
notify the Borrowers 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 Borrowers 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 Borrowers 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 Borrowers are not willing to continue
to compensate the Notifying Lender for the increased cost under Clause
24.4, the Borrowers may give the Agent not less than 14 days' notice of
their 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
Borrowers' 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;
and
|
(b)
|
on
the date specified in its notice of intended prepayment, the Borrowers
shall prepay (without premium or penalty) the Notifying Lender's
Contribution, together with accrued interest thereon at the applicable
rate plus the Margin.
|
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 a Borrower at any office in any
country of that Creditor Party in or towards satisfaction of any sum then
due from that 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 that
Borrower;
|
|
(ii)
|
convert
or translate all or any part of a deposit or other credit balance into
Dollars; and
|
|
(iii)
|
enter
into any other transaction or make any entry with regard to the credit
balance which the 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
|
25.3
|
Sums deemed due to a
Lender.
For the purposes of this Clause 25, a sum
payable by the Borrowers 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 any
Borrower.
|
26
|
TRANSFERS
AND CHANGES IN LENDING OFFICES
|
26.1
|
Transfer by
Borrowers.
No Borrower may, 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 consent of the Borrowers (such consent not to be
unreasonably withheld or delayed; and such consent not to be required in
connection with or in contemplation of a securitisation (or similar
transaction)) but otherwise without 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),
|
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 Borrowers, the Security
Parties, the Security Trustee, each of the other Lenders and each of the
Swap Banks;
|
(b)
|
on
behalf of the Transferee Lender, send to each Borrower and each Security
Party letters or faxes notifying them of the Transfer Certificate and
attaching a copy of it; and
|
(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.
No assignment or transfer of any right or
obligation of a Lender under any Finance Document is binding on, or
effective in relation to, any 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 Borrowers 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 any 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 any 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
|
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 Borrowers 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.
Each Borrower, the Security
Trustee, each Lender and each Swap Bank 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 $1,000 from the
Transferor Lender or (at the Agent's option) the Transferee
Lender.
|
26.12
|
Sub-participation;
securitisation; subrogation
assignment.
|
(a)
|
A
Lender may sub-participate or include in a securitisation or similar
transaction all or any part of its rights and/or obligations under or in
connection with the Finance Documents without the consent of, or any
consultation with or notice to, any 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.
|
(b)
|
Each
Borrower shall, and shall procure that each Security Party shall, do
everything desirable or necessary to assist the Creditor Parties (or any
of them) to achieve a successful (in the opinion of the Creditor Parties
concerned) securitisation (or similar transaction)
Provided only
that the
Borrowers' third party costs are met by the Creditor Parties
concerned.
|
26.13
|
Disclosure of
information.
In relation to any information which a
Creditor Party has received in relation to either Borrower, any Security
Party or their affairs under or in connection with any Finance Document or
any Master Agreement, that Creditor Party may disclose any such
information as it considers in its absolute discretion appropriate
to:
|
(a)
|
a
potential Transferee Lender, sub-participant, affiliate, any other
assignee or transferee or any other person who may propose entering into a
contractual relation with that Creditor Party in relation to this
Agreement; and/or
|
(b)
|
any
direct or indirect subsidiary, any direct or indirect parent company
(including, for the avoidance of doubt in the case of the DVB Group, DZ
Bank A.G.), any affiliate or any other company in its group;
and/or
|
(c)
|
any
authorities or any party to any Finance Document or any professional
adviser to that Creditor Party;
and/or
|
(d)
|
any
other person regarding the funding, operational arrangement or other
transaction in relation thereto,
|
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 Borrowers 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 Borrowers, the Agent and the Majority Lenders
otherwise agree, the Agent, acting on the instructions of the Majority
Lenders, and after consulting the Borrowers, 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
|
Syndication.
|
(a)
|
If
the Borrowers agree to the syndication of this Agreement but after a
period of at least 3 months after the date of this Agreement has elapsed,
it appears likely (in the Agent's reasonable opinion) that the normal
syndication process of this Agreement on the basis of the agreed,
structure, terms and pricing will not be successful, the Borrowers
acknowledge that the Agent has the right at any time to change any or all
of the terms, structure and/or pricing of the Loan if the Agent determines
that such changes are advisable in order to ensure a successful
syndication of this Agreement.
|
(b)
|
If
the Agent determines such changes are necessary, the Agent will consult
with the Borrowers for a period of up to 5 Business Days about such
changes and, following such period of consultation but subject to Clause
26.17(c), the Borrowers will and will procure that each Security Party
will enter into any documentation in a form required by the Agent to
implement such changes required by the Agent (including, without
limitation, any documentation required to amend the Finance Documents and
to secure the Borrowers' and the Security Parties' liabilities and
obligations under the Finance Documents as amended and/or
supplemented).
|
(c)
|
If
either Borrower or any Security Party does not agree with such changes
required by the Agent, the Borrowers may give the Agent within a period of
5 days following the expiry of the consultation period not less than 14
days' notice of its intention to terminate the Commitments and prepay the
Loan in full at the end of the current Interest
Period.
|
(d)
|
A
notice under Clause 26.17(c) shall be irrevocable; the Agent shall
promptly notify the Lenders of the Borrowers' notice of intended
prepayment; and:
|
|
(i)
|
on
the date on which the Agent serves that notice, the Total Commitments
shall be cancelled; and
|
|
(ii)
|
on
the date specified in its notice of intended prepayment, the Borrowers
shall prepay (without premium or penalty) the Loan, together with accrued
interest thereon at the applicable rate plus the
Margin.
|
(e)
|
Clause
8 shall apply in relation to any such
prepayment.
|
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 Borrowers, 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 and every Swap Bank":
|
(a)
|
a
change in the Margin or in the definition of
LIBOR;
|
(b)
|
a
change to the date for, the amount of, any payment of principal, interest,
fees, or other sum payable under this
Agreement;
|
(c)
|
a
change to any Lender's Commitment;
|
(d)
|
an
extension of Availability Period;
|
(e)
|
a
change to the definition of "
Majority Lenders
" or
"
Finance
Documents
";
|
(f)
|
a
change to the preamble or to Clause 2, 3, 4, 5.1, 17, 18 or
30;
|
(g)
|
a
change to this Clause 27;
|
(h)
|
any
release of, or material variation to, a Security Interest, guarantee,
indemnity or subordination arrangement set out in a Finance Document;
and
|
(i)
|
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 a Borrower or a Security Party of an obligation under a Finance
Document or the general law; or
|
(d)
|
any
right or remedy conferred by any Finance Document or by the general
law,
|
|
and
there shall not be implied into any Finance Document any term or condition
requiring any such provision to be enforced, or such right or remedy to be
exercised, within a certain or reasonable
time.
|
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 or fax shall be
sent:
|
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
|
English
language.
Any notice under or in connection with a
Finance Document shall be in
English.
|
28.9
|
Meaning of
"notice".
In this Clause 28, "
notice
" includes any
demand, consent, authorisation, approval, instruction, waiver or other
communication.
|
29
|
JOINT
AND SEVERAL LIABILITY
|
29.1
|
General.
All
liabilities and obligations of the Borrowers under this Agreement shall,
whether expressed to be so or not, be several and, if and to the extent
consistent with Clause 29.2, joint.
|
29.2
|
No impairment of Borrower's
obligations.
The liabilities and obligations of a
Borrower shall not be impaired by:
|
(a)
|
this
Agreement being or later becoming void, unenforceable or illegal as
regards any other Borrower;
|
(b)
|
any
Lender or the Security Trustee entering into any rescheduling, refinancing
or other arrangement of any kind with any other
Borrower;
|
(c)
|
any
Lender or the Security Trustee releasing any other Borrower or any
Security Interest created by a Finance Document;
or
|
(d)
|
any
combination of the foregoing.
|
29.3
|
Principal
debtors.
Each Borrower declares that it is and will,
throughout the Security Period, remain a principal debtor for all amounts
owing under this Agreement and the Finance Documents and no Borrower shall
in any circumstances be construed to be a surety for the obligations of
any other Borrower under this
Agreement.
|
29.4
|
Subordination.
Subject
to Clause 29.5, during the Security Period, no Borrower
shall:
|
(a)
|
claim
any amount which may be due to it from any other Borrower whether in
respect of a payment made, or matter arising out of, this Agreement or any
Finance Document, or any matter unconnected with this Agreement or any
Finance Document; or
|
(b)
|
take
or enforce any form of security from any other Borrower for such an
amount, or in any other way seek to have recourse in respect of such an
amount against any asset of any other Borrower;
or
|
(c)
|
set
off such an amount against any sum due from it to any other Borrower;
or
|
(d)
|
prove
or claim for such an amount in any liquidation, administration,
arrangement or similar procedure involving any other Borrower or other
Security Party; or
|
(e)
|
exercise
or assert any combination of the
foregoing.
|
29.5
|
Borrower's required
action.
If during the Security Period, the Agent, by
notice to a Borrower, requires it to take any action referred to in
paragraphs (a) to (d) of Clause 29.4, in relation to any other Borrower,
that Borrower shall take that action as soon as practicable after
receiving the Agent's notice.
|
30
|
SUPPLEMENTAL
|
30.1
|
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.
|
30.2
|
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.
|
30.3
|
Counterparts.
A
Finance Document may be executed in any number of
counterparts.
|
30.4
|
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.
|
31
|
LAW
AND JURISDICTION
|
31.1
|
English
law.
This Agreement shall be governed by, and construed
in accordance with, English law.
|
31.2
|
Exclusive English
jurisdiction.
Subject to Clause 31.3, the courts of
England shall have exclusive jurisdiction to settle any disputes which may
arise out of or in connection with this
Agreement.
|
31.3
|
Choice of forum for the
exclusive benefit of the Creditor Parties.
Clause 31.2
is for the exclusive benefit of the Creditor Parties, each of which
reserves the right:
|
(a)
|
to
commence proceedings in relation to any matter which arises out of or in
connection with this Agreement in the courts of any country other than
England and which have or claim jurisdiction to that matter;
and
|
(b)
|
to
commence such proceedings in the courts of any such country or countries
concurrently with or in addition to proceedings in England or without
commencing proceedings in England.
|
31.4
|
Process
agent.
Each Borrower irrevocably appoints Top Tankers
(U.K.) Limited at its registered office for the time being, presently at
3rd Floor, 8 Duke Street, London W1U 3EW, to act as its agent to
receive and accept on its behalf any process or other document relating to
any proceedings in the English courts which are connected with this
Agreement.
|
31.5
|
Creditor Party rights
unaffected.
Nothing in this Clause 31 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.
|
31.6
|
Meaning of
"proceedings".
In this Clause 31, "
proceedings
" means
proceedings of any kind, including an application for a provisional or
protective measure.
|
Lender
|
Lending
Office
|
Commitment
(US
Dollars)
|
DVB
Bank America N.V.
|
Zeelandia
Office Park
Kaya
W.F.G. Mensing 14
P.O.
Box 3107
Curaçao
Netherlands
Antilles
|
80,000,000
|
Swap
Bank
|
Booking
Office
|
DVB Bank SE |
Platz
der Republik 6
D-60325 Frankfurt am Main
Germany
|
Attention: Loans Administration |
[
date
]
|
1
|
We
refer to the loan agreement (the "
Loan Agreement
") dated
[
l
] October
2008 and made between ourselves, as Borrowers, the Lenders referred to
therein, the Swap Banks referred to therein, and yourselves as Agent and
as Security Trustee in connection with a facility of up to
US$80,000,000. Terms defined in the Loan Agreement have their
defined meanings when used in this Drawdown
Notice.
|
2
|
We
request to borrow an Advance relating to the Ship with hull number
S-[
l
] as
follows:
|
(a)
|
Amount:
US$[
l
];
|
(b)
|
Drawdown
Date: [
l
];
|
(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.
|
5
|
[We
authorise you to deduct the fees referred to in Clause 20 from the amount
of the Advance.]
|
1
|
A
duly executed original of each Finance Document (and of each document
required to be delivered by each Finance Document) other than those
referred to in Part B or Part C.
|
2
|
Copies
of the constitutional documents of each Borrower and each Security
Party.
|
3
|
Copies
of resolutions of the shareholders and directors of each Borrower and each
Security Party authorising the execution of each of the Finance Documents
and the Transaction Documents to which that Borrower or that Security
Party is a party and, in the case of a Borrower, authorising named
officers to give the Drawdown Notices and other notices under this
Agreement and ratifying the execution of the Transaction Documents to
which it is a party.
|
4
|
The
original of any power of attorney under which any Finance Document is
executed on behalf of a Borrower or a Security
Party.
|
5
|
Copies
of all consents which any Borrower or any Security Party requires to enter
into, or make any payment under, any Finance Document or any Transaction
Document.
|
6
|
Copies
of each Shipbuilding Contract and of all documents signed or issued by any
party to that Shipbuilding Contract under or in connection with
it.
|
7
|
Such
documentary evidence as the Agent and its legal advisers may require in
relation to the due authorisation and execution by any party to a
Shipbuilding Contract of that Shipbuilding Contract and of all documents
to be executed by that party under that Shipbuilding
Contract.
|
8
|
The
original of each Refund Guarantee together with such documentary evidence
as the Agent and its legal advisers may require in relation to the due
authorisation and execution by the Refund Guarantor of each Refund
Guarantee.
|
9
|
Documentary
evidence that the agent for service of process named in Clause 31 has
accepted its appointment.
|
10
|
Favourable
legal opinions from lawyers appointed by the Agent on such matters
concerning the laws of Liberia, the Marshall Islands and Korea and such
other relevant jurisdictions as the Agent may
require.
|
11
|
A
duly completed DVB LAM Form signed by the
Borrowers.
|
12
|
All
documentation required by each Lender in respect of either Borrower or any
Security Party pursuant to that Lender's "Know your customer"
requirements.
|
13
|
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
|
A
duly executed original of the Mortgage, the Quadripartite Agreement (if
not already executed), the Charter Assignment (if not already executed),
the Account Security Deed and of the General Assignment relating to Ship A
(and of each document to be delivered by each of
them).
|
2
|
The
originals of any mandates or other documents required in connection with
the opening or operation of the Earnings Account relation to Ship
A.
|
3
|
Documentary
evidence that:
|
(a)
|
Ship
A has been unconditionally delivered by the Builder to, and accepted by,
Banksy under the Shipbuilding Contract, and the full purchase price
payable under the Shipbuilding Contract (in addition to the part to be
financed by the Loan) has been duly
paid;
|
(b)
|
Ship
A has been unconditionally delivered by Banksy to, and accepted by, the
relevant Charterer under the
Charter;
|
(c)
|
Ship
A is definitively and permanently registered in the name of Banksy under
Maltese flag;
|
(d)
|
Ship
A is in the absolute and unencumbered ownership of Banksy save as
contemplated by the Finance
Documents;
|
(e)
|
Ship
A maintains the class set out in article 1(b)(i) of the Shipbuilding
Contract with Det norske Veritas free of all recommendations and
conditions of such Classification Society (with the Agent being advised of
such class and classification society at least 15 days prior to the
Drawdown Date);
|
(f)
|
the
Mortgage relating to Ship A has been duly registered against Ship A as a
valid first priority Maltese ship mortgage in accordance with the laws of
Malta; and
|
(g)
|
Ship
A is insured in accordance with the provisions of this Agreement and all
requirements therein in respect of insurances have been complied
with.
|
4
|
Copies
of the Document of Compliance relating to Ship A and of Ship A's Safety
Management Certificate (together with any other details of the applicable
safety management system which the Agent requires), ISSC and
IAPPC.
|
5
|
Favourable
legal opinions from lawyers appointed by the Agent on such matters
concerning the law of Malta, Liberia and such other relevant jurisdictions
as the Agent may require.
|
6
|
A
favourable opinion from an independent insurance consultant acceptable to
the Agent on such matters relating to the insurances for Ship A as the
Agent may require (with the Agent being advised with whom such insurances
will be placed and upon what main terms they will be effected at least 15
days prior to the Drawdown Date).
|
7
|
Such
documentary evidence as the Agent and its legal advisers may require in
relation to the due authorisation and execution by any party to the
Quadripartite Agreement of that Quadripartite Agreement and of all
documents to be executed by that party under that Quadripartite
Agreement.
|
8
|
Copies
of all charters of Ship A and related
documents.
|
9
|
A
survey report addressed to the Agent and the Lenders, stated to be for the
purposes of this Agreement and dated not earlier than 7 days before the
Drawdown Date from an independent marine surveyor selected by the Agent in
respect of the physical condition of the
Ship.
|
10
|
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
|
A
duly executed original of the Mortgage, the Quadripartite Agreement (if
not already executed), the Charter Assignment (if not already executed),
the Account Security Deed and of the General Assignment relating to Ship B
(and of each document to be delivered by each of
them).
|
2
|
The
originals of any mandates or other documents required in connection with
the opening or operation of the Earnings Account relation to Ship
B.
|
3
|
Documentary
evidence that:
|
(a)
|
Ship
B has been unconditionally delivered by the Builder to, and accepted by,
Hongbo under the Shipbuilding Contract, and the full purchase price
payable under the Shipbuilding Contract (in addition to the part to be
financed by the Loan) has been duly
paid;
|
(b)
|
Ship
B has been unconditionally delivered by Hongbo to, and accepted by, the
relevant Charterer under the
Charter;
|
(c)
|
Ship
B is definitively and permanently registered in the name of Hongbo under
Liberian flag;
|
(d)
|
Ship
B is in the absolute and unencumbered ownership of Hongbo save as
contemplated by the Finance
Documents;
|
(e)
|
Ship
B maintains the class set out in article 1(b)(i) of the Shipbuilding
Contract with Det norske Veritas free of all recommendations and
conditions of such Classification Society (with the Agent being advised of
such class and classification society at least 15 days prior to the
Drawdown Date);
|
(f)
|
the
Mortgage relating to Ship B has been duly recorded against Ship B as a
valid first preferred Liberian ship mortgage in accordance with the laws
of Liberia; and
|
(g)
|
Ship
B is insured in accordance with the provisions of this Agreement and all
requirements therein in respect of insurances have been complied
with.
|
4
|
Copies
of the Document of Compliance relating to Ship B and of Ship B's Safety
Management Certificate (together with any other details of the applicable
safety management system which the Agent requires), ISSC and
IAPPC.
|
5
|
Favourable
legal opinions from lawyers appointed by the Agent on such matters
concerning the law of Liberia and such other relevant jurisdictions as the
Agent may require.
|
6
|
A
favourable opinion from an independent insurance consultant acceptable to
the Agent on such matters relating to the insurances for Ship B as the
Agent may require (with the Agent being advised with whom such insurances
will be placed and upon what main terms they will be effected at least 15
days prior to the Drawdown Date).
|
7
|
Such
documentary evidence as the Agent and its legal advisers may require in
relation to the due authorisation and execution by any party to the
Quadripartite Agreement of that Quadripartite Agreement and of all
documents to be executed by that party under that Quadripartite
Agreement.
|
8
|
Copies
of all charters of Ship B and related
documents.
|
9
|
A
survey report addressed to the Agent and the Lenders, stated to be for the
purposes of this Agreement and dated not earlier than 7 days before the
Drawdown Date from an independent marine surveyor selected by the Agent in
respect of the physical condition of the
Ship.
|
10
|
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:
|
DVB
Bank America N.V. for itself and for and on behalf of each Borrower, each
Security Party, the Security Trustee, each Lender and each Swap Bank, as
defined in the Loan Agreement referred to
below.
|
1
|
This
Certificate relates to a Loan Agreement (the "
Loan Agreement
") dated
[
l
] October 2008
and made between (1) Banksy Shipping Company Limited and Hongbo Shipping
Company Limited as joint and several borrowers (together, the "
Borrowers
"), (2) the
banks and financial institutions named therein as Lenders, (3) the banks
and financial institutions named therein as Swap Banks, (4) DVB Bank
America N.V. as Agent and (5) DVB Bank America N.V. as Security Trustee
for a loan facility of up to
US$80,000,000.
|
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, each Borrower, each Security Party, the Security Trustee, each
Lender and each Swap Bank;
|
|
"
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 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 above; 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 of the other
Finance Documents;
|
(b)
|
agrees
that it will have no rights of recourse on any ground against either the
Transferor, the Agent, the Security Trustee, any Lender or any Swap Bank
in the event that:
|
|
(i)
|
any
of the Finance Documents prove to be invalid or
ineffective;
|
|
(ii)
|
any
Borrower or any Security Party fails to observe or perform its
obligations, or to discharge its liabilities, under any of the Finance
Documents;
|
|
(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 Borrowers 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 Lender or any Swap Bank 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: | Date: |
By: | 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.
|
Attn: Loans Administration |
[
date
]
|
1
|
the
Loan Agreement;
|
2
|
the
Master Agreement dated as of [
l
] October 2008
made between ourselves and DVB Bank SE;
and
|
3
|
a
Confirmation delivered pursuant to the said Master Agreement dated [
l
] and addressed by
DVB Bank SE to us.
|
Attn: Loans Administration |
[
date
]
|
SIGNED
by
|
)
|
/s/ Eirini Alexandropoulou |
)
|
for
and on behalf of
|
)
|
BANKSY
SHIPPING
|
)
|
COMPANY
LIMITED
|
)
|
in
the presence of:
|
)
|
SIGNED
by
|
)
|
/s/ Eirini Alexandropoulou |
)
|
for
and on behalf of
|
)
|
HONGBO
SHIPPING
|
)
|
COMPANY
LIMITED
|
)
|
in
the presence of:
|
)
|
SIGNED
by
|
)
|
/s/ Alexandra Michalopoulou |
)
|
for
and on behalf of
|
)
|
DVB
BANK AMERICA N.V.
|
)
|
in
the presence of:
|
)
|
SIGNED
by
|
)
|
/s/ Alexandra Michalopoulou |
)
|
for
and on behalf of
|
)
|
DVB
BANK SE
|
)
|
in
the presence of:
|
)
|
SIGNED
by
|
)
|
/s/ Alexandra Michalopoulou |
)
|
for
and on behalf of
|
)
|
DVB
BANK AMERICA N.V.
|
)
|
in
the presence of:
|
)
|
SIGNED
by
|
)
|
/s/ Alexandra Michalopoulou |
)
|
for
and on behalf of
|
)
|
DVB
BANK AMERICA N.V.
|
)
|
in
the presence of:
|
)
|
/s/Evangelos
Pistiolis
|
/s/
Alexandros Tsirikos
|
(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.
|
/s/
Evangelos Pistiolis
|
(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.
|
/s/
Alexandros Tsirikos
|