DIANA SHIPPING INC.
|
(Exact name of Registrant as specified in its charter)
|
Diana Shipping Inc.
|
(Translation of Registrant's name into English)
|
Republic of The Marshall Islands
|
(Jurisdiction of incorporation or organization)
|
Pendelis 16, 175 64 Palaio Faliro, Athens, Greece
|
(Address of principal executive offices)
|
Mr. Ioannis Zafirakis
|
Tel: + 30-210-9470-100, Fax: + 30-210-9470-101
|
E-mail: izafirakis@dianashippinginc.com
|
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
|
None
|
(Title of Class)
|
None
|
☐
|
Yes |
☒
|
No |
☐
|
Yes |
☒
|
No |
☒
|
Yes |
☐
|
No |
☒
|
Yes |
☐
|
No |
Large accelerated filer ☐
|
Accelerated filer ☒
|
Non-accelerated filer ☐
|
U.S. GAAP ☒
|
International Financial Reporting Standards as issued
by the International Accounting Standards Board ☐
|
Other ☐
|
☐ Item 17
|
☐
Item 18
|
☐
|
Yes |
☒
|
No |
☐
|
Yes |
☐
|
No |
FORWARD-LOOKING STATEMENTS
|
4
|
|
PART I
|
|
|
Item 1.
|
Identity of Directors, Senior Management and Advisers
|
5
|
Item 2.
|
Offer Statistics and Expected Timetable
|
5
|
Item 3.
|
Key Information
|
5
|
Item 4.
|
Information on the Company
|
33
|
Item 4A.
|
Unresolved Staff Comments
|
55
|
Item 5.
|
Operating and Financial Review and Prospects
|
55
|
Item 6.
|
Directors, Senior Management and Employees
|
76
|
Item 7.
|
Major Shareholders and Related Party Transactions
|
81
|
Item 8.
|
Financial Information
|
84
|
Item 9.
|
The Offer and Listing
|
86
|
Item 10.
|
Additional Information
|
87
|
Item 11.
|
Quantitative and Qualitative Disclosures about Market Risk
|
98
|
Item 12.
|
Description of Securities Other than Equity Securities
|
99
|
PART II
|
||
Item 13.
|
Defaults, Dividend Arrearages and Delinquencies
|
100
|
Item 14.
|
Material Modifications to the Rights of Security Holders and Use of Proceeds
|
100
|
Item 15.
|
Controls and Procedures
|
100
|
Item 16A.
|
Audit Committee Financial Expert
|
101
|
Item 16B.
|
Code of Ethics
|
101
|
Item 16C.
|
Principal Accountant Fees and Services
|
102
|
Item 16D.
|
Exemptions from the Listing Standards for Audit Committees
|
102
|
Item 16E.
|
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
|
102
|
Item 16F.
|
Change in Registrant's Certifying Accountant
|
103
|
Item 16G.
|
Corporate Governance
|
103
|
Item 16H. |
Mine Safety Disclosure
|
104 |
|
|
|
PART III
|
||
Item 17.
|
Financial Statements
|
105
|
Item 18.
|
Financial Statements
|
105
|
Item 19.
|
Exhibits
|
105
|
As of and for the
|
||||||||||||||||||||
Year Ended December 31,
|
||||||||||||||||||||
2014
|
2013
|
2012
|
2011
|
2010
|
||||||||||||||||
(in thousands of U.S. dollars,
|
||||||||||||||||||||
except for share and per share data, fleet data and average daily results)
|
||||||||||||||||||||
Statement of Operations Data:
|
||||||||||||||||||||
Time charter revenues
|
$
|
175,576
|
$
|
164,005
|
$
|
220,785
|
$
|
255,669
|
$
|
275,448
|
||||||||||
Other revenues
|
-
|
447
|
2,447
|
1,117
|
-
|
|||||||||||||||
Voyage expenses
|
10,665
|
8,119
|
8,274
|
10,597
|
12,392
|
|||||||||||||||
Vessel operating expenses
|
86,923
|
77,211
|
66,293
|
55,375
|
52,585
|
|||||||||||||||
Depreciation and amortization of deferred charges
|
70,503
|
64,741
|
62,010
|
55,278
|
53,083
|
|||||||||||||||
General and administrative expenses
|
26,217
|
23,724
|
24,913
|
25,123
|
25,347
|
|||||||||||||||
Foreign currency gains
|
(528
|
)
|
(690
|
)
|
(1,374
|
)
|
(503
|
)
|
(1,598
|
)
|
||||||||||
Operating income / (loss)
|
(18,204
|
)
|
(8,653
|
)
|
63,116
|
110,916
|
133,639
|
|||||||||||||
Interest and finance costs
|
(8,427
|
)
|
(8,140
|
)
|
(7,618
|
)
|
(4,924
|
)
|
(5,213
|
)
|
||||||||||
Interest and other income
|
3,627
|
1,800
|
1,432
|
1,033
|
920
|
|||||||||||||||
As of and for the
|
||||||||||||||||||||
Year Ended December 31,
|
||||||||||||||||||||
2014
|
2013
|
2012
|
2011
|
2010
|
||||||||||||||||
(in thousands of U.S. dollars,
|
||||||||||||||||||||
except for share and per share data, fleet data and average daily results)
|
||||||||||||||||||||
Loss from derivative instruments
|
68
|
(118
|
)
|
(518
|
)
|
(737
|
)
|
(1,477
|
)
|
|||||||||||
Income / (loss) from investment in Diana Containerships Inc.
|
12,668
|
(6,094
|
)
|
(1,773
|
)
|
1,207
|
-
|
|||||||||||||
Net income / (loss)
|
$
|
(10,268
|
)
|
$
|
(21,205
|
)
|
$
|
54,639
|
$
|
107,495
|
$
|
127,869
|
||||||||
Loss assumed by non controlling interests
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
2
|
$
|
910
|
||||||||||
Preferred dividends
|
$
|
(5,080
|
)
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
|||||||||
Net income / (loss) attributed to Diana Shipping Inc.
|
$
|
(15,348
|
)
|
$
|
(21,205
|
)
|
$
|
54,639
|
$
|
107,497
|
$
|
128,779
|
||||||||
Earnings / (loss) per common share, basic
|
$
|
(0.19
|
)
|
$
|
(0.26
|
)
|
$
|
0.67
|
$
|
1.33
|
$
|
1.60
|
||||||||
Earnings / (loss) per common share, diluted
|
$
|
(0.19
|
)
|
$
|
(0.26
|
)
|
$
|
0.67
|
$
|
1.33
|
$
|
1.59
|
||||||||
Weighted average number of common shares, basic
|
81,292,290
|
81,328,390
|
81,083,485
|
81,081,774
|
80,682,770
|
|||||||||||||||
Weighted average number of common shares, diluted
|
81,292,290
|
81,328,390
|
81,083,485
|
81,124,348
|
80,808,232
|
|||||||||||||||
Balance Sheet Data:
|
||||||||||||||||||||
Cash and cash equivalents
|
$
|
218,901
|
$
|
240,633
|
$
|
446,624
|
$
|
416,674
|
$
|
345,414
|
||||||||||
Total current assets
|
238,234
|
251,868
|
466,986
|
432,691
|
354,649
|
|||||||||||||||
Vessels' net book value
|
1,373,133
|
1,320,375
|
1,211,138
|
1,046,719
|
1,160,850
|
|||||||||||||||
Property and equipment, net
|
23,887
|
22,826
|
22,774
|
21,659
|
21,842
|
|||||||||||||||
Total assets
|
1,787,122
|
1,701,981
|
1,742,802
|
1,604,471
|
1,585,389
|
|||||||||||||||
Total current liabilities
|
98,092
|
62,297
|
61,477
|
48,095
|
32,510
|
|||||||||||||||
Deferred revenue, non-current portion
|
-
|
-
|
-
|
-
|
4,227
|
|||||||||||||||
Long-term debt (including current portion), net of deferred financing costs
|
484,256
|
431,557
|
459,112
|
373,338
|
383,623
|
|||||||||||||||
Total stockholders' equity
|
1,282,226
|
1,253,392
|
1,266,424
|
1,208,878
|
1,169,930
|
Cash Flow Data:
|
||||||||||||||||||||
Net cash provided by operating activities
|
$
|
44,910
|
$
|
67,400
|
$
|
119,886
|
$
|
154,230
|
$
|
178,292
|
||||||||||
Net cash used in investing activities
|
(152,513
|
)
|
(245,156
|
)
|
(169,913
|
)
|
(90,428
|
)
|
(252,313
|
)
|
||||||||||
Net cash provided by / (used in) financing activities
|
85,871
|
(28,235
|
)
|
79,977
|
7,458
|
136,997
|
Fleet Data:
|
||||||||||||||||||||
Average number of vessels (1)
|
37.9
|
33.0
|
27.6
|
23.6
|
22.9
|
|||||||||||||||
Number of vessels at year-end
|
39.0
|
36.0
|
30.0
|
24.0
|
25.0
|
|||||||||||||||
Weighted average age of dry bulk vessels at year-end (in years)
|
7.1
|
6.6
|
6.0
|
6.3
|
5.4
|
|||||||||||||||
Weighted average age of containerships at year-end (in years)
|
-
|
-
|
-
|
-
|
0.6
|
As of and for the
|
||||||||||||||||||||
Year Ended December 31,
|
||||||||||||||||||||
2014
|
2013
|
2012
|
2011
|
2010
|
||||||||||||||||
Ownership days (2)
|
13,822
|
12,049
|
10,119
|
8,609
|
8,348
|
|||||||||||||||
Available days (3)
|
13,650
|
12,029
|
9,998
|
8,474
|
8,208
|
|||||||||||||||
Operating days (4)
|
13,564
|
11,944
|
9,865
|
8,418
|
8,180
|
|||||||||||||||
Fleet utilization (5)
|
99.4
|
%
|
99.3
|
%
|
98.7
|
%
|
99.3
|
%
|
99.7
|
%
|
Average Daily Results:
|
||||||||||||||||||||
Time charter equivalent (TCE) rate (6)
|
$
|
12,081
|
$
|
12,959
|
$
|
21,255
|
$
|
28,920
|
$
|
32,049
|
||||||||||
Daily vessel operating expenses (7)
|
6,289
|
6,408
|
6,551
|
6,432
|
6,299
|
(1) | 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 the period. |
(2) | Ownership days are the aggregate number of days in a period during which each vessel in our fleet has been owned by us. Ownership days are an indicator of the size of our fleet over a period and affect both the amount of revenues and the amount of expenses that we record during a period. |
(3) | Available days are the number of our ownership days less the aggregate number of days that our vessels are off-hire due to scheduled repairs or repairs under guarantee, vessel upgrades or special surveys and the aggregate amount of time that we spend positioning our vessels for such events. The shipping industry uses available days to measure the number of days in a period during which vessels should be capable of generating revenues. |
(4) | Operating days are the number of available days in a period less the aggregate number of days that our vessels are off-hire due to any reason, including unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a period during which vessels actually generate revenues. |
(5) | We calculate fleet utilization by dividing the number of our operating days during a period by the number of our available days during the period. The shipping industry uses fleet utilization to measure a company's efficiency in finding suitable employment for its vessels and minimizing the amount of days that its vessels are off-hire for reasons other than scheduled repairs or repairs under guarantee, vessel upgrades, special surveys or vessel positioning for such events. |
(6) | Time charter equivalent rates, or TCE rates, are defined as our time charter revenues less voyage expenses during a period divided by the number of our available days during the period, which is consistent with industry standards. Voyage expenses include port charges, bunker (fuel) expenses, canal charges and commissions. TCE rate is a non-GAAP measure, and management believes it is useful to investors because it is a standard shipping industry performance measure used primarily to compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage charters, because charter hire rates for vessels on voyage charters are generally not expressed in per day amounts while charter hire rates for vessels on time charters are generally expressed in such amounts. The following table reflects the calculation of our TCE rates for the periods presented. |
Year Ended December 31,
|
||||||||||||||||||||
2014
|
2013
|
2012
|
2011
|
2010
|
||||||||||||||||
(in thousands of U.S. dollars, except for
|
||||||||||||||||||||
TCE rates, which are expressed in U.S. dollars, and available days)
|
||||||||||||||||||||
Time charter revenues
|
$
|
175,576
|
$
|
164,005
|
$
|
220,785
|
$
|
255,669
|
$
|
275,448
|
||||||||||
Less: voyage expenses
|
(10,665
|
)
|
(8,119
|
)
|
(8,274
|
)
|
(10,597
|
)
|
(12,392
|
)
|
||||||||||
Time charter equivalent revenues
|
$
|
164,911
|
$
|
155,886
|
$
|
212,511
|
$
|
245,072
|
$
|
263,056
|
||||||||||
Available days
|
13,650
|
12,029
|
9,998
|
8,474
|
8,208
|
|||||||||||||||
Time charter equivalent (TCE) rate
|
$
|
12,081
|
$
|
12,959
|
$
|
21,255
|
$
|
28,920
|
$
|
32,049
|
(7) | Daily vessel operating expenses, which include crew wages and related costs, the cost of insurance, expenses relating to repairs and maintenance, the costs of spares and consumable stores, tonnage taxes and other miscellaneous expenses, are calculated by dividing vessel operating expenses by ownership days for the relevant period. |
Ÿ | supply and demand for energy resources, commodities, semi-finished and finished consumer and industrial products; |
Ÿ | changes in the exploration or production of energy resources, commodities, semi-finished and finished consumer and industrial products; |
Ÿ | the location of regional and global exploration, production and manufacturing facilities; |
Ÿ | the location of consuming regions for energy resources, commodities, semi-finished and finished consumer and industrial products; |
Ÿ | the globalization of production and manufacturing; |
Ÿ | global and regional economic and political conditions, including armed conflicts and terrorist activities; embargoes and strikes; |
Ÿ | natural disasters and other disruptions in international trade; |
Ÿ | developments in international trade; |
Ÿ | changes in seaborne and other transportation patterns, including the distance cargo is transported by sea; |
Ÿ | environmental and other regulatory developments; |
Ÿ | currency exchange rates; and |
Ÿ | weather. |
Ÿ | the number of newbuilding deliveries; |
Ÿ | the scrapping rate of older vessels; |
Ÿ | vessel casualties; and |
Ÿ | the number of vessels that are out of service, namely those that are laid-up, drydocked, awaiting repairs or otherwise not available for hire. |
· | the prevailing level of charter hire rates; |
· | general economic and market conditions affecting the shipping industry; |
· | competition from other shipping companies and other modes of transportation; |
· | the types, sizes and ages of vessels; |
· | the supply and demand for vessels; |
· | applicable governmental regulations; |
· | technological advances; and |
· | the cost of newbuildings. |
· | locate and acquire suitable vessels; |
· | identify and consummate acquisitions or joint ventures; |
· | enhance our customer base; |
· | manage our expansion; and |
· | obtain required financing on acceptable terms. |
· | pay dividends if we do not repay amounts drawn under our loan facilities, if there is a default under the loan facilities or if the payment of the dividend would result in a default or breach of a loan covenant; |
· | incur additional indebtedness, including through the issuance of guarantees; |
· | change the flag, class or management of our vessels; |
· | create liens on our assets; |
· | sell our vessels; |
· | enter into a time charter or consecutive voyage charters that have a term that exceeds, or which by virtue of any optional extensions may exceed a certain period; |
· | merge or consolidate with, or transfer all or substantially all our assets to, another person; and |
· | enter into a new line of business. |
· | marine disaster; |
· | terrorism; |
· | environmental accidents; |
· | cargo and property losses or damage; |
· | business interruptions caused by mechanical failure, human error, war, terrorism, political action in various countries, labor strikes or adverse weather conditions; and |
· | piracy. |
· | 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 dry bulk shipping industry; |
· | market conditions in the dry bulk shipping industry; |
· | changes in government regulation; |
· | shortfalls in our operating results from levels forecast by securities analysts; |
· | announcements concerning us or our competitors; and |
· | the general state of the securities market. |
· | 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 a majority of the outstanding shares of our common stock entitled to vote for the directors; |
· | prohibiting shareholder action by written consent; |
· | 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. |
· | changes in our operating cash flow, capital expenditure requirements, working capital requirements and other cash needs; |
· | restrictions under our existing or future credit facilities or any future debt securities on our ability to pay dividends if an event of default has occurred and is continuing or if the payment of the dividend would result in an event of default, or under certain facilities if it would result in the breach of certain financial covenants; |
· | the amount of any cash reserves established by our board of directors; and |
· | restrictions under Marshall Islands law, which generally prohibits the payment of dividends other than from surplus (retained earnings and the excess of consideration received for the sale of shares above the par value of the shares) or while a company is insolvent or would be rendered insolvent by the payment of such a dividend. |
Vessel
|
Sister Ships*
|
Gross Rate (USD Per Day)
|
Com**
|
Charterer
|
Delivery Date to Charterer
|
Redelivery Date to Owners***
|
Notes
|
|
BUILT DWT
|
||||||||
Panamax Bulk Carriers
|
||||||||
1
|
DANAE
|
A
|
$8,250
|
5.00%
|
Intermare Transport GmbH, Hamburg
|
10-Mar-13
|
16-Jan-15
|
|
$7,650
|
3.75%
|
Glencore Grain B.V., Rotterdam
|
16-Jan-15
|
16-Dec-15 - 16-Mar-16
|
||||
2001 75,106
|
||||||||
2
|
DIONE
|
A
|
$9,250
|
5.00%
|
RWE Supply & Trading GmbH, Essen
|
12-Sep-14
|
12-Oct-15 - 27-Feb-16
|
|
2001 75,172
|
||||||||
3
|
NIREFS
|
A
|
$7,500
|
5.00%
|
Glencore Grain B.V., Rotterdam
|
25-Dec-14
|
25-Nov-15 25-Feb-16
|
|
2001 75,311
|
||||||||
4
|
ALCYON
|
A
|
$7,750
|
5.00%
|
EDF Trading Limited, UK
|
21-Dec-12
|
11-Apr-15 - 21-May-15
|
1
|
2001 75,247
|
||||||||
5
|
TRITON
|
A
|
$9,250
|
5.00%
|
Glencore Grain B.V., Rotterdam
|
24-Oct-14
|
24-Sep-15 - 24-Dec-15
|
|
2001 75,336
|
||||||||
6
|
OCEANIS
|
A
|
$9,000
|
5.00%
|
Glencore Grain B.V., Rotterdam
|
19-Jun-14
|
22-Mar-15
|
|
$4,500
|
5.00%
|
22-Mar-15
|
11-May-15
|
|||||
$7,200
|
5.00%
|
11-May-15
|
22-Feb-16 - 22-May-16
|
|||||
2001 75,211
|
||||||||
7
|
THETIS
|
B
|
$8,300
|
5.00%
|
EDF Trading Limited, UK
|
1-Sep-13
|
1-Jul-15 - 1-Dec-15
|
|
2004 73,583
|
||||||||
8
|
PROTEFS
|
B
|
$9,000
|
5.00%
|
Cargill International S.A., Geneva
|
14-Sep-12
|
27-Mar-15
|
1,2
|
2004 73,630
|
||||||||
9
|
CALIPSO
|
B
|
$8,100
|
4.75%
|
Cargill International S.A., Geneva
|
29-Jul-13
|
29-Apr-15 - 29-Aug-15
|
|
2005 73,691
|
10
|
CLIO
|
B
|
$8,600
|
4.75%
|
Cargill International S.A., Geneva
|
22-Aug-13
|
22-May-15 - 22-Aug-15
|
|
2005 73,691
|
||||||||
11
|
NAIAS
|
B
|
$8,500
|
5.00%
|
Bunge S.A., Geneva
|
3-Sep-14
|
4-Jul-15 - 4-Oct-15
|
|
2006 73,546
|
||||||||
12
|
ARETHUSA
|
B
|
$8,250
|
5.00%
|
Glencore Grain B.V., Rotterdam
|
20-Nov-14
|
5-Mar-15
|
|
$7,100
|
5.00%
|
5-Mar-15
|
5-Feb-16 - 5-May-16
|
|||||
2007 73,593
|
||||||||
13
|
ERATO
|
C
|
$8,500
|
5.00%
|
RWE Supply & Trading GmbH, Essen
|
27-Nov-14
|
14-Jan-15
|
|
$8,000
|
5.00%
|
Langlois Enterprises Ltd.
|
17-Jan-15
|
9-Mar-15
|
||||
$7,100
|
5.00%
|
Glencore Grain B.V., Rotterdam
|
9-Mar-15
|
9-Feb-16 - 9-May-16
|
||||
2004 74,444
|
||||||||
14
|
CORONIS
|
C
|
$11,550
|
5.00%
|
Oberon Holdings Limited
|
12-Jun-14
|
12-May-15 - 12-Aug-15
|
|
2006 74,381
|
||||||||
15
|
MELITE
|
D
|
$7,250
|
5.00%
|
Glencore Grain B.V., Rotterdam
|
29-Jan-15
|
29-Sep-15 - 29-Jan-16
|
3
|
2004 76,436
|
||||||||
16
|
MELIA
|
D
|
$12,000
|
3.75%
|
Rio Tinto Shipping Pty, Ltd., Melbourne
|
10-May-14
|
10-Apr-15 - 10-Jul-15
|
4
|
2005 76,225
|
||||||||
17
|
ARTEMIS
|
$9,375
|
3.75%
|
Rio Tinto Shipping Pty, Ltd., Melbourne
|
26-Aug-13
|
26-Jun-15 - 26-Oct-15
|
||
2006 76,942
|
||||||||
18
|
LETO
|
$11,350
|
4.75%
|
Cargill International S.A., Geneva
|
19-Jul-14
|
19-Jun-15 - 19-Sep-15
|
5
|
|
2010 81,297
|
||||||||
19
|
CRYSTALIA
|
E
|
$15,800
|
5.00%
|
Glencore Grain B.V., Rotterdam
|
21-Feb-14
|
21-Aug-15 - 21-Nov-15
|
|
2014 77,525
|
||||||||
20
|
ATALANDI
|
E
|
$13,500
|
5.00%
|
Glencore Grain B.V., Rotterdam
|
13-May-14
|
13-Apr-15 - 18-Apr-15
|
1
|
2014 77,529
|
||||||||
Kamsarmax Bulk Carriers
|
||||||||
21
|
MAIA
|
F
|
$12,000
|
5.00%
|
RWE Supply & Trading GmbH, Essen
|
29-Sep-14
|
29-Sep-15 - 29-Jan-16
|
|
2009 82,193
|
||||||||
22
|
MYRSINI
|
F
|
$15,500
|
4.75%
|
Clearlake Shipping Pte. Ltd., Singapore
|
12-Feb-14
|
18-Feb-15
|
6
|
$8,250
|
4.75%
|
18-Feb-15
|
18-Dec-15 - 18-Apr-16
|
|||||
2010 82,117
|
||||||||
23
|
MYRTO
|
F
|
$9,000
|
5.00%
|
Cargill International S.A., Geneva
|
25-Jan-13
|
5-Jan-15
|
|
$9,850
|
5.00%
|
Glencore Grain B.V., Rotterdam
|
5-Jan-15
|
5-Dec-15 - 5-Mar-16
|
||||
2013 82,131
|
Post-Panamax Bulk Carriers
|
||||||||
24
|
ALCMENE
|
$7,250
|
5.00%
|
ADM International Sarl, Rolle, Switzerland
|
22-Feb-13
|
28-Feb-15
|
7,8
|
|
$6,000
|
5.00%
|
Topsail Shipping Co., Limited Hong Kong
|
15-Mar-15
|
30-Mar-15
|
9
|
|||
2010 93,193
|
||||||||
25
|
AMPHITRITE
|
$11,300
|
5.00%
|
Bunge S.A., Geneva
|
15-Aug-14
|
15-Jul-15 - 15-Oct-15
|
||
2012 98,697
|
||||||||
26
|
POLYMNIA
|
$7,600
|
5.00%
|
Bunge S.A., Geneva
|
16-Jan-13
|
3-Jan-15
|
10
|
|
$7,500
|
5.00%
|
Vroon Dry Cargo Chartering B.V., Breskens
|
17-Jan-15
|
17-Oct-15 - 17-Feb-16
|
11
|
|||
2012 98,704
|
||||||||
Capesize Bulk Carriers
|
||||||||
27
|
NORFOLK
|
$10,700
|
4.50%
|
Clearlake Shipping Pte. Ltd., Singapore
|
16-Jan-13
|
4-Mar-15
|
6,12
|
|
$10,250
|
4.75%
|
4-Mar-15
|
4-Apr-16 - 4-Aug-16
|
|||||
2002 164,218
|
||||||||
28
|
ALIKI
|
$26,500
|
5.00%
|
Minmetals Logistics Group Co. Ltd., Beijing
|
1-Mar-11
|
1-Feb-16 - 1-Apr-16
|
||
2005 180,235
|
||||||||
29
|
BALTIMORE
|
$15,000
|
5.00%
|
RWE Supply & Trading GmbH, Essen
|
8-Jul-13
|
8-Jul-16 - 8-Jan-17
|
||
2005 177,243
|
||||||||
30
|
SALT LAKE CITY
|
$16,200
|
5.00%
|
Kawasaki Kisen Kaisha, Ltd., Tokyo
|
23-Nov-14
|
7-Feb-15
|
||
BCI 4TCs AVG + 3.5%
|
5.00%
|
K Noble Hong Kong Ltd., Hong Kong
|
7-Feb-15
|
7-Nov-16 - 7-Feb-17
|
||||
2005 171,810
|
||||||||
31
|
SIDERIS GS
|
G
|
$13,500
|
4.75%
|
Cargill International S.A., Geneva
|
14-Mar-13
|
21-Feb-15
|
|
$10,000
|
5.00%
|
Rio Tinto Shipping (Asia) Pte., Ltd., Singapore
|
22-Feb-15
|
22-Dec-15 - 22-Apr-16
|
||||
2006 174,186
|
||||||||
32
|
SEMIRIO
|
G
|
$14,000
|
4.75%
|
Cargill International S.A., Geneva
|
19-Mar-13
|
20-Feb-15
|
|
$10,000
|
5.00%
|
Rio Tinto Shipping (Asia) Pte., Ltd., Singapore
|
20-Feb-15
|
20-Feb-16 - 20-Jun-16
|
||||
2007 174,261
|
||||||||
33
|
BOSTON
|
G
|
$14,250
|
4.75%
|
Clearlake Shipping Pte. Ltd., Singapore
|
24-Aug-13
|
9-Aug-15 - 8-Feb-16
|
6
|
2007 177,828
|
||||||||
34
|
HOUSTON
|
G
|
$20,500
|
4.75%
|
Clearlake Shipping Pte. Ltd., Singapore
|
3-Dec-13
|
4-Jan-15
|
6
|
$12,750
|
5.00%
|
RWE Supply & Trading GmbH, Essen
|
4-Jan-15
|
4-Jan-16 - 4-Apr-16
|
||||
2009 177,729
|
35
|
NEW YORK
|
G
|
$12,850
|
4.75%
|
Clearlake Shipping Pte. Ltd., Singapore
|
17-Dec-14
|
17-Feb-16 - 17-Jun-16
|
6
|
2010 177,773
|
||||||||
36
|
P. S. PALIOS
|
$18,350
|
5.00%
|
RWE Supply & Trading GmbH, Essen
|
3-Dec-13
|
18-Sep-15 - 31-Dec-15
|
||
2013 179,134
|
||||||||
37
|
G. P. ZAFIRAKIS
|
H
|
$25,250
|
5.00%
|
RWE Supply & Trading GmbH, Essen
|
23-Aug-14
|
14-Feb-16 - 23-Jun-16
|
|
2014 179,492
|
||||||||
38
|
SANTA BARBARA
|
H
|
$12,000
|
5.00%
|
RWE Supply & Trading GmbH, Essen
|
13-Jan-15
|
13-Dec-15 - 13-Mar-16
|
|
2015 179,426
|
||||||||
Newcastlemax Bulk Carriers
|
||||||||
39
|
LOS ANGELES
|
I
|
$18,000
|
5.00%
|
EDF Trading Limited, UK
|
9-Feb-12
|
9-Dec-15 - 9-Apr-16
|
|
2012 206,104
|
||||||||
40
|
PHILADELPHIA
|
I
|
$18,000
|
5.00%
|
EDF Trading Limited, UK
|
17-May-12
|
17-Jan-16 - 17-Jul-16
|
|
2012 206,040
|
||||||||
Vessels Under Construction
|
||||||||
41
|
HULL DY6006
|
-
|
-
|
-
|
-
|
- - -
|
13
|
|
2016 82,000
|
||||||||
42
|
HULL H2548
|
J
|
-
|
-
|
-
|
-
|
- - -
|
13
|
(tbn. SAN FRANCISCO)
|
||||||||
2016 208,500
|
||||||||
43
|
HULL H2549
|
J
|
-
|
-
|
-
|
-
|
- - -
|
13
|
(tbn. NEWPORT NEWS)
|
||||||||
2016 208,500
|
* Each dry bulk carrier is a "sister ship", or closely similar, to other dry bulk carriers that have the same letter.
|
** Total commission percentage paid to third parties.
|
*** Charterers' optional period to redeliver the vessel to owners. Charterers have the right to add the off hire days, if any, and therefore the optional period may be extended.
|
1 Based on latest information.
|
2 On October 14, 2014, the Company signed an addendum, extending the initially agreed maximum redelivery date by a month. On December 15, 2014, the Company agreed to further extend the maximum redelivery date till April 14, 2015.
|
3 Vessel on scheduled drydocking from December 30, 2014 to January 22, 2015.
|
4 Vessel off-hire for drydocking from January 15, 2015 to February 5, 2015.
|
5 Vessel off-hire for drydocking from February 7, 2015 to February 18, 2015.
|
6 Clearlake Shipping Pte. Ltd., Singapore is a member of the Gunvor Group.
|
7 In February 2015, owners and charterers mutually agreed to extend the optional period.
|
8 Vessel on scheduled drydocking from February 28, 2015 to March 15, 2015.
|
9 Redelivery date based on an estimated time charter trip duration of about 15 days.
|
10 Prior to October 12, 2013, chartered to Augustea Bunge Maritime Limited, Malta.
|
11 Charter includes a one time gross ballast bonus payment of US$237,500.
|
12 Charterers have exercised their right to add the off-hire days and therefore the optional period has been extended up to February 18, 2015. From then onwards, owners and charterers mutually agreed to further extend the optional period.
|
13 Year of delivery and dwt are based on shipbuilding contract.
|
· | Very Large Ore Carriers (VLOC) . Very large ore carriers have a carrying capacity of more than 200,000 dwt and are a comparatively new sector of the dry bulk carrier fleet. VLOCs are built to exploit economies of scale on long-haul iron ore routes. |
· | Capesize . Capesize vessels have a carrying capacity of 110,000-199,999 dwt. Only the largest ports around the world possess the infrastructure to accommodate vessels of this size. Capesize vessels are primarily used to transport iron ore or coal and, to a much lesser extent, grains, primarily on long-haul routes. |
· | Post-Panamax . Post-Panamax vessels have a carrying capacity of 80,000-109,999 dwt. These vessels tend to have a shallower draft and larger beam than a standard Panamax vessel with a higher cargo capacity. These vessels have been designed specifically for loading high cubic cargoes from draught restricted ports, although they cannot transit the Panama Canal. |
· | Panamax . Panamax vessels have a carrying capacity of 60,000-79,999 dwt. These vessels carry coal, iron ore, grains, and, to a lesser extent, minor bulks, including steel products, cement and fertilizers. Panamax vessels are able to pass through the Panama Canal, making them more versatile than larger vessels with regard to accessing different trade routes. Most Panamax and Post-Panamax vessels are "gearless," and therefore must be served by shore-based cargo handling equipment. However, there are a small number of geared vessels with onboard cranes, a feature that enhances trading flexibility and enables operation in ports which have poor infrastructure in terms of loading and unloading facilities. |
· | Handymax/Supramax . Handymax vessels have a carrying capacity of 40,000-59,999 dwt. These vessels operate in a large number of geographically dispersed global trade routes, carrying primarily grains and minor bulks. Within the Handymax category there is also a sub-sector known as Supramax. Supramax bulk carriers are ships between 50,000 to 59,999 dwt, normally offering cargo loading and unloading flexibility with on-board cranes, or "gear," while at the same time possessing the cargo carrying capability approaching conventional Panamax bulk carriers. |
· | Handysize . Handysize vessels have a carrying capacity of up to 39,999 dwt. These vessels are primarily involved in carrying minor bulk cargoes. Increasingly, ships of this type operate within regional trading routes, and may serve as trans-shipment feeders for larger vessels. Handysize vessels are well suited for small ports with length and draft restrictions. Their cargo gear enables them to service ports lacking the infrastructure for cargo loading and unloading. |
· | We own a modern, high quality fleet of dry bulk carriers . We believe that owning a modern, high quality fleet reduces operating costs, improves safety and provides us with a competitive advantage in securing favorable time charters. We maintain the quality of our vessels by carrying out regular inspections, both while in port and at sea, and adopting a comprehensive maintenance program for each vessel. |
· | Our fleet includes ten groups of sister ships. We believe that maintaining a fleet that includes sister ships enhances the revenue generating potential of our fleet by providing us with operational and scheduling flexibility. The uniform nature of sister ships also improves our operating efficiency by allowing our fleet manager to apply the technical knowledge of one vessel to all vessels of the same series and creates economies of scale that enable us to realize cost savings when maintaining, supplying and crewing our vessels. |
· | We have an experienced management team. Our management team consists of experienced executives who each have, on average, more than 29 years of operating experience in the shipping industry and has demonstrated ability in managing the commercial, technical and financial areas of our business. Our management team is led by Mr. Simeon Palios, a qualified naval architect and engineer who has more than 40 years of experience in the shipping industry. |
· | Internal management of vessel operations. We conduct all of the commercial and technical management of our vessels in-house through DSS. We believe having in-house commercial and technical management provides us with a competitive advantage over many of our competitors by allowing us to more closely monitor our operations and to offer higher quality performance, reliability and efficiency in arranging charters and the maintenance of our vessels. |
· | We benefit from strong relationships with members of the shipping and financial industries. We have developed strong relationships with major international charterers, shipbuilders and financial institutions that we believe are the result of the quality of our operations, the strength of our management team and our reputation for dependability. |
· | We have a strong balance sheet and a relatively low level of indebtedness. We believe that our strong balance sheet and relatively low level of indebtedness provide us with the flexibility to increase the amount of funds that we may draw under our loan facilities in connection with future acquisitions and enable us to use cash flow that would otherwise be dedicated to debt service for other purposes. |
· | 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 alert 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 the name of the ship, 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. |
· | Annual Surveys: For seagoing ships, annual surveys are conducted for the hull and the machinery, including the electrical plant, and where applicable for special equipment classed, within three months before or after each anniversary date of the date of commencement of the class period indicated in the certificate. |
· | Intermediate Surveys: Extended annual surveys are referred to as intermediate surveys and typically are conducted two and one-half years after commissioning and each class renewal. Intermediate surveys are to be carried out at or between the occasion of the second or third annual survey. |
· | Class Renewal Surveys: Class renewal surveys, also known as special surveys, are carried out for the ship's hull, machinery, including the electrical plant, and for any special equipment classed, at the intervals indicated by the character of classification for the hull. At the special survey, the vessel is thoroughly examined, including audio-gauging to determine the thickness of the steel structures. Should the thickness be found to be less than class requirements, the classification society would prescribe steel renewals. The classification society may grant a one-year grace period for completion of the special survey. Substantial amounts of money may have to be spent for steel renewals to pass a special survey if the vessel experiences excessive wear and tear. In lieu of the special survey every four or five years, depending on whether a grace period was granted, a shipowner has the option of arranging with the classification society for the vessel's hull or machinery to be on a continuous survey cycle, in which every part of the vessel would be surveyed within a five-year cycle. Upon a shipowner's request, the surveys required for class renewal may be split according to an agreed schedule to extend over the entire period of class. This process is referred to as continuous class renewal. |
· | Ownership days. We define ownership days as the aggregate number of days in a period during which each vessel in our fleet has been owned by us. Ownership days are an indicator of the size of our fleet over a period and affect both the amount of revenues and the amount of expenses that we record during a period. |
· | Available days. We define available days as the number of our ownership days less the aggregate number of days that our vessels are off-hire due to scheduled repairs or repairs under guarantee, vessel upgrades or special surveys and the aggregate amount of time that we spend positioning our vessels for such events. The shipping industry uses available days to measure the number of days in a period during which vessels should be capable of generating revenues. |
· | Operating days. We define operating days as the number of our available days in a period less the aggregate number of days that our vessels are off-hire due to any reason, including unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a period during which vessels actually generate revenues. |
· | Fleet utilization. We calculate fleet utilization by dividing the number of our operating days during a period by the number of our available days during the period. The shipping industry uses fleet utilization to measure a company's efficiency in finding suitable employment for its vessels and minimizing the amount of days that its vessels are off-hire for reasons other than scheduled repairs or repairs under guarantee, vessel upgrades, special surveys or vessel positioning for such events . |
· | TCE rates. We define Time Charter Equivalent, or TCE rates as our time charter revenues less voyage expenses during a period divided by the number of our available days during the period, which is consistent with industry standards. TCE rate is a non-GAAP measure and is a standard shipping industry performance measure used primarily to compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage charters, because charter hire rates for vessels on voyage charters are generally not expressed in per day amounts while charter hire rates for vessels on time charters generally are expressed in such amounts. |
|
Year Ended December 31,
|
|||||||||||
2014
|
2013
|
2012
|
||||||||||
Ownership days
|
13,822
|
12,049
|
10,119
|
|||||||||
Available days
|
13,650
|
12,029
|
9,998
|
|||||||||
Operating days
|
13,564
|
11,944
|
9,865
|
|||||||||
Fleet utilization
|
99.4
|
%
|
99.3
|
%
|
98.7
|
%
|
||||||
Time charter equivalent (TCE) rate (1)
|
$
|
12,081
|
$
|
12,959
|
$
|
21,255
|
· | the duration of our charters; |
· | our decisions relating to vessel acquisitions and disposals; |
· | the amount of time that we spend positioning our vessels; |
· | the amount of time that our vessels spend in drydock undergoing repairs; |
· | maintenance and upgrade work; |
· | the age, condition and specifications of our vessels; |
· | levels of supply and demand in the dry bulk shipping industry; and |
· | other factors affecting spot market charter rates for dry bulk carriers. |
· | 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; |
· | register the vessel under a flag state and perform the related inspections in order to obtain new trading certificates from the flag state; |
· | implement a new planned maintenance program for the vessel; and |
· | ensure that the new technical manager obtains new certificates for compliance with the safety and vessel security regulations of the flag state. |
· | employment and operation of our vessels; and |
· | management of the financial, general and administrative elements involved in the conduct of our business and ownership of our 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); |
· | obtaining of ISM certification and audit for each vessel within the six months of taking over a vessel; |
· | vessel hiring 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. |
· | rates and periods of charter hire; |
· | levels of vessel operating expenses; |
· | depreciation expenses; |
· | financing costs; and |
· | fluctuations in foreign exchange rates. |
· | reports by industry analysts and data providers that focus on our industry and related dynamics affecting vessel values; |
· | news and industry reports of similar vessel sales; |
· | news and industry reports of sales of vessels that are not similar to our vessels where we have made certain adjustments in an attempt to derive information that can be used as part of our estimates; |
· | approximate market values for our vessels or similar vessels that we have received from shipbrokers, whether solicited or unsolicited, or that shipbrokers have generally disseminated; |
· | offers that we may have received from potential purchasers of our vessels; and |
· | vessel sale prices and values of which we are aware through both formal and informal communications with shipowners, shipbrokers, industry analysts and various other shipping industry participants and observers. |
Average estimated daily time charter equivalent rate used
|
Average break even rate
|
|||||||
Panamax/Kamsarmax/Post-Panamax
|
$
|
24,517
|
$
|
11,958
|
||||
Capesize/Newcastlemax
|
$
|
44,875
|
$
|
19,866
|
1-year
(period)
|
Impairment charge
(in USD million)
|
3-year
(period)
|
Impairment charge
(in USD million)
|
5-year
(period)
|
Impairment charge
(in USD million)
|
|||||||||||||||||||
Panamax/Kamsarmax/Post-Panamax
|
$
|
12,028
|
98.3
|
$
|
10,611
|
105.8
|
$
|
14,211
|
-
|
|||||||||||||||
Capesize/Newcastlemax
|
$
|
21,777
|
298.5
|
$
|
17,074
|
365.8
|
$
|
20,225
|
334.3
|
Payments due by period
|
||||||||||||||||||||
Contractual Obligations
|
Total Amount
|
Less than 1 year
|
2-3 years
|
4-5 years
|
More than 5 years
|
|||||||||||||||
(in thousands of US dollars)
|
||||||||||||||||||||
Loan Agreements (1)
|
$
|
486,008
|
$
|
79,288
|
$
|
250,619
|
$
|
66,234
|
$
|
89,867
|
||||||||||
Estimated Interest Payments on Loan Agreements (1)
|
28,326
|
8,158
|
10,763
|
5,912
|
3,493
|
|||||||||||||||
Construction contracts (2)
|
107,291
|
23,804
|
83,487
|
-
|
-
|
|||||||||||||||
Acquisition of vessels (3)
|
40,000
|
40,000
|
-
|
-
|
-
|
|||||||||||||||
Broker services agreement (4)
|
312
|
312
|
-
|
-
|
-
|
|||||||||||||||
Preferred dividends (5)
|
24,999
|
5,769
|
11,538
|
7,692
|
-
|
|||||||||||||||
Total
|
$
|
686,936
|
$
|
157,331
|
$
|
356,407
|
$
|
79,838
|
$
|
93,360
|
(1) | As of December 31, 2014, we had an aggregate principal of $486.0 million of indebtedness outstanding under our loan facilities. Estimated interest payments represent projected interest payments on our long term debt, which are based on the weighted average LIBOR rate in 2014 plus the margin of our loan agreements in 2014. As of the date of this report, we incurred additional indebtedness of $93.1 million under our loan facility with Nordea Bank entered into in March 17, 2015 and repaid $83.2 million of indebtedness outstanding as at December 31, 2014, to terminate our loan agreements with Nordea and Deutsche Bank. |
(2) | In February 2015, we paid $7.3 million for the construction of one of our three vessels under construction, which we expect to take delivery of in 2016. |
(3) | As at December 31, 2014, we had paid an advance of $10.0 million, for the acquisition of Santa Barbara which we had agreed to acquire in December 2014 for $50.0 million and the balance of $40.0 million was paid in January 2015 when the vessel was delivered. |
(4) | On March 4, 2014, DSS entered into an agreement with Diana Enterprises, a related party company, for the provision of brokerage services for a monthly fee of $104,166 effective from January 1, 2014, which replaced the previous agreement dated March 15, 2013. The agreement will expire on March 31, 2015. |
(5) | On February 24, 2014 we completed an offering of 2,600,000 shares of Series B Perpetual Preferred Stock, at the price of $25.0 per share, and dividends are payable at a rate equal to 8.875% per annum. At any time on or after February 14, 2019, the Series B Preferred Shares may be redeemed, in whole or in part , at a redemption price of $25.00 per share , plus an amount equal to all accumulated and unpaid dividends thereon to the date of redemption, whether or not declared. The table above presents our obligations for dividend payments until February 14, 2019. The table above does not include the payment for the redemption, which is at our option. |
Item 6. | Directors, Senior Management and Employees |
Name
|
|
Age
|
|
Position
|
Simeon Palios
|
|
73
|
|
Class I Director, Chief Executive Officer and Chairman
|
Anastasios Margaronis
|
|
59
|
|
Class I Director and President
|
Ioannis Zafirakis
|
|
43
|
|
Class I Director, Chief Operating Officer and Secretary
|
Andreas Michalopoulos
|
43
|
Chief Financial Officer and Treasurer
|
||
Maria Dede
|
42
|
Chief Accounting Officer
|
||
William (Bill) Lawes
|
|
71
|
|
Class II Director
|
Konstantinos Psaltis
|
|
76
|
|
Class II Director
|
Kyriacos Riris
|
|
65
|
|
Class II Director
|
Boris Nachamkin
|
|
81
|
|
Class III Director
|
Apostolos Kontoyannis
|
|
66
|
|
Class III Director
|
Semiramis Paliou
|
|
40
|
|
Class III Director
|
|
Year Ended December 31,
|
|||||||||||
|
2014
|
2013
|
2012
|
|||||||||
Shoreside
|
94
|
84
|
82
|
|||||||||
Seafaring
|
973
|
848
|
713
|
|||||||||
Total
|
1,067
|
932
|
795
|
Item 7. | Major Shareholders and Related Party Transactions |
A. | Major Shareholders |
Title of Class
|
|
Identity of Person or Group
|
|
Number of
Shares Owned
|
|
Percent of Class
|
|
Common Stock, par value $0.01
|
|
Simeon Palios (1)
|
|
16,157,371
|
|
19.6%
|
|
Massachusetts Financial Services Company (2)
|
7,454,518
|
9.0%
|
|||||
|
|
All officers and directors as a group (3)
|
|
19,543,094
|
|
23.7%
|
(1) | Currently, Mr. Simeon Palios beneficially owns 1,870,831 restricted common shares granted through the Company's Equity Incentive Plan and 14,286,540 shares indirectly through Corozal Compania Naviera S.A. ("Corozal") and Ironwood Trading Corp. ("Ironwood") over which Mr. Simeon Palios exercises sole voting and dispositive power. As of December 31, 2012, 2013, and 2014, Mr. Simeon Palios owned directly and indirectly through Corozal and Ironwood , 18.4%, 18.4% and 19 . 3%, respectively, of our outstanding common stock. |
(2) | Massachusetts Financial Services Company (" MFS") has filed a Schedule 13G/A on February 6, 2015 reporting their ownership of 9.1% of our outstanding common stock as of December 31, 2014, decreased from 10.3% as of December 31, 2013. |
(3) | Mr. Simeon Palios is our only director or officer that beneficially owns 5% or more of our outstanding common stock. Mr. Anastasios Margaronis, our President and a member of our board of directors, and Mr. Ioannis Zafirakis, our Chief Operating Officer and a member of our board of directors, are indirect shareholders through ownership of stock held in Corozal Compania Naviera S.A., which is the registered owner of some of our common stock. Mr. Margaronis and Mr. Zafirakis do not have dispositive or voting power with regard to shares held by Corozal Compania S.A. and, accordingly, are not considered to be beneficial owners of our common shares held through Corozal Compania Naviera S.A. Mr. Anastasios Margaronis owns 1.6% of our outstanding common stock. Messrs. Lawes, Psaltis, Nachamkin and Kontoyannis, each a non-executive director of ours, and Messrs. Zafirakis and Michalopoulos, each executive officers of ours, each own less than 1% of our outstanding common stock. In addition, Mr. Zafirakis owns 40,000 Series B Preferred Shares, or 1.5% of the outstanding Series B Preferred Shares, Mr. Michalopoulos owns 28,000 Series B Preferred Shares, or 1.1% of the outstanding Series B Preferred Shares. All officers and directors as a group own 93,970 Series B Preferred Shares, or 3.6% of the outstanding Series B Preferred Shares. |
Item 8. | Financial information |
A. | Consolidated statements and other financial information |
Item 9. | The Offer and Listing |
Period
|
High
|
Low
|
||||||
2015
|
$
|
25.43
|
$
|
24.08
|
||||
Period from January 1, 2015 to March 20, 2015
|
$
|
25.43
|
$
|
24.08
|
||||
January 2015
|
$
|
25.43
|
$
|
24.35
|
||||
February 2015
|
25.00
|
24.08
|
||||||
March 2015
|
25.38
|
24.85
|
||||||
2014
|
$
|
26.98
|
$
|
22.76
|
||||
1st quarter 2014
|
$
|
25.35
|
$
|
24.57
|
||||
2nd quarter 2014
|
26.98
|
25.37
|
||||||
3rd quarter 2014
|
26.89
|
25.89
|
||||||
4th quarter 2014
|
26.74
|
22.76
|
||||||
August 2014
|
$
|
26.39
|
$
|
26.03
|
||||
September 2014
|
26.27
|
25.89
|
||||||
October 2014
|
26.74
|
24.69
|
||||||
November 2014
|
26.15
|
25.48
|
||||||
December 2014
|
25.45
|
22.76
|
Item 10. | Additional Information |
(1) | It is organized in a qualified foreign country which, as defined, is one that grants an equivalent exemption from tax to corporations organized in the United States in respect of the Shipping Income for which exemption is being claimed under Section 883 of the Code, or the "Country of Organization Requirement"; and |
(2) | It can satisfy any one of the following two stock ownership requirements: |
· | more than 50% of its stock, in terms of value, is beneficially owned by qualified shareholders which, as defined, includes individuals who are residents of a qualified foreign country, or the "50% Ownership Test"; or |
· | its stock is "primarily and regularly" traded on an established securities market located in the United States or a qualified foreign country, or the "Publicly Traded Test". |
· | at least 75% of the Company's 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 |
· | at least 50% of the average value of the assets held by the corporation during such taxable year produce, or are held for the production of, such passive income. |
· | the excess distribution or gain would be allocated ratably over the Non-Electing Holder's aggregate holding period for the common stock; |
· | the amount allocated to the current taxable year and any taxable years before the Company became a PFIC 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 tax 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 a U.S. income tax treaty with respect to that gain, the gain is taxable in the United States only if 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. |
· | fails to provide an accurate taxpayer identification number; |
· | is notified by the IRS that he has failed to report all interest or dividends required to be shown on his U.S. federal income tax returns; or |
· | in certain circumstances, fails to comply with applicable certification requirements. |
Item 11. | Quantitative and Qualitative Disclosures about Market Risk |
Item 12. | Description of Securities Other than Equity Securities |
Item 13. | Defaults, Dividend Arrearages and Delinquencies |
Item 14. | Material Modifications to the Rights of Security Holders and Use of Proceeds |
Item 15. | Controls and Procedures |
Item 16A. | Audit Committee Financial Expert |
Item 16B. | Code of Ethics |
Item 16C. | Principal Accountant Fees and Services |
Item 16D. | Exemptions from the Listing Standards for Audit Committees |
Item 16E. | Purchases of Equity Securities by the Issuer and Affiliated Purchasers |
Item 16F. | Change in Registrant's Certifying Accountant |
Item 16G. | Corporate Governance |
Item 16H. | Mine Safety Disclosure |
Item 17. | Financial Statements |
Item 18. | Financial Statements |
Item 19. | Exhibits |
Exhibit
Number |
Description
|
1.1
|
Amended and Restated Articles of Incorporation of Diana Shipping Inc. (originally known as Diana Shipping Investment Corp.) (1)
|
1.2
|
Amended and Restated By-laws of the Company (2)
|
1.3
|
Statement of Designation of the 8.875% Series B Cumulative Redeemable Perpetual Preferred Shares (13)
|
2.1
|
Form of Share Certificate (10)
|
4.1
|
Second Amended and Restated Stockholders Rights Agreement dated October 7, 2008 (4)
|
4.2
|
Amended and Restated 2005 Stock Incentive Plan (6)
|
4.3
|
2011 Stock Incentive Plan (11)
|
4.4
|
Form of Technical Manager Purchase Option Agreement (5)
|
4.5
|
Form of Management Agreement (3)
|
4.6
|
Loan Agreement with Royal Bank of Scotland dated February 18, 2005 (5)
|
4.7
|
Amending and Restating Loan Agreement with Royal Bank of Scotland dated May 24, 2006 (8)
|
4.8
|
Supplemental Agreement with the Royal Bank of Scotland dated January 30, 2007 (7)
|
4.9
|
Sales Agency Financing Agreement dated April 23, 2008 (9)
|
4.10
|
Loan Agreement with Deutsche Bank dated October 8, 2009 (10)
|
4.11
|
Loan Agreement with Bremer Landesbank dated October 22, 2009 (10)
|
4.12
|
Loan Agreement with the Export-Import Bank of China and DnB Nor Bank ASA dated October 2, 2010 (10)
|
4.13
|
Loan Agreement with Emporiki Bank of Greece S.A. dated September 13, 2011 (11)
|
4.14
|
Loan Agreement with Nordea Bank Finland Plc dated February 7, 2012 (11)
|
4.15
|
Supplemental Loan Agreement with Nordea Bank Finland Plc dated June 21, 2012 (12)
|
4.16
|
Loan Agreement with Nordea Bank Finland Plc dated
December 20, 2012 (12)
|
4.17
|
Loan Agreement, dated June 18, 2013, by and among Tuvalu Shipping Company Inc., Jabat Shipping Company Inc., and Deutsche Bank AG dated June 18, 2013 (14)
|
4.18
|
Loan Agreement, dated May 24, 2013, by and among Erikub Shipping Company Inc., Wotho Shipping Company Inc., DNB Bank ASA, and Export-Import Bank of China (14)
|
4.19
|
Loan Agreement, dated January 9, 2014, by and among Taka Shipping Company Inc., Fayo Shipping Company Inc., and Commonwealth Bank of Australia (14)
|
4.20
|
Loan Agreement, dated May 20, 2013, by and between Eluk Shipping Company Inc. and Diana Shipping Inc. (14)
|
4.21
|
Loan Agreement, dated December 18, 2014, by and among Weno Shipping Company Inc., Pulap Shipping Company Inc., the Banks and Financial Insitutions listed therein and BNP Paribas
|
4.22
|
Loan Agreement, dated March 17, 2015, by and among Knox Shipping Company Inc., Bokak Shipping Company Inc., Jemo Shipping Company Inc., Guam Shipping Company Inc., Palau Shipping Company Inc., Makur Shipping Company Inc., Mandaringina Inc., Vesta Commercial, S.A., the Banks and Financial Institutions listed therein, Nordea Bank Finland Plc and Nordea Bank AB, London Branch
|
4.23
|
Administrative Services Agreement, dated October 1, 2013, by and between Diana Shipping Inc. and Diana Shipping Services S.A. (14)
|
4.24
|
Brokerage Services Agreement, dated March 15, 2013, by and between Diana Shipping Services S.A. and Diana Enterprises Inc. (14)
|
4.25
|
Brokerage Services Agreement, dated March 4, 2014, by and between Diana Shipping Services S.A. and Diana Enterprises Inc. (14)
|
4.26
|
Brokerage Services Agreement, dated April 9, 2014, by and between Diana Shipping Inc. and Diana Enterprises Inc.
|
4.27
|
Amended and Restated Non-Competition Agreement, dated as of March 1, 2013, by and between Diana Shipping Inc. and Diana Containerships Inc. (14)
|
8.1
|
Subsidiaries of the Company
|
11.1
|
Code of Ethics (10)
|
12.1
|
Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer
|
12.2
|
Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer
|
13.1
|
Certification of 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 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
|
101
|
The following materials from the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2014, formatted in eXtensible Business Reporting Language (XBRL): (i) Consolidated Balance Sheets as of December 31, 2013 and 2014; (ii) Consolidated Statements of Operations for the years ended December 31, 2012, 2013 and 2014; (iii) Consolidated Statements of Comprehensive Income/(Loss) for the years ended December 31, 2012, 2013 and 2014; (iv) Consolidated Statements of Stockholders' Equity for the years ended December 31, 2012, 2013 and 2014; (v) Consolidated Statements of Cash Flows for the years ended December 31, 2012, 2013 and 2014; and (v) the Notes to Consolidated Financial Statements
|
(1) | Filed as Exhibit 1 to the Company's Form 6-K filed on May 29, 2008. |
(2) | Filed as Exhibit 3.1 to the Company's Form 6-K filed on February 13, 2014. |
(3) | Filed as an Exhibit to the Company's Amended Registration Statement (File No. 123052) on March 15, 2005. |
(4) | Filed as Exhibit 4.5 to the Company's Form 8-A12B/A filed on October 7, 2008 and amended on October 10, 2008 (File No. 001-32458). |
(5) | Filed as an Exhibit to the Company's Registration Statement (File No. 123052) on March 1, 2005. |
(6) | Filed as Exhibit 1 to the Company's Form 6-K filed on October 27, 2008. |
(7) | Filed as Exhibit VI to the Company's Form 6-K filed on March 19, 2007. |
(8) | Filed as Exhibit 4.10 to the Company's 2007 Annual Report on Form 20-F (File No. 001-32458) on March 14, 2008. |
(9) | Filed as Exhibit 2 to the Company's Form 6-K filed on April 24, 2008. |
(10) | Filed as an Exhibit to the Company's Annual Report filed on Form 20-F on March 30, 2010. |
(11) | Filed as an Exhibit to the Company's Annual Report filed on Form 20-F on April 20, 2012. |
(12) | Filed as an Exhibit to the Company's Annual Report filed on Form 20-F on March 22, 2013. |
(13) | Filed as an Exhibit 3.3 to the Company's Form 8-A filed on February 13, 2014. |
(14) | Filed as an Exhibit to the Company's Annual Report filed on Form 20-F on March 27, 2014. |
Page
|
||
Report of Independent Registered Public Accounting Firm
|
F-2
|
|
Report of Independent Registered Public Accounting Firm
|
F-3
|
|
Consolidated Balance Sheets as of December 31, 2014 and 2013
|
F-4
|
|
Consolidated Statements of Operations for the years ended December 31, 2014, 2013 and 2012
|
F-5
|
|
Consolidated Statements of Comprehensive Income / (Loss) for the years ended December 31, 2014, 2013 and 2012
|
F-5
|
|
Consolidated Statements of Stockholders' Equity for the years ended December 31, 2014, 2013 and 2012
|
F-6
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2014, 2013 and 2012
|
F-7
|
|
Notes to Consolidated Financial Statements
|
F-8
|
|
DIANA SHIPPING INC.
|
||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||||||
For the years ended December 31, 2014, 2013 and 2012
|
||||||||||||
(Expressed in thousands of U.S. Dollars – except for share and per share data)
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
REVENUES:
|
||||||||||||
Time charter revenues
|
$
|
175,576
|
$
|
164,005
|
$
|
220,785
|
||||||
Other revenues (Note 4(b))
|
-
|
447
|
2,447
|
|||||||||
EXPENSES:
|
||||||||||||
Voyage expenses (Note 12)
|
10,665
|
8,119
|
8,274
|
|||||||||
Vessel operating expenses (Note 12)
|
86,923
|
77,211
|
66,293
|
|||||||||
Depreciation and amortization of deferred charges (Notes 2(m) and 2(n))
|
70,503
|
64,741
|
62,010
|
|||||||||
General and administrative expenses
|
26,217
|
23,724
|
24,913
|
|||||||||
Foreign currency gain
|
(528
|
)
|
(690
|
)
|
(1,374
|
)
|
||||||
Operating income / (loss)
|
$
|
(18,204
|
)
|
$
|
(8,653
|
)
|
$
|
63,116
|
||||
OTHER INCOME / (EXPENSES):
|
||||||||||||
Interest and finance costs (Note 13)
|
(8,427
|
)
|
(8,140
|
)
|
(7,618
|
)
|
||||||
Interest and other income (Note 4(b))
|
3,627
|
1,800
|
1,432
|
|||||||||
Income / (loss) from derivative instruments (Note 16)
|
68
|
(118
|
)
|
(518
|
)
|
|||||||
Income / (loss) from investment in Diana Containerships Inc. (Note 3)
|
12,668
|
(6,094
|
)
|
(1,773
|
)
|
|||||||
Total other income / (expenses), net
|
$
|
7,936
|
$
|
(12,552
|
)
|
$
|
(8,477
|
)
|
||||
Net income / (loss)
|
$
|
(10,268
|
)
|
$
|
(21,205
|
)
|
$
|
54,639
|
||||
Dividends on series B preferred shares (Notes 11(a) and 14)
|
(5,080
|
)
|
-
|
-
|
||||||||
Net income / (loss) attributed to common stockholders
|
$
|
(15,348
|
)
|
$
|
(21,205
|
)
|
$
|
54,639
|
||||
Earnings / (loss) per common share, basic and diluted
(Note 14)
|
$
|
(0.19
|
)
|
$
|
(0.26
|
)
|
$
|
0.67
|
||||
Weighted average number of common shares, basic and diluted
(Note 14)
|
81,292,290
|
81,328,390
|
81,083,485
|
|||||||||
1. | Basis of Presentation and General Information |
CAPESIZE VESSELS
|
|||||||
27
|
Jaluit Shipping Company Inc.
|
Sideris GS
|
Marshall Islands
|
174,186
|
Nov 2006
|
Nov 2006
|
Marshall Islands
|
28
|
Bikini Shipping Company Inc.
|
New York
|
Marshall Islands
|
177,773
|
Mar 2010
|
Mar 2010
|
Marshall Islands
|
29
|
Gala Properties Inc.
|
Houston
|
Marshall Islands
|
177,729
|
Oct 2009
|
Oct 2009
|
Marshall Islands
|
30
|
Kili Shipping Company Inc.
|
Semirio
|
Marshall Islands
|
174,261
|
Jun 2007
|
Jun 2007
|
Marshall Islands
|
31
|
Knox Shipping Company Inc.
|
Aliki
|
Marshall Islands
|
180,235
|
Mar 2005
|
Apr 2007
|
Marshall Islands
|
32
|
Lib Shipping Company Inc.
|
Boston
|
Marshall Islands
|
177,828
|
Nov 2007
|
Nov 2007
|
Marshall Islands
|
33
|
Marfort Navigation Company Ltd.
|
Salt Lake City
|
Cyprus
|
171,810
|
Sep 2005
|
Dec 2007
|
Cyprus
|
34
|
Silver Chandra Shipping Company Ltd.
|
Norfolk
|
Cyprus
|
164,218
|
Aug 2002
|
Feb 2008
|
Cyprus
|
35
|
Bokak Shipping Company Inc.
|
Baltimore
|
Marshall Islands
|
177,243
|
Mar 2005
|
Jun 2013
|
Marshall Islands
|
36
|
Pulap Shipping Company Inc.
|
PS Palios
|
Marshall Islands
|
179,134
|
Jan 2013
|
Dec 2013
|
Marshall Islands
|
37
|
Weno Shipping Company Inc. (Note 6)
|
GP Zafirakis
|
Marshall Islands
|
179,492
|
Aug 2014
|
Aug 2014
|
Marshall Islands
|
38
|
Lelu Shipping Company Inc. (Notes 5, 10 and 17)
|
Santa Barbara
|
Marshall Islands
|
179,426
|
Jan 2015
|
Jan 2015
|
Marshall Islands
|
NEWCASTLEMAX VESSELS
|
|||||||
39
|
Lae Shipping Company Inc.
|
Los Angeles
|
Marshall Islands
|
206,104
|
Feb 2012
|
Feb 2012
|
Marshall Islands
|
40
|
Namu Shipping Company Inc.
|
Philadelphia
|
Marshall Islands
|
206,040
|
May 2012
|
May 2012
|
Marshall Islands
|
UNDER CONSTRUCTION
|
|||||||
41
|
Aster Shipping Company Inc. (Notes 5, 10 and 17)
|
H2548
|
-
|
208,500
|
-
|
Expected in 2016
|
Marshall Islands
|
42
|
Aerik Shipping Company Inc. (Notes 5 and 10)
|
H2549
|
-
|
208,500
|
-
|
Expected in 2016
|
Marshall Islands
|
43
|
Houk Shipping Company Inc. (Notes 5 and 10)
|
DY6006
|
-
|
82,000
|
-
|
Expected in 2016
|
Marshall Islands
|
OTHER SUBSIDIARIES
|
|||||||
44
|
Diana Shipping Services SA
|
Management company
|
Panama
|
||||
45
|
Bulk Carriers (USA) LLC
|
Company's representative in the US
|
Delaware - USA
|
Charterer
|
2014
|
2013
|
2012
|
|||||||||
A
|
18
|
%
|
17
|
%
|
18
|
%
|
||||||
B
|
15
|
%
|
19
|
%
|
10
|
%
|
||||||
C
|
12
|
%
|
||||||||||
D
|
10
|
%
|
||||||||||
E
|
11
|
%
|
||||||||||
F
|
11
|
%
|
||||||||||
G
|
12
|
%
|
2. | Significant Accounting Policies |
(a) | Principles of Consolidation : The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles, and include the accounts of Diana Shipping Inc. and its wholly-owned subsidiaries referred to in Note 1 above. All intercompany balances and transactions have been eliminated upon consolidation. |
(b) | Use of Estimates: The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
(c) | Other Comprehensive Income / (loss): The Company separately presents certain transactions, which are recorded directly as components of stockholders' equity. Other Comprehensive Income / (Loss) is presented in a separate statement. |
(d) | Foreign Currency Translation: The functional currency of the Company is the U.S. Dollar because the Company's vessels operate in international shipping markets, and therefore primarily transact business in U.S. Dollars. The Company's accounting records 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 the time of the transactions. At the balance sheet dates, monetary assets and liabilities which are denominated in other currencies are translated into U.S. Dollars at the year-end exchange rates. Resulting gains or losses are reflected separately in the accompanying consolidated statements of operations. |
(e) | Cash and Cash Equivalents: The Company considers highly liquid investments such as time deposits, certificates of deposit and their equivalents with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents may also include compensating cash balances kept against the Company's loan facilities that are not deemed to be sufficiently material to require segregation on the balance sheet. Such balances at December 31, 2014 and 2013 amounted to $19,500 and $18,000 in the aggregate and consisted of minimum cash deposits required to be maintained at all times under the Company's loan facilities (Note 9). |
(f) | Accounts Receivable, Trade: The amount shown as accounts receivable, trade, at each balance sheet date, includes receivables from charterers for hire, ballast bonus billings, if any, hold cleanings and extra voyage insurance, net of any provision for doubtful accounts. At each balance sheet date, all potentially uncollectible accounts are assessed individually for purposes of determining the appropriate provision for doubtful accounts. No provision for doubtful accounts was established as of December 31, 2014 and 2013. |
(g) | Loan Receivable from Related Parties : The amounts shown as Due from related parties, current and non-current, in the consolidated balance sheet as at December 31, 2014 and 2013, (Note 4(b)) represent amounts receivable from Diana Containerships Inc. with respect to a loan agreement with a wholly owned subsidiary of Diana Containerships Inc., net of any provision for credit losses. Interest income and fees, deriving from the agreement are recorded in the accounts as incurred. Costs incurred for the loan documentation were expensed as incurred. At each balance sheet date, amounts due under the aforementioned loan agreement are assessed for purposes of determining the appropriate provision for credit losses. In order to estimate the allowance for credit losses, the Company assesses at each period end the ability of Diana Containerships to meet its obligations under the loan agreement by taking into consideration existing economic conditions, the current financial condition of Diana Containerships Inc. and historical losses, if any, and any other risks/factors that may affect its future financial condition and its ability to meet its obligations. No provision for credit losses was established as of December 31, 2014 and 2013, since there was no indication that Diana Containerships Inc. will not be able to meet its obligations under the loan agreement. |
(h) | Inventories : Inventories consist of lubricants and victualling which are stated at the lower of cost or market. Cost is determined by the first in, first out method. Inventories may also consist of bunkers when on the balance sheet date a vessel remains idle. Bunkers are also stated at the lower of cost or market and cost is determined by the first in, first out method. |
(i) | Vessel Cost: Vessels are stated at cost which consists of the contract price and any material expenses incurred upon acquisition or during construction. Expenditures for conversions and major improvements are also capitalized when they appreciably extend the life, increase the earning capacity or improve the efficiency or safety of the vessels; otherwise these amounts are charged to expense as incurred. Interest cost incurred during the assets' construction periods that theoretically could have been avoided if expenditure for the assets had not been made is also capitalized. The capitalization rate, applied on accumulated expenditures for the vessel, is based on interest rates applicable to outstanding borrowings of the period. |
(j) | Property and equipment: The Company owns the land and building where its offices are located. Land is presented in its fair value on the date of acquisition and it is not subject to depreciation. The building has an estimated useful life of 55 years with no residual value. Depreciation is calculated on a straight-line basis. Equipment consists of office furniture and equipment, computer software and hardware and vehicles which consist of motor scooters and a car. The useful life of the car is 10 years, of the office furniture, equipment and the scooters is 5 years; and of the computer software and hardware is 3 years. Depreciation is calculated on a straight-line basis. |
(k) | Prepaid Charter Revenue : When the Company acquires a vessel with a time charter attached and the present value of the contractual cash flows of the time charter assumed is greater than its current fair value with reference to market data, the difference, capped to the vessel's fair value on a charter free basis, is recorded as prepaid charter revenue. Prepaid charter revenue is amortized to revenue over the period of the time charter assumed and is tested for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. |
(l) | Impairment of Long-Lived Assets: Long-lived assets (vessels, land, and building) and certain identifiable intangibles held and used by an entity are reviewed for impairment whenever events or changes in circumstances (such as market conditions, obsolesce or damage to the asset, potential sales and other business plans) indicate that the carrying amount of the assets may not be recoverable. When the estimate of undiscounted projected net operating cash flows, excluding interest charges, expected to be generated by the use of the asset over its remaining useful life and its eventual disposition is less than its carrying amount, the Company should evaluate the asset for an impairment loss. Measurement of the impairment loss is based on the fair value of the asset. The Company determines the fair value of its assets based on management estimates and assumptions and by making use of available market data and taking into consideration third party valuations. |
(m) | Vessel Depreciation : Depreciation is computed using the straight-line method over the estimated useful life of the vessels, after considering the estimated salvage (scrap) value. Each vessel's salvage value is equal to the product of its lightweight 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 remaining estimated useful life. When regulations place limitations over the ability of a vessel to trade on a worldwide basis, its remaining useful life is adjusted at the date such regulations are adopted. |
(n) | Accounting for Dry-Docking Costs : The Company follows the deferral method of accounting for dry-docking costs whereby actual costs incurred are deferred and are amortized on a straight-line basis over the period through the date the next dry-docking is scheduled to become due. Unamortized dry-docking costs of vessels that are sold are written off and included in the calculation of the resulting gain or loss in the year of the vessel's sale. |
(o) | Financing Costs : Fees paid to lenders for obtaining new loans or refinancing existing ones are deferred and recorded as a contra to debt. Other fees paid for obtaining loan facilities not used at the balance sheet date are capitalized as deferred financing costs. Fees relating to drawn loan facilities are amortized to interest and finance costs over the life of the related debt using the effective interest method and fees incurred for loan facilities not used at the balance sheet date are amortized using the straight line method according to their availability terms. Unamortized fees relating to loans repaid or refinanced as debt extinguishment are expensed as interest and finance costs in the period the repayment or extinguishment is made. Loan commitment fees are charged to expense in the period incurred, unless they relate to loans obtained to finance vessels under construction, in which case they are capitalized to the vessels' cost. An amount of $455, representing the current portion of deferred financing costs as at December 31, 2013 was reclassified to the Current portion of long-term debt of the respective year, for comparability purposes with the December 31, 2014 consolidated balance sheet. |
(p) | Concentration of Credit Risk: Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist principally of cash, trade accounts receivable and the loan receivable from a related party. The Company places its temporary cash investments, consisting mostly of deposits, with various qualified financial institutions and performs periodic evaluations of the relative credit standing of those financial institutions that are considered in the Company's investment strategy. The Company limits its credit risk with accounts receivable by performing ongoing credit evaluations of its customers' financial condition and generally does not require collateral for its accounts receivable and does not have any agreements to mitigate credit risk. The Company limits its credit risk with the loan receivable by performing ongoing credit evaluations of Diana Containerships' financial condition. The loan agreement is guaranteed by Diana Containerships but does not have any collateral and the Company has not entered into any agreement to mitigate credit risk. |
(q) | Accounting for Revenues and Expenses: Revenues are generated from time charter agreements and are usually paid fifteen days in advance. Time charter agreements with the same charterer are accounted for as separate agreements according to the terms and conditions of each agreement. Time charter revenues are recorded over the term of the charter as service is provided. Income representing ballast bonus payments by the charterer to the vessel owner is recognized in the period earned. Revenues from time charter agreements providing for varying annual rates over their term are accounted for on a straight line basis. Deferred revenue includes cash received prior to the balance sheet date for which all criteria to recognize as revenue have not been met. Deferred revenue may also include deferred revenue resulting from charter agreements providing for varying annual rates, which are accounted for on a straight line basis, or the unamortized balance of the liability associated with the acquisition of second-hand vessels with time charters attached which were acquired at values below fair market value at the date the acquisition agreement is consummated. Voyage expenses, primarily consisting of commissions, port, canal and bunker expenses that are unique to a particular charter, are paid for by the charterer under time charter arrangements, except for commissions, which are always paid for by the Company, regardless of charter type. All voyage and vessel operating expenses are expensed as incurred, except for commissions. Commissions are deferred over the related voyage charter period to the extent revenue has been deferred since commissions are due as the Company's revenues are earned. |
(r) | Repairs and Maintenance: All repair and maintenance expenses including underwater inspection expenses are expensed in the year incurred. Such costs are included in vessel operating expenses in the accompanying consolidated statements of operations. |
(s) | Earnings / (loss) per Common Share: Basic earnings / (loss) per common share are computed by dividing net income / (loss) available to common stockholders by the weighted average number of common shares outstanding during the year. Diluted earnings per common share, reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised. |
(t) | Segmental Reporting: The Company has determined that it operates under one reportable segment, relating to its operations of the dry-bulk vessels. The Company reports financial information and evaluates the operations of the segment by charter revenues and not by the length of ship employment for its customers, i.e. spot or time charters. The Company does not use discrete financial information to evaluate the operating results for each such type of charter. Although revenue can be identified for these types of charters, management cannot and does not identify expenses, profitability or other financial information for these charters. As a result, management, including the chief operating decision maker, reviews operating results solely by revenue per day and operating results of the fleet. Furthermore, when the Company charters a vessel to a charterer, the charterer is free to trade the vessel worldwide and, as a result, the disclosure of geographic information is impracticable. |
(u) | Variable Interest Entities: The Company evaluates financial instruments, service contracts, and other arrangements to determine if any variable interests relating to an entity exist, as the primary beneficiary would be required to include assets, liabilities, and the results of operations of the variable interest entity in its financial statements. As of December 31, 2014 and 2013, no such interests were identified. |
(v) | Fair Value Measurements : The Company classifies and discloses its assets and liabilities carried at the fair value in one of the following categories: |
Level 1: | Quoted market prices in active markets for identical assets or liabilities; |
Level 2: | Observable market based inputs or unobservable inputs that are corroborated by market data; |
Level 3: | Unobservable inputs that are not corroborated by market data. |
(w) | Share Based Payments: The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost is recognized over the period during which an employee is required to provide service in exchange for the award—the requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service. Employee share purchase plans will not result in recognition of compensation cost if certain conditions are met. The Company initially measures the cost of employee services received in exchange for an award or liability instrument based on its current fair value; the fair value of that award or liability instrument is re-measured subsequently at each reporting date through the settlement date. Changes in fair value during the requisite service period are recognized as compensation cost over that period with the exception of awards granted in the form of restricted shares which are measured at their grant date fair value and are not subsequently re-measured. The grant-date fair value of employee share options and similar instruments are estimated using option-pricing models adjusted for the unique characteristics of those instruments (unless observable market prices for the same or similar instruments are available). If an equity award is modified after the grant date, incremental compensation cost will be recognized in an amount equal to the excess of the fair value of the modified award over the fair value of the original award immediately before the modification. |
(x) | Derivatives: The Company is exposed to interest rate fluctuations associated with its variable rate borrowings and its objective is to manage the impact of such fluctuations on earnings and cash flows of its borrowings. In this respect, in May 2009, the Company entered into a five-year zero cost collar agreement, novated in March 2012, and terminated in May 2014, to manage its exposure to interest rate changes related to its borrowings. The collar agreement was considered as an economic hedge agreement as it did not meet the criteria of hedge accounting; therefore, the changes in its fair value were recognized in earnings (Note 16). |
(y) | Equity method investments: Investments in common stock in entities over which the Company exercises significant influence, but does not exercise control are accounted for by the equity method of accounting. Under this method, the Company records such an investment at cost and adjusts the carrying amount for its share of the earnings or losses of the entity subsequent to the date of investment and reports the recognized earnings or losses in income. The Company also evaluates whether a loss in value of an investment that is other than a temporary decline should be recognized. Evidence of a loss in value might include absence of an ability to recover the carrying amount of the investment or inability of the investee to sustain an earnings capacity that would justify the carrying amount of the investment. Dividends received reduce the carrying amount of the investment. When the Company's share of losses in an entity accounted for by the equity method equals or exceeds its interest in the entity, the Company does not recognize further losses, unless the Company has made advances, incurred obligations and made payments on behalf of the entity. |
4. | Transactions with Related Parties |
(a) | Altair Travel Agency S.A. ("Altair"): The Company uses the services of an affiliated travel agent, Altair, which is controlled by the Company's CEO and Chairman. Travel expenses for 2014, 2013, and 2012, amounted to $2,765, $2,640, and $2,957, respectively, and are included in Vessels, Advances for vessels under construction and acquisitions and other vessel costs, Vessel operating expenses and General and administrative expenses in the accompanying consolidated financial statements. At December 31, 2014 and 2013, an amount of $281 and $196, respectively, was payable to Altair and is included in Due to related parties in the accompanying consolidated balance sheets. |
(b) | Diana Containerships Inc. ("Diana Containerships"): Until February 28, 2013, DSS received from Diana Containerships management fees of $15 per month for each vessel in operation and $20 per month for each laid-up vessel, 1% commissions on the gross hire and freight earned by each vessel and $10 per month for administrative fees pursuant to management and administrative services agreements between Diana Containerships, its vessel owning companies and DSS, which were terminated on March 1, 2013. For 2014, 2013, and 2012, revenues derived from the agreements with Diana Containerships amounted to $0, $447, and $2,447, respectively, and they are separately presented as Other revenues in the accompanying consolidated statements of operations. As at December 31, 2014 and 2013, there was no amount due to or from Diana Containerships and its vessels, relating to these management agreements. |
(c) | Diana Enterprises Inc. ("Diana Enterprises"): Diana Enterprises is a company controlled by the Company's CEO and Chairman. On March 4, 2014 DSS entered into an agreement with Diana Enterprises to provide brokerage services to DSI for a monthly fee of $104, payable quarterly in advance, effective from January 1, 2014 and until March 31, 2015, which however was terminated on June 30, 2014, as on April 9, 2014, an agreement between Diana Shipping Inc and Diana Enterprises, was signed to replace the previous one, with all other terms being the same, and which became effective on July 1, 2014. Previously, an agreement dated March 15, 2013 was in effect, with a monthly fee of $208, payable quarterly in advance from March 1, 2013 (effective date) until its termination on January 1, 2014. Prior to that, there was an agreement in effect since February 22, 2012, having an annual fee of $2,834. For 2014, 2013, and 2012, brokerage fees amounted to $1,250, $2,481, and $2,384 respectively, and are included in General and administrative expenses in the accompanying consolidated statements of operations. At December 31, 2014 and 2013, there was an amount of $0 and $25, respectively, due to Diana Enterprises included in Due to related parties, in the accompanying balance sheets. Until March 1, 2013, DSS had an agreement with Diana Enterprises to provide brokerage services to Diana Containerships, which was terminated when DSS ceased from being the management company of the Diana Containerships' group. |
5. | Advances for Vessels under Construction and Acquisitions and Other Vessel Costs |
2014
|
2013
|
|||||||
Beginning balance
|
$
|
38,862
|
$
|
11,502
|
||||
- Advances for vessels under construction and other vessel costs
|
43,160
|
30,053
|
||||||
- Advances for vessel acquisitions and other vessel costs
|
10,066
|
23,983
|
||||||
- Transferred to vessel cost (Note 6)
|
(62,588
|
)
|
(26,676
|
)
|
||||
Ending balance
|
$
|
29,500
|
$
|
38,862
|
6. | Vessels |
Vessel Cost
|
Accumulated Depreciation
|
Net Book Value
|
||||||||||
|
||||||||||||
Balance, December 31, 2012
|
$
|
1,515,370
|
$
|
(304,232
|
)
|
$
|
1,211,138
|
|||||
|
||||||||||||
- Transfer from advances for vessels under construction and acquisition and other vessel costs (Note 5)
|
26,676
|
-
|
26,676
|
|||||||||
- Acquisition, improvements and other vessel costs
|
144,544
|
-
|
144,544
|
|||||||||
- Depreciation for the year
|
-
|
(61,983
|
)
|
(61,983
|
)
|
|||||||
Balance, December 31, 2013
|
$
|
1,686,590
|
$
|
(366,215
|
)
|
$
|
1,320,375
|
|||||
|
||||||||||||
- Transfer from advances for vessels under construction and acquisition and other vessel costs (Note 5)
|
62,588
|
-
|
62,588
|
|||||||||
- Acquisitions, improvements and other vessel costs
|
58,476
|
-
|
58,476
|
|||||||||
- Depreciation for the year
|
-
|
(68,306
|
)
|
(68,306
|
)
|
|||||||
Balance, December 31, 2014
|
$
|
1,807,654
|
$
|
(434,521
|
)
|
$
|
1,373,133
|
7. | Property and equipment, net |
Property and Equipment
|
Accumulated Depreciation
|
Net Book Value
|
||||||||||
|
||||||||||||
Balance, December 31, 2012
|
$
|
24,105
|
$
|
(1,331
|
)
|
$
|
22,774
|
|||||
|
||||||||||||
- Additions in equipment and building improvements
|
575
|
-
|
575
|
|||||||||
- Depreciation for the year
|
-
|
(523
|
)
|
(523
|
)
|
|||||||
Balance, December 31, 2013
|
$
|
24,680
|
$
|
(1,854
|
)
|
$
|
22,826
|
|||||
|
||||||||||||
- Write off of fully depreciated assets
|
(100
|
)
|
100
|
-
|
||||||||
- Additions in property and equipment
|
1,574
|
-
|
1,574
|
|||||||||
- Depreciation for the year
|
-
|
(513
|
)
|
(513
|
)
|
|||||||
Balance, December 31, 2014
|
$
|
26,154
|
$
|
(2,267
|
)
|
$
|
23,887
|
8. | Prepaid charter revenue |
2014
|
2013
|
|||||||
Revolving credit facility
|
$
|
210,000
|
$
|
240,000
|
||||
Secured term loans
|
276,008
|
193,096
|
||||||
Total debt outstanding
|
$
|
486,008
|
$
|
433,096
|
||||
Less related deferred financing costs
|
(1,752
|
)
|
(1,539
|
)
|
||||
Total debt, net of deferred financing costs
|
$
|
484,256
|
$
|
431,557
|
||||
Less: Current portion of long term debt, net of deferred financing costs current
|
(78,734
|
)
|
(46,077
|
)
|
||||
Long-term debt, net of current portion and deferred financing costs, non-current
|
$
|
405,522
|
$
|
385,480
|
Period
|
Principal Repayment
|
|||
January 1, 2015 to December 31, 2015
|
$
|
79,288
|
||
January 1, 2016 to December 31, 2016
|
200,689
|
|||
January 1, 2017 to December 31, 2017
|
49,930
|
|||
January 1, 2018 to December 31, 2018
|
27,242
|
|||
January 1, 2019 to December 31, 2019
|
38,992
|
|||
January 1, 2020 and thereafter
|
89,867
|
|||
Total
|
$
|
486,008
|
10. | Commitments and Contingencies |
a) | Various claims, suits, and complaints, including those involving government regulations and product liability, arise in the ordinary course of the shipping business. In addition, losses may arise from disputes with charterers, agents, insurance and other claims with suppliers relating to the operations of the Company's vessels. The Company accrues for the cost of environmental and other liabilities when management becomes aware that a liability is probable and is able to reasonably estimate the probable exposure. |
b) | The Company has shipbuilding contracts for the construction of two Newcastlemax dry bulk carriers and one Kamsarmax dry bulk carrier and a contract to acquire a Capesize dry bulk carrier (Note 5). As at December 31, 2014, the total obligations under these contracts amounted to $147,291, which subsequently were reduced (Note 17). |
c) | As at December 31, 2014, the minimum contractual gross charter revenues expected to be generated from fixed and non-cancelable time charter contracts existing as at December 31, 2014 and until their expiration were as follows: |
Period
|
Amount
|
|||
Year 1
|
$
|
100,652
|
||
Year 2
|
11,854
|
|||
Total
|
$
|
112,506
|
11. | Capital Stock and Changes in Capital Accounts |
(a) | Preferred stock : As at December 31, 2014 and 2013, the Company's authorized preferred stock consists of 25,000,000 shares (all in registered form) of preferred stock, par value $0.01 per share, of which as at December 31, 2014, 1,000,000 were designated as Series A Participating Preferred Shares; and 5,000,000 were designated as Series B Preferred Shares. |
(b) | Common Stock: The Company's authorized capital stock consists of 200,000,000 shares (all in registered form) of common stock, par value $0.01 per share. The holders of the common shares are entitled to one vote on all matters submitted to a vote of stockholders and to receive all dividends, if any. |
(c) | Incentive plan : In February 2005, the Company adopted an equity incentive plan (the "Plan") for 2,800,000 common shares, which was amended and restated on October 21, 2008 and terminated in 2012 as all shares reserved had been issued. In May 2011, the Company's board of directors approved to adopt the Diana Shipping Inc. 2011 Equity Incentive Plan, with substantially the same terms and provisions as the Company's Amended and Restated 2005 Equity Incentive Plan. Under the 2011 Equity Incentive Plan, an aggregate of 5,000,000 common shares were reserved for issuance, of which as at December 31, 2014 2,484,759 remained reserved for issuance. In November 2014, the Company's board of directors approved to adopt the Diana Shipping Inc. 2014 Equity Incentive Plan, for 5,000,000 additional shares. |
Number of Shares
|
Weighted Average Grant Date Price
|
|||||||
Outstanding at December 31, 2011
|
1,384,062
|
$
|
14.07
|
|||||
Granted
|
667,614
|
9.13
|
||||||
Vested
|
(600,051
|
)
|
13.83
|
|||||
Outstanding at December 31, 2012
|
1,451,625
|
$
|
11.90
|
|||||
Granted
|
607,946
|
9.06
|
||||||
Vested
|
(701,198
|
)
|
12.64
|
|||||
Outstanding at December 31, 2013
|
1,358,373
|
10.25
|
||||||
Granted
|
1,864,000
|
9.38
|
||||||
Vested
|
(730,539
|
)
|
11.25
|
|||||
Outstanding at December 31, 2014
|
2,491,834
|
$
|
9.30
|
(d) | Share Repurchase Agreement: On May 22, 2014, the Company's Board of Directors authorized a share repurchase plan for up to $100,000 worth of shares of the Company's common stock, under which, as at December 31, 2014, the Company had repurchased and retired 2,845,549 shares at an aggregate cost of approximately $25,349 (Note 17). |
12. | Voyage and Vessel Operating Expenses |
2014
|
2013
|
2012
|
||||||||||
Voyage Expenses
|
||||||||||||
Bunkers
|
$
|
2,026
|
$
|
(62
|
)
|
$
|
(2,149
|
)
|
||||
Commissions charged by third parties
|
8,245
|
7,939
|
10,273
|
|||||||||
Miscellaneous
|
394
|
242
|
150
|
|||||||||
Total
|
$
|
10,665
|
$
|
8,119
|
$
|
8,274
|
||||||
Vessel Operating Expenses
|
||||||||||||
Crew wages and related costs
|
$
|
50,442
|
$
|
45,451
|
$
|
37,351
|
||||||
Insurance
|
6,723
|
6,438
|
4,747
|
|||||||||
Spares and consumable stores
|
17,106
|
14,825
|
14,996
|
|||||||||
Repairs and maintenance
|
8,379
|
5,548
|
6,609
|
|||||||||
Tonnage taxes (Note 15)
|
2,109
|
1,040
|
361
|
|||||||||
Environmental costs
|
1,314
|
2
|
-
|
|||||||||
Other operating expenses
|
850
|
3,907
|
2,229
|
|||||||||
Total
|
$
|
86,923
|
$
|
77,211
|
$
|
66,293
|
13. | Interest and Finance Costs |
2014
|
2013
|
2012
|
||||||||||
Interest expense
|
$
|
7,815
|
$
|
7,600
|
$
|
7,021
|
||||||
Amortization of financing costs
|
519
|
473
|
379
|
|||||||||
Commitment fees and other costs
|
93
|
67
|
218
|
|||||||||
Total
|
$
|
8,427
|
$
|
8,140
|
$
|
7,618
|
14. | Earnings / (loss) per Share |
2014
|
2013
|
2012
|
||||||||||
Net income / (loss)
|
$
|
(10,268
|
)
|
$
|
(21,205
|
)
|
$
|
54,639
|
||||
Less dividends on series B preferred shares
|
$
|
(5,080
|
)
|
$
|
-
|
$
|
-
|
|||||
Net income / (loss) attributed to common stockholders
|
(15,348
|
)
|
(21,205
|
)
|
54,639
|
|||||||
Weighted average number of common shares, basic and diluted
|
81,292,290
|
81,328,390
|
81,083,485
|
|||||||||
Earnings / (loss) per share, basic and diluted
|
$
|
(0.19
|
)
|
$
|
(0.26
|
)
|
$
|
0.67
|
||||
15. | Income Taxes |
16. | Financial Instruments |
17. | Subsequent Events |
(a) | Delivery of vessel and payment of construction installment: On January 12, 2015, the Company took delivery of Santa Barbara, a vessel that Lelu had agreed to acquire. In addition, on February 2, 2015, the Company paid an installment for the construction of hull H2548 owned by Aster (Note 5). As a result of the two events, the Company's purchase obligations for the acquisition and or construction of vessels (Note 10), subsequently to December 31, 2014 reduced to $99,986. |
(b) | Series B Preferred Stock Dividends: On January 15, 2015, the Company paid a dividend on its series B preferred stock, amounting to $0.5546875 per share, or $1,442, to its stockholders of record as of January 14, 2015. |
(c) | Repurchase and Retirement of Common Stock: Under the repurchase program (Note 11), the Company, subsequently to December 31, 2014, repurchased and retired an additional number of 413,804 shares for an aggregate cost of $2,673. |
(d) | New Loan Agreements: On March 17, 2015, the Company, through eight separate wholly owned subsidiaries, entered into a loan agreement with Nordea Bank for a secured term loan facility of up to $110,000, to refinance the existing indebtedness with the bank and for general corporate and working capital purposes. On March 19, 2015, we drew down $93,080 and we repaid the then existing indebtedness with the bank amounting to $38,345. |
(e) | Termination of Loan Agreements: On March 10 and on March 20, 2015, the Company repaid in full the then outstanding indebtedness with Deutsche Bank for the vessels i) "New York" and ii) "Myrto" and "Maia", respectively, and the related agreements were terminated. |
(f) | Loan Commitment: On February 27, 2015, the Company entered into a commitment letter with Danish Ship Finance for a loan facility of $30,000 to finance the acquisition cost of the vessel "Santa Barbara". On March 12, 2015, the Company was offered a term sheet from ABN AMRO Bank NV for a loan facility of up to $53,000 to re-finance the acquisition cost of the vessels "New York", "Myrto" and "Maia", subject to signing the loan agreement by May 01, 2015. |
(g) | Annual Incentive Bonus : On March 3, 2015 the Company's Board of Directors approved a cash bonus of about $1,714 to all employees and executive management of the Company, which had been accrued as at December 31, 2014, and 1,100,000 shares of restricted common stock awards to executive management and non-executive directors, pursuant to the Company's 2011 equity incentive plan. The fair value of the restricted shares based on the closing price on the date of the Board of Directors' approval was $7,601 and will be recognized in income ratably over the restricted shares vesting period which will be 3 years. |
Clause
|
Page
|
|
1
|
Interpretation
|
1
|
2
|
Loan Facility and Designated Transactions
|
17
|
3
|
Position of the Lenders and the swap bank
|
17
|
4
|
Drawdown
|
18
|
5
|
Interest
|
19
|
6
|
Interest Periods
|
23
|
7
|
Default Interest
|
24
|
8
|
Repayment and Prepayment
|
25
|
9
|
Conditions Precedent
|
27
|
10
|
Representations and Warranties
|
28
|
11
|
General Undertakings
|
31
|
12
|
Corporate Undertakings
|
36
|
13
|
Insurance
|
37
|
14
|
Ship Covenants
|
42
|
15
|
Security cover
|
47
|
16
|
Payments and Calculations
|
49
|
17
|
Application of Receipts
|
51
|
18
|
Application of Earnings
|
52
|
19
|
Events of Default
|
53
|
20
|
Fees and Expenses
|
58
|
21
|
Indemnities
|
59
|
22
|
No Set-Off or Tax Deduction
|
62
|
23
|
Illegality, etc
|
64
|
24
|
Increased Costs
|
65
|
25
|
Set-Off
|
67
|
26
|
Transfers and Changes in Lending Offices
|
67
|
27
|
Variations and Waivers
|
71
|
28
|
Notices
|
72
|
29
|
Joint and Several Liability
|
76
|
30
|
Supplemental
|
77
|
31
|
Law and Jurisdiction
|
79
|
Schedule 1 Lenders and Commitments
|
80
|
|
Schedule 2 Drawdown Notice
|
81
|
|
Schedule 3 Condition Precedent Documents
|
82
|
|
Schedule
4
Transfer
Certificate
|
85
|
|
Schedule 5 Designation Notice
|
89
|
|
Execution Page
|
90
|
(1) | WENO SHIPPING COMPANY INC. and PULAP SHIPPING COMPANY INC. , each a corporation incorporated in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 as joint and several Borrowers ; |
(2) | THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1, as Lenders ; |
(3) | BNP PARIBAS acting through its office at 16 Boulevard des Italiens, 75009 Paris, France as Agent and Security Trustee . |
(4) | BNP PARIBAS acting through its office at 3 rue Taitbout, 75009 Paris, France as Swap Bank . |
(A) | The Lenders have agreed to make available to the Borrowers a senior secured term loan facility of up to $55,000,000 in two Advances in the amounts and for the purposes referred to below: |
(i) | Advance A shall be in an amount equal to the lesser of (a) $29,000,000 and (b) 55 per cent. of the Initial Market Value of Ship A which shall be made available for the purpose of refinancing the acquisition cost of Ship A; and |
(ii) | Advance B shall be in an amount equal to the lesser of (a) $26,000,000 and (b) 55 per cent. of the Initial Market Value of Ship B which shall be made available for the purpose of refinancing the acquisition cost of Ship B. |
(B) | The Borrowers may from time to time hedge their exposure under this Agreement to interest rate fluctuations by entering into Designated Transactions with the Swap Bank. |
(C) | The Lenders and the Swap Bank 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 |
(a) | 31 December 2014 (or such later date as the Agent may, with the authorisation of the Majority Lenders, agree with the Borrowers); or |
(b) | if earlier, the date on which the Total Commitments are fully borrowed, cancelled or terminated; |
(a) | the agreements on capital requirements, leverage ratio and liquidity standards contained in "Basel III: A global regulatory framework for more resilient banks and banking systems", "Basel III: International framework for liquidity risk measurement, standards and monitoring" and "Guidance for national authorities operating the countercyclical capital buffer" published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated from time to time; |
(b) | the rules for global systemically important banks contained in "Global systemically important banks: assessment methodology and the additional loss absorbency requirement - Rules text" published by the Basel Committee on Banking Supervision in November 2011, as amended, supplemented or restated from time to time; and |
(c) | any further guidance or standards published from time to time by the Basel Committee on Banking Supervision relating to "Basel III"; |
(a) | Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms; and |
(b) | Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms; |
(a) | it is entered into by the Borrowers pursuant to the Master Agreement with the Swap Bank; and |
(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; |
(a) | except to the extent that they fall within paragraph (b); |
(i) | all freight, hire and passage moneys; |
(ii) | compensation payable to either 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 that Ship; |
(a) | any claim by any governmental, judicial or regulatory authority which arises out of an Environmental Incident or an alleged Environmental Incident or which relates to any Environmental Law; or |
(b) | any claim by any other person which relates to an Environmental Incident or to an alleged Environmental Incident, |
(a) | any release of Environmentally Sensitive Material from 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 either 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 either 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; |
(a) | sections 1471 to 1474 of the Code or any associated regulations; |
(b) | any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of any law or regulation referred to in paragraph (a) above; or |
(c) | any agreement pursuant to the implementation of any treaty, law or regulation referred to in paragraphs (a) or (b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction; |
(a) | this Agreement; |
(b) | the Agency and Trust Agreement; |
(c) | the Master Agreement; |
(d) | the Master Agreement Assignment; |
(e) | the Corporate Guarantee; |
(f) | the General Assignments; |
(g) | the Mortgages; |
(h) | the Account Pledges; |
(i) | any Charterparty Assignments; |
(j) | the Approved Manager's Undertaking; |
(k) | the Fee Letter; and |
(l) | any other document (whether creating a Security Interest or not) which is executed at any time by either Borrower, the Corporate Guarantor 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 Bank under this Agreement or the Master Agreement or any of the other documents referred to in this definition; |
(a) | for principal, interest or any other sum payable in respect of any moneys borrowed or raised by the debtor; |
(b) | under any loan stock, bond, note or other security issued by the debtor; |
(c) | under any acceptance credit, guarantee or letter of credit facility or dematerialised equivalent made available to the debtor; |
(d) | under a financial lease, a deferred purchase consideration arrangement or any other agreement having the commercial effect of a borrowing or raising of money by the debtor; |
(e) | under any foreign exchange transaction, any interest or currency swap or any other kind of derivative transaction entered into by the debtor or, 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) | any amount raised under any other transaction (including any forward sale or purchase agreement) of a type not referred to in any other paragraph of this definition having the commercial effect of a borrowing; or |
(g) | in connection with any receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis); or |
(h) | 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 (g) if the references to the debtor referred to the other person; |
(a) | all policies and contracts of insurance, including entries of the Ship in any protection and indemnity or war risks association, effected in respect of the Ship, its Earnings or otherwise in relation to it whether before, on or after the date of this Agreement; and |
(b) | all rights and other assets relating to, or derived from, any of the foregoing, including any rights to a return of a premium and any rights in respect of any claim whether or not the relevant policy, contract of insurance or entry has expired on or before the date of this Agreement; |
(a) | the applicable Screen Rate for the longest period (for which that Screen Rate is available) which is less than that Interest Period; and |
(b) | the applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds that Interest Period, |
(a) | a bank or financial institution listed in Schedule 1 and acting through its branch or office indicated in Schedule 1 (or through another branch notified to the Borrowers under Clause 26.14) unless it has delivered a Transfer Certificate or Certificates covering the entire amounts of its Commitment and its Contribution; and |
(b) | the holder for the time being of a Transfer Certificate; |
(a) | the applicable Screen Rate; |
(b) | (if no Screen Rate is available for that Interest Period) the Interpolated Screen Rate; or |
(c) | if: |
(i) | no Screen Rate is available for the currency of the Loan; or |
(ii) | no Screen Rate is available for that Interest Period and it is not possible to calculate an Interpolated Screen Rate, |
(iii) | the Reference Bank Rate, |
(a) | before an Advance has been made, Lenders whose Commitments total 66.66 per cent. of the Total Commitments; and |
(b) | after an Advance has been made, Lenders whose Contributions total 66.66 per cent. of the Loan; |
(a) | the financial condition, assets, prospects or business of either Borrower and/or the Corporate Guarantor or on the consolidated financial condition, assets, prospects or business of the Group; or |
(b) | the ability of a Borrower or the Corporate Guarantor to perform and comply with its obligations under any Finance Documents; |
(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 14.13(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) | 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); |
(a) | that is listed on, owned or controlled by a person listed on, or acting on behalf of a person listed on, any Sanctions List; or |
(b) | is located, organised or resident in a Sanctioned Country; or |
(c) | otherwise a target of Sanctions (being a person with whom a US person or other national of a Sanctions Authority would be prohibited or restricted by law from engaging in trade, business or other activities or against whom Sanctions are otherwise directed); |
(a) | administered, enacted, enforced or imposed by the United States Government (including CISADA), the United Nations Security Council, the European Union or its Member States (including, without limitation, the United Kingdom and/or the French Republic), Switzerland or the respective governmental institutions and agencies of any of the foregoing, including without limitation, the Office of Foreign Assets Control (OFAC), the United States Department of State, and Her Majesty's Treasury (HMT) and the State Secretariat for Economic Affairs of Switzerland (SECO) (together, the "Sanctions Authorities"); or |
(b) | otherwise imposed by any law or regulation; |
(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 in which the vessel concerned has been arrested or a writ has been issued or similar step taken; and |
(c) | any arrangement entered into by a person (A) the effect of which is to place another person (B) in a position which is similar, in economic terms, to the position in which B would have been had he held a security interest over an asset of A; but this paragraph (c) does not apply to a right of set off or combination of accounts conferred by the standard terms of business of a bank or financial institution; |
(a) | all amounts which have become due for payment by either Borrower or any Security Party under the Finance Documents have been paid; |
(b) | no amount is owing or has accrued (without yet having become due for payment) under any Finance Document; |
(c) | neither either of the Borrowers nor any Security Party has any future or contingent liability under Clauses 20, 21 or 22 or any other provision of this Agreement or another Finance Document; |
(a) | actual, constructive, compromised, agreed or arranged total loss of that Ship; |
(b) | any expropriation, confiscation, requisition or acquisition of that Ship, whether for full consideration, a consideration less than its proper value, a nominal consideration or without any consideration, which is effected by any government or official authority or by any person or persons claiming to be or to represent a government or official authority (excluding a requisition for hire for a fixed period not exceeding 1 year without any right to an extension) unless it is within 1 month redelivered to the full control of the Borrower owning that Ship; and |
(c) | any arrest, capture, seizure or detention of that Ship (including any hijacking or theft) unless it is within 1 month redelivered to the full control of the Borrower owning that Ship; |
(a) | in the case of an actual loss of that Ship, the date on which it occurred or, if that is unknown, the date when that Ship was last heard of; |
(b) | in the case of a constructive, compromised, agreed or arranged total loss of that Ship, the earliest of: |
(i) | the date on which a notice of abandonment is given to the insurers; |
(ii) | any condemnation of that Ship by any tribunal or by any person or person claiming to be a tribunal; and |
(iii) | the date of any compromise, arrangement or agreement made by or on behalf of the Borrower owning that Ship with that Ship's insurers in which the insurers agree to treat that Ship as a total loss; and |
(c) | in the case of any other type of total loss, on the date (or the most likely date) on which it appears to the Agent that the event constituting the total loss occurred; |
(a) | a person which is resident for tax purposes in the United States of America; or |
(b) | a person some or all of whose payments under the Finance Documents are from sources within the United States for US federal income tax purposes. |
1.2 | Construction of certain terms |
1.3 | Meaning of "month" |
(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) | 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 attached to the issued shares of 5; 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, |
1.5 | General Interpretation |
(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 ; and |
(e) | A Potential Event of Default (other than an Event of Default) is " continuing " if it has not been remedied or waived and an Event of Default is " continuing " if it has not been waived. |
1.6 | Headings |
2 | LOAN FACILITY AND DESIGNATED TRANSACTIONS |
2.1 | Amount of facility |
2.2 | Lenders' participations in Advances |
2.3 | Purpose of Advances |
2.4 | Designated Transactions under the Master Agreement |
3 | POSITION OF THE LENDERS AND THE SWAP BANK |
3.1 | Interests of Creditor Parties several |
3.2 | Individual Creditor Parties' right of action |
3.3 | Proceedings by individual Creditor Party |
(a) | any other liability or obligation of a Borrower or a Security Party under or connected with a Finance Document; or |
(b) | any misrepresentation or breach of warranty by either Borrower or a Security Party in or connected with a Finance Document. |
3.4 | Obligations of Creditor Parties several |
(a) | the obligations of the other Lenders or the Swap Bank being increased; nor |
(b) | either Borrower, any Security Party or any other Lender or the Swap Bank being discharged (in whole or in part) from its obligations under any of the Finance Documents, |
3.5 | Parties bound by certain actions of Lenders |
(a) | any determination made, or action taken, by the Lenders under any provision of a Finance Document; |
(b) | any instruction or authorisation given by the Lenders to the Agent or the Security Trustee under or in connection with any Finance Document; and |
(c) | any action taken (or in good faith purportedly taken) by the Agent or the Security Trustee in accordance with such an instruction or authorisation. |
3.6 | Reliance on action of Agent |
(a) | shall be entitled to assume that the Lenders have duly given any instruction or authorisation which, under any provision of a Finance Document, is required in relation to any action which the Agent has taken or is about to take; and |
(b) | shall not be entitled to require any evidence that such an instruction or authorisation has been given. |
3.7 | Construction |
4 | DRAWDOWN |
4.1 | Request for Advance |
4.2 | Availability |
(a) | a Drawdown Date has to be a Business Day during the Availability Period; |
(b) | the amount of Advance A shall not exceed an amount equal to the lesser of (i) $29,000,000 and (ii) 55 per cent. of the Initial Market Value of Ship A and shall be used in refinancing part of the acquisition cost of Ship A; |
(c) | the amount of Advance B shall not exceed an amount equal to the lesser of (i) $26,000,000 and (ii) 55 per cent. of the Initial Market Value of Ship B and shall be used in refinancing part of the acquisition cost of Ship B; and |
(d) | the aggregate amount of the Advances shall not exceed the Total Commitments. |
4.3 | Notification to Lenders of receipt of a Drawdown Notice |
(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 |
4.5 | Lenders to make available Contributions |
4.6 | Disbursement of Advance |
(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. |
5 | INTEREST |
5.1 | Payment of normal interest |
5.2 | Normal rate of interest |
5.3 | Payment of accrued interest |
5.4 | Notification of Interest Periods and rates of normal interest |
(a) | each rate of interest; and |
(b) | the duration of each Interest Period, |
5.5 | Obligation of Reference Banks to quote |
5.6 | Absence of quotations by Reference Banks |
5.7 | Market disruption |
(a) | LIBOR is to be determined by reference to the Reference Banks and no Reference Bank does, before 1.00 p.m. (London time) on the Quotation Date for an Interest Period, provide quotations to the Agent in order to fix LIBOR; or |
(b) | at least 1 Business Day before the start of an Interest Period, a Lender may notify the Agent that LIBOR fixed by the Agent would not accurately reflect the cost to that Lender of funding its respective Contribution (or any part of it) during the Interest Period in the London Interbank Market at or about 11.00 a.m. (London time) on the Quotation Date for the Interest Period; or |
(c) | at least 1 Business Day before the start of an Interest Period, the Agent is notified by a Lender (the "Affected Lender") that for any reason it is unable to obtain Dollars in the London Interbank Market in order to fund its Contribution (or any part of it) during the Interest Period. |
5.8 | Notification of market disruption |
5.9 | Suspension of drawdown |
(a) | in a case falling within paragraphs (a) or (b) of Clause 5.7, 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 |
5.11 | Application of agreed alternative rate of interest |
5.12 | Alternative rate of interest in absence of agreement |
5.13 | Notice of prepayment |
5.14 | Prepayment; termination of Commitments |
(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 and the Mandatory Costs (if any). |
5.15 | Confidential Rates |
(a) | The Agent and the Borrowers agree to keep each Confidential Rate confidential and not to disclose it to anyone, save to the extent permitted by paragraphs (b), (c) and (d) below. |
(b) | The Agent may disclose: |
(i) | any Funding Rate to the Borrowers pursuant to clause 5.4; and |
(ii) | any Confidential Rate to any person appointed by it to provide administration or settlement services in respect of one or more of the Finance Documents including without limitation, in relation to the trading of participations in respect of the Finance Documents, to the extent necessary to enable such service provider to provide any of the services referred to in this paragraph (ii) if the service provider to whom the Confidential Rate is to be given has entered into a confidentiality agreement substantially in the form of the LMA Master Confidentiality Undertaking for Use With Administration/Settlement Service Providers or such other form of confidentiality undertaking agreed between the Agent and the relevant Reference Bank or Lender, as the case may be. |
(c) | The Agent may disclose any Confidential Rate, and the Borrowers may disclose any Funding Rate, to: |
(i) | any of its affiliates and any of its or their officers, directors, employees, professional advisers, auditors, partners, delegates, agents, managers, administrators, nominees, attorneys, trustees or custodians if any person to whom that Confidential Rate is to be given pursuant to this paragraph (i) is informed in writing of its confidential nature and that the Confidential Rate may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of that Confidential Rate or is otherwise bound by requirements of confidentiality in relation to that Confidential Rate; |
(ii) | any person to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation if the person to whom that Confidential Rate is to be given is informed in writing of its confidential nature and that the Confidential Rate may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of the Agent or the Borrowers, as the case may be, it is not practicable to do so in the circumstances; |
(iii) | any person to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes if the person to whom that Confidential Rate is to be given is informed in writing of its confidential nature and that the Confidential Rate may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of the Agent or the relevant Borrower, as the case may be, it is not practicable to do so in the circumstances; and |
(iv) | any person with the consent of the relevant Reference Bank or Lender, as the case may be. |
(d) | The Agent's obligations in this Clause 5.16 relating to quotations provided by Reference Banks are without prejudice to its obligations to make notifications under clause 5.4 provided that (other than pursuant to paragraph (b)(i) above) the Agent shall not include the details of any individual quotation provided by a Reference Bank as part of any such notification. |
(e) | The Agent and the Borrowers acknowledge that each Confidential Rate is or may be price-sensitive information and that the use of such a Confidential Rate may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and the Agent and the Borrowers undertake not to use any Confidential Rate for any unlawful purpose. |
(f) | The Agent and the Borrowers agree (to the extent permitted by law and regulation) to inform the relevant Reference Bank or Lender, as the case may be: |
(i) | of the circumstances of any disclosure of any Confidential Rate made pursuant to paragraph (c)(ii) above except where such disclosure is made to any of the persons referred to in that paragraph during the ordinary course of its supervisory or regulatory function; and |
(ii) | upon becoming aware that any Confidential Rate has been disclosed in breach of this Clause 5.16. |
5.16 | Application of prepayment |
6 | INTEREST PERIODS |
6.1 | Commencement of Interest Periods |
6.2 | Duration of normal Interest Periods |
(a) | subject to sub-paragraph (b) below, 1, 3 or 6 months as notified by the Borrowers to the Agent not later than 11.00 a.m. (Paris time) 5 Business Days before the commencement of the Interest Period; or |
(b) | in the case of the first Interest Period applicable to the second Advance, a period ending on the last day of the Interest Period applicable to the first Advance then current, whereupon both Advances shall be consolidated and treated as a single Advance; |
(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 all the Lenders, agree with the Borrowers. |
6.3 | Duration of Interest Periods for Repayment Instalments |
6.4 | Non-availability of matching deposits for Interest Period selected |
7 | DEFAULT INTEREST |
7.1 | Payment of default interest on overdue amounts |
(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 |
(a) | in the case of an overdue amount of principal, the higher of the rates set out at paragraphs (a) and (b) of Clause 7.3; 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 |
(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 aggregate of the Margin and the Mandatory Cost (if any) plus, in respect of successive periods of any duration (including at call) up to 3 months which the Agent may select from time to time: |
(i) | LIBOR; or |
(ii) | if the Agent (after consultation with the Reference Bank) determines that Dollar deposits for any such period are not being made available to the 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 Bank from such other sources as the Agent (after consultation with the Reference Bank) may from time to time determine. |
7.4 | Notification of Interest Periods and default rates |
7.5 | Payment of accrued default interest |
7.6 | Compounding of default interest |
7.7 | Application to Master Agreement |
8. | REPAYMENT AND PREPAYMENT |
8.1 | Amount of Repayment Instalments |
(a) | 14 equal consecutive six-monthly instalments of $1,618,000 each (the " Repayment Instalments " and each a " Repayment Instalment "); and |
(b) | a balloon instalment of $32,348,000 (the " Balloon Instalment " ), |
8.2 | Repayment Dates |
(a) | the seventh anniversary after the last Drawdown Date to occur under this Agreement; and |
(b) | 30 November 2021. |
8.3 | Final Repayment Date |
8.4 | Voluntary prepayment |
8.5 | Conditions for voluntary prepayment |
(a) | a partial prepayment shall be $1,000,000 or a multiple of $1,000,000; |
(b) | the Agent has received from the Borrowers at least 10 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 either of the Borrowers 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 either Borrower or any Security Party has been complied with; |
(d) | the Borrowers have complied with Clause 8.12 on or prior to the date of prepayment; and |
(e) | the Borrowers have provided evidence satisfactory to the Agent that they have sufficient funds to pay any breakage costs and/or any other amounts that may become payable under this Agreement and the Master Agreement in connection with the prepayment. |
8.6 | Effect of notice of prepayment |
8.7 | Notification of notice of prepayment |
8.8 | Mandatory prepayment |
(a) | in the case of a sale, on or before the date on which the sale is completed by delivery of the relevant Ship to the buyer; or |
(b) | in the case of a Total Loss, on the earlier of the date falling 120 days after the Total Loss Date and the date of receipt by the Security Trustee of the proceeds of insurance relating to such Total Loss. |
8.9 | Amounts payable on prepayment |
8.10 | Application of partial prepayment |
(a) | if made pursuant to Clause 8.4, pro rata against the then outstanding Repayment Instalments and the Balloon Instalment or as otherwise agreed between the Borrowers and the Agent; |
(b) | if made pursuant to Clause 8.8: |
(i) | FIRSTLY: pro rata towards repayment of any overdue interest, any breakage costs, any accrued interest relating to the Loan, any other costs, fees, expenses, commissions due under this Agreement and any periodical payments (other than any payments arising out of a termination or closing out) under the Master Agreement; and |
(ii) | SECONDLY: pro rata against the then outstanding Repayment Instalments and the Balloon Instalment and any Swap Exposure under the Master Agreement. |
8.11 | No reborrowing |
8.12 | Unwinding of Designated Transactions |
8.13 | Prepayment of Swap benefit |
9 | CONDITIONS PRECEDENT |
9.1 | Documents, fees and no default |
(a) | that, on or before the date of this Agreement, the Agent receives: |
(i) | the documents described in Part A of Schedule 3 in a form and substance satisfactory to the Agent and its lawyers; |
(ii) | the structuring fee referred to in Clause 20.1; and |
(iii) | payment in full of any expenses payable pursuant to Clause 20.2 which are due and payable on the date of this Agreement; |
(b) | that, on each Drawdown Date but prior to the making of the relevant Advance, the Lender receives or is satisfied that it will receive on the relevant Drawdown Date the documents described in Part B of Schedule 3 in form and substance satisfactory to the Agent and its lawyers; |
(c) | the documents described in Part B of Schedule 3 in form and substance satisfactory to it and its lawyers; |
(d) | that both at the date of each Drawdown Notice and at each Drawdown Date: |
(i) | no Event of Default or Potential Event of Default has occurred or would result from the borrowing of the Advance; |
(ii) | the representations and warranties in Clause 10.1 and those of either 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; and |
(iv) | there has been no Material Adverse Effect since 31 December 2013; |
(e) | that, if the ratio set out in Clause 15.1 were applied immediately following the making of the Advance, the Borrowers would not be obliged to provide additional security or prepay part of the Loan under that Clause; and |
(f) | that the Agent has received, and found to be acceptable to it, any further opinions, consents, agreements and documents in connection with the Finance Documents which the Agent may, with the authorisation of the Majority Lenders, request by notice to the Borrowers prior to the Drawdown Date. |
9.2 | Waiver of conditions precedent |
9.3 | Condition Subsequent |
(a) | an original of each of the Pledges relating to each Earnings Account held in the name of each Borrower with the Account Bank; and |
(b) | such other documents equivalent to those referred to at paragraphs 3, 4, 5 and 6 of Schedule 3, Part A as the Agent may require |
10 | REPRESENTATIONS AND WARRANTIES |
10.1 | General |
10.2 | Status |
10.3 | Shares capital and ownership |
10.4 | Corporate power |
(a) | to register the Ship owned by it under an Approved Flag; |
(b) | to execute the Finance Documents to which that Borrower is a party; and |
(c) | to borrow under this Agreement and to enter into Designated Transactions under the Master Agreement and to make all the payments contemplated by, and to comply with, the Finance Documents to which the Borrowers is a party and the Master Agreement. |
10.5 | Consents in force |
10.6 | Legal validity; effective Security Interests |
(a) | constitute that Borrower's legal, valid and binding obligations enforceable against that Borrower in accordance with their respective terms; and |
(b) | create legal, valid and binding Security Interests enforceable in accordance with their respective terms over all the assets to which they, by their terms, relate, |
10.7 | No third party Security Interests |
(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 |
(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 |
10.10 | No default |
10.11 | Information |
10.12 | No litigation |
10.13 | Compliance with certain undertakings |
10.14 | Taxes paid |
10.15 | No money laundering |
10.16 | ISM Code, ISPS Code Compliance and Environmental Laws |
10.17 | No immunity |
10.18 | Sanctions |
(a) | No Relevant Party nor any of their subsidiaries, nor any of their respective directors, officers, employees (nor, to the knowledge of such Relevant Party, any of their affiliates, agents or representatives): |
(i) | is a Restricted Party; |
(ii) | is owned or controlled by or acting directly or indirectly on behalf of or for the benefit of, a Restricted Party, and none of such persons owns or controls a Restricted Party; |
(iii) | owns or controls a Restricted Party; or |
(iv) | has received notice of or is aware of or is subject to any claim, proceedings, formal notice or investigation with respect to Sanctions. |
(b) | No proceeds of the Loan or any part thereof shall be made available, directly or indirectly, to any subsidiary, joint venture partner or other person to fund any trade, business or other activities involving or for the benefit of a Restricted Party or in any country or territory, that, at the time of such funding, is a Sanctioned Country nor shall they be otherwise directly or indirectly, applied in a manner that would result in a violation of Sanctions by a Creditor Party or any Security Party or for any purpose prohibited by Sanctions. |
(c) | No Relevant Party nor any of their subsidiaries, nor any of their respective directors, officers, employees (nor, to the knowledge of such Relevant Party, any of their affiliates, agents or representatives) has taken any action resulting in a violation by such persons of Sanctions or which constitutes or would constitute any such violation by the Borrower, a Creditor Party or any Security Party. |
11 | GENERAL UNDERTAKINGS |
11.1 | General |
11.2 | Title; negative pledge |
(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 |
(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, each Borrower's rights, against the Swap Bank under the Master Agreement or all or any part of each Borrower's interest in any amount payable to the Borrower by the Swap Bank under the Master Agreement; and |
(c) | procure that its liabilities under the Finance Documents to which it is party do and will rank at least pari passu with all other present and future unsecured liabilities, except for liabilities which are mandatorily preferred by law. |
11.3 | No disposal of assets |
(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 |
(a) | liabilities and obligations under the Finance Documents to which it is a party; |
(b) | liabilities or obligations reasonably incurred in the ordinary course of owning, operating and chartering the Ship owned by it; and |
(c) | Financial Indebtedness to the Corporate Guarantor or any other member of the Group or any of their affiliates (the "Relevant Entity") Provided that such Financial Indebtedness shall be fully subordinated to the Loan and the Swap Exposure and each Borrower shall, promptly following the Agent's demand, execute or procure the execution of any documents which the Agent specifies to create or maintain the subordination of the rights of the Relevant Entity against that Borrower to those of the Creditor Parties under the Finance Documents on terms in all respects acceptable to the Agent (acting with the authorisation of the Lenders). |
11.5 | Information provided to be accurate |
11.6 | Provision of financial statements |
(a) | as soon as possible, but in no event later than 180 days after the end of each financial year of the Corporate Guarantor (commencing with the financial year ending on 31 December 2014), the audited consolidated financial statements of the Corporate Guarantor; |
(b) | as soon as possible, but in no event later than 90 days after the end of each financial half-year in each financial year of the Corporate Guarantor ending on 30 June, the semi-annual unaudited consolidated financial statements of the Corporate Guarantor in the form in which they were published in the relevant press release; and |
(c) | promptly after each request by the Agent, such further financial information about the Borrowers, the Ships, the Fleet Vessels, any Security Party or the Group or any member thereof (including but not limited to, information regarding charter arrangements, Financial Indebtedness and operating expenses) as the Agent may require. |
11.7 | Form of financial statements |
(a) | be prepared in accordance with all applicable laws and GAAP consistently applied; and |
(b) | give a true and fair view of the state of affairs of the Group at the date of those accounts and of their profit for the period to which those accounts relate. |
11.8 | Shareholder and creditor notices |
11.9 | Consents |
(a) | for that Borrower to perform its obligations under any Finance Document to which it is a party; |
(b) | for the validity or enforceability of any Finance Document to which it is a party; |
(c) |
for that Borrower to continue to own and operate the Ship owned by it,
and that Borrower will comply with the terms of all such consents.
|
11.10 | 11.10 Maintenance of Security Interests |
(a) | at its own cost, do all that it reasonably can to ensure that any Finance Document validly creates the obligations and the Security Interests which it purports to create; and |
(b) | without limiting the generality of paragraph (a) above, at its own cost, promptly register, file, record or enrol any Finance Document with any court or authority, pay any stamp, registration or similar tax 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 |
11.12 | Principal place of business |
11.13 | Confirmation of no default |
(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. |
11.14 | Notification of default |
(a) | the occurrence of an Event of Default or a Potential Event of Default; or |
(b) | any matter which indicates that an Event of Default or a Potential Event of Default may have occurred, |
11.15 | Provision of further information |
(a) | to either Borrower, either Ship, the Earnings, the Insurances, any Charterparty, the Approved Manager, any Fleet Vessel, the Corporate Guarantor and any other member of the Group; or |
(b) | to any other matter relevant to, or to any provision of, a Finance Document,(including, without limitation, any information requested in connection with the Creditor Parties' "Know your customer" regulations, including but not limited to information required pursuant to all applicable laws and regulations, including, without limitation, the laws of the European Union, Switzerland and the United States of America in connection with each Borrower, the Corporate Guarantor and any other Security Party and their respective beneficial owners), |
11.16 | Provision of copies and translation of documents |
11.17 | "Know your customer" checks |
(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, |
11.18 | Designated Transactions |
11.19 | Borrower's Minimum liquidity |
11.20 | Sanctions |
(a) | The Borrowers and the Corporate Guarantor shall not, and shall procure that no other Security Party will, directly or indirectly use, lend, make payments of, contribute or otherwise make available, all or any part of the proceeds of the Loan or other transaction(s) contemplated by this Agreement to fund any trade, business or other activities (i) involving or for the benefit of any Restricted Party or in any country or territory, that, at the time of such funding, is a Sanctioned Country or (ii) in any other manner that would reasonably be expected to result in the Borrower, any Security Party or any Creditor Party being in breach of any Sanctions (if and to the extent applicable to either of them) or becoming a Restricted Party; |
(b) | The Borrowers and the Corporate Guarantor shall not permit or authorise and shall prevent (and shall procure that the other Security Parties will not permit or authorise and will prevent) the Ship being used directly or indirectly (i) by or for the benefit of any Restricted Party or in any country or territory that is a Sanctioned Country and/or (ii) in any trade which will expose the Ship, any Creditor Party, the Approved Manager, crew or insurers to enforcement proceedings or any other consequences whatsoever arising from Sanctions; and |
(c) | The Borrowers and the Corporate Guarantor shall, and shall procure that any other Security Parties shall, ensure that neither its assets nor the assets subject to the Finance Documents shall be used directly or indirectly by or for the benefit of any Restricted Party or otherwise used in any manner which may breach any applicable Sanctions. |
12 | CORPORATE UNDERTAKINGS |
12.1 | General |
12.2 | Maintenance of status |
12.3 | Negative undertakings |
(a) | carry on any business other than the ownership, chartering and operation of the Ship owned by it; or |
(b) | pay any dividend or make any other form of distribution or effect any form of redemption, purchase or return of its shares (the " Distribution " ) if an Event of Default has occurred and is continuing at such time or would occur as a result of payment of such Distribution; or |
(c) | provide any form of credit or financial assistance to: |
(i) | a person who is directly or indirectly interested in that Borrower's share or loan capital; or |
(ii) | any company in or with which such a person is directly or indirectly interested or connected, |
(d) | open or maintain any account with any bank or financial institution except accounts with the Agent and the Security Trustee for the purposes of the Finance Documents; or |
(e) | issue, allot or grant any person a right to any of its shares or repurchase or reduce its issued shares; or |
(f) | acquire any shares or other securities other than US or UK Treasury bills and certificates of deposit issued by major North American or European banks, or enter into any transaction in a derivative (other than the Designated Transactions under the Master Agreement); or |
(g) | enter into any form of amalgamation, merger or de-merger or any form of reconstruction or reorganisation. |
13 | INSURANCE |
13.1 | General |
13.2 | Maintenance of obligatory insurances |
(a) | fire and usual marine risks (including hull and machinery and excess risks); |
(b) | war risks; |
(c) | protection and indemnity risks in excess of the limit of cover for oil pollution liability risks included within the protection and indemnity risks; and |
(d) | any other risks against which the Lenders consider, having regard to practices and other circumstances prevailing at the relevant time, it would in the opinion of the Lenders 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 |
(a) | in Dollars; |
(b) | in the case of fire and usual marine risks and war risks, in such amounts, on an agreed value basis, as shall from time to time be approved by the Agent but in any event in an amount not less than the greater of (i) the Market Value of the Ship and (ii) 120 per cent. of the aggregate of the Loan and the Swap Exposure; |
(c) | in the case of oil pollution liability risks, for an aggregate amount equal to the highest level of cover from time to time available under basic protection and indemnity club entry with the international group of protection and indemnity clubs) and in the international marine insurance market (currently $1,000,000,000); |
(d) | in relation to protection and indemnity risks in respect of the relevant Ship's full value and full tonnage; |
(e) | on such terms as shall from time to time be approved in writing by the Agent (including, without limitation, a blocking and trapping clause); and |
(f) | through approved brokers and with approved insurance companies and/or underwriters or, in the case of war risks and protection and indemnity risks, in approved war risks and protection and indemnity risks associations which are members of the International Group of Protection and Indemnity Associations. |
13.4 | Further protections for the Creditor Parties |
(a) | except in relation to risks referred to in Clause 13.2(c) and protection and indemnity risks), if the Security Trustee so requires, name (or be amended to name) the Security Trustee as mortgagee 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 sole 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 the insurers shall waive, to the fullest extent permitted by English law, their entitlement (if any) (whether by statute, common law, equity, or otherwise) to be subrogated to the rights and remedies of the Security Trustee in respect of any rights or interests (secured or not) held by or available to the Security Trustee in respect of the Secured Liabilities, until the Secured Liabilities shall have been fully repaid and discharged, except that the insurers shall not be restricted by the terms of this paragraph (d) from making personal claims against persons (other than the Borrowers or any Creditor Party) in circumstances where the insurers have fully discharged their liabilities and obligations under the relevant obligatory insurances; |
(e) | provide that the 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; |
(f) | provide that the Security Trustee may make proof of loss if that Borrower fails to do so; and |
(g) | provide that if any obligatory insurance is cancelled, or if any substantial change is made in the coverage which adversely affects the interest of the Security Trustee, or if any obligatory insurance is allowed to lapse for non-payment of premium, such cancellation, charge or lapse shall not be effective with respect to the Security Trustee for 30 days (or 7 days in the case of war risks) after receipt by the Security Trustee of prior written notice from the insurers of such cancellation, change or lapse. |
13.5 | Renewal of obligatory insurances |
(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 Lenders' 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 Lenders' 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 |
(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 |
(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 Lenders; and |
(c) | where required to be issued under the terms of insurance/indemnity provided by the relevant Borrower's protection and indemnity association, a certified copy of each United States of America voyage quarterly declaration (or other similar document or documents) made by that Borrower in relation to the Ship owned by it in accordance with the requirements of such protection and indemnity association; and |
(d) | 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 |
13.9 | Payment of premiums |
13.10 | Guarantees |
13.11 | Compliance with terms of insurances |
(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 (including but not limited to any applicable laws and Sanctions), 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 |
13.13 | Settlement of claims |
13.14 | Provision of copies of communications |
(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 |
(a) | obtaining or preparing any report from an independent marine insurance broker appointed by the Agent as to the adequacy of the obligatory insurances effected or proposed to be effected; and/or |
(b) | effecting, maintaining or renewing any such insurances as are referred to in Clause 13.16 or dealing with or considering any matters relating to any such insurances, |
13.16 | Restrictions on employment |
13.17 | Mortgagee's interest and additional perils insurances |
(a) | a mortgagee's interest marine insurance in an amount equal to 120 per cent. of the aggregate of the Loan and the Swap Exposure, providing for the indemnification of the Security Trustee for any losses under or in connection with any Finance Document which directly or indirectly result from loss of or damage to a Ship or a liability of that Ship or of the Borrower owing that Ship, being a loss or damage which is prima facie covered by an obligatory insurance but in respect of which there is a non-payment (or reduced payment) by the underwriters by reason of, or on the basis of an allegation concerning: |
(i) | any act or omission on the part of the Borrower owning that Ship, of any operator, charterer, manager or sub-manager of that Ship or of any officer, employee or agent of that Borrower or of any such person, including any breach of warranty or condition or any non-disclosure relating to such obligatory insurance; |
(ii) | any act or omission, whether deliberate, negligent or accidental, or any knowledge or privity of the Borrower owning that Ship, any other person referred to in paragraph (i) above, or of any officer, employee or agent of that Borrower or of such |
(iii) | any other matter capable of being insured against under a mortgagee's interest marine insurance policy whether or not similar to the foregoing; |
(b) | a mortgagee's interest additional perils policy in an amount equal to 120 per cent. of the aggregate of the Loan and the Swap Exposure, providing for the indemnification of the Security Trustee against, among other things, any possible losses or other consequences of any Environmental Claim, including the risk of expropriation, arrest or any form of detention of a Ship, the imposition of any Security Interest over the Ship and/or any other matter capable of being insured against under a mortgagee's interest additional perils policy whether or not similar to the foregoing, |
13.18 | Review of insurance requirements |
13.19 | Modification of insurance requirements |
13.20 | Compliance with mortgagee's instructions |
14 | SHIP COVENANTS |
14.1 | General |
14.2 | Ship's name and registration |
14.3 | Repair and classification |
(a) | consistent with first-class ship ownership and management practice; |
(b) | so as to maintain the highest class with a first-class classification society which is a member of IACS acceptable to the Agent (acting with the authorisation of the Lenders) free of overdue recommendations and conditions of such classification society; and |
(c) | so as to comply with all laws and regulations applicable to vessels registered at ports in the Approved Flag State or to vessels trading to any jurisdiction to which that Ship may trade from time to time, including but not limited to the ISM Code and the ISPS Code, |
14.4 | Classification society undertaking |
(a) | to send to the Security Trustee, following receipt of a written request from the Security Trustee, certified true copies of all original class records held by the classification society in relation to that Ship; |
(b) | to allow the Security Trustee (or its agents), at any time and from time to time, to inspect the original class and related records of that Borrower and that Ship either (i) in person at the offices of the classification society or (ii) electronically (through the classification society directly) and to take copies of such records |
(c) | to notify the Security Trustee immediately in writing if the classification society: |
(i) | receives notification from that Borrower or any person that that 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 that Ship's class under the rules or terms and conditions of that Borrower's or that Ship's membership of the classification society; and |
(d) | following receipt of a written request from the Security Trustee: |
(i) | to confirm that that Borrower 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 that Borrower is in default of any of its contractual obligations or liabilities to the classification society, to specify to the Security Trustee in reasonable detail the facts and circumstances of such default, the consequences of such default, and any remedy period agreed or allowed by the classification society. |
14.5 | Modification |
14.6 | Removal of parts |
14.7 | Surveys |
14.8 | Inspection |
14.9 | Prevention of and release from arrest |
(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, |
14.10 | Compliance with laws etc. |
(a) | comply, or procure compliance with the ISM Code (including, without limitation, by the Approved Manager), the ISPS Code, all Environmental Laws, Sanctions 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 Lenders has been given and that Borrower has (at its expense) effected any special, additional or modified insurance cover which the Lenders may require. |
14.11 | Provision of information |
(a) | the Ship owned by it, its employment, position and engagements; |
(b) | the Earnings and payments and amounts due to the master and crew of the Ship owned by it; |
(c) | any expenses incurred, or likely to be incurred, in connection with the operation, maintenance or repair of the Ship owned by it and any payments made in respect of that Ship; |
(d) | any towages and salvages; and |
(e) | its compliance, the Approved Manager's compliance and the compliance of the Ship owned by it with the ISM Code and the ISPS Code, |
14.12 | Notification of certain events |
(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, the 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, |
14.13 | Restrictions on chartering, appointment of managers etc. |
(a) | let that Ship on demise charter for any period; |
(b) | enter into any time or consecutive voyage charter in respect of that Ship for a term which exceeds, or which by virtue of any optional extensions may exceed, 13 months; |
(c) | enter into any charter in relation to that Ship under which more than 2 months' hire (or the equivalent) is payable in advance; |
(d) | charter that Ship otherwise than on bona fide arm's length terms at the time when that Ship is fixed; |
(e) | appoint a manager of that Ship other than the Approved Manager or agree to any alteration to the terms of the Approved Manager's appointment; |
(f) | de-activate or lay up that Ship; or |
(g) | put that Ship into the possession of any person for the purpose of work being done upon it in an amount exceeding or likely to exceed $1,000,000 (or the equivalent in any other currency) unless that person has first given to the Security Trustee and in terms satisfactory to it a written undertaking not to exercise any lien on that Ship or its Earnings for the cost of such work or for any other reason. |
14.14 | Notice of Mortgage |
14.15 | Sharing of Earnings |
(a) | enter into any agreement or arrangement for the sharing of any Earnings; |
(b) | enter into any agreement or arrangement for the postponement of any date on which any Earnings are due; the reduction of the amount of any Earnings or otherwise for the release or adverse alteration of any right of the Borrowers to any Earnings; or |
(c) | enter into any agreement or arrangement for the release of, or adverse alteration to, any guarantee or Security Interest relating to any Earnings. |
14.16 | Charter Assignment |
14.17 | ISM Code, ISPS Code compliance and Environmental Laws |
(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. |
14.18 | ITF compliance. |
14.19 | Sanctions Provisions |
(a) | Each Borrowers shall, and shall procure that each other Security Party and each Ship shall, and, in respect of any charterer, shall use its best efforts to procure that that charterer shall, comply in all respects with all laws to which it may be subject, including, without limitation, all national and international laws, directives, regulations, decrees, rulings and such analogous rules, including, but not limited to, rules relating to Sanctions. |
(b) | Each Borrower undertakes to make any charterers and operators of the Ships aware of the requirements of this Clause and of Clause 10.18 and that provisions relating to Sanctions similar to those set out under this Agreement are included in any Charterparty or any other charter and shall procure that any charterer acts in accordance with these requirements. |
15 | SECURITY COVER |
15.1 | Minimum required security cover |
(a) | the aggregate of the Market Values of the Ships; plus |
(b) |
the net realisable value of any additional security previously provided under this Clause 15,
is below 120 per cent. of the aggregate of the Loan and the Swap Exposure.
|
15.2 | Provision of additional security; prepayment |
15.3 | Requirement for additional documents. |
15.4 | Valuation of Ships |
(a) | as at a date not more than 14 days previously; |
(b) | by an Approved Broker appointed by the Agent; |
(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. |
15.5 | Value of additional vessel security |
15.6 | Valuations binding |
15.7 | Provision of information |
15.8 | Payment of valuation expenses |
15.9 | Frequency of valuations |
15.10 | Application of prepayment |
16 | PAYMENTS AND CALCULATIONS |
16.1 | Currency and method of payments |
(a) | by the Lenders to the Agent; or |
(b) | by the Borrowers to the Agent, the Security Trustee or any Lender, |
(i) | by not later than 11.00 a.m. (New York City time) on the due date; |
(ii) | to the account of the Agent as the Agent may from time to time notify to the Borrowers and the other Creditor Parties; and |
(iii) | 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 |
(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 |
16.4 | Distribution of payments to Creditor Parties |
(a) | any amount received by the Agent under a Finance Document for distribution or remittance to a Lender, the Swap Bank or the Security Trustee shall be made available by the Agent to that Lender, the Swap Bank 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 |
(b) | amounts to be applied in satisfying amounts of a particular category which are due to the Lenders or the Swap Bank generally shall be distributed by the Agent to each Lender or the Swap Bank pro rata to the amount in that category which is due to it. |
16.5 | Permitted deductions by Agent |
16.6 | Agent only obliged to pay when monies received |
16.7 | Refund to Agent of monies not received |
(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 |
16.9 | Creditor Party accounts |
16.10 | Agent's memorandum account |
16.11 | Accounts prima facie evidence |
17 | APPLICATION OF RECEIPTS |
17.1 | Normal order of application |
(a) | FIRST: in or towards satisfaction of any amounts then due and payable under the Finance Documents or the Master Agreement in the following proportions: |
(i) | first, in or towards satisfaction pro rata of all amounts then due and payable to the Creditor Parties under the Finance Documents and the Master Agreement (in respect of any Designated Transactions) other than those amounts referred to at (ii) and (iii) below (including, but without limitation, all amounts payable by the Borrowers under Clauses 20, 21 and 22 of this Agreement or by the Borrowers or any Security Party under any corresponding or similar provision in any other Finance Document or in the 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 and the Master Agreement (in respect of any Designated Transactions) (and, for this purpose, the expression "interest" shall include any net amount which the Borrowers shall have become liable to pay or deliver under section 2(e) (Obligations) of the Master Agreement (in respect of any Designated Transactions) but shall have failed to pay or deliver to the Swap Bank at the time of application or distribution under this Clause 17); and |
(iii) | thirdly, in or towards satisfaction pro rata of the Loan and the Swap Exposure (in the case of the latter, calculated as at the actual Early Termination Date applying to each particular Designated Transaction, or if no such Early Termination Date shall have occurred, calculated as if an Early Termination Date occurred on the date of application or distribution hereunder); |
(b) | SECONDLY: in retention of an amount equal to any amount not then due and payable under any Finance Document or the Master Agreement (in respect of any Designated Transactions) 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 foregoing provisions of this Clause 17.1(a); |
(c) | THIRDLY: in or towards satisfaction of any amounts representing management fees then due and payable by the Borrowers to the Approved Manager in connection with the Ship; and |
(d) | FOURTHLY: 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 |
17.3 | Notice of variation of order of application |
17.4 | Appropriation rights overridden |
18 | APPLICATION OF EARNINGS |
18.1 | Payment of Earnings |
(a) | (subject only to the provisions of the General Assignment), all the Earnings of each Ship are paid to the Earnings Account relevant for that Ship; and |
(b) | all payments by the Swap Bank to the Borrowers under each Designated Transaction are paid to the Earnings Account. |
18.2 | Earnings Accounts balances |
(a) | in or towards satisfaction of the Repayment Instalment due on the relevant Repayment Date; and |
(b) | in or towards satisfaction of all amounts of interest due on the relevant interest payment date or default interest payable to the Creditor Parties at any relevant time under the Finance Documents. |
18.3 | Location of accounts |
(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. |
18.4 | Debits for expenses etc. |
18.5 | Borrowers' obligations unaffected |
(a) | the liability of the Borrowers to make payments of principal and interest on the due dates; or |
(b) | any other liability or obligation of the Borrowers or any Security Party under any Finance Document. |
19 | EVENTS OF DEFAULT |
19.1 | Events of Default |
(a) | either of the Borrowers 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, 10.18, 11.2, 11.3, 11.19, 11.20, 12.2, 12.3, 13.2, 13.3, 14.2, 14.3, 14.11 or 15.2; or |
(c) | any breach by either 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 the earlier of (i) written notice from the Agent requesting action to remedy the same and (ii) the Borrowers becoming aware of such breach; or |
(d) | (subject to any applicable grace period specified in the Finance Document) any breach by either 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 Financial Indebtedness of a Relevant Person (exceeding $500,000 (or the equivalent in any other currency) in the case of each Borrower and in no event exceeding $5,000,000 (or the equivalent in any other currency) in respect of all Relevant Persons in aggregate at any relevant time): |
(i) | any Financial Indebtedness of a Relevant Person is not paid when due or, if so payable, on demand; or |
(ii) | any Financial Indebtedness of a Relevant Person becomes due and payable or capable of being declared due and payable prior to its stated maturity date as a consequence of any event of default; or |
(iii) | a lease, hire purchase agreement or charter creating any Financial Indebtedness of a Relevant Person is terminated by the lessor or owner or becomes capable of being terminated as a consequence of any termination event; or |
(iv) | any overdraft, loan, note issuance, acceptance credit, letter of credit, guarantee, foreign exchange or other facility, or any swap or other derivative contract or transaction, relating to any Financial Indebtedness of a Relevant Person ceases to be available or becomes capable of being terminated as a result of any event of default, 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, exceeding in aggregate $500,000 (or the equivalent in any other currency) in the case of each Borrower and in no event exceeding $5,000,000 (or the equivalent in any other currency) in respect of all Relevant Persons in aggregate at any relevant time; 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 of a Pertinent Jurisdiction for or with a view to the winding up of that or another Relevant Person or the appointment of a provisional liquidator or administrator in respect of that or another Relevant Person, or that or another Relevant Person ceasing or suspending business operations or payments to creditors, save that this paragraph does not apply to a fully solvent winding up of a Relevant Person other than the Borrowers or the Corporate 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 |
(ix) | a Relevant Person or its directors take any steps (whether by making or presenting an application or petition to a court, or submitting or presenting a document setting out a proposal or proposed terms, or otherwise) with a view to obtaining, in relation to that or another Relevant Person, any form of moratorium, suspension or deferral of payments, reorganisation of debt (or certain debt) or arrangement with all or a substantial proportion (by number or value) of creditors or of any class of them or any such moratorium, suspension or deferral of payments, reorganisation or arrangement is effected by court order, by the filing of documents with a court, by means of a contract or in any other way at all; or |
(x) | any meeting of the members or directors, or of any committee of the board or senior management, of a Relevant Person is held or summoned for the purpose of considering a resolution or proposal to authorise or take any action of a type described in paragraphs (iv) to (ix) or a step preparatory to such action, or (with or without such a meeting) the members, directors or such a committee resolve or agree that such an action or step should be taken or should be taken if certain conditions materialise or fail to materialise; or |
(xi) | in a country other than England, any event occurs, any proceedings are opened or commenced or any step is taken which, in the opinion of the Majority Lenders is similar to any of the foregoing; or |
(h) | either of the Borrowers 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 either 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 Bank 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 either Borrower to own, operate or charter the Ship owned by it or to enable either Borrower or any Security Party to comply with any provision which the Majority Lenders consider material of a Finance 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 written consent, a Change of Control has occurred or probably has occurred after the date of this Agreement; 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 Security Interest created by a Finance Document proves to have been or becomes invalid or unenforceable or such a Security Interest proves to have ranked after, or loses its priority to, another Security Interest or any other third party claim or interest; or |
(m) | Mr. Simeon Palios ceases to own (either directly or indirectly) at least 5 per cent. of the share capital of the Corporate Guarantor; or |
(n) | without the prior written consent of the Agent (acting with the authorisation of all Lenders) the shares of the Corporate Guarantor cease to be listed on the New York Stock Exchange; |
(o) | the security constituted by a Finance Document is in any way imperilled or in jeopardy; or |
(p) | an Event of Default (as defined in Section 14 of the Master Agreement) occurs; or |
(q) | the Master Agreement is terminated, cancelled, suspended, rescinded or revoked or otherwise ceases to remain in full force and effect for any reason except with the consent of the Agent, acting with the authorisation of the Lenders; or |
(r) | any other event occurs or any other circumstances arise or develop including, without limitation: |
(i) | a change in the business, condition (financial or otherwise), operation, state of affairs or prospects of any Relevant Person; or |
(ii) | any accident or other event involving any Ship or another vessel owned, chartered or operated by a Relevant Person, |
(s) | the Borrower or any of the Security Parties or any of its or their subsidiaries becomes a Restricted Party or becomes owned or controlled by, or acts directly or indirectly on behalf of, a Restricted Party or any of such persons becomes the owner or controller of a Restricted Party; or |
(t) | any proceeds of the Loan are made available, directly or indirectly, to fund any trade, business or other activities involving or for the benefit of a Restricted Party or in any country or territory, that, at the time of such funding, is a Sanctioned Country or otherwise is, directly or indirectly, applied in a manner that would result in a violation of Sanctions by a Creditor Party, the Borrower or any Security Party or for any purpose prohibited by Sanctions; or |
(u) | any of the Security Parties or any of its or their subsidiaries takes any action resulting in a violation by such persons of Sanctions or which constitutes or would constitute any such violation by a Creditor Party, the Borrower or any Security Party. |
19.2 | Actions following 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 all or part of the Commitments and of the other obligations of each Lender to the Borrowers under this Agreement are terminated; and/or |
(ii) | serve on the Borrowers a notice stating that all or part of the Loan together with 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) above, the Agent and/or the Lenders are entitled to take under any Finance Document or any applicable law; and/or |
(d) | the Security Trustee may, and if so instructed by the Agent, acting with the authorisation of the Majority Lenders in consultation with the Swap Bank, 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 (a)(ii), the Security Trustee, the Agent and/or the Lenders and/or the Swap Bank are entitled to take under any Finance Document or any applicable law. |
19.3 | Termination of Commitments |
19.4 | Acceleration of Loan |
19.5 | Multiple notices; action without notice |
19.6 | Notification of Creditor Parties and Security Parties |
19.7 | Creditor Party's rights unimpaired |
19.8 | Exclusion of Creditor Party liability |
(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 |
19.10 | Interpretation |
19.11 | Position of Swap Bank |
20 | FEES AND EXPENSES |
20.1 | Structuring fee |
20.2 | Costs of negotiation, preparation etc. |
20.3 | Costs of variations, amendments, enforcement etc. |
(a) | any amendment or supplement to a Finance Document requested by a Security Party, or any proposal for such an amendment to be made; |
(b) | any consent or waiver by the Lenders, the Majority Lenders, the Swap Bank 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; |
(d) | where the Agent, in its absolute opinion, considers that there has been a material change to the insurances in respect of either of the Ships, the review of the insurances of that Ship pursuant to Clause 13.18; |
(e) | the opinions of the independent insurance consultant referred to in paragraph 6 of Part B, Schedule 3; and |
(f) | any step taken by the Creditor Party concerned with a view to the protection, exercise or enforcement of any right or Security Interest created by a Finance Document or for any similar purpose. |
20.4 | Documentary taxes |
20.5 | Certification of amounts |
21 | INDEMNITIES |
21.1 | Indemnities regarding borrowing and repayment of Loan |
(a) | an Advance not being borrowed on the date specified in the Drawdown Notice for any reason other than a default by the Lender or the Swap Bank 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 including, without limitation, where such receipt or recovery is made as a result of the voluntary or mandatory repayment or prepayment of the Loan, or any part thereof; |
(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 |
(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 |
(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 |
(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; and |
(b) | any other event, matter or question which occurs or arises at any time during the Security Period and which has any connection with, or any bearing on, any Finance Document, any payment or other transaction relating to a Finance Document or any asset covered (or previously covered) by a Security Interest created (or intended to be created) by a Finance Document, |
21.4 | Extension of indemnities; environmental indemnity |
(a) | any matter which would be covered by Clause 21.3 if any of the references in that Clause to a Lender were a reference to the Agent or (as the case may be) to the Security Trustee; and |
(b) | any liability items which arise, or are asserted, under or in connection with any law relating to safety at sea, pollution or the protection of the environment, the ISM Code, the ISPS Code or any Environmental Law. |
21.5 | Currency indemnity |
(a) | making or lodging any claim or proof against of the Borrowers 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, |
21.6 | Certification of amounts |
21.7 | Application of Master Agreement |
21.8 | Sums deemed due to a Lender |
21.9 | Sanctions |
(a) | Each Security Party shall, within three (3) Business Days of demand by a Creditor Party, indemnify each Creditor Party against any cost, loss or liability incurred by it as a result of any civil penalty or fine against, and all reasonable costs and expenses (including reasonable counsel fees and disbursements) incurred in connection with the defence thereof by, the Agent or any Lender as a direct result of conduct of any Security Party or any of their partners, directors, officers, employees, agents or advisors, that violates any Sanctions. |
(b) | The indemnity in Clause 21.9 above shall cover any losses incurred by each Creditor Party in any jurisdiction arising or asserted under or in connection with any law relating to any Sanctions. |
22 | NO SET-OFF OR TAX DEDUCTION |
22.1 | No deductions |
(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 |
(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 |
22.4 | Exclusion of tax on overall net income |
22.5 | Application of Master Agreement |
22.6 | FATCA information |
(a) | Subject to paragraph (c) below, each party to the Finance Documents shall, within 10 Business Days of a reasonable request by another party to the Finance Documents: |
(i) | confirm to that other party whether it is: |
(A) | a FATCA Exempt Party; or |
(B) | not a FATCA Exempt Party; and |
(ii) | supply to that other party such forms, documentation and other information relating to its status under FATCA as that other party reasonably requests for the purposes of that other party's compliance with FATCA; and |
(iii) | supply to that other party such forms, documentation and other information relating to its status as that other party reasonably requests for the purposes of that other party's compliance with any other law, regulation or exchange of information regime; |
(b) | if a party to any Finance Document confirms to another party pursuant to sub-paragraph (i) of paragraph (a) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not, or has ceased to be a FATCA Exempt Party, that party shall notify that other party reasonably promptly; |
(c) | paragraph (a) above shall not oblige any Creditor Party, and paragraph (a)(iii) above shall not oblige any other Party to a Finance Document, to do anything which would or might in its reasonable opinion constitute a breach of: |
(i) | any law or regulation; |
(ii) | any fiduciary duty; or |
(iii) | any duty of confidentiality; |
(d) | if a party to any Finance Document fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with paragraph (a)(i) or (ii) above (including, for the avoidance of doubt, where paragraph (c) above applies), then such party shall be treated for the purposes of the Finance Documents as if it is not a FATCA Exempt Party until such time as the party in question provides the requested confirmation, forms, documentation or other information. |
(e) | If a Borrower or a Security Party becomes a US Tax Obligor or a FATCA FFI, it shall as soon as reasonably practicable (i) inform the Agent of the same and (ii) provide the Agent with a W-8 BEN-E form (or any successor form) or any other forms or documentation the Agent may reasonably require; |
(f) | Where the Agent reasonably believes that its obligations under FATCA require it, the relevant Borrower or the relevant Security Party shall provide the Agent, upon request, with a W-8 BEN-E form (or any successor form) or any other forms or documentation the Agent may reasonably require, as soon as reasonably practicable. The Agent shall not be liable for any action which it takes or refrains from taking under or in connection with this paragraph (f); |
(g) | If a Borrower or a Security Party becomes a US Tax Obligor or a FATCA FFI, or where the Agent reasonably believes that its obligations under FATCA require it, each Creditor Party shall, within 10 Business Days of the date of a request from the Agent supply to the Agent: |
(i) | a withholding certificate on Form W-8 or Form W-9 (or any successor form) (as applicable); and/or |
(ii) | any withholding statement and other documentation, authorisations and waivers as the Agent may require to certify or establish the status of such Creditor Party under FATCA, |
(h) | Each Borrower, each Security Party and each Creditor Party agrees that if any withholding certificate, withholding statement, documentation, authorisations and waivers provided to the Agent pursuant to paragraphs (e) to (g) above is or becomes materially inaccurate or incomplete, it shall promptly update such withholding certificate, withholding statement, documentation, authorisations and waivers or promptly notify the Agent in writing of its legal inability to do so. The Agent shall provide any such updated withholding certificate, withholding statement, documentation, authorisations and waivers to the relevant Borrower or the relevant Security Party or Creditor Party. The Agent shall not be liable for any action which it takes or refrains from taking under or in connection with this paragraph (h). |
22.7 | FATCA Deduction |
(a) | Each party to a Finance Document may make any FATCA Deduction it is required to make by FATCA, and any payment required in connection with that FATCA Deduction, and shall not be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction. |
(b) | Each party to a Finance Document shall promptly, upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate or the basis of such FATCA Deduction), notify the party to a Finance Document to whom it is making the payment and, in addition, shall notify the Borrowers and the Agent and the Agent shall notify the other Creditor Parties. |
23 | ILLEGALITY, ETC |
23.1 | 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, |
23.2 | Notification of illegality |
23.3 | Prepayment; termination of Commitment |
23.4 | Mitigation |
(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 |
(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, |
(c) | the effect of complying with the regulations set out in the "International Convergence of Capital Standards, a Revised Framework" published by the Basle Committee on Banking Supervision in June 2004 as implemented in the EU by the Capital Requirements Directive (2006/48/EC and 2006/49/EC) is that the Notifying Lender (or a parent company of it) has incurred or will incur an "increased cost" when compared to the cost of complying with such regulations as determined by the Notifying Lender (or a parent company of it) on the date of this Agreement and including any amendment taking account of incorporating any measure from the Basel III Framework or CRD IV, and CRD IV or any other law of regulation which implements Basel III and CRD IV. |
24.2 | Meaning of " increased cost " |
(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 |
24.4 | Payment of increased costs |
24.5 | Notice of prepayment |
24.6 | Prepayment; termination of Commitment |
(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 |
25 | SET-OFF |
25.1 | Application of credit balances |
(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 |
25.3 | Sums deemed due to a Lender |
25.4 | No Security Interest |
26 | TRANSFERS AND CHANGES IN LENDING OFFICES |
26.1 | Transfer by Borrowers |
(a) | transfer any of its rights or obligations under any Finance Document; or |
(b) | enter into any merger, de-merger or other reorganisation, 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. |
26.2 | Transfer by a Lender |
(a) | its rights in respect of all or part of its Contribution; or |
(b) | its obligations in respect of all or part of its Commitment; or |
(c) | a combination of (a) and (b), |
(i) | without the consent of the Borrowers: |
(A) | following the occurrence of an Event of Default which is continuing; and/or |
(B) | if such transfer is to another Lender or an affiliate of a Lender; |
(ii) | in all other circumstances with the consent of the Borrowers (such consent not to be unreasonably withheld or delayed) and the Borrowers will be deemed to have given its consent 5 Business Days following the request of the Transferor Lender unless the consent is expressly refused by the Borrowers within that time. |
26.3 | Transfer Certificate, delivery and notification |
(a) | sign the Transfer Certificate on behalf of itself, the Borrowers, the Security Parties, the Security Trustee and each of the other Lenders and the Swap Bank; |
(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 |
26.5 | No transfer without Transfer Certificate |
26.6 | Lender re-organisation; waiver of Transfer Certificate |
26.7 | Effect of Transfer Certificate |
(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 either of the Borrowers 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 either Borrower or any Security Party against the Transferor Lender had not existed; |
(f) | the Transferee Lender becomes entitled to all the rights under the Finance Documents which are applicable to the Lenders generally, including but not limited to those relating to the Majority Lenders and those under Clause 5.7 and Clause 20, and to the extent that the Transferee Lender becomes entitled to such rights, the Transferor Lender ceases to be entitled to them; and |
(g) | in respect of any breach of a warranty, undertaking, condition or other provision of a Finance Document or any misrepresentation made in or in connection with a Finance Document, the Transferee Lender shall be entitled to recover damages by reference to the loss incurred by it as a result of the breach or misrepresentation, irrespective of whether the original Lender would have incurred a loss of that kind or amount. |
26.8 | Maintenance of register of Lenders |
26.9 | Reliance on register of Lenders |
26.10 | Authorisation of Agent to sign Transfer Certificates |
26.11 | Registration fee |
26.12 | Sub-participation; subrogation assignment |
26.13 | Disclosure of information |
26.14 | Change of lending office |
(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 |
26.16 | Replacement of Reference Bank |
26.17 | Security over Lenders' rights |
(a) | any charge, assignment or other Security Interest to secure obligations to a federal reserve or central bank; and |
(b) | in the case of any Lender which is a fund, any charge, assignment or other Security Interest granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by that Lender as security for those obligations or securities; |
(i) | release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or Security Interest for the Lender as a party to any of the Finance Documents; or |
(ii) | require any payments to be made by either of the Borrowers or any Security Party or grant to any person any more extensive rights than those required to be made or granted to the relevant Lender under the Finance Documents. |
26.18 | If a Lender transfers any of its rights or obligations under the Finance Documents or changes its lending office and, as a result of circumstances existing at the date the transfer occurs, the Borrowers would be obliged to make a payment to the Transferee Lender or Lender acting through its new lending office under Clauses 22 or 24, then the Transferee Lender or Lender acting through its new lending office is only entitled to receive payments under those Clauses to the same extent as the Transferor Lender or Lender acting through its previous lending office would have been if the transfer had not occurred. |
27 | VARIATIONS AND WAIVERS |
27.1 | Variations, waivers etc. by Majority Lenders |
27.2 | Variations, waivers etc. requiring agreement of all Lenders |
(a) | a reduction in the Margin; |
(b) | a postponement to the date for, or a reduction in the amount of, any payment of principal, interest, fees or other sum payable under this Agreement; |
(c) | an increase in any Lender's Commitment; |
(d) | a change to the definition of " Majority Lenders " ; |
(e) | a change to Clause 3 or this Clause 27; |
(f) | any release of, or material variation to, a Security Interest, guarantee, indemnity or subordination arrangement set out in a Finance Document; and |
(g) | any other change or matter as regards which this Agreement or another Finance Document expressly provides that each Lender's consent is required. |
27.3 | Exclusion of other or implied variations |
(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, |
28. | NOTICES |
28.1 | General |
28.2 | Addresses for communications |
28.3 | Effective date of notices |
(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 |
(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 |
28.6 | Valid notices |
(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 |
(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 | Effectiveness of electronic communication |
28.9 | Use of websites |
(a) | The Agent may satisfy its obligation under this Agreement to deliver any information in relation to those Lenders (the "Website Lenders") who accept this method of communication by posting this information onto the electronic website www.debtdomain.com (or such other electronic website that the Agent may designate in consultation with the Borrower) (the "Designated Website") if: |
(i) | the Agent expressly agrees (after consultation with each of the Lenders) that it will accept communication of the information by this method; |
(ii) | the Agent and the Website Lenders are aware of the address of and any relevant password specifications for the Designated Website; and |
(iii) | the information is in a format previously agreed between the Agent and the Website Lenders. |
(b) | If any Lender (a "Paper Form Lender") does not agree to the delivery of information electronically then the Agent shall supply the information to the Paper Form Lender in paper form. |
(c) | The Agent shall supply each Website Lender with the address of and any relevant password specifications for the Designated Website following designation of that website. |
(d) | The Agent shall promptly upon becoming aware of its occurrence notify the Website Lenders if: |
(i) | the Designated Website cannot be accessed due to technical failure; |
(ii) | the password specifications for the Designated Website change; |
(iii) | any new information which is required to be provided under this Agreement is posted onto the Designated Website; |
(iv) | any existing information which has been provided under this Agreement and posted onto the Designated Website is amended; or |
(v) | the Designated Website or any information posted onto the Designated Website is or has been infected by any electronic virus or similar software. |
(e) | If the Agent notifies the Website Lenders that any of the events occurred under paragraphs (d)(i) or (d)(v) above has occurred, all information to be provided by the Agent under this Agreement after the date of that notice shall be supplied in paper form unless and until the Agent and each Website Lender is satisfied that the circumstances giving rise to the notification are no longer continuing. |
28.10 | English language |
28.11 | Meaning of "notice" |
28.12 | Application of Master Agreement |
29 | JOINT AND SEVERAL LIABILITY |
29.1 | General |
29.2 | No impairment of Borrower's obligations |
(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 |
29.4 | Subordination |
(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 |
30 | SUPPLEMENTAL |
30.1 | Rights cumulative, non-exclusive |
(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 |
30.3 | Counterparts |
30.4 | Third party rights |
30.5 | Waiver of Banking Secrecy |
(a) | necessary or desirable for the purposes of its internal cross-selling enabling the Borrowers and/or any other member of the Group to benefit from the Agent's or any other Authorised Person's business activities; and/or |
(b) | necessary or desirable to insure a risk related to the Borrower and/or any other member of the Group; and/or |
(c) | necessary or desirable to syndicate a risk related to the Borrower and/or any other member of the Group; and/or |
(d) | necessary or desirable to securitise a risk related to the Borrower and/or any other member of the Group; and/or |
(e) | necessary or desirable to open an account or to start a business relation with the Agent's or any other Authorised Person's parent company or any of its subsidiaries or branches. |
(i) | any authority or person against which, pursuant to any applicable law, administrative order or court ruling, banking secrecy may not be validly asserted by an Authorised Person; |
(ii) | the Agent's or any other Authorised Person's parent company, any of its subsidiaries, branches or representative offices; |
(iii) | any rating agency, auditor, insurance and reinsurance company, broker or professional adviser, to the extent such entity or person is bound by a statutory or contractual duty of confidentiality; |
(iv) | any financial institution and institutional or other investor who is or might be involved in securitisation schemes, hedging agreements, participations, credit derivatives or any other risk transfer or sharing arrangements, including, inter alia, a bank and/or other financial institution's participation in, or syndication in respect of, the Loan; |
(v) | any potential assignee or transferee or person who has entered into or is proposing to enter into contractual arrangements with the Authorised Person in relation to the Borrowers; and |
(vi) | any external computer services provider, for the purpose of maintenance or repair of the Agent's or any other Authorised Person's computer systems and date provided that such external computer services provider is bound by the confidentiality policy of BNP Paribas. |
30.6 | Reference Banks |
30.7 | Role of Reference Banks |
(a) | No Reference Bank is under any obligation to provide a quotation or any other information to the Agent but may do so at the Agent's request. |
(b) | No Reference Bank will be liable for any action taken by it under or in connection with any Finance Document, or for any quotation provided to the Agent. |
(c) | No Party (other than the relevant Reference Bank) may take any proceedings against any officer, employee or agent of any Reference Bank in respect of any claim it might have against that Reference Bank or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Finance Document, or to any quotation provided to the Agent, and any officer, employee or agent of each Reference Bank may rely on this clause subject to clause 29.3 and the provisions of the Third Parties Act. |
30.8 | Third party Reference Banks |
31 | LAW AND JURISDICTION |
31.1 | English law |
31.2 | Exclusive English jurisdiction |
31.3 | Choice of forum for the exclusive benefit of the Creditor Parties |
(a) | to commence proceedings in relation to any Dispute in the courts of any country other than England and which have or claim jurisdiction to that Dispute; and |
(b) | to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in England or without commencing proceedings in England. |
31.4 | Process agent |
31.5 | Creditor Party rights unaffected |
31.6 | Meaning of " proceedings " and " Dispute " |
Lender
|
Lending Office
|
Commitment
(US Dollars)
|
BNP PARIBAS
|
16 Boulevard des Italiens
75009 Paris
France
Fax: +33 (0) 1 42984355
e-mail:
tgmo.shipping@bnpparibas.com
|
$55,000,000
|
1 | We refer to the loan agreement (the " Loan Agreement " ) dated [ · ] 2014 and made between ourselves, as Borrowers, the Lenders referred to therein, the Swap Bank and BNP Paribas as Agent and as Security Trustee in connection with a facility of up to US$55,000,000. Terms defined in the Loan Agreement have their defined meanings when used in this Drawdown Notice. |
2 | We request to borrow Advance [A] [B] as follows: |
(a) | Amount: US$[ · ]; |
(b) | Drawdown Date: [ · ]; |
(c) | [Duration of the first Interest Period shall be [ · ] months;] and |
(d) | Payment instructions : account in our name and numbered [ · ] with [ · ] of [ · ]. |
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 structuring fee referred to in Clause 20.1 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 and subject to clause 9.3 in respect to the Pledges. |
2 | Copies of the certificate of incorporation and constitutional documents of each Borrower, the Corporate Guarantor or any other Security Party. |
3 | Copies of resolutions of the shareholders and directors of each Borrower, of the directors or the executive committee of the directors of the Corporate Guarantor, or the shareholders and directors of any other Security Party authorising the execution of each of the Finance Documents to which that Borrower, the Corporate Guarantor or any other 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. |
4 | The original of any power of attorney under which any Finance Document is executed on behalf of a Borrower, the Corporate Guarantor or any other Security Party. |
5 | Copies of all consents which either of the Borrowers or any Security Party requires to enter into, or make any payment under, any Finance Document. |
6 | The originals of any mandates or other documents required in connection with the opening or operation of each Earnings Account (including but not limited to two certified forms of identification in respect of each signatory of each Earnings Account and of two directors of each Borrower and the Corporate Guarantor) and all other information required by the Creditor Parties or any of them in relation to their "know your customer" regulations including, but not limited to, all applicable laws of the European Union, Switzerland and United States of America in connection with each Borrower, the Corporate Guarantor and any other Security Party (whether in connection with the opening of the Earnings Account or otherwise). |
7 | Documentary evidence that the agent for service of process named in Clause 31 has accepted its appointment. |
8 | Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of the Marshall Islands and such other relevant jurisdictions as the Agent may require. |
9 | 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, of the General Assignment and any Charterparty Assignment relating to the Relevant Ship (and of each document to be delivered by each of them). |
2 | Documentary evidence that: |
(a) | the Relevant Ship is definitively and permanently registered in the name of the Relevant Borrower under an Approved Flag; |
(b) | the Relevant Ship is in the absolute and unencumbered ownership of the Relevant Borrower save as contemplated by the Finance Documents; |
(c) | the Relevant Ship maintains the class [ · ] with [ · ] free of all overdue recommendations and conditions of such Classification Society; |
(d) | the Mortgage relating to the Relevant Ship has been duly registered against the Relevant Ship as a valid first preferred or, as the case may be, priority ship mortgage in accordance with the laws of the relevant Approved Flag State; and |
(e) | the Relevant Ship is insured in accordance with the provisions of this Agreement and all requirements therein in respect of insurances have been complied with, including agreed form letters of undertaking of the insurance brokers and club managers, certificates of entry and/or cover notes with respect to the Relevant Ship. |
3 | Documents establishing that the Relevant Ship will, as from the first Drawdown Date, be managed by the Approved Manager on terms acceptable to the Lenders, together with: |
(a) | the Approved Manager's Undertakings in respect of the Relevant Ship; |
(b) | copies of the Approved Manager's documents of compliance (DOC) and the safety management certificate (SMC) (as defined in the ISM Code) in respect of the Relevant Ship certified as true and in effect by the Relevant Borrower and the Approved Manager; and |
(c) | a copy of the International Ship Security Certificate in respect of the Relevant Ship certified as true and in effect by the Relevant Borrower and the Approved Manager. |
4 | A valuation of the Relevant Ship (at the expense of the Borrowers) addressed to the Agent, stated to be for the purposes of this Agreement and prepared by an Approved Broker no earlier than 15 days prior to the Drawdown Date of the Advance financing the Relevant Ship and prepared in accordance with Clause 15 which shows the value of the Relevant Ship in an amount acceptable to the Agent. |
5 | Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the law of the Approved Flag State, Switzerland 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 the Relevant Ship as the Agent may require (all fees and expenses incurred in relation to the appointment of the marine insurance broker |
7 | 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 | This Certificate relates to a Loan Agreement (the " Loan Agreement ") dated [ · ] and made between (1) Weno Shipping Company Inc. and Pulap Shipping Company Inc. as joint and several borrowers (together, the " Borrowers "), (2) the banks and financial institutions named therein as Lenders, (3) BNP Paribas as Swap Bank, (4) BNP Paribas as Agent and (5) BNP Paribas as Security Trustee for a loan facility of up to US$55,000,000. |
2 | In this Certificate, terms defined in the Loan Agreement shall, unless the contrary intention appears, have the same meanings and: |
3 | The effective date of this Certificate is [ · ] 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 [0] per cent. of its Contribution, outstanding to the Transferor (or its predecessors in title) which is set out below: |
5 | By virtue of this Transfer Certificate and Clause 26 of the Loan Agreement, the Transferor is discharged [entirely from its Commitment which amounts to $ [ · ]] [from [ · ] per cent. of its Commitment, which percentage represents $[ · ]] and the Transferee acquires a Commitment of $[ · ].] |
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 or any Lender or the Swap Bank in the event that: |
(i) | any of the Finance Documents prove to be invalid or ineffective; |
(ii) | either of the Borrowers 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 or any Lender or the 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 above as exceeds one-half of the amount demanded by the Agent or the Security Trustee in respect of a claim, proceeding, liability or expense which was not reasonably foreseeable at the date of this Certificate; but nothing in this paragraph shall affect the liability of each of the Transferor and the Transferee to the Agent or the Security Trustee for the full amount demanded by it. |
[Name of Transferor]
|
[Name of Transferee]
|
By:
|
By:
|
Date:
|
Date:
|
Agent
|
By:
|
|
Date:
|
1 | the Loan Agreement; |
2 | the Master Agreement dated as of [ · ] made between ourselves and the Swap Bank; and |
3 | a Confirmation delivered pursuant to the said Master Agreement dated [ · ] and addressed by the Swap Bank to us. |
BORROWERS
|
||
SIGNED
by
|
)
|
/s/ Andreas Michalopoulos |
)
|
||
for and on behalf of
|
)
|
|
WENO SHIPPING COMPANY INC.
|
)
|
|
in the presence of:
|
)
|
|
SIGNED
by
|
)
|
/s/ Anastasios Margaronis |
)
|
||
for and on behalf of
|
)
|
|
PULAP SHIPPING COMPANY INC.
|
)
|
|
in the presence of:
|
)
|
|
LENDERS
|
||
SIGNED
by Kelina Koukou
|
)
|
/s/ Kelina Koukou
|
)
|
||
for and on behalf of
|
)
|
|
BNP PARIBAS
|
)
|
|
in the presence of: Marinos Papadopoulos
|
)
|
/s/ Marinos Papadopoulos
|
AGENT
|
||
SIGNED
by Kelina Koukou
|
)
|
/s/ Kelina Koukou
|
)
|
||
for and on behalf of
|
)
|
|
BNP PARIBAS
|
)
|
|
in the presence of: Marinos Papadopoulos
|
)
|
/
s/ Marinos Papadopoulos
|
SECURITY TRUSTEE
|
||
SIGNED
by Kelina Koukou
|
)
|
/s/ Kelina Koukou
|
)
|
||
for and on behalf of
|
)
|
|
BNP PARIBAS
|
)
|
|
in the presence of: Marinos Papadopoulos
|
)
|
/s/ Marinos Papadopoulos
|
SWAP BANK
|
||
SIGNED
by Kelina Koukou
|
)
|
/s/ Kelina Koukou
|
)
|
||
for and on behalf of
|
)
|
|
BNP PARIBAS
|
)
|
|
in the presence of: Marinos Papadopoulos
|
)
|
/s/ Marinos Papadopoulos
|
Clause
|
Index
|
Page
|
1
|
Interpretation
|
1
|
2
|
Facility
|
18
|
3
|
Position of the Lenders, the Swap and the Majority Lenders
|
18
|
4
|
Drawdown
|
19
|
5
|
Interest
|
21
|
6
|
Interest Periods
|
23
|
7
|
Default Interest
|
23
|
8
|
Repayment and Prepayment
|
25
|
9
|
Conditions Predecent
|
26
|
10
|
Representations and Warranties
|
27
|
11
|
General Undertakings
|
30
|
12
|
Corporate Undertakings
|
35
|
13
|
Insurance
|
36
|
14
|
Ship Covenants
|
41
|
15
|
Security Cover
|
45
|
16
|
Payments and Calculations
|
47
|
17
|
Application of Receipts
|
49
|
18
|
Application of Earnings
|
50
|
19
|
Events of Default
|
51
|
20
|
Fees and Expenses
|
55
|
21
|
Indemnities
|
57
|
22
|
No Set-off or Tax Deduction
|
59
|
23
|
Illegality, etc.
|
61
|
24
|
Increased Costs
|
62
|
25
|
Set off
|
64
|
26
|
Transfers and Changes in Lending Offices
|
65
|
27
|
Variations and waivers
|
68
|
28
|
Notices
|
69
|
29
|
Joint and Several Liability
|
72
|
30
|
Supplemental
|
72
|
31
|
Law and Jurisdiction
|
73
|
Schedule 1 Lenders and Commitments
|
75
|
|
Schedule 2 Drawdown Notice
|
76
|
|
Schedule 3 Condition Precedent Documents
|
77
|
|
Schedule 4 Transfer Certificate
|
80
|
|
Schedule 5 Designation Notice
|
84
|
|
Schedule 6 Mandatory Cost formula
|
85
|
|
Execution Pages
|
87
|
(1) | KNOX SHIPPING COMPANY INC., BOKAK SHIPPING COMPANY INC., JEMO SHIPPING COMPANY INC., GUAM SHIPPING COMPANY INC., PALAU SHIPPING COMPANY INC., MAKUR SHIPPING COMPANY INC., MANDARINGINA INC. and VESTA COMMERCIAL, S.A. , as joint and several borrowers (together, the " Borrowers "); |
(2) | THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1, as Lenders; |
(3) | NORDEA BANK FINLAND PLC , as Swap Bank; |
(4) | NORDEA BANK AB , London Branch, as Agent; |
(5) | NORDEA BANK AB , London Branch, as Lead Arranger; and |
(6) | NORDEA BANK AB , London Branch, as Security Trustee. |
(A) | The Lenders have agreed to make available to the Borrowers a term loan facility of up to the lesser of (i) US$110,000,000 and (ii) 65 per cent. of the aggregate Initial Market Values of the Ships for the purpose of re-financing Existing Indebtedness secured on the Existing Ships (as defined below) and for general corporate and working capital purposes of the Borrowers. |
(B) | The Swap Bank has agreed to 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 Bank 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 |
(a) | 15 April 2015 (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; |
(a) | the agreements on capital requirements, a leverage ratio and liquidity standards contained in "Basel Ill: A global regulatory framework for more resilient banks and banking systems", "Basel Ill: International framework for liquidity risk measurement, standards and monitoring" and "Guidance for national authorities operating the countercyclical capital buffer" published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated; |
(b) | the rules for global systemically important banks contained in "Global systemically important banks: assessment methodology and the additional loss absorbency requirement - Rules text" published by the Basel Committee on Banking Supervision in November 2011, as amended, supplemented or restated; and |
(c) | any further guidance or standards published by the Basel Committee on Banking Supervision relating to "Basel Ill"; |
(a) | it is entered into by the Borrowers pursuant to the Master Agreement with the Swap Bank; |
(b) | its purpose is the hedging of all or part 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 5, as a Designated Transaction for the purposes of the Finance Documents; |
(a) | except to the extent that they fall within paragraph (b); |
(i) | all freight, hire and passage moneys; |
(ii) | compensation payable to a 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; |
(a) | any claim by any governmental, judicial or regulatory authority which arises out of an Environmental Incident or an alleged Environmental Incident or which relates to any Environmental Law; or |
(b) | any claim by any other person which relates to an Environmental Incident or to an alleged Environmental Incident, |
(a) | any release of Environmentally Sensitive Material from the 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 the 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; |
(a) | Ship D and Ship E, under a loan agreement dated 20 December 2012 and made between (i) Guam and Palau as joint and several borrowers, (ii) the banks and financial institutions listed as lenders therein and (iii) Nordea Bank Finland plc as swap bank and (iv) Nordea Bank AB, London Branch as agent and security trustee in respect of a loan facility of (originally) $20,000,000 (the " First Agreement "); and |
(b) | Ship C and G, under a loan agreement dated 7 February 2012 (as amended and supplemented by two supplemental agreements dated 21 June 2012 and 4 July 2014, respectively) and made between (i) Jemo and Mandaringina as joint and several borrowers, (ii) the banks and financial institutions listed as lenders therein and (iii) Nordea Bank Finland plc as swap bank (the " Second Agreement " and, together with the First Agreement, the " Previous Loan Agreements "), |
(a) | sections 1471 to 1474 of the Code or any associated regulations; |
(b) | any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of any law or regulation referred to in paragraph (a) above; or |
(c) | any agreement pursuant to the implementation of any treaty, law or regulation referred to in paragraphs (a) or (b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction; |
(a) | this Agreement; |
(b) | the Agency and Trust Deed; |
(c) | the Master Agreement; |
(d) | the Master Agreement Assignment; |
(e) | the Corporate Guarantee; |
(f) | the General Assignments; |
(g) | the Mortgages; |
(h) | the Accounts Pledges; |
(i) | the Shares Pledges; |
(j) | the Initial Charter Assignments; |
(k) | the Manager's Undertakings; |
(l) | any Approved Charterparty Assignment; and |
(m) | any other document (whether creating a Security Interest or not) which is executed at any time by any Borrower, the Corporate Guarantor, the Approved Manager 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 Bank under this Agreement or any of the other documents referred to in this definition; |
(a) | for principal, interest or any other sum payable in respect of any moneys borrowed or raised by the debtor; |
(b) | under any loan stock, bond, note or other security issued by the debtor; |
(c) | under any acceptance credit, guarantee or letter of credit facility or dematerialised equivalent made available to the debtor; |
(d) | under a financial lease, a deferred purchase consideration arrangement or any other agreement having the commercial effect of a borrowing or raising of money by the debtor; |
(e) | under any foreign exchange transaction, any interest or currency swap or any other kind of derivative transaction entered into by the debtor or, 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 paragraphs (a) to (e) if the references to the debtor referred to the other person; |
(a) | Ship A, the time charterparty dated 18 November 2010 made between Knox as owner and the relevant Initial Charterer for a period of at least 59 months at a minimum daily charter hire rate of $26,500; |
(b) | Ship B, the time charterparty dated 10 May 2013 made between Bokak as owner and the relevant Initial Charterer for a period of at least 36 months at a minimum daily charter hire rate of $9,000; and |
(c) | Ship F, the time charterparty dated 2 October 2013 (as amended and supplemented by addendum no. 1 thereto dated 23 January 2014 and addendum no. 2 as evidenced by a recapitulation email dated 2 February 2015) made between Makur as owner and the relevant Initial Charterer for a period of at least 10 months at a minimum daily charter hire of $8,250, |
(a) | Ship A, Minmetals Logistics Group Co., Ltd., a corporation incorporated in China with registered office at Sanlihe Road, Haidian District, Beijing, China; |
(b) | Ship B, RWE Supply & Trading GmbH, a corporation incorporated in Germany with registered office at Windmill Hill Business Park, Whitehill Way, Swindon SN5 6PB, Wiltshire, United Kingdom; and |
(c) | Ship F, Clearlake Shipping Pte Ltd, a corporation incorporated in Singapore with registered office at 12 Marina Boulevard, #35-02 Marina Bay Financial Tower 3, Singapore 018982, Singapore, |
(a) | all policies and contracts of insurance, including entries of the Ship in any protection and indemnity or war risks association, effected in respect of the Ship, its Earnings or otherwise in relation to the Ship whether before, on or after the date of this Agreement; and |
(b) | all rights and other assets relating to, or derived from, any of the foregoing, including any rights to a return of a premium and any rights in respect of any claim whether or not the relevant policy, contract of insurance or entry has expired on or before the date of this Agreement; |
(a) | the applicable Screen Rate; or |
(b) | if no Screen Rate is available for that period, the rate per annum determined by the Agent to be the arithmetic mean of the rates, as supplied to the Agent at its request, quoted by the Reference Bank to leading banks in the London Interbank Market, |
(a) | before the Loan has been advanced, Lenders whose Commitments total 66.67 per cent. of the Total Commitments; and |
(b) | after the Loan has been advanced, Lenders whose Contributions total 66.67 per cent. of the Loan; |
(a) | Security Interests created by the Finance Documents; |
(b) | for the duration of the Existing Indebtedness Grace Period only, Security Interests created in respect of the relevant Existing Indebtedness; |
(c) | liens for unpaid master's and crew's wages in accordance with usual maritime practice; |
(d) | liens for salvage; |
(e) | 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; |
(f) | 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 14.13(g); |
(g) | any Security Interest created in favour of a plaintiff or defendant in any proceedings or arbitration as security for costs and expenses where the Borrower is actively prosecuting or defending such proceedings or arbitration in good faith; and |
(h) | Security Interests arising by operation of law in respect of taxes which are not overdue for payment or in respect of taxes being contested in good faith by appropriate steps and in respect of which appropriate reserves have been made;] |
(a) | any Finance Document; |
(b) | any policy or contract of insurance contemplated by or referred to in Clause 13 or any other provision of this Agreement or another Finance Document; |
(c) | any other document contemplated by or referred to in any Finance Document; and |
(d) | any document which has been or is at any time sent by or to a Servicing Bank in contemplation of or in connection with any Finance Document or any policy, contract or document falling within paragraphs (b) or (c); |
(a) | England and Wales; |
(b) | the country under the laws of which the company is incorporated or formed; |
(c) | a country in which the company has the centre of its main interests or in which the company's central management and control is or has recently been exercised; |
(d) | a country in which the overall net income of the company is subject to corporation tax, income tax or any similar tax; |
(e) | a country in which assets of the company (other than securities issued by, or loans to, related companies) having a substantial value are situated, in which the company maintains a branch or permanent place of business, or in which a Security Interest created by the company must or should be registered in order to ensure its validity or priority; and |
(f) | a country the courts of which have jurisdiction to make a winding up, administration or similar order in relation to the company, whether as main or territorial or ancillary proceedings, or which would have such jurisdiction if their assistance were requested by the courts of a country referred to in paragraphs (b) or (c); |
(a) | any transaction or matter contemplated by, arising out of, or in connection with a Pertinent Document; or |
(b) | any statement relating to a Pertinent Document or to a transaction or matter falling within paragraph (a), |
(a) | that is listed on any Sanctions List (whether designated by name or by reason of being included in a class of person); |
(b) | that is domiciled, registered as located or having its main place of business in, or is incorporated under the laws of, a country which is subject to Sanctions Laws which attach legal effect to being domiciled, registered as located or having its main place of business in such country; or |
(c) | that is directly or indirectly owned or controlled by a person referred to in (i) and/or (ii) above ; or |
(d) | with which any Lender is prohibited from dealing or otherwise engaging in a transaction with by any Sanctions Laws; |
(a) | a mortgage, charge (whether fixed or floating) or pledge, any maritime or other lien or any other security interest of any kind; |
(b) | the security rights of a plaintiff under an action in rem; and |
(c) | any arrangement entered into by a person (A) the effect of which is to place another person (B) in a position which is similar, in economic terms, to the position in which B would have been had he held a security interest over an asset of A;but this paragraph (c) does not apply to a right of set off or combination of accounts conferred by the standard terms of business of a bank or financial institution; |
(a) | all amounts which have become due for payment by the Borrowers or any Security Party under the Finance Documents have been paid; |
(b) | no amount is owing or has accrued (without yet having become due for payment) under any Finance Document; |
(c) | neither a Borrower nor any Security Party has any future or contingent liability under Clause 20, 21 or 22 below or any other provision of this Agreement or another Finance Document; and |
(d) | the Agent, the Security Trustee and the Majority Lenders do not consider that there is a significant risk that any payment or transaction under a Finance Document would be set aside, or would have to be reversed or adjusted, in any present or possible future bankruptcy of the Borrowers or a Security Party or in any present or possible future proceeding relating to a Finance Document or any asset covered (or previously covered) by a Security Interest created by a Finance Document; |
(a) | actual, constructive, compromised, agreed or arranged total loss of 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 that Ship; |
(c) | any condemnation of the Ship by any tribunal or by any person or person claiming to be a tribunal; and |
(d) | 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; |
(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 |
(c) | in the case of any other type of total loss, on the date (or the most likely date) on which it appears to the Agent that the event constituting the total loss occurred; |
(a) | a Borrower which is resident for tax purposes in the US; or |
(b) | a Borrower or Security Party some or all of whose payments under the Finance Documents are from sources within the US for US federal income tax purposes; and |
1.2 | Construction of certain terms |
1.3 | Meaning of "month" |
(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) | 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, |
1.5 | General Interpretation |
(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 |
2 | FACILITY |
2.1 | Amount of facility |
2.2 | Lenders' participations in the Loan |
2.3 | Purpose of the Loan |
3 | POSITION OF THE LENDERS, THE SWAP AND THE MAJORITY LENDERS |
3.1 | Interests of Lenders and Swap Bank several |
(a) | each Lender shall be entitled to sue for any amount which has become due and payable by the Borrowers to it under this Agreement; and |
(b) | the Swap Bank shall be entitled to sue for any amount which has become due and payable by the Borrowers to it under the Master Agreement, |
3.2 | Proceedings by individual Lender or Swap Bank |
(a) | any other liability or obligation of any Borrower or a Security Party under or connected with a Finance Document; or |
(b) | any misrepresentation or breach of warranty by any Borrower or a Security Party in or connected with a Finance Document. |
3.3 | Obligations several |
(a) | the obligations of the other Lenders or (as the case may be) the Swap Bank being increased; nor |
(b) | any Borrower, any Security Party or any other Creditor Party being discharged (in whole or in part) from its obligations under any Finance Document, |
3.4 | Parties bound by certain actions of Majority Lenders |
(a) | any determination made, or action taken, by the Majority Lenders under any provision of a Finance Document; |
(b) | any instruction or authorisation given by the Majority Lenders to the Agent or the Security Trustee under or in connection with any Finance Document (subject always to Clause 27.2); |
(c) | any action taken (or in good faith purportedly taken) by the Agent or the Security Trustee in accordance with such an instruction or authorisation. |
3.5 | Reliance on action of Agent |
(a) | shall be entitled to assume that the Majority Lenders have duly given any instruction or authorisation which, under any provision of a Finance Document, is required in relation to any action which the Agent has taken or is about to take; and |
(b) | shall not be entitled to require any evidence that such an instruction or authorisation has been given. |
3.6 | Construction |
4 | DRAWDOWN |
4.1 | Request for the Loan |
4.2 | Availability |
(a) | the Drawdown Date has to be a Business Day during the Availability Period; |
(b) | the amount of the Loan shall not exceed an amount of up to the lesser of (i) US$110,000,000 and (ii) 65 per cent. of the aggregate Initial Market Values of the Ships; |
(c) | the Loan shall be made available in one advance and shall be applied: |
(i) | in re-financing Existing Indebtedness secured on the Existing Ships; and |
(ii) | for general corporate and working capital purposes of the Borrowers. |
4.3 | Notification to Lenders of receipt of a Drawdown Notice |
(a) | the amount of the Loan and the Drawdown Date; |
(b) | the amount of that Lender's participation in the Loan; and |
(c) | the duration of the first Interest Period. |
4.4 | Drawdown Notice irrevocable |
4.5 | Lenders to make available Contributions |
4.6 | Disbursement of the Loan |
(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 the Loan to third party |
4.8 | Designated Transactions under the Master Agreement |
(a) | The Borrowers may at any time conclude Designated Transactions with the Swap Bank pursuant to the Master Agreement for the purpose of swapping their interest payment obligations and managing their exposure to fluctuation in LIBOR under this Agreement. The Borrowers agree that signature of the Master Agreement does not commit the Swap Bank to conclude Designated Transactions, or even to offer terms for doing so, but does provide a contractual framework within which Designated Transactions may be concluded and secured, assuming that mutually acceptable terms can be agreed at the relevant time. |
(b) | The Lenders agree that, to enable the Borrowers to secure their obligations to the Swap Bank under the Master Agreement, the security of the other Finance Documents shall be held by the Security Trustee not only to secure the Borrowers' obligations under this Agreement but also the Borrowers' obligations under the Master Agreement on the terms set out in Clause 17. |
5 | INTEREST |
5.1 | Payment of normal interest |
5.2 | Normal rate of interest |
5.3 | Payment of accrued interest |
5.4 | Notification of Interest Periods and rates of normal interest |
(a) | each rate of interest; and |
(b) | the duration of each Interest Period |
5.5 | Obligation of Reference Bank to quote |
5.6 | Absence of quotations by Reference Bank |
5.7 | Market disruption |
(a) | no Screen Rate is available for an Interest Period and the Reference Bank does 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, a Lender with Contribution amounting to more than 33.3 per cent. of the Loan, may notify the Agent that LIBOR fixed by the Agent would not accurately reflect the cost to those Lenders of funding its respective Contribution (or any part of it) during the Interest Period in the London Interbank Market at or about 11.00 a.m. (London time) on the Quotation Date for the Interest Period; or |
(c) | at least 1 Business Day before the start of an Interest Period, the Agent is notified by a Lender (the " Affected Lender ") that for any reason it is unable to obtain Dollars in the London Interbank Market in order to fund its Contribution (or any part of it) during the Interest Period. |
5.8 | Notification of market disruption |
5.9 | Suspension of drawdown |
(a) | in a case falling within Clauses 5.7(a) or 5.7(b), the Lenders' obligations to make the Loan; and |
(b) | in a case falling within Clause 5.7, the Affected Lender's obligation to participate in the Loan, shall be suspended while the circumstances referred to in the Agent's notice continue. |
5.10 | Negotiation of alternative rate of interest |
5.11 | Application of agreed alternative rate of interest |
5.12 | Alternative rate of interest in absence of agreement |
5.13 | Notice of prepayment |
5.14 | Prepayment; termination of Commitments |
(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 |
5.15 | Application of prepayment |
6 | INTEREST PERIODS |
6.1 | Commencement of Interest Periods |
6.2 | Duration of normal Interest Periods |
(a) | 1 or 3 months as notified by the Borrowers to the Agent not later than 11.00 a.m. (London time) 5 Business Days (or such longer period as the Agent and the Borrowers may agree) before the commencement of the Interest Period; or |
(b) | 3 months, if the Borrowers fail to notify the Agent by the time specified in paragraph (a); or |
(c) | such other period as the Agent may, with the authorisation of the Majority Lenders, agree with the Borrowers. |
6.3 | Duration of Interest Periods for repayment instalments |
6.4 | Non-availability of matching deposits for Interest Period selected |
7 | DEFAULT INTEREST |
7.1 | Payment of default interest on overdue amounts |
(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 |
(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 |
(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); and |
(b) | the aggregate of the Margin and the Mandatory Cost (if any) plus, in respect of successive periods of any duration (including at call) up to 3 months which the Agent may select from time to time: |
(i) | LIBOR; or |
(ii) | if the Agent (after consultation with the Reference Bank) determines that Dollar deposits for any such period are not being made available to the 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 Bank from such other sources as the Agent (after consultation with the Reference Bank) may from time to time determine. |
7.4 | Notification of interest periods and default rates |
7.5 | Payment of accrued default interest |
7.6 | Compounding of default interest |
7.7 | Application to Master Agreement |
8 | REPAYMENT AND PREPAYMENT |
8.1 | Amount of repayment instalments |
(a) | 24 consecutive three-monthly instalments (the " Repayment Instalments " and each a " Repayment Instalment ") each in an amount equal to one fiftieth (1/50th) of the Loan; and |
(b) | a balloon instalment in the amount equal to the Loan on the Final Maturity Date (the " Balloon Instalment ") . |
8.2 | Repayment Dates |
8.3 | Final Repayment Date |
8.4 | Voluntary prepayment |
8.5 | Conditions for voluntary prepayment |
(a) | a partial prepayment shall be $500,000 or a higher integral multiple of $500,000; |
(b) | the Agent has received from the Borrowers at least 3 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 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 |
8.7 | Notification of notice of prepayment |
8.8 | Mandatory prepayment |
(a) | in the case of a sale, on or before the date on which the Mortgage on that Ship is released; or |
(b) | in the case of 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. |
8.9 | Amounts payable on prepayment |
8.10 | Application of partial prepayment |
8.11 | No re-borrowing |
8.12 | Unwinding of Designated Transactions |
9 | CONDITIONS PREDECENT |
9.1 | Documents, fees and no default |
(a) | that, on or before the service of the Drawdown Notice, the Agent receives: |
(i) | the documents described in Part A of Schedule 3 in form and substance satisfactory to the Agent and its lawyers; |
(ii) | the arrangement fee referred to in Clause 20.1; |
(b) | that, on the Drawdown Date but prior to the making of the Loan, the Agent receives or is satisfied that it will receive on the making of the Loan the documents described in Part B of Schedule 3 in form and substance satisfactory to it and its lawyers; |
(c) | that, on or before the service of the Drawdown Date, the Agent receives payment of any expenses payable pursuant to Clause 20.2 which is due and payable on the Drawdown Date; |
(d) | that both at the date of the Drawdown Notice and at the Drawdown Date: |
(i) | no Event of Default or Potential Event of Default has occurred or would result from the borrowing of the Loan; |
(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; |
(iii) | none of the circumstances contemplated by Clause 5.7 has occurred and is continuing; and |
(iv) | there has been no material adverse change in the financial condition, state of affairs or prospects of the Borrowers (or any of them), the Corporate Guarantor or any other Security Party since 30 September 2014 in the light of which the Agent considers that there is a significant risk that the Borrowers, the Corporate Guarantor or any other Security Party is, or will later become, unable to discharge its liabilities under the Finance Documents to which it is a party as they fall due; |
(e) | that, if the ratio set out in Clause 15.1 were applied immediately following the making of the Loan, the Borrowers would not be obliged to provide additional security or prepay part of the Loan under that Clause; and |
(f) | that the Agent has received, and found to be acceptable to it, any further opinions, consents, agreements and documents in connection with the Finance Documents which the Agent may, with the authorisation of the Majority Lenders, request by notice to the Borrowers prior to the Drawdown Date. |
9.2 | Waiver of conditions precedent |
10 | REPRESENTATIONS AND WARRANTIES |
10.1 | General |
10.2 | Status |
(a) | Each Borrower, save for Vesta is duly incorporated and validly existing and in good standing under the laws of the Marshall Islands; and |
(b) | Vesta is duly incorporated and validly existing and in good standing under the laws of Panama |
10.3 | Shares and ownership |
(a) | Each Borrower (other than Vesta) is authorised to issue Five hundred (500) registered shares with par value of $0,01 each; and |
(b) | Vesta has an authorised share capital of One hundred (100) registered shares, |
10.4 | Corporate power |
(a) | to register permanently the Ship owned by it in its name under the Approved Flag; |
(b) | to execute the Finance Documents to which that Borrower is a party; and |
(c) | to borrow under this Agreement, to enter into Designated Transactions under the Master Agreement and to make all the payments contemplated by, and to comply with, those Finance Documents to which it is a party. |
10.5 | Consents in force |
10.6 | Legal validity; effective Security Interests |
(a) | constitute that Borrower's legal, valid and binding obligations enforceable against that Borrower in accordance with their respective terms; and |
(b) | create legal, valid and binding Security Interests enforceable in accordance with their respective terms over all the assets to which they, by their terms, relate; |
10.7 | No third party Security Interests |
(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 |
(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 |
10.10 | No default |
10.11 | Information |
10.12 | No litigation |
10.13 | Validity and completeness of each Initial Charter |
(a) | the copy of each Initial Charter delivered to the Agent before the date of this Agreement is a true and complete copy; and |
(b) | other than those amendments and additions to an Initial Charter disclosed to the Agent before the date of this Agreement, no amendments or additions to that Initial Charter have been agreed nor has a Borrower or an Initial Charterer waived any of their respective rights under an Initial Charter. |
10.14 | Compliance with certain undertakings |
10.15 | Taxes paid |
10.16 | ISM Code and ISPS Code compliance |
10.17 | No money laundering |
10.18 | No immunity |
10.19 | Sanctions |
(a) | Each Borrower and its respective directors, officers, employees, and to the best of each Borrower's knowledge, its respective agents or representatives has been and is in compliance with Sanctions Laws. |
(b) | No Borrower and their respective directors, officers, employees, and to the best of each Borrower's knowledge, none of its respective agents or representatives: |
(i) | is a Restricted Party, or is involved in any transaction through which it is likely to become a Restricted Party; or |
(ii) | is subject to or involved in any inquiry, claim, action, suit, proceeding or investigation against it with respect to Sanctions Laws by any Sanctions Authority. |
10.20 | Compliance with applicable laws |
11 | GENERAL UNDERTAKINGS |
11.1 | General |
11.2 | Title; negative pledge |
(a) | hold the legal title to, and own the entire beneficial interest in the Ship owned by it, the 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 the Swap Bank under the Master Agreement or all or any part of that Borrower's interest in any amount payable to that Borrower by the Swap Bank under the Master Agreement). |
11.3 | No disposal of assets |
(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 |
(a) | under the Finance Documents to which it is a party; |
(b) | liabilities or obligations reasonably incurred in the ordinary course of owning, operating and chartering the Ship; |
(c) | in respect of the Designated Transactions; and |
(d) | in the case of Jemo, Guam, Palau and Mandaringina under the Previous Loan Agreements to which each is a party during the Existing Indebtedness Grace Period. |
11.5 | Information provided to be accurate |
11.6 | Provision of financial statements |
(a) | as soon as possible, but in no event later than 180 days after the end of each Financial Year of the Corporate Guarantor the audited annual consolidated financial statements for that Financial Year of the Corporate Guarantor (commencing with the accounts for the year that ended on 31 December 2014); |
(b) | as soon as possible, but in no event later than 90 days after 30 June and 31 December in each Financial Year of the Corporate Guarantor the unaudited semi-annual consolidated financial statements (in the form published in the relevant press release) for that Financial Year of the Corporate Guarantor (commencing with the financial statements for the 6-month period ending 30 June 2015) certified as to their correctness by the chief financial officer of the Corporate Guarantor; and |
(c) | promptly after a request by the Agent, such further financial or other information in respect of the Borrowers, the Ships, the Corporate Guarantor, the other Security Parties and the Group (including, but not limited to, charter arrangements, Financial Indebtedness, operating expenses) as the Agent may reasonably require. |
11.7 | Form of financial statements |
(a) | be prepared in accordance with all applicable laws and GAAP consistently applied; |
(b) | give a true and fair view of the state of affairs of the Group at the date of those accounts and of its profit for the period to which those accounts relate; and |
(c) | fully disclose or provide for all significant liabilities of the Group. |
11.8 | Shareholder and creditor notices |
11.9 | Consents |
(a) | for that Borrower to perform its obligations under any Finance Document to which it is a party; |
(b) | for the validity or enforceability of any Finance Document to which it is a party; and |
(c) | for that Borrower to continue to own and operate the Ship owned by it, and that Borrower will comply with the terms of all such consents. |
11.10 | Maintenance of Security Interests |
(a) | at its own cost, do all that is necessary to ensure that any Finance Document to which it is a party 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 |
11.12 | No amendment to Master Agreement |
11.13 | Principal place of business |
11.14 | Confirmation of no default |
(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. |
11.15 | Notification of default |
(a) | the occurrence of an Event of Default or a Potential Event of Default; or |
(b) | any matter which indicates that an Event of Default or a Potential Event of Default may have occurred, |
11.16 | Provision of further information |
(a) | to the Borrowers, the Group, the Corporate Guarantor, the Ships, the other Fleet Vessels, their Insurances or their Earnings (including, but not limited to, any sales or purchases of any Fleet Vessels, the incurrence of Financial Indebtedness by members of the Group, details of the employment of the Fleet Vessels) as the Agent may require; or |
(b) | to any other matter relevant to, or to any provision of, a Finance Document, |
11.17 | Provision of copies and translation of documents |
11.18 | Money laundering |
11.19 | No amendment to the Initial Charter |
11.20 | Payment of taxes |
11.21 | Bribery and anti-corruption laws |
(a) | No Borrower shall use the proceeds of the Loan for any purpose which would breach the Bribery Act 2010, the United States Foreign Corrupt Practices Act of 1977 or other similar legislation in other jurisdictions. |
(b) | Each Borrower shall (and shall procure that each other Security Party and each other member of the Group shall): |
(i) | conduct its businesses in compliance with applicable anti-corruption laws; and |
(ii) | maintain policies and procedures designed to promote and achieve compliance with such laws. |
11.22 | Sanctions |
(a) | Each Borrower shall ensure that none of them, nor any of their respective directors, officers, employees, agents or representatives or any other persons acting on any of their behalf, is or will become a Restricted Party. |
(b) | Each Borrower shall supply to the Agent, promptly upon becoming aware of them, the details of any claim, action, suit, proceeding or investigation with respect to Sanctions against it, any of its direct or indirect owners, subsidiaries, any of their joint ventures or any of their respective directors, officers, employees, agents or representatives. |
11.23 | Use of proceeds |
12 | CORPORATE UNDERTAKINGS |
12.1 | General |
12.2 | Maintenance of status |
12.3 | Negative undertakings |
(a) | carry on any business other than the ownership, chartering and operation of the Ship owned by that Borrower; or |
(b) | pay any dividend or make any other form of distribution or effect any form of redemption, purchase or return of share capital (the " Distribution ") if an Event of Default has occurred at any relevant time which is continuing or an Event of Default will result from the Distribution; or |
(c) | provide any form of credit or financial assistance to: |
(i) | a person who is directly or indirectly interested in that Borrower's share or loan capital; or |
(ii) | any company in or with which such a person is directly or indirectly interested or connected, |
(d) | open or maintain any account with any bank or financial institution except accounts with the Agent and the Security Trustee for the purposes of the Finance Documents; or |
(e) | issue, allot or grant any person a right to any shares in its capital or repurchase or reduce its issued share capital; or |
(f) | acquire any shares or other securities other than US or UK Treasury bills and certificates of deposit issued by major North American or European banks, or enter into any transaction in a derivative other than the Designated Transactions; or |
(g) | enter into any form of amalgamation, merger or de-merger or any form of reconstruction or reorganisation. |
13 | INSURANCE |
13.1 | General |
13.2 | Maintenance of obligatory insurances |
(a) | fire and usual marine risks (including hull and machinery and excess risks); |
(b) | war risks (including terrorism, piracy and confiscation); |
(c) | protection and indemnity risks (other than loss of hire or political risks); and |
(d) | any other risks against which the Security Trustee considers, having regard to practices and other circumstances prevailing at the relevant time, it would in the opinion of the Security Trustee be reasonable for that Borrower to insure and which are specified by the Security Trustee by notice to that Borrower. |
13.3 | Terms of obligatory insurances |
(a) | in Dollars; |
(b) | in the case of fire and usual marine risks and war risks, (including hull interest and freight interest) in such amount as shall from time to time be approved by the Security Trustee but in any event in an amount not less than the greater of (i) an amount which when aggregated with the insured value of the other Ships then subject to a Mortgage, 120 per cent of the aggregate of the Loan and (ii) the Market Value of the Ship owned by it; |
(c) | in the case of hull and machinery policy at an agreed insured value (excluding hull interest and freight interest) in an amount of not less than an amount which when aggregated with the agreed insured values under all the other hull and machinery policies for the other Ships then subject to a Mortgage is not less than the principal amount of the Loan Provided that the Borrowers are in compliance with their obligations under paragraph (b) above at all times; |
(d) | in the case of oil pollution liability risks, for an aggregate amount equal to the highest level of cover from time to time available under basic protection and indemnity club entry and in the international marine insurance market; |
(e) | in relation to protection and indemnity risks in respect of the full tonnage of the Ship; |
(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 |
(a) | subject always to paragraph (b), name that Borrower as the sole named assured unless the interest of every other named assured is limited: |
(i) | in respect of any obligatory insurances for hull and machinery and war risks; |
(A) | to any provable out-of-pocket expenses that it has incurred and which form part of any recoverable claim on underwriters; and |
(B) | to any third party liability claims where cover for such claims is provided by the policy (and then only in respect of discharge of any claims made against it); and |
(ii) | in respect of any obligatory insurances for protection and indemnity risks, to any recoveries it is entitled to make by way of reimbursement following discharge of any third party liability claims made specifically against it |
(b) | whenever the Security Trustee requires, name (or be amended to name) the Security Trustee as additional named assured for its rights and interests, warranted no operational interest and with full waiver of rights of subrogation against the Security Trustee, but without the Security Trustee thereby being liable to pay (but having the right to pay) premiums, calls or other assessments in respect of such insurance; |
(c) | name the Security Trustee as loss payee with such directions for payment as the Security Trustee may specify; |
(d) | provide that all payments by or on behalf of the insurers under the obligatory insurances to the Security Trustee shall be made without set-off, counterclaim or deductions or condition whatsoever; |
(e) | provide that such obligatory insurances shall be primary without right of contribution from other insurances which may be carried by the Security Trustee or any other Creditor Party; and |
(f) | provide that the Security Trustee may make proof of loss if that Borrower fails to do so. |
13.5 | Renewal of obligatory insurances |
(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, 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 each conditions of the renewal. |
13.6 | Copies of policies; letters of undertaking |
(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 |
(a) | a certified copy of the certificate of entry for that Ship owned by it; |
(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 |
13.9 | Payment of premiums |
13.10 | Guarantees |
13.11 | Restrictions on employment |
13.12 | Compliance with terms of insurances |
(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. |
13.13 | Alteration to terms of insurances |
(a) | No Borrower shall make nor agree to any alteration to the terms of any obligatory insurance nor waive any right relating to any obligatory insurance. |
(a) | Without limiting the generality of the foregoing, no Borrower shall either make or agree to any alteration to the terms of any war risks and allied perils coverage (including piracy coverage) whereby trading to conditional (excluded) areas not declared on the annual policy would be altered without the consent of the Agent. |
13.14 | Settlement of claims |
13.15 | Provision of copies of communications |
(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. |
13.16 | Provision of information |
(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 13.17 below or dealing with or considering any matters relating to any such insurances, |
13.17 | Mortgagee's interest insurances |
13.18 | Review of insurance requirements |
13.19 | Modification of insurance requirements |
13.20 | Compliance with mortgagee's instructions |
14 | SHIP COVENANTS |
14.1 | General |
14.2 | Ship's name and registration |
14.3 | Repair and classification |
(a) | consistent with first class ship ownership and management practice; |
(b) | so as to maintain the highest class free of overdue recommendations and conditions with a classification society which is a member of IACS acceptable to the Agent; and |
(c) | so as to comply with all laws and regulations applicable to vessels registered at ports in the applicable Approved Flag State or to vessels trading to any jurisdiction to which that Ship may trade from time to time, including but not limited to the ISM Code and the ISPS Code. |
14.4 | Classification society undertaking |
(a) | to send to the Security Trustee, following receipt of a written request from the Security Trustee, certified true copies of all original class records held by the classification society in relation to its Ship; |
(b) | to allow the Security Trustee (or its agents), at any time and from time to time, to inspect the original class and related records of its Ship at the offices of the classification society and to take copies of them; |
(c) | to notify the Security Trustee immediately in writing if the classification society: |
(i) | receives notification from that Borrower or any other person that its 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 that Ship's class under the rules or terms and conditions of that Borrower's or its Ship's membership of the classification society; and |
(d) | following receipt of a written request from the Security Trustee: |
(i) | to confirm that a Borrower 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 a Borrower is in default of any of its contractual obligations or liabilities to the classification society, to specify to the Security Trustee in reasonable detail the facts and circumstances of such default, the consequences of such default, and any remedy period agreed or allowed by the classification society. |
14.5 | Modification |
14.6 | Removal of parts |
14.7 | Surveys |
14.8 | Inspection |
14.9 | Prevention of and release from arrest |
(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, |
14.10 | Compliance with laws etc. |
(a) | comply, or procure compliance with the ISM Code, the ISPS Code, all Environmental Laws, Sanctions 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, the ISPS Code and Sanctions; 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. |
14.11 | Provision of information |
(a) | the Ship owned by it, its employment, position and engagements; |
(b) | the Earnings and payments and amounts due to the master and crew of the Ship owned by it; |
(c) | any expenses incurred, or likely to be incurred, in connection with the operation, maintenance or repair of the Ship owned by it and any payments made in respect of that Ship; |
(d) | any towages and salvages; and |
(e) | its compliance, the Approved Manager's compliance and the compliance of the Ship owned by it with the ISM Code, the ISPS Code and Sanctions, |
14.12 | Notification of certain events |
(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 the Borrower, the 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, |
14.13 | Restrictions on chartering, appointment of managers etc. |
(a) | let that Ship on demise charter for any period; |
(b) | other than an Initial Charter 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, 12 months; |
(c) | enter into any charter in relation to that Ship under which more than 2 months' hire (or the equivalent) is payable in advance; |
(d) | charter that Ship otherwise than on bona fide arm's length terms at the time when that Ship is fixed; |
(e) | appoint a manager of that Ship other than the Approved Manager or agree to any alteration to the terms of the Approved Manager's appointment; |
(f) | deactivate or lay-up that Ship; or |
(g) | put that Ship into the possession of any person for the purpose of work being done upon it in an amount exceeding or likely to exceed 1,000,000 (or the equivalent in any other currency) unless that person has first given to the Security Trustee and in terms satisfactory to it a written undertaking not to exercise any lien on that Ship or its Earnings for the cost of such work or for any other reason. |
14.14 | Notice of Mortgage |
14.15 | Sharing of Earnings |
(a) | enter into any agreement or arrangement for the sharing of any Earnings; |
(b) | enter into any agreement or arrangement for the postponement of any date on which any Earnings are due; and |
(c) | the reduction of the amount of any Earnings or otherwise for the release or adverse alteration of any right of a Borrower to any Earnings. |
14.16 | ISPS Code |
(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; |
(b) | maintain for that Ship an ISSC; and |
(c) | notify the Agent immediately in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC. |
14.17 | Charterparty Assignment |
(a) | serve notices of the Approved Charterparty Assignment on the Approved Charterer and procure that the Approved Charterer acknowledges such notice in such form as the Agent may approve or require; and |
(b) | deliver to the Agent such other documents equivalent to those referred to at paragraphs 3, 4 and 5 of Schedule 3, Part A as the Agent may require. |
15 | SECURITY COVER |
15.1 | Minimum required security cover |
(a) | the aggregate of the Market Values of the Ships; plus |
(b) | the net realisable value of any additional security previously provided under this Clause 15, is below 125 per cent of the Loan. |
15.2 | Provision of additional security; prepayment |
15.3 | Valuation of Ships |
(a) | as at a date not more than 14 days previously; |
(b) | an Approved Broker (selected by the Borrowers and appointed by the Agent); |
(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 security |
(a) | if it consists of a Security Interest over a vessel shall be that shown by a valuation complying with the requirements of Clause 15.3; and |
(b) | if it consists of cash, the US Dollar amount thereof. |
15.5 | Valuations binding |
15.6 | Provision of information |
15.7 | Payment of valuation expenses |
15.8 | Application of prepayment |
16 | PAYMENTS AND CALCULATIONS |
16.1 | Currency and method of payments |
(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 a Borrower to the Agent or any Lender, to the account of the Agent at Bank of America NA, New York (Swift Code BOFAUS3N) (Account Nordea Bank AB, London Branch Account No. 6550453766, Swift Code: NDEAGB2L)), or to such other account with such other 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 |
(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 |
16.4 | Distribution of payments to Creditor Parties |
(a) | any amount received by the Agent under a Finance Document for distribution or remittance to a Lender, the Swap Bank or the Security Trustee shall be made available by the Agent to that Lender, the Swap Bank 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 Bank 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 Bank generally shall be distributed by the Agent to each Lender and the Swap Bank pro rata to the amount in that category which is due to it. |
16.5 | Permitted deductions by Agent |
16.6 | Agent only obliged to pay when monies received |
16.7 | Refund to Agent of monies not received |
(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 |
16.9 | Creditor Party accounts |
16.10 | Agent's memorandum account |
16.11 | Accounts prima facie evidence |
17 | APPLICATION OF RECEIPTS |
17.1 | Normal order of application |
(a) | FIRST: in or towards satisfaction of any amounts then due and payable under the Finance Documents 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) and (iii) (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); |
(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 (and, for this purpose, the expression " interest " shall include any net amount which a Borrower shall have become liable to pay or deliver under section 2(e) (Obligations) of the Master Agreement but shall have failed to pay or deliver to the Swap Bank at the time of application or distribution under this Clause 17); and |
(iii) | thirdly, in or towards satisfaction pro rata of the Loan and the Swap Exposure (in the case of the latter, calculated as at the actual Early Termination Date applying to each particular Designated Transaction, or if no such Early Termination Date shall have occurred, calculated as if an Early Termination Date occurred on the date of application or distribution hereunder); |
(b) | SECONDLY: in retention of an amount equal to any amount not then due and payable under any Finance Document but which the Agent, by notice to the Borrowers, the Security Parties and the other Creditor Parties, states in its opinion will either 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 |
17.3 | Notice of variation of order of application |
17.4 | Appropriation rights overridden |
18 | APPLICATION OF EARNINGS |
18.1 | Payment of Earnings |
18.2 | Location of accounts |
(a) | comply with any requirement of the Agent as to the location or re location of its Earnings Account; 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) its Earnings Account. |
18.3 | Debits for expenses etc. |
18.4 | Borrowers' obligations unaffected |
(a) | the liability of the Borrowers to make payments of principal and interest on the due dates; or |
(b) | any other liability or obligation of the Borrowers or any Security Party under any Finance Document. |
18.5 | Earnings Accounts balances |
19 | EVENTS OF DEFAULT |
19.1 | Events of Default |
(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, 10.18, 10.19, 11.2, 11.3, 11.9, 11.18, 11.19, 11.21, 11.22, 11.23, 12.2, 12.3, 13.2, 13.3, 15.1, 15.2 and 12.4 of the Corporate Guarantee; 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 un-remedied 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, the Borrower or a Security Party in a Finance Document or in a Drawdown Notice or any other notice or document relating to a Finance Document is materially untrue or misleading when it is made or repeated; or |
(f) | any of the following occurs in relation to any Financial Indebtedness of a Relevant Person (in the case of all Relevant Persons (taken as a whole) exceeding in aggregate $10,000,000 (or the equivalent in any other currency) at any relevant time Provided that in the case of each Borrower, individually, any Financial Indebtedness exceeding $500,000 (or the equivalent in any other currency)): |
(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, or any swap or other derivative contract or transaction, relating to any Financial Indebtedness of a Relevant Person ceases to be available or becomes capable of being terminated as a result of any event of default, or cash cover is required, or becomes capable of being required, in respect of such a facility as a result of any event of default; or |
(v) | any Security Interest securing any Financial Indebtedness of a Relevant Person becomes enforceable; or |
(g) | any of the following occurs in relation to a Relevant Person: |
(i) | a Relevant Person becomes, in the 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 exceeding, in aggregate, in the case of all Relevant Persons (taken as a whole) $10,000,000 (or the equivalent in any other currency) at any relevant time Provided that in the case of each Borrower, individually, any sum of, or sums exceeding, in aggregate $500,000 (or the equivalent in any other currency); |
(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 of a Pertinent Jurisdiction 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 Corporate 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 in any Pertinent Jurisdiction, 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 |
(x) | any meeting of the members or directors, or of any committee of the board or senior management, of a Relevant Person is held or summoned for the purpose of considering a resolution or proposal to authorise or take any action of a type described in paragraphs (iv) to (ix) or a step preparatory to such action, or (with or without such a meeting) the members, directors or such a committee resolve or agree that such an action or step should be taken or should be taken if certain conditions materialise or fail to materialise; or |
(xi) | in a country other than England, any event occurs, any proceedings are opened or commenced or any step is taken which, in the opinion of the Majority Lenders is similar to any of the foregoing; or |
(h) | any Borrower 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 in any Pertinent Jurisdiction or impossible: |
(i) | for any Borrower, the Corporate Guarantor 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; |
(ii) | for the Agent, the Security Trustee, the Lenders or the Swap Bank 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 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, a change has occurred or probably has occurred after the date of this Agreement in the ownership of any of the shares in a Borrower or the Approved Manager; 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 Security Interest created by a Finance Document proves to have been or becomes invalid or unenforceable or such a Security Interest proves to have ranked after, or loses its priority to, another Security Interest or any other third party claim or interest; or |
(m) | the security constituted by a Finance Document is in any way imperilled or in jeopardy; or |
(n) | without the prior consent of the Lenders, the shares of the Corporate Guarantor cease to be listed on the New York Stock Exchange; or |
(o) | an Event of Default (as defined in section 14 of the Master Agreement) occurs; or |
(p) | the Master Agreement is terminated, cancelled, suspended, rescinded or revoked or otherwise ceases to remain in full force and effect for any reason except with the consent of the Swap Bank; 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 any Relevant Person; or |
(ii) | any accident or other event involving any Ship or another vessel owned, chartered or operated by a Relevant Person |
19.2 | Actions following an Event of Default |
(a) | the Agent may, and if so instructed by the Majority Lenders, the Agent shall: |
(i) | serve on the Borrowers a notice stating that all or part of the Commitments and of the other obligations of each Lender to the Borrowers under this Agreement are cancelled; and/or |
(ii) | serve on the Borrowers a notice stating that all or part of the Loan together with 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 Bank are entitled to take under any Finance Document or any applicable law. |
19.3 | Termination of Commitments |
19.4 | Acceleration of Loan |
19.5 | Multiple notices; action without notice |
19.6 | Notification of Creditor Parties and Security Parties |
19.7 | Creditor Party's rights unimpaired |
19.8 | Exclusion of Creditor Party liability |
(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 |
19.10 | Interpretation |
19.11 | Position of Swap Bank |
20 | FEES AND EXPENSES |
20.1 | Arrangement fee |
20.2 | Costs of negotiation , preparation etc. |
20.3 | Costs of variations , amendments , enforcement etc. |
(a) | any amendment or supplement to a Finance Document (required for the continuation of the availability of the Loan), or any proposal for such an amendment to be made; |
(b) | any consent or waiver by the Lenders, the Swap Bank, 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) | where the Security Trustee, in its absolute opinion, considers that there has been a material change to the insurances in respect of a Ship, the review of the insurances of that Ship pursuant to Clause 13.18; and |
(e) | any step taken by the Creditor party concerned or the Swap Bank 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 |
20.5 | Documentary taxes |
20.6 | Financial Services Authority fees |
20.7 | Certification of amounts |
21 | INDEMNITIES |
21.1 | Indemnities regarding borrowing and repayment of Loan |
(a) | the Loan 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 |
(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 |
21.3 | Miscellaneous indemnities |
(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 civil penalty or fine against, and all reasonable costs and expenses (including reasonable fees of counsel and disbursements) incurred in connection with or the defence thereof by, the Agent or any other Creditor Party as a result of conduct of any Borrower or any of their partners, directors, officers, employees, agents or advisors, that violates any Sanctions; or |
(c) | any other Pertinent Matter, |
21.4 | Environmental Indemnity |
21.5 | Currency indemnity |
(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, |
21.6 | Application to Master Agreement |
21.7 | Certification of amounts |
21.8 | Sums deemed due to a Lender |
22 | NO SET-OFF OR TAX DEDUCTION |
22.1 | No deductions |
(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 |
(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; and |
(c) | the amount due in respect of the payment shall be increased by the amount necessary to ensure that each Creditor Party receives and retains (free from any liability relating to the tax deduction) a net amount which, after the tax deduction, is equal to the full amount which it would otherwise have received. |
22.3 | Evidence of payment of taxes |
22.4 | Exclusion of tax on overall net income |
22.5 | Application to Master Agreement |
22.6 | FATCA Information |
(a) | Subject to paragraph (c) below, each Party shall, within ten Business Days of a reasonable request by another Party: |
(i) | confirm to that other Party whether it is: |
(A) | a FATCA Exempt Party; or |
(B) | not a FATCA Exempt Party; |
(ii) | supply to that other Party such forms, documentation and other information relating to its status under FATCA as that other Party reasonably requests for the purposes of that other Party's compliance with FATCA; |
(iii) | supply to that other Party such forms, documentation and other information relating to its status as that other Party reasonably requests for the purposes of that other Party's compliance with any other law, regulation, or exchange of information regime. |
(b) | If a Party confirms to another Party pursuant to paragraph (a)(i) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not or has ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly. |
(c) | Paragraph (a) above shall not oblige any Finance Party to do anything, and paragraph (a)(iii) above shall not oblige any other Party to do anything, which would or might in its reasonable opinion constitute a breach of: |
(i) | any law or regulation; |
(ii) | any fiduciary duty; or |
(iii) | any duty of confidentiality. |
(d) | If a Party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with paragraph (a)(i) or (ii) above (including, for the avoidance of doubt, where paragraph (c) above applies), then such Party shall be treated for the purposes of the Finance Documents (and payments under them) as if it is not a FATCA Exempt Party until such time as the Party in question provides the requested confirmation, forms, documentation or other information. |
(e) | If a Borrower is a US Tax Obligor or the Agent reasonably believes that its obligations under FATCA or any other applicable law or regulation require it, each Lender shall, within ten Business Days of: |
(i) | where an Original Borrower is a US Tax Obligor and the relevant Lender is an Original Lender, the date of this Agreement; |
(ii) | where a Borrower is a US Tax Obligor on a Transfer Date and the relevant Lender is a New Lender, the relevant Transfer Date; |
(iii) | the date a new US Tax Obligor accedes as a Borrower; or |
(iv) | the date of a request from the Agent, supply to the Agent: |
(A) | a withholding certificate on Form W-8, Form W-9 or any other relevant form; or |
(B) | any withholding statement or other document, authorisation or waiver as the Agent may require to certify or establish the status of such Lender under FATCA or that other law or regulation. |
(f) | The Agent shall provide any withholding certificate, withholding statement, document, authorisation or waiver it receives from a Lender pursuant to paragraph (e) above to the relevant Borrower. |
(g) | If any withholding certificate, withholding statement, document, authorisation or waiver provided to the Agent by a Lender pursuant to paragraph (e) above is or becomes materially inaccurate or incomplete, that Lender shall promptly update it and provide such updated withholding certificate, withholding statement, document, authorisation or waiver to the Agent unless it is unlawful for the Lender to do so (in which case the Lender shall promptly notify the Agent). The Agent shall provide any such updated withholding certificate, withholding statement, document, authorisation or waiver to the relevant Borrower. |
(h) | The Agent may rely on any withholding certificate, withholding statement, document, authorisation or waiver it receives from a Lender pursuant to paragraph (e) or (g) above without further verification. The Agent shall not be liable for any action taken by it under or in connection with paragraph (e), (f) or (g) above. |
22.7 | FATCA Deduction |
(a) | Each Party may make any FATCA Deduction it is required to make by FATCA, and any payment required in connection with that FATCA Deduction, and no Party shall be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction. |
(b) | Each Party shall promptly, upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate or the basis of such FATCA Deduction), notify the Party to whom it is making the payment and, in addition, shall notify the Borrowers and the Agent and the Agent shall notify the other Creditor Parties. |
23 | ILLEGALITY, ETC. |
23.1 | 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, |
23.2 | Notification of illegality |
23.3 | Prepayment; termination of Commitment |
23.4 | Mitigation |
(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 |
(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; or |
(c) | complying with any regulation (including the "International Convergence of Capital Measurement and Capital Standards, a Revised Framework" published by the Basel |
(d) | the introduction, implementation, application, administration or compliance with Basel III, or any law or regulation which implements or applies Basel Ill (regardless of the date on which it is enacted, adopted or issued and regardless of whether any such implementation, application or compliance is by a government, regulator, the Finance Party or any of its affiliates) after the date of this Agreement, |
24.2 | Meaning of "increased costs" |
(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 |
24.4 | Payment of increased costs |
24.5 | Notice of prepayment |
24.6 | Prepayment; termination of Commitment |
(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 and the Mandatory Cost (if any). |
24.7 | Application of prepayment |
25 | SET OFF |
25.1 | Application of credit balances |
(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 |
25.3 | Sums deemed due to a Lender |
25.4 | No Security Interest |
26 | TRANSFERS AND CHANGES IN LENDING OFFICES |
26.1 | Transfer by Borrowers |
26.2 | Transfer by a Lender |
(a) | its rights in respect of all or part of its Contribution; or |
(b) | its obligations in respect of all or part of its Commitment; or |
(c) | a combination of (a) and (b), |
(i) | without the consent of the Borrowers: |
(A) | following the occurrence of an Event of Default which is continuing; and/or |
(B) | if such transfer is to another Lender or an affiliate of a Lender; |
(ii) | in all other circumstances with the consent of the Borrowers (such consent not to be unreasonably withheld or delayed) and the Borrowers will be deemed to have given its consent 5 Business Days following the request of the Transferor Lender unless the consent is expressly refused by the Borrowers within that time. |
26.3 | Transfer Certificate, delivery and notification |
(a) | sign the Transfer Certificate on behalf of itself, the Borrowers, the Security Parties, the Security Trustee, each of the other Lenders and the Swap Bank; |
(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 |
26.5 | No transfer without Transfer Certificate |
26.6 | Lender re-organisation; waiver of Transfer Certificate |
26.7 | Effect of Transfer Certificate |
(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 loss incurred by it as a result of the breach or misrepresentation, irrespective of whether the original Lender would have incurred a loss of that kind or amount. |
26.8 | Maintenance of register of Lenders |
26.9 | Reliance on register of Lenders |
26.10 | Authorisation of Agent to sign Transfer Certificates |
26.11 | Registration fee |
26.12 | Sub-participation; subrogation assignment |
26.13 | Disclosure of information |
26.14 | Change of lending office |
(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 |
26.16 | Replacement of the Reference Bank |
26.17 | Security over Lenders' rights |
(a) | any charge, assignment or other Security Interest to secure obligations to a federal reserve or central bank; and |
(b) | in the case of any Lender which is a fund, any charge, assignment or other Security Interest granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by that Lender as security for those obligations or securities, |
(i) | release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or Security Interest for the Lender as a party to any of the Finance Documents; or |
(ii) | require any payments to be made by any Borrower or any Security Party or grant to any person any more extensive rights than those required to be made or granted to the relevant Lender under the Finance Documents. |
27 | VARIATIONS AND WAIVERS |
27.1 | Variations , waivers etc. by Majority Lenders |
27.2 | Variations, waivers etc. requiring agreement of all Lenders. |
(a) | a reduction in the Margin; |
(b) | a postponement to the date for, or a reduction in the amount of, any payment of principal, interest, fees or other sum payable under this Agreement; |
(c) | an increase in any Lender's Commitment; |
(d) | a change to the definition of " Majority Lenders "; |
(e) | a change to Clause 3 or this Clause 27; |
(f) | any release of, or material variation to, a Security Interest, guarantee, indemnity or subordination arrangement set out in a Finance Document; and |
(g) | any other change or matter as regards which this Agreement or another Finance Document expressly provides that each Lender's consent is required. |
27.3 | Exclusion of other or implied variations |
(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, |
28 | NOTICES |
28.1 | General |
28.2 | Addresses for communications |
28.3 | Effective date of notices |
(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 |
(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 |
28.6 | Valid notices |
(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 |
(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 |
28.9 | Meaning of "notice" |
29 | JOINT AND SEVERAL LIABILITY |
29.1 | General |
29.2 | No impairment of Borrower's obligations |
(a) | this Agreement being or later becoming void, unenforceable or illegal as regards any other Borrower; |
(b) | any Lender, the Swap Bank or the Security Trustee entering into any rescheduling, refinancing or other arrangement of any kind with any other Borrower; |
(c) | any Lender, the Swap Bank 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 |
29.4 | Subordination |
(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 |
30 | SUPPLEMENTAL |
30.1 | Rights cumulative, non-exclusive |
(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 |
30.3 | Counterparts |
30.4 | Third Party rights |
31 | LAW AND JURISDICTION |
31.1 | English law |
31.2 | Exclusive English jurisdiction |
31.3 | Choice of forum for the exclusive benefit of Creditor Parties |
(a) | to commence proceedings in relation to any Dispute in the courts of any country other than England and which have or claim jurisdiction to that Dispute; and |
(b) | to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in England or without commencing proceedings in England. |
31.4 | Process agent |
31.5 | Creditor Party rights unaffected |
31.6 | Meaning of "proceedings" and "Dispute" |
Lender
|
Lending Office
|
Commitment
|
(US Dollars)
|
||
Nordea Bank AB,
London Branch
London EC2V 5NB
England
|
City Place House
55 Basinghall Street
|
110,000,000
|
To:
|
Nordea Bank AB, London Branch
City Place House 55 Basinghall Street London EC2V 5NB England |
|
Attention: [Loans Administration]
|
[•] 2015
|
1 | We refer to the loan agreement (the " Loan Agreement ") dated [•] 2015 and made between ourselves, as joint and several Borrowers, the Lenders referred to therein, and yourselves as Agent, as Security Trustee, as Lead Arranger and as Swap Bank in connection with a facility of up to US$110,000,000. Terms defined in the Loan Agreement have their defined meanings when used in this Drawdown Notice. |
2 | We request to borrow as follows: |
(a) | Amount of Loan: US$110,000,000; |
(b) | Drawdown Date: [•] 2015; |
(c) | [Duration of the first Interest Period shall be [1][3] months;] and |
(d) | Payment instructions: account in our name and numbered [•] with [•] of [•]. |
3 | We represent and warrant that: |
(a) | the representations and warranties in Clause 10 of the Loan Agreement would remain true and not misleading if repeated on the date of this notice with reference to the circumstances now existing; and |
(b) | no Event of Default or Potential Event of Default has occurred or will result from the borrowing of the Loan. |
4 | This notice cannot be revoked without the prior consent of the Majority Lenders. |
1 | A duly executed original of: |
(a) | this Agreement; |
(b) | the Corporate Guarantee; |
(c) | the Agency and Trust Deed; |
(d) | the Master Agreement; |
(e) | the Shares Pledges; |
(f) | the Master Agreement Assignment; and |
(g) | the Accounts Pledges. |
2 | Copies of the certificate of incorporation and constitutional documents of each Borrower, the Corporate Guarantor and any other Security Party. |
3 | Copies of resolutions of the shareholders and directors of each Borrower and each Security Party (other than the Corporate Guarantor) authorising the execution of each of the Finance Documents to which that Borrower or that Security Party is a party and, in the case of a Borrower, authorising named officers to give the Drawdown Notice. |
4 | Copies of resolutions of the executive committee of the Corporate Guarantor authorising the execution of each of the Finance Documents to which it is a party. |
5 | The original of any power of attorney under which any Finance Document is executed on behalf of a Borrower, the Corporate Guarantor or any other Security Party. |
6 | Copies of all consents which any Borrower, the Corporate Guarantor or any Security Party requires to enter into, or make any payment under, any Finance Document. |
7 | The originals of any mandates or other documents required in connection with the opening or operation of the Earnings Accounts. |
8 | Such documents as the Agent may require for its "Know your customer" and other customary money laundering and sanctions and counter-terrorist financing checks. |
9 | Copy of each Initial Charter and of all documents signed or issued by the relevant Borrower or the Initial Charterer (or any of them) under or in connection with it. |
10 | Documentary evidence that the agent for service of process named in Clause 30 has accepted its appointment. |
11 | Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of Marshall Islands and such other relevant jurisdictions as the Agent may require. |
12 | 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. |
(a) | " Relevant Borrower " means the Borrower which is the owner of the Relevant Ship; and |
(b) | " Relevant Ship " means the Ship which is to be financed by using the proceeds of the Loan being drawn on the Drawdown Date. |
1 | A duly executed original of the Mortgage and the General Assignment relating to the Relevant Ship and the Initial Charter Assignment. |
2 | Documentary evidence that: |
(a) | the Relevant Ship is definitively and permanently registered in the name of the Relevant Borrower under an Approved Flag; |
(b) | the Relevant Ship is in the absolute and unencumbered ownership of the Relevant Borrower save as contemplated by the Finance Documents; |
(c) | the Relevant Ship maintains the class specified in Clause 14.3(b); |
(d) | the Mortgage relating to the Relevant Ship has been duly registered or recorded against the Relevant Ship as a valid first priority or, as the case may be, preferred statutory ship mortgage in accordance with the laws of the applicable Approved Flag State; and |
(e) | the Relevant Ship is insured in accordance with the provisions of this Agreement and all requirements therein in respect of insurances have been complied with. |
3 | Documents establishing that the Relevant Ship will, as from the Drawdown Date, be managed by the Approved Manager on terms acceptable to the Lenders, together with: |
(a) | a copy of the Management Agreement and the Manager's Undertaking duly signed by the Approved Manager; and |
(b) | copies of the Approved Manager's Document of Compliance and of the Relevant Ship's Safety Management Certificate (together with any other details of the applicable safety management system which the Agent requires) and ISSC. |
4 | Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of Marshall Islands, the Approved Flag State and such other relevant jurisdictions as the Agent may require. |
5 | At the cost of the Borrowers a favourable opinion from an independent insurance consultant acceptable to the Agent on such matters relating to the insurances for the Ship as the Agent may require. |
6 | Two valuations of each Ship addressed to the Agent and dated not earlier than 14 days before the Drawdown Date and prepared in accordance with Clause 15.3 by two Approved Brokers (each selected by the Borrowers and approved by the Agent) which evidences compliance with Clause 15.1 immediately after the Drawdown Date. |
7 | Evidence satisfactory to the Agent that any Existing Indebtedness is repaid in full and each of 1emo, Guam, Palau and Mandaringina is released from all its obligations and liabilities under the Previous Loan Agreements to which each is a party. |
8 | 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 | This Certificate relates to a Loan Agreement (the " Agreement ") dated [•] March 2015 and made between (1) Knox Shipping Company Inc., Bokak Shipping Company Inc., Jemo Shipping Company Inc., Guam Shipping Company Inc., Palau Shipping Company Inc., Makur Shipping Company Inc., Mandaringina Inc. and Vest Commercial S.A. as joint and several borrowers (the " Borrowers "), (2) the banks and financial institutions named therein, (3) Nordea Bank AB, London Branch as Agent, (4) Nordea Bank AB, London Branch as Security Trustee, (5) Nordea Bank AB, London Branch as Lead Arranger and (6) Nordea Bank Finland plc as Swap Bank for a loan facility of up to US$110,000,000. |
2 | In this Certificate, terms defined in the Agreement shall, unless the contrary intention appears, have the same meanings when used in this Certificate and: |
3 | The effective date of this Certificate is [•], 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 Agreement and every other Finance Document in relation to [•] per cent. of its Contribution, which percentage represents $[•].] |
5 |
[By virtue of this Transfer Certificate and Clause 26 of the Loan Agreement, the Transferor is discharged [entirely from its Commitment which amounts to $[•] [from [•] per cent. of its Commitment, which percentage represents $
[•]] and the Transferee acquires a Commitment of $[•].]
|
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 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 required in connection with this transaction; and |
(ii) | this Certificate is valid and binding as regards the Transferor; |
(b) | warrants to the Transferee that the Transferor is absolutely entitled, free of encumbrances, to all the rights and interests covered by the assignment in paragraph 4; and |
(c) | undertakes with the Transferee that the Transferor will, at its own expense, execute any documents which the Transferee reasonably requests for perfecting in any relevant jurisdiction the Transferee's title under this Certificate or for a similar purpose. |
9 | The Transferee: |
(a) | confirms that it has received a copy of the 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 the 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; and |
(iii) | it proves impossible to realise any asset covered by a Security Interest created by a Finance Document, or the proceeds of such assets are insufficient to discharge the liabilities of the Borrowers or any Security Party under any of 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 the 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 9 as exceeds one-half of the amount demanded by the Agent or the Security Trustee in respect of a claim, proceeding, liability or expense which was not reasonably foreseeable at the date of this Certificate; but nothing in this paragraph shall affect the liability of each of the Transferor and the Transferee to the Agent or the Security Trustee for the full amount demanded by it. |
[Name of Transferor]
|
[Name of Transferee]
|
By:
|
By:
|
Date:
|
Date:
|
Agent
|
|
Signed for itself and for and on behalf of itself as Agent and for every other Relevant Party [Name of Agent]
|
|
By:
|
|
Date:
|
[•]
|
1 | The Loan Agreement; |
2 | the Master Agreement dated [•] 2015 made between ourselves and the Swap Bank; and |
3 | a Confirmation delivered pursuant to the said Master Agreement dated [•] and addressed by [S] to us. |
4 | The Mandatory Cost is an addition to the interest rate to compensate Lenders for the cost of compliance with (a) the requirements of the Financial Services Authority (or any other authority which replaces all or any of its functions) or (b) the requirements of the European Central Bank. |
5 | On the first day of each Interest Period (or as soon as possible thereafter) the Agent shall calculate, as a percentage rate, a rate (the "Additional Cost Rate") for each Lender, in accordance with the paragraphs set out below. The Mandatory Cost will be calculated by the Agent as a weighted average of the Lenders' Additional Cost Rates (weighted in proportion to the percentage participation of each Lender in the Loan) and will be expressed as a percentage rate per annum. |
6 | The Additional Cost Rate for any Lender lending from a lending office in a Participating Member State will be the percentage notified by that Lender to the Agent. This percentage will be certified by that Lender in its notice to the Agent to be its reasonable determination of the cost (expressed as a percentage of that Lender's participation in the Loan made from that lending office) of complying with the minimum reserve requirements of the European Central Bank in respect of loans made from that lending office. |
7 | The Additional Cost Rate for any Lender lending from a lending office in the United Kingdom will be calculated by the Agent as follows: |
E x 0.01
|
per cent. per annum
|
||
300
|
E | is designed to compensate Lenders for amounts payable under the Fees Rules and is calculated by the Agent as being the average of the most recent rates of charge supplied by the Reference Bank to the Agent pursuant to paragraph 6 below and expressed in pounds per £1,000,000. |
8 | For the purposes of this Schedule: |
(a) | " Eligible Liabilities " and "Special Deposits" have the meanings given to them from time to time under or pursuant to the Bank of England Act 1998 or (as may be appropriate) by the Bank of England; |
(b) | " Fees Rules " means the rules on periodic fees contained in the FSA Supervision Manual or such other law or regulation as may be in force from time to time in respect of the payment of fees for the acceptance of deposits; |
(c) | " Fee Tariffs " means the fee tariffs specified in the Fees Rules under the activity group A.1 Deposit acceptors (ignoring any minimum fee or zero rated fee required pursuant to the Fees Rules but taking into account any applicable discount rate); |
(d) | " Participating Member State " means any member state of the European Union that adopts or has adopted the euro as its lawful currency in accordance with legislation of the European Union relating to European Monetary Union; and |
(e) | " Tariff Base " has the meaning given to it in, and will be calculated in accordance with, the Fees Rules. |
9 | If requested by the Agent, the Reference Bank shall, as soon as practicable after publication by the Financial Services Authority, supply to the Agent, the rate of charge payable by the Reference Bank to the Financial Services Authority pursuant to the Fees Rules in respect of the relevant financial year of the Financial Services Authority (calculated for this purpose by the Reference Bank as being the average of the Fee Tariffs applicable to the Reference Bank for that financial year) and expressed in pounds per £1,000,000 of the Tariff Base of the Reference Bank. |
10 | Each Lender shall supply any information required by the Agent for the purpose of calculating its Additional Cost Rate. In particular, but without limitation, each Lender shall supply the following information in writing on or prior to the date on which it becomes a Lender: |
(a) | the jurisdiction of its lending office; and |
(b) | any other information that the Agent may reasonably require for such purpose. |
11 | The rates of charge of the Reference Bank for the purpose of E above shall be determined by the Agent based upon the information supplied to it pursuant to paragraph 6 above and on the assumption that, unless a Lender notifies the Agent to the contrary, each Lender's obligations in relation to cash ratio deposits and special Deposits are the same as those of a typical bank from its jurisdiction of incorporation with a lending office in the same jurisdiction as its lending office. |
12 | The Agent shall have no liability to any person if such determination results in an Additional Cost Rate which over or under compensates any Lender and shall be entitled to assume that the information provided by any Lender or the Reference Bank pursuant to paragraphs 3, 6 and 7 above is true and correct in all respects. |
13 | The Agent shall distribute the additional amounts received as a result of the Mandatory Cost to the Lenders on the basis of the Additional Cost Rate for each Lender based on the information provided by each Lender and the Reference Bank pursuant to paragraphs 3, 6 and 7 above. |
14 | Any determination by the Agent pursuant to this Schedule in relation to a formula, the Mandatory Cost, an Additional Cost Rate or any amount payable to a Lender shall, in the absence of manifest error, be conclusive and binding on all parties. |
15 | The Agent may from time to time, after consultation with the Borrowers and the Lenders, determine and notify to all parties any amendments which are required to be made to this Schedule in order to comply with any change in law, regulation or any requirements from time to time imposed by the Financial Services Authority or the European Central Bank (or, in any case, any other authority which replaces all or any of its functions) and any such determination shall, in the absence of manifest error, be conclusive and binding on all parties. |
THE BORROWERS
|
||
SIGNED by
|
)
|
|
Andreas Nikolaos Michalopoulos
|
)
|
/s/ Andreas Nikolaos Michalopoulos
|
for and on behalf of
|
)
|
|
KNOX SHIPPING COMPANY INC.
|
)
|
|
in the presence of:
|
)
|
|
Nadine Akleh
|
)
|
/s/ Nadine Akleh
|
SOLICITOR
|
)
|
|
WATSON FARLEY & WILLIAMS
|
)
|
|
348 SYNGROU AVENUE
|
)
|
|
176 74 KALLITHEA
|
)
|
|
ATHENS – GREECE
|
)
|
|
SIGNED by
|
)
|
|
Andreas Nikolaos Michalopoulos
|
)
|
/s/ Andreas Nikolaos Michalopoulos
|
for and on behalf of
|
)
|
|
BOKAK SHIPPING COMPANY INC.
|
)
|
|
in the presence of:
|
)
|
|
Nadine Akleh
|
)
|
/s/ Nadine Akleh
|
SOLICITOR
|
)
|
|
WATSON FARLEY & WILLIAMS
|
)
|
|
348 SYNGROU AVENUE
|
)
|
|
176 74 KALLITHEA
|
)
|
|
ATHENS – GREECE
|
)
|
|
SIGNED by
|
)
|
|
Andreas Nikolaos Michalopoulos
|
)
|
/s/ Andreas Nikolaos Michalopoulos
|
for and on behalf of
|
)
|
|
JEMO SHIPPING COMPANY INC.
|
)
|
|
in the presence of:
|
)
|
|
Nadine Akleh
|
)
|
/s/ Nadine Akleh
|
SOLICITOR
|
)
|
|
WATSON FARLEY & WILLIAMS
|
)
|
|
348 SYNGROU AVENUE
|
)
|
|
176 74 KALLITHEA
|
)
|
|
ATHENS – GREECE
|
)
|
|
SIGNED by
|
)
|
|
Andreas Nicolaos Michalopoulos
|
)
|
/s/ Andreas Nicolaos Michalopoulos
|
for and on behalf of
|
)
|
|
GUAM SHIPPING COMPANY INC.
|
)
|
|
in the presence of:
|
)
|
|
Nadine Akleh
|
)
|
/s/ Nadine Akleh
|
SOLICITOR
|
)
|
|
WATSON FARLEY & WILLIAMS
|
)
|
|
348 SYNGROU AVENUE
|
)
|
|
176 74 KALLITHEA
|
)
|
|
ATHENS – GREECE
|
)
|
SIGNED by
|
)
|
|
Andreas Nikolaos Michalopoulos
|
)
|
/s/ Andreas Nikolaos Michalopoulos
|
for and on behalf of
|
)
|
|
PALAU SHIPPING COMPANY INC.
|
)
|
|
in the presence of:
|
)
|
|
Nadine Akleh
|
)
|
/s/ Nadine Akleh
|
SOLICITOR
|
)
|
|
WATSON FARLEY & WILLIAMS
|
)
|
|
348 SYNGROU AVENUE
|
)
|
|
176 74 KALLITHEA
|
)
|
|
ATHENS – GREECE
|
SIGNED by
|
)
|
|
Andreas Nikolaos Michalopoulos
|
)
|
/s/ Andreas Nikolaos Michalopoulos
|
for and on behalf of
|
)
|
|
MAKUR SHIPPING COMPANY INC.
|
)
|
|
in the presence of:
|
)
|
|
Nadine Akleh
|
)
|
/s/ Nadine Akleh
|
SOLICITOR
|
)
|
|
WATSON FARLEY & WILLIAMS
|
)
|
|
348 SYNGROU AVENUE
|
)
|
|
176 74 KALLITHEA
|
)
|
|
ATHENS – GREECE
|
)
|
|
SIGNED by
|
)
|
|
Andreas Nicolaos Michalopoulos
|
)
|
/s/ Andreas Nicolaos Michalopoulos
|
for and on behalf of
|
)
|
|
MANDARINGINA INC.
|
)
|
|
in the presence of:
|
)
|
|
Nadine Akleh
|
)
|
/s/ Nadine Akleh
|
SOLICITOR
|
)
|
|
WATSON FARLEY & WILLIAMS
|
)
|
|
348 SYNGROU AVENUE
|
)
|
|
176 74 KALLITHEA
|
)
|
|
ATHENS – GREECE
|
)
|
(c)
|
be sent:
|
|
(i) If to the Company, to:
|
||
c/o Diana Shipping Services S.A.
Pendelis 16, Palaio Faliro, 175 64 Athens, Greece Telephone: +30 210 9470000 Telefax: +30 210 9424975 Attn: Director and President |
||
(ii) If to the Broker, to:
|
||
c/o Diana Enterprises Inc.
Pendelis 26, Palaio Faliro, 175 64 Athens, Greece Telephone: +30 210 9470150 Telefax: +30 210 9470151 Attn: Director and President |
and year first above written.
|
|
DIANA SHIPPING INC.
|
|
/s/ Simeon Palios
|
|
By: Simeon Palios
|
|
Title: Director, Chief Executive Officer and Chairman of the Board
|
|
DIANA ENTERPRISES INC.
|
|
/s/ Andreas Nikolaos Michalopoulos
|
|
By: Andreas Nikolaos Michalopoulos
|
|
Title: Director and Secretary
|
|
Subsidiary
|
Country of Incorporation
|
Ailuk Shipping Company Inc.
|
Marshall Islands
|
Bikar Shipping Company Inc.
|
Marshall Islands
|
Bikini Shipping Company Inc.
|
Marshall Islands
|
Erikub Shipping Company Inc.
|
Marshall Islands
|
Gala Properties Inc.
|
Marshall Islands
|
Guam Shipping Company Inc.
|
Marshall Islands
|
Jaluit Shipping Company Inc.
|
Marshall Islands
|
Jemo Shipping Company Inc.
|
Marshall Islands
|
Kili Shipping Company Inc.
|
Marshall Islands
|
Knox Shipping Company Inc.
|
Marshall Islands
|
Lae Shipping Company Inc.
|
Marshall Islands
|
Lib Shipping Company Inc.
|
Marshall Islands
|
Mandaringina Inc.
|
Marshall Islands
|
Majuro Shipping Company Inc.
|
Marshall Islands
|
Namu Shipping Company Inc.
|
Marshall Islands
|
Palau Shipping Company Inc.
|
Marshall Islands
|
Taka Shipping Company Inc.
|
Marshall Islands
|
Tuvalu Shipping Company Inc.
|
Marshall Islands
|
Wotho Shipping Company Inc.
|
Marshall Islands
|
Aster Shipping Company Inc.
|
Marshall Islands
|
Aerik Shipping Company Inc.
|
Marshall Islands
|
Pulap Shipping Company Inc.
|
Marshall Islands
|
Bokak Shipping Company Inc.
|
Marshall Islands
|
Makur Shipping Company Inc.
|
Marshall Islands
|
Jabat Shipping Company Inc.
|
Marshall Islands
|
Fayo Shipping Company Inc.
|
Marshall Islands
|
Weno Shipping Company Inc.
|
Marshall Islands
|
Lelu Shipping Company Inc.
|
Marshall Islands
|
Houk Shipping Company Inc.
|
Marshall Islands
|
Husky Trading, S.A.
|
Panama
|
Buenos Aires Compania Armadora S.A.
|
Panama
|
Changame Compania Armadora S.A.
|
Panama
|
Chorrera Compania Armadora S.A.
|
Panama
|
Cypres Enterprises Corp.
|
Panama
|
Darien Compania Armadora S.A.
|
Panama
|
Diana Shipping Services S.A.
|
Panama
|
Eaton Marine S.A.
|
Panama
|
Panama Compania Armadora S.A.
|
Panama
|
Skyvan Shipping Company S.A.
|
Panama
|
Texford Maritime S.A.
|
Panama
|
Urbina Bay Trading, S.A.
|
Panama
|
Vesta Commercial, S.A.
|
Panama
|
Marfort Navigation Company Limited
|
Cyprus
|
Silver Chandra Shipping Company Limited
|
Cyprus
|
Bulk Carriers (USA) LLC
|
United States (Delaware)
|
1. | I have reviewed this annual report on Form 20-F of Diana Shipping Inc. (the "Company"); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report; |
4. | The Company's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and |
5. | The Company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company's auditors and the audit committee of the Company's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting. |
1. | I have reviewed this annual report on Form 20-F of Diana Shipping Inc. (the "Company"); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report; |
4. | The Company's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and |
5. | The Company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company's auditors and the audit committee of the Company's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting. |
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. |
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. |