☐ |
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF1934
|
☒ |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
____________to____________
|
☐ |
SHELL COMPANY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Title of each class
|
Name of each exchange on which registered
|
Common Stock, $0.01 par value
|
New York Stock Exchange
|
Preferred Stock Purchase Rights
|
New York Stock Exchange
|
8.875% Series B Cumulative Redeemable Perpetual Preferred Shares, $0.01 par value
|
New York Stock Exchange
|
8.500% Senior Notes due 2020
|
New York Stock Exchange
|
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 ☐
|
|||
If "Other" has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.
|
☐ |
Item 17
|
☐ |
Item 18
|
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
|
☐ |
Yes
|
☒ |
No
|
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
|
☐ |
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
|
36
|
Item 4A.
|
Unresolved Staff Comments
|
60
|
Item 5.
|
Operating and Financial Review and Prospects
|
60
|
Item 6.
|
Directors, Senior Management and Employees
|
81
|
Item 7.
|
Major Shareholders and Related Party Transactions
|
86
|
Item 8.
|
Financial Information
|
89
|
Item 9.
|
The Offer and Listing
|
90
|
Item 10.
|
Additional Information
|
91
|
Item 11.
|
Quantitative and Qualitative Disclosures about Market Risk
|
101
|
Item 12.
|
Description of Securities Other than Equity Securities
|
101
|
PART II
|
||
Item 13.
|
Defaults, Dividend Arrearages and Delinquencies
|
102
|
Item 14.
|
Material Modifications to the Rights of Security Holders and Use of Proceeds
|
102
|
Item 15.
|
Controls and Procedures
|
102
|
Item 16A.
|
Audit Committee Financial Expert
|
103
|
Item 16B.
|
Code of Ethics
|
103
|
Item 16C.
|
Principal Accountant Fees and Services
|
103
|
Item 16D.
|
Exemptions from the Listing Standards for Audit Committees
|
104
|
Item 16E.
|
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
|
104
|
Item 16F.
|
Change in Registrant's Certifying Accountant
|
105
|
Item 16G.
|
Corporate Governance
|
105
|
Item 16H. |
Mine Safety Disclosure
|
105 |
|
|
|
PART III
|
||
Item 17.
|
Financial Statements
|
106
|
Item 18.
|
Financial Statements
|
106
|
Item 19.
|
Exhibits
|
106
|
Item 1. | Identity of Directors, Senior Management and Advisers |
Item 2. | Offer Statistics and Expected Timetable |
Item 3. | Key Information |
A. | Selected Financial Data |
As of and for the
|
||||||||||||||||||||
Year Ended December 31,
|
||||||||||||||||||||
2015
|
2014
|
2013
|
2012
|
2011
|
||||||||||||||||
(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
|
$
|
157,712
|
$
|
175,576
|
$
|
164,005
|
$
|
220,785
|
$
|
255,669
|
||||||||||
Other revenues
|
-
|
-
|
447
|
2,447
|
1,117
|
|||||||||||||||
Voyage expenses
|
15,528
|
10,665
|
8,119
|
8,274
|
10,597
|
|||||||||||||||
Vessel operating expenses
|
88,272
|
86,923
|
77,211
|
66,293
|
55,375
|
|||||||||||||||
Depreciation and amortization of deferred charges
|
76,333
|
70,503
|
64,741
|
62,010
|
55,278
|
|||||||||||||||
General and administrative expenses
|
25,335
|
26,217
|
23,724
|
24,913
|
25,123
|
|||||||||||||||
Management fees to related party
|
405
|
-
|
-
|
-
|
-
|
|||||||||||||||
Foreign currency gain
|
(984
|
)
|
(528
|
)
|
(690
|
)
|
(1,374
|
)
|
(503
|
)
|
||||||||||
Operating income / (loss)
|
(47,177
|
)
|
(18,204
|
)
|
(8,653
|
)
|
63,116
|
110,916
|
||||||||||||
Interest and finance costs
|
(15,555
|
)
|
(8,427
|
)
|
(8,140
|
)
|
(7,618
|
)
|
(4,924
|
)
|
||||||||||
Interest and other income
|
3,152
|
3,627
|
1,800
|
1,432
|
1,033
|
As of and for the
|
||||||||||||||||||||
Year Ended December 31,
|
||||||||||||||||||||
2015
|
2014
|
2013
|
2012
|
2011
|
||||||||||||||||
(in thousands of U.S. dollars,
|
||||||||||||||||||||
except for share and per share data, fleet data and average daily results)
|
||||||||||||||||||||
Income / (loss) from derivative instruments
|
-
|
68
|
(118
|
)
|
(518
|
)
|
(737
|
)
|
||||||||||||
Income / (loss) from equity method investments
|
(5,133
|
)
|
12,668
|
(6,094
|
)
|
(1,773
|
)
|
1,207
|
||||||||||||
Net income / (loss)
|
$
|
(64,713
|
)
|
$
|
(10,268
|
)
|
$
|
(21,205
|
)
|
$
|
54,639
|
$
|
107,495
|
|||||||
Loss assumed by non-controlling interests
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
2
|
||||||||||
Dividends on series B preferred shares
|
$
|
(5,769
|
)
|
$
|
(5,080
|
)
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
Net income / (loss) attributed to common stockholders
|
$
|
(70,482
|
)
|
$
|
(15,348
|
)
|
$
|
(21,205
|
)
|
$
|
54,639
|
$
|
107,497
|
|||||||
Earnings / (loss) per common share, basic and diluted
|
$
|
(0.89
|
)
|
$
|
(0.19
|
)
|
$
|
(0.26
|
)
|
$
|
0.67
|
$
|
1.33
|
|||||||
Weighted average number of common shares, basic and diluted
|
79,518,009
|
81,292,290
|
81,328,390
|
81,083,485
|
81,081,774
|
Balance Sheet Data:
|
||||||||||||||||||||
Cash and cash equivalents
|
$
|
193,218
|
$
|
218,901
|
$
|
240,633
|
$
|
446,624
|
$
|
416,674
|
||||||||||
Total current assets
|
215,013
|
238,234
|
251,868
|
466,986
|
432,691
|
|||||||||||||||
Vessels' net book value
|
1,440,803
|
1,373,133
|
1,320,375
|
1,211,138
|
1,046,719
|
|||||||||||||||
Property and equipment, net
|
23,489
|
23,887
|
22,826
|
22,774
|
21,659
|
|||||||||||||||
Total assets
|
1,836,965
|
1,787,122
|
1,701,981
|
1,742,802
|
1,604,471
|
|||||||||||||||
Total current liabilities
|
58,889
|
98,092
|
62,297
|
61,477
|
48,095
|
|||||||||||||||
Long-term debt (including current portion), net of deferred financing costs
|
600,071
|
484,256
|
431,557
|
459,112
|
373,338
|
|||||||||||||||
Total stockholders' equity
|
1,218,366
|
1,282,226
|
1,253,392
|
1,266,424
|
1,208,878
|
Cash Flow Data:
|
||||||||||||||||||||
Net cash provided by operating activities
|
$
|
23,945
|
$
|
44,910
|
$
|
67,400
|
$
|
119,886
|
$
|
154,230
|
||||||||||
Net cash used in investing activities
|
(155,637
|
)
|
(152,513
|
)
|
(245,156
|
)
|
(169,913
|
)
|
(90,428
|
)
|
||||||||||
Net cash provided by / (used in) financing activities
|
106,009
|
85,871
|
(28,235
|
)
|
79,977
|
7,458
|
Fleet Data:
|
||||||||||||||||||||
Average number of vessels (1)
|
40.8
|
37.9
|
33.0
|
27.6
|
23.6
|
|||||||||||||||
Number of vessels at year-end
|
43.0
|
39.0
|
36.0
|
30.0
|
24.0
|
|||||||||||||||
Weighted average age of vessels at year-end (in years)
|
7.4
|
7.1
|
6.6
|
6.0
|
6.3
|
As of and for the
|
||||||||||||||||||||
Year Ended December 31,
|
||||||||||||||||||||
2015
|
2014
|
2013
|
2012
|
2011
|
||||||||||||||||
Ownership days (2)
|
14,900
|
13,822
|
12,049
|
10,119
|
8,609
|
|||||||||||||||
Available days (3)
|
14,600
|
13,650
|
12,029
|
9,998
|
8,474
|
|||||||||||||||
Operating days (4)
|
14,492
|
13,564
|
11,944
|
9,865
|
8,418
|
|||||||||||||||
Fleet utilization (5)
|
99.3
|
%
|
99.4
|
%
|
99.3
|
%
|
98.7
|
%
|
99.3
|
%
|
Average Daily Results:
|
||||||||||||||||||||
Time charter equivalent (TCE) rate (6)
|
$
|
9,739
|
$
|
12,081
|
$
|
12,959
|
$
|
21,255
|
$
|
28,920
|
||||||||||
Daily vessel operating expenses (7)
|
5,924
|
6,289
|
6,408
|
6,551
|
6,432
|
(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,
|
||||||||||||||||||||
2015
|
2014
|
2013
|
2012
|
2011
|
||||||||||||||||
(in thousands of U.S. dollars, except for TCE rates, which are expressed in U.S. dollars, and available days)
|
||||||||||||||||||||
Time charter revenues
|
$
|
157,712
|
$
|
175,576
|
$
|
164,005
|
$
|
220,785
|
$
|
255,669
|
||||||||||
Less: voyage expenses
|
(15,528
|
)
|
(10,665
|
)
|
(8,119
|
)
|
(8,274
|
)
|
(10,597
|
)
|
||||||||||
Time charter equivalent revenues
|
$
|
142,184
|
$
|
164,911
|
$
|
155,886
|
$
|
212,511
|
$
|
245,072
|
||||||||||
Available days
|
14,600
|
13,650
|
12,029
|
9,998
|
8,474
|
|||||||||||||||
Time charter equivalent (TCE) rate
|
$
|
9,739
|
$
|
12,081
|
$
|
12,959
|
$
|
21,255
|
$
|
28,920
|
(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. |
B. | Capitalization and Indebtedness |
C. | Reasons for the Offer and Use of Proceeds |
D. | Risk Factors |
· | supply and demand for energy resources, commodities, semi-finished and finished consumer and industrial products; |
· | changes in the exploration or production of energy resources, commodities, semi-finished and finished consumer and industrial products; |
· | the location of regional and global exploration, production and manufacturing facilities; |
· | the location of consuming regions for energy resources, commodities, semi-finished and finished consumer and industrial products; |
· | the globalization of production and manufacturing; |
· | global and regional economic and political conditions, including armed conflicts and terrorist activities; embargoes and strikes; |
· | natural disasters and other disruptions in international trade; |
· | developments in international trade; |
· | changes in seaborne and other transportation patterns, including the distance cargo is transported by sea; |
· | environmental and other regulatory developments; |
· | currency exchange rates; and |
· | weather. |
· | the number of newbuilding orders and deliveries, including slippage in deliveries; |
· | the number of shipyards and ability of shipyards to deliver vessels; |
· | port and canal congestion; |
· | the scrapping rate of older vessels; |
· | vessel casualties; and |
· | 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. |
● | seeking to raise additional capital; |
● | refinancing or restructuring our debt; |
● | selling vessels; or |
● | reducing or delaying capital investments. |
Item 4. | Information on the Company |
A. | History and development of the Company |
Vessel
|
Sister Ships*
|
Gross Rate (USD Per Day)
|
Com**
|
Charterers
|
Delivery Date to Charterers***
|
Redelivery Date to Owners****
|
Notes
|
|
BUILT DWT
|
||||||||
23 Panamax Bulk Carriers
|
||||||||
1
|
DANAE
|
A
|
$4,900
|
5.00%
|
Dampskibsselskabet Norden A/S, Copenhagen
|
9-Dec-15
|
9-Nov-16 - 9-Mar-17
|
|
2001 75,106
|
||||||||
2
|
DIONE
|
A
|
$9,250
|
5.00%
|
RWE Supply & Trading GmbH, Essen
|
12-Sep-14
|
8-Jan-16
|
1
|
$4,350
|
5.00%
|
Nidera S.P.A., Roma
|
4-Feb-16
|
20-Jan-17 - 4-May-17
|
||||
2001 75,172
|
||||||||
3
|
NIREFS
|
A
|
$7,500
|
5.00%
|
Glencore Grain B.V., Rotterdam
|
25-Dec-14
|
12-Jan-16
|
|
$4,600
|
5.00%
|
Transgrain Shipping B.V., Rotterdam
|
15-Jan-16
|
15-Dec-16 - 30-Mar-17
|
||||
2001 75,311
|
4
|
ALCYON
|
A
|
$7,600
|
5.00%
|
Transgrain Shipping B.V., Rotterdam
|
22-Aug-15
|
22-Apr-16 - 22-Jul-16
|
|
2001 75,247
|
||||||||
5
|
TRITON
|
A
|
$6,800
|
5.00%
|
Glencore Grain B.V., Rotterdam
|
28-Oct-15
|
13-Sep-16 - 28-Dec-16
|
|
2001 75,336
|
||||||||
6
|
OCEANIS
|
A
|
$7,200
|
5.00%
|
Glencore Grain B.V., Rotterdam
|
11-May-15
|
12-Mar-16
|
2
|
$6,750
|
5.00%
|
Bunge S.A., Geneva
|
12-Apr-16
|
12-Jun-16
|
3,4,5
|
|||
2001 75,211
|
||||||||
7
|
THETIS
|
B
|
$7,000
|
5.00%
|
Dampskibsselskabet Norden A/S, Copenhagen
|
14-Jul-15
|
14-Jun-16 - 14-Sep-16
|
|
2004 73,583
|
||||||||
8
|
PROTEFS
|
B
|
$6,250
|
5.00%
|
Glencore Grain B.V., Rotterdam
|
3-Apr-15
|
18-Feb-16
|
6
|
$4,500
|
5.00%
|
Transgrain Shipping B.V., Rotterdam
|
23-Feb-16
|
8-Feb-17 - 23-Jun-17
|
||||
2004 73,630
|
||||||||
9
|
CALIPSO
|
B
|
$6,000
|
5.00%
|
China Shipping Bulk Carrier Co., Ltd., Hong Kong
|
9-Jun-15
|
9-Apr-16 - 9-May-16
|
7
|
2005 73,691
|
||||||||
10
|
CLIO
|
B
|
$6,500
|
5.00%
|
Transgrain Shipping B.V., Rotterdam
|
4-Aug-15
|
4-May-16 - 4-Aug-16
|
|
2005 73,691
|
||||||||
11
|
NAIAS
|
B
|
$6,800
|
4.75%
|
Cargill International S.A., Geneva
|
12-Jul-15
|
12-May-16 - 12-Aug-16
|
8
|
2006 73,546
|
||||||||
12
|
ARETHUSA
|
B
|
$7,100
|
5.00%
|
Glencore Grain B.V., Rotterdam
|
5-Mar-15
|
5-Apr-16 - 5-May-16
|
7
|
2007 73,593
|
||||||||
13
|
ERATO
|
C
|
$7,100
|
5.00%
|
Glencore Grain B.V., Rotterdam
|
9-Mar-15
|
26-Mar-16
|
|
$4,650
|
5.00%
|
26-Mar-16
|
11-Feb-17 - 26-May-17
|
|||||
2004 74,444
|
||||||||
14
|
CORONIS
|
C
|
$6,500
|
5.00%
|
Sandgate Maritime Ltd
|
3-Jul-15
|
19-Mar-16
|
9
|
$4,750
|
5.00%
|
Narina Maritime Ltd
|
19-Mar-16
|
19-Feb-17 - 19-May-17
|
||||
2006 74,381
|
||||||||
15
|
MELITE
|
D
|
$7,250
|
4.75%
|
Cargill International S.A., Geneva
|
13-Oct-15
|
13-Sep-16 - 13-Dec-16
|
|
2004 76,436
|
||||||||
16
|
MELIA
|
D
|
$7,200
|
5.00%
|
Nidera S.P.A., Roma
|
24-Oct-15
|
24-Nov-16 - 24-Feb-17
|
|
2005 76,225
|
||||||||
17
|
ARTEMIS
|
$7,500
|
5.00%
|
China Shipping Bulk Carrier Co., Ltd., Hong Kong
|
16-Aug-15
|
16-May-16 - 16-Aug-16
|
||
2006 76,942
|
||||||||
18
|
LETO
|
$7,100
|
4.75%
|
Cargill International S.A., Geneva
|
19-Jun-15
|
4-Sep-16 - 3-Jan-17
|
||
2010 81,297
|
19
|
SELINA
|
E
|
$5,800
|
5.00%
|
Dampskibsselskabet Norden A/S, Copenhagen
|
24-Mar-16
|
15-Oct-16 - 15-Feb-17
|
|
2010 75,700
|
||||||||
20
|
MANZONI
|
E
|
-
|
-
|
-
|
-
|
- - -
|
10,11
|
(tbr. MAERA)
|
||||||||
2013 75,403
|
||||||||
21
|
INFINITY 9
|
$7,825
|
5.00%
|
Glencore Grain B.V., Rotterdam
|
21-Mar-16
|
24-Jun-16 - 24-Oct-16
|
||
(tbr. ISMENE)
|
||||||||
2013 77,901
|
||||||||
22
|
CRYSTALIA
|
F
|
$9,000
|
5.00%
|
Glencore Grain B.V., Rotterdam
|
29-Aug-15
|
29-Jun-16 - 29-Sep-16
|
|
2014 77,525
|
||||||||
23
|
ATALANDI
|
F
|
$8,000
|
5.00%
|
Glencore Grain B.V., Rotterdam
|
21-May-15
|
21-Mar-16
|
|
$5,300
|
5.00%
|
26-Mar-16
|
26-Nov-17 - 26-Apr-18
|
|||||
2014 77,529
|
||||||||
4 Kamsarmax Bulk Carriers
|
||||||||
24
|
MAIA
|
G
|
$7,500
|
5.00%
|
RWE Supply & Trading GmbH, Essen
|
13-Nov-15
|
13-Apr-17 - 13-Jul-17
|
|
2009 82,193
|
||||||||
25
|
MYRSINI
|
G
|
$8,250
|
4.75%
|
Clearlake Shipping Pte. Ltd., Singapore
|
18-Feb-15
|
9-Mar-16
|
12
|
$5,550
|
5.00%
|
RWE Supply & Trading GmbH, Essen
|
9-Mar-16
|
9-Mar-17 - 24-Jun-17
|
||||
2010 82,117
|
||||||||
26
|
MEDUSA
|
G
|
$7,450
|
4.75%
|
Clearlake Shipping Pte. Ltd., Singapore
|
2-Jun-15
|
4-Apr-16
|
7,12
|
2010 82,194
|
||||||||
27
|
MYRTO
|
G
|
$6,000
|
4.75%
|
Cargill International S.A., Geneva
|
24-Dec-15
|
24-Oct-16 - 8-Feb-17
|
|
2013 82,131
|
||||||||
3 Post-Panamax Bulk Carriers
|
||||||||
28
|
ALCMENE
|
$6,750
|
5.00%
|
ADM International Sarl, Rolle, Switzerland
|
13-May-15
|
13-Feb-17 - 2-Jun-17
|
||
2010 93,193
|
||||||||
29
|
AMPHITRITE
|
H
|
$7,700
|
5.00%
|
Bunge S.A., Geneva
|
15-Jul-15
|
30-Apr-17 - 30-Aug-17
|
|
2012 98,697
|
||||||||
30
|
POLYMNIA
|
H
|
$5,650
|
4.75%
|
Cargill International S.A., Geneva
|
15-Dec-15
|
30-Nov-16 - 15-Mar-17
|
|
2012 98,704
|
||||||||
14 Capesize Bulk Carriers
|
||||||||
31
|
NORFOLK
|
$10,250
|
4.75%
|
Clearlake Shipping Pte. Ltd., Singapore
|
4-Mar-15
|
28-Mar-16
|
12,13
|
|
$4,350
|
5.00%
|
SwissMarine Services S.A., Geneva
|
28-Mar-16
|
28-Dec-16 - 28-Mar-17
|
||||
2002 164,218
|
||||||||
32
|
ALIKI
|
$26,500
|
5.00%
|
Minmetals Logistics Group Co. Ltd., Beijing
|
1-Mar-11
|
16-Jan-16
|
14
|
|
$5,300
|
5.00%
|
SwissMarine Services S.A., Geneva
|
16-Jan-16
|
16-Dec-16 - 16-Mar-17
|
||||
2005 180,235
|
33
|
BALTIMORE
|
$15,000
|
5.00%
|
RWE Supply & Trading GmbH, Essen
|
8-Jul-13
|
8-Jul-16 - 8-Jan-17
|
||
2005 177,243
|
||||||||
34
|
SALT LAKE CITY
|
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
|
||||||||
35
|
SIDERIS GS
|
I
|
$6,500
|
5.00%
|
Rio Tinto Shipping (Asia) Pte., Ltd., Singapore
|
22-Dec-15
|
22-Jan-17 - 7-Jul-17
|
|
2006 174,186
|
||||||||
36
|
SEMIRIO
|
I
|
$10,000
|
5.00%
|
Rio Tinto Shipping (Asia) Pte., Ltd., Singapore
|
20-Feb-15
|
6-Feb-16
|
15
|
$4,800
|
5.00%
|
SwissMarine Services S.A., Geneva
|
6-Feb-16
|
6-Jan-17 - 6-May-17
|
||||
2007 174,261
|
||||||||
37
|
BOSTON
|
I
|
$13,000
|
4.75%
|
Clearlake Shipping Pte. Ltd., Singapore
|
9-Aug-15
|
25-May-17 - 24-Oct-17
|
12
|
2007 177,828
|
||||||||
38
|
HOUSTON
|
I
|
$12,750
|
5.00%
|
RWE Supply & Trading GmbH, Essen
|
4-Jan-15
|
29-Jan-16
|
|
$5,150
|
5.00%
|
SwissMarine Services S.A., Geneva
|
29-Jan-16
|
29-Dec-16 - 29-Mar-17
|
||||
2009 177,729
|
||||||||
39
|
NEW YORK
|
I
|
$12,850
|
4.75%
|
Clearlake Shipping Pte. Ltd., Singapore
|
17-Dec-14
|
3-Feb-16
|
12,16
|
$5,200
|
5.00%
|
Rio Tinto Shipping (Asia) Pte., Ltd., Singapore
|
3-Feb-16
|
3-Jan-17 - 18-May-17
|
||||
2010 177,773
|
||||||||
40
|
SEATTLE
|
J
|
$7,300
|
4.75%
|
SwissMarine Services S.A., Geneva
|
9-Dec-15
|
25-Oct-16 - 9-Feb-17
|
|
2011 179,362
|
||||||||
41
|
P. S. PALIOS
|
J
|
$13,000
|
5.00%
|
RWE Supply & Trading GmbH, Essen
|
18-Sep-15
|
31-Dec-16 - 31-Mar-17
|
|
2013 179,134
|
||||||||
42
|
G. P. ZAFIRAKIS
|
K
|
$25,250
|
5.00%
|
RWE Supply & Trading GmbH, Essen
|
23-Aug-14
|
14-Feb-16
|
|
$6,500
|
5.00%
|
14-Feb-16
|
14-May-17 - 14-Aug-17
|
|||||
2014 179,492
|
||||||||
43
|
SANTA BARBARA
|
K
|
$7,500
|
5.00%
|
RWE Supply & Trading GmbH, Essen
|
18-Dec-15
|
18-Dec-16 - 18-Mar-17
|
|
2015 179,426
|
||||||||
44
|
NEW ORLEANS
|
$11,650
|
5.00%
|
SwissMarine Services S.A., Geneva
|
11-Nov-15
|
11-Oct-16 - 26-Feb-17
|
||
2015 180,960
|
||||||||
2 Newcastlemax Bulk Carriers
|
||||||||
45
|
LOS ANGELES
|
L
|
$7,750
|
5.00%
|
SwissMarine Services S.A., Geneva
|
9-Dec-15
|
24-Nov-16 - 24-Mar-17
|
|
2012 206,104
|
||||||||
46
|
PHILADELPHIA
|
L
|
$18,000
|
5.00%
|
EDF Trading Limited, UK
|
17-May-12
|
20-Jan-16
|
17
|
$6,450
|
5.00%
|
RWE Supply & Trading GmbH, Essen
|
20-Jan-16
|
20-Dec-16 - 20-Mar-17
|
||||
2012 206,040
|
* 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.
|
*** In case of newly acquired vessel with time charter attached, this date refers to the expected/actual date of delivery of the vessel to the Company.
|
**** Range of redelivery dates, with the actual date of redelivery being at the Charterers' option, but subject to the terms, conditions, and exceptions of the particular charterparty.
|
1 Vessel was on scheduled drydocking from January 8, 2016 to February 4, 2016.
|
2 Currently without an active charterparty.
|
3 Estimated delivery date to the charterers.
|
4 Redelivery date based on an estimated time charter trip duration of about 60 days.
|
5 Charter includes a one time gross ballast bonus payment of US$175,000.
|
6 Glencore Grain B.V., Rotterdam has agreed to compensate the owners for the early redelivery of the vessel until the minimum agreed redelivery date, March 3, 2016.
|
7 Based on latest information.
|
8 During the first quarter of 2016, the vessel was off-hire for drydocking for approximately 24 days.
|
9 Sandgate Maritime Ltd has agreed to compensate the owners for the early redelivery of the vessel until the minimum agreed redelivery date, April 3, 2016.
|
10 Consummation of the purchase is subject to the Company obtaining satisfactory bank financing from the sellers' existing lenders.
|
11 Expected date of delivery to the Company by the end of April 2016.
|
12 Clearlake Shipping Pte. Ltd., Singapore is a member of the Gunvor Group.
|
13 Clearlake Shipping Pte. Ltd., Singapore has agreed to compensate the owners for the early redelivery of the vessel until the minimum agreed redelivery date, April 4, 2016.
|
14 Minmetals Logistics Group Co. Ltd., Beijing has agreed to compensate the owners for the early redelivery of the vessel until the minimum agreed redelivery date, February 1, 2016.
|
15 Rio Tinto Shipping (Asia) Pte., Ltd., Singapore has agreed to compensate the owners for the early redelivery of the vessel until the minimum agreed redelivery date, February 20, 2016.
|
16 Clearlake Shipping Pte. Ltd., Singapore has agreed to compensate the owners for the early redelivery of the vessel until the minimum agreed redelivery date, February 17, 2016.
|
17 As per relevant charterparty, EDF Trading Limited, UK has agreed to pay US$18,000 per day until the minimum agreed redelivery date, January 17, 2016. The gross charter rate was amended to US$8,500 per day until January 20, 2016 (approximately three days).
|
18 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 twelve groups of sister ships including our vessels under construction. 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 have, on average, more than 30 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. |
· | We benefit from the experience and reputation of Diana Shipping Services S.A. and the relationship with Wilhelmsen Ship Management through the Diana Wilhelmsen Management Limited joint venture. |
· | 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. |
C. | Organizational structure |
Item 4A. | Unresolved Staff Comments |
Item 5. | Operating and Financial Review and Prospects |
A. | Operating results |
· | 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,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Ownership days
|
14,900
|
13,822
|
12,049
|
|||||||||
Available days
|
14,600
|
13,650
|
12,029
|
|||||||||
Operating days
|
14,492
|
13,564
|
11,944
|
|||||||||
Fleet utilization
|
99.3
|
%
|
99.4
|
%
|
99.3
|
%
|
||||||
Time charter equivalent (TCE) rate (1)
|
$
|
9,739
|
$
|
12,081
|
$
|
12,959
|
(1) | Please see Item 3.A for a reconciliation of TCE to GAAP measures . |
· | 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. |
Vessel
|
Dwt
|
Year Built
|
Carrying Value
(in millions of US dollars)
|
||
2014
|
2015
|
||||
1
|
Alcmene
|
93,193
|
2010
|
34.5*
|
33.3*
|
2
|
Alcyon
|
75,247
|
2001
|
10.3
|
9.9*
|
3
|
Aliki
|
180,235
|
2005
|
75.1*
|
70.3*
|
4
|
Amphitrite
|
98,697
|
2012
|
23.0
|
22.2*
|
5
|
Arethusa
|
73,593
|
2007
|
25.4*
|
24.5*
|
6
|
Artemis
|
76,942
|
2006
|
19.1*
|
18.4*
|
7
|
Atalandi
|
77,529
|
2014
|
30.6*
|
29.5*
|
8
|
Baltimore
|
177,243
|
2005
|
26.4
|
24.8*
|
9
|
Boston
|
177,828
|
2007
|
80.1*
|
76.0*
|
10
|
Calipso
|
73,691
|
2005
|
13.7
|
13.3*
|
11
|
Clio
|
73,691
|
2005
|
14.1
|
13.3*
|
12
|
Coronis
|
74,381
|
2006
|
27.9*
|
26.6*
|
13
|
Crystalia
|
77,525
|
2014
|
30.3*
|
29.1*
|
14
|
Danae
|
75,106
|
2001
|
12.0*
|
11.6*
|
15
|
Dione
|
75,172
|
2001
|
11.8*
|
11.0*
|
16
|
Erato
|
74,444
|
2004
|
25.4*
|
23.7*
|
17
|
G. P. Zafirakis
|
179,492
|
2014
|
57.6*
|
55.5*
|
18
|
Houston
|
177,729
|
2009
|
51.3*
|
48.8*
|
19
|
Leto
|
81,297
|
2010
|
28.6*
|
27.5*
|
20
|
Los Angeles
|
206,104
|
2012
|
53.7*
|
51.6*
|
21
|
Maia
|
82,193
|
2009
|
19.3
|
18.4*
|
22
|
Medusa
|
82,194
|
2010
|
17.7*
|
|
23
|
Melia
|
76,225
|
2005
|
18.1*
|
17.3*
|
24
|
Melite
|
76,436
|
2004
|
26.8*
|
25.4*
|
25
|
Myrsini
|
82,117
|
2010
|
21.8
|
21.1*
|
26
|
Myrto
|
82,131
|
2013
|
24.9
|
23.9*
|
27
|
Naias
|
73,546
|
2006
|
27.0*
|
25.6*
|
28
|
New Orleans
|
180,960
|
2015
|
43.1*
|
|
29
|
New York
|
177,773
|
2010
|
52.3*
|
49.8*
|
30
|
Nirefs
|
75,311
|
2001
|
10.3
|
9.9*
|
31
|
Norfolk
|
164,218
|
2002
|
89.9*
|
83.1*
|
32
|
Oceanis
|
75,211
|
2001
|
10.5
|
9.9*
|
33
|
Philadelphia
|
206,040
|
2012
|
54.5*
|
52.4*
|
34
|
Polymnia
|
98,704
|
2012
|
22.9
|
22.1*
|
35
|
Protefs
|
73,630
|
2004
|
13.8*
|
12.9*
|
36
|
P. S. Palios
|
179,134
|
2013
|
50.1*
|
48.2*
|
37
|
Salt Lake City
|
171,810
|
2005
|
115.6*
|
109.1*
|
38
|
Santa Barbara
|
179,426
|
2015
|
48.5*
|
|
39
|
Seattle
|
179,362
|
2011
|
29.0
|
|
40
|
Semirio
|
174,261
|
2007
|
69.8*
|
66.2*
|
41
|
Sideris GS
|
174,186
|
2006
|
63.0*
|
59.6*
|
42
|
Thetis
|
73,583
|
2004
|
25.1*
|
23.5*
|
43
|
Triton
|
75,336
|
2001
|
10.5
|
10.1*
|
Total
|
5,012,926
|
1,377.1
|
1,447.7
|
Average estimated daily time charter equivalent rate used
|
Average break even rate
|
|
Panamax/Kamsarmax/Post-Panamax
|
$22,681
|
$11,571
|
Capesize/Newcastlemax
|
$40,815
|
$18,073
|
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
|
$7,492
|
234
|
$9,873
|
234
|
$10,798
|
218
|
Capesize/Newcastlemax
|
$10,049
|
527
|
$15,862
|
482
|
$15,642
|
482
|
B. | Liquidity and Capital Resources |
C. | Research and development, patents and licenses |
D. | Trend information |
E. | Off-balance Sheet Arrangements |
F. | Tabular Disclosure of Contractual Obligations |
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 and Notes (1)
|
$
|
605,941
|
$
|
42,450
|
$
|
99,400
|
$
|
266,762
|
$
|
197,329
|
||||||||||
Estimated Interest Payments on Loan Agreements and Notes (1)
|
79,400
|
19,178
|
$
|
34,688
|
$
|
22,438
|
$
|
3,096
|
||||||||||||
Construction contracts
|
83,487
|
83,487
|
-
|
-
|
-
|
|||||||||||||||
Acquisition of vessels (2)
|
39,265
|
39,265
|
-
|
-
|
-
|
|||||||||||||||
Broker services agreement (3)
|
330
|
330
|
-
|
-
|
-
|
|||||||||||||||
Preferred dividends (4)
|
19,230
|
5,769
|
11,538
|
1,923
|
-
|
|||||||||||||||
Total
|
$
|
827,653
|
$
|
190,479
|
$
|
145,626
|
$
|
291,123
|
$
|
200,425
|
(1) | As of December 31, 2015, we had an aggregate principal amount of $605.9 million of indebtedness outstanding under our loan facilities and our Notes. Estimated interest payments represent projected interest payments on our long term debt, which are based on the weighted average LIBOR rate in 2015 plus the margin of our loan agreements in 2015 and the fixed interest rate of our Notes. |
(2) | We have agreed to acquire three vessels from a related party for an aggregate purchase price of $39.8 million, reduced to $39.3 million on March 4, 2016. We took delivery of two of the vessels in March 2016 for an aggregate purchase price of $25.8 million and we expect to take delivery of the third vessel in April 2016. On March 11, 2016, we signed, through two wholly-owned subsidiaries, a commitment letter with ABN AMRO Bank N.V. for a loan of $25.8 million to finance the acquisition cost of the two vessels delivered to us. The delivery of the third vessel is subject to obtaining bank financing from the sellers' existing lenders, for substantially all of the purchase price of the vessel. |
(3) | Our agreement with Diana Enterprises dated April 1, 2015, expires on March 31, 2016. |
(4) | 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. |
G. | Safe Harbor |
Item 6. | Directors, Senior Management and Employees |
A. | Directors and Senior Management |
Name
|
Age
|
Position
|
||
Simeon Palios
|
74
|
Class I Director, Chief Executive Officer and Chairman
|
||
Anastasios Margaronis
|
60
|
Class I Director and President
|
||
Ioannis Zafirakis
|
44
|
Class I Director, Chief Operating Officer and Secretary
|
||
Andreas Michalopoulos
|
44
|
Chief Financial Officer and Treasurer
|
||
Maria Dede
|
43
|
Chief Accounting Officer
|
||
William (Bill) Lawes
|
72
|
Class II Director
|
||
Konstantinos Psaltis
|
77
|
Class II Director
|
||
Kyriacos Riris
|
66
|
Class II Director
|
||
Boris Nachamkin
|
82
|
Class III Director
|
||
Apostolos Kontoyannis
|
67
|
Class III Director
|
||
Semiramis Paliou
|
41
|
Class III Director
|
B. | Compensation |
C. | Board Practices |
D. | Crewing and Shore Employees |
Year Ended December 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Shoreside
|
101
|
94
|
84
|
|||||||||
Seafaring
|
993
|
973
|
848
|
|||||||||
Total
|
1,094
|
1,067
|
932
|
E. | Share Ownership |
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)
|
18,823,331
|
22.2%
|
||||
Massachusetts Financial Services Company (2)
|
4,719,789
|
5.6%
|
|||||
Franklin Resources Inc. (3)
|
11,022,582
|
13.0%
|
|||||
All officers and directors as a group (4)
|
21,611,429
|
25.5%
|
(1) | Currently, Mr. Simeon Palios beneficially owns 14,286,540 shares indirectly through Corozal Compania Naviera S.A. and Ironwood Trading Corp. over which Mr. Simeon Palios exercises sole voting and dispositive power. As of December 31, 2013, 2014, and 2015, Mr. Simeon Palios owned indirectly 18.4%, 19.3% and 20.6%, respectively, of our outstanding common stock. |
(2) | This information is derived from a Schedule 13G/A filed with the SEC on February 10, 2016, and represents a decrease from the 8.9% ownership reported on a Schedule 13G filed with the SEC on February 6, 2015 and the 10.3% ownership reported on a Schedule 13G/A filed with the SEC on February 13, 2014. |
(3) | This information is derived from a Schedule 13G filed with the SEC on January 8, 2016. |
(4) | 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 is indirect shareholder through ownership of stock held in Corozal Compania Naviera S.A., and Ironwood Trading Corp. Mr. Margaronis does not have dispositive or voting power with regard to shares held by Corozal Compania S.A. and Ironwood Trading Corp. and, accordingly, is not considered to be beneficial owner of our common shares held through Corozal Compania Naviera S.A. and Ironwood Trading Corp. Mr. Anastasios Margaronis also owns indirectly 2.2% of our outstanding common stock. Messrs. Lawes, Psaltis, Nachamkin and Kontoyannis, each a non-executive director of ours each owns less than 1% of our outstanding common stock. In addition, Diana Enterprises owns indirectly 140,390, or 5.4% of the outstanding Series B Preferred Shares and Mr. Anastasios Margaronis owns indirectly 28,025, or 1.1% of the outstanding Series B Preferred Shares. All officers and directors as a group own 172,775, or 6.6% of our outstanding Series B Preferred Shares. |
B. | Related Party Transactions |
C. | Interests of Experts and Counsel |
Item 8. | Financial information |
A. | Consolidated statements and other financial information |
B. | Significant Changes |
Item 9. | The Offer and Listing |
2016
|
2015
|
2014
|
2013
|
2012
|
2011
|
|||||||||||||||||||||||||||||||||||||||||||
Period
|
High
|
Low
|
High
|
Low
|
High
|
Low
|
High
|
Low
|
High
|
Low
|
High
|
Low
|
||||||||||||||||||||||||||||||||||||
Annual
|
$
|
8.11
|
$
|
3.58
|
$
|
13.55
|
$
|
6.31
|
$
|
13.64
|
$
|
7.47
|
$
|
9.87
|
$
|
6.31
|
$
|
12.64
|
$
|
6.93
|
||||||||||||||||||||||||||||
1st quarter
|
$
|
7.24
|
$
|
6.12
|
$
|
13.55
|
$
|
11.61
|
||||||||||||||||||||||||||||||||||||||||
2nd quarter
|
7.75
|
6.02
|
12.26
|
10.68
|
||||||||||||||||||||||||||||||||||||||||||||
3rd quarter
|
8.11
|
6.08
|
11.13
|
8.94
|
||||||||||||||||||||||||||||||||||||||||||||
4th quarter
|
7.13
|
3.58
|
9.03
|
6.31
|
||||||||||||||||||||||||||||||||||||||||||||
September
|
$
|
6.84
|
$
|
6.08
|
||||||||||||||||||||||||||||||||||||||||||||
October
|
7.13
|
6.21
|
||||||||||||||||||||||||||||||||||||||||||||||
November
|
6.45
|
4.75
|
||||||||||||||||||||||||||||||||||||||||||||||
December
|
4.50
|
3.58
|
||||||||||||||||||||||||||||||||||||||||||||||
January
|
$
|
4.47
|
$
|
2.15
|
||||||||||||||||||||||||||||||||||||||||||||
February
|
2.66
|
2.02
|
||||||||||||||||||||||||||||||||||||||||||||||
March*
|
3.49
|
2.25
|
*
For the period from March 1, 2016 until March 28, 2016.
|
2016
|
2015
|
2014*
|
||||||||||||||||||||||
Period
|
High
|
Low
|
High
|
Low
|
High
|
Low
|
||||||||||||||||||
Annual
|
$
|
25.59
|
$
|
10.80
|
$
|
26.98
|
$
|
22.76
|
||||||||||||||||
1st quarter
|
$
|
25.59
|
$
|
24.08
|
$
|
25.35
|
$
|
24.57
|
||||||||||||||||
2nd quarter
|
25.59
|
24.60
|
26.98
|
25.37
|
||||||||||||||||||||
3rd quarter
|
25.14
|
19.69
|
26.89
|
25.89
|
||||||||||||||||||||
4th quarter
|
21.49
|
10.80
|
26.74
|
22.76
|
||||||||||||||||||||
September
|
23.60
|
19.69
|
||||||||||||||||||||||
October
|
21.37
|
19.98
|
||||||||||||||||||||||
November
|
21.49
|
13.26
|
||||||||||||||||||||||
December
|
14.34
|
10.80
|
||||||||||||||||||||||
January
|
$
|
14.70
|
$
|
9.50
|
||||||||||||||||||||
February
|
12.83
|
10.33
|
||||||||||||||||||||||
March**
|
13.19
|
10.95
|
*
Commencing on February 21, 2014.
**
For the period from March 1, 2016 until March 28, 2016.
|
Item 10. | Additional Information |
A. | Share Capital |
B. | Memorandum and Articles of Association |
C. | Material Contracts |
D. | Exchange Controls |
E. | Taxation |
(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. |
F. | Dividends and paying agents |
G. | Statement by experts |
H. | Documents on display |
I. | Subsidiary information |
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 |
a) | Disclosure Controls and Procedures |
b) | Management's Annual Report on Internal Control over Financial Reporting |
c) | Attestation Report of Independent Registered Public Accounting Firm |
d) | Changes in Internal Control over Financial Reporting |
Item 16A. | Audit Committee Financial Expert |
Item 16B. | Code of Ethics |
Item 16C. | Principal Accountant Fees and Services |
a) | Audit Fees |
b) | Audit-Related Fees |
c) | Tax Fees |
d) | All Other Fees |
e) | Audit Committee's Pre-Approval Policies and Procedures |
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)
|
2.1
|
Form of Common Share Certificate
|
2.2
|
Statement of Designation of the 8.875% Series B Cumulative Redeemable Perpetual Preferred Shares of the Company (3)
|
2.3
|
Certificate of Designations of the Series A Participating Preferred Stock of the Company (4)
|
2.4
|
Base Indenture, dated May 28, 2015, by and between the Company and Deutsche Bank Trust Company Americas (5)
|
2.5
|
First Supplemental Indenture to the Base Indenture, dated May 28, 2015, by and between the Company and Deutsche Bank Trust Company Americas, as trustee, relating to the Company's 8.500% Senior Notes due 2020 (6)
|
4.1
|
Stockholders Rights Agreement dated January 15, 2016 (7)
|
4.2
|
2014 Equity Incentive Plan
|
4.3
|
Form of Technical Manager Purchase Option Agreement (8)
|
4.4
|
Form of Management Agreement (9)
|
4.5
|
Loan Agreement with Bremer Landesbank dated October 22, 2009 (10)
|
4.6
|
Loan Agreement with the Export-Import Bank of China and DnB Nor Bank ASA dated October 2, 2010 (10)
|
4.7
|
First Supplemental Agreement, by and between Bikar Shipping Company Inc., Diana Shipping Inc., DSS and Emporiki Bank of Greece S.A., dated December 11, 2012
|
4.8
|
Second Supplemental Agreement, by and between Bikar Shipping Company Inc., Diana Shipping Inc., DSS and Credit Agricole Corporate and Investment Bank, dated December 13, 2012
|
4.9
|
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 (11)
|
4.10
|
Loan Agreement, dated January 9, 2014, by and among Taka Shipping Company Inc., Fayo Shipping Company Inc., and Commonwealth Bank of Australia (11)
|
4.11
|
Loan Agreement, dated May 20, 2013, by and between Diana Shipping Inc., Eluk Shipping Company Inc. and Diana Containerships Inc. (11)
|
4.12
|
First Amendment to Loan Agreement, dated May 20, 2013,
by and between Diana Shipping Inc., Eluk Shipping Company Inc. and Diana Containerships Inc.
, dated July 28, 2014
|
4.13
|
Second Amendment to Loan Agreement, dated May 20, 2013, by and between Diana Shipping Inc., Eluk Shipping Company Inc. and Diana Containerships Inc., dated September 9, 2015
|
4.14
|
Loan Agreement, dated December 18, 2014, by and among Weno Shipping Company Inc., Pulap Shipping Company Inc., the Banks and Financial Institutions listed therein and BNP Paribas (12)
|
4.15
|
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 (12)
|
4.16
|
Administrative Services Agreement, dated October 1, 2013, by and between Diana Shipping Inc. and Diana Shipping Services S.A. (11)
|
4.17
|
Brokerage Services Agreement, dated April 9, 2014, by and between Diana Shipping Inc. and Diana Enterprises Inc. (12)
|
4.18
|
Brokerage Services Agreement, dated April 1, 2015, by and between Diana Shipping Inc. and Diana Enterprises Inc.
|
4.19
|
Amended and Restated Non-Competition Agreement, dated as of March 1, 2013, by and between Diana Shipping Inc. and Diana Containerships Inc. (11)
|
4.20
|
Loan Agreement with ABN AMRO Bank N
.
V
.
, dated March 26, 2015
|
4.21
|
Loan Agreement with Danish Ship Finance, dated April 29, 2015
|
4.22
|
Joint Venture and Subscription Agreement with Wilhelmsen Ship Management, dated January 16, 2015
|
4.23
|
Loan Agreement with BNP Paribas, dated July 22, 2015
|
4.24
|
Loan Agreement with ING Bank N.V., dated September 30, 2015
|
4.25
|
Loan Agreement with The Export-Import Bank of China, dated January 7, 2016
|
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, 2015, formatted in eXtensible Business Reporting Language (XBRL): (i) Consolidated Balance Sheets as of December 31, 2014 and 2015; (ii) Consolidated Statements of Operations for the years ended December 31, 2013, 2014 and 2015; (iii) Consolidated Statements of Comprehensive Income/(Loss) for the years ended December 31, 2013, 2014 and 2015; (iv) Consolidated Statements of Stockholders' Equity for the years ended December 31, 2013, 2014 and 2015; (v) Consolidated Statements of Cash Flows for the years ended December 31, 2013, 2014 and 2015; 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 Exhibit 3.3 to the Company's Form 8-A filed on February 13, 2014. |
(4) | Filed as Exhibit 3.1 to the Company's Form 8-A12B/A filed on January 15, 2016. |
(5) | Filed as Exhibit 4.1 to the Company's Form 6-K filed on May 28, 2015. |
(6) | Filed as Exhibit 4.2 to the Company's Form 6-K filed on May 28, 2015. |
(7) | Filed as Exhibit 4.1 to the Company's Form 8-A12B/A filed on January 15, 2016. |
(8) | Filed as an Exhibit to the Company's Registration Statement (File No. 123052) on March 1, 2005. |
(9) | Filed as an Exhibit to the Company's Amended Registration Statement (File No. 123052) on March 15, 2005. |
(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 March 27, 2014. |
(12) | Filed as an Exhibit to the Company' Annual Report filed on Form 20-F on March 25, 2015. |
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, 2015 and 2014
|
F-4
|
|
Consolidated Statements of Operations for the years ended December 31, 2015, 2014 and 2013
|
F-5
|
|
Consolidated Statements of Comprehensive Income / (Loss) for the years ended December 31, 2015, 2014 and 2013
|
F-5
|
|
Consolidated Statements of Stockholders' Equity for the years ended December 31, 2015, 2014 and 2013
|
F-6
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2015, 2014 and 2013
|
F-7
|
|
Notes to Consolidated Financial Statements
|
F-8
|
DIANA SHIPPING INC.
|
||||||
CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||
For the year ended December 31, 2015, 2014 and 2013
|
||||||
(Expressed in thousands of U.S. Dollars – except for share and per share data)
|
2015
|
2014
|
2013
|
||||||||||
REVENUES:
|
||||||||||||
Time charter revenues
|
$
|
157,712
|
$
|
175,576
|
$
|
164,005
|
||||||
Other revenues (Note 4(b))
|
-
|
-
|
447
|
|||||||||
EXPENSES:
|
||||||||||||
Voyage expenses (Notes 4(d) and 12)
|
15,528
|
10,665
|
8,119
|
|||||||||
Vessel operating expenses (Note 12)
|
88,272
|
86,923
|
77,211
|
|||||||||
Depreciation and amortization of deferred charges (Notes 2(m) and 2(n))
|
76,333
|
70,503
|
64,741
|
|||||||||
General and administrative expenses
|
25,335
|
26,217
|
23,724
|
|||||||||
Management fees to related party (Notes 3(b) and 4(d))
|
405
|
-
|
-
|
|||||||||
Foreign currency gain
|
(984
|
)
|
(528
|
)
|
(690
|
)
|
||||||
Operating loss
|
$
|
(47,177
|
)
|
$
|
(18,204
|
)
|
$
|
(8,653
|
)
|
|||
OTHER INCOME / (EXPENSES):
|
||||||||||||
Interest and finance costs (Note 13)
|
(15,555
|
)
|
(8,427
|
)
|
(8,140
|
)
|
||||||
Interest and other income (Note 4(b))
|
3,152
|
3,627
|
1,800
|
|||||||||
Income/(loss) from derivative instruments (Note 16)
|
-
|
68
|
(118
|
)
|
||||||||
Income/(loss) from equity method investments (Note 3)
|
(5,133
|
)
|
12,668
|
(6,094
|
)
|
|||||||
Total other income / (expenses), net
|
$
|
(17,536
|
)
|
$
|
7,936
|
$
|
(12,552
|
)
|
||||
Net loss
|
$
|
(64,713
|
)
|
$
|
(10,268
|
)
|
$
|
(21,205
|
)
|
|||
Dividends on series B preferred shares (Notes 11(a) and 14)
|
(5,769
|
)
|
(5,080
|
)
|
-
|
|||||||
Net loss attributed to common stockholders
|
$
|
(70,482
|
)
|
$
|
(15,348
|
)
|
$
|
(21,205
|
)
|
|||
Loss per common share, basic and diluted
(Note 14)
|
$
|
(0.89
|
)
|
$
|
(0.19
|
)
|
$
|
(0.26
|
)
|
|||
Weighted average number of common shares, basic and diluted
(Note 14)
|
79,518,009
|
81,292,290
|
81,328,390
|
DIANA SHIPPING INC.
|
||||||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
|
||||||||||||
For the year ended December 31, 2015, 2014 and 2013
|
||||||||||||
(Expressed in thousands of U.S. Dollars)
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Net loss
|
$
|
(64,713
|
)
|
$
|
(10,268
|
)
|
$
|
(21,205
|
)
|
|||
Other comprehensive income / (loss) (Actuarial gain / (loss))
|
1,016
|
(911
|
)
|
(30
|
)
|
|||||||
Comprehensive loss
|
$
|
(63,697
|
)
|
$
|
(11,179
|
)
|
$
|
(21,235
|
)
|
|||
DIANA SHIPPING INC.
|
||||||
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
|
||||||
For the year ended December 31, 2015, 2014 and 2013
|
||||||
(Expressed in thousands of U.S. Dollars – except for share and per share data)
|
Preferred Stock
|
Common Stock
|
|||||||||||||||||||||||||||||||
# of Shares
|
Par Value
|
# of Shares
|
Par Value
|
Additional Paid-in Capital
|
Other Comprehensive Income / (Loss)
|
Retained Earnings
|
Total Equity
|
|||||||||||||||||||||||||
BALANCE, December 31, 2012
|
-
|
-
|
82,233,424
|
$
|
822
|
$
|
918,007
|
$
|
194
|
$
|
347,401
|
$
|
1,266,424
|
|||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
(21,205
|
)
|
$
|
(21,205
|
)
|
|||||||||||||||||
Issuance of restricted stock and compensation cost
|
-
|
-
|
607,946
|
6
|
8,197
|
-
|
-
|
8,203
|
||||||||||||||||||||||||
Other comprehensive loss
|
-
|
-
|
-
|
-
|
-
|
(30
|
)
|
-
|
(30
|
)
|
||||||||||||||||||||||
BALANCE, December 31, 2013
|
-
|
-
|
82,841,370
|
$
|
828
|
$
|
926,204
|
$
|
164
|
$
|
326,196
|
$
|
1,253,392
|
|||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
(10,268
|
)
|
$
|
(10,268
|
)
|
|||||||||||||||||
Issuance of series B preferred stock
|
2,600,000
|
26
|
-
|
-
|
62,672
|
-
|
-
|
62,698
|
||||||||||||||||||||||||
Issuance of restricted stock and compensation cost
|
-
|
-
|
1,864,000
|
19
|
7,725
|
-
|
-
|
7,744
|
||||||||||||||||||||||||
Dividends on series B preferred stock
|
-
|
-
|
-
|
-
|
-
|
-
|
(5,080
|
)
|
(5,080
|
)
|
||||||||||||||||||||||
Stock repurchased and retired
|
-
|
-
|
(2,845,549
|
)
|
(28
|
)
|
(25,321
|
)
|
-
|
-
|
(25,349
|
)
|
||||||||||||||||||||
Other comprehensive loss
|
-
|
-
|
-
|
-
|
-
|
(911
|
)
|
-
|
(911
|
)
|
||||||||||||||||||||||
BALANCE, December 31, 2014
|
2,600,000
|
$
|
26
|
81,859,821
|
$
|
819
|
$
|
971,280
|
$
|
(747
|
)
|
$
|
310,848
|
$
|
1,282,226
|
|||||||||||||||||
|
||||||||||||||||||||||||||||||||
Net loss
|
-
|
$
|
-
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
(64,713
|
)
|
$
|
(64,713
|
)
|
||||||||||||||||
Issuance of restricted stock and compensation cost (Note 11(c))
|
1,100,000
|
10
|
8,269
|
-
|
-
|
8,279
|
||||||||||||||||||||||||||
Dividends on series B preferred stock (Note 11(a))
|
-
|
-
|
-
|
-
|
-
|
-
|
(5,769
|
)
|
(5,769
|
)
|
||||||||||||||||||||||
Stock repurchased and retired (Note 11(d))
|
-
|
-
|
(413,804
|
)
|
(4
|
)
|
(2,669
|
)
|
-
|
-
|
(2,673
|
)
|
||||||||||||||||||||
Other comprehensive income
|
-
|
-
|
-
|
-
|
-
|
1,016
|
-
|
1,016
|
||||||||||||||||||||||||
BALANCE, December 31, 2015
|
2,600,000
|
$
|
26
|
82,546,017
|
$
|
825
|
$
|
976,880
|
$
|
269
|
$
|
240,366
|
$
|
1,218,366
|
DIANA SHIPPING INC.
|
||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||
For the year ended December 31, 2015, 2014 and 2013
|
||||||||
(Expressed in thousands of U.S. Dollars)
|
Cash Flows from Operating Activities:
|
2015
|
2015
|
2015
|
|||||||||
Net loss
|
$
|
(64,713
|
)
|
$
|
(10,268
|
)
|
$
|
(21,205
|
)
|
|||
Adjustments to reconcile net loss to net cash provided by operating activities:
|
||||||||||||
Depreciation and amortization of deferred charges
|
76,333
|
70,503
|
64,741
|
|||||||||
Amortization of financing costs (Note 13)
|
1,364
|
519
|
473
|
|||||||||
Amortization of free lubricants benefit
|
(85
|
)
|
(129
|
)
|
(98
|
)
|
||||||
Compensation cost on restricted stock (Note 11(c))
|
8,279
|
7,744
|
8,203
|
|||||||||
Actuarial gain / (loss)
|
1,016
|
(911
|
)
|
(30
|
)
|
|||||||
Change in fair value of derivative instruments
|
-
|
(378
|
)
|
(616
|
)
|
|||||||
(Income) / loss from equity method investments, net of dividends (Note 3)
|
5,133
|
(12,668
|
)
|
5,094
|
||||||||
(Increase) / Decrease in:
|
||||||||||||
Receivables
|
1,871
|
(5,682
|
)
|
5,889
|
||||||||
Due from related parties
|
2,070
|
(604
|
)
|
294
|
||||||||
Inventories
|
1,062
|
(1,354
|
)
|
(684
|
)
|
|||||||
Prepaid expenses and other assets
|
(349
|
)
|
(1,091
|
)
|
345
|
|||||||
Prepaid charter revenue (Notes 2(k) and 8)
|
-
|
-
|
5,353
|
|||||||||
Other non-current assets
|
-
|
793
|
(793
|
)
|
||||||||
Increase / (Decrease) in:
|
||||||||||||
Accounts payable
|
(739
|
)
|
2,293
|
416
|
||||||||
Due to related parties
|
(217
|
)
|
60
|
(43
|
)
|
|||||||
Accrued liabilities, net of accrued preferred dividends
|
437
|
(11
|
)
|
(479
|
)
|
|||||||
Deferred revenue
|
(865
|
)
|
1
|
451
|
||||||||
Other liabilities
|
(643
|
)
|
554
|
135
|
||||||||
Drydock costs
|
(6,009
|
)
|
(4,461
|
)
|
(46
|
)
|
||||||
Net cash provided by Operating Activities
|
$
|
23,945
|
$
|
44,910
|
$
|
67,400
|
||||||
Cash Flows from Investing Activities:
|
||||||||||||
Payments for vessel acquisitions, improvements and construction (Notes 5 and 6)
|
(155,352
|
)
|
(111,702
|
)
|
(198,581
|
)
|
||||||
Acquisition of additional interest in Diana Containerships Inc. (Note 3(a))
|
-
|
(40,000
|
)
|
-
|
||||||||
Cash dividends from investment in Diana Containerships Inc. (Note 3(a))
|
193
|
763
|
4,000
|
|||||||||
Loan to Diana Containerships Inc. (Note 4(b))
|
-
|
-
|
(50,000
|
)
|
||||||||
Joint venture investment (Note 3(b))
|
(267
|
)
|
-
|
-
|
||||||||
Payments for plant, property and equipment (Note 7)
|
(211
|
)
|
(1,574
|
)
|
(575
|
)
|
||||||
Net cash used in Investing Activities
|
$
|
(155,637
|
)
|
$
|
(152,513
|
)
|
$
|
(245,156
|
)
|
|||
Cash Flows from Financing Activities:
|
||||||||||||
Proceeds from long-term debt (Note 9)
|
441,173
|
101,500
|
18,000
|
|||||||||
Proceeds from issuance of preferred stock, net of expenses (Note 11(a))
|
-
|
62,698
|
-
|
|||||||||
Cash dividends on preferred stock
|
(5,769
|
)
|
(3,862
|
)
|
-
|
|||||||
Payments for repurchase of common stock (Note 11(d))
|
(2,673
|
)
|
(25,349
|
)
|
-
|
|||||||
Financing costs
|
(5,482
|
)
|
(527
|
)
|
(452
|
)
|
||||||
Loan payments (Note 9)
|
(321,240
|
)
|
(48,589
|
)
|
(45,783
|
)
|
||||||
Net cash provided by / (used in) Financing Activities
|
$
|
106,009
|
$
|
85,871
|
$
|
(28,235
|
)
|
|||||
Net decrease in cash and cash equivalents
|
(25,683
|
)
|
(21,732
|
)
|
(205,991
|
)
|
||||||
Cash and cash equivalents at beginning of the year
|
218,901
|
240,633
|
446,624
|
|||||||||
Cash and cash equivalents at end of the year
|
$
|
193,218
|
$
|
218,901
|
$
|
240,633
|
||||||
SUPPLEMENTAL CASH FLOW INFORMATION
|
||||||||||||
Cash paid during the year for:
|
||||||||||||
Interest, net of amounts capitalized
|
$
|
13,048
|
$
|
8,180
|
$
|
7,169
|
||||||
1. | Basis of Presentation and General Information |
a/a
|
Company
|
Vessel
|
Flag
|
Date Built
|
Date Acquired
|
Place of Incorporation
|
PANAMAX VESSELS
|
||||||
1
|
Panama Compania Armadora SA
|
Oceanis
|
Bahamas
|
May 2001
|
May 2001
|
Panama
|
2
|
Husky Trading SA
|
Triton
|
Bahamas
|
Mar 2001
|
Mar 2001
|
Panama
|
3
|
Changame Compania Armadora SA
|
Thetis
|
Bahamas
|
Aug 2004
|
Nov 2005
|
Panama
|
4
|
Buenos Aires Compania Armadora SA
|
Alcyon
|
Bahamas
|
Feb 2001
|
Feb 2001
|
Panama
|
5
|
Skyvan Shipping Company SA
|
Nirefs
|
Bahamas
|
Jan 2001
|
Jan 2001
|
Panama
|
6
|
Cypres Enterprises Corp.
|
Protefs
|
Bahamas
|
Aug 2004
|
Aug 2004
|
Panama
|
7
|
Urbina Bay Trading SA
|
Erato
|
Bahamas
|
Aug 2004
|
Nov 2005
|
Panama
|
8
|
Chorrera Compania Armadora SA
|
Dione
|
Greek
|
Jan 2001
|
May 2003
|
Panama
|
9
|
Darien Compania Armadora SA
|
Calipso
|
Bahamas
|
Feb 2005
|
Feb 2005
|
Panama
|
10
|
Texford Maritime SA
|
Clio
|
Bahamas
|
May 2005
|
May 2005
|
Panama
|
11
|
Eaton Marine SA
|
Danae
|
Greek
|
Jan 2001
|
Jul 2003
|
Panama
|
12
|
Vesta Commercial SA
|
Coronis
|
Marshall Islands
|
Jan 2006
|
Jan 2006
|
Panama
|
13
|
Ailuk Shipping Company Inc.
|
Naias
|
Marshall Islands
|
Jun 2006
|
Aug 2006
|
Marshall Islands
|
14
|
Taka Shipping Company Inc.
|
Melite
|
Marshall Islands
|
Oct 2004
|
Jan 2010
|
Marshall Islands
|
15
|
Bikar Shipping Company Inc.
|
Arethusa
|
Greek
|
Jan 2007
|
Jul 2011
|
Marshall Islands
|
16
|
Mandaringina Inc.
|
Melia
|
Marshall Islands
|
Feb 2005
|
May 2012
|
Marshall Islands
|
17
|
Jemo Shipping Company Inc.
|
Leto
|
Marshall Islands
|
Feb 2010
|
Jan 2012
|
Marshall Islands
|
18
|
Fayo Shipping Company Inc.
|
Artemis
|
Marshall Islands
|
Sep 2006
|
Aug 2013
|
Marshall Islands
|
19
|
Erikub Shipping Company Inc. (Note 6)
|
Crystalia
|
Greek
|
Feb 2014
|
Feb 2014
|
Marshall Islands
|
20
|
Wotho Shipping Company Inc. (Note 6)
|
Atalandi
|
Greek
|
May 2014
|
May 2014
|
Marshall Islands
|
KAMSARMAX VESSELS
|
||||||
21
|
Tuvalu Shipping Company Inc.
|
Myrto
|
Marshall Islands
|
Jan 2013
|
Jan 2013
|
Marshall Islands
|
22
|
Jabat Shipping Company Inc.
|
Maia
|
Marshall Islands
|
Aug 2009
|
Feb 2013
|
Marshall Islands
|
23
|
Makur Shipping Company Inc.
|
Myrsini
|
Marshall Islands
|
Mar 2010
|
Oct 2013
|
Marshall Islands
|
24
|
Rairok Shipping Company Inc. (Note 6)
|
Medusa
|
Marshall Islands
|
Apr 2010
|
Jun 2015
|
Marshall Islands
|
POST-PANAMAX VESSELS
|
||||||
25
|
Majuro Shipping Company Inc.
|
Alcmene
|
Marshall Islands
|
Jan 2010
|
Nov 2010
|
Marshall Islands
|
26
|
Guam Shipping Company Inc
|
Amphitrite
|
Marshall Islands
|
Aug 2012
|
Aug 2012
|
Marshall Islands
|
27
|
Palau Shipping Company Inc.
|
Polymnia
|
Marshall Islands
|
Nov 2012
|
Nov 2012
|
Marshall Islands
|
a/a
|
Company
|
Vessel
|
Flag
|
Date Built
|
Date Acquired
|
Place of Incorporation
|
CAPESIZE VESSELS
|
28
|
Jaluit Shipping Company Inc.
|
Sideris GS
|
Marshall Islands
|
Nov 2006
|
Nov 2006
|
Marshall Islands
|
29
|
Bikini Shipping Company Inc.
|
New York
|
Marshall Islands
|
Mar 2010
|
Mar 2010
|
Marshall Islands
|
30
|
Gala Properties Inc.
|
Houston
|
Marshall Islands
|
Oct 2009
|
Oct 2009
|
Marshall Islands
|
31
|
Kili Shipping Company Inc.
|
Semirio
|
Marshall Islands
|
Jun 2007
|
Jun 2007
|
Marshall Islands
|
32
|
Knox Shipping Company Inc.
|
Aliki
|
Marshall Islands
|
Mar 2005
|
Apr 2007
|
Marshall Islands
|
33
|
Lib Shipping Company Inc.
|
Boston
|
Marshall Islands
|
Nov 2007
|
Nov 2007
|
Marshall Islands
|
34
|
Marfort Navigation Company Ltd.
|
Salt Lake City
|
Cyprus
|
Sep 2005
|
Dec 2007
|
Cyprus
|
35
|
Silver Chandra Shipping Company Ltd.
|
Norfolk
|
Cyprus
|
Aug 2002
|
Feb 2008
|
Cyprus
|
36
|
Bokak Shipping Company Inc.
|
Baltimore
|
Marshall Islands
|
Mar 2005
|
Jun 2013
|
Marshall Islands
|
37
|
Pulap Shipping Company Inc.
|
PS Palios
|
Marshall Islands
|
Jan 2013
|
Dec 2013
|
Marshall Islands
|
38
|
Weno Shipping Company Inc. (Note 6)
|
GP Zafirakis
|
Marshall Islands
|
Aug 2014
|
Aug 2014
|
Marshall Islands
|
39
|
Lelu Shipping Company Inc. (Note 5)
|
Santa Barbara
|
Marshall Islands
|
Jan 2015
|
Jan 2015
|
Marshall Islands
|
40
|
Ujae Shipping Company Inc. (Note 6)
|
New Orleans
|
Marshall Islands
|
Nov 2015
|
Nov 2015
|
Marshall Islands
|
41
|
Toku Shipping Company Inc. (Notes 6)
|
Seattle
|
Marshall Islands
|
Apr 2011
|
Nov 2015
|
Marshall Islands
|
NEWCASTLEMAX VESSELS
|
||||||
41
|
Lae Shipping Company Inc.
|
Los Angeles
|
Marshall Islands
|
Feb 2012
|
Feb 2012
|
Marshall Islands
|
42
|
Namu Shipping Company Inc.
|
Philadelphia
|
Marshall Islands
|
May 2012
|
May 2012
|
Marshall Islands
|
UNDER CONSTRUCTION
|
||||||
43
|
Aster Shipping Company Inc. (Notes 5 and 10)
|
H2548
|
-
|
-
|
Expected in 2016
|
Marshall Islands
|
44
|
Aerik Shipping Company Inc. (Notes 5 and 10)
|
H2549
|
-
|
-
|
Expected in 2016
|
Marshall Islands
|
45
|
Houk Shipping Company Inc. (Notes 5 and 10)
|
DY6006
|
-
|
-
|
Expected in 2016
|
Marshall Islands
|
OTHER SUBSIDIARIES
|
||||||
46
|
Diana Shipping Services SA
|
Management company
|
Panama
|
|||
47
|
Bulk Carriers (USA) LLC
|
Company's representative in the US
|
Delaware - USA
|
|||
48
|
Diana Ship Management Inc. (Note 3(b))
|
Intermediate holding company
|
Marshall Islands
|
Charterer
|
2015
|
2014
|
2013
|
|||
A
|
24%
|
10%
|
||||
B
|
20%
|
|||||
C
|
12%
|
12%
|
||||
D
|
10%
|
15%
|
19%
|
|||
E
|
18%
|
17%
|
||||
F
|
11%
|
|||||
G
|
11%
|
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, 2015 and 2014 amounted to $21,500 and $19,500 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, 2015 and 2014. |
(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, 2015 and 2014, (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, 2015 and 2014, 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 (Note 8). |
(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. |
(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. Compensation due to earlier redelivery than the minimum period agreed in the charter party is recognized in the period earned. 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) | 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. |
(v) | 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. |
(w) | 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). |
(x) | 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. |
(y) | 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. The Company's evaluation did not result in an identification of variable interest entities as of December 31, 2015 and 2014. |
(a) | In August 2014, the FASB issued Accounting Standards Update ("ASU" or "Update") No. 2014-15 – Presentation of Financial Statements - Going Concern. ASU 2014-15 provides guidance about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. ASU 2014-15 requires an entity's management to evaluate at each reporting period based on the relevant conditions and events that are known at the date of financial statements are issued, whether there are conditions or events, that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued and to disclose the necessary information. ASU 2014-15 is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. |
(b) | In February 2015, the FASB issued the ASU 2015-02, "Consolidation (Topic 810)—Amendments to the Consolidation Analysis", which amends the criteria for determining which entities are considered VIEs, amends the criteria for determining if a service provider possesses a variable interest in a VIE and ends the deferral granted to investment companies for application of the VIE consolidation model. The ASU is effective for interim and annual periods beginning after December 15, 2015. Early application is permitted. Management does not expect the adoption of this ASU to have a material impact on Company's results of operations, financial position or cash flows. |
(c) | In July 2015, the FASB issued ASU No. 2015-11 –Inventory. ASU 2015-11 is part of FASB Simplification Initiative. Current guidance requires an entity to measure inventory at the lower of cost or market. Market could be the replacement cost, net realizable value or net realizable value less an approximately normal profit margin. Under this Update, the entities will be required to measure inventory at the lower of cost or net realizable value. Net realizable value is defined as estimate selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The amendments under the Update more closely align measurement of inventory in US GAAP with the measurement of inventory in IFRS. For public entities, the amendments of this Update are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The amendments of this Update should be applied prospectively with early application permitted. Management does not expect the adoption of this ASU to have a material impact on Company's results of operations, financial position or cash flows. |
(d) | In February 2016, the FASB issued ASU 2016-02 Leases (Topic 842) which provides new guidance related to accounting for leases and supersedes existing U.S. GAAP on lease accounting. The ASU will require organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases, unless the lease is a short term lease. Public business entities should apply the amendments in ASU 2016-02 for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted for all public business entities upon issuance. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. Management is in the process of assessing the impact of the new standard on the Company's consolidated financial position and performance. |
(e) | In March 2016, the FASB issued ASU No. 2016-07 "Investments—Equity Method and Joint Ventures" to simplify the accounting for equity method investments. The amendments in the Update eliminate the requirement in Topic 323 that an entity retroactively adopt the equity method of accounting if an investment qualifies for use of the equity method as a result of an increase in the level of ownership or degree of influence. The amendments require that the equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor's previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. For public companies, the new standard is effective for interim and annual periods beginning after December 15, 2016. Early adoption is permitted. Management does not believe that the adoption of the new standard will have any impact on its consolidated financial position, results of operations or cash flows and relevant disclosures. |
a) | Diana Containerships Inc. ("Diana Containerships"): On July 29, 2014, DSI invested $40,000 in Diana Containerships and acquired 15,936,255 additional shares increasing its ownership as at December 31, 2014 to 26.34%. As at December 31, 2015, DSI owned 26.08% of the share capital of Diana Containerships. As at December 31, 2015 and 2014, the investment in Diana Containerships amounted to $62,376 and $67,546, respectively, and is included in "Equity method investments" in the accompanying consolidated balance sheets. As at December 31, 2015, the market value of the investment was $15,416 based on Diana Containerships' closing price on Nasdaq of $0.80. |
b) | Diana Wilhelmsen Management Limited ("DWM"): DWM is a joint venture which was established on May 7, 2015 by Diana Ship Management Inc., a wholly owned subsidiary of DSI, and Wilhelmsen Ship Management Holding Limited, an unaffiliated third party, each holding 50% of DWM. As at December 31, 2015, DWM provided management services to six vessels of the Company's fleet (Note 4(d)). The DWM office is located in Limassol, Cyprus. As at December 31, 2015, the investment in DWM amounted to $111 and is included in "Equity method investments" in the accompanying 2015 consolidated balance sheet. From DWM's formation until December 31, 2015, loss from investment amounted to $156 and is included in "Income/(loss) from equity method investments" in the accompanying 2015 consolidated statement of operations . |
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 of the Board. Travel expenses for 2015, 2014 and 2013 amounted to $2,685, $2,765 and $2,640, respectively, and are mainly 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, 2015 and 2014, an amount of $62 and $281, respectively, was payable to Altair and is included in "Due to related parties" in the accompanying consolidated balance sheets. |
(b) | Diana Containerships Inc.: Until February 28, 2013, DSS received from Diana Containerships management and administrative fees pursuant to management and administrative services agreements between Diana Containerships, its vessel owning companies, and DSS. During 2013, revenue derived from these agreements until their termination, amounted to $447 and is separately presented as "Other revenues" in the accompanying 2013 consolidated statement of operations. |
(c) | Diana Enterprises Inc. ("Diana Enterprises"): Diana Enterprises is a company controlled by the Company's CEO and Chairman of the Board which provides brokerage services to DSI pursuant to a Brokerage Services Agreement for a fixed fee. During 2015, 2014 and 2013 brokerage fees amounted to $1,302, $1,250 and $2,481, respectively, and are included in "General and administrative expenses" in the accompanying consolidated statements of operations. As of December 31, 2015 and 2014, there was no amount due to Diana Enterprises included in the accompanying consolidated 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. |
(d) | Diana Wilhelmsen Management Limited ("DWM"): As of December 31, 2015, DWM provided management services to six vessels of the Company's fleet for a fixed monthly fee and commercial services charged as a percentage of the vessels' gross revenues. Management fees for the period from each vessel's delivery to the management of DWM to December 31, 2015, amounted to $405 and are separately presented as "Management fees to related party" in the 2015 accompanying consolidated statement of operations whereas commercial fees amounted to $43 and are included in "Voyage expenses" (Note 12). As at December 31, 2015, there was an amount of $2 due to DWM, included in "Due to related parties" in the related accompanying consolidated balance sheet. |
5. | Advances for Vessels under Construction and Acquisitions and Other Vessel Costs |
2015
|
2014
|
|||||||
Beginning balance
|
$
|
29,500
|
$
|
38,862
|
||||
- Advances for vessels under construction and other vessel costs
|
25,080
|
43,160
|
||||||
- Advances for vessel acquisitions and other vessel costs
|
40,105
|
10,066
|
||||||
- Transferred to vessel cost (Note 6)
|
(50,171
|
)
|
(62,588
|
)
|
||||
Ending balance
|
$
|
44,514
|
$
|
29,500
|
6. | Vessels |
Vessel Cost
|
Accumulated Depreciation
|
Net Book Value
|
||||||||||
|
||||||||||||
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
|
|||||
|
||||||||||||
- Transfer from advances for vessels under construction and acquisition and other vessel costs (Note 5)
|
50,171
|
-
|
50,171
|
|||||||||
- Acquisitions, improvements and other vessel costs
|
90,167
|
-
|
90,167
|
|||||||||
- Depreciation for the period
|
-
|
(72,668
|
)
|
(72,668
|
)
|
|||||||
Balance, December 31, 2015
|
$
|
1,947,992
|
$
|
(507,189
|
)
|
$
|
1,440,803
|
7. | Property and equipment, net |
Property and Equipment
|
Accumulated Depreciation
|
Net Book Value
|
||||||||||
|
||||||||||||
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
|
|||||
|
||||||||||||
- Additions in property and equipment
|
211
|
-
|
211
|
|||||||||
- Depreciation for the period
|
-
|
(609
|
)
|
(609
|
)
|
|||||||
Balance, December 31, 2015
|
$
|
26,365
|
$
|
(2,876
|
)
|
$
|
23,489
|
8. | Prepaid charter revenue |
9. | Long-term debt, current and non-current |
2015
|
2014
|
|||||||
Revolving Credit Facility
|
$
|
-
|
$
|
210,000
|
||||
8.5% Senior Unsecured Notes
|
63,250
|
-
|
||||||
Secured Term Loans
|
542,691
|
276,008
|
||||||
Total debt outstanding
|
$
|
605,941
|
$
|
486,008
|
||||
Less related deferred financing costs
|
(5,870
|
)
|
(1,752
|
)
|
||||
Total debt, net of deferred financing costs
|
$
|
600,071
|
$
|
484,256
|
||||
Less: Current portion of long term debt, net of deferred financing costs current
|
(40,984
|
)
|
(78,734
|
)
|
||||
Long-term debt, net of current portion and deferred financing costs, non-current
|
$
|
559,087
|
$
|
405,522
|
Period
|
Principal Repayment
|
|||
January 1, 2016 to December 31, 2016
|
$
|
42,450
|
||
January 1, 2017 to December 31, 2017
|
44,950
|
|||
January 1, 2018 to December 31, 2018
|
54,450
|
|||
January 1, 2019 to December 31, 2019
|
83,450
|
|||
January 1, 2020 to December 31, 2020
|
183,312
|
|||
January 1, 2021 and thereafter
|
197,329
|
|||
Total
|
$
|
605,941
|
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.
The Company's vessels are covered for pollution in the amount of $1 billion per vessel per incident, by the P&I Association in which the Company's vessels are entered. The Company's vessels are subject to calls payable to their P&I Association and may be subject to supplemental calls which are based on estimates of premium income and anticipated and paid claims. Such estimates are adjusted each year by the Board of Directors of the P&I Association until the closing of the relevant policy year, which generally occurs within three years from the end of the policy year. Supplemental calls, if any, are expensed when they are announced and according to the period they relate to. The Company is not aware of any supplemental calls in respect of any policy year that should be recorded in its consolidated financial statements.
|
b) | The Company has shipbuilding contracts for the construction of two Newcastlemax dry bulk carriers and one Kamsarmax dry bulk carrier (Note 5). As at December 31, 2015, the total obligations under these contracts amounted to $83,487. |
c) | As at December 31, 2015, the minimum contractual gross charter revenues expected to be generated from fixed and non-cancelable time charter contracts existing as at December 31, 2015 and until their expiration were as follows: |
Period
|
Amount
|
|||
Year 1
|
$
|
69,036
|
||
Year 2
|
3,980
|
|||
Total
|
$
|
73,016
|
11. | Capital Stock and Changes in Capital Accounts |
(a) | Preferred stock : As at December 31, 2015 and 2014, 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 1,000,000 are designated as Series A Participating Preferred Shares; and 5,000,000 are 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 May 2011, the Company's board of directors approved to adopt the 2011 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, 2015 1,384,759 remained reserved for issuance. In November 2014, the Company's board of directors approved to adopt the 2014 Equity Incentive Plan, for 5,000,000 additional shares, all of which have been reserved for issuance. |
Number of Shares
|
Weighted Average Grant Date Price
|
|||||||
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
|
|||||
Granted
|
1,100,000
|
6.91
|
||||||
Vested
|
(827,522
|
)
|
9.57
|
|||||
Outstanding at December 31, 2015
|
2,764,312
|
$
|
8.27
|
(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, during 2015 and 2014, the Company repurchased and retired 413,804 shares at an aggregate cost of approximately $2,673 and 2,845,549 shares at an aggregate cost of approximately $25,349, respectively. |
12. | Voyage and Vessel Operating Expenses |
2015
|
2014
|
2013
|
||||||||||
Voyage Expenses
|
||||||||||||
Bunkers
|
$
|
7,522
|
$
|
2,026
|
$
|
(62
|
)
|
|||||
Commissions charged by third parties
|
7,632
|
8,245
|
7,939
|
|||||||||
Commissions charged by a related party (Note 4(d))
|
43
|
-
|
-
|
|||||||||
Miscellaneous
|
331
|
394
|
242
|
|||||||||
Total
|
$
|
15,528
|
$
|
10,665
|
$
|
8,119
|
||||||
Vessel Operating Expenses
|
||||||||||||
Crew wages and related costs
|
$
|
50,494
|
$
|
50,442
|
$
|
45,451
|
||||||
Insurance
|
6,778
|
6,723
|
6,438
|
|||||||||
Spares and consumable stores
|
16,913
|
17,106
|
14,825
|
|||||||||
Repairs and maintenance
|
9,094
|
8,379
|
5,548
|
|||||||||
Tonnage taxes (Note 15)
|
2,144
|
2,109
|
1,040
|
|||||||||
Environmental costs
|
1,727
|
1,314
|
2
|
|||||||||
Other operating expenses
|
1,122
|
850
|
3,907
|
|||||||||
Total
|
$
|
88,272
|
$
|
86,923
|
$
|
77,211
|
13. | Interest and Finance Costs |
2015
|
2014
|
2013
|
||||||||||
Interest expense
|
$
|
13,922
|
$
|
7,815
|
$
|
7,600
|
||||||
Amortization of financing costs
|
1,364
|
519
|
473
|
|||||||||
Commitment fees and other costs
|
269
|
93
|
67
|
|||||||||
Total
|
$
|
15,555
|
$
|
8,427
|
$
|
8,140
|
14. | Loss per Share |
2015
|
2014
|
2013
|
||||||||||
Net loss
|
$
|
(64,713
|
)
|
$
|
(10,268
|
)
|
$
|
(21,205
|
)
|
|||
Less dividends on series B preferred shares
|
$
|
(5,769
|
)
|
$
|
(5,080
|
)
|
$
|
-
|
||||
Net loss attributed to common stockholders
|
(70,482
|
)
|
(15,348
|
)
|
(21,205
|
)
|
||||||
Weighted average number of common shares, basic and diluted
|
79,518,009
|
81,292,290
|
81,328,390
|
|||||||||
Loss per share, basic and diluted
|
$
|
(0.89
|
)
|
$
|
(0.19
|
)
|
$
|
(0.26
|
)
|
|||
15. | Income Taxes |
16. | Financial Instruments |
17. | Subsequent Events |
(a) | New loan agreement: On January 7, 2016, the Company, through the three wholly owned subsidiaries with vessels under construction, entered into a secured loan agreement with the Export-Import Bank of China for a loan of up to $75,735 (Note 9) in order to finance part of the construction cost of the vessels (Note 5). The loan will be available for drawdown until March 12, 2017, or such later date as all the lenders may in their discretion agree and will mature latest by March 2032. |
(b) | Series B Preferred Stock Dividends: On January 15, 2016, 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, 2016. |
(c) | Vessels' acquisition: On February 4, 2016, the Company, through three separate wholly-owned subsidiaries, entered into three Memoranda of Agreement to acquire from a related party three Panamax vessels for an aggregate purchase price of $39,800, further reduced to $39,265 on March 4, 2016. The Company has agreed to acquire the vessels from entities affiliated with Mrs. Semiramis Paliou and Mrs. Aliki Paliou, each of whom is a family member of the Company's Chief Executive Officer and Chairman of the Board. Mrs. Semiramis Paliou is also a director of the Company. The transaction was approved unanimously by a committee of the Board of Directors established for the purpose of considering the transaction and consisting of the Company's independent directors and each of its executive directors other than Mrs. Semiramis Paliou and Mr. Simeon Palios. The agreed upon purchase price of the vessels was based, among other factors, on independent third party broker valuations obtained by the Company. Consummation of the purchases is subject to the Company obtaining bank financing from the sellers' existing lenders for substantially the entire purchase price of the vessels, thereby resulting in little or no current cash outlay on the part of the Company. Two of the vessels were delivered in March 2016 and the third is expected to be delivered later in April 2016. |
(d) | Annual Incentive Bonus: On February 23, 2016 the Company's Board of Directors approved a cash bonus of $775 to all employees and executive management of the Company, net of taxes and other charges and 2,150,000 shares of restricted common stock awards to executive management and non-executive directors, pursuant to the Company's equity incentive plans. The fair value of the restricted shares based on the closing price on the date of the Board of Directors' approval was $4,859 and will be recognized in income ratably over the restricted shares vesting period which will be 3 years. |
(e) | New Commitment Letter : On March 11, 2016, the Company through two wholly-owned subsidiaries signed a commitment letter with ABN AMRO for a loan of up to $25,755 to finance the acquisition cost of two of the vessels mentioned under (c) above. |
(A) | The number and type of securities or other property subject to each outstanding Award and the Exercise Price or grant price thereof, if applicable, shall be equitably adjusted; and |
(B) | The Administrator shall make such equitable adjustments, if any, as the Administrator may deem appropriate to reflect such Equity |
(A) | any failure by the grantee substantially to perform the grantee's employment or consulting/service or Board membership duties; |
(B) | any excessive unauthorized absenteeism by the grantee; |
(C) | any refusal by the grantee to obey the lawful orders of the Board or any other Person to whom the grantee reports; |
(D) | any act or omission by the grantee that is or may be injurious to the Company or any Affiliate, whether monetarily, reputationally or otherwise; |
(E) | any act by the grantee that is inconsistent with the best interests of the Company or any Affiliate; |
(F) | the grantee's gross negligence that is injurious to the Company or any Affiliate, whether monetarily, reputationally or otherwise; |
(G) | the grantee's material violation of any of the policies of the Company or any Affiliate, as applicable, including, without limitation, those policies relating to discrimination or sexual harassment; |
(H) | the grantee's material breach of his or her employment or service contract with the Company or any Affiliate; |
(I) | the grantee's unauthorized (1) removal from the premises of the Company or any Affiliate of any document (in any medium or form) relating to the Company or any Affiliate or the customers or clients of the Company or any Affiliate or (2) disclosure to any Person of any of the Company's, or any Affiliate's, confidential or proprietary information; |
(J) | the grantee's being convicted of, or entering a plea of guilty or nolo contendere to, any crime that constitutes a felony or involves moral turpitude; and |
(K) | the grantee's commission of any act involving dishonesty or fraud. |
(A) | who were directors of the Company on the first day of such period, or |
(B) | whose election or nomination for election to the Board was recommended or approved by at least a majority of the directors then still in office who were directors of the Company on the first day of such period, or whose election or nomination for election were so approved, |
FIRST SUPPLEMENTAL AGREEMENT
|
||
to the Loan Agreement dated 13 September 2011
|
||
1.
|
DEFINITIONS AND INTERPRETATION
|
2.
|
AMENDMENTS TO THE ORIGINAL LOAN AGREEMENT
|
3.
|
CONDITIONS PRECEDENT - UNDERTAKINGS
|
4.
|
REPRESENTATIONS AND WARRANTIES
|
5.
|
RECONFIRMATION
|
6.
|
INTEGRATION OF TERMS AND CONTINUITY OF THE SECURITY DOCUMENTS
|
7.
|
MISCELLANEOUS
|
8.
|
GOVERNING LAW AND JURISDICTION
|
9.
|
THIRD PARTY RIGHTS
|
1. | DEFINITIONS AND INTERPRETATION |
2. | AMENDMENTS TO THE ORIGINAL LOAN AGREEMENT |
3. | CONDITIONS PRECEDENT - UNDERTAKINGS |
4. | REPRESENTATIONS AND WARRANTIES |
5. | RECONFIRMATION |
6. | INTEGRATION OF TERMS AND CONTINUITY OF THE SECURITY DOCUMENTS |
7. | MISCELLANEOUS |
8. | GOVERNING LAW AND JURISDICTION |
9. | THIRD PARTY RIGHTS |
EXECUTED as a DEED by
Ms Margarita Veniou
for and on behalf of
the Borrower
BIKAR SHIPPING COMPANY INC.
in the presence of
|
/s/ Margarita Veniou
|
|
EXECUTED as a DEED by
Mr Ioannis Zafirakis
for and on behalf of
the Guarantor
DIANA SHIPPING INC.
in the presence of
|
/s/ Ioannis Zafirakis
|
|
EXECUTED as a DEED by
Mr Ioannis Zafirakis
for and on behalf of
the Manager
DIANA SHIPPING SERVICES S.A.
in the presence of
|
/s/ Ioannis Zafirakis
|
|
EXECUTED as a DEED by
Krikor Janikian |
/s/ Krikor Janikian
|
|
and by Christina Margelou
for and on behalf of
EMPORIKI BANK OF GREECE S.A.
in the presence of
|
/s/ Christina Margelou
|
1.
|
DEFINITIONS AND INTERPRETATION
|
2.
|
AMENDMENTS TO THE LOAN AGREEMENT
|
3.
|
CONDITIONS PRECEDENT
|
4.
|
REPRESENTATIONS AND WARRANTIES
|
5.
|
RECONFIRMATION - UNDERTAKINGS
|
6.
|
INTEGRATION OF TERMS
|
7.
|
MISCELLANEOUS
|
8.
|
GOVERNING LAW AND JURISDICTION
|
9.
|
THIRD PARTY RIGHTS
|
a) | be in writing delivered personally or by first-class prepaid letter (airmail if available), or cable or shall be served through a process server or, subject to Clause 10.07 of the Loan Agreement, by telefax; |
b) | be deemed to have been received, subject as otherwise provided in the Loan Agreement and the relevant Security Document, in the case of telefax, at the time of dispatch as per transmission report (provided that if the date of despatch is not a business day in the country of the addressee it shall be deemed to have been received at the opening of business on the next such business day) and in the case of a cable 24 hours after despatch and in the case of a letter when delivered or served personally or five (5) days after it has been put into the post; and |
c) | be sent: |
(1)
|
if to be sent to any Security Party, to
c/o Diana Shipping Services S.A.
Pendelis 16
Palaio Faliro
175 64 Athens
Greece
|
Fax no:+30 210 942 4975
|
||
Attention: Mr Andreas-Nikolaos Michalopoulos
|
||
(2)
|
if to be sent to the Bank, to
|
|
CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK,
9, Quai du Président Paul Doumer,
92920 Paris, La Défense cedex,
France
Fax no: +(331-41892987)
Attn: Shipping Department
|
Clause Heading
|
Page
|
1. PURPOSE, DEFINITIONS AND INTERPRETATION
|
3
|
2. THE LOAN
|
13
|
3. INTEREST
|
15
|
4. REPAYMENT — PREPAYMENT
|
18
|
5. PAYMENTS, TAXES AND COMPUTATION
|
20
|
6. REPRESENTATIONS AND WARRANTIES
|
21
|
7. CONDITIONS PRECEDENT
|
26
|
8. COVENANTS
|
30
|
9. EVENTS OF DEFAULT
|
39
|
10. INDEMNITIES - EXPENSES
|
44
|
11. SECURITY AND SET-OFF
|
47
|
12. UNLAWFULNESS, INCREASED COSTS
|
54
|
13. MISCELLANEOUS
|
56
|
SCHEDULES
|
|
1. INSURANCE REQUIREMENTS
|
|
2. DRAWDOWN NOTICE
|
|
3. COMPLIANCE CERTIFICATE
|
a) | all losses, liabilities, costs, charges, expenses, damages and outgoings of whatever nature, (including, without limitation, Taxes, repair costs, registration fees and insurance premiums, crew wages, repatriation expenses and seamen's pension fund dues) suffered, incurred, charged to or paid or committed to be paid by the Bank in connection with the exercise of the powers referred to in or granted by any of the Security Documents or otherwise payable by the Borrower in accordance with the terms of any of the Security Documents; |
b) | the expenses referred to in Clause 10.02 (a), (b) and (d) ; and |
c) | interest on all such losses, liabilities, costs, charges, expenses, damages and outgoings from the date on which the same were suffered, incurred or paid by the Bank until the date of receipt or recovery thereof (whether before or after judgement) at a rate per annum calculated in accordance with Clause 3.04 (as conclusively certified by the Bank); |
a) | Clause headings and the table of contents are inserted for convenience of reference only and shall be ignored in the interpretation of this Agreement. |
b) | Each of the terms defined in Clause 1.02 when used in plural and terms defined in plural or words used in plural (and unless in the specific clause or sentence is otherwise expressly specified) mean all of them collectively and/or each of them and/or anyone of them (even if this is not expressly so spelled out) as the context may require or permit. |
c) | Subject to any specific provision of this Agreement or of any assignment and/or participation or syndication agreement of any nature whatsoever, reference to each of the parties hereto and to the other Security Documents shall be deemed to be reference to and/or to include, as appropriate, their respective successors and permitted assigns. |
d) | Reference to a person shall be construed as including reference to an individual, firm, company, corporation, unincorporated body of persons or any State or any agency thereof. |
e) | Where the context so admits, words in the singular include the plural and vice versa. |
f) | The words "including" and "in particular" shall not be construed as limiting the generality of any foregoing words. |
g) | This Agreement and all documents referred to in this Agreement include the same as varied or supplemented from time to time. |
h) | Reference to this Agreement includes all the terms of this Agreement and any Schedules, Annexes or Appendices to this Agreement, which form an integral part of this Agreement. |
i) | Unless otherwise stated in respect of the Master Swap Agreement, reference to Clauses, Sub-Clauses and Schedules are to Clauses, Sub-Clauses and Schedules in this Agreement. |
j) | All obligations imposed on, or assumed by the Borrower and the Guarantors are joint and several even if not so expressed. |
k) | Reference to the opinion of the Bank or a determination or acceptance by the Bank or to documents, acts, or persons acceptable or satisfactory to the Bank or the like shall be construed as reference to opinion, determination, acceptance or satisfaction of the Bank at the sole discretion of the Bank and such opinion, determination, acceptance or satisfaction of the Bank shall be conclusive and binding on the Borrower (even if not expressly so spelled out in the particular clause) save for manifest error in respect of which the Borrower shall have the burden of proof. |
a) | the initial Interest Period in respect of the Loan (or - in case that the Commitment is agreed to be advanced in more than one advance - of each Advance) will commence on the date on which the Commitment (or - as the case may be - the relevant Advance) is advanced and each subsequent Interest Period will commence forthwith upon the expiry of the previous Interest Period; |
b) | in case that the Commitment is advanced by more than one advance, the initial Interest Period in respect of each Advance after the first Advance shall end on the same day as the then current Interest Period for the Loan; |
c) | if any Interest Period would otherwise overrun one or more Repayment Dates, then, in the case of the last Repayment Date, such Interest Period shall end on such Repayment Date, and in the case of any other Repayment Date or Dates the Loan shall be divided into parts so that there is one part equal to the amount(s) of the Repayment Instalment(s) due (in the currency in which the same is due) on each Repayment Date falling during that Interest Period and having an Interest Period ending on the relevant Repayment Date and another part equal to the amount of the balance of the Loan having an Interest Period determined in accordance with Clause 3.02 and the other provisions of this Clause 3.03; |
d) | in case of failure of the Borrower to specify the duration of an Interest Period in accordance with the provisions of Clause 3.02 and this Clause 3.03, such Interest Period shall have a duration of three (3) months unless another period shall be agreed between the Bank and the Borrower provided always that such period (whether of three (3) months or of different duration) shall comply with this Clause 3.03; and |
e) | if the Bank determines that the duration of an Interest Period specified by the Borrower in accordance with Clause 3.02 is not readily available, then that Interest Period shall have such duration as the Bank, in consultation with the Borrower, may determine. |
(a) | The giving of such notice by the Borrower will irrevocably commit the Borrower to prepay such amount as stated in such notice; |
(b) | Such prepayment may take place only on the last day of an Interest Period relating to the whole of the Loan provided, however, that if the Borrower shall request consent to make such prepayment on another day and the Bank shall accede to such request (it being in the sole discretion of the Bank to decide whether or not to do so) the Borrower will pay in addition to the amount to be prepaid, any such sum as may be payable to the Bank pursuant to Clause 10.01 and any costs from unwinding of any then existing hedging transactions; |
(c) | Each partial prepayment shall be equal to Dollars Five Hundred Thousand ($500,000) or higher integral multiple thereof or the balance of the Loan; |
(d) | Every notice of prepayment shall be effective only on actual receipt by the Bank, shall be irrevocable and shall oblige the Borrower to make such prepayment on the date specified; |
(e) | No amount prepaid may be re-borrowed; and |
(f) | The Borrower may not prepay the Loan or any part thereof save as expressly provided in this Agreement. |
a) | Due Incorporation/Valid Existence ) the Borrower, any other corporate Security Party and the Manager are incorporated and duly organised and validly existing and in good standing under the laws of their respective countries of incorporation and any other laws which are applicable to them, with power to own their property and assets, to carry on their business as the same is now being lawfully conducted and to purchase, own, finance and operate vessels, or manage vessels as the case may be as well as to undertake the obligations which have undertaken pursuant to the Security Documents; |
b) | ( Due Authority ) the entry into and performance of this Agreement and all the other Security Documents, the New Approved Charter and the Memorandum of Agreement are within the corporate powers of the Borrower, any other corporate Security Party and the Manager and have been duly authorised by all corporate, shareholders' and other necessary action required for the authorization and do not and would not contravene or result in breach of any applicable law, regulation, rule, judgment, decree or permit or contractual restriction which does, or may, bind any one or more of them or their shareholders or their Subsidiaries, or the documents defining the respective constitutions of any of them and do not and will not result in the creation or imposition of any security interest, lien, charge, or Encumbrance on any of their assets or those of any of their Subsidiaries in favour of any party other than the Bank; |
c) | ( No Default/ or litigation ) neither the Borrower nor any other Security Party or any other member of the Group is in default under this Agreement or any other agreement to which it is a party or by which it may be bound and no litigation, arbitration, tax claim or administrative proceeding is current or pending or (to its or its officers' knowledge) threatened, which, if adversely determined, would have a materially detrimental effect on the business assets or the financial condition of any of them; |
d) | ( Financial Information ) all information, accounts, statements of financial position, exhibits and reports furnished by or on behalf of any Security Party to the Bank in connection with the negotiation and preparation of this Agreement and each of the other Security Documents are true and accurate in all material respects and not misleading, do not omit material facts and all reasonable enquiries have been made to verify the facts and statements contained therein; there are no other facts the omission of which would make any fact or statement therein misleading and, in the case of accounts and statements of financial position, they have been prepared in accordance with Applicable Accounting Principles which have been consistently applied; |
e) | ( Financial Condition ) the financial condition of the Borrower, any other Security Party and the Manager has not suffered any material deterioration since that condition was last disclosed to the Bank; |
f) | ( No Immunity ) neither the Borrower nor any other Security Party or any of their respective assets are entitled to immunity on the grounds of sovereignty or otherwise from any legal action or proceeding (which shall include, without limitation, suit, attachment prior to judgment, execution or other enforcement); |
g) | ( Shipping Company ) the Borrower is and/or on the drawdown of the Commitment, will be a shipping company involved in the owning or managing of ships engaged in international voyages and earning profits in free foreign currency; |
h) | ( Commercial Benefit of the Corporate Guarantor ) the giving of the Guarantee by the Corporate Guarantor is to its best commercial benefit in that the Borrower is a wholly owned direct Subsidiary of the Corporate Guarantor and in that the Corporate Guarantor belongs to the same Group of companies as the Borrower and has close financial cooperation and mutual assistance with the Borrower and by lending its support to the Borrower through such guarantee it furthers its own business interests within the scope of its constitutional documents; |
i) | ( No established place of business in the United Kingdom or United States ) none of the Security Parties has, nor will any of them have during the term of the Loan, an established place of business in the United Kingdom or the United States of America; |
j) | ( Acting for its own account ) the Borrower, by entering into this Agreement, the Master Swap Agreement and the Security Documents, is acting on its own behalf and for its own account; |
k) | ( Information during negotiations ) all information furnished to the Bank during the negotiations of this Agreement is true and accurate; |
l) | ( No money laundering ) without prejudice to the generality of Clause 1.02, in relation to the borrowing by the Borrower of the Loan, the performance and discharge of its obligations and liabilities under the Security Documents, and the transactions and other arrangements effected or contemplated by the Security Documents to which the Borrower is a party, the Borrower confirms that the foregoing will not involve or lead to contravention of any law, official requirement or other regulatory measure or procedure implemented to combat "money laundering" (as defined in Article 1 of the Directive (91/308/EEC) of the Council of the European Communities); |
m) | (Shareholdings) |
(i) | the Borrower is a wholly-owned direct Subsidiary of the Corporate Guarantor; |
(ii) | all of the issued shares in the Manager are legally and beneficially owned by the Corporate Guarantor; |
(iii) | the aggregate number of shares of common stock that the Corporate Guarantor is authorised to issue is 200 million registered shares each of a par value of one cent (US$ 0.1) and the Corporate Guarantor is authorized to issue 25 million preferred shares each of a par value of one cent (US$ 0.1) which are publicly listed and traded permanently on the New York Stock Exchange (NYSE), out of which 82,573,508 common registered shares and nonepreferred registered shares have been issued and are fully paid up; |
(iv) | to the best of its knowledge and belief (having made due and careful enquiry), no person, or persons acting in concert (other than any financial institution acting as a passive investor), are the legal or ultimate beneficial owners of a higher percentage of the total issued share capital of the Corporate Guarantor, than the percentage of the total issued share capital of the Corporate Guarantor, beneficially owned by Mr Simeon Palios; and (iv) Mr. Simeon Palios is the Chief Executive Officer, the Chairman and a member of the board of directors of the Corporate Guarantor |
n) | (Solvency) |
a) | ( Licences/Authorization ) all licences, authorizations, consents or approvals necessary for the execution, validity, enforceability or admissibility in evidence of the Security Documents and all other documents executed or to be executed in connection therewith, have been obtained and complied with by the Borrower and any other Security Party; |
b) | ( Perfected Securities ) when duly executed, the Security Documents will create a perfected security interest in favour of the Bank, with the intended priority, in the assets and revenues intended to be covered, valid and enforceable against the Borrower, and any other Security Party; |
c) | ( No Notarisation/Filing/Recording ) save for the registration of any mortgage in the appropriate shipping registry, it is not necessary to ensure the legality, validity, enforceability or admissibility in evidence of this Agreement or any of the Security Documents that it or they or any other instrument be notarised, filed, recorded, registered or enrolled in any court, public office or elsewhere or that any stamp, registration or similar tax or charge be paid on or in relation to this Agreement or the Security Documents; |
d) | ( No Taxes ) no Taxes are imposed by deduction, withholding or otherwise on any payment to be made by any Security Party under this Agreement and/or any other of the Security Documents or are imposed on or by virtue of the execution or delivery of this Agreement and/or any other of the Security Documents or any document or instrument to be executed or delivered hereunder or thereunder. In case that any Tax exists now or will be imposed in the future, it will be borne by the Borrower; |
e) | ( Validity and Binding effect ) the Security Documents are (or upon their execution - and in the case of any mortgage upon its registration at the appropriate registry - will be) valid and binding and enforceable against the Borrower, all the other Security Parties and the Manager in accordance with their respective terms and conditions, and that there are no other agreements or arrangements which may adversely affect or conflict with the Security Documents or the security they create; |
f) | ( Pari passu ) the obligations imposed on the Borrower and any other Security Party by the Security Documents do and will constitute direct general and unconditional obligations of the Borrower and rank at least pari passu with all other present and future unsecured and unsubordinated Indebtedness of the Borrower with the exception of any obligations which are mandatorily preferred by law and not by contract; |
g) | ( Valid choice of Law ) the choice of law agreed to govern this Agreement and/or any other Security Document and the submission to the jurisdiction of the courts agreed in each of the Security Documents are or will be, on execution of the respective Security Documents, valid and binding on the Borrower and any other Security Party which is party thereto; |
h) | ( Subordinated indebtedness ) any Indebtedness of the Borrower or the Corporate Guarantor owing to any of its respective shareholders or other members of the Group is subordinated in all respects to the Borrower's obligations under this Agreement and the Master Swap Agreement (in the case of |
a) | Except as may already have been disclosed by the Borrower in writing to, and acknowledged in writing by, the Bank: |
i. | The provisions of all Environmental Laws, have been complied with by the Borrower, the other Relevant Parties and (to the best knowledge and belief of the Borrower) by their respective Environmental Affiliates; |
ii. | all Environmental Approvals have been obtained and are complied with by the Borrower, the other Relevant Parties and (to the best knowledge and belief of the Borrower) by their respective Environmental Affiliates; and |
iii. | Neither the Borrower nor any other Relevant Party nor (to the best knowledge and belief of the Borrower) any of their respective Environmental Affiliates has received notice of any Environmental Claim that any Relevant Party or any such Environmental Affiliate is not in compliance with any Environmental Law or any Environmental Approval; |
b) | except as may already have been disclosed by the Borrower in writing to, and acknowledged in writing by, the Bank there is no Environmental Claim pending or, (to the best knowledge and belief of the Borrower), threatened against the Borrower or the Vessel or any other Relevant Party or any other Relevant Ship or (to the best of knowledge and belief of the Borrower) any of their respective Environmental Affiliates; |
c) | except as may already have been disclosed by the Borrower in writing to, and acknowledged in writing, by the Bank there has been no emission, spill, release or discharge of a material of environmental concern from the Vessel or any other Relevant Ship owned by, managed by or chartered to the Borrower (or the Corporate Guarantor) nor (to the best of knowledge and belief of the Borrower) from any other Relevant Ship owned by, managed by or chartered to, any other Relevant Party which could give rise to any Environmental Claim. |
a) | ( Ownership/ Flag/ Seaworthiness/ Class/ Insurance ) the Vessel is and on the Drawdown Date, will be: |
i. | in the absolute and (save for any mortgage in favour of the Bank) unencumbered ownership of its Owner; |
ii. | registered with a registry and under Greek flag in the name of its Owner; |
iii. | operationally seaworthy and in every way fit for service; |
iv. | classed with a Classification Society which has been approved by the Bank in writing and the Classification is and will be free of all requirements, recommendations or notations save for the notations which, at the sole discretion of the Bank, do not affect the Classification; and |
v. | insured in accordance with the provisions of this Agreement; |
b) | ( No Charter ) save for the Approved Charter and unless otherwise permitted in writing by the Bank, the Vessel will on the drawdown of the Commitment (or as the case may be of each Advance) be subject to no charter or contract of affreightment nor to any agreement to enter into |
c) | ( No Encumbrances ) neither the Vessel, nor its Earnings, Requisition Compensation or Insurances nor any part thereof will, on the drawdown of the Commitment (or as the case may be of any Advance), be subject to any Encumbrances other than Encumbrances in favour of the Bank. |
d) | ( DOC and SMC ) on the Drawdown Date of the Commitment, the Manager will have a DOC for itself and an SMC in respect of the Vessel; and |
e) | ( ISPS Code ) on the Drawdown Date of the Commitment, the Borrower shall have a valid and current ISSC in respect of the Vessel and such Ship shall be in compliance with the ISPS Code. |
a) | A duly certified true copy of the Articles of Incorporation and By-Laws or the Memorandum and Articles of Association, or of any other constitutional documents, as the case may be, of each corporate Security Party and the Manager together with certified translations of the same in Greek, if so required by the Bank; |
b) | A recent certificate of incumbency of each corporate Security Party and the Manager issued by the appropriate authority and/or at the discretion of the Bank signed by the secretary or a director of each of them respectively, stating the corporate body which binds every one of them, the officers and/or the directors of each of them and containing specimens of their signatures; |
c) | A recent certificate as to the shareholding of the Borrower issued by an appropriate authority or, at the discretion of the Bank, signed by the secretary or a director of each of them as the case may be, stating respectively the full names and addresses of the person or persons beneficially entitled as shareholders/ stockholders of the entire issued and outstanding shares/ stock of each of them; |
d) | Minutes of meetings of the directors (or of any other body which binds them, if any) of each corporate Security Party and the Manager and Minutes of meetings of the shareholders of each corporate Security Party (with the exception of the Corporate Guarantor) at which there was approved the entry into, execution, delivery and performance of this Agreement, the Master Swap Agreement and the other Security Documents and any other documents executed or to be executed pursuant hereto or thereto to which the relevant corporate Security Party and/or the Manager is a party; |
e) | Evidence of the due authority of any person signing this Agreement, the Master Swap Agreement and the other Security Documents and any other documents executed or to be executed pursuant hereto or thereto on behalf of any corporate person; |
f) | Evidence that all necessary licences, consents, permits and authorizations (including exchange control ones) have been obtained by any Security Party and the Manager for the execution, delivery, validity, enforceability, admissibility in evidence and the due performance of the respective obligations under or pursuant to this Agreement, the Master Swap Agreement and the other Security Documents; |
g) | Any other documents or recent certificates or other evidence which would be required by the Bank in relation to any corporate Security Party and the Manager evidencing that each of the Security Parties and the Manager has been properly established, continues to exist validly and to be in good standing, which is the corporate body which binds the company, which is its present board of directors and shareholders (save for the Corporate Guarantor), that the execution and performance of the Security Documents has been duly authorized and generally that the representations in Clause 6 are correct in all respects. |
a) | A copy of the Memorandum of Agreement certified as true and complete by the legal counsel of the Borrower; |
b) | Evidence to the full satisfaction of the Bank, proving the Seller's title to the Vessel free of any Encumbrances, debts or claims of any nature whatsoever and in case that the Vessel is changing Registry, that the Vessel has been deleted from the previous Registry; |
c) | Duly certified copies of corporate documentation of the Seller - comparable at the discretion of the Bank to that provided in Clause 7.01 - proving the due incorporation and existence of the Seller and the due authorization of the sale of the Vessel and the execution of all documents required in connection therewith; and |
d) | Duly certified copy of the Bill of Sale, the protocol of delivery and acceptance of the Vessel and the relevant invoices. |
a) | The representations and warranties set out in Clause 6 and in each of the Security Documents are true and correct on and as of each such time as if each was made with respect to the facts and circumstances existing at such time; |
b) | No Event of Default shall have occurred and be continuing or would result from the drawdown; and |
c) | The Bank shall be satisfied that there has been no change in the ultimate ownership, management, operations or financial condition of any Security Party or any member of the Group which (change) might, in the sole opinion of the Bank, be detrimental to the interests of the Bank. |
(a) | Opinion(s) on such aspects of law as the Bank shall deem relevant to this Agreement and the other Security Documents and any other documents executed pursuant hereto or thereto at its sole discretion; |
(b) | Confirmation from any agents nominated in this Agreement and in the other Security Documents for the acceptance of any notice or service of process, that they consent to such nomination; and |
(c) | A receipt in writing in form and substance satisfactory to the Bank including an acknowledgement and admission of the Borrower and/or any other Security Party to the effect that the Commitment was drawn by the Borrower and a declaration by the Borrower that all conditions precedent have been fulfilled, that there is no Event of Default and that all the representations and warranties are true and correct. |
a) | (i)(Pari passu) ensure that the Indebtedness of the Borrower to the Bank under this Agreement and the Master Swap Agreement shall, without prejudice to the provisions of clauses 8.04 and 8.06 and the security intended to be created by the Security Documents, at all times rank at least pari passu with all its other present and future unsecured and unsubordinated Indebtedness with the exception of any obligations which are mandatorily preferred by law and not by contract (ii) (Subordination) ensure that the obligations (if any) of the Borrower to repay any loan advanced to it by its shareholder or any other member of the Group are at all times fully subordinated towards its obligations to the Bank under this Agreement and the other Security Documents and that any such loans'or advances are and remain at all times on terms and conditions acceptable to the Bank in all respects; |
a) | ( No Transfer of Assets ) not convey, assign, transfer, sell, abandon, lend or otherwise dispose of or deal with any of its undertakings, real or personal property, assets or rights, or revenues whether present or future (otherwise than by transfers, sales or disposals for full consideration in the ordinary course of trading but in any event excluding the Vessel) whether by one or a series of transactions related or not, without the prior written consent of the Bank; |
b) | ( No Encumbrance of Assets ) not allow any Encumbrance to subsist, arise or be created or extended over all or any part of its undertakings, property, assets or rights or revenues, whether present or future to secure or prefer any present or future Indebtedness or other liability or obligation of any Security Party (other than the Corporate Guarantor) or any other person without the prior written consent of the Bank. |
a) | maintain at all times a valid and current ISSC in respect of the Vessel; |
b) | immediately notify the Bank in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC in respect of the Vessel; and |
c) | procure that the Vessel will comply at all times with the ISPS Code. |
a) | ( Use of the Loan ) use the Loan for its benefit and under its full responsibility and exclusively for the purposes specified in clauses 1.01 of this Agreement; |
b) | ( Compliance with Covenants ) duly and punctually perform all obligations under this Agreement and the other Security Documents; |
c) | ( Payment on Demand ) pay to the Bank on demand any sum of money which is payable by the Borrower to the Bank under this Agreement but in respect of which it is not specified in any other Clause when it is due and payable; |
d) | ( Evidence of Compliance ) upon request by the Bank from time to time provide such information and evidence to the Bank as the Bank would reasonably require to demonstrate compliance with the covenants and undertakings set forth in this Agreement and any other Security Document; |
e) | ( Intra-Group transactions ) ensure that any transactions, agreements or other arrangements (if any) entered into by the Borrower with any members of the Group, are entered into on an arm's length basis and for full value and consideration; and |
f) | ( Consents and licences ) without prejudice to clauses 6.01 and 7, obtain or cause to be obtained, maintain in full force and effect and comply in all material respects with the conditions and restrictions (if any) imposed in, or in connection with, every consent, authorisation, licence or approval of governmental or public bodies or authorities or courts and do, or cause to be done, all other acts and things which may from time to time be necessary or desirable under applicable law for the continued due performance of all the obligations of the Security Parties under each of the Security Documents; |
a) | ( Validity ) ensure and procure that all governmental or other consents required by law and/or any other steps required for the validity, enforceability and legality of this Agreement and the other Security Documents are maintained in full force and effect and/or appropriately taken; |
b) | ( Earnings ) ensure and procure that, unless and until directed by the Bank otherwise (i)all the Earnings of the Vessel shall be paid to the Earnings Account and (ii)the persons from whom the Earnings are from time to time due are irrevocably instructed to pay them to the Earnings Account in accordance with the provisions hereof and of the relevant Security Documents; |
c) | ( Taxes ) pay all Taxes, assessments and other governmental charges when the same fall due, except to the extent that the same are being contested in good faith by appropriate proceedings and adequate reserves have been set aside for their payment if such proceedings fail; and |
d) | ( Additional Documents ) from time to time at the request of the Bank execute and deliver to the Bank or procure the execution and delivery to the Bank of all such documents as shall be deemed desirable at the sole discretion of the Bank for giving full effect to this Agreement, and for perfecting, protecting the value of or enforcing any rights or securities granted to the Bank under any one or more of this Agreement, the other Security Documents and any other documents executed pursuant hereto or thereto and in case that any Conditions Precedent have not been fulfilled prior to the Drawdown, such Conditions shall be complied with within five (5) days of Drawdown (unless the Bank agrees otherwise in writing) and failure to comply with this Covenant shall be an Event of Default. |
a) | Failure by the Borrower to pay any sum due from the Borrower under this Agreement and/or any of the other Security Documents when due, or, in the case of any sum payable on demand, within three (3) Banking Days of such demand; or |
b) | Failure by the Borrower to observe and perform any one or more of the covenants, terms or obligations contained in this Agreement (including Schedule 1) and/or any other Security Document relating to the Insurances; or |
c) | Any breach by the Borrower of or omission of the Borrower to observe any of the covenants, terms, obligations or undertakings under this Agreement and/or any of the other Security Documents (other than failure to pay any sum when due or to comply with any obligation concerning the Insurances) and, in respect of any such breach or omission which in the opinion of the Bank is capable of remedy, such action as the Bank may require shall not have been taken within seven (7) days of the Bank notifying the Borrower of such required action to remedy the breach or omission; or |
d) | An Event of Default or Potential Event of Default (in each case as defined in the Master Swap Agreement) has occurred and is continuing with the Borrower as the Defaulting Party (as defined in the Master Swap Agreement) under the Master Swap Agreement or an Early Termination Date has occurred or been or become capable of being effectively designated under the Master Swap Agreement by the Bank or the Master Swap Agreement is terminated, cancelled, suspended, rescinded or revoked or otherwise ceases to remain in full force and effect for any reason; or |
a) | ( Initial and Amendment expenses ) all expenses (including legal, printing and out-of-pocket expenses) incurred by the Bank in connection with the negotiation, preparation and execution of this Agreement and the other Security Documents and of any amendment or extension of or the granting of any waiver or consent under this Agreement and/or any of the Security Documents and/or in connection with any proposal by the Borrower to constitute additional security pursuant to Clause 8.05(c), whether any such security shall in fact be constituted or not; |
b) | ( Enforcement expenses ) all expenses (including legal and out-of-pocket expenses) incurred by the Bank in contemplation of, or otherwise in connection with, the enforcement of, or preservation of any rights under, this Agreement and/or any of the other Security Documents, or otherwise in respect of the moneys owing under this Agreement and/or any of the other Security Documents or the contemplation or preparation of the above, whether they have been effected or not; and |
c) | ( Other expenses ) any and all other Expenses as defined in Clause 1.02. |
d) | the legal costs of the Bank's appointed lawyer, in respect of the preparation of this Agreement and the other Security Documents as well as the legal costs of the foreign lawyers (if these are available) in respect of the registration of the Security Documents or any search or opinion given to the Bank in respect of the Security Parties or the Vessel or the Security Documents. The said legal costs to be due and payable on the date of drawdown. |
a) |
Express authority is hereby given by the Borrower to the Bank to accept (at the sole discretion of
the Bank) all tested or untested communications given by facsimile, cable or otherwise, regarding any or all of the notices, requests, instructions or other communications under this Agreement, subject to any restrictions which may be imposed by the Bank relating to such communications including, without limitation (if so required by the Bank), the obligation to confirm such communications by letter. |
b) | The Borrower shall recognise any and all of the said notices, requests, instructions or other communications as legal, valid and binding, when these notices, requests, instructions or communications come from the fax number mentioned in Clause 13.09 or any other fax number usually used by it or its managing company. |
c) | The Borrower hereby assumes full responsibility for the execution of the said notices, requests, instructions or communications by the Bank and promises and recognises that the Bank shall not be held responsible for any loss, liability or expense that may result from such notices, requests, instructions or other communications, except in cases of gross negligence or wilful misconduct by the Bank. It is hereby undertaken by the Borrower to indemnify in full the Bank from and against all actions, proceedings, damages, costs, claims, demands, expenses and any and all direct and/or indirect losses which the Bank or any third party may suffer, incur or sustain by reason of the Bank following such notices, requests, instructions or communications, except in cases of gross negligence or wilful misconduct by the Bank. |
d) | With regard to notices, requests, instructions or communications issued by electronic and/or mechanical processes (e.g. by facsimile), the risk of equipment malfunction, including, without limitation, transmission errors, omissions and distortions is assumed fully and accepted by the Borrower, except in cases of gross negligence or wilful misconduct by the Bank. |
e) | The risks of misunderstandings and errors of notices, requests, instructions or communications being given as mentioned above, are for the Borrower and the Bank will be indemnified in full pursuant to this Clause 10. |
f) | The Bank shall have the right to ask the Borrower to furnish any information the Bank may require to establish the authority of any person purporting to act on behalf of the Borrower for these notices, requests, instructions or communications but it is expressly agreed that there is no obligation for the Bank to do so. The Bank shall be fully protected in, and the Bank shall incur no liability to the Borrower for acting upon the said notices, requests, instructions or communications which were believed by the Bank in good faith to have been given by the Borrower or by any of their authorised representative(s). |
g) | It is undertaken by the Borrower to safeguard the function and the security of the electronic and mechanical appliance(s) such as fax(es), as well as the code word list, if any, and to take adequate precautions to protect it from loss and to prevent its terms becoming known to any persons not directly concerned with its use. The Borrower shall hold the Bank harmless and indemnified from all claims, losses, damages and expenses which the Bank may incur by reason of the failure of the Borrower to comply with the obligations under this Clause and/or this Agreement. |
h) | The Bank may at any time, without disclosing to the Borrower the reason (and such discretion of the Bank is expressly admitted by the Borrower hereby) refuse to execute the notices, requests, instructions or communications of the Borrower, or any part thereof given by fax without incurring any responsibility for loss, liability or expense arising out of such refusal. |
a) | Duly registered first priority maritime mortgage over the Vessel accompanied by deed of covenants as appropriate on the basis of the provisions of the applicable law providing the highest degree of security for the Bank (the "Mortgage" ); |
b) | First priority general assignment of all the Insurances and Earnings and Requisition Compensation of the Vessel in form and substance satisfactory to the Bank and respective notices of assignment (the "Assignment of Insurances and Earnings" ); |
c) | First priority specific assignment of the New Approved Charter in form and substance satisfactory to the Bank and respective notice of assignment and acknowledgement by the Approved Charterer in form and substance satisfactory to the Bank (the "Assignment of Charter" ); |
d) | The Corporate Guarantee; |
e) | A first priority pledge on the Earnings Account as per Clause 11.06 in form and substance satisfactory to the Bank (the "Earnings Account Pledge" ); |
f) | A first priority pledge on the Cash Collateral Account as per Clause 11.06 (a) in form and substance satisfactory to the Bank (the "Cash Collateral Account Pledge" ); |
g) | The Manager's Undertaking; |
h) | The New DSI Assignment of Insurances. |
a) | firstly in or towards payment of Expenses and all sums other than principal or interest which may be due to the Bank under this Agreement and the Security Documents or any of them at the time of application; |
b) | secondly in or towards any default interest; |
c) | thirdly in or towards any arrears of interest due in respect of the Loan or any part thereof; |
d) | fourthly in or towards repayment of the Loan whether the same is due and payable or not; |
e) | fifthly sums owing to the Bank under the Master Swap Agreement, the Master Agreement Security Deed any other documents executed or to be executed pursuant to such documents; |
f) | sixthly the surplus (if any) shall be paid to the Borrower, or to whomsoever else shall be entitled thereto. |
a) | ( Binding Effect ). This Agreement shall be binding upon and inure to the benefit of the Bank and the Borrower and their respective successors and assigns. |
b) | ( Assignment by the Borrower ). The Borrower and any other parties to the Security Documents may not assign any rights and/or obligations under this Agreement or any of the other Security Documents or any documents executed pursuant to this Agreement and/or the other Security Documents without the prior written consent of the Bank. |
c) | ( Assignment by the Bank ). The Bank may at any time, assign, transfer, or offer participations to other banks or financial institutions or any other person in whole or in part, or in any manner dispose of all or any of its rights and/or obligations arising or accruing under this Agreement or any of the other Security Documents or any documents executed pursuant to this Agreement and/or the other Security Documents. The Bank may disclose to a potential assignee, transferee or participant or to any other person who may propose entering into contractual relations with the Bank in relation to this Agreement such information about the Borrower and the Security Parties as the Bank shall consider appropriate. |
d) | ( Documentation ). If the Bank assigns, transfers or in any other manner grants participation in respect of all or any part of its rights or benefits or transfers all or any of its obligations as provided in this Clause 13.01 the Borrower undertakes, immediately on being requested to do so by the Bank, to enter into and procure that each Security Party enters into such documents as may be necessary or desirable to transfer to the assignee, transferee or participant all or the relevant part of the interest of the Bank in the Security Documents and all relevant references in this Agreement to the Bank shall thereafter be construed as a reference to the Bank and/or assignee, transferee or participant of the Bank to the extent of their respective interests and, in the case of a transfer of all or part of the obligations of the Bank, the Borrower shall thereafter look only to the assignee, transferee or participant in respect of that proportion of the obligations of the Bank under this Agreement assumed by such assignee, transferee or participant. The Borrower hereby expressly consents to any subsequent transfer of the rights and obligations of the Bank and undertakes that it shall join in and execute such supplemental or substitute agreements as may be necessary to enable the Bank to assign and/or transfer and/or grant participation in respect of its rights and obligations to another branch or to one or more banks or financial institutions in a syndicate or otherwise. In case that the circumstances provided for in Clauses 5.03, 5.04, 10.01 and 12 of this Agreement arise in the relations between the Bank and any participant to which the Bank may offer participation, the Borrower shall make the relevant payments provided for in the said Clauses 5.03, 5.04, 10.01 and 12 to the Bank for onward payment to the participant. |
e) | ( Change of Lending Branch ). The Bank shall be at liberty to transfer the Loan to any branch or branches, and upon notification of any such transfer, the word "Bank" in this Agreement and in the other Security Documents shall mean the Bank, acting through such branch or branches and the terms and provisions of this Agreement and of the other Security Documents shall be construed accordingly. |
a) | ( Language ). All certificates, instruments and other documents to be delivered under or supplied in connection with this Agreement or any of the other Security Documents shall be in the Greek or the English language (or such other language as the Bank shall agree) or shall be accompanied by a certified Greek translation upon which the Bank shall be entitled to rely. |
b) | ( Certification of documents ). Any copies of documents delivered to the Bank shall be duly certified as true, complete and accurate copies by appropriate authorities or legal counsel practicing in Greece or otherwise as it will be acceptable to the Bank at the sole discretion of the Bank. |
c) | ( Certification of signature ). Signatures on Board or shareholder resolutions, Secretary's certificates and any other documents are, at the discretion of the Bank, to be verified for their genuineness by appropriate Consul or other competent authority. |
a) | be in writing delivered personally or by first-class prepaid letter (airmail if available), or cable or shall be served through a process server or subject to Clause 10.07 by fax; |
b) | be deemed to have been received, subject as otherwise provided in this Agreement or the relevant Security Document, in the case of fax, at the time of dispatch as per transmission report (provided that if the date of despatch is not a business day in the country of the addressee it shall be deemed to have been received at the opening of business on the next such business day) and in the case of a cable 24 hours after despatch and in the case of a letter when delivered or served personally or five (5) days after it has been put into the post; and |
c) | be sent: |
(1)
|
if to be sent to any Security Party, to
c/o Diana Shipping Services S.A.
Pendelis 16
Palaio Faliro
175 64 Athens
Greece
Fax no: +30 210 942 4975
Attention: Mr Andreas-Nikolaos Michalopoulos
|
|
(2)
|
if to be sent to the Bank, to
CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK,
9, Quai du Président Paul Doumer,
92920 Paris, La Défense cedex,
France
Fax no: +(33) 141 89 29 87
Attn: Shipping Department
|
a) | Each of the parties hereto agree and undertake to keep confidential any documentation and any confidential information concerning the business, affairs, directors or employees of the other which comes into its possession during this Agreement and not to use any such documentation, information for any purpose other than for which it was provided. |
b) | The Borrower acknowledges and accepts that the Bank may be required by law or that it may be appropriate for the Bank to disclose information and deliver documentation relating to the Borrower and the transactions and matters in relation to this Agreement and/or the other Security Documents to governmental or regulatory agencies and authorities. |
c) |
The Borrower acknowledges and accepts that in case of occurrence of any of the Events of Default
the Bank may disclose information and deliver documentation relating to the Borrower and the transactions and matters in relation to this Agreement and/or the other Security Documents to third parties including in particular any technical advisors, accountants and legal advisors to the extend that this is necessary for the enforcement or the contemplation of enforcement of the Bank's rights or for any other purpose for which in the opinion of the Bank, such disclosure should be useful or appropriate for the interests of the Bank or otherwise and the Borrower expressly authorises any such disclosure and delivery. |
d) | The Borrower acknowledges and accepts that the Bank may be prohibited or it may be inappropriate for the Bank to disclose information to the Borrower by reason of law or duties of confidentiality owed or to be owed to other persons. |
Date: ……………..
|
EXECUTED as a DEED by
|
||
Mr Andreas Nikolaos Michalopoulos
|
/s/
Andreas Nikolaos Michalopoulos
|
|
for and on behalf of
|
||
the Borrower
|
||
BIKAR SHIPPING COMPANY INC.
|
||
in the presence of
|
||
/s/ Vasipelos Skoutenis | ||
EXECUTED as a DEED by
|
||
Mr Anastasios Margaronis
|
/s/
Anastasios Margaronis
|
|
for and on behalf of
|
||
the Guarantor
|
||
DIANA SHIPPING INC.
|
||
in the presence of
|
||
/s/ Vasipelos Skoutenis | ||
EXECUTED as a DEED by
|
||
Ms Margarita Veniou
|
/s/
Margarita Veniou
|
|
for and on behalf of
|
||
the Manager
|
||
DIANA SHIPPING SERVICES S.A.
|
||
in the presence of
|
||
/s/ Vasipelos Skoutenis | ||
EXECUTED as a DEED by
|
||
and by Eltychia Strintzi
|
/s/ Eltychia Strintzi
|
|
for and on behalf of
|
||
CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK
|
||
in the presence of
|
||
/s/ Vasipelos Skoutenis | ||
Witness to all above signatures
|
||
Name: Vasipelos Skoutenis
|
||
Address: 57 Notara Street, 185 55 Piraeus, Greece
|
||
Occupation: Attorney-at-Law
|
||
(1) | DIANA SHIPPING INC., a corporation incorporated under the laws of The Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 (the " Lender "), as lender; |
(2) | ELUK SHIPPING COMPANY INC., a corporation incorporated under the laws of The Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 and any wholly-owned subsidiary of the Guarantor that becomes an Additional Borrower pursuant to Section 12 hereof (each a " Borrower ", collectively the "Borrowers"), as borrowers; and |
(3) | DIANA CONTAINERSHIPS INC., a corporation incorporated under the laws of The Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 (the " Guarantor "), as guarantor. |
(A) | The definition of "Indebtedness" set forth in Section 1.1 of the Loan Agreement is deleted in its entirety and replaced with the following: |
(C) | Confirmation of Agreement . Except as expressly set forth herein, the Agreement is ratified and confirmed in all respects and shall remain in full force and effect in accordance with its terms, and each reference in the Agreement to "this Agreement" shall mean the Agreement as amended by this Amendment. |
(D) | Counterparts; Effectiveness . This Amendment may be executed in any number of counterparts (including by facsimile) and by different parties hereto in separate counterparts, with the same effect as if all parties had signed the same document. All such counterparts shall be deemed an original, shall be construed together and shall constitute one and the same instrument. This Amendment shall become effective when each party hereto shall have received counterparts hereof signed by all of the other parties hereto. |
(E) | Governing Law . The laws of the State of New York shall govern the enforceability and validity of this Agreement, the construction of its terms and the interpretation of the rights and duties of the parties, without regard to the principles of conflicts of laws thereof. |
BORROWER
|
|||
SIGNED
by
|
)
|
||
Margarita Veniou
|
)
|
/s/ Margarita Veniou
|
|
for and on behalf of
|
)
|
||
Eluk Shipping Company Inc.
|
)
|
||
in the presence of:
|
)
|
/s/ Ioannis Zafirakis
|
|
Ioannis Zafirakis
|
|||
GUARANTOR
|
|||
SIGNED
by
|
)
|
||
Anastasios Margaronis
|
)
|
/s/ Anastasios Margaronis
|
|
for and on behalf of
|
)
|
||
Diana Containerships Inc.
|
)
|
||
in the presence of:
|
)
|
/s/ Ioannis Zafirakis
|
|
Ioannis Zafirakis
|
|||
LENDER
|
|||
SIGNED
by
|
)
|
||
Simeon Palios
|
)
|
/s/ Simeon Palios
|
|
for and on behalf of
|
)
|
||
Diana Shipping Inc.
|
)
|
||
in the presence of:
|
)
|
/s/ Ioannis Zafirakis
|
|
)
|
Ioannis Zafirakis
|
||
(1) | DIANA SHIPPING INC., a corporation incorporated under the laws of The Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 (the " Lender "), as lender; |
(2) | ELUK SHIPPING COMPANY INC., a corporation incorporated under the laws of The Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 and any wholly-owned subsidiary of the Guarantor that becomes an Additional Borrower pursuant to Section 12 hereof (each a " Borrower ", collectively the "Borrowers"), as borrowers; and |
(3) | DIANA CONTAINERSHIPS INC., a corporation incorporated under the laws of The Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 (the " Guarantor "), as guarantor. |
(A) | Section 10.1 of the Loan Agreement is deleted in its entirety and replaced with the following: |
10.1 | Back End Fee. The Borrowers, jointly and severally, agree to pay to the Lender on the date of this Amendment a back end fee in an amount equal to one and one quarter per cent. (1.25%) per annum of the total amount of the Loan outstanding (the "Back End Fee") in respect of the period commencing on the Drawdown Date(s) and ending on the date of this Amendment. |
(B) | The Loan Agreement shall be amended to add a new Section 10.2 as follows: |
10.2 | The Borrowers, jointly and severally, agree to pay to the Lender on the Repayment Date a fee in an amount of $200,000. |
(C) | The definition of "Margin" in Section 1.1 of the Loan Agreement shall be deleted in its entirety and replaced with the following: |
(D) | The Loan Agreement shall be amended to add a new Section 2.3 as follows: |
2.3 | Subordination. Each Borrower, the Guarantor and the Lender agree that the Loan shall be legally subordinated to indebtedness under a term loan with The Royal Bank of Scotland pic ("RBS") in the amount of up to $148,000,000 (the "RBS Term Loan") and exposure under an interest rate management facility (together with the RBS Term Loan, the "RBS Facility") entered into by the Guarantor and certain of its subsidiaries pursuant to an offer letter received by the Guarantor from RBS, dated July 30, 2015. |
(E) | The definition of "Repayment Date" in Section 1.1 of the Loan Agreement shall be deleted in its entirety and replaced with the following: |
(F) | Section 6.2 of the Loan Agreement is deleted in its entirety and replaced with the following: |
6.2 | Repayment Installments. The Borrowers jointly and severally agree to repay the principal amount of the Loan in equal installments on the last day of each Interest Period (excluding the Repayment Date) in amounts totaling $5,000,000 per calendar year, provided that the amount to be repaid pursuant to this Section 6.2 shall not exceed $32,500,000 in the aggregate. |
6.3 | Voluntary prepayment. After the RBS Facility shall have been paid in full, each Borrower may prepay the whole or any part of the Loan, without penalty, at any time during the term of the Loan. No prepayment of the Loan shall be made other than in accordance with this Section 6.3. |
(G) | Pursuant to Section 9.2 of the Loan Agreement, the Lender hereby consents to the entry by the Guarantor and certain of its subsidiaries into the RBS Facility. |
(H) | Confirmation of Agreement . Except as expressly set forth herein, the Agreement is ratified and confirmed in all respects and shall remain in full force and effect in accordance with its terms, and each reference in the Agreement to "this Agreement" shall mean the Agreement as amended by this Amendment. |
(I) | Counterparts; Effectiveness . This Amendment may be executed in any number of counterparts (including by facsimile) and by different parties hereto in separate counterparts, with the same effect as if all parties had signed the same document. |
(J) | Governing Law . The laws of the State of New York shall govern the enforceability and validity of this Agreement, the construction of its terms and the interpretation of the rights and duties of the parties, without regard to the principles of conflicts of laws thereof. |
BORROWER
|
||
SIGNED
by
|
)
|
|
Margarita Veniou
|
)
|
/s/ Margarita Veniou
|
for and on behalf of
|
)
|
|
Eluk Shipping Company Inc
|
)
|
|
in the presence of:
|
)
|
/s/ Ioannis Zafirakis
|
Ioannis Zafirakis | ||
GUARANTOR
|
)
|
|
SIGNED
by
|
)
|
|
Anastasios Margaronis
|
)
|
/s/ Anastasios Margaronis
|
for and on behalf of
|
)
|
|
Diana Containerships Inc.
|
)
|
|
in the presence of:
|
)
|
/s/ Ioannis Zafirakis
|
Ioannis Zafirakis | ||
LENDER SIGNED
|
||
by Ioannis Zafirakis
|
/s/ Ioannis Zafirakis
|
|
for and on behalf of
|
||
Diana Shipping Inc.
|
||
in the presence of:
|
/s/ Margarita Veniou
|
|
Margarita Veniou | ||
(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.
Ymittou 6, Palaio Faliro, 175 64
Athens, Greece
Telephone: +30 210 9485360
Telefax: +30 210 9401810
Attn: Director and President
|
Clause
|
Page
|
|
1
|
Interpretation
|
1
|
2
|
Facility
|
17
|
3
|
Position of the Lenders, the Swap Bank and the Majority Lenders
|
17
|
4
|
Drawdown
|
20
|
5
|
Interest
|
21
|
6
|
Interest Periods
|
23
|
7
|
Default Interest
|
23
|
8
|
Repayment and Prepayment
|
25
|
9
|
Conditions Precedent
|
27
|
10
|
Representations and Warranties
|
28
|
11
|
General Undertakings
|
31
|
12
|
Corporate Undertakings
|
37
|
13
|
Insurance
|
38
|
14
|
Ship Covenants
|
43
|
15
|
Security Cover
|
47
|
16
|
Payments and Calculations
|
49
|
17
|
Application of Receipts
|
51
|
18
|
Application of Earnings; Swap Payments
|
52
|
19
|
Events of Default
|
53
|
20
|
Fees and Expenses
|
57
|
21
|
Indemnities
|
59
|
22
|
No Set-Off or Tax Deduction
|
62
|
23
|
Illegality, etc.
|
64
|
24
|
Increased Costs
|
64
|
25
|
Set-Off
|
66
|
26
|
Transfers and Changes in Lending Offices
|
67
|
27
|
Variations and Waivers
|
71
|
28
|
Notices
|
72
|
29
|
Joint and Several Liability
|
74
|
30
|
Supplemental
|
75
|
31
|
Confidentiality
|
76
|
32
|
Law and Jurisdiction
|
78
|
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 Pages
|
90
|
(1) | TUVALU SHIPPING COMPANY INC., JABAT SHIPPING COMPANY INC. and BIKINI SHIPPING COMPANY INC., as joint and several Borrowers; |
(2) | THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1, as Lenders; |
(3) | ABN AMRO BANK N.V., as Swap Bank; |
(4) | ABN AMRO BANK N.V., as Agent; |
(5) | ABN AMRO BANK N.V., as Arranger; and |
(6) | ABN AMRO BANK N.V., as Security Trustee. |
(A) | The Lenders have agreed to make available to the Borrowers a senior secured term loan facility in an amount of up to the lesser of (i) US$53,000,000 and (ii) 66 per cent. of the aggregate market value (determined pursuant to paragraph 5 of Schedule 3, Part B) of two Kamsarmax bulk carriers named respectively "MYRTO" and "MAIA" and a Capesize bulk carrier named "NEW YORK", in a single advance, for the purpose of financing part of the aggregate acquisition cost of those ships. |
(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 pad passu in the security to be granted to the Security Trustee pursuant to this Agreement. |
1. | INTERPRETATION |
1.1 | Definitions |
(a) | 30 June 2015 (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, a 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 |
(b) | any further guidance or standards published by the Basel Committee on Banking Supervision relating to "Basel III"; |
(a) | is or becomes public information other than as a direct or indirect result of any breach by a Creditor Party of Clause 31; or |
(b) | is identified in writing at the time of delivery as non-confidential by any member of the Group or Security Party or any of its advisers; or |
(c) | is known by the Creditor Parties before the date the information is disclosed to it or is lawfully obtained by the Creditor Parties after that date, from a source which is, as far as the Creditor Parties are aware, unconnected with the Group and which, in either case, as far as the Lender is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality; |
(a) | it is entered into by the Borrowers pursuant to the Master Agreement with the Swap Bank which, at the time the Transaction is entered into, is also a Lender; |
(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 |
(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) | 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 IRS, 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) | the Shares Pledges; |
(j) | the Initial Charter Assignment; |
(k) | the Approved Manager's Undertakings; |
(l) | any 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) | 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 rate per annum equal to the offered quotation for deposits in Dollars for a period equal to, or as near as possible equal to, the relevant Interest Period which appears on the Screen Rate; or |
(b) | if no rate is quoted on the Screen Rate, the rate per annum determined by the Agent to be the rate per annum notified to the Agent by the Reference Bank as the rate at which deposits in Dollars are offered to the Reference Bank by leading banks in the London Interbank Market at the Reference Bank's request at or about 11.00 a.m. (London time) on the Quotation Date for that Interest Period for a period equal to that Interest Period and for delivery on the first Business Day of it, |
(a) | before the Loan has been advanced, Lenders whose Commitments total 66.66 per cent. of the Total Commitments; and |
(b) | after the Loan has been advanced, Lenders whose Contributions total 66.66 per cent. of the Loan; |
(a) | the business, operations, property, condition (financial or otherwise) or prospects of the Borrowers (or any of them) and/or any of the Security Parties and/or the Group; or |
(b) | the ability of a Borrower or a Security Party to perform its obligations under the Finance Documents; or |
(c) | the validity or enforceability of, or the effectiveness or ranking of any Security Interest granted or purported to be granted pursuant to any of, the Finance Documents or the rights or remedies of any Creditor Party under any of the 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 where the Borrower is actively prosecuting or defending such proceedings or arbitration in good faith; |
(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; and |
(h) | a right of pledge (and set-off) under and pursuant to the general conditions of ABN AMRO Bank N.V.; |
(a) | any Finance Document; |
(b) | any policy or contract of insurance contemplated by or referred to in Clause 13 or any other provision of this Agreement or another Finance Document; |
(c) | any other document contemplated by or referred to in any Finance Document; and |
(d) | any document which has been or is at any time sent by or to a Servicing Bank in contemplation of or in connection with any Finance Document or any policy, contract or document falling within paragraphs (b) or (c); |
(a) | England and Wales; |
(b) | the country under the laws of which the company is incorporated or formed; |
(c) | a country in which the company has the centre of its main interests or in which the company's central management and control is or has recently been exercised; |
(d) | a country in which the overall net income of the company is subject to corporation tax, income tax or any similar tax; |
(e) | a country in which assets of the company (other than securities issued by, or loans to, related companies) having a substantial value are situated, in which the company maintains a branch or permanent place of business, or in which a Security Interest created by the company must or should be registered in order to ensure its validity or priority; and |
(f) | a country the courts of which have jurisdiction to make a winding up, administration or similar order in relation to the company, whether as main or territorial or ancillary proceedings, or which would have such jurisdiction if their assistance were requested by the courts of a country referred to in paragraphs (b) or (c); |
(a) | any transaction or matter contemplated by, arising out of, or in connection with a Pertinent Document; or |
(b) | any statement relating to a Pertinent Document or to a transaction or matter falling within paragraph (a), |
(a) | a mortgage, charge (whether fixed or floating) or pledge, any maritime or other lien or any other security interest of any kind; |
(b) | the security rights of a plaintiff under an action in rem; and |
(c) | any arrangement entered into by a person (A) the effect of which is to place another person (B) in a position which is similar, in economic terms, to the position in which B would have been had he held a security interest over an asset of A; but this paragraph (c) does not apply to a right of set off or combination of accounts conferred by the standard terms of business of a bank or financial institution; |
(a) | all amounts which have become due for payment by the 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) | none 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; and |
(d) | the Agent, the Security Trustee, the Arranger, the Swap Bank 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 a Borrower or a Security Party or in any present or possible future proceeding relating to a Finance Document or any asset covered (or previously covered) by a Security Interest created by a Finance Document; |
(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; |
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 | 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; |
(d) | a Potential 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; and |
(e) | Clauses 1.1 to 1.4 apply unless the contrary intention appears. |
1.5 | Headings |
2. | FACILITY |
2.1 | Amount of facility |
2.2 | Lenders' participations in Loan |
2.3 | Purpose of Loan |
3. | POSITION OF THE LENDERS, THE SWAP BANK 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 a Borrower or a Security Party under or connected with a Finance Document; or |
(b) | any misrepresentation or breach of warranty by a 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); 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. |
3.5 | 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 |
3.7 | Parallel debt |
(a) | Each Borrower irrevocably and unconditionally undertakes to pay to the Security Trustee amounts equal to, and in the currency or currencies of, its Corresponding Debt. |
(b) | The Parallel Debt of a Borrower: |
(i) | shall become due and payable at the same time as its Corresponding Debt; |
(ii) | is independent and separate from, and without prejudice to, its Corresponding Debt. |
(c) | For the purposes of this Clause, the Security Trustee: |
(i) | is the independent and separate creditor of all the Parallel Debt; |
(ii) | acts in its own name and not as agent, representative or trustee of the Creditor Parties and its claims in respect of the Parallel Debt shall not be held on trust; and |
(iii) | shall have the independent and separate right to demand payment of any or all the Parallel Debt in its own name (including, without limitation, through any suit, execution, enforcement of security, recovery of guarantees and applications for and voting in any kind of insolvency proceeding). |
(d) | The Parallel Debt of a Borrower shall be (a) decreased to the extent that its Corresponding Debt has been irrevocably and unconditionally paid or discharged and (b) increased to the extent that its Corresponding Debt has increased, and the Corresponding Debt of a Borrower shall be (x) decreased to the extent that its Parallel Debt has been irrevocably and unconditionally paid or discharged and (y) increased to the extent that its Parallel Debt has increased, in each case provided that the Parallel Debt of a Borrower shall never exceed its Corresponding Debt. |
(e) | All amounts received or recovered by the Security Trustee in connection with this Clause, to the extent permitted by applicable law, shall be applied in accordance with Clause 17 (Application of receipts). |
3.8 | Lender incorporated or having its registered office in the Federal Republic of Germany |
(a) | for the purposes of determining whether approval of the Majority Lenders is obtained the references in the definition of "Majority Lenders" to 66.66 per cent. of the Total Commitments and to 66.66 per cent. of the Loan shall for this purpose be construed to refer to 66.66 per cent. of the Total Commitments or, as the case may be, the Loan only taking account of the other Commitments of, or as the case may be, the participation in the Loan of, the Lenders and ignoring the Commitment of or, as the case may be, the participation in the Loan of, the Lender incorporated or having its registered office in the Federal Republic of Germany; and an action taken by the Majority Lenders as such definition is modified by this paragraph (a) shall be valid in the applicable circumstances and binding all parties; and |
(b) | for the purposes of determining whether the approval of all Lenders is obtained, all Lenders shall be construed to mean the other Lenders ignoring the Lender incorporated or having its registered office in the Federal Republic of Germany and an action taken by all Lenders as modified by this paragraph (b) shall be valid in the applicable circumstances and binding on all the parties of this Agreement. |
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 equal to the lesser of (i) $53,000,000 and (ii) 66 per cent. of the aggregate Initial Market Value of the Ships; and |
(c) | the Loan shall be applied in financing part of the aggregate acquisition cost of each Ship. |
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 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 Loan to third party |
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 quoted in the Screen Rate 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, Lenders having Contributions together amounting to 50 per cent. or more of the Loan (or, if the Loan has not been made, Commitments amounting to 50 per cent. or more of the Total Commitments) notify the Agent that LIBOR fixed by the Agent would not accurately reflect the cost to those Lenders of funding their respective Contributions (or any part of them) during the Interest Period in the London Interbank Market at or about 11.00 a.m. (London time) on the Quotation Date for the Interest Period; or |
(c) | at least 1 Business Day before the start of an Interest Period, the Agent is notified by a Lender (the "Affected Lender") that for any reason it is unable to obtain Dollars in the |
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 advance the Loan; and |
(b) | in a case falling within Clause 5.7(c), the Affected Lender's obligation to participate in the Loan, |
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 Cost (if any). |
5.15 | Application of prepayment |
6. | INTEREST PERIODS |
6.1 | Commencement of Interest Periods |
6.2 | Duration of normal Interest Periods |
(a) | 1, 3, 6 or 9 months as notified by the Borrowers to the Agent not later than 11.00 a.m. (Rotterdam time) 3 Business Days before the commencement of the Interest Period Provided that the Borrowers may not select a 1-month Interest Period more than 4 times per calendar year; 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 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 (or any of them) 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 7.3(b); or |
(b) | in the case of any other overdue amount, the rate set out at Clause 7.3(b). |
7.3 | Calculation of default rate of interest The rates referred to in Clause 7.2 are: |
(a) | the rate applicable to the overdue principal amount immediately prior to the relevant date (but only for any unexpired part of any then current Interest Period applicable to it); 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
The Borrowers shall repay the Loan by: |
(a) | 24 equal consecutive three-monthly instalments (the "Repayment Instalments" and each a "Repayment Instalment") in the amount of $1,050,000 each; and |
(b) | a balloon instalment in the amount of $27,800,000 (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 5 Business Days prior written notice specifying the amount to be prepaid, the date on which the prepayment is to be made and the manner of application of such prepayment; |
(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 |
(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) | a Ship is sold or becomes a Total Loss: |
(i) | in the case of a sale, on or before the date on which the Mortgage on that Ship is released; or |
(ii) | 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; or |
(b) | without the prior written consent of the Agent (to be given on the instructions of the Majority Lenders) there is a Change of Control, on the date on which the Change of Control occurred. |
(a) | in the case of the sale or Total Loss of a Ship, an amount which, after the application of the prepayment to be made pursuant to Clause 8.8(a), results in the security cover ratio set out in Clause 15.1 being at least equal to the greater of (a) 125 per cent. and (b) the percentage which applied immediately prior to the sale or Total Loss; and |
(b) | in the case of a Change of Control, the Loan and all other amounts then outstanding under the Finance Documents in full. |
8.9 | Amounts payable on prepayment |
8.10 | Application of partial prepayment |
(a) | Clause 8.4, shall be applied in the manner specified by the Borrowers in the notice referred to in Clause 8.5(b); and |
(b) | Clauses 8.8, 8.12, 15.2, 23.3 or 24.5, shall be applied pro rata against the then outstanding Repayment Instalments and the Balloon Instalment. |
8.11 | No reborrowing |
8.12 | Unwinding of Designated Transactions |
9. | CONDITIONS PRECEDENT |
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; and |
(ii) | payment of any expenses pursuant to Clause 20.2; |
(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: |
(i) | the documents described in Part B of Schedule 3 in form and substance satisfactory to the Agent and its lawyers; |
(ii) | payment of the arrangement fee pursuant to Clause 20.1(a) and all accrued commitment fee pursuant to Clause 20.1(b); and |
(iii) | payment of any expenses pursuant to Clause 20.2; |
(c) | 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 Effect; |
(d) | 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 |
(e) | 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 |
10.3 | Shares capital and ownership |
10.4 | Corporate power |
(a) | to carry out its business carried on or to be carried on by it and own its assets owned or to be owned by it; |
(b) | to register permanently the Ship owned by it in its name under an Approved Flag; |
(c) | to execute the Finance Documents to which that Borrower is a party; and |
(d) | 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; pari passu ranking; admissibility in evidence; effective Security Interests |
(a) | are in full force and effect; |
(b) | rank at least pari passu with all its other present and future unsecured liabilities, except for liabilities which are mandatorily preferred by law; |
(c) | constitute that Borrower's legal, valid and binding obligations enforceable against that Borrower in accordance with their respective terms; and |
(d) | 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; stamp duty |
10.10 | No default |
10.11 | Information |
10.12 | No litigation |
10.13 | Validity and completeness of Initial Charter |
(a) | the copy of the 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 the Initial Charter disclosed to the Agent before the date of this Agreement, no amendments or additions to the Initial Charter have been agreed nor has Borrower C or the Initial Charterer waived any of their respective rights under the 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; anti-bribery |
(a) | Without prejudice to the generality of Clause 2.3, in relation to the borrowing by the Borrowers of the Loan, the performance and discharge of their obligations and liabilities under the Finance Documents, and the transactions and other arrangements affected or contemplated by the Finance Documents to which a Borrower is a party, the Borrowers confirm (i) that they are acting for their own account; (ii) that they will use the proceeds of the Loan for their own benefit, under their full responsibility and exclusively for the purposes specified in this Agreement; and (iii) that the foregoing will not involve or lead to a contravention of any law, official requirement or other regulatory measure or procedure implemented to combat "money laundering" (as defined in Article 1 of Directive 2005/60/EC of the European Parliament and of the Council). |
(b) | The Borrowers will promptly inform the Agent by written notice, if they are not or cease to be the beneficiary and will provide in writing the name and address of the beneficiary. |
(c) | The Agent shall promptly notify the Lenders of any written notice it receives under this Clause 10.17. |
10.18 | No immunity |
10.19 | Title and ownership |
10.20 | Pali passu ranking |
10.21 | PATRIOT Act |
10.22 | Repetition |
(a) | Clause 10 shall be deemed to be repeated by the Borrowers: |
(i) | on the date of service of the Drawdown Notice; |
(ii) | on the Drawdown Date; and |
(b) | Clauses 10.2, 10.3, 10.4, 10.6, 10.7, 10.14, 10.17, and 10.20 on the first day of each Interest Period, |
11. | GENERAL UNDERTAKINGS |
11.1 | General |
11.2 | Title; negative pledge and pail passu ranking |
(a) | hold the legal title to, and own the entire beneficial interest in the Ship owned by it, her Insurances and her 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; |
(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); and |
(c) | procure that its liabilities under the Finance Documents to which it is a party do and will rank at least pari passu with all its 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 nor acquire any new assets other than the Ship; 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; and |
(c) | in respect of the Designated Transactions. |
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 of the Group for that Financial Year of the Corporate Guarantor (commencing with the financial statements for the year that ended on 31 December 2014); |
(b) | as soon as available, but in no event later than 120 days after the end of the 6-month period ending on 30 June and 31 December in each Financial Year of the Corporate Guarantor, the unaudited semi-annual consolidated financial statements of the Group (in |
(c) | promptly after each request by the Agent, such further information regarding the financial condition, business and operations of the Borrowers, the Ships, the Security Parties and the Group 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 and compliance with laws |
(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 |
(d) | (without prejudice to its other obligations under the Finance Documents), for that Borrower to comply in all respects, with all laws and regulations to which it may be subject including, without limitation, all Environmental Laws and all intellectual property laws, |
11.10 | Maintenance of Security Interests |
(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, any other Security Party, 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 and details of the employment of the Fleet Vessels); or |
(b) | to any other matter relevant to, or to any provision of, a Finance Document, which may reasonably be requested by the Agent, the Security Trustee, the Swap Bank or any Lender at any time. |
11.17 | Minimum liquidity |
11.18 | Provision of copies and translation of documents |
11.19 | Sanctions and compliance with laws |
(a) | Compliance with laws |
(b) | Sanctions |
(i) | Each Borrower undertakes that it, and shall procure that each other Borrower, each Security Party and any other member of the Group or any Affiliate of any of them, or any director, officer, agent, employee or person acting on behalf of the foregoing, is not a Restricted Person and does not act directly or indirectly on behalf of a Restricted Person; |
(ii) | Each Borrower shall, and shall procure that each other Borrower, each Security Party and any other member of the Group and each Affiliate of any of them shall, not use any revenue or benefit derived from any activity or dealing with a Restricted Person in discharging any obligation due or owing to the Creditor Parties; |
(iii) | Each Borrower shall, and shall procure that each other Borrower and each Security Party shall, procure that no proceeds from any activity or dealing with a Restricted Person are credited to any bank account held with any Creditor Party in its name or in the name of any other Borrower or any Security Party or any other member of the Group or any Affiliate of any of them; |
(iv) | Each Borrower undertakes that it, and shall procure that each other Borrower and each Security Party and each other member of the Group and each Affiliate of any of them, has taken reasonable measures to ensure compliance with Sanctions; |
(v) | Each Borrower shall, and shall procure that each other Borrower, each Security Party and each other member of the Group shall, to the extent permitted by law promptly upon becoming aware of them supply to the Agent details of any claim, action, suit, proceedings or investigation against it with respect to Sanctions by any Sanctions Authority; and |
(vi) | Each Borrower shall not, and shall procure that no other Borrower and no Security Party shall, accept, obtain or receive any goods or services from any Restricted Person, except (without limiting Clause 11.19(a) (Compliance with laws)), to the extent relating to any warranties and/or guarantees given and/or liabilities incurred |
(c) | Use of proceeds |
(d) | Each party to this Agreement acknowledges and agrees that the Borrower does not undertake under paragraphs (a) to (c) (inclusive) above in favour of any Lender incorporated or having its registered office in the Federal Republic of Germany and no such Lender shall have any right thereunder and shall be deemed not to be a party to the provisions of this Clause 11.19. |
11.20 | "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 any Borrower or any Security Party after the date of this Agreement; or |
(c) | a proposed assignment or transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer, |
11.21 | No amendment to Initial Charter |
11.22 | Ownership |
11.23 | Notification of non-compliance with financial covenants |
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 (if an Event of Default has occurred and is continuing at the relevant time or an Event of Default would result from the payment of such dividend or the making of such distribution) or effect any form of redemption, purchase or return of share capital; 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 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; or |
(h) | change its constitutional documents; or |
(i) | acquire any vessel other than the Ship owned by it. |
13. | INSURANCE |
13.1 | General |
13.2 | Maintenance of obligatory insurances |
(a) | fire and usual marine risks (including increased value, hull and machinery and excess risks); |
(b) | war risks; |
(c) | protection and indemnity risks (including excess war risk P&I cover); 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, in an amount on an agreed value basis at least 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 the Swap Exposure (if any) and (ii) the Market Value of the Ship owned by it; |
(c) | in the case of oil pollution liability risks, for an aggregate amount equal to the highest level of cover from time to time available under basic protection and indemnity club entry and in the international marine insurance market; |
(d) | in relation to protection and indemnity risks in respect of the full tonnage of the Ship; |
(e) | on approved terms; and |
(f) | through approved brokers and with approved insurance companies and/or underwriters or, in the case of war risks and protection and indemnity risks, in approved war risks and protection and indemnity risks associations. |
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) | i 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 s 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 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 owned by it; |
(b) | a letter or letters of undertaking in such form as may be required by the Security Trustee; |
(c) | where required to be issued under the terms of insurance/indemnity provided by a Borrower's protection and indemnity association, a certified copy of each US voyage quarterly declaration (or other similar document or documents) made by that Borrower in accordance with the requirements of such protections 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 US and Exclusive Economic Zone (as defined in the United States Oil Pollution Act 1990 or any other applicable legislation); and |
(d) | no Borrower shall employ the Ship owned by it, nor allow it to be employed, otherwise than in conformity with the terms and conditions of the obligatory insurances, without first obtaining the consent of the insurers and complying with any requirements (as to extra premium or otherwise) which the insurers specify. |
13.12 | Alteration to terms of insurances |
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; and |
(iii) | a claim under any obligatory insurances of the Ship owned by it. 13.15 |
13.15 | 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 13.16 or dealing with or considering any matters relating to any such insurances, |
13.16 | Mortgagee's interest, marine insurance and additional perils insurance |
13.17 | Review of insurance requirements |
13.18 | Modification of insurance requirements |
13.19 | 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 (such acceptance not to be unreasonably withheld); 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 that Borrower and 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, all 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 all Sanctions; |
(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; and |
(d) | comply with the PATRIOT Act and the United States Foreign Corrupt Practices Act. |
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 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) | other than the Initial Charter in the case of Borrower C, 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) | 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; or |
(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 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 notice of the Charterparty Assignment on the relevant charterer procure that the 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. |
14.18 | Responsible Ship Recycling |
15. | SECURITY COVER |
15.1 | Minimum required security cover |
(a) | the aggregate of the Market Value 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 aggregate of (i) the Loan and (ii) any Swap Exposure. |
15.2 | Provision of additional security; prepayment |
15.3 | Valuation of Ships |
(a) | as at a date not more than 14 days previously; |
(b) | by an Approved Broker (selected by the Borrowers and approved by the Agent); |
(c) | addressed to the Agent; |
(d) | with or without physical inspection of the Ship (as the Agent may require); |
(e) | 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 |
(f) | after deducting the estimated amount of the usual and reasonable expenses which would be incurred in connection with the sale, |
15.4 | Value of additional vessel security |
15.5 | Valuations binding |
15.6 | Provision of information |
15.7 | Frequency of valuations |
15.8 | Payment of valuation expenses |
15.9 | Application of prepayment |
16. | PAYMENTS AND CALCULATIONS |
(a) | by not later than 11.00 a.m. (New York City time) on the due date; |
(b) | in same day Dollar funds settled through the New York Clearing House Interbank Payments System (or in such other Dollar funds and/or settled in such other manner as the Agent shall specify as being customary at the time for the settlement of international transactions of the type contemplated by this Agreement); |
(c) | in the case of an amount payable by a Lender to the Agent or by any Borrower to the Agent or any Lender, to the account of the Agent with correspondent bank Bank of America Intl. New York (correspondent bank SWIFT: BOFAUS3N (SWIFT: ABNANL2A, beneficiary: ABN AMRO Bank N.V. Amsterdam and account number: NL60ABNA0626269504) with reference "$53,000,000 facility re m.v.s NEW YORK, MYRTO and MAIA", 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
Subject to Clauses 16.5, 16.6 and 16.7:
|
(a) | any amount received by the Agent under a Finance Document for distribution or remittance to a Lender, 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) | firstly, 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 (Hi) (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 any 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 any Borrower, the Security Parties and the other Creditor Parties, states in its opinion will or may become due and payable in the future and, upon those amounts becoming due and payable, in or towards satisfaction of them in accordance with the provisions of Clause 17.1(a); 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; SWAP PAYMENTS |
18.1 | Payment of Earnings |
(a) | (and subject only to the provisions of the General Assignments) all Earnings of the Ship owned by it are paid to the Earnings Account for that Ship; and |
(b) | all payments by the Swap Bank to the Borrowers under each Designated Transaction are paid to the Earnings Accounts (or any of them). |
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 unless such failure is caused by an administrative or technical error or any other event which disrupts any applicable payment or communication system and is beyond the control of the Borrowers (or any of them) or any Security Party and in which case the payment is made within 3 Business Days of its due date; or |
(b) | any breach occurs of Clause 9.2, 10.17, 10.18, 10.20, 11.2, 11.3, 11.9, 11.17, 11.19, 12.2, 12.3, 13.2, 13.3, 14.2 or 15.2 of this Agreement or clause 12.3 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 unremedied 10 days after written notice from the Agent requesting action to remedy the same; or |
(d) | (subject to any applicable grace period specified in any Finance Document) any breach by any Borrower or any Security Party occurs of any provision of a Finance Document (other than a breach falling within paragraphs (a), (b) or (c)); or |
(e) | any representation, warranty or statement made or repeated by, or by an officer of, a Borrower or a Security Party in a Finance Document or in a Drawdown Notice or any other notice or document relating to a Finance Document is untrue or misleading when it is made or repeated; or |
(f) | any of the following occurs in relation to any 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 or any form of freezing order 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 |
(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) | 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 other 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 (including, without limitation, consents required pursuant to the relevant entity's constitutional documents of those required by law) 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) | 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 |
(l) | the security constituted by a Finance Document is in any way imperilled or in jeopardy; or |
(m) | without the prior written consent of the Lenders, the shares of the Corporate Guarantor cease to be listed on the New York Stock Exchange; or |
(n) | an Event of Default (as defined in section 14 of the Master Agreement) occurs; or |
(o) | the Master Agreement is terminated, cancelled, suspended, rescinded or revoked or otherwise ceases to remain in full force and effect for any reason except with the consent of the Agent, acting with the authorisation of the Majority Lenders ; or |
(p) | any other event occurs or any other circumstances arise or develop including, without limitation: |
(i) | a change in the financial position, state of affairs or prospects of any Borrower and/or any Security Party and/or any member of the Group; or |
(ii) | any accident or any Environmental Incident 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, the Arranger 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 and commitment fees |
(a) | on the Drawdown Date, a non-refundable arrangement fee equal to 0.6 per cent. of the total amount of the Loan drawn on the Drawdown Date; and |
(b) | a non-refundable commitment fee at the rate of 0.8 per cent. per annum on the undrawn or un-cancelled amount of the Total Commitments, during the period from (and including) the date of this Agreement up to the earlier of (i) the Drawdown Date and (ii) the last day of the Availability Period, such commitment fee to be payable quarterly in arrears during such period and on the last day thereof. |
20.2 | Costs of negotiation, preparation etc. |
20.3 | Costs of variations, amendments, enforcement etc. |
(a) | any amendment or supplement to a Finance Document, or any proposal for such an amendment to be made; |
(b) | any consent or waiver by the Lenders, the Swap 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; |
(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 13.17; and |
(e) | 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 (including, without limitation, a request for the preparation of any insurance opinion prepared by an insurance expert acceptable to the Agent, which, in the opinion of the Agent, opines on the matters requested by the Agent in a satisfactory manner). |
20.4 | Extraordinary management time |
20.5 | Documentary taxes |
20.6 | 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 and/or continuance of an Event of Default or a Potential Event of Default and/or the acceleration of repayment of the Loan under Clause 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 |
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, the Arranger or any other Creditor Party or by any receiver appointed under a Finance Document; and |
(b) | 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 |
21.9 | Mandatory Cost |
(a) | in the case of a Lender lending from a lending office in a Participating Member State, the minimum reserve requirements (or other requirements having the same or similar purpose) of the European Central Bank or any other authority or agency which replaces all or any of its functions) in respect of loans made from that facility office; and |
(b) | in the case of any Lender lending from a lending office in the United Kingdom, any reserve asset, special deposit or liquidity requirements (or other requirements having the same or similar purpose) of the Bank of England (or any other governmental authority or agency) and/or paying any fees to the Financial Conduct Authority and/or the Prudential Regulation Authority (or any other governmental authority or agency which replaces all or any of their functions), which, in each case, is referable to that Lender's participation in the Loan. |
21.10 | Notice of prepayment |
21.11 | Prepayment |
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 | Notice of prepayment |
22.7 | Prepayment |
22.8 | FATCA |
(a) | FATCA Information |
(i) | Subject to paragraph (iii) below, each party to a Finance Document shall, within 10 Business Days of a reasonable request by another party to the Finance Documents: |
(A) | confirm to that other party whether it is a FATCA Exempt Party or is not a FATCA Exempt Party; and |
(B) | supply to the requesting party such forms (including IRS Form W-8 or Form W-9 or any successor or substitute form, as applicable), documentation and other information relating to its status under FATCA (including its applicable "passthru percentage" or other information required under the US Treasury regulations or other official guidance including intergovernmental agreements) as the requesting party reasonably requests for the purposes of such requesting party's compliance with FATCA; |
(ii) | If a party to any Finance Document confirms to another party pursuant to Clause 22.8(a)(i) above that it is a FATCA Exempt Party or provides an IRS Form W-8 or W-9 showing 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, or that the IRS Form has ceased to be valid, that party shall notify that other party reasonably promptly; |
(iii) | Sub-clause (i) above shall not oblige any Creditor Party to do anything which would or might in its reasonable opinion constitute a breach of any law or regulation, any policy of that party, any fiduciary duty or any duty of confidentiality, or to disclose any confidential information (including, without limitation, its tax returns and calculations); provided, however, that information required (or equivalent to the information so required) by IRS Forms W-8 or W-9 (or any successor forms) shall not be treated as confidential information of such party for purposes of this sub-clause (iii); |
(iv) | If a party to any Finance Document fails to confirm its status or to supply forms, documentation or other information requested in accordance with sub-clause (i) above (including, for the avoidance of doubt, where sub-clause (iii) above applies), then: |
(A) | if that party failed to confirm whether it is (and/or remains) a FATCA Exempt Party then such party shall be treated for the purposes of the Finance Documents as if it is not a FATCA Exempt Party; and |
(B) | if that party failed to confirm its applicable passthru percentage then such party shall be treated for the purposes of the Finance Documents (and payments made thereunder) as if its applicable passthru percentage is 100 per cent., |
(b) | FATCA Withholding |
(i) | Each party to any 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 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. |
(ii) | Each party to any 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 |
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 |
(a) | (disregarding any effect which relates to the application to payments under this Agreement of a tax on that Lender's overall net income); or |
(b) | complying with any regulation (including the "International Convergence of Capital Measurement and Capital Standards, a Revised Framework" published by the Basel Committee on Banking Supervision in June 2004, in the form existing on the date of this Agreement ("Basel II") and any other regulation 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) | the introduction, implementation, application, administration or compliance with Basel III, CRD IV or CRR or any law or regulation which implements or applies Basel III, CRD IV or CRR (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 Creditor 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), |
(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; and |
(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 (other than the Master Agreement) 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 (other than the Master Agreement) 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 (other than the Master Agreement) 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; securitisation; subrogation assignment |
(a) | A Lender may sub-participate or include in a securitisation or similar transaction all or any part of its rights and/or obligations under or in connection with the Finance Documents without the consent of, or any notice to, any Borrower, any Security Party, the Agent or the Security Trustee or any other Creditor Party; and the Lenders may assign, in any manner and terms agreed by the Majority Lenders, the Agent and the Security Trustee, all or any part of those rights to an insurer or surety who has become subrogated to them. |
(b) | The Borrower shall, and shall procure that each Security Party shall, do everything desirable or necessary to assist a Lender to achieve a successful (in the opinion of that Lender) securitisation (or similar transaction). |
26.13 | Disclosure of information |
(a) | a potential transferee lender, sub-participant, Affiliate, any other assignee or transferee or any other person who may propose entering into a contractual relation with that Lender in relation to this Agreement; and/or |
(b) | any direct or indirect Subsidiary, any direct or indirect Holding Company, any Affiliate or any other company in its group; and/or |
(c) | any authorities (including, without limitation, any private, public or internationally recognised authorities) or any party to any Finance Document or any professional adviser to that Lender; and/or |
(d) | a rating agency or their professional advisors; and/or |
(e) | any other person regarding the funding, refinancing, transfer, assignment, sale, sub-participation, operational arrangement or other transaction in relation thereto including without limitation any enforcement, preservation, assignment, transfer, sale or sub-participation of that Lender's rights and obligations, |
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 that 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 |
(a)
|
to the Borrowers:
|
c/o Approved Manager
Pendelis Street
175 64 Paleo Faliro
Athens
Greece
Fax No: +30 210 9470101
|
||
(b)
|
to a Lender:
|
At the address below its name in Schedule 1 or (as the case may require) in the relevant Transfer Certificate.
|
||
(c)
|
to the Agent, Arranger and Security Trustee:
|
ABN AMRO Bank N.V.
Coolsingel
AE Rotterdam
The Netherlands
Attn: Loans Administration/Transportation
Fax No: +31 10 401 5323 |
||
(d)
|
to the Swap Bank:
|
ABN AMRO Bank N.V.
c/o Markets Documentation Unit
Gustav Mahlerlaan 10
NL-1082PP Amsterdam
The Netherlands
mdu@nl.abnamro.com
Fax No: +31 10 459 0538
|
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 |
30.5 | PATRIOT Act Notice |
31. | CONFIDENTIALITY |
31.1 | Confidential Information |
31.2 | Disclosure of Confidential Information |
(a) | to any of its Affiliates and Related Funds and any of their officers, directors, employees, professional advisers, auditors, partners and Representatives such Confidential Information as the Creditor Parties shall consider appropriate if any person to whom the Confidential Information is to be given pursuant to this paragraph (a) is informed in writing of its confidential nature and that some or all of such Confidential Information 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 the information or is otherwise bound by requirements of confidentiality in relation to the Confidential Information; |
(b) | to any person (if that person to whom the Confidential Information is to be given is informed in writing of its confidential nature and undertakes in writing not to disclose such Confidential Information to any third party and/or make use of it in case the dealings contemplated below are not concluded): |
(i) | to (or through) whom it assigns or transfers (or may potentially assign or transfer) all or any of its rights and/or obligations under one or more Finance Documents and to any of that person's Affiliates, Related Funds, Representatives and professional advisers; |
(ii) | with (or through) whom it enters into (or may potentially enter into), whether directly or indirectly, any sub-participation in relation to, or any other transaction under which payments are to be made or may be made by reference to, one or more Finance Documents and/or any Borrower and/or any Security Party and to any of that person's Affiliates, Related Funds, Representatives and professional advisers; |
(iii) | appointed by the Creditor Parties or by a person to whom paragraphs (i) or (ii) applies to receive communications, notices, information or documents delivered pursuant to the Finance Documents on its behalf; |
(iv) | who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in paragraphs (i) or (ii); |
(v) | 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; |
(vi) | to whom or for whose benefit a Creditor Parties charges, assigns or otherwise creates security (or may do so) pursuant to Clause 26.17; |
(vii) | 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; |
(viii) | 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; |
(ix) | to whom information is required to be disclosed in connection with, and for the purposes of, any insurance to be effected by a Creditor Party in relation to or in connection with any Finance Document; |
(x) | who is a party to this Agreement; or |
(xi) | with the consent of the Borrowers, |
(c) | to any person appointed by a Creditor Party by a person to whom paragraphs (b)(i) or (b)(ii) of Clause 31.2 applies 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, such Confidential Information as may be required to be disclosed to enable such service provider to provide any of the services referred to in this paragraph (c) provided always that such person will undertake in writing not to disclose such Confidential Information to any third party; |
(d) | to any rating agency (including its profession advisers) such Confidential Information as may be required to be disclosed to enable such rating agency to carry out its normal rating activities in relation to the Finance Documents, the Borrowers and/or the Security Parties provided always that such rating agency will undertake in writing not to disclose such Confidential Information to any third party. |
31.3 | Entire agreement |
31.4 | Inside Information |
31.5 | Notification of disclosure |
(a) | of the circumstances of any disclosure of Confidential Information made pursuant to paragraph (b)(v) of Clause 31.2 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 |
(b) | upon becoming aware that Confidential Information has been disclosed in breach of this Clause 31. |
31.6 | Continuing obligations |
(a) | the date on which all amounts payable by the Borrowers and the Security Parties under or in connection with the Finance Documents have been paid in full and all obligations of the Creditor Parties have been cancelled or otherwise cease to be available; and |
(b) | the date on which a Creditor Party otherwise ceases to be a party to this Agreement. |
32. | LAW AND JURISDICTION |
32.1 | English law |
32.2 | Exclusive English jurisdiction |
32.3 | 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. |
32.4 | Process agent |
32.5 | Creditor Party rights unaffected |
32.6 | Meaning of "proceedings" and "Dispute" |
Lender
|
Lending Office
|
Commitment
(US Dollars) |
ABN AMRO BANK N.V.
|
c/o Loans Administration —
Transportation Clients
93 Coolsingel
3012 AE Rotterdam
The Netherlands
|
53,000,000
|
To: |
ABN AMRO BANK N.V.
93 Coolsingel AE Rotterdam The Netherlands |
1 | We refer to the loan agreement (the "Loan Agreement") dated [0] March 2015 and made between ourselves, as joint and several Borrowers, the Lenders referred to therein, and yourselves as Agent, Arranger, Security Trustee and Swap Bank in connection with a term loan facility of up to us$53,000,000. Terms defined in the Loan Agreement have their defined meanings when used in this Drawdown Notice. |
2 | We request to borrow as follows: |
(a) | Amount of Loan: US$[53,000,000]; |
(b) | Drawdown Date: [ · ] 2015; |
(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 arrangement fee, being in the amount of $[ · ], and the accrued commitment fee, being in the amount of $[ · ], each referred to in Clause 20.1 of the Loan Agreement, from the Loan.] |
1 | A duly executed original of this Agreement and each Finance Document (and of each document required to be delivered by each Finance Document) other than those referred to in Part B. |
2 | Copies of the certificate of incorporation 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 and other notices under this Agreement. |
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 | Copy of the Initial Charter and of all documents signed or issued by Borrower C and the Initial Charterer (or either of them) under or in connection with it. |
8 | The originals of any mandates or other documents required by the Agent in connection with the opening or operation of the Earnings Accounts. |
9 | Such documents and other evidence in such form as is requested by the Agent in order for the Lenders to comply with all necessary "know your customer" or "client acceptance" or other similar identification procedures (including, but not limited to, specimen signatures of all the directors and other officers of each Borrower and each Security Party) in relation to the transactions contemplated in the Finance Documents. |
10 | Documentary evidence that the agent for service of process named in Clause 31 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, in the case of Ship C, the Initial Charter Assignment (and of each document to be delivered under 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 highest class with a classification society which is a member of IACS and acceptable to the Agent free of all overdue recommendations and conditions ; |
(d) | the Mortgage relating to the Relevant Ship has been duly registered or recorded 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 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 Agent, together with: |
(a) | the Approved Manager's Undertaking in respect of the Relevant Ship 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), the ISSC and the IAPPC. |
4 | Evidence satisfactory to the Agent that each Borrower has opened and maintains its Earnings Account. |
5 | A valuation of the Relevant Ship and, if required by the Agent pursuant to the proviso to Clause 15.3, one additional valuation of the Relevant Ship, prepared, in each case, by an Approved Broker, complying with the requirements of Clause 15.3 and dated no earlier than 15 days prior to the Drawdown Date, with the Initial Market Value being determined in accordance with the provisions of Clause 15.3. |
6 | Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of Marshall Islands, the applicable Approved Flag State and such other relevant jurisdictions as the Agent may require. |
7 | 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 Relevant Ship as the Agent may require. |
8 | Evidence satisfactory to the Agent that the Minimum Liquidity Amount is standing to the credit of the Earnings Account in respect of the Relevant Ship pursuant to Clause 11.17. |
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. |
To: | ABN AMRO Bank N.V. for itself and for and on behalf of the Borrower, [each Security Party], the Security Trustee, each Lender and the Swap Bank, as defined in the Loan Agreement referred to below. |
1 | This Certificate relates to a Loan Agreement (the "Loan Agreement") dated [ · ] March 2015 and made between (1) Tuvalu Shipping Company Inc., Jabat Shipping Company Inc. and Bikini Shipping Company Inc. as joint and several borrowers (the "Borrowers"), (2) the banks and financial institutions named in Schedule 1 thereto as Lenders, (3) ABN AMRO Bank N.V. as Agent, (4) ABN AMRO Bank N.V. as Arranger, (5) ABN AMRO Bank N.V. as Security Trustee and (6) ABN AMRO Bank N.V. as Swap Bank for a loan facility of up to US$53,000,000. |
2 | In this Certificate, terms defined in the Loan 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 Loan Agreement and every other Finance Document (other than the Master Agreement) in relation to [ · ] per cent. of its Contribution, which percentage represents $[ · ].] |
5 | [By virtue of this 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 $[G]] 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 (other than the Master Agreement) 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 required in connection with this transaction; and |
(ii) | this Certificate is valid and binding as regards the Transferor; |
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 Arranger, 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 Arranger, 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 |
10 | The Transferor and the Transferee each undertake with the Agent, the Arranger and the Security Trustee severally, on demand, fully to indemnify the Agent and/or the Arranger and/or the Security Trustee in respect of any claim, proceeding, liability or expense (including all legal expenses) which they or any 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, the Arranger's or the Security Trustee's own officers or employees. |
11 | The Transferee shall repay to the Transferor on demand so much of any sum paid by the Transferor under paragraph 10 as exceeds one-half of the amount demanded by the Agent, the Arranger 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, the Arranger or the Security Trustee for the full amount demanded by it. |
[Name of Transferor]
|
[Name of Transferee]
|
|
By:
|
By:
|
|
Date:
|
Date:
|
Note : | This Transfer Certificate alone may not be sufficient to transfer a proportionate share of the Transferor's interest in the security constituted by the Finance Documents in the Transferor's or Transferee's jurisdiction. It is the responsibility of each Lender to ascertain whether any other documents are required for this purpose. |
To: |
ABN AMRO Bank N.V.
93 Coolsingel AE Rotterdam The Netherlands as Agent Attention: Loans Administration |
1 | the Loan Agreement; |
2 | the Master Agreement dated as of [ · ] 2015 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. |
THE BORROWERS
|
||
SIGNED
by
|
)
|
/s/ Ioannis Zafirakis
|
IOANNIS ZAFIRAKIS
|
)
|
|
for and on behalf of
|
)
|
Vassiliki Georgopoulos
|
TUVALU SHIPPING COMPANY INC.
|
)
|
Solicitor
|
in the presence of:
|
)
|
Watson Farley & Williams
|
348 Syngrou Avenue
|
||
176 74 Kallithea
|
||
Athens-Greece
|
||
SIGNED
by
|
)
|
/s/ Ioannis Zafirakis
|
IOANNIS ZAFIRAKIS
|
)
|
|
for and on behalf of
|
)
|
Vassiliki Georgopoulos
|
JABAT SHIPPING COMPANY INC.
|
)
|
Solicitor
|
in the presence of:
|
)
|
Watson Farley & Williams
|
348 Syngrou Avenue
|
||
176 74 Kallithea
|
||
Athens-Greece
|
||
SIGNED
by
|
)
|
|
Andreas Nicolaos Michalopoulos
|
)
|
/s/ Andreas Michalopoulos
|
for and on behalf of
|
)
|
|
BIKINI SHIPPING COMPANY INC.
|
)
|
Vassiliki Georgopoulos
|
in the presence of:
|
)
|
Solicitor
|
Watson Farley & Williams
|
||
348 Syngrou Avenue
|
||
1767 4 Kallithea
|
||
Athens-Greece
|
||
THE LENDERS
|
||
SIGNED
by
|
)
|
/s/ Nadine Akleh
|
Nadine Akleh
|
)
|
|
for and on behalf of
|
)
|
Vassiliki Georgopoulos
|
ABN AMRO BANK N.V.
|
)
|
Solicitor
|
in the presence of:
|
)
|
Watson Farley & Williams
|
348 Syngrou Avenue
|
||
176 74 Kallithea
|
||
Athens-Greece
|
||
THE AGENT AGENT
|
||
SIGNED
by
|
)
|
/s/ Nadine Akleh
|
Nadine Akleh
|
)
|
|
for and on behalf of
|
)
|
Vassiliki Georgopoulos
|
ABN AMRO BANK N.V.
|
)
|
Solicitor
|
in the presence of:
|
)
|
Watson Farley & Williams
|
)
|
348 Syngrou Avenue
|
|
176 74 Kallithea
|
||
Athens-Greece
|
THE ARRANGER
|
||
SIGNED
by
|
)
|
/s/ Nadine Akleh
|
Nadine Akleh
|
)
|
|
for and on behalf of
|
)
|
Vassiliki Georgopoulos
|
ABN AMRO BANK N.V.
|
)
|
Solicitor
|
in the presence of:
|
)
|
Watson Farley & Williams
|
348 Syngrou Avenue
|
||
176 74 Kallithea
|
||
Athens-Greece
|
||
THE SECURITY TRUSTEE
|
||
SIGNED
by
|
)
|
/s/ Nadine Akleh
|
Nadine Akleh
|
)
|
|
for and on behalf of
|
)
|
Vassiliki Georgopoulos
|
ABN AMRO BANK N.V.
|
)
|
Solicitor
|
in the presence of:
|
)
|
Watson Farley & Williams
|
348 Syngrou Avenue
|
||
176 74 Kallithea
|
||
Athens-Greece
|
||
THE ARRANGER
|
||
SIGNED
by
|
)
|
/s/ Nadine Akleh
|
Nadine Akleh
|
)
|
|
for and on behalf of
|
)
|
Vassiliki Georgopoulos
|
ABN AMRO BANK N.V.
|
)
|
Solicitor
|
in the presence of:
|
)
|
Watson Farley & Williams
|
348 Syngrou Avenue
|
||
176 74 Kallithea
|
||
Athens-Greece
|
Index
|
||
Clause
|
Page
|
|
1
|
Interpretation
|
1
|
2
|
Facility
|
13
|
3
|
Drawdown
|
13
|
4
|
Interest
|
14
|
5
|
Interest Periods
|
15
|
6
|
Default Interest
|
16
|
7
|
Repayment and Prepayment
|
17
|
8
|
Conditions Precedent
|
18
|
9
|
Representations and warranties
|
19
|
10
|
General Undertakings
|
22
|
11
|
Corporate Undertakings
|
26
|
12
|
Insurance
|
27
|
13
|
Ship Covenants
|
32
|
14
|
Security Cover
|
36
|
15
|
Payments and calculations
|
38
|
16
|
Application of receipts
|
39
|
17
|
Events of Default
|
40
|
18
|
Fees and Expenses
|
44
|
19
|
Indemnities
|
45
|
20
|
No set-off or tax deduction
|
47
|
21
|
Illegality, etc
|
48
|
22
|
Increased costs
|
49
|
23
|
Set-off
|
50
|
24
|
Transfers and Changes in Lending Office
|
51
|
25
|
Variations and Waivers
|
52
|
26
|
Notices
|
53
|
27
|
Supplemental
|
54
|
28
|
Law and Jurisdiction
|
55
|
Schedule 1 Drawdown Notice
|
57
|
|
Schedule 2 Condition Precedent Documents
|
58
|
|
Execution Page
|
61
|
(1) | LELU SHIPPING COMPANY INC ., a corporation incorporated in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island,MH96960, Majuro, Marshall Islands as borrower (the " Borrower "); and |
(2) | DANISH SHIP FINANCE A/S (DANMARKS SKIBSKREDIT A/S), acting through its office at Sankt-Annae Plads 3, DK-1250 Copenhagen K, Denmark as lender (the " Lender "). |
1 | INTERPRETATION |
1.1 | Definitions |
(a) | 1 June 2015 (or such later date as the Lender may agree with the Borrower); or |
(b) | if earlier, the date on which the Lender's obligations to advance the Loan is cancelled or terminated; |
(a) | except to the extent that they fall within paragraph (b): |
(i) | all freight, hire and passage moneys; |
(ii) | compensation payable to the Borrower or the Lender in the event of requisition of the 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 the 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 the 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 the Ship and which involves a collision between the Ship and such other vessel or some other incident of navigation or operation, in either case, in connection with which the Ship is actually or potentially liable to be arrested, attached, detained or injuncted and/or the Ship and/or the Borrower and/or any operator or manager of the Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action; or |
(c) | any other incident in which Environmentally Sensitive Material is released otherwise than from the Ship and in connection with which the Ship is actually or potentially liable to be arrested and/or where the Borrower and/or any operator or manager of the Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action; |
(a) | sections 1471to 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 Guarantee; |
(c) | the Mortgage; |
(d) | the General Assignment; |
(e) | any Approved Charterparty Assignment; |
(f) | the Approved Manager's Undertaking; and |
(g) | any other document (whether creating a Security Interest or not) which is executed at any time by the Borrower, the Guarantor, the Approved Manager, any other Security Party or any other person as security for, or to establish any form of subordination or priorities arrangement in relation to, any amount payable to the Lender under this Agreement or any of the other documents referred to in this definition, |
(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 (a) to (e) 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 Screen Rate; |
(b) | if no rate is quoted on the applicable Screen Rate for that period, the rate which results from interpolating on a linear basis between: |
(i) | the rate quoted on the applicable Screen Rate for the longest period (for which that Screen Rate is available) which is less than the applicable period of the relevant part of the Loan; and |
(ii) | the applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds the applicable period of that part of the Loan; or |
(c) | if no rate is quoted on the applicable Screen Rate, the arithmetic mean of rates per annum at which deposits in Dollars are offered to the Lender by 2 leading banks in the London Interbank Market at the Lender's request at or about 11.00 a.m. (London time) on the Quotation Date for that period for a period equal to that period and for delivery on the first Business Day of it; and |
(a) | the Borrower's or any Security Party's: |
(i) | financial position, profitability or state of affairs; |
(ii) | ability to perform their respective obligations under the Finance Documents to which they are each a party; |
(iii) | ability to discharge their respective liabilities under the Finance Documents as they fall due; or |
(b) | the validity or enforceability of any of the Finance Documents; |
(a) | Mr. Simeon Palios; |
(b) | all the lineal descendants in direct line of Mr. Palios; |
(c) | a husband or wife or widower or widow of any of the above persons; |
(d) | the estates, trusts or legal representatives of which any of the above persons are the beneficiaries; and |
(e) | each company legally or beneficially owned or (as the case may be) controlled by one or more of the persons or entities which would fall within paragraphs (a) to (d) of this definition, |
(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 the 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 the Ship, provided such liens do not secure amounts more than 30 days overdue (unless the overdue amount is being contested by the Borrower in good faith by appropriate steps) and subject, in the case of liens for repair or maintenance, to Clause 13.13(f); |
(f) | any Security Interest created in favour of a plaintiff or defendant in any proceedings or arbitration as security for costs and expenses where the Borrower is actively prosecuting or defending such proceedings or arbitration in good faith; and |
(g) | Security Interests arising by operation of law in respect of taxes which are not overdue for payment or in respect of taxes being contested in good faith by appropriate steps and in respect of which appropriate reserves have been made; |
(a) | any Finance Document; |
(b) | any policy or contract of insurance contemplated by or referred to in Clause 12 or any other provision of this Agreement or another Finance Document; |
(c) | any other document contemplated by or referred to in any Finance Document; and |
(d) | any document which has been or is at any time sent by or to the Lender in contemplation of or in connection with any Finance Document or any policy, contract or document falling within paragraphs (b) or (c); |
(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 a permanent place of business, or in which a Security Interest created by the company must or should be registered in order to ensure its validity or priority; and |
(f) | a country the courts of which have jurisdiction to make a winding up, administration or similar order in relation to the company, 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 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) | imposed by law or regulation of the United Kingdom, the Council of the European Union, the United Nations or its Security Council or the United States of America (including as imposed by CISADA); 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; 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 each of the Borrower or any Security Party under the Finance Documents have been paid; |
(b) | no amount is owing or has accrued (without yet having become due for payment) under any Finance Document; |
(c) | neither the Borrower nor any Security Party has any future or contingent liability under Clause 18, 19 or 20 or any other provision of this Agreement or another Finance Document; and |
(d) | the Lender does not consider that there is a significant risk that any payment or transaction under a Finance Document would be set aside, or would have to be reversed or adjusted, in any present or possible future bankruptcy of the Borrower or a Security Party or in any present or possible future proceeding relating to a Finance Document or any asset covered (or previously covered) by a Security Interest created by a Finance Document; |
(a) | actual, constructive, compromised, agreed or arranged total loss of 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 1year without any right to an extension) unless it is within 1month redelivered to the full control of the Borrower; |
(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 she is within 1month redelivered to the full control of the Borrower; and |
(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 Lender that the event constituting the total loss occurred; 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 lnterpretation |
(a) | references to, or to a prov1s1on 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 1.1to 1.5 apply unless the contrary intention appears. |
1.6 | Headings |
2 | FACILITY |
2.1 | Amount of facility |
2.2 | Purpose of the Loan |
3 | DRAWDOWN |
3.1 | Request for the Loan |
3.2 | Availability |
(a) | the Drawdown Date has to be a Business Day during the Availability Period; and |
(b) | the Loan shall not exceed the amount of $30,000,000 . |
3.3 | Drawdown Notice irrevocable |
3.4 | Disbursement of the Loan |
3.5 | Disbursement of Loan to third party |
4 | INTEREST |
4.1 | Payment of normal interest |
4.2 | Normal rate of interest |
4.3 | Payment of accrued interest |
4.4 | Notification of market disruption |
4.5 | Suspension of drawdown |
4.6 | Negotiation of alternative rate of interest |
4.7 | Application of agreed alternative rate of interest |
4.8 | Alternative rate of interest in absence of agreement |
4.9 | Notice of prepayment |
4.10 | Prepayment |
4.11 | Application of prepayment |
5 | INTEREST PERIODS |
5.1 | Commencement of Interest Periods |
(a) | 3 months; or |
(b) | such other period as the Lender may agree with the Borrower and notified by the Borrower to the Lender not later than 11.00 am (Copenhagen time) 2 Business Days before the commencement of the Interest Period. |
5.3 | Duration of Interest Periods for Repayment Instalments |
5.4 | Non-availability of matching deposits for Interest Period selected |
6 | DEFAULT INTEREST |
6.1 | 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 17.4, the date on which it became immediately due and payable. |
6.2 | Default rate of interest |
(a) | in the case of an overdue amount of principal, the higher of the rates set out at Clauses 6.3(a) and 6.3(b); or |
(b) | in the case of any other overdue amount, the rate set out at Clause 6.3(b) . |
6.3 | Calculation of default rate of interest |
(a) | the rate applicable to the overdue principal amount immediately prior to the relevant date on which that amount became due (but only for any unexpired part of any then current Interest Period applicable to it); |
(b) | the aggregate of (i) the Margin and (ii) any Mandatory Cost (if applicable) plus, in respect of successive periods of any duration (including at call) up to 3 months which the Lender may select from time to time: |
(i) | LIBOR; or |
(ii) | if the Lender determines that Dollar deposits for any such period are not being made available to it by leading banks in the London Interbank Market in the ordinary course of business, a rate from time to time determined by the Lender by reference to the cost of funds to it from such other sources as the Lender may from time to time determine. |
6.4 | Notification of interest periods and default rates |
6.5 | Payment of accrued default interest |
6.6 | Compounding of default interest |
7 | REPAYMENT AND PREPAYMENT |
7.1 | Amount of repayment instalments |
(a) | by 28 equal consecutive quarterly repayment instalments in the amount of $500,000 each (the " Repayment Instalments " and each a " Repayment Instalment "); and |
(b) | a balloon payment in the amount of $16,000,000 . |
7.2 | Repayment Dates . Subject to the proviso below, the first Repayment Instalment of the Loan shall be repaid on the date falling 3 months after the Drawdown Date relative thereto and the last Repayment Instalment together with the balloon instalment on the Maturity Date Provided that the Lender may, on the first Repayment Date change the Repayment Dates so that thereafter they shall fall on either the 1st or the 15th (as the Lender may decide and notify in writing to the Borrower) of the relevant month to coincide with the interest payments to be made pursuant to Clause 5.1. |
7.3 | Maturity Date |
7.4 | Voluntary prepayment |
7.5 | Conditions for voluntary prepayment |
(a) | a partial prepayment shall be in an amount not less than $500,000 or a higher integral multiple thereof; |
(b) | the Lender has received from the Borrower at least 5 Business Days' prior written notice specifying the amount to be prepaid and the date on which the prepayment is to be made; and |
(c) | the Borrower has provided evidence satisfactory to the Lender that any consent required by the Borrower or any Security Party in connection with the prepayment has been obtained and remains in force, and that any official regulation relevant to this Agreement which affects the Borrower or any Security Party has been complied with. |
7.6 | Effect of notice of prepayment |
7.7 | Mandatory prepayment |
(a) | in the case of a sale, on or before the date on which the sale is completed by delivery of the Ship to the buyer; or |
(b) | in the case of a Total Loss, on the earlier of the date falling 150 days after the Total Loss Date and the date of receipt by the Lender of the proceeds of insurance relating to such Total Loss. |
7.8 | Amounts payable on prepayment |
7.9 | Application of partial prepayment |
7.10 | No reborrowing |
7.11 | Cancellation of Commitment |
8 | CONDITIONS PRECEDENT |
8.1 | Documents, fees and no default |
(a) | that, on or before the date of this Agreement, the Lender receives (i) the documents described in Part A of Schedule 2 in form and substance satisfactory to the Lender and its lawyers and (ii) payment of 50 per cent. of the upfront fee referred to in Clause 18.1; |
(b) | that on or before the service of the Drawdown Notice, the Lender receives the documents described in Part B of Schedule 2 in form and substance satisfactory to it and its lawyers; |
(c) | that, on or before the Drawdown Date the Lender receives payment of the remaining 50 per cent. of the upfront fee referred to in Clause 18.1 and has received payment of the expenses referred to in Clause 18.2; |
(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 9.1 and those of the Borrower or any Security Party which are set out in the other Finance Documents would be true and not misleading if repeated on each of those dates with reference to the circumstances then existing; |
(iii) | none of the circumstances contemplated by Clause 4.4 has occurred and is continuing; and |
(iv) | there has been no material adverse change in the financial position, state of affairs or prospects of the Borrower, the Guarantor or any other Security Party in the light of which the Lender considers that there is a significant risk that the Borrower, the 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 14.1 were applied immediately following the advance of the Loan, the Borrower would not be obliged to provide additional security or prepay part of the Loan under that Clause; and |
(f) | that the Lender has received, and found to be acceptable to it, any further opinions, consents, agreements and documents in connection with the Finance Documents which the Lender may request by notice to the Borrower prior to the Drawdown Date. |
8.2 | Waiver of conditions precedent |
9 | REPRESENTATIONS AND WARRANTIES |
9.1 | General |
9.2 | Status |
9.3 | Share capital and ownership |
9.4 | Corporate power |
(a) | to register the Ship in its name under an Approved Flag; |
(b) | to execute the Finance Documents to which the Borrower is a party; and |
(c) | to borrow the Loan under this Agreement and to make all the payments contemplated by, and to comply with, those Finance Documents to which it is a party. |
9.5 | Consents in force |
9.6 | Legal validity; effective Security Interests |
(a) | constitute the Borrower's legal, valid and binding obligations enforceable against the Borrower in accordance with their respective terms; and |
(b) | create legal, valid and binding Security Interests enforceable in accordance with their respective terms over all the assets to which they, by their terms, relate, |
9.7 | No third party Security Interests |
(a) | the Borrower will have the right to create all the Security Interests which that Finance Document purports to create; and |
(b) | no third party will have any Security Interest (except for Permitted Security Interests) or any other interest, right or claim over, in or in relation to any asset to which any such Security Interest, by its terms, relates. |
9.8 | No conflicts |
(a) | any law or regulation; or |
(b) | the constitutional documents of the Borrower; or |
(c) | any contractual or other obligation or restriction which is binding on the Borrower or any of its assets. |
9.9 | No withholding taxes |
9.10 | No default |
9.11 | Information |
9.12 | No litigation |
9.13 | Solvency |
9.14 | Compliance with certain undertakings |
9.15 | Taxes paid |
9.16 | ISM Code and ISPS Code compliance |
9.17 | No money laundering |
9.18 | Sanctions |
(a) | The Borrower nor any Security Party: |
(i) | is a Prohibited Person; |
(ii) | is owned or controlled by or acting directly or indirectly on behalf of or for the benefit of, a Prohibited Person; or |
(iii) | owns or controls a Prohibited Person. |
(b) | No proceeds of the Loan shall be made available, directly or indirectly, to or for the benefit of a Prohibited Person nor shall they be otherwise directly or indirectly, applied in a manner or for a purpose prohibited by Sanctions. |
9.19 | Repetition of representations and warranties |
9.20 | No immunity |
10 | GENERAL UNDERTAKINGS |
10.1 | General |
10.2 | Title; negative pledge and pari passu ranking |
(a) | hold the legal title to, and own the entire beneficial interest in the Ship, 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; and |
(c) | procure that its liabilities under the Finance Documents to which it is a party do and will rank at least pari passu with all of its other present and future unsecured liabilities, except for liabilities which are mandatory preferred by law. |
10.3 | 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, |
10.4 | No other liabilities or obligations to be incurred |
(a) | liabilities and obligations under the Finance Documents to which it is a party; and |
(b) | liabilities or obligations reasonably incurred in the ordinary course of owning, operating and chartering the Ship. |
10.5 | Information provided to be accurate |
10.6 | 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 Guarantor (commencing with the financial year that ended on 31 December 2014), the audited annual consolidated statements of the Group; |
(b) | as soon as possible, but in no event later than 90 days after each six-month period ending on 30 June and 31 December in each financial year of the Guarantor (commencing with the six- month period ending 30 June 2015), the semi-annual consolidated unaudited statements of the Group (in the form in which they are published in the relevant press release) for such period certified as to their correctness by the chief financial officer of the Guarantor; and |
(c) | promptly upon request by the Lender, such further information about the financial condition, commitments, budgets, fleet list, fleet employment status and operations of the Corporate Guarantor and its subsidiaries (including, for the avoidance of doubt, the Borrower) as the Lender may reasonably require. |
10.7 | 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. |
10.8 | Shareholder and creditor notices |
10.9 | Consents |
(a) | for the Borrower to perform its obligations under any Finance Document and any Approved Charter to which it is a party; |
(b) | for the validity or enforceability of any Finance Document and any Approved Charter to which it is a party; |
(c) | for the Borrower to own and operate and continue to own and operate the Ship; and |
(d) | (without prejudice to its other obligations under the Finance Documents), for the Borrower to comply in all respects, with all laws and regulations to which it may be subject including, without limitation, all Environmental Laws and all intellectual property laws, |
10.10 | 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 may be or become necessary or desirable for any Finance Document to be valid, enforceable or has admissible in evidence or to ensure or protect the priority of any Security Interest which it creates. |
10.11 | Notification of litigation |
10.12 | Principal place of business |
(a) | change its place of business; and |
(b) | establish, nor do anything as a result of which it would be deemed to have, a place of business in England or the United States. |
10.13 | 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. |
10.14 | 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 |
10.15 | Provision of further information |
(a) | to the Borrower, the Guarantor, the Approved Manager, the Ship, its Earnings or its Insurances and any Approved Charter, each other member of the Group and any other Fleet Vessel as the Lender may require; or |
(b) | to any other matter relevant to, or to any provision of, a Finance Document which may be requested by the Lender at any time. |
10.16 | "Know your customer" checks |
(a) | any law or regulation and/or the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation; |
(b) | any change in the status of the Borrower or any Security Party after the date of this Agreement; |
(c) | a proposed assignment or transfer by the 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, |
10.17 | Provision of copies and translation of documents |
10.18 | Ownership |
10.19 | Material Adverse Change |
11 | CORPORATE UNDERTAKINGS |
11.1 | General |
11.2 | Maintenance of status |
11.3 | Negative undertakings |
(a) | carry on any business other than the ownership, chartering and operation of the Ship; or |
(b) | pay any dividend or make any other form of distribution or effect any form of redemption, purchase or return of share capital if an Event of Default has occurred or could result from the payment of such dividend or the making of any other form of distribution; or |
(c) | effect any form of redemption, purchase or return of share capital; |
(d) | provide any form of credit or financial assistance to : |
(i) | a person who is directly or indirectly interested in the Borrower's share or loan capital; or |
(ii) | any company in or with which such a person is directly or indirectly interested or connected |
(e) | open or maintain any account with any bank or financial institution except accounts with any bank acceptable to the Lender for the purposes of the Finance Documents; |
(f) | issue, allot or grant any person a right to any shares in its capital or repurchase or reduce its issued share capital; |
(g) | acquire any shares or other securities other than US or UK Treasury bills and certificates of deposit issued by major North American or European banks, or enter into any transaction in a derivative; |
(h) | enter into any form of amalgamation, merger or de-merger or any form of reconstruction or reorganisation; or |
(i) | agree to purchase any vessel other than the Ship . |
12 | INSURANCE |
12.1 | General |
12.2 | 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; and |
(d) | any other risks against which the Lender considers, having regard to practices and other circumstances prevailing at the relevant time, it would in the opinion of the Lender be reasonable for the Borrower to insure (including, without limitation, those required by any public body, classification society having authority on the Borrower or the Ship) and which are specified by the Lender by notice to the Borrower. |
12.3 | Terms of obligatory insurances |
(a) | in Dollars; |
(b) | in the case of fire and usual marine risks and war risks, in an amount on an agreed value basis at least the greater of (i) an amount equal to 120 per cent. of the Loan and (ii) the Market Value of the Ship (and in the case of hull and machinery risks (excluding any excess cover/increased value/hull interest) in an amount of at least equal to 80 per cent. of the Market Value of the Ship); and |
(c) | in the case of oil pollution liability risks, for an aggregate amount equal to the highest level of cover from time to time available under basic protection and indemnity club entry and in the international marine insurance market (currently $1,000,000,000); |
(d) | in relation to protection and indemnity risks in respect of the Ship's full value and tonnage; |
(e) | on approved terms; and |
(f) | through approved brokers and with approved insurance companies and/or underwriters or, in the case of war risks and protection and indemnity risks, in approved war risks and protection and indemnity risks associations . |
12.4 | Further protections for the Lender |
(a) | subject always to paragraph (b), name the 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) | in the case of any obligatory insurances against any risks other that protection and indemnity risks, and whenever the Lender requires name (or be amended to name) the Lender as additional named assured for its rights and interests, warranted no operational interest and with full waiver of rights of subrogation against the Lender, but without the Lender thereby being liable to pay (but having the right to pay) premiums, calls or other assessments in respect of such insurance; |
(c) | name the Lender as loss payee with such directions for payment as the Lender may specify; |
(d) | provide that all payments by or on behalf of the insurers under the obligatory insurances to the Lender shall be made without set-off, counterclaim or deductions or condition whatsoever; |
(e) | provide that obligatory insurances shall be primary without right of contribution from other insurances which may be carried by the Lender; and |
(f) | provide that the Lender may make proof of loss if the Borrower fails to do so. |
12.5 | Renewal of obligatory insurances |
(a) | at least 21 days before the expiry of any obligatory insurance: |
(i) | notify the Lender of the brokers (or other insurers) and any protection and indemnity or war risks association through or with whom the Borrower proposes to renew that obligatory insurance and of the proposed terms of renewal; and |
(ii) | obtain the Lender's approval to the matters referred to in paragraph (i); |
(b) | at least 14 days before the expiry of any obligatory insurance, renew that obligatory insurance in accordance with the Lender's approval pursuant to paragraph (a); and |
(c) | procure that the approved brokers and/or the war risks and protection and indemnity associations with which such a renewal is effected shall promptly after the renewal notify the Lender in writing of the terms and conditions of the renewal. |
12.6 | Copies of policies; letters of undertaking |
(a) | they will have endorsed on each policy, immediately upon issue, a loss payable clause and a notice of assignment complying with the provisions of Clause 12.4; |
(b) | they will hold such policies, and the benefit of such insurances, to the order of the Lender in accordance with the said loss payable clause; |
(c) | they will advise the Lender immediately of any material change to the terms of the obligatory insurances; |
(d) | they will notify the Lender, not less than 14 days before the expiry of the obligatory insurances, in the event of their not having received notice of renewal instructions from the Borrower or its agents and, in the event of their receiving instructions to renew, they will promptly notify the Lender of the terms of the instructions; and |
(e) | they will not set off against any sum recoverable in respect of a claim relating to the Ship owned by the 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 Lender. |
12.7 | Copies of certificates of entry |
(a) | a certified copy of the certificate of entry for the Ship; |
(b) | a letter or letters of undertaking in such form as may be required by the Lender; and |
(c) | a certified copy of each certificate of financial responsibility for pollution by oil or other Environmentally Sensitive Material issued by the relevant certifying authority in relation to the Ship. |
12.8 | Deposit of original policies |
12.9 | Payment of premiums |
12.10 | Guarantees |
12.11 | Restrictions on employment |
12.12 | Compliance with terms of insurances |
(a) | it shall take all necessary action and comply with all requirements which may from time to time be applicable to the obligatory insurances, and (without limiting the obligation contained in Clause 12.6) ensure that the obligatory insurances are not made subject to any exclusions or qualifications to which the Lender has not given its prior approval; |
(b) | it shall not make any changes relating to the classification or classification society or manager or operator of the Ship approved by the underwriters of the obligatory insurances; |
(c) | it shall make (and promptly supply copies to the Lender of) all quarterly or other voyage declarations which may be required by the protection and indemnity risks association in which the Ship 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) | it shall not employ the Ship, nor allow it to be employed, otherwise than in conformity with the terms and conditions of the obligatory insurances, without first obtaining the consent of the insurers and complying with any requirements (as to extra premium or otherwise) which the insurers specify. |
12.13 | Alteration to terms of insurances |
12.14 | Settlement of claims |
12.15 | Provision of copies of communications |
(a) | the approved brokers; and |
(b) | the approved protection and indemnity and/or war risks associations; and |
(c) | the approved insurance companies and/or underwriters, which relate directly or indirectly to: |
(i) | the 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 the 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. |
12.16 | 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 12.17 below or dealing with or considering any matters relating to any such insurances |
12.17 | Mortgagee's interest, additional perils insurance |
12.18 | Review of insurance requirements |
12.19 | Modification of insurance requirements |
12.20 | Compliance with mortgagee's instructions |
13 | SHIP COVENANTS |
13.1 | General |
13.2 | Ship's name and registration |
(a) | keep the Ship registered in its name under an Approved Flag; |
(b) | not do or allow to be done anything as a result of which such registration might be cancelled or imperilled; and |
(c) | not change the name or port of registry of its Ship without the prior written consent of the Lender. |
13.3 | Repair and classification |
(a) | consistent with first-class ship ownership and management practice; |
(b) | so as to maintain with the highest classification available for vessels of the same age, type and specification as the Ship free of overdue recommendations and conditions with a classification society which is acceptable to the Lender; 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. |
13.4 | Classification society undertaking |
(a) | to send to the Lender, following receipt of a written request from the Lender, certified true copies of all original class records and any other related records held by the classification society in relation to the Ship; |
(b) | to allow the Lender (or its agents), at any time and from time to time, to inspect the original class and related records of the Borrower and the Ship at the offices of the classification society and to take copies of them; |
(c) | to notify the Lender immediately in writing if the classification society: |
(i) | receives notification from the Borrower or any other person that the relevant Ship's classification society is to be changed; or |
(ii) | becomes aware of any facts or matters which may result in or have resulted in a change, suspension, discontinuance, withdrawal or expiry of the relevant Ship's class under the rules or terms and conditions of the Borrower's or the relevant Ship's membership of the classification society; and |
(d) | following receipt of a written request from the Lender: |
(i) | to confirm that the 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 the Borrower is in default of any of its contractual obligations or liabilities to the classification society, to specify to the Lender 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. |
13.5 | Modification |
13.6 | Removal of parts |
13.7 | Surveys |
13.8 | Inspection |
13.9 | 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, the Earnings or the Insurances; |
(b) | all taxes, dues and other amounts charged in respect of the Ship, the Earnings or the Insurances; and |
(c) | all other outgoings whatsoever in respect of the Ship, the Earnings or the Insurances, |
13.10 | Compliance with laws etc. |
(a) | comply, or procure compliance with the ISM Code, the ISPS Code, all Environmental Laws and all other laws or regulations relating to the Ship, its ownership, operation and management or to the business of the Borrower; |
(b) | not employ the Ship nor allow its employment in any manner contrary to any law or regulation in any relevant jurisdiction including but not limited to the ISM Code and the ISPS Code; |
(c) | in the event of hostilities in any part of the world (whether war is declared or not), not cause or permit 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 Lender has been given and the Borrower has (at its expense) effected any special, additional or modified insurance cover which the Lender may require; and |
(d) | comply with all applicable regulations (in the United States of America and, where relevant, elsewhere) with respect to maintenance of its Certificate of Financial Responsibility and other certificates of third party liability insurance so as to enable its Ship to trade fully at all times. |
13.11 | Provision of information |
(a) | the Ship, its employment, position and engagements; |
(b) | the Earnings and payments and amounts due to the Ship's master and crew; |
(c) | any expenses incurred, or likely to be incurred, in connection with the trading, chartering, operation, maintenance or repair of the Ship and any payments made in respect of the Ship; |
(d) | any towages and salvages; and |
(e) | the Borrower's, the Approved Manager's or the Ship's compliance with the ISM Code and the ISPS Code, |
13.12 | 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 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, any exercise or purported exercise of any lien on the Ship or the Earnings or any requisition of the Ship for hire; |
(e) | any intended dry docking of the Ship; |
(f) | any Environmental Claim made against the Borrower or in connection with the Ship, 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; or |
(h) | the Borrower's entry into an Approved Charter; |
(i) | 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, |
13.13 | Restrictions on chartering, appointment of managers etc |
(a) | let the Ship on demise charter or enter into any time or consecutive voyage charter for a term which exceeds, or which by virtue of any optional extensions may exceed, 36 months; |
(b) | enter into any charter in relation to the Ship under which more than 2 months' hire (or the equivalent) is payable in advance; |
(c) | charter the Ship otherwise than on bona fide arm's length terms at the time when the Ship is fixed; |
(d) | appoint a manager of the Ship other than an Approved Manager or an affiliate of the Approved Manager or agree to any alteration to the terms of the Approved Manager's appointment; |
(e) | de-activate or lay up the Ship; or |
(f) | put the Ship into the possession of any person for the purpose of work being done upon her in an amount exceeding or likely to exceed US$1,000,000 (or the equivalent in any other currency) unless that person has first given to the Lender and in terms satisfactory to it a |
13.14 | Notice of Mortgage |
13.15 | Sharing of Earnings |
(a) | enter into any agreement or arrangement for the sharing of any Earnings; and |
(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 Borrower to the Earnings; or |
(c) | enter into any agreement or arrangement for the release, or adverse alteration to, any guarantee or Security Interest relating to any Earnings. |
13.16 | ISPS Code |
(a) | procure that the Ship and the company responsible for the Ship's compliance with the ISPS Code comply with the ISPS Code; and |
(b) | maintain for the Ship an ISSC; and |
(c) | notify the Lender immediately in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC in respect of any Ship. |
13.17 | Charter Assignment |
(a) | serve notice of the Approved Charterparty Assignment on the charterer and procure that the charterer acknowledges such notice in such form as the Lender may approve or require; and |
(b) | deliver to the Lender such other documents equivalent to those referred to at paragraphs 3, 4 and 5 of Schedule 2, Part A as the Lender may require. |
14 | SECURITY COVER |
14.1 | Minimum required security cover |
(a) | the Market Value of the Ship; plus |
(b) | the net realisable value of any additional security previously provided under this Clause 14 is below 125 per cent. of the Loan. |
14.2 | Provision of additional security; prepayment |
14.3 | Valuation of Ship |
(a) | as at a date not more than 14 days previously; |
(b) | by an Approved Broker appointed by the Borrower and approved by and addressed to the Lender; |
(c) | with or without physical inspection of the Ship (as the Lender may require); |
(d) | on the basis of a sale for prompt delivery for cash on normal arm's length commercial terms as between a willing seller and a willing buyer, free of any existing charter or other contract of employment; |
(e) | after deducting the estimated amount of the usual and reasonable expenses which would be incurred in connection with the sale, |
14.4 | Value of additional vessel security |
14.5 | Valuations binding |
14.6 | Provision of information |
14.7 | Payment of valuation expenses |
14.8 | Frequency of Valuations |
14.9 | Application of prepayment |
15 | PAYMENTS AND CALCULATIONS |
15.1 | Currency and method of payments |
(a) | by not later than 12.00 p.m. (New York City time) on the due date; |
(b) | in same day Dollar funds settled through the New York Clearing House Interbank Payments System (or in such other Dollar funds and/or settled in such other manner as the Lender shall specify as being customary at the time for the settlement of international transactions of the type contemplated by this Agreement); and |
(c) | to the account of the Lender at Nordea Bank Finland pic, New York Branch (SWIFT: NDEAUS3N-ABA/Routing # 026010786 (Account No 7443423001), or to such other account with such other bank as the Lender may from time to time notify to the Borrower. |
15.2 | 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, |
15.3 | Basis for calculation of periodic payments |
15.4 | Lender accounts |
15.5 | Accounts prima facie evidence |
16 | APPLICATION OF RECEIPTS |
16.1 | Normal order of application |
(a) | FIRST: in or towards payment pro rata of any unpaid fees, costs and expenses of the Lender under the Finance Documents; |
(b) | SECONDLY: in or towards payment pro rata of any accrued interest or commission due but unpaid under this Agreement; |
(c) | THIRDLY: in or towards payment pro rata of any principal due but unpaid under this Agreement; |
(d) | FOURTHLY: in or towards payment pro rata of any other amounts due but unpaid under any Finance Documents; |
(e) | FIFTHLY: in retention of an amount equal to any amount not then due and payable under any Finance Document but which the Lender, by notice to the Borrower and the Security Parties, states in its opinion will or may become due and payable in the future and, upon those amounts becoming due and payable, in or towards satisfaction of them in accordance with the provisions of this Clause; and |
(f) | SIXTHLY: any surplus shall be paid to the Borrower or to any other person appearing to be entitled to it. |
16.2 | Variation of order of application |
16.3 | Notice of variation of order of application |
16.4 | Appropriation rights overridden |
17 | EVENTS OF DEFAULT |
17.1 | Events of Default |
(a) | the Borrower or any Security Party fails to pay when due or (if so payable) on demand any sum payable under a Finance Document or under any document relating to a Finance Document; or |
(b) | any breach occurs of Clause 8.2, 9.3, 10.2, 10.3, 10,9, 11.2, 11.3, 12.2, 12.3, 13.2, 13.3, 13.9, 13.10, 13.12, 13.3, 14.2 or clause 12.3 {Financial Covenants) of the Guarantee; or |
(c) | any breach by the Borrower or any Security Party occurs of any provision of a Finance Document (other than a breach covered by paragraph (a) or (b)) if, in the opinion of the Lender, such default is capable of remedy and such default continues unremedied 10 days after written notice from the Lender requesting action to remedy the same; or |
(d) | (subject to any applicable grace period specified in any Finance Document) any breach by the Borrower or any Security Party occurs of any provision of a Finance Document (other than a breach covered by paragraph (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 the 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, in the case of the Guarantor, $10,000,000 and in the case of the Borrower and any other Relevant Person, $500,000 (or the equivalent in any other currency) in aggregate): |
(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 Lender, unable to pay its debts as they fall due; or |
(ii) | any assets of a Relevant Person are subject to any form of execution, attachment, arrest, sequestration or distress, or any form of freezing order, in respect of a sum of, or sums aggregating $500,000 or more or the equivalent in another 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 the Borrower and/or the Guarantor which is, or is to be, effected for the purposes of an amalgamation or reconstruction previously approved by the Lender and effected not later than 3 months after the commencement of the winding up; or |
(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 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 Pertinent Jurisdiction other than England, any event occurs, any proceedings are opened or commenced or any step is taken which, in the opinion of the Lender is similar to any of the foregoing; or |
(h) | the Borrower or any Security Party ceases or suspends carrying on its business or a part of its business which, in the opinion of the Lender, is material in the context of this Agreement; or |
(i) | it becomes unlawful in any Pertinent Jurisdiction or impossible : |
(i) | for the Borrower or any Security Party to discharge any liability under a Finance Document or to comply with any other obligation which the Lender considers material under a Finance Document; or |
(ii) | for the Lender to exercise or enforce any right under, or to enforce any Security Interest created by, a Finance Document; or |
(j) | any consent necessary to enable the Borrower to own, operate or charter the Ship or to enable the Borrower or any Security Party to comply with any provision which the Lender considers material of a Finance Document to which it is a party is not granted, expires without being renewed, is revoked or becomes liable to revocation or any condition of such a consent is not fulfilled; or |
(k) | it appears to the Lender that, without its prior written consent, a change has occurred or probably has occurred after the date of this Agreement in the direct shareholders or the legal ownership of any of the shares in the Borrower or the Approved Manager or in the control of the voting rights attaching to any of those shares; or |
(l) | any members of the Palios Family (either directly and/or indirectly through companies beneficially owned by any members of the Palios Family and/or trusts of foundations of which any member of the Palios Family are beneficiaries ceases to own and control in aggregate at least 10 per cent. of the issued common stock of the Corporate Guarantor; or |
(m) | Mr. Simeon Palios ceases to hold directorship position in the Guarantor and active role in the decision making in respect of the Guarantor; or |
(n) | without the prior consent of the Lender, the shares of the Guarantor cease to be listed on the New York Stock Exchange; or |
(o) | any provision which the Lender considers material of a Finance Document proves to have been or becomes invalid or unenforceable, or a Security Interest created by a Finance |
(p) | the security constituted by a Finance Document is in any way imperilled or in jeopardy; or |
(q) | an event of default occurs under any credit agreement entered or to be entered into between the Guarantor (or any of its subsidiaries (direct or indirect), affiliate or co- subsidiary thereof) as borrower and the Lender as lender; |
(r) | any other event occurs or any other circumstances arise or develop including, without limitation: |
(i) | a material adverse change in the financial position, state of affairs or prospects of any Relevant Person; or |
(ii) | any accident or other event involving the Ship or another vessel owned, chartered or operated by a Relevant Person; |
17.2 | Actions following an Event of Default |
(a) | serve on the Borrower a notice stating that all or part of the Commitment and of the other obligations of the Lender to the Borrower under this Agreement are cancelled; and/or |
(b) | serve on the Borrower 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 |
(c) | take any other action which, as a result of the Event of Default or any notice served under paragraph (a) or (b), the Lender is entitled to take under any Finance Document or any applicable law. |
17.3 | Termination of Commitment |
17.4 | Acceleration of Loan |
17.5 | Multiple notices; action without notice |
17.6 | Exclusion of Lender 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 |
17.7 | Relevant Persons |
17.8 | Interpretation |
18 | FEES AND EXPENSES |
18.1 | Upfront fee |
(a) | 50 per cent. on the date of this Agreement; and |
(b) | 50 per cent. on the Drawdown Date. |
18.2 | Costs of negotiation, preparation etc. |
18.3 | Costs of variations, amendments, enforcement etc. |
(a) | any amendment or supplement to a Finance Document, or any proposal for such an amendment to be made; |
(b) | any consent or waiver by the Lender concerned under or in connection with a Finance Document, or any request for such a consent or waiver; |
(c) | the valuation of any security provided or offered under Clause 14 or any other matter relating to such security; |
(d) | where the Lender, in its absolute opinion, considers that there has been a material change to the insurances in respect of the Ship, the review of the Insurances pursuant to Clause 12.18; or |
(e) | any step taken by the Lender with a view to the protection, exercise or enforcement of any right or Security Interest created by a Finance Document or for any similar purpose. |
18.4 | Documentary taxes |
18.5 | Certification of amounts |
19 | INDEMNITIES |
19.1 | Indemnities regarding borrowing and reduction 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; |
(b) | the receipt or recovery of all or any part of the Loan or an overdue sum otherwise than on the last day of an Interest Period or other relevant period; |
(c) | any failure (for whatever reason) by the Borrower to make payment of any amount due under a Finance Document, on the due date or, if so payable, on demand (after giving credit for any default interest paid by the Borrower on the amount concerned under Clause 6); |
(d) | the occurrence and/or continuance of an Event of Default or a Potential Event of Default and/or the acceleration of repayment of the Loan under Clause 17, |
19.2 | Breakage costs |
19.3 | Miscellaneous indemnities |
(a) | any action taken, or omitted or neglected to be taken, under or in connection with any Finance Document by the Lender or by any receiver appointed under a Finance Document; |
(b) | any other Pertinent Matter, |
19.4 | Currency indemnity |
(a) | making or lodging any claim or proof against the Borrower or any Security Party, whether in its liquidation, any arrangement involving it or otherwise; or |
(b) | obtaining an order or judgment from any court or other tribunal; or |
(c) | enforcing any such order or judgment, |
19.5 | Certification of amounts |
19.6 | Environmental Indemnity |
20 | NO SET-OFF OR TAX DEDUCTION |
20.1 | 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 the Borrower is required by law to make . |
20.2 | Grossing-up for taxes |
(a) | the Borrower shall notify the Lender as soon as it becomes aware of the requirement; |
(b) | the Borrower shall pay the tax deducted to the appropriate taxation authority promptly, and in any event before any fine or penalty arises; |
(c) | the amount due in respect of the payment shall be increased by the amount necessary to ensure that the Lender receives and retains (free from any liability relating to the tax deduction) a net amount which, after the tax deduction, is equal to the full amount which it would otherwise have received. |
20.3 | Evidence of payment of taxes |
20.4 | Exclusion of tax on overall net income |
20.5 | FATCA Information |
(a) | Subject to paragraph (c) below, each Party shall, within 10 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, or that a form provided pursuant to paragraph (a)(i) above has ceased to be accurate or valid, that Party shall notify that other Party or provide a revised form reasonably promptly. |
(c) | Paragraph (a) above shall not oblige Lender 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. |
20.6 | 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. |
21 | ILLEGALITY, ETC. |
21.1 | 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, |
21.2 | Notification and effect of illegality |
21.3 | 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 . |
22 | INCREASED COSTS |
22.1 | Increased costs |
(a) | the introduction or alteration after the date of this Agreement of a law, or a regulation 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) | the effect of complying with any regulation (including any which relates to capital adequacy or liquidity controls or which affects the manner in which the Lender allocates capital resources to its obligations under this Agreement) which is introduced, or altered, or the interpretation or application of which is altered, after the date of this Agreement or |
(c) | the implementation or application of or compliance with the "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 (" Basel III ") or any other law or regulation which implements Basel Ill (whether such implementation, application or compliance is by a government, regulator or the Lender or a parent company or affiliate of it), |
(i) | an additional or increased cost incurred as a result of, or in connection with, the Lender having entered into, or being a party to, this Agreement of funding or maintaining the Loan or performing its obligations under this Agreement, or of having outstanding all or any part of the Loan or other unpaid sums; |
(ii) | a reduction in the amount of any payment to the Lender under this Agreement, or in the effective return which such a payment represents to the Lender, or on its capital; |
(iii) | an additional or increased cost of funding all or maintaining all or any of the advances comprised in a class of advances formed by or including the Loan or (as the case may require) the proportion of that cost attributable to the Loan; or |
(iv) | a liability to make a payment, or a return foregone, which is calculated by reference to any amounts received or receivable by the Lender under this Agreement; |
22.2 | Payment of increased costs |
22.3 | Notice of prepayment |
22.4 | Prepayment; termination of Commitment |
22.5 | Application of prepayment |
23 | SET-OFF |
23.1 | 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 the Borrower at any office in any country of the Lender, in or towards satisfaction of any sum then due from the Borrower to the Lender under any of the Finance Documents; and |
(b) | for that purpose: |
(i) | break, or alter the maturity of, all or any part of a deposit of the Borrower; |
(ii) | convert or translate all or any part of a deposit or other credit balance into Dollars; |
(iii) | enter into any other transaction or make any entry with regard to the credit balance which the Lender considers appropriate. |
23.2 | Existing rights unaffected |
23.3 | No Security Interest |
24 | TRANSFERS AND CHANGES IN LENDING OFFICE |
24.1 | Transfer by Borrower |
(a) | transfer any of its respective rights, liabilities 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, their rights or liabilities would vest in, or pass to, another person. |
24.2 | Assignment by Lender |
(a) | if such assignment is to a subsidiary or any other company or financial institution which is in the same ultimate ownership or control as the Lender; |
(b) | if the transfer is imposed or required by central bank; |
(c) | if the transfer is to a first-class bank or financial institution; or |
(d) | following the occurrence of an Event of Default. |
24.3 | Rights of assignee |
24.4 | Sub-participation; subrogation assignment |
24.5 | Disclosure of information |
24.6 | Change of lending office |
(a) | the date on which the Borrower receive the notice; and |
(b) | the date, if any, specified in the notice as the date on which the change will come into effect . |
24.7 | Security over Lender's rights |
(a) | any charge, assignment or other Security Interest to secure obligations to a federal reserve or central bank; and |
(b) | if the Lender 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 the Lender as security for those obligations or securities |
(i) | release the Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or Security Interest for the Lender as a party to any of the Finance Documents; or |
(ii) | require any payments to be made by the Borrower or any Security Party or grant to any person any more extensive rights than those required to be made or granted to the Lender under the Finance Documents. |
25 | VARIATIONS AND WAIVERS |
25.1 | Variations, waivers etc. by Lender |
25.2 | 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 the Borrower or a Security Party of an obligation under a Finance Document or the general law; or |
(d) | any right or remedy conferred by any Finance Document or by the general law, |
26 | NOTICES |
26.1 | General |
26.2 | Addresses for communications |
(a)
|
to the Borrower
:
|
c/o Approved Manager
16 Pendelis Street 175 64 Paleo Faliro Athens Greece |
Attn: Chief Financial Officer
|
||
Fax No: +30 210 9470101
|
||
(b)
|
to the Lender
:
|
Danish Ship Finance A/S (Danmarks Skibskredit A/S)
Sankt-Annae Plads 3 DK-1250 Copenhagen K Denmark |
Attn: Customer Relations
|
||
Fax No: +(45) 33 33 9666
|
26.3 | 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. |
26.4 | 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, |
26.5 | Illegible notices |
26.6 | 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. |
26.7 | English language |
26.8 | Meaning of "notice" |
27 | SUPPLEMENTAL |
27.1 | 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. |
27.2 | Severability of provisions |
27.3 | Counterparts |
27.4 | Third party rights |
28 | LAW AND JURISDICTION |
28.1 | English law |
28.2 | Exclusive English jurisdiction |
28.3 | Choice of forum for the exclusive benefit of the Lender |
(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. |
28.4 | Process agent |
28.5 | Lender's rights unaffected |
28.6 | Meaning of "proceedings" |
To:
|
Danish Ship Finance A/S
(Danmarks Skibskredit A/S) Sankt Annae Plads 3 DK-1250 Copenhagen K Denmark |
Attention: Loans Administration
|
1 | We refer to the loan agreement (the " Loan Agreement " ) dated [ · ] April 2015 and made between ourselves, as Borrower, and yourselves, as Lender, in connection with a loan facility of US$30,000,000. Terms defined in the Loan Agreement have their defined meanings when used in this Drawdown Notice. |
2 | We request to borrow the Loan as follows: |
(a) | Amount: US$30,000,000; |
(b) | Drawdown Date: [ · ] April 2015; |
(c) | Duration of the first Interest Period shall be 3 months; |
(d) | Payment instructions: account in [ · ]. |
3 | We represent and warrant that: |
(a) | the representations and warranties in Clause 9 of the Loan Agreement would remain true and not misleading if repeated on the date of this notice with reference to the circumstances now existing; |
(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 Lender. |
5 | [We authorise you to deduct the second instalment of the upfront fee referred to in Clause 18.1from the amount of the Loan . ] |
[Name of Signatory]
|
||
Authorised Signatory
|
||
for and on behalf of
|
||
LELU SHIPPING COMPANY INC.
|
||
1 | A duly executed original of this Agreement and each Finance Document (and of each document required to be delivered by each Finance Document) other than those referred to in Part B of this Schedule 2. |
2 | Copies of the certificate of incorporation and constitutional documents of the Borrower, the Guarantor and Approved Manager and up to date original goodstanding certificates in respect of the Borrower, the Guarantor and the Approved Manager. |
3 | Copies of resolutions of the directors of the Borrower and each Security Party authorising the execution of the Finance Documents to which each is a party and, in the case of the Borrower, authorising named signatories to give the Drawdown Notice and other notices under this Agreement. |
4 | Copies of the resolutions of the executive committee of the Guarantor authorising the execution of the Finance Documents to which it is party. |
5 | The original of any power of attorney under which any Finance Document is to be executed on behalf of the Borrower or the Guarantor . |
6 | Documentary evidence showing that the Borrower is a wholly owned subsidiary of the Guarantor. |
7 | All documentation required by the Lender in relation to the Borrower and any Security Party pursuant to the Lender's "know your customer" requirements including, without limitation: |
(a) | passports or any other documentation acceptable to the Lender of the persons signing this Agreement and any Finance Document on behalf of the Borrower or a Security Party; and |
(b) | any other documentation and information as the Lender may deem necessary and/or advisable in order to comply with any law and/or regulation regarding money laundering and/or the financing of terrorist activities. |
8 | Documentary evidence that the agent for service of process named in Clause 28 has accepted its appointment. |
9 | If the Lender so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the Lender. |
10 | Copy of the memorandum of agreement dated 8 December 2014 and made between the Borrower as buyer and Oldendorff Carriers GmbH & Co. KG, Lubeck, Germany as seller in relation to the acquisition of the Ship. |
11 | Copy of the Ship's main particulars. |
12 | A favourable legal opm1on from lawyers appointed by the Lender on such matters concerning the laws of the Marshall Islands, England and such other relevant jurisdictions as the Lender may require. |
13 | The financial statements of the Corporate Guarantor as described in clause 10.6 and 10.7 of the Loan Agreement. |
14 | Any other documents that the Lender may reasonably require in respect of the Borrower and any Security Party . |
1 | A duly executed original of the Mortgage, the General Assignment and any Approved Charterparty Assignment (and of each document to be delivered by each of them including, without limitation, any notice of assignment and loss payable clause) in respect of the Ship . |
2 | Documentary evidence that : |
(a) | the Ship is definitively and permanently registered in the name of the Borrower under an Approved Flag; |
(b) | the Ship is in the absolute and unencumbered ownership of the Borrower save as contemplated by the Finance Documents; |
(c) | the Ship maintains +100Al Bulk Carrier, CSR, BC-A, Grab (25), (Hold Nos. 2+4+6+8 may be empty), ESP, ShipRight (ACS (B) CM) *IWS, Ll, ECO (IHM), + LMC, UMS with Lloyd's Register free of all recommendations and conditions of such classification society; |
(d) | the Mortgage has been duly registered against the Ship in accordance with the laws and requirements of the applicable Approved Flag State; and |
(e) | the 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 Ship will, as from the Drawdown Date, be managed by the Approved Manager on terms acceptable to the Lender, together with: |
(a) | a letter of undertaking executed by the Approved Manager in favour of the Lender in the terms required by the Lender agreeing certain matters in relation to the management of the Ship and subordinating the rights of the Approved Manager against the Ship and the Borrower to the rights of the Lender under the Finance Documents; and |
(b) | copies of the Approved Manager's Document of Compliance and of the Ship's SMC and ISSC (together with any other details of the applicable safety management system which the Lender requires). |
4 | Favourable legal opinions from lawyers appointed by the Lender on such matters concerning the laws of the Marshall Islands, the applicable Approved Flag State, England and such other relevant jurisdictions as the Lender may require. |
5 | A valuation of the Ship (at the cost of the Borrower), addressed to the Lender, stated to be for the purpose of this Agreement and otherwise prepared in accordance with Clause 14.3. |
6 | If the Ship is subject to an Approved Charter, a copy of the Approved Charter duly executed by the parties thereto. |
7 | A favourable opinion from an independent insurance consultant acceptable to the Lender on such matters relating to the insurances for the Ship as the Lender may require . |
8 | Copies of the certificates in respect of International Ship and Port Facility Security Code {ISPS) and the International Safety Management Code (including the guidelines on its implementation) {ISM), adopted by the International Maritime Organisation. |
9 | A copy of the certificate of insurance or other financial security in respect of civil liability for bunker oil pollution damage issued by the relevant certifying authority in relation to the Ship. |
10 | Documentary evidence that the agent for service of process named in Clause 28 has accepted its appointment. |
11 | Any other documents as the Lender may reasonably require in respect of the Borrower and any Security Party. |
12 | If the Lender so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the Lender . |
BORROWER
|
||
SIGNED
by Andreas Nikolaos Michalopoulos
|
)
|
/s/
Andreas Nikolaos Michalopoulos
|
for and on behalf of
|
)
|
|
LELU SHIPPING COMPANY INC.
|
)
|
|
/s/ VASSILIKI GEORGOPOULOS
|
||
VASSILIKI GEORGOPOULOS
|
||
SOLICITOR
|
||
WATSON FARLEY & WILLIAMS
|
||
48 SYNGROU AVENUE
|
||
176 74 KALLITHEA
|
||
ATHENS·— GREECE
|
||
LENDER
|
||
SIGNED
by Nadine Akleh
|
)
|
/s/
Nadine Akleh
|
for and on behalf of
|
)
|
|
DANISH SHIP FINANCE A/S
|
)
|
|
(DANMARKS SKIBSKREDIT A/S)
|
)
|
|
Witness to all
|
)
|
|
the above signatures
|
)
|
|
Name:
|
||
Address
:
|
/s/ VASSILIKI GEORGOPOULOS
|
|
VASSILIKI GEORGOPOULOS
|
||
SOLICITOR
|
||
WATSON FARLEY & WILLIAMS
|
||
48 SYNGROU AVENUE
|
||
176 74 KALLITHEA
|
||
ATHENS·— GREECE
|
1.
|
INTERPRETATION
|
2
|
2.
|
BUSINESS OF THE COMPANY
|
5
|
3.
|
COMPLETION
|
5
|
4.
|
FINANCE
|
6
|
5.
|
OBLIGATIONS OF DIANA
|
7
|
6.
|
OBLIGATIONS OF WILHELMSEN
|
7
|
6A.
|
THE COMPANY GREEK OFFICE - CONDITIONS
|
7
|
7.
|
COMPETITION
|
8
|
8.
|
NON-POACH
|
8
|
9.
|
ACCOUNTS AND FINANCIAL REPORTING
|
8
|
10.
|
ACCESS TO INFORMATION
|
9
|
11.
|
ANNUAL BUDGET AND BUSINESS PLAN
|
9
|
12.
|
OPERATION OF BANK ACCOUNTS
|
10
|
13.
|
BOARD OF DIRECTORS
|
10
|
14.
|
BOARD MEETINGS
|
11
|
15.
|
LANGUAGE OF MEETINGS
|
12
|
16.
|
GROUP COMPANIES
|
12
|
17.
|
DAY-TO-DAY MANAGEMENT OF THE COMPANY AND ITS GROUP
|
12
|
18.
|
RESERVED MATTERS
|
12
|
19.
|
DISTRIBUTION OF PROFITS
|
13
|
20.
|
INTELLECTUAL PROPERTY
|
13
|
21.
|
CONFIDENTIALITY
|
13
|
22.
|
TAXATION
|
14
|
23.
|
DEADLOCK
|
14
|
24.
|
TRANSFER OF SHARES
|
15
|
25.
|
COMPULSORY TRANSFER
|
16
|
26.
|
DRAG ALONG
|
16
|
27.
|
TAG ALONG
|
17
|
28.
|
TERM AND TERMINATION
|
17
|
29.
|
WINDING UP AND CONSEQUENCES OF TERMINATION
|
18
|
30.
|
WARRANTIES
|
19
|
31.
|
LIMITATION OF LIABILITY
|
19
|
32.
|
GENERAL
|
19
|
33.
|
ASSIGNMENT
|
20
|
34.
|
WAIVERS AND AMENDMENTS
|
20
|
35.
|
SERVICE OF NOTICES
|
21
|
36.
|
GOVERNING LAW AND JURISDICTION
|
21
|
SCHEDULE 1 RESERVED MATTERS
|
23
|
· | Management Agreement |
· | WSM Services Agreement |
· | DSS Services Agreement |
(1) | Wilhelmsen Ship Management Holding Limited, a company incorporated and registered in Hong Kong with company number 294252 whose registered office is at Unit 1610, 16th Floor, West Tower, Shun Tak Centre, 168-200 Connaught Road Central, Hong Kong (WSM'); |
(2) | Diana Ship Management Inc., a company incorporated and registered in the Marshall Islands with company number 72086 whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 ('Diana'); and |
(3) | Diana Wilhelmsen Management Inc., a company incorporated and registered in the Marshall Islands with company number 71900 whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 (the 'Company'), |
(A) | The Company was incorporated in the Marshal Islands on 24 September 2014. As at the date of this Agreement, Diana is the sole shareholder of the Company holding 1 Ordinary Share of a par value of US$1. |
(B) | The current Directors of the Company are Mrs Semiramis Paliou and Mr loannis Zafirakis. |
(C) | WSM and Diana wish to subscribe for Ordinary Shares in the Company in accordance with the terms of this concord |
(D) | This Agreement sets out the terms upon which WSM and Diana shall invest in the Company and how the Joint Venture shall be operated by the Parties. |
1. | INTERPRETATION |
1.1 | Definitions In this Agreement: |
A Director
|
means a director of the Board appointed in accordance with this Agreement and the Articles that has been nominated by WSM;
|
Affiliate
|
means, in respect of a non-natural person, any person controlling, controlled by or under common control with that person including any member of the same Group of that person provided, however, that the Shareholders shall not be deemed to be Affiliates of the Company and vice versa;
|
Annual Budget
|
means the annual budget agreed by the Shareholders in accordance with clause 11 (Annual Budget and Business Plan);
|
Annual Business Plan
|
means the annual business plan agreed by the Shareholders in accordance with clause 11 (Annual Budget and Business Plan);
|
Applicable Law
|
means any law (statutory, common or otherwise), constitution, code, rule, regulation, order, judgment, decree or similar authority enacted, adopted, promulgated or applied by any Governmental Authority (and in all cases includes all applicable local anti-bribery and anti-corruption laws and regulations and any international or national economic and/or trade sanctions and embargoes in effect from time to time and 'Governmental Authority' shall include any national or local government, any regulatory authority, any governmental authority, department, bureau, agency, commission, board or tribunal, any crown corporation and any licensing body, court, judicial body or arbitral body, or other law, rule or regulation-making entity);
|
Articles
|
means the articles of association and by-laws of the Company;
|
B Director
|
means a director of the Board appointed in accordance with this Agreement and the Articles that has been nominated by Diana;
|
Board
|
means the board of directors of the Company from time to time or any validly constituted committee thereof;
|
Business Day
|
means a day on which banks in the City of London, Oslo and Athens are open for business generally;
|
Buyer
|
means a
bona fide
arm's length purchaser;
|
Company Greek Office
|
means the office of the Company in Greece to be established under clause 3.6 of this Agreement and pursuant to the provisions of art. 25 of Greek law 27/195 as amended and currently in force;
|
Deed of Adherence
|
means a deed of adherence to this Agreement in the form reasonably approved by the Board;
|
Diana Group
|
means Diana Shipping Inc. of the Marshall Islands and its subsidiaries from time to time (excluding, for the avoidance of doubt, any Group Company); and 'member of the Diana Group' shall be construed accordingly;
|
DSS
|
means Diana Shipping Services S.A. of Panama;
|
DSS Services Agreement
|
means a services agreement in the agreed form between DSS and the Company for the provision of services to the Company;
|
Group
|
means, in relation to any company, that company and any other company which, at the relevant time, is its ultimate parent or subsidiary or a direct or indirect subsidiary of its parent; and 'member' of a Group shall be construed accordingly;
|
Group Company
|
means the Company and each member of its Group, excluding, for the avoidance of doubt, the Shareholders and their respective Groups;
|
Important Business
|
means any decision (or proposed decision) of the Board:
(a)
to make any change to the Company's dividend policy, funding policy or capital policy;
(b)
to adopt or materially alter or significantly depart from the Annual Budget or Annual Business Plan;
(c)
to issue or redeem any Shares or other securities or financial products; or
(d)
that affects the ability of the Shareholders to continue their association in the spirit of utmost good faith as required by clause 2.3.
|
Insolvency Event
|
means each and any of the following occurring in relation to the relevant Party:
(a)
the issue of a petition for the winding-up of the Party. This sub-clause (a) shall not apply to any winding-up petition which is frivolous or vexatious and is discharged or dismissed within 28 days of commencement or, if earlier, the date on which it is advertised;
(b)
the making of an order or an effective resolution being passed for winding up, liquidation or dissolution except for the purpose of a solvent reconstruction or amalgamation (made with the consent of the other Parties, such consent not to be unreasonably withheld or delayed) where the resulting entity assumes all of the obligations of the relevant Party under this Agreement in writing;
(c)
the appointment of an administrative receiver, administrator,
|
trustee, liquidator, manager or similar officer;
(d)
an encumbrancer, receiver (including an administrative receiver) or other similar officer taking possession of or a distress, execution, sequestration or process is levied or enforced which is levied or enforced upon the whole or any material part of such Party's undertaking, property, assets or revenues;
(e)
the making or proposing of making of a composition, scheme, compromise or arrangement, with any class of creditors or for the benefit of creditors generally;
(f)
such Party being unable to pay debts as they fall due; or
(g)
the occurrence in any relevant jurisdiction of anything equivalent or analogous to any of those matters referred to in paragraphs (a), (b), (c), (d), (e) and (f) above in relation to the relevant party;
|
|
Joint Venture
|
means the operation of the Company for the purpose of undertaking the business described in clause 2.1;
|
Legal Representative
|
means the individual who shall be appointed as the legal representative of the Company Greek Office as described in clause 3.6(a);
|
Management Agreement
|
means the ship management agreement in agreed form between each owner of a vessel specified in clause 5.1(b) and the Company for the provision by the Company of ship management services to such owner;
|
Ordinary Shares
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means the ordinary shares of no par value each in the capital of the Company having the rights set out in the Articles;
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Reserved Matter
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means each of the reserved matters set out in Schedule 1;
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Shareholders
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means WSM and Diana;
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Shares
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means any shares in the capital of the Company;
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WSM Norway
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means Wilhelmsen Ship Management (Norway) AS, which is a wholly owned subsidiary of WSM with Norwegian company registration No 940995329;
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WSM Services Agreement
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means a services agreement in the agreed form between WSM Norway and the Company for the provision of services to the Company; and
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Winding Up Notice
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means a written notice issued by a Shareholder pursuant to clause 28.2 bringing into effect the provisions of clause 29.
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1.2 | Interpretation |
(a) | a reference to a statute or statutory provision includes a reference to: |
(i) | that statute or provision as amended, re-enacted, replaced or modified from time to time; and |
(ii) | any order, statutory instrument, regulation or other subordinate legislation made from time to time under the relevant statute; |
(b) | a reference to "writing" is a reference to any mode of representing or reproducing words in a visible, non-transitory form; |
(c) | "control" means, in relation to a body corporate, the power of a person to secure that its affairs are conducted in accordance with the wishes of that person: |
(i) | by means of the holding of shares or the possession of voting power in or in relation to that or any other body corporate; or |
(ii) | by virtue of any powers conferred by the articles of association or any other document regulating that or any other body corporate, |
(d) | a reference to a document "in the agreed form" is a reference to the form of that document signed or initialed for identification purposes by or on behalf of the Parties to this Agreement; |
(e) | an agreement or obligation for a Shareholder to "procure" any action or inaction of the Company under this Agreement shall be construed as an agreement or obligation for such Shareholder to exercise its voting rights, discretions and other powers in respect of its Shares or otherwise under this Agreement and the Company's constitutional documents in such a manner so as to procure (insofar as is possible) such action or inaction (as the case may be); |
(f) | a reference to a person shall include any natural person, legal person or other entity (whether or not having a legal personality) and a reference to a non-natural person is a reference to any person (as so defined) other than an individual; |
(g) | the singular includes the plural and vice versa; |
(h) | a reference to a clause or a Schedule is a reference to a clause of or a schedule to this Agreement; |
(i) | any phrase introduced by the terms "including" or "in particular", or any cognate expression, shall be construed as illustrative and not limiting of any preceding words; |
(j) | a reference to a month means a calendar month, a quarter means a calendar quarter and a year means a calendar year; |
(k) | headings are used for convenience only and shall not affect the interpretation of this Agreement; and |
(l) | the Schedules form part of this Agreement. |
2. | BUSINESS OF THE COMPANY |
2.1 | The business of the Company, unless otherwise determined by the Shareholders in accordance with clause 18, shall be to provide ship management services to operators of bulk and container vessels owned and operated by the Diana Group and to third party operators in accordance with the Annual Budget and Annual Business Plan and the Company shall build a specialised organisation to that effect. It is agreed that the Shareholders initially intend for the Joint Venture to manage vessels owned by the Diana Group with a view, subject to agreement between the Shareholders, to extend the provision of services to third party operators following the third anniversary of this Agreement. |
2.2 | The Company shall hold its own document of compliance (DOC'), which shall be based on WSM's management system. |
2.3 | Each of the Shareholders agree to exercise its rights under this Agreement and as a shareholder in the Company (insofar as it lawfully can) so as to ensure that the Company performs and complies with all obligations on its part under this Agreement and the Annual Budget and the Business Plan as the same may be amended with the consent of the Shareholders in accordance with clause 18 from time to time and shall work towards ensuring that the Company shall actively pursue the targets and purposes described in the Annual Budget and Business Plan. |
3. | COMPLETION |
3.1 | Immediately after the execution of this Agreement, the Parties shall comply with their obligations under this clause. |
3.2 | The Parties shall procure that such meetings of the Company and the Board are held and/or Shareholders' and board resolutions passed as may be necessary to: |
(a) | authorise the Board to allot and issue the Shares referred to in clause 3.3 on the terms referred to in such clause credited as fully paid; |
(b) | authorise the Board to allot and issue the Shares referred to in clause 3.4 on the terms referred to in such clause credited as fully paid; |
(c) | appoint Carl Christian Schou, Hakon Lenz and Pico Zarifeh as A Directors; |
(d) | appoint Semiramis Paliou, loannis Zafirakis and Andreas-Nikolaos Michalopoulos as B Directors; |
(e) | appoint Mrs Semiramis Paliou as Chairperson of the Company; |
(f) | appoint Messrs Ernst & Young as the auditors of the Company; |
(g) | approve the entry into and the execution of the following agreed form documents: |
(i) | WSM Services Agreement; |
(ii) | DSS Services Agreement; and |
(iii) | the Management Agreements in respect of the vessels specified in clause 5.1(b). |
3.3 | WSM shall subscribe for 250 Ordinary Shares for cash at US$1.00 per Share and shall deliver payment for such Shares in cleared funds to the account of the Company (together the 'WSM Initial Subscription Monies'). |
3.4 | Diana shall subscribe for 249 Ordinary Shares for cash at US$1.00 per Share and shall deliver payment for such Shares in cleared funds to the account of the Company (together the 'Diana Initial Subscription Monies'). |
3.5 | The Parties shall procure that: |
(a) | on receipt of the WSM Initial Subscription Moneys, the Company shall allot and issue credited as fully paid for 250 Ordinary Shares to WSM and enter WSM in the stock register of the Company as the holder of the Shares subscribed for and issue share certificates to WSM in respect of such Shares; and |
(b) | on receipt of the Diana Initial Subscription Moneys, the Company shall allot and issue credited as fully paid for 249 Ordinary Shares to Diana and enter Diana in the stock register of the Company as the holder of the Shares subscribed for and issue share certificates to Diana in respect of such Shares. |
3.6 | Immediately following (but not before) the completion of all matters set out in clauses 3.2. 3.3. 3.4 and 3.5, the Parties shall procure that the Company shall proceed to all necessary actions for obtaining a licence from the appropriate Greek Governmental Authorities for the establishment of the Company Greek Office, including without limitation: |
(a) | the approval by the Board of the Company of the establishment of the Company Greek Office and the appointment by the Company of the Legal Representative of the Company Greek Office to be nominated by the Board of the Company and |
(b) | the submission by the Company (through the Legal Representative of the Company Greek Office) of the application for obtaining the afore-mentioned licence toward the appropriate Greek Governmental Authorities, together with all required supporting documentation. |
3.7 | Immediately following the issuance of the licence provided in clause 3.6, and in any event within three (3) months as from the date of such issuance, the Parties shall procure that the Company shall proceed to all necessary actions for the actual establishment and commencement of operation of the Company Greek Office, including but not limited to, the lease of offices, the hiring of personnel, and the purchase and installation of the furniture and other necessary office equipment. |
4. | FINANCE |
4.1 | If the Company requires finance in accordance with its Annual Business Plan, the Board shall make a proposal to Shareholders setting out the funding requirements, use of funds and the available options for raising such funds. The Shareholders shall acting in good faith in considering any proposal put forward by the Board. |
4.2 | Save as expressly provided in this Agreement, no Shareholder shall be under any obligation to contribute further funds, to guarantee or to provide security in relation to any obligations of a Group Company or to indemnify any third party in respect of the obligations or liabilities of a Group Company. |
4.3 | Save as expressly provided in this Agreement, no Shareholder shall be obliged to subscribe for further shares or loan stock of a Group Company. |
4.4 | No Shareholder shall pledge, charge, create a mortgage or otherwise encumber its Shares, nor shall it enter into any derivative arrangements pursuant to which it transfers some or all of its economic rights attaching to its Shares or is required to make payments calculated by reference to the returns generated by such economic rights without the written consent of the other Shareholder. |
5. | OBLIGATIONS OF DIANA |
5.1 | Diana shall: |
(a) | as soon as practicable following execution of this Agreement use its best endeavours to: (i) find appropriate (at Diana's discretion) office space available to be leased by the Company Greek Office under terms reflecting ordinary market practice for such type of leases; and (ii) identify appropriate (at Diana's discretion) personnel, in terms of both number and qualifications, to be employed by the Company Greek Office as per ordinary market practice for such type of offices. |
(b) | procure that following the completion of all the matters set out in clause 3 and clause 6.1(a) each of the owners of the following vessels enter into new Management Agreements with the Company: |
(i) | ALCYON; |
(ii) | ALCMENE; |
(iii) | CLIO; |
(iv) | CORONIS; |
(v) | ERATO; |
(vi) | NIREFS; |
(vii) | OCEANIS; |
(viii) | SEMIRIO; |
(ix) | SIDERIS GS; and |
(x) | TRITON. |
(c) | procure that DSS enters simultaneously with the signing of the Management Agreements into the DSS Services Agreement with the Company and that DSS delivers and implements the services described in the DSS Services Agreement: |
(d) | following the third anniversary of this Agreement (as set forth in clause 2.1), actively seek opportunities to expand the fleet under management by the Company in accordance with the Annual Business Plan, PROVIDED, however, that such obligation to actively seek opportunities to expand the fleet under management by the Company does not refer to any vessels owned by members of the Diana Group. |
6. | OBLIGATIONS OF WSM |
6.1 | WSM shall: |
(a) | as soon as practicable following execution of this Agreement, procure the establishment of a DOC for the Company being based on the WSM management systems; |
(b) | procure that WSM Norway enters simultaneously with the signing of the Management Agreements into the WSM Services Agreement with the Company and that WSM Norway delivers and implements the following services as further described in the WSM Services Agreement: |
(i) | crew and vessel accounting; |
(ii) | procurement; |
(iii) | HSEQ services; and |
(iv) | giving access to WSM's crew network. |
(c) | actively seek opportunities to expand the fleet under management by the Company in accordance with the Annual Business Plan. |
6A. | THE COMPANY GREEK OFFICE - CONDITIONS |
6A.1 | The Parties acknowledge and confirm that the establishment and continued lawful operation of the Company Greek Office is a prerequisite for the entry into, and the continuance of, this Agreement. Therefore, if the licence |
6A.2 | The Parties undertake to procure that the Company complies with all its obligations under Applicable Law. |
7. | COMPETITION |
7.1 | Diana agrees to procure that any contract in relation to the management of a vessel owned by a member of the Diana Group whose management is intended to be granted to a company outside the Diana Group shall be first offered to the Company by written notice and that the Company shall be granted 30 days exclusivity to negotiate the terms of the relevant services with the owner of such vessel. If no notice is received from the Company that it wishes to provide such services within 3 weeks of being advised of the opportunity or if the Company notifies Diana that it does not wish to provide such services or if no agreement is reached as to the terms of the relevant services within the afore-mentioned exclusivity period, then the Diana Group is free to arrange the relevant services from any third party. It is hereby clarified that each Shareholder or any of their respective Affiliates, or any of their respective partners, officers, members, shareholders, subsidiaries, directors, employees, agents, consultants, or legal or other advisors may otherwise explore or exploit an investment or business opportunity or prospective economic or competitive advantage in which a Group Company could have an interest or expectancy, or engage in, or hold interests in, one or more businesses that may compete with a business of a Group Company. |
7.2 | It is hereby agreed that for each new vessel belonging to an external customer (and not a member of the Diana Group) whose management is granted to the Company ('New Vessel') and up to a total number of New Vessels equal to the then number of Diana Vessels, there shall be a deduction of the total monthly management fees then payable to the Company in respect of the Diana Vessels by an amount equal to the amount of the total monthly operating expenses of the Company Greek Office (i.e. expenses for personnel, office lease and equipment, etc. less finance costs) divided by the number of the Diana Vessels and the New Vessels at that time. The amount of such deduction shall be apportioned among the Diana Vessels at the relevant time as further described in the sample calculation included as Schedule 7.2 hereto. However, in no event shall the total deduction amount granted per month result in numbers which are below the total fees payable to DSS under the DSS Services Agreement, i.e. the total monthly management fees payable to the Company in respect of the Diana Vessels shall always be more than the amount of total fees payable to DSS under the DSS Services Agreement. For the purposes of this clause 7.2, "Diana Vessels" means the vessels listed in clause 5.1(b) hereof and any other vessels belonging to a member of the Diana Group whose management is performed by the Company. |
8. | NON-POACH |
9. | ACCOUNTS AND FINANCIAL REPORTING |
9.1 | The Company shall: |
(a) | at all times maintain accurate and complete accounting and other financial records in United States dollars in accordance with the requirements of all Applicable Laws and International Financial Reporting Standards ('IFRS'); |
(b) | prepare and despatch monthly management accounts in prepared in accordance with IFRS in a format agreed by the Shareholders from time to time to the Shareholders within 10 Business Days of the end of the month in question; |
(c) | prepare and despatch quarterly management reports approved by the Board in a format agreed by the Shareholders from time to time to the Shareholders within 20 Business Days of the end of the quarter in question; |
(d) | prepare and despatch quarterly unaudited financial statements in accordance with IFRS as soon as practicable and in any event not later than 30 days after the end of the relevant quarter; |
(e) | prepare its annual audited accounts in respect of each accounting reference period in accordance with IFRS as are required by Applicable Law and procure that such accounts are audited as soon as practicable and in any event not later than 90 days after the end of the relevant accounting reference period; |
(f) | procure that the Company's auditors shall be Ernst & Young for the financial period of the Company up to and including 31 December 2015 and thereafter shall be as agreed by the Shareholders from time to time but shall, in any event, be a firm of international standing and experience; and |
(g) | provide promptly such further information and reports as any Shareholder may from time to time reasonably require as to any and all matters relating to the business or financial condition of each Group Company. |
10. | ACCESS TO INFORMATION |
10.1 | The Company shall: |
(a) | give each Shareholder and its respective authorised representatives full access at all reasonable times to carry out an audit and to examine and take copies of the books and records of the Company; |
(b) | promptly furnish to each Shareholder: |
(i) | such books, records, documents and information regarding the business affairs, finances, condition, employees, property, assets, intellectual property or any other matter relating to the Company and the business of the Joint Venture as the Shareholder may request from time to time; |
(ii) | copies of all information provided to any third party financier in accordance with the requirements of any banking facility documents at the same time as such information is provided to such person; |
(iii) | such further information in the possession or control of the Company regarding the financial condition and operations of its Group as a shareholder may reasonably request; |
(iv) | written notice as soon as reasonably practicable upon the Company or any Director becoming aware of any offer made to or from holders of any of the Ordinary Shares to purchase any Shares. |
(v) | written notice providing details of all claim forms, writs and petitions served on a Group Company within 5 Business Days of such service where the value of the claim exceeds US$50,000 (exclusive of costs); and |
(vi) | written notice, as soon as practicable and in any event no later than 5 Business Days after it becomes aware of any circumstances which are likely to lead to a Group Company being involved in any litigation or arbitration where the value of the claim exceeds US$50,000 (exclusive of costs) and of the commencement of any such litigation or arbitration giving as full particulars of such circumstances or such litigation or arbitration as are available to the Company. |
11. | ANNUAL BUDGET AND BUSINESS PLAN |
11.1 | The Company shall procure that the Board shall prepare an Annual Budget and Annual Business Plan in respect of each financial year of the Company's Group which shall include the following: |
(a) | an estimate of the working capital requirements of the Company's Group incorporated within a cash flow statement; |
(b) | a projected profit and loss account; |
(c) | an operating budget (including estimated capital expenditure and operational expenditure requirements) and balance sheet forecast; |
(d) | a review of the projected business; and |
(e) | a summary of business objectives. |
11.2 | The Annual Budget and Annual Business Plan in respect of the first accounting period shall be prepared before the date of commencement of the management of the vessels listed in clause 5.1(b) pursuant to the Management Agreements. |
11.3 | The Board shall submit Annual Budgets and Annual Business Plans in respect of subsequent accounting periods to the Shareholders for approval not later than 60 days before the commencement of the accounting period in question. Within 14 days of receipt of the Annual Budget and Annual Business Plan, either Shareholder shall be entitled to request such further information as may reasonably be required to enable it to reach an informed view |
11.4 | Following receipt of the draft Annual Budget and Annual Business Plan for any financial year and of any further information supplied in accordance with clause 11.3, the Shareholders shall consult each other upon the content of the draft and shall act in good faith and with reasonable diligence to agree its contents as soon as reasonably practicable. |
11.5 | If either or both of the Shareholders do not approve the Annual Budget or Annual Business Plan, the Company shall procure that the Board shall discuss the Shareholders' objections with each Shareholder and shall prepare and submit a revised Annual Budget and/or Annual Business Plan which deals with such objections not later than 15 days before the commencement of the accounting period in question. In the event that the Annual Budget and/or Annual Business Plan is not approved by the Shareholders then the Company shall be operated in accordance with such parts of the revised Annual Budget and Annual Business Plan as have been approved by the Shareholders and, in respect of any parts that have not been so approved, the Company shall continue to be operated in accordance with the prior year's Annual Budget and/or Annual Business Plan. |
11.6 | The Company shall procure that the Board will regularly review the Annual Budget and Annual Business Plan during the course of the financial year of the Company. The Board may propose changes to the Annual Budget and Annual Business Plan during the course of the relevant financial year to the Shareholders, who may approve such changes pursuant to clause 18. Each Shareholder shall respond to a proposal by the Board within 30 days of receipt of such proposal. |
12. | OPERATION OF BANK ACCOUNTS |
12.1 | The Parties shall procure that each of the Directors and Shareholders have not less than read only online access to the bank accounts of each Group Company for the purpose of monitoring expenditure. |
12.2 | The Parties agree that no withdrawal, payment or commitment will be made on a bank account of a Group Company in excess of US$20,000 without the written approval of at least one A Director and one B Director. |
13. | BOARD OF DIRECTORS |
13.1 | Subject to clause 18 and to Applicable Law, the Board shall be responsible for the management of the Company (provided always that the Board shall have the right to delegate any such responsibility as it sees fit). In particular, the Board shall approve the Company's strategy, oversee the implementation of such strategy, review the Company's financial results, set appropriate mandates and apply controls necessary to comply with the Annual Budget and the Annual Business Plan. |
13.2 | The Parties agree that the maximum number of directors of the Company shall be six (6), unless the Shareholders otherwise determine from time to time. For as long as they hold not less than 50 per cent. of the Shares in issue in the Company, WSM shall be entitled at any time to appoint three (3) Directors who shall be designated as A Directors and Diana shall be entitled at any time to appoint three (3) Directors who shall be designated as B Directors. In the event a Shareholder holds less than 50 per cent. of the Shares in issue in the Company, that Shareholder shall only be permitted to appoint one (1) designated Director and shall procure that any additional Director appointment by that Shareholder shall immediately resign from his or her position. The Shareholders may at any time remove and/or replace any of their nominated Directors, upon giving written notice to the other Shareholder. Each Shareholder shall to the extent reasonably practicable consult in advance with the other Shareholder regarding the identity of any proposed replacement Director to be nominated by it or any alternate director to be nominated by one of its nominated Directors. |
13.3 | The Shareholders shall take all action as may be necessary to ensure the appointment and/or removal of a Shareholder's nominated Director as specified in clause 13.2 in accordance with such Shareholder's instructions. |
13.4 | Each Director shall be entitled to make full disclosure to the Shareholder appointing him of any information relating to the Company which that Director may acquire in the course of his appointment. For the avoidance of doubt, all such information shall be treated as confidential information for the purposes of clause 21. |
13.5 | No Director shall be entitled to a salary from the Company by reason of him or her holding office as a director of the Company. WSM shall be responsible for the expenses incurred by the A Directors in their capacity as directors of the Company and Diana shall be responsible for the expenses incurred by the B Directors in their capacity as directors of the Company. Directors may appoint an alternate director in accordance with the Articles and any reference to a Director in this Agreement shall, where the context permits, include a reference to his alternate so appointed. |
13.6 | If a Shareholder has bona fide material concerns regarding the fitness for office or conduct of a Director or alternate director nominated or to be nominated by the other Shareholder, the Shareholders shall consult with each other and use their respective reasonable endeavours to deal with such concerns. |
14. | BOARD MEETINGS |
14.1 | The Board shall convene as necessary and appropriate to manage the affairs of the Company, but the Shareholders shall procure that the Board meets at least three times in each calendar year. |
14.2 | Unless otherwise agreed in writing by all the Directors, at least 5 Business Days' notice in writing shall be given of each meeting of the Board, which notice shall specify in as much detail as is practicable the time of the meeting, its location and the business to be considered at the meeting. Notice of a meeting of the Board shall be given by any Director or by the company secretary of the Company (if any) at the request of any Director. No other business may be transacted at any Board meeting unless all of the members of the Board present at such meeting agree. |
14.3 | The quorum necessary for the transaction of the business of the Board shall be four Directors, provided that at least two are A Directors and at least two are B Directors. If a quorum is not reached within 30 minutes after the time fixed for the Board meeting, such meeting shall be adjourned and the meeting shall be reconvened for the same time and day at the same place for the date 5 Business Days after the date set for the initial meeting. |
14.4 | Decisions of the Board shall be by simple majority of the votes cast including at least two A Directors and two B Directors. |
14.5 | The first Chairperson shall be nominated by Diana. The Chairperson shall not have a second or casting vote at Board meetings. The Shareholders shall alternate the right on a 2 year basis commencing on the date of this Agreement to appoint the Chairperson and his successors from among their respective nominee Directors. |
14.6 | This clause applies to the tenure and removal of the Chairperson: |
(a) | during the term of any given Chairperson, the Shareholder that did not nominate that Chairperson has the right to notify the other shareholder in writing ('Removal Notice') that the Chairperson must be removed ('Outgoing Chairperson'); |
(b) | each Shareholder can only exercise the right in clause 14.6(a) once every 12 months, with each 12 month period commencing on the date of this Agreement or the anniversary of the date of this Agreement as the case may be; |
(c) | upon receipt of a Removal Notice the Shareholder that nominated the Outgoing Chairperson must within five Business Days: |
(i) | remove the Outgoing Chairperson as its designated Director from the Board and appoint a new designated Director to the Board in accordance with clause 13.2; and |
(ii) | nominate a new Chairperson to serve out the remaining period of the Outgoing Chairperson's term. |
14.7 | Meetings of the Board may be conducted by telephone or video conference or any other electronic means by which each Director participating in the meeting can communicate with the other director(s). |
14.8 | In lieu of the Board meeting in person, a written resolution may be adopted by the Board, provided that such resolution is sent to all members of the Board and is signed and affirmatively adopted by all of the Directors. |
14.9 | If any matter to be considered or voted upon at a Board meeting relates to: (a) the Company enforcing rights under or taking any action against a Shareholder or an Affiliate of a Shareholder in relation to any matter arising under any agreement entered into between the Company and a Shareholder or an Affiliate of a Shareholder (including in the case of WSM the WSM Services Agreement and in the case of DSS the DSS Services Agreement); or (b) the Company defending itself against any action taken or threatened against it by a Shareholder or an Affiliate of a Shareholder, then that matter will be considered at a separate meeting or meetings of the Board, and the Directors appointed by the relevant Shareholder referred to above will not be entitled to: (i) receive information or advice received by the Company on such matter; or (ii) vote (or be counted in the quorum at a meeting) in relation to such matter. The quorum for such a meeting will be at least two Directors who are entitled to vote on the matter and the provisions of clause 18 will not apply in respect of such matter. |
14.10 | If a question arises at a meeting of Directors as to the right of a Director to vote, the question may, before the conclusion of the meeting, by a decision of the Board (such decision to be made by way of a vote of the Directors present at the meeting other than the Director whose right to vote is in question), be referred to the Chairperson |
15. | LANGUAGE OF MEETINGS |
15.1 | All Board and Shareholder meetings and resolutions shall be conducted and recorded in the English language and, subject to Applicable Law as to the books and records of the Company Greek Office, the books and records of the Company shall be in English. Where any such document is translated into a language other than English, the English language text shall prevail. |
16. | GROUP COMPANIES |
16.1 | The Parties shall procure that the provisions of clauses 13 to 15 shall apply, mutatis mutandis, to the composition and conduct of the board of each Group Company, unless otherwise agreed by the Shareholders. |
17. | DAY-TO-DAY MANAGEMENT OF THE COMPANY AND ITS GROUP |
17.1 | The day-to-day management of the Group Companies shall be conducted by a managing director and a senior management team appointed and supervised by the Board in each case as approved unanimously by the Shareholders. The Board will determine, from time to time, the roles and responsibilities of the members of the senior management team. For the avoidance of doubt, the managing director shall be a director in title only and shall not be a member of the Board. |
17.2 | Pursuant to Applicable Law, the Company shall delegate to the Legal Representative of the Company Greek Office all powers and duties in connection with the operation of such office and the Legal Representative shall represent and bind the Company in all its affairs connected with the Company Greek Office. In exercising the powers and duties under this clause, the Legal Representative shall act pursuant to any relevant directions from the Board and always in accordance with clause 18. |
17.3 | The Shareholders shall procure that the Board procures that: |
(a) | each Group Company is fully insured (in the case of insurance against loss of or damage to property for an amount not less than the reinstatement value) with a well-established and reputable insurer against all such risks as are usually insured against by persons carrying on similar businesses (including consequential loss of profits for a period of not less than six months and environmental, pollution and impairment risks) for the life of the Joint Venture; and |
(b) | each Group Company conducts its business in accordance with all Applicable Laws, in accordance and within any constitutional restriction (if any) on its objects and powers, solely under its corporate name and without infringement of any proprietary right or interest of any other person. |
17.4 | Each Party undertakes to the other Parties that it: |
(a) | shall not, and, in the case of the Company it shall procure that each Group Company shall not, engage in any activity, practice or conduct which would constitute an offence under any anti-bribery or corruption law applicable to that Party, including but not limited to the UK Bribery Act 2010 and the US Foreign Corrupt Practices Act 1977 (`Anti-Corruption Law'); and |
(b) | has, and shall procure that each member of the Company's Group has, and shall maintain in place, adequate procedures designed to prevent any associated person from undertaking any conduct that may give rise to an offence under any Anti-Corruption Law. |
18. | RESERVED MATTERS |
18.1 | Subject to clauses 18.2 and 18.3, for as long as the Shareholders hold Shares in the Company, the Company shall not, and shall procure that no Group Company shall, without the prior written consent of the Shareholders do any of the matters set out in Schedule 1. |
18.2 | Unless a Shareholder notifies the Company and the other Shareholder that it does not wish this clause to apply to it (which notice it can give and revoke at any time) and subject to Applicable Law, for the purposes of clause 18.1 and any other provision under this Agreement that requires Shareholder consent or approval, any two A Directors shall have the power and authority to give consent or approval in respect of any Reserved Matter on behalf of WSM, and any two B Directors shall have the power and authority to give consent or approval in respect of any Reserved Matter on behalf of Diana, in each case either in writing or through their affirmative vote at a meeting of the Board at which they are present. |
18.3 | The Shareholders shall be deemed to have consented to any Reserved Matter to the extent that such matter is explicitly provided for in the Annual Business Plan or Annual Budget as approved in accordance with clause 11. |
18.4 | No Shareholder will be entitled to exercise any right or power to prevent any Group Company from enforcing its rights under or taking any action against that Shareholder or its Affiliate in relation to any matter arising under any agreement entered into between any Group Company and a Shareholder or any of its Affiliates or from defending itself in relation to any action taken against it by a Shareholder or any of its Affiliates. |
19. | DISTRIBUTION OF PROFITS |
20. | INTELLECTUAL PROPERTY |
20.1 | For the purposes of this clause 20, Intellectual Property means and is comprised of: |
(a) | (WSM Intellectual Property) any patent, copyright, database right, design right, trade mark, brand name, logos including but not limited to the 'W flag" of the Wilh. Wilhelmsen Holding ASA Group, the Wilhelmsen Ship Management branding and any other trademark or product brands of the Wilh. Wilhelmsen Holding ASA Group and any other industrial or intellectual property owned or used by the Wilhelmsen Holding ASA Group, whether registered or not, together with any current applications for any registerable items of the foregoing; and |
(b) | (Diana Intellectual Property) industrial or intellectual property owned or used by Diana, whether registered or not, together with any current applications for any registerable items of the foregoing. |
20.2 | All Intellectual Property utilised by the Company, shall be owned by and registered in the name of the relevant Shareholder or their relevant Affiliate. The Company is not entitled to the ownership or registration of any Intellectual Property. |
20.3 | Upon termination of this agreement the Parties shall immediately, unless otherwise agreed in writing: |
(a) | cease to describe themselves as joint venture partners or any kind of associate of the other Party or its Affiliates and cease from any act and omission indicating or suggesting any relationship with the other Party or its Affiliates; |
(b) | cease to use all Intellectual Property of the other Party (including without limitation on stationery and vehicles) and the other Party's sales and advertising material related to or referring to the other Party or its products and services; and |
(c) | shall procure that the Company remove any and all logos, banners or material carrying reference to any member within the Wilh. Wilhelmsen Holding ASA Group, and for the avoidance of doubt, Diana agrees and undertakes to WSM that upon Diana ceasing to be a Shareholder it will cease to use any WSM Intellectual Property or anything substantially identical or deceptively similar to the WSM Intellectual Property. |
20.4 | In the event that a Shareholder ceases to be a Shareholder, the Parties must, in addition to their obligations under clause 20.3, remove from the Company's name, by way of Unanimous Shareholders' Resolution, all references to WSM or Diana as the case may be as soon as possible and in any event no later than 10 Business Days after the date on which the relevant Shareholder ceases to be a Shareholder. |
20.5 | Each party acknowledges that the Intellectual Property of the other Party or any of that Party's Affiliates, is their property and no such rights are automatically granted to a Party or Diana with respect to another Party's Intellectual Property by virtue of this Agreement. |
21. | CONFIDENTIALITY |
21.1 | Each Party shall keep and treat as strictly confidential and not at any time disclose or make known in any way to any person who is not a Party, or use for a purpose other than the performance of its obligations under this Agreement, any information which it now possesses or which may come within its knowledge during the term of this Agreement, in relation to or connected with or arising out of this Agreement or the matters contained in it, the existence of this Agreement or the business, activities or affairs of any other Party (together 'Confidential Information') or, through any failure to exercise all due care, cause any unauthorised disclosure of any |
(a) | disclosure is required by law or for the purpose of any judicial proceedings or by any regulatory authority, government body or recognised securities exchange, after consultation with the relevant Party, where practicable and legally permitted to do so; |
(b) | the information is or becomes generally available to the public other than as a result of a breach of any undertaking or duty of confidentiality by any person; |
(c) | the information is disclosed on a strictly confidential basis by a Party to its advisers, auditors and bankers for the purposes of its business; |
(d) | disclosure is by a Party to a member of its Group provided that it shall procure that such Group member shall keep such information confidential upon the terms of this clause 21; or |
(e) | the relevant Parties have given their prior written consent to the contents and manner of the disclosure. |
21.2 | Notwithstanding clause 21.1(a) and subject to Applicable Law, no Party shall make any regulatory announcement concerning any aspect of this Agreement or its existence or the business of the Company without first taking reasonable steps to obtain the agreement of the Shareholders to the text of that announcement. |
21.3 | The provisions of this clause 21 shall continue in force in accordance with their terms for the continuance of this Agreement and for a period of 36 months following its termination. |
22. | TAXATION |
23. | DEADLOCK |
23.1 | The Parties agree that a deadlock ('Deadlock') arises, in respect of a matter, on the first date on which the following requirements are satisfied: |
(a) | a meeting of Directors cannot be convened because of the absence of the required quorum after three successive attempts; or |
(b) | a matter of Important Business has arisen for the determination of the Board and the Board is unable to reach a decision with the requisite majority after three successive attempts (together with (a) a 'Board Deadlock'); or |
(c) | a general meeting of Shareholders cannot be convened because of the absence of the required quorum after three successive attempts; or |
(d) | a Reserved Matter has arisen for the approval of the Shareholders and the Shareholders are unable to approve such matter with the requisite majority after three successive attempts (together with (c) a 'Shareholder Deadlock'); or |
23.2 | If a Deadlock arises and the Shareholders have not otherwise resolved the matter, any Shareholder ('first party') may issue a notice ('Trigger Notice') to the other Shareholder ('second party') in which the first party shall: |
(a) | offer to purchase all, but not less than all, of the second party's Shares; |
(b) | specify the price at which the first party is willing to purchase the relevant Shares; and |
(c) | nominate a completion date, which is to be not less than 30 Business Days and not more than 40 Business Days after the date of the Trigger Notice. |
23.3 | The second party must, within 10 Business Days following the date of the Trigger Notice elect, by notice in writing to the first party, either to: |
(a) | sell all of its Shares to the first party; or |
(b) | purchase all of the first party's Shares, |
23.4 | Upon an election (or deemed election) being made pursuant to clause 23.3, a contract of sale, including the terms specified in the Trigger Notice, shall be deemed to arise between the first party and the second party on the earlier of the date the second party gave the notice referred to in clause 23.3 or the expiry of the election period, and completion shall occur within the period specified in the Trigger Notice. |
24. | TRANSFER OF SHARES |
24.1 | Save as permitted by this clause 24.1, no Shareholder shall sell, transfer, or otherwise dispose of any Share, or any interest in any Share (including any voting right attached to it), enter into any agreement in respect of the votes attaching to any Share or enter into any agreement, conditional or otherwise, to do any of the foregoing, except with the prior written consent of the other Shareholder (which consent shall not be unreasonably withheld or delayed). The Company shall procure that the Board declines to approve for registration any transfer of Shares which does not comply with the provisions of this clause 24.1. |
24.2 | Subject always to clauses 4.3, 4.4 and 24.4, a Shareholder (the 'Transferor') may sell, transfer or otherwise dispose of the whole (but not less than the whole) of its Shareholding to an Affiliate of the Transferor (such company hereinafter referred to as a 'Permitted Transferee'). |
24.3 | Any transfer to a Permitted Transferee under clause 24.2 shall only be permitted if: |
(a) | prior written notice of the transfer is given to the other Shareholder; |
(b) | such transfer is not in breach of, or will not result in any breach of, or is not inconsistent with, any Applicable Law; |
(c) | the Permitted Transferee executes the Deed of Adherence agreeing to be bound as a Shareholder to the provisions of this Agreement in accordance with clause 24.8; |
(d) | the Permitted Transferee agrees with the other Shareholder that, should it at any time cease to qualify as a Permitted Transferee of the Transferor, it will, prior to or immediately upon so ceasing, transfer the relevant Shares to the Transferor or an entity then qualifying as a Permitted Transferee of the Transferor; and |
(e) | the Transferor agrees to ensure that the Permitted Transferee will comply in all respects with its obligations hereunder and the transfer shall not relieve the Transferor of any liability under this Agreement whether accruing before or after such transfer and the Transferor shall remain liable for any breach of this Agreement by the Permitted Transferee. |
24.4 | As security for a Transferor's obligations pursuant to clause 24.3(e), each Shareholder hereby irrevocably appoints the Company as its attorney to execute any such transfer on its behalf (whether as transferor or transferee) at such consideration as the original Transferor shall notify to the Company or, in default of such notification prior to the date of the transfer, for such consideration (including a nil consideration) as the Company shall in its absolute discretion consider appropriate. In order that the Company is able to monitor whether any obligations arise in relation to clause 24.3(e) or this clause 24.4, each Shareholder shall notify the Company forthwith if it ceases to be an Affiliate of the Transferor or if the Permitted Transferee ceases to be an Affiliate of it, and the Shareholders shall each provide the Company with such evidence as any member of the Board may reasonably require to ensure that no obligations have arisen in relation to it pursuant to clause 24.3(e) or this clause 24.4. |
24.5 | Where a Shareholder wishes to make a transfer of all (but not some) of its Shares (the 'Offered Shares'), other than to a Permitted Transferee, it must first serve written notice upon the Company and the other Shareholder (a 'Transfer Notice') informing them of its intention and inviting the other Shareholder to apply in writing to the Transferor for all (but not some) of the Offered Shares. The Transfer Notice shall specify the number of Offered Shares to be transferred, the price and other material terms of the offer and a time (being not less than fifteen (15) Business Days) within which the other Shareholder must make applications for Offered Shares as aforesaid or the offer will lapse ('Offer Period'). A Shareholder shall not be permitted to transfer a part interest in its holding of Shares except with the prior written consent of the other Shareholder. |
24.6 | If the other Shareholder applies for the Offered Shares, the Transferor shall be obliged to allocate the Offered Shares to that Shareholder. |
24.7 | If, following the expiry of the Offer Period, the Offered Shares remain to be sold, the Transferor may transfer such remaining Offered Shares to a third party upon terms that are no more favourable than those offered to the existing Shareholder under this clause 24.1 provided that such transfer is completed with 30 days of the date of expiry of the Offer Period. |
24.8 | It shall be a condition of any allotment, issue or transfer of a Share or any interest therein to a person who is not a party to this Agreement that such person (the 'Transferee') shall duly adhere to and become a party to this Agreement (as a Shareholder) by executing a Deed of Adherence, and the Company shall not register the Transferee or otherwise admit such Transferee as a Shareholder unless and until a Deed of Adherence has been so executed by the Transferee to the reasonable satisfaction of the Board. Any person to whom Shares have been transferred in accordance with this clause 24.1 and which duly executed a Deed of Adherence shall be treated thereafter as a Shareholder and a Party for the purposes of this Agreement. |
25. | COMPULSORY TRANSFER |
25.1 | Upon the occurrence of any of the following events: |
(a) | a Shareholder suffers an Insolvency Event; |
(b) | a Shareholder commits a material breach of this Agreement, and if such breach is capable of remedy, is not remedied within 20 Business Days of the earlier of the defaulting Shareholder becoming aware of such breach and the other Shareholder giving written notice to the defaulting Shareholder of the breach; |
(c) | a change of control of a Shareholder except where an Affiliate of the Shareholder continues to have control, |
26. | DRAG ALONG |
26.1 | If a Shareholder ('Selling Shareholder') wishes to transfer all of its Shares to a Buyer, the Selling Shareholder may, subject to the other Shareholder not giving notice to acquire the Shares pursuant to clause 24.6 or the transfer being a transfer to a Permitted Transferor pursuant to clause 24.2, require the other Shareholder ('Dragged Shareholder') to sell and transfer all its Shares to the Buyer (or as the Buyer directs) in accordance with the provisions of this clause 26 ('Drag Along Option'). |
26.2 | The Selling Shareholder may exercise the Drag Along Option by giving written notice to that effect ('Drag Along Notice') at any time before the transfer of the Selling Shareholder's Shares to the Buyer. The Drag Along Notice shall specify: |
(a) | that the Dragged Shareholder is required to transfer all its Shares (`Called Shares') pursuant to this clause 26; |
(b) | the person to whom the Called Shares are to be transferred; |
(c) | the consideration payable for the Called Shares which shall, for each Called Share, be an amount equal to the price per Share paid for the Shares being acquired from the Selling Shareholder by the Buyer; and |
(d) | the proposed date of the transfer. |
26.3 | Once issued, a Drag Along Notice shall be irrevocable. However, a Drag Along Notice shall lapse if, for any reason, the Selling Shareholder has not sold its Shares to the Buyer within 60 Business Days of serving the Drag Along Notice. The Selling Shareholder may serve further Drag Along Notices following the lapse of any particular Drag Along Notice. |
26.4 | No Drag Along Notice shall require the Dragged Shareholder to agree to any terms except those specifically set out in this clause 26, provided that the Dragged Shareholder shall be required to give warranties to the Buyer as to its title to the Shares and its capacity to transfer the Shares if requested to do so by the Buyer or the Selling Shareholder. |
26.5 | Completion of the sale of the Called Shares shall take place on the Completion Date. Completion Date means the date proposed for completion of the sale of the Selling Shareholder's Shares unless: |
(a) | the Dragged Shareholder and the Selling Shareholder agree otherwise in which case the Completion Date shall be the date agreed in writing by the Dragged Shareholder and the Selling Shareholder; or |
(b) | that date is less than 10 Business Days after the date on which the Drag Along Notice is served, in which case the Completion Date shall be 20 Business Days after service of the Drag Along Notice. |
26.6 | The rights of pre-emption set out in the Articles shall not apply to any transfer of shares to a Buyer (or as it may direct) pursuant to a sale for which a Drag Along Notice has been duly served. |
26.7 | Within 10 Business Days of the Selling Shareholder serving a Drag Along Notice on the Dragged Shareholder, the Dragged Shareholder shall deliver stock transfer forms for the Called Shares, together with the relevant share certificates (or a suitable indemnity for any lost share certificates) to the Company. On the Completion Date, the Company shall pay the Dragged Shareholder, on behalf of the Buyer, the amounts they are due for their Shares pursuant to clause 26.2(c) to the extent that the Buyer has put the Company in the requisite funds. The Company's receipt for the price shall be a good discharge to the Buyer. The Company shall hold the amounts due to the Dragged Shareholder pursuant to clause 26.2(c) in trust for the Dragged Shareholder without any obligation to pay interest. |
26.8 | To the extent that the Buyer has not, on the Completion Date, put the Company in funds to pay the consideration due pursuant to clause 26.2(c), the Dragged Shareholder shall be entitled to the return of the stock transfer forms and share certificates (or suitable indemnity) for the relevant Called Shares and the Dragged Shareholder shall have no further rights or obligations under this clause 26 in respect of its Shares. |
26.9 | If the Dragged Shareholder does not, on completion of the sale of the Called Shares, execute transfer(s) in respect of all of the Called Shares held by it, the Dragged Shareholder shall be deemed to have irrevocably appointed any person nominated for the purpose by the Selling Shareholder to be his agent and attorney to execute all necessary transfer(s) on his behalf, against receipt by the Company (on trust for such holder) of the consideration payable for the Called Shares, to deliver such transfer(s) to the Buyer (or as they may direct) as the holder thereof. After the Buyer (or its nominee) has been registered as the holder, the validity of such proceedings shall not be questioned by any such person. Failure to produce a share certificate shall not impede the registration of shares under this clause 26. |
27. | TAG ALONG |
27.1 | Except where a Shareholder gives notice to acquire a Selling Shareholder's Shares pursuant to clause 24.6 or the transfer is a transfer to a Permitted Transferor pursuant to clause 24.2, the provisions of clauses 27.2 to 27.5 shall apply if, in one or a series of related transactions, a Selling Shareholder proposes to transfer all of its Shares (`Proposed Transfer') to a Buyer. |
27.2 | Before making a Proposed Transfer, the Selling Shareholder shall procure that the Buyer makes an offer (`Tag Along Offer') to the other Shareholder (`Tag Along Shareholder') to purchase all of the Shares held by them for a consideration in cash per Share that is equal to the price per Share paid for the Shares being acquired from the Selling Shareholder by the Buyer. |
27.3 | The Tag Along Offer shall be given by written notice ('Tag Along Notice'), at least 20 Business Days ('Offer Period') before the proposed sale date (`Sale Date'). To the extent not described in any accompanying documents, the Tag Along Notice shall set out: |
(a) | the identity of the Buyer; |
(b) | the purchase price which shall equal the price per Share being paid for the Shares being acquired by the Buyer from the Selling Shareholder; |
(c) | the Sale Date; and |
(d) | the number of Shares proposed to be purchased by the Buyer ('Offer Shares'). |
27.4 | If the Buyer fails to make the Tag Along Offer to the Tag Along Shareholder in accordance with clauses 27.2 and 27.3, the Selling Shareholder shall not be entitled to complete the Proposed Transfer and the Company shall not register any transfer of Shares effected in accordance with the Proposed Transfer. |
27.5 | If the Tag Along Offer is accepted by the Tag Along Shareholder within the Offer Period, the completion of the Proposed Transfer shall be conditional on completion of the purchase of the Offer Shares held by the Tag Along Shareholder. |
28. | TERM AND TERMINATION |
28.1 | This Agreement shall continue until the earlier of (i) the Shareholders mutually agreeing to terminate the Joint Venture in relation to the Company; (ii); a Shareholder validly serving a Winding Up Notice in accordance with the provisions of clause 28.2 or the Shareholders otherwise approving the winding up of the Company pursuant to clause 18; and (iii) one of the Shareholders ceasing to hold any Shares in the Company (each a 'Termination Event'). Upon the occurrence of such a Termination Event, the provisions of clause 29 shall apply. |
28.2 | Either Shareholder (the 'Terminating Shareholder') may, without prejudice to any other right or remedy it may have, serve a notice ('Winding Up Notice') to the other Shareholder (the 'Non-Terminating Shareholder') bringing into effect the provisions of clause 29 after it becomes aware of any of the following events: |
(a) | the Non-Terminating Shareholder is in material breach of this Agreement and, if such breach is capable of remedy, fails to remedy such breach within 30 days of the service of a written notice by the Terminating Shareholder specifying such breach and requiring it to be remedied; |
(b) | the Non-Terminating Shareholder undergoes an Insolvency Event. Each Shareholder undertakes to the other to notify the other in writing immediately upon it becoming aware that it is reasonably likely to undergo or has undergone, such an Insolvency Event; |
(c) | there is a change of control of the Non-Terminating Shareholder; |
(d) | the activities or existence of a Group Company, or any of the transactions or relationships constituted or envisaged by this Agreement, violate or are inconsistent with, or would violate or be inconsistent or result in non-compliance with, any Applicable Law and the Shareholders have not been able, having used their respective reasonable endeavours, to agree how to avoid such violation, inconsistency or non-compliance. |
(e) | by reason of any actual and implemented change in, or in the interpretation or application of, or the introduction of, any law, regulation or official mandatory directive (whether or not having the force of law) or practice followed by the relevant Governmental Authorities, resulting in that the activities of the Greek Company Office or any of the transactions constituted or envisaged by this Agreement, violate or are inconsistent with, or would violate or be inconsistent or result in non-compliance with, any Applicable Law in respect of the Company Greek Office. |
28.3 | The provisions of clauses 28 and 29 shall be without prejudice to any right or obligation of any Shareholder arising under this Agreement which is outstanding at the time of any person ceasing to hold any Shares or upon the termination of this Agreement and shall not affect any provision of this Agreement which is expressly or by implication provided to come into effect upon, or to continue in effect after, such termination. |
28.4 | Upon the termination of this Agreement in accordance with clause 28.3, the Company shall be wound up in accordance with the provisions of clause 29. |
28.5 | Where a Party and its Affiliates cease to hold any Shares, this Agreement (other than clause 21 or where required pursuant to clause 23.1) shall cease to bind such Party. This Agreement shall also automatically terminate as between all the Parties upon the Company having only one Shareholder (and there being no options or other legally binding rights to call for the issue of Shares still outstanding). |
29. | WINDING UP AND CONSEQUENCES OF TERMINATION |
29.1 | Upon the occurrence of a Termination Event, unless the Shareholders mutually agree otherwise: |
(a) | the Shareholders shall procure that the Company is wound up as soon as possible after the occurrence of the relevant Termination Event in the most efficient manner possible and in accordance with all Applicable Law; |
(b) | upon request of either Shareholder, the Parties will procure that the Company engages an insolvency expert to assist with the winding up process and if required will procure the appointment by the Company of a liquidator; and |
(c) | the Shareholders shall pass such resolutions as may be necessary to complete the winding up. |
29.2 | After the occurrence of a Termination Event and until the Company is wound up, the Parties shall use all reasonable endeavours to ensure that: |
(a) | all existing contracts of the Company are performed and closed out as soon as possible to the extent that there are sufficient resources; |
(b) | unless the Parties otherwise agree, the Company shall not enter into any new contractual obligations or undertake any new activity save as may be ancillary to the activities required by sub-clause (a) above; |
(c) | any proprietary information or intellectual property rights belonging to or originating from a Party shall be returned to it by the other Party or the Company; and |
(d) | each Party shall continue to comply with all other terms of this Agreement until the winding up process has been completed. |
29.3 | This Agreement shall automatically terminate once the winding up of the Company is completed. Such termination shall be without prejudice to any right, obligation or remedy accrued as at the date of termination and |
29.4 | If either Shareholder fails or is unable to give its co-operation pursuant to this clause 29 in order to complete the winding up process of the Company, the other Shareholder, without prejudice to any other right or remedy that it may have, shall be entitled in the name of the first Shareholder to execute any resolution or other document as may be necessary to allow the winding up of the Company to proceed and be completed and each of the Shareholders irrevocably appoints the other its attorney with power to execute such documents for such purposes. |
29.5 | Upon the occurrence of a Termination Event, the WSM Services Agreement shall be automatically terminated on the terms set forth in the WSM Services Agreement clause 4b. |
30. | WARRANTIES |
30.1 | Each Party warrants to the other that: |
(a) | it is duly organised, validly existing and (to such extent such concept is relevant under its jurisdiction) in good standing under the laws of its jurisdiction of incorporation or formation, with all requisite power and authority to enter into and perform its obligations under this Agreement; |
(b) | this Agreement has been duly authorised, executed and delivered by such Party, constitutes the legal, binding obligations of such Party and is enforceable in accordance with its terms except insofar as enforcement may be limited by bankruptcy, insolvency or other laws relating to or affecting enforcement of creditors' rights or general principles of equity; |
(c) | no consents or approvals are required from any governmental authority or other person for such Party to enter this Agreement; |
(d) | all corporate, partnership or other actions on the part of such Party necessary for the authorisation, execution and delivery of this Agreement, and the consummation of the transactions and agreements contemplated hereby, have been taken; and |
(e) | neither the execution and delivery of this Agreement by such Party nor the consummation of the transactions or agreements contemplated herein, conflict with or contravene the provisions of such Party's organisational documents or any agreement or instrument by which it or its properties are bound, or any law, rule or regulation, order or decree to which its or its properties are subject. |
30.2 | WSM warrants to Diana that WSM Norway is a wholly owned subsidiary of WSM as at the date of this Agreement. Should the ownership of WSM Norway change during the term of this Agreement WSM shall notify Diana in writing about the changes without undue delay. |
31. | LIMITATION OF LIABILITY |
32. | GENERAL |
32.1 | Each of the Shareholders shall exercise all voting rights and other powers of control available to them in relation to the Company and indirectly in relation to each Group Company so as to procure (so far as each is able by the exercise of such rights and powers) that at all times during the term of this Agreement the provisions concerning the structure and organisation of each Group Company and the regulation by the Shareholders of the affairs of each Group Company set out in this Agreement are duly observed and given full force and effect and all actions required of the Parties under this Agreement are carried out in a timely manner. Without prejudice to the generality of the foregoing, each Shareholder shall procure that (subject to their fiduciary duties) each of the directors appointed or deemed to be appointed by it shall execute and do all such acts and things and give and confer all such powers and authorities as they would have been required to execute, do give or confer had they been a party and had covenanted in the same terms as the Party which nominated them a director. |
32.2 | If there shall be any conflict between the provisions of this Agreement and the provisions of the Articles, then as between the Shareholders, the provisions of this Agreement shall prevail. In the event of a conflict between the provisions of this Agreement and the provisions of the Articles, the Shareholders shall procure so far as each is able that the Articles are amended so that they do not conflict with this Agreement. Each Shareholder agrees that it will not exercise any rights conferred on it by the Articles of the Company which are or may be inconsistent with its rights or obligations under this Agreement. |
32.3 | Notwithstanding any other provisions of this Agreement, in the event that either Shareholder (or any of its Affiliates) shall be in dispute with or shall have a conflict of interest with any Group Company, whether as a party to a contract with the Group Company referred to in this Agreement or otherwise, such Shareholder shall, and shall procure that the directors nominated by it to the Board and to the board of the relevant Group Company shall, not do anything or omit to do anything (whether through the exercise of any voting rights or otherwise) which would or might prevent the Group Company from exercising or from deciding whether or not to exercise such rights as it may have in respect of the matter or against the Shareholder (or its Affiliate) in question in the best interests of the Group Company, as the case may be, without regard to such dispute or conflict of interest. |
32.4 | Other than where expressly otherwise provided, nothing in this Agreement shall create, or be deemed to create, a partnership at law, or the relationship of principal and agent, between the Parties or any of them. |
32.5 | This Agreement constitutes the entire agreement between the Parties and supersedes and extinguishes all previous drafts, agreements, arrangements and understandings between them, whether written or oral, relating to its subject matter. |
32.6 | Each Party agrees and acknowledges that: |
(a) | in entering into this Agreement it does not rely on, and shall have no remedies in respect of, any representation or warranty (whether made innocently or negligently) that is not set out in this Agreement; and |
(b) | it shall have no claim for innocent or negligent misrepresentation based upon any representation or warranty set out in this Agreement. |
32.7 | If any provision of this Agreement is held by any court or other competent authority to be void, invalid or unenforceable in whole or in part, this Agreement shall continue to be valid as to its other provisions and the remainder of the affected provisions; and the Parties agree to negotiate in good faith such suitable alternative provisions replicating as nearly as possible the intention of such invalid provision, being in the case of a provision held void by a competent authority a provision which is acceptable to the relevant competent authority. |
32.8 | This Agreement may be executed in any number of counterparts, each of which when executed and delivered shall constitute an original of this Agreement, but all the counterparts shall together constitute the same Agreement. |
32.9 | The Parties shall bear their own costs of and incidental to the preparation, execution and implementation of this Agreement and the establishment of the Company. |
33. | ASSIGNMENT |
33.1 | Save as permitted by clauses 33.2, this Agreement is personal to the Parties and none of them may assign, mortgage, charge (otherwise than by floating charge) or sub-license any of its rights under this Agreement, or sub-contract or otherwise delegate any of its obligations under this Agreement, except with the prior written consent of the other Parties. |
33.2 | A Shareholder may assign in whole or in part the benefit of this Agreement to any Permitted Transferee (provided that if such assignee ceases to be a Permitted Transferee the benefit of this Agreement shall be deemed automatically by that fact to have been re-transferred to the Buyer immediately before the assignee ceases to be a Permitted Transferee). |
34. | WAIVERS AND AMENDMENTS |
34.1 | No failure or delay by any Party in exercising any of its rights under this Agreement shall be deemed to be a waiver of such rights and no waiver of a breach of any provision of this Agreement shall be deemed to be a waiver of any subsequent breach of the same or any other provision. |
34.2 | No amendment shall be made to this Agreement save by instrument in writing signed by the Parties. |
35. | SERVICE OF NOTICES |
35.1 | Any notice or other communication to be given or served under or in connection with this Agreement shall be in writing and may be delivered by hand, sent by pre-paid international courier, or sent by fax to the Party due to receive the notice at the following address or fax number or sent by electronic mail: |
(i) | in the case of WSM, at c/o Strandveien 20, 1366 Lysaker, Norway, attention Mr Carl Schou (fax: + 60 320845602), |
(ii) | in the case of Diana, at do Pendelis 16, 17564 Palaio Faliro, Athens, Greece, attention: the Manager (fax: +302109470101) |
(iii) | in the case of the Company, at the address of the Company Greek Office, attention: the Legal Representative of the Company Greek Office (fax: the fax number of the Company Greek Office); and |
(iv) | in the case of any other Party, at the address or fax number specified in its Deed of Adherence, |
35.2 | A notice is deemed to be given or served: |
(a) | if delivered by hand, at the time it is left at the address; |
(b) | if sent by international courier, on the fourth Business Day after despatch; and |
(c) | if sent by fax, on receipt of a clear transmission report. |
35.3 | In the case of a notice given or served by fax or by hand, where this occurs after 5.00 p.m. on a Business Day, or on a day which is not a Business Day, the date of service shall be deemed to be the next Business Day. |
36. | GOVERNING LAW AND JURISDICTION |
36.1 | This Agreement and any dispute or claim (whether contractual or otherwise) arising out of or in connection with it or its subject matter shall be governed by and construed in accordance with English law and each Party irrevocably submits to the exclusive jurisdiction of the English Courts in relation to any such dispute or claim. |
36.2 | No term of this Agreement shall be enforceable under the Contracts (Rights of Third Parties) Act 1999 by any person (a 'Third Party') other than the Parties to this Agreement, and the consent of a Third Party shall not be required for any amendment to or termination of this Agreement. |
36.3 | WSM irrevocably appoints Wilh. Wilhelmsen Holding ASA (attn: Chief Legal Officer, Corporate Legal department) at present of Strandveien 20, PB 33, 1324 Lysaker, Norway as its process agent to receive on its behalf service of process in any proceedings in England. Such service shall be deemed completed on delivery to such process agent (whether or not it is forwarded to and received by WSM). If for any reason such process agent ceases to be able to act as a process agent or no longer has an address in England WSM irrevocably agrees to appoint a substitute process agent acceptable to the other Parties and to deliver to such other Parties a copy of the new process agent's acceptance of that appointment within 28 days. |
36.4 | Diana irrevocably appoints A. Nicolaou & Co. at present of Heath Drive, Potters Road, Herts EN6 1 EN, England as its process agent to receive on its behalf service of process in any proceedings in England. Such service shall be deemed completed on delivery to such process agent (whether or not it is forwarded to and received by Diana). If for any reason such process agent ceases to be able to act as a process agent or no longer has an address in England Diana irrevocably agrees to appoint a substitute process agent acceptable to the other Parties and to deliver to such other Parties a copy of the new process agent's acceptance of that appointment within 28 days. |
36.5 | The Company irrevocably appoints A. Nicolaou & Co. at present of Heath Drive, Potters Road, Herts EN6 1 EN, England as its process agent to receive on its behalf service of process in any proceedings in England. Such service shall be deemed completed on delivery to such process agent (whether or not it is forwarded to and received by the Company). If for any reason such process agent ceases to be able to act as a process agent or no longer has an address in England the Company irrevocably agrees to appoint a substitute process agent acceptable to the other Parties and to deliver to such other Parties a copy of the new process agent's acceptance of that appointment within 28 days. |
Executed
and
delivered as a deed
by
Wilhelmsen Ship Management Holding
Limited
acting by: Dag Schjerven
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/s/ Dag Schjerven
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Director
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In the presence of:
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/s/ Mette Stokke Nord | |
Name: Mette Stokkenord
|
|
Address:
Strandveien 20
1366 Lysaker, Norway
|
Executed
and
delivered as a deed
by
Diana Ship Management Inc.
acting by: Semiramis Paliou
|
)
|
||
)
|
/s/ Semiramis Paliou
|
||
)
|
Director
|
In the presence of:
|
|
/s/ Margarita Veniou
|
|
Name: Margarita Veniou
|
|
Address:
Pendelis 16, 175 64 Palaio Faliro
Athens, Greece
|
Executed
and
delivered as a deed
by
Diana Wilhelmsen Management Inc.
acting by: Ioannis Zafirakis
|
)
|
||
)
|
/s/ Ioannis Zafirakis
|
||
)
|
Director
|
In the presence of:
|
|
/s/ Margarita Veniou | |
Name: Margarita Veniou
|
|
Address:
Pendelis 16, 17564 Palaio Faliro
Athens, Greece
|
(a) | change its name; |
(b) | make any alteration or addition to its Memorandum of Association or the Articles or other constitutional documents; |
(c) | approve any Annual Budget or Annual Business Plan, or make any substantial amendment to the Annual Budget and Annual Business Plan approved by the Shareholders; |
(d) | increase the Company's share capital, consolidate, sub-divide or alter any of the rights attached to any Shares or share capital of the Company, reduce the Company's share capital, capitalise any amount standing to the credit of any reserve of the Company or reorganise any of the share capital of the Company; |
(e) | issue or allot any Shares, debentures or other securities, or any option, warrant or other interest in respect thereof other than in accordance with clause 3.4; |
(f) | create any class of Shares other than the Ordinary Shares; |
(g) | approve or register the transfer of Shares to any person save pursuant to a transfer made in accordance with this Agreement; |
(h) | carry on any business other than that set out at clause 2 (Business of the Company); |
(i) | dispose of the whole or a major part of the business or close down any business operation other than a winding up of the Company in accordance with this Agreement; |
()) | sell, charge or otherwise dispose of or part with possession of, any capital asset having a market value at the relevant time of US$2,500; |
(k) | incorporate or acquire, whether by formation or otherwise, any subsidiary, or dispose of or dilute its interest in any of its subsidiaries for the time being other than in accordance with the Annual Business Plan; |
(I) | amalgamate or merge the Company or a subsidiary of the Company, or their respective businesses with any other company or business undertaking; |
(m) | enter into any joint venture, partnership, consortium agreement or similar arrangement or acquire any shares or other interest in any company, partnership or joint venture; |
(n) | enter into or undertake any contract or commitment (including any contract or commitment by way of loan, guarantee, advance, indemnity or any release of the same) either (i) outside the ordinary course of the business; or (ii) otherwise than on arm's length terms; |
(o) | enter into or agree to enter into any transaction with a value of US$2,500 or more other than in accordance with the Annual Budget and Annual Business Plan; |
(p) | enter into any transaction or arrangement of any nature whatsoever with any of its shareholders or directors or any person who is an Affiliate of a shareholder or director, whether or not any other person shall be party to such transaction or arrangement; |
(q) | incur any capital expenditure or series of capital expenditure (other than in accordance with the limits set forth in the Annual Budget); |
(r) | incur any indebtedness or engage in any financing arrangement of any kind (including those of a kind not required to be shown in the Company's audited accounts); |
(s) | issue any loan capital or enter into any commitment with respect to the issue of loan capital; |
(t) | create or permit to be created any mortgage, charge, pledge, lien, encumbrance or other security interest whatsoever on any asset of the Company or any of its subsidiaries other than in the ordinary course of business to secure financing contemplated by clause 4 (Finance) and any liens arising by operation of law; |
(u) | change either: |
(i) | its auditors; or |
(ii) | its accounting reference date; |
(v) | make or permit to be made any material change in the accounting policies and principles adopted by the Company in the preparation of its audited and/or management accounts; |
(w) | change the structure and size of the Board, including changing the maximum number of directors referred to in clause 13 (Management of the Company); |
(x) | institute, settle or compromise any legal proceedings (other than debt recovery proceedings in the ordinary course of business) involving the Company or a subsidiary or submit to arbitration any dispute involving the Company or a subsidiary; |
(y) | pay a dividend other than in accordance with clause 19 (Dividends); |
(z) | pass any resolution for its winding up (other than upon the insolvency of the Company); |
(aa) | list any Group Company or its shares or other interests on any exchange; |
(bb) | enter into or vary any contract of employment or any service contract with an officer or consultant which is not terminable by the relevant Group Company without payment of compensation (other than statutory compensation) within three months, or providing for the payment of remuneration (including pension and other benefits) in excess of a rate of US$15,000 per annum or increase the remuneration of any staff (including pension and other benefits) to a rate in excess of US$15,000; |
(cc) | lease or purchase any interest in any land or building or any fixed asset; |
(dd) | factor or assign any of its book debts; |
(ee) | establish or amend any profit sharing, share option, bonus or other incentive scheme of any nature for directors or employees, or grant any rights thereunder to any person; |
(ff) | dismiss any director, officer or employee in circumstances in which it incurs or agrees to bear redundancy or other costs in excess of US$7,000 in total; |
(gg) | appoint or remove a member of the senior management team or the Legal Representative or any replacement thereof; or |
(hh) | agree to do any of the foregoing. |
Clause
|
Page
|
|
1
|
Interpretation
|
3
|
2
|
Loan Facility and Designated Transactions
|
20
|
3
|
Position of the Lenders and the swap bank
|
20
|
4
|
Drawdown
|
21
|
5
|
Interest
|
22
|
6
|
Interest Periods
|
26
|
7
|
Default Interest
|
27
|
8
|
Repayment and Prepayment
|
28
|
9
|
Conditions Precedent
|
31
|
10
|
Representations and Warranties
|
32
|
11
|
Financial Covenants
|
35
|
12
|
General Undertakings
|
36
|
13
|
Corporate Undertakings
|
41
|
14
|
Insurance
|
42
|
15
|
Ship Covenants
|
48
|
16
|
Security cover
|
53
|
17
|
Payments and Calculations
|
55
|
18
|
Application of Receipts
|
57
|
19
|
Application of Earnings
|
58
|
20
|
Events of Default
|
59
|
21
|
Fees and Expenses
|
64
|
22
|
Indemnities
|
65
|
23
|
No Set-Off or Tax Deduction
|
67
|
24
|
illegality, etc.
|
70
|
25
|
Increased Costs
|
71
|
26
|
Set-Off
|
72
|
27
|
Transfers and Changes in Lending Offices
|
73
|
28
|
Variations and Waivers
|
78
|
29
|
Notices
|
79
|
30
|
Supplemental
|
82
|
31
|
Law and Jurisdiction
|
84
|
Schedule 1
|
Lenders and Commitments
|
86
|
Schedule 2
|
Guarantors
|
87
|
Schedule 3
|
Drawdown Notice
|
90
|
Schedule 4
|
Condition Precedent Documents
|
91
|
Schedule 5
|
Transfer Certificate
|
94
|
Schedule 6
|
Designation Notice
|
98
|
Schedule 7
|
Ships
|
99
|
Schedule 8
|
Form of Compliance Certificate
|
102
|
Execution Page
|
104
|
(1) | DIANA SHIPPINC INC., a corporation domesticated in the Marshall islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall islands MH96960 as Borrower ; |
(2) | THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1 ( Lenders and Commitments ), as Lenders ; |
(3) | BNP PARI BAS a banking corporation having its registered office at 16 Boulevard des Italiens, 75009, Paris, France acting through its office at 16, rue de Hanovre, 75002 Paris, France as Agent and Security Trustee ; |
(4) | BNP PARI BAS a banking corporation having its registered office at 16 Boulevard des Italiens, 75009, Paris, France acting through its office at 16, rue de Hanovre, 75002 Paris, France as Bookrunner ; and |
(5) | BNP PARIBAS as Swap Bank. |
(A) | The Lenders have agreed to make available to the Borrower a secured term loan facility in one advance for the purposes of refinancing the Existing Indebtedness in an amount equal to the lesser of (a) $165,000,000 and (b) 70 per cent. of the aggregate Initial Market Value of the Ships which shall be made available for the purpose of refinancing the Existing Indebtedness. |
(B) | The Borrower may from time to time hedge its 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 August 2015 (or such later date as the Agent may, with the authorisation of the Majority Lenders, agree with the Borrower); or |
(b) | if earlier, the date on which the Total Commitments are fully 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) | the amount of freely available and unencumbered credit balances on any deposit or current account (including, for the avoidance of doubt, any restricted cash); |
(b) | the market value of transferable certificates of deposit in a freely convertible currency acceptable to the Security Trustee issued by a prime international bank; and |
(c) | the market value of equity securities (if and to the extent that the Lenders satisfied that such equity securities are readily saleable for cash and that there is a ready market therefor) and investment grade debt securities which are publicly traded on a major stock exchange or investment market (valued at market value as at any applicable date of determination); |
(i) | the market value of any asset specified in paragraph (b) and (c) shall be the bid price quoted for it on the relevant calculation date by the Security Trustee; and |
(ii) | the amount or value of any asset denominated in a currency other than Dollars shall be converted into Dollars using the Lenders' spot rate for the purchase of Dollars with that currency on the relevant calculation date; |
(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 Borrower pursuant to the Master Agreement with the Swap Bank; and |
(b) | its purpose is the hedging of the Borrower's 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 the relevant Collateral Guarantor 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 a Collateral Guarantor 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 Collateral Guarantor 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 1471to 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 Collateral Guarantees; |
(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 |
(i) | any other document (whether creating a Security Interest or not) which is executed at any time by the Borrower, any Collateral 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 (
Lenders and Commitments
)
and acting through its branch or office indicated in Schedule 1 (
Lenders and Commitments
)
(or through another branch notified to the Borrower under Clause 27.14 (
Change of lending office
)
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 the Loan has been made, Lenders whose Commitments total 66.66 per cent. of the Total Commitments; and |
(b) | after the Loan has been made, Lenders whose Contributions total 66.66 per cent. of the Loan; |
(a) | from the Drawdown Date until the second anniversary of the Drawdown Date, 2.35 per cent. per annum; |
(b) | from the second anniversary of the Drawdown Date until the third anniversary of the Drawdown Date, 2.30 per cent. per annum; and |
(c) | from the third anniversary of the Drawdown Date until the end of the Security Period, 2.25 per cent. per annum; |
(a) | the financial condition, assets, prospects or business of the Borrower and/or any Collateral Guarantor or on the consolidated financial condition, assets, prospects or business of the Group; or |
(b) | the ability of the Borrower or any Collateral 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 Collateral Guarantor in good faith by appropriate steps) and subject, in the case of liens for repair or maintenance, to paragraph (g) of Clause 15.13 ( Restrictions on chartering, appointment of managers etc. ); |
(f) | any Security Interest created in favour of a plaintiff or defendant in any proceedings or arbitration as security for costs and expenses while the Borrower or a Collateral Guarantor 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) | 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 the Borrower, any Collateral Guarantor or any other Security Party under the Finance Documents have been paid; |
(b) | no amount is owing or has accrued (without yet having become due for payment) under any Finance Document; |
(c) | neither the Borrower nor any Collateral Guarantor nor any other Security Party has any future or contingent liability under Clauses 21 ( Fees and Expenses ) , 22 ( Indemnities ) or 23 (No Set-Off or Tax Deduction ) 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 1year without any right to an extension) unless it is within 1month redelivered to the full control of the Collateral Guarantor 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 Collateral Guarantor owning that Ship; |
(a) | in the case of an actual loss of that Ship, the date on which it occurred or, if that is unknown, the date when that Ship was last heard of; |
(b) | in the case of a constructive, compromised, agreed or arranged total loss of that Ship, the earliest of: |
(i) | the date on which a notice of abandonment is given to the insurers; |
(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 or the Collateral Guarantor (as the case may be) |
(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 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 prov1s1on 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 ( Definitions ) to 1.5 ( General Interpretation ) 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 Loan |
2.3 | Purpose of Loan |
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 the Borrower or a Security Party under or connected with a Finance Document; or |
(b) | any misrepresentation or breach of warranty by the 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) | the 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 Loan |
4.2 | Availability |
(a) | the Drawdown Date has to be a Business Day during the Availability Period; and |
(b) | the amount of the Loan shall not exceed an amount equal to the lesser of (i) $165,000,000 and (ii) 70 per cent. of the aggregate Initial Market Value of the Ships and shall be used in refinancing the Existing Indebtedness. |
4.3 | Notification to Lenders of receipt of the 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 Loan |
(a) | to the account which the Borrower specify in the Drawdown Notice; and |
(b) | in the like funds as the Agent received the payments from the Lenders. |
4.7 | Disbursement of Loan to third party |
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 1Business 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 (b) or (b) of Clause 5.7 ( Market disruption ) , the Lenders' obligations to make the Loan; and |
(b) | in a case falling within paragraph (c) of Clause 5.7 ( Market disruption ) , the Affected Lender's obligation to participate in the Loan, |
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 Borrower shall prepay (without premium or penalty) the Loan or, as the case may be, the Affected Lender's |
5.15 | Confidential Rates |
(a) | The Agent and the Borrower 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 Borrower pursuant to Clause 5.4 ( Notification of Interest Periods and rates of normal interest ); 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 Borrower 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 Borrower, 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 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 5.15 ( Confidential Rates ) relating to quotations provided by Reference Banks are without prejudice to its obligations to make notifications under Clause 5.4 ( Notification of Interest Periods and rates of normal interest ) 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 Borrower 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 Borrower undertakes not to use any Confidential Rate for any unlawful purpose. |
(f) | The Agent and the Borrower 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 5.15 ( Confidential Rates ) . |
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 Borrower to the Agent not later than 11.00 a.m. (Paris time) 5 Business Days before the commencement of the Interest Period; or |
(b) | 3 months, if the Borrower fails to notify the Agent by the time specified in paragraph (a); or |
(c) | such other period as the Agent may, with the authorisation of all the Lenders, agree with the Borrower. |
6.3 | Duration of Interest Periods for Repayment Instalments |
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 20.4 ( Acceleration of Loan ) , 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 ( Calculation of default rate of interest ); or |
(b) | in the case of any other overdue amount, the rate set out at paragraph (b)of Clause 7.3 ( Calculation of default rate of interest ) . |
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 applicable 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) | 20 consecutive quarterly instalments, the first 8 instalments in an amount of $2,500,000, followed by 4 instalments in an amount of $5,000,000 and 8 instalments in an amount of $7,000,000 (the " Repayment Instalments " and each a " Repayment Instalment "); and |
(b) | a balloon instalment of $69,000,000 (the " Balloon Instalment "), |
8.2 | Repayment Dates |
(a) | the fifth anniversary after the Drawdown Date; and |
(b) | 31 July 2020. |
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 Borrower 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 Borrower has provided evidence satisfactory to the Agent that any consent required by the Borrower, any Collateral Guarantor or any other 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 the Borrower, any Collateral Guarantor or any other Security Party has been complied with; |
(d) | the Borrower has complied with Clause 8.12 ( Unwinding of Designated Transactions ) on or prior to the date of prepayment; and |
(e) | the Borrower has 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. |
(i) | if the relevant Ship is more than 10 years old, an amount equal to 100 per cent. of the sale or Total Loss proceeds; and |
(ii) | if the relevant Ship is less than 10 years old an amount equal to the higher of: |
(A) | such part of the Loan as is equal to the ratio of the Market Value of the Ship lost or sold, as the case may be, to the aggregate sum of the Market Values of the Ships; and |
(B) | from the Drawdown Date until the first anniversary of the Drawdown Date, an amount which, after the application of the prepayment to be made pursuant to this Clause 8.8 ( Mandatory prepayment ) , results in the security cover ratio under Clause 16.1 ( Minimum required security cover ) being equal to 125 per cent. of the aggregate of the Loan and the Swap Exposure; and |
(C) | from the first anniversary of the Drawdown Date until the end of the Security Period, an amount which, after the application of the prepayment to be made pursuant to this Clause 8.8 ( Mandatory prepayment ) , results in the security cover ratio under Clause 16.1 ( Minimum required security cover ) being equal to 130 per cent. of the aggregate of the Loan and the Swap Exposure, and |
8.9 | Amounts payable on prepayment |
8.10 | Application of partial prepayment |
(a) | if made pursuant to Clause 8.4 ( Voluntary prepayment ) , pro rata against the then outstanding Repayment Instalments and the Balloon Instalment or as otherwise agreed between the Borrower and the Agent; |
(b) | if made pursuant to Clause 8.8 ( Mandatory prepayment ) : |
(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 the 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 4 ( Condition Precedent Documents ) in a form and substance satisfactory to the Agent and its lawyers; |
(ii) | the structuring fee, the annual agency fee and the annual account bank fee referred to in Clause 21 ( Fees and Expenses ); and |
(iii) | payment in full of any expenses payable pursuant to Clause 21 ( Fees and Expenses ) which are due and payable on the date of this Agreement; |
(b) | that, on the Drawdown Date but prior to the making of the Loan, the Lender receives or is satisfied that it will receive on the Drawdown Date the documents described in Part B of Schedule 4 ( Condition Precedent Documents ) in form and substance satisfactory to the Agent and its lawyers; |
(c) | the documents described in Part B of Schedule 4 ( Condition Precedent Documents ) in form and substance satisfactory to it and its lawyers; |
(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 ( General ) and those of the Borrower or any Collateral Guarantor or any other 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 ( Market disruption ) has occurred and is continuing; and |
(iv) | there has been no Material Adverse Effect since 31 December 2014; |
(e) | that, if the ratio set out in Clause 16.1 ( Minimum required security cover ) were applied immediately following the making of the Loan, the Borrower would not be obliged to provide additional security or prepay part of the Loan under that Clause; and |
(f) | that the Agent has received, and found to be acceptable to it, any further opm1ons, 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 Borrower prior to the Drawdown Date. |
9.2 | Waiver of conditions precedent |
10 | REPRESENTATIONS AND WARRANTIES |
10.1 | General |
10.2 | Status |
10.3 | Shares capital and ownership |
(a) | The Borrower is authorised to issue 200,000,000 registered shares of a par value of US$0.01 per share and 25 million registered preferred shares each with a par value of US$0.01, out of which (preferred shares) 1,000,000 are designated as series A preferred shares and 5,000,000 are designated as series B preferred shares |
(b) | Each Collateral Guarantor is authorised to issue the number of shares set out opposite its name in Schedule 2 all of which shares have been issued fully paid, and the legal title and beneficial ownership of all those shares is held, free of any Security Interest or other claim, by the Borrower. |
10.4 | Corporate power |
(a) | to execute the Finance Documents to which that Borrower is a party; and |
(b) | 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 Borrower is a party and the Master Agreement. |
10.5 | Consents in force |
10.6 | Legal validity ; effective Security Interests |
(a) | constitute the Borrower's legal, valid and binding obligations enforceable against the Borrower in accordance with their respective terms; and |
(b) | create legal, valid and binding Security Interests enforceable in accordance with their respective terms over all the assets to which they, by their terms, relate, |
10.7 | No third party Security Interests |
(a) | the Borrower will have the right to create all the Security Interests which any Finance Document to which it is a party 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 the Borrower; or |
(c) | any contractual or other obligation or restriction which is binding on the 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 bribery, corruption or money laundering |
10.16 | ISM Code, ISPS Code Compliance and Environmental Laws |
10.17 | No immunity |
10.18 | Sanctions |
(a) | None of the Borrower, the Approved Manager, or any of their subsidiaries their respective director and officer, or, to the knowledge of each Borrower, any affiliate, agent or employee of the Borrower, the Approved Manager or any of their respective subsidiaries is an |
(b) | 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. |
10.19 | Repetition |
(a) | on the date of service of the Drawdown Notice; |
(b) | on the Drawdown Date; and |
(c) | on the first day of each Interest Period (other than in the case of representations and warranties set out in Clause 10.12), |
11 | FINANCIAL COVENANTS |
11.1 | General |
11.2 | Financial Covenants |
(a) | the Market Value Adjusted Net Worth of the Borrower shall not be less than $300,000,000; |
(b) | the ratio of Consolidated Net Debt to Market Value Adjusted Total Assets less the aggregate amount of Cash and Cash Equivalents shall not exceed 65 per cent.; and |
(c) | the aggregate of all Cash and Cash Equivalents shall not be less than $500,000 per Fleet Vessel (including, for the avoidance of doubt, the Minimum Liquidity Amount required to be maintained pursuant to Clause 12.19 ( Borrower's Minimum Liquidity ) . |
11.3 | Compliance Check |
(a) | in the case of the compliance check as at 30 June in that financial year, the unaudited statements of the Group for the 6-month period ending on that date (commencing with the financial statements for the 6-month period which ending on 30 June 2015) delivered, in |
(b) | in the case of the compliance check as at 31 December in that financial year (commencing with the financial statements for the financial year which ends on 31 December 2014), the annual audited consolidated financial statements of the Group for that Financial Year delivered, in each case, to the Agent pursuant to paragraph (a) of Clause 12.6 ( Provision of financial statements ) . |
11.4 | Change in accounting expressions and policies |
12 | GENERAL UNDERTAKINGS |
12.1 | General |
12.2 | Title ; negative pledge |
(a) | The Borrower shall: |
(i) | not create or permit to arise any Security Interest (except for Permitted Security Interests) over any asset which is the subject of any of the Finance Documents; and |
(ii) | procure that its liabilities under this Agreement will rank pari passu with all its other present and future unsecured liabilities, except for liabilities which are mandatorily preferred by law. |
(b) | The Borrower shall procure that each Collateral Guarantor will: |
(i) | 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 |
(ii) | not create or permit to arise any Security Interest (except for Permitted Security Interests) over any other asset, present or future; and |
(iii) | 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. |
12.3 | 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, |
12.4 | No other liabilities or obligations to be incurred |
(a) | The Borrower will not incur any Financial Indebtedness to another member of the Group unless such Financial Indebtedness is fully subordinated to this Agreement and the 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 member of the Group against the 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 Majority Lenders). |
(b) | The Borrower shall procured that none of the Collateral Guarantors will incur any liability or obligation except: |
(i) | liabilities and obligations under the Finance Documents to which it is a party; |
(ii) | liabilities or obligations reasonably incurred in the ordinary course of owning, operating and chartering the Ship owned by it; and |
(iii) | Financial Indebtedness to the Borrower or any other member of the Group or any of their affiliates (the " Relevant Entity ") unless such Financial Indebtedness is fully subordinated to the Loan and the Swap Exposure and each Collateral Guarantor 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 Majority Lenders). |
12.5 | Information provided to be accurate |
12.6 | 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 Borrower (commencing with the financial year ending on 31 December 2014), the audited consolidated financial statements of the Borrower; |
(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 Borrower ending on 30 June (commencing with the half- year ending on 30 June 2015), the semi-annual unaudited consolidated financial statements of the Borrower 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 Borrower, the Collateral Guarantors, 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. |
12.7 | 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. |
12.8 | Shareholder and creditor notices |
12.9 | Consents |
(a) | for the Borrower or that Collateral Guarantor 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 the Borrower or that Collateral Guarantor to continue to own and operate the Ship owned by it, |
12.10 | 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. |
12.11 | Notification of litigation |
12.12 | Principal place of business |
12.13 | 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. |
12.14 | 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/ |
12.15 | Provision of further information |
(a) | to any Collateral Guarantor, any Ship, the Earnings, the Insurances, any Charterparty, the Approved Manager, any Fleet Vessel 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 the Borrower, any Collateral Guarantor and any other Security Party and their respective beneficial owners), |
12.16 | Provision of copies and translation of documents |
12.17 | " 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 Borrower, any Collateral Guarantor or any other 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, |
12.18 | Designated Transactions |
12.19 | Borrower's Minimum liquidity |
12.20 | Sanctions |
(a) | shall not, and shall procure that no Collateral Guarantor 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 or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person (i) involving or for the benefit of any Sanctioned Person or in any country or territory, that, at the time of such funding, is a Sanctioned Person or Sanctioned Country or (ii) in any other manner that would result in a violation of |
(b) | shall not permit or authorise and shall prevent (and shall procure that the Collateral Guarantors will not permit or authorise and will prevent) a Ship being used directly or indirectly (i) by or for the benefit of any Sanctioned Person or in any country or territory that is a Sanctioned Country and/or (ii) in any trade which will expose a Ship, any Creditor Party, the Approved Manager, crew or insurers to enforcement proceedings or any other consequences whatsoever arising from Sanctions; and |
(c) | shall, and shall procure that each Collateral Guarantor 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 Sanctioned Person or otherwise used in any manner which may breach any applicable Sanctions. |
13 | CORPORATE UNDERTAKINGS |
13.1 | General |
13.2 | Maintenance of status |
(a) | The Borrower shall maintain its separate corporate existence and remain in good standing under the laws of the Republic of the Marshall Islands. |
(b) | The Borrower shall procure that each Collateral Guarantor shall maintain its separate corporate existence and remain in good standing under the laws of its country of incorporation set out in Column C of Schedule 2 ( Guarantors ) . |
13.3 | Negative undertakings |
(a) | change the nature of its business (including but not limited to the ownership of the ship owning entities being engaged in chartering and operation of ships); |
(b) | allow any Collateral Guarantor to carry on any business other than the ownership, chartering and operation of the Ship owned by it; or |
(c) | 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 |
(d) | provide any form of credit or financial assistance to: |
(i) | a person who is directly or indirectly interested in the Borrower's share or loan capital; or |
(ii) | any company in or with which such a person is directly or indirectly interested or connected, |
(e) | allow any Collateral Guarantor to 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 |
(f) | allow any Collateral Guarantor to issue, allot or grant, any person a right to any of its shares or repurchase or reduce its issued shares; or |
(g) | allow any Collateral Guarantor to 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 |
(h) | enter into, and procure that not if its Subsidiaries will enter into, any form of amalgamation, merger or de-merger or any form of reconstruction or reorganisation. |
14 | INSURANCE |
14.1 | General |
14.2 | 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 Collateral Guarantor to insure and which are specified by the Security Trustee by notice to that Collateral Guarantor. |
14.3 | 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 Loan; |
(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. |
14.4 | Further protections for the Creditor Parties |
(a) | except in relation to risks referred to in paragraph (c) of Clause 14.2 ( Maintenance of obligatory insurances ) 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 Borrower, any Collateral Guarantor 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 Collateral Guarantor 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. |
14.5 | 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. |
14.6 | 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 14.4 ( Further protections for the Creditor Parties ); |
(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 Collateral Guarantor or its agents and, in the event of their receiving instructions to renew, they will promptly notify the Security Trustee of the terms of the instructions; and |
(e) | they will not set off against any sum recoverable in respect of a claim relating to the Ship owned by that Collateral Guarantor 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. |
14.7 | 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 Collateral Guarantor's protection and indemnity association, a certified copy of each United States of America voyage quarterly declaration (or other similar document or |
(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. |
14.8 | Deposit of original policies |
14.9 | Payment of premiums |
14.10 | Guarantees |
14.11 | Compliance with terms of insurances |
(a) | the Borrower shall procure that each Collateral Guarantor shall take all necessary action and comply with all requirements which may from time to time be applicable to the obligatory insurances, and (without limiting the obligation contained in paragraph (c) of Clause 14.6 ( Copies of policies ; letters of undertaking ) 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) | the Borrower shall procure that each Collateral Guarantor shall make any changes relating to the Approved Classification or Approved Classification Society or manager or operator of the Ship owned by it approved by the underwriters of the obligatory insurances; |
(c) | the Borrower shall procure that each Collateral Guarantor shall make (and promptly supply copies to the Agent of) all quarterly or other voyage declarations which may be required by the protection and indemnity risks association in which 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) | the Borrower shall procure that each Collateral Guarantor 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. |
14.12 | Alteration to terms of insurances |
14.13 | Settlement of claims |
14.14 | 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 Collateral Guarantor's obligations relating to the obligatory insurances including, without limitation, all requisite declarations and payments of additional premiums or calls; and |
(ii) | any credit arrangements made between that Collateral Guarantor and any of the persons referred to in paragraphs (a) or (b) relating wholly or partly to the effecting or maintenance of the obligatory insurances. |
14.15 | 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 14.6 (Copies of policies ; letters of undertaking ) or dealing with or considering any matters relating to any such insurances, |
14.16 | Restrictions on employment |
14.17 | 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 Collateral Guarantor 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 Collateral Guarantor owning that Ship, of any operator, charterer, manager or sub-manager of that Ship or of any officer, employee or agent of that Collateral Guarantor 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 Collateral Guarantor owning that Ship, any other person referred to in paragraph (i) above, or of any officer, employee or agent of that Collateral Guarantor or of such a person, including the casting away or damaging of that Ship and/or that Ship being unseaworthy; and/or |
(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, |
14.18 | Review of insurance requirements |
14.19 | Modification of insurance requirements |
14.20 | Compliance with mortgagee's instructions |
15 | SHIP COVENANTS |
15.1 | General |
15.2 | Ship's name and registration |
15.3 | Repair and classification |
(a) | consistent with first-class ship ownership and management practice; |
(b) | so as to maintain the highest class with an Approved Classification Society free of overdue recommendations and conditions of such Approved 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. |
15.4 | Classification society undertaking |
(a) | to send to the Security Trustee (with a copy to the Borrower), following receipt of a written request from the Security Trustee, certified true copies of all original class records held by the Approved Classification Society in relation to that Ship; |
(b) | to allow the Security Trustee (or its agents), not more than once per calendar year, to inspect the original class and related records of that Collateral Guarantor and that Ship |
(c) | to notify the Security Trustee immediately in writing if the Approved Classification Society: |
(i) | receives notification from that Collateral Guarantor or any person that that Ship's Approved 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 Collateral Guarantor's or that Ship's membership of the Approved Classification Society; and |
(d) | following receipt of a written request from the Security Trustee: |
(i) | to confirm that that Collateral Guarantor is not in default of any of its contractual obligations or liabilities to the Approved Classification Society and, without limiting the foregoing, that it has paid in full all fees or other charges due and payable to the Approved Classification Society; or |
(ii) | if that Collateral Guarantor is in default of any of its contractual obligations or liabilities to the Approved 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 Approved Classification Society. |
15.5 | Modification |
15.6 | Removal of parts |
15.7 | Surveys |
15.8 | Inspection |
15.9 | 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, |
15.10 | 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 Collateral Guarantor; |
(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 Collateral Guarantor has (at its expense) effected any special, additional or modified insurance cover which the Lenders may require. |
15.11 | 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, |
15.12 | 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 Approved 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 Collateral Guarantor 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 Collateral Guarantor, 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, |
15.13 | 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. |
15.14 | Notice of Mortgage |
15.15 | 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 Collateral Guarantors 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. |
15.16 | Charter Assignment |
15.17 | ISM Code, ISPS Code compliance and Environmental Laws |
(a) | procure that the Ship owned by that Collateral Guarantor and the company responsible for that Ship's compliance with the ISPS Code comply with the ISPS Code; and |
(b) | maintain for that Ship an ISSC; and |
(c) | notify the Agent immediately in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC. |
15.18 | ITF compliance. |
15.19 | Sanctions Provisions |
(a) | The Borrower 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) | The Borrower undertakes, and shall procure that each Collateral Guarantor undertakes, to make any charterers and operators of the Ships aware of the requirements of this Clause and of Clause 10.18 ( Sanctions ) and that provisions relating to Sanctions substantially 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. |
15.20 | Change of Approved Manager |
16 | SECURITY COVER |
16.1 | 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 16 ( Security cover ) , |
(i) | until the date falling on the first anniversary of the Drawdown Date, below 125 per cent. of the aggregate of the Loan and the Swap Exposure; and |
(ii) | from the date falling on the first anniversary of the Drawdown Date and for the remainder of the Security Period, below 130 per cent. of the aggregate of the Loan and the Swap Exposure. |
16.2 | Provision of additional security ; prepayment |
16.3 | Requirement for additional documents. |
16.4 | Valuation of Ships |
(a) | as at a date not more than [2] months 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. |
16.5 | Value of additional vessel security |
16.6 | Valuations binding |
16.7 | Provision of information |
16.8 | Payment of valuation expenses |
16.9 | Frequency of valuations |
16.10 | Application of prepayment |
17 | PAYMENTS AND CALCULATIONS |
17.1 | Currency and method of payments |
(a) | by the Lenders to the Agent; or |
(b) | by the Borrower 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 Borrower 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 Borrower and the other Creditor Parties. |
17.2 | 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, |
17.3 | Basis for calculation of periodic payments |
17.4 | 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 |
(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. |
17.5 | Permitted deductions by Agent |
17.6 | Agent only obliged to pay when monies received |
17.7 | 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. |
17.8 | Agent may assume receipt |
17.9 | Creditor Party accounts |
17.10 | Agent's memorandum account |
17.11 | Accounts prima facie evidence |
18 | APPLICATION OF RECEIPTS |
18.1 | 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 Borrower under Clauses 21 ( Fees and Expenses ) , 22 ( Indemnities ) and 23 (No Set-Off or Tax Deduction ) of this Agreement or by the Borrower 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 Borrower 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 18 ( Application of Receipts )); 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 Borrower, the Security Parties and the other Creditor Parties, states in its opinion will or may become due and payable in the future and, upon those amounts becoming due and payable, in or towards satisfaction of them in accordance with the foregoing provisions of this paragraph of paragraph (a) of Clause 18.1( Normal order of application ); |
(c) | THIRDLY: in or towards satisfaction of any amounts representing management fees then due and payable by the Borrower or the Collateral Guarantors to the Approved Manager in connection with the Ships; and |
(d) | FOURTHLY: any surplus shall be paid to the Borrower or to any other person appearing to be entitled to it. |
18.2 | Variation of order of application |
18.3 | Notice of variation of order of application |
18.4 | Appropriation rights overridden |
19 | APPLICATION OF EARNINGS |
19.1 | 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 Borrower under each Designated Transaction are paid to the Liquidity Reserve Account. |
19.2 | Earnings Accounts balances |
19.3 | Location of accounts |
(a) | comply, or procure that each Collateral Guarantor complies, with any requirement of the Agent as to the location or re-location of the Earnings Accounts (or any of them) or the Liquidity Reserve Account; and |
(b) | execute, or procure that each Collateral Guarantor executes, any documents which the Agent specifies to create or maintain in favour of the Security Trustee a Security Interest over (and/or rights of set-off, consolidation or other rights in relation to) the Earnings Accounts or the Liquidity Reserve Account. |
19.4 | Debits for expenses etc. |
19.5 | Borrower obligations unaffected |
(a) | the liability of the Borrower to make payments of principal and interest on the due dates; or |
(b) | any other liability or obligation of the Borrower or any Security Party under any Finance Document. |
20 | EVENTS OF DEFAULT |
20.1 | Events of Default |
(a) | the 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 ( Waiver of conditions precedent ) , 10.18 ( Sanctions ) , 12.2 ( Title ; negative pledge ) , 12.3 (No disposal of assets ) , 12.19 ( Borrower's Minimum liquidity ) , 12.20 ( Sanctions ) , 13.2 ( Maintenance of status ) , 13.3 ( Negative undertakings ) , 14.2 ( Maintenance of obligatory insurances ) , 14.3 ( Terms of obligatory insurances ) , 15.2 ( Ship's name and registration ) , 15.3 ( Repair and classification ) , 15.11 ( Provision of information ) or 16.2 ( Provision of additional security ; prepayment ); or |
(c) | any breach by the Borrower or any Security Party occurs of any provision of a Finance Document (other than a breach covered by paragraphs (a) or (b)) which, in the 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 Borrower becoming aware of such breach; or |
(d) | (subject to any applicable grace period specified in the Finance Document) any breach by the Borrower or any Security Party occurs of any provision of a Finance Document (other than a breach falling within paragraphs (a), (b) or (c)); or |
(e) | any 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 the 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 Collateral Guarantor and in no event exceeding $15,000,000 (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 Collateral Owner and in no event exceeding $15,000,000 (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 Borrower or a Collateral 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 |
(ix) | a Relevant Person or its directors take any steps (whether by making or presenting an application or petition to a court, or submitting or presenting a document setting out a proposal or proposed terms, or otherwise) with a view to obtaining, in relation to that or another Relevant Person, any form of moratorium, suspension or deferral of payments, reorganisation of debt (or certain debt) or arrangement with all or a substantial proportion (by number or value) of creditors or of any class of them or any such moratorium, suspension or deferral of payments, reorganisation or arrangement is effected by court order, by the filing of documents with a court, by means of a contract or in any other way at all; or |
(x) | any meeting of the members or directors, or of any committee of the board or senior management, of a Relevant Person is held or summoned for the purpose of considering a resolution or proposal to authorise or take any action of a type described in paragraphs (iv) to (ix) or a step preparatory to such action, or (with or without such a meeting) the members, directors or such a committee resolve or agree that such an action or step should be taken or should be taken if certain conditions materialise or fail to materialise; or |
(xi) | in a country other than England, any event occurs, any proceedings are opened or commenced or any step is taken which, in the opinion of the Majority Lenders is similar to any of the foregoing; or |
(h) | the Borrower or any Collateral Guarantor 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 the Borrower or any Security Party to discharge any liability under a Finance Document or to comply with any other obligation which the Majority Lenders consider material under a Finance Document; or |
(ii) | for the Agent, the Security Trustee, 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 Collateral Guarantor to own, operate or charter the Ship owned by it or to enable any Collateral Guarantor 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) | 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 |
(l) | Mr. Simeon Palios ceases to own (either directly or indirectly) at least 5 per cent. of the share capital of the Borrower; or |
(m) | the Borrower ceases to own (either directly or indirectly) the entire share capital of any Collateral Guarantor; |
(n) | without the prior written consent of the Agent (acting with the authorisation of all Lenders) the shares of the Borrower 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, |
20.2 | 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 Borrower a notice stating that all or part of the Commitments and of the other obligations of each Lender to the Borrower under this Agreement are terminated; and/or |
(ii) | serve on the Borrower 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 |
(b) | 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. |
20.3 | Termination of Commitments |
20.4 | Acceleration of Loan |
20.5 | Multiple notices ; action without notice |
20.6 | Notification of Creditor Parties and Security Parties |
20.7 | Creditor Party's rights unimpaired |
20.8 | 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, |
20.9 | Relevant Persons |
20.10 | Interpretation |
21 | FEES AND EXPENSES |
21.1 | Structuring, agency, account bank fees |
(a) | on the date of this Agreement, a non-refundable structuring fee in the amount set out in the Fee Letter; |
(b) | on the date of this Agreement and on each anniversary thereof during the Security Period, an annual agency fee of an amount agreed in writing between the Agent and the Borrower prior to the date of this Agreement, such agency fee to be payable to the Agent in advance for its own account; and |
(c) | on the date of this Agreement and on each anniversary thereof during the Security Period, an annual account bank fee in an amount to be agreed in writing between the Agent and the Borrower prior to the date of this Agreement, such account bank fee to be payable to the Agent in advance for the account of the Account Bank. |
21.2 | Costs of negotiation, preparation etc. |
21.3 | 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 16 ( Security cover ) 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 any of the Ships, the review of the insurances of that Ship pursuant to Clause 14.18 ( Review of insurance requirements ); |
(e) | the opinions of the independent insurance consultant referred to in paragraph 6 of Part B, Schedule 4 ( Condition Precedent Documents ); 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. |
21.4 | Documentary taxes |
21.5 | Certification of amounts |
22 | INDEMNITIES |
22.1 | 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 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 Borrower to make payment of any amount due under a Finance Document on the due date or, if so payable, on demand (after giving credit for any default interest paid by the Borrower on the amount concerned under Clause 7 ( Default Interest )); 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 20 ( Events of Default ) , |
22.2 | 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. |
22.3 | 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, |
22.4 | Extension of indemnities ; environmental indemnity |
(a) | any matter which would be covered by Clause 22.3 ( Miscellaneous indemnities ) 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. |
22.5 | Currency indemnity |
(a) | making or lodging any claim or proof against of the Borrower or any Security Party, whether in its liquidation, any arrangement involving it or otherwise; or |
(b) | obtaining an order or judgment from any court or other tribunal; or |
(c) | enforcing any such order or judgment, |
22.6 | Certification of amounts |
22.7 | Application of Master Agreement |
22.8 | Sums deemed due to a Lender |
22.9 | 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 result of conduct of any Security Party or any of their subsidiaries, affiliates, partners, directors, officers, employees, agents, representatives or advisors, that violates any Sanctions. |
(b) | The indemnity in paragraph (a) of this Clause 22.9 ( Sanctions ) 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. |
23 | NO SET-OFF OR TAX DEDUCTION |
23.1 | 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 the Borrower is required by law to make. |
23.2 | Grossing-up for taxes |
(a) | the Borrower shall notify the Agent as soon as it becomes aware of the requirement; |
(b) | the Borrower shall pay the tax deducted to the appropriate taxation authority promptly, and in any event before any fine or penalty arises; |
(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. |
23.3 | Evidence of payment of taxes |
23.4 | Exclusion of tax on overall net income |
23.5 | Application of Master Agreement |
23.6 | 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 |
(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 the 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 the 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) | The 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 |
23.7 | 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 Borrower and the Agent and the Agent shall notify the other Creditor Parties. |
24 | ILLEGALITY, ETC |
24.1 | 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, |
24.2 | Notification of illegality |
24.3 | Prepayment ; termination of Commitment |
24.4 | 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. |
25 | INCREASED COSTS |
25.1 | 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. |
25.2 | 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, |
25.3 | Notification to Borrower of claim for increased costs |
25.4 | Payment of increased costs |
25.5 | Notice of prepayment |
25.6 | 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 Borrower shall prepay (without premium or penalty) the Notifying Lender's Contribution, together with accrued interest thereon at the applicable rate plus the Margin. |
25.7 | Application of prepayment |
26 | SET-OFF |
26.1 | 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 the Borrower at any office in any country of that Creditor Party in or towards satisfaction of any sum then due from the Borrower to that Creditor Party under any of the Finance Documents; and |
(b) | for that purpose: |
(i) | break, or alter the maturity of, all or any part of a deposit of the Borrower; |
(ii) | convert or translate all or any part of a deposit or other credit balance into Dollars; and |
(iii) | enter into any other transaction or make any entry with regard to the credit balance which the Creditor Party concerned considers appropriate. |
26.2 | Existing rights unaffected |
26.3 | Sums deemed due to a Lender |
26.4 | No Security Interest |
27 | TRANSFERS AND CHANGES IN LENDING OFFICES |
27.1 | Transfer by Borrower |
(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. |
27.2 | 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 Borrower: |
(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 Borrower (such consent not to be unreasonably withheld or delayed) and the Borrower 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 Borrower within that time. |
27.3 | Transfer Certificate, delivery and notification |
(a) | sign the Transfer Certificate on behalf of itself, the Borrower, 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 the 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, but the Agent shall only be obliged to execute a Transfer Certificate delivered to it by the Transferor Lender and the Transferee Lender once it is satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to the transfer to that Transferee Lender. |
27.4 | Effective Date of Transfer Certificate |
27.5 | No transfer without Transfer Certificate |
27.6 | Lender re-organisation ; waiver of Transfer Certificate |
27.7 | 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 the Borrower or any Security Party had against the Transferor Lender; |
(b) | the Transferor Lender's Commitment is discharged to the extent specified in the Transfer Certificate; |
(c) | the Transferee Lender becomes a Lender with the Contribution previously held by the Transferor Lender and a Commitment of an amount specified in the Transfer Certificate; |
(d) | the Transferee Lender becomes bound by all the provisions of the Finance Documents which are applicable to the Lenders generally, including those about pro-rata sharing and the exclusion of liability on the part of, and the indemnification of, the Agent and the Security Trustee and, to the extent that the Transferee Lender becomes bound by those provisions (other than those relating to exclusion of liability), the Transferor Lender ceases to be bound by them; |
(e) | any part of the Loan which the Transferee Lender advances after the Transfer Certificate's effective date ranks in point of priority and security in the same way as it would have ranked had it been advanced by the transferor, assuming that any defects in the transferor's title and any rights or equities of the Borrower or any Security Party against the Transferor Lender had not existed; |
(f) | the Transferee Lender becomes entitled to all the rights under the Finance Documents which are applicable to the Lenders generally, including but not limited to those relating to the Majority Lenders and those under Clause 5.7 ( Market disruption ) and Clause 21 ( Fees and Expenses ) , 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. |
27.8 | Maintenance of register of Lenders |
27.9 | Reliance on register of Lenders |
27.10 | Authorisation of Agent to sign Transfer Certificates |
27.11 | Registration fee |
27.12 | Sub-participation ; subrogation assignment |
27.13 | Disclosure of information |
27.14 | 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. |
27.15 | Notification |
27.16 | Replacement of Reference Bank |
27.17 | 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 the Borrower or any Security Party or grant to any person any more extensive rights than those required to be made or granted to the relevant Lender under the Finance Documents. |
27.18 | 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 Borrower would be obliged to make a payment to the Transferee Lender or Lender acting through its new lending office under Clauses 23 (No Set-Off or Tax Deduction ) or 2S ( Increased Costs ) , 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. |
27.19 | Assignments, transfers and novations by the Swap Bank |
(a) | Notwithstanding the relevant sections of the Master Agreement, the Swap Bank may, with the consent of the Majority Lenders and the Borrower, such consents not to be unreasonably withheld or delayed [but without requiring the consent of the Agent], assign any of its rights or transfer by novation any of its rights and obligations under the Master Agreement to which it is a party to another bank or financial institution or to a trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, derivatives, securities or other financial assets (the " New Swap Bank ") . |
(b) | Any costs associated with any transfer, assignment or novation under this Clause 27.19 ( Assignments, transfers and novations by the Swap Bank ) shall be for the New Swap Bank's account. |
(c) | Any assignment, transfer or novation under this Clause 27.19 ( Assignments, transfers and novations by the Swap Bank ) will only be effective on: |
(i) | any amendments as may be necessary to the Mortgages or any of the other Finance Documents; |
(ii) | receipt by the Agent of written confirmation from the New Swap Bank (in form and substance satisfactory to the Agent) that the New Swap Bank is bound by this Agreement as regards the rights and obligations of the Swap Bank hereunder; |
(iii) | performance by the Agent of all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to such assignment, transfer or novation to the New Swap Bank, the completion of which the Agent shall promptly notify to the existing Swap Bank and the New Swap Bank; and |
(iv) | receipt by the Agent of the New Swap Bank's consent to the Master Agreement Assignment and a new notice of assignment pursuant to the Master Assignment signed by the Borrower and acknowledgement thereof from the New Swap Bank. |
(d) | The Borrower shall co-operate in providing the notice of assignment referred to in sub paragraph (iii) of paragraph (c) above. |
28 | VARIATIONS AND WAIVERS |
28.1 | Variations, waivers etc. by Majority Lenders |
28.2 | 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 ( Position of the Lenders and the swap bank ) or this Clause 28 ( Variations and Waivers ); |
(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. |
28.3 | 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 the Borrower or a Security Party of an obligation under a Finance Document or the general law; or |
(d) | any right or remedy conferred by any Finance Document or by the general law, |
29 | NOTICES |
29.1 | General |
29.2 | Addresses for communications |
(a)
to the Borrower:
|
c/o Approved Manager
|
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16 Pendelis Street
|
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175 64 Paleo Faliro
|
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|
Athens
|
|
|
Greece
|
|
|
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Attn: Chief Financial Officer
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Fax No: +30 210 9470101
|
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(b)
to a Lender:
|
At the address below its name in Schedule 1
(
Lenders and
|
Commitments
)
or (as the case may require) in the relevant
Transfer Certificate. |
(c)
to the Agent,
|
BNP Paribas
|
|
Security Trustee, Bookrunner:
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16, rue de Hanovre
|
|
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75002 Paris Cedex 02
|
|
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France
|
|
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Fax: +33 (0) 142984317
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|
|
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E-mail: pierre.masse@bnpparibas.com
|
|
|
fabienne.delorme@bnpparibas.com
|
|
(d)
to the Swap Bank:
|
BNP Paribas
|
|
|
3 rue Taitbout
|
|
|
75009 Paris France
|
|
|
|
|
|
Fax: +33 140140114 /
5577 7511
|
|
|
|
|
|
Attn: Legal and Transaction Management Group- ISDA
|
|
with copy to:
|
BNP Paribas, London Branch
|
|
|
10 Harewood Avenue
|
|
|
NW1 6AA London
|
|
|
England
|
|
|
|
|
|
Fax: +44 207 595 5059
|
|
|
Attn: Legal and Transaction Management Group- ISDA
|
|
29.3 | 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. |
29.4 | 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, |
29.5 | Illegible notices |
29.6 | 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. |
29.7 | 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. |
29.8 | Effectiveness of electronic communication |
29.9 | 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 communicationby 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. |
29.10 | English language |
29.11 | Meaning of "notice" |
29.12 | Application of Master Agreement |
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 Borrower 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 Borrower; 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 |
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 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" |
|
|
Commitment
|
Lender
|
Lending Office
|
(
US Dollars
)
|
|
|
|
BNP PARIBAS
|
16, rue de Hanovre
|
$165,000,000
|
|
75002 Paris
|
|
|
France
|
|
|
|
|
|
Fax: +33 (O) 142984355
|
|
|
|
|
|
e-mail:
tgmo.shipping@bnpparibas.com
|
A
|
B
|
C
|
D
|
E
|
G
|
SHIP
|
SHIP-OWNING COMPANY
|
COUNTRY OF INCORPORATION
|
IMO REGISTERED OWNER NUMBER
|
REGISTERED OFFICE ADDRESS
|
SHARES
|
OCEANIS
|
Panama Campania Armadora SA
|
Panama
|
4064563
|
Aquilino de la Guardia Street No.8, IGRA Building, Panama, Republic of Panama
|
500 registered shares of no par value
|
ALCYON
|
Buenos Aires Campania Armadora SA
|
Panama
|
4064515
|
Capital Plaza Building, 8th Floor, Ave. Roberto Motta, Costa del Este, Panama, Republic of Panama
|
100 registered shares of $100 par value each
|
NIREFS
|
Skyvan Shipping Company SA
|
Panama
|
4061281
|
Edificio Torre Universal, Ave. Federico Boyd, Calle 51, Piso No. 11, 12 (Penthouse), Panama, Republic of Panama
|
100 registered shares of $100 par value each
|
TRITON
|
Husky Trading SA
|
Panama
|
4064550
|
Capital Plaza Building, 8th Floor, Ave. Roberto Motta, Costa del Este, Panama, Republic of Panama
|
100 registered shares of $100 par value each
|
DIONE
|
Chorrera Campania Armadora SA
|
Panama
|
5028515
|
Tower Financial Center, 16th floor, 50th Street and Elvira Mendez, Panama, Republic of Panama
|
100 registered shares of $100 par value each
|
DANAE
|
Eaton Marine
SA
|
Panama
|
5043110
|
Beatriz M. de Cabal Street, Proconsa Building II, 8
th
Floor, Panama, Republic of Panama
|
100 registered shares of $100 par value each
|
NORFOLK
|
Silver Chandra Shipping
|
Cyprus
|
5335277
|
284, Arch. Makarios Ill Avenue,
|
1,000 registered shares of €1 par
|
|
Company Limited
|
|
|
FORTUNA COURT, BLOCK B, 2nd Floor, 3105, Limassol, Cyprus
|
value each
|
PROTEFS
|
Cypres Enterprises Corp.
|
Panama
|
4093975
|
PH Torre Panama, 15 Floor, Boulevard Costa del Este and Avenida la Rotonda, Costa del Este, Panama City, Republic of Panama
|
100 registered shares of $100 par value each
|
THETIS
|
Changame Campania Armadora SA
|
Panama
|
4064546
|
55
th
Street, El Cangrejo, No. 225, Panama, Republic of Panama
|
100 registered shares of $100 par value each
|
ERATO
|
Urbina Bay Trading SA
|
Panama
|
4094559
|
Capital Plaza Building, 8th Floor, Ave. Roberto Motta, Costa del Este, Panama, Republic of Panama
|
100 registered shares of $100 par value each
|
CALIPSO
|
Darien Campania Armadora SA
|
Panama
|
4094562
|
Tower Financial Center, 16th floor, 50th Street and Elvira Mendez, Panama, Republic of Panama
|
100 registered shares of $100 par value each
|
CLIO
|
Texford Maritime SA
|
Panama
|
4094576
|
Beatriz M. de Cabal Street, Proconsa Building II, 8th Floor, Panama, Republic of Panama
|
100 registered shares of $100 par value each
|
SALT LAKE CITY
|
Marfort Navigation Company Limtied
|
Cyprus
|
5334265
|
284, Arch. Makarios Ill Avenue, FORTUNA COURT, BLOCK B, 2nd Floor, 3105, Limassol, Cyprus
|
1,000 registered shares of €1 par value each
|
NAIAS
|
Ailuk Shipping Company Inc.
|
Marshall Islands
|
5248110
|
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
|
500 registered shares with a par value of $0.01 each
|
SIDERIS GS
|
Jaluit Shipping Company Inc.
|
Marshall Islands
|
5267352
|
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
|
500 registered shares with a par value of $0.01 each
|
SEMIRIO
|
Kili Shipping Company Inc.
|
Marshall Islands
|
5296509
|
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
|
500 registered shares with a par value of $0.01 each
|
BOSTON
|
Lib Shipping Company Inc.
|
Marshall Islands
|
5305865
|
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
|
500 registered shares with a par value of $0.01 each
|
ALCMENE
|
Majuro Shipping Company Inc.
|
Marshall Islands
|
5566463
|
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
|
500 registered shares with a par value of $0.01 each
|
1 | We refer to the loan agreement (the " Loan Agreement ") dated [ · ] 2015 and made between ourselves, as Borrower, the Lenders referred to therein, the Swap Bank and BNP Paribas as Agent, Security Trustee and Bookrunner in connection with a facility of up to US$165,000,000. Terms defined in the Loan Agreement have their defined meanings when used in this Drawdown Notice. |
2 | We request to borrow the Loan as follows: |
(a) | Amount: US$ [ · ]; |
(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 ( Representations and Warranties ) of the Loan Agreement would remain true and not misleading if repeated on the date of this notice with reference to the circumstances now existing; and |
(b) | no Event of Default or Potential Event of Default has occurred or will result from the borrowing of the Loan. |
4 | This notice cannot be revoked without the prior consent of the Majority Lenders. |
1 | A duly executed original of each Finance Document (and of each document required to be delivered by each Finance Document) other than those referred to in Part B. |
2 | Copies of the certificate of incorporation and constitutional documents of the Borrower, each Collateral Guarantor or any other Security Party. |
3 | Copies of resolutions of the shareholders and directors of each Collateral Guarantor, of the executive committee of the directors of the Borrower, or the shareholders and directors of any other Security Party authorising the execution of each of the Finance Documents to which the Borrower, a Collateral Guarantor or any other Security Party is a party and, in the case of the Borrower, authorising named officers to give the Drawdown Notice and other notices under this Agreement. |
4 | The original of any power of attorney under which any Finance Document is executed on behalf of the Borrower, a Collateral Guarantor or any other Security Party. |
5 | Copies of all consents which the Borrower, a Collateral Guarantor 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 and the Liquidity Reserve Account (including but not limited to two certified forms of identification in respect of each signatory of each Earnings Account and the Liquidity Reserve Account and of two directors of the Borrower and each Collateral 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 the Borrower, each Collateral Guarantor and any other Security Party (whether in connection with the opening of the Earnings Account or the Liquidity Reserve Account or otherwise). |
7 | Documentary evidence that the agent for service of process named in Clause 31 ( Law and Jurisdiction ) has accepted its appointment. |
8 | Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of the Marshall Islands, English, Switzerland, Bahamas, Greece and Cyprus 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 each Ship (and of each document to be delivered by each of them). |
2 | Documentary evidence that: |
(a) | each Ship is definitively and permanently registered in the name of the relevant Collateral Guarantor under the laws of an Approved Flag State; |
(b) | each Ship is in the absolute and unencumbered ownership of the relevant Collateral Guarantor save as contemplated by the Finance Documents; |
(c) | each Ship maintains the Approved Classification with the Approved Classification Society free of all overdue recommendations and conditions of such Approved Classification Society; |
(d) | the Mortgage relating to each Ship has been duly registered against that 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) | each Ship is insured in accordance with the prov1s1ons 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 that Ship. |
3 | Documents establishing that the each Ship will, as from the 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 each 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 each Ship certified as true and in effect by the Borrower and the Approved Manager; and |
(c) | a copy of the International Ship Security Certificate in respect of each Ship certified as true and in effect by the Collateral Guarantor owning that Ship and the Approved Manager. |
4 | A valuation of each Ship (at the expense of the Borrower) 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 prepared in accordance with Clause 16 (Security cover) which shows the value of the Ships 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, English, Switzerland, Marshall Islands, Bahamas, Greece and Cyprus 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 each Ship as the Agent may require (all fees and expenses incurred in relation to the appointment of the marine insurance broker for the purpose of issuing such opinion shall be for the account of the Borrower. |
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 [ · ] 2015 and made between (1) Diana Shipping Inc. (the " Borrower "), (2) the banks and financial institutions named therein as Lenders, (3) BNP Paribas as Swap Bank, (4) BNP Paribas as Agent, (5) BNP Paribas as Security Trustee and (6) BNP Paribas as Bookrunner for a loan facility of up to US$165,000,000. |
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 [ · ] per cent. of its Contribution, outstanding to the Transferor (or its predecessors in title) which is set out below: |
|
Contribution
|
Amount transferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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) | the Borrower or any Security Party fails to observe or perform its obligations, or to discharge its liabilities, under any of the Finance Documents; |
(iii) | it proves impossible to realise any asset covered by a Security Interest created by a Finance Document, or the proceeds of such assets are insufficient to discharge the liabilities of the Borrower or Security Party under the Finance Documents; |
(c) | agrees that it will have no rights of recourse on any ground against the Agent, the Security Trustee 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
|
|
|
|
|
|
|
|
Signed for itself and for and on behalf of itself as Agent and for every other Relevant Party BNP PARIBAS
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
|
|
|
Date:
|
|
|
To: |
BNP Paribas
16, rue de Hanovre 75002 Paris France as Agent |
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. |
A
|
B
|
C
|
D
|
E
|
F
|
G
|
H
|
I
|
SHIP
|
SHIP-OWNING COMPANY
|
FLAG
|
YEAR
BUILT |
TYPE and CAPACITY (DWT)
|
TYPE
|
IMO NUMBER
|
Approved Classification Society
|
Approved Classification
|
OCEANIS
|
Panama Campania Armadora SA
|
Bahamas
|
2001
|
75,211
|
Panamax
|
9225055
|
DNV GL
|
100 AS, ESP IW RSD DBC, Bulk Carrier, Strengthened for Heavy Cargo (holds 2,4 & 6 may be empty)
|
ALCYON
|
Buenos Aires Campania Armadora SA
|
Bahamas
|
2001
|
75,247
|
Panamax
|
9225029
|
DNV GL
|
100 AS, ESP IW RSD DBC, Bulk Carrier, Strengthened for Heavy Cargo (holds 2,4 & 6 may be empty)
|
NIREFS
|
Skyvan Shipping Company SA
|
Bahamas
|
2001
|
75,311
|
Panamax
|
9215933
|
Lloyd's Register
|
100 A1, Bulk Carrier, Strengthened for Heavy Cargoes, Hold Nos: 2,4 & 6 may be empty, Ship Right (SDA, FDA, CM), ESP, ESN, *IWS, LI, Descriptive Note: Ship Right SCM pt Higher Tensile Steel
|
TRITON
|
Husky Trading SA
|
Bahamas
|
2001
|
75,336
|
Panamax
|
9225043
|
DNV GL
|
100 AS, ESP IW RSD DBC, Bulk Carrier, Strengthened for Heavy Cargo, Holds 2,4 & 6 may be empty
|
DIONE
|
Chorrera Campania Armadora SA
|
Greece
|
2001
|
75,172
|
Panamax
|
9213363
|
Lloyd's Register
|
100 A1, Bulk Carrier, Strengthened for Heavy Cargoes Hold Nos 2,4 and 6 may be empty). ESP, ShipRight (SDA, FDA, CM), ESN, *ISW, LI
|
DANAE
|
Eaton Marine SA
|
Greece
|
2001
|
75,106
|
Panamax
|
9212125
|
Germanischer Lloyd
|
100 AS, ESP IW RSD DBC C1D11, Bulk Carrier,
|
Strengthened for Heavy Cargo (holds 2,4 & 6 may be empty)
|
||||||||
NORFOLK
|
Silver Chandra Shipping Company Limited
|
Cyprus
|
2002
|
164,218
|
Capesize
|
9225809
|
BUREAU VERITAS
|
Bulk Carrier ESP Heavy Cargo Nonhomload (any hold may be empty), Unrestricted navigation
|
PROTEFS
|
Cypres Enterprises Corp.
|
Bahamas
|
2004
|
73,630
|
Panamax
|
9286633
|
DNV GL
|
100 AS, ESP IW RSD DBC DG, Bulk Carrier, Strengthened for Heavy Cargo (holds 2,4 & 6 may be empty)
|
THETIS
|
Changame Campania Armadora SA
|
Bahamas
|
2004
|
73,583
|
Panamax
|
9283992
|
BUREAU VERITAS
|
Bulk Carrier ESP, Unrestricted navigation
|
ERATO
|
Urbina Bay Trading SA
|
Bahamas
|
2004
|
74,444
|
Panamax
|
9283631
|
BUREAU VERITAS
|
Bulk Carrier ESP Heavy Cargo; Nonhomload, Unrestricted navigation
|
CALIPSO
|
Darien Campania Armadora SA
|
Bahamas
|
2005
|
73,691
|
Panamax
|
9297929
|
DNV GL
|
100 AS, Bulk Carrier ESP RSD IW DBC Strengthened for Heavy Cargo (holds 2,4 & 6 may be empty)
|
CLIO
|
Texford Maritime SA
|
Bahamas
|
2005
|
73,691
|
Panamax
|
9297931
|
BUREAU VERITAS
|
Bulk Carrier ESP Heavy Cargo Nonhomload (holds 2,4 & 6 may be empty), Unrestricted navigation
|
SALT LAKE CITY
|
Marfort Navigation Company Limtied
|
Cyprus
|
2005
|
171,810
|
Capesize
|
9314129
|
BUREAU VERITAS
|
Bulk Carrier BC-A (Holds 2-4- 6-8 may be empty) ESP, Unrestricted navigation
|
NAIAS
|
Ailuk Shipping Company Inc.
|
Marshall Islands
|
2006
|
73,546
|
Panamax
|
9330800
|
BUREAU VERITAS
|
Bulk Carrier ESP-Nonhomload, Holds 2-4-6 may be empty), Unrestricted navigation
|
SIDERIS GS
|
Jaluit Shipping Company Inc.
|
Marshall Islands
|
2006
|
174,186
|
Capesize
|
9406881
|
BUREAU VERITAS
|
Bulk Carrier ESP, Unrestricted navigation
|
SEMIRIO
|
Kili Shipping Company Inc.
|
Marshall Islands
|
2007
|
174,261
|
Capesize
|
9406893
|
BUREAU VERITAS
|
Bulk Carrier ESP, Unrestricted navigation
|
BOSTON
|
Lib Shipping Company Inc.
|
Marshall Islands
|
2007
|
117,828
|
Capesize
|
9445966
|
BUREAU
|
Bulk Carrier BC-A (Holds 2, 4,
|
To: |
BNP Paribas
16, rue de Hanovre 75002 Paris France |
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Chief Financial Officer
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DIANA SHIPPING INC.
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BORROWER
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SIGNED
by
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)
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/s/ Andreas N. Michalopoulos
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ANDREAS NIKOLAOS MICHALOPOULOS
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)
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for and on behalf of
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)
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DIANA SHIPPING INC.
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)
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in the presence of:
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)
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NADINE AKLEH
SOLICITOR
WATSON FARLEY & WILLIAMS
348 SYNGROU AVENUE
176 74 KALLITHEA
ATHENS - GREECE
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LENDERS
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SIGNED
by
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)
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/s/ Vassiliki Georgopoulos
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VASSILIKI GEORGOPOULOS
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)
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for and on behalf of
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)
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BNP PARIBAS
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)
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in the presence of:
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)
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NADINE AKLEH
SOLICITOR
WATSON FARLEY & WILLIAMS
348 SYNGROU AVENUE
176 74 KALLITHEA
ATHENS - GREECE
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AGENT
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SIGNED
by
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)
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/s/ Vassiliki Georgopoulos
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VASSILIKI GEORGOPOULOS
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)
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for and on behalf of
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)
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BNP PARIBAS
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)
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in the presence of:
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)
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NADINE AKLEH
SOLICITOR
WATSON FARLEY & WILLIAMS
348 SYNGROU AVENUE
176 74 KALLITHEA
ATHENS - GREECE
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BOOKRUNNER
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SIGNED
by
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)
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/s/ Vassiliki Georgopoulos
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VASSILIKI GEORGOPOULOS
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)
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for and on behalf of
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)
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BNP PARIBAS
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)
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in the presence of:
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)
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NADINE AKLEH
SOLICITOR
WATSON FARLEY & WILLIAMS
348 SYNGROU AVENUE
176 74 KALLITHEA
ATHENS - GREECE
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SECURITY TRUSTEE
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SIGNED
by
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)
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/s/ Vassiliki Georgopoulos
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VASSILIKI GEORGOPOULOS
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)
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for and on behalf of
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)
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BNP PARIBAS
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)
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in the presence of:
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)
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NADINE AKLEH
SOLICITOR
WATSON FARLEY & WILLIAMS
348 SYNGROU AVENUE
176 74 KALLITHEA
ATHENS - GREECE
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SWAP BANK
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SIGNED
by
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)
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/s/ Vassiliki Georgopoulos
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VASSILIKI GEORGOPOULOS
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)
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for and on behalf of
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)
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BNP PARIBAS
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)
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in the presence of:
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)
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NADINE AKLEH
SOLICITOR
WATSON FARLEY & WILLIAMS
348 SYNGROU AVENUE
176 74 KALLITHEA
ATHENS - GREECE
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Clause
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Page
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1
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Definitions and interpretation
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1
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2
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The Facility
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24
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3
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Purpose
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26
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4
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Conditions of Utilisation
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26
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5
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Utilisation
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28
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6
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Repayment
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30
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7
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Illegality, prepayment and cancellation
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32
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8
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Interest
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36
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9
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Interest Periods
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36
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10
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Changes to the calculation of interest
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37
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11
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Fees
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38
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12
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Tax gross-up and indemnities
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39
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13
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Increased Costs
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43
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14
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Other indemnities
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44
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15
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Mitigation by the Lenders
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47
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16
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Costs and expenses
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48
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17
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Guarantee and indemnity
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49
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18
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Representations
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52
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19
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Information undertakings
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59
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20
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Financial covenants
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62
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21
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General undertakings
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63
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22
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Dealings with Ships
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67
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23
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Condition and operation of Ships
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70
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24
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Insurance
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73
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25
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Minimum security value
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77
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26
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Chartering undertakings
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79
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27
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Bank accounts
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80
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28
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Business restrictions
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81
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29
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Hedging Contracts
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84
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Clause
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Page
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30
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Events of Default
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85
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31
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Position of Hedging Provider
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90
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32
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Changes to the Lenders
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91
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33
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Changes to the Obligors/Restriction on Debt Purchase Transactions
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95
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34
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Roles of Agent, Security Agent and Arranger
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96
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35
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Conduct of business by the Finance Parties
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115
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36
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Sharing among the Finance Parties
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116
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37
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Payment mechanics
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118
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38
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Set-off
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120
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39
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Notices
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121
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40
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Calculations and certificates
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122
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41
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Partial invalidity
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123
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42
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Remedies and waivers
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123
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43
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Amendments and grant of waivers
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123
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44
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Counterparts
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125
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45
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Confidentiality
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126
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46
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Governing law
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129
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47
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Enforcement
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129
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Schedule 1 The original parties
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130
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Schedule 2 Ship information
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134
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Schedule 3 Conditions precedent
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135
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Schedule 4 Utilisation Request
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141
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Schedule 5 Selection Notice
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142
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Schedule 6 Form of Transfer Certificate
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143
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Schedule 7 Form of Compliance Certificate
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145
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Schedule 8 Forms of Notifiable Debt Purchase Transaction Notice
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146
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(1) | THE ENTITIES listed in Schedule 1 (The original parties) as borrowers (the Borrowers ) ; |
(2) | DIANA SHIPPING INC. as guarantor (the Guarantor ) ; |
(3) | ING BANK N.V., LONDON BRANCH, as arranger (the Arranger ) ; |
(4) | THE FINANCIAL INSTITUTIONS listed in Schedule 1 (The original parties) as lenders (the Original Lenders ) ; |
(5) | ING BANK N.V., as hedging provider (the Hedging Provider ) ; |
(6) | ING BANK N.V., LONDON BRANCH, as agent for the other Finance Parties (the Agent ) ; and |
(7) | ING BANK N.V., LONDON BRANCH, as security agent for the other Finance Parties (the Security Agent ) . |
1 | Definitions and interpretation |
1.1 | Definitions |
(a) | in relation to Ship A, it means Advance A; or |
(b) | in relation to Ship B, it means Advance B, |
(a) | any law or regulation implementing the Basel II Accord (including the relevant provisions of CRD IV and CRR) to the extent only that such law or regulation re-enacts and/or implements the requirements of the Basel II Accord but excluding any provision of such law or regulation implementing the Basel III Accord; and |
(b) | any Basel II Approach adopted by a Finance Party or any of its Affiliates. |
(a) | the agreements on capital requirements, a 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; |
(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 III". |
(a) | the interest which a Lender should have received for the period from the date of receipt of all or any part of its participation in the Loan or Unpaid Sum to the last day of the current Interest Period in respect of the Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period; exceeds: |
(b) | the amount which that Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank in the Interbank Market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period. |
(a) | a Borrower ceases to be a direct or indirect wholly-owned Subsidiary of the Guarantor; or |
(b) | the Permitted Holders cease to own legally and beneficially, either directly or indirectly, at least 5% of each of (i) the issued and outstanding share capital and (ii) the issued and outstanding voting share capital, of the Guarantor; or |
(c) | any person or persons acting in concert (other than the Permitted Holders) own legally and beneficially, either directly or indirectly, more shares and/or more voting shares in the Guarantor, than the Permitted Holders. |
(a) | in relation to an Original Lender, the amount set opposite its name under the heading "Commitment" in Schedule 1 (The original parties) and the amount of any other Commitment transferred to it under this Agreement; and |
(b) | in relation to any other Lender, the amount of any Commitment transferred to it under this Agreement, |
(i) | not cancelled, reduced or transferred by it under this Agreement; and |
(ii) | not deemed to be zero pursuant to clauses 33.2.2 to 33.2.5 (Disenfranchisement on Debt Purchase Transactions entered into by Guarantor Affiliates). |
(a) | any member of the Group or any of its advisers; or |
(b) | another Finance Party, if the information was obtained by that Finance Party directly or indirectly from any member of the Group or any of its advisers, |
(i) | is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of clause 45 (Confidentiality); or |
(ii) | is identified in writing at the time of delivery as non-confidential by any member of the Group or any of its advisers; or |
(iii) | is known by that Finance Party before the date the information is disclosed to it in accordance with paragraphs (a) or (b) above or is lawfully obtained by that Finance Party after that date, from a source which is, as far as that Finance Party is aware, unconnected with the Group and which, in either case, as far as that Finance Party is |
(a) | purchases by way of assignment or transfer; |
(b) | enters into any sub-participation in respect of; or |
(c) | enters into any other agreement or arrangement having an economic effect substantially similar to a sub-participation in respect of, any Commitment or amount outstanding under this Agreement. |
(a) | which has failed to make its participation in an Advance available or has notified the Agent that it will not make its participation in an Advance available by the Utilisation Date of that Advance in accordance with clause 5.4 (Lenders' participation); |
(b) | which has otherwise rescinded or repudiated a Finance Document; or |
(c) | with respect to which an Insolvency Event has occurred and is continuing, |
(i) | its failure to pay is caused by: |
(A) | administrative or technical error; or |
(B) | a Payment Disruption Event; and, payment is made within 3 Business Days of its due date; or |
(ii) | the Lender is disputing in good faith whether it is contractually obliged to make the payment in question. |
(a) | that is, or is owned or controlled by a person or entity that is listed on the "Specially Designated National and Blocked Persons" List maintained by OFAC, and the list of persons sanctioned by the United States Department of State, as published in the Federal Register, or any similar list maintained by any other Sanctions Authority; |
(b) | located in or organized under the laws of, or the government of any jurisdiction targeted by Sanctions after the date hereof, or a person that is otherwise the target of Sanctions; |
(c) | to the best of Obligors' knowledge and belief, acting or purporting to act on behalf of any of the persons listed in paragraphs (a) and (b) above; or |
(d) | with which any relevant Finance Party is prohibited from dealing with or otherwise engaging in any transaction pursuant to any Sanctions. |
(e) | a Total Loss of a Mortgaged Ship, the applicable Total Loss Repayment Date; or |
(f) | a sale of a Mortgaged Ship (including a reversal of sale by the relevant Owner returning the relevant Ship to the relevant Seller under any relevant provisions of the relevant Contract, if applicable) by the relevant Owner, the date upon which such sale is completed by the transfer of title to the purchaser in exchange for payment of all or part of the relevant purchase price. |
(a) | enforcement, clean-up, removal or other governmental or regulatory action or orders or claims instituted or made pursuant to any Environmental Laws or resulting from a Spill; or |
(b) | any claim made by any other person relating to a Spill. |
(a) | any Ship or its owner, operator or manager may be liable for Environmental Claims arising from the Spill (other than Environmental Claims arising and fully satisfied before the date of this Agreement); and/or |
(b) | any Ship may be arrested or attached in connection with any such Environmental Claim. |
(a) | in respect of a Lender, the office or offices notified by a Lender to the Agent in writing on or before the date it becomes a Lender (or, following that date, by not less than five Business Days' written notice) as the office through which it will perform its obligations under this Agreement; and |
(b) | in respect of any other Finance Party, the office in the jurisdiction in which it is resident for Tax purposes. |
(a) | sections 1471 to 1474 of the Code or any associated regulations; |
(b) | any treaty, law or a 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) | in relation to a "withholdable payment" described in section 1473(1)(A)(i) of the Code (which relates to payments of interest and certain other payments from sources within the US), 1 July 2014; |
(b) | in relation to a "withholdable payment" described in section 1473(1)(A)(ii) of the Code (which relates to "gross proceeds" from the disposition of property of a type that can produce interest from sources within the US), 1 January 2017; or |
(c) | in relation to a "passthru payment" described in section 1471(d)(7) of the Code not falling within paragraphs (a) or (b) above, 1 January 2017, |
(a) | moneys borrowed and debit balances at banks or other financial institutions; |
(a) | any acceptance under any acceptance credit or bill discounting facility (or dematerialised equivalent); |
(b) | any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument; |
(c) | the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with GAAP, be treated as a finance or capital lease; |
(d) | receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis); |
(e) | any Treasury Transaction (and, when calculating the value of that Treasury Transaction, only the marked to market value (or, if any actual amount is due as a result of the termination or close-out of that Treasury Transaction, that amount) shall be taken into account); |
(f) | any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; |
(g) | any amount raised by the issue of redeemable shares which are redeemable (other than at the option of the issuer) before the last Final Repayment Date or are otherwise classified as borrowings under GAAP; |
(h) | any amount of any liability under an advance or deferred purchase agreement if (a) one of the primary reasons behind entering into the agreement is to raise finance or to finance the acquisition or construction of the asset or service in question or (b) the agreement is in respect of the supply of assets or services and payment is due more than 180 days after the date of supply; |
(i) | any amount raised under any other transaction (including any forward sale or purchase, sale and sale back or sale and leaseback agreement) having the commercial effect of a borrowing or otherwise classified as borrowings under GAAP; and |
(j) | the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (i) above. |
(a) | in relation to all Hedging Contracts that have been closed out on or prior to the relevant date, that is due and owing by the Borrowers to the Hedging Provider in respect of such Hedging Contracts on the relevant date; and |
(b) | in relation to all Hedging Contracts that are continuing on the relevant date, that would be payable by the Borrowers to the Hedging Provider under (and calculated in accordance with) the early termination provisions of the Hedging Contracts as if an Early Termination Date (as |
(a) | each Finance Party and each Receiver and any attorney, agent or other person appointed by them under the Finance Documents; |
(b) | each Affiliate of those persons; and |
(c) | any officers, directors, employees, advisers, representatives or agents of any of the above persons. |
(a) | is dissolved (other than pursuant to a consolidation, amalgamation or merger); |
(b) | admits in writing its inability generally to pay its debts as they become due; |
(c) | makes a general assignment, arrangement or composition with or for the benefit of its creditors; |
(d) | institutes or has instituted against it, by a regulator, supervisor or any similar official with primary insolvency, rehabilitative or regulatory jurisdiction over it in the jurisdiction of its incorporation or organisation or the jurisdiction of its head or home office, a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors' rights, or a petition is presented for its winding-up or liquidation by it or such regulator, supervisor or similar official; |
(e) | has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors' rights, or a petition is presented for its winding-up or liquidation, and, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition is instituted or presented by a person or entity not described in paragraph (d) above and: |
(i) | results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up or liquidation; or |
(ii) | is not dismissed, discharged, stayed or restrained in each case within 30 days of the institution or presentation thereof; |
(f) | has exercised in respect of it one or more of the stabilisation powers pursuant to Part 1 of the Banking Act 2009 and/or has instituted against it a bank insolvency proceeding pursuant to Part 2 of the Banking Act 2009 or a bank administration proceeding pursuant to Part 3 of the Banking Act 2009; |
(g) | has a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger); |
(h) | seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets; |
(i) | has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within 30 days thereafter; |
(j) | causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in paragraphs (a) to (i) above; or |
(k) | takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts. |
(a) | all policies and contracts of insurance; and |
(b) | all entries in a protection and indemnity or war risks or other mutual insurance association |
(a) | the applicable Screen Rate for the longest period (for which that Screen Rate is available) which is less than the relevant Interest Period for the Loan (or the relevant part of it) or the relevant Unpaid Sum; and |
(b) | the applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds the relevant Interest Period for the Loan (or the relevant part of it) or the relevant Unpaid Sum, |
(a) | the principle that equitable remedies may be granted or refused at the discretion of a court and the limitation of enforcement by laws relating to insolvency, reorganisation and other laws generally affecting the rights of creditors; |
(b) | the time barring of claims under the Limitation Acts, the possibility that an undertaking to assume liability for, or indemnify a person against, non-payment of UK stamp duty may be void and defences of set-off or counterclaim; and |
(c) | similar principles, rights and defences under the laws of any Relevant Jurisdiction. |
(a) | any Original Lender; and |
(b) | any bank, financial institution, trust, fund or other entity which has become a Party in accordance with clause 32 (Changes to the Lenders), which in each case has not ceased to be a Party in accordance with the terms of this Agreement. LIBOR means, in relation to the Loan or any part of it or any Unpaid Sum: |
(a) | the applicable Screen Rate; or |
(b) | if no Screen Rate is available for the relevant Interest Period, the Interpolated Screen Rate for the Loan (or the relevant part of it) or that Unpaid Sum; or |
(c) | if: |
(i) | no Screen Rate is available for the relevant currency; or |
(ii) | no Screen Rate is available for the relevant Interest Period and it is not possible to calculate an Interpolated Screen Rate for the Loan (or the relevant part of it) or that Unpaid Sum, the Reference Bank Rate, as of 11:00 a.m. on the Quotation Day for the offering of deposits in dollars for a period comparable to the Interest Period for the Loan or relevant part of it or Unpaid Sum and if that rate is less than zero, LIBOR shall be deemed to be zero. |
(a) | if no part of the Loan is then outstanding, a Lender or Lenders whose Commitments aggregate more than 66.67% of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated more than 66.67% of the Total Commitments immediately prior to the reduction); or |
(b) | at any other time, a Lender or Lenders whose participations in the Loan aggregate more than 66.67% of the Loan. |
(a) | the business, operations, property, performance, prospects or condition (financial or otherwise) of any Obligor or of the Group taken as a whole; or |
(b) | the ability of an Obligor to perform its obligations under any of the Finance Documents; or |
(c) | the legality, validity or enforceability of, or the effectiveness or ranking of any Security Interest granted or purporting to be granted pursuant to any of, the Finance Documents or the rights or remedies of any Finance Party under any of the Finance Documents. |
(a) | the Borrowers or the Agent have requested the Lenders to consent to a departure from, or waiver of, any provision of the Finance Documents or to agree to any amendment thereto; |
(b) | the waiver, consent or amendment in question requires the agreement of all the Lenders; |
(c) | a period of not less than 30 days has elapsed from the date the waiver, consent or amendment was requested; |
(d) | the Majority Lenders have agreed to such waiver, consent or amendment; and |
(e) | the Borrowers have notified such Lender that they will treat it as a Non-Consenting Lender. |
(a) | the Mortgages over each of the Ships; |
(b) | the Deeds of Covenant in relation to each of the Ships in respect of which the Mortgage is in account current form; |
(c) | the General Assignments in relation to each of the Ships in respect of which the Mortgage is not in account current form; |
(d) | the Charter Assignment in relation to each Ship's Charter Documents; |
(e) | the Account Security in relation to each Account; |
(f) | the Share Security in relation to each Borrower; |
(g) | the Hedging Contract Security; and |
(h) | any Manager's Undertaking in relation to each Ship. |
(a) | a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Facility (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties; or |
(b) | the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party preventing that, or any other Party: |
(i) | from performing its payment obligations under the Finance Documents; or |
(ii) | from communicating with other Parties in accordance with the terms of the Finance Documents, |
(a) | the individual disclosed in writing by the Obligors to the Arranger and the Original Lenders on or before the date of this Agreement as being the ultimate beneficial owner of no less than 5% of each of (i) the issued and outstanding share capital and (ii) the issued and outstanding voting share capital, of each of the Guarantor; |
(b) | his direct lineal descendants; |
(c) | the personal estate of any of the above persons; and |
(d) | any trust created for the benefit of one or more of the above persons and their respective estates. |
(a) | unless a Default is continuing, any ship repairer's or outfitter's possessory lien in respect of such Ship for an amount not exceeding the Major Casualty Amount for such Ship; |
(b) | any lien on such Ship for master's, officer's or crew's wages outstanding in the ordinary course of its trading; |
(c) | any lien on such Ship for salvage; |
(d) | liens arising by operation of law for not more than 2 months' prepaid hire under any charter commitment in relation to a Ship not prohibited by this Agreement; |
(e) | liens for master's disbursements incurred in the ordinary course of trading; |
(f) | any other lien arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of a Ship and which has arisen for payments which are not more than 2 months overdue; |
(g) | any Security Interest created in favour of a plaintiff or defendant in any proceedings or arbitration as security for costs and expenses while an Obligor 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 each case, in respect of which appropriate reserves have been made. |
(a) | granted by the Finance Documents; or |
(b) | a Permitted Maritime Lien; or |
(c) | is approved by the Majority Lenders. |
(a) | its Original Jurisdiction of incorporation; |
(b) | any jurisdiction where any Charged Property or other material assets owned by it are situated; |
(c) | any jurisdiction where it conducts its business; and |
(d) | any jurisdiction in which a Security Interest created by that Obligor must or should be registered in order to ensure its validity or priority. |
(a) | the First Repayment Date for that Advance; |
(b) | each of the dates falling at 3 monthly intervals thereafter up to but not including the Final Repayment Date for that Advance; and |
(c) | the Final Repayment Date for that Advance, being the due dates of the repayment instalments for that Advance referred to in clause 6.2 (Scheduled repayment of the Advances). |
(a) | the Original Security Documents; |
(b) | any other document as may be executed to guarantee and/or secure any amounts owing to the Finance Parties under this Agreement or any other Finance Document. |
(a) | the Vessel Values of all of the Mortgaged Ships which have not then become a Total Loss and |
(b) | the value of any additional security then held by the Security Agent or any other Finance Party provided under clause 25 (Minimum security value), in each case as most recently determined in accordance with this Agreement. |
(a) | in relation to Advance A, it means Ship A; or |
(b) | in relation to Advance B, it means Ship B, and Ship means any of them. |
(a) | directly or indirectly controlled by such person; or |
(b) | of whose dividends or distributions on ordinary voting share capital such person is entitled to receive more than 50%. |
(a) | actual, constructive, compromised or arranged total loss; or |
(b) | requisition for title, confiscation or other compulsory acquisition by a government entity; or |
(c) | hijacking, piracy, theft, condemnation, capture, seizure, arrest or detention for more than 30 days. |
(a) | in the case of an actual total loss, the date it happened or, if such date is not known, the date on which the vessel was last reported; |
(b) | in the case of a constructive, compromised, agreed or arranged total loss, the earliest of: |
(i) | the date notice of abandonment of the vessel is given to its insurers; or |
(ii) | if the insurers do not admit such a claim, the date later determined by a competent court of law to have been the date on which the total loss happened; or |
(iii) | the date upon which a binding agreement as to such compromised or arranged total loss has been entered into by the vessel's insurers; |
(c) | in the case of a requisition for title, confiscation or compulsory acquisition, the date it happened; and |
(d) | in the case of hijacking, piracy, theft, condemnation, capture, seizure, arrest or detention, the date 30 days after the date upon which it happened. |
(a) | the date 120 days after its Total Loss Date; and |
(b) | the date upon which insurance proceeds or Requisition Compensation for such Total Loss are paid by insurers or the relevant government entity. |
(a) | the proposed Transfer Date specified in the Transfer Certificate; and |
(b) | the date on which the Agent executes the Transfer Certificate. |
(a) | all moneys duly received by the Security Agent under or in respect of the Finance Documents; |
(b) | any portion of the balance on any Account held by or charged to the Security Agent at any time; |
(c) | the Security Interests, guarantees, security, powers and rights given to the Security Agent under and pursuant to the Finance Documents including, without limitation, the covenants given to the Security Agent in respect of all obligations of any Obligor; |
(d) | all assets paid or transferred to or vested in the Security Agent or its agent or received or recovered by the Security Agent or its agent in connection with any of the Finance Documents whether from any Obligor or any other person; and |
(e) | all or any part of any rights, benefits, interests and other assets at any time representing or deriving from any of the above, including all income and other sums at any time received or receivable by the Security Agent or its agent in respect of the same (or any part thereof). |
(a) | a Borrower if it is resident for tax purposes in the United States of America; or |
(b) | an Obligor some or all of whose payments under the Finance Documents are from sources within the United States for US federal income tax purposes. |
(a) | any tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112); and |
(b) | any other tax of a similar nature, whether imposed in a member state of the European Union in substitution for, or levied in addition to, such tax referred to in paragraph (a) above, or imposed elsewhere. |
1.2 | Construction |
1.2.1 | Unless a contrary indication appears, any reference in any of the Finance Documents to: |
(a) | Sections, clauses and Schedules are to be construed as references to the Sections and clauses of, and the Schedules to, the relevant Finance Document and references to a Finance Document include its Schedules; |
(b) | a Finance Document or any other agreement or instrument is a reference to that Finance Document or other agreement or instrument as it may from time to time be amended, restated, novated or replaced, however fundamentally; |
(c) | words importing the plural shall include the singular and vice versa; |
(d) | a time of day is to London time; |
(e) | any person includes its successors in title, permitted assignees or transferees; |
(f) | the knowledge, awareness and/or beliefs (and similar expressions) of any Obligor shall be construed so as to mean the knowledge, awareness and beliefs of the director and officers of such Obligor, having made due and careful enquiry; |
(g) | two or more persons are acting in concert if pursuant to an agreement or understanding (whether formal or informal) they actively co-operate, through the acquisition (directly or indirectly) of shares in an entity by any of them, either directly or indirectly to obtain or consolidate control of that entity; |
(h) | agreed form means: |
(i) | where a Finance Document has already been executed by all of the relevant parties, such Finance Document in its executed form; |
(ii) | prior to the execution of a Finance Document, the form of such Finance Document separately agreed in writing between the Agent (acting on the instructions of all the Lenders) and the Borrowers, whether before or after the date of this Agreement, as the form in which that Finance Document is to be executed or another form approved at the request of the Borrowers or, if not so agreed or approved, in the form reasonably required by the Agent; |
(i) | approved by the Majority Lenders or approved by the Lenders means approved in writing by the Agent acting on the instructions of the Majority Lenders or, as the case may be, all of the Lenders (on such conditions as they may respectively impose) and otherwise |
(j) | assets includes present and future properties, revenues and rights of every description; |
(k) | an authorisation means any authorisation, consent, concession, approval, resolution, licence, exemption, filing, notarisation or registration; |
(I) | charter commitment means, in relation to a vessel, any charter or contract for the use, employment or operation of that vessel or the carriage of people and/or cargo or the provision of services by or from it and includes any agreement for pooling or sharing income derived from any such charter or contract; |
(m) | control of an entity means: |
(i) | the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to: |
A) | cast, or control the casting of, more than 50% of the maximum number of votes that might be cast at a general meeting of that entity; or |
B) | appoint or remove all, or the majority, of the directors or other equivalent officers of that entity; or |
C) | give directions with respect to the operating and financial policies of that entity with which the directors or other equivalent officers of that entity are obliged to comply; and/or |
(ii) | the holding beneficially of more than 50% of the issued share capital of that entity (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital) (and, for this purpose, any Security Interest over share capital shall be disregarded in determining the beneficial ownership of such share capital); |
(n) | the term disposal or dispose means a sale, transfer or other disposal (including by way of lease or loan but not including by way of loan of money) by a person of all or part of its assets, whether by one transaction or a series of transactions and whether at the same time or over a period of time, but not the creation of a Security Interest; |
(o) | dollar, $ and USD means the lawful currency of the United States of America; |
(p) | the equivalent of an amount specified in a particular currency (the specified currency amount ) shall be construed as a reference to the amount of the other relevant currency which can be purchased with the specified currency amount in the London foreign exchange market at or about 11 am. on the date the calculation falls to be made for spot delivery, as conclusively determined by the Agent (with the relevant exchange rate of any such purchase being the Agent's spot rate of exchange ) ; |
(q) | a government entity means any government, state or agency of a state; |
(r) | a group of Lenders includes all the Lenders; |
(s) | a guarantee means any guarantee, letter of credit, bond, indemnity or similar assurance against loss, or any obligation, direct or indirect, actual or contingent, to purchase or assume any indebtedness of any person or to make an investment in or loan to any person or to purchase assets of any person where, in each case, such obligation is assumed in order to maintain or assist the ability of such person to meet its indebtedness; |
(t) | indebtedness includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent; |
(u) | month means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month or the calendar month in which it is to end, except that: |
(i) | if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that month (if there is one) or on the immediately preceding Business Day (if there is not); and |
(ii) | if there is no numerically corresponding day in that month, that period shall end on the last Business Day in that month, |
(v) | an obligation means any duty, obligation or liability of any kind; |
(w) | something being in the ordinary course of business of a person means something that is in the ordinary course of that person's current day-to-day operational business (and not merely anything which that person is entitled to do under its Constitutional Documents); |
(x) | pay, prepay or repay in clause 28 (Business restrictions) includes by way of set-off, combination of accounts or otherwise; |
(y) | a person includes any individual, firm, company, corporation, government entity or any association, trust, joint venture, consortium or partnership (whether or not having separate legal personality); |
(z) | a regulation includes any regulation, rule, official directive, request or guideline (whether or not having the force of law) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation and includes (without limitation) any Basel II Regulation or Basel Ill Regulation; |
(aa) | right means any right, privilege, power or remedy, any proprietary interest in any asset and any other interest or remedy of any kind, whether actual or contingent, present or future, arising under contract or law, or in equity; |
(bb) | trustee, fiduciary and fiduciary duty has in each case the meaning given to such term under applicable law; |
(cc) | (i) the liquidation, winding up, dissolution, or administration of person or (ii) a receiver or administrative receiver or administrator in the context of insolvency proceedings or security enforcement actions in respect of a person shall be construed so as to include any equivalent or analogous proceedings or any equivalent and analogous person or appointee (respectively) under the law of the jurisdiction in which such person is established or incorporated or any jurisdiction in which such person carries on business including (in respect of proceedings) the seeking or occurrences of liquidation, winding-up, reorganisation, dissolution, administration, arrangement, adjustment, protection or relief of debtors; |
(dd) | an entity is a wholly-owned subsidiary of another entity if it has no shareholders or members except that other entity and that other entity's wholly-owned Subsidiaries or persons acting on behalf of that other entity or its wholly-owned Subsidiaries; |
(ee) | a provision of law is a reference to that provision as amended or re-enacted; and |
(ff) | a law includes any order or decree, any form of delegated legislation, any treaty or international convention and any regulation or resolution of the United States of America, |
1.2.2 | Where in this Agreement a provision includes a monetary reference level in one currency, unless a contrary indication appears, such reference level is intended to apply equally to its equivalent in other currencies as of the relevant time for the purposes of applying such reference level to any other currencies. |
1.2.3 | Section, clause and Schedule headings are for ease of reference only. |
1.2.4 | Unless a contrary indication appears, a term used in any other Finance Document or in any notice given under or in connection with any Finance Document has the same meaning in that Finance Document or notice as in this Agreement. |
1.2.5 | A 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 or remedied to the satisfaction of the Agent acting on the instructions of the Lenders. |
1.2.6 | Unless a contrary indication appears, in the event of any inconsistency between the terms of this Agreement and the terms of any other Finance Document when dealing with the same or similar subject matter, the terms of this Agreement shall prevail. |
1.3 | Third party rights |
1.3.1 | Unless expressly provided to the contrary in a Finance Document for the benefit of a Finance Party or another Indemnified Person, a person who is not a party to a Finance Document has no right under the Contracts (Rights of Third Parties) Act 1999 (the Third Parties Act ) to enforce or to enjoy the benefit of any term of the relevant Finance Document. |
1.3.2 | Any Finance Document may be rescinded or varied by the parties to it without the consent of any person who is not a party to it (unless otherwise provided by this Agreement). |
1.3.3 | An Indemnified Person who is not a party to a Finance Document may only enforce its rights under that Finance Document through a Finance Party and if and to the extent and in such manner as the Finance Party may determine. |
1.4 | Finance Documents |
1.5 | Conflict of documents |
2 | The Facility |
2.1 | The Facility |
2.1.1 | Subject to the terms of this Agreement the Lenders make available to the Borrowers a term loan facility in an aggregate amount equal to the Total Commitments. |
2.2 | Finance Parties' rights and obligations |
2.2.1 | The obligations of each Finance Party under the Finance Documents are several. Failure by a Finance Party to perform its obligations under the Finance Documents does not affect the obligations of any other Party under the Finance Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents. |
2.2.2 | The rights of each Finance Party under or in connection with the Finance Documents are separate and independent rights and any debt arising under the Finance Documents to a Finance Party from an Obligor shall be a separate and independent debt. |
2.2.3 | A Finance Party may, except as otherwise stated in the Finance Documents (including clauses 34.26 (All enforcement action through the Security Agent)) and 35.2 (Finance Parties acting together), separately enforce its rights under the Finance Documents. |
2.3 | Borrowers' rights and obligations |
2.3.1 | The obligations of each Borrower under this Agreement are joint and several. Failure by a Borrower to perform its obligations under this Agreement shall constitute a failure by all of the Borrowers. |
2.3.2 | Each Borrower irrevocably and unconditionally jointly and severally with each other Borrower: |
(a) | agrees that it is responsible for the performance of the obligations of each other Borrower under this Agreement; |
(b) | acknowledges and agrees that it is a principal and original debtor in respect of all amounts due from the Borrowers under this Agreement; and |
(c) | agrees with each Finance Party that, if any obligation of another Borrower under this Agreement is or becomes unenforceable, invalid or illegal for any reason it will, as an independent and primary obligation, indemnify that Finance Party immediately on demand against any and all Losses it incurs as a result of another Borrower not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by that other Borrower under this Agreement. The amount payable under this indemnity shall be equal to the amount which that Finance Party would otherwise have been entitled to recover. |
2.3.3 | The obligations of each Borrower under the Finance Documents shall continue until all amounts which may be or become payable by the Borrowers under or in connection with the Finance Documents have been irrevocably and unconditionally paid or discharged in full, regardless of any intermediate payment or discharge in whole or in part. |
2.3.4 | If any discharge, release or arrangement (whether in respect of the obligations of a Borrower or any security for those obligations or otherwise) is made by a Finance Party in whole or in part on the basis of any payment, security or other disposition which is avoided or must be restored in insolvency, liquidation, administration or otherwise, without limitation, then the liability of the Borrowers under this Agreement will continue or be reinstated as if the discharge, release or arrangement had not occurred. |
2.3.5 | The obligations of each Borrower under the Finance Documents shall not be affected by an act, omission, matter or thing which, but for this clause (whether or not known to it or any Finance |
(a) | any time, waiver or consent granted to, or composition with, any Obligor or other person; |
(b) | the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of any other Obligor; |
(c) | the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any Obligor or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security; |
(d) | any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor or any other person; |
(e) | any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of a Finance Document or any other document or security; |
(f) | any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security; or |
(g) | any insolvency or similar proceedings. |
2.3.6 | Each Borrower waives any right it may have of first requiring any Finance Party (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from that Borrower under any Finance Document. This waiver applies irrespective of any law or any provision of a Finance Document to the contrary. |
2.3.7 | Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably and unconditionally paid or discharged in full, each Finance Party (or any trustee or agent on its behalf) may: |
(a) | refrain from applying or enforcing any other moneys, security or rights held or received by that Finance Party (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and no Borrower will be entitled to the benefit of the same; and |
(b) | hold in an interest-bearing suspense account any money received from any Borrower or on account of any Borrower's liability under any Finance Document. |
2.3.8 | Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full and unless the Agent otherwise directs (on such terms as it may require), no Borrower shall exercise any rights (including rights of set-off) which it may have by reason of performance by it of its obligations under the Finance Documents: |
(a) | to be indemnified by another Obligor; |
(b) | to claim any contribution from any other Obligor or any guarantor of any Obligor's obligations under the Finance Documents; and/or |
(c) | to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under the Finance Documents or of any guarantee or security taken pursuant to, or in connection with, the Finance Documents by any Finance Party; and/or |
(d) | to bring legal or other proceedings for an order requiring any Obligor to make any payment, or perform any obligation, in respect of which that Borrower is liable under this Agreement or any of the other Finance Documents; and/or |
(e) | to exercise any right of set-off against any other Obligor; and/or |
(f) | to claim or prove as a creditor of any other Obligor in competition with any Finance Party. |
3 | Purpose |
3.1 | Purpose |
3.2 | Use on Delivery |
3.3 | Monitoring |
4 | Conditions of Utilisation |
4.1 | Initial conditions precedent |
4.2 | Conditions precedent on Delivery |
4.3 | Notice to Lenders |
4.4 | Further conditions precedent |
(a) | no Default is continuing or would result from the proposed Utilisation; |
(b) | the Repeating Representations and, in relation to the first Utilisation, all of the other representations set out in clause 18 (Representations) (except the Ship Representations), are true; |
(c) | no events, facts, conditions or circumstances shall exist or have arisen or occurred (and neither the Agent nor any Lender or the Hedging Provider shall have become aware of other events, facts, conditions or circumstances not previously known to it), which the Agent (acting on the instructions of the Majority Lenders) shall determine, have had or could reasonably be expected to have, a Material Adverse Effect; |
(d) | the Ship Representations are true so far as they relate to the Ship relating to the Utilisation being made; and |
(e) | no Total Loss has occurred in relation to a Ship. |
4.5 | Waiver of conditions precedent |
5 | Utilisation |
5.1 | Delivery of a Utilisation Request |
5.2 | Completion of a Utilisation Request |
5.2.1 | A Utilisation Request is irrevocable and will not be regarded as having been duly completed unless: |
(a) | the proposed Utilisation Date in respect of an Advance is a Business Day falling not later than the Last Availability Date for that Advance; |
(b) | the currency and amount of the Utilisation comply with clause 5.3 (Currency and amount); |
(c) | the proposed Interest Period complies with clause 9 (Interest Periods); and |
(d) | it identifies the purpose for the Utilisation and that purpose complies with clause 3 (Purpose) and it identifies the Ship Commitment to which it relates. |
5.2.2 | The Ship Commitment in respect of a Ship may only be drawn down in a single amount in one Advance. |
5.3 | Currency and amount and the conditions of the Utilisations |
5.3.1 | The currency specified in a Utilisation Request must be dollars. |
5.3.2 | The total amount available and advanced under all Advances shall not exceed the Total Commitments. |
5.3.3 | The total amount available and advanced under an Advance for a Ship shall not exceed: |
(a) | in the case of Ship A, the lower of (i) $27,950,000 and (ii) the amount in dollars which is equal to 65% of the market value of that Ship as determined pursuant to the valuations of that Ship obtained under Part 2 of Schedule 3 (Conditions precedent); and |
(b) | in the case of Ship B, the lower of (i) $11,732,500 and (ii) the amount in dollars which is equal to 65% of the market value of that Ship as determined pursuant to the valuations of that Ship obtained under Part 2 of Schedule 3 (Conditions precedent). |
5.3.4 | Only one Advance under one Utilisation may be made available in respect of each Ship and the relevant Ship Commitment. |
5.4 | Lenders' participation |
5.4.1 | If the conditions set out in this Agreement have been met, each Lender shall make its participation in each Advance available by the relevant Utilisation Date through its Facility Office. |
5.4.2 | The amount of each Lender's participation in each Advance will be equal to the proportion borne by its Commitment to the Total Commitments immediately prior to making the Advance. |
5.4.3 | The Agent shall promptly notify each Lender of the amount of each Advance and the amount of its participation in such Advance, in each case by 11:00 a.m. on the Quotation Day. |
5.4.4 | The Agent shall pay all amounts received by it in respect of each Advance (and its own participation in it, if any) to the Borrowers or the account of any of them or to the relevant Seller, in each case in accordance with the instructions contained in the relevant Utilisation Request. |
5.5 | Condition subsequent |
6 | Repayment |
6.1 | Repayment |
6.2 | Scheduled repayment of Advances |
6.2.1 | To the extent not previously reduced, each Advance shall be repaid by instalments on each Repayment Date for that Advance by the amount specified in the table below (the Repayment Table ) (as revised by clause 6.3 (Adjustment of scheduled repayments)): |
Repayment Date
|
Advance B
Amount $ |
|
First
|
465,834
|
293,313
|
Second
|
465,834
|
293,313
|
Third
|
465,834
|
293,313
|
Fourth
|
465,834
|
293,313
|
Fifth
|
465,834
|
293,313
|
Sixth
|
465,834
|
293,313
|
Seventh
|
465,834
|
293,313
|
Eighth
|
465,834
|
293,313
|
Ninth
|
465,834
|
293,313
|
Tenth
|
465,834
|
293,313
|
Eleventh
|
465,834
|
293,313
|
Twelfth
|
465,834
|
293,313
|
Thirteenth
|
465,834
|
293,313
|
Fourteenth
|
465,834
|
293,313
|
Fifteenth
|
465,834
|
293,313
|
Sixteenth
|
465,834
|
293,313
|
Seventeenth
|
465,834
|
293,313
|
Eighteenth
|
465,834
|
293,313
|
Nineteenth
|
465,834
|
293,313
|
Twentieth
|
465,834
|
293,313
|
Repayment Date
|
Advance B
Amount $ |
|
Twenty first
|
465,834
|
293,313
|
Twenty second
|
465,834
|
293,313
|
Twenty third
|
465,834
|
293,313
|
Twenty fourth
|
465,834
|
293,313
|
Twenty fifth
|
465,834
|
293,313
|
Twenty sixth
|
465,834
|
293,313
|
Twenty seventh
|
465,834
|
293,313
|
Twenty eighth
|
15,372,482
|
3,813,049
|
TOTAL
|
27,950,000
|
11,732,500
|
6.2.2 | The twenty eighth instalment of Advance A referred to above is comprised of two parts, a repayment instalment in the amount of $465,834 and a balloon instalment in the amount of $14,906,648. |
6.2.3 | The twenty eighth instalment of Advance B referred to above is comprised of two parts, a repayment instalment in the amount of $293,313 and a balloon instalment in the amount of $3,519,736. |
6.2.4 | On the Final Repayment Date for each Advance (without prejudice to any other provision of this Agreement), the relevant Advance shall be repaid in full. |
6.3 | Adjustment of scheduled repayments |
(a) | in the case of a reduction under clause 7.3 (Voluntary cancellation) or a prepayment under clause 7.4 (Voluntary prepayment) of an Advance, where the reduction or, as the case may be, prepayment, shall be treated as reducing the said instalments of the relevant Advance (including the relevant Balloon Instalment) either in inverse chronological order of maturity or pro rata, at the Borrowers' option; and |
(b) | in the case of a reduction or prepayment under clause 7.6.2(b) (Sale or Total Loss) or clause 25.12 (b) (Security shortfall) of an Advance, where the reduction or (as the case may be) prepayment, shall be treated as reducing the said instalments (including the Balloon Instalment) in inverse chronological order of maturity. |
6.4 | Revision of table |
7 | Illegality, prepayment and cancellation |
7.1 | Illegality |
(a) | that Lender shall promptly notify the Agent upon becoming aware of that event; |
(b) | upon the Agent notifying the Borrowers, the Commitment of that Lender will be immediately cancelled and the remaining Total Commitments shall each be reduced accordingly; and |
(c) | the Borrowers shall repay that Lender's participation in the Loan on the last day of the Interest Period occurring after the Agent has notified the Borrowers or, if earlier, the date specified by the Lender in the notice delivered to the Agent (being no earlier than the last day of any applicable grace period permitted by law). |
7.2 | Change of control |
(a) | cancel the Total Commitments, with effect from the date specified in that notice; and/or |
(b) | declare that all or part of the Loan be payable within 10 Business Days' of such notice, in which case the Borrowers shall repay the Loan in full together with all amounts outstanding under this Agreement and the other Finance Documents within 10 Business Days of such notice. |
7.3 | Voluntary cancellation |
7.4 | Voluntary prepayment |
7.5 | Right of replacement or cancellation and prepayment in relation to a single Lender/Right of cancellation in relation to a Defaulting Lender |
7.5.1 | If: |
(a) | any sum payable to any Lender by an Obligor is required to be increased under clause 12.2 (Tax gross-up); or |
(b) | any Lender claims indemnification from the Borrowers under clause 12.3 (Tax indemnity) or clause 13.1 (Increased costs); or |
(c) | any Lender becomes a Non-Consenting Lender, the Borrowers may, whilst the circumstance giving rise to the requirement for that increase or indemnification or the relevant Lender becoming a Non-Consenting Lender continues for a maximum period of 30 days, give the Agent notice of cancellation of the Commitment of that Lender and their intention to procure the repayment of that Lender's participation in the Loan or give the Agent notice of their intention to replace that Lender in accordance with clause 7.5.4. |
7.5.2 | On receipt of a notice referred to in clause 7.5.1 above, the Commitment of that Lender shall immediately be reduced to zero and (unless the Commitment of the relevant Lender is replaced in accordance with clause 7.5.4) the remaining Total Commitments shall each be reduced accordingly. |
7.5.3 | On the last day of each Interest Period which ends after the Borrowers have given notice under clause 7.5.1 above in relation to a Lender (or, if earlier, the date specified by the Borrowers in that notice), the Borrowers shall repay that Lender's participation in the Loan. |
7.5.4 | The Borrowers may, in the circumstances set out in clause 7.5.1, on 10 Business Days' prior notice to the Agent and that Lender, replace that Lender by requiring that Lender to transfer (and, to the extent permitted by law, that Lender shall transfer) pursuant to clause 32 (Changes to the Lenders) all (and not part only) of its rights and obligations under this Agreement to a Lender or other bank, financial institution, trust, fund or other entity selected by the Borrowers which confirms its willingness to assume and does assume all the obligations of the transferring Lender in accordance with clause 32 (Changes to the Lenders) for a purchase price in cash or other cash payment payable at the time of the transfer equal to the aggregate of: |
(a) | the outstanding principal amount of such Lender's participation in the Loan; |
(b) | all accrued interest owing to such Lender to the extent that the Agent has not given a notification under clause 32.9 (Pro-rata interest settlement); |
(c) | the Break Costs which would have been payable to such Lender pursuant to clause 10.4 (Break Costs) had the Borrowers prepaid in full that Lender's participation in the Loan on the date of the transfer; and |
(d) | all other amounts payable to that Lender under the Finance Documents on the date of the transfer. |
7.5.5 | The replacement of a Lender pursuant to clause 7.5.4 shall be subject to the following conditions: |
(a) | the Borrowers shall have no right to replace the Agent; |
(b) | neither the Agent nor any Lender shall have any obligation to find a replacement Lender; |
(c) | in no event shall the Lender replaced under clause 7.5.4 be required to pay or surrender any of the fees received by such Lender pursuant to the Finance Documents; and |
(d) | the Lender shall only be obliged to transfer its rights pursuant to clause 7.5.4 above once it is satisfied that it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to that transfer. |
7.5.6 | A Lender shall perform the checks described in clause 7.5.5(d) above as soon as reasonably practicable following delivery of a notice referred to in clause 7.5.4 above and shall notify the Agent and the Borrowers when it is satisfied that it has complied with those checks. |
7.5.7 | If any Lender becomes a Defaulting Lender, the Borrowers may, at any time whilst the Lender continues to be a Defaulting Lender, give the Agent 10 Business Days' notice of cancellation of the Commitment of that Lender. |
7.5.8 | On the notice referred to in clause 7.5.7 above becoming effective, the undrawn Commitment of the Defaulting Lender shall immediately be reduced to zero and (unless the Commitment of the relevant Lender is replaced in accordance with clause 43.5 (Replacement of a Defaulting Lender)) the remaining Total Commitments shall each be reduced accordingly. |
7.5.9 | The Agent shall, as soon as practicable after receipt of a notice referred to in clause 7.5.7 above, notify all Lenders. |
7.6 | Sale or Total Loss |
7.6.1 | If a Ship becomes a Total Loss before its Ship Commitment has become available for borrowing under this Agreement, the Total Commitments shall immediately be reduced by the Ship Commitment for such Ship and such Ship Commitment shall be reduced to zero. |
7.6.2 | On the Disposal Repayment Date of a Mortgaged Ship, the Ship Commitment shall be reduced to zero and the Total Commitments shall be reduced accordingly, and the Borrowers shall prepay the Loan by an amount equal to the higher of: |
(a) | the full amount of the Advance relevant to such Ship; and |
(b) | such amount as shall ensure that, immediately after such prepayment, the Security Value shall be no less than the Minimum Value. |
7.6.3 | Any such prepayment shall be applied in reduction of the Advance relevant to the Ship lost or sold until is prepaid in full and, as to balance, in reduction of the other Advance. |
7.7 | Automatic cancellation |
7.8 | Restrictions |
7.8.1 | Any notice of cancellation or prepayment given by any Party under this clause 7 shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date or dates upon which the relevant cancellation or prepayment is to be made and the amount of that cancellation or prepayment. |
7.8.2 | Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and, subject to any Break Costs, without premium or penalty. |
7.8.3 | The Borrowers may not re-borrow any part of the Facility which is repaid or prepaid. |
7.8.4 | The Borrowers shall not repay or prepay all or any part of the Loan or cancel all or any part of the Commitments except at the times and in the manner expressly provided for in this Agreement. |
7.8.5 | No amount of the Total Commitments cancelled under this Agreement may be subsequently reinstated. |
7.8.6 | If the Agent receives a notice under this clause 7 it shall promptly forward a copy of that notice to either the Borrowers or the affected Lender, as appropriate. |
7.8.7 | If the Total Commitments are partially reduced under this Agreement (other than under clause 7.1 (Illegality) and clause 7.5 (Right of replacement or cancellation and prepayment in relation to a single Lender/Right of cancellation in relation to a Defaulting Lender)), the Commitments of all the |
7.8.8 | If an Advance is partially prepaid under this Agreement (other than under clause 7.1 (Illegality) and clause 7.5 (Right of replacement or cancellation and prepayment in relation to a single Lender/Right of cancellation in relation to a Defaulting Lender)), the amount prepaid shall reduce the participation of all the Lenders in that Advance rateably. |
7.8.9 | Any prepayment under this Agreement shall be made, where applicable, together with payment to the Hedging Provider of any amount falling due to the Hedging Provider under a Hedging Contract as a result of the termination or close out of that Hedging Contract or any Hedging Transaction under it in accordance with clause 29.2 (Unwinding of Hedging Contracts) in relation to that prepayment. |
8 | Interest |
8.1 | Calculation of interest |
(a) | Margin; and |
(b) | LIBOR for that Interest Period. |
8.2 | Payment of interest |
8.3 | Default interest |
8.3.1 | If an Obligor fails to pay any amount payable by it under a Finance Document (other than a Hedging Contract) on its due date, interest shall accrue on the overdue amount from the due date up to the date of actual payment (both before and after judgment) at a rate which, subject to clause 8.3.2 below, is 2 percentage points higher than the rate which would have been payable if the overdue amount had, during the period of non-payment, constituted the Loan for successive Interest Periods, each of a duration selected by the Agent (acting reasonably). Any interest accruing in accordance with this clause 8.3 shall be immediately payable by the Obligors on demand by the Agent. |
8.3.2 | If any overdue amount consists of all or part of the Loan which became due on a day which was not the last day of an Interest Period relating to the Loan or the relevant part of it: |
(a) | the first Interest Period for that overdue amount shall have a duration equal to the unexpired portion of the current Interest Period relating to the Loan; and |
(b) | the rate of interest applying to the overdue amount during that first Interest Period shall be 2 percentage points higher than the rate which would have applied if the overdue amount had not become due. |
8.3.3 | Default interest (if unpaid) arising on an overdue amount will be compounded with the overdue amount at the end of each Interest Period applicable to that overdue amount but will remain immediately due and payable. |
8.4 | Notification of rates of interest |
9 | Interest Periods |
9.1 | Selection of Interest Periods |
9.1.1 | The Borrowers may select an Interest Period for an Advance in the Utilisation Request for that Advance or (if that Advance has already been borrowed) in a Selection Notice. |
9.1.2 | Each Selection Notice is irrevocable and must be delivered to the Agent by the Borrowers not later than 11:00 a.m. three Business Days before the last day of the then current Interest Period. |
9.1.3 | If the Borrowers fail to deliver a Selection Notice to the Agent in accordance with clause 9.1.2, the relevant Interest Period will, subject to clause 9.2 (Interest Periods overrunning Repayment Dates), be 3 months. |
9.1.4 | Subject to this clause 9, the Borrowers may select an Interest Period of three, six or twelve months or any other period agreed between the Borrowers and the Agent on the instructions of all the Lenders. |
9.1.5 | No Interest Period in respect of an Advance shall extend beyond the Final Repayment Date for that Advance. |
9.1.6 | The first Interest Period for an Advance shall start on the Utilisation Date for such Advance and each subsequent Interest Period for such Advance shall start on the last day of its preceding Interest Period. |
9.2 | Interest Periods overrunning Repayment Dates |
9.3 | Non-Business Days |
10 | Changes to the calculation of interest |
10.1 | Absence of quotations |
10.2 | Market Disruption Event |
10.2.1 | If a Market Disruption Event occurs in relation to an Advance for any Interest Period, then the rate of interest on each Lender's share of that Advance for the Interest Period shall be the rate per annum which is the sum of: |
(a) | the Margin; and |
(b) | the rate notified to the Agent by that Lender as soon as practicable and in any event before interest is due to be paid in respect of that Interest Period, to be that which expresses as a percentage rate per annum the cost to that Lender of funding its participation in that Advance from whatever source it may reasonably select. |
10.2.2 | If a Market Disruption Event occurs the Agent shall, as soon as is practicable, notify the Borrowers. |
10.2.3 | In this Agreement Market Disruption Event means that: |
(a) | at or about noon on the Quotation Day for the relevant Interest Period LIBOR is to be determined by reference to the Reference Banks and none or only one of the Reference Banks supplies a rate to the Agent to determine LIBOR for the relevant Interest Period; or |
(b) | before close of business in London on the Quotation Day for the relevant Interest Period, the Agent receives notifications from a Lender or Lenders (whose participations in the Loan equal or exceed 30% of the Loan) or, if prior to the first Utilisation Date, whose Commitments equal or exceed 30% of the Total Commitments) that the cost to it of funding its participation in the Loan from whatever source it may reasonably select would be in excess of LIBOR. |
10.3 | Alternative basis of interest or funding |
10.3.1 | If a Market Disruption Event occurs and the Agent or the Borrowers so require, the Agent and the Borrowers shall enter into negotiations (for a period of not more than 30 days) with a view to agreeing a substitute basis for determining the rate of interest. |
10.3.2 | Any alternative basis agreed pursuant to clause 10.3.1 above shall, with the prior consent of all the Lenders be binding on all Parties. |
10.4 | Break Costs |
10.4.1 | The Borrowers shall, within three Business Days of demand by a Finance Party, pay to that Finance Party its Break Costs attributable to all or any part of the Loan or Unpaid Sum being paid by the Borrowers on a day other than the last day of an Interest Period for the Loan or Unpaid Sum or relevant part of it. |
10.4.2 | Each Lender shall, as soon as reasonably practicable after a demand by the Agent, provide a certificate confirming the amount of its Break Costs for any Interest Period in which they accrue. |
11 | Fees |
11.1 | Commitment commission |
11.1.1 | The Borrowers shall pay to the Agent (for the account of each Lender) a fee in dollars computed at the rate of 0.6% per annum on the undrawn and uncancelled portion of that Lenders Commitment under the Facility calculated from the date of this Agreement (the start date ) . |
11.1.2 | The Borrowers shall pay the accrued commitment commission on the date falling three months after the start date, on the last day of each successive period of three months thereafter until the Last Availability Date to occur, on the Last Availability Date to occur and, if cancelled in full, on the cancelled amount of the relevant Lender's Commitment at the time the cancellation is effective. |
11.1.3 | No commitment commission is payable to the Agent (for the account of a Lender) on the undrawn portion of the Commitment of that Lender under the Facility for any day on which that Lender is a Defaulting Lender. |
11.2 | Arrangement Fee |
12 | Tax gross-up and indemnities |
12.1 | Definitions |
12.1.1 | In this Agreement: |
12.1.2 | Unless a contrary indication appears, in this clause 12 a reference to determines or determined means a determination made in the absolute discretion of the person making the determination. |
12.1.3 | This clause 12.1 shall not apply in respect of any payments under any Hedging Contract, where the gross-up provisions of the Hedging Master Agreement itself shall apply. |
12.2 | Tax gross-up |
12.2.1 | Each Obligor shall make all payments to be made by it under any Finance Document without any Tax Deduction, unless a Tax Deduction is required by law. |
12.2.2 | The Borrowers shall, promptly upon any of them becoming aware that an Obligor must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction), notify the Agent accordingly. Similarly, a Lender shall notify the Agent on becoming so aware in respect of a payment payable to that Lender. If the Agent receives such notification from a Lender it shall notify the Borrowers and that Obligor. |
12.2.3 | If a Tax Deduction is required by law to be made by an Obligor, the amount of the payment due from that Obligor under the relevant Finance Document shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required. |
12.2.4 | If an Obligor is required to make a Tax Deduction, that Obligor shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law. |
12.2.5 | Within 30 days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Obligor making that Tax Deduction shall deliver to the Agent for the Finance Party entitled to the payment evidence reasonably satisfactory to that Finance Party (including by way of receipts) that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority. |
12.2.6 | This clause 12.2 shall not apply in respect of any payments under any Hedging Contract, where the gross-up provisions of the Hedging Master Agreement itself shall apply. |
12.3 | Tax indemnity |
12.3.1 | Each Obligor who is a Party shall (within three Business Days of demand by the Agent) pay to a Protected Party an amount equal to the loss, liability or cost which that Protected Party determines will be or has been (directly or indirectly) suffered for or on account of Tax by that Protected Party in respect of a Finance Document. |
12.3.2 | Clause 12.3.1 above shall not apply: |
(a) | with respect to any Tax assessed on a Finance Party: |
(i) | under the law of the jurisdiction in which that Finance Party is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Finance Party is treated as resident for tax purposes; or |
(ii) | under the law of the jurisdiction in which that Finance Party's Facility Office is located in respect of amounts received or receivable in that jurisdiction, |
(b) | to the extent a loss, liability or cost is compensated for by an increased payment under clause 12.2 (Tax gross-up); |
(c) | to the extent a loss, liability or cost is compensated for by a payment under clause 12.4 (Indemnities on after Tax basis); or |
(d) | to the extent a loss, liability or cost relates to a FATCA Deduction required to be made by a Party. |
12.3.3 | A Protected Party making, or intending to make a claim under clause 12.3.1 above shall promptly notify the Agent of the event which will give, or has given, rise to the claim, following which the Agent shall notify the Borrowers and the Guarantor. |
12.3.4 | A Protected Party shall, on receiving a payment from an Obligor under this clause 12.3, notify the Agent. |
12.4 | Indemnities on after Tax basis |
12.4.1 | If and to the extent that any sum payable to any Protected Party by the Borrowers under any Finance Document by way of indemnity or reimbursement proves to be insufficient, by reason of any Tax suffered thereon, for that Protected Party to discharge the corresponding liability to a third party, or to reimburse that Protected Party for the cost incurred by it in discharging the corresponding liability to a third party, the Borrowers shall pay that Protected Party such additional sum as (after taking into account any Tax suffered by that Protected Party on such additional sum) shall be required to make up the relevant deficit. |
12.4.2 | If and to the extent that any sum (the Indemnity Sum ) constituting (directly or indirectly) an indemnity to any Protected Party but paid by the Borrowers to any person other than that Protected Party, shall be treated as taxable in the hands of the Protected Party, the Borrowers shall pay to that Protected Party such sum (the Compensating Sum ) as (after taking into account any Tax suffered by that Protected Party on the Compensating Sum) shall reimburse that Protected Party for any Tax suffered by it in respect of the Indemnity Sum. |
12.4.3 | For the purposes of this clause 12.4 a sum shall be deemed to be taxable in the hands of a Protected Party if it falls to be taken into account in computing the profits or gains of that Protected Party for the purposes of Tax and, if so, that Protected Party shall be deemed to have suffered Tax on the relevant sum at the rate of Tax applicable to that Protected Party's profits or gains for the period in which the payment of the relevant sum falls to be taken into account for the purposes of such Tax. |
12.5 | FATCA Information |
12.5.1 | Subject to clause 12.5.3 below, each Party shall, within ten Business Days of a reasonable request by another Party: |
(a) | confirm to that other Party whether it is: |
(b) | 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 |
(c) | 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. |
12.5.2 | If a Party confirms to another Party pursuant to clause 12.5.1(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. |
12.5.3 | Clause 12.5.1 above shall not oblige any Finance Party to do anything, and paragraph (c) of clause |
12.5.1 | above shall not oblige any other Party to do anything, which would or might in its reasonable opinion constitute a breach of: |
(a) | any law or regulation; |
(b) | any fiduciary duty; or |
(c) | any duty of confidentiality. |
12.5.4 | 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 paragraphs (a) and (b) of clause 12.5.1 above (including, for the avoidance of doubt, paragraph (c), where it 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. |
12.5.5 | If a Borrower is a US Tax Obligor, or where 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: |
(a) | where a Borrower is a US Tax Obligor and the relevant Lender is an Original Lender, the date of this Agreement; |
(b) | where a Borrower is a US Tax Obligor and the relevant Lender is a New Lender, the relevant Transfer Date; or |
(c) | the date a new US Tax Obligor accedes as a Borrower; or |
(d) | where a Borrower is not a US Tax Obligor, the date of a request from the Agent, |
(i) | a withholding certificate on Form W-8 or Form W-9 or any other relevant form; or |
(ii) | any withholding statement and other documentation, authorisations and waivers as the Agent may require to certify or establish the status of such Lender under FATCA or that other law or regulation. |
12.5.6 | If any withholding certificate, withholding statement, document, authorisation or waiver provided to the Agent by a Lender pursuant to paragraph 12.5.5 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. |
12.5.7 | The Agent may rely on any withholding certificate, withholding statement, document, authorisation or waiver it receives from a Lender pursuant to paragraph 12.5.5 or 12.5.6 above without further verification. The Agent shall not be liable for any action taken by it under or in connection with paragraph 12.5.5 or 12.5.6 above or this paragraph 12.5.7. |
12.5.8 | Without prejudice to any other term of this Agreement, if a Lender fails to supply any withholding certificate, withholding statement, document, authorisation, waiver or information in accordance with paragraph 12.5.5 above, or any withholding certificate, withholding statement, document, authorisation, waiver or information provided by a Lender to the Agent is or becomes materially inaccurate or incomplete, then such Lender shall indemnify the Agent, within three Business Days of demand, against any cost, loss, Tax or liability (including, without limitation, for negligence or any other category of liability whatsoever) incurred by the Agent (including any related interest and penalties) in acting as Agent under the Finance Documents as a result of such failure. |
12.6 | FATCA Deduction |
12.6.1 | Each Party may make any FATCA Deduction it is required by FATCA to make, 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. |
12.6.2 | 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, the Agent and the other Finance Parties and the Agent shall notify the other Finance Parties. |
12.7 | Stamp taxes |
12.8 | Value added tax |
12.8.1 | All amounts set out, or expressed in a Finance Document to be payable by any party to a Finance Party which (in whole or in part) constitute the consideration for a supply or supplies for VAT purposes shall be deemed to be exclusive of any VAT which is chargeable on such supply or supplies, and accordingly, subject to clause 12.8.3 below, if VAT is or becomes chargeable on any supply made by any Finance Party to any party under a Finance Document, that party shall pay to the Finance Party (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of such VAT (and such Finance Party shall promptly provide an appropriate VAT invoice to such party). |
12.8.2 | If VAT is or becomes chargeable on any supply made by any Finance Party (the Supplier ) to any other Finance Party (the Recipient ) under a Finance Document, and any party to a Finance Document other than the Recipient (the Subject Party ) is required by the terms of any Finance Document to pay an amount equal to the consideration for such supply to the Supplier (rather than being required to reimburse or indemnify the Recipient in respect of that consideration): |
(a) | (where the Supplier is the person required to account to the relevant tax authority for the VAT) the Subject Party must also pay to the Supplier (at the same time as paying that amount) an additional amount equal to the amount of the VAT. The Recipient must (where this paragraph (a) applies) promptly pay to the Subject Party an amount equal to any credit or repayment the Recipient receives from the relevant tax authority which the Recipient reasonably determines relates to the VAT chargeable on that supply; and |
(b) | (where the Recipient is the person required to account to the relevant tax authority for the VAT) the Subject Party must promptly, following demand from the Recipient, pay to the Recipient an amount equal to the VAT chargeable on that supply but only to the extent that the Recipient reasonably determines that it is not entitled to credit or repayment from the relevant tax authority in respect of that VAT. |
12.8.3 | Where a Finance Document requires any party to it to reimburse or indemnify a Finance Party for any cost or expense, that party shall reimburse or indemnify (as the case may be) such Finance Party for the full amount of such cost or expense, including such part thereof as represents VAT save to the extent that such Finance Party reasonably determines that it is entitled to credit or repayment of in respect of such VAT from the relevant tax authority. |
12.8.4 | Any reference in this clause 12.8 to any Party shall, at any time when such Party is treated as a member of a group for VAT purposes, include (where appropriate and unless the context otherwise requires) a reference to the representative member of such group at such time (the term "representative member" to have the same meaning as in the Value Added Tax Act 1994). |
12.8.5 | In relation to any supply made by a Finance Party to any party under a Finance Document, if reasonably requested by such Finance Party, that party must promptly provide such Finance Party with details of that party's VAT registration and such other information as is reasonably requested in connection with such Finance Party's VAT reporting requirements in relation to such supply. |
13 | Increased Costs |
13.1 | Increased Costs |
13.1.1 | Subject to clause 13.3 (Exceptions), the Borrowers shall, within three Business Days of a demand by the Agent, pay for the account of a Finance Party the amount of any Increased Cost incurred by that Finance Party or any of its Affiliates which: |
(a) | arises as a result of (i) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation or (ii) compliance with any law or regulation made after the date of this Agreement; |
(b) | is a Basel III Increased Cost; and/or |
(c) | results from the implementation or application of or compliance with the Basel III Accord, CRR or CRD IV or any law or regulation that implements or applies the Basel III Accord, CRR or CRD IV. |
13.1.2 | In this Agreement Increased Costs means: |
(a) | a reduction in the rate of return from the Facility or on a Finance Party's (or its Affiliate's) overall capital; |
(b) | an additional or increased cost; or |
(c) | a reduction of any amount due and payable under any Finance Document, |
13.2 | Increased Cost claims |
13.2.1 | A Finance Party intending to make a claim pursuant to clause 13.1 (Increased Costs) shall notify the Agent of the event giving rise to the claim, following which the Agent shall notify the Borrowers. |
13.2.2 | Each Finance Party shall, as soon as practicable after a demand by the Agent, provide a certificate confirming the amount of its Increased Costs. |
13.3 | Exceptions |
13.3.1 | Clause 13.1 (Increased Costs) does not apply to the extent any Increased Cost is: |
(a) | attributable to a Tax Deduction required by law to be made by an Obligor; |
(b) | compensated for by clause 12.3 (Tax indemnity) (or would have been compensated for under clause 12.3 (Tax indemnity) but was not so compensated solely because any of the exclusions in clause 12.3.2 applied); |
(c) | attributable to a FATCA Deduction required to be made by a Party; or |
(d) | attributable to the wilful breach by the relevant Finance Party or its Affiliates of any law or regulation. |
13.3.2 | In this clause 13.3, a reference to a Tax Deduction has the same meaning given to the term in clause 12.1 (Definitions). |
14 | Other indemnities |
14.1 | Currency indemnity |
14.1.1 | If any sum due from an Obligor under the Finance Documents (a Sum ) , or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the First Currency ) in which that Sum is payable into another currency (the Second Currency ) for the purpose of: |
(a) | making or filing a claim or proof against that Obligor; and/or |
(b) | obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings, |
14.1.2 | Each Obligor waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable. |
14.2 | Mandatory cost |
(a) | in the case of a Lender lending from a Facility Office in a Participating Member State, the minimum reserve requirements (or other requirements having the same or similar purpose) of the European Central Bank or any other authority or agency which replaces all or any of its functions) in respect of loans made from that Facility Office; and |
(b) | in the case of any Lender lending from a Facility Office in the United Kingdom, any reserve asset, special deposit or liquidity requirements (or other requirements having the same or similar purpose) of the Bank of England (or any other governmental authority or agency) and/or paying any fees to the Financial Conduct Authority and/or the Prudential Regulation Authority (or any other governmental authority or agency which replaces all or any of their functions), which, in each case, is referable to that Lender's participation in the Loan. |
14.3 | Other indemnities |
14.3.1 | The Borrowers shall (or shall procure that another Obligor will), within three Business Days of demand by a Finance Party, indemnify each Finance Party against any and all Losses incurred by that Finance Party as a result of: |
(a) | the occurrence of any Event of Default; |
(b) | a failure by an Obligor to pay any amount due under a Finance Document on its due date, including without limitation, any and all Losses arising as a result of clause 36 (Sharing among the Finance Parties); |
(c) | funding, or making arrangements to fund, its participation in the Loan requested by the Borrowers in a Utilisation Request but not made by reason of the operation of any one or more of the provisions of this Agreement (other than by reason of default or negligence by that Finance Party alone); or |
(d) | the Loan (or part of the Loan) not being prepaid in accordance with a notice of prepayment given by the Borrowers. |
14.3.2 | The Borrowers shall (or shall procure that another Obligor will), within three Business Days of demand by an Indemnified Person, indemnify each Indemnified Person against any and all Losses, joint or several that may be incurred by or asserted or awarded against any Indemnified Person, in each case arising out of or in connection with or relating to any claim investigation, litigation or proceeding (or the preparation of any defence with respect thereto) commenced or threatened in relation to this Agreement (or the transactions contemplated hereby) or any use made or proposed to be made with the proceeds of the Facility (including an Environmental Claim made or asserted against such Indemnified Person if such Environmental Claim would not have been, or been capable of being, made or asserted against such Indemnified Person if the Finance Parties had not entered into any of the Finance Documents and/or exercised any of their rights, powers and discretions thereby conferred and/or performed any of their obligations thereunder and/or been involved in any of the transactions contemplated by the Finance Documents). This indemnity shall apply whether or not such claims, investigation, litigation or proceedings is brought by any Obligor, any other Group Member, any of their shareholders, their Affiliates, or creditors, or an Indemnified Person or any other person, or an Indemnified Person is otherwise a party thereto, except to the extent such Losses are found in a final non-appealable judgement by a court of competent jurisdiction to have resulted from such Indemnified Person's gross negligence or wilful misconduct. Each Indemnified Person may enforce and enjoy the benefit of this clause 14.3.2 under the Third Parties Act. |
14.4 | Indemnity to the Agent and the Security Agent |
14.4.1 | any and all Losses incurred by the Agent or the Security Agent (acting reasonably) as a result of: |
(a) | without prejudice to clause 34.7.2(a) as extended to the Security Agent by clause 34.22 (Application of certain clauses to Security Agent) investigating any event which it reasonably believes is a Default; |
(b) | acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised; |
(c) | instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under this Agreement; or |
(d) | any action taken by the Agent or the Security Agent or any of their representatives, agents or contractors in connection with any powers conferred by any Security Document to enforce any Security Interest thereunder or to remedy any breach of any Obligor's obligations under the Finance Documents; and |
14.4.2 | any cost, loss or liability (including, without limitation, for negligence or any other category of liability whatsoever) incurred by the Agent or the Security Agent (otherwise than by reason of the Agent's or the Security Agent's gross negligence or wilful default) (or, in the case of any cost, loss or liability pursuant to clause 37.11 (Disruption to payment systems etc.) notwithstanding the Agent's or the Security Agents negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Agent) in acting as Agent or the Security Agent under the Finance Documents. |
14.5 | Indemnity concerning security |
14.5.1 | The Borrowers shall (or shall procure that another Obligor will) promptly indemnify each Indemnified Person against any and all Losses incurred by it in connection with: |
(a) | any failure by the Borrowers to comply with clause 16 (Costs and expenses); |
(b) | acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised; |
(c) | the taking, holding, protection or enforcement of the Security Documents; |
(d) | the exercise or purported exercise of any of the rights, powers, discretions, authorities and remedies vested in the Security Agent and/or any other Finance Party and each Receiver by the Finance Documents or by law unless and to the extent that it was caused by its gross negligence or wilful default; |
(e) | any claim (whether relating to the environment or otherwise) made or asserted against the Indemnified Person which would not have arisen but for the execution or enforcement of one or more Finance Documents (unless and to the extent it is caused by the gross negligence or wilful default of that Indemnified Person); or |
(f) | any breach by any Obligor of any of its obligations expressed to be assumed by it in the Finance Documents. |
14.5.2 | The Security Agent may, in priority to any payment to the other Finance Parties, indemnify itself out of the Trust Property in respect of, and pay and retain, all sums necessary to give effect to the indemnity in this clause 14.5 and shall have a lien on the Security Documents and the proceeds of the enforcement of those Security Documents for all monies payable to it. |
14.6 | Continuation of indemnities |
14.7 | Third Parties Act |
14.8 | Interest |
14.9 | Exclusion of liability |
14.10 | Fax and email indemnity |
14.11 | Waiver |
15 | Mitigation by the Lenders |
15.1 | Mitigation |
15.1.1 | Each Finance Party shall, in consultation with the Borrowers, take all reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to, or cancelled pursuant to, any of clause 7.1 (Illegality), clause 12 (Tax gross-up and indemnities) or clause 13 (Increased Costs) including (but not limited to) transferring its rights and obligations under the Finance Documents to another Affiliate or Facility Office. |
15.1.2 | Clause 15.1.1 does not in any way limit the obligations of any Obligor under the Finance Documents. |
15.2 | Limitation of liability |
15.2.1 | The Borrowers shall promptly indemnify each Finance Party for all costs and expenses incurred by that Finance Party as a result of steps taken by it under clause 15.1 (Mitigation). |
15.2.2 | A Finance Party is not obliged to take any steps under clause 15.1 (Mitigation) if, in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it. |
16 | Costs and expenses |
16.1 | Transaction expenses |
(a) | this Agreement, the Hedging Master Agreement and any other documents referred to in this Agreement and the Original Security Documents; |
(b) | any other Finance Documents executed or proposed to be executed after the date of this Agreement including any executed to provide additional security under clause 25 (Minimum security value);or |
(c) | any Security Interest expressed or intended to be granted by a Finance Document, whether or not the transactions contemplated under the Finance Documents are consummated. |
16.2 | Amendment costs |
16.3 | Enforcement, preservation and other costs |
(a) | the enforcement of, or the preservation of any rights under, any Finance Document and any proceedings initiated by or against any Indemnified Person and as a consequence of holding the Charged Property or enforcing those rights and any proceedings instituted by or against any Indemnified Person as a consequence of taking or holding the Security Documents or enforcing those rights; |
(b) | any valuation carried out under clause 25 (Minimum security value); or |
(c) | any inspection carried out under clause 23.8 (Inspection and notice of drydocking) or any survey carried out under clause 23.16 (Survey report) or any inspection carried out under clause 21.15 (Inspection). |
17 | Guarantee and indemnity |
17.1 | Guarantee and indemnity |
(a) | guarantees to the Security Agent (as trustee for the Finance Parties) and the other Finance Parties punctual performance by each other Obligor of all such Obligor's obligations under the Finance Documents; |
(b) | undertakes with the Security Agent (as trustee for the Finance Parties) and the other Finance Parties that whenever another Obligor does not pay any amount when due under or in connection with any Finance Document, it shall immediately on demand pay that amount as if it was the principal obligor; and |
(c) | agrees with the Security Agent (as trustee for the Finance Parties) and the other Finance Parties that it will, as an independent and primary obligation, indemnify each Finance Party immediately on demand against any cost, loss or liability it incurs (i) if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal where such cost, loss or liability arises as a result of the Borrowers not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by the Borrowers under any Finance Document on the date when it would have been due, or (ii) if as a result (directly or indirectly) of the introduction of or any change in (or the interpretation, administration or application of) any law or regulation, or compliance with any law, regulation or administrative procedure made after entry into this Agreement (a Change in Law ) , there is a change in the currency, the value of the currency or the timing, place or manner in which any obligation guaranteed by the Guarantor is payable. The amount payable by the Guarantor under this indemnity: |
(i) | in respect of paragraph (i) above, shall be the amount it would have had to pay under this clause 17 if the amount claimed had been recoverable on the basis of a guarantee but for any relevant unenforceability, invalidity or illegality; and |
(ii) | in respect of paragraph (ii) above, shall include (1) the difference between (x) the amount (if any) received by the Agent and the other Finance Parties from the Borrowers and (y) the amount that the Borrowers were obliged to pay under the original express terms of the Finance Documents in the currency specified in the Finance Documents, disregarding any Change in Law (the Original Currency), and (2) all further costs, losses and liabilities suffered or incurred by the Agent and the other Finance Parties as a result of a Change in Law. |
17.2 | Continuing guarantee |
17.3 | Reinstatement |
(a) | the liability of each Obligor under this clause 17 shall continue as if the payment, discharge, release, arrangement, avoidance or reduction had not occurred; and |
(b) | each Finance Party shall be entitled to recover the value or amount of that security or payment from each Obligor, as if the payment, discharge, release, arrangement, avoidance or reduction had not occurred. |
17.4 | Waiver of defences |
(a) | any time, waiver or consent granted to, or composition with, any Obligor or other person; |
(b) | the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of any other Obligor; |
(c) | the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any Obligor or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security; |
(d) | any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor or any other person; |
(e) | any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of any Finance Document or any other document or security including, without limitation, any change in the purpose of, any extension of or any increase in any facility or the addition of any new facility under any Finance Document or other document or security; |
(f) | any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security; or |
(g) | any insolvency or similar proceedings. |
17.5 | Immediate recourse |
17.6 | Appropriations |
(a) | refrain from applying or enforcing any other moneys, security or rights held or received by that Finance Party (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and the Guarantor shall not be entitled to the benefit of the same; and |
(b) | hold in an interest-bearing suspense account any moneys received from the Guarantor or on account of the Guarantor's liability under this clause 17. |
17.7 | Deferral of Guarantor's rights |
(a) | to be indemnified by another Obligor; |
(b) | to claim any contribution from any other guarantor of any Obligor's obligations under the Finance Documents; |
(c) | to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under the Finance Documents or of any other guarantee or security taken pursuant to, or in connection with, the Finance Documents by any Finance Party; |
(d) | to bring legal or other proceedings for an order requiring any Obligor to make any payment, or perform any obligation, in respect of which the Guarantor has given a guarantee, undertaking or indemnity under clause 17 (Guarantee and Indemnity); |
(e) | to exercise any right of set-off against any other Obligor; and/or |
(f) | to claim or prove as a creditor of any other Obligor in competition with any Finance Party. |
17.8 | Additional security |
17.9 | Guarantor's rights and obligations |
18 | Representations |
18.1 | Status |
18.1.1 | Each Obligor is duly incorporated and validly existing under the laws of the jurisdiction of its incorporation as a limited liability company or corporation and (except in relation to Obligors incorporated in the Republic of the Marshall Islands or the Republic of Panama) has no centre of main interests, permanent establishment or place of business outside the jurisdiction in which it is incorporated. |
18.1.2 | Each Obligor and each other Group Member has power and authority to carry on its business as it is now being conducted and to own its property and other assets. |
18.1.3 | No Obligor is a US Tax Obligor. |
18.2 | Binding obligations |
18.3 | Power and authority |
18.3.1 | Each Obligor has power to enter into, perform and deliver and comply with its obligations under, and has taken all necessary action to authorise its entry into, each Finance Document, any Charter Document or any Contract to which it is or is to be a party. |
18.3.2 | No limitation on any Obligor's powers to borrow, create security or give guarantees will be exceeded as a result of any transaction under, or the entry into of, any Finance Document, any Charter Document or any Contract to which such Obligor is, or is to be, a party. |
18.4 | Non-conflict |
(a) | any law or regulation applicable to any Obligor; |
(b) | the Constitutional Documents of any Obligor; or |
(c) | any agreement or other instrument binding upon any Obligor, |
18.5 | Validity and admissibility in evidence |
18.5.1 | All authorisations required or desirable: |
(a) | to enable each Obligor lawfully to enter into, exercise its rights and comply with its obligations under each Finance Document and any Charter Document or any Contract to which it is, or is to be, a party; |
(b) | to make each Finance Document and any Charter Document or any Contract to which it is, or is to be, a party admissible in evidence in its Relevant Jurisdiction; and |
(c) | to ensure that each of the Security Interests created under the Security Documents has the priority and ranking contemplated by them, |
18.5.2 | All authorisations necessary for the conduct of the business, trade and ordinary activities of each Obligor have been obtained or effected and are in full force and effect if failure to obtain or effect those authorisations might have a Material Adverse Effect. |
18.6 | Governing law and enforcement |
18.6.1 | The choice of English law or any other applicable law as the governing law of any Finance Document, any Charter Document or any Contract will be recognised and enforced in each Obligor's Relevant Jurisdiction. |
18.6.2 | Any judgment obtained in England in relation to an Obligor will be recognised and enforced in each Obligor's Relevant Jurisdictions. |
18.7 | Information |
18.7.1 | Any Information is true and accurate in all material respects at the time it was given or made. |
18.7.2 | There are no facts or circumstances or any other information which could make the Information incomplete, untrue, inaccurate or misleading in any material respect. |
18.7.3 | The Information does not omit anything which could make the Information incomplete, untrue, inaccurate or misleading in any material respect. |
18.7.4 | All opinions, projections, forecasts or expressions of intention contained in the Information and the assumptions on which they are based have been arrived at after due and careful enquiry and consideration and were believed to be reasonable by the person who provided that Information as at the date it was given or made. |
18.7.5 | For the purposes of this clause 18.7, Information means: any information provided by any Obligor to any of the Finance Parties in connection with the Finance Documents, the Charter Documents or the Contracts or the transactions referred to in them (including any information memorandum). |
18.8 | Original Financial Statements |
18.8.1 | The Original Financial Statements were prepared in accordance with GAAP consistently applied. |
18.8.2 | The Original Financial Statements give a true and fair view of the consolidated financial condition and results of operations of the Guarantor and the Group during the relevant financial year. |
18.8.3 | There has been no material adverse change in the assets, business, financial condition or operations of any Obligor (or the assets, business, operations or consolidated financial condition of the Guarantor or the Group taken as a whole), since the date of the Original Financial Statements. |
18.9 | Pari passu ranking |
18.10 | Ranking and effectiveness of security |
18.11 | No insolvency |
18.12 | No filing or stamp taxes |
18.13 | Tax |
18.13.1 | No Obligor is required to make any deduction for or on account of Tax from any payment it may make under any Finance Document to which it is, or is to be, a party and no other party is required to make any such deduction from any payment it may make under any, Charter Document or Contract. |
18.13.2 | The execution or delivery or performance by any Party of the Finance Documents will not result in any Finance Party: |
(a) | having any liability in respect of Tax in any Flag State; or |
(b) | having or being deemed to have a place of business in any Flag State or any Relevant Jurisdiction of any Obligor. |
18.14 | No Default |
18.14.1 | No Default is continuing or is reasonably likely to result from the making of any Utilisation or the entry into, the performance of, or any transaction contemplated by, any Finance Document or any Charter Document or Contract. |
18.14.2 | No other event or circumstance is outstanding which constitutes (or, with the expiry of a grace period, the giving of notice, the making of any determination or any combination of any of the foregoing, would constitute) a default or termination event (however described) under any other |
18.14.3 | No other events, conditions, facts or circumstances exist or have arisen or occurred since 31 December 2014, which have had or could reasonably be expected to have a Material Adverse Effect. |
18.15 | No proceedings pending or threatened |
18.16 | No breach of laws |
18.16.1 | No Obligor or other Group Member has breached any law or regulation which might have a Material Adverse Effect. |
18.16.2 | No labour dispute is current or, to the best of any Obligor's knowledge and belief (having made due and careful enquiry), threatened against any Obligor or other Group Member which may have a Material Adverse Effect. |
18.16.3 | No Obligor or other Group Member has breached any of the Obligors' general risk management policy, which breach might have a Material Adverse Effect. |
18.17 | Environmental matters |
18.17.1 | No Environmental Law applicable to any Ship and/or any Obligor has been violated in a manner or circumstances which might have, a Material Adverse Effect. |
18.17.2 | All consents, licences and approvals required under such Environmental Laws have been obtained and are currently in force. |
18.17.3 | No Environmental Claim has been made or, to the best of any Obligor's knowledge and belief (having made due and careful enquiry), threatened or is pending against any Obligor or any Ship where that claim might have a Material Adverse Effect, and there has been no Environmental Incident which has given, or might give, rise to such a claim. |
18.18 | Tax compliance |
18.18.1 | No Obligor or other Group Member is materially overdue in the filing of any Tax returns or overdue in the payment of any amount in respect of Tax. |
18.18.2 | No claims or investigations are being, or are to the best of their knowledge likely to be, made or conducted against any Obligor or other Group Member with respect to Taxes such that a liability of, or claim against, any Obligor or other Group Member is reasonably likely to arise and which might have a Material Adverse Effect. |
18.19 | Anti-corruption law |
18.20 | Security and Financial Indebtedness |
18.20.1 | No Security Interest exists over all or any of the present or future assets of any Obligor in breach of this Agreement. |
18.20.2 | No Obligor has any Financial Indebtedness outstanding in breach of this Agreement. |
18.20.3 | No Security Interest exists over any of the shares of a Borrower or over any of the rights deriving from or related to such shares. |
18.21 | Legal and beneficial ownership |
18.21.1 | Ownership of assets Each Obligor is the sole legal and beneficial owner of the respective assets over which it purports to grant a Security Interest under the Security Documents. |
18.21.2 | Ownership of shares |
(a) | Each Borrower is a direct or indirect wholly-owned Subsidiary of the Guarantor. |
(b) | No less than 5% of the issued share capital of, and all of the issued voting share capital of, the Guarantor is legally and ultimately beneficially owned by the Permitted Holders. |
18.22 | Shares |
18.23 | Accounting Reference Date |
18.24 | No adverse consequences |
18.24.1 | It is not necessary under the laws of the Relevant Jurisdictions of any Obligor: |
(a) | in order to enable any Finance Party to enforce its rights under any Finance Document; or |
(b) | by reason of the execution of any Finance Document or the performance by any Obligor of its obligations under any Finance Document to which it is, or is to be, a party, |
18.24.2 | No Finance Party is or will be deemed to be resident, domiciled or carrying on business in any Relevant Jurisdiction by reason only of the execution, performance and/or enforcement of any Finance Document. |
18.25 | Copies of documents |
18.26 | No breach of any Contract or any Charter Document |
18.27 | No immunity |
18.28 | Ship status |
(a) | registered in the name of the relevant Owner through the relevant Registry as a ship under the laws and flag of the relevant Flag State; |
(b) | operationally seaworthy and in every way fit for service; |
(c) | classed with the relevant Classification, free of all requirements and recommendations of the relevant Classification Society; and |
(d) | insured in the manner required by the Finance Documents. |
18.29 | Ship's employment |
18.30 | Address commission |
18.31 | No Money Laundering |
18.32 | Use of proceeds |
18.33 | Maintenance of properties |
18.34 | Sanctions |
18.34.1 | No Obligor nor any member of the Group: |
(a) | is a Designated Person; |
(b) | has violated or is violating any applicable Sanctions; |
(c) | is using or will use the proceeds of the Loan for the purpose of financing or making funds available directly or indirectly to any person or entity which is currently listed on any Sanctions List or currently located in a Sanctioned Country, to the extent such financing or provision of funds would be prohibited by Sanctions or would otherwise cause any person to be in breach of Sanctions; or |
(d) | is contributing or will contribute or otherwise make available the proceeds of the Loan to any other person or entity for the purpose of financing the activities of any person or entity which is currently listed on a Sanctions List or currently located (or ordinarily resident) in a Sanctioned Country, to the extent such contribution or provision of proceeds would currently be prohibited by Sanctions or would otherwise cause any person to be in breach of Sanctions. |
18.35 | No corrupt practices |
(a) | Corrupt Practices, Fraudulent Practices, Collusive Practices or Coercive Practices, including the procurement or the execution of any contract for goods or works relating to its functions; |
(b) | the Financing of Terrorism. |
18.36 | Times when representations are made |
18.36.1 | All of the representations and warranties set out in this clause 18 (other than Ship Representations) are deemed to be made and repeated on the dates of: |
(a) | this Agreement; |
(b) | each Utilisation Request; and |
(c) | each Utilisation. |
18.36.2 | The Repeating Representations are also deemed to be made and repeated on the first day of each Interest Period. |
18.36.3 | All of the Ship Representations are deemed to be made and repeated on the first day of the Mortgage Period for the relevant Ship. |
18.36.4 | Each representation or warranty deemed to be made after the date of this Agreement shall be deemed to be made by reference to the facts and circumstances then existing at the date the representation or warranty is deemed to be made. |
19 | Information undertakings |
19.1 | Financial statements |
19.1.1 | The Obligors shall supply to the Agent: |
(a) | the audited consolidated financial statements of the Guarantor for each financial year as soon as the same become available, but in any event within 180 days after the end of each financial year; and |
(b) | the unaudited consolidated financial statements of the Guarantor (in the form in which they are published in the relevant press release) for each financial half-year of the Guarantor as soon as the same become available, but in any event within 120 days after the end of each such financial half-year. |
19.2 | Provision and contents of Compliance Certificate and valuations |
19.2.1 | The Obligors shall supply to the Agent: |
(a) | with each set of Annual Financial Statements and Semi-Annual Financial Statements, a Compliance Certificate; |
(b) | with each set of Annual Financial Statements, valuations of each Ship, each made in accordance with clause 25 (Minimum security value) at the cost and expense of the Borrowers; and |
(c) | valuations of each Fleet Vessel, as and when required by the Agent following receipt of a Compliance Certificate provided that the Agent (acting reasonably) requests the same (and for such purposes, the provisions of such clause 25 (Minimum security value) shall apply to each such valuation of a Fleet Vessel and this paragraph (c) mutatis mutandis as if each such Fleet Vessel were a Mortgaged Ship). |
19.2.2 | A determination by the Guarantor of the market value of each Compliance Certificate shall, amongst other things, set out (in reasonable detail) computations as to compliance with clause 20.2 (Financial condition) and shall be signed by two authorised signatories of the Guarantor and, if requested by the Agent in its absolute discretion shall include a computation by the Guarantor of the market value of each Fleet Vessel. |
19.3 | Requirements as to financial statements |
19.3.1 | The Borrowers shall procure that each set of Annual Financial Statements shall be audited by the Auditors. |
19.3.2 | Each set of financial statements delivered pursuant to clause 19.1 (Financial statements) shall: |
(a) | be prepared in accordance with GAAP; and |
(b) | give a true and fair view of (in the case of Annual Financial Statements) for any financial year), or fairly represent (in other cases), the financial condition and operations of the Guarantor and its Subsidiaries (including the Group), as at the date as at which those financial statements were drawn up. |
19.3.3 | The Borrowers shall procure that each set of financial statements delivered pursuant to clause 19.1 |
(a) | a description of any change necessary for those financial statements to reflect the GAAP or accounting practices and reference periods upon which corresponding Original Financial Statements were prepared; and |
(b) | sufficient information, in form and substance as may be reasonably required by the Agent, to enable the Lenders to determine whether clause 20 (Financial covenants) has been complied with and to make an accurate comparison between the financial position indicated in those financial statements and the Original Financial Statements. |
19.4 | Year-end |
19.5 | Information: miscellaneous |
(a) | at the same time as they are dispatched, copies of all documents dispatched by the Guarantor to its shareholders generally (or any class of them) or dispatched by the Guarantor or any Obligors to its creditors generally (or any class of them); |
(b) | promptly upon becoming aware of them, the details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against any Group Member, and which, if adversely determined, might have a Material Adverse Effect or which would involve a liability, or a potential or alleged liability, exceeding $1,000,000 (or its equivalent in other currencies); |
(c) | promptly, such information as the Agent may reasonably require about the Charged Property and compliance of the Obligors with the terms of any Security Documents; |
(d) | promptly upon becoming aware of them, details of any claim, action, suit, proceeding or investigation with respect to Sanctions against it, any other Group Member, any of their respective direct or indirect owners, Subsidiaries, any of their joint ventures or any of their respective directors, officers, employees, agents or representatives promptly upon becoming aware of the same; and |
(e) | promptly on request, such further information regarding the financial condition, assets and operations of the Group and/or any Group Member as any Finance Party through the Agent may reasonably request. |
19.6 | Notification of Default |
19.6.1 | The Borrowers shall notify the Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon any Obligor becoming aware of its occurrence (unless that Obligor is aware that a notification has already been provided by another Obligor). |
19.6.2 | If required by the Agent, the Borrowers shall supply to the Agent a certificate as to whether a Default is continuing (and if it is, the steps, if any, being taken to remedy it). |
19.7 | Sufficient copies |
19.8 | "Know your customer" checks |
19.8.1 | If: |
(a) | the introduction of or any change in (or in the interpretation, administration or application of) any internal policy or any law or regulation made after the date of this Agreement; |
(b) | any change in the status of an Obligor or the composition of the shareholders of an Obligor after the date of this Agreement; or |
(c) | a proposed assignment or transfer by a Lender or the Hedging Provider of any of its rights and/or obligations under this Agreement or any Hedging Contract to a party that is not already a Lender or the Hedging Provider prior to such assignment or transfer, |
19.8.2 | Each Finance Party shall promptly upon the request of the Agent or the Security Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent or the Security Agent (for itself) in order for it to carry out and be satisfied with the results of all necessary "know your customer" or other similar checks under all internal policies, applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents. |
19.9 | Money Laundering |
19.9.1 | provide the Agent with information, certificates and any documents required by the Agent or any other Finance Party to ensure compliance with any law official requirement or other regulatory measure or procedure implemented to combat Money Laundering (as defined in clause 21.16 (Bribery and corruption)) throughout the Facility Period; and19.9.2notify the Agent as soon as it becomes aware of any matters evidencing that a breach of any law official requirement or other regulatory measure or procedure implemented to combat Money Laundering (as defined in clause 21.16 (Bribery and corruption) may or is about to occur or that the person(s) who have or will receive the commercial benefit of this Agreement have changed from the date hereof. |
20 | Financial covenants |
20.1 | Financial definitions |
(a) | cash in hand or on deposit with any bank; and |
(b) | any other instrument, security or investment approved by the Majority Lenders, which are free from any Security Interest (other than Security Interests in favour of the Finance Parties) and/or restrictions and to which any Group Member is beneficially entitled at that time and which are readily available to Group Members and capable of being applied against Financial Indebtedness, as demonstrated by the then most recent Financial Statements. |
(a) | the Vessel Values of the Mortgaged Ships; and |
(b) | the aggregate market value of all other Fleet Vessels (other than the Mortgaged Ships), as shown in the most recent Compliance Certificate delivered to the Agent under clause 19.2 (Provision and contents of Compliance Certificate and valuations) or, if the Agent has requested valuations of such vessels following receipt of the most recent Compliance Certificate under clause 19.2 (Provision and contents of Compliance Certificate and valuations), as determined by reference to such valuations which are to be made in accordance with the provisions of clause 25 (Minimum security value) which shall apply for the purposes of this paragraph mutatis mutandis to each Fleet Vessel as if each such vessel were a Ship. |
20.2 | Financial condition |
(a) | Market Value Adjusted Net Worth: at any time and in respect of each Measurement Period the Tangible Net Worth: |
(i) | shall not be less than $150,000,000; and |
(ii) | shall be higher than 25% of the Total Market Value Adjusted Assets. |
(b) | Minimum liquidity: at all times the Cash and Cash Equivalents shall be not less than $500,000 multiplied by the number of the Fleet Vessels. |
20.3 | Financial testing |
21 | General undertakings |
21.1 | Use of proceeds |
21.2 | Authorisations |
(a) | obtain, comply with and do all that is necessary to maintain in full force and effect; and |
(b) | supply certified copies to the Agent of, |
(i) | enable it to perform its obligations under the Finance Documents, the Charter Documents and the Contracts; |
(ii) | ensure the legality, validity, enforceability or admissibility in evidence of any Finance Document, Charter Document or Contract; and |
(iii) | carry on its business, where failure to do so has, or is reasonably likely to have, a Material Adverse Effect. |
21.3 | Compliance with laws |
21.3.1 | Each Obligor and each other Group Member will comply in all respects with its Constitutional Documents and all laws and regulations (including Environmental Laws) to which it may be subject. |
21.3.2 | Each Obligor and each other Group Member shall: |
(a) | conduct its business in compliance with applicable anti-corruption laws; and |
(b) | maintain policies and precedents designed to promote and achieve compliance with such laws. |
21.4 | Tax compliance |
21.4.1 | Each Obligor and each other Group Member shall pay and discharge all Taxes imposed upon it or its assets within such time period as may be allowed by law without incurring penalties unless and only to the extent that: |
(a) | such payment is being contested in good faith; |
(b) | adequate reserves are being maintained for those Taxes and the costs required to contest them which have been disclosed in its latest financial statements delivered to the Agent under clause 19.1 (Financial statements); and |
(c) | such payment can be lawfully withheld. |
21.5 | Change of business |
21.6 | Merger |
21.6.1 | Except as approved by the Majority Lenders, no Borrower, will enter into any amalgamation, demerger, merger, consolidation or corporate reconstruction or change its legal name. |
21.6.2 | Except as approved by the Majority Lenders, the Guarantor, will not enter into any amalgamation, demerger, merger, consolidation or corporate reconstruction or change its legal name, unless following such amalgamation, demerger, merger, consolidation or corporate reconstruction or change its legal name, the Guarantor is to remain as the surviving entity. |
21.7 | Further assurance |
21.7.1 | Each Obligor shall promptly do all such acts or execute all such documents (including assignments, transfers, mortgages, charges, notices and instructions) as the Agent may reasonably specify (and in such form as the Agent may reasonably require): |
(a) | to perfect the Security Interests created or intended to be created by that Obligor under or evidenced by the Security Documents (which may include the execution of a mortgage, charge, assignment or other security over all or any of the assets which are, or are intended to be, the subject of the Security Documents) or for the exercise of any rights, powers and remedies of the Security Agent or any other Finance Party provided by or pursuant to the Finance Documents or by law; |
(b) | to confer on the Security Agent and/or any other Finance Party Security Interests over any property and assets of that Obligor located in any jurisdiction equivalent or similar to the Security Interest intended to be conferred by or pursuant to the Security Documents; |
(c) | to facilitate the realisation of the assets which are, or are intended to be, the subject of the Security Documents; and/or |
(d) | to facilitate the accession by a New Lender to any Security Document following an assignment in accordance with clause 32.1 (Assignments and transfers by the Lenders). |
21.7.2 | Each Obligor shall take all such action as is available to it (including making all filings and registrations) as may be necessary for the purpose of the creation, perfection, protection or maintenance of any Security Interest conferred or intended to be conferred on the Security Agent and/or any other Finance Party by or pursuant to the Finance Documents. |
21.8 | Negative pledge in respect of Charged Property or Borrowers' shares |
21.8.1 | Except as approved by the Majority Lenders and for Permitted Maritime Liens, no Obligor will grant or allow to exist any Security Interest over any Charged Property. |
21.8.2 | No Obligor will grant or allow to exist any Security Interest over any of the shares in any of the Borrowers or over any of the rights deriving from or related to such shares. |
21.9 | Environmental matters |
21.9.1 | The Obligors shall notify the Agent as soon as reasonably practicable of any Environmental Claim being made against any Obligor or any Ship which, if successful to any extent, might have a Material Adverse Effect and of any Environmental Incident which may give rise to such a claim and they will keep the Agent regularly and promptly informed in reasonable detail of the nature of, and response to, any such Environmental Incident and the defence to any such claim. |
21.9.2 | The Obligors will procure that all Environmental Laws (and any consents, licences or approvals obtained under them) applicable to Ships will not be violated in a way which might have a Material Adverse Effect. |
21.10 | Maintenance of satisfactory properties and insurances |
21.10.1 | Each Obligor shall maintain in good working order and condition (ordinary wear and tear excepted) all of its assets necessary or desirable in the conduct of its business. |
21.10.2 | Each Obligor shall maintain insurances (in addition to the Insurances required to be maintained under clause 24 (Insurance)) on and in relation to its business and assets against those risks and to the extent as is usual for companies carrying on the same or substantially similar business. |
21.11 | Pari passu |
21.12 | Syndication |
21.13 | Sanctions |
21.13.1 | Each Obligor shall procure that each Group Member: |
(a) | will comply in all respects with Sanctions; |
(b) | will not contribute or otherwise make available the proceeds of the Loan, directly or indirectly, to any person or entity (whether or not related to any Group Member) for the purpose of financing the activities of any person or entity which is currently listed on a Sanctions List or currently located in a Sanctioned Country, to the extent such financing or provision of funds would be prohibited by Sanctions or would otherwise cause any person to be in breach of Sanctions; and |
(c) | shall not fund all or part of any repayment under the Loan out of proceeds directly derived from transactions which would be prohibited by Sanctions or would otherwise cause any person to be in breach of Sanctions. |
21.13.2 | No Obligor nor any other Group Member will be a Designated Person. |
21.14 | Borrowers' own account |
21.15 | Inspection |
21.16 | Bribery and corruption |
21.16.1 | No Obligor shall engage in: |
(a) | Corrupt Practices, Fraudulent Practices, Collusive Practices or Coercive Practices, including the procurement or the execution of any contract for goods or works relating to its functions; |
(b) | Money Laundering or acted in breach of any applicable law relating to Money Laundering; or |
(c) | the Financing of Terrorism. |
21.16.2 | Without prejudice to the generality of clause 21.16.1: |
(a) | no Obligor or other Group Member will directly or indirectly use the proceeds of the Facility for any purpose which would breach the Bribery Act 2010 or the United States Foreign Corrupt Practices Act of 1977; |
(b) | the Obligor shall procure that each Group Member: |
(i) | conducts its businesses in compliance with the Bribery Act 2010 or the United States Foreign Corrupt Practices Act of 1977; and |
(ii) | maintains policies and procedures designed to promote and achieve compliance with such laws. |
21.16.3 | For the purposes of this clause 21.16 and clause 19.9 (Money Laundering), the following definitions shall apply: |
(a) | the conversion or transfer of property, knowing it is derived from a criminal offence, for the purpose of concealing or disguising its illegal origin or of assisting any person who is involved in the commission of the crime to evade the legal consequences of its actions; |
(b) | the concealment or disguise of the true nature, source, location, disposition, movement, rights with respect to, or ownership of, property knowing that it is derived from a criminal offence; or |
(c) | the acquisition, possession or use of property knowing at the time of its receipt that it is derived from a criminal offence. |
21.17 | Use of proceeds |
22 | Dealings with Ships |
22.1 | Ship's name and registration |
(a) | The Ship's name shall only be changed after prior notice of at least 10 Business Days to the Agent. |
(b) | The Ship shall be registered with the relevant Registry under the laws of its Flag State. Except with approval, the Ship shall not be registered under any other flag or at any other port or fly any other flag (other than that of its Flag State). If that registration is for a limited period, it shall be renewed at least 45 days before the date it is due to expire and the Agent shall be notified of that renewal at least 30 days before the date it is due to expire. |
(c) | Nothing will be done and no action will be omitted if that might result in such registration being forfeited or imperilled or the Ship being required to be registered under the laws of another state of registry. |
22.2 | Sale or other disposal of Ship |
22.3 | Manager |
22.4 | Copy of Mortgage on board |
22.5 | Notice of Mortgage |
22.6 | Conveyance on default |
22.7 | Chartering |
22.7.1 | Except with approval by the Majority Lenders, the relevant Owner shall not enter into any charter commitment for the Ship, which is: |
(a) | a bareboat or demise charter; |
(b) | capable of lasting more than 13 months; |
(c) | on terms as to payment or amount of hire which are materially less beneficial to it than the terms which at that time could reasonably be expected to be obtained on the open market for |
(d) | to another Group Member. |
22.7.2 | Without prejudice to the rights of the Finance Parties under clause 21.7.1 above and any other provisions of the Finance Documents, the Borrowers shall advise the Agent promptly of any proposed Charter of a Ship and: |
(a) | forthwith after its execution deliver a certified copy of each such Charter to the Agent; |
(b) | forthwith following demand by the Agent procure that the relevant Owner executes in favour of the Security Agent a Charter Assignment of any such Charter and any notice of assignment required in connection therewith and promptly following the occurrence of an Event of Default, procure the service of any such notice of assignment on the relevant Charterer and procure the acknowledgement of such notice by the relevant Charterer; and |
(c) | pay on demand by the Agent all legal and other costs properly incurred by the Agent or the Security Agent in connection with each such Charter Assignment. |
22.8 | Merchant use |
22.9 | Sharing of Earnings |
22.10 | Payment of Earnings |
22.11 | Lay up |
22.12 | Change of Manager |
(a) | the Borrowers deliver to the Agent a Manager's Undertaking duly executed by DWM to the Security Agent on the date of the change of the Manager together with any notices of assignment of insurances; |
(b) | the Borrowers deliver to the Agent a certified true copy of a duly executed management agreement between the relevant Owner and the Manager in a form acceptable to the Agent in its absolute discretion; |
(c) | the Borrowers have provided the Agent with such documentation and other evidence relating to DWM required by it to enable the Lenders to carry out and be satisfied with all necessary |
(d) | DWM has provided corporate authorities regarding the execution of its management agreement and such new Manager's Undertaking in a form acceptable to the Agent in its absolute discretion, and the Agent has obtained a legal opinion by Cyprus counsel in relation to the execution of the same by DWM. |
23 | Condition and operation of Ships |
23.1 | Defined terms |
23.2 | Repair |
23.3 | Modification |
23.4 | Removal of parts |
23.5 | Third party owned equipment |
23.6 | Maintenance of class; compliance with laws and codes |
23.7 | Surveys |
23.8 | Inspection and notice of drydockings |
23.9 | Prevention of arrest |
23.10 | Release from arrest |
23.11 | Information about Ship |
23.12 | Notification of certain events |
(a) | any damage to the Ship where the cost of the resulting repairs may exceed the Major Casualty Amount for such Ship; |
(b) | any occurrence which may result in the Ship becoming a Total Loss; |
(c) | any requisition of the Ship for hire; |
(d) | any Environmental Incident involving the Ship and Environmental Claim being made in relation to such an incident; |
(e) | any withdrawal or threat to withdraw any applicable operating certificate; |
(f) | the issue of any operating certificate required under any applicable code; |
(g) | the receipt of notification that any application for such a certificate has been refused; |
(h) | any requirement or recommendation made in relation to the Ship by any insurer or the Ship's Classification Society or by any competent authority which is not, or cannot be, complied with in the manner or time required or recommended; and |
(i) | any arrest, hijacking or detention of the Ship or any exercise or purported exercise of a lien or other claim on the Ship or its Earnings or Insurances. |
23.13 | Payment of outgoings |
23.14 | Evidence of payments |
(a) | the wages and allotments and the insurance and pension contributions of the Ship's crew are being promptly and regularly paid; |
(b) | all deductions from its crew's wages in respect of any applicable Tax liability are being properly accounted for; and |
(c) | the Ship's master has no claim for disbursements other than those incurred by him in the ordinary course of trading on the voyage then in progress. |
23.15 | Repairers' liens |
23.16 | Survey report |
23.17 | Lawful use |
(a) | in any way or in any activity which is unlawful under international law or the domestic laws of any relevant country; |
(b) | in carrying illicit or prohibited goods; |
(c) | in a way which may make it liable to be condemned by a prize court or destroyed, seized or confiscated; or |
(d) | if there are hostilities in any part of the world (whether war has been declared or not), in carrying contraband goods |
23.18 | War zones |
24 | Insurance |
24.1 | Insurance terms |
24.2 | Coverage required |
(a) | against (i) fire and usual marine risks (including excess risks) and (ii) war risks (including war protection and indemnity risks and terrorism, piracy and confiscation risks) on an agreed value basis, in each case, for at least its minimum hull cover and no less than its market value; |
(b) | against P&I risks for the highest amount then available in the insurance market for vessels of similar age, size and type as the Ship (but, in relation to liability for oil pollution, for an amount of not less than $1,000,000,000) and a freight demurrage and defence cover; |
(c) | against such other risks and matters which the Agent notifies it that it considers reasonable for a prudent shipowner or operator to insure against at the time of that notice; and |
(d) | on terms which comply with the other provisions of this clause 24. |
24.3 | Placing of cover |
(a) | in the name of the Ship's Owner and any Manager and (in the case of the Ship's hull cover) no other person (other than the Security Agent and any other Finance Party if required by the Agent) (unless such other person is approved and, if so required by the Agent, has duly executed and delivered a first priority assignment of its interest in the Ship's Insurances to the Security Agent or the other Finance Parties in an approved form and provided such supporting documents and opinions in relation to that assignment as the Agent requires); |
(b) | if the Agent so requests, in the joint names of the Ship's Owner and the Security Agent and any other Finance Party (and, to the extent reasonably practicable in the insurance market, without liability on the part of the Security Agent or such other Finance Party for premiums or calls); |
(c) | in dollars or another approved currency; |
(d) | arranged through approved brokers or direct with approved insurers or protection and indemnity or war risks associations; and |
(e) | on approved terms and with approved insurers or associations. |
24.4 | Deductibles |
24.5 | Mortgagee's insurance |
(a) | a mortgagee's interest insurance and a mortgagee's additional perils (all P&I risks) cover for the benefit of the Finance Parties for an aggregate amount up to 120% of the aggregate of (a) the Loan and (b) the Hedging Exposure at such time; and |
(b) | any other insurance cover which the Agent reasonably requires in respect of any Finance Party's interests and potential liabilities (whether as mortgagee of the Ship or beneficiary of the Security Documents). |
24.6 | Fleet liens, set off and cancellations |
(a) | set off against any claims in respect of the Ship any premiums due in respect of any of such other vessels insured (other than other Mortgaged Ships); or |
(b) | cancel that cover because of non-payment of premiums in respect of such other vessels, |
24.7 | Payment of premiums |
24.8 | Details of proposed renewal of Insurances |
24.9 | Instructions for renewal |
24.10 | Confirmation of renewal |
24.11 | P&I guarantees |
24.12 | Insurance documents |
24.13 | Letters of undertaking |
24.14 | Insurance Notices and Loss Payable Clauses |
24.15 | Insurance correspondence |
24.16 | Qualifications and exclusions |
24.17 | Independent report |
24.18 | Collection of claims |
24.19 | Employment of Ship |
24.19.1 | The Ship shall only be employed or operated in conformity with the terms of the Ship's Insurances (including any express or implied warranties) and not in any other way (unless the insurers have consented and any additional requirements of the insurers have been satisfied). |
24.19.2 | The Ship shall not enter or remain in any zone which has been declared a war, conditional or excluded zone by any government entity or the Ship's insurers for war risks and/or allied perils (including piracy) unless: |
(a) | appropriate insurances have been taken out by the relevant Owner; and |
(b) | any requirements of the Agent and/or the Ship's insurers necessary to ensure that the Ship remains properly insured in accordance with the Finance Documents (including any requirement for the payment of extra insurance premiums) have been complied with. |
24.20 | Declarations and returns |
24.21 | Application of recoveries |
24.22 | Settlement of claims |
24.23 | Change in insurance requirements |
25 | Minimum security value |
25.1 | Valuation of assets |
25.2 | Valuation frequency |
25.3 | Expenses of valuation |
(a) | one set of valuations of each Mortgaged Ship made under this clause 25 once per calendar year and any other valuations of each Ship and each Fleet Vessel made and delivered under clause 19.2 (Provision and contents of Compliance Certificate and valuations) (which shall not include the costs and expenses of providing any valuations required under clause 4 (Conditions of Utilisation) which shall also be for the account of the Borrowers); |
(b) | in addition to those referred to in (a) above, any sets of valuations of the Mortgaged Ships carried out at any time when (i) an Event of Default has occurred or (ii) a Mortgaged Ship becomes a Total Loss or is sold or (iii) such valuations show that the Security Value is less than the Minimum Value; and |
(c) | in addition to those referred to in (a) and (b) above, any sets of valuations of the Ships obtained under clause 4 (Conditions of Utilisation) in connection with any Utilisation. |
25.4 | Valuations procedure |
25.5 | Currency of valuation |
25.6 | Basis of valuation |
(a) | without physical inspection (unless required by the Agent) (acting on the instructions of the Majority Lenders); |
(b) | on the basis of a sale for prompt delivery for a price payable in full in cash on delivery at arm's length on normal commercial terms between a willing buyer and a willing seller; and |
(c) | without taking into account the benefit of any charter commitment. |
25.7 | Information required for valuation |
25.8 | Approved Brokers |
25.9 | Appointment of Approved Brokers |
25.10 | Number of valuers |
25.11 | Differences in valuations |
25.12 | Security shortfall |
(a) | provide additional security over other assets approved by the Majority Lenders in accordance with this clause 25 (including in the form of charged and/or pledged dollar cash deposits); and/or |
(b) | prepay part of the Loan under clause 7.4 (Voluntary prepayment). Any such amount prepaid shall be applied in reduction of all outstanding Advances pro rata between them. |
25.13 | Creation of additional security |
(a) | that additional security, its value and the method of its valuation have been approved by the Majority Lenders, it being agreed that cash collateral provided in pledged and/or charged dollar cash deposits or in the form of letters of credit denominated in dollars shall always be acceptable to the Lenders, and shall be valued at par; |
(b) | a Security Interest over that security has been constituted in favour of the Security Agent or (if appropriate) the Finance Parties in an approved form and manner; |
(c) | this Agreement has been unconditionally amended in such manner as the Agent requires in consequence of that additional security being provided; and |
(d) | the Agent, or its duly authorised representative, has received such documents and evidence it may require in relation to that amendment and additional security including documents and evidence of the type referred to in Schedule 3 (Conditions precedent) in relation to that amendment and additional security and its execution and (if applicable) registration. |
26 | Chartering undertakings |
26.1 | Variations |
26.2 | Releases and waivers |
26.3 | Termination by Owner |
26.4 | Charter performance |
26.5 | Notice of assignment |
26.6 | Payment of Charter Earnings |
27 | Bank accounts |
27.1 | Earnings Account |
27.1.1 | Each Owner shall be the holder(s) of one or more Accounts with an Account Bank which is designated as an "Earnings Account" for the purposes of the Finance Documents. |
27.1.2 | The Earnings of the Mortgaged Ships and all moneys payable to each Owner under each Ship's Insurance and any net amount payable to the Borrowers under any Hedging Contract shall be paid by the persons from whom they are due to an Earnings Account unless required to be paid to the Security Agent or any other Finance Parties under the relevant Finance Documents. |
27.1.3 | The relevant Account Holder(s) shall not withdraw amounts standing to the credit of an Earnings Account except as permitted by clause 27.1.4. |
27.1.4 | If there is no continuing Default, the relevant Account Holder(s) may withdraw any amounts from such Earnings Account for the following purposes: |
(a) | payments then due to Finance Parties under the Finance Documents; |
(b) | payments to another Account; |
(c) | payments of the proper costs and expenses of insuring, repairing, operating and maintaining any Mortgaged Ship (including management fees under any Management Agreement); |
(d) | payments of the proper and reasonable expenses of administrating the Borrowers' affairs; |
(e) | payments to purchase other currencies in amounts and at times required to make payments referred to above in the currency in which they are due; and |
(f) | payments of dividends to the extent permitted by clause 28.12 (Distributions and other payments). |
27.2 | Other provisions |
27.2.1 | An Account may only be designated for the purposes described in this clause 27 if: |
(a) | such designation is made in writing by the Agent and acknowledged by the Borrowers and specifies the names and addresses of the relevant Account Bank and the Account Holder(s) and the number and any designation or other reference attributed to the Account; |
(b) | an Account Security has been duly executed and delivered by the relevant Account Holder(s) in favour of the Security Agent or the other Finance Parties; |
(c) | any notice required by the Account Security to be given to an Account Bank has been given to, and acknowledged by, the Account Bank in the form required by the relevant Account Security; and |
(d) | the Agent, or its duly authorised representative, has received such documents and evidence it may require in relation to the Account and the Account Security including documents and evidence of the type referred to in Schedule 3 (Conditions precedent) in relation to the Account and the relevant Account Security. |
27.2.2 | The rates of payment of interest and other terms regulating any Account will be a matter of separate agreement between the relevant Account Holder(s) and Account Bank. If an Account is a fixed term deposit account, the relevant Account Holder(s) may select the terms of deposits until the relevant Account Security has become enforceable and the Security Agent directs otherwise. |
27.2.3 | The relevant Account Holder(s) shall not close any Account or alter the terms of any Account from those in force at the time it is designated for the purposes of this clause 27 or waive any of its rights in relation to an Account except with approval. |
27.2.4 | The relevant Account Holder(s) shall deposit with the Security Agent all certificates of deposit, receipts or other instruments or securities relating to any Account, notify the Security Agent of any claim or notice relating to an Account from any other party and provide the Agent with any other information it may request concerning any Account. |
27.2.5 | Each of the Agent and the Security Agent agrees that if it is an Account Bank in respect of an Account then there will be no restrictions on creating a Security Interest over that Account as contemplated by this Agreement and it shall not (except with the approval of the Majority Lenders) exercise any right of combination, consolidation or set-off which it may have in respect of that Account in a manner adverse to the rights of the other Finance Parties. |
28 | Business restrictions |
28.1 | General negative pledge |
28.1.1 | In this clause 28.1, Quasi-Security means an arrangement or transaction described in clause |
28.1.2 | No Borrower shall permit any Security Interest to exist, arise or be created or extended over all or any part of its assets. |
28.1.3 | (Without prejudice to clauses 28.2 (Financial Indebtedness) and 28.6 (Disposals)), no Borrower shall: |
(a) | sell, transfer or otherwise dispose of any of its assets on terms whereby that asset is or may be leased to, or re-acquired by, any other Group Member other than pursuant to disposals permitted under clause 28.6 (Disposals); |
(b) | sell, transfer, factor or otherwise dispose of any of its receivables on recourse terms (except for the discounting of bills or notes in the ordinary course of business); |
(c) | enter into any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject to a combination of accounts; or |
(d) | enter into any other preferential arrangement having a similar effect, |
28.1.4 | Clauses 28.1.2 and 28.1.3 above do not apply to any Security Interest or (as the case may be) |
(a) | those granted or expressed to be granted by any of the Security Documents; and |
(b) | in relation to a Mortgaged Ship, Permitted Maritime Liens. |
28.2 | Financial Indebtedness |
(a) | Financial Indebtedness incurred under the Finance Documents and Hedging Contracts for Hedging Transactions entered into pursuant to clause 29.1 (Hedging); |
(b) | Financial Indebtedness owed to another Borrower or the Guarantor or any other Group Member or any other Affiliate or shareholder (provided that any such Financial Indebtedness owed by a Borrower is unsecured and subordinated to the Finance Documents and any claims thereunder are assigned to the Finance Parties, in each case on approved terms and by documents in agreed form); |
(c) | Financial Indebtedness owed to trade creditors of an Obligor given in the ordinary course of its business; |
(d) | Financial Indebtedness permitted under clause 28.3 (Guarantees); and |
(e) | Financial Indebtedness permitted under clause 28.4 (Loans and credit). |
28.3 | Guarantees |
(a) | guarantees in favour of its own trade creditors given in the ordinary course of its business; and |
(b) | guarantees which are Financial Indebtedness permitted under clause 28.2 (Financial Indebtedness). |
28.4 | Loans and credit |
(a) | loans or credit to another Borrower or the Guarantor or any other Group Member permitted under clause 28.2 (Financial Indebtedness); and |
(b) | trade credit granted by it to its customers on normal commercial terms in the ordinary course of its trading activities. |
28.5 | Bank accounts and other financial transactions |
(a) | maintain any current or deposit account with a bank or financial institution except for the Accounts and the deposit of money, operation of current accounts and the conduct of electronic banking operations through the Accounts; |
(b) | hold cash in any account other than the Accounts; |
(c) | enter into any obligations under any operating leases relating to assets (for the avoidance of doubt any restrictions on the Borrowers to enter into a charter commitment in respect of the Ships are governed by clause 22.7 (Chartering)); or |
(d) | be party to any banking or financial transaction, whether on or off balance sheet, that is not expressly permitted under this clause 28. |
28.6 | Disposals |
28.6.1 | No Borrower shall enter into a single transaction or a series of transactions, whether related or not and whether voluntarily or involuntarily, to dispose of any asset except for any of the following disposals so long as they are not prohibited by any other provision of the Finance Documents: |
(a) | disposals of assets made in (and on terms reflecting) the ordinary course of trading of the disposing entity; |
(b) | disposals of obsolete assets, or assets which are no longer required for the purpose of the business of the relevant Borrower, in each case for cash on normal commercial terms and on an arm's length basis; |
(c) | disposals permitted by clauses 28.1 (General negative pledge) or 28.2 (Financial Indebtedness) or 22.2 (Sale or other disposal of Ship); |
(d) | dealings with its own trade creditors with respect to book debts in the ordinary course of trading; and |
(e) | the application of cash or cash equivalents in the acquisition of assets or services in the ordinary course of its business. |
28.7 | Contracts and arrangements with Affiliates |
28.8 | Subsidiaries |
28.9 | Acquisitions and investments |
(a) | acquisitions of assets in the ordinary course of business (not being new businesses or vessels); |
(b) | the incurrence of liabilities in the ordinary course of its business; |
(c) | any loan or credit not otherwise prohibited under this Agreement; or |
(d) | pursuant to any Finance Documents, Contracts or Charter Documents to which it is party. |
28.10 | Reduction of capital |
(a) | No Obligor (other than the Guarantor) shall redeem or purchase or otherwise reduce any of its equity or any other share capital or any warrants or any uncalled or unpaid liability in respect of any of them or reduce the amount (if any) for the time being standing to the credit of its share premium account or capital redemption or other undistributable reserve in any manner. |
(b) | The Guarantor shall not redeem or purchase or otherwise reduce any of its equity or any other share capital or any warrants or any uncalled or unpaid liability in respect of any of them or reduce the amount (if any) for the time being standing to the credit of its share premium account or capital redemption or other undistributable reserve in any manner except if (i) no Default is continuing at the time of such redemption, purchase or reduction and (ii) no Default would result from such redemption, purchase or reduction. |
28.11 | Increase in capital |
28.12 | Distributions and other payments |
(a) | declare or pay (including by way of set-off, combination of accounts or otherwise) any dividend or redeem or make any other distribution or payment (whether in cash or in specie), including any interest and/or unpaid dividends, in respect of its equity or any other share capital or any warrants for the time being in issue; or |
(b) | make any payment (including by way of set-off, combination of accounts or otherwise) by way of interest, or repayment, redemption, purchase or other payment, in respect of any shareholder loan, loan stock or similar instrument, |
29 | Hedging Contracts |
29.1 | Hedging |
29.1.1 | If, at any time during the Facility Period, the Borrowers wish to enter into any Treasury Transaction so as to hedge all or any part of their exposure under this Agreement to interest rate fluctuations, they shall advise the Agent in writing. Each of the Borrowers agrees that it shall not enter into a speculative hedging transaction (which would include hedging transactions which are (i) not entered into to hedge a real risk or exposure which the Borrowers or any of them have under this Agreement or (ii) entered into by the Borrowers or any of them for the main purpose of financial losses or gains) under any Treasury Transaction with the Hedging Provider. |
29.1.2 | Any such Treasury Transaction shall be concluded by the Borrowers only, with the Hedging Provider on the terms of the Hedging Master Agreement. |
29.1.3 | If and when any such Treasury Transaction has been concluded, it shall constitute a Hedging Contract for the purposes of the Finance Documents. |
29.2 | Unwinding of Hedging Contracts |
29.3 | Variations |
29.4 | Releases and waivers |
29.5 | Termination of Hedging Contracts by Borrowers |
29.6 | Assignment of Hedging Contracts by the Borrowers |
29.7 | Performance of Hedging Contracts by the Borrowers |
29.8 | Information concerning Hedging Contracts |
30 | Events of Default |
30.1 | Non-payment |
30.2 | Hedging Contracts |
30.2.1 | An Event of Default or Potential Event of Default (in each case as defined in the Hedging Master Agreement) has occurred and is continuing under any Hedging Contract. |
30.2.2 | An Early Termination Date (as defined in the Hedging Master Agreement) has occurred or been or become capable of being effectively designated under any Hedging Contract. |
30.2.3 | A person entitled to do so gives notice of such an Early Termination Date under any Hedging Contract except with approval or as may be required by clause 29.2 (Unwinding of Hedging Contracts). |
30.2.4 | Any Hedging Contract is terminated, cancelled, suspended, rescinded or revoked or otherwise ceases to remain in full force and effect for any reason except with approval or as may be required by clause 29.2 (Unwinding of Hedging Contracts). |
30.3 | Financial covenants and Sanctions |
30.4 | Value of security |
30.5 | Insurance |
30.5.1 | The Insurances of a Mortgaged Ship are not placed and kept in force in the manner required by clause 24 (Insurance). |
30.5.2 | Any insurer either: |
(a) | cancels any such Insurances; or |
(b) | disclaims liability under them by reason of any mis-statement or failure or default by any person. |
30.6 | Other obligations |
30.6.1 | An Obligor does not comply with any provision of the Finance Documents (other than those referred to in clauses 30.1 (Non-payment), 30.2 (Hedging Contracts), 30.3 (Financial covenants and Sanctions), 30.4 (Value of security), 30.5 (Insurance) and any other provision of this clause 30). |
30.6.2 | No Event of Default under clause 30.6.1 above will occur if the Agent (acting on the instructions of the Majority Lenders) considers that the failure to comply is capable of remedy and the failure is remedied within ten (10) Business Days of the Agent giving notice to the Borrowers. |
30.7 | Misrepresentation |
30.8 | Cross default |
30.8.1 | Any Financial Indebtedness of any Group Member is not paid when due nor within any originally applicable grace period. |
30.8.2 | Any Financial Indebtedness of any Group Member is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described). |
30.8.3 | Any commitment for any Financial Indebtedness of any Group Member is cancelled or suspended by a creditor of that Group Member as a result of an event of default (however described). |
30.8.4 | The counterparty to a Treasury Transaction entered into by any Group Member becomes entitled to terminate that Treasury Transaction early by reason of an event of default (however described). |
30.8.5 | Any creditor of any Group Member becomes entitled to declare any Financial Indebtedness of that Group Member due and payable prior to its specified maturity as a result of an event of default (however described). |
30.8.6 | No Event of Default will occur under this clause 30.8 if the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness falling within clauses 30.8.1 to 30.8.5 above in relation to any Group Member is less than $10,000,000 (or its equivalent in any other currency or currencies). |
30.9 | Insolvency |
30.9.1 | A Group Member is unable or admits inability to pay its debts as they fall due, is deemed to, or is declared to, be unable to pay its debts under applicable law, suspends making payments on any of its debts or, by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors with a view to rescheduling any of its indebtedness. |
30.9.2 | The value of the assets of the Guarantor is less than its liabilities (taking into account contingent and prospective liabilities). |
30.9.3 | A moratorium is declared in respect of any indebtedness of any Group Member. If a moratorium occurs, the ending of the moratorium will not remedy any Event of Default caused by that moratorium. |
30.10 | Insolvency proceedings |
30.10.1 | Any corporate action, legal proceedings or other procedure or step is taken in relation to: |
(a) | the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of any Group Member (other than a solvent liquidation or reorganisation of any Group Member which is not an Obligor); |
(b) | a composition, compromise, assignment or arrangement with any creditor of any Group Member; |
(c) | the appointment of a liquidator (other than in respect of a solvent liquidation of a Group Member which is not an Obligor), receiver, administrator, administrative receiver, compulsory manager or other similar officer in respect of any Group Member or any of its assets (including the directors of any Group Member requesting a person to appoint any such officer in relation to it or any of its assets); or |
(d) | enforcement of any Security Interest over any assets of any Group Member, |
30.10.2 | Clause 30.10.1 shall not apply to any winding-up petition (or analogous procedure or step) which is frivolous or vexatious and is discharged, stayed or dismissed within seven days of commencement or, if earlier, the date on which it is advertised. |
30.11 | Creditors' process |
30.11.1 | Any expropriation, attachment, sequestration, distress, execution or analogous process affects any asset or assets of any Group Member having an aggregate value in excess of $1,000,000 and is not discharged within seven (7) days. |
30.11.2 | Any judgment or order having an aggregate value for an amount in excess of $1,000,000 is made against any Group Member and is not stayed or complied with within seven (7) days. |
30.12 | Unlawfulness and invalidity |
30.12.1 | It is or becomes unlawful for an Obligor to perform any of its obligations under the Finance Documents or any Security Interest created or expressed to be created or evidenced by the Security Documents ceases to be effective. |
30.12.2 | Any obligation or obligations of any Obligor under any Finance Documents are not (subject to the Legal Reservations) or cease to be legal, valid, binding or enforceable and the cessation individually or cumulatively materially and adversely affects the interests of the Lenders under the Finance Documents. |
30.12.3 | Any Finance Document or any Security Interest created or expressed to be created or evidenced by the Security Documents ceases to be in full force and effect or is alleged by a party to it (other than a Finance Party) to be ineffective for any reason. |
30.12.4 | Any Security Document does not create legal, valid, binding and enforceable security over the assets charged under that Security Document or the ranking or priority of such security is adversely affected. |
30.13 | Cessation of business |
30.14 | Expropriation |
30.15 | Repudiation and rescission of Finance Documents |
30.16 | Litigation |
30.17 | Material Adverse Effect |
30.18 | Security enforceable |
30.19 | Arrest of Ship |
30.20 | Ship registration |
30.21 | Political risk |
30.22 | Breach of Ministerial Decision |
30.23 | Acceleration |
(a) | cancel the Total Commitments at which time they shall immediately be cancelled; and/or |
(b) | declare that all or part of the Loan, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents be immediately due and payable, at which time they shall become immediately due and payable; and/or |
(c) | declare that all or part of the Loan be payable on demand, at which time it shall immediately become payable on demand by the Agent on the instructions of the Majority Lenders; and/or |
(d) | declare that no withdrawals be made from any Account; and/or |
(e) | exercise or direct the Security Agent and/or any other beneficiary of the Security Documents to exercise any or all of its rights, remedies, powers or discretions under the Finance Documents. |
31 | Position of Hedging Provider |
31.1 | Rights of Hedging Provider |
31.2 | No voting rights |
31.3 | Acceleration and enforcement of security |
31.4 | Close out of Hedging Contracts |
31.4.1 | The Parties agree that at any time on and after any Event of Default the Agent (acting on the instructions of the Majority Lenders) shall be entitled, by notice in writing to a Hedging Provider, to instruct such Hedging Provider to terminate and close out any Hedging Transactions (or part thereof) with the Hedging Provider. The Hedging Provider will terminate and close out the relevant Hedging Transactions (or parts thereof) and/or the relevant Hedging Contracts in accordance with such notice immediately upon receipt of such notice. |
31.4.2 | The Hedging Provider shall not be entitled to terminate or close out any Hedging Contract or any Hedging Transaction under it prior to its stated maturity except: |
(a) | in accordance with a notice served by the Agent under clause 31.4.1; or |
(b) | if the Borrowers have not paid amounts due under the Hedging Contract and such amounts remain unpaid for a period of 30 days after the due date for payment and the Agent (acting on the instructions of the Majority Lenders) consents to such termination or close out; or |
(c) | if the Agent takes any action under clause 30.23 (Acceleration); or |
(d) | if the Loan and other amounts outstanding under the Finance Documents (other than amounts outstanding under the Hedging Contracts) have been repaid by the Borrowers in full. |
31.4.3 | If there is a net amount payable to any Borrower under a Hedging Transaction or a Hedging Contract upon its termination and close out, the Hedging Provider shall forthwith pay that net amount (together with interest earned on such amount) to the Security Agent for application in accordance with clause 34.24 (Order of application). |
32 | Changes to the Lenders |
32.1 | Assignments and transfers by the Lenders |
32.2 | Conditions of assignment or transfer |
32.2.1 | The consent of the Borrowers is required for an assignment or transfer by an Existing Lender, unless the assignment or transfer is: |
(a) | to another Lender or an Affiliate of a Lender; or |
(b) | made at a time when an Event of Default is continuing. |
32.2.2 | The consent of the Borrowers to an assignment or transfer must not be unreasonably withheld or delayed. The Borrowers will be deemed to have given their consent 5 days after the Existing Lender or the Agent has requested it unless consent is expressly refused by the Borrowers within that time. |
32.2.3 | The consent of the Agent shall also be required for an assignment by a Lender (such consent not to be unreasonably withheld or delayed). |
32.2.4 | An assignment will only be effective: |
(a) | on receipt by the Agent of written confirmation from the New Lender (in form and substance satisfactory to the Agent) that the New Lender will assume the same obligations to the Borrowers and the other Finance Parties as it would have been under if it was an Original Lender; |
(b) | on the New Lender entering into any documentation required for it to accede as a party to any Security Document to which the Original Lender is a party in its capacity as a Lender and, in relation to such Security Documents, completing any filing, registration or notice requirements; |
(c) | if an assignment takes effect after there has been a Utilisation, the assignment of an Existing Lender's participation in each Utilisation under the Facility shall take effect in respect of the same fraction of each such Utilisation; |
(d) | if the aggregate amount of the Commitment and participation in the Loan which are the subject of the assignment is more than $10,000,000 (or such other amount as the Agent and the Borrowers may agree); |
(e) | on the New Lender having submitted to the Agent all necessary "know your customer" information and documentation and the performance by the Agent of all "know your customer" or other checks under all applicable laws and regulations relating to any person that it is required to carry out in relation to such assignment to a New Lender, the completion of which the Agent shall promptly notify to the Existing Lender and the New Lender; and |
(f) | if that Existing Lender assigns equal fractions of its Commitment and participation in the Loan and each Utilisation (if any) under the Facility. |
32.2.5 | Each New Lender, by executing the relevant Transfer Certificate, confirms, for the avoidance of doubt, that the Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with the Finance Documents on or prior to the date on which the assignment and/or transfer becomes effective in accordance with the Finance Documents and that it is bound by that decision to the same extent as the Existing Lender would have been had it remained a Lender. |
32.3 | Fee and expenses |
32.3.1 | The New Lender shall, on the date upon which an assignment takes effect, pay to the Agent (for its own account) a fee of $3,500 and shall, promptly on demand, pay the Agent and the Security Agent the amount of: |
(a) | all costs and expenses (including legal fees) reasonably incurred by the Agent or the Security Agent in connection with any such assignment; and |
(b) | any cost, loss or liability the Agent or the Security Agent incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of any such assignment. |
32.4 | Costs and expenses relating to security |
32.4.1 | The New Lender shall, promptly on demand, pay to the Agent and the Security Agent the amount of: |
(a) | all costs and expenses (including legal fees) reasonably incurred by the Agent or the Security Agent to facilitate the accession by the New Lender to, or assignment or transfer to the New Lender of, any Finance Document and/or the benefit of any Finance Document and any appropriate registration of any such accession or assignment or transfer; and |
(b) | any cost, loss or liability the Agent or the Security Agent incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of any such accession, assignment or transfer. |
32.5 | Limitation of responsibility of Existing Lenders |
32.5.1 | Unless expressly agreed to the contrary, an Existing Lender makes no representation or warranty and assumes no responsibility to a New Lender for: |
(a) | the legality, validity, effectiveness, adequacy or enforceability of the Finance Documents or any other documents; |
(b) | the financial condition of any Obligor; |
(c) | the performance and observance by any Obligor or any other person of its obligations under the Finance Documents or any other documents; |
(d) | the application of any Basel II Regulation or any Basel Ill Regulation to the transactions contemplated by the Finance Documents; or |
(e) | the accuracy of any statements (whether written or oral) made in or in connection with any Finance Document or any other document, and any representations or warranties implied by law are excluded. |
32.5.2 | Each New Lender confirms to the Existing Lender and the other Finance Parties that it: |
(a) | has made (and shall continue to make) its own independent investigation and assessment of: |
(i) | the financial condition and affairs of the Obligors and their related entities in connection with its participation in this Agreement; and |
(ii) | the application of any Basel II Regulation or any Basel III Regulation to the transactions contemplated by the Finance Documents; and has not relied exclusively on any information provided to it by the Existing Lender or any other Finance Party in connection with any Finance Document; |
(b) | will continue to make its own independent appraisal of the application of any Basel II Regulation or Basel III Regulation to the transactions contemplated by the Finance Documents; and |
(c) | will continue to make its own independent appraisal of the creditworthiness of each Obligor and its related entities whilst any amount is or may be outstanding under the Finance Documents or any Commitment is in force. |
32.5.3 | Nothing in any Finance Document obliges an Existing Lender to: |
(a) | accept a re-assignment from a New Lender of any of the rights assigned under this clause 32; or |
(b) | support any losses directly or indirectly incurred by the New Lender by reason of the non-performance by any Obligor of its obligations under the Finance Documents or by reason of the application of any Basel II Regulation or Basel III Regulation to the transactions contemplated by the Finance Documents or otherwise. |
32.6 | Procedure for transfer |
32.6.1 | Subject to the conditions set out in clause 32.2 (Conditions of assignment) an assignment may be effected in accordance with clause 32.6.4 below when (a) the Agent executes an otherwise duly completed Transfer Certificate and (b) the Agent executes any document required under clause 32.2.3 which it may be necessary for it to execute in each case delivered to it by the Existing Lender and the New Lender duly executed by them and, in the case of any such other document, any other relevant person. The Agent shall, as soon as reasonably practicable after receipt by it of a Transfer Certificate and any such other document each duly completed, appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Transfer Certificate and such other document. |
32.6.2 | The Agent shall only be obliged to execute a Transfer Certificate delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to the assignment to such New Lender. |
32.6.3 | For the avoidance of doubt, the Obligors and the other Finance Parties irrevocably authorise the Agent to execute any Transfer Certificate on their behalf without any consultations with them. |
32.6.4 | Subject to clause 32.9 (Pro rata interest settlement), on the Transfer Date: |
32.6.5 | the Existing Lender will assign absolutely to the New Lender the rights under the Finance Documents expressed to be the subject of the assignment in the Transfer Certificate; |
32.6.6 | the Existing Lender will be released by each Obligor and the other Finance Parties from the obligations owed by it (the Relevant Obligations ) and expressed to be the subject of the release in the Transfer Certificate (but the obligations owed by the Obligors under the Finance Documents shall not be released); and |
32.6.7 | the New Lender shall become a Party to the Finance Documents as a "Lender" for the purposes of all the Finance Documents and will be bound by obligations equivalent to the Relevant Obligations. |
32.6.8 | Lenders may utilise procedures other than those set out in this clause 32.6 (Procedure for transfer) to assign their rights under the Finance Documents (but not, without the consent of the relevant Obligor or unless in accordance with clause 32.6 (Procedure for transfer) to obtain a release by that Obligor from the obligations owed to that Obligor by the Lenders or the assumption of equivalent obligations by a New Lender) provided that they comply with the conditions set out in clause 32.2 (Conditions of assignment). |
32.7 | Copy of Transfer Certificate to Borrowers |
32.8 | 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, except that no such charge, assignment or Security Interest shall: |
(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 an Obligor other than or in excess of, 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. |
32.9 | Pro rata interest settlement |
32.9.1 | any interest or fees in respect of the relevant participation which are expressed to accrue by reference to the lapse of time shall continue to accrue in favour of the Existing Lender up to but excluding the Transfer Date (Accrued Amounts ) and shall become due and payable to the Existing Lender (without further interest accruing on them) on the last day of the current Interest Period (or, if the Interest Period is longer than six months, on the next of the dates which falls at six monthly intervals after the first day of that Interest Period); and |
32.9.2 | the rights assigned or transferred by the Existing Lender will not include the right to the Accrued Amounts, so that, for the avoidance of doubt: |
(a) | when the Accrued Amounts become payable, those Accrued Amounts will be payable to the Existing Lender; and |
(b) | the amount payable to the New Lender on that date will be the amount which would, but for the application of this clause 32.9, have been payable to it on that date, but after deduction of the Accrued Amounts. |
33 | Changes to the Obligors/Restriction on Debt Purchase Transactions |
33.1 | Changes to the Obligors |
33.2 | Prohibition on Debt Purchase Transactions by the Group |
33.2.1 | The Obligors shall not, and the Guarantor shall procure that each Group Member shall not, enter into any Debt Purchase Transaction or be a Lender or beneficially own all or any part of the share capital of a company that is a Lender or a party to a Debt Purchase Transaction of the type referred to in paragraphs (b) or (c) of the definition of Debt Purchase Transaction. |
33.2.2 | For so long as a Guarantor Affiliate (i) beneficially owns a Commitment or (ii) has entered into a sub-participation agreement relating to a Commitment or other agreement or arrangement having a substantially similar economic effect and such agreement or arrangement has not been terminated: |
(a) | in ascertaining the Majority Lenders or whether any given percentage (including, for the avoidance of doubt, unanimity) of the Total Commitments has been obtained to approve any request for a consent, waiver, amendment or other vote under the Finance Documents, such Commitment shall be deemed to be zero; and |
(b) | for the purposes of clause 43.2 (Exceptions), such Guarantor Affiliate or the person with whom it has entered into such sub-participation, other agreement or arrangement shall be deemed not to be a Lender (unless, in the case of a person not being a Guarantor Affiliate, it is a Lender by virtue otherwise than by beneficially owning the relevant Commitment). |
33.2.3 | Each Lender shall, unless such Debt Purchase Transaction is an assignment or transfer, promptly notify the Agent in writing if it knowingly enters into a Debt Purchase Transaction with a Guarantor Affiliate (a Notifiable Debt Purchase Transaction ) , such notification to be substantially in the form set out in Part 1 of Schedule 8 (Forms of Notifiable Debt Purchase Transaction Notice). |
33.2.4 | A Lender shall promptly notify the Agent if a Notifiable Debt Purchase Transaction to which it is a party: |
(a) | is terminated; or |
(b) | ceases to be with a Guarantor Affiliate, such notification to be substantially in the form set out in Part 2 of Schedule 8 (Forms of Notifiable Debt Purchase Transaction Notice). |
33.2.5 | Each Guarantor Affiliate that is a Lender agrees that: |
(a) | in relation to any meeting or conference call to which all the Lenders are invited to attend or participate, it shall not attend or participate in the same if so requested by the Agent or, unless the Agent otherwise agrees, be entitled to receive the agenda or any minutes of the same; and |
(b) | in its capacity as Lender, unless the Agent otherwise agrees, it shall not be entitled to receive any report or other document prepared at the behest of, or on the instructions of, the Agent or one or more of the Lenders. |
34 | Roles of Agent, Security Agent and Arranger |
34.1 | Appointment of the Agent |
34.1.1 | Each other Finance Party (other than the Security Agent) appoints the Agent to act as its agent under and in connection with the Finance Documents. |
34.1.2 | Each such other Finance Party (other than the Security Agent) authorises the Agent: |
(a) | to perform the duties, obligations and responsibilities and o exercise the rights, powers, authorities and discretions specifically given to the Agent under or in connection with the Finance Documents together with any other incidental rights, powers, authorities and discretions; and |
(b) | to execute each of the Security Documents and all other documents that may be approved by the Majority Lenders for execution by it. |
34.2 | Instructions to Agent |
34.2.1 | The Agent shall: |
(a) | unless a contrary indication appears in a Finance Document, exercise or refrain from exercising any right, power, authority or discretion vested in it as Agent in accordance with any instructions given to it by: |
(i) | all Lenders if the relevant Finance Document stipulates the matter is an all Lender decision; and |
(ii) | in all other cases, the Majority Lenders; and |
(b) | not be liable for any act (or omission) if it acts (or refrains from acting) in accordance with paragraph (a) above. |
34.2.2 | The Agent shall be entitled to request instructions, or clarification of any instruction, from the Majority Lenders (or, if the relevant Finance Document stipulates the matter is a decision for any other Lender or group of Lenders, from that Lender or group of Lenders) as to whether, and in what manner, it should exercise or refrain from exercising any right, power, authority or discretion and the Agent may refrain from acting unless and until it receives those instructions or that clarification. |
34.2.3 | Save in the case of decisions stipulated to be a matter for any other Lender or group of Lenders under the relevant Finance Document and unless a contrary indication appears in a Finance Document, any instructions given to the Agent by the Majority Lenders shall override any conflicting instructions given by any other Parties and will be binding on all Finance Parties. |
34.2.4 | The Agent may refrain from acting in accordance with any instructions of any Lender or group of Lenders until it has received any indemnification and/or security that it may in its discretion require (which may be greater in extent than that contained in the Finance Documents and which may include payment in advance) for any cost, loss or liability which it may incur in complying with those instructions. |
34.2.5 | In the absence of instructions, the Agent may act (or refrain from acting) as it considers to be in the best interest of the Lenders. |
34.2.6 | The Agent is not authorised to act on behalf of a Lender or the Hedging Provider (without first obtaining that Lender's or the Hedging Provider's consent) in any legal or arbitration proceedings relating to any Finance Document. This clause 34.2.6 shall not apply to any legal |
34.3 | Duties of the Agent |
34.3.1 | The Agent's duties under the Finance Documents are solely mechanical and administrative in nature. |
34.3.2 | The Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Agent for that Party by any other Party. |
34.3.3 | Without prejudice to clause 32.7 (Copy of Transfer Certificate to Borrowers), clause 34.3.2 shall not apply to any Transfer Certificate. |
34.3.4 | Except where a Finance Document specifically provides otherwise, the Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party. |
34.3.5 | If the Agent receives notice from a Party referring to this Agreement, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the other Finance Parties. |
34.3.6 | If the Agent is aware of the non-payment of any principal, interest, commitment commission or other fee payable to a Finance Party (other than the Agent or an Arranger or the Security Agent for their own account) under this Agreement it shall promptly notify the other Finance Parties. |
34.3.7 | The Agent shall have only those duties, obligations and responsibilities expressly specified in the Finance Documents to which it is expressed to be a party (and no others shall be implied). |
34.4 | Role of the Arranger |
34.5 | No fiduciary duties |
34.5.1 | Nothing in this Agreement constitutes the Agent or the Arranger as a trustee or fiduciary of any other person. |
34.5.2 | None of the Agent, the Security Agent or the Arranger shall be bound to account to any Lender or the Hedging Provider for any sum or the profit element of any sum received by it for its own account or have any obligations to the other Finance Parties beyond those expressly stated in the Finance Documents. |
34.6 | Business with the Group |
34.7 | Rights and discretions of the Agent |
34.7.1 | The Agent may: |
(a) | rely on any representation, communication, notice or document (including, without limitation, any notice given by a Lender pursuant to clauses 33.2.3 and 33.2.4 (Disenfranchisement on Debt Purchase Transactions entered into by Guarantor Affiliates)) believed by it to be genuine, correct and appropriately authorised; |
(b) | assume that: |
(i) | any instructions received by it from the Majority Lenders, any Lenders or any group of Lenders are duly given in accordance with the terms of the Finance Documents; and |
(ii) | unless it has received notice of revocation, that those instructions have not been revoked; and |
(c) | rely on a certificate from any person: |
(i) | as to any matter of fact or circumstance which might reasonably be expected to be within the knowledge of that person; or |
(ii) | to the effect that such person approves of any particular dealing, transaction, step, action or thing, |
34.7.2 | The Agent may assume (unless it has received notice to the contrary in its capacity as agent for the other Finance Parties) that: |
(a) | no Default has occurred (unless it has actual knowledge of a Default arising under clause 30.1 (Non-payment)); |
(b) | any right, power, authority or discretion vested in any Party or the Majority Lenders has not been exercised; |
(c) | any notice or request made by a Borrower (other than a Utilisation Request or Selection Notice) is made on behalf of and with the consent and knowledge of all the Obligors; and |
(d) | no Notifiable Debt Purchase Transaction: |
(i) | has been entered into; |
(ii) | has been terminated; or |
(iii) | has ceased to be with a Guarantor Affiliate. |
34.7.3 | The Agent may engage, and pay for the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts in the conduct of its obligations and responsibilities under the Finance Documents. |
34.7.4 | Without prejudice to the generality of clause 34.7.3 or clause 34.7.5, the Agent may at any time engage and pay for the services of any lawyers to act as independent counsel to the Agent (and so separate from any lawyers instructed by the Lenders) if the Agent in its reasonable opinion deems this to be desirable. |
34.7.5 | The Agent may rely on the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts (whether obtained by the Agent or by any other Party) and shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of its so relying. |
34.7.6 | The Agent may act in relation to the Finance Documents through its officers, employees and agents and the Agent shall not: |
(a) | be liable for any error of judgment made by any such person; or |
(b) | be bound to supervise, or be in any way responsible for any loss incurred by reason of misconduct, omission or default on the part, of any such person, unless such error or such loss was directly caused by the Agent's gross negligence or wilful default. |
34.7.7 | Unless a Finance Document expressly provides otherwise, the Agent may disclose to any other Party any information it reasonably believes it has received as agent under this Agreement. |
34.7.8 | Notwithstanding any other provision of any Finance Document to the contrary, neither the Agent, nor the Arranger is obliged to do or omit to do anything if it would or might in its reasonable opinion constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality. The Agent and the Arranger may do anything which in its opinion, is necessary or desirable to comply with any law or regulation of any jurisdiction. |
34.7.9 | Without prejudice to the generality of clause 34.7.7, the Agent may disclose the identity of a Defaulting Lender to the other Finance Parties and the Borrowers and shall disclose the same upon the written request of the Majority Lenders. |
34.7.10 | Notwithstanding any provision of any Finance Document to the contrary, the Agent is not obliged to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties, obligations or responsibilities or the exercise of any right, power, authority or discretion if it has grounds for believing the repayment of such funds or adequate indemnity against, or security for, such risk or liability is not reasonably assured to it. |
34.7.11 | Neither the Agent nor the Arranger shall be obliged to request any certificate, opinion or other information under clause 19 (Information undertakings) unless so required in writing by a Lender or the Hedging Provider, in which case the Agent shall promptly make the appropriate request of the Borrowers if such request would be in accordance with the terms of this Agreement. |
34.8 | Responsibility for documentation and other matters |
(a) | the adequacy, accuracy and/or completeness of any information (whether oral or written) supplied by the Agent, the Arranger, an Obligor or any other person given in or in connection with any Finance Document or the transactions contemplated in the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document or of any representations in any Finance Document or of any copy of any document delivered under any Finance Document; |
(b) | the legality, validity, effectiveness, adequacy or enforceability of any Finance Document, or any Charter Document or any Contract or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document, any Charter Document or any Contract; |
(c) | the application of any Basel II Regulation or Basel Ill Regulation to the transactions contemplated by the Finance Documents; |
(d) | any loss to the Trust Property arising in consequence of the failure, depreciation or loss of any Charged Property or any investments made or retained in good faith or by reason of any other matter or thing; |
(e) | accounting to any person for any sum or the profit element of any sum received by it for its own account; |
(f) | the failure of any Obligor or any other party to perform its obligations under any Finance Document, any Charter Document or any Contract or the financial condition of any such person; |
(g) | ascertaining whether all deeds and documents which should have been deposited with it (or the Security Agent and/or any other beneficiary of a Security Document) under or pursuant to any of the Security Documents have been so deposited; |
(h) | investigating or making any enquiry into the title of any Obligor to any of the Charged Property or any of its other property or assets; |
(i) | failing to register any of the Security Documents with the Registrar of Companies or any other public office; |
(j) | failing to register any of the Security Documents in accordance with the provisions of the documents of title of any Obligor to any of the Charged Property; |
(k) | failing to take or require any Obligor to take any steps to render any of the Security Documents effective as regards property or assets outside England or Wales or to secure the creation of any ancillary charge under the laws of the jurisdiction concerned; |
(I) | (unless it is the same entity as the Security Agent) the failure of the Security Agent and/or any other beneficiary of a Security Document failing to perform or discharge any of its duties or obligations under the Security Documents; |
(m) | any determination as to whether any information provided or to be provided to any Finance Party is non-public information the use of which may be regulated or prohibited by any applicable law or regulation relating to insider dealing or otherwise; |
(n) | making any investigation in respect of or in any way be liable whatsoever for the existence, accuracy or sufficiency of any legal or other opinions, reports, certificates or investigations delivered or obtained or required to be delivered or obtained at any time in connection herewith; |
(o) | any unsuitability, inadequacy or unfitness of any Charged Property as security for the Loan and shall not be obliged to make any investigation into, and shall be entitled to assume, the suitability, adequacy and fitness of the Charged Property as security for the Loan; or |
(p) | any damage to or any unauthorised dealing with the Charged Property nor shall it have any responsibility or liability arising from the fact that the Charged Property, or documents relating thereto, may be registered in its name or held by it or any other bank or agent selected by the Agent or the Security Agent. |
34.9 | No duty to monitor |
(a) | whether or not any Default has occurred; |
(b) | as to the performance, default or any breach by any Party of its obligations under any Finance Document; or |
(c) | whether any other event specified in any Finance Document has occurred. |
34.10 | Exclusion of liability |
34.10.1 | Without limiting clause 34.10.2 (and without prejudice to any other provision of the Finance Documents excluding or limiting the liability of the Agent) the Agent will not be liable (including, without limitation, for negligence or any other category of liability whatsoever) for: |
(a) | any damages, costs or losses to any person, any diminution in value, or any liability whatsoever arising as a result of taking or not taking any action under or in connection with any Finance Document or the Charged Property, unless directly caused by its gross negligence or wilful default. For the avoidance of doubt and notwithstanding anything contained in the Finance Documents, the Agent shall not in any event be liable for any indirect or consequential loss (including, without limitation, loss of profit, business or goodwill) regardless of whether it was informed of the likelihood of such loss and irrespective of whether any such claim is made for breach of contract, in tort or otherwise; |
(b) | exercising, or not exercising, any right, power, authority or discretion given to it by, or in connection with, any Finance Document, the Charged Property or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, any Finance Document or the Charged Property, unless directly caused by the gross negligence or wilful default of the Agent and in the course of the exercise or non-exercise by it of any right, power, authority or discretion given to it expressly under a Finance Document; or |
(c) | without prejudice to the generality of paragraphs (a) and (b) above, any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of: |
(d) | any act, event or circumstance not reasonably within its control; or |
(e) | the general risks of investment in, or the holding of assets in, any jurisdiction, |
34.10.2 | No Party (other than the Agent) may take any proceedings against any officer, employee or agent of the Agent in respect of any claim it might have against the Agent or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Finance Document and any officer, employee or agent of the Agent may rely on this clause 34.10 subject to clause 1.3 (Third party rights) and the provisions of the Third Parties Act. |
34.10.3 | The Agent will not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by the Agent if the Agent has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by the Agent for that purpose. |
34.10.4 | Nothing in this Agreement shall oblige the Agent or the Arranger to carry out: |
(a) | any "know your customer" or other checks in relation to any person; or |
(b) | any check on the extent to which any transaction contemplated by this Agreement might be unlawful for any Lender, |
34.10.5 | Without prejudice to any provision of any Finance Document excluding or limiting the Agent's liability, any liability of the Agent arising under or in connection with any Finance Document or the Charged Property shall be limited to the amount of actual loss which has been finally |
34.11 | Lenders' indemnity to the Agent |
34.11.1 | Each Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments are then zero, to its share of the Total Commitments immediately prior to their reduction to zero) indemnify the Agent, within three Business Days of demand, against: |
(a) | any Losses for negligence or any other category of liability whatsoever incurred by the Agent in the circumstances contemplated pursuant to clause 37.11 (Disruption to payment systems etc.) notwithstanding the Agent's negligence, gross negligence, or any other category of liability whatsoever but not including any claim based on the fraud of the Agent); and |
(b) | any other Losses (otherwise than by reason of the Agent's gross negligence or wilful default) including the costs of any person engaged in accordance with clause 34.7 (Rights and discretions of the Agent) and any Receiver in acting as its agent under the Finance Documents, |
34.11.2 | Subject to clause 34.11.3, the Borrowers shall immediately on demand reimburse any Lender for any payment that Lender makes to the Agent pursuant to clause 34.11.1. |
34.11.3 | Clause 34.11.2 shall not apply to the extent that the indemnity payment in respect of which the Lender claims reimbursement relates to a liability of the Agent to an Obligor. |
34.12 | Resignation of the Agent |
34.12.1 | The Agent may resign without giving any reason therefor and appoint one of its Affiliates as successor by giving notice to the Lenders, the Hedging Provider, the Security Agent and the Borrowers. |
34.12.2 | Alternatively the Agent may resign without giving any reason therefor by giving 30 days notice to the other Finance Parties and the Borrowers, in which case the Majority Lenders (after consultation with the Borrowers) may appoint a successor Agent. |
34.12.3 | If the Majority Lenders have not appointed a successor Agent in accordance with clause |
34.12.2 | above within 20 days after notice of resignation was given, the retiring Agent (after consultation with the Borrowers) may appoint a successor Agent. |
34.12.4 | If the Agent wishes to resign because (acting reasonably) it has concluded that it is no longer appropriate for it to remain as agent and the Agent is entitled to appoint a successor Agent under clause 34.12.3, the Agent may (if it concludes (acting reasonably) that it is necessary to do so in order to persuade the proposed successor Agent to become a party to this Agreement as Agent) agree with the proposed successor Agent amendments to this clause 34 and any |
34.12.5 | The retiring Agent shall, either at the Lenders' expense if it has been required to resign pursuant to clause 34.13 (Replacement of the Agent) or otherwise at its own cost, make available to the successor Agent such documents and records and provide such assistance as the successor Agent may reasonably request for the purposes of performing its functions as Agent under the Finance Documents. The Borrowers shall, within three Business Days of demand, reimburse the retiring Agent for the amount of all costs and expenses (including legal fees) properly incurred by it in making available such documents and records and providing such assistance, |
34.12.6 | The Agent's resignation notice shall only take effect upon the appointment of a successor but where the Agent has indicated that it wishes to resign but no successor has been appointed it shall not, unless it otherwise agrees, be obliged to carry out any further agency function under this Agreement. |
34.12.7 | The appointment of the successor Agent shall take effect on the date specified in the notice from the Majority Lenders to the retiring Agent. As from this date, the retiring Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under clause 34.12.5) but shall remain entitled to the benefit of clause 14.4 (Indemnity to the Agent and the Security Agent) and this clause 34 (and any agency fees for the account of the retiring Agent shall cease to accrue from (and shall be payable on) that date). Any successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party. |
34.12.8 | Notwithstanding any other provision of any Finance Document to the contrary, none of the Agent or the Arranger is obliged to do or omit to do anything if it would or might in its reasonable opinion constitute a breach of any Sanctions, law or regulation or a breach of a fiduciary duty or duty of confidentiality. |
34.13 | Replacement of the Agent |
34.13.1 | After consultation with the Borrowers, the Majority Lenders may, by giving 30 days' notice to the Agent replace the Agent by appointing a successor Agent. |
34.13.2 | The retiring Agent shall make available to the successor Agent such documents and records and provide such assistance as the successor Agent may reasonably request for the purposes of performing its functions as Agent under the Finance Documents. |
34.13.3 | The appointment of the successor Agent shall take effect on the date specified in the notice from the Majority Lenders to the retiring Agent. As from this date, the retiring Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under clause 34.13.2) but shall remain entitled to the benefit of clause 14.4 (Indemnity to the Agent and the Security Agent) and this clause 34 (and any agency fees for the account of the retiring Agent shall cease to accrue from (and shall be payable on) that date). |
34.13.4 | Any successor Agent and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party. |
34.14 | Confidentiality |
34.14.1 | In acting as agent for the Finance Parties, the Agent shall be regarded as acting through its department, division or team directly responsible for the management of the Finance Documents which shall be treated as a separate entity from any other of its divisions, departments or teams. |
34.14.2 | If information is received by another division or department of the Agent, it may be treated as confidential to that division or department and the Agent shall not be deemed to have notice of it. |
34.14.3 | Notwithstanding any other provision of any Finance Document to the contrary, neither the Agent, nor the Arranger is obliged to disclose to any other person (i) any confidential information or (ii) any other information if the disclosure would or might in its reasonable opinion constitute a breach of any law or regulation or a breach of a fiduciary duty. |
34.15 | Relationship with the Lenders and the Hedging Provider |
34.15.1 | Subject to clause 32.9 (Pro rata interest settlement) the Agent may treat the person shown in its records as Lender or as the Hedging Provider at the opening of business (in the place of its principal office as notified to the Finance Parties from time to time) as the Lender or (as the case may be) the Hedging Provider acting through its Facility Office: |
(a) | entitled to or liable for any payment due under any Finance Document on that day; and |
(b) | entitled to receive and act upon any notice, request, document or communication or make any decision or determination under any Finance Document made or delivered on that day, unless it has received not less than five Business Days prior notice from that Lender or (as the case may be) the Hedging Provider to the contrary in accordance with the terms of this Agreement. |
34.15.2 | Any Lender or the Hedging Provider may by notice to the Agent appoint a person to receive on its behalf all notices, communications, information and documents to be made or despatched to that Lender or (as the case may be) the Hedging Provider under the Finance Documents. Such notice shall contain the address, fax number and (where communication by electronic mail or other electronic means is permitted under clause 39.5 (Electronic communication)) electronic mail address and/or any other information required to enable the sending and receipt of information by that means (and, in each case, the department or officer, if any, for whose attention communication is to be made) and be treated as a notification of a substitute address, fax number, electronic mail address, department and officer by that Lender or (as the case may be) the Hedging Provider for the purposes of clause 39.2 (Addresses) and clause 39.5 (Electronic communication) and the Agent shall be entitled to treat such person as the person entitled to receive all such notices, communications, information and documents as though that person were that Lender or (as the case may be) the Hedging Provider. |
34.15.3 | Each Lender and the Hedging Provider shall supply the Agent with any information that the Agent may reasonably specify as being necessary or desirable to enable the Agent or the Security Agent to perform its functions as Agent or Security Agent. Each Lender and the Hedging Provider shall deal with the Security Agent exclusively through the Agent and shall not deal directly with the Security Agent. |
34.16 | Credit appraisal by the Lenders and the Hedging Provider |
(a) | the financial condition, status and nature of each Obligor and other Group Member; |
(b) | the legality, validity, effectiveness, adequacy or enforceability of any Finance Document , any Charter Document or any Contract and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document, any Charter Document or any Contract; |
(c) | the application of any Basel II Regulation or Basel III Regulation to the transactions contemplated by the Finance Documents; |
(d) | whether any Finance Party has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under or in connection with any Finance Document, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; |
(e) | the adequacy, accuracy and/or completeness of any information provided by the Agent, any Party or by any other person under or in connection with any Finance Document, any Charter Document or any Contract, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document, any Charter Document or any Contract; and |
(f) | the right of title of any person to, or the value or sufficiency of, any part of the Charged Property, the priority of the Security Documents or the existence of any Security Interest affecting the Charged Property. |
34.17 | Reference Banks |
34.18 | Agent's management time and additional remuneration |
34.19 | Deduction from amounts payable by the Agent |
34.20 | Common parties |
34.21 | Security Agent |
34.21.1 | Each other Finance Party appoints the Security Agent to act as its agent and (to the extent permitted under any applicable law) trustee under and in connection with the Security Documents and confirms that the Security Agent shall have a lien on the Security Documents and the proceeds of the enforcement of those Security Documents for all monies payable to the beneficiaries of those Security Documents. |
34.21.2 | Each other Finance Party authorises the Security Agent: |
(a) | to perform the duties, obligations and responsibilities and to exercise the rights, powers, authorities and discretions specifically given to the Security Agent under or in connection with the Finance Documents together with any other incidental rights, powers, authorities and discretions; and |
(b) | to execute each of the Security Documents and all other documents that may be approved by the Agent and/or the Majority Lenders for execution by it. |
34.21.3 | The Security Agent accepts its appointment under clause 34.21 (Security Agent) as trustee of the Trust Property with effect from the date of this Agreement and declares that it holds the Trust Property on trust for itself, the other Finance Parties (for so long as they are Finance Parties) on and subject to the terms set out in clauses 34.21 (Security Agent) - 34.28 (Indemnity from Trust Property) (inclusive) and the Security Documents to which it is a party. |
34.22 | Application of certain clauses to Security Agent |
34.22.1 | Clauses 34.7 (Rights and discretions of the Agent), 34.8 (Responsibility for documentation and other matters), clause 34.9 (No duty to monitor), 34.10 (Exclusion of liability), clause 34.11 (Lenders' indemnity to the Agent), 34.12 (Resignation of the Agent), clause 34.13 (Replacement of the Agent), 34.14 (Confidentiality), 34.15 (Relationship with the Lenders and the Hedging Provider), 34.16 (Credit appraisal by the Lenders and the Hedging Provider), 34.18 (Agent's management time and additional remuneration) and 34.19 (Deduction from amounts payable by the Agent) shall each extend so as to apply to the Security Agent in its capacity as such and for that purpose each reference to the "Agent" in these clauses shall extend to include in addition a reference to the "Security Agent" in its capacity as such and, in clause 34.7 (Rights and discretions of the Agent), references to the Lenders and a group of Lenders shall refer to the Agent. |
34.22.2 | In addition, clause 34.12 (Resignation of the Agent) and clause 34.13 (Replacement of the Agent) shall, for the purposes of their application to the Security Agent pursuant to clause 34.22.1, have the following additional sub-clause inserted after them: |
34.22.3 | Clause 34.7 (Rights and discretions of the Agent) shall, for the purposes of its application to the Security Agent pursuant to clause 34.22.1 shall read as follows: |
34.22.4 | Clause 34.10 (Exclusion of liability) shall, for the purposes of its application to the Security Agent pursuant to clause 34.22.1 shall include the following after sub clause 34.10.1(b): |
34.22.5 | Clause 34.14 (Confidentiality) shall, for the purposes of its application to the Security Agent pursuant to clause 34.22.1, be read and construed as to refer to "its agency and trust |
34.22.6 | Without prejudice to the generality of any other provision of this Agreement or any other Security Document, the entry into possession of the Charged Property shall not render the Security Agent or any Receiver liable to account as mortgagee in possession thereunder (or its equivalent in any other applicable jurisdiction) or take any action which would expose it to any liability in respect of Environmental Claims in respect of which it has not been indemnified and/or secured and/or pre-funded to its satisfaction or to be liable for any loss on realisation or for any default or omission on realisation or for any default or omission for which a mortgagee in possession might be liable unless such loss, default or omission is caused by its own gross negligence or wilful default. |
34.22.7 | The Security Agent shall not be bound to take any steps to ascertain whether any event, condition or act, the happening of which would cause a right or remedy to become exercisable by the Security Agent or any agent under this Agreement or the other Security Documents has happened or to monitor or supervise the observance and performance by the Borrowers, any agent or any of the other parties thereto of their respective obligations thereunder and, until it shall have actual knowledge or express notice to the contrary, the Security Agent shall be entitled to assume that no such event, condition or act has happened and that the Borrowers, the agents and the other parties thereto are observing and performing all their respective obligations thereunder. |
34.23 | Instructions to Security Agent |
34.23.1 | The Security Agent shall: |
(a) | unless a contrary indication appears in a Finance Document, exercise or refrain from exercising any right, power, authority or discretion vested in it as Security Agent in accordance with any instructions given to it by the Agent; and |
(b) | not be liable for any act (or omission) if it acts (or refrains from acting) in accordance with paragraph (a) above even though it may subsequently be found that there was a defect on the giving of such instruction. |
34.23.2 | The Security Agent shall be entitled to (but not obliged to) request instructions, or clarification of any instruction, from the Agent as to whether, and in what manner, it should exercise or refrain from exercising any right, power, authority or discretion and the Security Agent may refrain from acting unless and until it receives those instructions or that clarification. |
34.23.3 | Unless a contrary indication appears in a Finance Document, any instructions given to the Security Agent by the Agent shall override any conflicting instructions given by any other Parties and will be binding on all Finance Parties. |
34.23.4 | The Security Agent may refrain from acting in accordance with any instructions of the Agent until it has received any indemnification and/or security that it may in its discretion require (which may be greater in extent than that contained in the Finance Documents and which may include payment in advance) for any cost, loss or liability (together with any associated VAT or other applicable tax) which it may incur in complying with those instructions. |
34.23.5 | For the avoidance of doubt, no provision of this Agreement shall require the Security Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity and/or security and/or prefunding against such risk or liability is not assured to it. |
34.23.6 | In the absence of instructions, the Security Agent may act (or refrain from acting) as it considers to be in the best interest of the Finance Parties. |
34.23.7 | The Security Agent is not authorised to act on behalf of a Lender or the Hedging Provider (without first obtaining that Lender's or the Hedging Provider's consent) in any legal or arbitration proceedings relating to any Finance Document. This clause 34.23.7 shall not apply to any legal or arbitration proceeding relating to the perfection, preservation or protection of rights under the Security Documents or enforcement of the Security Documents. |
34.23.8 | The Security Agent shall have no responsibility whatsoever to the Borrowers, the Agent, or any Finance Party as regards any deficiency which might arise because the Security Agent is subject to any Tax in respect of all or any of the Charged Property, the income therefrom or the proceeds thereof. |
34.23.9 | Until the delivery of an enforcement notice pursuant to clause 30.23 (Acceleration), the moneys standing to the credit of any accounts comprised in the Security Documents shall be dealt with in accordance with the provisions of this Agreement and the Security Documents and the Security Agent shall not be responsible in such circumstances or at any other time for any liabilities (howsoever described) suffered by any person, whether by reason of depreciation in value or by fluctuation in exchange rates or otherwise. |
34.24 | Order of application |
34.24.1 | The Security Agent agrees to apply the Trust Property and each other beneficiary of the Security Documents agrees to apply all moneys received by it in the exercise of its rights under the Security Documents, in accordance with the following respective claims: |
(a) | first, as to a sum equivalent to the amounts payable to the Security Agent under the Finance Documents (excluding any amounts received by the Security Agent pursuant to clause 34.11 (Lenders' indemnity to the Agent) as extended to the Security Agent pursuant to clause 34.22 (Application of certain clauses to Security Agent)), for the Security Agent absolutely; |
(b) | secondly, as to a sum equivalent to the amounts payable to the Agent under the Finance Documents (excluding any amounts received by the Agent pursuant to clause 34.11 (Lenders' indemnity to the Agent)), for the Agent absolutely; |
(c) | thirdly, as to a sum equivalent to the aggregate amount then due and owing to the other Finance Parties (including the Hedging Provider) under the Finance Documents (including Hedging Contracts), for those Finance Parties absolutely for application between them in accordance with clause 37.5 (Partial payments); |
(d) | fourthly, until such time as the Security Agent is satisfied that all obligations owed to the Finance Parties (including the Hedging Provider) have been irrevocably and unconditionally discharged in full, held by the Security Agent on a suspense account for payment of any further amounts owing to those Finance Parties (including the Hedging Provider) under the Finance Documents (including any Hedging Contracts), and further application in accordance with this clause 34.24.1 as and when any such amounts later fall due; |
(e) | fifthly, to such other persons (if any) as are legally entitled thereto in priority to the Obligors; and |
(f) | sixthly, as to the balance (if any), for the Obligors by or from whom or from whose assets the relevant amounts were paid, received or recovered or other person entitled to them. |
34.24.2 | The Security Agent and each other beneficiary of the Security Documents shall make each application as soon as is practicable after the relevant moneys are received by, or otherwise become available to, it save that (without prejudice to any other provision contained in any of the Security Documents) the Security Agent (acting on the instructions of the Agent), any other beneficiary of the Security Documents or any receiver or administrator may credit any moneys received by it to a suspense account for so long and in such manner as the Security Agent, such other beneficiary of the Security Documents or such receiver or administrator may from |
34.24.3 | The Security Agent and/or any other beneficiary of the Security Documents shall obtain a good discharge in respect of the amounts expressed to be due to the other Finance Parties as referred to in this clause 34.24 by paying such amounts to the Agent for distribution in accordance with clause 37 (Payment mechanics). |
34.25 | Powers and duties of the Security Agent as trustee of the security |
(a) | shall, without prejudice to any of the powers, discretions and immunities conferred upon trustees by law (and to the extent not inconsistent with the provisions of this Agreement or any of the Security Documents), have all the same powers and discretions as a natural person acting as the beneficial owner of such property and/or as are conferred upon the Security Agent by this Agreement and/or any Security Document but so that the Security Agent may only exercise such powers and discretions to the extent that it is authorised to do so by the provisions of this Agreement; |
(b) | shall (subject to clause 34.24 (Order of application)) be entitled (in its own name or in the names of nominees) to invest moneys from time to time forming part of the Trust Property or otherwise held by it as a consequence of any enforcement of the security constituted by any Finance Document which, in the reasonable opinion of the Security Agent, it would not be practicable to distribute immediately, by placing the same on deposit in the name or under the control of the Security Agent as the Security Agent may think fit without being under any duty to diversify the same and the Security Agent shall not be responsible for any loss due to interest rate or exchange rate fluctuations except for any loss arising from the Security Agent's gross negligence or wilful default and shall not be liable to account for an amount of interest greater than the standard amount that would be payable to an independent customer; |
(c) | may, in the conduct of its obligations under and in respect of the Security Documents instead of acting personally, employ and pay any agent (whether being a lawyer or any other person) to transact or concur in transacting any business and to do or concur in doing any acts required to be done by the Security Agent (including the receipt and payment of money) or may delegate to any person on any terms (including the power to sub-delegate) and on the basis that (i) any such agent or delegate engaged in any profession or business shall be entitled to be paid all usual professional and other charges for business transacted and acts done by him or any partner or employee of his or her in connection with such employment and (ii) the Security Agent shall not be bound to supervise, or be responsible for any loss incurred by reason of any act or omission of, any such agent or delegate if the Security Agent shall have exercised reasonable care in the selection of such agent; |
(d) | may place all deeds and other documents relating to the Trust Property which are from time to time deposited with it pursuant to the Security Documents in any safe deposit, safe or receptacle selected by the Security Agent or with any firm of solicitors or company whose business includes undertaking the safe custody of documents selected by the Security Agent and may make any such arrangements as it thinks fit for allowing Obligors access to, or its solicitors or auditors possession of, such documents when necessary or convenient and the Security Agent shall not be responsible for any loss incurred in connection with any such deposit, access or possession if it has exercised reasonable care in the selection of a safe deposit, safe, receptacle or firm of solicitors or company: |
(e) | may, unless and to the extent the express provisions of any Security Document provide otherwise, do any act or thing in the exercise of any of its duties under the Finance Documents which in its absolute discretion (in the absence of any instructions of the |
(f) | may, unless the express provisions of any such Security Document provide otherwise, if authorised by the Agent of, amend or vary the terms of or waive breaches of or defaults under, or otherwise excuse performance of any provision of, or grant consents under any of the Security Documents to which it is a party, any such amendment, variation, waiver or consent so authorised to be binding on all the parties hereto and that Security Agent to be under no liability whatsoever in respect thereof; |
(g) | shall not be bound to disclose to any other person (including but not limited to any other Finance Party) (i) any confidential information or (ii) any other information, if disclosure would, or might in its reasonable opinion, constitute a breach of any law or be a breach of fiduciary duty; |
(h) | shall have no responsibility to make any payment, deduction or withholding of any Tax or governmental charge as a result of the Security Agent (i) holding the Transaction Security or (ii) enforcing the Transaction Security; |
(i) | shall not have, or be deemed to have, any relationship of trust or agency with any Obligor; and |
(j) | shall have only those duties, obligations and responsibilities expressly specified in the Finance Documents to which it is expressed to be a party (and no others shall be implied) and the role and functions of the Security Agent under this Agreement shall be purely mechanical and administrative in nature and, subject to the terms of this Agreement, acting on the instructions of the Agent. |
34.25.2 | The rights, powers and discretions conferred upon the Security Agent by this Agreement shall be supplemental to the Trustee Act 1925 and the Trustee Act 2000 and in addition to any which may be vested in the Security Agent by general law or otherwise. Section 1 of the Trustee Act 2000 shall not apply to the duties of the Security Agent in relation to the trusts constituted by this Agreement. Where there are any inconsistencies between the Trustee Act 1925 or the Trustee Act 2000 and the provisions of this Agreement, the provisions of this Agreement shall, to the extent allowed by law, prevail and, in the case of any inconsistency with the Trustee Act 2000, the provisions of this Agreement shall constitute a restriction or exclusion for the purposes of that Act. |
34.26 | All enforcement action through the Security Agent |
34.26.1 | None of the other Finance Parties shall have any independent power to enforce any of those Security Documents which are executed in favour of the Security Agent only, or to exercise any rights, discretions or powers or to grant any consents or releases under or pursuant to such Security Documents or otherwise have direct recourse to the security and/or guarantees constituted by such Security Documents except through the Security Agent. |
34.26.2 | None of the other Finance Parties shall have any independent power to enforce any of those Security Documents which are executed in their favour or to exercise any rights, discretions or powers or to grant any consents or releases under or pursuant to such Security Documents or otherwise have direct recourse to the security and/or guarantees constituted by such Security Documents except with the prior written consent of the Agent (acting through the Security Agent and on the instructions of the Majority Lenders). If any Finance Party (other than the Security Agent) is a party to any Security Document it shall promptly upon being requested by the Agent to do so grant a power of attorney or other sufficient authority to the Security Agent to enable the Security Agent to exercise any rights, discretions or powers or to grant any consents or releases under such Security Document. |
34.27 | Co-operation to achieve agreed priorities of application |
34.28 | Indemnity from Trust Property |
34.28.1 | In respect of all liabilities, costs or expenses for which the Obligors are liable under this Agreement, the Security Agent and each Affiliate of the Security Agent and each officer or employee of the Security Agent or its Affiliate (each a Relevant Person ) shall be entitled to be indemnified out of the Trust Property in respect of all liabilities, damages, costs, claims, charges or expenses whatsoever properly incurred or suffered by such Relevant Person: |
(a) | in the execution or exercise or bona fide purported execution or exercise of the trusts, rights, powers, authorities, discretions and duties created or conferred by or pursuant to the Finance Documents; |
(b) | as a result of any breach by an Obligor of any of its obligations under any Finance Document; |
(c) | in respect of any Environmental Claim made or asserted against a Relevant Person which would not have arisen if the Finance Documents had not been executed; and |
(d) | in respect of any matter or thing done or omitted in any way in accordance with the terms of the Finance Documents relating to the Trust Property or the provisions of any of the Finance Documents. |
34.28.2 | The rights conferred by this clause 34.28 are without prejudice to any right to indemnity by law given to trustees generally and to any provision of the Finance Documents entitling the Security Agent or any other person to an indemnity in respect of, and/or reimbursement of, any liabilities, costs or expenses incurred or suffered by it in connection with any of the Finance Documents or the performance of any duties under any of the Finance Documents. Nothing contained in this clause 34.28 shall entitle the Security Agent or any other person to be indemnified in respect of any liabilities, damages, costs, claims, charges or expenses to the extent that the same arise from such person's own gross negligence or wilful misconduct. |
34.29 | Finance Parties to provide information |
34.30 | No Reliance on Security Agent |
(a) | to check or enquire on its behalf into the adequacy, accuracy or completeness of any information provided to it by the Obligors or any other person in connection with any of the Finance Documents, the Charged Property or the transactions therein contemplated |
(b) | to check or enquire on its behalf into the adequacy, accuracy or completeness of any communication delivered to it under any of the Finance Documents, the Charged Property, any legal or other opinions, reports, valuations, certificates, appraisals or other documents delivered or made or required to be delivered or made at any time in connection with any of the Finance Documents, the Charged Property, any security to be constituted thereby or any other report or other document, statement or information circulated, delivered or made, whether orally or otherwise and whether before, on or after the date of this Agreement; |
(c) | to check or enquire on its behalf into the due execution, delivery, validity, legality, adequacy, suitability, performance, enforceability or admissibility in evidence of any of the Finance Documents, the Charged Property or any other document referred to in paragraph (b) above or of any guarantee, indemnity or security given or created thereby or any obligations imposed thereby or assumed thereunder; |
(d) | to check or enquire on its behalf into the ownership, value, existence or sufficiency of any Charged Property, the priority of any of the Security Interests, the right or title of any person in or to any property comprised therein or the existence of any encumbrance affecting the same; or |
(e) | to assess or keep under review on its behalf the identity, financial condition, creditworthiness, condition, affairs, status or nature of any Obligor or other Group Member. |
34.31 | Release to facilitate enforcement and realisation |
34.32 | Undertaking to pay |
34.33 | Additional trustees |
(a) | if the Security Agent reasonably considers such appointment to be in the best interests of the Finance Parties; |
(b) | for the purpose of conforming with any legal requirement, restriction or condition in any jurisdiction in which any particular act is to be performed; or |
(c) | for the purpose of obtaining a judgment in any jurisdiction or the enforcement in any jurisdiction against any person of a judgment already obtained, |
34.34 | Non-recognition of trust |
(a) | in relation to any jurisdiction the courts of which would not recognise or give effect to the trusts expressed to be constituted by this clause 34, the relationship of the Security Agent and the other Finance Parties shall be construed as one of principal and agent, but to the extent permissible under the laws of such jurisdiction, all the other provisions of this Agreement shall have full force and effect between the parties to this Agreement; and |
(b) | the provisions of this clause 34 insofar as they relate to the Security Agent in its capacity as trustee for the Finance Parties and the relationship between themselves and the Security Agent as their trustee may be amended by agreement between the other Finance Parties and the Security Agent. The Security Agent may amend all documents necessary to effect the alteration of the relationship between the Security Agent and the other Finance Parties and each such other party irrevocably authorises the Security Agent in its name and on its behalf to execute all documents necessary to effect such amendments. |
34.35 | Security Agent's Ongoing Fees |
34.35.1 | The Borrowers shall pay to the Agent and the Security Agent certain fees in accordance with clause 11 (Fees). |
34.35.2 | If: |
(a) | a Default has occurred; or |
(b) | the Security Agent considers it expedient and/or necessary or is requested by the Borrowers or any Finance Party or group of Finance Parties to undertake duties which the Security Agent considers to be of an exceptional nature and/or outside the scope of the normal duties of the Security Agent under the Finance Documents (which for the avoidance of doubt shall include any amendments to the Finance Documents and the time incurred in relation thereto), |
34.36 | Insurance by Security Agent |
34.37 | Custodians and nominees |
34.38 | Acceptance of title |
34.39 | Refrain from illegality |
34.40 | Interest on Demand |
34.41 | Release of Security |
35 | Conduct of business by the Finance Parties |
35.1 | Finance Parties tax affairs |
(a) | interfere with the right of any Finance Party to arrange its affairs (tax or otherwise) in whatever manner it thinks fit; |
(b) | oblige any Finance Party to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or |
(c) | oblige any Finance Party to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax. |
35.2 | Finance Parties acting together |
35.3 | Majority Lenders |
35.3.1 | Where any Finance Document provides for any matter to be determined by reference to the opinion of, or to be subject to the consent, approval or request of, the Majority Lenders or for any action to be taken on the instructions of the Majority Lenders (a majority decision ) , such majority decision shall (as between the Lenders) only be regarded as having been validly given or issued by the Majority Lenders if all the Lenders shall have received prior notice of the matter on which such majority decision is required and the relevant majority of Lenders shall have given or issued such majority decision. However (as between any Obligor and the Finance Parties) the relevant Obligor shall be entitled (and bound) to assume that such notice shall have been duly received by each Lender and that the relevant majority shall have been obtained to constitute Majority Lenders when notified to this effect by the Agent whether or not this is the case. |
35.3.2 | If, within ten Business Days of the Agent despatching to each Lender a notice requesting instructions (or confirmation of instructions) from the Lenders or the agreement of the Lenders to any amendment, modification, waiver, variation or excuse of performance for the purposes of, or in relation to, any of the Finance Documents, the Agent has not received a reply specifically giving or confirming or refusing to give or confirm the relevant instructions or, as the case may be, approving or refusing to approve the proposed amendment, modification, waiver, variation or excuse of performance, then (irrespective of whether such Lender responds at a later date) the Agent shall treat any Lender which has not so responded as having indicated a desire to be bound by the wishes of 66.67 per cent. of those Lenders (measured in terms of the Total Commitments of those Lenders) which have so responded. |
35.3.3 | For the purposes of clause 35.3.2, any Lender which notifies the Agent of a wish or intention to abstain on any particular issue shall be treated as if it had not responded. |
35.3.4 | Clauses 35.3.2 and 35.3.3 shall not apply in relation to those matters referred to in, or the subject of, clause 43.2 (Exceptions). |
35.4 | Conflicts |
35.4.1 | Each Borrower acknowledges that the Arranger and its parent undertaking, subsidiary undertakings and fellow subsidiary undertakings (together an Arranger Group ) may be providing debt finance, equity capital or other services (including financial advisory services) to other persons with which the Borrowers may have conflicting interests in respect of the Facility or otherwise. |
35.4.2 | No member of an Arranger Group shall use confidential information gained from any Obligor by virtue of the Facility or its relationships with any Obligor in connection with their performance of services for other persons. This shall not, however, affect any obligations that any member of an Arranger Group has as Agent in respect of the Finance Documents. The Borrowers also acknowledge that no member of an Arranger Group has any obligation to use or furnish to any Obligor information obtained from other persons for their benefit. |
35.4.3 | The terms parent undertaking, subsidiary undertaking and fellow subsidiary undertaking when used in this clause have the meaning given to them in sections 1161 and 1162 of the Companies Act 2006. |
36 | Sharing among the Finance Parties |
36.1 | Payments to Finance Parties |
(a) | the Recovering Finance Party shall, within three Business Days, notify details of the receipt or recovery, to the Agent; |
(b) | the Agent shall determine whether the receipt or recovery is in excess of the amount the Recovering Finance Party would have been paid had the receipt or recovery been received or made by the Agent and distributed in accordance with clause 37 (Payment mechanics), without taking account of any Tax which would be imposed on the Agent in relation to the receipt, recovery or distribution; and |
(c) | the Recovering Finance Party shall, within three Business Days of demand by the Agent, pay to the Agent an amount (the Sharing Payment ) equal to such receipt or recovery less any amount which the Agent determines may be retained by the Recovering Finance Party as its share of any payment to be made, in accordance with clause 37.5 (Partial payments). |
36.2 | Redistribution of payments |
36.3 | Recovering Finance Party's rights |
36.4 | Reversal of redistribution |
(a) | each Sharing Finance Party shall, upon request of the Agent, pay to the Agent for the account of that Recovering Finance Party an amount equal to the appropriate part of its share of the Sharing Payment (together with an amount as is necessary to reimburse that Recovering Finance Party for its proportion of any interest on the Sharing Payment which that Recovering Finance Party is required to pay) (the Redistributed Amount ) ; and |
(b) | as between the relevant Obligor and each relevant Sharing Finance Party, an amount equal to the relevant Redistributed Amount will be treated as not having been paid by that Obligor. |
36.5 | Exceptions |
36.5.1 | This clause 36 shall not apply to the extent that the Recovering Finance Party would not, after making any payment pursuant to this clause, have a valid and enforceable claim against the relevant Obligor. |
36.5.2 | A Recovering Finance Party is not obliged to share with any other Finance Party any amount which the Recovering Finance Party has received or recovered as a result of taking legal or arbitration proceedings in accordance with the terms of this Agreement, if: |
(a) | it notified that other Finance Party of the legal or arbitration proceedings; and |
(b) | the taking legal or arbitration proceedings was in accordance with the terms of this Agreement; and |
37 | Payment mechanics |
37.1 | Payments to the Agent |
37.1.1 | On each date on which an Obligor or a Lender is required to make a payment under a Finance Document (other than a Hedging Contract), that Obligor or Lender shall make the same available to the Agent (unless a contrary indication appears in a Finance Document) for value on the due date at the time and in such funds specified by the Agent as being customary at the time for settlement of transactions in the relevant currency in the place of payment. |
37.1.2 | Payment shall be made to such account in the principal financial centre of the country of that currency (or, in relation to euro, in a principal financial centre in a Participating Member State or London as specified by the Agent) with such bank as the Agent, in each case specifies. |
37.2 | Distributions by the Agent |
37.3 | Distributions to an Obligor |
37.4 | Clawback |
37.4.1 | Where a sum is to be paid to the Agent under the Finance Documents for another Party, the Agent is not obliged to pay that sum to that other Party (or to enter into or perform any related exchange contract) until it has been able to establish to its satisfaction that it has actually received that sum. |
37.4.2 | If the Agent pays an amount to another Party and it proves to be the case that the Agent had not actually received that amount, then the Party to whom that amount (or the proceeds of any related exchange contract) was paid by the Agent shall on demand refund the same to the Agent together with interest on that amount from the date of payment to the date of receipt by the Agent, calculated by the Agent to reflect its cost of funds. |
37.5 | Partial payments |
37.5.1 | If the Agent receives a payment for application against amounts due under the Finance Documents that is insufficient to discharge all the amounts then due and payable by an Obligor under those Finance Documents, the Agent shall apply that payment towards the obligations of that Obligor under those Finance Documents in the following order: |
(a) | first, in or towards payment pro rata of any unpaid fees, costs and expenses (ignoring any fees payable under clause 11 (Fees)) of the Agent, the Security Agent or the Arranger under those Finance Documents; |
(b) | secondly, in or towards payment to the Lenders pro rata of any amount owing to the Lenders under clause 34.11 (Lenders' indemnity to the Agent) including any amount resulting from the indemnity to the Security Agent under clause 34.22 (Application of certain clauses to Security Agent); and |
(c) | thirdly, in or towards payment of any principal, accrued interest, fee, commission or any other sums due but unpaid under the Finance Documents (including the Hedging Contracts), to the Hedging Provider and the Lenders (and pro rata as between them). |
37.5.2 | The Agent shall, if so directed by all the Lenders and the Hedging Provider, vary the order set out in paragraphs (b) to (c) of clause 37.5.1. |
37.5.3 | Clauses 37.5.1 and 37.5.2 above will override any appropriation made by an Obligor. |
37.6 | No set-off by Obligors |
37.7 | Business Days |
37.7.1 | Any payment which is due to be made on a day that is not a Business Day shall be made on the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not). |
37.7.2 | During any extension of the due date for payment of any principal or Unpaid Sum under this Agreement interest is payable on the principal or Unpaid Sum at the rate payable on the original due date. |
37.8 | Payments on demand |
37.9 | Currency of account |
37.9.1 | Subject to clauses 37.9.2 to 37.9.3, dollars is the currency of account and payment for any sum due from an Obligor under any Finance Document. |
37.9.2 | A repayment of all or part of the Loan or an Unpaid Sum and each payment of interest shall be made in dollars on its due date. |
37.9.3 | Each payment in respect of the amount of any costs, expenses or Taxes or other losses shall be made in dollars and, if they were incurred in a currency other than dollars, the amount payable under the Finance Documents shall be the equivalent in dollars of the relevant amount in such other currency on the date on which it was incurred. |
37.9.4 | All moneys received or held by the Security Agent or by a Receiver under a Security Document in a currency other than dollars may be sold for dollars and the Obligor which executed that Security Document shall indemnify the Security Agent against the full cost in relation to the sale. Neither the Security Agent nor such Receiver will have any liability to that Obligor in respect of any loss resulting from any fluctuation in exchange rates after the sale. |
37.10 | Change of currency |
37.10.1 | Unless otherwise prohibited by law, if more than one currency or currency unit are at the same time recognised by the central bank of any country as the lawful currency of that country, then: |
(a) | any reference in the Finance Documents to, and any obligations arising under the Finance Documents in, the currency of that country shall be translated into, or paid in, the currency or currency unit of that country designated by the Agent (after consultation with the Borrowers); and |
(b) | any translation from one currency or currency unit to another shall be at the official rate of exchange recognised by the central bank for the conversion of that currency or currency unit into the other, rounded up or down by the Agent (acting reasonably). |
37.10.2 | If a change in any currency of a country occurs, this Agreement will, to the extent the Agent (acting reasonably and after consultation with the Borrowers) specifies to be necessary, be amended to comply with any generally accepted conventions and market practice in the London interbank market and otherwise to reflect the change in currency. |
37.11 | Disruption to Payment Systems etc. |
(a) | the Agent may, and shall if requested to do so by the Borrowers, consult with the Borrowers with a view to agreeing with the Borrowers such changes to the operation or administration of the Facility as the Agent may deem necessary in the circumstances; |
(b) | the Agent shall not be obliged to consult with the Borrowers in relation to any changes mentioned in paragraph (a) above if, in its opinion, it is not practicable to do so in the circumstances and, in any event, shall have no obligation to agree to such changes; |
(c) | the Agent may consult with the Finance Parties in relation to any changes mentioned in paragraph (a) above but shall not be obliged to do so if, in its opinion, it is not practicable to do so in the circumstances; |
(d) | any such changes agreed upon by the Agent and the Borrowers shall (whether or not it is finally determined that a Payment Disruption Event has occurred) be binding upon the Parties as an amendment to (or, as the case may be, waiver of) the terms of the Finance Documents notwithstanding the provisions of clause 43 (Amendments and grant of waivers); |
(e) | the Agent shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever (including, without limitation for negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Agent) arising as a result of its taking, or failing to take, any actions pursuant to or in connection with this clause 37.11; and |
(f) | the Agent shall notify the Finance Parties of all changes agreed pursuant to paragraph (d) above. |
38 | Set-off |
39 | Notices |
39.1 | Communications in writing |
39.2 | Addresses |
(a) | in the case of any Obligor which is a Party, that identified with its name in Schedule 1 (The original parties); |
(b) | in the case of any Obligor which is not a Party, that identified in any Finance Document to which it is a party; |
(c) | in the case of the Security Agent, the Agent and any other original Finance Party that identified with its name in Schedule 1 (The original parties); and |
(d) | in the case of each Lender or other Finance Party, that notified in writing to the Agent on or prior to the date on which it becomes a Party in the relevant capacity, |
39.3 | Delivery |
39.3.1 | Any communication or document made or delivered by one person to another under or in connection with the Finance Documents will only be effective: |
(a) | if by way of fax, when received in legible form; or |
(b) | if by way of letter, when it has been left at the relevant address or five Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address; |
39.3.2 | Any communication or document to be made or delivered to the Agent or the Security Agent will be effective only when actually received by the Agent or the Security Agent and then only if it is expressly marked for the attention of the department or officer identified in Schedule 1 (The original parties) (or any substitute department or officer as the Agent or the Security Agent shall specify for this purpose). |
39.3.3 | All notices from or to an Obligor shall be sent through the Agent. |
39.3.4 | Any communication or document made or delivered to the Borrowers in accordance with this clause will be deemed to have been made or delivered to each of the Obligors. |
39.4 | Notification of address and fax number |
39.5 | Electronic communication |
39.5.1 | Any communication to be made between the Agent and a Lender, the Hedging Provider or an Obligor under or in connection with the Finance Documents may be made by electronic mail or other electronic means (including by way of the Agent's Intralinks or Debt domain system or other electronic website designated by the Agent), if the Agent and the relevant Lender, the Hedging Provider or an Obligor: |
(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 address or any other such information supplied by them. |
39.5.2 | Any electronic communication made between the Agent and a Lender or the Hedging Provider or an Obligor will be effective only when actually received in readable form and in the case of any electronic communication made by a Lender or the Hedging Provider or an Obligor to the Agent only if it is addressed in such a manner as the Agent shall specify for this purpose. |
39.5.3 | All Lenders, the Hedging Provider and the Obligors confirm that they have consented to the use of the Agent's Intralinks or Debtdomain systems as an accepted method of communication under or in connection with the Finance Documents and agree that the Intralinks or Debtdomain system will be the primary method of communication between the Agent, the Lenders, the Hedging Provider or the Obligors. The Lenders, the Hedging Provider and the Obligors acknowledge that a communication via Intralinks or Debtdomain will be effective once the communication is posted to Intralinks or Debtdomain by the Agent. |
39.6 | English language |
39.6.1 | Any notice given under or in connection with any Finance Document shall be in English. |
39.6.2 | All other documents provided under or in connection with any Finance Document shall be: |
(a) | in English; or |
(b) | if not in English, and if so required by the Agent, accompanied by a certified English translation and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other official document. |
40 | Calculations and certificates |
40.1 | Accounts |
40.2 | Certificates and determinations |
40.3 | Day count convention |
41 | Partial invalidity |
42 | Remedies and waivers |
43 | Amendments and grant of waivers |
43.1 | Required consents |
43.1.1 | Subject to clauses 43.2 (Exceptions) and 43.3 (All Lenders matters), any term of the Finance Documents may be amended or waived with the consent of the Agent (acting on the instructions of the Majority Lenders and, if it affects the rights and obligations of the Security Agent or the Agent, the consent of the Agent or the Security Agent) and any such amendment or waiver agreed or given by the Agent will be binding on the other Finance Parties. |
43.1.2 | The Agent may (or, in the case of the Security Documents, instruct the Security Agent to) effect, on behalf of any Finance Party, any amendment or waiver permitted by this clause. |
43.1.3 | Each Obligor agrees to any such amendment or waiver permitted by this clause 43 which is agreed to by the Borrowers. This includes any amendment or waiver which would, but for this clause 43.1.3, require the consent of the Guarantor. |
43.2 | Exceptions |
43.2.1 | No amendment or waiver may be made before the date falling ten Business Days after the terms of that amendment or waiver have been notified by the Agent to the Lenders. The Agent shall notify the Lenders reasonably promptly of any amendments or waivers proposed by the Borrowers. |
43.2.2 | Without prejudice to the generality of sub-clauses 34.7.3, 34.7.4 and 34.7.5 of clause 34.7 (Rights and discretions of Agent), the Agent may engage, pay for and rely on the services of lawyers in determining the consent level required for and effecting any amendment, waiver or consent under this Agreement. |
43.2.3 | Amendments to or waivers in respect of a Hedging Contract may only be agreed by the Hedging Provider. |
43.2.4 | An amendment or waiver which relates to the rights or obligations of the Agent, the Security Agent or the Arranger in their respective capacities as such (and not just as a Lender) may not be effected without the consent of the Agent, Security Agent or the Arranger (as the case may be). |
43.2.5 | Notwithstanding clauses 43.1 (Required consents), 43.2.3 and 43.2.4 and 43.3.1 (An amendment, waiver or discharge or release or a consent of, or in relation to, the terms of any Finance Document that has the effect of changing or which relates to) the Agent may make technical amendments to the Finance Documents arising out of manifest errors on the face of the Finance Documents, where such amendments would not prejudice or otherwise be adverse to the interests of any Finance Party without any reference or consent of the Finance Parties. |
43.3 | All Lenders matters |
43.3.1 | An amendment, waiver or discharge or release or a consent of, or in relation to, the terms of any Finance Document that has the effect of changing or which relates to: |
(a) | the definition of "Change of Control" in clause 1.1 (Definitions) or clause 7.2 (Change of control); |
(b) | the definition of "Majority Lenders" in clause 1.1 (Definitions); |
(c) | the definition of "Last Availability Date" in clause 1.1 (Definitions); |
(d) | an extension to the date of payment of any amount under the Finance Documents; |
(e) | a reduction in the Margin or a reduction in the amount of any payment of principal, interest, fees or commission payable or the rate at which they are calculated; |
(f) | an increase in, or an extension of, any Commitment or any requirement that a cancellation of Commitments reduces the Commitments of the Lenders pro rata under a Facility; |
(g) | a change to the Borrowers or any other Obligor; |
(h) | any provision which expressly requires the consent or approval of all the Lenders; |
(i) | clause 2.2 (Finance Parties' rights and obligations), clause 32 (Changes to the Lenders), clause 36.1 (Payments to Finance Parties), clause 46 (Governing law), clause 47 (Enforcement) or this clause 43; |
(j) | the order of distribution under clause 37.5 (Partial payments); |
(k) | the order of distribution under clause 34.24 (Order of application); |
(I) | the currency in which any amount is payable under any Finance Document; |
(m) | the nature or scope of the Charged Property or the manner in which the proceeds of enforcement of the Security Documents are distributed; |
(n) | the nature or scope of the guarantee and indemnity granted under clause 17 (Guarantee and Indemnity); or |
(o) | the circumstances in which the security constituted by the Security Documents are permitted or required to be released under any of the Finance Documents, shall not be made without the prior consent of all the Lenders. |
43.4 | Disenfranchisement of Defaulting Lenders |
43.4.1 | For so long as a Defaulting Lender has any Commitment, in ascertaining the Majority Lenders or whether any given percentage (including, for the avoidance of doubt, unanimity) of the Total Commitment has been obtained to approve any request for a consent, waiver, amendment or other vote under the Finance Documents, that Defaulting Lender's Commitment will be reduced by the amount of its Commitment. |
43.4.2 | For the purposes of this clause 43.4, the Agent may assume that the following Lenders are Defaulting Lenders: |
(a) | any Lender which has notified the Agent that it has become a Defaulting Lender; and |
(b) | any Lender in relation to which it is aware that any of the events or circumstances referred to in paragraphs (a), (b) or (c) of the definition of Defaulting Lender has occurred, unless it has received notice to the contrary from the Lender concerned (together with any supporting evidence reasonably requested by the Agent) or the Agent is otherwise aware that the Lender has ceased to be a Defaulting Lender. |
43.5 | Replacement of a Defaulting Lender |
43.5.1 | The Borrowers may, at any time a Lender has become and continues to be a Defaulting Lender, |
43.5.2 | Any transfer of rights and obligations of a Defaulting Lender pursuant to this clause shall be subject to the following conditions: |
(a) | the Borrowers shall have no right to replace the Agent or the Security Agent; |
(b) | neither the Agent nor the Defaulting Lender shall have any obligation to the Borrowers to find a Replacement Lender; |
(c) | the transfer must take place no later than 20 Business Days after the notice referred to in clause 43.5.1 above; and |
(d) | in no event shall the Defaulting Lender be required to pay or surrender to the Replacement Lender any of the fees received by the Defaulting Lender pursuant to the Finance Documents. |
43.6 | Releases |
44 | Counterparts |
45 | Confidentiality |
45.1 | Confidential Information |
45.2 | Disclosure of Confidential Information |
(a) | in the case of a Lender, to (or through) whom that Lender assigns (or may potentially assign) all or any of its rights and obligations under the Finance Documents; |
(b) | in the case of a Lender, to whom or for whose benefit that Finance Party charges, assigns or otherwise creates Security (or may do so) pursuant to clause 32.8 (Security over Lenders' rights); |
(c) | in the case of a Lender, with (or through) whom that Lender enters into (or may potentially enter into) any sub-participation in relation to, or any other transaction under which payments are to be made by reference to, the Finance Documents or any Obligor; |
(d) | to whom, and to the extent that, information is required to be disclosed by any applicable law or regulation; |
(e) | in order to preserve or enforce any rights any Finance Party may have under the Security Documents; |
(f) | which is a rating agency (including its professional advisers) or such Finance Party's professional advisers (including auditors, lawyers, accountants, surveyors, valuers, insurers, insurance advisors and brokers); or |
(g) | in the case of the Security Agent, in the course of the performance of its functions under the Finance Documents, |
45.3 | Disclosure to numbering service providers |
45.3.1 | Any Finance Party may disclose to any national or international numbering service provider appointed by that Finance Party to provide identification numbering services in respect of this Agreement, the Facility and/or one or more Obligors the following information: |
(a) | names of Obligors; |
(b) | country of domicile of Obligors; |
(c) | place of incorporation of Obligors; |
(d) | date of this Agreement; |
(e) | clause 46 (Governing law); |
(f) | the names of the Agent and the Arranger; |
(g) | date of each amendment and restatement of this Agreement; |
(h) | amount of Total Commitments; |
(i) | currency of the Facility; |
(j) | type of the Facility; |
(k) | ranking of the Facility; |
(I) | the term of the Facility; |
(m) | changes to any of the information previously supplied pursuant to paragraphs (a) to (I) above; and |
(n) | such other information agreed between such Finance Party and the Borrowers, |
45.3.2 | The Parties acknowledge and agree that each identification number assigned to this Agreement, the Facility and/or one or more Obligors by a numbering service provider and the information associated with each such number may be disclosed to users of its services in accordance with the standard terms and conditions of that numbering service provider. |
45.3.3 | The Borrowers represent that none of the information set out in clauses 45.3.1(a) to 45.3.1(n) above is, nor will at any time be, unpublished price-sensitive information. |
45.3.4 | The Agent shall notify the Borrowers and the other Finance Parties of: |
(a) | the name of any numbering service provider appointed by the Agent in respect of this Agreement, the Facility and/or one or more Obligors; and |
(b) | the number or, as the case may be, numbers assigned to this Agreement, the Facility and/or one or more Obligors by such numbering service provider. |
45.4 | Entire agreement |
45.5 | Inside information |
45.6 | Continuing obligations |
(a) | the date on which all amounts payable by the Obligors under or in connection with this Agreement have been paid in full and all Commitments have been cancelled or otherwise cease to be available; and |
(b) | the date on which such Finance Party otherwise ceases to be a Finance Party. |
46 | Governing law |
47 | Enforcement |
47.1 | Jurisdiction of English courts |
47.1.1 | The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement or any non-contractual obligations connected with it (including a dispute regarding the existence, validity or termination of this Agreement) (a Dispute ) . |
47.1.2 | The Parties agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary. |
47.1.3 | This clause 47.1 is for the benefit of the Finance Parties only. As a result, no Finance Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Finance Parties may take concurrent proceedings in any number of jurisdictions. |
47.2 | Service of process |
(a) | irrevocably appoints the person named in Schedule 1 (The original parties) as that Obligor's English process agent as its agent for service of process in relation to any proceedings before the English courts in connection with any Finance Document; |
(b) | agrees that failure by a process agent to notify the relevant Obligor of the process will not invalidate the proceedings concerned; and |
(c) | if any person appointed as process agent for an Obligor is unable for any reason to act as agent for service of process, that Obligor must immediately (and in any event within ten days of such event taking place) appoint another agent on terms acceptable to the Agent. Failing this, the Agent may appoint another agent for this purpose. |
Name:
|
Ujae Shipping Company Inc.
|
Jurisdiction of incorporation
|
Republic of the Marshall Islands
|
Registration number (or equivalent, if any
)
|
66390
|
English process agent (if not incorporated in England
)
|
Nicolaou & Co, 25 Heath Drive, Potters Bar, Herts, EN6 1EN, United Kingdom
|
Registered office
|
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, the Marshall Islands
|
Address for service of notices
|
c/o Diana Shipping Services S.A., Pendelis 16, 175 64 Palaio Faliro, Athens, Greece
|
Shareholder
|
Diana Shipping Inc.
|
Name:
|
Rairok Shipping Company Inc.
|
Jurisdiction of incorporation
|
Republic of the Marshall Islands
|
Registration number (or equivalent, if any
)
|
66389
|
English process agent (if not incorporated in England
)
|
Nicolaou & Co, 25 Heath Drive, Potters Bar, Herts, EN6 1EN, United Kingdom
|
Registered office
|
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, the Marshall Islands
|
Address for service of notices
|
c/o Diana Shipping Services S.A., Pendelis 16, 175 64 Palaio Faliro, Athens, Greece
|
Shareholder
|
Diana Shipping Inc.
|
Name:
|
Diana Shipping Inc.
|
Jurisdiction of incorporation
|
Republic of the Marshall Islands
|
Registration number (or equivalent, if any
)
|
13671
|
English process agent (if not incorporated in England
)
|
Nicolaou & Co, 25 Heath Drive, Potters Bar, Herts, EN6 1EN, United Kingdom
|
Registered office
|
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, the Marshall Islands
|
Address for service of notices
|
do Diana Shipping Services S.A., Pendelis 16, 175 64 Palaio Faliro, Athens, Greece
|
Name
|
ING Bank N.V., London Branch
|
Commitment $
|
39,682,500
|
Total $
|
39,682,500
|
Name
|
ING Bank N.V., London Branch
|
Facility Office, address, fax number and attention details for notices and account details for payments
|
Address:
60 London Wall
London EC2M 5TQ England
Email:
Rory.Hussey@uk.ing.com
/
Olga.Terentieva@uk.ing.com
Attention:
Rory Hussey / Olga Terentieva
|
Name
|
ING Bank N.V., London Branch
|
Facility Office, address, fax number and attention details for notices and account details for payments
|
Address:
60 London Wall
London EC2M 5TQ England
Email:
Rory.Hussey@uk.ing.com
/
Olga.Terentieva@uk.ing.com
Attention:
Rory Hussey / Olga Terentieva
|
Name
|
ING Bank N.V.
|
Facility Office, address, fax number and attention details for notices and account details for payments
|
Foppingadreef 7
P.O. Box 1800 NL-1000 BV Amsterdam The Netherlands
Att:
Operations / Derivatives / TRC 00.13
Fax
+31-20-501-3381
Tel:
+31-20-563-8222
Email:
Trade.Processing.Derivatives.AMS@INGBank.com
(For all purposes, with the exception of Confirmations / notifications to specific branches)
Foppingadreef 7
P.O. Box 1800 NL-1000 BV Amsterdam The Netherlands
Att:
Financial Markets / Operations / Forex / Money Markets / TRC 01.003
Fax
+31-20-501-3161
Tel:
+31-20-563-8241
Swift code:
INGB NL 2A
(For FX only)
|
Foppingadreef 7
P.O. Box 1800 NL-1000 BV Amsterdam The Netherlands
Att:
Head of Legal Financial Markets
(For notices/communications in relation to Sections 5, 6 and 7 of the ISDA)
|
Name
|
ING Bank N.V., London Branch
|
Facility Office, address, fax number and attention details for notices and account details for payments
|
Address:
60 London Wall
London EC2M 5TQ England
Email:
Rory.Hussey@uk.ing.com
/
Olga.Terentieva@uk.ing.com
Attention:
Rory Hussey / Olga Terentieva
|
Hull No.:
|
1364
|
Name of Ship:
|
New Orleans
|
Owner:
|
Ujae Shipping Company Inc.
|
Builder:
|
China Shipbuilding Trading Company, Limited and Shanghai
Waigaogiao Shipbuilding Co., Ltd |
IMO Number:
|
9743265
|
Date and description of Contract:
|
Shipbuilding Contract made between the Builder and SBI dated
31 December 2013 as amended by addendum no.1 thereto dated 31 December 2013 and addendum no.2 dated 9 March 2015, as novated by a deed of novation dated 12 May 2015 made between the Builder, SBI and the relevant Owner |
Contract Price:
|
$56,468,840
|
Ship Commitment:
|
$27,950,000
|
Flag State:
|
Republic of the Marshall Islands
|
Classification:
|
+A1 (E), Bulk Carrier, BC-A (holds 2,4,6 & 8 may be empty),
CSR, AB-CM, +AMS, +ACCU, RW,TCM, CPS, PMA, ESP,UWILD, BWT, GRAB[25], GP |
Classification Society:
|
American Bureau of Shipping
|
Major Casualty Amount:
|
$1,000,000
|
Name of Ship:
|
Medusa
(ex
Torm Island)
|
Owner:
|
Rairok Shipping Company Inc.
|
Seller:
|
Ambitious Lines S.A. of 20 Federico Boyd Ave. and 51
st
Street,
P.O. Box 4493, Panama 5, Republic of Panama |
IMO Number:
|
9461130
|
Date and description of Contract:
|
Memorandum of agreement made between the Seller and the
relevant Owner dated 27 April 2015 as amended by addendum no.1 dated 20 May 2015 |
Contract Price:
|
$18,050,000
|
Ship Commitment:
|
$11,732,500
|
Flag State:
|
Republic of the Marshall Islands
|
Classification:
|
NS* (CSR, Bulk Carrier-Type A, BC-XII, GRAB 20)(ESP)(IWS)
(PSCM) MNS*
Descriptive Notes: (Strengthened for heavy cargo loading where
hold nos. 2,4 & 6 may be empty) |
Classification Society:
|
Nippon Kaiji Kyokai
|
Major Casualty Amount:
|
$1,000,000
|
1 | Original Obligors' corporate documents |
(a) | A copy of the Constitutional Documents of each Original Obligor. |
(b) | A copy of a resolution of the board of directors of each Original Obligor (or any committee of such board empowered to approve and authorise the following matters): |
(i) | approving the terms of, and the transactions contemplated by, the Finance Documents, any Contract or any Charter (Relevant Documents ) to which it is a party and resolving that it executes the Relevant Documents; |
(ii) | authorising a specified person or persons to execute the Relevant Documents on its behalf; and |
(iii) | authorising a specified person or persons, on its behalf, to sign and/or despatch all documents and notices (including, if relevant, any Utilisation Request) to be signed and/or despatched by it under or in connection with the Relevant Documents to which it is a party. |
(c) | If applicable, a copy of a resolution of the board of directors of the relevant company, establishing any committee referred to in paragraph (b) above and conferring authority on that committee. |
(d) | A certified copy of the passport of each person authorised by the resolution referred to in paragraph (b) above. |
(e) | A copy of a resolution signed by all the holders of the issued shares in each Original Obligor (except the Guarantor), approving the terms of, and the transactions contemplated by, the Relevant Documents to which such Obligor is a party. |
(f) | A certificate of the Guarantor (signed by a director) confirming that borrowing or guaranteeing or securing, as appropriate, the Total Commitments would not cause any borrowing, guaranteeing or similar limit binding on any Original Obligor to be exceeded. |
(g) | A copy of any power of attorney under which any person is to execute any of the Relevant Documents on behalf of any Original Obligor. |
(h) | A certificate of an authorised signatory of the relevant Original Obligor certifying that each copy document relating to it specified in this Part of this Schedule is correct, complete and in full force and effect as at a date no earlier than the date of this Agreement and that any such resolutions or power of attorney have not been revoked. |
(i) | A goodstanding certificate from the Marshall Islands competent authority in respect of each Original Obligor not more than 30 days before the first Utilisation is made. |
2 | Legal opinions |
(a) | A legal opinion of Norton Rose Fulbright Greece, addressed to the Arranger, the Security Agent and the Agent on matters of English law, substantially in the form approved by the Agent. |
(b) | A legal opinion of the legal advisers to the Arranger, the Security Agent and the Agent for each jurisdiction in which an Obligor is incorporated substantially in the form approved by the Agent. |
3 | Other documents and evidence |
(a) | Evidence that any process agent referred to in clause 47.2 (Service of process) or any equivalent provision of any other Finance Document entered into on or before the first Utilisation Date, if not an Original Obligor, has accepted its appointment. |
(b) | A copy of any other authorisation or other document, opinion or assurance which the Agent (acting on the instructions of the Majority Lenders) considers to be necessary or desirable (if it has notified the Borrowers accordingly) in connection with the entry into and performance of the transactions contemplated by any Finance Document or for the validity and enforceability of any Finance Document. |
(c) | The Original Financial Statements. |
(d) | Any Fee Letter duly executed and evidence that the fees, commissions, costs and expenses then due from the Borrowers pursuant to clause 11 (Fees) and clause 16 (Costs and expenses) have been paid or will be paid by the first Utilisation Date. |
4 | Bank Accounts |
5 | Contracts |
6 | Hedging Master Agreement and Hedging Contract Security |
(a) | the Hedging Master Agreement has been executed by the Borrowers and the Hedging Provider; |
(b) | the Borrowers have executed the Hedging Contract Security in favour of the Security Agent; and |
(c) | if applicable, any notice required to be given to the Hedging Provider under the Hedging Contract Security has been given to it and acknowledged by it in the manner required by the Hedging Contract Security. |
7 | Share Security |
8 | "Know your customer" information |
1 | Corporate documents |
(a) | A certificate of an authorised signatory of the relevant Owner certifying that each copy document relating to it specified in Part 1 of this Schedule remains correct, complete and in full force and effect as at a date no earlier than a date approved for this purpose and that any resolutions or power of attorney referred to in Part 1 of this Schedule in relation to it have not been revoked or amended. |
(b) | A certificate of an authorised signatory of each other Obligor which is party to any of the Original Security Documents required to be executed at or before Delivery of the relevant Ship certifying that each copy document relating to it specified in Part 1 of this Schedule remains correct, complete and in full force and effect as at a date no earlier than a date approved for this purpose and that any resolutions or power of attorney referred to in Part 1 of this Schedule in relation to it have not been revoked or amended. |
2 | Security |
(a) | The Mortgage and Deed of Covenant or General Assignment, in respect of the relevant Ship. |
(b) | If the relevant Ship is subject to a Charter on the relevant Utilisation Date, a copy of that Charter and any related Charter Documents and a Charter Assignment in respect of such Charter Documents for the relevant Ship. |
(c) | Any Manager's Undertaking required pursuant to the Finance Documents duly executed by the relevant Manager of the relevant Ship. |
(d) | Duly executed notices of assignment and acknowledgements of those notices as required by any of the above Security Documents or this Agreement, save for any acknowledgements required under any Charter Assignment. |
3 | Delivery and registration of Ship |
(a) | is legally and beneficially owned by the relevant Owner and registered in the name of the relevant Owner free from any Security Interests (other than Security Interests created under the Finance Documents) through the relevant Registry as a ship under the laws and flag of the relevant Flag State; |
(b) | is classed with the relevant Classification free of all requirements and overdue recommendations of the relevant Classification Society; and |
(c) | is insured in the manner required by the Finance Documents. |
4 | Mortgage registration |
5 | Insurance |
(a) | an opinion from insurance consultants appointed by the Agent on such Insurances; |
(b) | evidence that such Insurances have been placed in accordance with clause 24 (Insurance); and |
(c) | evidence that approved brokers, insurers and/or associations have issued or will issue letters of undertaking in favour of the Security Agent in an approved form in relation to the Insurances. |
6 | ISM and ISPS Code |
(a) | the document of compliance issued in accordance with the ISM Code to the person who is the operator of the relevant Ship for the purposes of that code; |
(b) | the safety management certificate in respect of the relevant Ship issued in accordance with the ISM Code (or evidence that such certificate is to be issued shortly after Delivery of the relevant Ship); |
(c) | the international ship security certificate in respect of the relevant Ship issued under the ISPS Code (or evidence that such certificate is to be issued shortly after Delivery of the relevant Ship); |
(d) | if so requested by the Agent, any other certificates issued under any applicable code required to be observed by the relevant Ship or in relation to its operation under any applicable law. |
7 | Value of security |
8 | Fees and expenses |
9 | Environmental matters |
10 | Management Agreement |
11 | Delivery |
12 | Contract Price |
13 | Delivery documents |
14 | Equity |
15 | Legal Opinions |
16 | Process Agent |
From: | Ujae Shipping Company Inc. |
To: | ING Bank N.V., London Branch as Agent |
Dated: | [ · ] |
1 | We refer to the Agreement. This is a Utilisation Request. Terms defined in the Agreement have the same meaning in this Utilisation Request unless given a different meaning in this Utilisation Request. |
2 | We wish to borrow Advance [A] [B] on the following terms: |
Proposed Utilisation Date: | [ · ] (or, if that is not a Business Day, the next Business Day) |
Amount: | $[ · ] |
3 | We confirm that each condition specified in clause 4.4 (Further conditions precedent) (including in relation to no Default and accuracy of representations and warranties) is satisfied on the date of this Utilisation Request. |
4 | This Advance is part of the Ship Commitment for Ship [A] [B] and the purpose of this Advance is [specify purpose complying with clause 3 of the Agreement] and its proceeds should be credited to [ · ] [specify account]. |
5 | We request that the first Interest Period for the said Advance be [ · ] months. |
6 | This Utilisation Request is irrevocable. |
From: | Ujae Shipping Company Inc. |
To: | ING Bank N.V., London Branch as Agent |
Dated: | [ · ] |
1 | We refer to the Agreement. This is a Selection Notice. Terms defined in the Agreement have the same meaning in this Selection Notice unless given a different meaning in this Selection Notice. |
2 | We request that the next Interest Period for Advance [ · ] be [A] [B] months. |
3 | This Selection Notice is irrevocable. |
To: | [ · ], as Agent |
From: | [The Existing Lender] (the Existing Lender ) and [The New Lender] (the New Lender ) |
1 | We refer to the Agreement. This is a Transfer Certificate. Terms defined in the Agreement have the same meaning in this Transfer Certificate unless given a different meaning in this Transfer Certificate. |
2 | We refer to clause 32.6 (Procedure for transfer): |
(a) | The Existing Lender and the New Lender agree to the Existing Lender assigning to the New Lender all or part of the Existing Lender's Commitment rights and assuming the Existing Lender's obligations referred to in the Schedule in accordance with clause 32.6 (Procedure for transfer) and the Existing Lender assigns and agrees to assign such rights to the New Lender with effect from the Transfer Date] |
(b) | The proposed Transfer Date is [s]. |
(c) | The Facility Office and address, fax number and attention details for notices of the New Lender for the purposes of clause 39.2 (Addresses) are set out in the Schedule. |
3 | The New Lender expressly acknowledges the limitations on the Existing Lender's obligations set out in clause 32.5.3. |
4 | The New Lender confirms that it is [not] a Guarantor Affiliate. |
5 | This Transfer Certificate may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Transfer Certificate. |
6 | [ Consider including reference to accession to an intercreditor agreement, mortgage or other Finance Documents to which Lenders may need to be party and checklist of steps necessary for the New Lender to obtain the benefit of the Security Documents .] |
7 | This Transfer Certificate and any non-contractual obligations connected with it are governed by English law. |
8 | This Transfer Certificate has been entered into on the date stated at the beginning of this Transfer Certificate. |
Dated: | [ · ] |
1 | We refer to the Agreement. This is a Compliance Certificate. Terms defined in clause 20.1 (Financial definitions) of the Agreement and otherwise in the Agreement have the same meaning when used in this Compliance Certificate unless given a different meaning in this Compliance Certificate. |
2 | I/We confirm that, as at the end of the Measurement Period ended on [ · ]: |
(a) | Market Value Adjusted Net Worth: the Market Value Adjusted Net Worth was $[ · ], calculated [as shown in Appendix A] and compared against a minimum required amount of $[ · ]. |
(b) | Minimum liquidity: the Group's Cash and Cash Equivalents are $[ · ] calculated [as shown in Appendix B] and compared against the minimum required amount of $[ · ]. |
3 | We confirm that the Security Value is $[ · ] calculated [as shown in Appendix C], compared against a Minimum Value of $[ · ]. |
4 | [We confirm that no Default is continuing.] [If this statement cannot be made, the certificate should identify any Default that is continuing and the steps, if any, being taken to remedy it.] |
1 | We refer to clause 33.2.3 (Disenfranchisement on Debt Purchase Transactions entered into by Guarantor Affiliates) of the Facility Agreement. Terms defined in the Facility Agreement have the same meaning in this notice unless given a different meaning in this notice. |
2 | We have entered into a Notifiable Debt Purchase Transaction. |
3 | The Notifiable Debt Purchase Transaction referred to in paragraph 2 above relates to the amount of our Commitment(s) as set out below. |
Commitment
|
Amount of our Commitment to which Notifiable Debt Purchase Transaction relates
|
|
[
·
]
|
[insert amount (of Commitment) to which the relevant Debt Purchase Transaction applies]
|
1 | We refer to clause 33.2.3 (Disenfranchisement on Debt Purchase Transactions entered into by Guarantor Affiliates) of the Facility Agreement. Terms defined in the Facility Agreement have the same meaning in this notice unless given a different meaning in this notice. |
2 | A Notifiable Debt Purchase Transaction which we entered into and which we notified you of in a notice dated [ · ] has [terminated]/[ceased to be with a Guarantor Affiliate]. |
3 | The Notifiable Debt Purchase Transaction referred to in paragraph 2 above relates to the amount of our Commitment(s) as set out below. |
Commitment
|
Amount of our Commitment to which Notifiable Debt Purchase Transaction relates (Base Currency)
|
|
[
·
]
|
[insert amount (of Commitment) to which the relevant Debt Purchase Transaction applies]
|
BORROWER
|
|
|
|
|
||||
|
|
|
|
|
||||
UJAE SHIPPING COMPANY INC.
|
|
|
||||||
|
||||||||
By
|
Ioannis Zafirakis
|
/s/ Ioannis Zafirakis
|
|
RAIROK SHIPPING COMPANY INC.
|
|
|
||||||
|
||||||||
By
|
Anastasios Margaronis
|
/s/ Anastasios Margaronis
|
|
THE GUARANTOR
|
|
|
|
|
||||
|
|
|
|
|
||||
DIANA SHIPPING INC.
|
|
|
||||||
EXECUTED
as a
DEED
|
||||||||
|
||||||||
By
|
Andreas Michalopoulos
|
/s/ Andreas Michalopoulos
|
|
in the presence of:
|
|
|||||
/s/ Emmanouil Chamilothris |
||||||
Witness Name:
|
Emmanouil Chamilothris
|
|||||
Address:
|
Attorney
|
|||||
Occupation:
|
Norton Rose Fullbright Greece
|
THE ARRANGER
|
|
|
|
|
||||
|
|
|
|
|
||||
ING BANK N.V., LONDON BRANCH
|
|
|
||||||
|
||||||||
By
|
Irini Proukaki
|
/s/ Irini Proukaki
|
|
|||||
Solicitor
|
||||||||
Norton Rose Fullbright Greece
|
THE AGENT
|
|
|
|
|
||||
|
|
|
|
|
||||
ING BANK N.V., LONDON BRANCH
|
|
|
||||||
|
||||||||
By
|
Irini Proukaki
|
/s/ Irini Proukaki
|
|
|||||
Solicitor
|
||||||||
Norton Rose Fullbright Greece
|
THE SECURITY AGENT
|
|
|
|
|
||||
|
|
|
|
|
||||
ING BANK N.V., LONDON BRANCH
|
|
|
||||||
|
||||||||
By
|
Irini Proukaki
|
/s/ Irini Proukaki
|
|
|||||
Solicitor
|
||||||||
Norton Rose Fullbright Greece
|
THE ORIGINAL LENDERS
|
|
|
|
|
||||
|
|
|
|
|
||||
ING BANK N.V., LONDON BRANCH
|
|
|
||||||
|
||||||||
By
|
Irini Proukaki
|
/s/ Irini Proukaki
|
|
|||||
Solicitor
|
||||||||
Norton Rose Fullbright Greece
|
THE HEDGING PROVIDER
|
|
|
|
|
||||
|
|
|
|
|
||||
ING BANK N.V.
|
|
|
||||||
|
||||||||
By
|
Irini Proukaki
|
/s/ Irini Proukaki
|
|
|||||
Solicitor
|
||||||||
Norton Rose Fullbright Greece
|
Page
|
||
1
|
Definitions and Interpretation
|
1
|
2
|
The Loan and its Purpose
|
12
|
3
|
Conditions of Utilisation
|
13
|
4
|
Advance
|
14
|
5
|
Repayment
|
14
|
6
|
Prepayment
|
15
|
7
|
Interest
|
16
|
8
|
Indemnities
|
18
|
9
|
Fees
|
22
|
10
|
Security and Application of Moneys
|
22
|
11
|
Representations
|
26
|
12
|
Undertakings and Covenants
|
28
|
13
|
Events of Default
|
36
|
14
|
Assignment and Sub-Participation
|
40
|
15
|
The Agent, the Security Agent and the Lenders
|
42
|
16
|
Set-Off
|
49
|
17
|
Payments
|
49
|
18
|
Notices
|
51
|
19
|
Partial Invalidity
|
53
|
20
|
Remedies and Waivers
|
53
|
21
|
Joint and several liability
|
53
|
22
|
Miscellaneous
|
55
|
23
|
Law and Jurisdiction
|
56
|
Schedule 1
|
The Lenders and the Arrangers
|
57
|
Part 1The Lenders and the Commitments
|
57
|
|
Part 2 The Arrangers
|
58
|
|
Schedule 2
|
Conditions Precedent and Subsequent
|
59
|
Part 1 Conditions precedent
|
59
|
|
Part 2 Conditions subsequent
|
64
|
|
Schedule 3
|
Form of Drawdown Notice
|
65
|
Schedule 4
|
Form of Transfer Certificate
|
67
|
Schedule 5
|
Form of Compliance Certificate
|
70
|
(1 ) | Aster Shipping Company Inc. , Aerik Shipping Company Inc. and Houk Shipping Company Inc. , each a company incorporated under the laws of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, Marshall Islands (together the " Borrowers " and each a " Borrower " ) jointly and severally; and |
(2 ) | the banks listed in Schedule 1, Part 1 ( The Lenders and the Commitments ) , each acting as lender through its office at the address indicated against its name in Schedule 1, Part I (together the " Lenders " and each a " Lender " ); and |
(3 ) | the banks listed in Schedule 1, Part 2 ( The Arrangers ) , each acting as arranger through its office at the address indicated against its name in Schedule 1, Part 2 (together the "Arrangers" and each an " Arranger " ); and |
(4 ) | The Export-Import Bank Of China, acting as agent through its office at No. 30, Fu Xing Men Nei Street, Xicheng District, Beijing 100031, The People's Republic of China (in that capacity the " Agent " ); and |
(5 ) | The Export-Import Bank Of China, acting as security agent through its office at No. 30, Fu Xing Men Nei Street, Xicheng District, Beijing 100031, The People's Republic of China (in that capacity the " Security Agent " ) . |
(A) | Each Borrower has agreed to purchase the relevant Vessel from the relevant Builder on the terms of the relevant Building Contract and intends to register that Vessel under an Approved Flag. |
(B) | Each of the Lenders has agreed to advance to the Borrowers on a joint and several basis its Commitment (aggregating, with all the other Commitments up to the Maximum Loan Amount) in three (3) Tranches to assist the Borrowers to finance part of the acquisition cost of the Vessels. |
1 | Definitions and Interpretation |
1.1 | In this Agreement : |
(a) | in respect of Vessel A and Vessel B, Jiangnan Shipyard (Group) Co., Ltd., a company incorporated under the laws of the People's Republic of China with its registered office at 988, Changxing Jiangnan Road, Changxing District, Chongming County, Shanghai 201913, the People's Republic of China; and |
(b) | in respect of Vessel C, Yangzhou Dayang Shipbuilding Co., Ltd., a company incorporated under the laws of the People's Republic of China with its registered office at Lidian town, Hanjiang District, Yangzhou City, Jiangsu Province 225006, the People's Republic of China, |
(a) | in respect of Vessel A and Vessel B, the two contracts each dated 17 May 2013; and |
(b) | in respect of Vessel C, the contract dated 8 January 2014, as amended by an addendum no. 1 dated 21 April 2014. |
(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) | in relation to a "withholdable payment" described in section 1473(1)(A)(i) of the Code (which relates to payments of interest and certain other payments from sources within the US), 1 July 2014; |
(b) | in relation to a "withholdable payment" described in section 1473(1)(A)(ii) of the Code (which relates to "gross proceeds" from the disposition of property of a type that can produce interest from sources within the US), 1 January 2017; or |
(c) | in relation to a "passthru payment" described in section 1471(d)(7) of the Code not falling within paragraphs (a) or (b) above, 1 January 2017, |
(a) | moneys borrowed or raised and debit balances at banks; |
(b) | any acceptance or documentary credit facilities; |
(c) | any bond, note, debenture, loan stock or similar debt instrument; |
(d) | any finance leases and hire purchase contracts; |
(e) | receivables sold or discounted (other than on a non-recourse basis); |
(f) | swaps, forward exchange contracts, futures and other derivatives; |
(g) | any other transaction (including without limitation forward sale or purchase agreements) having the commercial effect of a borrowing or raising of money or of any of (b) to (f) above; and |
(h) | guarantees in respect of indebtedness of any person falling within any of (a) to (g) above. |
(a) | the applicable Screen Rate; or |
(b) | (if no Screen Rate is available for any Interest Period) the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Agent at its request by leading banks in the London interbank market, |
(a) | in respect of Tranche A, an amount not exceeding the lesser of (i) twenty nine million and two hundred and twenty thousand Dollars ($29,220,000) and (ii) seventy per cent (70%) of the Fair Market Value of Vessel A on the basis of the valuations to be obtained by the Agent pursuant to Clause 3.1 ( Conditions precedent ) ; |
(b) | in respect of Tranche B, an amount not exceeding the lesser of (i) twenty nine million and two hundred and twenty thousand Dollars ($29,220,000) and (ii) seventy per cent (70%) of the Fair Market Value of Vessel B on the basis of the valuations to be obtained by the Agent pursuant to Clause 3.1 ( Conditions precedent ) ; |
(c) | in respect of Tranche C, an amount not exceeding the lesser of (i) seventeen million and two hundred and ninety four thousand and nine hundred Dollars ($17,294,900) and (ii) seventy per cent (70%) of the Fair Market Value of Vessel C on the basis of the valuations to be obtained by the Agent pursuant to Clause 3.1 ( Conditions precedent ). |
(a) | Mr Simeon Palios; |
(b) | all the lineal descendants in direct line of Mr Palios; |
(c) | a husband or wife or widower or widow of any of the above persons; |
(d) | the estates, trusts or legal representatives of which any of the above persons are the beneficiaries; and |
(e) | each company legally or beneficially owned or (as the case may be) controlled by one or more of the persons or entities which would fall within paragraphs (a) to (d) of this definition, |
(a) | an actual, constructive, arranged, agreed or compromised total loss of a Vessel; or |
(b) | the requisition for title or compulsory acquisition of a Vessel by any government or other competent authority (other than by way of requisition for hire); or |
(c) | the capture, seizure, arrest, detention, hijacking, theft, condemnation as prize, confiscation or forfeiture of a Vessel (not falling within (b) above), unless that Vessel is released and returned to the possession of the relevant Borrower within thirty (30) days after the capture, seizure, arrest, detention, hijacking, theft, condemnation as prize, confiscation or forfeiture in question. |
(a) | the proposed Transfer Date specified in the Transfer Certificate; and |
(b) | the date on which the Agent executes the Transfer Certificate. |
(a) | all benefits derived by the Security Agent from Clause 10 ( Security and Application of Moneys ) ; and |
(b) | all benefits arising under (including, without limitation, all proceeds of the enforcement of) each of the Security Documents, |
(a) | a Borrower which is resident for tax purposes in the US; or |
(b) | a Security Party some or all of whose payments under the Finance Documents are from sources within the US for US federal income tax purposes. |
1.2 | In this Agreement : |
1.2.1 | words denoting the plural number include the singular and vice versa; |
1.2.2 | words denoting persons include corporations, partnerships, associations of persons (whether incorporated or not) or governmental or quasi-governmental bodies or authorities and vice versa; |
1.2.3 | references to Recitals, Clauses and Schedules are references to recitals, clauses and schedules to or of this Agreement; |
1.2.4 | references to this Agreement include the Recitals and the Schedules; |
1.2.5 | the headings and contents page(s) are for the purpose of reference only, have no legal or other significance, and shall be ignored in the interpretation of this Agreement; |
1.2.6 | references to any document (including, without limitation, to all or any of the Relevant Documents) are, unless the context otherwise requires, references to that document as amended, supplemented, novated or replaced from time to time; |
1.2.7 | references to " indebtedness " include any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent; |
1.2.8 | references to statutes or provisions of statutes are references to those statutes, or those provisions, as from time to time amended, replaced or re-enacted; |
1.2.9 | references to any Finance Party include its successors, transferees and assignees; and |
1.2.10 | a time of day (unless otherwise specified) is a reference to London time. |
1.3 | Offer letter |
2 | The Loan and its Purpose |
2.1 | Amount |
2.2 | Finance Parties' obligations |
2.3 | Purpose |
2.4 | Monitoring |
3 | Conditions of Utilisation |
3.1 | Conditions precedent |
3.2 | Further conditions precedent |
3.2.1 | no Default has occurred or would result from the advance of that Tranche; |
3.2.2 | the representations made by the Borrowers under Clause 11 (Representations) are true in all material respects; and |
3.2.3 | no event or series of events has occurred which, in the opinion of the Agent, is likely to have a materially adverse effect on the business, assets, financial condition or credit worthiness of a Security Party. |
3.3 | Tranche limit |
3.4 | Conditions subsequent |
3.5 | No waiver |
3.6 | Form and content |
3.6.1 | be in form and substance acceptable to the Agent; and |
3.6.2 | if required by the Agent, be certified, notarised, legalised or attested in a manner acceptable to the Agent. |
4 | Advance |
4.1 | Drawdown Request |
4.2 | Lenders' participation |
4.3 | Prepositioning of funds |
5 | Repayment |
5.1 | Repayment of Tranches |
Tranche A
|
$487,000.00
|
Tranche A
|
$487,000.00
|
|
Tranche B
|
$487,000.00
|
|
Tranche C
|
$288,248.33
|
5.1.1 | whichever of 21 January, 21 April, 21 July or 21 October that next falls after the 59th instalment; and |
5.1.2 | the Final Maturity Date in respect of that Tranche. |
5.2 | Reduction of Repayment Instalments |
5.3 | Reborrowing |
6 | Prepayment |
6.1 | Illegality |
6.1.1 | that Lender shall promptly notify the Agent of that event; |
6.1.2 | upon the Agent notifying the Borrowers, such Lender's Commitment (to the extent not already advanced) will be immediately cancelled; and |
6.1.3 | the Borrowers shall repay a sum equal to such Lender's Commitment in respect of each Tranche (to the extent already advanced) on the last day of its current Interest Period or, if earlier, the date specified by that Lender in the notice delivered to the Agent and notified by the Agent to the Borrowers (being no earlier than the last day of any applicable grace period permitted by law) and the remaining Repayment Instalments in respect of that Tranche shall be reduced pro rata. |
6.2 | Voluntary prepayment of Tranches |
6.2.1 | they give the Agent not less than fifteen (15) Business Days' prior written notice; |
6.2.2 | no prepayment may be made until after the relevant Availability Termination Date; and |
6.2.3 | any prepayment under this Clause 6.2 shall be applied in prepayment of the remaining Repayment Instalments in respect of the relevant Tranche in inverse order of maturity. |
6.3 | Mandatory prepayment on sale or Total Loss |
6.4 | Restrictions |
7 | Interest |
7.1 | Interest Periods |
7.2 | Beginning and end of Interest Periods |
7.3 | Interest Periods to meet Repayment Dates |
7.4 | Non-Business Days |
7.5 | Interest rate |
7.6 | Accrual and payment of interest |
7.7 | Default interest |
7.8 | Alternative interest rate |
7.8.1 | the Agent shall give notice to the Lenders and the Borrowers of the occurrence of such event; and |
7.8.2 | the rate of interest on the relevant Lender's Commitment for that Interest Period shall be the rate per annum which is the sum of: |
(a) | the Margin; and |
(b) | the rate notified to the Agent by that Lender as soon as practicable, and in any event before interest is due to be paid in respect of that Interest Period, to be that which expresses as a percentage rate per annum the cost to that Lender of funding its Commitment from whatever source it may reasonably select. |
7.9 | Determinations conclusive |
8 | Indemnities |
8.1 | Transaction expenses |
8.1.1 | the negotiation, preparation, printing, execution, syndication and distribution of information under this Agreement and registration of the Finance Documents (whether or not any Finance Document is actually executed or registered and whether or not all or any part of the Loan is advanced); |
8.1.2 | any amendment, addendum or supplement to any Finance Document (whether or not completed) (other than any amendment, addendum or supplement to any Finance Document made pursuant to Clause 14 ( Assignment and Sub-Participation )) ; |
8.1.3 | any other document which may at any time be required by a Finance Party to give effect to any Finance Document or which a Finance Party is entitled to call for or obtain under any Finance Document (including, without limitation, any valuation of the Vessels obtained in accordance with this Agreement and any insurance report); and |
8.1.4 | any discharge, release or reassignment of any of the Security Documents. |
8.2 | Funding costs |
8.3 | Break Costs |
8.4 | Currency indemnity |
8.5 | Increased costs (subject to Clause 8.6 ( Exceptions to increased costs )) |
8.5.1 | a Finance Party (or the holding company of a Finance Party) shall be subject to any Tax with respect to payment of all or any part of the Indebtedness (other than Tax on overall net income); or |
8.5.2 | the basis of Taxation of payments to a Finance Party in respect of all or any part of the Indebtedness shall be changed; or |
8.5.3 | any reserve requirements shall be imposed, modified or deemed applicable against assets held by or deposits in or for the account of or loans by any branch of a Finance Party; or |
8.5.4 | the manner in which a Finance Party allocates capital resources to its obligations under this Agreement or any ratio (whether cash, capital |
8.5.5 | there is imposed on a Finance Party (or on the holding company of a Finance Party) any other condition in relation to the Indebtedness or the Finance Documents; |
8.6 | Exceptions to increased costs |
8.6.1 | compensated for by a payment made under Clause 8.10 ( Taxes ) ; or |
8.6.2 | compensated for by a payment made under Clause 17.3 ( Grossing-up ); or |
8.6.3 | attributable to a FATCA Deduction required to be made by a Party; or |
8.6.4 | attributable to the wilful breach by the relevant Finance Party (or the holding company of that Finance Party) of any law or regulation. |
8.7 | Events of Default |
8.8 | Enforcement costs |
8.9 | Other costs |
8.10 | Taxes |
8.11 | Mitigation |
9 | Fees |
9.1 | Commitment fee |
9.2 | Arrangement fee |
10 | Security and Application of Moneys |
10.1 | Security Documents |
10.1.1 | first preferred cross-collaterised mortgages over the Vessels; |
10.1.2 | first priority deeds of assignment of the Insurances, Earnings and Requisition Compensation of the Vessels; |
10.1.3 | a guarantee and indemnity from the Guarantor; |
10.1.4 | first priority deeds of charge over the Earnings Accounts and all amounts from time to time standing to the credit of the Earnings Accounts; |
10.1.5 | first priority negative pledges in respect of all the issued shares of the Borrowers from the Pledgor; |
10.1.6 | letters of undertaking and subordination (including an assignment of Insurances) in respect of the Vessels from the Managers; and |
10.1.7 | first priority deeds of assignment of any Charter. |
10.2 | Earnings Accounts |
10.3 | Earnings |
10.4 | Application of Earnings Accounts |
10.4.1 | on each Repayment Date in respect of a Tranche, the amount of the Repayment Instalment then due; and |
10.4.2 | on each Interest Payment Date in respect of the relevant Tranche, the amount of interest then due, |
10.5 | Borrowers' obligations not affected |
10.6 | Withdrawals |
10.7 | Access to information |
10.8 | Statements |
10.9 | Application after acceleration |
10.10 | Application of moneys by Security Agent |
10.10.1 | pursuant to a sale or other disposition of a Vessel or any right, title or interest in a Vessel; or |
10.10.2 | by way of payment of any sum in respect of the Insurances, Earnings or Requisition Compensation; or |
10.10.3 | by way of transfer of any sum from any of the Earnings Accounts; or |
10.10.4 | otherwise under or in connection with any Security Document, |
10.10.5 | first, any unpaid fees, costs, expenses and default interest due to the Agent and the Security Agent under all or any of the Finance Documents, such application to be apportioned between the Agent and the Security Agent pro rata to the aggregate amount of such items due to each of them; |
10.10.6 | second, any unpaid fees, costs, expenses (including any sums paid by the Lenders under Clause 15.12 ( Indemnity) ) of the Lenders due under this Agreement, such application to be apportioned between the Lenders pro rata to the aggregate amount of such items due to each of them; |
10.10.7 | third, any accrued but unpaid default interest due to the Lenders under this Agreement, such application to be apportioned between the Lenders pro rata to the aggregate amount of such default interest due to each of them; |
10.10.8 | fourth, any other accrued but unpaid interest due to the Lenders under this Agreement, such application to be apportioned between the Lenders pro rata to the aggregate amount of such interest due to each of them; |
10.10.9 | fifth, any principal of the Loan due and payable but unpaid under this Agreement, such application to be apportioned between the Lenders pro rata to each Lender's Proportionate Share; and |
10.10.10 | sixth, any other sum due and payable to any Finance Party but unpaid under all or any of the Finance Documents, such application to be apportioned between the Finance Parties pro rata to the aggregate amount of any such sum due to each of them; |
10.11 | Retention on account |
10.12 | Additional security |
10.12.1 | pay to the Security Agent or to its nominee a cash deposit in the amount of the shortfall to be held in the Earnings Accounts and secured in favour of the Security Agent as additional security for the payment of the Indebtedness; or |
10.12.2 | give to the Security Agent other additional security in amount and form acceptable to the Security Agent in its discretion; or |
10.12.3 | prepay the Loan in the amount of the shortfall. |
10.13 | Fair Market Value determination |
10.13.1 | For the purposes of Clause 10.12 ( Additional Security ), the Fair Market Value of each Vessel shall be determined by one valuation, or (if a breach of Clause 10.12 ( Additional Security ) or an Event of Default has occurred) by |
10.13.2 | For the purposes of Clause 3.1 ( Conditions precedent ), the Fair Market Value of a Vessel shall be determined by the average of two (2) valuations in accordance with the valuation method and on the terms and conditions as set out in Clause 10.13.1. |
11 | Representations |
11.1 | Representations |
11.1.1 | Status Each Security Party (which is not an individual) is a corporation, duly incorporated and validly existing under the law of its jurisdiction of incorporation and has the power to own its assets and carry on its business as it is being conducted. |
11.1.2 | Binding obligations The obligations expressed to be assumed by each Security Party in each Finance Document to which it is a party are legal, valid, binding and enforceable obligations. |
11.1.3 | Non-conflict with other obligations The entry into and performance by each Security Party of, and the transactions contemplated by, the Finance Documents do not conflict with: |
(a) | any law or regulation applicable to that Security Party; |
(b) | the constitutional documents of that Security Party; or |
(c) | any document binding on that Security Party or any of its assets, |
11.1.4 | Power and authority Each Security Party has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, the Finance Documents to which it is a party and the transactions contemplated by those Finance Documents. |
11.1.5 | Validity and admissibility in evidence All consents, licences, approvals, authorisations, filings and registrations required or desirable: |
(a) | to enable each Security Party lawfully to enter into, exercise its rights and comply with its obligations in the Finance Documents to which it is a party or to enable each Finance Party to enforce and exercise all its rights under the Finance Documents; and |
(b) | to make the Finance Documents to which any Security Party is a party admissible in evidence in its jurisdiction of incorporation, |
11.1.6 | Governing law and enforcement The choice of a particular law as the governing law of any Finance Document expressed to be governed by that law will be recognised and enforced in the jurisdiction of incorporation of each relevant Security Party, and any judgment obtained in the jurisdiction submitted to in any Finance Document will be recognised and enforced in the jurisdiction of incorporation of each relevant Security Party. |
11.1.7 | Deduction of Tax No Security Party is required under the law of its jurisdiction of incorporation to make any deduction for or on account of Tax from any payment it may make under any Finance Document. |
11.1.8 | No filing or stamp taxes Under the law of jurisdiction of incorporation of each relevant Security Party it is not necessary that the Finance Documents be filed, recorded or enrolled with any court or other authority in that jurisdiction or that any stamp, registration or similar tax be paid on or in relation to the Finance Documents or the transactions contemplated by the Finance Documents. |
11.1.9 | No default No Event of Default is continuing or might be expected to result from the advance of a Tranche. |
11.1.10 | No misleading information Any factual information provided by any Security Party to any Finance Party was true and accurate in all material respects as at the date it was provided. |
11.1.11 | Pari passu ranking The payment obligations of each Security Party under the Finance Documents to which it is a party rank at least pail passu with the claims of all its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies generally. |
11.1.12 | No proceedings pending or threatened No litigation, arbitration or administrative proceedings of or before any court, arbitral body or agency |
11.1.13 | Disclosure of material facts The Borrowers are not aware of any material facts or circumstances which have not been disclosed to the Agent and which might, if disclosed, have adversely affected the decision of a person considering whether or not to make loan facilities of the nature contemplated by this Agreement available to the Borrowers. |
11.1.14 | Completeness of Relevant Documents The copies of any Relevant Documents provided or to be provided by the Borrowers to the Agent in accordance with Clause 3 ( Conditions of Utilisation ) are, or will be, true and accurate copies of the originals and represent, or will represent, the full agreement between the parties to those Relevant Documents in relation to the subject matter of those Relevant Documents and there are no commissions, rebates, premiums or other payments due or to become due in connection with the subject matter of those Relevant Documents other than in the ordinary course of business or as disclosed to, and approved in writing by, the Agent. |
11.1.15 | Environmental compliance The Borrowers comply with all applicable Environmental Laws, all required governmental approvals and all requirements relating to the establishment of financial responsibility. |
11.2 | Repetition Each representation and warranty in Clause 11.1 ( Representations ) is deemed to be repeated by the Borrowers by reference to the facts and circumstances then existing on the date of each Drawdown Notice and the first day of each Interest Period. |
12 | Undertakings and Covenants |
12.1 | Information undertakings |
12.1.1 | Financial statements The Borrowers shall procure that the Guarantor shall supply to the Agent as soon as the same become available, but in any event within one hundred and eighty (180) days after the end of each of the Guarantor's financial years, the Group's annual audited consolidated financial statements for that financial year, in each case together with a Compliance Certificate, signed by the Chief Finance Officer of the Guarantor, setting out (in reasonable detail) computations as to compliance with Clause 12.1 ( Financial covenants ) and Clause 10.12 ( Additional Security ) as at the date as at which those financial statements were drawn up. |
12.1.2 | Requirements as to financial statements Each set of financial statements delivered by the Guarantor under Clause 12.1.1 ( Financial statements ): |
(a) | shall be certified by a director of the Guarantor as fairly representing its financial condition as at the date as at which those financial statements were drawn up; and |
(b) | shall be prepared using GAAP, accounting practices and financial reference periods consistent with those applied in the preparation of the Original Financial Statements unless, in relation to any set of financial statements, the Guarantor notifies the Agent that there has been a change in GAAP, the accounting practices or reference periods and the Guarantor's auditors deliver to the Agent: |
( i ) | a description of any change necessary for those financial statements to reflect the GAAP, accounting practices and reference periods upon which the Original Financial Statements were prepared; and |
(ii) | sufficient information, in form and substance as may be reasonably required by the Agent, to enable the Agent to make an accurate comparison between the financial position indicated in those financial statements and that indicated in the Original Financial Statements. |
12.1.3 | Interim financial statements The Borrowers shall procure that the Guarantor shall supply to the Agent as soon as the same become available, but in any event within ninety (90) days after the end of each quarter during each of the Guarantor's financial years, the Group's consolidated unaudited quarterly financial statements for that quarter, in each case together with a Compliance Certificate, signed by the Chief Financial Officer of the Guarantor, setting out (in reasonable detail) computations as to compliance with Clause 12.2 ( Financial covenants ) and Clause 10.12 ( Additional Security ) as at the date as at which those financial statements were drawn up. |
12.1.4 | Information: miscellaneous The Borrowers shall, and shall procure that the Guarantor shall supply to the Agent: |
(a) | all documents dispatched by a Borrower or the Guarantor to its shareholders (or any class of them) or its creditors generally at the same time as they are dispatched; |
(b) | promptly upon becoming aware of them, details of any material litigation, arbitration or administrative proceedings which are current, threatened or pending against any Security Party, and which might, if adversely determined, have a materially adverse effect on the business, assets, financial condition or credit worthiness of that Security Party; and |
(c) | promptly, such further information regarding the financial condition, business and operations of any Security Party as the Agent may reasonably request and which can be provided to the Agent without breaching any rules of confidentiality including, |
12.1.5 | Notification of default |
(a) | The Borrowers shall notify the Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence. |
(b) | Promptly upon a request by the Agent, each Borrower shall supply to the Agent a certificate signed by two of its directors or senior officers on its behalf certifying that no Default is continuing (or if a Default is continuing, specifying the Default and the steps, if any, being taken to remedy it). |
12.1.6 | " Know your customer " checks If: |
(a) | the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement; |
(b) | any change in the status of a Borrower 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, |
12.2 | Financial covenants |
12.2.1 | Each Borrower shall, from the relevant Drawdown Date and throughout the Facility Period, maintain in its Earnings Account a credit balance of not less than two hundred thousand Dollars ($200,000) for its Vessel. |
12.2.2 | The Borrowers shall procure that the Guarantor shall (A) maintain from the first Drawdown Date and throughout the Facility Period Cash of not less than five hundred thousand Dollars ($500,000) for each Fleet Vessel and (B) maintain the following financial ratios on a consolidated basis throughout the Facility Period: |
(a) | Adjusted Net Worth shall not be less than one hundred and fifty million Dollars ($150,000,000); and |
(b) | Adjusted Net Worth shall exceed twenty five per cent (25%) of the Total Assets. |
(a) | any Financial Indebtedness of the debtor; |
(b) | liability of any credit to the debtor from a supplier of goods or services or under any instalment purchase or payment plan or other similar arrangement; |
(c) | contingent liabilities of the debtor (including without limitation any taxes or other payments under dispute) which have been or, under GAAP, should be recorded in the notes to the Accounting Information; |
(d) | any deferred tax of the debtor; and |
(e) | liability under a guarantee, indemnity or similar obligation entered into by the debtor in respect of a liability of another person who is not a member of |
12.2.3 | General undertakings |
12.2.4 | Authorisations The Borrowers shall promptly: |
(a) | obtain, comply with and do all that is necessary to maintain in full force and effect; and |
(b) | supply certified copies to the Agent of, |
12.2.5 | Compliance with laws Each Borrower shall comply in all respects with all laws to which it may be subject, if failure so to comply would materially impair its ability to perform its obligations under the Finance Documents. |
12.2.6 | Conduct of business Each Borrower shall carry on and conduct its business in a proper and efficient manner, file all requisite tax returns and pay all tax which becomes due and payable (except where contested in good faith). |
12.2.7 | Evidence of good standing The Borrowers will from time to time if requested by the Agent provide the Agent with evidence in form and substance satisfactory to the Agent that the Security Parties and all corporate shareholders of any Security Party (other than the Guarantor) remain in good standing. |
12.2.8 | Negative pledge and no disposals No Borrower shall without the prior written consent of the Agent create nor permit to subsist any Encumbrance or other third party rights (other than a Permitted Encumbrance) over any of its present or future assets or undertaking nor dispose of any of those assets or of all or part of that undertaking. |
12.2.9 | Merger No Borrower nor the Guarantor shall without the prior written consent of the Agent enter into any amalgamation, demerger, merger or corporate reconstruction. |
12.2.10 | Change of business or corporate structure No Borrower nor the Guarantor shall without the prior written consent of the Lenders make any substantial change to (a) the general nature of its business from that carried on at the date of this Agreement or (b) the corporate structure of the Borrowers as at the date of this Agreement. |
12.2.11 | No other business No Borrower shall without the prior written consent of the Agent engage in any business other than the ownership, operation, chartering and management of its Vessel. |
12.2.12 | No borrowings No Borrower shall without the prior written consent of the Agent borrow any money (except for the Loan and normal trade credit in the ordinary course of business) nor incur any obligations under leases. |
12.2.13 | Subordination of shareholder loans The Borrowers shall procure that any shareholder loans and/or inter company borrowings or other indebtedness permitted by the terms of this Agreement are fully subordinated to the Indebtedness on terms acceptable to the Agent. |
12.2.14 | No substantial liabilities Except in the ordinary course of business, no Borrower shall without the prior written consent of the Agent incur any liability to any third party which is in the Agent's opinion of a substantial nature. |
12.2.15 | No loans or other financial commitments No Borrower shall without the prior written consent of the Agent make any loan nor enter into any guarantee or indemnity or otherwise voluntarily assume any actual or contingent liability in respect of any obligation of any other person except for loans made or guarantees or indemnities from time to time required by any protection and indemnity or war risks association in the ordinary course of business in connection with the chartering, operation or repair of its Vessel. |
12.2.16 | No dividends or reduction of share capital No Borrower shall without the prior written consent of the Agent (A) pay or declare any dividends or make any other distributions to shareholders provided however that a Borrower may pay or declare dividends or make distributions to the Guarantor if no Event of Default has occurred and is continuing at the time of such payment or declaration or distribution or would occur as a result thereof or (B) issue any new shares or (C) reduce its share capital as at the date of this Agreement. |
12.2.17 | Inspection of records Each Borrower will permit the inspection of its financial records and accounts from time to time by the Agent or its nominee. |
12.2.18 | Transactions with affiliated companies No Borrower shall without the prior written consent of the Agent, enter into any transactions (except on arm's length terms) with any affiliated companies. |
12.2.19 | No change in Relevant Documents The Borrowers shall procure that, without the prior written consent of the Agent, there shall be no termination of, alteration to, or waiver of any material, in the Agent's opinion, term of, any of the Relevant Documents which are not Finance Documents. |
12.2.20 | No change in ownership and control Each Borrower undertakes that its ownership shall remain at all times a wholly owned direct or indirect Subsidiary of the Guarantor throughout the Facility Period and shall not permit any change thereof without the prior written consent of the Agent. |
12.2.21 | Ownership of the Guarantor The Borrowers shall procure that, at all times during the Facility Period, the Palios Family shall (a) remain the major legal owner or ultimate beneficial owner of the Guarantor (excluding any financial institution acting as a passive investor) and (b) Mr Simeon Palios or Mr Anastasios Margaronis hold an executive position within the management structure of the Guarantor. |
12.2.22 | No Subsidiaries No Borrower shall without the prior written consent of the Agent form or acquire any Subsidiaries. |
12.3 | Vessel undertakings |
12.3.1 | No sale of Vessel No Borrower shall sell or otherwise dispose of its Vessel or any shares in its Vessel nor agree to do so without the prior written consent of the Agent. |
12.3.2 | No chartering after Event of Default Following the occurrence and during the continuation of an Event of Default no Borrower shall without the prior written consent of the Agent let its Vessel on charter or renew or extend any charter or other contract of employment of its Vessel (nor agree to do so). |
12.3.3 | No change in management Each Borrower shall procure that, without the prior written consent of the Lenders, there shall be no termination of, alteration to, or waiver of any material, in the Agent's opinion, term of, the Management Agreement in respect of its Vessel and no Borrower shall without the prior written consent of the Agent permit the Managers to sub-contract or delegate the commercial or technical management of its Vessel to any third party. |
12.3.4 | Registration of Vessel Each Borrower undertakes to maintain the registration of its Vessel under an Approved Flag for the duration of the Facility Period and not to change its Vessel's flag without the Lenders' prior written consent (such consent not to be unreasonably withheld). |
12.3.5 | Evidence of current COFR Each Borrower will, if and for so long as its Vessel trades in the United States of America and Exclusive Economic Zone (as defined in the United States Oil Pollution Act 1990), obtain and retain a |
12.3.6 | ISM Code compliance Each Borrower will: |
(a) | procure that its Vessel remains for the duration of the Facility Period subject to a SMS; |
(b) | maintain a valid and current SMC for its Vessel throughout the Facility Period and provide a copy to the Agent; |
(c) | procure that the ISM Company maintains a valid and current DOC throughout the Facility Period and provide a copy to the Agent; and |
(d) | immediately notify the Agent in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the SMC of its Vessel or of the DOC of the ISM Company. |
12.3.7 | ISPS Code compliance Each Borrower will: |
(a) | for the duration of the Facility Period comply with the ISPS Code in relation to its Vessel and procure that its Vessel and the ISPS Company comply with the ISPS Code; |
(b) | maintain a valid and current ISSC for its Vessel throughout the Facility Period and provide a copy to the Agent; and |
(c) | immediately notify the Agent in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC of its Vessel. |
12.3.8 | Annex VI compliance Each Borrower will: |
(a) | for the duration of the Facility Period comply with Annex VI in relation to its Vessel and procure that its Vessel's master and crew are familiar with, and that its Vessel complies with, Annex VI; |
(b) | maintain a valid and current IAPPC for its Vessel throughout the Facility Period and provide a copy to the Agent; and |
(c) | immediately notify the Agent in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the IAPPC of its Vessel. |
12.3.9 | Class Each Vessel shall be classed with a classification society acceptable to the Lenders and, commencing from the relevant Delivery Date shall be classed on a dual basis with China Classification Society (CCS) and: |
(a) | in the case of Vessel A and Vessel B, Bureau Veritas; or |
(b) | in the case of Vessel C, Nippon Kaiji Kyokai |
12.3.10 | Environmental Laws All Environmental Laws applicable to a Vessel shall be complied with in all material respects and all material consents, licenses and approvals required under such Environmental Laws shall be obtained and complied with in all material respects. |
12.3.11 | Assignment of Charter Each Borrower undertakes, immediately upon the execution of any Charter, to execute and deliver to the Security Agent a specific assignment of that Charter in form and substance satisfactory to the Security Agent together with (i) all other documents required by it, including without limitation all notices of assignment and evidence that those notices will be duly acknowledged by the recipients and (ii) the documents referred to in paragraphs 2(vii), 3 and 4(b) of Schedule 2, Part 1, and such other documents as the Security Agent may reasonably require. |
13 | Events of Default |
13.1 | Events of Default |
13.1.1 | Non-payment The Borrowers do not pay on the due date any amount payable by them under a Finance Document at the place at and in the currency in which it is expressed to be payable. |
13.1.2 | Other obligations A Security Party or any other person (except a Finance Party) does not comply with any provision of any of the Relevant Documents to which that Security Party or person is a party (other than as referred to in Clause 13.1.1 (Non-payment)). |
(a) | the failure to comply is capable of remedy and does not relate either to the Insurances or to compliance with Clause 10.12 ( Additional security ) and is remedied within ten (10) Business Days of the Agent giving notice to the Borrowers or the Borrowers becoming aware of the failure to comply; or |
(b) | the failure to comply relates to a Charter and, if it is capable of remedy is remedied within seven (7) Business Days of the Borrowers becoming aware of such failure to comply. |
13.1.3 | Misrepresentation Any representation, warranty or statement made or deemed to be repeated by a Security Party in any Finance Document or any other document delivered by or on behalf of a Security Party under or in connection with any Finance Document is or proves to have been incorrect or misleading in any material respect when made or deemed to be repeated. |
13.1.4 | Cross default |
(a) | Any Financial Indebtedness of any Security Party or any other member of the Group is not paid when due; or |
(b) | any Financial Indebtedness of any Security Party or any other member of the Group becomes (whether by declaration or automatically in accordance with the relevant agreement or instrument constituting the same) due and payable prior to the date when it would otherwise have become due (unless as a result of the exercise by the relevant Security Party or any other member of the Group of a voluntary right of prepayment); or |
(c) | any creditor of any Security Party or any other member of the Group becomes entitled to declare any such Financial Indebtedness due and payable or any facility or commitment available to any Security Party or other member of the Group relating to Financial Indebtedness is withdrawn, suspended or cancelled by reason of any default (however described) of the person concerned unless the relevant Security Party or any other member of the Group shall have satisfied the Agent that such withdrawal, suspension or cancellation will not affect or prejudice in any way the ability of the relevant Security Party or of the relevant member of the Group to pay its debts as they fall due and fund its commitments or any guarantee given by any Security Party; or |
(d) | any other member of the Group in respect of the Financial Indebtedness is not honoured when due and called upon |
13.1.5 | Insolvency |
(a) | A Security Party is unable or admits inability to pay its debts as they fall due, suspends making payments on any of its debts or, by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors with a view to rescheduling any of its indebtedness. |
(b) | The value of the assets of the Guarantor is less than its liabilities (taking into account contingent and prospective liabilities other than commitments in respect of vessels under construction and not yet delivered to that Security Party). |
(c) | A moratorium is declared in respect of any indebtedness of a Security Party. |
13.1.6 | Insolvency proceedings Any corporate action, legal proceedings or other procedure or step is taken for: |
(a) | the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration, bankruptcy or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of a Security Party; |
(b) | a composition, compromise, assignment or arrangement with any creditor of a Security Party; |
(c) | the appointment of a liquidator, receiver, administrative receiver, administrator, compulsory manager, or trustee or other similar officer in respect of any Security Party or any of its assets; or |
(d) | enforcement of any Encumbrance over any assets of a Security Party, |
13.1.7 | Creditors' process Any expropriation, attachment, sequestration, distress or execution affects any asset or assets of a Security Party and is not discharged within seven (7) days. |
13.1.8 | Change in ownership of a Borrower or the Guarantor (a) There is any change in the ownership of a Borrower or (b) the Palios Family ceases to be the major legal owner or ultimate beneficial owner of the Guarantor (excluding any financial institution acting as a passive investor), from that advised to the Agent by the Borrowers at the date of this Agreement. |
13.1.9 | Repudiation etc A Security Party or any other person (except a Finance Party) repudiates any of the Relevant Documents to which that Security Party or person is a party or evidences an intention to do so. |
13.1.10 | Impossibility or illegality Any event occurs which would, or would with the passage of time, render performance of any of the Relevant Documents by a Security Party or any other party to any such document impossible, unlawful or unenforceable by a Finance Party or a Security Party. |
13.1.11 | Conditions subsequent Any of the conditions referred to in Clause 3.4 ( Conditions subsequent ) is not satisfied within the time reasonably required by the Agent. |
13.1.12 | Revocation or modification of authorisation Any consent, licence, approval, authorisation, filing, registration or other requirement of any governmental, judicial or other public body or authority which is now, or which at any time during the Facility Period becomes, necessary to enable a Security Party or any other person (except a Finance Party) to comply with any of its obligations under any of the Relevant Documents is not obtained, is revoked, suspended, withdrawn or withheld, or is modified in a manner which the Agent considers is, or may be, prejudicial to the interests of a Finance Party, or ceases to remain in full force and effect. |
13.1.13 | Curtailment of business A Security Party ceases, or threatens to cease, to carry on all or a substantial part of its business or, as a result of intervention by or under the authority of any government, the business of a Security Party is wholly or partially curtailed or suspended, or all or a substantial part of the assets or undertaking of a Security Party is seized, nationalised, expropriated or compulsorily acquired. |
13.1.14 | Reduction of capital A Security Party reduces its authorised or issued or subscribed capital. |
13.1.15 | Loss of Vessel A Vessel suffers a Total Loss or is otherwise destroyed or abandoned, or a similar event occurs in relation to any other vessel which may from time to time be mortgaded to the Security Agent as security for the payment of all or any part of the Indebtedness, except that a Total Loss (which term shall for the purposes of the remainder of this Clause 13.1.12 include an event similar to a Total Loss in relation to any other vessel) shall not be an Event of Default if: |
(a) | that Vessel or other vessel is insured in accordance with the Security Documents and a claim for Total Loss is available under the terms of the relevant insurances; and |
(b) | no insurer has refused to meet or has disputed the claim for Total Loss and it is not apparent to the Agent in its discretion that any such refusal or dispute is likely to occur; and |
(c) | payment of all insurance proceeds in respect of the Total Loss is made in full to the Security Agent within one hundred and twenty (120) days of the occurrence of the casualty giving rise to the Total Loss in question or such longer period as the Agent may in its discretion agree. |
13.1.16 | Challenge to registration The registration of a Vessel or a Mortgage is contested or becomes void or voidable or liable to cancellation or termination, or the validity or priority of a Mortgage is contested. |
13.1.17 | War The country of registration of a Vessel becomes involved in war (whether or not declared) or civil war or is occupied by any other power and the Agent in its discretion considers that, as a result, the security conferred by any of the Security Documents is materially prejudiced. |
13.1.18 | Notice of termination The Guarantor gives notice to the Security Agent to determine its obligations under the Guarantee. |
13.1.19 | Material adverse change Any event or series of events occurs which, in the opinion of the Agent, is likely to have a materially adverse effect on the business, assets, financial condition or credit worthiness of a Security Party. |
13.1.20 | Arrest A Vessel is arrested or detained or seized by any person other than any government or persons acting on behalf of any government and not released and returned to the possession of the relevant Borrower within fifteen (15) Business Days after the arrest or detention or seizure in question. |
13.2 | Acceleration |
13.2.1 | declare that the Loan, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents are immediately due and payable, whereupon they shall become immediately due and payable; and/or |
13.2.2 | declare that the Loan is payable on demand, whereupon it shall immediately become payable on demand by the Agent. |
14 | Assignment and Sub-Participation |
14.1 | Lenders' rights |
14.2 | Borrowers' co-operation |
14.3 | Rights of assignee |
14.4 | Transfer Certificates |
14.4.1 | to the extent that that Lender seeks to transfer its rights and obligations, the Borrowers (on the one hand) and that Lender (on the other) shall be released from further obligations towards the other; |
14.4.2 | the Borrowers (on the one hand) and the transferee (on the other) shall assume obligations towards the other identical to those released pursuant to Clause 14.4.1 ; and |
14.4.3 | the Agent, each of the Lenders and the transferee shall have the same rights and obligations between themselves as they would have had if the transferee had been an original party to this Agreement as a Lender with the rights and obligations transferred to it as a result of the transfer |
(a) | it is satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to the transfer to the transferee; and |
(b) | the transferee has paid to the Agent for its own account a transfer fee of two thousand Dollars ($2,000). |
14.5 | Finance Documents |
14.6 | No assignment or transfer by the Borrowers |
14.7 | Securitisation |
15 | The Agent, the Security Agent and the Lenders |
15.1 | Appointment |
15.1.1 | Each Lender appoints the Agent to act as its agent under and in connection with the Finance Documents and each Lender and the Agent appoints the Security Agent to act as its security agent for the purpose of the Security Documents. |
15.1.2 | Each Lender authorises the Agent and each Lender and the Agent authorises the Security Agent to exercise the rights, powers, authorities and discretions specifically given to the Agent or the Security Agent (as the case may be) under or in connection with the Finance Documents together with any other incidental rights, powers, authorities and discretions. |
15.1.3 | Except where the context otherwise requires or where expressly provided to the contrary, references in this Clause 15 to the "Agent" shall mean the |
15.1.4 | Agent and the Security Agent individually and collectively. |
15.2 | Authority |
15.2.1 | to execute on its behalf any Finance Document (other than this Agreement) and any variation or amendment of any Finance Document (including this Agreement); |
15.2.2 | to collect, receive, release or pay any money on its behalf; |
15.2.3 | acting on the instructions from time to time of the Majority Lenders to give or withhold any waivers, consents or approvals under or pursuant to any Finance Document; and |
15.2.4 | acting on the unanimous instructions from time to time of the Lenders to exercise, or refrain from exercising, any rights, powers, authorities or discretions (including, without limitation, determining matters to be |
15.3 | Trust |
15.3.1 | the Security Agent and any attorney, agent or delegate of the Security Agent may indemnify itself or himself out of the Trust Property against all liabilities, costs, fees, damages, charges, losses and expenses sustained or incurred by it or him in relation to the taking or holding of any of the Trust Property or in connection with the exercise or purported exercise of the rights, trusts, powers and discretions vested in the Security Agent or any other such person by or pursuant to the Security Documents or in respect of anything else done or omitted to be done in any way relating to the Security Documents; |
15.3.2 | the other Finance Parties acknowledge that the Security Agent shall be under no obligation to insure any property nor to require any other person to insure any property and shall not be responsible for any loss which may be suffered by any person as a result of the lack or insufficiency of any insurance; and |
15.3.3 | the Finance Parties agree that the perpetuity period applicable to the trusts declared by this Agreement shall be the period of 125 years from the date of this Agreement. |
15.4 | Limitations on authority |
15.4.1 | release or vary any security given for the Borrowers' obligations under this Agreement; nor |
15.4.2 | waive the payment of any sum of money payable by any Security Party under the Finance Documents; nor |
15.4.3 | reduce the Margin; nor |
15.4.4 | change the meaning of the expression " Majority Lenders " ; nor |
15.4.5 | change the order of application of any moneys set out in this Agreement; nor |
15.4.6 | exercise, or refrain from exercising, any right, power, authority or discretion, or give or withhold any consent, the exercise or giving of which is, by the terms of this Agreement, expressly reserved to the Lenders or dependent on the instructions of all the Lenders; nor |
15.4.7 | extend the due date for the payment of any sum of money payable by any Security Party under any Finance Document; nor |
15.4.8 | take or refrain from taking any step if the effect of such action or inaction may lead to the increase of the obligations of a Lender under any Finance Document; nor |
15.4.9 | agree to change the currency in which any sum is payable under any Finance Document (other than in accordance with the terms of the relevant Finance Document); nor |
15.4.10 | agree to change this Clause 15.4; |
15.5 | Liability |
15.6 | Acknowledgement |
15.6.1 | it has not relied on any representation made by Agent or any of the Agent's directors, officers, employees or agents or by any other person acting or purporting to act on behalf of the Agent to induce it to enter into any Finance Document; |
15.6.2 | it has made and will continue to make without reliance on the Agent, and based on such documents and other evidence as it considers appropriate, its own independent investigation of the financial condition and affairs of the Security Parties in connection with the making and continuation of the Loan; |
15.6.3 | it has made its own appraisal of the creditworthiness of the Security Parties; and |
15.6.4 | the Agent shall not have any duty or responsibility at any time to provide it with any credit or other information relating to any Security Party unless that information is received by the Agent pursuant to the express terms of a Finance Document. |
15.7 | Limitations on responsibility |
15.7.1 | the failure of a Lender or of any Security Party to perform any of its obligations under a Finance Document; nor |
15.7.2 | the financial condition of any Security Party; nor |
15.7.3 | the completeness or accuracy of any statements, representations or warranties made in or pursuant to any Finance Document, or in or pursuant to any document delivered pursuant to or in connection with any Finance Document; nor |
15.7.4 | the negotiation, execution, effectiveness, genuineness, validity, enforceability, admissibility in evidence or sufficiency of any Finance Document or of any document executed or delivered pursuant to or in connection with any Finance Document. |
15.8 | The Agent's rights |
15.8.1 | assume that all representations or warranties made or deemed repeated by any Security Party in or pursuant to any Finance Document are true and complete, unless, in its capacity as the Agent, it has acquired actual knowledge to the contrary; |
15.8.2 | assume that no Default has occurred unless, in its capacity as the Agent, it has acquired actual knowledge to the contrary; |
15.8.3 | rely on any document or notice believed by it to be genuine; |
15.8.4 | rely as to legal or other professional matters on opinions and statements of any legal or other professional advisers selected or approved by it; |
15.8.5 | rely as to any factual matters which might reasonably be expected to be within the knowledge of any Security Party on a certificate signed by or on behalf of that Security Party; and |
15.8.6 | refrain from exercising any right, power, discretion or remedy unless and until instructed to exercise that right, power, discretion or remedy and as to the manner of its exercise by the Lenders or the Majority Lenders (as the case may be) and unless and until the Agent has received from the Lenders any payment which the Agent may require on account of, or any security which the Agent may require for, any costs, claims, expenses (including legal and other professional fees) and liabilities which it considers it may incur or sustain in complying with those instructions. |
15.9 | The Agent's duties |
15.9.1 | if requested in writing to do so by a Lender, make enquiry and advise the Lenders as to the performance or observance of any of the provisions of any Finance Document by any Security Party or as to the existence of an Event of Default; and |
15.9.2 | inform the Lenders promptly of any Event of Default of which the Agent has actual knowledge. |
15.10 | No deemed knowledge |
15.11 | Other business |
15.12 | Indemnity |
15.13 | Employment of agents |
15.14 | Distribution of payments |
15.15 | Reimbursement |
15.16 | Redistribution of payments |
15.16.1 | that Lender shall promptly notify the Agent (which shall promptly notify each other Lender); |
15.16.2 | that Lender shall pay to the Agent an amount equal to the Excess Amount within ten (10) days of its receipt or recovery of the Excess Amount; and |
15.16.3 | the Agent shall treat that payment as if it were a payment by the Security Party in question on account of the sum due from that Security Party to the Lenders and shall account to the Lenders in respect of the Excess Amount in accordance with the provisions of Clause 15.14 ( Distribution of payments ). |
15.17 | Rescission of Excess Amount |
15.18 | Instructions |
15.19 | Payments |
15.20 | "Know your customer" checks |
15.21 | Resignation |
15.21.1 | the Lenders may within thirty (30) days after the date of the Agent's notice appoint a successor to act as agent and/or security agent or, if they fail to do so, the Agent may appoint any other bank or financial institution as its successor; |
15.21.2 | the resignation of the Agent shall take effect simultaneously with the appointment of its successor on written notice of that appointment being given to the Borrowers and the Lenders; |
15.21.3 | the Agent shall thereupon be discharged from all further obligations as agent and/or security agent but shall remain entitled to the benefit of the provisions of this Clause 15; and |
15.21.4 | the Agent's successor and each of the other parties to this Agreement shall have the same rights and obligations amongst themselves as they would have had if that successor had been a party to this Agreement. |
15.22 | No fiduciary relationship |
16 | Set-Off |
17 | Payments |
17.1 | Payments |
17.2 | No deductions or withholdings |
17.3 | Grossing-up |
17.4 | Evidence of deductions |
17.5 | Adjustment of due dates |
17.6 | Control account |
17.7 | Clawback |
17.8 | FATCA Deduction and gross-up by a Security Party |
(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 Finance Parties. |
18 | Notices |
18.1 | Communications in writing |
18.2 | Addresses |
18.2.1 | in the case of the Borrowers: |
18.2.2 | in the case of each Lender, those appearing opposite its name in Schedule 1, Part 1 ( The Lenders and the Commitments ): |
18.2.3 | in the case of each Arranger, those appearing opposite its name in Schedule 1, Part 2 ( the Arrangers ): |
18.2.4 | in the case of the Agent: |
18.2.5 | in the case of the Security Agent: |
18.3 | Delivery |
18.3.1 | if by way of fax, when received in legible form; or |
18.3.2 | if by way of letter, when it has been left at the relevant address or five (5) Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address; |
18.4 | Notification of address and fax number |
18.5 | English language |
18.5.1 | in English; or |
18.5.2 | if not in English, and if so required by the Agent, accompanied by a certified English translation and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other official document. |
19 | Partial Invalidity |
20 | Remedies and Waivers |
21 | Joint and several liability |
21.1 | Nature of liability |
21.1.1 | any forbearance (whether as to payment or otherwise) or any time or other indulgence granted to any other Borrower or any other Security Party under or in connection with any Finance Document; |
21.1.2 | any amendment, variation, novation or replacement of any other Finance Document; |
21.1.3 | any failure of any Finance Document to be legal valid binding and enforceable in relation to any other Borrower or any other Security Party for any reason; |
21.1.4 | the winding-up or dissolution of any other Borrower or any other Security Party; |
21.1.5 | the release (whether in whole or in part) of, or the entering into of any compromise or composition with, any other Borrower or any other Security Party; or |
21.1.6 | any other act, omission, thing or circumstance which would or might, but for this provision, operate to discharge, impair or otherwise affect such liability. |
21.2 | No rights as surety |
21.2.1 | exercise any rights of subrogation in relation to any rights, security or moneys held or received or receivable by a Finance Party or any other person; or |
21.2.2 | exercise any right of contribution from any other Borrower or any other Security Party under any Finance Document; or |
21.2.3 | exercise any right of set-off or counterclaim against any other Borrower or any other Security Party; or |
21.2.4 | receive, claim or have the benefit of any payment, distribution, security or indemnity from any other Borrower or any other Security Party; or |
21.2.5 | unless so directed by the Agent (when the relevant Borrower will prove in accordance with such directions), claim as a creditor of any other Borrower or any other Security Party in competition with any Finance Party |
22 | Miscellaneous |
22.1 | No oral variations |
22.2 | Further assurance |
22.3 | Rescission of payments etc. |
22.4 | Certificates |
22.5 | Counterparts |
22.6 | Contracts (Rights of Third Parties ) Act 1999 |
22.7 | Disclosure |
23 | Law and Jurisdiction |
23.1 | Governing law |
23.2 | Jurisdiction |
23.3 | Alternative jurisdictions |
23.4 | Waiver of objections |
23.5 | Service of process |
23.5.1 | irrevocably appoints Nicolaou & Co. Chartered Accounts, 25 Heath Drive Potters Bar. Herts, EN6 lEN, London, England for the attention of Mr Antonis Nicolaou as its agent for service of process in relation to any proceedings before the English courts in connection with this Agreement; and |
23.5.2 | agrees that failure by a process agent to notify any Borrower of the process will not invalidate the proceedings concerned. |
The Lenders
|
The Commitments
|
The Export-Import Bank of China
|
$75,734,900
|
(a) | Constitutional Documents Copies of the constitutional documents of each Security Party together with such other evidence as the Agent may reasonably require that each Security Party is duly incorporated in its country of incorporation and remains in existence with power to enter into, and perform its obligations under, the Relevant Documents to which it is or is to become a party. |
(b) | Certificates of good standing A certificate of good standing in respect of each Security Party (if such a certificate can be obtained). |
(c) | Board resolutions A copy of a resolution of the board of directors of each Security Party (and, in the case of the Guarantor, of the executive committee of the board of directors of the Guarantor): |
(i) | approving the terms of, and the transactions contemplated by, the Relevant Documents to which it is a party and resolving that it execute those Relevant Documents; and |
(ii) | authorising a specified person or persons to execute those Relevant Documents (and all documents and notices to be signed and/or despatched under those documents) on its behalf. |
(d) | Specimen signatures A specimen of the signature of each person authorised by the resolutions referred to in paragraph (c) above. |
(e) | Shareholder resolutions A copy of a resolution signed by all the holders of the issued shares in each Security Party (other than the Guarantor), approving the terms of, and the transactions contemplated by, the Relevant Documents to which that Security Party is a party. |
(f) | Officer's certificates A certificate of a duly authorised officer of each Security Party certifying that each copy document relating to it specified in this Part 1 of Schedule 2 is correct, complete and in full force and effect and setting out the names of the directors, officers and shareholders of that Security Party and the proportion of shares held by each shareholder. |
(g) | Evidence of registration Evidence that the names of the directors and officers of the Manager are duly registered in the companies registry or other registry in the country of incorporation of the Manager. |
(h) | Powers of attorney The power of attorney of each Security Party (notarially attested and legalised if required) under which any documents are to be executed or transactions undertaken by that Security Party. |
(a) | Photocopies, certified as true, accurate and complete by a director or the secretary of the Borrower, of: |
(i) | the Building Contract; |
(ii) | such documents as the Agent may reasonably require to evidence the nomination of or novation in favour of (as the case may be) the Borrower as purchaser of the Vessel pursuant to the Building Contract; |
(iii) | the builder's certificate and/or bill of sale transferring title in the Vessel to the Borrower free of all encumbrances, maritime liens or other debts; |
(iv) | the protocol of delivery and acceptance evidencing the unconditional physical delivery of the Vessel by the Builder to the Borrower pursuant to the Building Contract; |
(v) | the commercial invoice issued by the Builder in respect of the final contract price of the Vessel; |
(vi) | the declaration of warranty issued by the Builder to the Borrower pursuant to the Building Contract; |
(vii) | any charterparty or other contract of employment of the Vessel which will be in force on the Drawdown Date including, without limitation, any Charter; |
(viii) | the Management Agreement; |
(ix) | the Vessel's current Safety Construction, Safety Equipment, Safety Radio, Oil Pollution Prevention and Load Line Certificates; |
(x) | evidence of the Vessel's current Certificate of Financial Responsibility issued pursuant to the United States Oil Pollution Act 1990, if applicable; |
(xi) | the Vessel's current SMC; |
(xii) | the ISM Company's current DOC; |
(xiii) | the Vessel's current ISSC; |
(xiv) |
the Vessel's current IAPPC;
|
(xv) | the Vessel's current Tonnage Certificate; |
(b) | Evidence of Borrower's title Evidence that any prior registration of the Vessel in the ownership of the Builder and any Encumbrance registered against that ownership have been cancelled (or confirmation from the |
(c) | Evidence of insurance Evidence that the Vessel is insured in the manner required by the Security Documents and that letters of undertaking will be issued in the manner required by the Security Documents, together with an opinion on the Insurances by an insurance adviser appointed by the Agent at the cost of the Borrowers (to be borne directly by the Borrowers). |
(d) | Confirmation of class A Certificate of Confirmation of Class for hull and machinery confirming that the Vessel is classed with the highest class applicable to vessels of her type with Bureau Veritas or NKK, as the case may be, and on a dual basis with China Classification Society or such other classification society as may be acceptable to the Agent free of material overdue recommendations or adverse notations, in case affecting class. |
(e) | Valuations Two valuations of the Vessel from Approved Brokers acceptable to the Agent addressed to the Agent to be issued in accordance with the requirements of Clause 10.13 ( Fair Market Value determination ) certifying the Fair Market Value of the Vessel in order for the Lenders to assess compliance with Clause 10.12 ( Additional security ) and determine the Maximum Tranche Amount. |
(g) | Mandates Such duly signed forms of mandate, and/or other evidence of the opening of the Earnings Accounts, as the Security Agent may require. |
(h) | No disputes The written confirmation of the Borrower that there is no dispute under any of the Relevant Documents as between the parties to any such document. |
(i) | Account Holder's confirmation The written confirmation of the Account Holder that the Accounts have been opened with the Account Holder and to its actual knowledge are free from Encumbrances and rights of set off other than as created by or pursuant to the Security Documents. |
(k) | Cash balance Written statement of account issued by the Account Holder and a Compliance Certificate signed by Chief Financial Officer of the |
(l) | Other Relevant Documents Copies of each of the Relevant Documents, including the Shareholder Letter, not otherwise comprised in the documents listed in this Part 1 of Schedule 2. |
(a) | If a Security Party is incorporated in a jurisdiction other than England and Wales or if any Finance Document is governed by the laws of a jurisdiction other than England and Wales, a legal opinion of the legal advisers to the Agent in each relevant jurisdiction, substantially in the form or forms provided to the Agent prior to signing this Agreement or confirmation satisfactory to the Agent that such an opinion will be given. |
(a) | Drawdown Notice A duly completed Drawdown Notice. |
(b) | Process agent Evidence that any process agent referred to in Clause 23.5 (Service of process) and any process agent appointed under any other Finance Document has accepted its appointment. |
(c) | Other authorisations A copy of any other consent, licence, approval, authorisation or other document, opinion or assurance which the Agent considers to be necessary or desirable (if it has notified the Borrowers accordingly) in connection with the entry into and performance of the transactions contemplated by any of the Relevant Documents or for the validity and enforceability of any of the Relevant Documents. |
(d) | Financial statements Copies of the Original Financial Statements of each Borrower and the Guarantor. |
(e) | Compliance Certificate A Compliance Certificate signed by the Chief Financial Officer of the Guarantor setting out (in reasonable detail) computations as to compliance with Clause 12.2 ( Financial covenants ) and Clause 10.12 ( Additional Security ) as at the date as at which the Guarantor's latest financial statements were drawn up, to be delivered to the Agent on or before the due date for delivering the Drawdown Request pursuant to Clause 4.1 ( Drawdown Request ). |
(f) | Fees Evidence that the fees, costs and expenses then due from the Borrowers under Clause 8 ( Indemnities ) and Clause 9 ( Fees ) have been paid or will be paid by the relevant Drawdown Date. |
(g) | "Know your customer" documents Such documentation and other evidence as is reasonably requested by the Agent in order for the Lenders to comply with all necessary "know your customer" or similar identification procedures in relation to the transactions contemplated in the Finance Documents, including (without limitation) documentation in relation to the |
1 | Evidence of Borrower's title |
2 | Letters of undertaking |
3 | Acknowledgements of notices |
4 | Legal opinions |
5 | Master's receipt |
1 | Terms defined in the Loan Agreement shall, unless otherwise expressly indicated, have the same meaning when used in this certificate. The terms " Transferor " and " Transferee " are defined in the schedule to this certificate. |
2 | The Transferor: |
2.1 | confirms that the details in the Schedule under the heading "Transferor's Commitment" accurately summarise its Commitment; and |
2.2 | requests the Transferee to accept by way of novation the transfer to the Transferee of the amount of the Transferor's Commitment specified in the Schedule by counter-signing and delivering this certificate to the Agent at its address for communications specified in the Loan Agreement. |
3 | The Transferee requests the Agent to accept this certificate as being delivered to the Agent pursuant to and for the purposes of clause 13.4 of the Loan Agreement so as to take effect in accordance with the terms of that clause on the Transfer Date specified in the Schedule. |
4 | The Agent confirms its acceptance of this certificate for the purposes of clause 13.4 of the Loan Agreement. |
5 | The Transferee confirms that: |
5.1 | it has received a copy of the Loan Agreement together with all other information which it has required in connection with this transaction; |
5.2 | it has not relied and will not in the future rely on the Transferor or any other party to the Loan Agreement to check or enquire on its behalf into the legality, validity, effectiveness, adequacy, accuracy or completeness of any such information; and |
5.3 | it has not relied and will not in the future rely on the Transferor or any other party to the Loan Agreement to keep under review on its behalf the financial condition, creditworthiness, condition, affairs, status or nature of any Security Party. |
6 | Execution of this certificate by the Transferee constitutes its representation and warranty to the Transferor and to all other parties to the Loan Agreement that it has |
7 | The Transferee undertakes with the Transferor and each of the other parties to the Loan Agreement that it will perform in accordance with their terms all those obligations which by the terms of the Loan Agreement will be assumed by it after delivery of this certificate to the Agent and the satisfaction of any conditions subject to which this certificate is expressed to take effect. |
8 | The Transferor makes no representation or warranty and assumes no responsibility with respect to the legality, validity, effectiveness, adequacy or enforceability of any Finance Document or any document relating to any Finance Document, and assumes no responsibility for the financial condition of any Finance Party or for the performance and observance by any Security Party of any of its obligations under any Finance Document or any document relating to any Finance Document and any conditions and warranties implied by law are expressly excluded. |
9 | The Transferee acknowledges that nothing in this certificate or in the Loan Agreement shall oblige the Transferor to: |
9.1 | accept a re-transfer from the Transferee of the whole or any part of the rights, benefits and/or obligations transferred pursuant to this certificate; or |
9.2 | support any losses directly or indirectly sustained or incurred by the Transferee for any reason including, without limitation, the non-performance by any party to any Finance Document of any obligations under any Finance Document. |
10 | The address and fax number of the Transferee for the purposes of clause 17 of the Loan Agreement are set out in the Schedule. |
11 | This certificate may be executed in any number of counterparts each of which shall be original but which shall together constitute the same instrument. |
12 | This certificate and any non-contractual obligations arising out of or in connection with it shall be governed by and interpreted in accordance with English law. |
1 | Transferor: |
2 | Transferee: |
3 | Transfer Date (not earlier than the fifth Business Day after the date of delivery of the Transfer Certificate to the Agent): |
4 | Transferor's Commitment: |
5 | Amount transferred: |
6 | Transferee's address and fax number for the purposes of clause 17 of the Loan Agreement: |
[
name of Transferor
]
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[
name of Transferee
]
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By:
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By:
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Date:
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Date:
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Signed
by
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/s/ Andreas Nikolaos Michalopoulos
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As duly authorized for and on behalf of
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||
Aster Shipping Company Inc.
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Andreas Nikolaos Michalopoulos
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signature of witness
/s/ Margarita Veniou
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Director & Secretary
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Name: Margarita Veniou
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Address: Pendelis 16, Palaio Faliro
175 64, Athens, Greece
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Signed
by
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/s/ Semiramis Paliou
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As duly authorized for and on behalf of
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Aster Shipping Company Inc.
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Semiramis Paliou
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signature of witness
/s/ Margarita Veniou
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Attorney-in-Fact
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Name: Margarita Veniou
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||
Address: Pendelis 16, Palaio Faliro
175 64, Athens, Greece
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Signed
by
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/s/ Margarita Veniou
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As duly authorized for and on behalf of
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Houk Shipping Company Inc.
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Margarita Veniou
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signature of witness
/s/ Andreas Nikolaos Michalopoulos
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Director & Secretary
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Name: Andreas Nikolaos Michalopoulos
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Address: Pendelis 16, Palaio Faliro
175 64, Athens, Greece
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Signed
by
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/s/ Liu Ya
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As duly authorized for and on behalf of
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Liu Ya | |
The Export-Import Bank of China
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(as the Lender) | ||
signature of witness
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/s/ Chennan
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Name: Chennan
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Address: No. 30, Fuxing Men Nei Street, Xicheng District, Beijing, China
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Signed
by
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/s/ Liu Ya
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As duly authorized for and on behalf of
|
Liu Ya | |
The Export-Import Bank of China
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(as the Aranger) | ||
signature of witness
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/s/ Chennan
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Name: Chennan
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Address: No. 30, Fuxing Men Nei Street, Xicheng District, Beijing, China
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Signed
by
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/s/ Liu Ya
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As duly authorized for and on behalf of
|
Liu Ya | |
The Export-Import Bank of China
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(as the Agent) | ||
signature of witness
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/s/ Chennan
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Name: Chennan
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Address: No. 30, Fuxing Men Nei Street, Xicheng District, Beijing, China
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Signed
by
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/s/ Liu Ya
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As duly authorized for and on behalf of
|
Liu Ya | |
The Export-Import Bank of China
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(as the Security Agent) | ||
signature of witness
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/s/ Chennan
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Name: Chennan
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Address: No. 30, Fuxing Men Nei Street, Xicheng District, Beijing, China
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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
|
Ujae Shipping Company Inc.
|
Marshall Islands
|
Rairok Shipping Company Inc.
|
Marshall Islands
|
Toku Shipping Company Inc.
|
Marshall Islands
|
Kaben Shipping Company Inc.
|
Marshall Islands
|
Wake Shipping Company Inc.
|
Marshall Islands
|
Taroa 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. |