[ ]
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REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
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OR
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[X]
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended
December 31, 2017
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OR
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[ ]
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from _________________ to _________________
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OR
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[ ]
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SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Date of event requiring this shell company report _________________
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Commission file number 001-37889
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TOP SHIPS INC.
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(Exact name of Registrant as specified in its charter)
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(Translation of Registrant's name into English)
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Republic of the Marshall Islands
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(Jurisdiction of incorporation or organization)
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1 Vasilisis Sofias and Megalou Alexandrou Str, 15124 Maroussi, Greece
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(Address of principal executive offices)
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Alexandros Tsirikos, (Tel) +30 210 812 8180, atsirikos@topships.org, (Fax) +30 210 614 1273,
1 Vasilisis Sofias and Megalou Alexandrou Str, 15124 Maroussi, Greece
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(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
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Title of each class
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Name of each exchange
on which registered
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Common Stock, par value $0.01 per share
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Nasdaq Capital Market
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Preferred Stock Purchase Rights
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Nasdaq Capital Market
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NONE
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(Title of class)
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NONE
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(Title of class)
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Yes
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No
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X
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Yes
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No
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X
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Yes
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X
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No
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Yes
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X
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No
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Large accelerated filer
☐
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Accelerated filer
☐
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Non-accelerated filer
☒
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Emerging growth company
☐
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X
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U.S. GAAP
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International Financial Reporting Standards as issued by the International Accounting Standards Board
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Other
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________ Item 17
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________ Item 18
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Yes
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No
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X
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Yes
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No
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ITEM 1
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IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
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2
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ITEM 2.
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OFFER STATISTICS AND EXPECTED TIMETABLE
|
2
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ITEM 3.
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KEY INFORMATION
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2
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ITEM 4.
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INFORMATION ON THE COMPANY
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27
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ITEM 4A.
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UNRESOLVED STAFF COMMENTS
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44
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ITEM 5.
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OPERATING AND FINANCIAL REVIEW AND PROSPECTS
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44
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ITEM 6.
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DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
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61
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ITEM 7.
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MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
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64
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ITEM 8.
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FINANCIAL INFORMATION.
|
66
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ITEM 9.
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THE OFFER AND LISTING.
|
66
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ITEM 10.
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ADDITIONAL INFORMATION
|
68
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ITEM 11.
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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
81
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ITEM 12.
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DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
|
82
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ITEM 13.
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DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
|
83
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ITEM 14.
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MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
|
83
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ITEM 15.
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CONTROLS AND PROCEDURES
|
83
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ITEM 16A.
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AUDIT COMMITTEE FINANCIAL EXPERT
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84
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ITEM 16B.
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CODE OF ETHICS
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84
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ITEM 16C.
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PRINCIPAL AUDITOR FEES AND SERVICES
|
84
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ITEM 16D.
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EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
|
85
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ITEM 16E.
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PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
|
85
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ITEM 16F.
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CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT
|
85
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ITEM 16G.
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CORPORATE GOVERNANCE
|
85
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ITEM 16H.
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MINE SAFETY DISCLOSURE
|
85
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ITEM 17.
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FINANCIAL STATEMENTS
|
86
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ITEM 18.
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FINANCIAL STATEMENTS
|
86
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ITEM 19.
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EXHIBITS
|
86
|
· |
our ability to maintain or develop new and existing customer relationships with major refined product importers and exporters, major crude oil companies and major commodity traders, including our ability to enter into long-term charters for our vessels;
|
· |
our future operating and financial results
;
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· |
oil and chemical tanker industry trends, including charter rates and vessel values and factors affecting vessel supply and demand;
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· |
our ability to take delivery of, integrate into our fleet, and employ any newbuildings we may order in the future and the ability of shipyards to deliver vessels on a timely basis;
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· |
the aging of our vessels and resultant increases in operation and dry-docking costs;
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· |
the ability of our vessels to pass classification inspections and vetting inspections by oil majors and big chemical corporations;
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· |
significant changes in vessel performance, including increased vessel breakdowns;
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· |
the creditworthiness of our charterers and the ability of our contract counterparties to fulfill their obligations to us;
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· |
our ability to repay outstanding indebtedness, to obtain additional financing and to obtain replacement charters for our vessels, in each case, at commercially acceptable rates or at all;
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· |
changes to governmental rules and regulations or actions taken by regulatory authorities and the expected costs thereof;
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· |
potential liability from litigation and our vessel operations, including discharge of pollutants;
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· |
changes in general economic and business conditions;
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· |
general domestic and international political conditions, potential disruption of shipping routes due to accidents, political events or acts by terrorists;
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· |
changes in production of or demand for oil and petroleum products and chemicals, either globally or in particular regions;
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· |
the strength of world economies and currencies, including fluctuations in charterhire rates and vessel values; and
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· |
and other important
factors
described from time to time in the reports filed by us with the U.S. Securities and Exchange Commission, or the SEC
.
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ITEM 1 |
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
|
ITEM 2. |
OFFER STATISTICS AND EXPECTED TIMETABLE
|
ITEM 3. |
KEY INFORMATION
|
A. |
Selected Financial Data
|
U.S. Dollars in thousands, except per share data
|
||||||||||||||||||||
STATEMENT OF COMPREHENSIVE (LOSS)/INCOME
|
2013
|
2014
|
2015
|
2016
|
2017
|
|||||||||||||||
Revenues
|
20,074
|
3,602
|
13,075
|
28,433
|
39,363
|
|||||||||||||||
Voyage expenses
|
663
|
113
|
370
|
736
|
999
|
|||||||||||||||
Bareboat charter hire expense
|
-
|
-
|
5,274
|
6,299
|
6,282
|
|||||||||||||||
Amortization of prepaid bareboat charter hire
|
-
|
-
|
1,431
|
1,577
|
1,657
|
|||||||||||||||
Vessel operating expenses
|
745
|
1,143
|
4,789
|
9,913
|
13,444
|
|||||||||||||||
Management fees-related parties
|
1,351
|
703
|
1,621
|
1,824
|
4,730
|
|||||||||||||||
General and administrative expenses
|
3,258
|
2,335
|
2,983
|
2,906
|
5,805
|
|||||||||||||||
Other operating (income)/loss
|
-
|
(861
|
)
|
274
|
(3,137
|
)
|
(914
|
)
|
||||||||||||
Gain on sale of vessels
|
(14
|
)
|
-
|
-
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-
|
-
|
||||||||||||||
Vessel depreciation
|
6,429
|
757
|
668
|
3,467
|
5,744
|
|||||||||||||||
Impairment on vessels
|
-
|
-
|
3,081
|
-
|
-
|
|||||||||||||||
Gain on disposal of subsidiaries
|
(1,591
|
)
|
-
|
-
|
-
|
-
|
||||||||||||||
Operating (loss)/income
|
9,233
|
(588
|
)
|
(7,416
|
)
|
4,848
|
1,616
|
|||||||||||||
Interest and finance costs
|
(7,443
|
)
|
(450
|
)
|
(719
|
)
|
(3,093
|
)
|
(15,793
|
)
|
||||||||||
(Loss)/gain on derivative financial instruments
|
(171
|
)
|
3,866
|
(392
|
)
|
(698
|
)
|
(301
|
)
|
|||||||||||
Interest income
|
131
|
74
|
-
|
-
|
13
|
|||||||||||||||
Other (expense)/income, net
|
(342
|
)
|
(6
|
)
|
20
|
(5
|
)
|
1,120
|
||||||||||||
Net (loss)/income and comprehensive (loss)/income
|
1,408
|
2,896
|
(8,507
|
)
|
1,052
|
(13,345
|
)
|
|||||||||||||
Deemed dividend for beneficial conversion feature of Series B convertible preferred stock
|
-
|
-
|
-
|
(1, 403
|
)
|
-
|
||||||||||||||
Equity loss in joint venture
|
-
|
-
|
-
|
-
|
(27
|
)
|
||||||||||||||
Net (loss)/income attributable to common shareholders
|
1,408
|
2,896
|
(8,507
|
)
|
(351
|
)
|
(13,372
|
)
|
||||||||||||
Attributable to:
|
||||||||||||||||||||
Common stock holders
|
1,408
|
2,896
|
(8,507
|
)
|
(351
|
)
|
(13,404
|
)
|
||||||||||||
Non-controlling interests
|
-
|
-
|
-
|
-
|
32
|
|||||||||||||||
Earnings/(Loss) per share, basic
|
$
|
1,408,000
|
$
|
413,714
|
$
|
(773,364
|
)
|
$
|
(15,955
|
)
|
$
|
(12.57
|
)
|
|||||||
Earnings/(Loss) per share, diluted
|
$
|
1,408,000
|
$
|
362,000
|
$
|
(773,364
|
)
|
$
|
(15,955
|
)
|
$
|
(12.57
|
)
|
|||||||
Weighted average common shares outstanding, basic
|
1
|
7
|
11
|
22
|
1,063,381
|
|||||||||||||||
Weighted average common shares outstanding, diluted
|
1
|
8
|
11
|
22
|
1,063,381
|
U.S. dollars in thousands, unless otherwise stated
|
2013
|
2014
|
2015
|
2016
|
2017
|
|||||||||||||||
BALANCE SHEET DATA
|
||||||||||||||||||||
Current assets
|
10,262
|
1,227
|
5,269
|
4,541
|
29,055
|
|||||||||||||||
Total assets
|
27,868
|
75,575
|
74,006
|
143,317
|
220,448
|
|||||||||||||||
Current liabilities, including current portion of long-term debt
|
8,605
|
9,334
|
17,577
|
20,033
|
25,581
|
|||||||||||||||
Non-current liabilities
|
4,468
|
23,712
|
22,276
|
76,022
|
87,593
|
|||||||||||||||
Total debt
|
-
|
19,419
|
24,226
|
84,539
|
103,949
|
|||||||||||||||
Stockholders' equity
|
14,795
|
42,529
|
34,153
|
45,521
|
107,274
|
|
2013
|
2014
|
2015
|
2016
|
2017
|
|||||||||||||||
FLEET DATA
|
||||||||||||||||||||
Total number of vessels at end of period (including leased vessels)
|
0.0
|
1.0
|
3.0
|
6.0
|
7.0
|
|||||||||||||||
Average number of vessels
(1)
|
5.1
|
0.5
|
2.2
|
5.0
|
6.8
|
|||||||||||||||
Total calendar days for fleet
(2)
|
1,852
|
195
|
810
|
1,812
|
2,496
|
|||||||||||||||
Total available days for fleet
(3)
|
1,852
|
195
|
805
|
1,812
|
2,495
|
|||||||||||||||
Total operating days for fleet
(4)
|
1,852
|
195
|
796
|
1,799
|
2,491
|
|||||||||||||||
Total time charter days for fleet
|
-
|
195
|
796
|
1,799
|
2,491
|
|||||||||||||||
Total bareboat charter days for fleet
|
1,852
|
-
|
-
|
-
|
-
|
|||||||||||||||
Fleet utilization
(5)
|
100.00
|
%
|
100.00
|
%
|
98.91
|
%
|
99.28
|
%
|
99.81
|
%
|
U.S. dollars in thousands
|
2013
|
2014
|
2015
|
2016
|
2017
|
|||||||||||||||
Adjusted EBITDA
(9)
|
$
|
13,715
|
$
|
163
|
$
|
3,058
|
$
|
16,186
|
$
|
16,405
|
(1) |
Average number of vessels is the number of vessels that constituted our fleet (including chartered in vessels) for the relevant period, as measured by the sum of the number of days each vessel was a part of our fleet during the period divided by the number of calendar days in that period.
|
(2) |
Calendar days are the total days the vessels were in our possession for the relevant period. Calendar days are an indicator of the size of our fleet over the relevant period and affect both the amount of revenues and expenses that we record during that period.
|
(3) |
Available days are the number of calendar days less the aggregate number of days that our vessels are off-hire due to scheduled repairs or scheduled guarantee inspections in the case of newbuildings, vessel upgrades or special or intermediate surveys and the aggregate amount of time that we spend positioning our vessels. Companies in the shipping industry generally use 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 unforeseen technical circumstances. The shipping industry uses operating days to measure the aggregate number of days in a period that our vessels actually generate revenue.
|
(5) |
Fleet utilization is calculated by dividing the number of operating days during a period by the number of available days during that period. The shipping industry uses fleet utilization to measure a company's efficiency in finding suitable employment for its vessels and minimizing the number of days that its vessels are off-hire for reasons other than scheduled repairs or scheduled guarantee inspections in the case of newbuildings, vessel upgrades, special or intermediate surveys and vessel positioning.
|
(6) |
Time charter equivalent rate, or TCE rate, is a measure of the average daily revenue performance of a vessel on a per voyage basis. Our method of calculating TCE rate is determined by dividing TCE revenues by operating days for the relevant time period. TCE revenues are revenues minus voyage expenses. Voyage expenses primarily consist of port, canal and fuel costs that are unique to a particular voyage, which would otherwise be paid by the charterer under a time charter contract, as well as commissions. TCE revenues and TCE rate, which are non-U.S. GAAP measures, provide additional supplemental information in conjunction with shipping revenues, the most directly comparable U.S. GAAP measure, because it assists our management in making decisions regarding the deployment and use of our vessels and in evaluating their financial performance. The following table below reflects the reconciliation of TCE revenues to revenues as reflected in the consolidated statements of operations and our calculation of TCE rates for the periods presented.
|
U.S. dollars in thousands, except average daily time charter equivalent and total operating days
|
2013
|
2014
|
2015
|
2016
|
2017
|
|||||||||||||||
On a consolidated basis
|
||||||||||||||||||||
Revenues
|
$
|
20,074
|
$
|
3,602
|
$
|
13,075
|
$
|
28,433
|
$
|
39,363
|
||||||||||
Less:
|
||||||||||||||||||||
Voyage expenses
|
(663
|
)
|
(113
|
)
|
(370
|
)
|
(736
|
)
|
(999
|
)
|
||||||||||
Time charter equivalent revenues
|
$
|
19,411
|
$
|
3,489
|
$
|
12,705
|
$
|
27,697
|
$
|
38,364
|
||||||||||
Total operating days
|
1,852
|
195
|
796
|
1,799
|
2,491
|
|||||||||||||||
|
||||||||||||||||||||
Average Daily Time Charter Equivalent (TCE)
|
$
|
10,484
|
$
|
17,892
|
$
|
15,961
|
$
|
15,396
|
$
|
15,403
|
(7) |
Daily vessel operating expenses, which include crew costs, provisions, deck and engine stores, lubricating oil, insurance, maintenance and repairs are calculated by dividing vessel operating expenses by fleet calendar days for the relevant time period.
|
(8) |
Daily general and administrative expenses are calculated by dividing general and administrative expenses by fleet calendar days for the relevant time period.
|
(9) |
Adjusted Earnings Before Interest, Taxes, Depreciation, Amortization (Adjusted EBITDA), is not a measure prepared in accordance with U.S. GAAP. We define Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, vessel bareboat charter hire expenses (including amortization of prepaid hire), vessel impairments, gains on sale of vessels, gains on disposal of subsidiaries and gains/losses on derivative financial instruments. Adjusted EBITDA is a non-U.S. GAAP financial measure that is used as a supplemental financial measure by management and external users of financial statements, such as investors, to assess our financial and operating performance. We believe that this non-GAAP financial measure assists our management and investors by increasing the comparability of our performance from period to period. This is achieved by excluding the potentially disparate effects between periods of interest, gain/loss on financial instruments, taxes, depreciation and amortization, vessel bareboat charter hire expenses (including amortization of prepaid hire), vessel impairments, gains on sale of vessels and subsidiaries and which items are affected by various and possibly changing financing methods, capital structure and historical cost basis and which items may significantly affect results of operations between periods. This non-U.S. GAAP measure should not be considered in isolation from, as a substitute for, or superior to financial measures prepared in accordance with U.S. GAAP. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our definition of Adjusted EBITDA may not be the same as reported by other companies in the shipping industry or other industries. Adjusted EBITDA does not represent and should not be considered as an alternative to operating income or cash flow from operations, as determined in accordance with U.S. GAAP.
|
U.S. dollars in thousands
|
2013
|
2014
|
2015
|
2016
|
2017
|
|||||||||||||||
Net (loss)/ income and comprehensive (loss)/ income
|
1,408
|
2,896
|
(8,507
|
)
|
1,052
|
(13,372
|
)
|
|||||||||||||
|
||||||||||||||||||||
Add: Bareboat charter hire expenses
|
-
|
-
|
5,274
|
6,299
|
6,282
|
|||||||||||||||
Add: Amortization of prepaid bareboat charter hire
|
-
|
-
|
1,431
|
1,577
|
1,657
|
|||||||||||||||
Add: Vessel depreciation
|
6,429
|
757
|
668
|
3,467
|
5,744
|
|||||||||||||||
Add: Impairment on vessel
|
-
|
-
|
3,081
|
-
|
-
|
|||||||||||||||
Add: Interest and finance costs
|
7,443
|
450
|
719
|
3,093
|
15,793
|
|||||||||||||||
Add: Loss/(gain) on derivative financial instruments
|
171
|
(3,866
|
)
|
392
|
698
|
301
|
||||||||||||||
Less: Gain on sale of vessels
|
(14
|
)
|
-
|
-
|
-
|
-
|
||||||||||||||
Less: Gain on disposal of subsidiaries
|
(1,591
|
)
|
-
|
-
|
-
|
-
|
||||||||||||||
Less: Interest income
|
(131
|
)
|
(74
|
)
|
-
|
-
|
-
|
|||||||||||||
|
||||||||||||||||||||
Adjusted EBITDA
|
13,715
|
163
|
3,058
|
16,186
|
16,405
|
B. |
Capitalization and Indebtedness
|
C. |
Reasons for the Offer and Use of Proceeds
|
D. |
Risk Factors
|
· |
supply and demand for petroleum products and chemicals carried;
|
· |
changes in oil production and refining capacity resulting in shifts in trade flows for oil products;
|
· |
the distance petroleum products and chemicals are to be moved by sea;
|
· |
global and regional economic and political conditions, including developments in international trade, national oil reserves policies, fluctuations in industrial and agricultural production, armed conflicts and work stoppages;
|
· |
increases in the production of oil in areas linked by pipelines to consuming areas, the extension of existing, or the development of new pipeline systems in markets we may serve, or the conversion of existing non-oil pipelines to oil pipelines in those markets;
|
· |
environmental and other legal and regulatory developments;
|
· |
currency exchange rates;
|
· |
weather, natural disasters and other acts of God;
|
· |
competition from alternative sources of energy, other shipping companies and other modes of transportation; and
|
· |
international sanctions, embargoes, import and export restrictions, nationalizations, piracy and wars.
|
· |
the number of newbuilding deliveries;
|
· |
current and expected newbuilding orders for vessels;
|
· |
the scrapping rate of older vessels;
|
· |
vessel freight rates, which are affected by factors that may affect the rate of newbuilding, swapping and laying up of vessels;
|
· |
the price of steel and vessel equipment;
|
· |
technological advances in the design and capacity of vessels;
|
· |
potential conversion of vessels for alternative use;
|
· |
changes in environmental and other regulations that may limit the useful lives of vessels;
|
· |
port or canal congestion;
|
· |
the number of vessels that are out of service at a given time; and
|
· |
changes in global petroleum and chemical production.
|
· |
general economic and market conditions affecting the shipping industry;
|
· |
prevailing level of charter rates;
|
· |
competition from other shipping companies;
|
· |
types, sizes and ages of vessels;
|
· |
the availability of other modes of transportation;
|
· |
supply and demand for vessels;
|
· |
shipyard capacity;
|
· |
cost of newbuildings;
|
· |
price of steel;
|
· |
governmental or other regulations; and
|
· |
technological advances.
|
· |
maintain a consolidated leverage ratio of not more than 75%; and
|
· |
maintain minimum free liquidity of $0.75 million per owned vessel and $0.5 million per bareboated chartered-in vessel.
|
· |
our interests could diverge from our partners' interests or we may not agree with our strategic partners on ongoing activities or on the amount, timing or nature of further investments in the relationship;
|
· |
we do not control the operations of City of Athens Inc. and ECO Nine Inc. as we have joint control ;
|
· |
due to financial constraints, our strategic partners may be unable to meet their commitments to us;
|
· |
due to differing long-term business goals, our partners may decide not to join us in funding capital investment by our business ventures, which may result in higher levels of cash expenditures by us;
|
· |
we may experience difficulties or delays in collecting amounts due to us from our strategic partners;
|
· |
the terms of our arrangements may turn out to be unfavorable; and
|
· |
changes in tax, legal or regulatory requirements may necessitate changes in the agreements with our strategic partners.
|
· |
incur or guarantee indebtedness outside of our ordinary course of business;
|
· |
charge, pledge or encumber our vessels;
|
· |
change the flag, class, management or ownership of our vessels;
|
· |
change the commercial and technical management of our vessels; and
|
· |
sell or change the beneficial ownership or control of our vessels.
|
· |
increase our vulnerability to general economic downturns and adverse competitive and industry conditions;
|
· |
require us to dedicate a substantial portion, if not all, of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other general corporate purposes;
|
· |
limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
|
· |
place us at a competitive disadvantage compared to competitors that have less debt or better access to capital;
|
· |
limit our ability to raise additional financing on satisfactory terms or at all; and
|
· |
adversely impact our ability to comply with the financial and other restrictive covenants of our current or future financing arrangements, which could result in an event of default under such agreements.
|
· |
generate excess cash flow for investment without jeopardizing our ability to cover current and foreseeable working capital needs (including debt service);
|
· |
raise equity and obtain required financing for our existing and new operations;
|
· |
locate and acquire suitable vessels;
|
· |
identify and consummate acquisitions or joint ventures;
|
· |
integrate any acquired business successfully with our existing operations;
|
· |
hire, train and retain qualified personnel and crew to manage and operate our growing business and fleet;
|
· |
enhance our customer base; and
|
· |
manage expansion.
|
· |
fluctuations in interest rates;
|
· |
fluctuations in the availability or the price of oil and chemicals;
|
· |
fluctuations in foreign currency exchange rates;
|
· |
announcements by us or our competitors;
|
· |
changes in our relationships with customers or suppliers;
|
· |
actual or anticipated fluctuations in our semi-annual and annual results and those of other public companies in our industry;
|
· |
changes in United States or foreign tax laws;
|
· |
actual or anticipated fluctuations in our operating results from period to period;
|
· |
shortfalls in our operating results from levels forecast by securities analysts;
|
· |
market conditions in the shipping industry and the general state of the securities markets;
|
· |
mergers and strategic alliances in the shipping industry;
|
· |
changes in government regulation;
|
· |
a general or industry-specific decline in the demand for, and price of, shares of our common stock resulting from capital market conditions independent of our operating performance;
|
· |
the loss of any of our key management personnel;
|
· |
our failure to successfully implement our business plan; and
|
· |
issuance of shares.
|
· |
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 shipping industry;
|
· |
market conditions in the shipping industry and the general state of the securities markets;
|
· |
changes in government regulation;
|
· |
shortfalls in our operating results from levels forecast by securities analysts; and
|
· |
announcements concerning us or our competitors.
|
· |
our existing shareholders' proportionate ownership interest in us will decrease;
|
· |
the amount of cash available for dividends payable on the shares of our common stock may decrease;
|
· |
the relative voting strength of each previously outstanding common share may be diminished; and
|
· |
the market price of the shares of our common stock may decline.
|
· |
authorizing our Board of Directors to issue "blank check" preferred stock without shareholder approval;
|
· |
providing for a classified Board of Directors with staggered, three-year terms;
|
· |
prohibiting cumulative voting in the election of directors;
|
· |
authorizing the removal of directors only for cause and only upon the affirmative vote of the holders of at least 80% of the outstanding shares of our capital stock entitled to vote for the directors;
|
· |
prohibiting shareholder action by written consent unless the written consent is signed by all shareholders entitled to vote on the action;
|
· |
limiting the persons who may call special meetings of shareholders; and
|
· |
establishing advance notice requirements for nominations for election to our Board of Directors or for proposing matters that can be acted on by shareholders at shareholder meetings.
|
· |
continue to operate our vessels and service our customers;
|
· |
renew existing charters upon their expiration;
|
· |
obtain new charters;
|
· |
obtain financing on commercially acceptable terms;
|
· |
obtain insurance on commercially acceptable terms;
|
· |
maintain satisfactory relationships with our customers and suppliers; and
|
· |
successfully execute our growth strategy.
|
ITEM 4. |
INFORMATION ON THE COMPANY
|
A. |
History and Development of the Company
|
· |
100% of the issued and outstanding shares of PCH Dreaming Inc., a Marshall Islands company that has entered into a new building contract for a high specification 50,000 dwt Medium Range ("MR") product/chemical tanker under construction at Hyundai Mipo Dockyard Co., Ltd. in South Korea and scheduled for delivery during March 2019. The Company has acquired the shares from Ships International Inc. (the "Seller"), an entity affiliated with the Company's Chief Executive Officer, for an aggregate purchase price of $3.95 million. Following its delivery, the vessel will enter into a time charter with an entity affiliated with the Seller for a firm duration of one year at a gross daily rate of $16,000, with a charterer's option to extend for two additional years at $17,000 and $18,000, respectively.
|
· |
100% of the issued and outstanding shares of South California Inc., a Marshall Islands company that has entered into a new building contract for a high specification, scrubber-equipped, 157,000 dwt Suezmax Crude Oil Carrier under construction at Hyundai Samho Heavy Industries Co. Ltd. in South Korea and scheduled for delivery during April 2019. The Company has acquired the shares from the Seller for an aggregate purchase price of $8.95 million. Following its delivery, the vessel will enter into a time charter with an entity affiliated with the Seller for a firm duration of one year at a gross daily rate of $25,000, with a charterer's option to extend for two additional years at $26,000 and $27,000, respectively.
|
· |
100% of the issued outstanding shares of Malibu Warrior Inc., a Marshall Islands company that has entered into a new building contract for a high specification, scrubber-equipped, 157,000 dwt Suezmax Crude Oil Carrier under construction at Hyundai Samho Heavy Industries Co. Ltd. in South Korea and scheduled for delivery during May 2019. The Company has acquired the shares from the Seller for an aggregate purchase price of $8.95 million. Following its delivery, the vessel will enter into a time charter with an entity affiliated with the Seller for a firm duration of one year at a gross daily rate of $25,000, with a charterer's option to extend for two additional years at $26,000 and $27,000, respectively.
|
· |
10% of the issued and outstanding shares of Eco Seven Inc., a Marshall Islands company that owns M/T Stena Elegance, a high specification 50,000 dwt MR product/chemical tanker delivered in February 2017 at Hyundai Vinashin. The Company has acquired the shares from an entity affiliated with the Company's Chief Executive Officer for an aggregate purchase price of $1.6 million. As a result of the transaction the Company will own 100% of the issued and outstanding shares of Eco Seven Inc.
|
B. |
Business Overview
|
Name
|
Deadweight
|
Charterer
|
End of firm period
|
Charterer's Optional Periods
|
Gross Rate fixed period/ options
|
|||
M/T Stenaweco Energy
|
49,737
|
Stena Weco A/S
|
February 2021
|
1+1 years
|
$15,616 / $17,350 / $18,100
|
|||
M/T Stenaweco Evolution
|
49,737
|
Stena Weco A/S
|
October 2021
|
1+1 years
|
$15,516 / $17,200 / $18,000
|
Name
|
Deadweight
|
Charterer
|
End of firm period
|
Charterer's Optional Periods
|
Gross Rate fixed period/ options
|
|||
M/T Eco Fleet
|
39,208
|
BP Shipping Limited
|
July 2018
|
1+1 years
|
$15,200 / $16,000 / $16,750
|
|||
M/T Eco Revolution
|
39,208
|
BP Shipping Limited
|
January 2019
|
1+1 years
|
$15,200 / $16,000 / $16,750
|
|||
M/T Stenaweco Excellence
|
49,737
|
Stena Weco A/S
|
November 2020
|
1+1 years
|
$15,000 until June 2019 and $16,200 after / $17,200 / $18,000
|
|||
M/T Nord Valiant
|
49,737
|
DS Norden A/S
|
August 2021
|
1+1 years
|
$16,800 / $17,600 / $18,400
|
|||
M/T Stenaweco Elegance
|
50,118
|
Stena Weco A/S
|
March 2021
|
1+1 years
|
$15,000 until December 2018 and $16,500 after / $17,500 / $18,500
|
Name
|
Deadweight
|
Charterer
|
End of firm period
|
Charterer's Optional Periods
|
Gross Rate fixed period/ options
|
Delivery date
|
Shipyard
|
|||
M/T Eco Holmby Hills
|
49,737
|
Clearlake Shipping Pte Ltd
|
March 2021
|
1+1 years
|
$14,100 1
st
year, $14,600 2
nd
year and $15,025 3
rd
year / $15,400 / $16,400
|
Delivered
|
Hyundai Mipo Vinashin
|
|||
M/T Eco Palm Springs
|
49,737
|
Clearlake Shipping Pte Ltd
|
May 2021
|
1+1 years
|
$14,250 1
st
year, $14,750 2
nd
year and $15,175 3
rd
year / $15,550 / $16,550
|
May 2018
|
Hyundai Mipo Vinashin
|
Name
|
Deadweight
|
Charterer
|
End of firm period
|
Charterer's Optional Periods
|
Gross Rate fixed period/ options
|
Delivery date
|
Shipyard
|
||||
M/T Eco Palm Desert
|
50,000
|
Central Tankers Chartering Inc
|
September 2021
|
1+1 years
|
$14,750 / $15,250 / $15,750
|
September 2018
|
Hyundai Mipo Vinashin
|
||||
M/T Eco California
|
50,000
|
Shell Tankers Singapore Private Limited
|
January 2021
|
1 year
|
$13,750 / $13,950 plus 50% profit share
|
January 2019
|
Hyundai Mipo S. Korea
|
||||
Hull No 8242
|
50,000
|
Central Tankers Chartering Inc
|
March 2020
|
1+1 years
|
$16,000 / $17,000 / $18,000
|
March 2019
|
Hyundai Mipo S. Korea
|
||||
Hull No 874
|
159,000
|
Central Tankers Chartering Inc
|
April 2020
|
1+1 years
|
$25,000 / $26,000 / $27,000
|
April 2019
|
Hyundai Samho S. Korea
|
||||
Hull No 875
|
159,000
|
Central Tankers Chartering Inc
|
May 2020
|
1+1 years
|
$25,000 / $26,000 / $27,000
|
May 2019
|
Hyundai Samho S. Korea
|
· |
injury to, destruction or loss of, or loss of use of, natural resources and related assessment costs;
|
· |
injury to, or economic losses resulting from, the destruction of real and personal property;
|
· |
net loss of taxes, royalties, rents, fees or net profit revenues resulting from injury, destruction or loss of real or personal property, or natural resources;
|
· |
loss of subsistence use of natural resources that are injured, destroyed or lost;
|
· |
lost profits or impairment of earning capacity due to injury, destruction or loss of real or personal property or natural resources; and
|
· |
net cost of increased or additional public services necessitated by removal activities following a discharge of oil, such as protection from fire, safety or health hazards, and loss of subsistence use of natural resources
|
· |
on-board installation of automatic identification systems to provide a means for the automatic transmission of safety-related information from among similarly equipped ships and shore stations, including information on a ship's identity, position, course, speed and navigational status;
|
· |
on-board installation of ship security alert systems, which do not sound on the vessel but only 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.
|
C. |
Organizational Structure
|
D. |
Property, Plants and Equipment
|
ITEM 4A. |
UNRESOLVED STAFF COMMENTS
|
ITEM 5. |
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
|
A. |
Operating Results
|
· |
Calendar days
. We define calendar days as the total number of days the vessels were in our possession for the relevant period. Calendar days are an indicator of the size of our fleet during the relevant period and affect both the amount of revenues and expenses that we record during that period.
|
· |
Available days
. We define available days as the number of calendar days less the aggregate number of days that our vessels are off-hire due to scheduled repairs, or scheduled guarantee inspections in the case of newbuildings, vessel upgrades or special or intermediate surveys and the aggregate amount of time that we spend positioning our vessels. Companies in the shipping industry generally use 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 available days in a period less the aggregate number of days that our vessels are off-hire due to unforeseen technical circumstances. The shipping industry uses operating days to measure the aggregate number of days in a period that our vessels actually generate revenues.
|
· |
Fleet utilization
. We calculate fleet utilization by dividing the number of operating days during a period by the number of available days during that period. The shipping industry uses fleet utilization to measure a company's efficiency in finding suitable employment for its vessels and minimizing the number of days that its vessels are off-hire for reasons other than scheduled repairs or scheduled guarantee inspections in the case of newbuildings, vessel upgrades, special or intermediate surveys and vessel positioning.
|
· |
Bareboat Charter Rates.
Under a bareboat charter party, all operating costs, voyage costs and cargo-related costs are covered by the charterer, who takes both the operational and the shipping market risk.
|
· |
TCE Revenues / TCE Rates
. We define TCE revenues as revenues minus voyage expenses. Voyage expenses primarily consist of port, canal and fuel costs that are unique to a particular voyage, which would otherwise be paid by a charterer under a time charter, as well as commissions. We believe that presenting revenues net of voyage expenses neutralizes the variability created by unique costs associated with particular voyages or the deployment of vessels on the spot market and facilitates comparisons between periods on a consistent basis. We calculate daily TCE rates by dividing TCE revenues by operating days for the relevant time period. TCE revenues include demurrage revenue, which represents fees charged to charterers associated with our spot market voyages when the charterer exceeds the agreed upon time required to load or discharge a cargo.
|
· |
obtain the charterer's consent to us as the new owner;
|
· |
obtain the charterer's consent to a new technical manager;
|
· |
in some cases, obtain the charterer's consent to a new flag for the vessel;
|
· |
arrange for a new crew for the vessel, and where the vessel is on charter, in some cases, the crew must be approved by the charterer;
|
· |
replace all hired equipment on board, such as gas cylinders and communication equipment;
|
· |
negotiate and enter into new insurance contracts for the vessel through our own insurance brokers; and
|
· |
register the vessel under a flag state and perform the related inspections in order to obtain new trading certificates from the flag state.
|
· |
employment and operation of tankers; and
|
· |
management of the financial, general and administrative elements involved in the conduct of our business and ownership of tankers.
|
· |
vessel maintenance and repair;
|
· |
crew selection and training;
|
· |
vessel spares and stores supply;
|
· |
contingency response planning;
|
· |
onboard safety procedures auditing;
|
· |
accounting;
|
· |
vessel insurance arrangement;
|
· |
vessel chartering;
|
· |
vessel security training and security response plans (ISPS);
|
· |
obtain ISM certification and audit for each vessel within the six months of taking over a vessel;
|
· |
vessel hire management;
|
· |
vessel surveying; and
|
· |
vessel performance monitoring.
|
· |
management of our financial resources, including banking relationships,
i.e.
, administration of bank loans and bank accounts;
|
· |
management of our accounting system and records and financial reporting;
|
· |
administration of the legal and regulatory requirements affecting our business and assets; and
|
· |
management of the relationships with our service providers and customers.
|
· |
charter rates and periods of charter hire for our tankers;
|
· |
utilization of our tankers (earnings efficiency);
|
· |
levels of our tanker's operating expenses and dry-docking costs;
|
· |
depreciation and amortization expenses;
|
· |
financing costs; and
|
· |
fluctuations in foreign exchange rates.
|
|
Year Ended December 31,
|
Change
|
||||||||||||||||||||||||||
|
YE16 v YE15
|
YE17 v YE16
|
||||||||||||||||||||||||||
|
2015
|
2016
|
2017
|
$
|
%
|
$
|
%
|
|||||||||||||||||||||
|
($ in thousands)
|
|||||||||||||||||||||||||||
Voyage Revenues
|
13,075
|
28,433
|
39,363
|
15,358
|
117.5
|
%
|
10,930
|
38.4
|
%
|
|||||||||||||||||||
Voyage expenses
|
370
|
736
|
999
|
366
|
98.9
|
%
|
263
|
35.7
|
%
|
|||||||||||||||||||
Bareboat charter hire expenses
|
5,274
|
6,299
|
6,282
|
1,025
|
19.4
|
%
|
(17
|
)
|
-0.3
|
%
|
||||||||||||||||||
Amortization of prepaid bareboat charter hire
|
1,431
|
1,577
|
1,657
|
146
|
10.2
|
%
|
80
|
5.1
|
%
|
|||||||||||||||||||
Vessel operating expenses
|
4,789
|
9,913
|
13,444
|
5,124
|
107.0
|
%
|
3,531
|
35.6
|
%
|
|||||||||||||||||||
Vessel depreciation
|
668
|
3,467
|
5,744
|
2,799
|
419.0
|
%
|
2,277
|
65.7
|
%
|
|||||||||||||||||||
Management fees-related parties
|
1,621
|
1,824
|
4,730
|
203
|
12.5
|
%
|
2,906
|
159.3
|
%
|
|||||||||||||||||||
Other operating (income) / loss
|
274
|
(3,137
|
)
|
(914
|
)
|
(3,411
|
)
|
-1244.9
|
%
|
2,223
|
-70.9
|
%
|
||||||||||||||||
General and administrative expenses
|
2,983
|
2,906
|
5,805
|
(77
|
)
|
-2.6
|
%
|
2,899
|
99.8
|
%
|
||||||||||||||||||
Vessels impairment charge
|
3,081
|
-
|
0
|
(3,081
|
)
|
-100.0
|
%
|
-
|
-
|
%
|
||||||||||||||||||
Expenses
|
20,491
|
23,585
|
37,747
|
3,094
|
15.1
|
%
|
14,162
|
60.0
|
%
|
|||||||||||||||||||
Operating income / (loss)
|
(7,416
|
)
|
4,848
|
1,616
|
12,264
|
165.4
|
%
|
(3,232
|
)
|
-66.7
|
%
|
|||||||||||||||||
Interest and finance costs
|
(719
|
)
|
(3,093
|
)
|
(15,793
|
)
|
(2,374
|
)
|
330.2
|
%
|
(12,700
|
)
|
410.6
|
%
|
||||||||||||||
(Loss)/Gain on derivative financial instruments
|
(392
|
)
|
(698
|
)
|
(301
|
)
|
(306
|
)
|
78.1
|
%
|
397
|
-56.9
|
%
|
|||||||||||||||
Interest income
|
-
|
-
|
13
|
-
|
-
|
13
|
-
|
|||||||||||||||||||||
Other, net
|
20
|
(5
|
)
|
1,120
|
(25
|
)
|
-125.0
|
%
|
1,125
|
-22,500.0
|
%
|
|||||||||||||||||
Total other (expenses) / income, net
|
(1,091
|
)
|
(3,796
|
)
|
(14,961
|
)
|
(2,705
|
)
|
247.9
|
%
|
(11,165
|
)
|
294.1
|
%
|
||||||||||||||
Net income/(loss)
|
(8,507
|
)
|
1,052
|
(13,345
|
)
|
9,559
|
112.4
|
%
|
(14,397
|
)
|
-1368.5
|
%
|
1. |
Voyage Revenues
|
2. |
Voyage expenses
|
3. |
Vessel operating expenses
|
4. |
Vessel depreciation
|
5. |
Management fees—related parties
|
6. |
Other operating income
|
7. |
General and administrative expenses
|
8. |
Interest and Finance Costs
|
a) |
An increase of $8.3 million in amortization of debt discount, $7.5 million relating to the convertibility features of the Series C convertible preferred shares and $0.8 million relating to the convertibility features of the Family Trading facility, both absent in the same period of 2016 (please see "Item 18. Financial Statements—Note 9—Debt.").
|
b) |
An increase of $2.7 million in loan interest expense, since in 2017 we had senior loan facilities with ABN Amro Bank, NORD/LB Bank, Alpha Bank and At Bank for the financing of the vessels M/T Eco Revolution, M/T Eco Fleet, M/T Nord Valiant, M/T Stenaweco Excellence, M/T Stenaweco Elegance and M/T Eco Palm desert as well as the Family Trading Facility, while in the same period of 2016 we only incurred interest expense for M/T Eco Fleet for twelve months, M/T Eco Revolution for eleven months, M/T Nord Valiant for four months(ABN Facility), and M/T Stenaweco Excellence (NORD/LB facility) for approximately seven months.
|
c) |
An increase of $1.5 million in amortization of finance fees mainly due to the fact that in 2017 we accelerated the amortization of arrangement fees of four of our short term notes due to their prepayment ($0.6 million), we incurred additional amortization expenses relating to the Amended Family Trading Facility ($0.3 million) and the Series C convertible preferred shares we treated as debt ($0.3 million) and incurred increased amortization expenses due to the fact that we had more senior debt facilities in place compared to the same period in 2016 ($0.3 million).
|
d) |
An increase of $0.2 million in other financial costs.
|
9. |
Loss on derivative financial instruments
|
· |
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.
|
B. |
Liquidity and Capital Resources
|
a) |
ABN Facility
|
· |
First priority mortgage over M/T Eco Fleet, M/T Eco Revolution and M/T Nord Valiant;
|
· |
Assignment of insurance and earnings of the mortgaged vessels;
|
· |
Specific assignment of any time charters with duration of more than 12 months;
|
· |
Corporate guarantee of TOP Ships Inc.;
|
· |
Pledge of the shares of the shipowning subsidiaries; and
|
· |
Pledge over the earnings account of the vessels.
|
b) |
NORD/LB Facility
|
· |
First priority mortgage over M/T Stenaweco Excellence;
|
· |
Assignment of insurance and earnings of the mortgaged vessel;
|
· |
Specific assignment of any time charters with duration of more than 12 months;
|
· |
Corporate guarantee of TOP Ships Inc.;
|
· |
Pledge of the shares of the shipowning subsidiary;
|
· |
Pledge over the earnings account of the vessel.
|
c) |
Alpha Bank Facility
|
· |
First priority mortgage over M/T Stenaweco Elegance;
|
· |
Assignment of insurance and earnings of the mortgaged vessel;
|
· |
Specific assignment of any time charters with duration of more than 12 months;
|
· |
Corporate guarantee of Top Ships Inc.;
|
· |
Pledge of the shares of the shipowning subsidiary;
|
· |
Pledge over the earnings account of the vessel.
|
d) |
AT Bank Senior Facility
|
· |
First priority mortgage over M/T Eco Palm Desert;
|
· |
Assignment of insurance and earnings of the mortgaged vessel;
|
· |
Specific assignment of any time charters with duration of more than 12 months;
|
· |
Corporate guarantee of Top Ships Inc.;
|
· |
Pledge of the shares of the shipowning subsidiary;
|
· |
Pledge over the earnings account of the vessel.
|
e) |
AT Bank Predelivery Facility
|
• |
Assignment to the bank of the newbuilding contract and of the respective refund guarantee of M/T Eco Palm Desert;
|
• |
Corporate guarantee of Top Ships Inc.;
|
• |
Pledge of the shares of the subsidiary owning the newbuilding contract;
|
f) |
Amended Family Trading Credit Facility
|
g) |
Unsecured Promissory Notes
|
Year ending December 31,
|
Bareboat Charter Lease Payments ($ millions)
|
|||
2018
|
6.3
|
|||
2019
|
6.3
|
|||
2020
|
6.3
|
|||
2021
|
6.3
|
|||
2022
|
1.0
|
|||
Total
|
26.2
|
C. |
Research and Development, Patents and Licenses, Etc.
|
D. |
Trend Information
|
E. |
Off-Balance Sheet Arrangements
|
F. |
Tabular Disclosure of Contractual Obligations
|
|
Payments due by period
|
|||||||||||||||||||
Contractual Obligations:
|
Total
|
Less than 1 year
|
1-3 years
|
3-5 years
|
More than 5 years
|
|||||||||||||||
(1) (i) Long term debt
A
|
$
|
$119.3
|
$
|
$10.2
|
$
|
$19.2
|
$
|
$46.3
|
$
|
43.6
|
||||||||||
(ii) Interest
B
|
$
|
$26.9
|
$
|
$6.0
|
$
|
$11.5
|
$
|
$7.4
|
$
|
2.0
|
||||||||||
(2) (i) Short term debt
C
|
$
|
$8.9
|
$
|
$8.9
|
-
|
-
|
-
|
|||||||||||||
(ii) Interest
D
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
(3) Operating leases
E
|
$
|
$26.2
|
$
|
$6.3
|
$
|
$12.6
|
$
|
$7.3
|
-
|
|||||||||||
(4) Vessel Management Fees to CSM
F
|
$
|
$3.6
|
$
|
$2.8
|
$
|
$0.8
|
-
|
-
|
||||||||||||
(5) Vessel acquisitions
G
|
$
|
$57.8
|
$
|
$37.5
|
$
|
$20.3
|
-
|
-
|
||||||||||||
(6) Investments
H
|
$
|
$27.0
|
$
|
$5.0
|
$
|
4.5
|
$
|
4.0
|
$
|
13.5
|
||||||||||
Total
|
$
|
$269.7
|
$
|
$76.7
|
$
|
$68.9
|
$
|
$65.0
|
$
|
59.1
|
A. |
Relates to the principal repayments of $20.1 million under our NORD/LB Facility, $53.5 million under our ABN Facility, $22.2 million under our Alpha Bank Facility and $23.5 million under our AT Bank Senior Facility (see "Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Debt Facilities").
|
B. |
Relates to estimated interest payments on our ABN Facility, NORD/LB Facility, Alpha Bank Facility and AT Bank Senior Facility, based on our average outstanding debt. In the cases there are no Interest Rate Swap agreements in place, we have assumed a LIBOR of 2.5% going forward (see "Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Debt Facilities" and "Item 11. Quantitative and qualitative disclosures about market risk—Interest Rate Risk").
|
C. |
Relates to the principal repayments under our unsecured note with Crede, assuming no further drawdowns and settlement in full in 2018. (see "Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Debt Facilities").
|
D. |
Relates to estimated interest payments under our unsecured note with Crede, assuming no further drawdowns and settlement in full in 2018. (see "Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Debt Facilities").
|
E. |
Relates to the bareboat hire payable for M/T Stenaweco Energy and M/T Stenaweco Evolution.
|
F. |
Relates to our obligation for monthly management fees under our new letter agreement with CSM for all the vessels in our fleet. These fees also cover the provision of services rendered in relation to the maintenance of proper books and records, services in relation to financial reporting requirements under SEC and NASDAQ rules as well as newbuilding supervision services. Please see "Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Central Shipping Monaco Letter Agreement, Management Agreements, and Other Agreements."
|
G. |
Relates to the remaining installments for the acquisition of our two newbuilding vessels in 2018. Please see "Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Newbuilding Acquisitions". These amounts exclude the remaining installments of the vessels belonging to our Joint Venture with Gunvor. Note that after the acquisition of Hull No 8242, Hull No 874 and Hull No 875 that we agreed on January 2017, the contractual obligations for vessel acquisitions will be $209.3 million, $66.2 million in 2018 and $143.1 in 2019.
|
H. |
Relates to the remaining installments for the acquisition of the two newbuilding vessels in 2018 that belong to our Joint Venture with Gunvor. These amounts are presented net of expected debt drawdowns under a facility of $38.2 million our 50% owned subsidiaries entered into in March 2018 for the financing of the above-mentioned two newbuilding vessels. Please see "Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Newbuilding Acquisitions".
|
ITEM 6. |
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
|
A. |
Directors and Senior Management
|
Name
|
Age
|
Position
|
|||
Evangelos J. Pistiolis
|
45
|
Director, President, Chief Executive Officer
|
|||
Vangelis G. Ikonomou
|
53
|
Director, Executive Vice President and Chairman of the Board
|
|||
Alexandros Tsirikos
|
44
|
Director, Chief Financial Officer
|
|||
Konstantinos Patis
|
44
|
Chief Technical Officer
|
|||
Konstantinos Karelas
|
45
|
Independent Non-Executive Director
|
|||
Alexandros G. Economou
|
44
|
Independent Non-Executive Director
|
|||
Stavros Emmanouil
|
75
|
Independent Non-Executive Director
|
|||
Paolo Javarone
|
44
|
Independent Non-Executive Director
|
B. |
Compensation
|
C. |
Board Practices
|
D. |
Employees
|
E. |
Share Ownership
|
ITEM 7. |
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
|
A. |
Major Shareholders
|
Name and Address of Beneficial Owner
|
Number of Shares Owned
|
Percent of Class
|
||||||
Lax Trust
(1)
|
2,600,016
|
13.3
|
%
|
(1) |
The above information is derived, in part, from the Schedule 13D/A filed with the SEC on March 29, 2018 as updated for subsequent corporate events. The Lax Trust is an irrevocable trust established for the benefit of certain family members of Evangelos J. Pistiolis, our President, Chief Executive Officer and Director. The business address of the Lax Trust is Level 3, 18 Stanley Street, Auckland 1010, New Zealand.
The above percentage ownership is based on 19,573,617 of our common shares outstanding, which is calculated by taking the sum of (i) 16,973,617 common shares outstanding, and (ii) 2,600,000 common shares issuable upon the exercise of all of the 1,250,000 2014 Warrants currently beneficially owned by Race Navigation. The Lax Trust may also be deemed to hold
all of the 100,000 outstanding shares of our Series D Preferred Stock. Each Series D Preferred Share carries 1,000 votes. By its ownership of 100% of our Series D Preferred Shares, Lax Trust has control over our actions
.
|
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.
|
A. |
Offer and Listing Details
|
|
HIGH
|
LOW
|
||||||
For the Fiscal Year Ended December 31, 2017
|
$
|
891,000.00
|
$
|
2.40
|
||||
For the Fiscal Year Ended December 31, 2016
|
$
|
1,512,000.00
|
$
|
234,000.00
|
||||
For the Fiscal Year Ended December 31, 2015
|
$
|
3,221,990.00
|
$
|
481,830.00
|
||||
For the Fiscal Year Ended December 31, 2014
|
$
|
26,586,000.00
|
$
|
1,818,000.00
|
||||
For the Fiscal Year Ended December 31, 2013
|
$
|
36,918,000.00
|
$
|
8,821,570.00
|
For the Month
|
||||||||
March 2018 (through March 28, 2018)
|
$
|
2.84
|
$
|
1.30
|
||||
February 2018
|
$
|
3.50
|
$
|
1.30
|
||||
January 2018
|
$
|
3.00
|
$
|
1.70
|
||||
December 2017
|
$
|
5.70
|
$
|
2.40
|
||||
November 2017
|
$
|
35.50
|
$
|
4.00
|
||||
October 2017
|
$
|
8.20
|
$
|
3.20
|
||||
September 2017
|
$
|
15.40
|
$
|
5.90
|
B. |
Plan of Distribution
|
C. |
Markets
|
D. |
Selling Shareholders
|
E. |
Dilution
|
F. |
Expenses of the Issue
|
ITEM 10. |
ADDITIONAL INFORMATION
|
A. |
Share Capital
|
B. |
Memorandum and Articles of Association
|
· |
prior to the date of the transaction that resulted in the shareholder becoming an interested shareholder, the Board approved either the business combination or the transaction that resulted in the shareholder becoming an interested shareholder;
|
· |
upon consummation of the transaction that resulted in the shareholder becoming an interested shareholder, the interested shareholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced;
|
· |
at or subsequent to the date of the transaction that resulted in the shareholder becoming an interested shareholder, the business combination is approved by the Board and authorized at an annual or special meeting of shareholders by the affirmative vote of at least 66 2/3% of the outstanding voting stock that is not owned by the interested shareholder; and
|
· |
the shareholder became an interested shareholder prior to the consummation of the initial public offering.
|
· |
not be redeemable;
|
· |
entitle holders to quarterly dividend payments in an amount per share equal to the aggregate per share amount of all cash dividends, and the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions other than a dividend payable in our common shares or a subdivision of the our outstanding common shares (by reclassification or otherwise), declared on our common shares since the immediately preceding quarterly dividend payment date; and
|
· |
entitle holders to one vote on all matters submitted to a vote of the shareholders of the Company.
|
· |
Flip In.
If an Acquiring Person obtains beneficial ownership of 15% or more of our common shares, then each Right will entitle the holder thereof to purchase, for the Exercise Price, a number of our common shares (or, in certain circumstances, cash, property or other securities of the Company) having a then-current market value of twice the Exercise Price. However, the Rights are not exercisable following the occurrence of the foregoing event until such time as the Rights are no longer redeemable by the Company, as further described below.
|
· |
Flip Over
. If, after an Acquiring Person obtains 15% or more of our common shares, (i) the Company merges into another entity; (ii) an acquiring entity merges into the Company; or (iii) the Company sells or transfers 50% or more of its assets, cash flow or earning power, then each Right (except for Rights that have previously been voided as set forth above) will entitle the holder thereof to purchase, for the Exercise Price, a number of our common shares of the person engaging in the transaction having a then-current market value of twice the Exercise Price.
|
· |
Notional Shares
. Shares held by affiliates and associates of an Acquiring Person, including certain entities in which the Acquiring Person beneficially owns a majority of the equity securities, and Notional Common Shares (as defined in the Rights Agreement) held by counterparties to a Derivatives Contract (as defined in the Rights Agreement) with an Acquiring Person, will be deemed to be beneficially owned by the Acquiring Person.
|
C. |
Material Contracts
|
D |
Exchange controls
|
E. |
Taxation
|
(1) |
we are organized in a foreign country, or our country of organization, that grants an "equivalent exemption" to corporations organized in the United States; and
|
(2) |
either
|
A. |
more than 50% of the value of our stock is owned, directly or indirectly, by individuals who are "residents" of our country of organization or of another foreign country that grants an "equivalent exemption" to corporations organized in the United States (each such individual a "qualified shareholder" and such individuals collectively, "qualified shareholders"), which we refer to as the "50% Ownership Test," or
|
B. |
our stock is "primarily and regularly traded on an established securities market" in our country of organization, in another country that grants an "equivalent exemption" to U.S. corporations, or in the United States, which we refer to as the "Publicly-Traded Test."
|
· |
We have, or are considered to have, a fixed place of business in the United States involved in the earning of shipping income; and
|
· |
substantially all of our U.S.-source shipping income is attributable to regularly scheduled transportation, such as the operation of a vessel that follows a published schedule with repeated sailings at regular intervals between the same points for voyages that begin or end in the United States.
|
· |
is a U.S. citizen or resident, U.S. corporation or other U.S. entity taxable as a corporation, an estate the income of which is subject to U.S. federal income taxation regardless of its source, or a trust if a court within the United States is able to exercise primary jurisdiction over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust;
|
· |
owns the common stock as a capital asset, generally, for investment purposes; and
|
· |
owns less than 10% of our common stock for U.S. federal income tax purposes.
|
· |
at least 75% of our gross income for such taxable year consists of passive income (e.g., dividends, interest, capital gains and rents derived other than in the active conduct of a rental business); or
|
· |
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, 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 year before we 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 a trade or business conducted by the Non-U.S. Holder 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, that gain is taxable only if it is attributable to a permanent establishment maintained by the Non-U.S. Holder in the United States; or
|
· |
the Non-U.S. Holder is an individual who is present in the United States for 183 days or more during the taxable year of disposition and other conditions are met.
|
· |
fail to provide an accurate taxpayer identification number;
|
· |
are notified by the IRS that you have failed to report all interest or dividends required to be shown on your U.S. federal income tax returns; or
|
· |
in certain circumstances, fail 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
|
SWAP Number (Nr)
|
Counterparty
|
Notional amount
as of December 31, 2017
|
Start Date
|
End Date
|
Fixed Rate Payable
|
Fair Value – Liability as of December 31, 2017
|
|||||||||||
1
|
ABN Amro
|
16,575
|
April 13, 2018
|
July 13, 2021
|
1.4425
|
%
|
332
|
||||||||||
2
|
ABN Amro
|
18,663
|
December 21, 2016
|
January 13, 2022
|
2.0800
|
%
|
42
|
||||||||||
3
|
ABN Amro
|
17,250
|
December 21, 2016
|
August 10, 2022
|
2.1250
|
%
|
20
|
||||||||||
4
|
NORD/LB Bank
|
20,116
|
May 17, 2017
|
May 17, 2023
|
2.1900
|
%
|
(3
|
)
|
|||||||||
Total
|
72,604
|
|
|
391
|
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
|
· |
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
|
· |
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of Company's management and directors; and
|
· |
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
|
ITEM 16A. |
AUDIT COMMITTEE FINANCIAL EXPERT
|
ITEM 16B. |
CODE OF ETHICS
|
ITEM 16C. |
PRINCIPAL AUDITOR FEES AND SERVICES
|
U.S. dollars in thousands,
|
Year Ended
|
|||||||
|
2016
|
2017
|
||||||
Audit Fees
|
149.0
|
274.1
|
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
|
· |
Majority Independent Board.
Nasdaq requires, among other things, that a listed company has a Board of Directors comprised of a majority of independent directors. As permitted under Marshall Islands law, our Board of Directors is comprised of four independent directors, one non-independent, non-executive director and three executive directors.
|
· |
Audit Committee
. Nasdaq requires, among other things, that a listed company has an audit committee with a minimum of three independent members, at least one of whom meets certain standards of financial sophistication. As permitted under Marshall Islands law, our audit committee consists of four independent directors but we do not designate any one audit commit member as meeting the standards of financial sophistication.
|
· |
As a foreign private issuer, we are not required to hold regularly scheduled board meetings at which only independent directors are present.
|
· |
In lieu of obtaining shareholder approval prior to the issuance of designated securities, we will comply with provisions of the BCA, which allows our Board of Directors to approve share issuances.
|
ITEM 16H. |
MINE SAFETY DISCLOSURE
|
ITEM 17. |
FINANCIAL STATEMENTS
|
ITEM 18. |
FINANCIAL STATEMENTS
|
ITEM 19. |
EXHIBITS
|
ITEM 19. |
EXHIBITS
|
Number
|
Description of Exhibits
|
|
1.1
|
||
|
|
|
1.2
|
||
|
|
|
1.3
|
||
|
||
1.4
|
||
1.5
|
||
1.6
|
||
1.7
|
||
1.8
|
||
|
|
|
1.9
|
||
1.10
|
||
|
|
|
1.11
|
||
|
|
|
2.1
|
||
|
|
|
2.2
|
||
|
|
|
2.3
|
||
|
|
|
2.4
|
||
|
|
|
2.5
|
||
|
|
|
2.6
|
||
|
|
|
2.7
|
||
|
||
2.8
|
||
|
||
4.1
|
4.2
|
|
|
|
4.3
|
|
4.4
|
|
|
|
4.5
|
|
4.6
|
|
|
|
4.7
|
|
|
|
4.8
|
|
|
|
4.9
|
|
|
|
4.10
|
|
|
|
4.11
|
|
|
|
4.12
|
|
|
|
4.13
|
|
|
|
4.14
|
|
|
|
4.15
|
|
|
|
4.16
|
|
|
|
4.17
|
|
|
|
4.18
|
|
|
|
4.19
|
|
|
|
4.20
|
|
|
|
4.21
|
|
|
|
4.22
|
|
|
|
4.23
|
|
|
|
4.24
|
4.25
|
|
|
|
4.26
|
|
4.27
|
|
4.28 |
|
4.29
|
|
|
|
4.30
|
|
|
|
4.31
|
|
|
|
4.32
|
|
|
|
4.33
|
|
|
|
4.34
|
|
|
|
4.35
|
|
|
|
4.36
|
|
|
|
4.37
|
|
|
|
4.38
|
|
4.39
|
|
|
|
4.40
|
|
4.41 | Shipbuilding Contract relating to Hull No. S444, dated February 20, 2017, between Eco Nine Inc. and Hyundai Mipo Dockyard Co., Ltd. |
4.42
|
|
|
|
4.43
|
|
|
|
4.44
|
|
|
|
4.45
|
|
|
|
4.46
|
4.47
|
|
4.48
|
|
4.49
|
|
4.50
|
|
4.51
|
|
|
|
4.52
|
|
|
|
4.53 |
|
4.54
|
|
|
|
4.55
|
|
|
|
4.56
|
|
4.57
|
|
4.58
|
|
|
|
4.59
|
|
|
|
4.60
|
|
4.61
|
|
4.62 |
|
4.63
|
|
|
|
4.64
|
|
|
|
4.65
|
|
|
|
4.66
|
|
|
|
4.67
|
|
|
|
4.68
|
|
|
|
4.69
|
|
|
|
4.70
|
4.71 |
|
4.72 |
|
4.73 |
|
4.74
|
|
4.75
|
|
4.76
|
|
8.1
|
|
|
|
12.1
|
|
|
|
12.2
|
|
|
|
13.1
|
|
|
|
13.2
|
|
|
|
15.1
|
|
|
|
101
|
The following materials from the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2017, formatted in eXtensible Business Reporting Language (XBRL): (i) Consolidated Balance Sheets as of December 31, 2016 and 2017; (ii) Consolidated Statements of Comprehensive Income/(Loss) for the years ended December 31, 2015, 2016 and 2017; (iii) Consolidated Statements of Stockholders' Equity for the years ended December 31, 2015, 2016 and 2017; (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2015, 2016 and 2017; and (v) Notes to Consolidated Financial Statements
|
(1) |
Incorporated by reference to Exhibit 99.2 of the Company's Current Report on Form 6-K, filed on June 24, 2011
|
(2) |
Incorporated by reference to Exhibit 99.1 of the Company's Current Report on Form 6-K, filed on April 18, 2014
|
(3) |
Incorporated by reference to Exhibit 1.3 of the Company's Annual Report on Form 20-F, filed on April 26, 2016
|
(4) |
Incorporated by reference to Exhibit 99.1 of the Company's Current Report on Form 6-K filed on March 9, 2007
|
(5) |
Incorporated by reference to Exhibit 1 of the Company's Current Report on Form 6-K filed on November 28, 2014
|
(6) |
Incorporated by reference to Exhibit 2.1 of the Company's Annual Report on Form 20-F, filed on June 29, 2009
|
(7) |
Incorporated by reference to Exhibit 2.2 of the Company's Annual Report of Form 20-F, filed on March 14, 2017
|
(8) |
Incorporated by reference to Exhibit 4.3 of the Company's Post-Effective Amendment No. 1 to the Registration Statement on Form F-1, filed on May 9, 2016 (File No. 333-194690)
|
(9) |
Incorporated by reference to Exhibit 4.1 of the Company's Pre-Effective Amendment No. 2 to the Registration Statement on Form F-1, filed on May 13, 2014 (File No. 333-194690)
|
(10) |
Incorporated by reference to Exhibit 3.1 of the Company's Current Report on Form 6-K, filed on September 22, 2016
|
(11) |
Incorporated by reference to Exhibit 3.1 of the Company's Current Report on Form 6-K, filed on November 23, 2016
|
(12) |
Incorporated by reference to Exhibit 3.1 of the Company's Current Report on Form 6-K, filed on February 21, 2017
|
(13) |
Incorporated by reference to Exhibit 4.1 of the Company's Current Report on Form 6-K, filed on May 8, 2017
|
(14) |
Incorporated by reference to Exhibit 4.1 of the Company's Annual Report on Form 20-F, filed on April 26, 2016
|
(15) |
Incorporated by reference to Exhibit 4.1 of the Company's Current Report on Form 6-K, filed on September 22, 2016
|
(16) |
Incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 6-K, filed on November 23, 2016
|
(17) |
Incorporated by reference to Exhibit 10.2 of the Company's Current Report on Form 6-K, filed on November 23, 2016
|
(18) |
Incorporated by reference to Exhibit 10.42 of the Company's Registration Statement on Form F-1, filed on March 19, 2014, as amended (File No. 333-194960)
|
(19) |
Incorporated by reference to Exhibit 10.43 of the Company's Registration Statement on Form F-1, filed on March 19, 2014, as amended (File No. 333-194960)
|
(20) |
Incorporated by reference to Exhibit 4.29 of the Company's Annual Report on Form 20-F, filed on April 29, 2015
|
(21) |
Incorporated by reference to Exhibit 4.30 of the Company's Annual Report on Form 20-F, filed on April 29, 2015
|
(22) |
Incorporated by reference to Exhibit 4.33 of the Company's Annual Report on Form 20-F, filed on April 29, 2015
|
(23) |
Incorporated by reference to Exhibit 4.31 of the Company's Annual Report on Form 20-F, filed on April 29, 2015
|
(24) |
Incorporated by reference to Exhibit 4.32 of the Company's Annual Report on Form 20-F, filed on April 29, 2015
|
(25) |
Incorporated by reference to Exhibit 4.34 of the Company's Annual Report on Form 20-F, filed on April 29, 2015
|
(26) |
Incorporated by reference to Exhibit 4.37 of the Company's Annual Report on Form 20-F, filed on April 26, 2016
|
(27) |
Incorporated by reference to Exhibit 4.38 the Company's Annual Report on Form 20-F, filed on April 26, 2016
|
(28) |
Incorporated by reference to Exhibit 4.18 of the Company's Annual Report of Form 20-F, filed on March 14, 2017
|
(29) |
Incorporated by reference to Exhibit 4.39 of the Company's Annual Report on Form 20-F, filed on April 26, 2016
|
(30) |
Incorporated by reference to Exhibit 4.40 of the Company's Annual Report on Form 20-F, filed on April 26, 2016
|
(31) |
Incorporated by reference to Exhibit 4.41 of the Company's Annual Report on Form 20-F, filed on April 26, 2016
|
(32) |
Incorporated by reference to Exhibit 4.42 of the Company's Annual Report on Form 20-F, filed on April 26, 2016
|
(33) |
Incorporated by reference to Exhibit 10.40 of the Company's Post-Effective Amendment No. 2 to the Registration Statement on Form F-1, filed on June 23, 2016 (File No. 333-194690)
|
(34) |
Incorporated by reference to Exhibit 1.1 of the Company's Current Report on Form 6-K, filed on February 2, 2017
|
(35) |
Incorporated by reference to Exhibit 1.1 of the Company's Current Report on Form 6-K, filed on March 20, 2017
|
(36) |
Incorporated by reference to Exhibit 1.1 of the Company's Current Report on Form 6-K, filed on March 27, 2017
|
(37) |
Incorporated by reference to Exhibit 1.1 of the Company's Current Report on Form 6-K, filed on April 5, 2017
|
(38) |
Incorporated by reference to Exhibit 1.1 of the Company's Current Report on Form 6-K, filed on April 28, 2017
|
(39) |
Incorporated by reference to Exhibit 1.1 of the Company's Current Report on Form 6-K, filed on February 7, 2017
|
(40) |
Incorporated by reference to Exhibit 1.2 of the Company's Current Report on Form 6-K, filed on February 7, 2017
|
(41) |
Incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 6-K, filed on February 21, 2017
|
(42) |
Incorporated by reference to Exhibit 4.28 of the Company's Annual Report of Form 20-F, filed on March 14, 2017
|
(43) |
Incorporated by reference to Exhibit B of the Schedule 13D/A of Family Trading Inc., Sovereign Holdings Inc., Epsilon Holdings Inc., Oscar Shipholding Ltd, Race Navigation Inc., Tankers Family Inc., and the Lax Trust, filed on March 1, 2017
|
(44) |
Incorporated by reference to Exhibit 1.1 of the Company's Current Report on Form 6-K, filed on March 22, 2017
|
(45) |
Incorporated by reference to Exhibit 1.2 of the Company's Current Report on Form 6-K, filed on March 22, 2017
|
(46) |
Incorporated by reference to Exhibit 1.1 of the Company's Current Report on Form 6-K, filed on March 28, 2017
|
(47) |
Incorporated by reference to Exhibit 1.2 of the Company's Current Report on Form 6-K, filed on March 28, 2017
|
(48) |
Incorporated by reference to Exhibit 1.1 of the Company's Current Report on Form 6-K, filed on April 5, 2017
|
(49) |
Incorporated by reference to Exhibit 1.2 of the Company's Current Report on Form 6-K, filed on April 5 2017
|
(50) |
Incorporated by reference to Exhibit 1.1 of the Company's Current Report on Form 6-K, filed on May 15, 2017
|
(51) |
Incorporated by reference to Exhibit 1.2 of the Company's Current Report on Form 6-K, filed on May 15, 2017
|
(52) |
Incorporated by reference to Exhibit 1.1 of the Company's Current Report on Form 6-K, filed on September 15, 2017
|
(53) |
Incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 6-K, filed on May 8, 2017
|
(54) |
Incorporated by reference to Exhibit 1.1 of the Company's Current Report on Form 6-K, filed on November 8, 2017
|
(55) |
Incorporated by reference to Exhibit 1.1 of the Company's Current Report on Form 6-K, filed on November 14, 2017
|
(56) |
Incorporated by reference to Exhibit 1.2 of the Company's Current Report on Form 6-K, filed on November 14, 2017
|
(57) |
Incorporated by reference to Exhibit 1.1 of the Company's Current Report on Form 6-K, filed on December 11, 2017
|
(58) |
Incorporated by reference to Exhibit 1.1 of the Company's Current Report on Form 6-K, filed on December 15, 2017
|
(59) |
Incorporated by reference to Exhibit 1.2 of the Company's Current Report on Form 6-K, filed on December 15, 2017
|
(60) |
Incorporated by reference to Exhibit 1.1 of the Company's Current Report on Form 6-K, filed on January 8, 2018
|
(61) |
Incorporated by reference to Exhibit 1.2 of the Company's Current Report on Form 6-K, filed on January 8, 2018
|
|
TOP SHIPS INC.
|
|
|
(Registrant)
|
|
|
|
|
Date: March 29, 2018
|
By:
|
/s/ Evangelos J. Pistiolis
|
|
|
Evangelos J. Pistiolis
|
|
|
President, Chief Executive Officer, and Director
|
|
Page
|
Report of Independent Registered Public Accounting Firm
|
F-2
|
|
|
Consolidated Balance sheets as of December 31, 2016 and 2017
|
F-3
|
|
|
Consolidated Statements of Comprehensive loss for the years ended December 31, 2015, 2016 and 2017
|
F-4
|
|
|
Consolidated Statements of Stockholders' equity for the years ended December 31, 2015, 2016 and 2017
|
F-5
|
|
|
Consolidated Statements of Cash flows for the years ended December 31, 2015, 2016 and 2017
|
F-6
|
|
|
Notes to consolidated financial statements
|
F-8
|
TOP SHIPS INC.
|
CONSOLIDATED BALANCE SHEETS
|
DECEMBER 31, 2016 AND 2017
|
|
(Expressed in thousands of U.S. Dollars - except share and per share data)
|
|
|
|
|
|||||
|
Additional
|
|
|
|||||
Preferred Stock
|
Common Stock
|
Paid in
|
Accumulated Deficit
|
|||||
# of Shares
|
Par Value
|
# of Shares*
|
Par Value*
|
Capital*
|
attributable to common stockholders
|
Non-controlling interest
|
Total
|
|
BALANCE, December 31, 2014
|
10
|
-
|
318,315
|
(275,786)
|
-
|
42,529
|
||
Net loss and comprehensive loss
|
-
|
-
|
-
|
(8,507)
|
-
|
(8,507)
|
||
Stock-based compensation (Note 12)
|
1
|
-
|
131
|
-
|
-
|
131
|
||
BALANCE, December 31, 2015
|
11
|
-
|
318,446
|
(284,293)
|
-
|
34,153
|
||
Net income and comprehensive income
|
-
|
-
|
-
|
1,052
|
-
|
1,052
|
||
Stock-based compensation (Note 12)
|
-
|
239
|
-
|
-
|
239
|
|||
Common shares issued in exchange of assumption of Delos Termination Fee (Note 5)
|
8
|
-
|
3,796
|
-
|
-
|
3,796
|
||
Issuance of common stock due to exercise of warrants (Note 11)
|
12
|
6,281
|
-
|
-
|
6,281
|
|||
Deemed dividend for Series B convertible preferred stock's beneficial conversion feature (Note 19)
|
-
|
-
|
(1,403)
|
-
|
-
|
(1,403)
|
||
Beneficial conversion feature of Series B convertible preferred stock (Note 19)
|
-
|
-
|
1,403
|
-
|
-
|
1,403
|
||
BALANCE, December 31, 2016
|
31
|
-
|
328,762
|
(283,241)
|
-
|
45,521
|
||
Net loss
|
-
|
-
|
-
|
(13,404)
|
32
|
(13,372)
|
||
Issuance of common stock pursuant to convertible related party loans (Note 9)
|
4
|
2,040
|
-
|
-
|
2,040
|
|||
Issuance of common stock pursuant to the Common Stock Purchase Agreement (Note 11)
|
632,775
|
6
|
38,383
|
-
|
-
|
38,389
|
||
Issuance of common stock pursuant to the Crede Common Stock Purchase Agreement (Note 11)
|
7,148,889
|
72
|
28,561
|
-
|
-
|
28,633
|
||
Issuance of common stock pursuant to Series C convertible preferred shares conversions (Note 9 and 11)
|
904,646
|
9
|
8,204
|
-
|
-
|
8,213
|
||
Series C convertible preferred stock's beneficial conversion feature (Note 9)
|
-
|
-
|
7,500
|
-
|
-
|
7,500
|
||
Issuance of common stock due to exercise of warrants (Note 11)
|
219,250
|
2
|
1,538
|
-
|
-
|
1,540
|
||
Stock-based compensation (Note 12)
|
-
|
-
|
(25)
|
-
|
-
|
(25)
|
||
Non-controlling interest on acquisition of Eco Seven Inc (Note 1)
|
5,278
|
5,278
|
||||||
Reduction of non-controlling interest arising from Company's purchase of additional ownership interest in Eco Seven In. (Note 1)
|
(4,125)
|
(4,125)
|
||||||
Excess of consideration over acquired assets (Note 1)
|
-
|
-
|
(12,909)
|
(12,909)
|
||||
Cancellation of fractional shares due to reverse stock splits
|
(4)
|
-
|
-
|
-
|
-
|
-
|
||
Issuance of common stock pursuant to Series B convertible preferred stock conversions reflected in Mezzanine equity (Note 19)
|
18,026
|
1,743
|
-
|
-
|
1,743
|
|||
Issuance of Series D preferred stock (Note 11)
|
100,000
|
1
|
-
|
-
|
-
|
-
|
-
|
1
|
Additional paid-in capital attributed to non-controlling interests
|
-
|
-
|
(1,153)
|
-
|
(1,153)
|
|||
BALANCE, December 31, 2017
|
100,000
|
1
|
8,923,617
|
89
|
402,644
|
(296,645)
|
1,185
|
107,274
|
The accompanying notes are an integral part of these consolidated financial statements.
|
TOP SHIPS INC.
|
||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||||||
FOR THE YEARS ENDED DECEMBER 31, 2015, 2016 AND 2017
|
||||||||||||
(Expressed in thousands of U.S. Dollars)
|
||||||||||||
2015
|
2016
|
2017
|
||||||||||
Cash Flows from Operating Activities:
|
||||||||||||
Net (loss)/ income
|
(8,507
|
)
|
1,052
|
(13,372
|
)
|
|||||||
Adjustments to reconcile net (loss)/ income to net cash
|
||||||||||||
(used in)/provided by operating activities:
|
||||||||||||
Vessel depreciation (Note 4)
|
668
|
3,467
|
5,744
|
|||||||||
Other fixed assets depreciation
|
127
|
121
|
120
|
|||||||||
Equity losses in unconsolidated joint ventures
|
-
|
-
|
27
|
|||||||||
Non-cash debt conversion expenses
|
-
|
-
|
842
|
|||||||||
Amortization and write off of deferred financing costs
|
538
|
163
|
1,640
|
|||||||||
Amortization of debt discount
|
-
|
-
|
7,500
|
|||||||||
Stock-based compensation expense (Note 12)
|
131
|
239
|
(25
|
)
|
||||||||
Change in fair value of derivative financial instruments (Note 17)
|
617
|
682
|
(175
|
)
|
||||||||
Write-off of short term debt (Note 9)
|
-
|
-
|
(1,118
|
)
|
||||||||
Loss on sale of other fixed assets
|
-
|
22
|
-
|
|||||||||
Amortization of prepaid bareboat charter hire (Note 6)
|
1,431
|
1,577
|
1,657
|
|||||||||
Impairment on vessel (Note 4)
|
3,081
|
-
|
-
|
|||||||||
Other operating income
|
-
|
(3,137
|
)
|
(914
|
)
|
|||||||
(Increase)/Decrease in:
|
||||||||||||
Trade accounts receivable
|
(57
|
)
|
88
|
(602
|
)
|
|||||||
Inventories
|
(78
|
)
|
(181
|
)
|
(62
|
)
|
||||||
Prepayments and other
|
340
|
(429
|
)
|
436
|
||||||||
Due from related parties
|
25
|
(34
|
)
|
34
|
||||||||
Increase/(Decrease) in:
|
||||||||||||
Due to related parties
|
110
|
14
|
(1,034
|
)
|
||||||||
Accounts payable
|
114
|
954
|
(207
|
)
|
||||||||
Other non-current liabilities
|
(430
|
)
|
-
|
-
|
||||||||
Accrued liabilities
|
503
|
128
|
1,196
|
|||||||||
Unearned revenue
|
-
|
1,978
|
(992
|
)
|
||||||||
|
||||||||||||
Net Cash (used in)/ provided by Operating Activities
|
(1,387
|
)
|
6,704
|
695
|
||||||||
|
||||||||||||
Cash Flows from Investing Activities:
|
||||||||||||
|
||||||||||||
Advances for vessels under construction and capitalized expenses (Note 4)
|
(53,410
|
)
|
(73,383
|
)
|
(6,757
|
)
|
||||||
Vessel acquisitions (Note 4)
|
-
|
-
|
(34,671
|
)
|
||||||||
Investments in unconsolidated joint ventures (Note 20)
|
-
|
-
|
(17,639
|
)
|
||||||||
Net proceeds from sale of vessels (Note 4)
|
54,152
|
-
|
-
|
|||||||||
Net proceeds from sale of other fixed assets
|
-
|
29
|
-
|
|||||||||
Acquisition of other fixed assets
|
(6
|
)
|
-
|
-
|
||||||||
|
||||||||||||
Net Cash provided by/(used in) Investing Activities
|
736
|
(73,354
|
)
|
(59,067
|
)
|
|||||||
|
||||||||||||
Cash Flows from Financing Activities:
|
||||||||||||
|
||||||||||||
Proceeds from debt (Note 9)
|
24,450
|
65,385
|
24,849
|
|||||||||
Proceeds from short-term notes (Note 9)
|
-
|
-
|
68,790
|
|||||||||
Proceeds from related party debt (Note 9)
|
3,850
|
235
|
3,148
|
|||||||||
Principal payments of debt
|
(500
|
)
|
(5,085
|
)
|
(9,546
|
)
|
||||||
Proceeds from issuance of Series C convertible preferred stock (Note 9 and 11)
|
-
|
-
|
7,500
|
|||||||||
Prepayment of debt
|
(19,419
|
)
|
-
|
-
|
||||||||
Prepayment of related party debt (Note 9)
|
(2,250
|
)
|
-
|
(7,233
|
)
|
|||||||
Excess of purchase price over book value of vessels
|
-
|
-
|
(12,909
|
)
|
||||||||
Proceeds from common stock purchase agreements
|
-
|
-
|
9,726
|
|||||||||
Proceeds from warrant exercises
|
-
|
5,765
|
1,567
|
|||||||||
Proceeds from issuance of Series B convertible preferred stock
|
-
|
2,001
|
-
|
|||||||||
Equity offering issuance costs
|
(237
|
)
|
(87
|
)
|
(1,342
|
)
|
||||||
Payment of financing costs
|
(989
|
)
|
(388
|
)
|
(1,159
|
|
||||||
Net Cash provided by Financing Activities
|
4,905
|
67,826
|
83,391
|
|||||||||
|
||||||||||||
Net increase in cash and cash equivalents and restricted cash
|
4,254
|
1,176
|
25,019
|
|||||||||
|
||||||||||||
Cash and cash equivalents and restricted cash at beginning of year
|
164
|
4,418
|
5,594
|
|||||||||
Cash and cash equivalents and restricted cash at end of the year
|
4,418
|
5,594
|
30,613
|
|||||||||
Cash breakdown
|
||||||||||||
Cash and cash equivalents
|
2,668
|
127
|
24,081
|
|||||||||
Restricted cash, current
|
-
|
1,257
|
1,283
|
|||||||||
Restricted cash, non-current
|
1,750
|
4,210
|
5,249
|
|||||||||
SUPPLEMENTAL CASH FLOW INFORMATION
|
||||||||||||
Capital expenditures included in Accounts payable/Accrued liabilities
|
1,093
|
205
|
43
|
|||||||||
Interest paid net of capitalized interest
|
189
|
2,434
|
5,103
|
|||||||||
Finance fees included in Accounts payable/Accrued liabilities
|
670
|
67
|
372
|
|||||||||
Common stock purchase agreements, warrant exercise and Series B convertible preferred stock issuance costs included in liabilities
|
515
|
792
|
1,108
|
|||||||||
Shares issued as consideration for the assumption of liabilities
|
-
|
3,796
|
-
|
|||||||||
Beneficial conversion feature of Series B convertible preferred stock (Note 19)
|
-
|
1,403
|
-
|
|||||||||
Deemed dividend for beneficial conversion feature of Series B convertible preferred stock (Note 19)
|
-
|
(1,403
|
)
|
-
|
||||||||
Shares issued in exchange for converting debt, interest & finance fees
|
-
|
-
|
10,890
|
|||||||||
Settlement of notes with common stock issued (Note 9 and 11)
|
-
|
-
|
58,794
|
1.
|
Basis of Presentation and General Information:
|
Companies
|
Date of
Incorporation
|
Country of
Incorporation
|
Activity
|
Top Tanker Management Inc.
|
May 2004
|
Marshall Islands
|
Management company
|
Wholly owned Shipowning Companies with vessels in operations
during years ended December 31, 2015, 2016 and 2017 |
Date of
Incorporation
|
Country of
Incorporation
|
Vessel
|
|
1
|
Monte Carlo 71 Shipping Company Limited
|
June 2014
|
Marshall Islands
|
M/T Stenaweco Energy (acquired June 2014), sold January 2015
|
2
|
Monte Carlo One Shipping Company Ltd
|
June 2012
|
Marshall Islands
|
M/T Stenaweco Evolution (acquired March 2014), sold March 2015
|
3
|
Monte Carlo Seven Shipping Company Limited
|
April 2013
|
Marshall Islands
|
M/T Stenaweco Excellence (acquired March 2014)
|
4
|
Monte Carlo Lax Shipping Company Limited
|
May 2013
|
Marshall Islands
|
M/T Nord Valiant (acquired March 2014)
|
5
|
Monte Carlo 37 Shipping Company Limited
|
September 2013
|
Marshall Islands
|
M/T Eco Fleet (acquired March 2014)
|
6
|
Monte Carlo 39 Shipping Company Limited
|
December 2013
|
Marshall Islands
|
M/T Eco Revolution (acquired March 2014 )
|
Wholly owned Shipowning Companies with vessels
under construction during year ended December 31, 2017 |
Date of
Incorporation
|
Country of
Incorporation
|
Vessel
|
|
7
|
Astarte International Inc
|
April 2017
|
Marshall Islands
|
M/T Eco Palm Desert (contract acquired April 2017)
|
8
|
PCH77 Shipping Company Limited
|
September 2017
|
Marshall Islands
|
M/T Eco California ( contract acquired November 2017)
|
Shipowning Company
|
Date of
Incorporation
|
Country of
Incorporation
|
Vessel
|
|
1
|
Eco Seven Inc.
|
February 2017
|
Marshall Islands
|
M/T Stenaweco Elegance (acquired February, 2017)
|
Shipowning Companies
|
Date of
Incorporation
|
Country of
Incorporation
|
Vessel
|
|
1
|
City of Athens Inc.
|
November 2016
|
Marshall Islands
|
M/T Eco Holmby Hills (contract acquired June, 2017)
|
2
|
Eco Nine Inc.
|
March 2015
|
Marshall Islands
|
M/T Eco Palm Springs (contract acquired June, 2017)
|
Consideration in cash
|
24,100
|
Less: Net assets of companies acquired
|
11,191
|
Excess of consideration over acquired assets
|
12,909
|
2.
|
Significant Accounting Policies:
|
(a) |
Principles of Consolidation:
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and include the accounts and operating results of Top Ships Inc. and its subsidiaries referred to in Note 1. Intercompany balances and transactions have been eliminated on consolidation. Non-controlling interests are stated at the non-controlling interest's proportion of the net assets of the subsidiaries where the Company has less than 100% interest. Subsequent to initial recognition the carrying amount of non-controlling interest is increased or decreased by the non-controlling interest's share of subsequent changes in the equity of such subsidiaries. Total comprehensive income is attributed to a non-controlling interest even if this results in the non-controlling interest having a deficit balance. Changes in the Company's ownership interests in subsidiaries that do not result in the Company losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Company's interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to owners of the Company.
|
(b) |
Use of Estimates:
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Critical estimates mainly include impairment of vessels, vessel useful lives and residual values and fair values of derivative instruments.
|
(c) |
Foreign Currency Translation:
The Company's functional currency is the U.S. Dollar because all vessels operate in international shipping markets, and therefore primarily transact business in U.S. Dollars. The Company's books of account 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 to U.S. Dollars based on the year-end exchange rates and any gains and losses are included in the statement of comprehensive loss.
|
(d) |
Cash and Cash Equivalents:
The Company considers highly liquid investments such as time deposits and certificates of deposit with an original maturity of three months or less to be cash equivalents.
|
(e) |
Restricted Cash:
The Company considers amounts that are pledged, blocked, held as cash collateral, required to be maintained with a specific bank or be maintained by the Company as minimum cash under the terms of a loan agreement, as restricted and these amounts are presented separately on the balance sheets. In the event original maturities are shorter than twelve months, such deposits are presented as current assets while if original maturities are longer than twelve months, such deposits are presented as non-current assets.
|
(f) |
Trade Accounts Receivable, net:
The amount shown as trade accounts receivable, net at each balance sheet date, includes estimated recoveries from charterers for hire billings, net of a provision for doubtful accounts. At each balance sheet date, all potentially uncollectible accounts are assessed individually, combined with the application of a historical recoverability ratio, for purposes of determining the appropriate provision for doubtful accounts. The Company assessed that it had no potentially uncollectible accounts and hence formed no provision for doubtful accounts at December 31, 2016 and 2017 respectively.
|
(g) |
Inventories:
Inventories consist of lubricants and paints on board the vessels. Inventories may also consist of bunkers when vessels are unemployed or are operating in the spot market. Inventories are stated at the lower of cost or market value. Cost, which consists of the purchase price, is determined by the first in, first out method.
|
(h) |
Vessel Cost:
Vessels are stated at cost, which consists of the contract price, pre-delivery costs and capitalized interest incurred during the construction of new building vessels, and any material expenses incurred upon acquisition (improvements and delivery costs). Subsequent 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. Repairs and maintenance are charged to expense as incurred and are included in Vessel operating expenses in the accompanying consolidated statements of comprehensive loss.
|
(i) |
Impairment of Long-Lived Assets:
The Company evaluates the existence of impairment indicators whenever events or changes in circumstances indicate that the carrying values of the Company's long lived assets are not recoverable. Such indicators of potential impairment include, vessel sales and purchases, business plans and overall market conditions. If there are indications for impairment present, the Company determines undiscounted projected net operating cash flows for each vessel and compares it to the vessel's carrying value. If the carrying value of the related vessel exceeds its undiscounted future net cash flows, the carrying value is reduced to its fair value, and the difference is recognized as an impairment loss.
|
(j) |
Vessel Depreciation:
Depreciation is calculated using the straight-line method over the estimated useful life of the vessels, after deducting the estimated salvage value. Each vessel's salvage value is equal to the product of its lightweight tonnage and estimated scrap rate, of $300 per lightweight ton. 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 useful life is adjusted at the date such regulations are adopted.
|
(k) |
Long Lived Assets Held for Sale:
The Company classifies vessels as being held for sale when the following criteria are met: (a) management, having the authority to approve the action, commits to a plan to sell the asset, (b) the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets, (c) an active program to locate a buyer and other actions required to complete the plan to sell the asset have been initiated, (d) the sale of the asset is probable and transfer of the asset is expected to qualify for recognition as a completed sale, within one year, (e) the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value, (f) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.
|
(l) |
Other Fixed Assets, Net:
Other fixed assets, net, consist of furniture, office equipment, cars and leasehold improvements, stated at cost, which consists of the purchase/contract price less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful life of the assets as presented below:
|
Description
|
Useful Life (years)
|
Leasehold improvements
|
Until the end of the lease term (December 2024)
|
Cars
|
6
|
Office equipment
|
5
|
Furniture and fittings
|
5
|
Computer equipment
|
3
|
(m) |
Accounting for Dry-Docking Costs:
All dry-docking and special survey costs are expensed in the period incurred.
|
(n) |
Financing Costs:
Fees incurred and paid to the lenders for obtaining new loans or refinancing existing ones are recorded as a contra to debt and such fees are amortized to interest and finance costs over the life of the related debt using the effective interest method. Unamortized fees relating to loans repaid or refinanced are expensed when a repayment or refinancing is made and charged to interest and finance costs.
|
(o) |
Accounting for Revenue and Expenses:
Revenues are generated from time charter arrangements. A time charter is a contract for the use of a vessel for a specific period of time and a specified daily charter hire rate, which is generally payable monthly in advance. Vessel operating expenses are expensed as incurred. Unearned revenue represents cash received prior to year-end related to revenue applicable to periods after December 31 of each year.
|
(p) |
Stock Incentive Plan:
All share-based compensation related to the grant of restricted and/or unrestricted shares provided to employees and to non-employee directors as well as to third party consultants and service providers for their services provided is included in general and administrative expenses in the consolidated statements of comprehensive loss. The shares that do not contain any future service vesting conditions are considered vested shares and recognized in full on the grant date. The shares that contain a time-based service vesting condition are considered non-vested shares on the grant date and recognized on a straight-line basis over the vesting period. The shares granted to employees or directors, vested and non-vested, are measured at fair value which is equal to the market value of the Company's common stock on the grant date.
In addition, unvested awards granted to non-employees are measured at their then-current fair value as of the financial reporting dates (Note 12).
|
(q) |
Earnings / (Loss) per Share:
Basic earnings/(loss) per share are computed by dividing net income or loss available to common stockholders by the weighted average number of common shares deemed outstanding during the year. Diluted earnings/(loss) per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised. For purposes of calculating diluted earnings per share the denominator of the diluted earnings per share calculation includes the incremental shares assumed issued under the treasury stock method weighted for the period the non-vested shares were outstanding. The computation of diluted earnings per share also reflects the potential dilution that could occur if warrants to issue common stock were exercised, to the extent that they are dilutive, using the treasury stock method, as well as the potential dilution that could occur if convertible preferred stock were converted, using the if-converted method. Finally net income or loss available to common stockholders is reduced to reflect any deemed dividends on convertible preferred stock, weighted for the period the convertible preferred shares were outstanding.
|
(r) |
Derivatives and Hedging
: The Company records every derivative instrument (including certain derivative instruments embedded in other contracts) on the balance sheet as either an asset or liability measured at its fair value, with changes in the derivatives' fair value recognized in earnings unless specific hedge accounting criteria are met. The Company has not applied hedge accounting for its derivative instruments during the periods presented.
|
(s) |
Financial liabilities:
Financial liabilities are classified as either financial liabilities at 'fair value through the profit and loss' ("FVTPL") or 'other financial liabilities'. Financial instruments classified as FVTPL are recognized at fair value in the balance sheet when the Company has an obligation to perform under the contractual provisions of those instruments. Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. Changes in the financial instruments are recognized in earnings, except in the cases where these financial instruments fall under the guidance in ASC 815-40, where they are initially classified in equity and are initially measured at fair value in permanent equity and subsequent changes in fair value are not subsequently measured. Other financial liabilities (including borrowings and trade and other payables) are subsequently measured at amortized cost using the effective interest rate method.
|
(t) |
Segment Reporting:
The Chief Operating Decision Maker ("CODM"), Mr. Evangelos J. Pistiolis, receives financial information and evaluates the Company's operations by charter revenues and not by the length, type of vessel or type of ship employment for its customers (i.e. time or bareboat charters) or by geographical region as the charterer is free to trade the vessel worldwide and as a result, the disclosure of geographic information is impracticable. The CODM does not use discrete financial information to evaluate the operating results for each such type of charter or vessel. Although revenue can be identified for these types of charters or vessels, management cannot and does not identify expenses, profitability or other financial information for these various types of charters or vessels. As a result, management, including the CODM, reviews operating results solely by revenue per day and operating results of the fleet, and thus the Company has determined that it operates as one reportable segment.
|
(u) |
Leasing:
Leases are classified as capital leases if they meet at least one of the following criteria: (i) the leased asset automatically transfers title at the end of the lease term; (ii) the lease contains a bargain purchase option; (iii) the lease term equals or exceeds 75% of the remaining estimated economic life of the leased asset; (iv) or the present value of the minimum lease payments equals or exceeds 90% of the excess of fair value of the leased property. If none of the above criteria is met, the lease is accounted for as an operating lease. Operating lease payments are recognized as an operating expense in the consolidated statements of comprehensive loss on a straight-line basis over the lease term. For sale and lease back transactions, when the lease qualifies as an operating lease and the lease back is considered "more than minor but less than substantially all" i.e. the seller-lessee retains more than a minor part but less than substantially all of the use of the asset, the resulting gains or losses are deferred and amortized to income over the lease period.
|
(v) |
Beneficial conversion feature:
A beneficial conversion feature is defined as a non detachable conversion feature that is in the money at the commitment date. The beneficial conversion feature guidance requires recognition of the conversion option's in-the-money portion, the intrinsic value of the option, in equity, with an offsetting reduction to the carrying amount of the instrument. The resulting discount is amortized as a dividend over either the life of the instrument, if a stated maturity date exists, or to the earliest conversion date, if there is no stated maturity date. If the earliest conversion date is immediately upon issuance, the dividend must be recognized at inception. When there is a subsequent change to the conversion ratio based on a future occurrence, the new conversion price may trigger the recognition of an additional beneficial conversion feature on occurrence.
|
(w) |
Investments in unconsolidated joint ventures:
The Company's investments in unconsolidated joint ventures are accounted for using the equity method of accounting. Under the equity method of accounting, investments are stated at initial cost and are adjusted for subsequent additional investments and the Company's proportionate share of earnings or losses and distributions. The Company evaluates its investments in unconsolidated joint ventures for impairment when events or circumstances indicate that the carrying value of such investments may have experienced other than temporary decline in value below their carrying value. If the estimated fair value is less than the carrying value and is considered other than a temporary decline, the carrying value is written down to its estimated fair value and the resulting impairment is recorded in the Consolidated Statements of comprehensive loss.
|
(x) |
Recent Accounting Pronouncements:
|
3.
|
Going Concern:
|
4(a)
|
Advances for Vessels Acquisitions / Under Construction:
|
Advances for vessels acquisitions / under construction
|
||||
Balance, December 31, 2015
|
25,098
|
|||
— Additions
|
72,495
|
|||
— Transferred to Vessels
|
(97,593
|
)
|
||
Balance, December 31, 2016
|
-
|
|||
— Advances paid
|
5,995
|
|||
—Capitalized expenses
|
762
|
|||
Balance, December 31, 2017
|
6,757
|
4(b)
|
Vessels, net:
|
|
Vessel Cost
|
Accumulated Depreciation
|
Net Book Value
|
|||||||||
Balance, December 31, 2015
|
32,592
|
(548
|
)
|
32,044
|
||||||||
— Transferred from advances for vessels acquisitions / under construction
|
97,593
|
-
|
97,593
|
|||||||||
— Depreciation
|
-
|
(3,467
|
)
|
(3,467
|
)
|
|||||||
Balance, December 31, 2016
|
130,185
|
(4,015
|
)
|
126,170
|
||||||||
— Acquisitions
|
34,509
|
-
|
34,509
|
|||||||||
— Depreciation
|
-
|
(5,744
|
)
|
(5,744
|
)
|
|||||||
Balance, December 31, 2017
|
164,694
|
(9,759
|
)
|
154,935
|
Vessel Name
|
Delivery Date
|
Yard Installments
|
Capitalized Expenses
|
Final Carrying Amount
|
Time Charter
|
|||||||||
M/T Eco Revolution
|
January 21, 2016
|
31,400
|
1,409
|
32,809
|
BP Shipping Limited
|
|||||||||
M/T Stenaweco Excellence
|
May 20, 2016
|
30,778
|
1,475
|
32,253
|
Stena Weco A/S
|
|||||||||
M/T Nord Valiant
|
August 10, 2016
|
30,667
|
1,864
|
32,531
|
Dampskibsselskabet NORDEN A/S
|
|||||||||
M/T Stenaweco Elegance
|
February 28, 2017
|
33,935
|
574
|
34,509
|
Stena Weco A/S
|
5.
|
Transactions with Related Parties:
|
|
Year Ended December 31,
|
||||||||||||
2015
|
2016
|
2017
|
Presented in:
|
||||||||||
Management fees
|
140
|
118
|
34
|
Capitalized in Vessels, net / Advances for vessels acquisitions / under construction –Balance sheet
|
|||||||||
701
|
1,598
|
2,242
|
Management fees - related parties -Statement of comprehensive loss
|
||||||||||
Supervision services fees
|
72
|
43
|
31
|
Capitalized in Vessels, net / Advances for vessels acquisitions / under construction –Balance sheet
|
|||||||||
Superintendent fees
|
66
|
104
|
136
|
Vessel operating expenses -Statement of comprehensive loss
|
|||||||||
114
|
67
|
22
|
Capitalized in Vessels, net / Advances for vessels acquisitions / under construction –Balance sheet
|
||||||||||
Accounting and reporting cost
|
189
|
179
|
183
|
Management fees - related parties -Statement of comprehensive loss
|
|||||||||
Financing fees
|
44
|
131
|
139
|
Net in Current and Non-current portions of long-term debt – Balance sheet
|
|||||||||
Commission for sale and purchase of vessels
|
570
|
-
|
1,081
|
Management fees - related parties -Statement of comprehensive loss
|
|||||||||
Commission on charter hire agreements
|
161
|
358
|
487
|
Voyage expenses - Statement of comprehensive loss
|
|||||||||
Performance incentive fee
|
600
|
-
|
1,250
|
Management fees - related parties - Statement of comprehensive loss
|
|||||||||
Total
|
2,657
|
2,598
|
5,605
|
|
6.
|
Leases
|
Current portion of Prepaid bareboat charter hire
|
1,656
|
|||
Non-current portion of Prepaid bareboat charter hire
|
5,278
|
|||
Total
|
6,934
|
Year ending December 31,
|
Bareboat Charter Lease Payments
|
|||
2018
|
6,282
|
|||
2019
|
6,282
|
|||
2020
|
6,299
|
|||
2021
|
6,282
|
|||
2022
|
1,034
|
|||
Total
|
26,179
|
B. |
Lease arrangements, under which the Company acts as the lessor
|
Year ending December 31,
|
Time Charter receipts
|
|||
2018
|
39,290
|
|||
2019
|
39,352
|
|||
2020
|
39,030
|
|||
2021
|
13,627
|
|||
Total
|
131,299
|
7.
|
Prepayments and other:
|
|
December 31, 2016
|
December 31, 2017
|
||||||
Prepaid expenses
|
670
|
140
|
||||||
Guarantees
|
15
|
17
|
||||||
Advances to various creditors
|
63
|
119
|
||||||
Other receivables
|
116
|
152
|
||||||
Total
|
864
|
428
|
8.
|
Inventories:
|
December 31, 2016
|
December 31, 2017
|
|||||||
Lubricants
|
542
|
574
|
||||||
Consumable stores
|
41
|
71
|
||||||
Total
|
583
|
645
|
9.
|
Debt:
|
Bank / Vessel(s)
|
December 31,
|
December 31,
|
||||||
2016
|
2017
|
|||||||
Total long term debt:
|
||||||||
ABN (M/T Eco Fleet, M/T Eco Revolution and M/T Nord Valiant)
|
59,838
|
53,538
|
||||||
NORD/LB (M/T Stenaweco Excellence)
|
22,162
|
20,116
|
||||||
Alpha Bank (M/T Stenaweco Elegance)
|
-
|
22,150
|
||||||
Total long term debt
|
82,000
|
95,804
|
||||||
Less: Deferred finance fees
|
(1,546
|
)
|
(2,038
|
)
|
||||
Total long term debt net of deferred finance fees
|
80,454
|
93,766
|
||||||
Out of which:
|
||||||||
Current portion of long term debt
|
7,995
|
9,508
|
||||||
Long term debt
|
72,459
|
84,258
|
||||||
Short term debt from related parties:
|
||||||||
Family Trading facility
|
4,085
|
-
|
||||||
Less deferred finance fees
|
-
|
-
|
||||||
Current portion of loans from related parties net of deferred finance fees
|
4,085
|
-
|
||||||
Short Term Debt:
|
||||||||
Unsecured Notes
|
-
|
8,878
|
||||||
AT Bank predelivery facility
|
-
|
1,499
|
||||||
Less deferred finance fees
|
-
|
(194
|
)
|
|||||
Current portion of loans net of deferred finance fees
|
-
|
10,183
|
||||||
Total Debt net of deferred finance fees
|
84,539
|
103,949
|
·
|
First priority mortgage over M/T Eco Fleet, M/T Eco Revolution and M/T Nord Valiant;
|
·
|
Assignment of insurance and earnings of the mortgaged vessels;
|
·
|
Specific assignment of any time charters with duration of more than 12 months;
|
·
|
Corporate guarantee of Top Ships Inc.;
|
·
|
Pledge of the shares of the shipowning subsidiaries;
|
·
|
Pledge over the earnings account of the vessels.
|
• |
First priority mortgage over M/T Stenaweco Excellence;
|
• |
Assignment of insurance and earnings of the mortgaged vessel;
|
• |
Specific assignment of any time charters with duration of more than 12 months;
|
• |
Corporate guarantee of Top Ships Inc.;
|
• |
Pledge of the shares of the shipowning subsidiary;
|
• |
Pledge over the earnings account of the vessel.
|
• |
First priority mortgage over M/T Stenaweco Elegance;
|
• |
Assignment of insurance and earnings of the mortgaged vessel;
|
• |
Specific assignment of any time charters with duration of more than 12 months;
|
• |
Corporate guarantee of Top Ships Inc.;
|
• |
Pledge of the shares of the shipowning subsidiary;
|
• |
Pledge over the earnings account of the vessel.
|
• |
First priority mortgage over M/T Eco Palm Desert;
|
• |
Assignment of insurance and earnings of the mortgaged vessel;
|
• |
Specific assignment of any time charters with duration of more than 12 months;
|
• |
Corporate guarantee of Top Ships Inc.;
|
• |
Pledge of the shares of the shipowning subsidiary;
|
• |
Pledge over the earnings account of the vessel.
|
Agreement date
|
Amount drawn
|
Undrawn Amount
|
Fees
|
Interest
|
Amount settled
|
Outstanding Amount
|
Maturity
|
||||||||||||||||||
November 13
, 2017
|
17,500
|
-
|
-
|
11
|
(17,500
|
)
|
-
|
November 13
, 2019
|
|||||||||||||||||
December 14
, 2017
|
12,500
|
10,000
|
-
|
8
|
(3,622
|
)
|
8,878
|
December 14
, 2019
|
|||||||||||||||||
30,000
|
10,000
|
-
|
19
|
(21,122
|
)
|
8,878
|
Agreement date
|
Amount drawn
|
Fees
|
Interest
|
Amount settled
|
Amounts forgiven
|
Outstanding Amount
|
Maturity
|
Counterparty
|
||||||||||||||||||
February 6, 2017
|
3,500
|
210
|
22
|
(3,500
|
)
|
-
|
-
|
May 15, 2017
|
Kalani
|
|||||||||||||||||
March 22, 2017
|
5,000
|
200
|
7
|
(5,000
|
)
|
-
|
-
|
October 7, 2017
|
Kalani
|
|||||||||||||||||
March 28, 2017
|
10,000
|
-
|
24
|
(10,000
|
)
|
-
|
-
|
August 25, 2017
|
Kalani
|
|||||||||||||||||
April 5, 2017
|
7,700
|
-
|
42
|
(7,700
|
)
|
-
|
-
|
September 4, 2017
|
Kalani
|
|||||||||||||||||
May 15, 2017
|
5,000
|
-
|
28
|
(3,882
|
)
|
(1,118
|
)
|
-
|
August 23, 2017
|
Xanthe
|
||||||||||||||||
June 26, 2017
|
3,000
|
-
|
2
|
(3,000
|
)
|
-
|
-
|
October 24, 2017
|
Kalani
|
|||||||||||||||||
July 12, 2017
|
3,060
|
60
|
16
|
(3,060
|
)
|
-
|
-
|
November 7, 2017
|
Xanthe
|
|||||||||||||||||
September 15, 2017
|
2,020
|
20
|
6
|
(2,020
|
)
|
-
|
-
|
December 14, 2017
|
Xanthe
|
|||||||||||||||||
39,280
|
490
|
147
|
(38,162
|
)
|
(1,118
|
)
|
-
|
• |
Assignment to the bank of the newbuilding contract and of the respective refund guarantee of M/T Eco Palm Desert;
|
• |
Corporate guarantee of Top Ships Inc.;
|
• |
Pledge of the shares of the subsidiary owning the newbuilding contract;
|
a.
|
the price per share issued upon an equity offering of the Company;
|
b.
|
the exercise price of warrants or options for common shares;
|
c.
|
the conversion price of any convertible security into common shares; or
|
d.
|
the implied exchange price of the common shares pursuant to an asset to equity or liability to equity swap,
|
Years
|
||||
December 31, 2018
|
19,099
|
|||
December 31, 2019
|
10,118
|
|||
December 31, 2020
|
9,050
|
|||
December 31, 2021
|
19,965
|
|||
December 31, 2022
|
26,326
|
|||
December 31, 2023 and thereafter
|
43,624
|
|||
Total
|
128,182
|
10.
|
Commitments and Contingencies:
|
11.
|
Common and Preferred Stock, Additional Paid-In Capital and Dividends:
|
·
|
Issuance of common shares:
if the Company issues, sells or is deemed to have issued or sold any common shares for a consideration per share less than the exercise price of the Warrants then the latter shall be reduced to match the reduced consideration per share.
|
·
|
Issuance of options or convertible securities:
if the Company issues or sells any options at a strike price that is lower than the exercise price of the Warrants then the latter will be reduced to match the strike price of the options. If the Company issues convertibles that end up converting at a price per share that is lower than the exercise price of the Warrants then the latter will be reduced to match the conversion price per share.
|
·
|
Holder's right of alternative exercise price following issuance of certain options or convertible securities:
if the Company issues or sells any options or convertible securities that are convertible into or exchangeable or exercisable for common shares at a price which varies or may vary with the market price of the common shares (Variable Price), the warrant holder shall have the right, but not the obligation, to substitute the Variable Price for the exercise price of the Warrants.
|
·
|
Other events:
if the Company takes any action that results in the dilution of the warrant holder not covered by the abovementioned round down protection measures (including, the granting of stock appreciation rights, phantom stock rights or other rights with equity features), then the Company shall determine and implement an appropriate adjustment in the exercise price so as to protect the rights of the warrant holder.
|
12.
|
Stock Incentive Plan:
|
Non-vested Shares
|
Fair value
|
|||||||
As of December 31, 2015
|
0.8
|
576,000
|
||||||
Vested shares on June 30, 2016
|
0.125
|
304,200
|
||||||
As of December 31, 2016
|
0.675
|
405,000
|
||||||
Vested shares on June 30, 2017
|
0.125
|
252
|
||||||
As of December 31, 2017
|
0.55
|
2.50
|
13.
|
Loss Per Common Share:
|
·
|
any incremental shares assumed issued under the treasury stock method weighted for the period the non-vested shares were outstanding,
|
·
|
the potential dilution that could occur if warrants to issue common stock (see Note 11) were exercised, to the extent that they are dilutive, using the treasury stock method,
|
·
|
the potential dilution that could occur if Series B convertible preferred shares were converted, using the if-converted method weighted for the period the Series B convertible preferred shares were outstanding,
|
·
|
the potential dilution that could occur if Series C shares were converted (see Note 11), using the if-converted method weighted for the period the Series C shares were outstanding,
|
·
|
the potential dilution that could occur if the outstanding balance of principal, interest and fees of the Family Trading facility were converted (see Note 9), using the if-converted method,
|
·
|
the potential dilution that could occur if the Company completes all sales pursuant to its Common stock purchase agreement, using the if-converted method, and
|
·
|
any shares granted and vested but not issued up to the reporting date.
|
|
Year Ended December 31,
|
|||||||||||
|
2015
|
2016
|
2017
|
|||||||||
Income:
|
||||||||||||
Net loss attributable to common shareholders
|
(8,507
|
)
|
(351
|
)
|
(13,404
|
)
|
||||||
|
||||||||||||
Earnings per share:
|
||||||||||||
Weighted average common shares outstanding, basic and diluted
|
11
|
22
|
1,063,381
|
|||||||||
Loss per share, basic and diluted
|
(773,364
|
)
|
(15,955
|
)
|
(12.57
|
)
|
14.
|
Voyage and Vessel Operating Expenses:
|
Voyage Expenses
|
Year Ended December 31,
|
|||||||||||
|
2015
|
2016
|
2017
|
|||||||||
Port charges / other voyage expenses
|
27
|
-
|
10
|
|||||||||
Bunkers
|
27
|
20
|
15
|
|||||||||
Commissions
|
316
|
716
|
974
|
|||||||||
Total
|
370
|
736
|
999
|
Vessel Operating Expenses
|
Year Ended December 31,
|
|||||||||||
|
2015
|
2016
|
2017
|
|||||||||
Crew wages and related costs
|
3,090
|
6,885
|
9,228
|
|||||||||
Insurance
|
268
|
542
|
777
|
|||||||||
Repairs and maintenance
|
297
|
520
|
973
|
|||||||||
Spares and consumable stores
|
1,109
|
1,923
|
2,374
|
|||||||||
Registration and tonnage taxes (Note 16)
|
25
|
43
|
92
|
|||||||||
Total
|
4,789
|
9,913
|
13,444
|
15.
|
Interest and Finance Costs:
|
Interest and Finance Costs
|
Year Ended December 31,
|
|||||||||||
|
2015
|
2016
|
2017
|
|||||||||
Gross interest on debt (including $4, $302 and $138, respectively, to related party) (Note 9)
|
503
|
3,208
|
5,724
|
|||||||||
Delos termination fee interest (Note 5)
|
101
|
3
|
-
|
|||||||||
Bank charges and loan commitment fees (including $16, $207 and $366, respectively, to related party)
|
26
|
262
|
440
|
|||||||||
Amortization and write-off of financing fees
|
538
|
291
|
1,640
|
|||||||||
Amortization of Debt Discount (Note 9)
|
-
|
-
|
7,500
|
|||||||||
Non-cash debt conversion expenses
|
-
|
-
|
842
|
|||||||||
Total
|
1,168
|
3,764
|
16,146
|
|||||||||
Less interest capitalized
|
(449
|
)
|
(671
|
)
|
(353
|
)
|
||||||
Total
|
719
|
3,093
|
15,793
|
16.
|
Income Taxes:
|
17.
|
Financial Instruments:
|
a)
|
Interest rate risk:
The Company is subject to market risks relating to changes in interest rates relating to debt outstanding under its bank loan facilities on which it pays interest based on LIBOR plus a margin. In order to manage part or whole of its exposure to changes in interest rates due to this floating rate indebtedness, the Company has entered into three interest rate swap agreements with ABN Amro Bank, another interest rate swap agreement with NORD/LB Bank and might enter into more interest rate swap agreements in the future.
|
b)
|
Credit risk:
Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist principally of cash. The Company places its temporary cash investments, consisting mostly of deposits, with high credit qualified financial institutions. The Company performs periodic evaluations of the relative credit standing of those financial institutions with which it places its temporary cash investments.
|
c)
|
Fair value:
|
Agreement Date
|
Counterparty
|
Effective (start) date:
|
Termination Date:
|
Notional amount
on effective date
|
Interest rate payable
|
||||||
June 3, 2016
|
ABN Amro Bank
|
April 13, 2018
|
Ju1y 13, 2021
|
$
|
16,575
|
1.4425
|
%
|
||||
December 19, 2016
|
ABN Amro Bank
|
December 21, 2016
|
January 13, 2022
|
$
|
20,700
|
2.0800
|
%
|
||||
December 19, 2016
|
ABN Amro Bank
|
December 21, 2016
|
August 10, 2022
|
$
|
19,450
|
2.1250
|
%
|
||||
March 29, 2017
|
NORD/LB Bank
|
May 17, 2017
|
May 17, 2023
|
$
|
21,139
|
2.1900
|
%
|
Warrants Outstanding
December 31, 2016
|
Warrant Shares Outstanding
December 31, 2016
|
Term
|
Warrant Exercise Price*
|
Fair Value – Liability
December 31, 2016
|
2,673,406
|
347,543
|
5 years
|
$19.70
|
3,222
|
Warrants Outstanding
December 31, 2017
|
Warrant Shares Outstanding
December 31, 2017
|
Term
|
Warrant Exercise Price
|
Fair Value – Liability
December 31, 2017
|
1,976,389
|
2,134,501
|
5 years
|
$2.30
|
3,332
|
Fair Value Measurement at Reporting Date
|
|||||||
As of December 31, 2016
|
Total
|
Using Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Other
Unobservable
Inputs
(Level 3)
|
|||
Non-current asset
|
300
|
-
|
300
|
-
|
|||
Non-current liability
|
3,563
|
-
|
341
|
3,222
|
|||
As of December 31, 2017
|
|||||||
Non-current asset
|
394
|
-
|
394
|
-
|
|||
Non-current liability
|
3,335
|
-
|
3
|
3,332
|
Closing balance – December 31, 2015
|
3,216
|
|||
Change in fair value of Warrants, included in the consolidated statements of comprehensive loss
|
641
|
|||
Adjustment for cashless exercise of Warrants, included in Additional paid-in capital line item of consolidated balance sheets
|
(635
|
)
|
||
Closing balance – December 31, 2016
|
3,222
|
|||
Change in fair value of Warrants, included in the consolidated statements of comprehensive loss
|
256
|
|||
Adjustment for cashless exercise of Warrants, included in Additional paid-in capital line item of consolidated balance sheets
|
(146
|
)
|
||
Closing balance – December 31, 2017
|
3,332
|
Amount of gain/(loss) recognized in Statement of comprehensive loss located in Loss on derivate financial instruments
|
||||||||||||
2015
|
2016
|
2017
|
||||||||||
Interest rate swaps- change in fair value
|
-
|
(41
|
)
|
431
|
||||||||
Interest rate swaps– realized gain/(loss)
|
225
|
(16
|
)
|
(476
|
)
|
|||||||
Warrants- change in fair value
|
(617
|
)
|
(641
|
)
|
(256
|
)
|
||||||
Total
|
(392
|
)
|
(698
|
)
|
(301
|
)
|
18.
|
Other operating (loss)/ income
|
19.
|
Mezzanine Equity
|
Series B convertible preferred stock
|
Total
|
|||
BALANCE, December 31, 2015
|
-
|
|||
Net Proceeds from Issuance of Series B convertible preferred stock
|
1,741
|
|||
Deemed dividend for beneficial conversion feature
|
1,403
|
|||
Beneficial conversion feature
|
(1,403
|
)
|
||
Balance December 31, 2016
|
1,741
|
|||
Conversions of Series B convertible preferred stock
|
(1,741
|
)
|
||
Balance December 31, 2017
|
-
|
20.
|
Investments in unconsolidated joint ventures
|
|
December 31, 2017
|
|||||||
City of Athens
|
Eco Nine
|
|||||||
Current assets
|
218
|
4
|
||||||
Non-current assets
|
12,664
|
7,840
|
||||||
Current liabilities
|
68
|
-
|
||||||
Long-term liabilities
|
-
|
-
|
||||||
Net operating revenues
|
-
|
-
|
||||||
Net loss
|
(20
|
)
|
(35
|
)
|
21.
|
Subsequent Events
|
a.
|
100% of the issued and outstanding shares of PCH Dreaming Inc., a Marshall Islands company that has entered into a new building contract for a high specification 50,000 dwt Medium Range ("MR") product/chemical tanker under construction at Hyundai Mipo Dockyard Co., Ltd. in South Korea and scheduled for delivery during March 2019. The Company has acquired the shares from Ships International Inc., an entity affiliated with the Company's Chief Executive Officer, for an aggregate purchase price of $3,950. Following its delivery, the vessel will enter into a time charter with an entity affiliated with the seller for a firm duration of one year at a gross daily rate of $16,000, with a charterer's option to extend for two additional years at $17,000 and $18,000, respectively. The acquisition of PCH Dreaming Inc. created contractual commitments to the Company amounting to $35,800, as no amounts had been previously paid to the shipyard by the seller.
|
b.
|
100% of the issued and outstanding shares of South California Inc., a Marshall Islands company that has entered into a new building contract for a high specification, scrubber-equipped, 157,000 dwt Suezmax Crude Oil Carrier under construction at Hyundai Samho Heavy Industries Co. Ltd. in South Korea and scheduled for delivery during April 2019. The Company has acquired the shares from the seller for an aggregate purchase price of $8,950. Following its delivery, the vessel will enter into a time charter with an entity affiliated with the Seller for a firm duration of one year at a gross daily rate of $25,000, with a charterer's option to extend for two additional years at $26,000 and $27,000, respectively. The acquisition of South California Inc. created contractual commitments to the Company amounting to $57,843, as no amounts had been previously paid to the shipyard by the seller.
|
c.
|
100% of the issued outstanding shares of Malibu Warrior Inc., a Marshall Islands company that has entered into a new building contract for a high specification, scrubber-equipped, 157,000 dwt Suezmax Crude Oil Carrier under construction at Hyundai Samho Heavy Industries Co. Ltd. in South Korea and scheduled for delivery during May 2019. The Company has acquired the shares from the seller for an aggregate purchase price of $8,950. Following its delivery, the vessel will enter into a time charter with an entity affiliated with the Seller for a firm duration of one year at a gross daily rate of $25,000, with a charterer's option to extend for two additional years at $26,000 and $27,000, respectively. The acquisition of Malibu Warrior Inc. created contractual commitments to the Company amounting to $57,842, as no amounts had been previously paid to the shipyard by the seller.
|
d.
|
10% of the issued and outstanding shares of Eco Seven Inc., a Marshall Islands company that owns M/T Stena Elegance, a high specification 50,000 dwt MR product/chemical tanker delivered in February 2017 at Hyundai Vinashin. The Company has acquired the shares from an entity affiliated with the Company's Chief Executive Officer for an aggregate purchase price of $1,600. As a result of the transaction the Company will own 100% of the issued and outstanding shares of Eco Seven Inc.
|
1. |
The name of the corporation is:
|
2. |
The Amended and Restated Articles of Incorporation was filed with the Registrar of Corporations as of the
|
3. |
The error to be corrected is as follows:
|
4. |
It is hereby corrected as follows:
|
5 . |
The effective date of this instrument shall be as of the date of filing of the instrument corrected hereby.
|
/s/ Deputy Registrar | ||
Deputy Registrar of Non-Resident Corporations
|
1. |
The name of the Corporation is: TOP Ships Inc.
|
2. |
The Articles of Incorporation were filed with the Registrar of Corporations on the 10th day of January, 2000 under the name "OCEAN HOLDINGS INC."
|
3. |
Articles of Amendment were filed with the Registrar of Corporations on the 30th day of April, 2004, changing the name of the Corporation to "TRANS OCEAN PETROLEUM TANKERS INC."
|
4. |
Articles of Amendment were filed with the Registrar of Corporations on the 10th day of May, 2004, changing the name of the Corporation to "TOP TANKERS INC."
|
5. |
Articles of Amendment were filed with the Registrar of Corporations on the 27th day of May, 2004.
|
6. |
Restated and Amended Articles of Incorporation were filed with the Registrar of Corporations on the 21st day of July, 2004.
|
7. |
Articles of Amendment were filed with the Registrar of Corporations on the 22nd day of July, 2005.
|
8. |
Articles of Amendment were filed with the Registrar of Corporations on the 17th day of December, 2007 changing the name of the Corporation to "TOP SHIPS INC."
|
9. |
Articles of Amendment were filed with the Registrar of Corporations on the 20th day of March, 2008.
|
10. |
The Second Restated and Amended Articles of Incorporation were filed with the Registrar of Corporations on the 17th day of September, 2009.
|
11. |
The Third Amended and Restated Articles of Incorporation were filed with the Registrar of Corporations on the 23rd day of June, 2011.
|
12. |
Articles of Amendment were filed with the Registrar of Corporations on the 17th day of April 2014.
|
13. |
Articles of Amendment were filed with the Registrar of Corporations on the 15th day of February 2016.
|
14. |
A Certificate of Correction was filed with the Registrar of Corporations on the 14th day of February, 2017.
|
15. |
Section D of the Third Amended and Restated Articles of Incorporation is hereby amended by adding the following paragraph:
|
16. |
All of the other provisions of the Third Amended and Restated Articles of Incorporation shall remain unchanged.
|
17. |
This amendment to the Third Amended and Restated Articles of Incorporation was authorized by vote of the holders of a majority of all outstanding shares
of the Corporation with a right to vote
thereon at the meeting of shareholders of the Corporation held on March 24, 2017.
|
/s/ Evangelos Pistiolis
|
||
Name: Evangelos Pistiolis
|
||
Title: Chief Executive Officer
|
||
1. |
The name of the Corporation is: TOP Ships Inc.
|
2. |
The Articles of Incorporation were filed with the Registrar of Corporations on the 10th day of January, 2000 under the name "OCEAN HOLDINGS INC."
|
3. |
Articles of Amendment were filed with the Registrar of Corporations on the 30th day of April, 2004, changing the name of the Corporation to "TRANS OCEAN PETROLEUM TANKERS INC."
|
4. |
Articles of Amendment were filed with the Registrar of Corporations on the 10th day of May, 2004, changing the name of the Corporation to "TOP TANKERS INC."
|
5. |
Articles of Amendment were filed with the Registrar of Corporations on the 27th day of May, 2004.
|
6. |
Restated and Amended Articles of Incorporation were filed with the Registrar of Corporations on the 21st day of July, 2004.
|
7. |
Articles of Amendment were filed with the Registrar of Corporations on the 22nd day of July, 2005.
|
8. |
Articles of Amendment were filed with the Registrar of Corporations on the 17th day of December, 2007 changing the name of the Corporation to "TOP SHIPS INC."
|
9. |
Articles of Amendment were filed with the Registrar of Corporations on the 20th day of March, 2008.
|
10. |
The Second Restated and Amended Articles of Incorporation were filed with the Registrar of Corporations on the 17th day of September, 2009.
|
11. |
The Third Amended and Restated Articles of Incorporation were filed with the Registrar of Corporations on the 23rd day of June, 2011.
|
12. |
Articles of Amendment were filed with the Registrar of Corporations on the 17th day of April, 2014.
|
13. |
Articles of Amendment were filed with the Registrar of Corporations on the 15th day of February, 2016.
|
14. |
A Certificate of Correction was filed with the Registrar of Corporations on the 14th day of February, 2017.
|
15. |
Articles of Amendment were filed with the Registrar of Corporations on the 10th day of May, 2017.
|
16. |
Section D of the Third Amended and Restated Articles of Incorporation is hereby amended by adding the following paragraph:
|
17. |
All of the other provisions of the Third Amended and Restated Articles of Incorporation shall remain unchanged.
|
18. |
This amendment to the Third Amended and Restated Articles of Incorporation was authorized by vote of the holders of a majority of all outstanding shares
of the Corporation with a right to vote
thereon at the meeting of shareholders of the Corporation held on June 9, 2017.
|
/s/ Evangelos Pistiolis
|
||
Name: Evangelos Pistiolis
|
||
Title: Chief Executive Officer
|
||
1. |
The name of the Corporation is: TOP Ships Inc.
|
2. |
The Articles of Incorporation were filed with the Registrar of Corporations on the 10th day of January, 2000 under the name "OCEAN HOLDINGS INC."
|
3. |
Articles of Amendment were filed with the Registrar of Corporations on the 30th day of April, 2004, changing the name of the Corporation to "TRANS OCEAN PETROLEUM TANKERS INC."
|
4. |
Articles of Amendment were filed with the Registrar of Corporations on the 10th day of May, 2004, changing the name of the Corporation to "TOP TANKERS INC."
|
5. |
Articles of Amendment were filed with the Registrar of Corporations on the 27th day of May, 2004.
|
6. |
Restated and Amended Articles of Incorporation were filed with the Registrar of Corporations on the 21st day of July, 2004.
|
7. |
Articles of Amendment were filed with the Registrar of Corporations on the 22nd day of July, 2005.
|
8. |
Articles of Amendment were filed with the Registrar of Corporations on the 17th day of December, 2007 changing the name of the Corporation to "TOP SHIPS INC."
|
9. |
Articles of Amendment were filed with the Registrar of Corporations on the 20th day of March, 2008.
|
10. |
The Second Restated and Amended Articles of Incorporation were filed with the Registrar of Corporations on the 17th day of September, 2009.
|
11. |
The Third Amended and Restated Articles of Incorporation were filed with the Registrar of Corporations on the 23rd day of June, 2011.
|
12. |
Articles of Amendment were filed with the Registrar of Corporations on the 17th day of April, 2014.
|
13. |
Articles of Amendment were filed with the Registrar of Corporations on the 15th day of February, 2016.
|
14. |
A Certificate of Correction was filed with the Registrar of Corporations on the 14th day of February, 2017.
|
15. |
Articles of Amendment were filed with the Registrar of Corporations on the 10th day of May, 2017.
|
16. |
Articles of Amendment were filed with the Registrar of Corporations on the 22nd day of June, 2017.
|
16. |
Section D of the Third Amended and Restated Articles of Incorporation is hereby amended by adding the following paragraph:
|
17. |
All of the other provisions of the Third Amended and Restated Articles of Incorporation shall remain unchanged.
|
18. |
This amendment to the Third Amended and Restated Articles of Incorporation was authorized by vote of the holders of a majority of all outstanding shares
of the Corporation with a right to vote
thereon at the meeting of shareholders of the Corporation held on June 9, 2017.
|
/s/ Evangelos Pistiolis
|
||
Name: Evangelos Pistiolis
|
||
Title: Chief Executive Officer
|
||
1. |
The name of the Corporation is: TOP Ships Inc.
|
2. |
The Articles of Incorporation were filed with the Registrar of Corporations on the 10th day of January, 2000 under the name "OCEAN HOLDINGS INC."
|
3. |
Articles of Amendment were filed with the Registrar of Corporations on the 30th day of April, 2004, changing the name of the Corporation to "TRANS OCEAN PETROLEUM TANKERS INC."
|
4. |
Articles of Amendment were filed with the Registrar of Corporations on the 10th day of May, 2004, changing the name of the Corporation to "TOP TANKERS INC."
|
5. |
Articles of Amendment were filed with the Registrar of Corporations on the 27th day of May, 2004.
|
6. |
Restated and Amended Articles of Incorporation were filed with the Registrar of Corporations on the 21st day of July, 2004.
|
7. |
Articles of Amendment were filed with the Registrar of Corporations on the 22nd day of July, 2005.
|
8. |
Articles of Amendment were filed with the Registrar of Corporations on the 17th day of December, 2007 changing the name of the Corporation to "TOP SHIPS INC."
|
9. |
Articles of Amendment were filed with the Registrar of Corporations on the 20th day of March, 2008.
|
10. |
The Second Restated and Amended Articles of Incorporation were filed with the Registrar of Corporations on the 17th day of September, 2009.
|
11. |
The Third Amended and Restated Articles of Incorporation were filed with the Registrar of Corporations on the 23rd day of June, 2011.
|
12. |
Articles of Amendment were filed with the Registrar of Corporations on the 17th day of April, 2014.
|
13. |
Articles of Amendment were filed with the Registrar of Corporations on the 16th day of February, 2016.
|
14. |
A Certificate of Correction was filed with the Registrar of Corporations on the 14th day of February, 2017.
|
15. |
Articles of Amendment were filed with the Registrar of Corporations on the 10th day of May, 2017.
|
16. |
Articles of Amendment were filed with the Registrar of Corporations on the 22nd day of June, 2017.
|
17. |
Articles of Amendment were filed with the Registrar of Corporations on the 2nd day of August, 2017.
|
18. |
Section D of the Third Amended and Restated Articles of Incorporation is hereby amended by adding the following paragraph:
|
19. |
All of the other provisions of the Third Amended and Restated Articles of Incorporation shall remain unchanged.
|
20. |
This amendment to the Third Amended and Restated Articles of Incorporation was authorized by vote of the holders of a majority of all outstanding shares
of the Corporation with a right to vote
thereon at the meeting of shareholders of the Corporation held on June 9, 2017.
|
/s/ Evangelos Pistiolis
|
||
Name: Evangelos Pistiolis
|
||
Title: Chief Executive Officer
|
||
1. |
The name of the Corporation is: TOP Ships Inc.
|
2. |
The Articles of Incorporation were filed with the Registrar of Corporations on the 10th day of January, 2000 under the name "OCEAN HOLDINGS INC."
|
3. |
Articles of Amendment were filed with the Registrar of Corporations on the 30th day of April, 2004, changing the name of the Corporation to "TRANS OCEAN PETROLEUM TANKERS INC."
|
4. |
Articles of Amendment were filed with the Registrar of Corporations on the 10th day of May, 2004, changing the name of the Corporation to "TOP TANKERS INC."
|
5. |
Articles of Amendment were filed with the Registrar of Corporations on the 27th day of May, 2004.
|
6. |
Restated and Amended Articles of Incorporation were filed with the Registrar of Corporations on the 21st day of July, 2004.
|
7. |
Articles of Amendment were filed with the Registrar of Corporations on the 22nd day of July, 2005.
|
8. |
Articles of Amendment were filed with the Registrar of Corporations on the 17th day of December, 2007 changing the name of the Corporation to "TOP SHIPS INC."
|
9. |
Articles of Amendment were filed with the Registrar of Corporations on the 20th day of March, 2008.
|
10. |
The Second Restated and Amended Articles of Incorporation were filed with the Registrar of Corporations on the 17th day of September, 2009.
|
11. |
The Third Amended and Restated Articles of Incorporation were filed with the Registrar of Corporations on the 23rd day of June, 2011.
|
12. |
Articles of Amendment were filed with the Registrar of Corporations on the 17th day of April, 2014.
|
13. |
Articles of Amendment were filed with the Registrar of Corporations on the 16th day of February, 2016.
|
14. |
A Certificate of Correction was filed with the Registrar of Corporations on the 14th day of February, 2017.
|
15. |
Articles of Amendment were filed with the Registrar of Corporations on the 10th day of May, 2017.
|
16. |
Articles of Amendment were filed with the Registrar of Corporations on the 22nd day of June, 2017.
|
17. |
Articles of Amendment were filed with the Registrar of Corporations on the 2nd day of August, 2017.
|
18. |
Articles of Amendment were filed with the Registrar of Corporations on the 5th day of October, 2017.
|
19. |
Section D of the Third Amended and Restated Articles of Incorporation is hereby amended by adding the following paragraph:
|
20. |
All of the other provisions of the Third Amended and Restated Articles of Incorporation shall remain unchanged.
|
21. |
This amendment to the Third Amended and Restated Articles of Incorporation was authorized by vote of the holders of a majority of all outstanding shares
of the Corporation with a right to vote
thereon at the special meeting of shareholders of the Corporation held on November 3, 2017.
|
/s/ Evangelos Pistiolis
|
|||
Name: Evangelos Pistiolis
|
|||
Title: Chief Executive Officer
|
|||
1. |
Subject to the terms and conditions of this Agreement, the Company agrees to accept your recommendation and employ the Nominee through you, and you agree to make him available for employment by the Company, effective September 1, 2010.
|
2. |
Subject to the terms and conditions of this Agreement, the Nominee's employment with the Company shall be for the period from September 1, 2010 through August 31, 2011, ("the Term") provided, however, that the Term shall be automatically extended for successive one (1) year terms unless either party viz. your company or us, shall have give notice of non-renewal at least sixty (60) days prior to the expiration of the then applicable Term. There is no guarantee of employment beyond the Term. The terms and conditions of this Agreement shall remain in force during the Nominee's employment.
|
3. |
The Nominee's title shall be Chief Technical Officer. In that capacity, he shall report directly to the Chief Executive Officer and the Board of Directors of the Company. He shall have such specific duties, responsibilities and authority as may be assigned to him by the Board of Directors of the Company, and in the absence of such assignment, such duties, responsibilities and authority as are customary to those positions.
|
4. |
During his employment, the Nominee shall devote his full business time, attention, energy and best efforts to the business and affairs of the Company. The Nominee agrees that he shall not engage in or be interested in any capacity in any activity, unless such activity is fully disclosed and approved in writing prior to the undertaking by the Board of Directors of the Company.
|
5. |
(a) In consideration of the services of the Nominee, you shall be paid an annualized base salary of € 306,000, net of any tax and insurance deductions, payable in accordance with the Company's normal payroll practices. In addition, you shall be paid all social security obligations in relation to the Nominee's employment.
|
6. |
(a) The Company may immediately terminate the employment of the Nominee for "Cause" (as such term is defined herein). In such event, or if the Nominee resigns (except as set forth in Paragraph 7(a) herein) or retire as an employee of TOP Ships, the obligations of the Company shall cease immediately and you shall not be entitled to any further payments of any kind, unless, by mutual agreement, you provide TOP Ships with another employee to fill the vacated positions, acceptable to the Company. For purposes of this Agreement, "Cause" shall include:
|
(i) |
willful or deliberate failure of the Nominee to perform his duties; material breach of the terms of this Agreement by you or by the Nominee;
|
(ii) |
material breach of the terms of this Agreement by you or by the Nominee;
|
(iii) |
dishonesty, willful misconduct or fraud in connection with the hiring of the Nominee by the Company, the performance of his duties, or in any way related to the business of TOP Ships;
|
(iv) |
conviction of the Nominee or a plea of nolo contendere (or the equivalent) to a felony or any crime involving moral turpitude;
|
(v) |
the Nominee engaging in conduct materially injurious to the business, reputation or goodwill of TOP Ships; or
|
(vi) |
Violation of applicable policies, practices and standards of behavior of TOP Ships by the Nominee.
|
7. |
In the event of a "Change in Control" (as such term is defined herein), during the Term of this Agreement, you and the Company have the option to terminate this Agreement within six (6) months following such Change in Control, and you shall be eligible to receive the payment specified in paragraph 7 (b), below, provided that the conditions of said paragraph are satisfied.
|
(i) |
acquisition by any individual, entity or group of beneficial ownership of thirty percent (30%) or more either (A) the then-outstanding shares of common stock of TOP Ships or (B) the combined voting power of the then-outstanding voting securities of TOP Ships entitled to vote generally in the election of directors;
|
(ii) |
consummation of a reorganization, merger or consolidation of TOP Ships or the sale or other disposition of all or substantially all of the assets of TOP Ships; or
|
(iii) |
approval by the shareholders of TOP Ships of a complete liquidation or dissolution of TOP Ships.
|
8. |
You represent and warrant as follows:
|
9. |
During the course of our agreement and the employment of the Nominee, you and he will have access to information that is confidential and proprietary to TOP Ships, each of its clients and prospective clients. Except in the performance of your or his obligations under this Agreement or with the prior written consent of TOP Ships, you agree that neither you nor he will at any time, during or after his employment, disclose to any person or use for your benefit or the benefit of others, any such information obtained by you or him.
|
10. |
You and the Nominee agree to deliver promptly on termination of his employment, or at any other time on request by TOP Ships, all property and equipment of TOP Ships of any kind in your or his possession or control.
|
11. |
As part of the consideration for the compensation and benefits paid to you under this Agreement, and to protect the confidential and proprietary information that will be disclosed and entrusted to you or to your employee, the business good will of TOP Ships that exists and will be developed, and the business opportunities that will be disclosed or entrusted to you or to the Nominee by TOP
|
12. |
You acknowledge and agree that the services of the Nominee are of a unique nature with broad access to plans, strategies and methods of operations, and that as such, it is fair and reasonable in order to protect the business, operations, assets and reputation of TOP Ships that you and he make the covenants and undertakings set forth in paragraph 9, 10 and 11. Furthermore, you and
|
13. |
This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of laws. If any dispute should arise concerning this Agreement, the interpretation of the terms of the Agreement or otherwise relating in any way to the terms and conditions of your employment or its termination, including any claim of statutory discrimination, the parties agree to submit the dispute to arbitration before a panel of three (3) neutral arbitrators. For injunctive relief, it is agreed that any court of competent jurisdiction also may entertain an application by either party. The parties further agree that no demand for punitive damages shall be made in any such arbitration proceeding and that the arbitrators shall not have the power to award punitive damages in any such proceedings. Any award of the arbitrators shall be final and binding, subject only to such right of review as may be provided under applicable law.
|
14. |
No failure by either party at any time to give notice of any breach by the other party, or to require compliance with any condition or provision of this Agreement shall be deemed a waiver of a similar or dissimilar provision or condition at the time or at any prior or subsequent time.
|
15. |
In the event that any provision or term of this Agreement is held to be invalid, prohibited or unenforceable for any reason, such provision or term shall be deemed severed from this Agreement without invalidating the remaining provisions, which shall remain in full force and effect.
|
16. |
You and the Nominee agree to keep this Agreement confidential and not to disclose its terms to any third parties unless required to do so by law or regulation, without the prior written consent of TOP Ships. You may, however, disclose the details of the employment and compensation arrangements to your shareholders and in the case of the Nominee to his immediate family, and to
|
By:
|
/s/Georgios Pagkalos
|
|
Name:
|
Georgios Pagkalos
|
|
Title:
|
President/Director
|
1. |
Subject to the terms and conditions of this Agreement, the Company agrees to accept your recommendation and employ the Nominee through you, and you agree to make him available for employment by the Company, effective September 1, 2010.
|
2. |
Subject to the terms and conditions of this Agreement, the Nominee's employment with the Company shall be for the period from September 1, 2010 through August 31, 2011, ("the Term") provided, however, that the Term shall be automatically extended for successive one (1) year terms unless either party viz. your company or us, shall have give notice of non-renewal at least sixty (60) days prior to the expiration of the then applicable Term. There is no guarantee of employment beyond the Term. The terms and conditions of this Agreement shall remain in force during the Nominee's employment.
|
3. |
The Nominee's titles shall be Executive Vice-President and Chairman. In that capacity, he shall report directly to the Chief Executive Officer and the Board of Directors of the Company. He shall have such specific duties, responsibilities and authority as may be assigned to him by the Board of Directors of the Company, and in the absence of such assignment, such duties, responsibilities and authority as are customary to those positions.
|
4. |
During his employment, the Nominee shall devote his full business time, attention, energy and best efforts to the business and affairs of the Company. The Nominee agrees that he shall not engage in or be interested in any capacity in any activity, unless such activity is fully disclosed and approved in writing prior to the undertaking by the Board of Directors of the Company.
|
5. |
(a) In consideration of the services of the Nominee, you shall be paid an annualized base salary of € 190,000, net of any tax and insurance deductions, payable in accordance with the Company's normal payroll practices.
|
6. |
(a) The Company may immediately terminate the employment of the Nominee for "Cause" (as such term is defined herein). In such event, or if the Nominee resigns (except as set forth in Paragraph 7(a) herein) or retire as an employee of TOP Ships, the obligations of the Company shall cease immediately and you shall not be entitled to any further payments of any kind, unless, by mutual agreement, you provide TOP Ships with another employee to fill the vacated positions, acceptable to the Company. For purposes of this Agreement, "Cause" shall include:
|
(i) |
willful or deliberate failure of the Nominee to perform his duties;
|
(ii) |
material breach of the terms of this Agreement by you or by the Nominee;
|
(ii) |
dishonesty, willful misconduct or fraud in connection with the hiring of the Nominee by the Company, the performance of his duties, or in any way related to the business of TOP Ships;
|
(iv) |
conviction of the Nominee or a plea of nolo contendere (or the equivalent) to a felony or any crime involving moral turpitude;
|
(v) |
the Nominee engaging in conduct materially injurious to the business, reputation or goodwill of TOP Ships; or
|
(vi) |
Violation of applicable policies, practices and standards of behavior of TOP Ships by the Nominee.
|
7. |
In the event of a "Change in Control" (as such term is defined herein), during the Term of this Agreement, you and the Company have the option to terminate this Agreement within six (6)
|
(i) |
acquisition by any individual, entity or group of beneficial ownership of thirty percent (30%) or more either (A) the then-outstanding shares of common stock of TOP Ships or (B) the combined voting power of the then-outstanding voting securities of TOP Ships entitled to vote generally in the election of directors;
|
(ii) |
consummation of a reorganization, merger or consolidation of TOP Ships or the sale or other disposition of all or substantially all of the assets of TOP Ships; or
|
(iii) |
approval by the shareholders of TOP Ships of a complete liquidation or dissolution of TOP Ships.
|
8. |
You represent and warrant as follows:
|
9. |
During the course of our agreement and the employment of the Nominee, you and he will have access to information that is confidential and proprietary to TOP Ships, each of its clients and prospective clients. Except in the performance of your or his obligations under this Agreement or with the prior written consent of TOP Ships, you agree that neither you nor he will at any time, during or after his employment, disclose to any person or use for your benefit or the benefit of others, any such information obtained by you or him.
|
10. |
You and the Nominee agree to deliver promptly on termination of his employment, or at any other time on request by TOP Ships, all property and equipment of TOP Ships of any kind in your or his possession or control.
|
11. |
As part of the consideration for the compensation and benefits paid to you under this Agreement, and to protect the confidential and proprietary information that will be disclosed and entrusted to you or to your employee, the business good will of TOP Ships that exists and will be developed, and the business opportunities that will be disclosed or entrusted to you or to the Nominee by TOP Ships; and as an additional incentive for TOP Ships to enter into this Agreement, the parties agree as follows:
|
12. |
You acknowledge and agree that the services of the Nominee are of a unique nature with broad access to plans, strategies and methods of operations, and that as such, it is fair and reasonable in order to protect the business, operations, assets and reputation of TOP Ships that you and he make the covenants and undertakings set forth in paragraph 9, 10 and 11. Furthermore, you and he agree that if you or he breach or attempt to breach or violate any of the foregoing provisions, TOP Ships will be irreparably harmed and monetary damages will not provide an adequate remedy. Accordingly, it is agreed that TOP Ships may apply for and shall be entitled to temporary, preliminary and permanent injunctive relief (without the necessity of posting a bond or other security) in order to prevent breach of this Agreement or to specifically enforce the provisions hereof, and you and the Nominee hereby consent to the granting of such relief, without having to prove the inadequacy of the available remedies at law or actual damages. It is understood that any such injunctive remedy shall not be exclusive or waive any rights to seek other remedies at law or in equity. The parties further agree that the covenants and undertakings covered by this Agreement are reasonable in light of the facts as they exist on the date of this Agreement. However, if at any time, a court or panel of arbitrators having jurisdiction over this Agreement shall determine that any of the subject matter or duration is unreasonable in any respect, it shall be reduced, and not terminated, as such court or panel of arbitrators determines may be reasonable.
|
13. |
This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of laws. If any dispute should arise concerning this Agreement, the interpretation of the terms of the Agreement or otherwise relating in any way to the terms and conditions of your employment or its termination, including any claim of statutory discrimination, the parties agree to submit the dispute to arbitration before a panel of three (3)
|
14. |
No failure by either party at any time to give notice of any breach by the other party, or to require compliance with any condition or provision of this Agreement shall be deemed a waiver of a similar or dissimilar provision or condition at the time or at any prior or subsequent time.
|
15. |
In the event that any provision or term of this Agreement is held to be invalid, prohibited or unenforceable for any reason, such provision or term shall be deemed severed from this Agreement without invalidating the remaining provisions, which shall remain in full force and effect.
|
16. |
You and the Nominee agree to keep this Agreement confidential and not to disclose its terms to any third parties unless required to do so by law or regulation, without the prior written consent of TOP Ships. You may, however, disclose the details of the employment and compensation arrangements to your shareholders and in the case of the Nominee to his immediate family, and to your tax, accounting and legal advisors, provided that you receive their assurance in advance that they will not disclose those matters to any third party. Nothing in this Agreement, however, shall preclude you from disclosing to potential subsequent employers the existence of this Agreement and the restrictions set forth in paragraph 11.
|
17. |
This Agreement and all rights and obligations hereunder shall be binding upon and shall inure to the benefit of your heirs, executors, representatives and administrators and any successors in interest which may acquire or succeed to all or substantially all of the business and assets of TOP Ships by any means or its assigns. In that regard, you understand that this Agreement may subsequently be assigned by TOP Ships. Because of the personal nature of the services to be rendered by you, you may not assign your rights or obligations under this Agreement without the prior written consent of TOP Ships.
|
18. |
This Agreement contains the entire understanding between the parties on the subjects covered here and supersedes all prior agreements, arrangements and understandings, whether written or oral. You represent that you have not relied on any statements, oral or written, not contained in this Agreement. This Agreement may not be changed orally, but only in writing signed by both parties.
|
19. |
This Agreement may be signed in separate counterparts, both of which together shall constitute an original instrument. The parties agree to accept a signed facsimile counterpart of this Agreement as a fully binding original.
|
By:
|
/s/Alexandros Tsirikos
|
|
Name:
|
Alexandros Tsirikos
|
|
Title:
|
Chief Financial Officer
|
By:
|
/s/Georgios Pagkalos
|
|
Name:
|
Georgios Pagkalos
|
|
Title:
|
President/Director
|
1. |
Subject to terms and conditions of this Agreement, the Company agrees to accept Central Mare's recommendation and employ the Nominee through Central Mare, and Central Mae agrees to make the Nominee available for employment by the Company under the terms and conditions of this Agreement, effective September 1, 2010.
|
2. |
Subject to the terms and conditions of this Agreement, the Nominee's employment with the Company shall be for the period from September 1, 2010 through August 31, 2014, ("the Term") provided, however, that the Term shall be automatically extended for successive one (1) year terms unless Central Mare or the company provides notice of non-renewal at least sixty (60) days prior to the expiration of the then applicable Term. There is no guarantee of employment beyond the Term. The terms and conditions of this Agreement shall remain in force during the Nominee's employment.
|
3. |
The Nominee's titles shall be President and Chief Executive Officer. In that capacity, he shall report directly to the Chief Executive Officer and the Board of Directors of the Company. He shall have such specific duties, responsibilities and authority as may be assigned to him by the Board of Directors of the Company, and in the absence of such assignment, such duties, responsibilities and authority as are customary to those positions.
|
4. |
During his employment, the Nominee shall devote his full business time, attention, energy and best efforts to the business and affairs of the Company. The Nominee agrees that he shall not engage in or be interested in any capacity in any activity, unless such activity is fully disclosed and approved in writing prior to the undertaking by the Board of Directors of the Company.
|
5. |
(a) In consideration of the services of the Nominee, Central Mare shall be paid a base salary at the rate of € 1,750,000, annualized, net of any tax and insurance deductions, payable in accordance with the Company's normal payroll practices.
|
6. |
(a) The Company may immediately terminate the employment of the Nominee for "Cause" (as defined herein). In such event, the obligations of the Company shall cease immediately and neither Central Mare nor the Nominee shall be entitled to any further payments of any kind under this Agreement. For purposes of this Agreement, "Cause" shall include:
|
(i) |
willful or deliberate failure of the Nominee to perform his duties;
|
(ii) |
material breach of the terms of this Agreement by Central Mare or by the Nominee;
|
(ii) |
dishonesty, willful misconduct or fraud in connection with the hiring of the Nominee by the Company, the performance of his duties, or in any way related to the business of TOP Ships;
|
(iv) |
conviction of the Nominee or a plea of nolo contendere (or the equivalent) to a felony or any crime involving moral turpitude;
|
(v) |
the Nominee engaging in conduct materially injurious to the business, reputation or goodwill of TOP Ships; or
|
(vi) |
Violation of applicable policies, practices and standards of behavior of TOP Ships by the Nominee.
|
7. |
In the event of a "Change in Control" (as defined herein), during the Term of this Agreement, Central Mare and the Company have the option to terminate this Agreement within six (6) months
|
(i) |
acquisition by any individual, entity or group of beneficial ownership of thirty percent (30%) or more either (A) the then-outstanding shares of common stock of TOP Ships or (B) the combined voting power of the then-outstanding voting securities of TOP Ships entitled to vote generally in the election of directors;
|
(ii) |
consummation of a reorganization, merger or consolidation of TOP Ships or the sale or other disposition of all or substantially all of the assets of TOP Ships; or
|
(iii) |
approval by the shareholders of TOP Ships of a complete liquidation or dissolution of TOP Ships.
|
8. |
Central Mare represents and warrants as follows:
|
9. |
During the course of our agreement and the employment of the Nominee, Central Mare and the Nominee will have access to information that is confidential and proprietary to TOP Ships, each of its clients and prospective clients. Except in the performance of Central Mare or the Nominee obligations under this Agreement or with the prior written consent of TOP Ships, Central Mare agrees that neither Central Mare nor the Nominee will at any time, during or after the Nominee's employment, disclose to any person or use for Central Mare 's benefit or the benefit of others, any such information obtained by Central Mare or the Nominee.
|
10. |
Central Mare and the Nominee agree to deliver promptly on termination of his employment, or at any other time on request by TOP Ships, all property and equipment of TOP Ships of any kind in Central Mare or the Nominee possession or control.
|
11. |
As part of the consideration for the compensation and benefits paid to Central Mare under this Agreement, and to protect the confidential and proprietary information that will be disclosed and entrusted to Central Mare or to Central Mare 's employee, the business good will of TOP Ships that exists and will be developed, and the business opportunities that will be disclosed or entrusted to Central Mare or to the Nominee by TOP Ships; and as an additional incentive for TOP Ships to enter into this Agreement, the parties agree as follows:
|
12. |
Central Mare acknowledges and agrees that the services of the Nominee are of a unique nature with broad access to plans, strategies and methods of operations, and that as such, it is fair and reasonable in order to protect the business, operations, assets and reputation of TOP Ships that Central Mare and the Nominee make the covenants and undertakings set forth in paragraph 9, 10 and 11. Furthermore, Central Mare and the Nominee agree that if Central Mare or the Nominee breach or attempt to breach or violate any of the foregoing provisions, TOP Ships will be irreparably harmed and monetary damages will not provide an adequate remedy. Accordingly, it is agreed that TOP Ships may apply for and shall be entitled to temporary, preliminary and permanent injunctive relief (without the necessity of posting a bond or other security) in order to prevent breach of this Agreement or to specifically enforce the provisions hereof, and Central Mare and the Nominee hereby consent to the granting of such relief, without having to prove the inadequacy of the available remedies at law or actual damages. It is understood that any such injunctive remedy shall not be exclusive or waive any rights to seek other remedies at law or in equity. The parties further agree that the covenants and undertakings covered by this Agreement are reasonable in light of the facts as they exist on the date of this Agreement. However, if at any time, a court or panel of arbitrators having jurisdiction over this Agreement shall determine that any of the subject matter or duration is unreasonable in any respect, it shall be reduced, and not terminated, as such court or panel of arbitrators determines may be reasonable.
|
13. |
This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of laws. If any dispute should arise concerning this Agreement, the interpretation of the terms of the Agreement or otherwise relating in any way to the terms and conditions of the Nominee's employment or its termination, including any claim of statutory discrimination, the parties agree to submit the dispute to arbitration at JAMS Endispute in New York before a panel of three (3) neutral arbitrators to be mutually agreed upon pursuant to JAMS Endispute for the appointment of an arbitrator pursuant to its rules. The expenses of such arbitration shall be borne equally by each of the parties. For injunctive relief, it is agreed that any court of competent jurisdiction also may entertain an application by either party. The parties further agree that no demand for punitive damages shall be made in any such arbitration proceeding and that the arbitrators shall not have the power to award punitive damages in any such proceedings. Any award of the arbitrators shall be final and binding, subject only to such right of review as may be provided under applicable law.
|
14. |
No failure by either party at any time to give notice of any breach by the other party, or to require compliance with any condition or provision of this Agreement shall be deemed a waiver of a similar or dissimilar provision or condition at the time or at any prior or subsequent time.
|
15. |
In the event that any provision or term of this Agreement is held to be invalid, prohibited or unenforceable for any reason, such provision or term shall be deemed severed from this Agreement without invalidating the remaining provisions, which shall remain in full force and effect.
|
16. |
Central Mare and the Nominee agree to keep this Agreement confidential and not to disclose its terms to any third parties unless required to do so by law or regulation, without the prior written consent of TOP Ships. Central Mare may, however, disclose the details of the employment and compensation arrangements to Central Mare's shareholders and in the case of the Nominee to his immediate family, and to Central Mare 's tax, accounting and legal advisors, provided that Central Mare receives their assurance in advance that they will not disclose those matters to any third party. Nothing in this Agreement, however, shall preclude you from disclosing to potential subsequent employers the existence of this Agreement and the restrictions set forth in paragraph 11.
|
17. |
This Agreement and all rights and obligations hereunder shall be binding upon and shall inure to the benefit of Central Mare's heirs, executors, representatives and administrators and any successors in interest which may acquire or succeed to all or substantially all of the business and assets of TOP Ships by any means or its assigns. In that regard, Central Mare understands that this Agreement may subsequently he assigned by TOP Ships. Because of the personal nature of
|
18. |
This Agreement contains the entire understanding between the parties on the subjects covered here and supersedes all prior agreements, arrangements and understandings, whether written or oral. Central Mare represents that you have not relied on any statements, oral or written, not contained in this Agreement. This Agreement may not be changed orally, but only in writing signed by both parties.
|
19. |
This Agreement may be signed in separate counterparts, both of which together shall constitute an original instrument. The parties agree to accept a signed facsimile counterpart of this Agreement as a fully binding original.
|
By:
|
/s/Alexandros Tsirikos
|
|
Name:
|
Alexandros Tsirikos
|
|
Title:
|
Chief Financial Officer
|
By:
|
/s/Georgios Pagkalos
|
|
Name:
|
Georgios Pagkalos
|
|
Title:
|
President/Director
|
1. |
Subject to the terms and conditions of this Agreement, the Company agrees to accept your recommendation and employ the Nominee through you, and you agree to make him available for employment by the Company, effective September 1, 2010.
|
2. |
Subject to the terms and conditions of this Agreement, the Nominee's employment with the Company shall be for the period from September 1, 2010 through August 31, 2012, ("the Term") provided, however, that the Term shall be automatically extended for successive one (1) year terms unless either party viz. your company or us, shall have give notice of non-renewal at least sixty (60) days prior to the expiration of the then applicable Term. There is no guarantee of employment beyond the Term. The terms and conditions of this Agreement shall remain in force during the Nominee's employment.
|
3. |
The Nominee's title shall be Chief Financial Officer. In that capacity, he shall report directly to the Chief Executive Officer and the Board of Directors of the Company. He shall have such specific duties, responsibilities and authority as may be assigned to him by the Board of Directors of the Company, and in the absence of such assignment, such duties, responsibilities and authority as are customary to those positions.
|
4. |
During his employment, the Nominee shall devote his full business time, attention, energy and best efforts to the business and affairs of the Company. The Nominee agrees that he shall not engage in or be interested in any capacity in any activity, unless such activity is fully disclosed and approved in writing prior to the undertaking by the Board of Directors of the Company.
|
5. |
(a) In consideration of the services of the Nominee, you shall be paid an annualized base salary of € 228,000, net of any tax and insurance deductions, payable in accordance with the Company's normal payroll practices. In addition, you shall be paid all social security obligations in relation to the Nominee's employment as well as any professional membership fee paid by you on behalf of the Nominee.
|
6. |
(a) The Company may immediately terminate the employment of the Nominee for "Cause" (as such term is defined herein). In such event, or if the Nominee resigns (except as set forth in Paragraph 7(a) herein) or retire as an employee of TOP Ships, the obligations of the Company shall cease immediately and you shall not be entitled to any further payments of any kind, unless, by mutual agreement, you provide TOP Ships with another employee to fill the vacated positions, acceptable to the Company. For purposes of this Agreement, "Cause" shall include:
|
(i) |
willful or deliberate failure of the Nominee to perform his duties;
|
(ii) |
material breach of the terms of this Agreement by you or by the Nominee;
|
(ii) |
dishonesty, willful misconduct or fraud in connection with the hiring of the Nominee by the Company, the performance of his duties, or in any way related to the business of TOP Ships;
|
(iv) |
conviction of the Nominee or a plea of nolo contendere (or the equivalent) to a felony or any crime involving moral turpitude;
|
(v) |
the Nominee engaging in conduct materially injurious to the business, reputation or goodwill of TOP Ships; or
|
(vi) |
Violation of applicable policies, practices and standards of behavior of TOP Ships by the Nominee.
|
7. |
In the event of a "Change in Control" (as such term is defined herein), during the Term of this Agreement, you and the Company have the option to terminate this Agreement within six (6) months following such Change in Control, and you shall be eligible to receive the payment specified in paragraph 7 (b), below, provided that the conditions of said paragraph are satisfied.
|
(i) |
acquisition by any individual, entity or group of beneficial ownership of thirty percent (30%) or more either (A) the then-outstanding shares of common stock of TOP Ships or (B) the combined voting power of the then-outstanding voting securities of TOP Ships entitled to vote generally in the election of directors;
|
(ii) |
consummation of a reorganization, merger or consolidation of TOP Ships or the sale or other disposition of all or substantially all of the assets of TOP Ships; or
|
(iii) |
approval by the shareholders of TOP Ships of a complete liquidation or dissolution of TOP Ships.
|
8. |
You represent and warrant as follows:
|
9. |
During the course of our agreement and the employment of the Nominee, you and he will have access to information that is confidential and proprietary to TOP Ships, each of its clients and prospective clients. Except in the performance of your or his obligations under this Agreement or with the prior written consent of TOP Ships, you agree that neither you nor he will at any time, during or after his employment, disclose to any person or use for your benefit or the benefit of others, any such information obtained by you or him.
|
10. |
You and the Nominee agree to deliver promptly on termination of his employment, or at any other time on request by TOP Ships, all property and equipment of TOP Ships of any kind in your or his possession or control.
|
11. |
As part of the consideration for the compensation and benefits paid to you under this Agreement, and to protect the confidential and proprietary information that will be disclosed and entrusted to you or to your employee, the business good will of TOP Ships that exists and will be developed, and the business opportunities that will be disclosed or entrusted to you or to the Nominee by TOP Ships; and as an additional incentive for TOP Ships to enter into this Agreement, the parties agree as follows:
|
12. |
You acknowledge and agree that the services of the Nominee are of a unique nature with broad access to plans, strategies and methods of operations, and that as such, it is fair and reasonable in order to protect the business, operations, assets and reputation of TOP Ships that you and he make the covenants and undertakings set forth in paragraph 9, 10 and 11. Furthermore, you and he agree that if you or he breach or attempt to breach or violate any of the foregoing provisions, TOP Ships will be irreparably harmed and monetary damages will not provide an adequate remedy. Accordingly, it is agreed that TOP Ships may apply for and shall be entitled to temporary, preliminary and permanent injunctive relief (without the necessity of posting a bond or other security) in order to prevent breach of this Agreement or to specifically enforce the provisions hereof, and you and the Nominee hereby consent to the granting of such relief, without having to prove the inadequacy of the available remedies at law or actual damages. It is understood that any such injunctive remedy shall not be exclusive or waive any rights to seek other remedies at law or in equity. The parties further agree that the covenants and undertakings covered by this Agreement are reasonable in light of the facts as they exist on the date of this Agreement. However, if at any time, a court or panel of arbitrators having jurisdiction over this Agreement shall determine that any of the subject matter or duration is unreasonable in any respect, it shall be reduced, and not terminated, as such court or panel of arbitrators determines may be reasonable.
|
13. |
This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of laws. If any dispute should arise concerning this Agreement, the interpretation of the terms of the Agreement or otherwise relating in any way to the terms and conditions of your employment or its termination, including any claim of statutory discrimination, the parties agree to submit the dispute to arbitration before a panel of three (3) neutral arbitrators. For injunctive relief, it is agreed that any court of competent jurisdiction also may entertain an application by either party. The parties further agree that no demand for punitive damages shall be made in any such arbitration proceeding and that the arbitrators shall not have the power to award punitive damages in any such proceedings. Any award of the arbitrators shall be final and binding, subject only to such right of review as may be provided under applicable law.
|
14. |
No failure by either party at any time to give notice of any breach by the other party, or to require compliance with any condition or provision of this Agreement shall be deemed a waiver of a similar or dissimilar provision or condition at the time or at any prior or subsequent time.
|
15. |
In the event that any provision or term of this Agreement is held to be invalid, prohibited or unenforceable for any reason, such provision or term shall be deemed severed from this Agreement without invalidating the remaining provisions, which shall remain in full force and effect.
|
16. |
You and the Nominee agree to keep this Agreement confidential and not to disclose its terms to any third parties unless required to do so by law or regulation, without the prior written consent of TOP Ships. You may, however, disclose the details of the employment and compensation arrangements to your shareholders and in the case of the Nominee to his immediate family, and to your tax, accounting and legal advisors, provided that you receive their assurance in advance that they will not disclose those matters to any third party. Nothing in this Agreement, however, shall preclude you from disclosing to potential subsequent employers the existence of this Agreement and the restrictions set forth in paragraph 11.
|
17. |
This Agreement and all rights and obligations hereunder shall be binding upon and shall inure to the benefit of your heirs, executors, representatives and administrators and any successors in interest which may acquire or succeed to all or substantially all of the business and assets of TOP Ships by any means or its assigns. In that regard, you understand that this Agreement may subsequently be assigned by TOP Ships. Because of the personal nature of the services to be rendered by you, you may not assign your rights or obligations under this Agreement without the prior written consent of TOP Ships.
|
18. |
This Agreement contains the entire understanding between the parties on the subjects covered here and supersedes all prior agreements, arrangements and understandings, whether written or oral. You represent that you have not relied on any statements, oral or written, not contained in this Agreement. This Agreement may not be changed orally, but only in writing signed by both parties.
|
19. |
This Agreement may be signed in separate counterparts, both of which together shall constitute an original instrument. The parties agree to accept a signed facsimile counterpart of this Agreement as a fully binding original.
|
By:
|
/s/Alexandros Tsirikos
|
|
Name:
|
Alexandros Tsirikos
|
|
Title:
|
Chief Financial Officer
|
By:
|
/s/Georgios Pagkalos
|
|
Name:
|
Georgios Pagkalos
|
|
Title:
|
President/Director
|
Clause
|
Page
|
||
1
|
Definitions
|
2
|
|
2
|
Representations and Warranties
|
2
|
|
3
|
Agreement of the Creditor Parties and the BorrowerS
|
3
|
|
4
|
Conditions Precedent
|
4
|
|
5
|
Variations to Loan Agreement and Finance Documents
|
4
|
|
6
|
Continuance of Loan Agreement and Finance Documents
|
5
|
|
7
|
Expenses
|
6
|
|
8
|
Notices
|
6
|
|
9
|
Law and Jurisdiction
|
6
|
|
Schedule 1
|
8
|
||
Execution Page
|
9
|
(1) |
MONTE CARLO 37 SHIPPING COMPANY LIMITED
, a corporation incorporated in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Islands, Majuro, Marshall Islands, MH96960 (
"Borrower A"
);
|
(2) |
MONTE CARLO 39 SHIPPING COMPANY LIMITED
, a corporation incorporated in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Islands, Majuro, Marshall Islands, MH96960 (
"Borrower B"
)
|
(3) |
MONTE CARLO LAX SHIPPING COMPANY LIMITED
, a corporation incorporated in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Islands, Majuro, Marshall Islands, MH96960 (
"Borrower C"
);
|
(4) |
TOP SHIPS INC.
, a corporation incorporated in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Islands, Majuro, Marshall Islands, MH96960 as
Corporate Guarantor;
|
(5) |
THE BANKS AND FINANCIAL INSTITUTIONS
listed in Schedule 1, as
Lenders
;
|
(6) |
ABN AMRO BANK N.V.,
acting through its office at 93 Coolsingel, 3012 AE, Rotterdam, The Netherlands as
Agent
;
|
(7) |
ABN AMRO BANK N.V.,
acting through its office at 93 Coolsingel, 3012 AE, Rotterdam, The Netherlands as
Arranger;
|
(8) |
ABN AMRO BANK N.V.,
acting through its office at 93 Coolsingel, 3012 AE, Rotterdam, The Netherlands as
Underwriter;
|
(9) |
ABN AMRO BANK N.V.,
acting through its office at 93 Coolsingel, 3012 AE, Rotterdam, The Netherlands as
Security Trustee
; and
|
(10) |
ABN AMRO BANK N.V
, acting through its office at 93 Coolsingel, 3012 AE, Rotterdam, The Netherlands as
Swap Bank
.
|
(A) |
By a loan agreement dated 9 July 2015 (as amended and restated by a deed of amendment and restatement dated 28 September 2015 and as further amended and restated by a deed of adherence, assumption amendment and restatement dated 1 August 2016, the "
Loan Agreement
") made between (i) Borrower A, Borrower B and Borrower C as joint and several Borrowers (together, the
"Borrowers"
), (ii) the Lenders, (iii) the Agent, (iv) the Arranger, (v) the Underwriter, (vi) the Security Trustee and the (vii) the Swap Bank, the Lenders made available to the Borrowers a loan facility of US$64,400,000 for the purpose of financing part of the construction cost of m.vs. "ECO FLEET", "ECO REVOLUTION" and "NORD VALIANT" of which the amount of $55,675,000 is outstanding as of the date of this Agreement by way of principal.
|
(B) |
By a master agreement (on the 2002 ISDA Master Agreement (Multicurrency-Crossborder) Form and including the Schedule thereto) dated 1 August 2016 and made between (i) the Borrowers and (ii) the Swap Bank, it was agreed that the Swap Bank would enter into Designated Transactions with the Borrowers from time to time to (inter alia) hedge the Borrowers' exposure under the Loan Agreement to interest rate fluctuations.
|
(C) |
The Borrowers and the Corporate Guarantor have requested that the Creditor Parties give their consent to the amendment of the minimum required participation of the Pistiolis
|
(D) |
This Supplemental Agreement sets out the terms and conditions on which the Creditor Parties agree, with effect on and from the Effective Date, at the request of the Borrowers, to the amendment of paragraph (l) of Clause 19.1 of the Loan Agreement and to the consequential amendment of the Loan Agreement and the other Finance Documents.
|
1 |
DEFINITIONS
|
1.1 |
Defined expressions
|
1.2 |
Definitions
|
1.3 |
Application of construction and interpretation provisions of Loan Agreement.
|
2 |
REPRESENTATIONS AND WARRANTIES
|
2.1 |
Repetition of Loan Agreement representations and warranties
|
2.2 |
Repetition of Corporate Guarantee representations and warranties
|
2.3 |
General
|
(a) |
it is duly incorporated and validly existing and in good standing under the laws of the Marshall Islands and has full power to enter into and perform its obligations under this Supplemental Agreement and has complied with all statutory and other requirements relative to its business, and does not have an established place of business in any part of the United Kingdom or the United States of America;
|
(b) |
all necessary consents (as such expression is construed in the Loan Agreement) for the execution, delivery, performance, validity and/or enforceability of this Supplemental Agreement and all other documents to be executed in connection with the amendments to the Loan Agreement as contemplated hereby have been obtained and will be maintained in full force and effect, from the date of this Supplemental Agreement and so long as any moneys are owing under any of the Finance Documents and while all or any part of the Loan remains outstanding;
|
(c) |
it has taken all necessary corporate and other action to authorise the execution, delivery and performance of its obligations under this Supplemental Agreement and such other documents to which it is a party and such documents do or will upon execution thereof constitute the valid and binding obligations of the Borrowers and the Corporate Guarantor enforceable in accordance with their respective terms;
|
(d) |
the execution, delivery and performance of this Supplemental Agreement and all such other documents as contemplated hereby does not and will not, from the date of this Supplemental Agreement and so long as any moneys are owing under any of the Finance Documents and while all or any part of the Loan remains outstanding, constitute a breach of any contractual restriction or any law, regulation, consent or authorisation binding on the Borrowers and the Corporate Guarantor or on any of its property or assets and will not result in the creation or imposition of any Security Interest (other than under the Finance Documents) on any of such property or assets; and
|
(e) |
it has fully disclosed to each Creditor Party all facts which it knows and which are material for disclosure to the Creditor Parties in the context of this Supplemental Agreement and all information furnished by the Borrowers and the Corporate Guarantor or on behalf of each of them relating to its business and affairs in connection with this Supplemental Agreement was and remains true, correct and complete in all material respects and there are no other material facts or considerations the omission of which would render any such information misleading.
|
3 |
AGREEMENT OF THE CREDITOR PARTIES AND THE BORROWERS
|
3.1 |
Agreement of the Creditor Parties
|
3.2 |
Agreement of the Borrowers and the Corporate Guarantor
|
4 |
CONDITIONS PRECEDENT
|
4.1 |
Conditions Precedent
|
(a) |
a certificate of an officer of each of the Borrowers and the Corporate Guarantor confirming the names of all the Directors of that Borrowers or (as applicable) the Corporate Guarantor and having attached thereto true and complete copies of its incorporation and constitutional documents;
|
(b) |
true and complete copies of the resolutions passed at a meeting of the Directors of each of the Borrowers and the Corporate Guarantor authorising and approving the execution of this Supplemental Agreement and any other document or action to which it is or is to be a party and authorising its directors or other representatives to execute the same on its behalf;
|
(c) |
the original of any power of attorney issued by the Borrowers and the Corporate Guarantor pursuant to such resolutions aforesaid;
|
(d) |
an original of this Supplemental Agreement duly executed by the parties to it;
|
(e) |
certified copies of all documents (with a certified translation if an original is not in English) evidencing any other necessary action, approvals or consents with respect to this Supplemental Agreement (including without limitation) all necessary governmental and other official approvals and consents in such pertinent jurisdictions as the Agent deems appropriate;
|
(f) |
favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of the Marshall islands and such other relevant jurisdiction as the Agent may require;
|
(g) |
evidence that the agent referred to in Clause 9.4 has accepted its appointment as agent for service of process under this Supplemental Agreement; and
|
(h) |
such other documents or evidence as the Agent may require.
|
5 |
VARIATIONS TO LOAN AGREEMENT AND FINANCE DOCUMENTS
|
5.1 |
Specific amendments to Loan Agreement
|
(a) |
by deleting paragraph (l) of clause 19.1 thereof in its entirety and replacing it with the following paragraph:
|
"(l) |
without the Agent's prior written consent, any party (or parties acting in concert) other than members of the Pistiolis Family (either directly and/or indirectly through companies beneficially owned by any member of the Pistiolis and/or trusts of foundations of which any member of the Pistiolis Family are beneficiaries) acquires control of the voting rights of at least 50 per cent. of the share capital of the Corporate Guarantor; or";
|
(b) |
by construing all references therein to "this Agreement" where the context admits as being references to "this Agreement as the same is amended and supplemented by this Supplemental Agreement and as the same may from time to time be further supplemented and/or amended"; and
|
(c) |
by construing references to the Finance Documents as being references to the Finance Documents as it is from time to time supplemented and/or amended.
|
5.2 |
Amendments to Finance Documents
|
(a) |
the definition of, and references throughout the each of Finance Documents to, the Loan Agreement and any of the other Finance Documents shall be construed as if the same referred to the Loan Agreement and those Finance Documents as amended and supplemented by this Supplemental Agreement; and
|
(b) |
by construing references throughout each of the Finance Documents to "this Agreement", "this Deed", "hereunder and other like expressions as if the same referred to such Finance Documents as amended and supplemented by this Supplemental Agreement.
|
5.3 |
Finance Documents to remain in full force and effect
|
(a) |
the amendments to the Finance Documents contained or referred to in Clauses 5.1 and 5.2; and
|
(b) |
such further or consequential modifications as may be necessary to make the same consistent with, and to give full effect to, the terms of this Supplemental Agreement.
|
6 |
CONTINUANCE OF LOAN AGREEMENT AND FINANCE DOCUMENTS
|
6.1 |
The Borrowers' and Corporate Guarantor's obligation to execute further documents etc.
|
(a) |
execute and deliver to the Agent any assignment, mortgage, power of attorney, proxy or other document, governed by the laws of England or such other country as the Agent may, in any particular case, require;
|
(b) |
effect any registration or notarisation, give any notice or take any other step,
|
6.2 |
Purposes of further assurances.
|
(a) |
validly and effectively to create any Security Interest or right of any kind which the Creditor Parties intended should be created by or pursuant to the Loan Agreement as amended and supplemented by this Supplemental Agreement or any other Finance Document, and
|
(b) |
implementing the terms and provisions of this Supplemental Agreement.
|
6.3 |
Terms of further assurances.
|
6.4 |
Obligation to comply with notice.
|
7 |
EXPENSES
|
7.1 |
General
|
8 |
NOTICES
|
8.1 |
General
|
9 |
LAW AND JURISDICTION
|
9.1 |
English Law
|
9.2 |
Exclusive English jurisdiction
|
9.3 |
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.
|
9.4 |
Process Agent
|
9.5 |
Creditor's Rights unaffected
|
9.6 |
Meaning of proceedings
|
Lender
|
Lending Office
|
ABN AMRO BANK N.V.
|
c/o Loan Administrator – Transportation Clients
93 Coolsingel
3012 AE Rotterdam
The Netherlands
|
THE BORROWERS
|
||||
SIGNED
by Evangelos Ikonomou
|
)
|
/s/ Evangelos Ikonomou
|
||
)
|
||||
for and on behalf of
|
)
|
|||
MONTE CARLO 37 SHIPPING
|
)
|
|||
COMPANY LIMITED
|
)
|
|||
in the presence of:
|
)
|
/s/ Vassiliki Georgopoulos
|
||
SIGNED
by Evangelos Ikonomou
|
)
|
/s/ Evangelos Ikonomou
|
||
)
|
||||
for and on behalf of
|
)
|
|||
MONTE CARLO 39 SHIPPING
|
)
|
|||
COMPANY LIMITED
|
)
|
|||
in the presence of:
|
)
|
/s/ Vassiliki Georgopoulos
|
||
SIGNED
by Evangelos Ikonomou
|
)
|
/s/ Evangelos Ikonomou
|
||
)
|
||||
for and on behalf of
|
)
|
|||
MONTE CARLO LAX SHIPPING
|
)
|
|||
COMPANY LIMITED
|
)
|
|||
in the presence of:
|
)
|
/s/ Vassiliki Georgopoulos
|
||
THE CORPORATE GUARANTOR
|
||||
S
IGNED
by Evangelos Ikonomou
|
)
|
/s/ Evangelos Ikonomou
|
||
)
|
||||
for and on behalf of
|
)
|
|||
TOP SHIPS INC.
|
)
|
|||
in the presence of:
|
)
|
/s/ Vassiliki Georgopoulos
|
||
LENDERS
|
||||
SIGNED
by Emmanouil Pontikis
|
)
|
/s/ Emmanouil Pontikis
|
||
)
|
||||
for and on behalf of
|
)
|
|||
ABN AMRO BANK N.V.
|
)
|
|||
in the presence of:
|
)
|
/s/ Kelina Kantzou
|
THE AGENT
|
||||
SIGNED
by Emmanouil Pontikis
|
)
|
/s/ Emmanouil Pontikis
|
||
)
|
||||
for and on behalf of
|
)
|
|||
ABN AMRO BANK N.V.
|
)
|
|||
in the presence of:
|
)
|
/s/ Kelina Kantzou
|
||
THE SECURITY TRUSTEE
|
||||
SIGNED
by Emmanouil Pontikis
|
)
|
/s/ Emmanouil Pontikis
|
||
)
|
||||
for and on behalf of
|
)
|
|||
ABN AMRO BANK N.V.
|
)
|
|||
in the presence of:
|
)
|
/s/ Kelina Kantzou
|
||
THE SWAP BANK
|
||||
SIGNED
by Emmanouil Pontikis
|
)
|
/s/ Emmanouil Pontikis
|
||
)
|
||||
for and on behalf of
|
)
|
|||
ABN AMRO BANK N.V.
|
)
|
|||
in the presence of:
|
)
|
/s/ Kelina Kantzou
|
||
THE ARRANGER
|
||||
SIGNED
by Emmanouil Pontikis
|
)
|
/s/ Emmanouil Pontikis
|
||
)
|
||||
for and on behalf of
|
)
|
|||
ABN AMRO BANK N.V.
|
)
|
|||
in the presence of:
|
)
|
/s/ Kelina Kantzou
|
||
THE UNDERWRITER
|
||||
SIGNED
by Emmanouil Pontikis
|
)
|
/s/ Emmanouil Pontikis
|
||
)
|
||||
for and on behalf of
|
)
|
|||
ABN AMRO BANK N.V.
|
)
|
|||
in the presence of:
|
)
|
/s/ Kelina Kantzou
|
LOAN AGREEMENT
for a loan facility of up to US $23,350,000 |
CLAUSE
|
HEADINGS
|
PAGE
|
1
|
PURPOSE, DEFINITIONS AND INTERPRETATION
|
1
|
2
|
THE COMMITMENT AND THE LOAN
|
21
|
3
|
INTEREST AND INTEREST PERIODS
|
25
|
4
|
REPAYMENT AND PREPAYMENT
|
29
|
5
|
FEES, EXPENSES, VAT, STAMP DUTY ETC
|
33
|
6
|
PAYMENTS AND TAXES; ACCOUNTS AND CALCULATIONS
|
35
|
7
|
REPRESENTATIONS AND WARRANTIES
|
37
|
8
|
UNDERTAKINGS
|
44
|
9
|
CONDITIONS
|
60
|
10
|
EVENTS OF DEFAULT
|
61
|
11
|
INDEMNITIES
|
69
|
12
|
UNLAWFULNESS AND INCREASED COST
|
74
|
13
|
SECURITY, APPLICATION AND SET-OFF
|
76
|
14
|
EARNINGS ACCOUNT
|
78
|
15
|
ASSIGNMENT, TRANSFER, PARTICIPATION, LENDING OFFICE
|
81
|
16
|
MISCELLANEOUS
|
84
|
17
|
COMMUNICATIONS
|
89
|
18
|
GOVERNING LAW AND JURISDICTION
|
90
|
(1) |
ALPHA BANK A.E.
, a banking societe anonyme incorporated in and pursuant to the laws of the Hellenic Republic with its head office at 40 Stadiou Street, Athens GR 102 52, Greece, acting, except as otherwise herein provided, through its office at 93 Akti Miaouli, Piraeus, Greece, as lender (hereinafter called the
"Lender"
, which expression shall include its successors in title, Assignees and Transferees); and
|
(2) |
ECO SEVEN INC.
,
a company duly incorporated in the Republic of the Marshall Islands having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960, as borrower (hereinafter called the
"Borrower"
which expression shall include its successors)
|
1. |
PURPOSE, DEFINITIONS AND INTERPRETATION
|
1.1 |
Amount and Purpose
|
1.2 |
Definitions
|
(a) |
all losses, liabilities, costs, charges, expenses, damages and outgoings of whatever nature, (including, without limitation, Taxes, repair costs, registration fees and insurance premiums, crew wages, repatriation expenses and seamen's pension fund dues) suffered, incurred, charged to or paid by the Lender in connection with the exercise of the powers referred to in or granted by any of the Finance Documents or otherwise payable by the Borrower in accordance with the terms of any of the Finance Documents;
|
(b) |
the expenses referred to in Clause 5.2 (
Expenses
); 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 Lender until the date of receipt or recovery thereof (whether before or after judgement) at the rate referred to in Clause 3.4 (
Default interest
) (as conclusively certified by the Lender);
|
(a) |
sections 1471 to 1474 of the US Internal Revenue Code of 1986 (the "Code") or any associated regulations or other associated official guidance;
|
(b) |
any treaty, law, regulation or other official guidance enacted in any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of paragraph (a) above; or
|
(c) |
any agreement pursuant to the implementation of 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 January 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 2015; 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) |
the increase in a payment made by the Borrower or a Security Party to the Lender under Clause 11.7 (
Gross-up in the event of a FATCA Deduction –Borrower
) of this Agreement; or
|
(b) |
a payment under Clause 11.7(d) of this Agreement;
|
(a) |
for principal, interest or any other sum payable in respect of any moneys borrowed or raised by the debtor;
|
(b) |
under any loan stock, bond, note or other security issued by the debtor;
|
(c) |
under any acceptance credit, guarantee or letter of credit facility made available to the debtor;
|
(d) |
under a financial lease, a deferred purchase consideration arrangement or any other agreement having the commercial effect of a borrowing or raising of money by the debtor;
|
(e) |
under arty 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) |
"
The International Management Code for the Safe Operation of Ships and for Pollution Prevention
", currently known or referred to as the "
ISM Code
",
|
(b) |
all further resolutions, circulars, codes, guidelines, regulations and recommendations which are now or in the future issued by or on behalf of the International Maritime Organisation or any other entity with responsibility for implementing the ISM Code, including without limitation, the
"Guidelines on implementation or administering of the International Safety Management
(
ISM
)
Code by Administrations"
produced by the International Maritime Organisation pursuant to Resolution A. 788(19) adopted on 25th November, 1995;
|
(a) |
the DOC and SMC issued by the Classification Society in all respects acceptable to the Lender in its absolute discretion pursuant to the ISM Code in relation to the relevant Vessel within the period specified by the ISM Code;
|
(b) |
all other documents and data which are relevant to the ISM SMS and its implementation and verification which the Lender may require by request; and
|
(c) |
any other documents which are prepared or which are otherwise relevant to establish and maintain the Vessel's or the Owner's compliance with the ISM Code which the Lender may require by request;
|
(a) |
the London interbank offered rate administered by ICE Benchmark Administration Limited (
"ICE"
)
(or any other person which takes over the administration of that rate) for deposits in Dollars for a period equal to, or as
|
(b) |
if on such date no rate is displayed, LIBOR for such period shall be the Lender's offered rate for deposits of Dollars in an amount approximately equal to the amount in relation to which LIBOR is to be determined for a period equivalent to such period to prime banks in the London Interbank Market at or about 11:00 a.m. (London time) on the Quotation Date for such period and for delivery on the first Banking Day of it,
|
(a) |
imposed by law or regulation of the United Kingdom, the Council of the European Union, the United Nations or its Security Council;
|
(b) |
imposed by CISADA; or
|
(c) |
otherwise imposed by any law or regulation by which the Borrower is bound or, as regards a regulation, compliance with which is reasonable in the ordinary course of business of the Borrower and for which a waiver or suspension has not been obtained;
|
(a) |
this Agreement;
|
(b) |
the Accounts Pledge Agreement;
|
(c) |
the Guarantees;
|
(d) |
the Managers' Undertakings;
|
(e) |
the Charterparty Assignment(s);
|
(f) |
the General Assignment;
|
(g) |
the Mortgage;
|
(h) |
any document or documents (including if the context so requires this Agreement) as may have been or shall from time to time after the date of this Agreement be executed to guarantee and/or secure all or any part of the Outstanding Indebtedness as well as for the performance by the Security Parties of all their respective obligations covenants and agreements pursuant to this Agreement and/or the other Security Documents (whether or not any such document also secures moneys from time to time owing pursuant to any other document or agreement), each such Security Document to be in form and substance as the Lender may approve or require, as the same may from time to time be amended and/or supplemented;
|
(a) |
actual, constructive, compromised or arranged total loss of the Vessel; or
|
(b) |
the Compulsory Acquisition of the Vessel; or
|
(c) |
the condemnation, capture, seizure, confiscation, arrest or detention of the Vessel (other than where the same amounts to the Compulsory Acquisition of the Vessel) by any Government Entity, or by persons acting on behalf of any Government Entity or otherwise which deprives the Owner of the use of the Vessel for more than thirty (30) days, unless the Vessel is released and restored to the Owner from such condemnation, capture, seizure, confiscation arrest or detention or within thirty (30) days after the occurrence thereof; and
|
(d) |
the hijacking, capture, seizure or confiscation of the Vessel arising as a result of a piracy or related incident unless the Vessel is released and restored to the Owner from such hijacking, capture, seizure or confiscation within one hundred fifty (150) days after the occurrence thereof;
|
1.3 |
Interpretation.
In this Agreement:
|
(a) |
"
asset
"
includes every kind of property, asset, interest or right, including any present, future or contingent right to any revenues or other payment;
|
(b) |
"
company
"
includes any partnership, joint venture and unincorporated association;
|
(c) |
"
consent
"
includes an authorisation, consent, approval, resolution, licence, exemption, filing, registration, notarisation and legalisation;
|
(d) |
"
control
"
means either ownership of more than fifty percent (50%) of the voting share capital (or equivalent rights of ownership) of such company or entity or the power to direct its policies and management, whether by contract or otherwise and
"
controlled
"
shall be construed accordingly;
|
(e) |
"
contingent liability
"
means a liability which is not certain to arise and/or the amount of which remains unascertained;
|
(f) |
"
document
"
includes a deed; also a letter or fax;
|
(g) |
"
legal or administrative action
"
means any legal proceeding or arbitration and any administrative or regulatory action or investigation;
|
(h) |
"
liability
"
includes every kind of debt or liability (present or future, certain or contingent), whether incurred as principal or surety or otherwise;
|
(i) |
"
law
"
includes any order or decree, any form of delegated legilation, any treaty or international convention and any regulation or resolution of the
|
(j) |
"
policy
",
in relation to any insurance, includes a slip, cover note, certificate of
entry
or other document evidencing the contract of insurance or its terms;
|
(k) |
"
protection and indemnity risks
"
means the usual risks covered by a protection and indemnity association which is a member of the international group of protection and indemnity associations (
"
IG
"
),
including pollution risks and the proportion (if any) of any sums payable to any other person or persons in case of collision which are not recoverable under the hull and machinery policies by reason of the incorporation in them of clause 8 of the Institute Time Clauses (Hulls)(1/11/1995) or the Institute Amended Running Down Clause (1/10/71) or any equivalent provision;
|
(l) |
"
successor in title
"
includes any person who is entitled (by assignment, novation, merger or otherwise) to any other person's rights under this Agreement or any other Security Document (or any interest in those rights) or who, as administrator, liquidator or otherwise, is entitled to exercise those rights; and in particular references to a successor in title include a person to whom those rights (or any interest in those rights) are transferred or pass as a result of a merger, division, reconstruction or other reorganisation of it or any other person;
|
(m) |
"
War risks
"
includes the risk of mines, blocking and trapping, missing vessel, confiscation, war P&I and all risks excluded by clause 24 of the Institute Time Clauses (Hulls) (1/11/95);
|
(n) |
reference to:
|
(i) |
any
"
enactment
"
shall be deemed to include references to such enactment as re-enacted, amended or extended;
|
(ii) |
a
"
person
"
shall be construed as including reference to an individual, firm, company, corporation, unincorporated body of persons or any State, political sub-division of a state and local or municipal authority, any agency of such State and any international organisation and any person includes such person's assignees and successors in title;
|
(iii) |
a
"
regulation
"
includes any present or future regulation, rule, directive, requirement, request or guideline (whether or not having the force of law) of any governmental, intergovernmental or national or supranational body, agency, department, central bank or government department or any regulatory, self regulatory or other
|
(iv) |
a
"guarantee"
includes references to an indemnity or other assurance against financial loss including, without limitation, an obligation to purchase assets or services as a consequence of a default by any other person to pay any Financial Indebtedness and
"guaranteed"
shall be construed accordingly;
|
(v) |
this Agreement (or to any specified provisions thereof) and all documents referred to in this Agreement (or to any specified provisions thereof) shall be construed as references to this Agreement, that provision or that document as are in force for the time being and as are amended and/or supplemented from time to time;
|
(vi) |
this Agreement includes all the terms of this Agreement and any schedules, annexes or appendices to this Agreement, which form an integral part of same;
|
(vii) |
clauses, sub-clauses and schedules are to Clauses, Sub-Clauses and schedules in this Agreement;
|
(viii) |
the opinion of the Lender or a determination or acceptance by the Lender or to documents, acts, or persons acceptable or satisfactory to the Lender or the like shall be construed as reference to opinion, determination, acceptance or satisfaction of the Lender at the sole discretion of the Lender and such opinion, determination, acceptance or satisfaction of the Lender shall be conclusive and binding on the Borrower;
|
(o) |
Clause headings and the table of contents are inserted for convenience of reference only and shall be ignored in the interpretation of this Agreement;
|
(p) |
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;
|
(q) |
where the context so admits, words in the singular include the plural and vice versa; and
|
(r) |
the words
"including"
and
"in particular"
shall not be construed as limiting the generality of any foregoing words.
|
1.4 |
Same meaning
|
1.5 |
Inconsistency
|
1.6 |
Finance Documents
|
2. |
THE COMMITMENT AND THE LOAN
|
2.1 |
Commitment to lend
|
2.2 |
Drawdown
|
2.3 |
Amount, timing, limitation and purpose of the Commitment
|
(a) |
The amount of the Commitment shall be up to Twenty three million three hundred fifty thousand Dollars ($23,350,000).
|
(b) |
The Commitment will be used for the purpose set out in Clause 1.1 (
Amount and purpose
)
and will be made available to the Borrower on the Drawdown Date.
|
(c) |
The Commitment shall be advanced to the Borrower in one (1) advance.
|
(d) |
The Commitment may not be drawn down after the last day of the Drawdown Period.
|
2.4 |
Availability
|
2.5 |
Termination of Commitment
|
2.6 |
Application of proceeds
|
2.7 |
Evidence
|
2.8 |
Disbursement of Commitment to the Builder's bank
|
(a) |
Notwithstanding the foregoing provisions of this Clause 2, in the event that the Commitment or any relevant part thereof (as the case may be) is required to be drawn down prior to the satisfaction of the requirements of Clause 9 (
Conditions
) and remitted to the bank to which the purchase price of the Vessel should be paid (the
"Builder's bank"
),
the Lender may in its absolute discretion agree to remit such amount to the Builder's bank prior to the satisfaction of the requirements of Clause 9 (
Conditions
) expressly subject to the following conditions:
|
(i)
(ii)
|
such amount is remitted to the Builder's bank to be held by it in an account in the Lender's name (the
"deposit account"
)
and on trust for and to the order of the Lender;
the principal amount (the
"deposited amount"
)
of such funds will only be released to the Builder upon signing of the copy of the protocol of delivery and acceptance of the Vessel in the form agreed between the Builder and the Borrower;
|
(iii) |
the deposited amount so released may be used only for payment to the account of the Builder with the Builder's bank in satisfaction of the balance of the purchase price of the Vessel ; and
|
(iv) |
in the event that none of the said amount so remitted is released in accordance with the Lender's instructions or any part thereof is not so released, the Lender may within no later than five (5) days from the expected Delivery Date, instruct the Builder's bank to return the funds and any earned interest to the Lender in accordance of the instructions of the Lender and the Borrower shall be obliged to indemnify the Lender in accordance with Clause 11.1 (
Indemnities
).
Any amounts so remitted and returned pursuant to this Clause will be applied in or towards prepayment of the Loan pursuant to Clause 4.2 (
Voluntary Prepayment
).
|
(b) |
When either:
|
(i) |
the Commitment or any relevant part thereof (as the case may be) is disbursed (whether on the expected Delivery Date or thereafter) in accordance with Clause 2.8(a) or
|
(ii) |
the Builder's bank fails either to apply the deposited amount' full in accordance with Clause 2.8(a) or to refund the deposited amount in full in accordance with Clause 2.8(a)(iv),
|
(c) |
The Lender shall have no liability to the Borrower if the Builder's bank fails to carry out any instructions given to it by the Lender to disburse or refund the deposited amount.
|
(d) |
If, upon being instructed to do so by the Lender, the Builder's bank fails either to apply the deposited amount in full in accordance with Clause 2.8(a) or to refund the deposited amount in full in accordance with Clause 2.8(a)(iv):
|
(i) |
the continued failure of the Builder's bank to do so for five Banking Days after the giving of such instructions shall be deemed to be an Event of Default for the purposes of this Agreement; the Borrower shall indemnify the Lender on demand in respect to all losses certified by the Lender as suffered or incurred by the Lender as a consequence of the Builder's bank failure to carry out the Lender's instructions; and without prejudice to the obligations of the Borrower so to indemnify the Lender on demand, the Lender shall in good faith take reasonable and proper steps diligently to seek recovery of the deposited amount from the Builder's bank (provided that prior to taking such action the Borrower shall have agreed to indemnify the Lender for all costs and expenses which may be incurred in seeking recovery of such amount, including, without limitation, all legal fees and disbursements reasonably and properly incurred) and if the Lender shall recover any part of the deposited amount (and provided that it has previously received full indemnification under Clause 2.8(d)(ii)) the Lender shall apply the amount so recovered, after subtracting any tax suffered or incurred thereon by the Lender, in or towards prepayment of the Loan in such manner as the Lender may, in its sole discretion, determine, so long as no Event of Default has occurred and is
|
(e) |
If, at the time prior to the deposit of funds by the Lender with the Builder's bank, the Lender considers in its absolute discretion that the Builder's bank may be or will be unable or unwilling for any reason (including, without limitation, by reason of the Builder's bank's financial position or regulatory requirements applicable to the Builder's bank) to take and fully apply such deposit in accordance with the requirements of this Clause 2.8, the Lender may, in its absolute discretion, decide not to make such deposit and this Agreement shall thereupon take effect as if this Clause 2.8 does not apply and the Commitment or the relevant part thereof (as the case may be) shall, without prejudice to Clause 9 (
Conditions
), be made and disbursed in the manner set out in this Agreement.
|
2.9 |
Cancellation
|
3. |
INTEREST AND INTEREST PERIODS
|
3.1 |
Normal interest rate
|
3.2 |
Selection of Interest Periods
|
3.3 |
Determination of Interest Periods
|
(a) |
the first Interest Period shall commence on the Drawdown Date and each subsequent Interest Period in respect thereof shall commence on the last day of the previous Interest Period;
|
(b) |
if any Interest Period would otherwise overrun a Repayment Date, then (i) in the case of the last Repayment Date, such Interest Period shall end on such Repayment Date, and (ii) in the case of any other Repayment Date or Repayment Dates the Loan shall be divided into parts so that there is one part in the amount of the repayment instalment due on each Repayment Date falling during that Interest Period and having an Interest Period ending on the relevant Repayment Date and another part in the amount of the balance of the Loan having an Interest Period ascertained in accordance with Clause 3.2 (
Selection of Interest Periods
) and the other provisions of this Clause 3.3; and
|
(c) |
if the Borrower fails to specify the duration of an Interest Period in accordance with the provisions of Clause 3.2 (
Selection of Interest Periods
) and this Clause 3.3 such Interest Period shall have duration of three (3) months or such other period as shall comply with this Clause 3.3.
|
3.4 |
Default interest
|
(a) |
Default Interest
: If the Borrower fails to pay any sum (including, without limitation, any sum payable pursuant to this Clause 3.4) on its due date for payment under any of the Finance Documents, the Borrower shall pay interest on such sum on demand from the due date up to the date of actual payment (as well after as before judgment) at a rate determined by the Lender pursuant to this Clause 3.4. The period beginning on such due date and ending on the date of actual payment shall be divided at the discretion of the Lender into successive periods of not more than three (3) months as selected by the Lender each of which (other than the first, which shall commence on such due date) shall commence on the last day of the preceding such period. The rate of interest applicable to each such period shall be the aggregate (as determined by the Lender) of (a) two per cent (2%) per annum, (b) the Margin, and (c) LIBOR for such period. Such interest shall due and
|
(b) |
Compounding of default interest
: Any such interest which is not paid at the end of the period by reference to which it was determined shall thereupon be compounded.
|
3.5 |
Notification of Interest Periods and interest rate
|
3.6 |
Market disruption; non-availability
|
(a) |
Market disruption
: If and whenever, at any time prior to the commencement of any Interest Period, the Lender (in its reasonable discretion) shall have determined (which determination shall be conclusive) that a Market Disruption Event has occurred in relation to the Loan (or the relevant part thereof) for any such Interest Period, then the Lender shall forthwith give notice thereof (a
"Determination Notice"
)
to the Borrower and the rate of interest on the Loan (or the relevant part thereof) for that Interest Period shall be the percentage rate per annum which is the sum of:
|
(i) |
the Margin; and
|
(ii) |
the rate which expresses as a percentage rate per annum the cost to the Lender of funding the Loan (or the relevant part thereof) from whatever source it may reasonably select.
|
(b) |
Meaning of "Market Disruption Event"
: In this Agreement
"
Market Disruption Event
"
means:
|
(i) |
at or about noon on the Quotation Day for the relevant Interest Period LIBOR is not available; and/or
|
(ii) |
before close of business in London on the Quotation Day for the relevant Interest Period, the Lender determines (in its sole discretion) that the cost to it of obtaining matching deposits in the London Interbank Market to fund the Loan (or the relevant part thereof) for such Interest Period would be in excess of the LIBOR; and/or
|
(iii) |
before close of business in London on the Quotation Day for the relevant Interest Period, deposits in Dollars are not available to the Lender in the London Interbank Market in the ordinary course of business in sufficient amounts to fund the Loan (or the relevant part thereof) for such Interest Period.
|
(c) |
Alternative basis of interest or funding
:
|
(i) |
If a Market Disruption Event occurs and the Lender or the Borrower so requires, the Lender and the Borrower shall enter into negotiations (for a period of not more than five (5) days (the
"
Negotiation Period
"
))
after the giving of the relevant Determination Notice with a view to agreeing a substitute basis for determining the rate of interest.
|
(ii) |
Any alternative basis agreed pursuant to paragraph (a) above shall be binding on the Lender and all Security Parties.
|
(d) |
Alternative basis of interest in absence of agreement
: If the Lender and the Borrower will not enter into negotiations as provided in Clause 3.6(c)(i) or if an alternative interest rate or alternative basis is not agreed within the Negotiation Period, and the relevant circumstances are continuing at the end of the Negotiation Period, then the Lender shall set the following Interest Period and an interest rate representing the cost of funding of the Lender in Dollars of the Loan (or the relevant part thereof) plus the Margin for such Interest Period; if the relevant circumstances are continuing at the end of the Interest Period so set by the Lender, the Lender shall continue to set the following Interest Period and an interest rate representing its cost of funding in Dollars of the Loan (or the relevant part thereof) plus the Margin for such Interest Period.
|
(e) |
Notice of prepayment
: If the Borrower does not agree with an interest rate set by the Lender under Clause 3.6(d) (
Alternative basis of interest in absence of agreement
), the Borrower may give the Lender not less than 5 Banking Days' notice of its intention to prepay the Loan at the end of the interest period set by the Lender.
|
(f) |
Prepayment; termination of Commitment
: A notice under Clause 3.6(e) (
Notice of prepayment
) shall be irrevocable; and on the last Banking Day of the interest period set by the Lender, the Borrower shall prepay (without premium or penalty) the Loan, together with accrued interest thereon at the applicable rate plus the Margin and the balance of the Outstanding Indebtedness.
|
(g) |
Application of prepayment
: The provisions of Clause 4 (
Repayment-Prepayment
) shall apply in relation to the prepayment made hereunder.
|
4. |
REPAYMENT AND PREPAYMENT
|
4.1 |
Repayment
|
(a) |
1
st
to 12
th
(incl.) in the amount of Dollars Four hundred thousand ($400,000) each; and
|
(b) |
13
th
to 32
nd
(incl.) in the amount of Dollars Three hundred two thousand five hundred ($302,500) each,
|
4.2 |
Voluntary prepayment
|
(a) |
The Borrower shall have the right, to prepay (without any penalty or premium whatsoever) part or all of the Loan in each case together with all unpaid interest accrued thereon and all other sums of money whatsoever due and owing from the Borrower to the Lender hereunder or pursuant to the other Finance Documents and all interest accrued thereon,
provided that
:
|
(i) |
the Lender shall have received from the Borrower not less than five (5) Banking Days' prior notice (which shall be irrevocable) of its intention to make such prepayment and specify the amount and the date on which such prepayment is to be made;
|
(i) |
such prepayment may take place on any Banking Day
provided, however that
if the Borrower shall request consent to make such prepayment on a day other than the last day of the Interest Period relating to the relevant part of the Loan to be prepaid or the whole of the Loan (as the case may be) the Borrower will pay in addition to the amount to be prepaid, any such sum as may be payable to the Lender pursuant to Clause 11.1 (
Miscellaneous indemnities
);
|
(iii) |
each such prepayment shall be equal to the amount of $250,000 or a whole multiple thereof or the balance of the Loan;
|
(iv) |
any prepayment of less than the whole of the Loan will be applied against pro rata reduction of the Balloon Instalment and the remaining repayment instalments;
|
(v) |
every notice of prepayment shall be effective only on actual receipt by the Lender, shall be irrevocable and shall oblige the Borrower to make such prepayment on the date specified;
|
(vi) |
no amount prepaid may be re-borrowed; and
|
(vii) |
the Borrower may not prepay the Loan or any part thereof save as expressly provided in this Agreement.
|
4.3 |
Compulsory Prepayment on Total Loss or sale of the Vessel
|
(a) |
Before drawdown
: On the Vessel becoming a Total Loss or suffering damage or being involved in an incident which in the reasonable opinion of the Lender may result in the Vessel being subsequently determined to be a Total Loss or being sold before the Commitment is drawn down, the obligation of the Lender to advance the Commitment (or any part thereof) shall immediately cease and the Commitment shall be reduced to zero.
|
(b) |
Thereafter
:
|
(i) |
On the Vessel becoming a Total Loss or suffering damage or being involved in an incident which in the opinion of the Lender may result in the Vessel being subsequently determined to be a Total Loss or being sold following the drawdown of the Commitment, then on the date falling One hundred and eighty (180) days after the date on which the Vessel became a Total Loss or simultaneously with the completion of the sale of the Vessel by delivery of the Vessel to the relevant buyer in exchange of the sale price or, if earlier, on the date when the insurance proceeds in respect of such Total Loss are or Requisition Compensation is received by the Borrower (or the Lender pursuant to the Security Documents), the Borrower shall pay to the Lender the full amount of the Outstanding Indebtedness together with all sums payable by the Borrower to the Lender under Clause 4.4 (
Amounts payable on prepayment
).
|
(c) |
Total loss
: For the purpose of this Agreement, a Total Loss shall be deemed to have occurred:
|
(i) |
in the case of an actual total loss of the Vessel, at the actual date and time the Vessel was lost but in the event of the date of the loss being unknown then the actual total loss shall be deemed to have occurred on the date falling twenty one (21)
days after the date on which the Vessel was last reported;
|
(ii) |
in the case of a constructive total loss of the Vessel, at the date and time notice of abandonment (the
"
NOA date
"
)
of the Vessel is given to the insurers of the Vessel for the time being (provided a claim for such Total Loss is admitted by such insurers) or, if such insurers do not admit such a claim
on the earlier of
(aa) the date when either the total loss is subsequently admitted by the insurers, or (bb) a total loss is subsequently adjudged by a competent court of law or arbitration tribunal to have occurred or (cc) the date falling one hundred and eighty days (180) days after the NOA date, or, in the event that such
|
(iii) |
in the case of a compromised or arranged total loss of the Vessel, on the date upon which a binding agreement as to such compromised or arranged total loss has been entered into by the then insurers of the Vessel;
|
(iv) |
in the case of Compulsory Acquisition of the Vessel, on the date upon which the relevant requisition of title or other compulsory acquisition occurs excluding a requisition for hire;
|
(v) |
in the case of, condemnation, capture, seizure, confiscation, arrest, or detention of the Vessel (other than where the same amounts to Compulsory Acquisition of the Vessel) by any Government Entity, or by persons acting on behalf of any Government Entity or otherwise, which deprives the Owner of the use of the Vessel for more than ninety (90) days, upon the expiry of the period of ninety (90) after the date upon which the relevant, condemnation, capture, seizure or confiscation, arrest or detention; and
|
(vi) |
in the case of hijacking, capture, seizure or confiscation of the Vessel arising as a result of a piracy or related incident unless the Vessel be released and restored to the Owner from such hijacking, capture, seizure or confiscation within One hundred and fifty (150) days after the occurrence thereof.
|
(d) |
Refinancing
: In case of refinancing by another bank or if the Borrower requests the Lender's consent for the discharge of the Mortgage registered on the Vessel, the Borrower shall pay to the Lender the full amount of the Outstanding Indebtedness together with all sums payable by the Borrower to the Lender under Clause 4.4 (
Amounts payable on prepayment
).
|
4.4 |
Amounts payable on prepayment
|
(a) |
Any prepayment of all or part of the Loan under this Agreement shall be made together with (a) accrued interest on the amount to be prepaid to the date of such prepayment (calculated, in the case of a prepayment pursuant to Clause 3.6 (
Market disruption – Non Availability
) at a rate equal to the aggregate of the Margin and the cost to the Lender of funding the Loan) (b) any additional amount payable under Clause 6.6 (
Gross-up
) or Clause12.2 (
Increased cost
), (c) all other sums payable by the Borrower the Lender
|
5. |
FEES, EXPENSES, VAT, STAMP DUTY ETC.
|
5.1 |
Fees and commissions
|
(a) |
Arrangement fee
: The Borrower shall pay to the Lender a non-refundable arrangement fee (the
"
Arrangement Fee
"
)
in the amount equal to one point two five per cent (1.25%) of the amount of the Commitment payable as follows:
|
(i) |
50% of the Arrangement Fee to be paid on the date hereof; and
|
(ii) |
50% of the Arrangement Fee to paid within sixty (60) days after the date hereof.
|
(b) |
Commitment Fee
: The Borrower shall pay to the Lender a commitment fee (the "
Commitment Fee
"), payable quarterly in arrears until the last day of the Drawdown Period on each of the dates falling at three (3) monthly intervals after the 20th May, 2016 until the last day of the Drawdown Period and on the last day of the Drawdown Period, computed from the 20th May, 2016 (in the case of the first payment of the Commitment Fee) and from the date of the preceding payment of the Commitment Fee (in the case of each subsequent payment) at the rate of zero point nine zero per cent (0.90%) per annum on the daily undrawn and un-cancelled amount of the Commitment, until the Drawdown Date or, as the case may be until the lapse of the Drawdown Period.
|
(c) |
Non-refundable
: The Arrangement Fee and the Commitment Fee shall be payable by the Borrower to the Lender whether or not any part of the Commitment is ever advanced (irrespective of utilisation/cancellation in part or in whole and/or Contract cancellation, non Delivery of the Vessel or sale of the Vessel prior to her Delivery to the Borrower) and shall be non-refundable.
|
5.2 |
Expenses
|
(a) |
Initial and Amendment expenses
: all expenses (including legal, printing and out-of-pocket expenses) reasonably incurred by the Lender in connection with the negotiation, preparation, execution and, where relevant, registration 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 8.6(a) (
Security shortfall-Additional security
), whether any such security shall in fact be constituted or not or the granting of any waiver or consent under, any of the Security Documents and the syndication of the Loan; and
|
(b) |
Enforcement expenses
: all expenses (including legal and out-of-pocket expenses) incurred by the Lender 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) |
Mortgagee's Interest costs
: reimburse the Lender on demand for any and all costs incurred by the Lender (as supported by vouchers/invoices ) in effecting and keeping effected on the basis of the Lender's open cover (a) a mortgagee's interest insurance which the Lender may at any time effect for an amount of 110% of the amount of the Loan at the Lender's wording or upon such terms as shall from time to time be determined by the Lender (herein
"
MII
"
)
and (b) a mortgagee's interest additional perils (pollution) insurance policy (herein
"
MAPI
"
)
for an amount of 110% of the amount of the Loan, of which the Lender may at any time effect on such terms, and with such insurers as shall from time to time be approved by the Lender,
provided however, that
the Lender shall in its absolute discretion appoint and instruct in respect of any such Mil and MAPI the insurance brokers in respect of such insurance and
provided, further, that
the Borrower shall pay on demand to the Lender the proportion of premium due in respect of the Vessel for which such insurance cover has been effected by the Lender, and any certificate of the Lender in respect of any such premium due by the Borrower (as supported by the necessary invoices/vouchers) shall (save for manifest error) be conclusive and binding upon the Borrower.
|
(d) |
Other expenses
: any and all other Expenses as defined in Clause 1.2 (
Definitions
).
|
(e) |
Legal costs
: the legal costs of the Lender'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 in respect of the registration of the Security Documents or any search or opinion given to the Lender in respect of the Security Parties or the Vessels or the Finance Documents. The said legal costs shall be due and payable as incurred.
|
5.3 |
Value Added Tax
|
5.4 |
Stamp and other duties
|
6. |
PAYMENTS AND TAXES; ACCOUNTS AND CALCULATIONS
|
6.1 |
No set-off or counterclaim
|
(a) |
The Borrower acknowledges that in performing its obligations under this Agreement, the Lender will be incurring liabilities to third parties in relation to the funding of amounts to the Borrower, such liabilities matching the liabilities of the Borrower to the Lender and that it is reasonable for the Lender to be entitled to receive payments from the Borrower gross on the due date in order that the Lender is put in a position to perform its matching obligations to the relevant third parties Accordingly, all payments to be made by the Borrower under this Agreement and/or any of the other Finance Documents shall be made in full, without any set-off or counterclaim whatsoever and, subject as provided in Clause 6.6 (
Gross-up
), free and clear of any deductions or withholdings or Governmental Withholdings whatsoever, in Dollars on the due date to the account of the Lender at such bank and in such place as the Lender may from time to time specify for that purpose, reference:
"
Eco SEVEN INC./Loan Agreement dated : [...] July, 2016
",
or to such other account at such other bank in such place as the Lender may from time to time specify for this purpose.
|
(b) |
If at any time it shall become unlawful or impracticable for the Borrower to make payment under this Agreement to the relevant account or bank referred to in Clause 6.1(a), the Borrower may request and the Lender may agree to alternative arrangements for the payment of the amounts due by the Borrower to the Lender under this Agreement or the other Finance Documents.
|
6.2 |
Payment by the Lender
|
6.3 |
Non-Banking Days
|
6.4 |
Calculations
|
6.5 |
Certificates conclusive
|
6.6 |
Gross-up
|
6.7 |
Loan account
|
7. |
REPRESENTATIONS AND WARRANTIES
|
7.1 |
Representations and warranties
|
(a) |
Due Incorporation/Valid Existence
: each of the Borrower and the other corporate Security Parties is duly incorporated and validly existing and in good standing under the laws of their respective countries of incorporation, and have power to own their respective property and assets, to carry on their respective business as the same are now being lawfully conducted and to purchase, own, finance and operate vessels, or, as the case may be, manage vessels, as well as to undertake the obligations which they have undertaken or shall undertake pursuant to the Finance Documents;
|
(b) |
Due Corporate Authority
: the Borrower and the other corporate Security Parties has power to execute, deliver and perform its obligations under the
|
(c) |
Binding obligations
: the Finance Documents and the Underlying Documents constitute (or upon their execution - and in the case of any Mortgage upon its registration at the Registry - will constitute) valid and legally binding obligations of the relevant Security Parties enforceable against the Borrower and the other Security Parties in accordance with their respective terms and that there are no other agreements or arrangements which may adversely affect or conflict with the Finance Documents or the security thereby created;
|
(d) |
No conflict with other obligations
: the execution and delivery of, the performance of their obligations under, and compliance with the provisions of, the Finance Documents and the Underlying Documents by the relevant Security Parties will not (i) contravene any existing applicable law, statute, rule or regulation or any judgment, decree or permit to which the Borrower or any other Security Party is subject, (ii) conflict with, or result in any breach of any of the terms of, or constitute a default under, any agreement or other instrument to which the Borrower or any other Security Party is a party or is subject or by which it or any of its property is bound, (iii) contravene or conflict with any provision of the constitutional documents of the Borrower or any other Security Party or (iv) result in the creation or imposition of or oblige the Borrower or any other Security Party to create any Encumbrance (other than a Permitted Encumbrance) on any of the undertakings, assets, rights or revenues of the Borrower or any other Security Party;
|
(e) |
No litigation
: no litigation or arbitration, tax claim or administrative proceeding (including action relating to any alleged or actual breach of the ISM Code and the ISPS Code) relating to sums exceeding Three hundred thousand Dollars ($300,000) involving a potential liability of the Borrower or any other Security Party is current or pending or (to its or its officers' knowledge) threatened against the Borrower or such other Security Party, which, if adversely determined, would have a material adverse effect on the
|
(f) |
No Notarisation/Filing/Recording
: to the best of the Borrower's knowledge, save for the registration of the Mortgage at the Registry, it is not necessary to ensure the legality, validity, enforceability or admissibility in evidence of any of the Finance Documents and the Underlying Documents that they or any other instrument be notarised, filed, recorded, registered or enrolled in any court, public office or elsewhere in any Relevant Jurisdiction or that any stamp, registration or similar tax or charge be paid in any Relevant Jurisdiction on or in relation to the Finance Documents and the Underlying Documents and each of the Finance Documents and the Underlying Documents is in proper form for its enforcement in the courts of each Relevant Jurisdiction;
|
(g) |
Choice of law
: to the best of the Borrower's knowledge, the choice of law agreed to govern this Agreement and/or any other Finance Document and the submission to the jurisdiction of the courts agreed in each of the Finance Documents are or will be, on execution of the respective Finance Documents, valid and binding on the Borrower and any other Security Party which is or is to be a party thereto;
|
(h) |
No immunity
: neither the Borrower nor any other Security Party nor any of their respective assets is 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 judgement, execution or other enforcement);
|
(i) |
Shipping Company
: each of the Borrower and the Managers is a shipping company involved in the owning or, as the case may be, managing of ships engaged in international voyages and earning profits in free foreign currency;
|
(j) |
Licences/Authorisation
: every consent, authorisation, license or approval of, or registration with or declaration to, governmental or public bodies or authorities or courts required by any Security Party to authorise, or required by any Security Party in connection with, the execution, delivery, validity, enforceability or admissibility in evidence of each of the Finance Documents and the Underlying Documents or the performance by each Security Party of its obligations under the Finance Documents and the Underlying Documents to which such Security Party is or is to be a party has been obtained or made and is in full force and effect and there has been no default in the observance of any of the conditions or restrictions (if any) imposed in, or in connection with, any of the same so far as the Borrower is aware;
|
(k) |
Perfected Securities
: when duly executed, the Finance Documents will create a perfected security interest in favour of the Lender, with the intended priority, over the assets and revenues intended to be covered, valid and enforceable against the Borrower and the other Security Parties;
|
(l) |
Sanctions
:
|
(i) |
Neither the Borrower nor any Security Party is a Prohibited Person nor is owned or controlled by, or acting directly or indirectly on behalf of or for the benefit of, a Prohibited Person and the Borrower does not own nor control a Prohibited Person; and
|
(ii) |
no proceeds of the Loan shall be made available, directly or indirectly, to or for the benefit of a Prohibited Person or otherwise shall be, directly or indirectly, applied in a manner or for a purpose prohibited by Applicable Sanctions.
|
(m) |
Direct obligations - Pari Passu
: the obligations of the Borrower under this Agreement are direct, general and unconditional obligations of the Borrower and rank at least pari passu with all other present and future unsecured and unsubordinated Financial Indebtedness of the Borrower (with the exception of any obligations which are mandatorily preferred by law and not by contract);
|
(n) |
No default under other Financial Indebtedness
: neither the Borrower nor any other Security Party is (nor would with the giving of notice or lapse of time or the satisfaction of any other condition or combination thereof be) in breach of or in default under any agreement relating to Financial Indebtedness to which it is a party or by which it may be bound;
|
(o) |
Information
: all information, accounts, statements of financial position, exhibits and reports furnished by or on behalf of any Security Party to the Lender in connection with the negotiation and preparation of this Agreement and each of the other Finance 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; to the best knowledge of the Directors/Officers or shareholders of the Borrower, 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 generally accepted accounting principles which have been consistently applied;
|
(p) |
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
|
(q) |
No Default
: no Default has occurred and is continuing;
|
(r) |
No Default under other Financial Indebtedness
: the Borrower has not been declared in default under any agreement relating to Financial Indebtedness to which it is a party or by which it may be bound;
|
(s) |
Ownership/Flag/Seaworthiness/Class/Insurance of the Vessel
: the Vessel will on the Drawdown Date be:
|
(i) |
in the absolute and free from Encumbrances (other than in favour of the Lender) ownership of the Owner, who is and will on and after the Drawdown Date be the sole legal and beneficial owner of the Vessel;
|
(ii) |
registered in the name of the Owner through the Registry under the laws and flag of the Flag State;
|
(iii) |
operationally seaworthy and in every way fit for service; and
|
(iv) |
classed with the Classification free of all notations, requirements and recommendations of the Classification Society;
|
(v) |
insured in accordance with the provisions of this Agreement and the Mortgage;
|
(vi) |
managed by the Managers; and
|
(vii) |
in full compliance with the ISM and the ISPS Code;
|
(t) |
Vessel's employment
: unless otherwise permitted in writing by the Lender, the Vessel is not and will not, on or before the Delivery Date, be subject to any charter or contract or to any agreement to enter into any charter or contract which, if entered into after the date of signing the Security Documents would have required the consent of the Lender and, on or before the Drawdown Date, there will not be any agreement or arrangement whereby the Earnings may be shared with any other person;
|
(u) |
Freedom from Encumbrances
: neither the Vessel, nor her Earnings, Insurances nor the Earnings Account nor any other properties or rights which are, or are to be, the subject of any of the Security Documents nor any part thereof will
|
(v) |
Compliance with Environmental Laws and Environmental Approvals
: except as may already have been disclosed by the Borrower in writing to, and acknowledged in writing by, the Lender:
|
(i) |
the Borrower, the Managers and their Related Companies and, to the best of the Borrower's knowledge and belief (having made due enquiry), their respective Environmental Affiliates have complied with the provisions of all Environmental Laws;
|
(ii) |
the Borrower, the Managers and their Related Companies and, to the best of the Borrower's knowledge and belief (having made due enquiry), their respective Environmental Affiliates have obtained all Environmental Approvals and are in compliance with all such Environmental Approvals; and
|
(iii) |
neither the Borrower nor the Managers (or either of them) nor, to the best of the Borrower's knowledge and belief (having made due enquiry), any of their respective Environmental Affiliates has received notice of any Environmental Claim that the Borrower or any other Relevant Party or any such Environmental Affiliate is not in compliance with any Environmental Law or any Environmental Approval;
|
(w) |
No Environmental Claims
: except as may already have been disclosed by the Borrower in writing to, and acknowledged in writing by, the Lender:
|
(i) |
there is no Environmental Claim pending or, to the best of the Borrower's knowledge and belief, threatened against the Owner or the Vessel or their respective Environmental Affiliates/Related Companies or any other Relevant Ship; and
|
(ii) |
there has been no emission, spill, release or discharge of a Material of Environmental Concern from the Vessel or any other Relevant Ship or any vessel owned by, managed or crewed by or chartered to the Owner which could give rise to an Environmental Claim,
|
(x) |
No potential Environmental Claims
: except as may already have been disclosed by the Borrower in writing to, and acknowledged in writing by, the Lender, there has been no emission, spill, release or discharge of a Material of Environmental Concern from the Vessel which could give rise to an Environmental Claim;
|
(y) |
No material adverse change
: there has been no material adverse change in the financial position of the Borrower or the Group from that described by the Borrower to the Lender in the negotiation of this Agreement;
|
(z) |
Originals and copies true and complete
: the copies of each of the Underlying Documents delivered or to be delivered to the Lender pursuant to Clause 9.1 (
Documents and evidence
) are, or will when delivered be, true and complete copies of such documents; each such document will when delivered constitute valid and binding obligations of the parties thereto enforceable in accordance with its terms and there will have been no amendments or variations thereof or defaults thereunder;
|
(aa) |
Compliance with the ISM code
: the Vessel will comply on the Drawdown Date and the Operator complies with the requirements of the ISM Code and the SMC which has been or, as the case may be, shall be issued in respect of the Vessel and shall remain valid on the Drawdown Date and thereafter throughout the Security Period;
|
(bb) |
Compliance with ISPS Code
: the Owner has a valid and current ISSC in respect of the Vessel and is in full compliance with the ISPS Code;
|
(cc) |
FATCA
: Neither the Borrower nor any Security Party is a FATCA FFI or a US Tax Obligor;
|
(dd) |
Shareholding
: the shares in each of the Borrower and the Corporate Guarantor are legally and ultimately beneficially owned by such person or persons as disclosed to and approved by the Lender in the negotiation of this Agreement,
|
(ee) |
Taxes paid
: the Owner has paid all taxes applicable to, or imposed on or in relation to itself, its business or the Vessel;
|
(ff) |
Contract Valid
: the copy of the Contract delivered to the Lender concerning the purchase of the Vessel is a true and complete copy of such document constituting valid and binding obligations of the parties thereto enforceable in accordance with its terms and no amendments thereto or variations thereof will be agreed nor will any action be taken by the parties thereto which would in any way render such document inoperative or unenforceable;
|
(gg) |
No Rebates
: there are and there will be no commissions, rebates, premiums or other payments by or to or on account of the Borrower, any other Security Party or, to the knowledge of the Borrower, any other person in connection with the Contract other than as disclosed to the Lender by the Borrower in writing.
|
7.2 |
Money laundering - acting for own account
|
7.3 |
Representations Correct
|
7.4 |
Repetition of Representations and Warranties.
|
8. |
UNDERTAKINGS
|
8.1 |
General
|
(a) |
Notice on adverse change or Default
: immediately inform the Lender upon becoming aware of any occurrence which might adversely affect the ability of any Security Party to perform its obligations under any of the Finance
|
(b) |
Consents and licenses
: without prejudice to Clause 7 (
Representations and warranties
) and Clause 9 (
Conditions precedent
), 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, license 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 Finance Documents;
|
(c) |
Use of Loan proceeds
: use the Loan exclusively for the purposes specified in Clause 1.1 (
Amount and Purpose
);
|
(d) |
Pari passu
: ensure that its obligations under this Agreement shall, without prejudice to the provisions of this Clause 8.1, at all times rank at least pari passu with all its other present and future unsecured and unsubordinated Financial Indebtedness with the exception of any obligations which are mandatorily preferred by law and not by contract;
|
(e) |
Financial statements-Compliance Certificate
:
|
(i) |
as soon as possible but not later than 180 days after the end of each Financial Year furnish the Lender with annual audited financial statements of the Borrower and the Corporate Guarantor prepared in accordance with generally accepted accounting principles consistently applied, such obligation to commence in the case of:
|
a) |
the Borrower with the Financial Year ending 31
st
December, 2017;
|
b) |
the Corporate Guarantor with the financial year ending 31
st
December, 2017; and
|
c) |
Top Ships with the financial year ending 31
st
December, 2016;
|
(ii) |
(in the case of Clause 16.11 (
Special provisions
) only) as soon as possible, but in no event later than 90 days after the end of each fiscal semester of Top Ships, unaudited semi-annual consolidated interim financial statements of Top Ships Group;
|
(iii) |
(in the case of Clause 16.11 (
Special provisions
) only) simultaneously with each of the audited financial statements and un-audited financial statements to be sent to the Lender under paragraphs (i) and (ii) of this Clause 8.1(e), they will sent to the Lender a Compliance Certificate, duly completed and supported by calculations setting out in reasonable detail the materials underling the statements made in such Compliance Certificate;
|
(f) |
Provision of further information
: promptly, when requested, provide the Lender with such financial and other information and accounts relating to the business, undertaking, assets, liabilities, revenues, financial condition or affairs of any Security Party and such other further general information relating to any Security Party as the Lender from time to time may reasonably require;
|
(g) |
Financial Information
: provide the Lender from time to time as the Lender may reasonably request with information on all major financial developments of the Borrower and the Group, such as sales and/or purchases of vessels, new loans, refinancing restructuring of existing loans, contracts for term employments of vessels within the group of companies owned and/or controlled by the same persons who own/control the Borrower, the financial condition, actual and projected for the following 12 month period, cash flow position, commitments and operations of the Borrower including cash flow analysis and voyage accounts of the Vessel with a breakdown of income and running expenses showing net trading profit, trade payables and trade receivables such financial details to be certified by an authorized signatory of the Borrower as to their correctness;
|
(h) |
Information on the employment of the Vessel
: provide the Lender from time to time as the Lender may request with information on the employment of the Vessel, as well as on the terms and conditions of any charterparty, contract of affreightment, agreement or related document in respect of the employment of the Vessel; such information to be certified by one of the directors of the Borrower as to their correctness;
|
(i) |
Banking operations
: ensure that all banking operations in connection with the Vessel are carried out through the Lending Office of the Lender;
|
(j) |
Liquidity
: to place latest on Drawdown Date in the Earnings Account and maintain throughout the Security Period minimum liquidity in an amount not less than Five hundred thousand Dollars ($500,000);
|
(k) |
Legal title
: hold the legal title to, and own the entire beneficial interest in the Vessel, its Insurances and Earnings, free from all Encumbrances and other
|
(l) |
Subordination
: ensure that all Financial Indebtedness of the Borrower to its shareholders, or to any of its Related Companies is fully subordinated to the rights of the Lender under the Finance Documents, in a form acceptable to the Lender, and to subordinate to the rights of the Lender under the Finance Documents any Financial Indebtedness issued to it by its shareholders, or to any of its Related Companies, in a form acceptable to the Lender;
|
(m) |
Obligations under Finance Documents
: duly and punctually perform each of the obligations expressed to be assumed by it under the Finance Documents to which it is a party;
|
(n) |
Payment on demand
: pay to the Lender on demand any sum of money which is payable by the Borrower to the Lender under this Agreement but in respect of which it is not specified in any other Clause when it is due and payable;
|
(o) |
Compliance with Laws and Regulations
: to comply, or procure compliance with all laws or regulations relating to the Borrower and/or the Vessel, its ownership, operation and management or to the business of the Borrower and cause this Agreement and the other Finance Documents to comply with and satisfy all the requirements and formalities established by the applicable laws to perfect this Agreement and the other Finance Documents as valid and enforceable Finance Documents;
|
(p) |
Compliance with ISM Code
: procure that each Manager and any Operator:
|
(i) |
will comply with and ensure that the Vessel and any Operator by no later than the Drawdown Date complies with the requirements of the ISM Code, including (but not limited to) the maintenance and renewal of valid certificates pursuant thereto throughout the Security Period;
|
(ii) |
immediately inform the Lender if there is any threatened or actual withdrawal of the Borrower's, either Manager's or an Operator's DOC or the SMC in respect of the Vessel; and
|
(iii) |
promptly inform the Lender upon the issue to the Borrower, either Manager or any Operator of a DOC and to the Vessel of an SMC or the receipt by the Borrower, the Managers (or either of them) or any Operator of notification that its application for the same has been realised;
|
(q) |
Compliance with ISPS Code
: procure that each Manager or any Operator will:
|
(i) |
maintain at all times a valid and current ISSC in respect of the Vessel;
|
(ii) |
immediately notify the Lender in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC in respect of the Vessel; and
|
(iii) |
procure that the Vessel will comply at all times with the ISPS Code in every respect;
|
(r) |
Maintenance of Encumbrances
:
|
(i) |
at its own cost, do all that it reasonably can to ensure that any Finance Document validly creates the obligations and the Encumbrances which it purports to create; and
|
(ii) |
without limiting the generality of paragraph (i) above, at its own cost, promptly register, file, record or enrol any Finance Document with any court or authority in all Relevant Jurisdictions, pay any stamp, registration or similar tax in all Relevant Jurisdictions in respect of any Finance Document, give any notice or take any other step which may be 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 Encumbrance which it creates;
|
(s) |
Inspections/Surveys
: at any time that the Lender might consider to be necessary or useful, have the Vessel (following its Delivery) inspected and/or surveyed at the expense of the Borrower by surveyors and/or inspectors appointed by the Lender and the Borrower hereby duly authorises the Lender to review the insurance and operating records of the Borrower,
provided that
all such inspections and surveys will not interfere with the smooth operation of the Vessel;
|
(t) |
Notification of litigation
: provide the Lender with details of any legal or administrative action involving the Borrower, any Security Party, the Managers, the Vessel, her Earnings or her Insurances as soon as such action is instituted or it becomes apparent to the Borrower that it is likely to be instituted, unless it is clear that the legal or administrative action cannot be considered material in the context of any Finance Document.
|
(u) |
Principal place of business
: maintain its place of business, and keep corporate documents and records, at the address notified to the Lender at the negotiation of this Agreement and will not establish, or do anything as a
|
(v) |
Compliance with Covenants
: duly and punctually perform all obligations under this Agreement and the other Finance Documents; and
|
(w) |
Application of FATCA
: procure that, unless otherwise agreed by the Lender, no Security Party shall become a FATCA FFI or a US Tax Obligor.
|
8.2 |
Negative undertakings
|
(a) |
Negative pledge
:
|
(a) |
cease to hold the legal title to the Vessel, its Insurances and Earnings, free from all Encumbrances and other interests and rights of every kind, except for those created by the Finance Documents and the effect of the assignments contained in the General Assignment and any other Finance Documents; and
|
(b) |
permit any Encumbrance (other than a Permitted Encumbrance) to subsist, arise or be created or extended over all or any part of its present or future undertakings, assets, rights or revenues to secure or prefer any present or future Financial Indebtedness or other liability or obligation of the Borrower or any other person;
|
(b) |
No further Financial Indebtedness
: incur any further Financial Indebtedness nor authorise or accept any capital commitments (other than those normally associated with the day to day operations of the Vessel) nor enter into any agreement for payment on deferred terms or hire agreement;
|
(c) |
No merger
: merge or consolidate with any other person;
|
(d) |
No Disposals
:
|
(i) |
sell, transfer, abandon, lend, lease or otherwise dispose of or cease to exercise direct control over any part (being, either alone or when aggregated with all other disposals falling to be taken into account pursuant to this Clause 8.2(d), material in the opinion of the Lender in
|
(ii) |
transfer, lease or otherwise dispose of 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;
|
(e) |
No other business
: undertake any type of business other than the ownership and operation of the Vessel and the chartering of the Vessel to third parties;
|
(f) |
No investments
: make any investments in any person, asset, firm, corporation, joint venture or other entity;
|
(g) |
No acquisitions
: acquire any further assets other than the Vessel and rights arising under contracts entered into by or on behalf of the Borrower in the ordinary course of its business of owning, operating and chartering the Vessel;
|
(h) |
No other obligations
: incur any liability or obligations except liabilities and obligations arising under the Finance Documents or contracts entered into in the ordinary course of its business of owning, operating and chartering the Vessel (and for the purposes of this Clause 8.2(g) fees to be paid pursuant to the Management Agreements (or either of them) in respect of the Vessel shall be considered as permitted obligations under the Finance Documents);
|
(i) |
No borrowing
: incur any Borrowed Money except for Borrowed Money pursuant to the Finance Documents;
|
(j) |
No repayment of borrowings
: repay the principal of, or pay interest on or any other sum in connection with, any of its Borrowed Money except for Borrowed Money pursuant to the Finance Documents;
|
(k) |
No Payments
: except pursuant to this Agreement and the other Finance Documents (and then only to the extent expressly permitted by the same) pay out any funds (whether out of the Earnings or out of moneys collected under the General Assignment and/or the other Finance Documents or not) to any company or person except in connection with its administration and the operation, management and/or repair of the Vessel;
|
(l) |
No guarantees
: issue any guarantees or indemnities or otherwise become directly or contingently liable for the obligations of any person, firm, or corporation except pursuant to the Finance Documents and except for, in the
|
(m) |
No Loans
: make any loans or advances to, or any investments in any person, firm, corporation, joint venture or other entity including (without limitation) any loan or advance or grant any credit (save for normal trade credit in the ordinary course of business) to any officer, director, stockholder or employee or any other company managed by the Managers (or either of them) directly or through the Managers (or either of them) or agree to do so;
|
(n) |
No securities
: permit any Financial Indebtedness of the Borrower to any person (other than the Lender) to be guaranteed by any person (save, in the case of the Borrower, for guarantees or indemnities from time to time required in the ordinary course by any protection and indemnity or war risks association with which the Vessel is entered, guarantees required to procure the release of the Vessel from any arrest, detention, attachment or levy or guarantees or undertakings required for the salvage of the Vessel);
|
(o) |
No distributions
: declare or pay any dividends or distribute any of its present or future assets, undertakings, rights or revenues (which are all assigned to the Lender) to any of its shareholders without the prior written consent of the Lender;
|
(p) |
No subsidiaries
: form or acquire any Subsidiaries;
|
(q) |
Maintenance of Business Structure
: change the nature, organisation and conduct of the business of the Borrower as owner of the Vessel or the Managers (or either of them) as manager(s) of vessels, as the case may be, or carry on any business other than the business carried on at the date of this Agreement;
|
(r) |
Maintenance of Legal Structure
: permit that any of the documents defining the constitution of the Borrower and the Corporate Guarantor shall be materially (in the Lender's opinion) altered in any manner whatsoever;
|
(s) |
No Encumbrance of Assets
: allow any part of its undertaking, property, assets or rights, whether present or future, to be mortgaged, charged, pledged, used as a lien or otherwise encumbered without the prior written consent of the Lender; and
|
(t) |
Control
: ensure that no change shall be made directly or indirectly in the ownership, beneficial ownership, control or management of the Borrower
|
8.3 |
Undertakings concerning the Vessel
|
(a) |
Conveyance on default
: where the Vessel is (or is to be) sold in exercise of any power conferred on the Lender, execute, forthwith upon request by the Lender, such form of conveyance of the Vessel as the Lender may reasonably require;
|
(b) |
Mortgage
: execute, and procure the registration of, the Mortgage over the Vessel under the laws and flag of the Flag State immediately upon drawdown of the Loan;
|
(c) |
Ownership/Management/Control
: ensure that the Vessel is registered on the Drawdown Date in the ownership of the Borrower under the laws of the Flag State and thereafter ensure that the Vessel will maintain her present ownership, management, control and beneficial ownership (save in the case of Clause 8.2(t));
|
(d) |
Class
: ensure that the Vessel will remain in class free of recommendations or average damage affecting class or permitted by the Classification Society and provide the Lender on demand with copies of all class and trading certificates of the Vessel;
|
(e) |
Insurances
: ensure that all Insurances of the Vessel are maintained and comply with all insurance requirements specified in this Agreement and in the Mortgage and in case of failure to maintain the Vessel so insured, authorise the Lender (and such authorisation is hereby expressly given to the
|
(f) |
Transfer/Encumbrances
: not without the prior written consent of the Lender sell or otherwise dispose of the Vessel or any share therein or create or agree to create or permit to subsist arty Encumbrance over the Vessel (or any share or interest therein) other than Permitted Encumbrances;
|
(g) |
Not imperil Flag, Ownership, Insurances
: ensure that the Vessel is maintained and trades in conformity with the laws of the Flag State, of its owning company or of the nationality of the officers, the requirements of the Insurances and nothing is done or permitted to be done which could endanger the flag of the Vessel or its unencumbered (other than Encumbrances in favour of the Lender and Encumbrances permitted by this Agreement) ownership or its Insurances;
|
(h) |
Mortgage Covenants
: always comply with all the covenants provided for in the Mortgage;
|
(i) |
Assignment of Earnings
: not assign or agree to assign otherwise than to the Lender the Earnings or any part thereof.
|
(j) |
Sharing of Earnings
:
|
(aa) |
not enter into any agreement or arrangement for the sharing of any Earnings;
|
(bb) |
not 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 any Earnings; or
|
(cc) |
not enter into any agreement or arrangement for the release of, or adverse alteration to, any guarantee or Encumbrance relating to any Earnings;
|
(k) |
Chartering
: ensure and procure that in the event of the Vessel being employed under a Charterparty, (i) the Borrower shall execute and deliver to the Lender within seven (7) days of signing thereof a Charterparty Assignment in favour of the Lender and a notice of any such assignment addressed to the relevant charterer and use its best endeavours to provide an acknowledgement of receipt by the relevant charterer, all in form and substance satisfactory to the Lender;
|
(l) |
Compliance with Environmental Laws
: comply with, and procure that all Environmental Affiliates of any Relevant Party comply with, all Environmental Laws including without limitation, requirements relating to manning and establishment of financial responsibility and to obtain and comply with, and procure that all Environmental Affiliates of such Relevant Party obtain and comply with, all Environmental Approvals and to notify the Lender forthwith:
|
(aa) |
of any Environmental Claim for an amount or amounts in aggregate exceeding Three hundred thousand Dollars ($300,000) made against the Vessel, any Relevant Ship and/or her respective owner; and
|
(bb) |
upon becoming aware of any incident which may give rise to an Environmental Claim and to keep the Lender advised in writing of the Borrower's response to such Environmental Claim on such regular basis and in such detail as the Lender shall require;
|
(m) |
Vessel's Inspection
: permit the Lender by surveyors or other persons appointed by the Lender to board the Vessel at all reasonable times and without interruption to the schedule of the Vessel for the purpose of inspecting her condition and to afford all proper facilities for such inspection and the cost of such inspections shall be borne by the Borrower;
|
(n) |
Management
: ensure and procure that the Vessel is managed by the Managers;
|
(o) |
Trading
: as long as any amounts are owing under this Agreement to use the Vessel only as a civil merchant trading vessel; and
|
(p) |
War Risk Insurance cover
: in the event of hostilities in any part of the world (whether war is declared or not), not cause or permit the Vessel to enter or trade to any zone which is declared a war zone by any government or by the Vessel'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.
|
8.4 |
Negative undertakings in respect of the Vessel.
The Borrower hereby further undertakes and agrees with Bank that it will not without the prior written consent of the Lender (such consent not to be unreasonably withheld):
|
(a) |
Chartering
: let or agree to let the Vessel (other than under the Stena Charterparty):
|
(i) |
on demise or bareboat charter for any period; or
|
(ii) |
by any time or consecutive voyage charter for a term which exceeds or which by virtue of any optional extensions therein contained may exceed twelve (12)
months' duration;
|
(iii) |
or on terms whereby more than two months' hire (or the equivalent) is payable in advance; or
|
(iv) |
charter the Vessel otherwise than on bona fide arm's length terms at the time when the Vessel is fixed; or
|
(v) |
under any pooling or sharing agreement in respect thereof on terms whereby any and all the Earnings of the Vessel are pooled or shared with any other person;
|
(b) |
Manager
: appoint a manager of the Vessel (other than the Managers) or terminate or materially amend the terms of the Management Agreements (or either of them);
|
(c) |
No sharing agreement
: not enter into any agreement or arrangement for sharing or pooling the Earnings of the Vessel without the Lender's consent; and
|
(d) |
No Freight Derivatives
: not enter into any freight derivatives or any other instruments which have the effect of hedging forward exposures to freight derivatives.
|
8.5 |
Validity of Securities - Earnings - Taxes etc.
|
(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 Finance Documents are maintained in full force and effect and/or appropriately taken;
|
(b) |
Earnings
: ensure and procure that, unless and until directed by the Lender otherwise (i) all the Earnings of the Vessel shall be paid to the relevant Earnings Account and (ii) the persons from whom the Earnings are from time to time due are irrevocably instructed to pay them to the said Earnings Account or to such account in the name of the Borrower as shall be from time to time determined by the
Lender 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;
|
(d) |
Manager
: not without the prior written consent of the Lender, such consent not to be unreasonably withheld, (and then only subject to such conditions as the Lender may impose) appoint a new manager of the Vessel other than the Managers;
|
(e) |
Additional Documents
: from time to time at the request of the Lender execute and deliver to the Lender or procure the execution and delivery to the Lender of all such documents as shall be deemed desirable at the reasonable discretion of the Lender for giving full effect to this Agreement, and for perfecting, protecting the value of or enforcing any rights or securities granted to the Lender under any one or more of the provisions of this Agreement, the other Finance Documents and any other documents executed pursuant hereto or thereto and in case that any conditions precedent (with the Lender's consent) have not been fulfilled prior to the Drawdown Date, such conditions shall be complied with within five (5) Banking Days after the Lender's written request (unless the Lender agrees otherwise in writing) and failure to comply with this covenant shall be an Event of Default.
|
8.6 |
Security cover - Valuation of Vessel
|
(a) |
Security shortfall- Additional security
: If at any time during the Security Period, the Security Value shall be less than the Security Requirement, the Lender may give notice to the Borrower requiring that such deficiency be remedied and then the Borrower shall either:
|
(i) |
prepay in accordance with Clause 4.2 (
Voluntary prepayment
) (but without regard to the requirement for five (5) days notice) within a period of thirty (30) days of the date of receipt by the Borrower of the Lender's said notice such sum in Dollars as will result in the Security Requirement after such prepayment (taking into account any other repayment of the Loan made or to be made between the date of the notice and the date of such prepayment) being at least equal to the Security Value; or
|
(ii) |
within thirty (30) days of the date of receipt by the Borrower of the Lender's said notice constitute to the satisfaction of the Lender such further security for the Loan as shall be acceptable to the Lender having a value for security purposes (as determined by the Lender its absolute discretion) at the date upon which such further security
|
(A) |
additional pledged cash deposits in favour of the Lender in an amount equal to such shortfall with the Lender and in an account and manner to be determined by the Lender; and/or
|
(B) |
any other security acceptable to the Lender at its absolute discretion to be provided in a manner determined by the Lender.
|
(b) |
Valuation of Vessel
: The Vessel shall, for the purposes of this Clause 8.6, be valued in Dollars (at least once a year) as and when the Lender shall reasonably require by an Approved Shipbroker appointed by the Lender in its sole discretion (such valuations to be made without, unless required by the Lender, physical inspection, and on the basis of a sale for prompt delivery for cash at arms length on normal commercial terms as between a willing buyer and a willing seller, without taking into account the benefit of any charterparty or other engagement concerning the Vessel). The Lender and the Borrower agree to accept such valuation made by the Approved Shipbroker appointed as aforesaid as conclusive evidence of the Market Value of the Vessel at the date of such valuation and such valuation shall constitute the Market Value of the Vessel for the purposes of this Clause 8.6;
Provided that
if the Borrower does not agree with the results of the valuation obtained by the Lender, it may, in its discretion and at its expense: (i) select and appoint a second Approved Shipbroker to prepare a second valuation to be addressed to the Lender and otherwise prepared in accordance with this Clause; and (ii) if the difference between the 2 valuations obtained at any time pursuant to this Clause is greater than $500,000, the Lender shall select and appoint a third Approved Shipbroker to make a third valuation, also to be addressed to the Lender and otherwise prepared in accordance with this Clause and, subject to the Lender receiving the second and (if applicable) the third such valuation within 10 days of the date of issue of the first valuation, the Market Value of the Ship in such circumstances shall be the average of the initial valuation and the valuation(s) provided by the second and (if applicable) the third Approved Shipbroker.
|
(b) |
Valuation binding
: The value of the Vessel determined in accordance with the provisions of this Clause 8.6 shall be binding upon the Borrower and the Lender until such time as any further such valuations shall be obtained.
|
(c) |
Information
: The Borrower undertakes to the Lender to supply to the Lender and to any such Approved Shipbroker such information concerning the Vessel and its condition as such Approved Shipbroker may reasonably require for the purpose of making any such valuation.
|
(d) |
Costs
: All costs in connection with the Lender obtaining a valuation of the Vessel referred to in Clause 8.6(b) (
Valuation of Vessel
) once a year and any and all valuations obtained after an Event of Default having occurred and being continuing, and any valuation of any additional security for the purposes of ascertaining the Security Value at any time or necessitated by the Borrower electing to constitute additional security pursuant to Clause 8.6(a)(ii), and all legal and other expenses incurred by the Lender in connection with any matter arising out of this Clause 8.6 shall be borne by the Borrower.
|
(e) |
Valuation of additional security
: For the purpose of this Clause 8.6, the market value of any additional security provided or to be provided to the Lender shall be determined by the Lender in its absolute discretion without any necessity for the Lender assigning any reason thereto and if such security consists of a vessel, its market value shall be that shown by a valuation complying with the requirements of Clause 8.6(b) (
Valuation of Vessel
)
(whereas the costs shall be borne by the Borrower in accordance with Clause 8.6(e) (
Costs
)) or if the additional security is in the form of a cash deposit full credit shall be given for such cash deposit on a Dollar for Dollar basis.
|
(f) |
Documents and evidence
: In connection with any additional security provided in accordance with this Clause 8.6, the Lender shall be entitled to receive such evidence and documents of the kind referred to in Schedule 2, Part 1 (
Conditions precedent required in relation to the signing of this Agreement
) as may in the Lender's opinion be appropriate and such favourable legal opinions as the Lender shall in its absolute discretion require.
|
8.7 |
Sanctions The Borrower shall:
|
(a) |
ensure that the Vessel will not be employed, and will not suffer the Vessel be employed, and will not and will ensure that the Borrower does not conduct or undertake any business:
|
(i) |
in breach of any embargo or sanction or prohibited order (or any similar order or directive) of:
|
(ii) |
the United Nations Security Council;
|
(iii) |
the European Union;
|
(iv) |
the United Kingdom;
|
(v) |
the United States of America;
|
(vi) |
the Flag State;
|
(vii) |
any state of which any officer or crew member of the Vessel is a national as they apply to their members or nationals; or
|
(b) |
in any trade, carriage of goods or business which is forbidden by the laws of the United Kingdom or the European Union or the United States of America or the Flag State as they apply to their members or nationals, or any law applicable to the Borrower, the Managers, any charterer of the Vessel or any country which the Vessel may visit; or
|
(c) |
in carrying illicit or prohibited goods; or
|
(d) |
in a way which may make it liable to be condemned by a prize court or destroyed, seized or confiscated; or
|
(e) |
in any manner contrary to any law or regulation in any relevant jurisdiction including but not limited to the any Applicable Sanctions; or
|
(f) |
generally, comply, or procure compliance with any Applicable Sanctions.
|
8.8 |
Covenants for the Securities Parties
|
8.9 |
No security or lien from other person
|
8.10 |
Stock-holding
|
8.11 |
Know your customer and money laundering compliance
|
9. |
CONDITIONS
|
9.1 |
Documents and evidence
|
9.2 |
General conditions precedent
|
(a) |
The obligation of the Lender to make the Commitment available shall be subject to the further conditions that, at the time of the giving of the Drawdown Notice in respect thereof and at the time of the making of the Commitment:
|
(b) |
the representations and warranties contained in Clause 7.1 (
Representations and warranties
), and as may be repeated in Clause 7.4 (
Repetition of representations and warranties
) are true and correct on and as of each such time as if each was made with respect to the facts and circumstances existing at such time; and
|
(c) |
no Default shall have occurred and be continuing or would result from the making of the Commitment.
|
9.3 |
Waiver of conditions precedent
|
9.4 |
Further conditions precedent
|
10. |
EVENTS OF DEFAULT
|
10.1 |
Events
|
(a) |
Non-payment
: any Security Party fails to pay any sum payable by it under any of the Finance Documents at the time, in the currency and in the manner stipulated in the Security Documents (and, for this purpose, sums payable on demand shall be treated as having been paid at the stipulated time if paid within three (3) Banking Days of demand); or
|
(b) |
Breach of Insurance and certain other obligations
: the Borrower fails to obtain and/or maintain the Insurances (in accordance with the requirements of the Security Documents) or if any insurer in respect of such Insurances cancels the Insurances or disclaims liability by reason, in either case, of misstatement in any proposal for the Insurances or for any other failure or default on the part the Borrower (unless the Borrower at the time arranges and has fully in place insurance covenants satisfying the terms of this Agreement and the terms of
|
(c) |
Breach of other obligations
: any Security Party commits any breach of or omits to observe any of its obligations or undertakings expressed to be assumed by it under any of the Finance Documents or any of the Underlying Documents (other than those referred to in Clauses 10.1(a) (
Non payment
) and Clause 10.1(b) (
Breach of Insurance and certain other obligations
)) and, in respect of any such breach or omission which in the opinion of the Lender is capable of remedy, such action as the Lender may require shall not have been taken within five (5) Banking Days of the Lender notifying the relevant Security Party of such default and of such required action; or
|
(d) |
Misrepresentation
: any representation or warranty made or deemed to be made or repeated by or in respect of any Security Party in or pursuant to any of the Finance Documents or any of the Underlying Documents or in any notice, certificate or statement referred to in or delivered under any of the Security Documents or any of the Underlying Documents is or proves to have been incorrect or misleading in any material respect; or
|
(e) |
Cross-default
: any Financial Indebtedness of the Borrower or any other member of the Group in excess of $500,000 is not paid when due or any Financial Indebtedness of the Borrower 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 Borrower or such other member of the Group of a voluntary right of prepayment) or any creditor of the Borrower 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 the Borrower or such 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 Borrower or such other member of the Group shall have satisfied the Lender that such withdrawal, suspension or cancellation will not affect or prejudice in any way such party's ability to pay its debts as they fall due and fund its commitments, or any guarantee given by
|
(f) |
Legal process
: any judgment or order made or commenced in good faith by a person against any of the Security Parties relating to an amount over $500,000 is not stayed or complied with within fifteen (15) days or a good faith creditor attaches or takes possession of, or a distress, execution, sequestration or other bone fide process is levied or enforced upon or sued out against, any of the undertakings, assets, rights or revenues of any Security Party and is not discharged within fifteen (15) days; or
|
(g) |
Insolvency
: any Security Party is unable or admits inability to pay its debts as they fall due; suspends making payments on any of its debts or announces an intention to do so; becomes insolvent; has assets the value of which is less than the value of its liabilities (taking into account contingent and prospective liabilities); or suffers the declaration of a moratorium in respect of any of its Financial Indebtedness; or
|
(h) |
Reduction or loss of capital
: a meeting is convened by any corporate Security Party for the purpose of passing any resolution to purchase, reduce or redeem any of its share capital (excluding, in the case of Top Ships, share buybacks or return of capital as a dividend ); or
|
(i) |
Winding up
: any corporate action, legal proceedings or other procedure or step is taken for the purpose of winding up any corporate Security Party or an order is made or resolution passed for the winding up of any Security Party or a notice is issued convening a meeting for the purpose of passing any such resolution; or
|
(j) |
Administration
: any petition is presented, notice given or other step is taken for the purpose of the appointment of an administrator of any corporate Security Party or the Lender reasonably believes that any such petition or other step is imminent or an administration order is made in relation to any corporate Security Party; or
|
(k) |
Appointment of receivers and managers
: any administrative or other receiver is appointed of any Security Party or any part of its assets and/or undertaking any other steps are taken to enforce any Encumbrance over all or any part of the assets of any Security Party; or
|
(l) |
Compositions
: any corporate action, legal proceedings or other procedures or steps are taken, or negotiations commenced, by any Security Party or by any of its creditors with a view to the general readjustment or rescheduling of all or part of its indebtedness (save in the case of Top Ships of rescheduling of all or part of its unsecured indebtedness), or to proposing any kind of composition, compromise or arrangement involving such company and any of its creditors
provided however that
if the Borrower is able to provide evidence satisfactory in all respect to the Lender, that not withstanding such readjustment or rescheduling, composition, compromise or arrangement, it will still, in the Lender's sole opinion, be able to satisfy its permanent obligations as they fall due, the same shall not constitute an event of default; or
|
(m) |
Analogous proceedings
: there occurs, in relation to any Security Party, in any country or territory in which any of them carries on business or to the jurisdiction of whose courts any part of their respective assets is subject, any event which, in the reasonable opinion of the Lender, appears in that country or territory to correspond with, or have an effect equivalent or similar to, any of those mentioned in Clause 10.1(f) (
Legal process
) to Clause 10.1(1) (
Compositions
)
(inclusive) or any Security Party otherwise becomes subject, in any such country or territory, to the operation of any law relating to insolvency, bankruptcy or liquidation; or
|
(n) |
Cessation of business
: any Security Party suspends or ceases or threatens to suspend or cease to carry on its business; or
|
(o) |
Seizure
: all or a material part of the undertaking, assets, rights or revenues of, or shares or other ownership interests in, any Security Party are seized, nationalised, expropriated or compulsorily acquired by or under the authority of any government; or
|
(p) |
Invalidity
: any of the Security Documents shall at any time and for any reason become invalid or unenforceable or otherwise cease to remain in full force and effect, or if the validity or enforceability of any of the Security Documents shall at any time and for any reason be contested by any Security Party which is a party thereto, or if any such Security Party shall deny that it has any, or any further, liability thereunder; or
|
(q) |
Unlawfulness
: it becomes impossible or unlawful at any time for any Security Party, to fulfil any of the covenants and obligations expressed to be assumed by it in any of the Security Documents or for the Lender to exercise the rights or any of them vested in it under any of the Security Documents or otherwise; or
|
(r) |
Repudiation
: any Security Party repudiates any of the Security Documents or does or causes or permits to be done any act or thing evidencing an intention to repudiate any of the Security Documents; or
|
(s) |
Encumbrances enforceable
: any Encumbrance (other than Permitted Liens) in respect of any of the property (or part thereof) which is the subject of any of the Security Documents becomes enforceable; or
|
(t) |
Material adverse change
: there occurs, in the opinion of the Lender, a material adverse change in the financial condition of any Security Party from the financial and other information disclosed by the Borrower to the Lender in the negotiation of this Agreement, which might, in the opinion of the Lender, materially impair the ability of such Security Party to perform their respective obligations under this Agreement and the Finance Documents to which is or is to be a party; or
|
(u) |
Arrest
: the Vessel is arrested, confiscated, seized, taken in execution, impounded, forfeited, detained in exercise or purported exercise of any possessory lien or other claim or otherwise taken from the possession of the Owner (other than in circumstances covered by the definition of Total Loss) and the Owner shall fail to procure the release of the Vessel within a period of thirty (30) days thereafter; or
|
(v) |
Registration
: the registration of the Vessel under the laws and flag of the Flag State is cancelled or terminated without the prior written consent of the Lender or, if the Vessel is only provisionally registered on the Delivery Date, the Vessel is not permanently registered under the laws and flag of the Flag State within three (3) months of the Delivery Date, or if such registration of the Vessel is not renewed at least within fifteen (15) days prior to the expiry of such registration; or
|
(w) |
Unrest
: the Flag State of the Vessel becomes involved in hostilities or civil war or there is a seizure of power in such Flag State by unconstitutional means if, in any such case, such event could in the opinion of the Lender reasonably be expected to have a material adverse effect on the security constituted by any of the Security Documents and the Owner fails to register the Vessel at a flag acceptable to the Lender upon the Lender's request within the period prescribed in such request; or
|
(x) |
Mortgage contested
: the registration of the Mortgage is contested or becomes void or voidable or liable to cancellation or termination, or if the validity or priority of the Mortgage is contested; or
|
(y) |
Material events
: any other event occurs or circumstance arises which, in the opinion of the Lender, is likely materially and adversely to affect either (i) the ability of any Security Party to perform all or any of its obligations under or otherwise to comply with the terms of any of the Security Documents or (ii) the security created by any of the Security Documents; or
|
(z) |
Earnings Account
: any moneys are withdrawn from the Earnings Account (or either of them) other than in accordance with Clause 14 (
Earnings Account
); or
|
(aa) |
Environment
: the Owner, the Managers and/or any of their respective Environmental Affiliates fails to comply with any Environmental Law or any Environmental Approval or the Vessel is involved in any incident which gives rise or may give rise to an Environmental Claim in excess of $500,000 if, in any such case, such non-compliance or incident or the consequences thereof could, in the opinion of the Lender, reasonably be expected to have a material adverse effect on the business, assets, operations, property or financial condition of the Owner or either of the Managers or on the security constituted by any of the Security Documents; or
|
(bb) |
P&I
: the Owner or any other person fails or omits to comply with any requirements of the protection and indemnity association or other insurer with which the Vessel is entered for insurance or insured against protection and indemnity risks (including oil pollution risks) to the effect that any cover (including, without limitation, any cover in respect of liability for Environmental Claims arising in jurisdictions where the Vessel operates or trades) is or may be liable to cancellation, qualification or exclusion at any time; or
|
(cc) |
Change in shareholding
: there is a change in the legal and/or ultimate beneficial ownership of the shares in any of the Borrower and the Corporate Guarantor from that existing on the date of this Agreement as specified in Clause 7.1(dd) (
Shareholding
) and witnessed by Ultimate Beneficial Declaration (
"UBO"
)
declaration without the prior written consent of the Lender (save in the case where Top Ships will acquire 100% of the share capital of the Borrower)); or
|
(dd) |
Change of Management
: the Vessel ceases to be managed by the Managers (or either of them) (for any reason other than the reason of a Total Loss or sale of the Vessel) without the approval of the Lender and the Owner fails to appoint a new Manager prior to the termination of the relevant Management Agreement with the previous Manager; or
|
(ee) |
Deviation of Earnings
: any Earnings of the Vessel are not paid to the Earnings Account for any reason whatsoever (other than with the Lender's prior written consent); or
|
(ff) |
Charterparty
: the Stena Charterparty is at any time and for any reason terminated or becomes invalid or unenforceable or otherwise ceases to remain in full force and effect, or if the validity of such Charterparty shall at any time and for any reason be successfully contested by any party thereto, or it becomes impossible or unlawful for any party to such Charterparty to fulfil any of its covenants and obligations contained therein and the Borrowers do not provide an alternative Charterparty in form and substance satisfactory to the Lender and/or additional security as provided in Clause 8.6(a) (
Security shortfall-Additional security
) within forty five (45) days of such event; or
|
(gg) |
Personal Guarantor
: the Personal Guarantor passes away or is found to be of unsound mind or of any other legal disability or incapacity by a court of a Relevant Jurisdiction, unless the Borrower provides the Lender with a substitute Personal Guarantee executed by a person approved by the Lender at its sole discretion or other security acceptable to the Lender, within a period of not more than forty five (45) days from the occurrence of any such event or any steps are taken or legal proceedings initiated for the Personal Guarantor to be adjudicated or found bankrupt or any event analogous thereto occurs in relation to the Personal Guarantor in any jurisdiction or any of the events referred to in Clauses 10.1(d) (
Misrepresentation
) or (e) (
Cross-default
) occurs (mutatis mutandis) in relation to the Personal Guarantor; or
|
(hh) |
ISM Code and ISPS Code
: (without prejudice to the generality of Clause 10.1(c) (
Breach of other obligations
)) for any reason whatsoever the provisions of Clause 8.1(p) (
Compliance with ISM Code
) and Clause 8.1(q) (
Compliance with ISPS Code
) are not complied with and/or the Vessel ceases to comply with the ISM Code and/or the ISPS Code; or
|
(ii) |
Security Documents
: any event of default (as howsoever described or defined therein) occurs under the Security Documents (or any of them).
|
10.2 |
Consequences of Default – Acceleration
|
(a) |
by notice to the Borrower declare that the obligation of the Lender to make the Commitment available shall be terminated, whereupon the Commitment shall be reduced to zero forthwith; and/or
|
(b) |
by notice to the Borrower declare that the Loan and all interest and commitment commission accrued and all other sums payable under the Security Documents have become due and payable, whereupon the same shall, immediately or in accordance with the terms of such notice, become due and payable without any further diligence, presentment, demand of payment, protest or notice or any other procedure from the Lender which are expressly waived by the Borrower; and/or
|
(c) |
put into force and exercise all or any of the rights, powers and remedies possessed by it under this Agreement and/or any other Security Document and/or as mortgagee of the Vessel, mortgagee, chargee or assignee or as the beneficiary of any other property right or any other security (as the case may be) of the assets charged or assigned to it under the Security Documents or otherwise (whether at law, by virtue of any of the Security Documents or otherwise).
|
10.3 |
Multiple notices; action without notice
|
10.4 |
Demand basis
|
10.5 |
Proof of Default
|
10.6 |
Exclusion of Lender's liability
|
(a) |
for any loss caused by an exercise of rights under, or enforcement of an Encumbrance created by, a Security Document or by any failure or delay to exercise such a right or to enforce such an Encumbrance; or
|
(b) |
as mortgagee in possession or otherwise, for any income or principal amount which might have been produced by or realised from any asset comprised in such an Encumbrance or for any reduction (however caused) in the value of such an asset,
|
11. |
INDEMNITIES
|
11.1 |
Miscellaneous indemnities
|
(a) |
any default in payment by the Borrower of any sum under any of the Security Documents when due;
|
(b) |
the occurrence of any other Event of Default;
|
(c) |
any prepayment of the Loan or part thereof being made under Clause 4.2 (
Voluntary prepayment
), Clause 4.3 (
Compulsory Prepayment in case of Total Loss or sale of the Vessel
), or Clause 12 (
Unlawfulness-Increase cost
), or any other repayment or prepayment of the Loan or part thereof being made otherwise than on an Interest Payment Date relating to the part of the Loan prepaid or repaid; or
|
(d) |
the Commitment not being made for any reason (excluding any default by the Lender) after the Drawdown Notice in relation thereto has been given.
|
11.2 |
Extend of indemnity
|
11.3 |
Currency indemnity
|
11.4 |
Environmental indemnity
|
11.5 |
Maintenance of the Indemnities
|
11.6 |
Communications Indemnity
|
(a) |
express authority is hereby given by the Borrower to the Lender to accept (at the sole discretion of the Lender) all tested or untested communications given by facsimile or otherwise, regarding any or all of the notices, requests, instructions or other communications under this Agreement, subject to any restrictions imposed by the Lender relating to such communications including, without limitation (if so required by the Lender), 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 numbers mentioned in Clause 17.1 (
Notices and communications
) 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 Lender and promises and recognises that the Lender shall not be held responsible for any loss, liability or expense that may result from such notices, requests, instructions or other communications. It is hereby undertaken by the Borrower to indemnify in full the Lender from and against all actions, proceedings, damages, costs, claims, demands, expenses and any and all direct and/or indirect losses which the Lender or any third party may suffer, incur or sustain by reason of the Lender following such notices, requests, instructions or communications;
|
(d) |
with regard to notices, requests, instructions or communications issued by electronic and/or mechanical processes (e.g. by facsimile), the risk of equipment malfunction, including, without limitation, paper shortage,
|
(e) |
the risks of misunderstandings and errors of notices, requests, instructions or communications being given as mentioned above, are for the Borrower and the Lender will be indemnified in full pursuant to this Clause;
|
(f) |
the Lender shall have the right to ask the Borrower to furnish any information the Lender 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 Lender to do so. The Lender shall be fully protected in, and the Lender shall incur no liability to the Borrower for acting upon the said notices, requests, instructions or communications which were believed by the Lender in good faith to have been given by the Borrower or by any of their authorised representative(s); and
|
(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) etc., 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 Lender harmless and indemnified from all claims, losses, damages and expenses which the Lender may incur by reason of the failure of the Borrower to comply with the obligations under this Clause and/or this Agreement.
|
11.7 |
Gross-up in the event of a FATCA Deduction – Borrower
|
(a) |
If the Borrower is required to make a FATCA Deduction, the Borrower shall make that FATCA Deduction and any payment required in connection with that FATCA Deduction within the time allowed and in the minimum amount required by FATCA.
|
(b) |
If a FATCA Deduction is required to be made by the Borrower, the amount of the payment due from the Borrower shall be increased to an amount which (after making any FATCA Deduction) leaves an amount equal to the payment which would have been due if no FATCA Deduction had been required.
|
(c) |
The Borrower 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 a FATCA Deduction) notify the Lender accordingly.
|
(d) |
Within thirty days of making either a FATCA Deduction or any payment required in connection with that FATCA Deduction, the Borrower shall deliver to the Lender evidence satisfactory to the Lender that the FATCA
|
11.8 |
FATCA status
|
(a) |
Subject to Clause 11.8(c) below, each party shall, within ten (10) Banking 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; and
|
(ii) |
supply to that other party such forms, documentation and other information relating to its status under FATCA (including its applicable passthru percentage or other information required under the Treasury Regulations or other official guidance including intergovernmental agreements) as that other party reasonably requests for the purposes of that other party's compliance with FATCA.
|
(b) |
If a party confirms to another party pursuant to Clause 11.8(a)(i) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not, or has ceased to be a FATCA Exempt Party, that party shall notify that other party reasonably promptly.
|
(c) |
Clause 11.8(a)(i) above shall not oblige the Lender to do anything which would or might in its reasonable opinion constitute a breach of:
|
(i) |
any law or regulation;
|
(ii) |
any policy of the Lender;
|
(iii) |
any fiduciary duty; or
|
(iv) |
any duty of confidentiality.
|
(d) |
If a party fails to confirm its status or to supply forms, documentation or other information requested in accordance with Clause 11.8(a) above (including, for the avoidance of doubt, where Clause 11.8(c) above applies), then:
|
(i) |
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 Security Documents as if it is not a FATCA Exempt Party; and
|
(ii) |
if that party failed to confirm its applicable passthru percentage then such party shall be treated for the purposes of the Security Documents (and payments made thereunder) as if its applicable passthru percentage is 100%,
|
(iii) |
until (in each case) such time as the party in question provides the requested confirmation, forms, documentation or other information.
|
12. |
UNLAWFULNESS AND INCREASED COST
|
12.1 |
Unlawfulness
|
12.2 |
Increased cost
|
(a) |
subject the Lender to Taxes or change the basis of Taxation of the Lender with respect to any payment under any of the Security Documents (other than Taxes or Taxation on the overall net income, profits or gains of the Lender imposed in
|
(b) |
increase the cost to, or impose an additional cost on, the Lender or its holding company in making or keeping the Commitment available or maintaining or funding all or part of the Loan; and/or
|
(c) |
reduce the amount payable or the effective return to the Lender under any of the Security Documents; and/or
|
(d) |
reduce the Lender's or its holding company's rate of return on its overall capital by reason of a change in the manner in which it is required to allocate capital resources to the Lender's obligations under any of the Security Documents; and/or
|
(e) |
require the Lender or its holding company to make a payment or forgo a return on or calculated by reference to any amount received or receivable by the Lender under any of the Security Documents; and/or
|
(f) |
require the Lender or its holding company to incur or sustain a loss (including a loss of future potential profits) by reason of being obliged to deduct all or part of the Commitment or the Loan from its capital for regulatory purposes,
|
(i) |
the Lender shall notify the Borrower in writing of such event promptly upon its becoming aware of the same; and
|
(ii) |
the Borrower shall on demand pay to the Lender the amount which the Lender specifies (in a certificate setting forth the basis of the computation of such amount but not including any matters which the Lender or its holding company regards as confidential) is required to compensate the Lender and/or (as the case may be) its holding company for such liability to Taxes, cost, reduction, payment, forgone return or loss.
|
12.3 |
Option to prepay
|
12.4 |
Exception
|
13. |
SECURITY, APPLICATION AND SET-OFF
|
13.1 |
Securities
|
13.2 |
Application of moneys
|
(a) |
Order of application
: Except as any Security Document may otherwise provide, all moneys received by the Lender under or pursuant to any of the Finance Documents and expressed to be applicable in accordance with this Clause 11.3 shall be applied by the Lender in the following manner:
|
(i) |
Firstly
, in or towards payment of Expenses and all sums other than principal or interest which may be due to the Lender under this Agreement and the other Finance Documents or any of them at the time of application;
|
(ii) |
Secondly
, in or towards payment of any default interest;
|
(iii) |
Thirdly
, in or towards payment of any arrears of interest (other than default interest) due in respect of the Loan or any part thereof;
|
(iv) |
Fourthly
, in or towards repayment of the Loan whether the same is due and payable or not;
|
(v) |
Fifthly
, in or towards payment to the Lender for any loss suffered by reason of any such payment in respect of principal not being effected on an Interest Payment Date relating to the part of the Loan repaid; and
|
(vi) |
Sixthly
, the surplus (if any) shall be paid to the Borrower or to whomsoever else shall be entitled to receive such surplus.
|
(b) |
Notice of variation of order of application
: The Lender may, by notice to the Borrower and the Security Parties, provide, at its sole discretion, for a different order of application from that set out in Clause 13.2(a) (
Order of application
) either as regards a specified sum or sums or as regards sums in a specified category or categories, without affecting the obligations of the Borrower to the Lender.
|
(c) |
Effect of variation notice
: The Lender may give notices under Clause 13.2(b) (
Notice of variation of order of application
) from time to time; and such a notice may be stated to apply not only to sums which may be received or recovered in the future, but also to any sum which has been received or recovered on or after the third Banking Day before the date on which the notice is served.
|
(d) |
Insufficient balance
: For the avoidance of doubt, in the event that such balance is insufficient to pay in full the whole of the Outstanding Indebtedness, the Lender shall be entitled to collect the shortfall from the Borrower or any other person liable therefor.
|
(e) |
Appropriation rights overridden
: This Clause 13.2 and any notice which the Lender gives under Clause 13.2(b) (
Notice of variation of order of application
)
shall override any right of appropriation possessed, and any appropriation made, by the Borrower or any other Security Party.
|
13.3 |
Set-off
|
(a) |
Express authority is hereby given by the Borrower to the Lender without prejudice to any of the rights of the Lender at law, contractually, in equity or otherwise, at any time and without notice to the Borrower upon the occurrence of any Event of Default, which is continuing and without prior notice to the Borrower:
|
(b) |
to apply any credit balance standing upon any account of the Borrower with any branch of the Lender (including, without limitation, the Earnings Account) and in whatever currency in or towards satisfaction of any sum due to the Lender from the Borrower under this Agreement, the General Assignment and/or any of the other Security Documents;
|
(c) |
in the name of the Borrower and/or the Lender to do all such acts and execute all such documents as may be necessary or expedient to effect such application; and
|
(d) |
to combine and/or consolidate all or any accounts in the name of the Borrower or the other Security Parties or any of them with the Lender.
|
(e) |
For all or any of the above purposes authority is hereby given to the Lender to purchase with the moneys standing to the credit of any such account or accounts such other currencies as may be necessary to effect such application. The Lender shall not be obliged to exercise any right given by this Clause. The Lender shall notify the Borrower forthwith upon the exercise of any right of set-off giving full details in relation thereto.
|
13.4 |
Further assurance
|
14. |
EARNINGS ACCOUNT
|
14.1 |
General
|
(a) |
on or before the Drawdown Date open the Earnings Account; and
|
(b) |
procure that all moneys payable in respect of the Earnings of the Vessel shall, unless and until the Lender directs to the contrary pursuant to the General Assignment, be paid to the Earnings Account free from Encumbrances and rights of set off other than those created by or under the Finance Documents.
|
14.2 |
Earnings Account
|
(a) |
firstly
: in payment of any arrears of interest and principal of the Loan due and payable and any and all other sums whatsoever due and payable to the Lender hereunder (such sums to be paid in such order as the Lender may in its sole discretion elect);
|
(b) |
secondly
: in payment of the Operating Expenses of its Vessel; and
|
(c) |
thirdly
: any credit balance shall be available to the Borrower to be used for any purpose not inconsistent with the Borrower's other obligations under this Agreement.
|
14.3 |
Interest
|
14.4 |
Drawings from Earnings Account
|
14.5 |
Obligations unaffected.
The provisions of this Clause 14 do not affect:
|
(a) |
Nothing herein contained shall be deemed to affect the liability and absolute obligation of the Borrower to repay the Loan and pay interest thereon on the due dates as provided in Clause 3 (
Interest
) and Clause 4 (
Repayment-Prepayment
)
nor shall they constitute or be construed as constituting a manner
of postponement thereof; or
|
(b) |
any other liability or obligation of the Borrower or any other Security Party under any Finance Document
|
14.6 |
Authorisation
|
14.7 |
Relocation of Earnings Account
|
14.8 |
No Encumbrances
|
14.9 |
Operation of Earnings Account
|
14.10 |
Application on Event of Default – Set off
|
14.11 |
Sufficient monies.
The Borrower hereby warrants that monies equal to 1/3 of principal plus relevant amount of interest will be accumulated each and every month in the Earnings Account.
|
14.12 |
Release
|
15. |
ASSIGNMENT, TRANSFER, PARTICIPATION, LENDING OFFICE
|
15.1 |
Benefit and burden
|
15.2 |
No assignment by Security Parties
|
15.3 |
Assignment by the Lender
|
15.4 |
Disclosure of information
|
(a) |
The Lender may disclose (on a confidential basis) to a prospective assignee, substitute or transferee or to any other person (such person together with any prospective assignee, substitute or transferee being hereinafter described as the
"
Prospective Assignee
"
)
who may propose entering into contractual relations with the Lender in relation to this Agreement such information about the Security Parties, as the Lender shall consider appropriate if the Lender first procures that the Prospective Assignee shall undertake to the Borrower to keep secret and confidential and, without the Borrower's consent , disclose to any third party any of the information, reports or documents supplied by the Lender,
provided
however that the Prospective Assignee shall be entitled to disclose such information, reports or documents in the following situations:
|
(i) |
in relation to any proceedings arising out of this Agreement or the other Security Documents to the extent considered necessary by the Prospective Assignee to protect its interest; or
|
(ii) |
pursuant to a court order relating to discovery or otherwise; or
|
(iii) |
pursuant to any law or regulation or to any fiscal, monetary, tax, governmental or other competent authority; or
|
(iv) |
to its auditors, legal or other professional advisers.
|
15.5 |
Documenting assignments and transfers
|
15.6 |
Changes in constitution or reorganisation of the Lender
|
15.7 |
Securitisation
|
15.8 |
Lending Office
|
16. |
MISCELLANEOUS
|
16.1 |
Cumulative Remedies
|
16.2 |
No implied waivers
|
16.3 |
Integration of Terms
|
16.4 |
Invalidity of Terms
|
16.5 |
Amendments
|
16.6 |
Inconsistency of Terms
|
16.7 |
Language and genuineness of documents
|
(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 English language.
|
(b) |
Certification of documents
: Any copies of documents delivered to the Lender 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 Lender at the sole discretion of the Lender.
|
(c) |
Certification of signature
: Signatures on Board or shareholder resolutions, Secretary's certificates and any other documents are, at the discretion of the Lender, to be verified for their genuineness by appropriate Consul or other competent authority.
|
16.8 |
Counterparts
|
16.9 |
Confidentiality
|
(a) |
Each of the parties hereto agrees and undertakes to keep confidential any documentation and any confidential information concerning the business, affairs, directors or employees of the other which comes into its possession 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 Lender may be required by law 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 Lender may disclose information and deliver documentation relating to the Borrower and the transactions and matters in relation to this Agreement and/or the other Security Documents to third parties to the extend that this is necessary for the enforcement or the contemplation of enforcement of the Lender's rights or for any other purpose for which in the opinion of the Lender, such disclosure should be useful or appropriate for the interests of the Lender or otherwise and the Borrower expressly authorises any such disclosure and delivery.
|
(d) |
The Borrower acknowledges and accepts that the Lender may be prohibited or it may be inappropriate for the Lender to disclose information to the Borrower by reason of law or duties of confidentiality owed or to be owed to other persons.
|
16.10 |
Process Agent in Greece
|
16.11 |
Special provisions
|
(a) |
Substitution for the Personal Guarantee
: Top Ships shall execute in favour of the Lender its Corporate Guarantee in substitution for the Personal Guarantee (herein, the
"Top Ships Corporate Guarantee"
);
|
(b) |
Dividends
: the Borrower shall be entitled to declare or pay any dividends to any of its shareholders without the prior written consent of the Lender,
unless
:
|
(i) |
any Event of Default has occurred and is continuing; and/or
|
(ii) |
an Event of Default shall occur as a result of the payment of such dividends.
|
(c) |
Financial covenants
-Compliance Certificate: the Borrower will ensure that, for the duration of the remainder of the Security Period, Top Ships Group' consolidated financial position, based on the most recent Accounting Information to comply with the financial covenants set out below:
|
(i) |
Adjusted Net Worth
: Top Ships to maintain market value Adjusted Net Worth of at least $20,000,000 (Twenty million Dollars);
|
(ii) |
EBITDA
: Top Ships to maintain the consolidated interest cover ratio (EB11DA to Net Interest Expense) of 1.2 minimum;
|
(iii) |
Liquidity
: ensure that throughout the remainder of the Security Period, the Liquid Funds of Top Ships on a consolidated basis will not at any time be in an amount of less than United States Dollars Seven hundred fifty thousand ($750,000) per owned Fleet Vessel; and
|
(iv) |
Leverage
: the Leverage Ratio of Top Ships Group shall not exceed seventy five per cent (75%).
|
(a) |
cash in hand or on deposit with any prime international bank;
|
(b) |
Marketable Securities valued at their then published market value rates owned by Top Ships at that date; and
|
(c) |
any other instrument, security or investment approved by the Lender, which are free from any security interest and/or restrictions.
|
17. |
COMMUNICATIONS
|
17.1 |
Notices and communications
|
(a) |
be in writing delivered personally or by registered letter or facsimile
transmission or other means of telecommunication in permanent written form; |
(b) |
be deemed to have been received, subject as otherwise provided in the relevant Security Document, in the case of a letter, when delivered personally or in the case of a registered letter, on the date it is registered as delivered and, in the
|
(c) |
be sent:
|
(i) |
if to be sent to any Security Party:
|
(ii) |
to the Lender at:
|
18. |
GOVERNING LAW AND JURISDICTION
|
18.1 |
Law
|
(a) |
Applicable Law
: This Agreement and any non-contractual obligations connected with it shall be governed by and construed in accordance with English Law.
|
(b) |
Enforcement in Greece
: For the purposes of enforcement in Greece, it is hereby expressly agreed that English law as the governing law of this Agreement will be proved by an affidavit of a solicitor from an English law firm to be appointed by the Lender and the said affidavit shall constitute full and conclusive evidence binding on the Borrower but the Borrower shall be allowed to rebut such evidence save for witness.
|
18.2 |
Jurisdiction
|
(a) |
Exclusive English jurisdiction
: 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"
)
.
The Borrower irrevocably and unconditionally submits to the jurisdiction of such courts.
|
(b) |
Waiver
: 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 and waives any objections to the inconvenience of England as a forum.
|
(c) |
Choice of forum for the exclusive benefit of the Lender
: This Clause 18.2 is for the benefit of the Lender only. As a result, the Lender shall not be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Lender may take concurrent proceedings in any number of jurisdictions.
|
18.3 |
Process Agent for English Proceedings
|
(a) |
the Borrower hereby agrees and undertakes to maintain a Process Agent for English Proceedings throughout the Security Period and hereby agrees that in the event that if any Process Agent for English Proceedings is unable for any reason to act as agent for service of process, the Borrower must immediately (and in any event within ten (10) days of such event taking place) appoint another agent on terms acceptable to the Lender. Failing this, the Lender may appoint for this purpose a substitute Process Agent for English Proceedings and the Lender is hereby irrevocably authorised to effect such appointment on Borrower's behalf. The appointment of such Process Agent for English Proceedings shall be valid and binding from the date notice of such appointment is given by the Lender to the Borrower in accordance with Clause 17.1 (
Notices and communications
); and
|
(b) |
the Borrower hereby agrees that failure by a Process Agent for English Proceedings to notify the Borrower of the process will not invalidate the proceedings concerned.
|
18.4 |
Lender's rights unaffected
|
18.5 |
Proceedings in any other country
|
18.6 |
Third Party rights
|
18.7 |
Meaning of "proceedings"
|
To: |
ALPHA BANK A.E.,
93 Akti Miaouli, Piraeus, Greece (the " Lender ") |
(a) |
no event or circumstance has occurred and is continuing which constitutes a Default;
|
(b) |
the representations and warranties contained in Clause 7 of the Loan Agreement are true and correct at the date hereof as if made with respect to the facts and circumstances existing at such date;
|
(c) |
the borrowing to be effected by the drawdown of the Commitment is within our corporate powers, has been validly authorised by appropriate corporate action and will not cause any limit on our borrowings (whether imposed by statute, regulation, agreement or otherwise) to be exceeded; and
|
(d) |
there has been no material adverse change in our financial position from that described by us to the Lender in the negotiation of the Loan Agreement.
|
By:
|
||||
Name:
|
||||
Title:
|
Attorney-in-fact
|
(a) |
Constitutional documents
|
(b) |
Corporate authorisations
|
(i) |
being true and correct;
|
(ii) |
being duly passed at meetings of the directors of such Security Party and of the shareholders of such Security Party each duly convened and held;
|
(iii) |
not having been amended, modified or revoked;
|
(iv) |
being in full force and effect; and
|
(v) |
together with originals or certified copies of any powers of attorney issued by any Security Party pursuant to such resolutions;
|
(c) |
Certificate of incumbency
|
(d) |
Borrower's consents and approvals
|
(e) |
Security Parties' process agents
|
(f) |
Know
your customer and money laundering compliance
|
(g) |
Earnings
Account
|
(h) |
Contract
|
(i) |
Liquidity
|
(j) |
Share certificates
|
(a) |
Drawdown notice
|
(b) |
Conditions precedent
|
(c) |
Vessel's conditions
|
(i) |
Vessel's Delivery
.
|
(ii) |
Registration and Encumbrances
|
(iii) |
Classification
|
(iv) |
Insurance
|
(d) |
No claim
|
(e) |
Title and no Encumbrances
|
(f) |
Equity
|
(g) |
Mortgage
|
(h) |
Beneficial ownership
|
(i) |
Sale documents
|
(j) |
Trading Certificates
|
(k) |
Trim and stability booklet
|
(1) |
Valuation of Vessel
|
(m) |
Security Documents, letters and other documents
|
(o) |
Security Parties' process agents
|
(p) |
Mortgage registration
|
(q) |
Management Agreement
|
(r) |
ISM Code and ISPS Code
|
(s) |
Insurers confirmations
|
(t) |
Insurance opinion
|
(u) |
Representations and warranties
|
(v) |
No Event of Default
|
(w) |
No change
|
(x) |
No Market disruption
Event
|
(y) |
Fees
|
(z) |
Legal opinions
|
(aa) |
Further opinions
|
(bb) |
Acknowledgement of receipt
|
(cc) |
Further conditions precedent
|
To: |
ALPHA BANK AL
,
93 Akti Miaouli, Piraeus, Greece (the " Lender " ) |
From: |
TOP SHIPS INC.
, of the Marshall Islands
(the " Corporate Guarantor " ) |
1. |
Financial Covenants
:
|
(a) |
Adjusted Net Worth
: is US$[
—
]
|
(b) |
Leverage Ratio
: is
[
—
]%
|
(c) |
Liquid Funds
: US$
[
—
]
|
(d) |
EBITDA
: is [
—
]; and
|
2. |
Default
: [No Default has occurred and is continuing]
|
To: |
[P&I Club]
[ — ] [ — ] |
From: |
ECO SEVEN INC.
of the Marshall Islands, c/o Central Mare Inc., 1, Vassilissis Sofias Str. & Meg. Alexandrou Str., Maroussi, Attica, Greece, Attention: [Chief Financial Officer] |
For and on behalf of
Eco Seven Inc. |
SIGNED
by
Mr. Andreas Louka for and on behalf of ECO SEVEN INC . of the Marshall Islands in the presence of: |
)
)
)
)
)
)
|
/s/ Andreas Louka
|
Attorney-in-fact
|
Witness: |
/s/ Lilian Kouleri
|
Name: |
Lilian Kouleri
|
Address: |
13 Defteras Merarchias Street
Piraeus, Greece |
Occupation: |
Attorney-at-law
|
SIGNED
by
Mr. Konstantinos Flokos and Mrs. Chrysanthi Papathanasopoulou ALPHA BANK A.E. of the Marshall Islands in the presence of: |
)
)
)
)
)
)
|
/s/
Konstantinos Flokos
/s/ Chrysanthi Papathanasopoulou
|
Attorney-in-fact
|
Witness: |
/s/ Lilian Kouleri
|
Name: |
Lilian Kouleri
|
Address: |
13 Defteras Merarchias Street
Piraeus, Greece |
Occupation: |
Attorney-at-law
|
FIRST SUPPLEMENTAL AGREEMENT
in relation to a Loan Agreement dated
20
th
July, 2016
for a loan facility of (initially) US$23,350,000
|
CLAUSE
|
|
PAGE
|
1.
|
DEFINITIONS
|
3
|
2.
|
BORROWER'S ACKNOWLEDGEMENT OF INDEBTEDNESS
|
5
|
3.
|
REPRESENTATIONS AND WARRANTIES
|
5
|
4.
|
AGREEMENT OF THE LENDER
|
6
|
5.
|
CONDITIONS
|
6
|
6.
|
VARIATIONS TO THE PRINCIPAL AGREEMENT
|
8
|
7.
|
CONTINUANCE OF PRINCIPAL AGREEMENT AND THE SECURITY DOCUMENTS
|
20
|
8.
|
RECONFIRMATION OF THE EXISTING CORPORATE GUARANTEE
|
20
|
9.
|
ENTIRE AGREEMENT AND AMENDMENT
|
21
|
10.
|
FEES AND EXPENSES
|
21
|
11.
|
Miscellaneous
|
21
|
12.
|
Applicable law and jurisdiction
|
21
|
(1) |
ALPHA
BANK
A.E.
, a banking société anonyme incorporated in and pursuant to the laws of the Hellenic Republic with its head office at 40 Stadiou Street, Athens GR 102 52, Greece, acting, except as otherwise herein provided through its office at 93 Akti Miaouli, Piraeus, Greece
(the
"Lender"
,
which expression shall include its successors and assigns
); and
|
(2) |
ECO SEVEN INC.
,
a company duly incorporated in the Republic of the Marshall Islands having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960
, as borrower (the
"Borrower"
); and
|
(3) |
CENTRAL MARE INC.
,
a company duly incorporated and validly existing under the laws of the Republic of
the Marshall Islands, having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960
(hereinafter called the
"Existing Corporate Guarantor"
,
which expression shall include its successors
)
; and
|
(4) |
TOP SHIPS INC.
,
a company duly incorporated and validly existing under the laws of the Republic of
the Marshall Islands, having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960
(hereinafter called the
"New Corporate Guarantor"
,
which expression shall include its successors
)
; and
|
(5) |
Mr. EVANGELOS PISTIOLIS
,
son of
Ioannis
,
a businessman,
of
Parc Saint Roman, Bloc A, 7 Avenue Saint Roman, Monaco, MC 98000,
(hereinafter called the
"Personal Guarantor"
,
which expression shall include his successors),
|
(A) |
the Borrower hereby acknowledges and confirms that (a) the Lender has advanced to the Borrower, the full amount of the Loan in the principal amount of United States Dollars Twenty three million three hundred fifty thousand (US$23,350,000)
and (b) as of the date hereof the principal amount of United States Dollars
Twenty Two Million Nine Hundred Fifty Thousand (US$22,950,000)
in respect of the Loan remains outstanding
;
|
(B) |
pursuant to a Corporate Guarantee dated
21
st
February 2017
(the
"Existing Corporate Guarantee"
) the Existing Corporate Guarantor irrevocably and unconditionally guaranteed the due and timely repayment of the Loan and interest and default interest accrued thereon and the performance of all the obligations of the Borrower under the Loan Agreement and the Security Documents executed in accordance thereto; and
|
(C) |
The Personal Guarantor will be released from his obligations to the Lender as guarantor under the Personal Guarantee dated 21st February 2017 on the Effective Date;
|
(D) |
The Borrower, the Personal Guarantor and the Existing Corporate Guarantor have together requested the Lender to grant its approval to:
|
(a) |
tthe amendment of Clause 8.2 (t) (
Control
) of the Principal Agreement, and
|
(i) |
that the New Corporate Guarantor will sign, execute and deliver in favour of the Lender its irrevocable and unconditional guarantee in security of all the obligations of the Borrower under the Loan Agreement and the Security Documents
(the
"New Corporate Guarantee"
)
;
|
(ii) |
that any accrued and/or default interest along with any expenses owing under the Principal Agreement shall have been paid in full to the Lender;
|
(iii) |
that no Event of Default has occurred and is continuing;
|
(iv) |
that the Principal Agreement shall be amended in the manner hereinafter set out; and
|
(v) |
that the Margin shall remain unchanged throughout the remainder of the Security Period .
|
1. |
Definitions
|
1.1 |
Words and expressions defined in the Principal Agreement and not otherwise defined herein (including the Recitals hereto) shall have the same meanings when used in this Agreement.
|
1.2 |
In addition, in this Agreement the words and expressions specified below shall have the meanings attributed to them below:
|
1.3 |
(a) Where the context so admits words importing the singular number only shall include the plural and vice versa and words importing persons shall include firms and corporations, (b) clause headings are inserted for convenience of reference only and shall be ignored in construing this Agreement, (c) references to Clauses are to clauses of this Agreement save as may be otherwise expressly provided in this Agreement and (d) all capitalised terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the Loan Agreement.
|
2. |
Borrower's Acknowledgement Of Indebtedness
|
3. |
Representations and warranties
|
3.1 |
The Borrower hereby represent and warrant to the Lender as at the date hereof that the representations and warranties set forth in the Principal Agreement and the Security Documents (updated mutatis mutandis to the date of this Agreement) are (and will be on the Effective Date) true and correct as if all references therein to "
this Agreement
" were references to the Principal Agreement as amended and supplemented by this Agreement.
|
3.2 |
In addition to the above, the Borrower hereby represent and warrant to the Lender as at the date of this Agreement that:
|
a. |
each of the corporate Security Parties is duly formed, is validly existing and in good standing under the laws of the place of its incorporation has full power to carry on its business as it is now being conducted and to enter into and perform its obligations under the Principal Agreement, this Agreement, and each of the New Corporate Guarantee, and has complied with all statutory and other requirements relative to its business;
|
b. |
all necessary licences, consents and authorities, governmental or otherwise under this Agreement, the Principal Agreement and the New Corporate Guarantee have been obtained and, as of the date of this Agreement, no further consents or authorities are necessary for each of the relevant Security Parties to enter into this Agreement and the New Corporate Guarantee or otherwise perform its obligations hereunder;
|
c. |
this Agreement, and the New Corporate Guarantee on the execution thereof will, constitute the legal, valid and binding obligations of the Security Parties thereto enforceable in accordance with its terms;
|
d. |
the execution and delivery of, and the performance of the provisions of this Agreement and the New Corporate Guarantee do not, and will not contravene any applicable law or regulation existing at the date hereof or any contractual restriction binding on any of the Security Parties or its respective constitutional documents;
|
e. |
no action, suit or proceeding is pending or threatened against any of the Borrower and the other Security Parties or their assets before any court, board of arbitration or administrative agency which could or might result in any material adverse change in the business or condition (financial or otherwise) of any of the Borrower or the other Security Parties; and
|
f. |
none of the Borrower and the other Security Parties is and at the Effective Date will be in default under any agreement by which it is or will be at the Effective Date bound or in respect of any financial commitment, or obligation.
|
4. |
Agreement of the Lender
|
5. |
Conditions
|
5.1 |
The agreement of the Lender contained in Clause 3 shall be expressly subject to the condition that the Lender shall have received on or before the Effective Date in form and substance satisfactory to the Lender and its legal advisers
|
a. |
a recent certificate of good standing or equivalent document issued by the competent authorities of the place of its incorporation in respect of each of the Borrower and the Corporate Guarantors;
|
b. |
certified and duly legalised copies of resolutions duly passed by the Board of Directors of each of the Borrower and the Corporate Guarantors and certified and duly legalised copies of the resolutions passed at a meeting of the shareholders of each of the Borrower and the Corporate Guarantors evidencing approval of this Agreement and the New Corporate Guarantee to which each is or is to be a party and authorising appropriate officers or attorneys –in-fact to execute the same and to sign all notices required to be given under this Agreement on its behalf or other evidence of such approvals and authorisations as shall be acceptable to the Lender;
|
c. |
all documents evidencing any other necessary action or approvals or consents with respect to this Agreement, including, but not limited to, certified and duly legalised Certificates of Incumbency issued by any of the Directors of each of the Borrower and the Corporate Guarantors evidencing approval of this Agreement and the New Corporate Guarantee to which each is or is to be a party and authorising appropriate officers or attorneys-in-fact to execute the same and to sign all notices required to be given under this Agreement on its behalf or other evidence of such approvals and authorisations as shall be acceptable to the Lender;
|
d. |
the original of any power(s) of attorney issued in favour of any person executing this Agreement and any relevant New Corporate Guarantees to which each is or is to be a party on behalf of each of the Borrower and the Corporate Guarantors;
|
e. |
favourable legal opinions from lawyers acceptable to the Lender and its legal advisors on such matters concerning the laws of the Marshall Islands and such other applicable jurisdiction(s) as the Lender shall reasonably require;
|
f. |
duly executed original of the New Corporate Guarantee by the parties thereto and, where appropriate, duly registered in favour of the Lender;
|
6. |
Variations to the Principal Agreement
|
6.1 |
In consideration of the agreement of the Lender contained in Clause 4, the Borrower hereby agrees with the Lender that (subject to the satisfaction of the conditions precedent contained in Clause 5), the provisions of the Principal Agreement shall be varied and/or amended and/or supplemented as follows:
|
a. |
with effect as from the Effective Date
the following definitions in Clause 1.2 (
Definitions
) of the Principal Agreement and any references thereto in the Principal Agreement shall be deleted and replaced by the following reading as follows:
|
b. |
with effect as from the Effective Date, the following new definitions shall be inserted in Clause 1.2
(
Definitions
)
of the Principal Agreement in alphabetical order reading as follows:
|
(a) |
in relation to an EEA Member Country which has implemented, or which at any time implements, Article 55 of Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms, the relevant implementing law or regulation as described in the EU Bail-In Legislation Schedule from time to time; and
|
(b) |
in relation to any other state, any analogous law or regulation from time to time which requires contractual recognition of any Write-down and Conversion Powers contained in that law or regulation;
|
(a) |
the Borrower if it is resident for tax purposes in the United States of America; or
|
(b) |
a Security Party some or all of whose payments under the Finance Documents are from sources within the United States for US Federal income tax purposes;
|
(a) |
in relation to any Bail-In Legislation described in the EU Bail-In Legislation Schedule from time to time, the powers described as such in relation to that Bail-In Legislation in the EU Bail-In Legislation Schedule; and
|
(b) |
in relation to any other applicable Bail-In Legislation:
|
(i) |
any powers under that Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers; and
|
(ii) |
any similar or analogous powers under that Bail-In Legislation.
|
c. |
with effect as from the 30th day of May 2017, Clause 8.2 (t) (
Control
) of the Principal Agreement shall be amended to read as follows:
|
d. |
with effect as from the 30th day of May 2017, Clause 10.1 (cc) (
Change in Shareholding
) of the Principal Agreement shall be amended to read as follows:
|
e. |
with effect as from the Effective Date, the phrase "
In case Top Ships acquires 100% of the shares of the Borrower, the parties hereto agree as follows:
" in Clause 16.11 (
Special Provisions
) of the Principal Agreement shall be amended to read as follows:
|
6.2 |
Construction of certain terms.
With effect as from the date hereof, all references to:
|
(a) |
"Guarantees"
and
"Guarantors"
in the Principal Agreement shall be construed as references to all the
"Corporate Guarantees"
and
"Corporate Guarantors"
respectively or the relevant Corporate Guarantee and the relevant Corporate Guarantor, as the context may require;
|
(b) |
"Corporate Guarantor"
in the Principal Agreement shall be construed as references to both
"Corporate Guarantors"
or the relevant Corporate Guarantor, as the context may require;
|
(c) |
With effect as from the Effective Date the definition "
Security Documents
" shall be deemed to include the Security Documents as amended and/or supplemented in pursuance to the terms hereof and any document or documents (including if the context requires the Loan Agreement) that may now or hereafter be executed as security for the repayment of the Loan, interest thereon and any other moneys payable by the Borrower under the Principal Agreement and the Security Documents (as herein defined) as well as for the performance by the Borrower and the other Security Parties as defined in the Loan Agreement all obligations, covenants and agreements pursuant to the Principal Agreement, this Agreement and/or the Security Documents.
|
(d) |
All references in the Principal Agreement to
"
this Agreement
", "
hereunder
"
and the like and in the Security Documents to the
"
Loan Agreement
"
shall be construed as references to the Principal Agreement as amended and/or supplemented by this Agreement.
|
7. |
Continuance of Principal Agreement and the Security Documents
|
7.1 |
Save for the alterations to the Principal Agreement, and the Security Document made or to be made pursuant to this Agreement, and such further modifications (if any) thereto as may be necessary to make the same consistent with the terms of this Agreement, the Principal Agreement shall remain in full force and effect and the security constituted by the Security Documents shall continue to remain valid and
|
8. |
Reconfirmation of the existing Corporate Guarantee and the Technical Manager's Undertaking
|
8.1 |
Notwithstanding the variation to the Principal Agreement by this Agreement, the Existing Corporate Guarantee of the Existing Corporate Guarantor (which the Existing Corporate Guarantor hereby reconfirms) shall remain in full force and effect as a guarantee of the obligations of the Borrower under the Principal Agreement, as amended by this Supplemental Agreement, and the Security Documents and the payment of all the Outstanding Indebtedness and the Existing Corporate Guarantor shall remain liable under the Existing Corporate Guarantee for all obligations and liabilities assumed by it thereunder.
|
8.2 |
The Existing Corporate Guarantor (in its capacity as the Technical Manager) hereby confirms that, notwithstanding the variation to the Principal Agreement contained herein, the provisions of the relevant Manager's Undertaking executed by the Technical Manager and dated 28
th
February 2017 for mv STENAWECO ELEGANCE shall remain in full force and effect as security of the obligations of the Borrower under the Principal Agreement, as amended by this Supplemental Agreement, and the Security Documents and the payment of all the Outstanding Indebtedness and the Technical Manager shall remain liable under the relevant Manager's Undertaking for all obligations and liabilities assumed by it thereunder.
|
9. |
Entire agreement and amendment
|
9.1 |
The Principal Agreement, the other Security Documents, and this Agreement represent the entire agreement among the parties hereto with respect to the subject matter hereof and supersede any prior expressions of intent or understanding with respect to this transaction and may be amended only by an instrument in writing executed by the parties to be bound or burdened thereby.
|
9.2 |
This Agreement is supplementary to and incorporated in the Principal Agreement, all terms and conditions whereof, including, but not limited to, provisions on payments, calculation of interest and Events of Default, shall apply to the performance and interpretation of this Agreement.
|
10. |
Fees and expenses
|
10.1 |
The Borrower agree to pay to the Lender:
|
(a) |
upon demand on a full indemnity basis and from time to time all costs, charges and expenses (including legal fees) incurred by the Lender in connection with
|
10.2 |
The Borrower covenant and agree to pay and discharge all stamp duties, registration and recording fees and charges and any other charges whatsoever and wheresoever payable or due in respect of this Agreement and/or any document executed pursuant hereto.
|
11. |
Miscellaneous
|
11.1 |
The provisions of Clause 15
(
Assignment, Participation, Lending Office
)
and Clause 17.1 (
Notices and Communications
) of the Principal Agreement shall apply to this Agreement as if the same were set out herein in full.
|
12. |
Applicable law and jurisdiction
|
12.1 |
This Agreement and any non contractual obligations arising out of or in relation to it are governed by, and shall be construed in accordance with, English law and the provisions of Clause 18
(
Governing Law and Jurisdiction
)
of the Principal Agreement shall apply mutatis mutandis to this Agreement as if the same were set out herein in full.
|
SIGNED by
|
)
|
|
Mr. Andreas Louka
|
)
|
|
for and on behalf of
|
)
|
|
ECO SEVEN INC
.
|
)
|
/s/ Andreas Louka
|
of the Marshall Islands, in the presence of:
|
)
|
Attorney-in-fact
|
THE CORPORATE GUARANTORS
|
||
SIGNED by
|
)
|
|
Mr. Andreas Louka
|
)
|
|
for and on behalf of
|
)
|
|
CENTRAL MARE INC.
|
)
|
/s/ Andreas Louka
|
of the Marshall Islands, in the presence of:
|
)
|
Attorney-in-fact
|
SIGNED by
|
)
|
|
Mr. Alexandros Tsirikos
|
)
|
|
for and on behalf of
|
)
|
|
TOP SHIPS INC.
|
)
|
/s/ Alexandros Tsirikos
|
of the Marshall Islands, in the presence of:
|
)
|
Attorney-in-fact
|
/s/ Eftychia Chadzidaki
|
||
Name:
|
Eftychia Chadzidaki
|
|
Address:
|
13 Defteras Merarchias Str.,
|
|
18535 Piraeus, Greece
|
||
Occupation:
|
Attorney-at-law
|
|
SIGNED by
|
)
|
|
Mr. EVANGELOS I. PISTIOLIS
|
)
|
/s/ Evangelos Pistiolis
|
in the presence of:
|
)
|
Evangelos I. Pistiolis
|
)
|
/s/ Eftychia Chadzidaki
|
||
Name:
|
Eftychia Chadzidaki
|
|
Address:
|
13 Defteras Merarchias Str.,
|
|
18535 Piraeus, Greece
|
||
Occupation:
|
Attorney-at-law
|
|
THE LENDER
|
||
SIGNED by
|
)
|
/s/ Kinstantinos Flokos
|
Mr. Kinstantinos Flokos
|
)
|
Attorney-in-fact
|
and Mrs. Christina Papathanasopoulou
|
)
|
|
for and on behalf of
|
)
|
|
ALPHA BANK A.E.
|
)
|
|
in the presence of:
|
)
|
/s/ Christina Papathanasopoulou
|
)
|
Attorney-in-fact
|
|
/s/ Eftychia Chadzidaki
|
||
Name:
|
Eftychia Chadzidaki
|
|
Address:
|
13 Defteras Merarchias Str.,
|
|
18535 Piraeus, Greece
|
||
Occupation:
|
Attorney-at-law
|
|
PAGE
|
|||
PREAMBLE
|
3
|
||
ARTICLE
|
I
|
: DESCRIPTION AND CLASS
|
4
|
II
|
: CONTRACT PRICE
|
8
|
|
III
|
: ADJUSTMENT OF THE CONTRACT PRICE
|
9
|
|
IV
|
: INSPECTION AND APPROVAL
|
13
|
|
V
|
: MODIFICATIONS, CHANGES AND EXTRAS
|
19
|
|
VI
|
: TRIALS AND COMPLETION
|
22
|
|
VII
|
: DELIVERY
|
26
|
|
VIII
|
: DELAYS AND EXTENSIONS OF TIME (FORCE MAJEURE)
|
30
|
|
IX
|
: WARRANTY OF QUALITY
|
33
|
|
X
|
: PAYMENT AND RESCISSION BY THE BUYER
|
36
|
|
XI
|
: BUYER'S AND BUILDER'S DEFAULT
|
42
|
|
XII
|
: BUYER'S SUPPLIES
|
46
|
|
XIII
|
: ARBITRATION
|
48
|
|
XIV
|
: SUCCESSORS AND ASSIGNS
|
50
|
|
XV
|
: TAXES AND DUTIES
|
51
|
|
XVI
|
: PATENTS, TRADEMARKS AND COPYRIGHTS
|
52
|
|
XVII
|
: INTERPRETATION AND GOVERNING LAW
|
54
|
|
XVIII
|
: NOTICE
|
55
|
|
XIX
|
: EFFECTIVENESS OF THIS CONTRACT
|
57
|
|
XX
|
: EXCLUSIVENESS
|
58
|
|
XXI
|
: INSURANCE
|
59
|
|
XXII
|
: COMPLIANCE AND ANTI-BRIBERY
|
61
|
|
EXHIBIT "A" LETTER OF GUARANTEE
|
64
|
||
EXHIBIT "B" PERFORMANCE GUARANTEE
|
68
|
1. |
DESCRIPTION
|
2. |
BASIC DIMENSIONS AND PRINCIPAL PARTICULARS OF THE VESSEL
|
(a) |
The basic dimensions and principal particulars of the VESSEL shall be :
|
Length, overall
|
abt. 183
m
|
|
Length, between perpendiculars
|
174.0 m
|
|
Breadth, moulded
|
32.2m
|
|
Depth, moulded
|
19.1m
|
|
Design draught, moulded
|
11.0m
|
|
Scantling draught, moulded
|
13.3m
|
Main Engine
|
: HYUNDAI – B&W 6G50ME-B9.5 (Tier II)
|
|
Nominal Rating: 10,320 kW x 100.0 RPM
|
||
Engine Optimization : Low Load tuning by Exhaust Gas
|
||
Bypass (EGB)
|
||
MCR: 9,220 kW x 94.5 RPM
|
||
NCR: 5,680 kW x 80.4 RPM
|
||
Deadweight, guaranteed
|
: about 49,614 metric tons at the Scantling draught of
|
13.3 meters on even keel in sea water of specific gravity of 1.025.
|
||
Speed, guaranteed
|
: 14.4 knots at the design draught of 11.0 meters at the condition of clean bottom and in calm and deep sea with main engine output of 5,680 kW with 15% sea margin.
|
|
Fuel Consumption, guaranteed
|
: 166.9 grams/kW-hour using marine diesel oil having lower calorific value of 10,200kcal/kg at MCR measured at the shop trial with I.S.O reference conditions.
|
(b) |
The dimensions may be slightly modified by the BUILDER, who also reserves the right to make changes to the SPECIFICATIONS and the PLAN if found necessary to suit the local conditions and facilities of the SHIPYARD, the availability of materials and equipment, the introduction of improved production methods or otherwise, subject to the approval of the BUYER which the BUYER shall not withhold unreasonably, and the approval of the CLASSIFICATION SOCIETY.
|
3. |
CLASSIFICATION, RULES AND REGULATIONS
|
(a) |
The VESSEL, including its machinery, equipment and outfitting shall be constructed in accordance with the BUILDER's quality standard and shipbuilding practices.
|
(b) |
The BUILDER shall arrange with the CLASSIFICATION SOCIETY for the assignment by the CLASSIFICATION SOCIETY of representative(s) to the VESSEL during construction. All fees and charges incidental to classification of the VESSEL in compliance with the above specified rules, regulations and requirements of this CONTRACT shall be for the account of the BUILDER.
|
(c) |
The decision of the CLASSIFICATION SOCIETY as to whether the VESSEL complies with the regulations of the CLASSIFICATION SOCIETY shall be final and binding upon the BUILDER and the BUYER. For the avoidance of doubt such decision shall only be final and binding in so far as compliance with the regulations of the CLASSIFICATION SOCIETY and shall have no wider application, including as to whether the VESSEL has been designed, constructed, equipped and completed in accordance with all terms of this CONTRACT.
|
(d) |
The facilities, labour and materials necessary for the safe and convenient conduct of any inspection by the CLASSIFICATION SOCIETY shall be furnished by the BUILDER. All major plans shall be subject to approval, inspection and test by the CLASSIFICATION SOCIETY in accordance with the rules and regulations of the CLASSIFICATION SOCIETY.
|
4. |
SUBCONTRACTING
|
5. |
NATIONALITY OF THE VESSEL
|
1. |
DELAYED DELIVERY
|
(a) |
No adjustment shall be made and the CONTRACT PRICE shall remain unchanged for the first thirty (30) days of the delay in delivery of the VESSEL [ending as of 12 o'clock midnight Vietnamese Standard Time on the thirtieth (30th) day of delay] beyond the Delivery Date calculated as provided in Article VII.1. hereof.
|
(b) |
If delivery of the VESSEL is delayed more than thirty (30) days beyond the date upon which the delivery is due from the BUILDER under the terms of this CONTRACT, then, beginning at midnight of the thirtieth (30th) day after such due date, the CONTRACT PRICE of the VESSEL shall be reduced by U.S. Dollars Seven Thousand Two Hundred (US$7,200) for each full day of delay shall not exceed the amount due to cover the delay of one hundred and sixty five (165) days after thirty (30) days of the delay in delivery of the VESSEL at the rate of deduction as specified hereinabove.
|
(c) |
But, if the delay in delivery of the VESSEL continues for a period of more than one hundred and ninety five days (195) days beyond the date upon which the delivery is due from the BUILDER under the terms of this CONTRACT then, in such event, and after such period has expired, the BUYER may, at its option, cancel this CONTRACT by serving upon the BUILDER a notice of cancellation in writing or by e-mail or facsimile directed to the BUILDER at the address given in this CONTRACT, and the provisions of Article X.5 shall apply. Such cancellation shall be effective as of the date the notice thereof is received by the BUILDER. If the BUYER has not served the notice of cancellation after the aforementioned one hundred and ninety five days (195) days delay in delivery, the BUILDER may demand the BUYER to make an election in accordance with Article VIII.3. hereof.
|
(d) |
For the purpose of this Article, the delivery of the VESSEL shall be deemed to be delayed when and if the VESSEL, after taking into full account extension of the Delivery Date or permissible delays as provided in Article V, VI, VIII, XI or elsewhere in this CONTRACT, is delivered beyond or before the date upon which delivery would then be due under the terms of this CONTRACT.
|
2. |
INSUFFICIENT SPEED
|
(a) |
The CONTRACT PRICE of the VESSEL shall not be affected or changed, if the actual speed, as determined by trial runs more fully described in Article VI hereof, is less than the guaranteed speed as defined in Article I paragraph 2 hereof, provided such deficiency in actual speed is not more than three-tenths (3/10) of a knot below the guaranteed speed.
|
(b) |
However, as for the deficiency of more than three-tenths (3/10) of a knot in actual speed below the guaranteed speed, the CONTRACT PRICE shall be reduced by U.S. Dollars Eighteen Thousand (US$18,000) for each full one-tenth (1/10) of a knot in excess of the said three-tenths (3/10) of a knot of deficiency in speed [fractions of less than one-tenth (1/10) of a knot shall be regarded as a full one-tenth (1/10) of a knot]. However, unless the parties agree otherwise, the total amount of reduction from the CONTRACT PRICE shall not exceed the amount due to cover the deficiency of eight-tenths(8/10) full knot below the guaranteed speed at the rate of reduction as specified above.
|
(c) |
If the deficiency in actual speed of the VESSEL is more than eight-tenths (8/10) of a full knot below the guaranteed speed, then the BUYER, at its option, may, subject to the BUILDER's right to effect alterations or corrections as provided in Article VI.5. hereof, cancel this CONTRACT by the BUYER sending a notice of cancellation to the BUILDER in writing or by email or facsimile, and the provisions of Article X.5 shall apply, or may accept the VESSEL at a reduction in the CONTRACT PRICE as above provided for eight-tenths (8/10) full knot of deficiency only.
|
3. |
EXCESSIVE FUEL CONSUMPTION
|
(a) |
The CONTRACT PRICE of the VESSEL shall not be affected or changed by reason of the fuel consumption of the VESSEL's main engine, as determined by the engine manufacturer's shop trial as per the SPECIFICATIONS being more than the guaranteed fuel consumption of the VESSEL's main engine as defined in Article I paragraph 2 hereof, if such excess is not more than five per cent (5%) over the guaranteed fuel consumption.
|
(b) |
However, as for the excess of more than five percent (5%) in the actual fuel consumption over the guaranteed fuel consumption of the VESSEL's main engine, the CONTRACT PRICE shall be reduced by U.S. Dollars Fifteen Thousand Three Hundred (US$15,300) for each full one per cent (1%) increase in fuel consumption in excess of the said five per cent (5%) increase in fuel consumption [fraction of less than one per cent (1%) shall be regarded as a full one percent (1%)]. However, unless the parties agree otherwise, the total
|
(c) |
If such actual fuel consumption exceeds the guaranteed fuel consumption of the VESSEL's main engine by more than eight percent (8%), the BUYER, at its option, may, subject to the BUILDER's right to effect alterations or corrections as specified in Article VI. 5. hereof, reject the main engine or require rectification thereof to the BUYER's complete satisfaction. If the BUILDER is unable to comply with the BUYER's request as aforesaid or if the BUYER elects to reject the main engine then the BUYER may cancel this CONTRACT by the BUYER sending a notice of cancellation to the BUILDER in writing or by email or facsimile, and the provisions of Article X.5 shall apply, or may accept the VESSEL at a reduction in the CONTRACT PRICE as above provided for the eight percent (8%) increase only.
|
4. |
DEADWEIGHT BELOW CONTRACT REQUIREMENTS
|
(a) |
The CONTRACT PRICE of the VESSEL shall not be affected or changed, if the actual deadweight determined as provided in this CONTRACT and the SPECIFICATIONS, is below the guaranteed deadweight as defined in Article I paragraph 2 hereof by one point five per cent (1.5%) of the guaranteed deadweight or less.
|
(b) |
However, should the deficiency in the actual deadweight of the VESSEL be more than one point five per cent (1.5%) of the guaranteed deadweight (disregarding fractions of less than one (1) metric ton), the CONTRACT PRICE shall be reduced by the sum of U.S. Dollars Two Hundred Seventy (US$270) for each one (1) metric ton deficiency (disregarding fractions of less than one (1) metric ton) in excess of the said one point five per cent (1.5%) of deficiency.
|
(c) |
In the event of such deficiency in the deadweight of the VESSEL being more than four per cent (4%) of the guaranteed deadweight, the BUYER, at its option, may, subject to the BUILDER's right to effect alterations or corrections as specified in Article VI. 5. hereof, cancel this CONTRACT by the BUYER sending a notice of cancellation to the BUILDER in writing or by email or facsimile, and the provisions of Article X.5 shall apply, or accept the VESSEL at a reduction in the CONTRACT PRICE as above provided for four per cent (4%) of deficiency only.
|
5. |
EFFECT OF CANCELLATION
|
6. |
CUMULATIVE EFFECT OF LIQUIDATED DAMAGES
|
1. |
APPOINTMENT OF BUYER'S REPRESENTATIVE
|
2. |
AUTHORITY OF THE BUYER'S REPRESENTATIVE
|
3. |
APPROVAL OF DRAWINGS
|
(a) |
The BUILDER shall submit to the BUYER three (3) copies of each of the plans and drawings to be submitted to the BUYER for its approval at its address as set forth in Article XVIII hereof. The BUYER shall, within twenty one (21) days including mailing time after receipt thereof, return to the BUILDER one (1) copy of such plans and drawings
|
(b) |
When and if the BUYER'S REPRESENTATIVE shall have been sent by the BUYER to the SHIPYARD in accordance with Paragraph 1 of this Article, the BUILDER may submit the remainder, if any, of the plans and drawings in the agreed list, to the BUYER'S REPRESENTATIVE for his approval, unless otherwise agreed upon between the parties hereto.
|
(c) |
In the event that the BUYER or the BUYER'S REPRESENTATIVE shall fail to return the plans and drawings to the BUILDER within the time limit as hereinabove provided, such plans and drawings shall be deemed to have been automatically approved without any comment. In the event the plans and drawings submitted by the BUILDER to the BUYER or the BUYER'S REPRESENTATIVE in accordance with this Article do not meet with the BUYER's or the BUYER'S REPRESENTATIVE's approval and the parties cannot reach agreement between them, the matter may be submitted by either party hereto for determination pursuant to Article XIII hereof. If the BUYER's comments on the plans and drawings that are returned to the BUILDER by the BUYER within the said time limit are not clearly specified or detailed, the BUILDER shall seek clarification from the BUYER prior to implementing them which clarification must be provided in writing by the BUYER within seven (7) days of such request from the BUILDER. If the BUYER shall fail to provide the BUILDER with such clarification within the said time limit, then the BUILDER shall be entitled to place its own interpretation on such comments in implementing them.
|
(d) |
Notwithstanding the provision hereinabove, the approved plans and drawings of the BUILDER'S Hull No. S442 shall be deemed to have been approved by the BUYER and the CLASSIFICATION SOCIETY for the VESSEL except any partial plans and partial drawings need to be changed due to the Buyer's comment (Meeting Memo Ref. No. TK-16180-REPLY-R2). The selected maker for the BUILDER's Hull No. S442 shall be deemed to have been elected by the BUYER without other selection procedure and the changed makers due to the Buyer's comment (Meeting Memo Ref. No. TK-16180-REPLY-R2) including BWTS (Panasia) and GRP ballast line NOV FGS.
|
4. |
SALARIES AND EXPENSES
|
5. |
RESPONSIBILITY OF THE BUILDER
|
(a) |
The BUILDER shall provide the BUYER'S REPRESENTATIVE and his assistants free of charge with suitably furnished office space at, or in the immediate vicinity of, the SHIPYARD together with telephone, broadband internet access, e-mail, facsimile, air conditioning, lavatory facilities and such other reasonable facilities as may be necessary to enable the BUYER'S REPRESENTATIVE and his assistants to carry out their work under this CONTRACT. However, the BUYER shall pay for the communication charges of the telephone, broadband internet, e-mail or facsimile facilities used by the BUYER'S REPRESENTATIVE or his assistants.
|
(b) |
The BUYER'S REPRESENTATIVE and his assistants shall at all times remain the employees of the BUYER. The BUILDER shall not be liable to the BUYER or the BUYER'S REPRESENTATIVE or to his assistants or to the BUYER's employees or agents for personal injuries, including death, during the time they, or any of them, are on the VESSEL, or within the premises of either the BUILDER or the SHIPYARD or its sub-contractors, or are otherwise engaged in and about the construction of the VESSEL, unless, however, such personal injuries, including death, are caused by the negligence of the BUILDER, the SHIPYARD, its sub-contractors, or its or their employees or agents. The BUILDER shall not be liable to the BUYER for damages to, or destruction of property of the BUYER or of the BUYER'S REPRESENTATIVE or his assistants or the BUYER's employees or agents, unless such damages, loss or destruction is caused by the negligence of the BUILDER, the SHIPYARD, its sub-contractors, or its or their employees or agents.
|
6. |
RESPONSIBILITY OF THE BUYER
|
1. |
HOW EFFECTED
|
2. |
SUBSTITUTION OF MATERIAL
|
3. |
CHANGES IN RULES AND REGULATIONS
|
(a) |
any increase or decrease in the CONTRACT PRICE of the VESSEL that is occasioned by such compliance;
|
(b) |
any extension or advancement in the Delivery Date of the VESSEL that is occasioned by such compliance;
|
(c) |
any increase or decrease in the deadweight and/or cubic capacity of the VESSEL, if such compliance results in any increase or reduction in the deadweight and/or cubic capacity ;
|
(d) |
adjustment of the speed requirements if such compliance results in any increase or reduction in the speed ; and
|
(e) |
any other alterations in the terms of this CONTRACT or of the SPECIFICATIONS or the PLAN or both, if such compliance makes such alterations of the terms necessary.
|
1. |
NOTICE
|
2. |
WEATHER CONDITION
|
3. |
HOW CONDUCTED
|
4. |
CONSUMABLE STORES
|
5. |
ACCEPTANCE OR REJECTION
|
(a) |
The BUILDER shall as soon as possible following the completion of the trials of the VESSEL deliver to the BUYER a detailed report setting out the results of the trials and an analysis of such results and confirmation that the BUILDER considers that the results of the trial run indicate that the VESSEL is in all respects in conformity with this CONTRACT and the SPECIFICATIONS and the PLAN. The BUYER shall within seven (7) days after receipt of such report, notify the BUILDER in writing of its acceptance of the VESSEL, or of its rejection of the VESSEL, or of the details in respect of which the VESSEL does not conform to the SPECIFICATIONS and the PLAN or this CONTRACT.
|
(b) |
If, during any sea trial, any breakdown occurs entailing interruption or irregular performance which can be repaired on board, the trial shall be continued after such repairs and be valid in all respects, provided the BUYER and the CLASSIFICATION SOCIETY agrees on the extent of such repairs being carried out.
|
(c) |
However, if, during or after the trial run, it becomes apparent that the VESSEL or any part of her machinery or equipment does not conform to the requirements of the CONTRACT, the PLAN and/or the SPECIFICATIONS, the BUILDER shall correct such non-conformity and perform such tests and/or trials as are necessary to confirm conformity to the CONTRACT, the PLAN and/or the SPECIFICATIONS.
|
(d) |
Save as above provided, The BUYER shall, within three (3) days after completion of the trial run and the receipt of all records of tests and trials carried out on that trial run, notify the BUILDER in writing or by e-mail or facsimile confirmed in writing of its acceptance of the VESSEL or of the details in respect of which the VESSEL does not conform to the SPECIFICATIONS or this CONTRACT or of the details in respect of which the VESSEL does not conform to the SPECIFICATIONS or this CONTRACT.
|
(e) |
However, the BUYER shall not be entitled to reject the VESSEL by reason of any minor or insubstantial items judged from the point of view of standard shipbuilding and shipping practice as not being in conformity with the SPECIFICATIONS, but, in that case, the BUILDER shall not be released from the obligation to correct and/or remedy such minor or insubstantial items as soon as practicable after the delivery of the VESSEL.
|
(f) |
If inconvenient for the VESSEL to have any non-conformities with the CONTRACT, the PLAN and/or the SPECIFICATIONS corrected and/or remedied at the SHIPYARD, the BUILDER may, at the BUYER's option, arrange to have the corrections or remedies carried out elsewhere, and may, if practicable and at the BUYER's option, do such work while the VESSEL is sailing. The BUYER may in its absolute discretion, if proposed by the BUILDER, decide to accept a payment from the BUILDER in lieu of such items being corrected and/or remedied, which payment in lieu shall first be agreed between the BUILDER and the BUYER.
|
6. |
EFFECT OF ACCEPTANCE
|
1. |
TIME AND PLACE
|
2. |
WHEN AND HOW EFFECTED
|
3. |
DOCUMENTS TO BE DELIVERED TO THE BUYER
|
(a) |
PROTOCOL OF TRIALS of the VESSEL made pursuant to this CONTRACT and the SPECIFICATIONS,
|
(b) |
PROTOCOL OF INVENTORY of the equipment of the VESSEL, including spare parts, all as specified in the SPECIFICATIONS,
|
(c) |
PROTOCOL OF CONSUMABLE NATURE, such as all fuel oil and fresh water remaining in tanks if its cost is charged to the BUYER under Article VI. 4. hereof,
|
(d) |
DRAWING AND PLANS pertaining to the VESSEL as stipulated in the SPECIFICATIONS, which shall be furnished to the BUYER at no additional cost,
|
(e) |
ALL CERTIFICATES required to be furnished upon delivery of the VESSEL pursuant to this CONTRACT, the SPECIFICATIONS and the customary shipbuilding practice, including
|
(i) |
Classification Certificate
|
(ii) |
Safety Construction Certificate
|
(iii) |
Safety Equipment Certificate
|
(iv) |
Safety Radiotelegraphy Certificate
|
(v) |
International Loadline Certificate
|
(vi) |
International Tonnage Certificate
|
(vii) |
BUILDER's Certificate
|
(viii) |
Ship Sanitation Control Exemption Certificate
|
(f) |
DECLARATION OF WARRANTY of the BUILDER that the VESSEL is delivered to the BUYER free and clear of any liens, claims, charges, mortgages, or other encumbrances upon the BUYER's title thereto, and in particular, that the VESSEL is absolutely free of all burdens in the nature of imposts, taxes, or charges imposed by the prefecture or country of the port of delivery, as well as of all liabilities of the BUILDER to its sub-contractors and employees and of all liabilities arising from the operation of the VESSEL in trial runs, or otherwise, prior to delivery except as otherwise provided under this CONTRACT.
|
(g) |
BUILDER'S CERTIFICATE
|
(h) |
CERTIFICATE OF NON-REGISTRATION
|
(i) |
COMMERCIAL INVOICES covering the last instalment and modifications.
|
(j) |
BILL OF SALE or other document that certifies that the title of the VESSEL passes to the BUYER.
|
(k) |
Such other documents as the BUYER may reasonably require in connection with the registration of the VESSEL, which shall be agreed at least twenty eight (28) days prior to the DELIVERY DATE.
|
4. |
TENDER OF THE VESSEL
|
5. |
TITLE AND RISK
|
6. |
REMOVAL OF THE VESSEL
|
1. |
CAUSES OF DELAY
|
2. |
NOTICE OF DELAYS
|
3. |
RIGHT TO CANCEL FOR EXCESSIVE DELAY
|
(a) |
Such future date shall become the contractual delivery date for the purposes of this CONTRACT but this new date shall not be subject to any further extension by reason of permissible delays as herein provided, and
|
(b) |
If the VESSEL is not delivered by such revised contractual delivery date, the BUYER shall have the same right to liquidated damages and rights of cancellation upon the same terms as provided in this CONTRACT.
|
4. |
DEFINITION OF PERMISSIBLE DELAYS
|
1. |
GUARANTEE
|
2. |
NOTICE OF DEFECTS
|
3. |
REMEDY OF DEFECTS
|
(a) |
The BUILDER shall remedy, at its expense, any DEFECT against which the VESSEL is guaranteed under this Article, by making all necessary repairs or replacements at the SHIPYARD or elsewhere as provided for in (b) hereinbelow.
|
(b) |
However, if it is impractical to bring the VESSEL to the SHIPYARD, the BUYER may cause the necessary repairs or replacements to be made elsewhere which is deemed
|
(c) |
In any case, the VESSEL shall be taken at the BUYER's costs and responsibility to the place elected, ready in all respects for such repairs or replacements and in any event, the BUILDER shall not be responsible for towage, dockage, wharfage, port charges or any other cost or expenses whatsoever incurred by the BUYER in getting and keeping the VESSEL ready for such repairs or replacements.
|
(d) |
In the event that it is necessary for the BUILDER to forward a replacement for a defective part under this guarantee, replacement parts shall be shipped to the BUYER under the terms of F.O.B. port of the country where they are to be purchased.
|
(e) |
The BUILDER reserves the option to retrieve, at the BUILDER's cost, any of the replaced equipment/parts in case DEFECTS are remedied in accordance with the provisions in this Article.
|
(f) |
Any dispute under this article shall be referred to arbitration in accordance with the provisions of Article XIII hereof.
|
4. |
EXTENT OF BUILDER'S RESPONSIBILITY
|
(a) |
After delivery of the VESSEL the BUILDER shall have no responsibility for any other DEFECTS whatsoever in the VESSEL than the DEFECTS specified in paragraph 1 of this Article, unless such defect was caused or occasioned by the negligence of the BUILDER, its subcontractors or their respective employees within the Guarantee Period. The BUILDER shall have no liability whatsoever in any circumstances whatsoever to the BUYER or to any third party for anything except the cost of repairing the DEFECT itself. The BUILDER shall not in any circumstances be responsible or liable for any consequential or special losses, damages or expenses including, but not limited to, loss of time, loss of profit or earning or demurrage directly or indirectly occasioned to the BUYER or any third party by reason of the DEFECTS specified in paragraph 1 of this Article or due to repairs or other works done to the VESSEL to remedy such DEFECTS. After delivery, the BUYER shall hold the BUILDER harmless and indemnify the BUILDER against any claim from the BUYER or any third party whatsoever in respect of any such matters and in respect of any other claims relating to the VESSEL for which the BUILDER does not expressly give a warranty to the BUYER under this Article.
|
(b) |
The BUILDER shall not be responsible for any DEFECTS in any part of the VESSEL which may subsequent to delivery of the VESSEL have been replaced or in any way repaired by any other contractor, or for any DEFECTS which have been caused or aggravated by omission or improper use and maintenance of the VESSEL on the part of the BUYER, its servants or agents or by ordinary wear and tear or by any other circumstances beyond the control of the BUILDER.
|
(c) |
The guarantee contained as hereinabove in this Article replaces and excludes any other liability, guarantee, warranty and/or condition whether expressly set out in this CONTRACT or imposed or implied by the law, customary, statutory or otherwise, by reason of the construction and sale of the VESSEL by the BUILDER for and to the BUYER.
|
5. |
ASSIGNMENT OF SUPPLIER'S GUARANTEES
|
1. |
CURRENCY
|
2. |
TERMS OF PAYMENT
|
(a) |
First Instalment
|
(b) |
Second
Instalment
|
(c) |
Third Instalment
|
(d) |
Fourth Instalment
|
(e) |
Fifth Instalment
|
(f) |
Sixth Instalment
|
(g) |
Seventh Instalment
|
(h) |
Eighth Instalment
|
(i) |
Ninth Instalment
|
3. |
DEMAND FOR PAYMENT
|
4. |
METHOD OF PAYMENT
|
(a) |
All the pre-delivery payments and the payment due on delivery in settlement of the CONTRACT PRICE as provided for in Paragraph 2 of this Article shall be made in U.S. Dollars on or before the DUE DATE thereof by telegraphic transfer as follows;
|
(i) |
The payment of the first, second, third, fourth, fifth, sixth, seventh and eighth instalments shall be made to the account no.:
117-JCD-1016942 of the
KEB Hana Bank (hereinafter called the "KEB HANA") in favour of the BUILDER or any other bank in favor of the BUILDER, as designated and notified by the BUILDER to the BUYER at least three (3) business days prior to the DUE DATE.
|
(ii) |
The ninth instalment as provided for in Paragraph 2.(h) of this Article shall be deposited at the account of the KEB HANA, Account No. 117-JCD-1016942, or any other bank in favor or the BUILDER, as designated and notified by the BUILDER, in an account in the name of the BUYER by telegraphic transfer remittance at least three (3) business days prior to the scheduled delivery date of the VESSEL as reasonably calculated and notified by the BUILDER, with instructions valid for fifteen (15) banking days that the said instalment is unconditionally payable to the BUILDER against presentation by the BUILDER to the KEB HANA, Seoul, Korea or such other bank where the said amount is deposited of a duplicate original copy of the PROTOCOL OF DELIVERY AND ACCEPTANCE of the VESSEL signed by the BUILDER and the BUYER.
|
(b) |
Simultaneously with each of such payments, the BUYER shall advise the BUILDER of the details of the payments by e-mail or facsimile and at the same time, the BUYER shall cause the BUYER's remitting Bank to advise the KEB HANA, or any other bank, Seoul, Korea as the case may be, of the details of such payments by authenticated bank cable or telex.
|
5. |
REFUND BY THE BUILDER
|
6. |
TOTAL LOSS
|
(a) |
to build another vessel in place of the VESSEL so lost and deliver it under this CONTRACT to the BUYER, provided that the parties hereto shall have agreed in writing to a reasonable cost and time for the construction of such vessel in place of the lost VESSEL, and in which case, any amounts recovered under the insurance referred to in Article XXI will be applied to the construction of the VESSEL; or
|
(b) |
to refund to the BUYER the full amount of the total sums paid by the BUYER to the BUILDER under the provisions of Paragraph 2 of this Article together with interest thereon at the rate of Three per cent (3%) per annum from the date following the date of receipt by the BUILDER of such pre-delivery instalment(s) to the date of payment by the BUILDER to the BUYER of the refund, and to pay to the BUYER the invoiced cost to the BUYER of all BUYER's Supplies which were incorporated into the VESSEL, and either (i) to return to the BUYER all BUYER's Supplies which were not incorporated into the VESSEL, or (ii) to pay to the BUYER the invoiced cost to the BUYER of all such supplies.
|
7. |
DISCHARGE OF OBLIGATIONS
|
8. |
REFUND GUARANTEE
|
9. |
PERFORMANCE GUARANTEE
|
1. |
DEFINITION OF BUYER'S DEFAULT
|
(a) |
If the first, second, third, fourth, fifth, sixth, seventh and eighth instalment is not paid to the BUILDER within respective DUE DATE of such instalments; or
|
(b) |
If the ninth instalment is not deposited in accordance with Article X.4.(a)(ii) hereof or if the said ninth instalment deposit is not released to the BUILDER against presentation by the BUILDER of a copy of the original PROTOCOL OF DELIVERY AND ACCEPTANCE; or
|
(c) |
If the BUYER fails to take delivery of the VESSEL within five (5) days when the VESSEL is duly tendered for delivery by the BUILDER under the provisions of Article VII hereof; or
|
(d) |
If an order or an effective resolution shall be passed for winding up of the BUYER (except for the purpose of reorganization, merger or amalgamation).
|
2. |
EFFECT OF THE BUYER'S DEFAULT ON OR BEFORE THE DELIVERY OF THE VESSEL
|
(a) |
The DELIVERY DATE of the VESSEL shall be extended automatically for the actual period of such default to the extent that such default has actually delayed the construction of the VESSEL and the BUILDER shall not be obliged to pay any liquidated damages for the delay in delivery of the VESSEL actually caused thereby.
|
(b) |
The BUYER shall pay to the BUILDER interest at the rate of Four percent (4%) per annum in respect of the instalment(s) in default from the respective DUE DATE to the date of actual receipt by the BUILDER of the full amount of such instalment(s).
|
(c) |
If the BUYER is in default in payment of any of the instalment(s) due and payable prior to or simultaneously with the delivery of the VESSEL, the BUILDER shall, in writing or by
|
(d) |
If any of the BUYER's default continues for a period of fourteen (14) days after the BUILDER's notification to the BUYER of such default, the BUILDER may, at its option, rescind this CONTRACT by serving upon the BUYER a written notice or e-mail or facsimile notice of rescission confirmed in writing.
|
(e) |
In the event of such cancellation by the BUILDER of this CONTRACT due to the BUYER's default as provided for in paragraph 1 above, the BUILDER shall be entitled to retain and apply the instalments already paid by the BUYER to the recovery of the BUILDER's loss and damage due to the BUYER's default and the cancellation of this CONTRACT and at the same time the BUILDER shall have the full right and power either to complete or not to complete the VESSEL which is the sole property of the BUILDER as it deems fit, and to sell the VESSEL in its complete or incomplete state at a public or private sale on such terms and conditions as the BUILDER thinks fit without being answerable for any loss or damage but at the true market price in the prevailing market conditions
.
|
(f) |
In no event shall the BUYER's total liability in the event of the BUILDER rescinding this CONTRACT exceed one hundred and five percent (105%) of the CONTRACT PRICE.
|
3. |
DEFINITION OF BUILDER'S DEFAULT
|
- |
if the BUILDER, without reasonable excuse, intentionally delays in the commencement of steel cutting, keel laying and launching of the VESSEL in accordance with the latest milestone event notice informed to the BUYER for a period of sixty five (65) days or more and the BUILDER has not rectified the same within fourteen (14) days of being notified by the BUYER of such delay. However, in any case, the BUILDER reserves its full rights to change the milestone events in accordance with the BUILDER's production planning.
|
- |
if the BUILDER shall apply for or consent to the appointment of a receiver, trustee or liquidator, shall be adjudicated insolvent, shall apply to the courts for protection from its creditors, file a voluntary petition in bankruptcy or take advantage of any insolvency law, or any action shall be taken by the BUILDER having an effect similar to any of the foregoing or the equivalent thereof in any jurisdiction;
|
- |
the filing of a petition or the making of an order or the passing of an effective resolution for the winding-up of the BUILDER or the placing of the BUILDER under court protection or the appointment of a receiver of the undertaking or property of the BUILDER or the insolvency of or the cessation of the carrying on of business by the BUILDER or any analogous proceedings;
|
- |
the BUILDER, without prior written consent of the BUYER, removes the VESSEL from the SHIPYARD or assigns, sub-lets or subcontracts performance of the whole or part of its obligations except as provided for in this CONTRACT or usual shipbuilding practice of the BUILDER or as agreed by BUYER;
|
- |
the BUILDER sells or transfers title to the VESSEL to a third party or a ship owner except due to rescission of the CONTRACT by the BUYER's default; and/or
|
- |
if the Refund Guarantee ceases to be valid for whatever reason subject to the last paragraph of Article X 8. of this CONTRACT or the Refund Guarantor enters in to any insolvency or similar proceeding as defined herein.
|
4. |
EFFECT OF THE BUILDER'S DEFAULT
|
5. |
OTHER BUILDER'S DEFAULT
|
1. |
RESPONSIBILITY OF THE BUYER
|
(a) |
furnished the BUYER with the time schedule referred to above, two (2) months prior to installation of the BUYER'S SUPPLIES and
|
(b) |
given the BUYER written notice of any delay in delivery of the BUYER'S SUPPLIES and the necessary document or advice for such supplies as soon as the delay occurs which might give rise to a claim by the BUILDER under this Paragraph.
|
2. |
RESPONSIBILITY OF THE BUILDER
|
1. |
DECISION BY THE CLASSIFICATION SOCIETY
|
2. |
LAWS APPLICABLE
|
3. |
PROCEEDINGS OF ARBITRATION
|
4. |
EXPENSES
|
5. |
ENTRY IN COURT
|
6. |
ALTERATION OF DELIVERY DATE
|
1. |
TAXES
|
2. |
DUTIES
|
1. |
PATENTS, TRADEMARKS AND COPYRIGHTS
|
2. |
RIGHTS TO THE SPECIFICATIONS, PLANS AND ETC.
|
3. |
ACCESS TO INFORMATION
|
To the BUILDER
|
:
|
HYUNDAI MIPO DOCKYARD CO., LTD.
100, Bangeojinsunhwan-Doro, Dong-Gu, Ulsan 682-712, Korea
|
Attention:
|
Mr. G. H. Park/ Contract Management Dep't.
Tel : +82 52 250 3071
Facsimile: +82 52 250 3060
E-mail :khpark
@hmd.co.kr
|
|
To the SHIPYARD
|
:
|
HYUNDAI-VINASHIN SHIPYARD CO., LTD.
01 My Giang, Ninh Phuoc Commune,
Ninh Hoa District, Khanh Hoa Province, Vietnam
|
Attention:
|
Mr. K. H. Kim / Contract Management Dep't.
Tel : +84 58 3622 757
Facsimile : +84 58 3622 018
E-mail :candokim
@hmd.co.kr
|
|
To the BUYER
|
:
|
CITY OF ATHENS INC.
C/O CENTRAL SHIPPING MONACO S.A.M.
Palais De la Scala, 1 Avenue Henry Durant, MC 98000, Monaco
|
Attention :
|
Mr. Andreas M. Louka, Legal Advisor
Tel : +30 210 8128 320
Facsimile : +30 210 6141 272
E-mail : legal@centralmare.com
|
|
Attention :
|
Mr. Souroullas Demetris P., Chief Technical Officer
Tel : +30 210 8128 290
Facsimile : +30 210 6141 276
E-mail : dps@centralmare.com
|
1. |
EXTENT OF INSURANCE COVERAGE
|
2. |
APPLICATION OF THE RECOVERED AMOUNT
|
(a) |
Partial Loss :
|
(b) |
Total Loss :
|
3. |
TERMINATION OF BUILDER'S OBLIGATION TO INSURE
|
1. |
REPRESENTATIONS OF THE PARTIES
|
(a) |
It will comply with the laws of any jurisdiction applicable to such party as it relates to this CONTRACT, including but not limited to any applicable anti-corruption and anti-bribery laws., also including, without limitation, the United States Foreign Corrupt Practices Act ("US FCPA"), the UK Bribery Act 2010 ("UK Bribery Act") and the anti-bribery or anti-corruption laws of Korea as such laws may be amended from time to time;
|
(b) |
In connection with this CONTRACT, it has not and will not make any payments or gifts or provide other advantages, or any offers or promises of payments or gifts or other advantages of any kind, directly or indirectly, to:
|
(i) |
any person or entity with the intention of obtaining or retaining a business advantage for itself or the other party to this CONTRACT;
|
(ii) |
any official or member of any government or any agency or instrumentality thereof; any official or member of any public international organisation or any agency or instrumentality thereof; any or official of a political party or any candidate for political office (herein 'public official'); or any person while knowing or reasonably suspecting that all or a portion of such money or thing of value will be offered, given or promised, directly or indirectly, to any public official, in violation of the UK Bribery Act, the US FCPA or the laws of Korea.
|
(c) |
In connection with this CONTRACT, it has not and will not request, agree to accept or accept from any person or entity any payments or gifts or other advantages, or any offers or promises of payments or gifts or other advantages of any kind, directly or indirectly, as a reward or inducement to perform its obligations under this CONTRACT in any way improperly.
|
(d) |
undertakes that it shall apply standards of business conduct which are consistent with the BUILDER's Business Partner Code of Conduct, found at http://ethics.hhi.co.kr/html_eng/2_moral/sub_02.htm, a hard copy of which is available on request.
|
2. |
INDEMNIFICATION
|
For and on behalf of
|
For and on behalf of
|
|
CITY OF ATHENS INC.
|
Hyundai Mipo Dockyard Co., Ltd.
|
|
/s/ Evangelos J. Pistiolis
|
/s/ Eui-Sung Yoon
|
|
Name: Evangelos J. Pistiolis
|
Name: Eui-Sung Yoon
|
|
Title: Attorney-In-Fact
|
Title: Attorney-In-Fact
|
|
WITNESS
|
WITNESS
|
|
/s/ W.J. Kim
|
/s/ Andreas Louka
|
|
Name: W.J. Kim
|
Name: Andreas Louka
|
|
Title: Attorney in fact
|
Title: Advocate
|
1. |
In consideration of the Buyer entering into the Contract with the Builder, we hereby issue our irrevocable letter of guarantee number
[]
(hereinafter referred to as the "
Guarantee
") (in favor of
[Name of the Buyer]
(herein referred to as the "
Buyer
" or
"you"
) for the account of
[Name of the Builder]
(herein referred to as the "
Builder
") as follows in connection with the shipbuilding contract dated
[]
(herein referred to as the "
Contract
"),made by and between the Buyer and the Builder for the construction and sale of
[]
having Builder's Hull No.
[]
(hereinafter referred to as the "
Vessel
").
|
2. |
If in connection with the terms of the Contract, the Buyer shall become entitled to a refund of one or more of the advance payments made to the Builder prior to the delivery of the Vessel, we hereby irrevocably guarantee the repayment of the same to the Buyer after the Buyer's written demand together with interest thereon at the Agreed Interest Rate from the date following the date of receipt by the Builder to the date of remittance by telegraphic transfer of such refund.
|
3. |
This Guarantee is an undertaking to make the above payments against a written demand conforming with the requirements of this Guarantee and is independent from the Contract. Our obligation to make payment under this Guarantee will not be discharged by amendments to the Contract, disputes under the Contract or any invalidity of the Contract.
|
4. |
The amount of this Guarantee will be automatically increased upon the Builder's receipt of the respective further installments: each time by the amount of installment of:
|
(a) |
[]
U.S. Dollars (US$
[]
);
|
(b) |
[]
U.S. Dollars (US$
[]
);
|
(c) |
[]
U.S. Dollars (US$
[]
);
|
(d) |
[]
U.S. Dollars (US$
[]
);
|
(e) |
[]
U.S. Dollars (US$
[]
);
|
(f) |
[]
U.S. Dollars (US$
[]
);
|
(g) |
[]
U.S. Dollars (US$
[]
); and
|
(h) |
[]
U.S. Dollars (US$
[]
).
|
5. |
In case any refund is made to you by the Builder or by us under this Guarantee, our liability hereunder shall be automatically reduced to reflect the remaining amount due (plus interest).
|
6. |
For the purposes of this Guarantee,
"Agreed Interest Rate"
means four percent (4%) per annum provided that in the event of cancellation of the Contract. as a result of delays due to Force Majeure (as defined in the Contract) or other causes beyond the control of the Builder or in the case of total loss of the Vessel, the interest rate shall be reduced to three per cent (3%) per annum as provided in Article X of the Contract.
|
7. |
This Guarantee is payable against our simple receipt of a signed statement from you certifying that Buyer's demand for refund has been made in conformity with the Contract and the Builder has failed to make the refund within 30 days after your demand to the Builder. Any notice, claim or demand to be given or made by you under this Guarantee may be served on us either by post or by tested telex or by authorized SWIFT or equivalent as follows:
|
8. |
Refund shall be made to you by telegraphic transfer (net of bank charges) in United States Dollars within 30 days from the receipt of your demand. All payments under this Guarantee shall be made without deduction or withholding for or on account of any taxes, duties or charges whatsoever unless we are compelled by law to deduct or withhold the same, in which case we shall make the minimum deduction or withholding permitted by law and will pay such additional amounts as may be necessary in order that the amount received by you after such deductions or withholdings shall be equal to the amount which would have
|
9. |
This Guarantee shall expire and become null and void upon the earliest of:
|
(a) |
receipt by the Buyer of the sum guaranteed hereby;
|
(b) |
acceptance by the Buyer of the delivery of the Vessel; or
|
(c) |
rescission or termination of the Contract due to the Buyer's default in accordance with the Contract.
|
10. |
Notwithstanding any provision herein, in the event that within 30 days from the date of your demand to the Builder referred to above, we receive notification from you or the Builder accompanied by written confirmation by an arbitrator to the effect that your claim to cancel the Contract or your claim for refund thereunder has been disputed and referred to arbitration in accordance with the Contract, we shall under this Guarantee refund to you the sum (not exceeding
[]
U.S. Dollars (US$
[]
) plus interest by the same manner hereinabove) due to you from the Builder pursuant to the award made under such arbitration (or any judgment on appeal therefrom) immediately upon receipt from you of the demand for payment of the sum and a copy of the award (or any judgment on appeal therefrom).
|
11. |
This Guarantee may be assigned or transferred by the BUYER with prior written notice. A person who is not a party to this Guarantee has no rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Guarantee.
|
12. |
This Guarantee shall be governed by and construed in accordance with the laws of [
England
] and any dispute arising under or in connection with this guarantee shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory modification thereof as currently in force before three arbitrators, with one to be appointed by each party and the third to be appointed by the two party appointed arbitrators..
|
13. |
We hereby warrant that we are permitted by any relevant law to which we are subject (including, where relevant, the laws of the place or places of each of our incorporation, establishment, regulation, registration and residence) to (i) issue a guarantee in this form, (ii) make payment under this guarantee in United States Dollars and (iii) designate the laws of England and arbitration in London as the applicable law, the forum and the place of jurisdiction, to which we irrevocably submit. We hereby warrant that this guarantee has been, or will be, duly registered with the relevant State authority in any legal jurisdiction in which such registration is required for any reason. We hereby warrant that we have obtained all necessary approvals and authorisations to issue this guarantee.
|
Hyundai Mipo Dockyard Co., Ltd.
|
|
100, Bangeojinsunhwan-Doro, Dong-Gu,
|
|
Ulsan 44113
|
|
Korea
|
Date : , 2016
|
Very truly yours,
|
|
For and on behalf of
|
|
By
|
|
Name :
|
|
Title :
|
|
1. |
The Seller hereby agrees to sell to the Buyer, and the Buyer hereby agrees to purchase from the Seller, the Additional Investment Shares on the same terms and conditions as contained in the SPA, as modified by this Addendum.
|
2. |
The consummation of the Additional Purchase and Sale (the "
Additional Closing
") shall take place at the offices of Central Mare Inc., on the date hereof or on such later date as may be mutually agreed upon by the Parties (the "
Additional Closing Date
"), but in no event later than April 15, 2017.
|
3. |
On the Additional Closing Date, subject to the terms and conditions herein contained, the Seller shall sell, convey, transfer, assign and deliver to the Buyer the Additional Investment Shares free and clear of any and all Liens, together with any necessary assignment documents in form and substance as reasonably requested by the Buyer, and, in consideration therefor, the Buyer shall pay the aggregate purchase price of One Million Five Hundred Thousand U.S. Dollars (U.S.$1,500,000), by wire transfer or by delivery of other immediately available funds to the account specified in Section 1.2 of the SPA.
|
4. |
With respect to the Additional Purchase and Sale, (i) the Representations and Warranties of the Seller contained in Article II of the SPA and the Representations and Warranties of the Buyer contained in Article III of the SPA shall be true and correct as of the date hereof and as of the Additional Closing Date, (ii) the Covenants contained in Article IV of the SPA shall be made as of the date hereof, (iii) the Conditions to Closing contained in Article V of the SPA shall be satisfied at or prior to the Additional Closing Date (unless waived in accordance with the terms of the SPA), and (iv) the miscellaneous provisions of Article VI of the SPA shall apply, in each case, substituting the terms "Closing," "Closing Date" and "Investment Shares" therein with the terms "Additional Closing," "Additional Closing Date," and "Additional Investment Shares," respectively.
|
5. |
Except as set forth in this Addendum, all other terms, conditions, and agreements contained in the SPA shall remain in full force and effect.
|
6. |
This Addendum shall be governed by, and interpreted in accordance with, the laws of the State of New York.
|
7. |
This Addendum may be executed in any number of counterparts, each of which shall be deemed an original for all purposes.
|
BUYER
|
||
STYLE MARITIME LTD.
|
||
By:
|
/s/ Alexandros Tsirikos
|
|
Name:
|
Alexandros Tsirikos
|
|
Title:
|
Director
|
|
SELLER
|
||
MALIBU SHIPMANAGEMENT CO.
|
||
By:
|
/s/ Alexandros Economou
|
|
Name:
|
Alexandros Economou
for and on behalf of Global Servus Limited
|
|
Title:
|
President/Treasurer/Director
|
|
1. |
The Seller hereby agrees to sell to the Buyer, and the Buyer hereby agrees to purchase from the Seller, the Additional Investment Shares on the same terms and conditions as contained in the SPA, as modified by this Addendum.
|
2. |
The consummation of the Additional Purchase and Sale (the "
Additional Closing
") shall take place at the offices of Central Mare Inc., on the date hereof or on such later date as may be mutually agreed upon by the Parties (the "
Additional Closing Date
"), but in no event later than May 31, 2017.
|
3. |
On the Additional Closing Date, subject to the terms and conditions herein contained, the Seller shall sell, convey, transfer, assign and deliver to the Buyer the Additional Investment Shares free and clear of any and all Liens, together with any necessary assignment documents in form and substance as reasonably requested by the Buyer, and, in consideration therefor, the Buyer shall pay the
|
4. |
With respect to the Additional Purchase and Sale, (i) the Representations and Warranties of the Seller contained in Article II of the SPA and the Representations and Warranties of the Buyer contained in Article III of the SPA shall be true and correct as of the date hereof and as of the Additional Closing Date, (ii) the Covenants contained in Article IV of the SPA shall be made as of the date hereof, (iii) the Conditions to Closing contained in Article V of the SPA shall be satisfied at or prior to the Additional Closing Date (unless waived in accordance with the terms of the SPA), and (iv) the miscellaneous provisions of Article VI of the SPA shall apply, in each case, substituting the terms "Closing," "Closing Date" and "Investment Shares" therein with the terms "Additional Closing," "Additional Closing Date," and "Additional Investment Shares," respectively.
|
5. |
Except as set forth in this Addendum, all other terms, conditions, and agreements contained in the SPA shall remain in full force and effect.
|
6. |
This Addendum shall be governed by, and interpreted in accordance with, the laws of the State of New York.
|
7. |
This Addendum may be executed in any number of counterparts, each of which shall be deemed an original for all purposes.
|
BUYER
|
||
STYLE MARITIME LTD.
|
||
By:
|
/s/ Alexandros Tsirikos
|
|
Name:
|
Alexandros Tsirikos
|
|
Title:
|
Director
|
|
SELLER
|
||
MALIBU SHIPMANAGEMENT CO.
|
||
By:
|
/s/ Alexandros Economou
|
|
Name:
|
Alexandros Economou
For and on behalf of Global Servus Limited
|
|
Title:
|
President/Treasurer/Director
|
|
1. |
The Seller hereby agrees to sell to the Buyer, and the Buyer hereby agrees to purchase from the Seller, the Additional Investment Shares on the same terms and conditions as contained in the SPA, as modified by this Addendum.
|
2. |
The consummation of the Additional Purchase and Sale (the "
Additional Closing
") shall take place at the offices of Central Mare Inc., on the date hereof or on such later date as may be mutually agreed upon by the Parties (the "
Additional Closing Date
"), but in no event later than February 6, 2018.
|
3. |
On the Additional Closing Date, subject to the terms and conditions herein contained, the Seller shall sell, convey, transfer, assign and deliver to the Buyer
|
4. |
All payments under this Addendum shall be made in United States Dollars by wire transfer or by delivery of other immediately available funds to the account specified in Section 1.2 of the SPA, as follows:
|
a) |
First Instalment
|
b) |
Second Instalment
|
c) |
Third Instalment
|
4. |
With respect to the Additional Purchase and Sale, (i) the Representations and Warranties of the Seller contained in Article II of the SPA and the Representations and Warranties of the Buyer contained in Article III of the SPA shall be true and correct as of the date hereof and as of the Additional Closing Date, (ii) the Covenants contained in Article IV of the SPA shall be made as of the date hereof, (iii) the Conditions to Closing contained in Article V of the SPA shall be satisfied at or prior to the Additional Closing Date (unless waived in accordance with the terms of the SPA), and (iv) the miscellaneous provisions of Article VI of the SPA shall apply, in each case, substituting the terms "Closing," "Closing Date" and "Investment Shares" therein with the terms "Additional Closing," "Additional Closing Date," and "Additional Investment Shares," respectively.
|
5. |
Except as set forth in this Addendum, all other terms, conditions, and agreements contained in the SPA shall remain in full force and effect.
|
6. |
This Addendum shall be governed by, and interpreted in accordance with, the laws of the State of New York.
|
7. |
This Addendum may be executed in any number of counterparts, each of which shall be deemed an original for all purposes.
|
BUYER
|
||
STYLE MARITIME LTD.
|
||
By:
|
/s/ Alexandros Tsirikos
|
|
Name:
|
Alexandros Tsirikos
|
|
Title:
|
Director
|
|
SELLER
|
||
MALIBU SHIPMANAGEMENT CO.
|
||
By:
|
/s/ Evangelos Pistiolis
|
|
Name:
|
Evangelos Pistiolis
|
|
Title:
|
Attorney-in-fact
|
|
PREAMBLE
|
3
|
||
ARTICLE
|
I
|
: DESCRIPTION AND CLASS
|
4
|
II
|
: CONTRACT PRICE
|
8
|
|
III
|
: ADJUSTMENT OF THE CONTRACT PRICE
|
9
|
|
IV
|
: INSPECTION AND APPROVAL
|
13
|
|
V
|
: MODIFICATIONS, CHANGES AND EXTRAS
|
19
|
|
VI
|
: TRIALS AND COMPLETION
|
22
|
|
VII
|
: DELIVERY
|
26
|
|
VIII
|
: DELAYS AND EXTENSIONS OF TIME (FORCE MAJEURE)
|
30
|
|
IX
|
: WARRANTY OF QUALITY
|
33
|
|
X
|
: PAYMENT AND RESCISSION BY THE BUYER
|
36
|
|
XI
|
: BUYER'S AND BUILDER'S DEFAULT
|
42
|
|
XII
|
: BUYER'S SUPPLIES
|
46
|
|
XIII
|
: ARBITRATION
|
48
|
|
XIV
|
: SUCCESSORS AND ASSIGNS
|
50
|
|
XV
|
: TAXES AND DUTIES
|
51
|
|
XVI
|
: PATENTS, TRADEMARKS AND COPYRIGHTS
|
52
|
|
XVII
|
: INTERPRETATION AND GOVERNING LAW
|
54
|
|
XVIII
|
: NOTICE
|
55
|
|
XIX
|
: EFFECTIVENESS OF THIS CONTRACT
|
57
|
|
XX
|
: EXCLUSIVENESS
|
58
|
|
XXI
|
: INSURANCE
|
59
|
|
XXII
|
: COMPLIANCE AND ANTI-BRIBERY
|
61
|
|
EXHIBIT "A" LETTER OF GUARANTEE
|
64
|
||
EXHIBIT "B" PERFORMANCE GUARANTEE
|
68
|
1. |
DESCRIPTION
|
2. |
BASIC DIMENSIONS AND PRINCIPAL PARTICULARS OF THE VESSEL
|
(a) |
The basic dimensions and principal particulars of the VESSEL shall be :
|
Length, overall
|
abt. 183m
|
||
Length, between perpendiculars
|
174.0m
|
||
Breadth, moulded
|
32.2m
|
||
Depth, moulded
|
19.1m
|
||
Design draught, moulded
|
11.0m
|
||
Scantling draught, moulded
|
13.3m
|
Deadweight, guaranteed
|
:
|
about 49,602 metric tons at the Scantling draught of 13.3 meters on even keel in sea water of specific gravity of 1.025.
|
||
Speed, guaranteed
|
:
|
14.4 knots at the design draught of 11.0 meters at the condition of clean bottom and in calm and deep sea with main engine output of 5,680 kW with 15% sea margin.
|
||
Fuel Consumption, guaranteed
|
:
|
166.9 grams/kW-hour using marine diesel oil having lower calorific value of 10,200kcal/kg at MCR measured at the shop trial with I.S.O reference conditions.
|
(b) |
The dimensions may be slightly modified by the BUILDER, who also reserves the right to make changes to the SPECIFICATIONS and the PLAN if found necessary to suit the local conditions and facilities of the SHIPYARD, the availability of materials and equipment, the introduction of improved production methods or otherwise, subject to the approval of the BUYER which the BUYER shall not withhold unreasonably, and the approval of the CLASSIFICATION SOCIETY.
|
3. |
CLASSIFICATION, RULES AND REGULATIONS
|
(a) |
The VESSEL, including its machinery, equipment and outfitting shall be constructed in accordance with the BUILDER's quality standard and shipbuilding practices.
|
(b) |
The BUILDER shall arrange with the CLASSIFICATION SOCIETY for the assignment by the CLASSIFICATION SOCIETY of representative(s) to the VESSEL during construction. All fees and charges incidental to classification of the VESSEL in compliance with the above specified rules, regulations and requirements of this CONTRACT shall be for the account of the BUILDER.
|
(c) |
The decision of the CLASSIFICATION SOCIETY as to whether the VESSEL complies with the regulations of the CLASSIFICATION SOCIETY shall be final and binding upon the BUILDER and the BUYER. For the avoidance of doubt such decision shall only be final and binding in so far as compliance with the regulations of the CLASSIFICATION SOCIETY and shall have no wider application, including as to whether the VESSEL has been designed, constructed, equipped and completed in accordance with all terms of this CONTRACT.
|
(d) |
The facilities, labour and materials necessary for the safe and convenient conduct of any inspection by the CLASSIFICATION SOCIETY shall be furnished by the BUILDER. All major plans shall be subject to approval, inspection and test by the CLASSIFICATION SOCIETY in accordance with the rules and regulations of the CLASSIFICATION SOCIETY.
|
4. |
SUBCONTRACTING
|
5. |
NATIONALITY OF THE VESSEL
|
1. |
DELAYED DELIVERY
|
(a) |
No adjustment shall be made and the CONTRACT PRICE shall remain unchanged for the first thirty (30) days of the delay in delivery of the VESSEL [ending as of 12 o'clock midnight Vietnamese Standard Time on the thirtieth (30th) day of delay] beyond the Delivery Date calculated as provided in Article VII.1. hereof.
|
(b) |
If delivery of the VESSEL is delayed more than thirty (30) days beyond the date upon which the delivery is due from the BUILDER under the terms of this CONTRACT, then, beginning at midnight of the thirtieth (30th) day after such due date, the CONTRACT PRICE of the VESSEL shall be reduced by U.S. Dollars Seven Thousand Two Hundred (US$7,200) for each full day of delay shall not exceed the amount due to cover the delay of one hundred and sixty five (165) days after thirty (30) days of the delay in delivery of the VESSEL at the rate of deduction as specified hereinabove.
|
(c) |
But, if the delay in delivery of the VESSEL continues for a period of more than one hundred and ninety five days (195) days beyond the date upon which the delivery is due from the BUILDER under the terms of this CONTRACT then, in such event, and after such period has expired, the BUYER may, at its option, cancel this CONTRACT by serving upon the BUILDER a notice of cancellation in writing or by e-mail or facsimile directed to the BUILDER at the address given in this CONTRACT, and the provisions of Article X.5 shall apply. Such cancellation shall be effective as of the date the notice thereof is received by the BUILDER. If the BUYER has not served the notice of cancellation after the aforementioned one hundred and ninety five days (195) days delay in delivery, the BUILDER may demand the BUYER to make an election in accordance with Article VIII.3. hereof.
|
(d) |
For the purpose of this Article, the delivery of the VESSEL shall be deemed to be delayed when and if the VESSEL, after taking into full account extension of the Delivery Date or permissible delays as provided in Article V, VI, VIII, XI or elsewhere in this CONTRACT, is delivered beyond or before the date upon which delivery would then be due under the terms of this CONTRACT.
|
2. |
INSUFFICIENT SPEED
|
(a) |
The CONTRACT PRICE of the VESSEL shall not be affected or changed, if the actual speed, as determined by trial runs more fully described in Article VI hereof, is less than the guaranteed speed as defined in Article I paragraph 2 hereof, provided such deficiency in actual speed is not more than three-tenths (3/10) of a knot below the guaranteed speed.
|
(b) |
However, as for the deficiency of more than three-tenths (3/10) of a knot in actual speed below the guaranteed speed, the CONTRACT PRICE shall be reduced by U.S. Dollars Eighteen Thousand (US$18,000) for each full one-tenth (1/10) of a knot in excess of the said three-tenths (3/10) of a knot of deficiency in speed [fractions of less than one-tenth (1/10) of a knot shall be regarded as a full one-tenth (1/10) of a knot]. However, unless the parties agree otherwise, the total amount of reduction from the CONTRACT PRICE shall not exceed the amount due to cover the deficiency of eight-tenths(8/10) full knot below the guaranteed speed at the rate of reduction as specified above.
|
(c) |
If the deficiency in actual speed of the VESSEL is more than eight-tenths (8/10) of a full knot below the guaranteed speed, then the BUYER, at its option, may, subject to the BUILDER's right to effect alterations or corrections as provided in Article VI.5. hereof, cancel this CONTRACT by the BUYER sending a notice of cancellation to the BUILDER in writing or by email or facsimile, and the provisions of Article X.5 shall apply, or may accept the VESSEL at a reduction in the CONTRACT PRICE as above provided for eight-tenths (8/10) full knot of deficiency only.
|
3. |
EXCESSIVE FUEL CONSUMPTION
|
(a) |
The CONTRACT PRICE of the VESSEL shall not be affected or changed by reason of the fuel consumption of the VESSEL's main engine, as determined by the engine manufacturer's shop trial as per the SPECIFICATIONS being more than the guaranteed fuel consumption of the VESSEL's main engine as defined in Article I paragraph 2 hereof, if such excess is not more than five per cent (5%) over the guaranteed fuel consumption.
|
(b) |
However, as for the excess of more than five percent (5%) in the actual fuel consumption over the guaranteed fuel consumption of the VESSEL's main engine, the CONTRACT PRICE shall be reduced by U.S. Dollars Fifteen Thousand Three Hundred (US$15,300) for each full one per cent (1%) increase in fuel consumption in excess of the said five per cent (5%) increase in fuel consumption [fraction of less than one per cent (1%) shall be regarded as a full one percent (1%)]. However, unless the parties agree otherwise, the total
|
(c) |
If such actual fuel consumption exceeds the guaranteed fuel consumption of the VESSEL's main engine by more than eight percent (8%), the BUYER, at its option, may, subject to the BUILDER's right to effect alterations or corrections as specified in Article VI. 5. hereof, reject the main engine or require rectification thereof to the BUYER's complete satisfaction. If the BUILDER is unable to comply with the BUYER's request as aforesaid or if the BUYER elects to reject the main engine then the BUYER may cancel this CONTRACT by the BUYER sending a notice of cancellation to the BUILDER in writing or by email or facsimile, and the provisions of Article X.5 shall apply, or may accept the VESSEL at a reduction in the CONTRACT PRICE as above provided for the eight percent (8%) increase only.
|
4. |
DEADWEIGHT BELOW CONTRACT REQUIREMENTS
|
(a) |
The CONTRACT PRICE of the VESSEL shall not be affected or changed, if the actual deadweight determined as provided in this CONTRACT and the SPECIFICATIONS, is below the guaranteed deadweight as defined in Article I paragraph 2 hereof by one point five per cent (1.5%) of the guaranteed deadweight or less.
|
(b) |
However, should the deficiency in the actual deadweight of the VESSEL be more than one point five per cent (1.5%) of the guaranteed deadweight (disregarding fractions of less than one (1) metric ton), the CONTRACT PRICE shall be reduced by the sum of U.S. Dollars Two Hundred Seventy (US$270) for each one (1) metric ton deficiency (disregarding fractions of less than one (1) metric ton) in excess of the said one point five per cent (1.5%) of deficiency.
|
(c) |
In the event of such deficiency in the deadweight of the VESSEL being more than four per cent (4%) of the guaranteed deadweight, the BUYER, at its option, may, subject to the BUILDER's right to effect alterations or corrections as specified in Article VI. 5. hereof, cancel this CONTRACT by the BUYER sending a notice of cancellation to the BUILDER in writing or by email or facsimile, and the provisions of Article X.5 shall apply, or accept the VESSEL at a reduction in the CONTRACT PRICE as above provided for four per cent (4%) of deficiency only.
|
5. |
EFFECT OF CANCELLATION
|
6. |
CUMULATIVE EFFECT OF LIQUIDATED DAMAGES
|
1. |
APPOINTMENT OF BUYER'S REPRESENTATIVE
|
2. |
AUTHORITY OF THE BUYER'S REPRESENTATIVE
|
3. |
APPROVAL OF DRAWINGS
|
(a) |
The BUILDER shall submit to the BUYER three (3) copies of each of the plans and drawings to be submitted to the BUYER for its approval at its address as set forth in Article XVIII hereof. The BUYER shall, within twenty one (21) days including mailing time after receipt thereof, return to the BUILDER one (1) copy of such plans and drawings
|
(b) |
When and if the BUYER'S REPRESENTATIVE shall have been sent by the BUYER to the SHIPYARD in accordance with Paragraph 1 of this Article, the BUILDER may submit the remainder, if any, of the plans and drawings in the agreed list, to the BUYER'S REPRESENTATIVE for his approval, unless otherwise agreed upon between the parties hereto.
|
(c) |
In the event that the BUYER or the BUYER'S REPRESENTATIVE shall fail to return the plans and drawings to the BUILDER within the time limit as hereinabove provided, such plans and drawings shall be deemed to have been automatically approved without any comment. In the event the plans and drawings submitted by the BUILDER to the BUYER or the BUYER'S REPRESENTATIVE in accordance with this Article do not meet with the BUYER's or the BUYER'S REPRESENTATIVE's approval and the parties cannot reach agreement between them, the matter may be submitted by either party hereto for determination pursuant to Article XIII hereof. If the BUYER's comments on the plans and drawings that are returned to the BUILDER by the BUYER within the said time limit are not clearly specified or detailed, the BUILDER shall seek clarification from the BUYER prior to implementing them which clarification must be provided in writing by the BUYER within seven (7) days of such request from the BUILDER. If the BUYER shall fail to provide the BUILDER with such clarification within the said time limit, then the BUILDER shall be entitled to place its own interpretation on such comments in implementing them.
|
(d) |
Notwithstanding the provision herein above, the approved plans and drawings of the FIRM VESSEL shall be deemed to have been approved by the BUYER and the CLASSIFICATION SOCIETY for the VESSEL except any partial plans and partial drawings need to be changed due to the Buyer's comment (Meeting Memo Ref. No.:TK-16180(S444)-REPLY-R1). The selected maker for the FIRM VESSEL and Meeting memo (Ref. No.:TK-16180(S444)-REPLY-R1) shall be deemed to have been selected by the Buyer without other selection procedure.
|
4. |
SALARIES AND EXPENSES
|
5. |
RESPONSIBILITY OF THE BUILDER
|
(a) |
The BUILDER shall provide the BUYER'S REPRESENTATIVE and his assistants free of charge with suitably furnished office space at, or in the immediate vicinity of, the SHIPYARD together with telephone, broadband internet access, e-mail, facsimile, air conditioning, lavatory facilities and such other reasonable facilities as may be necessary to enable the BUYER'S REPRESENTATIVE and his assistants to carry out their work under this CONTRACT. However, the BUYER shall pay for the communication charges of the telephone, broadband internet, e-mail or facsimile facilities used by the BUYER'S REPRESENTATIVE or his assistants.
|
(b) |
The BUYER'S REPRESENTATIVE and his assistants shall at all times remain the employees of the BUYER. The BUILDER shall not be liable to the BUYER or the BUYER'S REPRESENTATIVE or to his assistants or to the BUYER's employees or agents for personal injuries, including death, during the time they, or any of them, are on the VESSEL, or within the premises of either the BUILDER or the SHIPYARD or its sub-contractors, or are otherwise engaged in and about the construction of the VESSEL, unless, however, such personal injuries, including death, are caused by the negligence of the BUILDER, the SHIPYARD, its sub-contractors, or its or their employees or agents. The BUILDER shall not be liable to the BUYER for damages to, or destruction of property of the BUYER or of the BUYER'S REPRESENTATIVE or his assistants or the BUYER's employees or agents, unless such damages, loss or destruction is caused by the negligence of the BUILDER, the SHIPYARD, its sub-contractors, or its or their employees or agents.
|
6. |
RESPONSIBILITY OF THE BUYER
|
1. |
HOW EFFECTED
|
2. |
SUBSTITUTION OF MATERIAL
|
3. |
CHANGES IN RULES AND REGULATIONS
|
(a) |
any increase or decrease in the CONTRACT PRICE of the VESSEL that is occasioned by such compliance;
|
(b) |
any extension or advancement in the Delivery Date of the VESSEL that is occasioned by such compliance;
|
(c) |
any increase or decrease in the deadweight and/or cubic capacity of the VESSEL, if such compliance results in any increase or reduction in the deadweight and/or cubic capacity ;
|
(d) |
adjustment of the speed requirements if such compliance results in any increase or reduction in the speed ; and
|
(e) |
any other alterations in the terms of this CONTRACT or of the SPECIFICATIONS or the PLAN or both, if such compliance makes such alterations of the terms necessary.
|
1. |
NOTICE
|
2. |
WEATHER CONDITION
|
3. |
HOW CONDUCTED
|
4. |
CONSUMABLE STORES
|
5. |
ACCEPTANCE OR REJECTION
|
(a) |
The BUILDER shall as soon as possible following the completion of the trials of the VESSEL deliver to the BUYER a detailed report setting out the results of the trials and an analysis of such results and confirmation that the BUILDER considers that the results of the trial run indicate that the VESSEL is in all respects in conformity with this CONTRACT and the SPECIFICATIONS and the PLAN. The BUYER shall within seven (7) days after receipt of such report, notify the BUILDER in writing of its acceptance of the VESSEL, or of its rejection of the VESSEL, or of the details in respect of which the VESSEL does not conform to the SPECIFICATIONS and the PLAN or this CONTRACT.
|
(b) |
If, during any sea trial, any breakdown occurs entailing interruption or irregular performance which can be repaired on board, the trial shall be continued after such repairs and be valid in all respects, provided the BUYER and the CLASSIFICATION SOCIETY agrees on the extent of such repairs being carried out.
|
(c) |
However, if, during or after the trial run, it becomes apparent that the VESSEL or any part of her machinery or equipment does not conform to the requirements of the CONTRACT, the PLAN and/or the SPECIFICATIONS, the BUILDER shall correct such non-conformity and perform such tests and/or trials as are necessary to confirm conformity to the CONTRACT, the PLAN and/or the SPECIFICATIONS.
|
(d) |
Save as above provided, The BUYER shall, within three (3) days after completion of the trial run and the receipt of all records of tests and trials carried out on that trial run, notify the BUILDER in writing or by e-mail or facsimile confirmed in writing of its acceptance of the VESSEL or of the details in respect of which the VESSEL does not conform to the SPECIFICATIONS or this CONTRACT or of the details in respect of which the VESSEL does not conform to the SPECIFICATIONS or this CONTRACT.
|
(e) |
However, the BUYER shall not be entitled to reject the VESSEL by reason of any minor or insubstantial items judged from the point of view of standard shipbuilding and shipping practice as not being in conformity with the SPECIFICATIONS, but, in that case, the BUILDER shall not be released from the obligation to correct and/or remedy such minor or insubstantial items as soon as practicable after the delivery of the VESSEL.
|
(f) |
If inconvenient for the VESSEL to have any non-conformities with the CONTRACT, the PLAN and/or the SPECIFICATIONS corrected and/or remedied at the SHIPYARD, the BUILDER may, at the BUYER's option, arrange to have the corrections or remedies carried out elsewhere, and may, if practicable and at the BUYER's option, do such work while the VESSEL is sailing. The BUYER may in its absolute discretion, if proposed by the BUILDER, decide to accept a payment from the BUILDER in lieu of such items being corrected and/or remedied, which payment in lieu shall first be agreed between the BUILDER and the BUYER.
|
6. |
EFFECT OF ACCEPTANCE
|
1. |
TIME AND PLACE
|
2. |
WHEN AND HOW EFFECTED
|
3. |
DOCUMENTS TO BE DELIVERED TO THE BUYER
|
(a) |
PROTOCOL OF TRIALS of the VESSEL made pursuant to this CONTRACT and the SPECIFICATIONS,
|
(b) |
PROTOCOL OF INVENTORY of the equipment of the VESSEL, including spare parts, all as specified in the SPECIFICATIONS,
|
(c) |
PROTOCOL OF CONSUMABLE NATURE, such as all fuel oil and fresh water remaining in tanks if its cost is charged to the BUYER under Article VI. 4. hereof,
|
(d) |
DRAWING AND PLANS pertaining to the VESSEL as stipulated in the SPECIFICATIONS, which shall be furnished to the BUYER at no additional cost,
|
(e) |
ALL CERTIFICATES required to be furnished upon delivery of the VESSEL pursuant to this CONTRACT, the SPECIFICATIONS and the customary shipbuilding practice, including
|
(i) |
Classification Certificate
|
(ii) |
Safety Construction Certificate
|
(iii) |
Safety Equipment Certificate
|
(iv) |
Safety Radiotelegraphy Certificate
|
(v) |
International Loadline Certificate
|
(vi) |
International Tonnage Certificate
|
(vii) |
BUILDER's Certificate
|
(viii) |
Ship Sanitation Control Exemption Certificate
|
(f) |
DECLARATION OF WARRANTY of the BUILDER that the VESSEL is delivered to the BUYER free and clear of any liens, claims, charges, mortgages, or other encumbrances upon the BUYER's title thereto, and in particular, that the VESSEL is absolutely free of all burdens in the nature of imposts, taxes, or charges imposed by the prefecture or country of the port of delivery, as well as of all liabilities of the BUILDER to its sub-contractors and employees and of all liabilities arising from the operation of the VESSEL in trial runs, or otherwise, prior to delivery except as otherwise provided under this CONTRACT.
|
(g) |
BUILDER'S CERTIFICATE
|
(h) |
CERTIFICATE OF NON-REGISTRATION
|
(i) |
COMMERCIAL INVOICES covering the last instalment and modifications.
|
(j) |
BILL OF SALE or other document that certifies that the title of the VESSEL passes to the BUYER.
|
(k) |
Such other documents as the BUYER may reasonably require in connection with the registration of the VESSEL, which shall be agreed at least twenty eight (28) days prior to the DELIVERY DATE.
|
4. |
TENDER OF THE VESSEL
|
5. |
TITLE AND RISK
|
6. |
REMOVAL OF THE VESSEL
|
1. |
CAUSES OF DELAY
|
2. |
NOTICE OF DELAYS
|
3. |
RIGHT TO CANCEL FOR EXCESSIVE DELAY
|
(a) |
Such future date shall become the contractual delivery date for the purposes of this CONTRACT but this new date shall not be subject to any further extension by reason of permissible delays as herein provided, and
|
(b) |
If the VESSEL is not delivered by such revised contractual delivery date, the BUYER shall have the same right to liquidated damages and rights of cancellation upon the same terms as provided in this CONTRACT.
|
4. |
DEFINITION OF PERMISSIBLE DELAYS
|
1. |
GUARANTEE
|
2. |
NOTICE OF DEFECTS
|
3. |
REMEDY OF DEFECTS
|
(a) |
The HGS on behalf of BUILDERshall remedy, at its expense, any DEFECT against which the VESSEL is guaranteed under this Article, by making all necessary repairs or replacements at the SHIPYARD or elsewhere as provided for in (b) hereinbelow.
|
(b) |
However, if it is impractical to bring the VESSEL to the SHIPYARD, the BUYER may cause the necessary repairs or replacements to be made elsewhere which is deemed suitable for the purpose, provided that, in such event, the BUILDER and the HGS
may forward or supply replacement parts or materials to the VESSEL, unless forwarding or supplying thereof to the VESSEL would impair or delay the operation or working schedule of the VESSEL. In the event that the BUILDER and the HGS proposes to cause the necessary repairs or replacements to be made to the VESSEL at any other shipyard or works than the SHIPYARD, the BUYER shall first, but in all events as soon as possible, give the BUILDER and the HGS
notice in writing or by e-mail or facsimile of the time and place such repairs will be made, and if the VESSEL is not thereby delayed, or her operation or working schedule is not thereby impaired, the BUILDER and the HGS
shall have the right to verify by its own representative(s) the nature and extent of the DEFECTS complained of. The BUILDER and the HGS
shall in such case, promptly advise the BUYER in writing or by e-mail or facsimile, after such examination has been completed, of its acceptance or rejection of the DEFECTS as ones that are covered by the guarantee herein provided. Upon the BUILDER and the HGS's acceptance of the DEFECTS as justifying remedy under this Article, or upon the award of the arbitration tribunal so determining, the HGS on behalf of Builder shall pay to the BUYER for such repairs or replacements a sum equal to the actual direct cost of the repairs or replacements, as evidenced by the final invoices of the relevant shipyard/repairer or supplier., however, the amount of the HGS's payment to the BUYER for such repairs or replacements shall not exceed the average cost quoted by one reputable repair yard in Singapore and one reputable repair yard in China.
|
(c) |
In any case, the VESSEL shall be taken at the BUYER's costs and responsibility to the place elected, ready in all respects for such repairs or replacements and in any event, the BUILDER and the HGS
shall not be responsible for towage, dockage, wharfage, port charges or any other cost or expenses whatsoever incurred by the BUYER in getting and keeping the VESSEL ready for such repairs or replacements.
|
(d) |
In the event that it is necessary for the BUILDER and the HGS
to forward a replacement for a defective part under this guarantee, replacement parts shall be shipped to the BUYER under the terms of F.O.B. port of the country where they are to be purchased.
|
(e) |
The BUILDER and the HGS
reserve the option to retrieve, at the BUILDER and the HGS's cost, any of the replaced equipment/parts in case DEFECTS are remedied in accordance with the provisions in this Article.
|
(f) |
Any dispute under this article shall be referred to arbitration in accordance with the provisions of Article XIII hereof.
|
4. |
EXTENT OF BUILDER'S RESPONSIBILITY
|
(a) |
After delivery of the VESSEL the BUILDER and the HGS shall have no responsibility forany other DEFECTS whatsoever in the VESSEL than the DEFECTS specified in paragraph 1 of this Article, unless such defect was caused or occasioned by the negligence of the BUILDER and the HGS, its subcontractors or their respective employees within the Guarantee Period. The BUILDER and the HGS shall have no liability whatsoever in any circumstances whatsoever to the BUYER or to any third party for anything except the cost of repairing the DEFECT itself. The BUILDER and the HGS shall not in any circumstances be responsible or liable for any consequential or special losses, damages or expenses including, but not limited to, loss of time, loss of profit or earning or demurrage directly or indirectly occasioned to the BUYER or any third party by reason of the DEFECTS specified in paragraph 1 of this Article or due to repairs or other works done to the VESSEL to remedy such DEFECTS. After delivery, the BUYER shall hold the BUILDER and the HGS harmless and indemnify the BUILDER and the HGS against any claim from the BUYER or any third party whatsoever in respect of any such matters and in respect of any other claims relating to the VESSEL for which the BUILDER and the HGS do not expressly give a warranty to the BUYER under this Article.
|
(b) |
The BUILDER and the HGS shall not be responsible for any DEFECTS in any part of the VESSEL which may subsequent to delivery of the VESSEL have been replaced or in any way repaired by any other contractor, or for any DEFECTS which have been caused or aggravated by omission or improper use and maintenance of the VESSEL on the part of the BUYER, its servants or agents or by ordinary wear and tear or by any other circumstances beyond the control of the BUILDER and the HGS.
|
(c) |
The guarantee contained as hereinabove in this Article replaces and excludes any other liability, guarantee, warranty and/or condition whether expressly set out in this CONTRACT or imposed or implied by the law, customary, statutory or otherwise, by reason of the construction and sale of the VESSEL by the BUILDER and the HGS for and to the BUYER.
|
5. |
ASSIGNMENT OF SUPPLIER'S GUARANTEES
|
1. |
CURRENCY
|
2. |
TERMS OF PAYMENT
|
(a) |
First Instalment
|
(b) |
Second Instalment
|
(c) |
Third Instalment
|
(d) |
Fourth Instalment
|
(e) |
Fifth Instalment
|
(f) |
Sixth Instalment
|
(g) |
Seventh Instalment
|
(h) |
Eighth Instalment
|
(i) |
Ninth Instalment
|
3. |
DEMAND FOR PAYMENT
|
4. |
METHOD OF PAYMENT
|
(a) |
All the pre-delivery payments and the payment due on delivery in settlement of the CONTRACT PRICE as provided for in Paragraph 2 of this Article shall be made in U.S. Dollars on or before the DUE DATE thereof by telegraphic transfer as follows;
|
(i) |
The payment of the first, second, third, fourth, fifth, sixth, seventh and eighth instalments shall be made to the account no.: 117-JCD-1016942 of the KEB Hana Bank (hereinafter called the "KEB HANA") in favour of the BUILDER or any other bank in favor of the BUILDER, as designated and notified by the BUILDER to the BUYER at least three (3) business days prior to the DUE DATE.
|
(ii) |
The ninth instalment as provided for in Paragraph 2.(h) of this Article shall be deposited at the account of the KEB HANA, Account No. 117-JCD-1016942,
or any other bank
in favor or the BUILDER, as designated and notified by the BUILDER, in an account in the name of the BUYER by telegraphic transfer remittance at least three (3) business days prior to the scheduled delivery date of the VESSEL as reasonably calculated and notified by the BUILDER, with instructions valid for fifteen (15) banking days that the said instalment is unconditionally payable to the BUILDER against presentation by the BUILDER to the KEB HANA, Seoul, Korea or such other bank where the said amount is deposited of a duplicate original copy of the PROTOCOL OF DELIVERY AND ACCEPTANCE of the VESSEL signed by the BUILDER and the BUYER.
|
(b) |
Simultaneously with each of such payments, the BUYER shall advise the BUILDER of the details of the payments by e-mail or facsimile and at the same time, the BUYER shall cause the BUYER's remitting Bank to advise the KEB HANA, or any other bank, Seoul, Korea as the case may be, of the details of such payments by authenticated bank cable or telex.
|
5. |
REFUND BY THE BUILDER
|
6. |
TOTAL LOSS
|
(a) |
to build another vessel in place of the VESSEL so lost and deliver it under this CONTRACT to the BUYER, provided that the parties hereto shall have agreed in writing to a reasonable cost and time for the construction of such vessel in place of the lost VESSEL, and in which case, any amounts recovered under the insurance referred to in Article XXI will be applied to the construction of the VESSEL; or
|
(b) |
to refund to the BUYER the full amount of the total sums paid by the BUYER to the BUILDER under the provisions of Paragraph 2 of this Article together with interest thereon at the rate of Three per cent (3%) per annum from the date following the date of receipt by the BUILDER of such pre-delivery instalment(s) to the date of payment by the BUILDER to the BUYER of the refund, and to pay to the BUYER the invoiced cost to the BUYER of all BUYER's Supplies which were incorporated into the VESSEL, and either (i) to return to the BUYER all BUYER's Supplies which were not incorporated into the VESSEL, or (ii) to pay to the BUYER the invoiced cost to the BUYER of all such supplies.
|
7. |
DISCHARGE OF OBLIGATIONS
|
8. |
REFUND GUARANTEE
|
9. |
PERFORMANCE GUARANTEE
|
1. |
DEFINITION OF BUYER'S DEFAULT
|
(a) |
If the first, second, third, fourth, fifth, sixth, seventh and eighth instalment is not paid to the BUILDER within respective DUE DATE of such instalments; or
|
(b) |
If the ninth instalment is not deposited in accordance with Article X.4.(a)(ii) hereof or if the said ninth instalment deposit is not released to the BUILDER against presentation by the BUILDER of a copy of the original PROTOCOL OF DELIVERY AND ACCEPTANCE; or
|
(c) |
If the BUYER fails to take delivery of the VESSEL within five (5) days when the VESSEL is duly tendered for delivery by the BUILDER under the provisions of Article VII hereof; or
|
(d) |
If an order or an effective resolution shall be passed for winding up of the BUYER (except for the purpose of reorganization, merger or amalgamation).
|
2. |
EFFECT OF THE BUYER'S DEFAULT ON OR BEFORE THE DELIVERY OF THE VESSEL
|
(a) |
The DELIVERY DATE of the VESSEL shall be extended automatically for the actual period of such default to the extent that such default has actually delayed the construction of the VESSEL and the BUILDER shall not be obliged to pay any liquidated damages for the delay in delivery of the VESSEL actually caused thereby.
|
(b) |
The BUYER shall pay to the BUILDER interest at the rate of Four percent (4%) per annum in respect of the instalment(s) in default from the respective DUE DATE to the date of actual receipt by the BUILDER of the full amount of such instalment(s).
|
(c) |
If the BUYER is in default in payment of any of the instalment(s) due and payable prior to or simultaneously with the delivery of the VESSEL, the BUILDER shall, in writing or by
|
(d) |
If any of the BUYER's default continues for a period of fourteen (14) days after the BUILDER's notification to the BUYER of such default, the BUILDER may, at its option, rescind this CONTRACT by serving upon the BUYER a written notice or e-mail or facsimile notice of rescission confirmed in writing.
|
(e) |
In the event of such cancellation by the BUILDER of this CONTRACT due to the BUYER's default as provided for in paragraph 1 above, the BUILDER shall be entitled to retain and apply the instalments already paid by the BUYER to the recovery of the BUILDER's loss and damage due to the BUYER's default and the cancellation of this CONTRACT and at the same time the BUILDER shall have the full right and power either to complete or not to complete the VESSEL which is the sole property of the BUILDER as it deems fit, and to sell the VESSEL in its complete or incomplete state at a public or private sale on such terms and conditions as the BUILDER thinks fit without being answerable for any loss or damage but at the true market price in the prevailing market conditions
.
|
(f) |
In no event shall the BUYER's total liability in the event of the BUILDER rescinding this CONTRACT exceed one hundred and five percent (105%) of the CONTRACT PRICE.
|
3. |
DEFINITION OF BUILDER'S DEFAULT
|
-
|
if the BUILDER, without reasonable excuse, intentionally delays in the commencement of steel cutting, keel laying and launching of the VESSEL in accordance with the latest milestone event notice informed to the BUYER for a period of sixty five (65) days or more and the BUILDER has not rectified the same within fourteen (14) days of being notified by the BUYER of such delay. However, in any case, the BUILDER reserves its full rights to change the milestone events in accordance with the BUILDER's production planning.
|
-
|
if the BUILDER shall apply for or consent to the appointment of a receiver, trustee or liquidator, shall be adjudicated insolvent, shall apply to the courts for protection from its creditors, file a voluntary petition in bankruptcy or take advantage of any insolvency law, or any action shall be taken by the BUILDER having an effect similar to any of the foregoing or the equivalent thereof in any jurisdiction;
|
-
|
the filing of a petition or the making of an order or the passing of an effective resolution for the winding-up of the BUILDER or the placing of the BUILDER under court protection or the appointment of a receiver of the undertaking or property of the BUILDER or the insolvency of or the cessation of the carrying on of business by the BUILDER or any analogous proceedings;
|
-
|
the BUILDER, without prior written consent of the BUYER, removes the VESSEL from the SHIPYARD or assigns, sub-lets or subcontracts performance of the whole or part of its obligations except as provided for in this CONTRACT or usual shipbuilding practice of the BUILDER or as agreed by BUYER;
|
-
|
the BUILDER sells or transfers title to the VESSEL to a third party or a ship owner except due to rescission of the CONTRACT by the BUYER's default; and/or
|
-
|
if the Refund Guarantee ceases to be valid for whatever reason subject to the last paragraph of Article X 8. of this CONTRACT or the Refund Guarantor enters in to any insolvency or similar proceeding as defined herein.
|
4. |
EFFECT OF THE BUILDER'S DEFAULT
|
5. |
OTHER BUILDER'S DEFAULT
|
1. |
RESPONSIBILITY OF THE BUYER
|
(a) |
furnished the BUYER with the time schedule referred to above, two (2) months prior to installation of the BUYER'S SUPPLIES and
|
(b) |
given the BUYER written notice of any delay in delivery of the BUYER'S SUPPLIES and the necessary document or advice for such supplies as soon as the delay occurs which might give rise to a claim by the BUILDER under this Paragraph.
|
2. |
RESPONSIBILITY OF THE BUILDER
|
1. |
DECISION BY THE CLASSIFICATION SOCIETY
|
2. |
LAWS APPLICABLE
|
3. |
PROCEEDINGS OF ARBITRATION
|
4. |
EXPENSES
|
5. |
ENTRY IN COURT
|
6. |
ALTERATION OF DELIVERY DATE
|
1. |
TAXES
|
2. |
DUTIES
|
1. |
PATENTS, TRADEMARKS AND COPYRIGHTS
|
2. |
RIGHTS TO THE SPECIFICATIONS, PLANS AND ETC.
|
3. |
ACCESS TO INFORMATION
|
To the BUILDER
|
:
|
HYUNDAI MIPO DOCKYARD CO., LTD.
100, Bangeojinsunhwan-Doro, Dong-Gu, Ulsan 682-712, Korea
|
Attention:
|
Mr. G. H. Park/ Contract Management Dep't.
Tel : +82 52 250 3071
Facsimile : +82 52 250 3060
E-mail :khpark
@hmd.co.kr
|
|
To the SHIPYARD
|
:
|
HYUNDAI-VINASHIN SHIPYARD CO., LTD.
01 My Giang, Ninh Phuoc Commune,
Ninh Hoa District, Khanh Hoa Province, Vietnam
|
Attention:
|
Mr. K. H. Kim / Contract Management Dep't.
Tel : +84
58 3622 757
Facsimile : +84 58 3622 018
E-mail :candokim
@hmd.co.kr
|
|
To the BUYER
|
:
|
ECO Nine Inc.
C/O CENTRAL SHIPPING MONACO S.A.M.
Palais De la Scala, 1 Avenue Henry Durant, MC 98000, Monaco
|
Attention :
|
Mr. Andreas M. Louka, Legal Advisor
Tel : +30 210 8128 320
Facsimile : +30 210 6141 272
E-mail : legal@centralmare.com
|
|
Attention :
|
Mr. Souroullas Demetris P., Chief Technical Officer
Tel : +30 210 8128 290
Facsimile : +30 210 6141 276
E-mail
: dps@centralmare.com
|
1. |
EXTENT OF INSURANCE COVERAGE
|
2. |
APPLICATION OF THE RECOVERED AMOUNT
|
(a) |
Partial Loss :
|
(b) |
Total Loss :
|
3. |
TERMINATION OF BUILDER'S OBLIGATION TO INSURE
|
1. |
REPRESENTATIONS OF THE PARTIES
|
(a) |
It will comply with the laws of any jurisdiction applicable to such party as it relates to this CONTRACT, including but not limited to any applicable anti-corruption and anti-bribery laws., also including, without limitation, the United States Foreign Corrupt Practices Act ("US FCPA"), the UK Bribery Act 2010 ("UK Bribery Act") and the anti-bribery or anti-corruption laws of Korea as such laws may be amended from time to time;
|
(b) |
In connection with this CONTRACT, it has not and will not make any payments or gifts or provide other advantages, or any offers or promises of payments or gifts or other advantages of any kind, directly or indirectly, to:
|
(i) |
any person or entity with the intention of obtaining or retaining a business advantage for itself or the other party to this CONTRACT;
|
(ii) |
any official or member of any government or any agency or instrumentality thereof; any official or member of any public international organisation or any agency or instrumentality thereof; any or official of a political party or any candidate for political office (herein 'public official'); or any person while knowing or reasonably suspecting that all or a portion of such money or thing of value will be offered, given or promised, directly or indirectly, to any public official, in violation of the UK Bribery Act, the US FCPA or the laws of Korea.
|
(c) |
In connection with this CONTRACT, it has not and will not request, agree to accept or accept from any person or entity any payments or gifts or other advantages, or any offers or promises of payments or gifts or other advantages of any kind, directly or indirectly, as a reward or inducement to perform its obligations under this CONTRACT in any way improperly.
|
(d) |
undertakes that it shall apply standards of business conduct which are consistent with the BUILDER's Business Partner Code of Conduct, found at http://ethics.hhi.co.kr/html_eng/2_moral/sub_02.htm, a hard copy of which is available on request.
|
2. |
INDEMNIFICATION
|
WITNESS
|
WITNESS
|
||||
/s/ Andreas Louka
|
/s/
Woo Jin Kim
|
||||
Name:
|
Andreas Louka
|
Name:
|
Woo Jin Kim
|
||
Title:
|
Advocate
|
Title:
|
Attorney-in-Fact
|
1. |
In consideration of the Buyer entering into the Contract with the Builder, we hereby issue our irrevocable letter of guarantee number
[]
(hereinafter referred to as the "
Guarantee
") (in favor of
[Name of the Buyer]
(herein referred to as the "
Buyer
" or
"you"
) for the account of
[Name of the Builder]
(herein referred to as the "
Builder
") as follows in connection with the shipbuilding contract dated
[]
(herein referred to as the "
Contract
"),made by and between the Buyer and the Builder for the construction and sale of
[]
having Builder's Hull No.
[]
(hereinafter referred to as the "
Vessel
").
|
2. |
If in connection with the terms of the Contract, the Buyer shall become entitled to a refund of one or more of the advance payments made to the Builder prior to the delivery of the Vessel, we hereby irrevocably guarantee the repayment of the same to the Buyer after the Buyer's written demand together with interest thereon at the Agreed Interest Rate from the date following the date of receipt by the Builder to the date of remittance by telegraphic transfer of such refund.
|
3. |
This Guarantee is an undertaking to make the above payments against a written demand conforming with the requirements of this Guarantee and is independent from the Contract. Our obligation to make payment under this Guarantee will not be discharged by amendments to the Contract, disputes under the Contract or any invalidity of the Contract.
|
4. |
The amount of this Guarantee will be automatically increased upon the Builder's receipt of the respective further installments: each time by the amount of installment of:
|
(a) |
[]
U.S. Dollars (US$
[]
);
|
(b) |
[]
U.S. Dollars (US$
[]
);
|
(c) |
[]
U.S. Dollars (US$
[]
);
|
(d) |
[]
U.S. Dollars (US$
[]
);
|
(e) |
[]
U.S. Dollars (US$
[]
);
|
(f) |
[]
U.S. Dollars (US$
[]
);
|
(g) |
[]
U.S. Dollars (US$
[]
); and
|
(h) |
[]
U.S. Dollars (US$
[]
).
|
5. |
In case any refund is made to you by the Builder or by us under this Guarantee, our liability hereunder shall be automatically reduced to reflect the remaining amount due (plus interest).
|
6. |
For the purposes of this Guarantee,
"Agreed Interest Rate"
means four percent (4%) per annum provided that in the event of cancellation of the Contract. as a result of delays due to Force Majeure (as defined in the Contract) or other causes beyond the control of the Builder or in the case of total loss of the Vessel, the interest rate shall be reduced to three per cent (3%) per annum as provided in Article X of the Contract.
|
7. |
This Guarantee is payable against our simple receipt of a signed statement from you certifying that Buyer's demand for refund has been made in conformity with the Contract and the Builder has failed to make the refund within 30 days after your demand to the Builder. Any notice, claim or demand to be given or made by you under this Guarantee may be served on us either by post or by tested telex or by authorized SWIFT or equivalent as follows:
|
8. |
Refund shall be made to you by telegraphic transfer (net of bank charges) in United States Dollars within 30 days from the receipt of your demand. All payments under this Guarantee shall be made without deduction or withholding for or on account of any taxes, duties or charges whatsoever unless we are compelled by law to deduct or withhold the same, in which case we shall make the minimum deduction or withholding permitted by law and will pay such additional amounts as may be necessary in order that the amount received by you after such deductions or withholdings shall be equal to the amount which would have
|
9. |
This Guarantee shall expire and become null and void upon the earliest of:
|
(a) |
receipt by the Buyer of the sum guaranteed hereby;
|
(b) |
acceptance by the Buyer of the delivery of the Vessel; or
|
(c) |
rescission or termination of the Contract due to the Buyer's default in accordance with the Contract provided that such default has been admitted in writing by the Buyer or has been established by a final and unappealable Award by a London arbitration tribunal duly appointed under the Contract, or a Judgment of the Hgh Court of Justice in London.
|
10. |
Notwithstanding any provision herein, in the event that within 30 days from the date of your demand to the Builder referred to above, we receive notification from you or the Builder accompanied by written confirmation by an arbitrator to the effect that your claim to cancel the Contract or your claim for refund thereunder has been disputed and referred to arbitration in accordance with the Contract, we shall under this Guarantee refund to you the sum (not exceeding
[]
U.S. Dollars (US$
[]
) plus interest by the same manner hereinabove) due to you from the Builder pursuant to the award made under such arbitration (or any judgment on appeal therefrom) immediately upon receipt from you of the demand for payment of the sum and a copy of the award (or any judgment on appeal therefrom).
|
11. |
This Guarantee may be assigned or transferred by the BUYER with prior written notice to us. A person who is not a party to this Guarantee has no rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Guarantee.
|
12. |
This Guarantee shall be governed by and construed in accordance with the laws of England and any dispute arising under or in connection with this guarantee shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory modification thereof as currently in force before three arbitrators, with one to be appointed by each party and the third to be appointed by the two party appointed arbitrators..
|
13. |
We hereby warrant that we are permitted by any relevant law to which we are subject (including, where relevant, the laws of the place or places of each of our incorporation, establishment, regulation, registration and residence) to (i) issue a guarantee in this form, (ii) make payment under this guarantee in United States Dollars and (iii) designate the laws of England and arbitration in London as the applicable law, the forum and the place of jurisdiction, to which we irrevocably submit. We hereby warrant that this guarantee has been, or will be, duly registered with the relevant State authority in any legal jurisdiction in which such registration is required for any reason. We hereby warrant that we have obtained all necessary approvals and authorisations to issue this guarantee.
|
Hyundai Mipo Dockyard Co., Ltd.
100, Bangeojinsunhwan-Doro, Dong-Gu,
|
|
Ulsan 44113
|
Date : , 2017
|
Korea
|
Very truly yours,
For and on behalf of
By
Name : Title : |
–
|
1,495,000 end Mar 2017 –
Buyer
|
||
–
|
1,495,000 end Jun 2017 –
Buyer
|
||
–
|
$1,405,300 end Sep 2017 –
Buyer
|
||
–
|
$89,700 end Sep 2017 –
SELLER
|
||
–
|
$1,495,000 end Nov 2017 –
SELLER
|
||
–
|
$2,990,000 end Dec 2017 –
SELLER
|
If to the Seller:
|
Malibu Shipmanagement Co.
1 Vas. Sofias and Meg. Alexandrou St 15124 Maroussi, Greece Facsimile: +302108128320 Email: louka@loukapartners.com |
If to the Buyer:
|
Style Maritime Ltd.
c/o Top Ships Inc. 1 Vas. Sofias-and Meg Alexandrou Str 15124 Maroussi, Greece Attention: Alexandros Tsirikos Facsimile: +30210 8056441 Email: atsirikos@topships.org |
With a copy (which shall not
constitute notice) to: |
Seward & Kissel LLP
One Battery Park Plaza New York, New York 10004 Attention: Gary J. Wolfe, Esq. Facsimile: (212) 901-2110 Email: wolfe@sewkis.com |
BUYER:
|
||
Lyndon International Co.
|
||
By:
|
/s/ Alexander Tsirikos
|
|
Name:
|
Alexander Tsirikos
|
|
Title:
|
Director
|
|
SELLER
|
||
Fly Free Company.
|
||
By:
|
/s/ Michalis Moushouttas
|
|
Name:
|
Michalis Moushouttas, for and behalf of Centrica Investments Inc.
|
|
Title:
|
Director
|
|
1. |
The Seller hereby agrees to sell to the Buyer, and the Buyer hereby agrees to purchase from the Seller, the Additional Investment Shares on the same terms and conditions as contained in the SPA, as modified by this Addendum.
|
2. |
The consummation of the Additional Purchase and Sale (the "
Additional Closing
") shall take place at the offices of Central Mare Inc., on the date hereof or on such later date as may be mutually agreed upon by the Parties (the "
Additional Closing Date
"), but in no event later than June 30, 2017.
|
3. |
On the Additional Closing Date, subject to the terms and conditions herein contained, the Seller shall sell, convey, transfer, assign and deliver to the Buyer the Additional Investment Shares free and clear of any and all Liens, together
|
4. |
With respect to the Additional Purchase and Sale, (i) the Representations and Warranties of the Seller contained in Article II of the SPA and the Representations and Warranties of the Buyer contained in Article III of the SPA shall be true and correct as of the date hereof and as of the Additional Closing Date, (ii) the Covenants contained in Article IV of the SPA shall be made as of the date hereof, (iii) the Conditions to Closing contained in Article V of the SPA shall be satisfied at or prior to the Additional Closing Date (unless waived in accordance with the terms of the SPA), and (iv) the miscellaneous provisions of Article VI of the SPA shall apply, in each case, substituting the terms "Closing," "Closing Date" and "Investment Shares" therein with the terms "Additional Closing," "Additional Closing Date," and "Additional Investment Shares," respectively.
|
5. |
Except as set forth in this Addendum, all other terms, conditions, and agreements contained in the SPA shall remain in full force and effect.
|
6. |
This Addendum shall be governed by, and interpreted in accordance with, the laws of the State of New York.
|
7. |
This Addendum may be executed in any number of counterparts, each of which shall be deemed an original for all purposes.
|
BUYER
|
||
LYNDON INTERNATIONAL CO.
|
||
By:
|
/s/ Alexandros Tsirikos
|
|
Name:
|
Alexandros Tsirikos
|
|
Title:
|
Director
|
|
SELLER
|
||
FLY FREE COMPANY
|
||
By:
|
/s/ Alexandros Economou
|
|
Name:
|
Alexandros Economou
For and on behalf of Global Servus Limited
|
|
Title:
|
President/Treasurer/Director
|
|
–
|
$1,495,000 end Apr 2017 –
BUYER
|
||
–
|
$1,495,000 end Jun 2017 –
BUYER
|
||
–
|
$1,495,000 end Sep 2017 -
BUYER
|
||
–
|
$642,850 end Dec 2017 –
BUYER
|
||
–
|
$852,150 end Dec 2017 –
SELLER
|
||
–
|
$1,495,000 end Feb 2018 –
SELLER
|
||
–
|
$2,990,000 end Mar 2018 –
SELLER
|
If to the Seller:
|
Malibu Shipmanagement Co.
1 Vas. Sofias and Meg. Alexandrou St 15124 Maroussi, Greece Facsimile: +302108128320 Email: louka@loukapartners.com |
If to the Buyer:
|
Style Maritime Ltd.
c/o Top Ships Inc. 1 Vas. Sofias-and Meg Alexandrou Str 15124 Maroussi, Greece Attention: Alexandros Tsirikos Facsimile: +30210 8056441 Email: atsirikos@topships.org |
With a copy (which shall not
constitute notice) to: |
Seward & Kissel LLP
One Battery Park Plaza New York, New York 10004 Attention: Gary J. Wolfe, Esq. Facsimile: (212) 901-2110 Email: wolfe@sewkis.com |
BUYER:
|
||
Gramos Shipping Company Inc Co.
|
||
By:
|
/s/ Alexander Tsirikos
|
|
Name:
|
Alexander Tsirikos
|
|
Title:
|
Director
|
|
SELLER
|
||
Maxima International Co.
|
||
By:
|
/s/ Michalis Moushouttas
|
|
Name:
|
Michalis Moushouttas,
for and behalf of Centrica Investments Inc.
|
|
Title:
|
Director
|
|
1. |
The Seller hereby agrees to sell to the Buyer, and the Buyer hereby agrees to purchase from the Seller, the Additional Investment Shares on the same terms and conditions as contained in the SPA, as modified by this Addendum.
|
2. |
The consummation of the Additional Purchase and Sale (the "
Additional Closing
") shall take place at the offices of Central Mare Inc., on the date hereof or on such later date as may be mutually agreed upon by the Parties (the "
Additional Closing Date
"), but in no event later than June 30, 2017.
|
3. |
On the Additional Closing Date, subject to the terms and conditions herein contained, the Seller shall sell, convey, transfer, assign and deliver to the Buyer the Additional Investment Shares free and clear of any and all Liens, together with any necessary assignment documents in form and substance as reasonably requested by the Buyer, and, in consideration therefor, the Buyer shall pay the
|
4. |
With respect to the Additional Purchase and Sale, (i) the Representations and Warranties of the Seller contained in Article II of the SPA and the Representations and Warranties of the Buyer contained in Article III of the SPA shall be true and correct as of the date hereof and as of the Additional Closing Date, (ii) the Covenants contained in Article IV of the SPA shall be made as of the date hereof, (iii) the Conditions to Closing contained in Article V of the SPA shall be satisfied at or prior to the Additional Closing Date (unless waived in accordance with the terms of the SPA), and (iv) the miscellaneous provisions of Article VI of the SPA shall apply, in each case, substituting the terms "Closing," "Closing Date" and "Investment Shares" therein with the terms "Additional Closing," "Additional Closing Date," and "Additional Investment Shares," respectively.
|
5. |
Except as set forth in this Addendum, all other terms, conditions, and agreements contained in the SPA shall remain in full force and effect.
|
6. |
This Addendum shall be governed by, and interpreted in accordance with, the laws of the State of New York.
|
7. |
This Addendum may be executed in any number of counterparts, each of which shall be deemed an original for all purposes.
|
BUYER
|
||
GRAMOS SHIPPING COMPANY INC.
|
||
By:
|
/s/ Alexandros Tsirikos
|
|
Name:
|
Alexandros Tsirikos
|
|
Title:
|
Director
|
|
SELLER
|
||
MAXIMA INTERNATIONAL CO.
|
||
By:
|
/s/ Alexandros Economou
|
|
Name:
|
Alexandros Economou
For and on behalf of Global Servus Limited
|
|
Title:
|
President/Treasurer/Director
|
|
PREAMBLE
|
3
|
||
ARTICLE
|
I
|
: DESCRIPTION AND CLASS
|
4
|
II
|
: CONTRACT PRICE
|
8
|
|
III
|
: ADJUSTMENT OF THE CONTRACT PRICE
|
9
|
|
IV
|
: INSPECTION AND APPROVAL
|
13
|
|
V
|
: MODIFICATIONS, CHANGES AND EXTRAS
|
19
|
|
VI
|
: TRIALS AND COMPLETION
|
22
|
|
VII
|
: DELIVERY
|
26
|
|
VIII
|
: DELAYS AND EXTENSIONS OF TIME (FORCE MAJEURE)
|
30
|
|
IX
|
: WARRANTY OF QUALITY
|
33
|
|
X
|
: PAYMENT AND RESCISSION BY THE BUYER
|
36
|
|
XI
|
: BUYER'S AND BUILDER'S DEFAULT
|
42
|
|
XII
|
: BUYER'S SUPPLIES
|
46
|
|
XIII
|
: ARBITRATION
|
48
|
|
XIV
|
: SUCCESSORS AND ASSIGNS
|
50
|
|
XV
|
: TAXES AND DUTIES
|
51
|
|
XVI
|
: PATENTS, TRADEMARKS AND COPYRIGHTS
|
52
|
|
XVII
|
: INTERPRETATION AND GOVERNING LAW
|
54
|
|
XVIII
|
: NOTICE
|
55
|
|
XIX
|
: EFFECTIVENESS OF THIS CONTRACT
|
57
|
|
XX
|
: EXCLUSIVENESS
|
58
|
|
XXI
|
: INSURANCE
|
59
|
|
XXII
|
: COMPLIANCE AND ANTI-BRIBERY
|
61
|
EXHIBIT "A" LETTER OF GUARANTEE
|
64
|
|
EXHIBIT "B" PERFORMANCE GUARANTEE
|
68
|
1. |
DESCRIPTION
|
2. |
BASIC DIMENSIONS AND PRINCIPAL PARTICULARS OF THE VESSEL
|
(a) |
The basic dimensions and principal particulars of the VESSEL shall be :
|
Length, overall
|
abt. 183m
|
||
Length, between perpendiculars
|
174.0m
|
||
Breadth, moulded
|
32.2m
|
||
Depth, moulded
|
19.1m
|
||
Design draught, moulded
|
11.0m
|
||
Scantling draught, moulded
|
13.3m
|
Deadweight, guaranteed
|
:
|
about 49,580 metric tons at the Scantling draught of 13.3 meters on even keel in sea water of specific gravity of 1.025.
|
|
Speed, guaranteed
|
:
|
14.4 knots at the design draught of 11.0 meters at the condition of clean bottom and in calm and deep sea with main engine output of 5,680 kW with 15% sea margin.
|
|
Fuel Consumption, guaranteed
|
:
|
166.9 grams/kW-hour using marine diesel oil having lower calorific value of 10,200kcal/kg at MCR measured at the shop trial with I.S.O reference conditions.
|
(b) |
The dimensions may be slightly modified by the BUILDER, who also reserves the right to make changes to the SPECIFICATIONS and the PLAN if found necessary to suit the local conditions and facilities of the SHIPYARD, the availability of materials and equipment, the introduction of improved production methods or otherwise, subject to the approval of the BUYER which the BUYER shall not withhold unreasonably, and the approval of the CLASSIFICATION SOCIETY.
|
3. |
CLASSIFICATION, RULES AND REGULATIONS
|
(a) |
The VESSEL, including its machinery, equipment and outfitting shall be constructed in accordance with the BUILDER's quality standard and shipbuilding practices.
|
(b) |
The BUILDER shall arrange with the CLASSIFICATION SOCIETY for the assignment by the CLASSIFICATION SOCIETY of representative(s) to the VESSEL during construction. All fees and charges incidental to classification of the VESSEL in compliance with the above specified rules, regulations and requirements of this CONTRACT shall be for the account of the BUILDER.
|
(c) |
The decision of the CLASSIFICATION SOCIETY as to whether the VESSEL complies with the regulations of the CLASSIFICATION SOCIETY shall be final and binding upon the BUILDER and the BUYER. For the avoidance of doubt such decision shall only be final and binding in so far as compliance with the regulations of the CLASSIFICATION SOCIETY and shall have no wider application, including as to whether the VESSEL has been designed, constructed, equipped and completed in accordance with all terms of this CONTRACT.
|
(d) |
The facilities, labour and materials necessary for the safe and convenient conduct of any inspection by the CLASSIFICATION SOCIETY shall be furnished by the BUILDER. All major plans shall be subject to approval, inspection and test by the CLASSIFICATION SOCIETY in accordance with the rules and regulations of the CLASSIFICATION SOCIETY.
|
4. |
SUBCONTRACTING
|
5. |
NATIONALITY OF THE VESSEL
|
1. |
DELAYED DELIVERY
|
(a) |
No adjustment shall be made and the CONTRACT PRICE shall remain unchanged for the first thirty (30) days of the delay in delivery of the VESSEL [ending as of 12 o'clock midnight Vietnamese Standard Time on the thirtieth (30th) day of delay] beyond the Delivery Date calculated as provided in Article VII.1. hereof.
|
(b) |
If delivery of the VESSEL is delayed more than thirty (30) days beyond the date upon which the delivery is due from the BUILDER under the terms of this CONTRACT, then, beginning at midnight of the thirtieth (30th) day after such due date, the CONTRACT PRICE of the VESSEL shall be reduced by U.S. Dollars Seven Thousand Two Hundred (US$7,200) for each full day of delay shall not exceed the amount due to cover the delay of one hundred and sixty five (165) days after thirty (30) days of the delay in delivery of the VESSEL at the rate of deduction as specified hereinabove.
|
(c) |
But, if the delay in delivery of the VESSEL continues for a period of more than one hundred and ninety five days (195) days beyond the date upon which the delivery is due from the BUILDER under the terms of this CONTRACT then, in such event, and after such period has expired, the BUYER may, at its option, cancel this CONTRACT by serving upon the BUILDER a notice of cancellation in writing or by e-mail or facsimile directed to the BUILDER at the address given in this CONTRACT, and the provisions of Article X.5 shall apply. Such cancellation shall be effective as of the date the notice thereof is received by the BUILDER. If the BUYER has not served the notice of cancellation after the aforementioned one hundred and ninety five days (195) days delay in delivery, the BUILDER may demand the BUYER to make an election in accordance with Article VIII.3. hereof.
|
(d) |
For the purpose of this Article, the delivery of the VESSEL shall be deemed to be delayed when and if the VESSEL, after taking into full account extension of the Delivery Date or permissible delays as provided in Article V, VI, VIII, XI or elsewhere in this CONTRACT, is delivered beyond or before the date upon which delivery would then be due under the terms of this CONTRACT.
|
2. |
INSUFFICIENT SPEED
|
(a) |
The CONTRACT PRICE of the VESSEL shall not be affected or changed, if the actual speed, as determined by trial runs more fully described in Article VI hereof, is less than the guaranteed speed as defined in Article I paragraph 2 hereof, provided such deficiency in actual speed is not more than three-tenths (3/10) of a knot below the guaranteed speed.
|
(b) |
However, as for the deficiency of more than three-tenths (3/10) of a knot in actual speed below the guaranteed speed, the CONTRACT PRICE shall be reduced by U.S. Dollars Eighteen Thousand (US$18,000) for each full one-tenth (1/10) of a knot in excess of the said three-tenths (3/10) of a knot of deficiency in speed [fractions of less than one-tenth (1/10) of a knot shall be regarded as a full one-tenth (1/10) of a knot]. However, unless the parties agree otherwise, the total amount of reduction from the CONTRACT PRICE shall not exceed the amount due to cover the deficiency of eight-tenths(8/10) full knot below the guaranteed speed at the rate of reduction as specified above.
|
(c) |
If the deficiency in actual speed of the VESSEL is more than eight-tenths (8/10) of a full knot below the guaranteed speed, then the BUYER, at its option, may, subject to the BUILDER's right to effect alterations or corrections as provided in Article VI.5. hereof, cancel this CONTRACT by the BUYER sending a notice of cancellation to the BUILDER in writing or by email or facsimile, and the provisions of Article X.5 shall apply, or may accept the VESSEL at a reduction in the CONTRACT PRICE as above provided for eight-tenths (8/10) full knot of deficiency only.
|
3. |
EXCESSIVE FUEL CONSUMPTION
|
(a) |
The CONTRACT PRICE of the VESSEL shall not be affected or changed by reason of the fuel consumption of the VESSEL's main engine, as determined by the engine manufacturer's shop trial as per the SPECIFICATIONS being more than the guaranteed fuel consumption of the VESSEL's main engine as defined in Article I paragraph 2 hereof, if such excess is not more than five per cent (5%) over the guaranteed fuel consumption.
|
(b) |
However, as for the excess of more than five percent (5%) in the actual fuel consumption over the guaranteed fuel consumption of the VESSEL's main engine, the CONTRACT PRICE shall be reduced by U.S. Dollars Fifteen Thousand Three Hundred (US$15,300) for each full one per cent (1%) increase in fuel consumption in excess of the said five per cent (5%) increase in fuel consumption [fraction of less than one per cent (1%) shall be regarded as a full one percent (1%)]. However, unless the parties agree otherwise, the total
|
(c) |
If such actual fuel consumption exceeds the guaranteed fuel consumption of the VESSEL's main engine by more than eight percent (8%), the BUYER, at its option, may, subject to the BUILDER's right to effect alterations or corrections as specified in Article VI. 5. hereof, reject the main engine or require rectification thereof to the BUYER's complete satisfaction. If the BUILDER is unable to comply with the BUYER's request as aforesaid or if the BUYER elects to reject the main engine then the BUYER may cancel this CONTRACT by the BUYER sending a notice of cancellation to the BUILDER in writing or by email or facsimile, and the provisions of Article X.5 shall apply, or may accept the VESSEL at a reduction in the CONTRACT PRICE as above provided for the eight percent (8%) increase only.
|
4. |
DEADWEIGHT BELOW CONTRACT REQUIREMENTS
|
(a) |
The CONTRACT PRICE of the VESSEL shall not be affected or changed, if the actual deadweight determined as provided in this CONTRACT and the SPECIFICATIONS, is below the guaranteed deadweight as defined in Article I paragraph 2 hereof by one point five per cent (1.5%) of the guaranteed deadweight or less.
|
(b) |
However, should the deficiency in the actual deadweight of the VESSEL be more than one point five per cent (1.5%) of the guaranteed deadweight (disregarding fractions of less than one (1) metric ton), the CONTRACT PRICE shall be reduced by the sum of U.S. Dollars Two Hundred Seventy (US$270) for each one (1) metric ton deficiency (disregarding fractions of less than one (1) metric ton) in excess of the said one point five per cent (1.5%) of deficiency.
|
(c) |
In the event of such deficiency in the deadweight of the VESSEL being more than four per cent (4%) of the guaranteed deadweight, the BUYER, at its option, may, subject to the BUILDER's right to effect alterations or corrections as specified in Article VI. 5. hereof, cancel this CONTRACT by the BUYER sending a notice of cancellation to the BUILDER in writing or by email or facsimile, and the provisions of Article X.5 shall apply, or accept the VESSEL at a reduction in the CONTRACT PRICE as above provided for four per cent (4%) of deficiency only.
|
5. |
EFFECT OF CANCELLATION
|
6. |
CUMULATIVE EFFECT OF LIQUIDATED DAMAGES
|
1. |
APPOINTMENT OF BUYER'S REPRESENTATIVE
|
2. |
AUTHORITY OF THE BUYER'S REPRESENTATIVE
|
3. |
APPROVAL OF DRAWINGS
|
(a) |
The BUILDER shall submit to the BUYER three (3) copies of each of the plans and drawings to be submitted to the BUYER for its approval at its address as set forth in Article XVIII hereof. The BUYER shall, within twenty one (21) days including mailing time after receipt thereof, return to the BUILDER one (1) copy of such plans and drawings
|
(b) |
When and if the BUYER'S REPRESENTATIVE shall have been sent by the BUYER to the SHIPYARD in accordance with Paragraph 1 of this Article, the BUILDER may submit the remainder, if any, of the plans and drawings in the agreed list, to the BUYER'S REPRESENTATIVE for his approval, unless otherwise agreed upon between the parties hereto.
|
(c) |
In the event that the BUYER or the BUYER'S REPRESENTATIVE shall fail to return the plans and drawings to the BUILDER within the time limit as hereinabove provided, such plans and drawings shall be deemed to have been automatically approved without any comment. In the event the plans and drawings submitted by the BUILDER to the BUYER or the BUYER'S REPRESENTATIVE in accordance with this Article do not meet with the BUYER's or the BUYER'S REPRESENTATIVE's approval and the parties cannot reach agreement between them, the matter may be submitted by either party hereto for determination pursuant to Article XIII hereof. If the BUYER's comments on the plans and drawings that are returned to the BUILDER by the BUYER within the said time limit are not clearly specified or detailed, the BUILDER shall seek clarification from the BUYER prior to implementing them which clarification must be provided in writing by the BUYER within seven (7) days of such request from the BUILDER. If the BUYER shall fail to provide the BUILDER with such clarification within the said time limit, then the BUILDER shall be entitled to place its own interpretation on such comments in implementing them.
|
(d) |
Notwithstanding the provision herein above, the approved plans and drawings of the FIRM VESSEL shall be deemed to have been approved by the BUYER and the CLASSIFICATION SOCIETY for the VESSEL except any partial plans and partial drawings need to be changed due to Supply Scope of Scrubber Ready (dated April 5, 2017). The selected maker for the FIRM VESSEL and Supply Scope of Scrubber Ready shall be deemed to have been selected by the Buyer without other selection procedure.
|
4. |
SALARIES AND EXPENSES
|
5. |
RESPONSIBILITY OF THE BUILDER
|
(a) |
The BUILDER shall provide the BUYER'S REPRESENTATIVE and his assistants free of charge with suitably furnished office space at, or in the immediate vicinity of, the SHIPYARD together with telephone, broadband internet access, e-mail, facsimile, air conditioning, lavatory facilities and such other reasonable facilities as may be necessary to enable the BUYER'S REPRESENTATIVE and his assistants to carry out their work under this CONTRACT. However, the BUYER shall pay for the communication charges of the telephone, broadband internet, e-mail or facsimile facilities used by the BUYER'S REPRESENTATIVE or his assistants.
|
(b) |
The BUYER'S REPRESENTATIVE and his assistants shall at all times remain the employees of the BUYER. The BUILDER shall not be liable to the BUYER or the BUYER'S REPRESENTATIVE or to his assistants or to the BUYER's employees or agents for personal injuries, including death, during the time they, or any of them, are on the VESSEL, or within the premises of either the BUILDER or the SHIPYARD or its sub-contractors, or are otherwise engaged in and about the construction of the VESSEL, unless, however, such personal injuries, including death, are caused by the negligence of the BUILDER, the SHIPYARD, its sub-contractors, or its or their employees or agents. The BUILDER shall not be liable to the BUYER for damages to, or destruction of property of the BUYER or of the BUYER'S REPRESENTATIVE or his assistants or the BUYER's employees or agents, unless such damages, loss or destruction is caused by the negligence of the BUILDER, the SHIPYARD, its sub-contractors, or its or their employees or agents.
|
6. |
RESPONSIBILITY OF THE BUYER
|
1. |
HOW EFFECTED
|
2. |
SUBSTITUTION OF MATERIAL
|
3. |
CHANGES IN RULES AND REGULATIONS
|
(a) |
any increase or decrease in the CONTRACT PRICE of the VESSEL that is occasioned by such compliance;
|
(b) |
any extension or advancement in the Delivery Date of the VESSEL that is occasioned by such compliance;
|
(c) |
any increase or decrease in the deadweight and/or cubic capacity of the VESSEL, if such compliance results in any increase or reduction in the deadweight and/or cubic capacity ;
|
(d) |
adjustment of the speed requirements if such compliance results in any increase or reduction in the speed ; and
|
(e) |
any other alterations in the terms of this CONTRACT or of the SPECIFICATIONS or the PLAN or both, if such compliance makes such alterations of the terms necessary.
|
1. |
NOTICE
|
2. |
WEATHER CONDITION
|
3. |
HOW CONDUCTED
|
4. |
CONSUMABLE STORES
|
5. |
ACCEPTANCE OR REJECTION
|
(a) |
The BUILDER shall as soon as possible following the completion of the trials of the VESSEL deliver to the BUYER a detailed report setting out the results of the trials and an analysis of such results and confirmation that the BUILDER considers that the results of the trial run indicate that the VESSEL is in all respects in conformity with this CONTRACT and the SPECIFICATIONS and the PLAN. The BUYER shall within seven (7) days after receipt of such report, notify the BUILDER in writing of its acceptance of the VESSEL, or of its rejection of the VESSEL, or of the details in respect of which the VESSEL does not conform to the SPECIFICATIONS and the PLAN or this CONTRACT.
|
(b) |
If, during any sea trial, any breakdown occurs entailing interruption or irregular performance which can be repaired on board, the trial shall be continued after such repairs and be valid in all respects, provided the BUYER and the CLASSIFICATION SOCIETY agrees on the extent of such repairs being carried out.
|
(c) |
However, if, during or after the trial run, it becomes apparent that the VESSEL or any part of her machinery or equipment does not conform to the requirements of the CONTRACT, the PLAN and/or the SPECIFICATIONS, the BUILDER shall correct such non-conformity and perform such tests and/or trials as are necessary to confirm conformity to the CONTRACT, the PLAN and/or the SPECIFICATIONS.
|
(d) |
Save as above provided, The BUYER shall, within three (3) days after completion of the trial run and the receipt of all records of tests and trials carried out on that trial run, notify the BUILDER in writing or by e-mail or facsimile confirmed in writing of its acceptance of the VESSEL or of the details in respect of which the VESSEL does not conform to the SPECIFICATIONS or this CONTRACT or of the details in respect of which the VESSEL does not conform to the SPECIFICATIONS or this CONTRACT.
|
(e) |
However, the BUYER shall not be entitled to reject the VESSEL by reason of any minor or insubstantial items judged from the point of view of standard shipbuilding and shipping practice as not being in conformity with the SPECIFICATIONS, but, in that case, the BUILDER shall not be released from the obligation to correct and/or remedy such minor or insubstantial items as soon as practicable after the delivery of the VESSEL.
|
(f) |
If inconvenient for the VESSEL to have any non-conformities with the CONTRACT, the PLAN and/or the SPECIFICATIONS corrected and/or remedied at the SHIPYARD, the BUILDER may, at the BUYER's option, arrange to have the corrections or remedies carried out elsewhere, and may, if practicable and at the BUYER's option, do such work while the VESSEL is sailing. The BUYER may in its absolute discretion, if proposed by the BUILDER, decide to accept a payment from the BUILDER in lieu of such items being corrected and/or remedied, which payment in lieu shall first be agreed between the BUILDER and the BUYER.
|
6. |
EFFECT OF ACCEPTANCE
|
1. |
TIME AND PLACE
|
2. |
WHEN AND HOW EFFECTED
|
3. |
DOCUMENTS TO BE DELIVERED TO THE BUYER
|
(a) |
PROTOCOL OF TRIALS of the VESSEL made pursuant to this CONTRACT and the SPECIFICATIONS,
|
(b) |
PROTOCOL OF INVENTORY of the equipment of the VESSEL, including spare parts, all as specified in the SPECIFICATIONS,
|
(c) |
PROTOCOL OF CONSUMABLE NATURE, such as all fuel oil and fresh water remaining in tanks if its cost is charged to the BUYER under Article VI. 4. hereof,
|
(d) |
DRAWING AND PLANS pertaining to the VESSEL as stipulated in the SPECIFICATIONS, which shall be furnished to the BUYER at no additional cost,
|
(e) |
ALL CERTIFICATES required to be furnished upon delivery of the VESSEL pursuant to this CONTRACT, the SPECIFICATIONS and the customary shipbuilding practice, including
|
(i) |
Classification Certificate
|
(ii) |
Safety Construction Certificate
|
(iii) |
Safety Equipment Certificate
|
(iv) |
Safety Radiotelegraphy Certificate
|
(v) |
International Loadline Certificate
|
(vi) |
International Tonnage Certificate
|
(vii) |
BUILDER's Certificate
|
(viii) |
Ship Sanitation Control Exemption Certificate
|
(f) |
DECLARATION OF WARRANTY of the BUILDER that the VESSEL is delivered to the BUYER free and clear of any liens, claims, charges, mortgages, or other encumbrances upon the BUYER's title thereto, and in particular, that the VESSEL is absolutely free of all burdens in the nature of imposts, taxes, or charges imposed by the prefecture or country of the port of delivery, as well as of all liabilities of the BUILDER to its sub-contractors and employees and of all liabilities arising from the operation of the VESSEL in trial runs, or otherwise, prior to delivery except as otherwise provided under this CONTRACT.
|
(g) |
BUILDER'S CERTIFICATE
|
(h) |
CERTIFICATE OF NON-REGISTRATION
|
(i) |
COMMERCIAL INVOICES covering the last instalment and modifications.
|
(j) |
BILL OF SALE or other document that certifies that the title of the VESSEL passes to the BUYER.
|
(k) |
Such other documents as the BUYER may reasonably require in connection with the registration of the VESSEL, which shall be agreed at least twenty eight (28) days prior to the DELIVERY DATE.
|
4. |
TENDER OF THE VESSEL
|
5. |
TITLE AND RISK
|
6. |
REMOVAL OF THE VESSEL
|
1. |
CAUSES OF DELAY
|
3. |
RIGHT TO CANCEL FOR EXCESSIVE DELAY
|
(a) |
Such future date shall become the contractual delivery date for the purposes of this CONTRACT but this new date shall not be subject to any further extension by reason of permissible delays as herein provided, and
|
(b) |
If the VESSEL is not delivered by such revised contractual delivery date, the BUYER shall have the same right to liquidated damages and rights of cancellation upon the same terms as provided in this CONTRACT.
|
4. |
DEFINITION OF PERMISSIBLE DELAYS
|
1. |
GUARANTEE
|
2. |
NOTICE OF DEFECTS
|
3. |
REMEDY OF DEFECTS
|
(a) |
The HGS on behalf of BUILDERshall remedy, at its expense, any DEFECT against which the VESSEL is guaranteed under this Article, by making all necessary repairs or replacements at the SHIPYARD or elsewhere as provided for in (b) hereinbelow.
|
(b) |
However, if it is impractical to bring the VESSEL to the SHIPYARD, the BUYER may cause the necessary repairs or replacements to be made elsewhere which is deemed suitable for the purpose, provided that, in such event, the BUILDER and the HGS
may forward or supply replacement parts or materials to the VESSEL, unless forwarding or supplying thereof to the VESSEL would impair or delay the operation or working schedule of the VESSEL. In the event that the BUILDER and the HGS proposes to cause the necessary repairs or replacements to be made to the VESSEL at any other shipyard or works than the SHIPYARD, the BUYER shall first, but in all events as soon as possible, give the BUILDER and the HGS
notice in writing or by e-mail or facsimile of the time and place such repairs will be made, and if the VESSEL is not thereby delayed, or her operation or working schedule is not thereby impaired, the BUILDER and the HGS
shall have the right to verify by its own representative(s) the nature and extent of the DEFECTS complained of. The BUILDER and the HGS
shall in such case, promptly advise the BUYER in writing or by e-mail or facsimile, after such examination has been completed, of its acceptance or rejection of the DEFECTS as ones that are covered by the guarantee herein provided. Upon the BUILDER and the HGS's acceptance of the DEFECTS as justifying remedy under this Article, or upon the award of the arbitration tribunal so determining, the HGS on behalf of Builder shall pay to the BUYER for such repairs or replacements a sum equal to the actual direct cost of the repairs or replacements, as evidenced by the final invoices of the relevant shipyard/repairer or supplier., however, the amount of the HGS's payment to the BUYER for such repairs or replacements shall not exceed the average cost quoted by one reputable repair yard in Singapore and one reputable repair yard in China.
|
(c) |
In any case, the VESSEL shall be taken at the BUYER's costs and responsibility to the place elected, ready in all respects for such repairs or replacements and in any event, the BUILDER and the HGS
shall not be responsible for towage, dockage, wharfage, port charges or any other cost or expenses whatsoever incurred by the BUYER in getting and keeping the VESSEL ready for such repairs or replacements.
|
(d) |
In the event that it is necessary for the BUILDER and the HGS
to forward a replacement for a defective part under this guarantee, replacement parts shall be shipped to the BUYER under the terms of F.O.B. port of the country where they are to be purchased.
|
(e) |
The BUILDER and the HGS
reserve the option to retrieve, at the BUILDER and the HGS's cost, any of the replaced equipment/parts in case DEFECTS are remedied in accordance with the provisions in this Article.
|
(f) |
Any dispute under this article shall be referred to arbitration in accordance with the provisions of Article XIII hereof.
|
4. |
EXTENT OF BUILDER'S RESPONSIBILITY
|
(a) |
After delivery of the VESSEL the BUILDER and the HGS shall have no responsibility for any other DEFECTS whatsoever in the VESSEL than the DEFECTS specified in paragraph 1 of this Article, unless such defect was caused or occasioned by the negligence of the BUILDER and the HGS, its subcontractors or their respective employees within the Guarantee Period. The BUILDER and the HGS shall have no liability whatsoever in any circumstances whatsoever to the BUYER or to any third party for anything except the cost of repairing the DEFECT itself. The BUILDER and the HGS shall not in any circumstances be responsible or liable for any consequential or special losses, damages or expenses including, but not limited to, loss of time, loss of profit or earning or demurrage directly or indirectly occasioned to the BUYER or any third party by reason of the DEFECTS specified in paragraph 1 of this Article or due to repairs or other works done to the VESSEL to remedy such DEFECTS. After delivery, the BUYER shall hold the BUILDER and the HGS harmless and indemnify the BUILDER and the HGS against any claim from the BUYER or any third party whatsoever in respect of any such matters and in respect of any other claims relating to the VESSEL for which the BUILDER and the HGS do not expressly give a warranty to the BUYER under this Article.
|
(b) |
The BUILDER and the HGS shall not be responsible for any DEFECTS in any part of the VESSEL which may subsequent to delivery of the VESSEL have been replaced or in any way repaired by any other contractor, or for any DEFECTS which have been caused or aggravated by omission or improper use and maintenance of the VESSEL on the part of the BUYER, its servants or agents or by ordinary wear and tear or by any other circumstances beyond the control of the BUILDER and the HGS.
|
(c) |
The guarantee contained as hereinabove in this Article replaces and excludes any other liability, guarantee, warranty and/or condition whether expressly set out in this CONTRACT or imposed or implied by the law, customary, statutory or otherwise, by reason of the construction and sale of the VESSEL by the BUILDER and the HGS for and to the BUYER.
|
5. |
ASSIGNMENT OF SUPPLIER'S GUARANTEES
|
1. |
CURRENCY
|
2. |
TERMS OF PAYMENT
|
(a) |
First Instalment
|
(b) |
Second Instalment
|
(c) |
Third Instalment
|
(d) |
Fourth Instalment
|
(e) |
Fifth Instalment
|
(f) |
Sixth Instalment
|
(g) |
Seventh Instalment
|
(h) |
Eighth Instalment
|
(i) |
Ninth Instalment
|
3. |
DEMAND FOR PAYMENT
|
4. |
METHOD OF PAYMENT
|
(a) |
All the pre-delivery payments and the payment due on delivery in settlement of the CONTRACT PRICE as provided for in Paragraph 2 of this Article shall be made in U.S. Dollars on or before the DUE DATE thereof by telegraphic transfer as follows;
|
(i) |
The payment of the first, second, third, fourth, fifth, sixth, seventh and eighth instalments shall be made to the account no.: 117-JCD-1016942 of the KEB Hana Bank (hereinafter called the "KEB HANA") in favour of the BUILDER or any other bank in favor of the BUILDER, as designated and notified by the BUILDER to the BUYER at least three (3) business days prior to the DUE DATE.
|
(ii) |
The ninth instalment as provided for in Paragraph 2.(h) of this Article shall be deposited at the account of the KEB HANA, Account No. 117-JCD-1016942, or any other bank in favor or the BUILDER, as designated and notified by the BUILDER, in an account in the name of the BUYER by telegraphic transfer remittance at least three (3) business days prior to the scheduled delivery date of the VESSEL as reasonably calculated and notified by the BUILDER, with instructions valid for fifteen (15) banking days that the said instalment is unconditionally payable to the BUILDER against presentation by the BUILDER to the KEB HANA, Seoul, Korea or such other bank where the said amount is deposited of a duplicate original copy of the PROTOCOL OF DELIVERY AND ACCEPTANCE of the VESSEL signed by the BUILDER and the BUYER.
|
(b) |
Simultaneously with each of such payments, the BUYER shall advise the BUILDER of the details of the payments by e-mail or facsimile and at the same time, the BUYER shall cause the BUYER's remitting Bank to advise the KEB HANA, or any other bank, Seoul, Korea as the case may be, of the details of such payments by authenticated bank cable or telex.
|
5. |
REFUND BY THE BUILDER
|
6. |
TOTAL LOSS
|
(a) |
to build another vessel in place of the VESSEL so lost and deliver it under this CONTRACT to the BUYER, provided that the parties hereto shall have agreed in writing to a reasonable cost and time for the construction of such vessel in place of the lost VESSEL, and in which case, any amounts recovered under the insurance referred to in Article XXI will be applied to the construction of the VESSEL; or
|
(b) |
to refund to the BUYER the full amount of the total sums paid by the BUYER to the BUILDER under the provisions of Paragraph 2 of this Article together with interest thereon at the rate of Three per cent (3%) per annum from the date following the date of receipt by the BUILDER of such pre-delivery instalment(s) to the date of payment by the BUILDER to the BUYER of the refund, and to pay to the BUYER the invoiced cost to the BUYER of all BUYER's Supplies which were incorporated into the VESSEL, and either (i) to return to the BUYER all BUYER's Supplies which were not incorporated into the VESSEL, or (ii) to pay to the BUYER the invoiced cost to the BUYER of all such supplies.
|
7. |
DISCHARGE OF OBLIGATIONS
|
8. |
REFUND GUARANTEE
|
9. |
PERFORMANCE GUARANTEE
|
1. |
DEFINITION OF BUYER'S DEFAULT
|
(a) |
If the first, second, third, fourth, fifth, sixth, seventh and eighth instalment is not paid to the BUILDER within respective DUE DATE of such instalments; or
|
(b) |
If the ninth instalment is not deposited in accordance with Article X.4.(a)(ii) hereof or if the said ninth instalment deposit is not released to the BUILDER against presentation by the BUILDER of a copy of the original PROTOCOL OF DELIVERY AND ACCEPTANCE; or
|
(c) |
If the BUYER fails to take delivery of the VESSEL within five (5) days when the VESSEL is duly tendered for delivery by the BUILDER under the provisions of Article VII hereof; or
|
(d) |
If an order or an effective resolution shall be passed for winding up of the BUYER (except for the purpose of reorganization, merger or amalgamation).
|
2. |
EFFECT OF THE BUYER'S DEFAULT ON OR BEFORE THE DELIVERY OF THE VESSEL
|
(a) |
The DELIVERY DATE of the VESSEL shall be extended automatically for the actual period of such default to the extent that such default has actually delayed the construction of the VESSEL and the BUILDER shall not be obliged to pay any liquidated damages for the delay in delivery of the VESSEL actually caused thereby.
|
(b) |
The BUYER shall pay to the BUILDER interest at the rate of Four percent (4%) per annum in respect of the instalment(s) in default from the respective DUE DATE to the date of actual receipt by the BUILDER of the full amount of such instalment(s).
|
(c) |
If the BUYER is in default in payment of any of the instalment(s) due and payable prior to or simultaneously with the delivery of the VESSEL, the BUILDER shall, in writing or by
|
(d) |
If any of the BUYER's default continues for a period of fourteen (14) days after the BUILDER's notification to the BUYER of such default, the BUILDER may, at its option, rescind this CONTRACT by serving upon the BUYER a written notice or e-mail or facsimile notice of rescission confirmed in writing.
|
(e) |
In the event of such cancellation by the BUILDER of this CONTRACT due to the BUYER's default as provided for in paragraph 1 above, the BUILDER shall be entitled to retain and apply the instalments already paid by the BUYER to the recovery of the BUILDER's loss and damage due to the BUYER's default and the cancellation of this CONTRACT and at the same time the BUILDER shall have the full right and power either to complete or not to complete the VESSEL which is the sole property of the BUILDER as it deems fit, and to sell the VESSEL in its complete or incomplete state at a public or private sale on such terms and conditions as the BUILDER thinks fit without being answerable for any loss or damage but at the true market price in the prevailing market conditions
.
|
(f) |
In no event shall the BUYER's total liability in the event of the BUILDER rescinding this CONTRACT exceed one hundred and five percent (105%) of the CONTRACT PRICE.
|
3. |
DEFINITION OF BUILDER'S DEFAULT
|
- |
if the BUILDER, without reasonable excuse, intentionally delays in the commencement of steel cutting, keel laying and launching of the VESSEL in accordance with the latest milestone event notice informed to the BUYER for a period of sixty five (65) days or more and the BUILDER has not rectified the same within fourteen (14) days of being notified by the BUYER of such delay. However, in any case, the BUILDER reserves its full rights to change the milestone events in accordance with the BUILDER's production planning.
|
- |
if the BUILDER shall apply for or consent to the appointment of a receiver, trustee or liquidator, shall be adjudicated insolvent, shall apply to the courts for protection from its creditors, file a voluntary petition in bankruptcy or take advantage of any insolvency law, or any action shall be taken by the BUILDER having an effect similar to any of the foregoing or the equivalent thereof in any jurisdiction;
|
- |
the filing of a petition or the making of an order or the passing of an effective resolution for the winding-up of the BUILDER or the placing of the BUILDER under court protection or the appointment of a receiver of the undertaking or property of the BUILDER or the insolvency of or the cessation of the carrying on of business by the BUILDER or any analogous proceedings;
|
- |
the BUILDER, without prior written consent of the BUYER, removes the VESSEL from the SHIPYARD or assigns, sub-lets or subcontracts performance of the whole or part of its obligations except as provided for in this CONTRACT or usual shipbuilding practice of the BUILDER or as agreed by BUYER;
|
- |
the BUILDER sells or transfers title to the VESSEL to a third party or a ship owner except due to rescission of the CONTRACT by the BUYER's default; and/or
|
- |
if the Refund Guarantee ceases to be valid for whatever reason subject to the last paragraph of Article X 8. of this CONTRACT or the Refund Guarantor enters in to any insolvency or similar proceeding as defined herein.
|
4. |
EFFECT OF THE BUILDER'S DEFAULT
|
5. |
OTHER BUILDER'S DEFAULT
|
1. |
RESPONSIBILITY OF THE BUYER
|
(a) |
furnished the BUYER with the time schedule referred to above, two (2) months prior to installation of the BUYER'S SUPPLIES and
|
(b) |
given the BUYER written notice of any delay in delivery of the BUYER'S SUPPLIES and the necessary document or advice for such supplies as soon as the delay occurs which might give rise to a claim by the BUILDER under this Paragraph.
|
2. |
RESPONSIBILITY OF THE BUILDER
|
1. |
DECISION BY THE CLASSIFICATION SOCIETY
|
2. |
LAWS APPLICABLE
|
3. |
PROCEEDINGS OF ARBITRATION
|
4. |
EXPENSES
|
5. |
ENTRY IN COURT
|
6. |
ALTERATION OF DELIVERY DATE
|
1. |
TAXES
|
2. |
DUTIES
|
1. |
PATENTS, TRADEMARKS AND COPYRIGHTS
|
2. |
RIGHTS TO THE SPECIFICATIONS, PLANS AND ETC.
|
3. |
ACCESS TO INFORMATION
|
To the BUILDER
|
:
|
HYUNDAI MIPO DOCKYARD CO., LTD.
100, Bangeojinsunhwan-Doro, Dong-Gu, Ulsan 682-712, Korea
|
Attention:
|
Mr. G. H. Park/ Contract Management Dep't.
Tel : +82 52 250 3071
Facsimile: +82 52 250 3060
E-mail :khpark
@hmd.co.kr
|
|
To the SHIPYARD
|
:
|
HYUNDAI-VINASHIN SHIPYARD CO., LTD.
01 My Giang, Ninh Phuoc Commune,
Ninh Hoa District, Khanh Hoa Province, Vietnam
|
Attention:
|
Mr. K. H. Kim / Contract Management Dep't.
Tel : +84 58 3622 757
Facsimile : +84 58 3622 018
E-mail :candokim
@hmd.co.kr
|
|
To the BUYER
|
ASTARTE INTERNATIONAL INC.
C/O CENTRAL SHIPPING MONACO S.A.M.
Palais De la Scala, 1 Avenue Henry Durant, MC 98000, Monaco
|
|
Attention:
|
:
|
Mr. Andreas M. Louka, Legal Advisor
Tel : +30 210 8128 320
Facsimile : +30 210 6141 272
E-mail : legal@centralmare.com
|
Attention:
|
Mr. Souroullas Demetris P., Chief Technical Officer
Tel : +30 210 8128 290
Facsimile : +30 210 6141 276
E-mail : dps@centralmare.com
|
1. |
EXTENT OF INSURANCE COVERAGE
|
2. |
APPLICATION OF THE RECOVERED AMOUNT
|
(a) |
Partial Loss :
|
(b) |
Total Loss :
|
3. |
TERMINATION OF BUILDER'S OBLIGATION TO INSURE
|
1. |
REPRESENTATIONS OF THE PARTIES
|
(a) |
It will comply with the laws of any jurisdiction applicable to such party as it relates to this CONTRACT, including but not limited to any applicable anti-corruption and anti-bribery laws., also including, without limitation, the United States Foreign Corrupt Practices Act ("US FCPA"), the UK Bribery Act 2010 ("UK Bribery Act") and the anti-bribery or anti-corruption laws of Korea as such laws may be amended from time to time;
|
(b) |
In connection with this CONTRACT, it has not and will not make any payments or gifts or provide other advantages, or any offers or promises of payments or gifts or other advantages of any kind, directly or indirectly, to:
|
(i) |
any person or entity with the intention of obtaining or retaining a business advantage for itself or the other party to this CONTRACT;
|
(ii) |
any official or member of any government or any agency or instrumentality thereof; any official or member of any public international organisation or any agency or instrumentality thereof; any or official of a political party or any candidate for political office (herein 'public official'); or any person while knowing or reasonably suspecting that all or a portion of such money or thing of value will be offered, given or promised, directly or indirectly, to any public official, in violation of the UK Bribery Act, the US FCPA or the laws of Korea.
|
(c) |
In connection with this CONTRACT, it has not and will not request, agree to accept or accept from any person or entity any payments or gifts or other advantages, or any offers or promises of payments or gifts or other advantages of any kind, directly or indirectly, as a reward or inducement to perform its obligations under this CONTRACT in any way improperly.
|
(d) |
undertakes that it shall apply standards of business conduct which are consistent with the BUILDER's Business Partner Code of Conduct, found at http://ethics.hhi.co.kr/html_eng/2_moral/sub_02.htm, a hard copy of which is available on request.
|
2. |
INDEMNIFICATION
|
For and on behalf of
|
For and on behalf of
|
||||
The BUYER
|
The BUILDER
|
||||
/s/ Evangelos J. Pistiolis
|
/s/
Eui-Sung Yoon
|
||||
Name:
|
Evangelos J. Pistiolis
|
Name:
|
Eui-Sung Yoon
|
||
Title:
|
Attorney-in-Fact
|
Title:
|
Attorney-in-Fact
|
WITNESS
|
WITNESS
|
||||
/s/ Andreas Louka
|
/s/
Woo Jin Kim
|
||||
Name:
|
Andreas Louka
|
Name:
|
Woo Jin Kim
|
||
Title:
|
Advocate
|
Title:
|
Sales Officer/HHI
|
1. |
In consideration of the Buyer entering into the Contract with the Builder, we hereby issue our irrevocable letter of guarantee number
[]
(hereinafter referred to as the "
Guarantee
") (in favor of
[Name of the Buyer]
(herein referred to as the "
Buyer
" or
"you"
) for the account of
[Name of the Builder]
(herein referred to as the "
Builder
") as follows in connection with the shipbuilding contract dated
[]
(herein referred to as the "
Contract
"),made by and between the Buyer and the Builder for the construction and sale of
[]
having Builder's Hull No.
[]
(hereinafter referred to as the "
Vessel
").
|
2. |
If in connection with the terms of the Contract, the Buyer shall become entitled to a refund of one or more of the advance payments made to the Builder prior to the delivery of the Vessel, we hereby irrevocably guarantee the repayment of the same to the Buyer after the Buyer's written demand together with interest thereon at the Agreed Interest Rate from the date following the date of receipt by the Builder to the date of remittance by telegraphic transfer of such refund.
|
3. |
This Guarantee is an undertaking to make the above payments against a written demand conforming with the requirements of this Guarantee and is independent from the Contract. Our obligation to make payment under this Guarantee will not be discharged by amendments to the Contract, disputes under the Contract or any invalidity of the Contract.
|
4. |
The amount of this Guarantee will be automatically increased upon the Builder's receipt of the respective further installments: each time by the amount of installment of:
|
5. |
In case any refund is made to you by the Builder or by us under this Guarantee, our liability hereunder shall be automatically reduced to reflect the remaining amount due (plus interest).
|
6. |
For the purposes of this Guarantee,
"Agreed Interest Rate"
means four percent (4%) per annum provided that in the event of cancellation of the Contract. as a result of delays due to Force Majeure (as defined in the Contract) or other causes beyond the control of the Builder or in the case of total loss of the Vessel, the interest rate shall be reduced to three per cent (3%) per annum as provided in Article X of the Contract.
|
7. |
This Guarantee is payable against our simple receipt of a signed statement from you certifying that Buyer's demand for refund has been made in conformity with the Contract and the Builder has failed to make the refund within 30 days after your demand to the Builder. Any notice, claim or demand to be given or made by you under this Guarantee may be served on us either by post or by tested telex or by authorized SWIFT or equivalent as follows:
|
8. |
Refund shall be made to you by telegraphic transfer (net of bank charges) in United States Dollars within 30 days from the receipt of your demand. All payments under this Guarantee shall be made without deduction or withholding for or on account of any taxes, duties or charges whatsoever unless we are compelled by law to deduct or withhold the same, in which case we shall make the minimum deduction or withholding permitted by law and will pay such additional amounts as may be necessary in order that the amount received by you after such deductions or withholdings shall be equal to the amount which would have
|
9. |
This Guarantee shall expire and become null and void upon the earliest of:
|
(a) |
receipt by the Buyer of the sum guaranteed hereby;
|
(b) |
acceptance by the Buyer of the delivery of the Vessel; or
|
(c) |
rescission or termination of the Contract due to the Buyer's default in accordance with the Contract provided that such default has been admitted in writing by the Buyer or has been established by a final and unappealable Award by a London arbitration tribunal duly appointed under the Contract, or a Judgment of the Hgh Court of Justice in London.
|
10. |
Notwithstanding any provision herein, in the event that within 30 days from the date of your demand to the Builder referred to above, we receive notification from you or the Builder accompanied by written confirmation by an arbitrator to the effect that your claim to cancel the Contract or your claim for refund thereunder has been disputed and referred to arbitration in accordance with the Contract, we shall under this Guarantee refund to you the sum (not exceeding
[]
U.S. Dollars (US$
[]
) plus interest by the same manner hereinabove) due to you from the Builder pursuant to the award made under such arbitration (or any judgment on appeal therefrom) immediately upon receipt from you of the demand for payment of the sum and a copy of the award (or any judgment on appeal therefrom).
|
11. |
This Guarantee may be assigned or transferred by the BUYER with prior written notice to us. A person who is not a party to this Guarantee has no rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Guarantee.
|
12. |
This Guarantee shall be governed by and construed in accordance with the laws of England and any dispute arising under or in connection with this guarantee shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory modification thereof as currently in force before three arbitrators, with one to be appointed by each party and the third to be appointed by the two party appointed arbitrators..
|
13. |
We hereby warrant that we are permitted by any relevant law to which we are subject (including, where relevant, the laws of the place or places of each of our incorporation, establishment, regulation, registration and residence) to (i) issue a guarantee in this form, (ii) make payment under this guarantee in United States Dollars and (iii) designate the laws of England and arbitration in London as the applicable law, the forum and the place of jurisdiction, to which we irrevocably submit. We hereby warrant that this guarantee has been, or will be, duly registered with the relevant State authority in any legal jurisdiction in which such registration is required for any reason. We hereby warrant that we have obtained all necessary approvals and authorisations to issue this guarantee.
|
Hyundai Mipo Dockyard Co., Ltd.
100, Bangeojinsunhwan-Doro, Dong-Gu,
|
|
Ulsan 44113
|
Date : , 2017
|
Korea
|
Very truly yours,
For and on behalf of
By
Name : Title : |
Clause
|
Page
|
|
Parties
|
3
|
|
BACKGROUND
|
3
|
|
1.
|
Interpretation
|
3
|
2.
|
Business of the JVCo
|
11
|
3.
|
Completion
|
11
|
4.
|
Matters requiring consent of Shareholders and quorum for general meetings
|
12
|
5.
|
Compliance with ESG principles
|
13
|
6.
|
Dividends
|
15
|
7.
|
Directors and management
|
16
|
8.
|
Budget
|
17
|
9.
|
Accounting and Reporting
|
18
|
10.
|
Finance for the JVCo
|
19
|
11.
|
Deadlock
|
22
|
12.
|
Resolution of deadlock
|
23
|
13.
|
Transfer of shares
|
24
|
14.
|
Right of First Refusal
|
25
|
15.
|
Compulsory Transfers
|
25
|
16.
|
Valuation (only applicable to compulsory transfers)
|
27
|
17.
|
Termination and liquidation
|
28
|
18.
|
Drag Along
|
29
|
19.
|
Status of agreement
|
31
|
20.
|
Confidentiality
|
32
|
21.
|
Announcements
|
32
|
22.
|
Reflagging And Redomiclliation
|
33
|
23.
|
Further assurance
|
33
|
24.
|
Indemnity
|
34
|
25.
|
Disputes in relation to the Ship Management Agreement and Time Charter
|
34
|
26.
|
Assignment and other dealings
|
35
|
27.
|
Entire agreement
|
35
|
28.
|
Variation and waiver
|
35
|
29.
|
Costs
|
36
|
30.
|
No partnership or agency
|
36
|
31.
|
Notices
|
36
|
32.
|
Severance
|
37
|
33.
|
Agreement survives Completion
|
37
|
34.
|
Third party rights
|
37
|
35.
|
Rights and remedies
|
37
|
36.
|
Inadequacy of damages
|
37
|
37.
|
Governing law and jurisdiction
|
38
|
Schedule 1. Reserved Matters for shareholder approval
|
39
|
|
Schedule 2. Board Reserved Matters
|
41
|
|
Schedule 3 Pre Delivery Costs Schedule
|
43
|
|
Schedule 4 First Budget
|
44
|
(1) |
Lyndon International Co.,
a 100% subsidiary of Top Ships Inc, incorporated and registered in the Republic of the Marshall Islands with registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH96960 (
Top Ships
)
;
|
(2) |
Just-C Limited,
a 100% subsidiary of Gunvor Group Ltd, incorporated and registered in the Republic of Cyprus
V
with registered office at 48 Themistocles Dervis Street, Athienitis Centennial Building, Office 501, 1066, Nicosia, Cyprus (
Gunvor
)
;
and
|
(3) |
City of Athens Pte. Ltd,
incorporated and registered in the Republic of Singapore, with registered office in 8 Cross Street, #10-00 PwC Building, Singapore 048424 (
JVCo
)
|
(A) |
The JVCo
has
been established to acquire, own, maintain and dispose of the Vessel (as defined below).
|
(B) |
The Shareholders intend to regulate the relationship between them and to ensure that the conduct and operation of the Business (as defined below) is effected on the terms and subject to the conditions of this Agreement.
|
(a) |
the Relevant Person's spouse or civil partner;
|
(b) |
any other person (whether of a different sex or the same sex) with whom the Relevant Person lives as partner in an enduring family relationship;
|
(c) |
the Relevant Person's children or step-children;
|
(d) |
any children or step-children of a person within paragraph (b) (and who are not children or step-children of the Relevant Person) who live with the Relevant Person and have not attained the age of 18;
|
(e) |
the Relevant Person's parents;
|
(f) |
any body corporate;
|
i. |
where the Relevant Person is interested in shares comprised in the equity share capital of that body corporate of a nominal value equal to at least 20% of that share capital; or
|
ii. |
in relation to which the Relevant Person is entitled to exercise or control the exercise of more than 20% of the voting power at any general meeting of that body corporate;
|
(g) |
a person acting in his capacity as trustee of a trust:
|
i. |
the beneficiaries of which include the Relevant Person or a person who by virtue of the other paragraphs of this definition is a Connected Person of the Relevant Person, or
|
ii. |
the terms of which confer a power on the trustees that may be exercised for the benefit of the Relevant Person or Connected Person of the Relevant Person,
|
(h) |
a person acting in his capacity as partner
|
i. |
of the Relevant Person; or
|
ii. |
of a person who is a Connected Person of the Relevant Person; or
|
(I) |
a firm that is a legal person under the law by which it is governed and in which:
|
i. |
the Relevant Person is a partner;
|
ii. |
a partner is a Connected Person of the Relevant Person; or
|
iii. |
a partner is a firm in which the director is a partner or in which there is a partner who is a Connected Person of the Relevant Person.
|
(A) |
cast, or control the casting of, more than 50 per cent of the maximum number of votes that might be cast at a Shareholders meeting of the ultimate parent company of the relevant entity;
|
(B) |
appoint or remove all, or the majority, of the directors or other equivalent officers of the ultimate parent company of the relevant entity; or
|
(C) |
otherwise secure that the affairs of the relevant entity are conducted in accordance with its wishes.
|
a) |
The Forced Labour Convention, 1930 (No. 29);
|
b) |
The Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 29);
|
c) |
The Right to Organise and Collective Bargaining Convention, 1949 (No. 98);
|
d) |
The Equal Remuneration Convention, 1951 (No. 100);
|
e) |
The Abolition of Forced Labour Convention, 1957 (No. 105);
|
f) |
The Discrimination (Employment and Occupation) Convention, 1958 (No. 111);
|
g) |
The Minimum Age Convention, 1973 (No. 138); and
|
h) |
The Worst Forms of Child Labour Convention, 1999 (No. 182).
|
i. |
Any supra-national, national, state, municipal or local government;
|
ii. |
an instrumentality, board, commission, court or agency, whether civilian or military, of one of the above, however constituted;
|
iii. |
a government-owned or government-controlled association and/or non-commercial organisation; or
|
iv. |
a public organisation, being an organisation whose members are:
|
a. |
countries or territories;
|
b. |
governments of countries or territories; andlor
|
c. |
other public international organisations and includes, without limitation, the World Bank, the United Nations, the International Monetary Fund and the OECD.
|
(a) |
for the purposes of Clauses 18.1 to 18.8, by reference to the date of service of the Drag Along Notice; and
|
(b) |
for the purposes of Clause 18.9, by reference to the date of service of the Vessel Sale Notice,
|
a) |
In the case of JVCo or a member of its Group or any of its Agents; or
|
b) |
In the case of a Shareholder or a member of its Group or any other respective Agents, in each case, in relation to their respective affairs,
|
i. |
would violate any applicable Anti-Bribery Laws or Sanctions;
|
ii. |
was intended to influence any person to act or reward any person for acting in breach of an expectation of good faith, impartiality or trust for which it would otherwise be forbidden by Anti-Bribery Laws for the recipient to accept; or
|
iii. |
was made to, or for, a Public Official with the intention of influencing them and obtaining or retaining an advantage in the conduct of business.
|
a) |
an employee, officer or representative of, or any person otherwise acting in an official capacity for or on behalf of, a Governmental Authority;
|
b) |
a person holding a legislative, administrative or judicial position of any kind, regardless of whether elected or appointed, at a Governmental Authority;
|
c) |
an officer of, or individual who holds a position in, a political party;
|
d) |
a publicly declared candidate for political office;
|
e) |
an individual who holds any other official, ceremonial or other appointed or inherited position with a Governmental Authority; or
|
f) |
who exercises a public function for or on behalf of a country or territory or for any public agency or public enterprise of that country or territory.
|
a) |
United Nations Sanctions imposed pursuant to any United Nations Security Council Resolution;
|
b) |
U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of Treasury;
|
c) |
EU restrictive measures implemented pursuant to any EU Council or Commission Regulation or Decision adopted pursuant to a Common Position in furtherance of the EU's Common Foreign and Security Policy; and
|
d) |
Any other applicable sanctions or export control laws and regulations
|
(a) |
for the purposes of Clauses 18.1 to 18.8 means the amount (if any) by which the Offer Price would have had to be increased if the price per share offered by the Proposed Purchaser for the Sellers' Shares had been calculated on the basis of the Minimum Valuation net of the liabilities of JVCo (including but not limited to any Shareholder Loans and bank loans); and
|
(b) |
for the purposes of Clause 18.9. means, the amount (if any) that the Vessel Offer Price is less than the Minimum Valuation.
|
1.2 |
The
Schedules
form part of this agreement and shall have effect as if set out in full in the body of this agreement. Any reference to this agreement includes the Schedules.
|
1.3 |
A reference to
this "agreement" or this "Agreement"
or to any
other agreement or document referred to in this agreement
is a reference to this agreement or such other agreement or document as varied or novated in accordance with its terms from time to time.
|
1.4 |
Unless the context otherwise requires, words in the
singular
shall include the
plural
and in the plural shall include the singular.
|
1.5 |
A
person
includes a natural person, corporate or unincorporated body (whether or not having separate legal personality).
|
1.6 |
A reference to a
Party
shall include that Party's successors and permitted assigns.
|
1.7 |
A reference to
writing
or
written
includes faxes and emails.
|
1.8 |
Where the words
including
or
includes
are used in this agreement, they are deemed to have the words
"without limitation"
following them.
|
1.9 |
Where the context permits,
other
and
otherwise
are illustrative and shall not limit the sense of the words preceding them.
|
1.10 |
References to a document in
agreed form
are to that document in the form agreed by the Parties on or before the execution of this Agreement and signed or initialled by them or on their behalf for identification.
|
1.11 |
"
$
" or
"USD"
denotes the lawful currency of the United States of America.
|
1.12 |
Any obligation on a Party not to do something includes an obligation not to allow that thing to be done.
|
2.1 |
Each Party shall use its reasonable endeavours to promote and develop the Business to the best advantage of the JVCo.
|
2.2 |
Unless agreed otherwise by the Parties:
|
(a) |
Pending Delivery, Vessel construction supervision shall be carried out by Central Shipping Monaco SAM;
|
(b) |
Upon Delivery, JVCo shall time charter the Vessel to Clearlake on the terms of the Time Charter;
|
(c) |
Upon Delivery, management of the Vessel shall be carried out by Central Shipping Monaco SAM on the terms of the Ship Management Agreement (the date of commencement of which will be 3 months prior to Delivery); and
|
(d) |
Following the termination or expiry of the Time Charter, the JVCo's commercial strategy shall be a Board Reserved Matter.
|
2.3 |
The Parties shall act in good faith in relation to this agreement and shall exercise their respective rights and powers to ensure, so far as they lawfully can, that the JVCo complies with its obligations under this agreement and any other agreements to which the JVCo is a party, and that the Business is conducted in accordance with Good Industry Practice and on sound commercial and profit-making principles and in compliance with all Applicable Laws and the ESG Principles.
|
2.4 |
Top Ships shall procure that Central Shipping Monaco SAM (or such other manager as may be appointed by the Parties from time to time) (
Manager
)
shall supervise the construction of the Vessel under the Shipbuilding Contract with a view to ensuring that the Vessel when delivered complies with the same and Top Ships undertakes to ensure for so long as Central Shipping Monaco SAM supervises the construction of the vessel that (i) it shall at all times act in accordance with first class supervision practice; and (ii) Gunvor is provided with monthly reports on the progress of the construction of the Vessel in such form and containing such information as Gunvor shall reasonably require.
|
3.1 |
Completion shall take place on the date this agreement is signed by the Parties hereto.
|
3.2 |
At Completion, the Parties shall procure that such shareholder and board meetings of the JVCo and of its subsidiary City of Athens Inc. are held as may be necessary to:
|
(a) |
adopt the Articles;
|
(b) |
appoint Jan Andersen and Anbarasan Ramasamy as Gunvor Directors and to the extent not already effected appoint Alexandros Tsirikos and Andreas Louka as Top Ships directors so that there shall be a total of four (4) directors;
|
(c) |
adopt the First Budget; and
|
(d) |
ensure that the board of directors of the JVCo subsidiary City of Athens Inc. shall consist of a sole director, whose appointment and terms of reference shall be a Board Reserved Matter but who shall at all times only act in accordance with instructions from the Board in respect of any actions or decisions to be taken by or matters to be addressed by City of Athens Inc. (including but not limited to any actions or decisions to be taken or matters to be addressed in respect of the Shipbuilding Contract).
|
4.1 |
Subject to clause 10.11, each Party shall procure that the JVCo and its subsidiary City of Athens Inc. shall not, without the prior written approval of all Shareholders, carry out any of the Reserved Matters (and for the avoidance of doubt where any matter would be a Reserved Matter or Board Reserved Matter in relation to the JVCo the equivalent matter in respect of the subsidiary City of Athens Inc. shall also be a Reserved Matter or a Board Reserved Matter).
|
4.2 |
The Board may convene a general meeting of the JVCo at any time. Such a general meeting shall be held at the JCVo's registered office or at such other places as all the Shareholders entitled to receive notice of and attend and vote at such a meeting, may determine.
|
4.3 |
At least twenty one (21) Business Days' notice of a general meeting shall be given to each Shareholder, unless the Shareholders approve in writing of a shorter period. Such notice shall be accompanied by an agenda identifying in reasonable detail the matters to be discussed at the meeting together with copies of any relevant papers to be discussed at the meeting.
|
4.4 |
Subject to clause 4.5, the quorum at any general meeting of the JVCo, or adjourned general meeting, shall be seventy five per cent (75%) of the issued Shares of the JVCo present when the relevant business is transacted. A person may participate in a meeting by telephone or other means whereby such person may at the same time hear and be heard by everybody else present; and persons who participate in this way shall be considered present at the meeting. If a quorum is not present within thirty (30) minutes of the time when the meeting should have begun or if during the meeting there is no longer a quorum, the meeting shall be adjourned to and reconvened to the same time and place
|
4.5 |
The quorum at any general meeting of the JVCo, where a Reserved Matter will be discussed, shall be one hundred per cent (100%) of the issued Shares of the JVCo.
|
4.6 |
No business shall be transacted by any general meeting unless a quorum is present at the commencement of the meeting and also when that business is voted on.
|
4.7 |
Subject to Clause 10.11, a resolution at a general meeting is passed if more votes are cast for it than against it.
|
4.8 |
At a general meeting, every Shareholder present in person (or by proxy) shall have one vote for each Share it holds (or is proxy for); and on a vote on a written members' resolution each Shareholder has one vote for each Share it holds, subject to applicable law. Any chairman of a general meeting shall not in any circumstances be entitled to a casting vote.
|
4.9 |
Notwithstanding any other provision of this Agreement, a Shareholder's written resolution is adopted when each of the Shareholders (or their representatives) has signed one or more copies of it. Once a Shareholder's written resolution has been adopted, it shall be treated as if it had been a decision taken at a general meeting in accordance with this Agreement.
|
5.1 |
Each Shareholder shall in respect of matters relating to JVCo, JVCo's subsidiary City of Athens Inc. and the Business:
|
(a) |
Comply with applicable Anti-Bribery Laws and Sanctions;
|
(b) |
Not take any action, and use its respective reasonable endeavours to procure that none of its respective Affiliates nor any of its or their respective Agents take any action, directly or indirectly, which would (or would reasonably be expected to) cause JVCo or the other Shareholder to be prosecuted and found guilty of, or rendered liable for, any violation of any applicable Anti-Bribery Laws or Sanctions; and
|
(c) |
use reasonable endeavours to procure that none of the Agents of It or its Affiliates take any action, directly or indirectly, which would (or would reasonably be expected to) cause JVCo or the other Shareholder to be prosecuted and found guilty of, or rendered liable for, any violation of any applicable Anti-Bribery Laws or Sanctions.
|
5.2 |
A Shareholder or JVCo shall promptly inform the Board if it becomes aware of any breach of any of the obligations referred to in clause 5.1 by it, any of its Affiliates or any of its or their respective Agents.
|
5.3 |
JVCo shall and shall procure (to the extent it is able), that its Agents shall:
|
(a) |
at all times comply with applicable ESG Principles and shall not undertake or cause to be undertaken any Prohibited Act;
|
(b) |
not request any action, inaction or services by any third party that would violate any ESG Principles or cause that third party to undertake or cause to be undertaken any Prohibited Act;
|
(c) |
not use any external Entity, representative or consultant unless the external Entity, representative or consultant has been subject to reasonable due diligence to ensure that it has a good business reputation and conducts its business in an ethical fashion and in compliance with the ESG Principles;
|
(d) |
not take any action, directly or indirectly, which would (or would reasonably be expected to) cause the JVCo or the other Shareholder to be prosecuted and found guilty of, or rendered liable for, any violation of any applicable Anti-Bribery Laws or Sanctions.
|
5.4 |
JVCo shall and shall procure that City of Athens Inc. use reasonable endeavours to procure that none of their Agents take any action, directly or indirectly, which would (or would reasonably be expected to) cause any such company or Entity or the other Shareholder to be prosecuted and found guilty of, or rendered liable for, any violation of any Anti-Bribery Laws or Sanctions.
|
5.5 |
The obligation to use reasonable endeavours in respect of Agents referred to in clauses 5.1 and 5.4 shall include an obligation to inform each Agent of the obligations which apply to them pursuant to this Agreement.
|
5.6 |
The JV Co hereby undertakes to the Shareholders that it shall, within 45 Business Days following the end of each financial year, produce an ESG Principles Compliance Report, in respect of the JVCo and City of Athens Inc. for such financial year and present this to the Shareholders. The format and contents of this report will be agreed by the Board by the first financial year end.
|
5.7 |
The JV Co shall not and shall procure that City of Athens Inc. does not:
|
(a) |
engage in or carry on any transactions, business or trade or enter into any contract or association with or involving, directly or indirectly, countries, territories, governments, entities, individuals and/or other persons that are the
|
(b) |
engage in any activity that would reasonably be expected to cause it to become the target of Sanctions.
|
5.8 |
The JV Co shall and shall procure that City of Athens Inc. make and keep books, records and accounts, which accurately and fairly reflect its transactions, acquisitions and dispositions of goods, services and assets, and shall keep such books, records and accounts for a period of at least seven years following their creation.
|
5.9 |
Each Shareholder shall be entitled (at its cost) to have access to and to inspect all invoices and accompanying documents issued by, and the books and records of the JVCo and City of Athens Inc. in order to verify compliance with this clause 5 provided this right shall be exercised in a manner and at times which shall minimise any disruption to the Business (and may not be exercised at any time that would coincide with a year-end or quarter-end). The JVCo and City of Athens Inc. shall co-operate fully and promptly with any such audit or inspection.
|
5.10 |
Each Shareholder and the JVCo shall co-operate with any compliance audit or investigation and provide all information and assistance properly requested upon an investigation or inquiry by a Governmental Authority directed to any of them in respect of JVCo and its Business. Any additional costs incurred by each Shareholder in complying with this clause shall be borne by such Shareholder.
|
5.11 |
JV Co shall ensure that no Public Official will be hired or engaged as a consultant in any capacity by them or the JVCo or City of Athens Inc.
|
5.12 |
Each Shareholder shall not and shall use reasonable endeavours to procure that its shareholders, directors, or employees or any of its Affiliates will not act in contravention of the OECD Convention, the OECD Guidelines or UNCAC or offer, give or promise any payment or any undue pecuniary or other advantage directly or indirectly to, any employee, officer, official, or representative of any government or to any foreign public official (as defined in the OECD Convention) or to any political party or candidate for political office.
|
7.1 |
The Board has responsibility for the supervision and management of the JVCo and its Business, subject to clause 4.
|
7.2 |
Subject to clause 10.10, there shall be four (4) directors on the Board made up of two (2) Top Ships Directors and two (2) Gunvor Directors.
|
7.3 |
Gunvor may appoint a Gunvor Director, and remove a Gunvor Director whom it has appointed, by giving notice in writing to JVCo and Top Ships. Top Ships may appoint a Top Ships Director, and remove a Top Ships Director whom it has appointed, by giving notice in writing to JVCo and Gunvor. The appointment or removal takes effect on the date on which the notice is received by JVCo or, if a later date is given in the notice, on that date.
|
7.4 |
The Shareholder removing a Director shall indemnify and keep indemnified the JVCo against any claim connected with the Director's removal from office.
|
7.5 |
The Parties intend there to be a meeting of Directors at least once every three (3) months. Participation in such meetings by telephone or other similar methods whereby such the participating person may at the same time hear and be heard by everybody else present at the meeting will be permitted and persons who participate in this way shall be considered present at the meeting.
|
7.6 |
The Parties shall ensure that at least ten (10) Business Days' notice of a meeting of Directors is given to all Directors entitled to receive notice accompanied by an agenda specifying in reasonable detail the matters to be raised.
|
7.7 |
A shorter period of notice of a meeting of Directors may be given if at least one (1) Top Ships Director and one (1) Gunvor Director agree in writing except as to where a Board Reserved Matter is to be discussed, where all Directors should consent to such a shorter period of notice.
|
7.8 |
The quorum at a meeting of Directors at which there are to be discussed any Board Reserved Matter (including adjourned meetings) is all of the Directors at the time of the meeting.
|
7.9 |
The quorum at any other meeting of Directors (including adjourned meetings) is one (1) Top Ships Director and one (1) Gunvor Director.
|
7.10 |
No business shall be conducted at any meeting of Directors unless a quorum is present at the beginning of the meeting and at the time when there is to be voting on any business.
|
7.11 |
The Shareholders shall procure that all Board meetings (including adjourned meetings) are quorate. However, if for any reason a quorum is not present within thirty (30) minutes of the time specified for a Directors' meeting in the notice of the meeting or if during the meeting there is no longer a quorum, then it shall be adjourned for same time and place on the Business Day falling five (5) Business Days immediately after the proposed date of the meeting, unless all the Directors entitled to receive notice of and attend and vote at such a meeting, agree in writing on another period.
|
7.12 |
A meeting of Directors shall be adjourned to another time or date (5 Business Days later) at the request of all the Top Ships Directors or all the Gunvor Directors present at the meeting. No business may be conducted at a meeting after such a request has been made. No more than one such adjournment may be made in respect of a meeting.
|
7.13 |
Except for Board Reserved Matters, a board resolution is passed if more votes are cast for it than against it.
|
7.14 |
in the case of Board Reserved Matters, a resolution is only passed if all of the Directors have voted in favour of it.
|
7.15 |
For the avoidance of doubt any chairman of a Meeting of the Board shall not in any circumstances be entitled to a casting vote.
|
7.16 |
Notwithstanding any other provision of this Agreement, a Directors' written resolution is adopted when each of the Directors has signed one or more copies of it. Once a Directors' written resolution is adopted it shall be treated as if it had been a decision taken at a meeting of the Board in accordance with this Agreement.
|
7.17 |
Unless otherwise agreed by the Shareholders, no Director shall be entitled to receive any remuneration by way of salary, commission, fees or otherwise in relation to the performance of their duties as a Director from JVCo.
|
8.1 |
The Budget is an annual budget for the Vessel which shall include the budget for the purposes of the Ship Management Agreement and all finance, capital expenses and operating costs plus all other non-Vessel related costs of the JVCo (included but not limited to the corporate costs) and which shall be prepared by the Manager. The First Budget shall also include a working capital reserve of one (1) month's operating expenses.
|
8.2 |
The Budget for the period from the date of Delivery until 31
st
December of that year is set out in Schedule 4 and shall be adopted by the Parties at Completion (
First Budget
)
.
|
8.3 |
Budgets other than the First Budget shall be:
|
(a) |
prepared by the Board at least sixty (60) days before each calendar year; and
|
(b) |
considered, and if thought fit, adopted and approved unanimously by the Board.
|
9.1 |
Accounting Principles
|
9.2 |
Reporting to the Shareholders
|
9.2.1. |
The JVCo shall supply the Shareholders on an equal and timely basis with:
|
(a) |
quarterly management accounts for the JVCo in respect of each quarter within thirty (30) days of the end of such quarter, on a best effort basis, but in no case later than forty five (45) days of the end of such quarter, such accounts to include:
|
i. |
a balance sheet, profit and loss account and cashflow statement per US GAAP;
|
ii. |
a cashflow forecast for the next three months;
|
iii. |
a capital expenditure statement;
|
iv. |
Information on operating and capital expenses incurred during the quarter that were not included in the approved Budget.
|
v. |
such additional information as the Shareholders shall agree from time to time,
|
(b) |
draft annual accounts for the JVCo both under US GAAP and IFRS in a form substantially approved by the Auditors, no later than ninety (90) days after the end of the financial year to which they relate and in any event no later than is necessary to allow compliance with Singapore law filing requirements;
|
(c) |
annual audited accounts under IFRS of JVCo by no later than 30th of April in each year; and
|
(d) |
a report on a quarterly basis (unless the Parties agree another frequency) of its compliance with the principles of the Gunvor Health, Safety, Environmental and Communities Governance Framework the content of which is to be agreed by the Board; and
|
(e) |
monthly information in relation to the cash inflows and outflows of the relevant JVCo earnings account.
|
9.3 |
Access to information
|
9.3.1 |
Subject to clause 20, each Shareholder and its authorised representatives shall be allowed access at all reasonable times to examine (and at its expense to take copies of) the books and records of the JVCo and its subsidiary, City of Athens, Inc.
|
9.3.2. |
Each Shareholder reserves the right to undertake an audit (financial and/or health, safety environmental and communities governance and/or operational risks-related) of the JVCo and / or City of Athens Inc. at its own cost, either by Its own internal audit staff or by external advisers. Such Shareholder shall give the JVCo at least two weeks written notice of its intention to carry out such an audit. The JVCo and City of Athens Inc. shall co-operate fully and promptly with any such audit or inspection and take into account any recommendations arising from any assessments to be conducted by a Shareholder and implement any remediation requirements.
|
10.1 |
The maximum amount each Shareholder is severally committed to contribute to the JVCo during the pre-delivery period shall be such amounts in the Respective Proportions as are necessary to fund the pre-Delivery costs of the JVCo in accordance with the Pre-Delivery Costs Schedule.
|
10.2 |
Following the adoption of the First Budget and any subsequent Budget by the Board, the Parties shall contribute to the JVCo in their Respective Proportions and at the times specified therein the amounts required by the Budget at the times requested by the Board, and within five (5) Business Days of such request.
|
10.3 |
The Parties agree that, if JVCo requires finance in addition to the Budget, and provided that there are insufficient funds in the earnings account, the JVCo shall be financed, so far as practicable, from an external funding source or sources (parties providing external finance being a "Lender") and on terms to be agreed between the Board, the Parties and any relevant third Parties.
|
10.4 |
With regard to clause 10.3 above, the Parties shall seek the required externally sourced finance on the best possible terms available at the time and for a transaction of this type, having in mind:
|
(a) |
Interest rate being offered;
|
(b) |
the fees and other costs which would apply;
|
(c) |
the repayment terms;
|
(d) |
the percentage of the Fair Market Value of the Vessel that would be advanced and the related loan to value covenant required;
|
(e) |
the terms of security required by any Lender (it being understood that industry standard terms may require the grant of a first priority mortgage over the Vessel and collateral deed of covenants (if applicable) and an assignment of the Vessel's earning and insurances and on the basis that no parent guarantees shall be provided as part of the security to the Lender); and
|
(f) |
the need for the terms of the loan to accommodate the objectives set out in this Agreement.
|
10.5 |
For the avoidance of doubt, the final decision as to whether to accept a proposal from a Lender shall constitute a Reserved Matter.
|
10.6 |
In the event any Shareholder (
Party A
)
is required to make any payment to any Lender in connection with any form of guarantee issued in favour of such Lender in respect of any lending facility to the JVCo (provided in accordance with this Agreement), the other Shareholder (
Indemnifying Party
)
shall, subject to payment or due demand of the relevant sum having been properly evidenced to the Indemnifying Party, indemnify and keep Party A indemnified in respect of their Respective Proportion of any sum paid or duly demanded to be paid by Party A from time to time under the terms of such guarantee with the intention that each of the Shareholder bears its Respective Proportion of such liability. This indemnity shall not prejudice or replace any right of subrogation that may exist against the JVCo.
|
10.7 |
If the Board resolves at any time that JVCo requires further finance in addition to funds available in the earnings account and any financing it has taken out pursuant to clause 10.3 (
Additional Funding
)
,
the Board shall Issue a written notice to each Party (
Funding Notice
)
setting out the amount of the Additional Funding required and the reasons for such Additional Funding. For the avoidance of doubt the Board shall not issue a Funding Notice until such time as all efforts to raise additional funding from external sources have been exhausted.
|
10.8 |
Within five (5) Business Days of receiving the Funding Notice, the Parties shall use their reasonable endeavours to determine whether the Additional Funding should be provided and, if so, whether it shall be provided by means of:
|
(a) |
loans from the Shareholders in their Respective Proportions;
|
(b) |
a subscription for further Shares in the JVCo by the Shareholder in their Respective Proportions;
|
(c) |
a mixture of (a) and (b); or
|
(d) |
by any other means.
|
10.9 |
If any Shareholder fails to contribute such sum as is required to the JVCo in its Respective Proportion pursuant to clause 10.8 (
Non-Paying Shareholder
)
within the timescale provided then, the other Shareholder (
Paying Shareholder
)
shall be entitled, but not bound, within a further 30 days to either:
|
(a) |
where the contribution is to be made in return for a subscription for further shares, subscribe for the Non-Paying Shareholder's Respective Proportion of the Shares; or
|
(b) |
advance an amount equal to the Non-Paying Shareholder's contribution by way of a loan to the JVCo, such loan to be on an arm's length basis; or
|
(c) |
upon the expiry of such thirty (30) day period, exercise its right as Paying Shareholder under clause 15.
|
10.10 |
If as a result of the application of clause 10.9 (a) and/or 10.9 (c), either Top Ships on the one hand or Gunvor on the other hand hold:
|
(a) |
less than 20% of the total number of Shares, such Shareholder shall not be entitled to nominate any Director to the Board and shall procure that both its existing Directors resign;
|
(b) |
20% or more but less than 50% of the total number of Shares, such Shareholder shall be entitled to nominate for appointment up to one (1) Director to the Board and shall procure that one (1) of its existing Directors resign;
|
(c) |
50% or more but less than 51% of the total number of Shares, such Shareholder shall be entitled to nominate for appointment up to two (2) Directors to the Board;
|
(d) |
51% or more but less than 79.99% of the total number of Shares, such Shareholder shall be entitled to nominate for appointment up to three (3) Directors to the Board;
|
(e) |
80% or more of the total number of Shares, such Shareholder shall be entitled to nominate for appointment up to four (4) Directors to the Board,
|
10.11 |
If following the application of clause 10.9 (a) and/or 10.9 (c) Top Ships on the one hand, or Gunvor on the other hand own 80% or more of the Shares, Reserved Matters shall be passed if approved by holders representing 80% or more of the Shares.
|
11.1 |
There is a deadlock if a resolution in respect of any Reserved Matters or Board Reserved Matters Is proposed and one of the following applies:
|
(a) |
the Board has not passed a resolution or approved a written resolution relating to a Board Reserved Matter which has been put to it in accordance with this Agreement or the Articles, either because the requisite majority has not voted in favour of it or because two or more consecutive Board meetings have been dissolved for lack of a quorum; or
|
(b) |
the Shareholders has not passed a resolution or approved a written resolution relating to a Reserved Matter which has been put to it in accordance with this Agreement or the Articles, either because the requisite majority has not voted in favour of it or because two or more consecutive Board meetings have been dissolved for lack of a quorum.
|
11.2 |
Either Gunvor or Top Ships may within five (5) Business Days of the meeting at which the deadlock arises serve notice on the other Shareholder (
Deadlock Notice
)
stating that in its opinion a deadlock has occurred and identifying the matter giving rise to the deadlock.
|
11.3 |
On the date of service of the Deadlock Notice, Gunvor and Top Ships shall each refer the Reserved Matter or Board Reserved Matter giving rise to the deadlock to their respective Chief Executive Officers of Top Ships Inc. and Gunvor Group Ltd for resolution. The Parties shall use all reasonable endeavours in good faith to resolve the dispute within fourteen (14) days in a way that is in the best interests of the JVCo.
|
11.4 |
For the avoidance of doubt neither Party shall be entitled to serve a Deadlock Notice if a resolution is proposed during a meeting of the Board or the Shareholders in respect of any matter that is not a Reserved Matter or Board Reserved Matter.
|
12.1 |
Subject to clause 12.8 if within fourteen (14) days of the service of a Deadlock Notice the Shareholders fail to resolve the dispute to which such Deadlock Notice relates either Shareholder may serve a
Deadlock Resolution Notice
on the other Shareholder within five (5) Business Days. A Deadlock Resolution Notice is a notice served by a Shareholder on the other in which the server offers, at the price for each Share specified in the notice (in cash and not on deferred terms), either to: (i) sell all its Shares in the JVCo to the recipient of the notice; or (ii) to buy all the recipient's Shares in the JVCo.
|
12.2 |
The recipient of a Deadlock Resolution Notice may choose to do either of the following, at the price for each Share specified in the Deadlock Resolution Notice, by serving a counter-notice within ten (10) Business Days of receiving the Deadlock Resolution Notice:
|
(a) |
buy all the Shares in the JVCo together with any outstanding Shareholder loans of the server of the Deadlock Resolution Notice; or
|
(b) |
sell all its Shares in the JVCo together with any outstanding Shareholder loans to the server of the Deadlock Resolution Notice.
|
12.3 |
If no counter-notice is served within the period of ten (10) Business Days available, the recipient of the Deadlock Resolution Notice is deemed to have accepted the offer in the Deadlock Resolution Notice at the expiry of that period.
|
12.4 |
The service of a counter-notice, or deemed acceptance of the Deadlock Resolution Notice, shall bind the Shareholders to buy and sell the applicable Shares and Shareholder loans (as the case may be) provided that the seller shall warrant that it is selling the applicable Shares and Shareholder loans with full title guarantee and shall provide to the other Shareholder such information and documentation as is reasonably requested to prove good title to the Shares and to enable the other Shareholder to be registered as the holder of such Shares. The closing of the transaction shall take place within thirty (30) days from the date of the counter notice or the date of the deemed acceptance.
|
12.5 |
If both Gunvor and Top Ships serve a Deadlock Resolution Notice under clause 12.1 only the Deadlock Resolution Notice containing the highest price per share shall be effective.
|
12.6 |
If at the end of the ten (10) Business Day period specified in clause 12.2 neither Top Ships nor Gunvor has served a Deadlock Resolution Notice, either Shareholder may
|
12.7 |
References in this clause to Shares held by a Shareholder in the JVCo are to all the Shares in the JVCo held by that Shareholder and not to some only of those Shares.
|
12.8 |
A Shareholder shall not be entitled to serve a Deadlock Resolution Notice pursuant to clause 12.1 in respect of a deadlock which arises in the Lock Up Period (as defined below). However, where a Shareholder is not entitled to serve a Deadlock Resolution Notice pursuant to this clause 12.8 and the Reserved Matter or Board Reserved Matter in respect of which the deadlock arises is marked as a "Deadlock Matter" in Schedule 1 or Schedule 2 such Shareholder shall be entitled to refer the deadlock to arbitration pursuant to clause 37 and the arbitrators shall be asked to make a binding determination on how the deadlock should be resolved in the best interests of the JV Co. Where the Reserved Matter or Board Reserved Matter in respect of which the deadlock arises Is not marked as "Deadlock Matter" in Schedule 1 or Schedule 2 there shall be no requirements to resolve the deadlock and the relevant resolution shall not be carried.
|
13.1 |
No Party shall create any Encumbrance over, transfer or otherwise dispose of or give any person any rights in or over any Share or interest unless
|
(a) |
it is permitted or required under this agreement; and
|
(b) |
in the case of transfer of Shares the transferee also acquires the benefit and burden of any outstanding loan from the transferor to JVCo and procures the release of any guarantee entered into by the transferor.
|
13.2 |
No Shareholder may transfer any of its Shares (other than to a Permitted Transferee (as defined below)) for a period of three (3) years from the Completion Date (
"Lock Up Period"
)
unless it is otherwise permitted or required to do so under this Agreement. It is also agreed that the JVCo shall not sell the Vessel to any third party during the Lock Up Period, unless approved by both Shareholders as a Reserved Matter.
|
13.3 |
A Shareholder may transfer all (but not some) of its Shares to a member of its Group (a
"Permitted Transferee"
)
without the consent of the other Shareholder (a
"Permitted Transfer"
)
if, at the time of the transfer and in relation to all the Shares being transferred, the transferring Party:
|
(a) |
procures that the transferee executes and delivers to the other Parties a Deed of Adherence agreeing to be bound by the terms of this agreement as if it was a Party to it; and
|
(b) |
guarantees all the obligations and any liabilities of the transferee under this agreement
|
13.4 |
In no circumstance is a transfer of Shares to a Restricted Person allowed.
|
13.5 |
Notwithstanding any other provision of this Agreement, the Shareholders irrevocably
undertake and confirm that they shall not take any action(s) (including but not limited to transferring any Shares) which would result in JVCo failing to comply with the terms of any loan or related security documentation entered into by JVCo, the Shareholders or any of their Affiliates and any external lender or financial institution without first obtaining the written consent of the applicable external lender or
financial
institution.
|
14.1 |
Subject to clauses 13.4 and 14.2, if any Shareholder (
"Seller"
)
wishes to transfer some
|
14.2 |
The right of first refusal in clause 14.1 shall not apply to a Permitted Transfer.
|
14.3 |
The Seller shall give a notice to the Continuing Shareholder specifying details of the proposed transfer including the name of the Proposed Buyer and the proposed price (a
Transfer Notice
)
.
The Continuing Shareholder shall have ten (10) Business Days to inform the Seller whether or not they wish to exercise their right of first refusal. If a Continuing Shareholder does wish to so exercise its right, then completion shall occur no later than forty five (45) Business Days thereafter. If a Continuing Shareholder does not wish to exercise its right to do so (or if it does not reply), then the Seller may transfer the Shares and Shareholder Loans not taken up by the Continuing Shareholders to the Proposed Buyer.
|
15.1 |
If anything referred to in this clause 15.1 happens to a Shareholder it is a
Compulsory Transfer Event
in respect of that Shareholder and the provisions of this clause 15 and clause 16 shall apply:
|
(a) |
the Shareholder becomes insolvent or is unable to pay its debts within the meaning of the insolvency legislation applicable to that Shareholder and has stopped paying its debts as they fall due;
|
(b) |
a step is taken to initiate any process by or under which:
|
i. |
the ability of the creditors of the Shareholder to take any action to enforce their debts is suspended, restricted or prevented; or
|
ii. |
a person is appointed to manage the affairs, business and assets of the Shareholder on behalf of the Shareholder's creditors; or
|
iii. |
the holder of a charge over the business and/or assets of the Shareholder is appointed to control the business and/or assets of the Shareholder.
|
(c) |
the Shareholder commits a material breach of this agreement which if capable of remedy has not been so remedied within 20 Business Days of the other Shareholder requiring such remedy; or
|
(d) |
the Paying Shareholder invokes the provision of Clause 10.9(c) due to the failure of the Non-Paying Shareholder to comply therewith; or
|
(e) |
the Shareholder is subject to a Change of Control.
|
15.2 |
If a Compulsory Transfer Event happens to a Shareholder, (in this clause the
Seller
)
,
it shall give notice of such event to the other Shareholder (in this clause the
Buyer
)
as soon as possible and, if it does not, it is deemed to have given notice of it on the date on which the Buyer becomes aware of such Compulsory Transfer Event (
"Compulsory Transfer Notice"
)
.
|
15.3 |
As soon as practicable after service, or deemed service, of the Compulsory Transfer Notice, the Shareholders shall appoint the Valuer to determine (as defined below) the Fair Value of the Seller's Shares in the JVCo (
"Sale Shares"
)
in accordance with clause 16.
|
15.4 |
The Buyer has the right, within ten (10) Business Days of receiving notification of the Fair Value (as defined below) determined by the Valuer (as defined below) to serve a notice on the Seller either to:
|
(a) |
buy all of the Sale Shares at 80% of the Fair Value (as defined below) and acquire the Shareholder Loans at the value of the outstanding principal plus accrued but unpaid interests (unless the Compulsory Transfer Event(s) relied on to serve the Compulsory Transfer Notice includes an event under clauses 15.1 (a), (b) or (e) in which case the reference to "80%" shall be replaced with a reference to "100%"); or
|
(b) |
sell all of its own Shares to the Seller at 120% of the Fair Value (as defined below) and sell the Shareholder Loans at the value of the outstanding principal +accrued but unpaid interests (unless the Compulsory Transfer Event(s) relied on to serve the Compulsory Transfer Notice include an event under clauses 15.1 (a), (b) or (e) in which case the reference to "120%" shall be replaced with
|
15.5 |
The service of a notice to buy or sell (as the case may be) under clause 15.4 shall bind the Shareholders to buy and sell the Shares (and, if applicable Shareholder Loans) (as the case may be) and the Seller shall warrant that it is selling the Shares (and Shareholder Loans if applicable) with full title guarantee and shall provide to the other Shareholder such information and documentation as is reasonably requested to prove good title to the Shares (and Shareholder Loans if applicable) and to enable the other Shareholder to be registered as the holder of such Shares (and Shareholder Loans if applicable).
|
15.6 |
If at the end of the period specified in clause 15.4 the Buyer has not served a notice to buy the Sale Shares (and Shareholder Loans if applicable) or sell its own Shares (and Shareholder Loans if applicable) pursuant to clause (b) any rights of the Buyer pursuant to clause 15.4 to acquire the Sale Shares (and Shareholder Loans if applicable) or sell its Shares (and Shareholder Loans if applicable) shall lapse.
|
16.1 |
The Shareholders shall endeavour to agree on the appointment of an independent valuer (the "Valuer') and to agree the terms of the appointment with the Valuer.
|
16.2 |
If the Shareholders are unable to agree on the appointment of a Valuer within fifteen (15) Business Days of either Shareholder serving details of a suggested valuer on the other, either Shareholder shall then be entitled to request an arbitrator to appoint a Valuer of repute with international experience in the valuation of shipping companies and agree the Valuer's terms of appointment.
|
16.3 |
The Valuer shall be requested to determine the Fair Value within forty five (45) Business Days of his appointment and to notify the Shareholders in writing of his determination.
|
16.4 |
All matters under this clause 16 shall be conducted, and the Valuer's decisions shall be written, in the English language.
|
16.5 |
The Fair Value for any Sale Share shall be the price per Share determined by the Valuer based on the mean average of the market valuations of the Vessel obtained by the Valuer from each of Clarkson Research Services Ltd, Arrow Research Ltd and Simpson Spence and Young Ltd and the following further bases and assumptions:
|
(a) |
valuing each of the Sale Shares as a proportion of the total value of all the issued shares in the capital of the JVCo without any premium or discount being
|
(b) |
if the JVCo is then carrying on business as a going concern, on the assumption that it will continue to do so;
|
(c) |
the sale is to be on arms' length terms between a willing buyer and a willing seller;
|
(d) |
the Sale Shares are sold free of all Encumbrances;
|
(e) |
the sale is taking place on the date the Valuer were requested to determine the Fair Value; and
|
(f) |
to take account of any other factors that the Valuer reasonably believe should be taken into account.
|
16.6 |
The
"Fair Value"
for any Sale Share will be the value determined by the Valuer.
|
16.7 |
The Shareholders are entitled to make submissions to the Valuer and will provide (or procure that the JVCo provides) the Valuer with such assistance and documents as the Valuer reasonably require for the purpose of reaching a decision, subject to the Valuer agreeing to give such confidentiality undertakings as the Shareholders may reasonably require.
|
16.8 |
To the extent not provided for by this clause 16, the Valuer may, in his reasonable discretion, determine such other procedures to assist with the valuation as they consider Just or appropriate, including (to the extent they consider necessary) instructing professional advisers to assist them in reaching their valuation.
|
16.9 |
The Valuer shall act as expert and not as arbitrator and his written determination shall be final and binding on the Parties (in the absence of manifest error or fraud).
|
16.10 |
The cost of the Fair Value calculation shall be borne by the JVCo.
|
17.1 |
Subject to clause 17.2, this Agreement shall terminate:
|
(a) |
when only one Shareholder holds all the Shares; or
|
(b) |
when a resolution is passed by the Shareholders or creditors, or an order is made by a court or other competent body or person instituting a process that shall lead to the JVCo being wound up and its assets being distributed among the JVCo's creditors, Shareholders or other contributors.
|
17.2 |
On termination of this Agreement, the following clauses shall continue in force: clause 1 (interpretation); this clause; clause 20 (confidentiality); clause 26 (assignment and other dealings); clause 27 (entire agreement); clause 28 (variation and waiver); clause 29 (costs); clause 30 (no partnership or agency); clause 31 (notices); clause 32 (severance); and clause 37 (governing law and jurisdiction).
|
17.3 |
Termination of this Agreement shall not affect any rights, remedies, obligations or liabilities of the Parties that have accrued up to the date of termination, including the right to claim damages in respect of any breach of the agreement which existed at or before the date of termination.
|
17.4 |
If this agreement terminates each Party shall, if requested by the other, procure that the name of the JVCo is changed to avoid confusion with the name of the Party making the request.
|
17.5 |
Where, following an event referred to in clause 17.1(b), the JVCo is to be wound up and its assets distributed, the Parties shall agree a suitable basis for dealing with the interests and assets of the JVCo and shall endeavour to ensure that, before dissolution:
|
(a) |
all existing contracts of the JVCo are performed to the extent that there are sufficient resources;
|
(b) |
the JVCo shall not enter into any new contractual obligations;
|
(c) |
the JVCo's assets are distributed as soon as practical.
|
18.1 |
Provided that the procedures in clauses 13 and 14 have been exhausted, and subject always to clause 13.4, if Top Ships on the one hand, or Gunvor on the other hand (provided in each case, the Shareholder holds not less than 50% of the Shares) (
"Selling Shareholder"
)
wish to transfer all (but not some only) of its Shares (
"Sellers' Shares"
)
(and Shareholder Loans if applicable) to a bona fide purchaser on arm's length terms (
"Proposed Buyer"
)
,
the Selling Shareholder may require the other Shareholder (
"Called Shareholder"
)
to sell and transfer all its shares (
"Called Shares"
)
(and Shareholder Loans if applicable) to the Proposed Buyer (or as the Proposed Buyer directs) in accordance with the provisions of this clause 18 (
"Drag Along Option"
)
.
|
18.2 |
Subject to clause 18.1, the Selling Shareholder may exercise the Drag Along Option at any time after the third anniversary of the Completion Date and shall only be exercised by the Shareholder wishing to exercise its option giving written notice to that effect to the Called Shareholder (
"Drag Along Notice"
)
.
The Drag Along Notice shall specify:
|
(a) |
that the Called Shareholder is required to transfer all its Called Shares (and Shareholder Loans if applicable) pursuant to this clause 18;
|
(b) |
the person to whom the Called Shares (and Shareholder Loans if applicable) are to be transferred;
|
(c) |
the purchase price payable for the Called Shares ("Offer Price") which shall, for each Called Share
be
an amount at least equal to the price per share offered by the Proposed Buyer for the Sellers' Shares;
|
(d) |
the value of any Shareholder Loans outstanding and accrued but unpaid interest; and
|
(e) |
a date, which is no less than five and no more than forty five (45) Business Days after the date of the Drag Along Notice, on which completion is to take place.
|
18.3 |
Where a Drag Along Option is exercised the Selling Shareholder shall, as a condition precedent to the transfer of the Called Shares to the Proposed Buyer, pay or procure the payment of the Shortfall to the Called Shareholder in addition to the Offer Price. For the avoidance of doubt if a Drag Along Option is exercised after the ninth anniversary of Completion the provisions of this Clause shall not apply.
|
18.4 |
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 entered into a definitive agreement to sell the Sellers' Shares to the Proposed Buyer within forty five (45) Business Days of serving the Drag Along Notice. The Selling Shareholders may serve further Drag Along Notices following the lapse of any particular Drag Along Notice.
|
18.5 |
No Drag Along Notice shall require a Called Shareholder to agree to any terms except those specifically set out in this clause 18.
|
18.6 |
The proposed sale of the Sellers' Shares by the Selling Shareholder to the Proposed Buyer is subject to the rights of pre-emption set out in clauses 13 and 14, but the sale of the Called Shares by the Called Shareholder shall not be subject to those provisions.
|
18.7 |
Completion of the exercise of a Drag Along Option shall take place on the date specified in the Drag Along Notice or such later date as agreed by Gunvor, Top Ships and the Proposed Buyer in writing. At completion: (i) the Proposed Buyer shall pay the Offer Price to the Called Shareholders in cash; (ii) the Selling Shareholders shall pay, or procure the payment of, any Shortfall in cash to the Called Shareholders; (iii) the Called Shareholders shall execute and deliver a transfer of the shares to the Proposed Buyer together with the relevant certificate(s) or an indemnity, in a form reasonably satisfactory to the Proposed Buyer, in respect of any lost certificate, together, in either case, with such other evidence (if any) as the Proposed Buyer may reasonably require to prove good title to the Called Shares or enable it to be registered as the holder of the Called Shares; and (iv) assignment of Shareholder Loans as applicable.
|
18.8 |
If
a
Selling Shareholder is entitled to serve a Drag Along Notice pursuant to clause 18 but has not done so it shall notify the other Shareholder of this at least thirty (30) Business Days before completion of the sale of the Sellers' Shares to the Proposed Buyer is due to take place and following receipt of such notice the other Shareholder shall be entitled by notice in writing within five (5) Business Days to require the Selling Shareholder to serve a Drag Along notice in respect of its Shares in which case the terms of clauses 18.2-18.8 shall apply save that (i) if the Proposed Buyer does not wish to buy all of the Shares which become Called Shares because of this clause 18.8 on the terms set out in clauses 18.2-18.8 it shall not be obliged to so and (unless otherwise agreed by the Called Shareholders) in such case the sale of the Sellers' Shares shall not proceed; and (ii) the Called Shareholder shall not be entitled to receive any Shortfall.
|
18.9 |
If, after to the Lock up Period, Top Ships on the one hand, or Gunvor on the other hand (provided in each case, the Shareholder holds not less than 50% of the Shares) (
"Vessel Selling Shareholder"
)
wish to sell the Vessel to a bona fide purchaser on arm's length terms (
"Proposed Vessel Purchaser"
)
,
the Vessel Selling Shareholder may, subject at all times to the provisions of Clause 18.10, require the other Shareholder to agree to the sale of the Vessel to the Proposed Vessel Purchaser by serving written notice on the other Shareholder (
"Vessel Sale Notice"
)
specifying the identity of the Proposed Vessel Purchaser and the principal terms agreed in relation to the sale including but not limited to the purchase price for the Vessel (the
"Vessel Offer Price"
)
.
In the event the Vessel Offer Price is less than the Minimum Valuation then as a condition precedent to the sale of the Vessel to the Proposed Vessel Purchaser, the Selling Shareholder shall pay or procure the payment of the Shortfall to the other Shareholder. For the avoidance of doubt, the payment of any Shortfall shall not apply after the ninth anniversary of Completion.
|
18.10 |
Following service of a Vessel Sale Notice by the Vessel Selling Shareholder, the other Shareholder shall be granted a right of first refusal to purchase the Vessel on the same terms as set out in the Vessel Sale Notice and shall be entitled within 5 Business Days of the date of the Vessel Sale Notice to serve a written notice on the Vessel Selling Shareholder (
"Counter Notice"
)
exercising such right of first refusal following which the other Shareholder shall be obliged to purchase and JVCo shall be obliged to sell the Vessel to the other Shareholder within 45 days of the date of the Counter Notice. If the other Shareholder does not wish to exercise its right of first refusal (or if it does not reply), then the Vessel Selling Shareholder may sell the Vessel to the Proposed Vessel Purchaser on the same terms as are set out in the Vessel Sale Notice.
|
19.1 |
Each Party shall, to the extent that it is able to do so, exercise all its voting rights and other powers in relation to the JVCo to procure that the provisions of this Agreement are
|
19.2 |
If there is an inconsistency between any of the provisions of this Agreement and the provisions of the Articles, the provisions of this agreement shall prevail as between the Parties.
|
19.3 |
The Parties shall, when necessary, exercise their powers of voting and any other rights and powers they have to amend, waive or suspend a conflicting provision in the Articles to the extent necessary to permit the JVCo and its Business to be administered as provided in this Agreement.
|
20.1 |
In this clause
Confidential Information
means any information which:
|
(a) |
a Party may have or acquire at any time in relation to the Business or affairs of JVCo;
|
(b) |
a Party may have or acquire at any time in relation to the business or affairs of another Party or any member of another Party's Group, as a consequence of the negotiations relating to this Agreement or any other agreement or document referred to in this Agreement or the performance of the Agreement or any other agreement or document referred to in this Agreement; or
|
(c) |
relates to the contents of this Agreement (or any agreement or arrangement entered into pursuant to this Agreement).
|
20.2 |
Each Party shall at all times keep confidential (and ensure that its employees, agents, subsidiaries and the employees and agents of such subsidiaries, and JVCo (in respect of information specified in clause 20.1(b) and clause 20.1(c)) shall keep confidential) any Confidential Information and shall not use or disclose any such Confidential Information except to professional advisers subject to the same restrictions as are contained in this clause or as required by law or regulatory authority
1
.
|
21.1 |
Subject to clause 21.2, no Party shall make, or permit any person to make, any public announcement, communication or circular (
"announcement"
)
concerning the existence, subject matter or terms of this agreement, the wider transactions contemplated by it, or the relationship between the Parties, without the prior written consent of the other Parties
|
21.2 |
Where an announcement is required by law or any governmental or regulatory authority (including, without limitation, any relevant securities exchange), or by any court or other authority of competent jurisdiction, the Party required to make the announcement shall promptly notify the other Parties. The Party concerned shall make all reasonable attempts to agree the contents of the announcement before making it.
|
21.3 |
Top Ships and Gunvor shall release an announcement in the agreed form following Completion and Top Ships Inc shall file all agreements as required by the SEC but shall ensure that such filings disclose the minimum information required in order to comply with SEC rules.
|
27.1 |
This Agreement (together with the documents referred to in it) constitute the entire Agreement between the Parties and supersede and extinguish all previous discussions, correspondence, negotiations, drafts, agreements, promises, assurances, warranties, representations, arrangements and understandings between them, whether written or oral, relating to their subject matter.
|
27.2 |
Each Party acknowledges that in entering into this Agreement (and any documents referred to in it), it does not rely on, and shall have no remedies in respect of, any statement, representation, assurance or warranty (whether made innocently or negligently) that is not set out in this Agreement (or those documents).
|
28.1 |
No variation of this Agreement shall be effective unless it is in writing and signed by the Parties (or their authorised representatives).
|
28.2 |
A waiver of any right or remedy under this Agreement or by law is only effective if given in writing and signed by the person waiving such right or remedy. Any such waiver shall apply only to the circumstances for which it is given and shall not be deemed a waiver of any subsequent breach or default.
|
28.3 |
A failure or delay by any person to exercise any right or remedy provided under this Agreement or by law shall not constitute a waiver of that or any other right or remedy, nor shall it prevent or restrict any further exercise of that or any other right or remedy. No single or partial exercise of any right or remedy provided under this Agreement or by law shall prevent or restrict the further exercise of that or any other right or remedy.
|
28.4 |
A person that waives a right or remedy provided under this Agreement or by law in relation to one person, or takes or fails to take any action against that person, does not affect its rights or remedies in relation to any other person.
|
30.1 |
Nothing in this Agreement is intended to, or shall be deemed to, establish any partnership between the Parties or constitute any Party the agent of another Party.
|
30.2 |
Each Party confirms that it is acting on its own behalf and not for the benefit of any other person.
|
31.1 |
A notice given under this Agreement shall be in writing in the English language (or be accompanied by a properly prepared translation into English) and shall be sent: (i) for the attention of Tsirikos Alexandros, at the address on page one of this agreement and at fax number: +30 210 805 6441 and at the e-mail address:
atsirikosantopships.orq
in the case of Top Ships; (ii) for the attention of Gia Mai, cio Gunvor S.A., 80-84 Rue du Rhone, 1204 Geneva, Switzerland, at fax number: +41 22 718 7929 and at the e-mail address
gia.mai@gunvorgroup.com
in the case of Gunvor ; or (iii) in the case of JVCo for the attention of the Company Secretary, at the address on page one of this agreement and at a fax number and e-mail address notified by JVCo to Gunvor and Top Ships from time to time; or (iv) to such other address, fax number or person as the relevant Party may notify to the other Parties.
|
31.2 |
A notice shall be delivered personally; or delivered by commercial courier; or sent by fax; or sent by e-mail; or (if the notice is to be served or given outside the country from which it is sent) sent by reputable international overnight courier.
|
31.3 |
If a notice has been properly sent or delivered in accordance with this clause, it will be deemed to have been received as follows:
|
(a) |
if delivered personally, at the time of delivery; or
|
(b) |
if delivered by commercial courier, at the time of signature of the courier's delivery receipt; or
|
(c) |
if delivered by fax or e-mail, upon confirmed completion of transmission; or
|
(d) |
if deemed receipt under the previous paragraphs of this sub-clause is not within business hours (meaning 9.00 am to 5.30 pm Monday to Friday on a day that is not a public holiday in the place of receipt), when business next starts in the
|
32.1 |
If any provision or part-provision of this Agreement is or becomes invalid, illegal or unenforceable, it shall be deemed modified to the minimum extent necessary to make it valid, legal and enforceable. If such modification is not possible, the relevant provision or part-provision shall be deemed deleted. Any modification to or deletion of a provision or part-provision under this clause shall not affect the validity and enforceability of the rest of this Agreement.
|
32.2 |
If one Party gives notice to the other of the possibility that any provision or part-provision of this Agreement is invalid, illegal or unenforceable, the Parties shall negotiate in good faith to amend such provision so that, as amended, it is legal, valid and enforceable, and, to the greatest extent possible, achieves the intended commercial result of the original provision.
|
34.1 |
This Agreement does not give rise to rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this agreement.
|
34.2 |
The rights of the Parties to rescind or vary this Agreement are not subject to the consent of any other person.
|
37.1 |
This Agreement and any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with it or its subject matter or formation shall be governed by and construed in accordance with the law of England and Wales.
|
37.2 |
Any dispute arising out of or in connection with this Agreement, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration under the LCIA Rules, which Rules are deemed to be incorporated by reference into this clause.
|
37.3 |
The number of arbitrators shall be three with one to be appointed by each of the Parties save in the event of a dispute involving only two Parties in which case each of the two relevant Parties shall appoint one arbitrator, with the third to be appointed by the two others so appointed.
|
37.4 |
The seat, or legal place, of arbitration shall be London, England.
|
37.5 |
The language to be used in the arbitral proceedings shall be English.
|
1.
|
Altering the name of the JVCo
|
|
2.
|
Altering in any respect the Articles or the rights attaching to any of the Shares (except as provided in clause 20.3).
|
|
3.
|
Increase or reduce the amount of JVCo's issued share capital, grant any option or other interest over or in its share capital, redeem or purchase any of its own shares or otherwise alter, or effect any reorganisation of, its share capital.
|
DEADLOCK MATTER
|
4.
|
Declaring, paying or making any dividend or other distribution.
|
|
5.
|
Any determination under clause 10.7 and any determination in excess of the maximum commitment referred to in Clause 10.1
|
DEADLOCK MATTER
|
6.
|
Making any loan (otherwise than by way of deposit with a bank or other institution the normal business of which includes the acceptance of deposits) or granting any credit (other than in the normal course of trading) or giving any guarantee (other than in the normal course of trading) or indemnity
|
DEADLOCK MATTER
|
7.
|
Passing any resolution to wind up JVCo or filing any petition for its winding up or entering into or proposing any arrangement or composition with its creditors.
|
DEADLOCK MATTER
|
8.
|
Applying for an administration order or appointing a receiver or administrator in respect of the JVCo.
|
DEADLOCK MATTER
|
9.
|
Altering the JVCo's registered address.
|
|
10.
|
Deciding on the Directors' entitlement to any remuneration by way of salary, commission, fees or otherwise in relation to the performance of their duties as Directors.
|
|
11.
|
JVCo acquiring or disposing of any undertaking, business, company or securities of a company, or closing down any business operation, in any case having a book or market value greater than USD 250,000 or its equivalent in any other currency (inclusive of VAT).
|
|
12.
|
JVCo entering into any joint venture, partnership, profit sharing agreement, consolidation, merger, amalgamation, collaboration or major project not included in the First Budget or Budget where the expenditure would exceed USD 250,000 or its equivalent in any other currency (inclusive of VAT) per transaction.
|
|
13.
|
Incorporating any subsidiary of JVCo or establishing any new branch, agency, trading establishment, business or outlet not provided for in the First Budget or Budget.
|
|
14.
|
Amalgamating or merging JVCo with any other company or business undertaking.
|
|
15.
|
Any material change to the scope, nature or geographical area of the Business.
|
16.
|
JVCo carrying on any business other than the Business which is not ancillary or incidental to the Business.
|
|
17.
|
Any change to the legal and regulatory status of JVCo.
|
|
18.
|
Any change in the Board structure and size, subject to Clause 10.10 of this Agreement.
|
|
19.
|
Any significant changes to the JVCo's accounting policy or practices.
|
|
20.
|
The appointment or removal of the Company Secretary, Singapore resident director and Singapore commercial manager required as per Singapore legal requirements.
|
DEADLOCK MATTER
|
21.
|
The entering into, amending or terminating any agreement or arrangement, whether formal or informal, other than time charters, vessel management agreements, pooling or commercial management agreements, between JVCo and:
any Shareholder or any of its directors; or
any Affiliate of a Shareholder or any of its directors; or
any Connected Person of a Shareholder
|
|
22.
|
The entering into, amending or terminating any time charters, vessel management agreements, pooling or commercial management agreements between the JVCo and a third party, a Shareholder or any member of a Shareholder's Group.
|
DEADLOCK MATTER
|
23.
|
Applying for the admission to listing or trading on any stock exchange or market of (a) any shares in the capital of the Company or any depository receipts representing shares in the capital of the Company or (b) debt securities issued by the Company
|
|
24.
|
The appointment and removal if the auditors of JVCo.
|
DEADLOCK MATTER
|
25.
|
The adoption of the audited accounts of JVCo.
|
DEADLOCK MATTER
|
26.
|
Accepting a proposal from a Lender pursuant to clause 10.5
|
DEADLOCK MATTER
|
1.
|
Adopting or materially amending the First Budget, any subsequent Budget or any other financial plan of JVCo.
|
DEADLOCK MATTER
|
2.
|
Creating or granting any Encumbrance over the whole or any part of the Business, undertaking, assets or Vessels of the JVCo or over any shares in the JVCo or agreeing to do so.
|
DEADLOCK MATTER
|
3.
|
Save as otherwise set out in this Agreement, incur any borrowings in excess of $1,000,000 in aggregate from time to time or issue any loan capital.
|
DEADLOCK MATTER
|
4.
|
Any borrowings prepayments
|
|
5.
|
The execution of any contract of a long-term onerous or unusual nature or the assumption of any material liability by the JVCo other than in the ordinary course of business of the Company.
|
|
6.
|
The entry into, amendment, termination or waiver under or in respect of any contract or commitment not provided for in the First Budget or any subsequent Budget or any material variation of the same by the JVCo:
a.
with a value in excess of USD 250,000 (exclusive of VAT);
b.
which may incur costs in excess of USD 50,000 per item (exclusive of VAT);
c.
which may not be fulfilled or completed within one year;
d.
which would result in any restriction on the Company carrying on or being engaged in the Business.
|
DEADLOCK MATTER
|
7.
|
Amending the terms of the Shipbuilding Contract, Ship Management Agreement or the Time Charter or waiving any rights of the JVCo thereunder
|
|
8.
|
Any change to the agreed management structure of the JVCo.
|
|
9.
|
JVCo entering into or varying the terms of any transaction, agreement or arrangement (or waiving its rights thereunder) between JVCo and a Shareholder or any of its Affiliates or any of their respective directors
|
|
10.
|
Settling or compromising any legal, arbitration or other proceedings in excess of USD 250,000 or its equivalent in any other currency (other than debt recovery in the ordinary course of business).
|
|
11.
|
Making any agreement with any tax authority or making any claim, disclaimer, surrender, election or consent exceeding USD 250,000 or its equivalent in any other currency for tax purposes in relation to the JVCo or its business.
|
|
12.
|
Granting any rights (by license or otherwise) in or over any intellectual property owned or used by the JVCo.
|
|
13.
|
The granting of any power of attorney or other delegation of powers by any Director or the Board.
|
|
14.
|
In any financial year:
a.
incurring, or entering into any commitment to incur, any capital expenditure or operating expenses which is not in the First Budget or Budget in excess of USD 50,000 per item or with a value in excess of
|
DEADLOCK MATTER
|
USD 250,000 (exclusive of VAT); or
b.
entering into any agreement to sell, transfer, lease, license or in any way dispose of any fixed asset or fixed assets without budgetary or specific approval with a book value in excess USD100,000 or 5% of the book value of JVCo
|
||
15.
|
Any step or action which will or is likely to result in the Vessels changing their flag, or the JVCo becoming resident for tax purposes, or otherwise subject to tax, in any jurisdiction other Singapore or in the JVCo ceasing to be resident for tax purposes in Singapore as a consequence of the application of clause 22.
|
DEADLOCK MATTER
|
16.
|
The making of any claim, surrender, election or consent for tax purposes
|
|
17.
|
Any action which may result in the JVCo being grouped for VAT purposes with any other Entity.
|
|
18.
|
Subject to the provisions of clause 18.9, the sale, transfer, lease, license or disposal in any way of the whole or a substantial part of Its business undertaking or assets of the JVCo, including but not limited to the Vessel (whether by a single transaction or a series of transactions).
|
|
19.
|
The acquisition or disposal in one transaction or in a series of related transactions of any freehold, leasehold property or fixed assets in excess of USD 250,000 or its equivalent in any other currency.
|
|
20.
|
The hiring, appointment, dismissal, remuneration and benefits (including bonuses) of any employees of the JVCo having a yearly total remuneration above USD 50,000 or its equivalent in any other currency, as well as any increase in the total remuneration or benefits of any employees in excess of 5%. For the needs of this Agreement, total remuneration shall mean basic salary, bonus, housing allowance, transport allowance, feeding allowance, dressing allowance, entertainment, medical allowance, utility, furniture grant, leave allowance or any other similar allowances.
|
|
21.
|
Entering into any service agreement with any or the variation of the terms thereof
|
|
22.
|
Any matter in which a Director is interested or where he has, or may have, a conflict of interest with the JVCo save as otherwise set out in this Agreement.
|
|
23.
|
The opening or closing of any Company's bank accounts and granting or removing authority to operate the Company's bank accounts.
|
DEADLOCK MATTER
|
24.
|
The factoring or assignment of any Company's debts.
|
All figues in USD
|
2017
|
2018
|
|||||||
PRE-DELIVERY PAYMENTS
|
August
|
September
|
October
|
November
|
December
|
January
|
February
|
March
|
April
|
Hyundai Instalment S443
|
1,495,000
|
1,495,000
|
2,990,000
|
||||||
Supervision cost
2
|
35,714
|
35,714
|
35,714
|
35,714
|
35,714
|
35,714
|
|||
Management Fees
|
28,500
|
29,450
|
29,450
|
||||||
Pre-delivery expenses (estimate incl. 20k excess of Singapore tonnage tax registration)
|
100,000
|
220,000
|
500,000
|
||||||
Working Capital
|
162,000
|
||||||||
Total 443
|
35,714
|
1,530,714
|
35,714
|
1,659,214
|
3,275,164
|
727,164
|
BUDGET FOR THE FIRST
11
MONTHS OF VESSEL'S OPERATION — 1 Feb 2018 - 31 Dec 2018
|
S443
|
Time Charter revenues
|
4,709,400
|
Less Brokerage Commissions
|
-117,735
|
OPEX budget as per management agreement
|
-1,826,980
|
Management Fees
|
-301,698
|
Singapore Annual corporate costs (estimate)
|
5,000
|
Accounting and Audit (estimate)
|
-25,000
|
Net cash flow before servicing of finance
|
2,432,987
|
Feb 2018 - Apr 2018
|
900
|
May 2018 - November 2018
|
900
|
November 2018 - December 2018
|
918
|
Signed by Alexandros Tsirikos
|
||
for and on behalf of
LYNDON
|
/s/ Alexandros Tsirikos
|
|
INTERNATIONAL CO.
|
Attorney-in-fact
|
|
Signed by Shahb Richyal
|
||
for and on behalf of
JUST-C
|
/s/ Shahb Richyal
|
|
LIMITED
|
Authorized Signatory
|
|
Signed by Andreas Louka
|
||
for and on behalf of
|
/s/ Andreas Louka
|
|
CITY OF ATHENS PTE. LTD
|
Director
|
|
Contents
|
||
Clause
|
Page
|
|
Parties
|
3
|
|
BACKGROUND
|
3
|
|
1.
|
Interpretation
|
3
|
2.
|
Business of the JVCo
|
11
|
3.
|
Completion
|
11
|
4.
|
Matters requiring consent of Shareholders and quorum for general meetings
|
12
|
5.
|
Compliance with ESG principles
|
13
|
6.
|
Dividends
|
15
|
7.
|
Directors and management
|
16
|
8.
|
Budget
|
17
|
9.
|
Accounting and Reporting
|
18
|
10.
|
Finance for the JVCo
|
19
|
11.
|
Deadlock
|
22
|
12.
|
Resolution of deadlock
|
23
|
13.
|
Transfer of shares
|
24
|
14.
|
Right of First Refusal
|
25
|
15.
|
Compulsory Transfers
|
25
|
16.
|
Valuation (only applicable to compulsory transfers)
|
27
|
17.
|
Termination and liquidation
|
28
|
18.
|
Drag Along
|
29
|
19.
|
Status of agreement
|
31
|
20.
|
Confidentiality
|
32
|
21.
|
Announcements
|
32
|
22.
|
Reflagging And Redomiciliation
|
33
|
23.
|
Further assurance
|
33
|
24.
|
Indemnity
|
34
|
25.
|
Disputes in relation to the Ship Management Agreement and Time Charter
|
34
|
26.
|
Assignment and other dealings
|
35
|
27.
|
Entire agreement
|
35
|
28.
|
Variation and waiver
|
35
|
29.
|
Costs
|
36
|
30.
|
No partnership or agency
|
36
|
31.
|
Notices
|
36
|
32.
|
Severance
|
37
|
33.
|
Agreement survives Completion
|
37
|
34.
|
Third party rights
|
37
|
35.
|
Rights and remedies
|
37
|
36.
|
Inadequacy of damages
|
37
|
37.
|
Governing law and jurisdiction
|
38
|
Schedule 1. Reserved matters for shareholder approval
|
39
|
|
Schedule 2. Board Reserved Matters
|
41
|
|
Schedule 3. Pre Delivery Costs Schedule
|
43
|
|
Schedule 4. First Budget
|
44
|
(1) |
Gramos Shipping Company Inc
.,
a 100% subsidiary of Top Ships Inc., incorporated and registered in the Republic of the Marshall Islands with registered office at Trust Company Complex, Ajeltake Road, Ajeltake island, Majuro, Marshall Islands, MH96960 (
Top Ships
);
|
(2) |
Just-C Limited
,
a 100% subsidiary of Gunvor Group Ltd, incorporated and registered in the Republic of Cyprus with registered office at 48 Themistocles Dervis Street, Athienitis Centennial Building, Office 501, 1066, Nicosia, Cyprus (
Gunvor
);
and
|
(3) |
Eco Nine Pte
.
Ltd
,
incorporated and registered in the Republic of Singapore, with registered office in 8 Cross Street, #10-00 PwC Building, Singapore 048424 (
JVCo
)
|
(A) |
The JVCo has been established to acquire, own, maintain and dispose of the Vessel (as defined below).
|
(B) |
The Shareholders intend to regulate the relationship between them and to ensure that the conduct and operation of the Business (as defined below) is effected on the terms and subject to the conditions of this Agreement.
|
1. |
Interpretation
|
(a) |
the Relevant Person's spouse or civil partner;
|
(b) |
any other person (whether of a different sex or the same sex) with whom the Relevant Person lives as partner in an enduring family relationship;
|
(c) |
the Relevant Person's children or step-children;
|
(d) |
any children or step-children of a person within paragraph (b) (and who are not children or step-children of the Relevant Person) who live with the Relevant Person and have not attained the age of 18;
|
(e) |
the Relevant Person's parents;
|
(f) |
any body corporate;
|
i. |
where the Relevant Person is interested in shares comprised in the equity share capital of that body corporate of a nominal value equal to at least 20% of that share capital; or
|
ii. |
in relation to which the Relevant Person is entitled to exercise or control the exercise of more than 20% of the voting power at any general meeting of that body corporate;
|
(g) |
a person acting in his capacity as trustee of a trust:
|
i. |
the beneficiaries of which include the Relevant Person or a person who by virtue of the other paragraphs of this definition is a Connected Person of the Relevant Person, or
|
ii. |
the terms of which confer a power on the trustees that may be exercised for the benefit of the Relevant Person or Connected Person of the Relevant Person,
|
iii. |
other than a trust for the purposes of an employees' share scheme or a pension scheme;
|
(h) |
a person acting in his capacity as partner
|
i. |
of the Relevant Person; or
|
ii. |
of a person who is a Connected Person of the Relevant Person; or
|
i. |
the Relevant Person is a partner;
|
ii. |
a partner is a Connected Person of the Relevant Person; or
|
iii. |
a partner is a firm in which the director is a partner or in which there is a partner who is a Connected Person of the Relevant Person.
|
(A) |
cast, or control the casting of, more than 50 per cent of the maximum number of votes that might be cast at a Shareholders meeting of the ultimate parent company of the relevant entity;
|
(B) |
appoint or remove all, or the majority, of the directors or other equivalent officers of the ultimate parent company of the relevant entity; or
|
(C) |
otherwise secure that the affairs of the relevant entity are conducted in accordance with its wishes
|
i. |
Any supra-national, national, state, municipal or local government;
|
ii. |
an instrumentality, board, commission, court or agency, whether civilian or military, of one of the above, however constituted;
|
ii. |
a government-owned or government-controlled association and/or non-commercial organisation; or
|
iv. |
a public organisation, being an organisation whose members are:
|
a. |
countries or territories;
|
b. |
governments of countries or territories; and/or
|
c. |
other public international organisations and includes, without limitation, the World Bank, the United Nations, the International Monetary Fund and the OECD.
|
(a) |
for the purposes of Clauses 18.1 to 18.8, by reference to the date of service of the Drag Along Notice; and
|
(b) |
for the purposes of Clause 18.9, by reference to the date of service of the Vessel Sale Notice,
|
a) |
In the case of JVCo or a member of its Group or any of its Agents; or
|
b) |
In the case of a Shareholder or a member of its Group or any other respective Agents, in each case, in relation to their respective affairs,
|
i. |
would violate any applicable Anti-Bribery Laws or Sanctions;
|
ii. |
was intended to influence any person to act or reward any person for acting in breach of an expectation of good faith, impartiality or trust for which it would otherwise be forbidden by Anti-Bribery Laws for the recipient to accept; or
|
iii. |
was made to, or for, a Public Official with the intention of influencing them and obtaining or retaining an advantage in the conduct of business.
|
a) |
an employee, officer or representative of, or any person otherwise acting in an official capacity for or on behalf of, a Governmental Authority;
|
b) |
a person holding a legislative, administrative or judicial position of any kind, regardless of whether elected or appointed, at a Governmental Authority;
|
c) |
an officer of, or individual who holds a position in, a political party;
|
d) |
a publicly declared candidate for political office;
|
e) |
an individual who holds any other official, ceremonial or other appointed or inherited position with a Governmental Authority; or
|
f) |
who exercises a public function for or on behalf of a country or territory or for any public agency or public enterprise of that country or territory.
|
a) |
United Nations Sanctions imposed pursuant to any United Nations Security Council Resolution;
|
b) |
U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of Treasury;
|
c) |
EU restrictive measures implemented pursuant to any EU Council or Commission Regulation or Decision adopted pursuant to a Common Position in furtherance of the EU's Common Foreign and Security Policy; and
|
d) |
Any other applicable sanctions or export control laws and regulations
|
(a) |
for the purposes of Clauses 18.1 to 18.8 means the amount (if any) by which the Offer Price would have had to be increased if the price per share offered by the Proposed Purchaser for the Sellers' Shares had been calculated on the basis of the Minimum Valuation net of the liabilities of JVCo (including but not limited to any Shareholder Loans and bank loans); and
|
(b) |
for the purposes of Clause 18.9. means, the amount (if any) that the Vessel Offer Price is less than the Minimum Valuation.
|
1.2 |
The
Schedules
form part of this agreement and shall have effect as if set out in full in the body of this agreement. Any reference to this agreement includes the Schedules.
|
1.3 |
A reference to
this
"
agreement
"
or this
"
Agreement
"
or to any
other agreement or document referred to in this agreement
is a reference to this agreement or such other agreement or document as varied or novated in accordance with its terms from time to time.
|
1.4 |
Unless the context otherwise requires, words in the
singular
shall include the
plural
and in the plural shall include the singular.
|
1.5 |
A
person
includes a natural person, corporate or unincorporated body (whether or not having separate legal personality).
|
1.6 |
A reference to a
Party
shall include that Party's successors and permitted assigns.
|
1.7 |
A reference to
writing
or
written
includes faxes and emails.
|
1.8 |
Where the words
Including
or
includes
are used in this agreement, they are deemed to have the words "
without limitation
"
following them.
|
1.9 |
Where the context permits,
other
and
otherwise
are illustrative and shall not limit the sense of the words preceding them.
|
1.10 |
References to a document in
agreed form
are to that document in the form agreed by the Parties on or before the execution of this Agreement and signed or initialled by them or on their behalf for identification.
|
1.11 |
"$" or "
USD
"
denotes the lawful currency of the United States of America.
|
1.12 |
Any obligation on a Party not to do something includes an obligation not to allow that thing to be done.
|
2. |
Business of the JVCo
|
2.1 |
Each Party shall use its reasonable endeavours to promote and develop the Business to the best advantage of the JVCo.
|
2.2 |
Unless agreed otherwise by the Parties:
|
(a) |
Pending Delivery, Vessel construction supervision shall be carried out by Central Shipping Monaco SAM;
|
(b) |
Upon Delivery, JVCo shall time charter the Vessel to Clearlake on the terms of the Time Charter;
|
(c) |
Upon Delivery, management of the Vessel shall be carried out by Central Shipping Monaco SAM on the terms of the Ship Management Agreement (the date of commencement of which will be 3 months prior to Delivery); and
|
(d) |
Following the termination or expiry of the Time Charter, the JVCo's commercial strategy shall be a Board Reserved Matter.
|
2.3 |
The Parties shall act in good faith in relation to this agreement and shall exercise their respective rights and powers to ensure, so far as they lawfully can, that the JVCo complies with its obligations under this agreement and any other agreements to which the JVCo is a party, and that the Business is conducted in accordance with Good Industry Practice and on sound commercial and profit-making principles and in compliance with all Applicable Laws and the ESG Principles.
|
2.4 |
Top Ships shall procure that Central Shipping Monaco SAM (or such other manager as may be appointed by the Parties from time to time) (
Manager
)
shall supervise the construction of the Vessel under the Shipbuilding Contract with a view to ensuring that the Vessel when delivered complies with the same and Top Ships undertakes to ensure for so long as Central Shipping Monaco SAM supervises the construction of the vessel that (í) it shall at all times act in accordance with first class supervision practice; and (ii) Gunvor is provided with monthly reports on the progress of the construction of the Vessel in such form and containing such information as Gunvor shall reasonably require.
|
3. |
Completion
|
3.1 |
Completion shall take place on the date this agreement is signed by the Parties hereto.
|
3.2 |
At Completion, the Parties shalt procure that such shareholder and board meetings of the JVCo and of its subsidiary Eco Nine Inc. are held as may be necessary to:
|
(a) |
adopt the Articles;
|
(b) |
appoint Jan Andersen and Anbarasan Ramasamy as Gunvor Directors and to the extent not already effected appoint Alexandros Tsirikos and Andreas Louka as Top Ships directors so that there shall be a total of four (4) directors;
|
(c) |
adopt the First Budget; and
|
(d) |
ensure that the board of directors of the JVCo subsidiary Eco Nine Inc. shall consist of a sole director, whose appointment and terms of reference shall be a Board Reserved Matter but who shall at all times only act in accordance with instructions from the Board in respect of any actions or decisions to be taken by or matters to be addressed by Eco Nine Inc. (including but not limited to any actions or decisions to be taken or matters to be addressed in respect of the Shipbuilding Contract).
|
4. |
Matters requiring consent of Shareholders and quorum for general meetings
|
4.1 |
Subject to clause 10.11, each Party shall procure that the JVCo and its subsidiary Eco Nine Inc. shall not, without the prior written approval of all Shareholders, carry out any of the Reserved Matters (and for the avoidance of doubt where any matter would be a Reserved Matter or Board Reserved Matter in relation to the JVCo the equivalent matter in respect of the subsidiary Eco Nine Inc. shall also be a Reserved Matter or a Board Reserved Matter).
|
4.2 |
The Board may convene a general meeting of the JVCo at any time. Such a general meeting shall be held at the JCVo's registered office or at such other places as all the Shareholders entitled to receive notice of and attend and vote at such a meeting, may determine.
|
4.3 |
At least twenty one (21) Business Days' notice of a general meeting shall be given to each Shareholder, unless the Shareholders approve in writing of a shorter period. Such notice shall be accompanied by an agenda identifying in reasonable detail the matters to be discussed at the meeting together with copies of any relevant papers to be discussed at the meeting.
|
4.4 |
Subject to clause 4.5, the quorum at any general meeting of the JVCo, or adjourned general meeting, shall be seventy five per cent (75%) of the issued Shares of the JVCo present when the relevant business is transacted. A person may participate in a meeting by telephone or other means whereby such person may at the same time hear and be heard by everybody else present; and persons who participate in this way shall be considered present at the meeting. If a quorum is not present within thirty (30) minutes of the time when the meeting should have begun or if during the meeting there is no longer a quorum, the meeting shall be adjourned to and reconvened to the same time and place
|
4.5 |
The quorum at any general meeting of the JVCo, where a Reserved Matter will be discussed, shall be one hundred per cent (100%) of the issued Shares of the JVCo.
|
4.6 |
No business shall be transacted by any general meeting unless a quorum is present at the commencement of the meeting and also when that business is voted on.
|
4.7 |
Subject to Clause 10.11, a resolution at a general meeting is passed if more votes are cast for it than against it.
|
4.8 |
At a general meeting, every Shareholder present in person (or by proxy) shall have one vote for each Share it holds (or is proxy for); and on a vote on a written members' resolution each Shareholder has one vote for each Share it holds, subject to applicable law. Any chairman of a general meeting shall not in any circumstances be entitled to a casting vote.
|
4.9 |
Notwithstanding any other provision of this Agreement, a Shareholder's written resolution is adopted when each of the Shareholders (or their representatives) has signed one or more copies of it. Once a Shareholder's written resolution has been adopted, it shall be treated as if it had been a decision taken at a general meeting in accordance with this Agreement.
|
5. |
Compliance with ESG principles
|
5.1 |
Each Shareholder shall in respect of matters relating to JVCo, JVCo's subsidiary Eco Nine Inc. and the Business:
|
(a) |
Comply with applicable Anti-Bribery Laws and Sanctions;
|
(b) |
Not take any action, and use its respective reasonable endeavours to procure that none of its respective Affiliates nor any of its or their respective Agents take any action, directly or indirectly, which would (or would reasonably be expected to) cause JVCo or the other Shareholder to be prosecuted and found guilty of, or rendered liable for, any violation of any applicable Anti-Bribery Laws or Sanctions; and
|
(c) |
use reasonable endeavours to procure that none of the Agents of it or its Affiliates take any action, directly or indirectly, which would (or would reasonably be expected to) cause JVCo or the other Shareholder to be prosecuted and found guilty of, or rendered liable for, any violation of any applicable Anti-Bribery Laws or Sanctions.
|
5.2 |
A Shareholder or JVCo shall promptly inform the Board if it becomes aware of any breach of any of the obligations referred to in clause 5.1 by it, any of its Affiliates or any of its or their respective Agents.
|
5.3 |
JVCo shall and shall procure (to the extent it is able), that its Agents shall:
|
(a) |
at all times comply with applicable ESG Principles and shall not undertake or cause to be undertaken any Prohibited Act;
|
(b) |
not request any action, inaction or services by any third party that would violate any ESG Principles or cause that third party to undertake or cause to be undertaken any Prohibited Act;
|
(c) |
not use any external Entity, representative or consultant unless the external Entity, representative or consultant has been subject to reasonable due diligence to ensure that it has a good business reputation and conducts its business in an ethical fashion and in compliance with the ESG Principles;
|
(d) |
not take any action, directly or indirectly, which would (or would reasonably be expected to) cause the JVCo or the other Shareholder to be prosecuted and found guilty of, or rendered liable for, any violation of any applicable Anti-Bribery Laws or Sanctions.
|
5.4 |
JVCo shall and shall procure that Eco Nine Inc. use reasonable endeavours to procure that none of their Agents take any action, directly or indirectly, which would (or would reasonably be expected to) cause any such company or Entity or the other Shareholder to be prosecuted and found guilty of, or rendered liable for, any violation of any Anti-Bribery Laws or Sanctions.
|
5.5 |
The obligation to use reasonable endeavours in respect of Agents referred to in clauses 5.1 and 5.4 shall include an obligation to inform each Agent of the obligations which apply to them pursuant to this Agreement.
|
5.6 |
The JV Co hereby undertakes to the Shareholders that it shall, within 45 Business Days following the end of each financial year, produce an ESG Principles Compliance Report, in respect of the JVCo and Eco Nine Inc. for such financial year and present this to the Shareholders. The format and contents of this report will be agreed by the Board by the first financial year end.
|
5.7 |
The JV Co shall not and shall procure that Eco Nine Inc. does not:
|
(a) |
engage in or carry on any transactions, business or trade or enter into any contract or association with or involving, directly or indirectly, countries, territories, governments, entities, individuals and/or other persons that are the
|
(b) |
engage in any activity that would reasonably be expected to cause it to become the target of Sanctions.
|
5.8 |
The JV Co shall and shall procure that Eco Nine Inc. make and keep books, records and accounts, which accurately and fairly reflect its transactions, acquisitions and dispositions of goods, services and assets, and shall keep such books, records and accounts for a period of at least seven years following their creation.
|
5.9 |
Each Shareholder shall be entitled (at its cost) to have access to and to inspect all invoices and accompanying documents issued by, and the books and records of the JVCo and Eco Nine Inc. in order to verify compliance with this clause 5 provided this right shall be exercised in a manner and at times which shall minimise any disruption to the Business (and may not be exercised at any time that would coincide with a year-end or quarter-end). The JVCo and Eco Nine Inc. shall co-operate fully and promptly with any such audit or inspection.
|
5.10 |
Each Shareholder and the JVCo shall co-operate with any compliance audit or investigation and provide all information and assistance properly requested upon an investigation or inquiry by a Governmental Authority directed to any of them in respect of JVCo and its Business. Any additional costs incurred by each Shareholder in complying with this clause shall be borne by such Shareholder.
|
5.11 |
JV Co shall ensure that no Public Official will be hired or engaged as a consultant in any capacity by them or the JVCo or Eco Nine Inc.
|
5.12 |
Each Shareholder shall not and shall use reasonable endeavours to procure that its shareholders, directors, or employees or any of its Affiliates will not act in contravention of the OECD Convention, the OECD Guidelines or UNCAC or offer, give or promise any payment or any undue pecuniary or other advantage directly or indirectly to, any employee, officer, official, or representative of any government or to any foreign public official (as defined in the OECD Convention) or to any political party or candidate for political office.
|
6. |
Dividends
|
7. |
Directors and management
|
7.1 |
The Board has responsibility for the supervision and management of the JVCo and its Business, subject to clause 4.
|
7.2 |
Subject to clause 10.10, there shall be four (4) directors on the Board made up of two (2) Top Ships Directors and two (2) Gunvor Directors.
|
7.3 |
Gunvor may appoint a Gunvor Director, and remove a Gunvor Director whom it has appointed, by giving notice in writing to JVCo and Top Ships. Top Ships may appoint a Top Ships Director, and remove a Top Ships Director whom it has appointed, by giving notice in writing to JVCo and Gunvor. The appointment or removal takes effect on the date on which the notice is received by JVCo or, if a later date is given in the notice, on that date.
|
7.4 |
The Shareholder removing a Director shall indemnify and keep indemnified the JVCo against any claim connected with the Director's removal from office.
|
7.5 |
The Parties intend there to be a meeting of Directors at least once every three (3) months. Participation in such meetings by telephone or other similar methods whereby such the participating person may at the same time hear and be heard by everybody else present at the meeting will be permitted and persons who participate in this way shall be considered present at the meeting.
|
7.6 |
The Parties shall ensure that at least ten (10) Business Days' notice of a meeting of Directors is given to all Directors entitled to receive notice accompanied by an agenda specifying in reasonable detail the matters to be raised.
|
7.7 |
A shorter period of notice of a meeting of Directors may be given if at least one (1) Top Ships Director and one (1) Gunvor Director agree in writing except as to where a Board Reserved Matter is to be discussed, where all Directors should consent to such a shorter period of notice.
|
7.8 |
The quorum at a meeting of Directors at which there are to be discussed any Board Reserved Matter (including adjourned meetings) is all of the Directors at the time of the meeting.
|
7.9 |
The quorum at any other meeting of Directors (including adjourned meetings) is one (1) Top Ships Director and one (1) Gunvor Director.
|
7.10 |
No business shall be conducted at any meeting of Directors unless a quorum is present at the beginning of the meeting and at the time when there is to be voting on any business.
|
7.11 |
The Shareholders shall procure that all Board meetings (including adjourned meetings) are quorate. However, if for any reason a quorum is not present within thirty (30) minutes of the time specified for a Directors' meeting in the notice of the meeting or if during the meeting there is no longer a quorum, then it shall be adjourned for same time and place on the Business Day falling five (5) Business Days immediately after the proposed date of the meeting, unless all the Directors entitled to receive notice of and attend and vote at such a meeting, agree in writing on another period.
|
7.12 |
A meeting of Directors shall be adjourned to another time or date (5 Business Days later) at the request of all the Top Ships Directors or all the Gunvor Directors present at the meeting. No business may be conducted at a meeting after such a request has been made. No more than one such adjournment may be made in respect of a meeting.
|
7.13 |
Except for Board Reserved Matters, a board resolution is passed if more votes are cast
for it than against it.
|
7.14 |
in the case of Board Reserved Matters, a resolution is only passed if all of the Directors
have voted in favour of it.
|
7.15 |
For the avoidance of doubt any chairman of a Meeting of the Board shall not in any
circumstances be entitled to a casting vote.
|
7.16 |
Notwithstanding any other provision of this Agreement, a Directors' written resolution is adopted when each of the Directors has signed one or more copies of It. Once a Directors' written resolution is adopted it shall be treated as if it had been a decision taken at a meeting of the Board in accordance with this Agreement.
|
7.17 |
Unless otherwise agreed by the Shareholders, no Director shall be entitled to receive any remuneration by way of salary, commission, fees or otherwise in relation to the performance of their duties as a Director from JVCo.
|
8. |
Budget
|
8.1 |
The Budget is an annual budget for the Vessel which shall include the budget for the purposes of the Ship Management Agreement and all finance, capital expenses and operating costs plus all other non-Vessel related costs of the JVCo (included but not limited to the corporate costs) and which shall be prepared by the Manager. The First Budget shall also include a working capital reserve of one (1) month's operating expenses.
|
8.2 |
The Budget for the period from the date of Delivery until 31
st
December of that year is set out in Schedule 4 and shall be adopted by the Parties at Completion (
First Budget
).
|
8.3 |
Budgets other than the First Budget shall be:
|
(a) |
prepared by the Board at least sixty (60) days before each calendar year; and
|
(b) |
considered, and if thought fit, adopted and approved unanimously by the Board.
|
9. |
Accounting and Reporting
|
9.1 |
Accounting Principles The JVCo shall prepare its financial statements under US GAAP and procure that these are converted into, reviewed and audited in accordance with IFRS. The Shareholders shall use all reasonable endeavours to ensure that the JVCo meets any Shareholder's reasonable requirements in relation to their own respective audits.
|
9.2 |
Reporting to the Shareholders
|
9.2.1. |
The JVCo shall supply the Shareholders on an equal and timely basis with:
|
(a) |
quarterly management accounts for the JVCo in respect of each quarter within thirty (30) days of the end of such quarter, on a best effort basis, but in no case later than forty five (45) days of the end of such quarter, such accounts to include:
a balance sheet, profit and loss account and cashflow statement per US GAAP;
|
i. |
a cashflow forecast for the next three months;
|
ii. |
a capital expenditure statement;
|
iii. |
Information on operating and capital expenses incurred during the quarter that were not included in the approved Budget.
|
iv. |
such additional information as the Shareholders shall agree from time to time,
|
(b) |
draft annual accounts for the JVCo both under US GAAP and IFRS in a form substantially approved by the Auditors, no later than ninety (90) days after the end of the financial year to which they relate and in any event no later than is necessary to allow compliance with Singapore law filing requirements;
|
(c) |
annual audited accounts under IFRS of JVCo by no later than 30th of April in each year; and
|
(d) |
a report on a quarterly basis (unless the Parties agree another frequency) of its compliance with the principles of the Gunvor Health, Safety, Environmental and Communities Governance Framework the content of which is to be agreed by the Board; and
|
(e) |
monthly information in relation to the cash inflows and outflows of the relevant JVCo earnings account.
|
9.3 |
Access to information
|
9.3.1 |
Subject to clause 20, each Shareholder and its authorised representatives shall be allowed access at all reasonable times to examine (and at its expense to take copies of) the books and records of the JVCo and its subsidiary, Eco Nine Inc.
|
9.3.2. |
Each Shareholder reserves the right to undertake an audit (financial and/or health, safety environmental and communities governance and/or operational risks-related) of the JVCo and / or Eco Nine Inc. at its own cost, either by its own internal audit staff or by external advisers. Such Shareholder shall give the JVCo at least two weeks written notice of its intention to carry out such an audit. The JVCo and Eco Nine Inc. shall co-operate fully and promptly with any such audit or inspection and take into account any recommendations arising from any assessments to be conducted by a Shareholder and implement any remediation requirements.
|
10. |
Finance for the JVCo
|
10.1 |
The maximum amount each Shareholder is severally committed to contribute to the JVCo during the pre-delivery period shall be such amounts in the Respective Proportions as are necessary to fund the pre-Delivery costs of the JVCo in accordance with the Pre-Delivery Costs Schedule.
|
10.2 |
Following the adoption of the First Budget and any subsequent Budget by the Board, the Parties shall contribute to the JVCo in their Respective Proportions and at the times specified therein the amounts required by the Budget at the times requested by the Board, and within five (5) Business Days of such request.
|
10.3 |
The Parties agree that, if JVCo requires finance in addition to the Budget, and provided that there are insufficient funds in the earnings account, the JVCo shall be financed, so far as practicable, from an external funding source or sources (parties providing external finance being a "Lender") and on terms to be agreed between the Board, the Parties and any relevant third Parties.
|
10.4 |
With regard to clause 10.3 above, the Parties shall seek the required externally sourced finance on the best possible terms available at the time and for a transaction of this type, having in mind:
|
(a) |
Interest rate being offered;
|
(b) |
the fees and other costs which would apply;
|
(c) |
the repayment terms;
|
(d) |
the percentage of the Fair Market Value of the Vessel that would be advanced and the related loan to value covenant required;
|
(e) |
the terms of security required by any Lender (it being understood that industry standard terms may require the grant of a first priority mortgage over the Vessel and collateral deed of covenants (if applicable) and an assignment of the Vessel's earning and insurances and on the basis that no parent guarantees shall be provided as part of the security to the Lender); and
|
(f) |
the need for the terms of the loan to accommodate the objectives set out in this Agreement.
|
10.5 |
For the avoidance of doubt, the final decision as to whether to accept a proposal from a Lender shall constitute a Reserved Matter.
|
10.6 |
In the event any Shareholder (
Party A
)
is required to make any payment to any Lender in connection with any form of guarantee issued in favour of such Lender in respect of any lending facility to the JVCo (provided in accordance with this Agreement), the other Shareholder (
Indemnifying Party
)
shall, subject to payment or due demand of the relevant sum having been properly evidenced to the Indemnifying Party, indemnify and keep Party A indemnified in respect of their Respective Proportion of any sum paid or duly demanded to be paid by Party A from time to time under the terms of such guarantee with the intention that each of the Shareholder bears its Respective Proportion of such liability. This indemnity shall not prejudice or replace any right of subrogation that may exist against the JVCo.
|
10.7 |
If the Board resolves at any time that JVCo requires further finance in addition to funds available in the earnings account and any financing it has taken out pursuant to clause 10.3 (
Additional Funding
),
the Board shall issue a written notice to each Party (
Funding Notice
)
setting out the amount of the Additional Funding required and the reasons for such Additional Funding. For the avoidance of doubt the Board shall not issue a Funding Notice until such time as all efforts to raise additional funding from external sources have been exhausted.
|
10.8 |
Within five (5) Business Days of receiving the Funding Notice, the Parties shall use their reasonable endeavours to determine whether the Additional Funding should be provided and, if so, whether it shall be provided by means of:
|
(a) |
loans from the Shareholders in their Respective Proportions;
|
(b) |
a subscription for further Shares in the JVCo by the Shareholder in their Respective Proportions;
|
(c) |
a mixture of (a) and (b); or
|
(d) |
by any other means.
|
10.9 |
If any Shareholder fails to contribute such sum as is required to the JVCo in its Respective Proportion pursuant to clause 10.8 (
Non-Paying Shareholder
)
within the timescale provided then, the other Shareholder (
Paying Shareholder
)
shall be entitled, but not bound, within a further 30 days to either:
|
(a) |
where the contribution is to be made in return for a subscription for further shares, subscribe for the Non-Paying Shareholder's Respective Proportion of the Shares; or
|
(b) |
advance an amount equal to the Non-Paying Shareholder's contribution by way of a loan to the JVCo, such loan to be on an arm's length basis; or
|
(c) |
upon the expiry of such thirty (30) day period, exercise its right as Paying Shareholder under clause 15.
|
10.10 |
If as a result of the application of clause 10.9 (a) and/or 10.9 (c), either Top Ships on the one hand or Gunvor on the other hand hold:
|
(a) |
less than 20% of the total number of Shares, such Shareholder shall not be entitled to nominate any Director to the Board and shall procure that both its existing Directors resign;
|
(b) |
20% or more but less than 50% of the total number of Shares, such Shareholder shall be entitled to nominate for appointment up to one (1) Director to the Board and shall procure that one (1) of its existing Directors resign;
|
(c) |
50% or more but less than 51% of the total number of Shares, such Shareholder shall be entitled to nominate for appointment up to two (2) Directors to the Board;
|
(d) |
51% or more but less than 79.99% of the total number of Shares, such Shareholder shall be entitled to nominate for appointment up to three (3) Directors to the Board;
|
(e) |
80% or more of the total number of Shares, such Shareholder shall be entitled to nominate for appointment up to four (4) Directors to the Board,
|
10.11 |
If following the application of clause 10.9 (a) and/or 10.9 (c) Top Ships on the one hand, or Gunvor on the other hand own 80% or more of the Shares, Reserved Matters shall be passed if approved by holders representing 80% or more of the Shares.
|
11. |
Deadlock
|
11.1 |
There is a deadlock if a resolution in respect of any Reserved Matters or Board Reserved Matters is proposed and one of the following applies:
|
(a) |
the Board has not passed a resolution or approved a written resolution relating to a Board Reserved Matter which has been put to it in accordance with this Agreement or the Articles, either because the requisite majority has not voted in favour of it or because two or more consecutive Board meetings have been dissolved for lack of a quorum; or
|
(b) |
the Shareholders has not passed a resolution or approved a written resolution relating to a Reserved Matter which has been put to it in accordance with this Agreement or the Articles, either because the requisite majority has not voted in favour of it or because two or more consecutive Board meetings have been dissolved for lack of a quorum.
|
11.2 |
Either Gunvor or Top Ships may within five (5) Business Days of the meeting at which the deadlock arises serve notice on the other Shareholder (
Deadlock Notice
)
stating that in its opinion a deadlock has occurred and identifying the matter giving rise to the deadlock.
|
11.3 |
On the date of service of the Deadlock Notice, Gunvor and Top Ships shall each refer the Reserved Matter or Board Reserved Matter giving rise to the deadlock to their respective Chief Executive Officers of Top Ships Inc. and Gunvor Group Ltd for resolution. The Parties shall use all reasonable endeavours in good faith to resolve the dispute within fourteen (14) days in a way that is in the best interests of the JVCo.
|
11.4 |
For the avoidance of doubt neither Party shall be entitled to serve a Deadlock Notice if a resolution is proposed during a meeting of the Board or the Shareholders in respect of any matter that is not a Reserved Matter or Board Reserved Matter.
|
12. |
Resolution of deadlock
|
12.1 |
Subject to clause 12.8 if within fourteen (14) days of the service of a Deadlock Notice the Shareholders fail to resolve the dispute to which such Deadlock Notice relates either Shareholder may serve a
Deadlock Resolution Notice
on the other Shareholder within five (5) Business Days. A Deadlock Resolution Notice is a notice served by a Shareholder on the other in which the server offers, at the price for each Share specified in the notice (in cash and not on deferred terms), either to: (i) sell all its Shares in the JVCo to the recipient of the notice; or (ii) to buy all the recipient's Shares in the JVCo.
|
12.2 |
The recipient of a Deadlock Resolution Notice may choose to do either of the following, at the price for each Share specified in the Deadlock Resolution Notice, by serving a counter-notice within ten (10) Business Days of receiving the Deadlock Resolution Notice:
|
(a) |
buy all the Shares in the JVCo together with any outstanding Shareholder loans of the server of the Deadlock Resolution Notice; or
|
(b) |
sell all its Shares in the JVCo together with any outstanding Shareholder loans to the server of the Deadlock Resolution Notice.
|
12.3 |
If no counter-notice is served within the period of ten (10) Business Days available, the recipient of the Deadlock Resolution Notice is deemed to have accepted the offer in the Deadlock Resolution Notice at the expiry of that period.
|
12.4 |
The service of a counter-notice, or deemed acceptance of the Deadlock Resolution Notice, shall bind the Shareholders to buy and sell the applicable Shares and Shareholder loans (as the case may be) provided that the seller shall warrant that it is selling the applicable Shares and Shareholder loans with full title guarantee and shall provide to the other Shareholder such information and documentation as is reasonably requested to prove good title to the Shares and to enable the other Shareholder to be registered as the holder of such Shares. The closing of the transaction shall take place within thirty (30) days from the date of the counter notice or the date of the deemed acceptance.
|
12.5 |
If both Gunvor and Top Ships serve a Deadlock Resolution Notice under clause 12.1 only the Deadlock Resolution Notice containing the highest price per share shall be effective.
|
12.6 |
If at the end of the ten (10) Business Day period specified in clause 12.2 neither Top Ships nor Gunvor has served a Deadlock Resolution Notice, either Shareholder may
|
12.7 |
References in this clause to Shares held by a Shareholder in the JVCo are to all the Shares in the JVCo held by that Shareholder and not to some only of those Shares.
|
12.8 |
A Shareholder shall not be entitled to serve a Deadlock Resolution Notice pursuant to clause 12.1 in respect of a deadlock which arises in the Lock Up Period (as defined below). However, where a Shareholder is not entitled to serve a Deadlock Resolution Notice pursuant to this clause 12.8 and the Reserved Matter or Board Reserved Matter in respect of which the deadlock arises is marked as a "Deadlock Matter" in Schedule 1 or Schedule 2 such Shareholder shall be entitled to refer the deadlock to arbitration pursuant to clause 37 and the arbitrators shall be asked to make a binding determination on how the deadlock should be resolved in the best interests of the JV Co. Where the Reserved Matter or Board Reserved Matter in respect of which the deadlock arises is not marked as "Deadlock Matter" in Schedule 1 or Schedule 2 there shall be no requirements to resolve the deadlock and the relevant resolution shall not be carried.
|
13. |
Transfer of shares
|
13.1 |
No Party shall create any Encumbrance over, transfer or otherwise dispose of or give any person any rights in or over any Share or interest unless
|
(a) |
it is permitted or required under this agreement; and
|
(b) |
in the case of transfer of Shares the transferee also acquires the benefit and burden of any outstanding loan from the transferor to JVCo and procures the release of any guarantee entered into by the transferor.
|
13.2 |
No Shareholder may transfer any of its Shares (other than to a Permitted Transferee (as defined below)) for a period of three (3) years from the Completion Date ("
Lock Up Period
")
unless it is otherwise permitted or required to do so under this Agreement. It is also agreed that the JVCo shall not sell the Vessel to any third party during the Lock Up Period, unless approved by both Shareholders as a Reserved Matter.
|
13.3 |
A Shareholder may transfer all (but not some) of its Shares to a member of its Group (a "
Permitted Transferee
")
without the consent of the other Shareholder (a "
Permitted Transfer
")
if, at the time of the transfer and in relation to all the Shares being transferred, the transferring Party:
|
(a) |
procures that the transferee executes and delivers to the other Parties a Deed of Adherence agreeing to be bound by the terms of this agreement as if it was a Party to it; and
|
(b) |
guarantees all the obligations and any liabilities of the transferee under this agreement
|
13.4 |
In no circumstance is a transfer of Shares to a Restricted Person allowed.
|
13.5 |
Notwithstanding any other provision of this Agreement, the Shareholders irrevocably undertake and confirm that they shall not take any action(s) (including but not limited to transferring any Shares) which would result in JVCo failing to comply with the terms of any loan or related security documentation entered Into by JVCo, the Shareholders or any of their Affiliates and any external lender or financial institution without first obtaining the written consent of the applicable external lender or financial institution.
|
14. |
Right of First Refusal
|
14.1 |
Subject to clauses 13.4 and 14.2, if any Shareholder ("
Seller
") wishes to transfer some or all of its Shares and any loans advanced by the Seller to JVCo (
Shareholder Loans
)
to a bona fide third party on arm's length terms (
Proposed Buyer
)
following the expiry of the Lock Up Period, the other Shareholder (
Continuing Shareholder
)
shall have a right of first refusal to acquire the Shares and Shareholder Loans for the same price as that offered by the Proposed Buyer by following the procedure in this clause 14.
|
14.2 |
The right of first refusal in clause 14.1 shall not apply to a Permitted Transfer.
|
14.3 |
The Seller shall give a notice to the Continuing Shareholder specifying details of the proposed transfer including the name of the Proposed Buyer and the proposed price (a
Transfer Notice
).
The Continuing Shareholder shall have ten (10) Business Days to inform the Seller whether or not they wish to exercise their right of first refusal. If a Continuing Shareholder does wish to so exercise its right, then completion shall occur no later than forty five (45) Business Days thereafter. If a Continuing Shareholder does not wish to exercise its right to do so (or if it does not reply), then the Seller may transfer the Shares and Shareholder Loans not taken up by the Continuing Shareholders to the Proposed Buyer.
|
15. |
Compulsory Transfers
|
15.1 |
If anything referred to in this clause 15.1 happens to a Shareholder it is a
Compulsory Transfer Event
in respect of that Shareholder and the provisions of this clause 15 and clause 16 shall apply:
|
(a) |
the Shareholder becomes insolvent or is unable to pay its debts within the meaning of the insolvency legislation applicable to that Shareholder and has stopped paying its debts as they fall due;
|
(b) |
a step is taken to initiate any process by or under which:
|
i. |
the ability of the creditors of the Shareholder to take any action to enforce their debts is suspended, restricted or prevented; or
|
ii. |
a person is appointed to manage the affairs, business and assets of the Shareholder on behalf of the Shareholder's creditors; or
|
iii. |
the holder of a charge over the business and/or assets of the Shareholder is appointed to control the business and/or assets of the Shareholder.
|
(c) |
the Shareholder commits a material breach of this agreement which if capable of remedy has not been so remedied within 20 Business Days of the other Shareholder requiring such remedy; or
|
(d) |
the Paying Shareholder invokes the provision of Clause 10.9(c) due to the failure of the Non-Paying Shareholder to comply therewith; or
|
(e) |
the Shareholder is subject to a Change of Control.
|
15.2 |
If a Compulsory Transfer Event happens to a Shareholder, (in this clause the
Seller
),
it shall give notice of such event to the other Shareholder (in this clause the
Buyer
)
as soon as possible and, if it does not, it is deemed to have given notice of it on the date on which the Buyer becomes aware of such Compulsory Transfer Event ("
Compulsory Transfer Notice
").
|
15.3 |
As soon as practicable after service, or deemed service, of the Compulsory Transfer Notice, the Shareholders shall appoint the Valuer to determine (as defined below) the Fair Value of the Seller's Shares in the JVCo ("
Sale Shares
")
in accordance with clause 16.
|
15.4 |
The Buyer has the right, within ten (10) Business Days of receiving notification of the Fair Value (as defined below) determined by the Valuer (as defined below) to serve a notice on the Seller either to:
|
(a) |
buy all of the Sale Shares at 80% of the Fair Value (as defined below) and acquire the Shareholder Loans at the value of the outstanding principal plus accrued but unpaid interests (unless the Compulsory Transfer Event(s) relied on to serve the Compulsory Transfer Notice includes an event under clauses 15.1 (a), (b) or (e) in which case the reference to "80%" shall be replaced with a reference to "100%"); or
|
(b) |
sell all of its own Shares to the Seller at 120% of the Fair Value (as defined below) and sell the Shareholder Loans at the value of the outstanding principal plus accrued but unpaid interests (unless the Compulsory Transfer Event(s) relied on to serve the Compulsory Transfer Notice include an event under clauses 15.1 (a), (b) or (e) In which case the reference to "120%" shall be
|
15.5 |
The service of a notice to buy or sell (as the case may be) under clause 15.4 shall bind the Shareholders to buy and sell the Shares (and, if applicable Shareholder Loans) (as the case may be) and the Seller shall warrant that it is selling the Shares (and Shareholder Loans if applicable) with full title guarantee and shall provide to the other Shareholder such information and documentation as is reasonably requested to prove good title to the Shares (and Shareholder Loans if applicable) and to enable the other Shareholder to be registered as the holder of such Shares (and Shareholder Loans if applicable).
|
15.6 |
If at the end of the period specified in clause 15.4 the Buyer has not served a notice to buy the Sale Shares (and Shareholder Loans if applicable) or sell its own Shares (and Shareholder Loans if applicable) pursuant to clause (b) any rights of the Buyer pursuant to clause 15.4 to acquire the Sale Shares (and Shareholder Loans if applicable) or sell its Shares (and Shareholder Loans if applicable) shall lapse.
|
16. |
Valuation (only applicable to compulsory transfers)
|
16.1 |
The Shareholders shall endeavour to agree on the appointment of an independent valuer (the "Valuer") and to agree the terms of the appointment with the Valuer.
|
16.2 |
If the Shareholders are unable to agree on the appointment of a Valuer within fifteen (15) Business Days of either Shareholder serving details of a suggested valuer on the other, either Shareholder shall then be entitled to request an arbitrator to appoint a Valuer of repute with international experience in the valuation of shipping companies and agree the Valuer's terms of appointment.
|
16.3 |
The Valuer shall be requested to determine the Fair Value within forty five (45) Business Days of his appointment and to notify the Shareholders in writing of his determination.
|
16.4 |
All matters under this clause 16 shall be conducted, and the Valuer's decisions shall be written, in the English language.
|
16.5 |
The Fair Value for any Sale Share shall be the price per Share determined by the Valuer based on the mean average of the market valuations of the Vessel obtained by the Valuer from each of Clarkson Research Services Ltd, Arrow Research Ltd and Simpson Spence and Young Ltd and the following further bases and assumptions:
|
(a) |
valuing each of the Sale Shares as a proportion of the total value of all the issued shares in the capital of the JVCo without any premium or discount being
|
(b) |
if the JVCo is then carrying on business as a going concern, on the assumption that it will continue to do so;
|
(c) |
the sale is to be on arms' length terms between a willing buyer and a willing seller;
|
(d) |
the Sale Shares are sold free of all Encumbrances;
|
(e) |
the sale Is taking place on the date the Valuer were requested to determine the Fair Value; and
|
(f) |
to take account of any other factors that the Valuer reasonably believe should be taken into account.
|
16.6 |
The "
Fair Value
"
for any Sale Share will be the value determined by the Valuer.
|
16.7 |
The Shareholders are entitled to make submissions to the Valuer and will provide (or procure that the JVCo provides) the Valuer with such assistance and documents as the Valuer reasonably require for the purpose of reaching a decision, subject to the Valuer agreeing to give such confidentiality undertakings as the Shareholders may reasonably require.
|
16.8 |
To the extent not provided for by this clause 16, the Valuer may, in his reasonable discretion, determine such other procedures to assist with the valuation as they consider just or appropriate, including (to the extent they consider necessary) instructing professional advisers to assist them in reaching their valuation.
|
16.9 |
The Valuer shall act as expert and not as arbitrator and his written determination shall be final and binding on the Parties (in the absence of manifest error or fraud).
|
16.10 |
The cost of the Fair Value calculation shall be borne by the JVCo.
|
17. |
Termination and liquidation
|
17.1 |
Subject to clause 17.2, this Agreement shall terminate:
|
(a) |
when only one Shareholder holds all the Shares; or
|
(b) |
when a resolution is passed by the Shareholders or creditors, or an order is made by a court or other competent body or person instituting a process that shall lead to the JVCo being wound up and its assets being distributed among the JVCo's creditors, Shareholders or other contributors.
|
17.2 |
On termination of this Agreement, the following clauses shall continue in force: clause 1 (interpretation); this clause; clause 20 (confidentiality); clause 26 (assignment and other dealings); clause 27 (entire agreement); clause 28 (variation and waiver); clause 29 (costs); clause 30 (no partnership or agency); clause 31 (notices); clause 32 (severance); and clause 37 (governing law and jurisdiction).
|
17.3 |
Termination of this Agreement shall not affect any rights, remedies, obligations or liabilities of the Parties that have accrued up to the date of termination, including the right to claim damages in respect of any breach of the agreement which existed at or before the date of termination.
|
17.4 |
If this agreement terminates each Party shall, if requested by the other, procure that the name of the JVCo is changed to avoid confusion with the name of the Party making the request.
|
17.5 |
Where, following an event referred to in clause 17.1(b), the JVCo is to be wound up and its assets distributed, the Parties shall agree a suitable basis for dealing with the interests and assets of the JVCo and shall endeavour to ensure that, before dissolution:
|
(a) |
all existing contracts of the JVCo are performed to the extent that there are sufficient resources;
|
(b) |
the JVCo shall not enter into any new contractual obligations;
|
(c) |
the JVCo's assets are distributed as soon as practical.
|
18. |
Drag Along
|
18.1 |
Provided that the procedures in clauses 13 and 14 have been exhausted, and subject always to clause 13.4, if Top Ships on the one hand, or Gunvor on the other hand (provided in each case, the Shareholder holds not less than 50% of the Shares) ("
Selling Shareholder
")
wish to transfer all (but not some only) of its Shares ("
Sellers' Shares
")
(and Shareholder Loans if applicable) to a bona fide purchaser on arm's length terms ("
Proposed Buyer
"),
the Selling Shareholder may require the other Shareholder ("
Called Shareholder
")
to sell and transfer all its shares ("
Called Shares
")
(and Shareholder Loans if applicable) to the Proposed Buyer (or as the Proposed Buyer directs) in accordance with the provisions of this clause 18 ("
Drag Along Option
").
|
18.2 |
Subject to clause 18.1, the Selling Shareholder may exercise the Drag Along Option at any time after the third anniversary of the Completion Date and shall only be exercised by the Shareholder wishing to exercise its option giving written notice to that effect to the Called Shareholder ("
Drag Along Notice
").
The Drag Along Notice shall specify:
|
(a) |
that the Called Shareholder is required to transfer all its Called Shares (and Shareholder Loans if applicable) pursuant to this clause 18;
|
(b) |
the person to whom the Called Shares (and Shareholder Loans if applicable) are to be transferred;
|
(c) |
the purchase price payable for the Called Shares ("Offer Price") which shall, for each Called Share be an amount at least equal to the price per share offered by the Proposed Buyer for the Sellers' Shares;
|
(d) |
the value of any Shareholder Loans outstanding and accrued but unpaid interest; and
|
(e) |
a date, which is no less than five and no more than forty five (45) Business Days after the date of the Drag Along Notice, on which completion is to take place.
|
18.3 |
Where a Drag Along Option is exercised the Selling Shareholder shall, as a condition precedent to the transfer of the Called Shares to the Proposed Buyer, pay or procure the payment of the Shortfall to the Called Shareholder in addition to the Offer Price. For the avoidance of doubt if a Drag Along Option is exercised after the ninth anniversary of Completion the provisions of this Clause shall not apply.
|
18.4 |
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 entered into a definitive agreement to sell the Sellers' Shares to the Proposed Buyer within forty five (45) Business Days of serving the Drag Along Notice. The Selling Shareholders may serve further Drag Along Notices following the lapse of any particular Drag Along Notice.
|
18.5 |
No Drag Along Notice shall require a Called Shareholder to agree to any terms except those specifically set out in this clause 18.
|
18.6 |
The proposed sale of the Sellers' Shares by the Selling Shareholder to the Proposed Buyer is subject to the rights of pre-emption set out in clauses 13 and 14, but the sale of the Called Shares by the Called Shareholder shall not be subject to those provisions.
|
18.7 |
Completion of the exercise of a Drag Along Option shall take place on the date specified in the Drag Along Notice or such later date as agreed by Gunvor, Top Ships and the Proposed Buyer in writing. At completion: (i) the Proposed Buyer shall pay the Offer Price to the Called Shareholders in cash; (ii) the Selling Shareholders shall pay, or procure the payment of, any Shortfall in cash to the Called Shareholders; (iii) the Called Shareholders shall execute and deliver a transfer of the shares to the Proposed Buyer together with the relevant certificate(s) or an indemnity, in a form reasonably satisfactory to the Proposed Buyer, in respect of any lost certificate, together, in either case, with such other evidence (if any) as the Proposed Buyer may reasonably require to prove good title to the Called Shares or enable it to be registered as the holder of the Called Shares; and (iv) assignment of Shareholder Loans as applicable.
|
18.8 |
If a Selling Shareholder is entitled to serve a Drag Along Notice pursuant to clause 18 but has not done so it shall notify the other Shareholder of this at least thirty (30) Business Days before completion of the sale of the Sellers' Shares to the Proposed Buyer is due to take place and following receipt of such notice the other Shareholder shall be entitled by notice in writing within five (5) Business Days to require the Selling Shareholder to serve a Drag Along notice in respect of its Shares in which case the terms of clauses 18.2-18.8 shall apply save that (i) if the Proposed Buyer does not wish to buy all of the Shares which become Called Shares because of this clause 18.8 on the terms set out in clauses 18.2-18.8 it shall not be obliged to so and (unless otherwise agreed by the Called Shareholders) in such case the sale of the Sellers' Shares shall not proceed; and (ii) the Called Shareholder shall not be entitled to receive any Shortfall.
|
18.9 |
If, after to the Lock up Period, Top Ships on the one hand, or Gunvor on the other hand (provided in each case, the Shareholder holds not less than 50% of the Shares) ("
Vessel Selling Shareholder
")
wish to sell the Vessel to a bona fide purchaser on arm's length terms ("
Proposed Vessel Purchaser
"),
the Vessel Selling Shareholder may, subject at all times to the provisions of Clause 18.10, require the other Shareholder to agree to the sale of the Vessel to the Proposed Vessel Purchaser by serving written notice on the other Shareholder ("
Vessel Sale Notice
")
specifying the identity of the Proposed Vessel Purchaser and the principal terms agreed in relation to the sale including but not limited to the purchase price for the Vessel (the "
Vessel Offer Price
").
In the event the Vessel Offer Price is less than the Minimum Valuation then as a condition precedent to the sale of the Vessel to the Proposed Vessel Purchaser, the Selling Shareholder shall pay or procure the payment of the Shortfall to the other Shareholder. For the avoidance of doubt, the payment of any Shortfall shall not apply after the ninth anniversary of Completion.
|
18.10 |
Following service of a Vessel Sale Notice by the Vessel Selling Shareholder, the other Shareholder shall be granted a right of first refusal to purchase the Vessel on the same terms as set out in the Vessel Sale Notice and shall be entitled within 5 Business Days of the date of the Vessel Sale Notice to serve a written notice on the Vessel Selling Shareholder ("
Counter Notice
")
exercising such right of first refusal following which the other Shareholder shall be obliged to purchase and JVCo shall be obliged to sell the Vessel to the other Shareholder within 45 days of the date of the Counter Notice. If the other Shareholder does not wish to exercise its right of first refusal (or if it does not reply), then the Vessel Selling Shareholder may sell the Vessel to the Proposed Vessel Purchaser on the same terms as are set out in the Vessel Sale Notice.
|
19. |
Status of agreement
|
19.1 |
Each Party shall, to the extent that it is able to do so, exercise all its voting rights and other powers in relation to the JVCo to procure that the provisions of this Agreement are
|
19.2 |
If there is an inconsistency between any of the provisions of this Agreement and the provisions of the Articles, the provisions of this agreement shall prevail as between the Parties.
|
19.3 |
The Parties shall, when necessary, exercise their powers of voting and any other rights and powers they have to amend, waive or suspend a conflicting provision in the Articles to the extent necessary to permit the JVCo and its Business to be administered as provided in this Agreement.
|
20. |
Confidentiality
|
20.1 |
In this clause
Confidential Information
means any information which:
|
(a) |
a Party may have or acquire at any time in relation to the Business or affairs of JVCo;
|
(b) |
a Party may have or acquire at any time in relation to the business or affairs of another Party or any member of another Party's Group, as a consequence of the negotiations relating to this Agreement or any other agreement or document referred to in this Agreement or the performance of the Agreement or any other agreement or document referred to in this Agreement; or
|
(c) |
relates to the contents of this Agreement (or any agreement or arrangement entered into pursuant to this Agreement).
|
20.2 |
Each Party shall at all times keep confidential (and ensure that its employees, agents, subsidiaries and the employees and agents of such subsidiaries, and JVCo (in respect of information specified in clause 20.1(b) and clause 20.1(c)) shall keep confidential) any Confidential Information and shall not use or disclose any such Confidential Information except to professional advisers subject to the same restrictions as are contained in this clause or as required by law or regulatory authority.
1
|
21. |
Announcements
|
21.1 |
Subject to clause 21.2, no Party shall make, or permit any person to make, any public announcement, communication or circular ("
announcement
")
concerning the existence, subject matter or terms of this agreement, the wider transactions contemplated by it, or the relationship between the Parties, without the prior written consent of the other Parties
|
21.2 |
Where an announcement is required by law or any governmental or regulatory authority (including, without limitation, any relevant securities exchange), or by any court or other authority of competent jurisdiction, the Party required to make the announcement shall promptly notify the other Parties. The Party concerned shall make all reasonable attempts to agree the contents of the announcement before making it.
|
21.3 |
Top Ships and Gunvor shall release an announcement in the agreed form following Completion and Top Ships Inc shall file all agreements as required by the SEC but shall ensure that such filings disclose the minimum information required in order to comply with SEC rules.
|
22. |
Reflagging And Redomiciliation
|
23. |
Further assurance
|
24. |
Indemnity
|
25. |
Disputes in relation to the Ship Management Agreement and Time Charter
|
26. |
Assignment and other dealings
|
27. |
Entire agreement
|
27.1 |
This Agreement (together with the documents referred to in it) constitute the entire
Agreement between the Parties and supersede and extinguish all previous discussions, correspondence, negotiations, drafts, agreements, promises, assurances, warranties, representations, arrangements and understandings between them, whether written or oral, relating to their subject matter.
|
27.2 |
Each Party acknowledges that in entering into this Agreement (and any documents
referred to in it), it does not rely on, and shall have no remedies in respect of, any statement, representation, assurance or warranty (whether made innocently or negligently) that is not set out in this Agreement (or those documents).
|
28. |
Variation and waiver
|
28.1 |
No variation of this Agreement shall be effective unless it is in writing and signed by the
Parties (or their authorised representatives).
|
28.2 |
A waiver of any right or remedy under this Agreement or by law is only effective if given in
writing and signed by the person waiving such right or remedy. Any such waiver shall apply only to the circumstances for which it is given and shall not be deemed a waiver of any subsequent breach or default.
|
28.3 |
A failure or delay by any person to exercise any right or remedy provided under this
Agreement or by law shall not constitute a waiver of that or any other right or remedy, nor shall it prevent or restrict any further exercise of that or any other right or remedy. No single or partial exercise of any right or remedy provided under this Agreement or by law shall prevent or restrict the further exercise of that or any other right or remedy.
|
28.4 |
A person that waives a right or remedy provided under this Agreement or by law in
relation to one person, or takes or fails to take any action against that person, does not affect its rights or remedies in relation to any other person.
|
29. |
Costs
|
30. |
No partnership or agency
|
30.1 |
Nothing in this Agreement is intended to, or shall be deemed to, establish any partnership
between the Parties or constitute any Party the agent of another Party.
|
30.2 |
Each Party confirms that it is acting on its own behalf and not for the benefit of any other
person.
|
31. |
Notices
|
31.1 |
A notice given under this Agreement shall be in writing in the English language (or be
accompanied by a properly prepared translation into English) and shall be sent: (i) for the attention of Tsirikos Alexandros, at the address on page one of this agreement and at fax number: +30 210 805 6441 and at the e-mail address:
atsirikosa.topships.orq
in the case of Top Ships; (ii) for the attention of Gia Mai, c/o Gunvor S.A., 80-84 Rue du Rhone, 1204 Geneva, Switzerland, at fax number: +41 22 718 7929 and at the e-mail address
gia.mai@gunvorgroup.com
in the case of Gunvor; (iii) in the case of JVCo for the attention of the Company Secretary, at the address on page one of this agreement and at a fax number and e-mail address notified by JVCo to Gunvor and Top Ships from time to time; or (iv) to such other address, fax number or person as the relevant Party may notify to the other Parties.
|
31.2 |
A notice shall be delivered personally; or delivered by commercial courier; or sent by fax;
or sent by e-mail; or (if the notice is to be served or given outside the country from which it is sent) sent by reputable international overnight courier.
|
31.3 |
If a notice has been properly sent or delivered in accordance with this clause, it will be
deemed to have been received as follows:
|
(a) |
if delivered personally, at the time of delivery; or
|
(b) |
if delivered by commercial courier, at the time of signature of the courier's delivery receipt; or
|
(c) |
if delivered by fax or e-mail, upon confirmed completion of transmission; or
|
(d) |
if deemed receipt under the previous paragraphs of this sub-clause is not within business hours (meaning 9.00 am to 5.30 pm Monday to Friday on a day that is not a public holiday in the place of receipt), when business next starts in the
|
32. |
Severance
|
32.1 |
If any provision or part-provision of this Agreement is or becomes invalid, illegal or unenforceable, it shall be deemed modified to the minimum extent necessary to make it valid, legal and enforceable. If such modification is not possible, the relevant provision or part-provision shall be deemed deleted. Any modification to or deletion of a provision or part-provision under this clause shall not affect the validity and enforceability of the rest of this Agreement.
|
32.2 |
If
one
Party gives notice to the other of the possibility that any provision or part-provision of this Agreement is invalid, illegal or unenforceable, the Parties shall negotiate in good faith to amend such provision so that, as amended, it is legal, valid and enforceable, and, to the greatest extent possible, achieves the intended commercial result of the original provision.
|
33. |
Agreement survives Completion
|
34. |
Third party rights
|
34.1 |
This Agreement does not give rise to rights under the Contracts (Rights of Third Parties)
Act 1999 to enforce any term of this agreement.
|
34.2 |
The rights of the Parties to rescind or vary this Agreement are not subject to the consent of any other person.
|
35. |
Rights and remedies
|
36. |
Inadequacy of damages
|
37. |
Governing law and Jurisdiction
|
37.1 |
This Agreement and any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with it or its subject matter or formation shall be governed by and construed in accordance with the law of England and Wales.
|
37.2 |
Any dispute arising out of or in connection with this Agreement, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration under the LCIA Rules, which Rules are deemed to be incorporated by reference into this clause.
|
37.3 |
The number of arbitrators shall be three with one to be appointed by each of the Parties save in the event of a dispute involving only two Parties in which case each of the two relevant Parties shall appoint one arbitrator, with the third to be appointed by the two others so appointed.
|
37.4 |
The seat, or legal place, of arbitration shall be London, England.
|
37.5 |
The language to be used in the arbitral proceedings shall be English.
|
1.
|
Altering the name of the JVCo
|
|
2.
|
Altering in any respect the Articles or the rights attaching to any of the Shares (except as provided in clause 20.3).
|
|
3.
|
Increase or reduce the amount of JVCo's issued share capital, grant any option or other interest over or in its share capital, redeem or purchase any of its own shares or otherwise alter, or effect any reorganisation of, its share capital.
|
DEADLOCK MATTER
|
4.
|
Declaring, paying or making any dividend or other distribution.
|
|
5.
|
Any determination under clause 10.7 and any determination in excess of the maximum commitment referred to in Clause 10.1
|
DEADLOCK MATTER
|
6.
|
Making any loan (otherwise than by way of deposit with a bank or other institution the normal business of which includes the acceptance of deposits) or granting any credit (other than in the normal course of trading) or giving any guarantee (other than in the normal course of trading) or indemnity
|
DEADLOCK MATTER
|
7.
|
Passing any resolution to wind up JVCo or filing any petition for its winding up or entering into or proposing any arrangement or composition with its creditors.
|
DEADLOCK MATTER
|
8.
|
Applying for an administration order or appointing a receiver or administrator in respect of the JVCo.
|
DEADLOCK MATTER
|
9.
|
Altering the JVCo's registered address.
|
|
10.
|
Deciding on the Directors' entitlement to any remuneration
by way of salary, commission, fees or otherwise in relation to the performance of their duties as Directors.
|
|
11.
|
JVCo acquiring or disposing of any undertaking, business, company or securities of a company, or closing down any business operation, in any case having a book or market value greater than USD 250,000 or its equivalent in any other currency (inclusive of VAT).
|
|
12.
|
JVCo entering into any joint venture, partnership, profit sharing agreement, consolidation, merger, amalgamation, collaboration or major project not included in the First Budget or Budget where the expenditure would exceed USD 250,000 or its equivalent in any other currency (inclusive of VAT) per transaction.
|
|
13.
|
Incorporating any subsidiary of JVCo or establishing any new branch, agency, trading establishment, business or outlet not provided for In the First Budget or Budget.
|
|
14.
|
Amalgamating or merging JVCo with any other company or business undertaking.
|
|
15.
|
Any material change to the scope, nature or geographical area of the Business.
|
|
16.
|
JVCo carrying on any business other than the Business which is not ancillary or incidental to the Business.
|
|
17.
|
Any change to the legal and regulatory status of JVCo.
|
|
18.
|
Any change in the Board structure and size, subject to Clause 10.10 of this
|
Agreement.
|
||
19.
|
Any significant changes to the JVCo's accounting policy or practices.
|
|
20.
|
The appointment or removal of the Company Secretary, Singapore resident director and Singapore commercial manager required as per Singapore legal requirements.
|
DEADLOCK MATTER
|
21.
|
The entering into, amending or terminating any agreement or arrangement, whether formal or informal, other than time charters, vessel management agreements, pooling or commercial management agreements, between JVCo and:
any Shareholder or any of its directors; or
any Affiliate of a Shareholder or any of its directors; or
any Connected Person of a Shareholder
|
|
22.
|
The entering into, amending or terminating any time charters, vessel management agreements, pooling or commercial management agreements between the JVCo and a third party, a Shareholder or any member of a Shareholder's Group.
|
DEADLOCK MATTER
|
23.
|
Applying for the admission to listing or trading on any stock exchange or market of (a) any shares in the capital of the Company or any depository receipts representing shares in the capital of the Company or (b) debt securities issued by the Company
|
|
24.
|
The appointment and removal if the auditors of JVCo.
|
DEADLOCK MATTER
|
25.
|
The adoption of the audited accounts of JVCo.
|
DEADLOCK MATTER
|
26.
|
Accepting a proposal from a Lender pursuant to clause 10.5
|
DEADLOCK MATTER
|
1.
|
Adopting or materially amending the First Budget, any subsequent Budget or any other financial plan of JVCo.
|
DEADLOCK MATTER
|
2.
|
Creating or granting any Encumbrance over the whole or any part of the Business, undertaking, assets or Vessels of the JVCo or over any shares in the JVCo or agreeing to do so.
|
DEADLOCK MATTER
|
3.
|
Save as otherwise set out in this Agreement, incur any borrowings in excess of $1,000,000 in aggregate from time to time or issue any loan capital.
|
DEADLOCK MATTER
|
4.
|
Any borrowings prepayments
|
|
5.
|
The execution of any contract of a long-term onerous or unusual nature or the assumption of any material liability by the JVCo other than in the ordinary course of business of the Company.
|
|
6.
|
The entry into, amendment, termination or waiver under or in respect of any contract or commitment not provided for in the First Budget or any subsequent Budget or any material variation of the same by the JVCo:
a.
with a value in excess of USD 250,000 (exclusive of VAT);
b.
which may incur costs in excess of USD 50,000 per item (exclusive of VAT);
c.
which may not be fulfilled or completed within one year;
d.
which would result in any restriction on the Company carrying on or being engaged in the Business.
|
DEADLOCK MATTER
|
7.
|
Amending the terms of the Shipbuilding Contract, Ship Management Agreement or the Time Charter or waiving any rights of the JVCo thereunder
|
|
8.
|
Any change to the agreed management structure of the JVCo.
|
|
9.
|
JVCo entering into or varying the terms of any transaction, agreement or arrangement (or waiving its rights thereunder) between JVCo and a Shareholder or any of its Affiliates or any of their respective directors
|
|
10.
|
Settling or compromising any legal, arbitration or other proceedings in excess of USD 250,000 or its equivalent in any other currency (other than debt recovery in the ordinary course of business).
|
|
11.
|
Making any agreement with any tax authority or making any claim, disclaimer, surrender, election or consent exceeding USD 250,000 or its equivalent in any other currency for tax purposes in relation to the JVCo or its business.
|
|
12.
|
Granting any rights (by license or otherwise) in or over any Intellectual property owned or used by the JVCo.
|
|
13.
|
The granting of any power of attorney or other delegation of powers by any Director or the Board.
|
14.
|
In any financial year:
a.
incurring, or entering into any commitment to incur, any capital expenditure or operating expenses which is not in the First Budget or Budget in excess of USD 50,000 per item or with a value in excess of USD 250,000 (exclusive of VAT); or
b.
entering into any agreement to sell, transfer, lease, license or in any way dispose of any fixed asset or fixed assets without budgetary or specific approval with a book value in excess USD100,000 or 5% of the book value of JVCo
|
DEADLOCK MATTER
|
15.
|
Any step or action which will or is likely to result in the Vessels changing their flag, or the JVCo becoming resident for tax purposes, or otherwise subject to tax, in any jurisdiction other Singapore or in the JVCo ceasing to be resident for tax purposes in Singapore as a consequence of the application of clause 22.
|
DEADLOCK MATTER
|
16.
|
The making of any claim, surrender, election or consent for tax purposes
|
|
17.
|
Any action which may result in the JVCo being grouped for VAT purposes with any other Entity.
|
|
18.
|
Subject to the provisions of clause 18.9, the sale, transfer, lease, license or disposal in any way of the whole or a substantial part of its business undertaking or assets of the JVCo, including but not limited to the Vessel (whether by a single transaction or a series of transactions).
|
|
19.
|
The acquisition or disposal in one transaction or in a series of related transactions of any freehold, leasehold property or fixed assets in excess of USD 250,000 or its equivalent in any other currency.
|
|
20.
|
The hiring, appointment, dismissal, remuneration and benefits (including bonuses) of any employees of the JVCo having a yearly total remuneration above USD 50,000 or its equivalent in any other currency, as well as any increase in the total remuneration or benefits of any employees in excess of 5%. For the needs of this Agreement, total remuneration shall mean basic salary, bonus, housing allowance, transport allowance, feeding allowance, dressing allowance, entertainment, medical allowance, utility, furniture grant, leave allowance or any other similar allowances.
|
|
21.
|
Entering into any service agreement with any or the variation of the terms thereof
|
|
22.
|
Any matter in which a Director is interested or where he has, or may have, a conflict of interest with the JVCo save as otherwise set out in this Agreement.
|
|
23.
|
The opening or closing of any Company's bank accounts and granting or removing authority to operate the Company's bank accounts.
|
DEADLOCK MATTER
|
24.
|
The factoring or assignment of any Company's debts.
|
All figures in USD
|
2017
|
2018
|
||||||||||||||||||||||||||||||||||
|
August
|
September
|
October
|
November
|
December
|
January
|
February
|
March
|
April
|
|||||||||||||||||||||||||||
Hyundai Instalment S444
|
1,495,000
|
1.495,000
|
1.495.000
|
2,990.000
|
||||||||||||||||||||||||||||||||
Supervision cost
2
|
35,714
|
35,714
|
35,714
|
35,714
|
35,714
|
35.714
|
35,714
|
35,714
|
35,714
|
|||||||||||||||||||||||||||
Management Fees
|
25,200
|
27,900
|
27,000
|
|||||||||||||||||||||||||||||||||
Pre-delivery expenses (estimate incl. 20k excess of Singapore tonnage tax registration)
|
100,000
|
220,000
|
500,000
|
|||||||||||||||||||||||||||||||||
Working Capital
|
162,000
|
|||||||||||||||||||||||||||||||||||
Total 444
|
35,714
|
1
,530,714
|
35
,
714
|
35
,
714
|
1
,
530
,
714
|
35
,
714
|
1
,
655
,
914
|
3
,
273
,
614
|
724
,
714
|
NOTE : |
Additional expenses may be incurred in relation to financing
Delivery instalment not included in this table Hyundai Instalments are due at the end of each month Working capital to be contributed upon each vessel's delivery First and second instalment of predelivery expenses to be paid during the first week of the relevant month Third instalment of predelivery expenses to be paid 2 weeks before delivery of the relevant vessel Supervision cost and management fees are due at the beginning of each relevant month Additional expenses may be incurred in relation to the required corporate actions for the Singapore entities specifically in relation to deal closing Additional expenses may be incurred in Hyundai as a result of a change of flag from Marshall Islands to Singapore |
BUDGET FOR THE FIRST 8 MONTHS OF VESSEL'S OPERATION -1 May 2018 - 31 Dec 2018
|
S444
|
|||
Time Charter revenues
|
3,491,250
|
|||
Less Brokerage Commissions
|
-87,281
|
|||
OPEX budget as per management agreement
|
-1,340,150
|
|||
Management Fees
|
-220,500
|
|||
Singapore Annual corporate costs (estimate)
|
5,000
|
|||
Accounting and Audit (estimate)
|
-25,000
|
|||
Net cash flow before servicing of finance
|
1
,
813
,
319
|
May 2018 - November 2018
|
900
|
|||
November 2018 - December 2018
|
900
|
Signed by Alexandros Tsirikos
|
|
|
for and on behalf of
GRAMOS
|
|
/s/ Alexandros Tsirikos
|
SHIPPING COMPANY INC.
|
|
Attorney-in-fact
|
|
|
|
Signed by Shahb Richyal
|
|
|
for and on behalf of
JUST-C
|
|
/s/ Shahb Richyal
|
LIMITED
|
|
Authorized Signatory
|
|
|
|
Signed by Andreas Louka
|
|
|
for and on behalf of
|
|
/s/ Andreas Louka
|
ECO NINE PTE. LTD
|
|
Director
|
|
|
|
Confidential
|
||||
Dated 5 September 2017
|
||||
ASTARTE INTERNATIONAL INC.
as Borrower
arranged by
AMSTERDAM TRADE BANK N.V.
with
AMSTERDAM TRADE BANK N.V.
as Agent
AMSTERDAM TRADE BANK N.V.
as Security Agent
and
TOP SHIPS INC.
as Guarantor
|
||||
FACILITY AGREEMENT
for up to $23,500,000 Loan Facility |
||||
Clause
|
Page
|
|
Section 1 - Interpretation
|
1
|
|
1
|
Definitions and interpretation
|
1
|
Section 2 - The Facility
|
24
|
|
2
|
The Facility
|
24
|
3
|
Purpose
|
24
|
4
|
Conditions of Utilisation
|
25
|
Section 3 - Utilisation
|
26
|
|
5
|
Utilisation
|
26
|
Section 4 - Repayment, Prepayment and Cancellation
|
27
|
|
6
|
Repayment
|
27
|
7
|
Illegality, prepayment and cancellation
|
28
|
8
|
Restrictions
|
31
|
Section 5 - Costs of Utilisation
|
34
|
|
9
|
Interest
|
34
|
10
|
Interest Periods
|
35
|
11
|
Changes to the calculation of interest
|
35
|
12
|
Fees
|
36
|
Section 6 - Additional Payment Obligations
|
38
|
|
13
|
Tax gross-up and indemnities
|
38
|
14
|
Increased Costs
|
42
|
15
|
Other indemnities
|
43
|
16
|
Mitigation by the Lenders
|
47
|
17
|
Costs and expenses
|
47
|
Section 7 - Guarantee
|
49
|
|
18
|
Guarantee and indemnity
|
49
|
Section 8 - Representations, Undertakings and Events of Default
|
52
|
|
19
|
Representations
|
52
|
20
|
Information undertakings
|
59
|
21
|
Financial covenants
|
62
|
22
|
General undertakings
|
63
|
23
|
Construction period
|
67
|
24
|
Dealings with Ship
|
68
|
25
|
Condition and operation of Ship
|
70
|
26
|
Insurance
|
73
|
27
|
Minimum security value
|
77
|
28
|
Chartering undertakings
|
80
|
29
|
Bank accounts
|
81
|
30
|
Business restrictions
|
82
|
31
|
Events of Default
|
85
|
Section 9 - Changes to Parties
|
90
|
|
32
|
Changes to the Lenders
|
90
|
33
|
Changes to the Obligors
|
93
|
Section 10 - - The Finance Parties
|
94
|
|
34
|
Roles of Agent, Security Agent and Arranger
|
94
|
35
|
Trust and security matters
|
105
|
36
|
Enforcement of Transaction Security
|
109
|
37
|
Application of proceeds
|
110
|
38
|
Conduct of business by the Finance Parties
|
113
|
39
|
Sharing among the Finance Parties
|
113
|
Section 11 - Administration
|
115
|
|
40
|
Payment mechanics
|
115
|
41
|
Set-off
|
118
|
42
|
Notices
|
119
|
43
|
Calculations and certificates
|
121
|
44
|
Partial invalidity
|
121
|
45
|
Remedies and waivers
|
121
|
46
|
Amendments and waivers
|
121
|
47
|
Confidential Information
|
126
|
48
|
Confidentiality of Funding Rates
|
128
|
49
|
Counterparts
|
129
|
50
|
Contractual recognition of bail-in
|
130
|
Section 12 - Governing Law and Enforcement
|
131
|
|
51
|
Governing law
|
131
|
52
|
Enforcement
|
131
|
Schedule 1 The original parties
|
132
|
|
Schedule 2 Ship information
|
134
|
|
Schedule 3 Conditions precedent
|
135
|
|
Schedule 4 Utilisation Request
|
141
|
|
Schedule 5 Form of Transfer Certificate
|
142
|
Schedule 6 Form of Compliance Certificate Part A - Borrower
|
145
|
Part B - Guarantor
|
146
|
Schedule 7 Forms of Notifiable Debt Purchase Transaction Notice
|
147
|
Schedule 8 Semi-Annual Vessel Performance Report
|
149
|
(1) |
ASTARTE INTERNATIONAL INC.
(the
Borrower
);
|
(2) |
TOP SHIPS INC.
(the
Guarantor
);
|
(3) |
AMSTERDAM TRADE BANK N.V.
as mandated lead arranger (the
Arranger
);
|
(4) |
THE FINANCIAL INSTITUTIONS
listed in Schedule 1 as lenders (the
Original Lenders
);
|
(5) |
AMSTERDAM TRADE BANK N.V.
as agent of the other Finance Parties (the
Agent
); and
|
(6) |
AMSTERDAM TRADE BANK N.V.
as security trustee for the Finance Parties (the
Security Agent
).
|
1 |
Definitions and interpretation
|
1.1 |
Definitions
|
(a) |
a bank or financial institution which has a rating for its long-term unsecured and non-credit-enhanced debt obligations of "A-" or higher by Standard & Poor's Rating Services or Fitch Ratings Ltd or "Baa1" or higher by Moody's Investors Service Limited or a comparable rating from an internationally recognised credit rating agency; or
|
(b) |
any other bank or financial institution approved by the Agent and the Borrower.
|
(a)
|
in relation to an EEA Member Country which has implemented, or which at any time implements, Article 55 of Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms, the relevant implementing law or regulation as described in the EU Bail-In Legislation Schedule from time to time; and
|
(b) |
in relation to any other state, any analogous law or regulation from time to time which requires contractual recognition of any Write-down and Conversion Powers contained in that law or regulation.
|
(a) |
any law or regulation in force as at the date hereof 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 (excluding the Margin) 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 relevant part of it or Unpaid Sum to the last day of the current Interest Period in respect of the Loan or relevant part of it or Unpaid Sum, had the relevant principal amount or Unpaid Sum received been paid on the last day of that Interest Period;
|
(b) |
the amount which that Lender would be able to obtain by placing an amount equal to the relevant principal amount or Unpaid Sum received by it on deposit with a leading bank for a period starting on the Business Day following receipt or recovery and ending on the last day of that Interest Period.
|
(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 assigned to it under this Agreement; and
|
(b) |
in relation to any other Lender, the amount of any Commitment assigned to it under this Agreement,
|
(c) |
any member of the Group or any of its advisers; or
|
(d) |
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) |
information that:
|
(A) |
is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of clause 47
(Confidential Information)
; or
|
(B) |
is identified in writing or orally if given orally at the time of delivery as non-confidential by any member of the Group or any of its advisers; or
|
(C) |
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 aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality; and
|
(ii) |
any Funding Rate.
|
(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,
|
(a) |
which has failed to make its participation in the Loan available (or has notified the Agent or the Borrower (which has notified the Agent) that it will not make its participation in the Loan available) by the Utilisation Date 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 Disruption Event; and,
|
(ii) |
the Lender is disputing in good faith whether it is contractually obliged to make the payment in question.
|
(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) |
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 Fleet Vessel or its owner, operator or manager is 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 Fleet Vessel is arrested or attached in connection with any such Environmental Claim.
|
(a) |
in respect of a Lender, the office or offices notified by that 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 or offices through which it will perform its obligations under this Agreement; or
|
(b) | (cc) | 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 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 2019; 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 2019,
|
(a) |
30 September 2023; and
|
(b) |
the date falling sixty Months after the Utilisation Date.
|
(a) |
moneys borrowed and debit balances at banks or other financial institutions;
|
(b) |
any amount raised under any acceptance under any acceptance credit or bill discounting facility (or dematerialised equivalent);
|
(c) |
any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;
|
(d) |
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;
|
(e) |
receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis and meet any requirement for de-recognition under GAAP);
|
(f) |
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);
|
(g) |
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;
|
(h) |
in respect of the Borrower only, any amount raised by the issue of shares which are redeemable (other than at the option of the issuer) before the Final Repayment Date
or are otherwise classified as borrowings under GAAP);
|
(i) |
any amount of any liability under an advance or deferred purchase agreement if (i) 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 (ii) 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;
|
(j) |
any amount raised under any other transaction (including any forward sale or purchase, sale and sale back or sale and leaseback agreement) of a type not referred to in any other paragraph of this definition having the commercial effect of a borrowing or otherwise classified as borrowings under GAAP; and
|
(k) |
the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (j) above.
|
(a) |
it has failed to make (or has notified a Party that it will not make) a payment required to be made by it under the Finance Documents by the due date for payment;
|
(b) |
the Agent otherwise rescinds or repudiates a Finance Document;
|
(c) |
(if the Agent is also a Lender) it is a Defaulting Lender under paragraphs (a) or (b) of the definition of "Defaulting Lender"; or
|
(d) |
an Insolvency Event has occurred and is continuing with respect to the Agent;
|
(i) |
its failure to pay is caused by:
|
(A) |
administrative or technical error; or
|
(B) |
a Disruption Event; and
|
(ii) |
the Agent is disputing in good faith whether it is contractually obliged to make the payment in question.
|
(a) |
each Finance Party, each Receiver, any Delegate 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) |
becomes insolvent or is unable to pay its debts or fails or 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 a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger);
|
(g) |
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 (other than, for so long as it is required by law or regulation not to be publicly disclosed, any such appointment which is to be made, or is made, by a person or entity described in paragraph (d) above);
|
(h) |
has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other enforcement action or legal process levied, enforced, taken 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;
|
(i) |
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 (h) above; or
|
(j) |
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; and
|
(b) |
the applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds the relevant Interest Period,
|
(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 Act 1980 and the Foreign Limitation Periods Act 1984, 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 as a Lender in accordance with clause 32
(Changes to the Lenders)
,
|
(a) |
the applicable Screen Rate as of 11:00 a.m. on the relevant Quotation Day for a period equal in length to the Interest Period of the Loan or relevant part of it or Unpaid Sum; or
|
(b) |
as otherwise determined pursuant to clause 11.1
(Unavailability of Screen Rate)
,
|
(a) |
the business or financial condition of an Obligor (other than CSM);
|
(b) |
the ability of an Obligor to perform its obligations under 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) |
for the period commencing on the Utilisation Date and ending on the date falling twelve Months thereafter (the
First Anniversary
), 115% of the Loan;
|
(b) |
for the period commencing on the first day falling after the First Anniversary and ending on the date falling twelve Months thereafter (the
Second Anniversary
), 120% of the Loan;
|
(c) |
for the period commencing on the first day falling after the Second Anniversary and ending on the date falling twelve Months thereafter (the
Third Anniversary
), 125% of the Loan; and
|
(d) |
from the period commencing on the first day falling after the Third Anniversary and ending on the last day of the Facility Period and as long as the Ship is subject to a Mortgage, 140% of the Loan.
|
(a) |
(subject to paragraph (c) below) if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in the calendar month in which that period is to end (if there is one) or on the immediately preceding Business Day (if there is not);
|
(b) |
if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month; and
|
(c) |
if an Interest Period begins on the last Business Day of a calendar month, that Interest Period shall end on the last Business Day in the calendar month in which that Interest Period is to end.
|
(a) |
the Mortgage;
|
(b) |
the General Assignment;
|
(c) |
the Share Security;
|
(d) |
the Charter Assignment;
|
(e) |
the Account Security in relation to the Operating Account; and
|
(f) |
any Manager's Undertaking if required under clause 24.4
(Manager).
|
(a) |
any ship repairer's or outfitter's possessory lien in respect of the Ship for an amount not exceeding the Major Casualty Amount;
|
(b) |
any lien on the Ship for master's, officer's or crew's wages outstanding in the ordinary course of its trading;
|
(c) |
any lien on the Ship for salvage or general average; and
|
(d) |
any other lien on the Ship arising by operation of law for claims incurred in the ordinary course of the operation, repair or maintenance of the Ship and which are outstanding for not longer than thirty (30) days or for an aggregate amount not exceeding the Major Casualty Amount.
|
(a) |
granted by the Finance Documents; or
|
(b) |
a Permitted Maritime Lien; or
|
(c) |
approved by the Majority Lenders.
|
(a) |
its Original Jurisdiction;
|
(b) |
any jurisdiction where any Charged Property owned by it is situated;
|
(c) |
any jurisdiction where it conducts its business; and
|
(d) |
any jurisdiction whose laws govern the perfection of any of the Security Documents entered into by it.
|
(a) |
the First Repayment Date;
|
(b) |
each of the dates falling at intervals of three Months thereafter up to but not including the Final Repayment Date; and
|
(c) |
the Final Repayment Date.
|
(a) |
is listed on any Sanctions List (whether designated by name or by reason of being included in a class of person) or otherwise a target of Sanctions;
|
(b) |
is domiciled, registered as located or having its main place of business in, or is incorporated under the laws of or, such country or territory which is, or whose government is, subject to Sanctions broadly prohibiting dealings with such government, country or territory;
|
(c) |
is directly or indirectly owned by or controlled by a person referred to in (a) and/or (b) above; or
|
(d) |
owns or controls a person referred to in (a) and/or (b) above.
|
(a) |
the United States of America;
|
(b) |
the United Nations Security Council;
|
(c) |
the United Kingdom;
|
(d) |
the European Union or any of its member states;
|
(e) |
Monaco;
|
(f) |
any country to which any Obligor or any Affiliate of any of them is bound; or
|
(g) |
the respective governmental institutions and agencies of any of the foregoing, including without limitation, the Office of Foreign Assets Control of the US Department of Treasury (OFAC), the United States Department of State, Her Majesty's Treasury (HMT) and Service d' Information et de Contrôle sur les Circuits Financiers (together
Sanctions Authorities
).
|
(a) |
the Original Security Documents; and
|
(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 Transaction Security expressed to be granted in favour of the Security Agent as trustee for the Finance Parties and all proceeds of that Transaction Security;
|
(b) |
all obligations expressed to be undertaken by any Obligor to pay amounts in respect of the Secured Liabilities to the Security Agent as trustee for the Finance Parties and secured by the Transaction Security together with all representations and warranties expressed to be given by an Obligor in favour of the Security Agent as trustee for the Finance Parties; and
|
(c) |
any other amounts or property, whether rights, entitlements, choses in action or otherwise, actual or contingent, which the Security Agent is required by the terms of the Finance Documents to hold as trustee on trust for the Finance Parties.
|
(a) |
directly or indirectly controlled by such person; or
|
(b) |
of whose dividends or distributions on ordinary voting share capital such person is beneficially entitled to receive more than 50 per cent,
|
(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, theft, condemnation, capture, seizure, arrest or detention for more than 90 days or in the case of piracy for more than 180 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 Ship 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 Ship 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 Ship'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, theft, condemnation, capture, seizure, arrest or detention, the date 90 days after the date upon which it happened or in the case of piracy, the date falling 180 days after the date it happened.
|
(a) |
the date 180 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) |
each of the Finance Documents;
|
(b) |
each Building Contract Document; and
|
(c) |
each Charter Document.
|
(a) |
the proposed Transfer Date specified in the Transfer Certificate; and
|
(b) |
the date on which the Agent executes the Transfer Certificate.
|
(a) |
a Borrower which is resident for tax purposes in the US; or
|
(b) |
an Obligor some or all of whose payments under the Finance Documents are from sources within the US 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 or Monaco in substitution for, or levied in addition to, such tax referred to in paragraph (a) above, or imposed elsewhere.
|
(a) |
in relation to any Bail-In Legislation described in the EU Bail-In Legislation Schedule from time to time, the powers described as such in relation to that Bail-In Legislation in the EU Bail-In Legislation Schedule; and
|
(b) |
in relation to any other applicable Bail-In Legislation:
|
(i) |
any powers under that Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers; and
|
(ii) |
any similar or analogous powers under that Bail-In Legislation.
|
1.2 |
Construction
|
(a) |
Unless a contrary indication appears, a reference in any of the Finance Documents to:
|
(i) |
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;
|
(ii) |
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;
|
(iii) |
words importing the plural shall include the singular and vice versa;
|
(iv) |
a time of day are to London time;
|
(v) |
any person includes its successors in title, permitted assignees or transferees;
|
(vi) |
a document in agreed form means:
|
(A) |
where a Finance Document has already been executed by all of the relevant parties, such Finance Document in its executed form;
|
(B) |
prior to the execution of a Finance Document, the form of such Finance Document separately agreed in writing between the Agent and the Borrower as the form in which that Finance Document is to be executed or another form approved at the request of the Borrower or, if not so agreed or approved, is in the form specified by the Agent;
|
(vii) |
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
approved
means approved in writing by the Agent (on such conditions as the Agent may impose) and
approval
and
approve
shall be construed accordingly;
|
(viii) |
assets
includes present and future properties, revenues and rights of every description;
|
(ix) |
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;
|
(x) |
control
of an entity means:
|
(A) |
the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to:
|
(1) |
cast, or control the casting of, more than 50 per cent of the maximum number of votes that might be cast at a general meeting of that entity; or
|
(2) |
appoint or remove all, or the majority, of the directors or other equivalent officers of that entity; or
|
(3) |
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; or
|
(B) |
the holding beneficially of more than 50 per cent 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);
|
(xi) |
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;
|
(xii) |
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 a.m. 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
);
|
(xiii) |
a
government entity
means any government, state or agency of a state;
|
(xiv) |
a
group of Lenders
or a
group of Finance Parties
includes all the Lenders or (as the case may be) all the Finance Parties;
|
(xv) |
a
guarantee
means (other than in clause 18
(Guarantee and indemnity)
) 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;
|
(xvi) |
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;
|
(xvii) |
an
obligation
means any duty, obligation or liability of any kind;
|
(xviii) |
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
|
(xix) |
pay
or
repay
in clause 30
(Business restrictions)
includes by way of set-off, combination of accounts or otherwise;
|
(xx) |
a
person
includes any individual, firm, company, corporation, government entity or any association, trust, joint venture, consortium, partnership or other entity (whether or not having separate legal personality);
|
(xxi) |
a
regulation
includes any regulation, rule, official directive, request or guideline (whether or not having the force of law but if not having the force of law, one with which a person habitually complies) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation and, in relation to any Lender, includes (without limitation) any Basel II Regulation or Basel III Regulation applicable to that Lender;
|
(xxii) |
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;
|
(xxiii) |
trustee
,
fiduciary
and
fiduciary duty
has in each case the meaning given to such term under applicable law;
|
(xxiv) |
(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; and
|
(xxv) |
a provision of law is a reference to that provision as amended or re-enacted.
|
(b) |
The determination of the extent to which a rate is "
for a period equal in length
" to an Interest Period shall disregard any inconsistency arising from the last day of that Interest Period being determined pursuant to the terms of this Agreement.
|
(c) |
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.
|
(d) |
Section, clause and Schedule headings are for ease of reference only.
|
(e) |
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.
|
(f) |
A Default is continuing if it has not been remedied or waived.
|
1.3 |
Currency symbols and definitions
|
1.4 |
Third party rights
|
(a) |
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 enjoy the benefit of any term of the relevant Finance Document.
|
(b) |
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).
|
(c) |
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.
|
1.5 |
Finance Documents
|
1.6 |
Conflict of documents
|
2 |
The Facility
|
2.1 |
The Facility
|
2.2 |
Finance Parties' rights and obligations
|
(a) |
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.
|
(b) |
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.
|
(c) |
A Finance Party may, except as otherwise stated in the Finance Documents, separately enforce its rights under the Finance Documents.
|
2.3 |
Reduction of Commitments on Utilisation Date
|
(a) |
On the Utilisation Date, the Total Commitments shall be reduced if and to the extent necessary to ensure that the Total Commitments do not exceed the amount in dollars which is equal to 72.5% of the market value of the Ship, as determined in accordance with the valuations obtained under Part 3 of Schedule 3
(Conditions precedent on Delivery)
.
|
(b) |
Any reduction under paragraph (a) above shall be applied in reducing the Commitments of the Lenders rateably.
|
3 |
Purpose
|
3.1 |
Purpose
|
3.2 |
Use of Commitment
|
3.3 |
Monitoring
|
4 |
Conditions of Utilisation
|
4.1 |
Initial conditions precedent
|
4.2 |
Conditions precedent on Delivery
|
4.3 |
Notice of satisfaction of conditions
|
4.4 |
Further conditions precedent
|
(a) |
on the date of the Utilisation Request and on the proposed Utilisation Date, no Default is continuing or would result from the proposed Utilisation;
|
(b) |
on the date of the Utilisation Request and on the proposed Utilisation Date, all of the representations set out in clause 19
(Representations)
(except the Ship Representations) are true; and
|
(c) |
where the proposed Utilisation Date is to be the first day of the Mortgage Period, the Ship Representations are true on the proposed Utilisation Date.
|
4.5 |
Waiver of conditions precedent
|
5 |
Utilisation
|
5.1 |
Delivery of a Utilisation Request
|
5.2 |
Completion of a Utilisation Request
|
(a) |
A Utilisation Request is irrevocable and will not be regarded as having been duly completed unless:
|
(i) |
the proposed Utilisation Date is a Business Day falling on or before the Last Availability Date;
|
(ii) |
the currency and amount of the Utilisation comply with clause 5.3
(Currency and amount)
;
|
(iii) |
the proposed Interest Period complies with clause 10
(Interest Periods)
; and
|
(iv) |
it identifies the purpose for the Utilisation and that purpose complies with clause 3
(Purpose).
|
(b) |
Only one Utilisation Request may be made.
|
(c) |
The Commitment may be borrowed in a single Utilisation.
|
5.3 |
Currency and amount
|
(a) |
The currency specified in a Utilisation Request must be dollars.
|
(b) |
Only one Utilisation Request may be made.
|
(c) |
The amount of the proposed Utilisation must not exceed the amount of the Total Commitments.
|
5.4 |
Lenders' participation
|
(a) |
If the conditions set out in this Agreement have been met, each Lender shall make its participation in the Loan available by the Utilisation Date through its Facility Office.
|
(b) |
The amount of each Lender's participation in the Loan will be equal to the proportion borne by its Available Commitment to the Available Facility immediately prior to making the Loan.
|
(c) |
The Agent shall promptly notify each Lender of the amount of the Loan and the amount of its participation in the Loan, in each case by 11:00 a.m. on the relevant Quotation Day.
|
(d) |
The Agent shall pay all amounts received by it in respect of the Loan (and its own participation in it, if any) to the Borrower or for its account or the Builder, in each case in accordance with the instructions contained in the Utilisation Request.
|
6 |
Repayment
|
6.1 |
Repayment
|
6.2 |
Scheduled repayment of Facility
|
(a) |
To the extent not previously reduced, the Loan shall be repaid by instalments on each Repayment Date by the amount specified below (as revised by clause 6.3
(Adjustment of scheduled repayments)
):
|
Repayment Date
|
Amount $
|
First
|
325,000
|
Second
|
325,000
|
Third
|
325,000
|
Fourth
|
325,000
|
Fifth
|
325,000
|
Sixth
|
325,000
|
Seventh
|
325,000
|
Eighth
|
325,000
|
Ninth
|
325,000
|
Tenth
|
325,000
|
Eleventh
|
325,000
|
Twelfth
|
325,000
|
Thirteenth
|
325,000
|
Fourteenth
|
325,000
|
Fifteenth
|
325,000
|
Sixteenth
|
325,000
|
Seventeenth
|
325,000
|
Eighteenth
|
325,000
|
Nineteenth
|
325,000
|
Twentieth
|
17,325,000
|
TOTAL
|
23,500,000
|
(b) |
The twentieth instalment referred to above, comprises two parts, a repayment instalment in the amount of $325,000 and a balloon instalment in the amount of $17,000,000 (the
Balloon Instalment
).
|
(c) |
On the Final Repayment Date (without prejudice to any other provision of this Agreement), the Loan shall be repaid in full.
|
6.3 |
Adjustment of scheduled repayments
|
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 Borrower, the Available Commitment of that Lender will be immediately cancelled; and
|
(c) |
to the extent that the Lender's participation has not been assigned pursuant to clause 7.7
(Replacement of Lender)
, the Borrower shall repay that Lender's participation in the Loan on the last day of the Interest Period occurring after the Agent has notified the Borrower 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) and that Lender's corresponding Commitment shall be cancelled in the amount of the participation repaid.
|
7.2 |
Additional Minimum Value prepayment
|
(a) |
Subject to paragraph (b) below:
|
(i) |
if on a Repayment Date the Security Value is equal to or less than the Additional Minimum Value, any money which is at that Repayment Date (but after payment of the relevant repayment instalment payable under clause 6.2 (
Scheduled repayment of Facility
) together with interest due on such Repayment Date and any other amounts owed to the Lenders under the Finance Documents at that time) in excess of the Minimum Liquidity required under clause 21.5
(Minimum Liquidity)
together with an amount equal to $300,000 standing to the credit of the Operating Account at that time, shall be applied by the Agent on such Repayment Date (and the Borrower instructs hereunder the Agent to make such application) in or towards reduction of the Balloon Instalment; or
|
(ii) |
if at any relevant time, the Security Value is greater than the Additional Minimum Value and payment of any dividend is to be made under clause 30.13
(Distributions and other payments)
at the time, the Borrower shall make a prepayment of the Loan on a Repayment Date immediately before the payment of such dividend in an amount equal to the amount of such dividend. Such prepayment shall be applied in reduction of the Balloon Instalment.
|
(b) |
Any prepayment of the Loan under paragraph (a) above shall be made in a minimum amount of $10,000 and a multiple of $10,000 and the aggregate amount of any such prepayments throughout the Facility Period shall not exceed $1,300,000.
|
7.3 |
Voluntary cancellation
|
7.4 |
Voluntary prepayment
|
7.5 |
Right of cancellation and prepayment in relation to a single Lender
|
(a) |
If:
|
(i) |
any sum payable to any Lender by an Obligor is required to be increased under clause 13.2
(Tax gross-up)
; or
|
(ii) |
any Lender claims indemnification from the Borrower under clause 13.3
(Tax indemnity)
or clause 14.1
(Increased costs)
,
|
(b) |
On receipt of a notice referred to in paragraph (a) above, the Commitment of that Lender shall immediately be reduced to zero.
|
(c) |
On the last day of each Interest Period which ends after the Borrower has given notice under paragraph (a) above in relation to a Lender (or, if earlier, the date specified by the Borrower in that notice), the Borrower shall repay that Lender's participation in the Loan together with all interest and other amounts accrued under the Finance Documents which is then owing to it.
|
7.6 |
Right of cancellation in relation to a Defaulting Lender
|
(a) |
If any Lender becomes a Defaulting Lender, the Borrower may, at any time whilst the Lender continues to be a Defaulting Lender give the Agent 15 Business Days' notice of cancellation of the Available Commitment of that Lender.
|
(b) |
On such notice becoming effective, the Available Commitment of the Defaulting Lender shall immediately be reduced to zero and the Agent shall as soon as practicable after receipt of such notice, notify all the Lenders.
|
7.7 |
Replacement of Lender
|
(a) |
If:
|
(i) |
the Borrower becomes obliged to repay any amount in accordance with clause 7.1
(Illegality)
to any Lender; or
|
(ii) |
any of the circumstances set out in paragraph (a) of clause 7.5 (
Right of cancellation and prepayment in relation to a single Lender)
apply to a Lender,
|
(A) |
the outstanding principal amount of such Lender's participation in the Loan;
|
(B) |
all accrued interest owing to such Lender;
|
(C) |
the Break Costs which would have been payable to such Lender pursuant to clause 11.5 (
Break Costs
) had the Borrower prepaid in full that Lender's participation in the Loan on the date of the assignment; and
|
(D) |
all other amounts payable to that Lender under the Finance Documents on the date of the assignment.
|
(b) |
The replacement of a Lender pursuant to this clause 7.7 shall be subject to the following conditions:
|
(i) |
the Borrower shall have no right to replace the Agent or the Security Agent;
|
(ii) |
neither the Agent nor any Lender shall have any obligation to find a Replacement Lender;
|
(iii) |
in no event shall the Lender replaced under this clause 7.7 be required to pay or surrender any of the fees received by such Lender pursuant to the Finance Documents; and
|
(iv) |
the Lender shall only be obliged to assign its rights pursuant to paragraph (a) 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 assignment.
|
(c) |
A Lender shall perform the checks described in paragraph (b)(iv) above as soon as reasonably practicable following delivery of a notice referred to in paragraph (a) above and shall notify the Agent and the Borrower when it is satisfied that it has complied with those checks.
|
7.8 |
Total Loss
|
(a) |
the Total Commitments will be reduced to zero; and
|
(b) |
the Borrower shall prepay the Loan.
|
7.9 |
Mandatory cancellation
|
(a) |
If, at any time:
|
(i) |
the Charter is novated or assigned by the Borrower;
|
(ii) |
the Charter is for any reason and by any method cancelled, terminated or rescinded or is not, or ceases to be, legal, valid, binding and enforceable
|
(iii) |
a competent court or arbitration panel decides that the Charter has been validly cancelled, terminated or rescinded; or
|
(iv) |
the Charter is varied in a way prohibited by any Finance Document; or
|
(v) |
the Charterer becomes subject to any of the events or circumstances described in clause 31.9
(Insolvency)
or clause 31.10
(Insolvency proceedings)
,
|
(A) |
the Agent may, and shall if so directed by the Majority Lenders, by notice to the Borrower with effect from the date 15 days after the giving of such notice (or such later date as may be approved in advance by the Majority Lenders) cancel the Total Commitments; and
|
(B) |
the Borrower shall on the date any such event occurs prepay the Loan in full.
|
7.10 |
Automatic cancellation
|
8 |
Restrictions
|
8.1 |
Notices of cancellation and prepayment
|
8.2 |
Interest and other amounts
|
8.3 |
No reborrowing
|
8.4 |
Prepayment in accordance with Agreement
|
8.5 |
No reinstatement of Commitments
|
8.6 |
Agent's receipt of notices
|
8.7 |
Effect of repayment and prepayment on Commitments
|
8.8 |
Application of cancellations
|
8.9 |
Application of prepayments
|
(a) |
Any prepayment required as a result of a cancellation in full of an individual Lender's Commitment under clause 7.1
(Illegality)
or clause 7.5
(Right of cancellation and prepayment in relation to a single Lender)
shall be applied in prepaying the relevant Lender's participation in the Loan.
|
(b) |
Any other prepayment shall be applied pro rata to each Lender's participation in the Loan.
|
8.10 |
Removal of Lender from security
|
8.11 |
Prepayment fee
|
(a) |
subject to paragraph (b) below, a fee:
|
(i) |
if a prepayment of the Loan is to be made at any time during the period commencing on the Utilisation Date and ending on the date falling twenty four months thereafter (the
Second Anniversary
), in an amount in dollars equal to two per cent (2%) of the amount of the Loan to be so prepaid;
|
(ii) |
if a prepayment of the Loan is to be made at any time during the period commencing on the date after the Second Anniversary and ending on the date falling twelve months after the Second Anniversary (the
Third Anniversary
), in an amount in dollars equal to one per cent (1%) of the amount of the Loan to be so prepaid; and
|
(iii) |
if a prepayment of the Loan is to be made at any time during the period commencing on the date after the Third Anniversary and ending on the date falling twelve months after the Third Anniversary (the
Fourth Anniversary
), in an amount in dollars equal to zero point five per cent (0.5%) of the amount of the Loan to be so prepaid.
|
(b) |
no prepayment fee shall be payable under this clause 8.11 if the Loan is prepaid in full:
|
(i) |
as a result of it being refinanced by Amsterdam Trade Bank N.V. or any of its Affiliates or any syndicate of banks including Amsterdam Trade Bank N.V.; or
|
(ii) |
pursuant to clause 7.1 (
Illegality
); or
|
(iii) |
pursuant to clause 7.2 (Additional Minimum Value prepayment); or
|
(iv) |
pursuant to clause 7.4 (
Voluntary prepayment
) if such voluntary prepayment is made in case no agreement is reached between the Agent and the Borrower under clause 11.3 (
Cost of funds
); or
|
(v) |
pursuant to clause 7.8 (
Total Loss
); or
|
(vi) |
pursuant to clause 7.5 (Right of cancellation and prepayment in relation to a single Lender).
|
9 |
Interest
|
9.1 |
Calculation of interest
|
(a) |
Margin; and
|
(b) |
LIBOR for the relevant Interest Period.
|
9.2 |
Payment of interest
|
9.3 |
Default interest
|
(a) |
If an Obligor fails to pay any amount payable by it under a Finance Document to a Finance Party 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 paragraph (c) below, is 2
per cent per annum 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).
|
(b) |
Any interest accruing under this clause 9.3 shall be immediately payable by the Obligor on demand by the Agent.
|
(c) |
If any overdue amount consists of all or part of the Loan (or any relevant part of it) 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:
|
(i) |
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 or the relevant part of it; and
|
(ii) |
the rate of interest applying to the overdue amount during that first Interest Period shall be 2 per cent per annum higher than the rate which would have applied if the overdue amount had not become due.
|
(d) |
Default interest payable under this clause 9.3 (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.
|
9.4 |
Notification of rates of interest
|
(a) |
The Agent shall promptly notify the Lenders and the Borrower of the determination of a rate of interest under this Agreement.
|
(b) |
The Agent shall promptly notify the Borrower of each Funding Rate relating to the Loan (or any relevant part of it).
|
10 |
Interest Periods
|
10.1 |
Interest Periods
|
(a) |
The first Interest Period for the Loan shall have a duration of three months. Each subsequent Interest Period for the Loan shall also have a duration of three months.
|
(b) |
The first Interest Period for the Loan shall start on the Utilisation Date and each subsequent Interest Period for the Loan shall start on the last day of its preceding Interest Period.
|
(c) |
No Interest Period shall extend beyond the Final Repayment Date.
|
10.2 |
Interest Periods overrunning Repayment Dates
|
10.3 |
Non-Business Days
|
11
|
Changes to the calculation of interest
|
11.1
|
Unavailability of Screen Rate
|
(a) |
If no Screen Rate is available for LIBOR for an Interest Period, LIBOR shall be the Interpolated Screen Rate for a period equal in length to that Interest Period.
|
(b) |
If no Screen Rate is available for LIBOR for:
|
(i) |
dollars; or
|
(ii) |
the relevant Interest Period and it is not possible to calculate the Interpolated Screen Rate,
|
11.2 |
Market disruption
|
11.3 |
Cost of funds
|
(a) |
If this clause 11.3 applies, the rate of interest on each Lender's share of the Loan or relevant part of it for the Interest Period shall be the percentage rate per annum which is the sum of:
|
(i) |
the Margin;
|
(ii) |
the rate notified to the Agent by that Lender as soon as practicable and in any event within ten Business Days of the first day of that Interest Period (or, if earlier, on the date falling ten Business Days before the date on which 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 the relevant Lender of funding its participation in the Loan or relevant part of it from whatever source it may reasonably select.
|
(b) |
If this clause 11.3 applies and the Agent or the Borrower so require, the Agent and the Borrower shall enter into negotiations (for a period of not more than thirty days) with a view to agreeing a substitute basis for determining the rate of interest.
|
(c) |
Any alternative basis agreed pursuant to paragraph (b) above shall, with the prior consent of all the Lenders and the Borrower, be binding on all Parties.
|
(d) |
If this clause 11.3 applies pursuant to clause 11.2
(Market disruption)
and:
|
(i) |
a Lender's Funding Rate is less than LIBOR; or
|
(ii) |
a Lender does not supply a quotation by the time specified in paragraph (a)(ii) above,
|
11.4 |
Notification to Borrower
|
11.5 |
Break Costs
|
(a) |
The Borrower shall, within five 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 any relevant part of it or Unpaid Sum being paid by the Borrower on a day other than the last day of an Interest Period for the Loan or that relevant part of it or Unpaid Sum.
|
(b) |
Each Lender shall, as soon as reasonably practicable after a demand by the Agent, provide a certificate confirming the amount and basis of calculation of its Break Costs for any Interest Period in which they accrue.
|
12 |
Fees
|
12.1 |
Commitment commission
|
(a) |
The Borrower shall pay to the Agent (for the account of each Lender) a fee in dollars computed at the rate of 2% per annum on that Lender's Available Commitment calculated from the date of this Agreement (the
start date
).
|
(b) |
The Borrower shall pay the accrued commitment commission on the last day of the period of three Months commencing on the start date, on the last day of each successive period of three Months, on the Last Availability Date and, if cancelled in full, on the cancelled amount of the relevant Lender's Available Commitment at the time the cancellation is effective.
|
(c) |
No commitment fee is payable to the Agent (for the account of a Lender) on any Available Commitment of that Lender for any day on which that Lender is a Defaulting Lender.
|
12.2 |
Arrangement fee
|
13 |
Tax gross-up and indemnities
|
13.1 |
Definitions
|
(a) |
In this Agreement:
|
(b) |
Unless a contrary indication appears, in this clause 13 a reference to "
determines
" or "
determined
" means a determination made in the absolute discretion of the person making the determination.
|
13.2 |
Tax gross-up
|
(a) |
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.
|
(b) |
The Borrower shall, promptly upon 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 Borrower and that Obligor.
|
(c) |
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.
|
(d) |
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.
|
(e) |
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 that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.
|
13.3 |
Tax indemnity
|
(a) |
Each Obligor who is a Party shall (within five 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.
|
(b) |
Paragraph (a) above shall not apply:
|
(i) |
with respect to any Tax assessed on a Finance Party:
|
(A) |
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
|
(B) |
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,
|
(ii) |
to the extent a loss, liability or cost:
|
(A) |
is compensated for by an increased payment under clause 13.2 (
Tax gross-up
); or
|
(B) |
relates to a FATCA Deduction required to be made by a Party or any Obligor which is not a Party.
|
(c) |
A Protected Party making, or intending to make a claim under paragraph (a) 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 Borrower.
|
(d) |
A Protected Party shall, on receiving a payment from an Obligor under this clause 13.3, notify the Agent.
|
13.4 |
Indemnities on after Tax basis
|
(a) |
If and to the extent that any sum payable to any Protected Party by the Borrower 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 Borrower 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.
|
(b) |
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 Borrower to any person other than that Protected Party, shall be treated as taxable in the hands of the Protected Party, the Borrower 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.
|
(c) |
For the purposes of paragraphs (a) and (b) above, 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.
|
13.5 |
Stamp taxes
|
13.6 |
Value added tax
|
(a) |
All amounts 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 any supply for VAT purposes are deemed to be exclusive of any VAT which is chargeable on that supply, and accordingly, subject to paragraph (b) below, if VAT is or becomes chargeable on any supply made by any Finance Party to any party under a Finance Document, and such Finance Party is required to account to the relevant tax authority for the VAT, that party must pay to such 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 the VAT (and such Finance Party must promptly provide an appropriate VAT invoice to that party).
|
(b) |
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 that supply to the Supplier (rather than being required to reimburse or indemnify the Recipient in respect of that consideration):
|
(i) |
(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 (i) 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
|
(ii) |
(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.
|
(c) |
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 in respect of such VAT from the relevant tax authority.
|
(d) |
Any reference in this clause 13.6 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).
|
(e) |
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.
|
13.7 |
FATCA Information
|
(a) |
Subject to paragraph (c) below, each Party shall, within ten Business Days of a reasonable request by another Party:
|
(i) |
confirm to that other Party whether it is:
|
(A) |
a FATCA Exempt Party; or
|
(B) |
not a FATCA Exempt Party;
|
(ii) |
supply to that other Party such forms, documentation and other information relating to its status under FATCA as that other Party reasonably requests for the purposes of that other Party's compliance with FATCA; and
|
(iii) |
supply to that other Party such forms, documentation and other information relating to its status as that other Party reasonably requests for the purposes of that other Party's compliance with any other law, regulation, or exchange of information regime.
|
(b) |
If a Party confirms to another Party pursuant to paragraph (a)(i) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not or has ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly.
|
(c) |
Paragraph (a) above shall not oblige any Finance Party to do anything, and paragraph (a)(iii) above shall not oblige any other Party to do anything, which would or might in its reasonable opinion constitute a breach of:
|
(i) |
any law or regulation;
|
(ii) |
any fiduciary duty; or
|
(iii) |
any duty of confidentiality.
|
(d) |
If a Party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with paragraphs (a)(i) or (a)(ii) above (including, for the avoidance of doubt, where paragraph (c) above applies), then such Party shall be treated for the purposes of the Finance Documents (and payments under them) as if it is not a FATCA Exempt Party until such time as the Party in question provides the requested confirmation, forms, documentation or other information.
|
(e) |
If the Borrower is a US Tax Obligor or the Agent reasonably believes that its obligations under FATCA or any other applicable law or regulation require it, each Lender shall, within ten Business Days of:
|
(i) |
where the Borrower is a US Tax Obligor and the relevant Lender is an Original Lender, the date of this Agreement;
|
(ii) |
where the Borrower is a US Tax Obligor on a date on which any other Lender becomes a Party as a Lender, that date; or
|
(iii) |
where the Borrower is not a US Tax Obligor, the date of a request from the Agent,
|
(A) |
a withholding certificate on Form W-8, Form W-9 or any other relevant form; or
|
(B) |
any withholding statement or other document, authorisation or waiver as the Agent may require to certify or establish the status of such Lender under FATCA or that other law or regulation.
|
(f) |
The Agent shall provide any withholding certificate, withholding statement, document, authorisation or waiver it receives from a Lender pursuant to paragraph (e) above to the Borrower.
|
(g) |
If any withholding certificate, withholding statement, document, authorisation or waiver provided to the Agent by a Lender pursuant to paragraph (e) above is or becomes materially inaccurate or incomplete, that Lender shall promptly update it and provide such updated withholding certificate, withholding statement, document, authorisation or waiver to the Agent unless it is unlawful for the Lender to do so (in which case the Lender shall promptly notify the Agent). The Agent shall provide any such updated withholding certificate, withholding statement, document, authorisation or waiver to the Borrower.
|
(h) |
The Agent may rely on any withholding certificate, withholding statement, document, authorisation or waiver it receives from a Lender pursuant to paragraphs (e) or (g) above without further verification. The Agent shall not be liable for any action taken by it under or in connection with paragraphs (e), (f) or (g) above.
|
13.8 |
FATCA Deduction
|
(a) |
Each Party may make any FATCA Deduction it is required to make by FATCA, and any payment required in connection with that FATCA Deduction, and no Party shall be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction.
|
(b) |
Each Party shall promptly, upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate or the basis of such FATCA Deduction), notify the Party to whom it is making the payment and, in addition, shall notify the Borrower and the Agent and the Agent shall notify the other Finance Parties.
|
14 |
Increased Costs
|
14.1 |
Increased costs
|
(a) |
Subject to clause 14.3
(Exceptions)
, the Borrower shall, within five 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:
|
(i) |
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; and/or
|
(ii) |
is a Basel III Increased Cost.
|
(b) |
In this Agreement
Increased Costs
means:
|
(i) |
a reduction in the rate of return from the Facility or on a Finance Party's (or its Affiliate's) overall capital;
|
(ii) |
an
additional or increased cost; or
|
(iii) |
a
reduction of any amount due and payable under any Finance Document,
|
14.2 |
Increased cost claims
|
(a) |
A Finance Party intending to make a claim pursuant to clause 14.1
(Increased costs)
shall notify the Agent of the event giving rise to the claim, following which the Agent shall promptly notify the Borrower.
|
(b) |
Each Finance Party shall, as soon as practicable after a demand by the Agent and/or the Borrower through the Agent, provide a certificate confirming the amount of its Increased Costs and the basis of calculation of such amount.
|
14.3 |
Exceptions
|
(a) |
Clause 14.1
(Increased costs)
does not apply to the extent any Increased Cost is:
|
(i) |
attributable to a Tax Deduction required by law to be made by an Obligor;
|
(ii) |
attributable to a FATCA Deduction required to be made by a Party;
|
(iii) |
compensated for by clause 13.3
(Tax indemnity)
(or would have been compensated for under clause 13.3
(Tax indemnity)
but was not so compensated solely because any of the exclusions in paragraph (b) of clause 13.3
(Tax indemnity)
applied);
|
(iv) |
compensated for by the payment to a Lender under clause 15.10 (
Mandatory Cost
); and
|
(v) |
attributable to the wilful breach by the relevant Finance Party or its Affiliates of any law or regulation.
|
(b) |
In paragraph (a) above, a reference to a Tax Deduction has the same meaning given to the term in clause 13.1
(Definitions)
.
|
15 |
Other indemnities
|
15.1 |
Currency indemnity
|
(a) |
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:
|
(i) |
making or filing a claim or proof against that Obligor; and/or
|
(ii) |
obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,
|
(b) |
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.
|
15.2 |
Other indemnities
|
(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 39
(Sharing among the Finance Parties)
;
|
(c) |
funding, or making arrangements to fund, its participation in a Utilisation requested by the Borrower 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 Borrower.
|
15.3 |
Indemnity to the Agent and the Security Agent
|
(a) |
any and all Losses (together with any applicable VAT) incurred by the Agent or the Security Agent
(acting reasonably) as a result of:
|
(i) |
investigating any event which it reasonably believes is a Default;
|
(ii) |
acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised;
|
(iii) |
instructing lawyers, accountants, tax advisers, insurance consultants, ship managers, valuers, surveyors or other professional advisers or experts as permitted under the Finance Documents; or
|
(iv) |
any action taken by the Agent or the Security Agent
or any of its or their
representatives, agents or contractors in connection with any powers conferred by any Security Document to remedy any breach of any Obligor's obligations under the Finance Documents, and
|
(b) |
any and all Losses (including, without limitation, in respect of liability for negligence or any other category of liability whatsoever) (together with any applicable VAT) 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 misconduct) (or, in the case of any cost, loss or liability pursuant to clause 40.11
(Disruption to payment systems etc.)
notwithstanding the Agent's or the Security Agent's 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.
|
15.4 |
Indemnity concerning security
|
(a) |
The Borrower shall (or shall procure that another Obligor will) promptly indemnify each Indemnified Person against any and all Losses (together with any applicable VAT) incurred by it as a result of:
|
(i) |
any failure by the Borrower to comply with its obligations under clause 17
(Costs and expenses)
or any similar provision in any other Finance Document;
|
(ii) |
acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised;
|
(iii) |
the taking, holding, protection or enforcement of the Transaction Security;
|
(iv) |
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 and each Delegate by the Finance Documents or by law (otherwise, in each case, than by reason of the relevant Security Agent's and/or other Finance Party's, Receiver's or Delegate's gross negligence or wilful misconduct);
|
(v) |
any default by any Obligor in the performance of any of the obligations expressed to be assumed by it in the Finance Documents;
|
(vi) |
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 misconduct of that Indemnified Person);
|
(vii) |
instructing lawyers, accountants, tax advisers, insurance consultants, ship managers, valuers, surveyors or other professional advisers or experts as permitted under the Finance Documents; or
|
(viii) |
(in the case of the Security Agent and/or any other Finance Party, any Receiver and any Delegate) acting as Security Agent and/or as holder of any of the Transaction Security, Receiver or Delegate under the Finance Documents or which otherwise relates to the Charged Property (otherwise, in each case, than by reason of the relevant Security Agent's and/or other Finance Party's, Receiver's or Delegate's gross negligence or wilful misconduct).
|
(b) |
The Security Agent may, in priority to any payment to the other Finance Parties, indemnify itself out of the Charged Property in respect of, and pay and retain, all sums necessary to give effect to the indemnity in this clause 15.4 and shall have a lien on the Transaction Security and the proceeds of the enforcement of the Transaction Security for all moneys payable to it.
|
15.5 |
Continuation of indemnities
|
15.6 |
Third Parties Act
|
(a) |
Each Indemnified Person may rely on the terms of clause 15.4
(Indemnity concerning security)
and clauses 13
(Tax gross-up and indemnities)
and 15.7
(Interest)
insofar as it relates to interest on, or the calculation of, any amount demanded by that Indemnified Person under clause 15.4
(Indemnity concerning security)
, subject to clause 1.4
(Third party rights)
and the provisions of the Third Parties Act.
|
(b) |
Where an Indemnified Person (other than a Finance Party) (the
Relevant Beneficiary
) who is:
|
(i) |
appointed by a Finance Party under the Finance Documents;
|
(ii) |
an Affiliate of any such person or that Finance Party; or
|
(iii) |
an officer, director, employee, adviser, representative or agent of any of the above persons or that Finance Party,
|
(A) |
the Borrower shall at the same time as the relevant Third Party Claim is due to the Relevant Beneficiary pay to that Finance Party a sum in the amount of that Third Party Claim;
|
(B) |
payment of such sum to that Finance Party shall, to the extent of that payment, satisfy the corresponding obligations of the Borrower to pay the Third Party Claim to the Relevant Beneficiary; and
|
(C) |
if the Borrower pays the Third Party Claim direct to the Relevant Beneficiary, such payment shall, to the extent of that payment, satisfy the corresponding obligations of the Borrower to that Finance Party under sub-paragraph (A) above.
|
15.7 |
Interest
|
15.8 |
Exclusion of liability
|
15.9 |
Sanctions
|
(a) |
Each Obligor shall, within five Business Days of demand by a Finance Party, indemnify such Finance Party against any cost, loss or liability incurred by it as a result of any civil penalty or fine against, and all costs and expenses (including counsel fees and disbursements) incurred in connection with the defence thereof by, the Agent or the relevant Finance Party as a result of conduct of any Obligor or any of its partners, directors, officers, employees, agents or advisors, that violates any applicable Sanctions.
|
(b) |
The indemnity in clause 15.9(a) shall cover any Losses incurred by each Finance Party in any jurisdiction arising or asserted under or in connection with any law relating to any applicable Sanctions.
|
15.10 |
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),
|
16 |
Mitigation by the Lenders
|
16.1 |
Mitigation
|
(a) |
Each Finance Party shall, in consultation with the Borrower, take all reasonable steps to mitigate any circumstances which arise and which would result in the Facility ceasing to be available or any amount becoming payable under or pursuant to, or cancelled pursuant to, any of clause 7.1
(Illegality)
, clause 13
(Tax gross-up and indemnities)
, clause 14
(Increased costs)
or clause 15.10
(Mandatory Cost)
including (but not limited to) assigning its rights under the Finance Documents to another Affiliate or Facility Office.
|
(b) |
Paragraph (a) above does not in any way limit the obligations of any Obligor under the Finance Documents.
|
16.2 |
Limitation of liability
|
(a) |
The Borrower 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 16.1
(Mitigation)
.
|
(b) |
A Finance Party is not obliged to take any steps under clause 16.1
(Mitigation)
if, in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it.
|
17 |
Costs and expenses
|
17.1 |
Transaction expenses
|
(a) |
this Agreement and any other documents referred to in this Agreement and the 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 27
(Minimum security value)
; or
|
(c) |
any Security Interest expressed or intended to be granted by a Finance Document.
|
17.2 |
Amendment costs
|
(a) |
an Obligor requests an amendment, waiver or consent; or
|
(b) |
an amendment is required pursuant to clause 40.10 (
Change of currency
),
|
17.3 |
Enforcement, preservation and other costs
|
(a) |
the enforcement of, or the preservation of any rights under, any Finance Document and the Transaction Security 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 27
(Minimum security value)
; or
|
(c) |
any inspection carried out under clause 25.9
(Inspection and notice of dry-docking)
or any survey carried out under clause 25.17 (
Survey report
) at the times provided under that clause that the relevant costs must be borne by the Borrower.
|
18 |
Guarantee and indemnity
|
18.1 |
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 (other than the Charterer or CSM) 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 if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation indemnify that Finance Party immediately on demand against any cost, loss or liability it incurs as a result of another Obligor (other than the Charterer or CSM) not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by such Obligor under any Finance Document on the date when it would have been due. The amount payable by the Guarantor under this indemnity will not exceed the amount the Guarantor would have had to pay under this clause 18.1 if the amount claimed had been recoverable on the basis of a guarantee.
|
18.2 |
Continuing guarantee
|
18.3 |
Reinstatement
|
18.4 |
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
|
(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.
|
18.5 |
Guarantor intent
|
18.6 |
Immediate recourse
|
18.7 |
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 18.
|
18.8 |
Deferral of Guarantor's rights
|
(a) |
Until all amounts which may be or become payable by the Obligors (other than the Charterer or CSM) under or in connection with the Finance Documents have been irrevocably paid in full and unless the Agent otherwise directs, the Guarantor will not exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents or by reason of any amount being payable, or liability arising, under this clause 18:
|
(i) |
to be indemnified by another Obligor;
|
(ii) |
to claim any contribution from any other guarantor of any Obligor's obligations under the Finance Documents;
|
(iii) |
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;
|
(iv) |
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 this clause 18;
|
(v) |
to exercise any right of set-off against any other Obligor; and/or
|
(vi) |
to claim or prove as a creditor of any other Obligor in competition with any Finance Party.
|
(b) |
If the Guarantor receives any benefit, payment or distribution in relation to such rights it will promptly pay an equal amount to the Agent for application in accordance with clause 40
(Payment mechanics)
. This only applies 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.
|
18.9 |
Additional security
|
19 |
Representations
|
19.1 |
Status
|
(a) |
Each Obligor is a corporation, duly incorporated and validly existing under the law of its Original Jurisdiction.
|
(b) |
Each Obligor has power and authority to own its assets and to carry on its business as it is now being conducted within the scope of its purpose.
|
(c) |
More specifically, CSM has remained at all times in compliance with the terms of the Monaco Law No. 767 of July 8, 1964 concerning the cancellation of authorisations to incorporate limited liability companies, which entails it has not:
|
(i) |
without legitimate cause, remained with no true activity, in conformity with its "statuts" for more than two years;
|
(ii) |
remained without due installation and personnel enabling the normal conduct of its business as authorised by the government of the Principality of Monaco;
|
(iii) |
conducted an activity not in conformity with its "statuts"; or
|
(iv) |
in any manner or for any reason, allowed non declared or non authorised activities to be undertaken or domiciled in its premises knowingly tolerated such,
|
19.2 |
Binding obligations
|
(a) |
the obligations expressed to be assumed by each Obligor in each Transaction Document to which it is, or is to be, a party are or, when entered into by it, will be legal, valid, binding and enforceable obligations; and
|
(b) |
(without limiting the generality of paragraph (a) above) each Security Document to which an Obligor is, or will be, a party, creates or will create the Security Interests which that Security Document purports to create and those Security Interests are or will be valid and effective.
|
19.3 |
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 or its assets,
|
19.4 |
Power and authority
|
(a) |
Each Obligor has the power to enter into, perform and deliver and comply with its obligations under, and has taken all necessary actions to authorise its entry into, performance and delivery of, and compliance with, each Transaction Document to which it is, or is to be, a party and each of the transactions contemplated by those documents.
|
(b) |
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 Transaction Document to which such Obligor is, or is to be, a party.
|
19.5 |
Validity and admissibility in evidence
|
(a) |
All Authorisations required:
|
(i) |
to enable each Obligor lawfully to enter into, exercise its rights and comply with its obligations under each Transaction Document to which it is a party;
|
(ii) |
to make each Transaction Document to which it is a party admissible in evidence in its Relevant Jurisdictions; and
|
(iii) |
to ensure that the Transaction Security has the priority and ranking contemplated in the Security Documents,
|
(b) |
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 is reasonably likely to have a Material Adverse Effect.
|
19.6 |
Governing law and enforcement
|
(a) |
The choice of governing law of any Transaction Document will be recognised and enforced in each Obligor's Relevant Jurisdictions.
|
(b) |
Any judgment obtained in relation to any Transaction Document in the jurisdiction of the governing law of that Transaction Document will be recognised and enforced in the relevant Obligor's Relevant Jurisdictions.
|
19.7 |
No misleading information
|
(a) |
Any factual information contained in the Information Package is true and accurate in all material respects as at the date of the relevant report or document containing the information or (as the case may be) as at the date the information is expressed to be given.
|
(b) |
Any financial projection or forecast contained in the Information Package has been prepared on the basis of recent historical information and on the basis of reasonable assumptions and was fair (as at the date of the relevant report or document containing the projection or forecast) and arrived at after careful consideration.
|
(c) |
The expressions of opinion or intention provided by or on behalf of an Obligor for the purposes of the Information Package were made after careful consideration and (as at the date of the relevant report or document containing the expression of opinion or intention) were fair and based on reasonable grounds.
|
(d) |
No event or circumstance has occurred or arisen and no information has been omitted from the Information Package and no information has been given or withheld that results in the information, opinions, intentions, forecasts or projections contained in the Information Package being untrue or misleading in any material respect.
|
(e) |
For the purposes of this clause 19.7,
Information Package
means any information provided by any Obligor to any of the Finance Parties in connection with the Transaction Documents or the transactions referred to in them.
|
19.8 |
Pari passu ranking
|
19.9 |
Ranking and effectiveness of security
|
(a) |
the Transaction Security has (or will have when the relevant Security Documents have been executed) the priority which it is expressed to have in the Security Documents;
|
(b) |
the Charged Property is not subject to any Security Interest other than Permitted Security Interests; and
|
(c) |
the Transaction Security will constitute perfected security on the assets described in the Security Documents.
|
19.10 |
Centre of main interests and establishments
|
19.11 |
Ownership of Charged Property
|
19.12 |
No insolvency
|
19.13 |
No filing or stamp taxes
|
19.14 |
Deduction of Tax
|
19.15 |
Tax compliance
|
(a) |
No Obligor (other than the Charterer and CSM) is materially overdue in the filing of any Tax returns or overdue in the payment of any amount in respect of Tax exceeding $500,000 (or its equivalent in any other currency).
|
(b) |
No claims or investigations are being, or are reasonably likely to be, made or conducted against any Obligor (other than the Charterer or CSM) with respect to Taxes such that a liability of, or claim against, any Obligor (other than the Charterer or CSM) is reasonably likely to arise for an amount for which adequate reserves have not been provided and which are reasonably expected to have a Material Adverse Effect.
|
(c) |
Each Obligor is resident for Tax purposes only in its Original Jurisdiction.
|
19.16 |
Other Tax matters
|
19.17 |
Pension exposure
|
19.18 |
No Default
|
(a) |
No Default is continuing or is reasonably expected to result from the making of any Utilisation or the entry into, the performance of, or any transaction contemplated by, any Transaction Document.
|
(b) |
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 agreement or instrument which is binding on any Obligor or to which any Obligor's assets are subject which is likely to have a Material Adverse Effect.
|
19.19 |
No proceedings
|
(a) |
No litigation, arbitration or administrative proceedings or investigations of, or before, any court, arbitral body or agency which, if adversely determined, might reasonably be expected to have a Material Adverse Effect has or have (to the best of any Obligor's
|
(b) |
No judgment or order of a court, arbitral tribunal or other tribunal or any order or sanction of any governmental or other regulatory body which is reasonably likely to have a Material Adverse Effect has (to the best of any Obligor's knowledge and belief (having made due and careful enquiry)) been made against any Obligor or any other Group Member.
|
19.20 |
No breach of laws
|
(a) |
No Obligor or other Group Member has breached any law or regulation.
|
(b) |
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 is reasonably expected to have a Material Adverse Effect.
|
19.21 |
Environmental matters
|
(a) |
No Environmental Law applicable to any Fleet Vessel and/or any Obligor or other Group Member has been violated.
|
(b) |
All consents, licences and approvals required under such Environmental Laws have been obtained and are currently in force.
|
(c) |
No Environmental Claim has been made or, to the best of any Obligor's knowledge and belief (having made due and careful enquiry), is threatened or pending against any Obligor or other Group Member or any Fleet Vessel where that claim might have a Material Adverse Effect and there has been no Environmental Incident which has given, or is reasonably expected to give, rise to such a claim.
|
19.22 |
Anti-corruption law
|
19.23 |
Security and Financial Indebtedness
|
(a) |
No Security Interest exists over all or any of the present or future assets of any Obligor in breach of this Agreement.
|
(b) |
No Obligor has any Financial Indebtedness outstanding in breach of this Agreement.
|
19.24 |
Shares
|
(a) |
The shares of the Borrower are fully paid and not subject to any option to purchase or similar rights.
|
(b) |
The Constitutional Documents of the Borrower do not and could not restrict or inhibit any transfer of those shares on creation or enforcement of the Security Documents.
|
(c) |
There are no agreements in force which provide for the issue or allotment of, or grant any person the right to call for the issue or allotment of, any share or loan capital of the Borrower (including any option or right of pre-emption or conversion).
|
19.25 |
Ownership of the Borrower
|
19.26 |
Listing
|
19.27 |
Accounting Reference Date
|
19.28 |
No adverse consequences
|
(a) |
It is not necessary under the laws of the Relevant Jurisdictions of any Obligor:
|
(i) |
in order to enable any Finance Party to enforce its rights under any Finance Document to which it is, or is to be, a party; or
|
(ii) |
by reason of the execution of any Finance Document or the performance by any Obligor of its obligations under any Finance Document,
|
(b) |
No Finance Party is or will be deemed to be resident, domiciled or carrying on business in any Relevant Jurisdiction of any Obligor by reason only of the execution, performance and/or enforcement of any Finance Document.
|
19.29 |
Copies of documents
|
19.30 |
No breach, etc of any Building Contract Document
|
19.31 |
No breach of any Charter Document
|
19.32 |
No immunity
|
19.33 |
Ship status
|
(a) |
registered in the name of the Borrower 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.
|
19.34 |
Ship's employment
|
(a) |
have been delivered, and accepted for service, under the Charter; and
|
(b) |
save for the Charter, be free of any other charter commitment which, if entered into after that date, would require approval under the Finance Documents.
|
19.35 |
Address commission
|
19.36 |
Sanctions and Additional Unacceptable Countries
|
(a) |
No Obligor, nor any of their respective Affiliates nor any of their respective directors, officers, employees, agents or representatives:
|
(i) |
has breached any Sanctions;
|
(ii) |
is a Restricted Person; or
|
(iii) |
has received notice of or is aware of any claim, action, suit, proceeding or investigation against it with respect to Sanctions.
|
(b) |
No proceeds of the Loan:
|
(i) |
shall be made available, directly or indirectly, to or for the benefit of a Restricted Person nor shall they be otherwise directly or indirectly, applied in a manner or for a purpose prohibited by applicable Sanctions; or
|
(ii) |
will be used by any Obligor:
|
(A) |
to finance equipment or sectors under embargo decisions of the United Nations or the World Bank; or
|
(B) |
in breach of the provisions of any Sanctions.
|
(c) |
It is has not been intended that the Ship will enter or trade to any Additional Unacceptable Country.
|
19.37 |
No Money Laundering
|
19.38 |
Times when representations are made
|
(a) |
All of the representations and warranties set out in this clause 19 are deemed to be made on the dates of:
|
(i) |
this Agreement;
|
(ii) |
the Utilisation Request; and
|
(iii) |
the Utilisation.
|
(b) |
The Repeating Representations are deemed to be made on the first day of each Interest Period.
|
(c) |
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 existing at the date the representation or warranty is deemed to be made.
|
20 |
Information undertakings
|
20.1 |
Undertaking to comply
|
20.2 |
Definitions
|
20.3 |
Financial statements
|
(a) |
The Borrower shall supply to the Agent (in sufficient copies for all the Lenders, if the Agent so requests) as soon as the same become available, but in any event within 120 days after the end of each Financial Year (but commencing with the Financial Year ending 31 December 2018):
|
(i) |
the unaudited (or audited if available) financial statements of the Borrower for that Financial Year; and
|
(ii) |
the audited consolidated financial statements of the Guarantor for that Financial Year.
|
(b) |
The Borrower shall supply to the Agent as soon as the same become available, but in any event within 90 days after the end of the first financial half-year of each of its or, as the case may be, the Guarantor's Financial Years (but commencing with the financial half-year ending 31 December 2018):
|
(i) |
the unaudited (or audited if available) financial statements of the Borrower for that financial half-year; and
|
(ii) |
the unaudited (or audited if available) consolidated financial statements of the Guarantor for that financial half-year.
|
20.4 |
Provision and contents of Compliance Certificate
|
(a) |
The Borrower shall supply (i) a Compliance Certificate for the Borrower and the Guarantor and (ii) a performance report relating to the Ship (in the form set out in Schedule 6 (
Form of Semi-annual Vessel Performance Report
)) to the Agent, in each case with each set of Annual Financial Statements and each set of Semi-Annual Financial Statements delivered pursuant to clause 20.3
(Financial statements)
.
|
(b) |
Each Compliance Certificate in respect of the Borrower and the Guarantor shall set out (in reasonable detail) computations as to compliance with clause 21
(Financial covenants)
relevant to each of them and calculations of the Security Value in accordance with clause 27
(Minimum security value)
.
|
(c) |
Each Compliance Certificate shall be signed by a duly authorised signatory of the Guarantor.
|
20.5 |
Requirements as to financial statements
|
(a) |
The Borrower shall procure that each set of Annual Financial Statements and Semi-Annual Financial Statements includes a profit and loss account, a balance sheet and a cashflow statement and that, in addition, each set of Annual Financial Statements of the Borrower shall be audited by the Auditors.
|
(b) |
Each set of financial statements delivered pursuant to clause 20.3
(Financial statements)
shall:
|
(i) |
be prepared in accordance with GAAP; and
|
(ii) |
fairly present, and be certified by a director of the relevant company as fairly presenting, its financial condition and operations as at the date as at which those financial statements were drawn up and, in the case of the Annual Financial Statements (or as the case may be) Semi-Annual Financial Statements if they are audited, shall be accompanied by any letter addressed to the management of the relevant company by the Auditors and accompanying those Annual Financial Statements or (as the case may be) Semi-Annual Financial Statements; and
|
(iii) |
in the case of Annual Financial Statements or (as the case may be) Semi-Annual Financial Statements which are audited, not be the subject of any qualification in the Auditors' opinion.
|
20.6 |
Year-end
|
20.7 |
Information: miscellaneous
|
(a) |
whilst an Event of Default is continuing and as soon as practicable after the time when they are dispatched, copies of all documents dispatched by any Obligor 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 Obligor
|
(c) |
promptly upon becoming aware of them, the details of any judgment or order of a court, arbitral tribunal or other tribunal or any order or sanction of any governmental or other regulatory body which is made against any Obligor or other Group Member and which is reasonably likely to have a Material Adverse Effect;
|
(d) |
promptly upon becoming aware of them, the details of any claim, action, suit, proceeding or investigation with respect to Sanctions against any Obligor or any of its Affiliates or any of its directors, officers, employees, agents or representatives;
|
(e) |
promptly, such information as the Agent or the Security Agent may reasonably require about the Charged Property and compliance of the Obligors with the terms of any Security Documents; and
|
(f) |
promptly on request, such further information regarding the financial condition, assets and operations of any Obligor as any Finance Party through the Agent may reasonably request,
|
20.8 |
Notification of Default
|
(a) |
The Borrower 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).
|
(b) |
Promptly upon a request by the Agent, the Borrower shall supply to the Agent a certificate signed by two of its directors 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).
|
20.9 |
Sufficient copies
|
20.10 |
"Know your customer" checks
|
(a) |
If:
|
(i) |
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;
|
(ii) |
any change in the status of an Obligor or the composition of the shareholders of an Obligor after the date of this Agreement; or
|
(iii) |
a proposed assignment by a Lender of any of its rights under this Agreement to a party that is not already a Lender prior to such assignment,
|
(b) |
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 it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.
|
21 |
Financial covenants
|
21.1 |
Undertaking to comply
|
21.2 |
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,
|
21.3 |
Financial condition
|
(a) |
Leverage ratio
: the ratio of Total Net Debt to Fleet Market Value shall, at all times during and in respect of each Measurement Period, be not higher than 0.75:1.00.
|
(b) |
Minimum liquidity
: at all times the Cash and Cash Equivalents shall not be less than the aggregate of:
|
(i) |
$750,000 multiplied by the number of the Fleet Vessels; and
|
(ii) |
$500,000 multiplied by the number of the Chartered Vessels.
|
21.4 |
Financial testing
|
21.5 |
Minimum Liquidity
|
(a) |
subject to paragraph (b) below, $650,000; or
|
(b) |
$300,000 for as long as the Ship is subject to a Charter or a Subsequent Charter,
|
22 |
General undertakings
|
22.1 |
Undertaking to comply
|
22.2 |
Use of proceeds
|
22.3 |
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 Transaction Documents;
|
(ii) |
ensure the legality, validity, enforceability or admissibility in evidence of any Transaction Document; and
|
(iii) |
carry on its business where failure to do so has, or is reasonably likely to have, a Material Adverse Effect.
|
22.4 |
Compliance with laws
|
22.5 |
Anti-corruption law
|
(a) |
No Obligor shall (and each Obligor shall ensure that no other Group Member will) directly or indirectly use the proceeds of the Facility for any purpose which would breach the Bribery Act 2010, the United States Foreign Corrupt Practices Act of 1977, the Monaco Law no.1.362 of August 3
rd
, 2009 as amended and supplemented or other similar legislation in other jurisdictions.
|
(b) |
Each Obligor shall:
|
(i) |
conduct its businesses in compliance with applicable anti-corruption laws; and
|
(ii) |
maintain policies and procedures designed to promote and achieve compliance with such laws.
|
22.6 |
Bribery and corruption
|
(a) |
No Obligor nor any of its agents, employees, directors or officers has engaged or shall engage (and shall ensure that none of its Affiliates nor any of its agents, employees, directors or officers has engaged or will engage) in any Relevant Jurisdiction in:
|
(i) |
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;
|
(ii) |
Money Laundering or acted in breach of any applicable law relating to Money Laundering; or
|
(iii) |
the Financing of Terrorism.
|
(b) |
Without prejudice to the generality of clause 22.6(a):
|
(i) |
No Obligor nor any of its agents, employees, directors or officers will (and shall ensure that none of its Affiliates nor any of its agents, employees, directors or officers 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, the Monaco Law no.1.362 of August 3
rd
, 2009 as amended and supplemented;
|
(ii) |
each Obligor shall (and each Obligor shall ensure that each of its Affiliates) and any of their agents, employees, directors or officers:
|
(A) |
conducts its businesses in compliance with the Bribery Act 2010 or the United States Foreign Corrupt Practices Act of 1977, the Monaco Law no.1.362 of August 3
rd
, 2009 as amended and supplemented; and
|
(B) |
maintains policies and procedures designed to promote and achieve compliance with such laws.
|
(c) |
For the purposes of this clause 22.6 and clause 19.37 (
No Money Laundering
), the following definitions shall apply:
|
(i) |
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;
|
(ii) |
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
|
(iii) |
the acquisition, possession or use of property knowing at the time of its receipt that it is derived from a criminal offence.
|
22.7 |
Tax compliance
|
(a) |
Each Obligor (other than the Charterer and CSM) shall (and shall ensure that each other Group Member will) pay and discharge all Taxes imposed upon it or its assets within the time period allowed without incurring penalties in excess of $500,000 (or its equivalent in any other currency) in aggregate, unless and only to the extent that:
|
(i) |
such payment is being contested in good faith;
|
(ii) |
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 20.3
(Financial statements)
; and
|
(iii) |
such payment can be lawfully withheld.
|
(b) |
Except as approved by the Majority Lenders, each Obligor (other than CSM and the Charterer) shall maintain its residence for Tax purposes in its Original Jurisdiction and ensure that it is not resident for Tax purposes in any other jurisdiction.
|
22.8 |
Change of business
|
22.9 |
Merger
|
22.10 |
Pension exposure
|
22.11 |
Further assurance
|
(a) |
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 or the Security Agent may reasonably require in favour of the Security Agent or its nominee(s)):
|
(i) |
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 and/or any other Finance Parties provided by or pursuant to the Finance Documents or by law;
|
(ii) |
to confer on the Security Agent and/or any other Finance Parties 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;
|
(iii) |
to facilitate the realisation of the assets which are, or are intended to be, the subject of the Security Documents; and/or
|
(iv) |
to facilitate the accession by a New Lender to any Security Document following an assignment in accordance with clause 32.1
(
A
ssignments
by the Lenders)
.
|
(b) |
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 Parties by or pursuant to the Finance Documents.
|
22.12 |
Negative pledge in respect of Charged Property and Obligor shares
|
22.13 |
Environmental matters
|
(a) |
The Agent will be notified as soon as reasonably practicable of any Environmental Claim being made against any Obligor or other Group Member or any Fleet Vessel which, if successful to any extent, is reasonably expected to have a Material Adverse Effect and of any Environmental Incident which may give rise to such a claim and will be kept 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.
|
(b) |
Environmental Laws (and any consents, licences or approvals obtained under them) applicable to Fleet Vessels will not be violated.
|
22.14 |
Sanctions and Additional Unacceptable Countries
|
(a) |
Each Obligor shall, and each Obligor shall procure that any Affiliate of each Obligor shall, ensure that none of their respective directors, officers, agents, employees or persons acting on behalf of the foregoing, is a Restricted Person or acts directly or indirectly on behalf of a Restricted Person.
|
(b) |
No Obligor shall, and each Obligor shall procure that none of its Affiliates shall, use any revenue or benefit derived from any activity or dealing with a Restricted Person in discharging any obligation due or owing to the Finance Parties.
|
(c) |
Each Obligor shall not, and each Obligor shall procure that each of its Affiliates will not, credit proceeds from any activity or dealing with a Restricted Person to any bank account held with any Finance Party in its name or in the name of any other person.
|
(d) |
Each Obligor shall, and each Obligor shall ensure that each of its Affiliates take measures to ensure compliance with Sanctions.
|
(e) |
Each Obligor shall, and each Obligor shall procure that each of its Affiliates 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.
|
(f) |
The Borrower shall, if it is intended that the Ship will enter or trade to any Additional Unacceptable Country:
|
(i) |
promptly, and in any event before the Ship enters into or starts trading with, an Additional Unacceptable Country, notify the Agent in writing; and
|
(ii) |
on demand provide the Agent with any information (in a form acceptable to the Agent in its absolute discretion) the Agent requires in relation to the Ship and its employment including, without limitation, information regarding the counterparties and the type of business to which such voyage relates.
|
23 |
Construction period
|
23.1 |
Undertaking to comply
|
23.2 |
Performance of Building Contract
|
23.3 |
Progress and information
|
23.4 |
Arbitration under Building Contract
|
(a) |
if either party to the Building Contract begins an arbitration under the Building Contract;
|
(b) |
of the identity of the arbitrators; and
|
(c) |
of the conclusion of the arbitration and the terms of any arbitration award.
|
23.5 |
Notification of certain events
|
24 |
Dealings with Ship
|
24.1 |
Undertaking to comply
|
24.2 |
Ship's name and registration
|
(a) |
The Ship's name shall only be changed with the prior written consent of 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 that date.
|
(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.
|
24.3 |
Sale or other disposal of Ship
|
24.4 |
Manager
|
24.5 |
Copy of Mortgage on board
|
24.6 |
Notice of Mortgage
|
24.7 |
Conveyance on default
|
24.8 |
Chartering
|
(a) |
Except with approval,
the Borrower shall not enter into any charter commitment for the Ship (except for the Charter), which is:
|
(i) |
a bareboat or demise charter or passes possession and operational control of the Ship to another person;
|
(ii) |
of a fixed duration exceeding 13 calendar months;
|
(iii) |
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 vessels of the same age and type as the Ship under charter commitments of a similar type and period; or
|
(iv) |
to another Obligor or other Group Member.
|
(b) |
Further, without prejudice to the rights of the Finance Parties under the provisions of clause 24.8(a) and any other provisions of the Finance Documents, advise the Agent promptly of any proposed charter commitment in respect of the Ship of a fixed duration exceeding 13 calendar months, and:
|
(i) |
deliver a copy of each such charter commitment to the Agent forthwith after it has been entered into;
|
(ii) |
forthwith following a demand made by the Agent (acting on the instructions of the Majority Lenders):
|
(A) |
execute a charter assignment in the form similar to the Charter Assignment of any such charter commitment in favour of the Security Agent and any notice of assignment required in connection therewith; and
|
(B) |
procure the service of any such notice of assignment on the relevant charterer and, unless expressly freely assignable, the acknowledgement of such notice by the relevant charterer;
|
(iii) |
deliver to the Agent such documents and evidence of the type referred to in Schedule 3 (
Conditions precedent
), in relation to any such charter assignment or any other related matter referred to in this clause 24.8(b), as the Agent (acting on the instructions of the Majority Lenders in their sole discretion) shall require; and
|
(iv) |
pay on the Agent's demand all documented legal costs and other costs incurred by the Agent and/or any other Finance Party in connection with or in relation to any such charter assignment or any other related matter referred to in this clause 24.8(b).
|
24.9 |
Lay up
|
24.10 |
Sharing of Earnings
|
24.11 |
Payment of Earnings
|
(a) |
The Borrower's Earnings from the Ship shall be paid in the way required by the General Assignment.
|
(b) |
If any Earnings are held by brokers or other agents, they shall be paid to the Security Agent, if it requires this after the Earnings have become payable to it under the General Assignment.
|
25 |
Condition and operation of Ship
|
25.1 |
Undertaking to comply
|
25.2 |
Defined terms
|
25.3 |
Repair
|
25.4 |
Modification
|
25.5 |
Removal of parts
|
25.6 |
Third party owned equipment
|
25.7 |
Maintenance of class; compliance with laws and codes
|
25.8 |
Surveys
|
25.9 |
Inspection and notice of dry-docking
|
25.10 |
Prevention of arrest
|
25.11 |
Release from arrest
|
25.12 |
Information about Ship
|
25.13 |
Notification of certain events
|
(a) |
any damage to the Ship where the cost of the resulting repairs is reasonably likely to exceed the Major Casualty Amount;
|
(b) |
any occurrence which is reasonably likely to 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 of any applicable operating certificate;
|
(f) |
the receipt of notification that any application for such a certificate has been refused;
|
(g) |
any requirement or recommendation made in relation to the Ship by any insurer or the Classification Society or by any competent authority which is not, or cannot be, complied with in the manner or time required or recommended; and
|
(h) |
any arrest 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.
|
25.14 |
Payment of outgoings
|
25.15 |
Evidence of payments
|
(a) |
the wages and allotments and the insurance and pension contributions of the Ship's crew are being timely 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.
|
25.16 |
Repairers' liens
|
25.17 |
Survey report
|
25.18 |
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,
|
25.19 |
War zones
|
26 |
Insurance
|
26.1 |
Undertaking to comply
|
26.2 |
Insurance terms
|
26.3 |
Coverage required
|
(a) |
against fire and usual marine risks (including excess risks) and war risks (including war protection and indemnity risks and terrorism risks) on an agreed value basis, 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);
|
(c) |
against such other risks (excluding loss of hire) 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 (having regard to general insurance market practice and law at the time but always excluding any loss of earnings cover); and
|
(d) |
on terms which comply with the other provisions of this clause 26.
|
26.4 |
Placing of cover
|
(a) |
in the name of the Borrower and (in the case of the Ship's hull cover) no other person (other than the Security Agent (and any other Finance Party required by the Agent) 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 (and any other Finance Party required by the Agent) 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 Borrower and the Security Agent (and any other Finance Party required by the Agent) (and, to the extent reasonably practicable
|
(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;
|
(e) |
in full force and effect; and
|
(f) |
on approved terms and with approved insurers or associations.
|
26.5 |
Deductibles
|
26.6 |
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 amount up to 120 per cent of the Loan; and
|
(b) |
any other insurance cover which the Agent reasonably requires (having regard to general insurance market practice and law at the time) in respect of any Finance Party's interests and potential liabilities (whether as mortgagee of the Ship or beneficiary of the Security Documents).
|
26.7 |
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; or
|
(b) |
cancel that cover because of non-payment of premiums in respect of such other vessels,
|
26.8 |
Payment of premiums
|
26.9 |
Details of proposed renewal of Insurances
|
26.10 |
Instructions for renewal
|
26.11 |
Confirmation of renewal
|
26.12 |
P&I guarantees
|
26.13 |
Insurance documents
|
26.14 |
Letters of undertaking
|
26.15 |
Insurance Notices and Loss Payable Clauses
|
26.16 |
Insurance correspondence
|
26.17 |
Qualifications and exclusions
|
26.18 |
Independent report
|
26.19 |
Collection of claims
|
26.20 |
Employment of Ship
|
26.21 |
Declarations and returns
|
26.22 |
Application of recoveries
|
26.23 |
Settlement of claims
|
26.24 |
Change in insurance requirements
|
27 |
Minimum security value
|
27.1 |
Undertaking to comply
|
27.2 |
Valuation of assets
|
27.3 |
Valuation frequency
|
27.4 |
Expenses of valuation
|
27.5 |
Valuations procedure
|
27.6 |
Currency of valuation
|
27.7 |
Basis of valuation
|
(a) |
without physical inspection;
|
(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.
|
27.8 |
Information required for valuation
|
27.9 |
Approval of valuers
|
27.10 |
Appointment of Approved Valuers
|
27.11 |
Number of valuers
|
(a) |
Each valuation must be carried out by two (2) Approved Valuers one of whom shall be nominated by the Borrower. If the Borrower fails to promptly nominate an Approved Valuer within fifteen (15) Business Days of the Agent's request, then the Agent may nominate that Approved Valuer.
|
(b) |
If the two (2) Approved Valuers provide valuations and the higher of the two valuations of the Ship exceeds the other one by more than twenty per cent, then the value of the Ship shall be determined by reference to those two valuations and a third valuation provided by a third Approved Valuer nominated by the Agent.
|
27.12 |
Differences in valuations
|
(a) |
Subject to clause 27.11 (
Number of valuers
), if valuations of the Ship provided by each Approved Valuer differ, the value of the Ship for the purposes of the Finance Documents will be the mean average of those valuations.
|
(b) |
If a single Approved Valuer provides a range of values for the Ship, its value, for the purposes of the Finance Documents, will be the mean average of the values comprising such range.
|
27.13 |
Security shortfall
|
(a) |
If at any time, the Security Value is less than the Minimum Value, the Agent may, and shall, if so directed by the Majority Lenders, by notice to the Borrower require that such deficiency be remedied. The Borrower shall then within 14 Business Days of receipt of such notice ensure that the Security Value equals or exceeds the Minimum Value either by:
|
(i) |
providing additional security over other assets approved by the Majority Lenders in accordance with this clause 27; or
|
(ii) |
prepaying under clause 7.4
(Voluntary prepayment)
(but on five Business Days' notice instead of the period required by such clause) a corresponding amount of the Loan.
|
27.14 |
Creation of additional security
|
(a) |
that additional security, its value and the method of its valuation have been approved by the Majority Lenders to the extent that the method of its valuation has not already been approved pursuant to clause 27.5 (
Valuations procedure
);
|
(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 reasonably 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.
|
28 |
Chartering undertakings
|
28.1 |
Undertaking to comply
|
28.2 |
Variations
|
28.3 |
Releases and waivers
|
28.4 |
Termination by the Borrower
|
28.5 |
Charter performance
|
28.6 |
Notice of assignment
|
(a) |
subject to paragraph (b) below, shall ensure that the Agent receives a copy of that notice acknowledged by each addressee; or
|
(b) |
if such Charter Documents are freely assignable, the Borrower shall use commercially reasonable efforts to ensure that the Agent receives a copy of that notice acknowledged by each addressee,
|
28.7 |
Payment of Charter Earnings
|
29 |
Bank accounts
|
29.1 |
Undertaking to comply
|
29.2 |
Operating Account
|
(a) |
The Borrower shall be the holder of one Account with an Account Bank which is designated as the "Operating Account" for the purposes of the Finance Documents.
|
(b) |
The Earnings and all moneys payable to the Borrower under the Insurances shall be paid by the persons from whom they are due to the Operating Account unless required to be paid to the Security Agent under the Finance Documents.
|
(c) |
The Borrower shall not withdraw amounts standing to the credit of an Operating Account except as permitted by paragraph (d) below.
|
(d) |
If there is no continuing Event of Default and subject always to clause 21.5 (
Minimum Liquidity
), the Borrower may withdraw the following amounts from an Operating Account for:
|
(i) |
payments of the reasonably incurred and documented costs and expenses of insuring, repairing, operating, trading and maintaining the Ship;
|
(ii) |
payments then due to Finance Parties under the Finance Documents (other than payments due in respect of a prepayment);
|
(iii) |
without prejudice to paragraph (i) above, payments then due in respect of the price of goods or services purchased by the Borrower for the purpose of operating the Ship (including ship management services);
|
(iv) |
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;
|
(v) |
prepayments to be made pursuant to clause 7.2 (
Additional Minimum Value prepayment
); and
|
(vi) |
payments of dividends to the extent permitted by clause 30.13 (
Distributions and other payments
).
|
29.3 |
Other provisions
|
(a) |
An Account may only be designated for the purposes described in this clause 29 if:
|
(i) |
such designation is made in writing by the Agent and acknowledged by the Borrower and specifies the name and address of the Account Bank and the number and any designation or other reference attributed to the Account;
|
(ii) |
an Account Security has been duly executed and delivered by the Borrower in favour of the Security Agent (and any other Finance Party required by the Agent);
|
(iii) |
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
|
(iv) |
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.
|
(b) |
The rates of payment of interest and other terms regulating any Account will be a matter of separate agreement between the Borrower and an Account Bank.
|
(c) |
If an Account is a fixed term deposit account, the Borrower may select the terms of deposits until the relevant Account Security has become enforceable and the Security Agent directs otherwise.
|
(d) |
The
Borrower 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 29 or waive any of its rights in relation to an Account except with approval.
|
(e) |
The
Borrower 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 reasonably request concerning any Account.
|
(f) |
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.
|
30 |
Business restrictions
|
30.1 |
Undertaking to comply
|
30.2 |
General negative pledge
|
(a) |
In this clause 30.2, Quasi-Security means an arrangement or transaction described in paragraph (c) below.
|
(b) |
The Borrower shall not create or permit to subsist any Security Interest over any of its assets except for Permitted Security Interests.
|
(c) |
(Without prejudice to clauses 30.3
(Financial Indebtedness)
and 30.7 (
Disposals
)), the Borrower shall not:
|
(i) |
sell, transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to, or re-acquired by, an Obligor or any other Group Member;
|
(ii) |
sell, transfer, factor or otherwise dispose of any of its receivables on recourse terms;
|
(iii) |
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
|
(iv) |
enter into any other preferential arrangement having a similar effect,
|
(d) |
Paragraphs (b) and (c) above do not apply to any Security Interest or (as the case may be) Quasi-Security listed below:
|
(i) |
those granted or expressed to be granted by any of the Security Documents; and
|
(ii) |
in relation to the Ship, Permitted Maritime Liens.
|
30.3 |
Financial Indebtedness
|
(a) |
Financial Indebtedness incurred under the Finance Documents;
|
(b) |
Financial Indebtedness permitted under clause 30.4
(Guarantees)
; and
|
(c) |
Financial Indebtedness permitted under clause 30.5
(Loans and credit)
.
|
30.4 |
Guarantees
|
30.5 |
Loans and credit
|
30.6 |
Bank accounts, operating leases and other financial transactions
|
(a) |
maintain any current or deposit account with a bank or financial institution except for the Operating Account and the deposit of money, operation of current accounts and the conduct of electronic banking operations through the Operating Account;
|
(b) |
hold cash in any account (other than the Operating Account) over or in respect of which any set-off, combination of accounts, netting or Security Interest exists;
|
(c) |
enter into any obligations under operating leases relating to assets; or
|
(d) |
be party to any transaction, whether on or off balance sheet, that is not expressly permitted under this Agreement.
|
30.7 |
Disposals
|
30.8 |
Contracts and arrangements with Affiliates
|
30.9 |
Subsidiaries
|
30.10 |
Acquisitions and investments
|
(a) |
acquisitions of assets in the ordinary course of business (not being new businesses or vessels);
|
(b) |
capital expenditures or investments related to the maintenance of the Ship in the ordinary course of its business;
|
(c) |
the incurrence of liabilities in the ordinary course of its business;
|
(d) |
pursuant to any Finance Document or the Charter Documents or the Building Contract Documents to which it is party.
|
30.11 |
Reduction of capital
|
30.12 |
Increase in capital
|
30.13 |
Distributions and other payments
|
(a) |
declare or pay (including by way of set-off, combination of accounts or otherwise) any dividend, charge, fee or other distribution (or interest on any unpaid dividend, charge, fee or other distribution) (whether in cash or in kind) on or in respect of its share capital (or any class of its share capital) or any warrants for the time being in issue;
|
(b) |
repay or distribute any dividend or share premium reserve;
|
(c) |
pay any management, advisory or other fee to or to the order of any of the shareholders of the Guarantor;
|
(d) |
redeem, repurchase, defease, retire or repay any of its share capital or resolve to do so; or
|
(e) |
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,
|
(i) |
no repayment of the Loan is required under clause 7.2(a)(i)
(Additional Minimum Value prepayment)
, no Default is continuing at that time, no Default would result from the declaration or payment of the same and the Lenders' prior written approval has been obtained; or
|
(ii) |
a prepayment of the Loan is made in accordance with clause 7.2(a)(ii) (
Additional Minimum Value Prepayment
), no Default is continuing at that time and no Default would result from the declaration or payment of the same.
|
31 |
Events of Default
|
31.1 |
Each of the events or circumstances set out in this clause 31 (except clause 31.25
(Acceleration)
) is an Event of Default.
|
31.2 |
Non-payment
|
(a) |
its failure to pay is caused by administrative or technical error or by a Disruption Event; and
|
(b) |
payment is made within three (3) Business Days of its due date.
|
31.3 |
Financial covenants
|
31.4 |
Value of security
|
31.5 |
Insurance
|
(a) |
The Insurances of the Ship are not placed and kept in force in the manner required by clause 26
(Insurance)
.
|
(b) |
Any insurer either:
|
(i) |
cancels any such Insurances; or
|
(ii) |
disclaims liability under them or asserts that its liability under them is or should be reduced by reason of any mis-statement or failure or default by any person.
|
31.6 |
Other obligations
|
(a) |
An Obligor does not comply with any provision of the Finance Documents (other than those referred to in clause 31.2 (
Non-payment
), clause 31.3 (
Financial covenants
), clause 31.4 (
Value of security
), clause 31.5 (
Insurance
) or in any of the other sub-clauses of this clause 31).
|
(b) |
No Event of Default under paragraph (a) above will occur if the Agent considers that the failure to comply is capable of remedy and the failure is remedied within five Business Days of the earlier of (A) the Agent giving notice to the Borrower and (B) the Borrower or any other Obligor becoming aware of the failure to comply.
|
31.7 |
Misrepresentation
|
31.8 |
Cross default
|
(a) |
Any Financial Indebtedness of any Obligor (other than the Charterer or CSM) is not paid when due nor within any originally applicable grace period.
|
(b) |
Any Financial Indebtedness of any Obligor (other than the Charterer or CSM) 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).
|
(c) |
Any commitment for any Financial Indebtedness of any Obligor (other than the Charterer or CSM) is cancelled or suspended by a creditor of that Obligor as a result of an event of default (however described).
|
(d) |
The counterparty to a Treasury Transaction entered into by the Guarantor becomes entitled to terminate that Treasury Transaction early by reason of an event of default (however described).
|
(e) |
An Event of Default will only occur under this clause 31.8 if the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness falling within this clause 31.8 is more than $500,000 (or its equivalent in any other currency) in the case of the Borrower and $5,000,000 in the case of the Guarantor (or its equivalent in any other currency).
|
(f) |
Any creditor of any Obligor (other than the Charterer or CSM) becomes entitled to declare any Financial Indebtedness of that Obligor due and payable prior to its specified maturity as a result of an event of default (however described).
|
31.9 |
Insolvency
|
(a) |
An Obligor (other than CSM):
|
(i) |
is unable or admits inability to pay its debts as they fall due;
|
(ii) |
is deemed to, or is declared to, be unable to pay its debts under applicable law;
|
(iii) |
suspends without the consent of the affected creditor(s) or threatens to suspend making payments on any of its debts; or
|
(iv) |
by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors (excluding any Finance Party in its capacity as such) with a view to rescheduling all or substantially all of its Financial Indebtedness.
|
(b) |
The value of the assets of any Obligor (other than the Charterer or CSM) is less than its Total Debt.
|
(c) |
A moratorium is declared in respect of any indebtedness of any Obligor exceeding in the case of the Guarantor $1,500,000 (or its equivalent in any other currency) in aggregate.
|
31.10 |
Insolvency proceedings
|
(a) |
Any corporate action, legal proceedings or other procedure or step is taken in relation to:
|
(i) |
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 Obligor (other than CSM);
|
(ii) |
a composition, compromise, assignment or arrangement with any creditor of any Obligor (other than CSM);
|
(iii) |
the appointment of a liquidator, receiver, administrative receiver, administrator, compulsory manager or other similar officer in respect of any Obligor (other than CSM) or any of its assets (including the directors of any Obligor (other than CSM) requesting a person to appoint any such officer in relation to it or any of its assets); or
|
(iv) |
enforcement of any Security Interest over any assets of any Obligor (other than the Guarantor and CSM) or over any assets of the Guarantor having a value in excess of $1,500,000 (or its equivalent in any other currency) in aggregate,
|
(b) |
Paragraph (a) above 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.
|
31.11 |
Creditors' process
|
(a) |
Any expropriation, attachment, sequestration, distress, execution or any other analogous process or enforcement action (including enforcement by a landlord) affects any asset or assets of any Obligor (other than CSM) (having in the case of the Guarantor a value in excess of $1,500,000 (or its equivalent in any other currency) in aggregate) and is not discharged within seven days.
|
(b) |
Any judgment or order is made against any Obligor (other than CSM) or any other Group Member and is not stayed or complied with within fifteen days.
|
31.12 |
Unlawfulness and invalidity
|
(a) |
It is or becomes unlawful for an Obligor to perform any of its obligations under the Finance Documents or any Transaction Security ceases to be effective.
|
(b) |
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.
|
(c) |
Any Finance Document or any Transaction Security ceases to be in full force and effect or ceases to be legal, valid, binding, enforceable or effective or is alleged by a party to it (other than a Finance Party) to be ineffective for any reason.
|
(d) |
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.
|
31.13 |
Cessation of business
|
31.14 |
Ownership of the Borrower
|
31.15 |
Expropriation
|
31.16 |
Repudiation and rescission of Finance Documents
|
31.17 |
Litigation
|
(a) |
any litigation, alternative dispute resolution, arbitration or administrative, governmental, regulatory or other investigations, proceedings or disputes are commenced or threatened; or
|
(b) |
any judgment or order of a court, arbitral tribunal or other tribunal or any order or sanction of any governmental or other regulatory body is made,
|
31.18 |
Material Adverse Effect
|
31.19 |
Security enforceable
|
31.20 |
Arrest of Ship
|
31.21 |
Ship registration
|
31.22 |
Political risk
|
(a) |
Either (1) the Flag State or any Relevant Jurisdiction of an Obligor becomes involved in hostilities or civil war or (2) there is a seizure of power in the Flag State or any such Relevant Jurisdiction by unconstitutional means and (in either such case) in the opinion of the Agent such event or circumstance, has or is reasonably likely to have, a Material Adverse Effect.
|
(b) |
No Event of Default under paragraph (a) above will occur if:
|
(i) |
in the opinion of the Agent it is practicable for action to be taken by the Borrower to prevent the relevant event or circumstance having a Material Adverse Effect; and
|
(ii) |
the Borrower takes such action to the Agent's satisfaction within 14 days of notice from the Agent (specifying the relevant action to be taken) to do so.
|
31.23 |
Existing Agreement Events
|
31.24 |
Sanctions
|
(a) |
Any of the Obligors or any Affiliate of any of them or any of their respective directors, officers, agents, employees or other persons acting on behalf of the foregoing, becomes a Restricted Person or becomes owned or controlled by, or acts directly or indirectly on behalf of, a Restricted Person or any of such persons becomes the owner or controller of a Prohibited Person; or
|
(b) |
Any proceeds of the Loan are made available, directly or indirectly, to or for the benefit of a Restricted Person or otherwise is, directly or indirectly, applied in a manner or for a purpose prohibited by applicable Sanctions; or
|
(c) |
Any Obligor or any of their respective Affiliates or any of their respective directors, officers, agents, employees or other persons acting on behalf of the foregoing, is not in compliance with all applicable Sanctions.
|
31.25 |
De-listing or suspension of trading
|
31.26 |
Acceleration
|
(a) |
by notice to the Borrower:
|
(i) |
declare that no withdrawals be made from any Account;
|
(ii) |
cancel the Total Commitments at which time they shall immediately be cancelled;
|
(iii) |
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
|
(iv) |
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
|
(b) |
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.
|
32 |
Changes to the Lenders
|
32.1 |
Assignments by the Lenders
|
32.2 |
Other conditions of assignment
|
(a) |
An assignment will only be effective:
|
(i) |
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 Borrower and the other Finance Parties as it would have been under if it was an Original Lender;
|
(ii) |
on the New Lender entering into any documentation required for it to accede as a party to any Security Document to which the Existing Lender is a party in its capacity as a Lender and, in relation to such Security Documents, completing any filing, registration or notice requirements;
|
(iii) |
on the performance by the Agent of all necessary "know your customer" or similar 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
|
(iv) |
if that Existing Lender assigns equal fractions of its Commitment and participation in the Loan and each Utilisation (if any) under the Facility.
|
(b) |
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 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
|
(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 |
Transfer costs and expenses relating to security
|
(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 Security Document and/or the benefit of any Security 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
|
(a) |
Unless expressly agreed to the contrary, an Existing Lender makes no representation or warranty and assumes no responsibility to a New Lender for:
|
(i) |
the legality, validity, effectiveness, adequacy or enforceability of the Finance Documents, the Transaction Security or any other documents;
|
(ii) |
the financial condition of any Obligor;
|
(iii) |
the performance and observance by any Obligor or any other person of its obligations under the Finance Documents or any other documents;
|
(iv) |
the application of any Basel II Regulation or Basel III Regulation to the transactions contemplated by the Finance Documents; or
|
(v) |
the accuracy of any statements (whether written or oral) made in or in connection with any Finance Document or any other document,
|
(b) |
Each New Lender confirms to the Existing Lender and the other Finance Parties that it:
|
(i) |
has made (and shall continue to make) its own independent investigation and assessment of:
|
(A) |
the financial condition and affairs of the Obligors and their related entities in connection with its participation in this Agreement; and
|
(B) |
the application of any Basel II Regulation or Basel III Regulation to the transactions contemplated by the Finance Documents,
|
(ii) |
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
|
(iii) |
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.
|
(c) |
Nothing in any Finance Document obliges an Existing Lender to:
|
(i) |
accept a re-assignment from a New Lender of any of the rights assigned under this clause 32; or
|
(ii) |
support any losses directly or indirectly incurred by the New Lender by reason of the non-performance by any Obligor of its obligations under any Transaction Document or by reason of the application of any Basel II Regulation to the transactions contemplated by the Transaction Documents or otherwise.
|
32.6 |
Procedure available for assignment
|
(a) |
Subject to the conditions set out in clause 32.2
(Other conditions of assignment)
an assignment may be effected in accordance with paragraph (d) below when (a) the Agent executes an otherwise duly completed Transfer Certificate and (b) the Agent executes any document required under paragraph (a) of clause 32.2
(Other conditions of assignment)
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, subject to paragraph (b) below, 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.
|
(b) |
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.
|
(c) |
The Obligors who are Parties and the other Finance Parties irrevocably authorise the Agent to execute any Transfer Certificate on their behalf without any consultation with them.
|
(d) |
On the Transfer Date:
|
(i) |
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;
|
(ii) |
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
|
(iii) |
the New Lender shall become a Party as a "Lender" and will be bound by obligations equivalent to the Relevant Obligations.
|
(e) |
Lenders may utilise procedures other than those set out in this clause 32.6
to assign their rights under the Finance Documents (but not, without the consent of the relevant Obligor or unless in accordance with this clause 32.6
to obtain a release by that Obligor from the obligations owed to that Obligor by the Lenders nor the assumption of equivalent obligations by a New Lender) provided that they comply with the conditions set out in clause 32.2
(Other conditions of assignment)
.
|
32.7 |
Copy of Transfer Certificate to Borrower
|
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) |
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 other 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.
|
33 |
Changes to the Obligors
|
34 |
Roles of Agent, Security Agent and Arranger
|
34.1 |
Appointment of the Agent and Security Agent
|
(a) |
the Agent to act as its agent under and in connection with the Finance Documents; and
|
(b) |
the Security Agent to act as its agent and as trustee under the Security Documents.
|
34.2 |
Security Agent as trustee
|
34.3 |
Authorisation of Agent and Security Agent
|
(a) |
to perform the duties, obligations and responsibilities and to exercise the rights, powers, authorities and discretions specifically given to the Agent or (as the case may be) 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 Majority Lenders for execution by it.
|
34.4 |
Instructions to Agent and the Security Agent
|
(a) |
The Agent and the Security Agent shall:
|
(i) |
subject to paragraphs (d) and (e) below, exercise or refrain from exercising any right, power, authority or discretion vested in it as Agent or (as the case may be) the Security Agent in accordance with any instructions given to it by:
|
(A) |
all Lenders if the relevant Finance Document stipulates the matter is an all Lender decision; and
|
(B) |
in all other cases, the Majority Lenders; and
|
(ii) |
not be liable for any act (or omission) if it acts (or refrains from acting) in accordance with paragraph (i) above (or, if the relevant Finance Document stipulates the matter is a decision for any other Finance Party or group of Finance Parties, in accordance with instructions given to it by that Finance Party or group of Finance Parties).
|
(b) |
The Agent and the Security 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 Finance Party or group of Finance Parties, from that Finance Party or group of Finance Parties) as to whether, and in what manner, it should exercise or refrain from exercising any right, power, authority or discretion and the Agent or (as the case may be) the Security Agent may refrain from acting unless and until it receives those instructions or that clarification.
|
(c) |
Save in the case of decisions stipulated to be a matter for any other Finance Party or group of Finance Parties under the relevant Finance Document and, unless a contrary indication appears in a Finance Document, any instructions given to the Agent or (as the case may be) the Security Agent by the Majority Lenders shall override any conflicting instructions given by any other Parties and will be binding on all Finance Parties.
|
(d) |
Paragraph (a) above shall not apply:
|
(i) |
where a contrary indication appears in a Finance Document;
|
(ii) |
where a Finance Document requires the Agent or the Security Agent to act in a specified manner or to take a specified action;
|
(iii) |
in respect of any provision which protects the Agent's or the Security Agent's own position in its personal capacity as opposed to its role of the Agent or the Security Agent for the Finance Parties including, without limitation, clause 34.9
(No duty to account)
to clause 34.14
(Exclusion of liability)
, clause 34.19
(Confidentiality)
to clause 35.6
(Custodians and nominees)
and clauses 35.9
(Acceptance of title)
to 35.12
(Disapplication of Trustee Acts)
.
|
(e) |
If giving effect to instructions given by any other Finance Party or group of Finance Parties would (in the Agent's or (as the case may be) the Security Agent's opinion) have an effect equivalent to an amendment or waiver which is subject to clause 46 (
Amendments and waivers
), the Agent or (as the case may be) the Security Agent shall not act in accordance with those instructions unless consent to it so acting is obtained from each Party (other than itself) whose consent would have been required in respect of that amendment or waiver.
|
(f) |
The Agent or the Security Agent may refrain from acting in accordance with any instructions of any other Finance Party or group of Finance Parties 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 applicable VAT) which it may incur in complying with those instructions.
|
(g) |
Without prejudice to the provisions of clause 36
(Enforcement of Transaction Security)
and the remainder of this clause 34, in the absence of instructions, the Agent and the Security Agent may act (or refrain from acting) as it considers to be in the best interest of the Lenders.
|
34.5 |
Legal or arbitration proceedings
|
34.6 |
Duties of the Agent and the Security Agent
|
(a) |
The Agent's and the Security Agent's duties under the Finance Documents are solely mechanical and administrative in nature.
|
(b) |
Subject to paragraph (c) below, the Agent or (as the case may be) the Security Agent shall promptly:
|
(i) |
(in the case of the Security Agent) forward to the Agent a copy of any document received by the Security Agent from any Obligor under any Finance Document; and
|
(ii) |
forward to a Party the original or a copy of any document which is delivered to the Agent or (as the case may be) the Security Agent for that Party by any other Party.
|
(c) |
Without prejudice to clause 32.7
(Copy of Transfer Certificate
to Borrower)
, paragraph (b) above shall not apply to any Transfer Certificate.
|
(d) |
Except where a Finance Document specifically provides otherwise, neither the Agent nor the Security Agent is obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party.
|
(e) |
Without prejudice to clause 37.10
(Notification of prescribed events)
, if the Agent or the Security 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.
|
(f) |
If the Agent is aware of the non-payment of any principal, interest, commitment fee or other fee payable to a Finance Party (other than the Agent or the Arranger or the Security Agent for their own account) under this Agreement, it shall promptly notify the other Finance Parties.
|
(g) |
The Agent shall provide to the Borrower within five Business Days of a request by the Borrower (but no more frequently than once per calendar month), a list (which may be in electronic form) setting out the names of the Lenders as at the date of that request, their respective Commitments and the address (and the department or officer, if any, for whose attention any communication is to be made) of each Lender for any communication to be made or document to be delivered under or in connection with the Finance Documents, the electronic mail address and/or any other information required to enable the sending and receipt of information by electronic mail or other electronic means to and by each Lender to whom any communication under or in connection with the Finance Documents may be made by that means and the account details of each Lender for any payment to be distributed by the Agent to that Lender under the Finance Documents.
|
(h) |
The Agent and the Security 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).
|
34.7 |
Role of the Arranger
|
34.8 |
No fiduciary duties
|
34.9 |
No duty to account
|
34.10 |
Business with the Group
|
34.11 |
Rights and discretions of the Agent and the Security Agent
|
(a) |
The Agent and the Security Agent may:
|
(i) |
rely on any representation, communication, notice or document believed by it to be genuine, correct and appropriately authorised;
|
(ii) |
assume that:
|
(A) |
any instructions received by it from the Majority Lenders, any Lenders or other Finance Parties or any group of Lenders or other Finance Parties are duly given in accordance with the terms of the Finance Documents;
|
(B) |
unless it has received notice of revocation, that those instructions have not been revoked; and
|
(C) |
in the case of the Security Agent, if it receives any instructions to act in relation to the Transaction Security, that all applicable conditions under the Finance Documents for so acting have been satisfied; and
|
(iii) |
rely on a certificate from any person:
|
(A) |
as to any matter of fact or circumstance which might reasonably be expected to be within the knowledge of that person; or
|
(B) |
to the effect that such person approves of any particular dealing, transaction, step, action or thing,
|
(b) |
The Agent and the Security Agent may assume (unless it has received notice to the contrary in its capacity as agent or (as the case may be) security trustee for the other Finance Parties) that:
|
(i) |
no Notifiable Debt Purchase Transaction:
|
(A) |
has been entered into;
|
(B) |
has been terminated; or
|
(C) |
has ceased to be with a Borrower Affiliate;
|
(ii) |
no Default has occurred (unless (in the case of the Agent) it has actual knowledge of a Default arising under clause 31.2
(Non-payment)
);
|
(iii) |
any right, power, authority or discretion vested in any Party or any group of Finance Parties has not been exercised; and
|
(iv) |
any notice or request made by the Borrower (other than (in the case of the Agent) the Utilisation Request) is made on behalf of and with the consent and knowledge of all the Obligors.
|
(c) |
Each of the Agent and the Security Agent may engage and pay for the advice or services of any lawyers, accountants, tax advisers, insurance consultants, ship managers, valuers, surveyors or other professional advisers or experts.
|
(d) |
Without prejudice to the generality of paragraph (c) above or paragraph (e) below, each of the Agent and the Security Agent may at any time engage and pay for the services of any lawyers to act as independent counsel to it (and so separate from any lawyers instructed by the Lenders or any other Finance Party) if it, in its reasonable opinion, deems this to be necessary.
|
(e) |
Each of the Agent and the Security Agent may rely on the advice or services of any lawyers, accountants, tax advisers, insurance consultants, ship managers, valuers, surveyors or other professional advisers or experts (whether obtained by it 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.
|
(f) |
The Agent, the Security Agent, any Receiver and any Delegate may act in relation to the Finance Documents, the Transaction Security and the Security Property through its officers, employees and agents and shall not:
|
(i) |
be liable for any error of judgment made by any such person; or
|
(ii) |
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,
|
(g) |
Unless any Finance Document expressly specifies otherwise, the Agent or the Security Agent may disclose to any other Party any information it reasonably believes it has received as agent or security trustee under this Agreement.
|
(h) |
Without prejudice to the generality of paragraph (g) above, the Agent:
|
(i) |
may disclose; and
|
(ii) |
on the written request of the Borrower or the Majority Lenders shall, as soon as reasonably practicable, disclose
|
(i) |
Notwithstanding any other provision of any Finance Document to the contrary, none of the Agent, the Security 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.
|
(j) |
Notwithstanding any provision of any Finance Document to the contrary, neither the Agent nor the Security Agent is 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.
|
(k) |
Neither the Agent nor the Arranger shall be obliged to request any certificate, opinion or other information under clause 20
(Information undertakings)
unless so required in writing by a Lender, in which case the Agent shall promptly make the appropriate request of the Borrower if such request would be in accordance with the terms of this Agreement.
|
34.12 |
Responsibility for documentation and other matters
|
(a) |
the adequacy, accuracy or completeness of any information (whether oral or written) supplied by the Agent, the Security Agent, the Arranger, an Obligor or any other person 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;
|
(b) |
the legality, validity, effectiveness, adequacy or enforceability of any Transaction Document, the Transaction Security or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document, the Transaction Security or the Security Property;
|
(c) |
the application of any Basel II Regulation or Basel III Regulation to the transactions contemplated by the Finance Documents;
|
(d) |
(in the case of the Security Agent) any loss to the Security 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) |
the failure of any Obligor or any other party to perform its obligations under any Transaction Document or the financial condition of any such person;
|
(f) |
(save as otherwise provided in this clause 34) taking or omitting to take any other action under or in relation to the Security Documents;
|
(g) |
any other beneficiary of a Security Document failing to perform or discharge any of its duties or obligations under any Finance Document; or
|
(h) |
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.
|
34.13 |
No duty to monitor
|
(a) |
whether or not any Default has occurred;
|
(b) |
as to the performance, default or any breach by any Party or any Obligor of its obligations under any Finance Document; or
|
(c) |
whether any other event specified in any Finance Document has occurred.
|
34.14 |
Exclusion of liability
|
(a) |
Without limiting paragraph (b) below (and without prejudice to any other provision of any Finance Document excluding or limiting the liability of the Agent, the Security Agent, any Receiver or Delegate), none of the Agent, the Security Agent, any Receiver nor any Delegate will be liable (including, without limitation, for negligence or any other category of liability whatsoever) for:
|
(i) |
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
|
(ii) |
exercising, or not exercising, any right, power, authority or discretion given to it by, or in connection with, any Finance Document, the Security 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 Security Property;
|
(iii) |
any shortfall which arises on the enforcement or realisation of the Security Property; or
|
(iv) |
without prejudice to the generality of paragraphs (i) to (iii) above, any damages, costs, losses, any diminution in value or any liability whatsoever arising as a result of:
|
(A) |
any act, event or circumstance not reasonably within its control; or
|
(B) |
the general risks of investment in, or the holding of assets in, any jurisdiction,
|
(b) |
No Party (other than the Agent, the Security Agent, that Receiver or that Delegate (as applicable)) may take any proceedings against any officer, employee or agent of the Agent, the Security Agent, a Receiver or a Delegate in respect of any claim it might have against the Agent, the Security Agent, a Receiver or a Delegate or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Transaction Document or any Security Property and any officer, employee or agent of the Agent, the Security Agent, a Receiver or a Delegate may rely on this clause subject to clause 1.4
(Third party rights)
and the provisions of the Third Parties Act.
|
(c) |
Neither of the Agent or the Security Agent will 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 it if it 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 it for that purpose.
|
(d) |
Nothing in any Finance Document shall oblige the Agent, the Security Agent or the Arranger to carry out
|
(i) |
any "know your customer" or other checks in relation to any person; or
|
(ii) |
any check on the extent to which any transaction contemplated by any of the Finance Documents might be unlawful for any Finance Party or for any Affiliate of any Finance Party,
|
(e) |
Without prejudice to any provision of any Finance Document excluding or limiting the liability of the Agent, the Security Agent, any Receiver or any Delegate, any liability of the Agent, the Security Agent, any Receiver or any Delegate arising under or in connection with any Finance Document or the Security Property shall be limited to the amount of actual loss which has been finally judicially determined to have been suffered (as determined by reference to the date of default of the Agent, the Security Agent, Receiver or Delegate (as the case may be) or, if later, the date on which the loss arises as a result of such default) but without reference to any special conditions or circumstances known to the Agent, the Security Agent, Receiver or Delegate (as the case may be) at any time which increase the amount of that loss. In no event shall the Agent, the Security Agent, any Receiver or any Delegate be liable for any loss of profits, goodwill, reputation, business opportunity or anticipated saving, or for special, punitive, indirect or consequential damages, whether or not the Agent, the Security Agent, Receiver or Delegate (as the case may be) has been advised of the possibility of such loss or damages.
|
34.15 |
Lenders' indemnity to the Agent and others
|
(a) |
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 being reduced to zero) indemnify the Agent, the Security Agent, every Receiver and every Delegate, within three Business Days of demand, against any Losses (including, without limitation, for negligence or any other category of liability whatsoever) incurred by any of them (otherwise than by reason of the relevant Agent's, Security Agent's, Receiver's or Delegate's gross negligence or wilful misconduct) (or, in the circumstances contemplated pursuant to clause 40.11
(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) in acting as Agent, Security Agent, Receiver or Delegate under, or exercising any authority conferred under, the Finance Documents (unless the relevant Agent, Security Agent, Receiver or Delegate has been reimbursed by an Obligor pursuant to a Finance Document).
|
(b) |
Subject to paragraph (c) below, the Borrower shall immediately on demand reimburse any Lender for any payment that Lender makes to the Agent or the Security Agent or any Receiver or Delegate pursuant to paragraph (a) above.
|
(c) |
Paragraph (b) above 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 or the Security Agent to an Obligor.
|
34.16 |
Resignation of the Agent or the Security Agent
|
(a) |
The Agent or the Security Agent may resign and appoint one of its Affiliates as successor by giving notice to the other Finance Parties and the Borrower.
|
(b) |
Alternatively the Agent or the Security Agent may resign by giving 30 days' notice to the other Finance Parties and the Borrower, in which case the Majority Lenders may appoint a successor Agent or Security Agent.
|
(c) |
If the Majority Lenders have not appointed a successor Agent or Security Agent in accordance with paragraph (b) above within 20 days after notice of resignation was given, the retiring Agent or Security Agent (after consultation with (in the case of the Agent) the Borrower or (in the case of the Security Agent) the Agent) may appoint a successor Agent or Security Agent.
|
(d) |
If the Agent or Security Agent wishes to resign because (acting reasonably) it has concluded that it is no longer appropriate for it to remain as agent or trustee and the
|
(e) |
The retiring Agent or Security Agent shall make available to the successor Agent or Security Agent such documents and records and provide such assistance as the successor Agent or Security Agent may reasonably request for the purposes of performing its functions as Agent or (as the case may be) Security Agent under the Finance Documents. The Borrower shall, within three Business Days of demand, reimburse the retiring Agent or (as the case may be) Security Agent for the amount of all costs and expenses (including legal fees) (together with any applicable VAT) properly incurred by it in making available such documents and records and providing such assistance.
|
(f) |
The Agent's or Security Agent's resignation notice shall only take effect upon:
|
(i) |
the appointment of a successor; and
|
(ii) |
(in the case of the Security Agent) the transfer or assignment of all the Transaction Security and the other Security Property to that successor and any appropriate filings or registrations, any notices of transfer or assignment and the payment of any fees or duties related to such transfer or assignment which the Security Agent considers necessary or advisable have been duly completed.
|
(g) |
Upon the appointment of a successor, the retiring Agent or Security Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under paragraph (b) of clause 35.10
(Winding up of trust)
and paragraph (e) above) but shall remain entitled to the benefit of clauses 15.3
((Indemnity to the Agent and the Security Agent)
and 15.4
(Indemnity concerning security)
and
this clause 34 (and any agency or other fees for the account of the retiring Agent or Security Agent in its capacity as such 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 that successor had been an original Party.
|
(h) |
The Agent shall resign in accordance with paragraph (b) above (and, to the extent applicable, shall use reasonable endeavours to appoint a successor Agent pursuant to paragraph (c) above) if on or after the date which is three months before the earliest FATCA Application Date relating to any payment to the Agent under the Finance Documents, either:
|
(i) |
the Agent fails to respond to a request under clause 13.7
(FATCA Information)
and the Borrower or a Lender reasonably believes that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date;
|
(ii) |
the information supplied by the Agent pursuant to clause 13.7 (
FATCA Information
) indicates that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date; or
|
(iii) |
the Agent notifies the Borrower and the Lenders that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date,
|
34.17 |
Replacement of the Agent
|
(a) |
After consultation with the Borrower, the Majority Lenders may, by giving 30 days' notice to the Agent (or, at any time the Agent is an Impaired Agent, by giving any shorter notice determined by the Majority Lenders) replace the Agent by appointing a successor Agent.
|
(b) |
The retiring Agent shall (at its own cost if it is an Impaired Agent and otherwise at the expense of the Lenders) 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.
|
(c) |
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 paragraph (b) above) but shall remain entitled to the benefit of clauses 15.3
((Indemnity to the Agent and the Security Agent)
and 15.4
(Indemnity concerning security)
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).
|
(d) |
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.
|
34.18 |
Replacement of the Security Agent
|
34.19 |
Confidentiality
|
(a) |
In acting as agent or trustee for the Finance Parties, the Agent or (as the case may be) the Security Agent shall be regarded as acting through its agency, trustee or other division or department directly responsible for the management of the Finance Documents which shall be treated as a separate entity from any other of its divisions or departments.
|
(b) |
If information is received by another division or department of the Agent or (as the case may be) Security Agent, it may be treated as confidential to that division or department and the Agent or (as the case may be) Security Agent shall not be deemed to have notice of it.
|
(c) |
Notwithstanding any other provision of any Finance Document to the contrary, none of the Agent, the Security Agent nor the Arranger is obliged to disclose to any other person
|
34.20 |
Agent's relationship with the Lenders
|
(a) |
The Agent may treat the person shown in its records as Lender at the opening of business (in the place of the Agent's principal office as notified to the Finance Parties from time to time) as the Lender acting through its Facility Office:
|
(i) |
entitled to or liable for any payment due under any Finance Document on that day; and
|
(ii) |
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,
|
(b) |
Any Lender 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 under the Finance Documents. Such notice shall contain the address and (where communication by electronic mail or other electronic means is permitted under clause 42.6
(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, electronic mail address, department and officer (or such other information) by that Lender for the purposes of clause 42.2
(Addresses)
and clause 42.6 (
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).
|
34.21 |
Information from the Finance Parties
|
34.22 |
Credit appraisal by the Finance Parties
|
(a) |
the financial condition, status and nature of each Obligor and other Group Member;
|
(b) |
the legality, validity, effectiveness, adequacy or enforceability of any Transaction Document, the Transaction Security, the Security Property and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document, the Transaction Security or the Security Property;
|
(c) |
the application of any Basel II Regulation or Basel III Regulation to the transactions contemplated by the Finance Documents;
|
(d) |
whether that 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 Transaction Security, the Security Property, 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, the Transaction Security or the Security Property;
|
(e) |
the adequacy, accuracy or completeness of any information provided by the Agent, the Security Agent, the Arranger or any other Party or by any other person under or in connection with any Transaction Document, the transactions contemplated by any Transaction Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document; and
|
(f) |
the right or title of any person in or to, or the value or sufficiency of, any part of the Charged Property, the priority of any of the Transaction Security or the existence of any Security Interest affecting the Charged Property.
|
34.23 |
Deduction from amounts payable by the Agent
|
34.24 |
Reliance and engagement letters
|
35 |
Trust and security matters
|
35.1 |
Undertaking to pay
|
(a) |
Each Obligor who is a Party undertakes with the Security Agent as trustee for the Finance Parties that it will, on demand by the Security Agent, pay to the Security Agent as trustee for the Finance Parties all money from time to time owing to the other Finance Parties (in addition to paying any money owing under the Finance Documents to the Security Agent for its own account), and discharge all other obligations from time to time incurred, by it under or in connection with the Finance Documents.
|
(b) |
Each payment which such an Obligor makes to another Finance Party in accordance with any Finance Document shall, to the extent of the amount of that payment, satisfy that Obligor's corresponding obligation under paragraph (a) above to make that payment to the Security Agent.
|
35.2 |
Parallel debt
|
(a) |
Additional definitions
|
(b) |
Each Obligor irrevocably and unconditionally undertakes to pay to the Security Agent its Parallel Debt which shall be amounts equal to, and in the currency or currencies of, its Corresponding Debt.
|
(c) |
The Parallel Debt of an Obligor:
|
(i) |
shall become due and payable at the same time as its Corresponding Debt; and
|
(ii) |
is independent and separate from, and without prejudice to, its Corresponding Debt.
|
(d) |
For purposes of this clause 35.2, the Security Agent:
|
(i) |
is the independent and separate creditor of each Parallel Debt;
|
(ii) |
acts in its own name and not as agent, representative or trustee of the Finance Parties and its claims in respect of each Parallel Debt shall not be held on trust; and
|
(iii) |
shall have the independent and separate right to demand payment of each 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).
|
(e) |
The Parallel Debt of an Obligor shall be:
|
(i) |
decreased to the extent that its Corresponding Debt has been irrevocably and unconditionally paid or discharged; and
|
(ii) |
increased to the extent that its Corresponding Debt has increased,
|
(A) |
decreased to the extent that its Parallel Debt has been irrevocably and unconditionally paid or discharged; and
|
(B) |
increased to the extent that its Parallel Debt has increased,
|
(f) |
All amounts received or recovered by the Security Agent in connection with this clause 35.2 to the extent permitted by applicable law, shall be applied in accordance with clause 37.1 (
Order of application
).
|
(g) |
This clause 35.2 shall apply, with any necessary modifications, to each Finance Document.
|
35.3 |
No responsibility to perfect Transaction Security
|
(a) |
ascertain whether all deeds and documents which should have been deposited with it under or pursuant to any of the Security Documents have been so deposited;
|
(b) |
require the deposit with it of any deed or document certifying, representing or constituting the title of any Obligor to any of the Charged Property;
|
(c) |
obtain any licence, consent or other authority for the execution, delivery, legality, validity, enforceability or admissibility in evidence of any Finance Document or the Transaction Security;
|
(d) |
register, file or record or otherwise protect any of the Transaction Security (or the priority of any of the Transaction Security) under any law or regulation or to give notice to any person of the execution of any Finance Document or of the Transaction Security;
|
(e) |
take, or to require any Obligor to take, any step to perfect its title to any of the Charged Property or to render the Transaction Security effective or to secure the creation of any ancillary Security Interest under any law or regulation; or
|
(f) |
require any further assurance in relation to any Security Document.
|
35.4 |
Insurance by Security Agent
|
(a) |
The Security Agent shall not be obliged:
|
(i) |
to insure any of the Charged Property;
|
(ii) |
to require any other person to maintain any insurance; or
|
(iii) |
to verify any obligation to arrange or maintain insurance contained in any Finance Document,
|
(b) |
Where the Security Agent is named on any insurance policy as an insured party, it shall not be liable for any damages, costs or losses to any person as a result of its failure to notify the insurers of any material fact relating to the risk assumed by such insurers or any other information of any kind, unless the Agent requests it to do so in writing and the Security Agent fails to do so within fourteen days after receipt of that request.
|
35.5 |
Common parties
|
35.6 |
Custodians and nominees
|
35.7 |
Delegation by the Security Agent
|
(a) |
Each of the Security Agent, any Receiver and any Delegate may, at any time, delegate by power of attorney or otherwise to any person for any period, all or any right, power, authority or discretion vested in it in its capacity as such.
|
(b) |
That delegation may be made upon any terms and conditions (including the power to sub-delegate) and subject to any restrictions that the Security Agent, that Receiver or that Delegate (as the case may be) may, in its discretion, think fit in the interests of the Finance Parties.
|
(c) |
No Security Agent, Receiver or Delegate shall be bound to supervise, or be in any way responsible for any damages, costs or losses incurred by reason of any misconduct, omission or default on the part of, any such delegate or sub-delegate.
|
35.8 |
Additional trustees
|
(a) |
The Security Agent may at any time appoint (and subsequently remove) any person to act as a separate trustee or as a co-trustee jointly with it:
|
(i) |
if it considers that appointment to be in the interests of the Finance Parties;
|
(ii) |
for the purposes of conforming to any legal requirement, restriction or condition which the Security Agent deems to be relevant; or
|
(iii) |
for obtaining or enforcing any judgment in any jurisdiction,
|
(b) |
Any person so appointed shall have the rights, powers, authorities and discretions (not exceeding those given to the Security Agent under or in connection with the Finance Documents) and the duties, obligations and responsibilities that are given or imposed by the instrument of appointment.
|
(c) |
The remuneration that the Security Agent may pay to that person, and any costs and expenses (together with any applicable VAT) incurred by that person in performing its functions pursuant to that appointment shall, for the purposes of this Agreement, be treated as costs and expenses incurred by the Security Agent.
|
(d) |
At the request of the Security Agent, the other Parties shall forthwith execute all such documents and do all such things as may be required to perfect such appointment or removal and each such Party irrevocably authorises the Security Agent in its name and on its behalf to do the same.
|
(e) |
Such a person shall accede to this Agreement as a Security Agent to the extent necessary to carry out their role on terms satisfactory to the Security Agent.
|
(f) |
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 person if the Security Agent shall have exercised reasonable care in the selection of such person.
|
35.9 |
Acceptance of title
|
35.10 |
Winding up of trust
|
(a) |
all of the Secured Obligations and all other obligations secured by the Security Documents have been fully and finally discharged; and
|
(b) |
no Finance Party is under any commitment, obligation or liability (actual or contingent) to make advances or provide other financial accommodation to any Obligor pursuant to the Finance Documents,
|
(i) |
the trusts set out in this Agreement shall be wound up and the Security Agent shall release, without recourse or warranty, all of the Transaction Security and the rights of the Security Agent under each of the Security Documents; and
|
(ii) |
any Security Agent which has resigned pursuant to clause 34.16
(Resignation of the Agent or the Security Agent)
shall release, without recourse or warranty, all of its rights under each Security Document.
|
35.11 |
Powers supplemental to Trustee Acts
|
35.12 |
Disapplication of Trustee Acts
|
36 |
Enforcement of Transaction Security
|
36.1 |
Enforcement Instructions
|
(a) |
The Security Agent may refrain from enforcing the Transaction Security unless instructed otherwise by Majority Lenders.
|
(b) |
Subject to the Transaction Security having become enforceable in accordance with its terms, the Majority Lenders may give or refrain from giving instructions to the Security Agent to enforce or refrain from enforcing the Transaction Security as they see fit.
|
(c) |
The Security Agent is entitled to rely on and comply with instructions given in accordance with this clause 36.1.
|
36.2 |
Manner of enforcement
|
36.3 |
Waiver of rights
|
36.4 |
Enforcement through Security Agent only
|
(a) |
The other Finance Parties shall not have any independent power to enforce, or have recourse to, any of the Transaction Security or to exercise any right, power, authority or discretion arising or to grant any consents or releases under the Security Documents except through the Security Agent.
|
(b) |
Each Finance Party (other than the Security Agent) 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 enforce or have recourse to the relevant Transaction Security or to exercise any such right, power, authority or discretion or to grant any such consent or release.
|
37 |
Application of proceeds
|
37.1 |
Order of application
|
(a) |
in discharging any sums owing to the Security Agent (other than pursuant to clause 35.1 (
Undertaking to pay
)
or 35.2 (
Parallel debt
)), any Receiver or any Delegate;
|
(b) |
in discharging all costs and expenses incurred by any Finance Party in connection with any realisation or enforcement of the Transaction Security taken in accordance with the terms of this Agreement;
|
(c) |
in payment or distribution to the Agent on its own behalf and on behalf of the other Finance Parties for application in accordance with clause 40.6 (
Partial payments
);
|
(d) |
if none of the Obligors is under any further actual or contingent liability under any Finance Document, in payment or distribution to any person to whom the Security Agent is obliged to pay or distribute in priority to any Obligor; and
|
(e) |
the balance, if any, in payment or distribution to the relevant Obligor.
|
37.2 |
Investment of cash proceeds
|
(a) |
all or part of any Recoveries which are in the form of cash; and
|
(b) |
any cash which is generated by holding, managing, exploiting, collecting, realising or disposing of any proceeds of the Security Property which are not in the form of cash
|
37.3 |
Currency conversion
|
(a) |
For the purpose of, or pending the discharge of, any of the Secured Obligations the Security Agent may:
|
(i) |
convert any moneys received or recovered by the Security Agent from one currency to another; and
|
(ii) |
notionally convert the valuation provided in any opinion or valuation from one currency to another,
|
(b) |
The obligations of any Obligor to pay in the due currency shall only be satisfied:
|
(i) |
in the case of paragraph (a)(i) above, to the extent of the amount of the due currency purchased after deducting the costs of conversion; and
|
(ii) |
in the case of paragraph (a)(ii) above, to the extent of the amount of the due currency which results from the notional conversion referred to in that paragraph.
|
37.4 |
Permitted Deductions
|
37.5 |
Good discharge
|
(a) |
Any distribution or payment to be made in respect of the Secured Obligations by the Security Agent may be made to the Agent on behalf of the Finance Parties.
|
(b) |
Any distribution or payment made as described in paragraph (a) above shall be a good discharge, to the extent of that payment or distribution, by the Security Agent to the extent of that payment.
|
(c) |
The Security Agent is under no obligation to make the payments to the Agent under paragraph (a) above in the same currency as that in which the Secured Liabilities owing to the relevant Finance Party are denominated pursuant to the relevant Finance Document.
|
37.6 |
Calculation of amounts
|
(a) |
notionally convert the Secured Liabilities owed to any person into a common base currency (decided in its discretion by the Security Agent), that notional conversion to be made at the spot rate at which the Security Agent is able to purchase the notional base currency with the actual currency of the Secured Liabilities owed to that person at the time at which that calculation is to be made; and
|
(b) |
assume that all amounts received or recovered as a result of the enforcement or realisation of the Security Property are applied in discharge of the Secured Liabilities in accordance with the terms of the Finance Documents under which those Secured Liabilities have arisen.
|
37.7 |
Release to facilitate enforcement and realisation
|
(a) |
Each Finance Party acknowledges that, for the purpose of any enforcement action by the Security Agent or a Receiver and/or maximising or facilitating the realisation of the Charged Property, it may be desirable that certain rights or claims against an Obligor and/or under certain of the Transaction Security, be released.
|
(b) |
Each other Finance Party hereby irrevocably authorises the Security Agent (acting on the instructions of the Agent) to grant any such releases to the extent necessary to effect such enforcement action and/or realisation including, to the extent necessary for such purpose, to execute release documents in the name of and on behalf of the other Finance Parties.
|
(c) |
Where the relevant enforcement is by way of disposal of shares in the Borrower, the requisite release may include releases of all claims (including under guarantees) of the Finance Parties and/or the Security Agent against the Borrower and of all Security Interests over the assets of the Borrower.
|
37.8 |
Dealings with Security Agent
|
37.9 |
Disclosure between Finance Parties and Security Agent
|
37.10 |
Notification of prescribed events
|
(a) |
If an Event of Default or Default either occurs or ceases to be continuing, the Agent shall, upon becoming aware of that occurrence or cessation, notify the Security Agent.
|
(b) |
If the Security Agent enforces, or takes formal steps to enforce, any of the Transaction Security it shall notify each other Finance Party of that action.
|
(c) |
If any Finance Party exercises any right it may have to enforce, or to take formal steps to enforce, any of the Transaction Security it shall notify the Security Agent and the Security Agent shall, upon receiving that notification, notify each other Finance Party of that action.
|
38 |
Conduct of business by the Finance Parties
|
38.1 |
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.
|
39 |
Sharing among the Finance Parties
|
39.1 |
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 40
(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 40.6
(Partial payments)
.
|
39.2 |
Redistribution of payments
|
39.3 |
Recovering Finance Party's rights
|
39.4 |
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.
|
39.5 |
Exceptions
|
(a) |
This clause 39 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.
|
(b) |
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, if:
|
(i) |
it notified that other Finance Party of the legal or arbitration proceedings;
|
(ii) |
the taking legal or arbitration proceedings was in accordance with the terms of this Agreement; and
|
(iii) |
that other Finance Party had an opportunity to participate in those legal or arbitration proceedings but did not do so as soon as reasonably practicable having received notice and did not take separate legal or arbitration proceedings.
|
40 |
Payment mechanics
|
40.1 |
Payments to the Agent
|
(a) |
On each date on which an Obligor or a Lender is required to make a payment under a Finance Document, 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.
|
(b) |
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 such Participating Member State or London, as specified by the Agent) and with such bank as the Agent, in each case, specifies.
|
40.2 |
Distributions by the Agent
|
40.3 |
Distributions to an Obligor
|
40.4 |
Clawback and pre-funding
|
(a) |
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.
|
(b) |
Unless paragraph (c) below applies, 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.
|
(c) |
If the Agent has notified the Lenders that it is willing to make available amounts for the account of the Borrower before receiving funds from the Lenders then if and to the extent that the Agent does so but it proves to be the case that it does not then receive funds from a Lender in respect of a sum which it paid to a Borrower:
|
(i) |
the Agent shall notify the Borrower of that Lender's identity and the Borrower shall on demand refund it to the Agent; and
|
(ii) |
the Lender by whom those funds should have been made available or, if that Lender fails to do so, the Borrower, shall on demand pay to the Agent the amount (as certified by the Agent) which will indemnify the Agent against any funding cost incurred by it as a result of paying out that sum before receiving those funds from that Lender.
|
40.5 |
Impaired Agent
|
(a) |
If, at any time, the Agent becomes an Impaired Agent, the Borrower or a Lender which is required to make a payment under the Finance Documents to the Agent in accordance with clause 40.1
(Payments to the Agent)
may instead either:
|
(i) |
pay that amount direct to the required recipient(s); or
|
(ii) |
if in its absolute discretion it considers that it is not reasonably practicable to pay that amount direct to the required recipient(s), pay that amount or the relevant part of that amount to an interest-bearing account held with an Acceptable Bank within the meaning of paragraph (a) of the definition of "Acceptable Bank" and in relation to which no Insolvency Event has occurred and is continuing, in the name of the Borrower or the Lender making the payment (the
Paying Party
) and designated as a trust account for the benefit of the Party or Parties beneficially entitled to that payment under the Finance Documents (the
Recipient Party
or
Recipient Parties
).
|
(b) |
All interest accrued on the amount standing to the credit of the trust account shall be for the benefit of the Recipient Party or the Recipient Parties pro rata to their respective entitlements.
|
(c) |
A Party which has made a payment in accordance with this clause 40.5 shall be discharged of the relevant payment obligation under the Finance Documents and shall not take any credit risk with respect to the amounts standing to the credit of the trust account.
|
(d) |
Promptly upon the appointment of a successor Agent in accordance with this Agreement, each Paying Party shall (other than to the extent that that Party has given an instruction pursuant to paragraph (e) below) give all requisite instructions to the bank with whom the trust account is held to transfer the amount (together with any accrued interest) to the successor Agent for distribution to the relevant Recipient Party or Recipient Parties in accordance with clause 40.2
(Distributions by the Agent)
.
|
(e) |
A Paying Party shall, promptly upon request by a Recipient Party and to the extent:
|
(i) |
that it has not given an instruction pursuant to paragraph (d) above; and
|
(ii) |
that it has been provided with the necessary information by that Recipient Party,
|
40.6 |
Partial payments
|
(a) |
If the Agent receives a payment for application against amounts due in respect of any 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
|
(i) |
first
, in or towards payment pro rata of any unpaid amount owing to the Agent, the Security Agent or the Arranger for their own account under those Finance Documents;
|
(ii) |
secondly
, in or towards payment to the Lenders pro rata of any amount owing to the Lenders under clause 34.15 (
Lenders' indemnity to the Agent and others
);
|
(iii) |
thirdly
, in or towards payment to the Lenders pro rata of all other amounts due to them but unpaid under the Finance Documents; and
|
(iv) |
fourthly
, in or towards payment pro rata of any other sum due but unpaid under the Finance Documents.
|
(b) |
The Agent shall, if so directed by all the Lenders and with prior written notice to the Obligors, vary the order set out in paragraphs (ii) to (iv) of paragraph (a) above.
|
(c) |
Paragraphs (a) and (b) above will override any appropriation made by an Obligor.
|
40.7 |
No set-off by Obligors
|
40.8 |
Business Days
|
(a) |
Any payment under the Finance Documents 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).
|
(b) |
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.
|
40.9 |
Currency of account
|
(a) |
Subject to paragraphs (b) and (c) below, dollars is the currency of account and payment for any sum due from an Obligor under any Finance Document.
|
(b) |
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.
|
(c) |
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.
|
(d) |
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.
|
40.10 |
Change of currency
|
(a) |
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:
|
(i) |
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 Borrower ); and
|
(ii) |
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).
|
(b) |
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 Borrower ) specifies to be necessary, be amended to comply with any generally accepted conventions and market practice in the Interbank Market and otherwise to reflect the change in currency.
|
40.11 |
Disruption to payment systems etc.
|
(a) |
the Agent may, and shall if requested to do so by the Borrower, consult with the Borrower with a view to agreeing with the Borrower 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 Borrower in relation to any changes mentioned in paragraph (a) above if, in its reasonable 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 Borrower shall (whether or not it is finally determined that a 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 46
(Amendments and 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 40.11; and
|
(f) |
the Agent shall notify the Finance Parties of all changes agreed pursuant to paragraph (d) above.
|
41 |
Set-off
|
42 |
Notices
|
42.1 |
Communications in writing
|
42.2 |
Addresses
|
(a) |
in the case of any Obligor who 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,
|
42.3 |
Delivery
|
(a) |
Any communication or document made or delivered by one person to another under or in connection with the Finance Documents will only be effective 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 and, if a particular department or officer is specified as part of its address details provided under clause 42.2
(Addresses)
, if addressed to that department or officer.
|
(b) |
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).
|
(c) |
All notices from or to an Obligor shall be sent through the Agent.
|
(d) |
Any communication or document made or delivered to the Borrower in accordance with this clause 42.3 will be deemed to have been made or delivered to each of the Obligors.
|
(e) |
Any communication or document which becomes effective, in accordance with paragraphs (a) to (d) above, after 5:00 p.m. in the place of receipt shall be deemed only to become effective on the following day.
|
42.4 |
Notification of address
|
42.5 |
Communication when Agent is Impaired Agent
|
42.6 |
Electronic communication
|
(a) |
Any communication to be made between any two Parties under or in connection with the Finance Documents may be made by electronic mail or other electronic means (including, without limitation, by way of posting to a secure website) if those two Parties:
|
(i) |
notify each other in writing of their electronic mail address and/or any other information required to enable the transmission of information by that means; and
|
(ii) |
notify each other of any change to their address or any other such information supplied by them by not less than five Business Days' notice.
|
(b) |
Any such electronic communication as specified in paragraph (a) above to be made between an Obligor and a Finance Party may only be made in that way to the extent that those two Parties agree that, unless and until notified to the contrary, this is to be an accepted form of communication.
|
(c) |
Any such electronic communication as specified in paragraph (a) above made between any two Parties will be effective only when actually received (or made available) in readable form and, in the case of any electronic communication made by a Party to the Agent or the Security Agent, only if it is addressed in such a manner as the Agent or the Security Agent shall specify for this purpose.
|
(d) |
Any electronic communication which becomes effective, in accordance with paragraph (c) above, after 5:00 p.m. in the place in which the Party to whom the relevant communication is sent or made available has its address for the purpose of this Agreement or any other Finance Document shall be deemed only to become effective on the following day.
|
(e) |
Any reference in a Finance Document to a communication being sent or received shall be construed to include that communication being made available in accordance with this clause 42.6.
|
42.7 |
English language
|
(a) |
Any notice given under or in connection with any Finance Document must be in English.
|
(b) |
All other documents provided under or in connection with any Finance Document must be:
|
(i) |
in English; or
|
(ii) |
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.
|
43 |
Calculations and certificates
|
43.1 |
Accounts
|
43.2 |
Certificates and determinations
|
43.3 |
Day count convention
|
44 |
Partial invalidity
|
45 |
Remedies and waivers
|
46 |
Amendments and waivers
|
46.1 |
Required consents
|
(a) |
Subject to clause 46.2
(All Lender matters)
and clause 46.3
(Other exceptions)
, any term of the Finance Documents may be amended or waived only with the consent of the Majority Lenders and the Borrower and any such amendment or waiver will be binding on all the Finance Parties and other Obligors.
|
(b) |
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 46.
|
(c) |
Without prejudice to the generality of paragraphs (c), (d) and (e) of clause 34.11
(Rights and discretions of the 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.
|
(d) |
Each Obligor agrees to any such amendment or waiver permitted by this clause 46 which is agreed to by the Borrower. This includes any amendment or waiver which would, but for this paragraph (d), require the consent of the Guarantor.
|
46.2 |
All Lender matters
|
(a) |
the definition of "Majority Lenders" in clause 1.1
(Definitions)
;
|
(b) |
the definition of "Last Availability Date" in clause 1.1
(Definitions)
;
|
(c) |
an extension to the date of payment of any amount under the Finance Documents;
|
(d) |
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;
|
(e) |
an increase in, or an extension of, any Commitment or any requirement that a cancellation of Commitments reduces the Commitments of the Lenders rateably under the Facility;
|
(f) |
a change to the Borrower or any other Obligor;
|
(g) |
any provision which expressly requires the consent or approval of all the Lenders;
|
(h) |
clause 39 (Sharing among the Finance Parties);
|
(i) |
clause 2.2 (Finance Parties' rights and obligations), clause 7.1 (Illegality), clause 32 (Changes to the Lenders), clause 8.9 (Application of prepayments), this clause 46, clause 51 (Governing law) or clause 52.1 (Jurisdiction of English courts);
|
(j) |
the order of distribution under clause 37.1
(Order of application)
;
|
(k) |
the order of distribution under clause 40.6
(Partial payments)
;
|
(l) |
the currency in which any amount is payable under any Finance Document;
|
(m) |
an increase in any Commitment or the Total Commitments, an extension of any period within which the Facility is available for Utilisation or any requirement that a cancellation of Commitments reduces the Commitments rateably;
|
(n) |
(other than as expressly permitted by the provisions of any Finance Document) the nature or scope of:
|
(i) |
any guarantee and indemnity granted under any Finance Document (including under clause 18
(Guarantee and indemnity)
);
|
(ii) |
the Charged Property; or
|
(iii) |
the manner in which the proceeds of enforcement of the Transaction Security are distributed;
|
(o) |
the circumstances in which any of the Transaction Security is permitted or required to be released under any of the Finance Documents,
|
46.3 |
Other exceptions
|
(a) |
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, the Security Agent or the Arranger (as the case may be).
|
(b) |
Notwithstanding clauses 46.1 and 46.2 and paragraph (a) above, 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.
|
46.4 |
Replacement of Screen Rate
|
46.5 |
Releases
|
(a) |
any Charged Property from the Transaction Security; or
|
(b) |
any Obligor from any of its guarantee or other obligations under any Finance Document.
|
46.6 |
Disenfranchisement of Defaulting Lenders
|
(a) |
For so long as a Defaulting Lender has any Available Commitment, in ascertaining:
|
(i) |
the Majority Lenders; or
|
(ii) |
whether:
|
(A) |
any given percentage (including, for the avoidance of doubt, unanimity) of the Total Commitments under the Facility; or
|
(B) |
the agreement of any specified group of Lenders,
|
(b) |
For the purposes of this clause 46.6, the Agent may assume that the following Lenders are Defaulting Lenders:
|
(i) |
any Lender which has notified the Agent that it has become a Defaulting Lender; and
|
(ii) |
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,
|
46.7 |
Excluded Commitments
|
(a) |
any Defaulting Lender fails to respond to a request for a consent, waiver, amendment of or in relation to any term of any Finance Document or any other vote of Lenders under the terms of this Agreement within 10 Business Days of that request being made; or
|
(b) |
any Lender which is not a Defaulting Lender fails to respond to such a request (other than an amendment, waiver or consent referred to in paragraphs (b), (c), (d) and (m) of clause 46.2
(All Lender matters)
) or such a vote within 10 Business Days of that request being made,
|
(i) |
its Commitment or its participation in the Loan shall not be included for the purpose of calculating the Total Commitments or the amount of the Loan when ascertaining whether any relevant percentage (including, for the avoidance of doubt, unanimity) of Total Commitments or the amount of the Loan has been obtained to approve that request; and
|
(ii) |
its status as a Lender shall be disregarded for the purpose of ascertaining whether the agreement of any specified group of Lenders has been obtained to approve that request.
|
46.8 |
Replacement of a Defaulting Lender
|
(a) |
The Borrower may, at any time a Lender has become and continues to be a Defaulting Lender, by giving 10 Business Days' prior notice to the Agent and such Lender replace such Lender by requiring such Lender to (and to the extent permitted by law such Lender shall) assign pursuant to clause 32
(Changes to the Lenders)
all (and not part only) of its rights under this Agreement (and any Security Document to which that Lender is a party in its capacity as a Lender) to an Eligible Institution (a
Replacement Lender
) which confirms its willingness to undertake and does undertake all the obligations or all the relevant obligations of the assigning Lender in accordance with clause 32
(Changes to the Lenders)
for a purchase price in cash payable at the time of transfer which is either:
|
(i) |
in an amount equal to:
|
(A) |
the outstanding principal amount of such Lender's participation in the Loan;
|
(B) |
all accrued interest owing to such Lender;
|
(C) |
the Break Costs which would have been payable to such Lender pursuant to clause 11.5
(Break Costs)
had the Borrower prepaid in full that Lender's participation in the Loan on the date of the assignment; and
|
(D) |
all other amounts payable to that Lender under the Finance Documents on the date of the assignment or
|
(ii) |
in an amount agreed between that Defaulting Lender, the Replacement Lender and the Borrower and which does not exceed the amount described in paragraph (i) above.
|
(b) |
Any assignment by a Defaulting Lender pursuant to this clause 46.8 shall be subject to the following conditions:
|
(i) |
the Borrower shall have no right to replace the Agent or the Security Agent;
|
(ii) |
neither the Agent nor the Defaulting Lender shall have any obligation to the Borrower to find a Replacement Lender;
|
(iii) |
the assignment must take place no later than five Business Days after the notice referred to in paragraph (a) above;
|
(iv) |
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; and
|
(v) |
the Defaulting Lender shall only be obliged to assign its rights pursuant to paragraph (a) 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 assignment to the Replacement Lender.
|
(c) |
The Defaulting Lender shall perform the checks described in paragraph (b) (v) above as soon as reasonably practicable following delivery of a notice referred to in paragraph (a) above and shall notify the Agent and the Borrower when it is satisfied that it has complied with those checks.
|
46.9 |
Disenfranchisement of Borrower Affiliates
|
(a) |
For so long as a Borrower 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) |
the Majority Lenders; or
|
(B) |
whether:
|
(1) |
any given percentage (including, for the avoidance of doubt, unanimity) of the Total Commitments; or
|
(2) |
the agreement of any specified group of Lenders,
|
(b) |
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 Borrower Affiliate (a Notifiable Debt Purchase Transaction), such notification to be substantially in the form set out in Part I of Schedule 7 (
Forms of Notifiable Debt Purchase Transaction Notice
).
|
(c) |
A Lender shall promptly notify the Agent if a Notifiable Debt Purchase Transaction to which it is a party:
|
(i) |
is terminated; or
|
(ii) |
ceases to be with a Borrower Affiliate,
|
(d) |
Each Borrower Affiliate that is a Lender agrees that:
|
(i) |
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
|
(ii) |
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.
|
47 |
Confidential Information
|
47.1 |
Confidential Information
|
47.2 |
Disclosure of Confidential Information
|
(a) |
to any of its Affiliates and Related Funds and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives such Confidential Information as that Finance Party 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:
|
(i) |
to (or through) whom it assigns (or may potentially assign) all or any of its rights and/or obligations under one or more Finance Documents or which succeeds (or which may potentially succeed) it as Agent or Security Agent and, in each case, to any of that person's Affiliates, Related Funds, Representatives, professional advisers and partners;
|
(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 one or more Obligors and to any of that person's Affiliates, Related Funds, Representatives, professional advisers and partners;
|
(iii) |
appointed by any Finance Party or by a person to whom paragraphs (b)(i) or (b)(ii) above applies to receive communications, notices, information or documents delivered pursuant to the Finance Documents on its behalf (including, without limitation, any person appointed under paragraph (b) of clause 34.20
(Relationship with the Lenders)
);
|
(iv) |
who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in paragraphs (b)(i) or (b)(ii) above;
|
(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 information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes;
|
(vii) |
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)
;
|
(viii) |
who is a Party; or
|
(ix) |
with the consent of the Borrower;
|
(c) |
to any person appointed by that Finance Party or by a person to whom paragraphs (b)(i) or (b)(ii) above 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) if the service provider to whom the Confidential Information 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 Borrower and the relevant Finance Party; and
|
(d) |
to any rating agency (including its professional 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 and/or the Obligors.
|
47.3 |
Entire agreement
|
47.4 |
Inside information
|
47.5 |
Notification of disclosure
|
(a) |
of the circumstances of any disclosure of Confidential Information made to 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 or the rules of any relevant stock exchange or pursuant to any applicable law or regulation pursuant to clause 47.2 (
Disclosure of Confidential Information
) except where such disclosure is made to any such person 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 47.
|
47.6 |
Continuing obligations
|
(a) |
the date on which all amounts payable by the Obligors under or in connection with the Finance Documents 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.
|
48 |
Confidentiality of Funding Rates
|
48.1 |
Confidentiality and disclosure
|
(a) |
The Agent and each Obligor who is a Party agree to keep each Funding Rate confidential and not to disclose it to anyone, save to the extent permitted by paragraphs (b) and (c) below.
|
(b) |
The Agent may disclose:
|
(i) |
any Funding Rate to the Borrower pursuant to clause 9.4
(Notification of rates of interest)
; and
|
(ii) |
any Funding Rate to any person appointed by it to provide administration services in respect of one or more of the Finance Documents to the extent necessary to enable such service provider to provide those services if the service provider to whom that information 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 Lender.
|
(c) |
The Agent may disclose any Funding Rate to:
|
(i) |
any of its Affiliates and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives if any person to whom that Funding Rate is to be given pursuant to this paragraph (i) is informed in writing of its confidential nature and that it 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 Funding Rate or is otherwise bound by requirements of confidentiality in relation to it;
|
(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 Funding Rate is to be given is informed in writing of its confidential nature and that it may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of the Agent or the relevant Obligor, 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 Funding Rate is to be given is informed in writing of its confidential nature and that it may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of the Agent or the relevant Obligor, 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 Lender.
|
48.2 |
Related obligations
|
(a) |
The Agent and each Obligor acknowledge that each Funding Rate is or may be price-sensitive information and that its use may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and the Agent and each Obligor undertake not to use any Funding Rate for any unlawful purpose.
|
(b) |
The Agent and each Obligor agree (to the extent permitted by law and regulation) to inform the relevant Lender:
|
(i) |
of the circumstances of any disclosure made pursuant to clause 48.1(c)(ii)
(Confidentiality and disclosure)
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 information has been disclosed in breach of this clause 48.
|
48.3 |
No Event of Default
|
49 |
Counterparts
|
50 |
Contractual recognition of bail-in
|
(a) |
any Bail-In Action in relation to any such liability, including (without limitation):
|
(i) |
a reduction, in full or in part, in the principal amount, or outstanding amount due (including any accrued but unpaid interest) in respect of any such liability;
|
(ii) |
a conversion of all, or part of, any such liability into shares or other instruments of ownership that may be issued to, or conferred on, it; and
|
(iii) |
a cancellation of any such liability; and
|
(b) |
a variation of any term of any Finance Document to the extent necessary to give effect to any Bail-In Action in relation to any such liability.
|
51 |
Governing law
|
52 |
Enforcement
|
52.1 |
Jurisdiction of English courts
|
(a) |
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
).
|
(b) |
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.
|
(c) |
Notwithstanding paragraph (a) above, 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.
|
52.2 |
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 an agent for service of process 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:
|
Astarte International Inc.
|
Original Jurisdiction
|
The Republic of the Marshall Islands
|
Registration number
(or equivalent, if any) |
89977
|
Registered office
|
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
|
Address for service of notices
|
c/o Central Mare Inc., 1 Vas. Sofias Street & Meg. Alexandrou, 151 24 Maroussi, Greece. Attn: Andreas Louka.
Email: legal@centralmare.com. Tel.: +30 210 812 8320
|
English process agent (if not incorporated in England)
|
Top Properties (London) Limited, 247 Gray's Inn Road, London WC1X 8QZ, United Kingdom
|
Name:
|
Top Ships Inc.
|
Original Jurisdiction
|
The Republic of the Marshall Islands
|
Registration number (or equivalent, if any)
|
3571
|
Registered office
|
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
|
Address for service of notices
|
c/o Central Mare Inc., 1 Vas. Sofias Street & Meg. Alexandrou, 151 24 Maroussi, Greece. Attn: Andreas Louka.
Email: legal@ centralmare.com. Tel.: +30 210 812 8320
|
English process agent (if not incorporated in England)
|
Top Properties (London) Limited, 247 Gray's Inn Road, London WC1X 8QZ, United Kingdom
|
Name
|
Amsterdam Trade Bank N.V.
|
Commitment $
|
23,500,000
|
TOTAL $
|
23,500,000
|
Total Commitments $
|
23,500,000
|
TOTAL $
|
23,500,000
|
Name
|
Amsterdam Trade Bank N.V.
|
Facility Office, address and attention details for notices
|
Herengracht 469
Amsterdam, 1017 BS
The Netherlands
Attn:
lraklis Tsirigotis / Vassilis Kolovos
Email:
i.tsirigotis@atbank.nl / v.kolovos@atbank.nl
|
Name
|
Amsterdam Trade Bank N.V.
|
Facility Office, address and attention details for notices
|
Herengracht 469
Amsterdam, 1017 BS
The Netherlands
Attn:
lraklis Tsirigotis / Vassilis Kolovos
Email:
i.tsirigotis@atbank.nl
/ v.kolovos@atbank.nl
|
Name
|
Amsterdam Trade Bank N.V.
|
Address and attention details for notices
|
Herengracht 469
Amsterdam, 1017 BS
The Netherlands
Attn:
lraklis Tsirigotis / Vassilis Kolovos
Email:
i.tsirigotis@atbank.nl
/ v.kolovos@atbank.nl
|
Builder:
|
Hyundai Mipo Dockyard Co., Ltd.
|
Builder's registered office:
|
100 Bangeojinsunhwan-Doro, Dung-Gu, Ulsan 44113, Korea
|
Hull Number:
|
2648
|
Scheduled Delivery Date:
|
31 July 2018
|
Date and description of Building Contract:
|
shipbuilding contract dated 20 April 2017 as amended and supplemented by an Amendment No. 1 thereto dated 18 July 2017
|
Contract Price:
|
$31,900,000
|
Flag State:
|
The Republic of the Marshall Islands
|
Port of Registry:
|
Majuro
|
Charter description:
|
time charter dated 1 September 2017
|
Charterer:
|
Central Ship Chartering Inc.
|
Classification:
|
+100A1, Double Hull Oil and Chemical Tanker, Ship Type 2 and Ship Type 3, ESP, CSR, +LMC, UMS, *IWS, LI, SRM4, ECO (IHM, P), NAV1, IGS, ShipRight (CM, ACS(B)) with descriptive notes COW(LR), ETA, ShipRight (BWMP(S)), SERS, SCM, VECS)
|
Classification Society:
|
Lloyds Register of Shipping
|
Major Casualty Amount:
|
$500,000
|
1 |
Original Obligors' corporate documents
|
(a) |
A copy of the Constitutional Documents of each Original Obligor (other than the Charterer) and minutes of any extraordinary shareholders' meeting(s) amending the Constitutional Documents of CSM.
|
(b) |
A copy of a resolution of the board of directors of each Original Obligor (other than the Charterer) (or, if applicable, any committee of such board empowered to approve and authorise the following matters):
|
(i) |
approving the terms of, and the transactions contemplated by, the Transaction Documents to which it is a party (its
Relevant Documents
) and resolving that it execute, deliver and perform the Relevant Documents to which it is a party;
|
(ii) |
authorising a specified person or persons to execute its 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 its Relevant Documents.
|
(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 specimen of the signature of each person authorised by the resolution referred to in paragraph (b) above in relation to its Relevant Documents and related documents.
|
(e) |
A copy of a resolution signed by all the holders of the issued shares in each Original Obligor (other than the Charterer), approving the terms of, and the transactions contemplated by, its Relevant Documents.
|
(f) |
A copy of a resolution of the board of directors of each corporate shareholder of each Original Obligor (other than the Charterer) approving the terms of the resolution referred to in paragraph (e) above and in relation to CSM, a copy of a resolution of the shareholders' meeting of CSM:
|
(i) |
ratifying the terms and conditions of the Finance Documents;
|
(ii) |
ratifying the authorisation given to a specified person or persons to execute the Finance Documents; and
|
(iii) |
authorizing the directors pursuant to article 23 of the Sovereign Ordinance of March 5th, 1895.
|
(g) |
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, guarantee, security or similar limit binding on any Original Obligor (other than the Charterer) to be exceeded.
|
(h) |
A copy of any power of attorney under which any person is appointed by any Original Obligor (other than the Charterer) to execute any of its Relevant Documents on its behalf.
|
(i) |
A certificate of an authorised signatory of each relevant Original Obligor (other than the Charterer) certifying that each copy document relating to it specified in this Part of this Schedule is correct, complete and in full force and effect and has not been amended or superseded 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.
|
(j) |
A goodstanding certificate from the Marshall Islands competent authority in respect of the Borrower and the Guarantor (not more than 14 days before the proposed Utilisation Date).
|
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 prior to signing this Agreement.
|
(b) |
A legal opinion of the legal advisers to the Arranger, the Security Agent and the Agent in England and also each jurisdiction in which an Obligor is incorporated, or in which an Account opened at the relevant time is established substantially in the form approved by the Agent prior to signing this Agreement.
|
3 |
Other documents and evidence
|
(a) |
Evidence that any process agent referred to in clause 52.2 (
Service of process
) or any equivalent provision of any other Finance Document entered into on or before the 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 considers to be necessary (if it has notified the Borrower 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 Fee Letter duly executed and evidence that the fees, commissions, costs and expenses then due from the Borrower pursuant to clause 12
(Fees)
and clause 17
(Costs and expenses)
have been paid or will be paid by the Utilisation Date.
|
4 |
Bank Account
|
5 |
Charter
|
(a) |
The Charter, duly executed, on such terms (including as to the identity of the Charterer, the charter rates and their tenors) and otherwise approved by the Majority Lenders.
|
(b) |
Such evidence as the Agent may require as to the due incorporation of the Charterer and any other party to the Charter Documents (other than an Obligor), their power and authority to enter into and perform those documents and the authorisation of their entry into them.
|
6 |
"Know your customer" information
|
7 |
Disclosed Persons
|
8 |
Charter hire
|
1 |
Corporate documents
|
(a) |
A certificate of an authorised signatory of the Borrower 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 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, the General Assignment and the Charter Assignment duly executed by the Borrower.
|
(b) |
Any Manager's Undertaking required at Delivery pursuant to the Finance Documents duly executed by the relevant manager.
|
(c) |
Duly executed notices of assignment and acknowledgements of those notices as required by any of the above Security Documents.
|
3 |
Delivery and registration of Ship
|
(a) |
is legally and beneficially owned by the Borrower and registered in the name of the Borrower 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 overdue requirements and recommendations of the relevant Classification Society;
|
(c) |
is insured in the manner required by the Finance Documents; and
|
(d) |
has been delivered, and accepted for service, under the Charter.
|
4 |
Mortgage registration
|
5 |
Legal opinions
|
(a) |
A legal opinion of Norton Rose Fulbright Greece addressed to the Security Agent and the Agent on matters of English law, substantially in the form approved by the Agent prior to signing this Agreement in relation to Security Documents.
|
(b) |
A legal opinion of the legal advisers to the Security Agent and the Agent in each jurisdiction in which an Obligor is incorporated and/or which is or is to be the Flag State of the Ship, or in which the Operating Account opened at the relevant time is established substantially in the form approved by the Agent prior to signing this Agreement.
|
6 |
Insurance
|
(a) |
an opinion from BankServe Insurance Services Ltd. appointed by the Agent on such Insurances;
|
(b) |
evidence that such Insurances have been placed in accordance with clause 26 (
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.
|
7 |
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 Ship for the purposes of that code;
|
(b) |
the safety management certificate in respect of the Ship issued in accordance with the ISM Code (or evidence that such certificate is to be issued shortly after Delivery);
|
(c) |
the international ship security certificate in respect of the Ship issued under the ISPS Code (or evidence that such certificate is to be issued shortly after Delivery); and
|
(d) |
if so requested by the Agent, any other certificates issued under any applicable code required to be observed by the Ship or in relation to its operation under any applicable law.
|
8 |
Value of security
|
9 |
Construction matters
|
(a) |
Evidence that any Authorisations required from any government entity for the export of the Ship by the Builder have been obtained or that no such Authorisations are required.
|
(b) |
Evidence that the full contract price of the Ship (as adjusted in accordance with its Building Contract) will have been paid upon the Utilisation being made and that the Builder and the Shipyard will not have any lien or other right to detain the ship on its Delivery.
|
(c) |
The original or a copy, certified by a legal advisor of the Borrower to be a true and complete copy, of the builder's certificate, the bill of sale conveying title to the Ship to the
|
10 |
Fees and expenses
|
11 |
Management Agreement
|
12 |
Process Agent
|
13 |
Refinancing
|
14 |
Share Security
|
From:
|
Astarte International Inc.
|
To:
|
Amsterdam Trade Bank N.V.
|
Dated:
|
[
l
]
|
1 |
We refer to the Facility Agreement. This is a Utilisation Request. Terms defined in the Facility Agreement have the same meaning in this Utilisation Request unless given a different meaning in this Utilisation Request.
|
2 |
We wish to borrow the Loan on the following terms:
|
Proposed Utilisation Date:
|
[
l
] (or, if that is not a Business Day, the next Business Day)
|
Amount:
|
$
[
l
]
|
3 |
We confirm that each condition specified in clause 4.4
(Further conditions precedent)
is satisfied on the date of this Utilisation Request.
|
4 |
The purpose of the Loan is [
specify purpose complying with clause (a) of the Facility Agreement
] and its proceeds should be credited to [
l
] [
specify account
]].
|
5 |
This Utilisation Request is irrevocable.
|
To:
|
Amsterdam Trade Bank N.V. as Agent
|
From:
|
[
The Existing Lender
] (the
Existing Lender
) and [
The New Lender
] (the
New Lender
)
|
1 |
We refer to the Facility Agreement. This agreement (the
Agreement
) shall take effect as a Transfer Certificate for the purposes of the Facility Agreement. Terms defined in the Facility Agreement have the same meaning in this Agreement unless given a different meaning in this Agreement.
|
2 |
We refer to clause 32.6
(Procedure for assignment)
of the Facility Agreement:
|
(a) |
The Existing Lender assigns absolutely to the New Lender all the rights of the Existing Lender under the Facility Agreement and the other Finance Documents which correspond to that portion of the Existing Lender's Commitment and participation in the Loan under the Facility Agreement as specified in the Schedule.
|
(b) |
The Existing Lender is released from the obligations owed by it which correspond to that portion of the Existing Lender's Commitment and participation in the Loan under the Facility Agreement specified in the Schedule (but the obligations owed by the Obligors under the Finance Documents shall not be released).
|
(c) |
On the Transfer Date the New Lender becomes a Party as a Lender and is bound by obligations equivalent to those from which the Existing Lender is released under paragraph (b) above.
|
(d) |
The proposed Transfer Date is [●].
|
(e) |
The Facility Office and address and attention details for notices of the New Lender for the purposes of clause 42.2
(Addresses)
of the Facility Agreement 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
(Limitation of responsibility of Existing Lenders)
of the Facility Agreement.
|
4 |
The New Lender confirms that it [is]/ [is not] a Borrower Affiliate.
|
5 |
This Agreement acts as notice to the Agent (on behalf of each Finance Party) and, upon delivery in accordance with clause 32.7
(Copy of Transfer Certificate to Borrower)
, to the Borrower (on behalf of each Obligor) of the assignment referred to in this Agreement.
|
6 |
This Agreement 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 Agreement.
|
7 |
This Agreement and any non-contractual obligations connected with it are governed by English law.
|
8 |
This Agreement has been entered into on the date stated at the beginning of this Agreement.
|
By:
|
By:
|
To:
|
Amsterdam Trade Bank N.V.as Agent
|
From:
|
Astarte International Inc. as Borrower
|
Dated:
|
[
l
]
|
1 |
I/We refer to the Facility Agreement. This is a Compliance Certificate in respect of the Borrower. Terms defined in the Facility 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:
|
(a) |
Minimum liquidity
: the cash balance in the Operating Account was [not] less than the minimum required amount of $[650,000] [300,000] at all times during the [six] [twelve] month period ended on [
l
], as shown in Appendix A
[attach relevant evidence]
; and
|
(b) |
Security Value
: the Security Value was [equal to] [less than] [more than] the Minimum Value calculated as shown in Appendix B
[attach relevant evidence]
.
|
3 |
[I/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.]
|
To:
|
Amsterdam Trade Bank N.V. as Agent
|
From:
|
Top Ships Inc. as Guarantor
|
Dated:
|
[
l
]
|
4 |
I/We refer to the Facility Agreement. This is a Compliance Certificate in respect of the Guarantor. Terms defined in the Facility Agreement have the same meaning when used in this Compliance Certificate unless given a different meaning in this Compliance Certificate.
|
5 |
I/We confirm that:
|
(a) |
Leverage
: the ratio of Total Net Debt to Fleet Market Value in respect of the Group was [
l
]:1.00, calculated as shown in [Appendix A] versus a maximum required ratio of 0.75:1.00
[attach relevant evidence]
; and
|
(b) |
Minimum liquidity
: the Group's Cash and Cash Equivalents were [
l
] calculated as shown in [Appendix B] versus a minimum required aggregate amount of (i) $750,000 per Fleet Vessel and (ii) $500,000 per Chartered Vessel
[attach relevant evidence]
.
|
6 |
[I/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.]
|
To:
|
Amsterdam Trade Bank N.V.as Agent
|
From:
|
[
The Lender
]
|
1 |
We refer to clause 46.9
(Disenfranchisement of Borrower 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 as set out below.
|
Amount of our Commitment to which Notifiable Debt Purchase Transaction relates:
|
[insert amount (of that Commitment) to which the relevant Debt Purchase Transaction applies]
|
To:
|
Amsterdam Trade Bank N.V. as Agent
|
From:
|
[
The Lender
]
|
1 |
We refer to clause 46.9
(Disenfranchisement of Borrower 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 [
l
] has [terminated]/ [ceased to be with a Borrower Affiliate].
*
|
3 |
The Notifiable Debt Purchase Transaction referred to in paragraph 2 above relates to the amount of our Commitment as set out below.
|
Amount of our Commitment to which Notifiable Debt Purchase Transaction relates:
|
[insert amount (of that Commitment) to which the relevant Debt Purchase Transaction applies]
|
From:
|
Astarte International Inc.
|
To:
|
Amsterdam Trade Bank N.V.
|
Item
|
Unit
|
Actual
|
Comment
|
1)
Average daily gross TCE hire earned
|
USD
|
||
2)
Total brokerage commission charged
|
USD
|
||
3)
Average daily net TCE hire earned
|
USD
|
||
4)
Total on-hire days
|
No.
|
||
5)
Total off-hire days
|
No.
|
||
6)
Average daily operating expenses
|
USD
|
||
7)
Average daily management fee
|
USD
|
||
8)
Average daily SG&A expenses
|
USD
|
||
9)
Total maintenance expenses*
|
USD
|
||
10)
Other expenses
|
USD
|
|
Dated 5 September 2017
|
ASTARTE INTERNATIONAL INC.
as Borrower
arranged by
AMSTERDAM TRADE BANK N.V.
with
AMSTERDAM TRADE BANK N.V.
as Agent
AMSTERDAM TRADE BANK N.V.
as Security Agent
and
TOP SHIPS INC.
as Guarantor
|
FACILITY AGREEMENT
for up to $8,993,100 Loan Facility |
Clause
|
Page
|
|
Section 1 - Interpretation
|
1
|
|
1
|
Definitions and interpretation
|
1
|
Section 2 - The Facility
|
21
|
|
2
|
The Facility
|
21
|
3
|
Purpose
|
21
|
4
|
Conditions of Utilisation
|
22
|
Section 3 - Utilisation
|
23
|
|
5
|
Utilisation
|
23
|
Section 4 - Repayment, Prepayment and Cancellation
|
25
|
|
6
|
Repayment
|
25
|
7
|
Illegality, prepayment and cancellation
|
25
|
8
|
Restrictions
|
28
|
Section 5 - Costs of Utilisation
|
30
|
|
9
|
Interest
|
30
|
10
|
Interest Periods
|
31
|
11
|
Changes to the calculation of interest
|
31
|
12
|
Fees
|
32
|
Section 6 - Additional Payment Obligations
|
34
|
|
13
|
Tax gross-up and indemnities
|
34
|
14
|
Increased Costs
|
38
|
15
|
Other indemnities
|
39
|
16
|
Mitigation by the Lenders
|
43
|
17
|
Costs and expenses
|
43
|
Section 7 - Guarantee
|
45
|
|
18
|
Guarantee and indemnity
|
45
|
Section 8 - Representations, Undertakings and Events of Default
|
48
|
|
19
|
Representations
|
48
|
20
|
Information undertakings
|
54
|
21
|
Financial covenants
|
57
|
22
|
General undertakings
|
58
|
23
|
Construction period
|
62
|
24
|
Dealings with Ship
|
64
|
25
|
Chartering undertakings
|
65
|
26
|
Bank accounts
|
65
|
27
|
Business restrictions
|
67
|
28
|
Events of Default
|
69
|
Section 9 - Changes to Parties
|
74
|
|
29
|
Changes to the Lenders
|
74
|
30
|
Changes to the Obligors
|
77
|
Section 10 - The Finance Parties
|
78
|
|
31
|
Roles of Agent, Security Agent and Arranger
|
78
|
32
|
Trust and security matters
|
89
|
33
|
Enforcement of Transaction Security
|
93
|
34
|
Application of proceeds
|
94
|
35
|
Conduct of business by the Finance Parties
|
97
|
36
|
Sharing among the Finance Parties
|
97
|
Section 11 - Administration
|
99
|
|
37
|
Payment mechanics
|
99
|
38
|
Set-off
|
102
|
39
|
Notices
|
103
|
40
|
Calculations and certificates
|
105
|
41
|
Partial invalidity
|
105
|
42
|
Remedies and waivers
|
105
|
43
|
Amendments and waivers
|
105
|
44
|
Confidential Information
|
110
|
45
|
Confidentiality of Funding Rates
|
112
|
46
|
Counterparts
|
113
|
47
|
Contractual recognition of bail-in
|
114
|
Section 12 - Governing Law and Enforcement
|
115
|
|
48
|
Governing law
|
115
|
49
|
Enforcement
|
115
|
Schedule 1 The original parties
|
116
|
|
Schedule 2 Ship information
|
118
|
|
Schedule 3 Conditions precedent
|
119
|
|
Schedule 4 Utilisation Request
|
124
|
|
Schedule 5 Form of Transfer Certificate
|
125
|
|
Schedule 6 Forms of Notifiable Debt Purchase Transaction Notice
|
128
|
|
Schedule 7 Form of Compliance Certificate
|
130
|
(1) |
ASTARTE INTERNATIONAL INC.
(the
Borrower
);
|
(2) |
TOP SHIPS INC.
(the
Guarantor
);
|
(3) |
AMSTERDAM TRADE BANK N.V.
as mandated lead arranger (the
Arranger
);
|
(4) |
THE FINANCIAL INSTITUTIONS
listed in Schedule 1 as lenders (the
Original Lenders
);
|
(5) |
AMSTERDAM TRADE BANK N.V.
as agent of the other Finance Parties (the
Agent
); and
|
(6) |
AMSTERDAM TRADE BANK N.V.
as security trustee for the Finance Parties (the
Security Agent
).
|
(b) |
any other bank or financial institution approved by the Agent and the Borrower.
|
(a) |
in relation to an EEA Member Country which has implemented, or which at any time implements, Article 55 of Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms, the relevant implementing law or regulation as described in the EU Bail-In Legislation Schedule from time to time; and
|
(b) |
in relation to any other state, any analogous law or regulation from time to time which requires contractual recognition of any Write-down and Conversion Powers contained in that law or regulation.
|
(a) |
any law or regulation in force as at the date hereof 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 (excluding the Margin) 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 relevant part of it or Unpaid Sum to the last day of the current Interest Period in respect of the Loan or relevant part of it or Unpaid Sum, had the relevant principal amount or Unpaid Sum received been paid on the last day of that Interest Period;
|
(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 assigned to it under this Agreement; and
|
(b) |
in relation to any other Lender, the amount of any Commitment assigned to it under this Agreement,
|
(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) |
information that:
|
(A) |
is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of clause 44
(Confidential Information)
; or
|
(B) |
is identified in writing or orally if given orally at the time of delivery as non-confidential by any member of the Group or any of its advisers; or
|
(C) |
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 aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality; and
|
(ii) |
any Funding Rate.
|
(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,
|
(i) |
its failure to pay is caused by:
|
(A) |
administrative or technical error; or
|
(B) |
a Disruption Event; and,
|
(ii) |
the Lender is disputing in good faith whether it is contractually obliged to make the payment in question.
|
(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) |
in respect of a Lender, the office or offices notified by that 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 or offices through which it will perform its obligations under this Agreement; or
|
(b) |
in respect of any other Finance Party, the office in the jurisdiction in which it is resident for tax purposes.
|
(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;
|
(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 2019,
|
(b) |
any amount raised under any acceptance under any acceptance credit or bill discounting facility (or dematerialised equivalent);
|
(c) |
any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;
|
(d) |
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;
|
(e) |
receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis and meet any requirement for de-recognition under GAAP);
|
(f) |
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);
|
(g) |
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;
|
(h) |
in respect of the Borrower only, any amount raised by the issue of shares which are redeemable (other than at the option of the issuer) before the Repayment Date or are otherwise classified as borrowings under GAAP);
|
(i) |
any amount of any liability under an advance or deferred purchase agreement if (i) 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 (ii) 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;
|
(k) |
the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (j) above.
|
(a) |
it has failed to make (or has notified a Party that it will not make) a payment required to be made by it under the Finance Documents by the due date for payment;
|
(b) |
the Agent otherwise rescinds or repudiates a Finance Document;
|
(c) |
(if the Agent is also a Lender) it is a Defaulting Lender under paragraphs (a) or (b) of the definition of "Defaulting Lender"; or
|
(d) |
an Insolvency Event has occurred and is continuing with respect to the Agent,
|
(i) |
its failure to pay is caused by:
|
(A) |
administrative or technical error; or
|
(B) |
a Disruption Event; and
|
(ii) |
the Agent is disputing in good faith whether it is contractually obliged to make the payment in question.
|
(a) |
each Finance Party, each Receiver, any Delegate 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.
|
(b) |
becomes insolvent or is unable to pay its debts or fails or 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;
|
(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 a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger);
|
(i) |
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 (h) above; or
|
(j) |
takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts.
|
(a) |
the applicable Screen Rate for the longest period (for which that Screen Rate is available) which is less than the relevant Interest Period; and
|
(b) |
the applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds the relevant Interest Period,
|
(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 Act 1980 and the Foreign Limitation Periods Act 1984, 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 as a Lender in accordance with clause 29 (Changes to the Lenders),
|
(a) |
the applicable Screen Rate as of 11:00 a.m. on the relevant Quotation Day for a period equal in length to the Interest Period of the Loan or relevant part of it or Unpaid Sum; or
|
(b) |
as otherwise determined pursuant to clause 11.1 (Unavailability of Screen Rate),
|
(a) |
the business or financial condition of an Obligor; or
|
(b) |
the ability of an Obligor to perform its obligations under 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.
|
(b) |
if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month; and
|
(c) |
if an Interest Period begins on the last Business Day of a calendar month, that Interest Period shall end on the last Business Day in the calendar month in which that Interest Period is to end.
|
(a) |
the Pre-Delivery Security Assignment;
|
(b) |
the Share Security; and
|
(c) |
the Account Security in relation to the Operating Account.
|
(a) |
granted by the Finance Documents; or
|
(b) |
approved by the Majority Lenders.
|
(a) |
its Original Jurisdiction;
|
(b) |
any jurisdiction where any Charged Property owned by it is situated;
|
(c) |
any jurisdiction where it conducts its business; and
|
(d) |
any jurisdiction whose laws govern the perfection of any of the Security Documents entered into by it.
|
(a) |
30 September 2018; and
|
(b) |
the Delivery Date.
|
(a) |
is listed on any Sanctions List (whether designated by name or by reason of being included in a class of person) or otherwise a target of Sanctions;
|
(a) |
the Original Security Documents; and
|
(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 Transaction Security expressed to be granted in favour of the Security Agent as trustee for the Finance Parties and all proceeds of that Transaction Security;
|
(b) |
all obligations expressed to be undertaken by any Obligor to pay amounts in respect of the Secured Liabilities to the Security Agent as trustee for the Finance Parties and secured by the Transaction Security together with all representations and warranties expressed to be given by an Obligor in favour of the Security Agent as trustee for the Finance Parties; and
|
(c) |
any other amounts or property, whether rights, entitlements, choses in action or otherwise, actual or contingent, which the Security Agent is required by the terms of the Finance Documents to hold as trustee on trust for the Finance Parties.
|
(a) |
directly or indirectly controlled by such person; or
|
(b) |
of whose dividends or distributions on ordinary voting share capital such person is beneficially entitled to receive more than 50 per cent,
|
(a) |
each of the Finance Documents; and
|
(b) |
each Building Contract Document.
|
(a) |
the proposed Transfer Date specified in the Transfer Certificate; and
|
(b) |
the date on which the Agent executes the Transfer Certificate.
|
(a) |
a Borrower which is resident for tax purposes in the US; or
|
(b) |
an Obligor some or all of whose payments under the Finance Documents are from sources within the US 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.
|
(a) |
in relation to any Bail-In Legislation described in the EU Bail-In Legislation Schedule from time to time, the powers described as such in relation to that Bail-In Legislation in the EU Bail-In Legislation Schedule; and
|
(b) |
in relation to any other applicable Bail-In Legislation:
|
(i) |
any powers under that Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers; and
|
(ii) |
any similar or analogous powers under that Bail-In Legislation.
|
1.2 |
Construction
|
(a) |
Unless a contrary indication appears, a reference in any of the Finance Documents to:
|
(i) |
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;
|
(ii) |
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;
|
(iii) |
words importing the plural shall include the singular and vice versa;
|
(iv) |
a time of day are to London time;
|
(v) |
any person includes its successors in title, permitted assignees or transferees;
|
(vi) |
a document in agreed form means:
|
(A) |
where a Finance Document has already been executed by all of the relevant parties, such Finance Document in its executed form;
|
(B) |
prior to the execution of a Finance Document, the form of such Finance Document separately agreed in writing between the Agent and the Borrower as the form in which that Finance Document is to be executed or another form approved at the request of the Borrower or, if not so agreed or approved, is in the form specified by the Agent;
|
(vii) |
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
approved
means approved in writing by the Agent (on such conditions as the Agent may impose) and
approval
and
approve
shall be construed accordingly;
|
(viii) |
assets
includes present and future properties, revenues and rights of every description;
|
(ix) |
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;
|
(x) |
control
of an entity means:
|
(A) |
the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to:
|
(1) |
cast, or control the casting of, more than 50 per cent of the maximum number of votes that might be cast at a general meeting of that entity; or
|
(2) |
appoint or remove all, or the majority, of the directors or other equivalent officers of that entity; or
|
(3) |
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; or
|
(B) |
the holding beneficially of more than 50 per cent 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);
|
(xi) |
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;
|
(xii) |
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 a.m. 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
);
|
(xiii) |
a
government entity
means any government, state or agency of a state;
|
(xiv) |
a
group of Lenders
or a
group of Finance Parties
includes all the Lenders or (as the case may be) all the Finance Parties;
|
(xv) |
a
guarantee
means (other than in clause 18
(Guarantee and indemnity)
) 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;
|
(xvi) |
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;
|
(xvii) |
an
obligation
means any duty, obligation or liability of any kind;
|
(xviii) |
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);
|
(xix) |
pay
or
repay
in clause 27
(Business restrictions)
includes by way of set-off, combination of accounts or otherwise;
|
(xx) |
a
person
includes any individual, firm, company, corporation, government entity or any association, trust, joint venture, consortium, partnership or other entity (whether or not having separate legal personality);
|
(xxi) |
a
regulation
includes any regulation, rule, official directive, request or guideline (whether or not having the force of law but if not having the force of law, one with which a person habitually complies) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation and, in relation to any Lender, includes (without limitation) any Basel II Regulation or Basel III Regulation applicable to that Lender;
|
(xxii) |
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;
|
(xxiii) |
trustee
,
fiduciary
and
fiduciary duty
has in each case the meaning given to such term under applicable law;
|
(xxiv) |
(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; and
|
(xxv) |
a provision of law is a reference to that provision as amended or re-enacted.
|
(b) |
The determination of the extent to which a rate is "
for a period equal in length
" to an Interest Period shall disregard any inconsistency arising from the last day of that Interest Period being determined pursuant to the terms of this Agreement.
|
(c) |
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.
|
(d) |
Section, clause and Schedule headings are for ease of reference only.
|
(e) |
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.
|
(f) |
A Default is continuing if it has not been remedied or waived.
|
1.3 |
Currency symbols and definitions
|
(a) |
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 enjoy the benefit of any term of the relevant Finance Document.
|
(b) |
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).
|
(c) |
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.
|
1.6 |
Conflict of documents
|
2.1 |
The Facility
|
(a) |
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.
|
(b) |
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.
|
(c) |
A Finance Party may, except as otherwise stated in the Finance Documents, separately enforce its rights under the Finance Documents.
|
3.1 |
Purpose
|
3.2 |
Use of Commitment
|
(a) |
the third instalment of the Contract Price in the amount of the lesser of (i) US$1,498,850 and (ii) the amount in dollars of the third instalment, payable by 31 August 2017;
|
(b) |
the fourth instalment of the Contract Price in the amount of the lesser of (i) US$1,498,850 and (ii) the amount in dollars of the fourth instalment, payable by 30 November 2017;
|
(c) |
the fifth instalment of the Contract Price in the amount of the lesser of (i) US$1,498,850 and (ii) the amount in dollars of the fifth instalment, payable by 28 February 2018;
|
(d) |
the sixth instalment of the Contract Price in the amount of the lesser of (i) US$1,498,850 and (ii) the amount in dollars of the sixth instalment, payable by 30 April 2018; and
|
(e) |
the seventh instalment of the Contract Price in the amount of the lesser of (i) US$2,997,700 and (ii) the amount in dollars of the seventh instalment, payable by 31 May 2018.
|
3.3 |
Monitoring
|
4.3 |
Notice of satisfaction of conditions
|
(a) |
on the date of the Utilisation Request and on the proposed Utilisation Date, no Default is continuing or would result from the proposed Utilisation; and
|
(b) |
in relation to each Utilisation, on the date of the Utilisation Request and on the proposed Utilisation Date, all of the representations set out in clause 19
(Representations)
are true.
|
4.5 |
Waiver of conditions precedent
|
5.1 |
Delivery of a Utilisation Request
|
5.2 |
Completion of a Utilisation Request
|
(a) |
A Utilisation Request is irrevocable and will not be regarded as having been duly completed unless:
|
(i) |
the proposed Utilisation Date is a Business Day falling on or before the Last Availability Date;
|
(ii) |
the currency and amount of the Utilisation comply with clause 5.3
(Currency and amount)
;
|
(iii) |
the proposed Interest Period complies with clause 10
(Interest Periods)
; and
|
(iv) |
it identifies the purpose for the Utilisation and that purpose complies with clause 3
(Purpose).
|
(b) |
Only one Advance may be requested in each Utilisation Request.
Up to five Utilisation Requests may be made.
|
(c) |
The Commitment may be borrowed in up to five Advances.
|
(a) |
The currency specified in a Utilisation Request must be dollars.
|
(b) |
The amount of the proposed Advance must be a minimum of $1,000,000 or, if less, the amount of the Active Facility less the amount of the outstanding Loan and must not exceed (when aggregated with the outstanding Loan) the Active Facility.
|
(c) |
The amount of a proposed Advance specified in a Utilisation Request to be advanced under the Pre-Delivery Commitment shall not exceed the lower of:
|
(i) |
the amount in dollars equal to 100% of the Pre-Delivery Instalment which that Advance intended to finance;
|
(ii) |
the undrawn portion of the Commitment; and
|
(iii) |
the amount of the Active Facility less the outstanding amount of the Loan.
|
(a) |
If the conditions set out in this Agreement have been met, each Lender shall make its participation in each Advance available by the Utilisation Date through its Facility Office.
|
(b) |
The amount of each Lender's participation in each Advance will be equal to the proportion borne by its Available Commitment to the Available Facility immediately prior to making the Advance.
|
(c) |
The Agent shall promptly notify each Lender of the amount of the Advance and the amount of its participation in the Advance, in each case by 11:00 a.m. on the relevant Quotation Day.
|
(d) |
The Agent shall pay all amounts received by it in respect of each Advance (and its own participation in it, if any) to the Borrower or for its account or the Builder, in each case in accordance with the instructions contained in the Utilisation Request.
|
(b) |
upon the Agent notifying the Borrower, the Available Commitment of that Lender will be immediately cancelled; and
|
(c) |
to the extent that the Lender's participation has not been assigned pursuant to clause 7.6
(Replacement of Lender)
, the Borrower shall repay that Lender's participation in the Loan on the last day of the Interest Period occurring after the Agent has notified the Borrower 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) and that Lender's corresponding Commitment shall be cancelled in the amount of the participation repaid.
|
(i) |
any sum payable to any Lender by an Obligor is required to be increased under clause 13.2
(Tax gross-up)
; or
|
(ii) |
any Lender claims indemnification from the Borrower under clause 13.3
(Tax indemnity)
or clause 14.1
(Increased costs)
,
|
(b) |
On receipt of a notice referred to in paragraph (a) above, the Commitment of that Lender shall immediately be reduced to zero.
|
(c) |
On the last day of each Interest Period which ends after the Borrower has given notice under paragraph (a) above in relation to a Lender (or, if earlier, the date specified by the Borrower in that notice), the Borrower shall repay that Lender's participation in the Loan together with all interest and other amounts accrued under the Finance Documents which is then owing to it.
|
(b) |
On such notice becoming effective, the Available Commitment of the Defaulting Lender shall immediately be reduced to zero and the Agent shall as soon as practicable after receipt of such notice, notify all the Lenders.
|
(i) |
the Borrower becomes obliged to repay any amount in accordance with clause 7.1
(Illegality)
to any Lender; or
|
(ii) |
any of the circumstances set out in paragraph (a) of clause 7.4 (
Right of cancellation and prepayment in relation to a single Lender)
apply to a Lender,
|
(A) |
the outstanding principal amount of such Lender's participation in the Loan;
|
(B) |
all accrued interest owing to such Lender;
|
(C) |
the Break Costs which would have been payable to such Lender pursuant to clause 11.5
(Break Costs)
had the Borrower prepaid in full that Lender's participation in the Loan on the date of the assignment; and
|
(D) |
all other amounts payable to that Lender under the Finance Documents on the date of the assignment.
|
(b) |
The replacement of a Lender pursuant to this clause 7.6 shall be subject to the following conditions:
|
(i) |
the Borrower shall have no right to replace the Agent or the Security Agent;
|
(ii) |
neither the Agent nor any Lender shall have any obligation to find a Replacement Lender;
|
(iii) |
in no event shall the Lender replaced under this clause 7.6 be required to pay or surrender any of the fees received by such Lender pursuant to the Finance Documents; and
|
(c) |
A Lender shall perform the checks described in paragraph (b)(iv) above as soon as reasonably practicable following delivery of a notice referred to in paragraph (a) above and shall notify the Agent and the Borrower when it is satisfied that it has complied with those checks.
|
(i) |
the Ship is sold whilst under construction (irrespective of whether its delivery will be performed at a later date and not at the time of signing the relevant sale contract);
|
(ii) |
the Building Contract is novated or its assigned by the Borrower;
|
(iii) |
the Building Contract is for any reason and by any method cancelled, terminated or rescinded or is not, or ceases to be, legal, valid, binding and enforceable obligations of the Builder or the Borrower or it is or it becomes unlawful for the Builder, the Shipyard or the Borrower to perform its respective obligations under it; or
|
(iv) |
a competent court or arbitration panel decides that the Building Contract has been validly cancelled, terminated or rescinded; or
|
(v) |
the Building Contract is varied in a way prohibited by any Finance Document; or
|
(A) |
it is or becomes unlawful for the Refund Guarantor to perform any of its obligations under the Refund Guarantee; or
|
(B) |
the Refund Guarantor or the Builder or the Shipyard becomes subject to any of the events or circumstances described in clause 28.7
(Insolvency)
or clause 28.8
(Insolvency proceedings)
; or
|
(vii) |
Delivery has not occurred by the Last Availability Date,
|
(b) |
The Borrower shall on the date such cancellation takes effect prepay the Loan in full.
|
8 |
Restrictions
|
8.1 |
Notices of cancellation and prepayment
|
8.2 |
Interest and other amounts
|
8.3 |
No reborrowing
|
8.8 |
Application of cancellations
|
(a) |
Any prepayment required as a result of a cancellation in full of an individual Lender's Commitment under clause 7.1
(Illegality)
or clause 7.4
(Right of cancellation and prepayment in relation to a single Lender)
shall be applied in prepaying the relevant Lender's participation in the Loan.
|
(b) |
Any other prepayment shall be applied pro rata to each Lender's participation in the Loan.
|
8.10 |
Removal of Lender from security
|
9.1 |
Calculation of interest
|
(a) |
Margin; and
|
(b) |
LIBOR for the relevant Interest Period.
|
(a) |
If an Obligor fails to pay any amount payable by it under a Finance Document to a Finance Party 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 paragraph (c) below, is 2
per cent per annum 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).
|
(b) |
Any interest accruing under this clause 9.3 shall be immediately payable by the Obligor on demand by the Agent.
|
(i) |
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 or the relevant part of it; and
|
(ii) |
the rate of interest applying to the overdue amount during that first Interest Period shall be 2 per cent per annum higher than the rate which would have applied if the overdue amount had not become due.
|
(d) |
Default interest payable under this clause 9.3 (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.
|
(a) |
The Agent shall promptly notify the Lenders and the Borrower of the determination of a rate of interest under this Agreement.
|
(b) |
The Agent shall promptly notify the Borrower of each Funding Rate relating to the Loan (or any relevant part of it).
|
10 |
Interest Periods
|
10.1 |
Interest Periods
|
(a) |
(b) |
The first Interest Period for the Loan shall start on the first Utilisation Date, the first Interest Period for the second or any later Advance shall start on the relevant Utilisation Date and end on the last day of the then current Interest Period for the balance of the Loan and each subsequent Interest Period for the Loan shall start on the last day of its preceding Interest Period.
|
(c) |
No Interest Period shall extend beyond the Repayment Date.
|
10.2 |
Non-Business Days
|
(a) |
If no Screen Rate is available for LIBOR for an Interest Period, LIBOR shall be the Interpolated Screen Rate for a period equal in length to that Interest Period.
|
(b) |
If no Screen Rate is available for LIBOR for:
|
(i) |
dollars; or
|
(ii) |
the relevant Interest Period and it is not possible to calculate the Interpolated Screen Rate,
|
(a) |
If this clause 11.3 applies, the rate of interest on each Lender's share of the Loan or relevant part of it for the Interest Period shall be the percentage rate per annum which is the sum of:
|
(i) |
the Margin;
|
(c) |
Any alternative basis agreed pursuant to paragraph (b) above shall, with the prior consent of all the Lenders and the Borrower, be binding on all Parties.
|
(i) |
a Lender's Funding Rate is less than LIBOR; or
|
(ii) |
a Lender does not supply a quotation by the time specified in paragraph (a)(ii) above,
|
11.4 |
Notification to Borrower
|
(a) |
The Borrower shall, within five 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 any relevant part of it or Unpaid Sum being paid by the Borrower on a day other than the last day of an Interest Period for the Loan or that relevant part of it or Unpaid Sum.
|
(b) |
Each Lender shall, as soon as reasonably practicable after a demand by the Agent, provide a certificate confirming the amount and basis of calculation of its Break Costs for any Interest Period in which they accrue.
|
12.1 |
Commitment commission
|
(a) |
The Borrower shall pay to the Agent (for the account of each Lender) a fee in dollars computed at the rate of 4.25 per cent per annum on that Lender's Available Commitment calculated from the date of this Agreement (the
start date
).
|
(b) |
The Borrower shall pay the accrued commitment commission on the last day of the period of three Months commencing on the start date, on the last day of each successive period of three Months, on the Last Availability Date and, if cancelled in full, on the cancelled amount of the relevant Lender's Available Commitment at the time the cancellation is effective.
|
(c) |
No commitment fee is payable to the Agent (for the account of a Lender) on any Available Commitment of that Lender for any day on which that Lender is a Defaulting Lender.
|
12.2 |
Arrangement fee
|
12.3 |
Advisory fee
|
12.4 |
Termination fee
|
(a) |
In this Agreement:
|
(b) |
Unless a contrary indication appears, in this clause 13 a reference to "
determines
" or "
determined
" means a determination made in the absolute discretion of the person making the determination.
|
(a) |
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.
|
(b) |
The Borrower shall, promptly upon 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 Borrower and that Obligor.
|
(d) |
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.
|
(i) |
with respect to any Tax assessed on a Finance Party:
|
(A) |
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
|
(B) |
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,
|
(ii) |
to the extent a loss, liability or cost:
|
(A) |
is compensated for by an increased payment under clause 13.2 (
Tax gross-up
); or
|
(B) |
relates to a FATCA Deduction required to be made by a Party or any Obligor which is not a Party.
|
(c) |
A Protected Party making, or intending to make a claim under paragraph (a) 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 Borrower.
|
(d) |
A Protected Party shall, on receiving a payment from an Obligor under this clause 13.3, notify the Agent.
|
13.4 |
Indemnities on after Tax basis
|
(c) |
For the purposes of paragraphs (a) and (b) above, 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.
|
13.6 |
Value added tax
|
(a) |
All amounts 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 any supply for VAT purposes are deemed to be exclusive of any VAT which is chargeable on that supply, and accordingly, subject to paragraph (b) below, if VAT is or becomes chargeable on any supply made by any Finance Party to any party under a Finance Document, and such Finance Party is required to account to the relevant tax authority for the VAT, that party must pay to such 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 the VAT (and such Finance Party must promptly provide an appropriate VAT invoice to that party).
|
(ii) |
(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.
|
(d) |
Any reference in this clause 13.6 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).
|
(e) |
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.
|
(a) |
Subject to paragraph (c) below, each Party shall, within ten Business Days of a reasonable request by another Party:
|
(A) |
a FATCA Exempt Party; or
|
(B) |
not a FATCA Exempt Party;
|
(b) |
If a Party confirms to another Party pursuant to paragraph (a)(i) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not or has ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly.
|
(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 paragraphs (a)(i) or (a)(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.
|
(i) |
where the Borrower is a US Tax Obligor and the relevant Lender is an Original Lender, the date of this Agreement;
|
(ii) |
where the Borrower is a US Tax Obligor on a date on which any other Lender becomes a Party as a Lender, that date; or
|
(iii) |
where the Borrower is not a US Tax Obligor, the date of a request from the Agent,
|
(A) |
a withholding certificate on Form W-8, Form W-9 or any other relevant form; or
|
(B) |
any withholding statement or other document, authorisation or waiver as the Agent may require to certify or establish the status of such Lender under FATCA or that other law or regulation.
|
(f) |
The Agent shall provide any withholding certificate, withholding statement, document, authorisation or waiver it receives from a Lender pursuant to paragraph (e) above to the Borrower.
|
(g) |
If any withholding certificate, withholding statement, document, authorisation or waiver provided to the Agent by a Lender pursuant to paragraph (e) above is or becomes materially inaccurate or incomplete, that Lender shall promptly update it and provide such updated withholding certificate, withholding statement, document, authorisation or waiver to the Agent unless it is unlawful for the Lender to do so (in which case the Lender shall promptly notify the Agent). The Agent shall provide any such updated withholding certificate, withholding statement, document, authorisation or waiver to the Borrower.
|
13.8 |
FATCA Deduction
|
(a) |
Each Party may make any FATCA Deduction it is required to make by FATCA, and any payment required in connection with that FATCA Deduction, and no Party shall be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction.
|
(b) |
Each Party shall promptly, upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate or the basis of such FATCA Deduction), notify the Party to whom it is making the payment and, in addition, shall notify the Borrower and the Agent and the Agent shall notify the other Finance Parties.
|
(a) |
Subject to clause 14.3
(Exceptions)
, the Borrower shall, within five 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:
|
(i) |
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; and/or
|
(i) |
a reduction in the rate of return from the Facility or on a Finance Party's (or its Affiliate's) overall capital;
|
(ii) |
an
additional or increased cost; or
|
(iii) |
a
reduction of any amount due and payable under any Finance Document,
|
14.2 |
Increased cost claims
|
(b) |
Each Finance Party shall, as soon as practicable after a demand by the Agent and/or the Borrower through the Agent, provide a certificate confirming the amount of its Increased Costs and the basis of calculation of such amount.
|
(ii) |
attributable to a FATCA Deduction required to be made by a Party;
|
(iv) |
compensated for by the payment to a Lender under clause 15.10 (
Mandatory Cost
); and
|
(v) |
attributable to the wilful breach by the relevant Finance Party or its Affiliates of any law or regulation.
|
(b) |
In paragraph (a) above, a reference to a Tax Deduction has the same meaning given to the term in clause 13.1
(Definitions)
.
|
15.1 |
Currency indemnity
|
(a) |
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:
|
(i) |
making or filing a claim or proof against that Obligor; and/or
|
(ii) |
obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,
|
(b) |
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.
|
15.2 |
Other indemnities
|
(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 a Utilisation requested by the Borrower 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 Borrower.
|
(a) |
any and all Losses (together with any applicable VAT) incurred by the Agent or the Security Agent
(acting reasonably) as a result of:
|
(i) |
investigating any event which it reasonably believes is a Default;
|
(ii) |
acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised;
|
(iii) |
instructing lawyers, accountants, tax advisers, insurance consultants, ship managers, valuers, surveyors or other professional advisers or experts as permitted under the Finance Documents; or
|
(iv) |
any action taken by the Agent or the Security Agent
or any of its or their
representatives, agents or contractors in connection with any powers conferred by any Security Document to remedy any breach of any Obligor's obligations under the Finance Documents, and
|
(b) |
any and all Losses (including, without limitation, in respect of liability for negligence or any other category of liability whatsoever) (together with any applicable VAT) 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 misconduct) (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 Agent's 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.
|
(i) |
any failure by the Borrower to comply with its obligations under clause 17
(Costs and expenses)
or any similar provision in any other Finance Document;
|
(ii) |
acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised;
|
(iii) |
the taking, holding, protection or enforcement of the Transaction Security;
|
(iv) |
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 and each Delegate by the Finance Documents or by law (otherwise, in each case, than by reason of the relevant Security Agent's and/or
|
(v) |
any default by any Obligor in the performance of any of the obligations expressed to be assumed by it in the Finance Documents;
|
(vi) |
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 misconduct of that Indemnified Person);
|
(vii) |
instructing lawyers, accountants, tax advisers, insurance consultants, ship managers, valuers, surveyors or other professional advisers or experts as permitted under the Finance Documents; or
|
(viii) |
(in the case of the Security Agent and/or any other Finance Party, any Receiver and any Delegate) acting as Security Agent and/or as holder of any of the Transaction Security, Receiver or Delegate under the Finance Documents or which otherwise relates to the Charged Property (otherwise, in each case, than by reason of the relevant Security Agent's and/or other Finance Party's, Receiver's or Delegate's gross negligence or wilful misconduct).
|
(b) |
The Security Agent may, in priority to any payment to the other Finance Parties, indemnify itself out of the Charged Property in respect of, and pay and retain, all sums necessary to give effect to the indemnity in this clause 15.4 and shall have a lien on the Transaction Security and the proceeds of the enforcement of the Transaction Security for all moneys payable to it.
|
15.5 |
Continuation of indemnities
|
(b) |
Where an Indemnified Person (other than a Finance Party) (the
Relevant Beneficiary
) who is:
|
(i) |
appointed by a Finance Party under the Finance Documents;
|
(ii) |
an Affiliate of any such person or that Finance Party; or
|
(iii) |
an officer, director, employee, adviser, representative or agent of any of the above persons or that Finance Party,
|
(A) |
the Borrower shall at the same time as the relevant Third Party Claim is due to the Relevant Beneficiary pay to that Finance Party a sum in the amount of that Third Party Claim;
|
(B) |
payment of such sum to that Finance Party shall, to the extent of that payment, satisfy the corresponding obligations of the Borrower to pay the Third Party Claim to the Relevant Beneficiary; and
|
(C) |
if the Borrower pays the Third Party Claim direct to the Relevant Beneficiary, such payment shall, to the extent of that payment, satisfy the corresponding obligations of the Borrower to that Finance Party under sub-paragraph (A) above.
|
(b) |
Paragraph (a) above does not in any way limit the obligations of any Obligor under the Finance Documents.
|
16.2 |
Limitation of liability
|
(a) |
The Borrower 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 16.1
(Mitigation)
.
|
(b) |
A Finance Party is not obliged to take any steps under clause 16.1
(Mitigation)
if, in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it.
|
(a) |
this Agreement and any other documents referred to in this Agreement and the Security Documents;
|
(b) |
any other Finance Documents executed or proposed to be executed after the date of this Agreement; or
|
(c) |
any Security Interest expressed or intended to be granted by a Finance Document.
|
17.2 |
Amendment costs
|
17.3 |
Enforcement, preservation and other costs
|
(a) |
the enforcement of, or the preservation of any rights under, any Finance Document and the Transaction Security 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 inspection carried out under clause 24.7
(Inspection)
or any survey carried out under clause 24.9
(Survey report)
at the times provided under that clause that the relevant costs must be borne by the Borrower.
|
(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 (other than the Charterer) 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 if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation indemnify that Finance Party immediately on demand against any cost, loss or liability it incurs as a result of another Obligor (other than the Charterer) not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by such Obligor under any Finance Document on the date when it would have been due. The amount payable by the Guarantor under this indemnity will not exceed the amount the Guarantor would have had to pay under this clause 18.1 if the amount claimed had been recoverable on the basis of a guarantee.
|
18.2 |
Continuing guarantee
|
18.3 |
Reinstatement
|
(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
|
(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;
|
(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.
|
18.6 |
Immediate recourse
|
18.7 |
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 18.
|
(a) |
Until all amounts which may be or become payable by the Obligors (other than the Charterer) under or in connection with the Finance Documents have been irrevocably paid in full and unless the Agent otherwise directs, the Guarantor will not exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents or by reason of any amount being payable, or liability arising, under this clause 18:
|
(i) |
to be indemnified by another Obligor;
|
(ii) |
to claim any contribution from any other guarantor of any Obligor's obligations under the Finance Documents;
|
(iii) |
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;
|
(iv) |
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 this clause 18;
|
(v) |
to exercise any right of set-off against any other Obligor; and/or
|
(vi) |
to claim or prove as a creditor of any other Obligor in competition with any Finance Party.
|
(b) |
If the Guarantor receives any benefit, payment or distribution in relation to such rights it will promptly pay an equal amount to the Agent for application in accordance with clause 37
(Payment mechanics)
. This only applies 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.
|
18.9 |
Additional security
|
(a) |
Each Obligor is a corporation, duly incorporated and validly existing under the law of its Original Jurisdiction.
|
(b) |
Each Obligor has power and authority to own its assets and to carry on its business as it is now being conducted.
|
19.2 |
Binding obligations
|
(a) |
the obligations expressed to be assumed by each Obligor in each Transaction Document to which it is, or is to be, a party are or, when entered into by it, will be legal, valid, binding and enforceable obligations; and
|
(b) |
(without limiting the generality of paragraph (a) above) each Security Document to which an Obligor is, or will be, a party, creates or will create the Security Interests which that Security Document purports to create and those Security Interests are or will be valid and effective.
|
(a) |
any law or regulation applicable to any Obligor;
|
(b) |
the Constitutional Documents of any Obligor; or
|
19.4 |
Power and authority
|
(b) |
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 Transaction Document to which such Obligor is, or is to be, a party.
|
19.5 |
Validity and admissibility in evidence
|
(a) |
All Authorisations required:
|
(i) |
to enable each Obligor lawfully to enter into, exercise its rights and comply with its obligations under each Transaction Document to which it is a party;
|
(ii) |
to make each Transaction Document to which it is a party admissible in evidence in its Relevant Jurisdictions; and
|
(iii) |
to ensure that the Transaction Security has the priority and ranking contemplated in the Security Documents,
|
(b) |
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 is reasonably likely to have a Material Adverse Effect.
|
19.6 |
Governing law and enforcement
|
(a) |
The choice of governing law of any Transaction Document will be recognised and enforced in each Obligor's Relevant Jurisdictions.
|
(b) |
Any judgment obtained in relation to any Transaction Document in the jurisdiction of the governing law of that Transaction Document will be recognised and enforced in the relevant Obligor's Relevant Jurisdictions.
|
(a) |
Any factual information contained in the Information Package is true and accurate in all material respects as at the date of the relevant report or document containing the information or (as the case may be) as at the date the information is expressed to be given.
|
(b) |
Any financial projection or forecast contained in the Information Package has been prepared on the basis of recent historical information and on the basis of reasonable assumptions and was fair (as at the date of the relevant report or document containing the projection or forecast) and arrived at after careful consideration.
|
(c) |
The expressions of opinion or intention provided by or on behalf of an Obligor for the purposes of the Information Package were made after careful consideration and (as at the date of the relevant report or document containing the expression of opinion or intention) were fair and based on reasonable grounds.
|
(d) |
No event or circumstance has occurred or arisen and no information has been omitted from the Information Package and no information has been given or withheld that results in the information, opinions, intentions, forecasts or projections contained in the Information Package being untrue or misleading in any material respect.
|
(e) |
For the purposes of this clause 19.7,
Information Package
means any information provided by any Obligor to any of the Finance Parties in connection with the Transaction Documents or the transactions referred to in them.
|
19.8 |
Pari passu ranking
|
(a) |
the Transaction Security has (or will have when the relevant Security Documents have been executed) the priority which it is expressed to have in the Security Documents;
|
(b) |
the Charged Property is not subject to any Security Interest other than Permitted Security Interests; and
|
(c) |
the Transaction Security will constitute perfected security on the assets described in the Security Documents.
|
19.12 |
No insolvency
|
19.15 |
Tax compliance
|
(a) |
No Obligor (other than the Charterer) is materially overdue in the filing of any Tax returns or overdue in the payment of any amount in respect of Tax exceeding $500,000 equivalent in any other currency.
|
(b) |
No claims or investigations are being, or are reasonably likely to be, made or conducted against any Obligor (other than the Charterer) with respect to Taxes such that a liability of, or claim against, any Obligor (other than the Charterer) is reasonably likely to arise for an amount for which adequate reserves have not been provided and which are reasonably expected to have a Material Adverse Effect.
|
(c) |
Each Obligor is resident for Tax purposes only in its Original Jurisdiction.
|
19.16 |
Other Tax matters
|
19.18 |
No Default
|
(a) |
No Default is continuing or is reasonably expected to result from the making of any Utilisation or the entry into, the performance of, or any transaction contemplated by, any Transaction Document.
|
(b) |
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 agreement or instrument which is binding on any Obligor or to which any Obligor's assets are subject which is likely to have a Material Adverse Effect.
|
19.19 |
No proceedings
|
(a) |
No litigation, arbitration or administrative proceedings or investigations of, or before, any court, arbitral body or agency which, if adversely determined, might reasonably be expected to have a Material Adverse Effect has or have (to the best of any Obligor's knowledge and belief (having made due and careful enquiry)) been started or threatened against any Obligor.
|
(b) |
No judgment or order of a court, arbitral tribunal or other tribunal or any order or sanction of any governmental or other regulatory body which is reasonably likely to have a Material Adverse Effect has (to the best of any Obligor's knowledge and belief (having made due and careful enquiry)) been made against any Obligor or any other Group Member.
|
19.20 |
No breach of laws
|
(a) |
No Obligor or other Group Member has breached any law or regulation.
|
(b) |
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 is reasonably expected to have a Material Adverse Effect.
|
19.21 |
Anti-corruption law
|
19.22 |
Security and Financial Indebtedness
|
(a) |
No Security Interest exists over all or any of the present or future assets of any Obligor in breach of this Agreement.
|
(b) |
No Obligor has any Financial Indebtedness outstanding in breach of this Agreement.
|
19.23 |
Shares
|
(a) |
The shares of the Borrower are fully paid and not subject to any option to purchase or similar rights.
|
(b) |
The Constitutional Documents of the Borrower do not and could not restrict or inhibit any transfer of those shares on creation or enforcement of the Security Documents.
|
(c) |
There are no agreements in force which provide for the issue or allotment of, or grant any person the right to call for the issue or allotment of, any share or loan capital of the Borrower (including any option or right of pre-emption or conversion).
|
19.25 |
Listing
|
19.26 |
Accounting Reference Date
|
19.27 |
No adverse consequences
|
(a) |
It is not necessary under the laws of the Relevant Jurisdictions of any Obligor:
|
(i) |
in order to enable any Finance Party to enforce its rights under any Finance Document to which it is, or is to be, a party; or
|
(ii) |
by reason of the execution of any Finance Document or the performance by any Obligor of its obligations under any Finance Document,
|
(b) |
No Finance Party is or will be deemed to be resident, domiciled or carrying on business in any Relevant Jurisdiction of any Obligor by reason only of the execution, performance and/or enforcement of any Finance Document.
|
19.28 |
Copies of documents
|
19.29 |
No breach, etc of any Building Contract Document
|
(c) |
No dispute has occurred under:
|
(i) |
any of the Building Contract Documents; or
|
(ii) |
any other shipbuilding contract relating to the construction of any other vessel of any Group Member or any Obligor's Affiliate by the Builder at the Shipyard or at any other yard or under any refund guarantee issued in respect of the obligations of the Builder under that shipbuilding contract.
|
19.30 |
No immunity
|
19.31 |
Address commission
|
(a) |
No Obligor, nor any of its Affiliates nor any of their respective directors, officers, employees, agents or representatives:
|
(iii) |
has received notice of or is aware of any claim, action, suit, proceeding or investigation against it with respect to Sanctions.
|
(A) |
to finance equipment or sectors under embargo decisions of the United Nations or the World Bank; or
|
(B) |
in breach of the provisions of any Sanctions.
|
(c) |
It is has not been intended that the Ship will enter or trade to any Additional Unacceptable Country.
|
(a) |
All of the representations and warranties set out in this clause 19 are deemed to be made on the dates of:
|
(i) |
this Agreement;
|
(ii) |
the first Utilisation Request; and
|
(iii) |
the first Utilisation.
|
(b) |
The Repeating Representations are deemed to be made on the dates of each subsequent Utilisation Request and each subsequent Utilisation Date and the first day of each Interest Period.
|
(c) |
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 existing at the date the representation or warranty is deemed to be made.
|
20.1 |
Undertaking to comply
|
20.3 |
Financial statements
|
(i) |
the unaudited (or audited if available) financial statements of the Borrower for that financial half-year; and
|
(ii) |
the unaudited (or audited if available) consolidated financial statements of the Guarantor for that financial half-year.
|
20.4 |
Provision and contents of Compliance Certificate
|
(a) |
The Borrower shall supply a Compliance Certificate to the Agent with each set of Annual Financial Statements and each set of Semi-Annual Financial Statements, in each case, delivered pursuant to clause 20.3 (
Financial statements
).
|
(b) |
Each Compliance Certificate shall set out (in reasonable detail) computations as to compliance with clause 21 (
Financial covenants
).
|
(c) |
Each Compliance Certificate shall be signed by a duly authorised signatory of the Guarantor.
|
20.5 |
Requirements as to financial statements
|
(a) |
The Borrower shall procure that each set of Annual Financial Statements and Semi-annual Financial Statements includes a profit and loss account, a balance sheet and a cashflow statement and that, in addition, each set of Annual Financial Statements shall be audited by the Auditors.
|
(b) |
Each set of financial statements delivered pursuant to clause 20.3
(Financial statements)
shall:
|
(i) |
be prepared in accordance with GAAP; and
|
(ii) |
fairly present, and be certified by a director of the relevant company as fairly presenting, its financial condition and operations as at the date as at which those financial statements were drawn up and, in the case of the Annual Financial Statements, shall be accompanied by any letter addressed to the management of the relevant company by the Auditors and accompanying those Annual Financial Statements; and
|
(iii) |
in the case of Annual Financial Statements, not be the subject of any qualification in the Auditors' opinion.
|
20.6 |
Year-end
|
20.7 |
Information: miscellaneous
|
(a) |
whilst an Event of Default is continuing and as soon as practicable after the time when they are dispatched, copies of all documents dispatched by any Obligor 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 Obligor or other Group Member, and which, if adversely determined, might have a Material Adverse Effect;
|
(c) |
promptly upon becoming aware of them, the details of any judgment or order of a court, arbitral tribunal or other tribunal or any order or sanction of any governmental or other regulatory body which is made against any Obligor or other Group Member and which is reasonably likely to have a Material Adverse Effect;
|
(e) |
promptly, such information as the Agent or the Security Agent may reasonably require about the Charged Property and compliance of the Obligors with the terms of any Security Documents; and
|
(f) |
promptly on request, such further information regarding the financial condition, assets and operations of any Obligor as any Finance Party through the Agent may reasonably request,
|
20.8 |
Notification of Default
|
(a) |
The Borrower 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).
|
20.9 |
Sufficient copies
|
20.10 |
"Know your customer" checks
|
(a) |
If:
|
(i) |
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;
|
(ii) |
any change in the status of an Obligor or the composition of the shareholders of an Obligor after the date of this Agreement; or
|
(iii) |
a proposed assignment by a Lender of any of its rights under this Agreement to a party that is not already a Lender prior to such assignment,
|
(b) |
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 it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.
|
(a) |
cash in hand or on deposit with any bank; and
|
(b) |
any other instrument, security or investment approved by the Majority Lenders,
|
(b) |
Minimum liquidity
: at all times the Cash and Cash Equivalents shall not be less than the aggregate of:
|
(i) |
$750,000 multiplied by the number of the Fleet Vessels; and
|
(ii) |
$500,000 multiplied by the number of the Chartered Vessels.
|
22.1 |
Undertaking to comply
|
22.2 |
Use of proceeds
|
22.3 |
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 Transaction Documents;
|
(ii) |
ensure the legality, validity, enforceability or admissibility in evidence of any Transaction Document; and
|
(iii) |
carry on its business where failure to do so has, or is reasonably likely to have, a Material Adverse Effect.
|
22.5 |
Anti-corruption law
|
(a) |
No Obligor shall (and shall ensure that no other Group Member will) directly or indirectly use the proceeds of the Facility for any purpose which would breach the Bribery Act 2010, the United States Foreign Corrupt Practices Act of 1977 or other similar legislation in other jurisdictions.
|
(b) |
Each Obligor shall:
|
(i) |
conduct its businesses in compliance with applicable anti-corruption laws; and
|
(ii) |
maintain policies and procedures designed to promote and achieve compliance with such laws.
|
(i) |
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;
|
(ii) |
Money Laundering or acted in breach of any applicable law relating to Money Laundering; or
|
(iii) |
the Financing of Terrorism.
|
(b) |
Without prejudice to the generality of clause 22.6(a):
|
(i) |
No Obligor nor any of its agents, employees, directors or officers will (and shall ensure that none of its Affiliates nor any of its agents, employees, directors or officers 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;
|
(ii) |
each Obligor shall (and shall ensure that each of its Affiliates) and any of their agents, employees, directors or officers:
|
(A) |
conducts its businesses in compliance with the Bribery Act 2010 or the United States Foreign Corrupt Practices Act of 1977; and
|
(B) |
maintains policies and procedures designed to promote and achieve compliance with such laws.
|
(c) |
For the purposes of this clause 22.6 and clause 19.33 (
No Money Laundering
), the following definitions shall apply:
|
(i) |
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;
|
(ii) |
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
|
(iii) |
the acquisition, possession or use of property knowing at the time of its receipt that it is derived from a criminal offence.
|
22.7 |
Tax compliance
|
(a) |
Each Obligor (other than the Charterer) shall (and shall ensure that each other Group Member will) pay and discharge all Taxes imposed upon it or its assets within the time period allowed without incurring penalties in excess of $500,000 (or its equivalent in any other currency) in aggregate, unless and only to the extent that:
|
(i) |
such payment is being contested in good faith;
|
(ii) |
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 20.3
(Financial statements)
; and
|
(iii) |
such payment can be lawfully withheld.
|
(b) |
Except as approved by the Majority Lenders, each Obligor (other than the Charterer) shall maintain its residence for Tax purposes in its Original Jurisdiction and ensure that it is not resident for Tax purposes in any other jurisdiction.
|
22.8 |
Change of business
|
22.9 |
Merger
|
22.10 |
Pension exposure
|
22.11 |
Further assurance
|
(a) |
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 or the Security Agent may reasonably require in favour of the Security Agent or its nominee(s)):
|
(i) |
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 and/or any other Finance Parties provided by or pursuant to the Finance Documents or by law;
|
(ii) |
to confer on the Security Agent and/or any other Finance Parties 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;
|
(iii) |
to facilitate the realisation of the assets which are, or are intended to be, the subject of the Security Documents; and/or
|
(iv) |
to facilitate the accession by a New Lender to any Security Document following an assignment in accordance with clause 29.1
(
A
ssignments
by the Lenders)
.
|
(b) |
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 Parties by or pursuant to the Finance Documents.
|
22.12 |
Negative pledge in respect of Charged Property and Obligor shares
|
(c) |
Each Obligor shall not, and shall procure that each of its Affiliates will not, credit proceeds from any activity or dealing with a Restricted Person to any bank account held with any Finance Party in its name or in the name of any other person.
|
(d) |
Each Obligor shall, and shall ensure that each of its Affiliates take measures to ensure compliance with Sanctions.
|
(f) |
The Borrower shall, if it is intended that the Ship will enter or trade to any Additional Unacceptable Country:
|
(i) |
promptly, and in any event before the Ship enters into or starts trading with, an Additional Unacceptable Country, notify the Agent in writing; and
|
(ii) |
on demand provide the Agent with any information (in a form acceptable to the Agent in its absolute discretion) the Agent requires in relation to the Ship and its employment including, without limitation, information regarding the counterparties and the type of business to which such voyage relates.
|
23.1 |
Undertaking to comply
|
23.2 |
Document of title
|
23.3 |
Performance of Building Contract
|
23.4 |
Performance by Builder and Refund Guarantor
|
23.5 |
Progress and information
|
23.6 |
Arbitration under Building Contract
|
(a) |
if either party to the Building Contract begins an arbitration under the Building Contract;
|
(b) |
of the identity of the arbitrators; and
|
(c) |
of the conclusion of the arbitration and the terms of any arbitration award.
|
23.7 |
Notification of certain events
|
23.8 |
Conveyance on default
|
23.9 |
Enforcement of rights
|
23.10 |
Sale or other disposal
|
23.11 |
Variations
|
(a) |
the Refund Guarantee will not be varied; and
|
(b) |
the Building Contract shall not be varied and the specification of the Ship will not be changed:
|
(i) |
in a way which might reasonably be expected to delay the delivery of the Ship beyond the Last Availability Date or be likely in the opinion of the Agent to put at risk the delivery of the Ship to the Charterer;
|
(ii) |
without the Refund Guarantor's prior written approval; and
|
(iii) |
in the case of the specification of the Ship, in a substantial way (as set out in paragraph (c) below)).
|
(c) |
For this purpose, ordering any extras, additions or alterations will be deemed as being in a substantial way if their cost (or if the aggregate cost of the proposed work together with the cost of any additional work already ordered or change of specification already agreed) will alter the Contract Price by a cumulative amount greater than 2 per cent of the original Contract Price. The Borrower shall agree in writing with the Builder the terms and specification of any such work before the work is put in hand irrespective of whether approval of that work is required under the Finance Documents.
|
23.12 |
Releases and waivers
|
23.13 |
Rejection and cancellation
|
24.1 |
Undertaking to comply
|
24.2 |
Sale or other disposal of Ship
|
24.4 |
Except with approval,
the Borrower shall not enter into any charter commitment for the Ship (except for the Charter), which is:
|
(a) |
a bareboat or demise charter or passes possession and operational control of the Ship to another person;
|
(b) |
of a fixed duration exceeding 13 calendar 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 vessels of the same age and type as the Ship under charter commitments of a similar type and period; or
|
(d) |
to another Obligor or Group Member.
|
24.5 |
Sharing of Earnings
|
24.6 |
Payment of Earnings
|
24.8 |
Evidence of payments
|
25.1 |
Undertaking to comply
|
25.2 |
Variations
|
25.3 |
Releases and waivers
|
25.4 |
Termination by the Borrower
|
25.5 |
Charter performance
|
25.6 |
Payment of Charter Earnings
|
26.1 |
Undertaking to comply
|
26.2 |
Operating Account
|
(a) |
The Borrower shall be the holder of one Account with an Account Bank which is designated as the "Operating Account" for the purposes of the Finance Documents.
|
(b) |
The Earnings and all moneys payable to the Borrower shall be paid by the persons from whom they are due to the Operating Account unless required to be paid to the Security Agent under the Finance Documents.
|
(c) |
The Borrower shall not withdraw amounts standing to the credit of an Operating Account except as permitted by paragraph (d) below.
|
(d) |
If there is no continuing Event of Default, the Borrower may withdraw the following amounts from an Operating Account for:
|
(i) |
payments then due to Finance Parties under the Finance Documents (other than payments due in respect of a prepayment); and
|
(ii) |
payments then due in respect of the price of goods or services purchased by the Borrower for the purpose of operating under the Building Contract and any other related agreement.
|
26.3 |
Other provisions
|
(i) |
such designation is made in writing by the Agent and acknowledged by the Borrower and specifies the name and address of the Account Bank and the number and any designation or other reference attributed to the Account;
|
(ii) |
an Account Security has been duly executed and delivered by the Borrower in favour of the Security Agent (and any other Finance Party required by the Agent);
|
(iii) |
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
|
(iv) |
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.
|
(b) |
The rates of payment of interest and other terms regulating any Account will be a matter of separate agreement between the Borrower and an Account Bank.
|
(c) |
If an Account is a fixed term deposit account, the Borrower may select the terms of deposits until the relevant Account Security has become enforceable and the Security Agent directs otherwise.
|
(d) |
The
Borrower 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 26 or waive any of its rights in relation to an Account except with approval.
|
(e) |
The
Borrower 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 reasonably request concerning any Account.
|
(f) |
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.
|
27.1 |
Undertaking to comply
|
(a) |
In this clause 27.2, Quasi-Security means an arrangement or transaction described in paragraph (c) below.
|
(b) |
The Borrower shall not create or permit to subsist any Security Interest over any of its assets except for Permitted Security Interests.
|
(c) |
(Without prejudice to clauses 27.3
(Financial Indebtedness)
and 27.7 (
Disposals
)), the Borrower shall not:
|
(i) |
sell, transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to, or re-acquired by, an Obligor or any other Group Member;
|
(ii) |
sell, transfer, factor or otherwise dispose of any of its receivables on recourse terms;
|
(iii) |
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
|
(iv) |
enter into any other preferential arrangement having a similar effect,
|
(d) |
Paragraphs (b) and (c) above do not apply to any Security Interest or (as the case may be) Quasi-Security, those granted or expressed to be granted by any of the Security Documents;
|
(a) |
Financial Indebtedness incurred under the Finance Documents;
|
(b) |
Financial Indebtedness permitted under clause 27.4
(Guarantees)
; and
|
27.4 |
Guarantees
|
27.6 |
Bank accounts, operating leases and other financial transactions
|
(a) |
maintain any current or deposit account with a bank or financial institution except for the Operating Account and the deposit of money, operation of current accounts and the conduct of electronic banking operations through the Operating Account;
|
(b) |
hold cash in any account (other than the Operating Account) over or in respect of which any set-off, combination of accounts, netting or Security Interest exists;
|
(c) |
enter into any obligations under operating leases relating to assets; or
|
(d) |
be party to any transaction, whether on or off balance sheet, that is not expressly permitted under this Agreement.
|
27.8 |
Contracts and arrangements with Affiliates
|
27.9 |
Subsidiaries
|
27.10 |
Acquisitions and investments
|
(a) |
the incurrence of liabilities in the ordinary course of its business;
|
(b) |
pursuant to any Finance Document or the Charter or the Building Contract Documents to which it is party.
|
27.11 |
Reduction of capital
|
27.12 |
Increase in capital
|
27.13 |
Distributions and other payments
|
(a) |
declare or pay (including by way of set-off, combination of accounts or otherwise) any dividend, charge, fee or other distribution (or interest on any unpaid dividend, charge, fee or other distribution) (whether in cash or in kind) on or in respect of its share capital (or any class of its share capital) or any warrants for the time being in issue;
|
(b) |
repay or distribute any dividend or share premium reserve;
|
(c) |
pay any management, advisory or other fee to or to the order of any of the shareholders of the Guarantor;
|
(d) |
redeem, repurchase, defease, retire or repay any of its share capital or resolve to do so; or
|
(e) |
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;
|
28.1 |
Each of the events or circumstances set out in this clause 28 (except clause 28.22
(Acceleration)
) is an Event of Default.
|
(a) |
its failure to pay is caused by administrative or technical error or by a Disruption Event; and
|
(b) |
payment is made within three (3) Business Days of its due date.
|
28.4 |
Other obligations
|
(b) |
No Event of Default under paragraph (a) above will occur if the Agent considers that the failure to comply is capable of remedy and the failure is remedied within five Business Days of the earlier of (A) the Agent giving notice to the Borrower and (B) the Borrower or any other Obligor becoming aware of the failure to comply.
|
28.5 |
Misrepresentation
|
(a) |
Any Financial Indebtedness of any Obligor (other than the Charterer) is not paid when due nor within any originally applicable grace period.
|
(b) |
Any Financial Indebtedness of any Obligor (other than the Charterer) 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).
|
(c) |
Any commitment for any Financial Indebtedness of any Obligor (other than the Charterer) is cancelled or suspended by a creditor of that Obligor as a result of an event of default (however described).
|
(d) |
The counterparty to a Treasury Transaction entered into by the Guarantor becomes entitled to terminate that Treasury Transaction early by reason of an event of default (however described).
|
(f) |
Any creditor of any Obligor (other than the Charterer) becomes entitled to declare any Financial Indebtedness of that Obligor due and payable prior to its specified maturity as a result of an event of default (however described).
|
(a) |
An Obligor:
|
(i) |
is unable or admits inability to pay its debts as they fall due;
|
(ii) |
is deemed to, or is declared to, be unable to pay its debts under applicable law;
|
(iii) |
suspends without the consent of the affected creditor(s) or threatens to suspend making payments on any of its debts; or
|
(iv) |
by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors (excluding any Finance Party in its capacity as such) with a view to rescheduling all or substantially all of its Financial Indebtedness.
|
(b) |
The value of the assets of any Obligor is less than its Total Debt.
|
(c) |
A moratorium is declared in respect of any indebtedness of any Obligor exceeding in the case of the Guarantor $1,500,000 (or its equivalent in any other currency) in aggregate.
|
28.8 |
Insolvency proceedings
|
(i) |
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 Obligor;
|
(ii) |
a composition, compromise, assignment or arrangement with any creditor of any Obligor;
|
(iii) |
the appointment of a liquidator, receiver, administrative receiver, administrator, compulsory manager or other similar officer in respect of any Obligor or any of its assets (including the directors of any Obligor requesting a person to appoint any such officer in relation to it or any of its assets); or
|
(iv) |
enforcement of any Security Interest over any assets of any Obligor (other than the Guarantor) or over any assets of the Guarantor having a value in excess of $1,500,000 (or its equivalent in any other currency) in aggregate,
|
(b) |
Paragraph (a) above 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.
|
(a) |
Any expropriation, attachment, sequestration, distress, execution or any other analogous process or enforcement action (including enforcement by a landlord) affects any asset or assets of any Obligor (having in the case of the Guarantor a value in excess of $1,500,000 (or its equivalent in any other currency) in aggregate) and is not discharged within seven days.
|
(b) |
Any judgment or order is made against any Obligor or any other Group Member and is not stayed or complied with within fifteen days.
|
28.10 |
Unlawfulness and invalidity
|
(a) |
It is or becomes unlawful for an Obligor to perform any of its obligations under the Finance Documents or any Transaction Security ceases to be effective.
|
(b) |
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.
|
(c) |
Any Finance Document or any Transaction Security ceases to be in full force and effect or ceases to be legal, valid, binding, enforceable or effective or is alleged by a party to it (other than a Finance Party) to be ineffective for any reason.
|
(d) |
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.
|
28.11 |
Cessation of business
|
28.12 |
Ownership of the Borrower
|
28.13 |
Expropriation
|
28.14 |
Repudiation and rescission of Finance Documents
|
28.15 |
Litigation
|
(a) |
any litigation, alternative dispute resolution, arbitration or administrative, governmental, regulatory or other investigations, proceedings or disputes are commenced or threatened; or
|
(b) |
any judgment or order of a court, arbitral tribunal or other tribunal or any order or sanction of any governmental or other regulatory body is made,
|
28.16 |
Material Adverse Effect
|
28.17 |
Security enforceable
|
28.18 |
Political risk
|
(b) |
No Event of Default under paragraph (a) above will occur if:
|
(i) |
in the opinion of the Agent it is practicable for action to be taken by the Borrower to prevent the relevant event or circumstance having a Material Adverse Effect; and
|
(ii) |
the Borrower takes such action to the Agent's satisfaction within 14 days of notice from the Agent (specifying the relevant action to be taken) to do so.
|
28.19 |
Post-Delivery Events
|
(a) |
by notice to the Borrower:
|
(i) |
declare that no withdrawals be made from any Account;
|
(ii) |
cancel the Total Commitments at which time they shall immediately be cancelled;
|
(iii) |
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
|
(iv) |
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
|
(b) |
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.
|
(iii) |
on the performance by the Agent of all necessary "know your customer" or similar 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
|
(iv) |
if that Existing Lender assigns equal fractions of its Commitment and participation in the Loan and each Utilisation (if any) under the Facility.
|
(b) |
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 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.
|
(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.
|
29.4 |
Transfer costs and expenses relating to security
|
(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 Security Document and/or the benefit of any Security 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.
|
(a) |
Unless expressly agreed to the contrary, an Existing Lender makes no representation or warranty and assumes no responsibility to a New Lender for:
|
(i) |
the legality, validity, effectiveness, adequacy or enforceability of the Finance Documents, the Transaction Security or any other documents;
|
(ii) |
the financial condition of any Obligor;
|
(iii) |
the performance and observance by any Obligor or any other person of its obligations under the Finance Documents or any other documents;
|
(iv) |
the application of any Basel II Regulation or Basel III Regulation to the transactions contemplated by the Finance Documents; or
|
(v) |
the accuracy of any statements (whether written or oral) made in or in connection with any Finance Document or any other document,
|
(b) |
Each New Lender confirms to the Existing Lender and the other Finance Parties that it:
|
(i) |
has made (and shall continue to make) its own independent investigation and assessment of:
|
(A) |
the financial condition and affairs of the Obligors and their related entities in connection with its participation in this Agreement; and
|
(B) |
the application of any Basel II Regulation or Basel III Regulation to the transactions contemplated by the Finance Documents;
|
(ii) |
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
|
(iii) |
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.
|
(c) |
Nothing in any Finance Document obliges an Existing Lender to:
|
(i) |
accept a re-assignment from a New Lender of any of the rights assigned under this clause 29; or
|
(ii) |
support any losses directly or indirectly incurred by the New Lender by reason of the non-performance by any Obligor of its obligations under any Transaction Document or by reason of the application of any Basel II Regulation to the transactions contemplated by the Transaction Documents or otherwise.
|
(a) |
Subject to the conditions set out in clause 29.2
(Other conditions of assignment)
an assignment may be effected in accordance with paragraph (d) below when (a) the Agent executes an otherwise duly completed Transfer Certificate and (b) the Agent executes any document required under paragraph (a) of clause 29.2
(Other conditions of assignment)
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, subject to paragraph (b) below, 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.
|
(c) |
The Obligors who are Parties and the other Finance Parties irrevocably authorise the Agent to execute any Transfer Certificate on their behalf without any consultation with them.
|
(i) |
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;
|
(ii) |
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
|
(iii) |
the New Lender shall become a Party as a "Lender" and will be bound by obligations equivalent to the Relevant Obligations.
|
(e) |
Lenders may utilise procedures other than those set out in this clause 29.6
to assign their rights under the Finance Documents (but not, without the consent of the relevant Obligor or unless in accordance with this clause 29.6
to obtain a release by that Obligor from the obligations owed to that Obligor by the Lenders nor the assumption of equivalent obligations by a New Lender) provided that they comply with the conditions set out in clause 29.2
(Other conditions of assignment)
.
|
(a) |
any charge, assignment or other Security Interest to secure obligations to a federal reserve or central bank; and
|
(b) |
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 other 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.
|
31.1 |
Appointment of the Agent and Security Agent
|
(a) |
the Agent to act as its agent under and in connection with the Finance Documents; and
|
(b) |
the Security Agent to act as its agent and as trustee under the Security Documents.
|
31.3 |
Authorisation of Agent and Security Agent
|
(a) |
to perform the duties, obligations and responsibilities and to exercise the rights, powers, authorities and discretions specifically given to the Agent or (as the case may be) 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 Majority Lenders for execution by it.
|
31.4 |
Instructions to Agent and the Security Agent
|
(A) |
all Lenders if the relevant Finance Document stipulates the matter is an all Lender decision; and
|
(B) |
in all other cases, the Majority Lenders; and
|
(ii) |
not be liable for any act (or omission) if it acts (or refrains from acting) in accordance with paragraph (i) above (or, if the relevant Finance Document stipulates the matter is a decision for any other Finance Party or group of Finance Parties, in accordance with instructions given to it by that Finance Party or group of Finance Parties).
|
(b) |
The Agent and the Security 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 Finance Party or group of Finance Parties, from that Finance Party or group of Finance Parties) as to whether, and in what manner, it should exercise or refrain from exercising any right, power, authority or discretion and the Agent or (as the case may be) the Security Agent may refrain from acting unless and until it receives those instructions or that clarification.
|
(c) |
Save in the case of decisions stipulated to be a matter for any other Finance Party or group of Finance Parties under the relevant Finance Document and, unless a contrary indication appears in a Finance Document, any instructions given to the Agent or (as the case may be) the Security Agent by the Majority Lenders shall override any conflicting instructions given by any other Parties and will be binding on all Finance Parties.
|
(i) |
where a contrary indication appears in a Finance Document;
|
(ii) |
where a Finance Document requires the Agent or the Security Agent to act in a specified manner or to take a specified action;
|
(iii) |
in respect of any provision which protects the Agent's or the Security Agent's own position in its personal capacity as opposed to its role of the Agent or the Security Agent for the Finance Parties including, without limitation, clause 31.9
(No duty to account)
to clause 31.14
(Exclusion of liability)
, clause 31.19
(Confidentiality)
to clause 32.6
(Custodians and nominees)
and clauses 32.9
(Acceptance of title)
to 32.12
(Disapplication of Trustee Acts)
.
|
(f) |
The Agent or the Security Agent may refrain from acting in accordance with any instructions of any other Finance Party or group of Finance Parties 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 applicable VAT) which it may incur in complying with those instructions.
|
(g) |
Without prejudice to the provisions of clause 33
(Enforcement of Transaction Security)
and the remainder of this clause 31, in the absence of instructions, the Agent and the Security Agent may act (or refrain from acting) as it considers to be in the best interest of the Lenders.
|
31.6 |
Duties of the Agent and the Security Agent
|
(a) |
The Agent's and the Security Agent's duties under the Finance Documents are solely mechanical and administrative in nature.
|
(b) |
Subject to paragraph (c) below, the Agent or (as the case may be) the Security Agent shall promptly:
|
(i) |
(in the case of the Security Agent) forward to the Agent a copy of any document received by the Security Agent from any Obligor under any Finance Document; and
|
(ii) |
forward to a Party the original or a copy of any document which is delivered to the Agent or (as the case may be) the Security Agent for that Party by any other Party.
|
(c) |
Without prejudice to clause 29.7
(Copy of Transfer Certificate
to Borrower)
, paragraph (b) above shall not apply to any Transfer Certificate.
|
(d) |
Except where a Finance Document specifically provides otherwise, neither the Agent nor the Security Agent is obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party.
|
(e) |
Without prejudice to clause 34.10
(Notification of prescribed events)
, if the Agent or the Security 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.
|
(f) |
If the Agent is aware of the non-payment of any principal, interest, commitment fee or other fee payable to a Finance Party (other than the Agent or the Arranger or the Security Agent for their own account) under this Agreement, it shall promptly notify the other Finance Parties.
|
(h) |
The Agent and the Security 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).
|
31.7 |
Role of the Arranger
|
31.8 |
No fiduciary duties
|
31.10 |
Business with the Group
|
(a) |
The Agent and the Security Agent may:
|
(i) |
rely on any representation, communication, notice or document believed by it to be genuine, correct and appropriately authorised;
|
(ii) |
assume that:
|
(A) |
any instructions received by it from the Majority Lenders, any Lenders or other Finance Parties or any group of Lenders or other Finance Parties are duly given in accordance with the terms of the Finance Documents;
|
(B) |
unless it has received notice of revocation, that those instructions have not been revoked; and
|
(C) |
in the case of the Security Agent, if it receives any instructions to act in relation to the Transaction Security, that all applicable conditions under the Finance Documents for so acting have been satisfied; and
|
(iii) |
rely on a certificate from any person:
|
(A) |
as to any matter of fact or circumstance which might reasonably be expected to be within the knowledge of that person; or
|
(B) |
to the effect that such person approves of any particular dealing, transaction, step, action or thing,
|
(b) |
The Agent and the Security Agent may assume (unless it has received notice to the contrary in its capacity as agent or (as the case may be) security trustee for the other Finance Parties) that:
|
(i) |
no Notifiable Debt Purchase Transaction:
|
(A) |
has been entered into;
|
(B) |
has been terminated; or
|
(C) |
has ceased to be with a Borrower Affiliate;
|
(ii) |
no Default has occurred (unless (in the case of the Agent) it has actual knowledge of a Default arising under clause 28.2
(Non-payment)
);
|
(iii) |
any right, power, authority or discretion vested in any Party or any group of Finance Parties has not been exercised; and
|
(iv) |
any notice or request made by the Borrower (other than (in the case of the Agent) a Utilisation Request) is made on behalf of and with the consent and knowledge of all the Obligors.
|
(c) |
Each of the Agent and the Security Agent may engage and pay for the advice or services of any lawyers, accountants, tax advisers, insurance consultants, ship managers, valuers, surveyors or other professional advisers or experts.
|
(f) |
The Agent, the Security Agent, any Receiver and any Delegate may act in relation to the Finance Documents, the Transaction Security and the Security Property through its officers, employees and agents and shall not:
|
(i) |
be liable for any error of judgment made by any such person; or
|
(ii) |
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,
|
(h) |
Without prejudice to the generality of paragraph (g) above, the Agent:
|
(i) |
may disclose; and
|
(ii) |
on the written request of the Borrower or the Majority Lenders shall, as soon as reasonably practicable, disclose,
|
(i) |
Notwithstanding any other provision of any Finance Document to the contrary, none of the Agent, the Security 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.
|
(j) |
Notwithstanding any provision of any Finance Document to the contrary, neither the Agent nor the Security Agent is 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.
|
(k) |
Neither the Agent nor the Arranger shall be obliged to request any certificate, opinion or other information under clause 20
(Information undertakings)
unless so required in writing by a Lender, in which case the Agent shall promptly make the appropriate request of the Borrower if such request would be in accordance with the terms of this Agreement.
|
31.12 |
Responsibility for documentation and other matters
|
(a) |
the adequacy, accuracy or completeness of any information (whether oral or written) supplied by the Agent, the Security Agent, the Arranger, an Obligor or any other person 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;
|
(b) |
the legality, validity, effectiveness, adequacy or enforceability of any Transaction Document, the Transaction Security or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document, the Transaction Security or the Security Property;
|
(c) |
the application of any Basel II Regulation or Basel III Regulation to the transactions contemplated by the Finance Documents;
|
(d) |
(in the case of the Security Agent) any loss to the Security 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) |
the failure of any Obligor or any other party to perform its obligations under any Transaction Document or the financial condition of any such person;
|
(f) |
(save as otherwise provided in this clause 31) taking or omitting to take any other action under or in relation to the Security Documents;
|
(g) |
any other beneficiary of a Security Document failing to perform or discharge any of its duties or obligations under any Finance Document; or
|
(h) |
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.
|
(a) |
whether or not any Default has occurred;
|
(b) |
as to the performance, default or any breach by any Party or any Obligor of its obligations under any Finance Document; or
|
(c) |
whether any other event specified in any Finance Document has occurred.
|
(a) |
Without limiting paragraph (b) below (and without prejudice to any other provision of any Finance Document excluding or limiting the liability of the Agent, the Security Agent, any Receiver or Delegate), none of the Agent, the Security Agent, any Receiver nor any Delegate will be liable (including, without limitation, for negligence or any other category of liability whatsoever) for:
|
(i) |
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
|
(iv) |
without prejudice to the generality of paragraphs (i) to (iii) above, any damages, costs, losses, any diminution in value or any liability whatsoever arising as a result of:
|
(A) |
any act, event or circumstance not reasonably within its control; or
|
(B) |
the general risks of investment in, or the holding of assets in, any jurisdiction,
|
(d) |
Nothing in any Finance Document shall oblige the Agent, the Security Agent or the Arranger to carry out:
|
(i) |
any "know your customer" or other checks in relation to any person; or
|
(ii) |
any check on the extent to which any transaction contemplated by any of the Finance Documents might be unlawful for any Finance Party or for any Affiliate of any Finance Party,
|
(e) |
Without prejudice to any provision of any Finance Document excluding or limiting the liability of the Agent, the Security Agent, any Receiver or any Delegate, any liability of the Agent, the Security Agent, any Receiver or any Delegate arising under or in connection with any Finance Document or the Security Property shall be limited to the amount of actual loss which has been finally judicially determined to have been suffered (as determined by reference to the date of default of the Agent, the Security Agent, Receiver or Delegate (as the case may be) or, if later, the date on which the loss arises as a result of such default) but without reference to any special conditions or circumstances known to the Agent, the Security Agent, Receiver or Delegate (as the case may be) at any time which increase the amount of that loss. In no event shall the Agent, the Security Agent, any Receiver or any Delegate be liable for any loss of profits, goodwill, reputation, business opportunity or anticipated saving, or for special, punitive, indirect or consequential damages, whether or not the Agent, the Security Agent, Receiver or Delegate (as the case may be) has been advised of the possibility of such loss or damages.
|
(a) |
The Agent or the Security Agent may resign and appoint one of its Affiliates as successor by giving notice to the other Finance Parties and the Borrower.
|
(d) |
If the Agent or Security Agent wishes to resign because (acting reasonably) it has concluded that it is no longer appropriate for it to remain as agent or trustee and the
|
(i) |
the appointment of a successor; and
|
(g) |
Upon the appointment of a successor, the retiring Agent or Security Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under paragraph (b) of clause 32.10
(Winding up of trust)
and paragraph (e) above) but shall remain entitled to the benefit of clauses 15.3
((Indemnity to the Agent and the Security Agent)
and 15.4
(Indemnity concerning security)
and
this clause 31 (and any agency or other fees for the account of the retiring Agent or Security Agent in its capacity as such 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 that successor had been an original Party.
|
(h) |
The Agent shall resign in accordance with paragraph (b) above (and, to the extent applicable, shall use reasonable endeavours to appoint a successor Agent pursuant to paragraph (c) above) if on or after the date which is three months before the earliest FATCA Application Date relating to any payment to the Agent under the Finance Documents, either:
|
(i) |
the Agent fails to respond to a request under clause 13.7
(FATCA Information)
and the Borrower or a Lender reasonably believes that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date;
|
(ii) |
the information supplied by the Agent pursuant to clause 13.7 (
FATCA Information
) indicates that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date; or
|
(iii) |
the Agent notifies the Borrower and the Lenders that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date,
|
(c) |
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 paragraph (b) above) but shall remain entitled to the benefit of clauses 15.3
((Indemnity to the Agent and the Security Agent)
and 15.4
(Indemnity concerning security)
and this clause 31 (and any agency fees for the account of the retiring Agent shall cease to accrue from (and shall be payable on) that date).
|
(d) |
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.
|
31.18 |
Replacement of the Security Agent
|
(a) |
In acting as agent or trustee for the Finance Parties, the Agent or (as the case may be) the Security Agent shall be regarded as acting through its agency, trustee or other division or department directly responsible for the management of the Finance Documents which shall be treated as a separate entity from any other of its divisions or departments.
|
(b) |
If information is received by another division or department of the Agent or (as the case may be) Security Agent, it may be treated as confidential to that division or department and the Agent or (as the case may be) Security Agent shall not be deemed to have notice of it.
|
(c) |
Notwithstanding any other provision of any Finance Document to the contrary, none of the Agent, the Security Agent nor the Arranger is obliged to disclose to any other person
|
(a) |
The Agent may treat the person shown in its records as Lender at the opening of business (in the place of the Agent's principal office as notified to the Finance Parties from time to time) as the Lender acting through its Facility Office:
|
(i) |
entitled to or liable for any payment due under any Finance Document on that day; and
|
(ii) |
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,
|
31.21 |
Information from the Finance Parties
|
(a) |
the financial condition, status and nature of each Obligor and other Group Member;
|
(b) |
the legality, validity, effectiveness, adequacy or enforceability of any Transaction Document, the Transaction Security, the Security Property and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document, the Transaction Security or the Security Property;
|
(c) |
the application of any Basel II Regulation or Basel III Regulation to the transactions contemplated by the Finance Documents;
|
(d) |
whether that 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 Transaction Security, the Security Property, 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, the Transaction Security or the Security Property;
|
(e) |
the adequacy, accuracy or completeness of any information provided by the Agent, the Security Agent, the Arranger or any other Party or by any other person under or in connection with any Transaction Document, the transactions contemplated by any Transaction Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document; and
|
(f) |
the right or title of any person in or to, or the value or sufficiency of, any part of the Charged Property, the priority of any of the Transaction Security or the existence of any Security Interest affecting the Charged Property.
|
31.24 |
Reliance and engagement letters
|
(b) |
Each payment which such an Obligor makes to another Finance Party in accordance with any Finance Document shall, to the extent of the amount of that payment, satisfy that Obligor's corresponding obligation under paragraph (a) above to make that payment to the Security Agent.
|
32.2 |
Parallel debt
|
(ii) |
acts in its own name and not as agent, representative or trustee of the Finance Parties and its claims in respect of each Parallel Debt shall not be held on trust; and
|
(i) |
decreased to the extent that its Corresponding Debt has been irrevocably and unconditionally paid or discharged; and
|
(A) |
(g) |
This clause 32.2 shall apply, with any necessary modifications, to each Finance Document.
|
32.3 |
No responsibility to perfect Transaction Security
|
(a) |
ascertain whether all deeds and documents which should have been deposited with it under or pursuant to any of the Security Documents have been so deposited;
|
(b) |
require the deposit with it of any deed or document certifying, representing or constituting the title of any Obligor to any of the Charged Property;
|
(c) |
obtain any licence, consent or other authority for the execution, delivery, legality, validity, enforceability or admissibility in evidence of any Finance Document or the Transaction Security;
|
(d) |
register, file or record or otherwise protect any of the Transaction Security (or the priority of any of the Transaction Security) under any law or regulation or to give notice to any person of the execution of any Finance Document or of the Transaction Security;
|
(e) |
take, or to require any Obligor to take, any step to perfect its title to any of the Charged Property or to render the Transaction Security effective or to secure the creation of any ancillary Security Interest under any law or regulation; or
|
(f) |
require any further assurance in relation to any Security Document.
|
32.4 |
Insurance by Security Agent
|
(a) |
The Security Agent shall not be obliged:
|
(i) |
to insure any of the Charged Property;
|
(ii) |
to require any other person to maintain any insurance; or
|
(iii) |
to verify any obligation to arrange or maintain insurance contained in any Finance Document,
|
32.5 |
Common parties
|
32.6 |
Custodians and nominees
|
32.7 |
Delegation by the Security Agent
|
(a) |
Each of the Security Agent, any Receiver and any Delegate may, at any time, delegate by power of attorney or otherwise to any person for any period, all or any right, power, authority or discretion vested in it in its capacity as such.
|
(b) |
That delegation may be made upon any terms and conditions (including the power to sub-delegate) and subject to any restrictions that the Security Agent, that Receiver or that Delegate (as the case may be) may, in its discretion, think fit in the interests of the Finance Parties.
|
(c) |
No Security Agent, Receiver or Delegate shall be bound to supervise, or be in any way responsible for any damages, costs or losses incurred by reason of any misconduct, omission or default on the part of, any such delegate or sub-delegate.
|
(a) |
The Security Agent may at any time appoint (and subsequently remove) any person to act as a separate trustee or as a co-trustee jointly with it:
|
(i) |
if it considers that appointment to be in the interests of the Finance Parties;
|
(ii) |
for the purposes of conforming to any legal requirement, restriction or condition which the Security Agent deems to be relevant; or
|
(iii) |
for obtaining or enforcing any judgment in any jurisdiction,
|
(b) |
Any person so appointed shall have the rights, powers, authorities and discretions (not exceeding those given to the Security Agent under or in connection with the Finance Documents) and the duties, obligations and responsibilities that are given or imposed by the instrument of appointment.
|
(c) |
The remuneration that the Security Agent may pay to that person, and any costs and expenses (together with any applicable VAT) incurred by that person in performing its functions pursuant to that appointment shall, for the purposes of this Agreement, be treated as costs and expenses incurred by the Security Agent.
|
(d) |
At the request of the Security Agent, the other Parties shall forthwith execute all such documents and do all such things as may be required to perfect such appointment or removal and each such Party irrevocably authorises the Security Agent in its name and on its behalf to do the same.
|
(e) |
Such a person shall accede to this Agreement as a Security Agent to the extent necessary to carry out their role on terms satisfactory to the Security Agent.
|
(f) |
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 person if the Security Agent shall have exercised reasonable care in the selection of such person.
|
(a) |
all of the Secured Obligations and all other obligations secured by the Security Documents have been fully and finally discharged; and
|
(i) |
the trusts set out in this Agreement shall be wound up and the Security Agent shall release, without recourse or warranty, all of the Transaction Security and the rights of the Security Agent under each of the Security Documents; and
|
(ii) |
any Security Agent which has resigned pursuant to clause 31.16
(Resignation of the Agent or the Security Agent)
shall release, without recourse or warranty, all of its rights under each Security Document.
|
32.11 |
Powers supplemental to Trustee Acts
|
(a) |
The Security Agent may refrain from enforcing the Transaction Security unless instructed otherwise by Majority Lenders.
|
(b) |
Subject to the Transaction Security having become enforceable in accordance with its terms, the Majority Lenders may give or refrain from giving instructions to the Security Agent to enforce or refrain from enforcing the Transaction Security as they see fit.
|
(c) |
The Security Agent is entitled to rely on and comply with instructions given in accordance with this clause 33.1.
|
33.3 |
Waiver of rights
|
33.4 |
Enforcement through Security Agent only
|
(a) |
in discharging any sums owing to the Security Agent (other than pursuant to clause 32.1
(Undertaking to pay)
or 32.2
(Parallel debt)
), any Receiver or any Delegate;
|
(b) |
in discharging all costs and expenses incurred by any Finance Party in connection with any realisation or enforcement of the Transaction Security taken in accordance with the terms of this Agreement;
|
(c) |
in payment or distribution to the Agent on its own behalf and on behalf of the other Finance Parties for application in accordance with clause 37.6
(Partial payments)
;
|
(d) |
if none of the Obligors is under any further actual or contingent liability under any Finance Document, in payment or distribution to any person to whom the Security Agent is obliged to pay or distribute in priority to any Obligor; and
|
(e) |
the balance, if any, in payment or distribution to the relevant Obligor.
|
34.2 |
Investment of cash proceeds
|
(a) |
all or part of any Recoveries which are in the form of cash; and
|
(b) |
any cash which is generated by holding, managing, exploiting, collecting, realising or disposing of any proceeds of the Security Property which are not in the form of cash,
|
34.3 |
Currency conversion
|
(a) |
For the purpose of, or pending the discharge of, any of the Secured Obligations the Security Agent may:
|
(i) |
convert any moneys received or recovered by the Security Agent from one currency to another; and
|
(ii) |
notionally convert the valuation provided in any opinion or valuation from one currency to another,
|
(b) |
The obligations of any Obligor to pay in the due currency shall only be satisfied:
|
(i) |
in the case of paragraph (a)(i) above, to the extent of the amount of the due currency purchased after deducting the costs of conversion; and
|
(ii) |
in the case of paragraph (a)(ii) above, to the extent of the amount of the due currency which results from the notional conversion referred to in that paragraph.
|
34.4 |
Permitted Deductions
|
34.5 |
Good discharge
|
(a) |
Any distribution or payment to be made in respect of the Secured Obligations by the Security Agent may be made to the Agent on behalf of the Finance Parties.
|
(b) |
Any distribution or payment made as described in paragraph (a) above shall be a good discharge, to the extent of that payment or distribution, by the Security Agent to the extent of that payment.
|
(c) |
The Security Agent is under no obligation to make the payments to the Agent under paragraph (a) above in the same currency as that in which the Secured Liabilities owing to the relevant Finance Party are denominated pursuant to the relevant Finance Document.
|
34.6 |
Calculation of amounts
|
(a) |
notionally convert the Secured Liabilities owed to any person into a common base currency (decided in its discretion by the Security Agent), that notional conversion to be made at the spot rate at which the Security Agent is able to purchase the notional base currency with the actual currency of the Secured Liabilities owed to that person at the time at which that calculation is to be made; and
|
(b) |
assume that all amounts received or recovered as a result of the enforcement or realisation of the Security Property are applied in discharge of the Secured Liabilities in accordance with the terms of the Finance Documents under which those Secured Liabilities have arisen.
|
34.7 |
Release to facilitate enforcement and realisation
|
(a) |
Each Finance Party acknowledges that, for the purpose of any enforcement action by the Security Agent or a Receiver and/or maximising or facilitating the realisation of the Charged Property, it may be desirable that certain rights or claims against an Obligor and/or under certain of the Transaction Security, be released.
|
(b) |
Each other Finance Party hereby irrevocably authorises the Security Agent (acting on the instructions of the Agent) to grant any such releases to the extent necessary to effect such enforcement action and/or realisation including, to the extent necessary for such purpose, to execute release documents in the name of and on behalf of the other Finance Parties.
|
(c) |
Where the relevant enforcement is by way of disposal of shares in the Borrower, the requisite release may include releases of all claims (including under guarantees) of the Finance Parties and/or the Security Agent against the Borrower and of all Security Interests over the assets of the Borrower.
|
34.8 |
Dealings with Security Agent
|
34.9 |
Disclosure between Finance Parties and Security Agent
|
34.10 |
Notification of prescribed events
|
(a) |
If an Event of Default or Default either occurs or ceases to be continuing, the Agent shall, upon becoming aware of that occurrence or cessation, notify the Security Agent.
|
(b) |
If the Security Agent enforces, or takes formal steps to enforce, any of the Transaction Security it shall notify each other Finance Party of that action.
|
(c) |
If any Finance Party exercises any right it may have to enforce, or to take formal steps to enforce, any of the Transaction Security it shall notify the Security Agent and the Security Agent shall, upon receiving that notification, notify each other Finance Party of that action.
|
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.
|
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 37.6
(Partial 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.
|
(a) |
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.
|
(b) |
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, if:
|
(i) |
it notified that other Finance Party of the legal or arbitration proceedings;
|
(ii) |
the taking legal or arbitration proceedings was in accordance with the terms of this Agreement; and
|
(iii) |
that other Finance Party had an opportunity to participate in those legal or arbitration proceedings but did not do so as soon as reasonably practicable having received notice and did not take separate legal or arbitration proceedings.
|
(b) |
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 such Participating Member State or London, as specified by the Agent) and with such bank as the Agent, in each case, specifies.
|
(a) |
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.
|
(b) |
Unless paragraph (c) below applies, 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.
|
(i) |
the Agent shall notify the Borrower of that Lender's identity and the Borrower shall on demand refund it to the Agent; and
|
(ii) |
the Lender by whom those funds should have been made available or, if that Lender fails to do so, the Borrower, shall on demand pay to the Agent the amount (as certified by the Agent) which will indemnify the Agent against any funding cost incurred by it as a result of paying out that sum before receiving those funds from that Lender.
|
(i) |
pay that amount direct to the required recipient(s); or
|
(ii) |
if in its absolute discretion it considers that it is not reasonably practicable to pay that amount direct to the required recipient(s), pay that amount or the relevant part of that amount to an interest-bearing account held with an Acceptable Bank within the meaning of paragraph (a) of the definition of "Acceptable Bank" and in relation to which no Insolvency Event has occurred and is continuing, in the name of the Borrower or the Lender making the payment (the
Paying Party
) and designated as a trust account for the benefit of the Party or Parties beneficially entitled to that payment under the Finance Documents (the
Recipient Party
or
Recipient Parties
).
|
(b) |
All interest accrued on the amount standing to the credit of the trust account shall be for the benefit of the Recipient Party or the Recipient Parties pro rata to their respective entitlements.
|
(c) |
A Party which has made a payment in accordance with this clause 37.5 shall be discharged of the relevant payment obligation under the Finance Documents and shall not take any credit risk with respect to the amounts standing to the credit of the trust account.
|
(i) |
that it has not given an instruction pursuant to paragraph (d) above; and
|
(ii) |
that it has been provided with the necessary information by that Recipient Party,
|
(i) |
first
, in or towards payment pro rata of any unpaid amount owing to the Agent, the Security Agent or the Arranger for their own account under those Finance Documents;
|
(ii) |
secondly
, in or towards payment to the Lenders pro rata of any amount owing to the Lenders under clause 31.15 (
Lenders' indemnity to the Agent and others
);
|
(iii) |
thirdly
, in or towards payment to the Lenders pro rata of all other amounts due to them but unpaid under the Finance Documents; and
|
(b) |
The Agent shall, if so directed by all the Lenders and with prior written notice to the Obligors, vary the order set out in paragraphs (ii) to (iv) of paragraph (a) above.
|
(c) |
Paragraphs (a) and (b) above will override any appropriation made by an Obligor.
|
37.7 |
No set-off by Obligors
|
(a) |
Any payment under the Finance Documents 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).
|
(b) |
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.
|
37.9 |
Currency of account
|
(a) |
Subject to paragraphs (b) and (c) below, dollars is the currency of account and payment for any sum due from an Obligor under any Finance Document.
|
(b) |
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.
|
(d) |
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
|
(a) |
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:
|
(i) |
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 Borrower ); and
|
(ii) |
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).
|
(b) |
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 Borrower ) specifies to be necessary, be amended to comply with any generally accepted conventions and market practice in the Interbank Market and otherwise to reflect the change in currency.
|
(b) |
the Agent shall not be obliged to consult with the Borrower in relation to any changes mentioned in paragraph (a) above if, in its reasonable 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;
|
(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.
|
39.1 |
Communications in writing
|
(a) |
in the case of any Obligor who 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,
|
(b) |
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).
|
(c) |
All notices from or to an Obligor shall be sent through the Agent.
|
(d) |
Any communication or document made or delivered to the Borrower in accordance with this clause 39.3 will be deemed to have been made or delivered to each of the Obligors.
|
(e) |
Any communication or document which becomes effective, in accordance with paragraphs (a) to (d) above, after 5:00 p.m. in the place of receipt shall be deemed only to become effective on the following day.
|
39.4 |
Notification of address
|
(i) |
notify each other in writing of their electronic mail address and/or any other information required to enable the transmission of information by that means; and
|
(ii) |
notify each other of any change to their address or any other such information supplied by them by not less than five Business Days' notice.
|
(b) |
Any such electronic communication as specified in paragraph (a) above to be made between an Obligor and a Finance Party may only be made in that way to the extent that those two Parties agree that, unless and until notified to the contrary, this is to be an accepted form of communication.
|
(d) |
Any electronic communication which becomes effective, in accordance with paragraph (c) above, after 5:00 p.m. in the place in which the Party to whom the relevant communication is sent or made available has its address for the purpose of this Agreement or any other Finance Document shall be deemed only to become effective on the following day.
|
(e) |
Any reference in a Finance Document to a communication being sent or received shall be construed to include that communication being made available in accordance with this clause 39.6.
|
39.7 |
English language
|
(a) |
Any notice given under or in connection with any Finance Document must be in English.
|
(b) |
All other documents provided under or in connection with any Finance Document must be:
|
(i) |
in English; or
|
(ii) |
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
|
(a) |
Subject to clause 43.2
(All Lender matters)
and clause 43.3
(Other exceptions)
, any term of the Finance Documents may be amended or waived only with the consent of the Majority Lenders and the Borrower and any such amendment or waiver will be binding on all the Finance Parties and other Obligors.
|
(b) |
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.
|
(c) |
Without prejudice to the generality of paragraphs (c), (d) and (e) of clause 31.11
(Rights and discretions of the 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.
|
(d) |
Each Obligor agrees to any such amendment or waiver permitted by this clause 43 which is agreed to by the Borrower. This includes any amendment or waiver which would, but for this paragraph (d), require the consent of the Guarantor.
|
(a) |
the definition of "Majority Lenders" in clause 1.1
(Definitions)
;
|
(d) |
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;
|
(e) |
an increase in, or an extension of, any Commitment or any requirement that a cancellation of Commitments reduces the Commitments of the Lenders rateably under the Facility;
|
(f) |
a change to the Borrower or any other Obligor;
|
(g) |
any provision which expressly requires the consent or approval of all the Lenders;
|
(h) |
clause 36 (Sharing among the Finance Parties);
|
(i) |
clause 2.2 (Finance Parties' rights and obligations), clause 7.1 (Illegality), clause 29 (Changes to the Lenders), clause 8.9 (Application of prepayments), this clause 43, clause 48 (Governing law) or clause 49.1 (Jurisdiction of English courts);
|
(j) |
the order of distribution under clause 34.1
(Order of application)
;
|
(k) |
the order of distribution under clause 37.6
(Partial payments)
;
|
(l) |
the currency in which any amount is payable under any Finance Document;
|
(n) |
(other than as expressly permitted by the provisions of any Finance Document) the nature or scope of:
|
(i) |
any guarantee and indemnity granted under any Finance Document (including under clause 18
(Guarantee and indemnity)
);
|
(ii) |
the Charged Property; or
|
(iii) |
the manner in which the proceeds of enforcement of the Transaction Security are distributed;
|
(o) |
the circumstances in which any of the Transaction Security is permitted or required to be released under any of the Finance Documents,
|
43.3 |
Other exceptions
|
(b) |
Notwithstanding clauses 43.1 and 43.2 and paragraph (a) above, 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.
|
43.4 |
Replacement of Screen Rate
|
43.5 |
Releases
|
(a) |
any Charged Property from the Transaction Security; or
|
(b) |
any Obligor from any of its guarantee or other obligations under any Finance Document.
|
(A) |
any given percentage (including, for the avoidance of doubt, unanimity) of the Total Commitments under the Facility; or
|
(B) |
the agreement of any specified group of Lenders,
|
(b) |
For the purposes of this clause 43.6, the Agent may assume that the following Lenders are Defaulting Lenders:
|
(i) |
any Lender which has notified the Agent that it has become a Defaulting Lender; and
|
(ii) |
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,
|
(a) |
any Defaulting Lender fails to respond to a request for a consent, waiver, amendment of or in relation to any term of any Finance Document or any other vote of Lenders under the terms of this Agreement within 10 Business Days of that request being made; or
|
(i) |
its Commitment or its participation in the Loan shall not be included for the purpose of calculating the Total Commitments or the amount of the Loan when ascertaining whether any relevant percentage (including, for the avoidance of doubt, unanimity) of Total Commitments or the amount of the Loan has been obtained to approve that request; and
|
(ii) |
its status as a Lender shall be disregarded for the purpose of ascertaining whether the agreement of any specified group of Lenders has been obtained to approve that request.
|
(A) |
the outstanding principal amount of such Lender's participation in the Loan;
|
(B) |
all accrued interest owing to such Lender;
|
(C) |
the Break Costs which would have been payable to such Lender pursuant to clause 11.5
(Break Costs)
had the Borrower prepaid in full that Lender's participation in the Loan on the date of the assignment; and
|
(D) |
all other amounts payable to that Lender under the Finance Documents on the date of the assignment; or
|
(ii) |
in an amount agreed between that Defaulting Lender, the Replacement Lender and the Borrower and which does not exceed the amount described in paragraph (i) above.
|
(b) |
Any assignment by a Defaulting Lender pursuant to this clause 43.8 shall be subject to the following conditions:
|
(i) |
the Borrower shall have no right to replace the Agent or the Security Agent;
|
(ii) |
neither the Agent nor the Defaulting Lender shall have any obligation to the Borrower to find a Replacement Lender;
|
(iii) |
the assignment must take place no later than five Business Days after the notice referred to in paragraph (a) above;
|
(iv) |
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; and
|
(c) |
The Defaulting Lender shall perform the checks described in paragraph (b) (v) above as soon as reasonably practicable following delivery of a notice referred to in paragraph (a) above and shall notify the Agent and the Borrower when it is satisfied that it has complied with those checks.
|
(a) |
For so long as a Borrower 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,
|
(1) |
any given percentage (including, for the avoidance of doubt, unanimity) of the Total Commitments; or
|
(2) |
the agreement of any specified group of Lenders,
|
(b) |
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 Borrower Affiliate (a Notifiable Debt Purchase Transaction), such notification to be substantially in the form set out in Part I of Schedule 6 (
Forms of Notifiable Debt Purchase Transaction Notice
).
|
(c) |
A Lender shall promptly notify the Agent if a Notifiable Debt Purchase Transaction to which it is a party:
|
(i) |
is terminated; or
|
(ii) |
ceases to be with a Borrower Affiliate,
|
(d) |
Each Borrower Affiliate that is a Lender agrees that:
|
(i) |
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
|
(ii) |
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.
|
44.1 |
Confidential Information
|
(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 one or more Obligors and to any of that person's Affiliates, Related Funds, Representatives, professional advisers and partners;
|
(iv) |
who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in paragraphs (b)(i) or (b)(ii) above;
|
(vi) |
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;
|
(vii) |
to whom or for whose benefit that Finance Party charges, assigns or otherwise creates Security (or may do so) pursuant to clause 29.8
(Security over Lenders' rights)
;
|
(viii) |
who is a Party; or
|
(ix) |
with the consent of the Borrower;
|
(d) |
to any rating agency (including its professional 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 and/or the Obligors.
|
44.3 |
Entire agreement
|
44.4 |
Inside information
|
44.5 |
Notification of disclosure
|
(a) |
of the circumstances of any disclosure of Confidential Information made to 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 or the rules of any relevant stock exchange or pursuant to any applicable law or regulation pursuant to clause 44.2 (
Disclosure of Confidential Information
) except where such disclosure is made to any such person 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 44.
|
44.6 |
Continuing obligations
|
(a) |
the date on which all amounts payable by the Obligors under or in connection with the Finance Documents 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.
|
45.1 |
Confidentiality and disclosure
|
(a) |
The Agent and each Obligor who is a Party agree to keep each Funding Rate confidential and not to disclose it to anyone, save to the extent permitted by paragraphs (b) and (c) below.
|
(i) |
any Funding Rate to the Borrower pursuant to clause 9.4
(Notification of rates of interest)
; and
|
(ii) |
any Funding Rate to any person appointed by it to provide administration services in respect of one or more of the Finance Documents to the extent necessary to enable such service provider to provide those services if the service provider to whom that information 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 Lender.
|
(c) |
The Agent may disclose any Funding Rate to:
|
(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 Funding Rate is to be given is informed in writing of its confidential nature and that it may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of the Agent or the relevant Obligor, 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 Lender.
|
45.2 |
Related obligations
|
(a) |
The Agent and each Obligor acknowledge that each Funding Rate is or may be price-sensitive information and that its use may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and the Agent and each Obligor undertake not to use any Funding Rate for any unlawful purpose.
|
(b) |
The Agent and each Obligor agree (to the extent permitted by law and regulation) to inform the relevant Lender:
|
(i) |
of the circumstances of any disclosure made pursuant to clause 45.1(c)(ii)
(Confidentiality and disclosure)
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 information has been disclosed in breach of this clause 45.
|
45.3 |
No Event of Default
|
47 |
Contractual recognition of bail-in
|
(a) |
any Bail-In Action in relation to any such liability, including (without limitation):
|
(i) |
a reduction, in full or in part, in the principal amount, or outstanding amount due (including any accrued but unpaid interest) in respect of any such liability;
|
(ii) |
a conversion of all, or part of, any such liability into shares or other instruments of ownership that may be issued to, or conferred on, it; and
|
(iii) |
a cancellation of any such liability; and
|
(b) |
a variation of any term of any Finance Document to the extent necessary to give effect to any Bail-In Action in relation to any such liability.
|
(b) |
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.
|
(c) |
Notwithstanding paragraph (a) above, 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.
|
(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 an agent for service of process 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:
|
Astarte International Inc.
|
Original Jurisdiction
|
The Republic of the Marshall Islands
|
Registration number
(or equivalent, if any) |
89977
|
English process agent (if not incorporated in England)
|
Top Properties (London) Limited
247 Gray's Inn Road, London WC1X 8QZ, United Kingdom
|
Registered office
|
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
|
Address for service of notices
|
c/o Central Mare Inc.
1, Vas. Sofias Street & Meg. Alexandrou, 151 24 Maroussi, Greece
Attn:
Andreas Louka
Email:
legal@centralmare.com
Tel:
+30 210 812 8320
|
Name:
|
Top Ships Inc.
|
Original Jurisdiction
|
The Republic of the Marshall Islands
|
Registration number
(or equivalent, if any) |
3571
|
English process agent (if not incorporated in England)
|
Top Properties (London) Limited
247 Gray's Inn Road, London WC1X 8QZ, United Kingdom
|
Registered office
|
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
|
Address for service of notices
|
c/o Central Mare Inc.
1, Vas. Sofias Street & Meg. Alexandrou, 151 24 Maroussi, Greece
Attn:
Andreas Louka
Email:
legal@centralmare.com
Tel:
+30 210 812 8320
|
Name
|
Amsterdam Trade Bank N.V.
|
Commitment $
|
8,993,100
|
TOTAL $
|
8,993,100
|
Total Commitments $
|
8,993,100
|
TOTAL $
|
8,993,100
|
Name
|
Amsterdam Trade Bank N.V.
|
Facility Office, address and attention details for notices
|
Herengracht 469
Amsterdam, 1017 BS
The Netherlands
Attn:
lraklis Tsirigotis / Vassilis Kolovos
Email:
i.tsirigotis@atbank.nl / v.kolovos@atbank.nl
|
Name
|
Amsterdam Trade Bank N.V.
|
Facility Office, address and attention details for notices
|
Herengracht 469
Amsterdam, 1017 BS
The Netherlands
Attn:
lraklis Tsirigotis / Vassilis Kolovos
Email:
i.tsirigotis@atbank.nl / v.kolovos@atbank.nl
|
Name
|
Amsterdam Trade Bank N.V.
|
Address and attention details for notices
|
Herengracht 469
Amsterdam, 1017 BS
The Netherlands
Attn:
lraklis Tsirigotis / Vassilis Kolovos
Email:
i.tsirigotis@atbank.nl / v.kolobos@atbank.nl
|
Builder:
|
Hyundai Mipo Dockyard Co., Ltd.
|
Builder's registered office:
|
100 Bangeojinsunhwan-Doro, Dung-Gu, Ulsan 44113, Korea
|
Hull Number:
|
2648
|
Scheduled Delivery Date:
|
31 July 2018
|
Date and description of Building Contract:
|
shipbuilding contract dated 20 April 2017 as amended and supplemented by Amendment No. 1 dated 18 July 2017
|
Contract Price:
|
$31,977,000
|
Date and number of Refund Guarantee:
|
11 July 2017 with number 1201GAD170700001, as amended on 21 August 2017
|
Name and address of Refund Guarantor:
|
KEB Hana Bank
Gye Dong Br., 75, Yulgok-Ro, Jongno-Gu, Seoul, Korea
|
Charter description:
|
time charter dated 1 September 2017
|
Charterer:
|
Central Ship Chartering Inc.
|
Classification:
|
+100A1, Double Hull Oil and Chemical Tanker, Ship Type 2 and Ship Type 3, ESP, CSR, +LMC, UMS, *IWS, LI, SRM4, ECO (IHM, P), NAV1, IGS, ShipRight (CM, ACS(B)) with descriptive notes COW(LR), ETA, ShipRight (BWMP(S)), SERS, SCM, VECS)
|
Classification Society:
|
Lloyds Register of Shipping
|
Major Casualty Amount:
|
$500,000
|
1 |
Original Obligors' corporate documents
|
(a) |
A copy of the Constitutional Documents of each Original Obligor.
|
(i) |
approving the terms of, and the transactions contemplated by, the Transaction Documents to which it is a party (its
Relevant Documents
) and resolving that it execute, deliver and perform the Relevant Documents to which it is a party;
|
(ii) |
authorising a specified person or persons to execute its 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 its Relevant Documents.
|
(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 specimen of the signature of each person authorised by the resolution referred to in paragraph (b) above in relation to its Relevant Documents and related documents.
|
(f) |
A copy of a resolution of the board of directors of each corporate shareholder of each Original Obligor (other than the Charterer) approving the terms of the resolution referred to in paragraph (e) above.
|
(g) |
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, guarantee, security or similar limit binding on any Original Obligor (other than the Charterer) to be exceeded.
|
(h) |
A copy of any power of attorney under which any person is appointed by any Original Obligor (other than the Charterer) to execute any of its Relevant Documents on its behalf.
|
(i) |
A certificate of an authorised signatory of each relevant Original Obligor (other than the Charterer) certifying that each copy document relating to it specified in this Part of this Schedule is correct, complete and in full force and effect and has not been amended or superseded 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.
|
(j) |
A goodstanding certificate from the Marshall Islands competent authority in respect of the Borrower and the Guarantor (not more than 14 days before the proposed first Utilisation Date).
|
2 |
Legal opinions
|
(a) |
The following legal opinions, each addressed to the Agent, the Security Agent and the Original Lenders and capable of being relied upon by any persons who become Lenders pursuant to the primary syndication of the Facility:
|
(b) |
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 prior to signing this Agreement.
|
(c) |
A legal opinion of the legal advisers to the Arranger, the Security Agent and the Agent in England and also each jurisdiction in which an Obligor is incorporated and/or which is or is to be the Flag State of the Ship, or in which an Account opened at the relevant time is established substantially in the form approved by the Agent prior to signing this Agreement.
|
3 |
Other documents and evidence
|
(a) |
Evidence that any process agent referred to in clause 49.2 (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 considers to be necessary (if it has notified the Borrower 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 Fee Letters duly executed and evidence that the fees, commissions, costs and expenses then due from the Borrower pursuant to clause 12
(Fees)
and clause 17
(Costs and expenses)
have been paid or will be paid by the first Utilisation Date.
|
4 |
Bank Account
|
5 |
Construction matters
|
(a) |
The original and a copy, certified by an approved person to be a true and complete copy, of the Building Contract and the Refund Guarantee.
|
(b) |
A Pre-Delivery Security Assignment duly executed by the Borrower .
|
(c) |
Duly executed notices of assignment and acknowledgement of those notices as required by the Pre-Delivery Security Assignment.
|
(d) |
A legal opinion addressed to the Agent, the Security Agent and the Original Lenders (and capable of being relied upon by any persons who become Lenders pursuant to the primary syndication of the Facility) of legal advisers to the Arranger, the Security Agent and the Agent in Korea
substantially in the form approved by the Agent prior to signing this Agreement.
|
6 |
Charter
|
(a) |
The Charter, duly executed, on such terms (including as to the identity of the Charterer, the charter rates and their tenors) and otherwise approved by the Majority Lenders.
|
(b) |
Such evidence as the Agent may require as to the due incorporation of the Charterer and any other party to the Charter Documents (other than an Obligor), their power and authority to enter into and perform those documents and the authorisation of their entry into them.
|
7 |
Share Security
|
8 |
"Know your customer" information
|
9 |
Disclosed Persons
|
10 |
Provisional Schedule
|
1 |
Confirmation
|
(a) |
neither the Builder nor any other party who may have a claim pursuant to the Building Contract Documents has any claims against the Ship or the Borrower and that there have been no breaches of the terms of such Building Contract Documents or any default thereunder;
|
(b) |
there have been no:
|
(i) |
amendments or variations to the Building Contract Documents;
|
(ii) |
release of the Builder or the Refund Guarantor from any of its obligations under the Building Contract or the Refund Guarantee;
|
(iii) |
waiver of any breach of such obligations; or
|
(iv) |
any consent to anything which would otherwise be such a breach,
|
(c) |
no action has been taken by the Builder or the Refund Guarantor which might in any way render any of the Building Contract Documents wholly or partly inoperative or unenforceable.
|
2 |
Construction matters
|
(a) |
An invoice or notification from the Builder demanding the payment of the Pre-Delivery Instalment which is to be financed by the Relevant Advance or, in the event that the Borrower has already paid such Pre-Delivery Instalment, evidence from the Builder of receipt of such payment.
|
(b) |
In the event that, under the terms of the Building Contract, such Pre-Delivery Instalment is payable upon completion of a stage of construction of the Ship relating to the Relevant Advance, such evidence in all respects satisfactory to the Agent that such stage of construction has been completed as is required by the Builder under the Building Contract and the provisional schedule provided to the Agent under paragraph 10 of Part 1 of this Schedule 3 (including as to the time of the relevant stage construction completion) (including, if required thereunder, stage certificate from the relevant classification society).
|
(c) |
Evidence from the Builder that any Pre-Delivery Instalments which had been due and payable prior to the Pre-Delivery Instalment which is to be financed by the Relevant Advance, have been paid in full.
|
(d) |
Evidence that any part of such Pre-Delivery Instalment which is not to be financed by the Relevant Advance has been paid or will be paid simultaneously with the Relevant Advance, to the Builder.
|
3 |
Corporate documents
|
(a) |
A certificate of an authorised signatory of the Borrower 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 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.
|
(c) |
A goodstanding certificate from the Marshall Islands competent authority in respect of the Borrower and the Guarantor (not more than 14 days before the proposed Utilisation Date relating to the Relevant Advance).
|
4 |
Fees and expenses
|
5 |
Survey report
|
6 |
Post-Delivery Facility Agreement
|
From: |
Astarte International Inc.
|
To: |
Amsterdam Trade Bank N.V.
|
Dated: |
[
l
]
|
1 |
We refer to the Facility Agreement. This is a Utilisation Request. Terms defined in the Facility Agreement have the same meaning in this Utilisation Request unless given a different meaning in this Utilisation Request.
|
2 |
We wish to borrow an Advance on the following terms:
|
Proposed Utilisation Date:
|
[
l
] (or, if that is not a Business Day, the next Business Day)
|
Amount:
|
$[
l
]
|
3 |
We confirm that each condition specified in clause 4.4
(Further conditions precedent)
is satisfied on the date of this Utilisation Request.
|
4 |
The purpose of this Advance is [
specify purpose complying with clause 3 of the Facility Agreement
] and its proceeds should be credited to [
l
] [
specify account
]].
|
5 |
This Utilisation Request is irrevocable.
|
To: |
Amsterdam Trade Bank N.V. as Agent
|
From: |
[
The Existing Lender
] (the
Existing Lender
) and [
The New Lender
] (the
New Lender
)
|
1 |
We refer to the Facility Agreement. This agreement (the
Agreement
) shall take effect as a Transfer Certificate for the purposes of the Facility Agreement. Terms defined in the Facility Agreement have the same meaning in this Agreement unless given a different meaning in this Agreement.
|
2 |
We refer to clause 29.6
(Procedure for assignment)
of the Facility Agreement:
|
(c) |
On the Transfer Date the New Lender becomes a Party as a Lender and is bound by obligations equivalent to those from which the Existing Lender is released under paragraph (b) above.
|
(d) |
The proposed Transfer Date is [●].
|
(e) |
The Facility Office and address and attention details for notices of the New Lender for the purposes of clause 39.2
(Addresses)
of the Facility Agreement are set out in the Schedule.
|
3 |
The New Lender expressly acknowledges the limitations on the Existing Lender's obligations set out in clause 29.5
(Limitation of responsibility of Existing Lenders)
of the Facility Agreement.
|
4 |
The New Lender confirms that it [is]/ [is not] a Borrower Affiliate.
|
5 |
This Agreement acts as notice to the Agent (on behalf of each Finance Party) and, upon delivery in accordance with clause 29.7
(Copy of Transfer Certificate to Borrower)
, to the Borrower (on behalf of each Obligor) of the assignment referred to in this Agreement.
|
6 |
This Agreement 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 Agreement.
|
7 |
This Agreement and any non-contractual obligations connected with it are governed by English law.
|
8 |
This Agreement has been entered into on the date stated at the beginning of this Agreement.
|
To: |
Amsterdam Trade Bank N.V.as Agent
|
From: |
[
The Lender
]
|
1 |
We refer to clause 43.9
(Disenfranchisement of Borrower 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.
|
3 |
The Notifiable Debt Purchase Transaction referred to in paragraph 2 above relates to the amount of our Commitment as set out below.
|
Amount of our Commitment to which Notifiable Debt Purchase Transaction relates:
|
[insert amount (of that Commitment) to which the relevant Debt Purchase Transaction applies]
|
1 |
We refer to clause 43.9
(Disenfranchisement of Borrower 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 [
l
] has [terminated]/ [ceased to be with a Borrower Affiliate].
*
|
3 |
The Notifiable Debt Purchase Transaction referred to in paragraph 2 above relates to the amount of our Commitment as set out below.
|
Amount of our Commitment to which Notifiable Debt Purchase Transaction relates:
|
[insert amount (of that Commitment) to which the relevant Debt Purchase Transaction applies]
|
To: |
Amsterdam Trade Bank N.V. as Agent
|
From: |
Astarte International Inc. as Borrower
|
Dated: |
[
l
]
|
(b) |
Minimum liquidity
: the Group's Cash and Cash Equivalents were [
l
] calculated as shown in [Appendix B] versus a minimum required aggregate amount of (i) $750,000 per Fleet Vessel and (ii) $500,000 per Chartered Vessel
[attach relevant evidence]
.
|
3 |
[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.]
|
PREAMBLE
|
3
|
||
ARTICLE
|
I
|
: DESCRIPTION AND CLASS
|
4
|
II
|
: CONTRACT PRICE
|
7
|
|
III
|
: ADJUSTMENT OF THE CONTRACT PRICE
|
8
|
|
IV
|
: INSPECTION AND APPROVAL
|
12
|
|
V
|
: MODIFICATIONS, CHANGES AND EXTRAS
|
18
|
|
VI
|
: TRIALS AND COMPLETION
|
21
|
|
VII
|
: DELIVERY
|
25
|
|
VIII
|
: DELAYS AND EXTENSIONS OF TIME (FORCE MAJEURE)
|
29
|
|
IX
|
: WARRANTY OF QUALITY
|
32
|
|
X
|
: PAYMENT AND RESCISSION BY THE BUYER
|
36
|
|
XI
|
: BUYER'S AND BUILDER'S DEFAULT
|
42
|
|
XII
|
: BUYER'S SUPPLIES
|
46
|
|
XIII
|
: ARBITRATION
|
48
|
|
XIV
|
: SUCCESSORS AND ASSIGNS
|
50
|
|
XV
|
: TAXES AND DUTIES
|
51
|
|
XVI
|
: PATENTS, TRADEMARKS AND COPYRIGHTS
|
52
|
|
XVII
|
: INTERPRETATION AND GOVERNING LAW
|
54
|
|
XVIII
|
: NOTICE
|
55
|
|
XIX
|
: EFFECTIVENESS OF THIS CONTRACT
|
56
|
|
XX
|
: EXCLUSIVENESS
|
57
|
|
XXI
|
: INSURANCE
|
58
|
|
XXII
|
: COMPLIANCE AND ANTI-BRIBERY
|
60
|
|
EXHIBIT "A" LETTER OF GUARANTEE
|
63
|
||
EXHIBIT "B" PERFORMANCE GUARANTEE
|
67
|
1. |
DESCRIPTION
|
2. |
BASIC DIMENSIONS AND PRINCIPAL PARTICULARS OF THE VESSEL
|
(a) |
The basic dimensions and principal particulars of the VESSEL shall be :
|
Length, overall
|
abt. 183m
|
||
Length, between perpendiculars
|
175.15m
|
||
Breadth, moulded
|
32.2m
|
||
Depth, moulded
|
19.1m
|
||
Design draught, moulded
|
11.0m
|
||
Scantling draught, moulded
|
13.3m
|
Main Engine
|
:
|
HYUNDAI – B&W 6G50ME-C9.5 (Tier II)
Nominal Rating: 10,320 kW x 100.0 RPM
Engine Optimization : Part Load tuning by Exhaust Gas Bypass (EGB)
MCR: 7,180 kW x 86.9 RPM
NCR: 5,500 kW x 79.5 RPM
|
||
Deadweight, guaranteed
|
:
|
about 49,967 metric tons at the Scantling draught of 13.3 meters on even keel in sea water of specific gravity of 1.025.
|
Speed, guaranteed
|
:
|
14.4 knots at the design draught of 11.0 meters at the condition of clean bottom and in calm and deep sea with main engine output of 5,500 kW with 15% sea margin.
|
||
Fuel Consumption, guaranteed
|
:
|
163.5 grams/kW-hour using marine diesel oil having lower calorific value of 10,200kcal/kg at MCR measured at the shop trial with I.S.O reference conditions.
|
(b) |
The dimensions may be slightly modified by the BUILDER, who also reserves the right to make changes to the SPECIFICATIONS and the PLAN if found necessary to suit the local conditions and facilities of the SHIPYARD, the availability of materials and equipment, the introduction of improved production methods or otherwise, subject to the approval of the BUYER which the BUYER shall not withhold unreasonably, and the approval of the CLASSIFICATION SOCIETY.
|
3. |
CLASSIFICATION, RULES AND REGULATIONS
|
(a) |
The VESSEL, including its machinery, equipment and outfitting shall be constructed in accordance with the BUILDER's quality standard and shipbuilding practices.
|
(b) |
The BUILDER shall arrange with the CLASSIFICATION SOCIETY for the assignment by the CLASSIFICATION SOCIETY of representative(s) to the VESSEL during construction. All fees and charges incidental to classification of the VESSEL in compliance with the above specified rules, regulations and requirements of this CONTRACT shall be for the account of the BUILDER.
|
(c) |
The decision of the CLASSIFICATION SOCIETY as to whether the VESSEL complies with the regulations of the CLASSIFICATION SOCIETY shall be final and binding upon the BUILDER and the BUYER. For the avoidance of doubt such decision shall only be final and binding in so far as compliance with the regulations of the CLASSIFICATION SOCIETY and shall have no wider application, including as to whether the VESSEL has been designed, constructed, equipped and completed in accordance with all terms of this CONTRACT.
|
(d) |
The facilities, labour and materials necessary for the safe and convenient conduct of any inspection by the CLASSIFICATION SOCIETY shall be furnished by the BUILDER. All major plans shall be subject to approval, inspection and test by the CLASSIFICATION SOCIETY in accordance with the rules and regulations of the CLASSIFICATION SOCIETY.
|
4. |
SUBCONTRACTING
|
5. |
NATIONALITY OF THE VESSEL
|
1. |
DELAYED DELIVERY
|
(a) |
No adjustment shall be made and the CONTRACT PRICE shall remain unchanged for the first thirty (30) days of the delay in delivery of the VESSEL [ending as of 12 o'clock midnight Korean Standard Time on the thirtieth (30th) day of delay] beyond the Delivery Date calculated as provided in Article VII.1. hereof.
|
(b) |
If delivery of the VESSEL is delayed more than thirty (30) days beyond the date upon which the delivery is due from the BUILDER under the terms of this CONTRACT, then, beginning at midnight of the thirtieth (30th) day after such due date, the CONTRACT PRICE of the VESSEL shall be reduced by U.S. Dollars Seven Thousand Two Hundred (US$7,200) for each full day of delay shall not exceed the amount due to cover the delay of one hundred and sixty five (165) days after thirty (30) days of the delay in delivery of the VESSEL at the rate of deduction as specified hereinabove.
|
(c) |
But, if the delay in delivery of the VESSEL continues for a period of more than one hundred and ninety five days (195) days beyond the date upon which the delivery is due from the BUILDER under the terms of this CONTRACT then, in such event, and after such period has expired, the BUYER may, at its option, cancel this CONTRACT by serving upon the BUILDER a notice of cancellation in writing or by e-mail or facsimile directed to the BUILDER at the address given in this CONTRACT, and the provisions of Article X.5 shall apply. Such cancellation shall be effective as of the date the notice thereof is received by the BUILDER. If the BUYER has not served the notice of cancellation after the aforementioned one hundred and ninety five days (195) days delay in delivery, the BUILDER may demand the BUYER to make an election in accordance with Article VIII.3. hereof.
|
(d) |
For the purpose of this Article, the delivery of the VESSEL shall be deemed to be delayed when and if the VESSEL, after taking into full account extension of the Delivery Date or permissible delays as provided in Article V, VI, VIII, XI or elsewhere in this CONTRACT, is delivered beyond or before the date upon which delivery would then be due under the terms of this CONTRACT.
|
2. |
INSUFFICIENT SPEED
|
(a) |
The CONTRACT PRICE of the VESSEL shall not be affected or changed, if the actual speed, as determined by trial runs more fully described in Article VI hereof, is less than the guaranteed speed as defined in Article I paragraph 2 hereof, provided such deficiency in actual speed is not more than three-tenths (3/10) of a knot below the guaranteed speed.
|
(b) |
However, as for the deficiency of more than three-tenths (3/10) of a knot in actual speed below the guaranteed speed, the CONTRACT PRICE shall be reduced by U.S. Dollars Eighteen Thousand (US$18,000) for each full one-tenth (1/10) of a knot in excess of the said three-tenths (3/10) of a knot of deficiency in speed [fractions of less than one-tenth (1/10) of a knot shall be regarded as a full one-tenth (1/10) of a knot]. However, unless the parties agree otherwise, the total amount of reduction from the CONTRACT PRICE shall not exceed the amount due to cover the deficiency of eight-tenths(8/10) full knot below the guaranteed speed at the rate of reduction as specified above.
|
(c) |
If the deficiency in actual speed of the VESSEL is more than eight-tenths (8/10) of a full knot below the guaranteed speed, then the BUYER, at its option, may, subject to the BUILDER's right to effect alterations or corrections as provided in Article VI.5. hereof, cancel this CONTRACT by the BUYER sending a notice of cancellation to the BUILDER in writing or by email or facsimile, and the provisions of Article X.5 shall apply, or may accept the VESSEL at a reduction in the CONTRACT PRICE as above provided for eight-tenths (8/10) full knot of deficiency only.
|
3. |
EXCESSIVE FUEL CONSUMPTION
|
(a) |
The CONTRACT PRICE of the VESSEL shall not be affected or changed by reason of the fuel consumption of the VESSEL's main engine, as determined by the engine manufacturer's shop trial as per the SPECIFICATIONS being more than the guaranteed fuel consumption of the VESSEL's main engine as defined in Article I paragraph 2 hereof, if such excess is not more than five per cent (5%) over the guaranteed fuel consumption.
|
(b) |
However, as for the excess of more than five percent (5%) in the actual fuel consumption over the guaranteed fuel consumption of the VESSEL's main engine, the CONTRACT PRICE shall be reduced by U.S. Dollars Fifteen Thousand Three Hundred (US$15,300) for each full one per cent (1%) increase in fuel consumption in excess of the said five per cent (5%) increase in fuel consumption [fraction of less than one per cent (1%) shall be regarded as a full one percent (1%)]. However, unless the parties agree otherwise, the total
|
(c) |
If such actual fuel consumption exceeds the guaranteed fuel consumption of the VESSEL's main engine by more than eight percent (8%), the BUYER, at its option, may, subject to the BUILDER's right to effect alterations or corrections as specified in Article VI. 5. hereof, reject the main engine or require rectification thereof to the BUYER's complete satisfaction. If the BUILDER is unable to comply with the BUYER's request as aforesaid or if the BUYER elects to reject the main engine then the BUYER may cancel this CONTRACT by the BUYER sending a notice of cancellation to the BUILDER in writing or by email or facsimile, and the provisions of Article X.5 shall apply, or may accept the VESSEL at a reduction in the CONTRACT PRICE as above provided for the eight percent (8%) increase only.
|
4. |
DEADWEIGHT BELOW CONTRACT REQUIREMENTS
|
(a) |
The CONTRACT PRICE of the VESSEL shall not be affected or changed, if the actual deadweight determined as provided in this CONTRACT and the SPECIFICATIONS, is below the guaranteed deadweight as defined in Article I paragraph 2 hereof by one point five per cent (1.5%) of the guaranteed deadweight or less.
|
(b) |
However, should the deficiency in the actual deadweight of the VESSEL be more than one point five per cent (1.5%) of the guaranteed deadweight (disregarding fractions of less than one (1) metric ton), the CONTRACT PRICE shall be reduced by the sum of U.S. Dollars Two Hundred Seventy (US$270) for each one (1) metric ton deficiency (disregarding fractions of less than one (1) metric ton) in excess of the said one point five per cent (1.5%) of deficiency.
|
(c) |
In the event of such deficiency in the deadweight of the VESSEL being more than four per cent (4%) of the guaranteed deadweight, the BUYER, at its option, may, subject to the BUILDER's right to effect alterations or corrections as specified in Article VI. 5. hereof, cancel this CONTRACT by the BUYER sending a notice of cancellation to the BUILDER in writing or by email or facsimile, and the provisions of Article X.5 shall apply, or accept the VESSEL at a reduction in the CONTRACT PRICE as above provided for four per cent (4%) of deficiency only.
|
5. |
EFFECT OF CANCELLATION
|
6. |
CUMULATIVE EFFECT OF LIQUIDATED DAMAGES
|
1. |
APPOINTMENT OF BUYER'S REPRESENTATIVE
|
2. |
AUTHORITY OF THE BUYER'S REPRESENTATIVE
|
3. |
APPROVAL OF DRAWINGS
|
(a) |
The BUILDER shall submit to the BUYER three (3) copies of each of the plans and drawings to be submitted to the BUYER for its approval at its address as set forth in Article XVIII hereof. The BUYER shall, within fourteen (14) days including mailing time after receipt thereof, return to the BUILDER one (1) copy of such plans and drawings with
|
(b) |
When and if the BUYER'S REPRESENTATIVE shall have been sent by the BUYER to the SHIPYARD in accordance with Paragraph 1 of this Article, the BUILDER may submit the remainder, if any, of the plans and drawings in the agreed list, to the BUYER'S REPRESENTATIVE for his approval, unless otherwise agreed upon between the parties hereto.
|
(c) |
In the event that the BUYER or the BUYER'S REPRESENTATIVE shall fail to return the plans and drawings to the BUILDER within the time limit as hereinabove provided, such plans and drawings shall be deemed to have been automatically approved without any comment. In the event the plans and drawings submitted by the BUILDER to the BUYER or the BUYER'S REPRESENTATIVE in accordance with this Article do not meet with the BUYER's or the BUYER'S REPRESENTATIVE's approval and the parties cannot reach agreement between them, the matter may be submitted by either party hereto for determination pursuant to Article XIII hereof. If the BUYER's comments on the plans and drawings that are returned to the BUILDER by the BUYER within the said time limit are not clearly specified or detailed, the BUILDER shall seek clarification from the BUYER prior to implementing them which clarification must be provided in writing by the BUYER within seven (7) days of such request from the BUILDER. If the BUYER shall fail to provide the BUILDER with such clarification within the said time limit, then the BUILDER shall be entitled to place its own interpretation on such comments in implementing them.
|
4. |
SALARIES AND EXPENSES
|
5. |
RESPONSIBILITY OF THE BUILDER
|
(a) |
The BUILDER shall provide the BUYER'S REPRESENTATIVE and his assistants free of charge with suitably furnished office space at, or in the immediate vicinity of, the SHIPYARD together with telephone, broadband internet access, e-mail, facsimile, air conditioning, lavatory facilities and such other reasonable facilities as may be necessary to enable the BUYER'S REPRESENTATIVE and his assistants to carry out their work under this CONTRACT. However, the BUYER shall pay for the communication charges of the telephone, broadband internet, e-mail or facsimile facilities used by the BUYER'S REPRESENTATIVE or his assistants.
|
(b) |
The BUYER'S REPRESENTATIVE and his assistants shall at all times remain the employees of the BUYER. The BUILDER shall not be liable to the BUYER or the BUYER'S REPRESENTATIVE or to his assistants or to the BUYER's employees or agents for personal injuries, including death, during the time they, or any of them, are on the VESSEL, or within the premises of either the BUILDER or its sub-contractors, or are otherwise engaged in and about the construction of the VESSEL, unless, however, such personal injuries, including death, are caused by the negligence of the BUILDER, , its sub-contractors, or its or their employees or agents. The BUILDER shall not be liable to the BUYER for damages to, or destruction of property of the BUYER or of the BUYER'S REPRESENTATIVE or his assistants or the BUYER's employees or agents, unless such damages, loss or destruction is caused by the negligence of the BUILDER, its sub-contractors, or its or their employees or agents.
|
6. |
RESPONSIBILITY OF THE BUYER
|
1. |
HOW EFFECTED
|
2. |
SUBSTITUTION OF MATERIAL
|
3. |
CHANGES IN RULES AND REGULATIONS
|
(a) |
any increase or decrease in the CONTRACT PRICE of the VESSEL that is occasioned by such compliance;
|
(b) |
any extension or advancement in the Delivery Date of the VESSEL that is occasioned by such compliance;
|
(c) |
any increase or decrease in the deadweight and/or cubic capacity of the VESSEL, if such compliance results in any increase or reduction in the deadweight and/or cubic capacity ;
|
(d) |
adjustment of the speed requirements if such compliance results in any increase or reduction in the speed ; and
|
(e) |
any other alterations in the terms of this CONTRACT or of the SPECIFICATIONS or the PLAN or both, if such compliance makes such alterations of the terms necessary.
|
1. |
NOTICE
|
2. |
WEATHER CONDITION
|
3. |
HOW CONDUCTED
|
4. |
CONSUMABLE STORES
|
5. |
ACCEPTANCE OR REJECTION
|
(a) |
The BUILDER shall as soon as possible following the completion of the trials of the VESSEL deliver to the BUYER a detailed report setting out the results of the trials and an analysis of such results and confirmation that the BUILDER considers that the results of the trial run indicate that the VESSEL is in all respects in conformity with this CONTRACT and the SPECIFICATIONS and the PLAN. The BUYER shall within seven (7) days after receipt of such report, notify the BUILDER in writing of its acceptance of the VESSEL, or of its rejection of the VESSEL, or of the details in respect of which the VESSEL does not conform to the SPECIFICATIONS and the PLAN or this CONTRACT.
|
(b) |
If, during any sea trial, any breakdown occurs entailing interruption or irregular performance which can be repaired on board, the trial shall be continued after such repairs and be valid in all respects, provided the BUYER and the CLASSIFICATION SOCIETY agrees on the extent of such repairs being carried out.
|
(c) |
However, if, during or after the trial run, it becomes apparent that the VESSEL or any part of her machinery or equipment does not conform to the requirements of the CONTRACT, the PLAN and/or the SPECIFICATIONS, the BUILDER shall correct such non-conformity and perform such tests and/or trials as are necessary to confirm conformity to the CONTRACT, the PLAN and/or the SPECIFICATIONS.
|
(d) |
Save as above provided, The BUYER shall, within three (3) days after completion of the trial run and the receipt of all records of tests and trials carried out on that trial run, notify the BUILDER in writing or by e-mail or facsimile confirmed in writing of its acceptance of the VESSEL or of the details in respect of which the VESSEL does not conform to the SPECIFICATIONS or this CONTRACT or of the details in respect of which the VESSEL does not conform to the SPECIFICATIONS or this CONTRACT.
|
(e) |
However, the BUYER shall not be entitled to reject the VESSEL by reason of any minor or insubstantial items judged from the point of view of standard shipbuilding and shipping practice as not being in conformity with the SPECIFICATIONS, but, in that case, the BUILDER shall not be released from the obligation to correct and/or remedy such minor or insubstantial items as soon as practicable after the delivery of the VESSEL.
|
(f) |
If inconvenient for the VESSEL to have any non-conformities with the CONTRACT, the PLAN and/or the SPECIFICATIONS corrected and/or remedied at the SHIPYARD, the BUILDER may, at the BUYER's option, arrange to have the corrections or remedies carried out elsewhere, and may, if practicable and at the BUYER's option, do such work while the VESSEL is sailing. The BUYER may in its absolute discretion, if proposed by the BUILDER, decide to accept a payment from the BUILDER in lieu of such items being corrected and/or remedied, which payment in lieu shall first be agreed between the BUILDER and the BUYER.
|
6. |
EFFECT OF ACCEPTANCE
|
1. |
TIME AND PLACE
|
2. |
WHEN AND HOW EFFECTED
|
3. |
DOCUMENTS TO BE DELIVERED TO THE BUYER
|
(a) |
PROTOCOL OF TRIALS of the VESSEL made pursuant to this CONTRACT and the SPECIFICATIONS,
|
(b) |
PROTOCOL OF INVENTORY of the equipment of the VESSEL, including spare parts, all as specified in the SPECIFICATIONS,
|
(c) |
PROTOCOL OF CONSUMABLE NATURE, such as all fuel oil and fresh water remaining in tanks if its cost is charged to the BUYER under Article VI. 4. hereof,
|
(d) |
DRAWING AND PLANS pertaining to the VESSEL as stipulated in the SPECIFICATIONS, which shall be furnished to the BUYER at no additional cost,
|
(e) |
ALL CERTIFICATES required to be furnished upon delivery of the VESSEL pursuant to this CONTRACT, the SPECIFICATIONS and the customary shipbuilding practice, including
|
(i) |
Classification Certificate
|
(ii) |
Safety Construction Certificate
|
(iii) |
Safety Equipment Certificate
|
(iv) |
Safety Radiotelegraphy Certificate
|
(v) |
International Loadline Certificate
|
(vi) |
International Tonnage Certificate
|
(vii) |
BUILDER's Certificate
|
(viii) |
Ship Sanitation Control Exemption Certificate
|
(f) |
DECLARATION OF WARRANTY of the BUILDER that the VESSEL is delivered to the BUYER free and clear of any liens, claims, charges, mortgages, or other encumbrances upon the BUYER's title thereto, and in particular, that the VESSEL is absolutely free of all burdens in the nature of imposts, taxes, or charges imposed by the prefecture or country of the port of delivery, as well as of all liabilities of the BUILDER to its sub-contractors and employees and of all liabilities arising from the operation of the VESSEL in trial runs, or otherwise, prior to delivery except as otherwise provided under this CONTRACT.
|
(g) |
BUILDER'S CERTIFICATE
|
(h) |
CERTIFICATE OF NON-REGISTRATION
|
(i) |
COMMERCIAL INVOICES covering the last instalment and modifications.
|
(j) |
BILL OF SALE or other document that certifies that the title of the VESSEL passes to the BUYER.
|
(k) |
Such other documents as the BUYER may reasonably require in connection with the registration of the VESSEL, which shall be agreed at least twenty eight (28) days prior to the DELIVERY DATE.
|
4. |
TENDER OF THE VESSEL
|
5. |
TITLE AND RISK
|
6. |
REMOVAL OF THE VESSEL
|
1. |
CAUSES OF DELAY
|
2. |
NOTICE OF DELAYS
|
3. |
RIGHT TO CANCEL FOR EXCESSIVE DELAY
|
(a) |
Such future date shall become the contractual delivery date for the purposes of this CONTRACT but this new date shall not be subject to any further extension by reason of permissible delays as herein provided, and
|
(b) |
If the VESSEL is not delivered by such revised contractual delivery date, the BUYER shall have the same right to liquidated damages and rights of cancellation upon the same terms as provided in this CONTRACT.
|
4. |
DEFINITION OF PERMISSIBLE DELAYS
|
1. |
GUARANTEE
|
2. |
NOTICE OF DEFECTS
|
3. |
REMEDY OF DEFECTS
|
(a) |
The HGS on behalf of BUILDER shall remedy, at its expense, any DEFECT against which the VESSEL is guaranteed under this Article, by making all necessary repairs or replacements at the SHIPYARD or elsewhere as provided for in (b) hereinbelow.
|
(b) |
However, if it is impractical to bring the VESSEL to the SHIPYARD, the BUYER may cause the necessary repairs or replacements to be made elsewhere which is deemed suitable for the purpose, provided that, in such event, the BUILDER and the HGS
may forward or supply replacement parts or materials to the VESSEL, unless forwarding or supplying thereof to the VESSEL would impair or delay the operation or working schedule of the VESSEL. In the event that the BUILDER and the HGS proposes to cause the necessary repairs or replacements to be made to the VESSEL at any other shipyard or works than the SHIPYARD, the BUYER shall first, but in all events as soon as possible, give the BUILDER and the HGS
notice in writing or by e-mail or facsimile of the time and place such repairs will be made, and if the VESSEL is not thereby delayed, or her operation or working schedule is not thereby impaired, the BUILDER and the HGS
shall have the right to verify by its own representative(s) the nature and extent of the DEFECTS complained of. The BUILDER and the HGS
shall in such case, promptly advise the BUYER in writing or by e-mail or facsimile, after such examination has been completed, of its acceptance or rejection of the DEFECTS as ones that are covered by the guarantee herein provided. Upon the BUILDER and the HGS's acceptance of the DEFECTS as justifying remedy under this Article, or upon the award of the arbitration tribunal so determining, the HGS on behalf of Builder shall pay to the BUYER for such repairs or replacements a sum equal to the actual direct cost of the repairs or replacements, as evidenced by the final invoices of the relevant shipyard/repairer or supplier., however, the amount of the HGS's payment to the BUYER for such repairs or replacements shall not exceed the average cost quoted by one reputable repair yard in Singapore and one reputable repair yard in China.
|
(c) |
In any case, the VESSEL shall be taken at the BUYER's costs and responsibility to the place elected, ready in all respects for such repairs or replacements and in any event, the BUILDER and the HGS
shall not be responsible for towage, dockage, wharfage, port charges or any other cost or expenses whatsoever incurred by the BUYER in getting and keeping the VESSEL ready for such repairs or replacements.
|
(d) |
In the event that it is necessary for the BUILDER and the HGS
to forward a replacement for a defective part under this guarantee, replacement parts shall be shipped to the BUYER under the terms of F.O.B. port of the country where they are to be purchased.
|
(e) |
The BUILDER and the HGS
reserve the option to retrieve, at the BUILDER and the HGS's cost, any of the replaced equipment/parts in case DEFECTS are remedied in accordance with the provisions in this Article.
|
(f) |
Any dispute under this article shall be referred to arbitration in accordance with the provisions of Article XIII hereof.
|
4. |
EXTENT OF BUILDER'S RESPONSIBILITY
|
(a) |
After delivery of the VESSEL the BUILDER and the HGS shall have no responsibility for any other DEFECTS whatsoever in the VESSEL than the DEFECTS specified in paragraph 1 of this Article, unless such defect was caused or occasioned by the negligence of the BUILDER and the HGS, its subcontractors or their respective employees within the Guarantee Period. The BUILDER and the HGS shall have no liability whatsoever in any circumstances whatsoever to the BUYER or to any third party for anything except the cost of repairing the DEFECT itself. The BUILDER and the HGS shall not in any circumstances be responsible or liable for any consequential or special losses, damages or expenses including, but not limited to, loss of time, loss of profit or earning or demurrage directly or indirectly occasioned to the BUYER or any third party by reason of the DEFECTS specified in paragraph 1 of this Article or due to repairs or other works done to the VESSEL to remedy such DEFECTS. After delivery, the BUYER shall hold the BUILDER and the HGS harmless and indemnify the BUILDER and the HGS against any claim from the BUYER or any third party whatsoever in respect of any such matters and in respect of any other claims relating to the VESSEL for which the BUILDER and the HGS do not expressly give a warranty to the BUYER under this Article.
|
(b) |
The BUILDER and the HGS shall not be responsible for any DEFECTS in any part of the VESSEL which may subsequent to delivery of the VESSEL have been replaced or in any way repaired by any other contractor, or for any DEFECTS which have been caused or aggravated by omission or improper use and maintenance of the VESSEL on the part of the BUYER, its servants or agents or by ordinary wear and tear or by any other circumstances beyond the control of the BUILDER and the HGS.
|
(c) |
The guarantee contained as hereinabove in this Article replaces and excludes any other liability, guarantee, warranty and/or condition whether expressly set out in this CONTRACT or imposed or implied by the law, customary, statutory or otherwise, by reason of the construction and sale of the VESSEL by the BUILDER and the HGS for and to the BUYER.
|
5. |
ASSIGNMENT OF SUPPLIER'S GUARANTEES
|
1. |
CURRENCY
|
2. |
TERMS OF PAYMENT
|
(a) |
First Instalment
|
(b) |
Second Instalment
|
(c) |
Third Instalment
|
(d) |
Fourth Instalment
|
(e) |
Fifth Instalment
|
(f) |
Sixth Instalment
|
(g) |
Seventh Instalment
|
(h) |
Eighth Instalment
|
(i) |
Ninth Instalment
|
3. |
DEMAND FOR PAYMENT
|
4. |
METHOD OF PAYMENT
|
(a) |
All the pre-delivery payments and the payment due on delivery in settlement of the CONTRACT PRICE as provided for in Paragraph 2 of this Article shall be made in U.S. Dollars on or before the DUE DATE thereof by telegraphic transfer as follows;
|
(i) |
The payment of the first, second, third, fourth, fifth, sixth, seventh and eighth instalments shall be made to the account no.: 117-JCD-1016942 of the KEB Hana Bank (hereinafter called the "KEB HANA") in favour of the BUILDER or any other bank in favor of the BUILDER, as designated and notified by the BUILDER to the BUYER at least three (3) business days prior to the DUE DATE.
|
(ii) |
The ninth instalment as provided for in Paragraph 2.(h) of this Article shall be deposited at the account of the KEB HANA, Account No. 117-JCD-1016942, or any other bank in favor or the BUILDER, as designated and notified by the BUILDER, in an account in the name of the BUYER by telegraphic transfer remittance at least three (3) business days prior to the scheduled delivery date of the VESSEL as reasonably calculated and notified by the BUILDER, with instructions valid for fifteen (15) banking days that the said instalment is unconditionally payable to the BUILDER against presentation by the BUILDER to the KEB HANA, Seoul, Korea or such other bank where the said amount is deposited of a duplicate original copy of the PROTOCOL OF DELIVERY AND ACCEPTANCE of the VESSEL signed by the BUILDER and the BUYER.
|
(b) |
Simultaneously with each of such payments, the BUYER shall advise the BUILDER of the details of the payments by e-mail or facsimile and at the same time, the BUYER shall cause the BUYER's remitting Bank to advise the KEB HANA, or any other bank, Seoul, Korea as the case may be, of the details of such payments by authenticated bank cable or telex.
|
5. |
REFUND BY THE BUILDER
|
6. |
TOTAL LOSS
|
(a) |
to build another vessel in place of the VESSEL so lost and deliver it under this CONTRACT to the BUYER, provided that the parties hereto shall have agreed in writing to a reasonable cost and time for the construction of such vessel in place of the lost VESSEL, and in which case, any amounts recovered under the insurance referred to in Article XXI will be applied to the construction of the VESSEL; or
|
(b) |
to refund to the BUYER the full amount of the total sums paid by the BUYER to the BUILDER under the provisions of Paragraph 2 of this Article together with interest thereon at the rate of Three per cent (3%) per annum from the date following the date of receipt by the BUILDER of such pre-delivery instalment(s) to the date of payment by the BUILDER to the BUYER of the refund, and to pay to the BUYER the invoiced cost to the BUYER of all BUYER's Supplies which were incorporated into the VESSEL, and either (i) to return to the BUYER all BUYER's Supplies which were not incorporated into the VESSEL, or (ii) to pay to the BUYER the invoiced cost to the BUYER of all such supplies.
|
7. |
DISCHARGE OF OBLIGATIONS
|
8. |
REFUND GUARANTEE
|
9. |
PERFORMANCE GUARANTEE
|
1. |
DEFINITION OF BUYER'S DEFAULT
|
(a) |
If the first, second, third, fourth, fifth, sixth, seventh and eighth instalment is not paid to the BUILDER within respective DUE DATE of such instalments; or
|
(b) |
If the ninth instalment is not deposited in accordance with Article X.4.(a)(ii) hereof or if the said ninth instalment deposit is not released to the BUILDER against presentation by the BUILDER of a copy of the original PROTOCOL OF DELIVERY AND ACCEPTANCE; or
|
(c) |
If the BUYER fails to take delivery of the VESSEL within five (5) days when the VESSEL is duly tendered for delivery by the BUILDER under the provisions of Article VII hereof; or
|
(d) |
If an order or an effective resolution shall be passed for winding up of the BUYER (except for the purpose of reorganization, merger or amalgamation).
|
2 |
.EFFECT OF THE BUYER'S DEFAULT ON OR BEFORE THE DELIVERY OF THE VESSEL
|
(a) |
The DELIVERY DATE of the VESSEL shall be extended automatically for the actual period of such default to the extent that such default has actually delayed the construction of the VESSEL and the BUILDER shall not be obliged to pay any liquidated damages for the delay in delivery of the VESSEL actually caused thereby.
|
(b) |
The BUYER shall pay to the BUILDER interest at the rate of Four percent (4%) per annum in respect of the instalment(s) in default from the respective DUE DATE to the date of actual receipt by the BUILDER of the full amount of such instalment(s).
|
(c) |
If the BUYER is in default in payment of any of the instalment(s) due and payable prior to or simultaneously with the delivery of the VESSEL, the BUILDER shall, in writing or by
|
(d) |
If any of the BUYER's default continues for a period of fourteen (14) days after the BUILDER's notification to the BUYER of such default, the BUILDER may, at its option, rescind this CONTRACT by serving upon the BUYER a written notice or e-mail or facsimile notice of rescission confirmed in writing.
|
(e) |
In the event of such cancellation by the BUILDER of this CONTRACT due to the BUYER's default as provided for in paragraph 1 above, the BUILDER shall be entitled to retain and apply the instalments already paid by the BUYER to the recovery of the BUILDER's loss and damage due to the BUYER's default and the cancellation of this CONTRACT and at the same time the BUILDER shall have the full right and power either to complete or not to complete the VESSEL which is the sole property of the BUILDER as it deems fit, and to sell the VESSEL in its complete or incomplete state at a public or private sale on such terms and conditions as the BUILDER thinks fit without being answerable for any loss or damage but at the true market price in the prevailing market conditions
.
|
(f) |
In no event shall the BUYER's total liability in the event of the BUILDER rescinding this CONTRACT exceed one hundred and five percent (105%) of the CONTRACT PRICE.
|
3. |
DEFINITION OF BUILDER'S DEFAULT
|
- |
if the BUILDER, without reasonable excuse, intentionally delays in the commencement of steel cutting, keel laying and launching of the VESSEL in accordance with the latest milestone event notice informed to the BUYER for a period of sixty five (65) days or more and the BUILDER has not rectified the same within fourteen (14) days of being notified by the BUYER of such delay. However, in any case, the BUILDER reserves its full rights to change the milestone events in accordance with the BUILDER's production planning.
|
- |
if the BUILDER shall apply for or consent to the appointment of a receiver, trustee or liquidator, shall be adjudicated insolvent, shall apply to the courts for protection from its creditors, file a voluntary petition in bankruptcy or take advantage of any insolvency law, or any action shall be taken by the BUILDER having an effect similar to any of the foregoing or the equivalent thereof in any jurisdiction;
|
- |
the filing of a petition or the making of an order or the passing of an effective resolution for the winding-up of the BUILDER or the placing of the BUILDER under court protection or the appointment of a receiver of the undertaking or property of the BUILDER or the insolvency of or the cessation of the carrying on of business by the BUILDER or any analogous proceedings;
|
- |
the BUILDER, without prior written consent of the BUYER, removes the VESSEL from the SHIPYARD or assigns, sub-lets or subcontracts performance of the whole or part of its obligations except as provided for in this CONTRACT or usual shipbuilding practice of the BUILDER or as agreed by BUYER;
|
- |
the BUILDER sells or transfers title to the VESSEL to a third party or a ship owner except due to rescission of the CONTRACT by the BUYER's default; and/or
|
- |
if the Refund Guarantee ceases to be valid for whatever reason subject to the last paragraph of Article X 8. of this CONTRACT or the Refund Guarantor enters in to any insolvency or similar proceeding as defined herein.
|
4. |
EFFECT OF THE BUILDER'S DEFAULT
|
5. |
OTHER BUILDER'S DEFAULT
|
1. |
RESPONSIBILITY OF THE BUYER
|
(a) |
furnished the BUYER with the time schedule referred to above, two (2) months prior to installation of the BUYER'S SUPPLIES and
|
(b) |
given the BUYER written notice of any delay in delivery of the BUYER'S SUPPLIES and the necessary document or advice for such supplies as soon as the delay occurs which might give rise to a claim by the BUILDER under this Paragraph.
|
2. |
RESPONSIBILITY OF THE BUILDER
|
1. |
DECISION BY THE CLASSIFICATION SOCIETY
|
2. |
LAWS APPLICABLE
|
3. |
PROCEEDINGS OF ARBITRATION
|
4. |
EXPENSES
|
5. |
ENTRY IN COURT
|
6. |
ALTERATION OF DELIVERY DATE
|
1. |
TAXES
|
2. |
DUTIES
|
1. |
PATENTS, TRADEMARKS AND COPYRIGHTS
|
2. |
RIGHTS TO THE SPECIFICATIONS, PLANS AND ETC.
|
3. |
ACCESS TO INFORMATION
|
To the BUILDER
|
:
|
HYUNDAI MIPO DOCKYARD CO., LTD.
100, Bangeojinsunhwan-Doro, Dong-Gu, Ulsan 682-712, Korea
|
Attention:
|
Mr. G. H. Park/ Contract Management Dep't. I
Tel : +82 52 250 3071
Facsimile : +82 52 250 3060
E-mail :khpark
@hmd.co.kr
|
|
To the BUYER
|
:
|
C/O CENTRAL SHIPPING MONACO S.A.M.
Palais De la Scala, 1 Avenue Henry Durant, MC 98000, Monaco
|
Attention :
|
Mr. Andreas M. Louka, Legal Advisor
Tel : +30 210 8128 320
Facsimile : +30 210 6141 272
E-mail : legal@centralmare.com
|
|
Attention :
|
Chief Technical Officer
Tel : +30 210 8128 290
Facsimile : +30 210 6141 276
E-mail : tech@centralmare.com
|
1. |
EXTENT OF INSURANCE COVERAGE
|
2. |
APPLICATION OF THE RECOVERED AMOUNT
|
(a) |
Partial Loss :
|
(b) |
Total Loss :
|
3. |
TERMINATION OF BUILDER'S OBLIGATION TO INSURE
|
1. |
REPRESENTATIONS OF THE PARTIES
|
(a) |
It will comply with the laws of any jurisdiction applicable to such party as it relates to this CONTRACT, including but not limited to any applicable anti-corruption and anti-bribery laws., also including, without limitation, the United States Foreign Corrupt Practices Act ("US FCPA"), the UK Bribery Act 2010 ("UK Bribery Act") and the anti-bribery or anti-corruption laws of Korea as such laws may be amended from time to time;
|
(b) |
In connection with this CONTRACT, it has not and will not make any payments or gifts or provide other advantages, or any offers or promises of payments or gifts or other advantages of any kind, directly or indirectly, to:
|
(i) |
any person or entity with the intention of obtaining or retaining a business advantage for itself or the other party to this CONTRACT;
|
(ii) |
any official or member of any government or any agency or instrumentality thereof; any official or member of any public international organisation or any agency or instrumentality thereof; any or official of a political party or any candidate for political office (herein 'public official'); or any person while knowing or reasonably suspecting that all or a portion of such money or thing of value will be offered, given or promised, directly or indirectly, to any public official, in violation of the UK Bribery Act, the US FCPA or the laws of Korea.
|
(c) |
In connection with this CONTRACT, it has not and will not request, agree to accept or accept from any person or entity any payments or gifts or other advantages, or any offers or promises of payments or gifts or other advantages of any kind, directly or indirectly, as a reward or inducement to perform its obligations under this CONTRACT in any way improperly.
|
(d) |
undertakes that it shall apply standards of business conduct which are consistent with the BUILDER's Business Partner Code of Conduct, found at http://ethics.hhi.co.kr/html_eng/2_moral/sub_02.htm, a hard copy of which is available on request.
|
2. |
INDEMNIFICATION
|
For and on behalf of
|
For and on behalf of
|
|||
THE BUYER
|
THE BUILDER
|
|||
/s/ Evangelos J. Pistiolis
|
/s/ Eui-Sung Yoon
|
|||
Name:
|
Evangelos J. Pistiolis
|
Name:
|
Eui-Sung Yoon
|
|
Title:
|
Attorney-in-Fact
|
Title:
|
Attorney-in-Fact
|
WITNESS
|
WITNESS
|
|||
/s/ Andreas Louka
|
/s/ W.J. Kim
|
|||
Name:
|
Andreas Louka
|
Name:
|
Woo Jin Kim
|
|
Title:
|
Attorney-in-Fact
|
Title:
|
Sales Officer
|
1. |
In consideration of the Buyer entering into the Contract with the Builder, we hereby issue our irrevocable letter of guarantee number
[]
(hereinafter referred to as the "
Guarantee
") (in favor of
[Name of the Buyer]
(herein referred to as the "
Buyer
" or
"you"
) for the account of
[Name of the Builder]
(herein referred to as the "
Builder
") as follows in connection with the shipbuilding contract dated
[]
(herein referred to as the "
Contract
"),made by and between the Buyer and the Builder for the construction and sale of
[]
having Builder's Hull No.
[]
(hereinafter referred to as the "
Vessel
").
|
2. |
If in connection with the terms of the Contract, the Buyer shall become entitled to a refund of one or more of the advance payments made to the Builder prior to the delivery of the Vessel, we hereby irrevocably guarantee the repayment of the same to the Buyer after the Buyer's written demand together with interest thereon at the Agreed Interest Rate from the date following the date of receipt by the Builder to the date of remittance by telegraphic transfer of such refund.
|
3. |
This Guarantee is an undertaking to make the above payments against a written demand conforming with the requirements of this Guarantee and is independent from the Contract. Our obligation to make payment under this Guarantee will not be discharged by amendments to the Contract, disputes under the Contract or any invalidity of the Contract.
|
4. |
The amount of this Guarantee will be automatically increased upon the Builder's receipt of the respective further installments: each time by the amount of installment of:
|
(a) |
[]
U.S. Dollars (US$
[]
);
|
(b) |
[]
U.S. Dollars (US$
[]
);
|
(c) |
[]
U.S. Dollars (US$
[]
);
|
(d) |
[]
U.S. Dollars (US$
[]
);
|
(e) |
[]
U.S. Dollars (US$
[]
);
|
(f) |
[]
U.S. Dollars (US$
[]
);
|
(g) |
[]
U.S. Dollars (US$
[]
); and
|
(h) |
[]
U.S. Dollars (US$
[]
).respectively plus interest thereon as provided in the Contract, but in any eventuality the amount of this Guarantee shall not exceed the total sum of
[]
U.S. Dollars (US$
[]
) plus interest thereon at the Agreed Interest Rate from the date following the date of Builder's receipt of each installment to the date of remittance by telegraphic transfer of the refund.
|
5. |
In case any refund is made to you by the Builder or by us under this Guarantee, our liability hereunder shall be automatically reduced to reflect the remaining amount due (plus interest).
|
6. |
For the purposes of this Guarantee,
"Agreed Interest Rate"
means four percent (4%) per annum provided that in the event of cancellation of the Contract. as a result of delays due to Force Majeure (as defined in the Contract) or other causes beyond the control of the Builder or in the case of total loss of the Vessel, the interest rate shall be reduced to three per cent (3%) per annum as provided in Article X of the Contract.
|
7. |
This Guarantee is payable against our simple receipt of a signed statement from you certifying that Buyer's demand for refund has been made in conformity with the Contract and the Builder has failed to make the refund within 30 days after your demand to the Builder. Any notice, claim or demand to be given or made by you under this Guarantee may be served on us either by post or by tested telex or by authorized SWIFT or equivalent as follows:
|
8. |
Refund shall be made to you by telegraphic transfer (net of bank charges) in United States Dollars within 30 days from the receipt of your demand. All payments under this Guarantee shall be made without deduction or withholding for or on account of any taxes, duties or charges whatsoever unless we are compelled by law to deduct or withhold the same, in which case we shall make the minimum deduction or withholding permitted by law and will pay such additional amounts as may be necessary in order that the amount received by you after such deductions or withholdings shall be equal to the amount which would have
|
9. |
This Guarantee shall expire and become null and void upon the earliest of:
|
(a) |
receipt by the Buyer of the sum guaranteed hereby;
|
(b) |
acceptance by the Buyer of the delivery of the Vessel; or
|
(c) |
rescission or termination of the Contract due to the Buyer's default in accordance with the Contract provided that such default has been admitted in writing by the Buyer or has been established by a final and unappealable Award by a London arbitration tribunal duly appointed under the Contract, or a Judgment of the Hgh Court of Justice in London.
|
10. |
Notwithstanding any provision herein, in the event that within 30 days from the date of your demand to the Builder referred to above, we receive notification from you or the Builder accompanied by written confirmation by an arbitrator to the effect that your claim to cancel the Contract or your claim for refund thereunder has been disputed and referred to arbitration in accordance with the Contract, we shall under this Guarantee refund to you the sum (not exceeding
[]
U.S. Dollars (US$
[]
) plus interest by the same manner hereinabove) due to you from the Builder pursuant to the award made under such arbitration (or any judgment on appeal therefrom) immediately upon receipt from you of the demand for payment of the sum and a copy of the award (or any judgment on appeal therefrom).
|
11. |
This Guarantee may be assigned or transferred by the BUYER with prior written notice to us. A person who is not a party to this Guarantee has no rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Guarantee.
|
12. |
This Guarantee shall be governed by and construed in accordance with the laws of England and any dispute arising under or in connection with this guarantee shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory modification thereof as currently in force before three arbitrators, with one to be appointed by each party and the third to be appointed by the two party appointed arbitrators..
|
13. |
We hereby warrant that we are permitted by any relevant law to which we are subject (including, where relevant, the laws of the place or places of each of our incorporation, establishment, regulation, registration and residence) to (i) issue a guarantee in this form, (ii) make payment under this guarantee in United States Dollars and (iii) designate the laws of England and arbitration in London as the applicable law, the forum and the place of jurisdiction, to which we irrevocably submit. We hereby warrant that this guarantee has been, or will be, duly registered with the relevant State authority in any legal jurisdiction in which such registration is required for any reason. We hereby warrant that we have obtained all necessary approvals and authorisations to issue this guarantee.
|
Hyundai Mipo Dockyard Co., Ltd.
100, Bangeojinsunhwan-Doro, Dong-Gu,
|
|
Ulsan 44113
|
Date : , 2017
|
Korea
|
Very truly yours,
For and on behalf of
By
Name : Title : |
PREAMBLE
|
3
|
|||
ARTICLE
|
I
|
: DESCRIPTION AND CLASS
|
4
|
|
II
|
: CONTRACT PRICE
|
7
|
||
III
|
: ADJUSTMENT OF THE CONTRACT PRICE
|
8
|
||
IV
|
: INSPECTION AND APPROVAL
|
12
|
||
V
|
: MODIFICATIONS, CHANGES AND EXTRAS
|
18
|
||
VI
|
: TRIALS AND COMPLETION
|
21
|
||
VII
|
: DELIVERY
|
25
|
||
VIII
|
: DELAYS AND EXTENSIONS OF TIME (FORCE MAJEURE)
|
29
|
||
IX
|
: WARRANTY OF QUALITY
|
32
|
||
X
|
: PAYMENT AND RESCISSION BY THE BUYER
|
36
|
||
XI
|
: BUYER'S AND BUILDER'S DEFAULT
|
43
|
||
XII
|
: BUYERS SUPPLIES
|
47
|
||
XIII
|
: ARBITRATION
|
49
|
||
XIV
|
: SUCCESSORS AND ASSIGNS
|
51
|
||
XV
|
: TAXES AND DUTIES
|
52
|
||
XVI
|
: PATENTS, TRADEMARKS AND COPYRIGHTS
|
53
|
||
XVII
|
: INTERPRETATION AND GOVERNING LAW
|
55
|
||
XVIII
|
: NOTICE
|
56
|
||
XIX
|
: EFFECTIVENESS OF THIS CONTRACT
|
57
|
||
XX
|
: EXCLUSIVENESS
|
58
|
||
XXI
|
: INSURANCE
|
59
|
||
XXII
|
: COMPLIANCE AND ANTI-BRIBERY
|
61
|
||
EXHIBIT "A" LETTER OF GUARANTEE
|
64
|
|||
EXHIBIT "B" PERFORMANCE GUARANTEE
|
68
|
1. |
DESCRIPTION
|
2. |
BASIC DIMENSIONS AND PRINCIPAL PARTICULARS OF THE VESSEL
|
(a) |
The basic dimensions and principal particulars of the VESSEL shall be :
|
Length, overall
|
abt. 183m
|
||
Length, between perpendiculars
|
175.15m
|
||
Breadth, moulded
|
32.2m
|
||
Depth, moulded
|
19.1m
|
||
Design draught, moulded
|
11.0m
|
||
Scantling draught, moulded
|
13.3m
|
Main Engine
|
: HYUNDAI — B&W 6G5OME-C9.5 (Tier II)
Nominal Rating: 10,320 kW x 100.0 RPM
Engine Optimization : Part Load tuning by Exhaust Gas Bypass (EGB)
MCR: 7,180 kW x 86.9 RPM
NCR: 5,500 kW x 79.5 RPM |
|
Deadweight, guaranteed
|
: about 49,967 metric tons at the Scantling draught of13.3 meters on even keel in sea water of specific gravity of 1.025.
|
Speed, guaranteed
|
: 14.4 knots at the design draught of 11.0 meters at the condition of clean bottom and in calm and deep sea with main engine output of 5,500 kW with 15% sea margin.
|
|
Fuel Consumption, guaranteed
|
: 163.5 grams/kW-hour using marine diesel oil having lower calorific value of 10,200kcal/kg at MCR measured at the shop trial with I.S.O reference conditions.
|
(b) |
The dimensions may be slightly modified by the BUILDER, who also reserves the right to make changes to the SPECIFICATIONS and the PLAN if found necessary to suit the local conditions and facilities of the SHIPYARD, the availability of materials and equipment, the introduction of improved production methods or otherwise, subject to the approval of the BUYER which the BUYER shall not withhold unreasonably, and the approval of the CLASSIFICATION SOCIETY.
|
3. |
CLASSIFICATION, RULES AND REGULATIONS
|
(a) |
The VESSEL, including its machinery, equipment and outfitting shall be constructed in accordance with the BUILDER's quality standard and shipbuilding practices.
|
(b) |
The BUILDER shall arrange with the CLASSIFICATION SOCIETY for the assignment by the CLASSIFICATION SOCIETY of representative(s) to the VESSEL during construction. All fees and charges incidental to classification of the VESSEL in compliance with the above specified rules, regulations and requirements of this CONTRACT shall be for the account of the BUILDER.
|
(c) |
The decision of the CLASSIFICATION SOCIETY as to whether the VESSEL complies with the regulations of the CLASSIFICATION SOCIETY shall be final and binding upon the BUILDER and the BUYER. For the avoidance of doubt such decision shall only be final and binding in so far as compliance with the regulations of the CLASSIFICATION SOCIETY and shall have no wider application, including as to whether the VESSEL has been designed, constructed, equipped and completed in accordance with all terms of this CONTRACT.
|
(d) |
The facilities, labour and materials necessary for the safe and convenient conduct of any inspection by the CLASSIFICATION SOCIETY shall be furnished by the BUILDER. All major plans shall be subject to approval, inspection and test by the CLASSIFICATION SOCIETY in accordance with the rules and regulations of the CLASSIFICATION SOCIETY.
|
4. |
SUBCONTRACTING
|
5. |
NATIONALITY OF THE VESSEL
|
1. |
DELAYED DELIVERY
|
(a) |
No adjustment shall be made and the CONTRACT PRICE shall remain unchanged for the first thirty (30) days of the delay in delivery of the VESSEL [ending as of 12 o'clock midnight Korean Standard Time on the thirtieth (30th) day of delay] beyond the Delivery Date calculated as provided in Article VIII hereof
|
(b) |
If delivery of the VESSEL is delayed more than thirty (30) days beyond the date upon which the delivery is due from the BUILDER under the terms of this CONTRACT, then, beginning at midnight of the thirtieth (30th) day after such due date, the CONTRACT PRICE of the VESSEL shall be reduced by U.S. Dollars Seven Thousand Two Hundred (US$7,200) for each full day of delay shall not exceed the amount due to cover the delay of one hundred and sixty five (165) days after thirty (30) days of the delay in delivery of the VESSEL at the rate of deduction as specified hereinabove.
|
(c) |
But, if the delay in delivery of the VESSEL continues for a period of more than one hundred and ninety five days (195) days beyond the date upon which the delivery is due from the BUILDER under the terms of this CONTRACT then, in such event, and after such period has expired, the BUYER may, at its option, cancel this CONTRACT by serving upon the BUILDER a notice of cancellation in writing or by e-mail or facsimile directed to the BUILDER at the address given in this CONTRACT, and the provisions of Article X.5 shall apply. Such cancellation shall be effective as of the date the notice thereof is received by the BUILDER. If the BUYER has not served the notice of cancellation after the aforementioned one hundred and ninety five days (195) days delay in delivery, the BUILDER may demand the BUYER to make an election in accordance with Article VIII.3. hereof.
|
(d) |
For the purpose of this Article, the delivery of the VESSEL shall be deemed to be delayed when and if the VESSEL, after taking into full account extension of the Delivery Date or permissible delays as provided in Article V, VI, VIII, XI or elsewhere in this CONTRACT, is delivered beyond or before the date upon which delivery would then be due under the terms of this CONTRACT.
|
2. |
INSUFFICIENT SPEED
|
(a) |
The CONTRACT PRICE of the VESSEL shall not be affected or changed, if the actual speed, as determined by trial runs more fully described in Article VI hereof, is less than the guaranteed speed as defined in Article I paragraph 2 hereof, provided such deficiency in actual speed is not more than three-tenths (3/10) of a knot below the guaranteed speed.
|
(b) |
However, as for the deficiency of more than three-tenths (3/10) of a knot in actual speed below the guaranteed speed, the CONTRACT PRICE shall be reduced by U.S. Dollars Eighteen Thousand (US$18,000) for each full one-tenth (1/10) of a knot in excess of the said three-tenths (3/10) of a knot of deficiency in speed [fractions of less than one-tenth (1/10) of a knot shall be regarded as a full one-tenth (1/10) of a knot]. However, unless the parties agree otherwise, the total amount of reduction from the CONTRACT PRICE shall not exceed the amount due to cover the deficiency of eight-tenths(8/10) full knot below the guaranteed speed at the rate of reduction as specified above.
|
(c) |
If the deficiency in actual speed of the VESSEL is more than eight-tenths (8/10) of a full knot below the guaranteed speed, then the BUYER, at its option, may, subject to the BUILDER's right to effect alterations or corrections as provided in Article VI.5. hereof, cancel this CONTRACT by the BUYER sending a notice of cancellation to the BUILDER in writing or by email or facsimile, and the provisions of Article X.5 shall apply, or may accept the VESSEL at a reduction in the CONTRACT PRICE as above provided for eight-tenths (8/10) full knot of deficiency only.
|
3. |
EXCESSIVE FUEL CONSUMPTION
|
(a) |
The CONTRACT PRICE of the VESSEL shall not be affected or changed by reason of the fuel consumption of the VESSEL's main engine, as determined by the engine manufacturer's shop trial as per the SPECIFICATIONS being more than the guaranteed fuel consumption of the VESSEL's main engine as defined in Article I paragraph 2 hereof, if such excess is not more than five per cent (5%) over the guaranteed fuel consumption.
|
(b) |
However, as for the excess of more than five percent (5%) in the actual fuel consumption over the guaranteed fuel consumption of the VESSEL's main engine, the CONTRACT PRICE shall be reduced by U.S. Dollars Fifteen Thousand Three Hundred (US$15,300) for each full one per cent (1%) increase in fuel consumption in excess of the said five per cent (5%) increase in fuel consumption [fraction of less than one per cent (1%) shall be regarded as a full one percent (1%)]. However, unless the parties agree otherwise, the total
|
(c) |
If such actual fuel consumption exceeds the guaranteed fuel consumption of the VESSEL's main engine by more than eight percent (8%), the BUYER, at its option, may, subject to the BUILDER's right to effect alterations or corrections as specified in Article VI. 5. hereof, reject the main engine or require rectification thereof to the BUYER's complete satisfaction. If the BUILDER is unable to comply with the BUYER's request as aforesaid or if the BUYER elects to reject the main engine then the BUYER may cancel this CONTRACT by the BUYER sending a notice of cancellation to the BUILDER in writing or by email or facsimile, and the provisions of Article X.5 shall apply, or may accept the VESSEL at a reduction in the CONTRACT PRICE as above provided for the eight percent (8%) increase only.
|
4. |
DEADWEIGHT BELOW CONTRACT REQUIREMENTS
|
(a) |
The CONTRACT PRICE of the VESSEL shall not be affected or changed, if the actual deadweight determined as provided in this CONTRACT and the SPECIFICATIONS, is below the guaranteed deadweight as defined in Article I paragraph 2 hereof by one point five per cent (1.5%) of the guaranteed deadweight or less.
|
(b) |
However, should the deficiency in the actual deadweight of the VESSEL be more than one point five per cent (1.5%) of the guaranteed deadweight (disregarding fractions of less than one (1) metric ton), the CONTRACT PRICE shall be reduced by the sum of U.S. Dollars Two Hundred Seventy (US$270) for each one (1) metric ton deficiency (disregarding fractions of less than one (1) metric ton) in excess of the said one point five per cent (1.5%) of deficiency.
|
(c) |
In the event of such deficiency in the deadweight of the VESSEL being more than four per cent (4%) of the guaranteed deadweight, the BUYER, at its option, may, subject to the BUILDER's right to effect alterations or corrections as specified in Article VI. 5. hereof, cancel this CONTRACT by the BUYER sending a notice of cancellation to the BUILDER in writing or by email or facsimile, and the provisions of Article X.5 shall apply, or accept the VESSEL at a reduction in the CONTRACT PRICE as above provided for four per cent (4%) of deficiency only.
|
5. |
EFFECT OF CANCELLATION
|
6. |
CUMULATIVE EFFECT OF LIQUIDATED DAMAGES
|
1. |
APPOINTMENT OF BUYER'S REPRESENTATIVE
|
2. |
AUTHORITY OF THE BUYER'S REPRESENTATIVE
|
3. |
APPROVAL OF DRAWINGS
|
(a) |
The BUILDER shall submit to the BUYER three (3) copies of each of the plans and drawings to be submitted to the BUYER for its approval at its address as set forth in Article XVIII hereof. The BUYER shall, within fourteen (14) days including mailing time after receipt thereof, return to the BUILDER one (1) copy of such plans and drawings with
|
(b) |
When and if the BUYER'S REPRESENTATIVE shall have been sent by the BUYER to the SHIPYARD in accordance with Paragraph 1 of this Article, the BUILDER may submit the remainder, if any, of the plans and drawings in the agreed list, to the BUYER'S REPRESENTATIVE for his approval, unless otherwise agreed upon between the parties hereto.
|
(c) |
In the event that the BUYER or the BUYER'S REPRESENTATIVE shall fail to return the plans and drawings to the BUILDER within the time limit as hereinabove provided, such plans and drawings shall be deemed to have been automatically approved without any comment. In the event the plans and drawings submitted by the BUILDER to the BUYER or the BUYER'S REPRESENTATIVE in accordance with this Article do not meet with the BUYER's or the BUYER'S REPRESENTATIVE's approval and the parties cannot reach agreement between them, the matter may be submitted by either party hereto for determination pursuant to Article XIII hereof. If the BUYER's comments on the plans and drawings that are returned to the BUILDER by the BUYER within the said time limit are not clearly specified or detailed, the BUILDER shall seek clarification from the BUYER prior to implementing them which clarification must be provided in writing by the BUYER within seven (7) days of such request from the BUILDER. If the BUYER shall fail to provide the BUILDER with such clarification within the said time limit, then the BUILDER shall be entitled to place its own interpretation on such comments in implementing them.
|
(d) |
Notwithstanding the provision here above, the approved plans and drawings of the FIRM VESSEL shall be deemed to have been approved by the BUYER and the CLASSIFICATION SOCIETY for the VESSEL. The selected maker for the FIRM VESSEL shall be deemed to have been selected by the BUYER without other selection procedure.
|
4. |
SALARIES AND EXPENSES
|
5. |
RESPONSIBILITY OF THE BUILDER
|
(a) |
The BUILDER shall provide the BUYER'S REPRESENTATIVE and his assistants free of charge with suitably furnished office space at, or in the immediate vicinity of, the SHIPYARD together with telephone, broadband internet access, e-mail, facsimile, air conditioning, lavatory facilities and such other reasonable facilities as may be necessary to enable the BUYER'S REPRESENTATIVE and his assistants to carry out their work under this CONTRACT. However, the BUYER shall pay for the communication charges of the telephone, broadband internet, e-mail or facsimile facilities used by the BUYER'S REPRESENTATIVE or his assistants.
|
(b) |
The BUYER'S REPRESENTATIVE and his assistants shall at all times remain the employees of the BUYER. The BUILDER shall not be liable to the BUYER or the BUYER'S REPRESENTATIVE or to his assistants or to the BUYER'S employees or agents for personal injuries, including death, during the time they, or any of them, are on the VESSEL, or within the premises of either the BUILDER or its sub-contractors, or are otherwise engaged in and about the construction of the VESSEL, unless, however, such personal injuries, including death, are caused by the negligence of the BUILDER, its sub-contractors, or its or their employees or agents. The BUILDER shall not be liable to the BUYER for damages to, or destruction of property of the BUYER or of the BUYER'S REPRESENTATIVE or his assistants or the BUYER's employees or agents, unless such damages, loss or destruction is caused by the negligence of the BUILDER, its sub-contractors, or its or their employees or agents.
|
6. |
RESPONSIBILITY OF THE BUYER
|
1. |
HOW EFFECTED
|
2. |
SUBSTITUTION OF MATERIAL
|
3. |
CHANGES IN RULES AND REGULATIONS
|
(a) |
any increase or decrease in the CONTRACT PRICE of the VESSEL that is occasioned by such compliance;
|
(b) |
any extension or advancement in the Delivery Date of the VESSEL that is occasioned by such compliance;
|
(c) |
any increase or decrease in the deadweight and/or cubic capacity of the VESSEL, if such compliance results in any increase or reduction in the deadweight and/or cubic capacity ;
|
(d) |
adjustment of the speed requirements if such compliance results in any increase or reduction in the speed ; and
|
(e) |
any other alterations in the terms of this CONTRACT or of the SPECIFICATIONS or the PLAN or both, if such compliance makes such alterations of the terms necessary.
|
1. |
NOTICE
|
2. |
WEATHER CONDITION
|
3. |
HOW CONDUCTED
|
4. |
CONSUMABLE STORES
|
5. |
ACCEPTANCE OR REJECTION
|
(a) |
The BUILDER shall as soon as possible following the completion of the trials of the VESSEL deliver to the BUYER a detailed report setting out the results of the trials and an analysis of such results and confirmation that the BUILDER considers that the results of the trial run indicate that the VESSEL is in all respects in conformity with this CONTRACT and the SPECIFICATIONS and the PLAN. The BUYER shall within seven (7) days after receipt of such report, notify the BUILDER in writing of its acceptance of the VESSEL, or of its rejection of the VESSEL, or of the details in respect of which the VESSEL does not conform to the SPECIFICATIONS and the PLAN or this CONTRACT.
|
(b) |
If, during any sea trial, any breakdown occurs entailing interruption or irregular performance which can be repaired on board, the trial shall be continued after such repairs and be valid in all respects, provided the BUYER and the CLASSIFICATION SOCIETY agrees on the extent of such repairs being carried out.
|
(c) |
However, if, during or after the trial run, it becomes apparent that the VESSEL or any part of her machinery or equipment does not conform to the requirements of the CONTRACT, the PLAN and/or the SPECIFICATIONS, the BUILDER shall correct such non-conformity and perform such tests and/or trials as are necessary to confirm conformity to the CONTRACT, the PLAN and/or the SPECIFICATIONS.
|
(d) |
Save as above provided, The BUYER shall, within three (3) days after completion of the trial run and the receipt of all records of tests and trials carried out on that trial run, notify the BUILDER in writing or by e-mail or facsimile confirmed in writing of its acceptance of the VESSEL or of the details in respect of which the VESSEL does not conform to the SPECIFICATIONS or this CONTRACT or of the details in respect of which the VESSEL does not conform to the SPECIFICATIONS or this CONTRACT.
|
(e) |
However, the BUYER shall not be entitled to reject the VESSEL by reason of any minor or insubstantial items judged from the point of view of standard shipbuilding and shipping practice as not being in conformity with the SPECIFICATIONS, but, in that case, the BUILDER shall not be released from the obligation to correct and/or remedy such minor or insubstantial items as soon as practicable after the delivery of the VESSEL.
|
(f) |
If inconvenient for the VESSEL to have any non-conformities with the CONTRACT, the PLAN and/or the SPECIFICATIONS corrected and/or remedied at the SHIPYARD, the BUILDER may, at the BUYER's option, arrange to have the corrections or remedies carried out elsewhere, and may, if practicable and at the BUYER's option, do such work while the VESSEL is sailing. The BUYER may in its absolute discretion, if proposed by the BUILDER, decide to accept a payment from the BUILDER in lieu of such items being corrected and/or remedied, which payment in lieu shall first be agreed between the BUILDER and the BUYER.
|
6. |
EFFECT OF ACCEPTANCE
|
1. |
TIME AND PLACE
|
2. |
WHEN AND HOW EFFECTED
|
3. |
DOCUMENTS TO BE DELIVERED TO THE BUYER
|
(a) |
PROTOCOL OF TRIALS of the VESSEL made pursuant to this CONTRACT and the SPECIFICATIONS,
|
(b) |
PROTOCOL OF INVENTORY of the equipment of the VESSEL, including spare parts, all as specified in the SPECIFICATIONS,
|
(c) |
PROTOCOL OF CONSUMABLE NATURE, such as all fuel oil and fresh water remaining in tanks if its cost is charged to the BUYER under Article VI. 4. hereof,
|
(d) |
DRAWING AND PLANS pertaining to the VESSEL as stipulated in the SPECIFICATIONS, which shall be furnished to the BUYER at no additional cost,
|
(e) |
ALL CERTIFICATES required to be furnished upon delivery of the VESSEL pursuant to this CONTRACT, the SPECIFICATIONS and the customary shipbuilding practice, including
|
(i) |
Classification Certificate
|
(ii) |
Safety Construction Certificate
|
(iii) |
Safety Equipment Certificate
|
(iv) |
Safety Radiotelegraphy Certificate
|
(v) |
International Loadline Certificate
|
(vi) |
International Tonnage Certificate
|
(vii) |
BUILDER's Certificate
|
(viii) |
Ship Sanitation Control Exemption Certificate
|
(f) |
DECLARATION OF WARRANTY of the BUILDER that the VESSEL is delivered to the BUYER free and clear of any liens, claims, charges, mortgages, or other encumbrances upon the BUYER's title thereto, and in particular, that the VESSEL is absolutely free of all burdens in the nature of imposts, taxes, or charges imposed by the prefecture or country of the port of delivery, as well as of all liabilities of the
BUTT
DER to its sub-contractors and employees and of all liabilities arising from the operation of the VESSEL in trial runs, or otherwise, prior to delivery except as otherwise provided under this CONTRACT.
|
(g) |
BUILDER'S CERTIFICATE
|
(h) |
CERTIFICATE OF NON-REGISTRATION
|
(i) |
COMMERCIAL INVOICES covering the last instalment and modifications.
|
(j) |
BILL OF SALE or other document that certifies that the title of the VESSEL passes to the BUYER.
|
(k) |
Such other documents as the BUYER may reasonably require in connection with the registration of the VESSEL, which shall be agreed at least twenty eight (28) days prior to the DELIVERY DATE.
|
4. |
TENDER OF THE VESSEL
|
5. |
TITLE AND RISK
|
6. |
REMOVAL OF THE VESSEL
|
1. |
CAUSES OF DELAY
|
2. |
NOTICE OF DELAYS
|
3. |
RIGHT TO CANCEL FOR EXCESSIVE DELAY
|
(a) |
Such future date shall become the contractual delivery date for the purposes of this CONTRACT but this new date shall not be subject to any further extension by reason of permissible delays as herein provided, and
|
(b) |
If the VESSEL is not delivered by such revised contractual delivery date, the BUYER shall have the same right to liquidated damages and rights of cancellation upon the same terms as provided in this CONTRACT.
|
4. |
DEFINITION OF PERMISSIBLE DELAYS
|
1. |
GUARANTEE
|
2. |
NOTICE OF DEFECTS
|
3. |
REMEDY OF DEFECTS
|
(a) |
The HGS on behalf of BUILDER shall remedy, at its expense, any DEFECT against which the VESSEL is guaranteed under this Article, by making all necessary repairs or replacements at the SHIPYARD or elsewhere as provided for in (b) hereinbelow.
|
(b) |
However, if it is impractical to bring the VESSEL to the SHIPYARD, the BUYER may cause the necessary repairs or replacements to be made elsewhere which is deemed suitable for the purpose, provided that, in such event, the BUILDER and the HGS may forward or supply replacement parts or materials to the VESSEL, unless forwarding or supplying thereof to the VESSEL would impair or delay the operation or working schedule of the VESSEL. In the event that the BUILDER and the HGS proposes to cause the necessary repairs or replacements to be made to the VESSEL at any other shipyard or works than the SHIPYARD, the BUYER shall first, but in all events as soon as possible, give the BUILDER and the HGS notice in writing or by e-mail or facsimile of the time and place such repairs will be made, and if the VESSEL is not thereby delayed, or her operation or working schedule is not thereby impaired, the BUILDER and the HGS shall have the right to verify by its own representative(s) the nature and extent of the DEFECTS complained of. The BUILDER and the HGS shall in such case, promptly advise the BUYER in writing or by e-mail or facsimile, after such examination has been completed, of its acceptance or rejection of the DEFECTS as ones that are covered by the guarantee herein provided. Upon the BUILDER and the HGS's acceptance of the DEFECTS as justifying remedy under this Article, or upon the award of the arbitration tribunal so determining, the HGS on behalf of Builder shall pay to the BUYER for such repairs or replacements a sum equal to the actual direct cost of the repairs or replacements, as evidenced by the final invoices of the relevant shipyard/repairer or supplier., however, the amount of the HGS's payment to the BUYER for such repairs or replacements shall not exceed the average cost quoted by one reputable repair yard in Singapore and one reputable repair yard in China
|
(c) |
In any case, the VESSEL shall be taken at the BUYER's costs and responsibility to the place elected, ready in all respects for such repairs or replacements and in any event, the BUILDER and the HGS shall not be responsible for towage, dockage, wharfage, port charges or any other cost or expenses whatsoever incurred by the BUYER in getting and keeping the VESSEL ready for such repairs or replacements.
|
(d) |
In the event that it is necessary for the BUILDER and the HGS to forward a replacement for a defective part under this guarantee, replacement parts shall be shipped to the BUYER under the terms of F.O.B. port of the country where they are to be purchased.
|
(e) |
The BUILDER and the HGS reserve the option to retrieve, at the BUILDER and the HGS's cost, any of the replaced equipment/parts in case DEFECTS are remedied in accordance with the provisions in this Article.
|
(f) |
Any dispute under this article shall be referred to arbitration in accordance with the provisions of Article XIII hereof.
|
4. |
EXTENT OF BUILDER'S RESPONSIBILITY
|
(a) |
After delivery of the VESSEL the BUILDER and the HGS shall have no responsibility for any other DEFECTS whatsoever in the VESSEL than the DEFECTS specified in paragraph 1 of this Article, unless such defect was caused or occasioned by the negligence of the BUILDER and the FIGS, its subcontractors or their respective employees within the Guarantee Period. The BUILDER and the HGS shall have no liability whatsoever in any circumstances whatsoever to the BUYER or to any third party for anything except the cost of repairing the DEFECT itself. The BUILDER and the FIGS shall not in any circumstances be responsible or liable for any consequential or special losses, damages or expenses including, but not limited to, loss of time, loss of profit or earning or demurrage directly or indirectly occasioned to the BUYER or any third party by reason of the DEFECTS specified in paragraph 1 of this Article or due to repairs or other works done to the VESSEL to remedy such DEFECTS. After delivery, the BUYER shall hold the BUILDER and the FIGS harmless and indemnify the BUILDER and the FIGS against any claim from the BUYER or any third party whatsoever in respect of any such matters and in respect of any other claims relating to the VESSEL for which the BUILDER and the HGS do not expressly give a warranty to the BUYER under this Article.
|
(b) |
The BUILDER and the HGS shall not be responsible for any DEFECTS in any part of the VESSEL which may subsequent to delivery of the VESSEL have been replaced or in any way repaired by any other contractor, or for any DEFECTS which have been caused or aggravated by omission or improper use and maintenance of the VESSEL on the part of the BUYER, its servants or agents or by ordinary wear and tear or by any other circumstances beyond the control of the BUILDER and the HGS.
|
(c) |
The guarantee contained as hereinabove in this Article replaces and excludes any other liability, guarantee, warranty and/or condition whether expressly set out in this CONTRACT or imposed or implied by the law, customary, statutory or otherwise, by reason of the construction and sale of the VESSEL by the BUILDER and the HGS for and to the BUYER.
|
5. |
ASSIGNMENT OF SUPPLIER'S GUARANTEES
|
1. |
CURRENCY
|
2. |
TERMS OF PAYMENT
|
(a) |
First Instalment
|
(b) |
Second Instalment
|
(c) |
Third Instalment
|
(d) |
Fourth Instalment
|
(e) |
Fifth Instalment
|
(f) |
Sixth Instalment
|
(g) |
Seventh Instalment
|
(h) |
Eighth Instalment
|
(i) |
Ninth Instalment
|
3. |
DEMAND FOR PAYMENT
|
4. |
METHOD OF PAYMENT
|
(a) |
All the pre-delivery payments and the payment due on delivery in settlement of the CONTRACT PRICE as provided for in Paragraph 2 of this Article shall be made in U.S. Dollars on or before the DUE DATE thereof by telegraphic transfer as follows;
|
(i) |
The payment of the first, second, third, fourth, fifth, sixth, seventh and eighth instalments shall be made to the account no.: 117-JCD-1016942 of the KEB Hana Bank (hereinafter called the "KEB HANA") in favour of the BUILDER or any other bank in favor of the BUILDER, as designated and notified by the BUILDER to the BUYER at least three (3) business days prior to the DUE DATE.
|
(ii) |
The ninth instalment as provided for in Paragraph 2.(h) of this Article shall be deposited at the account of the KEB HANA, Account No. 117-JCD-1016942, or any other bank in favor or the BUILDER, as designated and notified by the BUILDER, in an account in the name of the BUYER by telegraphic transfer remittance at least three (3) business days prior to the scheduled delivery date of the VESSEL as reasonably calculated and notified by the BUILDER, with instructions valid for fifteen (15) banking days that the said instalment is unconditionally payable to the BUILDER against presentation by the BUILDER to the KEB HANA, Seoul, Korea or such other bank where the said amount is deposited of a duplicate original copy of the PROTOCOL OF DELIVERY AND ACCEPTANCE of the VESSEL signed by the BUILDER and the BUYER.
|
(b) |
Simultaneously with each of such payments, the BUYER shall advise the BUILDER of the details of the payments by e-mail or facsimile and at the same time, the BUYER shall cause the BUYER's remitting Bank to advise the KEB HANA, or any other bank, Seoul, Korea as the case may be, of the details of such payments by authenticated bank cable or telex.
|
5. |
REFUND BY THE BUILDER
|
6. |
TOTAL LOSS
|
(a) |
to build another vessel in place of the VESSEL so lost and deliver it under this CONTRACT to the BUYER, provided that the parties hereto shall have agreed in writing to a reasonable cost and time for the construction of such vessel in place of the lost VESSEL, and in which case, any amounts recovered under the insurance referred to in Article XXI will be applied to the construction of the VESSEL; or
|
(b) |
to refund to the BUYER the full amount of the total sums paid by the BUYER to the BUILDER under the provisions of Paragraph 2 of this Article together with interest thereon at the rate of Three per cent (3%) per annum from the date following the date of receipt by the BUILDER of such pre-delivery instalment(s) to the date of payment by the BUILDER to the BUYER of the refund, and to pay to the BUYER the invoiced cost to the BUYER of all BUYER's Supplies which were incorporated into the VESSEL, and either (i) to return to the BUYER all BUYER's Supplies which were not incorporated into the VESSEL, or (ii) to pay to the BUYER the invoiced cost to the BUYER of all such supplies.
|
7. |
DISCHARGE OF OBLIGATIONS
|
8. |
REFUND GUARANTEE
|
9. |
PERFORMANCE GUARANTEE
|
1. |
DEFINITION OF BUYER'S DEFAULT
|
(a) |
If the first, second, third, fourth, fifth, sixth, seventh and eighth instalment is not paid to the BUILDER within respective DUE DATE of such instalments; or
|
(b) |
If the ninth instalment is not deposited in accordance with Article X.4.(a)(ii) hereof or if the said ninth instalment deposit is not released to the BUILDER against presentation by the BUILDER of a copy of the original PROTOCOL OF DELIVERY AND ACCEPTANCE; or
|
(c) |
If the BUYER fails to take delivery of the VESSEL within five (5) days when the VESSEL is duly tendered for delivery by the BUILDER under the provisions of Article VII hereof; or
|
(d) |
If an order or an effective resolution shall be passed for winding up of the BUYER (except for the purpose of reorganization, merger or amalgamation).
|
2. |
EFFECT OF THE BUYERS DEFAULT ON OR BEFORE THE DELIVERY OF THE VESSEL
|
(a) |
The DELIVERY DATE of the VESSEL shall be extended automatically for the actual period of such default to the extent that such default has actually delayed the construction of the VESSEL and the BUILDER shall not be obliged to pay any liquidated damages for the delay in delivery of the VESSEL actually caused thereby.
|
(b) |
The BUYER shall pay to the BUILDER interest at the rate of Four percent (4%) per annum in respect of the instalment(s) in default from the respective DUE DATE to the date of actual receipt by the BUILDER of the full amount of such instalment(s).
|
(c) |
If the BUYER is in default in payment of any of the instalment(s) due and payable prior to or simultaneously with the delivery of the VESSEL, the BUILDER shall, in writing or by
|
(d) |
If any of the BUYER's default continues for a period of fourteen (14) days after the BUILDER's notification to the BUYER of such default, the BUILDER may, at its option, rescind this CONTRACT by serving upon the BUYER a written notice or e-mail or facsimile notice of rescission confirmed in writing.
|
(e) |
In the event of such cancellation by the BUILDER of this CONTRACT due to the BUYER's default as provided for in paragraph 1 above, the BUILDER shall be entitled to retain and apply the instalments already paid by the BUYER to the recovery of the BUILDER's loss and damage due to the BUYER's default and the cancellation of this CONTRACT and at the same time the BUILDER shall have the full right and power either to complete or not to complete the VESSEL which is the sole property of the BUILDER as it deems fit, and to sell the VESSEL in its complete or incomplete state at a public or private sale on such terms and conditions as the BUILDER thinks fit without being answerable for any loss or damage but at the true market price in the prevailing market conditions.
|
(f) |
In no event shall the BUYER's total liability in the event of the BUILDER rescinding this CONTRACT exceed one hundred and five percent (105%) of the CONTRACT PRICE.
|
3. |
DEFINITION OF BUILDER'S DEFAULT
|
- |
if the BUILDER, without reasonable excuse, intentionally delays in the commencement of steel cutting, keel laying and launching of the VESSEL in accordance with the latest milestone event notice informed to the BUYER for a period of sixty five (65) days or more and the BUILDER has not rectified the same within fourteen (14) days of being notified by the BUYER of such delay. However, in any case, the BUILDER reserves its full rights to change the milestone events in accordance with the BUILDER's production planning.
|
- |
if the BUILDER shall apply for or consent to the appointment of a receiver, trustee or liquidator, shall be adjudicated insolvent, shall apply to the courts for protection from its creditors, file a voluntary petition in bankruptcy or take advantage of any insolvency law, or any action shall be taken by the BUILDER having an effect similar to any of the foregoing or the equivalent thereof in any jurisdiction;
|
- |
the filing of a petition or the making of an order or the passing of an effective resolution for the winding-up of the BUILDER or the placing of the BUILDER under court protection or the appointment of a receiver of the undertaking or property of the BUILDER or the insolvency of or the cessation of the carrying on of business by the BUILDER or any analogous proceedings;
|
- |
the BUILDER, without prior written consent of the BUYER, removes the VESSEL from the SHIPYARD or assigns, sub-lets or subcontracts performance of the whole or part of its obligations except as provided for in this CONTRACT or usual shipbuilding practice of the BUILDER or as agreed by BUYER;
|
- |
the BUILDER sells or transfers title to the VESSEL to a third party or a ship owner except due to rescission of the CONTRACT by the BUYER's default; and/or
|
- |
if the Refund Guarantee ceases to be valid for whatever reason subject to the last paragraph of Article X 8. of this CONTRACT or the Refund Guarantor enters in to any insolvency or similar proceeding as defined herein.
|
4. |
EFFECT OF THE BUILDER'S DEFAULT
|
5. |
OTHER BUILDER'S DEFAULT
|
1. |
RESPONSIBILITY OF THE BUYER
|
(a) |
furnished the BUYER with the time schedule referred to above, two (2) months prior to installation of the BUYER'S SUPPLIES and
|
(b) |
given the BUYER written notice of any delay in delivery of the BUYER'S SUPPLIES and the necessary document or advice for such supplies as soon as the delay occurs which might give rise to a claim by the BUILDER under this Paragraph.
|
2. |
RESPONSIBILITY OF THE BUILDER
|
1. |
DECISION BY THE CLASSIFICATION SOCIETY
|
2. |
LAWS APPLICABLE
|
3. |
PROCEEDINGS OF ARBITRATION
|
4. |
EXPENSES
|
5. |
ENTRY IN COURT
|
6. |
ALTERATION OF DELIVERY DATE
|
1. |
TAXES
|
2. |
DUTIES
|
1. |
PATENTS, TRADEMARKS AND COPYRIGHTS
|
2. |
RIGHTS TO THE SPECIFICATIONS, PLANS AND ETC.
|
1. |
EXTENT OF INSURANCE COVERAGE
|
2. |
APPLICATION OF THE RECOVERED AMOUNT
|
(a) |
Partial Loss :
|
(b) |
Total Loss :
|
3. |
TERMINATION OF BUILDER'S OBLIGATION TO INSURE
|
1. |
REPRESENTATIONS OF THE PARTIES
|
(a) |
It will comply with the laws of any jurisdiction applicable to such party as it relates to this CONTRACT, including but not limited to any applicable anti-corruption and anti-bribery laws., also including, without limitation, the United States Foreign Corrupt Practices Act ("US FCPA"), the UK Bribery Act 2010 ("UK Bribery Act") and the anti-bribery or anti-corruption laws of Korea as such laws may be amended from time to time;
|
(b) |
In connection with this CONTRACT, it has not and will not make any payments or gifts or provide other advantages, or any offers or promises of payments or gifts or other advantages of any kind, directly or indirectly, to:
|
(i) |
any person or entity with the intention of obtaining or retaining a business advantage for itself or the other party to this CONTRACT;
|
(ii) |
any official or member of any government or any agency or instrumentality thereof; any official or member of any public international organisation or any agency or instrumentality thereof; any or official of a political party or any candidate for political office (herein 'public official'); or any person while knowing or reasonably suspecting that all or a portion of such money or thing of value will be offered, given or promised, directly or indirectly, to any public official, in violation of the UK Bribery Act, the US FCPA or the laws of Korea.
|
(c) |
In connection with this CONTRACT, it has not and will not request, agree to accept or accept from any person or entity any payments or gifts or other advantages, or any offers or promises of payments or gifts or other advantages of any kind, directly or indirectly, as a reward or inducement to perform its obligations under this CONTRACT in any way improperly.
|
(d) |
undertakes that it shall apply standards of business conduct which are consistent with the BUILDER's Business Partner Code of Conduct, found at
http://ethics.hhi.co.kr/html_eng/2_moral/sub_02.htm,
a hard copy of which is available on request.
|
2. |
INDEMNIFICATION
|
To: |
[NAME OF THE BUYER]
|
1. |
In consideration of the Buyer entering into the Contract with the Builder, we hereby issue our irrevocable letter of guarantee number
[]
(hereinafter referred to as the "
Guarantee
") (in favor of
[Name of the Buyer
]
(herein referred to as the
"Buyer"
or
"you")
for the account of
[Name of the Builder]
(herein referred to as the "
Builder
")
as follows in connection with the shipbuilding contract dated
[]
(herein referred to as the "
Contract
"),made
by and between the Buyer and the Builder for the construction and sale of
[]
having Builder's Hull No.
[]
(hereinafter referred to as the "
Vessel
").
|
2. |
If in connection with the terms of the Contract, the Buyer shall become entitled to a refund of one or more of the advance payments made to the Builder prior to the delivery of the Vessel, we hereby irrevocably guarantee the repayment of the same to the Buyer after the Buyer's written demand together with interest thereon at the Agreed Interest Rate from the date following the date of receipt by the Builder to the date of remittance by telegraphic transfer of such refund.
|
3. |
This Guarantee is an undertaking to make the above payments against a written demand conforming with the requirements of this Guarantee and is independent from the Contract. Our obligation to make payment under this Guarantee will not be discharged by amendments to the Contract, disputes under the Contract or any invalidity of the Contract.
|
4. |
The amount of this Guarantee will be automatically increased upon the Builder's receipt of the respective further installments: each time by the amount of installment of:
|
5. |
In case any refund is made to you by the Builder or by us under this Guarantee, our liability hereunder shall be automatically reduced to reflect the remaining amount due (plus interest).
|
6. |
For the purposes of this Guarantee, "
Agreed Interest Rate
" means four percent (4%) per annum provided that in the event of cancellation of the Contract. as a result of delays due to Force Majeure (as defined in the Contract) or other causes beyond the control of the Builder or in the case of total loss of the Vessel, the interest rate shall be reduced to three per cent (3%) per annum as provided in Article X of the Contract.
|
7. |
This Guarantee is payable against our simple receipt of a signed statement from you certifying that Buyer's demand for refund has been made in conformity with the Contract and the Builder has failed to make the refund within 30 days after your demand to the Builder. Any notice, claim or demand to be given or made by you under this Guarantee may be served on us either by post or by tested telex or by authorized SWIFT or equivalent as follows:
|
8. |
Refund shall be made to you by telegraphic transfer (net of bank charges) in United States Dollars within 30 days from the receipt of your demand. All payments under this Guarantee shall be made without deduction or withholding for or on account of any taxes, duties or charges whatsoever unless we are compelled by law to deduct or withhold the same, in which case we shall make the minimum deduction or withholding permitted by law and will pay such additional amounts as may be necessary in order that the amount received by you after such deductions or withholdings shall be equal to the amount which would have been received had no such deduction or withholding been made.
|
9. |
This Guarantee shall expire and become null and void upon the earliest of:
|
(a) |
receipt by the Buyer of the sum guaranteed hereby;
|
(b) |
acceptance by the Buyer of the delivery of the Vessel; or
|
(c) |
rescission or termination of the Contract due to the Buyer's default in accordance with the Contract provided that such default has been admitted in writing by the Buyer or has been established by a final and unappealable Award by a London arbitration tribunal duly appointed under the Contract, or a Judgment of the High Court of Justice in London.
|
10. |
Notwithstanding any provision herein, in the event that within 30 days from the date of your demand to the Builder referred to above, we receive notification from you or the Builder accompanied by written confirmation by an arbitrator to the effect that your claim to cancel the Contract or your claim for refund thereunder has been disputed and referred to arbitration in accordance with the Contract, we shall under this Guarantee refund to you the sum (not exceeding []
U.S. Dollars (US$ []) plus interest by the same manner hereinabove) due to you from the Builder pursuant to the award made under such arbitration (or any judgment on appeal therefrom) immediately upon receipt from you of the demand for payment of the sum and a copy of the award (or any judgment on appeal therefrom).
|
11. |
This Guarantee may be assigned or transferred by the BUYER with prior written notice to us. A person who is not a party to this Guarantee has no rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Guarantee.
|
12. |
This Guarantee shall be governed by and construed in accordance with the laws of England and any dispute arising under or in connection with this guarantee shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory modification thereof as currently in force before three arbitrators, with one to be appointed by each party and the third to be appointed by the two party appointed arbitrators..
|
13. |
We hereby warrant that we are permitted by any relevant law to which we are subject (including, where relevant, the laws of the place or places of each of our incorporation, establishment, regulation, registration and residence) to (i) issue a guarantee in this form, (ii) make payment under this guarantee in United States Dollars and (iii) designate the laws of England and arbitration in London as the applicable law, the forum and the place of jurisdiction, to which we irrevocably submit. We hereby warrant that this guarantee has been, or will be, duly registered with the relevant State authority in any legal jurisdiction in which such registration is required for any reason. We hereby warrant that we have obtained all necessary approvals and authorisations to issue this guarantee.
|
Hyundai Mipo Dockyard Co., Ltd.
100, Bangeojinsunhwan-Doro, Dong-Gu,
|
|
Ulsan 44113
|
Date : , 2017
|
Korea
|
Very truly yours,
For and on behalf of
By
Name : Title : |
For and on behalf of
|
For and on behalf of
|
||||
The BUYER
|
The BUILDER
|
||||
/s/ Evangelos J. Pistiolis
|
/s/ Sam H. Ka
|
||||
Name:
|
Evangelos J. Pistiolis
|
Name:
|
Sam H. Ka
|
||
Title:
|
Attorney-in-Fact
|
Title:
|
Attorney-in-Fact
|
WITNESS
|
WITNESS
|
||||
/s/ Andreas Louka
|
/s/ Euisung Yoon
|
||||
Name:
|
Andreas Louka
|
Name:
|
Euisung Yoon
|
PREAMBLE
|
3
|
||
ARTICLE
|
I
|
: DESCRIPTION AND CLASS
|
4
|
II
|
: CONTRACT PRICE
|
7
|
|
III
|
: ADJUSTMENT OF THE CONTRACT PRICE
|
8
|
|
IV
|
:INSPECTION AND APPROVAL
|
12
|
|
V
|
: MODIFICATIONS, CHANGES AND EXTRAS
|
18
|
|
VI
|
: TRIALS AND COMPLETION
|
21
|
|
VII
|
: DELIVERY
|
25
|
|
VIII
|
: DELAYS AND EXTENSIONS OF TIME (FORCE MAJEURE)
|
29
|
|
IX
|
: WARRANTY OF QUALITY
|
32
|
|
X
|
: PAYMENT AND RESCISSION BY THE BUYER
|
36
|
|
XI
|
: BUYER'S AND BUILDER'S DEFAULT
|
43
|
|
XII
|
: BUYER'S SUPPLIES
|
47
|
|
XIII
|
: ARBITRATION
|
49
|
|
XIV
|
: SUCCESSORS AND ASSIGNS
|
51
|
|
XV
|
: TAXES AND DUTIES
|
52
|
|
XVI
|
: PATENTS, TRADEMARKS AND COPYRIGHTS
|
53
|
|
XVII
|
: INTERPRETATION AND GOVERNING LAW
|
55
|
|
XVIII
|
: NOTICE
|
56
|
|
XIX
|
: EFFECTIVENESS OF THIS CONTRACT
|
58
|
|
XX
|
:EXCLUSIVENESS
|
59
|
|
XXI
|
:INSURANCE
|
60
|
|
XXII
|
: COMPLIANCE AND ANTI-BRIBERY
|
62
|
|
EXHIBIT "A" LETTER OF GUARANTEE
|
65
|
||
EXHIBIT "B" PERFORMANCE GUARANTEE
|
69
|
1. |
DESCRIPTION
|
2. |
BASIC DIMENSIONS AND PRINCIPAL PARTICULARS OF THE VESSEL
|
(a) |
The basic dimensions and principal particulars of the VESSEL shall be :
|
Length, overall
|
abt. 277m
|
||
Length, between perpendiculars
|
272m
|
||
Breadth, moulded
|
48m
|
||
Depth, moulded
|
23.2m
|
||
Design draught, moulded
|
16m
|
||
Scantling draught, moulded
|
17.15m
|
Main Engine
|
:
|
HYUNDAI-MAN B&W 6G7OME-C9.5
Nominal Rating : 21,840 kW x 83 RPM
Engine Optimization : Low load exhaust gas bypass
MCR : 16,330 kW x 73 RPM
NCR : 10,400 kW x 62.8 RPM
|
|
Deadweight, guaranteed
|
:
|
abt. 157,275 metric tons at the Scantling draught of 17.15 meters on even keel in sea water of specific gravity of 1.025.
|
Speed, guaranteed
|
:
|
14.5 knots at the design draught of 16 meters at the condition of clean bottom and in calm and deep sea with main engine output of 10,400 kW with 15% sea margin.
|
|
Fuel Consumption, guaranteed
|
:
|
154.4 grams/kW-hour using marine diesel oil having lower calorific value of 42,700 kj/kg at NCR measured at the shop trial with I.S.O reference conditions.
|
(b) |
The dimensions may be slightly modified by the BUILDER, who also reserves the right to make changes to the SPECIFICATIONS and the PLAN if found necessary to suit the local conditions and facilities of the SHIPYARD, the availability of materials and equipment, the introduction of improved production methods or otherwise, subject to the approval of the BUYER which the BUYER shall not withhold unreasonably, and the approval of the CLASSIFICATION SOCIETY.
|
3. |
CLASSIFICATION, RULES AND REGULATIONS
|
(a) |
The VESSEL, including its machinery, equipment and outfitting shall be constructed in accordance with the BUILDER's quality standard and shipbuilding practices.
|
(b) |
The BUILDER shall arrange with the CLASSIFICATION SOCIETY for the assignment by the CLASSIFICATION SOCIETY of representative(s) to the VESSEL during construction. All fees and charges incidental to classification of the VESSEL in compliance with the above specified rules, regulations and requirements of this
|
(c) |
The decision of the CLASSIFICATION SOCIETY as to whether the VESSEL complies with the regulations of the CLASSIFICATION SOCIETY shall be final and binding upon the BUILDER and the BUYER. For the avoidance of doubt such decision shall only be final and binding in so far as compliance with the regulations of the CLASSIFICATION SOCIETY and shall have no wider application, including as to whether the VESSEL has been designed, constructed, equipped and completed in accordance with all terms of this CONTRACT.
|
(d) |
The facilities, labour and materials necessary for the safe and convenient conduct of any inspection by the CLASSIFICATION SOCIETY shall be furnished by the BUILDER. All major plans shall be subject to approval, inspection and test by the CLASSIFICATION SOCIETY in accordance with the rules and regulations of the CLASSIFICATION SOCIETY.
|
4. |
SUBCONTRACTING
|
5. |
NATIONALITY OF THE VESSEL
|
1. |
DELAYED DELIVERY
|
(a) |
No adjustment shall be made and the CONTRACT PRICE shall remain unchanged for the first thirty (30) days of the delay in delivery of the VESSEL [ending as of 12 o'clock midnight Korean Standard Time on the thirtieth (30th) day of delay] beyond the Delivery Date calculated as provided in Article VII.1. hereof.
|
(b) |
If delivery of the VESSEL is delayed more than thirty [30) days beyond the date upon which the delivery is due from the BUILDER under the terms of this CONTRACT, then, beginning at midnight of the thirtieth (30th) day after such due date, the CONTRACT PRICE of the VESSEL shall be reduced by U.S. Dollars Fifteen Thousand (US$ 15,000)for each full day of delay shall not exceed the amount due to cover the delay of one hundred and sixty five (165) days after thirty (30) days of the delay in delivery of the VESSEL at the rate of deduction as specified hereinabove.
|
(c) |
But, if the delay in delivery of the VESSEL continues for a period of more than one hundred and ninety five days (195) days beyond the date upon which the delivery is due from the BUILDER under the terms of this CONTRACT then, in such event, and after such period has expired, the BUYER may, at its option, cancel this CONTRACT by serving upon the BUILDER a notice of cancellation in writing or by e-mail or facsimile directed to the BUILDER at the address given in this CONTRACT, and the provisions of Article X.5 shall apply. Such cancellation shall be effective as of the date the notice thereof is received by the BUILDER. If the BUYER has not served the notice of cancellation after the aforementioned one hundred and ninety five days (195) days delay in delivery, the BUILDER may demand the BUYER to make an election in accordance with Article VIII.3. hereof.
|
(d) |
For the purpose of this Article, the delivery of the VESSEL shall be deemed to be delayed when and if the VESSEL, after taking into full account extension of the Delivery Date or permissible delays as provided in Article V, VI, VIII, XI or elsewhere in this CONTRACT, is delivered beyond or before the date upon which delivery would then be due under the terms of this CONTRACT.
|
2. |
INSUFFICIENT SPEED
|
(a) |
The CONTRACT PRICE of the VESSEL shall not be affected or changed, if the actual speed, as determined by trial runs more fully described in Article VI hereof, is less than the guaranteed speed as defined in Article I paragraph 2 hereof, provided such deficiency in actual speed is not more than three-tenths (3/10) of a knot below the guaranteed speed.
|
(b) |
However, as for the deficiency of more than three-tenths (3/10) of a knot in actual speed below the guaranteed speed, the CONTRACT PRICE shall be reduced by U.S. Dollars Forty Thousand (US$ 40,000) for each full one-tenth (1/10) of a knot in excess of the said three-tenths (3/10) of a knot of deficiency in speed [fractions of less than one-tenth (1/10) of a knot shall be regarded as a full one-tenth (1/10) of a knot]. However, unless the parties agree otherwise, the total amount of reduction from the CONTRACT PRICE shall not exceed the amount due to cover the deficiency of eight-tenths(8/10) full knot below the guaranteed speed at the rate of reduction as specified above.
|
(c) |
If the deficiency in actual speed of the VESSEL is more than eight-tenths (8/10) of a full knot below the guaranteed speed, then the BUYER, at its option, may, subject to the BUILDER's right to effect alterations or corrections as provided in Article VI.5. hereof, cancel this CONTRACT by the BUYER sending a notice of cancellation to the BUILDER in writing or by email or facsimile, and the provisions of Article X.5 shall apply, or may accept the VESSEL at a reduction in the CONTRACT PRICE as above provided for eight-tenths (8/10) full knot of deficiency only.
|
3. |
EXCESSIVE FUEL CONSUMPTION
|
(a) |
The CONTRACT PRICE of the VESSEL shall not be affected or changed by reason of the fuel consumption of the VESSEL's main engine, as determined by the engine manufacturer's shop trial as per the SPECIFICATIONS being more than the guaranteed fuel consumption of the VESSEL's main engine as defined in Article I paragraph 2 hereof, if such excess is not more than seven per cent (7%) over the guaranteed fuel consumption.
|
(b) |
However, as for the excess of more than seven percent (7%) in the actual fuel consumption over the guaranteed fuel consumption of the VESSEL's main engine, the CONTRACT PRICE shall be reduced by U.S. Dollars Fifty Thousand (US$ 50,000) for
|
(c) |
If such actual fuel consumption exceeds the guaranteed fuel consumption of the VESSEL's main engine by more than ten percent (10%), the BUYER, at its option, may, subject to the BUILDER's right to effect alterations or corrections as specified in Article VI. 5. hereof, reject the main engine or require rectification thereof to the BUYER's complete satisfaction. If the BUILDER is unable to comply with the BUYER's request as aforesaid or if the BUYER elects to reject the main engine then the BUYER may cancel this CONTRACT by the BUYER sending a notice of cancellation to the BUILDER in writing or by email or facsimile, and the provisions of Article X.5 shall apply, or may accept the VESSEL at a reduction in the CONTRACT PRICE as above provided for the ten percent (10%) increase only.
|
4. |
DEADWEIGHT BELOW CONTRACT REQUIREMENTS
|
(a) |
The CONTRACT PRICE of the VESSEL shall not be affected or changed, if the actual deadweight determined as provided in this CONTRACT and the SPECIFICATIONS, is below the guaranteed deadweight as defined in Article I paragraph 2 hereof by one point five per cent (1.5%) of the guaranteed deadweight or less.
|
(b) |
However, should the deficiency in the actual deadweight of the VESSEL be more than one point five per cent (1.5%) of the guaranteed deadweight (disregarding fractions of less than one (1) metric ton), the CONTRACT PRICE shall be reduced by the sum of U.S. Dollars Five Hundred (US$ 500)for each one (1) metric ton deficiency (disregarding fractions of less than one (1) metric ton) in excess of the said one point five per cent (1.5%) of deficiency.
|
(c) |
In the event of such deficiency in the deadweight of the VESSEL being more than four per cent (4%) of the guaranteed deadweight, the BUYER, at its option, may, subject to the BUILDER's right to effect alterations or corrections as specified in Article VI. 5. hereof, cancel this CONTRACT by the BUYER sending a notice of cancellation to the BUILDER in writing or by email or facsimile, and the provisions of Article X.5 shall apply, or accept the VESSEL at a reduction in the CONTRACT PRICE as above
|
5. |
EFFECT OF CANCELLATION
|
6. |
CUMULATIVE EFFECT OF LIQUIDATED DAMAGES
|
1. |
APPOINTMENT OF BUYER'S REPRESENTATIVE
|
2. |
AUTHORITY OF THE BUYER'S REPRESENTATIVE
|
3. |
APPROVAL OF DRAWINGS
|
(a) |
The BUILDER shall submit to the BUYER three (3) copies of each of the plans and
|
(b) |
When and if the BUYER'S REPRESENTATIVE shall have been sent by the BUYER to the SHIPYARD in accordance with Paragraph 1 of this Article, the BUILDER may submit the remainder, if any, of the plans and drawings in the agreed list, to the BUYER'S REPRESENTATIVE for his approval, unless otherwise agreed upon between the parties hereto.
|
(c) |
In the event that the BUYER or the BUYER'S REPRESENTATIVE shall fail to return the plans and drawings to the BUILDER within the time limit as hereinabove provided, such plans and drawings shall be deemed to have been automatically approved without any comment. In the event the plans and drawings submitted by the BUILDER to the BUYER or the BUYER'S REPRESENTATIVE in accordance with this Article do not meet with the BUYER's or the BUYER'S REPRESENTATIVE's approval and the parties cannot reach agreement between them, the matter may be submitted by either party hereto for determination pursuant to Article XIII hereof. If the BUYER's comments on the plans and drawings that are returned to the BUILDER by the BUYER within the said time limit are not clearly specified or detailed, the BUILDER shall seek clarification from the BUYER prior to implementing them which clarification must be provided in writing by the BUYER within seven (7) days of such request from the BUILDER. If the BUYER shall fail to provide the BUILDER with such clarification within the said time limit, then the BUILDER shall be entitled to place its own interpretation on such comments in implementing them.
|
(d) |
The BUYER or the BUYER'S REPRESENTATIVE shall have the right to take photographs of the VESSEL, its materials, her engines, her machinery, equipment and components throughout the construction period of the VESSEL subject to the BUILDER's prior consent, which is not to be unreasonably withheld.
|
4. |
SALARIES AND EXPENSES
|
5. |
RESPONSIBILITY OF THE BUILDER
|
(a) |
The BUILDER shall provide the BUYER'S REPRESENTATIVE and his assistants free of charge with suitably furnished office space at, or in the immediate vicinity of, the SHIPYARD together with telephone, high speed broadband internet access, e-mail, facsimile, air conditioning, access to photocopy machine without charge, lavatory facilities and such other reasonable facilities as may be necessary to enable the BUYER'S REPRESENTATIVE and his assistants to carry out their work under this CONTRACT. However, the BUYER shall pay for the communication charges of the telephone, broadband internet, e-mail or facsimile facilities used by the BUYER'S REPRESENTATIVE or his assistants.
|
(b) |
The BUYER'S REPRESENTATIVE and his assistants shall at all times remain the employees of the BUYER The BUILDER shall not be liable to the BUYER or the BUYER'S REPRESENTATIVE or to his assistants or to the BUYER's employees or agents for personal injuries, including death, during the time they, or any of them, are on the VESSEL, or within the premises of either the BUILDER or its sub-contractors, or are otherwise engaged in and about the construction of the VESSEL, unless, however, such personal injuries, including death, are caused by the negligence of the BUILDER" its sub-contractors, or its or their employees or agents. The BUILDER shall not be liable to the BUYER for damages to, or destruction of property of the BUYER or of the BUYER'S REPRESENTATIVE or his assistants or the BUYER's employees or agents, unless such damages, loss or destruction is caused by the negligence of the BUILDER, its sub-contractors, or its or their employees or agents.
|
6. |
RESPONSIBILITY OF THE BUYER
|
1. |
HOW EFFECTED
|
2. |
SUBSTITUTION OF MATERIAL
|
3. |
CHANGES IN RULES AND REGULATIONS
|
(a) |
any increase or decrease in the CONTRACT PRICE of the VESSEL that is occasioned by such compliance;
|
(b) |
any extension or advancement in the Delivery Date of the VESSEL that is occasioned by such compliance;
|
(c) |
any increase or decrease in the deadweight and/or cubic capacity of the VESSEL, if such compliance results in any increase or reduction in the deadweight and/or cubic capacity ;
|
(d) |
adjustment of the speed requirements if such compliance results in any increase or reduction in the speed ; and
|
(e) |
any other alterations in the terms of this CONTRACT or of the SPECIFICATIONS or the PLAN or both, if such compliance makes such alterations of the terms necessary.
|
1. |
NOTICE
|
2. |
WEATHER CONDITION
|
3. |
HOW CONDUCTED
|
4. |
CONSUMABLE STORES
|
5. |
ACCEPTANCE OR REJECTION
|
(a) |
The BUILDER shall as soon as possible following the completion of the trials of the VESSEL deliver to the BUYER a detailed report setting out the results of the trials and an analysis of such results and confirmation that the BUILDER considers that the results of the trial run indicate that the VESSEL is in all respects in conformity with this CONTRACT and the SPECIFICATIONS and the PLAN. The BUYER shall within seven (7) days after receipt of such report, notify the BUILDER in writing of its acceptance of the VESSEL, or of its rejection of the VESSEL, or of the details in respect of which the VESSEL does not conform to the SPECIFICATIONS and the PLAN or this CONTRACT.
|
(b) |
If, during any sea trial, any breakdown occurs entailing interruption or irregular performance which can be repaired on board, the trial shall be continued after such repairs and be valid in all respects, provided the BUYER and the CLASSIFICATION SOCIETY agrees on the extent of such repairs being carried out
|
(c) |
However, if, during or after the trial run, it becomes apparent that the VESSEL or any part of her machinery or equipment does not conform to the requirements of the CONTRACT, the PLAN and/or the SPECIFICATIONS, the BUILDER shall correct such non-conformity and perform such tests and/or trials as are necessary to confirm conformity to the CONTRACT, the PLAN and/or the SPECIFICATIONS.
|
(d) |
Save as above provided, The BUYER shall, within three (3) days after completion of the trial run and the receipt of all records of tests and trials carried out on that trial run, notify the BUILDER in writing or by e-mail or facsimile confirmed in writing of
|
(e) |
However, the BUYER shall not be entitled to reject the VESSEL by reason of any minor or insubstantial items judged from the point of view of standard shipbuilding and shipping practice as not being in conformity with the SPECIFICATIONS, but, in that case, the BUILDER shall not be released from the obligation to correct and/or remedy such minor or insubstantial items as soon as practicable after the delivery of the VESSEL.
|
(f) |
If inconvenient for the VESSEL to have any non-conformities with the CONTRACT, the PLAN and/or the SPECIFICATIONS corrected and/or remedied at the SHIPYARD, the BUILDER may, at the BUYER's option, arrange to have the corrections or remedies carried out elsewhere, and may, if practicable and at the BUYER's option, do such work while the VESSEL is sailing. The BUYER may in its absolute discretion, if proposed by the BUILDER, decide to accept a payment from the BUILDER in lieu of such items being corrected and/or remedied, which payment in lieu shall first be agreed between the BUILDER and the BUYER.
|
6. |
EFFECT OF ACCEPTANCE
|
1. |
TIME AND PLACE
|
2. |
WHEN AND HOW EFFECTED
|
3. |
DOCUMENTS TO BE DELIVERED TO THE BUYER
|
(a) |
PROTOCOL OF TRIALS of the VESSEL made pursuant to this CONTRACT and the SPECIFICATIONS,
|
(b) |
PROTOCOL OF INVENTORY of the equipment of the VESSEL, including spare parts, all as specified in the SPECIFICATIONS,
|
(c) |
PROTOCOL OF CONSUMABLE NATURE, such as all fuel oil and fresh water remaining in tanks if its cost is charged to the BUYER under Article VI. 4. hereof,
|
(d) |
DRAWING AND PLANS pertaining to the VESSEL as stipulated in the SPECIFICATIONS, which shall be furnished to the BUYER at no additional cost,
|
(e) |
ALL CERTIFICATES required to be furnished upon delivery of the VESSEL pursuant to this CONTRACT, the SPECIFICATIONS and the customary shipbuilding practice, including
|
(i) |
Classification Certificate
|
(ii) |
Safety Construction Certificate
|
(iii) |
Safety Equipment Certificate
|
(iv) |
Safety Radiotelegraphy Certificate
|
(v) |
International Loadline Certificate
|
(vi) |
International Tonnage Certificate
|
(vii) |
BUILDER's Certificate
|
(viii) |
Ship Sanitation Control Exemption Certificate
|
(f) |
DECLARATION OF WARRANTY of the BUILDER that the VESSEL is delivered to the BUYER free and clear of any liens, claims, charges, mortgages, or other encumbrances upon the BUYER's title thereto, and in particular, that the VESSEL is absolutely free of all burdens in the nature of imposts, taxes, or charges imposed by the prefecture or country of the port of delivery, as well as of all liabilities of the BUILDER to its sub-contractors and employees and of all liabilities arising from the operation of the VESSEL in trial runs, or otherwise, prior to delivery except as otherwise provided under this CONTRACT.
|
(g) |
BUILDER'S CERTIFICATE
|
(h) |
CERTIFICATE OF NON-REGISTRATION
|
(i) |
COMMERCIAL INVOICES covering the last instalment and modifications.
|
(j) |
BILL OF SALE or other document that certifies that the title of the VESSEL passes to the BUYER.
|
(k) |
Such other documents as the BUYER may reasonably require in connection with the registration of the VESSEL, which shall be agreed at least twenty eight (28) days prior to the DELIVERY DATE.
|
4. |
TENDER OF THE VESSEL
|
5. |
TITLE AND RISK
|
6. |
REMOVAL OF THE VESSEL
|
1. |
CAUSES OF DELAY
|
2. |
NOTICE OF DELAYS
|
3. |
RIGHT TO CANCEL FOR EXCESSIVE DELAY
|
(a) |
Such future date shall become the contractual delivery date for the purposes of this CONTRACT but this new date shall not be subject to any further extension by reason of permissible delays as herein provided, and
|
(b) |
If the VESSEL is not delivered by such revised contractual delivery date, the BUYER shall have the same right to liquidated damages and rights of cancellation upon the
|
4. |
DEFINITION OF PERMISSIBLE DELAYS
|
1. |
GUARANTEE
|
2. |
NOTICE OF DEFECTS
|
3. |
REMEDY OF DEFECTS
|
(a) |
The HGS on behalf of BUILDER shall remedy, at its expense, any DEFECT against which the VESSEL is guaranteed under this Article, by making all necessary repairs or replacements at the SHIPYARD or elsewhere as provided for in (b) hereinbelow.
|
(b) |
However, if it is impractical to bring the VESSEL to the SHIPYARD, the BUYER may cause the necessary repairs or replacements to be made elsewhere which is deemed suitable for the purpose, provided that, in such event, the BUILDER and the HGS may forward or supply replacement parts or materials to the VESSEL, unless forwarding or supplying thereof to the VESSEL would impair or delay the operation or working schedule of the VESSEL. In the event that the BUILDER and the HGS proposes to cause the necessary repairs or replacements to be made to the VESSEL at any other shipyard or works than the SHIPYARD, the BUYER shall first, but in all events as soon as possible, give the BUILDER and the HGS notice in writing or by e-mail or facsimile of the time and place such repairs will be made, and if the VESSEL is not thereby delayed, or her operation or working schedule is not thereby impaired, the BUILDER and the HGS shall have the right to verify by its own representative(s) the nature and extent of the DEFECTS complained of. The BUILDER and the HGS shall in such case, promptly advise the BUYER in writing or by e-mail or facsimile, after such examination has been completed, of its acceptance or rejection of the DEFECTS as ones that are covered by the guarantee herein provided. Upon the BUILDER and the HGS's acceptance of the DEFECTS as justifying remedy under this Article, or upon the award of the arbitration tribunal so determining, the HGS on behalf of BUILDER shall pay to the BUYER for such repairs or replacements a sum equal to the actual direct cost of the repairs or replacements, as evidenced by the final invoices of the relevant shipyard/repairer or supplier., however, the amount of the HGS's payment to the BUYER for such repairs or replacements shall not exceed the average cost quoted by one reputable repair yard in Singapore and one reputable repair yard in China.
|
(c) |
In any case, the VESSEL shall be taken at the BUYER's costs and responsibility to the place elected, ready in all respects for such repairs or replacements and in any event, the BUILDER and the HGS shall not be responsible for towage, dockage, wharfage, port charges or any other cost or expenses whatsoever incurred by the BUYER in getting and keeping the VESSEL ready for such repairs or replacements.
|
(d) |
In the event that it is necessary for the BUILDER and the HGS to forward a replacement for a defective part under this guarantee, replacement parts shall be shipped to the BUYER under the terms of F.O.B. from the port of the country where they are to be purchased.
|
(e) |
The BUILDER and the HGS reserve the option to retrieve, at the BUILDER and the HGS's cost, any of the replaced equipment/parts in case DEFECTS are remedied in accordance with the provisions in this Article.
|
(f) |
The BUILDER and the HGS will have to respond to the Buyer for any DEFECT notice within seven (7) days advising their intentions. The BUILDER and the HGS will have to replace any equipment/parts/system for which the equipment/part/system is not available due to the maker bankruptcy or the maker failure to respond within three (3) months.
|
(f) |
Any dispute under this article shall be referred to arbitration in accordance with the provisions of Article XIII hereof.
|
4. |
EXTENT OF BUILDER'S RESPONSIBILITY
|
(a) |
After delivery of the VESSEL the BUILDER and the HGS shall have no responsibility for any other DEFECTS whatsoever in the VESSEL than the DEFECTS specified in paragraph 1 of this Article, unless such defect was caused or occasioned by the negligence of the BUILDER and the HGS, its subcontractors or their respective employees within the Guarantee Period. The BUILDER and the HGS shall have no liability whatsoever in any circumstances whatsoever to the BUYER or to any third party for anything except the cost of repairing the DEFECT itself. The BUILDER and the FIGS shall not in any circumstances be responsible or liable for any consequential or special losses, damages or expenses including, but not limited to, loss of time, loss of profit or earning or demurrage directly or indirectly occasioned to the BUYER or any third party by reason of the DEFECTS specified in paragraph 1 of this Article or due to repairs or other works done to the VESSEL to remedy such DEFECTS. After delivery, the BUYER shall hold the BUILDER and the FIGS harmless and indemnify the BUILDER and the FIGS against any claim from the BUYER or any third party whatsoever in respect of any such matters and in respect of any other claims relating to the VESSEL for which the BUILDER and the FIGS do not expressly give a warranty to the BUYER under this Article.
|
(b) |
The BUILDER and the HGS shall not be responsible for any DEFECTS in any part of the VESSEL which may subsequent to delivery of the VESSEL have been replaced or in any way repaired by any other contractor, or for any DEFECTS which have been caused or aggravated by omission or improper use and maintenance of the VESSEL on the part of the BUYER, its servants or agents or by ordinary wear and tear or by any other circumstances beyond the control of the BUILDER and the FIGS.
|
(c) |
The guarantee contained as hereinabove in this Article replaces and excludes any other
|
5. |
ASSIGNMENT OF SUPPLIER'S GUARANTEES
|
1. |
CURRENCY
|
2. |
TERMS OF PAYMENT
|
(a) |
First Instalment
|
(b) |
Second Instalment
|
(c) |
Third Instalment
|
(d) |
Fourth Instalment
|
(e) |
Fifth Instalment
|
(f) |
Sixth Instalment
|
(g) |
Seventh Instalment
|
(h) |
Eighth Instalment
|
(i) |
Ninth Instalment
|
3. |
DEMAND FOR PAYMENT
|
4. |
METHOD OF PAYMENT
|
(a) |
All the pre-delivery payments and the payment due on delivery in settlement of the CONTRACT PRICE as provided for in Paragraph 2 of this Article shall be made in U.S. Dollars on or before the DUE DATE thereof by telegraphic transfer as follows;
|
(i) |
The payment of the first, second, third, fourth, fifth, sixth, seventh and eighth instalments shall be made to the account of the BUILDER at an international bank which will be confirmed after signing the CONTRACT (hereinafter called the "
BUILDER'S BANK
") or the account of the BUILDER with any other bank in favor of the BUILDER, as designated and notified by the BUILDER to the BUYER at least three (3) business days prior to the DUE DATE.
|
(ii) |
The ninth instalment as provided for in Paragraph 2.(h) of this Article shall be deposited at the account of the BUILDER'S BANK or, if the BUILDER requires, at the account of the BUILDER with any other bank in favor or the BUILDER, as designated and notified by the BUILDER, in an account in the name of the BUYER by telegraphic transfer remittance at least three (3) business days prior to the scheduled delivery date of the
|
(b) |
Simultaneously with each of such payments, the BUYER shall advise the BUILDER of the details of the payments by e-mail or facsimile and at the same time, the BUYER shall cause the BUYER's remitting Bank to advise the BUILDER'S BANK or any other bank, Seoul, Korea as the case may be, of the details of such payments by authenticated bank cable or telex.
|
5. |
REFUND BY THE BUILDER
|
6. |
TOTAL LOSS
|
(a) |
to build another vessel in place of the VESSEL so lost and deliver it under this CONTRACT to the BUYER, provided that the parties hereto shall have agreed in writing to a reasonable cost and time for the construction of such vessel in place of the lost VESSEL, and in which case, any amounts recovered under the insurance referred to in Article XXI will be applied to the construction of the VESSEL; or
|
(b) |
to refund to the BUYER the full amount of the total sums paid by the BUYER to the BUILDER under the provisions of Paragraph 2 of this Article together with interest thereon at the rate of Three per cent (3%) per annum from the date following the date of receipt by the BUILDER of such pre-delivery instalment(s) to the date of payment by the BUILDER to the BUYER of the refund, and to pay to the BUYER the invoiced cost to the BUYER of all BUYER's Supplies which were incorporated into the
|
7. |
DISCHARGE OF OBLIGATIONS
|
8. |
REFUND GUARANTEE
|
9. |
PERFORMANCE GUARANTEE
|
1. |
DEFINITION OF BUYER'S DEFAULT
|
(a) |
If the first, second, third, fourth, fifth, sixth, seventh and eighth instalment is not paid to the BUILDER within respective DUE DATE of such instalments; or
|
(b) |
If the ninth instalment is not deposited in accordance with Article X.4.(a)(ii) hereof or if the said ninth instalment deposit is not released to the BUILDER against presentation by the BUILDER of a copy of the original PROTOCOL OF DELIVERY AND ACCEPTANCE; or
|
(c) |
If the BUYER fails to take delivery of the VESSEL within five (5) days when the VESSEL is duly tendered for delivery by the BUILDER under the provisions of Article VII hereof; or
|
(d) |
If an order or an effective resolution shall be passed for winding up of the BUYER (except for the purpose of reorganization, merger or amalgamation).
|
2. |
EFFECT OF THE BUYER'S DEFAULT ON OR BEFORE THE DELIVERY OF THE VESSEL
|
(a) |
The DELIVERY DATE of the VESSEL shall be extended automatically for the actual period of such default to the extent that such default has actually delayed the construction of the VESSEL and the BUILDER shall not be obliged to pay any liquidated damages for the delay in delivery of the VESSEL actually caused thereby.
|
(b) |
The BUYER shall pay to the BUILDER interest at the rate of Four percent (4%) per annum in respect of the instalment(s) in default from the respective DUE DATE to the date of actual receipt by the BUILDER of the full amount of such instalment(s).
|
(c) |
If the BUYER is in default in payment of any of the instalment(s) due and payable prior to or simultaneously with the delivery of the VESSEL, the BUILDER shall, in
|
(d) |
If any of the BUYER's default continues for a period of fourteen (14) days after the BUILDER's notification to the BUYER of such default, the BUILDER may, at its option, rescind this CONTRACT by serving upon the BUYER a written notice or e-mail or facsimile notice of rescission confirmed in writing.
|
(e) |
In the event of such cancellation by the BUILDER of this CONTRACT due to the BUYER's default as provided for in paragraph 1 above, the BUILDER shall be entitled to retain and apply the instalments already paid by the BUYER to the recovery of the BUILDER's loss and damage due to the BUYER's default and the cancellation of this CONTRACT and at the same time the BUILDER shall have the full right and power either to complete or not to complete the VESSEL which is the sole property of the BUILDER as it deems fit, and to sell the VESSEL in its complete or incomplete state at a public or private sale on such terms and conditions as the BUILDER thinks fit without being answerable for any loss or damage but at the true market price in the prevailing market conditions.
|
(f) |
In no event shall the BUYER's total liability in the event of the BUILDER rescinding this CONTRACT exceed one hundred and five percent (105%) of the CONTRACT PRICE.
|
3. |
DEFINITION OF BUILDER'S DEFAULT
|
- |
if the BUILDER, without reasonable excuse, intentionally delays in the commencement of steel cutting, keel laying and launching of the VESSEL in accordance with the latest milestone event notice informed to the BUYER for a period of sixty five (65) days or more and the BUILDER has not rectified the same within fourteen (14) days of being notified by the BUYER of such delay. However, in any case, the BUILDER reserves its full rights to change the milestone events in accordance with the BUILDER's production planning.
|
- |
if the BUILDER shall apply for or consent to the appointment of a receiver, trustee or liquidator, shall be adjudicated insolvent, shall apply to the courts for protection from its creditors, file a voluntary petition in bankruptcy or take advantage of any insolvency law, or any action shall be taken by the BUILDER having an effect similar to any of the foregoing or the equivalent thereof in any jurisdiction;
|
- |
the filing of a petition or the making of an order or the passing of an effective resolution for the winding-up of the BUILDER or the placing of the BUILDER under court protection or the appointment of a receiver of the undertaking or property of the BUILDER or the insolvency of or the cessation of the carrying on of business by the BUILDER or any analogous proceedings;
|
- |
the BUILDER, without prior written consent of the BUYER, removes the VESSEL from the SHIPYARD or assigns, sub-lets or subcontracts performance of the whole or part of its
|
- |
the BUILDER sells or transfers title to the VESSEL to a third party or a ship owner except due to rescission of the CONTRACT by the BUYER's default; and/or
|
- |
if the Refund Guarantee ceases to be valid for whatever reason subject to the last paragraph of Article X 8. of this CONTRACT or the Refund Guarantor enters in to any insolvency or similar proceeding as defined herein.
|
4. |
EFFECT OF THE BUILDER'S DEFAULT
|
5. |
OTHER BUILDER'S DEFAULT
|
1. |
RESPONSIBILITY OF THE BUYER
|
(a) |
furnished the BUYER with the time schedule referred to above, two (2) months prior to installation of the BUYER'S SUPPLIES and
|
(b) |
given the BUYER written notice of any delay in delivery of the BUYER'S SUPPLIES and the necessary document or advice for such supplies as soon as the delay occurs which might give rise to a claim by the BUILDER under this Paragraph.
|
2. |
RESPONSIBILITY OF THE BUILDER
|
1. |
DECISION BY THE CLASSIFICATION SOCIETY
|
2. |
LAWS APPLICABLE
|
3. |
PROCEEDINGS OF ARBITRATION
|
4. |
EXPENSES
|
5. |
ENTRY IN COURT
|
6. |
ALTERATION OF DELIVERY DATE
|
1. |
TAXES
|
2. |
DUTIES
|
1. |
PATENTS, TRADEMARKS AND COPYRIGHTS
|
2. |
RIGHTS TO THE SPECIFICATIONS, PLANS AND ETC.
|
3. |
ACCESS TO INFORMATION
|
To the BUILDER
|
:
|
HYUNDAI SAMHO HEAVY INDUSTRIES CO., LTD
93, Daebul-Ro, Samho-Eup, Youngam-Gun, Jeollanam-Do, Korea
|
Attention:
|
Y.J.JI / General Manager, Contract Management
Tel : +82 61 460 2607
Facsimile: +82 61 460 3707
E-mail : yjji2000@hshi.co.kr
|
|
To the BUYER
|
:
|
South California Inc.
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro,
Marshall Islands, MH 96960
|
Attention :
|
Mr. Andreas M. Louka, Legal Advisor
Tel : +30 210 8128 320
Facsimile : +30 210 6141 272
E-mail :
legal@loukapartners.com
|
|
Attention :
|
Mr. Konstantinos Patis, Fleet Technical Manager
Tel : +30 210 8128242
Facsimile : +30 210 6141 276
E-mail : tec@centralmare.com
|
1. |
EXTENT OF INSURANCE COVERAGE
|
2. |
APPLICATION OF THE RECOVERED AMOUNT
|
(a) |
Partial Loss :
|
(b) |
Total Loss :
|
3. |
TERMINATION OF BUILDER'S OBLIGATION TO INSURE
|
1. |
REPRESENTATIONS OF THE PARTIES
|
(a) |
It will comply with the laws of any jurisdiction applicable to such party as it relates to this CONTRACT, including but not limited to any applicable anti-corruption and anti-bribery laws., also including, without limitation, the United States Foreign Corrupt Practices Act ("US FCPA"), the UK Bribery Act 2010 ("UK Bribery Act") and the anti-bribery or anti-corruption laws of Korea as such laws may be amended from time to time;
|
(b) |
In connection with this CONTRACT, it has not and will not make any payments or gifts or provide other advantages, or any offers or promises of payments or gifts or other advantages of any kind, directly or indirectly, to:
|
(i) |
any person or entity with the intention of obtaining or retaining a business advantage for itself or the other party to this CONTRACT;
|
(ii) |
any official or member of any government or any agency or instrumentality thereof; any official or member of any public international organisation or any agency or instrumentality thereof; any or official of a political party or any candidate for political office (herein 'public official'); or any person while knowing or reasonably suspecting that all or a portion of such money or thing of value will be offered, given or promised, directly or indirectly, to any public official, in violation of the UK Bribery Act, the US FCPA or the laws of Korea.
|
(c) |
In connection with this CONTRACT, it has not and will not request, agree to accept or accept from any person or entity any payments or gifts or other advantages, or any offers or promises of payments or gifts or other advantages of any kind, directly or indirectly, as a reward or inducement to perform its obligations under this CONTRACT in any way improperly.
|
(d) |
undertakes that it shall apply standards of business conduct which are consistent with the BUILDER's Business Partner Code of Conduct, found at
http://ethics.hhi.co.kr/html_eng/2_moral/sub_02.htm,
a hard copy of which is available on request.
|
2. |
INDEMNIFICATION
|
1. |
In consideration of the Buyer entering into the Contract with the Builder, we hereby issue our irrevocable letter of guarantee number
[]
(hereinafter referred to as the "
Guarantee
") (in favor of [
Name of the Buyer
] (herein referred to as the "
Buyer
" or "
you
") for the account of [
Name of the Builder
] (herein referred to as the "
Builder
") as follows in connection with the shipbuilding contract dated
[]
(herein referred to as the "Contract"), made by and between the Buyer and the Builder for the construction and sale of
[]
having Builder's Hull No.
[]
(hereinafter referred to as the "
Vessel
").
|
2. |
If in connection with the terms of the Contract, the Buyer shall become entitled to a refund of one or more of the advance payments made to the Builder prior to the delivery of the Vessel, we hereby irrevocably guarantee the repayment of the same to the Buyer after the Buyer's written demand together with interest thereon at the Agreed Interest Rate from the date following the date of receipt by the Builder to the date of remittance by telegraphic transfer of such refund.
|
3. |
This Guarantee is an undertaking to make the above payments against a written demand conforming with the requirements of this Guarantee and is independent from the Contract. Our obligation to make payment under this Guarantee will not be discharged by amendments to the Contract, disputes under the Contract or any invalidity of the Contract.
|
4. |
The amount of this Guarantee will be automatically increased upon the Builder's receipt of the respective further installments: each time by the amount of installment of:
|
(a) |
[]
U.S. Dollars (US$
[]
);
|
(b) |
[]
U.S. Dollars (US$
[]
)
|
(c) |
[]
U.S. Dollars (US$
[]
);
|
(d) |
[]
U.S. Dollars (US$
[]
);
|
(e) |
[]
U.S. Dollars (US$
[]
);
|
(f) |
[]
U.S. Dollars (US$
[]
);
|
(g) |
[]
U.S. Dollars (US$
[]
); and
|
(h) |
[]
U.S. Dollars (US$
[]
).
|
5. |
In case any refund is made to you by the Builder or by us under this Guarantee, our liability hereunder shall be automatically reduced to reflect the remaining amount due (plus interest).
|
6. |
For the purposes of this Guarantee,
"Agreed Interest Rate"
means four percent (4%) per annum provided that in the event of cancellation of the Contract. as a result of delays due to Force Majeure (as defined in the Contract) or other causes beyond the control of the Builder or in the case of total loss of the Vessel, the interest rate shall be reduced to three per cent (3%) per annum as provided in Article X of the Contract.
|
7. |
This Guarantee is payable against our simple receipt of a signed statement from you certifying that Buyer's demand for refund has been made in conformity with the Contract and the Builder has failed to make the refund within 30 days after your demand to the Builder. Any notice, claim or demand to be given or made by you under this Guarantee may be served on us either by post or by tested telex or by authorized SWIFT or equivalent as follows:
|
8. |
Refund shall be made to you by telegraphic transfer (net of bank charges) in United States Dollars within 30 days from the receipt of your demand. All payments under this Guarantee shall be made without deduction or withholding for or on account of
|
9. |
This Guarantee shall expire and become null and void upon the earliest of:
|
(a) |
receipt by the Buyer of the sum guaranteed hereby;
|
(b) |
acceptance by the Buyer of the delivery of the Vessel; or
|
(c) |
rescission or termination of the Contract due to the Buyer's default in accordance with the Contract provided that such default has been admitted in writing by the Buyer or has been established by a final and unappealable Award by a London arbitration tribunal duly appointed under the Contract, or a Judgment of the High Court of Justice in London.
|
10. |
Notwithstanding any provision herein, in the event that within 30 days from the date of your demand to the Builder referred to above, we receive notification from you or the Builder accompanied by written confirmation by an arbitrator to the effect that your claim to cancel the Contract or your claim for refund thereunder has been disputed and referred to arbitration in accordance with the Contract, we shall under this Guarantee refund to you the sum (not exceeding
[]
U.S. Dollars
(US$
[]
)
plus interest by the same manner hereinabove) due to you from the Builder pursuant to the award made under such arbitration (or any judgment on appeal therefrom) immediately upon receipt from you of the demand for payment of the sum and a copy of the award (or any judgment on appeal therefrom).
|
11. |
This Guarantee may be assigned or transferred by the BUYER with prior written notice to us. A person who is not a party to this Guarantee has no rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Guarantee.
|
12. |
This Guarantee shall be governed by and construed in accordance with the laws of England and any dispute arising under or in connection with this guarantee shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory modification thereof as currently in force before three arbitrators, with one to be appointed by each party and the third to be appointed by the two party appointed arbitrators..
|
13. |
We hereby warrant that we are permitted by any relevant law to which we are subject (including, where relevant, the laws of the place or places of each of our incorporation, establishment, regulation, registration and residence) to (i) issue a guarantee in this
|
Hyundai Samho Heavy Industries Co., Ltd.
93, Daebul-Ro, Samho-Eup, Yeongam-Gun,
Jeollanam-Do
|
|
Korea
|
Date : , 2018
|
Very truly yours,
For and on behalf of
By
Name : Title : |
For and on behalf of
|
For and on behalf of
|
||||
The BUYER
|
The BUILDER
|
||||
/s/ Evangelos J. Pistiolis
|
/s/ Sam H. Ka
|
||||
Name:
|
Evangelos J. Pistiolis
|
Name:
|
Sam H. Ka
|
||
Title:
|
Attorney-in-Fact
|
Title:
|
Attorney-in-Fact
|
WITNESS
|
WITNESS
|
||||
/s/ Andreas Louka
|
/s/ Euisung Yoon
|
||||
Name:
|
Andreas Louka
|
Name:
|
Euisung Yoon
|
PREAMBLE
|
3
|
||
ARTICLE
|
I
|
: DESCRIPTION AND CLASS
|
4
|
II
|
: CONTRACT PRICE
|
7
|
|
III
|
: ADJUSTMENT OF THE CONTRACT PRICE
|
8
|
|
IV
|
: INSPECTION AND APPROVAL
|
12
|
|
V
|
: MODIFICATIONS, CHANGES AND EXTRAS
|
18
|
|
VI
|
: TRIALS AND COMPLETION
|
21
|
|
VII
|
: DELIVERY
|
25
|
|
VIII
|
: DELAYS AND EXTENSIONS OF TIME (FORCE MAJEURE)
|
29
|
|
IX
|
: WARRANTY OF QUALITY
|
32
|
|
X
|
: PAYMENT AND RESCISSION BY THE BUYER
|
36
|
|
XI
|
: BUYER'S AND BUILDERS DEFAULT
|
43
|
|
XII
|
: BUYER'S SUPPLIES
|
47
|
|
XIII
|
: ARBITRATION
|
49
|
|
XIV
|
: SUCCESSORS AND ASSIGNS
|
51
|
|
XV
|
: TAXES AND DUTIES
|
52
|
|
XVI
|
: PATENTS, TRADEMARKS AND COPYRIGHTS
|
53
|
|
XVII
|
: INTERPRETATION AND GOVERNING LAW
|
55
|
|
XVIII
|
: NOTICE
|
56
|
|
XIX
|
: EFFECTIVENESS OF THIS CONTRACT
|
58
|
|
XX
|
: EXCLUSIVENESS
|
59
|
|
XXI
|
: INSURANCE
|
60
|
|
XXII
|
: COMPLIANCE AND ANTI-BRIBERY
|
62
|
|
EXHIBIT "A" LETTER OF GUARANTEE
|
65
|
||
EXHIBIT "B" PERFORMANCE GUARANTEE
|
69
|
1. |
DESCRIPTION
|
2. |
BASIC DIMENSIONS AND PRINCIPAL PARTICULARS OF THE VESSEL
|
(a) |
The basic dimensions and principal particulars of the VESSEL shall be :
|
Length, overall
Length, between perpendiculars
Breadth, moulded
Depth, moulded
Design draught, moulded
Scantling draught, moulded
|
abt. 277m
272m
48m
23.2m
16m
17.15m
|
Main Engine
|
:
|
HYUNDAI-MAN B&W 6G7OME-C9.5
Nominal Rating : 21,840 kW x 83 RPM
Engine Optimization : Low load exhaust gas bypass
MCR : 16,330 kW x 73 RPM
NCR : 10,400 kW x 62.8 RPM
|
|
Deadweight, guaranteed
|
:
|
abt. 157,275 metric tons at the Scantling draught of 17.15 meters on even keel in sea water of specific gravity of 1.025.
|
Speed, guaranteed
|
:
|
14.5 knots at the design draught of 16 meters at the condition of clean bottom and in calm and deep sea with main engine output of 10,400 kW with 15% sea margin.
|
|
Fuel Consumption, guaranteed
|
:
|
154.4 grams/kW-hour using marine diesel oil having lower calorific value of 42,700 kJ/kg at NCR measured at the shop trial with I.S.O reference conditions.
|
(b) |
The dimensions may be slightly modified by the BUILDER, who also reserves the right to make changes to the SPECIFICATIONS and the PLAN if found necessary to suit the local conditions and facilities of the SHIPYARD, the availability of materials and equipment, the introduction of improved production methods or otherwise, subject to the approval of the BUYER which the BUYER shall not withhold unreasonably, and the approval of the CLASSIFICATION SOCIETY.
|
3. |
CLASSIFICATION, RULES AND REGULATIONS
|
(a) |
The VESSEL, including its machinery, equipment and outfitting shall be constructed in accordance with the BUILDER's quality standard and shipbuilding practices.
|
(b) |
The BUILDER shall arrange with the CLASSIFICATION SOCIETY for the assignment by the CLASSIFICATION SOCIETY of representative(s) to the VESSEL during construction. All fees and charges incidental to classification of the VESSEL in compliance with the above specified rules, regulations and requirements of this
|
(c) |
The decision of the CLASSIFICATION SOCIETY as to whether the VESSEL complies with the regulations of the CLASSIFICATION SOCIETY shall be final and binding upon the BUILDER and the BUYER. For the avoidance of doubt such decision shall only be final and binding in so far as compliance with the regulations of the CLASSIFICATION SOCIETY and shall have no wider application, including as to whether the VESSEL has been designed, constructed, equipped and completed in accordance with all terms of this CONTRACT.
|
(d) |
The facilities, labour and materials necessary for the safe and convenient conduct of any inspection by the CLASSIFICATION SOCIETY shall be furnished by the BUILDER All major plans shall be subject to approval, inspection and test by the CLASSIFICATION SOCIETY in accordance with the rules and regulations of the CLASSIFICATION SOCIETY.
|
4. |
SUBCONTRACTING
|
5. |
NATIONALITY OF THE VESSEL
|
1. |
DELAYED DELIVERY
|
(a) |
No adjustment shall be made and the CONTRACT PRICE shall remain unchanged for the first thirty (30) days of the delay in delivery of the VESSEL [ending as of 12 o'clock midnight Korean Standard Time on the thirtieth (30th) day of delay] beyond the Delivery Date calculated as provided in Article VII.1. hereof.
|
(b) |
If delivery of the VESSEL is delayed more than thirty (30) days beyond the date upon which the delivery is due from the BUILDER under the terms of this CONTRACT, then, beginning at midnight of the thirtieth (30th) day after such due date, the CONTRACT PRICE of the VESSEL shall be reduced by U.S. Dollars Fifteen Thousand (US$ 15,000)for each full day of delay shall not exceed the amount due to cover the delay of one hundred and sixty five (165) days after thirty (30) days of the delay in delivery of the VESSEL at the rate of deduction as specified hereinabove.
|
(c) |
But, if the delay in delivery of the VESSEL continues for a period of more than one hundred and ninety five days (195) days beyond the date upon which the delivery is due from the BUILDER under the terms of this CONTRACT then, in such event, and after such period has expired, the BUYER may, at its option, cancel this CONTRACT by serving upon the BUILDER a notice of cancellation in writing or by e-mail or facsimile directed to the BUILDER at the address given in this CONTRACT, and the provisions of Article X.5 shall apply. Such cancellation shall be effective as of the date the notice thereof is received by the BUILDER. If the BUYER has not served the notice of cancellation after the aforementioned one hundred and ninety five days (195) days delay in delivery, the BUILDER may demand the BUYER to make an election in accordance with Article VIll.3. hereof.
|
(d) |
For the purpose of this Article, the delivery of the VESSEL shall be deemed to be delayed when and if the VESSEL, after taking into full account extension of the Delivery Date or permissible delays as provided in Article V, VI, VIII, XI or elsewhere in this CONTRACT, is delivered beyond or before the date upon which delivery would then be due under the terms of this CONTRACT.
|
2. |
INSUFFICIENT SPEED
|
(a) |
The CONTRACT PRICE of the VESSEL shall not be affected or changed, if the actual speed, as determined by trial runs more fully described in Article VI hereof, is less than the guaranteed speed as defined in Article I paragraph 2 hereof, provided such deficiency in actual speed is not more than three-tenths (3/10) of a knot below the guaranteed speed.
|
(b) |
However, as for the deficiency of more than three-tenths (3/10) of a knot in actual speed below the guaranteed speed, the CONTRACT PRICE shall be reduced by U.S. Dollars Forty Thousand (US$ 40,000) for each full one-tenth (1/10) of a knot in excess of the said three-tenths (3/10) of a knot of deficiency in speed [fractions of less than one-tenth (1/10) of a knot shall be regarded as a full one-tenth (1/10) of a knot]. However, unless the parties agree otherwise, the total amount of reduction from the CONTRACT PRICE shall not exceed the amount due to cover the deficiency of eight-tenths(8/10) full knot below the guaranteed speed at the rate of reduction as specified above.
|
(c) |
If the deficiency in actual speed of the VESSEL is more than eight-tenths (8/10) of a full knot below the guaranteed speed, then the BUYER, at its option, may, subject to the BUILDER's right to effect alterations or corrections as provided in Article VI.5. hereof, cancel this CONTRACT by the BUYER sending a notice of cancellation to the BUILDER in writing or by email or facsimile, and the provisions of Article X.5 shall apply, or may accept the VESSEL at a reduction in the CONTRACT PRICE as above provided for eight-tenths (8/10) full knot of deficiency only.
|
3. |
EXCESSIVE FUEL CONSUMPTION
|
(a) |
The CONTRACT PRICE of the VESSEL shall not be affected or changed by reason of the fuel consumption of the VESSEL's main engine, as determined by the engine manufacturer's shop trial as per the SPECIFICATIONS being more than the guaranteed fuel consumption of the VESSEL's main engine as defined in Article I paragraph 2 hereof, if such excess is not more than seven per cent (7%) over the guaranteed fuel consumption.
|
(b) |
However, as for the excess of more than seven percent (7%) in the actual fuel consumption over the guaranteed fuel consumption of the VESSEL's main engine, the CONTRACT PRICE shall be reduced by U.S. Dollars Fifty Thousand (US$ 50,000) for
|
(c) |
If such actual fuel consumption exceeds the guaranteed fuel consumption of the VESSEL's main engine by more than ten percent (10%), the BUYER, at its option, may, subject to the BUILDER's right to effect alterations or corrections as specified in Article VI. 5. hereof, reject the main engine or require rectification thereof to the BUYER's complete satisfaction. If the BUILDER is unable to comply with the BUYER's request as aforesaid or if the BUYER elects to reject the main engine then the BUYER may cancel this CONTRACT by the BUYER sending a notice of cancellation to the BUILDER in writing or by email or facsimile, and the provisions of Article X.5 shall apply, or may accept the VESSEL at a reduction in the CONTRACT PRICE as above provided for the ten percent (10%) increase only.
|
4. |
DEADWEIGHT BELOW CONTRACT REQUIREMENTS
|
(a) |
The CONTRACT PRICE of the VESSEL shall not be affected or changed, if the actual deadweight determined as provided in this CONTRACT and the SPECIFICATIONS, is below the guaranteed deadweight as defined in Article I paragraph 2 hereof by one point five per cent (1.5%) of the guaranteed deadweight or less.
|
(b) |
However, should the deficiency in the actual deadweight of the VESSEL be more than one point five per cent (1.5%) of the guaranteed deadweight (disregarding fractions of less than one (1) metric ton), the CONTRACT PRICE shall be reduced by the sum of U.S. Dollars Five Hundred (US$ 500)for each one (1) metric ton deficiency (disregarding fractions of less than one (1) metric ton) in excess of the said one point five per cent (1.5%) of deficiency.
|
(c) |
In the event of such deficiency in the deadweight of the VESSEL being more than four per cent (4%) of the guaranteed deadweight, the BUYER, at its option, may, subject to the BUILDER's right to effect alterations or corrections as specified in Article VI. 5. hereof, cancel this CONTRACT by the BUYER sending a notice of cancellation to the BUILDER in writing or by email or facsimile, and the provisions of Article X.5 shall apply, or accept the VESSEL at a reduction in the CONTRACT PRICE as above
|
5. |
EFFECT OF CANCELLATION
|
6. |
CUMULATIVE EFFECT OF LIQUIDATED DAMAGES
|
1. |
APPOINTMENT OF BUYER'S REPRESENTATIVE
|
2. |
AUTHORITY OF THE BUYER'S REPRESENTATIVE
|
3. |
APPROVAL OF DRAWINGS
|
(a) |
The BUILDER shall submit to the BUYER three (3) copies of each of the plans and
|
(b) |
When and if the BUYER'S REPRESENTATIVE shall have been sent by the BUYER to the SHIPYARD in accordance with Paragraph 1 of this Article, the BUILDER may submit the remainder, if any, of the plans and drawings in the agreed list, to the BUYER'S REPRESENTATIVE for his approval, unless otherwise agreed upon between the parties hereto.
|
(c) |
In the event that the BUYER or the BUYER'S REPRESENTATIVE shall fail to return the plans and drawings to the BUILDER within the time limit as hereinabove provided, such plans and drawings shall be deemed to have been automatically approved without any comment. In the event the plans and drawings submitted by the BUILDER to the BUYER or the BUYER'S REPRESENTATIVE in accordance with this Article do not meet with the BUYER's or the BUYER'S REPRESENTATIVE's approval and the parties cannot reach agreement between them, the matter may be submitted by either party hereto for determination pursuant to Article XIII hereof. If the BUYER's comments on the plans and drawings that are returned to the BUILDER by the BUYER within the said time limit are not clearly specified or detailed, the BUILDER shall seek clarification from the BUYER prior to implementing them which clarification must be provided in writing by the BUYER within seven (7) days of such request from the BUILDER. If the BUYER shall fail to provide the BUILDER with such clarification within the said time limit, then the BUILDER shall be entitled to place its own interpretation on such comments in implementing them.
|
(d) |
The BUYER or the BUYER'S REPRESENTATIVE shall have the right to take photographs of the VESSEL, its materials, her engines, her machinery, equipment and components throughout the construction period of the VESSEL subject to the BUILDER's prior consent, which is not to be unreasonably withheld.
|
4. |
SALARIES AND EXPENSES
|
5. |
RESPONSIBILITY OF THE BUILDER
|
(a) |
The BUILDER shall provide the BUYER'S REPRESENTATIVE and his assistants free of charge with suitably furnished office space at, or in the immediate vicinity of, the SHIPYARD together with telephone, high speed broadband internet access, e-mail, facsimile, air conditioning, access to photocopy machine without charge, lavatory facilities and such other reasonable facilities as may be necessary to enable the BUYER'S REPRESENTATIVE and his assistants to carry out their work under this CONTRACT. However, the BUYER shall pay for the communication charges of the telephone, broadband internet, e-mail or facsimile facilities used by the BUYER'S REPRESENTATIVE or his assistants.
|
(b) |
The BUYER'S REPRESENTATIVE and his assistants shall at all times remain the employees of the BUYER. The BUILDER shall not be liable to the BUYER or the BUYER'S REPRESENTATIVE or to his assistants or to the BUYER's employees or agents for personal injuries, including death, during the time they, or any of them, are on the VESSEL, or within the premises of either the BUILDER or its sub-contractors, or are otherwise engaged in and about the construction of the VESSEL, unless, however, such personal injuries, including death, are caused by the negligence of the BUILDER, its sub-contractors, or its or their employees or agents. The BUILDER shall not be liable to the BUYER for damages to, or destruction of property of the BUYER or of the BUYER'S REPRESENTATIVE or his assistants or the BUYER's employees or agents, unless such damages, loss or destruction is caused by the negligence of the BUILDER, its sub-contractors, or its or their employees or agents.
|
6. |
RESPONSIBILITY OF THE BUYER
|
1. |
HOW EFFECTED
|
2. |
SUBSTITUTION OF MATERIAL
|
3. |
CHANGES IN RULES AND REGULATIONS
|
(a) |
any increase or decrease in the CONTRACT PRICE of the VESSEL that is occasioned by such compliance;
|
(b) |
any extension or advancement in the Delivery Date of the VESSEL that is occasioned by such compliance;
|
(c) |
any increase or decrease in the deadweight and/or cubic capacity of the VESSEL, if such compliance results in any increase or reduction in the deadweight and/or cubic capacity ;
|
(d) |
adjustment of the speed requirements if such compliance results in any increase or reduction in the speed ; and
|
(e) |
any other alterations in the terms of this CONTRACT or of the SPECIFICATIONS or the PLAN or both, if such compliance makes such alterations of the terms necessary.
|
1. |
NOTICE
|
2. |
WEATHER CONDITION
|
3. |
HOW CONDUCTED
|
4. |
CONSUMABLE STORES
|
5. |
ACCEPTANCE OR REJECTION
|
(a) |
The BUILDER shall as soon as possible following the completion of the trials of the VESSEL deliver to the BUYER a detailed report setting out the results of the trials and an analysis of such results and confirmation that the BUILDER considers that the results of the trial run indicate that the VESSEL is in all respects in conformity with this CONTRACT and the SPECIFICATIONS and the PLAN. The BUYER shall within seven (7) days after receipt of such report, notify the BUILDER in writing of its acceptance of the VESSEL, or of its rejection of the VESSEL, or of the details in respect of which the VESSEL does not conform to the SPECIFICATIONS and the PLAN or this CONTRACT.
|
(b) |
If, during any sea trial, any breakdown occurs entailing interruption or irregular performance which can be repaired on board, the trial shall be continued after such repairs and be valid in all respects, provided the BUYER and the CLASSIFICATION SOCIETY agrees on the extent of such repairs being carried out
|
(c) |
However, if, during or after the trial run, it becomes apparent that the VESSEL or any part of her machinery or equipment does not conform to the requirements of the CONTRACT, the PLAN and/or the SPECIFICATIONS, the BUILDER shall correct such non-conformity and perform such tests and/or trials as are necessary to confirm conformity to the CONTRACT, the PLAN and/or the SPECIFICATIONS.
|
(d) |
Save as above provided, The BUYER shall, within three (3) days after completion of the trial run and the receipt of all records of tests and trials carried out on that trial run, notify the BUILDER in writing or by e-mail or facsimile confirmed in writing of
|
(e) |
However, the BUYER shall not be entitled to reject the VESSEL by reason of any minor or insubstantial items judged from the point of view of standard shipbuilding and shipping practice as not being in conformity with the SPECIFICATIONS, but, in that case, the BUILDER shall not be released from the obligation to correct and/or remedy such minor or insubstantial items as soon as practicable after the delivery of the VESSEL.
|
(f) |
If inconvenient for the VESSEL to have any non-conformities with the CONTRACT, the PLAN and/or the SPECIFICATIONS corrected and/or remedied at the SHIPYARD, the BUILDER may, at the BUYER's option, arrange to have the corrections or remedies carried out elsewhere, and may, if practicable and at the BUYER's option, do such work while the VESSEL is sailing. The BUYER may in its absolute discretion, if proposed by the BUILDER, decide to accept a payment from the BUILDER in lieu of such items being corrected and/or remedied, which payment in lieu shall first be agreed between the BUILDER and the BUYER.
|
6. |
EFFECT OF ACCEPTANCE
|
1. |
TIME AND PLACE
|
2. |
WHEN AND HOW EFFECTED
|
3. |
DOCUMENTS TO BE DELIVERED TO THE BUYER
|
(a) |
PROTOCOL OF TRIALS of the VESSEL made pursuant to this CONTRACT and the SPECIFICATIONS,
|
(b) |
PROTOCOL OF INVENTORY of the equipment of the VESSEL, including spare parts, all as specified in the SPECIFICATIONS,
|
(e) |
PROTOCOL OF CONSUMABLE NATURE, such as all fuel oil and fresh water remaining in tanks if its cost is charged to the BUYER under Article VI. 4. hereof,
|
(d) |
DRAWING AND PLANS pertaining to the VESSEL as stipulated in the SPECIFICATIONS, which shall be furnished to the BUYER at no additional cost,
|
(e) |
ALL CERTIFICATES required to be furnished upon delivery of the VESSEL pursuant to this CONTRACT, the SPECIFICATIONS and the customary shipbuilding practice, including
|
(i) |
Classification Certificate
|
(ii) | Safety Construction Certificate (Hi) | Safety Equipment Certificate |
(iv) |
Safety Radiotelegraphy Certificate
|
(v) |
International Loadline Certificate
|
(vi) |
International Tonnage Certificate
|
(vii) |
BUILDER's Certificate
|
(viii) |
Ship Sanitation Control Exemption Certificate
|
(f) |
DECLARATION OF WARRANTY of the BUILDER that the VESSEL is delivered to the BUYER free and clear of any liens, claims, charges, mortgages, or other encumbrances upon the BUYER's title thereto, and in particular, that the VESSEL is absolutely free of all burdens in the nature of imposts, taxes, or charges imposed by the prefecture or country of the port of delivery, as well as of all liabilities of the BUILDER to its sub-contractors and employees and of all liabilities arising from the operation of the VESSEL in trial runs, or otherwise, prior to delivery except as otherwise provided under this CONTRACT.
|
(g) |
BUILDER'S CERTIFICATE
|
(h) |
CERTIFICATE OF NON-REGISTRATION
|
(i) |
COMMERCIAL INVOICES covering the last instalment and modifications.
|
(j) |
BILL OF SALE or other document that certifies that the title of the VESSEL passes to the BUYER.
|
(k) |
Such other documents as the BUYER may reasonably require in connection with the registration of the VESSEL, which shall be agreed at least twenty eight (28) days prior to the DELIVERY DATE.
|
4. |
TENDER OF THE VESSEL
|
5. |
TITLE AND RISK
|
6. |
REMOVAL OF THE VESSEL
|
1. |
CAUSES OF DELAY
|
2. |
NOTICE OF DELAYS
|
3. |
RIGHT TO CANCEL FOR EXCESSIVE DELAY
|
(a) |
Such future date shall become the contractual delivery date for the purposes of this CONTRACT but this new date shall not be subject to any further extension by reason of permissible delays as herein provided, and
|
(b) |
If the VESSEL is not delivered by such revised contractual delivery date, the BUYER shall have the same right to liquidated damages and rights of cancellation upon the
|
4. |
DEFINITION OF PERMISSIBLE DELAYS
|
1. |
GUARANTEE
|
2. |
NOTICE OF DEFECTS
|
3. |
REMEDY OF DEFECTS
|
(a) |
The HGS on behalf of BUILDER shall remedy, at its expense, any DEFECT against which the VESSEL is guaranteed under this Article, by making all necessary repairs or replacements at the SHIPYARD or elsewhere as provided for in (b) hereinbelow.
|
(b) |
However, if it is impractical to bring the VESSEL to the SHIPYARD, the BUYER may cause the necessary repairs or replacements to be made elsewhere which is deemed suitable for the purpose, provided that, in such event, the BUILDER and the HGS may forward or supply replacement parts or materials to the VESSEL, unless forwarding or supplying thereof to the VESSEL would impair or delay the operation or working schedule of the VESSEL. In the event that the BUILDER and the HGS proposes to cause the necessary repairs or replacements to be made to the VESSEL at any other shipyard or works than the SHIPYARD, the BUYER shall first, but in all events as soon as possible, give the BUILDER and the HGS notice in writing or by e-mail or facsimile of the time and place such repairs will be made, and if the VESSEL is not thereby delayed, or her operation or working schedule is not thereby impaired, the BUILDER and the HGS shall have the right to verify by its own representative(s) the nature and extent of the DEFECTS complained of. The BUILDER and the HGS shall in such case, promptly advise the BUYER in writing or by e-mail or facsimile, after such examination has been completed, of its acceptance or rejection of the DEFECTS as ones that are covered by the guarantee herein provided. Upon the BUILDER and the HGS's acceptance of the DEFECTS as justifying remedy under this Article, or upon the award of the arbitration tribunal so determining, the HGS on behalf of BUILDER shall pay to the BUYER for such repairs or replacements a sum equal to the actual direct cost of the repairs or replacements, as evidenced by the final invoices of the relevant shipyard/repairer or supplier., however, the amount of the HGS's payment to the BUYER for such repairs or replacements shall not exceed the average cost quoted by one reputable repair yard in Singapore and one reputable repair yard in China.
|
(c) |
In any case, the VESSEL shall be taken at the BUYER's costs and responsibility to the place elected, ready in all respects for such repairs or replacements and in any event, the BUILDER and the HGS shall not be responsible for towage, dockage, wharfage, port charges or any other cost or expenses whatsoever incurred by the BUYER in getting and keeping the VESSEL ready for such repairs or replacements.
|
(d) |
In the event that it is necessary for the BUILDER and the HGS to forward a replacement for a defective part under this guarantee, replacement parts shall be shipped to the BUYER under the terms of F.O.B. from the port of the country where they are to be purchased.
|
(e) |
The BUILDER and the HGS reserve the option to retrieve, at the BUILDER and the HGS's cost, any of the replaced equipment/parts in case DEFECTS are remedied in accordance with the provisions in this Article.
|
(f) |
The BUILDER and the HGS will have to respond to the Buyer for any DEFECT notice within seven (7) days advising their intentions. The BUILDER and the HGS will have to replace any equipment/parts/system for which the equipment/part/system is not available due to the maker bankruptcy or the maker failure to respond within three (3) months.
|
(f) |
Any dispute under this article shall be referred to arbitration in accordance with the provisions of Article XIII hereof.
|
4. |
EXTENT OF BUILDER'S RESPONSIBILITY
|
(a) |
After delivery of the VESSEL the BUILDER and the HGS shall have no responsibility for any other DEFECTS whatsoever in the VESSEL than the DEFECTS specified in paragraph 1 of this Article, unless such defect was caused or occasioned by the negligence of the BUILDER and the HGS, its subcontractors or their respective employees within the Guarantee Period. The BUILDER and the HGS shall have no liability whatsoever in any circumstances whatsoever to the BUYER or to any third party for anything except the cost of repairing the DEFECT itself. The BUILDER and the HGS shall not in any circumstances be responsible or liable for any consequential or special losses, damages or expenses including, but not limited to, loss of time, loss of profit or earning or demurrage directly or indirectly occasioned to the BUYER or any third party by reason of the DEFECTS specified in paragraph 1 of this Article or due to repairs or other works done to the VESSEL to remedy such DEFECTS. After delivery, the BUYER shall hold the BUILDER and the HGS harmless and indemnify the BUILDER and the HGS against any claim from the BUYER or any third party whatsoever in respect of any such matters and in respect of any other claims relating to the VESSEL for which the BUILDER and the HGS do not expressly give a warranty to the BUYER under this Article.
|
(b) |
The BUILDER and the HGS shall not be responsible for any DEFECTS in any part of the VESSEL which may subsequent to delivery of the VESSEL have been replaced or in any way repaired by any other contractor, or for any DEFECTS which have been caused or aggravated by omission or improper use and maintenance of the VESSEL on the part of the BUYER, its servants or agents or by ordinary wear and tear or by any other circumstances beyond the control of the BUILDER and the HGS.
|
(c) |
The guarantee contained as hereinabove in this Article replaces and excludes any other
|
5. |
ASSIGNMENT OF SUPPLIER'S GUARANTEES
|
1. |
CURRENCY
|
2. |
TERMS OF PAYMENT
|
(b) |
Second Instalment
|
(c) |
Third Instalment
|
(d) |
Fourth Instalment
|
(e) |
Fifth Instalment
|
(f) |
Sixth Instalment
|
(g) |
Seventh Instalment
|
(h) |
Eighth Instalment
|
(i) |
Ninth Instalment
|
3. |
DEMAND FOR PAYMENT
|
4. |
METHOD OF PAYMENT
|
(a) |
All the pre-delivery payments and the payment due on delivery in settlement of the CONTRACT PRICE as provided for in Paragraph 2 of this Article shall be made in U.S. Dollars on or before the DUE DATE thereof by telegraphic transfer as follows;
|
(i) |
The payment of the first, second, third, fourth, fifth, sixth, seventh and eighth instalments shall be made to the account of the BUILDER at an international bank which will be confirmed after signing the CONTRACT (hereinafter called the "BUILDER'S BANK") or the account of the BUILDER with any other bank in favor of the BUILDER, as designated and notified by the BUILDER to the BUYER at least three (3) business days prior to the DUE DATE.
|
(ii) |
The ninth instalment as provided for in Paragraph 2.(h) of this Article shall be deposited at the account of the BUILDER'S BANK or, if the BUILDER requires, at the account of the BUILDER with any other bank in favor or the BUILDER, as designated and notified by the BUILDER, in an account in the name of the BUYER by telegraphic transfer remittance at least three (3) business days prior to the scheduled delivery date of the
|
(b) |
Simultaneously with each of such payments, the BUYER shall advise the BUILDER of the details of the payments by e-mail or facsimile and at the same time, the BUYER shall cause the BUYER's remitting Bank to advise the BUILDER'S BANK or any other bank, Seoul, Korea as the case may be, of the details of such payments by authenticated bank cable or telex.
|
5. |
REFUND BY THE BUILDER
|
6. |
TOTAL LOSS
|
(a) |
to build another vessel in place of the VESSEL so lost and deliver it under this CONTRACT to the BUYER, provided that the parties hereto shall have agreed in writing to a reasonable cost and time for the construction of such vessel in place of the lost VESSEL, and in which case, any amounts recovered under the insurance referred to in Article XXI will be applied to the construction of the VESSEL; or
|
(b) |
to refund to the BUYER the full amount of the total sums paid by the BUYER to the BUILDER under the provisions of Paragraph 2 of this Article together with interest thereon at the rate of Three per cent (3%) per annum from the date following the date of receipt by the BUILDER of such pre-delivery instalment(s) to the date of payment by the BUILDER to the BUYER of the refund, and to pay to the BUYER the invoiced cost to the BUYER of all BUYER's Supplies which were incorporated into the
|
7. |
DISCHARGE OF OBLIGATIONS
|
8. |
REFUND GUARANTEE
|
9. |
PERFORMANCE GUARANTEE
|
1. |
DEFINITION OF BUYER'S DEFAULT
|
(a) |
If the first, second, third, fourth, fifth, sixth, seventh and eighth instalment is not paid to the BUILDER within respective DUE DATE of such instalments; or
|
(b) |
If the ninth instalment is not deposited in accordance with Article X.4.(a)(ii) hereof or if the said ninth instalment deposit is not released to the BUILDER against presentation by the BUILDER of a copy of the original PROTOCOL OF DELIVERY AND ACCEPTANCE; or
|
(c) |
If the BUYER fails to take delivery of the VESSEL within five (5) days when the VESSEL is duly tendered for delivery by the BUILDER under the provisions of Article VII hereof; or
|
(d) |
If an order or an effective resolution shall be passed for winding up of the BUYER (except for the purpose of reorganization, merger or amalgamation).
|
2. |
EFFECT OF THE BUYER'S DEFAULT ON OR BEFORE THE DELIVERY OF THE VESSEL
|
(a) |
The DELIVERY DATE of the VESSEL shall be extended automatically for the actual period of such default to the extent that such default has actually delayed the construction of the VESSEL and the BUILDER shall not be obliged to pay any liquidated damages for the delay in delivery of the VESSEL actually caused thereby.
|
(b) |
The BUYER shall pay to the BUILDER interest at the rate of Four percent (4%) per annum in respect of the instalment(s) in default from the respective DUE DATE to the date of actual receipt by the BUILDER of the full amount of such instalment(s).
|
(c) |
If the BUYER is in default in payment of any of the instalment(s) due and payable prior to or simultaneously with the delivery of the VESSEL, the BUILDER shall, in
|
(d) |
If any of the BUYER's default continues for a period of fourteen (14) days after the BUILDER's notification to the BUYER of such default, the BUILDER may, at its option, rescind this CONTRACT by serving upon the BUYER a written notice or e-mail or facsimile notice of rescission confirmed in writing.
|
(e) |
In the event of such cancellation by the BUILDER of this CONTRACT due to the BUYER's default as provided for in paragraph 1 above, the BUILDER shall be entitled to retain and apply the instalments already paid by the BUYER to the recovery of the BUILDER's loss and damage due to the BUYER's default and the cancellation of this CONTRACT and at the same time the BUILDER shall have the full right and power either to complete or not to complete the VESSEL which is the sole property of the BUILDER as it deems fit, and to sell the VESSEL in its complete or incomplete state at a public or private sale on such terms and conditions as the BUILDER thinks fit without being answerable for any loss or damage but at the true market price in the prevailing market conditions.
|
(f) |
In no event shall the BUYER's total liability in the event of the BUILDER rescinding this CONTRACT exceed one hundred and five percent (105%) of the CONTRACT PRICE.
|
3. |
DEFINITION OF BUILDER'S DEFAULT
|
- |
if the BUILDER, without reasonable excuse, intentionally delays in the commencement of steel cutting, keel laying and launching of the VESSEL in accordance with the latest milestone event notice informed to the BUYER for a period of sixty five (65) days or more and the BUILDER has not rectified the same within fourteen (14) days of being notified by the BUYER of such delay. However, in any case, the BUILDER reserves its full rights to change the milestone events in accordance with the BUILD ER's production planning.
|
- |
if the BUILDER shall apply for or consent to the appointment of a receiver, trustee or liquidator, shall be adjudicated insolvent, shall apply to the courts for protection from its creditors, file a voluntary petition in bankruptcy or take advantage of any insolvency law, or any action shall be taken by the BUILDER having an effect similar to any of the foregoing or the equivalent thereof in any jurisdiction;
|
- |
the filing of a petition or the making of an order or the passing of an effective resolution for the winding-up of the BUILDER or the placing of the BUILDER under court protection or the appointment of a receiver of the undertaking or property of the BUILDER or the insolvency of or the cessation of the carrying on of business by the BUILDER or any analogous proceedings;
|
- |
the BUILDER, without prior written consent of the BUYER, removes the VESSEL from the SHIPYARD or assigns, sub-lets or subcontracts performance of the whole or part of its
|
- |
the BUILDER sells or transfers title to the VESSEL to a third party or a ship owner except due to rescission of the CONTRACT by the BUYER's default; and/or - if the Refund Guarantee ceases to be valid for whatever reason subject to the last paragraph of Article X 8. of this CONTRACT or the Refund Guarantor enters in to any insolvency or similar proceeding as defined herein.
|
4. |
EFFECT OF THE BUILDER'S DEFAULT
|
5. |
OTHER BUILDER'S DEFAULT
|
1. |
RESPONSIBILITY OF THE BUYER
|
(a) |
furnished the BUYER with the time schedule referred to above, two (2) months prior to installation of the BUYER'S SUPPLIES and
|
(b) |
given the BUYER written notice of any delay in delivery of the BUYER'S SUPPLIES and the necessary document or advice for such supplies as soon as the delay occurs which might give rise to a claim by the BUILDER under this Paragraph.
|
2. |
RESPONSIBILITY OF THE BUILDER
|
1. |
DECISION BY THE CLASSIFICATION SOCIETY
|
2. |
LAWS APPLICABLE
|
3. |
PROCEEDINGS OF ARBITRATION
|
4. |
EXPENSES
|
5. |
ENTRY IN COURT
|
6. |
ALTERATION OF DELIVERY DATE
|
1. |
TAXES
|
2. |
DUTIES
|
1. |
PATENTS, TRADEMARKS AND COPYRIGHTS
|
2. |
RIGHTS TO THE SPECIFICATIONS, PLANS AND ETC.
|
3. |
ACCESS TO INFORMATION
|
To the BUILDER
|
:
|
HYUNDAI SAM HO HEAVY INDUSTRIES CO., LTD
93, Daebul-Ro, Samho-Eup, Youngam-Gun, Jeollanam-Do, Korea |
Attention :
|
Y.J.JI / General Manager, Contract Management
Tel : +82 61 460 2607
Facsimile
: +82 61 460 3707
E-
mail
: yjji2000@hshi.co.kr
|
|
To the BUYER
|
:
|
Malibu Warrior Inc.
Trust Company Complex, Ajeltake Road, Ajeltake Island,Majuro, Marshall Islands, MH 96960 |
Attention :
|
Mr. Andreas M. Louka, Legal Advisor
Tel : +30 210 8128 320
Facsimile
: +30 210 6141 272
E-mail
: legal@
loukapartners
.com
|
|
Attention :
|
Mr. Konstantinos Patis, Fleet Technical Manager
Tel
: +30 210 8128242
Facsimile
: +30 210 6141 276
E-
mail
: tec@centralmare.com
|
1. |
EXTENT OF INSURANCE COVERAGE
|
2. |
APPLICATION OF THE RECOVERED AMOUNT
|
(a) |
Partial Loss :
|
(b) |
Total Loss :
|
3. |
TERMINATION OF BUILDER'S OBLIGATION TO INSURE
|
1. |
REPRESENTATIONS OF THE PARTIES
|
(a) |
It will comply with the laws of any jurisdiction applicable to such party as it relates to this CONTRACT, including but not limited to any applicable anti-corruption and anti-bribery laws., also including, without limitation, the United States Foreign Corrupt Practices Act ("US FCPA"), the UK Bribery Act 2010 ("UK Bribery Act") and the anti-bribery or anti-corruption laws of Korea as such laws may be amended from time to time;
|
(b) |
In connection with this CONTRACT, it has not and will not make any payments or gifts or provide other advantages, or any offers or promises of payments or gifts or other advantages of any kind, directly or indirectly, to:
|
(i) |
any person or entity with the intention of obtaining or retaining a business advantage for itself or the other party to this CONTRACT;
|
(ii) |
any official or member of any government or any agency or instrumentality thereof; any official or member of any public international organisation or any agency or instrumentality thereof; any or official of a political party or any candidate for political office (herein 'public official'); or any person while knowing or reasonably suspecting that all or a portion of such money or thing of value will be offered, given or promised, directly or indirectly, to any public official, in violation of the UK Bribery Act, the US FCPA or the laws of Korea.
|
(c) |
In connection with this CONTRACT, it has not and will not request, agree to accept or accept from any person or entity any payments or gifts or other advantages, or any offers or promises of payments or gifts or other advantages of any kind, directly or indirectly, as a reward or inducement to perform its obligations under this CONTRACT in any way improperly.
|
(d) |
undertakes that it shall apply standards of business conduct which are consistent with the BUILDER's Business Partner Code of Conduct, found at
http://ethics.hhi.co.kr/html_eng/2_moral/sub_02.htm, a hard copy of which is
available on request.
|
2. |
INDEMNIFICATION
|
1. |
In consideration of the Buyer entering into the Contract with the Builder, we hereby issue our irrevocable letter of guarantee number
[]
(hereinafter referred to as the
"Guarantee")
(in favor of
[Name of the Buyer]
(herein referred to as the
"Buyer"
or
"you")
for the account of
[Name of the Builder]
(herein referred to as the
"Builder")
as follows in connection with the shipbuilding contract dated
[]
(herein referred to as the
"Contract")
, made
by and between the Buyer and the Builder for the construction and sale of
[]
having Builder's Hull No.
[]
(hereinafter referred to as the
"Vessel")
.
|
2. |
If in connection with the terms of the Contract, the Buyer shall become entitled to a refund of one or more of the advance payments made to the Builder prior to the delivery of the Vessel, we hereby irrevocably guarantee the repayment of the same to the Buyer after the Buyer's written demand together with interest thereon at the Agreed Interest Rate from the date following the date of receipt by the Builder to the date of remittance by telegraphic transfer of such refund.
|
3. |
This Guarantee is an undertaking to make the above payments against a written demand conforming with the requirements of this Guarantee and is independent from the Contract. Our obligation to make payment under this Guarantee will not be discharged by amendments to the Contract, disputes under the Contract or any invalidity of the Contract.
|
4. |
The amount of this Guarantee will be automatically increased upon the Builder's receipt of the respective further installments: each time by the amount of installment of:
|
(a) |
[]
U.S. Dollars (US$
[]
);
|
(b) |
[]
U.S. Dollars (US$
[]
);
|
(c) |
[]
U.S. Dollars (US$
[]
);
|
(d) |
[]
U.S. Dollars (US$
[]
);
|
(e) |
[]
U.S. Dollars (US$
[]
);
|
(f) |
[]
U.S. Dollars (US$
[]
);
|
(g) |
[]
U.S. Dollars (US$
[]
); and
|
(h) |
[]
U.S. Dollars (US$
[]
).
|
5. |
In case any refund is made to you by the Builder or by us under this Guarantee, our liability hereunder shall be automatically reduced to reflect the remaining amount due (plus interest).
|
6. |
For the purposes of this Guarantee, "
Agreed Interest Rate
" means four percent (4%) per annum provided that in the event of cancellation of the Contract. as a result of delays due to Force Majeure (as defined in the Contract) or other causes beyond the control of the Builder or in the case of total loss of the Vessel, the interest rate shall be reduced to three per cent (3%) per annum as provided in Article X of the Contract.
|
7. |
This Guarantee is payable against our simple receipt of a signed statement from you certifying that Buyer's demand for refund has been made in conformity with the Contract and the Builder has failed to make the refund within 30 days after your demand to the Builder. Any notice, claim or demand to be given or made by you under this Guarantee may be served on us either by post or by tested telex or by authorized SWIFT or equivalent as follows:
|
8. |
Refund shall be made to you by telegraphic transfer (net of bank charges) in United States Dollars within 30 days from the receipt of your demand. All payments under this Guarantee shall be made without deduction or withholding for or on account of
|
9. |
This Guarantee shall expire and become null and void upon the earliest of:
|
(a) |
receipt by the Buyer of the sum guaranteed hereby;
|
(b) |
acceptance by the Buyer of the delivery of the Vessel; or
|
(c) |
rescission or termination of the Contract due to the Buyer's default in accordance with the Contract provided that such default has been admitted in writing by the Buyer or has been established by a final and unappealable Award by a London arbitration tribunal duly appointed under the Contract, or a Judgment of the Hgh Court of Justice in London.
|
10. |
Notwithstanding any provision herein, in the event that within 30 days from the date of your demand to the Builder referred to above, we receive notification from you or the Builder accompanied by written confirmation by an arbitrator to the effect that your claim to cancel the Contract or your claim for refund thereunder has been disputed and referred to arbitration in accordance with the Contract, we shall under this Guarantee refund to you the sum (not exceeding U U.S. Dollars (US$ U) plus interest by the same manner hereinabove) due to you from the Builder pursuant to the award made under such arbitration (or any judgment on appeal therefrom) immediately upon receipt from you of the demand for payment of the sum and a copy of the award (or any judgment on appeal therefrom).
|
11. |
This Guarantee may be assigned or transferred by the BUYER with prior written notice to us. A person who is not a party to this Guarantee has no rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Guarantee.
|
12. |
This Guarantee shall be governed by and construed in accordance with the laws of England and any dispute arising under or in connection with this guarantee shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory modification thereof as currently in force before three arbitrators, with one to be appointed by each party and the third to be appointed by the two party appointed arbitrators..
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13. |
We hereby warrant that we are permitted by any relevant law to which we are subject (including, where relevant, the laws of the place or places of each of our incorporation, establishment, regulation, registration and residence) to (i) issue a guarantee in this\
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Very truly yours,
For and on behalf of
By
Name : Title : |
For and on behalf of
|
For and on behalf of
|
||||
The BUYER
|
The BUILDER
|
||||
/s/ Evangelos J. Pistiolis
|
/s/ Sam H. Ka
|
||||
Name:
|
Evangelos J. Pistiolis
|
Name:
|
Sam H. Ka
|
||
Title:
|
Attorney-in-Fact
|
Title:
|
Attorney-in-Fact
|
WITNESS
|
WITNESS
|
||||
/s/ Andreas Louka
|
/s/ Euisung Yoon
|
||||
Name:
|
Andreas Louka
|
Name:
|
Euisung Yoon
|
a) |
First Instalment
|
b) |
Second Instalment
|
c) |
Third Instalment
|
If to the Seller:
|
Ships International Inc.
1 Vas. Sofias and Meg. Alexandrou St 15124 Maroussi, Greece Facsimile: +302108128320 Email: louka@loukapartners.com |
If to the Buyer:
|
Top Ships Inc.
1 Vas. Sofias-and Meg Alexandrou Str 15124 Maroussi, Greece Attention: Alexandros Tsirikos Facsimile: +30210 8056441 Email: atsirikos@topships.org |
With a copy (which shall not
constitute notice) to: |
Seward & Kissel LLP
One Battery Park Plaza New York, New York 10004 Attention: Gary J. Wolfe, Esq. Facsimile: (212) 901-2110 Email: wolfe@sewkis.com |
BUYER:
|
||
TOP Ships Inc.
|
||
By:
|
/s/ Alexandros Tsirikos
|
|
Name:
|
Alexandros Tsirikos
|
|
Title:
|
Chief Financial Officer
|
|
SELLER
|
||
Ships International Inc.
|
||
By:
|
/s/ Evangelos Pistiolis
|
|
Name:
|
Evangelos Pistiolis
|
|
Title:
|
Attorney-in-fact
|
|
a) |
First Instalment
|
b) |
Second Instalment
|
c) |
Third Instalment
|
If to the Seller:
|
Ships International Inc.
1 Vas. Sofias and Meg. Alexandrou St 15124 Maroussi, Greece Facsimile: +302108128320 Email: louka@loukapartners.com |
If to the Buyer:
|
Top Ships Inc.
1 Vas. Sofias-and Meg Alexandrou Str 15124 Maroussi, Greece Attention: Alexandros Tsirikos Facsimile: +30210 8056441 Email: atsirikos@topships.org |
With a copy (which shall not
constitute notice) to: |
Seward & Kissel LLP
One Battery Park Plaza New York, New York 10004 Attention: Gary J. Wolfe, Esq. Facsimile: (212) 901-2110 Email: wolfe@sewkis.com |
BUYER:
|
||
TOP Ships Inc.
|
||
By:
|
/s/ Alexandros Tsirikos
|
|
Name:
|
Alexandros Tsirikos
|
|
Title:
|
Chief Financial Officer
|
|
SELLER
|
||
Ships International Inc.
|
||
By:
|
/s/ Evangelos Pistiolis
|
|
Name:
|
Evangelos Pistiolis
|
|
Title:
|
Attorney-in-fact
|
|
a) |
First Instalment
|
b) |
Second Instalment
|
c) |
Third Instalment
|
If to the Seller:
|
Ships International Inc.
1 Vas. Sofias and Meg. Alexandrou St 15124 Maroussi, Greece Facsimile: +302108128320 Email: louka@loukapartners.com |
If to the Buyer:
|
Top Ships Inc.
1 Vas. Sofias-and Meg Alexandrou Str 15124 Maroussi, Greece Attention: Alexandros Tsirikos Facsimile: +30210 8056441 Email: atsirikos@topships.org |
With a copy (which shall not
constitute notice) to: |
Seward & Kissel LLP
One Battery Park Plaza New York, New York 10004 Attention: Gary J. Wolfe, Esq. Facsimile: (212) 901-2110 Email: wolfe@sewkis.com |
BUYER:
|
||
TOP Ships Inc.
|
||
By:
|
/s/ Alexandros Tsirikos
|
|
Name:
|
Alexandros Tsirikos
|
|
Title:
|
Chief Financial Officer
|
|
SELLER
|
||
Ships International Inc.
|
||
By:
|
/s/ Evangelos Pistiolis
|
|
Name:
|
Evangelos Pistiolis
|
|
Title:
|
Attorney-in-fact
|
|
Subsidiaries as of March 29, 2018
|
Country of Incorporation
|
Top Ships Inc.
|
Marshall Islands
|
Top Tanker Management Inc.
|
Marshall Islands
|
Mytikas Shipping Company Limited
|
Marshall Islands
|
Ilisos Shipping Company Limited
|
Marshall Islands
|
Lyndon International Co
|
Marshall Islands
|
Monte Carlo One Shipping Company Limited
|
Marshall Islands
|
Monte Carlo Seven Shipping Company Limited
|
Marshall Islands
|
Monte Carlo 37 Shipping Company Limited
|
Marshall Islands
|
Monte Carlo 39 Shipping Company Limited
|
Marshall Islands
|
Monte Carlo LAX Shipping Company Limited
|
Marshall Islands
|
Monte Carlo 71 Shipping Company Limited
|
Marshall Islands
|
Pylio Shipping Company Limited
|
Liberia
|
Falakro Shipping Company Limited
|
Liberia
|
Gramos Shipping Company Inc.
|
Marshall Islands
|
Parnis Shipping Company Limited
|
Marshall Islands
|
Style Maritime Ltd.
|
Marshall Islands
|
Jasmin Finance Limited
|
Marshall Islands
|
Astarte International Inc.
|
Marshall Islands
|
PCH77 Shipping Company Limited
|
Marshall Islands
|
Eco Seven Inc.
|
Marshall Islands
|
PCH Dreaming Inc.
|
Marshall Islands
|
South California Inc.
|
Marshall Islands
|
Malibu Warrior Inc.
|
Marshall Islands
|