Title of each class
|
Name of each exchange on which registered
|
Common Stock, $0.01 par value
|
New York Stock Exchange
|
Preferred Stock Purchase Rights
|
New York Stock Exchange
|
8.875% Series B Cumulative Redeemable
Perpetual Preferred Shares, $0.01 par value |
New York Stock Exchange
|
Large accelerated filer ☐
|
Accelerated filer ☒
|
Non-accelerated filer ☐
Emerging growth company ☐
|
U.S. GAAP ☒
|
International Financial Reporting Standards as issued by
the International Accounting Standards Board
☐
|
Other ☐
|
FORWARD-LOOKING STATEMENTS
|
4
|
|
PART I
|
|
|
Item 1.
|
Identity of Directors, Senior Management and Advisers
|
5
|
Item 2.
|
Offer Statistics and Expected Timetable
|
5
|
Item 3.
|
Key Information
|
5
|
Item 4.
|
Information on the Company
|
30
|
Item 4A.
|
Unresolved Staff Comments
|
49
|
Item 5.
|
Operating and Financial Review and Prospects
|
49
|
Item 6.
|
Directors, Senior Management and Employees
|
65
|
Item 7.
|
Major Shareholders and Related Party Transactions
|
70
|
Item 8.
|
Financial Information
|
74
|
Item 9.
|
The Offer and Listing
|
75
|
Item 10.
|
Additional Information
|
75
|
Item 11.
|
Quantitative and Qualitative Disclosures about Market Risk
|
83
|
Item 12.
|
Description of Securities Other than Equity Securities
|
84
|
PART II
|
||
Item 13.
|
Defaults, Dividend Arrearages and Delinquencies
|
85
|
Item 14.
|
Material Modifications to the Rights of Security Holders and Use of Proceeds
|
85
|
Item 15.
|
Controls and Procedures
|
85
|
Item 16A.
|
Audit Committee Financial Expert
|
86
|
Item 16B.
|
Code of Ethics
|
86
|
Item 16C.
|
Principal Accountant Fees and Services
|
86`
|
Item 16D.
|
Exemptions from the Listing Standards for Audit Committees
|
87
|
Item 16E.
|
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
|
87
|
Item 16F.
|
Change in Registrant’s Certifying Accountant
|
87
|
Item 16G.
|
Corporate Governance
|
87
|
Item 16H.
|
Mine Safety Disclosure
|
88
|
PART III
|
||
Item 17.
|
Financial Statements
|
89
|
Item 18.
|
Financial Statements
|
89
|
Item 19.
|
Exhibits
|
89
|
Item 1. |
Identity of Directors, Senior Management and Advisers
|
Item 2. |
Offer Statistics and Expected Timetable
|
Item 3. |
Key Information
|
|
A. |
Selected Financial Data
|
As of and for the
|
||||||||||||||||||||
Year Ended December 31,
|
||||||||||||||||||||
2018
|
2017
|
2016
|
2015
|
2014
|
||||||||||||||||
(in thousands of U.S. dollars,
|
||||||||||||||||||||
except for share and per share data, fleet data and average daily results)
|
||||||||||||||||||||
Statement of Operations Data:
|
||||||||||||||||||||
Time charter revenues
|
$
|
226,189
|
$
|
161,897
|
$
|
114,259
|
$
|
157,712
|
$
|
175,576
|
||||||||||
Impairment loss
|
-
|
442,274
|
-
|
-
|
-
|
|||||||||||||||
Operating income/(loss)
|
38,250
|
(483,987
|
)
|
(88,321
|
)
|
(47,177
|
)
|
(18,204
|
)
|
|||||||||||
Net income/(loss)
|
16,580
|
(511,714
|
)
|
(164,237
|
)
|
(64,713
|
)
|
(10,268
|
)
|
|||||||||||
Dividends on series B preferred shares
|
(5,769
|
)
|
(5,769
|
)
|
(5,769
|
)
|
(5,769
|
)
|
(5,080
|
)
|
||||||||||
Income/(loss) attributed to common stockholders
|
10,811
|
(517,483
|
)
|
(170,006
|
)
|
(70,482
|
)
|
(15,348
|
)
|
|||||||||||
Earnings/(loss) per common share, basic and diluted
|
0.10
|
(5.41
|
)
|
(2.11
|
)
|
(0.89
|
)
|
(0.19
|
)
|
|||||||||||
Weighted average number of common shares, basic
|
103,736,742
|
95,731,093
|
80,441,517
|
79,518,009
|
81,292,290
|
|||||||||||||||
Weighted average number of common shares, diluted
|
104,715,883
|
95,731,093
|
80,441,517
|
79,518,009
|
81,292,290
|
As of and for the
|
||||||||||||||||||||
Year Ended December 31,
|
||||||||||||||||||||
2018
|
2017
|
2016
|
2015
|
2014
|
||||||||||||||||
(in thousands of U.S. dollars,
|
||||||||||||||||||||
except for share and per share data and average daily results)
|
||||||||||||||||||||
Balance Sheet Data:
|
||||||||||||||||||||
Total assets
|
$
|
1,187,796
|
$
|
1,246,722
|
$
|
1,668,663
|
$
|
1,836,965
|
$
|
1,787,122
|
||||||||||
Total current liabilities
|
125,156
|
80,441
|
78,225
|
58,889
|
98,092
|
|||||||||||||||
Capital stock
|
1,063,709
|
1,071,587
|
986,044
|
977,731
|
972,125
|
|||||||||||||||
Long-term debt (including current portion), net of deferred financing costs
|
530,547
|
601,384
|
598,181
|
600,071
|
484,256
|
|||||||||||||||
Total stockholders’ equity
|
627,684
|
624,758
|
1,056,589
|
1,218,366
|
1,282,226
|
Cash Flow Data:
|
||||||||||||||||||||
Net cash provided by/(used in) operating activities
|
$
|
79,930
|
$
|
23,413
|
$
|
(20,998
|
)
|
$
|
23,945
|
$
|
44,910
|
|||||||||
Net cash provided by/(used in) investing activities
|
99,370
|
(152,333
|
)
|
(41,619
|
)
|
(155,637
|
)
|
(152,513
|
)
|
|||||||||||
Net cash provided by/(used in) financing activities
|
(93,702
|
)
|
73,587
|
(9,459
|
)
|
106,009
|
85,871
|
As of and for the
|
||||||||||||||||||||
Year Ended December 31,
|
||||||||||||||||||||
2018
|
2017
|
2016
|
2015
|
2014
|
||||||||||||||||
Fleet Data:
|
||||||||||||||||||||
Average number of vessels (1)
|
49.9
|
49.6
|
45.2
|
40.8
|
37.9
|
|||||||||||||||
Number of vessels at year-end
|
48.0
|
50.0
|
46.0
|
43.0
|
39.0
|
|||||||||||||||
Weighted average age of vessels at year-end (in years)
|
9.1
|
8.4
|
8.2
|
7.4
|
7.1
|
|||||||||||||||
Ownership days (2)
|
18,204
|
18,119
|
16,542
|
14,900
|
13,822
|
|||||||||||||||
Available days (3)
|
17,964
|
17,890
|
16,447
|
14,600
|
13,650
|
|||||||||||||||
Operating days (4)
|
17,799
|
17,566
|
16,354
|
14,492
|
13,564
|
|||||||||||||||
Fleet utilization (5)
|
99.1
|
%
|
98.2
|
%
|
99.4
|
%
|
99.3
|
%
|
99.4
|
%
|
Average Daily Results:
|
||||||||||||||||||||
Time charter equivalent (TCE) rate (6)
|
$
|
12,179
|
$
|
8,568
|
$
|
6,106
|
$
|
9,739
|
$
|
12,081
|
||||||||||
Daily vessel operating expenses (7)
|
5,247
|
4,987
|
5,196
|
5,924
|
6,289
|
|
(1) |
Average number of vessels is the number of vessels that constituted our fleet for the relevant period, as measured by the sum of the number of days each
vessel was a part of our fleet during the period divided by the number of calendar days in the period.
|
|
(2) |
Ownership days are the aggregate number of days in a period during which each vessel in our fleet has been owned by us. Ownership days are an indicator of
the size of our fleet over a period and affect both the amount of revenues and the amount of expenses that we record during a period.
|
|
(3) |
Available days are the number of our ownership days less the aggregate number of days that our vessels are off-hire due to scheduled repairs or repairs
under guarantee, vessel upgrades or special surveys and the aggregate amount of time that we spend positioning our vessels for such events. The shipping industry uses available days to measure the number of days in a period during
which vessels should be capable of generating revenues.
|
|
(4) |
Operating days are the number of available days in a period less the aggregate number of days that our vessels are off-hire due to any reason, including
unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a period during which vessels actually generate revenues.
|
|
(5) |
We calculate fleet utilization by dividing the number of our operating days during a period by the number of our available days during the period. The
shipping industry uses fleet utilization to measure a company's efficiency in finding suitable employment for its vessels and minimizing the amount of days that its vessels are off-hire for reasons other than scheduled repairs or
repairs under guarantee, vessel upgrades, special surveys or vessel positioning for such events.
|
|
(6) |
Time charter equivalent rates, or TCE rates, are defined as our time charter
revenues less voyage expenses during a period divided by the number of our available days during the period, which is consistent with industry standards. Voyage expenses include port charges, bunker (fuel) expenses, canal charges
and commissions. TCE rate is a non-GAAP measure,
and management believes it is useful to investors because it is a standard shipping industry
performance
measure used primarily to compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage charters, because charter hire rates for vessels on voyage charters are generally not
expressed in per day amounts while charter hire rates
for vessels on time charters are generally expressed in such amounts. The following table
reflects the calculation of our TCE rates for the periods presented.
|
Year Ended December 31,
|
||||||||||||||||||||
2018
|
2017
|
2016
|
2015
|
2014
|
||||||||||||||||
(in thousands of U.S. dollars, except for
|
||||||||||||||||||||
TCE rates, which are expressed in U.S. dollars, and available days)
|
||||||||||||||||||||
Time charter revenues
|
$
|
226,189
|
$
|
161,897
|
$
|
114,259
|
$
|
157,712
|
$
|
175,576
|
||||||||||
Less: voyage expenses
|
(7,405
|
)
|
(8,617
|
)
|
(13,826
|
)
|
(15,528
|
)
|
(10,665
|
)
|
||||||||||
Time charter equivalent revenues
|
$
|
218,784
|
$
|
153,280
|
$
|
100,433
|
$
|
142,184
|
$
|
164,911
|
||||||||||
Available days
|
17,964
|
17,890
|
16,447
|
14,600
|
13,650
|
|||||||||||||||
Time charter equivalent (TCE) rate
|
$
|
12,179
|
$
|
8,568
|
$
|
6,106
|
$
|
9,739
|
$
|
12,081
|
|
(7) |
Daily vessel operating expenses, which include crew wages and related costs, the cost of insurance, expenses relating to repairs and maintenance, the costs
of spares and consumable stores, tonnage taxes and other miscellaneous expenses, are calculated by dividing vessel operating expenses by ownership days for the relevant period.
|
|
B. |
Capitalization and Indebtedness
|
|
C. |
Reasons for the Offer and Use of Proceeds
|
|
D. |
Risk Factors
|
|
● |
supply of and demand for energy resources, commodities, semi-finished and finished consumer and industrial products;
|
|
● |
changes in the exploration or production of energy resources, commodities, semi-finished and finished consumer and industrial products;
|
|
● |
the location of regional and global exploration, production and manufacturing facilities;
|
|
● |
the location of consuming regions for energy resources, commodities, semi-finished and finished consumer and industrial products;
|
|
● |
the globalization of production and manufacturing;
|
|
● |
global and regional economic and political conditions, including armed conflicts and terrorist activities; embargoes and strikes;
|
|
● |
natural disasters and other disruptions in international trade;
|
|
● |
disruptions and developments in international trade;
|
|
● |
changes in seaborne and other transportation patterns, including the distance cargo is transported by sea;
|
|
● |
environmental and other regulatory developments;
|
|
● |
currency exchange rates; and
|
|
● |
weather.
|
|
● |
the number of newbuilding orders and deliveries, including slippage in deliveries;
|
|
● |
the number of shipyards and ability of shipyards to deliver vessels;
|
|
● |
port and canal congestion;
|
|
● |
the scrapping rate of older vessels;
|
|
● |
speed of vessel operation;
|
|
● |
vessel casualties; and
|
|
● |
the number of vessels that are out of service, namely those that are laid-up, drydocked, awaiting repairs or otherwise not available for hire.
|
|
● |
marine disaster;
|
|
● |
terrorism;
|
|
● |
environmental accidents;
|
|
● |
cargo and property losses or damage;
|
|
● |
business interruptions caused by mechanical failure, human error, war, terrorism, political action in various countries, labor strikes or adverse weather
conditions; and
|
|
● |
piracy.
|
|
● |
the prevailing level of charter hire rates;
|
|
● |
general economic and market conditions affecting the shipping industry;
|
|
● |
competition from other shipping companies and other modes of transportation;
|
|
● |
the types, sizes and ages of vessels;
|
|
● |
the supply of and demand for vessels;
|
|
● |
applicable governmental or other regulations;
|
|
● |
technological advances;
|
|
● |
the need to upgrade vessels as a result of chaterer requirements, technological advances in vessel design or equipment or otherwise; and
|
|
● |
the cost of newbuildings.
|
|
● |
locate and acquire suitable vessels;
|
|
● |
identify and consummate acquisitions or joint ventures;
|
|
● |
enhance our customer base;
|
|
● |
manage our expansion; and
|
|
● |
obtain required financing on acceptable terms.
|
|
● |
pay dividends if we do not repay amounts drawn under our loan facilities, if there is a default under the loan facilities or if the payment of the dividend
would result in a default or breach of a loan covenant;
|
|
● |
incur additional indebtedness, including through the issuance of guarantees;
|
|
● |
change the flag, class or management of our vessels;
|
|
● |
create liens on our assets;
|
|
● |
sell our vessels;
|
|
● |
enter into a time charter or consecutive voyage charters that have a term that exceeds, or which by virtue of any optional extensions may exceed a certain
period;
|
|
● |
merge or consolidate with, or transfer all or substantially all our assets to, another person; and
|
|
● |
enter into a new line of business.
|
|
● |
actual or anticipated fluctuations in our quarterly and annual results and those of other public companies in our industry;
|
|
● |
mergers and strategic alliances in the dry bulk shipping industry;
|
|
● |
market conditions in the dry bulk shipping industry;
|
|
● |
changes in government regulation;
|
|
● |
shortfalls in our operating results from levels forecast by securities analysts;
|
|
● |
announcements concerning us or our competitors; and
|
|
● |
the general state of the securities market.
|
|
● |
authorizing our board of directors to issue “blank check” preferred stock without shareholder approval;
|
|
● |
providing for a classified board of directors with staggered, three-year terms;
|
|
● |
prohibiting cumulative voting in the election of directors;
|
|
● |
authorizing the removal of directors only for cause and only upon the affirmative vote of the holders of a majority of the outstanding shares of our common
stock entitled to vote for the directors;
|
|
● |
prohibiting shareholder action by written consent;
|
|
● |
limiting the persons who may call special meetings of shareholders; and
|
|
● |
establishing advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted on by
shareholders at shareholder meetings.
|
|
● |
changes in our operating cash flow, capital expenditure requirements, working capital requirements and other cash needs;
|
|
● |
restrictions under our existing or future credit facilities or any future debt securities on our ability to pay dividends if an event of default has
occurred and is continuing or if the payment of the dividend would result in an event of default, or under certain facilities if it would result in the breach of certain financial covenants;
|
|
● |
the amount of any cash reserves established by our board of directors; and
|
|
● |
restrictions under Marshall Islands law, which generally prohibits the payment of dividends other than from surplus (retained earnings and the excess of
consideration received for the sale of shares above the par value of the shares) or while a company is insolvent or would be rendered insolvent by the payment of such a dividend.
|
|
B. |
History and development of the Company
|
|
B. |
Business overview
|
Vessel
|
Sister Ships*
|
Gross Rate (USD Per Day)
|
Com**
|
Charterers
|
Delivery Date to Charterers***
|
Redelivery Date to Owners****
|
Notes
|
|
BUILT DWT
|
||||||||
20 Panamax Bulk Carriers
|
||||||||
1
|
DANAE
|
A
|
$10,000
|
5.00%
|
Phaethon International Company AG
|
22-Dec-17
|
7-Feb-19
|
|
$8,100
|
5.00%
|
7-Feb-19
|
7-Jan-20 - 7-Apr-20
|
1
|
||||
2001 75,106
|
||||||||
2
|
DIONE
|
A
|
$10,350
|
5.00%
|
Ausca Shipping Limited, Hong Kong
|
23-Jan-18
|
23-Mar-19 - 23-Apr-19
|
2,3,4
|
2001 75,172
|
||||||||
3
|
NIREFS
|
A
|
$10,750
|
3.75%
|
Hudson Shipping Lines Incorporated
|
11-Aug-18
|
11-Jul-19 - 11-Oct-19
|
|
2001 75,311
|
||||||||
4
|
OCEANIS
|
A
|
$10,350
|
5.00%
|
Ausca Shipping Limited, Hong Kong
|
16-Nov-18
|
1-Jan-20 - 31-Mar-20
|
|
2001 75,211
|
||||||||
5
|
THETIS
|
B
|
$10,650
|
3.75%
|
Hudson Shipping Lines Incorporated
|
16-Nov-18
|
16-Jan-20 - 16-Apr-20
|
|
2004 73,583
|
||||||||
6
|
PROTEFS
|
B
|
$11,000
|
3.75%
|
Hudson Shipping Lines Incorporated
|
19-Sep-18
|
4-Sep-19 - 19-Dec-19
|
|
2004 73,630
|
||||||||
7
|
CALIPSO
|
B
|
$12,200
|
5.00%
|
Glencore Agriculture B.V., Rotterdam
|
12-Mar-18
|
28-May-19 - 12-Sep-19
|
|
2005 73,691
|
||||||||
8
|
CLIO
|
B
|
$10,600
|
5.00%
|
Ausca Shipping Limited, Hong Kong
|
10-Nov-18
|
10-Sep-19 - 10-Dec-19
|
|
2005 73,691
|
||||||||
9
|
NAIAS
|
B
|
$10,000
|
5.00%
|
Phaethon International Company AG
|
26-Nov-17
|
26-Jan-19
|
|
$10,000
|
5.00%
|
26-Jan-19
|
26-Dec-20 - 10-Apr-21
|
|||||
2006 73,546
|
||||||||
10
|
ARETHUSA
|
B
|
$12,600
|
5.00%
|
Glencore Agriculture B.V., Rotterdam
|
27-Apr-18
|
27-Apr-19 - 27-Jul-19
|
|
2007 73,593
|
||||||||
11
|
ERATO
|
C
|
$10,500
|
5.00%
|
Phaethon International Company AG
|
30-Dec-17
|
18-Mar-19 - 30-May-19
|
4
|
2004 74,444
|
||||||||
12
|
CORONIS
|
C
|
$11,300
|
5.00%
|
CJ International Italy Societa Per Azioni
|
10-Oct-18
|
11-Aug-19 - 11-Nov-19
|
|
2006 74,381
|
||||||||
13
|
MELIA
|
$12,000
|
5.00%
|
United Bulk Carriers International S.A., Luxemburg
|
28-Apr-18
|
28-Sep-19 - 28-Dec-19
|
||
2005 76,225
|
||||||||
14
|
ARTEMIS
|
$12,600
|
5.00%
|
Ausca Shipping Limited, Hong Kong
|
17-Sep-18
|
17-Sep-19 17-Dec-19
|
||
2006 76,942
|
15
|
LETO
|
$12,500
|
5.00%
|
Glencore Agriculture B.V., Rotterdam
|
10-Jan-18
|
10-May-19 - 25-Aug-19
|
||
2010 81,297
|
||||||||
16
|
SELINA
|
D
|
$12,250
|
5.00%
|
BG Shipping Co., Limited, Hong Kong
|
6-Feb-18
|
6-Jun-19 - 6-Sep-19
|
|
2010 75,700
|
||||||||
17
|
MAERA
|
D
|
$11,750
|
5.00%
|
ST Shipping and Transport Pte. Ltd., Singpore
|
4-Jul-18
|
10-Feb-19
|
|
$7,000
|
5.00%
|
Glencore Agriculture B.V., Rotterdam
|
10-Feb-19
|
27-Mar-19
|
||||
$9,450
|
5.00%
|
27-Mar-19
|
10-Apr-20 - 10-Jul-20
|
|||||
2013 75,403
|
||||||||
18
|
ISMENE
|
$12,125
|
5.00%
|
Koch Shipping Pte. Ltd., Singapore
|
12-Dec-18
|
1-Jan-20 - 31-Mar-20
|
||
2013 77,901
|
||||||||
19
|
CRYSTALIA
|
E
|
$11,100
|
5.00%
|
Glencore Agriculture B.V., Rotterdam
|
3-Oct-17
|
28-Jan-19
|
5,6
|
$10,500
|
5.00%
|
2-Mar-19
|
2-May-20 - 2-Aug-20
|
|||||
2014 77,525
|
||||||||
20
|
ATALANDI
|
E
|
$13,500
|
5.00%
|
Uniper Global Commodities SE, Düsseldorf
|
27-Apr-18
|
27-Jun-19 - 27-Sep-19
|
|
2014 77,529
|
||||||||
5 Kamsarmax Bulk Carriers
|
||||||||
21
|
MAIA
|
F
|
$13,300
|
5.00%
|
Glencore Agriculture B.V., Rotterdam
|
12-Nov-18
|
1-Jan-20 - 31-Mar-20
|
|
2009 82,193
|
||||||||
22
|
MYRSINI
|
F
|
$12,750
|
5.00%
|
Glencore Agriculture B.V., Rotterdam
|
22-Dec-18
|
22-Oct-19 - 22-Dec-19
|
|
2010 82,117
|
||||||||
23
|
MEDUSA
|
F
|
$14,000
|
4.75%
|
Cargill International S.A., Geneva
|
3-Sep-18
|
3-Oct-19 - 3-Dec-19
|
|
2010 82,194
|
||||||||
24
|
MYRTO
|
F
|
$14,000
|
4.75%
|
Cargill International S.A., Geneva
|
25-Apr-18
|
25-May-19 - 25-Jul-19
|
|
2013 82,131
|
||||||||
25
|
ASTARTE
|
$14,250
|
5.00%
|
Glencore Agriculture B.V., Rotterdam
|
16-Oct-18
|
16-Dec-19 - 16-Mar-20
|
||
2013 81,513
|
||||||||
5 Post-Panamax Bulk Carriers
|
||||||||
26
|
ALCMENE
|
$11,500
|
5.00%
|
BG Shipping Co., Limited, Hong Kong
|
21-Nov-18
|
21-Oct-19 - 21-Jan-20
|
||
2010 93,193
|
||||||||
27
|
AMPHITRITE
|
G
|
$11,150
|
4.75%
|
Cargill International S.A., Geneva
|
28-Sep-17
|
27-Jan-19
|
|
$12,750
|
5.00%
|
Uniper Global Commodities SE, Düsseldorf
|
27-Jan-19
|
27-Mar-20 - 27-Jun-20
|
7
|
|||
2012 98,697
|
||||||||
28
|
POLYMNIA
|
G
|
$16,000
|
4.75%
|
Cargill International S.A., Geneva
|
9-Jul-18
|
9-Sep-19 - 9-Dec-19
|
|
2012 98,704
|
||||||||
29
|
ELECTRA
|
H
|
$13,500
|
5.00%
|
Uniper Global Commodities SE, Düsseldorf
|
19-Oct-18
|
15-Sep-19 - 15-Dec-19
|
|
2013 87,150
|
30
|
PHAIDRA
|
H
|
$12,700
|
5.00%
|
Uniper Global Commodities SE, Düsseldorf
|
13-Jan-18
|
14-Mar-19 - 13-Apr-19
|
4
|
2013 87,146
|
||||||||
14 Capesize Bulk Carriers
|
||||||||
31
|
NORFOLK
|
$13,250
|
5.00%
|
SwissMarine Services S.A., Geneva
|
1-Dec-17
|
1-Sep-19 - 1-Dec-19
|
||
2002 164,218
|
||||||||
32
|
ALIKI
|
$18,000
|
5.00%
|
SwissMarine Services S.A., Geneva
|
9-Apr-18
|
9-Dec-19 - 9-Feb-20
|
||
2005 180,235
|
||||||||
33
|
BALTIMORE
|
$18,050
|
5.00%
|
Koch Shipping Pte. Ltd., Singapore
|
6-Jun-18
|
22-May-19 - 21-Aug-19
|
||
2005 177,243
|
||||||||
34
|
SALT LAKE CITY
|
$16,250
|
4.75%
|
Cargill International S.A., Geneva
|
1-May-18
|
14-Mar-19
|
8,9
|
|
$9,750
|
4.75%
|
14-Mar-19
|
14-Nov-20 - 14-Feb-21
|
10
|
||||
2005 171,810
|
||||||||
35
|
SIDERIS GS
|
I
|
$15,350
|
5.00%
|
Berge Bulk Shipping Pte. Ltd., Singapore
|
15-Dec-18
|
15-Dec-19 - 30-Mar-20
|
|
2006 174,186
|
||||||||
36
|
SEMIRIO
|
I
|
$20,050
|
5.00%
|
Pacific Bulk Cape Company Limited, Hong Kong
|
1-Sep-18
|
1-Jul-19 - 16-Sep-19
|
|
2007 174,261
|
||||||||
37
|
BOSTON
|
I
|
$17,000
|
5.00%
|
EGPN Bulk Carrier Co., Limited, Hong Kong
|
6-Dec-17
|
6-Apr-19 - 6-Jul-19
|
|
2007 177,828
|
||||||||
38
|
HOUSTON
|
I
|
$19,000
|
5.00%
|
SwissMarine Services S.A., Geneva
|
9-May-18
|
17-Feb-19
|
|
$10,125
|
5.00%
|
Koch Shipping Pte. Ltd., Singapore
|
17-Feb-19
|
17-Apr-20 - 1-Aug-20
|
||||
2009 177,729
|
||||||||
39
|
NEW YORK
|
I
|
$16,000
|
5.00%
|
DHL Project & Chartering Limited, Hong Kong
|
2-Feb-18
|
2-Jun-19 - 2-Sep-19
|
|
2010 177,773
|
||||||||
40
|
SEATTLE
|
J
|
$16,000
|
5.00%
|
SwissMarine Services S.A., Geneva
|
24-Dec-18
|
24-Apr-20 - 24-Jul-20
|
|
2011 179,362
|
||||||||
41
|
P. S. PALIOS
|
J
|
$17,350
|
5.00%
|
Koch Shipping Pte. Ltd., Singapore
|
24-May-18
|
9-Jun-19 - 24-Aug-19
|
|
2013 179,134
|
||||||||
42
|
G. P. ZAFIRAKIS
|
K
|
$17,000
|
5.00%
|
SwissMarine Services S.A., Geneva
|
31-Dec-18
|
31-May-20 - 31-Aug-20
|
|
2014 179,492
|
||||||||
43
|
SANTA BARBARA
|
K
|
$20,250
|
4.75%
|
Cargill International S.A., Geneva
|
24-Apr-18
|
9-Oct-19 - 9-Dec-19
|
|
2015 179,426
|
||||||||
44
|
NEW ORLEANS
|
$21,000
|
5.00%
|
SwissMarine Services S.A., Geneva
|
24-Mar-18
|
12-Mar-19 - 30-Mar-19
|
4
|
|
2015 180,960
|
|
● |
Very Large Ore Carriers
. Very
large ore carriers, or VLOCs, have a carrying capacity of more than 200,000 dwt and are a comparatively new sector of the dry bulk carrier fleet. VLOCs are built to exploit economies of scale on long-haul iron ore routes.
|
|
● |
Capesize
. Capesize vessels have
a carrying capacity of 110,000-199,999 dwt. Only the largest ports around the world possess the infrastructure to accommodate vessels of this size. Capesize vessels are primarily used to transport iron ore or coal and, to a much
lesser extent, grains, primarily on long-haul routes.
|
|
● |
Post-Panamax
. Post-Panamax
vessels have a carrying capacity of 80,000-109,999 dwt. These vessels tend to have a shallower draft and larger beam than a standard Panamax vessel with a higher cargo capacity. These vessels have been designed specifically for
loading high cubic cargoes from draught restricted ports, although they cannot transit the Panama Canal.
|
|
● |
Panamax
. Panamax vessels have a
carrying capacity of 60,000-79,999 dwt. These vessels carry coal, iron ore, grains, and, to a lesser extent, minor bulks, including steel products, cement and fertilizers. Panamax vessels are able to pass through the Panama Canal,
making them more versatile than larger vessels with regard to accessing different trade routes. Most Panamax and Post-Panamax vessels are “gearless,” and therefore must be served by shore-based cargo handling equipment. However, there
are a small number of geared vessels with onboard cranes, a feature that enhances trading flexibility and enables operation in ports which have poor infrastructure in terms of loading and unloading facilities.
|
|
● |
Handymax/Supramax
. Handymax
vessels have a carrying capacity of 40,000-59,999 dwt. These vessels operate in a large number of geographically dispersed global trade routes, carrying primarily grains and minor bulks. Within the Handymax category there is also a
sub-sector known as Supramax. Supramax bulk carriers are ships between 50,000 to 59,999 dwt, normally offering cargo loading and unloading flexibility with on-board cranes, or “gear,” while at the same time possessing the cargo
carrying capability approaching conventional Panamax bulk carriers.
|
|
● |
Handysize
.
Handysize vessels have a carrying capacity of up to 39,999 dwt. These vessels are primarily involved in carrying minor bulk cargoes. Increasingly,
ships of this type operate within regional trading routes, and may serve as trans-shipment feeders for larger vessels. Handysize vessels are well suited for small ports with length and draft restrictions. Their cargo gear enables them
to service ports lacking the infrastructure for cargo loading and unloading.
|
|
● |
We own a modern, high quality fleet of dry bulk carriers
. We believe that owning a modern, high quality fleet reduces operating costs, improves safety and provides us with a competitive advantage in securing
favorable time charters. We maintain the quality
of
our vessels by carrying out regular inspections, both while in port and at sea, and adopting a
comprehensive maintenance program for each vessel.
|
|
● |
Our fleet includes thirteen groups of sister ships.
We believe that maintaining a fleet that includes sister ships enhances the revenue generating potential of our fleet by providing us with operational and
scheduling flexibility. The uniform nature of sister ships
also
improves our operating efficiency by allowing our fleet manager to apply the
technical knowledge of one vessel to all vessels of the same series and creates economies of scale that enable us to realize cost savings when maintaining, supplying and crewing our vessels.
|
|
● |
We have an experienced management team.
Our
management team consists of experienced executives who have, on average, more than 30 years of operating experience in the shipping industry and has demonstrated ability in managing the commercial, technical and financial areas of our
business. Our management team is led by Mr. Simeon Palios, a qualified naval architect and engineer who has more than 40 years of experience in the shipping industry.
|
|
● |
We benefit from the experience and reputation of Diana Shipping Services S.A.
and the relationship with Wilhelmsen Ship Management through the
Diana
Wilhelmsen Management Limited joint venture.
|
|
● |
We benefit from strong relationships with members of the
shipping and financial industries.
We have developed strong relationships with major
international
charterers, shipbuilders and financial institutions that we believe are the result of the quality of our operations, the strength of our management team and our reputation for
dependability.
|
|
● |
We have a strong balance sheet and a relatively low level
of indebtedness.
We believe that our strong balance sheet and relatively low level of indebtedness
provide
us with the flexibility to increase the amount of funds that we may draw under our loan facilities in connection with any future acquisitions or otherwise and enable us to use cash
flow that would otherwise be dedicated to debt service for other purposes.
|
|
(i) |
injury to, destruction or loss of, or loss of use of, natural resources and related assessment costs;
|
|
(ii) |
injury to, or economic losses resulting from, the destruction of real and personal property;
|
|
(iii) |
loss of subsistence use of natural resources that are injured, destroyed or lost;
|
|
(iv) |
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;
|
|
(v) |
lost profits or impairment of earning capacity due to injury, destruction or loss of real or personal property or natural resources; and
|
|
(vi) |
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.
|
|
C. |
Organizational structure
|
|
D. |
Property, plants and equipment
|
|
A. |
Operating results
|
|
● |
Ownership days.
We define ownership days as the
aggregate number of days in a period during which each vessel in our fleet has been owned by us. Ownership days are an indicator of the size of our fleet over a period and affect both the amount of revenues and the amount of expenses
that we record during a period.
|
|
● |
Available days.
We define available days as the
number of our ownership days less the aggregate number of days that our vessels are off-hire due to scheduled repairs or repairs under guarantee, vessel upgrades or special surveys and the aggregate amount of time that we spend
positioning our vessels for such events. The shipping industry uses available days to measure the number of days in a period during which vessels should be capable of generating revenues.
|
|
● |
Operating days.
We define operating days as the
number of our available days in a period less the aggregate number of days that our vessels are off-hire due to any reason, including unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number
of days in a period during which vessels actually generate revenues.
|
|
● |
Fleet utilization.
We calculate fleet utilization by
dividing the number of our operating days during a period by the number of our available days during the period. The shipping industry uses fleet utilization to measure a company's efficiency in finding suitable employment for its
vessels and minimizing the amount of days that its vessels are off-hire for reasons other than scheduled repairs or repairs under guarantee, vessel upgrades, special surveys or vessel positioning for such events.
|
|
● |
TCE rates.
We define Time Charter Equivalent, or TCE
rates as our time charter revenues less voyage expenses during a period divided by the number of our available days during the period, which is consistent with industry standards. TCE rate is a non-GAAP measure and is a standard
shipping industry performance measure used primarily to compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage charters, because charter hire rates for vessels on voyage
charters are generally not expressed in per day amounts while charter hire rates for vessels on time charters generally are expressed in such amounts.
|
Year Ended December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
Ownership days
|
18,204
|
18,119
|
16,542
|
|||||||||
Available days
|
17,964
|
17,890
|
16,447
|
|||||||||
Operating days
|
17,799
|
17,566
|
16,354
|
|||||||||
Fleet utilization
|
99.1
|
%
|
98.2
|
%
|
99.4
|
%
|
||||||
Time charter equivalent (TCE) rate (1)
|
$
|
12,179
|
$
|
8,568
|
$
|
6,106
|
|
● |
obtain the charterer’s consent to us as the new owner;
|
|
● |
obtain the charterer’s consent to a new technical manager;
|
|
● |
in some cases, obtain the charterer’s consent to a new flag for the vessel;
|
|
● |
arrange for a new crew for the vessel, and where the vessel is on charter, in some cases, the crew must be approved by the charterer;
|
|
● |
replace all hired equipment on board, such as gas cylinders and communication equipment;
|
|
● |
negotiate and enter into new insurance contracts for the vessel through our own insurance brokers;
|
|
● |
register the vessel under a flag state and perform the related inspections in order to obtain new trading certificates from the flag state;
|
|
● |
implement a new planned maintenance program for the vessel; and
|
|
● |
ensure that the new technical manager obtains new certificates for compliance with the safety and vessel security regulations of the flag state.
|
|
● |
employment and operation of our vessels; and
|
|
● |
management of the financial, general and administrative elements involved in the conduct of our business and ownership of our vessels.
|
|
● |
vessel maintenance and repair;
|
|
● |
crew selection and training;
|
|
● |
vessel spares and stores supply;
|
|
● |
contingency response planning;
|
|
● |
onboard safety procedures auditing;
|
|
● |
accounting;
|
|
● |
vessel insurance arrangement;
|
|
● |
vessel chartering;
|
|
● |
vessel security training and security response plans (ISPS);
|
|
● |
obtaining of ISM certification and audit for each vessel within the six months of taking over a vessel;
|
|
● |
vessel hiring management;
|
|
● |
vessel surveying; and
|
|
● |
vessel performance monitoring.
|
|
● |
management of our financial resources, including banking relationships, i.e., administration of bank loans and bank accounts;
|
|
● |
management of our accounting system and records and financial reporting;
|
|
● |
administration of the legal and regulatory requirements affecting our business and assets; and
|
|
● |
management of the relationships with our service providers and customers.
|
|
● |
rates and periods of charter hire;
|
|
● |
levels of vessel operating expenses;
|
|
● |
depreciation expenses;
|
|
● |
financing costs; and
|
|
● |
fluctuations in foreign exchange rates.
|
|
● |
the duration of our charters;
|
|
● |
our decisions relating to vessel acquisitions and disposals;
|
|
● |
the amount of time that we spend positioning our vessels;
|
|
● |
the amount of time that our vessels spend in drydock undergoing repairs;
|
|
● |
maintenance and upgrade work;
|
|
● |
the age, condition and specifications of our vessels;
|
|
● |
levels of supply and demand in the dry bulk shipping industry; and
|
|
● |
other factors affecting spot market charter rates for dry bulk carriers.
|
|
● |
reports by
industry
analysts and data providers that focus on our
industry and related dynamics affecting vessel values;
|
|
● |
news and industry
reports
of similar vessel sales;
|
|
● |
news and industry reports of sales of vessels that are not similar to our vessels where we have made certain adjustments in an attempt to
derive
information that can be used as part of our estimates;
|
|
● |
approximate market values for our
vessels
or similar vessels that we
have received from shipbrokers, whether solicited or unsolicited, or that shipbrokers have generally disseminated;
|
|
● |
offers that we may have received from potential purchasers of our vessels; and
|
|
● |
vessel sale prices and values of which we are aware through both formal and informal communications with shipowners, shipbrokers, industry analysts and
various other shipping industry participants and
observers.
|
Vessel
|
Dwt
|
Year Built
|
Carrying Value
(in millions of US dollars)
|
||
2018
|
2017
|
||||
1
|
Alcmene
|
93,193
|
2010
|
14.8
|
15.5
|
2
|
Alcyon**
|
75,247
|
2001
|
-
|
8.3
|
3
|
Aliki
|
180,235
|
2005
|
16.2
|
17.1
|
4
|
Amphitrite
|
98,697
|
2012
|
18.8
|
19.6
|
5
|
Arethusa
|
73,593
|
2007
|
11.0 *
|
11.4
|
6
|
Artemis
|
76,942
|
2006
|
15.2 *
|
16.2 *
|
7
|
Astarte
|
81,513
|
2013
|
21.6 *
|
22.7 *
|
8
|
Atalandi
|
77,529
|
2014
|
20.0
|
20.8
|
9
|
Baltimore
|
177,243
|
2005
|
20.5 *
|
21.8 *
|
10
|
Boston
|
177,828
|
2007
|
19.4
|
20.4
|
11
|
Calipso
|
73,691
|
2005
|
11.0 *
|
11.6 *
|
12
|
Clio
|
73,691
|
2005
|
11.2 *
|
11.9 *
|
13
|
Coronis
|
74,381
|
2006
|
10.1
|
10.6
|
14
|
Crystalia
|
77,525
|
2014
|
19.7
|
20.5
|
15
|
Danae
|
75,106
|
2001
|
9.7 *
|
9.6 *
|
16
|
Dione
|
75,172
|
2001
|
9.4 *
|
9.5 *
|
17
|
Electra
|
87,150
|
2013
|
17.8
|
18.6
|
18
|
Erato
|
74,444
|
2004
|
9.0
|
9.6
|
19
|
G.P. Zafirakis
|
179,492
|
2014
|
49.3 *
|
51.4 *
|
20
|
Houston
|
177,729
|
2009
|
23.1
|
24.1
|
21
|
Ismene
|
77,901
|
2013
|
13.2
|
13.2
|
22
|
Leto
|
81,297
|
2010
|
16.6
|
17.4
|
23
|
Los Angeles
|
206,104
|
2012
|
45.5 *
|
47.7 *
|
24
|
Maera
|
75,403
|
2013
|
12.6
|
13.3
|
25
|
Maia
|
82,193
|
2009
|
15.7
|
16.6
|
26
|
Medusa
|
82,194
|
2010
|
15.5
|
16.3
|
27
|
Melia
|
76,225
|
2005
|
14.0 *
|
15.0 *
|
28
|
Myrsini
|
82,117
|
2010
|
18.1 *
|
19.0 *
|
29
|
Myrto
|
82,131
|
2013
|
21.5 *
|
22.2 *
|
30
|
Naias
|
73,546
|
2006
|
10.3
|
10.9
|
31
|
New Orleans
|
180,960
|
2015
|
38.8 *
|
40.2 *
|
32
|
New York
|
177,773
|
2010
|
42.7 *
|
45.0 *
|
33
|
Newport News
|
208,021
|
2017
|
48.8
|
50.6 *
|
34
|
Nirefs
|
75,311
|
2001
|
7.7 *
|
8.3
|
35
|
Norfolk
|
164,218
|
2002
|
11.4
|
12.0
|
36
|
Oceanis
|
75,211
|
2001
|
7.9 *
|
8.7 *
|
37
|
P.S. Palios
|
179,134
|
2013
|
42.7 *
|
44.7 *
|
38
|
Phaidra
|
87,146
|
2013
|
19.2 *
|
18.3
|
39
|
Philadelphia
|
206,040
|
2012
|
46.2 *
|
48.5 *
|
40
|
Polymnia
|
98,704
|
2012
|
19.1
|
19.9
|
Average estimated daily time charter equivalent rate used
|
Average break even rate
|
|||||||
Panamax/Kamsarmax/Post-Panamax
|
$
|
10,504
|
$
|
9,491
|
||||
Capesize/Newcastlemax
|
$
|
14,715
|
$
|
12,236
|
1-year
(period)
|
Impairment charge
(in USD million)
|
3-year
(period)
|
Impairment charge
(in USD million)
|
5-year
(period)
|
Impairment charge
(in USD million)
|
|||||||||||||||||||
Panamax/Kamsarmax/Post-Panamax
|
$
|
13,029
|
-
|
$
|
9,986
|
$
|
6
|
$
|
9,897
|
$
|
6
|
|||||||||||||
Capesize/Newcastlemax
|
$
|
18,139
|
-
|
$
|
13,159
|
$
|
70
|
$
|
14,255
|
$
|
32
|
|
C. |
Liquidity and Capital Resources
|
|
D. |
Research and development, patents and
licenses
|
|
D. |
Trend
information
|
|
E. |
Off-Balance Sheet Arrangements
|
|
F. |
Tabular Disclosure of Contractual Obligations
|
Payments due by period
|
||||||||||||||||||||
Contractual Obligations
|
Total Amount
|
Less than 1 year
|
2-3 years
|
4-5 years
|
More than 5 years
|
|||||||||||||||
(in thousands of US dollars)
|
||||||||||||||||||||
Loan Agreements and Bond (1)
|
$
|
534,850
|
$
|
97,521
|
$
|
174,876
|
$
|
230,971
|
$
|
31,482
|
||||||||||
Estimated Interest Payments on Loan Agreements and Bond (1)
|
103,890
|
28,300
|
45,800
|
23,027
|
6,763
|
|||||||||||||||
Broker services agreement (2)
|
500
|
500
|
-
|
-
|
-
|
|||||||||||||||
Preferred dividends (3)
|
1,923
|
1,923
|
-
|
-
|
-
|
|||||||||||||||
Total
|
$
|
641,163
|
$
|
128,244
|
$
|
220,676
|
$
|
253,998
|
$
|
38,245
|
|
(1) |
As of December 31, 2018, we had an aggregate principal amount of $534.9 million of indebtedness outstanding under our loan facilities and our Bond.
Estimated interest payments represent projected interest payments on our long-term debt, which are based on the weighted average LIBOR rate in 2018 plus the margin of our loan agreements in 2018 and the fixed interest rate of our
Bond.
|
|
(2) |
Our agreement with Steamship (formerly Diana Enterprises Inc.) dated April 1, 2018, as amended on November 21, 2018 expires on March 31, 2019.
|
|
(3) |
On February 24, 2014 we completed an offering of 2,600,000 shares of Series B Perpetual Preferred Stock, at the price of $25.0 per share, and dividends are
payable at a rate equal to 8.875% per annum. At any time on or after February 14, 2019, the Series B Preferred Shares may be redeemed, in whole or in part, at a redemption price of $25.00 per share, plus an amount equal to all
accumulated and unpaid dividends thereon to the date of redemption, whether or not declared. The table above presents our obligations for dividend payments until February 14, 2019, which was the optional redemption date of the
preferred stock.
|
|
G. |
Safe Harbour
|
|
A. |
Directors and Senior Management
|
Name
|
|
Age
|
|
Position
|
Simeon Palios
|
|
77
|
|
Class I Director, Chief Executive Officer and Chairman
|
Anastasios Margaronis
|
|
63
|
|
Class I Director and President
|
Ioannis Zafirakis
|
|
47
|
|
Class I Director, Chief Strategy Officer and Secretary
|
Andreas Michalopoulos
|
47
|
Class III Director, Chief Financial Officer and Treasurer
|
||
Semiramis Paliou
|
|
44
|
|
Class III Director, Chief Operating Officer
|
Maria Dede
|
46
|
Chief Accounting Officer
|
||
William (Bill) Lawes
|
|
75
|
|
Class II Director
|
Konstantinos Psaltis
|
|
80
|
|
Class II Director
|
Kyriacos Riris
|
|
69
|
|
Class II Director
|
Apostolos Kontoyannis
|
|
70
|
|
Class III Director
|
Konstantinos Fotiadis
|
|
68
|
|
Class III Director
|
Christos Glavanis
|
|
65
|
|
Class I Director
|
|
B. |
Compensation
|
|
C. |
Board Practices
|
|
D. |
Employees
|
|
Year Ended December 31,
|
|||||||||||
|
2018
|
2017
|
2016
|
|||||||||
Shoreside
|
115
|
93
|
95
|
|||||||||
Seafaring
|
926
|
1,006
|
923
|
|||||||||
Total
|
1,041
|
1,099
|
1,018
|
|
E. |
Share Ownership
|
|
A. |
Major Shareholders
|
Title of Class
|
|
Identity of Person or Group
|
|
Number of
Shares Owned
|
|
Percent of Class
|
*
|
Common Stock, par value $0.01
|
|
Simeon Palios (1)
|
|
15,513,891
|
|
14.7%
|
|
Anastasios Margaronis (2)
|
6,365,438
|
6%
|
|||||
Franklin Resources Inc. (3)
|
11,561,800
|
11.1%
|
|||||
Kopernik Global Investors, LLC (4)
|
7,540,217
|
7.3%
|
|||||
Hosking Partners LLP (5)
|
5,307,060
|
5.1%
|
|||||
|
|
All officers and directors as a group (6)
|
|
28,028,846
|
|
26.5%
|
|
(1) |
Mr. Simeon Palios indirectly may be deemed to beneficially own 15,513,891
shares beneficially owned by Steamship Shipbroking Enterprises Inc. (formerly Diana Enterprises Inc.), including 15,339,690 shares beneficially owned through Taracan Investments S.A. and 174,201 shares beneficially owned through
Limon Compania Financiera S.A., as the result of his ability to control the vote and disposition of such entities. As of December 31, 2016, 2017 and 2018, Mr. Simeon Palios owned indirectly 22.2%, 22.5% and 24.3%, respectively, of
our outstanding common stock.
Additionally, on January 31, 2019, we issued 10,675 shares of newly designated Series C Preferred Stock, par value $0.01 per share, to Taracan. The Series C Preferred Stock will vote with our
common shares and each share of the Series C Preferred Stock shall entitle the holder thereof to 1,000 votes on all matters submitted to a vote of the common stockholders of the Issuer. Through his beneficial ownership of common
shares and shares of Series C Preferred Stock, Palios currently controls 22.5% of the vote of any matter submitted to the vote of the common shareholders.
|
|
(2) |
Mr. Anastasios Margaronis, our President and a member of our board of directors may be deemed to beneficially own an aggregate of
6,365,438 shares through Anamar Investments Inc. as the result of his ability to control the vote and disposition of such entity.
|
|
(3) |
This information is derived from a Schedule 13G/A filed with the SEC on January 25, 2019, adjusting the percentage figure based on the common shares issued
and outstanding as of the date of this report.
|
|
(4) |
This information is derived from a Schedule 13G/A filed with the SEC on February 13, 2019, adjusting the percentage figure based on the common shares issued
and outstanding as of the date of this report.
|
|
(5) |
This information is derived from a Schedule 13G filed with the SEC on January 24, 2019, adjusting the percentage figure based on the common shares issued
and outstanding as of the date of this report.
|
|
(6) |
Mr. Simeon Palios and Mr. Anastasios Margaronis are our only directors or
officers that beneficially own 5% or more of our outstanding common stock. Mr. Andreas Michalopoulos may be deemed to beneficially own 1,955,405 shares, or 1.8% of our outstanding common stock, beneficially owned through Mitzela
Corp.; Mr. Ioannis Zafirakis may be deemed to beneficially own 1,955,182 shares, or 1.8%
of our outstanding common stock, beneficially owned through
Abra Marinvest Inc.; and Mrs. Semiramis Paliou may be deemed to beneficially own 1,106,691 shares, or 1%
of our outstanding common stock,
beneficially owned through 4 Sweet Dreams S.A. All other officers and directors each own less than 1% of our outstanding common stock. In addition, Abra Marinvest Inc. owns 55,390, or 2.1% of the outstanding Series B Preferred
Shares, Mitzela Corp owns 45,000, or 1.7% of the outstanding Series B Preferred Shares and Mr. Anastasios Margaronis owns indirectly 28,025, or 1.1% of the outstanding Series B Preferred Shares. All officers and directors as a group
own 133,575, or 5.1% of our outstanding Series B Preferred Shares.
|
|
B. |
Related Party Transactions
|
|
C. |
Interests of Experts and Counsel
|
|
A. |
Consolidated statements and other financial information
|
|
B. |
Significant Changes
|
|
A. |
Offer and Listing Details
|
|
B. |
Plan of distribution
|
|
C. |
Markets
|
|
D. |
Selling Shareholders
|
|
E. |
Dilution
|
|
F. |
Expenses of the Issue
|
|
A. |
Share capital
|
|
B. |
Memorandum
and articles of association
|
|
C. |
Material contracts
|
|
D. |
Exchange Controls
|
|
E. |
Taxation
|
|
(1) |
It is organized in a qualified foreign country which, as defined, is one that grants an equivalent exemption from tax to corporations organized in the
United States in respect of the Shipping Income for which exemption is being claimed under Section 883 of the Code, or the “Country of Organization Requirement”; and
|
|
(2) |
It can satisfy any one of the following two stock ownership requirements:
|
|
● |
more than 50% of its stock, in terms of value, is beneficially owned by qualified shareholders which, as defined, includes individuals who are residents of
a qualified foreign country, or the “50% Ownership Test”; or
|
|
● |
its stock is “primarily and regularly” traded on an established securities market located in the United States or a qualified foreign country, or the
“Publicly Traded Test”.
|
|
● |
at least 75% of the Company’s gross income for such taxable year consists of passive income (e.g., dividends, interest, capital gains and rents derived
other than in the active conduct of a rental business), or
|
|
● |
at least 50% of the average value of the assets held by the corporation during such taxable year produce, or are held for the production of, such passive
income.
|
|
● |
the excess distribution or gain would be allocated ratably over the Non-Electing Holder’s aggregate holding period for the common stock;
|
|
● |
the amount allocated to the current taxable year and any taxable years before the Company became a PFIC would be taxed as ordinary income; and
|
|
● |
the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer
for that year, and an interest charge for the deemed tax deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year.
|
|
● |
the gain is effectively connected with the Non-U.S. Holder’s conduct of a trade or business in the United States. If the Non-U.S. Holder is entitled to the
benefits of a U.S. income tax treaty with respect to that gain, the gain is taxable in the United States only if attributable to a permanent establishment maintained by the Non-U.S. Holder in the United States; or
|
|
● |
the Non-U.S. Holder is an individual who is present in the United States for 183 days or more during the taxable year of disposition and other conditions
are met.
|
|
● |
fails to provide an accurate taxpayer identification number;
|
|
● |
is notified by the IRS that he has failed to report all interest or dividends required to be shown on his U.S. federal income tax returns; or
|
|
● |
in certain circumstances, fails to comply with applicable certification requirements.
|
|
F. |
Dividends and paying agents
|
|
G. |
Statement by experts
|
|
E. | H. | Documents on display |
|
I. |
Subsidiary information
|
Item 13. |
Defaults, Dividend Arrearages and Delinquencies
|
Item 14. |
Material Modifications to the Rights of Security Holders and Use of Proceeds
|
Item 15. |
Controls and Procedures
|
Item 16A. |
Audit Committee Financial Expert
|
Item 16B. |
Code of Ethics
|
Item 16C. |
Principal Accountant Fees and Services
|
Item 16D. |
Exemptions
from the Listing Standards for Audit Committees
|
Item 16E. |
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
|
Item 16F. |
Change in
Registrant’s
Certifying Accountant
|
Item 16G. |
Corporate
Governance
|
Item 16H. |
Mine Safety Disclosure
|
Item 17. |
Financial Statements
|
Item 18. |
Financial Statements
|
Item 19. |
Exhibits
|
Exhibit
Number
|
Description
|
1.1
|
|
1.2
|
|
2.1
|
|
2.2
|
|
2.3
|
|
2.4
|
|
2.5
|
|
2.6
|
|
2.7
|
|
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
|
Loan Agreement, dated March 17, 2015, by and among Knox Shipping Company Inc., Bokak Shipping Company Inc., Jemo Shipping Company Inc., Guam Shipping Company Inc., Palau Shipping
Company Inc., Makur Shipping Company
Inc.,
Mandaringina Inc., Vesta Commercial, S.A., the Banks and Financial Institutions listed therein, Nordea Bank Finland Plc and Nordea Bank AB, London Branch (12)
|
4.14
|
|
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
|
|
8.1
|
|
11.1
|
|
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, 2018, formatted in
eXtensible Business Reporting Language (XBRL): (i) Consolidated Balance Sheets as of December 31, 2017 and 2018; (ii) Consolidated Statements of Operations for the years ended December 31, 2016, 2017 and 2018; (iii) Consolidated
Statements of Comprehensive Income/(Loss) for the years ended December 31, 2016, 2017 and 2018; (iv) Consolidated Statements of Stockholders' Equity for the years ended December 31, 2016, 2017 and 2018; (v) Consolidated Statements of Cash
Flows for the years ended December 31, 2016, 2017 and 2018; and (v) the Notes to Consolidated Financial Statements
|
**
|
Filed herewith.
|
(1)
|
Filed as Exhibit 1 to the Company's Form 6-K filed on May 29, 2008.
|
(2)
|
Filed as Exhibit 3.1 to the Company's Form 6-K filed on February 13, 2014.
|
(3)
|
Filed as Exhibit 3.3 to the Company's Form 8-A filed on February 13, 2014.
|
(4)
|
Filed as Exhibit 3.1 to the Company's Form 8-A12B/A filed on January 15, 2016.
|
(5)
|
Filed as Exhibit 4.1 to the Company's Form 6-K filed on May 28, 2015.
|
(6)
|
Filed as Exhibit 4.2 to the Company's Form 6-K filed on May 28, 2015.
|
(7)
|
Filed as Exhibit 4.1 to the Company's Form 8-A12B/A filed on January 15, 2016.
|
(8)
|
Filed as an Exhibit to the Company's Registration Statement (File No. 123052) on March 1, 2005.
|
(9)
|
Filed as an Exhibit to the Company's Amended Registration Statement (File No. 123052) on March 15, 2005.
|
(10)
|
Reserved.
|
(15)
|
Filed as an Exhibit to the Company’s Annual Report filed on Form 20-F on February 17, 2017.
|
(16)
|
Filed as Exhibit 4.1 to the Company's Form 8-A12B filed on February 13, 2014.
|
(17)
|
Filed as an Exhibit to the Company’s Annual Report filed on Form 20-F on March 31, 2011.
|
(18)
|
Filed as an Exhibit to the Company’s Form 6-K filed on February 6, 2019.
|
(19)
|
Filed as an Exhibit to the Company’s Annual Report filed on Form 20-F on March 16, 2018.
|
Page
|
||
Report of Independent Registered Public Accounting Firm
|
F-2
|
|
Report of Independent Registered Public Accounting Firm
|
F-3
|
|
Consolidated Balance Sheets as of December 31, 2018 and 2017
|
F-5
|
|
Consolidated Statements of Operations for the years ended December 31, 2018, 2017 and 2016
|
F-6
|
|
Consolidated Statements of Comprehensive Income/(Loss) for the years ended December 31, 2018, 2017 and 2016
|
F-6
|
|
Consolidated Statements of Stockholders' Equity for the years ended December 31, 2018, 2017 and 2016
|
F-7
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2018, 2017 and 2016
|
F-8
|
|
Notes to Consolidated Financial Statements
|
F-9
|
|
DIANA SHIPPING INC.
|
||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||||||
For the years ended December 31, 2018, 2017 and 2016
|
||||||||||||
(Expressed in thousands of U.S. Dollars – except for share and per share data)
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
REVENUES:
|
||||||||||||
Time charter revenues
|
$
|
226,189
|
$
|
161,897
|
$
|
114,259
|
||||||
EXPENSES:
|
||||||||||||
Voyage expenses
|
7,405
|
8,617
|
13,826
|
|||||||||
Vessel operating expenses
|
95,510
|
90,358
|
85,955
|
|||||||||
Depreciation and amortization of deferred charges
|
52,206
|
87,003
|
81,578
|
|||||||||
General and administrative expenses
|
29,518
|
26,332
|
25,510
|
|||||||||
Management fees to related party (Notes 3(b) and 4(d))
|
2,394
|
1,883
|
1,464
|
|||||||||
Impairment loss (Note 5)
|
-
|
442,274
|
-
|
|||||||||
Loss from sale of vessels (Note 5)
|
1,448
|
-
|
-
|
|||||||||
Insurance recoveries, net of other loss (Note 5)
|
-
|
(10,879
|
)
|
-
|
||||||||
Gain on contract termination
|
-
|
-
|
(5,500
|
)
|
||||||||
Other loss/(gain)
|
(542
|
)
|
296
|
(253
|
)
|
|||||||
Operating income/(loss)
|
$
|
38,250
|
$
|
(483,987
|
)
|
$
|
(88,321
|
)
|
||||
OTHER INCOME / (EXPENSES):
|
||||||||||||
Interest and finance costs (Note 10)
|
(30,506
|
)
|
(26,628
|
)
|
(21,949
|
)
|
||||||
Interest and other income (Note 4(b))
|
8,822
|
4,508
|
2,410
|
|||||||||
Gain/(loss) from equity method investments (Note 3)
|
14
|
(5,607
|
)
|
(56,377
|
)
|
|||||||
Total other expenses, net
|
$
|
(21,670
|
)
|
$
|
(27,727
|
)
|
$
|
(75,916
|
)
|
|||
Net income/(loss)
|
$
|
16,580
|
$
|
(511,714
|
)
|
$
|
(164,237
|
)
|
||||
Dividends on series B preferred shares (Notes 9(a) and 11)
|
(5,769
|
)
|
(5,769
|
)
|
(5,769
|
)
|
||||||
Net income/(loss) attributed to common stockholders
|
$
|
10,811
|
$
|
(517,483
|
)
|
$
|
(170,006
|
)
|
||||
Earnings/(loss) per common share, basic
and diluted
(Note 11)
|
$
|
0.10
|
$
|
(5.41
|
)
|
$
|
(2.11
|
)
|
||||
Weighted average number of common
shares, basic
(Note 11)
|
103,736,742
|
95,731,093
|
80,441,517
|
|||||||||
Weighted average number of common
shares, diluted
(Note 11)
|
104,715,883
|
95,731,093
|
80,441,517
|
|||||||||
1. |
Basis of Presentation and General Information
|
Charterer
|
2018
|
2017
|
2016
|
|||
A
|
16%
|
14%
|
15%
|
|||
B
|
15%
|
17%
|
||||
C
|
14%
|
12%
|
10%
|
|||
D
|
19%
|
|||||
E
|
10%
|
10%
|
2. |
Significant Accounting Policies
|
3. |
Investments in related parties
|
4. |
Transactions with related parties
|
5. |
Vessels, net book value
|
Vessel Cost
|
Accumulated Depreciation
|
Net Book Value
|
||||||||||
Balance, December 31, 2016
|
$
|
1,987,419
|
$
|
(583,507
|
)
|
$
|
1,403,912
|
|||||
- Transfer from advances for vessels under construction and acquisition and other vessel costs
|
104,858
|
-
|
104,858
|
|||||||||
- Acquisitions, improvements and other vessel costs
|
67,787
|
-
|
67,787
|
|||||||||
- Vessel disposal
|
(15,349
|
)
|
12,834
|
(2,515
|
)
|
|||||||
- Impairment charges
|
(877,484
|
)
|
438,573
|
(438,911
|
)
|
|||||||
- Depreciation for the year
|
-
|
(81,553
|
)
|
(81,553
|
)
|
|||||||
Balance, December 31, 2017
|
$
|
1,267,231
|
$
|
(213,653
|
)
|
$
|
1,053,578
|
|||||
- Improvements and other vessel costs
|
2,573
|
-
|
2,573
|
|||||||||
- Vessel disposal
|
(41,213
|
)
|
25,630
|
(15,583
|
)
|
|||||||
- Depreciation for the year
|
-
|
(49,165
|
)
|
(49,165
|
)
|
|||||||
Balance, December 31, 2018
|
$
|
1,228,591
|
$
|
(237,188
|
)
|
$
|
991,403
|
6. |
Property and equipment, net
|
Property and Equipment
|
Accumulated Depreciation
|
Net Book Value
|
||||||||||
Balance, December 31, 2016
|
$
|
26,582
|
$
|
(3,468
|
)
|
$
|
23,114
|
|||||
- Additions in property and equipment
|
104
|
-
|
104
|
|||||||||
- Depreciation for the year
|
-
|
(568
|
)
|
(568
|
)
|
|||||||
- Disposal of assets
|
(3
|
)
|
3
|
-
|
||||||||
Balance, December 31, 2017
|
$
|
26,683
|
$
|
(4,033
|
)
|
$
|
22,650
|
|||||
- Additions in property and equipment
|
252
|
-
|
252
|
|||||||||
- Depreciation for the year
|
-
|
(477
|
)
|
(477
|
)
|
|||||||
Balance, December 31, 2018
|
$
|
26,935
|
$
|
(4,510
|
)
|
$
|
22,425
|
|||||
2018
|
2017
|
|||||||
8.5% Senior Unsecured Notes
|
-
|
63,250
|
||||||
9.5% Senior Unsecured Bond
|
100,000
|
-
|
||||||
Secured Term Loans
|
434,850
|
541,543
|
||||||
Total debt outstanding
|
$
|
534,850
|
$
|
604,793
|
||||
Less related deferred financing costs
|
(4,303
|
)
|
(3,409
|
)
|
||||
Total debt, net of deferred financing costs
|
$
|
530,547
|
$
|
601,384
|
||||
Less: Current portion of long term debt, net of deferred financing costs current
|
(96,434
|
)
|
(60,763
|
)
|
||||
Long-term debt, net of current portion and deferred financing costs, non-current
|
$
|
434,113
|
$
|
540,621
|
Period
|
Principal Repayment
|
|||
Year 1
|
$
|
97,521
|
||
Year 2
|
36,132
|
|||
Year 3
|
138,744
|
|||
Year 4
|
78,717
|
|||
Year 5
|
152,254
|
|||
Year 6
|
and thereafter
|
31,482
|
||
Total
|
|
$
|
534,850
|
Period
|
Amount
|
|||
Year 1
|
$
|
131,917
|
||
Year 2
|
5,211
|
|||
Total
|
$
|
137,128
|
Number of Shares
|
Weighted Average Grant Date Price
|
|||||||
Outstanding at December 31, 2015
|
2,764,312
|
$
|
8.27
|
|||||
Granted
|
2,150,000
|
2.26
|
||||||
Vested
|
(971,646
|
)
|
8.67
|
|||||
Outstanding at December 31, 2016
|
3,942,666
|
$
|
4.89
|
|||||
Granted
|
1,310,000
|
3.95
|
||||||
Vested
|
(1,611,549
|
)
|
5.46
|
|||||
Outstanding at December 31, 2017
|
3,641,117
|
$
|
4.30
|
|||||
Granted
|
1,800,000
|
3.82
|
||||||
Vested
|
(1,679,484
|
)
|
4.38
|
|||||
Outstanding at December 31, 2018
|
3,761,633
|
$
|
4.04
|
10. |
Interest and Finance Costs
|
2018
|
2017
|
2016
|
||||||||||
Interest expense
|
$
|
28,299
|
$
|
24,978
|
$
|
19,523
|
||||||
Amortization of financing costs
|
1,939
|
1,455
|
1,503
|
|||||||||
Loan expenses
|
268
|
195
|
923
|
|||||||||
Total
|
$
|
30,506
|
$
|
26,628
|
$
|
21,949
|
11. |
Earnings/(loss) per Share
|
2018
|
2017
|
2016
|
||||||||||
Net income/(loss)
|
$
|
16,580
|
$
|
(511,714
|
)
|
$
|
(164,237
|
)
|
||||
Less dividends on series B preferred shares
|
$
|
(5,769
|
)
|
$
|
(5,769
|
)
|
$
|
(5,769
|
)
|
|||
Net income/(loss) attributed to common stockholders
|
10,811
|
(517,483
|
)
|
(170,006
|
)
|
|||||||
Weighted average number of common shares, basic
|
103,736,742
|
95,731,093
|
80,441,517
|
|||||||||
Incremental shares
|
979,141
|
-
|
-
|
|||||||||
Weighted average number of common shares, diluted
|
104,715,883
|
95,731,093
|
80,441,517
|
|||||||||
Earnings/(loss) per share, basic and diluted
|
$
|
0.10
|
$
|
(5.41
|
)
|
$
|
(2.11
|
)
|
12. |
Income Taxes
|
13. |
Financial Instruments and Fair Value Disclosures
|
14. |
Subsequent Events
|
Clause
|
Page
|
|
1
|
Interpretation
|
1
|
2
|
Loan Facility and Designated Transactions
|
21
|
3
|
Position of the Lenders and the Swap Bank
|
21
|
4
|
Drawdown
|
23
|
5
|
Interest
|
24
|
6
|
Interest Periods
|
28
|
7
|
Default Interest
|
28
|
8
|
Repayment and Prepayment
|
30
|
9
|
Conditions Precedent
|
33
|
10
|
Representations and Warranties
|
34
|
11
|
Financial Covenants
|
38
|
12
|
General Undertakings
|
39
|
13
|
Corporate Undertakings
|
45
|
14
|
Insurance
|
46
|
15
|
Ship Covenants
|
53
|
16
|
Security cover
|
60
|
17
|
Payments and Calculations
|
62
|
18
|
Application of Receipts
|
64
|
19
|
Application of Earnings
|
65
|
20
|
Events of Default
|
66
|
21
|
Fees and Expenses
|
72
|
22
|
Indemnities
|
73
|
23
|
No Set-Off or Tax Deduction
|
76
|
24
|
Illegality, etc
|
78
|
25
|
Increased Costs
|
79
|
26
|
Set-Off
|
81
|
27
|
Transfers and Changes in Lending Offices
|
82
|
28
|
Variations and Waivers
|
87
|
29
|
Notices
|
89
|
30
|
Supplemental
|
92
|
31
|
Law and Jurisdiction
|
94
|
Schedules
|
||
Schedule 1 Lenders and Commitments
|
96
|
|
Schedule 2 Guarantors
|
97
|
|
Schedule 3 Drawdown Notice
|
98
|
|
Schedule 4 Condition Precedent Documents
|
99
|
|
Part A
|
99
|
|
Part B
|
100
|
|
Schedule 5 Transfer Certificate
|
102
|
|
Schedule 6 Designation Notice
|
106
|
|
Schedule 7 Ships
|
107
|
|
Schedule 8 Form of Compliance Certificate
|
110
|
|
Execution
|
||
Execution Page
|
111
|
|
(1) |
DIANA SHIPPING INC.,
a corporation domesticated in the
Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 as
Borrower
|
(2) |
THE BANKS AND FINANCIAL INSTITUTIONS
listed in Schedule
1 (
Lenders and Commitments
), as
Lenders
|
(3) |
BNP PARIBAS
a banking corporation having its
registered office at 16 Boulevard des Italiens, 75009, Paris, France acting through its office at 35, rue de la Gare – Millénaire 4, 75019 Paris, France as
Agent
and
Security Trustee
|
(4) |
BNP PARIBAS
a banking corporation having its
registered office at 16 Boulevard des Italiens, 75009, Paris, France acting through its office at 35, rue de la Gare – Millénaire 4, 75019 Paris, France as
Bookrunner; and
|
(5) |
BNP PARIBAS
as
Swap Bank.
|
(A) |
The Lenders have agreed to make available to the Borrower a secured term loan facility in one advance for the purposes of refinancing the Existing
Indebtedness in an amount equal to the lesser of (a) $75,000,000 and (b) 70 per cent. of the aggregate Initial Market Value of the Ships and the Additional Realisable Value of the Collateral Ships.
|
(B) |
The Borrower may from time to time hedge its exposure under this Agreement to interest rate fluctuations by entering into Designated Transactions with the
Swap Bank.
|
(C) |
The Lenders and the Swap Bank have agreed to share pari passu in the security to be granted to the Security Trustee pursuant to this Agreement.
|
1 |
INTERPRETATION
|
1.1 |
Definitions
|
|
(a) |
16 July 2018 (or such later date as the Agent may, with the authorisation of the Majority Lenders, agree with the Borrower); or
|
|
(b) |
if earlier, the date on which the Total Commitments are fully borrowed, cancelled or terminated.
|
|
(a) |
the agreements on capital requirements, leverage ratio and liquidity standards contained in "Basel III: A global regulatory framework for more resilient banks
and banking systems", "Basel III: International framework for liquidity risk measurement, standards and monitoring" and "Guidance for national authorities operating the countercyclical capital buffer" published by the Basel Committee on
Banking Supervision in December 2010, each as amended, supplemented or restated from time to time;
|
|
(b) |
the rules for global systemically important banks contained in "Global systemically important banks: assessment methodology and the additional loss absorbency
requirement – Rules text" published by the Basel Committee on Banking Supervision in November 2011, as amended, supplemented or restated from time to time; and
|
|
(c) |
any further guidance or standards published from time to time by the Basel Committee on Banking Supervision relating to "Basel III".
|
|
(a) |
the amount of freely available and unencumbered credit balances on any deposit or current account (including, for the avoidance of doubt, any restricted cash
and the Minimum Liquidity Amount as defined in clause 12.19);
|
|
(b) |
the market value of transferable certificates of deposit in a freely convertible currency acceptable to the Security Trustee issued by a prime international
bank; and
|
|
(c) |
the market value of equity securities (if and to the extent that the Lenders satisfied that such equity securities are readily saleable for cash and that
there is a ready market therefor) and investment grade debt securities which are publicly traded on a major stock exchange or investment market (valued at market value as at any applicable date of determination);
|
|
(i) |
the market value of any asset specified in paragraph (b) and (c) shall be the bid price quoted for it on the relevant calculation date by the Security
Trustee; and
|
|
(ii) |
the amount or value of any asset denominated in a currency other than Dollars shall be converted into Dollars using the Lenders' spot rate for the purchase of
Dollars with that currency on the relevant calculation date.
|
|
(a) |
Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment
firms; and
|
|
(b) |
Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential
supervision of credit institutions and investment firms.
|
|
(a) |
it is entered into by the Borrower pursuant to the Master Agreement with the Swap Bank; and
|
|
(b) |
its purpose is the hedging of the Borrower's exposure under this Agreement to fluctuations in LIBOR arising from the funding of the Loan (or any part thereof)
for a period expiring no later than the final Repayment Date.
|
|
(a) |
except to the extent that they fall within paragraph (b);
|
|
(i) |
all freight, hire and passage moneys;
|
|
(ii) |
compensation payable to the relevant Guarantor or the relevant Collateral Guarantor or the Security Trustee in the event of requisition of a Ship or a
Collateral Ship for hire;
|
|
(iii) |
remuneration for salvage and towage services;
|
|
(iv) |
demurrage and detention moneys;
|
|
(v) |
damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of a Ship or a Collateral Ship; and
|
|
(vi) |
all moneys which are at any time payable under any Insurances in respect of loss of hire; and
|
|
(b) |
if and whenever a Ship or a Collateral Ship is employed on terms whereby any moneys falling within paragraphs (a)(i) to (vi) are pooled or shared with any
other person, that proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to that Ship or that Collateral Ship.
|
|
(a) |
any claim by any governmental, judicial or regulatory authority which arises out of an Environmental Incident or an alleged Environmental Incident or which
relates to any Environmental Law; or
|
|
(b) |
any claim by any other person which relates to an Environmental Incident or to an alleged Environmental Incident,
|
|
(a) |
any release of Environmentally Sensitive Material from a Ship and/or a Collateral Ship; or
|
|
(b) |
any incident in which Environmentally Sensitive Material is released from a vessel other than a Ship and/or a Collateral Ship and which involves a collision
between a Ship and/or a Collateral Ship and such other vessel or some other incident of navigation or operation, in either case, in connection with which a Ship and/or a Collateral Ship is actually or potentially liable to be arrested,
attached, detained or injuncted and/or a Ship and/or a Collateral Ship and/or a Guarantor and/or a Collateral Guarantor and/or any operator or manager of a Ship and/or a Collateral Ship is at fault or allegedly at fault or otherwise
liable to any legal or administrative action; or
|
|
(c) |
any other incident in which Environmentally Sensitive Material is released otherwise than from a Ship and/or a Collateral Ship and in connection with which a
Ship and/or a Collateral Ship is actually or potentially liable to be arrested and/or where any Guarantor and/or any Collateral Guarantor and/or any operator or manager of a Ship and/or a Collateral Ship is at fault or allegedly at
fault or otherwise liable to any legal or administrative action.
|
|
(a) |
sections 1471 to 1474 of the Code or any associated regulations;
|
|
(b) |
any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in
either case) facilitates the implementation of any law or regulation referred to in paragraph (a) above; or
|
|
(c) |
any agreement pursuant to the implementation of any treaty, law or regulation referred to in paragraphs (a) or (b) above with the US Internal Revenue Service,
the US government or any governmental or taxation authority in any other jurisdiction.
|
|
(a) |
this Agreement;
|
|
(b) |
the Agency and Trust Agreement;
|
|
(c) |
the Master Agreement;
|
|
(d) |
the Master Agreement Assignment;
|
|
(e) |
the Guarantees;
|
|
(f) |
the General Assignments;
|
|
(g) |
the Mortgages;
|
|
(h) |
the Account Pledges;
|
|
(i) |
any Charterparty Assignments;
|
|
(j) |
the Approved Manager's Undertaking;
|
|
(k) |
the Fee Letter;
|
|
(l) |
the Collateral Security Documents; and
|
|
(m) |
any other document (whether creating a Security Interest or not) which is executed at any time by the Borrower, any Guarantor, any Collateral Guarantor or any
other person as security for, or to establish any form of subordination or priorities arrangement in relation to, any amount payable to the Lenders and/or the Swap Bank under this Agreement or the Master Agreement or any of the other
documents referred to in this definition.
|
|
(a) |
for principal, interest or any other sum payable in respect of any moneys borrowed or raised by the debtor;
|
|
(b) |
under any loan stock, bond, note or other security issued by the debtor;
|
|
(c) |
under any acceptance credit, guarantee or letter of credit facility or dematerialised equivalent made available to the debtor;
|
|
(d) |
under a financial lease, a deferred purchase consideration arrangement or any other agreement having the commercial effect of a borrowing or raising of money
by the debtor;
|
|
(e) |
under any foreign exchange transaction, any interest or currency swap or any other kind of derivative transaction entered into by the debtor or, if the
agreement under which any such transaction is entered into requires netting of mutual liabilities, the liability of the debtor for the net amount; or
|
|
(f) |
any amount raised under any other transaction (including any forward sale or purchase agreement) of a type not referred to in any other paragraph of this
definition having the commercial effect of a borrowing; or
|
|
(g) |
in connection with any receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis); or
|
|
(h) |
under a guarantee, indemnity or similar obligation entered into by the debtor in respect of a liability of another person which would fall within paragraphs
(a) to (g) if the references to the debtor referred to the other person.
|
|
(a) |
all policies and contracts of insurance, including entries of the Ship and/or the Collateral Ship in any protection and indemnity or war risks association,
effected in respect of the Ship and/or the Collateral Ship, its Earnings or otherwise in relation to it whether before, on or after the date of this Agreement; and
|
|
(b) |
all rights and other assets relating to, or derived from, any of the foregoing, including any rights to a return of a premium and any rights in respect of any
claim whether or not the relevant policy, contract of insurance or entry has expired on or before the date of this Agreement.
|
|
(a) |
the applicable Screen Rate for the longest period (for which that Screen Rate is available) which is less than that Interest Period; and
|
|
(b) |
the applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds that Interest Period,
|
|
(a) |
a bank or financial institution listed in Schedule 1 (
Lenders
and Commitments
) and acting through its branch or office indicated in Schedule 1 (
Lenders and Commitments
) (or through
another branch notified to the Borrower under Clause 27.14 (
Change of lending office
) unless it has delivered a Transfer Certificate
or Certificates covering the entire amounts of its Commitment and its Contribution; and
|
|
(b) |
the holder for the time being of a Transfer Certificate.
|
|
(a) |
the applicable Screen Rate;
|
|
(b) |
(if no Screen Rate is available for that Interest Period) the Interpolated Screen Rate; or
|
|
(c) |
if:
|
|
(i) |
no Screen Rate is available for the currency of the Loan; or
|
|
(ii) |
no Screen Rate is available for that Interest Period and it is not possible to calculate an Interpolated Screen Rate,
|
|
(iii) |
the Reference Bank Rate,
|
|
(a) |
before the Loan has been made, Lenders whose Commitments total 66.66 per cent. of the Total Commitments; and
|
|
(b) |
after the Loan has been made, Lenders whose Contributions total 66.66 per cent. of the Loan.
|
|
(a) |
a Ship, the market value of that Ship
determined from time to time in
accordance with Clause 16.4 (
Valuation of Ships
); and
|
|
(b) |
a Collateral Ship, the Collateral Market Value.
|
|
(a) |
the financial condition, assets, prospects or business of the Borrower and/or any Guarantor and/or any Collateral Guarantor or on the consolidated financial
condition, assets, prospects or business of the Group; or
|
|
(b) |
the ability of the Borrower or any Guarantor or any Collateral Guarantor to perform and comply with its obligations under any Finance Documents.
|
|
(a) |
Mr. Simeon Palios;
|
|
(b) |
all the lineal descendants in direct line of Mr. Simeon Palios;
|
|
(c) |
a husband or wife, or former husband or wife, or widower or widow of any of the above persons;
|
|
(d) |
the estates or trusts of which any of the persons of paragraphs (a) and (b) are the beneficiaries; and
|
|
(e) |
each company (other than a member of the Group) legally or beneficially owned or (as the case may be) controlled by one or more of the persons or entities
which would fall within paragraphs (a) to (d) of this definition,
|
|
(a) |
Security Interests created by the Finance Documents;
|
|
(b) |
Security Interests created in favour of (amongst others) the Security Trustee by the Collateral Guarantors under or in connection with the Collateral Loan
Agreement;
|
|
(c) |
liens for unpaid master's and crew's wages in accordance with usual maritime practice;
|
|
(d) |
liens for salvage;
|
|
(e) |
liens arising by operation of law for not more than 2 months' prepaid hire under any charter in relation to a Ship and/or a Collateral Ship not prohibited by
this Agreement;
|
|
(f) |
liens for master's disbursements incurred in the ordinary course of trading and any other lien arising by operation of law or otherwise in the ordinary course
of the operation, repair or maintenance of a Ship and/or a Collateral Ship, provided such liens do not secure amounts more than 30 days overdue (unless the overdue amount is being contested by the relevant Guarantor or the relevant
Collateral Guarantor in good faith by appropriate steps) and subject, in the case of liens for repair or maintenance, to paragraph (g) of Clause 15.13 (
Restrictions on chartering, appointment of managers etc.
);
|
|
(g) |
any Security Interest created in favour of a plaintiff or defendant in any proceedings or arbitration as security for costs and expenses while the Borrower or
a Guarantor or a Collateral Guarantor is actively prosecuting or defending such proceedings or arbitration in good faith; and
|
|
(h) |
Security Interests arising by operation of law in respect of taxes which are not overdue for payment or in respect of taxes being contested in good faith by
appropriate steps and in respect of which appropriate reserves have been made.
|
|
(a) |
England and Wales;
|
|
(b) |
the country under the laws of which the company is incorporated or formed;
|
|
(c) |
a country in which the company has the centre of its main interests or which the company's central management and control is or has recently been exercised;
|
|
(d) |
a country in which the overall net income of the company is subject to corporation tax, income tax or any similar tax;
|
|
(e) |
a country in which assets of the company (other than securities issued by, or loans to, related companies) having a substantial value are situated, in which
the company maintains a branch or permanent place of business, or in which a Security Interest created by the company must or should be registered in order to ensure its validity or priority; and
|
|
(f) |
a country the courts of which have jurisdiction to make a winding up, administration or similar order in relation to the company, whether as a main or
territorial or ancillary proceedings, or which would have such jurisdiction if their assistance were requested by the courts of a country referred to in paragraphs (b) or (c).
|
|
(a) |
a mortgage, charge (whether fixed or floating) or pledge, any maritime or other lien or any other security interest of any kind;
|
|
(b) |
the security rights of a plaintiff under an action
in rem
in which the vessel concerned has been arrested or a writ has been issued or similar step taken; and
|
|
(c) |
any arrangement entered into by a person (A) the effect of which is to place another person (B) in a position which is similar, in economic terms, to the
position in which B would have been had he held a security interest over an asset of A; but this paragraph (c) does not apply to a right of set off or combination of accounts conferred by the standard terms of business of a bank or
financial institution.
|
|
(a) |
all amounts which have become due for payment by the Borrower, any Guarantor, any Collateral Guarantor or any other Security Party under the Finance Documents
have been paid;
|
|
(b) |
no amount is owing or has accrued (without yet having become due for payment) under any Finance Document;
|
|
(c) |
neither the Borrower nor any Guarantor, any Collateral Guarantor or any other Security Party has any future or contingent liability under Clauses 21 (
Fees and Expenses
), 22 (
Indemnities
)
or 23 (
No Set-Off or Tax Deduction
) or any other provision of this Agreement or another Finance Document.
|
|
(a) |
actual, constructive, compromised, agreed or arranged total loss of that Ship or that Collateral Ship;
|
|
(b) |
any expropriation, confiscation, requisition or acquisition of that Ship or that Collateral Ship, whether for full consideration, a consideration less than
its proper value, a nominal consideration or without any consideration, which is effected by any government or official authority or by any person or persons claiming to be or to represent a government or official authority (excluding a
requisition for hire for a fixed period not exceeding 1 year without any right to an extension) unless it is within 1 month redelivered to the full control of the Guarantor owning that Ship or the Collateral Guarantor owning that
Collateral Ship; and
|
|
(c) |
any arrest, capture, seizure or detention of that Ship or that Collateral Ship (including any hijacking or theft) unless it is within 1 month redelivered to
the full control of the Guarantor owning that Ship or the Collateral Guarantor owning that Collateral Ship.
|
|
(a) |
in the case of an actual loss of that Ship or that Collateral Ship, the date on which it occurred or, if that is unknown, the date when that Ship was last
heard of;
|
|
(b) |
in the case of a constructive, compromised, agreed or arranged total loss of that Ship or that Collateral Ship, the earliest of:
|
|
(i) |
the date on which a notice of abandonment is given to the insurers;
|
|
(ii) |
any condemnation of that Ship or that Collateral Ship by any tribunal or by any person or person claiming to be a tribunal; and
|
|
(iii) |
the date of any compromise, arrangement or agreement made by or on behalf of the Borrower or the Guarantor or the Collateral Guarantor (as the case may be)
owning that Ship or that Collateral Ship with that Ship's or that Collateral Ship's insurers in which the insurers agree to treat that Ship or that Collateral Ship as a total loss; and
|
|
(c) |
in the case of any other type of total loss, on the date (or the most likely date) on which it appears to the Agent that the event constituting the total loss
occurred.
|
|
(a) |
a person which is resident for tax purposes in the United States of America; or
|
|
(b) |
a person some or all of whose payments under the Finance Documents are from sources within the United States for US federal income tax purposes.
|
1.2 |
Construction of certain terms
|
1.3 |
Meaning of "month"
|
(a) |
on the Business Day following the numerically corresponding day if the numerically corresponding day is not a Business Day or, if there is no later Business
Day in the same calendar month, on the Business Day preceding the numerically corresponding day; or
|
(b) |
on the last Business Day in the relevant calendar month, if the period started on the last Business Day in a calendar month or if the last calendar month of
the period has no numerically corresponding day,
|
1.4 |
Meaning of "subsidiary"
|
(a) |
a majority of the issued shares in S (or a majority of the issued shares in S which carry unlimited rights to capital and income distributions) are directly
owned by P or are indirectly attributable to P; or
|
(b) |
P has direct or indirect control over a majority of the voting rights attached to the issued shares of S; or
|
(c) |
P has the direct or indirect power to appoint or remove a majority of the directors of S; or
|
(d) |
P otherwise has the direct or indirect power to ensure that the affairs of S are conducted in accordance with the wishes of P,
|
1.5 |
General Interpretation
|
(a) |
references to, or to a provision of, a Finance Document or any other document are references to it as amended or supplemented, whether before the date of this
Agreement or otherwise;
|
(b) |
references to, or to a provision of, any law include any amendment, extension, re-enactment or replacement, whether made before the date of this Agreement or
otherwise;
|
(c) |
words denoting the singular number shall include the plural and vice versa; and
|
(d) |
Clauses 1.1 (
Definitions
) to 1.5 (
General Interpretation
) apply unless the contrary intention appears; and
|
(e) |
A Potential Event of Default (other than an Event of Default) is "
continuing
" if it has not been remedied or waived and an Event of Default is "
continuing
" if it has not been waived.
|
1.6 |
Headings
|
2 |
LOAN FACILITY AND DESIGNATED TRANSACTIONS
|
2.1 |
Amount of facility
|
2.2 |
Lenders' participations in Loan
|
2.3 |
Purpose of Loan
|
2.4 |
Designated Transactions under the Master Agreement
|
3 |
POSITION OF THE LENDERS AND THE SWAP BANK
|
3.1 |
Interests of Creditor Parties several
|
3.2 |
Individual Creditor Parties' right of action
|
3.3 |
Proceedings by individual Creditor Party
|
(a) |
any other liability or obligation of the Borrower or a Security Party under or connected with a Finance Document; or
|
(b) |
any misrepresentation or breach of warranty by the Borrower or a Security Party in or connected with a Finance Document.
|
3.4 |
Obligations of Creditor Parties several
|
(a) |
the obligations of the other Lenders or the Swap Bank being increased; nor
|
(b) |
the Borrower, any Security Party or any other Lender or the Swap Bank being discharged (in whole or in part) from its obligations under any of the Finance
Documents,
|
3.5 |
Parties bound by certain actions of Lenders
|
(a) |
any determination made, or action taken, by the Lenders under any provision of a Finance Document;
|
(b) |
any instruction or authorisation given by the Lenders to the Agent or the Security Trustee under or in connection with any Finance Document; and
|
(c) |
any action taken (or in good faith purportedly taken) by the Agent or the Security Trustee in accordance with such an instruction or authorisation.
|
3.6 |
Reliance on action of Agent
|
(a) |
shall be entitled to assume that the Lenders have duly given any instruction or authorisation which, under any provision of a Finance Document, is required in
relation to any action which the Agent has taken or is about to take; and
|
(b) |
shall not be entitled to require any evidence that such an instruction or authorisation has been given.
|
3.7 |
Construction
|
4 |
DRAWDOWN
|
4.1 |
Request for Loan
|
4.2 |
Availability
|
(a) |
the Drawdown Date has to be a Business Day during the Availability Period; and
|
(b) |
the amount of the Loan on the Drawdown Date shall not exceed an amount equal to the lesser of (i) $75,000,000 and (ii) 70 per cent. of the aggregate Initial
Market Value of the Ships and the Additional Realisable Value and shall be used in refinancing the Existing Indebtedness.
|
4.3 |
Notification to Lenders of receipt of the Drawdown Notice
|
(a) |
the amount of the Loan and the Drawdown Date;
|
(b) |
the amount of that Lender's participation in the Loan; and
|
(c) |
the duration of the first Interest Period.
|
4.4 |
Drawdown Notice irrevocable
|
4.5 |
Lenders to make available Contributions
|
4.6 |
Disbursement of Loan
|
(a) |
to the account which the Borrower specify in the Drawdown Notice; and
|
(b) |
in the like funds as the Agent received the payments from the Lenders.
|
4.7 |
Disbursement of Loan to third party
|
5 |
INTEREST
|
5.1 |
Payment of normal interest
|
5.2 |
Normal rate of interest
|
5.3 |
Payment of accrued interest
|
5.4 |
Notification of Interest Periods and rates of normal interest
|
(a) |
each rate of interest; and
|
(b) |
the duration of each Interest Period,
|
5.5 |
Obligation of Reference Banks to quote
|
5.6 |
Absence of quotations by Reference Banks
|
5.7 |
Market disruption
|
(a) |
LIBOR is to be determined by reference to the Reference Banks and no Reference Bank does, before 1.00 p.m. (London time) on the Quotation Date for an Interest
Period, provide quotations to the Agent in order to fix LIBOR; or
|
(b) |
at least 1 Business Day before the start of an Interest Period, a Lender may notify the Agent that LIBOR fixed by the Agent would not accurately reflect the
cost to that Lender of funding its respective Contribution (or any part of it) during the Interest Period in the London Interbank Market at or about 11.00 a.m. (London time) on the Quotation Date for the Interest Period; or
|
(c) |
at least 1 Business Day before the start of an Interest Period, the Agent is notified by a Lender (the "
Affected Lender
") that for any reason it is unable to obtain Dollars in the London Interbank Market in order to fund its Contribution (or any part of it) during the Interest Period.
|
5.8 |
Notification of market disruption
|
5.9 |
Suspension of drawdown
|
(a) |
in a case falling within paragraphs (b) or (b) of Clause 5.7 (
Market
disruption
), the Lenders' obligations to make the Loan; and
|
(b) |
in a case falling within paragraph (c) of Clause 5.7 (
Market
disruption
), the Affected Lender's obligation to participate in the Loan,
|
5.10 |
Negotiation of alternative rate of interest
|
5.11 |
Application of agreed alternative rate of interest
|
5.12 |
Alternative rate of interest in absence of agreement
|
5.13 |
Notice of prepayment
|
5.14 |
Prepayment; termination of Commitments
|
(a) |
on the date on which the Agent serves that notice, the Total Commitments or (as the case may require) the Commitment of the Affected Lender shall be
cancelled; and
|
(b) |
on the last Business Day of the interest period set by the Agent, the Borrower shall prepay (without premium or penalty) the Loan or, as the case may be, the
Affected Lender's Contribution, together with accrued interest thereon at the applicable rate plus the Margin and the Mandatory Costs (if any).
|
5.15 |
Confidential Rates
|
(a) |
The Agent and the Borrower agree to keep each Confidential Rate confidential and not to disclose it to anyone, save to the extent permitted by paragraphs (b),
(c) and (d) below.
|
(b) |
The Agent may disclose:
|
|
(i) |
any Funding Rate to the Borrower pursuant to Clause 5.4 (
Notification
of Interest Periods and rates of normal interest
); and
|
|
(ii) |
any Confidential Rate to any person appointed by it to provide administration or settlement services in respect of one or more of the Finance Documents
including without limitation, in relation to the trading of participations in respect of the Finance Documents, to the extent necessary to enable such service provider to provide any of the services referred to in this paragraph (ii) if
the service provider to whom the Confidential Rate is to be given has entered into a confidentiality agreement substantially in the form of the LMA Master Confidentiality Undertaking for Use With Administration/Settlement Service
Providers or such other form of confidentiality undertaking agreed between the Agent and the relevant Reference Bank or Lender, as the case may be.
|
(c) |
The Agent may disclose any Confidential Rate, and the Borrower may disclose any Funding Rate, to:
|
|
(i) |
any of its affiliates and any of its or their officers, directors, employees, professional advisers, auditors, partners, delegates, agents, managers,
administrators, nominees, attorneys, trustees or custodians if any person to whom that Confidential Rate is to be given pursuant to this paragraph (i) is informed in writing of its confidential nature and that the Confidential Rate may
be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of that Confidential Rate or is otherwise bound by
requirements of confidentiality in relation to that Confidential Rate;
|
|
(ii) |
any person to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other
regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation if the person to whom that Confidential Rate is to be given is informed in writing of its confidential nature
and that the Confidential Rate may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of the Agent or the Borrower, as the case may be, it is not practicable to do so in the
circumstances;
|
|
(iii) |
any person to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other
investigations, proceedings or disputes if the person to whom that Confidential Rate is to be given is informed in writing of its confidential nature and that the Confidential Rate may be price-sensitive information except that there
shall be no requirement to so inform if, in the opinion of the Agent or the Borrower, as the case may be, it is not practicable to do so in the circumstances; and
|
|
(iv) |
any person with the consent of the relevant Reference Bank or Lender, as the case may be.
|
(d) |
The Agent's obligations in this Clause 5.15 (
Confidential
Rates
) relating to quotations provided by Reference Banks are without prejudice to its obligations to make notifications under Clause 5.4 (
Notification of Interest Periods and rates of normal interest
) provided that (other than pursuant to paragraph (b)(i) above) the Agent shall not include the details of any individual quotation provided by a Reference
Bank as part of any such notification.
|
(e) |
The Agent and the Borrower acknowledge that each Confidential Rate is or may be price-sensitive information and that the use of such a Confidential Rate may
be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and the Agent and the Borrower undertakes not to use any Confidential Rate for any unlawful purpose.
|
(f) |
The Agent and the Borrower agree (to the extent permitted by law and regulation) to inform the relevant Reference Bank or Lender, as the case may be:
|
|
(i) |
of the circumstances of any disclosure of any Confidential Rate made pursuant to paragraph (c)(ii) above except where such disclosure is made to any of the
persons referred to in that paragraph during the ordinary course of its supervisory or regulatory function; and
|
|
(ii) |
upon becoming aware that any Confidential Rate has been disclosed in breach of this Clause 5.15 (
Confidential Rates
).
|
5.16 |
Application of prepayment
|
6 |
INTEREST PERIODS
|
6.1 |
Commencement of Interest Periods
|
6.2 |
Duration of normal Interest Periods
|
(a) |
subject to sub-paragraph (b) below, 1, 3, 6 or 9 months as notified by the Borrower to the Agent not later than 11.00 a.m. (Paris time) 5 Business Days before
the commencement of the Interest Period; or
|
(b) |
3 months, if the Borrower fails to notify the Agent by the time specified in paragraph (a); or
|
(c) |
such other period as the Agent may, with the authorisation of all the Lenders, agree with the Borrower.
|
6.3 |
Duration of Interest Periods for Repayment Instalments
|
6.4 |
Non-availability of matching deposits for Interest Period selected
|
7 |
DEFAULT INTEREST
|
7.1 |
Payment of default interest on overdue amounts
|
(a) |
the date on which the Finance Documents provide that such amount is due for payment; or
|
(b) |
if a Finance Document provides that such amount is payable on demand, the date on which the demand is served; or
|
(c) |
if such amount has become immediately due and payable under Clause 20.4 (
Acceleration of Loan
), the date on which it became immediately due and payable.
|
7.2 |
Default rate of interest
|
(a) |
in the case of an overdue amount of principal, the higher of the rates set out at paragraphs (a) and (b) of Clause 7.3 (
Calculation of default rate of interest
); or
|
(b) |
in the case of any other overdue amount, the rate set out at paragraph (b) of Clause 7.3 (
Calculation of default rate of interest
).
|
7.3 |
Calculation of default rate of interest
|
(a) |
the rate applicable to the overdue principal amount immediately prior to the relevant date (but only for any unexpired part of any then current Interest
Period applicable to it);
|
(b) |
the aggregate of the applicable Margin and the Mandatory Cost (if any) plus, in respect of successive periods of any duration (including at call) up to 3
months which the Agent may select from time to time:
|
|
(i) |
LIBOR; or
|
|
(ii) |
if the Agent (after consultation with the Reference Bank) determines that Dollar deposits for any such period are not being made available to the Reference
Bank by leading banks in the London Interbank Market in the ordinary course of business, a rate from time to time determined by the Agent by reference to the cost of funds to the Reference Bank from such other sources as the Agent
(after consultation with the Reference Bank) may from time to time determine.
|
7.4 |
Notification of Interest Periods and default rates
|
7.5 |
Payment of accrued default interest
|
7.6 |
Compounding of default interest
|
7.7 |
Application to Master Agreement
|
8 |
REPAYMENT AND PREPAYMENT
|
8.1 |
Amount of Repayment Instalments
|
(a) |
20 consecutive quarterly instalments, each in an amount of $1,562,500 (the "
Repayment Instalments
" and each a "
Repayment Instalment
"); and
|
(b) |
a balloon instalment of $43,750,000 (the "
Balloon Instalment
"),
|
8.2 |
Repayment Dates
|
(a) |
the fifth anniversary after the Drawdown Date; and
|
(b) |
17 July 2023.
|
8.3 |
Final Repayment Date
|
8.4 |
Voluntary prepayment
|
8.5 |
Conditions for voluntary prepayment
|
(a) |
a partial prepayment shall be $1,000,000 or a multiple of $1,000,000;
|
(b) |
the Agent has received from the Borrower at least 10 Business Days' prior written notice specifying the amount to be prepaid and the date on which the
prepayment is to be made;
|
(c) |
the Borrower has provided evidence satisfactory to the Agent that any consent required by the Borrower, any Guarantor, any Collateral Guarantor or any other
Security Party in connection with the prepayment has been obtained and remains in force, and that any official regulation relevant to this Agreement which affects the Borrower, any Guarantor, any Collateral Guarantor or any other
Security Party has been complied with;
|
(d) |
the Borrower has complied with Clause 8.12 (
Unwinding of
Designated Transactions
) on or prior to the date of prepayment; and
|
(e) |
the Borrower has provided evidence satisfactory to the Agent that they have sufficient funds to pay any breakage costs and/or any other amounts that may
become payable under this Agreement and the Master Agreement in connection with the prepayment.
|
8.6 |
Effect of notice of prepayment
|
8.7 |
Notification of notice of prepayment
|
8.8 |
Mandatory prepayment
|
(a) |
in the case of a sale, on or before the date on which the sale is completed by delivery of (as the case may be) the relevant Ship to the buyer; or
|
(b) |
in the case of a Total Loss of a Ship, on the earlier of the date falling 120 days after the Total Loss Date of that Ship and the date of receipt by the
Security Trustee of the proceeds of insurance relating to such Total Loss.
|
8.9 |
Amounts payable on prepayment
|
8.10 |
Application of partial prepayment
|
(a) |
if made pursuant to Clause 8.4 (
Voluntary prepayment
),
pro rata against the then outstanding Repayment Instalments and the Balloon Instalment or as otherwise agreed between the Borrower and the Agent;
|
(b) |
if made pursuant to Clause 8.8 (
Mandatory prepayment
):
|
|
(i) |
FIRSTLY: pro rata against the then outstanding Repayment Instalments and the Balloon Instalment and the Swap Exposure under the Master Agreement;
|
|
(ii) |
SECONDLY: pro rata towards repayment of any overdue interest, any breakage costs, any accrued interest relating to the Loan, any other costs, fees, expenses,
commissions due under this Agreement and any periodical payments (other than any payments arising out of a termination or closing out) under the Master Agreement; and
|
|
(iii) |
THIRDLY: any remaining proceeds of the sale or Total Loss of a Ship after the prepayments referred to in sub paragraphs (i) and (ii) of paragraph (b) above
have been made together with all other amounts that are payable on any such prepayment pursuant to the Finance Documents shall be paid to the Guarantor that owned the relevant Ship
Provided that
no Event of Default or Potential Event of Default has occurred and is continuing at any relevant time and unless the relevant Ship, at the time of its sale or Total Loss,
is more than 10 years old in which case all of the proceeds of the sale or Total Loss of that Ship shall be applied against the prepayment of the Loan and the Swap Exposure in accordance with paragraph (a) above.
|
8.11 |
No reborrowing and cancellation
|
(a) |
No amount repaid or prepaid may be re-borrowed.
|
(b) |
Any amount of the Loan not drawn on the Drawdown Date shall be automatically cancelled.
|
8.12 |
Unwinding of Designated Transactions
|
8.13 |
Prepayment of Swap benefit
|
8.14 |
Sale or Total Loss of a Collateral Ship
|
(a) |
the sale or Total Loss of a Collateral Ship, the Borrower shall not be required to make any prepayments under this Agreement;
|
(b) |
the sale of a Collateral Ship, the Security Trustee shall permit the sale of that
Collateral Ship subject to receiving from the Collateral Guarantor a written notice of at least 10 days prior to such sale and the Security Trustee
will, subject to being indemnified to its satisfaction against the cost of
doing so, release the Collateral Guarantor owning that Collateral Ship from all its obligations and liabilities under the Collateral Security Documents
Provided that
no Event of Default has occurred and is continuing at the time of the release nor will result from such release; and
|
(c) |
the Total Loss of a Collateral Ship, the Collateral Guarantor owning that Collateral Ship shall subject to the terms of the Collateral Loan Agreement and the
general assignment and other finance documents executed in connection with the Collateral Loan Agreement be entitled to receive the total amount of the proceeds of insurance relating to such Total Loss
Provided that
no Event of Default has occurred and is continuing on the Total Loss Date and on the date of receipt by the Collateral Guarantor of the proceeds of
insurance relating to such Total Loss.
|
9 |
CONDITIONS PRECEDENT
|
9.1 |
Documents, fees and no default
|
(a) |
that, on or before the date of this Agreement, the Agent receives:
|
|
(i) |
the documents described in Part A of Schedule 4 (
Condition
Precedent Documents
) in a form and substance satisfactory to the Agent and its lawyers;
|
|
(ii) |
the structuring fee and the annual account bank fee referred to in Clause 21 (
Fees and Expenses
); and
|
|
(iii) |
payment in full of any expenses payable pursuant to Clause 21 (
Fees and Expenses
) which are due and payable on the date of this Agreement;
|
(b) |
that, on the Drawdown Date but prior to the making of the Loan, the Lender receives or is satisfied that it will receive on the Drawdown Date the documents
described in Part B of
|
(c) |
that both at the date of the Drawdown Notice and at the Drawdown Date:
|
|
(i) |
no Event of Default or Potential Event of Default has occurred or would result from the borrowing of the Loan;
|
|
(ii) |
the representations and warranties in Clause 10.1 (
General
)
and those of the Borrower or any Guarantor or any Collateral Guarantor or any other Security Party which are set out in the other Finance Documents would be true and not misleading if repeated on each of those dates with reference to
the circumstances then existing; and
|
|
(iii) |
none of the circumstances contemplated by Clause 5.7 (
Market
disruption
) has occurred and is continuing; and
|
|
(iv) |
there has been no Material Adverse Effect since 30 March 2018;
|
(d) |
that, if the ratio set out in Clause 16.1 (
Minimum required
security cover
) were applied immediately following the making of the Loan, the Borrower would not be obliged to provide additional security or prepay part of the Loan under that Clause; and
|
(e) |
that the Agent has received, and found to be acceptable to it, any further opinions, consents, agreements and documents in connection with the Finance
Documents which the Agent may, with the authorisation of the Majority Lenders, request by notice to the Borrower prior to the Drawdown Date.
|
9.2 |
Waiver of conditions precedent
|
10 |
REPRESENTATIONS AND WARRANTIES
|
10.1 |
General
|
10.2 |
Status
|
10.3 |
Shares capital and ownership
|
(a) |
The Borrower is authorised to issue 200,000,000 registered shares of a par value of US$0.01 per share and 25 million registered preferred shares each with a
par value of US$0.01, out of which (preferred shares) 1,000,000 are designated as series A preferred shares and 5,000,000 are designated as series B preferred shares.
|
(b) |
Each Guarantor and each Collateral Guarantor is authorised to issue the number of shares set out opposite its name in Schedule 2 (
Guarantors
) all of which shares have been issued fully paid, and the legal title and beneficial ownership of all those shares is held, free of any
Security Interest or other claim, by the Borrower.
|
10.4 |
Corporate power
|
(a) |
to execute the Finance Documents to which that Borrower is a party; and
|
(b) |
to borrow under this Agreement and to enter into Designated Transactions under the Master Agreement and to make all the payments contemplated by, and to
comply with, the Finance Documents to which the Borrower is a party and the Master Agreement.
|
10.5 |
Consents in force
|
10.6 |
Legal validity; effective Security Interests
|
(a) |
constitute the Borrower's legal, valid and binding obligations enforceable against the Borrower in accordance with their respective terms; and
|
(b) |
create legal, valid and binding Security Interests enforceable in accordance with their respective terms over all the assets to which they, by their terms,
relate,
|
10.7 |
No third party Security Interests
|
(a) |
the Borrower will have the right to create all the Security Interests which any Finance Document to which it is a party purports to create; and
|
(b) |
no third party will have any Security Interest (except for Permitted Security Interests) or any other interest, right or claim over, in or in relation to any
asset to which any such Security Interest, by its terms, relates.
|
10.8 |
No conflicts
|
(a) |
any law or regulation; or
|
(b) |
the constitutional documents of the Borrower; or
|
(c) |
any contractual or other obligation or restriction which is binding on the Borrower or any of its assets.
|
10.9 |
No withholding taxes
|
10.10 |
Deduction of Tax
|
10.11 |
No default
|
10.12 |
Information
|
10.13 |
No litigation
|
10.14 |
Compliance with certain undertakings
|
10.15 |
Taxes paid
|
10.16 |
No bribery, corruption or money laundering
|
(a) |
Without prejudice to the generality of Clause 2.3 (
Purpose of
Loan
), in relation to the borrowing by the Borrower of the Loan, the performance and discharge of its obligations and liabilities under the Finance Documents, and the transactions and other arrangements affected or contemplated
by the Finance Documents to which the Borrower is a party, the Borrower confirms (i) that it is acting for its own account; (ii) that it will use the proceeds of the Loan for its own benefit, under its full responsibility and
exclusively for the purposes specified in this Agreement; and (iii) that the foregoing will not involve or lead to a contravention of any law, official requirement or other regulatory measure or procedure implemented to combat "money
laundering" (as defined in Article 1 of Directive 2005/60/EC of the European Parliament and of the Council).
|
(b) |
The Borrower confirms that no Relevant Party nor any of their subsidiaries, nor any of their respective directors, officers, employees, (nor, to the best
knowledge of such Relevant Party, any of their affiliates, agents or representatives) has engaged in any activity or conduct which would violate any applicable anti-bribery, anti-corruption or anti-money laundering laws or regulations
in any applicable jurisdiction and that each Relevant Party has instituted and maintains policies and procedures designated to prevent violation of such laws, regulations and rules.
|
10.17 |
ISM Code, ISPS Code Compliance and Environmental Laws
|
10.18 |
No immunity
|
10.19 |
Sanctions
|
(a) |
Neither the Borrower nor any of the Security Parties, or any of their subsidiaries, their respective directors and officers, any affiliate, agent or employee
of the Borrower or any of the Security Parties is an individual or entity ("
Person
"), that is, or is directly or indirectly owned or
controlled by Persons that are: (i) the target of any Sanctions (a "
Sanctioned Person
") or (ii) located, organized or resident in a
country or territory that is, or whose government is, the subject of Sanctions broadly prohibiting dealings with such government, country, or territory (a "
Sanctioned Country
").
|
(b) |
No Relevant Party nor any of their subsidiaries, nor any of their respective directors, officers, employees (nor, to the knowledge of such Relevant Party, any
of their affiliates, agents or representatives) has taken any action resulting in a violation by such persons of Sanctions or which constitutes or would constitute any such violation by the Borrower, a Creditor Party or any Security
Party.
|
10.20 |
Repetition
|
(a) |
on the date of service of the Drawdown Notice;
|
(b) |
on the Drawdown Date; and
|
(c) |
on the first day of each Interest Period (other than in the case of representations and warranties set out in Clause 10.13 (
No litigation
)),
|
11 |
FINANCIAL COVENANTS
|
11.1 |
General
|
11.2 |
Financial Covenants
|
(a) |
the Market Value Adjusted Net Worth of the Borrower shall not be less than 25 per cent. of the Market Value Adjusted Total Assets;
|
(b) |
the ratio of Consolidated Net Debt to Market Value Adjusted Total Assets less the aggregate amount of Cash and Cash Equivalents shall not exceed 65 per cent.;
and
|
(c) |
the aggregate of all Cash and Cash Equivalents shall not be less than $500,000 per Fleet Vessel (including, for the avoidance of doubt, the Minimum Liquidity
Amount required to be maintained pursuant to Clause 12.19 (
Borrower's Minimum Liquidity
).
|
11.3 |
Compliance Check
|
(a) |
in the case of the compliance check as at 30 June in that financial year, the unaudited statements of the Group for the 6-month period ending on that date
(commencing with the financial statements for the 6-month period which ending on 30 June 2018) delivered, in each case, to the Agent pursuant to paragraph (b) Clause 12.6 (
Provision of financial statements
); and
|
(b) |
in the case of the compliance check as at 31 December in that financial year (commencing with the financial statements for the financial year which ends on 31
December 2017), the annual audited consolidated financial statements of the Group for that Financial Year delivered, in each case, to the Agent pursuant to paragraph (a) of Clause 12.6 (
Provision of financial statements
).
|
11.4 |
Change in accounting expressions and policies
|
12 |
GENERAL UNDERTAKINGS
|
12.1 |
General
|
12.2 |
Title and negative pledge
|
(a) |
The Borrower shall:
|
|
(i) |
not create or permit to arise any Security Interest (except for Permitted Security Interests) over any asset which is the subject of any of the Finance
Documents; and
|
|
(ii) |
procure that its liabilities under this Agreement will rank pari passu with all its other present and future unsecured liabilities, except for liabilities
which are mandatorily preferred by law.
|
(b) |
The Borrower shall procure that each Guarantor and each Collateral Guarantor will:
|
|
(i) |
hold the legal title to, and own the entire beneficial interest in the Ship or, as the case may be, Collateral Ship owned by it, her Insurances and Earnings,
free from all Security Interests and other interests and rights of every kind, except for those created by the Finance Documents and the effect of assignments contained in the Finance Documents or, as the case may be under or in
connection with the Collateral Loan Agreement; and
|
|
(ii) |
not create or permit to arise any Security Interest (except for Permitted Security Interests) over any other asset, present or future; and
|
|
(iii) |
procure that its liabilities under the Finance Documents to which it is party do and will rank at least pari passu with all other present and future unsecured
liabilities, except for liabilities which are mandatorily preferred by law.
|
12.3 |
No disposal of assets
|
(a) |
all or a substantial part of its assets, whether by one transaction or a number of transactions, whether related or not; or
|
(b) |
any debt payable to it or any other right (present, future or contingent right) to receive a payment, including any right to damages or compensation,
|
|
(i) |
any sale, transfer or other disposal of a Collateral Ship as to which Clause 8.14
(Sale or Total Loss of a Collateral Ship)
applies; and
|
|
(ii) |
any charter of a Ship or a Collateral Ship as to which with Clause 15.13 (
Restrictions on chartering, appointment of managers etc.
) applies.
|
12.4 |
No other liabilities or obligations to be incurred
|
(a) |
The Borrower will not incur any Financial Indebtedness to another member of the Group unless such Financial Indebtedness is fully subordinated to this
Agreement and the Borrower shall, promptly following the Agent's demand, execute or procure the execution of any documents which the Agent specifies to create or maintain the subordination of the rights of the relevant member of the
Group against the Borrower to those of the Creditor Parties under the Finance Documents on terms in all respects acceptable to the Agent (acting with the authorisation of the Majority Lenders).
|
(b) |
The Borrower shall procure that neither a Guarantor and nor a Collateral Guarantor will incur any liability or obligation except:
|
|
(i) |
liabilities and obligations under the Finance Documents to which it is a party;
|
|
(ii) |
liabilities and obligations of the Collateral Guarantors under the Finance Documents (as such term is defined in the Collateral Loan Agreement) to which it is
a party until the Drawdown Date;
|
|
(iii) |
liabilities or obligations reasonably incurred in the ordinary course of owning, operating and chartering the Ship or, as the case may be, Collateral Ship
owned by it; and
|
|
(iv) |
Financial Indebtedness to the Borrower or any other member of the Group or any of their affiliates (the "
Relevant Entity
") unless such Financial Indebtedness is fully subordinated to the Loan and the Swap Exposure and each Guarantor and each Collateral Guarantor shall, promptly following
the Agent's demand, execute or procure the execution of any documents which the Agent specifies to create or maintain the subordination of the rights of the Relevant Entity against that Borrower to those of the Creditor Parties under
the Finance Documents on terms in all respects acceptable to the Agent (acting with the authorisation of the Majority Lenders).
|
12.5 |
Information provided to be accurate
|
12.6 |
Provision of financial statements
|
(a) |
as soon as possible, but in no event later than 180 days after the end of each financial year of the Borrower (commencing with the financial year ending on 31
December 2017), the audited consolidated financial statements of the Borrower;
|
(b) |
as soon as possible, but in no event later than 90 days after the end of each financial half-year in each financial year of the Borrower ending on 30 June
(commencing with the half-year ending on 30 June 2017), the semi-annual unaudited consolidated financial statements of the Borrower in the form in which they were published in the relevant press release; and
|
(c) |
promptly after each request by the Agent, such further financial information about the Borrower, the Guarantors, the Collateral Guarantors, the Ships, the
Collateral Ships, the Fleet Vessels, any Security Party or the Group or any member thereof (including but not limited to, information regarding charter arrangements, Financial Indebtedness and operating expenses) as the Agent may
require.
|
12.7 |
Form of financial statements
|
(a) |
be prepared in accordance with all applicable laws and GAAP consistently applied; and
|
(b) |
give a true and fair view of the state of affairs of the Group at the date of those accounts and of their profit for the period to which those accounts
relate.
|
12.8 |
Shareholder and creditor notices
|
12.9 |
Consents
|
(a) |
for the Borrower or that Guarantor or that Collateral Guarantor to perform its obligations under any Finance Document to which it is a party;
|
(b) |
for the validity or enforceability of any Finance Document to which it is a party;
|
(c) |
for the Borrower, that Guarantor or that Collateral Guarantor to continue to own and operate the Ship or, as the case may be, Collateral Ship owned by it,
|
12.10 |
Maintenance of Security Interests
|
(a) |
at its own cost, do all that it reasonably can to ensure that any Finance Document validly creates the obligations and the Security Interests which it
purports to create; and
|
(b) |
without limiting the generality of paragraph (a) above, at its own cost, promptly register, file, record or enrol any Finance Document with any court or
authority, pay any stamp, registration or similar tax in respect of any Finance Document, give any notice or take any other step which, in the opinion of the Majority Lenders, is or has become necessary or desirable for any Finance
Document to be valid, enforceable or admissible in evidence or to ensure or protect the priority of any Security Interest which it creates.
|
12.11 |
Notification of litigation
|
12.12 |
Principal place of business
|
12.13 |
Confirmation of no default
|
(a) |
states that no Event of Default or Potential Event of Default has occurred; or
|
(b) |
states that no Event of Default or Potential Event of Default has occurred, except for a specified event or matter, of which all material details are given.
|
12.14 |
Notification of default
|
(a) |
the occurrence of an Event of Default or a Potential Event of Default; or
|
(b) |
any matter which indicates that an Event of Default or a Potential Event of Default may have occurred,
|
12.15 |
Provision of further information
|
(a) |
to any Guarantor, any Ship, any Collateral Guarantor, any Collateral Ship, the Earnings, the Insurances, any Charterparty, the Approved Manager, any Fleet
Vessel and any other member of the Group; or
|
(b) |
to any other matter relevant to, or to any provision of, a Finance Document (including, without limitation, any information requested in connection with the
Creditor Parties' and the Account Bank "Know your customer" regulations, including but not limited to information required pursuant to all applicable laws and regulations, including, without limitation, the laws of the European Union,
Switzerland and the United States of America in connection with the Borrower, any Guarantor, any Collateral Guarantor and any other Security Party and their respective beneficial owners) which may be requested by the Agent, the Security
Trustee, any Lender or the Account Bank at any time.
|
12.16 |
Provision of copies and translation of documents
|
12.17 |
"Know your customer" checks
|
(a) |
the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement;
|
(b) |
any change in the status of the Borrower, any Guarantor, any Collateral Guarantor or any other Security Party after the date of this Agreement; or
|
(c) |
a proposed assignment or transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such
assignment or transfer,
|
12.18 |
Designated Transactions
|
12.19 |
Borrower's Minimum liquidity
|
12.20 |
Palios Family
|
(a) |
procure that all members of the Palios Family (either directly and/or indirectly through companies beneficially owned by any member of the Palios and/or
trusts of foundations of which any member of the Palios Family are beneficiaries) own at least 5 per cent. of the common share capital of the Borrower (in aggregate); and
|
(b) |
own directly the entire share capital of all Guarantors and all Collateral Guarantors.
|
12.21 |
Sanctions
|
(a) |
shall not, and shall procure that no Security Party will, directly or indirectly use, lend, make payments of, contribute or otherwise make available, all or
any part of the proceeds of the Loan or other transaction(s) contemplated by this Agreement to fund any trade, business or other activities or otherwise make available such proceeds to any subsidiary, joint venture partner or other
Person (i) to fund any activities or business of or with any Person, or in any country or territory, that, at the time of such funding, is a Sanctioned Person or Sanctioned Country or (ii) in any other manner that would result in a
violation of Sanctions by any Person (including any Person participating in the loan hereunder, whether as underwriter, advisor, investor, lender, hedge provider, facility or security agent or otherwise);
|
(b) |
shall not permit or authorise and shall prevent (and shall procure that the Guarantors and the Collateral Guarantors will not permit or authorise and will
prevent) a Ship and/or a Collateral Ship being used directly or indirectly (i) by or for the benefit of any Sanctioned Person or in any country or territory that is a Sanctioned Country; and/or (ii) in calling, trading or otherwise in
going to a Sanctioned Country; and/or (iii) in any manner which would trigger the operation of any sanctions limitation or exclusion clause (or similar) in the Insurances and/or re-insurances; and/or (iv) in any trade which will expose
a Ship, a Collateral Ship, any Creditor Party, the Approved Manager, crew or insurers to enforcement proceedings or any other consequences whatsoever arising from Sanctions; and
|
(c) |
shall, and shall procure that each Guarantor and each Collateral Guarantor shall, ensure that neither its assets nor the assets subject to the Finance
Documents shall be used directly or indirectly by or for the benefit of any Sanctioned Person or otherwise used in any manner which may breach any applicable Sanctions.
|
12.22 |
Collateral Security Documents
|
13 |
CORPORATE UNDERTAKINGS
|
13.1 |
General
|
13.2 |
Maintenance of status
|
(a) |
The Borrower shall maintain its separate corporate existence and remain in good standing under the laws of the Republic of the Marshall Islands.
|
(b) |
The Borrower shall procure that each Guarantor shall maintain its separate corporate existence and remain in good standing under the laws of its country of
incorporation set out in Column C of Schedule 2 (
Guarantors
) and each Collateral Guarantor shall maintain its separate corporate
existence and remain in good standing under the laws of the Republic of the Marshall Islands.
|
13.3 |
Negative undertakings
|
(a) |
change the nature of its business (including but not limited to the ownership of the ship owning entities being engaged in chartering and operation of ships);
|
(b) |
allow any Guarantor or any Collateral Guarantor to carry on any business other than the ownership, chartering and operation of the Ship or, as the case may
be, Collateral Ship owned by it; or
|
(c) |
pay (and procure that none of the Security Parties shall pay) any dividend or make any other form of distribution or effect any form of redemption, purchase
or return of its shares (the "
Distribution
") if an Event of Default has occurred and is continuing at such time or would occur as a
result of payment of such Distribution; or
|
(d) |
provide any form of credit or financial assistance to:
|
|
(i) |
a person who is directly or indirectly interested in the Borrower's share or loan capital; or
|
|
(ii) |
any company in or with which such a person is directly or indirectly interested or connected,
|
(e) |
allow any Guarantor or any Collateral Guarantor to open or maintain any account with any bank or financial institution except accounts with the Agent and the
Security Trustee for the purposes of the Finance Documents and the purposes of the Finance Documents (as such term is defined in the Collateral Loan Agreement); or
|
(f) |
allow any Guarantor or any Collateral Guarantor to issue, allot or grant, any person a right to any of its shares or repurchase or reduce its issued shares;
or
|
(g) |
allow any Guarantor or any Collateral Guarantor to acquire any shares or other securities other than US or UK Treasury bills and certificates of deposit
issued by major North American or European banks, or enter into any transaction in a derivative (other than the Designated Transactions under the Master Agreement); or
|
(h) |
enter into, and procure that not if its Subsidiaries will enter into, any form of amalgamation, merger or de-merger or any form of reconstruction or
reorganisation.
|
14 |
INSURANCE
|
14.1 |
General
|
14.2 |
Maintenance of obligatory insurances
|
(a) |
fire and usual marine risks (including hull and machinery and excess risks);
|
(b) |
war risks;
|
(c) |
protection and indemnity risks in excess of the limit of cover for oil pollution liability risks included within the protection and indemnity risks; and
|
(d) |
any other risks against which the Lenders consider, having regard to practices and other circumstances prevailing at the relevant time, it would in the
opinion of the Lenders be reasonable for that Guarantor or Collateral Guarantor to insure and which are specified by the Security Trustee by notice to that Guarantor or Collateral Guarantor.
|
14.3 |
Terms of obligatory insurances
|
(a) |
in Dollars;
|
(b) |
in the case of fire and usual marine risks and war risks, in an amount of an agreed value basis, as shall from time to time be approved by the Agent but in
any event in an amount not less than the greater of (i) the Market Value of its Ship and (ii) an amount, which when aggregated with the amount for which the other Ships subject to a Mortgage are insured pursuant to this Clause 14.3(b)
(Terms of obligatory insurances)
, equals 120 per cent. of the Loan and the Swap Exposure;
|
(c) |
in the case of oil pollution liability risks, for an aggregate amount equal to
the highest level of cover from time to time available under basic protection and indemnity club entry with the international group of protection and indemnity clubs) and in the international marine insurance market
(currently $1,000,000,000);
|
(d) |
in relation to protection and indemnity risks in respect of the relevant Ship's or, as the case may be, the Collateral Ship's full value and full tonnage;
|
(e) |
on such terms as shall from time to time be approved in writing by the Agent (including, without limitation, a blocking and trapping clause); and
|
(f) |
through approved brokers and with approved insurance companies and/or
underwriters or, in the case of war risks and protection and indemnity risks, in approved war risks and protection and indemnity risks associations
which are members of the International Group of Protection and Indemnity Associations acceptable to the Lenders.
|
14.4 |
Further protections for the Creditor Parties
|
(a) |
except in relation to risks referred to in paragraph (c) of Clause 14.2 (
Maintenance of obligatory insurances
) and protection and indemnity risks), if the Security Trustee so requires, name (or be amended to name) the Security Trustee as mortgagee for its rights and interests,
warranted no operational interest and with full waiver of rights of subrogation against the Security Trustee, but without the Security Trustee thereby being liable to pay (but having the right to pay) premiums, calls or other
assessments in respect of such insurance;
|
(b) |
name the Security Trustee as sole loss payee with such directions for payment as the Security Trustee may specify;
|
(c) |
provide that all payments by or on behalf of the insurers under the obligatory insurances to the Security Trustee shall be made without set-off, counterclaim
or deductions or condition whatsoever;
|
(d) |
provide that the insurers shall waive, to the fullest extent permitted by English law, their entitlement (if any) (whether by statute, common law, equity, or
otherwise) to be subrogated to the rights and remedies of the Security Trustee in respect of any rights or interests (secured or not) held by or available to the Security Trustee in respect of the Secured Liabilities, until the Secured
Liabilities shall have been fully repaid and discharged, except that the insurers shall not be restricted by the terms of this paragraph (d) from making personal claims against persons (other than the Borrower, any
|
(e) |
provide that the obligatory insurances shall be primary without right of contribution from other insurances which may be carried by the Security Trustee or
any other Creditor Party;
|
(f) |
provide that the Security Trustee may make proof of loss if that Guarantor or Collateral Guarantor fails to do so; and
|
(g) |
provide that if any obligatory insurance is cancelled, or if any substantial change is made in the coverage which adversely affects the interest of the
Security Trustee, or if any obligatory insurance is allowed to lapse for non-payment of premium, such cancellation, charge or lapse shall not be effective with respect to the Security Trustee for 30 days (or 7 days in the case of war
risks) after receipt by the Security Trustee of prior written notice from the insurers of such cancellation, change or lapse.
|
14.5 |
Renewal of obligatory insurances
|
(a) |
at least 21 days before the expiry of any obligatory insurance effected by it:
|
|
(i) |
notify the Security Trustee of the brokers (or other insurers) and any protection and indemnity or war risks association through or with whom that Borrower
proposes to renew that obligatory insurance and of the proposed terms of renewal; and
|
|
(ii) |
obtain the Lenders' approval to the matters referred to in paragraph (i);
|
(b) |
at least 14 days before the expiry of any obligatory insurance effected by it, renew that obligatory insurance in accordance with the Lenders' approval
pursuant to paragraph (a); and
|
(c) |
procure that the approved brokers and/or the war risks and protection and indemnity associations with which such a renewal is effected shall promptly after
the renewal notify the Security Trustee in writing of the terms and conditions of the renewal.
|
14.6 |
Copies of policies; letters of undertaking
|
(a) |
they will have endorsed on each policy, immediately upon issue, a loss payable clause and a notice of assignment complying with the provisions of Clause 14.4
(
Further protections for the Creditor Parties
);
|
(b) |
they will hold such policies, and the benefit of such insurances, to the order of the Security Trustee in accordance with the said loss payable clause;
|
(c) |
they will advise the Security Trustee immediately of any material change to the terms of the obligatory insurances;
|
(d) |
they will notify the Security Trustee, not less than 14 days before the expiry of the obligatory insurances, in the event of their not having received notice
of renewal instructions from that Guarantor and each Collateral Guarantor or its agents and, in the event of their receiving instructions to renew, they will promptly notify the Security Trustee of the terms of the instructions; and
|
(e) |
they will not set off against any sum recoverable in respect of a claim relating to the Ship or, as the case may be, Collateral Ship under such obligatory
insurances any premiums or other amounts due to them or any other person whether in respect of that Ship or, as the case may be, that Collateral Ship or otherwise, they waive any lien on the policies, or any sums received under them,
which they might have in respect of such premiums or other amounts, and they will not cancel such obligatory insurances by reason of non-payment of such premiums or other amounts, and will arrange for a separate policy to be issued in
respect of that Ship or, as the case may be, that Collateral Ship forthwith upon being so requested by the Security Trustee.
|
14.7 |
Copies of certificates of entry
|
(a) |
a certified copy of the certificate of entry for that Ship or that Collateral Ship;
|
(b) |
a letter or letters of undertaking in such form as may be required by the Lenders; and
|
(c) |
where required to be issued under the terms of insurance/indemnity provided by the relevant Guarantor's or Collateral Guarantor's protection and indemnity
association, a certified copy of each United States of America voyage quarterly declaration (or other similar document or documents) made by that Guarantor and/or Collateral Guarantor in relation to the Ship or, as the case may be,
Collateral Ship owned by it in accordance with the requirements of such protection and indemnity association; and
|
(d) |
a certified copy of each certificate of financial responsibility for pollution by oil or other Environmentally Sensitive Material issued by the relevant
certifying authority in relation to that Ship or that Collateral Ship.
|
14.8 |
Deposit of original policies
|
14.9 |
Payment of premiums
|
14.10 |
Guarantees
|
14.11 |
Compliance with terms of insurances
|
(a) |
the Borrower shall procure that each Guarantor and each Collateral Guarantor shall take all necessary action and comply with all requirements which may from
time to time be applicable to the obligatory insurances, and (without limiting the obligation contained in paragraph (c) of Clause 14.6 (
Copies
of policies; letters of undertaking
) ensure that the obligatory insurances are not made subject to any exclusions or qualifications to which the Security Trustee has not given its prior approval;
|
(b) |
the Borrower shall procure that each Guarantor and each Collateral Guarantor shall make any changes relating to the Approved Classification or Approved
Classification Society or manager or operator of the Ship or, as the case may be, Collateral Ship owned by it approved by the underwriters of the obligatory insurances;
|
(c) |
the Borrower shall procure that each Guarantor and each Collateral Guarantor shall make (and promptly supply copies to the Agent of) all quarterly or other
voyage declarations which may be required by the protection and indemnity risks association in which the Ship or, as the case may be, Collateral Ship owned by it is entered to maintain cover for trading to the United States of America
and Exclusive Economic Zone (as defined in the United States Oil Pollution Act 1990 or any other applicable legislation); and
|
(d) |
the Borrower shall procure that each Guarantor and each Collateral Guarantor
shall employ the Ship or, as the case may be, Collateral Ship owned by it, nor allow it to be employed, otherwise than in conformity with the terms and conditions of the obligatory insurances
(including but not limited to any applicable laws and Sanctions), without first obtaining the consent
of the insurers and complying with any requirements (as to extra premium or otherwise) which the insurers specify.
|
14.12 |
Alteration to terms of insurances
|
14.13 |
Settlement of claims
|
14.14 |
Provision of copies of communications
|
(a) |
the approved brokers;
|
(b) |
the approved protection and indemnity and/or war risks associations; and
|
(c) |
the approved insurance companies and/or underwriters, which relate directly or indirectly to:
|
|
(i) |
that Guarantor's or Collateral Guarantor's obligations relating to the obligatory insurances including, without limitation, all requisite declarations and
payments of additional premiums or calls; and
|
|
(ii) |
any credit arrangements made between that Guarantor or Collateral Guarantor and any of the persons referred to in paragraphs (a) or (b) relating wholly or
partly to the effecting or maintenance of the obligatory insurances.
|
14.15 |
Provision of information
|
(a) |
obtaining or preparing any report from an independent marine insurance broker appointed by the Agent as to the adequacy of the obligatory insurances effected
or proposed to be effected; and/or
|
(b) |
effecting, maintaining or renewing any such insurances as are referred to in Clause 14.6 (
Copies of policies; letters of undertaking
) or dealing with or considering any matters relating to any such insurances,
|
14.16 |
Restrictions on employment
|
14.17 |
Mortgagee's interest and additional perils insurances
|
(a) |
a mortgagee's interest marine insurance in an amount equal to 120 per cent. of the aggregate of the Loan and the Swap Exposure, providing for the
indemnification of the Security Trustee for any losses under or in connection with any Finance Document which directly or indirectly result from loss of or damage to a Ship or a liability of that Ship or of the Guarantor owing that
Ship, being a loss or damage which is prima facie covered by an obligatory insurance but in respect of which there is a non-payment (or reduced payment) by the underwriters by reason of, or on the basis of an allegation concerning:
|
|
(i) |
any act or omission on the part of the Guarantor owning that Ship, of any operator, charterer, manager or sub-manager of that Ship or of any officer, employee
or agent of that Guarantor or of any such person, including any breach of warranty or condition or any non-disclosure relating to such obligatory insurance;
|
|
(ii) |
any act or omission, whether deliberate, negligent or accidental, or any knowledge or privity of the Guarantor owning that Ship, any other person referred to
in paragraph (i) above, or of any officer, employee or agent of that Guarantor or of such a person, including the casting away or damaging of that Ship and/or that Ship being unseaworthy; and/or
|
|
(iii) |
any other matter capable of being insured against under a mortgagee's interest marine insurance policy whether or not similar to the foregoing;
|
(b) |
a mortgagee's interest additional perils policy in an amount equal to 120 per cent. of the aggregate of the Loan and the Swap Exposure, providing for the
indemnification of the Security Trustee against, among other things, any possible losses or other consequences of any Environmental Claim, including the risk of expropriation, arrest or any form of detention of a Ship, the imposition of
any Security Interest over the Ship and/or any other matter capable of being insured against under a mortgagee's interest additional perils policy whether or not similar to the foregoing,
|
14.18 |
Review of insurance requirements
|
14.19 |
Modification of insurance requirements
|
14.20 |
Compliance with mortgagee's instructions
|
15 |
SHIP COVENANTS
|
15.1 |
General
|
15.2 |
Ship's name and registration
|
15.3 |
Repair and classification
|
(a) |
consistent with first-class ship ownership and management practice;
|
(b) |
so as to maintain the highest class with an Approved Classification Society free of overdue recommendations and conditions of such Approved Classification
Society; and
|
(c) |
so as to comply with all laws and regulations applicable to vessels registered at ports in the Approved Flag State or to vessels trading to any jurisdiction
to which that Ship or Collateral Ship may trade from time to time, including but not limited to the ISM Code and the ISPS Code.
|
15.4 |
Classification society
undertaking
|
(a) |
to send to the Security Trustee (with a copy to the Borrower), following receipt of a written request from the Security Trustee, certified true copies of all
original class records held by the Approved Classification Society in relation to that Ship;
|
(b) |
to allow the Security Trustee (or its agents), not more than once per calendar year, to inspect the original class and related records of that Guarantor and
that Ship either (i) in person at the offices of the Approved Classification Society or (ii) electronically (through the Approved Classification Society directly) and to take copies of such records and that the Borrower shall procure
that each Guarantor use its best efforts to obtain from the Approved Classification Society their consent to allow such inspection;
|
(c) |
to notify the Security Trustee immediately in writing if the Approved Classification Society becomes aware of any facts or matters which may result in or have
resulted in a change, suspension, discontinuance, withdrawal or expiry of that Ship's class under the rules or terms and conditions of that Guarantor's or that Ship's membership of the Approved Classification Society; and
|
(d) |
following receipt of a written request from the Security Trustee:
|
|
(i) |
to confirm that that Guarantor is not in default of any of its contractual obligations or liabilities to the Approved Classification Society and, without
limiting the foregoing, that it has paid in full all fees or other charges due and payable to the Approved Classification Society; or
|
|
(ii) |
if that Guarantor is in default of any of its contractual obligations or liabilities to the Approved Classification Society, to specify to the Security
Trustee in reasonable detail the facts and circumstances of such default, the consequences of such default, and any remedy period agreed or allowed by the Approved Classification Society.
|
15.5 |
Modification
|
15.6 |
Removal of parts
|
15.7 |
Surveys
|
15.8 |
Inspection
|
15.9 |
Prevention of and release from arrest
|
(a) |
all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against the Ship or, as the case may be, Collateral Ship
owned by it, the Earnings or the Insurances;
|
(b) |
all taxes, dues and other amounts charged in respect of the Ship or, as the case may be, Collateral Ship owned by it, the Earnings or the Insurances; and
|
(c) |
all other outgoings whatsoever in respect of the Ship or, as the case may be, Collateral Ship owned by it, the Earnings or the Insurances,
|
15.10 |
Compliance with laws etc.
|
(a) |
comply, or procure compliance with the ISM Code
(including, without limitation, by the Approved Manager), the ISPS Code, all Environmental Laws,
Sanctions and all other laws or regulations relating to the Ship or, as the case may be, Collateral Ship owned by it, its ownership, operation and management or to the business of that Guarantor or Collateral Guarantor;
|
(b) |
not employ the Ship or, as the case may be, the Collateral Ship owned by it nor allow its employment in any manner contrary to any law or regulation in any
relevant jurisdiction including but not limited to the ISM Code and the ISPS Code; and
|
(c) |
in the event of hostilities in any part of the world (whether war is declared or not), not cause or permit the Ship or, as the case may be, the Collateral
Ship owned by it to enter or trade to any zone which is declared a war zone by any government or by that Ship's or that Collateral Ship's war risks insurers unless the prior written consent of the Lenders has been given and that
Guarantor and Collateral Guarantor has (at its expense) effected any special, additional or modified insurance cover which the Lenders may require.
|
15.11 |
Provision of information
|
(a) |
the Ship or, as the case may be, Collateral Ship owned by it, its employment, position and engagements;
|
(b) |
the Earnings and payments and amounts due to the master and crew of the Ship or, as the case may be, Collateral Ship owned by it;
|
(c) |
any expenses incurred, or likely to be incurred, in connection with the operation, maintenance or repair of the Ship owned by it and any payments made in
respect of that Ship or, as the case may be, that Collateral Ship;
|
(d) |
any towages and salvages; and
|
(e) |
its compliance, the Approved Manager's compliance and the compliance of the Ship or, as the case may be, Collateral Ship owned by it with the ISM Code and the
ISPS Code,
|
15.12 |
Notification of certain events
|
(a) |
any casualty which is or is likely to be or to become a Major Casualty;
|
(b) |
any occurrence as a result of which the Ship or, as the case may be, Collateral Ship owned by it has become or is, by the passing of time or otherwise, likely
to become a Total Loss;
|
(c) |
any requirement or recommendation made by any insurer or Approved Classification Society or by any competent authority which is not immediately complied with;
|
(d) |
any arrest or detention of the Ship or, as the case may be, Collateral Ship owned by it, any exercise or purported exercise of any lien on that Ship or, as
the case may be, that Collateral Ship or its Earnings or any requisition for hire;
|
(e) |
any intended dry docking of the Ship or, as the case may be, Collateral Ship owned by it;
|
(f) |
any Environmental Claim made against that Guarantor and/or that Collateral Guarantor or in connection with the Ship or, as the case may be, Collateral Ship
owned by it, or any Environmental Incident;
|
(g) |
any claim for breach of the ISM Code or the ISPS Code being made against that Guarantor, that Collateral Guarantor, the Approved Manager or otherwise in
connection with the Ship or the Collateral Ship owned by it; or
|
(h) |
any other matter, event or incident, actual or threatened, the effect of which will or could lead to the ISM Code or the ISPS Code not being complied with,
|
15.13 |
Restrictions on chartering, appointment of managers etc.
|
(a) |
let that Ship or, as the case may be, that Collateral Ship on demise charter for any period;
|
(b) |
enter into any time or consecutive voyage charter in respect of that Ship or, as the case may be, that Collateral Ship for a term which exceeds, or which by
virtue of any optional extensions may exceed, 13 months;
|
(c) |
enter into any charter in relation to that Ship or, as the case may be, that Collateral Ship under which more than 2 months' hire (or the equivalent) is
payable in advance;
|
(d) |
charter that Ship or, as the case may be, that Collateral Ship otherwise than on bona fide arm's length terms at the time when that Ship or Collateral Ship is
fixed;
|
(e) |
appoint a manager of that Ship other than the Approved Manager (and in the case of the Collateral Ship, the Approved Manager as such term is defined in the
Collateral Loan Agreement) or agree to any alteration to the terms of the Approved Manager's appointment;
|
(f) |
de-activate or lay-up that Ship or, as the case may be, that Collateral Ship; or
|
(g) |
put that Ship or, as the case may be, that Collateral Ship into the possession of any person for the purpose of work being done upon it in an amount exceeding
or likely to exceed $1,000,000 (or the equivalent in any other currency) unless that person has first given to the Security Trustee and in terms satisfactory to it a written undertaking not to exercise any lien on that Ship or, as the
case may be, that Collateral Ship or its Earnings for the cost of such work or for any other reason.
|
15.14 |
Notice of Mortgage
|
(a) |
each Guarantor shall keep the relevant Mortgage registered against the Ship owned by it as a valid first priority or, as the case may be, preferred mortgage,
carry on board that Ship a certified copy of the relevant Mortgage and place and maintain in a conspicuous place in the navigation room and the Master's cabin of that Ship a framed printed notice stating that that Ship is mortgaged by
that Guarantor to the Security Trustee; and
|
(b) |
each Collateral Guarantor shall keep the relevant Collateral Mortgage registered against the Collateral Ship owned by it as a valid second priority or, as the
case may be, preferred mortgage, carry on board that Collateral Ship a certified copy of the relevant Collateral Mortgage and place and maintain in a conspicuous place in the navigation room and the Master's cabin of that Collateral
Ship a framed printed notice stating that that Collateral Ship is mortgaged by that Collateral Guarantor to the Security Trustee.
|
15.15 |
Sharing of Earnings
|
(a) |
enter into any agreement or arrangement for the sharing of any Earnings;
|
(b) |
enter into any agreement or arrangement for the postponement of any date on which any Earnings are due; the reduction of the amount of any Earnings or
otherwise for the release or adverse alteration of any right of the Guarantors or, as the case may be, the Collateral Guarantors to any Earnings; or
|
(c) |
enter into any agreement or arrangement for the release of, or adverse alteration to, any guarantee or Security Interest relating to any Earnings.
|
15.16 |
Charter Assignment
|
15.17 |
ISM Code, ISPS Code compliance and Environmental Laws
|
(a) |
procure that the Ship or as the case may be, the Collateral Ship owned by it and the company responsible for that Ship's or that Collateral Ship's compliance
with the ISPS Code comply with the ISPS Code; and
|
(b) |
maintain for that Ship or, as the case may be, that Collateral Ship an ISSC; and
|
(c) |
notify the Agent immediately in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC.
|
15.18 |
ITF compliance
|
15.19 |
Laws and Sanctions Provisions
|
(a) |
The Borrower shall, and shall procure that each other Security Party, each Ship, each Collateral Ship shall, and, in respect of any charterer, shall use its
best efforts to procure that that charterer shall, comply in all respects with all laws to which it may be subject, including, without limitation, all national and international laws, directives, regulations, decrees, rulings and such
analogous rules, including, but not limited to, rules relating to Sanctions.
|
(b) |
The Borrower undertakes, and shall procure that each Guarantor and each Collateral Guarantor undertakes, to make any charterers and operators of the Ships or,
as the case may be, the Collateral Ships owned by it aware of the requirements of this Clause and of Clause 10.19/12.21/22.9 (
Sanctions
)
and that provisions relating to Sanctions substantially similar to those set out under this Agreement are included in any Charterparty or any other charter and shall procure that any charterer acts in accordance with these requirements.
|
15.20 |
Change of Approved Manager
|
(a) |
The Borrower may, at its sole discretion, at any time during the Security Period, change the Approved Manager of a Ship from Diana Shipping Services SA to
Diana Wilhelmsen Management Limited
Provided that
the Borrower shall notify the Agent 2 Business Days prior to such change and
undertakes to provide the Agent with:
|
|
(i) |
documents of the kind specified in paragraphs 2, 3, 4 and 5 of Schedule 3, Part A of this Agreement in respect of that Approved Manager;
|
(b) |
The Borrower may, at its sole discretion, at any time during the Security Period, change the Approved Manager to any other company within the Group which the
Agent may, with the authorisation of the Majority Lenders, approve from time to time as the technical or, as the case may be, commercial manager of that Ship and/or that Collateral Ship (such approval not to be unreasonably withheld or
unduly delayed)
Provided that
the Borrower shall notify the Agent 7 Business Days prior to such change and undertakes to provide the
Agent with the documents required in sub-paragraphs (i) – (ii) of paragraph (a) above and a favourable legal opinion from lawyers appointed by the Agent on such matters concerning relevant jurisdiction of that Approved Manager as the
Agent may require prior to the day that the change of that Approved Manager is concluded.
|
16 |
SECURITY COVER
|
16.1 |
Minimum required security cover
|
(a) |
the aggregate of the Market Values of the Ships; plus
|
(b) |
any additional security previously provided (excluding any additional security provided by the Collateral Guarantors) under this Clause 16 (
Security cover
) is
below 120 per
cent. of the aggregate of the Loan and the Swap Exposure.
|
16.2 |
Provision of additional security; prepayment
|
16.3 |
Requirement for additional documents.
|
16.4 |
Valuation of Ships
|
(a) |
as at a date not more than 2 months previously;
|
(b) |
by an Approved Broker selected by the Borrower (or, in the case where the Borrower has failed to select an Approved Broker within 3 Business Days from the
Agent's request, the Agent) and appointed by the Agent;
|
(c) |
with or without physical inspection of the Ship (as the Agent may require);
|
(d) |
on the basis of a sale for prompt delivery for cash on normal arm's length commercial terms as between a willing seller and a willing buyer, free of any
existing charter or other contract of employment; and
|
(e) |
after deducting the estimated amount of the usual and reasonable expenses which would be incurred in connection with the sale.
|
16.5 |
Value of additional vessel security
|
16.6 |
Valuations binding
|
16.7 |
Provision of information
|
16.8 |
Payment of valuation expenses
|
16.9 |
Frequency of valuations
|
16.10 |
Application of prepayment
|
17 |
PAYMENTS AND CALCULATIONS
|
17.1 |
Currency and method of payments
|
(a) |
by the Lenders to the Agent; or
|
(b) |
by the Borrower to the Agent, the Security Trustee or any Lender,
|
|
(i) |
by not later than 11.00 a.m. (New York City time) on the due date;
|
|
(ii) |
to the account of the Agent as the Agent may from time to time notify to the Borrower and the other Creditor Parties; and
|
|
(iii) |
in the case of an amount payable to the Security Trustee, to such account as it may from time to time notify to the Borrower and the other Creditor Parties.
|
17.2 |
Payment on non-Business Day
|
(a) |
the due date shall be extended to the next succeeding Business Day; or
|
(b) |
if the next succeeding Business Day falls in the next calendar month, the due date shall be brought forward to the immediately preceding Business Day,
|
17.3 |
Basis for calculation of periodic payments
|
17.4 |
Distribution of payments to Creditor Parties
|
(a) |
any amount received by the Agent under a Finance Document for distribution or
remittance to a Lender,
the Swap Bank or the Security Trustee shall be made available by the Agent to that Lender, the Swap Bank or, as the case may
be, the Security Trustee by payment, with funds having the same value as the funds received, to such account as the Lender, the Swap Bank or the Security Trustee may have notified to the Agent not less than 5 Business Days previously;
and
|
(b) |
amounts to be applied in satisfying amounts of a particular category which are due to the Lenders or the Swap Bank generally shall be distributed by the Agent
to each Lender or the Swap Bank pro rata to the amount in that category which is due to it.
|
17.5 |
Permitted deductions by Agent
|
17.6 |
Agent only obliged to pay when monies received
|
17.7 |
Refund to Agent of monies not received
|
(a) |
refund the sum in full to the Agent; and
|
(b) |
pay to the Agent the amount (as certified by the Agent) which will indemnify the Agent against any funding or other loss, liability or expense incurred by the
Agent as a result of making the sum available before receiving it.
|
17.8 |
Agent may assume receipt
|
17.9 |
Creditor Party accounts
|
17.10 |
Agent's memorandum account
|
17.11 |
Accounts prima facie evidence
|
18 |
APPLICATION OF RECEIPTS
|
18.1 |
Normal order of application
|
(a) |
FIRST: in or towards satisfaction of any amounts then due and payable under the Finance Documents or the Master Agreement in the following order:
|
|
(i) |
first, in or towards satisfaction pro rata of all amounts then due and payable to the Creditor Parties under the Finance Documents and the Master Agreement
(in respect of any Designated Transactions) other than those amounts referred to at (ii) and (iii) below (including, but without limitation, all amounts payable by the Borrower under Clauses 21 (
Fees and Expenses
), 22 (
Indemnities
) and 23 (
No Set-Off or Tax Deduction
) of this Agreement or by the Borrower or any Security Party under any corresponding or similar provision in
any other Finance Document or in the Master Agreement);
|
|
(ii) |
secondly, in or towards satisfaction pro rata of any and all amounts of interest or default interest payable to the Creditor Parties under the Finance
Documents and the Master Agreement (in respect of any Designated Transactions) (and, for this purpose, the expression "interest" shall include any net amount which the Borrower shall have become liable to pay or deliver under section
2(e) (Obligations) of the Master Agreement (in respect of any Designated Transactions) but shall have failed to pay or deliver to the Swap Bank at the time of application or distribution under this Clause 18 (
Application of Receipts
)); and
|
|
(iii) |
thirdly, in or towards satisfaction pro rata of the Loan and the Swap Exposure (in the case of the latter, calculated as at the actual Early Termination Date
applying to each particular Designated Transaction, or if no such Early Termination Date shall have occurred, calculated as if an Early Termination Date occurred on the date of application or distribution hereunder);
|
(b) |
SECONDLY: in retention of an amount equal to any amount not then due and payable under any Finance Document or the Master Agreement (in respect of any
Designated Transactions) but which the Agent, by notice to the Borrower, the Security Parties and the other Creditor Parties, states in its opinion will or may become due and payable in the future and, upon those amounts becoming due
and payable, in or towards satisfaction of them in accordance with the foregoing provisions of this paragraph of paragraph (a) of Clause 18.1 (
Normal order of application
);
|
(c) |
THIRDLY: in or towards satisfaction of any amounts representing management fees then due and payable by the Borrower, the Guarantors to the Approved Manager
in connection with the Ships; and
|
(d) |
FOURTHLY: any surplus shall be paid to the Borrower or to any other person appearing to be entitled to it.
|
18.2 |
Variation of order of application
|
18.3 |
Notice of variation of order of application
|
18.4 |
Appropriation rights overridden
|
19 |
APPLICATION OF EARNINGS
|
19.1 |
Payment of Earnings
|
(a) |
(subject only to the provisions of the General Assignment), all the Earnings of each Ship are paid to the Earnings Account relevant for that Ship; and
|
(b) |
all payments by the Swap Bank to the Borrower under each Designated Transaction are paid to the Liquidity Reserve Account.
|
19.2 |
Earnings Accounts balances
|
19.3 |
Location of accounts
|
(a) |
comply, or procure that each Guarantor complies, with any requirement of the Agent as to the location or re-location of the Earnings Accounts (or any of them)
or the Liquidity Reserve Account; and
|
(b) |
execute, or procure that each Guarantor executes, any documents which the Agent specifies to create or maintain in favour of the Security Trustee a Security
Interest over (and/or rights of set-off, consolidation or other rights in relation to) the Earnings Accounts or the Liquidity Reserve Account.
|
19.4 |
Debits for expenses etc.
|
19.5 |
Borrower obligations unaffected
|
(a) |
the liability of the Borrower to make payments of principal and interest on the due dates; or
|
(b) |
any other liability or obligation of the Borrower or any Security Party under any Finance Document.
|
20 |
EVENTS OF DEFAULT
|
20.1 |
Events of Default
|
(a) |
the Borrower or any Security Party fails to pay when due or (if so payable) on demand any sum payable under a Finance Document or under any document relating
to a Finance Document; or
|
(b) |
any breach occurs of Clause 9.2 (
Waiver of conditions
precedent
), 10.19 (
Sanctions
), 12.2 (
Title and negative pledge
), 12.3 (
No disposal of assets
), 12.19 (
Borrower's Minimum liquidity
), 12.20 (
Sanctions
), 13.2 (
Maintenance of status
), 13.3 (
Negative
undertakings
), 14.2 (
Maintenance of obligatory insurances
), 14.3 (
Terms of obligatory insurances
), 15.2 (
Ship's name and registration
), 15.3 (
Repair and classification
), 15.11 (
Provision
of information
) or 16.2 (
Provision of additional security; prepayment
), 22.9 (
Sanctions
); or
|
(c) |
any breach by the Borrower or any Security Party occurs of any provision of a Finance Document (other than a breach covered by paragraphs (a) or (b)) which,
in the opinion of the Majority Lenders, is capable of remedy, and such default continues unremedied 10 days after the earlier of (i) written notice from the Agent requesting action to remedy the same and (ii) the Borrower becoming aware
of such breach; or
|
(d) |
(subject to any applicable grace period specified in the Finance Document) any breach by the Borrower or any Security Party occurs of any provision of a
Finance Document (other than a breach falling within paragraphs (a), (b) or (c)); or
|
(e) |
any representation, warranty or statement made or repeated by, or by officers, directors, employees, affiliates, agents and representatives of, the Borrower
or a Security Party or a Relevant Person in a Finance Document or in the Drawdown Notice or any other notice or
|
(f) |
any of the following occurs in relation to any Financial Indebtedness of a Relevant Person (exceeding an amount of $500,000 in aggregate (or the equivalent in
any other currency) in the case of each Guarantor and, at any relevant time, in the case of all Relevant Persons, an amount of $15,000,000 in aggregate (or the equivalent in any other currency)):
|
|
(i) |
any Financial Indebtedness of a Relevant Person is not paid when due
or, if so payable, on demand;
|
|
(ii) |
any Financial Indebtedness of a Relevant Person becomes due and payable or capable of being declared due and payable prior to its stated maturity date as a
consequence of any event of default; or
|
|
(iii) |
a lease, hire purchase agreement or charter creating any Financial Indebtedness of a Relevant Person is terminated by the lessor or owner or becomes capable
of being terminated as a consequence of any termination event; or
|
|
(iv) |
any overdraft, loan, note issuance, acceptance credit, letter of credit, guarantee, foreign exchange or other facility, or any swap or other derivative
contract or transaction, relating to any Financial Indebtedness of a Relevant Person ceases to be available or becomes capable of being terminated as a result of any event of default, or cash cover is required, or becomes capable of
being required, in respect of such a facility as a result of any event of default; or
|
|
(v) |
any Security Interest securing any Financial Indebtedness of a Relevant Person becomes enforceable; or
|
(g) |
any of the following occurs in relation to a Relevant Person:
|
|
(i) |
a Relevant Person becomes, in the opinion of the Majority Lenders, unable to pay its debts as they fall due; or
|
|
(ii) |
any assets of a Relevant Person are subject to any form of execution, attachment, arrest, sequestration or distress in respect of a sum of, or sums, exceeding
an amount of $500,000 in aggregate (or the equivalent in any other currency) in the case of each Guarantor and, at any relevant time, in the case of all Relevant Persons, an amount of $15,000,000 in aggregate (or the equivalent in any
other currency); or
|
|
(iii) |
any administrative or other receiver is appointed over any asset of a Relevant Person; or
|
|
(iv) |
an administrator is appointed (whether by the court or otherwise) in respect of a Relevant Person; or
|
|
(v) |
any formal declaration of bankruptcy or any formal statement to the effect that a Relevant Person is insolvent or likely to become insolvent is made by a
Relevant Person or by the directors of a Relevant Person or, in any proceedings, by a lawyer acting for a Relevant Person; or
|
|
(vi) |
a provisional liquidator is appointed in respect of a Relevant Person, a winding up order is made in relation to a Relevant Person or a winding up resolution
is passed by a Relevant Person; or
|
|
(vii) |
a resolution is passed, an administration notice is given or filed, an application or petition to a court is made or presented or any other step is taken by
(aa) a Relevant Person, (bb) the members or directors of a Relevant Person, (cc) a holder of Security Interests which together relate to all or substantially all of the assets of a Relevant Person, or (dd) a government minister or
public or regulatory authority of a Pertinent Jurisdiction for or with a view to the winding up of that or another Relevant Person or the appointment of a provisional liquidator or administrator in respect of that or another Relevant
Person, or that or another Relevant Person ceasing or suspending business operations or payments to creditors, save that this paragraph does not apply to a fully solvent winding up of a Relevant Person other than the Borrower or a
Guarantor which is, or is to be, effected for the purposes of an amalgamation or reconstruction previously approved by the Majority Lenders and effected not later than 3 months after the commencement of the winding up; or
|
|
(viii) |
an administration notice is given or filed, an application or petition to a court is made or presented or any other step is taken by a creditor of a Relevant
Person (other than a holder of Security Interests which together relate to all or substantially all of the assets of a Relevant Person) for the winding up of a Relevant Person or the appointment of a provisional liquidator or
administrator in respect of a Relevant Person in any Pertinent Jurisdiction, unless the proposed winding up, appointment of a provisional liquidator or administration is being contested in good faith, on substantial grounds and not with
a view to some other insolvency law procedure being implemented instead and either (aa) the application or petition is dismissed or withdrawn within 30 days of being made or presented, or (bb) within 30 days of the administration notice
being given or filed, or the other relevant steps being taken, other action is taken which will ensure that there will be no administration and (in both cases (aa) or (bb)) the Relevant Person will continue to carry on business in the
ordinary way and without being the subject of any actual, interim or pending insolvency law procedure; or
|
|
(ix) |
a Relevant Person or its directors take any steps (whether by making or presenting an application or petition to a court, or submitting or presenting a
document setting out a proposal or proposed terms, or otherwise) with a view to obtaining, in relation to that or another Relevant Person, any form of moratorium, suspension or deferral of payments, reorganisation of debt (or certain
debt) or arrangement with all or a substantial proportion (by number or value) of creditors or of any class of them or any such moratorium, suspension or deferral of payments, reorganisation or arrangement is effected by court order, by
the filing of documents with a court, by means of a contract or in any other way at all; or
|
|
(x) |
any meeting of the members or directors, or of any committee of the board or senior management, of a Relevant Person is held or summoned for the purpose of
considering a resolution or proposal to authorise or take any action of a type described in paragraphs (iv) to (ix) or a step preparatory to such action, or (with or without such a meeting) the members, directors or such a committee
resolve or agree that such an action or step should be taken or should be taken if certain conditions materialise or fail to materialise; or
|
|
(xi) |
in a country other than England, any event occurs, any proceedings are opened or commenced or any step is taken which, in the opinion of the Majority Lenders
is similar to any of the foregoing; or
|
(h) |
the Borrower, any Guarantor or any Collateral Guarantor ceases or suspends carrying on its business or a part of its business which, in the opinion of the
Majority Lenders, is material in the context of this Agreement; or
|
(i) |
it becomes unlawful or impossible:
|
|
(i) |
for the Borrower or any Security Party to discharge any liability under a Finance Document or to comply with any other obligation which the Majority Lenders
consider material under a Finance Document; or
|
|
(ii) |
for the Agent, the Security Trustee, the Lenders or the Swap Bank to exercise or enforce any right under, or to enforce any Security Interest created by, a
Finance Document; or
|
(j) |
any official consent necessary to enable any Guarantor or any Collateral Guarantor to own, operate or charter the Ship or, as the case may be, Collateral Ship
owned by it or to enable any Guarantor or any Security Party to comply with any provision which the Majority Lenders consider material of a Finance Document is not granted, expires without being renewed, is revoked or becomes liable to
revocation or any condition of such a consent is not fulfilled; or
|
(k) |
any provision which the Majority Lenders consider material of a Finance Document proves to have been or becomes invalid or unenforceable, or a Security
Interest created by a Finance Document proves to have been or becomes invalid or unenforceable or such a Security Interest proves to have ranked after, or loses its priority to, another Security Interest or any other third party claim
or interest; or
|
(l) |
any member of the Palios Family (either directly and/or indirectly through companies beneficially owned by any member of the Palios and/or trusts of
foundations of which any member of the Palios Family are beneficiaries) ceases to own at least 5 per cent. of the share capital of the Borrower; or
|
(m) |
the Borrower ceases to own directly the entire share capital of any Guarantor and any Collateral Guarantor; or
|
(n) |
without the prior written consent of the Agent (acting with the authorisation of all Lenders) the shares of the Borrower cease to be listed on the New York
Stock Exchange; or
|
(o) |
the security constituted by a Finance Document is in any way imperilled or in jeopardy; or
|
(p) |
an Event of Default (as defined in Section 14 of the Master Agreement) occurs; or
|
(q) |
the Master Agreement is terminated, cancelled, suspended, rescinded or revoked or otherwise ceases to remain in full force and effect for any reason except
with the consent of the Agent, acting with the authorisation of the Lenders; or
|
(r) |
any of the events or circumstances set out in clause 19 of the Collateral Loan Agreement occurs; or
|
(s) |
an Event of Default (as defined in Section 14 of the Collateral Master Agreement) occurs; or
|
(t) |
any other event occurs or any other circumstances arise or develop including, without limitation:
|
|
(i) |
a change in the business, condition (financial or otherwise), operation, state of affairs or prospects of any Relevant Person; or
|
|
(ii) |
which affects the ability of the Borrower and the Security Parties to perform their obligations under the Loan Agreement and the other Finance Documents to
which each is a party; or
|
|
(iii) |
any accident or other event involving any Ship or another vessel owned, chartered or operated by a Relevant Person,
|
20.2 |
Actions following an Event of Default
|
(a) |
the Agent may, and if so instructed by the Majority Lenders, the Agent shall:
|
|
(i) |
serve on the Borrower a notice stating that all or part of the Commitments and of the other obligations of each Lender to the Borrower under this Agreement
are terminated; and/or
|
|
(ii) |
serve on the Borrower a notice stating that all or part of the Loan together with accrued interest and all other amounts accrued or owing under this Agreement
are immediately due and payable or are due and payable on demand; and/or
|
|
(iii) |
take any other action which, as a result of the Event of Default or any notice served under paragraph (i) or (ii) above, the Agent and/or the Lenders are
entitled to take under any Finance Document or any applicable law; and/or
|
(b) |
the Security Trustee may, and if so instructed by the Agent, acting with the authorisation of the Majority Lenders in consultation with the Swap Bank, the
Security Trustee shall take any action which, as a result of the Event of Default or any notice served under paragraph (a)(i)or (a)(ii), the Security Trustee, the Agent and/or the Lenders and/or the Swap Bank are entitled to take under
any Finance Document or any applicable law.
|
20.3 |
Termination of Commitments
|
20.4 |
Acceleration of Loan
|
20.5 |
Multiple notices; action without notice
|
20.6 |
Notification of Creditor Parties and Security Parties
|
20.7 |
Creditor Party's rights unimpaired
|
20.8 |
Exclusion of Creditor Party liability
|
(a) |
for any loss caused by an exercise of rights under, or enforcement of a Security Interest created by, a Finance Document or by any failure or delay to
exercise such a right or to enforce such a Security Interest; or
|
(b) |
as mortgagee in possession or otherwise, for any income or principal amount which might have been produced by or realised from any asset comprised in such a
Security Interest or for any reduction (however caused) in the value of such an asset,
|
20.9 |
Relevant Persons
|
20.10 |
Interpretation
|
21 |
FEES AND EXPENSES
|
21.1 |
Structuring and account bank fees
|
(a) |
on the date of this Agreement, a non-refundable structuring fee in the amount set out in the Fee Letter; and
|
(b) |
on the date of this Agreement and on each anniversary thereof during the Security Period, a non-refundable annual account bank fee in an amount of $1,000
payable to the Agent in advance for the account of the Account Bank for each Earnings Account of the Borrower and the Guarantors.
|
21.2 |
Costs of negotiation, preparation etc.
|
21.3 |
Costs of variations, amendments, enforcement etc.
|
(a) |
any amendment or supplement to a Finance Document requested by a Security Party, or any proposal for such an amendment to be made;
|
(b) |
any consent or waiver by the Lenders, the Majority Lenders, the Swap Bank or the Creditor Party concerned under or in connection with a Finance Document, or
any request for such a consent or waiver;
|
(c) |
the valuation of any security provided or offered under Clause 16 (
Security cover
) or any other matter relating to such security;
|
(d) |
where the Agent, in its absolute opinion, considers that there has been a material change to the insurances in respect of any of the Ships, the review of the
insurances of that Ship pursuant to Clause 14.18 (
Review of insurance requirements
);
|
(e) |
the opinions of the independent insurance consultant referred to in paragraph 6 of Part B of Schedule 4 (
Condition Precedent Documents
); and
|
(f) |
any step taken by the Creditor Party concerned with a view to the protection, exercise or enforcement of any right or Security Interest created by a Finance
Document or for any similar purpose.
|
21.4 |
Documentary taxes
|
21.5 |
Certification of amounts
|
22 |
INDEMNITIES
|
22.1 |
Indemnities regarding borrowing and repayment of Loan
|
(a) |
the Loan not being borrowed on the date specified in the Drawdown Notice for any reason other than a default by the Lender or the Swap Bank claiming the
indemnity;
|
(b) |
the receipt or recovery of all or any part of the Loan or an overdue sum
otherwise than on the last day of an Interest Period or other relevant period
including, without limitation, where such receipt or recovery is made as a result of the voluntary or mandatory repayment or prepayment of the Loan, or any part thereof;
|
(c) |
any failure (for whatever reason) by the Borrower to make payment of any amount due under a Finance Document on the due date or, if so payable, on demand
(after giving credit for any default interest paid by the Borrower on the amount concerned under Clause 7 (
Default Interest
)); and
|
(d) |
the occurrence of an Event of Default or a Potential Event of Default and/or the acceleration of repayment of the Loan under Clause 20 (
Events of Default
),
|
22.2 |
Breakage costs
|
(a) |
in liquidating or employing deposits from third parties acquired or arranged to fund or maintain all or any part of its Contribution and/or any overdue amount
(or an aggregate amount which includes its Contribution or any overdue amount); and
|
(b) |
in terminating, or otherwise in connection with, any interest and/or currency swap or any other transaction entered into (whether with another legal entity or
with another office or department of the Lender concerned) to hedge any exposure arising under this Agreement or that part which the Lender concerned determines is fairly attributable to this Agreement of the amount of the liabilities,
expenses or losses (including losses of prospective profits) incurred by it in terminating, or otherwise in connection with, a number of transactions of which this Agreement is one.
|
22.3 |
Miscellaneous indemnities
|
(a) |
any action taken, or omitted or neglected to be taken, under or in connection with any Finance Document by the Agent, the Security Trustee or any other
Creditor Party or by any receiver appointed under a Finance Document; and
|
(b) |
any other event, matter or question which occurs or arises at any time during the Security Period and which has any connection with, or any bearing on, any
Finance Document, any payment or other transaction relating to a Finance Document or any asset covered (or previously covered) by a Security Interest created (or intended to be created) by a Finance Document,
|
22.4 |
Extension of indemnities; environmental indemnity
|
(a) |
any matter which would be covered by Clause 22.3 (
Miscellaneous
indemnities
) if any of the references in that Clause to a Lender were a reference to the Agent or (as the case may be) to the Security Trustee; and
|
(b) |
any liability items which arise, or are asserted, under or in connection with any law relating to safety at sea, pollution or the protection of the
environment, the ISM Code, the ISPS Code or any Environmental Law.
|
22.5 |
Currency indemnity
|
(a) |
making or lodging any claim or proof against of the Borrower or any Security Party, whether in its liquidation, any arrangement involving it or otherwise; or
|
(b) |
obtaining an order or judgment from any court or other tribunal; or
|
(c) |
enforcing any such order or judgment,
|
22.6 |
Certification of amounts
|
22.7 |
Application of Master Agreement
|
22.8 |
Sums deemed due to a Lender
|
22.9 |
Sanctions
|
(a) |
Each Security Party shall, within three (3) Business Days of demand by a Creditor Party, indemnify each Creditor Party against any cost, loss or liability
incurred by it as a result of any
|
(b) |
The indemnity in paragraph (a) of this Clause 22.9 (
Sanctions
)
above shall cover any losses incurred by each Creditor Party in any jurisdiction arising or asserted under or in connection with any law relating to any Sanctions.
|
23 |
NO SET-OFF OR TAX DEDUCTION
|
23.1 |
No deductions
|
(a) |
without any form of set‑off, cross-claim or condition; and
|
(b) |
free and clear of any tax deduction except a tax deduction which the Borrower is required by law to make.
|
23.2 |
Grossing-up for taxes
|
(a) |
the Borrower shall notify the Agent as soon as it becomes aware of the requirement;
|
(b) |
the Borrower shall pay the tax deducted to the appropriate taxation authority promptly, and in any event before any fine or penalty arises;
|
(c) |
the amount due in respect of the payment shall be increased by the amount necessary to ensure that each Creditor Party receives and retains (free from any
liability relating to the tax deduction) a net amount which, after the tax deduction, is equal to the full amount which it would otherwise have received.
|
23.3 |
Evidence of payment of taxes
|
23.4 |
Exclusion of tax on overall net income
|
23.5 |
Application of Master Agreement
|
23.6 |
FATCA information
|
(a) |
Subject to paragraph (c) below, each party to the Finance Documents shall, within 10 Business Days of a reasonable request by another party to the Finance
Documents:
|
|
(i) |
confirm to that other party whether it is:
|
|
(A) |
a FATCA Exempt Party; or
|
|
(B) |
not a FATCA Exempt Party; and
|
|
(ii) |
supply to that other party such forms, documentation and other information relating to its status under FATCA as that other party reasonably requests for the
purposes of that other party's compliance with FATCA; and
|
|
(iii) |
supply to that other party such forms, documentation and other information relating to its status as that other party reasonably requests for the purposes of
that other party's compliance with any other law, regulation, or exchange of information regime.
|
(b) |
If a party to any Finance Document confirms to another party pursuant to sub-paragraph (i) of paragraph (a) above that it is a FATCA Exempt Party and it
subsequently becomes aware that it is not, or has ceased to be a FATCA Exempt Party, that party shall notify that other party reasonably promptly.
|
(c) |
Paragraph (a) above shall not oblige any Creditor Party to do anything and sub-paragraph (iii) of paragraph (a) 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 to any Finance Document fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested
in accordance with sub-paragraphs (i) or (ii) of paragraph (a) 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 10 Business Days of:
|
|
(i) |
where the Borrower is a US Tax Obligor and the relevant Lender is an Transferor Lender, the date of this Agreement;
|
|
(ii) |
where the Borrower is a US Tax Obligor on a date where a Transfer Certificate has been executed and the relevant Lender thereunder is a Transferee Lender,
date of the Transfer Certificate; or
|
|
(iii) |
the date of a request from the Agent,
|
|
(iv) |
a withholding certificate on Form W-8, Form W-9 or any other relevant form; or
|
|
(v) |
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 paragraph
(e) or (g) above without further verification. The Agent shall not be liable for any action taken by it under or in connection with paragraphs (e), (f) or (g) above.
|
23.7 |
FATCA Deduction
|
(a) |
Each party to a Finance Document may make any FATCA Deduction it is required to make by FATCA, and any payment required in connection with that FATCA
Deduction, and no party to a Finance Document 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 to a Finance Document shall promptly, upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate or the basis
of such FATCA Deduction), notify the party to a Finance Document to whom it is making the payment and, in addition, shall notify the Borrower and the Agent and the Agent shall notify the other Creditor Parties.
|
24 |
ILLEGALITY, ETC
|
24.1 |
Illegality
|
(a) |
unlawful or prohibited as a result of the introduction of a new law, an amendment to an existing law or a change in the manner in which an existing law is or
will be interpreted or applied; or
|
(b) |
contrary to, or inconsistent with, any regulation,
|
24.2 |
Notification of illegality
|
24.3 |
Prepayment; termination of Commitment
|
24.4 |
Mitigation
|
(a) |
have an adverse effect on its business, operations or financial condition; or
|
(b) |
involve it in any activity which is unlawful or prohibited or any activity that is contrary to, or inconsistent with, any regulation; or
|
(c) |
involve it in any expense (unless indemnified to its satisfaction) or tax disadvantage.
|
25 |
INCREASED COSTS
|
25.1 |
Increased costs
|
(a) |
the introduction or alteration after the date of this Agreement of a law or an alteration after the date of this Agreement in the manner in which a law is
interpreted or applied (disregarding any effect which relates to the application to payments under this Agreement of a tax on the Lender's overall net income); or
|
(b) |
complying with any regulation (including any which relates to capital adequacy or liquidity controls or which affects the manner in which the Notifying Lender
allocates capital resources to its obligations under this Agreement) which is introduced, or altered, or the interpretation or application of which is altered, after the date of this Agreement,
|
(c) |
the effect of complying with the regulations set out in the "International Convergence of Capital Standards, a Revised Framework" published by the Basle
Committee on Banking Supervision in June 2004 as implemented in the EU by the Capital Requirements Directive (2006/48/EC and 2006/49/EC) is that the Notifying Lender (or a parent company of it) has incurred or will incur an "increased
cost" when compared to the cost of complying with such regulations as determined by the Notifying Lender (or a parent company of it) on the date of this Agreement and including any amendment taking account of incorporating any measure
from the Basel III Framework or CRD IV, and CRD IV or any other law of regulation which implements Basel III and CRD IV.
|
25.2 |
Meaning of "increased cost"
|
(a) |
an additional or increased cost incurred as a result of, or in connection with, the Notifying Lender having entered into, or being a party to, this Agreement
or a Transfer Certificate, of funding or maintaining its Commitment or Contribution or performing its obligations under this Agreement, or of having outstanding all or any part of its Contribution or other unpaid sums;
|
(b) |
a reduction in the amount of any payment to the Notifying Lender under this Agreement or in the effective return which such a payment represents to the
Notifying Lender or on its capital;
|
(c) |
an additional or increased cost of funding all or maintaining all or any of the advances comprised in a class of advances formed by or including the Notifying
Lender's Contribution or (as the case may require) the proportion of that cost attributable to the Contribution; or
|
(d) |
a liability to make a payment, or a return foregone, which is calculated by reference to any amounts received or receivable by the Notifying Lender under this
Agreement, but not an item attributable to a change in the rate of tax on the overall net income of the Notifying Lender (aa) (or a parent company of it) or (bb) an item covered by the indemnity for tax in Clause 22.1 (
Indemnities regarding borrowing and repayment of Loan
) or by Clause 23 (
No Set-Off or Tax Deduction
) or (cc) attributable to a FATCA Deduction required to be made by a Party.
|
25.3 |
Notification to Borrower of claim for increased costs
|
25.4 |
Payment of increased costs
|
25.5 |
Notice of prepayment
|
25.6 |
Prepayment; termination of Commitment
|
(a) |
on the date on which the Agent serves that notice, the Commitment of the Notifying Lender shall be cancelled; and
|
(b) |
on the date specified in its notice of intended prepayment, the Borrower shall prepay (without premium or penalty) the Notifying Lender's Contribution,
together with accrued interest thereon at the applicable rate plus the Margin.
|
25.7 |
Application of prepayment
|
26 |
SET-OFF
|
26.1 |
Application of credit balances
|
(a) |
apply any balance (whether or not then due) which at any time stands to the credit of any account in the name of the Borrower at any office in any country of
that Creditor Party in or towards satisfaction of any sum then due from the Borrower to that Creditor Party under any of the Finance Documents; and
|
(b) |
for that purpose:
|
|
(i) |
break, or alter the maturity of, all or any part of a deposit of the Borrower;
|
|
(ii) |
convert or translate all or any part of a deposit or other credit balance into Dollars; and
|
|
(iii) |
enter into any other transaction or make any entry with regard to the credit balance which the Creditor Party concerned considers appropriate.
|
26.2 |
Existing rights unaffected
|
26.3 |
Sums deemed due to a Lender
|
26.4 |
No Security Interest
|
27 |
TRANSFERS AND CHANGES IN LENDING OFFICES
|
27.1 |
Transfer by Borrower
|
(a) |
transfer any of its rights or obligations under any Finance Document; or
|
(b) |
enter into any merger, de-merger or other reorganisation, or carry out any other act, as a result of which any of its rights or liabilities would vest in, or
pass to, another person.
|
27.2 |
Transfer by a Lender
|
(a) |
its rights in respect of all or part of its Contribution; or
|
(b) |
its obligations in respect of all or part of its Commitment; or
|
(c) |
a combination of (a) and (b),
|
|
(i) |
without the consent of the Borrower, but subject to prior consultation of the Borrower at least 10 days prior to such transfer, if such transfer is:
|
|
(A) |
up to 50 per cent. of the Loan; and
|
|
(B) |
to a first class bank or financial institution;
|
|
(ii) |
without the consent of the Borrower:
|
|
(A) |
following the occurrence of an Event of Default which is continuing; and/or
|
|
(B) |
if such transfer is to another Lender or an affiliate of a Lender; and
|
|
(iii) |
in all other circumstances with the written consent of the Borrower (such consent not to be unreasonably withheld or delayed) and the Borrower will be deemed
to have given its consent 5 Business Days following the request of the Transferor Lender unless the consent is expressly refused by the Borrower within that time.
|
27.3 |
Transfer Certificate, delivery and notification
|
(a) |
sign the Transfer Certificate on behalf of itself, the Borrower, the Security Parties, the Security Trustee and each of the other Lenders and the Swap Bank;
|
(b) |
on behalf of the Transferee Lender, send to the Borrower and each Security Party letters or faxes notifying them of the Transfer Certificate and attaching a
copy of it; and
|
(c) |
send to the Transferee Lender copies of the letters or faxes sent under paragraph (b) above,
|
27.4 |
Effective Date of Transfer Certificate
|
27.5 |
No transfer without Transfer Certificate
|
27.6 |
Lender re-organisation; waiver of Transfer Certificate
|
27.7 |
Effect of Transfer Certificate
|
(a) |
to the extent specified in the Transfer Certificate, all rights and interests (present, future or contingent) which the Transferor Lender has under or by
virtue of the Finance Documents are assigned to the Transferee Lender absolutely, free of any defects in the Transferor Lender's title and of any rights or equities which the Borrower or any Security Party had against the Transferor
Lender;
|
(b) |
the Transferor Lender's Commitment is discharged to the extent specified in the Transfer Certificate;
|
(c) |
the Transferee Lender becomes a Lender with the Contribution previously held by the Transferor Lender and a Commitment of an amount specified in the Transfer
Certificate;
|
(d) |
the Transferee Lender becomes bound by all the provisions of the Finance Documents which are applicable to the Lenders generally, including those about
pro-rata sharing and the exclusion of liability on the part of, and the indemnification of, the Agent and the Security Trustee and, to the extent that the Transferee Lender becomes bound by those provisions (other than those relating to
exclusion of liability), the Transferor Lender ceases to be bound by them;
|
(e) |
any part of the Loan which the Transferee Lender advances after the Transfer Certificate's effective date ranks in point of priority and security in the same
way as it would have ranked had it been advanced by the transferor, assuming that any defects in the transferor's title and any rights or equities of the Borrower or any Security Party against the Transferor Lender had not existed;
|
(f) |
the Transferee Lender becomes entitled to all the rights under the Finance Documents which are applicable to the Lenders generally, including but not limited
to those relating to the Majority Lenders and those under Clause 5.7 (
Market disruption
) and Clause 21 (
Fees and Expenses
), and to the extent that the Transferee Lender becomes entitled to such rights, the Transferor Lender ceases to be entitled to them; and
|
(g) |
in respect of any breach of a warranty, undertaking, condition or other provision of a Finance Document or any misrepresentation made in or in connection with
a Finance Document, the Transferee Lender shall be entitled to recover damages by reference to the loss incurred by it as a result of the breach or misrepresentation, irrespective of whether the original Lender would have incurred a
loss of that kind or amount.
|
27.8 |
Maintenance of register of Lenders
|
27.9 |
Reliance on register of Lenders
|
27.10 |
Authorisation of Agent to sign Transfer Certificates
|
27.11 |
Registration fee
|
27.12 |
Sub-participation; subrogation assignment
|
27.13 |
Disclosure of information
|
27.14 |
Change of lending office
|
(a) |
the date on which the Agent receives the notice; and
|
(b) |
the date, if any, specified in the notice as the date on which the change will come into effect.
|
27.15 |
Notification
|
27.16 |
Replacement of Reference Bank
|
27.17 |
Security over Lenders' rights
|
(a) |
any charge, assignment or other Security Interest to secure obligations to a federal reserve or central bank; and
|
(b) |
any charge, assignment or other Security Interest granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued,
by that Lender as security for those obligations or securities;
|
|
(i) |
release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or Security Interest
for the Lender as a party to any of the Finance Documents; or
|
|
(ii) |
require any payments to be made by the Borrower or any Security Party or grant to any person any more extensive rights than those required to be made or
granted to the relevant Lender under the Finance Documents.
|
27.18 |
Assignments, transfers and novations by the Swap Bank
|
(a) |
Notwithstanding the relevant sections of the Master Agreement, the Swap Bank may, with the consent of the Majority Lenders and the Borrower, such consents not
to be unreasonably withheld or delayed (but without requiring the consent of the Agent), assign any of its rights or transfer by novation any of its rights and obligations under the Master Agreement to which it is a party to another
bank or financial institution or to a trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, derivatives, securities or other financial assets (the "
New Swap Bank
").
|
(b) |
Any costs associated with any transfer, assignment or novation under this Clause 27.18 (
Assignments, transfers and novations by the Swap Bank
) shall be for the New Swap Bank's account.
|
(c) |
Any assignment, transfer or novation under this Clause 27.18 (
Assignments,
transfers and novations by the Swap Bank
) will only be effective on:
|
|
(i) |
any amendments as may be necessary to the Mortgages or any of the other Finance Documents;
|
|
(ii) |
receipt by the Agent of written confirmation from the New Swap Bank (in form and substance satisfactory to the Agent) that the New Swap Bank is bound by this
Agreement as regards the rights and obligations of the Swap Bank hereunder;
|
|
(iii) |
performance by the Agent of all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to such
assignment, transfer or novation to the New Swap Bank, the completion of which the Agent shall promptly notify to the existing Swap Bank and the New Swap Bank; and
|
|
(iv) |
receipt by the Agent of the New Swap Bank's consent to the Master Agreement Assignment and a new notice of assignment pursuant to the Master Assignment signed
by the Borrower and acknowledgement thereof from the New Swap Bank.
|
(d) |
The Borrower shall co-operate in providing the notice of assignment referred to in sub paragraph (iii) of paragraph (c) above.
|
28 |
VARIATIONS AND WAIVERS
|
28.1 |
Variations, waivers etc. by Majority Lenders
|
28.2 |
Variations, waivers etc. requiring agreement of all Lenders
|
(a) |
a reduction in the Margin;
|
(b) |
a postponement to the date for, or a reduction in the amount of, any payment of principal, interest, fees or other sum payable under this Agreement;
|
(c) |
an increase in any Lender's Commitment;
|
(d) |
a change to the definition of "
Majority Lenders
";
|
(e) |
a change to Clause 3 (
Position of the Lenders and the swap
bank
) or this Clause 28 (
Variations and Waivers
);
|
(f) |
any release of, or material variation to, a Security Interest, guarantee, indemnity or subordination arrangement set out in a Finance Document; and
|
(g) |
any other change or matter as regards which this Agreement or another Finance Document expressly provides that each Lender's consent is required.
|
28.3 |
Exclusion of other or implied variations
|
(a) |
a provision of this Agreement or another Finance Document; or
|
(b) |
an Event of Default; or
|
(c) |
a breach by the Borrower or a Security Party of an obligation under a Finance Document or the general law; or
|
(d) |
any right or remedy conferred by any Finance Document or by the general law,
|
29 |
NOTICES
|
29.1 |
General
|
29.2 |
Addresses for communications
|
29.3 |
Effective date of notices
|
(a) |
a notice which is delivered personally or posted shall be deemed to be served, and shall take effect, at the time when it is delivered; and
|
(b) |
a notice which is sent by fax shall be deemed to be served, and shall take effect, 2 hours after its transmission is completed.
|
29.4 |
Service outside business hours
|
(a) |
on a day which is not a business day in the place of receipt; or
|
(b) |
on such a business day, but after 5 p.m. local time,
|
29.5 |
Illegible notices
|
29.6 |
Valid notices
|
(a) |
the failure to serve it in accordance with the requirements of this Agreement or other Finance Document, as the case may be, has not caused any party to
suffer any significant loss or prejudice; or
|
(b) |
in the case of incorrect and/or incomplete contents, it should have been reasonably clear to the party on which the notice was served what the correct or
missing particulars should have been.
|
29.7 |
Electronic communication
|
(a) |
agree that, unless and until notified to the contrary, this is to be an accepted form of communication;
|
(b) |
notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that
means; and
|
(c) |
notify each other of any change to their respective addresses or any other such information supplied to them.
|
29.8 |
Effectiveness of electronic communication
|
29.9 |
Use of websites
|
(a) |
The Agent may satisfy its obligation under this Agreement to deliver any information in relation to those Lenders (the "
Website Lenders
") who accept this method of communication by posting this information onto the electronic website
www.debtdomain.com
(or such other electronic website that the Agent may designate in consultation with the Borrower) (the "
Designated Website
") if:
|
|
(i) |
the Agent expressly agrees (after consultation with each of the Lenders) that it will accept communication of the information by this method;
|
|
(ii) |
the Agent and the Website Lenders are aware of the address of and any relevant password specifications for the Designated Website; and
|
|
(iii) |
the information is in a format previously agreed between the Agent and the Website Lenders.
|
(b) |
If any Lender (a "
Paper Form Lender
") does not agree to
the delivery of information electronically then the Agent shall supply the information to the Paper Form Lender in paper form.
|
(c) |
The Agent shall supply each Website Lender with the address of and any relevant password specifications for the Designated Website following designation of
that website.
|
(d) |
The Agent shall promptly upon becoming aware of its occurrence notify the Website Lenders if:
|
|
(i) |
the Designated Website cannot be accessed due to technical failure;
|
|
(ii) |
the password specifications for the Designated Website change;
|
|
(iii) |
any new information which is required to be provided under this Agreement is posted onto the Designated Website;
|
|
(iv) |
any existing information which has been provided under this Agreement and posted onto the Designated Website is amended; or
|
|
(v) |
the Designated Website or any information posted onto the Designated Website is or has been infected by any electronic virus or similar software.
|
(e) |
If the Agent notifies the Website Lenders that any of the events occurred under paragraphs (d)(i) or (d)(v) above has occurred, all information to be provided
by the Agent under this Agreement after the date of that notice shall be supplied in paper form unless and until the Agent and each Website Lender is satisfied that the circumstances giving rise to the notification are no longer
continuing.
|
29.10 |
English language
|
29.11 |
Meaning of "notice"
|
29.12 |
Application of Master Agreement
|
30 |
SUPPLEMENTAL
|
30.1 |
Rights cumulative, non-exclusive
|
(a) |
cumulative;
|
(b) |
may be exercised as often as appears expedient; and
|
(c) |
shall not, unless a Finance Document explicitly and specifically states so, be taken to exclude or limit any right or remedy conferred by any law.
|
30.2 |
Severability of provisions
|
30.3 |
Counterparts
|
30.4 |
Third party rights
|
30.5 |
Waiver of Banking Secrecy
|
(a) |
necessary or desirable for the purposes of its internal cross-selling enabling the Borrower and/or any other member of the Group to benefit from the Agent's
or any other Authorised Person's business activities; and/or
|
(b) |
necessary or desirable to insure a risk related to the Borrower and/or any other member of the Group; and/or
|
(c) |
necessary or desirable to syndicate a risk related to the Borrower and/or any other member of the Group; and/or
|
(d) |
necessary or desirable to securitise a risk related to the Borrower and/or any other member of the Group; and/or
|
(e) |
necessary or desirable to open an account or to start a business relation with the Agent's or any other Authorised Person's parent company or any of its
subsidiaries or branches.
|
|
(i) |
any authority or person against which, pursuant to any applicable law, administrative order or court ruling, banking secrecy may not be validly asserted by an
Authorised Person;
|
|
(ii) |
the Agent's or any other Authorised Person's parent company, any of its subsidiaries, branches or representative offices;
|
|
(iii) |
any rating agency, auditor, insurance and reinsurance company, broker or professional adviser, to the extent such entity or person is bound by a statutory or
contractual duty of confidentiality;
|
|
(iv) |
any financial institution and institutional or other investor who is or might be involved in securitisation schemes, hedging agreements, participations,
credit derivatives or any other risk transfer or sharing arrangements, including, inter alia, a bank and/or other financial institution's participation in, or syndication in respect of, the Loan;
|
|
(v) |
any potential assignee or transferee or person who has entered into or is proposing to enter into contractual arrangements with the Authorised Person in
relation to the Borrower; and
|
|
(vi) |
any external computer services provider, for the purpose of maintenance or repair of the Agent's or any other Authorised Person's computer systems and date
provided that such external computer services provider is bound by the confidentiality policy of BNP Paribas.
|
30.6 |
Reference Banks
|
30.7 |
Role of Reference Banks
|
(a) |
No Reference Bank is under any obligation to provide a quotation or any other information to the Agent but may do so at the Agent's request.
|
(b) |
No Reference Bank will be liable for any action taken by it under or in connection with any Finance Document, or for any quotation provided to the Agent.
|
(c) |
No Party (other than the relevant Reference Bank) may take any proceedings against any officer, employee or agent of any Reference Bank in respect of any
claim it might have against that Reference Bank or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Finance Document, or to any quotation provided to the Agent, and any officer,
employee or agent of each Reference Bank may rely on this clause subject to the provisions of the Third Parties Act.
|
30.8 |
Third party Reference Banks
|
31 |
LAW AND JURISDICTION
|
31.1 |
English law
|
31.2 |
Exclusive English jurisdiction
|
31.3 |
Choice of forum for the exclusive benefit of the Creditor Parties
|
(a) |
to commence proceedings in relation to any Dispute in the courts of any country other than England and which have or claim jurisdiction to that Dispute; and
|
(b) |
to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in England or without commencing
proceedings in England.
|
31.4 |
Process agent
|
31.5 |
Creditor Party rights unaffected
|
31.6 |
Meaning of "proceedings" and "Dispute"
|
Lender
|
Lending Office
|
Commitment
(US Dollars) |
BNP PARIBAS
|
35, rue de la Gare – Millénaire 4 75019 Paris
France
Fax: +33 1 42 98 43 55
e-mail:
tgmo.shipping@bnpparibas.com
|
Up to $75,000,000
|
A
|
B
|
C
|
D
|
E
|
G
|
|
SHIP
|
SHIP-OWNING COMPANY
|
COUNTRY OF INCORPORATION
|
IMO REGISTERED OWNER NUMBER
|
REGISTERED OFFICE ADDRESS
|
SHARES
|
|
1
|
ALCMENE
|
Majuro Shipping Company Inc.
|
Marshall Islands
|
5566463
|
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
|
500
|
2
|
SEATTLE
|
Toku Shipping Company Inc.
|
Marshall Islands
|
5893360
|
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
|
500
|
3
|
PHAIDRA
|
Mejato Shipping Company Inc.
|
Marshall Islands
|
5981809
|
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
|
500
|
4
|
ELECTRA
|
Rakaru Shipping Company Inc.
|
Marshall Islands
|
5981812
|
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
|
500
|
5
|
ASTARTE
|
Ebadon Shipping Company Inc.
|
Marshall Islands
|
5981790
|
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
|
500
|
6
|
G. P. ZAFIRAKIS
|
Weno Shipping Company Inc.
|
Marshall Islands
|
5807949
|
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
|
500
|
7
|
P. S. PALIOS
|
Pulap Shipping Company Inc.
|
Marshall Islands
|
5763781
|
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
|
500
|
To: |
BNP Paribas
35, rue de la Gare – Millénaire 4 75019 Paris France |
1 |
We refer to the loan agreement (the "
Loan Agreement
") dated
[●]
2018 and made between ourselves, as Borrower, the Lenders referred to therein, the Swap Bank and BNP Paribas as Agent, Security Trustee and Bookrunner in connection with a facility of up to US$75,000,000.
Terms defined in the Loan Agreement have their defined meanings when used in this Drawdown Notice.
|
2 |
We request to borrow the Loan as follows:
|
(a) |
Amount: US$
[●]
;
|
(b) |
Drawdown Date:
[●]
;
|
(c) |
[Duration of the first Interest Period shall be
[●]
months;] and
|
(d) |
Payment instructions: account in our name and numbered
[●]
with
[●]
of
[●]
.
|
3 |
We represent and warrant that:
|
(a) |
the representations and warranties in Clause 10 (
Representations
and Warranties
) of the Loan Agreement would remain true and not misleading if repeated on the date of this notice with reference to the circumstances now existing; and
|
(b) |
no Event of Default or Potential Event of Default has occurred or will result from the borrowing of the Loan.
|
4 |
This notice cannot be revoked without the prior consent of the Majority Lenders.
|
1 |
A duly executed original of each Finance Document (and of each document required to be delivered by each Finance Document) other than those referred to in
Part B.
|
2 |
Copies of the certificate of incorporation and constitutional documents of the Borrower, each Guarantor, each Collateral Guarantor or any other Security
Party.
|
3 |
Copies of resolutions of the shareholders and directors of each Guarantor and each Collateral Guarantor, of the executive committee of the directors of the
Borrower, or the shareholders and directors of any other Security Party authorising the execution of each of the Finance Documents to which the Borrower, a Guarantor, a Collateral Guarantor or any other Security Party is a party and, in
the case of the Borrower, authorising named officers to give the Drawdown Notice and other notices under this Agreement.
|
4 |
The original of any power of attorney under which any Finance Document is executed on behalf of the Borrower, a Guarantor, a Collateral Guarantor or any other
Security Party.
|
5 |
Copies of all consents which the Borrower, a Guarantor, a Collateral Guarantor or any Security Party requires to enter into, or make any payment under, any
Finance Document.
|
6 |
The originals of any mandates or other documents required in connection with the opening or operation of each Earnings Account and the Liquidity Reserve
Account (including but not limited to two certified forms of identification in respect of each signatory of each Earnings Account and the Liquidity Reserve Account and of two directors of the Borrower, each Guarantor and each Collateral
Guarantor) and all other information required by the Creditor Parties or any of them in relation to their "know your customer" regulations including, but not limited to, all applicable laws of the European Union, Switzerland and United
States of America in connection with the Borrower, each Guarantor, each Collateral Guarantor and any other Security Party (whether in connection with the opening of the Earnings Account or the Liquidity Reserve Account or otherwise).
|
7 |
Documentary evidence that the agent for service of process named in Clause 31 (
Law and Jurisdiction
) has accepted its appointment.
|
8 |
Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of the Marshall Islands, English, Switzerland and such other
relevant jurisdictions as the Agent may require.
|
9 |
If the Agent so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the
Agent.
|
1 |
A duly executed original of the Mortgage, of the General Assignment and any Charterparty Assignment relating to each Ship (and of each document to be
delivered by each of them).
|
2 |
Documentary evidence that:
|
(a) |
each Ship is definitively and permanently registered in the name of the relevant Guarantor under the laws of an Approved Flag State and each Collateral Ship
is definitively and permanently registered in the name of the relevant Collateral Guarantor under the laws of an Approved Flag State;
|
(b) |
each Ship is in the absolute and unencumbered ownership of the relevant Guarantor save as contemplated by the Finance Documents and each Collateral Ship is in
the absolute and unencumbered ownership of the relevant Collateral Guarantor save as to the first priority mortgage securing the Collateral Loan Agreement and, otherwise, save as contemplated by the Finance Documents;
|
(c) |
each Ship and each Collateral Ship maintains the Approved Classification with the Approved Classification Society free of all overdue recommendations and
conditions of such Approved Classification Society;
|
(d) |
the Mortgage relating to each Ship has been duly registered against that Ship as a valid first preferred or, as the case may be, priority ship mortgage in
accordance with the laws of the relevant Approved Flag State and relating to each Collateral Ship has been duly registered against that Collateral Ship as a valid second preferred or, as the case may be, priority ship mortgage in
accordance with the laws of the relevant Approved Flag State; and
|
(e) |
each Ship and each Collateral Ship is insured in accordance with the provisions of this Agreement and all requirements therein in respect of insurances have
been complied with, including agreed form letters of undertaking of the insurance brokers and club managers, certificates of entry and/or cover notes with respect to that Ship and that Collateral Ship.
|
3 |
Documents establishing that the each Ship will, as from the Drawdown Date, be managed by the Approved Manager on terms acceptable to the Lenders, together
with:
|
(a) |
the Approved Manager's Undertakings in respect of each Ship;
|
(b) |
copies of the Approved Manager's documents of compliance (DOC) and the safety management certificate (SMC) (as defined in the ISM Code) in respect of each
Ship certified as true and in effect by the Guarantor owning that Ship and the Approved Manager; and
|
(c) |
a copy of the International Ship Security Certificate in respect of each Ship certified as true and in effect by the Guarantor owning that Ship and the
Approved Manager.
|
4 |
A valuation of each Ship and Collateral Ship (at the expense of the Borrower) addressed to the Agent, stated to be for the purposes of this Agreement and
prepared by an Approved Broker no earlier than 30 days prior to the Drawdown Date prepared in accordance with Clause 16 (
Security cover
)
which shows the value of the Ships in an amount acceptable to the Agent.
|
5 |
Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the law of the Approved Flag State, Marshall Islands, English,
Switzerland, Panama and such other relevant jurisdictions as the Agent may require.
|
6 |
A favourable opinion from an independent insurance consultant acceptable to the Agent on such matters relating to the insurances for the each Ship as the
Agent may require (all fees and expenses incurred in relation to the appointment of the marine insurance broker for the purpose of issuing such opinion shall be for the account of the Borrower).
|
7 |
Evidence satisfactory to the Agent that the Existing Indebtedness has been fully prepaid.
|
8 |
A duly executed original of the Deed of Release and any other document required to be provided thereunder.
|
9 |
A side letter executed by the Borrower and addressed to the Agent disclosing the person(s) of the Palios Family.
|
10 |
If the Agent so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the
Agent.
|
To: |
BNP Paribas for itself and for and on behalf of the Borrower, each Security Party, the Security Trustee and each Lender, as defined in the Loan Agreement
referred to below.
|
1 |
This Certificate relates to a Loan Agreement (the "
Loan Agreement
") dated
[●]
2018 and made between (1) Diana Shipping Inc. (the "
Borrower
"), (2) the banks and financial institutions named therein as Lenders, (3) BNP Paribas as Swap Bank, (4) BNP Paribas as Agent, (5) BNP Paribas as Security Trustee and (6) BNP Paribas as
Bookrunner for a loan facility of up to US$75,000,000.
|
2 |
In this Certificate, terms defined in the Loan Agreement shall, unless the contrary intention appears, have the same meanings and:
|
3 |
The effective date of this Certificate is
[●]
Provided that
this Certificate shall not come into effect unless it is signed by the Agent on or before that date.
|
4 |
The Transferor assigns to the Transferee absolutely all rights and interests
(present, future or contingent) which the Transferor has as Lender under or by virtue of the Loan Agreement and every other Finance Document in relation to
[●]
per cent. of its Contribution, outstanding to the Transferor (or its predecessors in title) which is set out below:
|
Contribution
|
Amount transferred
|
[●]
|
[●]
|
[●]
|
[●]
|
[●]
|
[●]
|
5 |
By virtue of this Transfer Certificate and clause 27 of the Loan Agreement, the
Transferor is discharged [entirely from its Commitment which amounts to $
[●]
] [from
[●]
per cent. of its Commitment, which percentage represents $
[●]
] and the Transferee acquires a Commitment of $
[●]
.]
|
6 |
The Transferee undertakes with the Transferor and each of the Relevant Parties that the Transferee will observe and perform all the obligations under the
Finance Documents which
|
7 |
The Agent, at the request of the Transferee (which request is hereby made) accepts, for the Agent itself and for and on behalf of every other Relevant Party,
this Certificate as a Transfer Certificate taking effect in accordance with clause 26 of the Loan Agreement.
|
8 |
The Transferor:
|
(a) |
warrants to the Transferee and each Relevant Party that:
|
|
(i) |
the Transferor has full capacity to enter into this transaction and has taken all corporate action and obtained all consents which are in connection with this
transaction; and
|
|
(ii) |
this Certificate is valid and binding as regards the Transferor;
|
(b) |
warrants to the Transferee that the Transferor is absolutely entitled, free of encumbrances, to all the rights and interests covered by the assignment in
paragraph 4 above; and
|
(c) |
undertakes with the Transferee that the Transferor will, at its own expense, execute any documents which the Transferee reasonably requests for perfecting in
any relevant jurisdiction the Transferee's title under this Certificate or for a similar purpose.
|
9 |
The Transferee:
|
(a) |
confirms that it has received a copy of the Loan Agreement and each of the other Finance Documents;
|
(b) |
agrees that it will have no rights of recourse on any ground against either the Transferor, the Agent, the Security Trustee or any Lender or the Swap Bank in
the event that:
|
|
(i) |
any of the Finance Documents prove to be invalid or ineffective;
|
|
(ii) |
the Borrower or any Security Party fails to observe or perform its obligations, or to discharge its liabilities, under any of the Finance Documents;
|
|
(iii) |
it proves impossible to realise any asset covered by a Security Interest created by a Finance Document, or the proceeds of such assets are insufficient to
discharge the liabilities of the Borrower or Security Party under the Finance Documents;
|
(c) |
agrees that it will have no rights of recourse on any ground against the Agent, the Security Trustee or any Lender or the Swap Bank in the event that this
Certificate proves to be invalid or ineffective;
|
(d) |
warrants to the Transferor and each Relevant Party that:
|
|
(i) |
it has full capacity to enter into this transaction and has taken all corporate action and obtained all consents which it needs to take or obtain in
connection with this transaction; and
|
|
(ii) |
this Certificate is valid and binding as regards the Transferee; and
|
(e) |
confirms the accuracy of the administrative details set out below regarding the Transferee.
|
10 |
The Transferor and the Transferee each undertake with the Agent and the Security Trustee severally, on demand, fully to indemnify the Agent and/or the
Security Trustee in respect of any claim, proceeding, liability or expense (including all legal expenses) which they or either of them may incur in connection with this Certificate or any matter arising out of it, except such as are
shown to have been mainly and directly caused by the gross and culpable negligence or dishonesty of the Agent's or the Security Trustee's own officers or employees.
|
11 |
The Transferee shall repay to the Transferor on demand so much of any sum paid by the Transferor under paragraph 10 above as exceeds one-half of the amount
demanded by the Agent or the Security Trustee in respect of a claim, proceeding, liability or expense which was not reasonably foreseeable at the date of this Certificate; but nothing in this paragraph shall affect the liability of each
of the Transferor and the Transferee to the Agent or the Security Trustee for the full amount demanded by it.
|
To: |
BNP Paribas
35, rue de la Gare – Millénaire 4 75019 Paris France |
1 |
the Loan Agreement;
|
2 |
the Master Agreement dated as of
[●]
made between ourselves and the Swap Bank; and
|
3 |
a Confirmation delivered pursuant to the said Master Agreement dated
[●]
and addressed by the Swap Bank to us.
|
A
|
B
|
C
|
D
|
E
|
F
|
G
|
H
|
I
|
|
SHIP
|
SHIP-OWNING COMPANY
|
FLAG
|
YEAR BUILT
|
CAPACITY (DWT)
|
TYPE
|
IMO NUMBER
|
APPROVED CLASSIFICATION SOCIETY
|
APPROVED CLASSIFICATION
|
|
1
|
ALCMENE
|
Majuro Shipping Company Inc.
|
Marshall Islands
|
2010
|
93,193
|
Bulk Carrier
|
9568586
|
Bureau Veritas
|
X
HULL
X
MACH,
Bulk Carrier CSR BC-A (Holds 2, 4 & 6 may be empty) ESP GRAB [20], Unrestricted navigation,
X
AUT-UMS,
X
AUT-PORT,
MON-SHAFT,
X
ALP, INWATERSURVEY
|
2
|
SEATTLE
|
Toku Shipping Company Inc.
|
Marshall Islands
|
2011
|
179,400
|
Bulk Carrier
|
9476848
|
Nippon Kaiji Kyokai
|
NS* (CSR, Bulk Carrier-Type A, BC-XII, GRAB 20, Performance Standard for Protective Coatings for Dedicated Seawater Ballast Tanks
in All Types of Ships and Double-side Skin Spaces of Bulk Carriers) (ESP) (IWS) (PSCM) MNS*
|
3
|
PHAIDRA
|
Mejato Shipping Company Inc.
|
Marshall Islands
|
2013
|
87,100
|
Bulk Carrier
|
9661211
|
American Bureau of Shipping
|
X
A1, Bulk Carrier, BC-A (holds 2, 4 and 6 may be empty), ESP, E,
X
AMS,
X
ACCU, CPS, CSR AB-CM
|
4
|
ELECTRA
|
Rakaru Shipping Company Inc.
|
Marshall Islands
|
2013
|
87,000
|
Bulk Carrier
|
9661223
|
China Classification Society
|
*CSA Bulk Carrier, Double Side Skin; CSR; BC-A(Holds Nos 2,4 & 6 may be Empty);Grab(20);PSPC(B,D);Loading Computer (S,I,G);
ESP;In-Water Survey; FTP;BWMP, *CSM, AUT-0;SCM;SEEMP(I)
|
5
|
ASTARTE
|
Ebadon Shipping Company Inc.
|
Marshall Islands
|
2013
|
81,500
|
Bulk Carrier
|
9600645
|
American Bureau of Shipping
|
X
A1, Bulk Carrier, BC-A (holds 2, 4 and 6 may be empty), ESP, E,
X
AMS,
X
ACCU, CPS, CSR AB-CM
|
6
|
G.P.ZAFIRAKIS
|
Weno Shipping Company Inc.
|
Marshall Islands
|
2013
|
179,134
|
Bulk Carrier
|
9671931
|
Lloyd's Register Classification Society (China) Co., Ltd.
|
X
100A1 Bulk Carrier, CSR, BC-A, Hold nos 2,4,6 & 8 may be empty,
GRAB[25], ESP, *IWS, LI, ShipRight(CM, ACS(B)), ECO (IHM),
X
LMC, UMS
|
7
|
P.S. PALIOS
|
Pulap Shipping Company Inc.
|
Marshall Islands
|
2014
|
179,492
|
Bulk Carrier
|
9573103
|
Bureau Veritas
|
X
HULL
X
MACH Bulk carrier CSR CPS(WBT) BC-A (holds 2,4, 6 & 8 may be empty) ESP GRAB[20] unrestricted navigation
X
AUT-UMS, MON-SHAFT,
X
ALP, INWATERSURVEY, LI-HG
|
To: |
BNP Paribas
35, rue de la Gare – Millénaire 4 75019 Paris France |
(a) |
the Market Value Adjusted Net Worth of the Group is $
[●] per cent. of the
Market Value Adjusted Total Assets
;
|
(b) |
the ratio of Consolidated Net Debt to Market Value Adjusted Total Assets less the
aggregate amount of Cash and Cash Equivalents is
[●]
; and
|
(c) |
the aggregate of all Cash and Cash Equivalents is
[●]
.
|
BORROWER
|
||
SIGNED
by
|
)
|
|
)
|
||
for and on behalf of
|
)
|
|
DIANA SHIPPING INC.
|
)
|
|
in the presence of:
|
)
|
|
LENDERS
|
||
SIGNED
by
|
)
|
|
)
|
||
for and on behalf of
|
)
|
|
BNP PARIBAS
|
)
|
|
in the presence of:
|
)
|
|
AGENT
|
||
SIGNED
by
|
)
|
|
)
|
||
for and on behalf of
|
)
|
|
BNP PARIBAS
|
)
|
|
in the presence of:
|
)
|
|
BOOKRUNNER
|
||
SIGNED
by
|
)
|
|
)
|
||
for and on behalf of
|
)
|
|
BNP PARIBAS
|
)
|
|
in the presence of:
|
)
|
|
SECURITY TRUSTEE
|
||
SIGNED
by
|
)
|
|
)
|
||
for and on behalf of
|
)
|
|
BNP PARIBAS
|
)
|
|
in the presence of:
|
)
|
|
SWAP BANK
|
||
SIGNED
by
|
)
|
|
)
|
||
for and on behalf of
|
)
|
|
BNP PARIBAS
|
)
|
|
in the presence of:
|
)
|
Element
|
Comments
|
||
A.1
|
Warning
|
·
|
this summary should be read as introduction to the prospectus;
|
|
·
|
any decision to invest in the securities should be based on consideration of the prospectus as a whole by the
investor;
|
|
|
·
|
where a claim relating to the information contained in prospectus is brought before a court, the plaintiff
investor might, under the national legislation of the Member States, have to bear the costs of translating the prospectus before the legal proceedings are initiated; and
|
|
·
|
civil liability attaches only to those persons who have tabled the summary including any translation thereof, but
only if the summary is misleading, inaccurate or inconsistent when read together with the other parts of the prospectus or it does not provide, when read together with the other parts of the prospectus, key information in order to aid
investors when considering whether to invest in such securities
|
||
A.2
|
Consent to use the prospectus by financial intermediaries
|
N/A; no consent is granted by the Issuer to the use of the prospectus for subsequent resale or final placement of
the Bonds.
|
|
Element
|
Disclosure requirement
|
||
B.1
|
Legal and commercial name
|
The legal and commercial name of the Issuer is Diana Shipping Inc.
|
|
B.2
|
The domicile and legal form of the issuer, the legislation under which the issuer operates and
its country of incorporation.
|
Diana Shipping Inc. is a corporation with limited liability but not a limited liability company or LLC,
incorporated under the laws of the Republic of Marshall Islands with registration number 13671.
|
|
B.4b
|
A description of any known trends affecting the issuer and the industries in which it operates.
|
·
|
The below section should be read in conjunction with the risks decribed under the heading “Risk Factors” in the
Annual Report on Form 20-F for the year ended December 31, 2017, that summarize the risks that may materially affect the company’s business. Changes in national and international economic conditions, including, for example interest rate
levels, inflation and employment levels, may influence the valuation of real and financial assets. In turn, this may impact the demand for goods, services and assets globally and thereby the macro economy. The current macroeconomic
situation is uncertain and there is a risk of negative developments. Such changes and developments – none of 1 which will be within the control of the Issuer – may negatively impact the Issuer's activities.
|
·
|
The values of the Group's vessels are outside of the Issuer's control and depend, among other things, on the
global economy, global trade growth, as well as oil and gas prices. On the supply side there are uncertainties tied to ordering of new vessels and scope of future scrapping. The actual residual value of the vessels and/or future contract
earnings may be lower than the Issuer estimates.
|
||
·
|
The technical operation of a vessel has a significant impact on the vessel's economic life. Technical risks will
always be present. There can be no guarantee that the parties tasked with the technical management of a vessel or overseeing such operation perform their duties according to agreement or satisfaction. Failure to adequately maintain the
technical operation of a vessel may adversely impact the operating expenses of the vessel and accordingly any future potential realization values that can be obtained.
|
||
· |
The Group's performance depends heavily on its counterparties' ability to perform their obligations under agreed
charter parties. Default by a counterparty of its obligations under its agreements with a Group Company may have adverse consequences for the overall Group. The counterparty's financial strength will thus be very important.
|
||
·
|
The Group's vessels will operate in a variety of geographic regions. Consequently, the Group may, indirectly
through its underlying investments, be exposed to political risk, risk of piracy, corruption, terrorism, outbreak of war, amongst others. The business, financial condition and results of operations of the Group may accordingly be negatively
affected if such events do occur.
|
B.5
|
Group
|
Diana Shipping Inc. is a global provider of shipping transportation services who specialize in the ownership of
dry bulk vessels. As of November 26, 2018 our fleet consists of 48 dry bulk vessels (4 Newcastlemax, 14 Capesize, 5 Post-Panamax, 5 Kamsarmax and 20 Panamax), as well as two Panamax dry bulk vessels, the ''Triton'' and ''Alcyon'', that
have been sold and expected to be delivered to their new owners at the latest by January 7, 2019. As of the same date, the combined carrying capacity of the fleet, including the m/v Triton and m/v Alcyon, is approximately 5.8 million dwt
with a weighted average age of 9.26 years. The commercial and technical management of our fleet, as well as the provision of administrative services relating to our fleet's operations, are carried out by Diana Shipping Services S.A., our
wholly-owned subsidiary, and Diana Wilhelmsen Management Limited, a 50/50 joint venture with Wilhelmsen Ship Management.
The Group’s vessels are employed primarily on medium to long-term time charters and transport a range of dry bulk
cargoes, including such commodities as iron ore, coal, grain and other materials along worldwide shipping routes.
|
B.9
|
Profit forecast or estimate
|
N/A; the prospectus does not contain any profit forecasts or
estimates.
|
B.10
|
Qualifications in the audit report
|
N/A; there are no qualifications in the audit report.
|
B.12
|
Significant change in the issuer’s financial or trading position
|
The selected historical key financial information as set out below has been derived from the Group's audited
consolidated financial statements for the years ended 31 December 2017 and 2016, prepared in accordance with generally accepted accounting principles in the United States ("US GAAP").
There has been no material adverse change in the prospects of the Group since 31 December 2017.
|
|
2017
|
2016
|
||||||
REVENUES:
|
||||||||
Time charter revenues
|
$
|
161,897
|
$
|
114,259
|
||||
|
||||||||
EXPENSES:
|
||||||||
Voyage expenses
|
8,617
|
13,826
|
||||||
Vessel operating expenses
|
90,358
|
85,955
|
||||||
Depreciation and amortization of deferred charges (Notes 2(l) and 2(m))
|
87,003
|
81,578
|
||||||
General and administrative expenses
|
26,332
|
25,510
|
||||||
Management fees to related party (Notes 3(b) and 4(d))
|
1,883
|
1,464
|
||||||
Impairment loss (Note 5)
|
442,274
|
-
|
||||||
Insurance recoveries, net of other loss (Note 5)
|
(10,879
|
)
|
-
|
|||||
Gain on contract termination
|
-
|
(5,500
|
)
|
|||||
Other loss/(income)
|
296
|
(253
|
)
|
|||||
Operating loss
|
$
|
(483,987
|
)
|
$
|
(88,321
|
)
|
||
|
||||||||
OTHER INCOME / (EXPENSES):
|
||||||||
Interest and finance costs (Note 10)
|
(26,628
|
)
|
(21,949
|
)
|
||||
Interest and other income (Note 4(b))
|
4,508
|
2,410
|
||||||
Loss from equity method investments (Note 3)
|
(5,607
|
)
|
(56,377
|
)
|
||||
Total other expenses, net
|
$
|
(27,727
|
)
|
$
|
(75,916
|
)
|
||
|
||||||||
Net loss
|
$
|
(511,714
|
)
|
$
|
(164,237
|
)
|
||
|
||||||||
Dividends on series B preferred shares (Notes 9(a) and 11)
|
(5,769
|
)
|
(5,769
|
)
|
||||
|
||||||||
Net loss attributed to common stockholders
|
$
|
(517,483
|
)
|
$
|
(170,006
|
)
|
||
|
||||||||
Loss per common
share, basic and diluted
(Note 11)
|
$
|
(5.41
|
)
|
$
|
(2.11
|
)
|
||
|
||||||||
Weighted average
number of common shares, basic and diluted
(Note 11)
|
95,731,093
|
80,441,517
|
|
2017
|
2016
|
||||||
Net loss
|
$
|
(511,714
|
)
|
$
|
(164,237
|
)
|
||
Other comprehensive income/(loss) (Actuarial gain/(loss))
|
109
|
(84
|
)
|
|||||
Comprehensive loss
|
$
|
(511,605
|
)
|
$
|
(164,321
|
)
|
|
2017
|
2016
|
||||||
Cash Flows from Operating Activities:
|
||||||||
Net loss
|
$
|
(511,714
|
)
|
$
|
(164,237
|
)
|
||
Adjustments to reconcile net loss to net cash from operating activities:
|
||||||||
Depreciation and amortization of deferred charges
|
87,003
|
81,578
|
||||||
Impairment loss (Note 5)
|
442,274
|
-
|
||||||
Amortization of financing costs (Note 10)
|
1,455
|
1,503
|
||||||
Amortization of free lubricants benefit
|
-
|
(15
|
)
|
|||||
Compensation cost on restricted stock (Note 9(d))
|
8,232
|
8,313
|
||||||
Actuarial gain/(loss)
|
109
|
(84
|
)
|
|||||
Gain from insurance recoveries, net of other loss (Note 5)
|
(10,879
|
)
|
-
|
|||||
Gain on shipbuilding contract termination
|
-
|
(278
|
)
|
|||||
Loss from equity method investments, net of dividends (Note 3)
|
5,607
|
56,377
|
||||||
(Increase) / Decrease in:
|
||||||||
Receivables
|
966
|
(1,391
|
)
|
|||||
Due from related parties
|
(141
|
)
|
3,334
|
|||||
Inventories
|
90
|
391
|
||||||
Prepaid expenses and other assets
|
142
|
620
|
||||||
Increase / (Decrease) in:
|
||||||||
Accounts payable
|
1,382
|
(2,391
|
)
|
|||||
Due to related parties
|
246
|
(39
|
)
|
|||||
Accrued liabilities, net of accrued preferred dividends
|
2,512
|
(715
|
)
|
|||||
Deferred revenue
|
2,385
|
(1,592
|
)
|
|||||
Other liabilities
|
162
|
117
|
||||||
Drydock costs
|
(6,418
|
)
|
(2,489
|
)
|
||||
Net cash provided by / (used in) Operating Activities
|
$
|
23,413
|
$
|
(20,998
|
)
|
|||
|
||||||||
Cash Flows from Investing Activities:
|
||||||||
Payments for vessel acquisitions, improvements and construction (Note 5)
|
(125,781
|
)
|
(50,911
|
)
|
||||
Proceeds from vessel sale, net of expenses (Note 5)
|
2,032
|
-
|
||||||
Proceeds from insurance contract, net of expenses (Note 5)
|
11,362
|
-
|
||||||
Proceeds from sale of investment (Note 3)
|
158
|
-
|
||||||
Proceeds from shipbuilding contract termination (Notes 5)
|
-
|
9,413
|
||||||
Cash dividends from investment in Diana Containerships Inc. (Note 3(a))
|
-
|
96
|
||||||
Loan to Diana Containerships Inc. (Note 4(b))
|
(40,000
|
)
|
-
|
|||||
Joint venture investment (Note 3(b))
|
-
|
-
|
||||||
Payments for plant, property and equipment (Note 6)
|
(104
|
)
|
(217
|
)
|
||||
Net cash used in Investing Activities
|
$
|
(152,333
|
)
|
$
|
(41,619
|
)
|
||
|
||||||||
Cash Flows from Financing Activities:
|
||||||||
Proceeds from long-term debt (Note 7)
|
57,240
|
39,265
|
||||||
Proceeds from issuance of common stock, net of expenses (Note 9(c))
|
77,311
|
-
|
||||||
Cash dividends on preferred stock
|
(5,769
|
)
|
(5,769
|
)
|
||||
Payments for repurchase of common stock (Note 9(e))
|
-
|
-
|
||||||
Financing costs
|
(31
|
)
|
(466
|
)
|
||||
Loan payments (Note 7)
|
(55,164
|
)
|
(42,489
|
)
|
||||
Net cash provided by / (used in) Financing Activities
|
$
|
73,587
|
$
|
(9,459
|
)
|
|||
|
||||||||
Net decrease in cash, cash equivalents and restricted cash
|
(55,333
|
)
|
(72,076
|
)
|
||||
|
||||||||
Cash, cash equivalents and restricted cash at beginning of the year
|
121,142
|
193,218
|
||||||
|
||||||||
Cash, cash equivalents and restricted cash at end of the year
|
$
|
65,809
|
$
|
121,142
|
||||
|
||||||||
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH
|
||||||||
Cash and cash equivalents
|
$
|
40,227
|
$
|
98,142
|
||||
Restricted cash
|
25,582
|
23,000
|
||||||
Cash, cash equivalents and restricted cash
|
$
|
65,809
|
$
|
121,142
|
||||
SUPPLEMENTAL CASH FLOW INFORMATION
|
||||||||
Related party loan reduction in exchange for preferred shares (Note 4(b))
|
$
|
3,000
|
$
|
-
|
||||
Interest, net of amounts capitalized
|
$
|
24,503
|
$
|
19,265
|
|
||||||||||||||||||||||||||||||||
|
Preferred Stock
|
Common Stock
|
||||||||||||||||||||||||||||||
|
# of Shares
|
Par Value
|
# of Shares
|
Par Value
|
Additional Paid-in Capital
|
Other Comprehensive Income / (Loss)
|
Retained Earnings/
(Accumulated Deficit)
|
Total Equity
|
||||||||||||||||||||||||
BALANCE, December 31, 2015
|
2,600,000
|
$
|
26
|
82,546,017
|
$
|
825
|
$
|
976,880
|
$
|
269
|
$
|
240,366
|
$
|
1,218,366
|
||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Net loss
|
-
|
$
|
-
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
(164,237
|
)
|
$
|
(164,237
|
)
|
||||||||||||||||
Issuance of restricted stock and compensation cost (Note 9(d))
|
-
|
-
|
2,150,000
|
22
|
8,291
|
-
|
-
|
8,313
|
||||||||||||||||||||||||
Dividends on series B preferred stock (Note 9(a))
|
-
|
-
|
-
|
-
|
-
|
-
|
(5,769
|
)
|
(5,769
|
)
|
||||||||||||||||||||||
Other comprehensive loss
|
-
|
-
|
-
|
-
|
-
|
(84
|
)
|
-
|
(84
|
)
|
||||||||||||||||||||||
BALANCE, December 31, 2016
|
2,600,000
|
$
|
26
|
84,696,017
|
$
|
847
|
$
|
985,171
|
$
|
185
|
$
|
70,360
|
$
|
1,056,589
|
||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Net loss
|
-
|
$
|
-
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
(511,714
|
)
|
$
|
(511,714
|
)
|
||||||||||||||||
Issuance of common stock (Note 9(c))
|
-
|
-
|
20,125,000
|
201
|
77,110
|
-
|
-
|
77,311
|
||||||||||||||||||||||||
Issuance of restricted stock and compensation cost (Note 9(d))
|
-
|
-
|
1,310,000
|
13
|
8,219
|
-
|
-
|
8,232
|
||||||||||||||||||||||||
Dividends on series B preferred stock (Note 9(a))
|
-
|
-
|
-
|
-
|
-
|
-
|
(5,769
|
)
|
(5,769
|
)
|
||||||||||||||||||||||
Other comprehensive income
|
-
|
-
|
-
|
-
|
-
|
109
|
-
|
109
|
||||||||||||||||||||||||
BALANCE, December 31, 2017
|
2,600,000
|
$
|
26
|
106,131,017
|
$
|
1,061
|
$
|
1,070,500
|
$
|
294
|
$
|
(447,123
|
)
|
$
|
624,758
|
B.13
|
Recent events relevant to the evaluation of the issuer’s solvency
|
There have been no recent events particular to the Issuer which are to a material extent relevant to the
evaluation of the issuer’s solvency.
|
B.14
|
If the issuer is dependent upon other entities within the group, this must be clearly stated
|
Diana Shipping Inc., as parent company, is dependent upon all of its subsidiaries, and in particular the vessel
owning single purpose companies and the wholly-owned subsidiary Diana Shipping Services S.A. and the established 50/50 joint venture with Wilhelmsen Ship Management named Diana Wilhelmsen Management Limited in Cyprus. A significant part of
the cash flow generation required to service the parent company’s obligations originate from these subsidiaries.
|
B.15
|
Principal activities
|
The Group’s vessels are employed primarily on medium to long-term time charters and transport a range of dry
bulk cargoes, including such commodities as iron ore, coal, grain and other materials along worldwide shipping routes.
|
B.17
|
Credit ratings
|
N/A; Diana Shipping Inc. do not have any public credit rating
|
Element
|
Disclosure requirement
|
|
C.1
|
Type of class of securities being offered
|
The Bonds will constitute senior debt obligations of the Issuer. The Bonds shall rank at least pari passu with
each other and with all other senior unsecured obligations of the Issuer other than obligations which are mandatorily preferred by law. The Bonds shall rank ahead of subordinated capital. The Bond Issue is unsecured.
|
C.2
|
Currency of the securities issue.
|
The Bonds have been issued in USD and will be quoted and traded in USD.
|
C.5
|
Any restrictions on the free transferability of the securities.
|
The Bonds are freely transferable and may be pledged, subject to the following:
(i) Bondholders will not be permitted to transfer the Bonds except (a) subject to an effective registration
statement under the U.S. Securities Act, (b) to a person that the bondholder reasonably believes is a QIB within the meaning of Rule 144A that is purchasing for its own account, or the account of another QIB, in a transaction meeting the
requirements of Rule 144A, (c) in an offshore transaction, including a transaction on the Oslo Børs, meeting the requirements of Regulation S under the U.S. Securities Act, , and (d) pursuant to any other exemption from registration under
the U.S. Securities Act, including Rule 144 thereunder (if available).
Page 13
(ii) Bondholders may be subject to purchase or transfer restrictions with regard to the Bonds, as applicable from
time to time under local laws to which a Bondholder may be subject (due e.g. to its nationality, its residency, its registered address, its place(s) for doing business). Each Bondholder must ensure compliance with local laws and regulations
applicable at own cost and expense.
|
C.8
|
Rights attached to the securities
|
Limitation of rights of action
(a) No Bondholder is entitled to take any enforcement action, instigate any insolvency procedures, or take other
action against the Issuer or any other party in relation to any of the liabilities of the Issuer or any other party under or in connection with the Finance Documents, other than through the Bond Trustee and in accordance with these Bond
Terms, provided, however, that the Bondholders shall not be restricted from exercising any of their individual rights derived from these Bond Terms, including the right to exercise the Put Option.
(b) Each Bondholder shall immediately upon request by the Bond Trustee provide the Bond Trustee with any such
documents, including a written power of attorney (in form
and substance satisfactory to the Bond Trustee), as the Bond Trustee deems necessary for the purpose of exercising
its rights and/or carrying out its duties under the Finance Documents. The Bond Trustee is under no obligation to represent a Bondholder which does not comply with such request.
Bondholders’ rights
(a) If a beneficial owner of a Bond not being registered as a Bondholder wishes to exercise any rights under the
Finance Documents, it must obtain proof of ownership of the Bonds, acceptable to the Bond Trustee.
(b) A Bondholder (whether registered as such or proven to the Bond Trustee’s satisfaction to be the beneficial
owner of the Bond as set out in paragraph (a) above) may issue one or more powers of attorney to third parties to represent it in relation to some or all of the Bonds held or beneficially owned by such Bondholder. The Bond Trustee shall
only have to examine the face of a power of attorney or similar evidence of authorisation that has been provided to it pursuant to this Clause 3.3 (Bondholders’ rights) and may assume that it is in full force and effect, unless otherwise is
apparent from its face or the Bond Trustee has actual knowledge to the contrary.
|
Element
|
Disclosure requirement
|
|
D.2
|
Key information on the key risks that are specific to the issuer.
|
The below section should be read in conjunction with the risks decribed under the heading “Risk Factors” in the
Annual Report on Form 20-F for the year ended December 31, 2017, that summarize the risks that may materially affect the company’s business.
Industry Specific Risk Factors
·
Charter hire rates for dry bulk carriers may remain at low levels or decrease in the future, which may adversely affect our
earnings.
·
The dry bulk carrier charter market remains significantly below its high in 2008, which has had and may continue to have an
adverse effect on our revenues, earnings and profitability, and may affect our ability to comply with our loan covenants.
·
If economic conditions throughout the world decline, in particular in the EU, in China and the rest of the Asia-Pacific
region, it could negatively affect our earnings, financial condition and cash flows and may further adversely affect the market price of our common shares.
·
A decrease in the level of China’s export of goods or an increase in trade protectionism could have a material adverse
impact on our charterers’ business and, in turn, could cause a material adverse impact on our earnings, financial condition and cash flows.
·
A decline in the state of global financial markets and economic conditions may adversely impact our ability to obtain
additional financing or refinance our existing loan and credit facilities on acceptable terms which may hinder or prevent us from expanding our business.
·
An over-supply of dry bulk carrier capacity may prolong or further depress the current low charter rates and, in turn,
adversely affect our profitability.
·
Risks associated with operating ocean-going vessels could affect our business and reputation, which could adversely affect
our revenues and stock price.
Company Specific Risk Factors
·
The market values of our vessels have declined in recent years and may further decline, which could limit the amount of
funds that we can borrow and could trigger breaches of certain financial covenants contained in our loan facilities, which could adversely affect our operating results, and we may incur a loss if we sell vessels following a decline in their
market values.
·
We charter some of our vessels on short-term time charters in a volatile shipping industry and a decline in charter hire
rates could affect our results of operations and our ability to pay dividends.
·
Rising crew costs could adversely affect our results of operations.
·
Our involvement with Diana Containerships Inc. may expose us to risks which may adversely affect our financial condition.
·
Our investment in Diana Wilhelmsen Management Limited may expose us to additional risks.
·
The effects of the recent Greek crisis could adversely affect the operations of our fleet manager, which has offices in
Greece.
·
A cyber-attack could materially disrupt our business.
·
The Public Company Accounting Oversight Board inspection of our independent accounting firm, could lead to findings in our
auditors’ reports and challenge the accuracy of our published audited consolidated financial statements.
·
Our earnings may be adversely affected if we are not able to take advantage of favorable charter rates.
·
Investment in derivative instruments such as forward freight agreements could result in losses.
|
·
We may have difficulty effectively managing any further growth, which may adversely affect our earnings.
·
We cannot assure you that we will be able to borrow amounts under our loan facilities and restrictive covenants in our loan
facilities impose financial and other restrictions on us.
·
We cannot assure you that we will be able to refinance indebtedness incurred under our loan facilities.
·
Purchasing and operating secondhand vessels may result in increased operating costs and reduced operating days, which may
adversely affect our earnings.
·
We are subject to certain risks with respect to our counterparties on contracts, and failure of such counterparties to meet
their obligations could cause us to suffer losses or otherwise adversely affect our business.
·
In the highly competitive international shipping industry, we may not be able to compete for charters with new entrants or
established companies with greater resources, and as a result, we may be unable to employ our vessels profitably.
·
We may be unable to attract and retain key management personnel and other employees in the shipping industry, which may
negatively impact the effectiveness of our management and results of operations.
·
The fiduciary duties of our officers and directors may conflict with those of the officers and director of Diana
Containerships.
·
We may not have adequate insurance to compensate us if we lose our vessels or to compensate third parties.
·
Our vessels may suffer damage and we may face unexpected drydocking costs, which could adversely affect our cash flow and
financial condition.
·
The aging of our fleet may result in increased operating costs in the future, which could adversely affect our earnings.
·
We are exposed to U.S. dollar and foreign currency fluctuations and devaluations that could harm our reported revenue and
results of operations.
·
Volatility in the London Interbank Offered Rate, could affect our profitability, earnings and cash flow.
·
We depend upon a few significant customers for a large part of our revenues and the loss of one or more of these customers
could adversely affect our financial performance.
·
We are a holding company, and we depend on the ability of our subsidiaries to distribute funds to us in order to satisfy
our financial obligations.
·
Because we are organized under the laws of the Marshall Islands, it may be difficult to serve us with legal process or
enforce judgments against us, our directors or our management.
·
The international nature of our operations may make the outcome of any bankruptcy proceedings difficult to predict.
·
If we expand our business further, we may need to improve our operating and financial systems and will need to recruit
suitable employees and crew for our vessels.
·
We may have to pay tax on U.S. source income, which would reduce our earnings.
·
U.S. federal tax authorities could treat us as a “passive foreign investment company”, which could have adverse U.S.
federal income tax consequences to U.S. shareholders.
|
||
D.3
|
Key information on the key risks that are specific to the securities
|
Bond Specific Risk Factors
·
Under the terms of the Bond issue the Issuer is permitted to incur liabilities that will rank senior in priority to the
Bonds, including, Inter Alia, Senior Secured Bank Debt.
·
Mandatory prepayment events may lead to a prepayment of the Bonds in circumstances where an investor may not be able to
reinvest the prepayment proceeds at an equivalent rate of interest.
·
Bankruptcy and insolvency proceedings may prove difficult depending on which jurisdiction proceedings are opened in, and
the Issuer's liabilities in respect of the Bonds may rank junior to certain of the Issuer's debts including the Issuer’s Senior Secured Bank Debt.
·
There will only be a limited trading market for the Bonds.
·
The market price of the Bonds may be volatile.
·
The bondholders will be subject to restrictions on transfers of the Bonds.
·
The terms and conditions of the Bond Terms will allow for modification of the Bonds or security, waivers or authorizations
of breaches and substitution of the Issuer which, in certain circumstances, may be affected without the consent of bondholders.
·
Legal investment considerations may restrict certain investments.
·
The Issuer may incur substantial indebtedness.
·
The Issuer’s ability to service its indebtedness depends on many factors beyond its control.
·
The Bonds may not be a suitable investment for all investors.
·
Fulfilment of conditions precedent.
·
The terms and conditions of the Bond Terms will impose significant operating and financial restrictions, which may prevent
the Issuer from capitalizing on business opportunities and taking some actions.
·
The price of the Bonds is subject to risks of interest rate and currency fluctuation.
·
Significant changes in exchange rates may have a material adverse effect on the value of the principal payable on the
Bonds.
·
The Bonds may be subject to optional redemption by the Issuer, which may have a material adverse effect on the value of the
Bonds, and in such circumstances an investor may not be able to reinvest the redemption proceeds at an equivalent rate of interest.
·
The enforcement of rights as a bondholder across multiple jurisdictions may prove difficult. Furthermore, in the event any
bondholder’s rights as a bondholder have been infringed, it may be difficult to enforce judgments against the Issuer or its respective directors or management.
·
Change of law.
|
Element
|
Disclosure requirement
|
|
E.2b
|
Reasons for the offer and use of proceeds when different from making profit and/or hedging
certain risks.
|
N/A; there will be no public offering of the Bonds
|
E.3
|
A description of the terms and conditions of the offer.
|
N/A; there will be no public offering of the Bonds
|
E.4
|
A description of any interest that is material to the issue/offer including conflicting
interests.
|
N/A; there will be no public offering of the Bonds
|
E.7
|
Estimated expenses charged to the investor by the issuer or the offeror
|
N/A; there will be no public offering of the Bonds
|
(i) |
have sufficient knowledge and experience to make a meaningful evaluation of the Bonds, the merits and risks of investing in the Bonds and the information contained
or incorporated by reference in this Securities Note and/or Registration Document or any applicable supplement;
|
(ii) |
have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its particular financial situation, an investment in the Bonds and
the impact the Bonds will have on its overall investment portfolio;
|
(iii) |
have sufficient financial resources and liquidity to bear all of the risks of an investment in the Bonds, including where the currency for principal or interest
payments is different from the potential investor’s currency;
|
(iv) |
understand thoroughly the terms of the Bonds and be familiar with the behavior of the financial markets; and
|
(v) |
be able to evaluate (either alone or with the help of a financial adviser) possible scenarios for economic, interest rate and other factors that may affect its
investment and its ability to bear the applicable risks.
|
1
|
RISK FACTORS
|
4
|
2
|
Responsibility Statement
|
6
|
3
|
THIRD PARTY INFORMATION
|
7
|
4
|
INFORMATION CONCERNING THE SECURITIES
|
8
|
5
|
ADDITIONAL INFORMATION
|
21
|
6
|
APPENDIX 1: BOND AGREEMENT
|
22
|
1 |
RISK FACTORS
|
|
● |
Un
der the terms of the Bond issue the Issuer is permitted to incur liabilities that will rank senior in priority to the Bonds, including, Inter Alia, Senior Secured Bank Debt.
|
|
● |
Mandatory prepayment events may lead to a prepayment of the Bonds in circumstances where an investor may not be able to reinvest the prepayment
proceeds at an equivalent rate of interest.
|
|
● |
Bankruptcy and insolvency proceedings may prove difficult depending on which jurisdiction proceedings are opened in, and the Issuer's liabilities
in respect of the Bonds may rank junior to certain of the Issuer's debts including the Issuer’s Senior Secured Bank Debt.
|
|
● |
There will only be a limited trading market for the Bonds.
|
|
● |
The market price of the Bonds may be volatile.
|
|
● |
The bondholders will be subject to restrictions on transfers of the Bonds.
|
|
● |
The terms and conditions of the Bond Terms will allow for modification of the Bonds or security, waivers or authorizations of breaches and
substitution of the Issuer which, in certain circumstances, may be affected without the consent of bondholders.
|
|
● |
Legal investment considerations may restrict certain investments.
|
|
● |
The Issuer may incur substantial indebtedness.
|
|
● |
The Issuer’s ability to service its indebtedness depends on many factors beyond its control.
|
|
● |
The Bonds may not be a suitable investment for all investors.
|
|
● |
Fulfilment of conditions precedent.
|
|
● |
The terms and conditions of the Bond Terms will impose significant operating and financial restrictions, which may prevent the Issuer from
capitalizing on business opportunities and taking some actions.
|
|
● |
The price of the Bonds is subject to risks of interest rate and currency fluctuation.
|
|
● |
Significant changes in exchange rates may have a material adverse effect on the value of the principal payable on the Bonds.
|
|
● |
The Bonds may be subject to optional redemption by the Issuer, which may have a material adverse effect on the value of the Bonds, and in such
circumstances an investor may not be able to reinvest the redemption proceeds at an equivalent rate of interest.
|
|
● |
The enforcement of rights as a bondholder across multiple jurisdictions may prove difficult. Furthermore, in the event any bondholder’s rights as a
bondholder have been infringed, it may be difficult to enforce judgments against the Issuer or its respective directors or management.
|
|
● |
Change of law.
|
|
|
3 |
THIRD PARTY INFORMATION
|
4 |
INFORMATION CONCERNING THE SECURITIES
|
Reference name of the Bond Issue:
|
9.50% USD 100,000,000 Senior Unsecured Callable Bond Issue 2018/2023
|
ISIN:
|
NO0010832868
|
Issue date:
|
14 September 2018
|
Issuer:
|
Diana Shipping Inc. (a Marshall Islands corporation with registration number 13671) with LEI number 549300XD7FHNJ0THIV12
|
Group:
|
Means the Issuer and its Subsidiaries from time to time. A “Group Company” means the Issuer or any of its subsidiaries.
|
Currency:
|
USD
|
Borrowing Limit:
|
USD 125,000,000
|
Issue Amount/First Tranche:
|
USD 100,000,000
|
Coupon rate:
|
9.50% p.a., semi-annual interest payments.
|
Settlement Date:
|
27 September 2018. Notice is expected to be given to subscribers minimum two banking days prior to the Settlement Date.
|
Maturity Date:
|
27 September 2023 (5 years after Settlement Date).
|
First Interest Payment Date:
|
27 March 2018 (6 months after Settlement Date).
|
Last Interest Payment Date:
|
Maturity Date.
|
Interest Payments:
|
Interest will start to accrue on Settlement Date and shall be payable semi-annually in arrears on the interest payment day in March and
September each year (each an “Interest Payment Date”). Day count fraction for coupon is “30/360”, business day convention is “unadjusted” and business day is “Oslo”, “London” and “New York”.
|
Issue Price:
|
100% of nominal value
|
Yield:
|
Investors wishing to invest in the Bonds after the Issue Date must pay the market price for the Bonds in the secondary market at the time
of purchase. Depending on the development in the bond market in general and the development of the Issuer, the price of the Bonds may have increased (above par) or decreased (below par). If the price has increased, the yield for the
purchaser in the secondary market will be lower than the Interest Rate of the Bonds and vice versa. If the Bonds are bought and sold at par value the yield will be the same as the Interest Rate (9.50% per annum).
|
Amortization:
|
The Bonds shall be repaid in full at the Maturity Date at 100% of nominal value (plus accrued interest on redeemed Bonds).
|
Nominal value:
|
The Bonds will have a nominal value of USD 50,000 each.
|
Tap Issues:
|
The Issuer may at one or more occasions issue additional Bonds under the Bond Issue up to an aggregate amount equal to the Borrowing Limit
(each such issue a “Tap Issue”). For Tap Issues not falling on an Interest Payment Date, accrued interest will be calculated using standard market practice in the secondary bond market.
|
Status of the Bonds:
|
The Bonds will constitute senior debt obligations of the Issuer. The Bonds shall rank at least pari passu with each other and with all
other senior unsecured obligations of the Issuer other than obligations which are
|
mandatorily preferred by law. The Bonds shall rank ahead of subordinated capital. The Bond Issue is unsecured.
|
|
Purpose of the Bonds:
|
The net proceeds from the Bonds shall be used for (i) prepayment in full of the Existing Notes (as defined below) and/or prepayment, in
full or in part, or refinancing of other debt of the Group, and (ii) general corporate purposes.
|
Existing Notes:
|
The senior unsecured notes due 15 May 2020 with ISIN MHY2066G1200 with a total outstanding amount of USD 63.25 million and issued by the
Issuer.
|
Call Options (American):
|
The Issuer may redeem the Bonds (in whole or in parts) as follows:
(i)
at any time from and including the Interest Payment Date falling 3 years after Settlement Date to, but not including, the Interest Payment Date falling 4 years after
Settlement Date at a price equal to 103.8% of nominal value (plus accrued interests on the redeemed Bonds);
(ii)
at any time from and including the Interest Payment Date falling 4 years after Settlement Date to, but not including, the Interest Payment Date falling 4 years and 6 months
after Settlement Date at a price equal to 101.9% of nominal value (plus accrued interests on the redeemed Bonds);
(iii)
at any time from and including the Interest Payment Date falling 4 years and 6 months after Settlement Date to, but not including, the Final Maturity Date at a price equal
to 100.00% of nominal value (plus accrued interests on the redeemed Bonds).
|
Representations and warranties:
|
Standard representations and warranties as per the Trustee’s rider for representations and warranties. The representations and warranties
shall be made on the execution date of the relevant Finance Document, and shall be deemed to be repeated on the Settlement Date and, in case of a Tap Issue, on the date of issuance of any additional Bonds.
|
General Undertakings:
|
During the term of the Bonds, the Issuer shall (unless the Trustee or the Bondholders’ Meeting (as the case may be) in writing have agreed
otherwise) comply with the following general undertakings at any time:
|
a)
Merger: The Issuer shall not, and shall ensure that no other Group Company shall, carry out any merger or other business combination or corporate reorganization involving a
consolidation of the assets and obligations of the Issuer or any other Group Company with any other companies or entities if such transaction would have a Material Adverse Effect.
|
|
b)
De-mergers: The Issuer shall not, and shall ensure that no other Group Company shall, carry out any de-merger or other corporate reorganization involving a split of the
Issuer or any other Group Company into two or more separate companies or entities, if such transaction would have a Material Adverse Effect.
|
|
c)
Continuation of business: The Issuer shall procure that no material change is made to the general nature of the business of the Group and/or the Issuer from that carried
on at the date of the Bond Terms.
|
|
d)
Corporate status: The Issuer shall not change its type of organization or jurisdiction of organization.
|
|
e)
Disposal of business: The Issuer shall not, and shall procure that
|
the other Group Companies shall not, sell or otherwise dispose of all or substantially all of the Group’s assets or operations to any
person not being a member of the Group, unless such sale, transfer or disposal is carried out in the ordinary course of business and would not have a Material Adverse Effect.
f)
Arm’s length transactions: The Issuer shall not, and the Issuer shall ensure that no other Group Company shall, enter into any transaction with any person except on arm’s
length terms and for fair market value.
g)
Compliance with laws: The Issuer shall, and shall ensure that all other Group Companies shall, carry on its business in accordance with acknowledged, careful and sound
practices in all aspects and comply in all respects with all laws and regulations it or they may be subject to from time to time. Breach of these obligations shall be regarded as non-compliance only if such breach would have a Material
Adverse Effect.
h)
Litigations: The Issuer shall, promptly upon becoming aware of them, send the Trustee such relevant details of any:
(i)
litigations, arbitrations or administrative proceedings which have been or might be started by or against any Group Company and which, if decided adversely is likely to
have a Material Adverse Effect; and
(ii)
other events which have occurred or might occur and which is likely to have a Material Adverse Effect.
i)
Reporting: The Issuer shall of its own accord make its Annual Financial Statements available to the Trustee and on its web pages for public distribution not later than 120
days after the end of each financial year and Interim Accounts not later than 60 days after the end of each 3 months interim period (each such date a “Reporting Date”). Such reports shall be prepared in accordance with GAAP, and include
a profit and loss account, balance sheet, cash flow statement and management commentary or report from the Board of Directors in the form in which the Issuer is required to file them with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act.
|
|
Special Undertakings:
|
During the term of the Bonds, the Issuer shall (unless the Trustee or the Bondholders’ Meeting (as the case may be) in writing have agreed
otherwise) comply with the following special covenants at any time:
a)
Distribution Restrictions: If (i) an Event of Default or an event or circumstance which, with the giving of any notice or the lapse of time, would constitute an Event of
Default (a “Default”) has occurred and is continuing, (ii) an Event of Default or a Default would result therefrom, (iii) the Issuer is not in compliance with the Financial Covenants, (iv) the making of any Distribution by the Issuer or
a Subsidiary would result in the Issuer not being in compliance with the Financial Covenants or (v) if, as a result of a Distribution by the Issuer or a Subsidiary, except a Preferred Share Distribution, the Remaining Cash Position is
less than the Remaining Cash Requirement, the Issuer shall not declare or make any Distribution.
b)
Subsidiary distribution: Save for obligations under any Financial Indebtedness, the Issuer shall not permit any Subsidiary to create or permit to exist any contractual
obligation (or encumbrance) restricting the right of any Subsidiary to:
|
(i)
pay dividends or make other Distributions to its shareholders;
(ii)
service any Financial Indebtedness to the Issuer;
(iii)
make any loans to the Issuer; or
(iv)
transfer any of its assets and properties to the Issuer;
if the creation of such contractual obligation is reasonably likely to prevent the Issuer from complying with its payment obligations under
the Bond Terms.
c)
Negative pledge: The Issuer shall not, and shall ensure that no Group Company shall, create, permit to subsist or allow to exist any mortgage, pledge, lien or any other
encumbrance over any of its present or future respective assets (including shares in Subsidiaries) or its revenues, other than the encumbrances granted to secure any of the following:
(i)
the Permitted Security;
(ii)
any netting or set-off arrangement entered into by the Issuer or any other Group Company (as the case may be) in the ordinary course of its banking arrangements for the
purpose of netting debt and credit balances of the Issuer (if applicable); and
(iii)
any lien arising by operation of law.
d)
Financial Indebtedness restrictions: The Issuer shall not, and shall ensure that no Group Company shall, incur, create or permit to subsist any Financial Indebtedness
(including guarantees) other than the Permitted Financial Indebtedness (as defined below).
e)
Financial support restrictions: The Issuer shall not and shall ensure that no other Group Company shall, grant any loans, guarantees or other financial assistance
(including, but not limited to granting of security) (“Financial Support”) to or for the benefit of any third party or other Group Company, other than any Financial Support granted:
(i)
in connection with Permitted Financial Indebtedness; and
(ii)
in the ordinary course of business.
f)
Insurances: The Issuer shall, and the Issuer shall procure that each Group Company will, maintain with reputable insurance companies, funds or underwriters adequate
insurance or captive arrangements with respect to its assets, equipment and business against such liabilities, casualties and contingencies and of such types and in such amounts as are consistent with prudent business practice in their
relevant jurisdiction.
g)
Listing: The Issuer shall ensure that its ordinary shares remain listed on the New York Stock Exchange or another recognized stock exchange.
|
|
Financial Covenants:
|
The Issuer undertakes to comply with the following Financial Covenants during the term of the Bond Issue:
a)
Minimum Liquidity shall not be less than USD 10,000,000.
b)
Tangible Net Worth of the Group shall exceed 20% of Total Assets; and
c)
Net Borrowings to Total Assets shall not exceed 70%.
The Issuer undertakes to comply with the above Financial Covenants at all times, such compliance to be measured on each Quarter Date and
|
certified by the Issuer by delivery of a compliance certificate, setting out (in reasonable detail) computations evidencing compliance with
the Financial Covenants, with the delivery of each Financial Report on the relevant Reporting Date. The Financial Covenants shall be calculated on a consolidated basis for the Group during the lifetime of the Bonds.
|
|
Definitions:
|
“Acceptable Bank” means, in relation to Cash and Cash Equivalents, a commercial bank, savings bank or trust company which has a rating of
BBB or higher from Standard & Poor's Ratings Service or Baa2 or higher from Moody's Investor Service Limited or a comparable rating from a nationally recognized credit rating agency for its long term debt obligations.
“Annual Financial Statement” means the audited consolidated annual financial statements of the Issuer for any financial year, prepared in
accordance with GAAP, such financial statements to include a profit and loss account, balance sheet, cash flow statement, managements summary and report of the board of directors in the form in which the Issuer is required to file them
with the SEC pursuant to Section 13 or 15(d) of the Exchange Act.
“Bondholders” means a holder of Bond(s), as registered in the CSD, from time to time.
“Bondholders’ Meeting” means a meeting of Bondholders, as set out in the Bond Terms.
“Bonds” means the debt instruments issued by the Issuer pursuant to this Term Sheet/Bond Terms.
“Business Day” means a day on which both the relevant CSD settlement system is open.
“Cash and Cash Equivalents” means on any date, the aggregate equivalent in USD on such date of the then current market value of:
a)
cash in hand or amounts standing to the credit of any current and/or on deposit accounts with an Acceptable Bank; and
b)
time deposits with Acceptable Banks and certificates of deposit issued, and bills of exchange accepted, by an Acceptable Bank;
in each case to which any Group Company is beneficially entitled at the time and to which any Group Company has free and unrestricted
access and which is not subject to any Security.
“Decisive Influence” means a person having, as a result of an agreement or through the ownership of shares or interests in another person
(directly or indirectly):
(i)
a majority of the voting rights in that other person; or
(ii)
a right to elect or remove a majority of the members of the board of directors of that other person.
"Distribution" means:
(i)
dividend payments or distributions, whether in cash or kind;
(ii)
repurchasing of shares or undertaking other similar transactions (including, but not limited to total return swaps related to shares in the Issuer or transactions with a
similar effect); or
(iii)
repayment of any loans to its (or the Issuer's) shareholders that are subordinated in right of payment to the Bonds.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
|
“Finance Documents” means:
a)
the Bond Terms;
b)
the Trustee's fee agreement; and
c)
any other document the Issuer and the Trustee designate as a Finance Document.
“Financial Indebtedness” means any indebtedness for or in respect of:
a)
moneys borrowed (and debit balances at banks or other financial institutions);
b)
any amount raised by acceptance under any acceptance credit facility or dematerialized equivalent;
c)
any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument, including the Bonds;
d)
the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with GAAP, be treated as finance or capital lease (meaning that the
lease is capitalized as an asset and booked as a corresponding liability in the balance sheet);
e)
receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis provided that the requirements for de-recognition under GAAP
are met));
f)
any derivative transaction entered into and, when calculating the value of any derivative 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 derivative transaction, that amount shall be taken into account);
g)
any counter-indemnity obligation in respect of a guarantee, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution
in respect of an underlying liability of a person which is not a Group Company which liability would fall within one of the other paragraphs of this definition;
h)
any amount raised by the issue of redeemable shares which are redeemable (other than at the option of the Issuer) before the Maturity Date or are otherwise classified as
borrowings under GAAP;
i)
any amount of any liability under an advance or deferred purchase agreement, if (a) the primary reason behind entering into the agreement is to raise finance or (b) the
agreement is in respect of the supply of assets or services and payment is due more than 120 calendar days after the date of supply;
j)
any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing or otherwise being classified
as a borrowing under GAAP; and
k)
without double counting, the amount of any liability in respect of any guarantee for any of the items referred to in paragraphs a) to j) above.
“Financial Reports” means the Annual Financial Statements and the Interim Accounts.
“GAAP” means generally accepted accounting principles in the United States.
“Interim Accounts” means the unaudited consolidated quarterly financial statements of the Issuer for any quarter ending on 31 March, 30
June or 30 September, prepared in accordance with GAAP and including a profit and loss account, balance sheet, cash flow statement and management commentary or report from the board of directors in the form in which
|
the Issuer is required to file them with the SEC pursuant to Section 13 or 15(d) of the Exchange Act.
“Liquidity” means, at any date, the aggregate amount of Cash and Cash Equivalents of the Group in each case reported in accordance
with GAAP.
“Net Borrowings” means Total Financial Indebtedness less Cash and Cash Equivalents.
“Permitted Financial Indebtedness” means:
(i)
this Bond Issue (including any Tap Issue);
(ii)
the Existing Notes;
(iii)
any unsecured bonds issued by the Issuer with (i) no amortization and with maturity after the Maturity Date, (ii) terms not materially more favourable than the
Bonds, and (iii) without any Financial Support from any other Group Company;
(iv)
the Senior Bank Facilities;
(v)
future senior secured or unsecured Financial Indebtedness provided by commercial banks, Export Credit Agencies or other financial institutions of similar nature
incurred by the Issuer or any Group Company on marketable terms and conditions with the purpose of financing the acquisition of new vessels or assets (including newbuildings and/or second-hand vessels) (or acquisition of shares in
entities owning one or more newbuildings or second-hand vessels or assets);
(vi)
future senior secured bonds, notes or similar debt instruments issued by the Issuer or any Group Company on marketable terms and conditions with first priority
security in vessels (newbuildings and/or second-hand vessels);
(vii)
any Financial Indebtedness incurred by any Group Company in the ordinary course of business for working capital purposes and as part of the daily operations of
such Group Company;
(viii)
existing and future bid-, payment- and performance bonds, guarantees and letters of credit incurred by any Group Company in the ordinary course of business;
(ix)
obligations incurred by any Group Company under any interest rate and currency hedging agreements relating to any Permitted Financial Indebtedness;
(x)
any unsecured intra-group loans granted by any Group Company to another Group Company provided that intra-group loans to the Issuer shall be subordinated to the
Bonds;
(xi)
any unsecured Subordinated Loans to the Issuer;
(xii)
any intra-group accounting balances relating to the provision of services between the Issuer and other Group Companies;
(xiii)
any Financial Indebtedness incurred in the ordinary course of business for an amount of up to USD 20 million; and
(xiv)
any refinancing, extension, amendment or replacement of any of (ii)-(xiii) above from time to time.
“Permitted Security” means any Security in respect of Permitted Financial Indebtedness referred to in paragraph (iv), (v), (vi),
(vii), (viii), (ix), and (xiii) above and any refinancing, extension, amendment or replacement thereof from time to time.
“Preferred Share Distribution" means a distribution under a class of preferred share capital issued by the Issuer, provided that
the conditions in "Distribution Restrictions" sub-paragraphs (i) to (iv) are met
“Quarter Date” means each 31 March, 30 June, 30 September and 31 December.
“Remaining Cash Position” means the sum of restricted cash and Cash and Cash Equivalents.
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“Remaining Cash Requirement” means USD 500 000 per vessel plus USD 45 million.
“Senior Bank Facilities” means the following existing Financial Indebtedness:
(i)
the loan agreement dated 22 October 2009 in respect of "Houston";
(ii)
the loan agreement dated 2 October 2010 in respect of "Los Angeles" and "Philadelphia";
(iii)
the loan agreement dated 13 September 2011 in respect of "Arethusa";
(iv)
the loan agreement dated 24 May 2013 in respect of "Crystalia" and "Atalandi";
(v)
the loan agreement dated 9 January 2014 in respect of "Melite" and "Artemis";
(vi)
the loan agreement dated 18 December 2014 in respect of "G. P. Zafirakis" and "P. S. Palios";
(vii)
the loan agreement dated 17 March 2015 for the purpose of adding additional vessels and refinancing previous loan agreements in respect of "Leto", "Melia",
"Amphitrite" and "Polymnia";
(viii)
the loan agreement dated 26 March 2015 in respect of "New York", "Myrto" and "Maia";
(ix)
the loan agreement dated 29 April 2015 in respect of "Santa Barbara";
(x)
the loan agreement dated 13 July 2018 with BNP Paribas;
(xi)
the loan agreement dated 30 September 2015 in respect of "New Orleans" and "Medusa";
(xii)
the loan agreement dated 7 January 2016 in respect of "San Francisco" and "Newport News";
(xiii)
the loan agreement dated 29 March 2016 in respect of "Selina" and "Ismene"; and
(xiv)
the loan agreement dated 10 May 2016 in respect of "Maera".
“Subsidiary” means a company over which another company has Decisive Influence.
“Subordinated Loans” means debt financing provided to the Issuer that is;
(a)
subordinated in right of payment to the Bonds;
(b)
does not mature or require any amortisation prior to the date on which all amounts under the Bond Terms and any other Finance Documents have been paid in full; and
(c)
does not provide for its acceleration or confer any right to declare any event of default prior to the date on which all amounts under the Bond Terms and any other
Finance
Documents have been paid in full. For the avoidance of doubt, payment of cash interest of any such loans is permitted only as long as no Event of Default has occurred and is continuing and subject to the Distribution Restrictions set out above.
“Tangible Net Worth” means the consolidated total shareholders’ equity (including retained earnings) of the Group, less goodwill
and other intangible items (other than favorable charter agreements recorded in connection with purchase accounting under GAAP and, for the avoidance of doubt, vessel acquisition or construction agreements).
“Total Assets” means the amount of the total assets of the Issuer determined on a consolidated basis in accordance with GAAP and
as shown in the balance sheet in the Issuer’s latest Financial Report.
“Total Financial Indebtedness” means the amount of long-term Financial Indebtedness (including finance leases, bank loans and
other long-term
|
debt) and short-term Financial Indebtedness of the Issuer, both determined on a consolidated basis in accordance with GAAP and as shown
in the balance sheet in the Issuer’s latest Financial Report.
|
|
Material Adverse Effect:
|
Means a material adverse effect on: (a) the Issuer’s ability to perform and comply with its obligations under the Bond Terms; or (b) the
validity or enforceability of the Bond Terms.
|
Change of Control Event:
|
Means if any person or group of persons acting in concert, gains Decisive Influence over the Issuer.
|
Put Option:
|
Upon the occurrence of a Change of Control Event, each Bondholder will have a right (a “Put Option”) to require that the Issuer purchases
all or some of the Bonds held by that Bondholder at a price equal to 101% of the nominal value during a period of 30 calendar days following the notice of a Change of Control Event. The Put Option repayment date will be the fifth
Business Day after the end of the 30 calendar days exercise period. The settlement of the Put Option will be based on each Bondholders holding of Bonds at that day.
|
Clean-up Call:
|
If Bonds representing more than 90% of the outstanding Bonds have been repurchased in relation to a Change of Control Event (Put Option),
the Issuer is entitled to repurchase all the remaining outstanding Bonds at a price of 101% of nominal value (plus accrued interest) by notifying the remaining Bondholders of its intention to do so no later than 20 calendar days after
the settlement date for the Put Option. Such prepayment may occur at the earliest on the 15th calendar day following the date of such notice.
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Issuer’s ownership of Bonds:
|
The Issuer has the right to acquire and own the Bonds. Such Bonds may at the Issuer's discretion be retained or sold (but not cancelled).
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Limitation of rights of action
|
No Bondholder is entitled to take any enforcement action, instigate any insolvency procedures, or take other action against the Issuer or
any other party in relation to any of the liabilities of the Issuer or any other party under or in connection with the Finance Documents, other than through the Bond Trustee and in accordance with these Bond Terms, provided, however,
that the Bondholders shall not be restricted from exercising any of their individual rights derived from these Bond Terms, including the right to exercise the Put Option.
Each Bondholder shall immediately upon request by the Bond Trustee provide the Bond Trustee with any such documents, including a written
power of attorney (in form and substance satisfactory to the Bond Trustee), as the Bond Trustee deems necessary for the purpose of exercising its rights and/or carrying out its duties under the Finance Documents. The Bond Trustee is
under no obligation to represent a Bondholder which does not comply with such request.
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Bondholders’ rights
|
If a beneficial owner of a Bond not being registered as a Bondholder wishes to exercise any rights under the Finance Documents, it must
obtain proof of ownership of the Bonds, acceptable to the Bond Trustee.
A Bondholder (whether registered as such or proven to the Bond Trustee’s satisfaction to be the beneficial owner of the Bond as set out in
paragraph (a) above) may issue one or more powers of attorney to third parties to represent it in relation to some or all of the Bonds held or beneficially owned by such Bondholder. The Bond Trustee shall only have to examine the face
of a power of attorney or similar evidence of authorisation that has been provided to it pursuant to this Clause 3.3 (Bondholders’ rights) and may assume that it is in full force and effect, unless otherwise is apparent from its face or
the Bond Trustee has actual knowledge to the
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contrary.
|
|
Event of Default:
|
The Bond Terms shall include standard event of default provisions for the Issuer and the Group Companies related to, inter alia,
non-payment, breach of other obligations, misrepresentation, cross default, insolvency and insolvency proceedings, creditor’s process, impossibility or illegality, unlawfulness and Material Adverse Effect, with applicable remedy
provisions and exceptions, including that insolvency, insolvency proceedings and creditor’s process with respect to the other Group Companies than the Issuer shall be subject to Material Adverse Effect qualifications. The cross default
provisions shall only apply to any single Financial Indebtedness in excess of USD 20,000,000 (or equivalent thereof in any other currency), and cross default events to include items (i)-(iv) in the standard Nordic Trustee Bond Terms for
any Group Company (including the threshold amounts referred to above).
|
Limitation of claims:
|
All claims under the Bond Agreement, attached hereto as Appendix 1, and the other Finance Documents as defined in Clause 1.1 of the Bond
agreement, for payment, including interest and principal, will be subject to the legislation regarding time-bar provisions of the Norwegian Limitation Act of 18 May 1979 No. 18; pt. 3 years for interest payments and 10 years for
principal.
|
Conditions precedent for disbursement to the Issuer
|
|
Payment of the net proceeds from the issuance of the Bonds to the Issuer shall be conditional on the Bond Trustee having received in due
time (as determined by the Bond Trustee) prior to the Issue Date each of the following documents, in form and substance satisfactory to the Bond Trustee:
(i)
these Bond Terms duly executed by all parties hereto;
(ii)
certified copies of all necessary corporate resolutions of the Issuer to issue the Bonds and execute the Finance Documents to which it is a party;
(iii)
a certified copy of a power of attorney (unless included in the corporate resolutions) from the Issuer to relevant individuals for their execution of the Finance Documents
to which it is a party, or extracts from the relevant register or similar documentation evidencing such individuals’ authorisation to execute such Finance Documents on behalf of the Issuer;
(iv)
certified copies of the Issuer's articles of association and of a full extract from the relevant company register in respect of the Issuer evidencing that the Issuer is
validly existing;
(v)
confirmation from the Issuer that no potential or actual Event of Default has occurred or is likely to occur as a result of the issuance of the Bonds;
(vi)
copies of the Issuer’s latest Financial Reports (if any);
(vii)
confirmation that the applicable prospectus exemption requirements (ref the EU prospectus directive (2003/71 EC)) concerning the issuance of the Bonds have been fulfilled;
(viii)
copies of any necessary governmental approval, consent or waiver (as the case may be) required at such time to issue the Bonds;
(ix)
confirmation that the Bonds are registered in the CSD;
(x)
copies of any written documentation used in marketing the Bonds or made public by the Issuer or any Manager in connection with the issuance of the Bonds;
(xi)
the Bond Trustee Fee Agreement duly executed by the parties thereto; and
(xii)
legal opinions or other statements as may be required by the Bond Trustee (including in respect of corporate matters relating to the Issuer and the legality, validity and
enforceability of these
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Bond Terms and the Finance Documents).
The Bond Trustee, acting in its reasonable discretion, may, regarding this Clause 6.1 (Conditions precedent for disbursement to
the Issuer), waive the requirements for documentation, or decide in its discretion that delivery of certain documents shall be made subject to an agreed closing procedure between the Bond Trustee and the Issuer
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|
Joint Lead Managers:
|
Fearnley Securities AS, P.O. Box 1158 Sentrum, NO-0107, Oslo, Norway; and
Nordea Bank Abp , filial i Norge, P.O. Box 1166 Sentrum, NO-0107 Oslo, Norway.
|
Trustee:
|
Nordic Trustee AS, Postboks 1470 Vika, NO-0116 Oslo, Norway
|
Registration:
|
The Norwegian Central Securities Depository (the “CSD”). Principal and interest accrued will be credited the bondholders through the CSD.
|
Paying Agent:
|
Nordea Bank Abp, filial i Norge, P.O. Box 1166 Sentrum, NO-0107 Oslo, Norway.
|
Listing of the Bonds:
|
An application will be made for the Bonds to be listed on Oslo Stock Exchange.
|
Market making:
|
No market-maker agreement has been made for this Bond Issue.
|
Tax gross up:
|
The Issuer shall pay any stamp duty and other public fees accruing in connection with issuance of the Bonds or the Security Documents, but
not in respect of trading of the Bonds in the secondary market (except to the extent required by applicable laws), and the Issuer shall deduct before payment to the Bondholders at source any applicable withholding tax payable pursuant
to law, subject to standard gross-up and gross-up call provisions.
|
Governing law:
|
This term sheet and the Bond Terms shall be governed by Norwegian law, venue to be Oslo district court (No.: "Oslo tingrett").
|
Bond Terms:
|
The standard Nordic Bond Terms for corporate and high yield bonds will regulate the rights and obligations with respect to the Bonds. In
the event of any discrepancy between this term sheet and the final Bond Terms, the provisions of the Bond Terms shall prevail.
By filing an application to subscribe for Bonds, each investor accepts to become a Bondholder and to be bound by the provisions of the Bond
Terms. Further, by filing such application, each investor accepts that certain adjustments to the structure and terms described in this term sheet may occur in the final Bond Terms.
The Bond Terms shall include provisions on the Bond Trustee’s right to represent the Bondholders, including a “no action” clause, meaning
that no individual Bondholder may take any legal action against the Issuer individually (as further described in the Bond Terms). The Bond Terms will further contain provisions regulating the duties of the Bond Trustee, procedures for
Bondholders’ Meetings/Written Resolutions and applicable quorum and majority requirements for Bondholders’ consent, whereas a sufficient majority of Bondholders may materially amend the provision of the Bond Terms or discharge the Bonds
in part or in full without the consent of all Bondholders, as well as other provisions customary for a bond offering as described herein.
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Terms of subscription:
|
Any subscriber of the Bonds specifically authorises the Bond Trustee to
|
execute and deliver the Bond Terms on behalf of the prospective Bondholder, who will execute and deliver relevant application forms prior
to receiving Bond allotments. On this basis, the Issuer and the Bond Trustee will execute and deliver the Bond Terms and the latter’s execution and delivery is on behalf of all of the subscribers, such that they thereby will become
bound by the Bond Terms. The Bond Terms specify that by virtue of being registered as a Bondholder (directly or indirectly) with the CSD, the Bondholders are bound by the terms of the Bond Terms and any other Finance Document, without
any further action required to be taken or formalities to be complied with.
The Bond Terms shall be made available to the general public for inspection purposes and may, until redemption in full of the Bonds, be
obtained on request to the Bond Trustee or the Issuer.
|
|
Subscription Restrictions:
|
General
No action has been taken or will be taken to permit the distribution of any of the Bond Issue or any other material related to the Bonds in
any jurisdiction where action would be required for such purposes. The offering of Bonds, the distribution of any of this Term Sheet or any other material related to the Bond Issue, the application for or purchase of Bonds, or the entry
into of an agreement to purchase Bonds, may be restricted by law in certain jurisdictions, and persons into whose possession such documents or offer come must inform themselves about and observe any such restrictions. None of the Issuer
or the Joint Lead Managers, or any of their representatives, shall have any responsibility for any violations of such restrictions.
European Economic Area
This Term Sheet or any other material related to the Bonds does not constitute or form part of a prospectus within the meaning of the EU
Prospectus Directive, as implemented in any member state of the European Economic Area (the "EEA") (each, a "Relevant Member State"). The expression "EU Prospectus Directive" means Directive 2003/71/EC (and amendments thereto, including
the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in each Relevant Member State and the expression "2010 PD Amending Directive" means Directive
2010/73/EU. This Term Sheet or any other material related to the Bonds has therefore not been, and will not be, reviewed by or registered with the Norwegian Financial Supervisory Authority or any other regulator or public authority.
Accordingly, the Bonds will only be offered or sold within the EEA in reliance of applicable exemptions from preparing a prospectus
pursuant to the EU Prospectus Directive.
United States
The Bonds will be offered or sold to a “U.S. Person” (within the meaning of Regulation S under the U.S. Securities Act of 1933, as amended
(the “U.S. Securities Act”)) or within the United States only in reliance on Rule 144A under the U.S. Securities Act to Qualified Institutional Buyers (“QIBs”) as defined in Rule 144A under the U.S. Securities Act.
The Bonds have not and will not be registered under the U.S. Securities Act or any securities law of any state or other jurisdiction in the
United States and may not be offered or sold within the United States to, or for the account or benefit of, any U.S. Person, except pursuant to an exemption from the registration requirements of the U.S. Securities Act and appropriate
exemptions under the laws of any other jurisdiction. See further details in the Application Form. Failure to comply with these restrictions may constitute a violation of applicable securities legislation.
Nordea is not registered with the U.S. Securities and Exchange
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5 |
ADDITIONAL INFORMATION
|
6 |
APPENDIX 1: BOND AGREEMENT
|
Contents
|
|
Clause
|
Page
|
1.
|
INTERPRETATION
|
3
|
2.
|
THE BONDS
|
13
|
3.
|
THE BONDHOLDERS
|
14
|
4.
|
ADMISSION TO LISTING
|
14
|
5.
|
REGISTRATION OF THE BONDS
|
15
|
6.
|
CONDITIONS FOR DISBURSEMENT
|
15
|
7.
|
REPRESENTATIONS AND WARRANTIES
|
16
|
8.
|
PAYMENTS IN RESPECT OF THE BONDS
|
18
|
9.
|
INTEREST
|
20
|
10.
|
REDEMPTION AND REPURCHASE OF BONDS
|
21
|
11.
|
PURCHASE AND TRANSFER OF BONDS
|
22
|
12.
|
INFORMATION UNDERTAKINGS
|
23
|
13.
|
GENERAL AND FINANCIAL UNDERTAKINGS
|
24
|
14.
|
EVENTS OF DEFAULT AND ACCELERATION OF THE BONDS
|
27
|
15.
|
BONDHOLDERS’ DECISIONS
|
30
|
16.
|
THE BOND TRUSTEE
|
35
|
17.
|
AMENDMENTS AND WAIVERS
|
39
|
18.
|
MISCELLANEOUS
|
39
|
19.
|
GOVERNING LAW AND JURISDICTION
|
41
|
BOND TERMS between
|
|
ISSUER:
|
Diana Shipping Inc., a company existing under the laws of Marshall Islands with registration number 13671 and LEI-code
549300XD7FHNJ0THIV12; and
|
BOND TRUSTEE:
|
Nordic Trustee AS, a company existing under the laws of Norway with registration number
963 342 624
and LEI-code
549300XAKTM2BMKIPT85
.
|
DATED:
|
26 September 2018
|
These Bond Terms shall remain in effect for so long as any Bonds remain outstanding.
|
1. |
INTERPRETATION
|
1.1 |
Definitions
|
|
(a) |
any person which is a Subsidiary of that person;
|
|
(b) |
any person who has Decisive Influence over that person (directly or indirectly); and
|
|
(c) |
any person which is a Subsidiary of an entity who has Decisive Influence (directly or indirectly) over that person.
|
|
(a) |
cash in hand or amounts standing to the credit of any current and/or on deposit accounts with an Acceptable Bank; and
|
|
(b) |
time deposits with Acceptable Banks and certificates of deposit issued, and bills of exchange accepted, by an Accepted Bank;
|
|
(a) |
a majority of the voting rights in that other person; or
|
|
(b) |
a right to elect or remove a majority of the members of the board of directors of that other person.
|
|
(a) |
dividend payments or distributions, whether in cash or in kind;
|
|
(b) |
repurchasing of shares or undertaking other similar transactions (including, but not limited to total return swaps related to shares in the Issuer or transactions
with similar effect); or
|
|
(c) |
repayment of any loans to its (or the Issuer`s) shareholders that are subordinated in right of payment to the Bonds.
|
|
(a) |
moneys borrowed (and debit balances at banks or other financial institutions);
|
|
(b) |
any amount raised by acceptance under any acceptance credit facility or dematerialized equivalent;
|
|
(c) |
any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument, including the Bonds;
|
|
(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
(meaning that the lease is capitalized as an asset and booked as a corresponding liability in the balance sheet);
|
|
(e) |
receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis provided that the requirements for de-recognition
under GAAP are met);
|
|
(f) |
any derivative transaction entered into and, when calculating the value of any derivative 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 derivative transaction, that amount shall be taken into account);
|
|
(g) |
any counter-indemnity obligation in respect of a guarantee, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial
institution in respect of an underlying liability of a person which is not a Group Company which liability would fall within one of the other paragraphs of this definition;
|
|
(h) |
any amount raised by the issue of redeemable shares which are redeemable (other than at the option of the Issuer) before the Maturity Date or are otherwise
classified as borrowings under GAAP;
|
|
(i) |
any amount of any liability under an advance or deferred purchase agreement, if (a) the primary reason behind entering into the agreement is to raise finance or
(b) the agreement is in respect of the supply of assets or services and payment is due more than hundred and twenty (120) calendar days after the date of supply;
|
|
(j) |
any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing or otherwise being
classified as a borrowing under GAAP; and
|
|
(k) |
without double counting, the amount of any liability in respect of any guarantee for any of the items referred to in paragraphs a) to j) above.
|
|
(a) |
is unable or admits inability to pay its debts as they fall due;
|
|
(b) |
suspends making payments on any of its debts generally; or
|
|
(c) |
is otherwise considered insolvent or bankrupt within the meaning of the relevant bankruptcy legislation of the jurisdiction which can be regarded as its center of
main interest as such term is understood pursuant to Council Regulation (EC) no. 1346/2000 on insolvency proceedings (as amended).
|
|
(a) |
the ability of the Issuer to perform and comply with its obligations under these Bond Terms; or
|
|
(b) |
the validity or enforceability of these Bond Terms.
|
|
(a) |
this Bond Issue (including any Tap Issue);
|
|
(b) |
the Existing Notes;
|
|
(c) |
any unsecured bonds issued by the Issuer with (i) no amortisation and with maturity after the Maturity Date, (ii) terms not materially more favourable than the
Bonds, and (iii) without any Financial Support from any other Group Company;
|
|
(d) |
the Senior Bank Facilities;
|
|
(e) |
future senior secured or unsecured Financial Indebtedness provided by commercial banks, Export Credit Agencies or other financial institutions of similar nature
incurred by the Issuer or any Group Company on marketable terms and conditions with the purpose of financing the acquisition of new vessels or assets (including newbuildings
|
|
(f) |
future senior secured bonds, notes or similar debt instruments issued by the Issuer or any Group Company on marketable terms and conditions with first priority
security in vessels (newbuildings and/or second-hand vessels ) except for vessels forming part of the Group's existing fleet that are unencumbered as of the Issue Date;
|
|
(g) |
any Financial Indebtedness incurred by any Group Company in the ordinary course of business for working capital purposes and as part of the daily operations of
such Group Company;
|
|
(h) |
existing and future bid-, payment- and performance bonds, guarantees and letters of credit incurred by any Group Company in the ordinary course of business;
|
|
(i) |
obligations incurred by any Group Company under any interest rate and currency hedging agreements relating to any Permitted Financial Indebtedness;
|
|
(j) |
any unsecured intra-group loans granted by any Group Company to another Group Company provided that intra-group loans to the Issuer shall be subordinated to the
Bonds;
|
|
(k) |
any unsecured Subordinated Loans to the Issuer;
|
|
(l) |
any intra-group accounting balances relating to the provision of services between the Issuer and other Group Companies;
|
|
(m) |
any Financial Indebtedness incurred in the ordinary course of business for an amount of up to USD 20,000,000; and
|
|
(n) |
any refinancing, extension, amendment or replacement of any of (b)-(m) above from time to time.
|
|
(a) |
in relation to payments pursuant to these Bond Terms, the date designated as the Relevant Record Date in accordance with the rules of the CSD from time to time;
|
|
(b) |
for the purpose of casting a vote in a Bondholders’ Meeting, the date falling on the immediate preceding Business Day to the date of that Bondholders' Meeting
being held, or another date as accepted by the Bond Trustee; and
|
|
(c) |
for the purpose of casting a vote in a Written Resolution:
|
|
(i) |
the date falling three (3) Business Days after the Summons have been published; or,
|
|
(ii) |
if the requisite majority in the opinion of the Bond Trustee has been reached prior to the date set out in paragraph (i) above, on the date falling on the
immediate Business Day prior to the date on which the Bond Trustee declares that the Written Resolution has been passed with the requisite majority.
|
|
(a) |
the loan agreement dated 22 October 2009 in respect of "Houston";
|
|
(b) |
the loan agreement dated 2 October 2010 in respect of "Los Angeles" and "Philadelphia";
|
|
(c) |
the loan agreement dated 13 September 2011 in respect of "Arethusa";
|
|
(d) |
the loan agreement dated 24 May 2013 in respect of "Crystalia" and "Atalandi";
|
|
(e) |
the loan agreement dated 9 January 2014 in respect of "Melite" and "Artemis";
|
|
(f) |
the loan agreement dated 18 December 2014 in respect of "G. P. Zafirakis" and "P. S. Palios";
|
|
(g) |
the loan agreement dated 17 March 2015 for the purpose of adding additional vessels and refinancing previous loan agreements in respect of "Leto", "Melia",
"Amphitrite" and "Polymnia";
|
|
(h) |
the loan agreement dated 26 March 2015 in respect of "New York", "Myrto" and "Maia";
|
|
(i) |
the loan agreement dated 29 April 2015 in respect of "Santa Barbara";
|
|
(j) |
the loan agreement dated 13 July 2018 with BNP Paribas;
|
|
(k) |
the loan agreement dated 30 September 2015 in respect of "New Orleans" and "Medusa";
|
|
(l) |
the loan agreement dated 7 January 2016 in respect of "San Francisco" and "Newport News";
|
|
(m) |
the loan agreement dated 29 March 2016 in respect of "Selina" and "Ismene"; and
|
|
(n) |
the loan agreement dated 10 May 2016 in respect of "Maera".
|
|
(a) |
subordinated in right of payment to the Bonds;
|
|
(b) |
does not mature or require any amortisation prior to the date on which all amounts under these Bond Terms and any other Finance Documents have been paid in full;
and
|
|
(c) |
does not provide for its acceleration or confer any right to declare any event of default prior to the date on which all amounts under these Bond Terms and any
other Finance Documents have been paid in full. For the avoidance of doubt, payment of cash interest of any such loans is permitted only as long as no Event of Default has occurred and is continuing and subject to the Distribution
Restrictions set out above.
|
1.2 |
Construction
|
|
(a) |
headings are for ease of reference only;
|
|
(b) |
words denoting the singular number will include the plural and vice versa;
|
|
(c) |
references to Clauses are references to the Clauses of these Bond Terms;
|
|
(d) |
references to a time are references to Central European time unless otherwise stated;
|
|
(e) |
references to a provision of “
law
” is a reference to that provision
as amended or re-enacted, and to any regulations made by the appropriate authority pursuant to such law;
|
|
(f) |
references to a “
regulation
” includes any regulation, rule,
official directive, request or guideline by any official body;
|
|
(g) |
references to a “
person
” means any individual, corporation,
partnership, limited liability company, joint venture, association, joint-stock company, unincorporated organization, government, or any agency or political subdivision thereof or any other entity, whether or not having a separate
legal personality;
|
|
(h) |
references to Bonds being “
redeemed
” means that such Bonds are
cancelled and discharged in the CSD in a corresponding amount, and that any amounts so redeemed may not be subsequently re-issued under these Bond Terms;
|
|
(i) |
references to Bonds being “
purchased
” or “
repurchased
” by the Issuer means that such Bonds may be dealt with by the Issuer as set out in Clause 11.1 (
Issuer’s purchase of Bonds
),
|
|
(j) |
references to persons “
acting in concert
” shall be interpreted
pursuant to the relevant provisions of the Securities Trading Act; and
|
|
(k) |
an Event of Default is “
continuing
” if it has not been remedied or
waived.
|
2. |
THE BONDS
|
2.1 |
Amount, denomination and ISIN of the Bonds
|
|
(a) |
The Issuer has resolved to issue a series of Bonds in the maximum amount of USD 125,000,000 (the “
Maximum Issue Amount
”). The Bonds may be issued on different issue dates and the Initial Bond Issue will be in the amount of up to USD 100,000,000. The Issuer may, provided that the conditions set
out in Clause 6.3 (
Tap Issues
) are met, at one or more occasions issue Additional Bonds (each a “
Tap Issue
”) until the Nominal Amount of all Additional Bonds equals in aggregate the Maximum Issue Amount less the Initial Bond Issue. Each Tap Issue will be subject to
identical terms as the Bonds issued pursuant to the Initial Bond Issue in all respects as set out in these Bond Terms, except that Additional Bonds may be issued at a different price than for the Initial Bond Issue and which may be
below or above the Nominal Amount. The Bond Trustee shall prepare an addendum to these Bond Terms evidencing the terms of each Tap Issue (a “
Tap
Issue Addendum
”).
|
|
(b) |
The Bonds are denominated in US Dollars (USD), being the legal currency of the United States of America.
|
|
(c) |
The Initial Nominal Amount of each Bond is USD 50,000.
|
|
(d) |
The ISIN of the Bonds is NO0010832868. All Bonds issued under the same ISIN will have identical terms and conditions as set out in these Bond Terms.
|
2.2 |
Tenor of the Bonds
|
2.3 |
Use of proceeds
|
2.4 |
Status of the Bonds
|
2.5 |
Transaction Security
|
3. |
THE BONDHOLDERS
|
3.1 |
Bond Terms binding on all Bondholders
|
|
(a) |
By virtue of being registered as a Bondholder (directly or indirectly) with the CSD, the Bondholders are bound by these Bond Terms and any other Finance Document,
without any further action required to be taken or formalities to be complied with by the Bond Trustee, the Bondholders, the Issuer or any other party.
|
|
(b) |
The Bond Trustee is always acting with binding effect on behalf of all the Bondholders.
|
3.2 |
Limitation of rights of action
|
|
(a) |
No Bondholder is entitled to take any enforcement action, instigate any insolvency procedures, or take other action against the Issuer or any other party in
relation to any of the liabilities of the Issuer or any other party under or in connection with the Finance Documents, other than through the Bond Trustee and in accordance with these Bond Terms, provided, however, that the
Bondholders shall not be restricted from exercising any of their individual rights derived from these Bond Terms, including the right to exercise the Put Option.
|
|
(b) |
Each Bondholder shall immediately upon request by the Bond Trustee provide the Bond Trustee with any such documents, including a written power of attorney (in form
and substance satisfactory to the Bond Trustee), as the Bond Trustee deems necessary for the purpose of exercising its rights and/or carrying out its duties under the Finance Documents. The Bond Trustee is under no obligation to
represent a Bondholder which does not comply with such request.
|
3.3 |
Bondholders’ rights
|
|
(a) |
If a beneficial owner of a Bond not being registered as a Bondholder wishes to exercise any rights under the Finance Documents, it must obtain proof of ownership
of the Bonds, acceptable to the Bond Trustee.
|
|
(b) |
A Bondholder (whether registered as such or proven to the Bond Trustee’s satisfaction to be the beneficial owner of the Bond as set out in paragraph (a) above) may
issue one or more powers of attorney to third parties to represent it in relation to some or all of the Bonds held or beneficially owned by such Bondholder. The Bond Trustee shall only have to examine the face of a power of attorney
or similar evidence of authorisation that has been provided to it pursuant to this Clause 3.3 (
Bondholders’ rights
) and may assume that
it is in full force and effect, unless otherwise is apparent from its face or the Bond Trustee has actual knowledge to the contrary.
|
4. |
ADMISSION TO LISTING
|
5. |
REGISTRATION OF THE BONDS
|
5.1 |
Registration in the CSD
|
5.2 |
Obligation to ensure correct registration
|
5.3 |
Country of issuance
|
6. |
CONDITIONS FOR DISBURSEMENT
|
6.1 |
Conditions precedent for disbursement to the Issuer
|
|
(a) |
Payment of the net proceeds from the issuance of the Bonds to the Issuer shall be conditional on the Bond Trustee having received in due time (as determined by the
Bond Trustee) prior to the Issue Date each of the following documents, in form and substance satisfactory to the Bond Trustee:
|
|
(i) |
these Bond Terms duly executed by all parties hereto;
|
|
(ii) |
certified copies of all necessary corporate resolutions of the Issuer to issue the Bonds and execute the Finance Documents to which it is a party;
|
|
(iii) |
a certified copy of a power of attorney (unless included in the corporate resolutions) from the Issuer to relevant individuals for their execution of the Finance
Documents to which it is a party, or extracts from the relevant register or similar documentation evidencing such individuals’ authorisation to execute such Finance Documents on behalf of the Issuer;
|
|
(iv) |
certified copies of the Issuer's articles of association and of a full extract from the relevant company register in respect of the Issuer evidencing that the
Issuer is validly existing;
|
|
(v) |
confirmation from the Issuer that no potential or actual Event of Default has occurred or is likely to occur as a result of the issuance of the Bonds;
|
|
(vi) |
copies of the Issuer’s latest Financial Reports (if any);
|
|
(vii) |
confirmation that the applicable prospectus exemption requirements (ref the EU prospectus directive (2003/71 EC)) concerning the issuance of the Bonds have been
fulfilled;
|
|
(viii) |
copies of any necessary governmental approval, consent or waiver (as the case may be) required at such time to issue the Bonds;
|
|
(ix) |
confirmation that the Bonds are registered in the CSD;
|
|
(x) |
copies of any written documentation used in marketing the Bonds or made public by the Issuer or any Manager in connection with the issuance of the Bonds;
|
|
(xi) |
the Bond Trustee Fee Agreement duly executed by the parties thereto; and
|
|
(xii) |
legal opinions or other statements as may be required by the Bond Trustee (including in respect of corporate matters relating to the Issuer and the legality,
validity and enforceability of these Bond Terms and the Finance Documents).
|
|
(b) |
The Bond Trustee, acting in its reasonable discretion, may, regarding this Clause 6.1 (C
onditions precedent for disbursement to the Issuer
), waive the requirements for documentation, or decide in its discretion that delivery of certain documents shall be made subject to an agreed closing
procedure between the Bond Trustee and the Issuer
|
6.2 |
Distribution
|
6.3 |
Tap Issues
|
|
(a) |
the Bond Trustee has executed a Tap Issue Addendum; and
|
|
(b) |
the representations and warranties contained in Clause 7 (
Representations
and Warranties
) of these Bond Terms are true and correct in all material respects and repeated by the Issuer as at the date of issuance of such Additional Bonds.
|
7. |
REPRESENTATIONS AND WARRANTIES
|
|
(a) |
at the date of these Bond Terms;
|
|
(b) |
at the Issue Date; and
|
|
(c) |
at the date of issuance of any Additional Bonds.
|
7.1 |
Status
|
7.2 |
Power and authority
|
7.3 |
Valid, binding and enforceable obligations
|
7.4 |
Non-conflict with other obligations
|
7.5 |
No Event of Default
|
|
(a) |
No Event of Default exists or is likely to result from the making of any drawdown under these Bond Terms or the entry into, the performance of, or any transaction
contemplated by, any Finance Document.
|
|
(b) |
No other event or circumstance has occurred which constitutes (or with the expiry of any 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 (howsoever described) under any other agreement or instrument which is binding on it or any of its Subsidiaries or to which its (or any of its
Subsidiaries’) assets are subject which has or is likely to have a Material Adverse Effect.
|
7.6 |
Authorizations and consents
|
|
(a) |
to enable it to enter into, exercise its rights and comply with its obligations under this Bond Terms or any other Finance Document to which it is a party; and
|
|
(b) |
to carry on its business as presently conducted and as contemplated by these Bond Terms,
|
7.7 |
Litigation
|
7.8 |
Financial Reports
|
7.9 |
No Material Adverse Effect
|
7.10 |
No misleading information
|
7.11 |
No withholdings
|
7.12 |
Pari passu ranking
|
7.13 |
Security
|
8. |
PAYMENTS IN RESPECT OF THE BONDS
|
8.1 |
Covenant to pay
|
|
(a) |
The Issuer will unconditionally make available to or to the order of the Bond Trustee and/or the Paying Agent all amounts due on each Payment Date pursuant to the
terms of these Bond Terms at such times and to such accounts as specified by the Bond Trustee and/or the Paying Agent in advance of each Payment Date or when other payments are due and payable pursuant to these Bond Terms.
|
|
(b) |
All payments to the Bondholders in relation to the Bonds shall be made to each Bondholder registered as such in the CSD at the Relevant Record Date, by, if no
specific order is made by the Bond Trustee, crediting the relevant amount to the bank account nominated by such Bondholder in connection with its securities account in the CSD.
|
|
(c) |
Payment constituting good discharge of the Issuer’s payment obligations to the Bondholders under these Bond Terms will be deemed to have been made to each
Bondholder once the amount has been credited to the bank holding the bank account nominated by the Bondholder in connection with its securities account in the CSD. If the paying bank and the receiving bank are the same, payment shall
be deemed to have been made once the amount has been credited to the bank account nominated by the Bondholder in question.
|
|
(d) |
If a Payment Date or a date for other payments to the Bondholders pursuant to the Finance Documents falls on a day on which either of the relevant CSD settlement
system or the relevant currency settlement system for the Bonds are not open, the payment shall be made on the first following possible day on which both of the said systems are open, unless any provision to the contrary have been set
out for such payment in the relevant Finance Document.
|
8.2 |
Default interest
|
|
(a) |
Default interest will accrue on any Overdue Amount from and including the Payment Date on which it was first due to and excluding the date on which the payment is
made at the Interest Rate plus an additional three (3) per cent. per annum.
|
|
(b) |
Default interest accrued on any Overdue Amount pursuant to this Clause 8.2 (
Default interest
) will be added to the Overdue Amount on each Interest Payment Date until the Overdue Amount and default interest accrued thereon have been repaid in full.
|
8.3 |
Partial Payments
|
|
(a) |
If the Paying Agent or the Bond Trustee receives a Partial Payment, such Partial Payment shall, in respect of the Issuer’s debt under the Finance Documents be
considered made for discharge of the debt of the Issuer in the following order of priority:
|
|
(i) |
firstly, towards any outstanding fees, liabilities and expenses of the Bond Trustee;
|
|
(ii) |
secondly, towards accrued interest due but unpaid; and
|
|
(iii) |
thirdly, towards any principal amount due but unpaid.
|
|
(b) |
Notwithstanding paragraph (a) above, any Partial Payment which is distributed to the Bondholders, shall, after the above mentioned deduction of outstanding fees,
liabilities and expenses, be applied (i) firstly towards any principal amount due but unpaid and (ii) secondly, towards accrued interest due but unpaid, in the following situations;
|
|
(i) |
the Bond Trustee has served a Default Notice in accordance with Clause 14.2 (
Acceleration of the Bonds
), or
|
|
(ii) |
as a result of a resolution according to Clause 15 (
Bondholders’
decisions
).
|
8.4 |
Taxation
|
|
(a) |
The Issuer is responsible for withholding any withholding tax imposed by applicable law on any payments to be made by it in relation to the Finance Documents.
|
|
(b) |
The Issuer shall, if any tax is withheld in respect of the Bonds under the Finance Documents:
|
|
(i) |
gross up the amount of the payment due from it up to such amount which is necessary to ensure that the Bondholders or the Bond Trustee, as the case may be, receive
a net amount which is (after making the required withholding) equal to the payment which would have been received if no withholding had been required; and
|
|
(ii) |
at the request of the Bond Trustee, deliver to the Bond Trustee evidence that the required tax deduction or withholding has been made.
|
|
(b) |
Any public fees levied on the trade of Bonds in the secondary market shall be paid by the Bondholders, unless otherwise provided by law or regulation, and the
Issuer shall not be responsible for reimbursing any such fees.
|
8.5 |
Currency
|
|
(a) |
All amounts payable under the Finance Documents shall be payable in the denomination of the Bonds set out in Clause 2.1 (
Amount, denomination and ISIN of the Bonds
). If, however, the denomination differs from the currency of the bank account connected to the Bondholder’s account in the CSD,
any cash settlement may be exchanged and credited to this bank account.
|
|
(b) |
Any specific payment instructions, including foreign exchange bank account details, to be connected to the Bondholder's account in the CSD must be provided by the
relevant Bondholder to the Paying Agent (either directly or through its account manager in the CSD) within five (5) Business Days prior to a Payment Date. Depending on any currency exchange settlement agreements between each
Bondholder’s bank and the Paying Agent, and opening hours of the receiving bank, cash settlement may be delayed, and payment shall be deemed to have been made once the cash settlement has taken place, provided, however, that no
default interest or other penalty shall accrue for the account of the Issuer for such delay.
|
8.6 |
Set-off and counterclaims
|
9. |
INTEREST
|
9.1 |
Calculation of interest
|
|
(a) |
Each Outstanding Bond will accrue interest at the Interest Rate on the Nominal Amount for each Interest Period, commencing on and including the first date of the
Interest Period, and ending on but excluding the last date of the Interest Period.
|
|
(b) |
Interest will accrue on the Nominal Amount of any Additional Bond for each Interest Period starting with the Interest Period commencing on the Interest Payment
Date immediately prior to the issuance of the Additional Bonds (or, if the date of the issuance is not an Interest Payment Date and there is no Interest Payment Date prior to such date of issuance, starting with the Interest Period
commencing on the Issue Date).
|
|
(c) |
Interest shall be calculated on the basis of a 360-day year comprised of twelve months of thirty (30) days each and, in case of an incomplete month, the actual
number of days elapsed (30/360-days basis).
|
9.2 |
Payment of interest
|
10. |
REDEMPTION AND REPURCHASE OF BONDS
|
10.1 |
Redemption of Bonds
|
10.2 |
Voluntary early redemption - Call Option
|
|
(a) |
The Issuer may redeem the Outstanding Bonds (in whole or in parts) (the “
Call
Option
”) on any Business Day at any time from and including:
|
|
(i) |
the Interest Payment Date falling 3 years after the Issue Date to, but not including, the Interest Payment Date falling 4 years after the Issue Date at a price
equal to 103.8% of the Nominal Amount (plus accrued interest on the redeemed Bonds);
|
|
(ii) |
the Interest Payment Date falling 4 years after the Issue Date to, but not including, the Interest Payment Date falling 4 years and 6 months after the Issue Date
at a price equal to 101.9% of the Nominal Amount (plus accrued interest on the redeemed Bonds);
|
|
(iii) |
the Interest Payment Date falling 4 years and 6 months after the Issue Date to, but not including, the Maturity Date at a price equal to 100% of the Nominal Amount
(plus accrued interest on the redeemed Bonds).
|
|
(b) |
Any redemption of Bonds pursuant to Clause 10.2 (a) above shall be determined based upon the redemption prices applicable on the Call Option Repayment Date.
|
|
(c) |
The Call Option may be exercised by the Issuer by written notice to the Bond Trustee and the Bondholders at least ten (10), but not more than twenty (20), Business
Days prior to the proposed Call Option Repayment Date. Such notice sent by the Issuer is irrevocable and shall specify the Call Option Repayment Date.
|
|
(d) |
Any Call Option exercised in part will be used for pro rata payment to the Bondholders in accordance with the applicable regulations of the CSD.
|
10.3 |
Mandatory repurchase due to a Put Option Event
|
|
(a) |
Upon the occurrence of a Put Option Event, each Bondholder will have the right (the “
Put Option
”) to require that the Issuer purchases all or some of the Bonds held by that Bondholder at a price equal to 101 per cent. of the Nominal Amount.
|
|
(b) |
The Put Option must be exercised within thirty (30) calendar days after the Issuer has given notice to the Bond Trustee and the Bondholders that a Put Option Event
has occurred pursuant to Clause 12.3 (
Put Option Event
). Once notified, the Bondholders’ right to exercise the Put Option is irrevocable
and will not be affected by any subsequent events related to the Issuer.
|
|
(c) |
Each Bondholder may exercise its Put Option by written notice to its account manager for the CSD, who will notify the Paying Agent of the exercise of the Put
Option. The Put Option Repayment Date will be the fifth (5) Business Day after the end of the thirty (30) calendar days exercise period referred to in paragraph (b) above. However, the settlement of the Put Option will be based on
each Bondholders holding of Bonds at the Put Option Repayment Date.
|
|
(d) |
If Bonds representing more than 90 per cent. of the Outstanding Bonds have been repurchased pursuant to this Clause 10.3 (
Mandatory repurchase due to a Put Option Event
), the Issuer is entitled to repurchase all the remaining Outstanding Bonds at the price stated in paragraph (a) above (plus
accrued interest) by notifying the remaining Bondholders of its intention to do so no later than twenty (20) calendar days after the Put Option Repayment Date. Such prepayment may occur at the earliest on the fifteenth (15
th
) calendar day following the date of such notice.
|
10.4 |
Early redemption option due to a tax event
|
11. |
PURCHASE AND TRANSFER OF BONDS
|
11.1 |
Issuer's purchase of Bonds
|
11.2 |
Restrictions
|
|
(a) |
Certain purchase or selling restrictions may apply to Bondholders under applicable local laws and regulations from time to time. Neither the Issuer nor the Bond
Trustee shall be responsible to ensure compliance with such laws and regulations and each Bondholder is responsible for ensuring compliance with the relevant laws and regulations at its own cost and expense.
|
|
(b) |
A Bondholder who has purchased Bonds in breach of applicable restrictions may, notwithstanding such breach, benefit from the rights attached to the Bonds pursuant
to these Bond Terms (including, but not limited to, voting rights), provided that the Issuer shall not incur any additional liability by complying with its obligations to such Bondholder.
|
12. |
INFORMATION UNDERTAKINGS
|
12.1 |
Financial Reports
|
|
(a) |
The Issuer shall prepare Annual Financial Statements in the English language and make them available on its website (alternatively on another relevant information
platform) as soon as they become available, and not later than hundred and twenty (120) days after the end of the financial year.
|
|
(b) |
The Issuer shall prepare Interim Accounts in the English language and make them available on its website (alternatively on another relevant information platform)
as soon as they become available, and not later than sixty (60) days after the end of the relevant interim period.
|
12.2 |
Requirements as to Financial Reports
|
12.3 |
Put Option Event
|
12.4 |
Information: Miscellaneous
|
|
(a) |
promptly inform the Bond Trustee in writing of any Event of Default or any event or circumstance which the Issuer understands or could reasonably be expected to
understand may lead to an Event of Default and the steps, if any, being taken to remedy it;
|
|
(b) |
at the request of the Bond Trustee, report the balance of the Issuer’s Bonds (to the best of its knowledge, having made due and appropriate enquiries);
|
|
(c) |
send the Bond Trustee copies of any statutory notifications of the Issuer, including but not limited to in connection with mergers, de-mergers and reduction of the
Issuer’s share capital or equity;
|
|
(d) |
if the Bonds are listed on the Exchange, send a copy to the Bond Trustee of its notices to the Exchange;
|
|
(e) |
if the Issuer and/or the Bonds are rated, inform the Bond Trustee of its and/or the rating of the Bonds, and any changes to such rating;
|
|
(f) |
inform the Bond Trustee of changes in the registration of the Bonds in the CSD; and
|
|
(g) |
within a reasonable time, provide such information about the Issuer’s and the Group’s business, assets and financial condition as the Bond Trustee may reasonably
request.
|
13. |
GENERAL AND FINANCIAL UNDERTAKINGS
|
13.1 |
Authorisations
|
13.2 |
Compliance with laws
|
13.3 |
Continuation of business
|
13.4 |
Corporate status
|
13.5 |
Mergers and de-mergers
|
|
(a) |
any merger or other business combination or corporate reorganisation involving the consolidation of assets and obligations of the Issuer or any other Group Company
with any other companies or entities; or
|
|
(b) |
any de-merger or other corporate reorganisation having the same or equivalent effect as a demerger involving a split of the Issuer or any other Group Company into
two or more separate companies or entities;
|
13.6 |
Litigation
|
|
(a) |
litigations, arbitrations or administrative proceedings which have been or might be started by or against any Group Company and which, if decided adversely is
likely to have a Material Adverse Effect; and
|
|
(b) |
other events which have occurred or might occur and which is likely to have a Material Adverse Effect.
|
13.7 |
Financial Indebtedness
|
|
(a) |
Except as permitted under paragraph (b) below, the Issuer shall not, and shall procure that no other Group Company will, incur any additional Financial
Indebtedness or maintain or prolong any existing Financial Indebtedness.
|
|
(b) |
Paragraph (a) above shall not prohibit any Group Company to incur, maintain or prolong any Permitted Financial Indebtedness.
|
13.8 |
Negative pledge
|
|
(a) |
Except as permitted under paragraph (b) below, the Issuer shall not, and shall procure that no other Group Company will, create or allow to subsist, retain,
provide, prolong or renew any Security over any of its/their assets (whether present or future).
|
|
(b) |
Paragraph (a) above does not apply to Security granted to secure any of the following:
|
|
(i) |
Permitted Security;
|
|
(ii) |
any netting or set-off arrangements entered into by the Issuer or any other Group Company (as the case may be) in the ordinary course of its banking arrangements
for the purposes of netting debt and credit balances of the Issuer (if applicable); and
|
|
(iii) |
any lien arising by operation of law.
|
13.9 |
Financial support
|
|
(a) |
Except as permitted under paragraph (b) below, the Issuer shall not, and shall procure that no other Group Company shall, be a creditor in respect of any Financial
Support to or for the benefit of any third party or other Group Company.
|
|
(b) |
Paragraph (a) above does not apply to any:
|
|
(i) |
Permitted Financial Indebtedness; and
|
|
(ii) |
in the ordinary course of business.
|
13.10 |
Distribution restrictions
|
|
(a) |
an Event of Default or an event or circumstance which, with the giving of any notice or the lapse of time, would constitute an Event of Default (a "
Default
") has occurred and is continuing;
|
|
(b) |
an Event of Default or a Default would result therefrom;
|
|
(c) |
the Issuer is not in compliance with the financial covenants set out in Clause 13.16 (
Financial covenants)
;
|
|
(d) |
the making of any Distribution by the Issuer or a Subsidiary would result in the Issuer not being in compliance with the financial covenants set out in Clause
13.16 (
Financial covenants
); or
|
|
(e) |
as a result of a Distribution by the Issuer or a Subsidiary, except a Preferred Share Distribution, the Remaining Cash Position is less than the Remaining Cash
Requirement.
|
13.11 |
Subsidiary restrictions
|
|
(a) |
pay dividends or make Distributions to its shareholders;
|
|
(b) |
service any Financial Indebtedness to the Issuer;
|
|
(c) |
make any loans to the Issuer; or
|
|
(d) |
transfer any of its assets and properties to the Issuer;
|
13.12 |
Arm`s length transactions
|
13.13 |
Disposal
|
13.14 |
Listing
|
13.15 |
Insurances
|
13.16 |
Financial Covenants
|
|
(a) |
The Issuer shall comply with the following:
|
|
(i) |
Minimum Liquidity
|
|
(ii) |
Tangible Net Worth
|
|
(iii) |
Net Borrowings to Total Assets
|
|
(b) |
The Issuer undertakes to comply with the above financial covenants at all times, such compliance to be measured on each Quarter Date and certified by the Issuer by
delivery of a Compliance Certificate, setting out (in reasonably detail) computations evidencing compliance with the financial covenants, with the delivery of each Financial Report within the reporting dates set out in Clause 12.1 (
Financial Reports
). The financial covenants shall be calculated on a consolidated basis for the Group during the lifetime of the Bonds.
|
14. |
EVENTS OF DEFAULT AND ACCELERATION OF THE BONDS
|
14.1 |
Events of Default
|
|
(a) |
Non-payment
|
|
(i) |
its failure to pay is caused by administrative or technical error in payment systems or the CSD and payment is made within five (5) Business Days following the
original due date; or
|
|
(ii) |
in the discretion of the Bond Trustee, the Issuer has substantiated that it is likely that such payment will be made in full within five (5) Business Days
following the original due date.
|
|
(b) |
Breach of other obligations
|
|
(c) |
Misrepresentation
|
|
(d) |
Cross default
|
|
(i) |
any Financial Indebtedness is not paid when due nor within any applicable grace period; or
|
|
(ii) |
any Financial Indebtedness 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); or
|
|
(iii) |
any commitment for any Financial Indebtedness is cancelled or suspended by a creditor as a result of an event of default (however described), or
|
|
(iv) |
any creditor becomes entitled to declare any Financial Indebtedness due and payable prior to its specified maturity as a result of an event of default (however
described),
|
|
(e) |
Insolvency and insolvency proceedings
|
|
(i) |
is Insolvent; or
|
|
(ii) |
is object of any corporate action or any legal proceedings is taken in relation to:
|
|
(A) |
the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of
arrangement or otherwise) other than a solvent liquidation or reorganization; or
|
|
(B) |
a composition, compromise, assignment or arrangement with any creditor which may materially impair its ability to perform its obligations under these Bond Terms;
or
|
|
(C) |
the appointment of a liquidator (other than in respect of a solvent liquidation), receiver, administrative receiver, administrator, compulsory manager or other
similar officer of any of its assets; or
|
|
(D) |
enforcement of any Security over any of its or their assets having an aggregate value exceeding the threshold amount set out in paragraph 14.1 (d) (
Cross default
) above; or
|
|
(E) |
for (A) - (D) above, any analogous procedure or step is taken in any jurisdiction in respect of any such company,
|
|
(f) |
Creditor’s process
|
|
(g) |
Unlawfulness
|
|
(i) |
the ability of the Issuer to perform its obligations under these Bond Terms; or
|
|
(ii) |
the ability of the Bond Trustee to exercise any material right or power vested to it under the Finance Documents.
|
14.2 |
Acceleration of the Bonds
|
|
(a) |
declare that the Outstanding Bonds, 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
|
|
(b) |
exercise any or all of its rights, remedies, powers or discretions under the Finance Documents or take such further measures as are necessary to recover the
amounts outstanding under the Finance Documents.
|
14.3 |
Bondholders’ instructions
|
|
(a) |
the Bond Trustee receives a demand in writing from Bondholders representing a simple majority of the Voting Bonds, that an Event of Default shall be declared, and
a Bondholders' Meeting has not made a resolution to the contrary; or
|
|
(b) |
the Bondholders' Meeting, by a simple majority decision, has approved the declaration of an Event of Default.
|
14.4 |
Calculation of claim
|
|
(i) |
for any Event of Default arising out of a breach of Clause 14.1 (
Events
of Default
) paragraph (a) (
Non-payment
), the claim will be calculated at the price applicable at the date when such Event of
Default occurred; and
|
|
(ii) |
for any other Event of Default, the claim will be calculated at the price applicable at the date when the Default Notice was served by the Bond Trustee.
|
15. |
BONDHOLDERS’ DECISIONS
|
15.1 |
Authority of the Bondholders' Meeting
|
|
(a) |
A Bondholders' Meeting may, on behalf of the Bondholders, resolve to alter any of these Bond Terms, including, but not limited to, any reduction of principal or
interest and any conversion of the Bonds into other capital classes.
|
|
(b) |
The Bondholders’ Meeting cannot resolve that any overdue payment of any instalment shall be reduced unless there is a pro rata reduction of the principal that has
not fallen due, but may resolve that accrued interest (whether overdue or not) shall be reduced without a corresponding reduction of principal.
|
|
(c) |
The Bondholders' Meeting may not adopt resolutions which will give certain Bondholders an unreasonable advantage at the expense of other Bondholders.
|
|
(d) |
Subject to the power of the Bond Trustee to take certain action as set out in Clause 16.1 (
Power to represent the Bondholders
), if a resolution by, or an approval of, the
|
|
(e) |
At least 50 per cent. of the Voting Bonds must be represented at a Bondholders' Meeting for a quorum to be present.
|
|
(f) |
Resolutions will be passed by simple majority of the Voting Bonds represented at the Bondholders' Meeting, unless otherwise set out in paragraph (g) below.
|
|
(g) |
Save for any amendments or waivers which can be made without resolution pursuant to Clause 17.1 (
Procedure for amendments and waivers
) paragraph (a), section (i) and (ii), a majority of at least 2/3 of the Voting Bonds represented at the Bondholders' Meeting is required for approval of any
waiver or amendment of any provisions of these Bond Terms, including a change of Issuer and change of Bond Trustee.
|
15.2 |
Procedure for arranging a Bondholders’ Meeting
|
|
(a) |
A Bondholders' Meeting shall be convened by the Bond Trustee upon the request in writing of:
|
|
(i) |
the Issuer;
|
|
(ii) |
Bondholders representing at least 1/10 of the Voting Bonds;
|
|
(iii) |
the Exchange, if the Bonds are listed and the Exchange is entitled to do so pursuant to the general rules and regulations of the Exchange; or
|
|
(iv) |
the Bond Trustee.
|
|
(b) |
If the Bond Trustee has not convened a Bondholders' Meeting within ten (10) Business Days after having received a valid request for calling a Bondholders’ Meeting
pursuant to paragraph (a) above, then the re-questing party may itself call the Bondholders’ Meeting.
|
|
(c) |
Summons to a Bondholders' Meeting must be sent no later than ten (10) Business Days prior to the proposed date of the Bondholders' Meeting. The Summons shall be
sent to all Bondholders registered in the CSD at the time the Summons is sent from the CSD. If the Bonds are listed, the Issuer shall ensure that the Summons is published in accordance with the applicable regulations of the Exchange.
The Summons shall also be published on the website of the Bond Trustee (alternatively by press release or other relevant information platform).
|
|
(d) |
Any Summons for a Bondholders’ Meeting must clearly state the agenda for the Bondholders’ Meeting and the matters to be resolved. The Bond Trustee may include
additional agenda items to those requested by the person calling for the Bondholders’ Meeting in the Summons. If the Summons contains proposed amendments to these Bond Terms, a description of the proposed amendments must be set out in
the Summons.
|
|
(e) |
Items which have not been included in the Summons may not be put to a vote at the Bondholders' Meeting.
|
|
(f) |
By written notice to the Issuer, the Bond Trustee may prohibit the Issuer from acquiring or dispose of Bonds during the period from the date of the Summons until
the date of the Bondholders' Meeting, unless the acquisition of Bonds is made by the Issuer pursuant to Clause 10 (
Redemption and Repurchase of
Bonds
).
|
|
(g) |
A Bondholders' Meeting may be held on premises selected by the Bond Trustee, or if paragraph (b) above applies, by the person convening the Bondholders’ Meeting
(however to be held in the capital of the Relevant Jurisdiction). The Bondholders' Meeting will be opened and, unless otherwise decided by the Bondholders' Meeting, chaired by the Bond Trustee. If the Bond Trustee is not present, the
Bondholders' Meeting will be opened by a Bondholder and be chaired by a representative elected by the Bondholders' Meeting (the Bond Trustee or such other representative, the "
Chairperson
").
|
|
(h) |
Each Bondholder, the Bond Trustee and, if the Bonds are listed, representatives of the Exchange, or any person or persons acting under a power of attorney for a
Bondholder, shall have the right to attend the Bondholders' Meeting (each a “
Representative
”). The Chairperson may grant access to the
meeting to other persons not being Representatives, unless the Bondholders' Meeting decides otherwise. In addition, each Representative has the right to be accompanied by an advisor. In case of dispute or doubt with regard to whether
a person is a Representative or entitled to vote, the Chairperson will decide who may attend the Bondholders' Meeting and exercise voting rights.
|
|
(i) |
Representatives of the Issuer have the right to attend the Bondholders' Meeting. The Bondholders Meeting may resolve to exclude the Issuer’s representatives and/or
any person holding only Issuer's Bonds (or any representative of such person) from participating in the meeting at certain times, however, the Issuer’s representative and any such other person shall have the right to be present during
the voting.
|
|
(j) |
Minutes of the Bondholders' Meeting must be recorded by, or by someone acting at the instruction of, the Chairperson. The minutes must state the number of Voting
Bonds represented at the Bondholders' Meeting, the resolutions passed at the meeting, and the results of the vote on the matters to be decided at the Bondholders' Meeting. The minutes shall be signed by the Chairperson and at least
one other person. The minutes will be deposited with the Bond Trustee who shall make available a copy to the Bondholders and the Issuer upon request.
|
|
(k) |
The Bond Trustee will ensure that the Issuer, the Bondholders and the Exchange are notified of resolutions passed at the Bondholders' Meeting and that the
resolutions are published on the website of the Bond Trustee (or other relevant electronically platform or press release).
|
|
(l) |
The Issuer shall bear the costs and expenses incurred in connection with convening a Bondholders' Meeting regardless of who has convened the Bondholders’ Meeting,
including any reasonable costs and fees incurred by the Bond Trustee.
|
15.3 |
Voting rules
|
|
(a) |
Each Bondholder (or person acting for a Bondholder under a power of attorney) may cast one vote for each Voting Bond owned on the Relevant Record Date, ref. Clause
3.3 (
Bondholders’ rights
). The Chairperson may, in its sole discretion, decide on accepted evidence of ownership of Voting Bonds.
|
|
(b) |
Issuer's Bonds shall not carry any voting rights. The Chairperson shall determine any question concerning whether any Bonds will be considered Issuer's Bonds.
|
|
(c) |
For the purposes of this Clause 15 (
Bondholders’ decisions
), a
Bondholder that has a Bond registered in the name of a nominee will, in accordance with Clause 3.3 (
Bondholders’ rights
), be deemed to be
the owner of the Bond rather than the nominee. No vote may be cast by any nominee if the Bondholder has presented relevant evidence to the Bond Trustee pursuant to Clause 3.3 (
Bondholders’ rights
) stating that it is the owner of the Bonds voted for. If the Bondholder has voted directly for any of its nominee registered Bonds, the Bondholder’s votes shall take
precedence over votes submitted by the nominee for the same Bonds.
|
|
(d) |
Any of the Issuer, the Bond Trustee and any Bondholder has the right to demand a vote by ballot. In case of parity of votes, the Chairperson will have the deciding
vote.
|
15.4 |
Repeated Bondholders’ Meeting
|
|
(a) |
Even if the necessary quorum set out in paragraph (d) of Clause 15.1 (
Authority
of the Bondholders’ Meeting
) is not achieved, the Bondholders’ Meeting shall be held and voting completed for the purpose of recording the voting results in the minutes of the Bondholders’ Meeting. The Bond Trustee or the
person who convened the initial Bondholders' Meeting may, within ten (10) Business Days of that Bondholders’ Meeting, convene a repeated meeting with the same agenda as the first meeting.
|
|
(b) |
The provisions and procedures regarding Bondholders’ Meetings as set out in Clause 15.1 (
Authority of the Bondholders’ Meeting
), Clause 15.2 (
Procedure for arranging a Bondholders’ Meeting
) and
Clause 15.3 (
Voting rules
) shall apply
mutatis
mutandis
to a repeated Bondholders’ Meeting, with the exception that the quorum requirements set out in paragraph (d) of Clause 15.1 (
Authority
of the Bondholders’ Meeting
) shall not apply to a repeated Bondholders' Meeting. A Summons for a repeated Bondholders’ Meeting shall also contain the voting results obtained in the initial Bondholders’ Meeting.
|
|
(c) |
A repeated Bondholders’ Meeting may only be convened once for each original Bondholders’ Meeting. A repeated Bondholders’ Meeting may be convened pursuant to the
procedures of a Written Resolution in accordance with Clause 15.5 (
Written Resolutions
), even if the initial meeting was held pursuant to
the procedures of a Bondholders’ Meeting in accordance with Clause 15.2 (
Procedure for arranging a Bondholders’ Meeting
) and vice versa.
|
15.5 |
Written Resolutions
|
|
(a) |
Subject to these Bond Terms, anything which may be resolved by the Bondholders in a Bondholders’ Meeting pursuant to Clause 15.1 (
Authority of the Bondholders’
|
|
(b) |
The person requesting a Bondholders’ Meeting may instead request that the relevant matters are to be resolved by Written Resolution only, unless the Bond Trustee
decides otherwise.
|
|
(c) |
The Summons for the Written Resolution shall be sent to the Bondholders registered in the CSD at the time the Summons is sent from the CSD and published at the
Bond Trustee’s web site, or other relevant electronic platform or via press release.
|
|
(d) |
The provisions set out in Clause 15.1 (
Authority of the Bondholders’
Meeting
), 15.2 (
Procedure for arranging a Bondholder’s Meeting
), Clause 15.3 (
Voting Rules
) and Clause 15.4 (
Repeated Bondholders’ Meeting
) shall apply
mutatis mutandis
to a Written Resolution, except that:
|
|
(i) |
the provisions set out in paragraphs (g), (h) and (i) of Clause 15.2 (
Procedure
for arranging Bondholders Meetings
); or
|
|
(ii) |
provisions which are otherwise in conflict with the requirements of this Clause 15.5 (
Written Resolution
),
|
|
(e) |
The Summons for a Written Resolution shall include:
|
|
(i) |
instructions as to how to vote to each separate item in the Summons (including instructions as to how voting can be done electronically if relevant); and
|
|
(ii) |
the time limit within which the Bond Trustee must have received all votes necessary in order for the Written Resolution to be passed with the requisite majority
(the “
Voting Period
”), such Voting Period to be at least three (3) Business Days but not more than fifteen (15) Business Days from the
date of the Summons, provided however that the Voting Period for a Written Resolution summoned pursuant to Clause 15.4 (
Repeated Bondholders’
Meeting
) shall be at least ten (10) Business Days but not more than fifteen (15) Business Days from the date of the Summons.
|
|
(f) |
Only Bondholders of Voting Bonds registered with the CSD on the Relevant Record Date, or the beneficial owner thereof having presented relevant evidence to the
Bond Trustee pursuant to Clause 3.3 (
Bondholders’ rights
), will be counted in the Written Resolution.
|
|
(g) |
A Written Resolution is passed when the requisite majority set out in paragraph (e) or paragraph (f) of Clause 15.1 (
Authority of Bondholders’ Meeting
) has been achieved, based on the total number of Voting Bonds, even if the Voting Period has not yet
|
|
(h) |
The effective date of a Written Resolution passed prior to the expiry of the Voting Period is the date when the resolution is approved by the last Bondholder that
results in the necessary voting majority being achieved.
|
|
(i) |
If no resolution is passed prior to the expiry of the Voting Period, the number of votes shall be calculated at the close of business on the last day of the Voting
Period, and a decision will be made based on the quorum and majority requirements set out in paragraphs (d) to (f) of Clause 15.1(
Authority of
Bondholders’ Meeting
).
|
16. |
THE BOND TRUSTEE
|
16.1 |
Power to represent the Bondholders
|
|
(a) |
The Bond Trustee has power and authority to act on behalf of, and/or represent, the Bondholders in all matters, including but not limited to taking any legal or
other action, including enforcement of these Bond Terms, and the commencement of bankruptcy or other insolvency proceedings against the Issuer, or others.
|
|
(b) |
The Issuer shall promptly upon request provide the Bond Trustee with any such documents, information and other assistance (in form and substance satisfactory to
the Bond Trustee), that the Bond Trustee deems necessary for the purpose of exercising its and the Bondholders’ rights and/or carrying out its duties under the Finance Documents.
|
16.2 |
The duties and authority of the Bond Trustee
|
|
(a) |
The Bond Trustee shall represent the Bondholders in accordance with the Finance Documents, including, inter alia, by following up on the delivery of any Compliance
Certificates and such other documents which the Issuer is obliged to disclose or deliver to the Bond Trustee pursuant to the Finance Documents and, when relevant, in relation to accelerating and enforcing the Bonds on behalf of the
Bondholders.
|
|
(b) |
The Bond Trustee is not obligated to assess or monitor the financial condition of the Issuer or any other Obligor unless to the extent expressly set out in these
Bond Terms, or to take any steps to ascertain whether any Event of Default has occurred. Until it has actual knowledge to the contrary, the Bond Trustee is entitled to assume that no Event of Default has occurred. The Bond Trustee is
not responsible for the valid execution or enforceability of the Finance Documents, or for any discrepancy between the indicative terms and conditions described in any marketing material presented to the Bondholders prior to issuance
of the Bonds and the provisions of these Bond Terms.
|
|
(c) |
The Bond Trustee is entitled to take such steps that it, in its sole discretion, considers necessary or advisable to protect the rights of the Bondholders in all
matters pursuant to the terms of the Finance Documents. The Bond Trustee may submit any instructions received by it from the Bondholders to a Bondholders' Meeting before the Bond Trustee takes any action pursuant to the instruction.
|
|
(d) |
The Bond Trustee is entitled to engage external experts when carrying out its duties under the Finance Documents.
|
|
(e) |
The Bond Trustee shall hold all amounts recovered on behalf of the Bondholders on separated accounts.
|
|
(f) |
The Bond Trustee will ensure that resolutions passed at the Bondholders' Meeting are properly implemented, provided, however, that the Bond Trustee may refuse to
implement resolutions that may be in conflict with these Bond Terms, any other Finance Document, or any applicable law.
|
|
(g) |
Notwithstanding any other provision of the Finance Documents to the contrary, the Bond Trustee is not 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.
|
|
(h) |
If the cost, loss or liability which the Bond Trustee may incur (including reasonable fees payable to the Bond Trustee itself) in:
|
|
(i) |
complying with instructions of the Bondholders; or
|
|
(ii) |
taking any action at its own initiative,
|
|
(i) |
The Bond Trustee shall give a notice to the Bondholders before it ceases to perform its obligations under the Finance Documents by reason of the non-payment by the
Issuer of any fee or indemnity due to the Bond Trustee under the Finance Documents.
|
|
(j) |
The Bond Trustee may instruct the CSD to split the Bonds to a lower nominal amount in order to facilitate partial redemptions, restructuring of the Bonds or other
situations.
|
16.3 |
Equality and conflicts of interest
|
|
(a) |
The Bond Trustee shall not make decisions which will give certain Bondholders an unreasonable advantage at the expense of other Bondholders. The Bond Trustee
shall, when acting pursuant to the Finance Documents, act with regard only to the interests of the Bondholders and shall not be required to have regard to the interests or to act upon or comply with any direction or request of any
other person, other than as explicitly stated in the Finance Documents.
|
|
(b) |
The Bond Trustee may act as agent, trustee, representative and/or security agent for several bond issues relating to the Issuer notwithstanding potential conflicts
of interest. The Bond Trustee is entitled to delegate its duties to other professional parties.
|
16.4 |
Expenses, liability and indemnity
|
|
(a) |
The Bond Trustee will not be liable to the Bondholders for damage or loss caused by any action taken or omitted by it under or in connection with any Finance
Document, unless directly caused by its gross negligence or wilful misconduct. The Bond Trustee shall not be responsible for any indirect or consequential loss. Irrespective of the foregoing, the Bond Trustee shall have no liability
to the Bondholders for damage caused by the Bond Trustee acting in accordance with instructions given by the Bondholders in accordance with these Bond Terms.
|
|
(b) |
Any liability for the Bond Trustee for damage or loss is limited to the amount of the Outstanding Bonds. The Bond Trustee is not liable for the content of
information provided to the Bondholders by or on behalf of the Issuer or any other person.
|
|
(c) |
The Bond Trustee shall not be considered to have acted negligently in:
|
|
(i) |
acting in accordance with advice from or opinions of reputable external experts; or
|
|
(ii) |
taking, delaying or omitting any action if acting with reasonable care and provided the Bond Trustee considers that such action is in the interests of the
Bondholders.
|
|
(d) |
The Issuer is liable for, and will indemnify the Bond Trustee fully in respect of, all losses, expenses and liabilities incurred by the Bond Trustee as a result of
negligence by the Issuer (including its directors, management, officers, employees and agents) in connection with the performance of the Bond Trustee’s obligations under the Finance Documents, including losses incurred by the Bond
Trustee as a result of the Bond Trustee's actions based on misrepresentations made by the Issuer in connection with the issuance of the Bonds, the entering into or performance under the Finance Documents, and for as long as any
amounts are outstanding under or pursuant to the Finance Documents.
|
|
(e) |
The Issuer shall cover all costs and expenses incurred by the Bond Trustee in connection with it fulfilling its obligations under the Finance Documents. The Bond
Trustee is entitled to fees for its work and to be indemnified for costs, losses and liabilities on the terms set out in the Finance Documents. The Bond Trustee's obligations under the Finance Documents are conditioned upon the due
payment of such fees and indemnifications. The fees of the Bond Trustee will be further set out in the Bond Trustee Fee Agreement.
|
|
(f) |
The Issuer shall on demand by the Bond Trustee pay all costs incurred for external experts engaged after the occurrence of an Event of Default, or for the purpose
of investigating or considering (i) an event or circumstance which the Bond Trustee reasonably believes is or may lead to an Event of Default or (ii) a matter relating to the Issuer or any of the Finance Documents which the Bond
Trustee reasonably believes may constitute or lead to a breach of any of the Finance Documents or otherwise be detrimental to the interests of the Bondholders under the Finance Documents.
|
|
(g) |
Fees, costs and expenses payable to the Bond Trustee which are not reimbursed in any other way due to an Event of Default, the Issuer being Insolvent or similar
circumstances pertaining to any Obligors, may be covered by making an equal reduction in the proceeds to the Bondholders hereunder of any costs and expenses incurred by the Bond Trustee (or the Security Agent) in connection therewith.
The Bond Trustee may withhold funds from any escrow account (or similar arrangement) or from other funds received from the Issuer or any other person, irrespective of such funds being subject to Transaction Security, and to set-off
and cover any such costs and expenses from those funds.
|
|
(h) |
As a condition to effecting any instruction from the Bondholders (including, but not limited to, instructions set out in Clause 14.3 (
Bondholders’ instructions
) or Clause 15.2 (
Procedure for arranging a
Bondholders’ Meeting
)), the Bond Trustee may require satisfactory Security, guarantees and/or indemnities for any possible liability and anticipated costs and expenses from those Bondholders who have given that instruction
and/or who voted in favour of the decision to instruct the Bond Trustee.
|
16.5 |
Replacement of the Bond Trustee
|
|
(a) |
The Bond Trustee may be replaced according to the procedures set out in Clause 15 (
Bondholders’ Decisions
), and the Bondholders may resolve to replace the Bond Trustee without the Issuer’s approval.
|
|
(b) |
The Bond Trustee may resign by giving notice to the Issuer and the Bondholders, in which case a successor Bond Trustee shall be elected pursuant to this Clause
16.5 (
Replacement of the Bond Trustee
), initiated by the retiring Bond Trustee.
|
|
(c) |
If the Bond Trustee is Insolvent, or otherwise is permanently unable to fulfil its obligations under these Bond Terms, the Bond Trustee shall be deemed to have
resigned and a successor Bond Trustee shall be appointed in accordance with this Clause 16.5 (
Replacement of the Bond Trustee
).The Issuer
may appoint a temporary Bond Trustee until a new Bond Trustee is elected in accordance with paragraph (a) above.
|
|
(d) |
The change of Bond Trustee's shall only take effect upon execution of all necessary actions to effectively substitute the retiring Bond Trustee, and the retiring
Bond Trustee undertakes to co-operate in all reasonable manners without delay to such effect. The retiring Bond Trustee shall be discharged from any further obligation in respect of the Finance Documents from the change takes effect,
but shall remain liable under the Finance Documents in respect of any action which it took or failed to take whilst acting as Bond Trustee. The retiring Bond Trustee remains entitled to any benefits and any unpaid fees or expenses
under the Finance Documents before the change has taken place.
|
|
(e) |
Upon change of Bond Trustee the Issuer shall co-operate in all reasonable manners without delay to replace the retiring Bond Trustee with the successor Bond
Trustee and release the retiring Bond Trustee from any future obligations under the Finance Documents and any other documents.
|
17. |
AMENDMENTS AND WAIVERS
|
17.1 |
Procedure for amendments and waivers
|
|
(a) |
The Issuer and the Bond Trustee (acting on behalf of the Bondholders) may agree to amend the Finance Documents or waive a past default or anticipated failure to
comply with any provision in a Finance Document, provided that:
|
|
(i) |
such amendment or waiver is not detrimental to the rights and benefits of the Bondholders in any material respect, or is made solely for the purpose of rectifying
obvious errors and mistakes; or
|
|
(ii) |
such amendment or waiver is required by applicable law, a court ruling or a decision by a relevant authority; or
|
|
(iii) |
such amendment or waiver has been duly approved by the Bondholders in accordance with Clause 15 (
Bondholders’ Decisions
).
|
|
(b) |
Any changes to these Bond Terms necessary or appropriate in connection with the appointment of a Security Agent other than the Bond Trustee shall be documented in
an amendment to these Bond Terms, signed by the Bond Trustee (in its discretion). If so desired by the Bond Trustee, any or all of the Transaction Security Documents shall be amended, assigned or re-issued, so that the Security Agent
is the holder of the relevant Security (on behalf of the Bondholders). The costs incurred in connection with such amendment, assignment or re-issue shall be for the account of the Issuer.
|
17.2 |
Authority with respect to documentation
|
17.3 |
Notification of amendments or waivers
|
18. |
MISCELLANEOUS
|
18.1 |
Limitation of claims
|
18.2 |
Access to information
|
|
(a) |
These Bond Terms will be made available to the public and copies may be obtained from the Bond Trustee or the Issuer. The Bond Trustee will not have any obligation
to distribute any other information to the Bondholders or any other person, and the
|
|
(b) |
In order to carry out its functions and obligations under these Bond Terms, the Bond Trustee will have access to the relevant information regarding ownership of
the Bonds, as recorded and regulated with the CSD.
|
|
(c) |
The information referred to in paragraph (b) above may only be used for the purposes of carrying out their duties and exercising their rights in accordance with
the Finance Documents and shall not disclose such information to any Bondholder or third party unless necessary for such purposes.
|
18.3 |
Notices, contact information
|
|
(a) |
The Issuer’s written notifications to the Bondholders will be sent to the Bondholders via the Bond Trustee or through the CSD with a copy to the Bond Trustee and
the Exchange (if the Bonds are listed).
|
|
(b) |
Unless otherwise specifically provided, all notices or other communications under or in connection with these Bond Terms between the Bond Trustee and the Issuer
will be given or made in writing, by letter, e-mail or fax. Any such notice or communication will be deemed to be given or made as follows:
|
|
(i) |
if by letter, when delivered at the address of the relevant party;
|
|
(ii) |
if by e-mail, when received; and
|
|
(iii) |
if by fax, when received.
|
|
(c) |
The Issuer and the Bond Trustee shall each ensure that the other party is kept informed of changes in postal address, e-mail address, telephone and fax numbers and
contact persons.
|
|
(d) |
When determining deadlines set out in these Bond Terms, the following will apply (unless otherwise stated):
|
|
(i) |
if the deadline is set out in days, the first day of the relevant period will not be included and the last day of the relevant period will be included;
|
|
(ii) |
if the deadline is set out in weeks, months or years, the deadline will end on the day in the last week or the last month which, according to its name or number,
corresponds to the first day the deadline is in force. If such day is not a part of an actual month, the deadline will be the last day of such month; and
|
|
(iii) |
if a deadline ends on a day which is not a Business Day, the deadline is postponed to the next Business Day.
|
18.4 |
Defeasance
|
|
(a) |
Subject to paragraph (b) below and provided that:
|
|
(i) |
an amount sufficient for the payment of principal and interest on the Outstanding Bonds to the Maturity Date (including, to the extent applicable, any premium
payable upon exercise of the Call Option), and always subject to paragraph (c) below (the “
Defeasance Amount
”) is credited by the Issuer
to an account in a financial institution acceptable to the Bond Trustee (the “
Defeasance Account
”);
|
|
(ii) |
the Defeasance Account is irrevocably pledged and blocked in favour of the Bond Trustee on such terms as the Bond Trustee shall request (the “
Defeasance Pledge”
); and
|
|
(iii) |
the Bond Trustee has received such legal opinions and statements reasonably required by it, including (but not necessarily limited to) with respect to the validity
and enforceability of the Defeasance Pledge, then the Issuer will be relieved from its obligations under Clause 12.2 (
Requirements as to
Financial Reports
) paragraph (a), Clause 12.3 (
Put Option Event
), Clause 12.4 (
Information: Miscellaneous
) and Clause 13 (
General and financial undertakings
);
|
|
(b) |
The Bond Trustee shall be authorised to apply any amount credited to the Defeasance Account towards any amount payable by the Issuer under any Finance Document on
the due date for the relevant payment until all obligations of the Issuer and all amounts outstanding under the Finance Documents are repaid and discharged in full.
|
|
(c) |
The Bond Trustee may, if the Defeasance Amount cannot be finally and conclusively determined, decide the amount to be deposited to the Defeasance Account in its
discretion, applying such buffer amount as it deems required.
|
19. |
GOVERNING LAW AND JURISDICTION
|
19.1 |
Governing law
|
19.2 |
Main jurisdiction
|
19.3 |
Alternative jurisdiction
|
|
(a) |
to commence proceedings against the Issuer or any of its assets in any court in any jurisdiction; and
|
|
(b) |
to commence such proceedings, including enforcement proceedings, in any competent jurisdiction concurrently.
|
19.4 |
Service of process
|
|
(a) |
Without prejudice to any other mode of service allowed under any relevant law, the Issuer:
|
|
(i) |
irrevocably appoints Advokatfirmaet Wiersholm AS as its agent for service of process in relation to any proceedings in connection with these Bond Terms; and
|
|
(ii) |
agrees that failure by an agent for service of process to notify the Issuer of the process will not invalidate the proceedings concerned.
|
|
(b) |
If any person appointed as an agent for service of process is unable for any reason to act as agent for service of process, the Issuer must immediately (and in any
event within ten (10) Business Days of such event taking place) appoint another agent on terms acceptable to the Bond Trustee. Failing this, the Bond Trustee may appoint another agent for this purpose.
|
Th
e Issuer:
DIANA SHIPPING INC.
/s/
Andreas Nikolaos Michalopoulos /s/
Ioannis Zafirakis
…………………………………………............................
By: Andreas Nikolaos Michalopoulos
and Ioannis Zafirakis
Position: Director, Chief Financial Officer & Treasurer
and Director, Chief Strategy Officer & Secretary
|
As Bond Trustee :
NORDIC TRUSTEE AS
………………………………………….
By:
Position:
|
The Issuer:
DIANA SHIPPING INC.
………………………………………….
By:
Position:
|
As Bond Trustee :
NORDIC TRUSTEE AS
/s/
Joegen Andersen
………………………………………….
By: Joegen Andersen
Position:
|
1
|
RISK FACTORS
|
4
|
2
|
RESPONSIBILITY STATEMENT
|
7
|
3
|
THIRD PARTY INFORMATION
|
8
|
4
|
PRESENTATION OF THE GROUP
|
9
|
5
|
BOARD OF DIRECTORS AND SENIOR MANAGEMENT
|
23
|
6
|
FINANCIAL INFORMATION
|
28
|
7
|
LEAD MANAGERS’ DISCLAIMER
|
40
|
8
|
DEFINITIONS AND GLOSSARY
|
41
|
APPENDIX A – ARTICLES OF INCORPORATION
|
42
|
|
APPENDIX B – FINANCIAL STATEMENTS
|
51
|
· |
Charter hire rates for dry bulk carriers may remain at low levels or decrease in the future, which may adversely affect our earnings.
|
· |
The dry bulk carrier charter market remains significantly below its high in 2008, which has had and may continue to have an adverse effect on our
revenues, earnings and profitability, and may affect our ability to comply with our loan covenants.
|
· |
If economic conditions throughout the world decline, in particular in the EU, in China and the rest of the Asia-Pacific region, it could negatively
affect our earnings, financial condition and cash flows and may further adversely affect the market price of our common shares.
|
· |
A decrease in the level of China’s export of goods or an increase in trade protectionism could have a material adverse impact on our charterers’
business and, in turn, could cause a material adverse impact on our earnings, financial condition and cash flows.
|
· |
A decline in the state of global financial markets and economic conditions may adversely impact our ability to obtain additional financing or
refinance our existing loan and credit facilities on acceptable terms which may hinder or prevent us from expanding our business.
|
· |
An over-supply of dry bulk carrier capacity may prolong or further depress the current low charter rates and, in turn, adversely affect our
profitability.
|
· |
Risks associated with operating ocean-going vessels could affect our business and reputation, which could adversely affect our revenues and stock
price.
|
· |
World events could affect our earnings and financial condition.
|
· |
Acts of piracy on ocean-going vessels could adversely affect our business.
|
· |
Our operating results are subject to seasonal fluctuations, which could affect our operating results.
|
· |
An increase in the price of fuel, or bunkers, may adversely affect profits.
|
· |
We are subject to complex laws and regulations, including environmental regulations that can adversely affect the cost, manner or feasibility of
doing business.
|
· |
Increased inspection procedures, tighter import and export controls and new security regulations could increase costs and disrupt our business.
|
· |
The operation of dry bulk carriers has certain unique operational risks which could affect our earnings and cash flow.
|
· |
Our vessels may call on ports located in countries that are subject to sanctions and embargoes imposed by the U.S. or other governments, which could
adversely affect our reputation and the market for our common stock.
|
· |
Maritime claimants could arrest or attach one or more of our vessels, which could interrupt our cash flows.
|
· |
We conduct business in China, where the legal system is not fully developed and has inherent uncertainties that could limit the legal protections
available to us.
|
· |
Governments could requisition our vessels during a period of war or emergency, resulting in a loss of earnings.
|
· |
Failure to comply with the U.S. Foreign Corrupt Practices Act could result in fines, criminal penalties and an adverse effect on our business.
|
· |
Changing laws and evolving reporting requirements could have an adverse effect on our business.
|
· |
The market values of our vessels have declined in recent years and may further decline, which could limit the amount of funds that we can borrow and
could trigger breaches of certain financial covenants contained in our loan facilities, which could adversely affect our operating results, and we may incur a loss if we sell vessels following a decline in their market values.
|
· |
We charter some of our vessels on short-term time charters in a volatile shipping industry and a decline in charter hire rates could affect our
results of operations and our ability to pay dividends.
|
· |
Rising crew costs could adversely affect our results of operations.
|
· |
Our involvement with Diana Containerships Inc. may expose us to risks which may adversely affect our financial condition.
|
· |
Our investment in Diana Wilhelmsen Management Limited may expose us to additional risks.
|
· |
The effects of the recent Greek crisis could adversely affect the operations of our fleet manager, which has offices in Greece.
|
· |
A cyber-attack could materially disrupt our business.
|
· |
The Public Company Accounting Oversight Board inspection of our independent accounting firm, could lead to findings in our auditors’ reports and
challenge the accuracy of our published audited consolidated financial statements.
|
· |
Our earnings may be adversely affected if we are not able to take advantage of favorable charter rates.
|
· |
Investment in derivative instruments such as forward freight agreements could result in losses.
|
· |
We may have difficulty effectively managing any further growth, which may adversely affect our earnings.
|
· |
We cannot assure you that we will be able to borrow amounts under our loan facilities and restrictive covenants in our loan facilities impose
financial and other restrictions on us.
|
· |
We cannot assure you that we will be able to refinance indebtedness incurred under our loan facilities.
|
· |
Purchasing and operating secondhand vessels may result in increased operating costs and reduced operating days, which may adversely affect our
earnings.
|
· |
We are subject to certain risks with respect to our counterparties on contracts, and failure of such counterparties to meet their obligations could
cause us to suffer losses or otherwise adversely affect our business.
|
· |
In the highly competitive international shipping industry, we may not be able to compete for charters with new entrants or established companies
with greater resources, and as a result, we may be unable to employ our vessels profitably.
|
· |
We may be unable to attract and retain key management personnel and other employees in the shipping industry, which may negatively impact the
effectiveness of our management and results of operations.
|
· |
The fiduciary duties of our officers and directors may conflict with those of the officers and director of Diana Containerships.
|
· |
We may not have adequate insurance to compensate us if we lose our vessels or to compensate third parties.
|
· |
Our vessels may suffer damage and we may face unexpected drydocking costs, which could adversely affect our cash flow and financial condition.
|
· |
The aging of our fleet may result in increased operating costs in the future, which could adversely affect our earnings.
|
· |
We are exposed to U.S. dollar and foreign currency fluctuations and devaluations that could harm our reported revenue and results of operations.
|
· |
Volatility in the London Interbank Offered Rate, could affect our profitability, earnings and cash flow.
|
· |
We depend upon a few significant customers for a large part of our revenues and the loss of one or more of these customers could adversely affect
our financial performance.
|
· |
We are a holding company, and we depend on the ability of our subsidiaries to distribute funds to us in order to satisfy our financial obligations.
|
· |
Because we are organized under the laws of the Marshall Islands, it may be difficult to serve us with legal process or enforce judgments against us,
our directors or our management.
|
· |
The international nature of our operations may make the outcome of any bankruptcy proceedings difficult to predict.
|
· |
If we expand our business further, we may need to improve our operating and financial systems and will need to recruit suitable employees and crew
for our vessels.
|
· |
We may have to pay tax on U.S. source income, which would reduce our earnings.
|
· |
U.S. federal tax authorities could treat us as a “passive foreign investment company”, which could have adverse U.S. federal income tax consequences
to U.S. shareholders.
|
2 |
RESPONSIBILITY STATEMENT
|
3 |
THIRD PARTY INFORMATION
|
4 |
PRESENTATION OF THE GROUP
|
4.1 |
Overview
|
· |
We own a modern, high quality fleet of dry bulk carriers.
|
· |
Our fleet includes groups of sister ships, providing operational and scheduling flexibility, as well as cost efficiencies.
|
· |
We have an experienced management team.
|
· |
We benefit from the experience and reputation of Diana Shipping Services S.A. and the relationship with Wilhelmsen Ship Management through the Diana
Wilhelmsen Management Limited joint venture.
|
· |
We benefit from strong relationships with members of the shipping and financial industries.
|
· |
We have a strong balance sheet and a low level of indebtedness.
|
Vessel
|
Sister Ships*
|
Gross Rate (USD Per Day)
|
Com**
|
Charterers
|
Delivery Date to Charterers***
|
Redelivery Date to Owners****
|
Notes
|
|||||||
BUILT DWT
|
||||||||||||||
22 Panamax Bulk Carriers
|
||||||||||||||
1
|
DANAE
|
A
|
$10,000
|
5.00%
|
Phaethon International Company AG
|
22-Dec-17
|
22-Jan-19 - 7-May-19
|
|||||||
2001 75,106
|
||||||||||||||
2
|
DIONE
|
A
|
$10,350
|
5.00%
|
Ausca Shipping Limited, Hong Kong
|
23-Jan-18
|
23-Mar-19 - 8-Jul-19
|
|||||||
2001 75,172
|
||||||||||||||
3
|
NIREFS
|
A
|
$9,400
|
5.00%
|
Jaldhi Overseas Pte. Ltd., Singapore
|
5-May-17
|
11-Aug-18
|
|||||||
$10,750
|
3.75%
|
Hudson Shipping Lines Incorporated
|
11-Aug-18
|
11-Jul-19 - 11-Oct-19
|
||||||||||
2001 75,311
|
||||||||||||||
4
|
ALCYON
|
A
|
$8,800
|
5.00%
|
Hudson Shipping Lines Incorporated
|
20-Jul-17
|
29-Nov-18 - 18-Dec-18
|
1,2,3
|
||||||
2001 75,247
|
||||||||||||||
5
|
TRITON
|
A
|
$6,500
|
5.00%
|
Ausca Shipping Limited, Hong Kong
|
8-Jun-17
|
15-Oct-18
|
4
|
||||||
$11,000
|
5.00%
|
Tongli Shipping Pte. Ltd.
|
4-Nov-18
|
26-Nov-18
|
1,3
|
|||||||||
2001 75,336
|
||||||||||||||
6
|
OCEANIS
|
A
|
$7,000
|
5.00%
|
Ausca Shipping Limited, Hong Kong
|
30-May-17
|
16-Nov-18
|
|||||||
$10,350
|
5.00%
|
16-Nov-18
|
1-Jan-20 - 31-Mar-20
|
|||||||||||
2001 75,211
|
||||||||||||||
7
|
THETIS
|
B
|
$8,350
|
5.00%
|
Ausca Shipping Limited, Hong Kong
|
14-Jul-17
|
19-Oct-18
|
5,6
|
||||||
$10,650
|
3.75%
|
Hudson Shipping Lines Incorporated
|
16-Nov-18
|
16-Jan-20 - 16-Apr-20
|
||||||||||
2004 73,583
|
||||||||||||||
8
|
PROTEFS
|
B
|
$7,900
|
5.00%
|
Hudson Shipping Lines Incorporated
|
24-Jun-17
|
19-Sep-18
|
|||||||
$11,000
|
3.75%
|
19-Sep-18
|
4-Sep-19 - 19-Dec-19
|
|||||||||||
2004 73,630
|
||||||||||||||
9
|
CALIPSO
|
B
|
$12,200
|
5.00%
|
Glencore Agriculture B.V., Rotterdam
|
12-Mar-18
|
28-May-19 - 12-Sep-19
|
|||||||
2005 73,691
|
||||||||||||||
10
|
CLIO
|
B
|
$8,550
|
5.00%
|
Phaethon International Company AG
|
9-Jul-17
|
10-Nov-18
|
|||||||
$10,600
|
5.00%
|
Ausca Shipping Limited, Hong Kong
|
10-Nov-18
|
10-Sep-19 - 10-Dec-19
|
||||||||||
2005 73,691
|
||||||||||||||
11
|
NAIAS
|
B
|
$10,000
|
5.00%
|
Phaethon International Company AG
|
26-Nov-17
|
11-Feb-19 - 26-May-19
|
|||||||
2006 73,546
|
||||||||||||||
12
|
ARETHUSA
|
B
|
$12,600
|
5.00%
|
Glencore Agriculture B.V., Rotterdam
|
27-Apr-18
|
27-Apr-19 - 27-Jul-19
|
|||||||
2007 73,593
|
||||||||||||||
13
|
ERATO
|
C
|
$10,500
|
5.00%
|
Phaethon International Company AG
|
30-Dec-17
|
2-Mar-19 - 30-May-19
|
|||||||
2004 74,444
|
||||||||||||||
14
|
CORONIS
|
C
|
$9,000
|
5.00%
|
Narina Maritime Ltd
|
16-May-17
|
11-Aug-18
|
7
|
||||||
$8,300
|
5.00%
|
CJ International Italy Societa Per Azioni
|
11-Aug-18
|
10-Oct-18
|
||||||||||
$11,300
|
5.00%
|
10-Oct-18
|
11-Aug-19 - 11-Nov-19
|
|||||||||||
2006 74,381
|
||||||||||||||
15
|
MELIA
|
$12,000
|
5.00%
|
United Bulk Carriers International S.A., Luxemburg
|
28-Apr-18
|
28-Sep-19 - 28-Dec-19
|
8
|
|||||||
2005 76,225
|
||||||||||||||
16
|
ARTEMIS
|
$9,000
|
5.00%
|
Ausca Shipping Limited, Hong Kong
|
8-Jul-17
|
17-Sep-18
|
||||||||
$12,600
|
5.00%
|
17-Sep-18
|
17-Sep-19 - 17-Dec-19
|
|||||||||||
2006 76,942
|
17
|
LETO
|
$12,500
|
5.00%
|
Glencore Agriculture B.V., Rotterdam
|
10-Jan-18
|
10-May-19 - 25-Aug-19
|
||||
2010 81,297
|
||||||||||
18
|
SELINA
|
D
|
$12,250
|
5.00%
|
BG Shipping Co., Limited, Hong Kong
|
6-Feb-18
|
6-Jun-19 - 6-Sep-19
|
|||
2010 75,700
|
||||||||||
19
|
MAERA
|
D
|
$11,900
|
5.00%
|
Unico Logistics Co., Ltd., Seoul
|
19-Sep-17
|
4-Jul-18
|
|||
$11,750
|
5.00%
|
ST Shipping and Transport Pte. Ltd., Singpore
|
4-Jul-18
|
20-Jan-19 - 4-Apr-19
|
9
|
|||||
2013 75,403
|
||||||||||
20
|
ISMENE
|
$12,000
|
5.00%
|
DHL Project & Chartering Limited, Hong Kong
|
16-Sep-17
|
29-Nov-18 - 16-Dec-18
|
1
|
|||
2013 77,901
|
||||||||||
21
|
CRYSTALIA
|
E
|
$11,100
|
5.00%
|
Glencore Agriculture B.V., Rotterdam
|
3-Oct-17
|
30-Nov-18 - 18-Jan-19
|
1
|
||
2014 77,525
|
||||||||||
22
|
ATALANDI
|
E
|
$13,500
|
5.00%
|
Uniper Global Commodities SE, Düsseldorf
|
27-Apr-18
|
27-Jun-19 - 27-Sep-19
|
|||
2014 77,529
|
||||||||||
5 Kamsarmax Bulk Carriers
|
||||||||||
23
|
MAIA
|
F
|
$10,125
|
5.00%
|
Glencore Agriculture B.V., Rotterdam
|
27-Jul-17
|
5-Nov-18
|
10
|
||
$13,300
|
5.00%
|
12-Nov-18
|
1-Jan-20 - 31-Mar-20
|
|||||||
2009 82,193
|
||||||||||
24
|
MYRSINI
|
F
|
$8,650
|
5.00%
|
RWE Supply & Trading GmbH, Essen
|
8-Jun-17
|
1-Dec-18 - 31-Dec-18
|
1
|
||
2010 82,117
|
||||||||||
25
|
MEDUSA
|
F
|
$10,000
|
4.75%
|
Cargill International S.A., Geneva
|
6-Jul-17
|
3-Sep-18
|
|||
$14,000
|
4.75%
|
3-Sep-18
|
3-Oct-19 - 3-Dec-19
|
|||||||
2010 82,194
|
||||||||||
26
|
MYRTO
|
F
|
$14,000
|
4.75%
|
Cargill International S.A., Geneva
|
25-Apr-18
|
25-May-19 - 25-Jul-19
|
|||
2013 82,131
|
||||||||||
27
|
ASTARTE
|
$9,000
|
5.00%
|
Glencore Agriculture B.V., Rotterdam
|
12-Jun-17
|
16-Oct-18
|
||||
$14,250
|
5.00%
|
16-Oct-18
|
16-Dec-19 - 16-Mar-20
|
|||||||
2013 81,513
|
||||||||||
5 Post-Panamax Bulk Carriers
|
||||||||||
28
|
ALCMENE
|
$8,000
|
4.75%
|
Cargill International S.A., Geneva
|
8-Jun-17
|
6-Oct-18
|
||||
$14,000
|
5.00%
|
Smart Gain Shipping Co., Limited, Hong Kong
|
6-Oct-18
|
9-Nov-18
|
||||||
$11,500
|
5.00%
|
BG Shipping Co., Limited, Hong Kong
|
21-Nov-18
|
21-Oct-19 - 21-Jan-20
|
||||||
2010 93,193
|
||||||||||
29
|
AMPHITRITE
|
G
|
$11,150
|
4.75%
|
Cargill International S.A., Geneva
|
28-Sep-17
|
1-Dec-18 - 28-Jan-19
|
1
|
||
2012 98,697
|
||||||||||
30
|
POLYMNIA
|
G
|
$10,100
|
4.75%
|
Cargill International S.A., Geneva
|
15-Mar-17
|
9-Jul-18
|
|||
$16,000
|
4.75%
|
9-Jul-18
|
9-Sep-19 - 9-Dec-19
|
|||||||
2012 98,704
|
||||||||||
31
|
ELECTRA
|
H
|
$8,000
|
5.00%
|
Uniper Global Commodities SE, Düsseldorf
|
11-Jun-17
|
19-Oct-18
|
|||
$13,500
|
5.00%
|
19-Oct-18
|
15-Sep-19 - 15-Dec-19
|
|||||||
2013 87,150
|
32
|
PHAIDRA
|
H
|
$12,700
|
5.00%
|
Uniper Global Commodities SE, Düsseldorf
|
13-Jan-18
|
13-Jan-19 - 13-Apr-19
|
||||||||
2013 87,146
|
|||||||||||||||
14 Capesize Bulk Carriers
|
|||||||||||||||
33
|
NORFOLK
|
$13,250
|
5.00%
|
SwissMarine Services S.A., Geneva
|
1-Dec-17
|
1-Sep-19 - 1-Dec-19
|
|||||||||
2002 164,218
|
|||||||||||||||
34
|
ALIKI
|
$18,000
|
5.00%
|
SwissMarine Services S.A., Geneva
|
9-Apr-18
|
9-Dec-19 - 9-Feb-20
|
|||||||||
2005 180,235
|
|||||||||||||||
35
|
BALTIMORE
|
$18,050
|
5.00%
|
Koch Shipping Pte. Ltd., Singapore
|
6-Jun-18
|
22-May-19 - 21-Aug-19
|
|||||||||
2005 177,243
|
|||||||||||||||
36
|
SALT LAKE CITY
|
$16,250
|
4.75%
|
Cargill International S.A., Geneva
|
1-May-18
|
1-Jan-19 - 1-Mar-19
|
|||||||||
2005 171,810
|
|||||||||||||||
37
|
SIDERIS GS
|
I
|
$13,000
|
5.00%
|
Rio Tinto Shipping (Asia) Pte., Ltd., Singapore
|
21-Jun-17
|
15-Nov-18
|
||||||||
$8,500
|
5.00%
|
Berge Bulk Shipping Pte. Ltd., Singapore
|
15-Nov-18
|
15-Dec-18
|
|||||||||||
$15,350
|
5.00%
|
15-Dec-18
|
15-Dec-19 - 30-Mar-20
|
||||||||||||
2006 174,186
|
|||||||||||||||
38
|
SEMIRIO
|
I
|
$14,150
|
5.00%
|
Koch Shipping Pte. Ltd., Singapore
|
21-May-17
|
1-Sep-18
|
||||||||
$20,050
|
5.00%
|
Pacific Bulk Cape Company Limited, Hong Kong
|
1-Sep-18
|
1-Jul-19 - 16-Sep-19
|
|||||||||||
2007 174,261
|
|||||||||||||||
39
|
BOSTON
|
I
|
$17,000
|
5.00%
|
EGPN Bulk Carrier Co., Limited, Hong Kong
|
6-Dec-17
|
6-Apr-19 - 6-Jul-19
|
||||||||
2007 177,828
|
|||||||||||||||
40
|
HOUSTON
|
I
|
$19,000
|
5.00%
|
SwissMarine Services S.A., Geneva
|
9-May-18
|
25-Jan-19 - 24-Apr-19
|
||||||||
2009 177,729
|
|||||||||||||||
41
|
NEW YORK
|
I
|
$16,000
|
5.00%
|
DHL Project & Chartering Limited, Hong Kong
|
2-Feb-18
|
2-Jun-19 - 2-Sep-19
|
||||||||
2010 177,773
|
|||||||||||||||
42
|
SEATTLE
|
J
|
$11,700
|
5.00%
|
Koch Shipping Pte. Ltd., Singapore
|
8-Feb-17
|
30-Jul-18
|
11
|
|||||||
$24,000
|
5.00%
|
30-Jul-18
|
30-Nov-18 - 30-Jan-19
|
||||||||||||
2011 179,362
|
|||||||||||||||
43
|
P. S. PALIOS
|
J
|
$17,350
|
5.00%
|
Koch Shipping Pte. Ltd., Singapore
|
24-May-18
|
9-Jun-19 - 24-Aug-19
|
||||||||
2013 179,134
|
|||||||||||||||
44
|
G. P. ZAFIRAKIS
|
K
|
$15,000
|
5.00%
|
RWE Supply & Trading GmbH, Essen
|
14-Aug-17
|
30-Nov-18 - 14-Jan-19
|
1
|
|||||||
2014 179,492
|
|||||||||||||||
45
|
SANTA BARBARA
|
K
|
$20,250
|
4.75%
|
Cargill International S.A., Geneva
|
24-Apr-18
|
9-Oct-19 - 9-Dec-19
|
||||||||
2015 179,426
|
|||||||||||||||
46
|
NEW ORLEANS
|
$21,000
|
5.00%
|
SwissMarine Services S.A., Geneva
|
24-Mar-18
|
24-Feb-19 - 24-Apr-19
|
|||||||||
2015 180,960
|
4 Newcastlemax Bulk Carriers
|
||||||||
47
|
LOS ANGELES
|
L
|
$19,150
|
5.00%
|
SwissMarine Services S.A., Geneva
|
16-Apr-18
|
1-Jan-19 - 16-Apr-19
|
|
2012 206,104
|
||||||||
48
|
PHILADELPHIA
|
L
|
$20,000
|
5.00%
|
Koch Shipping Pte. Ltd., Singapore
|
18-Jun-18
|
3-Feb-20 - 18-May-20
|
|
2012 206,040
|
||||||||
49
|
SAN FRANCISCO
|
M
|
$24,000
|
5.00%
|
Koch Shipping Pte. Ltd., Singapore
|
14-May-18
|
4-Mar-19 - 24-May-19
|
|
2017 208,006
|
||||||||
50
|
NEWPORT NEWS
|
M
|
BCI_2014 5TCs AVG + 24%
|
5.00%
|
SwissMarine Services S.A., Geneva
|
10-Jan-17
|
1-Dec-18 - 10-Mar-19
|
1
|
2017 208,021
|
||||||||
* Each dry bulk carrier is a "sister ship", or closely similar, to other dry bulk carriers that have the same letter.
|
||||||||
** Total commission percentage paid to third parties.
|
||||||||
*** In case of newly acquired vessel with time charter attached, this date refers to the expected/actual date of delivery of
the vessel to the Company.
|
||||||||
**** Range of redelivery dates, with the actual date of redelivery being at the Charterers’ option, but subject to the terms,
conditions, and exceptions of the particular charterparty.
|
||||||||
1 Based on latest information.
|
||||||||
2 Vessel off hire for unscheduled maintenance from May 30, 2018 to July 10, 2018.
|
||||||||
3 Vessel sold and expected to be delivered to her new Owners at the latest by January 7, 2019.
|
||||||||
4 Vessel on scheduled drydocking from October 17, 2018 to November 1, 2018.
|
||||||||
5 Charterers have agreed to pay the weighted average of the Baltic Panamax 4 T/C routes, as published by the Baltic Exchange
on October 15, 2018, for the excess period commencing from October 14, 2018.
|
||||||||
6 Vessel on scheduled drydocking from October 22, 2018 to November 16, 2018.
|
||||||||
7 Charterers have agreed to pay the weighted average of the Baltic Panamax 4 T/C routes, as published by the Baltic Exchange
on August 6, 2018, for the excess period commencing from August 5, 2018, in case it is higher than the current rate of US$ 9,000.
|
||||||||
8 Vessel off hire from October 22, 2018 to October 25, 2018.
|
||||||||
9 Vessel off hire from August 9, 2018 to August 12, 2018.
|
||||||||
10 Charterers have agreed to pay the weighted average of the Baltic Panamax 4 T/C routes, as published by the Baltic Exchange
on October 26, 2018 plus 18%, only in case it is higher than the exsisting rate of US$10,125 which otherwise will continue to apply, for the excess period commencing from October 27, 2018.
|
||||||||
11 Charterers have agreed to pay the weighted average of the Baltic Capesize 5 T/C routes, as published by the Baltic Exchange
on July 23, 2018 plus 5%, for the excess period commencing from July 23, 2018.
|
Post-Panamax Bulk Carriers
|
|||||
Name of Vessel
|
Size (deadweight tons)
|
Year Built
|
Company
|
Flag
|
Management Company
|
Alcmene
|
93,193
|
2010
|
MAJURO SHIPPING COMPANY INC.
|
Marshall Islands
|
DWM
|
Amphitrite
|
98,697
|
2012
|
GUAM SHIPPING COMPANY INC.
|
Marshall Islands
|
DSS
|
Polymnia
|
98,704
|
2012
|
PALAU SHIPPING COMPANY INC.
|
Marshall Islands
|
DSS
|
Electra
|
87,150
|
2013
|
RAKARU SHIPPING COMPANY INC.
|
Marshall Islands
|
DSS
|
Phaidra
|
87,146
|
2013
|
MEJATO SHIPPING COMPANY INC.
|
Marshall Islands
|
DSS
|
Capesize Bulk Carriers
|
|||||
Name of Vessel
|
Size (deadweight tons)
|
Year Built
|
Company
|
Flag
|
Management Company
|
Norfolk
|
164,218
|
2002
|
SILVER CHANDRA SHIPPING COMPANY LIMITED
|
Cyprus
|
DSS
|
Aliki
|
180,235
|
2005
|
KNOX SHIPPING COMPANY INC.
|
Marshall Islands
|
DSS
|
Baltimore
|
177,243
|
2005
|
BOKAK SHIPPING COMPANY INC.
|
Marshall Islands
|
DSS
|
Salt Lake City
|
171,810
|
2005
|
MARFORT NAVIGATION COMPANY LIMITED
|
Cyprus
|
DWM
|
Sideris GS
|
174,186
|
2006
|
JALUIT SHIPPING COMPANY INC.
|
Marshall Islands
|
DSS
|
Semirio
|
174,261
|
2007
|
KILI SHIPPING COMPANY INC.
|
Marshall Islands
|
DWM
|
Boston
|
177,828
|
2007
|
LIB SHIPPING COMPANY INC.
|
Marshall Islands
|
DSS
|
Houston
|
177,729
|
2009
|
GALA PROPERTIES INC.
|
Marshall Islands
|
DSS
|
New York
|
177,773
|
2010
|
BIKINI SHIPPING COMPANY INC.
|
Marshall Islands
|
DSS
|
Seattle
|
179,362
|
2011
|
TOKU SHIPPING COMPANY INC.
|
Marshall Islands
|
DSS
|
P. S. Palios
|
179,134
|
2013
|
PULAP SHIPPING COMPANY INC.
|
Marshall Islands
|
DSS
|
G. P. Zafirakis
|
179,492
|
2014
|
WENO SHIPPING COMPANY INC.
|
Marshall Islands
|
DSS
|
Santa Barbara
|
179,426
|
2015
|
LELU SHIPPING COMPANY INC.
|
Marshall Islands
|
DSS
|
New Orleans
|
180,960
|
2015
|
UJAE SHIPPING COMPANY INC.
|
Marshall Islands
|
DSS
|
Newcastlemax Bulk Carriers
|
|||||
Name of Vessel
|
Size (deadweight tons)
|
Year Built
|
Company
|
Flag
|
Management Company
|
Los Angeles
|
206,104
|
2012
|
LAE SHIPPING COMPANY INC.
|
Marshall Islands
|
DSS
|
Philadelphia
|
206,040
|
2012
|
NAMU SHIPPING COMPANY INC.
|
Marshall Islands
|
DSS
|
San Francisco
|
208,006
|
2017
|
ASTER SHIPPING COMPANY INC.
|
Marshall Islands
|
DSS
|
Newport News
|
208,021
|
2017
|
AERIK SHIPPING COMPANY INC.
|
Marshall Islands
|
DSS
|
Name of director
|
Position
|
Simeon P. Palios
|
Class I Director, Chief Executive Officer and Chairman of the Board
|
Anastasios C. Margaronis
|
Class I Director and President
|
Andreas Michalopoulos
|
Class III Director, Chief Financial Officer and Treasurer
|
Ioannis G. Zafirakis
|
Class I Director, Chief Strategy Officer and Secretary
|
Semiramis Paliou
|
Class III Director and Chief Operating Officer
|
William (Bill) Lawes
|
Class II Director
|
Apostolos Kontoyannis
|
Class III Director
|
Konstantinos Fotiadis
|
Class III Director
|
Konstantinos Psaltis
|
Class II Director
|
Kyriacos Riris
|
Class II Director
|
Christos Glavanis
|
Class I Director
|
Name of officer
|
Position
|
Simeon Palios
|
Chief Executive officer
|
Anastasios Margaronis
|
President
|
Ioannis Zafirakis
|
Chief Strategy Officer and Secretary
|
Semiramis Paliou
|
Chief Operating Officer
|
Andreas Michalopoulos
|
Chief Financial Officer and Treasurer
|
Title of Class
|
Identity of Person or Group
|
Number of
Shares Owned
|
Percent of Class*
|
|||
Common Stock, par value $0.01
|
Simeon Palios (1)
|
24,964,707
|
|
23.1
|
||
|
|
Franklin Resources Inc. (2)
|
12,833,190
|
|
11.9
|
|
|
|
Kopernik Global Investors, LLC (3)
|
5,573,381
|
|
5.2
|
|
|
|
All officers and directors as a group (4)
|
29,658,208
|
|
27.5
|
(1)
|
Mr. Simeon Palios indirectly may be deemed to beneficially own 9,524,360 shares beneficially owned by Ironwood Trading
Corp. and 15,440,347 shares beneficially owned by Steamship Shipbroking Enterprises Inc. (formerly Diana Enterprises Inc.), including 4,762,180 shares beneficially owned through Corozal Compania Naviera S.A., as the result of his
ability to control the vote and disposition of such entities, for an aggregate of 24,964,707 shares. As of December 31, 2015, 2016 and 2017, Mr. Simeon Palios owned indirectly 20.6%, 22.2% and 22.5%, respectively, of our
outstanding common stock.
|
(2)
|
This information is derived from a Schedule 13G/A filed with the SEC on February 6, 2018.
|
(3)
|
This information is derived from a Schedule 13G/A filed with the SEC on February 9, 2018.
|
(4)
|
Mr. Simeon Palios is our only director or officer that beneficially owns 5% or more of our outstanding common stock. Mr.
Anastasios Margaronis, our President and a member of our board of directors is indirect shareholder through ownership of stock held among others in Corozal Compania Naviera S.A., and Ironwood Trading Corp. Mr. Margaronis does not
have dispositive or voting power with regard to shares held by Corozal Compania Naviera S.A. and Ironwood Trading Corp. and, accordingly, is not considered to be beneficial owner of our common shares held through Corozal Compania
Naviera S.A. and Ironwood Trading Corp. Mr. Anastasios Margaronis also owns indirectly 3.2% of our outstanding common stock. All other officers and directors each owns less than 1% of our outstanding common stock. In addition,
Steamship Shipbroking Enterprises Inc. (formerly Diana Enterprises Inc.) owns indirectly 100,390, or 3.9% of the outstanding Series B Preferred Shares and Mr. Anastasios Margaronis owns indirectly 28,025, or 1.1% of the
outstanding Series B Preferred Shares. All officers and directors as a group own 133,575, or 5.1% of our outstanding Series B Preferred Shares.
|
|
(i) |
The Company has received the outstanding balance of a loan receivable from a related party amounting to $82.7 million as of December 31, 2017, and
as such the loan receivable has been reduced to zero.
|
|
(ii) |
On July 13, 2018, the Company entered into a term loan facility with BNP Paribas for an amount of up to $75.0 million to refinance an existing loan
facility with the bank having an outstanding balance of $130.0 million at the date of refinancing. The loan of $130.0 million was repaid in full on July 16, 2018 by using the $75.0 million loan proceeds and cash on hand.
|
|
(iii) |
On October 29, 2018, the Company redeemed in full its senior notes amounting to $63.25 million, which until the date of redemption were trading on
the NYSE under the symbol "DSXN".
|
|
(iv) |
On November 5, 2018, the Company through a wholly owned subsidiary entered into a Memorandum of Agreement to sell the vessel “Triton” to an
unaffiliated third party, for a sale price of $7.35 million before commissions.
|
|
(v) |
On November 9, 2018 the Company through a wholly owned subsidiary entered into a Memorandum of Agreement to sell the vessel “Alcyon” to an
unaffiliated third party, for a sale price of $7.45 million before commissions.
|
|
(vi) |
On November 21, 2018 the Company announced the commencement of a tender offer to purchase up to 4,166,666 shares, or about 3.86%, of its outstanding
common stock using funds available from cash and cash equivalents at a price of US$3.60 per share. The tender offer will expire at the end of the day, 5:00 P.M., Eastern Time, on December 20, 2018, unless extended or
withdrawn.
|
|
a) |
the Articles of Incorporation and Bylaws of the Company;
|
|
b) |
all reports, letters, and other documents, historical financial information, valuations and statements prepared by any expert at the Company’s
request any part of which is included or referred to in the Registration Document;
|
|
c) |
the historical financial information of the Company and its subsidiary undertakings for each of the two financial years preceding the publication of
the Registration Document.
|
· |
Bulk Carriers - Vessels which are specially designed and built to carry large volumes of cargo in bulk cargo form.
|
· |
Bunkers - Heavy fuel oil used to power a vessel's engines.
|
· |
Capesize - A dry bulk carrier having a carrying capacity of 110,000 dwt to 199,999 dwt.
|
· |
Charter - The hire of a vessel for a specified period of time to carry a cargo for a fixed fee from a loading port to a discharging port. The
contract for a charter is called a charterparty.
|
· |
Charterer - The individual or company hiring a vessel.
|
· |
Charter Hire Rate - A sum of money paid to the vessel owner by a charterer under a time charterparty for the use of a vessel.
|
· |
Classification Society - An independent organization which certifies that a vessel has been built and maintained in accordance with the rules of
such organization and complies with the applicable rules and regulations of the country of such vessel and the international conventions of which that country is a member.
|
· |
Deadweight Ton-"dwt" - A unit of a vessel's capacity for cargo, fuel oil, stores and crew, measured in metric tons of 1,000 kilograms. A vessel's
DWT or total deadweight is the total weight the vessel can carry when loaded to a particular load line.
|
· |
Draft - Vertical distance between the waterline and the bottom of the vessel's keel.
|
· |
Dry Bulk - Non-liquid cargoes of commodities shipped in an unpackaged state.
|
· |
Drydocking - The removal of a vessel from the water for inspection and/or repair of submerged parts.
|
· |
Hull - The shell or body of a vessel.
|
· |
International Maritime Organization-"IMO" - A United Nations agency that issues international trade standards for shipping.
|
· |
Metric Ton - A metric ton of 1,000 kilograms.
|
· |
Newbuilding - A newly constructed vessel.
|
· |
Panamax - A dry bulk carrier of approximately 60,000 to 79,999 dwt of maximum length, depth and draft capable of passing fully loaded through the
Panama Canal.
|
· |
Post-Panamax - A dry bulk carrier having a carrying capacity of 80,000 dwt to 109,999 dwt.
|
· |
Protection and Indemnity Insurance - Insurance obtained through a mutual association formed by shipowners to provide liability insurance protection
from large financial loss to one member through contributions towards that loss by all members.
|
· |
Short-Term Time Charter - A time charter which lasts less than approximately 12 months.
|
· |
Sister Ships - Vessels of the same class and specification which were built by the same shipyard.
|
· |
Time Charter - Contract for hire of a ship. A charter under which the ship-owner is paid charter hire rate on a per day basis for a certain period
of time, the shipowner being responsible for providing the crew and paying operating costs while the charterer is responsible for paying the voyage costs. Any delays at port or during the voyages are the responsibility of the
charterer, save for certain specific exceptions such as loss of time arising from vessel breakdown and routine maintenance.
|
· |
Ton - A metric ton of 1,000 kilograms.
|
|
|
Page
|
|
|
|
Report of Independent Registered Public Accounting Firm
|
|
F-2
|
|
|
|
Report of Independent Registered Public Accounting Firm
|
|
F-3
|
|
|
|
Consolidated Balance Sheets as of December 31, 2017 and 2016
|
|
F-4
|
|
|
|
Consolidated Statements of Operations for the years ended December 31, 2017, 2016 and 2015
|
|
F-5
|
|
|
|
Consolidated Statements of Comprehensive Loss for the years ended December 31, 2017, 2016 and 2015
|
|
F-5
|
|
|
|
Consolidated Statements of Stockholders' Equity for the years ended December 31, 2017, 2016 and 2015
|
|
F-6
|
|
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2017, 2016 and 2015
|
|
F-7
|
|
|
|
Notes to Consolidated Financial Statements
|
|
F-8
|
|
|
|
|
|
|
DIANA SHIPPING INC.
|
|
|
|
|
|
|
|
|
|
|||
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
|
|||||
For the years ended December 31, 2017, 2016 and 2015
|
|
|
|
|
||||||||
(Expressed in thousands of U.S. Dollars – except for share and per share data)
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|||
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
REVENUES:
|
|
|
|
|
|
|
|
|
|
|||
Time charter revenues
|
|
$
|
161,897
|
|
|
$
|
114,259
|
|
|
$
|
157,712
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
Voyage expenses
|
|
|
8,617
|
|
|
|
13,826
|
|
|
|
15,528
|
|
Vessel operating expenses
|
|
|
90,358
|
|
|
|
85,955
|
|
|
|
88,272
|
|
Depreciation and amortization of deferred charges (Notes 2(l) and 2(m))
|
|
|
87,003
|
|
|
|
81,578
|
|
|
|
76,333
|
|
General and administrative expenses
|
|
|
26,332
|
|
|
|
25,510
|
|
|
|
25,335
|
|
Management fees to related party (Notes 3(b) and 4(d))
|
|
|
1,883
|
|
|
|
1,464
|
|
|
|
405
|
|
Impairment loss (Note 5)
|
|
|
442,274
|
|
|
|
-
|
|
|
|
-
|
|
Insurance recoveries, net of other loss (Note 5)
|
|
|
(10,879
|
)
|
|
|
-
|
|
|
|
-
|
|
Gain on contract termination
|
|
|
-
|
|
|
|
(5,500
|
)
|
|
|
-
|
|
Other loss/(income)
|
|
|
296
|
|
|
|
(253
|
)
|
|
|
(984
|
)
|
Operating loss
|
|
$
|
(483,987
|
)
|
|
$
|
(88,321
|
)
|
|
$
|
(47,177
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME / (EXPENSES):
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and finance costs (Note 10)
|
|
|
(26,628
|
)
|
|
|
(21,949
|
)
|
|
|
(15,555
|
)
|
Interest and other income (Note 4(b))
|
|
|
4,508
|
|
|
|
2,410
|
|
|
|
3,152
|
|
Loss from equity method investments (Note 3)
|
|
|
(5,607
|
)
|
|
|
(56,377
|
)
|
|
|
(5,133
|
)
|
Total other expenses, net
|
|
$
|
(27,727
|
)
|
|
$
|
(75,916
|
)
|
|
$
|
(17,536
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(511,714
|
)
|
|
$
|
(164,237
|
)
|
|
$
|
(64,713
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends on series B preferred shares (Notes 9(a) and 11)
|
|
|
(5,769
|
)
|
|
|
(5,769
|
)
|
|
|
(5,769
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributed to common stockholders
|
|
$
|
(517,483
|
)
|
|
$
|
(170,006
|
)
|
|
$
|
(70,482
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per common share,
basic and diluted
(Note 11)
|
|
$
|
(5.41
|
)
|
|
$
|
(2.11
|
)
|
|
$
|
(0.89
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares, basic and diluted
(Note 11)
|
|
|
95,731,093
|
|
|
|
80,441,517
|
|
|
|
79,518,009
|
|
Charterer
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
A
|
|
|
17
|
%
|
|
|
|
|
|
|
||
B
|
|
|
14
|
%
|
|
|
15
|
%
|
|
|
|
|
C
|
12
|
%
|
10
|
%
|
||||||||
D
|
|
|
|
|
|
19
|
%
|
|
|
24
|
%
|
|
E
|
|
|
|
|
|
10
|
%
|
|
|
20
|
%
|
|
F
|
|
|
|
|
|
|
|
|
12
|
%
|
||
G
|
|
|
|
|
|
|
|
|
10
|
%
|
(f) |
Accounts Receivable,
Trade:
The amount shown as accounts receivable, trade, at each balance sheet date, includes receivables from charterers for hire, ballast bonus billings, if any, hold cleanings and extra voyage insurance, net
of any provision for doubtful accounts. At each balance sheet date, all potentially uncollectible accounts are assessed individually for purposes of determining the appropriate provision for doubtful accounts. No
provision for doubtful accounts was established as of December 31, 2017 and 2016.
|
(g) |
Loan Receivable from
Related Party
: The amounts shown as Due from related parties, current and non-current, in the consolidated balance sheet as at December 31, 2017 and 2016, represent amounts receivable from Diana Containerships
Inc., or Diana Containerships, with respect to a loan agreement, net of any provision for credit losses and does not include the $5,000 discount premium due on the termination date of the loan (Note 4(b)). Interest
income and fees, deriving from the agreement are recorded in the accounts as incurred. At each balance sheet date, amounts due under the aforementioned loan agreement are assessed for purposes of determining the
appropriate provision for credit losses. As at December 31, 2017 and 2016, the Company assessed the ability of Diana Containerships to meet its obligations under the loan agreement by taking into consideration existing
economic conditions, the current financial condition of Diana Containerships, equity offerings, sale plans, historical losses, and other risks/factors that may affect Diana Containerships' future financial condition
and its ability to meet its obligations. As a result of this assessment, the Company did not record any provision for credit losses, as it determined that Diana Containerships will be able to meet its obligations under
the loan in the near future.
|
(h) |
Inventories:
Inventories
consist of lubricants and victualling which are stated at the lower of cost or net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable
costs of completion, disposal, and transportation. When evidence exists that the net realizable value of inventory is lower than its cost, the difference is recognized as a loss in earnings in the period in which it
occurs. Cost is determined by the first in, first out method. Inventories may also consist of bunkers when on the balance sheet date a vessel remains idle. Bunkers, if any, are also stated at the lower of cost or net
realizable value and cost is determined by the first in, first out method.
|
(i) |
Vessel Cost:
Vessels
are stated at cost which consists of the contract price and any material expenses incurred upon acquisition or during construction. Expenditures for conversions and major improvements are also capitalized when they
appreciably extend the life, increase the earning capacity or improve the efficiency or safety of the vessels; otherwise these amounts are charged to expense as incurred. Interest cost incurred during the assets'
construction periods that theoretically could have been avoided if expenditure for the assets had not been made is also capitalized. The capitalization rate, applied on accumulated expenditures for the vessel, is based
on interest rates applicable to outstanding borrowings of the period.
|
(j) |
Property and equipment:
The Company owns the land and building where its offices are located. Land is presented in its fair value on the date of acquisition and it is not subject to depreciation. The building has an estimated useful life of
55 years with no residual value. Depreciation is calculated on a straight-line basis. Equipment consists of office furniture and equipment, computer software and hardware and vehicles which consist of motor scooters
and a car. The useful life of the car is 10 years, of the office furniture, equipment and the scooters is 5 years; and of the computer software and hardware is 3 years. Depreciation is calculated on a straight-line
basis.
|
(k) |
Impairment of Long-Lived
Assets:
Long-lived assets (vessels, land, and building) and certain identifiable intangibles held and used by an entity are reviewed for impairment whenever events or changes in circumstances (such as market
conditions, obsolesce or damage to the asset, potential sales and other business plans) indicate that the carrying amount of the assets may not be recoverable. When the estimate of undiscounted projected net operating
cash flows, excluding interest charges, expected to be generated by the use of the asset over its remaining useful life and its eventual disposition is less than its carrying amount, the Company should evaluate the
asset for an impairment loss. Measurement of the impairment loss is based on the fair value of the asset. The Company determines the fair value of its assets based on management estimates and assumptions and by making
use of available market data and taking into consideration third party valuations.
|
(l) |
Vessel Depreciation
:
Depreciation is computed using the straight-line method over the estimated useful life of the vessels, after considering the estimated salvage (scrap) value. Each vessel's salvage value is equal to the product of its
lightweight tonnage and estimated scrap rate. Management estimates the useful life of the Company's vessels to be 25 years from the date of initial delivery from the shipyard. Second hand vessels are depreciated from
the date of their acquisition through their remaining estimated useful life. When regulations place limitations over the ability of a vessel to trade on a worldwide basis, its remaining useful life is adjusted at the
date such regulations are adopted.
|
(m) |
Accounting for
Dry-Docking Costs
: The Company follows the deferral method of accounting for dry-docking costs whereby actual costs incurred are deferred and are amortized on a straight-line basis over the period through the
date the next dry-docking is scheduled to become due. Unamortized dry-docking costs of vessels that are sold or impaired are written off and included in the calculation of the resulting gain or loss in the year of the
vessel's sale or impairment.
|
(n) |
Financing Costs
:
Fees paid to lenders for obtaining new loans or refinancing existing ones are deferred and recorded as a contra to debt. Other fees paid for obtaining loan facilities not used at the balance sheet date are capitalized
as deferred financing costs. Fees relating to drawn loan facilities are amortized to interest and finance costs over the life of the related debt using the effective interest method and fees incurred for loan
facilities not used at the balance sheet date are amortized using the straight line method according to their availability terms. Unamortized fees relating to loans repaid or refinanced as debt extinguishment are
expensed as interest and finance costs in the period the repayment or extinguishment is made. Loan commitment fees are charged to expense in the period incurred, unless they relate to loans obtained to finance vessels
under construction, in which case they are capitalized to the vessels' cost.
|
(o) |
Concentration of Credit
Risk:
Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist principally of cash, trade accounts receivable and the loan receivable from a related
party. The Company places its temporary cash investments, consisting mostly of deposits, with various qualified financial institutions and performs periodic evaluations of the relative credit standing of those
financial institutions that are considered in the Company's investment strategy. The Company limits its credit risk with accounts receivable by performing ongoing credit evaluations of its customers' financial
condition and generally does not require collateral for its accounts receivable and does not have any agreements to mitigate credit risk. The Company limits its credit risk with the loan receivable by performing
ongoing credit evaluations of Diana Containerships' financial condition. The loan agreement is guaranteed by second preferred mortgages over the vessels of Diana Containerships' fleet (Note 4(b)). The Company has not
entered into any agreement to mitigate credit risk.
|
(p) |
Accounting for Revenues
and Expenses:
Revenues are generated from time charter agreements and are usually paid fifteen days in advance. Time charter agreements with the same charterer are accounted for as separate agreements
according to the terms and conditions of each agreement. Time charter revenues are recorded over the term of the charter as service is provided. Income representing ballast bonus payments by the charterer to the vessel
owner, if any, is recognized in the period earned. Revenues from time charter agreements providing for varying annual rates over their term are accounted for on a straight line basis. Compensation due to earlier
redelivery than the minimum period agreed in the charter party is recognized in the period earned. Deferred revenue includes cash received prior to the balance sheet date for which all criteria to recognize as revenue
have not been met. Deferred revenue may also include deferred revenue resulting from charter agreements providing for varying annual rates, which are accounted for on a straight line basis, or the unamortized balance
of the liability associated with the acquisition of second-hand vessels with time charters attached which were acquired at values below fair market value at the date the acquisition agreement is consummated. Voyage
expenses, primarily consisting of commissions, port, canal and bunker expenses that are unique to a particular charter, are paid for by the charterer under time charter arrangements, except for commissions, which are
always paid for by the Company, regardless of charter type and gain or loss from the sale of bunkers on delivery to the time charterers. All voyage and vessel operating expenses are expensed as incurred, except for
commissions. Commissions are deferred over the related voyage charter period to the extent revenue has been deferred since commissions are due as the Company's revenues are earned.
|
a) |
Diana Containerships
Inc., or Diana Containerships:
As at December 31, 2016, DSI owned 25.73% of the common stock of Diana Containerships amounting to $5,815 and included in "Investments in related parties" in the accompanying
consolidated balance sheets. As at December 31, 2017, the investment was reduced to zero following the gradual sales during the year of all Diana Containerships' common stock previously owned by the Company.
|
b) |
Diana Wilhelmsen
Management Limited, or DWM:
DWM is a joint venture which was established on May 7, 2015 by Diana Ship Management Inc., a wholly owned subsidiary of DSI, and Wilhelmsen Ship Management Holding Limited, an
unaffiliated third party, each holding 50% of DWM. As at December 31, 2017, DWM provided management services to ten vessels of the Company's fleet (Note 4(d)). The DWM office is located in Limassol, Cyprus. As at
December 31, 2017 and 2016, the investment in DWM amounted to $249 and $199, respectively, and is included in "Investments in related parties" in the accompanying consolidated balance sheets. For 2017, 2016, and 2015,
the investment in DWM resulted in gain of $49, $88, and loss of $156, respectively, included in "Loss from equity method investments" in the accompanying consolidated statements of operations.
|
(a) |
Altair Travel Agency
S.A. ("Altair"):
The Company uses the services of an affiliated travel agent, Altair, which is controlled by the Company's CEO and Chairman of the Board. Travel expenses for 2017, 2016 and 2015 amounted to
$2,096, $2,320, and $2,685, respectively, and are mainly included in "Vessels, net book value", "Advances for vessels under construction and acquisitions and other vessel costs", "Vessel operating expenses" and
"General and administrative expenses" in the accompanying consolidated financial statements. At December 31, 2017 and 2016, an amount of $162 and $23, respectively, was payable to Altair and is included in "Due to
related parties" in the accompanying consolidated balance sheets.
|
(b) |
Diana Containerships
Inc.:
On May 20, 2013, the Company entered into a five year unsecured loan of $50,000 with a subsidiary of Diana Containerships, drawn on August 20, 2013, for general corporate purposes and working capital.
The loan, initially bore interest at LIBOR plus a margin of 5% and a back-end fee equal to 1.25% per annum on the outstanding amount of the loan payable by the borrower on the repayment date of the loan. Following an
amendment on September 9, 2015, the interest was reduced to LIBOR plus a margin of 3% per annum, the back-end fee which was paid on the date of the amendment was eliminated, and a fixed fee of $200 was to be payable on
the maturity date. In addition, the borrower agreed to repay the principal amount of the loan on the last day of each interest period in amounts totalling $5,000 per annum, but not to exceed $32,500 in the aggregate.
Following another amendment on August 24, 2016, the repayment of all outstanding principal amounts was deferred until a later date, the borrower was changed to another wholly-owned subsidiary of Diana Containerships
and the interest rate of the deferral period increased to 3.35% per annum over LIBOR. On May 30, 2017, as discussed in Note 3(a), the loan was decreased by $3,000, in order to acquire the Series C Preferred Stock
issued by Diana Containerships.
|
(c) |
Diana Enterprises Inc.
renamed to Steamship Shipbroking Enterprises Inc., or Steamship:
Steamship is a company controlled by the Company's CEO and Chairman of the Board which provides brokerage services to DSI pursuant to a
Brokerage Services Agreement for a fixed fee amended annually on each anniversary of the agreement. For 2017, 2016 and 2015, brokerage fees amounted to $1,800, $1,680, and $1,302, respectively, and are included in
"General and administrative expenses" in the accompanying consolidated statements of operations. As of December 31, 2017 and 2016, there was no amount due to Steamship included in the accompanying consolidated balance
sheets.
|
(d) |
Diana Wilhelmsen
Management Limited:
As of December 31, 2017, DWM provided management services to ten vessels of the Company's fleet for a fixed monthly fee and commercial services charged as a percentage of the vessels'
gross revenues. Management fees for 2017, 2016 and 2015 amounted to $1,883, $1,464, and $405, respectively, and are separately presented as "Management fees to related party" in the accompanying consolidated statements
of operations, whereas commercial fees amounted to $260, $124, and $43, respectively, and are included in "Voyage expenses" in the accompanying consolidated statements of operations. As at December 31, 2017 and 2016
there was an amount of $109 and $2, respectively, due to DWM, included in "Due to related parties" in the accompanying consolidated balance sheets.
|
(e) |
Vessel Acquisitions:
On
February 4, 2016, the Company, through three separate wholly-owned subsidiaries, entered into three Memoranda of Agreement to acquire from a related party three Panamax vessels for an aggregate purchase price of
$39,265. The Company had agreed to acquire the vessels from entities affiliated with Mrs. Semiramis Paliou and Mrs. Aliki Paliou, each of whom is a family member of the Company's Chief Executive Officer and Chairman of
the Board. Mrs. Semiramis Paliou is also a director of the Company. The transaction was approved unanimously by a committee of the Board of Directors established for the purpose of considering the transaction and
consisting of the Company's independent directors and each of its executive directors other than Mrs. Semiramis Paliou and Mr. Simeon Palios. The agreed upon purchase price of the vessels was based, among other
factors, on independent third party broker valuations obtained by the Company. Two of the vessels were delivered in March 2016 and the third was delivered in May 2016 (Note 5).
|
|
|
Vessel Cost
|
|
|
Accumulated Depreciation
|
|
|
Net Book Value
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Balance, December 31, 2015
|
|
$
|
1,947,992
|
|
|
$
|
(507,189
|
)
|
|
$
|
1,440,803
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Acquisitions, improvements and other vessel costs
|
|
|
39,427
|
|
|
|
-
|
|
|
|
39,427
|
|
- Depreciation for the year
|
|
|
-
|
|
|
|
(76,318
|
)
|
|
|
(76,318
|
)
|
Balance, December 31, 2016
|
|
$
|
1,987,419
|
|
|
$
|
(583,507
|
)
|
|
$
|
1,403,912
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Transfer from advances for vessels under construction and acquisition and other vessel costs
|
|
|
104,858
|
|
|
|
-
|
|
|
|
104,858
|
|
- Acquisitions, improvements and other vessel costs
|
|
|
67,787
|
|
|
|
-
|
|
|
|
67,787
|
|
- Vessel disposal
|
|
|
(15,349
|
)
|
|
|
12,834
|
|
|
|
(2,515
|
)
|
- Impairment charges
|
|
|
(877,484
|
)
|
|
|
438,573
|
|
|
|
(438,911
|
)
|
- Depreciation for the year
|
|
|
-
|
|
|
|
(81,553
|
)
|
|
|
(81,553
|
)
|
Balance, December 31, 2017
|
|
$
|
1,267,231
|
|
|
$
|
(213,653
|
)
|
|
$
|
1,053,578
|
|
|
|
Property and Equipment
|
|
|
Accumulated Depreciation
|
|
|
Net Book Value
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Balance, December 31, 2015
|
|
$
|
26,365
|
|
|
$
|
(2,876
|
)
|
|
$
|
23,489
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Additions in property and equipment
|
|
|
217
|
|
|
|
-
|
|
|
|
217
|
|
- Depreciation for the year
|
|
|
-
|
|
|
|
(592
|
)
|
|
|
(592
|
)
|
Balance, December 31, 2016
|
|
$
|
26,582
|
|
|
$
|
(3,468
|
)
|
|
$
|
23,114
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Additions in property and equipment
|
|
|
104
|
|
|
|
-
|
|
|
|
104
|
|
- Depreciation for the year
|
|
|
-
|
|
|
|
(568
|
)
|
|
|
(568
|
)
|
- Disposal of assets
|
|
|
(3
|
)
|
|
|
3
|
|
|
|
-
|
|
Balance, December 31, 2017
|
|
$
|
26,683
|
|
|
$
|
(4,033
|
)
|
|
$
|
22,650
|
|
|
|
2017
|
|
|
2016
|
|
||
8.5% Senior Unsecured Notes
|
|
|
63,250
|
|
|
|
63,250
|
|
Secured Term Loans
|
|
|
541,543
|
|
|
|
539,467
|
|
Total debt outstanding
|
|
$
|
604,793
|
|
|
$
|
602,717
|
|
Less related deferred financing costs
|
|
|
(3,409
|
)
|
|
|
(4,536
|
)
|
Total debt, net of deferred financing costs
|
|
$
|
601,384
|
|
|
$
|
598,181
|
|
Less: Current portion of long term debt, net of deferred financing costs current
|
|
|
(60,763
|
)
|
|
|
(65,072
|
)
|
Long-term debt, net of current portion and deferred financing costs, non-current
|
|
$
|
540,621
|
|
|
$
|
533,109
|
|
Period
|
|
Principal Repayment
|
|
|
January 1, 2018 to December 31, 2018
|
|
$
|
62,059
|
|
January 1, 2019 to December 31, 2019
|
|
|
119,342
|
|
January 1, 2020 to December 31, 2020
|
|
|
183,132
|
|
January 1, 2021 to December 31, 2021
|
|
|
132,494
|
|
January 1, 2022 to December 31, 2022
|
|
|
72,468
|
|
January 1, 2023 and thereafter
|
|
|
35,298
|
|
Total
|
|
$
|
604,793
|
|
|
a) |
Various claims, suits, and complaints, including those involving government regulations and product liability, arise in the ordinary course
of the shipping business. In addition, losses may arise from disputes with charterers, agents, insurance and other claims with suppliers relating to the operations of the Company's vessels. The Company accrues for the
cost of environmental and other liabilities when management becomes aware that a liability is probable and is able to reasonably estimate the probable exposure.
|
|
b) |
Pursuant to the loan agreement with Diana Containerships Inc. dated June 30, 2017 (Note 4(b)), Diana Containerships is required to pay, on
the termination date of the loan, an additional $5,000 interest-bearing discount premium, which is not included in Due from related parties in the accompanying 2017 balance sheet.
|
|
c) |
As at December 31, 2017, all of the Company's vessels were fixed under time charter agreements. The minimum contractual gross charter
revenue expected to be generated from fixed and non-cancelable time charter contracts existing as at December 31, 2017 and until their expiration was as follows:
|
Period
|
|
Amount
|
|
|
Year 1
|
|
$
|
95,851
|
|
Year 2
|
|
|
10,129
|
|
Total
|
|
$
|
105,980
|
|
|
(a) |
Preferred stock
:
As at December 31, 2017 and 2016, the Company's authorized preferred stock consists of 25,000,000 shares (all in
registered form) of preferred stock, par value $0.01 per share, of which 1,000,000 are designated as Series A Participating Preferred Shares and 5,000,000 are designated as Series B Preferred Shares.
|
|
(b) |
Common Stock:
The
Company's authorized capital stock consists of 200,000,000 shares (all in registered form) of common stock, par value $0.01 per share. The holders of the common shares are entitled to one vote on all matters submitted
to a vote of stockholders and to receive all dividends, if any.
|
|
(c) |
Offering of common
shares:
On April 26, 2017, the Company issued a total 20,125,000 common shares, at a price of $4.00 per share, in a public offering. As part of the offering, entities affiliated with Simeon Palios, the
Company's Chief Executive Officer and Chairman, executive officers and certain directors, purchased an aggregate of 5,500,000 common shares at the public offering price. The net proceeds from the offering after
underwriting discounts and other offering expenses were $77,311.
|
|
(d) |
Incentive plan
:
In November 2014, the Company's board of directors approved to adopt the 2014 Equity Incentive Plan, for 5,000,000 shares, of which as at December 31, 2017, 2,924,759 remained reserved for issuance.
|
|
|
Number of Shares
|
|
|
Weighted Average Grant Date Price
|
|
||
Outstanding at December 31, 2014
|
|
|
2,491,834
|
|
|
$
|
9.30
|
|
Granted
|
|
|
1,100,000
|
|
|
|
6.91
|
|
Vested
|
|
|
(827,522
|
)
|
|
|
9.57
|
|
Outstanding at December 31, 2015
|
|
|
2,764,312
|
|
|
$
|
8.27
|
|
Granted
|
|
|
2,150,000
|
|
|
|
2.26
|
|
Vested
|
|
|
(971,646
|
)
|
|
|
8.67
|
|
Outstanding at December 31, 2016
|
|
|
3,942,666
|
|
|
$
|
4.89
|
|
Granted
|
|
|
1,310,000
|
|
|
|
3.95
|
|
Vested
|
|
|
(1,611,549
|
)
|
|
|
5.46
|
|
Outstanding at December 31, 2017
|
|
|
3,641,117
|
|
|
$
|
4.30
|
|
(e) |
Share Repurchase
Agreement:
On May 22, 2014, the Company's Board of Directors authorized a share repurchase plan for up to $100,000 worth of shares of the Company's common stock. During 2015, the Company repurchased and
retired 413,804 shares at an aggregate cost of approximately $2,673 and none during 2016 and 2017.
|
|
|
|
|
|
|
|
||||||
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Interest expense
|
|
$
|
24,978
|
|
|
$
|
19,523
|
|
|
$
|
13,922
|
|
Amortization of financing costs
|
|
|
1,455
|
|
|
|
1,503
|
|
|
|
1,364
|
|
Commitment fees and other costs
|
|
|
195
|
|
|
|
923
|
|
|
|
269
|
|
Total
|
|
$
|
26,628
|
|
|
$
|
21,949
|
|
|
$
|
15,555
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Net loss
|
|
$
|
(511,714
|
)
|
|
$
|
(164,237
|
)
|
|
$
|
(64,713
|
)
|
Less dividends on series B preferred shares
|
|
$
|
(5,769
|
)
|
|
$
|
(5,769
|
)
|
|
$
|
(5,769
|
)
|
Net loss attributed to common stockholders
|
|
|
(517,483
|
)
|
|
|
(170,006
|
)
|
|
|
(70,482
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares, basic and diluted
|
|
|
95,731,093
|
|
|
|
80,441,517
|
|
|
|
79,518,009
|
|
Loss per share, basic and diluted
|
|
$
|
(5.41
|
)
|
|
$
|
(2.11
|
)
|
|
$
|
(0.89
|
)
|
|
a) |
Series B Preferred Stock
Dividends:
On January 16, 2018, the Company paid a dividend on its series B preferred stock, amounting to $0.5546875 per share, or $1,442, to its stockholders of record as of January 12, 2018.
|
|
b) |
Annual Incentive Bonus
:
On February 21, 2018 the Company's Board of Directors approved the grant of 1,800,000 shares of restricted common stock awards to executive management and non-executive directors, pursuant to the Company's 2014 equity
incentive plan. The fair value of the restricted shares based on the closing price on the date of the Board of Directors' approval was about $6,876 and will be recognized in income ratably over the restricted shares
vesting period which will be 3 years.
|
|
c) |
Loan Prepayment
:
On March 12, 2018 the Company received an amount of $8,379 as partial prepayment under the loan with Diana Containerships, decreasing the loan receivable to $74,238 (Note 4(b)).
|
$19,000,0000
Secured Loan Agreement |
|
Dated
March 2019
|
|
(1)
|
Erikub Shipping Company Inc.
Wotho Shipping Company Inc. (as Borrowers) |
(2)
|
Diana Shipping Inc.
(as Original Guarantor) |
(3)
|
The Financial Institutions
listed in Schedule 1 (as Original Lenders) |
(4)
|
DNB Bank ASA
(as Arranger) |
(5)
|
DNB Bank ASA
(as Agent) |
(6)
|
DNB Bank ASA
(as Swap Provider) |
(7)
|
DNB Bank ASA
(as Security Agent) |
20
|
Representations
|
57
|
21
|
Information Undertakings
|
63
|
22
|
Financial Covenants
|
66
|
23
|
General Undertakings
|
68
|
24
|
Events of Default
|
75
|
Section 9
|
Changes to Parties
|
81
|
25
|
Changes to the Lenders
|
81
|
26
|
Changes to the Obligors
|
87
|
Section 10
|
The Finance Parties
|
89
|
27
|
Role of the Agent, the Security Agent and the Arranger
|
89
|
28
|
Application of Proceeds
|
101
|
29
|
Conduct of Business by the Finance Parties
|
102
|
30
|
Sharing among the Finance Parties
|
102
|
Section 11
|
Administration
|
105
|
31
|
Payment Mechanics
|
105
|
32
|
Set-Off
|
108
|
33
|
Notices
|
108
|
34
|
Calculations and Certificates
|
111
|
35
|
Partial Invalidity
|
112
|
36
|
Remedies and Waivers
|
112
|
37
|
Amendments and Waivers
|
112
|
38
|
Confidentiality
|
119
|
39
|
Disclosure of Lender Details by Agent
|
123
|
40
|
Counterparts
|
124
|
41
|
Joint and Several Liability
|
124
|
Section 12
|
Governing Law and Enforcement
|
126
|
42
|
Governing Law
|
126
|
(1) |
Erikub Shipping Company Inc.
("
Erikub
"), a company incorporated under the law of the Republic of the Marshall Islands, with its registered address at Trust Company
Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960;
Wotho Shipping Company Inc.
("
Wotho
"), a company incorporated under the law of the Republic of the Marshall Islands with its registered address at Trust Company Complex, Ajeltake
Road, Ajeltake Island, Majuro, Marshall Islands MH 96960; (together the
"
Borrowers
" and each a "
Borrower
") jointly and severally; and
|
(2) |
Diana Shipping Inc.
, a company incorporated under the
law of the Republic of the Marshall Islands, with its registered address at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 (the
"
Original Guarantor
"); and
|
(3) |
The Financial Institutions
listed in Schedule 1 (
The Original Lenders
), each acting through its Facility Office (together the "
Original Lenders
" and each an "
Original Lender
"); and
|
(4) |
DNB Bank ASA
, acting as mandated lead arranger and
bookrunner through its office at 8th floor, The Walbrook Building, 25 Walbrook, London EC4N 8AF, England (in that capacity, the "
Arranger
");
and
|
(5) |
DNB Bank ASA
, acting as agent through its office at
The Walbrook Building, 25 Walbrook, London EC4N 8AF, England (in that capacity, the "
Agent
"); and
|
(6) |
DNB Bank ASA
, acting as swap provider through its
office at The Walbrook Building, 25 Walbrook, London EC4N 8AF, England (in that capacity, the "
Swap Provider
"); and
|
(7) |
DNB Bank ASA
, acting as security agent through its
office at The Walbrook Building, 25 Walbrook, London EC4N 8AF, England (in that capacity, the "
Security Agent
").
|
(A) |
Each Borrower is the registered owner of the relevant Vessel.
|
(B) |
Each Original Lender has agreed to advance to the Borrowers on a joint and several basis its Commitment (aggregating, with all the other Commitments, up to
$19,000,000) to provide the Borrowers with working capital.
|
Section 1 |
Interpretation
|
1. |
Definitions and Interpretation
|
1.1 |
Definitions
In this Agreement:
|
|
(a) |
the interest which a Lender should have received for the period from the date of receipt of all or any part of its participation in the Loan or an Unpaid
Sum to the last day of the current Interest Period in respect of the Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period;
|
|
(b) |
the amount which that Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a
leading bank for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period.
|
|
(a) |
in relation to an Original Lender, the amount set opposite its name under the heading "Commitment" in Schedule 1 (
The Original Lenders
) and the amount of any other Commitment transferred to it under this Agreement; and
|
|
(b) |
in relation to any other Lender, the amount of any Commitment transferred to it under this Agreement,
|
|
(a) |
any Obligor , any other member of the Group or any of its advisers; or
|
|
(b) |
another Finance Party, if the information was obtained by that Finance Party directly or indirectly from any Obligor , any other member of the Group or any
of its advisers,
|
|
(i) |
is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of Clause 38 (
Confidentiality
); or
|
|
(ii) |
is identified in writing at the time of delivery as non-confidential by any Obligor, any other member of the Group or any of its advisers; or
|
|
(iii) |
is known by that Finance Party before the date the information is disclosed to it in accordance with (a) or (b) 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 any Obligor or any other member of 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.
|
|
(a) |
which has failed to make its participation in a Vessel Loan available (or has notified the Agent or the Borrowers (which have notified the Agent) that it
will not make its participation in a Vessel Loan available) by the Utilisation Date of that Vessel Loan in accordance with Clause 5.3 (
Lenders'
participation
); or
|
|
(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 Loan (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) |
any release, emission, spill or discharge into or upon the air, sea, land or soils (including the seabed) or surface water of Environmentally Sensitive
Material within or from a Vessel; or
|
|
(b) |
any incident in which Environmentally Sensitive Material is released, emitted, spilled or discharged into or upon the air, sea, land or soils (including the
seabed) or surface water from a vessel other than a Vessel and which involves a collision between a Vessel and such other vessel or some other incident of navigation or operation, in either case, in connection with which a Vessel is
actually or potentially liable to be arrested, attached, detained or injuncted and a Vessel, any Obligor, any operator or manager of a Vessel or any combination of them is at fault or allegedly at fault or otherwise liable to any
legal or administrative action; or
|
|
(c) |
any other incident in which Environmentally Sensitive Material is released, emitted, spilled or discharged into or upon the air, sea, land or soils
(including the seabed) or surface water otherwise than from a Vessel and in connection with which a Vessel is actually or potentially liable to be arrested and/or where any Obligor and/or any operator or manager of a Vessel is at
|
|
(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.
|
|
(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 (a); or
|
|
(c) |
any agreement pursuant to the implementation of any treaty, law or regulation referred to in (a) or (b) 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; or
|
|
(b) |
in relation to a "passthru payment" described in section 1471(d)(7) of the Code not falling within (a), the first date from which such payment may become
subject to a deduction or withholding required by FATCA.
|
|
(a) |
moneys borrowed and debit balances at banks or other financial institutions;
|
|
(b) |
any acceptance under any acceptance credit or bill discounting facility (or dematerialised equivalent);
|
|
(c) |
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, a liability under which would, in accordance with GAAP, be treated as a
balance sheet liability;
|
|
(e) |
receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);
|
|
(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, bond, standby or documentary letter of credit or any other instrument issued by a bank or
financial institution in respect of (i) an underlying liability of an entity which
|
|
(h) |
any amount raised by the issue of shares which are redeemable (other than at the option of the issuer) before the end of the Facility Period 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 30 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) 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 (a) to (j).
|
|
(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 (d) and:
|
|
(i) |
results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up or liquidation; or
|
|
(ii) |
is not dismissed, discharged, stayed or restrained in each case within 30 days of the institution or presentation thereof;
|
|
(f) |
has exercised in respect of it one or more of the stabilisation powers pursuant to Part 1 of the Banking Act 2009 and/or has instituted against it a bank
insolvency proceeding pursuant to Part 2 of the Banking Act 2009 or a bank administration proceeding pursuant to Part 3 of the Banking Act 2009;
|
|
(g) |
has a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger);
|
|
(h) |
seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official
for it or for all or substantially all its assets (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
(d));
|
|
(i) |
has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process
levied, enforced or sued on or against all or substantially all its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within 30 days thereafter;
|
|
(j) |
causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events
specified in (a) to (i); or
|
|
(k) |
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 Interest Period of that Vessel Loan; and
|
|
(b) |
the applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds the Interest Period of that Vessel Loan,
|
|
(a) |
the principle that equitable remedies may be granted or refused at the discretion of a court and the limitation of enforcement by laws relating to
insolvency, reorganisation and other laws generally affecting the rights of creditors;
|
|
(b) |
the time barring of claims under the Limitation Acts, the possibility that an undertaking to assume liability for or indemnify a person against non-payment
of UK stamp duty may be void and defences of set-off or counterclaim;
|
|
(c) |
similar principles, rights and defences under the laws of any Relevant Jurisdiction; and
|
|
(d) |
any other matters which are set out as qualifications or reservations as to matters of law of general application in the Legal Opinions.
|
|
(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 25 (
Changes to the Lenders
),
|
|
(a) |
the applicable Screen Rate; or
|
|
(b) |
(if no Screen Rate is available for the relevant Interest Period) the Interpolated Screen Rate for that Vessel Loan; or
|
|
(c) |
(if (i) no Screen Rate is available for the currency of that Vessel Loan or (ii) no Screen Rate is available for the relevant Interest Period and it is not
possible to calculate the Interpolated Screen Rate for that Vessel Loan)) the Reference Bank Rate,
|
|
(a) |
they will remain the commercial or technical managers of the Vessels (as the case may be); and
|
|
(b) |
they will not, without the prior written consent of the Agent, subcontract or delegate the commercial or technical management of the Vessels (as the case
may be) to any third party; and
|
|
(c) |
the interests of the Managers in the Insurances will be assigned to the Security Agent with first priority; and
|
|
(d) |
(following the occurrence of an Event of Default) all claims of the Managers against the Borrowers shall be subordinated to the claims of the Finance
Parties under the Finance Documents.
|
|
(a) |
the business, operations, property, condition (financial or otherwise) or prospects of any Obligor or the Group taken as a whole; or
|
|
(b) |
the ability of any Obligor to perform its obligations under any Finance Document; or
|
|
(c) |
the validity or enforceability of, or the effectiveness or ranking of any Encumbrance 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) |
(subject to (c) below) if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in
which that period is to end if there is one, or if there is not, on the immediately preceding Business Day;
|
|
(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) |
of trading stock or cash made by any Obligor in the ordinary course of trading of the disposing entity;
|
|
(b) |
of any asset by any Obligor or any other member of the Group (the "
Disposing Company
") to any other Obligor or any other member of the Group (the "
Acquiring Company
"), but if:
|
|
(i) |
the Disposing Company is an Obligor, the Acquiring Company must also be an Obligor;
|
|
(ii) |
the Disposing Company had given any Encumbrance over the asset, the Acquiring Company must give an equivalent Encumbrance over that asset; and
|
|
(iii) |
the Disposing Company is a Guarantor, the Acquiring Company must guarantee at all times an amount no less than that guaranteed by the Disposing Company;
|
|
(c) |
of assets in exchange for other assets comparable or superior as to type, value and quality (other than an exchange of a non-cash asset for cash);
|
|
(d) |
of obsolete or redundant vehicles, plant and equipment for cash; and
|
|
(e) |
arising as a result of any Permitted Encumbrance.
|
|
(a) |
any Encumbrance which has been disclosed to the Agent prior to the date of this Agreement and which has the prior written approval of the Agent;
|
|
(b) |
any Encumbrance in favour of a Finance Party created pursuant to the Finance Documents
|
|
(c) |
any Encumbrance arising by operation of law and in the ordinary course of trading and not as a result of any default or omission by an Obligor or any other
member of the Group which has not been discharged within 30 days of its creation;
|
|
(d) |
any Quasi-Security arising as a result of a disposal which is a Permitted Disposal.
|
|
(a) |
in relation to LIBOR as either:
|
|
(iv) |
if:
|
|
(A) |
the Reference Bank is a contributor to the applicable Screen Rate; and
|
|
(B) |
it consists of a single figure,
|
|
(v) |
in any other case, the rate at which the relevant Reference Bank could fund itself in the relevant currency for the relevant period with reference to the
unsecured wholesale funding market.
|
|
(a) |
the Obligors and each of their Subsidiaries and each member of the Group; and
|
|
(b) |
each of their directors, officers, employees, agents and representatives.
|
|
(a) |
its Original Jurisdiction;
|
|
(b) |
any jurisdiction where any asset subject to or intended to be subject to a Security Document to be executed by it is situated;
|
|
(c) |
any jurisdiction where it conducts its business; and
|
|
(d) |
the jurisdiction whose laws govern the perfection of any of the Security Documents entered into by it.
|
|
(a) |
listed on any Sanctions List or targeted by Sanctions (whether designated by name or by reason of being included in a class of person); or
|
|
(b) |
located in or incorporated under the laws of any country or territory that is the target of comprehensive, country- or territory-wide Sanctions; or
|
|
(c) |
directly or indirectly owned or controlled by, or acting on behalf, at the direction or for the benefit of, a person referred to in (a) and/or (to the
extent relevant under Sanctions) (b) above.
|
|
(a) |
the lists of Sanctions designations and/or targets maintained by any Sanctions Authority and/or
|
|
(b) |
any other Sanctions designation or target listed and/or adopted by a Sanctions Authority,
|
|
(a) |
an actual, constructive, arranged, agreed or compromised total loss of a Vessel; or
|
|
(b) |
the requisition for title or compulsory acquisition of a Vessel by any government or other competent authority (other than by way of requisition for hire);
or
|
|
(c) |
the capture, seizure, arrest, detention, hijacking, theft, condemnation as prize, confiscation or forfeiture of a Vessel (not falling within (b)), unless
that Vessel is released and returned to the possession of the relevant Borrower or a Charterer (if the Charter is a bareboat Charter) within 30 days after the capture, seizure, arrest, detention, hijacking, theft, condemnation as
prize, confiscation or forfeiture in question.
|
|
(a) |
the proposed Transfer Date specified in the relevant Assignment Agreement or Transfer Certificate; and
|
|
(b) |
the date on which the Agent executes the relevant Assignment Agreement or Transfer Certificate.
|
|
(a) |
all benefits derived by the Security Agent from Clause 17 (
Accounts
and Application of Earnings
); and
|
|
(b) |
all benefits arising under (including, without limitation, all proceeds of the enforcement of) each of the Security Documents,
|
|
(a) |
an Obligor 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 (a), or imposed elsewhere.
|
1.2 |
Construction
Unless a contrary indication appears,
any reference in this Agreement to:
|
|
1.2.1 |
any "
Lender
", any "
Borrower
", any "
Guarantor
", the "
Arranger
", the "
Agent
", the "
Swap Provider
", any "
Secured Party
",
the "
Security Agent
", any "
Finance
Party
" or any "
Party
" shall be construed so as to include its successors in title, permitted assignees and permitted
transferees to, or of, its rights and/or obligations under the Finance Documents;
|
|
1.2.2 |
"
assets
" includes present and future properties,
revenues and rights of every description;
|
|
1.2.3 |
a "
Finance Document
", a "
Security Document
", a "
Relevant Document
" or any
other agreement or instrument is a reference to that Finance Document, Security Document, Relevant Document or other agreement or instrument as amended, novated, supplemented, extended or restated from time to time;
|
|
1.2.4 |
a "
group of Lenders
" includes all the Lenders;
|
|
1.2.5 |
"
guarantee
" means (other than in Clause 19 (
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;
|
|
1.2.6 |
"
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;
|
|
1.2.7 |
a "
person
" includes any individual, firm, company,
corporation, government, state or agency of a state or any association, trust, joint venture, consortium, partnership or other entity (whether or not having separate legal personality);
|
|
1.2.8 |
a "
regulation
" includes any regulation, rule,
official directive, request or guideline (whether or not having the force of law) of any governmental, intergovernmental or supranational body, agency, department or of any regulatory, self-regulatory or other authority or
organisation;
|
|
1.2.9 |
a provision of law is a reference to that provision as amended or re-enacted from time to time;
|
|
1.2.10 |
a time of day is a reference to London time; and
|
|
1.2.11 |
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.
|
1.3 |
Headings
Section, Clause and Schedule headings are
for ease of reference only.
|
1.4 |
Defined terms
Unless a contrary indication appears,
a term used in any other Finance Document or in any notice given under or in connection with any Finance Document has the same meaning in that Finance Document or notice as in this Agreement.
|
1.5 |
Default
A Default (other than an Event of Default)
is "continuing" if it has not been remedied or waived and an Event of Default is "continuing" if it has not been waived.
|
1.6 |
Currency symbols and definitions
"
$
", "
USD
"
and "
dollars
" denote the lawful currency of the
United States of America.
|
1.7 |
Third party rights
|
|
1.7.1 |
Unless expressly provided to the contrary in a Finance Document a person who is not a Party has no right under the Contracts (Rights of Third Parties) Act
1999 (the "
Third Parties Act
") to enforce or to enjoy the benefit of any term of this Agreement.
|
|
1.7.2 |
Notwithstanding any term of any Finance Document, the consent of any person who is not a Party is not required to rescind or vary this Agreement at any
time.
|
1.8 |
Offer letter
This Agreement supersedes the terms
and conditions contained in any correspondence relating to the subject matter of this Agreement exchanged between any Finance Party and the Borrowers or their representatives before the date of this Agreement.
|
1.9 |
Contractual recognition of bail-in
|
|
1.9.1 |
In this Clause 1.9:
|
|
(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) |
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
|
|
(ii) |
any similar or analogous powers under that Bail-In Legislation.
|
|
1.9.2 |
Notwithstanding any other term of any Finance Document or any other agreement, arrangement or understanding between the Parties, each Party acknowledges and
accepts that any liability of any Party to any other Party under or in connection with the Finance Documents may be subject to Bail-In Action by the relevant Resolution Authority and acknowledges and accepts to be bound by the effect
of:
|
|
(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.
|
Section 2 |
The Loan
|
2. |
The Loan
|
2.1 |
Amount
Subject to the terms of this Agreement, the
Lenders agree to make available to the Borrowers on a joint and several basis a term loan comprising all the Vessel Loans and not exceeding in aggregate the Maximum Loan Amount.
|
2.2 |
Finance Parties' rights and obligations
|
|
2.2.1 |
The obligations of each Finance Party under the Finance Documents are several. Failure by a Finance Party to perform its obligations under the Finance
Documents does not affect the obligations of any other Party under the Finance Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents.
|
|
2.2.2 |
The rights of each Finance Party under or in connection with the Finance Documents are separate and independent rights and any debt arising under the
Finance Documents to a Finance Party from an Obligor is a separate and independent debt in respect of which a Finance Party shall be entitled to enforce its rights in accordance with Clause 2.2.3. The rights of each Finance Party
include any debt owing to that Finance Party under the Finance Documents and, for the avoidance of doubt, any part of the Loan or any other amount owed by an Obligor which relates to a Finance Party's participation in the Loan or its
role under a Finance Document (including any such amount payable to the Agent on its behalf) is a debt owing to that Finance Party by that Obligor.
|
|
2.2.3 |
A Finance Party may, except as specifically provided in the Finance Documents, separately enforce its rights under or in connection with the Finance
Documents.
|
3. |
Purpose
|
3.1 |
Purpose
The Borrowers shall apply the Loan for the
purposes referred to in Preliminary (B).
|
3.2 |
Monitoring
No Finance Party is bound to monitor or
verify the application of any amount borrowed pursuant to this Agreement.
|
4. |
Conditions of Utilisation
|
4.1 |
Initial conditions precedent
|
|
4.1.1 |
The Lenders will only be obliged to comply with Clause 5.3 (
Lenders'
participation
) in relation to the advance of a Vessel Loan if, on or before the relevant Utilisation Date, the Agent has received all of the documents and other evidence listed in Part I of Schedule 2 (
Conditions Precedent
) in form and substance satisfactory to the Agent, save that references in Section 2 of that Part I to "the Vessel" or to any person
or document relating to a Vessel shall be deemed to relate solely to the Vessel specified in the relevant Utilisation Request or to any person or document relating to that Vessel
|
|
4.1.2 |
Other than to the extent that the Majority Lenders notify the Agent in writing to the contrary before the Agent gives the notification described in Clause
4.1.1, the Lenders authorise (but do not require) the Agent to give that notification. The Agent shall not be liable for any damages, costs or losses whatsoever as a result of giving any such notification.
|
4.2 |
Further conditions precedent
|
|
4.2.1 |
The Lenders will only be obliged to advance a Vessel Loan if on the date of the relevant Utilisation Request and on the proposed Utilisation Date:
|
|
(a) |
no Default is continuing or would result from the advance of that Vessel Loan; and
|
|
(b) |
the representations made by each Borrower and each Guarantor under Clause 20 (
Representations
) are true; and
|
|
(c) |
no event or series of event has occurred which is likely to have a Material Adverse Effect
|
|
4.2.2 |
The Lenders will only be obliged to advance a Vessel Loan if that Vessel Loan will not amount to more than 65% of the Market Value of the relevant Vessel
nor increase the Loan to a sum in excess of the Maximum Loan Amount nor result in more than 50% of the Maximum Loan Amount being advanced for any one Vessel.
|
4.3 |
Conditions subsequent
The Borrowers undertake to
deliver or to cause to be delivered to the Agent within 10 days after each Utilisation Date the additional documents and other evidence listed in Part II of Schedule 2 (
Conditions Subsequent
), save that references in that Part II to "the Vessel" or to any person or document relating to a Vessel shall be deemed to relate solely to the Vessel specified in the
relevant Utilisation Request or to any person or document relating to that Vessel respectively.
|
4.4 |
No waiver
If the Lenders agree to advance a Vessel
Loan to the Borrowers before all of the documents and evidence required by Clause 4.1 (
Initial conditions precedent
) have been
delivered to or to the order of the Agent, the Borrowers undertake to deliver all outstanding documents and evidence to or to the order of the Agent no later than 30 days after the relevant Utilisation Date or such other date
specified by the Agent (acting on the instructions of all the Lenders).
|
4.5 |
Form and content
All documents and evidence
delivered to the Agent under this Clause shall:
|
|
4.5.1 |
be in form and substance acceptable to the Agent; and
|
|
4.5.2 |
if required by the Agent, be certified, notarised, legalised or attested in a manner acceptable to the Agent.
|
Section 3 |
Utilisation
|
5. |
Advance
|
5.1 |
Delivery of a Utilisation Request
The Borrowers
may request a Vessel Loan to be advanced by delivery to the Agent of a duly completed Utilisation Request not more than ten and not fewer than three Business Days before the proposed Utilisation Date.
|
5.2 |
Completion of a Utilisation Request
A Utilisation
Request is irrevocable and will not be regarded as having been duly completed unless:
|
|
5.2.1 |
it is signed by an authorised signatory of each Borrower;
|
|
5.2.2 |
the proposed Utilisation Date is a Business Day within the Availability Period; and
|
|
5.2.3 |
the proposed Interest Period complies with Clause 9 (
Interest
Periods
).
|
5.3 |
Lenders' participation
|
|
5.3.1 |
Subject to Clauses 2 (
The Loan
), 3 (
Purpose
) and 4 (
Conditions of
Utilisation
), each Lender shall make its participation in any Vessel Loan available by the relevant Utilisation Date through its Facility Office.
|
|
5.3.2 |
The amount of each Lender's participation in any Vessel Loan will be equal to the proportion borne by its Commitment to the Total Commitments.
|
5.4 |
Cancellation of Commitment
The Total Commitments
shall be cancelled at the end of the Availability Period to the extent that they are unutilised at that time.
|
Section 4 |
Repayment, Prepayment and Cancellation
|
6. |
Repayment
|
6.1 |
Repayment of each Vessel Loan
The Borrowers shall
repay each Vessel Loan to the Agent for the account of the Lenders by 20 consecutive quarterly instalments the first 19 such instalments for each Vessel Loan shall each be in the sum of $238,640 and the final such instalments in the
sum of $4,965,840 (comprising an instalment of $238,640 and a balloon amount of $4,727,200), the first instalment for each Vessel Loan falling due on the date which is three Months after the Utilisation Date in respect of that Vessel
Loan and subsequent instalments falling due at consecutive intervals of three Months thereafter and with the final repayment instalment for each Vessel Loan falling due on the Termination Date.
|
6.2 |
Reduction of Repayment Instalments
If the aggregate
amount advanced to the Borrowers in respect of a Vessel Loan is less than $9,500,000, the amount of each Repayment Instalment in respect of that Vessel Loan shall be reduced pro rata to the amount actually advanced.
|
6.3 |
Reborrowing
The Borrowers may not reborrow any part
of a Vessel Loan which is repaid.
|
6.4 |
Termination Date
On the Termination Date the
Borrowers shall pay to the Finance Parties any and all outstanding sums of any nature (together with all accrued and unpaid interest on any of those sums) payable to any of the Finance Parties under all or any of the Finance
Documents.
|
7. |
Illegality, Prepayment and Cancellation
|
7.1 |
Illegality
If in any applicable jurisdiction it
becomes unlawful (other than by reason of Sanctions) for a Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain its participation in the Loan or it becomes unlawful for any Affiliate of a
Lender for that Lender to do so or any act or omission by an Obligor (or another Relevant Person) causes a breach of Sanctions by a Finance Party:
|
|
7.1.1 |
that Lender shall promptly notify the Agent upon becoming aware of that event;
|
|
7.1.2 |
upon the Agent notifying the Borrowers, the Commitment of that Lender will be immediately cancelled; and
|
|
7.1.3 |
to the extent that the Lender's participation has not been transferred pursuant to Clause 37.4 (
Replacement of Lender
), the Borrowers shall repay that Lender's participation in each Vessel Loan on the last day of its current Interest Period or, if earlier, the date specified by
that Lender in the notice delivered to the Agent (being no earlier than the last day of any applicable grace period permitted by law).
|
7.2 |
Voluntary cancellation
The Borrowers may, if they
give the Agent not less than 5 Business Days' (or such shorter period as the Majority Lenders may agree) prior
|
7.3 |
Voluntary prepayment of a Vessel Loan
The Borrowers
may prepay the whole or any part of a Vessel Loan (but, if in part, being an amount that reduces that Vessel Loan by an amount which is an integral multiple of $238,640) subject as follows:
|
|
7.3.1 |
they give the Agent not less than 5 Business Days' (or such shorter period as the Majority Lenders may agree) prior notice;
|
|
7.3.2 |
a Vessel Loan may only be prepaid after the last day of the Availability Period; and
|
|
7.3.3 |
any prepayment under this Clause 7.3 shall be applied in prepayment of the remaining Repayment Instalments in respect of that Vessel Loan on a pro rata
basis.
|
7.4 |
Right of cancellation and prepayment in relation to a single Lender
|
|
7.4.1 |
If:
|
|
(a) |
any sum payable to any Lender by the Borrowers is required to be increased under Clause 12.2.2 (
Tax gross-up
); or
|
|
(b) |
any Lender claims indemnification from the Borrowers under Clause 12.3 (
Tax indemnity
) or Clause 13.1 (
Increased costs
),
|
|
7.4.2 |
On receipt of a notice referred to in Clause 7.4.1 in relation to a Lender, the Commitment(s) of that Lender shall immediately be reduced to zero.
|
|
7.4.3 |
On the last day of the Interest Period in respect of each Vessel Loan which ends after the Borrowers have given notice under Clause 7.4.1 in relation to a
Lender (or, if earlier, the date specified by the Borrowers in that notice), the Borrowers shall repay that Lender's participation in that Vessel Loan together with all interest and other amounts accrued under the Finance Documents.
|
7.5 |
Mandatory prepayment on sale or Total Loss
|
|
7.5.1 |
If a Vessel is sold by a Borrower or becomes a Total Loss, the Borrowers shall, simultaneously with any such sale or on the earlier of the date falling 120
days after any such Total Loss and the date on which the proceeds of any such Total Loss are realised, prepay the Loan in an amount
not less than the
relevant Mandatory Prepayment Amount and any prepayment under this Clause 7.5 shall be applied (a) first in prepayment of the remaining Repayment Instalments (including the relevant Balloon) in respect of that Vessel Loan in inverse
orde
r of maturity and (b) second against the remaining Vessel Loan in prepayment of the remaining Repayment Instalments (including the relevant Balloon) in
|
|
7.5.2 |
For the purposes of Clause 7.5.1, the Market Value shall be determined by valuations not older than 30 days prior to the date of prepayment under Clause
7.5.1 (
Mandatory prepayment on sale or Total Loss
).
|
|
7.5.3 |
For the purpose of Clause 7.5, "
Mandatory Prepayment Amount
"
means, in respect of a Vessel, an amount equal to the greater of:
|
|
(a) |
whole of the Vessel Loan in respect of that Vessel then outstanding; and
|
|
(b) |
an amount equal to the Market Value of the relevant Vessel divided by the aggregate Market Value of both Vessels and multiplied by the amount of the Loan
outstanding at the time of such sale or Total Loss.
|
7.6 |
Right of cancellation in relation to a Defaulting Lender
If any Lender becomes a Defaulting Lender, the Borrowers may, at any time while the Lender continues to be a Defaulting Lender, give the Agent 5 Business Days' notice of cancellation of the Commitment of that Lender. On that notice
becoming effective, the Commitment of the Defaulting Lender shall immediately be reduced to zero. The Agent shall as soon as practicable after receipt of that notice notify all the Lenders.
|
7.7 |
Restrictions
Any notice of prepayment or
cancellation given under this Clause 7 shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date or dates upon which the relevant prepayment or cancellation is to be made and the amount
of that prepayment or cancellation.
|
Section 5 |
Costs of Utilisation
|
8. |
Interest
|
8.1 |
Calculation of interest
The rate of interest on
each Vessel Loan for each Interest Period is the percentage rate per annum which is the aggregate of the applicable:
|
|
8.1.1 |
Margin; and
|
|
8.1.2 |
LIBOR.
|
8.2 |
Payment of interest
The Borrowers shall pay accrued
interest on each Vessel Loan on the last day of each Interest Period (and, if the Interest Period is longer than three Months, on the dates falling at intervals of three Months after the first day of the Interest Period).
|
8.3 |
Default interest
|
|
8.3.1 |
If a Borrower or a Guarantor fails to pay any amount payable by it under a Finance Document on its due date, interest shall accrue on the overdue amount
from the due date up to the date of actual payment (both before and after judgment) at a rate which is two per cent per annum higher than the rate which would have been payable if the overdue amount had, during the period of
non-payment, constituted a Vessel Loan in the currency of the overdue amount for successive Interest Periods, each of a duration selected by the Agent (acting reasonably).
|
|
8.3.2 |
If an Event of Default occurs (other than under Clause 24.1.1 (
Non-payment
)) interest shall accrue on the Loan, for the period during which such Event of Default is continuing (before and after judgement) at a rate which is two percent per annum higher than the interest which is
payable on the Loan for successive Interest Periods each of a duration selected by the Agent (acting reasonably).
|
|
8.3.3 |
Default interest (if unpaid) arising on an overdue amount will be compounded with the overdue amount at the end of each Interest Period applicable to that
overdue amount but will remain immediately due and payable. Any interest accruing under this Clause 8.3 shall be immediately payable by the Borrower or the Guarantor on demand by the Agent.
|
8.4 |
Notification of rates of interest
The Agent shall
promptly notify the Borrowers of the determination of a rate of interest under this Agreement.
|
8.5 |
Interest rate hedging
Subject to the Master
Agreement having been entered into between the Borrowers and the Swap Provider, the Borrowers may enter into one or more interest rate swaps, as approved by the Swap Provider, in order to fix the interest rate of the Loan for a period
longer than twelve (12) months, PROVIDED THAT interest shall accrue and be due and payable on a quarterly basis and FURTHER PROVIDED THAT payment of the accrued interest for the last Interest Period does not exceed the Termination
Date.
|
9. |
Interest Periods
|
9.1 |
Selection of Interest Periods
The Borrowers may
select in a written notice to the Agent the duration of an Interest Period for each Vessel Loan subject as follows:
|
|
9.1.1 |
each notice is irrevocable and must be delivered to the Agent by the Borrowers not later than 11.00 a.m. on the Quotation Day;
|
|
9.1.2 |
if the Borrowers fail to give a notice in accordance with Clause 9.1.1, the relevant Interest Period will, subject to Clauses 9.2 (
Interest Periods to meet Repayment Dates
) and 9.3 (
Non-Business
Days
), be three Months;
|
|
9.1.3 |
subject to this Clause 9, the Borrowers may select an Interest Period of three or six or twelve Months or any other period agreed between the Borrowers and
the Agent (acting on the instructions of all the Lenders);
|
|
9.1.4 |
an Interest Period shall not extend beyond the Termination Date; and
|
|
9.1.5 |
each Interest Period shall start on the Utilisation Date of the Vessel Loan or (if the Vessel Loan is already advanced) on the last day of the preceding
Interest Period and end on the date which numerically corresponds to the Utilisation Date of the Vessel Loan or the last day of the preceding Interest Period in the relevant Month.
|
9.2 |
Interest Periods to meet Repayment Dates
If an
Interest Period will expire after the next Repayment Date in respect of the relevant Vessel Loan, there shall be a separate Interest Period for a part of that Vessel Loan equal to the Repayment Instalment due on that next Repayment
Date and that separate Interest Period shall expire on that next Repayment Date.
|
9.3 |
Non-Business Days
If an Interest Period would
otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).
|
10. |
Changes to the Calculation of Interest
|
10.1 |
Calculation of Reference Bank Rate
|
|
10.1.1 |
Subject to Clause 10.1.2, if LIBOR is to be determined by reference to a Reference Bank Rate but a Reference Bank does not supply a quotation by 11.00 am
on the Quotation Day, the Reference Bank Rate shall be calculated on the basis of the quotations of the remaining Reference Banks.
|
|
10.1.2 |
If at or about noon on the Quotation Day for the relevant Interest Period LIBOR is to be determined by reference to the Reference Bank Rate and none or
only one of the Reference Banks supplies a rate to the Agent to determine LIBOR for dollars, Clause 10.3 (
Cost of funds
) shall
apply to the relevant Vessel Loan for the relevant Interest Period.
|
10.2 |
Market disruption
If before close of business in
London on the Quotation Day for the relevant Interest Period, the Agent receives notifications from a Lender or Lenders (whose participations in the relevant
|
10.3 |
Cost of funds
|
|
10.3.1 |
If this Clause 10.3 applies for any Interest Period, then the rate of interest on each Lender's share of the relevant Vessel Loan for that Interest Period
shall be the percentage rate per annum which is the sum of:
|
|
(a) |
the Margin; and
|
|
(b) |
the rate notified to the Agent by that Lender as soon as practicable, and in any event by close of business on the date falling three Business Days after
the Quotation Day (or, if earlier, on the date falling three Business Days prior to 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 that Lender of funding its participation in the relevant Vessel Loan from whatever source it may reasonably select.
|
|
10.3.2 |
If this Clause 10.3 applies and the Agent or the Borrowers so require, the Agent and the Borrowers 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.
|
|
10.3.3 |
Any alternative basis agreed pursuant to Clause 10.3.1 shall, with the prior consent of all the Lenders and the Borrowers, be binding on all Parties.
|
|
10.3.4 |
If an alternative basis is not agreed pursuant to Clause 10.3.1, the Borrowers will immediately prepay the relevant Commitment together with Break Costs and
the remaining Repayment Instalments in respect of the relevant Vessel Loan shall be reduced pro rata.
|
10.4 |
Break Costs
The Borrowers shall, within three
Business Days of demand by a Finance Party, pay to that Finance Party its Break Costs attributable to all or any part of a Vessel Loan or Unpaid Sum being paid by the Borrowers on a day other than the last day of an Interest Period
for that Vessel Loan or Unpaid Sum.
|
11. |
Fees
|
11.1 |
Commitment Fee
If the Lenders agree to extend the
Availability Period to a date that falls after 20 March 2019 for reasons attributable to the Obligors, the Borrowers shall pay to the Agent (for the account of the Lenders in proportion to their Commitments) a fee computed at the rate
of 0.2 per cent per annum on the undrawn amount of the Loan for the period commencing on 20 March 2019 and ending on the earlier of the Utilisation Date and the last day of the Availability Period (as extended by the Lenders).
|
11.2 |
Arrangement fee
The Borrowers shall pay to the
Arranger an arrangement fee in the amount and at the times agreed in the Fee Letter.
|
Section 6 |
Additional Payment Obligations
|
12. |
Tax Gross Up and Indemnities
|
12.1 |
Definitions
In this Agreement:
|
|
(a) |
where it relates to a Treaty Lender that is an Original Lender, contains the scheme reference number and jurisdiction of tax residence stated opposite that
Lender's name in Schedule 1 (
The Original Lenders
) and is filed with HM Revenue & Customs within 30 days of the date of this
Agreement; or
|
|
(b) |
where it relates to a Treaty Lender that is not an Original Lender, contains the scheme reference number and jurisdiction of tax residence stated in respect
of that Lender in the documentation which it executes on becoming a Party as a Lender and is filed with HM Revenue & Customs within 30 days of the relevant Transfer Date.
|
|
(a) |
which is a bank (as defined for the purpose of section 879 of the ITA) making an advance under a Finance Document and is within the charge to United Kingdom
corporation tax as respects any payments of interest made in respect of that advance or would be within such charge as respects such payments apart from section 18A of the CTA; or in respect of an advance made under a Finance Document
by a person that was a bank (as defined for the purpose of section 879 of the ITA) at the time that that advance was made and within the charge to United Kingdom corporation tax as respects any payments of interest made in respect of
that advance; or
|
|
(b) |
which is:
|
|
(i) |
a company resident in the United Kingdom for United Kingdom tax purposes;
|
|
(ii) |
a partnership each member of which is:
|
|
(A) |
a company so resident in the United Kingdom; or
|
|
(B) |
a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into
account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest
|
|
(iii) |
a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into
account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company; or
|
|
(c) |
which is a Treaty Lender.
|
|
(a) |
a company resident in the United Kingdom for United Kingdom tax purposes;
|
|
(b) |
a partnership each member of which is:
|
|
(i) |
a company so resident in the United Kingdom; or
|
|
(ii) |
a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into
account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or
|
|
(c) |
a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into
account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company.
|
|
(a) |
is treated as a resident of a Treaty State for the purposes of the Treaty;
|
|
(b) |
does not carry on a business in the United Kingdom through a permanent establishment with which that Lender's participation in the Loan is effectively
connected.
|
12.2 |
Tax gross-up
Each Borrower shall (and shall procure
that each other Obligor will) make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law, subject as follows:
|
|
12.2.1 |
a Borrower shall promptly upon becoming aware that it or any other Obligor must make a Tax Deduction (or that there is any change in the rate or the basis
of a Tax Deduction) notify the Agent accordingly. Similarly, a Lender shall notify the Agent on becoming so aware in respect of a payment payable to that Lender. If the Agent receives such notification from a Lender it shall notify
the Borrowers and any such other Obligor;
|
|
12.2.2 |
if a Tax Deduction is required by law to be made by a Borrower or any other Obligor, the amount of the payment due from that Borrower or that other Obligor
shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required;
|
|
12.2.3 |
a payment shall not be increased under Clause 12.2.2 by reason of a Tax Deduction on account of Tax imposed by the United Kingdom, if on the date on which
the payment falls due:
|
|
(a) |
the payment could have been made to the relevant Lender without a Tax Deduction if the Lender had been a Qualifying Lender, but on that date that Lender is
not or has ceased to be a Qualifying Lender other than as a result of any change after the date it became a Lender under this Agreement in (or in the interpretation, administration, or application of) any law or Treaty or any
published practice or published concession of any relevant taxing authority; or
|
|
(b) |
the relevant Lender is a Qualifying Lender solely by virtue of (b) of the definition of Qualifying Lender and:
|
|
(i) |
an officer of H.M. Revenue & Customs has given (and not revoked) a direction (a "
Direction
") under section 931 of the ITA which relates to the payment and that Lender has received from the Borrower or from the other Obligor making the payment a certified copy of that Direction;
and
|
|
(ii) |
the payment could have been made to the Lender without any Tax Deduction if that Direction had not been made; or
|
|
(c) |
the relevant Lender is a Qualifying Lender solely by virtue of (b) of the definition of Qualifying Lender and:
|
|
(i) |
the relevant Lender has not given a Tax Confirmation to the Borrowers; and
|
|
(ii) |
the payment could have been made to the Lender without any Tax Deduction if the Lender had given a Tax Confirmation to the Borrowers, on the basis that the
Tax Confirmation would have enabled the Borrowers to have formed a reasonable belief that the payment was an "excepted payment" for the purpose of section 930 of the ITA; or
|
|
(d) |
the relevant Lender is a Treaty Lender and the Borrower or the other Obligor making the payment is able to demonstrate that the payment could have been made
to that Lender without the Tax Deduction had that Lender complied with its obligations under Clause 12.2.6 or Clause 12.2.7 (as applicable);
|
|
12.2.4 |
if a Borrower or any other Obligor is required to make a Tax Deduction, that Borrower shall (and shall procure that such other Obligor will) make that Tax
Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law;
|
|
12.2.5 |
within 30 days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Borrower making that Tax Deduction shall
(and shall procure that such other Obligor will) deliver to the Agent for the Finance Party entitled to the payment a statement under section 975 of the ITA or other 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;
|
|
12.2.6 | (a) | Subject to (b), a Treaty Lender and each Borrower which makes a payment to which that Treaty Lender is entitled shall co-operate (and the Borrowers shall procure that each other Obligor which makes a payment to which that Treaty Lender is entitled will co-operate) in completing any procedural formalities necessary for that Borrower or that other Obligor to obtain authorisation to make that payment without a Tax Deduction. |
|
(b) | (i) | A Treaty Lender which is an Original Lender and that holds a passport under the HMRC DT Treaty Passport scheme, and which wishes that scheme to apply to this Agreement, shall confirm its scheme reference number and its jurisdiction of tax residence opposite its name in Schedule 1 ( The Original Lenders ); and |
|
(ii) |
a Treaty Lender which is not an Original Lender and that holds a passport under the HMRC DT Treaty Passport scheme, and which wishes that scheme to apply to
this Agreement, shall confirm its scheme reference number and its jurisdiction of tax residence in the documentation which it executes on becoming a Party as a Lender,
|
|
12.2.7 |
If a Lender has confirmed its scheme reference number and its jurisdiction of tax residence in accordance with Clause 12.2.6(b) and:
|
|
(a) |
a Borrower making a payment to that Lender has not made a Borrower DTTP Filing in respect of that Lender; or
|
|
(b) |
a Borrower making a payment to that Lender has made a Borrower DTTP Filing in respect of that Lender but:
|
|
(i) |
that Borrower DTTP Filing has been rejected by HM Revenue & Customs; or
|
|
(ii) |
HM Revenue & Customs has not given that Borrower authority to make payments to that Lender without a Tax Deduction within 60 days of the date of the
Borrower DTTP Filing,
|
|
12.2.8 |
If a Lender has not confirmed its scheme reference number and jurisdiction of tax residence in accordance with Clause 12.2.6(b), no Borrower shall make a
Borrower DTTP Filing or file any other form relating to the HMRC DT Treaty Passport scheme in respect of that Lender's Commitment(s) or its participation in the Loan unless the Lender otherwise agrees.
|
|
12.2.9 |
A Borrower shall, promptly on making a Borrower DTTP Filing, deliver a copy of that Borrower DTTP Filing to the Agent for delivery to the relevant Lender.
|
|
12.2.10 |
A UK Non-Bank Lender shall promptly notify the Borrowers and the Agent if there is any change in the position from that set out in the Tax Confirmation.
|
12.3 |
Tax indemnity
|
|
12.3.1 |
Each Borrower shall (within three Business Days of demand by the Agent) pay to a Protected Party an amount equal to the loss, liability or cost which that
Protected Party determines will be or has been (directly or indirectly) suffered for or on account of Tax by that Protected Party in respect of a Finance Document.
|
|
12.3.2 |
Clause 12.3.1 shall not apply:
|
|
(a) |
with respect to any Tax assessed on a Finance Party:
|
|
(i) |
under the law of the jurisdiction in which that Finance Party is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Finance
Party is treated as resident for tax purposes; or
|
|
(ii) |
under the law of the jurisdiction in which that Finance Party's Facility Office is located in respect of amounts received or receivable in that
jurisdiction,
|
|
(b) |
to the extent a loss, liability or cost:
|
|
(i) |
is compensated for by an increased payment under Clause 12.2 (
Tax gross-up
);
|
|
(ii) |
would have been compensated for by an increased payment under Clause 12.2 (
Tax gross-up
) but was not so compensated solely because one of the exclusions in Clause 12.2.3 (
Tax
gross-up
) applied; or
|
|
(iii) |
relates to a FATCA Deduction required to be made by a Party.
|
|
12.3.3 |
A Protected Party making, or intending to make a claim under Clause 12.3.1 shall promptly notify the Agent of the event which will give, or has given, rise
to the claim, following which the Agent shall notify the Borrowers.
|
|
12.3.4 |
A Protected Party shall, on receiving a payment from a Borrower under this Clause 12.3, notify the Agent.
|
12.4 |
Tax Credit
If a Borrower or any other Obligor makes
a Tax Payment and the relevant Finance Party determines that:
|
|
12.4.1 |
a Tax Credit is attributable to an increased payment of which that Tax Payment forms part, to that Tax Payment or to a Tax Deduction in consequence of which
that Tax Payment was required; and
|
|
12.4.2 |
that Finance Party has obtained and utilised that Tax Credit,
|
12.5 |
Lender status confirmation
Each Lender which is not
an Original Lender shall indicate, in the documentation which it executes on becoming a Party as a Lender,
|
|
12.5.1 |
not a Qualifying Lender;
|
|
12.5.2 |
a Qualifying Lender (other than a Treaty Lender); or
|
|
12.5.3 |
a Treaty Lender.
|
12.6 |
Stamp taxes
The Borrowers shall pay and, within
three Business Days of demand, indemnify each Finance Party against any cost, loss or liability that Finance Party incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of any Finance Document.
|
12.7 |
VAT
|
|
12.7.1 |
All amounts expressed to be payable under a Finance Document by any Party or any Obligor 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 Clause 12.7.2, if VAT is or becomes chargeable on any supply made by any Finance
Party to any Party or any Obligor under a Finance Document and such Finance Party is required to account to the relevant tax authority for the VAT, that Party or Obligor 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 the Borrowers).
|
|
12.7.2 |
If VAT is or becomes chargeable on any supply made by any Finance Party (the "
Supplier
") to any other Finance Party (the "
Recipient
") under a Finance Document, and any Party other
than the Recipient (the "
Relevant 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):
|
|
(a) |
(where the Supplier is the person required to account to the relevant tax authority for the VAT) the Relevant 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 Clause 12.7.2(a) applies) promptly pay to the Relevant Party an amount equal to any credit or repayment the
Recipient receives from the relevant tax authority which the
|
|
(b) |
(where the Recipient is the person required to account to the relevant tax authority for the VAT) the Relevant Party must promptly, following demand from
the Recipient, pay to the Recipient an amount equal to the VAT chargeable on that supply but only to the extent that the Recipient reasonably determines that it is not entitled to credit or repayment from the relevant tax authority in
respect of that VAT.
|
|
12.7.3 |
Where a Finance Document requires any Party 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.
|
|
12.7.4 |
Any reference in this Clause 12.7 to any Party shall, at any time when such Party is treated as a member of a group for VAT purposes, include (where
appropriate and unless the context otherwise requires) a reference to the representative member of such group at such time (the term "representative member" to have the same meaning as in the Value Added Tax Act 1994).
|
|
12.7.5 |
In relation to any supply made by a Finance Party to any Party under a Finance Document, if reasonably requested by such Finance Party, that Party must
promptly provide such Finance Party with details of that Party's VAT registration and such other information as is reasonably requested in connection with such Finance Party's VAT reporting requirements in relation to such supply.
|
12.8 |
FATCA information
|
|
12.8.1 |
Subject to Clause 12.8.3, each Party shall, within ten Business Days of a reasonable request by another Party:
|
|
(a) |
confirm to that other Party whether it is:
|
|
(i) |
a FATCA Exempt Party; or
|
|
(ii) |
not a FATCA Exempt Party;
|
|
(b) |
supply to that other Party such forms, documentation and other information relating to its status under FATCA as that other Party reasonably requests for
the purposes of that other Party's compliance with FATCA; and
|
|
(c) |
supply to that other Party such forms, documentation and other information relating to its status as that other Party reasonably requests for the purposes
of that other Party's compliance with any other law, regulation, or exchange of information regime.
|
|
12.8.2 |
If a Party confirms to another Party pursuant to Clause 12.8.1(a)(i) that it is a FATCA Exempt Party and it subsequently becomes aware that it is not or has
ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly.
|
|
12.8.3 |
Clause 12.8.1 shall not oblige any Finance Party to do anything, and Clause 12.8.1(c) shall not oblige any other Party to do anything, which would or might
in its reasonable opinion constitute a breach of:
|
|
(a) |
any law or regulation;
|
|
(b) |
any fiduciary duty; or
|
|
(c) |
any duty of confidentiality.
|
|
12.8.4 |
If a Party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with
Clause 12.8.1(a) or 12.8.1(b) (including, for the avoidance of doubt, where Clause 12.8.3 applies), then such Party shall be treated for the purposes of the Finance Documents (and payments under them) as if it is not a FATCA Exempt
Party until such time as the Party in question provides the requested confirmation, forms, documentation or other information.
|
|
12.8.5 |
If a Borrower is a US Tax Obligor or the Agent reasonably believes that its obligations under FATCA or any other applicable law or regulation require it,
each Lender shall, within ten Business Days of:
|
|
(a) |
where a Borrower is a US Tax Obligor and the relevant Lender is an Original Lender, the date of this Agreement;
|
|
(b) |
where a Borrower is a US Tax Obligor on a date on which any other Lender becomes a Party as a Lender, that date; or
|
|
(c) |
where a Borrower is not a US Tax Obligor, the date of a request from the Agent,
|
|
(i) |
a withholding certificate on Form W-8 or Form W-9 or any other relevant form; or
|
|
(ii) |
any withholding statement 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.
|
|
12.8.6 |
The Agent shall provide any withholding certificate, withholding statement, document, authorisation or waiver it receives from a Lender pursuant to Clause
12.8.5 to the Borrowers.
|
|
12.8.7 |
If any withholding certificate, withholding statement, document, authorisation or waiver provided to the Agent by a Lender pursuant to Clause 12.8.5 is or
becomes materially inaccurate or incomplete, that Lender shall promptly update it and provide such updated withholding
|
|
12.8.8 |
The Agent may rely on any withholding certificate, withholding statement, document, authorisation or waiver it receives from a Lender pursuant to Clause
12.8.5 or 12.8.7 without further verification. The Agent shall not be liable for any action taken by it under or in connection with Clause 12.8.5, 12.8.6 or 12.8.7.
|
12.9 |
FATCA Deduction
|
|
12.9.1 |
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.
|
|
12.9.2 |
Each Party shall promptly, upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate or the basis of such FATCA
Deduction) notify the Party to whom it is making the payment and, in addition, shall notify the Borrowers and the Agent and the Agent shall notify the other Finance Parties.
|
13. |
Increased Costs
|
13.1 |
Increased costs
Subject to Clause 13.3 (
Exceptions
) the Borrowers shall, within three Business Days of a demand by the Agent, pay to the Agent for the account of a Finance
Party the amount of any Increased Costs incurred by that Finance Party or any of its Affiliates 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 or (iii) the implementation or application of or compliance with Basel III or CRD IV or any other law or regulation which implements Basel III or CRD
IV (whether such implementation, application or compliance is by a government, regulator, that Finance Party or any of that Finance Party's Affiliates).
|
|
(a) |
"
Basel III
" means:
|
|
(i) |
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;
|
|
(ii) |
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
|
|
(iii) |
any further guidance or standards published by the Basel Committee on Banking Supervision relating to "Basel III".
|
|
(b) |
"
CRD IV
" means:
|
|
(i) |
Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential
supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC, as amended, supplemented or restated;
|
|
(ii) |
Regulation EU No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment
firms and amending Regulation EU No 648/2012, as amended, supplemented or restated; and
|
|
(iii) |
any other law or regulation which implements Basel III.
|
|
(c) |
"
Increased Costs
" means:
|
|
(i) |
a reduction in the rate of return from the Loan 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,
|
13.2 |
Increased cost claims
|
|
13.2.1 |
A Finance Party intending to make a claim pursuant to Clause 13.1 (
Increased costs
) shall notify the Agent of the event giving rise to the claim, following which the Agent shall promptly notify the Borrowers.
|
|
13.2.2 |
Each Finance Party shall, as soon as practicable after a demand by the Agent, provide a certificate confirming the amount of its Increased Costs.
|
13.3 |
Exceptions
Clause 13.1 (
Increased costs
) does not apply to the extent any Increased Cost is:
|
|
13.3.1 |
attributable to a Tax Deduction required by law to be made by a Borrower or a Guarantor;
|
|
13.3.2 |
attributable to a FATCA Deduction required to be made by a Party;
|
|
13.3.3 |
compensated for by Clause 12.3
(
Tax indemnity
)
(or would have
been compensated for under Clause 12.3 but was not so compensated solely because any of the exclusions in Clause 12.3 applied); or
|
|
13.3.4 |
attributable to the wilful breach by the relevant Finance Party or its Affiliates of any law or regulation.
|
14. |
Other Indemnities
|
14.1 |
Currency indemnity
If any sum due from a Borrower
or a Guarantor 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:
|
|
14.1.1 |
making or filing a claim or proof against that Borrower or that Guarantor (as the case may be); or
|
|
14.1.2 |
obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,
|
14.2 |
Other indemnities
|
|
14.2.1 |
The Borrowers shall, within three Business Days of demand, indemnify each Secured Party against any cost, loss or liability incurred by that Secured Party
as a result of:
|
|
(a) |
the occurrence of any Event of Default;
|
|
(b) |
a failure by an Obligor to pay any amount due under a Finance Document on its due date, including without limitation, any cost, loss or liability arising as
a result of Clause 30 (
Sharing among the Finance Parties
);
|
|
(c) |
funding, or making arrangements to fund, its participation in a Vessel Loan requested by the Borrowers in a Utilisation Request but not made by reason of
the operation of any one or more of the
|
|
(d) |
a Vessel Loan (or part of a Vessel Loan) not being prepaid in accordance with a notice of prepayment given by the Borrowers;
|
|
(e) |
any complaint, claim, proceeding, formal notice, investigation or other action by any regulatory authority or enforcement authority or third party
concerning any actual or alleged breach of Sanctions by any Finance Party in connection with (directly or indirectly) the Loan.
|
|
14.2.2 |
The Borrowers shall promptly indemnify each Finance Party, each Affiliate of a Finance Party and each officer or employee of a Finance Party or its
Affiliate (each such person for the purposes of this Clause 14.2 an "
Indemnified Person
") against any cost, loss or liability
incurred by that Indemnified Person pursuant to or in connection with any litigation, arbitration or administrative proceedings or regulatory enquiry, in connection with or arising out of the entry into and the transactions
contemplated by the Finance Documents, having the benefit of any Encumbrance constituted by the Finance Documents or which relates to the condition or operation of, or any incident occurring in relation to, a Vessel, unless such cost,
loss or liability is caused by the gross negligence or wilful misconduct of that Indemnified Person. Any Affiliate or any officer or employee of a Finance Party or its Affiliate may rely on this Clause 14.2 subject to Clause 1.7 (
Third party rights
) and the provisions of the Third Parties Act.
|
|
14.2.3 |
Subject to any limitations set out in Clause 14.2.2, the indemnity in that Clause shall cover any cost, loss or liability incurred by each Indemnified
Person in any jurisdiction:
|
|
(a) |
arising or asserted under or in connection with any law relating to safety at sea, the ISM Code, any Environmental Law or any Sanctions; or
|
|
(b) |
in connection with any Environmental Claim.
|
14.3 |
Indemnity to the Agent
The Borrowers shall promptly
indemnify the Agent against:
|
|
14.3.1 |
any cost, loss or liability incurred by the Agent (acting reasonably) as a result of:
|
|
(a) |
investigating any event which it reasonably believes is a Default; or
|
|
(b) |
acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised; or
|
|
(c) |
instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under this Agreement; and
|
|
14.3.2 |
any cost, loss or liability (including, without limitation, for negligence or any other category of liability whatsoever) incurred by the Agent (otherwise
than by reason of the Agent's gross negligence or wilful misconduct) (or, in the case of any cost, loss or liability pursuant to Clause 31.11 (
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 under the Finance Documents.
|
14.4 |
Indemnity to the Security Agent
Each Borrower and
each Guarantor jointly and severally shall promptly indemnify the Security Agent and every Receiver and Delegate against any cost, loss or liability incurred by any of them as a result of:
|
|
14.4.1 |
any failure by the Borrowers to comply with their obligations under Clause 16 (
Costs and Expenses
);
|
|
14.4.2 |
acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised;
|
|
14.4.3 |
the taking, holding, protection or enforcement of the Security Documents;
|
|
14.4.4 |
the exercise of any of the rights, powers, discretions, authorities and remedies vested in the Security Agent and each Receiver and Delegate by the Finance
Documents or by law;
|
|
14.4.5 |
any default by any Obligor in the performance of any of the obligations expressed to be assumed by it in the Finance Documents; or
|
|
14.4.6 |
acting as Security Agent, Receiver or Delegate under the Finance Documents or which otherwise relates to any of the Charged Property (otherwise, in each
case, than by reason of the relevant Security Agent's, Receiver's or Delegate's gross negligence or wilful misconduct).
|
14.5 |
Indemnity survival
The indemnities contained in
this Agreement shall survive repayment of the Loan.
|
15. |
Mitigation by the Lenders
|
15.1 |
Mitigation
Each Finance Party shall, in
consultation with the Borrowers, take all reasonable steps to mitigate any circumstances which arise and which would result in any Vessel Loan ceasing to be available or any amount becoming payable under or pursuant to any of Clause
7.1 (
Illegality
), Clause 12 (
Tax
Gross Up and Indemnities
) or Clause 13 (
Increased Costs
) including (but not limited to) transferring its rights and
obligations under the Finance Documents to another Affiliate or Facility Office. The above does not in any way limit the obligations of any Obligor under the Finance Documents.
|
15.2 |
Limitation of liability
The Borrowers shall
promptly indemnify each Finance Party for all costs and expenses reasonably incurred by that Finance Party as a result of steps taken by it under Clause 15.1 (
Mitigation
). A Finance Party is not obliged to take any steps under Clause 15.1 if, in its opinion (acting reasonably), to do so might be prejudicial to it.
|
16. |
Costs and Expenses
|
16.1 |
Transaction expenses
The Borrowers shall promptly
on demand pay the Agent, the Security Agent and the Arranger the amount of all costs and expenses (including legal fees and costs related to operating a secure website for communicating with the Lenders) reasonably incurred by any of
them (and, in the case of the Security Agent, by any Receiver or Delegate) in connection with:
|
|
16.1.1 |
the negotiation, preparation, printing, execution, syndication and perfection of this Agreement, any other documents referred to in this Agreement and any
amendments to any Finance Documents;
|
|
16.1.2 |
the negotiation, preparation, printing, execution and perfection of any other Finance Documents executed after the date of this Agreement;
|
|
16.1.3 |
any other document which may at any time be required by a Finance Party to give effect to any Finance Document or which a Finance Party is entitled to call
for or obtain under any Finance Document; and
|
|
16.1.4 |
any discharge, release or reassignment of any of the Security Documents.
|
16.2 |
Amendment costs
If (a) an Obligor requests an
amendment, waiver or consent or (b) an amendment is required pursuant to Clause 31.10 (
Change of currency
), the Borrowers shall,
within three Business Days of demand, reimburse each of the Agent and the Security Agent for the amount of all costs and expenses (including legal fees) reasonably incurred by the Agent and the Security Agent (and, in the case of the
Security Agent, by any Receiver or Delegate) in responding to, evaluating, negotiating or complying with that request or requirement.
|
16.3 |
Agent and Security Agent's management time and additional
remuneration
Any amount payable to the Agent under Clause 14.3 (
Indemnity to the Agent
) or to the Security Agent under
Clause 14.4 (
Indemnity to the Security Agent
) or to either of them under this Clause 16 or Clause 27.11 (
Lenders' indemnity to the Agent
) in connection with any amendment to the Finance Documents or after the occurrence of a Default, shall include the cost
of utilising the management time or other resources of the Agent or the Security Agent (as the case may be) and will be calculated on the basis of such reasonable daily or hourly rates as the Agent or the Security Agent may notify to
the Borrowers and the Lenders, and is in addition to any other fee paid or payable to the Agent or the Security Agent.
|
16.4 |
Enforcement and preservation costs
The Borrowers
shall, promptly on demand, pay to each Finance Party and each other Secured Party the amount of all costs and expenses (including legal fees) incurred by that Finance Party in connection with the enforcement of, or the preservation of
any rights under, any Finance Document and any proceedings instituted by or against the Security Agent as a consequence of taking or holding the Security Documents or enforcing those rights including (without limitation) any losses,
costs and expenses which that Finance Party or other Secured Party may from time to time sustain, incur or become liable for by reason of that Finance Party or other Secured Party being mortgagee of a Vessel and/or a lender to a
Borrower, or by reason of that Finance Party or other Secured Party being deemed by any court or authority to be an operator or controller, or in any way concerned in the operation or control, of a Vessel.
|
16.5 |
Other costs
The Borrowers shall, promptly on
demand, pay to each Finance Party and each other Secured Party the amount of all sums which that Finance Party or other Secured Party may pay or become actually or contingently liable for on account of a Borrower in connection with a
Vessel (whether alone or jointly or jointly and severally with any other person) including (without limitation) all sums which that Finance Party or other Secured Party may pay or guarantees which it may give in respect of the
Insurances, any expenses incurred by that Finance Party or other Secured Party in connection with the maintenance or repair of a Vessel or in discharging any lien, bond or other claim relating in any way to a Vessel, and any sums
which that Finance Party or other Secured Party may pay or guarantees which it may give to procure the release of a Vessel from arrest or detention.
|
Section 7 |
Accounts and Application of Earnings
|
17. |
Accounts
|
17.1 |
Earnings Accounts
The Borrowers shall maintain the
Earnings Accounts with the Account Holder for the duration of the Facility Period free of Encumbrances and rights of set off other than those created by or under the Finance Documents.
|
17.2 |
Earnings
The Borrowers shall procure that all
Earnings and any Requisition Compensation are credited to the Earnings Accounts.
|
17.3 |
Application of Earnings Account
The Borrowers shall
transfer or cause to be transferred from the Earnings Account to the Agent for the account of the Lenders:
|
|
17.3.1 |
on each Repayment Date in respect of the relevant Vessel Loan, the amount of the Repayment Instalment then due; and
|
|
17.3.2 |
on each Interest Payment Date in respect of the relevant Vessel Loan, the amount of interest then due,
|
17.4 |
Borrowers' obligations not affected
If for any
reason the amount standing to the credit of the Earnings Account is insufficient to pay any Repayment Instalment or to make any payment of interest when due, the Borrowers' obligation to pay that Repayment Instalment or to make that
payment of interest shall not be affected.
|
17.5 |
Release of surplus
Subject to Clause 22.1.1 (
Financial covenants
) being complied with, any amount remaining to the credit of the Earnings Accounts following the making of any
transfer required by Clause 17.3 (
Application of Earnings Account
) shall (unless a Default is continuing) be released to or to the
order of the Borrowers.
|
17.6 |
Restriction on withdrawal
During the Facility
Period no sum may be withdrawn from the Earnings Accounts (except in accordance with this Clause 17) without the prior written consent of the Security Agent. The Earnings Accounts shall not be overdrawn.
|
17.7 |
Relocation of Earnings Accounts
On and at any time
after the occurrence of a Default which is continuing, the Security Agent may without the consent of the Borrowers instruct the Account Holder to relocate either or both of the Earnings Accounts to any other branch of the Account
Holder, without prejudice to the continued application of this Clause 17 and the rights of the Finance Parties under the Finance Documents.
|
17.8 |
Access to information
The Security Agent (and its
nominees) may from time to time during the Facility Period review the records held by the Account Holder (whether in written or electronic form) in relation to the Earnings Accounts, and the Borrowers irrevocably waive any right of
confidentiality which may exist in relation to those records.
|
17.9 |
Statements
Without prejudice to the rights of the
Security Agent under Clause 17.8 (
Access to information
), the Borrowers shall procure that the Account Holder
|
17.10 |
Application after acceleration
From and after the
giving of notice to the Borrowers by the Agent under Clause 24.2.1 (
Acceleration
), the Borrowers shall procure that all sums from
time to time standing to the credit of either of the Earnings Accounts are immediately transferred to the Security Agent or any Receiver or Delegate for application in accordance with Clause 28 (
Application of Proceeds
) and the Borrowers irrevocably authorise the Security Agent to instruct the Account Holder to make those transfers.
|
18. |
Additional Security
|
18.1 |
VTL Coverage
|
|
18.1.1 |
If at any time the aggregate of the Market Value of the Vessels and the value of any additional security (such value to be the face amount of the deposit
(in the case of cash), determined conclusively by appropriate advisers appointed by the Agent (in the case of other charged assets), and determined by the Agent (in all other cases)) for the time being provided to the Security Agent
under this Clause 18.1 is less than 125% of the aggregate of the amount of the Loan then outstanding and the amount certified by the Swap Provider to be the amount which would be payable by the Borrowers to the Swap Provider under the
Master Agreement if an Early Termination Date were to occur at that time (the "
VTL Coverage
"), the Borrowers shall, within 30 days
of the Agent's request, at the Borrowers' option:
|
|
(a) |
pay to the Security Agent or to its nominee a cash deposit in the amount of the shortfall to be secured in favour of the Security Agent as additional
security for the payment of the Indebtedness; or
|
|
(b) |
give to the Security Agent other additional security in amount and form acceptable to the Security Agent for a value determined in accordance with the first
part of this Clause 18.1.1; or
|
|
(c) |
prepay the Loan in the amount of the shortfall.
|
|
18.1.2 |
Clauses 6.3 (
Reborrowing
) and 7.7 (
Restrictions
) shall apply,
mutatis
mutandis
, to any prepayment made under this Clause 18.1.
|
|
18.1.3 |
any prepayment under this Clause 18.1 shall be allocated proportionally between the outstanding Vessel Loans and thereafter applied in prepayment of the
remaining Repayment Instalments (including the Balloon) in respect of each Vessel Loan in inverse order of maturity.
|
18.2 |
Provision of valuations
|
|
18.2.1 |
The Agent shall be entitled to obtain valuation(s) in evidence of the Market Value of (a) a Vessel for the purpose of Clause 18.1 (
VTL Coverage
) semi-
|
|
18.2.2 |
Additionally, the Agent shall at the request of the Lenders be entitled to obtain a valuation in evidence of the Market Value of a Vessel for the purpose of
Clause 18.1 (
VTL Coverage
) or Fleet Vessel for the purpose of Clause 22 (
Financial Covenants
) at any time and each such valuation obtained shall be at the expense of the Lenders except where the Borrowers are by means of such valuation shown to be in
breach of the relevant Clause.
|
|
18.2.3 |
Two Approved Shipbrokers shall be selected by the Borrowers and appointed by the Agent, and the Market Value of a Vessel shall be the arithmetic average of
the two valuations by the two Approved Shipbrokers. If the two valuations differ by at least 10 per cent, then a third valuation for that Vessel shall be obtained from an Approved Shipbroker selected and appointed by the Agent and
the Market Value of that Vessel shall be the arithmetic average of all three such valuations by the three Approved Shipbrokers. The Market Value of each Fleet Vessel shall be determined by a valuation obtained by one Approved
Shipbroker selected by the Borrowers and appointed by the Agent, provided that the Agent (acting reasonably) shall have the right to appoint another Approved Shipbroker to provide a second valuation of that Fleet Vessel addressed to
the Agent, in which case the Market Value of that Fleet Vessel shall be the arithmetic average of the two valuations.
|
|
18.2.4 |
The Agent may at any time after a Default has occurred and is continuing obtain a valuation in evidence of the Market Value of a Vessel or any other vessel
over which additional security has been created in accordance with Clause 18.1 (
VTL Coverage
) or, if such Default is a result of a
breach of the provisions of Clause 22 (
Financial Covenants
), a Fleet Vessel.
|
|
18.2.5 |
All valuations referred to in this Clause 18.2, except where specified in Clause 18.2.2, and all valuations to be obtained pursuant to Clause 4 (
Conditions of Utilisation
) shall be not older than 30 days prior to the date of testing the Market Value and shall be obtained at the
cost and expense of the Borrowers and the Borrowers shall within three Business Days of demand by the Agent pay to the Agent the amount of all such costs and expenses.
|
19. |
Guarantee and Indemnity
|
19.1 |
Guarantee and indemnity
Each Guarantor irrevocably
and unconditionally jointly and severally:
|
|
19.1.1 |
guarantees to each Finance Party punctual performance by each other Obligor of all that Obligor's obligations under the Finance Documents;
|
|
19.1.2 |
undertakes with each Finance Party that whenever another Obligor does not pay any amount when due under or in connection with any Finance Document, that
Guarantor shall immediately on demand pay that amount as if it was the principal obligor; and
|
|
19.1.3 |
agrees with each Finance Party 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 an Obligor not paying any amount which would, but for such unenforceability, invalidity or illegality,
have been payable by it under any Finance Document on the date when it would have been due. The amount payable by a Guarantor under this indemnity will not exceed the amount it would have had to pay under this Clause 19 if the amount
claimed had been recoverable on the basis of a guarantee.
|
19.2 |
Continuing Guarantee
This guarantee is a continuing
guarantee and will extend to the ultimate balance of sums payable by any Obligor under the Finance Documents, regardless of any intermediate payment or discharge in whole or in part.
|
19.3 |
Reinstatement
If any discharge, release or
arrangement (whether in respect of the obligations of any Obligor or any security for those obligations or otherwise) is made by a Finance Party in whole or in part on the basis of any payment, security or other disposition which is
avoided or must be restored in insolvency, liquidation, administration or otherwise, without limitation, then the liability of each Guarantor under this Clause 19 will continue or be reinstated as if the discharge, release or
arrangement had not occurred.
|
19.4 |
Waiver of defences
The obligations of each
Guarantor under this Clause 19 will not be affected by an act, omission, matter or thing which, but for this Clause 19.4, would reduce, release or prejudice any of its obligations under this Clause 19 (without limitation and whether
or not known to it or any Finance Party) including:
|
|
19.4.1 |
any time, waiver or consent granted to, or composition with, any Obligor or other person;
|
|
19.4.2 |
the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of any Obligor or any other member
of the Group;
|
|
19.4.3 |
the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security
over assets of, any Obligor or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;
|
|
19.4.4 |
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;
|
|
19.4.5 |
any amendment, novation, supplement, extension restatement (however fundamental and whether or not more onerous) or replacement of a Finance
|
|
19.4.6 |
any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security; or
|
|
19.4.7 |
any insolvency or similar proceedings.
|
19.5 |
Guarantor intent
Without prejudice to the
generality of Clause 19.4 (
Waiver of defences
), each Guarantor expressly confirms that it intends that this guarantee shall extend
from time to time to any (however fundamental) variation, increase, extension or addition of or to any of the Finance Documents and/or any facility or amount made available under any of the Finance Documents for the purposes of or in
connection with any of the following: business acquisitions of any nature; increasing working capital; enabling investor distributions to be made; carrying out restructurings; refinancing existing facilities; refinancing any other
indebtedness; making facilities available to new borrowers; any other variation or extension of the purposes for which any such facility or amount might be made available from time to time; and any fees, costs and/or expenses
associated with any of the foregoing.
|
19.6 |
Immediate recourse
Each Guarantor waives any right
it may have of first requiring any Finance Party (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from that Guarantor under this Clause
19. This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.
|
19.7 |
Appropriations
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, each Finance Party (or any trustee or agent on its behalf) may:
|
|
19.7.1 |
refrain from applying or enforcing any other moneys, security or rights held or received by that Finance Party (or any trustee or agent on its behalf) in
respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and no Guarantor shall be entitled to the benefit of the same; and
|
|
19.7.2 |
hold in an interest-bearing suspense account any moneys received from any Guarantor or on account of any Guarantor's liability under this Clause 19.
|
19.8 |
Deferral of Guarantors' rights
Until all amounts
which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full and unless the Agent otherwise directs, no Guarantor will 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 19:
|
|
19.8.1 |
to be indemnified by an Obligor;
|
|
19.8.2 |
to claim any contribution from any other guarantor of any Obligor's obligations under the Finance Documents;
|
|
19.8.3 |
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;
|
|
19.8.4 |
to bring legal or other proceedings for an order requiring any Obligor to make any payment, or perform any obligation, in respect of which any Guarantor has
given a guarantee, undertaking or indemnity under Clause 19.1 (
Guarantee and indemnity
);
|
|
19.8.5 |
to exercise any right of set-off against any Obligor; and/or
|
|
19.8.6 |
to claim or prove as a creditor of any Obligor in competition with any Finance Party.
|
19.9 |
Additional security
This guarantee is in addition
to and is not in any way prejudiced by any other guarantee or security now or subsequently held by any Finance Party.
|
Section 8 |
Representations, Undertakings and Events of Default
|
20. |
Representations
|
20.1 |
Representations
Each Borrower and each Guarantor
makes the representations and warranties set out in this Clause 20 to each Finance Party.
|
|
20.1.1 |
Status
Each of the Obligors:
|
|
(a) |
is a limited liability corporation, duly incorporated and validly existing under the law of its Original Jurisdiction; and
|
|
(b) |
has the power to own its assets and carry on its business as it is being conducted.
|
|
20.1.2 |
Binding obligations
Subject to the Legal
Reservations:
|
|
(a) |
the obligations expressed to be assumed by each of the Obligors in each of the Relevant Documents to which it is a party are legal, valid, binding and
enforceable obligations; and
|
|
(b) |
(without limiting the generality of Clause 20.1.2(a)) each Security Document to which it is a party creates the security interests which that Security
Document purports to create and those security interests are valid and effective.
|
|
20.1.3 |
Non-conflict with other obligations
The entry into
and performance by each of the Obligors of, and the transactions contemplated by, the Relevant Documents do not and will not conflict with:
|
|
(a) |
any law or regulation applicable to such Obligor;
|
|
(b) |
the constitutional documents of such Obligor; or
|
|
(c) |
any agreement or instrument binding upon such Obligor or any of such Obligor's assets or constitute a default or termination event (however described) under
any such agreement or instrument.
|
|
20.1.4 |
Power and authority
|
|
(a) |
Each of the Obligors has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and
delivery of, the Relevant Documents to which it is or will be a party and the transactions contemplated by those Relevant Documents.
|
|
(b) |
No limit on the powers of any Obligor will be exceeded as a result of the borrowing, grant of security or giving of guarantees or indemnities contemplated
by the Relevant Documents to which it is a party.
|
|
20.1.5 |
Validity and admissibility in evidence
All
Authorisations required or desirable:
|
|
(a) |
to enable each of the Obligors lawfully to enter into, exercise its rights and comply with its obligations in the Relevant Documents to which it is a party
or to enable each Finance Party to enforce and exercise all its rights under the Relevant Documents; and
|
|
(b) |
to make the Relevant Documents to which any Obligor is a party admissible in evidence in its Relevant Jurisdictions,
|
|
20.1.6 |
Governing law and enforcement
|
|
(a) |
The choice of governing law of any Finance Document will be recognised and enforced in the Relevant Jurisdictions of each relevant Obligor.
|
|
(b) |
Any judgment obtained in relation to any Finance Document in the jurisdiction of the governing law of that Finance Document will be recognised and enforced
in the Relevant Jurisdictions of each relevant Obligor.
|
|
20.1.7 |
Insolvency
No corporate action, legal proceeding or
other procedure or step described in Clause 24.1.7 (
Insolvency proceedings
) or creditors' process described in Clause 24.1.8 (
Creditors' process
) has been taken or, to the knowledge of any Borrower or any Guarantor, threatened in relation to an Obligor or any
other member of the Group; and none of the circumstances described in Clause 24.1.6 (
Insolvency
) applies to an Obligor or any
other member of the Group.
|
|
20.1.8 |
No filing or stamp taxes
Under the laws of the
Relevant Jurisdictions of each relevant Obligor it is not necessary that the Finance Documents be filed, recorded or enrolled with any court or other authority in any of those jurisdictions or that any stamp, registration, notarial or
similar Taxes or fees be paid on or in relation to the Finance Documents or the transactions contemplated by the Finance Documents except: registration of each Mortgage at the Ships Registry where title to the relevant Vessel is
registered in the ownership of the relevant Borrower and payment of associated fees, which registrations, filings, taxes and fees will be made and paid promptly after the date of the relevant Finance Document.
|
|
20.1.9 |
Deduction of Tax
None of the Obligors is required
under the law of its jurisdiction of incorporation to make any deduction for or on account of Tax from any payment it may make under any Finance Document to a Lender which is:
|
|
(a) |
a Qualifying Lender falling within (a) of the definition of Qualifying Lender; or, except where a Direction has been given under section 931 of the ITA in
relation to the payment concerned, a Qualifying Lender falling within (b) of the definition of Qualifying Lender; or
|
|
(b) |
a Treaty Lender and the payment is one specified in a direction given by the Commissioners of Revenue & Customs under Regulation 2 of the Double
Taxation Relief (Taxes on Income) (General) Regulations 1970 (SI 1970/488).
|
|
20.1.10 |
No default
|
|
(a) |
No Event of Default and, on the date of this Agreement and each Utilisation Date, no Default is continuing or is reasonably likely to result from the
advance of any Vessel Loan or the entry into, the performance of, or any transaction contemplated by, any of the Relevant Documents.
|
|
(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 of the Obligors or to which its assets are
subject which has or is reasonably likely to have a Material Adverse Effect.
|
|
20.1.11 |
No misleading information
Save as disclosed in
writing to the Agent and the Arranger prior to the date of this Agreement:
|
|
(a) |
all material information provided to a Finance Party by or on behalf of any of the Obligors or any other member of the Group on or before the date of this
Agreement and not superseded before that date is accurate and not misleading in any material respect and all projections provided to any Finance Party on or before the date of this Agreement have been prepared in good faith on the
basis of assumptions which were reasonable at the time at which they were prepared and supplied; and
|
|
(b) |
all other written information provided by any of the Obligors or any other member of the Group (including its advisers) to a Finance Party was true,
complete and accurate in all material respects as at the date it was provided and is not misleading in any respect.
|
|
20.1.12 |
Financial statements
|
|
(a) |
The Original Financial Statements were prepared in accordance with GAAP consistently applied.
|
|
(b) |
The unaudited Original Financial Statements fairly represent each Obligor's and the Group's financial condition and results of operations for the relevant
half year.
|
|
(c) |
The audited Original Financial Statements fairly represent each Obligor's and the Group's financial condition and results of operations during the relevant
financial year.
|
|
(d) |
There has been no material adverse change in any Obligor's assets, business or financial condition (or the assets, business or consolidated financial
condition of the Group, in the case of the Original Guarantor) since the date of the Original Financial Statements.
|
|
(e) |
Each Obligor's most recent financial statements delivered pursuant to Clause 21.1 (
Financial statements
):
|
|
(i) |
have been prepared in accordance with GAAP as applied to the Original Financial Statements; and
|
|
(ii) |
fairly represent its consolidated financial condition as at the end of, and its consolidated results of operations for, the period to which they relate.
|
|
(f) |
Since the date of the most recent financial statements delivered pursuant to Clause 21.1
(
Financial statements
) there has been no material adverse change in the assets, business or
financial condition of any of the Obligors or any other member of the Group.
|
|
20.1.13 |
No proceedings
|
|
(a) |
No litigation, arbitration or administrative proceedings or investigation of or before any court, arbitral body or agency which, if adversely determined,
are reasonably likely to have a Material Adverse Effect have (to the best of its knowledge and belief (having made due and careful enquiry)) been started or threatened against any of the Obligors or any other member of the Group.
|
|
(b) |
No judgment or order of a court, arbitral body or agency which is reasonably likely to have a Material Adverse Effect has (to the best of its knowledge and
belief (having made due and careful enquiry)) been made against any of the Obligors or any other member of the Group.
|
|
20.1.14 |
No breach of laws
None of the Obligors or any other
member of the Group has breached any law or regulation which breach has or is reasonably likely to have a Material Adverse Effect.
|
|
20.1.15 |
Environmental laws
|
|
(a) |
Each of the Obligors and each other member of the Group is in compliance with Clause 23.3 (
Environmental compliance
) and to the best of its knowledge and belief (having made due and careful enquiry) no circumstances have occurred which would prevent such compliance in a manner or
to an extent which has or is reasonably likely to have a Material Adverse Effect.
|
|
(b) |
No Environmental Claim has been commenced or (to the best of its knowledge and belief (having made due and careful enquiry)) is threatened against any of
the Obligors or any other member of the Group where that claim has or is reasonably likely, if determined
|
|
20.1.16 |
Taxation
|
|
(a) |
None of the Obligors nor any other member of the Group is materially overdue in the filing of any Tax returns or is overdue in the payment of any amount in
respect of Tax.
|
|
(b) |
No claims or investigations are being, or are reasonably likely to be, made or conducted against any of the Obligors or any other member of the Group with
respect to Taxes.
|
|
(c) |
Each of the Obligors and each other member of the Group is resident for Tax purposes only in its Original Jurisdiction.
|
|
20.1.17 |
Anti-corruption law
Each of the Obligors and each
other member of the Group and each Affiliate of any of them has conducted its businesses in compliance with applicable anti-corruption laws and has instituted and maintained policies and procedures designed to promote and achieve
compliance with such laws.
|
|
20.1.18 |
No Encumbrance or Financial Indebtedness
|
|
(a) |
No Encumbrance or Quasi-Security exists over all or any of the present or future assets of any of the Obligors or any other member of the Group other than
as permitted by the Finance Documents.
|
|
(b) |
None of the Obligors has any Financial Indebtedness outstanding other than as permitted by this Agreement.
|
|
20.1.19 |
Pari passu ranking
The payment obligations of each
of the Obligors under the Finance Documents to which it is a party rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to
companies generally.
|
|
20.1.20 |
No adverse consequences
|
|
(a) |
It is not necessary under the laws of the Relevant Jurisdictions of any of the Obligors or any other member of the Group:
|
|
(i) |
in order to enable any Finance Party to enforce its rights under any Finance Document; or
|
|
(ii) |
by reason of the execution of any Finance Document or the performance by it 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 of the Relevant Jurisdictions of any of the Obligors or any
other member of the Group by reason only of the execution, performance and/or enforcement of any Finance Document.
|
|
20.1.21 |
Disclosure of material facts
No Borrower is aware
of any material facts or circumstances which have not been disclosed to the Agent and which might, if disclosed, have changed the decision of a person willing to make loan facilities of the nature contemplated by this Agreement
available to the Borrowers.
|
|
20.1.22 |
Completeness of Relevant Documents
The copies of
any Relevant Documents provided or to be provided by the Borrowers to the Agent in accordance with Clause 4 (
Conditions of Utilisation
)
are, or will be, true and accurate copies of the originals and represent, or will represent, the full agreement between the parties to those Relevant Documents in relation to the subject matter of those Relevant Documents and there
are no commissions, rebates, premiums or other payments due or to become due in connection with the subject matter of those Relevant Documents other than in the ordinary course of business or as disclosed to, and approved in writing
by, the Agent.
|
|
20.1.23 |
No immunity
No Obligor or any of its assets is
immune to any legal action or proceeding.
|
|
20.1.24 |
Money laundering
Any borrowing by a Borrower under
this Agreement, and the performance of its obligations under this Agreement and under the other Finance Documents, will be for its own account and will not involve any breach by it of any law or regulatory measure relating to "
money laundering
" as defined in Article 1 of the Directive ((EU) 2015/849) of the European Parliament and of the Council of the
European Communities.
|
|
20.1.25 |
Sanctions
|
|
(a) |
No Relevant Person is:
|
|
(b) |
a Restricted Party;
|
|
(c) |
in breach of Sanctions; or
|
|
(d) |
subject to or involved in any complaint, claim, proceeding, formal notice, investigation or other action by any regulatory or enforcement authority or third
party concerning any Sanctions.
|
20.2 |
Repetition
Each Repeating Representation is deemed
to be made by each Borrower and each Guarantor by reference to the facts and circumstances then existing on the date of each Utilisation Request, on each Utilisation Date, on the first day of each Interest Period and, in the case of
those contained in Clauses 20.1.12(d) and 20.1.12(f) (
Financial statements
) and for so long as any amount is outstanding under the
Finance Documents or any Commitment is in force, on each day.
|
21. |
Information Undertakings
|
21.1 |
Financial statements
Each Borrower and the
Original Guarantor shall supply to the Agent in sufficient copies for all of the Lenders:
|
|
21.1.1 |
as soon as the same become available, but in any event within 180 days after the end of each of its financial years, the audited (consolidated) financial
statements of the Original Guarantor for that financial year; and
|
|
21.1.2 |
as soon as the same become available, but in any event within 90 days after the end of each half year during the Original Guarantor's financial years, the
unaudited semi-annual financial statements for that half year.
|
21.2 |
Compliance Certificate
|
|
21.2.1 |
The Original Guarantor shall supply to the Agent, with each set of its annual financial statements delivered pursuant to Clause 21.1.1 (
Financial statements
) and each set of its semi-annual financial statements delivered pursuant to Clause 21.1.2 (
Financial statements
) and any financial statements required to be delivered under Clause 4 (
Conditions of Utilisation
), a Compliance Certificate setting out (in reasonable detail) computations as to compliance with Clause 22 (
Financial Covenants
) as at the date as at which those financial statements were drawn up.
|
|
21.2.2 |
Each Compliance Certificate shall be signed by the chief financial officer of the Original Guarantor.
|
21.3 |
Requirements as to financial statements
|
|
21.3.1 |
shall be certified by a director of the relevant company as fairly representing its financial condition and operations as at the date as at which those
financial statements were drawn up;
|
|
21.3.2 |
in the case of consolidated financial statements of the Group, shall be accompanied by a statement by the directors of the Original Guarantor comparing
actual performance for the period to which the financial statements relate to the actual performance for the corresponding period in the preceding financial year of the Group; and
|
|
21.3.3 |
shall be prepared using GAAP, accounting practices and financial reference periods consistent with those applied in the preparation of the Original
Financial Statements unless, in relation to any set of financial statements, it notifies the Agent that there has been a change in GAAP, the accounting practices or reference periods and its auditors deliver to the Agent:
|
|
(a) |
a description of any change necessary for those financial statements to reflect the GAAP, accounting practices and reference
|
|
(b) |
sufficient information, in form and substance as may be reasonably required by the Agent, to enable the Agent to determine whether Clause 22 (
Financial Covenants
) has been complied with and make an accurate comparison between the financial position indicated in those
financial statements and the Original Financial Statements.
|
21.4 |
Information: miscellaneous
Each Borrower shall
supply to the Agent (in sufficient copies for all the Lenders, if the Agent so requests):
|
|
21.4.1 |
at the same time as they are dispatched, copies of all documents dispatched by that Borrower to its shareholders generally (or any class of them) or
dispatched by that Borrower or any other Obligor to its creditors generally (or any class of them);
|
|
21.4.2 |
promptly upon becoming aware of them, the details of any default, litigation, arbitration or administrative proceedings which are current, threatened or
pending against any Obligor or any other member of the Group and which, if adversely determined, are reasonably likely to have a Material Adverse Effect;
|
|
21.4.3 |
promptly upon becoming aware of them, the details of any judgment or order of a court, arbitral body or agency which is made against any Obligor or any
other member of the Group and which is reasonably likely to have a Material Adverse Effect;
|
|
21.4.4 |
promptly, such information and documents as the Security Agent may reasonably require about the Charged Property and compliance of the Obligors with the
terms of any Security Documents (including without limitation cash flow analyses and details of the operating costs of any Vessel); and
|
|
21.4.5 |
promptly on request, such further information regarding the financial condition, assets and operations of any Obligor or any other member of the Group
(including any requested amplification or explanation of any item in the financial statements, budgets or other material provided by any Obligor under this Agreement, any changes to management of the Group and an up to date copy of
its shareholders' register (or equivalent in its Original Jurisdiction)) as any Finance Party through the Agent may reasonably request.
|
21.5 |
Notification of default
|
|
21.5.1 |
Each Borrower and each Guarantor shall notify the Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its
occurrence.
|
|
21.5.2 |
Promptly upon a request by the Agent, each Borrower shall supply to the Agent a certificate signed by two of its directors or senior officers on its behalf
certifying that no Default is continuing (or if a Default is continuing, specifying the Default and the steps, if any, being taken to remedy it).
|
21.6 |
Sanctions
|
|
21.6.1 |
Each of the Borrowers and the Original Guarantor shall notify the Agent promptly upon becoming aware of the relevant event and giving full details, if it or
any other Relevant Person:
|
|
(a) |
becomes, or is reasonably likely to become, a Restricted Party;
|
|
(b) |
has any direct or indirect dealings with any Restricted Party; or
|
|
(c) |
is subject to, involved in or threatened with any complaint, claim, proceeding, formal notice, investigation or other action by any regulatory or
enforcement authority or third party concerning any Sanctions and shall notify the Agent of the steps, if any, being taken to address it.
|
21.7 |
"Know your customer" checks
|
|
21.7.1 |
If:
|
|
(a) |
the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this
Agreement;
|
|
(b) |
any change in the status of an Obligor (or of a Holding Company of an Obligor) or the composition of the shareholders of an Obligor (or of a Holding Company
of an Obligor) after the date of this Agreement; or
|
|
(c) |
a proposed assignment or transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such
assignment or transfer,
|
|
21.7.2 |
Each Lender shall promptly upon the request of the Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested
by the Agent (for itself) in order for the Agent 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.
|
|
21.7.3 |
The Borrowers shall, by not less than ten Business Days' prior written notice to the Agent, notify the Agent (which shall promptly notify the Lenders) of
the intention to request that any other company becomes an Additional Guarantor pursuant to Clause 26 (
Changes to the Obligors
).
|
|
21.7.4 |
Following the giving of any notice pursuant to Clause 21.7.3, if the accession of such Additional Guarantor obliges the Agent or any Lender to comply with
"know your customer" or similar identification procedures in circumstances where the necessary information is not already available to it, the Borrowers shall promptly upon the request of the Agent or any Lender supply, or procure the
supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself or on behalf of any Lender) or any Lender (for itself or on behalf of any prospective new Lender) in order for the Agent or such
Lender or any prospective new Lender 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 accession of such company to
this Agreement as an Additional Guarantor.
|
22. |
Financial Covenants
|
|
22.1.1 |
Each Borrower shall, from the Utilisation Date and throughout the Facility Period, maintain in the relevant Earnings Account a credit balance of not less
than two hundred thousand Dollars ($200,000).
|
|
22.1.2 |
The Original Guarantor shall maintain throughout the Facility Period on a consolidated basis:
|
|
(a) |
Cash of not less than the higher of (i) $500,000 multiplied by the number of the Fleet Vessels and (ii) $10,000,000; and
|
|
(b) |
Market Value Adjusted Net Worth in an amount not less than $150,000,000; and
|
|
(c) |
Market Value Adjusted Net Worth in excess of 25% of the Total Assets.
|
|
(a) |
any Financial Indebtedness of the debtor;
|
|
(b) |
liability of any credit to the debtor from a supplier of goods or services or under any instalment purchase or payment plan or other similar arrangement;
|
|
(c) |
contingent liabilities of the debtor (including without limitation any taxes or other payments under dispute) which have been or, under GAAP, should be
recorded in the notes to the Accounting Information;
|
|
(d) |
any deferred tax of the debtor; and
|
|
(e) |
liability under a guarantee, indemnity or similar obligation entered into by the debtor in respect of a liability of another person who is not a member of
the Group which would fall within (a) to (d) above if the references to the debtor referred to the other person.
|
23. |
General Undertakings
|
23.1 |
Authorisations
Each Borrower and each Guarantor
shall promptly:
|
|
23.1.1 |
obtain, comply with and do all that is necessary to maintain in full force and effect; and
|
|
23.1.2 |
supply certified copies to the Agent of,
|
|
(a) |
enable any Obligor to perform its obligations under the Finance Documents to which it is a party;
|
|
(b) |
ensure the legality, validity, enforceability or admissibility in evidence of any Finance Document; and
|
|
(c) |
enable any Obligor to carry on its business where failure to do so has or is reasonably likely to have a Material Adverse Effect.
|
23.2 |
Compliance with laws
|
|
23.2.1 |
Each Borrower and each Guarantor shall comply (and shall procure that each other Obligor, each other member of the Group and each Affiliate of any of them
will comply), in all respects with all laws to which it may be subject, if (except as regards Sanctions, to which Clause 23.2.2 applies, and anti-corruption laws, to which Clause 23.5 applies) failure so to comply has or is reasonably
likely to have a Material Adverse Effect.
|
|
23.2.2 |
Each Borrower and each Guarantor shall comply (and shall procure that each other Obligor, each other member of the Group and each Affiliate of any of them
will comply) in all respects with all Sanctions.
|
23.3 |
Environmental compliance
|
|
23.3.1 |
comply with all Environmental Laws;
|
|
23.3.2 |
obtain, maintain and ensure compliance with all requisite Environmental Approvals; and
|
|
23.3.3 |
implement procedures to monitor compliance with and to prevent liability under any Environmental Law,
|
23.4 |
Environmental Claims
|
|
23.4.1 |
any Environmental Claim against any of the Obligors or any other member of the Group which is current, pending or threatened; and
|
|
23.4.2 |
any facts or circumstances which are reasonably likely to result in any Environmental Claim being commenced or threatened against any of the Obligors or any
other member of the Group,
|
23.5 |
Anti-corruption law
|
|
23.5.1 |
Each Borrower and each Guarantor shall not (and shall procure that no other Obligor or other member of the Group will) directly or indirectly use the
proceeds of the Loan for any purpose which would breach the Bribery Act 2010, the United States Foreign Corrupt Practices Act of 1977 or other similar legislation in other jurisdictions.
|
|
23.5.2 |
Each Borrower and each Guarantor shall (and shall procure that each other Obligor and each other member of the Group will):
|
|
(a) |
conduct its businesses in compliance with applicable anti-corruption laws; and
|
|
(b) |
maintain policies and procedures designed to promote and achieve compliance with such laws.
|
23.6 |
Taxation
|
|
23.6.1 |
Each Borrower and each Guarantor shall (and shall procure that each other Obligor and each other member of the Group will) pay and discharge all Taxes
imposed upon it or its assets within the time period allowed without incurring penalties unless and only to the extent that:
|
|
(a) |
such payment is being contested in good faith;
|
|
(b) |
adequate reserves are being maintained for those Taxes and the costs required to contest them which have been disclosed in its latest financial statements
delivered to the Agent under Clause 21.1 (
Financial statements
); and
|
|
(c) |
such payment can be lawfully withheld and failure to pay those Taxes does not have or is not reasonably likely to have a Material Adverse Effect.
|
|
23.6.2 |
Neither any Borrower nor any Guarantor may (and no other Obligor or other member of the Group may) change its residence for Tax purposes.
|
23.7 |
Evidence of good standing
Each Borrower will from
time to time, if applicable and if requested by the Agent, provide the Agent with evidence in form and substance satisfactory to the Agent that each Obligor and each corporate shareholder of an Obligor remains in good standing.
|
23.8 |
Pari passu ranking
Each Borrower and each Guarantor
shall ensure that at all times any unsecured and unsubordinated claims of a Finance Party against it under the Finance Documents rank at least
pari passu
with the claims of all its other unsecured and unsubordinated creditors except those creditors whose claims are mandatorily preferred by laws of general application to companies.
|
23.9 |
Negative pledge
|
|
23.9.1 |
No Borrower shall create nor permit to subsist any Encumbrance over any of its assets.
|
|
23.9.2 |
No Borrower shall:
|
|
(a) |
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 member of
the Group;
|
|
(b) |
sell, transfer or otherwise dispose of any of its receivables on recourse terms;
|
|
(c) |
enter into any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject to a combination of accounts;
or
|
|
(d) |
enter into any other preferential arrangement having a similar effect,
|
|
23.9.3 |
Clauses 23.9.1 and 23.9.2 do not apply to (a) any Encumbrance or (as the case may be) Quasi-Security over a Vessel, which is a Permitted Encumbrance or (b)
any Encumbrance or (as the case may be) Quasi-Security over any other asset, which is created in the ordinary course of trading and not as a result of any default or omission by an Obligor or any other member of the Group.
|
23.10 |
Disposals
|
|
23.10.1 |
Except as permitted under Clause 23.10.2, neither Borrower shall enter into a single transaction or a series of transactions (whether related or not) and
whether voluntary or involuntary to sell, lease, transfer or otherwise dispose of any asset.
|
|
23.10.2 |
Clause 23.10.1 does not apply to any sale, lease, transfer or other disposal which is a Permitted Disposal.
|
23.11 |
Arm's length basis
|
|
23.11.1 |
Except as permitted under Clause 23.11.2, neither Borrower shall enter into any transaction with any person except on arm's length terms and for full market
value.
|
|
23.11.2 |
The following transactions shall not be a breach of this Clause 23.11: fees, costs and expenses payable under the Relevant Documents in the amounts set out
in the Relevant Documents delivered to the Agent under Clause 4.1 (
Initial conditions precedent
) or agreed by the Agent.
|
23.12 |
Merger
Neither any Borrower nor any Guarantor shall
enter into any amalgamation, demerger, merger, consolidation or corporate reconstruction.
|
23.13 |
Change of business
Neither any Borrower nor any
Guarantor shall (and the Borrowers shall procure that no other Obligor will) make any substantial change to the general nature of its business from that carried on at the date of this Agreement without the prior written consent of the
Agent acting on the instructions of the Majority Lenders.
|
23.14 |
No other business
No Borrower shall engage in any
business other than the ownership, operation, chartering and management of the relevant Vessel.
|
23.15 |
No acquisitions
No Borrower shall acquire a company
or any shares or securities or a business or undertaking (or, in each case, any interest in any of them) or incorporate a company.
|
23.16 |
No Joint Ventures
Neither Borrower shall:
|
|
23.16.1 |
enter into, invest in or acquire (or agree to acquire) any shares, stocks, securities or other interest in any Joint Venture; or
|
|
23.16.2 |
transfer any assets or lend to or guarantee or give an indemnity for or give security for the obligations of a Joint Venture or maintain the solvency of or
provide working capital to any Joint Venture (or agree to do any of the foregoing).
|
23.17 |
No borrowings
No Borrower shall incur or allow to
remain outstanding any Financial Indebtedness (except for the Loan) other than any Financial Indebtedness arising in the ordinary course of trading and any Financial Indebtedness from members of the Group which has been subordinated
to the Loan and on terms acceptable to the Agent, such terms to include, without limitation, prohibition from payment of principal and interest prior to the expiry of the Facility Period.
|
23.18 |
No substantial liabilities
Except in the ordinary
course of business, neither Borrower shall incur any liability to any third party which is in the Agent's opinion of a substantial nature.
|
23.19 |
No loans or credit
No Borrower shall be a creditor
in respect of any Financial Indebtedness unless it is a loan made in the ordinary course of business in connection with the chartering, operation or repair of the relevant Vessel.
|
23.20 |
No guarantees or indemnities
No Borrower shall
incur or allow to remain outstanding any guarantee in respect of any obligation of any person unless it is a guarantee made in the ordinary course of business in connection with the chartering, operation or repair of the relevant
Vessel.
|
23.21 |
No dividends
Neither any Borrower nor any Guarantor shall:
|
|
23.21.1 |
declare, make or pay 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);
|
|
23.21.2 |
repay or distribute any dividend or share premium reserve;
|
|
23.21.3 |
pay or allow any member of the Group to pay any management, advisory or other fee to or to the order of any of the shareholders of the Guarantor;
|
|
23.21.4 |
redeem, repurchase, defease, retire or repay any of its share capital or resolve to do so; or
|
23.22 |
Inspection of records
Each Borrower and each
Guarantor will permit the inspection of its financial records and accounts from time to time by the Agent or its nominee.
|
23.23 |
No change in Relevant Documents
Neither any
Borrower nor any Guarantor shall (and the Borrowers shall procure that no other Obligor or other member of the Group will) amend, vary, novate, supplement, supersede, waive or terminate any term of, any of the Relevant Documents
(including, without limitation any Charter) which are not Finance Documents, or any other document delivered to the Agent pursuant to Clause 4.1 (
Initial conditions precedent
) or Clause 4.2 (
Further conditions precedent
) or Clause 4.3 (
Conditions subsequent
).
|
23.24 |
Further assurance
|
|
23.24.1 |
Each Borrower and each Guarantor shall (and shall procure that each other Obligor and each other member of the Group will) promptly do all such acts or
execute all such documents (including assignments, transfers, mortgages, charges, notices and instructions) as the Security Agent may reasonably specify (and in such form as the Security Agent may
|
|
(a) |
to perfect any Encumbrance created or intended to be created under or evidenced by the Security Documents (which may include the execution of a mortgage,
charge, assignment or other Encumbrance over all or any of the assets which are, or are intended to be, the subject of the Security Documents) or for the exercise of any rights, powers and remedies of the Security Agent or the Finance
Parties provided by or pursuant to the Finance Documents or by law;
|
|
(b) |
to confer on the Security Agent or confer on the Finance Parties an Encumbrance over any property and assets of that Borrower (or that other Obligor or that
other member of the Group as the case may be) located in any jurisdiction equivalent or similar to the Encumbrance intended to be conferred by or pursuant to the Security Documents; and/or
|
|
(c) |
to facilitate the realisation of the assets which are, or are intended to be, the subject of the Security Documents.
|
|
23.24.2 |
Each Borrower and each Guarantor shall (and shall procure that each other Obligor and each other member of the Group will) 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 Encumbrance conferred or intended to be conferred on the Security Agent
or the Finance Parties by or pursuant to the Finance Documents.
|
23.25 |
Sanctions
|
|
23.25.1 |
No Obligor shall (and the Borrowers and the Guarantor shall ensure that no other Relevant Person will) take any action, make any omission or use (directly
or indirectly) any proceeds of the Loan, in a manner that:
|
|
(a) |
is a breach of Sanctions; and/or
|
|
(b) |
causes (or will cause) a breach of Sanctions by any Relevant Person or Finance Party.
|
|
(c) |
causes any Finance Party to be involved in any complaint, claim, proceeding, formal notice, investigation or other action by any regulatory or enforcement
authority or third party concerning any Sanctions.
|
|
23.25.2 |
No Obligor shall (and the Borrowers and the Guarantor shall ensure that no other Relevant Person will) take any action or make any omission that results, or
is likely to result, in it or any Finance Party becoming a Restricted Party or otherwise a target of sanctions ("target of sanctions" signifying an entity or person ("
Target
") that is a target of laws, regulations or orders concerning any trade, economic or financial sanctions or embargoes by
|
|
23.25.3 |
Each Obligor shall (and the Borrowers and the Guarantor shall ensure that each member of the Group will) maintain appropriate policies and procedures to:
|
|
(a) |
identify any risks to its business as a result of Sanctions; and
|
|
(b) |
promote and achieve compliance with its obligations under paragraphs (a) and (b) above.
|
23.26 |
No dealings with Master Agreement
|
|
23.26.1 |
No Borrower shall assign, novate or encumber or in any other way transfer any of its rights or obligations under the Master Agreement, nor (subject to
Clause 23.26.2) enter into any interest rate exchange or hedging agreement with anyone other than the Swap Provider.
|
|
23.26.2 |
The Borrowers shall give the Swap Provider at all times throughout the Facility Period, the right of first refusal to enter into one or more hedging of
interest rate risk of the Loan or other derivative products on competitive terms.
|
23.27 |
Change of control
|
|
23.27.1 |
The Borrowers and the Guarantor shall procure that throughout the Facility Period:-
|
|
(a) |
the Borrowers shall remain wholly owned and controlled Subsidiaries of the Guarantor;
|
|
(b) |
there is no change in the legal or beneficial ownership of a Borrower from that advised to the Agent on or prior to the date of this Agreement without the
prior written consent of the Agent;
|
|
(c) |
the Family, with the exception of any financial institution acting as passive investor, remains the major legal owner or ultimate beneficial owner of the
Guarantor;
|
|
(d) |
the Guarantor remains listed in the New York Stock Exchange;
|
|
(e) |
each of the Relevant Executives holds an executive position within the management structure of the Guarantor.
|
23.28 |
Inventory of Hazardous Materials
Each Borrower
shall procure that the Vessel owned by it has, from 1 January 2021, obtained an Inventory of Hazardous Material, in respect of the Vessel owned by it which shall be maintained throughout the Facility Period.
|
23.29 |
Sustainable Vessel dismantling
Each of the
Guarantor and the Borrowers confirms that it will ensure that any ship controlled by it or sold to an intermediary with the intention of being scrapped, is recycled at a recycling yard which conducts its recycling business in a
socially and environmentally responsible manner, in accordance with the provisions of The Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, 2009 and/or EU Ship regulation.
|
23.30 |
Reduction or increase of capital
No Borrower shall
purchase, cancel or redeem any part of its share capital or reduce or increase its authorised or issued or subscribed capital or resolve to do so.
|
23.31 |
Change of Managers
The Borrowers may, at their sole
discretion, at any time during the Facility Period, change the Managers of a Vessel from Diana Shipping to Diana Wilhelmsen, provided that the Borrowers shall notify the Agent two Business Days prior to such change and undertake to
provide the Agent with:
|
|
23.31.1 |
on or prior to such change:
|
|
(a) |
the documents listed in paragraphs 1(a)-(h) of Part I of Schedule 2;
|
|
(b) |
a legal opinion of the legal advisers to the Agent in each relevant jurisdiction, addressed to the Agent, or confirmation satisfactory that such opinion
will be given;
|
|
(c) |
the Managers’ Undertakings of the new Managers; and
|
|
(d) |
the ISM Company's current DOC,
|
|
23.31.2 |
within 1 Business Day after the change of the Approved Manager is concluded, the relevant Vessel's current ISSC and SMC; and
|
|
23.31.3 |
within 10 days the change of the Approved Manager is concluded, evidence that the prescribed particulars of the new Manager's Undertaking received by the
Agent under Clause 23.31.1 (c), have been delivered to the Registry of Companies/Corporations in Cyprus within the statutory time limit.
|
24. |
Events of Default
|
24.1 |
Events of Default
Each of the events or
circumstances set out in this Clause 24.1 is an Event of Default.
|
|
24.1.1 |
Non-payment
An Obligor does not pay on the due date
any amount payable by it under a Finance Document at the place at and in the currency in which it is expressed to be payable unless:
|
|
(a) |
its failure to pay is caused by:
|
|
(i) |
administrative or technical error; or
|
|
(ii) |
a Disruption Event; and
|
|
(b) |
payment is made within two Business Days of its due date.
|
|
24.1.2 |
Other specific obligations
|
|
(a) |
Any requirement of Clause 22 (
Financial Covenants
)
is not satisfied.
|
|
(b) |
An Obligor does not comply with any obligation in a Finance Document relating to the Insurances or with Clause 7.5 (
Mandatory prepayment on sale or Total Loss
) or with Clause 18.1 (
Additional security
) or with Clause 23.25 (
Sanctions
) or with Clause 23.27 (
Change of control
).
|
|
24.1.3 |
Other obligations
|
|
(a) |
An Obligor does not comply with any provision of a Finance Document (other than those referred to in Clause 24.1.1 (Non-payment) and Clause 24.1.2 (Other
specific obligations).
|
|
(b) |
No Event of Default under this Clause 24.1.3 will occur if the failure to comply is capable of remedy and is remedied within ten Business Days of the
earlier of (i) the Agent giving notice to the Borrowers and (ii) the Borrowers becoming aware of the failure to comply.
|
|
24.1.4 |
Misrepresentation
Any representation or statement
made or deemed to be made by an Obligor in any Finance Document or any other document delivered by or on behalf of an Obligor under or in connection with any Finance Document is or proves to have been incorrect or misleading when made
or deemed to be made.
|
|
24.1.5 |
Cross default
|
|
(a) |
Any Financial Indebtedness of an Obligor or of any other member of the Group is not paid when due nor within any originally applicable grace period.
|
|
(b) |
Any Financial Indebtedness of an Obligor or of any other member of the Group 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 an Obligor or of any other member of the Group is cancelled or suspended by a creditor of an Obligor or of
any other member of the Group as a result of an event of default (however described).
|
|
(d) |
Any creditor of an Obligor or of any other member of the Group becomes entitled to declare any Financial Indebtedness of an Obligor or of any other member
of the Group due and payable prior to its specified maturity as a result of an event of default (however described).
|
|
24.1.6 |
Insolvency
|
|
(a) |
An Obligor or any other member of the Group:
|
|
(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 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 with a view to rescheduling any of its
indebtedness.
|
|
(b) |
The value of the assets of an Obligor or any other member of the Group is less than its liabilities (taking into account contingent and prospective
liabilities).
|
|
(c) |
A moratorium is declared in respect of any indebtedness of an Obligor or any other member of the Group. If a moratorium occurs, the ending of the
moratorium will not remedy any Event of Default caused by that moratorium.
|
|
24.1.7 |
Insolvency proceedings
Any corporate action, legal
proceedings or other procedure or step is taken in relation to:
|
|
(a) |
the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration, bankruptcy or reorganisation (by way of voluntary
arrangement, scheme of arrangement or otherwise) of an Obligor or any other member of the Group;
|
|
(b) |
a composition, compromise, assignment or arrangement with any creditor of an Obligor or any other member of the Group;
|
|
(c) |
the appointment of a liquidator, receiver, administrative receiver, administrator, compulsory manager, trustee or other similar officer in respect of an
Obligor or any other member of the Group or any of its assets; or
|
|
(d) |
enforcement of any Encumbrance over any assets of an Obligor or any other member of the Group,
|
|
24.1.8 |
Creditors' process
Any expropriation, attachment,
sequestration, distress or execution (or any analogous process in any jurisdiction) affects any asset or assets of an Obligor or any other member of the Group and is not discharged within 7 days.
|
|
24.1.9 |
Unlawfulness and invalidity
|
|
(a) |
It is or becomes unlawful for an Obligor to perform any of its obligations under the Finance Documents or any Encumbrance created or expressed to be created
or evidenced by the Security Documents 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 ceases to be in full force and effect or any Encumbrance created or expressed to be created or evidenced by the Security Documents
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.
|
|
24.1.10 |
Cessation of business
An Obligor ceases, or
threatens to cease, to carry on all or a substantial part of its business.
|
|
24.1.11 |
Change in ownership or control
There is any
change in the beneficial ownership or control of a Borrower or (b) the Family ceases to be the major legal owner or ultimate beneficial owner of the Original Guarantor, with the exception of any financial institution acting as passive
investor.
|
|
24.1.12 |
Expropriation
The authority or ability of an
Obligor or any other member of the Group to conduct its business is limited or wholly or substantially curtailed by any seizure, expropriation, nationalisation, intervention, restriction or other action by or on behalf of any
governmental, regulatory or other authority or other person in relation to an Obligor or any member of the Group or any of its assets.
|
|
24.1.13 |
Repudiation and rescission of agreements
|
|
(a) |
An Obligor rescinds or purports to rescind or repudiates or purports to repudiate a Finance Document or evidences an intention to rescind or repudiate a
Finance Document.
|
|
(b) |
Subject to Clause 24.1.13(c), any party to any of the Relevant Documents that is not a Finance Document rescinds or purports to rescind or repudiates or
purports to repudiate that Relevant Document in whole or in part where to do so has or is, in the reasonable opinion of the Majority Lenders, likely to have a material adverse effect on the interests of the Lenders under the Finance
Documents.
|
|
(c) |
Any of the Management Agreements or a Charter is terminated, cancelled or otherwise ceases to remain in full force and effect at any time prior to its
contractual expiry date and is not immediately replaced by a similar agreement in form and substance satisfactory to the Majority Lenders.
|
|
24.1.14 |
Conditions subsequent
Any of the conditions
referred to in Clause 4.3 (
Conditions subsequent
) is not satisfied within the time reasonably required by the Agent.
|
|
24.1.15 |
Revocation or modification of Authorisation
Any
Authorisation of any governmental, judicial or other public body or authority which is now, or which at any time during the Facility Period becomes, necessary to enable any of the Obligors or any other person (except a Finance Party)
to comply with any of their obligations under any Relevant Document is not obtained, is revoked, suspended, withdrawn or withheld, or is modified in a manner which the Agent considers is, or may be, prejudicial to the interests of any
Finance Party, or ceases to remain in full force and effect.
|
|
24.1.16 |
Reduction of capital
A Borrower reduces its
authorised or issued or subscribed capital.
|
|
24.1.17 |
Loss of Vessel
A Vessel suffers a Total Loss or is
otherwise destroyed or abandoned, or a similar event occurs in relation to any other vessel which may from time to time be mortgaged to the Security Agent as security for the payment of all or any part of the Indebtedness, except that
a Total Loss (which term shall for the purposes of the remainder of this Clause 0 include an event similar to a Total Loss in relation to any other vessel) shall not be an Event of Default if:
|
|
(a) |
that Vessel or other vessel is insured in accordance with the Security Documents and a claim for Total Loss is available under the terms of the relevant
insurances; and
|
|
(b) |
no insurer has refused to meet or has disputed the claim for Total Loss and it is not apparent to the Agent that any such refusal or dispute is likely to
occur; and
|
|
(c) |
payment of all insurance proceeds in respect of the Total Loss is made in full to the Security Agent within 120 days of the occurrence of the casualty
giving rise to the Total Loss in question (save that, in relation to a Total Loss under part (c) of the definition of Total Loss, an Event of Default shall not occur if payment of all insurance proceeds in respect of that Total Loss
is made in full to the Security Agent within 120 days after that Total Loss has occurred) or (in each such case) such longer period as the Agent may agree.
|
|
24.1.18 |
Challenge to registration
The registration of a
Vessel or a Mortgage is contested or becomes void or voidable or liable to cancellation or termination, or the validity or priority of a Mortgage is contested.
|
|
24.1.19 |
War
The country of registration of a Vessel becomes
involved in war (whether or not declared) or civil war or is occupied by any other power and the Agent considers that, as a result, the security conferred by any of the Security Documents is materially prejudiced.
|
|
24.1.20 |
Master Agreement termination
A notice is given by
the Swap Provider under section 6(a) of the Master Agreement, or by any person under section 6(b)(iv) of the Master Agreement, in either case designating an Early Termination Date for the purpose of the Master Agreement, or the Master
Agreement is for any other reason terminated, cancelled, suspended, rescinded, revoked or otherwise ceases to remain in full force and effect.
|
|
24.1.21 |
Notice of determination
A Guarantor gives notice to
the Security Agent to determine any obligations under the relevant Guarantee.
|
|
24.1.22 |
Litigation
Any litigation, arbitration or
administrative proceedings or investigations of, or before, any court, arbitral body or agency are started or threatened, or any judgment or order of a court, arbitral body or agency is made, in relation to the Relevant Documents or
the transactions contemplated in the Relevant Documents or against an Obligor or any other member of the Group or its assets which have, or has, or are, or is, reasonably likely to have a Material Adverse Effect.
|
|
24.1.23 |
Material adverse change
Any event or circumstance
occurs which the Majority Lenders reasonably believe has or is reasonably likely to have a Material Adverse Effect.
|
|
24.1.24 |
Sanctions
|
|
(a) |
Any Relevant Person becomes a Restricted Party.
|
24.2 |
Acceleration
On and at any time after the
occurrence of an Event of Default the Agent may, and shall if so directed by the Majority Lenders:
|
|
24.2.1 |
by notice to the Borrowers:
|
|
(a) |
cancel the Total Commitments, at which time they shall immediately be cancelled;
|
|
(b) |
declare that all or part of the Loan, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents be
immediately due and payable, at which time they shall become immediately due and payable; and/or
|
|
(c) |
declare that all or part of the Loan be payable on demand, at which time it shall immediately become payable on demand by the Agent on the instructions of
the Majority Lenders; and/or
|
|
24.2.2 |
exercise or direct the Security Agent to exercise any or all of its rights, remedies, powers or discretions under the Finance Documents.
|
Section 9 |
Changes to Parties
|
25. |
CHANGES TO THE LENDERS
|
25.1 |
Assignments and transfers by the Lenders
Subject to
this Clause 25, a Lender (the "
Existing Lender
") may, subject to the prior written consent of the Borrowers (such consent not to be
unreasonably withheld or unduly delayed):
|
|
25.1.1 |
assign any of its rights; or
|
|
25.1.2 |
transfer by novation any of its rights and obligations,
|
25.2 |
Conditions of assignment or transfer
|
|
25.2.1 |
An Existing Lender must consult with the Borrowers for no more than five days before it may make an assignment or transfer in accordance with Clause 25.1 (
Assignments and transfers by the Lenders
) unless the assignment or transfer is:
|
|
(a) |
to another Lender or an Affiliate of any Lender;
|
|
(b) |
to a fund which is a Related Fund of that Existing Lender; or
|
|
(c) |
to the Arranger or an Affiliate of the Arranger and made in connection with the facilitation of primary syndication or first utilisation;
|
|
(d) |
made at a time when an Event of Default is continuing.
|
|
25.2.2 |
An assignment will only be effective on:
|
|
(a) |
receipt by the Agent (whether in the Assignment Agreement or otherwise) 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 other Finance Parties and the other Secured Parties as it would have been under if it had been an Original Lender; and
|
|
(b) |
performance by the Agent of all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to such
assignment to a New Lender, the completion of which the Agent shall promptly notify to the Existing Lender and the New Lender.
|
|
25.2.3 |
A transfer will only be effective if the procedure set out in Clause 25.5 (
Procedure for transfer
) is complied with.
|
|
25.2.4 |
If:
|
|
(a) |
a Lender assigns or transfers any of its rights or obligations under the Finance Documents or changes its Facility Office; and
|
|
(b) |
as a result of circumstances existing at the date the assignment, transfer or change occurs, a Borrower or a Guarantor would be obliged to make a payment to
the New Lender or Lender acting through its new Facility Office under Clause 12 (
Tax Gross Up and Indemnities
) or Clause 13 (
Increased Costs
),
|
|
(c) |
in respect of an assignment or transfer made in the ordinary course of the primary syndication of the Loan; or
|
|
(d) |
in relation to Clause 12.2 (
Tax gross-up
), to a
Treaty Lender that has included a confirmation of its scheme reference number and its jurisdiction of tax residence in accordance with Clause 12.2.6(b)(ii) (
Tax gross-up
) if the Borrower making the payment has not made a Borrower DTTP Filing in respect of that Treaty Lender.
|
|
25.2.5 |
Each New Lender, by executing the relevant Transfer Certificate or Assignment Agreement, 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 this Agreement on or prior to the date on which the transfer or assignment becomes effective
in accordance with this Agreement and that it is bound by that decision to the same extent as the Existing Lender would have been had it remained a Lender.
|
25.3 |
Assignment or transfer fee
|
|
25.3.1 |
Subject to Clause 25.3.2, the New Lender shall, on the date upon which an assignment or transfer takes effect, pay to the Agent (for its own account) a fee
of $3,000.
|
|
25.3.2 |
No fee is payable pursuant to Clause 25.3.1 if:
|
|
(a) |
the Agent agrees that no fee is payable; or
|
|
(b) |
the assignment or transfer is made by an Existing Lender:
|
|
(i) |
to an Affiliate of that Existing Lender;
|
|
(ii) |
to a fund which is a Related Fund of that Existing Lender; or
|
|
(iii) |
in connection with primary syndication of the Loan.
|
25.4 |
Limitation of responsibility of Existing Lenders
|
|
25.4.1 |
Unless expressly agreed to the contrary, an Existing Lender makes no representation or warranty and assumes no responsibility to a New Lender for:
|
|
(a) |
the legality, validity, effectiveness, adequacy or enforceability of the Relevant Documents or any other documents;
|
|
(b) |
the financial condition of any Obligor;
|
|
(c) |
the performance and observance by any Obligor or any other member of the Group of its obligations under the Relevant Documents or any other documents; or
|
|
(d) |
the accuracy of any statements (whether written or oral) made in or in connection with any of the Relevant Documents or any other document,
|
|
25.4.2 |
Each New Lender confirms to the Existing Lender and the other Finance Parties that it:
|
|
(a) |
has made (and shall continue to make) its own independent investigation and assessment of the financial condition and affairs of each Obligor and each other
member of the Group and its related entities in connection with its participation in this Agreement and has not relied exclusively on any information provided to it by the Existing Lender in connection with any of the Relevant
Documents; and
|
|
(b) |
will continue to make its own independent appraisal of the creditworthiness of each Obligor and each other member of the Group and its related entities
while any amount is or may be outstanding under the Finance Documents or any Commitment is in force.
|
|
25.4.3 |
Nothing in any Finance Document obliges an Existing Lender to:
|
|
(a) |
accept a re-transfer or re-assignment from a New Lender of any of the rights and obligations assigned or transferred under this Clause 25; or
|
|
(b) |
support any losses directly or indirectly incurred by the New Lender by reason of the non-performance by any Obligor of its obligations under the Relevant
Documents or otherwise.
|
25.5 |
Procedure for transfer
|
|
25.5.1 |
Subject to the conditions set out in Clause 25.2 (
Conditions
of assignment or transfer
) a transfer is effected in accordance with Clause 25.5.3 when the Agent executes an otherwise duly completed Transfer Certificate delivered to it by the Existing Lender and the New Lender. The Agent
shall, subject to
|
|
25.5.2 |
The Agent shall only be obliged to execute a Transfer Certificate delivered to it by the Existing Lender and the New Lender once it is satisfied it has
complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to the transfer to such New Lender.
|
|
25.5.3 |
Subject to Clause 25.9 (
Pro rata interest settlement
),
on the Transfer Date:
|
|
(a) |
to the extent that in the Transfer Certificate the Existing Lender seeks to transfer by novation its rights and obligations under the Finance Documents each
Borrower and each Guarantor and the Existing Lender shall be released from further obligations towards one another under the Finance Documents and their respective rights against one another shall be cancelled (being the "
Discharged Rights and Obligations
");
|
|
(b) |
each Borrower and each Guarantor and the New Lender shall assume obligations towards one another and/or acquire rights against one another which differ from
the Discharged Rights and Obligations only insofar as that Borrower and that Guarantor and the New Lender have assumed and/or acquired the same in place of that Borrower and that Guarantor and the Existing Lender;
|
|
(c) |
the Agent, the Security Agent, the Arranger, the New Lender and other Lenders shall acquire the same rights and assume the same obligations between
themselves as they would have acquired and assumed had the New Lender been an Original Lender with the rights and/or obligations acquired or assumed by it as a result of the transfer and to that extent the Agent, the Security Agent,
the Arranger and the Existing Lender shall each be released from further obligations to each other under the Finance Documents; and
|
|
(d) |
the New Lender shall become a Party as a "Lender".
|
25.6 |
Procedure for assignment
|
|
25.6.1 |
Subject to the conditions set out in Clause 25.2 (
Conditions
of assignment or transfer
) an assignment may be effected in accordance with Clause 25.6.3 when the Agent executes an otherwise duly completed Assignment Agreement delivered to it by the Existing Lender and the New Lender.
The Agent shall, subject to Clause 25.6.2, as soon as reasonably practicable after receipt by it of a duly completed Assignment Agreement appearing on its face to comply with the terms of this Agreement and delivered in accordance
with the terms of this Agreement, execute that Assignment Agreement.
|
|
25.6.2 |
The Agent shall only be obliged to execute an Assignment Agreement 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.
|
|
25.6.3 |
Subject to Clause 25.9 (
Pro rata interest settlement
),
on the Transfer Date:
|
|
(a) |
the Existing Lender will assign absolutely to the New Lender its rights under the Finance Documents and in respect of any Encumbrance created or expressed
to be created or evidenced by the Security Documents and expressed to be the subject of the assignment in the Assignment Agreement;
|
|
(b) |
the Existing Lender will be released from the obligations (the "
Relevant Obligations
") expressed to be the subject of the release in the Assignment Agreement (and any corresponding obligations by which it is bound in respect of any Encumbrance created or expressed to be created or
evidenced by the Security Documents); and
|
|
(c) |
the New Lender shall become a Party as a "Lender" and will be bound by obligations equivalent to the Relevant Obligations.
|
|
25.6.4 |
Lenders may utilise procedures other than those set out in this Clause 25.6 to assign their rights under the Finance Documents (but not, without the consent
of the relevant Obligor or unless in accordance with Clause 25.5 (
Procedure for transfer
), 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 25.2 (
Conditions of assignment or transfer
).
|
25.7 |
Copy of Transfer Certificate or Assignment Agreement to
Borrowers
The Agent shall, as soon as reasonably practicable after it has executed a Transfer Certificate or an Assignment Agreement, send to the Borrowers a copy of that Transfer Certificate or Assignment Agreement.
|
25.8 |
Security over Lenders' rights
In addition to the
other rights provided to Lenders under this Clause 25, each Lender may without consulting with or obtaining consent from any Obligor, at any time charge, assign or otherwise create Encumbrances in or over (whether by way of collateral
or otherwise) all or any of its rights under any Finance Document to secure obligations of that Lender including, without limitation:
|
|
25.8.1 |
any charge, assignment or other Encumbrance to secure obligations to a federal reserve or central bank; and
|
|
25.8.2 |
any charge, assignment or other Encumbrance 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,
|
|
(a) |
release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or Encumbrance for
the Lender as a party to any of the Finance Documents; or
|
|
(b) |
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.
|
25.9 |
Pro rata interest settlement
|
|
25.9.1 |
If the Agent has notified the Lenders that it is able to distribute interest payments on a "pro rata basis" to Existing Lenders and New Lenders then (in
respect of any transfer pursuant to Clause 25.5 (
Procedure for transfer
) or any assignment pursuant to Clause 25.6 (
Procedure for assignment
) the Transfer Date of which, in each case, is after the date of such notification and is not on the last day
of an Interest Period):
|
|
(a) |
any interest or fees in respect of the relevant participation which are expressed to accrue by reference to the lapse of time shall continue to accrue in
favour of the Existing Lender up to but excluding the Transfer Date ("
Accrued Amounts
") and shall become due and payable to the
Existing Lender (without further interest accruing on them) on the last day of the current Interest Period (or, if the Interest Period is longer than six Months, on the next of the dates which falls at intervals of six Months after
the first day of that Interest Period); and
|
|
(b) |
the rights assigned or transferred by the Existing Lender will not include the right to the Accrued Amounts, so that, for the avoidance of doubt:
|
|
(i) |
when the Accrued Amounts become payable, those Accrued Amounts will be payable for the account of the Existing Lender; and
|
|
(ii) |
the amount payable to the New Lender on that date will be the amount which would, but for the application of this Clause 25.9, have been payable to it on
that date, but after deduction of the Accrued Amounts.
|
|
25.9.2 |
In this Clause 25.9 references to "Interest Period" shall be construed to include a reference to any other period for accrual of fees.
|
|
25.9.3 |
An Existing Lender which retains the right to the Accrued Amounts pursuant to this Clause 25.9 but which does not have a Commitment shall be deemed not to
be a Lender for the purposes of ascertaining whether the agreement of any specified group of Lenders has been obtained to approve any request for a consent, waiver, amendment or other vote of Lenders under the Finance Documents.
|
26. |
Changes To The Obligors
|
26.1 |
No assignment or transfer by Obligors
No Obligor
may assign any of its rights or transfer any of its rights or obligations under the Finance Documents.
|
26.2 |
Additional Guarantors
|
|
26.2.1 |
Subject to compliance with the provisions of Clauses 21.7.3 and 21.7.4 ("
Know your customer" checks
), the Borrowers or the Original Guarantor may request that any Affiliate of a Borrower become a Guarantor.
|
|
26.2.2 |
An Affiliate of a Borrower shall become an Additional Guarantor if:
|
|
(a) |
the Borrowers or the Original Guarantor and the proposed Additional Guarantor deliver to the Agent a duly completed and executed Accession Deed; and
|
|
(b) |
the Agent has received all of the documents and other evidence listed in Part I of Schedule 2 (
Conditions Precedent
) and, if applicable, Part II of Schedule 2 (
Conditions Subsequent
)
in relation to that Additional Guarantor, each in form and substance satisfactory to the Agent.
|
|
26.2.3 |
The Agent shall notify the Borrowers and the Lenders promptly upon being satisfied that it has received (in form and substance satisfactory to it) all the
documents and other evidence listed in Part I of Schedule 2 (
Conditions Precedent
) and, if applicable, Part II of Schedule 2 (
Conditions Subsequent
).
|
|
26.2.4 |
Other than to the extent that the Majority Lenders notify the Agent in writing to the contrary before the Agent gives the notification described in Clause
26.2.3, the Lenders authorise (but do not require) the Agent to give that notification. The Agent shall not be liable for any damages, costs or losses whatsoever as a result of giving any such notification.
|
26.3 |
Resignation of a Guarantor
|
|
26.3.1 |
The Borrowers or the Original Guarantor may request that a Guarantor (other than the Original Guarantor ) ceases to be a Guarantor by delivering to the
Agent a Resignation Letter if all the Lenders have consented to the resignation of that Guarantor.
|
|
26.3.2 |
The Agent shall accept a Resignation Letter and notify the Borrowers and the Lenders of its acceptance if:
|
|
(a) |
the Borrowers have confirmed that no Default is continuing or would result from the acceptance of the Resignation Letter; and
|
|
(b) |
no payment is due from any Guarantor under Clause 19.1 (
Guarantee
and Indemnity
).
|
26.4 |
Repetition of Representations
|
27. |
Role of the Agent, the Security Agent and the Arranger
|
27.1 |
Appointment of the Agent
|
|
27.1.1 |
Each of the Arranger and the Lenders appoints the Agent to act as its agent under and in connection with the Finance Documents and each of the Arranger, the
Lenders and the Agent appoints the Security Agent to act as its security agent for the purpose of the Security Documents.
|
|
27.1.2 |
Each of the Arranger and the Lenders authorises the Agent and each of the Arranger, the Lenders and the Agent authorises the Security Agent to perform the
duties, obligations and responsibilities and to exercise the rights, powers, authorities and discretions specifically given to the Agent or the Security Agent (as the case may be) under or in connection with the Finance Documents
together with any other incidental rights, powers, authorities and discretions.
|
|
27.1.3 |
The Swap Provider appoints the Security Agent to act as its security agent for the purpose of the Security Documents and authorises the Security Agent to
exercise the rights, powers, authorities and discretions specifically given to the Security Agent under or in connection with the Security Documents together with any other incidental rights, powers, authorities and discretions.
|
|
27.1.4 |
Except in Clause 27.14 (
Replacement of the Agent
) or
where the context otherwise requires, references in this Clause 27 to the "
Agent
" shall mean the Agent and the Security Agent
individually and collectively and references in this Clause 27 to the "
Finance Documents
" or to any "
Finance Document
" shall not include the Master Agreement.
|
27.2 |
Instructions
|
|
27.2.1 |
The Agent shall:
|
|
(a) |
unless a contrary indication appears in a Finance Document, exercise or refrain from exercising any right, power, authority or discretion vested in it as
Agent in accordance with any instructions given to it by:
|
|
(i) |
all Lenders if the relevant Finance Document stipulates the matter is an all Lender decision; and
|
|
(ii) |
in all other cases, the Majority Lenders; and
|
|
(b) |
not be liable for any act (or omission) if it acts (or refrains from acting) in accordance with Clause 27.2.1(a).
|
|
27.2.2 |
The Agent shall be entitled to request instructions, or clarification of any instruction, from the Majority Lenders (or, if the relevant Finance Document
stipulates the matter is a decision for any other Lender or group of Lenders, from that Lender or group of Lenders) as to whether, and in what manner, it
|
|
27.2.3 |
Save in the case of decisions stipulated to be a matter for any other Lender or group of Lenders under the relevant Finance Document and unless a contrary
indication appears in a Finance Document, any instructions given to the Agent by the Majority Lenders shall override any conflicting instructions given by any other Parties and will be binding on all Finance Parties.
|
|
27.2.4 |
The Agent may refrain from acting in accordance with any instructions of any Lender or group of Lenders until it has received any indemnification and/or
security that it may in its discretion require (which may be greater in extent than that contained in the Finance Documents and which may include payment in advance) for any cost, loss or liability which it may incur in complying with
those instructions.
|
|
27.2.5 |
In the absence of instructions, the Agent may act (or refrain from acting) as it considers to be in the best interest of the Lenders.
|
|
27.2.6 |
The Agent is not authorised to act on behalf of a Lender (without first obtaining that Lender's consent) in any legal or arbitration proceedings relating to
any Finance Document. This Clause 27.2.6 shall not apply to any legal or arbitration proceeding relating to the perfection, preservation or protection of rights under the Finance Documents or the enforcement of the Finance Documents.
|
27.3 |
Duties of the Agent
|
|
27.3.1 |
The Agent's duties under the Finance Documents are solely mechanical and administrative in nature.
|
|
27.3.2 |
Subject to Clause 27.3.3, the Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Agent for that Party
by any other Party.
|
|
27.3.3 |
Without prejudice to Clause 25.7 (
Copy of Transfer
Certificate or Assignment Agreement to Borrowers
), Clause 27.3.1 shall not apply to any Transfer Certificate or any Assignment Agreement.
|
|
27.3.4 |
Except where a Finance Document specifically provides otherwise, the Agent is not obliged to review or check the adequacy, accuracy or completeness of any
document it forwards to another Party.
|
|
27.3.5 |
If the Agent receives notice from a Party referring to this Agreement, describing a Default and stating that the circumstance described is a Default, it
shall promptly notify the Finance Parties.
|
|
27.3.6 |
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, the
Arranger or the Security Agent) under this Agreement it shall promptly notify the other Finance Parties.
|
|
27.3.7 |
The Agent shall have only those duties, obligations and responsibilities expressly specified in the Finance Documents to which it is expressed to be a party
(and no others shall be implied).
|
27.4 |
Role of the Arranger
Except as specifically
provided in the Finance Documents, the Arranger has no obligations of any kind to any other Party under or in connection with any Finance Document.
|
27.5 |
No fiduciary duties
|
|
27.5.1 |
Subject to Clause 27.12 (
Trust
) which relates to the
Security Agent only, nothing in any Finance Document constitutes the Agent or the Arranger as a trustee or fiduciary of any other person.
|
|
27.5.2 |
Neither the Agent nor the Arranger shall be bound to account to any Lender for any sum or the profit element of any sum received by it for its own account.
|
27.6 |
Business with Obligors and the Group
The Agent and
the Arranger may accept deposits from, lend money to and generally engage in any kind of banking or other business with any Borrower, any other Obligor or its Affiliate and any other member of the Group.
|
27.7 |
Rights and discretions of the Agent
|
|
27.7.1 |
The Agent may:
|
|
(a) |
rely on any representation, communication, notice or document believed by it to be genuine, correct and appropriately authorised;
|
|
(b) |
assume that:
|
|
(i) |
any instructions received by it from the Majority Lenders, any Lenders or any group of Lenders are duly given in accordance with the terms of the Finance
Documents; and
|
|
(ii) |
unless it has received notice of revocation, that those instructions have not been revoked; and
|
|
(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,
|
|
27.7.2 |
The Agent may assume (unless it has received notice to the contrary in its capacity as agent for the Lenders or security agent for the Finance Parties (as
the case may be)) that:
|
|
(a) |
no Default has occurred (unless it has actual knowledge of a Default arising under Clause 24.1 (
Events of Default
));
|
|
(b) |
any right, power, authority or discretion vested in any Party or the Majority Lenders has not been exercised; and
|
|
(c) |
any notice or request made by the Borrowers (other than a Utilisation Request) is made on behalf of and with the consent and knowledge of all the Obligors.
|
|
27.7.3 |
The Agent may engage and pay for the advice or services of any lawyers, accountants, surveyors or other experts.
|
|
27.7.4 |
Without prejudice to the generality of Clause 27.7.3 or Clause 27.7.5, the Agent may at any time engage and pay for the services of any lawyers to act as
independent counsel to the Agent (and so separate from any lawyers instructed by the Lenders) if the Agent in its reasonable opinion deems this to be desirable.
|
|
27.7.5 |
The Agent may rely on the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts (whether
obtained by the Agent or by any other Party) and shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of its so relying.
|
|
27.7.6 |
The Agent may act in relation to the Finance Documents through its officers, employees and agents and the Agent shall not:
|
|
(a) |
be liable for any error of judgment made by any such person; or
|
|
(b) |
be bound to supervise, or be in any way responsible for any loss incurred by reason of misconduct, omission or default on the part, of any such person,
|
|
27.7.7 |
Unless a Finance Document expressly provides otherwise the Agent may disclose to any other Party any information it reasonably believes it has received as
agent under this Agreement.
|
|
27.7.8 |
Without prejudice to the generality of Clause 27.7.7, the Agent:
|
|
(a) |
may disclose; and
|
|
(b) |
on the written request of the Borrowers or the Majority Lenders shall, as soon as reasonably practicable, disclose,
|
|
27.7.9 |
Notwithstanding any other provision of any Finance Document to the contrary, neither the Agent nor the Arranger is obliged to do or omit to do anything if
it would or might in its reasonable opinion constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality.
|
|
27.7.10 |
The Agent is not obliged to disclose to any Finance Party any details of the rate notified to the Agent by any Lender or the identity of any such Lender for
the purpose of Clause 10.2 (
Market Disruption
).
|
|
27.7.11 |
Notwithstanding any provision of any Finance Document to the contrary, the Agent is not obliged to expend or risk its own funds or otherwise incur any
financial liability in the performance of its duties, obligations or responsibilities or the exercise of any right, power, authority or discretion if it has grounds for believing the repayment of such funds or adequate indemnity
against, or security for, such risk or liability is not reasonably assured to it.
|
27.8 |
Responsibility for documentation
Neither the Agent
nor the Arranger is responsible or liable for:
|
|
27.8.1 |
the adequacy, accuracy and/or completeness of any information (whether oral or written) supplied by the Agent, the Arranger, an Obligor or any other person
given in or in connection with any Relevant Document or the transactions contemplated in the Finance Documents; or
|
|
27.8.2 |
the legality, validity, effectiveness, adequacy or enforceability of any Relevant Document or any other agreement, arrangement or document entered into,
made or executed in anticipation of or in connection with any Relevant Document.; or
|
|
27.8.3 |
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 applicable law or regulation relating to insider dealing or otherwise.
|
27.9 |
No duty to monitor
The Agent shall not be bound to
enquire:
|
|
27.9.1 |
whether or not any Default has occurred;
|
|
27.9.2 |
as to the performance, default or any breach by any Party of its obligations under any Finance Document; or
|
|
27.9.3 |
whether any other event specified in any Finance Document has occurred.
|
27.10 |
Exclusion of liability
|
|
27.10.1 |
Without limiting Clause 27.10.2 (and without prejudice to any other provision of any Finance Document excluding or limiting the liability of the Agent) the
Agent shall not be liable (including, without limitation, for negligence or any other category of liability whatsoever) for:
|
|
(a) |
any damages, costs or losses to any person, any diminution in value, or any liability whatsoever arising as a result of taking or not taking any action
under or in connection with any Finance Document or any Encumbrance created or expressed to be created or evidenced by the Security Documents, unless directly caused by its gross negligence or wilful misconduct;
|
|
(b) |
exercising, or not exercising, any right, power, authority or discretion given to it by, or in connection with, any Finance Document, any Encumbrance
created or expressed to be created or evidenced by the Security Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, any Finance Document or any
Encumbrance created or expressed to be created or evidenced by the Security Documents;
|
|
(c) |
any shortfall which arises on the enforcement or realisation of the Trust Property; or
|
|
(d) |
without prejudice to the generality of Clauses 27.10.1(a), 27.10.1(b) and 27.10.1(c), any damages, costs or losses to any person, any diminution in value or
any liability whatsoever arising as a result of:
|
|
(i) |
any act, event or circumstance not reasonably within its control; or
|
|
(ii) |
the general risks of investment in, or the holding of assets in, any jurisdiction,
|
|
27.10.2 |
No Party (other than the Agent) may take any proceedings against any officer, employee or agent of the Agent in respect of any claim it might have against
the Agent or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Relevant Document and any officer, employee or agent of the Agent may rely on this Clause subject to Clause 1.7 (
Third Party Rights
) and the provisions of the Third Parties Act.
|
|
27.10.3 |
The Agent will not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be
paid by the Agent if the Agent has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating
|
|
27.10.4 |
Nothing in this Agreement shall oblige the Agent or the Arranger to carry out:
|
|
(a) |
any "know your customer" or other checks in relation to any person;
|
|
(b) |
any check on the extent to which any transaction contemplated by this Agreement might be unlawful for any Lender or for any Affiliate of any Lender,
|
|
27.10.5 |
Without prejudice to any provision of any Finance Document excluding or limiting the Agent's liability, any liability of the Agent arising under or in
connection with any Finance Document or any Encumbrance created or expressed to be created or evidenced by the Security Documents 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 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
at any time which increase the amount of that loss. In no event shall the Agent 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 has been advised of the possibility of such loss or damages.
|
27.11 |
Lenders' indemnity to the Agent
|
|
27.11.1 |
Each Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments are then zero, to its share of the Total Commitments
immediately prior to their reduction to zero) indemnify the Agent and every Receiver and Delegate, within three Business Days of demand, against any cost, loss or liability (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, Receiver's or Delegate's gross negligence or wilful misconduct) (or, in the case of any cost, loss or liability pursuant to
Clause 31.11 (
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, Receiver or Delegate
under, or exercising any authority conferred under, the Finance Documents (unless the relevant Agent, Receiver or Delegate has been reimbursed by an Obligor pursuant to a Finance Document).
|
|
27.11.2 |
Subject to Clause 27.11.3, the Borrowers shall immediately on demand reimburse any Lender for any payment that Lender makes to the Agent pursuant to Clause
27.11.1
|
|
27.11.3 |
Clause 27.11.2 shall not apply to the extent that the indemnity payment in respect of which the Lender claims reimbursement relates to a liability of the
Agent to an Obligor.
|
27.12 |
Trust
The Security Agent agrees and declares, and
each of the other Finance Parties acknowledges, that, subject to the terms and conditions of this Clause 27.12, the Security Agent holds the Trust Property on trust for the Finance Parties absolutely. Each of the other Finance
Parties agrees that the obligations, rights and benefits vested in the Security Agent shall be performed and exercised in accordance with this Clause 27.12. The Security Agent shall have the benefit of all of the provisions of this
Agreement benefiting it in its capacity as security agent for the Finance Parties, and all the powers and discretions conferred on trustees by the Trustee Act 1925 (to the extent not inconsistent with this Agreement). In addition:
|
|
27.12.1 |
the Security Agent and any Delegate may indemnify itself or himself out of the Trust Property against all liabilities, costs, fees, damages, charges, losses
and expenses sustained or incurred by it or him in relation to the taking or holding of any of the Trust Property or in connection with the exercise or purported exercise of the rights, trusts, powers and discretions vested in the
Security Agent or any Delegate by or pursuant to the Security Documents or in respect of anything else done or omitted to be done in any way relating to the Security Documents;
|
|
27.12.2 |
the other Finance Parties acknowledge that the Security Agent shall be under no obligation to insure any property nor to require any other person to insure
any property and shall not be responsible for any loss which may be suffered by any person as a result of the lack or insufficiency of any insurance;
|
|
27.12.3 |
the Finance Parties agree that the perpetuity period applicable to the trusts declared by this Agreement shall be the period of 125 years from the date of
this Agreement;
|
|
27.12.4 |
the Security Agent shall not be liable for any failure, omission, or defect in perfecting the security constituted or created by any Finance Document
including, without limitation, any failure to register the same in accordance with the provisions of any of the documents of title of any Obligor to any of the assets thereby charged or effect or procure registration of or otherwise
protect the security created by any Security Document under any registration laws in any jurisdiction and may accept without enquiry such title as any Obligor may have to any asset;
|
|
27.12.5 |
the Security Agent shall not be under any obligation to hold any title deed, Finance Document or any other documents in connection with the Finance
Documents or any other documents in connection with the property charged by any Finance Document or any other such security in its own possession or to take any steps to protect or preserve the same, and may permit any
|
|
27.12.6 |
save as otherwise provided in the Finance Documents, all moneys which under the trusts therein contained are received by the Security Agent may be placed on
deposit in the name of or under the control of the Security Agent at such bank or institution (including the Security Agent) and upon such terms as the Security Agent may think fit pending application of those moneys in accordance
with Clause 28 (
Application of Proceeds
).
|
27.13 |
Resignation of the Agent
|
|
27.13.1 |
The Agent may resign and appoint one of its Affiliates acting through an office as successor by giving notice to the other Finance Parties and the
Borrowers.
|
|
27.13.2 |
Alternatively the Agent may resign by giving 30 days' notice to the other Finance Parties and the Borrowers, in which case the Majority Lenders (after
consultation with the Borrowers) may appoint a successor Agent.
|
|
27.13.3 |
If the Majority Lenders have not appointed a successor Agent in accordance with Clause 27.13.2 within 20 days after notice of resignation was given, the
retiring Agent (after consultation with the Borrowers) may appoint a successor Agent.
|
|
27.13.4 |
If the Agent wishes to resign because (acting reasonably) it has concluded that it is no longer appropriate for it to remain as agent and the Agent is
entitled to appoint a successor Agent under Clause 27.13.3, the Agent may (if it concludes (acting reasonably) that it is necessary to do so in order to persuade the proposed successor Agent to become a party to this Agreement as
Agent) agree with the proposed successor Agent amendments to this Clause 27 and any other term of this Agreement dealing with the rights or obligations of the Agent consistent with then current market practice for the appointment and
protection of corporate trustees together with any reasonable amendments to the agency fee payable under this Agreement which are consistent with the successor Agent's normal fee rates and those amendments will bind the Parties.
|
|
27.13.5 |
The retiring Agent shall make available to the successor Agent such documents and records and provide such assistance as the successor Agent may reasonably
request for the purposes of performing its functions as Agent under the Finance Documents. The Borrowers shall, within three Business Days of demand, reimburse the retiring Agent for the amount of all costs and expenses (including
legal fees) properly incurred by it in making available such documents and records and providing such assistance.
|
|
27.13.6 |
The Agent's resignation notice shall only take effect upon the appointment of a successor and (in the case of the Security Agent) the transfer of all the
Trust Property to that successor.
|
|
27.13.7 |
Upon the appointment of a successor, the retiring Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its
obligations under Clause 27.13.5) but shall remain entitled to the benefit of Clause 14.3 (
Indemnity to the Agent
) and this Clause
27 (and any agency fees for the account of the retiring Agent shall cease to accrue from (and shall be payable on) that date). Any successor and each of the other Parties shall have the same rights and obligations amongst themselves
as they would have had if such successor had been an original Party.
|
|
27.13.8 |
The Agent shall resign in accordance with Clause 27.13.2 (and, to the extent applicable, shall use reasonable endeavours to appoint a successor Agent
pursuant to Clause 27.13.3) 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:
|
|
(a) |
the Agent fails to respond to a request under Clause 12.8 (
FATCA
information
) and 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;
|
|
(b) |
the information supplied by the Agent pursuant to Clause 12.8 (
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
|
|
(c) |
the Agent notifies the Borrowers 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;
|
27.14 |
Replacement of the Agent
|
|
27.14.1 |
After consultation with the Borrowers, the Majority Lenders may, by giving 30 days' notice to the Agent replace the Agent by appointing a successor Agent.
|
|
27.14.2 |
The retiring Agent shall (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 function as Agent under the Finance Documents.
|
|
27.14.3 |
The appointment of the successor Agent shall take effect on the date specified in the notice from the Majority Lenders to the retiring Agent. As from this
date, the retiring Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under Clause 27.14.2 but shall remain entitled to the benefit of Clause 14.3 (
Indemnity to the Agent
) and this Clause 27 (and any agency fees for the
|
|
27.14.4 |
Any successor Agent and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had
been an original Party.
|
27.15 |
Confidentiality
|
|
27.15.1 |
In acting as agent for the Finance Parties, the Agent shall be regarded as acting through its agency division which shall be treated as a separate entity
from any other of its divisions or departments.
|
|
27.15.2 |
If information is received by another division or department of the Agent, it may be treated as confidential to that division or department and the Agent
shall not be deemed to have notice of it.
|
27.16 |
Relationship with the Lenders
|
|
27.16.1 |
Subject to Clause 25.9 (
Pro rata interest settlement
),
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:
|
|
(a) |
entitled to or liable for any payment due under any Finance Document on that day; and
|
|
(b) |
entitled to receive and act upon any notice, request, document or communication or make any decision or determination under any Finance Document made or
delivered on that day,
|
|
27.16.2 |
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
dispatched to that Lender under the Finance Documents. Such notice shall contain the address, fax number and (where communication by electronic mail or other electronic means is permitted under Clause 33.5 (
Electronic communication
)) electronic mail address and/or any other information required to enable the sending and receipt of information by that means
(and, in each case, the department or officer, if any, for whose attention communication is to be made) and be treated as a notification of a substitute address, fax number, electronic mail address, department and officer by that
Lender for the purposes of Clause 33.2 (
Addresses
) and Clause 33.5 (
Electronic communication
) and the Agent shall be entitled to treat such person as the person entitled to receive all such notices, communications, information and documents as though that
person were that Lender.
|
27.17 |
Credit appraisal by the Lenders
Without affecting
the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Relevant Document, each Lender confirms to the Agent and the Arranger that it has been, and
|
|
27.17.1 |
the financial condition, status and nature of each Obligor and each other member of the Group;
|
|
27.17.2 |
the legality, validity, effectiveness, adequacy or enforceability of any Relevant Document and any other agreement, arrangement or document entered into,
made or executed in anticipation of, under or in connection with any Relevant Document;
|
|
27.17.3 |
whether that Lender 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 Relevant Document, the transactions contemplated by the Relevant Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of under or in connection with any Relevant Document; and
|
|
27.17.4 |
the adequacy, accuracy and/or completeness of any information provided by the Agent, any Party or by any other person under or in connection with any
Relevant Document, the transactions contemplated by the Relevant Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Relevant Document; and
|
|
27.17.5 |
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 Encumbrance created or
expressed to be created or evidenced by the Security Documents or the existence of any Encumbrance affecting the Charged Property.
|
27.18 |
Reference Banks
If a Reference Bank (or, if a
Reference Bank is not a Lender, the Lender of which it is an Affiliate) ceases to be a Lender, the Agent shall (in consultation with the Borrowers) appoint another Lender or an Affiliate of a Lender to replace that Reference Bank.
|
27.19 |
Agent's management time
Any amount payable to the
Agent under Clause 14.3 (
Indemnity to the Agent
), Clause 14.4 (
Indemnity to the Security Agent
), Clause 16 (
Costs and expenses
) and Clause 27.11 (
Lenders' indemnity to the Agent
) shall include the cost of utilising the Agent's management time or other resources and will be
calculated on the basis of such reasonable daily or hourly rates as the Agent may notify to the Borrowers and the Lenders, and is in addition to any fee paid or payable to the Agent under Clause 11 (
Fees
).
|
27.20 |
Deduction from amounts payable by the Agent
If any
Party owes an amount to the Agent under the Finance Documents the Agent may, after giving notice to that Party, deduct an amount not exceeding that amount from any payment to that Party which the Agent would otherwise be obliged to
make under the Finance Documents and apply the amount deducted in or towards satisfaction of the amount owed. For the purposes of the Finance Documents that Party shall be regarded as having received any amount so deducted.
|
28. |
Application of Proceeds
|
28.1 |
Order of application
Subject to Clause 28.2
(Prospective liabilities), all amounts from time to time received or recovered by the Security Agent pursuant to the terms of any Finance Document or in connection with the realisation or enforcement of all or any Encumbrance created
or expressed to be created under the Security Documents (for the purposes of this Clause 28, the "
Recoveries
") shall be held by the
Security Agent on trust to apply them at any time as the Security Agent (in its discretion) sees fit, to the extent permitted by applicable law (and subject to the provisions of this Clause 28), in the following order:
|
|
28.1.1 |
in discharging any sums owing to the Security Agent, any Receiver or any Delegate;
|
|
28.1.2 |
in payment of all costs and expenses incurred by the Agent or any Secured Party in connection with any realisation or enforcement of any Encumbrance created
or expressed to be created under the Security Documents taken in accordance with the terms of this Agreement; and
|
|
28.1.3 |
in payment to the Agent for application in accordance with Clause 31.5 (
Partial payments).
|
28.2 |
Prospective liabilities
Following enforcement of
any Encumbrance created or expressed to be created under the Security Documents the Security Agent may, in its discretion, hold any amount of the Recoveries in an interest bearing suspense or impersonal account(s) in the name of the
Security Agent with such financial institution (including itself) and for so long as the Security Agent shall think fit (the interest being credited to the relevant account) for later application under Clause 28.1 (
Order of application
) in respect of:
|
|
28.2.1 |
any sum to the Security Agent, any Receiver or any Delegate; and
|
|
28.2.2 |
any part of the Indebtedness,
|
28.3 |
Investment of proceeds
Prior to the application of
the proceeds of the Recoveries in accordance with Clause 28.1 (
Order of application
) the Security Agent may, in its discretion,
hold all or part of those proceeds in an interest bearing suspense or impersonal account(s) in the name of the Security Agent with such financial institution (including itself) and for so long as the Security Agent shall think fit
(the interest being credited to the relevant account) pending the application from time to time of those moneys in the Security Agent's discretion in accordance with the provisions of this Clause 28.
|
28.4 |
Currency conversion
|
|
28.4.1 |
For the purpose of, or pending the discharge of, any part of the Indebtedness the Security Agent may convert any moneys received or recovered by the
Security Agent from one currency to another, at a market rate of exchange.
|
|
28.4.2 |
The obligations of any Obligor to pay in the due currency shall only be satisfied to the extent of the amount of the due currency purchased after deducting
the costs of conversion.
|
28.5 |
Permitted deductions
The Security Agent shall be
entitled, in its discretion:
|
|
28.5.1 |
to set aside by way of reserve amounts required to meet, and to make and pay, any deductions and withholdings (on account of taxes or otherwise) which it is
or may be required by any applicable law to make from any distribution or payment made by it under this Agreement; and
|
|
28.5.2 |
to pay all Taxes which may be assessed against it in respect of any of the Trust Property, or as a consequence of performing its duties, or by virtue of its
capacity as Security Agent under any of the Finance Documents or otherwise (other than in connection with its remuneration for performing its duties under this Agreement).
|
28.6 |
Good discharge
|
|
28.6.1 |
Any payment to be made in respect of the Indebtedness by the Security Agent may be made to the Agent on behalf of the Finance Parties and any payment made
in that way shall be a good discharge, to the extent of that payment, by the Security Agent.
|
|
28.6.2 |
The Security Agent is under no obligation to make the payments to the Agent under Clause 28.6.1 in the same currency as that in which the obligations and
liabilities owing to the relevant Finance Party are denominated.
|
29. |
Conduct of Business by the Finance Parties
|
29.1 |
interfere with the right of any Finance Party to arrange its affairs (tax or otherwise) in whatever manner it thinks fit;
|
29.2 |
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
|
29.3 |
oblige any Finance Party to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax.
|
30. |
Sharing Among the Finance Parties
|
30.1 |
Payments to Finance Parties
If a Finance Party (a "
Recovering Finance Party
") receives or recovers any amount from an Obligor other than in accordance with Clause 31 (
Payment Mechanics
) (a "
Recovered
Amount
") and applies that amount to a payment due under the Finance Documents then:
|
|
30.1.1 |
the Recovering Finance Party shall, within three Business Days, notify details of the receipt or recovery, to the Agent;
|
|
30.1.2 |
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
|
|
30.1.3 |
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 31.5 (
Partial payments
).
|
30.2 |
Redistribution of payments
The Agent shall treat
the Sharing Payment as if it had been paid by the relevant Obligor and distribute it between the Finance Parties (other than the Recovering Finance Party) (the "
Sharing Finance Parties
") in accordance with Clause 31.5 (
Partial payments
) towards the
obligations of that Obligor to the Sharing Finance Parties.
|
30.3 |
Recovering Finance Party's rights
On a distribution
by the Agent under Clause 30.2 (
Redistribution of payments
) of a payment received by a Recovering Finance Party from an Obligor,
as between the relevant Obligor and the Recovering Finance Party, an amount of the Recovered Amount equal to the Sharing Payment will be treated as not having been paid by that Obligor.
|
30.4 |
Reversal of redistribution
If any part of the
Sharing Payment received or recovered by a Recovering Finance Party becomes repayable and is repaid by that Recovering Finance Party, then:
|
|
30.4.1 |
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
|
|
30.4.2 |
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.
|
30.5 |
Exceptions
|
|
30.5.1 |
This Clause 30 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.
|
|
30.5.2 |
A Recovering Finance Party is not obliged to share with any other Finance Party any amount which the Recovering Finance Party has received or recovered as a
result of taking legal or arbitration proceedings, if:
|
|
(a) |
it notified that other Finance Party of the legal or arbitration proceedings; and
|
|
(b) |
that other Finance Party had an opportunity to participate in those legal or arbitration proceedings but did not do so as soon as
|
31. |
PAYMENT MECHANICS
|
31.1 |
Payments to the Agent
On each date on which an
Obligor or a Lender is required to make a payment under a Finance Document (other than the Master Agreement), that Obligor or that 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.
|
31.2 |
Distributions by the Agent
Each payment received by
the Agent under the Finance Documents for another Party shall, subject to Clause 31.3 (
Distributions to an Obligor
) and Clause
31.4 (
Clawback and pre-funding
) be made available by the Agent as soon as practicable after receipt to the Party entitled to
receive payment in accordance with this Agreement (in the case of a Lender, for the account of its Facility Office), to such account as that Party may notify to the Agent by not less than five Business Days' notice with a bank
specified by that Party in the principal financial centre of the country of that currency.
|
31.3 |
Distributions to an Obligor
The Agent may (with the
consent of an Obligor or in accordance with Clause 32 (
Set-Off
)) apply any amount received by it for that Obligor in or towards
payment (on the date and in the currency and funds of receipt) of any amount due from that Obligor under the Finance Documents or in or towards purchase of any amount of any currency to be so applied.
|
31.4 |
Clawback and pre-funding
|
|
31.4.1 |
Where a sum is to be paid to the Agent under the Finance Documents for another Party, the Agent is not obliged to pay that sum to that other Party (or to
enter into or perform any related exchange contract) until it has been able to establish to its satisfaction that it has actually received that sum.
|
|
31.4.2 |
Unless Clause 31.4.3 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.
|
|
31.4.3 |
If the Agent is willing to make available amounts for the account of a 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:
|
|
(a) |
the Agent shall notify the Borrowers of that Lender's identity and the Borrower to whom that sum was made available shall on demand refund it to the Agent;
and
|
|
(b) |
the Lender by whom those funds should have been made available or, if that Lender fails to do so, the Borrower to whom that sum was made available, 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.
|
31.5 |
Partial payments
|
|
31.5.1 |
If the Agent receives a payment that is insufficient to discharge all the amounts then due and payable by an Obligor under the Finance Documents (other than
the Master Agreement), the Agent shall apply that payment towards the obligations of that Obligor under the Finance Documents (other than the Master Agreement) in the following order:
|
|
(a) |
first, in or towards payment pro rata of any unpaid fees, costs and expenses of the Agent or the Security Agent under the Finance Documents;
|
|
(b) |
secondly, in or towards payment pro rata of any accrued interest, fee or commission due but unpaid under this Agreement;
|
|
(c) |
thirdly, in or towards payment pro rata of any principal due but unpaid under this Agreement; and
|
|
(d) |
fourthly, in or towards payment pro rata of any other sum due but unpaid under the Finance Documents,
|
|
31.5.2 |
The Agent shall, if so directed by the Majority Lenders, vary the order set out in Clauses 31.5.1(b) to 31.5.1(d).
|
|
31.5.3 |
Clauses 31.5.1 and 31.5.2 will override any appropriation made by an Obligor.
|
31.6 |
No set-off by Obligors
All payments to be made by
an Obligor under the Finance Documents shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim.
|
31.7 |
Business Days
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).
|
31.8 |
Currency of account
|
|
31.8.1 |
Subject to Clauses 31.8.2 to 31.8.5, dollars is the currency of account and payment for any sum due from an Obligor under any Finance Document.
|
|
31.8.2 |
A repayment or payment of all or part of a Vessel Loan or an Unpaid Sum shall be made in the currency in which that Vessel Loan or Unpaid Sum is
denominated, pursuant to this Agreement, on its due date.
|
|
31.8.3 |
Each payment of interest shall be made in the currency in which the sum in respect of which the interest is payable was denominated, pursuant to this
Agreement, when that interest accrued.
|
|
31.8.4 |
Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred.
|
|
31.8.5 |
Any amount expressed to be payable in a currency other than dollars shall be paid in that other currency.
|
31.9 |
Control account
The Agent shall open and maintain
on its books a control account in the names of the Borrowers showing the advance of the Loan and the computation and payment of interest and all other sums due under this Agreement. The Borrowers' obligations to repay the Loan and to
pay interest and all other sums due under this Agreement shall be evidenced by the entries from time to time made in the control account opened and maintained under this Clause 31.9 and those entries will, in the absence of manifest
error, be conclusive and binding.
|
31.10 |
Change of currency
|
|
31.10.1 |
Unless otherwise prohibited by law, if more than one currency or currency unit are at the same time recognised by the central bank of any country as the
lawful currency of that country, then:
|
|
(a) |
any reference in the Finance Documents to, and any obligations arising under the Finance Documents in, the currency of that country shall be translated
into, or paid in, the currency or currency unit of that country designated by the Agent (after consultation with the Borrowers); and
|
|
(b) |
any translation from one currency or currency unit to another shall be at the official rate of exchange recognised by the central bank for the conversion of
that currency or currency unit into the other, rounded up or down by the Agent (acting reasonably).
|
|
31.10.2 |
If a change in any currency of a country occurs, this Agreement will, to the extent the Agent (acting reasonably and after consultation with the Borrowers)
specifies to be necessary, be amended to comply with any generally accepted conventions and market practice in the Relevant Market and otherwise to reflect the change in currency.
|
31.11 |
Disruption to payment systems etc.
If either the
Agent determines that a Disruption Event has occurred or the Agent is notified by the Borrowers that a Disruption Event has occurred:
|
|
31.11.1 |
the Agent may, and shall if requested to do so by the Borrowers, consult with the Borrowers with a view to agreeing with the Borrowers such changes to the
operation or administration of the Loan as the Agent may deem necessary in the circumstances;
|
|
31.11.2 |
the Agent shall not be obliged to consult with the Borrowers in relation to any changes mentioned in Clause 31.11.1 if, in its opinion, it is not
practicable to do so in the circumstances and, in any event, shall have no obligation to agree to any such changes;
|
|
31.11.3 |
the Agent may consult with the Finance Parties in relation to any changes mentioned in Clause 31.11.1 but shall not be obliged to do so if, in its opinion,
it is not practicable to do so in the circumstances;
|
|
31.11.4 |
any such changes agreed upon by the Agent and the Borrowers 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 37 (
Amendments and Waivers
);
|
|
31.11.5 |
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 31.11; and
|
|
31.11.6 |
the Agent shall notify the Finance Parties of all changes agreed pursuant to Clause 31.11.4.
|
32. |
Set-Off
|
32.1 |
Set-off
A Finance Party may set off any matured
obligation due from an Obligor under the Finance Documents (to the extent beneficially owned by that Finance Party) against any matured obligation owed by that Finance Party to that Obligor, regardless of the place of payment, booking
branch or currency of either obligation. If the obligations are in different currencies, the Finance Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.
|
32.2 |
Master Agreement rights
The rights conferred on the
Swap Provider by this Clause 32 shall be in addition to, and without prejudice to or limitation of, the rights of netting and set off conferred on the Swap Provider by the Master Agreement.
|
33. |
NOTICES
|
33.1 |
Communications in writing
Any communication to be
made under or in connection with the Finance Documents shall be made in writing and, unless otherwise stated, may be made by fax or letter.
|
33.2 |
Addresses
The address and fax number (and the
department or officer, if any, for whose attention the communication is to be made) of each Party for any
|
|
33.2.1 |
in the case of each Borrower, that identified with its name below;
|
|
33.2.2 |
in the case of each Guarantor, that identified with its name below;
|
|
33.2.3 |
in the case of each Lender, that notified in writing to the Agent on or prior to the date on which it becomes a Party; and
|
|
33.2.4 |
in the case of the Swap Provider, that identified with its name below; and
|
|
33.2.5 |
in the case of the Agent or the Security Agent, that identified with its name below,
|
33.3 |
Delivery
Any communication or document made or
delivered by one person to another under or in connection with the Finance Documents will only be effective:
|
|
33.3.1 |
if by way of fax, when received in legible form; or
|
|
33.3.2 |
if by way of letter, when it has been left at the relevant address or five Business Days after being deposited in the post postage prepaid in an envelope
addressed to it at that address;
|
33.4 |
Notification of address and fax number
Promptly
upon changing its address or fax number, the Agent shall notify the other Parties.
|
33.5 |
Electronic communication
|
|
33.5.1 |
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:
|
|
(a) |
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
|
|
(b) |
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.
|
|
33.5.2 |
Any such electronic communication 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.
|
|
33.5.3 |
Any such electronic communication 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.
|
|
33.5.4 |
Any electronic communication which becomes effective, in accordance with Clause 33.5.3, 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 shall be deemed only to become effective on the following day.
|
|
33.5.5 |
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 33.5.
|
33.6 |
Use of websites
|
|
33.6.1 |
Each Borrower may satisfy its obligations under this Agreement to deliver any information in relation to those Lenders (the "
Website Lenders
") who accept this method of communication by posting this information onto an electronic website designated by the Borrowers and the Agent (the
"
Designated Website
") if:
|
|
(a) |
the Agent expressly agrees (after consultation with each of the Lenders) that it will accept communication of the information by this method;
|
|
(b) |
both the Borrowers and the Agent are aware of the address of and any relevant password specifications for the Designated Website; and
|
|
(c) |
the information is in a format previously agreed between the Borrowers and the Agent.
|
|
33.6.2 |
The Agent shall supply each Website Lender with the address of and any relevant password specifications for the Designated Website following designation of
that website by the Borrowers and the Agent.
|
|
33.6.3 |
Each Borrower shall promptly upon becoming aware of its occurrence notify the Agent if:
|
|
(a) |
the Designated Website cannot be accessed due to technical failure;
|
|
(b) |
the password specifications for the Designated Website change;
|
|
(c) |
any new information which is required to be provided under this Agreement is posted onto the Designated Website;
|
|
(d) |
any existing information which has been provided under this Agreement and posted onto the Designated Website is amended; or
|
|
(e) |
that Borrower becomes aware that the Designated Website or any information posted onto the Designated Website is or has been infected by any electronic
virus or similar software.
|
|
33.6.4 |
Any Website Lender may request, through the Agent, one paper copy of any information required to be provided under this Agreement which is posted onto the
Designated Website. Each Borrower shall at its own cost comply with any such request within ten Business Days.
|
33.7 |
English language
Any notice given under or in
connection with any Finance Document must be in English. All other documents provided under or in connection with any Finance Document must be:
|
|
33.7.1 |
in English; or
|
|
33.7.2 |
if not in English, and if so required by the Agent, accompanied by a certified English translation and, in this case, the English translation will prevail
unless the document is a constitutional, statutory or other official document.
|
34. |
Calculations and Certificates
|
34.1 |
Accounts
In any litigation or arbitration
proceedings arising out of or in connection with a Finance Document, the entries made in the accounts maintained by the Agent pursuant to Clause 31.9 (
Control account
) are
prima facie
evidence of the matters to which they relate.
|
34.2 |
Certificates and determinations
Any certification
or determination by the Agent of a rate or amount under any Finance Document is, in the absence of manifest error, conclusive evidence of the matters to which it relates.
|
34.3 |
Day count convention
Any interest, commission or
fee accruing under a Finance Document will accrue from day to day and is calculated on the basis of the actual number of days elapsed and a year of 360 days or, in any case where the practice in the Relevant Market differs, in
accordance with that market practice.
|
35. |
Partial Invalidity
|
36. |
Remedies and Waivers
|
37. |
Amendments and Waivers
|
37.1 |
Required consents
|
|
37.1.1 |
Subject to Clause 37.2 (
Exceptions
) any term of the
Finance Documents (other than the Master Agreement) may be amended or waived only with the consent of the Majority Lenders and the Borrowers and any such amendment or waiver will be binding on all Parties.
|
|
37.1.2 |
The Agent may effect, on behalf of any Finance Party, any amendment or waiver permitted by this Clause 37.
|
|
37.1.3 |
Without prejudice to the generality of Clauses 27.7.3, 27.7.4 and 27.7.5 (
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.
|
|
37.1.4 |
Clause 25.9.3 (
Pro rata interest settlement
) shall
apply to this Clause 37.
|
37.2 |
Exceptions
|
|
37.2.1 |
An amendment, waiver or (in the case of a Security Document) a consent of, or in relation to, any term of any Finance Document that has the effect of
changing or which relates to:
|
|
(a) |
the definition of "
Majority Lenders
" in Clause 1.1 (
Definitions
);
|
|
(b) |
an extension to the date of payment of any amount under the Finance Documents;
|
|
(c) |
a reduction in the Margin or a reduction in the amount of any payment of principal, interest, fees or commission payable;
|
|
(d) |
an increase in any Commitment, an extension of the Availability Period or any requirement that a cancellation of Commitments reduces the Commitments of the
Lenders rateably;
|
|
(e) |
a change to a Guarantor other than in accordance with Clause 26 (
Changes to the Obligors
);
|
|
(f) |
any provision which expressly requires the consent of all the Lenders;
|
|
(g) |
Clause 2.2 (
Finance Parties' rights and obligations
),
Clause 5.1 (
Delivery of a Utilisation Request
), Clause 7.1 (
Illegality
), Clause 7.5 (
Mandatory prepayment on sale or Total Loss
), Clause 25 (
Changes to the Lenders
), Clause 26 (
Changes
to the Obligors
), this Clause 37, Clause 42 (
Governing Law
) or Clause 43.1 (
Jurisdiction of English courts
);
|
|
(h) |
(other than as expressly permitted by the provisions of any Finance Document) the nature or scope of:
|
|
(i) |
any Guarantee;
|
|
(ii) |
the Charged Property; or
|
|
(iii) |
the manner in which the proceeds of enforcement of the Security Documents are distributed; or
|
|
(i) |
the release of any Guarantee or of any Encumbrance created or expressed to be created or evidenced by the Security Documents unless permitted under this
Agreement or any other Finance Document or relating to a sale or disposal of an asset which is the subject of any Encumbrance created or expressed to be created or evidenced by the Security Documents where such sale or disposal is
expressly permitted under this Agreement or any other Finance Document;
|
|
37.2.2 |
An amendment or waiver which relates to the rights or obligations of the Agent, the Security Agent or the Arranger (each in their capacity as such) may not
be effected without the consent of the Agent, the Security Agent or, as the case may be, the Arranger.
|
|
37.2.3 |
Replacement of Screen Rate
|
|
(a) |
providing for the use of a Replacement Benchmark in relation to that currency in place of that Screen Rate; and
|
|
(i) |
aligning any provision of any Finance Document to the use of that Replacement Benchmark;
|
|
(ii) |
enabling that Replacement Benchmark to be used for the calculation of interest under this Agreement (including, without limitation, any consequential
changes required to enable that Replacement Benchmark to be used for the purposes of this Agreement);
|
|
(iii) |
implementing market conventions applicable to that Replacement Benchmark;
|
|
(iv) |
providing for appropriate fallback (and market disruption) provisions for that Replacement Benchmark; or
|
|
(v) |
adjusting the pricing to reduce or eliminate, to the extent reasonably practicable, any transfer of economic value from one Party to another as a result of
the application of that Replacement Benchmark (and if any adjustment or method for calculating any adjustment has been formally designated, nominated or recommended by the Relevant Nominating Body, the adjustment shall be determined
on the basis of that designation, nomination or recommendation),
|
|
(a) |
formally designated, nominated or recommended as the replacement for a Screen Rate by:
|
|
(i) |
the administrator of that Screen Rate (provided that the market or economic reality that such benchmark rate measures is the same as that measured by that
Screen Rate); or
|
|
(ii) |
any Relevant Nominating Body,
|
|
(b) |
in the opinion of the Majority Lenders and the Original Guarantor, generally accepted in the international or any relevant domestic syndicated loan markets
as the appropriate successor to a Screen Rate; or
|
|
(c) |
in the opinion of the Majority Lenders and the Original Guarantor, an appropriate successor to a Screen Rate.
|
|
(a) |
the methodology, formula or other means of determining that Screen Rate has, in the opinion of the Majority Lenders, and the Original Guarantor materially
changed;
|
|
(A) |
the administrator of that Screen Rate or its supervisor publicly announces that such administrator is insolvent; or
|
|
(B) |
information is published in any order, decree, notice, petition or filing, however described, of or filed with a court, tribunal, exchange, regulatory
authority or similar administrative, regulatory or judicial body which reasonably confirms that the administrator of that Screen Rate is insolvent,
|
|
(ii) |
the administrator of that Screen Rate publicly announces that it has ceased or will cease, to provide that Screen Rate permanently or indefinitely and, at
that time, there is no successor administrator to continue to provide that Screen Rate;
|
|
(iii) |
the supervisor of the administrator of that Screen Rate publicly announces that such Screen Rate has been or will be permanently or indefinitely
discontinued; or
|
|
(iv) |
the administrator of that Screen Rate or its supervisor announces that that Screen Rate may no longer be used; or
|
|
(c) |
the administrator of that Screen Rate determines that that Screen Rate should be calculated in accordance with its reduced submissions or other contingency
or fallback policies or arrangements and the circumstance(s) or event(s) leading to such determination are not (in the opinion of the Majority Lenders and the Borrowers) temporary; or
|
|
(d) |
in the opinion of the Majority Lenders and the Borrowers, that Screen Rate is otherwise no longer appropriate for the purposes of calculating interest under
this Agreement.
|
37.3 |
Excluded Commitments
|
|
37.3.1 |
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 5 Business Days of that request being made; or
|
|
37.3.2 |
any Lender which is not a Defaulting Lender fails to respond to such a request or such a vote within 5 Business Days of that request being made,
|
|
(a) |
its Commitment(s) shall not be included for the purpose of calculating the Total Commitments when ascertaining whether any relevant percentage (including,
for the avoidance of doubt, unanimity) of Total Commitments has been obtained to approve that request; and
|
|
(b) |
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.
|
37.4 |
Replacement of Lender
|
|
37.4.1 |
If:
|
|
(a) |
any Lender becomes a Non-Consenting Lender (as defined in Clause 37.4.4); or
|
|
(b) |
a Borrower or any other Obligor becomes obliged to repay any amount in accordance with Clause 7.1 (
Illegality
) or to pay additional amounts pursuant to Clause 12.2 (
Tax gross-up
),
Clause 12.3 (
Tax Indemnity
) or Clause 13.1 (
Increased costs
) to any Lender,
|
|
37.4.2 |
The replacement of a Lender pursuant to this Clause 37.4 shall be subject to the following conditions:
|
|
(a) |
the Borrowers shall have no right to replace the Agent or Security Agent;
|
|
(b) |
neither the Agent nor the Lender shall have any obligation to the Borrowers to find a Replacement Lender;
|
|
(c) |
in the event of a replacement of a Non-Consenting Lender such replacement must take place no later than 5 days after the date on which that Lender is deemed
a Non-Consenting Lender;
|
|
(d) |
in no event shall the Lender replaced under this Clause 37.4 be required to pay or surrender to such Replacement Lender any of the fees received by such
Lender pursuant to the Finance Documents; and
|
|
(e) |
the Lender shall only be obliged to transfer its rights and obligations pursuant to Clause 37.4.1 once it is satisfied that it has complied with all
necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to that transfer.
|
|
37.4.3 |
A Lender shall perform the checks described in Clause 37.4.2(e) as soon as reasonably practicable following delivery of a notice referred to in Clause
37.4.1 and shall notify the Agent and the Borrowers when it is satisfied that it has complied with those checks.
|
|
37.4.4 |
In the event that:
|
|
(a) |
the Borrowers or the Agent (at the request of the Borrowers) have requested the Lenders to give a consent in relation to, or to agree to a waiver or
amendment of, any provisions of the Finance Documents;
|
|
(b) |
the consent, waiver or amendment in question requires the approval of all the Lenders; and
|
|
(c) |
Lenders whose Commitments aggregate more than 85 per cent of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated more
than 85 per cent of the Total Commitments prior to that reduction) have consented or agreed to such waiver or amendment,
|
37.5 |
Disenfranchisement of Defaulting Lenders
|
|
37.5.1 |
For so long as a Defaulting Lender has any Commitment, in ascertaining:
|
|
(a) |
the Majority Lenders; or
|
|
(b) |
whether:
|
|
(i) |
any given percentage (including, for the avoidance of doubt, unanimity) of the Total Commitments; or
|
|
(ii) |
the agreement of any specified group of Lenders,
|
|
37.5.2 |
For the purposes of this Clause 37.5, the Agent may assume that the following Lenders are Defaulting Lenders:
|
|
(a) |
any Lender which has notified the Agent that it has become a Defaulting Lender;
|
|
(b) |
any Lender in relation to which it is aware that any of the events or circumstances referred to in (a), (b) or (c) of the definition of "Defaulting Lender"
has occurred,
|
37.6 |
Replacement of a Defaulting Lender
|
|
37.6.1 |
The Borrowers may, at any time a Lender has become and continues to be a Defaulting Lender, by giving ten Business Days' prior written 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) transfer pursuant to Clause 25 (
Changes to the Lenders
) all (and not part only) of its rights and obligations under this Agreement to a Lender or other bank, financial institution, trust, fund or other entity (a "
Replacement Lender
") selected by the Borrowers which confirms its willingness to assume and does assume all the obligations, or all the relevant
obligations, of the transferring Lender in accordance with Clause 25 (
Changes to the Lenders)
for a purchase price in cash
payable at the time of transfer which is either:
|
|
(a) |
in an amount equal to the outstanding principal amount of such Lender's participation in the outstanding Loan and all accrued interest (to the extent that
the Agent has not given a notification under Clause 25.9 (
Pro rata interest settlement
), Break Costs and other amounts payable in
relation thereto under the Finance Documents; or
|
|
(b) |
in an amount agreed between that Defaulting Lender, the Replacement Lender and the Borrowers and which does not exceed the amount described in (a).
|
|
37.6.2 |
Any transfer of rights and obligations of a Defaulting Lender pursuant to this Clause 37.6 shall be subject to the following conditions:
|
|
(a) |
the Borrowers shall have no right to replace the Agent or Security Agent;
|
|
(b) |
neither the Agent nor the Defaulting Lender shall have any obligation to the Borrowers to find a Replacement Lender;
|
|
(c) |
the transfer must take place no later than 10 Business Days after the notice referred to in Clause 37.6.1;
|
|
(d) |
in no event shall the Defaulting Lender be required to pay or surrender to the Replacement Lender any of the fees received by the Defaulting Lender pursuant
to the Finance Documents; and
|
|
(e) |
the Defaulting Lender shall only be obliged to transfer its rights and obligations pursuant to 37.6.1 once it is satisfied that it has complied with all
necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to that transfer to the Replacement Lender.
|
|
37.6.3 |
The Defaulting Lender shall perform the checks described in Clause 37.6.2(e) as soon as reasonably practicable following delivery of a notice referred to in
Clause 37.6.1 and shall notify the Agent and the Borrowers when it is satisfied that it has complied with those checks.
|
38. |
Confidentiality
|
38.1 |
Confidential Information
Each Finance Party agrees
to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent permitted by Clause 38.2 (
Disclosure
of Confidential Information
) and Clause 38.3 (
Disclosure to numbering service providers
), and to ensure that all
Confidential Information is protected with security measures and a degree of care that would apply to its own confidential information.
|
38.2 |
Disclosure of Confidential Information
Any Finance
Party may disclose:
|
|
38.2.1 |
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 Clause 38.2.1 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;
|
|
38.2.2 |
to any person:
|
|
(a) |
to (or through) whom it assigns or transfers (or may potentially assign or transfer) all or any of its rights and/or obligations under one or more Finance
Documents 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 and professional advisers;
|
|
(b) |
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 and professional
advisers;
|
|
(c) |
appointed by any Finance Party or by a person to whom Clause 38.2.2(a) or 38.2.2(b) applies to receive communications, notices, information or documents
delivered pursuant to the Finance Documents on its behalf (including, without limitation, any person appointed under Clause 27.16.2 (
Relationship
with the Lenders
));
|
|
(d) |
who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in Clause
38.2.2(a) or 38.2.2(b);
|
|
(e) |
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;
|
|
(f) |
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;
|
|
(g) |
to whom or for whose benefit that Finance Party charges, assigns or otherwise creates Security (or may do so) pursuant to Clause 25.8 (
Security over Lenders' rights
);
|
|
(h) |
who is a Party; or
|
|
(i) |
with the consent of the Borrowers;
|
|
(i) |
in relation to Clauses 38.2.2(a), 38.2.2(b) and 38.2.2(c), the person to whom the Confidential Information is to be given has entered into a Confidentiality
Undertaking except that there shall be no requirement for a Confidentiality Undertaking if the recipient is a professional adviser and is subject to professional
|
|
(ii) |
in relation to Clause 38.2.2(d), the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking or is
otherwise bound by requirements of confidentiality in relation to the Confidential Information they receive and is informed that some or all of such Confidential Information may be price-sensitive information;
|
|
(iii) |
in relation to Clauses 38.2.2(e), 38.2.2(f) and 38.2.2(g), the person to whom the Confidential Information is to be given is informed of its confidential
nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of that Finance Party, it is not practicable so to do in the
circumstances; and
|
|
38.2.3 |
to any person appointed by that Finance Party or by a person to whom Clause 38.2.2(a) or 38.2.2(b) 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 Clause 38.2.3 if the service provider to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking; and
|
|
38.2.4 |
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 and/or the Group.
|
38.3 |
Disclosure to numbering service providers
|
|
38.3.1 |
Any Finance Party may disclose to any national or international numbering service provider appointed by that Finance Party to provide identification
numbering services in respect of this Agreement, the Loan and/or one or more Obligors the following information:
|
|
(a) |
names of Obligors;
|
|
(b) |
country of domicile of Obligors;
|
|
(c) |
place of incorporation of Obligors;
|
|
(d) |
date of this Agreement;
|
|
(e) |
Clause 42 (
Governing law
);
|
|
(f) |
the names of the Agent and the Arranger;
|
|
(g) |
date of each amendment and restatement of this Agreement;
|
|
(h) |
amount of Total Commitments;
|
|
(i) |
currencies of the Loan;
|
|
(j) |
type of Loan;
|
|
(k) |
ranking of the Loan;
|
|
(l) |
Termination Date;
|
|
(m) |
changes to any of the information previously supplied pursuant to (a) to (l); and
|
|
(n) |
such other information agreed between such Finance Party and that Obligor,
|
|
38.3.2 |
The Parties acknowledge and agree that each identification number assigned to this Agreement, the Loan and/or one or more Obligors by a numbering service
provider and the information associated with each such number may be disclosed to users of its services in accordance with the standard terms and conditions of that numbering service provider.
|
|
38.3.3 |
Each Borrower represents that none of the information set out in Clauses 38.3.1(a) to 38.3.1(n) is, nor will at any time be, unpublished price-sensitive
information.
|
|
38.3.4 |
The Agent shall notify the Borrowers and the other Finance Parties of:
|
|
(a) |
the name of any numbering service provider appointed by the Agent in respect of this Agreement, the Loan and/or one or more Obligors; and
|
|
(b) |
the number or, as the case may be, numbers assigned to this Agreement, the Loan and/or one or more Obligors by such numbering service provider.
|
38.4 |
Entire agreement
This Clause 38 constitutes the
entire agreement between the Parties in relation to the obligations of the Finance Parties under the Finance Documents regarding Confidential Information and supersedes any previous agreement, whether express or implied, regarding
Confidential Information.
|
38.5 |
Inside information
Each of the Finance Parties
acknowledges that some or all of the Confidential Information is or may be price-sensitive information and that the use of such information may be regulated or prohibited by applicable legislation including securities law relating to
insider dealing and market abuse and each of the Finance Parties undertakes not to use any Confidential Information for any unlawful purpose.
|
38.6 |
Notification of disclosure
Each of the Finance
Parties agrees (to the extent permitted by law and regulation) to inform the Borrowers:
|
|
38.6.1 |
of the circumstances of any disclosure of Confidential Information made pursuant to Clause 38.2.2(e) (
Disclosure of Confidential Information
) except where such disclosure is made to any of the persons referred to in that Clause during the ordinary course of its supervisory or
regulatory function; and
|
|
38.6.2 |
upon becoming aware that Confidential Information has been disclosed in breach of this Clause 38.
|
38.7 |
Continuing obligations
The obligations in this
Clause 38 are continuing and, in particular, shall survive and remain binding on each Finance Party for a period of 12 months from the earlier of:
|
|
38.7.1 |
the date on which all amounts payable by the Obligors under or in connection with the Finance Documents have been paid in full and the Loan has been
cancelled or otherwise ceases to be available; and
|
|
38.7.2 |
the date on which such Finance Party otherwise ceases to be a Finance Party.
|
39. |
Disclosure of Lender Details by Agent
|
39.1 |
Supply of Lender details to Borrowers
The Agent
shall provide to the Borrowers within seven Business Days of a request by the Borrowers (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, the address and fax number (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.
|
39.2 |
Supply of Lender details at Borrowers' direction
|
|
39.2.1 |
The Agent shall, at the request of the Borrowers, disclose the identity of the Lenders and the details of the Lenders' Commitments to any:
|
|
(a) |
other Party or any other person if that disclosure is made to facilitate, in each case, a refinancing of the Financial Indebtedness arising under the
Finance Documents or a material waiver or amendment of any term of any Finance Document; and
|
|
(b) |
Obligor or any other member of the Group.
|
|
39.2.2 |
Subject to Clause 39.2.3, the Borrowers shall procure that the recipient of information disclosed pursuant to Clause 39.2.1 shall keep such information
confidential and shall not disclose it to anyone and shall ensure that all such information
|
|
39.2.3 |
The recipient may disclose such information to any of its officers, directors, employees, professional advisers, auditors and partners as it shall consider
appropriate if any such person is informed in writing of its confidential nature, except that there shall be no such requirement to so inform if that person is subject to professional obligations to maintain the confidentiality of the
information or is otherwise bound by duties of confidentiality in relation to the information.
|
39.3 |
Supply of Lender details to other Lenders
|
|
39.3.1 |
If a Lender (a "
Disclosing Lender
") indicates to the
Agent that the Agent may do so, the Agent shall disclose that Lender's name and Commitment to any other Lender that is, or becomes, a Disclosing Lender.
|
|
39.3.2 |
The Agent shall, if so directed by the Requisite Lenders, request each Lender to indicate to it whether it is a Disclosing Lender.
|
39.4 |
Lender enquiry
If any Lender believes that any
entity is, or may be, a Lender and:
|
|
39.4.1 |
that entity ceases to have an Investment Grade Rating; or
|
|
39.4.2 |
an Insolvency Event occurs in relation to that entity,
|
39.5 |
Lender details definitions
In this Clause 39:
|
40. |
Counterparts
|
41. |
Joint and Several Liability
|
41.1 |
Nature of liability
The representations,
warranties, covenants, obligations and undertakings of the Borrowers contained in this Agreement shall be joint and several so that each Borrower shall be jointly and severally liable with all the Borrowers for
|
|
41.1.1 |
any forbearance (whether as to payment or otherwise) or any time or other indulgence granted to any other Borrower or any other Obligor under or in
connection with any Finance Document;
|
|
41.1.2 |
any amendment, variation, novation or replacement of any other Finance Document;
|
|
41.1.3 |
any failure of any Finance Document to be legal valid binding and enforceable in relation to any other Borrower or any other Obligor for any reason;
|
|
41.1.4 |
the winding-up or dissolution of any other Borrower or any other Obligor;
|
|
41.1.5 |
the release (whether in whole or in part) of, or the entering into of any compromise or composition with, any other Borrower or any other Obligor; or
|
|
41.1.6 |
any other act, omission, thing or circumstance which would or might, but for this provision, operate to discharge, impair or otherwise affect such
liability.
|
41.2 |
No rights as surety
Until the Indebtedness has
been unconditionally and irrevocably paid and discharged in full, each Borrower agrees that it shall not, by virtue of any payment made under this Agreement on account of the Indebtedness or by virtue of any enforcement by a Finance
Party of its rights under this Agreement or by virtue of any relationship between, or transaction involving, the relevant Borrower and any other Borrower or any other Obligor:
|
|
41.2.1 |
exercise any rights of subrogation in relation to any rights, security or moneys held or received or receivable by a Finance Party or any other person; or
|
|
41.2.2 |
exercise any right of contribution from any other Borrower or any other Obligor under any Finance Document; or
|
|
41.2.3 |
exercise any right of set-off or counterclaim against any other Borrower or any other Obligor; or
|
|
41.2.4 |
receive, claim or have the benefit of any payment, distribution, security or indemnity from any other Borrower or any other Obligor; or
|
|
41.2.5 |
unless so directed by the Agent (when the relevant Borrower will prove in accordance with such directions), claim as a creditor of any other Borrower or any
other Obligor in competition with any Finance Party
|
Section 12 |
Governing Law and Enforcement
|
42. |
Governing Law
|
43. |
Enforcement
|
43.1 |
Jurisdiction of English courts
|
|
43.1.1 |
The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement (including a dispute relating to
the existence, validity or termination of this Agreement or any non-contractual obligation arising out of or in connection with this Agreement) (a "
Dispute
"). Each Party agrees that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary.
|
|
43.1.2 |
Notwithstanding Clause 43.1.1, 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, any Finance Party may take concurrent proceedings in any number of jurisdictions.
|
43.2 |
Service of process
|
|
43.2.1 |
Without prejudice to any other mode of service allowed under any relevant law, each Borrower and each Guarantor:
|
|
(a) |
irrevocably appoints Ince Process Agents Limited of Aldgate Tower, 2 Leman Street, London E18QN, England as its agent for service of process in relation to
any proceedings before the English courts in connection with any Finance Document; and
|
|
(b) |
agrees that failure by a process agent to notify that Borrower or that Guarantor (as the case may be) of the process will not invalidate the proceedings
concerned.
|
|
43.2.2 |
If any person appointed as an agent for service of process is unable for any reason to act as agent for service of process or terminates its appointment as
agent for service of process, the relevant Borrower or relevant Guarantor (as the case may be) must immediately (and in any event within five 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 of Original Lender
|
Commitment
|
Treaty Passport scheme reference number and jurisdiction of residence (if applicable)
|
DNB (UK) Limited
|
100%
|
|
1 |
Obligors
|
|
(a) |
Constitutional documents
Copies of the
constitutional documents of each Obligor together with such other evidence as the Agent may reasonably require that each Obligor is duly incorporated in its country of incorporation and remains in existence with power to enter
into, and perform its obligations under, the Relevant Documents to which it is or is to become a party.
|
|
(b) |
Certificates of good standing
A certificate
of good standing in respect of each Obligor (if such a certificate can be obtained).
|
|
(c) |
Board resolutions
A copy of a resolution of
the board of directors of each Obligor (other than the Original Guarantor) and a copy of a resolution of the executive committee of the board of directors of the Original Guarantor:
|
|
(i) |
approving the terms of, and the transactions contemplated by, the Relevant Documents to which it is a party and resolving that it execute those
Relevant Documents; and
|
|
(ii) |
authorising a specified person or persons to execute those Relevant Documents (and all documents and notices to be signed and/or dispatched under
those documents) on its behalf.
|
|
(d) |
Specimen signatures or Copy passports
A
specimen of the signature or copy of the passport (as the Agent may require) of each person actually executing any of the Relevant Documents pursuant to the resolutions referred to in (c).
|
|
(e) |
Shareholder resolutions
A copy of a
resolution signed by all the holders of the issued shares in each Obligor (other than the Original Guarantor), approving the terms of, and the transactions contemplated by, the Relevant Documents to which that Obligor is a
party.
|
|
(f) |
Officer's certificates
An original
certificate of a duly authorised officer of each Obligor:
|
|
(i) |
certifying that each copy document relating to it specified in this Part I of Schedule 2 is correct, complete and in full force and effect;
|
|
(ii) |
setting out the names of (a) the directors and officers of that Obligor and (b) the shareholders of that Obligor (other than the Original Guarantor)
and the proportion of shares held by each shareholder; and
|
|
(iii) |
confirming that borrowing or guaranteeing or securing, as appropriate, the Loan would not cause any borrowing, guarantee, security or similar limit
binding on that Obligor to be exceeded.
|
|
(g) |
Evidence of registration
Where such
registration is required or permitted under the laws of the relevant jurisdiction, evidence that the names of the directors, officers and shareholders of each Obligor are duly registered in the companies registry or other
registry in the country of incorporation of that Obligor.
|
|
(h) |
Powers of attorney
The original notarially
attested and legalised power of attorney of each of the Obligors under which the Relevant Documents to which it is or is to become a party are to be executed or transactions undertaken by that Obligor.
|
2 |
Security and related documents
|
|
(a) |
Vessel documents
Photocopies, certified as
true, accurate and complete by a director or the secretary or the legal advisers of the Borrower, of:
|
|
(i) |
any charterparty or other contract of employment of the Vessel which will be in force on the Utilisation Date including, without limitation, any
Charter
|
|
(ii) |
the on hire certificate pursuant to the Charter (if the Charter is a time charter) or the protocol of delivery and acceptance evidencing the
unconditional physical delivery of the Vessel by the Borrower to a Charterer pursuant to a Charter (if the Charter is a bareboat charter);
|
|
(iii) |
the Management Agreements;
|
|
(iv) |
the Vessel's current Safety Construction, Safety Equipment, Safety Radio and Load Line Certificates;
|
|
(v) |
evidence of the Vessel's current Certificate of Financial Responsibility issued pursuant to the United States Oil Pollution Act 1990;
|
|
(vi) |
the Vessel's current SMC;
|
|
(vii) |
the ISM Company's current DOC;
|
|
(viii) |
the Vessel's current ISSC;
|
|
(ix) |
the Vessel's current IAPPC;
|
|
(x) |
the Vessel's current Tonnage Certificate;
|
|
(b) |
Evidence of Borrower's title
Evidence that on
the Utilisation Date (i) the Vessel will be permanently registered under the flag of the Hellenic Republic
|
|
(c) |
Evidence of insurance
Evidence that the
Vessel is insured in the manner required by the Security Documents and that letters of undertaking will be issued in the manner required by the Security Documents, together with (if required by the Agent) the written approval of
the Insurances by an insurance adviser appointed by the Agent.
|
|
(d) |
Confirmation of class
A Certificate of
Confirmation of Class for hull and machinery confirming the Vessel is classed with the highest class applicable to vessels of her type with Lloyd's Register or such other classification society as may be acceptable to the Agent.
|
|
(e) |
Valuation
A valuation of the Vessel addressed
to the Agent from a broker acceptable to the Agent certifying the Market Value for the Vessel, acceptable to the Agent and in compliance with Clause 18 (
Additional security
) and dated not earlier that 30 Business Days prior to the proposed Utilisation Date.
|
|
(f) |
Security Documents
The Mortgage and the
Assignments in respect of the Vessel, each Guarantee, the Account Security Deed, the Share Securities and any other Credit Support Documents, together with all other documents required by any of them, including, without
limitation, (i) all notices of assignment and/or charge and evidence that those notices will be duly acknowledged by the recipients and (ii) (pursuant to the Share Securities) all share certificates, certified copy share
registers or registers of members, transfer forms, proxy forms, letters of resignation and letters of undertaking.
|
|
(g) |
Mandates
Such duly signed forms of mandate,
and/or other evidence of the opening of the Earnings Accounts, as the Security Agent may require.
|
|
(h) |
No disputes
The written confirmation of the
Borrowers that there is no dispute under any of the Relevant Documents as between the parties to any such document.
|
|
(i) |
Account Holder's confirmation
The written
confirmation of the Account Holder that the Earnings Accounts have been opened with the Account Holder and to its actual knowledge are free from Encumbrances other than as created by or pursuant to the Security Documents and
rights of set off in favour of the Account Holder as account holder.
|
|
(j) |
Master Agreement
The Master Agreement.
|
|
(k) |
Other Relevant Documents
Copies of each of
the Relevant Documents not otherwise comprised in the documents listed in this Part I of Schedule 2.
|
3 |
Legal opinions
|
|
(a) |
a legal opinion of Stephenson Harwood LLP, legal advisers to the Agent as to English law substantially in the form distributed to the Lenders prior to
signing this Agreement;
|
|
(b) |
a legal opinion of the following legal advisers to the Agent:
|
|
(i) |
Ince & Co as to Marshall Islands law;
|
|
(ii) |
Stephenson Harwood LLP as to Greek law; and
|
|
(iii) |
Patton Moreno & ASVAT as to Panamanian law.
|
4 |
Other documents and evidence
|
|
(a) |
Utilisation Request
A duly completed
Utilisation Request.
|
|
(b) |
Process agent
Evidence that any process agent
referred to in Clause 43.2 (
Service of process
) and any process agent appointed under any other Finance Document has
accepted its appointment.
|
|
(c) |
Other Authorisations
A copy of any other
Authorisation or other document, opinion or assurance which the Agent considers to be necessary or desirable (if it has notified the Borrowers accordingly) in connection with the entry into and performance of the transactions
contemplated by any Relevant Document or for the validity and enforceability of any Relevant Document.
|
|
(d) |
Financial statements
A copy of each of the
Original Financial Statements.
|
|
(e) |
Fees
The Fee Letter and evidence that the
fees, costs and expenses then due from the Borrowers under Clause 11 (
Fees
) and Clause 16 (
Costs and Expenses
) or, if applicable, any withholding tax have been paid or will be paid by the relevant Utilisation Date.
|
|
(f) |
"Know your customer" documents
Such
documentation and other evidence as is reasonably requested by the Agent (including specimen signatures) in order for the Lenders to comply with all necessary "know your customer" or similar identification procedures in relation
to the transactions contemplated in the Finance Documents, and each Obligors signatories, directors and ultimate beneficial owners.
|
|
(g) |
Group Structure Chart
A chart showing the
structure of the Group up to the level of the Original Guarantor.
|
|
(h) |
Ownership Side Letter
The Ownership Side
Letter.
|
1 |
Evidence of Borrower's title
Certificate of
ownership and encumbrance (or equivalent) issued by the Registrar of Ships (or equivalent official) of the flag of the Hellenic Republic confirming that (a) the Vessel is permanently registered under that flag in the ownership
of the Borrower, (b) the Mortgage has been registered with first priority against the Vessel and (c) there are no further Encumbrances registered against the Vessel.
|
2 |
Letters of undertaking
Letters of undertaking
in respect of the Insurances as required by the Security Documents together with copies of the relevant policies or cover notes or entry certificates duly endorsed with the interest of the Finance Parties.
|
3 |
Acknowledgements of notices
Acknowledgements
of all notices of assignment and/or charge given pursuant to any Security Documents received by the Agent pursuant to Part I of this Schedule 2.
|
4 |
Legal opinions
Such of the legal opinions
specified in Part I of this Schedule 2 as have not already been provided to the Agent.
|
5 |
Companies Act registrations
If applicable,
evidence that the prescribed particulars of any Security Documents received by the Agent pursuant to Part I of this Schedule 2 have been delivered to the relevant Registry of Companies/Corporations within the statutory time
limit.
|
6 |
Master's receipt
The master's receipt for the
Mortgage.
|
From: |
Erikub Shipping Company Inc.
|
To: |
DNB Bank ASA
|
1 |
We refer to the Agreement. This is a Utilisation Request. Terms defined in the Agreement have the same meaning in this Utilisation Request unless
given a different meaning in this Utilisation Request.
|
2 |
We wish to borrow the Vessel Loan in respect of the Vessel specified below on the following terms:
|
|
Proposed Utilisation Date: |
[ ] (or, if that is not a Business Day, the next Business Day)
|
|
Currency of Vessel Loan:
|
dollars |
|
Amount: |
[ ] |
|
Interest Period: |
[ ] |
|
Vessel: |
[ ]
|
3 |
We confirm that each condition specified in Clause 4.2 (
Further conditions precedent
) is satisfied on the date of this Utilisation Request.
|
4 |
The proceeds of the Vessel Loan should be paid as follows:
|
5 |
This Utilisation Request is irrevocable.
|
From: |
[
The Existing Lender
] (the "
Existing Lender
") and [
The New
Lender
] (the "
New Lender
")
|
1 |
We refer to the Loan Agreement. This agreement (the "
Agreement
")
shall take effect as a Transfer Certificate for the purposes of the Loan Agreement. Terms defined in the Loan Agreement have the same meaning in this Agreement unless given a different meaning in this Agreement.
|
2 |
We refer to Clause 25.5 (
Procedure for transfer
)
of the Loan Agreement:
|
|
(a) |
The Existing Lender and the New Lender agree to the Existing Lender transferring to the New Lender by novation and in accordance with Clause 25.5 (
Procedure for transfer
) all of the Existing Lender's rights and obligations under the Loan Agreement and the other Finance
Documents which relate to that portion of the Existing Lender's Commitment(s) and participations in the Loan under the Loan Agreement as specified in the Schedule.
|
|
(b) | The proposed Transfer Date is [ | ]. |
|
(c) |
The Facility Office and address, fax number and attention details for notices of the New Lender for the purposes of Clause 33.2 (
Addresses
) of the Loan 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 25.4.1(c) (
Limitation of responsibility of Existing Lenders
) of the Loan Agreement.
|
4 |
The New Lender confirms, for the benefit of the Agent and without liability to any Obligor, that it is:
|
|
(d) |
[a Qualifying Lender other than a Treaty Lender;]
|
|
(e) |
[a Treaty Lender;]
|
|
(f) |
[not a Qualifying Lender].
|
[5] |
[The New Lender confirms that the person beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document is
either:
|
|
(g) |
a company resident in the United Kingdom for United Kingdom tax purposes;
|
|
(h) |
a partnership each member of which is:
|
|
(iv) |
a company so resident in the United Kingdom; or
|
|
(v) |
a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into
account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or
|
|
(i) |
a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into
account interest payable in respect of that advance in computing the
chargeable
profits (within the meaning of section 19 of the CTA) of that
company.]
|
[5] |
[The New Lender confirms that it holds a passport under the HMRC DT Treaty Passport scheme (reference number [ ]) and is tax
resident in [ ], so that interest payable to it by borrowers is generally subject to full exemption from UK withholding tax, and requests that the Agent notify the Borrowers that it wishes that scheme to apply
to the Agreement.]
|
[5/6] |
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.
|
[6/7] |
This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.
|
[7/8] |
This Agreement has been entered into on the date stated at the beginning of this Agreement.
|
Note: |
The execution of this Transfer Certificate may not
transfer a proportionate share of the Existing Lender's interest in any Encumbrance created or expressed to be created or evidenced by the Security Documents
in all jurisdictions. It is the responsibility of the New Lender to ascertain whether any other documents or other formalities are required to perfect a transfer of such a share in any
jurisdiction and, if so, to arrange for execution of those documents and completion of those formalities.
|
[Existing Lender]
|
[New Lender]
|
By:
|
By:
|
To: |
[ ] as Agent and [ ] and [ ] as Borrowers, for and on behalf of each Obligor
|
From: |
[the
Existing Lender
] (the "
Existing Lender
") and [the
New
Lender
] (the "
New Lender
")
|
1 |
We refer to the Loan Agreement. This is an Assignment Agreement. This agreement (the "
Agreement
") shall take effect as an Assignment Agreement for the purpose of the Loan Agreement. Terms defined in the Loan Agreement have the same meaning in this Agreement unless given
a different meaning in this Agreement.
|
2 |
We refer to Clause 25.6 (
Procedure for assignment
)
of the Loan Agreement:
|
|
(a) |
The Existing Lender assigns absolutely to the New Lender all the rights of the Existing Lender under the Loan Agreement, the other Finance Documents
and in respect of any Encumbrance created or expressed to be created or evidenced by the Security Documents which correspond to that portion of the Existing Lender's Commitment(s) and participations in the Loan under the Loan
Agreement as specified in the Schedule.
|
|
(b) |
The Existing Lender is released from all the obligations of the Existing Lender which correspond to that portion of the Existing Lender's
Commitment(s) and participations in the Loan under the Loan Agreement specified in the Schedule.
|
|
(c) |
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).
|
3 |
The proposed Transfer Date is [ ].
|
4 |
On the Transfer Date the New Lender becomes:
|
|
(a) |
Party to the relevant Finance Documents as a Lender
|
5 |
The Facility Office and address, fax number and attention details for notices of the New Lender for the purposes of Clause 33.2 (
Addresses
) of the Loan Agreement are set out in the Schedule.
|
6 |
The New Lender expressly acknowledges the limitations on the Existing Lender's obligations set out in Clause 25.4.3 (
Limitation of responsibility of Existing Lenders
) of the Loan Agreement.
|
7 |
The New Lender confirms, for the benefit of the Agent and without liability to any Obligor, that it is:
|
|
(a) |
[a Qualifying Lender (other than a Treaty Lender);]
|
|
(b) |
[a Treaty Lender;]
|
|
(c) |
[not a Qualifying Lender].
|
8 |
[The New Lender confirms that the person beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document is
either:
|
|
(a) |
a company resident in the United Kingdom for United Kingdom tax purposes;
|
|
(b) |
a partnership each member of which is:
|
|
(i) |
a company so resident in the United Kingdom; or
|
|
(ii) |
a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into
account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or
|
|
(c) |
a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into
account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company.]
|
9 |
[The New Lender confirms that it holds a passport under the HMRC DT Treaty Passport scheme (reference number [ ]) and is tax resident in [ ]
*
, so that interest payable to it by borrowers is generally subject to full exemption from UK withholding tax and hereby notifies the Borrowers that
it wishes that scheme to apply to the Loan Agreement.]
*
*
|
[9/10] |
This Agreement acts as notice to the Agent (on behalf of each Finance Party) and, upon delivery in accordance with Clause 25.7 (
Copy of Transfer Certificate or Assignment Agreement to Borrowers
), to the Borrowers (on behalf of each Obligor) of the
assignment referred to in this Agreement.
|
[10/11] |
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.
|
[11/12] |
This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.
|
[12/13] |
This Agreement has been entered into on the date stated at the beginning of this Agreement.
|
Note: |
The execution of this Assignment Agreement may not transfer a proportionate share of the Existing Lender's interest in any
Encumbrance created or expressed to be created or evidenced by the Security Documents in all jurisdictions. It is the responsibility of the New Lender to ascertain whether any other documents or other formalities are required
to perfect a transfer of such a share in any jurisdiction and, if so, to arrange for execution of those documents and completion of those formalities.
|
[Existing Lender]
|
[New Lender]
|
By:
|
By:
|
To: |
[ ] as Agent and [ ] as Security Agent for itself and each of the other Finance Parties
|
1 |
We refer to the Agreement. This deed (the "
Accession
Deed
") shall take effect as an Accession Deed for the purposes of the Agreement. Terms defined in the Agreement have the same meaning in paragraphs 1-3 of this Accession Deed unless given a different meaning in this
Accession Deed.
|
2 |
[
Affiliate of a Borrower
] agrees to become an
Additional Guarantor and to be bound by the terms of the Agreement and the other Finance Documents as an Additional Guarantor pursuant to Clause 26.2 (
Additional Guarantors
) of the Agreement.
Affiliate of a Borrower
is a company duly
incorporated under the laws of [
name of relevant jurisdiction
] and is a limited liability company and registered number
[ ].
|
3 |
Affiliate of a Borrower's
administrative
details for the purposes of the Agreement are as follows:
|
[Executed as a Deed
|
)
|
By:
[Affiliate of a
Borrower]
|
)
|
)
|
_____________________________
|
Director
|
_____________________________
|
Director/Secretary]
|
[
Executed as a Deed
By:
[Affiliate of a
Borrower]
|
|
_____________________________
|
Signature of Director
|
_____________________________
in the presence of
|
Name of Director
|
_____________________________
|
Signature of witness
|
_____________________________
|
Name of witness
|
_____________________________
|
Address of witness
|
_____________________________
|
|
_____________________________
|
|
_____________________________
|
|
_____________________________
|
Occupation of witness]
|
_____________________________
|
[
Borrowers
][
Original Guarantor
]
|
1 |
We refer to the Agreement. This is a Compliance Certificate. Terms defined in the Agreement have the same meaning when used in this Compliance
Certificate unless given a different meaning in this Compliance Certificate.
|
2 |
We confirm that:
|
|
2.1 |
we maintain Cash of not less than the higher of (i) $500,000 multiplied by the number of the Fleet Vessels and (ii) $10,000,000; and
|
|
2.2 |
the Market Value Adjusted Net Worth in an amount not less than $150,000,000; and
|
|
2.3 |
the Market Value Adjusted Net Worth in excess of 25% of the Total Assets;
|
|
2.4 |
each Borrower maintains in the relevant Earnings Account a credit balance of not less than two hundred thousand Dollars ($200,000).
|
3 |
[We confirm that no Default is continuing.]
*
|
Signed:
|
………………………………………………
|
Chief Financial Officer
|
|
of
|
|
Diana Shipping Inc.
|
Erikub Shipping Company Inc.
|
)
|
||
)
|
|||
By:
|
)
|
||
)
|
|||
Address: c/o Diana Shipping Services S.A.
|
)
|
||
Pendelis 16, 175 64 Palaio Faliro, Athens,
|
)
|
||
Greece
|
)
|
||
Fax no.: +30 210 9470101
|
)
|
||
Department/Officer: Mr Andreas Michalopoulos
|
)
|
||
Wotho Shipping Company Inc.
|
)
|
||
)
|
|||
By:
|
)
|
||
)
|
|||
Address: c/o Diana Shipping Services S.A.
|
)
|
||
Pendelis 16, 175 64 Palaio Faliro, Athens,
|
)
|
||
Greece
|
)
|
||
Fax no.: +30 210 9470101
|
)
|
||
Department/Officer: Mr Andreas Michalopoulos
|
)
|
||
The Original Guarantor
|
|||
Diana Shipping Inc.
|
)
|
||
)
|
|||
By:
|
)
|
||
)
|
|||
Address: c/o Diana Shipping Services S.A.
|
)
|
||
Pendelis 16, 175 64 Palaio Faliro, Athens,
|
)
|
||
Greece
|
)
|
||
Fax no.: +30 210 9470101
|
)
|
||
Department/Officer: Mr Andreas Michalopoulos
|
)
|
||
The Arranger
|
|||
DNB Bank ASA
|
)
|
||
)
|
|||
By:
|
)
|
||
)
|
|||
Address: 8th floor, The Walbrook Building
|
)
|
||
25 Walbrook, London EC4N 8AF
|
)
|
||
England
|
)
|
||
Fax no.: +44 207 283 5935
|
)
|
||
Department/Officer: Shipping Offshore
|
)
|
||
The Agent
|
|||
DNB Bank ASA
|
)
|
||
)
|
|||
By:
|
)
|
||
)
|
|||
Address: 8th floor, The Walbrook Building
|
)
|
||
25 Walbrook, London EC4N 8AF
|
)
|
||
England
|
)
|
||
Fax no.: +44 207 283 5935
|
)
|
||
Department/Officer: Shipping Offshore
|
)
|
||
The Security Agent
|
|||
DNB Bank ASA
|
)
|
||
)
|
|||
By:
|
)
|
||
)
|
|||
Address: 8th floor, The Walbrook Building
|
)
|
||
25 Walbrook, London EC4N 8AF
|
)
|
||
England
|
)
|
||
Fax no.: +44 207 283 5935
|
)
|
||
Department/Officer: Shipping Offshore
|
)
|
||
Subsidiary
|
Country of Incorporation
|
Aerik Shipping Company Inc.
|
Marshall Islands
|
Ailuk Shipping Company Inc.
|
Marshall Islands
|
Aster Shipping Company Inc.
|
Marshall Islands
|
Bikar Shipping Company Inc.
|
Marshall Islands
|
Bikini Shipping Company Inc.
|
Marshall Islands
|
Bokak Shipping Company Inc.
|
Marshall Islands
|
Ebadon Shipping Company Inc.
|
Marshall Islands
|
Erikub Shipping Company Inc.
|
Marshall Islands
|
Fayo Shipping Company Inc.
|
Marshall Islands
|
Gala Properties Inc.
|
Marshall Islands
|
Guam Shipping Company Inc.
|
Marshall Islands
|
Houk Shipping Company Inc.
|
Marshall Islands
|
Jabat Shipping Company Inc.
|
Marshall Islands
|
Jaluit Shipping Company Inc.
|
Marshall Islands
|
Jemo Shipping Company Inc.
|
Marshall Islands
|
Kaben Shipping Company Inc.
|
Marshall Islands
|
Kili Shipping Company Inc.
|
Marshall Islands
|
Knox Shipping Company Inc.
|
Marshall Islands
|
Lae Shipping Company Inc.
|
Marshall Islands
|
Lelu Shipping Company Inc.
|
Marshall Islands
|
Lib Shipping Company Inc.
|
Marshall Islands
|
Majuro Shipping Company Inc.
|
Marshall Islands
|
Makur Shipping Company Inc.
|
Marshall Islands
|
Mandaringina Inc.
|
Marshall Islands
|
Mejato Shipping Company Inc.
|
Marshall Islands
|
Namu Shipping Company Inc.
|
Marshall Islands
|
Palau Shipping Company Inc.
|
Marshall Islands
|
Pulap Shipping Company Inc.
|
Marshall Islands
|
Rairok Shipping Company Inc.
|
Marshall Islands
|
Rakaru Shipping Company Inc.
|
Marshall Islands
|
Taka Shipping Company Inc.
|
Marshall Islands
|
Taroa Shipping Company Inc.
|
Marshall Islands
|
Toku Shipping Company Inc.
|
Marshall Islands
|
Tuvalu Shipping Company Inc.
|
Marshall Islands
|
Ujae Shipping Company Inc.
|
Marshall Islands
|
Wake Shipping Company Inc.
|
Marshall Islands
|
Weno Shipping Company Inc.
|
Marshall Islands
|
Wotho Shipping Company Inc.
|
Marshall Islands
|
Buenos Aires Compania Armadora S.A.
|
Panama
|
Cerada International SA
|
Panama
|
Changame Compania Armadora S.A.
|
Panama
|
Chorrera Compania Armadora S.A.
|
Panama
|
Cypres Enterprises Corp.
|
Panama
|
Darien Compania Armadora S.A.
|
Panama
|
Diana Ship Management Inc.
|
Panama
|
Diana Shipping Services S.A.
|
Panama
|
Eaton Marine S.A.
|
Panama
|
Husky Trading, S.A.
|
Panama
|
Panama Compania Armadora S.A.
|
Panama
|
Skyvan Shipping Company S.A.
|
Panama
|
Texford Maritime S.A.
|
Panama
|
Urbina Bay Trading, S.A.
|
Panama
|
Vesta Commercial, S.A.
|
Panama
|
Marfort Navigation Company Limited
|
Cyprus
|
Silver Chandra Shipping Company Limited
|
Cyprus
|
Bulk Carriers (USA) LLC
|
United States (Delaware)
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1. |
I have reviewed this annual report on Form 20-F of Diana Shipping Inc. (the "Company");
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2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;
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4. |
The Company's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange
Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:
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(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that
material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c) |
Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d) |
Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the period covered by the annual report
that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and
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5. |
The Company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the
Company's auditors and the audit committee of the Company's board of directors (or persons performing the equivalent functions):
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(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to
adversely affect the Company's ability to record, process, summarize and report financial information; and
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(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial
reporting.
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1. |
I have reviewed this annual report on Form 20-F of Diana Shipping Inc. (the "Company");
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2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;
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4. |
The Company's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange
Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:
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(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that
material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c) |
Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d) |
Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the period covered by the annual report
that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and
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5. |
The Company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the
Company's auditors and the audit committee of the Company's board of directors (or persons performing the equivalent functions):
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(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to
adversely affect the Company's ability to record, process, summarize and report financial information; and
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(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial
reporting.
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1. |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2. |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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1. |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2. |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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