☐
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REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934
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☒
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended
December 31,
2018
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from
_________________
to
_________________
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☐
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SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shell company report
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Commission file number
001-33283
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EUROSEAS LTD.
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(Exact name of Registrant as specified in its charter)
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(Translation of Registrant's name into English)
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Marshall Islands
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(Jurisdiction of incorporation or organization)
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4 Messogiou & Evropis Street, 151 24 Maroussi Greece
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(Address of principal executive offices)
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Tasos Aslidis, Tel: (908) 301-9091, euroseas@euroseas.gr, Euroseas Ltd. c/o Tasos Aslidis,
11 Canterbury Lane, Watchung, NJ 07069
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(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
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None
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(Title of Class)
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Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
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None
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(Title of Class)
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Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period
covered by the annual report
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12,515,645 common shares, $0.03 par value
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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined by Rule 405 of the Securities Act.
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☐
Yes
☒
No
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If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934.
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☐
Yes
☒
No
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Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 from their obligations under those Sections.
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
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☒
Yes
☐
No
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Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant
to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
☒
Yes
☐
No
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☒ |
U.S. GAAP
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☐ |
International Financial Reporting Standards as issued by the International Accounting Standards Board.
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☐ |
Other
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· |
our future operating or financial results;
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· |
future, pending or recent acquisitions, joint ventures, business strategy, areas of possible expansion, and expected capital spending or operating expenses;
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· |
container shipping industry trends, including charter rates and factors affecting vessel supply and demand;
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· |
our financial condition and liquidity, including our ability to obtain additional financing in the future to fund capital expenditures, acquisitions and other
general corporate activities;
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· |
availability of crew, number of off-hire days, drydocking requirements and insurance costs;
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· |
our expectations about the availability of vessels to purchase or the useful lives of our vessels;
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· |
our expectations relating to dividend payments and our ability to make such payments;
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· |
our ability to leverage to our advantage our manager's relationships and reputations in the container shipping industry;
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· |
changes in seaborne and other transportation patterns;
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· |
changes in governmental rules and regulations or actions taken by regulatory authorities;
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· |
potential liability from future litigation;
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· |
global and regional political conditions;
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· |
acts of terrorism and other hostilities, including piracy; and
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· |
other factors discussed in the section titled "Risk Factors."
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Item 1. |
Identity of Directors, Senior Management and Advisers
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Item 2. |
Offer Statistics and Expected Timetable
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Item 3. |
Key Information
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Euroseas Ltd. – Summary of Selected Historical Financials
(in U.S. Dollars except for Fleet Data and number of shares)
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|||||||||||||||||||
Year Ended December 31,
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|||||||||||||||||||
Statement of Operations Data
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2014
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2015
|
2016
|
2017
|
2018
|
||||||||||||||
Time charter revenue
|
32,587,186
|
35,509,971
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21,409,236
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24,278,048
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36,062,202
|
||||||||||||||
Voyage charter revenue
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4,731,423
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-
|
47,979
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559,319
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206,682
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||||||||||||||
Related party management fee income
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240,000
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240,000
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240,000
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240,000
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-
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||||||||||||||
Commissions
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(1,917,559
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)
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(1,965,466
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)
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(1,151,879
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)
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(1,318,248
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)
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(1,844,147
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)
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|||||||||
Net revenue, continuing operations
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35,641,050
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33,784,505
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20,545,336
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23,759,119
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34,424,737
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||||||||||||||
Voyage expenses
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(3,919,860
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)
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(1,852,482
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)
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(1,209,085
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)
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(1,564,489
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)
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(1,261,088
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)
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|||||||||
Vessel operating expenses
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(22,604,520
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)
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(21,833,674
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)
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(13,853,444
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)
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(15,019,342
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)
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(19,986,170
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)
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|||||||||
Other operating income
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-
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-
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-
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499,103
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-
|
||||||||||||||
Dry-docking expenses
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(1,975,591
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)
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(1,332,378
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)
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(2,204,784
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)
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(571,291
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)
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(2,774,924
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)
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|||||||||
Vessel depreciation
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(9,791,080
|
)
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(8,108,231
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)
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(4,959,487
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)
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(3,585,965
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)
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(3,305,951
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)
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|||||||||
Related party management fees
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(4,346,584
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)
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(3,589,167
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)
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(2,399,461
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)
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(2,632,637
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)
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(3,536,094
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)
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|||||||||
Other general and administrative expenses
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(2,731,942
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)
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(2,886,884
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)
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(2,673,594
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)
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(2,502,203
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)
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(2,565,502
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)
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|||||||||
Net gain on sale of vessels
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-
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461,586
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10,597
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803,811
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1,340,952
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||||||||||||||
Loss on write-down of vessels held for sale
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(3,500,000
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)
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(1,641,885
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)
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(5,924,668
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)
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(4,595,819
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)
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-
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||||||||||
Operating income / (loss), continuing operations
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(13,228,527
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)
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(6,978,610
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)
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(12,668,590
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)
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(5,409,713
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)
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2,335,960
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||||||||||
Interest and other financing costs
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(1,611,178
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)
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(1,398,553
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)
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(1,370,830
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)
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(1,554,695
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)
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(3,050,768
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)
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|||||||||
(Loss)/gain on derivatives, net
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(44,648
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)
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(261,674
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)
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(119,154
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)
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12,389
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(44,343
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)
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||||||||||
Other investment income
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982,978
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1,212,938
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1,024,714
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-
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-
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||||||||||||||
Impairment of other investment
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-
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-
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(4,421,452
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)
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-
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-
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|||||||||||||
Foreign exchange gain / (loss)
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34,006
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16,711
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(31,033
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)
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(30,214
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)
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13,963
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||||||||||||
Interest income
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419,366
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26,445
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22,277
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37,972
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81,792
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||||||||||||||
Equity loss in joint venture
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(2,541,775
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)
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(2,158,393
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)
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(2,444,627
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)
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-
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-
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|||||||||||
Impairment in joint venture
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-
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-
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(14,071,075
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)
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-
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-
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|||||||||||||
Net loss, continuing operations
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(15,989,778
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)
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(9,541,136
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)
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(34,079,770
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)
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(6,944,261
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)
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(663,396
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)
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|||||||||
Dividends to Series B preferred shares
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(1,440,100
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)
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(1,639,149
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)
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(1,725,699
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)
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(1,808,811
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)
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(1,335,733
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)
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|||||||||
Net loss attributable to common shareholders, continuing operations
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(17,429,878
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)
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(11,180,285
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)
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(35,805,469
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)
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(8,753,072
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)
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(1,999,129
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)
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|||||||||
Loss per share attributable to common shareholders- basic and diluted, continuing operations
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(3.18
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)
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(1.74
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)
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(4.38
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)
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(0.79
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)
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(0.18
|
)
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|||||||||
Preferred stock dividends declared
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1,440,100
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1,639,149
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1,725,699
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1,808,811
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1,335,733
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||||||||||||||
Preferred dividends declared per preferred share
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44.81
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48.53
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48.60
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48.48
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68.13
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||||||||||||||
Weighted average number of shares outstanding during period, basic and diluted
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5,479,418
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6,410,794
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8,165,703
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11,067,524
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11,318,197
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Fleet Data
(1)
|
2014
|
2015
|
2016
|
2017
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2018
|
|||||||||||||||
Number of vessels
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13.00
|
12.74
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8.67
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9.28
|
11.49
|
|||||||||||||||
Calendar days
|
4,745
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4,650
|
3,175
|
3,386
|
4,191
|
|||||||||||||||
Available days
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4,677
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4,587
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3,028
|
3,285
|
4,115
|
|||||||||||||||
Voyage days
|
4,564
|
4,285
|
2,844
|
3,184
|
3,814
|
|||||||||||||||
Utilization Rate (percent)
|
97.6
|
%
|
93.0
|
%
|
93.9
|
%
|
96.9
|
%
|
92.7
|
%
|
||||||||||
(In U.S. dollars per day per vessel)
|
||||||||||||||||||||
Average TCE rate
(2)
|
7,319
|
7,855
|
7,120
|
7,309
|
9,179
|
|||||||||||||||
Vessel Operating Expenses
|
4,764
|
4,695
|
4,363
|
4,436
|
4,769
|
|||||||||||||||
Management Fees
|
916
|
772
|
756
|
777
|
844
|
|||||||||||||||
G&A Expenses
|
576
|
621
|
842
|
739
|
612
|
|||||||||||||||
Total Operating Expenses excluding drydocking expenses
|
6,256
|
6,088
|
5,961
|
5,952
|
6,225
|
|||||||||||||||
Drydocking expenses
|
416
|
287
|
694
|
169
|
662
|
|
2014
|
2015
|
2016
|
2017
|
2018 | |||||||||||||||
(In U.S. dollars, except for voyage days and TCE rates which are expressed in U.S. dollars per day)
|
||||||||||||||||||||
Time charter revenue
|
32,587,186
|
35,509,971
|
21,409,236
|
24,278,048
|
36,062,202
|
|||||||||||||||
Voyage charter revenue
|
4,731,423
|
-
|
47,979
|
559,319
|
206,682
|
|||||||||||||||
Voyage expenses
|
(3,919,860
|
)
|
(1,852,482
|
)
|
(1,209,085
|
)
|
(1,564,489
|
)
|
(1,261,088
|
)
|
||||||||||
Time Charter Equivalent or TCE Revenues
|
33,398,749
|
33,657,489
|
20,248,130
|
23,272,878
|
35,007,796
|
|||||||||||||||
Voyage days
|
4,564
|
4,285
|
2,844
|
3,184
|
3,814
|
|||||||||||||||
Average TCE rate
|
7,319
|
7,855
|
7,120
|
7,309
|
9,179
|
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· |
supply of, and demand for, containerized cargo;
|
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· |
changes in the semi-finished and finished consumer and industrial products, and the resulting changes in the international pattern of trade;
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· |
global and regional economic and political conditions, including armed conflicts and terrorist activities;
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· |
embargoes and strikes;
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· |
the location of regional and global manufacturing facilities;
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|
· |
availability of credit to finance international trade;
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· |
the location of consuming regions for semi-finished and finished consumer and industrial products;
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|
· |
the distance containerized commodities are to be moved by sea;
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|
· |
environmental and other regulatory developments;
|
|
· |
currency exchange rates;
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· |
changes in global production and manufacturing distribution patterns of finished goods that utilize containerized commodities;
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· |
changes in seaborne and other transportation patterns; and
|
|
· |
weather and other natural phenomena.
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|
· |
the number of newbuilding deliveries;
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|
· |
the scrapping rate of older vessels;
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|
· |
the price of steel and other materials;
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|
· |
port and canal congestion;
|
|
· |
changes in environmental and other regulations that may limit the useful life of vessels;
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|
· |
vessel casualties;
|
|
· |
the number of vessels that are out of service; and
|
|
· |
changes in global commodity production.
|
|
· |
general economic and market conditions affecting the shipping industry in general;
|
|
· |
supply of container vessels, including newbuildings;
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|
· |
demand for container vessels;
|
|
· |
types and sizes of vessels;
|
|
· |
scrap values;
|
|
· |
other modes of transportation;
|
|
· |
cost of newbuildings;
|
|
· |
technological advances;
|
|
· |
new regulatory requirements from governments or self-regulated organizations;
|
|
· |
competition from other shipping companies; and
|
|
· |
prevailing level of charter rates.
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Regulations relating to low sulfur emissions coming into effect on January 1, 2020 may adversely affect our revenues and profitability.
Under maritime regulations due to take effect on January 1, 2020, ships will have to reduce sulfur emissions, for which the principal solutions are the use of scrubbers or buying fuel with low sulfur content which is more expensive than standard marine fuel. We do not currently intend to install scrubbers on our fleet. We expect that our fuel costs and fuel inventories will increase beginning in 2019 as a result of these sulfur emission regulations. Low sulfur fuel is more expensive than standard marine fuel containing 3.5% sulfur content and may become more expensive or difficult to obtain as a result of increased demand, which may have a material adverse effect on our business, results of operations, cash flows and financial condition.
Increased inspection procedures and tighter import and export controls and new security regulations could increase costs and disrupt our business.
|
• |
work stoppages or other hostilities, political or economic disturbances that disrupt the operations of the shipyard;
|
|
• |
quality or engineering problems;
|
|
• |
bankruptcy or other financial crisis of the shipyard;
|
|
• |
a backlog of orders at the shipyard;
|
|
• |
disputes between us and the shipyard regarding contractual obligations;
|
|
• |
weather interference or catastrophic events, such as major earthquakes or fires;
|
|
• |
our requests for changes to the original vessel specifications or disputes with the shipyard; or
|
|
• |
shortages of or delays in the receipt of necessary construction materials, such as steel, or equipment, such as main engines, electricity generators and
propellers.
|
|
· |
incur additional indebtedness;
|
|
· |
create liens on our assets;
|
|
· |
sell capital stock of our subsidiaries;
|
|
· |
make investments;
|
|
· |
engage in mergers or acquisitions;
|
|
· |
pay dividends;
|
|
· |
make capital expenditures;
|
|
· |
change the management of our vessels or terminate or materially amend the management agreement relating to each vessel; and
|
|
· |
sell our vessels.
|
|
· |
marine disaster;
|
|
· |
piracy;
|
|
· |
environmental accidents;
|
|
· |
grounding, fire, explosions and collisions;
|
|
· |
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
|
|
· |
work stoppages or other labor problems with crew members serving on our vessels including crew strikes and/or boycotts.
|
|
· |
actual or anticipated fluctuations in quarterly and annual variations in our results of operations;
|
|
· |
changes in market valuations or sales or earnings estimates or publication of research reports by analysts;
|
|
· |
changes in earnings estimates or shortfalls in our operating results from levels forecasted by securities analysts;
|
|
· |
changes in market valuations of similar companies and stock market price and volume fluctuations generally;
|
|
· |
payment of dividends;
|
|
· |
strategic actions by us or our competitors such as mergers, acquisitions, joint ventures, strategic alliances or restructurings;
|
|
· |
changes in government and other regulatory developments;
|
|
· |
additions or departures of key personnel;
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|
· |
general market conditions and the state of the securities markets; and
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|
· |
domestic and international economic, market and currency factors unrelated to our performance.
|
Item 4. |
Information on the Company
|
Name
|
Type
|
Dwt
|
TEU
|
Year Built
|
Employment (*)
|
TCE Rate ($/day)
|
Container Carriers
|
||||||
EVRIDIKI G (ex-MAERSK NOUMEA)
|
Feeder
|
34,677
|
2,556
|
2001
|
TC until Sep-19
|
$12,000
|
JOANNA
|
Feeder
|
22,301
|
1,732
|
1999
|
TC until Feb-20
|
$6,650
|
MANOLIS P
|
Feeder
|
20,346
|
1,452
|
1995
|
TC until Mar-20
|
$6,800
|
AEGEAN EXPRESS
|
Feeder
|
18,581
|
1,439
|
1997
|
TC until Apr-19
|
$7,500
|
NINOS
|
Feeder
|
18,253
|
1,169
|
1990
|
TC until Jul-19
|
$7,750
|
KUO HSIUNG
|
Feeder
|
18,154
|
1,169
|
1993
|
TC until Jul-19
|
$7,750
|
EM ASTORIA
|
Feeder
|
35,600
|
2,788
|
2004
|
TC until Aug-19
|
$9,650
|
AKINADA BRIDGE
|
Intermediate
|
71,366
|
5,610
|
2001
|
TC until Sep-19
|
$8,500
|
EM CORFU
|
Feeder
|
34,654
|
2,556
|
2001
|
TC until Feb-20
|
$11,600
|
EM ATHENS
|
Feeder
|
32,350
|
2,506
|
2000
|
TC until Sep-19
|
$9,000
|
EM OINOUSSES
|
Feeder
|
32,350
|
2,506
|
2000
|
TC until Apr-19
|
$9,500
|
Total Container Carriers
|
11
|
368,632
|
25,483
|
|
· |
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.
|
|
· |
Experienced Management Team
. Our management team has
significant experience in all aspects of commercial, technical, operational and financial areas of our business. Aristides J. Pittas, our Chairman and Chief Executive Officer, holds a dual graduate degree in Naval Architecture and
Marine Engineering and Ocean Systems Management from the Massachusetts Institute of Technology. He has worked in various technical, shipyard and ship management capacities and since 1991 has focused on the ownership and operation of
vessels carrying dry cargoes. Dr. Anastasios Aslidis, our Chief Financial Officer, holds a Ph.D. in Ocean Systems Management also from Massachusetts Institute of Technology and has over 20 years of experience, primarily as a partner at
a Boston based international consulting firm focusing on investment and risk management in the maritime industry.
|
|
· |
Cost Efficient Vessel Operations
. We believe that
because of the efficiencies afforded to us through Eurobulk, the strength of our management team and the quality of our fleet, we are, and will continue to be, a reliable, low cost vessel operator, without compromising our high
standards of performance, reliability and safety. Despite the average age of our fleet being approximately 20.5 years on April 1, 2019, our total vessel operating expenses, including management fees and general and administrative
expenses but excluding drydocking expenses were $6,225 per day for the year ended December 31, 2018. We consider this amount to be among the lowest of the publicly listed containerships shipping companies in the United States. Our
technical and operating expertise allows us to efficiently manage and transport a wide range of cargoes with a flexible trade route profile, which helps reduce ballast time between voyages and minimize off-hire days. Our professional,
well-trained masters, officers and onboard crews further help us to control costs and ensure consistent vessel operating performance. We actively manage our fleet and strive to maximize utilization and minimize maintenance expenditures
for operational and commercial utilization. For the year ended December 31, 2018, our operational fleet utilization was 96.0%, down from 99.5% in 2017, while our commercial utilization rate decreased from 97.5% in 2017 to 96.7% in 2018.
Our total fleet utilization rate in 2018 was 96.0%.
|
|
· |
Strong Relationships with Customers and Financial
Institutions
. We believe ourselves, Eurobulk and the Pittas family to have developed strong industry relationships and to have gained acceptance with charterers, lenders and insurers because of long-standing reputation for safe
and reliable service and financial responsibility through various shipping cycles. Through Eurobulk, we offer reliable service and cargo carrying flexibility that enables us to attract customers and obtain repeat business. We also
believe that the established customer base and reputation of ourselves, Eurobulk and the Pittas family help us to secure favorable employment for our vessels with well-known charterers.
|
|
· |
Renew and Expand our Fleet
. We expect to grow our
fleet in a disciplined manner through timely and selective acquisitions of quality vessels. We perform in-depth technical review and financial analysis of each potential acquisition and only purchase vessels as market opportunities
present themselves. We focus on purchasing well-maintained secondhand vessels, newbuildings or newbuilding resales based on the evaluation of each investment option at the time it is made. Within 2016 we acquired two secondhand
containerships. In January 2017, we sold one containership. In June, September, October and December 2017, we took delivery of five secondhand containerships, and in December 2017, we sold one containership.
|
|
· |
Maintain Balanced Employment
. We intend to employ our
fleet on either longer term time charters, i.e. charters with duration of more than a year, or shorter-term time/spot charters. We seek longer term time charter employment to obtain adequate cash flow to cover as much as possible of our
fleet's recurring costs, consisting of vessel operating expenses, management fees, general and administrative expenses, interest expense and drydocking costs for the upcoming 12-month period. When we expect charter rates to improve we
try to increase the percentage of our fleet employed in shorter term contracts (allowing us to take advantage of higher rates in the future), while when we expect the market to weaken we try to increase the percentage of our fleet
employed in longer term contracts (allowing us to take advantage of higher current rates). We believe this balanced employment strategy will provide us with more predictable operating cash flows and sufficient downside protection, while
allowing us to participate in the potential upside of the spot market during periods of rising charter rates. As of April 1, 2019, on the basis of our existing time charters, approximately 55% of our vessel capacity in the remainder of
2019 and approximately 4% in 2020 are under time charter contracts, which will ensure employment of a portion of our fleet, partly protect us from market fluctuations and increase our ability to make principal and interest payments on
our debt and pay dividends to our shareholders.
|
|
· |
Optimize Use of Financial Leverage
. We intend to use
bank debt to partly fund our vessel acquisitions and increase financial returns for our shareholders. We actively assess the level of debt we incur in light of our ability to repay that debt based on the level of cash flow generated
from our balanced chartering strategy and efficient operating cost structure. Our debt repayment schedule as of December 31, 2018 calls for a reduction of more than 13.9% of our debt by the end of 2019 and an additional reduction of
about 16.1% by the end of 2020 for a total of 30% reduction over the next two years, excluding any new debt that we assumed or may assume. As our debt is being repaid we expect that our ability to raise or borrow additional funds more
cheaply in order to grow our fleet and generate better returns for our shareholders will increase.
|
|
(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.
|
|
· |
on-board installation of automatic identification systems to provide a means for the automatic transmission of safety-related information from among similarly
equipped ships and shore stations, including information on a ship's identity, position, course, speed and navigational status;
|
|
· |
on-board installation of ship security alert systems, which do not sound on the vessel but only alert the authorities on shore;
|
|
· |
the development of vessel security plans;
|
|
· |
ship identification number to be permanently marked on a vessel's hull;
|
|
· |
a continuous synopsis record kept onboard showing a vessel's history including the name of the ship, the state whose flag the ship is entitled to fly, the
date on which the ship was registered with that state, the ship's identification number, the port at which the ship is registered and the name of the registered owner(s) and their registered address; and
|
|
· |
compliance with flag state security certification requirements.
|
Item 4A. |
Unresolved Staff Comments
|
Item 5. |
Operating and Financial Review and Prospects
|
|
· |
the effective fleet utilization rate;
|
|
· |
estimated scrap values;
|
|
· |
future drydocking costs; and
|
|
· |
probabilities of sale for each vessel.
|
Vessel
|
Charter Rate as of 12/31/2018
|
Remaining
Months Chartered
|
Remaining Life (years)
|
Rate Year 1 (2018)
|
Rate Year 2 (2019)
|
Rate Year 3+ (2020+)
|
Breakeven Rate (USD/day)
|
|||||||||||||||||||||
Evridiki
|
12,000
|
8.0
|
7
|
10,189
|
10,189
|
14,611
|
9,623
|
In U.S. dollars
|
Total
|
Less Than One Year
|
One to
Three Years |
Three to Five Years
|
||||||||||||
Bank debt
|
$
|
37,491,000
|
$
|
5,212,000
|
$
|
32,279,000
|
-
|
|||||||||
Interest Payments (1)
|
$
|
5,914,860
|
$
|
2,346,082
|
$
|
3,568,778
|
-
|
|||||||||
Vessel Management fees (2)
|
$
|
10,660,933
|
$
|
3,153,740
|
$
|
5,164,451
|
$
|
2,342,742
|
||||||||
Other Management fees (3)
|
$
|
5,152,010
|
$
|
1,250,000
|
$
|
2,575,500
|
$
|
1,326,510
|
||||||||
Total
|
$
|
59,218,803
|
$
|
11,961,822
|
$
|
43,587,729
|
$
|
3,669,252
|
Item 6. |
Directors, Senior Management and Employees
|
Name
|
Age
|
Position
|
Aristides J. Pittas
|
59
|
Chairman, President and CEO; Class A Director
|
Dr. Anastasios Aslidis
|
59
|
CFO and Treasurer; Class A Director
|
Aristides P. Pittas
|
67
|
Vice Chairman; Class A Director
|
Stephania Karmiri
|
51
|
Secretary
|
Panagiotis Kyriakopoulos
|
58
|
Class B Director
|
George Taniskidis
|
58
|
Class C Director
|
Apostolos Tamvakakis
|
61
|
Class C Director (since June 25, 2013)
|
Christian Donohue
|
51
|
Series B Director (since December 7, 2017)
|
|
· |
We are not required under Marshall Islands law to maintain a Board of Directors with a majority of independent directors, and we may not be able to maintain a
Board of Directors with a majority of independent directors in the future.
|
|
· |
In lieu of a compensation committee comprised of independent directors, our Board of Directors will be responsible for establishing the executive officers'
compensation and benefits. Under Marshall Islands law, compensation of the executive officers is not required to be determined by an independent committee.
|
|
· |
In lieu of a nomination committee comprised of independent directors, our Board of Directors will be responsible for identifying and recommending potential
candidates to become board members and recommending directors for appointment to board committees. Shareholders may also identify and recommend potential candidates to become candidates to become board members in writing. No formal
written charter has been prepared or adopted because this process is outlined in our bylaws.
|
|
· |
In lieu of obtaining an independent review of related party transactions for conflicts of interests, consistent with Marshall Islands law requirements, a
related party transaction will be permitted if: (i) the material facts as to his or her relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors and the Board of Directors in
good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, or, if the votes of the disinterested directors are insufficient to constitute an act of the Board of Directors as
defined in Section 55 of the Marshall Islands Business Corporations Act, by unanimous vote of the disinterested directors; or (ii) the material facts as to his relationship or interest are disclosed and the shareholders are entitled to
vote thereon, and the contract or transaction is specifically approved in good faith by a simple majority vote of the shareholders; or (iii) the contract or transaction is fair as to the Company as of the time it is authorized, approved
or ratified, by the Board of Directors, a committee thereof or the shareholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which
authorizes the contract or transaction.
|
|
· |
As a foreign private issuer, we are not required to solicit proxies or provide proxy statements to Nasdaq pursuant to Nasdaq corporate governance rules or
Marshall Islands law. Consistent with Marshall Islands law, we will notify our shareholders of meetings between 15 and 60 days before the meeting. This notification will contain, among other things, information regarding business to be
transacted at the meeting. In addition, our bylaws provide that shareholders must give us advance notice to properly introduce any business at a meeting of the shareholders. Our bylaws also provide that shareholders may designate in
writing a proxy to act on their behalf.
|
|
· |
In lieu of holding regular meetings at which only independent directors are present, our entire Board of Directors, a majority of whom are independent, will
hold regular meetings as is consistent with the laws of the Republic of the Marshall Islands.
|
|
· |
The Board of Directors adopted a new Equity Incentive Plan in May 2018. Shareholder approval was not necessary since Marshall Islands law permits the Board
of Directors to take such actions.
|
|
· |
As a foreign private issuer, we are not required to obtain shareholder approval if any of our directors, officers, or 5% or greater shareholders has a 5% or
greater interest (or such persons collectively have a 10% or greater interest), directly or indirectly, in the company, or assets to be acquired, or in the consideration to be paid in the transaction(s) and the present or potential
issuance of common stock, or securities convertible into or exercisable for common stock, could result in an increase in outstanding common stock or voting power of 5% or more.
|
|
· |
In lieu of obtaining shareholder approval prior to the issuance of designated securities, the Company will comply with provisions of the Marshall Islands
Business Corporations Act, providing that the Board of Directors approves share issuances.
|
Item 7. |
Major Shareholders and Related Party Transactions
|
Name of Beneficial Owner (1)
|
Number of Shares of Voting Common Stock Beneficially Owned
|
Percent of Voting of common Stock (13)
|
Number of Shares of Voting Series B Preferred Stock Beneficially Owned (14)
|
Percent of Voting of Series B Preferred Shares (14)
|
Number of Shares of Voting Common Stock Beneficially Owned Upon Conversion; 50% Voting Before Conversion
|
Percent of Total Voting Securities
|
||||||||||||||||||
Friends Investment Company Inc.(2)
|
3,704,048
|
29.6
|
%
|
-
|
-
|
22.0
|
%
|
|||||||||||||||||
Tennenbaum Opportunities Fund VI, LLC (3, 4)
|
291,600
|
2.3
|
%
|
16,031
|
81.4
|
%
|
3,500,218
|
22.6
|
%
|
|||||||||||||||
Tennenbaum Opportunities Partners V, LP (3, 4)
|
608,400
|
4.9
|
%
|
-
|
-
|
-
|
3.6
|
%
|
||||||||||||||||
Family United Navigation Co
|
559,823
|
4.5
|
%
|
-
|
-
|
-
|
3.3
|
%
|
||||||||||||||||
Preferred Friends Investment Company Inc(4)
|
-
|
-
|
3,655
|
18.6
|
%
|
798,035
|
4.8
|
%
|
||||||||||||||||
Aristides J Pittas(5)
|
97,093
|
*
|
-
|
-
|
-
|
*
|
||||||||||||||||||
George Taniskidis(6)
|
4,155
|
*
|
-
|
-
|
-
|
*
|
||||||||||||||||||
Panagiotis Kyriakopoulos(7)
|
33,415
|
*
|
-
|
-
|
-
|
*
|
||||||||||||||||||
Aristides P Pittas(8)
|
13,070
|
*
|
-
|
-
|
-
|
*
|
||||||||||||||||||
Anastasios Aslidis(9)
|
67,186
|
*
|
-
|
-
|
-
|
*
|
||||||||||||||||||
Apostolos Tamvakakis(10)
|
7,078
|
*
|
-
|
-
|
-
|
*
|
||||||||||||||||||
Christian Donohue
|
-
|
*
|
-
|
-
|
-
|
*
|
||||||||||||||||||
Stephania Karmiri(11)
|
-
|
*
|
-
|
-
|
-
|
*
|
||||||||||||||||||
Symeon Pariaros(12)
|
4,155
|
*
|
-
|
-
|
-
|
*
|
||||||||||||||||||
All directors and officers and 5% owners as a group
|
5,390,023
|
43.1
|
%
|
19,686
|
100
|
%
|
4,298,253
|
57.6
|
%
|
(1) |
Beneficial ownership is determined in accordance with the Rule 13d-3(a) of the Securities Exchange Act of 1934, as amended, and generally includes voting or
investment power with respect to securities. Except as subject to community property laws, where applicable, the person named above has sole voting and investment power with respect to all shares of common stock shown as beneficially
owned by him/her.
|
(2) |
Represents 3,704,048 shares of common stock held of record by Friends. A majority of the shareholders of Friends are members of the Pittas family. Investment
power and voting control by Friends resides in its Board of Directors which consists of five directors, a majority of whom are members of the Pittas family. Actions by Friends may be taken by a majority of the members on its Board of
Directors.
|
(3) |
Tennenbaum Capital Partners, LLC serves as investment advisor to, inter alia, Tennenbaum Opportunities Partners V, LP and Tennenbaum Opportunities Fund VI,
LLC, which are the registered holders of the Common Shares and Series B Preferred Shares of Euroseas Ltd. beneficially owned by Tennenbaum Capital Partners, LLC. Tennenbaum Capital Partners, LLC is indirectly controlled by BlackRock,
Inc., which may be deemed to have beneficial ownership of shares beneficially owned by Tennenbaum Capital Partners, LLC. The address of Tennenbaum Opportunities Partners V, LP, Tennenbaum Opportunities
|
|
Fund V, LLC and Tennenbaum Capital Partners, LLC is 2951 28th Street, Suite 1000, Santa Monica, CA 90405. The address of BlackRock, Inc. is 55 East 52nd
Street, New York, NY 10055. Tennenbaum Opportunities Partners V, LP and Tennenbaum Opportunities Fund VI, LLC currently hold (a) 900,000 shares of common stock and (b) Series B Preferred Shares that are convertible into 3,500,218
shares of common stock.
|
(4) |
Common shares are issuable upon conversion of Series B Preferred Shares (or any convertible notes into which the Series B Preferred Shares may convert) owned
by this shareholder (based on the current conversion ratio).
|
(5) |
Does not include 482,991 shares of common stock held of record by Friends, by virtue of ownership interest in Friends by Mr. Pittas. Mr. Pittas disclaims
beneficial ownership except to the extent of his pecuniary interest. Does not include 1,041 Series B Preferred Shares held of record by Preferred Friends Investment Company Inc., by virtue of ownership interest in Preferred Friends
Investment Company Inc. by Mr. Pittas. Mr. Pittas disclaims beneficial ownership except to the extent of his pecuniary interest. Includes 11,140 shares vesting on July 1, 2019, 13,925 shares of common stock vesting on November 16, 2019
and 13,925 shares vesting on November 16, 2020.
|
(6) |
Does not include 17,005 shares held of record by Friends, by virtue of Mr. Taniskidis' ownership in Friends. Mr. Taniskidis disclaims beneficial ownership
except to the extent of his pecuniary interest. Does not include 96 Series B Preferred Shares held of record by Preferred Friends Investment Company Inc., by virtue of ownership interest in Preferred Friends Investment Company Inc. by
Mr. Taniskidis and members of his family. Mr. Taniskidis disclaims beneficial ownership except to the extent of his pecuniary interest. Includes 1,185 shares vesting on July 1, 2019, 1,485 shares of common stock vesting on November 16,
2019 and 1,485 shares vesting on November 16, 2020.
|
( 7) |
Includes 1,185 shares vesting on July 1, 2019, 1,485 shares of common stock vesting on November 16, 2019 and 1,485 shares vesting on November 16, 2020.
|
( 8) |
Does not include 427,911 shares of common stock held of record by Friends and Family United Navigation Co., by virtue of ownership interest in Friends and
Family United Navigation Co. of Mr. Pittas and members of his family. Mr. Pittas disclaims beneficial ownership except to the extent of his pecuniary interest. Does not include 24 shares of Series B Preferred stock held of record by
Preferred Friends Investment Company Inc., by virtue of ownership interest in Preferred Friends Investment Company Inc.by Mr. Pittas and members of his family. Mr. Pittas disclaims beneficial ownership except to the extent of his
pecuniary interest. Includes 3,040 shares vesting on July 1, 2019, 3,800 shares of common stock vesting on November 16, 2019 and 3,800 shares vesting on November 16, 2020.
|
( 9) |
Includes 7,560 shares vesting on July 1, 2019, 9,450 shares of common stock vesting on November 16, 2019 and 9,450 shares vesting on November 16, 2020.
|
( 10) |
Includes 1,185 shares vesting on July 1, 2019, 1,485 shares of common stock vesting on November 16, 2019 and 1,485 shares vesting on November 16, 2020.
|
( 11) |
Does not include 465 shares of common stock held of records by Friends, by virtue of Mrs. Karmiri's ownership in Friends. Mrs. Karmiri disclaims beneficial
ownership except to the extent of her pecuniary interest.
|
( 12) |
Includes 1,185 shares vesting on July 1, 2019, 1,485 shares of common stock vesting on November 16, 2019 and 1,485 shares vesting on November 16, 2020.
|
( 13) |
Voting stock includes 175,585 unvested shares for a total of 12,515,645 issued and outstanding shares of the Company as of April 22, 2019.
|
( 14) |
As of April 22, 2019, Series B Preferred Shares vote on an as-converted basis weighted by 50%.
|
Item 8. |
Financial Information
|
Item 9. |
The Offer and Listing
|
Item 10. |
Additional Information
|
|
· |
we are organized in a foreign country, or our country of organization, that grants an "equivalent exemption" to corporations organized in the United States;
and
|
|
· |
more than 50% of the value of our stock is owned, directly or indirectly, by "qualified shareholders," individuals who are "residents" of our country of
organization or of another foreign country that grants an "equivalent exemption" to corporations organized in the United States, which we refer to as the "50% Ownership Test," or
|
|
· |
our stock is "primarily and regularly traded on an established securities market" in our country of organization, in another country that grants an
"equivalent exemption" to United States corporations, or in the United States, which we refer to as the "Publicly-Traded Test."
|
|
· |
We have, or are considered to have, a fixed place of business in the United States involved in the earning of shipping income; and
|
|
· |
substantially all of our U.S.-source shipping income is attributable to regularly scheduled transportation, such as the operation of a vessel that follows a
published schedule with repeated sailings at regular intervals between the same points for voyages that begin or end in the United States.
|
|
· |
at least 75% of our gross income for such taxable year consists of passive income (e.g., dividends, interest, capital gains and rents derived other than in
the active conduct of a rental business); or
|
|
· |
at least 50% of the average value of our assets during such taxable year produce, or are held for the production of, passive income, which we refer to as
"passive assets".
|
|
· |
such 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 United States income tax treaty with respect to that gain, that gain is taxable only if it is attributable to a permanent establishment maintained by the Non-U.S. Holder in the United States; or
|
|
· |
the Non-U.S. Holder is an individual who is present in the United States for 183 days or more during the taxable year of disposition and other conditions are
met.
|
|
· |
fails to provide an accurate taxpayer identification number;
|
|
· |
is notified by the IRS that he failed to report all interest or dividends required to be shown on your United States federal income tax returns; or
|
|
· |
in certain circumstances, fails to comply with applicable certification requirements.
|
Item 11. |
Quantitative and Qualitative Disclosures about Market Risk
|
Year Ended December 31,
|
Amount in $ (loans)
|
Amount in $ (swap)
|
||||||
2019
|
342,335
|
(40,548
|
)
|
|||||
2020
|
290,215
|
-
|
||||||
2021
|
167,938
|
-
|
||||||
2022
|
-
|
-
|
||||||
2023 and thereafter
|
-
|
-
|
Item 12. |
Description of Securities Other than Equity Securities
|
Item 13. |
Defaults, Dividend Arrearages and Delinquencies
|
Item 14. |
Material Modifications to the Rights of Security Holders and Use of Proceeds
|
Item 15. |
Controls and Procedures
|
Item 16A. |
Audit Committee Financial Expert
|
Item 16B. |
Code of Ethics
|
Item 16C. |
Principal Accountant Fees and Services
|
2017
(dollars in thousands) |
2018
(dollars in thousands) |
|||||||
Audit Fees
|
$
|
290
|
$
|
288
|
||||
Audit related fees
|
-
|
-
|
||||||
Tax fees
|
-
|
-
|
||||||
All other fees / expenses
|
-
|
-
|
||||||
Total
|
$
|
290
|
$
|
288
|
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
|
1.1
|
|
1.2
|
|
1.3
|
|
2.1
|
|
2.2
|
|
2.3
|
|
2.4
|
|
2.5
|
|
2.6
|
|
2.7
|
|
2.8
|
|
3.1
|
|
4.1
|
|
4.2
|
|
4.3
|
|
4.4
|
|
4.5
|
|
4.6
|
|
4.7
|
|
4.8
|
|
4.9
|
|
4.10
|
|
4.11
|
|
4.12
|
|
4.13
|
|
4.14
|
|
4.15
|
|
4.16
|
|
4.17
|
4.18
|
|
4.19
|
|
4.20
|
|
4.21
|
|
4.22
|
|
4.23
|
|
4.24
|
|
4.25
|
|
4.26
|
|
4.27
|
|
4.28
|
|
4.29
|
|
4.30
|
|
4.31
|
|
4.32
|
|
4.33
|
|
4.34
|
|
4.35
|
|
4.36
|
|
4.37
|
|
4.38
|
|
4.39
|
|
4.40
|
|
4.41
|
|
4.42
|
4.43
|
|
4.44
|
|
4.45
|
|
4.46
|
|
4.47
|
|
4.48
|
|
4.49
|
|
4.50
|
|
4.51
|
|
4.52
|
|
4.53
|
|
4.54
|
|
4.55
|
|
4.56
|
|
4.57
|
Euroseas 2018 Equity Incentive Plan
|
4.58
|
Revolving Credit Facility Agreement between Euroseas Ltd., as
borrower, and Eurobank Ergasias, S.A., as arranger, relating to a revolving credit facility of up to US$45,000,000 dated November 21, 2018
|
8.1
|
|
12.1
|
|
12.2
|
|
13.1
|
|
13.2
|
|
15.1
|
|
101.INS*
|
XBRL Instance Document
|
101.SCH*
|
XBRL Taxonomy Extension Schema Document
|
101.CAL*
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF*
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB*
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE*
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
(1) |
Filed as an Exhibit to the Company's Registration Statement (File No. 333-129145) on October 20, 2005.
|
(2) |
Filed as an Exhibit to the Company's Amendment No.1 to Registration Statement (File No. 333-129145) on December 5, 2005.
|
(3) |
Filed as an Exhibit to the Company's Post-Effective Amendment No. 1 to Registration Statement (File No. 333-129145) on September 12, 2006.
|
(4) |
Filed as an Exhibit to the Company's Registration Statement (File No. 333-138780) on November 17, 2006.
|
(5) |
Filed as an Exhibit to the Company's Amendment No. 4 to Registration Statement (File No. 333-138780) on January 29, 2007.
|
(6) |
Filed as an Exhibit to the Company's Annual Report on Form 20-F (File No. 001-33283) on May 13, 2008.
|
(7) |
Filed as an Exhibit to the Company's Registration Statement (File No. 333-152089) on July 2, 2008.
|
(8) |
Filed as an Exhibit to the Company's Post-Effective Amendment No. 1 to Registration Statement (File No. 333-148124) on July 17, 2008.
|
(9) |
Filed as an Exhibit to the Company's Annual Report on Form 20-F (File No. 001-33283) on May 18, 2009.
|
(10) |
Filed as an Exhibit to the Company's Form 6-K (File No. 001-33283) on May 18, 2009.
|
(11) |
Filed as an Exhibit to the Company's Annual Report on Form 20-F (File No. 001-33283) on May 28, 2010.
|
(12) |
Filed as an Exhibit to the Company's Annual Report on Form 20-F (File No. 001-33283) on May 27, 2011.
|
(13) |
Filed as an Exhibit to the Company's Form 6-K (File No. 001-33283) on May 25, 2012.
|
(14) |
Filed as an Exhibit to the Company's Annual Report on Form 20-F (File No. 001-33283) on April 27, 2012.
|
(15) |
Filed as an Exhibit to the Company's Annual Report on Form 20-F (File No. 001-33283) on May 2, 2016.
|
EUROSEAS LTD.
|
|||
(Registrant)
|
|||
By:
|
/s/ Aristides J. Pittas
|
||
Aristides J. Pittas
|
|||
Chairman, President and CEO
|
|||
Date: April 25, 2019
|
|||
Pages
|
||
Report of Independent Registered Public Accounting Firm
|
F-2
|
|
Consolidated Balance Sheets as of December 31, 2017 and 2018
|
F-3
|
|
Consolidated Statements of Operations for the Years Ended December 31, 2016, 2017 and 2018
|
F-5
|
|
Consolidated Statements of Shareholders’ Equity for the Years Ended December 31, 2016, 2017 and 2018
|
F-6
|
|
Consolidated Statements of Cash Flows for the Years Ended December 31, 2016, 2017 and 2018
|
F-7
|
|
Notes to the Consolidated Financial Statements
|
F-10
|
Notes
|
2017
|
2018
|
||||||||||
Assets
|
||||||||||||
Current assets
|
||||||||||||
Cash and cash equivalents
|
2,858,927
|
6,960,258
|
||||||||||
Restricted cash
|
7
|
1,103,953
|
117,063
|
|||||||||
Trade accounts receivable, net
|
885,495
|
958,705
|
||||||||||
Other receivables
|
965,037
|
2,031,415
|
||||||||||
Inventories
|
3
|
1,193,018
|
1,704,391
|
|||||||||
Prepaid expenses
|
247,039
|
222,336
|
||||||||||
Vessel held for sale
|
4
|
4,914,782
|
-
|
|||||||||
Total current assets, continuing operations
|
12,168,251
|
11,994,168
|
||||||||||
Current assets of discontinued operations
|
3,914,117
|
-
|
||||||||||
Total current assets
|
16,082,368
|
11,994,168
|
||||||||||
Long-term assets
|
||||||||||||
Vessels, net
|
4
|
52,132,079
|
48,826,128
|
|||||||||
Restricted cash
|
7
|
4,334,267
|
6,134,267
|
|||||||||
Due from spun-off subsidiary
|
24,585,518
|
-
|
||||||||||
Long-term assets of discontinued operations
|
65,195,329
|
-
|
||||||||||
Total assets
|
162,329,561
|
66,954,563
|
||||||||||
Liabilities, mezzanine equity and shareholders’ equity
|
||||||||||||
Current liabilities
|
||||||||||||
Long-term bank loans, current portion
|
7
|
4,203,261
|
4,870,241
|
|||||||||
Trade accounts payable
|
1,522,473
|
2,288,525
|
||||||||||
Accrued expenses
|
5
|
1,117,110
|
1,301,805
|
|||||||||
Deferred revenues
|
590,178
|
417,634
|
||||||||||
Due to related company
|
6
|
4,986,836
|
2,672,895
|
|||||||||
Derivatives
|
13, 16
|
229,451
|
41,435
|
|||||||||
Total current liabilities, continuing operations
|
12,649,309
|
11,592,535
|
||||||||||
Current liabilities of discontinued operations
|
5,883,288
|
-
|
||||||||||
Total current liabilities
|
18,532,597
|
11,592,535
|
Notes
|
December 31, 2017
|
December 31, 2018
|
||||||||||
Long-term liabilities
|
||||||||||||
Long-term bank loans, net of current portion
|
7
|
29,811,241
|
31,716,549
|
|||||||||
Derivatives
|
13, 16
|
16,631
|
-
|
|||||||||
Vessel profit participation liability
|
7
|
1,297,100
|
1,067,500
|
|||||||||
Total long-term liabilities, continuing operations
|
31,124,972
|
32,784,049
|
||||||||||
Long-term liabilities of discontinued operations
|
30,364,035
|
-
|
||||||||||
Total long-term liabilities
|
61,489,007
|
32,784,049
|
||||||||||
Total liabilities
|
80,021,604
|
44,376,584
|
||||||||||
Commitments and contingencies
|
9
|
|||||||||||
Mezzanine Equity
|
||||||||||||
Preferred shares (par value $0.01, 20,000,000 shares authorized, 37,314 and 19,605 issued and outstanding, respectively)
|
15
|
35,613,759
|
18,757,361
|
|||||||||
Shareholders’ equity
|
||||||||||||
Common stock (par value $0.03, 200,000,000 shares authorized, 11,274,126 and 12,515,645 issued and outstanding)
|
18
|
338,230
|
375,476
|
|||||||||
Additional paid-in capital
|
284,236,597
|
233,668,127
|
||||||||||
Accumulated deficit
|
(237,880,629
|
)
|
(230,222,985
|
)
|
||||||||
Total shareholders’ equity
|
46,694,198
|
3,820,618
|
||||||||||
Total liabilities, mezzanine equity and shareholders’ equity
|
162,329,561
|
66,954,563
|
Notes
|
2016
|
2017
|
2018
|
|||||||||||||
Revenues
|
||||||||||||||||
Time charter revenue
|
21,409,236
|
24,278,048
|
36,062,202
|
|||||||||||||
Voyage charter revenue
|
47,979
|
559,319
|
206,682
|
|||||||||||||
Related party management fee income
|
14
|
240,000
|
240,000
|
-
|
||||||||||||
Commissions (including, $268,658, $310,467 and $453,361, respectively, to related party)
|
6, 12
|
(1,151,879
|
)
|
(1,318,248
|
)
|
(1,844,147
|
)
|
|||||||||
Net revenue, continuing operations
|
20,545,336
|
23,759,119
|
34,424,737
|
|||||||||||||
Operating expenses
|
||||||||||||||||
Voyage expenses
|
12
|
1,209,085
|
1,564,489
|
1,261,088
|
||||||||||||
Vessel operating expenses (including, $175,761, $190,723 and $256,069, respectively, to
related party)
|
6, 12
|
13,853,444
|
15,019,342
|
19,986,170
|
||||||||||||
Other operating income
|
-
|
(499,103
|
)
|
-
|
||||||||||||
Dry-docking expenses
|
2,204,784
|
571,291
|
2,774,924
|
|||||||||||||
Vessel depreciation
|
4
|
4,959,487
|
3,585,965
|
3,305,951
|
||||||||||||
Related party management fees
|
6
|
2,399,461
|
2,632,637
|
3,536,094
|
||||||||||||
Other general and administrative expenses (including $1,479,374, $1,306,476 and
$1,561,126, respectively, to related party)
|
6, 10
|
2,673,594
|
2,502,203
|
2,565,502
|
||||||||||||
Net gain on sale of vessels (including $27,741, $70,640 and $64,500 to related party)
|
4, 6
|
(10,597
|
)
|
(803,811
|
)
|
(1,340,952
|
)
|
|||||||||
Loss on write-down of vessels held for sale (including $29,469, $0 and $0, respectively,
to related party)
|
4, 6
|
5,924,668
|
4,595,819
|
-
|
||||||||||||
Total operating expenses,
continuing operations
|
33,213,926
|
29,168,832
|
32,088,777
|
|||||||||||||
Operating (loss) / income, continuing operations
|
(12,668,590
|
)
|
(5,409,713
|
)
|
2,335,960
|
|||||||||||
Other income/(expenses)
|
||||||||||||||||
Interest and other financing costs
|
(1,370,830
|
)
|
(1,554,695
|
)
|
(3,050,768
|
)
|
||||||||||
(Loss) / gain
on
derivatives, net
|
13
|
(119,154
|
)
|
12,389
|
(44,343
|
)
|
||||||||||
Other investment income
|
14
|
1,024,714
|
-
|
-
|
||||||||||||
Impairment of other investment
|
14
|
(4,421,452
|
)
|
-
|
-
|
|||||||||||
Foreign exchange (loss) / gain
|
(31,033
|
)
|
(30,214
|
)
|
13,963
|
|||||||||||
Interest income
|
22,277
|
37,972
|
81,792
|
|||||||||||||
Other expenses, net, continuing operations
|
(4,895,478
|
)
|
(1,534,548
|
)
|
(2,999,356
|
)
|
||||||||||
Equity loss in joint venture
|
14
|
(2,444,627
|
)
|
-
|
-
|
|||||||||||
Impairment in joint venture
|
14
|
(14,071,075
|
)
|
-
|
-
|
|||||||||||
Net
loss, continuing operations
|
(34,079,770
|
)
|
(6,944,261
|
)
|
(663,396
|
)
|
||||||||||
Dividends to Series B preferred shares
|
15
|
(1,725,699
|
)
|
(1,808,811
|
)
|
(1,335,733
|
)
|
|||||||||
Net loss
attributable to common shareholders, continuing operations
|
(35,805,469
|
)
|
(8,753,072
|
)
|
(1,999,129
|
)
|
||||||||||
Loss per share attributable to common shareholders - basic and diluted, continuing operations
|
11
|
(4.38
|
)
|
(0.79
|
)
|
(0.18
|
)
|
|||||||||
Weighted average number of shares outstanding during the year, basic
and diluted
|
11
|
8,165,703
|
11,067,524
|
11,318,197
|
||||||||||||
Net (loss) / income attributable to common shareholders, discontinued operations
|
17
|
(10,141,353
|
)
|
849,701
|
554,506
|
|||||||||||
Net loss attributable to common shareholders
|
(45,946,822
|
)
|
(7,903,371
|
)
|
(1,444,623
|
)
|
Number
of
Shares Outstanding
|
Common Stock
Amount
|
Additional Paid - in
Capital
|
Accumulated
Deficit
|
Total
|
||||||||||||||||
Balance December 31, 2015
|
8,195,760
|
245,873
|
278,833,156
|
(184,030,436
|
)
|
95,048,593
|
||||||||||||||
Net loss attributable to common shareholders
|
-
|
-
|
-
|
(45,946,822
|
)
|
(45,946,822
|
)
|
|||||||||||||
Issuance of shares from private placement, net of issuance costs
|
719,425
|
21,583
|
978,417
|
-
|
1,000,000
|
|||||||||||||||
Issuance of shares for vessel acquisition, net of issuance costs
|
900,000
|
27,000
|
1,773,000
|
-
|
1,800,000
|
|||||||||||||||
Issuance of shares sold at the market (ATM), net of issuance costs
|
978,847
|
29,365
|
1,881,287
|
-
|
1,910,652
|
|||||||||||||||
Issuance of restricted shares for stock incentive award and share-based compensation
|
82,080
|
2,462
|
291,879
|
-
|
294,341
|
|||||||||||||||
Balance December 31, 2016
|
10,876,112
|
326,283
|
283,757,739
|
(229,977,258
|
)
|
54,106,764
|
||||||||||||||
Net loss attributable to common shareholders
|
-
|
-
|
-
|
(7,903,371
|
)
|
(7,903,371
|
)
|
|||||||||||||
Issuance of shares sold at the market (ATM), net of issuance costs
|
301,780
|
9,060
|
365,183
|
-
|
374,243
|
|||||||||||||||
Issuance of restricted shares for stock incentive award and share-based compensation
|
100,270
|
3,008
|
113,554
|
-
|
116,562
|
|||||||||||||||
Shares forfeited
|
(4,036
|
)
|
(121
|
)
|
121
|
-
|
-
|
|||||||||||||
Balance December 31, 2017
|
11,274,126
|
338,230
|
284,236,597
|
(237,880,629
|
)
|
46,694,198
|
||||||||||||||
Net loss attributable to common shareholders
|
-
|
-
|
-
|
(1,999,129
|
)
|
(1,999,129
|
)
|
|||||||||||||
Spin-off of EuroDry Ltd. to stockholders
|
-
|
-
|
(52,520,821
|
)
|
9,656,773
|
(42,864,048
|
)
|
|||||||||||||
Issuance of shares sold at the market (ATM), net of issuance costs
|
1,116,069
|
33,482
|
1,831,628
|
-
|
1,865,110
|
|||||||||||||||
Issuance of restricted shares for stock incentive award and share-based compensation
|
125,450
|
3,764
|
120,723
|
-
|
124,487
|
|||||||||||||||
Balance December 31, 2018
|
12,515,645
|
375,476
|
233,668,127
|
(230,222,985
|
)
|
3,820,618
|
2016
|
2017
|
2018
|
||||||||||
Cash flows from operating activities:
|
||||||||||||
Net loss
|
(34,079,770
|
)
|
(6,944,261
|
)
|
(663,396
|
)
|
||||||
Adjustments to reconcile net loss to net cash (used in)/ provided by operating activities:
|
||||||||||||
Depreciation of vessels
|
4,959,487
|
3,585,965
|
3,305,951
|
|||||||||
Other operating income
|
-
|
(499,103
|
)
|
-
|
||||||||
Loss on write-down of vessels held for sale
|
5,924,668
|
4,595,819
|
-
|
|||||||||
Amortization and write off of deferred charges
|
141,883
|
113,244
|
321,181
|
|||||||||
Amortization of debt discount
|
-
|
60,988
|
465,507
|
|||||||||
Net gain on sale of vessels
|
(10,597
|
)
|
(803,811
|
)
|
(1,340,952
|
)
|
||||||
Share-based compensation
|
294,341
|
116,562
|
124,487
|
|||||||||
Unrealized (gain) / loss on derivatives
|
(12,921
|
)
|
5,901
|
(204,647
|
)
|
|||||||
Other investment income
|
(1,024,714
|
)
|
-
|
-
|
||||||||
Impairment of other investment
|
4,421,452
|
-
|
-
|
|||||||||
Equity loss and impairment of investment in joint venture
|
16,515,702
|
-
|
-
|
|||||||||
Changes in operating assets and liabilities:
|
||||||||||||
(Increase) / decrease in:
|
||||||||||||
Trade accounts receivable
|
217,517
|
(91,604
|
)
|
(73,210
|
)
|
|||||||
Prepaid expenses
|
2,639
|
(117,793
|
)
|
24,703
|
||||||||
Other receivables
|
378,811
|
(210,741
|
)
|
(1,066,378
|
)
|
|||||||
Inventories
|
344,578
|
329,244
|
(511,373
|
)
|
||||||||
Increase / (decrease) in:
|
||||||||||||
Due to related company
|
(2,876,104
|
)
|
4,314,415
|
(2,732,256
|
)
|
|||||||
Trade accounts payable
|
459,912
|
197,782
|
766,052
|
|||||||||
Accrued expenses
|
(654,127
|
)
|
167,016
|
282,045
|
||||||||
Deferred revenues
|
(90,825
|
)
|
233,402
|
(172,544
|
)
|
|||||||
Net cash (used in) / provided by operating
activities of continuing operations
|
(5,088,067
|
)
|
5,053,025
|
(1,474,830
|
)
|
|||||||
Cash flows from investing activities:
|
||||||||||||
Cash paid for capitalized expenses and vessel acquisition
|
(3,086,812
|
)
|
(30,063,480
|
)
|
(1,867
|
)
|
||||||
Cash released from other investment
|
-
|
4,000,000
|
-
|
|||||||||
Proceeds from sale of vessels
|
4,196,268
|
9,552,260
|
6,255,735
|
|||||||||
Net cash provided by / (used in) investing
activities of continuing operations
|
1,109,456
|
(16,511,220
|
)
|
6,253,868
|
||||||||
2016
|
2017
|
2018
|
||||||||||
Cash flows from financing activities:
|
||||||||||||
Proceeds from issuance of common stock, net of commissions paid
|
3,168,058
|
549,495
|
1,975,110
|
|||||||||
Investment in subsidiary spun-off
|
(8,823,927
|
)
|
(915,525
|
)
|
(3,298,356
|
)
|
||||||
Due from spun-off subsidiary
|
(725,620
|
)
|
639,312
|
-
|
||||||||
Offering expenses paid
|
(82,377
|
)
|
(341,072
|
)
|
(22,488
|
)
|
||||||
Loan arrangement fees paid
|
(260,232
|
)
|
(187,637
|
)
|
(419,863
|
)
|
||||||
Proceeds from long-term bank loans
|
14,500,000
|
22,250,000
|
34,250,000
|
|||||||||
Repayment of long-term bank loans
|
(16,117,125
|
)
|
(7,243,915
|
)
|
(32,349,000
|
)
|
||||||
Proceeds from related party loan
|
2,000,000
|
-
|
-
|
|||||||||
Repayment of related party loan
|
-
|
(2,000,000
|
)
|
-
|
||||||||
Net cash (used in) / provided by financing activities of continuing
operations
|
(6,341,223
|
)
|
12,750,658
|
135,403
|
||||||||
Net (decrease) / increase in cash, cash equivalents and restricted cash
|
(10,319,834
|
)
|
1,292,463
|
4,914,441
|
||||||||
Cash, cash equivalents and restricted cash at beginning of year
|
17,324,518
|
7,004,684
|
8,297,147
|
|||||||||
Cash, cash equivalents and restricted cash at end of year, continuing operations
|
7,004,684
|
8,297,147
|
13,211,588
|
|||||||||
Cash breakdown
|
||||||||||||
Cash and cash equivalents
|
2,616,984
|
2,858,927
|
6,960,258
|
|||||||||
Restricted cash, current
|
153,432
|
1,103,953
|
117,063
|
|||||||||
Restricted cash, long term
|
4,234,268
|
4,334,267
|
6,134,267
|
|||||||||
Total cash, cash equivalents and restricted cash shown in the statement of cash flows, continuing operations
|
7,004,684
|
8,297,147
|
13,211,588
|
|||||||||
Discontinued operations:
|
||||||||||||
Net cash provided by operating activities of discontinued operations
|
4,255,829
|
2,910,287
|
3,970,170
|
|||||||||
Net cash used in investing activities of discontinued operations
|
(24,243,012
|
)
|
(9,635,504
|
)
|
(29,045,685
|
)
|
||||||
Net cash provided by financing activities of discontinued operations
|
20,472,737
|
9,283,359
|
27,928,885
|
Supplemental cash flow information
Cash paid for interest, net of capitalized expenses
|
1,238,422
|
1,174,863
|
2,475,631
|
|||||||||
Financing, and investing activities fees:
|
||||||||||||
Loan arrangement fees accrued
|
-
|
74,863
|
-
|
|||||||||
Offering expenses accrued
|
178,308
|
12,488
|
100,000
|
|||||||||
Payment-in-kind dividends
|
1,725,699
|
1,808,811
|
1,335,733
|
|||||||||
Capital expenditures included in liabilities
|
142,947
|
-
|
-
|
|||||||||
Shares issued as consideration for vessel acquisition including inventory on-board
|
1,800,000
|
-
|
-
|
|||||||||
Preferred shares distributed to EuroDry
|
-
|
-
|
18,192,131
|
● |
Allendale Investment S.A. incorporated in Panama on January 22, 2002, owner of the Panama flag 18,154 deadweight tons (“DWT”)
/ 1,169 twenty-foot equivalent (“TEU” – a measure of carrying capacity in containers) container carrier M/V “Kuo Hsiung”, which was built in 1993 and acquired on May 13, 2002.
|
● |
Alterwall Business Inc. incorporated in Panama on January 15, 2001, owner of the Panama flag 18,253 DWT / 1,169 TEU container
carrier M/V “Ninos” (previously named M/V “Quingdao I”) which was built in 1990 and acquired on February 16, 2001.
|
● |
Diana Trading Ltd. incorporated in the Republic of Marshall Islands on September 25, 2002, owner of the Marshall Islands flag
69,734 DWT bulk carrier M/V “Irini”, which was built in 1988 and acquired on October 15, 2002. M/V “Irini” was sold on July 10, 2013.
|
● |
Xenia International Corp., incorporated in the Republic of Marshall Islands on April 6, 2006, owner of the Marshall Islands
flag 22,568 DWT / 950 TEU multipurpose M/V “Tasman Trader”, which was built in 1990 and acquired on April 27, 2006. On March 7, 2012, the vessel was renamed M/V “Anking”. The vessel was sold on June 4, 2013.
|
● |
Prospero Maritime Inc., incorporated in the Republic of Marshall Islands on July 21, 2006, owner of the Marshall Islands flag
69,268 DWT dry bulk M/V “Aristides N.P.”, which was built in 1993 and acquired on September 21, 2006. The vessel was sold on January 15, 2016.
|
● |
Xingang Shipping Ltd., incorporated in Republic of Liberia on October 16, 2006, owner of the Liberian flag 23,596 DWT / 1,599
TEU container carrier M/V “YM Xingang I” , which was built in February 1993 and acquired on November 15, 2006. On July 11, 2009, the vessel was renamed M/V “Mastro Nicos” and on November 5, 2009, it was renamed M/V “YM Port Kelang”.
On October 25, 2011 the vessel was renamed M/V “Marinos”. The vessel was sold on November 26, 2015.
|
● |
Manolis Shipping Ltd., incorporated in the Republic of Marshall Islands on March 16, 2007, owner of the Marshall Islands flag
20,346 DWT / 1,452 TEU container carrier M/V “Manolis P”, which was built in 1995 and acquired on April 12, 2007.
|
● |
Eternity Shipping Company, incorporated in the Republic of Marshall Islands on May 17, 2007, owner of the Marshall Islands
flag 30,007 DWT / 1,742 TEU container carrier M/V “Clan Gladiator”, which was built in 1992 and acquired on June 13, 2007. On May 9, 2008, M/V “Clan Gladiator” was renamed M/V “OEL Transworld” and on August 31, 2009 the vessel was
renamed M/V “Captain Costas”. The vessel was sold on May 10, 2016.
|
● |
Pilory Associates Corp., incorporated in Panama on July 4, 2007, owner of the Panamanian flag 33,667 DWT / 1,932 TEU
container carrier M/V “Despina P”, which was built in 1990 and acquired on August 13, 2007. The vessel was sold on December 28, 2015.
|
● |
Tiger Navigation Corp., incorporated in the Republic of Marshall Islands on August 29, 2007, owner of the Marshall Islands
flag 31,627 DWT / 2,228 TEU container carrier M/V “Tiger Bridge”, which was built in 1990 and acquired on October 4, 2007. The vessel was sold on November 9, 2015.
|
● |
Noumea Shipping Ltd, incorporated in the Republic of Marshall Islands on May 14, 2008, owner of the Marshall Islands flag
34,677 DWT / 2,556 TEU container carrier M/V “Maersk Noumea”, renamed “Evridiki G”, which was built in 2001 and acquired on May 22, 2008.
|
● |
Saf-Concord Shipping Ltd., incorporated in the Republic of Liberia on June 8, 2008, owner of the Liberian flag 46,667 DWT
bulk carrier M/V “Monica P”, which was built in 1998 and acquired on January 19, 2009. The vessel was sold on June 25, 2018.
|
● |
Eleni Shipping Ltd., incorporated in the Republic of Liberia on February 11, 2009, owner of the Liberian flag 72,119 DWT bulk
carrier M/V “Eleni P”, which was built in 1997, acquired on March 6, 2009 and sold on January 26, 2017.
|
● |
Aggeliki Shipping Ltd., incorporated in the Republic of Liberia on May 21, 2010, owner of the Liberian flag 30,306 DWT / 2008
TEU container carrier M/V “Aggeliki P” which was built in 1998, acquired on June 21, 2010 and sold on December 6, 2017.
|
● |
Joanna Maritime Ltd., incorporated in Liberia on June 10, 2013, owner of the Liberian flag 22,301 DWT / 1,732 TEU container
carrier M/V “Joanna” which was built in 1999 and acquired on July 4, 2013. On January 8, 2016, the vessel has been renamed M/V “Vento di Grecale”. On March 17, 2017 the vessel was again renamed M/V “Joanna”.
|
● |
Jonathan John Shipping Ltd., incorporated in the Republic of the Marshall Islands on August 19, 2016, owner of the Panamanian
flag 18,581 DWT / 1,439 TEU container carrier M/V “Aegean Express” which was built in 1997 and acquired on September 29, 2016.
|
● |
Hull 2 Shipping Ltd., incorporated in the Republic of the Marshall Islands on December 30, 2013, owner of the Marshall
Islands flag 20,976 DWT / 1,645 TEU container carrier M/V “RT Dagr” which was built in 1998 and acquired on December 23, 2017. The vessel was sold on January 31, 2017.
|
● |
Gregos Shipping Ltd., incorporated in the Republic of Liberia on May 25, 2017, owner of the Liberian flag 35,600 DWT / 2,788
TEU container carrier M/V “EM Astoria” which was built in 2004 and acquired on June 20, 2017.
|
● |
Athens Shipping Ltd., incorporated in the Republic of the Marshall Islands on September 18, 2017, owner of the Marshall
Islands flag 32,350 DWT / 2,506 TEU container carrier M/V “EM Athens” which was built in 2000 and acquired on September 29, 2017.
|
● |
Corfu Navigation Ltd., incorporated in the Republic of the Marshall Islands on September 18, 2017, owner of the Marshall
Islands flag 34,654 DWT / 2,556 TEU container carrier M/V “EM Corfu” which was built in 2001 and acquired on October 29, 2017.
|
● |
Oinousses Navigation Ltd., incorporated in the Republic of the Marshall Islands on September 18, 2017, owner of the Marshall
Islands flag 32,350 DWT / 2,506 TEU container carrier M/V “EM Oinousses” which was built in 2000 and acquired on October 23, 2017.
|
● |
Bridge Shipping Ltd., incorporated in the Republic of the Marshall Islands on September 18, 2017, owner of the Marshall
Islands flag 71,366 DWT / 5,610 TEU container carrier M/V “Akinada Bridge” which was built in 2001 and acquired on December 21, 2017.
|
Year ended December 31,
|
||||||||||||
Charterer
|
2016
|
2017
|
2018
|
|||||||||
CMA CGM, Marseille
|
19
|
%
|
34
|
%
|
51
|
%
|
||||||
New Golden Sea Shipping Pte. Ltd., Singapore
|
30
|
%
|
31
|
%
|
33
|
%
|
||||||
MSC Geneva
|
22
|
%
|
17
|
%
|
11
|
%
|
2. |
Significant Accounting Policies - continued
|
2. |
Significant Accounting Policies - continued
|
2. |
Significant Accounting Policies - continued
|
2. |
Significant Accounting Policies - continued
|
2. |
Significant Accounting Policies - continued
|
2. |
Significant Accounting Policies - continued
|
3. |
Inventories
|
2017
|
2018
|
|||||||
Lubricants
|
1,107,571
|
1,043,763
|
||||||
Victualing
|
85,447
|
79,965
|
||||||
Bunkers
|
-
|
580,663
|
||||||
Total
|
1,193,018
|
1,704,391
|
4. |
Vessels, net
|
Costs |
Accumulated
Depreciation
|
Net Book
Value
|
||||||||||
Balance, January 1, 2017
|
58,665,385
|
(17,520,010
|
)
|
41,145,375
|
||||||||
- Depreciation for the year
|
-
|
(3,585,965
|
)
|
(3,585,965
|
)
|
|||||||
- Vessel Acquisitions
|
30,015,188
|
-
|
30,015,188
|
|||||||||
- Sale of vessels
|
(9,318,842
|
)
|
2,110,762
|
(7,208,080
|
)
|
|||||||
- Vessels held for sale
|
(18,081,755
|
)
|
9,847,316
|
(8,234,439
|
)
|
|||||||
Balance, December 31, 2017
|
61,279,976
|
(9,147,897
|
)
|
52,132,079
|
||||||||
- Depreciation for the year
|
-
|
(3,305,951
|
)
|
(3,305,951
|
)
|
|||||||
Balance, December 31, 2018
|
61,279,976
|
(12,453,848
|
)
|
48,826,128
|
4. |
Vessels, net - continued
|
4. |
Vessels, net - continued
|
As of December 31,
2017 |
As of December 31,
2018 |
|||||||
Accrued payroll expenses
|
210,664
|
93,404
|
||||||
Accrued interest expense
|
262,546
|
565,623
|
||||||
Accrued deferred charges
|
74,863
|
-
|
||||||
Accrued general and administrative expenses
|
209,161
|
348,761
|
||||||
Accrued commissions
|
100,793
|
39,545
|
||||||
Other accrued expenses
|
259,083
|
254,472
|
||||||
Total
|
1,117,110
|
1,301,805
|
6. |
Related Party Transactions
|
6. |
Related Party Transactions - continued
|
7. |
Long-Term Debt
|
Borrower
|
December 31,
2017 |
December 31,
2018 |
|||||||
Noumea Shipping Ltd.
|
(a)
|
5,640,000
|
3,341,000
|
||||||
Gregos Shiping Ltd.
|
(b)
|
4,550,000
|
4,150,000
|
||||||
Alterwall Business Inc. / Allendale Investments S.A. / Manolis Shipping Ltd. / Joanna Maritime Ltd. / Jonathan John Shipping Ltd.
|
(c)
|
7,900,000
|
-
|
||||||
Athens Shipping Ltd. / Oinousses Navigation Ltd. / Corfu Navigation ltd. / Bridge Shipping Ltd.
|
(d)
|
17,500,000
|
-
|
||||||
Alterwall Business Inc. / Allendale Investments S.A. / Manolis Shipping Ltd. / Joanna Maritime Ltd. / Jonathan John shipping Ltd.
/ Athens Shipping Ltd. / Oinousses Navigation Ltd. / Corfu Navigation Ltd. / Bridge Shipping Ltd.
|
(e)
|
-
|
30,000,000
|
||||||
35,590,000
|
37,491,000
|
||||||||
Less: Current portion
|
(4,699,028
|
)
|
(5,212,000
|
)
|
|||||
Long-term portion
|
(30,890,972
|
)
|
(32,279,000
|
)
|
|||||
Deferred charges, current portion
|
142,767
|
125,357
|
|||||||
Deferred charges, long-term portion
|
196,619
|
237,848
|
|||||||
Debt discount, current portion
|
353,000
|
216,402
|
|||||||
Debt discount, long-term portion
|
883,112
|
324,603
|
|||||||
Long-term debt, current portion net of deferred charges and debt discount
|
4,203,261
|
4,870,241
|
|||||||
Long-term debt, long-term portion net of deferred charges and debt discount
|
29,811,241
|
31,716,549
|
To December 31:
|
||||
2019
|
5,212,000
|
|||
2020
|
5,212,000
|
|||
2021
|
27,067,000
|
|||
2022
|
-
|
|||
2023
|
-
|
|||
Thereafter
|
-
|
|||
Total
|
37,491,000
|
(a)
|
On December 22, 2016, the supplemental agreement with Noumea Shipping Ltd., owner of M/V “Evridiki G” was signed in order to
refinance the final quarterly instalment of $720,000 and the balloon payment of $6,360,000 originally due in December 2016. The borrower and the lender agreed to amend the repayment profile in respect of the loan of which $7,080,000
remained outstanding as of the date of the supplemental agreement and to extend the final maturity date to January 2018. The loan will be repaid with three repayments of $720,000 each, due in December 2016, in July 2017 and in
January 2018 together with the balloon payment of $4,920,000 due in January 2018. On February 27, 2018, the Company signed and drew a term loan facility with Credit Agricole in order to refinance the existing indebtedness of M/V
“Evridiki G” with the bank. This is a $4,250,000 loan drawn by Noumea Shipping Ltd. as Borrower. The loan is payable in fourteen consecutive quarterly instalments. Thirteen of $303,000 each and a final instalment in the amount of
$311,000. The margin of the loan is 3.00% above LIBOR. The security cover ratio covenant is set to 130%. The loan is secured with the following: (i) first priority mortgages over M/V “Evridiki G” and collateral vessel (M/V “EM
Astoria”), (ii) first assignment of earnings and insurance and (iii) other covenants and guarantees similar to the remaining loans of the Company.
|
(b)
|
On June 15, 2017, the Company signed a term loan facility with Credit Agricole and on June 19, 2017 a loan of $4,750,000 was
drawn by Gregos Shipping Ltd. to partly finance the purchase of M/V “EM Astoria”. The loan is payable in twenty or sixteen consecutive equal quarterly installments of $100,000 plus a balloon amount of $2,750,000 or $3,150,000 (the
debt repayment schedule shown in the previous table assumes repayment in sixteen quarters). The margin of the loan is 2.65% above LIBOR. The loan is secured with (i) first priority mortgages over M/V “EM Astoria”, (ii) first
assignment of earnings and insurance of M/V “EM Astoria”, (iii) a corporate guarantee of Euroseas Ltd. and other covenants and guarantees similar to remaining loans of the Company. The Company paid a loan arrangement fee of $50,000
for this loan. The Company has also entered into a profit sharing agreement with Credit Agricole whereby it will share with the bank 35% of the excess of the fair market value of the vessel over the outstanding loan when the vessel
is sold or when the loan matures. As a result of the lender's entitlement to participate in the appreciation of the market value of the mortgaged vessel, the Company has recognized a participation liability of amount $1,297,100 and
$1,067,500 as of December 31, 2017 and 2018, respectively, presented in "Vessel profit participation liability" in the accompanying “Consolidated balance sheets”, with a corresponding debit to a debt discount account, presented
contra to the loan balance. In addition, 35% of the cash flow after debt service will be set aside and be used to repay the balloon payment with any excess funds to be paid to the bank.
|
(c)
|
On February 12, 2016, the Company signed and drew a term loan facility with Eurobank Ergasias S.A in order to refinance all
of its existing facilities with the bank. This is a $14,500,000 loan drawn by Saf-Concord Shipping Ltd, Eternity Shipping Company, Allendale Investments S.A., Manolis Shipping Limited, Alterwall Business Inc., Aggeliki Shipping Ltd
and Jonathan John Shipping Ltd. (which was cross-collateralized as per supplemental agreement dated September 27, 2016 replacing Eternity Shipping Company, the owner of M/V “Captain Costas” that was sold in 2016) as Borrowers. The
loan is payable in twelve equal consecutive quarterly instalments of $460,000 each, with a balloon payment of $8,980,000 to be paid together with the last instalment in February 2019. The interest was based on LIBOR plus a margin of
6.00%. The loan is secured with the following: (i) first priority mortgages over M/V “Monica P”, M/V “Captain Costas” replaced by M/V “Aegean Express” after her sale, M/V “Kuo Hsuing”, M/V “Manolis P”, M/V “Ninos”, M/V “Aggeliki P”,
(ii) first assignment of earnings and insurance, (iii) a corporate guarantee of Euroseas Ltd and other covenants and guarantees similar to the rest of the loans of the Company, and (iv) a $2,800,000 cash collateral deposit pledged
in favor of the bank. The Company paid loan arrangement fees of $247,500 for this loan. In August 2017, the Company applied $1 million from the pledged amount against the loan and prepaid an amount of $540,000 deducted from the
balloon payment and made a prepayment of $460,000 that referred to the installment of the fourth quarter of 2017. In November 2017, the Company agreed with the lender to release M/V “Monica P.” from the mortgage and substitute it
with M/V “Joanna”. In connection with this substitution, the Company prepaid an amount of $460,000 referring to the installment due in the first quarter of 2018 and another $280,000 deducted from the balloon payment. In December
2017, M/V “Aggeliki P.” was sold for scrap. An amount of $2,100,000 from the sale of the vessel was prepaid, from which an amount of $1,840,000 was applied against the final four instalments and an amount of $260,000 was deducted
from the balloon payment of the loan. Following the prepayments mentioned above, the balloon payment was reduced to $7.9 million with the repayment of the loan resuming in February 2019. The loan was refinanced in November 2018 (See
note 7-(e)).
|
(d)
|
On October 19, 2017, the Company signed a term loan facility with Eurobank Ergasias S.A for an amount of $17,500,000. The
loan was used to partially finance the acquisition of M/V “EM Athens”, M/V “EM Oinousses”, M/V “EM Corfu” and M/V “Akinada Bridge”. The loan was drawn in tranches upon the delivery of each vessel to the Company with the last
drawdown taking place on December 21, 2017.The loan is payable in five consecutive equal quarterly installments of $500,000 followed by eleven consecutive equal quarterly installments of $800,000 and a balloon payment of $6,200,000.
The loan bears interest at LIBOR plus a margin of 4.5%. The loan is secured with (i) first priority mortgages over M/V “EM Athens”, M/V “EM Oinousses”, M/V “EM Corfu” and M/V “Akinada Bridge”, (ii) first assignment of earnings and
insurance of the abovementioned vessels, (iii) a corporate guarantee of Euroseas Ltd and other covenants and guarantees similar to the remaining loans of the Company. The Company paid loan arrangement fees of $137,638 within 2017
and another $54,862 within 2018 for this loan. The loan was refinanced in November 2018 (See note 7-(e)).
|
(e)
|
On November 21, 2018, the Company signed a reducing revolving credit facility with Eurobank Ergasias S.A (the “Lender”) for
an amount of up to $45,000,000. A loan of $30,000,000 was drawn on November 21, 2018 by Alterwall Business Inc., Allendale Investments S.A., Manolis Shipping Ltd., Joanna Maritime Ltd., Jonathan John Shipping Ltd., Athens Shipping
Ltd., Oinousses Navigation Ltd., Corfu Navigation Ltd. and Bridge Shipping Ltd. to fully refinance all of the Company’s existing facilities with this bank and provide working capital. The revolving tranche will be available for a
period of 18 months from signing of the loan agreement for the purpose of partly financing new vessel acquisitions or providing working capital and can be renewed subject to the bank’s approval and a fee to be determined. The loan
is payable in 12 equal consecutive quarterly principal installments of $900,000 and the balance will be repaid through balloon payment of $19,200,000 together with the last principal installment in November 2021. Each quarterly
principal instalment paid is added to the revolving tranche and may be redrawn. The interest rate margin is 4.40% over LIBOR. The loan is secured with (i) first priority mortgage over M/V “Ninos”, M/V “Kuo Hsiung”, M/V “Aegean
Express”, M/V “Manolis P.” M/V “Joanna”, M/V “EM Athens”, M/V “EM Oinousses”, M/V “EM Corfu” and M/V “Akinada Bridge”, (ii) first assignment of earnings and insurance of the aforementioned vessels, (iii) a corporate guarantee of
Euroseas Ltd and other covenants and guarantees similar to the remaining loan of the Company. The Company has the option (at the Lender’s absolute discretion) to substitute a Vessel by notifying the Lender in writing at least one
(1) month prior to the intended substitution date, provided that: a) the substitute vessel is of a similar type, of the same or younger age, having the same or enhanced characteristics (including, without limitation, deadweight,
lightweight, shipyard pedigree and technical specifications) and will be 100% owned by a shipowning company, incorporated in a jurisdiction acceptable to the Lender and owned by a ship owning company owned by the Company (directly
or indirectly) and b) the new shipowning company provides a first preferred mortgage over the new vessel and a corporate guarantee in favor of the Lender and executes any other security documentation as may be requested by the
Lender at its discretion. The Company paid loan arrangement fees of $300,000 for this loan. The remaining $15,000,000 of the revolving facility remains available to the company in order to finance up to 55% of the market value of
post 2001 built ships. The new tranches will be repaid through sixteen quarterly principal instalments with the amount of each such instalment being equal to such amount so that the balloon amount to be equal to 50% of the initially
drawn relevant tranche.
|
|
|
9. |
Commitments and Contingencies
|
|
a) |
On November 3, 2016 an award of 82,080 non-vested restricted shares, was made to 19 key persons of which 50% vested on November 1, 2017 and 50%
vested on November 1, 2018; awards to officers and directors amounted to 48,048 shares and the remaining 34,032 shares were awarded to employees of Eurobulk.
|
|
b) |
On November 2, 2017 an award of 100,270 non-vested restricted shares, was made to 18 key persons of which 50% vested on July 1, 2018 and 50% will
vest on July 1, 2019; awards to officers and directors amounted to 57,700 shares and the remaining 42,570 shares were awarded to employees of Eurobulk.
|
|
c) |
On November 21, 2018 an award of 125,450 non-vested restricted shares, was made to 18 key persons of which 50% will vest on November 16, 2019 and
50% will vest on November 16, 2020; awards to officers and directors amounted to 72,170 shares and the remaining 53,280 shares were awarded to employees of Eurobulk.
|
Non-vested Shares
|
Shares
|
Weighted-Average
Grant-Date Fair Value
|
||||||
Non-vested on January 1, 2018
|
140,362
|
1.60
|
||||||
Granted
|
125,450
|
1.07
|
||||||
Vested
|
(90,227
|
)
|
1.52
|
|||||
Non-vested on December 31, 2018
|
175,585
|
1.27
|
11. |
Loss Per Share
|
2016
|
2017
|
2018
|
||||||||||
Income:
|
||||||||||||
Net loss attributable to common shareholders, continuing operations
|
(35,805,469
|
)
|
(8,753,072
|
)
|
(1,999,129
|
)
|
||||||
Basic and diluted earnings per share:
|
||||||||||||
Weighted average common shares –
Outstanding, continuing operations
|
8,165,703
|
11,067,524
|
11,318,197
|
|||||||||
Basic and diluted loss per share, continuing operations
|
(4.38
|
)
|
(0.79
|
)
|
(0.18
|
)
|
||||||
Net loss attributable to common shareholders, discontinued operations
|
(10,141,353
|
)
|
849,701
|
554,506
|
||||||||
Net loss attributable to common shareholders
|
(45,946,822
|
)
|
(7,903,371
|
)
|
(1,144,623
|
)
|
||||||
Basic and diluted loss per share
|
(5.63
|
)
|
(0.71
|
)
|
(0.10
|
)
|
Year ended December 31,
|
||||||||||||
2016
|
2017
|
2018
|
||||||||||
Voyage expenses
|
||||||||||||
Port charges and canal dues
|
386,290
|
1,156,511
|
384,893
|
|||||||||
Bunkers
|
822,795
|
407,978
|
876,195
|
|||||||||
Total
|
1,209,085
|
1,564,489
|
1,261,088
|
|||||||||
Vessel operating expenses
|
||||||||||||
Crew wages and related costs
|
8,049,555
|
8,771,386
|
11,020,924
|
|||||||||
Insurance
|
1,249,942
|
1,261,976
|
1,537,539
|
|||||||||
Repairs and maintenance
|
232,082
|
643,788
|
1,043,632
|
|||||||||
Lubricants
|
1,190,137
|
1,169,412
|
1,665,849
|
|||||||||
Spares and consumable stores
|
2,290,196
|
2,391,420
|
3,445,422
|
|||||||||
Professional and legal fees
|
116,733
|
10,037
|
252,156
|
|||||||||
Other
|
724,799
|
771,323
|
1,020,648
|
|||||||||
Total
|
13,853,444
|
15,019,342
|
19,986,170
|
Derivatives not designated as hedging instruments
|
Balance Sheet Location
|
December 31,
2017 |
December 31,
2018
|
||||||
Interest rate swap contracts
|
Current liabilities – Derivatives
|
229,451
|
41,435
|
||||||
Interest rate swap contracts
|
Long-term liabilities – Derivatives
|
16,631
|
-
|
||||||
Total derivative liabilities
|
246,082
|
41,435
|
Derivatives not designated as hedging instruments
|
Location of gain (loss) recognized
|
Year Ended
December 31, 2016
|
Year Ended
December 31, 2017
|
Year Ended
December 31, 2018
|
|||||||||
Interest rate swap contracts– Fair value
|
(Loss) / gain on derivatives, net
|
12,921
|
(5,901
|
)
|
204,647
|
||||||||
Interest rate swap contracts - Realized (loss) / gain
|
(Loss) / gain on derivatives, net
|
(132,075
|
)
|
19,071
|
(201,745
|
)
|
|||||||
Total (Loss) / gain
on interest rate swap contracts
|
(119,154
|
)
|
13,170
|
2,902
|
FFA contracts not designated as hedging instruments
|
Location of gain (loss) recognized
|
Year Ended December 31, 2017
|
Year Ended December 31, 2018
|
FFA contracts – Fair value
|
(Loss)/gain on derivatives, net
|
(781)
|
-
|
FFA contracts – Realized gain/(loss)
|
(Loss)/gain on derivatives, net
|
-
|
(47,245)
|
Total loss on FFA contracts
|
(781)
|
(47,245)
|
14. |
Investment in Joint Venture and Other Investment
|
14. |
Investment in Joint Venture and Other Investment - continued
|
(In USD)
|
Other Investment
|
|||
Balance, January 1, 2016
|
7,396,738
|
|||
Total gain for the period included in Investment income
|
1,024,714
|
|||
Impairment of other investment
|
(4,421,452
|
)
|
||
Balance, December 31, 2016
|
4,000,000
|
|||
Return of funds, September 22, 2017
|
(4,000,000
|
)
|
||
Balance, December 31, 2017
|
-
|
Number
of
Shares
|
Preferred
Shares
Amount
|
Dividends
paid-in-kind |
Total
|
|||||||||||||
Balance,
January 1, 2016
|
33,779
|
29,000,000
|
3,079,249
|
32,079,249
|
||||||||||||
Dividends declared
|
1,726
|
-
|
1,725,699
|
1,725,699
|
||||||||||||
Balance,
December 31, 2016
|
35,505
|
29,000,000
|
4,804,948
|
33,804,948
|
||||||||||||
Dividends declared
|
1,809
|
-
|
1,808,811
|
1,808,811
|
||||||||||||
Balance,
December 31, 2017
|
37,314
|
29,000,000
|
6,613,759
|
35,613,759
|
||||||||||||
Dividends declared
|
1,333
|
-
|
1,335,733
|
1,335,733
|
||||||||||||
Shares distributed to EuroDry
|
(19,042
|
)
|
(14,500,000
|
)
|
(3,692,131
|
)
|
(18,192,131
|
)
|
||||||||
Balance,
December 31, 2018
|
19,605
|
14,500,000
|
4,257,361
|
18,757,361
|
Fair Value Measurement as of December 31, 2018
|
||||
Total
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
|
Liabilities
|
||||
Interest rate swap
contract, current portion
|
$41,435
|
$41,435
|
Fair Value Measurement as of December 31, 2017
|
||||
Total
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
|
Liabilities
|
||||
Interest rate swap contracts, current portion
|
$229,451
|
-
|
$229,451
|
-
|
Interest rate swap
contracts, long-term portion
|
$16,631
|
-
|
$16,631
|
-
|
December 31, 2016
|
||||||||||||||||||||
Fair Value
|
Level 1
|
Level 2
|
Level 3
|
Loss 2016
|
||||||||||||||||
Vessels held for sale
|
$
|
2,946,923
|
-
|
$
|
2,946,923
|
-
|
$
|
5,924,668
|
||||||||||||
Other investment
|
$
|
4,000,000
|
-
|
-
|
$
|
4,000,000
|
$
|
4,421,452
|
||||||||||||
Investment in joint venture
|
0
|
-
|
-
|
0
|
$
|
14,071,075
|
||||||||||||||
December 31, 2017
|
||||||||||||||||||||
Fair Value
|
Level 1
|
Level 2
|
Level 3
|
Loss 2017
|
||||||||||||||||
Vessels held for sale
|
$
|
5,000,000
|
-
|
$
|
5,000,000
|
-
|
$
|
4,595,819
|
||||||||||||
Vessel profit participating liability
|
$
|
1,297,100
|
-
|
$
|
1,297,100
|
-
|
-
|
|||||||||||||
December 31, 2018
|
||||||||||||||||||||
Fair Value
|
Level 1
|
Level 2
|
Level 3
|
Loss 2018
|
||||||||||||||||
Vessel profit participating liability
|
$
|
1,067,500
|
-
|
$
|
1,067,500
|
-
|
-
|
17. |
Discontinued Operations
|
Year Ended December 31
(discontinued operations)
|
||||||||||||
2016
|
2017
|
2018
|
||||||||||
Statement of Operations Data
|
||||||||||||
Voyage revenue
|
8,331,821
|
20,280,215
|
25,934,204
|
|||||||||
Commissions
(including, $104,148, $253,503
and $324,178, respectively, to related party)
|
(452,868
|
)
|
(1,122,196
|
)
|
(1,411,333
|
)
|
||||||
Voyage expenses
|
(82,627
|
)
|
(2,396,318
|
)
|
(410,676
|
)
|
||||||
Vessel operating expenses
(including,
$57,316, $102,131 and $115,026, respectively, to related party)
|
(4,308,418
|
)
|
(6,892,388
|
)
|
(9,183,152
|
)
|
||||||
Drydocking expenses
|
-
|
(127,509
|
)
|
(1,465,079
|
)
|
|||||||
Related party management fees
|
(780,135
|
)
|
(1,409,716
|
)
|
(1,701,340
|
)
|
||||||
Vessel depreciation
|
(3,828,634
|
)
|
(4,786,272
|
)
|
(5,422,155
|
)
|
||||||
Other general and administrative expenses
(including
$520,626, $693,524 and $731,456, respectively, to related party)
|
(798,828
|
)
|
(917,160
|
)
|
(2,346,502
|
)
|
||||||
Loss on termination and impairment of shipbuilding contracts
|
(7,050,179
|
)
|
-
|
-
|
||||||||
Operating (loss) / income
|
(8,969,868
|
)
|
2,628,656
|
3,993,967
|
||||||||
Total other expenses, net
|
(1,171,485
|
)
|
(1,778,955
|
)
|
(2,874,232
|
)
|
||||||
Net income
|
(10,141,353
|
)
|
849,701
|
1,119,735
|
||||||||
Dividend Series B Preferred Shares
|
-
|
-
|
(565,229
|
)
|
||||||||
Net income attributable to discontinued operations
|
(10,141,353
|
)
|
849,701
|
554,506
|
||||||||
Earnings per share attributable to common shareholders, basic and diluted
|
(6.21
|
)
|
0.38
|
0.25
|
||||||||
Weighted average number of shares outstanding during period, basic and diluted
|
1,633,141
|
2,213,505
|
2,232,821
|
17. |
Discontinued Operations - continued
|
1.1. |
Purpose
|
1.2. |
Administration
|
1.3. |
Persons Eligible for Awards
|
1.4. |
Types of Awards
|
1.5. |
Shares Available for Awards; Adjustments for Changes in Capitalization
|
|
(A) |
The number and type of securities or other property subject to each outstanding Award and the Exercise Price or grant price thereof, if applicable, shall be
equitably adjusted; and
|
|
(B) |
The Administrator shall make such equitable adjustments, if any, as the Administrator may deem appropriate to reflect such Equity Restructuring with respect
to the aggregate number and kind of shares that may be issued under the Plan (including, but not limited to, adjustment of the limitation set forth in Section 1.5(a)). The adjustments provided under this Section 1.5(c)(iv) shall be
nondiscretionary and shall be final and binding on the affected participant and the Company.
|
1.6. |
Definitions of Certain Terms
|
|
(A) |
any failure by the grantee substantially to perform the grantee's employment or consultancy/service or Board membership duties;
|
|
(B) |
any excessive unauthorized absenteeism by the grantee;
|
|
(C) |
any refusal by the grantee to obey the lawful orders of the Board or any other Person to whom the grantee reports;
|
|
(D) |
any act or omission by the grantee that is or may be injurious to the Company, any Subsidiary or any Affiliate, whether monetarily, reputationally or
otherwise;
|
|
(E) |
any act by the grantee that is inconsistent with the best interests of the Company, any Subsidiary or any Affiliate;
|
|
(F) |
the grantee's gross negligence that is injurious to the Company, any Subsidiary or any Affiliate, whether monetarily, reputationally or otherwise;
|
|
(G) |
the grantee's material violation of any of the policies of the Company, a Subsidiary or any Affiliate, as applicable, including, without limitation, those
policies relating to discrimination or sexual harassment;
|
|
(H) |
the grantee's material breach of his or her employment or service contract with the Company, any Subsidiary or any Affiliate;
|
|
(I) |
the grantee's unauthorized (1) removal from the premises of the Company, any Subsidiary or any Affiliate of any document (in any medium or form) relating to
the Company, any Subsidiary or any Affiliate or the customers or clients of the Company, any Subsidiary or any Affiliate or (2) disclosure to any Person of any of the Company's, any Subsidiary's or any Affiliate's, confidential or
proprietary information;
|
|
(J) |
the grantee's being convicted of, or entering a plea of guilty or nolo contendere to, any crime that constitutes a felony or involves moral turpitude; and
|
|
(K) |
the grantee's commission of any act involving dishonesty or fraud.
|
2.1. |
Agreements Evidencing Awards
|
2.2. |
Grant of Stock Options and Stock Appreciation Rights
|
2.3. |
Exercise of Options and Stock Appreciation Rights
|
2.4. |
Termination of Employment/Service; Death Subsequent to a Termination of Employment/Service
|
2.5. |
Transferability of Options and Stock Appreciation Rights
|
2.6. |
Grant of Restricted Stock
|
2.7. |
Grant of Restricted Stock Units
|
2.8. |
Grant of Unrestricted Stock
|
2.9. |
Grant of Phantom Stock Units
|
2.10. |
Other Stock-Based Awards
|
2.11. |
Dividend Equivalents
|
3.1. |
Amendment of the Plan; Modification of Awards
|
3.2. |
Consent Requirement
|
3.3. |
Nonassignability; Successors
|
3.4. |
Taxes
|
3.5. |
Change in Control
|
|
(A) |
who were directors of the Company on the first day of such period, or
|
|
(B) |
whose election or nomination for election to the Board was recommended or approved by at least a majority of the directors then still in office who were
directors of the Company on the first day of such period, or whose election or nomination for election were so approved,
|
3.6. |
Operation and Conduct of Business
|
3.7. |
No Rights to Awards
|
3.8. |
Right of Discharge Reserved
|
3.9. |
Non-Uniform Determinations
|
3.10. |
Other Payments or Awards
|
3.11. |
Headings
|
3.12. |
Effective Date and Term of Plan
|
3.13. |
Restriction on Issuance of Stock Pursuant to Awards
|
3.14. |
Requirement of Notification of Election Under Section 83(b) of the Code
|
3.15. |
Severability
|
3.16. |
Sections 409A and 457A
|
3.17. |
Forfeiture; Clawback
|
3.18. |
No Trust or Fund Created
|
3.19. |
No Fractional Shares
|
3.20. |
Governing Law
|
CLAUSE
|
PAGE
|
1.
|
PURPOSE, DEFINITIONS AND INTERPRETATION
|
1
|
2.
|
FACILITY
|
29
|
3.
|
POSITION OF THE LENDERS
|
30
|
4.
|
DRAWDOWN OF ADVANCES
|
31
|
5.
|
INTEREST
|
33
|
6.
|
INTEREST PERIODS
|
35
|
7.
|
DEFAULT INTEREST
|
35
|
8.
|
REPAYMENT, CANCELLATION, REDUCTION AND PREPAYMENT
|
36
|
9.
|
CONDITIONS PRECEDENT AND SUBSEQUENT
|
39
|
10.
|
REPRESENTATIONS AND WARRANTIES
|
40
|
11.
|
GENERAL UNDERTAKINGS
|
43
|
12.
|
CORPORATE UNDERTAKINGS
|
47
|
13.
|
INSURANCE
|
49
|
14.
|
SHIP COVENANTS
|
54
|
15.
|
SECURITY COVER
|
59
|
16.
|
PAYMENTS AND CALCULATIONS
|
60
|
17.
|
APPLICATION OF RECEIPTS
|
62
|
18.
|
APPLICATION OF EARNINGS
|
63
|
19.
|
EVENTS OF DEFAULT
|
65
|
20.
|
FEES AND EXPENSES
|
71
|
21.
|
INDEMNITIES
|
72
|
22.
|
NO SET-OFF OR TAX DEDUCTION
|
74
|
23.
|
ILLEGALITY, ETC
|
76
|
24.
|
INCREASED COSTS
|
77
|
25.
|
SET-OFF
|
79
|
26.
|
TRANSFERS AND CHANGES IN LENDING OFFICES
|
79
|
27.
|
VARIATIONS AND WAIVES
|
84
|
28.
|
NOTICES
|
85
|
29.
|
SUPPLEMENTAL
|
87
|
30.
|
LAW AND JURISDICTION
|
88
|
SCHEDULE 1
|
90
|
SCHEDULE 2
|
91
|
SCHEDULE 3
|
94
|
SCHEDULE 4
|
95
|
SCHEDULE 5
|
102
|
SCHEDULE 6
|
103
|
(1) |
EUROSEAS LTD.
being a company incorporated in
accordance with the laws of the Republic of the Marshall Islands, whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 (“
the Borrower
”)
|
(2) |
THE BANKS AND FINANCIAL INSTITUTIONS
listed in Schedule
1, as lenders (the “
Lenders
”);
|
(3) |
EUROBANK ERGASIAS S.A.
, a banking societé anonyme duly
incorporated under the laws of Greece, having its registered office at 8, Othonos Street, Athens, Greece, and acting as arranger through its branch at 83 Akti Miaouli & 1, Flessa Street, Piraeus 185 38, Greece (in that capacity, the
"
Arranger
");
|
(4) |
EUROBANK ERGASIAS S.A.
, a banking societé anonyme duly
incorporated under the laws of Greece, having its registered office at 8, Othonos Street, Athens, Greece, and acting as account bank through its branch at 83 Akti Miaouli & 1, Flessa Street, Piraeus 185 38, Greece (in that capacity,
the “
Account Bank
”);
|
(5) |
EUROBANK ERGASIAS S.A.
, a banking societé anonyme duly
incorporated under the laws of Greece, having its registered office at 8, Othonos Street, Athens, Greece, and acting as agent of the other Creditor Parties through its branch at 83 Akti Miaouli & 1, Flessa Street, Piraeus 185 38,
Greece (in that capacity, the “
Agent
”); and
|
(6) |
EUROBANK ERGASIAS S.A.
, a banking societé anonyme duly
incorporated under the laws of Greece, having its registered office at 8, Othonos Street, Athens, Greece, and acting as security trustee of the other Creditor Parties through its branch at 83 Akti Miaouli & 1, Flessa Street, Piraeus
185 38, Greece (in that capacity, the “
Security
Trustee
”).
|
1 |
PURPOSE, DEFINITIONS AND INTERPRETATION
|
1.1 |
Purpose
|
1.2 |
Definitions.
Subject to Clause 1.5, in this Agreement:
|
|
(a) |
in relation to an EEA Member Country which has implemented, or which at any time implements, Article 55 of Directive 2014/59/EU establishing a framework for
the recovery and resolution of credit institutions and investment firms, the relevant implementing law or regulation as described in the EU Bail-In Legislation Schedule from time to time; and
|
|
(b) |
in relation to any other state, any analogous law or regulation from time to time which requires contractual recognition of any Write-down and Conversion
Powers contained in that law or regulation;
|
|
(a) |
the 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"
|
|
(b) |
the rules for global systemically important banks contained in "Global systemically important banks: assessment methodology and the additional loss absorbency
requirement – Rules text" published by the Basel Committee on Banking Supervision in November 2011, as amended, supplemented or restated; and
|
|
(c) |
any further guidance or standards published by the Basel Committee on Banking Supervision relating to "Basel III";
|
|
(a) |
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;
|
|
(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) |
either:-
|
|
(a) |
all freight, hire and passage moneys, compensation payable for the provision of services by or from such Ship or under any charter commitment, compensation
payable to that Guarantor or (as the case may be) to the Security Trustee pursuant to the General Assignment in the event of requisition of such Ship for hire, remuneration for salvage and towage services, demurrage and detention moneys
and damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of such Ship;
|
|
(b) |
all moneys which are at any time payable under Insurances in respect of loss of hire;
|
|
(c) |
contributions of any nature whatsoever in respect of general average; and
|
|
(d) |
if and whenever such Ship is employed on terms whereby any moneys falling within paragraphs (a) or (b) above are pooled or shared with any other person, that
proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to that Ship;
|
|
(a) |
any claim by any governmental, judicial or regulatory authority which arises out of an Environmental Incident or an alleged Environmental Incident or which
relates to any Environmental Law; or
|
|
(b) |
any claim by any other person which relates to an Environmental Incident or to an alleged Environmental Incident,
|
|
(a) |
any release of Environmentally Sensitive Material from a Ship; or
|
|
(b) |
any incident in which Environmentally Sensitive Material is released from a vessel other than a Ship and which involves a collision between that Ship and such
other vessel or some other incident of navigation or operation, in either case, in connection with which that Ship is actually or potentially liable to be arrested, attached, detained or injuncted and/or that Ship or the Owner owning
that Ship and/or any operator or manager is at fault or allegedly at fault or otherwise liable to any legal or administrative action; or
|
|
(c) |
any other incident in which Environmentally Sensitive Material is released otherwise than from a Ship and in connection with which that Ship is actually or
potentially liable to be arrested and/or where the Owner of that Ship and/or any operator or manager of that Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action;
|
|
(a) |
in relation to Ship A, it means Advance A;
|
|
(b) |
in relation to Ship B, it means Advance B;
|
|
(c) |
in relation to Ship C, it means Advance C;
|
|
(d) |
in relation to Ship D, it means Advance D;
|
|
(e) |
in relation to Ship E, it means Advance E;
|
|
(f) |
in relation to Ship F, it means Advance F;
|
|
(g) |
in relation to Ship G, it means Advance G;
|
|
(h) |
in relation to Ship H, it means Advance H; and
|
|
(i) |
in relation to Ship I, it means Advance I,
|
|
(a) |
sections 1471 to 1474 of the Code or any associated regulations or other official guidance;
|
|
(b) |
any treaty, law, regulation or other official guidance enacted in any other jurisdiction, or relating to an intergovernmental agreement between the US and any
other jurisdiction, which (in either case) facilitates the implementation of paragraph (a) above; or
|
|
(c) |
any agreement pursuant to the implementation of any treaty, law, regulation or other official guidance 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) |
any Security Document;
|
|
(c) |
any Fee Letter;
|
|
(d) |
any Transfer Certificate; or
|
|
(e) |
any other document (whether creating a Security Interest or not) which is executed at any time by the Borrower, the Guarantors, the Approved Manager, or any
other person as security for, or to establish any form of subordination or priorities arrangement in relation to, any amount payable to the Lenders under this Agreement or any of the 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 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 interest or currency swap or any other kind of derivative transaction entered into by the debtor or, if the agreement under which any such
transaction is entered into requires netting of mutual liabilities, the liability of the debtor for the net amount; or
|
|
(f) |
under a guarantee, indemnity or similar obligation entered into by the debtor in respect of a liability of another person which would fall within (a) to (e)
if the references to the debtor referred to the other person;
|
|
(a) |
all policies and contracts of insurance, including entries of a Ship in any protection and indemnity or war risks association, which are effected in respect
of that Ship, the Earnings or otherwise in relation to that Ship whether before, on or after the date of this Agreement; and
|
|
(b) |
all rights and other assets relating to, or derived from, any of the
|
|
(a) |
the applicable Screen Rate for the longest period (for which that Screen Rate is available) which is less than the relevant Interest Period; and
|
|
(a) |
the applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds the relevant Interest Period,
|
|
(a) |
the principle that equitable remedies may be granted or refused at the discretion of a court and the limitation of enforcement by laws relating to insolvency,
reorganisation and other laws generally affecting the rights of creditors;
|
|
(b) |
the time barring of claims under the Limitation Acts 1980 and Foreign Limitation Periods Act 1984, the possibility that an undertaking to
|
|
(c) |
similar principles, rights and defences under the laws of any Relevant Jurisdiction.
|
|
(a) |
a bank or financial institution listed in Schedule 1 and acting through its branch indicated thereto (or through another branch notified to the Borrower under
Clause 26.14), its successor or assign, 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 valid Transfer Certificate;
|
|
(a) |
the applicable Screen Rate; or
|
|
(b) |
if no Screen Rate is available for the relevant Interest Period, the Interpolated Screen Rate for the Facility (or the relevant part of it); or
|
|
(c) |
if:
|
|
(i) |
no Screen Rate is available for the currency of the Facility; or
|
|
(ii) |
no Screen Rate is available for the relevant Interest Period and it is not possible to calculate an Interpolated Screen Rate for the Facility (or the relevant
part of it),
|
|
(a) |
before an Advance has been made, Lenders whose Commitments are equal to or greater than 66 ⅔ per cent. of the Total Commitments; and
|
|
(b) |
after an Advance has been made, Lenders whose Contributions are equal to or greater than 66 ⅔ per cent. of the Facility;
|
|
(a) |
the business, operations, property, condition (financial or otherwise) or prospects of the Borrower or any other Obligor; or
|
|
(b) |
the ability of the Borrower or any other Obligor to perform its respective obligations under the Finance Documents; or
|
|
(c) |
the validity or enforceability of, or the effectiveness or ranking of, any Security Interest granted pursuant to any of the Finance Documents or the rights or
remedies of any Creditor Party under any of the Finance Documents;
|
|
(a) |
that is a container carrier(s), built in 2001 or later;
|
|
(b) |
whose Owner and/or (as the case may be) the Seller would provide and undertaking that she has not been traded in breach of Sanctions nor the subject of any
blacklisting by an nation or internal organisation;
|
|
(c) |
that is owned or is to be acquired for cash on arm's length commercial terms, by an entity, being a wholly-owned indirect subsidiary of the Borrower,
nominated by the Borrower and accepted by the Agent;
|
|
(d) |
that on the Drawdown Date of the Advance related thereto, would be in compliance with the representations, covenants and warrantees applicable to any
Mortgaged Ship under this Agreement or any of the other Finance Documents;
|
|
(a) |
Security Interests created by the Finance Documents;
|
|
(b) |
liens for unpaid crew’s wages in accordance with usual maritime practice;
|
|
(c) |
liens for salvage;
|
|
(d) |
liens arising by operation of law for not more than 2 months’ prepaid hire under any charter in relation to a Ship not prohibited by this Agreement;
|
|
(e) |
liens for master’s disbursements incurred in the ordinary course of trading and any other lien arising by operation of law or otherwise in the
|
|
(f) |
any Security Interest created in favour of a plaintiff or defendant in any action of the court or tribunal before whom such action is brought as security for
costs and expenses where the Borrower is prosecuting or defending such action in good faith by appropriate steps; and
|
|
(g) |
Security Interests arising by operation of law in respect of taxes which are not overdue for payment other than taxes being contested in good faith by
appropriate steps and in respect of which appropriate reserves have been made;
|
|
(a) |
any Finance Document;
|
|
(b) |
any Management Agreement;
|
|
(c) |
each Charter.
|
|
(a) |
its jurisdiction of incorporation;
|
|
(b) |
any jurisdiction where any Charged Property owned by it is situated;
|
|
(c) |
any jurisdiction where it conducts its business; and
|
|
(d) |
any jurisdiction whose laws govern the perfection of any of the Finance Documents entered into by it.
|
|
(a) |
listed on, or owned or controlled by a person listed on any Sanctions List;
|
|
(b) |
located in, incorporated under the laws of, or owned or controlled by, or acting on behalf of, a person located in or organised under the laws of a country or
territory that is the target of country-wide Sanctions; or
|
|
(c) |
otherwise a target of Sanctions;
|
|
(a) |
the United States government;
|
|
(b) |
the United Nations;
|
|
(c) |
the United Kingdom government;
|
|
(d) |
the European Union or any of its Member States;
|
|
(e) |
any country to which the Borrower or any other Obligor is bound; or
|
|
(f) |
the respective governmental institutions and agencies of any of the foregoing, including without limitation, the Office of Foreign Assets Control of the US
Department of Treasury (
OFAC
), the United States
|
|
(a) |
the Accounts Pledge in relation to each Account;
|
|
(b) |
the Agency and Trust Deed;
|
|
(c) |
the Guarantee of each Guarantor;
|
|
(d) |
the Mortgage in relation to each Ship;
|
|
(e) |
the General Assignment in relation to each Ship;
|
|
(f) |
any Charter Assignment in relation to each Ship;
|
|
(g) |
the Approved Manager’s Undertaking-Assignment in relation to each Ship;
|
|
(h) |
the Undertaking-Assignment in relation to each Ship; and
|
|
(i) |
any New Ship Owner Security Documents;
|
|
(j) |
(if applicable) any Substitute Ship Owner Security Documents; and
|
|
(k) |
any other document as may be executed to guarantee and/or secure any amounts owning to the Creditor Parties under any Finance Document.
|
|
(a) |
that is of same or younger age, same or higher Market Value, similar type and having the same or better characteristics (including dwt, lwt, shipyard pedigree
and technical specifications) as a Mortgaged Ship to be replaced;
|
|
(b) |
whose Owner and/or (as the case may be) the Seller would provide and undertaking that she has not been traded in breach of Sanctions nor the subject of any
blacklisting by an nation or internal organisation;
|
|
(c) |
that is owned or is to be acquired for cash on arm's length commercial terms, by an entity being a wholly owned indirect subsdiary of the Borrower, ultimately
owned and controlled by the Borrower and incorporated in a jurisdiction acceptable to the Agent;
|
|
(d) |
that on the Drawdown Date of the Advance related thereto, would be in compliance with the representations, covenants and warrantees applicable to any
Mortgaged Ship under this Agreement or any of the other Finance Documents; and
|
|
(e) |
that would replace a Mortgaged Ship in all respects in accordance with Clause 8.11 and the other provisions of this Agreement;
|
|
(i) |
the Final Reduction Date of the last Advance which may be drawn down or reborrowed in accordance with this Agreement; or
|
|
(ii) |
(if earlier) the date on which the Total Commitments are fully cancelled or terminated in accordance with the provisions of this Agreement.
|
|
(a) |
actual, constructive, compromised, agreed or arranged total loss of such Ship;
|
|
(b) |
any expropriation, confiscation, requisition or acquisition of such Ship, whether for full consideration, a consideration less than her proper value, a
nominal consideration or without any consideration, which is effected by any government or official authority or by any person or persons claiming to be or to represent a government or official authority, excluding a requisition for
hire unless she is within 40 days redelivered
|
|
(c) |
any arrest, capture, seizure or detention of such Ship (including any hijacking or theft) unless she is within 40 days redelivered to the full control of the
relevant Guarantor owning that Ship;
|
|
(a) |
in the case of an actual loss of that Ship, the date on which it occurred or, if that is unknown, the date when such Ship was last heard of;
|
|
(b) |
in the case of a constructive, compromised, agreed or arranged total loss of such Ship, the earliest of:
|
|
(i) |
the date on which a notice of abandonment is given to the insurers; and
|
|
(ii) |
the date of any compromise, arrangement or agreement made by or on behalf of the relevant Guarantor owning that Ship, with such Ship's insurers in which the
insurers agree to treat that Ship as a total loss; and
|
|
(c) |
in the case of any other type of total loss, on the date (or the most likely date) on which it appears to the Agent that the event constituting the total loss
occurred;
|
|
(a) |
a Party which is resident for tax purposes in the United States of America; or
|
|
(b) |
an Party some or all of whose payments under the Finance Documents are from sources within the United States for US Federal income tax purposes.
|
|
(a) |
in relation to any Bail-In Legislation described in the EU Bail-In Legislation Schedule from time to time, the powers described as such in relation to that
Bail-In Legislation in the EU Bail-In Legislation Schedule;
|
|
(b) |
in relation to any other applicable Bail-In Legislation:
|
|
(i) |
any powers under that Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial
institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert
all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any
obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers; and
|
|
(ii) |
any similar or analogous powers under that Bail-In Legislation.
|
1.3 |
Construction of certain terms.
In this Agreement:
|
1.4 |
Meaning of “month”.
A period of one or more “months”
ends on the day in the relevant calendar month numerically corresponding to the day of the calendar month on which the period started (“
the
numerically corresponding day
”), but:
|
(a) |
on the Business Day following the numerically corresponding day if the numerically corresponding day is not a Business Day or, if there is no later Business
Day in the same calendar month, on the Business Day preceding the numerically corresponding day; or
|
(b) |
on the last Business Day in the relevant calendar month, if the period started on the last Business Day in a calendar month or if the last calendar month of
the period has no numerically corresponding day;
|
1.5 |
Meaning of “subsidiary”.
A company (S) is a subsidiary
of another company (P) if:
|
(a) |
a majority of the issued shares in S (or a majority of the issued shares in S which carry unlimited rights to capital and income distributions) are directly
owned by P or are indirectly attributable to P; or
|
(b) |
P has direct or indirect control over a majority of the voting rights 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;
|
1.6 |
General Interpretation.
|
(a) |
In this Agreement:
|
|
(i) |
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;
|
|
(ii) |
references to, or to a provision of, any law include any amendment, extension, re-enactment or replacement, whether made before the date of this Agreement or
otherwise; and
|
|
(iii) |
words denoting the singular number shall include the plural and vice versa.
|
(b) |
Clauses 1.1 to 1.4 and paragraph (a) of this Clause 1.5 apply unless the contrary intention appears.
|
(c) |
References in Clause 1.1 to a document being in the form of a particular Appendix include references to that form with any modifications to that form which
the Agent (with the authorisation of the Majority Lenders in the case of substantial modifications) approves or reasonably requires.
|
(d) |
The clause headings shall not affect the interpretation of this Agreement.
|
1.7 |
Event of Default.
A Potential Event of Default and/or
an Event of Default) are “
continuing
” if either of them has not been remedied or waived.
|
1.8 |
Joint and several liability
|
2 |
FACILITY
|
2.1 |
Amount of reducing revolving credit facility.
|
2.2 |
Advances.
|
(a) |
an Existing Ship-Related Advance in relation to each Existing Ship shall not exceed an amount in Dollars equal to 50% of the Market Value of each of the
Existing Ships and the aggregate amount of all Existing Ship-Related Advances shall not exceed the amount of thirty million Dollars ($30,000,000); and
|
(b) |
a New Ship-Related Advance in relation to each New Ship shall not exceed an amount in Dollars equal to 55% of the Market Value of each such New Ship, as
evidenced by her valuation delivered to the Agent under Schedule 4, Part C, paragraph 8.
|
2.3 |
Lenders' participations in Advances.
Subject to the
other provisions of this Agreement, each Lender shall participate in each Advance in the proportion which, as at the relevant Drawdown Date, its Commitment bears to the relevant Total Commitments.
|
2.4 |
Purpose of the Advances.
The Borrower undertakes with
each Creditor Party to use each Advance only for the purpose stated in the preamble to this Agreement, provided that no Creditor Party shall be under any obligation to monitor the Borrower’s compliance with this undertaking and no
breach of this undertaking shall affect the Borrower’s other obligations hereunder.
|
2.5 |
Reduction of Commitments.
On each Reduction Date, the
Total Commitment shall be reduced in accordance with clause 8.2 and the Commitment of each Lender shall be reduced proportionately.
|
2.6 |
Cancellation of Advances.
In the event that by close
of business on the Latest Permissible Drawdown Date related to an Advance, the Borrower has not satisfied all the conditions precedent referred to in Schedule 4, Part B or, as the case may be, in Schedule 4, Part C in respect of that
Advance, any such Advance, subject to the provisions of Clause 9.2, shall be cancelled at close of business in London on the relevant Latest Permissible Drawdown Date and the Total Commitments shall thereupon be reduced by the maximum
amount of such Advance.
|
2.7 |
Timing of Existing Ship-Related Advances.
The nine (9)
Existing Ship-Related Advances for the Existing Ships shall all be drawn down simultaneously.
|
3 |
POSITION OF THE LENDERS
|
3.1 |
Interests of Lenders several.
The rights of the
Lenders under this Agreement (but without prejudice to the provisions of this Agreement relating to or requiring action by the Majority Lenders) are several; accordingly each Lender shall have the right to protect and enforce its rights
arising out of this Agreement and it shall not be necessary for any other Lender and/or any
|
3.2 |
Independent action by a Lender.
None of the Lenders
shall enforce, exercise any rights, remedies or powers or grant any consents or releases under or pursuant to, or otherwise have a direct recourse to the security and/or guarantees constituted by any of the Finance Documents without the
prior written consent of the Majority Lenders but, provided such consent has been obtained, it shall not be necessary for any other Lender to be joined as an additional party in any proceedings for this purpose.
|
3.3 |
Obligations of Lenders several.
The obligations of the
Lenders under this Agreement are several; and a failure of a Lender to perform its obligations under this Agreement to which it is a party shall not result in:
|
(a) |
the obligations of the other Lenders being increased; nor
|
(b) |
any Obligor or any other Lender being discharged (in whole or in part) from its obligations under any Finance Document,
|
3.4 |
Parties bound by certain actions of Majority Lenders.
Every Lender and any other Creditor Party, the Borrower and each other Obligor shall be bound by:
|
(a) |
any determination made, or action taken, by the Majority Lenders under any provision of a Finance Document;
|
(b) |
any instruction or authorisation given by the Majority Lenders to the Agent or the Security Trustee under or in connection with any Finance Document;
|
(c) |
any action taken (or in good faith purportedly taken) by the Agent or the Security Trustee in accordance with such an instruction or authorisation.
|
3.5 |
Reliance on action of Agent.
The Borrower and each
other Obligor shall be entitled to assume that the Majority Lenders have duly given any instruction or authorisation which, under any provision of a Finance Document, is required in relation to any action which the Agent has taken or is
about to take.
|
3.6 |
Construction.
In Clauses 3.4 and 3.5 references to
action taken include (without limitation) the granting of any waiver or consent, an approval of any document and an agreement to any matter.
|
4 |
DRAWDOWN OF ADVANCES
|
4.1 |
Request for Advance.
Subject to the following
conditions, the Borrower may request an Advance to be drawn down by ensuring that the Agent receives the relevant Drawdown Notice not later than 10.00 a.m. (London time) three (3) Business Days prior to the intended Drawdown Date for
that Advance.
|
4.2 |
Drawdown.
The conditions referred to in Clause 4.1 are
that:
|
(a) |
a Drawdown Date has to be a Business Day during the Drawdown Period but (i) the Drawdown Date for an Existing Ship-Related Advance has to be a Business Day
falling on or prior to 28 February 2019 and (ii) the Drawdown Date for a New Ship-Related Advance has to be a Business Day falling on or prior the date falling (18) months from the date of this Agreement, in each case, subject to the
provisions of Clause 4.8 hereof;
|
(b) |
the aggregate amount of the Advances shall not exceed the Total Commitments; and
|
(c) |
the Borrower has complied with the provisions of Clause 9.1 with respect to an Advance.
|
4.3 |
Notification to Lenders of receipt of the Drawdown Notice.
The Agent shall promptly notify the Lenders that it has received the relevant Drawdown Notice in respect of an Advance and shall inform each Lender of:
|
(a) |
the amount of the relevant Advance and relevant Drawdown Date;
|
(b) |
the amount of that Lender's participation in the relevant Advance; and
|
(c) |
the duration of the first Interest Period thereof.
|
4.4 |
Drawdown Notice irrevocable.
The relevant Drawdown
Notice must be signed by a director or other authorised person of the Borrower; and once served, the relevant Drawdown Notice cannot be revoked without the prior consent of the Agent, acting on the authority of the Majority Lenders.
|
4.5 |
Lenders to make available Contributions.
Subject to
the provisions of this Agreement, each Lender shall, on and with value on the relevant Drawdown Date for an Advance, make available to the Agent for the account of the Borrower the amount due from that Lender on the relevant Drawdown
Date under Clause 2.3.
|
4.6 |
Disbursement of Advance.
Subject to the provisions of
this Agreement, the Agent shall on each relevant Drawdown Date advance to the Borrower the amounts which the Agent receives from the Lenders under Clause 4.5; and that payment to the Borrower shall be made:
|
(a) |
to the account which the Borrower specifies in the relevant Drawdown Notice; and
|
(b) |
in the same funds as the Agent received the payments from the Lenders.
|
4.7 |
Disbursement of Advances to third party.
Any payment
by the Agent under Clause 4.6 of an Advance shall constitute the making of such Advance and the Borrower shall thereupon become indebted, as principal and direct obligors, to each Lender in an amount equal to that Lender's Contribution.
|
4.8 |
Extension of the Drawdown Period.
Provided
that no Event of Default has occurred and is continuing,
the Lenders may, at their absolute discretion and subject to the payment by the Borrower of the Renewal Fee in accordance with Clause 20.1 (d) and to the satisfaction of all conditions precedent and
subsequent for the making of an Advance pursuant to this Agreement and the Finance Documents, grant their consent in writing to an annual extension of
|
5 |
INTEREST
|
5.1 |
Payment of normal interest.
Subject to the provisions
of this Agreement, interest on each Advance in respect of each Interest Period shall be paid by the Borrower on the last day of that Interest Period.
|
5.2 |
Normal rate of interest.
Subject to the provisions of
this Agreement, the rate of interest on each Advance in respect of an Interest Period shall be the aggregate of the Margin and LIBOR for that Interest Period.
|
5.3 |
Payment of accrued interest.
In the case of an
Interest Period longer than three (3) months, accrued interest shall be paid every three (3) months during that Interest Period and on the last day of that Interest Period.
|
5.4 |
Notification of Interest Periods and rates of normal interest.
The Agent shall notify the Borrower and each Lender of:
|
(a) |
each rate of interest; and
|
(b) |
the duration of each Interest Period;
|
5.5 |
Market disruption.
The following provisions of this
Clause 5 apply if:
|
(a) |
at least one Business Day before the start of an Interest Period in relation to an Advance, Lenders having Contributions together amounting to more than 40
per cent. of the relevant Advance (or, if the relevant Advance has not been made, Commitments amounting to more than 40 per cent. of the Total Commitments) notify the Agent that LIBOR fixed by the Agent would not accurately reflect the
cost to those Lenders of funding their respective Contributions (or any part of them) during the Interest Period in the London Interbank Dollar Market at or about 11.00 a.m. (London time) on the second Business Day before the
commencement of the Interest Period (provided always that any such notifications by any such Lenders shall be duly substantiated); or
|
(b) |
at least one 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.
|
5.6 |
Notification of market disruption.
The Agent shall
promptly notify the Borrower and each of the Lenders stating the circumstances falling within Clause 5.5 which have caused its notice to be given.
|
5.7 |
Suspension of drawdown.
If the Agent's notice under
Clause 5.6 is served before an Advance is made:
|
(a) |
in a case falling within paragraph (a) of Clause 5.5, the Lenders' obligations to make that Advance;
|
(b) |
in a case falling within paragraph (b) of Clause 5.5, the Affected Lender's obligation to participate in that Advance;
|
5.8 |
Negotiation of alternative rate of interest.
If the
Agent’s notice under Clause 5.6 is served after an Advance is made, the Borrower, the Agent and the Lenders or (as the case may be) the Affected Lender shall use reasonable endeavours to agree, within thirty (30) Business Days after the
date on which the Agent serves its notice under Clause 5.6 (the “
Negotiation Period
”), an alternative interest rate or (as the case
may be) an alternative basis for the Lenders or (as the case may be) the Affected Lender to fund or continue to fund their or its Contribution during the Interest Period concerned.
|
5.9 |
Application of agreed alternative rate of interest.
Any alternative interest rate or an alternative basis which is agreed during the Negotiation Period shall take effect in accordance with the terms agreed.
|
5.10 |
Alternative rate of interest in absence of agreement.
If an alternative interest rate or alternative basis is not agreed within the Negotiation Period, and the relevant circumstances are continuing at the end of the Negotiation Period, then the Agent shall, with the agreement of each
Lender or (as the case may be) the Affected Lender, set an interest period and interest rate representing the cost of funding of the Lenders or (as the case may be) the Affected Lender in Dollars or in any available currency of their or
its Contribution plus the Margin; and the procedure provided for by this Clause 5.10 shall be repeated if the relevant circumstances are continuing at the end of the interest period so set by the Agent.
|
5.11 |
Notice of prepayment.
If the Borrower does not agree
with an interest rate set by the Agent under Clause 5.10, the Borrower may give the Agent not less than fifteen (15) Business Days' notice of its intention to prepay the Advance(s) or, as the case may be, the Affected Lender's
Contribution at the end of the interest period set by the Agent.
|
5.12 |
Prepayment; termination of Commitments.
A notice under
Clause 5.11 shall be irrevocable; the Agent shall promptly notify the Lenders or (as the case may require) the Affected Lender of the Borrower’s notice of intended prepayment; and:
|
(a) |
on the date on which the Agent serves that notice, the Total Commitments or (as the case may require) the relevant Contribution 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 Advances or, as the case may be,
the Affected Lender's Contribution, together with accrued interest thereon at the applicable rate plus the Margin.
|
5.13 |
Application of prepayment.
The provisions of Clause 8
shall apply in relation to the prepayment.
|
6 |
INTEREST PERIODS
|
6.1 |
Commencement of Interest Periods.
The first Interest
Period applicable to an Advance shall commence on the Drawdown Date of the relevant Advance and each subsequent Interest Period applicable to such Advance shall commence on the expiry of the preceding Interest Period thereof.
|
6.2 |
Duration of normal Interest Periods.
Subject to
Clauses 6.3 and 6.4, each Interest Period shall be:
|
(a) |
3 or 6 months as notified by the Borrower to the Agent not later than 11.00 am (London time) three (3) Business Days before the commencement of the Interest
Period; or
|
(b) |
three (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 Majority Lenders' authority, agree with the Borrower.
|
6.3 |
No Interest Period for Advances to extend beyond Termination
Date and Reduction Dates.
No Interest Period for an Advance shall end after a Reduction Date or the Termination Date and any such Interest Period which would otherwise extend beyond a Reduction Date or, as the case may be, the
Termination Date shall instead end on such Reduction Date or, as the case may be, on the Termination Date.
|
6.4 |
Non-availability of matching deposits for Interest Period
selected.
If, after the Borrower has selected and the Lenders have agreed to an Interest Period, any Lender notifies the Agent by 10:00 a.m. (London time) on the second Business Day before the commencement of the Interest
Period that it is not satisfied that deposits in Dollars for a period equal to the Interest Period will be available to it in the London Interbank Market when the Interest Period commences, then that Interest Period shall have such
duration as the Agent after having consulted with the Borrower may determine.
|
7 |
DEFAULT INTEREST
|
7.1 |
Payment of default interest on overdue amounts.
The
Borrower shall pay interest in accordance with the following provisions of this Clause 7 on any amount payable by the Borrower under any Finance Document which the Agent, the Security Trustee or any other Creditor Party or other
designated payee does not receive on or before the relevant due date for payment thereunder, that is:
|
(a) |
the date on which the Finance Documents provide that such amount is due for payment; or
|
(b) |
if a Finance Document provides that such amount is payable on demand, three (3) days following the date on which the demand is served; or
|
(c) |
if such amount has become immediately due and payable under Clause 19.4, the date on which it became immediately due and payable.
|
7.2 |
Default rate of interest and its calculation.
Interest
shall accrue on an overdue amount from (and including) the relevant date until the date of actual payment (as well after as before judgment) at the rate per annum determined by the Agent to be two point fifty per cent (2.50%) per annum
above the Margin plus, in respect of successive periods of any duration (including at call) up to 3 months which the Agent may select from time to time:
|
|
(i) |
LIBOR; or
|
|
(ii) |
if the Agent determines that Dollar deposits for any such period are not being made available to a Lender or (as the case may be) Lenders 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 Agent from such other sources as the Agent may from time to time determine.
|
7.3 |
Notification of interest periods and default rates.
The Agent shall promptly notify the Lenders and the Borrower of each interest rate determined by the Agent under Clause 7.2 and of each period selected by the Agent for the purposes of that Clause; but this shall not be taken to imply
that the Borrower is liable to pay such interest only with effect from the date of the Agent's notification.
|
7.4 |
Payment of accrued default interest.
Subject to the
other provisions of this Agreement, any interest due under this Clause shall be paid on the last day of the period by reference to which it was determined; and the payment shall be made to the Agent for the account of the Creditor Party
to which the overdue amount is due.
|
7.5 |
Compounding of default interest.
Any such interest
which is not paid at the end of the period by reference to which it was determined shall thereupon be compounded.
|
8 |
REPAYMENT, CANCELLATION, REDUCTION AND PREPAYMENT
|
8.1 |
Repayment of Advances.
The Borrower shall repay on
each Reduction Date for an Advance an amount which is equal to the amount of a reduction of such Advance in accordance with clause 8.2 and subject to the provisions of this Agreement, each Advance shall be repaid in full on the relevant
Final Reduction Date and in any case not later than the Termination Date.
|
8.2 |
Reduction Dates for Advances.
Each Advance, to the
extent not previously reduced,
shall be reduced on each of the Reductions Dates related to it as follows:
|
(i) |
the amount of each Existing Ship-Related Advance shall be reduced by twelve (12) equal quarterly reductions, each being in the amount of $100,000 on each of
the twelve Reduction Dates relative to such Existing Ship-Related Advance originally drawn, followed by a final reduction corresponding to the balance of each such Existing Ship-Related Advance through a balloon payment to be also made
on the twelfth (12
th
) Reduction Date (such balloon payment in respect of each Existing Ship-Related Advance, the “
Existing
Ship-Related Advance Balloon Payment”
for such Existing Ship-Related Advance); and
|
(ii) |
the amount of each New Ship-Related Advance shall be reduced by sixteen (16) equal quarterly reductions on each of the sixteen Reduction Dates relative to
such New Ship-Related Advance and the amount of each such reduction for each New Ship-Related Advance shall be 1/16
th
of the amount corresponding to at least 50% of the amount of that New Ship-Related Advance originally
drawn, followed by a final reduction corresponding to the balance of each such New Ship-Related Advance which shall not exceed 50% of each New Ship-Related Advance originally drawn through a balloon payment to be also made on the
sixteenth (16
th
) Reduction Date (such balloon payment in respect of each New Ship-Related Advance, the “
New Ship-Related Advance
Balloon Payment”
for such New Ship-Related Advance and together with the Existing Ship-Related Advance Balloon Payment, an “
Advance
Balloon Payment
”).
|
8.3 |
Additional payments.
For the avoidance of doubt:
|
(a) |
on the Final Reduction Date for an Advance (without prejudice to any other provision of this Agreement), such Advance shall be repaid in full and the Borrower
shall additionally pay to the Agent for the account of the Creditor Parties all other sums then accrued or owing under any Finance Document related to that Advance; and
|
(b) |
on the Termination Date, all the Advances shall be reduced to zero and the Borrower shall additionally pay to the Agent for the account of the Creditor
Parties all other sums then accrued or owing under any Finance Document.
|
8.4 |
Voluntary prepayment and cancellation of Commitments.
Subject to the following conditions, the Borrower may prepay the whole or part of any Advance on the last day of an Interest Period applicable thereto or cancel the whole or any part of the undrawn portion of the Commitments.
|
8.5 |
Conditions for voluntary prepayment and/or cancellation.
The conditions referred to in Clause 8.5 are that:
|
(a) |
a partial prepayment of an Advance shall be in the minimum amount of one hundred thousand Dollars ($100,000) or a multiple thereof;
|
(b) |
in the case of prepayment, the Agent has received from the Borrower at least ten (10) Business Days prior written confirmative and irrevocable notice
specifying the amount to be prepaid and/or as the case may be to be cancelled and the date on which the prepayment and/or as the case may be the cancellation is to be made (such date shall be the last day of an Interest Period); and
|
(c) |
the Borrower has provided evidence satisfactory to the Agent that any consent required by the Borrower or any other Obligor in connection with the prepayment
or cancellation (as the case may be) has been obtained and remains in force, and that any requirement relevant to this Agreement which affects the Borrower or any other Obligor has been complied with.
|
8.6 |
Effect of notice of prepayment or cancellation.
A
prepayment or cancellation notice may not be withdrawn or amended without the consent of the Agent, given with the authority of the Majority Lenders, and the amount specified in the prepayment notice shall become due and payable by the
Borrower on the date for prepayment specified in the prepayment notice.
|
8.7 |
Notification of notice of prepayment or cancellation.
The Agent shall notify the Lenders promptly upon receiving a prepayment or cancellation notice, and shall provide any Lender which so requests with a copy of any document delivered by the Borrower under Clause 8.5(c).
|
8.8 |
Mandatory prepayment.
|
8.8.1 |
Within one hundred and twenty (120) days of any Mortgaged Ship becoming a Total Loss, or upon a Mortgaged Ship being sold, with the prior written consent of
the Lender, provided that no Event of Default has occurred and is continuing, the relevant proceeds will be applied against reduction of any amount remaining outstanding under the Advance related to such Mortgaged Ship lost or sold
(including the relevant Advance Balloon Payment) pro rata and the Borrower shall be obliged to prepay either (i) the amount of the balance corresponding to the Advance related to such Mortgaged Ship lost or sold or (ii) such amount so
that the ratio of the aggregate Market Value of the Mortgaged Ships to the Facility remains the same after such loss or sale of the relevant Mortgaged Ship, whichever is the higher and the balance (if any) shall be at the disposal of
the relevant Owner
|
8.8.2 |
The provisions of Clause 8.8.1 shall not apply in case where an Owner of a Mortgaged Ship exercises its right to substitution as per Clause 8.11 hereunder, in
which case, such Owner will repay or prepay any outstanding balance of the Advance related to such Mortgaged Ship being substituted and request the reborrowing of such amounts prepaid in accordance with Clause 8.12. Any surplus
exceeding the Advance prepaid and not being requested for reborrowing will be at the disposal of the relevant Owner.
|
8.8.3 |
On the service of a notice under Clause 19.25 (
Acceleration
of Facility
), the Borrower shall be obliged to pay in full all the Advances together with accrued interest and all other amounts accrued or owing from the Borrower or any other Obligor under this Agreement and every other
Finance Document and the Total Commitments and all other obligations of each Lender to the Borrower under this Agreement shall terminate.
|
8.9 |
Amounts payable on prepayment or cancellation.
A
prepayment or cancellation shall be made together with accrued interest which is due and unpaid (and any other amount payable under Clause 21
(Indemnities)
or otherwise) in respect of the amount prepaid or cancelled and, if the prepayment is not made on the last day of an Interest Period thereof, together with any sums payable under Clause 21.2
(Breakage Costs)
but without premium or penalty).
|
8.10 |
Application of partial prepayment.
Each partial
prepayment of an Advance shall be applied towards reduction of such Advance (including the relevant Advance Balloon Payment) pro rata.
|
8.11 |
Option to substitution of a Ship.
The Borrower shall
be entitled by written notice to the Lenders and the Agent of its intention to exercise its option to substitute a Mortgaged Ship with a Substitute Ship, given at least one (1) month prior to the scheduled substitution date and in any
event prior to the end of the Drawdown Period [(as same may have been extended in accordance with the provisions of Clause 4.8)], to prepay any outstanding balance of the Advance related to such Mortgaged Ship being substituted and
request the reborrowing of the amounts prepaid in accordance with Clause
|
|
(i) |
a Substitute Ship would follow the reduction schedule for the Advance related to such Ship being substituted, as set out in Clause 8.2 (ii), unless such
Substitute Ship is built before the year 2001 in which case it will follow the reduction schedule set out in Clause 8.2(i); and
|
|
(ii) |
the substitution of a Ship would be subject to the Agent’s sole discretion.
|
8.12 |
Reborrowing
. Any amounts prepaid or repaid (if not
cancelled) may be, at the Agent’s absolute discretion, reborrowed prior to the end of the Drawdown Period (as same may have been extended in accordance with the provisions of Clause 4.8), for the purposes of Clause 1.1 (b) or 1.1. (c)
and/or Clause 8.11 subject to (i) the reborrowing not resulting in the maximum amount of the outstanding Total Commitments exceeding the Maximum Facility Amount referred to in clause 2.1 (or such other lower amount as a result of any
cancellation or reduction of the Total Commitments pursuant to this Agreement and (ii) satisfaction of the conditions precedent set out in Clause 9.1 (a) to (i) and on the further condition that all Existing Ship-Related Advances have
been drawn and/or have ceased to be available for drawing under this Agreement.
|
9 |
CONDITIONS PRECEDENT & SUBSEQUENT
|
9.1 |
Documents, fees and no default.
Each Lender's
obligation to contribute to an Advance of the Facility is subject to the following conditions precedent:
|
(a) |
that, on or before the date of signing of this Agreement, the Agent receives the documents described in Schedule 4, Part A in form and substance satisfactory
to the Agent and its lawyers;
|
(b) |
that, on or before the Drawdown Date of each Existing Ship-Related Advance, the Agent receives the documents described in Schedule 4, Part B in form and
substance satisfactory to the Agent and its lawyers;
|
(c) |
that, on or before the Drawdown Date of any Advance (other than an Existing Ship-Related Advance), the Agent receives the documents described in Schedule 4,
Part C in form and substance satisfactory to the Agent and its lawyers;
|
(d) |
that at the date of each Drawdown Notice of an Advance, at each Drawdown Date of an Advance, on the first day of each Interest Period of an Advance, on the
date of each Compliance Certificate and at the date on which any amounts prepaid are reborrowed pursuant to Clause 8.12 for the purposes of Clause 8.11 or otherwise:
|
|
(i) |
no Event of Default or Potential Event of Default has occurred and is continuing or would result from the borrowing of the Facility;
|
|
(ii) |
the representations and warranties in Clause 10 and those of the Borrower or any other Obligor which are set out in the other Finance Documents would be true
and not misleading in any material respect if
|
|
(iii) |
none of the circumstances contemplated by Clause 5.5 has occurred and is continuing;
|
|
(iv) |
there has not been a Material Adverse Change in the financial positon or state of affairs of any Obligor from that disclosed to the Agent prior to the date of
this Agreement;
|
(e) |
that, if the ratio set out in Clause 15.1 were applied immediately following the making of each Advance, the Borrower would not be obliged to provide
additional security or prepay part of the Facility under that Clause;
|
(f) |
that the Agent has received, and found to be acceptable to it, any further opinions, consents, agreements and documents in connection with the Finance
Documents which the Agent (acting reasonably) may, with the authorisation of the Majority Lenders, request by notice to the Borrower prior to the relevant Drawdown Date;
|
(g) |
that, on or before the service of the relevant Drawdown Notice related to each Advance, the Agent receives the relevant fees payable pursuant to Clause 20.1
(a) and (b) and has received payment of the expenses referred to in Clause 20.2;
|
(h) |
that, should the Borrower exercise its option to substitute as Ship in accordance with Clause 8.11 on or before the date on which any amounts prepaid under an
Advance are redrawn for the purposes of Clause 8.11, the Agent receives the Ship Substitution Fee payable pursuant to Clause 20.1 (c) and has received payment of the expenses referred to in Clause 20.2; and
|
(i) |
that, on or before the date on which the Lenders grant their consent to an extension of the Drawdown Period in accordance with Clause 4.8, the Agent receives
the Renewal Fee payable pursuant to Clause 20.1 (d) and has received payment of the expenses referred to in Clause 20.2.
|
9.2 |
Waiver of conditions precedent.
If the Majority
Lenders, at their discretion, permit an Advance to be made before certain of the conditions referred to in Clause 9.1 are satisfied, the Borrower shall ensure that those conditions are satisfied within five (5) Business Days after the
relevant Drawdown Date (or such longer period as the Agent may, with the authority of the Majority Lenders, specify).
|
9.3 |
Conditions subsequent.
The Borrower undertakes to
deliver or to cause to be delivered to the Agent within thirty (30) days after a Drawdown Date of an Advance the relevant additional documents and other evidence listed in Schedule 4, Part D
(Conditions Subsequent)
.
|
10 |
REPRESENTATIONS AND WARRANTIES
|
10.1 |
General.
The Borrower represents and warrants to each
Creditor Party as follows:
|
10.2 |
Status.
The Borrower and each other Obligor is duly
incorporated and validly existing and in good standing under the laws of its country of incorporation;
|
10.3 |
Share capital and ownership.
The Borrower is
incorporated in the Marshall Islands and the aggregate number of shares of stock that it is authorized to issue as of the date hereof is as disclosed to the Lender prior to the date of this Agreement; the Borrower as of January 31, 2007
trades on the NASDAQ Global Market under the ticker ESEA and its beneficial owners are the holders of the Borrower’s stock which are changing continuously.
|
10.4 |
Corporate power.
The Borrower and each other Obligor
has the corporate capacity and has taken all corporate action and obtained all consents necessary for it:
|
(a) |
to execute the Finance Documents to which it is a party; and
|
(b) |
to borrow under this Agreement and to make all the payments contemplated by, and to comply with, the Finance Documents to which the Borrower and each other
Obligor is a Party.
|
10.5 |
Consents in force.
All the consents referred to in
Clause 10.4 remain in force and nothing has occurred which makes any of them liable to revocation.
|
10.6 |
Legal validity; effective Security Interests.
The
Finance Documents to which the Borrower and/or (as the case may be) any other Obligor is a party, do now or, as the case may be, will, upon execution and delivery (and, where applicable, registration as provided for in the Finance
Documents):
|
(a) |
constitute the Borrower's and/or (as the case may be) such other Obligor’s legal, valid and binding obligations enforceable against the Borrower and/or (as
the case may be) such other Obligor 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, subject to any relevant insolvency laws affecting creditors' rights generally.
|
10.7 |
No third party Security Interests.
Without limiting
the generality of Clause 10.6, at the time of the execution and delivery of each Finance Document:
|
(a) |
the Borrower and/or (as the case may be) any other Obligor will have the right to create all the Security Interests which that Finance Document purports to
create; and
|
(b) |
no third party will have any Security Interest (except for Permitted Security Interests) or any other interest, right or claim over, in or in relation to any
asset to which any such Security Interest, by its terms, relates.
|
10.8 |
No conflicts.
The borrowing by the Borrower of the
Facility, the execution by any Obligor of each Finance Document to which it is a party and the compliance of any Obligor with each Finance Document to which it is a party will not involve or lead to a contravention of:
|
(a) |
any law or regulation in any Relevant Jurisdiction; or
|
(b) |
the constitutional documents of the Borrower and the other Obligors; or
|
(c) |
any contractual or other obligation or restriction which is binding on the Borrower and the other Obligors or any of their assets, and will not have a
Material Adverse Effect.
|
10.9 |
No withholding taxes.
All payments which the Borrower
and/or any other Obligor is liable to make under the Finance Documents to which the Borrower and/or any such other Obligor is a party may be made without deduction or withholding for or on account of any tax payable under any law of any
Relevant Jurisdiction.
|
10.10 |
No default.
No Event of Default or Potential Event of
Default has occurred and is continuing.
|
10.11 |
Information.
All information which has been provided
in writing by or on behalf of any Obligor to any Creditor Party in connection with any Finance Document satisfied the requirements of Clause 11.6; all audited and consolidated accounts which have been so provided satisfied the
requirements of Clause 11.7; and there has been no Material Adverse Change in the financial position or state of affairs of that Obligor from that disclosed in the latest of those accounts which constitutes a Material Adverse Effect.
|
10.12 |
No litigation.
No legal or administrative action
involving an Obligor (including action relating to any alleged or actual breach of the ISM Code or the ISPS Code) has been commenced or taken or, to the Borrower’s knowledge, is likely to be commenced or taken which, in either case and
if determined adversely, would be likely to have a Material Adverse Effect.
|
10.13 |
Compliance with certain undertakings.
At the date of
this Agreement, each of the Obligors is in compliance with Clauses 11.2
(Title; negative pledge; pari passu)
, 11.5
(Information provided to be accurate)
, 11.8
(Consents),
11.9
(Maintenance of Security Interests)
, 11.11
(Principal place of business)
and 11.17
(Sanctions)
.
|
10.14 |
Taxes paid.
The Borrower and the other Obligors have
paid all taxes applicable to, or imposed on or in relation to them and their business.
|
10.15 |
ISM Code and ISPS Code compliance.
All requirements of
the ISM Code and the ISPS Code as they relate to an Obligor and the Ships have been complied with.
|
10.16 |
No Money Laundering.
Without prejudice to the
generality of Clause 2.3, in relation to the borrowing by the Borrower of the Facility, the performance and discharge of the obligations and liabilities of the Borrower and any other Obligor under the Finance Documents and the
transactions and other arrangements effected or contemplated by the Finance Documents to which the Borrower and any other Obligor is a party, the Borrower confirms that (i) it is acting for its own account, (ii) that it will use the
proceeds of the Facility 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 contravention of any law, official
requirements or other regulatory measure or procedure implemented to combat “money laundering” (as defined in
|
10.17 |
Patriot Act.
To the extent applicable to an Obligor,
such Obligor is in compliance with (i) the Trading with the Enemy Act, and each of the foreign assets control regulations of the United States Treasury Department (31 C.F.R., Subtitle B, Chapter V) and any other enabling legislation or
executive order relating thereto and (ii) the PATRIOT Act. No part of the proceeds of the Facility will be used, directly or indirectly, for any payments to any government official or employee, political party, official of a political
party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of
1977, as amended.
|
11 |
GENERAL UNDERTAKINGS
|
11.1 |
General.
The Borrower undertakes with each Creditor
Party to comply (to the extent applicable to it) and to procure that each Guarantor and any other Obligor shall comply (where applicable) with the following provisions of this Clause 11 at all times during the Facility Period except as
the Agent may, with the authority of the Majority Lenders, otherwise permit.
|
11.2 |
Title; negative pledge; pari passu.
The Borrower will:
|
(a) |
ensure that the Ships will maintain their present ownership, management, control and ultimate beneficial ownership and that the Guarantors will hold the legal
title to, and own the entire beneficial interest in the Ships’ 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 except for
Permitted Security Interests. For the avoidance of doubt the Lenders consent and agree to any changes relating to the shareholders of the Borrower’s trading shares in the normal course of business and confirm that such changes do not
violate the terms of this Agreement;
|
(b) |
ensure that none of the Obligors creates or permits to arise any Security Interest (except for Permitted Security Interests) over any of its asset, present or
future; and
|
(c) |
procure that each Obligor’s liabilities under the Finance Documents to which that Obligor is a party will rank at least pari passu with all its other present
and future unsecured liabilities, except for liabilities which are mandatorily preferred by law.
|
11.3 |
No disposal of assets.
The Borrower will procure that
none of the Guarantors will (without the prior written consent of the Agent, acting with the authority of the Majority Lenders) transfer, lease or otherwise dispose of:
|
(a) |
all or a substantial part of its assets, whether by one transaction or a number of transactions, whether related or not except in the usual course of its
trading operations; or
|
(b) |
any debt payable to it any other right (present, future or contingent right) to receive a payment, including any right to damages or compensation.
|
11.4 |
No other liabilities or obligations to be incurred.
The Borrower will procure that none of the Guarantors will incur any liability or obligation except (i) liabilities and obligations under the Finance Documents to which each of them is a party and (ii) liabilities or obligations
incurred in the ordinary course of its business of operating and chartering the Ships.
|
11.5 |
Information provided to be accurate.
All financial and
other information which is provided in writing by or on behalf of an Obligor under or in connection with any Finance Document will be true and not misleading in any material respect and will not omit any material fact or consideration.
|
11.6 |
Provision of financial statements.
The Borrower will:
|
(a) |
furnish the Agent, with its annual, audited and consolidated financial statements within 180 days after the end of the financial year concerned, and prepared
in accordance with GAAP consistently applied, such obligation commencing from 31
st
December 2018;
|
(b) |
send to the Agent, together with the Accounting Information referred to in paragraph (a) above, the Compliance Certificate in accordance with Clause 12.8; and
|
(c) |
provide the Agent from time to time as the Agent may reasonably request and in form and substance satisfactory to the Agent with any information on the
financial condition, commitments, business and operations of each Obligor.
|
11.7 |
Form of financial statements.
All financial statements
delivered under Clause 11.6 will:
|
(a) |
give a true and fair view of the state of affairs of the Borrower, or as the case may be, of the Guarantors at the date of those accounts and of the profit
for the period to which those accounts relate; and
|
(b) |
fully disclose or provide for all significant liabilities of the Borrower, or as the case may be, of the Guarantors for the period to which those accounts
relate,
|
11.8 |
Consents.
The Borrower will maintain in force and
promptly obtain or renew, and will promptly send certified copies to the Agent of, all consents required:
|
(a) |
for any Obligor to perform its respective obligations under each of the Finance Documents to which each such Obligor is a party;
|
(b) |
for the validity or enforceability of any Finance Document to which an Obligor is a party,
|
11.9 |
Maintenance of Security Interests.
The Borrower will:
|
(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 in all Relevant Jurisdictions, pay any stamp, registration or similar tax in all Relevant Jurisdictions in respect of any Finance Document, give any notice or take any other step which, in the reasonable opinion of the
Majority Lenders, is or has become necessary or desirable for any Finance Document to be valid, enforceable or admissible in evidence or to ensure or protect the priority of any Security Interest which it creates.
|
11.10 |
Notification of litigation.
The Borrower will provide
the Agent with details of any legal or administrative action involving an Obligor or a Ship, her Earnings or her Insurances as soon as such action is instituted or it becomes apparent to the Borrower that it is likely to be instituted,
unless it is clear that the legal or administrative action cannot be considered as having a Material Adverse Effect on the business, assets or financial condition of them or as affecting the validity or enforceability of any Finance
Document.
|
11.11 |
Principal place of business.
The Borrower will not
establish, or do anything as a result of which it would be deemed to have, a place of business in the United Kingdom.
|
11.12 |
Confirmation of no default.
The Borrower will, not
more than once per quarter and within 2 Business Days after service by the Agent of a written request, serve on the Agent a notice which is signed by one director of the Borrower and which:
|
(a) |
states that no Event of Default or Potential Event of Default has occurred; or
|
(b) |
states that no Event of Default or Potential Event of Default has occurred, except for a specified event or matter, of which all material details are given.
|
11.13 |
Notification of default.
The Borrower will notify the
Agent as soon as it becomes aware of:
|
(a) |
the occurrence of an Event of Default or a Potential Event of Default which is continuing; or
|
(b) |
any matter which indicates that an Event of Default or a Potential Event of Default may have occurred,
|
11.14 |
Provision of further information.
The Borrower shall
(and shall procure that each Guarantor will) inform the Agent of all major financial developments in the Borrower and the Guarantors such as new loans, refinancing/restructuring of existing loans, new acquisitions and sales, contracts
for term employment of the Ships and furthermore will, as soon as practicable after receiving the request, provide the Agent with any additional financial or other information relating to:
|
(a) |
the Guarantors, the Ships, their Insurances or their Earnings; or
|
(b) |
any other matter relevant to, or to any provision of, a Finance Document,
|
11.15 |
Provision of customer information.
The Borrower will
produce such documents and evidence as the Lenders shall from time to time require, based on applicable laws and regulations from time to time and the Lenders’ own internal guidelines from time to time, relating to the Lenders’
knowledge of its customers.
|
11.16 |
Ownership.
The Borrower shall ensure that, throughout
the Facility Period without the prior written consent of the Agent, which shall not be unreasonably withheld, there shall be no change in the Directors and Officers in the Guarantors and in the Chief Executive Officer(s) of the Borrower
and moreover the Borrower shall ensure that no change shall be made directly or indirectly in the ownership of the Guarantors, the beneficial ownership of the Borrower or the control of the Guarantors without the prior written consent
of the Agent, which shall not be unreasonably withheld. For the avoidance of doubt the Lenders consent and agree to any changes relating to the Borrower’s trading shares in the normal course of business and confirm that such changes do
not violate the terms of this Agreement.
|
11.17 |
Sanctions
|
(a) |
The Borrower undertakes to comply (and shall procure that each other Obligor shall comply) in all respects with all Sanctions.
|
(b) |
The Borrower undertakes not to use (and shall procure that no other Obligor shall use) any revenue or benefit derived from any activity or dealing with a
Restricted Person in discharging any obligation due or owing to the Creditor Parties.
|
(c) |
The Borrower undertakes to ensure (and shall procure that each other Obligor shall ensure) that no proceeds from any activity or dealing with a Restricted
Person are credited to any bank account held with any Creditor Party in its name.
|
(d) |
The Borrower undertakes (and shall procure that each other Obligor shall), to the extent permitted by law, promptly upon becoming aware of them supply to the
Agent details of any claim, action, suit, proceedings or investigation against it with respect to Sanctions by any Sanctions Authority.
|
11.18 |
Use of proceeds.
The Borrower shall not (and shall
procure that no other Obligor and no Affiliate of any of them shall) permit or authorise any other person to, directly or indirectly, use, lend, make payments of, contribute or otherwise make available, all or any part of the proceeds
of the Facility or other transactions contemplated by this Agreement to fund or facilitate trade, business or other activities: (i) involving or for the benefit of any Restricted Person; or (ii) in any other manner that could result in
the Borrower or any other Obligor or any Creditor Party being in breach of any Sanctions or becoming a Restricted Person.
|
11.19 |
Compliance with laws.
The Borrower shall (and shall
procure that each other Obligor shall) comply in all respects with all laws and regulations to which it may be subject including without limitation (i) the Trading with the Enemy Act and each of the foreign assets control regulations of
the United States Treasury Department (31 CFR, Subtitle B, Chapter V) and any other enabling legislation or executive order thereto) and (ii) the PATRIOT Act.
|
11.20 |
Anti-Corruption.
|
(a) |
The Borrower shall not (and shall procure that no other Obligor will) directly or indirectly use the proceeds of the Facility for any purpose which would
breach or might breach applicable anti-corruption laws, including but not limited to the UK Bribery Act of 2010 and the United States Foreign Corrupt Practices Act of 1977, each as amended.
|
(b) |
The Borrower shall (and shall procure that each other Obligor will):
|
|
(i) |
conduct its business in compliance with applicable anti-corruption laws and regulations; and
|
|
(ii) |
maintain effective policies and procedures designed to promote and achieve compliance with such laws and regulations.
|
11.21 |
Provision of copies and translation of documents.
The
Borrower will supply the Agent with a sufficient number of copies of the documents referred to above to provide one (1) copy for each Creditor Party.
|
12 |
CORPORATE UNDERTAKINGS
|
12.1 |
General.
The Borrower undertakes with each Creditor
Party to comply (to the extent applicable to it) and to procure (where applicable), that any other Obligor shall comply with the following provisions of this Clause 12 at all times during the Facility Period except as the Agent may,
with the authority of the Majority Lenders, otherwise permit.
|
12.2 |
Maintenance of status.
The Borrower shall (and shall
procure that any other Obligor will) maintain its separate corporate existence and remain in good standing under the laws of its incorporation.
|
12.3 |
Negative undertakings.
The Borrower:
|
(a) |
shall not allow any Guarantor to carry on any type of business other than the direct or indirect ownership, chartering and operation of a Ship in accordance
with its constitutional documents;
|
(b) |
shall not allow any Guarantor to make any form of distribution (other than payment of a dividend pursuant to Clause 12.4) or effect any form of redemption,
purchase, reduction or return of share capital or issue, allot or grant any person a right to any shares in its capital; or
|
(c) |
shall not permit any Guarantor to incur any debt or provide any form of credit or issue any guarantee to any person, except in the ordinary course of its
business without the prior written consent of the Agent (acting on the instructions of the Majority Lenders), which consent and instructions will not be unreasonably be withheld,; or
|
(d) |
shall not allow any Guarantor to open or maintain any Account with any bank or financial institution except the Accounts with the Account Bank, for the
purposes of the Finance Documents and Accounts notified to the Agent prior to the date of this Agreement without the prior written consent of the Agent (acting on the instructions of the Majority Lenders); or
|
(e) |
shall not allow any 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; or
|
(f) |
shall not enter into any form of amalgamation, merger or de-merger or any form of reconstruction or reorganisation, or change its name without the prior
written consent of the Agent (acting on the instructions of the Majority Lenders), which consent and instructions will not be unreasonably be withheld; or
|
(g) |
shall not allow any Guarantor to purchase any further assets (other than a Ship), either directly or indirectly (through subsidiaries);
|
(h) |
shall not, without the prior written consent of the Agent (acting on the instructions of the Majority Lenders), which consent and instructions will not be
unreasonably be withheld, incur any other Financial Indebtedness unless such other Financial Indebtedness ranks at least pari passu with the Financial Indebtedness under the Facility Agreement and the Finance Documents, ;
|
(i) |
shall not allow any Guarantor to enter into any shareholder loans, inter company loans, affiliate loans and third party loans which shall not be fully
subordinated to the rights of the Creditor Parties under the Facility Agreement and the Finance Documents, on terms satisfactory to the Agent in its sole discretion; or
|
(j) |
shall not permit the Secured Liabilities to be subordinated in priority of payment to any other present or future Financial Indebtedness of the Group.
|
12.4 |
Dividends.
The Borrower shall procure that no
Guarantor shall declare or pay any dividends or other distribution following the occurrence of an Event of Default which is continuing without the prior written consent of the Agent.
|
12.5 |
Cash Collateral Deposit.
The Borrower will maintain
from the Drawdown Date of the first Advance and at all times thereafter during the Facility Period in the Cash Collateral Deposit Account the Cash Collateral Deposit which is, and will not be subject to any Security Interest (other than
pursuant to the relevant Account Pledge) as cash collateral.
|
12.6 |
Debt to equity ratio.
The Borrower will
ensure that its total debt net of cash will not exceed 75% of the total market value of its assets.
|
12.7 |
Minimum Net Worth.
The Borrower will ensure
that
its minimum Net Worth
listed in Nasdaq will be fifteen million Dollars (USD15,000,000).
|
12.8 |
Compliance Check.
On each Compliance Date, compliance
with the undertakings contained in Clause 12.5 and 15.1 shall be determined by reference to the Accounting Information for the twelve month period in each Financial Year of the Borrower (commencing with the twelve month period ending on
31 December 2019) delivered to the Agent pursuant to the Agreement. At the same time as it delivers that Accounting Information, the Borrower shall deliver to the Agent a Compliance Certificate signed by a director of the Borrower. If,
prior to the delivery of a Compliance Certificate,
|
12.9 |
Application of FATCA
|
13 |
INSURANCE
|
13.1 |
General.
The Borrower undertakes with each Creditor
Party to comply (and to procure in all cases that each Guarantor and any other Obligor or other entity if named as co-assured in the insurance policies to comply) with the following provisions of this Clause 13 at all times during the
Facility Period, except as the Agent may (with the authority of the Majority Lenders), otherwise permit.
|
13.2 |
Maintenance of obligatory insurances.
The Borrower
shall (and shall procure in all cases that each other Obligor or other entity if named as co-assured in the insurance policies will) keep each Ship insured at its or at the relevant Obligor’s expense against:
|
(a) |
fire and usual marine risks (including hull and machinery and excess risks);
|
(b) |
war risks (including war protection and indemnity liabilities, terrorism, piracy and confiscation); and
|
(c) |
protection and indemnity risks (including cover for oil pollution liability risks); and
|
(d) |
any other risks against which the Majority Lenders consider, having regard to practices and other circumstances prevailing at the relevant time, it would in
the opinion of the Majority Lenders be reasonable for the Borrower and/or the relevant Obligor to insure and which are specified by the Security Trustee by notice to the Borrower.
|
13.3 |
Terms of obligatory insurances.
The Borrower shall
(and shall procure in all cases that each Obligor or other entity if named as co-assured in the insurance policies will) effect such insurances:
|
(a) |
in Dollars;
|
(b) |
in the case of fire and usual marine risks and war risks, in an amount on an agreed value basis at least the greater of (i) the Market Value of a Ship and
(ii) an amount which, when aggregated with the insured value of the other Mortgaged Ships, is equal to or greater that 125% of the amount of the Facility;
|
(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 the international marine insurance market (currently $1,000,000,000);
|
(d) |
in relation to protection and indemnity risks in respect of the full value and tonnage of a Ship;
|
(e) |
on approved terms; and
|
(f) |
through approved brokers and with approved insurance companies and/or underwriters and/or war risks associations, and protection and indemnity risks shall be
placed with a member of the International Group of P&I Clubs.
|
13.4 |
Further protections for the Creditor Parties.
In
addition to the terms set out in Clause 13.3, the Borrower will:
|
(a) |
procure that the obligatory insurances shall be in the name of the respective Guarantor and/or any other entity named as co-assured in the insurance policies
of a Ship or whenever the Security Trustee so requires, name (or be amended to name) the Security Trustee as additional named assured for its rights and interests, warranted no operational interest and with full waiver of rights of
subrogation against the Security Trustee, but without the Security Trustee thereby being liable to pay (but having the right to pay) premiums, calls or other assessments in respect of such insurance;
|
(b) |
procure that the insurers shall note the Security Trustee’s interest and endorse the relevant notices of assignment and Loss Payable Clause on the relevant
certificates of entry or policies and shall furnish the Security Trustee with a copy of such certificates of entry or policies;
|
(c) |
use its best endeavors to 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 following an Event of Default which is continuing the Security Trustee may make proof of loss if the Borrower and/or (as the case may be) any
other Obligor fails to do so.
|
13.5 |
Renewal of obligatory insurances.
The Borrower shall
(and shall procure in all cases that each other Obligor or other entity if named as co-assured in the insurance policies will):
|
(a) |
at least 21 days before the expiry of any obligatory insurance:
|
|
(i) |
notify the Security Trustee of the brokers (or other insurers) and any protection and indemnity or war risks association through or with whom the Borrower
and/or (as the case may be) any other Obligor proposes to renew that insurance and of the proposed terms of renewal; and
|
|
(ii) |
in case of any material change in insurance cover, obtain the Majority Lenders' approval to the matters referred to in paragraph (i) above;
|
(b) |
at least 14 days before the expiry of any obligatory insurance, renew the insurance; 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 before the
|
13.6 |
Copies of policies; letters of undertaking.
The
Borrower shall (and shall procure in all cases that each other Obligor or other entity if named as co-assured in the insurance policies will) ensure that all approved brokers provide the Security Trustee with copies of all policies
relating to the obligatory insurances which they effect or renew and of a letter or letters or undertaking in a form required by the Security Trustee and including undertakings by the approved brokers that:
|
(a) |
they will have endorsed on each policy, immediately upon issue, a loss payable clause and a notice of assignment complying with the provisions of Clause 13.4;
|
(b) |
they will hold such policies, and the benefit of such insurances, to the order of the Security Trustee in accordance with the said loss payable clause;
|
(c) |
they will advise the Security Trustee immediately of any material change to the terms of the obligatory insurances;
|
(d) |
they will notify the Security Trustee, not less than 7 days before the expiry of the obligatory insurances, in the event of their not having received notice
of renewal instructions from the Borrower and/or (as the case may be) the relevant Guarantor or any other Obligor or their 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) |
if the insurances form part of a fleet cover, they will not set off any claims on a Ship against premiums due for other vessels under the fleet cover or
against premiums due for other insurances; neither will they cancel the insurance cover of a Ship for reason of non-payment of such premiums; and they will arrange for a separate policy to be issued in respect of such Ship forthwith
upon being so requested by the Security Trustee.
|
13.7 |
Copies of certificates of entry.
The Borrower shall
(and shall procure in all cases that each other Obligor or other entity if named as co-assured in the insurance policies will) ensure that, from any protection and indemnity and/or war risks associations in which a Ship is entered, the
Security Trustee is provided with:
|
(a) |
a certified copy of the certificate of entry for that Ship;
|
(b) |
a letter or letters of undertaking in such form as may be required by the Security Trustee; and
|
(c) |
a certified copy of each certificate of financial responsibility for pollution by oil or other Environmentally Sensitive Material issued by the relevant
certifying authority in relation to that Ship.
|
13.8 |
Deposit of original policies.
The Borrower shall (and
shall procure in all cases that each other Obligor or other entity if named as co-assured in the insurance policies will) ensure that all policies relating to obligatory insurances are deposited with the approved brokers through which
the insurances are effected or renewed.
|
13.9 |
Payment of premiums.
the Borrower shall (and shall
procure in all cases that each other Obligor if named as co-assured in the insurance policies will) punctually pay all premiums or other sums payable in respect of the obligatory insurances and produce all relevant receipts when so
required by the Security Trustee.
|
13.10 |
Guarantees.
The Borrower shall (and shall procure that
each other Obligor or other entity if named as co-assured in the insurance policies will) ensure that any guarantees required by a protection and indemnity or war risks association are promptly issued and remain in full force and
effect.
|
13.11 |
Restrictions on employment.
The Borrower shall not
(and shall procure in all cases that no other Obligor or other entity in all cases if named as co-assured in the insurance policies will) employ any Ship, nor permit same to be employed, outside the cover provided by any obligatory
insurances.
|
13.12 |
Compliance with terms of insurances.
The Borrower
shall not (and shall procure in all cases that no other Obligor or other entity if named as co-assured in the insurance policies will) do or omit to do (or permit to be done or not to be done) any act or thing which would or might
render any obligatory insurance invalid, void, voidable or unenforceable or render any sum payable thereunder repayable in whole or in part; and, in particular:
|
(a) |
the Borrower shall (and shall procure in all cases that each other Obligor or other entity if named as co-assured in the insurance policies will) take all
necessary action and comply with all requirements which may from time to time be applicable to the obligatory insurances, and (without limiting the obligation contained in Clause 13.7(c) above) 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 not (and shall procure in all cases that no other Obligor or other entity if named as co-assured in the insurance policies will) make any
changes relating to the classification or classification society or manager or operator of a Ship approved by the underwriters of the obligatory insurances; and
|
(c) |
the Borrower shall not (and shall procure in all cases that no other Obligor or other entity if named as co-assured in the insurance policies will) employ
any Ship, nor allow it to be employed, otherwise than in conformity with the terms and conditions of the obligatory insurances, without first obtaining the consent of the insurers and complying with any requirements (as to extra premium
or otherwise) which the insurers specify.
|
13.13 |
Alteration to terms of insurances.
The Borrower shall
not (and shall procure in all cases that no other Obligor or other entity if named as co-assured in the insurance policies will) make or agree to any material alteration to the terms of any obligatory insurance or waive any right
relating to any obligatory insurance without the prior written consent of the Security Trustee (not to be unreasonably withheld).
|
13.14 |
Settlement of claims.
The Borrower shall not (and
shall procure in all cases that no other Obligor or other entity if named as co-assured in the insurance policies will) settle, compromise or abandon any claim under any obligatory insurance for Total Loss or for a Major Casualty
without the prior written
|
13.15 |
Provision of copies of communications.
The Borrower
shall (and shall procure in all cases that any other Obligor or other entity if named as co-assured in the insurance policies will), if required by the Security Trustee, provide the Security Trustee, at the time of each such
communication, copies of all material written communications between the Borrower and/or (as the case may be) any other Obligor and:
|
(a) |
the approved brokers; and
|
(b) |
the approved protection and indemnity and/or war risks associations; and
|
(c) |
the approved insurance companies and/or underwriters, which relate directly or indirectly to:
|
|
(i) |
the Borrower's and/or (as the case may be) any other Obligor’s obligations relating to the obligatory insurances including, without limitation, all requisite
declarations and payments of additional premiums or calls; and
|
|
(ii) |
any credit arrangements made between the Borrower and/or (as the case may be) any other Obligor and any of the persons referred to in paragraphs (a) or (b)
above relating wholly or partly to the effecting or maintenance of the obligatory insurances.
|
13.16 |
Provision of information.
In addition, the Borrower
shall (and shall procure in all cases that any other Obligor or other entity if named as co-assured in the insurance policies will) promptly provide the Security Trustee (or any persons which it may designate) with any information
which the Security Trustee (or any such designated person) reasonably requests for the purpose of:
|
(a) |
obtaining or preparing any report from an independent marine insurance broker as to the adequacy of the obligatory insurances effected or proposed to be
effected; and/or
|
(b) |
effecting, maintaining or renewing any such insurances as are referred to in Clause 13.17 below or dealing with or considering any matters relating to any
such insurances,
|
13.17 |
Mortgagee’s interest, additional perils.
The Agent
shall be entitled from time to time to effect, maintain and renew a mortgagee’s interest additional perils pollution insurance and a mortgagee’s interest insurance in an amount equal to 110% of the Facility and otherwise on such terms,
through such insurers and generally in such manner as the Lenders may from time to time consider appropriate and the Borrower and/or any other Obligor or other entity in all cases if named as co-assured in the insurance policies shall
upon demand against appropriate vouchers/invoices fully indemnify the Lenders in respect of all premiums and other expenses which are incurred in connection with or with a view to effecting, maintaining or renewing any such insurance or
dealing with, or considering, any matter arising out of any such insurance.
|
13.18 |
Review of insurance requirements.
The Majority Lenders
shall be entitled to review the requirements of this Clause 13 from time to time in order to take account of any changes in circumstances after the date of this Agreement which are, in the reasonable opinion of the Majority Lenders,
significant and capable of affecting the Borrower and/or any other Obligor or other entity in all cases if named as co-assured in the insurance policies or any Ship and her insurance (including, without limitation, changes in the
availability or the cost of insurance coverage or the risks to which the Borrower and/or (as the case may be) any other Obligor or other entity in all cases if named as co-assured in the insurance policies may be subject), and, prior
to the occurrence of an Event of Default which is continuing, may appoint insurance consultants in relation to this review at the cost of the Borrower and/or any other Obligor or other entity in all cases if named as co-assured in the
insurance policies, subject to such appointment taking place once per year.
|
13.19 |
Modification of insurance requirements.
The Security
Trustee shall notify the Borrower of any proposed modification under Clause 13.18 to the requirements of this Clause 13 which the Majority Lenders (acting reasonably) consider appropriate in the circumstances.
|
13.20 |
Compliance with instructions.
The Security Trustee
shall be entitled but will not be bound to (without prejudice to or limitation of any other rights which it may have or acquire under any Finance Document) to effect the insurances of a Ship in the amount and in terms acceptable to the
Security Trustee from time to time at the cost and on behalf of the Borrower and/or any other Obligor or other entity in all cases if named as co-assured in the insurance policies.
|
14 |
SHIP COVENANTS
|
14.1 |
General.
The Borrower also undertakes in connection
with each Ship with each Creditor Party to comply to the extent applicable to it (and shall procure that each Owner and the Approved Manager (to the extent applicable to the latter) shall comply) with the following provisions of this
Clause 14 at all times during the Facility Period, except as the Agent (with the authority of the Majority Lenders) may otherwise permit.
|
14.2 |
Ship's name and registration.
The Borrower shall
procure that each Owner will keep its Ship registered in its name under the Approved Flag; shall not do or allow to be done anything as a result of which such registration might be cancelled or imperilled; and shall not change the name
or port of registry or flag of that Ship without the prior written consent of the Agent (acting on the
|
14.3 |
Repair and classification.
The Borrower shall procure
that each Owner will keep its Ship in a good and safe condition and state of repair:
|
(a) |
consistent with first‑class ship ownership and management practice;
|
(b) |
so as to maintain such Ship with the highest classification available for vessels of the same age, type and specification as that Ship with Lloyd’s Register
of Shipping (or such other first class classification society being a member of IACS and as may be approved by the Security Trustee), free of overdue recommendations and conditions affecting that Ship’s class; and
|
(c) |
so as to comply with all laws and regulations applicable to vessels registered at ports in the Approved Flag State or to vessels trading to any jurisdiction
to which that Ship may trade from time to time, including but not limited to the ISM Code and the ISPS Code.
|
14.4 |
Modification.
The Borrower shall procure that each
Owner will not make any modification or repairs to, or replacement of, its Ship or equipment installed on her which would or might materially alter the structure, type or performance characteristics of such Ship or materially reduce her
value.
|
14.5 |
Removal of parts.
The Borrower shall procure that none
of the Owners will remove any material part of a Ship, or any item of equipment installed on, such Ship unless the part or item so removed is forthwith replaced by a suitable part or item which is in the same condition as or better
condition than the part or item removed, is free from any Security Interest or any right in favour of any person other than the Lenders and becomes on installation on that Ship the property of the relevant Owner and subject to the
security constituted by the relevant Mortgage
Provided that
the relevant Owner owning such Ship may install leased equipment owned
by a third party if the equipment can be removed without any risk of damage to its Ship.
|
14.6 |
Surveys.
The Borrower shall procure that any relevant
Owner will submit itsShip regularly to all periodical or other surveys which may be required for classification purposes, at the cost and expense of the Borrower and/or the relevant Owner. The Agent shall have the right to request one
or more technical survey reports of a Ship by surveyors appointed to by the Agent at the cost of the Borrower and/or the relevant Owner, provided that the frequency of such reports shall be limited to one per year (unless an Event of
Default shall have occurred and is continuing).
|
14.7 |
Inspection.
The Borrower shall procure that each
Owner will permit the Security Trustee (by surveyors or other persons appointed by it for that purpose) to board its Ship at all reasonable times, but without interference to that Ship’s trading and operations, to inspect her condition
or to satisfy themselves about proposed or executed repairs and shall afford all proper facilities for such inspections. Provided that such Ship is found to be in satisfactory condition, the cost of such inspections shall be borne by
the Borrower and/or the relevant Owner not more than once per year.
|
14.8 |
Prevention of and release from arrest.
Unless
contested in good faith by appropriate proceedings, the Borrower shall (and shall procure that any relevant Owner will promptly discharge:
|
(a) |
all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against its Ship, her Earnings or her Insurances; and
|
(b) |
all taxes, dues and other amounts charged in respect of its Ship, her Earnings or her Insurances;
|
14.9 |
Compliance with laws etc.
The Borrower shall (and
shall procure that any other Obligor will):
|
(a) |
comply, or procure compliance with the ISM Code, the ISPS Code, all Environmental Laws and all other laws or regulations relating to a Ship, its ownership,
operation and management or to its business (including, without limitation, the obtaining of all relevant certificates of financial responsibility and any other matters required for entering United States territorial waters or calling
at any United States Port);
|
(b) |
comply (and procure that each Obligor and each Affiliate of any of them shall comply) in all aspects with all Sanctions;
|
(c) |
not employ a Ship nor allow her employment in any manner contrary to any Sanctions;
|
(d) |
in the event of hostilities in any part of the world (whether war is declared or not), not cause or permit a Ship to enter or trade to any zone which is
declared a war zone by any government or by that Ship's war risks insurers unless the prior written consent of the Majority Lenders has been given and the Borrower or the relevant Owner has (at its expense) effected any special,
additional or modified insurance cover which the Majority Lenders may require.
|
14.10 |
Provision of information.
The Borrower shall (and
shall procure that any other Obligor will) promptly provide the Security Trustee with any information which the Majority Lenders reasonably request regarding:
|
(a) |
a Ship, her employment, position and engagements;
|
(b) |
the Earnings and payments and amounts due to the master and crew of a Ship;
|
(c) |
any expenses incurred, or likely to be incurred, in connection with the operation, maintenance or repair of a Ship and any payments made in respect of a Ship;
|
(d) |
any towages and salvages;
|
(e) |
the relevant Owner’s compliance, the Approved Manager’s compliance or the compliance of any Ship with the ISM Code
|
14.11 |
Notification of certain events.
The Borrower shall
(and shall procure that the relevant Owner and the Approved Manager, to the extent applicable to the latter will) immediately notify the Security Trustee by letter of:
|
(a) |
any casualty which is or is likely to be or to become a Major Casualty;
|
(b) |
any occurrence as a result of which a Ship has become or is, by the passing of time or otherwise, likely to become a Total Loss;
|
(c) |
any requirement or recommendation made by any insurer or classification society (or any withdrawal of class) or by any competent authority which is not
complied with in accordance with its terms;
|
(d) |
any arrest or detention of a Ship which is not lifted within forth eight (48) hours, any exercise or purported exercise of any lien on a Ship or her Earnings
or any requisition of that Ship for hire;
|
(e) |
any intended dry docking of a Ship;
|
(f) |
any Environmental Claim made against an Owner or the Approved Manager or in connection with a Ship or any Environmental Incident;
|
(g) |
any claim for breach of the ISM Code or the ISPS Code being made against the relevant Owner, the Approved Manager or otherwise in connection with a Ship; or
|
(h) |
any other matter, event or incident, actual or threatened, the effect of which will or could lead to the ISM Code or the ISPS Code not being complied with,
|
14.12 |
Restrictions on chartering, appointment of managers, etc.
The Borrower shall procure that none of the Owners will without the prior written consent of the Agent (acting on the authority of the Majority Lenders):
|
(a) |
let a Ship on demise charter for any period;
|
(b) |
enter into any time or consecutive voyage charter in respect of a Ship for a term which exceeds, or which by virtue of any optional extensions may exceed, 12
months;
|
(c) |
enter into any charter in relation to a Ship under which more than 2 months' hire (or the equivalent) is payable in advance;
|
(d) |
charter a Ship otherwise than on bona fide arm's length terms at the time when that Ship is fixed;
|
(e) |
appoint a commercial, technical or operational manager of a Ship (other than the Approved Manager) or agree to any material alteration to the terms of the
Approved Manager's appointment (and in respect of which, the consent of the Agent shall not be unreasonably withheld);
|
(f) |
de‑activate or lay up a Ship;
|
(g) |
change the legal ownership of the shares in a Ship;
|
(h) |
put a Ship into the possession of any person for the purpose of work being done upon her in an amount exceeding or likely to exceed Four Hundred Thousand
Dollars ($400,000) (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 her Earnings for the
cost of such work or otherwise; or
|
(i) |
change the classification society with which a Ship is classed (and in respect of which, the consent of the Agent and the authority of the Majority Lenders
shall not be unreasonably withheld).
|
14.13 |
Notice of Mortgage.
The Borrower shall procure that
the relevant Owner will keep each Mortgage registered against the relevant Ship as a valid first priority mortgage, carry on board that Ship a certified copy of the relevant Mortgage and place and maintain in a conspicuous place in the
navigation room and the Master's cabin of such Ship a framed printed notice stating that such Ship is mortgaged by the relevant Owner to the Lenders.
|
14.14 |
Sharing of Earnings.
The Borrower shall procure that
none of the Owners shall enter into any agreement or arrangement for the sharing of any Earnings other than a profit sharing agreed at arm’s length under a charter party provided that it is not a part of any pool arrangement, in which
case the Agent’s prior written consent will be required (such consent not to be unreasonably withheld).
|
14.15 |
ISPS Code.
The Borrower shall procure that any
relevant Owner and the Approved Manager will comply with the ISPS Code and in particular, without limitation, shall:
|
(a) |
procure that a Ship and the company responsible for such Ship’s compliance with the ISPS Code, comply with the ISPS Code; and
|
(b) |
maintain for each Ship an ISSC; and
|
(c) |
notify the Lender immediately in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC.
|
14.16 |
Charter Assignment.
If an Owner enters into any time
charter or contract of affreightment in respect of its Ship which is of twelve (12) months or more in duration, or is capable of exceeding twelve (12) months in duration, the Borrower shall procure such Owner to execute in favour of the
Security Trustee a Charter Assignment and notice of assignment (and shall use its best endeavours to obtain an acknowledgement of the same from the
|
15 |
SECURITY COVER
|
15.1 |
Provision of additional security cover; prepayment of
Advances.
The Borrower undertakes with each Creditor Party that if the Agent (acting on the instructions of the Majority Lenders) notifies the Borrower that:
|
(a) |
the aggregate Market Values (determined as provided below) of the then Mortgaged Ships; plus
|
(b) |
the net realisable value of any additional security previously provided under this Clause 15 (including the Cash Collateral Deposit provided that the Cash
Collateral Deposit Account is held in Greece but always excluding any amounts standing to the credit of the Earnings Account, the Retention Account or the Cash Collateral Deposit Account in the event that same are, or any of them, is
held outside of Greece),
|
|
(i) |
provide, or ensure that a third party provides, additional security which, in the opinion of the Majority Lenders, has a net realisable value at least equal
to the shortfall and which consists of either (aa) cash pledged to the Security Trustee which when in the form of cash in Dollars, will be valued on a Dollar for Dollar basis or (bb) a Security Interest (including, but not limited to, a
first priority mortgage or a second priority mortgage over another vessel), covering such asset or assets and documented in such terms as the Agent may, with authorisation from the Majority Lenders, approve or require; or
|
|
(ii) |
prepay in accordance with Clause 8.4 to Clause 8.7 such part of the Advances as will eliminate the shortfall, to be applied against reduction of the Advances
(including the relevant Advance Balloon Payment) pro rata.
|
15.2 |
Meaning of additional security.
In Clause 15.1 “
security
” means a Security Interest over an asset or assets (whether securing the Borrower’s liabilities under the Finance Documents or a
guarantee in respect of those liabilities), or a guarantee, letter of credit or other security in respect of the Borrower’s liabilities under the Finance Documents, in each case in a form and substance acceptable to the Agent in its
sole discretion.
|
15.3 |
Requirement for additional documents.
The Borrower
shall not be deemed to have complied with Clause 15.1(i) above until the Agent has received in connection with the additional security certified copies of documents of the kinds referred to in paragraphs 2, 3, 4 and 5 of Schedule 4,
Part A and such legal opinions in terms acceptable to lawyers selected by the Agent in its sole discretion.
|
15.4 |
Valuation of Ship.
Subject to the following provisions
of this Clause 15.4, the Market Value of a Ship shall be determined:
|
(a) |
in Dollars, as at the date of (or no earlier than 30 days prior to) such valuation;
|
(b) |
by an independent shipbroker selected by or acceptable to the Agent and reporting to the Agent;
|
(c) |
with or without physical inspection of that Ship (as the Agent may require);
|
(d) |
on the basis of a sale for prompt delivery for cash on normal arm's length commercial form as between a willing seller and a willing buyer, free of any
existing charter or other contract of employment.
|
15.5 |
Value of additional vessel security.
The net
realisable value of any additional security which is provided under Clause 15.1 (i) and which consists of a Security Interest over a vessel other than a Ship shall be that shown by way of a valuation complying with the requirements of
Clause 15.4.
|
15.6 |
Valuations binding and conclusive.
Any valuation under
Clause 15.1(i), 15.4 or 15.5 shall be binding and conclusive evidence of the Market Value of a Ship or of the other assets it refers to at the date of such valuation.
|
15.7 |
Provision of information.
The Borrower and/or the
relevant Owner shall promptly provide the Agent and any shipbroker or expert acting under Clause 15.4 or 15.5 with any information which the Agent or the shipbroker or expert may reasonable request for the purposes of the valuation;
and, if the Borrower fails to provide the information by the date specified in the request, the valuation may be made on any basis and assumptions which the shipbroker or the Majority Lenders (or the expert appointed by them) consider
prudent.
|
15.8 |
Payment of valuation expenses.
Without prejudice to the
generality of the Borrower’s obligations under Clauses 20.2, 20.3 and 21.3, the Borrower shall, subject to the provisions of Clause 15.9, on demand, pay or procure the payment by the relevant Owner to the Agent of the amount of the fees
and expenses of any shipbrokers or experts instructed by the Agent under this Clause and all legal and other expenses incurred by any Creditor Party in connection with any matter arising out of this Clause.
|
15.9 |
Frequency of valuations.
The Agent shall be entitled to
obtain written valuations of a Ship prior to the Drawdown Date of the Advance related to such Ship and any time during the Facility Period, provided that after drawdown of the relevant Advance the costs and expenses of such valuation
shall only be borne by the Borrower and/or the relevant Owner once per year (unless an Event of Default has occurred and is continuing or a mandatory prepayment event under Clause 8.8 has occurred, in which case the Agent shall be
entitled to obtain a valuation at any time, at the cost and expense of the Borrower and/or the relevant Owner).
|
16 |
PAYMENTS AND CALCULATIONS
|
16.1 |
Currency and method of payments.
All payments to be
made by the Lenders or by the Borrower and/or any other Obligor under a Finance
|
|
(i) |
by not later than 11.00 a.m. (New York City time) on the due date;
|
|
(ii) |
in same day Dollar funds settled through the New York Clearing House Interbank Payments System (or in such other Dollar funds and/or settled in such other
manner as the Agent shall specify as being customary at the time for the settlement of international transactions of the type contemplated by this Agreement);
|
|
(iii) |
if in Dollars, to the account of the Agent with such corresponding bank in New York as the Agent may from time to time notify to the Borrower, any other
Obligor and the other Creditor Parties; and
|
|
(iv) |
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, any other Obligor and the other
Creditor Parties.
|
16.2 |
Payment on non-Business Day.
If any payment by the
Borrower or any other Obligor under a Finance Document would otherwise fall due on a day which is not a Business Day:
|
(a) |
the due date shall be extended to the next succeeding Business Day; or
|
(b) |
if the next succeeding Business Day falls in the next calendar month, the due date shall be brought forward to the immediately preceding Business Day,
|
16.3 |
Basis for calculation of periodic payments.
All
interest and commitment fee and any other payments under any Finance Document which are of an annual or periodic nature shall accrue from day to day and shall be calculated on the basis of the actual number of days elapsed and a 360 day
year.
|
16.4 |
Distribution of payments to Creditor Parties.
Subject
to Clauses 16.5, 16.6 and 16.7:
|
(a) |
any amount received by the Agent under a Finance Document for distribution or remittance to a Lender or the Security Trustee shall be made available by the
Agent to that Lender, 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 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 generally shall be distributed by the Agent to each Lender
pro rata to the amount in that category which is due to it.
|
16.5 |
Permitted deductions by Agent.
Notwithstanding any
other provision of this Agreement or any other Finance Document, the Agent may, before making an amount available to a Lender, deduct and withhold from that amount any sum which is then due and payable to the Agent from that Lender
under any
|
16.6 |
Agent only obliged to pay when monies received.
Notwithstanding any other provision of this Agreement or any other Finance Document, the Agent shall not be obliged to make available to the Borrower or any Lender any sum which the Agent is expecting to receive for remittance or
distribution to the Borrower or that Lender until the Agent has satisfied itself that it has received that sum.
|
16.7 |
Refund to Agent of monies not received.
If and to the
extent that the Agent makes available a sum to the Borrower or a Lender, without first having received that sum, the Borrower or (as the case may be) the Lender concerned shall, on demand:
|
(a) |
refund the sum in full to the Agent; and
|
(b) |
pay to the Agent the amount (as certified by the Agent) which will indemnify the Agent against any funding or other loss, liability or expense incurred by the
Agent as a result of making the sum available before receiving it.
|
16.8 |
Agent may assume receipt.
Clause 16.7 shall not affect
any claim which the Agent has under the law of restitution, and applies irrespective of whether the Agent had any form of notice that it had not received the sum which it made available.
|
16.9 |
Creditor Party accounts.
Each Creditor Party shall
maintain accounts showing the amounts owing to it by the Borrower and each other Obligor under the Finance Documents and all payments in respect of those amounts made by the Borrower and each other Obligor.
|
16.10 |
Agent's memorandum account.
The Agent shall maintain a
memorandum account showing the amounts advanced by the Lenders and all other sums owing to the Agent, the Security Trustee and each Lender from the Borrower and each other Obligor under the Finance Documents and all payments in respect
of those amounts made by the Borrower and each other Obligor.
|
16.11 |
Accounts prima facie evidence.
If any accounts
maintained under Clauses 16.9 and 16.10 show an amount to be owing by the Borrower or any other Obligor to a Creditor Party, those accounts shall, absent manifest error, be prima facie evidence that that amount is owing to that Creditor
Party.
|
17 |
APPLICATION OF RECEIPTS
|
17.1 |
Normal order of application.
Except as any Finance
Document may otherwise provide, any sums which are received or recovered by any Creditor Party under or by virtue of any Finance Document shall be applied:‑
|
(a) |
FIRST: in or towards satisfaction of any amounts then due and payable under the Finance Documents in the following order and proportions:
|
|
(i) |
first, in or towards satisfaction pro rata of all amounts then due and payable to the Creditor Parties under the Finance Documents other than those amounts
referred to at (ii) and (iii) below (including, but without limitation, all amounts payable by the Borrower under Clauses
|
|
(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
|
|
(iii) |
thirdly, in or towards satisfaction pro rata of the Advances;
|
(b) |
SECONDLY: in retention of an amount equal to any amount not then due and payable under any Finance Document but which the Agent, by notice to the Borrower,
the other Obligors and the other Creditor Parties, states in its reasonable opinion will or may become due and payable in the future and, upon those amounts becoming due and payable, in or towards satisfaction of them in accordance with
the provisions of Clause 17.1(a); and
|
(c) |
THIRDLY: any surplus shall be paid to the Borrower or to any other person as instructed in writing by the Borrower.
|
17.2 |
Variation of order of application.
The Agent may,
following the occurrence of an Event of Default or a Potential Event of Default which is continuing, with the authorisation of the Majority Lenders by notice to the Borrower, the other Obligors and the other Creditor Parties provide for
a different manner of application from that set out in Clause 17.1 either as regards a specified sum or sums or as regards sums in a specified category or categories.
|
17.3 |
Appropriation rights overriden.
This Clause 17 and any
notice which the Agent gives under Clause 17.2 shall override any right of appropriation possessed, and any appropriation made, by any Obligor.
|
18 |
APPLICATION OF EARNINGS
|
18.1 |
Payment and application of Earnings.
The Borrower
undertakes with each Creditor Party to procure that, throughout the Facility Period (and subject only to the provisions of a General Assignment for a Mortgaged Ship), all the Earnings of a Mortgaged Ship are credited to the relevant
Earnings Account related to such Mortgaged Ship and shall be applied as follows:
|
(a) |
first, in or towards meeting the costs and expenses from time to time incurred by or on behalf of the relevant Owner in connection with the operation of that
Mortgaged Ship owned by that Owner;
|
(b) |
secondly, in or towards making the payments of principal and interest due to the Lenders in accordance with the provisions of Clause 18.3; and
|
(c) |
thirdly, any surplus from time to time arising on an Earnings Account following application as aforesaid, subject always to the other provisions of Clause 18,
may be withdrawn by the holder of such Earnings Account provided there is no Event of Default which is continuing.
|
18.2 |
Monthly retentions.
The Borrower undertakes with each
Creditor Party to procure that, in each calendar month of the Facility Period commencing one month after the Drawdown Date of the first Advance, on such dates as the Agent may from time to time specify, there is transferred to the
Retention
|
(a) |
one‑third of the amount of the reduction falling due under Clause 8.2 on the next Reduction Date; and
|
(b) |
the relevant fraction of the aggregate amount of interest on the Advances which is payable on the next due date for payment of interest under this Agreement.
|
18.3 |
Shortfall in Earnings.
If the aggregate Earnings
received in the Earnings Accounts are insufficient in any month for the required amount to be transferred to the Retention Account under Clause 18.2, the Borrower and/or the Owners shall make up the amount of the insufficiency on demand
from the Agent; but, without thereby prejudicing the Agent’s right to make such demand at any time, the Agent may permit the Borrower or the holder of such Earnings Account to make up all or part of the insufficiency by increasing the
amount of any transfer under Clause 18.2 from the Earnings received in the next or subsequent months.
|
18.4 |
Application of retentions.
Until an Event of Default
occurs which is continuing, the Agent shall on each Reduction Date and on each due date for the payment of interest under this Agreement apply in accordance with the payment details set out in Clause 16.1 so much of the balance on the
Retention Account as equals:
|
(a) |
the amount of each reduction due on that Reduction Date; or
|
(b) |
the amount of interest payable on that interest payment date;
|
18.5 |
Interest accrued on Retention Account.
Any credit
balance on the Retention Account shall bear interest at the rate from time to time offered by the Account Bank to its customers for Dollar deposits of similar amounts and for periods similar to those for which such balance appears to
the Account Bank likely to remain on the Retention Account.
|
18.6 |
Location of Accounts.
The Borrower and each other
holder of an Account shall maintain the Accounts with the Account Bank, free of Security Interest and rights of set-off (other than as created under the Accounts Pledges), until no amount remains outstanding under this Agreement or any
other Finance Documents and shall procure that transfers are made from each Account (and irrevocably authorises the Agent to instruct the Account Bank to transfer from each Account) in order to facilitate the payment of amounts required
and/or contemplated by this Agreement and the other Finance Documents and shall promptly:
|
(a) |
comply with any requirement of the Agent as to the location or re‑location of any of the Accounts; and
|
(b) |
execute any documents which the Agent specifies to create or maintain in favour of the Security Trustee a Security Interest over (and/or rights of set-off,
consolidation or other rights in relation to) each Account.
|
18.7 |
Debits for expenses etc.
The Agent shall be entitled
(but not obliged) from time to time to debit any Earnings Account with prior notice in order to discharge any amount due and payable under Clause 20 or 21 to a Creditor Party or payment of which a Creditor Party has become entitled to
demand under Clause 20 or 21.
|
18.8 |
Borrower’s obligations unaffected.
The provisions of
this Clause 18 do not affect:
|
(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 any Obligor under any Finance Document.
|
19 |
EVENTS OF DEFAULT
|
19.1 |
Non-Payment
|
19.2 |
Other specific obligations
|
(a) |
Any requirement of Clauses 11.6 (
Provision of financial
statements)
, 11.7 (
Form of financial statements)
and 12.8 (
Compliance Check)
is not satisfied.
|
(b) |
Any requirement of Clauses 12.5
(Cash Collateral Deposit)
,
12.6
(Debt to equity ratio)
and 12.7
(Minimum Net Worth)
is not satisfied.
|
(c) |
An Obligor does not comply with Clause 15.1
(Provision of
additional security cover; prepayment of Advances)
.
|
(d) |
The obligatory insurances of a Mortgaged Ship are not placed and kept in full force and effect in accordance with Clause 13
(Insurance)
within the period specified therein or in any Finance Document,
|
19.3 |
Other obligations
|
(a) |
An Obligor does not comply with any provision of the Finance Documents (other than those referred to in Clause 19.1 (
Non-payment)
, Clause 19.2 (
Other specific obligations
)
and Clause 19.23
(Sanctions)
.
|
(b) |
No Event of Default under paragraph (a) above will occur if the failure to comply is capable of remedy and is remedied within ten (10) Business Days days of
the earlier of (i) the Agent giving notice to the Borrower and (ii) any Obligor becoming aware of the failure to comply.
|
19.4 |
Misrepresentation
|
19.5 |
Cross default
|
(a) |
Any Financial Indebtedness of any member of the Group:
|
|
(i) |
is not paid when due nor within any applicable grace period; or
|
|
(ii) |
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);
|
|
(iii) |
is capable of being declared by a creditor to be due and payable prior to its specified maturity as a result of such an event of default.
|
(b) |
An Obligor is in breach of any of its obligations under any Relevant Document or any other contract entered into by an Obligor, the effect of which would
reasonably be expected to result in a Material Adverse Effect.
|
(c) |
No Event of Default will occur under this clause 19.5 in relation to the Financial Indebtedness of the Borrower if the aggregate amount of Financial
Indebtedness falling within paragraphs (a) and (b) above is less than $1,000,000 (or its equivalent in any other currencies).
|
19.6 |
Insolvency
|
(a) |
Any Obligor is unable or admits inability to pay its debts as they fall due, is deemed to, or is declared to, be unable to pay its debts under any applicable
law, suspends or threatens to suspend making payments on any of its debts, or, by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors with a view to rescheduling any of its
Financial Indebtedness.
|
(b) |
A moratorium is declared in respect of any indebtedness of any Obligor.
|
19.7 |
Insolvency proceedings
|
(a) |
Any corporate action, legal proceedings or other procedure or step is taken in relation to:
|
(b) |
Paragraph (a) above shall not apply to any winding-up petition or any relevant legal proceedings which is contested in good faith and on substantial grounds
or is frivolous or vexatious and is discharged, stayed or dismissed within thirty (30) days of commencement.
|
19.8 |
Creditor’s process
|
19.9 |
Unlawfulness and invalidity
|
(a) |
It is or becomes unlawful for any Obligor to perform any of its obligations under the Finance Documents or any Transaction Security created or expressed to be
created or evidenced by the Security Documents ceases to be effective or any subordination created under a Finance Document is or becomes unlawful.
|
(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 Creditor Parties under the Finance Documents.
|
(c) |
Any Finance Document ceases to be in full force and effect or any Transaction Security created or expressed to be created by the Security Documents or any
subordination created expressed to be created under the Finance Documents ceases to be legal, valid, binding, enforceable, or effective or is alleged on substantial grounds by a party to it (other than a Creditor Party) to be
ineffective.
|
(d) |
Any Transaction Security proves to have ranked after or lost its priority to any other Security.
|
19.10 |
Cessation of business
|
19.11 |
Expropriation
|
19.12 |
Repudiation and rescission of Finance Documents
|
19.13 |
Conditions subsequent
|
19.14 |
Revocation or modification of authorisation
|
19.15 |
Loss of Mortgaged Ship
|
(a) |
that Mortgaged Ship 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 for such Mortgaged Ship and it is not apparent to the Agent (acting reasonably) 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 Trustee within one hundred and twenty (120) days of the
occurrence of the casualty giving rise to the Total Loss in question or such longer period as the Agent may in its discretion agree, and
|
(d) |
should, for whatever reasons the insurers of such Mortgaged Ship delay or fail to meet the relevant Total Loss claim, the Borrower prepays either (i) the
amount of the balance corresponding to the Advance related to such Mortgaged Ship lost or sold or (ii) such amount so that the ratio of the aggregate Market Value of the Mortgaged Ships to the Facility remains the same after such loss
or sale of the relevant Mortgaged Ship, whichever is the higher within one hundred and twenty (120) of the occurrence of the casualty giving rise to the Total Loss in question or such longer period as the Agent may in its discretion
agree.
|
19.16 |
Ship registration
|
19.17 |
Classification approvals
|
19.18 |
Political Risk
|
19.19 |
Mortgaged Ships Defaults
|
(a) |
Any Mortgaged Ship is arrested, detained, seized, impounded in exercise or purported exercise of any possessory lien or other claim or interest and such Ship
is not released within fourteen (14) days of the occurrence of the same.
|
(b) |
There is any material amendment to a Charter without the Agent’s (acting on the instructions of the Lenders) prior written consent which may, in the
reasonable opinion of the Agent, have a Material Adverse Effect.
|
(c) |
Any term of a Management Agreement is breached which breach shall, in the reasonable opinion of the Agent, have a Material Adverse Effect or any Management
Agreement is terminated (whether or not in accordance with its terms) without being replaced to the satisfaction of the Agent and in accordance with the provisions of this Agreement.
|
19.20 |
Litigation
|
19.21 |
Material Adverse Effect
|
19.22 |
Sanctions
|
(a) |
Any of the Obligors, any member of the Group or any of their subsidiaries becomes a Restricted Person or becomes owned or controlled by, or acts directly or
indirectly on behalf of, a Restricted Person in breach of Sanctions or any of such persons becomes the owner or controller of a Restricted Person.
|
(b) |
Any proceeds of the Facility are made available, directly or indirectly, to fund any trade, business or other activities involving or for the benefit of a
Restricted Person or in any country, or territory, that, at the time of such funding, is a Sanctioned Country or otherwise is, directly or indirectly, applied in a manner that would result in a violation of Sanctions by any Creditor
Party or any Obligor or for any purpose prohibited by Sanctions.
|
(c) |
Any of the Obligors or any of their subsidiaries takes any action resulting in a violation by such persons of Sanctions or which constitutes or would
constitute any such violation by a Creditor Party or any Obligor.
|
19.23 |
Change of ownership of a Guarantor
|
19.24 |
Acceleration
|
(a) |
by notice to the Borrower, cancel the Total Commitments, at which time they shall immediately be cancelled; and/or
|
(b) |
by notice to the Borrower, declare that all Advances, 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) |
by notice to the Borrower, declare that all Advances be payable on demand, at which time it shall immediately become payable on demand by the Agent on the
instructions of the Majority Lenders; and/or
|
(d) |
by notice to the Borrower, declare that no withdrawal be made from any Account; and/or
|
(e) |
exercise or direct the Security Trustee and/or any other beneficiary of the Security Documents to exercise any or all of its rights, remedies, powers, or
discretions under the Finance Documents.
|
20 |
FEES AND EXPENSES
|
20.1 |
Fees – Underwriting Fee – Commitment Fee – Ship Substitution
Fee – Renewal Fee.
The Borrower shall pay to the Agent:
|
(a) |
an underwriting fee corresponding to one point per cent (1%) of the amount of each Advance actually drawn down payable on the Drawdown Date of the relevant
Advance.
|
(b) |
a commitment fee at the rate of zero point forty per cent (0.40%) per annum on the daily aggregate undrawn and un-cancelled part of the Commitment accruing as
of the day of this Agreement and payable quarterly in arears.
|
(c) |
a substitution fee corresponding to zero point fifty per cent (0.50%) of the amount of the Advance related to a Ship being substituted, should the Borrower
exercise its option to substitution of a Ship in accordance with Clause 8.11;
|
(d) |
a renewal fee to be agreed between the Lenders and the Borrower payable on each annual extension of the Drawdown Period should Lenders consent to extend the
Drawdown Period in accordance with Clause 4.8 (
Extension of Drawdown Period
)
|
(e) |
The Underwriting Fee, the Commitment Fee, the Ship Substitution Fee and the Renewal Fee referred to in this Clause 20.1 shall not be refundable.
|
20.2 |
Costs of negotiation, preparation etc.
The Borrower
shall pay to the Agent on its demand the amount of all expenses (including, but not limited to, all legal expenses and VAT, if applicable) incurred by the Agent or the Security Trustee in connection with the negotiation, preparation,
execution or registration of any Finance Document or any related document or with any transaction contemplated by a Finance Document or a related document, other than any syndication costs/expenses.
|
20.3 |
Costs of variations, amendments, enforcement etc.
The
Borrower shall pay to the Agent, on the Agent's demand, the amount of all expenses incurred by a Lender in connection with:
|
(a) |
any amendment or supplement to a Finance Document;
|
(b) |
any consent or waiver by the Lenders, the Majority Lenders or the Creditor Party concerned under or in connection with a Finance Document;
|
(c) |
the valuation of any security provided or offered under Clause 15 or any other matter relating to such security;
|
(d) |
any step taken by the Agent or the Security Trustee concerned with a view to the protection, exercise or enforcement of any right or Security Interest created
by a Finance Document or for any similar purpose.
|
20.4 |
Documentary taxes.
The Borrower shall promptly pay any
tax payable on or by reference to any Finance Document, and shall, on the Agent's demand, fully indemnify each Creditor Party against any liabilities and expenses resulting from any failure or delay by the Borrower to pay such a tax.
|
20.5 |
Certification of amounts.
A notice which is signed by
at least one officer of a Creditor Party, which states that a specified amount, or aggregate amount, is due to that Creditor Party under this Clause 20 and which indicates (without necessarily specifying a detailed breakdown) the
matters in respect of which the amount, or aggregate amount, is due shall, save for manifest error, be prima facie evidence that the amount, or aggregate amount, is due.
|
21 |
INDEMNITIES
|
21.1 |
Indemnities regarding borrowing and reduction of Advances.
The Borrower shall fully indemnify the Agent and each Lender on the Agent's written demand and the Security Trustee on its demand in respect of all expenses, liabilities and losses which are incurred by that Creditor Party, or which
that Creditor Party reasonably and with due diligence estimates that it will incur, as a result of or in connection with:
|
(a) |
the Facility not being borrowed on the date specified in the relevant Drawdown Notices for any reason other than a default by the Lender claiming the
indemnity;
|
(b) |
the receipt or recovery of all or any part of the Facility or an overdue sum otherwise than on the last day of an Interest Period or other relevant period;
|
(c) |
any failure (for whatever reason) by the Borrower to make payment of any amount due under a Finance Document on the due date or, if payable on demand, three
(3) days following the date on which the written demand is served (after giving credit for any default interest paid by the Borrower on the amount concerned under Clause 7);
|
(d) |
the occurrence and/or continuance of an Event of Default or a Potential Event of Default (including, but not limited to, a breach of Clauses 11.17 or 11.18)
and/or the Acceleration under Clause 19.25;
|
21.2 |
Breakage costs.
Without limiting its generality,
Clause 21.1 covers any liability, expense or loss, incurred by a Lender:
|
(a) |
in liquidating or employing deposits from third parties acquired or arranged to fund or maintain all or any part of its Contribution and/or any overdue amount
(or an aggregate amount which includes its Contribution or any overdue amount); and
|
(b) |
in terminating, or reversing or otherwise in connection with, any open position arising under this Agreement.
|
21.3 |
Miscellaneous indemnities.
The Borrower shall fully
indemnify the Agent and the Security Trustee severally on their respective demands in respect of all claims, demands, proceedings, liabilities, taxes, losses and expenses of every kind (“
liability items
”) which may be made or brought against, or incurred by, the Agent or the Security Trustee, in any country, in relation to:
|
(a) |
any action taken, or omitted or neglected to be taken, under or in connection with any Finance Document by the Agent, the Security Trustee or any other
Creditor Party or by any receiver appointed under a Finance Document;
|
(b) |
any other event, matter or question which occurs or arises at any time during the Facility Period and which has any connection with, or any bearing on, any
Finance Document, any payment or other transaction relating to a Finance Document or any asset covered (or previously covered) by a Security Interest created (or intended to be created) by a Finance Document;
|
21.4 |
Extension of indemnities; environmental indemnity.
Without prejudice to its generality, Clause 21.3 covers:
|
(a) |
any matter which would be covered by Clause 21.3 if any of the references in that Clause to a Lender were a reference to the Agent or (as the case may be) to
the Security Trustee; and
|
(b) |
any liability items which arise, or are asserted, under or in connection with any law relating to safety at sea, pollution or the protection of the
environment if such liability items would not have arise or asserted against the Lender or Agent or the Security Trustee (as the case may be) if any of them had not entered into any of the Finance Documents and/or exercised any of its
rights, powers and discretions thereby conferred and/or performed any of its obligations thereunder and/or been involved in any of the transactions contemplated by the Finance.
|
21.5 |
Currency indemnity.
If any sum due from the Borrower
or any other Obligor to a Creditor Party under a Finance Document or under any order or judgment relating to a Finance Document has to be converted from the currency in which the such Finance Document provided for the sum to be paid
(the “
Contractual Currency
”) into another currency (the “
Payment Currency
”) for the purpose of:
|
(a) |
making or lodging any claim or proof against the Borrower or any Obligor, whether in its liquidation, any arrangement involving it or otherwise; or
|
(b) |
obtaining an order or judgment from any court or other tribunal; or
|
(c) |
enforcing any such order or judgment;
|
21.6 |
Certification of amounts.
A notice which is signed by
1 officer of a Creditor Party, which states that a specified amount, or aggregate amount, is due to that Creditor Party under this Clause 21 and which indicates (without necessarily specifying a detailed breakdown) the matters in
respect of which the amount, or aggregate amount, is due shall, save for manifest error, be prima facie evidence that the amount, or aggregate amount, is due.
|
21.7 |
Sums deemed due to a Lender.
For the purposes of this
Clause 21, a sum payable by the Borrower to the Agent or the Security Trustee for distribution to a Lender shall be treated as a sum due to that Lender.
|
21.8 |
Mandatory Costs.
The Borrower shall, on demand by the
Agent, pay to the Agent for the account of a Lender, such amount which that Lender certifies in a notice to the Agent to be its good faith determination of the amount necessary to compensate it for complying with:
|
(a) |
in the case of a Lender lending from a lending office in a Participating Member State, the minimum reserve requirements (or other requirements having the same
or similar purpose) of the European Central Bank or any other authority or agency which replaces all or any of its functions) in respect of loans made from that lending office; and
|
(b) |
in the case of any Lender lending from a lending office in the United Kingdom, any reserve asset, special deposit or liquidity requirements (or other
requirements having the same or similar purpose) of the Bank of England (or any other governmental authority or agency) and/or paying any fees to the Financial Conduct Authority and/or the Prudential Regulation Authority (or any other
governmental authority or agency which replaces all or any of their functions), which, in each case, is referable to that Lender's participation in the Facility.
|
22 |
NO SET-OFF OR TAX DEDUCTION
|
22.1 |
No deductions.
All amounts due from the Borrower under
a Finance Document shall be paid:
|
(a) |
without any form of set‑off, cross-claim or condition; and
|
(b) |
free and clear of any tax deduction except a tax deduction which the Borrower are required by law to make.
|
22.2 |
Grossing-up for taxes.
If the Borrower is required by
law to make a tax deduction from any payment:
|
(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.
|
22.3 |
Evidence of payment of taxes.
Within 1 month after
making any tax deduction, the Borrower shall deliver to the Agent documentary evidence satisfactory to the Agent that the tax had been paid to the appropriate taxation authority.
|
22.4 |
Exclusion of tax on overall net income.
In this Clause
22 “
tax deduction
” means any deduction or withholding for or on account of any present or future tax except tax on a Creditor Party's
overall net income.
|
22.5 |
FATCA Information.
|
(a) |
Subject to paragraph (c) below, each Party shall, within ten (10) Business Days of a reasonable request by another Party
|
|
(i) |
confirm to that other Party whether it is a FATCA Exempt Party or is 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 confirms to another Party pursuant to paragraph (a) (i) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not, or
has ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly.
|
(c) |
Paragraph (a) above shall not oblige any Creditor Party to do anything which would or might in its reasonable opinion constitute a breach of any law or
regulation, any policy of that party, any fiduciary duty or any duty of confidentiality, or to disclose any confidential information (including, without limitation, its tax returns and calculations); provided, however, that information
required (or equivalent to the information so required) by United States Internal Revenue Service Forms W-8 or W-9 (or any successor forms) shall not be treated as confidential information of such party for purposes of this paragraph
(c).
|
(d) |
If a Party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with
paragraph (a) above (including, for the avoidance of doubt, where paragraph (c) above applies), then if that Party failed to confirm whether it is (and/or remains) a FATCA Exempt Party then such Party shall be treated for
|
22.6 |
FATCA Deduction
|
(a) |
Each Party may make any FATCA Deduction it is required to make by FATCA, and any payment required in connection with that FATCA Deduction, and no Party shall
be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction.
|
(b) |
Each Party shall promptly, upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate or the basis of such FATCA
Deduction) notify the Party to whom it is making the payment and, in addition, shall notify the Borrower and the Agent and the Agent shall notify the other Creditor Parties.
|
22.7 |
Contractual recognition of Bail-In.
|
(a) |
any Bail-In Action in relation to any such liability applicable to such Party, 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 applicable to
such Party.
|
23 |
ILLEGALITY, ETC
|
23.1 |
Illegality.
This Clause 23 applies if a Lender (the “
Notifying Lender
”) notifies the Agent that it has become, or will with effect from a specified date, become:
|
(a) |
unlawful or prohibited (including, without limitation, due to a breach of Clauses 11.17 or 11.18) as a result of the introduction of a new law, an amendment
to an existing law or a change in the manner in which an existing law is or will be interpreted or applied; or
|
(b) |
contrary to, or inconsistent with, any regulation,
|
23.2 |
Notification of illegality.
The Agent shall promptly
notify the Borrower, the other Obligors, the Security Trustee and the other Lenders of the notice under Clause 23.1 which the Agent receives from the Notifying Lender.
|
23.3 |
Prepayment; termination of Commitment.
On the Agent
notifying the Borrower under Clause 23.2, the Notifying Lender's Commitment shall terminate; and thereupon or, if later, on the date specified in the Notifying Lender's notice under Clause 23.1 as the date on which the notified event
would become effective the Borrower shall prepay the Notifying Lender's Contribution in accordance with Clause 8.
|
23.4 |
Mitigation
. If circumstances arise which would result
in a notification under Clause 23.1 then, without in any way limiting the rights of the Notifying Lender under Clause 23.3, the Notifying Lender shall use reasonable endeavours to transfer its obligations, liabilities and rights under
this Agreement and the Finance Documents to another office or financial institution not affected by the circumstances but the Notifying Lender shall not be under any obligation to take any such action if, in its opinion, to do would or
might:
|
(a) |
have an adverse effect on its business, operations or financial condition; or
|
(b) |
involve it in any activity which is unlawful or prohibited or any activity that is contrary to, or inconsistent with, any regulation; or
|
(c) |
involve it in any expense (unless indemnified to its satisfaction) or tax disadvantage.
|
24 |
INCREASED COSTS
|
24.1 |
Increased costs.
This Clause 24 applies if a Lender
(the “
Notifying Lender
”) notifies the Agent that the Notifying Lender considers that as a result of:
|
(a) |
the introduction or alteration after the date of this Agreement of a law or an alteration after the date of this Agreement in the manner in which a law is
interpreted or applied (disregarding any effect which relates to the application to payments under this Agreement of a tax on the Lender's overall net income); or
|
(b) |
the effect of complying with any regulation (including any regulation which relates to capital adequacy or liquidity controls or which affects the manner in
which the Notifying Lender allocates capital resources to its obligations under this Agreement) which is introduced, or altered, or the interpretation or application of which is altered, after the date of this Agreement (including, but
not limited to, Basel III and CRD IV costs),
|
|
(i) |
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; or
|
|
(ii) |
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;
|
|
(iii) |
an additional or increased cost of funding all or maintaining all or any of the advances comprised in a class of advances formed by or including the Notifying
Lender's Contribution or (as the case may require) the proportion of that cost attributable to the Contribution; or
|
|
(iv) |
a liability to make a payment, or a return foregone, which is calculated by reference to any amounts received or receivable by the Notifying Lender under this
Agreement;
|
24.2 |
Notification to the Borrower of claim for increased costs.
The Agent shall promptly notify the Borrower and the other Obligors of the notice which the Agent received from the Notifying Lender under Clause 24.1.
|
24.3 |
Payment of increased costs.
The Borrower shall pay to
the Agent, on the Agent's demand, for the account of the Notifying Lender the amounts which the Agent from time to time notifies the Borrower that the Notifying Lender has specified to be necessary to compensate the Notifying Lender for
the increased cost.
|
24.4 |
Notice of prepayment.
If the Borrower is not willing
to continue to compensate the Notifying Lender for the increased cost under Clause 24.3, the Borrower may give the Agent not less than 14 days' notice of its intention to prepay the Notifying Lender's Contribution at the end of an
Interest Period.
|
24.5 |
Prepayment; termination of Commitment.
A notice under
Clause 24.4 shall be irrevocable; the Agent shall promptly notify the Notifying Lender of the Borrower’s notice of intended prepayment; and:
|
(a) |
on the date on which the Agent serves that notice, the Commitment of the Notifying Lender shall be cancelled; and
|
(b) |
on the date specified in its notice of intended prepayment, the Borrower shall prepay (without premium or penalty) the Notifying Lender's Contribution,
together with accrued interest thereon at the applicable rate plus the Margin.
|
24.6 |
Application of prepayment.
Clause 8 shall apply in
relation to the prepayment.
|
25 |
SET‑OFF
|
25.1 |
Application of credit balances.
Each Creditor Party
may without prior notice at any time after the occurrence of an Event of Default which is continuing:
|
(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 and/or the Guarantors at any
office in any country of that Creditor Party in or towards satisfaction of any sum then due from the Borrower and/or the Guarantors 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 and/or the Guarantors;
|
|
(ii) |
convert or translate all or any part of a deposit or other credit balance into Dollars;
|
|
(iii) |
enter into any other transaction or make any entry with regard to the credit balance which the Creditor Party concerned considers appropriate.
|
25.2 |
Existing rights unaffected.
No Creditor Party shall be
obliged to exercise any of its rights under Clause 25.1; and those rights shall be without prejudice and in addition to any right of set‑off, combination of accounts, charge, lien or other right or remedy to which a Creditor Party is
entitled (whether under the general law or any document).
|
25.3 |
Sums deemed due to a Lender.
For the purposes of this
Clause 25, a sum payable by the Borrower and/or the Guarantors to the Agent or the Security Trustee for distribution to, or for the account of, a Lender shall be treated as a sum due to that Lender; and each Lender's proportion of a sum
so payable for distribution to, or for the account of, the Lenders shall be treated as a sum due to such Lender.
|
25.4 |
No Security Interest.
This Clause 25 gives the Lenders
a contractual right of set off only, and does not create any equitable charge or other Security Interest over any credit balance of the Borrower and/or the Guarantors.
|
25.5 |
Borrower/Guarantors’ set off.
The Borrower and/or the
Guarantors shall not have a right of set off in relation to sums that may be due from any Creditor Party under this Agreement or any of the other Finance Documents.
|
26 |
TRANSFERS AND CHANGES IN LENDING OFFICES
|
26.1 |
Transfer by the Borrower.
The Borrower may not:
|
(a) |
without the prior written consent of the Agent (given on the instructions of all of the Lenders), transfer any of its rights or obligations under any Finance
Document;
|
(b) |
without the prior written consent of the Agent (given on the instructions of all the Lenders), enter into any merger, de-merger or other reorganisation, or
carry out any other act, as a result of which any of its rights or liabilities would vest in, or pass to, another person.
|
26.2 |
Transfer by a Lender.
Subject to Clause 26.4, a Lender
(the “
Transferor Lender
”) may, at its sole discretion and at its own expense, without the consent of and/or the prior consultation
with the Borrower and/or any other Obligor, at any time assign or transfer by novation (as applicable):
|
(a) |
its rights in respect of all or part of its Contribution; or
|
(b) |
its obligations in respect of all or part of its Commitment; or
|
(c) |
a combination of (a) and (b);
|
26.3 |
Transfer Certificate, delivery and notification.
As
soon as reasonably practicable after a Transfer Certificate is delivered to the Agent, it shall (unless it has reason to believe that the Transfer Certificate may be defective):
|
(a) |
sign the Transfer Certificate on behalf of itself, the Borrower, the other Obligors, the Security Trustee, the Arranger, the Account Bank and each of the
Lenders;
|
(b) |
on behalf of the Transferee Lender, send to the Borrower and each other Obligor letters or faxes or electronic mail notifying them of the Transfer Certificate
and attaching a copy of it;
|
(c) |
forward to the Transferee Lender copies of the letters or faxes or electronic mail sent under paragraph (b) above.
|
26.4 |
Effective Date of Transfer Certificate.
A Transfer
Certificate becomes effective on the date, if any, specified in the Transfer Certificate as its effective date
Provided that
it is
signed by the Agent under Clause 26.3 on or before that date.
|
26.5 |
No transfer without Transfer Certificate.
No
assignment or transfer of any right or obligation of a Lender under any Finance Document is binding on, or effective in relation to, the Borrower, any other Obligor, the Agent or the Security Trustee unless it is effected, evidenced or
perfected by a Transfer Certificate.
|
26.6 |
Lender re-organisation; waiver of Transfer Certificate.
However, if a Lender enters into any merger, de-merger or other reorganisation as a result of which all its rights or obligations vest in another person (the “
successor
”), the Agent may, if it sees fit, by notice to the successor and the Borrower and the Security Trustee waive the need for the execution and delivery of a Transfer Certificate; and, upon service of
the Agent's notice, the successor shall become a Lender with the same Commitment and Contribution as were held by the predecessor Lender. In addition, where security rights (such as pledge and mortgage rights) created in the interest of
the Lender concerned were transferred to the successor as a result of such a merger, de-merger or other reorganisation, then such rights will serve as if they were created in the interest of the successor.
|
26.7 |
Effect of Transfer Certificate.
A Transfer Certificate
takes effect in accordance with English law as follows:
|
(a) |
to the extent specified in the Transfer Certificate, all rights, interests and/or obligations (present, future or contingent) which the Transferor Lender has
under or by virtue of the Finance Documents are assigned and/or transferred by novation (as applicable) 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 other Obligor 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 Facility 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,
|
(f) |
the Transferee Lender becomes entitled to all the rights under the Finance Documents which are applicable to the Lenders generally, including but not limited
to those relating to the Majority Lenders and those under Clause 5.7 and Clause 21, and to the extent that the Transferee Lender becomes entitled to such rights, the Transferor Lender ceases to be entitled to them; and
|
(g) |
in respect of any breach of a warranty, undertaking, condition or other provision of a Finance Document or any misrepresentation made in or in connection with
a Finance Document, the Transferee Lender shall be entitled to recover damages by reference to the loss incurred by it as a result of the breach or misrepresentation, irrespective of whether the original Lender would have incurred a
loss of that kind or amount.
|
26.8 |
Maintenance of register of Lenders
. During the
Facility Period the Agent shall maintain a register in which it shall record the name, Commitment, Contribution and administrative details (including the lending office) from time to time of each Lender holding a Transfer Certificate
and the effective date (in accordance with Clause 26.4) of the Transfer Certificate; and the Agent shall make the register available for inspection by any Lender, the Security Trustee and the Borrower during normal banking hours,
subject to receiving at least 3 Business Days prior notice.
|
26.9 |
Reliance on register of Lenders.
The entries on that
register shall, in the absence of manifest error, be conclusive in determining the identities of the Lenders and the amounts of their Commitments and Contributions and the effective dates of Transfer Certificates and may be relied upon
by the Agent and the other parties to the Finance Documents for all purposes relating to the Finance Documents.
|
26.10 |
Authorisation of Agent to sign Transfer Certificates.
The Borrower, the other Obligors, the Security Trustee, the Arranger, the Account Bank and each of the Lenders irrevocably authorise the Agent to sign Transfer Certificates on its behalf.
|
26.11 |
Registration fee.
In respect of any Transfer
Certificate, the Agent shall be entitled to recover a registration fee of $2,500 from the Transferor Lender or (at the Agent's option) the Transferee Lender. Such fees will not burden any of the Obligors under any circumstances.
|
26.12 |
Sub-participation; subrogation assignment.
A Lender
may sub‑participate all or any part of its rights and/or obligations under or in connection with the Finance Documents without the consent of, or any notice to, the Borrower, any other Obligor, the Agent or the Security Trustee; and the
Lenders may assign, in any manner and terms agreed by the Majority Lenders, the Agent and the Security Trustee, all or any part of those rights to an insurer or surety who has become subrogated to them.
|
26.13 |
Disclosure of information.
A Lender may disclose to a
potential Transferee Lender or sub‑participant any information necessary to effect the relevant transaction which the Lender has received in relation to the Borrower, any other Obligor or their affairs under or in connection with any
Finance Document, provided that the potential Transferee Lender or sub-participant shall have first signed a confidentiality undertaking in relation thereto.
|
26.14 |
Change of lending office.
A Lender may change its
lending office without consultation with the Borrower by giving notice to the Agent and the change shall become effective on the later of:
|
(a) |
the date on which the Agent receives the notice; and
|
(b) |
the date, if any, specified in the notice as the date on which the change will come into effect.
|
26.15 |
Notification.
On receiving such a notice, the Agent
shall notify the Borrower and the Security Trustee; and, until the Agent receives such a notice, it shall be entitled to assume that a Lender is acting through the lending office of which the Agent last had notice.
|
26.16 |
Security over Lenders’ rights
. In addition to the
other rights provided to Lenders under this Clause 26, each Lender may without consulting with or obtaining consent from, the Borrower or any other Obligor, at any time charge, assign or otherwise create a Security Interest 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:
|
(a) |
any charge, assignment or other Security Interest to secure obligations to a federal reserve or central bank; and
|
(b) |
in the case of any Lender which is a fund, any charge, assignment or other Security Interest granted to any holders (or trustee or representatives of holders)
of obligations owed, or securities issued, by that Lender as security for those obligations or securities;
|
|
(i) |
release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or Security Interest
for Lender as a party to any of the Finance Documents; or
|
|
(ii) |
require any payments to be made by the Borrower or any other Obligor or grant to any person any more extensive rights than those required to be made or
granted to the relevant Lender under the Finance Documents.
|
26.17 |
Consent to disclosure.
The Borrower authorises any of
the Lenders to disclose all information related or connected to:
|
(a) |
a Mortgaged Ship or any other vessel owned or operated by an Obligor;
|
(b) |
the negotiation, drafting and content of this Agreement and the Finance Documents;
|
(c) |
the Facility; or
|
(d) |
that Obligor,
|
27 |
VARIATIONS AND WAIVERS
|
27.1 |
Variations, waivers etc. by Majority Lenders.
Subject
to Clause 27.2, a document shall be effective to vary, waive, suspend or limit any provision of a Finance Document, or any Creditor Party's rights or remedies under such a provision or the general law, only if the document is signed, or
specifically agreed to by fax or electronic mail, by the Borrower and/or (as the case may be) any other concerned Obligor, by the Agent on behalf of the Majority Lenders, by the Agent and the Security Trustee in their own rights, and,
if the document relates to a Finance Document to which an Obligor is party, by that Obligor.
|
27.2 |
Variations, waivers etc. requiring agreement of all Lenders.
However, as regards the following, Clause 27.1 applies as if the words “by the Agent on behalf of the Majority Lenders” were replaced by the words “by or on behalf of every Lender”:
|
(a) |
a reduction in the Margin or in the definition of LIBOR;
|
(b) |
a postponement to the date for, or a reduction in the amount of, any payment of principal, interest, fees, or other sums payable under this Agreement;
|
(c) |
an increase in any Lender's Commitment;
|
(d) |
an extension of the Drawdown Period;
|
(e) |
a change to the definition of “Majority Lenders”, “Finance Documents”, “Restricted Person”, “Sanctions”, “Sanctions Authority” or “Sanctions List”;
|
(f) |
a change to the preamble or to Clause 2, 3, 4, 5.1, 11.17, 11.18, 17, 19 or 30;
|
(g) |
a change to Clause 3 or this Clause 27;
|
(h) |
any release of, or material variation to, a Security Interest, guarantee, indemnity or subordination arrangement set out in a Finance Document; and
|
(i) |
any other change or matter as regards which this Agreement or another Finance Document expressly provides that each Lender's consent is required.
|
27.3 |
Exclusion of other or implied variations.
Except for a
document which satisfies the requirements of Clauses 27.1 and 27.2, no document, and no act, course of conduct, failure or neglect to act, delay or acquiescence on the part of the Creditor Parties or any of them (or any person acting on
behalf of
|
(a) |
a provision of this Agreement or another Finance Document; or
|
(b) |
an Event of Default; or
|
(c) |
a breach by the Borrower or any other Obligor 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,
|
27.4 |
Notification of Variation or Waiver.
No variation or
waiver may be made before the date falling ten (10) Business Days after the terms of that variation or waiver have been notified by the Agent to the Lenders. The Agent shall notify the Lenders reasonably promptly of any variations or
waivers proposed by the Borrower.
|
27.5 |
Variation or Waiver: FATCA.
Notwithstanding the
foregoing, if the Agent or a Lender reasonably believes that an amendment or waiver may constitute a “material modification” for the purposes of FATCA that may result (directly or indirectly) in a Party being required to make a FATCA
Deduction and the Agent or that Lender (as the case may be) notifies the Borrower and the Agent accordingly, that amendment or waiver may, subject to paragraph (b) below, not be effected without the consent of the Agent or that Lender
(as the case may be).
|
28 |
NOTICES
|
28.1 |
General.
Unless otherwise specifically provided, any
notice under or in connection with any Finance Document shall be given by letter or fax or electronic mail; and references in the Finance Documents to written notices, notices in writing and notices signed by particular persons shall be
construed accordingly.
|
28.2 |
Addresses for communications.
A notice shall be sent:
|
(a)
|
to the Borrower:
|
c/o Eurobulk Ltd.
4, Messogiou & Evropis Street
151 24, Maroussi
Athens, Greece
Fax No: +30 2111 804097
Email: [●]
Attn: Mr. Tassos Aslidis/Mr. George Kavalis;
|
(b)
|
to a Lender:
|
At the address below its name in
|
Schedule 1 or (as the case may require) in the relevant Transfer Certificate;
|
||
(c)
|
to the Arranger, Account Bank and Security Trustee:
|
EUROBANK ERGASIAS S.A.
83 Akti Miaouli & 1, Flessa Street
185 38 Piraeus
Greece
Fax No: +30 210 4587877
Email: ………………..;
|
(d)
|
to the Agent:
|
EUROBANK ERGASIAS S.A.
83 Akti Miaouli & 1, Flessa Street
185 38 Piraeus
Greece
Fax: +30 210 4587877
Email: …………………..
Attn: Mr S. Yagos
|
28.3 |
Effective date of notices.
Subject to Clauses 28.4 and
28.5:
|
(a) |
a notice which is delivered personally or posted shall be deemed to be served, and shall take effect, at the time when it is delivered;
|
(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;
|
(c) |
a notice which is sent by e-mail shall be deemed to be effective in accordance with paragraphs (c) and (d) of Clause 28.7.
|
28.4 |
Service outside business hours.
However, if under
Clause 28.3 a notice would be deemed to be served:
|
(a) |
on a day which is not a business day in the place of receipt; or
|
(b) |
on such a business day, but after 5 p.m. local time;
|
28.5 |
Illegible notices.
Clauses 28.3 and 28.4 do not apply
if the recipient of a notice notifies the sender within one hour after the time at which the notice would otherwise be deemed to be served that the notice has been received in a form which is illegible in a material respect.
|
28.6 |
Valid notices.
A notice under or in connection with a
Finance Document shall not be invalid by reason that its contents or the manner of serving it do not comply with the requirements of this Agreement or, where appropriate, any other Finance Document under which it is served if, in the
case of incorrect and/or incomplete contents, it should have been reasonably clear to the party on which the notice was served what the correct or missing particulars should have been.
|
28.7 |
Electronic communication.
|
(a) |
Any communication to be made between any two Parties under or in connection with the Finance Documents may be made by electronic mail or other electronic
means (including, without limitation, by way of posting to a secure website), if those two Parties:
|
|
(i) |
notify each other in writing of their electronic mail address and/or any other information required to enable the transmission of information by that means;
and
|
|
(ii) |
notify each other of any change to their respective addresses or any other such information supplied to them by not less than five 95) Business Day’s notice .
|
(b) |
Any such electronic communication as specified in paragraph (a) above to be made between an Obligor and the Agent or any other Creditor Party may only be made
in that way to the extent that those two Parties agree that, unless and until notified to the contrary, this is to be an accepted form of communication.
|
(c) |
Any such electronic communication as specified in paragraph (a) above made between any two Parties will be effective only when actually received (or made
available) in readable form and, in the case of any electronic communication made by a Party to the Agent or any other Creditor Party, only if it is addressed in such a manner as the Agent or such other Creditor Party shall specify for
this purpose.
|
(d) |
Any electronic communication which becomes effective, in accordance with paragraph (c) above, after 5.00 p.m. in the place in which the Party to whom the
relevant communication is sent or made available has its address for the purpose of this Agreement shall be deemed only to become effective on the following day.
|
(e) |
Any reference in a Finance Document to a communication being sent or received shall be construed to include that communication being made available in
accordance with this Clause 28.7.
|
28.8 |
English language.
Any notice under or in connection
with a Finance Document shall be in English.
|
28.9 |
Meaning of
“
notice
”
.
In this Clause “notice” includes any demand, consent,
authorisation, approval, instruction, waiver or other communication.
|
29 |
SUPPLEMENTAL
|
29.1 |
Rights cumulative, non-exclusive.
The rights and
remedies which the Finance Documents give to each Creditor Party are:
|
(a) |
cumulative;
|
(b) |
may be exercised as often as appears expedient; and
|
(c) |
shall not, unless a Finance Document explicitly and specifically states so, be taken to exclude or limit any right or remedy conferred by any law.
|
29.2 |
Severability of provisions.
If any provision of a
Finance Document is or subsequently becomes void, unenforceable or illegal, that shall not affect the validity, enforceability or legality of the other provisions of that Finance Document or of the provisions of any other Finance
Document.
|
29.3 |
Third party rights.
A person who is not a party to
this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Agreement.
|
29.4 |
Counterparts.
A Finance Document may be executed in
any number of counterparts.
|
29.5 |
PATRIOT Act Notice.
Each of the Agent and the Lenders
hereby notifies the Borrower that pursuant to the requirements of the PATRIOT Act and the policies and practices of the Agent and each Lender, the Agent and each of the Lenders is required to obtain, verify and record certain
information and documentation that identifies the Borrower and each other Obligor, which information includes the name and address of the Borrower and any other Obligor and such other information that will allow the Agent and each of
the Lenders to identify the Borrower and each other Obligor in accordance with the PATRIOT Act.
|
30 |
LAW AND JURISDICTION
|
30.1 |
English law.
This Agreement (and any non-contractual
obligations connected with it) shall be governed by, and construed in accordance with, English law.
|
30.2 |
Exclusive English jurisdiction.
Subject to Clause
30.3, the courts of England shall have exclusive jurisdiction to settle any disputes which may arise out of or in connection with this Agreement.
|
30.3 |
Choice of forum for the exclusive benefit of the Creditor
Parties.
Clause 30.2 is for the exclusive benefit of the Creditor Parties, each of which reserves the right:
|
(a) |
to commence proceedings in relation to any matter which arises out of or in connection with this Agreement in the courts of any country other than England and
which have or claim jurisdiction to that matter; and
|
(b) |
to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in England or without commencing
proceedings in England.
|
30.4 |
Service of process.
|
(a) |
Without prejudice to any other mode of service allowed under any relevant law, the Borrower (and the Borrower shall procure that each other Obligor, other
than an Obligor incorporated in England and Wales):
|
|
(i) |
irrevocably appoints Hill Dickinson at The Broadgate Tower, 20 Primrose Street, London, EC2A 2EW, England (Tel.: +44 (0)20 7283 9033, fax: +44 (0)20 7283
1144, email: ……………….., attention of: Mr. Patrick Hawkins) as its agent for service of process in relation to any proceedings before the English courts in connection with this Agreement and any Finance Document; and
|
|
(ii) |
agrees that (on the understanding that process has first duly been served upon the process agent) failure by a process agent to notify the Borrower or the
relevant Obligor 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 or terminates its appointment as
agent for service of process, the Borrower must immediately (and in any event within five (5) days of such event taking place) appoint another agent on terms reasonably acceptable to the Agent. Failing this, the Agent may appoint
another agent for this purpose and will duly notify the Borrower on the contact details of the same.
|
30.5 |
Creditor Party rights unaffected.
Nothing in this
Clause 30 shall exclude or limit any right which any Creditor Party may have (whether under the law of any country, an international convention or otherwise) with regard to the bringing of proceedings, the service of process, the
recognition or enforcement of a judgment or any similar or related matter in any jurisdiction.
|
30.6 |
Meaning of “proceedings”.
In this Clause 30, “
proceedings
” means proceedings of any kind, including an application for a provisional or protective measure.
|
Name of Lender
|
Lending Office
and
contact details
|
Total Commitments
(US Dollars)
|
Eurobank Ergasias S.A.
|
Lending office
83 Akti Miaouli & 1, Flessa Street,185 38 Piraeus, Greece
Contact details
83 Akti Miaouli & 1, Flessa Street,185 38 Piraeus, Greece
Fax No: +30 210 4587877
Email: ………..
Attn: Loans Administration
|
45,000,000
|
Name of Ship
|
AEGEAN EXPRESS
|
Description
|
Container
|
Owner
|
JONATHAN JOHN SHIPPING LTD
|
Year of Built
|
1997
|
Flag State
|
Panama
|
IMO Number
|
9138161
|
Register/Official Number
|
25186-98-F
|
Ship Commitment
|
US$2,375,000
|
Name of Ship
|
JOANNA
|
Description
|
Container
|
Owner
|
JOANNA MARITIME LTD
|
Year of Built
|
1999
|
Flag State
|
Liberia
|
IMO Number
|
9204477
|
Register/Official Number
|
16118
|
Ship Commitment
|
US$3,250,000
|
Name of Ship
|
KUO HSIUNG
|
Description
|
Container
|
Owner
|
ALLENDALE INVESTMENTS S.A.
|
Year of Built
|
1993
|
Flag State
|
Panama
|
IMO Number
|
9055448
|
Register/Official Number
|
20825-93-F
|
Ship Commitment
|
[US$1,875,000
|
Name of Ship
|
MANOLIS P.
|
Description
|
Container
|
Owner
|
MANOLIS SHIPPING LIMITED
|
Year of Built
|
1995
|
Flag State
|
Marshall Islands
|
IMO Number
|
9101493
|
Register/Official Number
|
2849
|
Ship Commitment
|
US$2,375,000
|
Name of Ship
|
NINOS
|
Description
|
Container
|
Owner
|
ALTERWALL BUSINESS INC.
|
Year of Built
|
1990
|
Flag State
|
Panama
|
IMO Number
|
8909082
|
Register/Official Number
|
27893-01-F
|
Ship Commitment
|
US$1,500,000
|
Name of Ship
|
EM ATHENS
|
Description
|
Container
|
Owner
|
ATHENS SHIPPING LTD
|
Year of Built
|
2000
|
Flag State
|
Marshall Islands
|
IMO Number
|
9203538
|
Register/Official Number
|
4019
|
Ship Commitment
|
US$4,250,000
|
Name of Ship
|
EM OINOUSSES
|
Description
|
Container
|
Owner
|
OINOUSSES NAVIGATION LTD
|
Year of Built
|
2000
|
Flag State
|
Marshall Islands
|
IMO Number
|
9203514
|
Register/Official Number
|
4018
|
Ship Commitment
|
US$4,250,000
|
Name of Ship
|
EM CORFU
|
Description
|
Container
|
Owner
|
CORFU NAVIGATION LTD
|
Year of Built
|
2001
|
Flag State
|
Marshall Islands
|
IMO Number
|
9231494
|
Register/Official Number
|
7209
|
Ship Commitment
|
US$4,750,000
|
Name of Ship
|
AKINADA BRIDGE
|
Description
|
Container
|
Owner
|
BRIDGE SHIPPING LTD
|
Year of Built
|
2001
|
Flag State
|
Panama
|
IMO Number
|
9224532
|
Register/Official Number
|
21874-01-D
|
Ship Commitment
|
US$5,375,000
|
To:
|
EUROBANK ERGASIAS S.A.
83 Akti Miaouli & 1, Flessa Street
185 38 Piraeus
Greece
|
|
Attention:
|
[Loans Administration]
|
[
●
]
|
1. |
We refer to the facility agreement dated [●]
2018 (the “
Facility Agreement
”) and made between (1) ourselves as Borrower, (2) the Lenders referred to therein and (3) yourselves as Arranger, Account Bank, Agent and
Security Trustee in connection with a reducing revolving credit facility of up to $45,000,000. Terms defined in the Facility Agreement have their defined meanings when used in this Drawdown Notice.
|
2. |
We request to borrow [Advance(s)] as follows:
|
(a) |
Amount of [Advance(s)] [
●
]: $
|
(b) |
Drawdown Date: [●]
;
|
(c) |
Duration of the first Interest Period shall be [●]
months;
|
(d) |
Payment instructions: account of [●]
and numbered [●]
held with [●]
of [●]
.
|
3. |
We represent and warrant that:
|
(a) |
the representations and warranties in Clause 10 of the Facility Agreement are true and correct at the date hereof as if made with respect to the facts and
circumstances existing at this date;
|
(b) |
there has been no Material Adverse Change since the date of the accounts referred to in Clause 11.6 of the Facility Agreement;
|
(c) |
the said Advance will be used for our own benefit and under our full responsibility and exclusively for the purposes specified in the preamble of the Facility
Agreement; and
|
(d) |
no Event of Default or Potential Event of Default has occurred or will result from the borrowing of the said Advance(s) [●]
.
|
4. |
This notice cannot be revoked without the prior consent of the Majority Lenders.
|
5. |
This notice is governed by English law.
|
1. |
A duly executed original of this Agreement, the Agency and Trust Deed, the Guarantee of each Existing Owner and the Account Pledges.
|
2. |
Copies of the certificate of incorporation and constitutional documents of the Borrower, each Existing Owner and the Approved Manager together with up to date
evidence of their good standing.
|
3. |
Originals of resolutions of the directors of the Borrower and originals of the relevant minutes containing the resolutions of the directors and (if required)
shareholders of each Existing Owner and the Approved Manager authorising the execution of each of the Finance Documents referred to at 1 above to which each of such entities is a party and (in the case of the Borrower) authorising named
officers to give the Drawdown Notices and any other notices under this Agreement.
|
4. |
The original of any power of attorney under which any Finance Document referred to at 1 above is executed on behalf of the Borrower, each Existing Owner and
the Approved Manager.
|
5. |
Copies of all consents which the Borrower, each Existing Owner and the Approved Manager, requires to enter into, or make any payment under, any Finance
Document.
|
6. |
All documentation required by the Agent in respect of the Borrower, each Existing Owner and the Approved Manager, pursuant to any Lender’s “Know your
customer” requirements, together with such other documents or evidence as such Lender may reasonably require with respect to money laundering regulations.
|
7. |
If applicable, a copy of any Charter (and all addenda thereto), together with evidence of authorisation with respect to the execution thereof by the relevant
Existing Owner and by the Charterer.
|
8. |
Documentary evidence that the agent for service of process named in Clause 30 of this Agreement has accepted its appointment.
|
9. |
Favourable legal opinions from lawyers appointed by the Agent on such matters concerning English law or the laws of Liberia and/or the Marshall Islands and/or
of Panama and such other Relevant Jurisdiction as the Agent may require.
|
10. |
A certificate in a form and substance satisfactory to the Lenders confirming the legal ownership and the beneficial ownership of the shares in the Existing
Owners, in a form and substance satisfactory to the Agent in its sole discretion.
|
11. |
The originals of any mandates or other documents required in connection with the opening and operation of any Account.
|
12. |
An up to date certificate of ownership and encumbrances (or equivalent) issued by the relevant authorities and showing each Existing Ship registered in the
ownership of the relevant Existing Owner and subject only to a mortgage to secure the Existing Indebtedness.
|
13. |
If the Agent so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the
Agent.
|
1. |
Evidence in all respects satisfactory to the Agent that (a) the total sum of the Existing Indebtedness has been repaid in full and (b) the Security Interests
created under the Existing Finance Documents have been discharged and released.
|
2. |
In respect of each Existing Ship, duly executed originals of:
|
(a) |
the Mortgage;
|
(b) |
the General Assignment;
|
(c) |
the Approved Manager’s Undertaking-Assignment;
|
(d) |
the Undertaking-Assignment;
|
(e) |
if applicable, a Charter Assignment,
|
3. |
Documentary evidence that:
|
(a) |
each Existing Ship is on the Drawdown Date of the Advance related to such Ship definitively and permanently registered in the name of the relevant Owner under
the Approved Flag;
|
(b) |
each Existing Ship is on the Drawdown Date of the Advance related to such Ship in the absolute and unencumbered ownership of the relevant Owner save as
contemplated by the Finance Documents related to such Ship;
|
(c) |
each Existing Ship is on the Drawdown Date of the Advance related to such Ship classed with the highest available class with Lloyds Register of Ships (or IACS
equivalent) free of all overdue recommendations and conditions of such classification society affecting Class;
|
(d) |
the Mortgage in respect of an Existing Ship has been executed by the relevant Owner and has been, or will immediately following drawdown of the relevant
Advance be, registered against that Ship as a valid first priority ship mortgage in accordance with the laws of the Approved Flag State;
|
(e) |
each Existing Ship is on the Drawdown Date of the Advance related to such Ship insured in accordance with the provisions of this Agreement and all
requirements therein in respect of insurances shall have been complied with; and
|
(f) |
where any Existing Ship is subject to a Charter, a signed copy of that Charter and evidence of the due execution thereof by the parties thereto and acceptance
of the relevant Ship thereunder.
|
4. |
Documents establishing that each Existing Ship is, as from the Drawdown Date of the Advance related to such Ship, managed by the Approved Manager on terms
acceptable to the Agent, together with:
|
(a) |
a copy of the ship management agreement for that Ship;
|
(b) |
copies of the Document of Compliance and Safety Management Certificate and ISSC;
|
(c) |
copies of such other ISM Code or ISPS Code documentation as the Agent may by written notice to the Borrower or the relevant Owner have requested not later
than 2 days before the relevant Drawdown Date, certified as true and complete in all material respects by the Borrower or the relevant Owner and the relevant Approved Manager;
|
5. |
A valuation of each Existing Ship addressed to the Agent (at the Borrower’s or the relevant Owner’s expense) prepared in accordance with Clause 15.4 of this
Agreement and not older than thirty (30) days prior to the Drawdown Date of the relevant Advance, in a form satisfactory to the Agent.
|
6. |
Evidence that the sum of $5,000,000 is standing to the credit of the Cash Collateral Deposit Account pursuant to the provisions of Clause 12.5 of this
Agreement.
|
7. |
A favourable opinion from an independent insurance consultant appointed by the Agent on such matters relating to the insurances for each Existing Ship as the
Agent may require, and at the cost and expense of the Borrower.
|
8. |
Favourable legal opinions from lawyers appointed by the Lenders on such matters concerning the laws of England, the laws of Liberia, the laws of the Marshall
Islands, the laws of Panama, the laws of the Approved Flag State (if different) and such other Relevant Jurisdiction as the Agent may require.
|
9. |
Receipt by the Agent of the fees due under Clause 20.1 (a) and (b) of this Agreement and payment of the expenses referred to in Clause 20.2.
|
10. |
A signed confirmation in writing from the Borrower and/or the relevant Owner, confirming that all trading certificates for each Existing Ship are up to date
and in full force.
|
1. |
Up to date evidence of the good standing and an original certificate of a duly authorised officer of the Borrower, each Existing Owner and the Approved
Manager, certifying that:
|
(a) |
each copy document relating to it specified in Schedule 4, Part A, remains correct, complete and in full force and effect at a date not earlier than the
Drawdown Date related to such Advance; and
|
(b) |
each copy document relating to it specified in Schedule 4, Part B remains correct, complete and in full force and effect at a date not earlier than the
Drawdown Date related to such Advance.
|
2. |
All documents or equivalent to those referred to at paragraphs 2-11 of Schedule 4, Part A in respect of such Ship and the relevant Owner.
|
3. |
If the assets of an Owner of any such Ship is subject to a security interest in favour of a party other than a Creditor Party, immediately prior to the
Drawdown Date of the relevant Advance, copies of the duly executed deeds of release and reassignment (and notices of reassignment) in relation to such existing security interest in form and substance acceptable to the Agent or, in the
cases where this is not possible, an up to date certificate of ownership and encumbrances (or equivalent) issued by the relevant authorities and showing such Ship registered in the ownership of the relevant Owner and subject only to a
mortgage to secure any indebtedness in favour of such party not being a Creditor Party, accompanied by a letter of undertaking in form and substance acceptable to the Agent duly executed by such party not being a Creditor Party to
provide such deeds of release and reassignment immediately after the Drawdown Date of the relevant Advance.
|
4. |
In respect of any New Ship and/or (as the case may be) any Substitute Ship to be acquired, the following delivery documents pursuant to the relevant MOA:
|
5. |
In respect of any such Ship, duly executed originals of:
|
(b) |
the Mortgage;
|
(c) |
the General Assignment;
|
(d) |
the Approved Manager’s Undertaking-Assignment;
|
(e) |
the Undertaking-Assignment;
|
(f) |
if applicable, a Charter Assignment,
|
(a) |
a Ship will on the Drawdown Date of the Advance related to such Ship be definitively and permanently registered in the name of the relevant Owner under the
Approved Flag;
|
(b) |
a Ship will on the Drawdown Date of the Advance related to such Ship be in the absolute and unencumbered ownership of the relevant Owner save as contemplated
by the Finance Documents;
|
(c) |
a Ship will on the Drawdown Date of the Advance related to such Ship be classed with the highest available class with Lloyds Register of Ships (or IACS
equivalent) free of all overdue recommendations and conditions of such classification society affecting Class;
|
(d) |
the Mortgage in respect of a Ship has been executed by the relevant Owner and has been, or will immediately following drawdown of the relevant Advance be,
registered against that Ship as a valid first priority ship mortgage in accordance with the laws of the Approved Flag State;
|
(e) |
a Ship will on the Drawdown Date of the Advance related to such Ship be insured in accordance with the provisions of this Agreement and all requirements
therein in respect of insurances shall have been complied with; and
|
(f) |
where a Ship is subject to a Charter on the Drawdown Date of the Advance related to such Ship, a signed copy of that Charter and evidence of the due execution
thereof by the parties thereto and acceptance of the relevant Ship thereunder.
|
7. |
Documents establishing that a Ship will, as from the Drawdown Date of the Advance related to such Ship, be managed by the Approved Manager on terms acceptable
to the Agent, together with:
|
(a) |
a copy of the ship management agreement for that Ship;
|
(b) |
copies of the Document of Compliance and Safety Management Certificate and ISSC;
|
(c) |
copies of such other ISM Code or ISPS Code documentation as the Agent may by written notice to the Borrower or the relevant Owner have requested not later
than 2 days before the relevant Drawdown Date, certified as true
|
8. |
A valuation of a Ship addressed to the Agent (at the Borrower’s or the relevant Owner’s expense) prepared in accordance with Clause 15.4 of this Agreement and
not older than thirty (30) days prior to the Drawdown Date of the relevant Advance, in a form satisfactory to the Agent.
|
9. |
Evidence that the sum of $5,000,000 continues standing to the credit of the Cash Collateral Deposit Account pursuant to the provisions of Clause 12.5 of this
Agreement.
|
10. |
A favourable opinion from an independent insurance consultant appointed by the Agent on such matters relating to the insurances for the relevant Ship as the
Agent may require, and at the cost and expense of the Borrower.
|
11. |
Favourable legal opinions from lawyers appointed by the Lenders on such matters concerning the laws of Liberia, the laws of the Marshall Islands, the laws of
Panama, the laws of the Approved Flag State (if different) and such other Relevant Jurisdictions as the Lenders may require.
|
12. |
A signed confirmation in writing from the Borrower and/or the relevant Owner, confirming that all trading certificates for each Existing Ship are up to date
and in full force.
|
13. |
Receipt by the Agent of the fees due under Clause 20.1 (a) and (b) of this Agreement and payment of the expenses referred to in Clause 20.2.
|
14. |
In the event that an Advance is drawn down following an extension of the Drawdown Period granted in accordance with Clause 4.8, receipt by the Agent of the
fee due under Clause 20.1 (d) of this Agreement and payment of the expenses referred to in Clause 20.2 on or before the relevant Drawdown Date.
|
15. |
Receipt by the Agent of the fee due under Clause 20.1 (c) of this Agreement and payment of the expenses referred to in Clause 20.2 on or before the date on
which any amounts prepaid under an Advance are redrawn for the purposes of Clause 8.11.
|
(1) |
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 Creditor Parties.
|
(2) |
Service of notices and acknowledgements of notices to the
Charterer.
Service of all notices of assignment and/or charge given pursuant to any Security Documents by the Agent pursuant to Part A or Part B or Part C of this Schedule 4 and acknowledgement by the Charterer of any notice
of assignment executed in connection with a Charter Assignment, in any case provision of same is not delayed or denied by the Charterer.
|
(3) |
Legal opinions.
Such of the legal opinions specified
in Part B and Part C of this Schedule 4 as have not already been provided to the Agent.
|
To:
|
Eurobank Ergasias S.A.
83, Akti Miaouli & 1, Flessa Street
185 38 Piraeus
Greece
|
|
Attn:
|
Loans Administration
|
[date]
|
(a) |
a minimum cash balance of $5,000,0000 was maintained on the Cash Collateral Deposit Account (free of any Security Interest other than the Account Pledge)
throughout the [12] months ending as at the date to which the enclosed accounts are prepared;
|
(b) |
the asset cover ratio under Clause 15.1 of the Facility Agreement is [●]
%.
|
To: |
EUROBANK ERGASIAS S.A. for itself and for and on behalf of the Borrower, each other Obligor, the Arranger, the Account Bank, the Security Trustee and each
Lender, as defined in the Facility Agreement referred to below.
|
1. |
In this Certificate:
|
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 [transfers by novation to the Transferee all rights, interests and obligations]
or upon transfer of rights only
[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
Facility Agreement and every other Finance Document in relation to [●] per cent of the Contribution outstanding to the Transferor (or its predecessors in title) which is set out below:
|
Contribution
|
Amount transferred
|
5. |
By virtue of this Transfer Certificate and Clause 26 of the Facility Agreement, the Transferor is discharged [entirely from its Commitment which amounts to
$[●]] [from [●] per cent. of its Commitment, which percentage represents $[●]] and the Transferee acquires a Commitment of $[●].
|
6. |
The Transferee undertakes with the Transferor and each of the Relevant Parties that the Transferee will observe and perform all the obligations under the
Finance Documents which Clause 26 of the Facility Agreement provides
|
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 Facility Agreement.
|
(a) |
warrants to the Transferee and each Relevant Party:
|
|
(i) |
that 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) |
that 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 [transfer]
[assignment] in paragraph 4 above;
|
(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.
|
(a) |
confirms that it has received a copy of the Facility Agreement and each other Finance Document;
|
(b) |
agrees that it will have no rights of recourse on any ground against either the Transferor, the Agent, the Arranger, the Account Bank, the Security Trustee or
any Lender in the event that:
|
|
(i) |
the Finance Documents prove to be invalid or ineffective,
|
|
(ii) |
the Borrower or any other Obligor fails to observe or perform its obligations, or to discharge its liabilities, under 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 any other Obligor under the Finance Documents;
|
(c) |
agrees that it will have no rights of recourse on any ground against the Agent, the Arranger, the Account Bank, the Security Trustee or any Lender in the
event that this Certificate proves to be invalid or ineffective;
|
(d) |
warrants to the Transferor and each Relevant Party (i) that it has full capacity to enter into this transaction and has taken all corporate action and
obtained all official consents which it needs to take or obtain in connection with this
|
(e) |
confirms the accuracy of the administrative details set out below regarding the Transferee; and
|
(f) |
agrees to be responsible for all legal and other costs (including without limitation, notarial fees, breakage costs and, if applicable, VAT) incurred by the
Transferor with respect to documenting the transfer and perfecting any security.
|
10. |
The Transferor and the Transferee each undertake with the Agent and the Security Trustee severally, on demand, fully to indemnify the Agent and/or the
Security Trustee in respect of any claim, proceeding, liability or expense (including all legal expenses) which they or either of them may incur in connection with this Certificate or any matter arising out of it, except such as are
shown to have been mainly and directly caused by the gross and culpable negligence or dishonesty of the Agent's or the Security Trustee's own officers or employees.
|
11. |
The Transferee shall repay to the Transferor on demand so much of any sum paid by the Transferor under paragraph 10 above as exceeds one-half of the amount
demanded by the Agent or the Security Trustee in respect of a claim, proceeding, liability or expense which was not reasonably foreseeable at the date of this Certificate; but nothing in this paragraph shall affect the liability of each
of the Transferor and the Transferee to the Agent or the Security Trustee for the full amount demanded by it.
|
[Name of Transferor]
|
[Name of Transferee]
|
By: [●]
|
By: [●]
|
Date: [●]
|
Date: [●]
|
Note : |
This Transfer Certificate alone may not be sufficient to transfer a proportionate share of the Transferor's interest in the security constituted by the
Finance Documents in the Transferor's or Transferee's jurisdiction. It is the responsibility of each Lender to ascertain whether any other documents are required for this purpose.
|
Signed by
Stefania Karmiri
for and on behalf of
EUROSEAS LTD.
of the Marshall Islands
in the presence of
|
)
)
)
)
)
|
/s/Stefania Karmiri
|
Witness: |
/s/Avramidou Aikaterini Maria
|
Name: |
Avramidou Aikaterini Maria
|
Address: |
13, Defteras Merarchias Street
Piraeus, Greece |
Occupation: |
Attorney-at-law
|
Signed by
Stavros Yagos
and
for and on behalf of
EUROBANK ERGASIAS S.A.
in the presence of
|
)
)
)
)
)
|
/s/Stavros Yagos
|
Witness: |
/s/Avramidou Aikaterini Maria
|
Name: |
Avramidou Aikaterini Maria
|
Address: |
13, Defteras Merarchias Street
Piraeus, Greece |
Occupation: |
Attorney-at-law
|
Signed by
Stavros Yagos
and
for and on behalf of
EUROBANK ERGASIAS S.A.
in the presence of
|
)
)
)
)
)
|
/s/Stavros Yagos
|
Witness: |
/s/Avramidou Aikaterini Maria
|
Name: |
Avramidou Aikaterini Maria
|
Address: |
13, Defteras Merarchias Street
Piraeus, Greece |
Occupation: |
Attorney-at-law
|
Signed by
Stavros Yagos
and
for and on behalf of
EUROBANK ERGASIAS S.A.
in the presence of
|
)
)
)
)
)
|
/s/Stavros Yagos
|
Witness: |
/s/Avramidou Aikaterini Maria
|
Name: |
Avramidou Aikaterini Maria
|
Address: |
13, Defteras Merarchias Street
Piraeus, Greece |
Occupation: |
Attorney-at-law
|
Signed by
Stavros Yagos
and
for and on behalf of
EUROBANK ERGASIAS S.A.
in the presence of
|
)
)
)
)
)
|
/s/Stavros Yagos
|
Witness: |
/s/Avramidou Aikaterini Maria
|
Name: |
Avramidou Aikaterini Maria
|
Address: |
13, Defteras Merarchias Street
Piraeus, Greece |
Occupation: |
Attorney-at-law
|
Signed by
Stavros Yagos
and
for and on behalf of
EUROBANK ERGASIAS S.A.
in the presence of
|
)
)
)
)
)
|
/s/Stavros Yagos
|
Witness: |
/s/Avramidou Aikaterini Maria
|
Name: |
Avramidou Aikaterini Maria
|
Address: |
13, Defteras Merarchias Street
Piraeus, Greece |
Occupation: |
Attorney-at-law
|
Subsidiary
|
Country of Incorporation
|
Xingang Shipping Ltd.
|
Liberia
|
Saf-Concord Shipping Ltd.
|
Liberia
|
Eleni Shipping Ltd.
|
Liberia
|
Aggeliki Shipping Ltd.
|
Liberia
|
Joanna Maritime Ltd.
|
Liberia
|
Gregos Shipping Ltd.
|
Liberia
|
Diana Trading Ltd.
|
Marshall Islands
|
Xenia International Corp.
|
Marshall Islands
|
Prospero Maritime Inc.
|
Marshall Islands
|
Manolis Shipping Ltd.
|
Marshall Islands
|
Eternity Shipping Company
|
Marshall Islands
|
Tiger Navigation Corp.
|
Marshall Islands
|
Noumea Shipping Ltd.
|
Marshall Islands
|
Johnathan John Shipping Ltd.
|
Marshall Islands
|
Hull 2 Shipping Ltd.
|
Marshall Islands
|
Athens Shipping Ltd.
|
Marshall Islands
|
Corfu Navigation Ltd.
|
Marshall Islands
|
Oinousses Navigation Ltd.
|
Marshall Islands
|
Bridge Shipping Ltd.
|
Marshall Islands
|
Eurocon Ltd.
|
Marshall Islands
|
Allendale Investment S.A.
|
Panama
|
Alterwall Business Inc.
|
Panama
|
Pilory Associates Corp.
|
Panama
|
|
a) |
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that
material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b) |
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c) |
evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d) |
disclosed in this report any change in the Company's internal control over financial reporting that occurred during the period covered by the annual report
that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and
|
|
a) |
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to
adversely affect the Company's ability to record, process, summarize and report financial information; and
|
|
b) |
any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial
reporting.
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the Company's internal control over financial reporting that occurred during the period covered
by the annual report that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the Company's ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal
control over financial reporting.
|
|
(1) |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
(1) |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|