[ ]
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REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
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OR
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[X]
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2019
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OR
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[ ]
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from _________________ to _________________
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OR
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[ ]
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SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Date of event requiring this shell company report _________________
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TOP SHIPS INC.
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(Exact name of Registrant as specified in its charter)
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(Translation of Registrant's name into English)
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Republic of the Marshall Islands
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(Jurisdiction of incorporation or organization)
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1 Vasilisis Sofias and Megalou Alexandrou Str, 15124 Maroussi, Greece
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(Address of principal executive offices)
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Alexandros Tsirikos, (Tel) +30 210 812 8107, info@topships.org
1 Vasilisis Sofias and Megalou Alexandrou Str, 15124 Maroussi, Greece
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(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
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Title of each class
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Trading Symbol(s)
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Name of each exchange
on which registered
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Common Stock, par value $0.01 per share
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TOPS
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Nasdaq Capital Market
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Preferred Stock Purchase Rights
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Nasdaq Capital Market
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NONE
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(Title of class)
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NONE
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(Title of class)
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Yes
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No
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X
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Yes
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No
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X
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Yes
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X
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No
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Yes
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X
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No
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Large accelerated filer ☐
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Accelerated filer ☐
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Non-accelerated filer ☒
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Emerging growth company ☐
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X
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U.S. GAAP
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International Financial Reporting Standards as issued by the International Accounting Standards Board
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Other
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________ Item 17
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________ Item 18
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Yes
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No
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X
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Yes
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No
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X
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Page
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PART I
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3
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ITEM 1.
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IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
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3
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ITEM 2.
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OFFER STATISTICS AND EXPECTED TIMETABLE
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3
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ITEM 3.
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KEY INFORMATION
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3
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ITEM 4.
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INFORMATION ON THE COMPANY
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31
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ITEM 4A.
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UNRESOLVED STAFF COMMENTS
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48
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ITEM 5.
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OPERATING AND FINANCIAL REVIEW AND PROSPECTS
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48
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ITEM 6.
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DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
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64
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ITEM 7.
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MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
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67
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ITEM 8.
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FINANCIAL INFORMATION.
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69
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ITEM 9.
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THE OFFER AND LISTING.
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70
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ITEM 10.
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ADDITIONAL INFORMATION
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71
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ITEM 11.
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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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87
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ITEM 12.
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DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
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88
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PART II
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88
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ITEM 13.
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DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
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88
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ITEM 14.
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MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
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88
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ITEM 15.
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CONTROLS AND PROCEDURES
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88
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ITEM 16A.
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AUDIT COMMITTEE FINANCIAL EXPERT
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90
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ITEM 16B.
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CODE OF ETHICS
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90
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ITEM 16C.
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PRINCIPAL AUDITOR FEES AND SERVICES
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90
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ITEM 16D.
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EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
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90
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ITEM 16D.
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PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
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90
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ITEM 16F.
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CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT
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90
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ITEM 16G.
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CORPORATE GOVERNANCE
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90
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ITEM 16H.
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MINE SAFETY DISCLOSURE
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92
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PART III
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92
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ITEM 17.
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FINANCIAL STATEMENTS
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92
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ITEM 18.
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FINANCIAL STATEMENTS
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92
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ITEM 19.
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EXHIBITS
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92
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• |
our ability to maintain or develop new and existing customer relationships with major refined product importers and exporters, major crude oil companies and major commodity traders, including our ability to enter into long-term
charters for our vessels;
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• |
our future operating and financial results;
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• |
our future vessel acquisitions, our business strategy and expected capital spending or operating expenses, including any dry-docking and insurance
costs;
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• |
our financial condition and liquidity, including our ability to obtain financing in the future to fund capital expenditures, acquisitions and other general corporate activities;
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• |
oil and chemical tanker industry trends, including charter rates and vessel values and factors affecting vessel supply and demand;
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• |
our ability to take delivery of, integrate into our fleet, and employ any newbuildings we may order in the future and the ability of shipyards to deliver vessels on a timely basis;
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• |
the aging of our vessels and resultant increases in operation and dry-docking costs;
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• |
the ability of our vessels to pass classification inspections and vetting inspections by oil majors and big chemical corporations;
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• |
significant changes in vessel performance, including increased vessel breakdowns;
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• |
the creditworthiness of our charterers and the ability of our contract counterparties to fulfill their obligations to us;
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• |
our ability to repay outstanding indebtedness, to obtain additional financing and to obtain replacement charters for our vessels, in each case, at commercially acceptable rates or at all;
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• |
changes to governmental rules and regulations or actions taken by regulatory authorities and the expected costs thereof;
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• |
our ability to comply with additional costs and risks related to our environmental, social and governance policies;
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• |
potential liability from litigation and our vessel operations, including discharge of pollutants;
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• |
changes in general economic and business conditions;
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• |
general domestic and international political conditions, potential disruption of shipping routes due to accidents, political events, including "trade wars," piracy or acts by terrorists;
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• |
changes in production of or demand for oil and petroleum products and chemicals, either globally or in particular regions;
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• |
the strength of world economies and currencies, including fluctuations in charterhire rates and vessel values;
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• |
potential liability from future litigation and potential costs due to any environmental damage and vessel collisions;
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• |
the length and severity of the recent coronavirus (COVID-19) outbreak and its impact on the demand for commercial seaborne transportation and the condition to the financial markets; and
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• |
and other important factors described from time to time in the reports filed by us with the U.S. Securities and Exchange Commission, or the SEC.
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ITEM 1. |
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
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ITEM 2. |
OFFER STATISTICS AND EXPECTED TIMETABLE
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ITEM 3. |
KEY INFORMATION
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A. |
Selected Financial Data
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U.S. Dollars in thousands, except per share data
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||||||||||||||||||||
STATEMENT OF COMPREHENSIVE (LOSS)/INCOME
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2015
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2016
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2017
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2018
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2019
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|||||||||||||||
Time charter revenues
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13,075
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28,433
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39,363
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39,442
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61,695
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|||||||||||||||
Time charter revenues from related parties
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-
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-
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-
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1,606
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1,311
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Voyage charter revenue
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-
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-
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-
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-
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3,082
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|||||||||||||||
Total charter revenue
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13,075
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28,433
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39,363
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41,048
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66,088
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|||||||||||||||
Voyage expenses
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370
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736
|
999
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1,020
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3,038
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|||||||||||||||
Operating lease expense1
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-
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-
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-
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-
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7,054
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|||||||||||||||
Bareboat charter hire expense1
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5,274
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6,299
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6,282
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6,282
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-
|
|||||||||||||||
Amortization of prepaid bareboat charter hire1
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1,431
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1,577
|
1,657
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1,657
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-
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|||||||||||||||
Vessel operating expenses
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4,789
|
9,913
|
13,444
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14,826
|
22,786
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|||||||||||||||
Dry-docking costs
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-
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-
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-
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-
|
399
|
|||||||||||||||
Management fees-related parties
|
1,621
|
1,824
|
4,730
|
7,765
|
2,443
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|||||||||||||||
General and administrative expenses
|
2,983
|
2,906
|
5,805
|
6,997
|
1,730
|
|||||||||||||||
Other operating (income)/loss
|
274
|
(3,137
|
)
|
(914
|
)
|
-
|
-
|
|||||||||||||
Vessel depreciation
|
668
|
3,467
|
5,744
|
6,390
|
12,392
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|||||||||||||||
Impairment on vessels
|
3,081
|
-
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-
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-
|
12,310
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|||||||||||||||
Operating (loss)/income
|
(7,416
|
)
|
4,848
|
1,616
|
(3,889
|
)
|
3,936
|
|||||||||||||
Interest and finance costs
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(719
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)
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(3,093
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)
|
(15,793
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)
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(9,662
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)
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(18,077
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)
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(Loss)/gain on derivative financial instruments
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(392
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)
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(698
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)
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(301
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)
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1,821
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1,601
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||||||||||||
Interest income
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-
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-
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13
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130
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133
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|||||||||||||||
Equity (losses)/gains on investments
|
-
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-
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(27
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)
|
291
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778
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||||||||||||||
Other (expense)/income, net
|
20
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(5
|
)
|
1,120
|
180
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-
|
||||||||||||||
Impairment on unconsolidated joint ventures
|
-
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-
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-
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-
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(3,144
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)
|
||||||||||||||
Net (loss)/income and comprehensive (loss)/income
|
(8,507
|
)
|
1,052
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(13,372
|
)
|
(11,129
|
)
|
(14,773
|
)
|
|||||||||||
Deemed dividend for beneficial conversion feature of Series B & E convertible preferred stock
|
-
|
(1, 403
|
)
|
-
|
-
|
(9,339
|
)
|
|||||||||||||
Deemed dividend equivalents on outstanding Series E Preferred Shares related to redemption value
|
-
|
-
|
-
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-
|
(2,359
|
)
|
||||||||||||||
Series E Preferred Shares Dividend
|
-
|
-
|
-
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-
|
(2,650
|
)
|
||||||||||||||
Deemed dividend on Series E Preferred Shares realized redemptions
|
-
|
-
|
-
|
-
|
(1,868
|
)
|
||||||||||||||
Net loss attributable to common shareholders
|
(8,507
|
)
|
(351
|
)
|
(13,372
|
)
|
(11,129
|
)
|
(30,985
|
)
|
||||||||||
Attributable to:
|
||||||||||||||||||||
Common stock holders
|
(8,507
|
)
|
(351
|
)
|
(13,404
|
)
|
(11,134
|
)
|
(30,985
|
)
|
||||||||||
Non-controlling interests
|
-
|
-
|
32
|
5
|
-
|
|||||||||||||||
Loss per share, basic
|
$
|
(15,467,280
|
)
|
$
|
(319,100
|
)
|
$
|
(251
|
)
|
$
|
(12.20
|
)
|
$
|
(10.58
|
)
|
|||||
Loss per share, diluted
|
$
|
(15,467,280
|
)
|
$
|
(319,100
|
)
|
$
|
(251
|
)
|
$
|
(12.20
|
)
|
$
|
(10.58
|
)
|
|||||
Weighted average common shares outstanding, basic
|
-
|
1
|
53,169
|
909,072
|
2,927,608
|
|||||||||||||||
Weighted average common shares outstanding, diluted
|
-
|
1
|
53,169
|
909,072
|
2,927,608
|
|||||||||||||||
Other comprehensive loss
|
||||||||||||||||||||
Effective portion of changes in fair value of interest swap contracts
|
-
|
-
|
-
|
-
|
(1,361
|
)
|
||||||||||||||
Total other comprehensive loss
|
(8,507
|
)
|
(351
|
)
|
(13,372
|
)
|
(11,129
|
)
|
(32,346
|
)
|
||||||||||
Attributable to:
|
||||||||||||||||||||
Common stock holders
|
(8,507
|
)
|
(351
|
)
|
(13,404
|
)
|
(11,134
|
)
|
(32,346
|
)
|
||||||||||
Non-controlling interests
|
-
|
-
|
32
|
5
|
-
|
|||||||||||||||
U.S. dollars in thousands, unless otherwise stated
|
2015
|
2016
|
2017
|
2018
|
2019
|
|||||||||||||||
BALANCE SHEET DATA
|
||||||||||||||||||||
Current assets
|
5,269
|
4,541
|
29,055
|
5,288
|
50,742
|
|||||||||||||||
Total assets
|
74,006
|
143,317
|
220,448
|
258,488
|
444,890
|
|||||||||||||||
Current liabilities, including current portion of long-term debt
|
17,577
|
20,033
|
25,581
|
36,819
|
75,417
|
|||||||||||||||
Non-current liabilities
|
22,276
|
76,022
|
87,593
|
117,388
|
263,716
|
|||||||||||||||
Total debt
|
24,226
|
84,539
|
103,949
|
140,655
|
309,007
|
|||||||||||||||
Stockholders' and mezzanine equity
|
34,153
|
45,521
|
107,274
|
104,281
|
105,757
|
|||||||||||||||
Preferred stock
|
-
|
-
|
1
|
1
|
1
|
|||||||||||||||
Common stock
|
-
|
-
|
4
|
11
|
87
|
2015
|
2016
|
2017
|
2018
|
2019
|
||||||||||||||||
FLEET DATA
|
||||||||||||||||||||
Total number of vessels at end of period (including leased vessels)
|
3.0
|
6.0
|
7.0
|
8.0
|
12.0
|
|||||||||||||||
Average number of vessels(1)
|
2.2
|
5.0
|
6.8
|
7.3
|
11.1
|
|||||||||||||||
Total calendar days for fleet(2)
|
810
|
1,812
|
2,496
|
2,670
|
4,055
|
|||||||||||||||
Total available days for fleet(3)
|
805
|
1,812
|
2,495
|
2,668
|
4,032
|
|||||||||||||||
Total operating days for fleet(4)
|
796
|
1,799
|
2,491
|
2,663
|
3,959
|
|||||||||||||||
Total time charter days for fleet
|
796
|
1,799
|
2,491
|
2,663
|
3,884
|
|||||||||||||||
Total spot (voyage) days for fleet
|
-
|
-
|
-
|
-
|
75
|
|||||||||||||||
Fleet utilization(5)
|
98.91
|
%
|
99.28
|
%
|
99.81
|
%
|
99.81
|
%
|
98.17
|
%
|
2015
|
2016
|
2017
|
2018
|
2019
|
||||||||||||||||
AVERAGE DAILY RESULTS
|
||||||||||||||||||||
Time charter equivalent(6)
|
$
|
15,961
|
$
|
15,396
|
$
|
15,403
|
$
|
15,031
|
$
|
16,233
|
||||||||||
Vessel operating expenses(7)
|
$
|
5,914
|
$
|
5,470
|
$
|
5,386
|
$
|
5,552
|
$
|
5,619
|
||||||||||
General and administrative expenses(8)
|
$
|
3,684
|
$
|
1,604
|
$
|
2,323
|
$
|
2,620
|
$
|
427
|
U.S. dollars in thousands
|
2015
|
2016
|
2017
|
2018
|
2019
|
|||||||||||||||
Adjusted EBITDA(9)
|
$
|
3,058
|
$
|
16,186
|
$
|
16,405
|
$
|
10,910
|
$
|
36,470
|
(1) |
Average number of vessels is the number of vessels that constituted our fleet (including chartered in vessels) for the relevant period, as measured by the sum of the number of days each vessel was a part of our fleet during the period
divided by the number of calendar days in that period.
|
(2) |
Calendar days are the total days the vessels were in our possession for the relevant period. Calendar days are an indicator of the size of our fleet over the relevant period and affect both the amount of revenues and expenses that we
record during that period.
|
(3) |
Available days are the number of calendar days less the aggregate number of days that our vessels are off-hire due to scheduled repairs or scheduled guarantee inspections in the case of newbuildings, vessel upgrades or special or
intermediate surveys and the aggregate amount of time that we spend positioning our vessels. Companies in the shipping industry generally use available days to measure the number of days in a period during which vessels should be capable
of generating revenues.
|
(4) |
Operating days are the number of available days in a period less the aggregate number of days that our vessels are off-hire due to unforeseen technical circumstances. The shipping industry uses operating days to measure the aggregate
number of days in a period that our vessels actually generate revenue.
|
(5) |
Fleet utilization is calculated by dividing the number of operating days during a period by the number of available days during that period. The shipping industry uses fleet utilization to measure a company's efficiency in finding
suitable employment for its vessels and minimizing the number of days that its vessels are off-hire for reasons other than scheduled repairs or scheduled guarantee inspections in the case of newbuildings, vessel upgrades, special or
intermediate surveys and vessel positioning.
|
(6) |
Time charter equivalent rate, or TCE rate, is a measure of the average daily revenue performance of a vessel. Our method of calculating TCE rate is determined by dividing TCE revenues by operating days for the relevant time period.
TCE revenues are revenues minus voyage expenses. Voyage expenses primarily consist of port, canal and fuel costs that are unique to a particular voyage, which would otherwise be paid by the charterer under a time charter contract, but are
payable by us in the case of a voyage charter, as well as commissions. TCE revenues and TCE rate, which are non-U.S. GAAP measures, provide additional supplemental information in conjunction with shipping revenues, the most directly
comparable U.S. GAAP measure. We use TCE rates and TCE revenues to compare period-to-period changes in our performance and it assists investors and our management in evaluating our financial performance. The following table below reflects
the reconciliation of TCE revenues to revenues as reflected in the consolidated statements of operations and our calculation of TCE rates for the periods presented.
|
U.S. dollars in thousands, except average daily time charter equivalent and total operating days
|
2015
|
2016
|
2017
|
2018
|
2019
|
|||||||||||||||
On a consolidated basis
|
||||||||||||||||||||
Total Revenues*
|
$
|
13,075
|
$
|
28,433
|
$
|
39,363
|
$
|
41,048
|
$
|
66,088
|
||||||||||
Less:
|
||||||||||||||||||||
Voyage expenses
|
(370
|
)
|
(736
|
)
|
(999
|
)
|
(1,020
|
)
|
(3,038
|
)
|
||||||||||
Time charter equivalent revenues
|
$
|
12,705
|
$
|
27,697
|
$
|
38,364
|
$
|
40,028
|
$
|
63,050
|
||||||||||
Total operating days
|
796
|
1,799
|
2,491
|
2,663
|
3,884
|
|||||||||||||||
Average Daily Time Charter Equivalent (TCE)
|
$
|
15,961
|
$
|
15,396
|
$
|
15,403
|
$
|
15,031
|
$
|
16,233
|
(7) |
Daily vessel operating expenses, which include crew costs, provisions, deck and engine stores, lubricating oil, insurance, maintenance and repairs are calculated by dividing vessel operating expenses by fleet calendar days for the
relevant time period.
|
(8) |
Daily general and administrative expenses are calculated by dividing general and administrative expenses by fleet calendar days for the relevant time period.
|
(9) |
Adjusted Earnings Before Interest, Taxes, Depreciation, Amortization (Adjusted EBITDA), is not a measure prepared in accordance with U.S. GAAP. We define Adjusted EBITDA as earnings before interest, taxes, depreciation and
amortization, vessel bareboat charter hire expenses (including amortization of prepaid hire), operating lease expenses, asset impairments, and gains/losses on derivative financial instruments. Adjusted EBITDA is a non-U.S. GAAP financial
measure that is used as a supplemental financial measure by management and external users of financial statements, such as investors, to assess our financial and operating performance. We believe that this non-GAAP financial measure
assists our management and investors by increasing the comparability of our performance from period to period. This is achieved by excluding the potentially disparate effects between periods of interest, gain/loss on financial
instruments, depreciation and amortization, vessel bareboat charter hire expenses (including amortization of prepaid hire), operating lease expenses, asset impairments and which items are affected by various and possibly changing
financing methods, capital structure and historical cost basis and which items may significantly affect results of operations between periods. This non-U.S. GAAP measure should not be considered in isolation from, as a substitute for, or
superior to financial measures prepared in accordance with U.S. GAAP. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this
presentation. Our definition of Adjusted EBITDA may not be the same as reported by other companies in the shipping industry or other industries. Adjusted EBITDA does not represent and should not be considered as an alternative to
operating income or cash flow from operations, as determined in accordance with U.S. GAAP.
|
U.S. dollars in thousands
|
2015
|
2016
|
2017
|
2018
|
2019
|
|||||||||||||||
Net (loss)/income and comprehensive (loss)/income
|
(8,507
|
)
|
1,052
|
(13,372
|
)
|
(11,129
|
)
|
(14,773
|
)
|
|||||||||||
Add: Bareboat charter hire expenses
|
5,274
|
6,299
|
6,282
|
6,282
|
-
|
|||||||||||||||
Add: Amortization of prepaid bareboat charter hire
|
1,431
|
1,577
|
1,657
|
1,657
|
-
|
|||||||||||||||
Add: Operating lease expense
|
-
|
-
|
-
|
-
|
7,054
|
|||||||||||||||
Add: Vessel depreciation
|
668
|
3,467
|
5,744
|
6,389
|
12,392
|
|||||||||||||||
Add: Impairment on vessel
|
3,081
|
-
|
-
|
-
|
12,310
|
|||||||||||||||
Add: Impairment on unconsolidated joint ventures
|
-
|
-
|
-
|
-
|
3,144
|
|||||||||||||||
Add: Interest and finance costs
|
719
|
3,093
|
15,793
|
9,662
|
18,077
|
|||||||||||||||
Add: Loss/(gain) on derivative financial instruments
|
392
|
698
|
301
|
(1,821
|
)
|
(1,601
|
)
|
|||||||||||||
Less: Interest income
|
-
|
-
|
-
|
(130
|
)
|
(133
|
)
|
|||||||||||||
Adjusted EBITDA
|
3,058
|
16,186
|
16,405
|
10,910
|
36,470
|
B. |
Capitalization and Indebtedness
|
C. |
Reasons for the Offer and Use of Proceeds
|
D. |
Risk Factors
|
|
• |
supply and demand for petroleum products and chemicals carried;
|
|
• |
changes in oil production and refining capacity resulting in shifts in trade flows for oil products;
|
|
• |
the distance petroleum products and chemicals are to be moved by sea;
|
|
• |
global and regional economic and political conditions, including "trade wars" and developments in international trade, national oil reserves policies, fluctuations in industrial and agricultural production, armed conflicts and work
stoppages;
|
|
• |
increases in the production of oil in areas linked by pipelines to consuming areas, the extension of existing, or the development of new pipeline systems in markets we may serve, or the conversion of existing non-oil pipelines to oil
pipelines in those markets;
|
|
• |
environmental and other legal and regulatory developments;
|
|
• |
economic slowdowns caused by public health events such as the recent COVID-19 outbreak;
|
|
• |
currency exchange rates;
|
|
• |
weather, natural disasters and other acts of God;
|
|
• |
competition from alternative sources of energy, other shipping companies and other modes of transportation; and
|
|
• |
international sanctions, embargoes, import and export restrictions, nationalizations, piracy and wars.
|
|
• |
the number of newbuilding deliveries;
|
|
• |
current and expected newbuilding orders for vessels;
|
|
• |
the scrapping rate of older vessels;
|
|
• |
vessel freight rates, which are affected by factors that may affect the rate of newbuilding, swapping and laying up of vessels;
|
|
• |
the price of steel and vessel equipment;
|
|
• |
technological advances in the design and capacity of vessels;
|
|
• |
potential conversion of vessels for alternative use;
|
|
• |
changes in environmental and other regulations that may limit the useful lives of vessels;
|
|
• |
port or canal congestion;
|
|
• |
the number of vessels that are out of service at a given time, namely those that are laid-up, drydocked, awaiting repairs or otherwise not available for hire, including those that are in drydock for the purpose of installing exhaust
gas cleaning systems, known as scrubbers; and
|
|
• |
changes in global petroleum and chemical production.
|
|
• |
general economic and market conditions affecting the shipping industry;
|
|
• |
prevailing level of charter rates;
|
|
• |
competition from other shipping companies;
|
|
• |
types, sizes and ages of vessels;
|
|
• |
the availability of other modes of transportation;
|
|
• |
supply and demand for vessels;
|
|
• |
shipyard capacity;
|
|
• |
cost of newbuildings;
|
|
• |
price of steel;
|
|
• |
governmental or other regulations; and
|
|
• |
technological advances.
|
|
• |
maintain a consolidated leverage ratio of not more than 75% (and in one case 80%);
|
|
• |
maintain minimum free liquidity of $1.0 million per Suezmax tanker $0.75 million per owned MR tanker and $0.5 million per bareboated chartered-in MR tanker; and
|
|
• |
assure no change of control of the company takes place, except with the lessors prior written consent.
|
|
• |
increase our vulnerability to general economic downturns and adverse competitive and industry conditions;
|
|
• |
require us to dedicate a substantial portion, if not all, of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other
general corporate purposes;
|
|
• |
limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
|
|
• |
place us at a competitive disadvantage compared to competitors that have less debt or better access to capital;
|
|
• |
limit our ability to raise additional financing on satisfactory terms or at all; and
|
|
• |
adversely impact our ability to comply with the financial and other restrictive covenants of our current or future financing arrangements, which could result in an event of default under such agreements.
|
|
• |
generate excess cash flow for investment without jeopardizing our ability to cover current and foreseeable working capital needs (including debt service);
|
|
• |
raise equity and obtain required financing for our existing and new operations;
|
|
• |
locate and acquire suitable vessels;
|
|
• |
identify and consummate acquisitions or joint ventures;
|
|
• |
integrate any acquired business successfully with our existing operations;
|
|
• |
our manager ability to hire, train and retain qualified personnel and crew to manage and operate our growing business and fleet;
|
|
• |
enhance our customer base; and
|
|
• |
manage expansion.
|
|
• |
fluctuations in interest rates;
|
|
• |
fluctuations in the availability or the price of oil and chemicals;
|
|
• |
fluctuations in foreign currency exchange rates;
|
|
• |
announcements by us or our competitors;
|
|
• |
changes in our relationships with customers or suppliers;
|
|
• |
actual or anticipated fluctuations in our semi-annual and annual results and those of other public companies in our industry;
|
|
• |
changes in United States or foreign tax laws;
|
|
• |
actual or anticipated fluctuations in our operating results from period to period;
|
|
• |
shortfalls in our operating results from levels forecast by securities analysts;
|
|
• |
market conditions in the shipping industry and the general state of the securities markets;
|
|
• |
business interruptions caused by the recent outbreak of COVID-19;
|
|
• |
mergers and strategic alliances in the shipping industry;
|
|
• |
changes in government regulation;
|
|
• |
a general or industry-specific decline in the demand for, and price of, shares of our common shares resulting from capital market conditions independent of our operating performance;
|
|
• |
the loss of any of our key management personnel;
|
|
• |
our failure to successfully implement our business plan; and
|
|
• |
issuance of shares.
|
|
• |
actual or anticipated fluctuations in our quarterly and annual results and those of other public companies in our industry;
|
|
• |
mergers and strategic alliances in the shipping industry;
|
|
• |
market conditions in the shipping industry and the general state of the securities markets;
|
|
• |
changes in government regulation;
|
|
• |
shortfalls in our operating results from levels forecast by securities analysts; and
|
|
• |
announcements concerning us or our competitors.
|
|
• |
our existing shareholders' proportionate ownership interest in us will decrease;
|
|
• |
the amount of cash available for dividends payable on the shares of our common shares may decrease;
|
|
• |
the relative voting strength of each previously outstanding common share may be diminished; and
|
|
• |
the market price of the shares of our common shares may decline.
|
|
• |
authorizing our Board of Directors to issue "blank check" preferred stock without shareholder approval;
|
|
• |
providing for a classified Board of Directors with staggered, three-year terms;
|
|
• |
prohibiting cumulative voting in the election of directors;
|
|
• |
authorizing the removal of directors only for cause and only upon the affirmative vote of the holders of at least 80% of the outstanding shares of our capital stock entitled to vote for the directors;
|
|
• |
prohibiting shareholder action by written consent unless the written consent is signed by all shareholders entitled to vote on the action;
|
|
• |
limiting the persons who may call special meetings of shareholders; and
|
|
• |
establishing advance notice requirements for nominations for election to our Board of Directors or for proposing matters that can be acted on by shareholders at shareholder meetings.
|
|
• |
continue to operate our vessels and service our customers;
|
|
• |
renew existing charters upon their expiration;
|
|
• |
obtain new charters;
|
|
• |
obtain financing on commercially acceptable terms;
|
|
• |
obtain insurance on commercially acceptable terms;
|
|
• |
maintain satisfactory relationships with our customers and suppliers; and
|
|
• |
successfully execute our growth strategy.
|
ITEM 4. |
INFORMATION ON THE COMPANY
|
A. |
History and Development of the Company
|
|
• |
100% of the issued and outstanding shares of PCH Dreaming Inc., a Marshall Islands company that had entered into a new building contract for a high specification 50,000 dwt Medium Range ("MR") product/chemical tanker, M/T Eco Marina
Del Ray, delivered from Hyundai Mipo Dockyard Co., Ltd. in South Korea in March 2019. We acquired the shares from an entity affiliated with our Chief Executive Officer for an aggregate purchase price of $3.95 million.
|
|
• |
100% of the issued and outstanding shares of South California Inc., a Marshall Islands company that has entered into a new building contract for a high specification, scrubber-equipped, 157,000 dwt Suezmax Crude Oil Carrier (M/T Eco
Bel Air) delivered from Hyundai Samho Heavy Industries Co. Ltd. in South Korea in April 2019. We acquired the shares from an entity affiliated with our Chief Executive Officer for an aggregate purchase price of $8.95 million.
|
|
• |
100% of the issued outstanding shares of Malibu Warrior Inc., a Marshall Islands company that has entered into a new building contract for a high specification, scrubber-equipped, 157,000 dwt Suezmax Crude Oil Carrier (M/T Eco Beverly
Hills) delivered from Hyundai Samho Heavy Industries Co. Ltd. in South Korea and in May 2019. We acquired the shares from an entity affiliated with our Chief Executive Officer for an aggregate purchase price of $8.95 million.
|
|
• |
10% of the issued and outstanding shares of Eco Seven Inc., a Marshall Islands company that owned M/T Stena Elegance, a high specification 50,000 dwt MR product/chemical tanker delivered in February 2017 from Hyundai Vinashin. We
acquired the shares from an entity affiliated with our Chief Executive Officer for an aggregate purchase price of $1.6 million. As a result of the transaction we own 100% of the issued and outstanding shares of Eco Seven Inc.
|
B. |
Business Overview
|
Name
|
Deadweight
|
Charterer
|
End of firm period
|
Charterer's Optional Periods
|
Gross Rate fixed period/ options
|
M/T Stenaweco Energy
|
50,000
|
Stena Weco A/S
|
February 2021
|
1+1 years
|
$15,616 / $17,350 / $18,100
|
M/T Stenaweco Evolution
|
50,000
|
Stena Weco A/S
|
October 2021
|
1+1 years
|
$15,516 / $17,200 / $18,000
|
M/T Stenaweco Excellence
|
50,000
|
Stena Weco A/S
|
November 2020
|
1+1 years
|
$16,200 / $17,200 / $18,000
|
M/T Nord Valiant
|
50,000
|
DS Norden A/S
|
August 2021
|
1+1 years
|
$16,800 / $17,600 / $18,400
|
M/T Eco California
|
50,000
|
Shell Tankers Singapore Private Limited
|
January 2021
|
1 year
|
$13,750 plus 50% profit share/ $13,950 plus 50% profit share
|
M/T Eco Marina Del Ray
|
50,000
|
Cargill
|
March 2024
|
-
|
$15,100
|
M/T Eco Los Angeles
|
50,000
|
Trafigura
|
February 2023
|
1+1 years
|
$17,500 / $18,750 / $20,000
|
M/T Eco City of Angels
|
50,000
|
Trafigura
|
February 2023
|
1+1 years
|
$17,500 / $18,750 / $20,000
|
Name
|
Deadweight
|
Charterer
|
End of firm period
|
Charterer's Optional Periods
|
Gross Rate fixed period/ options
|
M/T Eco Bel Air
|
157,000
|
BP Shipping Limited
|
April 2022
|
1+1 years
|
$24,500 / $27,500 / $29,000
|
M/T Eco Beverly Hills
|
157,000
|
BP Shipping Limited
|
May 2022
|
1+1 years
|
$24,500 / $27,500 / $29,000
|
Name
|
Deadweight
|
Charterer
|
End of firm period
|
Charterer's Optional Periods
|
Gross Rate fixed period/ options
|
M/T Eco Palm Springs*
|
50,000
|
Clearlake Shipping Pte Ltd
|
May 2021
|
1+1 years
|
$14,750 up to May 2020 and $15,175 thereafter / $15,550 / $16,550
|
C. |
Organizational Structure
|
D. |
Property, Plants and Equipment
|
ITEM 4A. |
UNRESOLVED STAFF COMMENTS
|
ITEM 5. |
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
|
A. |
Operating Results
|
|
• |
Calendar days. We define calendar days as the total number of days the vessels were in our possession for the relevant period. Calendar days are an indicator of the size of our fleet during the
relevant period and affect both the amount of revenues and expenses that we record during that period.
|
|
• |
Available days. We define available days as the number of calendar days less the aggregate number of days that our vessels are off-hire due to scheduled repairs, or scheduled guarantee
inspections in the case of newbuildings, vessel upgrades or special or intermediate surveys and the aggregate amount of time that we spend positioning our vessels. Companies in the shipping industry generally use available days to measure
the number of days in a period during which vessels should be capable of generating revenues.
|
|
• |
Operating days. We define operating days as the number of available days in a period less the aggregate number of days that our vessels are off-hire due to unforeseen technical circumstances.
The shipping industry uses operating days to measure the aggregate number of days in a period that our vessels actually generate revenues.
|
|
• |
Fleet utilization. We calculate fleet utilization by dividing the number of operating days during a period by the number of available days during that period. The shipping industry uses fleet
utilization to measure a company's efficiency in finding suitable employment for its vessels and minimizing the number of days that its vessels are off-hire for reasons other than scheduled repairs or scheduled guarantee inspections in
the case of newbuildings, vessel upgrades, special or intermediate surveys and vessel positioning.
|
|
• |
TCE Revenues / TCE Rates. We define TCE revenues as revenues minus voyage expenses. Voyage expenses primarily consist of port, canal and fuel costs that are unique to a particular voyage, which
would otherwise be paid by a charterer under a time charter, as well as commissions. We believe that presenting revenues net of voyage expenses neutralizes the variability created by unique costs associated with particular voyages or the
deployment of vessels on the spot market and facilitates comparisons between periods on a consistent basis. We calculate daily TCE rates by dividing TCE revenues by operating days for the relevant time period. TCE revenues include
demurrage revenue, which represents fees charged to charterers associated with our spot market voyages when the charterer exceeds the agreed upon time required to load or discharge a cargo.
|
|
• |
management of our financial resources, including banking relationships, i.e., administration of bank loans and bank accounts;
|
|
• |
management of our accounting system and records and financial reporting;
|
|
• |
administration of the legal and regulatory requirements affecting our business and assets; and
|
|
• |
management of the relationships with our service providers and customers.
|
|
• |
charter rates and periods of charter hire for our tankers;
|
|
• |
utilization of our tankers (earnings efficiency);
|
|
• |
levels of our tanker's operating expenses and dry-docking costs;
|
|
• |
depreciation and amortization expenses;
|
|
• |
financing costs; and
|
|
• |
fluctuations in foreign exchange rates.
|
Year Ended December 31,
|
change
|
|||||||||||||||
2018
|
2019
|
YE19 v YE18
|
||||||||||||||
($ in thousands)
|
$
|
%
|
||||||||||||||
Revenues
|
41,048
|
66,088
|
25,040
|
61
|
%
|
|||||||||||
Voyage expenses
|
1,020
|
3,038
|
2,018
|
198
|
%
|
|||||||||||
Operating Lease Expense
|
-
|
7,054
|
7,054
|
100
|
%
|
|||||||||||
Bareboat charter hire expenses
|
6,282
|
-
|
(6,282
|
)
|
-100
|
%
|
||||||||||
Amortization of prepaid bareboat charter hire
|
1,657
|
-
|
(1,657
|
)
|
-100
|
%
|
||||||||||
Vessel operating expenses
|
14,827
|
22,786
|
7,959
|
54
|
%
|
|||||||||||
Dry-docking costs
|
-
|
399
|
399
|
100
|
%
|
|||||||||||
Vessel Depreciation
|
6,389
|
12,392
|
6,003
|
94
|
%
|
|||||||||||
Management fees-related parties
|
7,765
|
2,443
|
(5,322
|
)
|
-69
|
%
|
||||||||||
Vessels Impairment charge
|
-
|
12,310
|
12,310
|
100
|
%
|
|||||||||||
General and administrative expenses
|
6,997
|
1,730
|
(5,267
|
)
|
-75
|
%
|
||||||||||
Operating (loss) income
|
(3,889
|
)
|
3,936
|
7,825
|
-201
|
%
|
||||||||||
Impairment on unconsolidated joint ventures
|
-
|
(3,144
|
)
|
(3,144
|
)
|
100
|
%
|
|||||||||
Interest and finance costs
|
(9,662
|
)
|
(18,077
|
)
|
(8,415
|
)
|
87
|
%
|
||||||||
Gain on financial instruments
|
1,821
|
1,601
|
(220
|
)
|
-12
|
%
|
||||||||||
Interest income
|
130
|
133
|
3
|
2
|
%
|
|||||||||||
Equity gain in unconsolidated joint ventures
|
291
|
778
|
487
|
167
|
%
|
|||||||||||
Other, net
|
180
|
-
|
(180
|
)
|
-100
|
%
|
||||||||||
Total other expenses, net
|
(7,240
|
)
|
(18,709
|
)
|
(11,469
|
)
|
158
|
%
|
||||||||
Net loss
|
(11,129
|
)
|
(14,773
|
)
|
(3,644
|
)
|
33
|
%
|
|
1. |
Revenues, Voyage expenses, Other vessel operating expenses and Vessel depreciation
|
|
2. |
Operating lease expenses, Bareboat charter hire expenses and Amortization of prepaid bareboat charter hire
|
|
3. |
Management fees—related parties
|
|
4. |
General and administrative expenses
|
|
5. |
Interest and Finance Costs
|
|
I. |
An increase of $10.2 million in loan interest expense, due to the following:
|
|
a. |
$6.9 million increase in interest expenses in the year ended December 31, 2019 as a result of our entry into three new SLBs that we have accounted as financings (namely the Cargill, BoComm Leasing and CMBFL SLBs) for the financing of a
total of four new vessels delivered during 2019 (namely M/T's: Eco California, Eco Marina Del Rey, Eco Bel Air, Eco Beverly Hills).
|
|
b. |
$1.0 million increase in interest expenses during the year ended December 31, 2019 as a result of interest expenses relating to the AT Bank Senior facility (entered into for the financing of M/T Eco Palm Desert delivered in September
2018) for the whole year as compared to four months of interest expenses during 2018.
|
|
c. |
$0.3 million interest expenses from the OFI Facility for the purchase the M/T Stenaweco Energy and M/T Stenaweco Evolution entered into in November 2019.
|
|
d. |
$1.4 million increase in interest expense of Top Ships Inc, mainly due to the fact that during the year ended December 31, 2019 we incurred $0.8 million of interest expense from the AT Bank Note, absent in the year ended December 31,
2018. During the year ended December 31, 2019 we had a reduction in imputed capitalized interest of $0.6 million compared to the same period in 2018.
|
|
e. |
$0.4 million increase in interest expenses as part of the refinancing of Tranche C of the ABN Facility in January 2019 with the BoComm Leasing Facility, which resulted in an increase of the leverage amount by about $3.1 million.
|
|
f. |
$0.2 million increase in interest expense as part of the refinancing of the NORD/LB facility in July 2019 with the OFI Facility, which resulted in an increase in the leverage amount by about $8.6 million.
|
|
II. |
An increase of $0.3 million in amortization of finance fees mainly due to the following:
|
|
g. |
An increase of $0.5 million as a result of the accelerated amortization of the unamortized balance of deferred financing fees of Tranche C of the ABN Facility ($0.3 million) and of the NORD/LB Facility as part of its refinancing in
July 2019 ($0.2 million).
|
|
h. |
An increase of $0.2 million as part of the CMBFL Facility that financed the newbuilding vessels delivered in the second quarter of 2019, M/T Eco Bel Air and M/T Eco Beverly Hills ($0.1 million each).
|
|
i. |
An offsetting decrease of $0.2 million as a result of the reduced amortization of the AT Bank predelivery facilities' fees for the financing of M/T Eco Palm Desert ($0.1 million) and Eco California ($0.1 million) that were being
amortized up to September 2018 and January 2019 respectively.
|
|
j. |
An offsetting decrease of $0.2 million due to the reduced amortization of the Family Trading facility fees that were being amortized up to March 2019 ($0.3 million decrease), netted by an increase in the amortization of financing fees
of the new AT Bank Note that started in March 2019 ($0.1 million increase).
|
|
III. |
An offsetting decrease of $2.2 million in amortization of debt discount mainly due to the fact that in the year ended December 31, 2019 the debt discount amortization relating to the convertibility features of the Family Trading Loan
amounted to $0.3 million, compared to $2.5 million for the same period in 2018, since the facility was terminated in March 2019.
|
|
6. |
(Loss)/Gain on derivative financial instruments
|
|
7. |
Vessels Impairment charge
|
|
8. |
Impairment on unconsolidated joint ventures
|
|
• |
reports by industry analysts and data providers that focus on our industry and related dynamics affecting vessel values;
|
|
• |
news and industry reports of similar vessel sales;
|
|
• |
news and industry reports of sales of vessels that are not similar to our vessels where we have made certain adjustments in an attempt to derive information that can be used as part of our estimates;
|
|
• |
approximate market values for our vessels or similar vessels that we have received from shipbrokers, whether solicited or unsolicited, or that shipbrokers have generally disseminated;
|
|
• |
offers that we may have received from potential purchasers of our vessels; and
|
|
• |
vessel sale prices and values of which we are aware through both formal and informal communications with shipowners, shipbrokers, industry analysts and various other shipping industry participants and observers.
|
B. |
Liquidity and Capital Resources
|
|
• |
Ownership of the vessel financed;
|
|
• |
Assignment of insurance and earnings of the vessel financed;
|
|
• |
Specific assignment of any time charters of the vessel financed with duration of more than 12 months;
|
|
• |
Corporate guarantee of Top Ships Inc.;
|
|
• |
Pledge of the shares of the relative shipowning subsidiary;
|
|
• |
Pledge over the earnings account of the vessel financed.
|
|
• |
for M/T Stenaweco Excellence: 120 consecutive monthly installments of $160,000 commencing from draw down, and a balloon payment of $6.4 million payable together with the last installment,
|
|
• |
for M/T Stenaweco Energy: 120 consecutive monthly installments of $131,000 commencing from draw down, and a balloon payment of $5.7 million payable together with the last installment,
|
|
• |
for M/T Stenaweco Evolution: 120 consecutive monthly installments of $153,000 commencing from draw down, and a balloon payment of $6.1 million payable together with the last installment,
|
C. |
Research and Development, Patents and Licenses, Etc.
|
D. |
Trend Information
|
E. |
Off-Balance Sheet Arrangements
|
F. |
Tabular Disclosure of Contractual Obligations
|
Payments due by period
|
||||||||||||||||||||
1-3
|
3-5
|
More than
|
||||||||||||||||||
Contractual Obligations:
|
Total
|
Less than 1 year
|
years
|
years
|
5 years
|
|||||||||||||||
Long term debt A
|
$
|
286.2
|
$
|
18.1
|
$
|
46.1
|
$
|
87.1
|
$
|
134.9
|
||||||||||
Interest related to long term debt B
|
$
|
80.9
|
$
|
16.6
|
$
|
28.6
|
$
|
21
|
$
|
14.7
|
||||||||||
Debt related to vessels held for sale C
|
$
|
30.3
|
$
|
30.3
|
$
|
0.0
|
$
|
0.0
|
$
|
0.0
|
||||||||||
Interest expense related to vessels held for sale
|
$
|
0.1
|
$
|
0.1
|
$
|
0.0
|
$
|
0.0
|
$
|
0.0
|
||||||||||
Vessel Management Fees to CSI D
|
$
|
11.2
|
$
|
2.7
|
$
|
5.6
|
$
|
2.9
|
$
|
0.0
|
||||||||||
Vessel acquisitions E
|
$
|
64.0
|
$
|
64.0
|
$
|
0.0
|
$
|
0.0
|
$
|
0.0
|
||||||||||
Total
|
$
|
472.7
|
$
|
131.8
|
$
|
80.3
|
$
|
111.0
|
$
|
149.6
|
A. |
Relates to the principal repayments of our Long term debt (see "Item 18. Financial Statements—Note 8—Debt.").
|
B. |
Relates to estimated interest payments of our Long term debt, based on our average outstanding debt. In the cases there are no Interest Rate Swap agreements in place, we have assumed a LIBOR of 1.5% going forward (see "Item 18.
Financial Statements—Note 8—Debt." and "Item 11. Quantitative and qualitative disclosures about market risk—Interest Rate Risk").
|
C. |
Relates to our Debt related to vessels held for sale (see "Item 18. Financial Statements—Note 8—Debt.").
|
D. |
Relates to our obligation for monthly management fees under our letter agreement with CSI for all the vessels in our fleet, excluding vessels held for sale and including the two vessels under constructions as of December 31, 2019.
These fees also cover the provision of services rendered in relation to the maintenance of proper books and records and services in relation to financial reporting requirements under SEC and NASDAQ rules. Please see "Item 18. Financial
Statements—Note 5—Transactions with Related Parties".
|
E. |
Relates to the remaining payments for the acquisition of our two newbuilding vessels in 2020. Please see "Item 18. Financial Statements—Note 9— Commitments and Contingencies ".
|
G. |
Safe Harbor
|
ITEM 6. |
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
|
A. |
Directors and Senior Management
|
Name
|
Age
|
Position
|
|||
Evangelos J. Pistiolis
|
47
|
Director, President, Chief Executive Officer
|
|||
Alexandros Tsirikos
|
46
|
Director, Chief Financial Officer
|
|||
Konstantinos Patis
|
46
|
Chief Technical Officer
|
|||
Vangelis G. Ikonomou
|
55
|
Chief Operating Officer
|
|||
Konstantinos Karelas
|
47
|
Independent Non-Executive Director
|
|||
Stavros Emmanuel
|
77
|
Independent Non-Executive Director
|
|||
Paolo Javarone
|
46
|
Independent Non-Executive Director
|
B. |
Compensation
|
C. |
Board Practices
|
D. |
Employees
|
E. |
Share Ownership
|
ITEM 7. |
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
|
A. |
Major Shareholders
|
Name and Address of Beneficial Owner(2)
|
Number of Shares Owned
|
Percent of Class
|
||||||
Lax Trust (1)
|
17,274,140
|
12.8
|
%
|
|||||
Executive officers, directors and key employees
|
-
|
-
|
%
|
(1) |
The above information is derived, in part, from the Schedule 13D/A filed with the SEC on April 10, 2020. The Lax Trust is an irrevocable trust established for the benefit of certain family members of Evangelos J. Pistiolis, our
President, Chief Executive Officer and Director. The business address of the Lax Trust is Level 3, 18 Stanley Street, Auckland 1010, New Zealand. The above percentage ownership is based on 134,979,295 common shares outstanding, which is
calculated for this Schedule 13D/A purposes by taking the sum of (i) 117,705,155 common shares outstanding, and (ii) 17,274,140 common shares issuable upon the conversion of 10,364 Series E Preferred Shares held by Family Trading, all
figures being as of April 10, 2020. The Lax Trust may also be deemed to hold all of the 100,000 outstanding shares of our Series D Preferred Stock. Each Series D Preferred Share carries 1,000 votes. By its ownership of 100% of our
Series D Preferred Shares, Lax Trust has control over our actions.
|
(2) |
Morgan Stanley, Intracoastal Capital LLC, Hudson Bay Management LP and Sabby Management LLC each reported holdings of 1,685,555 shares, 900,000 shares, 965,076 shares, 799,212 shares, respectively, on Schedule 13G or amendments to
Schedule 13G during 2020. Due to recent issuances and sales of our common shares, we no longer believe these shareholders have at least a 5% interest in the Company based on the number of shares reported on each reporting persons
Schedule 13G or any amendments thereto.
|
B. |
Related Party Transactions
|
C. |
Interests of Experts and Counsel
|
ITEM 8. |
FINANCIAL INFORMATION.
|
A. |
Consolidated Statements and Other Financial Information
|
B. |
Significant Changes
|
ITEM 9. |
THE OFFER AND LISTING.
|
ITEM 10. |
ADDITIONAL INFORMATION
|
A. |
Share Capital
|
B. |
Memorandum and Articles of Association
|
|
• |
prior to the date of the transaction that resulted in the shareholder becoming an interested shareholder, the Board approved either the business combination or the transaction that resulted in the shareholder becoming an interested
shareholder;
|
|
• |
upon consummation of the transaction that resulted in the shareholder becoming an interested shareholder, the interested shareholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction
commenced;
|
|
• |
at or subsequent to the date of the transaction that resulted in the shareholder becoming an interested shareholder, the business combination is approved by the Board and authorized at an annual or special meeting of shareholders by
the affirmative vote of at least 66 2/3% of the outstanding voting stock that is not owned by the interested shareholder; and
|
|
• |
the shareholder became an interested shareholder prior to the consummation of the initial public offering.
|
|
• |
not be redeemable;
|
|
• |
entitle holders to quarterly dividend payments in an amount per share equal to the aggregate per share amount of all cash dividends, and the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions
other than a dividend payable in our common shares or a subdivision of the our outstanding common shares (by reclassification or otherwise), declared on our common shares since the immediately preceding quarterly dividend payment date;
and
|
|
• |
entitle holders to one vote on all matters submitted to a vote of our shareholders.
|
|
• |
Flip In. If an Acquiring Person obtains beneficial ownership of 15% or more of our common shares, then each Right will entitle the holder thereof to purchase, for the Exercise Price, a number
of our common shares (or, in certain circumstances, cash, property or other of our securities) having a then-current market value of twice the Exercise Price. However, the Rights are not exercisable following the occurrence of the
foregoing event until such time as the Rights are no longer redeemable by us, as further described below.
|
|
• |
Flip Over. If, after an Acquiring Person obtains 15% or more of our common shares, (i) we merge into another entity; (ii) an
acquiring entity merges into us; or (iii) we sell or transfer 50% or more of its assets, cash flow or earning power, then each Right (except for Rights that have previously been voided as set forth above) will entitle the holder thereof
to purchase, for the Exercise Price, a number of our common shares of the person engaging in the transaction having a then-current market value of twice the Exercise Price.
|
|
• |
Notional Shares. Shares held by affiliates and associates of an Acquiring Person, including certain entities in which the
Acquiring Person beneficially owns a majority of the equity securities, and Notional Common Shares (as defined in the Rights Agreement) held by counterparties to a Derivatives Contract (as defined in the Rights Agreement) with an
Acquiring Person, will be deemed to be beneficially owned by the Acquiring Person.
|
C. |
Material Contracts
|
D. |
Exchange controls
|
E. |
Taxation
|
|
(1) |
we are organized in a foreign country, or our country of organization, that grants an "equivalent exemption" to corporations organized in the United States; and
|
|
(2) |
either
|
|
A. |
more than 50% of the value of our stock is owned, directly or indirectly, by individuals who are "residents" of our country of organization or of another foreign country that grants an "equivalent exemption" to corporations organized
in the United States (each such individual a "qualified shareholder" and such individuals collectively, "qualified shareholders"), which we refer to as the "50% Ownership Test," or
|
|
B. |
our stock is "primarily and regularly traded on an established securities market" in our country of organization, in another country that grants an "equivalent exemption" to U.S. corporations, or in the United States, which we refer to
as the "Publicly-Traded Test."
|
|
• |
We have, or are considered to have, a fixed place of business in the United States involved in the earning of shipping income; and
|
|
• |
substantially all of our U.S.-source shipping income is attributable to regularly scheduled transportation, such as the operation of a vessel that follows a published schedule with repeated sailings at regular intervals between the
same points for voyages that begin or end in the United States.
|
|
• |
is a U.S. citizen or resident, U.S. corporation or other U.S. entity taxable as a corporation, an estate the income of which is subject to U.S. federal income taxation regardless of its source, or a trust (i) if a court within the
United States is able to exercise primary jurisdiction over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (ii) ) the trust has in effect a valid
election to be treated as a United States person for U.S. federal income tax purposes;
|
|
• |
owns the common shares as a capital asset, generally, for investment purposes; and
|
|
• |
owns less than 10% of our common shares for U.S. federal income tax purposes.
|
|
• |
If a partnership holds our common shares, the tax treatment of a partner of such partnership will generally depend upon the status of the partner and upon the activities of the partnership. If you are a partner in a partnership holding
our common shares, you are encouraged to consult your tax advisor.
|
|
• |
at least 75% of our gross income for such taxable year consists of passive income (e.g., dividends, interest, capital gains and rents derived other than in the active conduct of a rental business); or
|
|
• |
at least 50% of the average value of the assets held by the corporation during such taxable year produce, or are held for the production of, passive income.
|
|
• |
the excess distribution or gain would be allocated ratably over the Non-Electing Holder's aggregate holding period for the common shares;
|
|
• |
the amount allocated to the current taxable year and any taxable year before we became a PFIC would be taxed as ordinary income; and
|
|
• |
the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for that year, and an interest charge for the deemed tax deferral benefit would
be imposed with respect to the resulting tax attributable to each such other taxable year.
|
|
• |
the gain is effectively connected with a trade or business conducted by the Non-U.S. Holder in the United States. If the Non-U.S. Holder is entitled to the benefits of a U.S. income tax treaty with respect to that gain, that gain is
taxable only if it is attributable to a permanent establishment maintained by the Non-U.S. Holder in the United States; or
|
|
• |
the Non-U.S. Holder is an individual who is present in the United States for 183 days or more during the taxable year of disposition and other conditions are met.
|
|
• |
fail to provide an accurate taxpayer identification number;
|
|
• |
are notified by the IRS that you have failed to report all interest or dividends required to be shown on your U.S. federal income tax returns; or
|
|
• |
in certain circumstances, fail to comply with applicable certification requirements.
|
F. |
Dividends and Paying Agents
|
G. |
Statement by Experts
|
H. |
Documents on Display
|
I. |
Subsidiary Information
|
ITEM 11. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
SWAP
Number (Nr)
|
Counterparty
|
Notional amount as of
December 31, 2019
|
Start Date
|
End Date
|
Fixed Rate
Payable
|
Fair Value – Asset/(Liability)
as of December 31, 2019 |
1
|
ABN Amro
|
14,113
|
April 13, 2018
|
July 13, 2021
|
1.4425%
|
82
|
2
|
ABN Amro
|
14,888
|
December 21, 2016
|
January 13, 2022
|
2.08%
|
(113)
|
3
|
Alpha Bank
|
19,100
|
March 29, 2018
|
February 25, 2025
|
2.97%
|
(985)
|
Total
|
48,101
|
(1,016)
|
ITEM 12. |
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
|
ITEM 13. |
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
|
ITEM 14. |
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
|
ITEM 15. |
CONTROLS AND PROCEDURES
|
|
• |
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
|
|
• |
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made
only in accordance with authorizations of Company's management and directors; and
|
|
• |
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
|
ITEM 16A. |
AUDIT COMMITTEE FINANCIAL EXPERT
|
ITEM 16B. |
CODE OF ETHICS
|
ITEM 16C. |
PRINCIPAL AUDITOR AND SERVICES
|
U.S. dollars in thousands,
|
Year Ended
|
|||||||
2018
|
2019
|
|||||||
Audit Fees
|
218.1
|
340.7
|
ITEM 16D. |
EXEMPTIONS FROM THE LISTING STANDARDS FOR
AUDIT COMMITTEES
|
ITEM 16E. |
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
|
ITEM 16F. |
CHANGE IN REGISTRANT’S CERTIFYING
ACCOUNTANT
|
ITEM 16G. |
CORPORATE GOVERNANCE
|
|
• |
Majority Independent Board. Nasdaq requires, among other things, that a listed company has a Board of Directors comprised of a majority of independent directors. As permitted under Marshall
Islands law, our Board of Directors is comprised of three independent directors and two executive directors.
|
|
• |
Audit Committee. Nasdaq requires, among other things, that a listed company has an audit committee with a minimum of three independent members, at least one of whom meets certain standards of
financial sophistication. As permitted under Marshall Islands law, our audit committee consists of three independent directors but we do not designate any one audit commit member as meeting the standards of financial sophistication.
|
|
• |
As a foreign private issuer, we are not required to hold regularly scheduled board meetings at which only independent directors are present.
|
|
• |
In lieu of obtaining shareholder approval prior to the issuance of designated securities, we will comply with provisions of the BCA, which allows our Board of Directors to approve share issuances.
|
ITEM 16H.
|
MINE SAFETY DISCLOSURE
|
Number
|
Description of Exhibits
|
1.1
|
|
1.2
|
|
1.3
|
|
1.4
|
|
1.5
|
|
1.6
|
|
1.7
|
|
1.8
|
|
1.9
|
|
1.10
|
|
1.11
|
|
1.12
|
|
2.1
|
|
2.2
|
|
2.3
|
|
2.4
|
|
2.5
|
|
2.6
|
|
2.7
|
|
2.8
|
|
2.9
|
|
2.10
|
|
2.11
|
|
2.12
|
|
2.13
|
|
2.14
|
|
2.15
|
|
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
|
|
4.58
|
|
4.59
|
|
4.60
|
|
4.61
|
|
8.1
|
|
12.1
|
|
12.2
|
|
13.1
|
|
13.2
|
|
15.1
|
|
101
|
The following materials from the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2019, formatted in eXtensible Business Reporting Language (XBRL): (i) Consolidated Balance Sheets
as of December 31, 2018 and 2019; (ii) Consolidated Statements of Comprehensive Income/(Loss) for the years ended December 31, 2017, 2018 and 2019; (iii) Consolidated Statements of Stockholders' Equity for the years ended December 31,
2017, 2018 and 2019; (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2017, 2018 and 2019; and (v) Notes to Consolidated Financial Statements
|
(1) |
Incorporated by reference to Exhibit 99.2 of the Company's Current Report on Form 6-K, filed on June 24, 2011.
|
(2) |
Incorporated by reference to Exhibit 99.1 of the Company's Current Report on Form 6-K, filed on April 18, 2014.
|
(3) |
Incorporated by reference to Exhibit 1.3 of the Company's Annual Report on Form 20-F, filed on April 26, 2016.
|
(4) |
Incorporated by reference to Exhibit 1.4 of the Company's Annual Report on Form 20-F, filed on March 29, 2018.
|
(5) |
Incorporated by reference to Exhibit 1.5 of the Company's Annual Report on Form 20-F, filed on March 29, 2018.
|
(6) |
Incorporated by reference to Exhibit 1.6 of the Company's Annual Report on Form 20-F, filed on March 29, 2018.
|
(7) |
Incorporated by reference to Exhibit 1.7 of the Company's Annual Report on Form 20-F, filed on March 29, 2018.
|
(8) |
Incorporated by reference to Exhibit 1.8 of the Company's Annual Report on Form 20-F, filed on March 29, 2018.
|
(9) |
Incorporated by reference to Exhibit 1.9 of the Company's Annual Report on Form 20-F, filed on March 29, 2018.
|
(10) |
Incorporated by reference to Exhibit 99.2 of the Company's Current Report on Form 6-K, filed on August 22, 2019.
|
(11) |
Incorporated by reference to Exhibit 99.1 of the Company's Current Report on Form 6-K filed on March 9, 2007.
|
(12) |
Incorporated by reference to Exhibit 1 of the Company's Current Report on Form 6-K filed on November 28, 2014.
|
(13) |
Incorporated by reference to Exhibit 2.1 of the Company's Annual Report on Form 20-F, filed on June 29, 2009.
|
(14) |
Incorporated by reference to Exhibit 2.2 of the Company's Annual Report on Form 20-F, filed on March 14, 2017.
|
(15) |
Incorporated by reference to Exhibit 4.3 of the Company's Post-Effective Amendment No. 1 to the Registration Statement on Form F-1, filed on May 9, 2016 (File No. 333-194690).
|
(16) |
Incorporated by reference to Exhibit 4.1 of the Company's Pre-Effective Amendment No. 2 to the Registration Statement on Form F-1, filed on May 13, 2014 (File No. 333-194690).
|
(17) |
Incorporated by reference to Exhibit 99.1 of the Company's Current Report on Form 6-K, filed on October 24, 2018.
|
(18) |
Incorporated by reference to Exhibit 3 of the Company's Current Report on Form 6-K, filed on September 19, 2019.
|
(19) |
Incorporated by reference to Exhibit 2 of the Company's Current Report on Form 6-K, filed on September 19, 2019.
|
(20) |
Incorporated by reference to Exhibit 3 of the Company's Current Report on Form 6-K, filed on November 7, 2019.
|
(21) |
Incorporated by reference to Exhibit 4 of the Company's Current Report on Form 6-K, filed on November 7, 2019.
|
(22) |
Incorporated by reference to Exhibit 3.1 of the Company's Current Report on Form 6-K, filed on September 22, 2016.
|
(23) |
Incorporated by reference to Exhibit 3.1 of the Company's Current Report on Form 6-K, filed on November 23, 2016.
|
(24) |
Incorporated by reference to Exhibit 3.1 of the Company's Current Report on Form 6-K, filed on February 21, 2017.
|
(25) |
Incorporated by reference to Exhibit 4.1 of the Company's Current Report on Form 6-K, filed on May 8, 2017.
|
(26) |
Incorporated by reference to Exhibit 99.2 of the Company's Current Report on Form 6-K, filed on April 1, 2019.
|
(27) |
Incorporated by reference to Exhibit 4.1 of the Company's Annual Report on Form 20-F, filed on April 26, 2016.
|
(28) |
Incorporated by reference to Exhibit 4.1 of the Company's Current Report on Form 6-K, filed on September 22, 2016.
|
(29) |
Incorporated by reference to Exhibit 4.5 of the Company's Annual Report on Form 20-F, filed on March 29, 2018.
|
(30) |
Incorporated by reference to Exhibit 4.6 of the Company's Annual Report on Form 20-F, filed on March 29, 2018.
|
(31) |
Incorporated by reference to Exhibit 4.7 of the Company's Annual Report on Form 20-F, filed on March 29, 2018.
|
(32) |
Incorporated by reference to Exhibit 4.8 of the Company's Annual Report on Form 20-F, filed on March 29, 2018.
|
(33) |
Incorporated by reference to Exhibit 10.42 of the Company's Registration Statement on Form F-1, filed on March 19, 2014, as amended (File No. 333-194960).
|
(34) |
Incorporated by reference to Exhibit 10.43 of the Company's Registration Statement on Form F-1, filed on March 19, 2014, as amended (File No. 333-194960).
|
(35) |
Incorporated by reference to Exhibit 4.29 of the Company's Annual Report on Form 20-F, filed on April 29, 2015.
|
(36) |
Incorporated by reference to Exhibit 4.30 of the Company's Annual Report on Form 20-F, filed on April 29, 2015.
|
(37) |
Incorporated by reference to Exhibit 4.33 of the Company's Annual Report on Form 20-F, filed on April 29, 2015.
|
(38) |
Incorporated by reference to Exhibit 4.56 of the Company's Annual Report on Form 20-F, filed on March 29, 2018.
|
(39) |
Incorporated by reference to Exhibit 4.57 of the Company's Annual Report on Form 20-F, filed on March 29, 2018.
|
(40) |
Incorporated by reference to Exhibit 4.31 of the Company's Annual Report on Form 20-F, filed on April 29, 2015.
|
(41) |
Incorporated by reference to Exhibit 4.32 of the Company's Annual Report on Form 20-F, filed on April 29, 2015.
|
(42) |
Incorporated by reference to Exhibit 4.34 of the Company's Annual Report on Form 20-F, filed on April 29, 2015.
|
(43) |
Incorporated by reference to Exhibit 99.1 of the Company's Current Report on Form 6-K, filed on January 11, 2019.
|
(44) |
Incorporated by reference to Exhibit 4.87 of the Company's Annual Report on Form 20-F, filed on March 28, 2019.
|
(45) |
Incorporated by reference to Exhibit 4.88 of the Company's Annual Report on Form 20-F, filed on March 28, 2019.
|
(46) |
Incorporated by reference to Exhibit 4.89 of the Company's Annual Report on Form 20-F, filed on March 28, 2019.
|
(47) |
Incorporated by reference to Exhibit 4.90 of the Company's Annual Report on Form 20-F, filed on March 28, 2019.
|
(48) |
Incorporated by reference to Exhibit 4.91 of the Company's Annual Report on Form 20-F, filed on March 28, 2019.
|
(49) |
Incorporated by reference to Exhibit 4.92 of the Company's Annual Report on Form 20-F, filed on March 28, 2019.
|
(50) |
Incorporated by reference to Exhibit 4.96 of the Company's Annual Report on Form 20-F, filed on March 28, 2019.
|
(51) |
Incorporated by reference to Exhibit 4.97 of the Company's Annual Report on Form 20-F, filed on March 28, 2019.
|
(52) |
Incorporated by reference to Exhibit 4.98 of the Company's Annual Report on Form 20-F, filed on March 28, 2019.
|
(53) |
Incorporated by reference to Exhibit 4.99 of the Company's Annual Report on Form 20-F, filed on March 28, 2019.
|
(54) |
Incorporated by reference to Exhibit 4.100 of the Company's Annual Report on Form 20-F, filed on March 28, 2019.
|
(55) |
Incorporated by reference to Exhibit 4.101 of the Company's Annual Report on Form 20-F, filed on March 28, 2019.
|
(56) |
Incorporated by reference to Exhibit 4.102 of the Company's Annual Report on Form 20-F, filed on March 28, 2019.
|
(57) |
Incorporated by reference to Exhibit 4.103 of the Company's Annual Report on Form 20-F, filed on March 28, 2019.
|
(58) |
Incorporated by reference to Exhibit 4.104 of the Company's Annual Report on Form 20-F, filed on March 28, 2019.
|
(59) |
Incorporated by reference to Exhibit 4.105 of the Company's Annual Report on Form 20-F, filed on March 28, 2019.
|
(60) |
Incorporated by reference to Exhibit 4.106 of the Company's Annual Report on Form 20-F, filed on March 28, 2019.
|
(61) |
Incorporated by reference to Exhibit 4.107 of the Company's Annual Report on Form 20-F, filed on March 28, 2019.
|
(62) |
Incorporated by reference to Exhibit 4.108 of the Company's Annual Report on Form 20-F, filed on March 28, 2019.
|
(63) |
Incorporated by reference to Exhibit 4.109 of the Company's Annual Report on Form 20-F, filed on March 28, 2019.
|
(64) |
Incorporated by reference to Exhibit 4.110 of the Company's Annual Report on Form 20-F, filed on March 28, 2019.
|
(65) |
Incorporated by reference to Exhibit 4.111 of the Company's Annual Report on Form 20-F, filed on March 28, 2019.
|
(66) |
Incorporated by reference to Exhibit 4.112 of the Company's Annual Report on Form 20-F, filed on March 28, 2019.
|
(67) |
Incorporated by reference to Exhibit 4.113 of the Company's Annual Report on Form 20-F, filed on March 28, 2019.
|
(68) |
Incorporated by reference to Exhibit 4.114 of the Company's Annual Report on Form 20-F, filed on March 28, 2019.
|
(69) |
Incorporated by reference to Exhibit 4.115 of the Company's Annual Report on Form 20-F, filed on March 28, 2019.
|
(70) |
Incorporated by reference to Exhibit 4.116 of the Company's Annual Report on Form 20-F, filed on March 28, 2019.
|
(71) |
Incorporated by reference to Exhibit 4.118 of the Company's Annual Report on Form 20-F, filed on March 28, 2019.
|
(72) |
Incorporated by reference to Exhibit 4.119 of the Company's Annual Report on Form 20-F, filed on March 28, 2019.
|
(73) |
Incorporated by reference to Exhibit 99.1 of the Company's Current Report on Form 6-K, filed on April 1, 2018.
|
|
TOP SHIPS INC.
|
|
|
(Registrant)
|
|
|
|
|
Date: April 10, 2020
|
By:
|
/s/ Evangelos J. Pistiolis
|
|
|
Evangelos J. Pistiolis
|
|
|
President, Chief Executive Officer, and Director
|
Page
|
|
Report of Independent Registered Public Accounting Firm
|
F-2
|
Consolidated Balance sheets as of December 31, 2018 and 2019
|
F-3
|
Consolidated Statements of Comprehensive loss for the years ended December 31, 2017, 2018 and 2019
|
F-5
|
Consolidated Statements of Stockholders' equity for the years ended December 31, 2017, 2018 and 2019
|
F-7
|
Consolidated Statements of Cash flows for the years ended December 31, 2017, 2018 and 2019
|
F-10
|
Notes to consolidated financial statements
|
F-12
|
TOP SHIPS INC.
|
CONSOLIDATED BALANCE SHEETS
|
DECEMBER 31, 2018 AND 2019
|
(Expressed in thousands of U.S. Dollars - except share and per share data)
|
TOP SHIPS INC.
|
||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
|
||||
FOR THE YEARS ENDED DECEMBER 31, 2017, 2018 AND 2019
|
||||
(Expressed in thousands of U.S. Dollars - except share and per share data)
|
2017
|
2018
|
2019
|
||||||||||
Revenues (including $0, $1,606 and $1,311 respectively, from related party) (Note 19 & 5)
|
39,363
|
41,048
|
66,088
|
|||||||||
EXPENSES:
|
||||||||||||
Voyage expenses (including $487, $511 and $829 respectively, to related party) (Note 12)
|
999
|
1,020
|
3,038
|
|||||||||
Operating lease expense (Note 2 & 6)
|
-
|
-
|
7,054
|
|||||||||
Bareboat charter hire expenses (Note 6)
|
6,282
|
6,282
|
-
|
|||||||||
Amortization of prepaid bareboat charter hire
|
1,657
|
1,657
|
-
|
|||||||||
Vessel operating expenses (including $136, $187 and $247 respectively, to related party) (Note 12)
|
13,444
|
14,826
|
22,786
|
|||||||||
Dry-docking costs
|
-
|
-
|
399
|
|||||||||
Vessel depreciation (Note 4(b))
|
5,744
|
6,390
|
12,392
|
|||||||||
Management fees-related parties (Note 5)
|
4,730
|
7,765
|
2,443
|
|||||||||
General and administrative expenses
|
5,805
|
6,997
|
1,730
|
|||||||||
Other operating (income) (Note 16)
|
(914
|
)
|
-
|
-
|
||||||||
Impairment on vessels (Note 4(c))
|
-
|
-
|
12,310
|
|||||||||
Operating income/(loss)
|
1,616
|
(3,889
|
)
|
3,936
|
||||||||
OTHER EXPENSES:
|
||||||||||||
Interest and finance costs (including $504, $1,053 and $948 respectively, to related party) (Note 13)
|
(15,793
|
)
|
(9,662
|
)
|
(18,077
|
)
|
||||||
(Loss)/gain on derivative financial instruments (Note 15)
|
(301
|
)
|
1,821
|
1,601
|
||||||||
Interest income
|
13
|
130
|
133
|
|||||||||
Other, net
|
1,120
|
180
|
-
|
|||||||||
Equity (loss)/gain in unconsolidated joint ventures
|
(27
|
)
|
291
|
778
|
||||||||
Impairment on unconsolidated joint ventures (Note 18)
|
-
|
-
|
(3,144
|
)
|
||||||||
Total other expenses, net
|
(14,988
|
)
|
(7,240
|
)
|
(18,709
|
)
|
||||||
Net loss
|
(13,372
|
)
|
(11,129
|
)
|
(14,773
|
)
|
||||||
Less: Deemed dividend for beneficial conversion feature of Series E Shares (Note 17)
|
-
|
-
|
(9,339
|
)
|
||||||||
Less: Deemed dividend equivalent on outstanding Series E Shares related to redemption value (Note 17)
|
-
|
-
|
(2,359
|
)
|
||||||||
Less: Series E Shares Dividend (Note 17)
|
-
|
-
|
(2,650
|
)
|
||||||||
Less: Deemed dividend on Series E Shares realized redemptions (Note 17)
|
-
|
-
|
(1,868
|
)
|
||||||||
Net loss attributable to common shareholders
|
(13,372
|
)
|
(11,129
|
)
|
(30,985
|
)
|
||||||
Attributable to:
|
||||||||||||
Common stock holders
|
(13,404
|
)
|
(11,134
|
)
|
(30,985
|
)
|
||||||
Non-controlling interests
|
32
|
5
|
-
|
|||||||||
Loss per common share, basic and diluted (Note 11)
|
(251
|
)
|
(12.20
|
)
|
(10.58
|
)
|
||||||
Other comprehensive income
|
||||||||||||
Effective portion of changes in fair value of interest swap contracts (Note 15)
|
-
|
-
|
(1,361
|
)
|
||||||||
Total other comprehensive loss
|
(13,404
|
)
|
(11,134
|
)
|
(32,346
|
)
|
||||||
Attributable to:
|
||||||||||||
Common stock holders
|
(13,404
|
)
|
(11,134
|
)
|
(32,346
|
)
|
||||||
Non-controlling interests
|
32
|
5
|
-
|
|||||||||
The accompanying notes are an integral part of these consolidated financial statements.
|
Mezzanine Equity
|
Preferred Stock
|
Common Stock
|
|
Accumulated Deficit
|
|||||||
# of Shares
|
Mezzanine Equity
|
# of Shares
|
Par Value
|
# of Shares*
|
Par Value*
|
Additional
Paid-In
Capital*
|
attributable to common stockholders
|
Non-controlling interest
|
Other comprehensive loss
|
Total
|
|
BALANCE, December 31, 2016
|
-
|
-
|
-
|
-
|
1
|
-
|
328,762
|
(283,241)
|
-
|
-
|
45,521
|
Net loss
|
-
|
-
|
-
|
(13,404)
|
32
|
(13,372)
|
|||||
Issuance of common stock pursuant to convertible related party loans (Note 8)
|
-
|
-
|
2,040
|
-
|
-
|
2,040
|
|||||
Issuance of common stock pursuant to the Common Stock Purchase Agreement (Note 10)
|
31,639
|
-
|
38,389
|
-
|
-
|
38,389
|
|||||
Issuance of common stock pursuant to the Crede Common Stock Purchase Agreement (Note 10)
|
357,444
|
4
|
28,629
|
-
|
-
|
28,633
|
|||||
Issuance of common stock pursuant to Series C convertible preferred shares conversions (Note 8 and 10)
|
45,232
|
-
|
8,213
|
-
|
-
|
8,213
|
|||||
Series C convertible preferred stock's beneficial conversion feature (Note 8)
|
-
|
-
|
7,500
|
-
|
-
|
7,500
|
|||||
Issuance of common stock due to exercise of 2014 Warrants (Note 10)
|
10,963
|
-
|
1,540
|
-
|
-
|
1,540
|
|||||
Stock-based compensation
|
-
|
-
|
(25)
|
-
|
-
|
(25)
|
|||||
Non-controlling interest on acquisition of Eco Seven Inc (Note 1)
|
-
|
-
|
5,278
|
5,278
|
|||||||
Reduction of non-controlling interest arising from Company's purchase of additional ownership interest in Eco Seven In. (Note 1)
|
-
|
-
|
(4,125)
|
(4,125)
|
|||||||
Excess of consideration over acquired assets (Note 1)
|
-
|
-
|
(12,909)
|
(12,909)
|
|||||||
Issuance of common stock pursuant to Series B convertible preferred stock conversions reflected in Mezzanine equity (Note 17)
|
901
|
-
|
1,743
|
-
|
-
|
1,743
|
|||||
Issuance of Series D preferred stock (Note 10)
|
100,000
|
1
|
-
|
-
|
-
|
-
|
-
|
1
|
|||
Additional paid-in capital attributed to non-controlling interests
|
-
|
-
|
(1,153)
|
-
|
-
|
(1,153)
|
|||||
BALANCE, December 31, 2017
|
-
|
-
|
100,000
|
1
|
446,180
|
4
|
402,729
|
(296,645)
|
1,185
|
-
|
107,274
|
Net loss
|
-
|
-
|
-
|
-
|
-
|
(11,134)
|
5
|
(11,129)
|
|||
Issuance of common stock pursuant to the Crede Common Stock Purchase Agreement (Note 10)
|
-
|
-
|
402,500
|
4
|
14,785
|
-
|
-
|
14,789
|
|||
Issuance of common stock pursuant to Maxim ATM (Note 10)
|
-
|
-
|
124,543
|
1
|
2,613
|
-
|
-
|
2,614
|
|||
Issuance of common stock due to exercise of 2018 Warrants (Note 10)
|
-
|
-
|
77,650
|
1
|
2,177
|
-
|
-
|
2,178
|
|||
Issuance of common stock due to the 2018 Common Stock Offering (Note 10)
|
-
|
-
|
100,000
|
1
|
2,720
|
-
|
-
|
2,721
|
|||
Purchase of 10% of M/T Stenaweco Elegance (Note 1)
|
-
|
-
|
-
|
-
|
-
|
-
|
(1,190)
|
(1,190)
|
|||
Stock-based compensation
|
-
|
-
|
-
|
-
|
(34)
|
-
|
-
|
(34)
|
|||
Family Trading facility beneficial
conversion feature (Note 8)
|
-
|
-
|
-
|
-
|
15,028
|
-
|
-
|
15,028
|
|||
Elimination of beneficial conversion feature with debt extinguishment (Note 8)
|
-
|
-
|
-
|
-
|
(3,451)
|
-
|
-
|
(3,451)
|
|||
Deemed dividend due to debt extinguishment of FT facility (Note 8)
|
-
|
-
|
-
|
-
|
(2,258)
|
-
|
-
|
(2,258)
|
|||
Excess of consideration over acquired assets (Note 1)
|
-
|
-
|
-
|
-
|
(22,260)
|
-
|
-
|
(22,260)
|
|||
Cancellation of fractional shares due to reverse stock split
|
(1)
|
(1)
|
|||||||||
BALANCE, December 31, 2018
|
-
|
-
|
100,000
|
1
|
1,150,873
|
11
|
412,048
|
(307,779)
|
-
|
-
|
104,281
|
Net loss
|
(14,773)
|
(14,773)
|
|||||||||
Stock-based compensation
|
(34)
|
(34)
|
|||||||||
Issuance of common stock due to exercise of 2018 and 2014 Warrants (Note 10)
|
434,385
|
4
|
4,450
|
4,454
|
|||||||
Issuance of common stock pursuant to the September 2019 Common Stock Offering and associated Traditional Warrant exercises (Note 10)
|
2,910,090
|
30
|
9,259
|
9,289
|
|||||||
Issuance of common stock pursuant to the November 2019 Registered Direct Offering (Note 10)
|
4,200,000
|
42
|
7,600
|
7,642
|
|||||||
Initial measurement of Class B Warrants (Note 15)
|
(997)
|
(997)
|
|||||||||
Excess of consideration over acquired assets (Note 1 and 5)
|
(6,701)
|
(6,701)
|
|||||||||
Issuance of Series E Shares (Note 8 and 17)
|
28,158
|
28,158
|
-
|
||||||||
Redemptions on Series E Shares (Note 17)
|
(12,434)
|
(14,302)
|
-
|
||||||||
Deemed dividend for Series E (Note 17)
|
9,339
|
-
|
|||||||||
Deemed dividend for Series E as part of exchange (Note 8)
|
(9,570)
|
(9,570)
|
|||||||||
Deemed dividend equivalents on Series E Shares related to redemption value (Note 17)
|
4,227
|
(4,227)
|
(4,227)
|
||||||||
Repurchase of beneficial conversion feature with debt extinguishment (Note 8)
|
(8,518)
|
(8,518)
|
|||||||||
Beneficial conversion feature of Series E convertible perpetual preferred stock (Note 17)
|
(9,339)
|
9,339
|
9,339
|
||||||||
Series E Dividends 2019 (Note 17)
|
(2,650)
|
(2,650)
|
|||||||||
Reversal of equity offering costs accrued not payable
|
1,500
|
1,500
|
|||||||||
Other comprehensive loss
|
(1,361)
|
(1,361)
|
|||||||||
BALANCE, December 31, 2019
|
15,724
|
18,083
|
100,000
|
1
|
8,695,348
|
87
|
411,499
|
(322,552)
|
(1,361)
|
87,674
|
The accompanying notes are an integral part of these consolidated financial statements.
|
||
*Adjusted to reflect the reverse stock splits effected in August 2019 (see Note 1 and 10)
|
TOP SHIPS INC.
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
FOR THE YEARS ENDED DECEMBER 31, 2017, 2018 AND 2019
|
(Expressed in thousands of U.S. Dollars)
|
2017
|
2018
|
2019
|
||||||||||
Cash Flows from Operating Activities:
|
||||||||||||
Net loss
|
(13,372
|
)
|
(11,129
|
)
|
(14,773
|
)
|
||||||
Adjustments to reconcile net loss to net cash
|
||||||||||||
provided by operating activities:
|
||||||||||||
Vessel depreciation
|
5,744
|
6,390
|
12,392
|
|||||||||
Other fixed assets depreciation
|
120
|
373
|
50
|
|||||||||
Equity losses/(gains) in unconsolidated joint ventures
|
27
|
(291
|
)
|
(778
|
)
|
|||||||
Non-cash debt conversion expenses
|
842
|
-
|
-
|
|||||||||
Amortization and write off of deferred financing costs
|
1,640
|
1,305
|
1,812
|
|||||||||
Amortization of debt discount
|
7,500
|
2,504
|
324
|
|||||||||
Stock-based compensation expense
|
(25
|
)
|
(34
|
)
|
(34
|
)
|
||||||
Change in fair value of derivative financial instruments
|
(175
|
)
|
(1,821
|
)
|
(1,457
|
)
|
||||||
Write-off of short term debt
|
(1,118
|
)
|
(180
|
)
|
-
|
|||||||
Non-cash operating lease expense
|
-
|
-
|
1,478
|
|||||||||
Amortization of prepaid bareboat charter hire
|
1,657
|
1,657
|
-
|
|||||||||
Other operating income
|
(914
|
)
|
-
|
-
|
||||||||
Impairment on unconsolidated joint ventures
|
-
|
-
|
3,144
|
|||||||||
Impairment on vessels
|
-
|
-
|
12,310
|
|||||||||
(Increase)/Decrease in:
|
||||||||||||
Trade accounts receivable
|
(602
|
)
|
(194
|
)
|
173
|
|||||||
Inventories
|
(62
|
)
|
58
|
(385
|
)
|
|||||||
Prepayments and other
|
436
|
(380
|
)
|
180
|
||||||||
Due from related parties
|
34
|
(75
|
)
|
75
|
||||||||
Increase/(Decrease) in:
|
||||||||||||
Due to related parties
|
(1,034
|
)
|
2,621
|
(1,781
|
)
|
|||||||
Accounts payable
|
(207
|
)
|
695
|
1,462
|
||||||||
Accrued liabilities
|
1,196
|
203
|
1,665
|
|||||||||
Unearned revenue
|
(992
|
)
|
(986
|
)
|
3,337
|
|||||||
Net Cash provided by Operating Activities
|
695
|
716
|
19,194
|
|||||||||
Cash Flows used in Investing Activities:
|
||||||||||||
Advances for vessels under construction and capitalized expenses
|
(6,757
|
)
|
(63,555
|
)
|
(155,090
|
)
|
||||||
Vessel acquisitions
|
(34,671
|
)
|
-
|
(48,140
|
)
|
|||||||
Investments in unconsolidated joint ventures
|
(17,639
|
)
|
(3,681
|
)
|
-
|
|||||||
Purchase of 10% of M/T Stenaweco Elegance
|
-
|
(1,190
|
)
|
-
|
||||||||
Acquisitions of other fixed assets, net
|
-
|
-
|
(36
|
)
|
||||||||
Net Cash used in Investing Activities
|
(59,067
|
)
|
(68,426
|
)
|
(203,266
|
)
|
||||||
Cash Flows from Financing Activities:
|
||||||||||||
Proceeds from debt
|
24,849
|
28,500
|
252,969
|
|||||||||
Proceeds from short-term debt
|
68,790
|
32,783
|
6,760
|
|||||||||
Proceeds from related party debt
|
3,148
|
26,152
|
-
|
|||||||||
Principal payments and prepayments of debt
|
(9,546
|
)
|
(10,221
|
)
|
(50,466
|
)
|
||||||
Proceeds from issuance of Series C convertible preferred stock
|
7,500
|
-
|
-
|
|||||||||
Redemption of Series E Shares
|
-
|
-
|
(14,302
|
)
|
||||||||
Prepayment of related party debt
|
(7,233
|
)
|
(1,408
|
)
|
-
|
|||||||
Prepayment of short term debt
|
-
|
(8,993
|
)
|
(20,280
|
)
|
|||||||
Prepayment of short term Notes
|
-
|
(5,656
|
)
|
-
|
||||||||
Excess of purchase price over book value of vessels
|
(12,909
|
)
|
(22,260
|
)
|
-
|
|||||||
Proceeds from issuance of common stock
|
9,726
|
5,781
|
18,892
|
|||||||||
Proceeds from warrant exercises
|
1,567
|
2,330
|
4,619
|
|||||||||
Equity offering issuance costs
|
(1,342
|
)
|
(536
|
)
|
(1,859
|
)
|
||||||
Payment of financing costs
|
(1,159
|
)
|
(1,713
|
)
|
(6,647
|
)
|
||||||
Derivative financial instrument termination payments
|
-
|
-
|
(5
|
)
|
||||||||
Net Cash provided by Financing Activities
|
83,391
|
44,759
|
189,681
|
|||||||||
Net increase/(decrease) in cash and cash equivalents and restricted cash
|
25,019
|
(22,951
|
)
|
5,609
|
||||||||
Cash and cash equivalents and restricted cash at beginning of year
|
5,594
|
30,613
|
7,662
|
|||||||||
Cash and cash equivalents and restricted cash at end of the year
|
30,613
|
7,662
|
13,271
|
|||||||||
Cash breakdown
|
||||||||||||
Cash and cash equivalents
|
24,081
|
57
|
4,412
|
|||||||||
Restricted cash, current
|
1,283
|
1,290
|
859
|
|||||||||
Restricted cash, non-current
|
5,249
|
6,315
|
8,000
|
|||||||||
SUPPLEMENTAL CASH FLOW INFORMATION
|
||||||||||||
Capital expenditures included in Accounts payable/Accrued liabilities/Due to related parties
|
43
|
555
|
533
|
|||||||||
Interest paid, net of capitalized interest
|
5,103
|
6,322
|
14,866
|
|||||||||
Finance fees included in Accounts payable/Accrued liabilities/Due to related parties
|
372
|
2,109
|
759
|
|||||||||
Equity issuance costs included in liabilities
|
1,108
|
117
|
386
|
|||||||||
Shares issued in exchange for converting debt, interest & finance fees
|
10,890
|
-
|
-
|
|||||||||
Settlement of notes with common stock issued (Note 8 and 10)
|
58,794
|
14,811
|
-
|
|||||||||
Elimination of beneficial conversion feature with debt extinguishment (Note 8)
|
-
|
(3,451
|
)
|
-
|
||||||||
Beneficial conversion feature of Series E perpetual convertible preferred stock (Note 17)
|
-
|
-
|
9,339
|
|||||||||
Settlement of related party debt, interest, finance fees and dividends with issuance of Series E Shares (Note 8 and 17)
|
-
|
-
|
28,158
|
|||||||||
Dividends payable included in Due to related parties (Note 17)
|
-
|
-
|
1,621
|
|||||||||
Excess of consideration over acquired assets (Note 1)
|
-
|
-
|
(6,701
|
)
|
||||||||
Transfer of R.O.U. asset balances after operating lease termination to Vessels, net (Note 4b)
|
-
|
-
|
3,800
|
|||||||||
Carrying value of net assets of companies acquired (Note 1)
|
-
|
-
|
7,649
|
|||||||||
Reversal of equity offering costs not payable
|
-
|
-
|
(1,500
|
)
|
|
1. |
Basis of Presentation and General Information:
|
Companies
|
Date of
Incorporation
|
Country of
Incorporation
|
Activity
|
|
Top Tanker Management Inc.
|
May 2004
|
Marshall Islands
|
Management company
|
Wholly owned Shipowning Companies ("SPC") with vessels in operation during years ended December 31, 2017, 2018 and 2019
|
Date of
Incorporation
|
Country of
Incorporation
|
Vessel
|
Delivery Date
|
||
1
|
Monte Carlo 71 Shipping Company Limited
|
June 2014
|
Marshall Islands
|
M/T Stenaweco Energy
|
July 2014
|
|
2
|
Monte Carlo One Shipping Company Ltd
|
June 2012
|
Marshall Islands
|
M/T Stenaweco Evolution
|
March 2015
|
|
3
|
Monte Carlo Seven Shipping Company Limited
|
April 2013
|
Marshall Islands
|
M/T Stenaweco Excellence
|
May 2016
|
|
4
|
Monte Carlo Lax Shipping Company Limited
|
May 2013
|
Marshall Islands
|
M/T Nord Valiant
|
August 2016
|
|
5
|
Monte Carlo 37 Shipping Company Limited
|
September 2013
|
Marshall Islands
|
M/T Eco Fleet
|
July 2015
|
|
6
|
Monte Carlo 39 Shipping Company Limited
|
December 2013
|
Marshall Islands
|
M/T Eco Revolution
|
January 2016
|
|
7
|
Eco Seven Inc.
|
February 2017
|
Marshall Islands
|
M/T Stenaweco Elegance
|
February 2017
|
|
8
|
Astarte International Inc.
|
April 2017
|
Marshall Islands
|
M/T Eco Palm Desert
|
September 2018
|
9
|
PCH77 Shipping Company Limited
|
September 2017
|
Marshall Islands
|
M/T Eco California
|
January 2019
|
|
10
|
PCH Dreaming Inc.
|
January 2018
|
Marshall Islands
|
M/T Eco Marina Del Ray
|
March 2019
|
|
11
|
South California Inc.
|
January 2018
|
Marshall Islands
|
M/T Eco Bel Air
|
April 2019
|
|
12
|
Malibu Warrior Inc.
|
January 2018
|
Marshall Islands
|
M/T Eco Beverly Hills
|
May 2019
|
Wholly owned SPCs with vessels under construction during year ended December 31, 2019
|
Date of
Incorporation
|
Country of
Incorporation
|
Vessel
|
Scheduled delivery date
|
||
13
|
Santa Catalina Inc.
|
December 2018
|
Marshall Islands
|
M/T Eco Los Angeles
|
February 2020 (delivered)
|
|
14
|
Santa Monica Inc.
|
December 2018
|
Marshall Islands
|
M/T Eco City of Angels
|
February 2020 (delivered)
|
SPC
|
Date of
Incorporation
|
Country of
Incorporation
|
Vessel
|
Built Date
|
|
1
|
City of Athens Pte. Ltd.
|
November 2016
|
Singapore
|
M/T Eco Holmby Hills
|
March 2018
|
2
|
Eco Nine Pte. Ltd.
|
March 2015
|
Singapore
|
M/T Eco Palm Springs
|
May 2018
|
|
a. |
100% of the issued and outstanding shares of PCH Dreaming Inc., a Marshall Islands company that had entered into a new building contract for a high specification 50,000 dwt Medium Range ("MR") product/chemical tanker (M/T Eco
Marina Del Ray or Hull No 8242) under construction at Hyundai Mipo Dockyard Co., Ltd. in South Korea and delivered in March 2019. The Company acquired the shares from an entity affiliated with the Company's Chief Executive Officer,
for an aggregate purchase price of $3,950. The transaction specified that following its delivery, the vessel was going to enter into a time charter with an entity affiliated with the seller for a firm duration of one year at a gross
daily rate of $16,000, with a charterer's option to extend for two additional years at $17,000 and $18,000, respectively. In June 2018 the Company cancelled without penalty the abovementioned time charter and entered into a new 5 year
time charter with Cargill International SA ("Cargill") at a gross daily rate of $15,100.
|
|
b. |
100% of the issued and outstanding shares of South California Inc., a Marshall Islands company that had entered into a new building contract for a high specification, scrubber-equipped, 157,000 dwt Suezmax Crude Oil Carrier (M/T
Eco Bel Air or Hull No 874) under construction at Hyundai Samho Heavy Industries Co. Ltd. in South Korea and scheduled for delivery during April 2019. The Company acquired the shares from an entity affiliated with the Company's Chief
Executive Officer for an aggregate purchase price of $8,950. The transaction specified that following its delivery, the vessel was going to enter into a time charter with an entity affiliated with the Seller for a firm duration of one
year at a gross daily rate of $25,000, with a charterer's option to extend for two additional years at $26,000 and $27,000, respectively. In June 2018 the Company cancelled without penalty the abovementioned time charter and entered
into a new 3 year time charter with BP Shipping Limited at a gross daily rate of $24,500, with a charterer's option to extend for two additional years at $28,000 and $29,500, respectively.
|
|
c. |
100% of the issued outstanding shares of Malibu Warrior Inc., a Marshall Islands company that had entered into a new building contract for a high specification, scrubber-equipped, 157,000 dwt Suezmax Crude Oil Carrier (M/T Beverly
Hills or Hull No 875) under construction at Hyundai Samho Heavy Industries Co. Ltd. in South Korea and scheduled for delivery during May 2019. The Company acquired the shares from an entity affiliated with the Company's Chief
Executive Officer for an aggregate purchase price of $8,950. The transaction specified that following its delivery, the vessel was going to enter into a time charter with an entity affiliated with the Seller for a firm duration of one
year at a gross daily rate of $25,000, with a charterer's option to extend for two additional years at $26,000 and $27,000, respectively. In June 2018 the Company cancelled without penalty the abovementioned time charter and entered
into a new 3 year time charter with BP Shipping Limited at a gross daily rate of $24,500, with a charterer's option to extend for two additional years at $28,000 and $29,500, respectively.
|
|
d. |
10% of the issued and outstanding shares of Eco Seven Inc., the owner of M/T Stena Elegance. The Company acquired the shares from an entity affiliated with the Company's Chief Executive Officer for an aggregate purchase price of
$1,600. As a result of the transaction the Company owns 100% of the issued and outstanding shares of Eco Seven Inc.
|
Consideration in cash
|
23,450
|
|||
Less: Carrying value of net assets of companies acquired
|
1,190
|
|||
Excess of consideration over acquired assets
|
22,260
|
Fair Value of consideration
|
14,350
|
|||
Less: Carrying value of net assets of companies acquired
|
7,649
|
|||
Excess of consideration over acquired assets
|
6,701
|
|
2. |
Significant Accounting Policies:
|
Description
|
Useful Life (years)
|
|||
Cars
|
6
|
|||
Office equipment
|
5
|
|||
Furniture and fittings
|
5
|
|||
Computer equipment
|
3
|
As of January 1, 2019:
|
Under ASC 842
|
Under ASC 840
|
Increase/(decrease)
|
|||||||||
Current assets:
|
-
|
|||||||||||
Prepaid bareboat charter hire
|
-
|
1,656
|
(1,656
|
)
|
||||||||
Other noncurrent assets:
|
-
|
|||||||||||
Prepaid bareboat charter hire
|
-
|
3,621
|
(3,621
|
)
|
||||||||
Fixed assets:
|
||||||||||||
Right of use assets from operating leases
|
21,905
|
-
|
21,905
|
|||||||||
Other current liabilities:
|
||||||||||||
Current portion of Operating lease liabilities
|
4,771
|
-
|
4,771
|
|||||||||
Other noncurrent liabilities:
|
||||||||||||
Non-current portion of Operating lease liabilities
|
11,857
|
-
|
11,857
|
|
3. |
Going Concern:
|
|
4(a) |
Advances for vessels acquisitions / under construction:
|
Advances for vessels acquisitions / under construction
|
||||
Balance, December 31, 2017
|
6,757
|
|||
— Advances paid
|
60,731
|
|||
— Capitalized expenses
|
3,346
|
|||
— Transferred to Vessels
|
(32,090
|
)
|
||
Balance, December 31, 2018
|
38,744
|
|||
— Advances paid
|
158,905
|
|||
— Capitalized expenses
|
3,812
|
|||
— Transferred to Vessels, net
|
(189,220
|
)
|
||
Balance, December 31, 2019
|
12,241
|
|
4(b) |
Vessels, net:
|
Vessel Cost
|
Accumulated Depreciation
|
Net Book Value
|
||||||||||
Balance, December 31, 2017
|
164,694
|
(9,759
|
)
|
154,935
|
||||||||
— Transferred from advances for vessels acquisitions / under construction
|
32,090
|
-
|
32,090
|
|||||||||
— Depreciation
|
-
|
(6,390
|
)
|
(6,390
|
)
|
|||||||
Balance, December 31, 2018
|
196,784
|
(16,149
|
)
|
180,635
|
||||||||
— Transferred from advances for vessels acquisitions / under construction
|
189,220
|
-
|
189,220
|
|||||||||
— Acquisitions
|
51,940
|
-
|
51,940
|
|||||||||
— Impairment
|
(22,254
|
)
|
9,944
|
(12,310
|
)
|
|||||||
— Transferred to Assets held for sale
|
(43,147
|
)
|
-
|
(43,147
|
)
|
|||||||
— Depreciation
|
-
|
(12,392
|
)
|
(12,392
|
)
|
|||||||
Balance, December 31, 2019
|
372,543
|
(18,597
|
)
|
353,946
|
Vessel Name
|
Delivery Date
|
Yard Installments
|
Capitalized Expenses
|
Final Cost
|
|||||||||
M/T Eco Palm Desert
|
September 7, 2018
|
29,994
|
2,096
|
32,090
|
|||||||||
Subtotal 2018
|
29,994
|
2,096
|
32,090
|
||||||||||
M/T Eco California
|
January 30, 2019
|
34,313
|
1,270
|
35,583
|
|||||||||
M/T Eco Marina Del Ray
|
March 13, 2019
|
35,787
|
1,066
|
36,853
|
|||||||||
M/T Eco Bel Air
|
April 5, 2019
|
57,133
|
1,209
|
58,342
|
|||||||||
M/T Eco Beverly Hills
|
May 9, 2019
|
57,133
|
1,309
|
58,442
|
|||||||||
Subtotal 2019
|
184,366
|
4,854
|
189,220
|
|
5. |
Transactions with Related Parties:
|
Year Ended December 31,
|
||
2019
|
Presented in:
|
|
Management fees
|
109
|
Capitalized in Vessels, net / Advances for vessels acquisitions / under construction –Balance sheet
|
2,237
|
Management fees - related parties -Statement of comprehensive loss
|
|
Supervision services fees
|
55
|
Capitalized in Vessels, net / Advances for vessels acquisitions / under construction –Balance sheet
|
Superintendent fees
|
247
|
Vessel operating expenses -Statement of comprehensive loss
|
172
|
Capitalized in Vessels, net / Advances for vessels acquisitions / under construction –Balance sheet
|
|
Accounting and reporting cost
|
240
|
Management fees - related parties -Statement of comprehensive loss
|
Financing fees
|
263
|
Net in Current and Non-current portions of long-term debt – Balance sheet
|
Commission on charter hire agreements
|
829
|
Voyage expenses - Statement of comprehensive loss
|
Total
|
4,152
|
|
6. |
Leases
|
Year ending December 31,
|
Time Charter receipts
|
2020
|
60,369
|
2021
|
33,938
|
2022
|
11,270
|
2023
|
5,512
|
2024
|
1,178
|
Total
|
112,267
|
Year ending December 31,
|
Time Charter receipts
|
2020
|
11,043
|
2021
|
12,776
|
2022
|
12,776
|
2023
|
1,733
|
Total
|
38,328
|
|
7. |
Inventories:
|
December 31, 2018
|
December 31, 2019
|
|
Lubricants
|
522
|
751
|
Consumable stores
|
65
|
97
|
Total
|
587
|
848
|
|
8. |
Debt:
|
Bank / Vessel(s)
|
December 31,
|
|||||||
2018
|
2019
|
|||||||
Total long term debt:
|
||||||||
ABN Facility (M/T Eco Fleet, M/T Eco Revolution and M/T Nord Valiant)
|
52,288
|
-
|
||||||
NORD/LB Facility (M/T Stenaweco Excellence)
|
18,071
|
-
|
||||||
Alpha Bank Facility (M/T Stenaweco Elegance), including Alpha Bank Top-Up Facility
|
20,550
|
20,075
|
||||||
AT Bank Facility (M/T Eco Palm Desert)
|
23,175
|
21,875
|
||||||
AT Bank Bridge Note (Top Ships)
|
-
|
10,500
|
||||||
OFI Facility (M/T Stenaweco Energy, M/T Stenaweco Evolution and M/T Stenaweco Excellence)
|
-
|
69,849
|
||||||
CMBFL Facility (M/T Eco Bel Air and M/T Eco Beverly Hills)
|
-
|
88,560
|
||||||
BoComm Leasing Facility (M/T Nord Valiant and M/T Eco California)
|
-
|
44,466
|
||||||
Cargill Facility (M/T Eco Marina Del Ray)
|
-
|
30,962
|
||||||
Total long term debt
|
114,084
|
286,287
|
||||||
Less: Deferred finance fees
|
(2,516
|
)
|
(7,257
|
)
|
||||
Total long term debt net of deferred finance fees
|
111,568
|
279,030
|
||||||
Presented:
|
||||||||
Current portion of long term debt
|
10,210
|
16,908
|
||||||
Long term debt
|
101,358
|
262,122
|
||||||
Long term debt from related parties:
|
||||||||
Family Trading Facility
|
24,744
|
-
|
||||||
Less: Debt discounts
|
(9,073
|
)
|
-
|
|||||
Long term debt from related parties net of debt discounts
|
15,671
|
-
|
||||||
Short Term Debt:
|
||||||||
AT Bank second predelivery facility (M/T Eco California)
|
10,140
|
-
|
||||||
Alpha Bank predelivery facility (M/T Eco Marina Del Ray)
|
3,380
|
-
|
||||||
Less: Deferred finance fees
|
(104
|
)
|
-
|
|||||
Short term debt net of deferred finance fees
|
13,416
|
-
|
||||||
Debt related to Vessels held for sale:
|
||||||||
ABN Facility (M/T Eco Fleet and M/T Eco Revolution)
|
-
|
30,300
|
||||||
Less: Deferred finance fees
|
-
|
(323
|
)
|
|||||
Debt related to Vessels held for sale net of deferred finance fees
|
-
|
29,977
|
||||||
Total Debt net of deferred finance fees and debt discounts
|
140,655
|
309,007
|
|
• |
First priority mortgage over M/T Eco Fleet, M/T Eco Revolution and M/T Nord Valiant;
|
|
• |
Assignment of insurance and earnings of the mortgaged vessels;
|
|
• |
Specific assignment of any time charters with duration of more than 12 months;
|
|
• |
Corporate guarantee of Top Ships Inc.;
|
|
• |
Pledge of the shares of the shipowning subsidiaries;
|
|
• |
Pledge over the earnings account of the vessels.
|
|
• |
Intercreditor deed;
|
|
• |
Third preferred ship mortgage over M/T Stenaweco Elegance;
|
|
• |
Third priority general assignment of the earnings, insurances and any requisition compensation of M/T Stenaweco Elegance;
|
|
• |
Third priority assignment of any time charterparty of M/T Stenaweco Elegance for a period of more than twelve (12) months;
|
|
• |
Corporate guarantee of the Company;
|
|
• |
Second priority pledge over the earnings account of the vessel;
|
|
• |
Corporate guarantee of the Company;
|
|
• |
Second priority perfected mortgage on M/T Eco Palm Desert Vessel;
|
|
• |
Second rank priority assignment of insurance and earnings of the mortgaged vessel;
|
|
• |
Second rank priority assignment of any time charters with duration of more than 12 months;
|
|
• |
Second priority pledge of the shares of the shipowning subsidiary of the mortgaged vessel;
|
|
• |
Second priority pledge over the earnings account of the vessel.
|
Agreement date
|
Amount drawn
|
Interest
|
Amount settled
|
Amounts forgiven
|
||||||||||||
November 13, 2017
|
17,500
|
11
|
(17,500
|
)
|
-
|
|||||||||||
December 14, 2017
|
24,269
|
75
|
(24,089
|
)
|
(180
|
)
|
||||||||||
41,769
|
86
|
(41,589
|
)
|
(180
|
)
|
|
• |
Assignment to the bank of the newbuilding contract and of the respective refund guarantee of M/T Eco California;
|
|
• |
Corporate guarantee of Top Ships Inc.;
|
|
• |
Pledge of the shares of the subsidiary owning the newbuilding contract;
|
|
a. |
the price per share issued upon an equity offering of the Company;
|
|
b. |
the exercise price of warrants or options for common shares;
|
|
c. |
the conversion price of any convertible security into common shares; or
|
|
d. |
the implied exchange price of the common shares pursuant to an asset to equity or liability to equity swap,
|
|
• |
for M/T Stenaweco Excellence: 120 consecutive monthly installments of $160, commencing from draw down, and a balloon payment of $6,400 payable together with the last installment,
|
|
• |
for M/T Stenaweco Energy: 120 consecutive monthly installments of $131, commencing from draw down, and a balloon payment of $5,700 payable together with the last installment,
|
|
• |
for M/T Stenaweco Evolution: 120 consecutive monthly installments of $153, commencing from draw down, and a balloon payment of $6,100 payable together with the last installment,
|
Years
|
||||
December 31, 2020
|
18,112
|
|||
December 31, 2021
|
28,735
|
|||
December 31, 2022
|
17,390
|
|||
December 31, 2023
|
33,523
|
|||
December 31, 2024
|
53,608
|
|||
December 31, 2025 and thereafter
|
134,919
|
|||
Total
|
286,287
|
|
9. |
Commitments and Contingencies:
|
|
10. |
Common and Preferred Stock, Additional Paid-In Capital and Dividends:
|
|
• |
Issuance of common shares: if the Company issues, sells or is deemed to have issued or sold any common shares for a consideration per share less than the exercise price of the Class B Warrants then the latter shall be
reduced to match the reduced consideration per share.
|
|
• |
Issuance of options or convertible securities: if the Company issues or sells any options at a strike price that is lower than the exercise price of the Class B Warrants then the latter will be reduced to match the strike
price of the options. If the Company issues convertible securities that end up converting at a price per share that is lower than the exercise price of the Class B Warrants then the latter will be reduced to match that conversion
price per share.
|
|
• |
Change in option price or rate of conversion: if the purchase or exercise price provided for in any of the Company's options, the additional consideration, if any, payable upon the issue, conversion, exercise or exchange of
any of the Company's convertible securities, or the rate at which any convertible securities of the Company are convertible into or exercisable or exchangeable for common shares increases or decreases at any time, then the Class B
Warrants' exercise price will be adjusted to such price, provided that it is lower than the existing at the time Class B Warrants' exercise price.
|
|
• |
Other events: if the Company takes any action that results in the dilution of the warrant holder not covered by the abovementioned round down protection measures (including, the granting of stock appreciation rights,
phantom stock rights or other rights with equity features), then the Company shall determine and implement an appropriate adjustment in the exercise price so as to protect the rights of the warrant holder.
|
|
11. |
Loss Per Common Share:
|
Year Ended December 31,
|
||||||||||||
2017
|
2018
|
2019
|
||||||||||
Income:
|
||||||||||||
Net loss attributable to common shareholders
|
(13,404
|
)
|
(11,134
|
)
|
(30,985
|
)
|
||||||
Earnings per share:
|
||||||||||||
Weighted average common shares outstanding, basic and diluted
|
53,169
|
909,072
|
2,927,608
|
|||||||||
Loss per share, basic and diluted
|
(251
|
)
|
(12.20
|
)
|
(10.58
|
)
|
|
12. |
Voyage and Vessel Operating Expenses and Drydock expenses:
|
Voyage Expenses
|
Year Ended December 31,
|
|||||||||||
2017
|
2018
|
2019
|
||||||||||
Port charges / other voyage expenses
|
10
|
1
|
678
|
|||||||||
Bunkers
|
15
|
18
|
830
|
|||||||||
Commissions (including $487, $511 and $829 respectively, to related party)
|
974
|
1,001
|
1,530
|
|||||||||
Total
|
999
|
1,020
|
3,038
|
Vessel Operating Expenses
|
Year Ended December 31,
|
|||||||||||
2017
|
2018
|
2019
|
||||||||||
Crew wages and related costs
|
9,228
|
10,185
|
15,771
|
|||||||||
Insurance
|
777
|
761
|
1,180
|
|||||||||
Repairs and maintenance (including $136, $187 and $247 respectively, to related party)
|
973
|
1,120
|
1,528
|
|||||||||
Spares and consumable stores
|
2,374
|
2,645
|
4,148
|
|||||||||
Registration and tonnage taxes (Note 16)
|
92
|
115
|
159
|
|||||||||
Total
|
13,444
|
14,826
|
22,786
|
|
13. |
Interest and Finance Costs:
|
Interest and Finance Costs
|
Year Ended December 31,
|
|||||||||||
2017
|
2018
|
2019
|
||||||||||
Interest on debt (including $138, $874 and $928, respectively, to related party)
|
5,724
|
7,373
|
16,586
|
|||||||||
Bank charges and loan commitment fees (including $366, $179 and $20, respectively, to related party)
|
440
|
262
|
282
|
|||||||||
Amortization and write-off of financing fees
|
1,640
|
1,305
|
1,812
|
|||||||||
Amortization of debt discount
|
7,500
|
2,504
|
324
|
|||||||||
Non-cash debt conversion expenses
|
842
|
-
|
-
|
|||||||||
Total
|
16,146
|
11,444
|
19,004
|
|||||||||
Less interest capitalized
|
(353
|
)
|
(1,782
|
)
|
(927
|
)
|
||||||
Total
|
15,793
|
9,662
|
18,077
|
|
14. |
Income Taxes:
|
|
15. |
Financial Instruments:
|
|
a) |
Interest rate risk: The Company is subject to market risks relating to changes in interest rates relating to debt outstanding under the bank loans on which it pays interest based on LIBOR
plus a margin. In order to manage part or whole of its exposure to changes in interest rates due to the floating rate indebtedness, the Company has entered into interest rate swap agreements with ABN Amro Bank and Alpha Bank and might
enter into more interest rate swap agreements in the future.
|
|
b) |
Credit risk: Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist principally of cash. The Company places its temporary cash
investments, consisting mostly of deposits, with high credit qualified financial institutions. The Company performs periodic evaluations of the relative credit standing of those financial institutions with which it places its
temporary cash investments.
|
|
c) |
Fair value:
|
2014 Warrants Outstanding
December 31, 2018
|
2014 Warrant Shares Outstanding
December 31, 2018
|
Term
|
Warrant Exercise Price*
|
Fair Value – Liability
December 31, 2018
|
1,976,389
|
424,923
|
5 years
|
$11.60
|
1,915
|
Class B Warrants Outstanding
December 31, 2019
|
Class B Warrant Shares Outstanding
December 31, 2019
|
Term
|
Warrant Exercise Price*
|
Fair Value – Liability
December 31, 2019
|
4,200,000
|
4,200,000
|
18 months
|
$1.00
|
609
|
Fair Value Measurement at Reporting Date
|
||||||||||||||||
As of December 31, 2018
|
Total
|
Using Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Other
Unobservable
Inputs
(Level 3)
|
||||||||||||
Non-current asset (Interest Rate Swaps)
|
1,153
|
-
|
1,153
|
-
|
||||||||||||
Non-current liability (Interest Rate Swaps)
|
359
|
-
|
359
|
|||||||||||||
Current liability (2014 Warrants)
C
|
1,915
|
-
|
-
|
1,915
|
||||||||||||
As of December 31, 2019
|
||||||||||||||||
Current asset (Interest Rate Swaps)
|
82
|
-
|
82
|
-
|
||||||||||||
Current liability (Interest Rate Swaps)
|
113
|
-
|
113
|
|||||||||||||
Non-current liability (Interest Rate Swaps)
|
985
|
-
|
985
|
|||||||||||||
Non-current liability (Class B Warrants)
|
609
|
609
|
Fair Value Measurement at Reporting Date
|
||||||||||||||||
Total
|
Using Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Other
Unobservable
Inputs
(Level 3)
|
|||||||||||||
As of December 31, 2019
|
||||||||||||||||
Assets held for sale
|
43,271
|
-
|
43,271
|
-
|
||||||||||||
Investments in unconsolidated joint ventures
|
19,306
|
-
|
19,306
|
-
|
Closing balance – December 31, 2017
|
3,332
|
Change in fair value of 2014 Warrants, included in (Loss)/gain on derivative financial instruments in the consolidated statements of comprehensive loss
|
(1,417)
|
Closing balance – December 31, 2018
|
1,915
|
Change in fair value of 2014 Warrants, included in (Loss)/gain on derivative financial instruments in the consolidated statements of comprehensive loss
|
(1,915)
|
Initial measurement of Class B Warrants at inception
|
997
|
Change in fair value of Class B Warrants, included in (Loss)/gain on derivative financial instruments in the consolidated statements of comprehensive loss
|
(388)
|
Closing balance – December 31, 2019
|
609
|
Amount of gain/(loss) recognized in Statement of comprehensive
(loss)/gain located in Loss on derivate financial instruments
|
||||||||||||
2017
|
2018
|
2019
|
||||||||||
Interest rate swaps- change in fair value
|
431
|
404
|
(841
|
)
|
||||||||
Interest rate swaps– realized gain/(loss)
|
(476
|
)
|
-
|
139
|
||||||||
2014 Warrants- change in fair value
|
(256
|
)
|
1,417
|
1,915
|
||||||||
Class B Warrants- change in fair value
|
-
|
-
|
388
|
|||||||||
Total
|
(301
|
)
|
1,821
|
1,601
|
Unrealized (Loss) on cash
flow hedges |
||||
Balance, December 31, 2018
|
-
|
|||
Effective portion of changes in fair value of interest swap contracts
|
(1,361
|
)
|
||
Balance, December 31, 2019
|
(1,361
|
)
|
|
16. |
Other operating income
|
|
17. |
Mezzanine Equity
|
|
18. |
Investments in unconsolidated joint ventures
|
December 31, 2018
|
December 31, 2019
|
|||||||||||||||
City of Athens
|
Eco Nine
|
City of Athens
|
Eco Nine
|
|||||||||||||
Current assets
|
898
|
684
|
2,097
|
1,888
|
||||||||||||
Non-current assets
|
30,853
|
30,975
|
29,730
|
29,852
|
||||||||||||
Current liabilities
|
1,530
|
1,762
|
1,780
|
2,013
|
||||||||||||
Long-term liabilities
|
15,627
|
15,900
|
14,996
|
15,414
|
||||||||||||
Net operating revenues
|
4,182
|
3,229
|
5,320
|
5,332
|
||||||||||||
Net profit
|
396
|
185
|
849
|
706
|
||||||||||||
Net profit attributable to the Company
|
198
|
93
|
425
|
353
|
|
19. |
Revenues
|
2017
|
2018
|
2019
|
||||||||||
Time charter revenues
|
39,363
|
39,442
|
61,695
|
|||||||||
Time charter revenues from related parties
|
-
|
1,606
|
1,311
|
|||||||||
Voyage charter revenue
|
-
|
-
|
3,082
|
|||||||||
Total
|
39,363
|
41,048
|
66,088
|
|
20. |
Subsequent Events
|
|
• |
not be redeemable;
|
|
• |
entitle holders to quarterly dividend payments in an amount per share equal to the aggregate per share amount of all cash dividends, and the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions
other than a dividend payable in our common shares or a subdivision of the our outstanding common shares (by reclassification or otherwise), declared on our common shares since the immediately preceding quarterly dividend payment date;
and
|
|
• |
entitle holders to one vote on all matters submitted to a vote of our shareholders.
|
|
• |
Flip In. If an Acquiring Person obtains beneficial ownership of 15% or more of our common shares, then each Right will entitle the holder thereof to purchase, for the Exercise Price, a number
of our common shares (or, in certain circumstances, cash, property or other of our securities) having a then-current market value of twice the Exercise Price. However, the Rights are not exercisable following the occurrence of the
foregoing event until such time as the Rights are no longer redeemable by us, as further described below.
|
|
• |
Flip Over. If, after an Acquiring Person obtains 15% or more of our common shares, (i) we merge into another entity; (ii) an
acquiring entity merges into us; or (iii) we sell or transfer 50% or more of its assets, cash flow or earning power, then each Right (except for Rights that have previously been voided as set forth above) will entitle the holder thereof
to purchase, for the Exercise Price, a number of our common shares of the person engaging in the transaction having a then-current market value of twice the Exercise Price.
|
|
• |
Notional Shares. Shares held by affiliates and associates of an Acquiring Person, including certain entities in which the
Acquiring Person beneficially owns a majority of the equity securities, and Notional Common Shares (as defined in the Rights Agreement) held by counterparties to a Derivatives Contract (as defined in the Rights Agreement) with an
Acquiring Person, will be deemed to be beneficially owned by the Acquiring Person.
|
|
||
Marshall Islands
|
|
Delaware
|
Shareholder Meetings
|
||
Held at a time and place as designated in the bylaws.
|
|
May be held at such time or place as designated in the certificate of incorporation or the bylaws, or if not so designated, as determined by the board of directors.
|
Special meetings of the shareholders may be called by the board of directors or by such person or persons as may be authorized by the articles of incorporation or by the bylaws.
|
|
Special meetings of the shareholders may be called by the board of directors or by such person or persons as may be authorized by the certificate of incorporation or by the bylaws.
|
May be held within or without the Marshall Islands.
|
|
May be held within or without Delaware.
|
|
|
|
Marshall Islands
|
|
Delaware
|
Notice: | Notice: | |
Whenever shareholders are required to take any action at a meeting, written notice of the meeting shall be given which shall state the place, date and hour of the meeting and, unless it is an annual meeting,
indicate that it is being issued by or at the direction of the person calling the meeting. Notice of a special meeting shall also state the purpose for which the meeting is called.
|
|
Whenever shareholders are required to take any action at a meeting, a written notice of the meeting shall be given which shall state the place, if any, date and hour of the meeting, and the means of remote
communication, if any.
|
A copy of the notice of any meeting shall be given personally, sent by mail or by electronic mail not less than 15 nor more than 60 days before the meeting.
|
|
Written notice shall be given not less than 10 nor more than 60 days before the meeting.
|
Shareholders’ Voting Rights
|
||
Unless otherwise provided in the articles of incorporation, any action required to be taken at a meeting of shareholders may be taken without a meeting, without prior notice and without a vote, if a consent in
writing, setting forth the action so taken, is signed by all the shareholders entitled to vote with respect to the subject matter thereof, or if the articles of incorporation so provide, by the holders of outstanding shares having not less
than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.
|
|
Any action required to be taken at a meeting of shareholders may be taken without a meeting if a consent for such action is in writing and is signed by shareholders having not fewer than
the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.
|
Any person authorized to vote may authorize another person or persons to act for him by proxy.
|
|
Any person authorized to vote may authorize another person or persons to act for him by proxy.
|
|
||
Unless otherwise provided in the articles of incorporation or bylaws, a majority of shares entitled to vote constitutes a quorum. In no event shall a quorum consist of fewer than one-third of the shares
entitled to vote at a meeting.
|
|
For stock corporations, the certificate of incorporation or bylaws may specify the number of shares required to constitute a quorum but in no event shall a quorum consist of less than one-third of shares
entitled to vote at a meeting. In the absence of such specifications, a majority of shares entitled to vote shall constitute a quorum.
|
When a quorum is once present to organize a meeting, it is not broken by the subsequent withdrawal of any shareholders.
|
|
When a quorum is once present to organize a meeting, it is not broken by the subsequent withdrawal of any shareholders.
|
The articles of incorporation may provide for cumulative voting in the election of directors.
|
|
The certificate of incorporation may provide for cumulative voting in the election of directors.
|
|
|
|
Marshall Islands
|
|
Delaware
|
Merger or Consolidation
|
||
Any two or more domestic corporations may merge into a single corporation if approved by the board and if authorized by a majority vote of the holders of outstanding shares at a shareholder meeting.
|
Any two or more corporations existing under the laws of the state may merge into a single corporation pursuant to a board resolution and upon the majority vote by
shareholders of each constituent corporation at an annual or special meeting.
|
|
Any sale, lease, exchange or other disposition of all or substantially all the assets of a corporation, if not made in the corporation’s usual or regular course of business, once approved by the board, shall be
authorized by the affirmative vote of two-thirds of the shares of those entitled to vote at a shareholder meeting.
|
|
Every corporation may at any meeting of the board sell, lease or exchange all or substantially all of its property and assets as its board deems expedient and for the best interests of the corporation when so
authorized by a resolution adopted by the holders of a majority of the outstanding stock of the corporation entitled to vote.
|
Any domestic corporation owning at least 90% of the outstanding shares of each class of another domestic corporation may merge such other corporation into itself without the authorization of the shareholders of
any corporation.
|
|
Any corporation owning at least 90% of the outstanding shares of each class of another corporation may merge the other corporation into itself and assume all of its obligations without the vote or consent of
shareholders; however, in case the parent corporation is not the surviving corporation, the proposed merger shall be approved by a majority of the outstanding stock of the parent corporation entitled to vote at a duly called shareholder
meeting.
|
Any mortgage, pledge of or creation of a security interest in all or any part of the corporate property may be authorized without the vote or consent of the shareholders, unless otherwise provided for in the
articles of incorporation.
|
|
Any mortgage or pledge of a corporation’s property and assets may be authorized without the vote or consent of shareholders, except to the extent that the certificate of incorporation otherwise provides.
|
Directors
|
||
The board of directors must consist of at least one member.
|
|
The board of directors must consist of at least one member.
|
The number of board members may be changed by an amendment to the bylaws, by the shareholders, or by action of the board under the specific provisions of a bylaw.
|
|
The number of board members shall be fixed by, or in a manner provided by, the bylaws, unless the certificate of incorporation fixes the number of directors, in which case a change in the number shall be made
only by an amendment to the certificate of incorporation.
|
If the board is authorized to change the number of directors, it can only do so by a majority of the entire board and so long as no decrease in the number shall shorten the term of any incumbent director.
|
|
If the number of directors is fixed by the certificate of incorporation, a change in the number shall be made only by an amendment of the certificate.
|
Removal:
|
|
Removal:
|
Any or all of the directors may be removed for cause by vote of the shareholders.
|
|
Any or all of the directors may be removed, with or without cause, by the holders of a majority of the shares entitled to vote unless the certificate of incorporation otherwise provides.
|
If the articles of incorporation or the bylaws so provide, any or all of the directors may be removed without cause by vote of the shareholders.
|
|
In the case of a classified board, shareholders may effect removal of any or all directors only for cause.
|
Marshall Islands
|
|
Delaware
|
Dissenters’ Rights of Appraisal
|
||
Shareholders have a right to dissent from any plan of merger, consolidation or sale of all or substantially all assets not made in the usual course of business, and receive payment of the fair value of their
shares. However, the right of a dissenting shareholder under the BCA to receive payment of the appraised fair value of his shares shall not be available for the shares of any class or series of stock, which shares or depository receipts in
respect thereof, at the record date fixed to determine the shareholders entitled to receive notice of and to vote at the meeting of the shareholders to act upon the agreement of merger or consolidation, were either (i) listed on a securities
exchange or admitted for trading on an interdealer quotation system or (ii) held of record by more than 2,000 holders. The right of a dissenting shareholder to receive payment of the fair value of his or her shares shall not be available for
any shares of stock of the constituent corporation surviving a merger if the merger did not require for its approval the vote of the shareholders of the surviving corporation.
|
|
Appraisal rights shall be available for the shares of any class or series of stock of a corporation in a merger or consolidation, subject to limited exceptions, such as a merger or consolidation of corporations
listed on a national securities exchange in which listed stock is offered for consideration is (i) listed on a national securities exchange or (ii) held of record by more than 2,000 holders.
|
A holder of any adversely affected shares who does not vote on or consent in writing to an amendment to the articles of incorporation has the right to dissent and to receive payment for such shares if the
amendment:
|
|
|
• Alters or abolishes any preferential right of any outstanding shares having preference;
or
|
|
|
• Creates, alters, or abolishes any provision or right in respect to the redemption of any
outstanding shares; or
|
|
|
• Alters or abolishes any preemptive right of such holder to acquire shares or other
securities; or
|
|
|
|
||
• Excludes or limits the right of such holder to vote on any matter, except as such right
may be limited by the voting rights given to new shares then being authorized of any existing or new class.
|
|
|
Shareholder’s Derivative Actions
|
||
An action may be brought in the right of a corporation to procure a judgment in its favor, by a holder of shares or of voting trust certificates or of a beneficial interest in such shares or certificates. It
shall be made to appear that the plaintiff is such a holder at the time of bringing the action and that he was such a holder at the time of the transaction of which he complains, or that his shares or his interest therein devolved upon him by
operation of law.
|
|
In any derivative suit instituted by a shareholder of a corporation, it shall be averred in the complaint that the plaintiff was a shareholder of the corporation at the time of the transaction of which he
complains or that such shareholder’s stock thereafter devolved upon such shareholder by operation of law.
|
A complaint shall set forth with particularity the efforts of the plaintiff to secure the initiation of such action by the board or the reasons for not making such effort.
|
|
Other requirements regarding derivative suits have been created by judicial decision, including that a shareholder may not bring a derivative suit unless he or she first demands that the corporation sue on its
own behalf and that demand is refused (unless it is shown that such demand would have been futile).
|
Such action shall not be discontinued, compromised or settled, without the approval of the High Court of the Republic of the Marshall Islands.
|
|
|
Reasonable expenses including attorney’s fees may be awarded if the action is successful.
|
|
|
Marshall Islands
|
|
Delaware
|
A corporation may require a plaintiff bringing a derivative suit to give security for reasonable expenses if the plaintiff owns less than 5% of any class of outstanding shares or holds voting trust certificates
or a beneficial interest in shares representing less than 5% of any class of such shares and the shares, voting trust certificates or beneficial interest of such plaintiff has a fair value of $50,000 or less.
|
|
(1) |
TOP SHIPS INC. (as Issuer);
|
(2) |
AMSTERDAM TRADE BANK N.V. (as Security Agent);
|
(3) |
AMSTERDAM TRADE BANK N.V. (as Agent and Registrar);
|
(4) |
AMSTERDAM TRADE BANK N.V. (as Note Purchaser);
|
(5) |
ASTARTE INTERNATIONAL INC. (as Guarantor); and
|
(6) |
SANTA CATALINA INC. (incorporated in the Republic of the Marshall Islands
with registered number 99145) and SANTA MONICA MARINE INC. (incorporated in the Republic of the Marshall Islands with registered number
99146) (each a New Guarantor and, together, the New
Guarantors).
|
A. |
Pursuant to a Note Purchase Deed between the Issuer, the Security Agent, the Agent, the Registrar, the Note Purchaser and the Guarantor originally dated 21 March 2019 (as
amended and restated from time to time) (the Note Purchase Deed), the Issuer issued US$10,500,000 in principal amount of floating rate notes
(the Notes) to the Note Purchaser. The Note Purchaser holds all the Notes as at the date of this Deed of Amendment.
|
B. |
The Parties have agreed to give effect to the amendments and waiver set out in this Deed of Amendment including, without limitation, the extension of the Final Maturity
Date of the Notes by 12 months and the assumption by the New Guarantors of joint and several obligations together with the Guarantor under the Note Purchase Deed.
|
1 |
Definitions and interpretation
|
1.1 |
Unless expressly defined otherwise herein, terms defined in the Note Purchase Deed have the same meaning when used in this Deed of Amendment.
|
1.2 |
The provisions of clause 1.1 (Definitions and interpretation) of the Note
Purchase Deed apply to this Deed of Amendment as though they were set out in full in this Deed of Amendment.
|
1.3 |
The Note Purchaser hereby confirms that it is the holder of all the Notes and it hereby agrees to, and (where applicable) hereby directs the Security Agent, the Agent and
Registrar to (and each of the Security Agent, Agent and Registrar does so), give effect to the amendments and grant the waiver set out in this Deed of Amendment.
|
2 |
Amendment and Waiver
|
2.1 |
With effect from the date of this Deed of Amendment, but subject to the satisfaction of the condition precedent in clause 5.1(x), the definition of Final Maturity Date
shall be deleted and replaced with the following, and such term shall be construed accordingly for all purposes in the Finance Documents with effect from the date of this Deed of Amendment:
|
2.2 |
Each of the Parties (other than the Issuer) consents to the raising by the Issuer of, cumulatively, up to US$15,000,000 (the Permitted Fundraising Limit) in additional equity capital from its shareholders in one or more fundraisings at any time on or after 30 June 2019 (each, a Permitted Fundraising) and, in respect of any Permitted Fundraising only (and subject always to the Permitted Fundraising Limit), waives the obligation of the Issuer
under clause 8.2(b) (Mandatory Redemption) of the Note Purchase Deed to make any prepayment of the Notes in consequence, or using the
proceeds, of such Permitted Fundraising. For the avoidance of doubt, any raising of equity capital by the Issuer that exceeds the Permitted Fundraising Limit, or that occurred prior to 30 June 2019, must comply with clause 8.2(b) (Mandatory Redemption) of the Note Purchase Deed, and is not waived by this clause.
|
2.3 |
Each of the Parties (other than the Issuer) consents to the application of the net proceeds of any such Permitted Fundraising (subject always to the Permitted Fundraising
Limit) towards the prepayment of the Family Trading Facility (or any other Financial Indebtedness owing by the Issuer to Family Trading Inc. or an Affiliate of Family Trading Inc.), or towards any dividend or other payment in respect of
any preferred shares of the Issuer held or acquired by Family Trading Inc. (or an Affiliate of Family Trading Inc.) and/or towards the Issuer’s general corporate purposes (including, without limitation, the funding of additional vessel
acquisitions).
|
2.4 |
The Guarantor consents to the amendments and waiver given pursuant to this Deed of Amendment and hereby waives all defences to which it might otherwise be entitled as a
result of the entry into and the performance of the terms of this Deed of Amendment. This waiver of defences is in addition to and without prejudice to the provisions of clause 14.4 (Waiver of Defences) of the Note Purchase Deed.
|
3 |
Guarantee and Indemnity
|
3.1 |
Guarantee and indemnity Each New Guarantor, jointly and severally with the other New Guarantor and the Guarantor, irrevocably and unconditionally:
|
|
(a) |
guarantees to the Security Agent (as trustee for the Finance Parties) and the other Finance Parties punctual performance by each other Obligor of all such Obligor’s
obligations under the Finance Documents;
|
|
(b) |
undertakes with the Security Agent (as trustee for the Finance Parties) and the other Finance Parties that whenever another Obligor (other than the Charterer) does not pay
any amount when due under or in connection with any Finance Document, it shall immediately on demand pay that amount as if it was the principal obligor; and
|
|
(c) |
agrees with the Security Agent (as trustee for the Finance Parties) and the other Finance Parties that if any obligation guaranteed by it is or becomes unenforceable,
invalid or illegal, it will, as an independent and primary obligation indemnify that Finance Party immediately on demand against any cost, loss or liability it incurs as a result of another Obligor (other than the Charterer) not paying
any amount which would, but for such unenforceability, invalidity or illegality, have been payable by such Obligor under any Finance Document on the date when it would have been due. The amount payable under this indemnity will not exceed
the amount that would have been payable under this clause 3.1 if the amount claimed had been recoverable on the basis of a guarantee.
|
3.2 |
Continuing guarantee
|
3.3 |
Reinstatement
|
3.4 |
Waiver of defences
|
|
(a) |
any time, waiver or consent granted to, or composition with, any Obligor or other person;
|
|
(b) |
the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of any other Obligor;
|
|
(c) |
the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of,
any Obligor or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;
|
|
(d) |
any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor or any other person;
|
|
(e) |
any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of any Finance Document or any other
document or security including without limitation any change in the purpose of, any extension of or any increase in any facility or the addition of any new facility under any Finance Document or other document or security;
|
|
(f) |
any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security; or
|
|
(g) |
any insolvency or similar proceedings.
|
3.5 |
New Guarantor’s intent
|
3.6 |
Immediate recourse
|
3.7 |
Appropriations
|
|
(a) |
refrain from applying or enforcing any other moneys, security or rights held or received by that Finance Party (or any trustee or agent on its behalf) in respect of those
amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and the New Guarantors shall not be entitled to the benefit of the same; and
|
|
(b) |
hold in an interest-bearing suspense account any moneys received from a New Guarantor or on account of a New Guarantor’s liability under this clause 3.
|
3.8 |
Deferral of New Guarantor’s rights
|
|
(a) |
Until all amounts which may be or become payable by the Obligors (other than the Charterer) under or in connection with the Finance Documents have been irrevocably paid in
full and unless the Agent otherwise directs, each New Guarantor will not exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents or by reason of any amount being payable, or
liability arising, under this clause 3:
|
|
(i) |
to be indemnified by another Obligor;
|
|
(ii) |
to claim any contribution from any other guarantor of any Obligor’s obligations under the Finance Documents;
|
|
(iii) |
to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under the Finance Documents or of any other
guarantee or security taken pursuant to, or in connection with, the Finance Documents by any Finance Party;
|
|
(iv) |
to bring legal or other proceedings for an order requiring any Obligor to make any payment, or perform any obligation, in respect of which a New Guarantor has given a
guarantee, undertaking or indemnity under this clause 3;
|
|
(v) |
to exercise any right of set-off against any other Obligor; and/or (vi)to claim or prove as a creditor of any other Obligor in competition with any Finance Party.
|
|
(b) |
If a New Guarantor receives any benefit, payment or distribution in relation to such rights it will promptly pay an equal amount to the Agent for application in accordance
with the Payment Mechanics. This only applies until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full.
|
3.9 |
Additional security
|
3.10 |
Deemed obligations of New Guarantors
|
|
(a) |
Each of the New Guarantors agrees to be bound by the terms and conditions of the Note Purchase Deed applicable to the Guarantor and the Obligors mutatis mutandis as if it were a party to the Note Purchase Deed in each such capacity with effect from the date of this Deed of Amendment, save in relation to the
creation or maintenance of any Security Interest on the basis that the obligations of the New Guarantors arising pursuant to this Deed of Amendment are not intended by the Parties to be, and are not, Secured Obligations.
|
|
(b) |
Subject as provided in clause 3.10(a), all of the representations and warranties set out in this Schedule 3 (Representations and Warranties of the Obligors) of the Note Purchase
|
|
(c) |
Each representation or warranty deemed to be made by each New Guarantor after the date of this Deed of Amendment shall be deemed to be made by reference to the facts and
circumstances existing at the date the representation or warranty is deemed to be made.
|
4 |
Continuing obligations
|
4.1 |
The provisions of the Note Purchase Deed and the other Finance Documents will, save to the extent amended and waived pursuant to this Deed of Amendment, continue and
remain in full force and effect.
|
5 |
Miscellaneous
|
5.1 |
On or prior to the date of this Deed of Amendment, each of the New Guarantors shall have provided to the Agent, or its duly authorised representative, all of the documents
and evidence listed below in form and substance satisfactory to the Agent:
|
5.2 |
The Agent and the Issuer designate this Deed of Amendment to be a Finance Document.
|
5.3 |
Any term of this Deed of Amendment may be amended only with the consent of the Parties or waived only with the consent of the Parties (other than the party seeking the
waiver) and then such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.
|
5.4 |
If, at any time, any provision of this Deed of Amendment is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the
legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.
|
5.5 |
No term of this Deed of Amendment is enforceable under the Contracts (Rights of Third Parties) Act 1999 by anyone other than a party to this Deed of Amendment.
|
6 |
Counterparts
|
7 |
Governing law
|
8 |
Jurisdiction
|
8.1 |
Jurisdiction of English courts
|
|
(a) |
The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Deed of Amendment or any non-contractual obligations
connected with it (including a dispute regarding the existence, validity or termination of this Deed of Amendment) (a Dispute).
|
|
(b) |
The Parties agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary.
|
|
(c) |
Notwithstanding clause 8.1(a) above, no Finance Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent
allowed by law, the Finance Parties may take concurrent proceedings in any number of jurisdictions.
|
8.2 |
Service of process
|
|
(a) |
irrevocably appoints:
|
|
(b) |
agrees that failure by an agent for service of process to notify the relevant New Guarantor of the process will not invalidate the proceedings concerned; and
|
|
(c) |
if any person appointed as process agent for a New Guarantor is unable for any reason to act as agent for service of process, that New Guarantor must immediately (and in
any event within ten days of such event taking place) appoint another agent on terms acceptable to the Agent. Failing this, the Agent may appoint another agent for this purpose.
|
EXECUTED and DELIVERED as a DEED by
TOP SHIPS INC.
acting by:
in the presence of:
|
)
)
)
)
|
……………………………………………….
Attorney-in-fact
|
EXECUTED and DELIVERED as a DEED by
AMSTERDAM TRADE BANK N.V.
acting by:
|
)
)
)
)
|
……………………………………………….
Authorised signatory
……………………………………………….
Authorised signatory
|
EXECUTED and DELIVERED as a DEED by
AMSTERDAM TRADE BANK N.V.
acting by:
|
)
)
)
)
|
……………………………………………….
Authorised signatory
……………………………………………….
Authorised signatory
|
EXECUTED and DELIVERED as a DEED by
AMSTERDAM TRADE BANK N.V.
acting by:
|
)
)
)
)
|
……………………………………………….
Authorised signatory
……………………………………………….
Authorised signatory
|
EXECUTED and DELIVERED as a DEED by
ASTARTE INTERNATIONAL INC.
acting by:
in the presence of:
|
)
)
)
)
|
……………………………………………….
Attorney-in-fact
|
EXECUTED and DELIVERED as a DEED by
SANTA CATALINA INC.
acting by:
in the presence of:
|
)
)
)
)
|
……………………………………………….
Attorney-in-fact
|
EXECUTED and DELIVERED as a DEED by
SANTA MONICA MARINE INC.acting by:
in the presence of:
|
)
)
)
)
|
……………………………………………….
Attorney-in-fact
|
If to the Seller:
|
Hollywood Hills Inc.
1 Vas. Sofias and Meg. Alexandrou St 15124 Maroussi, Greece Facsimile: +302108128320 Email: louka@loukapartners.com |
If to the Buyer:
|
Top Ships Inc.
c/o Top Ships Inc. 1 Vas. Sofias-and Meg Alexandrou Str 15124 Maroussi, Greece Attention: Alexandros Tsirikos Facsimile: +30210 8056441 Email: atsirikos@topships.org |
With a copy (which shall not
constitute notice) to: |
Seward & Kissel LLP
One Battery Park Plaza New York, New York 10004 Attention: Gary J. Wolfe, Esq. Facsimile: (212) 901-2110 Email: wolfe@sewkis.com |
BUYER:
|
||
TOP SHIPS INC
|
||
By:
|
||
Name:
|
Alexander Tsirikos
|
|
Title:
|
Director
|
|
SELLER
|
||
HOLLYWOOD HILLS INC.
|
||
By:
|
||
Name:
|
Dimosthenis Eleftheriadis
|
|
Title:
|
Director
|
|
If to the Seller:
|
Hollywood Hills Inc.
1 Vas. Sofias and Meg. Alexandrou St 15124 Maroussi, Greece Facsimile: +302108128320 Email: louka@loukapartners.com |
If to the Buyer:
|
Top Ships Inc.
c/o Top Ships Inc. 1 Vas. Sofias-and Meg Alexandrou Str 15124 Maroussi, Greece Attention: Alexandros Tsirikos Facsimile: +30210 8056441 Email: atsirikos@topships.org |
With a copy (which shall not
constitute notice) to: |
Seward & Kissel LLP
One Battery Park Plaza New York, New York 10004 Attention: Gary J. Wolfe, Esq. Facsimile: (212) 901-2110 Email: wolfe@sewkis.com |
BUYER:
|
||
TOP SHIPS INC
|
||
By:
|
||
Name:
|
Alexander Tsirikos
|
|
Title:
|
Director
|
|
SELLER
|
||
HOLLYWOOD HILLS INC.
|
||
By:
|
||
Name:
|
Dimosthenis Eleftheriadis
|
|
Title:
|
Director
|
|
32.
|
Definitions
|
1
|
33.
|
Charter Period
|
21
|
34.
|
Cancellation
|
21
|
35.
|
Conditions Precedent and Conditions Subsequent
|
22
|
36.
|
Delivery
|
23
|
37.
|
Charterhire
|
24
|
38.
|
Possession of Vessel
|
29
|
39.
|
Insurance
|
29
|
40.
|
Termination and Redelivery; War; Total Loss
|
36
|
41.
|
Fees and Expenses; Indemnities;
|
42
|
42.
|
No Waiver of Rights
|
44
|
43.
|
Mortgage and assignment
|
44
|
44.
|
Notices
|
45
|
45.
|
Termination Events
|
46
|
46.
|
Representations and Warranties
|
50
|
47.
|
Charterers' undertakings
|
53
|
48.
|
Purchase Option
|
59
|
49.
|
Purchase Obligation
|
61
|
50.
|
Sale of the Vessel by Purchase Option and Purchase Obligation
|
61
|
51.
|
No Set-off or Tax deduction; FATCA Provisions
|
63
|
52.
|
Increased Costs
|
65
|
53.
|
Governing Law and Jurisdiction
|
66
|
54.
|
Miscellaneous
|
67
|
Execution page
|
68
|
|
Schedule 1 : Certificate of Delivery and Acceptance
|
70
|
|
Schedule 2 : Charterhire Schedule
|
71
|
|
Schedule 3 : Collateral Owners, Collateral Charterers and Collateral Vessels
|
92
|
32. |
DEFINITIONS
|
32.1 |
In this Charter the following terms shall have the meanings ascribed to them below:
|
|
(a) |
an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation, lodgement or registration; or
|
|
(b) |
in relation to anything which will be fully or partly prohibited or restricted by law if a Governmental Agency intervenes or acts in any way within a specified period after lodgement,
filing, registration or notification, the expiry of that period without intervention or action.
|
|
(a) |
in relation to the definition of Quotation Day and to any day on which LIBOR is to be determined, on which banks and the relevant financial markets are open for general business in London;
|
|
(b) |
in relation to any date for payment of amounts under the Transaction Documents, on which banks and the relevant financial markets are open for general business in Hong Kong, London,
Shanghai, Piraeus and the principal financial centre of the country of the currency of payment; and
|
|
(c) |
in relation to any other matter, on which banks are open for general business in Hong Kong, Shanghai and Piraeus.
|
|
(a) |
the Guarantor ceases to control the Charterers; or
|
|
(b) |
the Substantial Shareholder ceases to control the Guarantor or the Charterers,
|
|
(a) |
in respect of the Commencement Date, the Upfront Charterhire;
|
|
(b) |
in respect of a Payment Date, the aggregate of the amount of (i) the Fixed Charterhire and (ii) the Variable Charterhire, payable under this Charter on that Payment Date; and
|
|
(c) |
in respect of the last Payment Date, the aggregate of the amount of (i) the Balloon Payment, (ii) the Fixed Charterhire and (iii) the Variable Charterhire, payable under this Charter on
that Payment Date.
|
|
(a) |
all freight, hire and passage moneys, compensation payable in the event of requisition of the Vessel 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 the Vessel;
|
|
(b) |
if and whenever the Vessel is employed on terms whereby any moneys falling within paragraph (a) are pooled or shared with any other person, that proportion of the net receipts of the
relevant pooling or sharing arrangement which is attributable to the Vessel; and
|
|
(c) |
all other payments or proceeds of any kind whatsoever relating to the Vessel as would be deemed "earnings" under GAAP or other applicable
accounting principles.
|
Beneficiary Bank:
|
Alpha Bank AE
|
Shipping Finance Division
|
|
93, Akti Miaouli
|
|
185-38 Piraeus Greece
|
|
Swift Code:
|
CRBAGRAAXXX
|
Beneficiary Name:
|
Monte Carlo 71 Shipping Company Limited
|
Account Number:
|
960 01 5006 026516
|
IBAN:
|
GR21 0140 9600 9600 1500 6026 516
|
|
(a) |
any claim which relates to the Vessel or its passengers or cargo from time to time by any governmental, judicial or regulatory authority which arises out of an Environmental Incident or
which relates to any Environmental Law; or
|
|
(b) |
any claim by any other person in relation to the Vessel or its passengers or cargo from time to time which relates to an Environmental Incident or an alleged Environmental Incident,
|
|
(a) |
any release of Environmentally Sensitive Material from the Vessel;
|
|
(b) |
any incident in which Environmentally Sensitive Material is released from a vessel other than the Vessel and which involves a collision between the Vessel and such other vessel or some
other incident of navigation or operation, in either case, in connection with which the Vessel is actually liable to be arrested, attached, detained or injuncted and/or the Vessel and/or the Owners and/or the Charterers and/or any other
operator or manager of the Vessel is at fault or otherwise liable to any legal or administrative action; or
|
|
(c) |
any other incident involving the Vessel in which Environmentally Sensitive Material is released otherwise than from the Vessel and in connection with which the Vessel is actually arrested
and/or where the Owners and/or the Charterers and/or any other operator or manager of the Vessel is at fault or otherwise liable to any legal or administrative action.
|
|
(a) |
in relation to the Existing Mortgagee:
|
|
(i) |
the Existing Mortgage;
|
|
(ii) |
the manager's undertaking dated 29 January 2015 and made between Central Shipping Monaco SAM in favour of the Existing Mortgagee;
|
|
(iii) |
the manager's undertaking dated 29 January 2015 and made between Central Mare in favour of the Existing Mortgagee; and
|
|
(iv) |
the manager's undertaking dated 29 January 2015 and made between Epsilon Hellas (Overseas) Ltd. in favour of the Existing Mortgagee; and
|
|
(b) |
in relation to the Original Sellers:
|
|
(i) |
the Existing Charter;
|
|
(ii) |
the general assignment dated 29 January 2015 and made between the Charterers (as assignor) and the Original Sellers (as assignee);
|
|
(iii) |
the pledge of share certificate dated 29 January 2015 and made between the Guarantor (as pledgor) and the Original Sellers (as pledgee);
|
|
(iv) |
the charterparty assignment dated 29 January 2015 and made between the Charterers (as charterer) and the Original Sellers (as owner);
|
|
(v) |
the manager's undertaking dated 29 January 2015 and executed by Central Shipping Monaco SAM in favour of the Original Sellers;
|
|
(vi) |
the manager's undertaking dated 29 January 2015 and executed by Central Mare in favour of the Original Sellers; and
|
|
(vii) |
the manager's undertaking dated 29 January 2015 and made between Epsilon Hellas (Overseas) Ltd. in favour of the Original Sellers,
|
|
(a) |
sections 1471 to 1474 of the Code or any associated regulations;
|
|
(b) |
any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the
implementation of any law or regulation referred to in paragraph (a) above; or
|
|
(c) |
any agreement pursuant to the implementation of any treaty, law or regulation referred to in paragraph (a) or (b) above with the US Internal Revenue Service, the US government or any
governmental or taxation authority in any other jurisdiction.
|
|
(a) |
moneys borrowed;
|
|
(b) |
any amount raised by acceptance under any acceptance credit facility or dematerialised equivalent;
|
|
(c) |
any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;
|
|
(d) |
the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with GAAP as at the date of this Agreement, be treated as a balance sheet liability
(other than any liability in respect of a lease or hire purchase contract which would, in accordance with GAAP in force prior to 1 January 2019, have been treated as an operating lease);
|
|
(e) |
receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);
|
|
(f) |
any amount raised under any other transaction (including any forward sale or purchase agreement) of a type not referred to in any other paragraph of this definition having the commercial
effect of a borrowing;
|
|
(g) |
any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative
transaction, only the marked to market value (or, if any actual amount is due as a result of the termination or close-out of that derivative transaction, that amount) shall be taken into account);
|
|
(h) |
any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; and
|
|
(i) |
the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (h) above.
|
|
(a) |
all policies and contracts of insurance, including entries of the Vessel in any protection and indemnity or war risks association, which are effected in respect of the Vessel or otherwise
in relation to it whether before, on or after the date of this Charter; and
|
|
(b) |
all rights, proceeds and other assets relating to, or derived from, any of the foregoing, including any rights to a return of a premium and any rights in respect of any claim whether or
not the relevant policy, contract of insurance or entry has expired on or before the date of this Charter.
|
|
(a) |
any legal opinion delivered pursuant to Clause 5 of Part B and Clause 2 of Part D of Addendum No.1; or
|
|
(b) |
any legal opinion which the Creditor Parties may obtain or arrange with respect to the Charterers or any other Security Parties.
|
|
(a) |
the principle that equitable remedies may be granted or refused at the discretion of a court and the limitation of enforcement by laws relating to insolvency, reorganisation and other laws
generally affecting the rights of creditors;
|
|
(b) |
the time barring of claims under the Limitation Act (1980) and the Foreign Limitation Periods Act 1984, the possibility that an undertaking to assume liability for, or indemnify a person
against, non-payment of any stamp duty may be void or the defences of set-off or counter-claim;
|
|
(c) |
similar principles, rights and defences under the laws of any Relevant Jurisdiction; and
|
|
(a) |
the applicable Screen Rate as of 11:00 a.m. (London time) on the Quotation Day for Dollars and for a period of three (3) months; or
|
|
(b) |
as otherwise determined pursuant to Clause 37.8.
|
|
(a) |
in relation to commercial, technical and crew management of the Vessel, the ship management agreement dated 1 January 2019 and made between the Charterers and Central Shipping; and
|
|
(b) |
in relation to the technical management of the Vessel, the sub-management agreement dated 1 January 2019 and made between Central Shipping and Central Mare,
|
|
(a) |
at or about noon (London time) on the Quotation Day for the relevant Hire Calculation Period the relevant Screen Rate is not available and none or only one of leading banks in the London
interbank market supplies a rate to the Owners to determine LIBOR for dollars for the relevant Hire Calculation Period; or
|
|
(b) |
before close of business in Hong Kong on the Quotation Day for the relevant Hire Calculation Period, the cost to the Owners of funding the Charterhire Principal from whatever source it may
select would be in excess of LIBOR.
|
|
(a) |
on a date no earlier than thirty (30) days prior to the relevant date;
|
|
(b) |
by one (1) Approved Valuer;
|
|
(c) |
with or without physical inspection of the Vessel;
|
|
(d) |
on the basis of a sale for prompt delivery for cash on normal arm's length commercial terms as between a willing seller and a willing buyer, free of any existing charter or other contract
of employment; and
|
|
(e) |
if a range of valuation is given by the Approved Valuer, the lower end of the range shall apply,
|
|
(a) |
on a date no earlier than fifteen (15) days prior to the MOA Delivery Date;
|
|
(b) |
by two (2) Approved Valuers respectively, one (1) appointed by the Owners and one (1) appointed by the Charterers;
|
|
(c) |
with or without physical inspection of the Vessel;
|
|
(d) |
on the basis of a sale for prompt delivery for cash on normal arm's length commercial terms as between a willing seller and a willing buyer, free of any existing charter or other contract
of employment; and
|
|
(e) |
if a range of valuation is given by an Approved Valuer, the lower end of the range shall apply for that Approved Valuer,
|
|
(a) |
the business, operations, property, condition (financial or otherwise) or prospects of the Charterers or any other Security Party;
|
|
(b) |
the ability of the Charterers or any other Security Party to perform its material obligations under any Transaction Document to which it is a party;
|
|
(c) |
the validity, legality or enforceability of any Transaction Document or the rights or remedies of the Owners or any other Creditor Party under any of the Transaction Documents; or
|
|
(d) |
the validity, legality or enforceability of, or the effectiveness or priority and ranking of any Security Interests granted pursuant to any of the Security Documents.
|
|
(a) |
Security Interests created by a Transaction Document or a Financial Instrument;
|
|
(b) |
prior to Delivery, Security Interests created by the Existing Security Documents;
|
|
(c) |
liens for unpaid master's and crew's wages in accordance with the ordinary course of operation of the Vessel or in accordance with usual reputable maritime practice;
|
|
(d) |
liens for salvage;
|
|
(e) |
liens for master's disbursements incurred in the ordinary course of trading;
|
|
(f) |
any other liens arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of the Vessel where the Charterers are contesting the claim giving
rise to such lien in good faith by appropriate steps and for the payment of which adequate reserves have been made in case the Charterers finally have to pay such claim so long as any such proceedings shall not, and may reasonably be
considered unlikely to, lead to the arrest, sale, forfeiture or loss of the Vessel or any interest in the Vessel;
|
|
(g) |
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
Charterers are prosecuting or defending such action in good faith by appropriate steps;
|
|
(h) |
Security Interests arising by operation of law in respect of taxes which are not overdue or for payment of taxes which are overdue for payment but which are being contested by the
Charterers in good faith by appropriate steps and in respect of which adequate reserves have been made; and
|
|
(i) |
such other Security Interests as permitted in writing by the Owners and/or the Security Trustee.
|
|
(a) |
in relation to the first Hire Calculation Period for which the Interest Rate for that Hire Calculation Period is to be determined, five (5) Business Days before the first day of that
period; and
|
|
(b) |
in relation to any other period for which an Interest Rate is to be determined, fourteen (14) Business Days before the first day of that period (or such later date as the Owners may
agree),
|
|
(a) |
its jurisdiction of incorporation;
|
|
(b) |
any jurisdiction where any property owned by it and charged under a Transaction Document is situated;
|
|
(c) |
any jurisdiction where it conducts its business; and
|
|
(d) |
any jurisdiction whose laws govern the perfection of any of the Transaction Documents entered into by it creating a Security Interest,
|
|
(a) |
the Charterers, the Guarantor, the Approved Managers and any party providing security to the Owners and/or the Security Trustee for the Charterers' obligations under this Charter pursuant
to a Security Document; and
|
|
(b) |
the Collateral Security Parties of both Collateral Vessels,
|
|
(a) |
delivery of the original share certificates for the shares held by the Guarantor in the Company and the ancillary documents to be delivered under the Deed of Charge;
|
|
(b) |
service by the Greek court bailiff of an original signed Account Pledge on the Account Bank and the Charterers;
|
|
(c) |
execution of all notices, acknowledgments and consents as required under the Transaction Documents; and
|
|
(d) |
any other Authorisations of the Transaction Documents as may be required or recommended in any Legal Opinion.
|
|
(a) |
which is controlled, directly or indirectly, by the first mentioned company or corporation;
|
|
(b) |
more than half the issued equity share capital of which is beneficially owned, directly or indirectly, by the first mentioned company or corporation; or
|
|
(c) |
which is a Subsidiary of another Subsidiary of the first mentioned company or corporation,
|
|
(a) |
the Purchase Option Price applicable on the relevant date as if that relevant date is a Purchase Option Date; and
|
|
(b) |
(i) the Breakfunding Costs and (ii) any costs incurred and expenses incurred by the Owners and any other Creditor Parties (and their financiers (if any)) in
|
|
(a) |
actual, constructive, compromised, agreed or arranged total loss of the Vessel;
|
|
(b) |
any expropriation, requisition or acquisition of the Vessel, whether for full consideration, a consideration less than its proper value, a nominal consideration or without any
consideration (excluding a requisition for hire); or
|
|
(c) |
any arrest, capture, seizure, confiscation or detention of the Vessel (including any hijacking or theft but excluding any event specified in paragraph (b) of this definition), which is
effected by any Governmental Agency or by any person or persons claiming to be or to represent a Governmental Agency or other persons unless it is redelivered within three (3) months to the full control of the Owners or the Charterers.
|
|
(a) |
the Charterers, if they are resident for tax purposes in the US; or
|
|
(b) |
any other Security Parties some or all of whose payments under the Transaction Documents are from sources within the US for US federal income tax purposes.
|
32.2 |
In this Charter:
|
|
(a) |
agreed form means, in relation to a document, such document in a form agreed in writing between (i) the Owners or the Security Trustee and (ii) the
Charterers;
|
|
(b) |
asset includes every kind of property, asset, interest or right, including any present, future or contingent right to any revenues or other
payment;
|
|
(c) |
company includes any partnership, joint venture and unincorporated association;
|
|
(d) |
consent includes an Authorisation, consent, approval, resolution, licence, exemption, filing, registration, notarisation and legalisation;
|
|
(e) |
contingent liability means a liability which is not certain to arise and/or the amount of which remains unascertained;
|
|
(f) |
continuing means, in relation to any Termination Event, a Termination Event which has not been waived by the Owners or remedied to the satisfaction
of the Owners;
|
|
(g) |
document includes a deed; also a letter, fax or telex;
|
|
(h) |
expense means any kind of cost, charge or expense (including all legal costs, charges and expenses) and any applicable value added or other tax;
|
|
(i) |
including shall be construed as including without limitation (and cognate expressions shall be construed
similarly);
|
|
(j) |
indebtedness includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future,
actual or contingent;
|
|
(k) |
law includes any order or decree, any form of delegated legislation, any treaty or international convention and any regulation or resolution of the
Council of the European Union, the European Commission, the United Nations or its Security Council;
|
|
(l) |
legal or administrative action means any legal proceeding or arbitration and any administrative or regulatory action or investigation;
|
|
(m) |
liability includes every kind of debt or liability (present or future, certain or contingent), whether incurred as principal or surety or
otherwise;
|
|
(n) |
months shall be construed in accordance with Clause 32.3;
|
|
(o) |
person includes any individual, firm, company, corporation, government, state or agency of a state or any association, trust, joint venture,
consortium, partnership or other entity (whether or not having separate legal personality);
|
|
(p) |
policy, in relation to any insurance, includes a slip, cover note, certificate of entry or other document evidencing the contract of insurance or
its terms;
|
|
(q) |
protection and indemnity risks means the usual risks covered by the UK P&I Club or any other protection and indemnity association which is a
member of the International Group of P&I Clubs acceptable to the Owners and the Security Trustee including pollution risks, extended passenger cover and the proportion (if any) of any sums payable to any other person or persons in
case of collision which are not recoverable under the hull and machinery policies by reason of the incorporation in them of Clause 6 of the International Hull Clauses (1/11/02 or 1/11/03), Clause 8 of the Institute Time Clauses
(Hulls)(1/10/83) or Clause 8 of the Institute Time clauses (Hulls) (1/11/1995) or the Institute Amended Running Down clause (1/10/71) or any equivalent provision;
|
|
(r) |
regulation includes any regulation, rule, official directive, request or guideline (whether or not having the force of law) of any governmental,
intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;
|
|
(s) |
tax includes any present or future tax, duty, impost, levy or charge of any kind which is imposed by any state, any political sub-division of a
state or any local or municipal authority (including any such imposed in connection with exchange controls), and any connected penalty, interest or fine;
|
|
(t) |
a provision of law is a reference to that provision as amended or re-enacted; and
|
|
(u) |
a time of day is a reference to Hong Kong time.
|
32.3 |
Meaning of month
|
|
(a) |
(subject to paragraph (c) below) if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in which that period is
to end if there is one, or if there is not, on the immediately preceding Business Day;
|
|
(b) |
if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month; and
|
|
(c) |
if a Hire Calculation Period begins on the last Business Day of a calendar month, that Interest Period shall end on the last Business Day in the calendar month in which that Hire
Calculation Period is to end.
|
32.4 |
In this Charter:
|
|
(a) |
references to a Transaction Document or any other document being in the form of a particular appendix or to any document referred to in the recitals include references to that form with
any modifications to that form which the Owners and/or the Security Trustee approve;
|
|
(b) |
references to, or to a provision of, a Transaction Document or any other document are references to it as amended or supplemented, whether before the date of this Charter or otherwise;
|
|
(c) |
references to, or to a provision of, any law include any amendment, extension, re-enactment or replacement, whether made before the date of this Charter or otherwise;
|
|
(d) |
references to Clauses, Sub-Clauses and Schedules are to be construed as references to clauses and sub-clauses of, and schedules to, this Charter; and
|
|
(e) |
words denoting the singular number shall include the plural and vice versa, and words importing a gender include every gender.
|
32.5 |
Headings
|
33. |
CHARTER PERIOD
|
33.1 |
The Charter Period shall commence on the Commencement Date.
|
33.2 |
Notwithstanding the foregoing and subject to the terms herein, this Charter shall be in full force and effect and valid, binding and enforceable against the Parties with effect from the
date hereof.
|
33.3 |
The Charter Period shall, subject to the terms of this Charter, continue for a period from the Commencement Date to and including the date falling one hundred and nineteen (119) months
after the second (2nd) Payment Date.
|
34. |
CANCELLATION
|
35. |
CONDITIONS PRECEDENT AND CONDITIONS SUBSEQUENT
|
35.1 |
The obligation of the Owners to charter the Vessel to the Charterers hereunder is subject to and conditional upon:
|
|
(a) |
no Termination Event having occurred which is continuing;
|
|
(b) |
no other event has occurred which with the giving of notice or lapse of time would, if not remedied, constitute a Termination Event;
|
|
(c) |
the representations and warranties contained in Clause 46 being true and correct in all aspects on the date hereof by reference to the facts and circumstances then existing;
|
|
(d) |
the Charterers (as sellers) and the Owners having duly executed and entered into the MOA;
|
|
(e) |
the MOA Delivery occurring on or before the Cancelling Date;
|
|
(f) |
the Owners having received from the Charterers:
|
|
(i) |
on the date of this Charter, the documents or evidence set out in Part AI of Addendum No.1 in form and substance satisfactory to them;
|
|
(ii) |
no less than fourteen (14) days prior to Delivery, the documents or evidence set out in Part AII of Addendum No.1 in form and substance satisfactory to them;
|
|
(iii) |
no less than seven (7) Banking Days prior to Delivery, the documents or evidence set out in Part AIII of Addendum No.1 in form and substance satisfactory to them;
|
|
(iv) |
no less than three (3) Banking Days prior to Delivery (or such later date as the Owners may agree), the documents or evidence set out in Part AIV of Addendum No.1 in form and substance
satisfactory to them;
|
|
(v) |
no less than one (1) Banking Day prior to Delivery, the documents or evidence set out in Part BI of Addendum No.1 in form and substance satisfactory to them; and
|
|
(vi) |
on or before Delivery, the documents or evidence set out in Part BII of Addendum No.1 in form and substance satisfactory to them.
|
35.2 |
The obligation of the Owners to continue chartering the Vessel to the Charterers hereunder is subject to and conditional upon the Owners having received from the Charterers on or before
such dates as specified in Parts C and D of Addendum No.1 the documents or evidence set out in Parts C and D of Addendum No.1 in form and substance satisfactory to them.
|
35.3 |
Upon the requirements of Clause 35.1 and Clause 35.2 being fulfilled or waived to the satisfaction of the Owners, the Owners shall give notice thereof to the Charterers.
|
35.4 |
The conditions precedent set out in Clause 35.1 and the conditions subsequent set out in Clause 35.2 are for the sole benefit of the Owners and may be waived in whole or in part, with or
without conditions without prejudicing the right of the Owners to require fulfilment of such conditions in whole or in part at any time thereafter.
|
36. |
DELIVERY
|
36.1 |
Subject to the requirements of Clause 35.1 being fulfilled or waived to the satisfaction of the Owners, on delivery to and acceptance by the Charterers of the Vessel from the Original
Sellers under the First MOA, on delivery to and acceptance by the Owners of the Vessel from the Charterers as sellers under the MOA and subject to the provisions of this Clause 36.1, the Vessel shall be deemed to have been delivered to,
and accepted (without reservation) by, the Charterers under this Charter (irrespective of whether the Charterers shall become and be entitled to the possession and use of the Vessel).
|
36.2 |
On Delivery, as evidence of the commencement of the Charter Period, the Charterers and the Owners shall sign the Certificate of Delivery and Acceptance. Without prejudice to this Clause,
the Charterers shall be deemed to have accepted the Vessel under this Charter, and the commencement of the Charter Period having started, on Delivery even if, for whatever reason, the Certificate of Delivery and Acceptance is not signed
but Delivery has occurred.
|
36.3 |
Without prejudice and notwithstanding the provisions of this Clause, the Charterers shall not be entitled for any reason whatsoever to refuse to accept delivery of the Vessel under this
Charter once the Vessel has been delivered to and accepted by (a) the Charterers from the Original Sellers under the First MOA and (b) the Owners from the Charterer as sellers under the MOA, and the Owners shall not be liable for any
losses, cost or expenses whatsoever or howsoever arising including without limitation, any loss of profit or any loss or otherwise and whether before or after Delivery:
|
|
(a) |
resulting directly or indirectly from any defect or alleged defect in the Vessel or any failure of the Vessel; or
|
|
(b) |
arising from any delay in the commencement of the Charter Period or any failure of the Charter Period to commence unless such delay or failure results solely from a failure by the Owners
to pay the MOA Purchase Price pursuant to, and in accordance with, the terms of the MOA.
|
36.4 |
The Owners will not and shall not be obliged to deliver the Vessel to the Charterers with any bunkers and unused lubricating oils and greases in storage tanks and unopened drums of the
Vessel, but the Vessel shall be delivered with whatever is onboard when delivered by the Original Sellers (as sellers) to the Charterers (as buyers) under the First MOA and the Charterers (as sellers) to the Owners (as buyers) under the
MOA.
|
36.5 |
The Charterers hereby acknowledge and agree that the Owners are not the manufacturer or original supplier of the Vessel and that the Owners make no condition, term, representation or
warranty, express or implied (and whether statutory or otherwise) as to the Owners' title to the Vessel or as to the seaworthiness, merchantability, condition, design, operation, performance, quality, capacity or fitness for use or as to
the eligibility of the Vessel for any particular trade or operation or any other condition, term, representation or warranty whatsoever, express or implied, with respect to the Vessel. Acceptance of delivery by the Charterers or (as the
case may be) deemed delivery of the Vessel to the Charterers under this Charter shall be conclusive proof evidencing that, for the purposes of the obligations and liabilities of the Owners hereunder or in connection herewith, the Vessel
is at that time seaworthy, in accordance with the provisions of this Charter, in good working order and repair and without defect or inherent vice whether or not discoverable by the Charterers and free and clear of all liens, Security
Interests and debts of whatsoever nature save for the Security Interests granted pursuant to the Security Documents.
|
36.6 |
Notwithstanding and without prejudice to the foregoing Clause 36.5, the Charterers hereby waive all of their rights in respect of any condition, term, representation or warranty express or
implied (and whether statutory or otherwise) on the part of the Owners and all of their claims against the Owners howsoever and whatsoever that may arise in respect of the Vessel or the Owners' title thereto, or all of their rights
therein or arising out of the operation of the Vessel or the chartering thereof under this Charter (including in respect of the seaworthiness or otherwise of the Vessel).
|
36.7 |
The Charterers agree that the Owners shall be under no liability to supply any replacement Vessel or any piece or part thereof during any period when the Vessel is unusable and shall not
be liable to the Charterers or any other person as a result of the Vessel being unusable.
|
37. |
CHARTERHIRE
|
37.1 |
In consideration of the Owners agreeing to charter the Vessel to the Charterers under this Charter at the request of the Charterers, the Charterers hereby irrevocably and unconditionally
agree to pay to the Owners the Charterhire in respect of the chartering of the Vessel during the Charter Period. An indicative Charterhire Schedule setting out the amount of the Upfront Charterhire, the Balloon Payment and the Fixed
Charterhire is set out in Schedule 2. The Charterers hereby agree with the Owners and acknowledge that the Charterhire as set out in Schedule 2 shall be calculated on the basis that the Financing Principal is in the amount of
US$21,375,000.
|
37.2 |
Subject to the terms of this Clause, each instalment of the Fixed Charterhire and the Variable Charterhire shall be paid on each Payment Date on the following basis:
|
|
(a) |
the first instalment of the Charterhire shall be paid on the Commencement Date and shall comprise the Charterhire payable in advance in respect of the period from the Commencement Date up
to and including the date falling on the 10th day of the month falling immediately after the Commencement Date; and
|
|
(b) |
thereafter each instalment of Charterhire shall be paid on the date falling one (1) month thereafter and shall comprise the Charterhire payable in advance in mrespect of each such one (1)
month's period, PROVIDED THAT:
|
|
(i) |
the Charterers shall pay Variable Charterhire on the second (2nd) Payment Date which has accrued on the Charterhire Principal in respect of the shortened Hire Calculation Period commencing
from the Commencement Date and up to the second (2nd) Payment Date on a pro-rata basis; and
|
|
(ii) |
on the last Payment Date the Charterers shall pay to the Owners the Balloon Payment together with the last instalment of Fixed Charterhire and the last instalment of Variable Charterhire
which together shall comprise the Charterhire payable in arrears in respect of the one (1) month's period from the second (2nd) last Payment Date to the last Payment Date,
|
37.3 |
The Vessel shall not at any time be deemed off-hire and the Charterers' obligation to pay all Charterhire and other amounts payable in this Charter shall be paid in Dollars and shall be
absolutely and unconditionally payable under any and all circumstances and shall not be affected by any circumstances of any nature whatsoever including but not limited to:
|
|
(a) |
any set off, counterclaim, recoupment, defence, claim or other right which the Charterers may at any time have against the Owners or any other person for any reason whatsoever including,
without limitation, any act, omission or breach on the part of the Owners under this Charter or any other agreement at any time existing between the Owners and the Charterers;
|
|
(b) |
any change, extension, indulgence or other act or omission in respect of any indebtedness or obligation of the Charterers, or any sale, exchange, release or surrender of, or other dealing
in, any security for any such indebtedness or obligation;
|
|
(c) |
any title defect or Security Interest or any dispossession of the Vessel by title paramount or otherwise, unless caused by the fault or gross negligence of the Owners and/or the Security
Trustee;
|
|
(d) |
any defect in the seaworthiness, condition, value, design, merchantability, operation or fitness for use of the Vessel or the ineligibility of the Vessel for any particular trade;
|
|
(e) |
any damage (including damage resulting in a Total Loss) to or forfeiture or court marshall's or other sale of the Vessel;
|
|
(f) |
any libel, attachment, levy, detention, sequestration or taking into custody of the Vessel or any restriction or prevention of or interference with or interruption or cessation in, the use
or possession thereof by the Charterers;
|
|
(g) |
any insolvency, bankruptcy, reorganization, arrangement, readjustment, dissolution, liquidation or similar proceedings by or against the Charterers;
|
|
(h) |
any invalidity, unenforceability, lack of due authorization or other defect, or any failure or delay in performing or employing with any of the terms and provisions of this Charter or any
of the Transaction Documents by any party to this Charter or any other person;
|
|
(i) |
any enforcement or attempted enforcement by any of the Owners or the other Creditor Parties of their rights under this Charter or any of the Transaction Documents executed or to be
executed pursuant to this Charter; or
|
|
(j) |
any loss of use of the Vessel due to deficiency or default or strike of officers or crew, fire, breakdown, damage, accident, defective cargo or any other cause which would or might but for
this provision have the effect of terminating or in any way affecting any obligation of the Charterers under this Charter.
|
37.4 |
Time of payment of Charterhire and other payments by the Charterers shall be of the essence of this Charter.
|
37.5 |
All payments of Charterhire and any moneys payable hereunder shall be made in Dollars.
|
37.6 |
All Charterhire and any other moneys payable hereunder shall be payable by the Charterers to the Owners Account.
|
37.7 |
Payment of Charterhire shall be at the Charterers' risk until receipt by the Owners of the payment into the Owners Account.
|
37.8 | (a) | If a Market Disruption Event occurs in relation to any Charterhire for any HireCalculation Period, then the Interest Rate for the relevant period shall be the rate per annum which is the sum of: |
|
(i) |
the Margin; and
|
|
(ii) |
the rate notified to the Charterers by the Owners in writing as soon as practicable and in any event before interest is due to be paid in respect of that Hire Calculation Period, to be
that which expresses as a percentage rate per annum the cost to the Owners of funding the Charterhire for such period from whatever comparable source it may select, provided that the Owners shall use their reasonable endeavours to provide
or procure the provision of the evidence of such rate.
|
|
(b) |
If a Market Disruption Event occurs and the Owners or the Charterers so require, the Owners and the Charterers shall enter into negotiations (for a period of not more than thirty (30)
days) with a view to agreeing a substitute basis for determining the rate of interest.
|
|
(c) |
Any alternative basis agreed pursuant to paragraph 37.8(b) above shall, with the prior consent of the Owners and the Charterers, be binding on both the Owners and the Charterers.
|
37.9 |
All stamp duty, value added tax, withholding or other taxes and import and export duties and all other similar types of charges which may be levied or assessed on or in connection with:
|
|
(a) |
the operation of this Charter in respect of the hire and all other payments to be made pursuant to this Charter and the remittance thereof to the Owners; and
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|
(b) |
the import, export, purchase, delivery and re-delivery of the Vessel,
|
37.10 |
If requested by the Charterers, the Owners will use their reasonable endeavours to change their jurisdiction of incorporation to another jurisdiction reasonable designated by the
Charterers, provided that:
|
|
(a) |
the new jurisdiction of incorporation of the Owners are acceptable to their financiers (if any);
|
|
(b) |
the Charterers shall be responsible for preparing all application, registration and other documents required for the change of jurisdiction of incorporation in form and substance
acceptable to the Owners;
|
|
(c) |
the new jurisdiction of incorporation of the Owners is acceptable to the then current flag state of the Vessel for the purpose of maintaining the registration of the Vessel under that flag
state in form and substance acceptable to the Owners;
|
|
(d) |
the Charterers shall be responsible for preparing all application, registration and other documents required for registration of the Owners as foreign maritime entity in other relevant
jurisdiction for the purpose of maintaining the registration of the Vessel under the then current flag state in form and substance acceptable to the Owners;
|
|
(e) |
if a change of flag state is required as a result of the change of jurisdiction of incorporation of the Owners, such change of jurisdiction of incorporation of the Owners shall be subject
to the prior written consent of the Owners and the Owners' financiers (if any), and the Charterers shall be responsible for registration of the Vessel in such new flag state and pay to the Owners or their financier (if any) upon demand
the legal fees, registration fees and other duties (including any duties payable by the Owners and the Owners' financiers (if any)) imposed by the new registry or any taxing authority therein in connection with the preparation,
negotiation and registration of such new mortgage, other Financial Instruments (including any amendment or supplement thereto) and satisfactory legal opinions in favour of the Owners and/or their financier (if any); and
|
|
(f) |
all other fees, costs, expenses, payments, taxes, charges and liabilities whatsoever incurred by the Owners and/or their financiers (if any) relating to, arising out of or in connection
with such change shall be borne by the Charterers.
|
37.11 |
Any payment of the Termination Sum shall be made together with any other amount payable under this Charter.
|
37.12 |
If the Charterers fail to make any payment due under this Charter on the due date, they shall pay interest on such late payment at the Default Rate from the date on which such payment
became due until the date one (1) day prior to the date of payment thereof.
|
37.13 |
All default interest and any other payments under this Charter or any other Transaction Documents 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.
|
37.14 |
Any payment, which is due to be made on a day which is not a Business Day, shall be made on the next Business Day in the same calendar month (if there is one) or the preceding Business Day
(if there is not). If the last Payment Date is not a Business Day, any payment under the Transaction Documents which is due to be made on that day shall be made on the preceding Business Day.
|
37.15 | (a) | Without prejudice to Clause 37.2, the Charterers may prepay the Charterhire Principal at any time during the Charter Period (being at least $1,000,000 or an integral multiple thereof) together with any Breakfunding Cost and expenses reasonably incurred by the Owners and the other Creditor Parties under this Charter and the other Transaction Documents in connection with or as a result of such prepayment, PROVIDED THAT (i) the Charterers shall only be entitled to prepay the Charterhire Principal once a year and the aggregate amount of all prepayments during the Charter Period shall not exceed $5,000,000 under this Clause 37.15 and (ii) the Owners shall have received from the Charterers not less than sixty (60) days' notice of their intention to make such prepayment, specifying the amount to be prepaid and the proposed date of such prepayment. Any amount prepaid pursuant to this Clause 37.15(a) shall be applied towards reducing the instalments of Fixed Charterhire (for the avoidance of doubt, excluding the Balloon Payment) falling on or after the date of such prepayment by the amount of such prepayment on a pro-rata basis. |
|
(b) |
The Charterers shall not prepay all or any part of the Charterhire except at the times and in the manner expressly provided for in this Charter.
|
37.16 |
If the Financing Principal is less than US$21,375,000 or upon any prepayment made by the Charterers under Clause 37.15, the Owners shall provide the Charterers with a revised Schedule 2.
The revised Schedule 2 shall be based on the actual amount of the Financing Principal and determination of the corresponding Upfront Charterhire with reference to the Market Value at Closing of the Vessel and taking account any prepayment
under Clause 37.15 (each revised Schedule 2 referred to in this Clause 37.16 and throughout this Charter is a Revised Charterhire Schedule).
|
37.17 |
Each Revised Charterhire Schedule issued pursuant to Clause 37.16 shall (i) be deemed incorporated into this Charter in substitution for the then current Schedule 2, (ii) save for manifest
error, be conclusive and binding on the Owners and the Charterers and at any time, the latest Revised Charterhire Schedule incorporated pursuant hereto and (iii) for the purposes of this Charter, be conclusive evidence of the rate of
Charterhire, Charterhire Principal and the Purchase Option Price payable under this Charter and shall for all purposes be treated as if it had been attached as the Charterhire Schedule ab initio.
|
38. |
POSSESSION OF VESSEL
|
38.1 |
The Charterers shall not, without the prior written consent of the Owners and the Security Trustee, assign, mortgage or pledge the Vessel or any interest therein and shall not permit the
creation of any Security Interest thereon other than Permitted Security Interests.
|
38.2 |
The Charterers shall promptly notify any party (as the Owners may request) in writing that the Vessel is the property of the Owners and the Charterers shall provide the Owners with a copy
of such written notification and satisfactory evidence of that such party has received such written notification.
|
38.3 |
If the Vessel is arrested, seized, impounded, forfeited, detained or taken out of their possession or control (whether or not pursuant to any distress, execution or other legal process),
the Charterers shall procure the immediate release of the Vessel (whether by providing bail or procuring the provision of security or otherwise do such lawful things as the circumstances may require) and shall immediately notify the
Owners of such event and shall indemnify the Owners against all losses, costs or charges incurred by the Owners by reason thereof in re-taking possession or otherwise in re-acquiring the Vessel.
|
38.4 |
The Charterers shall pay and discharge or cause any Sub-Charterers of the Vessel to pay and discharge all obligations and liabilities whatsoever which have given or may give rise to liens
on or claims enforceable against the Vessel and take all reasonable steps to prevent a threatened arrest of the Vessel.
|
39. |
INSURANCE
|
39.1 |
The Charterers shall procure that such insurances are effected in form and substance satisfactory to the Owners, the Security Trustee and their financiers (if any):
|
|
(a) |
in Dollars;
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|
(b) |
in the case of hull and machinery (and increased value insurance), fire and usual marine risks and war risks to cover an amount not less than the greater of (i) the Market Value of the
Vessel for the time being and (ii) one hundred and twenty per cent. (120%) of the Charterhire Principal then outstanding;
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|
(c) |
in the case of oil pollution liability risks for the Vessel, for an aggregate amount equal to the highest level of cover from time to time available under protection and indemnity club
entry and in the international marine insurance market and for an amount of not less than US$1,000,000,000;
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|
(d) |
in relation to protection and indemnity risks (including freight, demurrage and defence cover) in respect of the full tonnage of the Vessel;
|
|
(e) |
in relation to such other insurances reasonably required by the Owners, the Security Trustee and/or their financiers (if any) but excluding loss of hire and contingent liability insurance;
and
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|
(f) |
through approved brokers or with first class international insurers and/or underwriters acceptable to the Owners and the Security Trustee or, in the case of war risks and protection and
indemnity risks, UK P& I Club or any other approved war risks and protection and indemnity risks association which is a member of the International Group of P&I Clubs acceptable to the Owners and the Security Trustee,
|
39.2 |
In addition to the terms set out in Clause 13(a), to the extent required and acceptable to the relevant insurers and protection and indemnity club, the Charterers shall procure that the
obligatory insurances shall:
|
|
(a) |
subject always to paragraph (ii), name the Security Trustee, the Charterers and, subject to execution of the Manager's Undertakings, the Approved Managers as the only named assureds unless
the interest of every other named assured or co-assured is limited:
|
|
(i) |
in respect of any obligatory insurances for hull and machinery and war risks;
|
|
(A) |
to any provable out-of-pocket expenses that they have incurred and which form part of any recoverable claim on underwriters; and
|
|
(B) |
to any third party liability claims where cover for such claims is provided by the policy (and then only in respect of discharge of any claims made against them); and
|
|
(ii) |
in respect of any obligatory insurances for protection and indemnity risks, to any recoveries they are entitled to make by way of reimbursement following discharge of any third party
liability claims made specifically against them;
|
|
(b) |
subject to Clause 43, whenever a financier (if any) of the Owners requires:
|
|
(i) |
in respect of fire and other usual marine risks and war risks name (or be amended to name) such financier as additional named assured for its rights and interests, warranted no operational
interest and with full waiver of rights of subrogation against such financier, but without such financier thereby being liable to pay (but having the right to pay) premiums, calls or other assessments in respect of such insurance;
|
|
(ii) |
in relation to protection and indemnity risks, name (or be amended to name) such financier as additional insured or co-assured for its rights and interests to the extent permissible under
the relevant protection and indemnity club rules; and
|
|
(iii) |
name such financier (as applicable) and the Security Trustee (as applicable) as respectively the first ranking loss payee and the second ranking loss payee (and in the absence of such
financier, as first ranking loss payee) in accordance with the terms of the relevant loss payable clauses approved by such financier and the Security Trustee with such directions for payment in accordance with the terms of such relevant
loss payable clause, as the Security Trustee and their financiers (if any) may specify;
|
|
(c) |
provide that all payments by or on behalf of the insurers under the obligatory insurances to the Owners, the Security Trustee and/or their financiers (as applicable) shall be made without
set-off, counterclaim or deductions or condition whatsoever;
|
|
(d) |
provide that such obligatory insurances shall be primary without right of contribution from other insurances which may be carried by the Owners, the Security Trustee or their financiers
(if any);
|
|
(e) |
provide that the Owners, the Security Trustee and/or their financiers (if any) may make proof of loss if the Charterers fail to do so; and
|
|
(f) |
provide that if any obligatory insurance is cancelled, or if any substantial change is made in the coverage which adversely affects the interest of the Owners, the Security Trustee and/or
their financiers (if any), or if any obligatory insurance is allowed to lapse for non-payment of premium, such cancellation, change or lapse shall not be effective with respect to the Owners, the Security Trustee and/or their financiers
(if any) for fourteen (14) days) after receipt by the Owners, the Security Trustee and/or their financiers (if any) of prior written notice from the insurers of such cancellation, change or lapse.
|
39.3 |
The Charterers shall:
|
|
(a) |
at least fourteen (14) days prior to Delivery, notify in writing the Owners and the Security Trustee of the terms and conditions of all Insurances and the brokers (or other insurers) and
any protection and indemnity or war risks association through or with whom the Charterers have arranged all Insurances;
|
|
(b) |
at least fourteen (14) days before the expiry of any obligatory insurance notify the Owners and the Security Trustee (copied to their financiers (if any)) of the brokers (or other
insurers) and any protection and indemnity or war risks association through or with whom the Charterers propose to renew that obligatory insurance and of the proposed terms of renewal and obtain the Owners' and the Security Trustee's
approval to such matters;
|
|
(c) |
at least seven (7) days before the expiry of any obligatory insurance, procure that such obligatory insurance is renewed or to be renewed on its expiry date in accordance with the
provisions of this Charter;
|
|
(d) |
procure that the approved brokers and/or the war risks and protection and indemnity associations with which such a renewal is effected shall promptly after the renewal or the effective
date of the new insurance and protection and indemnity cover notify the Owners and the Security Trustee (copied to their financiers (if any)) in writing of the terms and conditions of the renewal; and
|
|
(e) |
as soon as practicable after the expiry of any obligatory insurance, deliver to the Owners and the Security Trustee a letter of undertaking as required by this Charter in respect of such
Insurances for the Vessel as renewed pursuant to Clause 39.3(c) together with copies of the relevant policies or cover notes or entry certificates duly endorsed with the interest of the Security Trustee and/or their financiers (if any).
|
39.4 |
The Charterers shall ensure that all insurance companies, underwriters, and (if any) insurance brokers provide the Owners and the Security Trustee with all policies, cover notes and
certificates of entry relating to the obligatory insurances which they are to effect or renew and of a letter or letters or undertaking in such form as may be required by the Owners, the Security Trustee and their financiers (if any) and
including undertakings by the insurance companies and/or underwriters 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 this Charter, the other Transaction
Documents and the Financial Instruments;
|
|
(b) |
they will hold the benefit of such policies and such insurances, to the order of the Owners, the Security Trustee and/or such financiers and/or such other party in accordance with the said
loss payable clause;
|
|
(c) |
they will advise the Owners, the Security Trustee and such financiers promptly of any material change to the terms of the obligatory insurances of which they are aware;
|
|
(d) |
following a written application from the Owners, the Security Trustee and/or such financiers not later than one (1) month before the expiry of the obligatory insurances they will notify
the Owners, the Security Trustee and such financiers not less than fourteen (14) days before the expiry of the obligatory insurances, in the event of their not having received notice of renewal instructions from the Charterers and, in the
event of their receiving instructions to renew, they will promptly notify the Owners, the Security Trustee and such financiers of the terms of the instructions; and
|
|
(e) |
if any of the obligatory insurances form part of any fleet cover, the Charterers shall procure that the insurance broker(s), or leading insurer, as the case may be, undertake to the
Owners, the Security Trustee and such financiers that such insurance broker or insurer(s) will not set off against any sum recoverable in respect of a claim relating to the Vessel under such obligatory insurances any premiums due in
respect of any other vessel under any fleet cover of which the Vessel forms a part or any premium due for other insurances, they waive any lien on the policies, or any sums received under them, which they might have in respect of such
premiums, and they will not cancel such obligatory insurances by reason of non-payment of such premiums or other amounts, and will arrange for a separate policy to be issued in respect of the Vessel forthwith upon being so requested by
the Owners, the Security Trustee and/or such financiers and where practicable.
|
39.5 |
The Charterers shall ensure that any protection and indemnity and/or war risks associations in which the Vessel is entered provides the Owners, the Security Trustee and such financiers
with:
|
|
(a) |
a copy of the certificate of entry for the Vessel as soon as such certificate of entry is issued;
|
|
(b) |
a letter or letters of undertaking in such form as may be required by the Owners the Security Trustee and their financiers (if any) or in such association's standard form; and
|
|
(c) |
a copy of each of (i) a certificate of insurance or other financial security in respect of civil liability for oil pollution damage, (ii) a certificate of insurance or other financial
security in respect of civil liability for bunker oil pollution damage, (iii) (if the Vessel trades or enters into US waters) a certificate issued pursuant to s1016(a) Oil Pollution Act 1990 and s108(a) Comprehensive Environmental
Response, Compensation and Liability Act 1980, as amended, in accordance with US Coast Guard Regulations, 33 CFR Part 138 and (iv) a certificate of insurance or other financial security in respect of shipowners' liability as required
under the Maritime Labour Convention.
|
39.6 |
The Charterers shall ensure that all policies relating to obligatory insurances are deposited with the approved brokers through which the insurances are effected or renewed.
|
39.7 |
The Charterers shall procure that all premiums or other sums payable in respect of the obligatory insurances are punctually paid and produce all relevant receipts when so required by the
Owners and the Security Trustee.
|
39.8 |
The Charterers shall ensure that any guarantees required by a protection and indemnity or war risks association are promptly issued and remain in full force and effect.
|
39.9 |
The Charterers shall neither do nor omit to do (nor 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 under an obligatory insurance repayable in whole or in part; and, in particular:
|
|
(a) |
the Charterers shall procure that all necessary action is taken and all requirements are complied with which may from time to time be applicable to the obligatory insurances, and (without
limiting the obligations contained in this Clause) ensure that the obligatory insurances are not made subject to any exclusions or qualifications to which the Owners and the Security Trustee have not given their prior approval (unless
such exclusions or qualifications are made in accordance with the rules of UK P&I Club or any other protection and indemnity association which is a member of the International Group of P&I Clubs acceptable to the Owners and the
Security Trustee);
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|
(b) |
the Charterers shall not make or permit any changes relating to the classification or classification society or manager or operator of the Vessel unless such changes have first been
approved by the underwriters of the obligatory insurances and the Owners and the Security Trustee;
|
|
(c) |
prior to permitting the Vessel to enter the US Exclusive Economic Zone, the Charterers shall comply with all regulations in force of the US Oil Pollution Act 1990 which apply to the Vessel
including, if necessary, obtaining within the time limits set by the US Coast Guard, a Certificate of Financial Responsibility, a copy of which shall be lodged with the Owners and the Security Trustee prior to engaging in any such voyage;
and
|
|
(d) |
the Charterers shall not employ the Vessel, 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.
|
39.10 |
The Charterers shall not make or agree to any material alteration to the terms of any obligatory insurance nor waive any right relating to any obligatory insurance without the prior
written consent of the Owners, the Security Trustee and their financiers (if any).
|
39.11 |
The Charterers shall not settle, compromise or abandon any claim under any obligatory insurance for Total Loss or for a Major Casualty without the Owners' and the Security Trustee's
approval, and shall do all things necessary and provide all documents, evidence and information to enable the Security Trustee to collect or recover any moneys which at any time become payable in respect of the obligatory insurances.
|
39.12 |
The Charterers shall provide the Owners and the Security Trustee upon written request, copies of:
|
|
(a) |
all communications between the Charterers and:
|
|
(i) |
the approved brokers (if applicable); and
|
|
(ii) |
the approved protection and indemnity and/or war risks associations; and
|
|
(iii) |
the first class international insurers and/or underwriters, which relate directly or indirectly to:
|
|
(A) |
the Charterers' obligations relating to the obligatory insurances including, without limitation, all requisite declarations and payments of additional premiums or calls; and
|
|
(B) |
any credit arrangements made between the Charterers and any of the persons referred to in paragraphs (i) or (ii) relating wholly or partly to the effecting or maintenance of the obligatory
insurances;
|
|
(b) |
any material communication with all parties involved in case of a claim under any of the Vessel's insurances.
|
39.13 |
The Charterers shall promptly provide the Owners, the Security Trustee and/or their financiers (or any persons which they may designate) with:
|
|
(a) |
any information which the Owners, the Security Trustee and/or such financiers (or such designated persons) request for the purpose of:
|
|
(i) |
obtaining or preparing any report from an independent marine insurance broker as to the adequacy of the obligatory insurance effected or proposed to be effected; and/or
|
|
(ii) |
effecting, maintaining or renewing any such insurances as are referred to in Clauses 13(a) and 39.1 or dealing with or considering any matters relating to any such insurances;
|
|
(b) |
any information and documents reasonably requested by the Owners, the Security Trustee in connection with a claim under any of the Vessel's insurances exceeding the Major Casualty amount;
and
|
|
(c) |
if the Owners, the Security Trustee consider it necessary to obtain information in connection with a claim under any of the Vessel's insurances which does not exceed the Major Casualty
amount, such information and documents.
|
39.14 |
If one or more of the obligatory insurances are not effected and maintained with first class international insurers or are effected with an insurance or captive Subsidiary of the Owners,
the Security Trustee or the Charterers, then the Charterers shall procure, at their own expense, that the relevant insurers maintain in full force and effect facultative reinsurances with reinsurers and through brokers, in each case, of
recognised standing and acceptable in all respects to the Owners and the Security Trustee. Any reinsurance policy shall include, if and when permitted by law, a cut-through clause in a form acceptable to the Owners and the Security
Trustee. The
|
39.15 |
The Charterers shall be solely responsible for and indemnify the Owners in respect of all loss or damage to the Vessel (insofar as the Owners shall not be reimbursed by the proceeds of any
insurance in respect thereof) however caused occurring at any time or times before physical possession thereof is retaken by the Owners, reasonable wear and tear to the Vessel only excepted.
|
39.16 |
The Charterers shall:
|
|
(a) |
if so requested by the Owners, the Security Trustee and/or their financiers, reimburse the Owners, the Security Trustee and/or such financiers the costs for obtaining a detailed report
signed by an independent firm of marine insurance brokers appointed by the Owners, the Security Trustee and/or such financiers dealing with the Insurances and stating the opinion of such firm as to the adequacy of the Insurances; and
|
|
(b) |
procure that there is delivered to the insurance brokers described in Clause 39.16(a) such information in relation to the Insurances as such brokers may require.
|
39.17 |
If the Charterers fail to comply with any of the provisions of this Clause 39, the Owners and the Security Trustee shall be entitled (but not bound) to effect and subsequently to maintain
all such Insurances upon the Vessel as they may think fit in order to procure the compliance with such provisions or alternatively, to require the Vessel (at the Charterers' risk) to remain in, or to proceed to and remain in a port
designated by the Owners, the Security Trustee and/or such financiers until such provisions are fully complied with.
|
40. |
TERMINATION AND REDELIVERY; WAR; TOTAL LOSS
|
40.1 |
Upon the occurrence of a Termination Event which is continuing:
|
|
(a) |
the Owners shall notify the Charterers of occurrence of the same (the Termination Event Notice) whereupon the Charterers may:
|
|
(i) |
in relation to a Termination Event under Clause 45(a), (c) or (g), within three (3) Business Days of the date of the Termination Event Notice, provide to the Owners a written notice
advising the Owners of their intention to terminate this Charter and shall promptly pay the Termination Sum to the Owners by no later than the end of such three (3) Business Days period; or
|
|
(ii) |
in relation to any other Termination Event, within thirty (30) days of the date of the Termination Event Notice, provide to the Owners a written notice advising the Owners of their
intention to terminate this Charter and shall promptly pay the Termination Sum to the Owners by no later than the end of such thirty (30) days period; and
|
|
(b) |
if the Charterers do not notify the Owners of their intention to terminate this Charter pursuant to Clause 40.1(a) within three (3) Business Days or thirty
|
40.2 |
The Owners shall notify the Charterers in writing if they intend to terminate this Charter in accordance with paragraph (f) of Clause 26 (War) and
the Charterers shall pay the Termination Sum to the Owners within ten (10) Business Days upon receipt of such written notification from the Owners whereupon the Owners shall, at the cost and expense of the Charterers, sell the Vessel to
the Charterers in accordance with Clause 40.4.
|
40.3 |
It is hereby agreed by the Parties that payment of the Termination Sum pursuant to Clause 40.1 or 40.2 (as the case may be) shall not be construed as a penalty but shall represent an
agreed estimate of the loss and damage suffered by the Owners in purchasing the Vessel and entering into this Charter upon the terms and conditions contained herein, in each case, at the request of the Charterers and shall therefore be
paid as compensation to the Owners for early termination and acquisition of the Vessel by the Charterers.
|
40.4 |
Concurrently with the irrevocable payment of the Termination Sum in full pursuant to the terms of this Charter, this Charter shall terminate and the Owners shall (save in the event of
Total Loss) transfer the legal and beneficial ownership of the Vessel to the Charterers or their nominees free from any registered mortgages incurred or permitted by the Owners (save for those liens, Security Interests and debts incurred
by the Charterers or arising out of or in connection with this Charter and any other Permitted Security Interests) and shall execute (i) a bill of sale, (ii) a commercial invoice, (iii) a protocol of delivery and acceptance evidencing
such transfer and (iv) such other additional documents as may be necessary for the purpose of registering the Vessel at its intended flag state upon such transfer, provided that the Charterers shall notify the Owners of any such
additional documents no later than five (5) Business Days (or such other mutually agreed date) prior to such transfer, each in such form as may be required by the Charterers' intended flag state.
|
40.5 |
If the Charterers fail to make any payment or make only a partial payment of the Termination Sum on the due date in accordance with Clause 40.1 or 40.2 (as the case may be), Clauses 37.12
and 37.13 shall apply. In addition, the Charterers agree that should the Termination Sum not be paid in full on the due date for payment under the terms of this Charter:
|
|
(a) |
the Charterers' right to possess and operate the Vessel shall immediately cease and the Charterers shall, upon the Owners' request, be obliged to immediately (and at the Charterers' own
cost) redeliver the Vessel to the Owners at such ready and nearest safe port as the Owners may require; and
|
|
(b) |
without limiting the generality of the foregoing or any other rights of the Owners, the Owners may, at their own option subject to Clause 40.6, sell the Vessel free of any charter, lease
or other engagement concerning the Vessel
|
40.6 |
If the Termination Sum has not been paid in full on the due date for payment under the terms of this Charter, the Owners shall have the Vessel valued in Dollars by three (3) Approved
Valuers appointed by the Owners and:
|
|
(a) |
if the average value of the three (3) valuations quoted by such three Approved Valuers (after offsetting all costs and expenses incidental to such valuations of the Vessel) (the Net Average Market Value) is higher than the Termination Sum, the Owners may, at their sole discretion:
|
|
(i) |
appoint one or more of such Approved Valuers to sell the Vessel at the highest price that they could obtain. The Charterers shall also have the right to recommend a buyer for the Vessel
and, if the Owners determine to sell the Vessel, they shall sell the Vessel to the buyer recommended by the Charterers if that buyer offers the same or higher price for the Vessel upon not less favourable terms than the other buyers
recommended by such Approved Valuers; or
|
|
(ii) |
retain the Vessel;
|
|
(b) |
if the Owners sell the Vessel in accordance with Clause 40.5(b) and paragraph (a)(i) above:
|
|
(i) |
the Owners shall have the right to deduct an amount equal to the aggregate of the expenses, disbursements, taxes, costs and losses whatsoever as may have been incurred by the Owners in
respect of the sale of the Vessel (the Net Sale Proceeds) from the gross proceeds of the sale of the Vessel;
|
|
(ii) |
an amount equal to the Termination Sum shall be deducted from the Net Sale Proceeds;
|
|
(iii) |
if the Net Sale Proceeds are insufficient to satisfy all amounts due and payable from the Charterers to the Owners hereunder, the Charterers shall immediately pay the shortfall to the
Owners upon demand by the Owners; and
|
|
(iv) |
any surplus (the Surplus Sale Proceeds) in the Net Sale Proceeds after deducting the Termination Sum pursuant to sub-paragraph (ii) above shall be
distributed by the Owners in accordance with Clause 40.7;
|
|
(c) |
if the Owners elect to retain the Vessel in accordance with paragraph (a)(ii) above:
|
|
(i) |
in the case of the Net Average Market Value of the Vessel is higher than the Termination Sum, the Owners shall offset the Termination Sum against the Net Average Market Value of the Vessel
and distribute the difference between the Net Average Market Value of the Vessel and the Termination Sum (the Surplus Retention Proceeds) in accordance with Clause 40.7; and
|
|
(ii) |
in the case of the Net Average Market Value is less than the Termination Sum, the Charterers shall immediately pay the shortfall to the Owners upon demand by the Owners; and
|
|
(d) |
the Charterers shall have the right to pay the Termination Sum and purchase the Vessel pursuant to Clause 40.1 or 40.2 (as the case may be) prior to any agreement has been entered into by
the Owners for a sale of the Vessel under Clause 40.5(b) and paragraph (a)(i) above, upon which, Clause 40.4 shall apply.
|
40.7 |
The Surplus Retention Proceeds or the Surplus Sale Proceeds (as the case may be) shall be applied by the Owners (and the Charterers hereby authorise and instruct the Owners to so apply
such amounts) as follows:
|
|
(a) |
(in the case of a Termination Event (as defined in the relevant Collateral Charter) has occurred under either Collateral Charter) in or towards payment of the Termination Sum (as defined
in that Collateral Charter) to which that Collateral Vessel relates, together with any fees or charges incurred under that Collateral Charter. If a Termination Event (as defined in each Collateral Charter) has occurred under both
Collateral Charters and the Surplus Retention Proceeds or the Surplus Sale Proceeds (as the case may be) are insufficient to discharge the Termination Sum (as defined in each Collateral Charter) under both Collateral Charters, the Owners
shall apply the Surplus Retention Proceeds or the Surplus Sale Proceeds (as the case may be) in or towards payment pro rata of any Termination Sum (as defined in each Collateral Charter) under the Collateral Charters;
|
|
(b) |
(where such conditions are satisfied save for the charter free market value of either Collateral Vessel being below the asset coverage ratio stated in clause 47.1(n) of the relevant
Collateral Charter) in or towards payment of an additional cash deposit in an amount required to maintain the asset coverage ratio stated in clause 47.1(n) of that Collateral Charter, and if the remaining Surplus Retention Proceeds or
remaining Surplus Sale Proceeds (as the case may be) are insufficient to maintain the asset coverage ratio stated in clause 47.1(n) of both Collateral Charters, the Owners shall apply the remaining Surplus Retention Proceeds or remaining
Surplus Sale Proceeds (as the case may be) in or towards payment pro rata of the additional cash deposit required to maintain the asset coverage ratio stated in clause 47.1(n) of the Collateral Charters; and
|
|
(c) |
(in the case of there being a surplus remaining after the application of the amounts in paragraphs (a) and (b) above) direct to or to the order of the Charterers, provided that no
Termination Event shall have occurred and be continuing.
|
40.8 |
Without limiting the generality of the foregoing or any other rights of the Creditor Parties, upon the occurrence of a Termination Event which is continuing, the Owners shall have the sole
and exclusive right and power to do any of the following:
|
|
(a) |
settle, compromise, compound, adjust or defend any actions, suits or proceedings relating to or pertaining to the Vessel and this Charter;
|
|
(b) |
make proof of loss, appear in and prosecute any action arising from any policy or policies of insurance maintained pursuant to this Charter, and settle, adjust or compromise any claims for
loss, damage or destruction under, or take any other action in respect of, any such policy or policies; and
|
|
(c) |
terminate any management agreement with any manager (including any Approved Manager) of the Vessel and appoint a substitute manager in its sole discretion.
|
40.9 |
The Charterers hereby undertake to indemnify the Owners against any claims incurred in relation to the Vessel as a result of the Charterers' action or performance prior to such transfer of
ownership. Any taxes, notarial, consular and other costs, charges and expenses connected with closing of the Owners' register shall be for the Charterers' account.
|
40.10 |
Without prejudice to Clause 15, if the Charterers are required to redeliver the Vessel to the Owners pursuant to the terms of this Charter, the Charterers shall ensure that the Vessel
shall, at the time of redelivery to the Owners:
|
|
(a) |
be in an equivalent class as she was as at the Commencement Date without any recommendation or condition, and with valid, unextended certificates for not less than six (6) months;
|
|
(b) |
have passed her 5-year and if applicable, 10-year special surveys, and subsequent second intermediate survey and drydock at the Charterers' time and expense without any condition or
outstanding issue and to the satisfaction of the Classification Society;
|
|
(c) |
have her survey cycles up to date and trading and class certificate valid for at least six (6) months;
|
|
(d) |
be redelivered to the Owners together with all spare parts and spare equipment as were on board at the time of Delivery, and any such spare parts and spare equipment on board at the time
of re-delivery shall be taken over by the Owners free of charge;
|
|
(e) |
be free of any cargo and Security Interest (save for the Security Interests granted pursuant to the Financial Instruments and the Security Documents); and
|
|
(f) |
be free of any charter (unless the Owners wish to retain the continuance of any then existing charter).
|
40.11 |
The Owners shall, at the time of the redelivery of the Vessel, take over all bunkers, unused lubricating oil, unbroached provisions, paints, ropes and other consumable stores (excluding
spare parts) in the Vessel at the Owners' cost at the original purchase price as evidenced by copies of invoices certified by a director of the Charterers and on a "first in, first out" basis.
|
40.12 |
If the Vessel, for any reason, becomes a Total Loss, in consideration of (i) the Owners agreeing to enter into this Charter at the request of the Charterers and purchasing the Vessel from
the Charterers as sellers under the MOA, and (ii) without prejudice to the
|
|
(a) |
the date falling (in the case of paragraph (a) or (b) of the definition of Total Loss) one hundred and twenty (120) days or (in the case of paragraph (c) of the definition of Total Loss)
thirty (30) days after such Total Loss has occurred; and
|
|
(b) |
the date of receipt by the Security Trustee and/or their financiers (if any), in accordance with the terms of the relevant loss payable clause) of the proceeds of insurance relating to
such Total Loss,
|
|
(i) |
payment of Charterhire, and all other sums payable hereunder during such period shall continue to be made by the Charterers in accordance with the terms of this Charter unless and until
the Owners receive the Termination Sum;
|
|
(ii) |
should insurance proceeds be received by the Security Trustee from the insurers, the Charterers' obligations to pay the Termination Sum shall be accordingly reduced by such insurance
proceeds but in the event that such insurance proceeds be less than the amount of the Termination Sum together with any interest accrued thereon, the Charterers remain obliged to pay to the Owners the balance so that the full amount of
the Termination Sum together with any interest accrued thereon due are received by the Owners;
|
|
(iii) |
the Vessel continues to be insured in accordance with the terms of this Charter and as may be required by any other agreements relating to the ownership, operation, management, chartering
or financing of the Vessel; and
|
|
(iv) |
the obligation of the Charterers to pay the Termination Sum shall remain unaffected and exist regardless of whether any of the insurers have agreed or refused to meet or have disputed in
good faith, the claim for Total Loss.
|
40.13 |
For the purpose of this Charter, a Total Loss shall be deemed to have occurred:
|
|
(a) |
in the case of an actual loss of the Vessel, on the date on which it occurred or, if that is unknown, the date when the Vessel was last heard of; or
|
|
(b) |
in the case of a constructive, compromised, agreed or arranged total loss of the Vessel, on the earlier 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 Owners with the insurers in which the insurers agree to treat the Vessel as a total loss.
|
40.14 |
The Owners shall have no obligation to supply to the Charterers with a replacement vessel following the occurrence of a Total Loss.
|
41. |
FEES AND EXPENSES; INDEMNITIES;
|
41.1 |
Fees
|
41.2 |
Without prejudice to any other rights of the Owners hereunder, the Charterers shall promptly pay to the Owners within ten (10) Business Days of demand on a full indemnity basis all costs,
charges and expenses incurred by the Creditor Parties in collecting any Charterhire or other payments not paid on the due date under this Charter and in remedying any other failure of the Charterers to observe the terms and conditions of
this Charter.
|
41.3 |
All costs (including, but not limited to, legal costs, fees for insurance opinions, valuation and inspection) and expenses reasonably incurred by the Creditor Parties in the preparation,
negotiation, documentation, printing and execution of all documentation in relation to this Charter and the Transaction Documents and all legal costs, expenses and other disbursements reasonably incurred by the Creditor Parties' legal
counsels in connection with the same, shall be for the account of the Charterers and the Charterers shall pay such costs and expenses promptly within ten (10) Business Days of demand.
|
41.4 |
All costs and expenses incurred by the Owners in relation to the acquisition and registration of the Vessel by the Owners in the Owners' name in the flag state stated in Box 5 together
with any and all fees (including but not limited to any vessel registration and tonnage fees) payable by the Owners to such flag state to maintain and/or renew such registration shall be for the account of the Charterers and the
Charterers shall pay such costs and expenses promptly within ten (10) Business Days of demand.
|
41.5 |
In addition to the foregoing and to the extent not already addressed by the foregoing, the Charterers agree at all times during this Charter to indemnify and keep indemnified the Creditor
Parties against:
|
|
(a) |
all costs and expenses whatsoever reasonably incurred in connection with this Charter and any other Transaction Document or the Vessel, and any costs, charges, or expenses reasonably
incurred which the Charterers have agreed to pay under this Charter and any other Transaction Document and shall be claimed or assessed against or paid by the Creditor Parties save for (in each case) resulting from the wilful misconduct
of the Creditor Parties;
|
|
(b) |
any tax (except income tax) imposed on, or suffered by, any Creditor Party, excluding:
|
|
(i) |
any tax imposed on and calculated by reference to the net income actually received or receivable by such Creditor Party (but, for the avoidance of doubt, not including any sum deemed for
the purposes of tax to be received or receivable by such Creditor Party but not actually receivable) by the jurisdiction in which such Creditor Party is incorporated; or
|
|
(ii) |
any loss or liability that is compensated for by an increased payment under Clause 51.2.2;
|
|
(c) |
all losses, costs, charges, expenses, fees, payments, liabilities, penalties, fines, damages or other sanctions of a monetary nature (collectively, for the purposes of this Clause 41.5, Losses) suffered or incurred by the Creditor Parties and arising directly or indirectly in any manner out of the design, manufacture, delivery, non-delivery, purchase, importation, registration,
ownership, chartering, sub-chartering, possession, control, use, operation, condition, maintenance, repair, replacement, refurbishment, modification, overhaul, insurance, sale or other disposal, return or storage of or loss of or damage
to the Vessel or otherwise in connection with the Vessel (whether or not in the control or possession of the Charterers), any and all claims in tort or in contract by any Sub-Charterer from the Charterers nor any Sub-Charterer or any
other party contracting with the Charterers or any Sub-Charterer save for (in each case) resulting from the wilful misconduct of the Creditor Parties;
|
|
(d) |
all Losses suffered or incurred by the Creditor Parties which result directly or indirectly from claims which may at any time be made on the ground that any design, article or material of
or in the Vessel or the operation or use thereof constitutes or is alleged to constitute an infringement of patent or copyright or registered design or other intellectual property right or any other right whatsoever save for (in each
case) resulting from the wilful misconduct of the Creditor Parties;
|
|
(e) |
all Losses suffered or incurred by the Owners in preventing or attempting to prevent the arrest, confiscation, seizure, taking in execution, impounding, forfeiture or detention of the
Vessel, or in securing the release of the Vessel therefrom save for (in each case) resulting from the wilful misconduct of the Creditor Parties;
|
|
(f) |
all Losses suffered or incurred by the Owners with respect to or as a direct result of the presence, escape, seepage, spillage, leaking, discharge or migration from the Vessel of oil or
any other hazardous substance, including
|
|
(g) |
any Losses incurred or suffered by the Owners in liquidating, employing or prepaying funds acquired or borrowed to purchase or finance or refinance the Vessel (excluding any costs incurred
in unwinding any associated interest rate or currency swaps or currency futures transactions entered into by the Owners) following any default in payment hereunder or the occurrence of any Termination Event.
|
41.6 |
If, under any applicable law, whether as a result of judgment against the Charterers or the liquidation of the Charterers or for any other reason, any payment to be made by the Charterers
under or in connection with this Charter is made or is recovered in a currency other than the currency (the currency of obligation) in which it is payable pursuant to this Charter then, to the
extent that the payment (when converted into the currency of obligation at the rate of exchange on the date for the determination of liabilities permitted by the applicable law) falls short of the amount unpaid under this Charter, the
Charterers shall as a separate and independent obligation, fully indemnify the Creditor Parties against the amount of the shortfall; and for the purposes of this sub-clause rate of exchange means
the best rate at which the Creditor Parties are able on the relevant date to purchase the currency of obligation with the other currency.
|
41.7 |
The Charterers hereby irrevocably agree to indemnify and hold harmless the Owners against any claim, expense, liability or loss to fund the acquisition of the Vessel pursuant to the MOA.
|
41.8 |
The indemnities contained in this Clause 41, and each other indemnity contained in this Charter, shall survive any termination or other ending of this Charter and any breach by, or
repudiation by, the Charterers of this Charter.
|
42. |
NO WAIVER OF RIGHTS
|
42.1 |
No neglect, delay or indulgence on the part of either Party in enforcing the terms and conditions of this Charter shall prejudice the strict rights of that party or be construed as a
waiver thereof nor shall any single or partial exercise of any right of either Party preclude any other or further exercise thereof.
|
42.2 |
No right or remedy conferred upon either Party by this Charter shall be exclusive of any other right or remedy provided for herein or by law and all such rights and remedies shall be
cumulative.
|
43. |
MORTGAGE AND ASSIGNMENT
|
43.1 |
At all times during the term of this Charter, the Owners and the other Creditor Parties shall have the right to create a mortgage or as the case may be, mortgages, over the Vessel in
favour of any lender, bank or financial institution, or agent or trustee or an Affiliate of the Owners (the Mortgagee) and to assign all the rights, title, interests and benefit in and to this
Charter, the other Transaction Documents, the Insurances, the
|
|
(a) |
issue the Owners' Quiet Enjoyment Letter upon the request of the Sub-Charterer; and
|
|
(b) |
use their best endeavours to procure the issuance of the Finance Party Quiet Enjoyment Letter simultaneous with the Owners' execution of any such ship mortgage.
|
43.2 |
The Charterers agree with the Owners to:
|
|
(a) |
cooperate with the Owners to execute or enter into any such documents as the Owners' financiers may reasonably require under and in connection with the financing and/or refinancing of the
Vessel;
|
|
(b) |
acknowledge and agree to be bound by and if required, to ensure that any other applicable charterers consent and agree to be bound by, the notice of any assignment of this Charter, the
other Transaction Documents and/or all or any Security Interest under the Security Documents executed in favour of the Mortgagee in the manner as required by the Mortgagee; and
|
|
(c) |
comply, and provide such information and documents to enable the Owners to comply, with all such instructions or directions in regard to the employment, insurances, operation, repairs and
maintenance of the Vessel as reasonably laid down in the Financial Instruments or as may be reasonably directed from time to time during the currency of this Charter by the mortgage(s) in conformity with the Financial Instruments.
|
44. |
NOTICES
|
44.1 |
Any communication to be made under or in connection with the Transaction Documents shall be made in writing and, unless otherwise stated, may be given in person, by post, fax or email.
|
44.2 |
Except as otherwise provided for in this Charter, all notices or other communications under or in respect of the Transaction Documents shall be in writing and shall be made or given to
such party at the address, facsimile number or email address appearing below (or at such other address, facsimile number or email address as such party may hereafter specify for such purposes to the other by notice in writing):
|
|
(a) |
in the case of the Owners:
|
|
Address: |
c/o Oriental Fleet International Company Limited
50/F, COSCO Tower
183 Queen's Road Central
Hong Kong
|
|
Attention: |
Belinda Lou / Thomas Xing / Xu Ying
|
|
Email: |
lou.can@coscoshipping.com /
thomas.xing@ofi.com.hk / asset@coscoshipping.com |
|
Fax: |
+852 2339 1881
|
|
(b) |
to the Charterers:
|
|
Address: c/o |
1, Vas. Sofias & Meg.
Alexandrou Str.
15124, Maroussi
Athens, Greece
|
|
Attention: |
Andreas Louka
|
|
Email: |
louka@loukapartners.com
|
|
Fax: |
+30 2108128320
|
44.3 |
Any communication or document made or delivered by each Party to the other Party under or in connection with the Transaction Documents will only be effective:
|
|
(a) |
if by way of fax, when received in legible form;
|
|
(b) |
if by way of letter, when it has been left at the relevant address to which it has been posted with postage prepaid in an envelope addressed to the relevant party at that address, and, if
a particular department or officer is specified as part of its address details provided under Clause 44.2, if addressed to that department or officer; or
|
|
(c) |
if by way of email, only when received in a legible form by the email address of the person to whom the communication is made.
|
44.4 |
All communications and documents delivered pursuant to or otherwise relating to this Charter shall be in English.
|
45. |
TERMINATION EVENTS
|
|
(a) |
the Charterers or any other Security Party fails to make any payment on its due date under a Transaction Document to which it is a party unless such failure to pay is remedied within a
period of three (3) Business Days of such payment becoming due and payable; or
|
|
(b) |
the Charterers fail to obtain and/or maintain the Insurances required under Clause 39 in accordance with the provisions thereof or any insurer in respect
|
|
(c) |
the Guarantor fails to comply with the financial covenants under clause 14 of schedule 2 to the Guarantee unless such financial covenants are complied with within thirty (30) days of such
failure to comply (as evidenced by the financial statements of the Guarantor as of the date of such remedy and a Compliance Certificate delivered by the Guarantor setting out (in reasonable detail) computations as to compliance with
clause 14 of schedule 2 to the Guarantee as at the date at which those financial statements were drawn up); or
|
|
(d) |
the Charterers or any other Security Party commits any other breach of, or omits to observe or perform, any of their other obligations or undertakings in this Charter or any other
Transaction Document (other than a breach referred to in paragraph (a), (b) or (c) above or paragraph (q) below) unless such breach or omission is, in the opinion of the Owners, remediable and the Charterers and/or the relevant Security
Party shall remedy such breach or omission within ten (10) Business Days of notice thereof from the Owners; or
|
|
(e) |
any representation or warranty or statement made or deemed to be made by the Charterers or any Security Party in or pursuant to any Transaction Document to which it is a party or in any
document or certificate furnished to the Owners and the Security Trustee in connection herewith or if applicable, in the case of the Charterers only, the Certificate of Delivery and Acceptance, proves to be incorrect or misleading in any
material respect when it is made or deemed made; or
|
|
(f) |
any of the following occurs in relation to any Financial Indebtedness of the Charterers or any other Security Party:
|
|
(i) |
any Financial Indebtedness of the Charterers or any other Security Party is not paid when due nor within any originally applicable grace period; or
|
|
(ii) |
any Financial Indebtedness of the Charterers or any other Security Party is declared to be or otherwise becomes due and payable, prior to its specified maturity date as a result of any
event of default (howsoever described); or
|
|
(iii) |
any commitment for any Financial Indebtedness of the Charterers or any other Security Party is cancelled or suspended by a creditor of the Charterers or any other Security Party (as the
case may be) as a result of an event of default (however described); or
|
|
(iv) |
any creditor of the Charterers or any other Security Party becomes entitled to declare any Financial Indebtedness of the Charterers or any other Security Party (as the case may be) due and
payable prior to its specified maturity as a result of an event of default (howsoever defined),
|
|
(g) |
any of the following events (or any analogous procedure or step is taken in any jurisdiction) occurs in relation to the Charterers or any other Security Party:
|
|
(i) |
the Charterers or any other Security Party are or are reasonably presumed or deemed to be unable or admits inability to pay their debts as they fall due, suspends making payments on any of
their debts or, by reason of actual or anticipated financial difficulties, commences negotiations with one or more of their creditors with a view to rescheduling any of their indebtedness; or
|
|
(ii) |
the value of their assets is less than their liabilities (taking into account contingent and prospective liabilities);
|
|
(iii) |
a moratorium is declared in respect of any indebtedness of the Charterers or any other Security Party;
|
|
(iv) |
the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration, provisional supervision or reorganisation (by way of voluntary arrangement, scheme of
arrangement or otherwise) of the Charterers or any other Security Party;
|
|
(v) |
a composition or arrangement with any creditor of the Charterers or any other Security Party, or any assignment for the benefit of creditors generally of the Charterers or any other
Security Party or a class of such creditors;
|
|
(vi) |
the appointment of a liquidator, receiver, administrator, administrative receiver, compulsory manager, provisional supervisor or other similar officer in respect of the Charterers or any
other Security Party or any of its assets; or
|
|
(vii) |
enforcement of any Security over any assets of the Charterers or any other Security Party; or
|
|
(viii) |
any expropriation, attachment, sequestration, distress or execution (or any analogous process in any jurisdiction) affects any asset or assets of the Charterers or any other Security Party
which has or, in the opinion of the Owners, is likely to have a Material Adverse Effect; or
|
|
(h) |
the Charterers or any other Security Party suspends or ceases or threatens to suspend or cease carrying on all or a material part of their business; or
|
|
(i) |
any consent, approval, Authorisation, license or permit necessary to enable the Charterers to operate or charter the Vessel or the Charterers to sell the Vessel or to enable them to comply
with any provision of this Charter or the MOA, as
|
|
(j) |
any event or circumstance occurs which has or, in the reasonable opinion of the Owners, is likely to have, a Material Adverse Effect; or
|
|
(k) |
this Charter or any other Transaction Document or any Security Interest created by a Transaction Document:
|
|
(i) |
is cancelled, terminated, rescinded or suspended or otherwise ceases to remain in full force and effect for any reason or no longer constitutes legal, valid, binding and enforceable
obligations of any party to that document for any reason whatsoever; or
|
|
(ii) |
is amended or varied without the prior written consent of the Owners and the Security Trustee, except for any amendment or variation which is expressly permitted by this Charter or any
other relevant Transaction Document; or
|
|
(l) |
a Security Party rescinds or purports to rescind or repudiates or purports to repudiate a Transaction Document to which it is a party or any other party of any of those Transaction
Documents evidences an intention to repudiate or rescind any of those Transaction Documents; or
|
|
(m) |
it is or has become unlawful for the Charterers or any other Security Party to perform any of their obligations under the Transaction Documents to which they are a party or any Security
Interest created or expressed to be created or evidenced by the Security Documents to which they are a party ceases to be effective with the ranking and priority it is expressed to have; or
|
|
(n) |
the Vessel is not delivered latest by the Cancelling Date; or
|
|
(o) |
the occurrence of a Change of Control; or
|
|
(p) |
the occurrence of any of the following events:
|
|
(i) |
a default under the MOA which is not waived by the Owners; or
|
|
(ii) |
a default or termination event or the equivalent under any Collateral Transaction Documents which is not waived by the relevant Collateral Owner; or
|
|
(q) |
in the event that a shortfall occurs in the Market Value of the Vessel together with the security value of any additional cash deposit or other security provided as required under Clause
47.1(n), the Charterers have not:
|
|
(i) |
provided or procured the provision of additional cash deposit or other security in a form and in an amount acceptable to the Owners; or
|
|
(ii) |
prepaid so much of the Charterhire Principal to cover such shortfall,
|
46. |
REPRESENTATIONS AND WARRANTIES
|
|
(a) |
each Security Party is a limited liability company duly incorporated and validly existing and, where applicable, in good standing under the laws of its jurisdiction of incorporation,
organisation or formation (as the case may be) with power to own its assets, carry on its business as it is being conducted, enter into the Transaction Documents and to exercise its rights and perform its obligations under the Transaction
Documents and all corporate and other action required to authorise its execution of the Transaction Documents and its performance of its obligations thereunder have been duly taken;
|
|
(b) | (i) | the obligations expressed to be assumed by each Security Party in the Transaction Documents to it is a party constitute, subject to the Legal Reservations, its legal and valid obligations, binding on it in accordance with the terms of the Transaction Documents and no limit on any of its powers will be exceeded as a result of the sale, leasing, borrowings, granting of security or giving of guarantees contemplated by the Transaction Documents or the performance by it of any of its obligations thereunder; and |
|
(ii) |
without limiting the generality of paragraph (b)(i) above, subject to the Security Perfection Requirements, each Security Document to which each Security Party is a party creates the
Security Interests which it purports to create and such Security Interests are valid and effective;
|
|
(c) |
the execution of the Transaction Documents by each Security Party and its exercise of its rights and performance of its obligations under any of such Transaction Documents do not
constitute and will not result in any breach of or conflict with, any agreement or treaty to which it is a party;
|
|
(d) |
all Authorisations, consents, approvals, resolutions, licences, exemptions, filings, notarisations or registrations required of each of the Charterers and the other Security Parties:
|
|
(i) |
to enable them lawfully to enter into, exercise its rights and comply with its obligations in the Transaction Documents to which they are respectively a party;
|
|
(ii) |
to make the Transaction Documents to which they are respectively a party admissible in evidence in its Relevant Jurisdictions;
|
|
(iii) |
for them to carry on its business, and which are material; and
|
|
(iv) |
to enable them to create the Security Interest to be created by them under any Security Document to which they are respectively a party
|
|
(e) |
the execution, delivery, and performance of the Transaction Documents to which each Security Party is or shall be a party will not, in each case: (i) violate any law, governmental rule,
regulation, order, judgment, award or decree which is binding upon it or any of its assets; (ii) contravene any provision of its constitutional documents; (iii) contravene or result in the breach of any agreement to which such Security
Party is a party or by which it or any of its assets or revenues is bound, and (iv) constitute a default under any agreement to which such Security Party is a party or by which it or any of its assets or revenues are bound;
|
|
(f) |
no third party has any Security Interest, other than the Permitted Security Interests, or any other interest, right or claim over, in or in relation to the Vessel, this Charter or any
moneys payable hereunder and/or any of the other Transaction Documents;
|
|
(g) |
except as specifically referred to in any Legal Opinion, all payments which a Security Party is liable to make under any Transaction Document to which such Security Party is a party may be
made by such party without deduction or withholding for or on account of any tax payable under the laws of each Relevant Jurisdiction of such Security Party;
|
|
(h) |
no legal or administrative action of any kind whatsoever involving a Security Party which has or, in the opinion of the Owners, is likely to have a Material Adverse Effect has been
commenced or taken;
|
|
(i) |
each Security Party has paid all taxes applicable to, or imposed on or in relation to it, its business or if applicable, the Vessel, except for those being contested in good faith with
adequate reserves;
|
|
(j) |
subject to the Legal Reservations:
|
|
(i) |
the choice of governing law as stated in each Transaction Document to which a Security Party is party to and the agreement by such party to refer disputes to the relevant courts or
tribunal as stated in such Transaction Document will be recognised and enforced in the Relevant Jurisdictions of such Security Party; and
|
|
(ii) |
any arbitral award, ruling or judgment obtained in the Relevant Jurisdictions of such Security Party in relation to such Transaction Documents will be recognised and enforced in the
Relevant Jurisdictions of such Security Party;
|
|
(k) |
no Security Party nor any of their assets are entitled to immunity on the grounds of sovereignty or otherwise from any legal action or proceeding
|
|
(l) |
the obligations of each Security Party under each Transaction Document to which it is a party, are the direct, general and unconditional obligations of such Security Party and rank at
least pari passu with all other present and future unsecured and unsubordinated creditors of such Security Party save for any obligation which is mandatorily preferred by law and not by virtue of
any contract;
|
|
(m) |
no Security Party (other than the Guarantor) is a US Tax Obligor or registered as a non-Hong Kong company under Companies Ordinance (Cap. 622 of the Laws of Hong Kong), and none of them
have established a place of business in England or the US;
|
|
(n) |
no Security Party is a Restricted Person;
|
|
(o) |
each Security Party is in compliance with all Sanctions laws, and none of them have been or are currently being investigated on compliance with Sanctions, they have received notice or are
not aware of any claim, action, suit or proceeding against any of them with respect to Sanctions and they have not taken any action to evade the application of Sanctions;
|
|
(p) |
neither the Charterers nor any other Security Party is insolvent or in liquidation or administration or subject to any other formal or informal insolvency procedure, and no receiver,
administrative receiver, administrator, liquidator, trustee or analogous officer has been appointed in respect of the Charterers or any other Security Party or all or material part of their assets;
|
|
(q) |
no Termination Event is continuing or might reasonably be expected to result from the entry into and performance of this Charter or any other Transaction Document;
|
|
(r) |
subject to any qualification (if applicable) set out in such information, any information provided by the Charterers (or on their behalf) to the Owners and the other Creditor Parties was
true and accurate in all material respects as at the date it was provided or as the date at which such information was stated;
|
|
(s) | (i) | the financial statements of the Guarantor most recently supplied to the Owners (which, at the date of this Charter, are its Original Financial Statements) were prepared in accordance with GAAP consistently applied save to the extent expressly disclosed in such financial statements; |
|
(ii) |
the financial statements of the Guarantor most recently supplied to the Owners (which, at the date of this Charter, are its Original Financial Statements) give a true and fair view of (if
audited) or fairly and represent (if unaudited) their consolidated financial condition and operations for the period to which they relate, save to the extent expressly disclosed in such financial statements; and
|
|
(iii) |
there has been no material adverse change in the business or consolidated financial condition of the Group since the date of the Guarantor's Original Financial Statements;
|
|
(t) |
the Charterers are a wholly-owned Subsidiary of the Guarantor, which is ultimately controlled by the Substantial Shareholder;
|
|
(u) |
no litigation, arbitration or administrative proceedings of or before any court, arbitral body or agency (which, if adversely determined, would have a Material Adverse Effect on any
Security Party) have been started or (to the best of the knowledge and belief of such Security Party) threatened against it;
|
|
(v) |
no judgment or order of a court, arbitral body or agency which might reasonably be expected to have a Material Adverse Effect has been made against any Security Party; and
|
|
(w) |
each Security Party has complied with all anti-money laundering legislation (to the extent applicable to it) that is relevant in the context of the transactions contemplated by the
Transaction Documents to which it is a party.
|
47. |
CHARTERERS' UNDERTAKINGS
|
47.1 |
General Covenants
|
|
(a) |
they will keep the Vessel registered in the name of the Owners under the laws and flag of the Republic of the Marshall Islands, and shall not do or permit to be done anything, or omit to
do anything which could or might result in:
|
|
(i) |
such registration being forfeited or imperilled; or
|
|
(ii) |
the Vessel being required to be registered under any other law or flag
|
|
(b) |
they will provide or will procure that each Security Party provides, the Owners with details of any legal or administrative action involving such Security Party or the Vessel or any
detention or arrest of the Vessel or any damage to or alteration of the Vessel in excess of the Major Casualty amount as soon as such action is instituted or it becomes apparent to such Security Party that it is likely to be instituted
and is likely to have a Material Adverse Effect on the ability of a Security Party to perform their obligations under each Transaction Document to which it is a party;
|
|
(c) |
they will, and will procure that each other Security Party will obtain and promptly renew or procure the obtainment or renewal of and provide copies of, from time to time, any necessary
consents, approvals, Authorisations,
|
|
(d) |
they will not, and will procure that each other Security Party will not, create, assume or permit to exist any Security Interest of any kind upon any Transaction Document to which such
Security Party is a party, and if applicable, the Vessel, in each case other than Permitted Security Interests;
|
|
(e) |
they will at their own cost, and will procure that each other Security Party will:
|
|
(i) |
do all that such Security Party can to ensure that any Transaction Document to which such Security Party is a party validly creates the obligations and the Security Interests which
Security Party purports to create; and
|
|
(ii) |
without limiting the generality of paragraph (i) above, where necessary promptly register, file, record or enrol any Transaction Document to which such Security Party is a party with any
court or authority in all Relevant Jurisdictions of such Security Party, pay any stamp, registration or similar tax in all Relevant Jurisdictions of such Security Party in respect of any Transaction Document to which such Security Party
is a party, give any notice or take any other step which, is or has become necessary or desirable for any such Transaction Document to be valid, enforceable or admissible in evidence or to ensure or protect the priority of any Security
Interest which such Security Party creates;
|
|
(f) |
they will, and will procure that each other Security Party will:
|
|
(i) |
notify the Owners as soon as it becomes aware of the occurrence of (A) any Termination Event and (B) any other matters which might lead to an occurrence of any Termination Event; and
|
|
(ii) |
notify the Owners of any steps or action which they are, or such Security Party is, taking, or considering taking, to remedy or mitigate the effect of such occurrence,
|
|
(g) |
they will, and will procure that each other Security Party will, as soon as practicable after receiving the request, provide the Owners with any additional financial or other information
relating:
|
|
(i) |
to themselves and/or the Vessel (including, but not limited to the condition and location of the Vessel); or
|
|
(ii) |
to any other matter relevant to, or to any provision of any Transaction Document to which it is a party;
|
|
(h) |
they will provide the Owners with all such information as the Owners shall require regarding employment of the Vessel (including cargo, voyage details such as duration, loading port and
discharge port) every three (3) months throughout the Charter Period, and engagements, particulars of all towages and salvages of the Vessel, and copies of all charters and other contracts of her employment or otherwise howsoever
concerning her;
|
|
(i) |
without prejudice to Clause 47, comply, or procure compliance, and will procure that each other Security Party and any Approved Manager of the Vessel will comply or procure compliance,
with all laws or regulations relating to the Vessel and its ownership, employment, operation, management and registration, including the ISM Code, the ISPS Code, all Environmental Laws and the laws of the Vessel's registry;
|
|
(j) |
the Vessel shall be classed and maintained in the highest class with the Classification Society upon Delivery and shall be free of all overdue recommendations and requirements and they
shall promptly provide class records and inspection reports of the Vessel to the Owners;
|
|
(k) |
neither the Charterers nor any other Security Party shall enter or be permitted to enter, into any form of merger, sub-division, amalgamation or other reorganisation or change of
ownership;
|
|
(l) | (i) | they shall permit the Owners (at the expense of the Charterers) by surveyors or other persons appointed by them for such purpose to board the Vessel no more than once per calendar year during the Charter Period or, following the occurrence of a Termination Event which is continuing, at all reasonable times for the purpose of inspecting her, provided that, unless a Termination Event has occurred and is continuing, such inspection shall not unduly disrupt or interfere with the normal daily operations of the Vessel; |
|
(ii) |
they shall provide all proper facilities for such inspections; and
|
|
(iii) |
they shall give the Owners reasonable advance notice of any intended drydocking of the Vessel (whether for the purpose of classification, survey or otherwise);
|
|
(m) | (i) | they will ensure that the Market Value of the Vessel shall be tested once every twelve (12) months commencing from the Commencement Date in the absence of a Termination Event, and upon the occurrence |
|
(ii) |
in the event of the failure or delay of the Charterers to arrange such testing of the Market Value of the Vessel, the Owners shall have the liberty to arrange such testing at such time as
the Owners shall require; and
|
|
(iii) |
they shall pay the amount of the fees and expenses of an Approved Valuer incurred for all such valuations and all legal and other expenses reasonably incurred by the Owners in connection
with any matter arising out of this Clause;
|
|
(n) |
they will ensure that the Market Value of the Vessel shall at all times be equal to or greater than one hundred and twenty per cent. (120%) of the Charterhire Principal, however, if the
Owners notify the Charterers that the Market Value of the Vessel has fallen below one hundred and twenty per cent. (120%) of the Charterhire Principal, the Charterers shall, unless otherwise agreed by the Owners, within thirty (30) days
of the Owners' receipt of the relevant valuation of the Vessel, provide additional cash deposit or other security in a form and in an amount acceptable to the Owners or prepay the Charterhire Principal to cover the shortfall. Any amount
prepaid pursuant to this Clause 47.1(n) shall be applied towards reducing the instalments of Fixed Charterhire (for the avoidance of doubt, excluding the Balloon Payment) falling on or after the date of such prepayment by the amount of
such prepayment on a pro-rata basis;
|
|
(o) |
they will notify the Owners promptly of:
|
|
(i) |
any Environmental Claim made against the Charterers in connection with the Vessel, or any Environmental Incident, arrest or detention of the Vessel, any exercise or purported exercise of
any lien on the Vessel or its Earnings or any requisition of the Vessel for hire; and
|
|
(ii) |
any casualty or occurrence as a result of which the Vessel has become or is, by the passing of time or otherwise, likely to become, a Major Casualty;
|
|
(p) | (i) | they shall not permit any chartering of the Vessel on a time charter basis of one (1) calendar year or more unless the Charterers shall have provided the Owners with prior written notice of such chartering together with detailed information about the intended Sub-Charterer, the proposed terms of the intended Sub-Charter and such further information as the Owners may reasonably request; and |
|
(ii) |
except with the prior written consent of the Owners (and then only subject to such terms as the Owners may impose), they shall not let the Vessel:
|
|
(A) |
on demise charter for any period;
|
|
(B) |
on terms whereby more than two (2) months' hire (or the equivalent) is payable in advance; or
|
|
(C) |
on any terms other than arms' length terms;
|
|
(q) |
they shall comply, and shall procure that each other Security Party complies, with:
|
|
(i) |
all applicable laws to which it may be subject (including, but not limited to, Business Ethics Laws, anti-bribery and corruption laws and anti-money lending laws); and
|
|
(ii) |
all laws and regulations in respect of Sanctions, and in particular, they shall effect and maintain a sanctions compliance policy to ensure compliance with all such laws and regulations
implemented from time to time;
|
|
(r) |
the Vessel shall not be employed, operated or managed in any manner which (i) is contrary to any Sanctions and in particular, the Vessel shall not be used by or for the benefit for any
party which is a target of Sanctions, or trade to any Restricted Country; or (ii) would trigger the operation of any sanctions limitation or exclusion clause in any insurance documentation;
|
|
(s) |
they will, and will procure that each other Security Party will, promptly notify the Owners and provide all information in relation to its business and operations which may be relevant for
the purposes of ascertaining whether they are in compliance with all laws and regulations relating to Sanctions, and in particular, they shall notify the Owners in writing immediately upon being aware that any of its shareholders or
directors, officers of employees is a Restricted Person or has otherwise become a target of Sanctions;
|
|
(t) |
they shall not appoint or permit to be appointed any manager of the Vessel unless it is an Approved Manager appointed on terms acceptable to the Owners and their financiers (if any) and
such Approved Manager has (prior to accepting its appointment) entered into a Manager's Undertaking;
|
|
(u) |
they shall notify the Owners in writing as soon as they become aware that the Charterers are likely to, or will receive, any tax credit in relation to any payments made by any
Sub-Charterer to it;
|
|
(v) |
save with the prior written consent of the Owners, they shall ensure that no Change of Control occurs;
|
|
(w) |
they shall, at their own expense, replace, renew or substitute any equipment of the Vessel as shall be so damaged or worn as to be unfit for use. Title to any part replaced, renewed or
substituted shall remain with the Owners;
|
|
(x) |
save with the prior written consent of the Owners, there shall not be any transfer or disposal of:
|
|
(i) |
the legal or beneficial shareholding of the Charterers; or
|
|
(ii) |
the legal or beneficial shareholding of the Guarantor,
|
|
(y) |
they shall not create, incur, assume, suffer to exist or in any manner become or remain liable for any Financial Indebtedness, other than:
|
|
(i) |
Financial Indebtedness normally associated with the day to day operation of the Vessel, or otherwise in the normal course of business;
|
|
(ii) |
Financial Indebtedness under the Transaction Documents; and
|
|
(iii) |
Financial Indebtedness, including:
|
|
(A) |
all shareholder's and intercompany loans, which by its terms is subordinate and subject in right of payment to the prior payment in full of the Financial Indebtedness under or pursuant to
the Transaction Documents, as provided in paragraph (z) below;
|
|
(B) |
all shareholder's and intercompany advances, which upon occurrence of a Termination Event which is continuing, shall be subordinated and subject in right of payment to the prior payment in
full of the Financial Indebtedness under or pursuant to the Transaction Documents, as provided in paragraph (aa) below,
|
|
(z) |
they acknowledge to and undertake with the Owners that all shareholder's and intercompany loans from time to time made by the Guarantor or any other member of the Group to the Charterers:
|
|
(i) |
are and shall be subordinated in all respects to all amounts owing and which may in future become owing by the Charterers under this Charter and the other Transaction Documents;
|
|
(ii) |
shall not be repaid or be subject to payment of interest (although interest may accrue);
|
|
(iii) |
are and shall remain unsecured by any Security Interest over the whole or any part of the assets of the Charterers; and
|
|
(iv) |
are not and shall not be capable of becoming subject to any right of set-off or counterclaim;
|
|
(aa) |
they acknowledge to and undertake with the Owners that all shareholder's and intercompany advances from time to time made by the Guarantor or any other member of the Group to the
Charterers:
|
|
(i) |
shall be non-interest bearing;
|
|
(ii) |
are and shall remain unsecured by any Security Interest over the whole or any part of the assets of the Charterers;
|
|
(iii) |
are not and shall not be capable of becoming subject to any right of set-off or counterclaim; and
|
|
(iv) |
upon occurrence of a Termination Event which is continuing:
|
|
(A) |
shall not be repaid; and
|
|
(B) |
shall be subordinated in all respects to all amounts owing and which may in future become owing by the Charterers under this Charter and the other Transaction Documents;
|
|
(bb) |
they shall not declare or pay any dividends unless no Termination Event has occurred or will occur as a result of such declaration or payment;
|
|
(cc) |
they shall, and shall procure that each other Security Parties will, ensure that all the Security Perfection Requirements have been or will be done or obtained (as the case may be) no
later than the latest date permitted by applicable law and in any event by such date as the Owners and the Security Trustee may specify;
|
|
(dd) |
they shall, and shall procure that each other Security Parties will, conduct their respective business in compliance with applicable anti-corruption laws; and
|
|
(ee) |
they shall provide the documents and evidence specified in Clause 35.2 in form and substance satisfactory to the Owners as soon as the same become available, but in any event before the
relevant date as specified in Parts C and D of Addendum No.1.
|
48. |
PURCHASE OPTION
|
48.1 |
Subject to Clause 48.2, the Owners hereby grant to the Charterers a purchase option to require the Owners to sell all of the Owners' beneficial and legal right, title and interest in the
Vessel and all belonging to her, to the Charterers at the Purchase Option Price upon the terms and conditions of this Charter.
|
48.2 |
Subject to the other terms and conditions of this Charter, the Purchase Option shall only be exercisable by the Charterers on or after the third (3rd) anniversary date of the Commencement
Date provided that no Termination Event has occurred and is continuing.
|
48.3 |
The Purchase Option may be exercised by the Charterers by giving the Owners at least ninety (90) days' prior written notice of their intention to exercise the Purchase Option such that the
Purchase Option Notice shall accordingly be given to the Owners no later than the date falling ninety (90) days' prior to the intended Purchase Option Date (unless otherwise agreed by the Owners in their absolute discretion).
|
48.4 |
The Purchase Option Price shall be the aggregate of (but in each case, not double-counting):
|
|
(a) |
any Charterhire due and payable on the Purchase Option Date and any default interest payable under Clause 37.12;
|
|
(b) |
if the Purchase Option Date is a Payment Date, the Charterhire Principal corresponding to that Payment Date in Schedule 2, or if the Purchase Option Date is not a Payment Date, all
Charterhire Principal corresponding to the Payment Date in Schedule 2 immediately preceding the Purchase Option Date (in each case, the Relevant Charterhire Principal);
|
|
(c) |
if the Purchase Option Date is not a Payment Date, any Breakfunding Costs;
|
|
(d) |
all costs (including, but not limited to, legal costs) and expenses reasonably incurred by the Owners under this Charter and the other Transaction Documents in connection with or as a
result of the exercise of the Purchase Option by the Charterers; and
|
|
(e) |
an early termination fee calculated at the following percentage of the Relevant Charterhire Principal:
|
If the Purchase Option
|
Percentage of
|
Date occurs after
|
Relevant Charterhire Principal
|
the following anniversary of
|
|
the Commencement Date
|
|
After 3rd anniversary
|
2%
|
After 4th anniversary
|
1.5%
|
After 5th anniversary
|
1%
|
After 6th anniversary
|
0.5%
|
After 7th anniversary
|
0%
|
48.5 | (a) | The Purchase Option Notice shall be signed by a duly authorised officer or attorney of the Charterers and shall contain the following information: |
|
(i) |
the Purchase Option Date; and
|
|
(ii) |
the Relevant Charterhire Principal portion of the Purchase Option Price payable on the Purchase Option Date as determined in accordance with Clause 48.4(b).
|
|
(b) |
Upon receipt of a duly signed and completed Purchase Option Notice in accordance with Clause 48.5(a), the Owners shall notify the Charterers of the Purchase Option Price in writing as soon
as practicable.
|
48.6 |
The Charterers may serve a Purchase Option Notice throughout the duration of the Charter Period and is irrevocable once given.
|
48.7 |
Upon the exercise of the Purchase Option, the Owners and the Charterers shall thereupon perform their respective obligations referred to in Clause 50 and the
|
49. |
PURCHASE OBLIGATION
|
50. |
SALE OF THE VESSEL BY PURCHASE OPTION AND PURCHASE OBLIGATION
|
|
(a) |
Completion of the exercise of the Purchase Option or the performance of the Purchase Obligation (as the case may be) shall take place on the Relevant Date whereupon the Owners will sell to
the Charterers (or their nominee), and the Charterers (or their nominee) will purchase from the Owners, all the legal and beneficial interest and title in the Vessel, for the Relevant Price on an "as is where is" basis and on the
following terms and conditions:
|
|
(i) |
the Charterers expressly agree and acknowledge that, no condition, warranty or representation of any kind is or has been given by or on behalf of the Owners in respect of the Vessel or any
part thereof, and accordingly the Charterers confirm that that they have not, in entering into this Charter, relied on any condition, warranty or representation by the Owners or any person on the Owners' behalf, express or implied,
whether arising by law or otherwise in relation to the Vessel or any part thereof, including, without limitation, warranties or representations as to the description, suitability, quality, merchantability, fitness for any purpose, value,
state, condition, appearance, safety, durability, design or operation of any kind or nature of the Vessel or any part thereof, and the benefit of any such condition, warranty or representation by the Owners is hereby irrevocably and
unconditionally waived by the Charterers to the extend permissible under applicable law, the Charterers hereby also waives any rights which they may have in tort in respect of any the matters referred to above and irrevocably agree that
the Owners shall have no greater liability in tort in respect of any such matter than they would have in contract after taking account of all of the foregoing exclusions. No third parties making any representation or warranty relating to
the Vessel or any part thereof are the agents of the Owners nor has any such third party authority to bind the Owners thereby. Notwithstanding anything contained above, nothing contained herein is intended to obviate, remove or waive any
rights or warranty or other claims relating thereto which the Charterers (or their nominee) or the Owners
|
|
(ii) |
the Vessel shall, on completion of sale, be free from any registered mortgages incurred by the Owners (where any mortgages, liens, Security Interests and debts arising out of or in
connection with this Charter or the other Transaction Documents shall be released prior to (or simultaneously with) the transfer and/or release of the Relevant Price by the Charterers (as buyers) to the Owners (as sellers));
|
|
(iii) |
the Relevant Price shall be paid by (or on behalf of) the Charterers to the Owners on the Relevant Date together with unpaid amounts of Charterhire but only up to and including the
Relevant Date, and other moneys owing by or accrued or due from the Charterers under this Charter on or prior to such Relevant Date which remain unpaid; and
|
|
(iv) |
upon the Relevant Price together with the other moneys described under paragraph (iii) above being fully and irrevocably paid to the Owners on, and in accordance with, the terms set forth
in this Charter, the Owners agree (at the cost of the Charterers) to enter into (A) a bill of sale, (B) a commercial invoice, (C) a protocol of delivery and acceptance and (D) such other additional documents as may be necessary for the
purpose of registering the Vessel at its intended flag state upon such transfer, provided that the Charterers shall notify the Owners of any such additional documents no later than five (5) Business Days (or such other mutually agreed
date) prior to such transfer, each in such form as may be required by the Charterers' intended flag state.
|
|
(b) |
For the purposes of this Clause 50:
|
|
(i) |
Relevant Date means:
|
|
(A) |
in relation to the exercise of the Purchase Option, the Purchase Option Date; and
|
|
(B) |
in relation to the performance of the Purchase Obligation, the Purchase Obligation Date.
|
|
(ii) |
Relevant Price means:
|
|
(A) |
in relation to the exercise of the Purchase Option, the Purchase Option Price; and
|
|
(B) |
in relation to the performance of the Purchase Obligation, the Purchase Obligation Price.
|
51. |
NO SET-OFF OR TAX DEDUCTION; FATCA PROVISIONS
|
51.1 |
General
|
|
(a) |
All Charterhire and any payment made from the Charterers to enable the Owners to pay all amounts under a Transaction Document shall be paid punctually:
|
|
(i) |
without any form of set-off, cross-claim or condition and in the case of Charterhire, without previous demand; and
|
|
(ii) |
free and clear of any tax deduction or withholding unless required by law.
|
|
(b) |
Without prejudice to Clause 51.1(a), if the Owners are required by law to make a tax deduction from any payment:
|
|
(i) |
the Owners shall notify the Charterers as soon as they become aware of the requirement; and
|
|
(ii) |
the amount due in respect of the payment shall be increased by the amount necessary to ensure that the Owners receive and retain (free from any liability relating to the tax deduction) a
net amount which, after the tax deduction, is equal to the full amount which they would otherwise have received.
|
|
(c) |
In this Charter, tax deduction means any deduction or withholding for or on account of any present or future tax, other than a FATCA Deduction.
|
51.2 |
FATCA provisions
|
51.2.1 |
FATCA Information
|
|
(a) |
Subject to paragraph (c) below, each Relevant Party shall, within ten (10) Business Days of a reasonable request by another Relevant Party:
|
|
(i) |
confirm to that other Relevant Party whether it is:
|
|
(A) |
a FATCA Exempt Party; or
|
|
(B) |
not a FATCA Exempt Party;
|
|
(ii) |
supply to that other Relevant Party (with a copy to all other Relevant Parties) such forms, documentation and other information relating to its status under FATCA as that other Relevant
Party reasonably requests for the purpose of that other Relevant Party's compliance with FATCA; and
|
|
(iii) |
supply to that other Relevant Party such forms, documentation and other information relating to its status as that other Party reasonably requests for the purposes of that other Relevant
Party's compliance with any other law, regulation, or exchange of information regime.
|
|
(b) |
If a Relevant Party confirms to another Relevant Party under 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 Relevant Party shall so notify all other Relevant Parties reasonably promptly.
|
|
(c) |
Paragraph (a) above shall not oblige any Relevant Party to do anything, and paragraph (a)(iii) above shall not oblige any other Relevant Party to do anything, which would or might in its
reasonable opinion constitute a breach of:
|
|
(i) |
any law or regulation;
|
|
(ii) |
any fiduciary duty; or
|
|
(iii) |
any duty of confidentiality.
|
|
(d) |
If a Relevant Party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with paragraph (a)(i) or (ii)
above (including, for the avoidance of doubt, where paragraph (c) above applies), then such Relevant Party shall be treated for the purposes of the Transaction Documents (and payments made under them) as if it is not a FATCA Exempt Party
until such time as the Relevant Party in question provides the requested confirmation, forms, documentation or other information.
|
51.2.2 |
FATCA Deduction and gross up by Security Parties
|
|
(a) |
If a Security Party is required to make a FATCA Deduction, that Security Party shall make that FATCA Deduction and any payment required in connection with that FATCA Deduction within the
time allowed and in the minimum amount required by FATCA.
|
|
(b) |
If a FATCA Deduction is required to be made by a Security Party, the amount of the payment due from that Security Party shall be increased to an amount which (after making any FATCA
Deduction) leaves an amount equal to the payment which would have been due if no FATCA Deduction had been required.
|
|
(c) |
The Charterers shall promptly upon becoming aware that a Security Party must make a FATCA Deduction (or that there is any change in the rate or the basis of a FATCA Deduction) notify the
Owners accordingly.
|
|
(d) |
Within thirty (30) days of making either a FATCA Deduction or any payment required in connection with that FATCA Deduction, the Security Party making that FATCA Deduction or payment shall
deliver to the Owners evidence reasonably satisfactory to the Owners that the FATCA Deduction has been made or (as applicable) any appropriate payment paid to the relevant governmental or taxation authority.
|
51.2.3 |
FATCA Deduction by the Owners
|
51.2.4 |
FATCA Mitigation
|
52. |
INCREASED COSTS
|
52.1 |
This Clause 52.1 applies if the Owners notify the Charterers that they consider that as a result of:
|
|
(a) |
the introduction or alteration after the date of this Charter of a law or an alteration after the date of this Charter in the manner in which a law is interpreted or applied (disregarding
any effect which relates to the application to payments under this Charter of a tax on the Owners' overall net income); or
|
|
(b) |
complying with any regulation (including any which relates to capital adequacy or liquidity controls or which affects the manner in which the Owners allocates capital resources to their
obligations under this Charter) which is introduced, or altered, or the interpretation or application of which is altered, after the date of this Charter,
|
52.2 |
In this Clause 52.1, increased cost means, in relation to the Owners (without any double counting):
|
|
(a) |
an additional or increased cost incurred as a result of, or in connection with, the Owners having entered into, or being a party to, this Charter, of funding the acquisition of the Vessel
pursuant to the MOA or performing their obligations under this Charter;
|
|
(b) |
an additional or increased cost incurred by the financiers of the Owners (if any) as a result of, or in connection with, the financiers of the Owners (if any) having entered into, or being
a party to, the financing arrangements with the Owners and the relevant Financial Instruments in each case relating to the funding of the acquisition of the Vessel pursuant to the MOA;
|
|
(c) |
a reduction in the amount of any payment to the Owners under this Charter or in the effective return which such a payment represents to the Owners or their financiers (if any) on their
capital;
|
|
(d) |
a reduction in the amount of any payment to the financiers of the Owners (if any) under their financing arrangements and relevant Financial Instruments or in the effective return which
such a payment represents to the financiers of the Owners (if any) or on their capital in each case relating to the funding of the acquisition of the Vessel pursuant to the MOA;
|
|
(e) |
any other additional or increased cost of funding or financing the acquisition of the Vessel pursuant to the MOA; and
|
|
(f) |
a liability to make a payment, or a return foregone, which is calculated by reference to any amounts received or receivable by the Owners under this Charter,
|
52.3 |
Subject to the terms of Clause 52.1, the Charterers shall pay to the Owners, within three (3) Business Days of the Owners' demand, the amounts which the Owners from time to time notify the
Charterers to be necessary to compensate the Owners for the increased cost.
|
52.4 |
Clause 53.3 above does not apply to the extent any increased cost is:
|
|
(a) |
attributable to a tax deduction required by law to be made by a Security Party;
|
|
(b) |
attributable to a FATCA Deduction required to be made by a Relevant Party or the Owners;
|
|
(c) |
compensated for by Clause 41.5(b) (or would have been compensated for under Clause 41.5(b) but was not so compensated solely because any of the exclusions in Clause 41.5(b) applied); or
|
|
(d) |
attributable to the wilful breach by the Owners of any law or regulation.
|
53. |
GOVERNING LAW AND JURISDICTION
|
53.1 |
This Charter and any non-contractual obligations arising out of or in connection with it are governed by and shall be construed in accordance with English law and any Dispute arising out
of or in connection with this Charter shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory re-enactment or modification thereof save to the extent necessary to give effect to the
provisions of this Clause.
|
53.2 |
The arbitration reference shall be to three (3) arbitrators:
|
|
(a) |
A Party wishing to refer a Dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other Party requiring the
|
|
(b) |
If the other Party does not appoint its own arbitrator and give notice that it has done so within the fourteen (14) days specified, the Party referring a Dispute to arbitration may,
without the requirement of any further prior notice to the other Party, appoint its arbitrator as sole arbitrator and shall advise the other Party accordingly. The award of a sole arbitrator shall be binding on both Parties as if he/she
had been appointed by agreement.
|
|
(c) |
Where each Party appoints its own arbitrator, then the two (2) arbitrators so appointed may proceed with the arbitration and at any time thereafter appoint a third arbitrator so long as
they do so before any substantive hearing or forthwith in the event that they cannot agree on any matter relating to the arbitration. If the said two arbitrators do not appoint a third within fourteen (14) days of one calling upon the
other to do so, or if they are in disagreement as to the third arbitrator, either arbitrator or a Party shall apply to the London Maritime Arbitrators Association (LMAA) for the appointment of the third arbitrator.
|
|
(d) |
The language used in the arbitration shall be English. The arbitration shall be conducted in accordance with the LMAA Terms current at the time when the arbitration proceedings are
commenced.
|
|
(e) |
Nothing herein shall prevent the Parties agreeing in writing to vary these provisions to provide for the appointment of a sole arbitrator and, if necessary, for the LMAA to exercise its
statutory power to appoint the sole arbitrator if the Parties cannot agree on the appointment.
|
53.3 |
In this Clause 53, proceedings means proceedings of any kind, including an application for a provisional or protective measure and a Dispute means any dispute arising out of or in connection with this Charter (including a dispute relating to the existence, validity or termination of this Charter) or any non-contractual obligation
arising out of or in connection with this Charter.
|
54. |
MISCELLANEOUS
|
54.1 |
The Charterers waive any rights of sovereign immunity which they or any of their properties may enjoy in any jurisdiction and subjects itself to civil and commercial law with respect to
their obligations under this Charter.
|
54.2 |
No term of this Charter is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not Party.
|
54.3 |
This Charter and each Transaction Document may be executed in any number of counterparts and by the different Parties or thereto on separate counterparts, and this has the same effect as
if the signatures on the counterparts were on a single copy of this Charter or that Transaction Document, as the case may be.
|
THE OWNERS
|
||
SIGNED for and on behalf of
|
)
|
|
ORIENTAL FLEET TANKER 12
|
)
|
|
LIMITED
|
)
|
|
(东方富利 TANKER12 有限公司)
|
)
|
|
by , Director
|
)
|
|
in the presence of:
|
)
|
THE CHARTERERS
|
||
SIGNED for and on behalf of
|
)
|
|
MONTE CARLO 71 SHIPPING
|
)
|
|
COMPANY LIMITED
|
)
|
|
by
|
)
|
|
Attorney-in-Fact
|
)
|
|
in the presence of:
|
)
|
Monthly
Period
|
Commencement
Date /
Payment Date)
|
Charterhire
(US$) |
Charterhire Principal
(US$) |
|
Upfront
Charterhire / Balloon Payment |
Fixed
Charterhire (being 1/120 of Financing Principal less Balloon Payment) |
Aggregate Outstanding
Fixed Charterhire and Balloon Payment |
||
1st Payment Date
(Commencement Date) |
Upfront
Charterhire:
7,125,000
|
130,625
|
21,244,375
|
|
1
|
2nd Payment Date
(the date falling on the 10th day of the month falling immediately after Commencement Date) |
130,625
|
21,113,750
|
|
2
|
3rd Payment Date
(the date falling on the 10th day of the second (2nd) month falling immediately after Commencement Date) |
130,625
|
20,983,125
|
|
3
|
4th Payment Date
(the date falling on the 10th day of the third (3rd) month falling immediately after Commencement Date) |
130,625
|
20,852,500
|
|
4
|
5th Payment Date
(the date falling on
the 10th day of the
fourth (4th) month
falling immediately
after
Commencement
Date) |
130,625
|
20,721,875
|
5
|
6th Payment Date
(the date falling on the 10th day of the fifth (5th) month falling immediately after Commencement Date) |
130,625
|
20,591,250
|
|
6
|
7th Payment Date
(the date falling on the 10th day of the sixth (6th) month falling immediately after Commencement Date) |
130,625
|
20,460,625
|
|
7
|
8th Payment Date
(the date falling on the 10th day of the seventh (7th) month falling immediately after Commencement Date) |
130,625
|
20,330,000
|
|
8
|
9th Payment Date
(the date falling on the 10th day of the eighth (8th) month falling immediately after Commencement Date) |
130,625
|
20,199,375
|
|
9
|
10th Payment Date
(the date falling on the 10th day of the ninth (9th) month falling immediately after Commencement Date) |
130,625
|
20,068,750
|
|
10
|
11th Payment Date
(the date falling on the 10th day of the tenth (10th) month falling immediately after Commencement Date) |
130,625
|
19,938,125
|
11
|
12th Payment Date
(the date falling on the 10th day of the eleventh (11th) month falling immediately after Commencement Date) |
130,625
|
19,807,500
|
|
12
|
13th Payment Date
(the date falling on the 10th day of the twelve (12th) month falling immediately after Commencement Date) |
130,625
|
19,676,875
|
|
13
|
14th Payment Date
(the date falling on the 10th day of the thirteenth (13th) month falling immediately after Commencement Date) |
130,625
|
19,546,250
|
|
14
|
15th Payment Date
(the date falling on the 10th day of the fourteenth (14th) month falling immediately after Commencement Date) |
130,625
|
19,415,625
|
|
15
|
16th Payment Date
(the date falling on the 10th day of the fifteenth (15th) month falling immediately after Commencement Date) |
130,625
|
19,285,000
|
|
16
|
17th Payment Date
(the date falling on the 10th day of the sixteenth (16th) month falling immediately after Commencement Date) |
130,625
|
19,154,375
|
23
|
24th Payment Date
(the date falling on
the 10th day of the
twenty-third (23rd)
month falling immediately after Commencement Date) |
130,625
|
18,240,000
|
|
24
|
25th Payment Date
(the date falling on the 10th day of the twenty-fourth (24th) month falling immediately after Commencement Date) |
130,625
|
18,109,375
|
|
25
|
26th Payment Date
(the date falling on the 10th day of the twenty-fifth (25th) month falling immediately after Commencement Date) |
130,625
|
17,978,750
|
|
26
|
27th Payment Date
(the date falling on the 10th day of the twenty-sixth (26th) month falling immediately after Commencement Date) |
130,625
|
17,848,125
|
|
27
|
28th Payment Date
(the date falling on the 10th day of the twenty-seventh (27th) month falling immediately after Commencement Date) |
130,625
|
17,717,500
|
|
28
|
29th Payment Date
(the date falling on the 10th day of the twenty-eighth (28th) month falling immediately after Commencement Date) |
130,625
|
17,586,875
|
29
|
30th Payment Date
(the date falling on the 10th day of the twenty-ninth (29th) month falling immediately after Commencement Date) |
130,625
|
17,456,250
|
|
30
|
31st Payment Date
(the date falling on the 10th day of the thirtieth (30th) month falling immediately after Commencement Date) |
130,625
|
17,325,625
|
|
31
|
32nd Payment Date
(the date falling on the 10th day of the thirty-first (31st) month falling immediately after Commencement Date) |
130,625
|
17,195,000
|
|
32
|
33rd Payment Date
(the date falling on the 10th day of the thirty-second (32nd) month falling immediately after Commencement Date) |
130,625
|
17,064,375
|
|
33
|
34th Payment Date
(the date falling on the 10th day of the thirty-third (33rd) month falling immediately after Commencement Date) |
130,625
|
16,933,750
|
|
34
|
35th Payment Date
(the date falling on the 10th day of the thirty-fourth (34th) month falling immediately after Commencement Date) |
130,625
|
16,803,125
|
35
|
36th Payment Date
(the date falling on the 10th day of the thirty-fifth (35th) month falling immediately after Commencement Date) |
130,625
|
16,672,500
|
|
36
|
37th Payment Date
(the date falling on the 10th day of the thirty-sixth (36th) month falling immediately after Commencement Date) |
130,625
|
16,541,875
|
|
37
|
38th Payment Date
(the date falling on the 10th day of the thirty-seventh (37th) month falling immediately after Commencement Date) |
130,625
|
16,411,250
|
|
38
|
39th Payment Date
(the date falling on the 10th day of the thirty-eighth (38th) month falling immediately after Commencement Date) |
130,625
|
16,280,625
|
|
39
|
40th Payment Date
(the date falling on the 10th day of the thirty-ninth (39th) month falling immediately after Commencement Date) |
130,625
|
16,150,000
|
|
40
|
41st Payment Date
(the date falling on the 10th day of the fortieth (40th) month falling immediately after Commencement Date) |
130,625
|
16,019,375
|
41
|
42nd Payment Date
(the date falling on the 10th day of the forty-first (41st) month falling immediately after Commencement Date) |
130,625
|
15,888,750
|
|
42
|
43rd Payment Date
(the date falling on the 10th day of the forty-second (42nd) month falling immediately after Commencement Date) |
130,625
|
15,758,125
|
|
43
|
44th Payment Date
(the date falling on the 10th day of the forty-third (43rd) month falling immediately after Commencement Date) |
130,625
|
15,627,500
|
|
44
|
45th Payment Date
(the date falling on the 10th day of the forty-fourth (44th) month falling immediately after Commencement Date) |
130,625
|
15,496,875
|
|
45
|
46th Payment Date
(the date falling on the 10th day of the forty-fifth (45th) month falling immediately after Commencement Date) |
130,625
|
15,366,250
|
|
46
|
47th Payment Date
(the date falling on the 10th day of the forty-sixth (46th) month falling immediately after Commencement Date) |
130,625
|
15,235,625
|
47
|
48th Payment Date
(the date falling on
the 10th day of the
forty-seventh (47th)
month falling immediately after Commencement Date) |
130,625
|
15,105,000
|
|
48
|
49th Payment Date
(the date falling on the 10th day of the forty-eighth (48th) month falling immediately after Commencement Date) |
130,625
|
14,974,375
|
|
49
|
50th Payment Date
(the date falling on the 10th day of the forty-ninth (49th) month falling immediately after Commencement Date) |
130,625
|
14,843,750
|
|
50
|
51st Payment Date
(the date falling on the 10th day of the fiftieth (50th) month falling immediately after Commencement Date) |
130,625
|
14,713,125
|
|
51
|
52nd Payment Date
(the date falling on the 10th day of the fifty-first (51st) month falling immediately after Commencement Date) |
130,625
|
14,582,500
|
|
52
|
53rd Payment Date
(the date falling on the 10th day of the fifty-second (52nd) month falling immediately after Commencement Date) |
130,625
|
14,451,875
|
59
|
60th Payment Date
(the date falling on the 10th day of the fifty-ninth (59th) month falling immediately after Commencement Date) |
130,625
|
13,537,500
|
|
60
|
61st Payment Date
(the date falling on the 10th day of the sixtieth (60th) month falling immediately after Commencement Date) |
130,625
|
13,406,875
|
|
61
|
62nd Payment Date
(the date falling on the 10th day of the sixty-first (61st) month falling immediately after Commencement Date) |
130,625
|
13,276,250
|
|
62
|
63rd Payment Date
(the date falling on the 10th day of the sixty-second (62nd) month falling immediately after Commencement Date) |
130,625
|
13,145,625
|
|
63
|
64th Payment Date
(the date falling on the 10th day of the sixty-third (63rd) month falling immediately after Commencement Date) |
130,625
|
13,015,000
|
|
64
|
65th Payment Date
(the date falling on the 10th day of the sixty-fourth (64th) month falling immediately after Commencement Date) |
130,625
|
12,884,375
|
65
|
66th Payment Date
(the date falling on the 10th day of the sixty-fifth (65th) month falling immediately after Commencement Date) |
130,625
|
12,753,750
|
|
66
|
67th Payment Date
(the date falling on the 10th day of the sixty-sixth (66th) month falling immediately after Commencement Date) |
130,625
|
12,623,125
|
|
67
|
68th Payment Date
(the date falling on the 10th day of the sixty-seventh (67th) month falling immediately after Commencement Date) |
130,625
|
12,492,500
|
|
68
|
69th Payment Date
(the date falling on the 10th day of the sixty-eighth (68th) month falling immediately after Commencement Date) |
130,625
|
12,361,875
|
|
69
|
70th Payment Date
(the date falling on the 10th day of the sixty-ninth (69th) month falling immediately after Commencement Date) |
130,625
|
12,231,250
|
|
70
|
71st Payment Date
(the date falling on the 10th day of the seventieth (70th) month falling immediately after Commencement Date) |
130,625
|
12,100,625
|
71
|
72nd Payment Date
(the date falling on the 10th day of the seventy-first (71st) month falling immediately after Commencement Date) |
130,625
|
11,970,000
|
|
72
|
73rd Payment Date
(the date falling on the 10th day of the seventy-second (72nd) month falling immediately after Commencement Date) |
130,625
|
11,839,375
|
|
73
|
74th Payment Date
(the date falling on the 10th day of the seventy-third (73rd) month falling immediately after Commencement Date) |
130,625
|
11,708,750
|
|
74
|
75th Payment Date
(the date falling on the 10th day of the seventy-fourth (74th) month falling immediately after Commencement Date) |
130,625
|
11,578,125
|
|
75
|
76th Payment Date
(the date falling on the 10th day of the seventy-fifth (75th) month falling immediately after Commencement Date) |
130,625
|
11,447,500
|
|
76
|
77th Payment Date
(the date falling on the 10th day of the seventy-sixth (76th) month falling immediately after Commencement Date) |
130,625
|
11,316,875
|
89
|
90th Payment Date
(the date falling on the 10th day of the eighty-ninth (89th) month falling immediately after Commencement Date) |
130,625
|
9,618,750
|
|
90
|
91st Payment Date
(the date falling on the 10th day of the ninetieth (90th) month falling immediately after Commencement Date) |
130,625
|
9,488,125
|
|
91
|
92nd Payment Date
(the date falling on the 10th day of the ninety-first (91st) month falling immediately after Commencement Date) |
130,625
|
9,357,500
|
|
92
|
93rd Payment Date
(the date falling on the 10th day of the ninety-second (92nd) month falling immediately after Commencement Date) |
130,625
|
9,226,875
|
|
93
|
94th Payment Date
(the date falling on the 10th day of the ninety-third (93rd) month falling immediately after Commencement Date) |
130,625
|
9,096,250
|
|
94
|
95th Payment Date
(the date falling on the 10th day of the ninety-fourth (94th) month falling immediately after Commencement Date) |
130,625
|
8,965,625
|
95
|
96th Payment Date
(the date falling on the 10th day of the ninety-fifth (95th) month falling immediately after Commencement Date) |
130,625
|
8,835,000
|
|
96
|
97th Payment Date
(the date falling on the 10th day of the ninety-sixth (96th) month falling immediately after Commencement Date) |
130,625
|
8,704,375
|
|
97
|
98th Payment Date
(the date falling on the 10th day of the ninety-seventh (97th) month falling immediately after Commencement Date) |
130,625
|
8,573,750
|
|
98
|
99th Payment Date
(the date falling on the 10th day of the ninety-eighth (98th) month falling immediately after Commencement Date) |
130,625
|
8,443,125
|
|
99
|
100th Payment Date
(the date falling on the 10th day of the ninety-ninth (99th) month falling immediately after Commencement Date) |
130,625
|
8,312,500
|
|
100
|
101st Payment Date
(the date falling on the 10th day of the one hundredth
(100th) month
falling immediately after Commencement Date) |
130,625
|
8,181,875
|
101
|
102nd Payment Date
(the date falling on the 10th day of the one hundred and first (101st) month falling immediately after Commencement Date) |
130,625
|
8,051,250
|
|
102
|
103rd Payment Date
(the date falling on the 10th day of the one hundred and second (102nd) month falling immediately after Commencement Date) |
130,625
|
7,920,625
|
|
103
|
104th Payment Date
(the date falling on the 10th day of the one hundred and third (103rd) month falling immediately after Commencement Date) |
130,625
|
7,790,000
|
|
104
|
105th Payment Date
(the date falling on the 10th day of the one hundred and fourth (104th) month falling immediately after Commencement Date) |
130,625
|
7,659,375
|
|
105
|
106th Payment Date
(the date falling on the 10th day of the one hundred and fifth (105th) month falling immediately after Commencement Date) |
130,625
|
7,528,750
|
|
106
|
107th Payment Date
(the date falling on the 10th day of the one hundred and sixth (106th) month falling immediately after Commencement Date) |
130,625
|
7,398,125
|
107
|
108th Payment Date
(the date falling on the 10th day of the one hundred and seventh (107th) month falling immediately after Commencement Date) |
130,625
|
7,267,500
|
|
108
|
109th Payment Date
(the date falling on the 10th day of the one hundred and eighth (108th) month falling immediately after Commencement Date) |
130,625
|
7,136,875
|
|
109
|
110th Payment Date
(the date falling on the 10th day of the one hundred and ninth (109th) month falling immediately after Commencement Date) |
130,625
|
7,006,250
|
|
110
|
111th Payment Date
(the date falling on the 10th day of the one hundred and tenth (110th) month falling immediately after Commencement Date) |
130,625
|
6,875,625
|
|
111
|
112nd Payment Date
(the date falling on the 10th day of the one hundred and eleventh (110th) month falling immediately after Commencement Date) |
130,625
|
6,745,000
|
118
|
119th Payment Date
(the date falling on the 10th day of the one hundred and eighteenth (118th) month falling immediately after Commencement Date) |
130,625
|
5,830,625
|
|
119
|
120th Payment Date
(the date falling on the 10th day of the one hundred nineteenth (119th) month falling immediately after Commencement Date) |
Balloon
Payment:
5,700,000
|
130,625
|
0
|
Collateral Owners
|
Collateral Charterers
|
Collateral Vessels
|
Name: Oriental Fleet TANKER 11 Limited (东方富利 TANKER11 有限公司)
Place of Incorporation:
Republic of the Marshall Islands
Registration No.: 101325 ("Collateral Owner A")
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Name: Monte Carlo Seven Shipping Company Limited
Place of Incorporation:
Republic of the Marshall Islands
Registration No.: 60933 ("Collateral Charterer A")
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One (1) d/w 50,000 product oil/chemical tanker named "Stenaweco Excellence" registered in the name of Collateral Owner A under the laws and flag of
the Republic of Liberia with Official Number 16739
("Collateral Vessel A")
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Name: Oriental Fleet TANKER 13 Limited (东方富利 TANKER13 有限公司)
Place of Incorporation:
Republic of the Marshall Islands
Registration No.: 101327 ("Collateral Owner B")
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Name: Monte Carlo One Shipping Company Limited
Place of Incorporation:
Republic of the Marshall Islands
Registration No.: 55324 ("Collateral Charterer B")
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One (1) d/w 50,000 product oil/chemical tanker named "Stenaweco Evolution" presently registered in the name of Eco Evolution LLC under the laws and
flag of the Republic of the Marshall Islands with Official Number 5271, which on delivery to Collateral Owner B will be registered under the laws and flag of the Republic of the Marshall Islands with Official Number 5271
("Collateral Vessel B")
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Clause
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Page No.
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1.
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Definitions and interpretation
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1
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2.
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Guarantee and Indemnity
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3
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3.
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Preservation of Rights
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3
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4.
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Representations and Warranties
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5
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5.
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Covenants
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6
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6.
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Continuing Guarantee
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6
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7.
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Payments
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6
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8.
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Subordination
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7
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9.
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Currency Conversion and Currency Indemnity
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7
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10.
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Suspense Account
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8
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11.
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Set-off
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8
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12.
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Guarantor to comply with Charter
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8
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13.
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Miscellaneous
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8
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14.
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Assignments and Transfers
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9
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15.
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Notices
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9
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16.
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Governing Law and Jurisdiction
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11
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Schedule 1 : Representations and Warranties
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13
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Schedule 2 : Covenants
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18
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Schedule 3 : Form of Compliance Certificate
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26
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Guarantee – Execution Page (1/2)
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28
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(1) |
TOP SHIPS INC., a corporation incorporated in the Republic of the Marshall Islands with limited liability and registration no. 3571, as guarantor
(the Guarantor); and
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(2) |
ORIENTAL FLEET TANKER 12 LIMITED (东方富利 TANKER12
有限公 司), a corporation incorporated in the Republic of the Marshall Islands with limited liability and registration no.
101326, as owner (the Owner).
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(A) |
The Owner and the Charterer (as defined below) are parties to a bareboat charter party dated on or about the date hereof (as amended and/or supplemented from time to time, the Charter), pursuant to which the Owner has agreed to charter the Vessel (as defined below) to the Charterer subject to the terms and conditions specified therein.
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(B) |
As a condition precedent to the obligations of the Owner under the Charter, the Guarantor is required to execute this Guarantee.
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1. |
Definitions and interpretation
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1.1 |
Unless the context otherwise requires, words or expressions defined in the Charter (whether specifically or by reference) shall have the same meanings in this Guarantee and this
construction shall survive the termination of the Charter. Where a word or phrase is defined in the Charter and this Guarantee, the definition in this Guarantee shall prevail.
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1.2 |
In this Guarantee, the following words and expressions shall, except where the context otherwise requires, have the following respective meanings:
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(a) |
all costs, charges and expenses incurred by the Owner in connection with the protection, preservation or enforcement of its rights under any of the Transaction Documents; and
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(b) |
all indebtedness, moneys, obligations and liabilities due, owing or incurred in respect of any variations of the Transaction Documents or the obligations and liabilities imposed under such
documents.
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(a) |
execution of all notices, acknowledgments and consents as required under those Transaction Documents; and
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(b) |
any other Authorisations of those Transaction Documents as may be required or recommended in any Legal Opinion.
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1.3 |
Unless otherwise specified and except where the context otherwise requires, any reference in this Guarantee to:
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(a) |
the singular includes the plural and vice versa;
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(b) |
any person shall be construed so as to include its successors and permitted assigns and permitted transferees in accordance with their respective interests;
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(c) |
any document (including the Charter, this Guarantee, and each other Transaction Document) shall be construed as a reference to such document as amended, restated, supplemented, varied or
novated from time to time in accordance with its terms (to the extent that such document is at the relevant time in effect);
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(d) |
any provision of law shall be construed as a reference to that provision as amended, supplemented, varied, re-enacted, replaced or restated from time to time;
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(e) |
any applicable law includes, without limitation, (i) applicable laws, acts, codes, conventions, decrees, decree-laws, legislation, statutes,
treaties and similar instruments, (ii) applicable final judgments, orders, determinations or awards of any court from which there is no right of appeal (or, if there is a right of appeal, such appeal is not prosecuted within the allowable
time) and (iii) applicable directives, guidance, guidelines, notices, orders, regulations and rules of any governmental, judicial or regulatory authority (whether or not having the force of law but with which, if not having the force of
law, compliance is customary);
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(f) |
a Clause shall be construed as a reference to a clause of this Guarantee;
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(g) |
continuing shall, in relation to a Termination Event, be construed as a reference to a Termination Event which persists and has not been waived or
remedied in accordance with the terms of the Charter;
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(h) |
a person shall be construed as a reference to any association, company, corporation, firm, governmental, judicial or regulatory authority,
individual, joint venture, partnership (including any limited partnership and any limited liability partnership) or trust (in each case whether or not having separate legal personality);
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(i) |
a successor shall be construed so as to mean a successor in title of a person and any person who under the applicable laws of its jurisdiction of
incorporation or domicile has assumed the rights and obligations of such person or to which, under such laws or by agreement or otherwise, such rights and obligations have been transferred; and
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(j) |
the winding-up, dissolution, administration or re-organisation of a person shall be construed so as to include any equivalent or analogous proceedings under the applicable law of the jurisdiction in which such person is incorporated or formed or
any jurisdiction in which such person carries on business including the seeking of liquidation, winding-up, reorganisation, dissolution, administration, arrangement, adjustment, protection or relief of debtors.
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1.4 |
Clause headings shall be ignored in the interpretation of this Guarantee.
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2. |
Guarantee and Indemnity
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2.1 |
In consideration of the Owner entering into the Charter, the Guarantor irrevocably and unconditionally guarantees to the Owner the due payment and prompt performance by the Charterer and
the other Security Parties of the Guaranteed Obligations when due in accordance with the Charter and the other Transaction Documents.
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2.2 |
The Guarantor further irrevocably and unconditionally undertakes to pay to the Owner, on the Owner's demand, any such amount which is not paid by the Charterer or the other Security
Parties when due and payable under the Charter, the Collateral Charters and the other Transaction Documents.
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2.3 |
The Guarantor as principal obligor and as a separate and independent obligation and liability from its obligations and liabilities under Clauses 2.1 and 2.2 agrees to indemnify and keep
indemnified the Owner, in full and on demand, from and against all and any losses, costs, claims, liabilities, damages, demands and expenses suffered or incurred by the Owner arising out of, or in connection with, any failure of the
Charterer or any other Security Party to perform or discharge any of the Guaranteed Obligations.
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2.4 |
The Owner may serve more than one demand under this Clause 2.
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3. |
Preservation of Rights
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3.1 |
The obligations of the Guarantor contained in this Guarantee shall be in addition to and independent of every other security which the Owner may at any time hold in
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3.2 |
The Guarantor shall be liable under this Guarantee as a principal and independent debtor and accordingly it shall not have, as regards this Guarantee, any of the rights or defences of a
surety. Neither the obligations of the Guarantor contained in this Guarantee nor the rights, powers and remedies conferred upon the Owner by this Guarantee or by law shall be discharged, impaired or otherwise affected by:
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(a) |
the winding-up, dissolution, administration or reorganisation of the Charterer or any other Security Party or any other person or any change in its status, function, control or ownership;
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(b) |
any of the obligations of the Charterer or any other Security Party or any other person under any Transaction Document being or becoming illegal, invalid, void, voidable, unenforceable,
ineffective or of limited force and effect in any respect;
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(c) |
any time or other indulgence being granted or agreed to be granted to either the Charterer or any other Security Party or any other person in respect of any of its obligations under any
Transaction Document;
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(d) |
any amendment to, or any variation, waiver or release of, the Charter or the other Transaction Documents or any obligation of either the Charterer or any other Security Party or any other
person under any Transaction Document;
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(e) |
any failure to take, or fully to take, any security contemplated by any Transaction Document or otherwise agreed to be taken in respect of any Security Party's obligations under any
Transaction Document;
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(f) |
any failure to realise or fully to realise the value of, or any release, discharge, exchange or substitution of, any security taken in respect of any of either the Charterer's or any other
Security Party's obligations under any Transaction Document;
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(g) |
any purported obligation of either the Charterer or any other Security Party or any other person to the Owner (or any security for that obligation) becoming wholly or in part void,
invalid, illegal or unenforceable for any reason, including negligence; and
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(h) |
any other act, event or omission which, but for this Clause 3.2, might operate to discharge, impair or otherwise affect any of the obligations of the Guarantor contained in this Guarantee
or any of the rights, powers or remedies conferred upon the Owner by this Guarantee, the Charter or any other Transaction Document or by law.
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3.3 |
Any settlement, discharge or release between the Guarantor and the Owner in relation to this Guarantee shall be conditional upon no right, security, disposition or payment to or in favour
of the Owner by any Security Party or any other person being avoided, set aside, reduced or ordered to be refunded as a result of the operation of any applicable law and if any such right, security, disposition or payment is so avoided,
set aside, reduced or ordered to be refunded, the liability of the Guarantor shall continue and the Owner shall be entitled to recover under this Guarantee the value or
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3.4 |
The Owner shall not be obliged before exercising any of the rights, powers or remedies conferred upon it by this Guarantee or by law:
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(a) |
to take any action or obtain judgment in any court against the Charterer or any other Security Party;
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(b) |
to make or file any claim or proof in a winding-up or dissolution of either of the Charterer or any other Security Party; or
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(c) |
to enforce or seek to enforce any security taken in respect of the Charterer's or any other Security Party's obligations under the Charter or any other Transaction Document.
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3.5 |
The Guarantor agrees that, for so long as the Charterer or any other Security Party is under any actual or contingent obligation under the Charter or any other Transaction Document, the
Guarantor shall not exercise any right which the Guarantor may at any time have by reason of this Guarantee or the performance by it of its obligations under this Guarantee:
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(a) |
to be indemnified by the Charterer or any other Security Party or to receive any collateral from the Charterer or any other Security Party in respect of the Guarantor's obligations under
this Guarantee;
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(b) |
to claim any contribution from any other guarantor of the Charterer's or any other Security Party's obligations under the Charter or any other Transaction Document;
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(c) |
to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any of the Owner's rights under the Charter or any Transaction Document or of any other
guarantee or security taken pursuant to, or in connection with, the Charter or any other Transaction Document;
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(d) |
to claim or prove in a liquidation or other insolvency proceeding of the Charterer or any other Security Party or any co-surety in competition with the Owner; and/or
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(e) |
receive, claim or have the benefit of any payment, distribution or security from or on account of the Charterer or any other Security Party, or exercise any right of set-off against the
Charterer or any other Security Party.
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4. |
Representations and Warranties
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5. |
Covenants
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6. |
Continuing Guarantee
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7. |
Payments
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7.1 | All payments to be made by the Guarantor under this Guarantee shall be made in the currency in which the corresponding payment obligation of the Charterer is due and payable under the Charter or each other applicable Transaction Document (as the case may be) and in immediately available, freely transferable, cleared funds to such account of the Owner with such bank as the Owner shall from time to time have specified for this purpose. |
7.2 |
All payments to be made by the Guarantor under this Guarantee shall be made without set-off or counterclaim and without any deduction or withholding whatsoever. If the Guarantor is obliged
by law to make any deduction or withholding from any such payment, the amount due from the Guarantor in respect of such payment shall be increased to the extent necessary to ensure that, after the making of such deduction or withholding,
the Owner receives a net amount equal to the amount that the Owner would have received had no such deduction or withholding been required to be made.
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7.3 |
The Guarantor agrees that:
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(a) |
if any payment received by the Owner in respect of moneys owing or due and payable by the Guarantor is avoided on the subsequent insolvency or liquidation of the Guarantor, under any laws
relating to insolvency or liquidation, that payment does not discharge or diminish the liability of the Guarantor under this Guarantee, which continues to apply as if that payment at all times remained owing; and
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(b) |
if the Guarantor has not paid to the Owner the full amount of all sums due under this Guarantee, the Owner may (for the purpose of enabling the Owner to sue the Guarantor and/or any other
guarantor of the liabilities which are hereby guaranteed or to prove in its or their liquidation or in any similar proceedings for any moneys due and unpaid by the Guarantor to the Owner) at any time place and keep for such time as it may
think fit any moneys received under this Guarantee, or under such other guarantees or from any other person, to the credit of an account or accounts (bearing interest at a commercial rate) without any obligation on the part of the Owner
to apply the same or any part thereof in or towards the discharge of the indebtedness and liabilities of the Guarantor to the Owner.
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7.4 |
All moneys received by the Owner pursuant to this Guarantee after the occurrence of a Termination Event which is continuing shall be held by the Owner in trust and applied by the Owner in
the following order:
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(a) |
firstly, to pay or retain all costs and expenses of whatever nature incurred by the Owner under the Transaction Documents;
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(b) |
secondly, to be applied in and towards payment of the Guaranteed Obligations (whether the same are due and payable or not); and
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(c) |
fifthly, the surplus (if any) shall be paid to the Guarantor or such other person as may for the time being be entitled thereto.
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8. |
Subordination
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(a) |
claim, or in a Bankruptcy of the Charterer or any other Security Party prove for, any amount payable to the Guarantor by the Charterer or any other Security Party, whether in respect of
this Guarantee or any other Transaction Document;
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(b) |
take or enforce any Security Interest for any such amount;
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(c) |
claim to set-off any such amount against any amount payable by the Guarantor to the Charterer or any other Security Party; or
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(d) |
claim any subrogation or other right in respect of any Transaction Document or any sum received or recovered by either the Charterer or any other Security Party under a Transaction
Document.
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9. |
Currency Conversion and Currency Indemnity
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(a) |
The Owner may convert any money received or realised by it under or pursuant to this Guarantee which is not in the currency in which the relevant sum is due and payable under each
applicable Transaction Document from that currency into the currency in which such sum is due at the rate of exchange on the relevant date of the conversion.
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(b) |
If, under any applicable law, whether as a result of judgment against the Guarantor or the liquidation of the Guarantor or for any other reason, any payment to be made by the Guarantor
under or in connection with this Guarantee is made or is recovered in a currency other than the currency (the currency of obligation) in which it is payable pursuant to this Guarantee then, to the
extent that the payment (when converted into the currency of obligation at the rate of exchange on the date for the determination of liabilities permitted by the applicable law) falls short of the amount unpaid under this Guarantee,
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(c) |
For the purposes of this Clause 9, rate of exchange means the best rate at which the Owner is able on the relevant date to purchase the currency
of obligation with the other currency.
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10. |
Suspense Account
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11. |
Set-off
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12. |
Guarantor to comply with Charter
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13. |
Miscellaneous
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13.1 |
This Guarantee may be executed in any number of counterparts and on separate counterparts, each of which when executed shall constitute an original, but all counterparts shall together
constitute one and the same instrument.
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13.2 |
Any amendment, supplement or variation to any Transaction Document to which the Guarantor is a party must be in writing and executed by each party thereto.
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13.3 |
The Guarantor may not terminate this Guarantee by notice to the Owner or otherwise until the Guaranteed Obligations are irrevocably paid to the Owner in full.
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13.4 |
Neither the failure to exercise, nor the delay in any exercise of, nor the single or partial exercise of, any right, power or remedy by the Owner under or in relation to any Transaction
Document to which the Guarantor is a party shall (a) operate as a waiver of such right, power or remedy, (b) prevent any further or other exercise of such right, power or remedy or (c) prevent the exercise of any other right, power or
remedy. The rights, powers and remedies of the Owner provided in any Transaction
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13.5 |
Any waiver or consent given by a party under or in relation to any Transaction Document to which the Guarantor is a party must, in order to be effective, be in writing and shall only be
effective in the specific circumstances in which it is given.
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13.6 |
If at any time any provision of any Transaction Document to which the Guarantor is a party is or becomes illegal, invalid or unenforceable in any respect under the law of any jurisdiction,
neither the legality, validity or enforceability of the remaining provisions of that Transaction Document nor the legality, validity or enforceability of such provision under the law of any other jurisdiction shall in any way be affected
or impaired.
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13.7 |
Any certificate or determination by the Owner as to any rate of interest or as to any other amount payable under and pursuant to any Transaction Document to which the Guarantor is a party
shall, in the absence of manifest error, be conclusive and binding on Guarantor.
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13.8 |
A person who is not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or enjoy the benefit of any term of this Guarantee.
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13.9 |
The Guarantor shall pay to the Owner on demand all fees, costs and expenses (including legal, survey and other costs) payable or incurred by the Owner in connection with the enforcement of
or preservation of the Owner's rights under each Transaction Document to which the Guarantor is a party. All amounts payable pursuant to this Clause 13 shall be paid in the currency in which they are incurred to the Owner.
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14. |
Assignments and Transfers
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14.1 |
This Guarantee shall be binding upon and inure to the benefit of each Party and its respective successors, permitted assigns and permitted transferees.
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14.2 |
The Guarantor shall not assign, transfer (whether voluntarily or involuntarily, by operation of law or otherwise) or create or permit to exist any Security Interest over, any of its rights
or obligations under this Guarantee.
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15. |
Notices
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15.1 |
Communications in writing
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15.2 |
Addresses
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(a) |
In the case of the Guarantor:
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Address: |
1, Vas. Sofias & Meg.
Alexandrou Str. 15124, Maroussi, Athens, Greece |
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Attention: |
Andreas Louka
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Email: |
louka@loukapartners.com
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Fax: |
+30 2108128320
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(b) |
In the case of the Owner:
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Address: |
c/o Oriental Fleet International Company Limited
50/F, COSCO Tower 183 Queen's Road Central Hong Kong |
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Attention: |
Belinda Hou / Thomas Xing / Xu Ying
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Email: |
lou.can@coscoshipping.com / thomas.xing@ofi.com.hk / asset@coscoshipping.com
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Fax: |
+852 2339 1881
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15.3 |
Delivery
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15.3.1 |
Any communication or document made or delivered by a Party to the other Party under or in connection with the Transaction Documents to which the Guarantor is a party will only be
effective:
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(a) |
if by way of fax, when received in legible form;
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(b) |
if by way of letter, when it has been left at the relevant address to which it has been posted with postage prepaid in an envelope addressed to the relevant party at that address, and, if
a particular department or officer is specified as part of its address details provided under Clause 15.2 (Addresses), if addressed to that department or officer; or
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(c) |
if by way of email, only when received in a legible form by the email address of the person to whom the communication is made.
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15.3.2 |
All communications and documents delivered pursuant to or otherwise relating to the Transaction Documents to which the Guarantor is a party shall be either in English or Chinese or
accompanied by a certified English or Chinese translation.
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15.4 |
Validity of demands
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(a) |
on the date on which the amount to which it relates is due and payable by the Charterer or any other Security Party under an applicable Transaction Document (as the case may be); or
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(b) |
at the same time as the service of a notice under the applicable Transaction Document;
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16. |
Governing Law and Jurisdiction
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16.1 |
This Guarantee and any non-contractual obligations arising out of or in connection with it are governed by and shall be construed in accordance with English law and any Dispute arising out
of or in connection with this Guarantee shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory re-enactment or modification thereof save to the extent necessary to give effect to the
provisions of this Clause.
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16.2 |
The arbitration reference shall be to three arbitrators:
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(a) |
A Party wishing to refer a Dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other Party requiring the other Party to appoint its
own arbitrator within fourteen (14) calendar days of that notice, and stating it will appoint its arbitrator as sole arbitrator unless the other Party appoints its own arbitrator and gives notice that it has done so within the fourteen
(14) days specified.
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(b) |
If the other Party does not appoint its own arbitrator and gives notice that it has done so within the fourteen (14) days specified, the Party referring a Dispute to arbitration may,
without the requirement of any further prior notice to the other Party, appoint its arbitrator as sole arbitrator and shall advise the other Party accordingly. The award of a sole arbitrator shall be binding on both Parties as if he/she
had been appointed by agreement.
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(c) |
Where each Party appoints its own arbitrator, then the two (2) arbitrators so appointed may proceed with the arbitration and at any time thereafter appoint a third arbitrator so long as
they do so before any substantive hearing or forthwith in the event that they cannot agree on any matter relating to the arbitration. If the said two arbitrators do not appoint a third within fourteen (14) days of one calling upon the
other to do so, or if they are in disagreement as to the third arbitrator, either arbitrator or a Party shall apply to the London Maritime Arbitrators Association (LMAA) for the appointment of the third arbitrator.
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(d) |
The language used in the arbitration shall be English. The arbitration shall be conducted in accordance with the LMAA Terms current at the time when the arbitration proceedings are
commenced.
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(e) |
Nothing herein shall prevent the Parties agreeing in writing to vary these provisions to provide for the appointment of a sole arbitrator.
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16.3 |
In this Clause 16, proceedings means proceedings of any kind, including an application for a provisional or protective measure and a Dispute means any dispute arising out of or in connection with this Guarantee (including a dispute relating to the
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16.4 |
The Guarantor waives any rights of sovereign immunity which it or any of its properties may enjoy in any jurisdiction and subjects itself to civil and commercial law with respect to its
obligations under this Guarantee.
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1. |
Status
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(a) |
It is a company duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation.
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(b) |
It has the power to own its assets and carry on its business as it is being conducted.
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(c) |
It has read and understood the terms of this Guarantee, the Charter and the other Transaction Documents to which the Charterer or any other Security Party is a party and has taken
appropriate legal advice as to the extent of its obligations and liabilities under the Transaction Documents to which the Guarantor is a party.
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(d) |
The Charterer is a wholly-owned Subsidiary of the Guarantor, which is ultimately controlled by the Substantial Shareholder.
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(e) |
It is a publicly listed entity on the NASDAQ stock exchange under the symbol "TOPS".
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2. |
Compliance with anti-money laundering legislation
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3. |
Binding obligations
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(a) |
The obligations expressed to be assumed by it in the Transaction Documents to which it is a party are, subject to the Legal Reservations, legal, valid, binding and enforceable obligations.
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(b) |
Without limiting the generality of paragraph (a) above, subject to the Security Perfection Requirements, each Security Document to which it is a party creates the Security Interests which
it purports to create and such Security Interests are valid and effective.
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4. |
Non-conflict with other obligations
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(a) |
any law or regulation applicable to it;
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(b) |
its constitutional documents; or
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(c) |
any agreement or instrument binding upon it or any of its assets,
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5. |
Power and authority
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6. |
Validity and admissibility in evidence
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(a) |
to enable it lawfully to enter into, exercise its rights and comply with its obligations in the Transaction Documents to which it is a party;
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(b) |
to make the Transaction Documents to which it is a party admissible in evidence in its Relevant Jurisdictions;
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(c) |
for it to carry on its business, and which are material; and
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(d) |
to enable it to create the Security Interest to be created by it under any Security Document to which it is a party and to ensure that such Security Interest has the priority and ranking
it is expressed to have,
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7. |
Governing law and enforcement
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(a) |
the choice of each relevant law as the governing law of the Transaction Documents to which it is a party to and the agreement by such party to refer disputes to the relevant courts or
tribunal as stated in such Transaction Document will be recognised and enforced in its Relevant Jurisdictions; and
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(b) |
any arbitral award, ruling or judgment obtained in each Relevant Jurisdiction in relation to the Transaction Documents to which it is a party will be recognised and enforced in its
Relevant Jurisdictions.
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8. |
Deduction of Tax
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9. |
Financial statements
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(a) |
Its financial statements most recently supplied to the Owner (which, at the date of this Guarantee, are its Original Financial Statements) were prepared in accordance with GAAP
consistently applied save to the extent expressly disclosed in such financial statements.
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(b) |
Its financial statements most recently supplied to the Owner (which, at the date of this Guarantee, are its Original Financial Statements) give a true and fair view of (if audited) or
fairly represent (if unaudited) its consolidated financial condition and operations for the period to which they relate, save to the extent expressly disclosed in such financial statements.
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|
(c) |
There has been no material adverse change in its business or consolidated financial condition since the date of its Original Financial Statements.
|
10. |
No filing or stamp taxes
|
11. |
No default
|
|
(a) |
No Termination Event has occurred and is continuing or might reasonably be expected to result from the entry into or performance of, or the transactions contemplated by, any Transaction
Document to which it is a party.
|
|
(b) |
No other event or circumstance has occurred and is continuing which (with the expiry of a grace period, the giving of notice or any combination of the foregoing) constitutes a default
under any deed or instrument which is binding on the Guarantor, or to which its assets are subject, which might have a Material Adverse Effect on the Guarantor's ability to perform its obligations under any Transaction Document to which
it is a party.
|
12. |
No breach of laws
|
13. |
No misleading information
|
|
(a) |
All information provided by it or on its behalf in relation to the negotiation and preparation of any Transaction Document to which it is a party was true, complete and accurate in all
material respects as at the date it was provided or as at the date (if any) at which it is stated and was not misleading in any respect.
|
|
(b) |
All financial projections provided by it or on its behalf have been prepared on the basis of recent historical information and on the basis of reasonable assumptions.
|
|
(c) |
Nothing has occurred or been omitted from the information so provided and no information has been given or withheld that results in the information provided by it or on its behalf being
untrue or misleading in any material respect.
|
14. |
Pari passu ranking
|
15. |
No proceedings
|
|
(a) |
No litigation, arbitration or administrative proceedings of or before any court, arbitral body or agency (which, if adversely determined, would have a Material Adverse Effect on the
Guarantor) have been started or (to the best of its knowledge and belief) threatened against it.
|
|
(b) |
No judgment or order of a court, arbitral body or agency which might reasonably be expected to have a Material Adverse Effect has been made against it.
|
16. |
No immunity
|
17. |
Taxation
|
|
(a) |
It has complied in all material respects with all tax laws and regulations applicable to it and its business.
|
|
(b) |
It is not materially overdue in the filing of any tax returns and is not overdue in the payment of any amount in respect of tax.
|
|
(c) |
No claims or investigations are being made or conducted against it with respect to taxes.
|
|
(d) |
It is resident for tax purposes only in its jurisdiction of incorporation except (i) the taxes that are being contested in good faith by appropriate proceedings and for which the Guarantor
has set aside on its books adequate reserves and (ii) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect.
|
18. |
Disclosure of material facts
|
19. |
Place of Business and Non-Hong Kong company
|
20. |
Transaction Documents
|
21. |
Sanctions
|
|
(a) |
No Security Party is a Restricted Person.
|
|
(b) |
Each Security Party is in compliance with all Sanctions laws, and none of them have been or are currently being investigated on compliance with Sanctions, they have not received notice or
are aware of any claim, action, suit or proceeding against any of them with respect to Sanctions and they have not taken any action to evade the application of Sanctions.
|
22. |
Authorised signatories
|
1. |
Status
|
|
(a) |
It will maintain its existence as a company duly incorporated and validly existing under the laws of its jurisdiction of incorporation.
|
|
(b) |
It will remain a publicly listed entity on the NASDAQ stock exchange under the symbol "TOPS".
|
2. |
Authorisations and Compliance with applicable law
|
|
(a) |
It shall promptly:
|
|
(i) |
obtain, comply with and do all that is necessary to maintain in full force and effect; and
|
|
(ii) |
supply copies to the Owner of,
|
|
(b) |
It shall comply in all respects with all laws to which it may be subject.
|
|
(c) |
It shall ensure that all the Security Perfection Requirements have been or will be done or obtained (as the case may be) no later than the latest date permitted by applicable law and in
any event by such date as the Owner may specify.
|
3. |
Compliance with obligations
|
4. |
No prejudice to interests
|
5. |
Exercise of rights
|
6. |
Further assurance
|
7. |
Pari passu ranking
|
8. |
Negative pledge
|
|
(a) |
sell, transfer or otherwise dispose of its right, title and interest in and to any collateral which is the subject of security created under any Transaction Document;
|
|
(b) |
create, incur, assume or permit or cause to exist any Security Interest over its right, title and interest in and to any collateral which is the subject of security created under any
Transaction Document; or
|
|
(c) |
consent to the taking of any such action described in the preceding two paragraphs by any other person (whether pursuant to the terms of the Transaction Documents or otherwise),
|
9. |
Security Parties
|
|
(a) |
the Charterer and each of the Security Parties maintains its existence as a company duly incorporated and validly existing and, where applicable, in good standing under the laws of its
jurisdiction of incorporation in compliance with all applicable law; and
|
|
(b) |
the Charterer and each of the Security Parties is managed and administered in the manner that is required by the Transaction Documents.
|
10. |
Subordination
|
|
(a) |
Pursuant to paragraph (z)(iii) of Clause 47.1 (General Covenants) of the Charter, the Guarantor acknowledges to and undertakes with the Owner that,
at all times throughout the Charter Period, all shareholder's and intercompany
|
|
(i) |
are and shall be subordinated in all respects to all amounts owing and which may in future become owing by the Charterer under the Charter and the other Transaction Documents;
|
|
(ii) |
shall not be repaid or be subject to any payment of interest (although interest may accrue);
|
|
(iii) |
are and shall remain unsecured by any Security Interest over the whole or any part of the assets of the Charterer; and
|
|
(iv) |
are not and shall not be capable of becoming subject to any right of set-off or counterclaim.
|
|
(b) |
Pursuant to paragraph (aa)(iv) of Clause 47.1 (General Covenants) of the Charter, the Guarantor acknowledges to and undertakes with the Owner that,
at all times throughout the Charter Period, all shareholder's and intercompany advances from time to time made by the Guarantor or any other member of the Group to the Charterer:
|
|
(i) |
shall be non-interest bearing;
|
|
(ii) |
are and shall remain unsecured by any Security Interest over the whole or any part of the assets of the Charterers;
|
|
(iii) |
are not and shall not be capable of becoming subject to any right of set-off or counterclaim; and
|
|
(iv) |
upon occurrence of a Termination Event which is continuing:
|
|
(A) |
shall not be repaid; and
|
|
(B) |
shall be subordinated in all respects to all amounts owing and which may in future become owing by the Charterers under this Charter and the other Transaction Documents.
|
11. |
Financial Statements
|
|
(a) |
as soon as the same become available, but in any event within 120 days after the end of each of its financial years, its audited consolidated financial statements for that financial year;
and
|
|
(b) |
as soon as the same become available, but in any event within 75 days after the end of each half of each of its financial years, its unaudited consolidated financial statements for that
financial half year.
|
12. |
Compliance Certificate
|
|
(a) |
It shall supply to the Owner, with each set of financial statements delivered pursuant to paragraphs (a) and (b) of Clause 11 (Financial Statements)
of this
|
|
(b) |
Each Compliance Certificate delivered pursuant to paragraph (a) above shall be signed by its director or its chief financial officer.
|
13. |
Requirements as to financial statements
|
|
(a) |
Each set of financial statements delivered by it pursuant to Clause 11 (Financial statements) shall be certified by (its director or its chief
financial officer) as giving a true and fair view of (in the case of any such financial statements which are audited) or fairly representing (in the case of any such financial statements which are unaudited) its consolidated financial
condition and operations as at the date of and for the period in relation to which those financial statements were drawn up.
|
|
(b) |
It shall procure that each set of financial statements delivered pursuant to Clause 11 (Financial Statements) of this Schedule is in the English
language and prepared using GAAP, the accounting practices and financial reference periods consistent with those applied in the preparation of its Original Financial Statements unless, in relation to any set of financial statements, it
notifies the Owner that there has been a change in GAAP, the accounting practices or financial reference periods and its auditors deliver to the Owner:
|
|
(i) |
a description of any change necessary for those financial statements to reflect the GAAP, the accounting practices and financial reference periods upon which its Original Financial
Statements were prepared; and
|
|
(ii) |
sufficient information, in form and substance as may be reasonably required by the Owner, to enable the Owner to determine whether Clause 14 (Financial
Covenants) of this Schedule has been complied with and make an accurate comparison between the financial position indicated in those financial statements and its Original Financial Statements.
|
14. |
Financial Covenants
|
|
(a) |
The Guarantor undertakes that it shall ensure at all times:
|
|
(i) |
Leverage Ratio shall not at any time exceed 75%; and
|
|
(ii) |
Free Liquidity shall not be less than the aggregate of the following:
|
|
(A) |
US$1,000,000 times number of Fleet Vessels which are Suezmax vessels;
|
|
(B) |
US$750,000 times number of Fleet Vessels which are MR tankers; and
|
|
(C) |
US$500,000 times number of MR tankers are bareboat chartered-in to a member of the Group.
|
|
(b) |
The financial covenants set out in paragraph (a) shall be tested by reference to the financial statements and Compliance Certificates delivered by the Guarantor pursuant to Clause 11 (Financial Statements), Clause 12 (Compliance Certificate) and Clause 13 (Requirements as to financial statements) of
this Schedule in respect of the Relevant Period.
|
|
(c) |
In this Clause:
|
|
(i) |
Cash means, at any time, the aggregate at such time of the amounts categorised as Cash and Cash Equivalent in the Guarantor's consolidated
financial statements.
|
|
(ii) |
Cash Equivalent Investments means investments that are short term investments (excluding equity investments) which are readily convertible into
cash without incurring any significant premium or penalty.
|
|
(iii) |
Consolidated Total Debt in respect of the Guarantor means at any time the aggregate amount of all obligations of the Group which would, in
accordance with GAAP, be considered as consolidated total debt of the Group.
|
|
(iv) |
Consolidated Total Net Debt in respect of the Guarantor means at any time Consolidated Total Debt less Cash and Cash Equivalent and Restricted
Cash.
|
|
(v) |
Fleet Vessel means, at any time, each vessel registered in the name of a member of the Group as owner.
|
|
(vi) |
Free Liquidity means, at any time, any unrestricted Cash and Cash Equivalent of the Guarantor which is not subject to any security interest
adjusted to include any Cash held under any minimum liquidity requirements and debt service accounts.
|
|
(vii) |
Joint Venture Vessel means any vessel registered in the name of an owner whose shareholding is owned by the Guarantor by 50% or more.
|
|
(viii) |
Leverage Ratio means, the ratio (expressed as a percentage) of:
|
|
(1) |
the Consolidated Total Net Debt; and
|
|
(2) |
the aggregate Market Value of all Fleet Vessels, including 50% of Joint Venture Vessels.
|
|
(ix) |
Market Value means, in relation to a Fleet Vessel and a Joint Venture Vessel, at a relevant date, one (1) valuation obtained by the Charterer (or
failing which the Owner) and prepared:
|
|
(1) |
on a date no earlier than thirty (30) days prior to the relevant date;
|
|
(2) |
by one (1) Approved Valuer;
|
|
(3) |
with or without physical inspection of such Fleet Vessel or Joint Venture Vessel;
|
|
(4) |
on the basis of a sale for prompt delivery for cash on normal arm's length commercial terms as between a willing seller and a willing buyer, free of any existing charter or other contract
of employment; and
|
|
(5) |
if a range of valuation is given by the Approved Valuer, the lower end of the range shall apply,
|
|
(x) |
Relevant Period means each period of six (6) months immediately prior to the date of computation.
|
|
(xi) |
Restricted Cash means, at any time, the aggregate at such time of the amounts categorised as Restricted Cash in the Guarantor's consolidated
financial statements.
|
15. |
Notification
|
|
(a) |
notify the Owner as soon as it becomes aware of the occurrence of:
|
|
(i) |
any Termination Event; and
|
|
(ii) |
any other matters which might lead to an occurrence of any Termination Event; and
|
|
(b) |
notify the Owner of any steps or action which it is taking, or is considering taking, to remedy or mitigate the effect of such occurrence.
|
16. |
Information: miscellaneous
|
|
(a) |
all documents dispatched by it to its shareholders (or any class of them) or its creditors generally at the same time as they are despatched (other than any document which is required to
be filed by the Guarantor in accordance with the rules of, and has been filed and posted onto any electronic website maintained by, any stock exchange on which shares in or other securities of the Guarantor are listed);
|
|
(b) |
promptly, any announcement, notice or other document relating specifically to the Guarantor posted onto any electronic website maintained by any stock exchange on which shares in or other
securities of the Guarantor are listed or any electronic website required by any such stock exchange to be maintained by or on behalf of the Guarantor;
|
|
(c) |
promptly upon becoming aware of them, details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against it, and which might, if
adversely determined, have a Material Adverse Effect;
|
|
(d) |
promptly upon becoming aware of them, details of any judgment or order of a court, arbitral body or agency which is made against it, and which might have a Material Adverse Effect;
|
|
(e) |
promptly, such information regarding its consolidated financial condition, business and operations as the Owner may reasonably request;
|
|
(f) |
promptly, notice of any change in its authorised signatories signed by its director accompanied by specimen signatures of any new authorised signatories; and
|
|
(g) |
promptly, such information and records regarding the Shares as the Chargee may reasonably request.
|
17. |
Taxes
|
|
(a) |
file or cause to be filed all tax returns required to be filed in all jurisdictions in which it is situated or carries on business or otherwise is subject to taxation; and
|
|
(b) |
pay all taxes shown to be due and payable on such returns or any assessments made against it, except to the extent these are contested in good faith and by appropriate means where such
payment may be lawfully withheld and for which adequate reserves have been established by it taking into account the amount of taxes payable.
|
18. |
No merger
|
19. |
Change of Control
|
|
(a) |
Save with the prior written consent of the Owner, it shall ensure that no Change of Control occurs.
|
|
(b) |
Save with the prior written consent of the Owner, there shall not be any transfer or disposal of:
|
|
(i) |
the legal or beneficial shareholding of the Charterer; or
|
|
(ii) |
the legal or beneficial shareholding of the Guarantor,
|
20. |
Sanctions
|
|
(a) |
It shall comply, and shall procure that each other Security Party complies, with all laws and regulations in respect of Sanctions, and in particular, it shall ensure that the Charterer
shall effect and maintain a sanctions compliance policy to ensure compliance with all such laws and regulations implemented from time to time.
|
|
(b) |
It will ensure that the Vessel shall not be employed, operated or managed in any manner which (i) is contrary to any Sanctions and in particular, the Vessel shall not be used by or for the
benefit for any party which is a target of Sanctions, or trade to any Restricted Country; or (ii) would trigger the operation of any sanctions limitation or exclusion clause in any insurance documentation.
|
|
(c) |
It will, and will procure that each other Security Party will, promptly notify the Owner and provide all information in relation to its business and operations which may be relevant for
the purposes of ascertaining whether it is in compliance with all laws and regulations relating to Sanctions, and in particular, it shall notify the Owner in writing immediately upon being aware that any of its shareholders or directors,
officers of employees is a Restricted Person or has otherwise become a target of Sanctions.
|
From: |
TOP SHIPS INC.
a corporation incorporated in the Republic of the Marshall Islands with limited liability and registration no. 3571 (as Guarantor) |
With copy to: |
Monte Carlo 71 Shipping Company Limited
a corporation incorporated in the Republic of the Marshall Islands with limited liability and registration no. 69834 (as Charterer) |
To: |
Oriental Fleet TANKER 12 Limited
(东方富利 TANKER12 有限公司) a corporation incorporated in the Republic of the Marshall Islands with limited liability and registration no. 101326 (as Owner) |
1. |
We refer to the Charter and the Guarantee (as defined in the Charter). This is a Compliance Certificate. Terms defined in the Charter and the Guarantee have the same meaning when used in
this Compliance Certificate unless given a different meaning in this Compliance Certificate.
|
2. |
We confirm to the Owner that as at the date of [the audited consolidated financial statements of the Group in respect of the financial year ended on [?] / the consolidated financial statements of the Group in respect of the financial period ended on [?]]:
|
|
(a) |
we are in compliance with the covenants and undertakings in Clause 14 (Financial Covenants) of Schedule 2 to of the Guarantee;
|
|
(b) |
Consolidated Total Net Debt is [?] and Market Value of the Fleet Vessels including 50% of Joint Venture Vessels is [●] and therefore Leverage Ratio is [●] and does not exceed 75%;
|
|
(c) |
Free Liquidity is US$[●], which is not less than US$[●],
being the aggregate of the following:
|
|
(i) |
US$[●], which is calculated by US$1,000,000 times the number of Fleet Vessels which are Suezmax vessels, being [●];
|
|
(ii) |
US$[●], which is calculated by US$750,000 times the number of Fleet Vessels which are MR tankers, being [●]; and
|
|
(iii) |
US$[●], which is calculated by US$500,000 times the number of MR tankers are bareboat chartered-in to a member of the
Group, being [●].
|
3. |
We set out below calculations establishing the figures in paragraph 2:
[●].
|
4. |
We also confirm that no Termination Event is continuing which has not been waived as at the date of this Compliance Certificate.
|
Name:
|
|
Title: [Director/Chief Financial Officer]
|
SIGNED as a deed by
TOP SHIPS INC.
under a power of attorney
dated 4 July 2019
in the presence of:
|
, Attorney for
|
)
) ) ) ) ) |
SIGNED for and on behalf of
|
)
|
)
|
|
ORIENTAL FLEET TANKER 12 LIMITED
|
)
|
(东方富利 TANKER12 有限公司)
|
)
|
)
|
|
by , Director
|
)
|
)
|
)
|
in the presence of:
|
)
|
32.
|
Definitions
|
1
|
33.
|
Charter Period
|
2121
|
34.
|
Cancellation
|
2122
|
35.
|
Conditions Precedent and Conditions Subsequent
|
2222
|
36.
|
Delivery
|
2323
|
37.
|
Charterhire
|
2425
|
38.
|
Possession of Vessel
|
2929
|
39.
|
Insurance
|
2930
|
40.
|
Termination and Redelivery; War; Total Loss
|
3637
|
41.
|
Fees and Expenses; Indemnities;
|
4242
|
42.
|
No Waiver of Rights
|
4445
|
43.
|
Mortgage and assignment
|
4445
|
44.
|
Notices
|
4546
|
45.
|
Termination Events
|
4647
|
46.
|
Representations and Warranties
|
5050
|
47.
|
Charterers' undertakings
|
5354
|
48.
|
Purchase Option
|
5960
|
49.
|
Purchase Obligation
|
6161
|
50.
|
Sale of the Vessel by Purchase Option and Purchase Obligation
|
6161
|
51.
|
No Set-off or Tax deduction; FATCA Provisions
|
6363
|
52.
|
Increased Costs
|
6565
|
53.
|
Governing Law and Jurisdiction
|
6667
|
54.
|
Miscellaneous
|
6768
|
Execution page
|
6869
|
|
Schedule 1 : Certificate of Delivery and Acceptance
|
7071
|
|
Schedule 2 : Charterhire Schedule
|
7172
|
|
Schedule 3 : Collateral Owners, Collateral Charterers and Collateral Vessels
|
91
|
32. |
DEFINITIONS
|
32.1 |
In this Charter the following terms shall have the meanings ascribed to them below:
|
|
(a) |
an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation, lodgement or registration; or
|
|
(b) |
in relation to anything which will be fully or partly prohibited or restricted by law if a Governmental Agency intervenes or acts in any way within a specified period after lodgement,
filing, registration or notification, the expiry of that period without intervention or action.
|
|
(a) |
in relation to the definition of Quotation Day and to any day on which LIBOR is to be determined, on which banks and the relevant financial markets are open for general business in London;
|
|
(b) |
in relation to any date for payment of amounts under the Transaction Documents, on which banks and the relevant financial markets are open for general business in Hong Kong, London,
Shanghai, Piraeus and the principal financial centre of the country of the currency of payment; and
|
|
(c) |
in relation to any other matter, on which banks are open for general business in Hong Kong, Shanghai and Piraeus.
|
|
(a) |
the Guarantor ceases to control the Charterers; or
|
|
(b) |
the Substantial Shareholder ceases to control the Guarantor or the Charterers,
|
|
(a) |
in respect of the Commencement Date, the Upfront Charterhire;
|
|
(b) |
in respect of a Payment Date, the aggregate of the amount of (i) the Fixed Charterhire and (ii) the Variable Charterhire, payable under this Charter on that Payment Date; and
|
|
(c) |
in respect of the last Payment Date, the aggregate of the amount of (i) the Balloon Payment, (ii) the Fixed Charterhire and (iii) the Variable Charterhire, payable under this Charter on
that Payment Date.
|
|
(a) |
all freight, hire and passage moneys, compensation payable in the event of requisition of the Vessel 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 the Vessel;
|
|
(b) |
if and whenever the Vessel is employed on terms whereby any moneys falling within paragraph (a) are pooled or shared with any other person, that proportion of the net receipts of the
relevant pooling or sharing arrangement which is attributable to the Vessel; and
|
|
(c) |
all other payments or proceeds of any kind whatsoever relating to the Vessel as would be deemed "earnings" under GAAP or other applicable
accounting principles.
|
Beneficiary Bank:
|
Alpha Bank AE
|
Shipping Finance Division
|
|
93, Akti Miaouli
|
|
185-38 Piraeus Greece
|
|
Swift Code:
|
CRBAGRAAXXX
|
Beneficiary Name:
|
Monte Carlo One Shipping Company Limited
|
Account Number:
|
960 01 5006 021256
|
IBAN:
|
GR21 0140 9600 9600 1500 6021 256
|
|
(a) |
any claim which relates to the Vessel or its passengers or cargo from time to time by any governmental, judicial or regulatory authority which arises out of an Environmental Incident or
which relates to any Environmental Law; or
|
|
(b) |
any claim by any other person in relation to the Vessel or its passengers or cargo from time to time which relates to an Environmental Incident or an alleged Environmental Incident,
|
|
(a) |
any release of Environmentally Sensitive Material from the Vessel;
|
|
(b) |
any incident in which Environmentally Sensitive Material is released from a vessel other than the Vessel and which involves a collision between the Vessel and such other vessel or some
other incident of navigation or operation, in either case, in connection with which the Vessel is actually liable to be arrested, attached, detained or injuncted and/or the Vessel and/or the Owners and/or the Charterers and/or any other
operator or manager of the Vessel is at fault or otherwise liable to any legal or administrative action; or
|
|
(c) |
any other incident involving the Vessel in which Environmentally Sensitive Material is released otherwise than from the Vessel and in connection with which the Vessel is actually arrested
and/or where the Owners and/or the Charterers and/or any other operator or manager of the Vessel is at fault or otherwise liable to any legal or administrative action.
|
|
(a) |
in relation to the Existing Mortgagee:
|
|
(i) |
the Existing Mortgage;
|
|
(ii) |
the manager's undertaking dated 31 March 2015 and made between Central Shipping Monaco SAM in favour of the Existing Mortgagee;
|
|
(iii) |
the manager's undertaking dated 31 March 2015 and made between Central Mare in favour of the Existing Mortgagee; and
|
|
(iv) |
the manager's undertaking dated 31 March 2015 and made between Epsilon Hellas (Overseas) Ltd. in favour of the Existing Mortgagee; and
|
|
(b) |
in relation to the Original Sellers:
|
|
(i) |
the Existing Charter;
|
|
(ii) |
the general assignment dated 31 March 2015 and made between the Charterers (as assignor) and the Original Sellers (as assignee);
|
|
(iii) |
the pledge of share certificate dated 31 March 2015 and made between the Guarantor (as pledgor) and the Original Sellers (as pledgee);
|
|
(iv) |
the charterparty assignment dated 31 March 2015 and made between the Charterers (as charterer) and the Original Sellers (as owner);
|
|
(v) |
the manager's undertaking dated 31 March 2015 and executed by Central Shipping Monaco SAM in favour of the Original Sellers;
|
|
(vi) |
the manager's undertaking dated 31 March 2015 and executed by Central Mare in favour of the Original Sellers; and
|
|
(vii) |
the manager's undertaking dated 31 March 2015 and made between Epsilon Hellas (Overseas) Ltd. in favour of the Original Sellers,
|
|
(a) |
sections 1471 to 1474 of the Code or any associated regulations;
|
|
(b) |
any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the
implementation of any law or regulation referred to in paragraph (a) above; or
|
|
(c) |
any agreement pursuant to the implementation of any treaty, law or regulation referred to in paragraph (a) or (b) above with the US Internal Revenue Service, the US government or any
governmental or taxation authority in any other jurisdiction.
|
|
(a) |
moneys borrowed;
|
|
(b) |
any amount raised by acceptance under any acceptance credit facility or dematerialised equivalent;
|
|
(c) |
any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;
|
|
(d) |
the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with GAAP as at the date of this Agreement, be treated as a balance sheet liability
(other than any liability in respect of a lease or hire purchase contract which would, in accordance with GAAP in force prior to 1 January 2019, have been treated as an operating lease);
|
|
(e) |
receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);
|
|
(f) |
any amount raised under any other transaction (including any forward sale or purchase agreement) of a type not referred to in any other paragraph of this definition having the commercial
effect of a borrowing;
|
|
(g) |
any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative
transaction, only the marked to market value (or, if any actual amount is due as a result of the termination or close-out of that derivative transaction, that amount) shall be taken into account);
|
|
(h) |
any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; and
|
|
(i) |
the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (h) above.
|
|
(a) |
all policies and contracts of insurance, including entries of the Vessel in any protection and indemnity or war risks association, which are effected in respect of the Vessel or otherwise
in relation to it whether before, on or after the date of this Charter; and
|
|
(b) |
all rights, proceeds and other assets relating to, or derived from, any of the foregoing, including any rights to a return of a premium and any rights in respect of any claim whether or
not the relevant policy, contract of insurance or entry has expired on or before the date of this Charter.
|
|
(a) |
any legal opinion delivered pursuant to Clause 5 of Part B and Clause 2 of Part D of Addendum No.1; or
|
|
(b) |
any legal opinion which the Creditor Parties may obtain or arrange with respect to the Charterers or any other Security Parties.
|
|
(a) |
the principle that equitable remedies may be granted or refused at the discretion of a court and the limitation of enforcement by laws relating to insolvency, reorganisation and other laws
generally affecting the rights of creditors;
|
|
(b) |
the time barring of claims under the Limitation Act (1980) and the Foreign Limitation Periods Act 1984, the possibility that an undertaking to assume liability for, or indemnify a person
against, non-payment of any stamp duty may be void or the defences of set-off or counter-claim;
|
|
(c) |
similar principles, rights and defences under the laws of any Relevant Jurisdiction; and
|
|
(a) |
the applicable Screen Rate as of 11:00 a.m. (London time) on the Quotation Day for Dollars and for a period of three (3) months; or
|
|
(b) |
as otherwise determined pursuant to Clause 37.8.
|
|
(a) |
in relation to commercial, technical and crew management of the Vessel, the ship management agreement dated 1 January 2019 and made between the Charterers and Central Shipping; and
|
|
(b) |
in relation to the technical management of the Vessel, the sub-management agreement dated 1 January 2019 and made between Central Shipping and Central Mare,
|
|
(a) |
at or about noon (London time) on the Quotation Day for the relevant Hire Calculation Period the relevant Screen Rate is not available and none or only one of leading banks in the London
interbank market supplies a rate to the Owners to determine LIBOR for dollars for the relevant Hire Calculation Period; or
|
|
(b) |
before close of business in Hong Kong on the Quotation Day for the relevant Hire Calculation Period, the cost to the Owners of funding the Charterhire Principal from whatever source it may
select would be in excess of LIBOR.
|
|
(a) |
on a date no earlier than thirty (30) days prior to the relevant date;
|
|
(b) |
by one (1) Approved Valuer;
|
|
(c) |
with or without physical inspection of the Vessel;
|
|
(d) |
on the basis of a sale for prompt delivery for cash on normal arm's length commercial terms as between a willing seller and a willing buyer, free of any existing charter or other contract
of employment; and
|
|
(e) |
if a range of valuation is given by the Approved Valuer, the lower end of the range shall apply,
|
|
(a) |
on a date no earlier than fifteen (15) days prior to the MOA Delivery Date;
|
|
(b) |
by two (2) Approved Valuers respectively, one (1) appointed by the Owners and one (1) appointed by the Charterers;
|
|
(c) |
with or without physical inspection of the Vessel;
|
|
(d) |
on the basis of a sale for prompt delivery for cash on normal arm's length commercial terms as between a willing seller and a willing buyer, free of any existing charter or other contract
of employment; and
|
|
(e) |
if a range of valuation is given by an Approved Valuer, the lower end of the range shall apply for that Approved Valuer,
|
|
(a) |
the business, operations, property, condition (financial or otherwise) or prospects of the Charterers or any other Security Party;
|
|
(b) |
the ability of the Charterers or any other Security Party to perform its material obligations under any Transaction Document to which it is a party;
|
|
(c) |
the validity, legality or enforceability of any Transaction Document or the rights or remedies of the Owners or any other Creditor Party under any of the Transaction Documents; or
|
|
(d) |
the validity, legality or enforceability of, or the effectiveness or priority and ranking of any Security Interests granted pursuant to any of the Security Documents.
|
|
(a) |
Security Interests created by a Transaction Document or a Financial Instrument;
|
|
(b) |
prior to Delivery, Security Interests created by the Existing Security Documents;
|
|
(c) |
liens for unpaid master's and crew's wages in accordance with the ordinary course of operation of the Vessel or in accordance with usual reputable maritime practice;
|
|
(d) |
liens for salvage;
|
|
(e) |
liens for master's disbursements incurred in the ordinary course of trading;
|
|
(f) |
any other liens arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of the Vessel where the Charterers are contesting the claim giving
rise to such lien in good faith by appropriate steps and for the payment of which adequate reserves have been made in case the Charterers finally have to pay such claim so long as any such proceedings shall not, and may reasonably be
considered unlikely to, lead to the arrest, sale, forfeiture or loss of the Vessel or any interest in the Vessel;
|
|
(g) |
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
Charterers are prosecuting or defending such action in good faith by appropriate steps;
|
|
(h) |
Security Interests arising by operation of law in respect of taxes which are not overdue or for payment of taxes which are overdue for payment but which are being contested by the
Charterers in good faith by appropriate steps and in respect of which adequate reserves have been made; and
|
|
(i) |
such other Security Interests as permitted in writing by the Owners and/or the Security Trustee.
|
|
(a) |
in relation to the first Hire Calculation Period for which the Interest Rate for that Hire Calculation Period is to be determined, five (5) Business Days before the first day of that
period; and
|
|
(b) |
in relation to any other period for which an Interest Rate is to be determined, fourteen (14) Business Days before the first day of that period (or such later date as the Owners may
agree),
|
|
(a) |
its jurisdiction of incorporation;
|
|
(b) |
any jurisdiction where any property owned by it and charged under a Transaction Document is situated;
|
|
(c) |
any jurisdiction where it conducts its business; and
|
|
(d) |
any jurisdiction whose laws govern the perfection of any of the Transaction Documents entered into by it creating a Security Interest,
|
|
(a) |
the Charterers, the Guarantor, the Approved Managers and any party providing security to the Owners and/or the Security Trustee for the Charterers' obligations under this Charter pursuant
to a Security Document; and
|
|
(b) |
the Collateral Security Parties of both Collateral Vessels,
|
|
(a) |
delivery of the original share certificates for the shares held by the Guarantor in the Company and the ancillary documents to be delivered under the Deed of Charge;
|
|
(b) |
service by the Greek court bailiff of an original signed Account Pledge on the Account Bank and the Charterers;
|
|
(c) |
execution of all notices, acknowledgments and consents as required under the Transaction Documents; and
|
|
(d) |
any other Authorisations of the Transaction Documents as may be required or recommended in any Legal Opinion.
|
|
(a) |
which is controlled, directly or indirectly, by the first mentioned company or corporation;
|
|
(b) |
more than half the issued equity share capital of which is beneficially owned, directly or indirectly, by the first mentioned company or corporation; or
|
|
(c) |
which is a Subsidiary of another Subsidiary of the first mentioned company or corporation,
|
|
(a) |
the Purchase Option Price applicable on the relevant date as if that relevant date is a Purchase Option Date; and
|
|
(b) |
(i) the Breakfunding Costs and (ii) any costs incurred and expenses incurred by the Owners and any other Creditor Parties (and their financiers (if any)) in
|
|
(a) |
actual, constructive, compromised, agreed or arranged total loss of the Vessel;
|
|
(b) |
any expropriation, requisition or acquisition of the Vessel, whether for full consideration, a consideration less than its proper value, a nominal consideration or without any
consideration (excluding a requisition for hire); or
|
|
(c) |
any arrest, capture, seizure, confiscation or detention of the Vessel (including any hijacking or theft but excluding any event specified in paragraph (b) of this definition), which is
effected by any Governmental Agency or by any person or persons claiming to be or to represent a Governmental Agency or other persons unless it is redelivered within three (3) months to the full control of the Owners or the Charterers.
|
|
(a) |
the Charterers, if they are resident for tax purposes in the US; or
|
|
(b) |
any other Security Parties some or all of whose payments under the Transaction Documents are from sources within the US for US federal income tax purposes.
|
32.2 |
In this Charter:
|
|
(a) |
agreed form means, in relation to a document, such document in a form agreed in writing between (i) the Owners or the Security Trustee and (ii) the
Charterers;
|
|
(b) |
asset includes every kind of property, asset, interest or right, including any present, future or contingent right to any revenues or other
payment;
|
|
(c) |
company includes any partnership, joint venture and unincorporated association;
|
|
(d) |
consent includes an Authorisation, consent, approval, resolution, licence, exemption, filing, registration, notarisation and legalisation;
|
|
(e) |
contingent liability means a liability which is not certain to arise and/or the amount of which remains unascertained;
|
|
(f) |
continuing means, in relation to any Termination Event, a Termination Event which has not been waived by the Owners or remedied to the satisfaction
of the Owners;
|
|
(g) |
document includes a deed; also a letter, fax or telex;
|
|
(h) |
expense means any kind of cost, charge or expense (including all legal costs, charges and expenses) and any applicable value added or other tax;
|
|
(i) |
including shall be construed as including without limitation (and cognate expressions shall be construed
similarly);
|
|
(j) |
indebtedness includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future,
actual or contingent;
|
|
(k) |
law includes any order or decree, any form of delegated legislation, any treaty or international convention and any regulation or resolution of the
Council of the European Union, the European Commission, the United Nations or its Security Council;
|
|
(l) |
legal or administrative action means any legal proceeding or arbitration and any administrative or regulatory action or investigation;
|
|
(m) |
liability includes every kind of debt or liability (present or future, certain or contingent), whether incurred as principal or surety or
otherwise;
|
|
(n) |
months shall be construed in accordance with Clause 32.3
|
|
(o) |
person includes any individual, firm, company, corporation, government, state or agency of a state or any association, trust, joint venture,
consortium, partnership or other entity (whether or not having separate legal personality);
|
|
(p) |
policy, in relation to any insurance, includes a slip, cover note, certificate of entry or other document evidencing the contract of insurance or
its terms;
|
|
(q) |
protection and indemnity risks means the usual risks covered by the UK P&I Club or any other protection and indemnity association which is a
member of the International Group of P&I Clubs acceptable to the Owners and the Security Trustee including pollution risks, extended passenger cover and the proportion (if any) of any sums payable to any other person or persons in
case of collision which are not recoverable under the hull and machinery policies by reason of the incorporation in them of Clause 6 of the International Hull Clauses (1/11/02 or 1/11/03), Clause 8 of the Institute Time Clauses
(Hulls)(1/10/83) or Clause 8 of the Institute Time clauses (Hulls) (1/11/1995) or the Institute Amended Running Down clause (1/10/71) or any equivalent provision;
|
|
(r) |
regulation includes any regulation, rule, official directive, request or guideline (whether or not having the force of law) of any governmental,
intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;
|
|
(s) |
tax includes any present or future tax, duty, impost, levy or charge of any kind which is imposed by any state, any political sub-division of a
state or any local or municipal authority (including any such imposed in connection with exchange controls), and any connected penalty, interest or fine;
|
|
(t) |
a provision of law is a reference to that provision as amended or re-enacted; and
|
|
(u) |
a time of day is a reference to Hong Kong time.
|
32.3 |
Meaning of month
|
|
(a) |
(subject to paragraph (c) below) if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in which that period is
to end if there is one, or if there is not, on the immediately preceding Business Day;
|
|
(b) |
if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month; and
|
|
(c) |
if a Hire Calculation Period begins on the last Business Day of a calendar month, that Interest Period shall end on the last Business Day in the calendar month in which that Hire
Calculation Period is to end.
|
32.4 |
In this Charter:
|
|
(a) |
references to a Transaction Document or any other document being in the form of a particular appendix or to any document referred to in the recitals include references to that form with
any modifications to that form which the Owners and/or the Security Trustee approve;
|
|
(b) |
references to, or to a provision of, a Transaction Document or any other document are references to it as amended or supplemented, whether before the date of this Charter or otherwise;
|
|
(c) |
references to, or to a provision of, any law include any amendment, extension, re-enactment or replacement, whether made before the date of this Charter or otherwise;
|
|
(d) |
references to Clauses, Sub-Clauses and Schedules are to be construed as references to clauses and sub-clauses of, and schedules to, this Charter; and
|
|
(e) |
words denoting the singular number shall include the plural and vice versa, and words importing a gender include every gender.
|
32.5 |
Headings
|
33. |
CHARTER PERIOD
|
33.1 |
The Charter Period shall commence on the Commencement Date.
|
33.2 |
Notwithstanding the foregoing and subject to the terms herein, this Charter shall be in full force and effect and valid, binding and enforceable against the Parties with effect from the
date hereof.
|
33.3 |
The Charter Period shall, subject to the terms of this Charter, continue for a period from the Commencement Date to and including the date falling one hundred and nineteen (119) months
after the second (2nd) Payment Date.
|
34. |
CANCELLATION
|
35. |
CONDITIONS PRECEDENT AND CONDITIONS SUBSEQUENT
|
35.1 |
The obligation of the Owners to charter the Vessel to the Charterers hereunder is subject to and conditional upon:
|
|
(a) |
no Termination Event having occurred which is continuing;
|
|
(b) |
no other event has occurred which with the giving of notice or lapse of time would, if not remedied, constitute a Termination Event;
|
|
(c) |
the representations and warranties contained in Clause 46
|
|
(d) |
the Charterers (as sellers) and the Owners having duly executed and entered into the MOA;
|
|
(e) |
the MOA Delivery occurring on or before the Cancelling Date;
|
|
(f) |
the Owners having received from the Charterers:
|
|
(i) |
on the date of this Charter, the documents or evidence set out in Part AI of Addendum No.1 in form and substance satisfactory to them;
|
|
(ii) |
no less than fourteen (14) days prior to Delivery, the documents or evidence set out in Part AII of Addendum No.1 in form and substance satisfactory to them;
|
|
(iii) |
no less than seven (7) Banking Days prior to Delivery, the documents or evidence set out in Part AIII of Addendum No.1 in form and substance satisfactory to them;
|
|
(iv) |
no less than three (3) Banking Days prior to Delivery (or such later date as the Owners may agree), the documents or evidence set out in Part AIV of Addendum No.1 in form and substance
satisfactory to them;
|
|
(v) |
no less than one (1) Banking Day prior to Delivery, the documents or evidence set out in Part BI of Addendum No.1 in form and substance satisfactory to them; and
|
|
(vi) |
on or before Delivery, the documents or evidence set out in Part BII of Addendum No.1 in form and substance satisfactory to them.
|
35.2 |
The obligation of the Owners to continue chartering the Vessel to the Charterers hereunder is subject to and conditional upon the Owners having received from the Charterers on or before
such dates as specified in Parts C and D of Addendum No.1 the documents or evidence set out in Parts C and D of Addendum No.1 in form and substance satisfactory to them.
|
35.3 |
Upon the requirements of Clause 35.1
|
35.4 |
The conditions precedent set out in Clause 35.1
|
36. |
DELIVERY
|
36.1 |
Subject to the requirements of Clause 35.1
|
36.2 |
On Delivery, as evidence of the commencement of the Charter Period, the Charterers and the Owners shall sign the Certificate of Delivery and Acceptance. Without prejudice to this Clause,
the Charterers shall be deemed to have accepted the Vessel under this Charter, and the commencement of the Charter Period having started, on Delivery even if, for whatever reason, the Certificate of Delivery and Acceptance is not signed
but Delivery has occurred.
|
36.3 |
Without prejudice and notwithstanding the provisions of this Clause, the Charterers shall not be entitled for any reason whatsoever to refuse to accept delivery of the Vessel under this
Charter once the Vessel has been delivered to and accepted by (a) the Charterers from the Original Sellers under the First MOA and (b) the Owners from the Charterer as sellers under the MOA, and the Owners shall not be liable for any
losses, cost or expenses whatsoever or howsoever arising including without limitation, any loss of profit or any loss or otherwise and whether before or after Delivery:
|
|
(a) |
resulting directly or indirectly from any defect or alleged defect in the Vessel or any failure of the Vessel; or
|
|
(b) |
arising from any delay in the commencement of the Charter Period or any failure of the Charter Period to commence unless such delay or failure results solely from a failure by the Owners
to pay the MOA Purchase Price pursuant to, and in accordance with, the terms of the MOA.
|
36.4 |
The Owners will not and shall not be obliged to deliver the Vessel to the Charterers with any bunkers and unused lubricating oils and greases in storage tanks and unopened drums of the
Vessel, but the Vessel shall be delivered with whatever is onboard when delivered by the Original Sellers (as sellers) to the Charterers (as buyers) under the First MOA and the Charterers (as sellers) to the Owners (as buyers) under the
MOA.
|
36.5 |
The Charterers hereby acknowledge and agree that the Owners are not the manufacturer or original supplier of the Vessel and that the Owners make no condition, term, representation or
warranty, express or implied (and whether statutory or otherwise) as to the Owners' title to the Vessel or as to the seaworthiness, merchantability, condition, design, operation, performance, quality, capacity or fitness for use or as to
the eligibility of the Vessel for any particular trade or operation or any other condition, term, representation or warranty whatsoever, express or implied, with respect to the Vessel. Acceptance of delivery by the Charterers or (as the
case may be) deemed delivery of the Vessel to the Charterers under this Charter shall be conclusive proof evidencing that, for the purposes of the obligations and liabilities of the Owners hereunder or in connection herewith, the Vessel
is at that time seaworthy, in accordance with the provisions of this Charter, in good working order and repair and without defect or inherent vice whether or not discoverable by the Charterers and free and clear of all liens, Security
Interests and debts of whatsoever nature save for the Security Interests granted pursuant to the Security Documents.
|
36.6 |
Notwithstanding and without prejudice to the foregoing Clause 36.5
|
36.7 |
The Charterers agree that the Owners shall be under no liability to supply any replacement Vessel or any piece or part thereof during any period when the Vessel is unusable and shall not
be liable to the Charterers or any other person as a result of the Vessel being unusable.
|
37. |
CHARTERHIRE
|
37.1 |
In consideration of the Owners agreeing to charter the Vessel to the Charterers under this Charter at the request of the Charterers, the Charterers hereby irrevocably and unconditionally
agree to pay to the Owners the Charterhire in respect of the chartering of the Vessel during the Charter Period. An indicative Charterhire Schedule setting out the amount of the Upfront Charterhire, the Balloon Payment and the Fixed
Charterhire is set out in Schedule 2
|
37.2 |
Subject to the terms of this Clause, each instalment of the Fixed Charterhire and the Variable Charterhire shall be paid on each Payment Date on the following basis:
|
|
(a) |
the first instalment of the Charterhire shall be paid on the Commencement Date and shall comprise the Charterhire payable in advance in respect of the period from the Commencement Date up
to and including the date falling on the 10th day of the month falling immediately after the Commencement Date; and
|
|
(b) |
thereafter each instalment of Charterhire shall be paid on the date falling one (1) month thereafter and shall comprise the Charterhire payable in advance in respect of each such one (1)
month's period, PROVIDED THAT:
|
|
(i) |
the Charterers shall pay Variable Charterhire on the second (2nd) Payment Date which has accrued on the Charterhire Principal in respect of the shortened Hire Calculation Period commencing
from the Commencement Date and up to the second (2nd) Payment Date on a pro-rata basis; and
|
|
(ii) |
on the last Payment Date the Charterers shall pay to the Owners the Balloon Payment together with the last instalment of Fixed Charterhire and the last instalment of Variable Charterhire
which together shall comprise the Charterhire payable in arrears in respect of the one (1) month's period from the second (2nd) last Payment Date to the last Payment Date,
|
37.3 |
The Vessel shall not at any time be deemed off-hire and the Charterers' obligation to pay all Charterhire and other amounts payable in this Charter shall be paid in Dollars and shall be
absolutely and unconditionally payable under any and all circumstances and shall not be affected by any circumstances of any nature whatsoever including but not limited to:
|
|
(a) |
any set off, counterclaim, recoupment, defence, claim or other right which the Charterers may at any time have against the Owners or any other person for any reason whatsoever including,
without limitation, any act, omission or breach on the part of the Owners under this Charter or any other agreement at any time existing between the Owners and the Charterers;
|
|
(b) |
any change, extension, indulgence or other act or omission in respect of any indebtedness or obligation of the Charterers, or any sale, exchange, release or surrender of, or other dealing
in, any security for any such indebtedness or obligation;
|
|
(c) |
any title defect or Security Interest or any dispossession of the Vessel by title paramount or otherwise, unless caused by the fault or gross negligence of the Owners and/or the Security
Trustee;
|
|
(d) |
any defect in the seaworthiness, condition, value, design, merchantability, operation or fitness for use of the Vessel or the ineligibility of the Vessel for any particular trade;
|
|
(e) |
any damage (including damage resulting in a Total Loss) to or forfeiture or court marshall's or other sale of the Vessel;
|
|
(f) |
any libel, attachment, levy, detention, sequestration or taking into custody of the Vessel or any restriction or prevention of or interference with or interruption or cessation in, the use
or possession thereof by the Charterers;
|
|
(g) |
any insolvency, bankruptcy, reorganization, arrangement, readjustment, dissolution, liquidation or similar proceedings by or against the Charterers;
|
|
(h) |
any invalidity, unenforceability, lack of due authorization or other defect, or any failure or delay in performing or employing with any of the terms and provisions of this Charter or any
of the Transaction Documents by any party to this Charter or any other person;
|
|
(i) |
any enforcement or attempted enforcement by any of the Owners or the other Creditor Parties of their rights under this Charter or any of the Transaction Documents executed or to be
executed pursuant to this Charter; or
|
|
(j) |
any loss of use of the Vessel due to deficiency or default or strike of officers or crew, fire, breakdown, damage, accident, defective cargo or any other cause which would or might but for
this provision have the effect of terminating or in any way affecting any obligation of the Charterers under this Charter.
|
37.4 |
Time of payment of Charterhire and other payments by the Charterers shall be of the essence of this Charter.
|
37.5 |
All payments of Charterhire and any moneys payable hereunder shall be made in Dollars.
|
37.6 |
All Charterhire and any other moneys payable hereunder shall be payable by the Charterers to the Owners Account.
|
37.7 |
Payment of Charterhire shall be at the Charterers' risk until receipt by the Owners of the payment into the Owners Account.
|
37.8 |
(a) If a Market Disruption Event occurs in relation to any Charterhire for any Hire Calculation Period, then the Interest Rate for the relevant period shall be the rate per annum which is
the sum of:
|
|
(i) |
the Margin; and
|
|
(ii) |
the rate notified to the Charterers by the Owners in writing as soon as practicable and in any event before interest is due to be paid in respect of that Hire Calculation Period, to be
that which expresses as a percentage rate per annum the cost to the Owners of funding the Charterhire for such period from whatever comparable source it may select, provided that the Owners shall use their reasonable endeavours to provide
or procure the provision of the evidence of such rate.
|
|
(b) |
If a Market Disruption Event occurs and the Owners or the Charterers so require, the Owners and the Charterers shall enter into negotiations (for a period of not more than thirty (30)
days) with a view to agreeing a substitute basis for determining the rate of interest.
|
|
(c) |
Any alternative basis agreed pursuant to paragraph 37.8(b)
|
37.9 |
All stamp duty, value added tax, withholding or other taxes and import and export duties and all other similar types of charges which may be levied or assessed on or in connection with:
|
|
(a) |
the operation of this Charter in respect of the hire and all other payments to be made pursuant to this Charter and the remittance thereof to the Owners; and
|
|
(b) |
the import, export, purchase, delivery and re-delivery of the Vessel,
|
37.10 |
If requested by the Charterers, the Owners will use their reasonable endeavours to change their jurisdiction of incorporation to another jurisdiction reasonable designated by the
Charterers, provided that:
|
|
(a) |
the new jurisdiction of incorporation of the Owners are acceptable to their financiers (if any);
|
|
(b) |
the Charterers shall be responsible for preparing all application, registration and other documents required for the change of jurisdiction of incorporation in form and substance
acceptable to the Owners;
|
|
(c) |
the new jurisdiction of incorporation of the Owners is acceptable to the then current flag state of the Vessel for the purpose of maintaining the registration of the Vessel under that flag
state in form and substance acceptable to the Owners;
|
|
(d) |
the Charterers shall be responsible for preparing all application, registration and other documents required for registration of the Owners as foreign maritime entity in other relevant
jurisdiction for the purpose of maintaining the registration of the Vessel under the then current flag state in form and substance acceptable to the Owners;
|
|
(e) |
if a change of flag state is required as a result of the change of jurisdiction of incorporation of the Owners, such change of jurisdiction of incorporation of the Owners shall be subject
to the prior written consent of the Owners and the Owners' financiers (if any), and the Charterers shall be responsible for registration of the Vessel in such new flag state and pay to the Owners or their financier (if any) upon demand
the legal fees, registration fees and other duties (including any duties payable by the Owners and the Owners' financiers (if any)) imposed by the new registry or any taxing authority therein in connection with the preparation,
negotiation and registration of such new mortgage, other Financial Instruments (including any amendment or supplement thereto) and satisfactory legal opinions in favour of the Owners and/or their financier (if any); and
|
|
(f) |
all other fees, costs, expenses, payments, taxes, charges and liabilities whatsoever incurred by the Owners and/or their financiers (if any) relating to, arising out of or in connection
with such change shall be borne by the Charterers.
|
37.11 |
Any payment of the Termination Sum shall be made together with any other amount payable under this Charter.
|
37.12 |
If the Charterers fail to make any payment due under this Charter on the due date, they shall pay interest on such late payment at the Default Rate from the date on which such payment
became due until the date one (1) day prior to the date of payment thereof.
|
37.13 |
All default interest and any other payments under this Charter or any other Transaction Documents 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.
|
37.14 |
Any payment, which is due to be made on a day which is not a Business Day, shall be made on the next Business Day in the same calendar month (if there is one) or the preceding Business Day
(if there is not). If the last Payment Date is not a Business Day, any payment under the Transaction Documents which is due to be made on that day shall be made on the preceding Business Day.
|
37.15 |
(a) Without prejudice to Clause 37.2, the Charterers may prepay the Charterhire Principal at any time during the Charter Period (being at least $1,000,000 or an integral multiple thereof)
together with any Breakfunding Cost and expenses reasonably incurred by the Owners and the other Creditor Parties under this Charter and the other Transaction Documents in connection with or as a result of such prepayment, PROVIDED THAT
(i) the Charterers shall only be entitled to prepay the Charterhire Principal once a year and the aggregate amount of all prepayments during the Charter Period shall not exceed $5,000,000 under this Clause 37.15 and (ii) the Owners shall
have received from the Charterers not less than sixty (60) days' notice of their intention to make such prepayment, specifying the amount to be prepaid and the proposed date of such prepayment. Any amount prepaid pursuant to this Clause
37.15(a) shall be applied towards reducing the instalments of Fixed Charterhire (for the avoidance of doubt, excluding the Balloon Payment) falling on or after the date of such prepayment by the amount of such prepayment on a pro-rata
basis.
|
|
(b) |
The Charterers shall not prepay all or any part of the Charterhire except at the times and in the manner expressly provided for in this Charter.
|
37.16 |
If the Financing Principal is less than US$24,400,000 or upon any prepayment made by the Charterers under Clause 37.15, the Owners shall provide the Charterers with a revised Schedule 2
|
37.17 |
Each Revised Charterhire Schedule issued pursuant to Clause 37.16 shall (i) be deemed incorporated into this Charter in substitution for the then current Schedule 2
|
38. |
POSSESSION OF VESSEL
|
38.1 |
The Charterers shall not, without the prior written consent of the Owners and the Security Trustee, assign, mortgage or pledge the Vessel or any interest therein and shall not permit the
creation of any Security Interest thereon other than Permitted Security Interests.
|
38.2 |
The Charterers shall promptly notify any party (as the Owners may request) in writing that the Vessel is the property of the Owners and the Charterers shall provide the Owners with a copy
of such written notification and satisfactory evidence of that such party has received such written notification.
|
38.3 |
If the Vessel is arrested, seized, impounded, forfeited, detained or taken out of their possession or control (whether or not pursuant to any distress, execution or other legal process),
the Charterers shall procure the immediate release of the Vessel (whether by providing bail or procuring the provision of security or otherwise do such lawful things as the circumstances may require) and shall immediately notify the
Owners of such event and shall indemnify the Owners against all losses, costs or charges incurred by the Owners by reason thereof in re-taking possession or otherwise in re-acquiring the Vessel.
|
38.4 |
The Charterers shall pay and discharge or cause any Sub-Charterers of the Vessel to pay and discharge all obligations and liabilities whatsoever which have given or may give rise to liens
on or claims enforceable against the Vessel and take all reasonable steps to prevent a threatened arrest of the Vessel.
|
39. |
INSURANCE
|
39.1 |
The Charterers shall procure that such insurances are effected in form and substance satisfactory to the Owners, the Security Trustee and their financiers (if any):
|
|
(a) |
in Dollars;
|
|
(b) |
in the case of hull and machinery (and increased value insurance), fire and usual marine risks and war risks to cover an amount not less than the greater of (i) the Market Value of the
Vessel for the time being and (ii) one hundred and twenty per cent. (120%) of the Charterhire Principal then outstanding;
|
|
(c) |
in the case of oil pollution liability risks for the Vessel, for an aggregate amount equal to the highest level of cover from time to time available under protection and indemnity club
entry and in the international marine insurance market and for an amount of not less than US$1,000,000,000;
|
|
(d) |
in relation to protection and indemnity risks (including freight, demurrage and defence cover) in respect of the full tonnage of the Vessel;
|
|
(e) |
in relation to such other insurances reasonably required by the Owners, the Security Trustee and/or their financiers (if any) but excluding loss of hire and contingent liability insurance;
and
|
|
(f) |
through approved brokers or with first class international insurers and/or underwriters acceptable to the Owners and the Security Trustee or, in the case of war risks and protection and
indemnity risks, UK P& I Club or any other approved war risks and protection and indemnity risks association which is a member of the International Group of P&I Clubs acceptable to the Owners and the Security Trustee,
|
39.2 |
In addition to the terms set out in Clause 13(a), to the extent required and acceptable to the relevant insurers and protection and indemnity club, the Charterers shall procure that the
obligatory insurances shall:
|
|
(a) |
subject always to paragraph (ii), name the Security Trustee, the Charterers and, subject to execution of the Manager's Undertakings, the Approved Managers as the only named assureds unless
the interest of every other named assured or co-assured is limited:
|
|
(i) |
in respect of any obligatory insurances for hull and machinery and war risks;
|
|
(A) |
to any provable out-of-pocket expenses that they have incurred and which form part of any recoverable claim on underwriters; and
|
|
(B) |
to any third party liability claims where cover for such claims is provided by the policy (and then only in respect of discharge of any claims made against them); and
|
|
(ii) |
in respect of any obligatory insurances for protection and indemnity risks, to any recoveries they are entitled to make by way of reimbursement following discharge of any third party
liability claims made specifically against them;
|
|
(b) |
subject to Clause 43, whenever a financier (if any) of the Owners requires:
|
|
(i) |
in respect of fire and other usual marine risks and war risks name (or be amended to name) such financier as additional named assured for its rights and interests, warranted no operational
interest and with full waiver of rights of subrogation against such financier, but without such financier thereby being liable to pay (but having the right to pay) premiums, calls or other assessments in respect of such insurance;
|
|
(ii) |
in relation to protection and indemnity risks, name (or be amended to name) such financier as additional insured or co-assured for its rights and interests to the extent permissible under
the relevant protection and indemnity club rules; and
|
|
(iii) |
name such financier (as applicable) and the Security Trustee (as applicable) as respectively the first ranking loss payee and the second ranking loss payee (and in the absence of such
financier, as first ranking loss payee) in accordance with the terms of the relevant loss payable clauses approved by such financier and the Security Trustee with such directions for payment in accordance with the terms of such relevant
loss payable clause, as the Security Trustee and their financiers (if any) may specify;
|
|
(c) |
provide that all payments by or on behalf of the insurers under the obligatory insurances to the Owners, the Security Trustee and/or their financiers (as applicable) shall be made without
set-off, counterclaim or deductions or condition whatsoever;
|
|
(d) |
provide that such obligatory insurances shall be primary without right of contribution from other insurances which may be carried by the Owners, the Security Trustee or their financiers
(if any);
|
|
(e) |
provide that the Owners, the Security Trustee and/or their financiers (if any) may make proof of loss if the Charterers fail to do so; and
|
|
(f) |
provide that if any obligatory insurance is cancelled, or if any substantial change is made in the coverage which adversely affects the interest of the Owners, the Security Trustee and/or
their financiers (if any), or if any obligatory insurance is allowed to lapse for non-payment of premium, such cancellation, change or lapse shall not be effective with respect to the Owners, the Security Trustee and/or their financiers
(if any) for fourteen (14) days) after receipt by the Owners, the Security Trustee and/or their financiers (if any) of prior written notice from the insurers of such cancellation, change or lapse.
|
39.3 |
The Charterers shall:
|
|
(a) |
at least fourteen (14) days prior to Delivery, notify in writing the Owners and the Security Trustee of the terms and conditions of all Insurances and the brokers (or other insurers) and
any protection and indemnity or war risks association through or with whom the Charterers have arranged all Insurances;
|
|
(b) |
at least fourteen (14) days before the expiry of any obligatory insurance notify the Owners and the Security Trustee (copied to their financiers (if any)) of the brokers (or other
insurers) and any protection and indemnity or war risks association through or with whom the Charterers propose to renew that obligatory insurance and of the proposed terms of renewal and obtain the Owners' and the Security Trustee's
approval to such matters;
|
|
(c) |
at least seven (7) days before the expiry of any obligatory insurance, procure that such obligatory insurance is renewed or to be renewed on its expiry date in accordance with the
provisions of this Charter;
|
|
(d) |
procure that the approved brokers and/or the war risks and protection and indemnity associations with which such a renewal is effected shall promptly after the renewal or the effective
date of the new insurance and protection and indemnity cover notify the Owners and the Security Trustee (copied to their financiers (if any)) in writing of the terms and conditions of the renewal; and
|
|
(e) |
as soon as practicable after the expiry of any obligatory insurance, deliver to the Owners and the Security Trustee a letter of undertaking as required by this Charter in respect of such
Insurances for the Vessel as renewed pursuant to Clause 39.3(c) together with copies of the relevant policies or cover notes or entry certificates duly endorsed with the interest of the Security Trustee and/or their financiers (if any).
|
39.4 |
The Charterers shall ensure that all insurance companies, underwriters, and (if any) insurance brokers provide the Owners and the Security Trustee with all policies, cover notes and
certificates of entry relating to the obligatory insurances which they are to effect or renew and of a letter or letters or undertaking in such form as may be required by the Owners, the Security Trustee and their financiers (if any) and
including undertakings by the insurance companies and/or underwriters 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 this Charter, the other Transaction
Documents and the Financial Instruments;
|
|
(b) |
they will hold the benefit of such policies and such insurances, to the order of the Owners, the Security Trustee and/or such financiers and/or such other party in accordance with the said
loss payable clause;
|
|
(c) |
they will advise the Owners, the Security Trustee and such financiers promptly of any material change to the terms of the obligatory insurances of which they are aware;
|
|
(d) |
following a written application from the Owners, the Security Trustee and/or such financiers not later than one (1) month before the expiry of the obligatory insurances they will notify
the Owners, the Security Trustee and such financiers not less than fourteen (14) days before the expiry of the obligatory insurances, in the event of their not having received notice of renewal instructions from the Charterers and, in the
event of their receiving instructions to renew, they will promptly notify the Owners, the Security Trustee and such financiers of the terms of the instructions; and
|
|
(e) |
if any of the obligatory insurances form part of any fleet cover, the Charterers shall procure that the insurance broker(s), or leading insurer, as the case may be, undertake to the
Owners, the Security Trustee and such financiers that such insurance broker or insurer(s) will not set off against any sum recoverable in respect of a claim relating to the Vessel under such obligatory insurances any premiums due in
respect of any other vessel under any fleet cover of which the Vessel forms a part or any premium due for other insurances, they waive any lien on the policies, or any sums received under them, which they might have in respect of such
premiums, and they will not cancel such obligatory insurances by reason of non-payment of such premiums or other amounts, and will arrange for a separate policy to be issued in respect of the Vessel forthwith upon being so requested by
the Owners, the Security Trustee and/or such financiers and where practicable.
|
39.5 |
The Charterers shall ensure that any protection and indemnity and/or war risks associations in which the Vessel is entered provides the Owners, the Security Trustee and such financiers
with:
|
|
(a) |
a copy of the certificate of entry for the Vessel as soon as such certificate of entry is issued;
|
|
(b) |
a letter or letters of undertaking in such form as may be required by the Owners the Security Trustee and their financiers (if any) or in such association's standard form; and
|
|
(c) |
a copy of each of (i) a certificate of insurance or other financial security in respect of civil liability for oil pollution damage, (ii) a certificate of insurance or other financial
security in respect of civil liability for bunker oil pollution damage, (iii) (if the Vessel trades or enters into US waters) a certificate issued pursuant to s1016(a) Oil Pollution Act 1990 and s108(a) Comprehensive Environmental
Response, Compensation and Liability Act 1980, as amended, in accordance with US Coast Guard Regulations, 33 CFR Part 138 and (iv) a certificate of insurance or other financial security in respect of shipowners' liability as required
under the Maritime Labour Convention.
|
39.6 |
The Charterers shall ensure that all policies relating to obligatory insurances are deposited with the approved brokers through which the insurances are effected or renewed.
|
39.7 |
The Charterers shall procure that all premiums or other sums payable in respect of the obligatory insurances are punctually paid and produce all relevant receipts when so required by the
Owners and the Security Trustee.
|
39.8 |
The Charterers shall ensure that any guarantees required by a protection and indemnity or war risks association are promptly issued and remain in full force and effect.
|
39.9 |
The Charterers shall neither do nor omit to do (nor 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 under an obligatory insurance repayable in whole or in part; and, in particular:
|
|
(a) |
the Charterers shall procure that all necessary action is taken and all requirements are complied with which may from time to time be applicable to the obligatory insurances, and (without
limiting the obligations contained in this Clause) ensure that the obligatory insurances are not made subject to any exclusions or qualifications to which the Owners and the Security Trustee have not given their prior approval (unless
such exclusions or qualifications are made in accordance with the rules of UK P&I Club or any other protection and indemnity association which is a member of the International Group of P&I Clubs acceptable to the Owners and the
Security Trustee);
|
|
(b) |
the Charterers shall not make or permit any changes relating to the classification or classification society or manager or operator of the Vessel unless such changes have first been
approved by the underwriters of the obligatory insurances and the Owners and the Security Trustee;
|
|
(c) |
prior to permitting the Vessel to enter the US Exclusive Economic Zone, the Charterers shall comply with all regulations in force of the US Oil Pollution Act 1990 which apply to the Vessel
including, if necessary, obtaining within the time limits set by the US Coast Guard, a Certificate of Financial Responsibility, a copy of which shall be lodged with the Owners and the Security Trustee prior to engaging in any such voyage;
and
|
|
(d) |
the Charterers shall not employ the Vessel, 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.
|
39.10 |
The Charterers shall not make or agree to any material alteration to the terms of any obligatory insurance nor waive any right relating to any obligatory insurance without the prior
written consent of the Owners, the Security Trustee and their financiers (if any).
|
39.11 |
The Charterers shall not settle, compromise or abandon any claim under any obligatory insurance for Total Loss or for a Major Casualty without the Owners' and the Security Trustee's
approval, and shall do all things necessary and provide all documents, evidence and information to enable the Security Trustee to collect or recover any moneys which at any time become payable in respect of the obligatory insurances.
|
39.12 |
The Charterers shall provide the Owners and the Security Trustee upon written request, copies of:
|
|
(a) |
all communications between the Charterers and:
|
|
(i) |
the approved brokers (if applicable); and
|
|
(ii) |
the approved protection and indemnity and/or war risks associations; and
|
|
(iii) |
the first class international insurers and/or underwriters, which relate directly or indirectly to:
|
|
(A) |
the Charterers' obligations relating to the obligatory insurances including, without limitation, all requisite declarations and payments of additional premiums or calls; and
|
|
(B) |
any credit arrangements made between the Charterers and any of the persons referred to in paragraphs (i) or (ii) relating wholly or partly to the effecting or maintenance of the obligatory
insurances;
|
|
(b) |
any material communication with all parties involved in case of a claim under any of the Vessel's insurances.
|
39.13 |
The Charterers shall promptly provide the Owners, the Security Trustee and/or their financiers (or any persons which they may designate) with:
|
|
(a) |
any information which the Owners, the Security Trustee and/or such financiers (or such designated persons) request for the purpose of:
|
|
(i) |
obtaining or preparing any report from an independent marine insurance broker as to the adequacy of the obligatory insurance effected or proposed to be effected; and/or
|
|
(ii) |
effecting, maintaining or renewing any such insurances as are referred to in Clauses 13(a) and 39.1 or dealing with or considering any matters relating to any such insurances;
|
|
(b) |
any information and documents reasonably requested by the Owners, the Security Trustee in connection with a claim under any of the Vessel's insurances exceeding the Major Casualty amount;
and
|
|
(c) |
if the Owners, the Security Trustee consider it necessary to obtain information in connection with a claim under any of the Vessel's insurances which does not exceed the Major Casualty
amount, such information and documents.
|
39.14 |
If one or more of the obligatory insurances are not effected and maintained with first class international insurers or are effected with an insurance or captive Subsidiary of the Owners,
the Security Trustee or the Charterers, then the Charterers shall procure, at their own expense, that the relevant insurers maintain in full force and effect facultative reinsurances with reinsurers and through brokers, in each case, of
recognised standing and acceptable in all respects to the Owners and the Security Trustee. Any reinsurance policy shall include, if and when permitted by law, a cut-through clause in a form acceptable to the Owners and the Security
Trustee. The
|
39.15 |
The Charterers shall be solely responsible for and indemnify the Owners in respect of all loss or damage to the Vessel (insofar as the Owners shall not be reimbursed by the proceeds of any
insurance in respect thereof) however caused occurring at any time or times before physical possession thereof is retaken by the Owners, reasonable wear and tear to the Vessel only excepted.
|
39.16 |
The Charterers shall:
|
|
(a) |
if so requested by the Owners, the Security Trustee and/or their financiers, reimburse the Owners, the Security Trustee and/or such financiers the costs for obtaining a detailed report
signed by an independent firm of marine insurance brokers appointed by the Owners, the Security Trustee and/or such financiers dealing with the Insurances and stating the opinion of such firm as to the adequacy of the Insurances; and
|
|
(b) |
procure that there is delivered to the insurance brokers described in Clause 39.16(a)
|
39.17 |
If the Charterers fail to comply with any of the provisions of this Clause 39, the Owners and the Security Trustee shall be entitled (but not bound) to effect and subsequently to maintain
all such Insurances upon the Vessel as they may think fit in order to procure the compliance with such provisions or alternatively, to require the Vessel (at the Charterers' risk) to remain in, or to proceed to and remain in a port
designated by the Owners, the Security Trustee and/or such financiers until such provisions are fully complied with.
|
40. |
TERMINATION AND REDELIVERY; WAR; TOTAL LOSS
|
40.1 |
Upon the occurrence of a Termination Event which is continuing:
|
|
(a) |
the Owners shall notify the Charterers of occurrence of the same (the Termination Event Notice) whereupon the Charterers may:
|
|
(i) |
in relation to a Termination Event under Clause 45(a), (c) or (g), within three (3) Business Days of the date of the Termination Event Notice, provide to the Owners a written notice
advising the Owners of their intention to terminate this Charter and shall promptly pay the Termination Sum to the Owners by no later than the end of such three (3) Business Days period; or
|
|
(ii) |
in relation to any other Termination Event, within thirty (30) days of the date of the Termination Event Notice, provide to the Owners a written notice advising the Owners of their
intention to terminate this Charter and shall promptly pay the Termination Sum to the Owners by no later than the end of such thirty (30) days period; and
|
|
(b) |
if the Charterers do not notify the Owners of their intention to terminate this Charter pursuant to Clause 40.1
|
40.2 |
The Owners shall notify the Charterers in writing if they intend to terminate this Charter in accordance with paragraph (f) of Clause 26 (War) and
the Charterers shall pay the Termination Sum to the Owners within ten (10) Business Days upon receipt of such written notification from the Owners whereupon the Owners shall, at the cost and expense of the Charterers, sell the Vessel to
the Charterers in accordance with Clause 40.4.
|
40.3 |
It is hereby agreed by the Parties that payment of the Termination Sum pursuant to Clause 40.1
|
40.4 |
Concurrently with the irrevocable payment of the Termination Sum in full pursuant to the terms of this Charter, this Charter shall terminate and the Owners shall (save in the event of
Total Loss) transfer the legal and beneficial ownership of the Vessel to the Charterers or their nominees free from any registered mortgages incurred or permitted by the Owners (save for those liens, Security Interests and debts incurred
by the Charterers or arising out of or in connection with this Charter and any other Permitted Security Interests) and shall execute (i) a bill of sale, (ii) a commercial invoice, (iii) a protocol of delivery and acceptance evidencing
such transfer and (iv) such other additional documents as may be necessary for the purpose of registering the Vessel at its intended flag state upon such transfer, provided that the Charterers shall notify the Owners of any such
additional documents no later than five (5) Business Days (or such other mutually agreed date) prior to such transfer, each in such form as may be required by the Charterers' intended flag state.
|
40.5 |
If the Charterers fail to make any payment or make only a partial payment of the Termination Sum on the due date in accordance with Clause 40.1 or 40.2 (as the case may be), Clauses 37.12
|
|
(a) |
the Charterers' right to possess and operate the Vessel shall immediately cease and the Charterers shall, upon the Owners' request, be obliged to immediately (and at the Charterers' own
cost) redeliver the Vessel to the Owners at such ready and nearest safe port as the Owners may require; and
|
|
(b) |
without limiting the generality of the foregoing or any other rights of the Owners, the Owners may, at their own option subject to Clause 40.6, sell the Vessel free of any charter, lease
or other engagement concerning the Vessel
|
40.6 |
If the Termination Sum has not been paid in full on the due date for payment under the terms of this Charter, the Owners shall have the Vessel valued in Dollars by three (3) Approved
Valuers appointed by the Owners and:
|
|
(a) |
if the average value of the three (3) valuations quoted by such three Approved Valuers (after offsetting all costs and expenses incidental to such valuations of the Vessel) (the Net Average Market Value) is higher than the Termination Sum, the Owners may, at their sole discretion:
|
|
(i) |
appoint one or more of such Approved Valuers to sell the Vessel at the highest price that they could obtain. The Charterers shall also have the right to recommend a buyer for the Vessel
and, if the Owners determine to sell the Vessel, they shall sell the Vessel to the buyer recommended by the Charterers if that buyer offers the same or higher price for the Vessel upon not less favourable terms than the other buyers
recommended by such Approved Valuers; or
|
|
(ii) |
retain the Vessel;
|
|
(b) |
if the Owners sell the Vessel in accordance with Clause 40.5(b) and paragraph (a)(i) above:
|
|
(i) |
the Owners shall have the right to deduct an amount equal to the aggregate of the expenses, disbursements, taxes, costs and losses whatsoever as may have been incurred by the Owners in
respect of the sale of the Vessel (the Net Sale Proceeds) from the gross proceeds of the sale of the Vessel;
|
|
(ii) |
an amount equal to the Termination Sum shall be deducted from the Net Sale Proceeds;
|
|
(iii) |
if the Net Sale Proceeds are insufficient to satisfy all amounts due and payable from the Charterers to the Owners hereunder, the Charterers shall immediately pay the shortfall to the
Owners upon demand by the Owners; and
|
|
(iv) |
any surplus (the Surplus Sale Proceeds) in the Net Sale Proceeds after deducting the Termination Sum pursuant to sub-paragraph (ii) above shall be
distributed by the Owners in accordance with Clause 40.7;
|
|
(c) |
if the Owners elect to retain the Vessel in accordance with paragraph (a)(ii) above:
|
|
(i) |
in the case of the Net Average Market Value of the Vessel is higher than the Termination Sum, the Owners shall offset the Termination Sum against the Net Average Market Value of the Vessel
and distribute the difference between the Net Average Market Value of the Vessel and the Termination Sum (the Surplus Retention Proceeds) in accordance with Clause 40.7; and
|
|
(ii) |
in the case of the Net Average Market Value is less than the Termination Sum, the Charterers shall immediately pay the shortfall to the Owners upon demand by the Owners; and
|
|
(d) |
the Charterers shall have the right to pay the Termination Sum and purchase the Vessel pursuant to Clause 40.1
|
40.7 |
The Surplus Retention Proceeds or the Surplus Sale Proceeds (as the case may be) shall be applied by the Owners (and the Charterers hereby authorise and instruct the Owners to so apply
such amounts) as follows:
|
|
(a) |
(in the case of a Termination Event (as defined in the relevant Collateral Charter) has occurred under either Collateral Charter) in or towards payment of the Termination Sum (as defined
in that Collateral Charter) to which that Collateral Vessel relates, together with any fees or charges incurred under that Collateral Charter. If a Termination Event (as defined in each Collateral Charter) has occurred under both
Collateral Charters and the Surplus Retention Proceeds or the Surplus Sale Proceeds (as the case may be) are insufficient to discharge the Termination Sum (as defined in each Collateral Charter) under both Collateral Charters, the Owners
shall apply the Surplus Retention Proceeds or the Surplus Sale Proceeds (as the case may be) in or towards payment pro rata of any Termination Sum (as defined in each Collateral Charter) under the Collateral Charters;
|
|
(b) |
(where such conditions are satisfied save for the charter free market value of either Collateral Vessel being below the asset coverage ratio stated in clause 47.1(n) of the relevant
Collateral Charter) in or towards payment of an additional cash deposit in an amount required to maintain the asset coverage ratio stated in clause 47.1(n) of that Collateral Charter, and if the remaining Surplus Retention Proceeds or
remaining Surplus Sale Proceeds (as the case may be) are insufficient to maintain the asset coverage ratio stated in clause 47.1(n) of both Collateral Charters, the Owners shall apply the remaining Surplus Retention Proceeds or remaining
Surplus Sale Proceeds (as the case may be) in or towards payment pro rata of the additional cash deposit required to maintain the asset coverage ratio stated in clause 47.1(n) of the Collateral Charters; and
|
|
(c) |
(in the case of there being a surplus remaining after the application of the amounts in paragraphs (a) and (b) above) direct to or to the order of the Charterers, provided that no
Termination Event shall have occurred and be continuing.
|
40.8 |
Without limiting the generality of the foregoing or any other rights of the Creditor Parties, upon the occurrence of a Termination Event which is continuing, the Owners shall have the sole
and exclusive right and power to do any of the following:
|
|
(a) |
settle, compromise, compound, adjust or defend any actions, suits or proceedings relating to or pertaining to the Vessel and this Charter;
|
|
(b) |
make proof of loss, appear in and prosecute any action arising from any policy or policies of insurance maintained pursuant to this Charter, and settle, adjust or compromise any claims for
loss, damage or destruction under, or take any other action in respect of, any such policy or policies; and
|
|
(c) |
terminate any management agreement with any manager (including any Approved Manager) of the Vessel and appoint a substitute manager in its sole discretion.
|
40.9 |
The Charterers hereby undertake to indemnify the Owners against any claims incurred in relation to the Vessel as a result of the Charterers' action or performance prior to such transfer of
ownership. Any taxes, notarial, consular and other costs, charges and expenses connected with closing of the Owners' register shall be for the Charterers' account.
|
40.10 |
Without prejudice to Clause 15, if the Charterers are required to redeliver the Vessel to the Owners pursuant to the terms of this Charter, the Charterers shall ensure that the Vessel
shall, at the time of redelivery to the Owners:
|
|
(a) |
be in an equivalent class as she was as at the Commencement Date without any recommendation or condition, and with valid, unextended certificates for not less than six (6) months;
|
|
(b) |
have passed her 5-year and if applicable, 10-year special surveys, and subsequent second intermediate survey and drydock at the Charterers' time and expense without any condition or
outstanding issue and to the satisfaction of the Classification Society;
|
|
(c) |
have her survey cycles up to date and trading and class certificate valid for at least six (6) months;
|
|
(d) |
be redelivered to the Owners together with all spare parts and spare equipment as were on board at the time of Delivery, and any such spare parts and spare equipment on board at the time
of re-delivery shall be taken over by the Owners free of charge;
|
|
(e) |
be free of any cargo and Security Interest (save for the Security Interests granted pursuant to the Financial Instruments and the Security Documents); and
|
|
(f) |
be free of any charter (unless the Owners wish to retain the continuance of any then existing charter).
|
40.11 |
The Owners shall, at the time of the redelivery of the Vessel, take over all bunkers, unused lubricating oil, unbroached provisions, paints, ropes and other consumable stores (excluding
spare parts) in the Vessel at the Owners' cost at the original purchase price as evidenced by copies of invoices certified by a director of the Charterers and on a "first in, first out" basis.
|
40.12 |
If the Vessel, for any reason, becomes a Total Loss, in consideration of (i) the Owners agreeing to enter into this Charter at the request of the Charterers and purchasing the Vessel from
the Charterers as sellers under the MOA, and (ii) without prejudice to the
|
|
(a) |
the date falling (in the case of paragraph (a) or (b) of the definition of Total Loss) one hundred and twenty (120) days or (in the case of paragraph (c) of the definition of Total Loss)
thirty (30) days after such Total Loss has occurred; and
|
|
(b) |
the date of receipt by the Security Trustee and/or their financiers (if any), in accordance with the terms of the relevant loss payable clause) of the proceeds of insurance relating to
such Total Loss,
|
40.13 |
For the purpose of this Charter, a Total Loss shall be deemed to have occurred:
|
|
(a) |
in the case of an actual loss of the Vessel, on the date on which it occurred or, if that is unknown, the date when the Vessel was last heard of; or
|
|
(b) |
in the case of a constructive, compromised, agreed or arranged total loss of the Vessel, on the earlier 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 Owners with the insurers in which the insurers agree to treat the Vessel as a total loss.
|
40.14 |
The Owners shall have no obligation to supply to the Charterers with a replacement vessel following the occurrence of a Total Loss.
|
41. |
FEES AND EXPENSES; INDEMNITIES;
|
41.1 |
Fees
|
41.2 |
Without prejudice to any other rights of the Owners hereunder, the Charterers shall promptly pay to the Owners within ten (10) Business Days of demand on a full indemnity basis all costs,
charges and expenses incurred by the Creditor Parties in collecting any Charterhire or other payments not paid on the due date under this Charter and in remedying any other failure of the Charterers to observe the terms and conditions of
this Charter.
|
41.3 |
All costs (including, but not limited to, legal costs, fees for insurance opinions, valuation and inspection) and expenses reasonably incurred by the Creditor Parties in the preparation,
negotiation, documentation, printing and execution of all documentation in relation to this Charter and the Transaction Documents and all legal costs, expenses and other disbursements reasonably incurred by the Creditor Parties' legal
counsels in connection with the same, shall be for the account of the Charterers and the Charterers shall pay such costs and expenses promptly within ten (10) Business Days of demand.
|
41.4 |
All costs and expenses incurred by the Owners in relation to the acquisition and registration of the Vessel by the Owners in the Owners' name in the flag state stated in Box 5 together
with any and all fees (including but not limited to any vessel registration and tonnage fees) payable by the Owners to such flag state to maintain and/or renew such registration shall be for the account of the Charterers and the
Charterers shall pay such costs and expenses promptly within ten (10) Business Days of demand.
|
41.5 |
In addition to the foregoing and to the extent not already addressed by the foregoing, the Charterers agree at all times during this Charter to indemnify and keep indemnified the Creditor
Parties against:
|
|
(a) |
all costs and expenses whatsoever reasonably incurred in connection with this Charter and any other Transaction Document or the Vessel, and any costs, charges, or expenses reasonably
incurred which the Charterers have agreed to pay under this Charter and any other Transaction Document and shall be claimed or assessed against or paid by the Creditor Parties save for (in each case) resulting from the wilful misconduct
of the Creditor Parties;
|
|
(b) |
any tax (except income tax) imposed on, or suffered by, any Creditor Party, excluding:
|
|
(i) |
any tax imposed on and calculated by reference to the net income actually received or receivable by such Creditor Party (but, for the avoidance of doubt, not including any sum deemed for
the purposes of tax to be received or receivable by such Creditor Party but not actually receivable) by the jurisdiction in which such Creditor Party is incorporated; or
|
|
(ii) |
any loss or liability that is compensated for by an increased payment under Clause 51.2.2;
|
|
(c) |
all losses, costs, charges, expenses, fees, payments, liabilities, penalties, fines, damages or other sanctions of a monetary nature (collectively, for the purposes of this Clause 41.5
|
|
(d) |
all Losses suffered or incurred by the Creditor Parties which result directly or indirectly from claims which may at any time be made on the ground that any design, article or material of
or in the Vessel or the operation or use thereof constitutes or is alleged to constitute an infringement of patent or copyright or registered design or other intellectual property right or any other right whatsoever save for (in each
case) resulting from the wilful misconduct of the Creditor Parties;
|
|
(e) |
all Losses suffered or incurred by the Owners in preventing or attempting to prevent the arrest, confiscation, seizure, taking in execution, impounding, forfeiture or detention of the
Vessel, or in securing the release of the Vessel therefrom save for (in each case) resulting from the wilful misconduct of the Creditor Parties;
|
|
(f) |
all Losses suffered or incurred by the Owners with respect to or as a direct result of the presence, escape, seepage, spillage, leaking, discharge or migration from the Vessel of oil or
any other hazardous substance, including
|
|
(g) |
any Losses incurred or suffered by the Owners in liquidating, employing or prepaying funds acquired or borrowed to purchase or finance or refinance the Vessel (excluding any costs incurred
in unwinding any associated interest rate or currency swaps or currency futures transactions entered into by the Owners) following any default in payment hereunder or the occurrence of any Termination Event.
|
41.6 |
If, under any applicable law, whether as a result of judgment against the Charterers or the liquidation of the Charterers or for any other reason, any payment to be made by the Charterers
under or in connection with this Charter is made or is recovered in a currency other than the currency (the currency of obligation) in which it is payable pursuant to this Charter then, to the
extent that the payment (when converted into the currency of obligation at the rate of exchange on the date for the determination of liabilities permitted by the applicable law) falls short of the amount unpaid under this Charter, the
Charterers shall as a separate and independent obligation, fully indemnify the Creditor Parties against the amount of the shortfall; and for the purposes of this sub-clause rate of exchange means
the best rate at which the Creditor Parties are able on the relevant date to purchase the currency of obligation with the other currency.
|
41.7 |
The Charterers hereby irrevocably agree to indemnify and hold harmless the Owners against any claim, expense, liability or loss to fund the acquisition of the Vessel pursuant to the MOA.
|
41.8 |
The indemnities contained in this Clause 41
|
42. |
NO WAIVER OF RIGHTS
|
42.1 |
No neglect, delay or indulgence on the part of either Party in enforcing the terms and conditions of this Charter shall prejudice the strict rights of that party or be construed as a
waiver thereof nor shall any single or partial exercise of any right of either Party preclude any other or further exercise thereof.
|
42.2 |
No right or remedy conferred upon either Party by this Charter shall be exclusive of any other right or remedy provided for herein or by law and all such rights and remedies shall be
cumulative.
|
43. |
MORTGAGE AND ASSIGNMENT
|
43.1 |
At all times during the term of this Charter, the Owners and the other Creditor Parties shall have the right to create a mortgage or as the case may be, mortgages, over the Vessel in
favour of any lender, bank or financial institution, or agent or trustee or an Affiliate of the Owners (the Mortgagee) and to assign all the rights, title, interests and benefit in and to this
Charter, the other Transaction Documents, the Insurances, the
|
43.2 |
The Charterers agree with the Owners to:
|
|
(a) |
cooperate with the Owners to execute or enter into any such documents as the Owners' financiers may reasonably require under and in connection with the financing and/or refinancing of the
Vessel;
|
|
(b) |
acknowledge and agree to be bound by and if required, to ensure that any other applicable charterers consent and agree to be bound by, the notice of any assignment of this Charter, the
other Transaction Documents and/or all or any Security Interest under the Security Documents executed in favour of the Mortgagee in the manner as required by the Mortgagee; and
|
|
(c) |
comply, and provide such information and documents to enable the Owners to comply, with all such instructions or directions in regard to the employment, insurances, operation, repairs and
maintenance of the Vessel as reasonably laid down in the Financial Instruments or as may be reasonably directed from time to time during the currency of this Charter by the mortgage(s) in conformity with the Financial Instruments.
|
44. |
NOTICES
|
44.1 |
Any communication to be made under or in connection with the Transaction Documents shall be made in writing and, unless otherwise stated, may be given in person, by post, fax or email.
|
44.2 |
Except as otherwise provided for in this Charter, all notices or other communications under or in respect of the Transaction Documents shall be in writing and shall be made or given to
such party at the address, facsimile number or email address appearing below (or at such other address, facsimile number or email address as such party may hereafter specify for such purposes to the other by notice in writing):
|
|
(a) |
in the case of the Owners:
|
Address:
|
c/o Oriental Fleet International Company Limited
50/F, COSCO Tower 183 Queen's Road Central Hong Kong |
|
Attention:
|
Belinda Lou / Thomas Xing / Xu Ying
|
|
Email:
|
lou.can@coscoshipping.com /
thomas.xing@ofi.com.hk / asset@coscoshipping.com |
|
Fax:
|
+852 2339 1881
|
|
(b) |
to the Charterers:
|
Address:
|
c/o 1, Vas. Sofias & Meg.
Alexandrou Str. 15124, Maroussi Athens, Greece |
|
Attention:
|
Andreas Louka
|
|
Email:
|
louka@loukapartners.com
|
|
Fax:
|
+30 2108128320
|
44.3 |
Any communication or document made or delivered by each Party to the other Party under or in connection with the Transaction Documents will only be effective:
|
|
(a) |
if by way of fax, when received in legible form;
|
|
(b) |
if by way of letter, when it has been left at the relevant address to which it has been posted with postage prepaid in an envelope addressed to the relevant party at that address, and, if
a particular department or officer is specified as part of its address details provided under Clause 44.2, if addressed to that department or officer; or
|
|
(c) |
if by way of email, only when received in a legible form by the email address of the person to whom the communication is made.
|
44.4 |
All communications and documents delivered pursuant to or otherwise relating to this Charter shall be in English.
|
45. |
TERMINATION EVENTS
|
|
(a) |
the Charterers or any other Security Party fails to make any payment on its due date under a Transaction Document to which it is a party unless such failure to pay is remedied within a
period of three (3) Business Days of such payment becoming due and payable; or
|
|
(b) |
the Charterers fail to obtain and/or maintain the Insurances required under Clause 39 in accordance with the provisions thereof or any insurer in respect
|
|
(c) |
the Guarantor fails to comply with the financial covenants under clause 14 of schedule 2 to the Guarantee unless such financial covenants are complied with within thirty (30) days of such
failure to comply (as evidenced by the financial statements of the Guarantor as of the date of such remedy and a Compliance Certificate delivered by the Guarantor setting out (in reasonable detail) computations as to compliance with
clause 14 of schedule 2 to the Guarantee as at the date at which those financial statements were drawn up); or
|
|
(d) |
the Charterers or any other Security Party commits any other breach of, or omits to observe or perform, any of their other obligations or undertakings in this Charter or any other
Transaction Document (other than a breach referred to in paragraph (a), (b) or (c) above or paragraph (q) below) unless such breach or omission is, in the opinion of the Owners, remediable and the Charterers and/or the relevant Security
Party shall remedy such breach or omission within ten (10) Business Days of notice thereof from the Owners; or
|
|
(e) |
any representation or warranty or statement made or deemed to be made by the Charterers or any Security Party in or pursuant to any Transaction Document to which it is a party or in any
document or certificate furnished to the Owners and the Security Trustee in connection herewith or if applicable, in the case of the Charterers only, the Certificate of Delivery and Acceptance, proves to be incorrect or misleading in any
material respect when it is made or deemed made; or
|
|
(f) |
any of the following occurs in relation to any Financial Indebtedness of the Charterers or any other Security Party:
|
|
(i) |
any Financial Indebtedness of the Charterers or any other Security Party is not paid when due nor within any originally applicable grace period; or
|
|
(ii) |
any Financial Indebtedness of the Charterers or any other Security Party is declared to be or otherwise becomes due and payable, prior to its specified maturity date as a result of any
event of default (howsoever described); or
|
|
(iii) |
any commitment for any Financial Indebtedness of the Charterers or any other Security Party is cancelled or suspended by a creditor of the Charterers or any other Security Party (as the
case may be) as a result of an event of default (however described); or
|
|
(iv) |
any creditor of the Charterers or any other Security Party becomes entitled to declare any Financial Indebtedness of the Charterers or any other Security Party (as the case may be) due and
payable prior to its specified maturity as a result of an event of default (howsoever defined),
|
|
(g) |
any of the following events (or any analogous procedure or step is taken in any jurisdiction) occurs in relation to the Charterers or any other Security Party:
|
|
(i) |
the Charterers or any other Security Party are or are reasonably presumed or deemed to be unable or admits inability to pay their debts as they fall due, suspends making payments on any of
their debts or, by reason of actual or anticipated financial difficulties, commences negotiations with one or more of their creditors with a view to rescheduling any of their indebtedness; or
|
|
(ii) |
the value of their assets is less than their liabilities (taking into account contingent and prospective liabilities);
|
|
(iii) |
a moratorium is declared in respect of any indebtedness of the Charterers or any other Security Party;
|
|
(iv) |
the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration, provisional supervision or reorganisation (by way of voluntary arrangement, scheme of
arrangement or otherwise) of the Charterers or any other Security Party;
|
|
(v) |
a composition or arrangement with any creditor of the Charterers or any other Security Party, or any assignment for the benefit of creditors generally of the Charterers or any other
Security Party or a class of such creditors;
|
|
(vi) |
the appointment of a liquidator, receiver, administrator, administrative receiver, compulsory manager, provisional supervisor or other similar officer in respect of the Charterers or any
other Security Party or any of its assets; or
|
|
(vii) |
enforcement of any Security over any assets of the Charterers or any other Security Party; or
|
|
(viii) |
any expropriation, attachment, sequestration, distress or execution (or any analogous process in any jurisdiction) affects any asset or assets of the Charterers or any other Security Party
which has or, in the opinion of the Owners, is likely to have a Material Adverse Effect; or
|
|
(h) |
the Charterers or any other Security Party suspends or ceases or threatens to suspend or cease carrying on all or a material part of their business; or
|
|
(i) |
any consent, approval, Authorisation, license or permit necessary to enable the Charterers to operate or charter the Vessel or the Charterers to sell the Vessel or to enable them to comply
with any provision of this Charter or the MOA, as
|
|
(j) |
any event or circumstance occurs which has or, in the reasonable opinion of the Owners, is likely to have, a Material Adverse Effect; or
|
|
(k) |
this Charter or any other Transaction Document or any Security Interest created by a Transaction Document:
|
|
(i) |
is cancelled, terminated, rescinded or suspended or otherwise ceases to remain in full force and effect for any reason or no longer constitutes legal, valid, binding and enforceable
obligations of any party to that document for any reason whatsoever; or
|
|
(ii) |
is amended or varied without the prior written consent of the Owners and the Security Trustee, except for any amendment or variation which is expressly permitted by this Charter or any
other relevant Transaction Document; or
|
|
(l) |
a Security Party rescinds or purports to rescind or repudiates or purports to repudiate a Transaction Document to which it is a party or any other party of any of those Transaction
Documents evidences an intention to repudiate or rescind any of those Transaction Documents; or
|
|
(m) |
it is or has become unlawful for the Charterers or any other Security Party to perform any of their obligations under the Transaction Documents to which they are a party or any Security
Interest created or expressed to be created or evidenced by the Security Documents to which they are a party ceases to be effective with the ranking and priority it is expressed to have; or
|
|
(n) |
the Vessel is not delivered latest by the Cancelling Date; or
|
|
(o) |
the occurrence of a Change of Control; or
|
|
(p) |
the occurrence of any of the following events:
|
|
(i) |
a default under the MOA which is not waived by the Owners; or
|
|
(ii) |
a default or termination event or the equivalent under any Collateral Transaction Documents which is not waived by the relevant Collateral Owner; or
|
|
(q) |
in the event that a shortfall occurs in the Market Value of the Vessel together with the security value of any additional cash deposit or other security provided as required under Clause
47.1(n), the Charterers have not:
|
|
(i) |
provided or procured the provision of additional cash deposit or other security in a form and in an amount acceptable to the Owners; or
|
|
(ii) |
prepaid so much of the Charterhire Principal to cover such shortfall, within thirty (30) days in accordance with Clause 47.1(n).
|
46. |
REPRESENTATIONS AND WARRANTIES
|
|
(a) |
each Security Party is a limited liability company duly incorporated and validly existing and, where applicable, in good standing under the laws of its jurisdiction of incorporation,
organisation or formation (as the case may be) with power to own its assets, carry on its business as it is being conducted, enter into the Transaction Documents and to exercise its rights and perform its obligations under the Transaction
Documents and all corporate and other action required to authorise its execution of the Transaction Documents and its performance of its obligations thereunder have been duly taken;
|
|
(b) |
(i) the obligations expressed to be assumed by each Security Party in the Transaction Documents to it is a party constitute, subject to the Legal Reservations, its legal and valid
obligations, binding on it in accordance with the terms of the Transaction Documents and no limit on any of its powers will be exceeded as a result of the sale, leasing, borrowings, granting of security or giving of guarantees
contemplated by the Transaction Documents or the performance by it of any of its obligations thereunder; and
|
|
(ii) |
without limiting the generality of paragraph (b)(i) above, subject to the Security Perfection Requirements, each Security Document to which each Security Party is a party creates the
Security Interests which it purports to create and such Security Interests are valid and effective;
|
|
(c) |
the execution of the Transaction Documents by each Security Party and its exercise of its rights and performance of its obligations under any of such Transaction Documents do not
constitute and will not result in any breach of or conflict with, any agreement or treaty to which it is a party;
|
|
(d) |
all Authorisations, consents, approvals, resolutions, licences, exemptions, filings, notarisations or registrations required of each of the Charterers and the other Security Parties:
|
|
(i) |
to enable them lawfully to enter into, exercise its rights and comply with its obligations in the Transaction Documents to which they are respectively a party;
|
|
(ii) |
to make the Transaction Documents to which they are respectively a party admissible in evidence in its Relevant Jurisdictions;
|
|
(iii) |
for them to carry on its business, and which are material; and
|
|
(iv) |
to enable them to create the Security Interest to be created by them under any Security Document to which they are respectively a party
|
|
(e) |
the execution, delivery, and performance of the Transaction Documents to which each Security Party is or shall be a party will not, in each case: (i) violate any law, governmental rule,
regulation, order, judgment, award or decree which is binding upon it or any of its assets; (ii) contravene any provision of its constitutional documents; (iii) contravene or result in the breach of any agreement to which such Security
Party is a party or by which it or any of its assets or revenues is bound, and (iv) constitute a default under any agreement to which such Security Party is a party or by which it or any of its assets or revenues are bound;
|
|
(f) |
no third party has any Security Interest, other than the Permitted Security Interests, or any other interest, right or claim over, in or in relation to the Vessel, this Charter or any
moneys payable hereunder and/or any of the other Transaction Documents;
|
|
(g) |
except as specifically referred to in any Legal Opinion, all payments which a Security Party is liable to make under any Transaction Document to which such Security Party is a party may be
made by such party without deduction or withholding for or on account of any tax payable under the laws of each Relevant Jurisdiction of such Security Party;
|
|
(h) |
no legal or administrative action of any kind whatsoever involving a Security Party which has or, in the opinion of the Owners, is likely to have a Material Adverse Effect has been
commenced or taken;
|
|
(i) |
each Security Party has paid all taxes applicable to, or imposed on or in relation to it, its business or if applicable, the Vessel, except for those being contested in good faith with
adequate reserves;
|
|
(j) |
subject to the Legal Reservations:
|
|
(i) |
the choice of governing law as stated in each Transaction Document to which a Security Party is party to and the agreement by such party to refer disputes to the relevant courts or
tribunal as stated in such Transaction Document will be recognised and enforced in the Relevant Jurisdictions of such Security Party; and
|
|
(ii) |
any arbitral award, ruling or judgment obtained in the Relevant Jurisdictions of such Security Party in relation to such Transaction Documents will be recognised and enforced in the
Relevant Jurisdictions of such Security Party;
|
|
(k) |
no Security Party nor any of their assets are entitled to immunity on the grounds of sovereignty or otherwise from any legal action or proceeding
|
|
(l) |
the obligations of each Security Party under each Transaction Document to which it is a party, are the direct, general and unconditional obligations of such Security Party and rank at
least pari passu with all other present and future unsecured and unsubordinated creditors of such Security Party save for any obligation which is mandatorily preferred by law and not by virtue of
any contract;
|
|
(m) |
no Security Party (other than the Guarantor) is a US Tax Obligor or registered as a non-Hong Kong company under Companies Ordinance (Cap. 622 of the Laws of Hong Kong), and none of them
have established a place of business in England or the US;
|
|
(n) |
no Security Party is a Restricted Person;
|
|
(o) |
each Security Party is in compliance with all Sanctions laws, and none of them have been or are currently being investigated on compliance with Sanctions, they have received notice or are
not aware of any claim, action, suit or proceeding against any of them with respect to Sanctions and they have not taken any action to evade the application of Sanctions;
|
|
(p) |
neither the Charterers nor any other Security Party is insolvent or in liquidation or administration or subject to any other formal or informal insolvency procedure, and no receiver,
administrative receiver, administrator, liquidator, trustee or analogous officer has been appointed in respect of the Charterers or any other Security Party or all or material part of their assets;
|
|
(q) |
no Termination Event is continuing or might reasonably be expected to result from the entry into and performance of this Charter or any other Transaction Document;
|
|
(r) |
subject to any qualification (if applicable) set out in such information, any information provided by the Charterers (or on their behalf) to the Owners and the other Creditor Parties was
true and accurate in all material respects as at the date it was provided or as the date at which such information was stated;
|
|
(s) |
(i) the financial statements of the Guarantor most recently supplied to the Owners (which, at the date of this Charter, are its Original Financial Statements) were prepared in accordance
with GAAP consistently applied save to the extent expressly disclosed in such financial statements;
|
|
(ii) |
the financial statements of the Guarantor most recently supplied to the Owners (which, at the date of this Charter, are its Original Financial Statements) give a true and fair view of (if
audited) or fairly and represent (if unaudited) their consolidated financial condition and operations for the period to which they relate, save to the extent expressly disclosed in such financial statements; and
|
|
(iii) |
there has been no material adverse change in the business or consolidated financial condition of the Group since the date of the Guarantor's Original Financial Statements;
|
|
(t) |
the Charterers are a wholly-owned Subsidiary of the Guarantor, which is ultimately controlled by the Substantial Shareholder;
|
|
(u) |
no litigation, arbitration or administrative proceedings of or before any court, arbitral body or agency (which, if adversely determined, would have a Material Adverse Effect on any
Security Party) have been started or (to the best of the knowledge and belief of such Security Party) threatened against it;
|
|
(v) |
no judgment or order of a court, arbitral body or agency which might reasonably be expected to have a Material Adverse Effect has been made against any Security Party; and
|
|
(w) |
each Security Party has complied with all anti-money laundering legislation (to the extent applicable to it) that is relevant in the context of the transactions contemplated by the
Transaction Documents to which it is a party.
|
47. |
CHARTERERS' UNDERTAKINGS
|
47.1 |
General Covenants
|
|
(a) |
they will keep the Vessel registered in the name of the Owners under the laws and flag of the Republic of the Marshall Islands, and shall not do or permit to be done anything, or omit to
do anything which could or might result in:
|
|
(i) |
such registration being forfeited or imperilled; or
|
|
(ii) |
the Vessel being required to be registered under any other law or flag
|
|
(b) |
they will provide or will procure that each Security Party provides, the Owners with details of any legal or administrative action involving such Security Party or the Vessel or any
detention or arrest of the Vessel or any damage to or alteration of the Vessel in excess of the Major Casualty amount as soon as such action is instituted or it becomes apparent to such Security Party that it is likely to be instituted
and is likely to have a Material Adverse Effect on the ability of a Security Party to perform their obligations under each Transaction Document to which it is a party;
|
|
(c) |
they will, and will procure that each other Security Party will obtain and promptly renew or procure the obtainment or renewal of and provide copies of, from time to time, any necessary
consents, approvals, Authorisations,
|
|
(d) |
they will not, and will procure that each other Security Party will not, create, assume or permit to exist any Security Interest of any kind upon any Transaction Document to which such
Security Party is a party, and if applicable, the Vessel, in each case other than Permitted Security Interests;
|
|
(e) |
they will at their own cost, and will procure that each other Security Party will:
|
|
(i) |
do all that such Security Party can to ensure that any Transaction Document to which such Security Party is a party validly creates the obligations and the Security Interests which
Security Party purports to create; and
|
|
(ii) |
without limiting the generality of paragraph (i) above, where necessary promptly register, file, record or enrol any Transaction Document to which such Security Party is a party with any
court or authority in all Relevant Jurisdictions of such Security Party, pay any stamp, registration or similar tax in all Relevant Jurisdictions of such Security Party in respect of any Transaction Document to which such Security Party
is a party, give any notice or take any other step which, is or has become necessary or desirable for any such Transaction Document to be valid, enforceable or admissible in evidence or to ensure or protect the priority of any Security
Interest which such Security Party creates;
|
|
(f) |
they will, and will procure that each other Security Party will:
|
|
(i) |
notify the Owners as soon as it becomes aware of the occurrence of (A) any Termination Event and (B) any other matters which might lead to an occurrence of any Termination Event; and
|
|
(ii) |
notify the Owners of any steps or action which they are, or such Security Party is, taking, or considering taking, to remedy or mitigate the effect of such occurrence,
|
|
(g) |
they will, and will procure that each other Security Party will, as soon as practicable after receiving the request, provide the Owners with any additional financial or other information
relating:
|
|
(i) |
to themselves and/or the Vessel (including, but not limited to the condition and location of the Vessel); or
|
|
(ii) |
to any other matter relevant to, or to any provision of any Transaction Document to which it is a party;
|
|
(h) |
they will provide the Owners with all such information as the Owners shall require regarding employment of the Vessel (including cargo, voyage details such as duration, loading port and
discharge port) every three (3) months throughout the Charter Period, and engagements, particulars of all towages and salvages of the Vessel, and copies of all charters and other contracts of her employment or otherwise howsoever
concerning her;
|
|
(i) |
without prejudice to Clause 47, comply, or procure compliance, and will procure that each other Security Party and any Approved Manager of the Vessel will comply or procure compliance,
with all laws or regulations relating to the Vessel and its ownership, employment, operation, management and registration, including the ISM Code, the ISPS Code, all Environmental Laws and the laws of the Vessel's registry;
|
|
(j) |
the Vessel shall be classed and maintained in the highest class with the Classification Society upon Delivery and shall be free of all overdue recommendations and requirements and they
shall promptly provide class records and inspection reports of the Vessel to the Owners;
|
|
(k) |
neither the Charterers nor any other Security Party shall enter or be permitted to enter, into any form of merger, sub-division, amalgamation or other reorganisation or change of
ownership;
|
|
(l) |
(i) they shall permit the Owners (at the expense of the Charterers) by surveyors or other persons appointed by them for such purpose to board the Vessel no more than once per calendar year
during the Charter Period or, following the occurrence of a Termination Event which is continuing, at all reasonable times for the purpose of inspecting her, provided that, unless a Termination Event has occurred and is continuing, such
inspection shall not unduly disrupt or interfere with the normal daily operations of the Vessel;
|
|
(ii) |
they shall provide all proper facilities for such inspections; and
|
|
(iii) |
they shall give the Owners reasonable advance notice of any intended drydocking of the Vessel (whether for the purpose of classification, survey or otherwise);
|
|
(m) |
(i) they will ensure that the Market Value of the Vessel shall be tested once every twelve (12) months commencing from the Commencement Date in the absence of a Termination Event, and upon
the occurrence
|
|
(ii) |
in the event of the failure or delay of the Charterers to arrange such testing of the Market Value of the Vessel, the Owners shall have the liberty to arrange such testing at such time as
the Owners shall require; and
|
|
(iii) |
they shall pay the amount of the fees and expenses of an Approved Valuer incurred for all such valuations and all legal and other expenses reasonably incurred by the Owners in connection
with any matter arising out of this Clause;
|
|
(n) |
they will ensure that the Market Value of the Vessel shall at all times be equal to or greater than one hundred and twenty per cent. (120%) of the Charterhire Principal, however, if the
Owners notify the Charterers that the Market Value of the Vessel has fallen below one hundred and twenty per cent. (120%) of the Charterhire Principal, the Charterers shall, unless otherwise agreed by the Owners, within thirty (30) days
of the Owners' receipt of the relevant valuation of the Vessel, provide additional cash deposit or other security in a form and in an amount acceptable to the Owners or prepay the Charterhire Principal to cover the shortfall. Any amount
prepaid pursuant to this Clause 47.1(n) shall be applied towards reducing the instalments of Fixed Charterhire (for the avoidance of doubt, excluding the Balloon Payment) falling on or after the date of such prepayment by the amount of
such prepayment on a pro-rata basis;
|
|
(o) |
they will notify the Owners promptly of:
|
|
(i) |
any Environmental Claim made against the Charterers in connection with the Vessel, or any Environmental Incident, arrest or detention of the Vessel, any exercise or purported exercise of
any lien on the Vessel or its Earnings or any requisition of the Vessel for hire; and
|
|
(ii) |
any casualty or occurrence as a result of which the Vessel has become or is, by the passing of time or otherwise, likely to become, a Major Casualty;
|
|
(p) |
(i) they shall not permit any chartering of the Vessel on a time charter basis of one (1) calendar year or more unless the Charterers shall have provided the Owners with prior written
notice of such chartering together with detailed information about the intended Sub-Charterer, the proposed terms of the intended Sub-Charter and such further information as the Owners may reasonably request; and
|
|
(ii) |
except with the prior written consent of the Owners (and then only subject to such terms as the Owners may impose), they shall not let the Vessel:
|
|
(A) |
on demise charter for any period;
|
|
(B) |
on terms whereby more than two (2) months' hire (or the equivalent) is payable in advance; or
|
|
(C) |
on any terms other than arms' length terms;
|
|
(q) |
they shall comply, and shall procure that each other Security Party complies, with:
|
|
(i) |
all applicable laws to which it may be subject (including, but not limited to, Business Ethics Laws, anti-bribery and corruption laws and anti-money lending laws); and
|
|
(ii) |
all laws and regulations in respect of Sanctions, and in particular, they shall effect and maintain a sanctions compliance policy to ensure compliance with all such laws and regulations
implemented from time to time;
|
|
(r) |
the Vessel shall not be employed, operated or managed in any manner which (i) is contrary to any Sanctions and in particular, the Vessel shall not be used by or for the benefit for any
party which is a target of Sanctions, or trade to any Restricted Country; or (ii) would trigger the operation of any sanctions limitation or exclusion clause in any insurance documentation;
|
|
(s) |
they will, and will procure that each other Security Party will, promptly notify the Owners and provide all information in relation to its business and operations which may be relevant for
the purposes of ascertaining whether they are in compliance with all laws and regulations relating to Sanctions, and in particular, they shall notify the Owners in writing immediately upon being aware that any of its shareholders or
directors, officers of employees is a Restricted Person or has otherwise become a target of Sanctions;
|
|
(t) |
they shall not appoint or permit to be appointed any manager of the Vessel unless it is an Approved Manager appointed on terms acceptable to the Owners and their financiers (if any) and
such Approved Manager has (prior to accepting its appointment) entered into a Manager's Undertaking;
|
|
(u) |
they shall notify the Owners in writing as soon as they become aware that the Charterers are likely to, or will receive, any tax credit in relation to any payments made by any
Sub-Charterer to it;
|
|
(v) |
save with the prior written consent of the Owners, they shall ensure that no Change of Control occurs;
|
|
(w) |
they shall, at their own expense, replace, renew or substitute any equipment of the Vessel as shall be so damaged or worn as to be unfit for use. Title to any part replaced, renewed or
substituted shall remain with the Owners;
|
|
(x) |
save with the prior written consent of the Owners, there shall not be any transfer or disposal of:
|
|
(i) |
the legal or beneficial shareholding of the Charterers; or
|
|
(ii) |
the legal or beneficial shareholding of the Guarantor,
|
|
(y) |
they shall not create, incur, assume, suffer to exist or in any manner become or remain liable for any Financial Indebtedness, other than:
|
|
(i) |
Financial Indebtedness normally associated with the day to day operation of the Vessel, or otherwise in the normal course of business;
|
|
(ii) |
Financial Indebtedness under the Transaction Documents; and
|
|
(iii) |
Financial Indebtedness, including:
|
|
(A) |
all shareholder's and intercompany loans, which by its terms is subordinate and subject in right of payment to the prior payment in full of the Financial Indebtedness under or pursuant to
the Transaction Documents, as provided in paragraph (z) below;
|
|
(B) |
all shareholder's and intercompany advances, which upon occurrence of a Termination Event which is continuing, shall be subordinated and subject in right of payment to the prior payment in
full of the Financial Indebtedness under or pursuant to the Transaction Documents, as provided in paragraph (aa) below,
|
|
(z) |
they acknowledge to and undertake with the Owners that all shareholder's and intercompany loans from time to time made by the Guarantor or any other member of the Group to the Charterers:
|
|
(i) |
are and shall be subordinated in all respects to all amounts owing and which may in future become owing by the Charterers under this Charter and the other Transaction Documents;
|
|
(ii) |
shall not be repaid or be subject to payment of interest (although interest may accrue);
|
|
(iii) |
are and shall remain unsecured by any Security Interest over the whole or any part of the assets of the Charterers; and
|
|
(iv) |
are not and shall not be capable of becoming subject to any right of set-off or counterclaim;
|
|
(aa) |
they acknowledge to and undertake with the Owners that all shareholder's and intercompany advances from time to time made by the Guarantor or any other member of the Group to the
Charterers:
|
|
(i) |
shall be non-interest bearing;
|
|
(ii) |
are and shall remain unsecured by any Security Interest over the whole or any part of the assets of the Charterers;
|
|
(iii) |
are not and shall not be capable of becoming subject to any right of set-off or counterclaim; and
|
|
(iv) |
upon occurrence of a Termination Event which is continuing:
|
|
(A) |
shall not be repaid; and
|
|
(B) |
shall be subordinated in all respects to all amounts owing and which may in future become owing by the Charterers under this Charter and the other Transaction Documents;
|
|
(bb) |
they shall not declare or pay any dividends unless no Termination Event has occurred or will occur as a result of such declaration or payment;
|
|
(cc) |
they shall, and shall procure that each other Security Parties will, ensure that all the Security Perfection Requirements have been or will be done or obtained (as the case may be) no
later than the latest date permitted by applicable law and in any event by such date as the Owners and the Security Trustee may specify;
|
|
(dd) |
they shall, and shall procure that each other Security Parties will, conduct their respective business in compliance with applicable anti-corruption laws; and
|
|
(ee) |
they shall provide the documents and evidence specified in Clause 35.2 in form and substance satisfactory to the Owners as soon as the same become available, but in any event before the
relevant date as specified in Parts C and D of Addendum No.1.
|
48. |
PURCHASE OPTION
|
48.1 |
Subject to Clause 48.2
|
48.2 |
Subject to the other terms and conditions of this Charter, the Purchase Option shall only be exercisable by the Charterers on or after the third (3rd) anniversary date of the Commencement
Date provided that no Termination Event has occurred and is continuing.
|
48.3 |
The Purchase Option may be exercised by the Charterers by giving the Owners at least ninety (90) days' prior written notice of their intention to exercise the Purchase Option such that the
Purchase Option Notice shall accordingly be given to the Owners no later than the date falling ninety (90) days' prior to the intended Purchase Option Date (unless otherwise agreed by the Owners in their absolute discretion).
|
48.4 |
The Purchase Option Price shall be the aggregate of (but in each case, not double-counting):
|
|
(a) |
any Charterhire due and payable on the Purchase Option Date and any default interest payable under Clause 37.12;
|
|
(b) |
if the Purchase Option Date is a Payment Date, the Charterhire Principal corresponding to that Payment Date in Schedule 2, or if the Purchase Option Date is not a Payment Date, all
Charterhire Principal corresponding to the Payment Date in Schedule 2 immediately preceding the Purchase Option Date (in each case, the Relevant Charterhire Principal);
|
|
(c) |
if the Purchase Option Date is not a Payment Date, any Breakfunding Costs;
|
|
(d) |
all costs (including, but not limited to, legal costs) and expenses reasonably incurred by the Owners under this Charter and the other Transaction Documents in connection with or as a
result of the exercise of the Purchase Option by the Charterers; and
|
|
(e) |
an early termination fee calculated at the following percentage of the Relevant Charterhire Principal:
|
If the Purchase Option Date occurs after the following anniversary of the Commencement Date
|
Percentage of Relevant Charterhire Principal
|
After 3rd anniversary
|
2%
|
After 4th anniversary
|
1.5%
|
After 5th anniversary
|
1%
|
After 6th anniversary
|
0.5%
|
After 7th anniversary
|
0%
|
48.5 |
(a) The Purchase Option Notice shall be signed by a duly authorised officer or attorney of the Charterers and shall contain the following information:
|
|
(i) |
the Purchase Option Date; and
|
|
(ii) |
the Relevant Charterhire Principal portion of the Purchase Option Price payable on the Purchase Option Date as determined in accordance with Clause 48.4(b).
|
|
(b) |
Upon receipt of a duly signed and completed Purchase Option Notice in accordance with Clause 48.5(a), the Owners shall notify the Charterers of the Purchase Option Price in writing as soon
as practicable.
|
48.6 |
The Charterers may serve a Purchase Option Notice throughout the duration of the Charter Period and is irrevocable once given.
|
48.7 |
Upon the exercise of the Purchase Option, the Owners and the Charterers shall thereupon perform their respective obligations referred to in Clause 50 and the
|
49. |
PURCHASE OBLIGATION
|
50. |
SALE OF THE VESSEL BY PURCHASE OPTION AND PURCHASE OBLIGATION
|
|
(a) |
Completion of the exercise of the Purchase Option or the performance of the Purchase Obligation (as the case may be) shall take place on the Relevant Date whereupon the Owners will sell to
the Charterers (or their nominee), and the Charterers (or their nominee) will purchase from the Owners, all the legal and beneficial interest and title in the Vessel, for the Relevant Price on an "as is where is" basis and on the
following terms and conditions:
|
|
(i) |
the Charterers expressly agree and acknowledge that, no condition, warranty or representation of any kind is or has been given by or on behalf of the Owners in respect of the Vessel or any
part thereof, and accordingly the Charterers confirm that that they have not, in entering into this Charter, relied on any condition, warranty or representation by the Owners or any person on the Owners' behalf, express or implied,
whether arising by law or otherwise in relation to the Vessel or any part thereof, including, without limitation, warranties or representations as to the description, suitability, quality, merchantability, fitness for any purpose, value,
state, condition, appearance, safety, durability, design or operation of any kind or nature of the Vessel or any part thereof, and the benefit of any such condition, warranty or representation by the Owners is hereby irrevocably and
unconditionally waived by the Charterers to the extend permissible under applicable law, the Charterers hereby also waives any rights which they may have in tort in respect of any the matters referred to above and irrevocably agree that
the Owners shall have no greater liability in tort in respect of any such matter than they would have in contract after taking account of all of the foregoing exclusions. No third parties making any representation or warranty relating to
the Vessel or any part thereof are the agents of the Owners nor has any such third party authority to bind the Owners thereby. Notwithstanding anything contained above, nothing contained herein is intended to obviate, remove or waive any
rights or warranty or other claims relating thereto which the Charterers (or their nominee) or the Owners
|
|
(ii) |
the Vessel shall, on completion of sale, be free from any registered mortgages incurred by the Owners (where any mortgages, liens, Security Interests and debts arising out of or in
connection with this Charter or the other Transaction Documents shall be released prior to (or simultaneously with) the transfer and/or release of the Relevant Price by the Charterers (as buyers) to the Owners (as sellers));
|
|
(iii) |
the Relevant Price shall be paid by (or on behalf of) the Charterers to the Owners on the Relevant Date together with unpaid amounts of Charterhire but only up to and including the
Relevant Date, and other moneys owing by or accrued or due from the Charterers under this Charter on or prior to such Relevant Date which remain unpaid; and
|
|
(iv) |
upon the Relevant Price together with the other moneys described under paragraph (iii) above being fully and irrevocably paid to the Owners on, and in accordance with, the terms set forth
in this Charter, the Owners agree (at the cost of the Charterers) to enter into (A) a bill of sale, (B) a commercial invoice, (C) a protocol of delivery and acceptance and (D) such other additional documents as may be necessary for the
purpose of registering the Vessel at its intended flag state upon such transfer, provided that the Charterers shall notify the Owners of any such additional documents no later than five (5) Business Days (or such other mutually agreed
date) prior to such transfer, each in such form as may be required by the Charterers' intended flag state.
|
|
(b) |
For the purposes of this Clause 50:
|
|
(i) |
Relevant Date means:
|
|
(A) |
in relation to the exercise of the Purchase Option, the Purchase Option Date; and
|
|
(B) |
in relation to the performance of the Purchase Obligation, the Purchase Obligation Date.
|
|
(ii) |
Relevant Price means:
|
|
(A) |
in relation to the exercise of the Purchase Option, the Purchase Option Price; and
|
|
(B) |
in relation to the performance of the Purchase Obligation, the Purchase Obligation Price.
|
51. |
NO SET-OFF OR TAX DEDUCTION; FATCA PROVISIONS
|
51.1 |
General
|
|
(a) |
All Charterhire and any payment made from the Charterers to enable the Owners to pay all amounts under a Transaction Document shall be paid punctually:
|
|
(i) |
without any form of set-off, cross-claim or condition and in the case of Charterhire, without previous demand; and
|
|
(ii) |
free and clear of any tax deduction or withholding unless required by law.
|
|
(b) |
Without prejudice to Clause 51.1
|
|
(i) |
the Owners shall notify the Charterers as soon as they become aware of the requirement; and
|
|
(ii) |
the amount due in respect of the payment shall be increased by the amount necessary to ensure that the Owners receive and retain (free from any liability relating to the tax deduction) a
net amount which, after the tax deduction, is equal to the full amount which they would otherwise have received.
|
|
(c) |
In this Charter, tax deduction means any deduction or withholding for or on account of any present or future tax, other than a FATCA Deduction.
|
51.2 |
FATCA provisions
|
51.2.1 |
FATCA Information
|
|
(a) |
Subject to paragraph (c) below, each Relevant Party shall, within ten (10) Business Days of a reasonable request by another Relevant Party:
|
|
(i) |
confirm to that other Relevant Party whether it is:
|
|
(A) |
a FATCA Exempt Party; or
|
|
(B) |
not a FATCA Exempt Party;
|
|
(ii) |
supply to that other Relevant Party (with a copy to all other Relevant Parties) such forms, documentation and other information relating to its status under FATCA as that other Relevant
Party reasonably requests for the purpose of that other Relevant Party's compliance with FATCA; and
|
|
(iii) |
supply to that other Relevant Party such forms, documentation and other information relating to its status as that other Party reasonably requests for the purposes of that other Relevant
Party's compliance with any other law, regulation, or exchange of information regime.
|
|
(b) |
If a Relevant Party confirms to another Relevant Party under 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 Relevant Party shall so notify all other Relevant Parties reasonably promptly.
|
|
(c) |
Paragraph (a) above shall not oblige any Relevant Party to do anything, and paragraph (a)(iii) above shall not oblige any other Relevant Party to do anything, which would or might in its
reasonable opinion constitute a breach of:
|
|
(i) |
any law or regulation;
|
|
(ii) |
any fiduciary duty; or
|
|
(iii) |
any duty of confidentiality.
|
|
(d) |
If a Relevant Party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with paragraph (a)(i) or (ii)
above (including, for the avoidance of doubt, where paragraph (c) above applies), then such Relevant Party shall be treated for the purposes of the Transaction Documents (and payments made under them) as if it is not a FATCA Exempt Party
until such time as the Relevant Party in question provides the requested confirmation, forms, documentation or other information.
|
51.2.2 |
FATCA Deduction and gross up by Security Parties
|
|
(a) |
If a Security Party is required to make a FATCA Deduction, that Security Party shall make that FATCA Deduction and any payment required in connection with that FATCA Deduction within the
time allowed and in the minimum amount required by FATCA.
|
|
(b) |
If a FATCA Deduction is required to be made by a Security Party, the amount of the payment due from that Security Party shall be increased to an amount which (after making any FATCA
Deduction) leaves an amount equal to the payment which would have been due if no FATCA Deduction had been required.
|
|
(c) |
The Charterers shall promptly upon becoming aware that a Security Party must make a FATCA Deduction (or that there is any change in the rate or the basis of a FATCA Deduction) notify the
Owners accordingly.
|
|
(d) |
Within thirty (30) days of making either a FATCA Deduction or any payment required in connection with that FATCA Deduction, the Security Party making that FATCA Deduction or payment shall
deliver to the Owners evidence reasonably satisfactory to the Owners that the FATCA Deduction has been made or (as applicable) any appropriate payment paid to the relevant governmental or taxation authority.
|
51.2.3 |
FATCA Deduction by the Owners
|
51.2.4 |
FATCA Mitigation
|
52. |
INCREASED COSTS
|
52.1 |
This Clause 52.1 applies if the Owners notify the Charterers that they consider that as a result of:
|
|
(a) |
the introduction or alteration after the date of this Charter of a law or an alteration after the date of this Charter in the manner in which a law is interpreted or applied (disregarding
any effect which relates to the application to payments under this Charter of a tax on the Owners' overall net income); or
|
|
(b) |
complying with any regulation (including any which relates to capital adequacy or liquidity controls or which affects the manner in which the Owners allocates capital resources to their
obligations under this Charter) which is introduced, or altered, or the interpretation or application of which is altered, after the date of this Charter,
|
52.2 |
In this Clause 52.1, increased cost means, in relation to the Owners (without any double counting):
|
|
(a) |
an additional or increased cost incurred as a result of, or in connection with, the Owners having entered into, or being a party to, this Charter, of funding the acquisition of the Vessel
pursuant to the MOA or performing their obligations under this Charter;
|
|
(b) |
an additional or increased cost incurred by the financiers of the Owners (if any) as a result of, or in connection with, the financiers of the Owners (if any) having entered into, or being
a party to, the financing arrangements with the Owners and the relevant Financial Instruments in each case relating to the funding of the acquisition of the Vessel pursuant to the MOA;
|
|
(c) |
a reduction in the amount of any payment to the Owners under this Charter or in the effective return which such a payment represents to the Owners or their financiers (if any) on their
capital;
|
|
(d) |
a reduction in the amount of any payment to the financiers of the Owners (if any) under their financing arrangements and relevant Financial Instruments or in the effective return which
such a payment represents to the financiers of the Owners (if any) or on their capital in each case relating to the funding of the acquisition of the Vessel pursuant to the MOA;
|
|
(e) |
any other additional or increased cost of funding or financing the acquisition of the Vessel pursuant to the MOA; and
|
|
(f) |
a liability to make a payment, or a return foregone, which is calculated by reference to any amounts received or receivable by the Owners under this Charter,
|
52.3 |
Subject to the terms of Clause 52.1
|
52.4 |
Clause 53.3 above does not apply to the extent any increased cost is:
|
|
(a) |
attributable to a tax deduction required by law to be made by a Security Party;
|
|
(b) |
attributable to a FATCA Deduction required to be made by a Relevant Party or the Owners;
|
|
(c) |
compensated for by Clause 41.5(b) (or would have been compensated for under Clause 41.5(b) but was not so compensated solely because any of the exclusions in Clause 41.5(b) applied); or
|
|
(d) |
attributable to the wilful breach by the Owners of any law or regulation.
|
53. |
GOVERNING LAW AND JURISDICTION
|
53.1 |
This Charter and any non-contractual obligations arising out of or in connection with it are governed by and shall be construed in accordance with English law and any Dispute arising out
of or in connection with this Charter shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory re-enactment or modification thereof save to the extent necessary to give effect to the
provisions of this Clause.
|
53.2 |
The arbitration reference shall be to three (3) arbitrators:
|
|
(a) |
A Party wishing to refer a Dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other Party requiring the
|
|
(b) |
If the other Party does not appoint its own arbitrator and give notice that it has done so within the fourteen (14) days specified, the Party referring a Dispute to arbitration may,
without the requirement of any further prior notice to the other Party, appoint its arbitrator as sole arbitrator and shall advise the other Party accordingly. The award of a sole arbitrator shall be binding on both Parties as if he/she
had been appointed by agreement.
|
|
(c) |
Where each Party appoints its own arbitrator, then the two (2) arbitrators so appointed may proceed with the arbitration and at any time thereafter appoint a third arbitrator so long as
they do so before any substantive hearing or forthwith in the event that they cannot agree on any matter relating to the arbitration. If the said two arbitrators do not appoint a third within fourteen (14) days of one calling upon the
other to do so, or if they are in disagreement as to the third arbitrator, either arbitrator or a Party shall apply to the London Maritime Arbitrators Association (LMAA) for the appointment of the third arbitrator.
|
|
(d) |
The language used in the arbitration shall be English. The arbitration shall be conducted in accordance with the LMAA Terms current at the time when the arbitration proceedings are
commenced.
|
|
(e) |
Nothing herein shall prevent the Parties agreeing in writing to vary these provisions to provide for the appointment of a sole arbitrator and, if necessary, for the LMAA to exercise its
statutory power to appoint the sole arbitrator if the Parties cannot agree on the appointment.
|
53.3 |
In this Clause 53, proceedings means proceedings of any kind, including an application for a provisional or protective measure and a Dispute means any dispute arising out of or in connection with this Charter (including a dispute relating to the existence, validity or termination of this Charter) or any non-contractual obligation
arising out of or in connection with this Charter.
|
54. |
MISCELLANEOUS
|
54.1 |
The Charterers waive any rights of sovereign immunity which they or any of their properties may enjoy in any jurisdiction and subjects itself to civil and commercial law with respect to
their obligations under this Charter.
|
54.2 |
No term of this Charter is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not Party.
|
54.3 |
This Charter and each Transaction Document may be executed in any number of counterparts and by the different Parties or thereto on separate counterparts, and this has the same effect as
if the signatures on the counterparts were on a single copy of this Charter or that Transaction Document, as the case may be.
|
SIGNED for and on behalf of
|
)
|
||
ORIENTAL FLEET TANKER 13
|
)
|
||
LIMITED
|
)
|
||
(东方富利 TANKER13 有限公司)
|
)
|
||
By , Director
|
)
|
||
in the presence of:
|
)
|
SIGNED for and on behalf of
|
)
|
||
MONTE CARLO ONE SHIPPING
|
)
|
||
COMPANY LIMITED
|
)
|
||
by ,
|
)
|
||
Attorney-in-Fact
|
)
|
||
in the presence of:
|
)
|
Signed by
|
)
|
||
[name of authorised signatory],
|
)
|
||
[title of authorised signatory]
|
)
|
||
duly authorised for and on behalf of
|
)
|
||
ORIENTAL FLEET TANKER 13
|
)
|
||
LIMITED (东方富利 TANKER13
有 )
|
)
|
||
限公司) as Owners
|
)
|
Signed by
|
)
|
||
[name of authorised signatory],
|
)
|
||
[title of authorised signatory]
|
)
|
||
duly authorised for and on behalf of
|
)
|
||
MONTE CARLO ONE SHIPPING
|
)
|
||
COMPANY LIMITED
|
)
|
||
as Charterers
|
)
|
Monthly Period
|
Commencement
Date /
Payment Date)
|
Charterhire
(US$) |
Charterhire Principal
(US$) |
|
Upfront
Charterhire / Balloon Payment |
Fixed
Charterhire (being 1/120 of Financing Principal less Balloon payment) |
Aggregate Outstanding
Fixed Charterhire and Balloon Payment |
||
1st Payment Date
(Commencement
Date)
|
Upfront
Charterhire:
6,100,000
|
152,500
|
24,247,500
|
|
1
|
2nd Payment Date
(the date falling on the 10th day of the month falling immediately after Commencement Date) |
152,500
|
24,095,000
|
|
2
|
3rd Payment Date
(the date falling on the 10th day of the second (2nd) month falling immediately after Commencement Date) |
152,500
|
23,942,500
|
|
3
|
4th Payment Date
(the date falling on the 10th day of the third (3rd) month falling immediately after Commencement Date) |
152,500
|
23,790,000
|
|
4
|
5th Payment Date (the date falling on the 10th day of the fourth (4th) month falling immediately after Commencement
Date)
|
152,500
|
23,637,500
|
|
5
|
6th Payment Date
(the date falling on the 10th day of the fifth (5th) month falling immediately after Commencement Date) |
152,500
|
23,485,000
|
6
|
7th Payment Date
(the date falling on the 10th day of the sixth (6th) month falling immediately after Commencement Date) |
152,500
|
23,332,500
|
|
7
|
8th Payment Date
(the date falling on the 10th day of the seventh (7th) month falling immediately after Commencement Date) |
152,500
|
23,180,000
|
|
8
|
9th Payment Date
(the date falling on the 10th day of the eighth (8th) month falling immediately after Commencement Date) |
152,500
|
23,027,500
|
|
9
|
10th Payment Date
(the date falling on the 10th day of the ninth (9th) month falling immediately after Commencement Date) |
152,500
|
22,875,000
|
|
10
|
11th Payment Date (the date falling on the 10th day of the tenth (10th) month falling immediately after Commencement
Date)
|
152,500
|
22,722,500
|
|
11
|
12th Payment Date
(the date falling on the 10th day of the eleventh (11th) month falling immediately after Commencement Date) |
152,500
|
22,570,000
|
12
|
13th Payment Date
(the date falling on the 10th day of the twelve (12th) month falling immediately after Commencement Date) |
152,500
|
22,417,500
|
|
13
|
14th Payment Date
(the date falling on the 10th day of the thirteenth (13th) month falling immediately after Commencement Date) |
152,500
|
22,265,000
|
|
14
|
15th Payment Date
(the date falling on the 10th day of the fourteenth (14th) month falling immediately after Commencement Date) |
152,500
|
22,112,500
|
|
15
|
16th Payment Date
(the date falling on the 10th day of the fifteenth (15th) month falling immediately after Commencement Date) |
152,500
|
21,960,000
|
|
16
|
17th Payment Date
(the date falling on the 10th day of the sixteenth (16th) month falling immediately after Commencement Date) |
152,500
|
21,807,500
|
|
17
|
18th Payment Date
(the date falling on the 10th day of the seventeenth (17th) month falling immediately after Commencement Date) |
152,500
|
21,655,000
|
24
|
25th Payment Date
(the date falling on the 10th day of the twenty-fourth (24th) month falling immediately after Commencement Date) |
152,500
|
20,587,500
|
|
25
|
26th Payment Date
(the date falling on the 10th day of the twenty-fifth (25th) month falling immediately after Commencement Date) |
152,500
|
20,435,000
|
|
26
|
27th Payment Date
(the date falling on the 10th day of the twenty-sixth (26th) month falling immediately after Commencement Date) |
152,500
|
20,282,500
|
|
27
|
28th Payment Date
(the date falling on the 10th day of the twenty-seventh (27th) month falling immediately after Commencement Date) |
152,500
|
20,130,000
|
|
28
|
29th Payment Date
(the date falling on the 10th day of the twenty-eighth (28th) month falling immediately after Commencement Date) |
152,500
|
19,977,500
|
|
29
|
30th Payment Date
(the date falling on the 10th day of the twenty-ninth (29th) month falling immediately after Commencement Date) |
152,500
|
19,825,000
|
30
|
31st Payment Date
(the date falling on the 10th day of the thirtieth (30th) month falling immediately after Commencement
Date)
|
152,500
|
19,672,500
|
|
31
|
32nd Payment Date
(the date falling on the 10th day of the thirty-first (31st) month falling immediately after Commencement Date) |
152,500
|
19,520,000
|
|
32
|
33rd Payment Date
(the date falling on the 10th day of the thirty-second (32nd) month falling immediately after Commencement Date) |
152,500
|
19,367,500
|
|
33
|
34th Payment Date
(the date falling on the 10th day of the thirty-third (33rd) month falling immediately after Commencement Date) |
152,500
|
19,215,000
|
|
34
|
35th Payment Date
(the date falling on the 10th day of the thirty-fourth (34th) month falling immediately after Commencement Date) |
152,500
|
19,062,500
|
|
35
|
36th Payment Date
(the date falling on the 10th day of the thirty-fifth (35th) month falling immediately after Commencement Date) |
152,500
|
18,910,000
|
36
|
37th Payment Date
(the date falling on the 10th day of the thirty-sixth (36th) month falling immediately after Commencement Date) |
152,500
|
18,757,500
|
|
37
|
38th Payment Date
(the date falling on the 10th day of the thirty-seventh (37th) month falling immediately after Commencement Date) |
152,500
|
18,605,000
|
|
38
|
39th Payment Date (the date falling on the 10th day of the thirty-eighth (38th) month falling immediately after Commencement
Date)
|
152,500
|
18,452,500
|
|
39
|
40th Payment Date
(the date falling on the 10th day of the thirty-ninth (39th) month falling immediately after Commencement Date) |
152,500
|
18,300,000
|
|
40
|
41st Payment Date
(the date falling on the 10th day of the fortieth (40th) month falling immediately after Commencement Date) |
152,500
|
18,147,500
|
|
41
|
42nd Payment Date
(the date falling on the 10th day of the forty-first (41st) month falling immediately after Commencement Date) |
152,500
|
17,995,000
|
42
|
43rd Payment Date
(the date falling on the 10th day of the forty-second (42nd) month falling immediately after Commencement Date) |
152,500
|
17,842,500
|
|
43
|
44th Payment Date
(the date falling on the 10th day of the forty-third (43rd) month falling immediately after Commencement Date) |
152,500
|
17,690,000
|
|
44
|
45th Payment Date
(the date falling on the 10th day of the forty-fourth (44th) month falling immediately after Commencement Date) |
152,500
|
17,537,500
|
|
45
|
46th Payment Date
(the date falling on the 10th day of the forty-fifth (45th) month falling immediately after Commencement Date) |
152,500
|
17,385,000
|
|
46
|
47th Payment Date
(the date falling on the 10th day of the forty-sixth (46th) month falling immediately after Commencement Date) |
152,500
|
17,232,500
|
|
47
|
48th Payment Date
(the date falling on the 10th day of the forty-seventh (47th) month falling immediately after Commencement Date) |
152,500
|
17,080,000
|
48
|
49th Payment Date
(the date falling on the 10th day of the forty-eighth (48th) month falling immediately after Commencement Date) |
152,500
|
16,927,500
|
|
49
|
50th Payment Date
(the date falling on the 10th day of the forty-ninth (49th) month falling immediately after Commencement Date) |
152,500
|
16,775,000
|
|
50
|
51st Payment Date
(the date falling on the 10th day of the fiftieth (50th) month falling immediately after Commencement Date) |
152,500
|
16,622,500
|
|
51
|
52nd Payment Date
(the date falling on the 10th day of the fifty-first (51st) month falling immediately after Commencement Date) |
152,500
|
16,470,000
|
|
52
|
53rd Payment Date
(the date falling on the 10th day of the fifty-second (52nd) month falling immediately after Commencement Date) |
152,500
|
16,317,500
|
|
53
|
54th Payment Date
(the date falling on the 10th day of the fifty-third (53rd) month falling immediately after Commencement Date) |
152,500
|
16,165,000
|
54
|
55th Payment Date
(the date falling on the 10th day of the fifty-fourth (54th) month falling immediately after Commencement Date) |
152,500
|
16,012,500
|
|
55
|
56th Payment Date
(the date falling on the 10th day of the fifty-fifth (55th) month falling immediately after Commencement Date) |
152,500
|
15,860,000
|
|
56
|
57th Payment Date
(the date falling on the 10th day of the fifty-sixth (56th) month falling immediately after Commencement Date) |
152,500
|
15,707,500
|
|
57
|
58th Payment Date
(the date falling on the 10th day of the fifty-seventh (57th) month falling immediately after Commencement Date) |
152,500
|
15,555,000
|
|
58
|
59th Payment Date
(the date falling on the 10th day of the fifty-eighth (58th) month falling immediately after Commencement Date) |
152,500
|
15,402,500
|
|
59
|
60th Payment Date
(the date falling on the 10th day of the fifty-ninth (59th) month falling immediately after Commencement Date) |
152,500
|
15,250,000
|
60
|
61st Payment Date
(the date falling on the 10th day of the sixtieth (60th) month falling immediately after Commencement Date) |
152,500
|
15,097,500
|
|
61
|
62nd Payment Date
(the date falling on the 10th day of the sixty-first (61st) month falling immediately after Commencement Date) |
152,500
|
14,945,000
|
|
62
|
63rd Payment Date
(the date falling on the 10th day of the sixty-second (62nd) month falling immediately after Commencement Date) |
152,500
|
14,792,500
|
|
63
|
64th Payment Date
(the date falling on the 10th day of the sixty-third (63rd) month falling immediately after Commencement Date) |
152,500
|
14,640,000
|
|
64
|
65th Payment Date
(the date falling on the 10th day of the sixty-fourth (64th) month falling immediately after Commencement Date) |
152,500
|
14,487,500
|
|
65
|
66th Payment Date
(the date falling on the 10th day of the sixty-fifth (65th) month falling immediately after Commencement Date) |
152,500
|
14,335,000
|
66
|
67th Payment Date
(the date falling on the 10th day of the sixty-sixth (66th) month falling immediately after Commencement Date) |
152,500
|
14,182,500
|
|
67
|
68th Payment Date
(the date falling on the 10th day of the sixty-seventh (67th) month falling immediately after Commencement Date) |
152,500
|
14,030,000
|
|
68
|
69th Payment Date
(the date falling on the 10th day of the sixty-eighth (68th) month falling immediately after Commencement Date) |
152,500
|
13,877,500
|
|
69
|
70th Payment Date
(the date falling on the 10th day of the sixty-ninth (69th) month falling immediately after Commencement Date) |
152,500
|
13,725,000
|
|
70
|
71st Payment Date
(the date falling on the 10th day of the seventieth (70th) month falling immediately after Commencement Date) |
152,500
|
13,572,500
|
|
71
|
72nd Payment Date
(the date falling on the 10th day of the seventy-first (71st) month falling immediately after Commencement Date) |
152,500
|
13,420,000
|
72
|
73rd Payment Date
(the date falling on the 10th day of the seventy-second (72nd) month falling immediately after Commencement Date) |
152,500
|
13,267,500
|
|
73
|
74th Payment Date
(the date falling on the 10th day of the seventy-third (73rd) month falling immediately after Commencement Date) |
152,500
|
13,115,000
|
|
74
|
75th Payment Date
(the date falling on the 10th day of the seventy-fourth (74th) month falling immediately after Commencement Date) |
152,500
|
12,962,500
|
|
75
|
76th Payment Date
(the date falling on the 10th day of the seventy-fifth (75th) month falling immediately after Commencement Date) |
152,500
|
12,810,000
|
|
76
|
77th Payment Date
(the date falling on the 10th day of the seventy-sixth (76th) month falling immediately after Commencement Date) |
152,500
|
12,657,500
|
|
77
|
78th Payment Date
(the date falling on the 10th day of the seventy-seventh (77th) month falling immediately after Commencement Date) |
152,500
|
12,505,000
|
84
|
85th Payment Date
(the date falling on the 10th day of the eighty-fourth (84th) month falling immediately after Commencement Date) |
152,500
|
11,437,500
|
|
85
|
86th Payment Date
(the date falling on the 10th day of the eighty-fifth (85th) month falling immediately after Commencement Date) |
152,500
|
11,285,000
|
|
86
|
87th Payment Date
(the date falling on the 10th day of the eighty-sixth (86th) month falling immediately after Commencement Date) |
152,500
|
11,132,500
|
|
87
|
88th Payment Date
(the date falling on the 10th day of the eighty-seventh (87th) month falling immediately after Commencement Date) |
152,500
|
10,980,000
|
|
88
|
89th Payment Date
(the date falling on the 10th day of the eighty-eighth (88th) month falling immediately after Commencement Date) |
152,500
|
10,827,500
|
|
89
|
90th Payment Date
(the date falling on the 10th day of the eighty-ninth (89th) month falling immediately after Commencement Date) |
152,500
|
10,675,000
|
90
|
91st Payment Date
(the date falling on the 10th day of the ninetieth (90th) month falling immediately after Commencement Date) |
152,500
|
10,522,500
|
|
91
|
92nd Payment Date
(the date falling on the 10th day of the ninety-first (91st) month falling immediately after Commencement Date) |
152,500
|
10,370,000
|
|
92
|
93rd Payment Date
(the date falling on the 10th day of the ninety-second (92nd) month falling immediately after Commencement Date) |
152,500
|
10,217,500
|
|
93
|
94th Payment Date
(the date falling on the 10th day of the ninety-third (93rd) month falling immediately after Commencement Date) |
152,500
|
10,065,000
|
|
94
|
95th Payment Date
(the date falling on the 10th day of the ninety-fourth (94th) month falling immediately after Commencement Date) |
152,500
|
9,912,500
|
|
95
|
96th Payment Date
(the date falling on the 10th day of the ninety-fifth (95th) month falling immediately after Commencement Date) |
152,500
|
9,760,000
|
102
|
103rd Payment Date
(the date falling on the 10th day of the one hundred and second (102nd) month falling immediately after Commencement Date) |
152,500
|
8,692,500
|
|
103
|
104th Payment Date
(the date falling on
the 10th day of the one hundred and
third (103rd) month
falling immediately after
Commencement
Date)
|
152,500
|
8,540,000
|
|
104
|
105th Payment Date
(the date falling on
the 10th day of the one hundred and
fourth (104th) month
falling immediately after
Commencement
Date)
|
152,500
|
8,387,500
|
|
105
|
106th Payment Date
(the date falling on
the 10th day of the one hundred and
fifth (105th) month
falling immediately after
Commencement
Date)
|
152,500
|
8,235,000
|
|
106
|
107th Payment Date
(the date falling on
the 10th day of the one hundred and
sixth (106th) month
falling immediately after
Commencement
Date)
|
152,500
|
8,082,500
|
|
107
|
108th Payment Date
(the date falling on
the 10th day of the one hundred and
seventh (107th)
month falling immediately after
Commencement
Date)
|
152,500
|
7,930,000
|
108
|
109th Payment Date (the date falling on the 10th day of the one hundred and
eighth (108th)
month falling immediately after
Commencement
Date)
|
152,500
|
7,777,500
|
|
109
|
110th Payment Date
(the date falling on
the 10th day of the one hundred and
ninth (109th) month
falling immediately after
Commencement
Date)
|
152,500
|
7,625,000
|
|
110
|
111th Payment Date
(the date falling on
the 10th day of the one hundred and
tenth (110th) month
falling immediately after
Commencement
Date)
|
152,500
|
7,472,500
|
|
111
|
112nd Payment Date
(the date falling on
the 10th day of the one hundred and
eleventh (110th)
month falling immediately after
Commencement
Date)
|
152,500
|
7,320,000
|
|
112
|
113rd Payment Date
(the date falling on
the 10th day of the one hundred and
twelve (112th)
month falling immediately after
Commencement
Date)
|
152,500
|
7,167,500
|
|
113
|
114th Payment Date
(the date falling on
the 10th day of the one hundred and
thirteenth (113th)
month falling immediately after
Commencement
Date)
|
152,500
|
7,015,000
|
114
|
115th Payment Date (the date falling on the 10th day of the one hundred and
fourteenth (114th)
month falling immediately after
Commencement
Date)
|
152,500
|
6,862,500
|
|
115
|
116th Payment Date
(the date falling on
the 10th day of the one hundred and
fifteenth (115th)
month falling immediately after
Commencement
Date)
|
152,500
|
6,710,000
|
|
116
|
117th Payment Date
(the date falling on
the 10th day of the one hundred and
sixteenth (116th)
month falling immediately after
Commencement
Date)
|
152,500
|
6,557,500
|
|
117
|
118th Payment Date
(the date falling on
the 10th day of the one hundred and
seventeenth (117th)
month falling immediately after
Commencement
Date)
|
152,500
|
6,405,000
|
|
118
|
119th Payment Date
(the date falling on
the 10th day of the one hundred and
eighteenth (118th)
month falling immediately after
Commencement
Date)
|
152,500
|
6,252,500
|
|
119
|
120th Payment Date
(the date falling on
the 10th day of the
one hundred
nineteenth (119th)
month falling immediately after
Commencement
Date)
|
Balloon
Payment:
6,100,000
|
152,500
|
0
|
Collateral Owners
|
Collateral Charterers
|
Collateral Vessels
|
Name: Oriental Fleet TANKER 11 Limited (东方富利 TANKER11 有限公司)
Place of Incorporation: Republic of the Marshall Islands
Registration No.: 101325 ("Collateral Owner A")
|
Name: Monte Carlo Seven Shipping Company Limited Place of Incorporation: Republic of the Marshall Islands
Registration No.: 60933 ("Collateral Charterer A")
|
One (1) d/w 50,000 product oil/chemical tanker named "Stenaweco Excellence" registered in the name of Collateral Owner A under the
laws and flag of the Republic of Liberia with Official Number 16739
("Collateral Vessel A")
|
Name: Oriental Fleet TANKER 12 Limited (东方富利 TANKER12 有限公司)
Place of Incorporation: Republic of the Marshall Islands
Registration No.: 101326 ("Collateral Owner B")
|
Name: Monte Carlo 71 Shipping Company Limited Place of Incorporation: Republic of the Marshall Islands
Registration No.: 69834 ("Collateral Charterer B")
|
One (1) d/w 50,000 product oil/chemical tanker named "Stenaweco Energy" presently registered in the name of Eco Energy LLC under the
laws and flag of the Republic of the Marshall Islands with Official Number 5270, which on delivery to Collateral Owner B will be registered under the laws and flag of the Republic of the Marshall Islands with Official Number 5270
("Collateral Vessel B")
|
Clause
|
Page No.
|
|
1.
|
Definitions and interpretation
|
1
|
2.
|
Guarantee and Indemnity
|
3
|
3.
|
Preservation of Rights
|
3
|
4.
|
Representations and Warranties
|
5
|
5.
|
Covenants
|
6
|
6.
|
Continuing Guarantee
|
6
|
7.
|
Payments
|
6
|
8.
|
Subordination
|
7
|
9.
|
Currency Conversion and Currency Indemnity
|
7
|
10.
|
Suspense Account
|
8
|
11.
|
Set-off
|
8
|
12.
|
Guarantor to comply with Charter
|
8
|
13.
|
Miscellaneous
|
8
|
14.
|
Assignments and Transfers
|
9
|
15.
|
Notices
|
9
|
16.
|
Governing Law and Jurisdiction
|
11
|
Schedule 1 : Representations and Warranties
|
13
|
|
Schedule 2 : Covenants
|
18
|
|
Schedule 3 : Form of Compliance Certificate
|
26
|
|
Guarantee – Execution Page (1/2)
|
28
|
(1) |
TOP SHIPS INC., a corporation incorporated in the Republic of the Marshall Islands with limited liability and registration no. 3571, as guarantor
(the Guarantor); and
|
(2) |
ORIENTAL FLEET TANKER 13 LIMITED (东方富利 TANKER13
有限公 司), a corporation incorporated in the Republic of the Marshall Islands with limited liability and registration no.
101327, as owner (the Owner).
|
(A) |
The Owner and the Charterer (as defined below) are parties to a bareboat charter party dated on or about the date hereof (as amended and/or supplemented from time to time, the Charter), pursuant to which the Owner has agreed to charter the Vessel (as defined below) to the Charterer subject to the terms and conditions specified therein.
|
(B) |
As a condition precedent to the obligations of the Owner under the Charter, the Guarantor is required to execute this Guarantee.
|
1. |
Definitions and interpretation
|
1.1 |
Unless the context otherwise requires, words or expressions defined in the Charter (whether specifically or by reference) shall have the same meanings in this Guarantee and this
construction shall survive the termination of the Charter. Where a word or phrase is defined in the Charter and this Guarantee, the definition in this Guarantee shall prevail.
|
1.2 |
In this Guarantee, the following words and expressions shall, except where the context otherwise requires, have the following respective meanings:
|
|
(a) |
all costs, charges and expenses incurred by the Owner in connection with the protection, preservation or enforcement of its rights under any of the Transaction Documents; and
|
|
(b) |
all indebtedness, moneys, obligations and liabilities due, owing or incurred in respect of any variations of the Transaction Documents or the obligations and liabilities imposed under such
documents.
|
|
(a) |
execution of all notices, acknowledgments and consents as required under those Transaction Documents; and
|
|
(b) |
any other Authorisations of those Transaction Documents as may be required or recommended in any Legal Opinion.
|
1.3 |
Unless otherwise specified and except where the context otherwise requires, any reference in this Guarantee to:
|
|
(a) |
the singular includes the plural and vice versa;
|
|
(b) |
any person shall be construed so as to include its successors and permitted assigns and permitted transferees in accordance with their respective interests;
|
|
(c) |
any document (including the Charter, this Guarantee, and each other Transaction Document) shall be construed as a reference to such document as amended, restated, supplemented, varied or
novated from time to time in accordance with its terms (to the extent that such document is at the relevant time in effect);
|
|
(d) |
any provision of law shall be construed as a reference to that provision as amended, supplemented, varied, re-enacted, replaced or restated from time to time;
|
|
(e) |
any applicable law includes, without limitation, (i) applicable laws, acts, codes, conventions, decrees, decree-laws, legislation, statutes,
treaties and similar instruments, (ii) applicable final judgments, orders, determinations or awards of any court from which there is no right of appeal (or, if there is a right of appeal, such appeal is not prosecuted within the allowable
time) and (iii) applicable directives, guidance, guidelines, notices, orders, regulations and rules of any governmental, judicial or regulatory authority (whether or not having the force of law but with which, if not having the force of
law, compliance is customary);
|
|
(f) |
a Clause shall be construed as a reference to a clause of this Guarantee;
|
|
(g) |
continuing shall, in relation to a Termination Event, be construed as a reference to a Termination Event which persists and has not been waived or
remedied in accordance with the terms of the Charter;
|
|
(h) |
a person shall be construed as a reference to any association, company, corporation, firm, governmental, judicial or regulatory authority,
individual, joint venture, partnership (including any limited partnership and any limited liability partnership) or trust (in each case whether or not having separate legal personality);
|
|
(i) |
a successor shall be construed so as to mean a successor in title of a person and any person who under the applicable laws of its jurisdiction of
incorporation or domicile has assumed the rights and obligations of such person or to which, under such laws or by agreement or otherwise, such rights and obligations have been transferred; and
|
|
(j) |
the winding-up, dissolution, administration or re-organisation of a person shall be construed so as to include any equivalent or analogous proceedings under the applicable law of the jurisdiction in which such person is incorporated or formed or
any jurisdiction in which such person carries on business including the seeking of liquidation, winding-up, reorganisation, dissolution, administration, arrangement, adjustment, protection or relief of debtors.
|
1.4 |
Clause headings shall be ignored in the interpretation of this Guarantee.
|
2. |
Guarantee and Indemnity
|
2.1 |
In consideration of the Owner entering into the Charter, the Guarantor irrevocably and unconditionally guarantees to the Owner the due payment and prompt performance by the Charterer and
the other Security Parties of the Guaranteed Obligations when due in accordance with the Charter and the other Transaction Documents.
|
2.2 |
The Guarantor further irrevocably and unconditionally undertakes to pay to the Owner, on the Owner's demand, any such amount which is not paid by the Charterer or the other Security
Parties when due and payable under the Charter, the Collateral Charters and the other Transaction Documents.
|
2.3 |
The Guarantor as principal obligor and as a separate and independent obligation and liability from its obligations and liabilities under Clauses 2.1 and 2.2 agrees to indemnify and keep
indemnified the Owner, in full and on demand, from and against all and any losses, costs, claims, liabilities, damages, demands and expenses suffered or incurred by the Owner arising out of, or in connection with, any failure of the
Charterer or any other Security Party to perform or discharge any of the Guaranteed Obligations.
|
2.4 |
The Owner may serve more than one demand under this Clause 2.
|
3. |
Preservation of Rights
|
3.1 |
The obligations of the Guarantor contained in this Guarantee shall be in addition to and independent of every other security which the Owner may at any time hold in
|
3.2 |
The Guarantor shall be liable under this Guarantee as a principal and independent debtor and accordingly it shall not have, as regards this Guarantee, any of the rights or defences of a
surety. Neither the obligations of the Guarantor contained in this Guarantee nor the rights, powers and remedies conferred upon the Owner by this Guarantee or by law shall be discharged, impaired or otherwise affected by:
|
|
(a) |
the winding-up, dissolution, administration or reorganisation of the Charterer or any other Security Party or any other person or any change in its status, function, control or ownership;
|
|
(b) |
any of the obligations of the Charterer or any other Security Party or any other person under any Transaction Document being or becoming illegal, invalid, void, voidable, unenforceable,
ineffective or of limited force and effect in any respect;
|
|
(c) |
any time or other indulgence being granted or agreed to be granted to either the Charterer or any other Security Party or any other person in respect of any of its obligations under any
Transaction Document;
|
|
(d) |
any amendment to, or any variation, waiver or release of, the Charter or the other Transaction Documents or any obligation of either the Charterer or any other Security Party or any other
person under any Transaction Document;
|
|
(e) |
any failure to take, or fully to take, any security contemplated by any Transaction Document or otherwise agreed to be taken in respect of any Security Party's obligations under any
Transaction Document;
|
|
(f) |
any failure to realise or fully to realise the value of, or any release, discharge, exchange or substitution of, any security taken in respect of any of either the Charterer's or any other
Security Party's obligations under any Transaction Document;
|
|
(g) |
any purported obligation of either the Charterer or any other Security Party or any other person to the Owner (or any security for that obligation) becoming wholly or in part void,
invalid, illegal or unenforceable for any reason, including negligence; and
|
|
(h) |
any other act, event or omission which, but for this Clause 3.2, might operate to discharge, impair or otherwise affect any of the obligations of the Guarantor contained in this Guarantee
or any of the rights, powers or remedies conferred upon the Owner by this Guarantee, the Charter or any other Transaction Document or by law.
|
3.3 |
Any settlement, discharge or release between the Guarantor and the Owner in relation to this Guarantee shall be conditional upon no right, security, disposition or payment to or in favour
of the Owner by any Security Party or any other person being avoided, set aside, reduced or ordered to be refunded as a result of the operation of any applicable law and if any such right, security, disposition or payment is so avoided,
set aside, reduced or ordered to be refunded, the liability of the Guarantor shall continue and the Owner shall be entitled to recover under this Guarantee the value or
|
3.4 |
The Owner shall not be obliged before exercising any of the rights, powers or remedies conferred upon it by this Guarantee or by law:
|
|
(a) |
to take any action or obtain judgment in any court against the Charterer or any other Security Party;
|
|
(b) |
to make or file any claim or proof in a winding-up or dissolution of either of the Charterer or any other Security Party; or
|
|
(c) |
to enforce or seek to enforce any security taken in respect of the Charterer's or any other Security Party's obligations under the Charter or any other Transaction Document.
|
3.5 |
The Guarantor agrees that, for so long as the Charterer or any other Security Party is under any actual or contingent obligation under the Charter or any other Transaction Document, the
Guarantor shall not exercise any right which the Guarantor may at any time have by reason of this Guarantee or the performance by it of its obligations under this Guarantee:
|
|
(a) |
to be indemnified by the Charterer or any other Security Party or to receive any collateral from the Charterer or any other Security Party in respect of the Guarantor's obligations under
this Guarantee;
|
|
(b) |
to claim any contribution from any other guarantor of the Charterer's or any other Security Party's obligations under the Charter or any other Transaction Document;
|
|
(c) |
to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any of the Owner's rights under the Charter or any Transaction Document or of any other
guarantee or security taken pursuant to, or in connection with, the Charter or any other Transaction Document;
|
|
(d) |
to claim or prove in a liquidation or other insolvency proceeding of the Charterer or any other Security Party or any co-surety in competition with the Owner; and/or
|
|
(e) |
receive, claim or have the benefit of any payment, distribution or security from or on account of the Charterer or any other Security Party, or exercise any right of set-off against the
Charterer or any other Security Party.
|
4. |
Representations and Warranties
|
5. |
Covenants
|
6. |
Continuing Guarantee
|
7. |
Payments
|
7.1 |
All payments to be made by the Guarantor under this Guarantee shall be made in the currency in which the corresponding payment obligation of the Charterer is due and payable under the
Charter or each other applicable Transaction Document (as the case may be) and in immediately available, freely transferable, cleared funds to such account of the Owner with such bank as the Owner shall from time to time have specified
for this purpose.
|
7.2 |
All payments to be made by the Guarantor under this Guarantee shall be made without set-off or counterclaim and without any deduction or withholding whatsoever. If the Guarantor is obliged
by law to make any deduction or withholding from any such payment, the amount due from the Guarantor in respect of such payment shall be increased to the extent necessary to ensure that, after the making of such deduction or withholding,
the Owner receives a net amount equal to the amount that the Owner would have received had no such deduction or withholding been required to be made.
|
7.3 |
The Guarantor agrees that:
|
|
(a) |
if any payment received by the Owner in respect of moneys owing or due and payable by the Guarantor is avoided on the subsequent insolvency or liquidation of the Guarantor, under any laws
relating to insolvency or liquidation, that payment does not discharge or diminish the liability of the Guarantor under this Guarantee, which continues to apply as if that payment at all times remained owing; and
|
|
(b) |
if the Guarantor has not paid to the Owner the full amount of all sums due under this Guarantee, the Owner may (for the purpose of enabling the Owner to sue the Guarantor and/or any other
guarantor of the liabilities which are hereby guaranteed or to prove in its or their liquidation or in any similar proceedings for any moneys due and unpaid by the Guarantor to the Owner) at any time place and keep for such time as it may
think fit any moneys received under this Guarantee, or under such other guarantees or from any other person, to the credit of an account or accounts (bearing interest at a commercial rate) without any obligation on the part of the Owner
to apply the same or any part thereof in or towards the discharge of the indebtedness and liabilities of the Guarantor to the Owner.
|
7.4 |
All moneys received by the Owner pursuant to this Guarantee after the occurrence of a Termination Event which is continuing shall be held by the Owner in trust and applied by the Owner in
the following order:
|
|
(a) |
firstly, to pay or retain all costs and expenses of whatever nature incurred by the Owner under the Transaction Documents;
|
|
(b) |
secondly, to be applied in and towards payment of the Guaranteed Obligations (whether the same are due and payable or not); and
|
|
(c) |
fifthly, the surplus (if any) shall be paid to the Guarantor or such other person as may for the time being be entitled thereto.
|
8. |
Subordination
|
|
(a) |
claim, or in a Bankruptcy of the Charterer or any other Security Party prove for, any amount payable to the Guarantor by the Charterer or any other Security Party, whether in respect of
this Guarantee or any other Transaction Document;
|
|
(b) |
take or enforce any Security Interest for any such amount;
|
|
(c) |
claim to set-off any such amount against any amount payable by the Guarantor to the Charterer or any other Security Party; or
|
|
(d) |
claim any subrogation or other right in respect of any Transaction Document or any sum received or recovered by either the Charterer or any other Security Party under a Transaction
Document.
|
9. |
Currency Conversion and Currency Indemnity
|
|
(a) |
The Owner may convert any money received or realised by it under or pursuant to this Guarantee which is not in the currency in which the relevant sum is due and payable under each
applicable Transaction Document from that currency into the currency in which such sum is due at the rate of exchange on the relevant date of the conversion.
|
|
(b) |
If, under any applicable law, whether as a result of judgment against the Guarantor or the liquidation of the Guarantor or for any other reason, any payment to be made by the Guarantor
under or in connection with this Guarantee is made or is recovered in a currency other than the currency (the currency of obligation) in which it is payable pursuant to this Guarantee then, to the
extent that the payment (when converted into the currency of obligation at the rate of exchange on the date for the determination of liabilities permitted by the applicable law) falls short of the amount unpaid under this Guarantee,
|
|
(c) |
For the purposes of this Clause 9, rate of exchange means the best rate at which the Owner is able on the relevant date to purchase the currency
of obligation with the other currency.
|
10. |
Suspense Account
|
11. |
Set-off
|
12. |
Guarantor to comply with Charter
|
13. |
Miscellaneous
|
13.1 |
This Guarantee may be executed in any number of counterparts and on separate counterparts, each of which when executed shall constitute an original, but all counterparts shall together
constitute one and the same instrument.
|
13.2 |
Any amendment, supplement or variation to any Transaction Document to which the Guarantor is a party must be in writing and executed by each party thereto.
|
13.3 |
The Guarantor may not terminate this Guarantee by notice to the Owner or otherwise until the Guaranteed Obligations are irrevocably paid to the Owner in full.
|
13.4 |
Neither the failure to exercise, nor the delay in any exercise of, nor the single or partial exercise of, any right, power or remedy by the Owner under or in relation to any Transaction
Document to which the Guarantor is a party shall (a) operate as a waiver of such right, power or remedy, (b) prevent any further or other exercise of such right, power or remedy or (c) prevent the exercise of any other right, power or
remedy. The rights, powers and remedies of the Owner provided in any Transaction
|
13.5 |
Any waiver or consent given by a party under or in relation to any Transaction Document to which the Guarantor is a party must, in order to be effective, be in writing and shall only be
effective in the specific circumstances in which it is given.
|
13.6 |
If at any time any provision of any Transaction Document to which the Guarantor is a party is or becomes illegal, invalid or unenforceable in any respect under the law of any jurisdiction,
neither the legality, validity or enforceability of the remaining provisions of that Transaction Document nor the legality, validity or enforceability of such provision under the law of any other jurisdiction shall in any way be affected
or impaired.
|
13.7 |
Any certificate or determination by the Owner as to any rate of interest or as to any other amount payable under and pursuant to any Transaction Document to which the Guarantor is a party
shall, in the absence of manifest error, be conclusive and binding on Guarantor.
|
13.8 |
A person who is not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or enjoy the benefit of any term of this Guarantee.
|
13.9 |
The Guarantor shall pay to the Owner on demand all fees, costs and expenses (including legal, survey and other costs) payable or incurred by the Owner in connection with the enforcement of
or preservation of the Owner's rights under each Transaction Document to which the Guarantor is a party. All amounts payable pursuant to this Clause 13 shall be paid in the currency in which they are incurred to the Owner.
|
14. |
Assignments and Transfers
|
14.1 |
This Guarantee shall be binding upon and inure to the benefit of each Party and its respective successors, permitted assigns and permitted transferees.
|
14.2 |
The Guarantor shall not assign, transfer (whether voluntarily or involuntarily, by operation of law or otherwise) or create or permit to exist any Security Interest over, any of its rights
or obligations under this Guarantee.
|
15. |
Notices
|
15.1 |
Communications in writing
|
15.2 |
Addresses
|
|
(a) |
In the case of the Guarantor:
|
Address:
|
1, Vas. Sofias & Meg.
Alexandrou Str. 15124, Maroussi, Athens, Greece |
|
Attention:
|
Andreas Louka
|
|
Email:
|
louka@loukapartners.com
|
|
Fax:
|
+30 2108128320
|
|
(b) |
In the case of the Owner:
|
Address:
|
c/o Oriental Fleet International Company Limited
50/F, COSCO Tower 183 Queen's Road Central Hong Kong |
|
Attention:
|
Belinda Hou / Thomas Xing / Xu Ying
|
|
Email:
|
lou.can@coscoshipping.com / thomas.xing@ofi.com.hk / asset@coscoshipping.com
|
|
Fax:
|
+852 2339 1881
|
15.3 |
Delivery
|
15.3.1 |
Any communication or document made or delivered by a Party to the other Party under or in connection with the Transaction Documents to which the Guarantor is a party will only be
effective:
|
|
(a) |
if by way of fax, when received in legible form;
|
|
(b) |
if by way of letter, when it has been left at the relevant address to which it has been posted with postage prepaid in an envelope addressed to the relevant party at that address, and, if
a particular department or officer is specified as part of its address details provided under Clause 15.2 (Addresses), if addressed to that department or officer; or
|
|
(c) |
if by way of email, only when received in a legible form by the email address of the person to whom the communication is made.
|
15.3.2 |
All communications and documents delivered pursuant to or otherwise relating to the Transaction Documents to which the Guarantor is a party shall be either in English or Chinese or
accompanied by a certified English or Chinese translation.
|
15.4 |
Validity of demands
|
|
(a) |
on the date on which the amount to which it relates is due and payable by the Charterer or any other Security Party under an applicable Transaction Document (as the case may be); or
|
|
(b) |
at the same time as the service of a notice under the applicable Transaction Document;
|
16. |
Governing Law and Jurisdiction
|
16.1 |
This Guarantee and any non-contractual obligations arising out of or in connection with it are governed by and shall be construed in accordance with English law and any Dispute arising out
of or in connection with this Guarantee shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory re-enactment or modification thereof save to the extent necessary to give effect to the
provisions of this Clause.
|
16.2 |
The arbitration reference shall be to three arbitrators:
|
|
(a) |
A Party wishing to refer a Dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other Party requiring the other Party to appoint its
own arbitrator within fourteen (14) calendar days of that notice, and stating it will appoint its arbitrator as sole arbitrator unless the other Party appoints its own arbitrator and gives notice that it has done so within the fourteen
(14) days specified.
|
|
(b) |
If the other Party does not appoint its own arbitrator and gives notice that it has done so within the fourteen (14) days specified, the Party referring a Dispute to arbitration may,
without the requirement of any further prior notice to the other Party, appoint its arbitrator as sole arbitrator and shall advise the other Party accordingly. The award of a sole arbitrator shall be binding on both Parties as if he/she
had been appointed by agreement.
|
|
(c) |
Where each Party appoints its own arbitrator, then the two (2) arbitrators so appointed may proceed with the arbitration and at any time thereafter appoint a third arbitrator so long as
they do so before any substantive hearing or forthwith in the event that they cannot agree on any matter relating to the arbitration. If the said two arbitrators do not appoint a third within fourteen (14) days of one calling upon the
other to do so, or if they are in disagreement as to the third arbitrator, either arbitrator or a Party shall apply to the London Maritime Arbitrators Association (LMAA) for the appointment of the third arbitrator.
|
|
(d) |
The language used in the arbitration shall be English. The arbitration shall be conducted in accordance with the LMAA Terms current at the time when the arbitration proceedings are
commenced.
|
|
(e) |
Nothing herein shall prevent the Parties agreeing in writing to vary these provisions to provide for the appointment of a sole arbitrator.
|
16.3 |
In this Clause 16, proceedings means proceedings of any kind, including an application for a provisional or protective measure and a Dispute means any dispute arising out of or in connection with this Guarantee (including a dispute relating to the
|
16.4 |
The Guarantor waives any rights of sovereign immunity which it or any of its properties may enjoy in any jurisdiction and subjects itself to civil and commercial law with respect to its
obligations under this Guarantee.
|
1. |
Status
|
|
(a) |
It is a company duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation.
|
|
(b) |
It has the power to own its assets and carry on its business as it is being conducted.
|
|
(c) |
It has read and understood the terms of this Guarantee, the Charter and the other Transaction Documents to which the Charterer or any other Security Party is a party and has taken
appropriate legal advice as to the extent of its obligations and liabilities under the Transaction Documents to which the Guarantor is a party.
|
|
(d) |
The Charterer is a wholly-owned Subsidiary of the Guarantor, which is ultimately controlled by the Substantial Shareholder.
|
|
(e) |
It is a publicly listed entity on the NASDAQ stock exchange under the symbol "TOPS".
|
2. |
Compliance with anti-money laundering legislation
|
3. |
Binding obligations
|
|
(a) |
The obligations expressed to be assumed by it in the Transaction Documents to which it is a party are, subject to the Legal Reservations, legal, valid, binding and enforceable obligations.
|
|
(b) |
Without limiting the generality of paragraph (a) above, subject to the Security Perfection Requirements, each Security Document to which it is a party creates the Security Interests which
it purports to create and such Security Interests are valid and effective.
|
4. |
Non-conflict with other obligations
|
|
(a) |
any law or regulation applicable to it;
|
|
(b) |
its constitutional documents; or
|
|
(c) |
any agreement or instrument binding upon it or any of its assets,
|
5. |
Power and authority
|
6. |
Validity and admissibility in evidence
|
|
(a) |
to enable it lawfully to enter into, exercise its rights and comply with its obligations in the Transaction Documents to which it is a party;
|
|
(b) |
to make the Transaction Documents to which it is a party admissible in evidence in its Relevant Jurisdictions;
|
|
(c) |
for it to carry on its business, and which are material; and
|
|
(d) |
to enable it to create the Security Interest to be created by it under any Security Document to which it is a party and to ensure that such Security Interest has the priority and ranking
it is expressed to have,
|
7. |
Governing law and enforcement
|
|
(a) |
the choice of each relevant law as the governing law of the Transaction Documents to which it is a party to and the agreement by such party to refer disputes to the relevant courts or
tribunal as stated in such Transaction Document will be recognised and enforced in its Relevant Jurisdictions; and
|
|
(b) |
any arbitral award, ruling or judgment obtained in each Relevant Jurisdiction in relation to the Transaction Documents to which it is a party will be recognised and enforced in its
Relevant Jurisdictions.
|
8. |
Deduction of Tax
|
9. |
Financial statements
|
|
(a) |
Its financial statements most recently supplied to the Owner (which, at the date of this Guarantee, are its Original Financial Statements) were prepared in accordance with GAAP
consistently applied save to the extent expressly disclosed in such financial statements.
|
|
(b) |
Its financial statements most recently supplied to the Owner (which, at the date of this Guarantee, are its Original Financial Statements) give a true and fair view of (if audited) or
fairly represent (if unaudited) its consolidated financial condition and operations for the period to which they relate, save to the extent expressly disclosed in such financial statements.
|
|
(c) |
There has been no material adverse change in its business or consolidated financial condition since the date of its Original Financial Statements.
|
10. |
No filing or stamp taxes
|
11. |
No default
|
|
(a) |
No Termination Event has occurred and is continuing or might reasonably be expected to result from the entry into or performance of, or the transactions contemplated by, any Transaction
Document to which it is a party.
|
|
(b) |
No other event or circumstance has occurred and is continuing which (with the expiry of a grace period, the giving of notice or any combination of the foregoing) constitutes a default
under any deed or instrument which is binding on the Guarantor, or to which its assets are subject, which might have a Material Adverse Effect on the Guarantor's ability to perform its obligations under any Transaction Document to which
it is a party.
|
12. |
No breach of laws
|
13. |
No misleading information
|
|
(a) |
All information provided by it or on its behalf in relation to the negotiation and preparation of any Transaction Document to which it is a party was true, complete and accurate in all
material respects as at the date it was provided or as at the date (if any) at which it is stated and was not misleading in any respect.
|
|
(b) |
All financial projections provided by it or on its behalf have been prepared on the basis of recent historical information and on the basis of reasonable assumptions.
|
|
(c) |
Nothing has occurred or been omitted from the information so provided and no information has been given or withheld that results in the information provided by it or on its behalf being
untrue or misleading in any material respect.
|
14. |
Pari passu ranking
|
15. |
No proceedings
|
|
(a) |
No litigation, arbitration or administrative proceedings of or before any court, arbitral body or agency (which, if adversely determined, would have a Material Adverse Effect on the
Guarantor) have been started or (to the best of its knowledge and belief) threatened against it.
|
|
(b) |
No judgment or order of a court, arbitral body or agency which might reasonably be expected to have a Material Adverse Effect has been made against it.
|
16. |
No immunity
|
17. |
Taxation
|
|
(a) |
It has complied in all material respects with all tax laws and regulations applicable to it and its business.
|
|
(b) |
It is not materially overdue in the filing of any tax returns and is not overdue in the payment of any amount in respect of tax.
|
|
(c) |
No claims or investigations are being made or conducted against it with respect to taxes.
|
|
(d) |
It is resident for tax purposes only in its jurisdiction of incorporation except (i) the taxes that are being contested in good faith by appropriate proceedings and for which the Guarantor
has set aside on its books adequate reserves and (ii) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect.
|
18. |
Disclosure of material facts
|
19. |
Place of Business and Non-Hong Kong company
|
20. |
Transaction Documents
|
21. |
Sanctions
|
|
(a) |
No Security Party is a Restricted Person.
|
|
(b) |
Each Security Party is in compliance with all Sanctions laws, and none of them have been or are currently being investigated on compliance with Sanctions, they have not received notice or
are aware of any claim, action, suit or proceeding against any of them with respect to Sanctions and they have not taken any action to evade the application of Sanctions.
|
22. |
Authorised signatories
|
1. |
Status
|
|
(a) |
It will maintain its existence as a company duly incorporated and validly existing under the laws of its jurisdiction of incorporation.
|
|
(b) |
It will remain a publicly listed entity on the NASDAQ stock exchange under the symbol "TOPS".
|
2. |
Authorisations and Compliance with applicable law
|
|
(a) |
It shall promptly:
|
|
(i) |
obtain, comply with and do all that is necessary to maintain in full force and effect; and
|
|
(ii) |
supply copies to the Owner of,
|
|
(b) |
It shall comply in all respects with all laws to which it may be subject.
|
|
(c) |
It shall ensure that all the Security Perfection Requirements have been or will be done or obtained (as the case may be) no later than the latest date permitted by applicable law and in
any event by such date as the Owner may specify.
|
3. |
Compliance with obligations
|
4. |
No prejudice to interests
|
5. |
Exercise of rights
|
6. |
Further assurance
|
7. |
Pari passu ranking
|
8. |
Negative pledge
|
|
(a) |
sell, transfer or otherwise dispose of its right, title and interest in and to any collateral which is the subject of security created under any Transaction Document;
|
|
(b) |
create, incur, assume or permit or cause to exist any Security Interest over its right, title and interest in and to any collateral which is the subject of security created under any
Transaction Document; or
|
|
(c) |
consent to the taking of any such action described in the preceding two paragraphs by any other person (whether pursuant to the terms of the Transaction Documents or otherwise),
|
9. |
Security Parties
|
|
(a) |
the Charterer and each of the Security Parties maintains its existence as a company duly incorporated and validly existing and, where applicable, in good standing under the laws of its
jurisdiction of incorporation in compliance with all applicable law; and
|
|
(b) |
the Charterer and each of the Security Parties is managed and administered in the manner that is required by the Transaction Documents.
|
10. |
Subordination
|
|
(a) |
Pursuant to paragraph (z)(iii) of Clause 47.1 (General Covenants) of the Charter, the Guarantor acknowledges to and undertakes with the Owner that,
at all times throughout the Charter Period, all shareholder's and intercompany
|
|
(i) |
are and shall be subordinated in all respects to all amounts owing and which may in future become owing by the Charterer under the Charter and the other Transaction Documents;
|
|
(ii) |
shall not be repaid or be subject to any payment of interest (although interest may accrue);
|
|
(iii) |
are and shall remain unsecured by any Security Interest over the whole or any part of the assets of the Charterer; and
|
|
(iv) |
are not and shall not be capable of becoming subject to any right of set-off or counterclaim.
|
|
(b) |
Pursuant to paragraph (aa)(iv) of Clause 47.1 (General Covenants) of the Charter, the Guarantor acknowledges to and undertakes with the Owner that,
at all times throughout the Charter Period, all shareholder's and intercompany advances from time to time made by the Guarantor or any other member of the Group to the Charterer:
|
|
(i) |
shall be non-interest bearing;
|
|
(ii) |
are and shall remain unsecured by any Security Interest over the whole or any part of the assets of the Charterers;
|
|
(iii) |
are not and shall not be capable of becoming subject to any right of set-off or counterclaim; and
|
|
(iv) |
upon occurrence of a Termination Event which is continuing:
|
|
(A) |
shall not be repaid; and
|
|
(B) |
shall be subordinated in all respects to all amounts owing and which may in future become owing by the Charterers under this Charter and the other Transaction Documents.
|
11. |
Financial Statements
|
|
(a) |
as soon as the same become available, but in any event within 120 days after the end of each of its financial years, its audited consolidated financial statements for that financial year;
and
|
|
(b) |
as soon as the same become available, but in any event within 75 days after the end of each half of each of its financial years, its unaudited consolidated financial statements for that
financial half year.
|
12. |
Compliance Certificate
|
|
(a) |
It shall supply to the Owner, with each set of financial statements delivered pursuant to paragraphs (a) and (b) of Clause 11 (Financial Statements)
of this
|
|
(b) |
Each Compliance Certificate delivered pursuant to paragraph (a) above shall be signed by its director or its chief financial officer.
|
13. |
Requirements as to financial statements
|
|
(a) |
Each set of financial statements delivered by it pursuant to Clause 11 (Financial statements) shall be certified by (its director or its chief
financial officer) as giving a true and fair view of (in the case of any such financial statements which are audited) or fairly representing (in the case of any such financial statements which are unaudited) its consolidated financial
condition and operations as at the date of and for the period in relation to which those financial statements were drawn up.
|
|
(b) |
It shall procure that each set of financial statements delivered pursuant to Clause 11 (Financial Statements) of this Schedule is in the English
language and prepared using GAAP, the accounting practices and financial reference periods consistent with those applied in the preparation of its Original Financial Statements unless, in relation to any set of financial statements, it
notifies the Owner that there has been a change in GAAP, the accounting practices or financial reference periods and its auditors deliver to the Owner:
|
|
(i) |
a description of any change necessary for those financial statements to reflect the GAAP, the accounting practices and financial reference periods upon which its Original Financial
Statements were prepared; and
|
|
(ii) |
sufficient information, in form and substance as may be reasonably required by the Owner, to enable the Owner to determine whether Clause 14 (Financial
Covenants) of this Schedule has been complied with and make an accurate comparison between the financial position indicated in those financial statements and its Original Financial Statements.
|
14. |
Financial Covenants
|
|
(a) |
The Guarantor undertakes that it shall ensure at all times:
|
|
(i) |
Leverage Ratio shall not at any time exceed 75%; and
|
|
(ii) |
Free Liquidity shall not be less than the aggregate of the following:
|
|
(A) |
US$1,000,000 times number of Fleet Vessels which are Suezmax vessels;
|
|
(B) |
US$750,000 times number of Fleet Vessels which are MR tankers; and
|
|
(C) |
US$500,000 times number of MR tankers are bareboat chartered-in to a member of the Group.
|
|
(b) |
The financial covenants set out in paragraph (a) shall be tested by reference to the financial statements and Compliance Certificates delivered by the Guarantor pursuant to Clause 11 (Financial Statements), Clause 12 (Compliance Certificate) and Clause 13 (Requirements as to financial statements) of
this Schedule in respect of the Relevant Period.
|
|
(c) |
In this Clause:
|
|
(i) |
Cash means, at any time, the aggregate at such time of the amounts categorised as Cash and Cash Equivalent in the Guarantor's consolidated
financial statements.
|
|
(ii) |
Cash Equivalent Investments means investments that are short term investments (excluding equity investments) which are readily convertible into
cash without incurring any significant premium or penalty.
|
|
(iii) |
Consolidated Total Debt in respect of the Guarantor means at any time the aggregate amount of all obligations of the Group which would, in
accordance with GAAP, be considered as consolidated total debt of the Group.
|
|
(iv) |
Consolidated Total Net Debt in respect of the Guarantor means at any time Consolidated Total Debt less Cash and Cash Equivalent and Restricted
Cash.
|
|
(v) |
Fleet Vessel means, at any time, each vessel registered in the name of a member of the Group as owner.
|
|
(vi) |
Free Liquidity means, at any time, any unrestricted Cash and Cash Equivalent of the Guarantor which is not subject to any security interest
adjusted to include any Cash held under any minimum liquidity requirements and debt service accounts.
|
|
(vii) |
Joint Venture Vessel means any vessel registered in the name of an owner whose shareholding is owned by the Guarantor by 50% or more.
|
|
(viii) |
Leverage Ratio means, the ratio (expressed as a percentage) of:
|
|
(1) |
the Consolidated Total Net Debt; and
|
|
(2) |
the aggregate Market Value of all Fleet Vessels, including 50% of Joint Venture Vessels.
|
|
(ix) |
Market Value means, in relation to a Fleet Vessel and a Joint Venture Vessel, at a relevant date, one (1) valuation obtained by the Charterer (or
failing which the Owner) and prepared:
|
|
(1) |
on a date no earlier than thirty (30) days prior to the relevant date;
|
|
(2) |
by one (1) Approved Valuer;
|
|
(3) |
with or without physical inspection of such Fleet Vessel or Joint Venture Vessel;
|
|
(4) |
on the basis of a sale for prompt delivery for cash on normal arm's length commercial terms as between a willing seller and a willing buyer, free of any existing charter or other contract
of employment; and
|
|
(5) |
if a range of valuation is given by the Approved Valuer, the lower end of the range shall apply,
|
|
(x) |
Relevant Period means each period of six (6) months immediately prior to the date of computation.
|
|
(xi) |
Restricted Cash means, at any time, the aggregate at such time of the amounts categorised as Restricted Cash in the Guarantor's consolidated
financial statements.
|
15. |
Notification
|
|
(a) |
notify the Owner as soon as it becomes aware of the occurrence of:
|
|
(i) |
any Termination Event; and
|
|
(ii) |
any other matters which might lead to an occurrence of any Termination Event; and
|
|
(b) |
notify the Owner of any steps or action which it is taking, or is considering taking, to remedy or mitigate the effect of such occurrence.
|
16. |
Information: miscellaneous
|
|
(a) |
all documents dispatched by it to its shareholders (or any class of them) or its creditors generally at the same time as they are despatched (other than any document which is required to
be filed by the Guarantor in accordance with the rules of, and has been filed and posted onto any electronic website maintained by, any stock exchange on which shares in or other securities of the Guarantor are listed);
|
|
(b) |
promptly, any announcement, notice or other document relating specifically to the Guarantor posted onto any electronic website maintained by any stock exchange on which shares in or other
securities of the Guarantor are listed or any electronic website required by any such stock exchange to be maintained by or on behalf of the Guarantor;
|
|
(c) |
promptly upon becoming aware of them, details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against it, and which might, if
adversely determined, have a Material Adverse Effect;
|
|
(d) |
promptly upon becoming aware of them, details of any judgment or order of a court, arbitral body or agency which is made against it, and which might have a Material Adverse Effect;
|
|
(e) |
promptly, such information regarding its consolidated financial condition, business and operations as the Owner may reasonably request;
|
|
(f) |
promptly, notice of any change in its authorised signatories signed by its director accompanied by specimen signatures of any new authorised signatories; and
|
|
(g) |
promptly, such information and records regarding the Shares as the Chargee may reasonably request.
|
17. |
Taxes
|
|
(a) |
file or cause to be filed all tax returns required to be filed in all jurisdictions in which it is situated or carries on business or otherwise is subject to taxation; and
|
|
(b) |
pay all taxes shown to be due and payable on such returns or any assessments made against it, except to the extent these are contested in good faith and by appropriate means where such
payment may be lawfully withheld and for which adequate reserves have been established by it taking into account the amount of taxes payable.
|
18. |
No merger
|
19. |
Change of Control
|
|
(a) |
Save with the prior written consent of the Owner, it shall ensure that no Change of Control occurs.
|
|
(b) |
Save with the prior written consent of the Owner, there shall not be any transfer or disposal of:
|
|
(i) |
the legal or beneficial shareholding of the Charterer; or
|
|
(ii) |
the legal or beneficial shareholding of the Guarantor,
|
20. |
Sanctions
|
|
(a) |
It shall comply, and shall procure that each other Security Party complies, with all laws and regulations in respect of Sanctions, and in particular, it shall ensure that the Charterer
shall effect and maintain a sanctions compliance policy to ensure compliance with all such laws and regulations implemented from time to time.
|
|
(b) |
It will ensure that the Vessel shall not be employed, operated or managed in any manner which (i) is contrary to any Sanctions and in particular, the Vessel shall not be used by or for the
benefit for any party which is a target of Sanctions, or trade to any Restricted Country; or (ii) would trigger the operation of any sanctions limitation or exclusion clause in any insurance documentation.
|
|
(c) |
It will, and will procure that each other Security Party will, promptly notify the Owner and provide all information in relation to its business and operations which may be relevant for
the purposes of ascertaining whether it is in compliance with all laws and regulations relating to Sanctions, and in particular, it shall notify the Owner in writing immediately upon being aware that any of its shareholders or directors,
officers of employees is a Restricted Person or has otherwise become a target of Sanctions.
|
From:
|
TOP SHIPS INC.
|
a corporation incorporated in the Republic of the Marshall Islands with limited liability and registration no. 3571
(as Guarantor) |
|
With copy to:
|
Monte Carlo One Shipping Company Limited
|
a corporation incorporated in the Republic of the Marshall Islands with limited liability and registration no. 55324
(as Charterer) |
|
To:
|
Oriental Fleet TANKER 13 Limited
|
(东方富利 TANKER13 有限公司)
|
|
a corporation incorporated in the Republic of the Marshall Islands with limited liability and registration no. 101327
(as Owner) |
|
1. |
We refer to the Charter and the Guarantee (as defined in the Charter). This is a Compliance Certificate. Terms defined in the Charter and the Guarantee have the same meaning when used in
this Compliance Certificate unless given a different meaning in this Compliance Certificate.
|
2. |
We confirm to the Owner that as at the date of [the audited consolidated financial statements of the Group in respect of the financial year ended on [●] / the consolidated financial
statements of the Group in respect of the financial period ended on [●]]:
|
|
(a) |
we are in compliance with the covenants and undertakings in Clause 14 (Financial Covenants) of Schedule 2 to of the Guarantee;
|
|
(b) |
Consolidated Total Net Debt is [.] and Market Value of the Fleet Vessels including 50% of Joint Venture Vessels is [●] and therefore
Leverage Ratio is [●] and does not exceed 75%;
|
|
(c) |
Free Liquidity is US$[●], which is not less than US$[●], being the aggregate of the following:
|
|
(i) |
US$[●], which is calculated by US$1,000,000 times the number of Fleet Vessels which are Suezmax vessels, being [●];
|
|
(ii) |
US$[●], which is calculated by US$750,000 times the number of Fleet Vessels which are MR tankers, being [●]; and
|
|
(iii) |
US$[●], which is calculated by US$500,000 times the number of MR tankers are bareboat chartered-in to a member of the Group, being [●].
|
3. |
We set out below calculations establishing the figures in paragraph 2:
|
4. |
We also confirm that no Termination Event is continuing which has not been waived as at the date of this Compliance Certificate.
|
SIGNED as a deed by
|
)
|
|
, Attorney for
|
)
|
|
TOP SHIPS INC.
|
)
|
|
under a power of attorney
|
)
|
|
dated 4 July 2019
|
)
|
|
in the presence of:
|
)
|
SIGNED for and on behalf of
|
)
|
|
ORIENTAL FLEET TANKER 13 LIMITED
|
)
|
|
(东方富利 TANKER13 有限公司)
|
)
|
|
by , Director
|
)
|
|
in the presence of:
|
)
|
32.
|
Definitions
|
1
|
33.
|
Charter Period
|
21
|
34.
|
Cancellation
|
21
|
35.
|
Conditions Precedent and Conditions Subsequent
|
21
|
36.
|
Delivery
|
22
|
37.
|
Charterhire
|
23
|
38.
|
Possession of Vessel
|
28
|
39.
|
Insurance
|
29
|
40.
|
Termination and Redelivery; War; Total Loss
|
36
|
41.
|
Fees and Expenses; Indemnities;
|
41
|
42.
|
No Waiver of Rights
|
44
|
43.
|
Mortgage and assignment
|
44
|
44.
|
Notices
|
45
|
45.
|
Termination Events
|
46
|
46.
|
Representations and Warranties
|
49
|
47.
|
Charterers' undertakings
|
52
|
48.
|
Purchase Option
|
59
|
49.
|
Purchase Obligation
|
60
|
50.
|
Sale of the Vessel by Purchase Option and Purchase Obligation
|
60
|
51.
|
No Set-off or Tax deduction; FATCA Provisions
|
62
|
52.
|
Increased Costs
|
64
|
53.
|
Governing Law and Jurisdiction
|
66
|
54.
|
Miscellaneous
|
67
|
Execution page
|
68
|
|
Schedule 1 : Certificate of Delivery and Acceptance
|
70
|
|
Schedule 2 : Charterhire Schedule
|
71
|
|
Schedule 3 : Collateral Owners, Collateral Charterers and Collateral Vessels
|
86
|
|
32. |
DEFINITIONS
|
32.1 |
In this Charter the following terms shall have the meanings ascribed to them below:
|
|
(a) |
an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation, lodgement or registration; or
|
|
(b) |
in relation to anything which will be fully or partly prohibited or restricted by law if a Governmental Agency intervenes or acts in any way within a specified period after lodgement, filing, registration or
notification, the expiry of that period without intervention or action.
|
|
(a) |
in relation to the definition of Quotation Day and to any day on which LIBOR is to be determined, on which banks and the relevant financial markets are open for general business in London;
|
|
(b) |
in relation to any date for payment of amounts under the Transaction Documents, on which banks and the relevant financial markets are open for general business in Hong Kong, London, Shanghai, Piraeus and the
principal financial centre of the country of the currency of payment; and
|
|
(c) |
in relation to any other matter, on which banks are open for general business in Hong Kong, Shanghai and Piraeus.
|
|
(a) |
the Guarantor ceases to control the Charterers; or
|
|
(b) |
the Substantial Shareholder ceases to control the Guarantor or the Charterers,
|
|
(a) |
in respect of the Commencement Date, the Upfront Charterhire;
|
|
(b) |
in respect of a Payment Date, the aggregate of the amount of (i) the Fixed Charterhire and (ii) the Variable Charterhire, payable under this Charter on that Payment Date; and
|
|
(c) |
in respect of the last Payment Date, the aggregate of the amount of (i) the Balloon Payment, (ii) the Fixed Charterhire and (iii) the Variable Charterhire, payable under this Charter on that Payment Date.
|
|
(a) |
all freight, hire and passage moneys, compensation payable in the event of requisition of the Vessel 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 the Vessel;
|
|
(b) |
if and whenever the Vessel is employed on terms whereby any moneys falling within paragraph (a) are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or sharing
arrangement which is attributable to the Vessel; and
|
|
(c) |
all other payments or proceeds of any kind whatsoever relating to the Vessel as would be deemed "earnings" under GAAP or other applicable accounting principles.
|
Beneficiary Bank:
|
Alpha Bank AE
|
|
Shipping Finance Division
|
||
93, Akti Miaouli
|
||
185-38 Piraeus Greece
|
||
Swift Code:
|
CRBAGRAAXXX
|
|
Beneficiary Name:
|
Monte Carlo Seven Shipping Company Limited
|
|
Account Number:
|
960 01 5006 021109
|
|
IBAN:
|
GR21 0140 9600 9600 1500 6021 109
|
|
|
(a) |
any claim which relates to the Vessel or its passengers or cargo from time to time by any governmental, judicial or regulatory authority which arises out of an Environmental Incident or which relates to any
Environmental Law; or
|
|
(b) |
any claim by any other person in relation to the Vessel or its passengers or cargo from time to time which relates to an Environmental Incident or an alleged Environmental Incident,
|
|
(a) |
any release of Environmentally Sensitive Material from the Vessel;
|
|
(b) |
any incident in which Environmentally Sensitive Material is released from a vessel other than the Vessel and which involves a collision between the Vessel and such other vessel or some other incident of
navigation or operation, in either case, in connection with which the Vessel is actually liable to be arrested, attached, detained or injuncted and/or the Vessel and/or the Owners and/or the Charterers and/or any other operator or manager
of the Vessel is at fault or otherwise liable to any legal or administrative action; or
|
|
(c) |
any other incident involving the Vessel in which Environmentally Sensitive Material is released otherwise than from the Vessel and in connection with which the Vessel is actually arrested and/or where the
Owners and/or the
|
|
(a) |
the Existing Mortgage;
|
|
(b) |
the general assignment dated 20 May 2016 and made between the Charterers (as owner) and the Existing Mortgagee (as security trustee);
|
|
(c) |
the share security deed dated 11 May 2016 and made between the Guarantor (as shareholder) and the Existing Mortgagee (as security trustee);
|
|
(d) |
the charterparty assignment dated 20 May 2016 and made between the Charterers (as owner) and the Existing Mortgagee (as security trustee);
|
|
(e) |
the warranty assignment dated 11 May 2016 and made between the Charterers (as assignor) and the Existing Mortgagee (as security trustee);
|
|
(f) |
the accounts pledge agreement dated 11 May 2016 and made between, among others, the Charterers (as pledger) and the Existing Mortgagee (as security trustee and original pledgee);
|
|
(g) |
the master agreement assignment dated 19 May 2016 and made between the Charterers (as assignor) and the Existing Mortgagee (as security trustee);
|
|
(h) |
the commercial manager's undertaking dated 20 May 2016 and executed by Central Shipping Monaco SAM in favour of the Existing Mortgagee; and
|
|
(i) |
the technical manager's undertaking dated 20 May 2016 and executed by Central Mare in favour of the Existing Mortgagee ,
|
|
(a) |
sections 1471 to 1474 of the Code or any associated regulations;
|
|
(b) |
any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of any law
or regulation referred to in paragraph (a) above; or
|
|
(c) |
any agreement pursuant to the implementation of any treaty, law or regulation referred to in paragraph (a) or (b) above with the US Internal Revenue Service, the US government or any governmental or taxation
authority in any other jurisdiction.
|
|
(a) |
moneys borrowed;
|
|
(b) |
any amount raised by acceptance under any acceptance credit facility or dematerialised equivalent;
|
|
(c) |
any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;
|
|
(d) |
the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with GAAP as at the date of this Agreement, be treated as a balance sheet liability (other than any
liability in respect of a lease or hire purchase contract which would, in accordance with GAAP in force prior to 1 January 2019, have been treated as an operating lease);
|
|
(e) |
receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);
|
|
(f) |
any amount raised under any other transaction (including any forward sale or purchase agreement) of a type not referred to in any other paragraph of this definition having the commercial effect of a borrowing;
|
|
(g) |
any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative transaction, only the marked to
market value (or, if any actual amount is due as a result of the termination or close-out of that derivative transaction, that amount) shall be taken into account);
|
|
(h) |
any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; and
|
|
(i) |
the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (h) above.
|
|
(a) |
all policies and contracts of insurance, including entries of the Vessel in any protection and indemnity or war risks association, which are effected in respect of the Vessel or otherwise in relation to it
whether before, on or after the date of this Charter; and
|
|
(b) |
all rights, proceeds and other assets relating to, or derived from, any of the foregoing, including any rights to a return of a premium and any rights in respect of any claim whether or not the relevant policy,
contract of insurance or entry has expired on or before the date of this Charter.
|
|
(a) |
any legal opinion delivered pursuant to Clause 5 of Part B and Clause 2 of Part D of Addendum No.1; or
|
|
(b) |
any legal opinion which the Creditor Parties may obtain or arrange with respect to the Charterers or any other Security Parties.
|
|
(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
|
|
(b) |
the time barring of claims under the Limitation Act (1980) and the Foreign Limitation Periods Act 1984, the possibility that an undertaking to assume liability for, or indemnify a person against, non-payment of
any stamp duty may be void or the defences of set-off or counter-claim;
|
|
(c) |
similar principles, rights and defences under the laws of any Relevant Jurisdiction; and
|
|
(a) |
the applicable Screen Rate as of 11:00 a.m. (London time) on the Quotation Day for Dollars and for a period of three (3) months; or
|
|
(b) |
as otherwise determined pursuant to Clause 37.8.
|
|
(a) |
in relation to commercial, technical and crew management of the Vessel, the ship management agreement dated 1 January 2019 and made between the Charterers and Central Shipping; and
|
|
(b) |
in relation to the technical management of the Vessel, the sub-management agreement dated 1 January 2019 and made between Central Shipping and Central Mare,
|
|
(a) |
at or about noon (London time) on the Quotation Day for the relevant Hire Calculation Period the relevant Screen Rate is not available and none or only one of leading banks in the London interbank market
supplies a rate to the
|
|
(b) |
before close of business in Hong Kong on the Quotation Day for the relevant Hire Calculation Period, the cost to the Owners of funding the Charterhire Principal from whatever source it may select would be in
excess of LIBOR.
|
|
(a) |
on a date no earlier than thirty (30) days prior to the relevant date;
|
|
(b) |
by one (1) Approved Valuer;
|
|
(c) |
with or without physical inspection of the Vessel;
|
|
(d) |
on the basis of a sale for prompt delivery for cash on normal arm's length commercial terms as between a willing seller and a willing buyer, free of any existing charter or other contract of employment; and
|
|
(e) |
if a range of valuation is given by the Approved Valuer, the lower end of the range shall apply,
|
|
(a) |
on a date no earlier than fifteen (15) days prior to the MOA Delivery Date;
|
|
(b) |
by two (2) Approved Valuers respectively, one (1) appointed by the Owners and one (1) appointed by the Charterers;
|
|
(c) |
with or without physical inspection of the Vessel;
|
|
(d) |
on the basis of a sale for prompt delivery for cash on normal arm's length commercial terms as between a willing seller and a willing buyer, free of any existing charter or other contract of employment; and
|
|
(e) |
if a range of valuation is given by an Approved Valuer, the lower end of the range shall apply for that Approved Valuer,
|
|
(a) |
the business, operations, property, condition (financial or otherwise) or prospects of the Charterers or any other Security Party;
|
|
(b) |
the ability of the Charterers or any other Security Party to perform its material obligations under any Transaction Document to which it is a party;
|
|
(c) |
the validity, legality or enforceability of any Transaction Document or the rights or remedies of the Owners or any other Creditor Party under any of the Transaction Documents; or
|
|
(d) |
the validity, legality or enforceability of, or the effectiveness or priority and ranking of any Security Interests granted pursuant to any of the Security Documents.
|
|
(a) |
Security Interests created by a Transaction Document or a Financial Instrument;
|
|
(b) |
prior to Delivery, Security Interests created by the Existing Security Documents;
|
|
(c) |
liens for unpaid master's and crew's wages in accordance with the ordinary course of operation of the Vessel or in accordance with usual reputable maritime practice;
|
|
(d) |
liens for salvage;
|
|
(e) |
liens for master's disbursements incurred in the ordinary course of trading;
|
|
(f) |
any other liens arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of the Vessel where the Charterers are contesting the claim giving rise to such lien in
good faith by appropriate steps and for the payment of which adequate reserves have been made in case the Charterers finally have to pay such claim so long as any such proceedings shall not, and may reasonably be considered unlikely to,
lead to the arrest, sale, forfeiture or loss of the Vessel or any interest in the Vessel;
|
|
(g) |
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 Charterers are
prosecuting or defending such action in good faith by appropriate steps;
|
|
(h) |
Security Interests arising by operation of law in respect of taxes which are not overdue or for payment of taxes which are overdue for payment but which are being contested by the Charterers in good faith by
appropriate steps and in respect of which adequate reserves have been made; and
|
|
(i) |
such other Security Interests as permitted in writing by the Owners and/or the Security Trustee.
|
|
(a) |
in relation to the first Hire Calculation Period for which the Interest Rate for that Hire Calculation Period is to be determined, five (5) Business Days before the first day of that period; and
|
|
(b) |
in relation to any other period for which an Interest Rate is to be determined, fourteen (14) Business Days before the first day of that period (or such later date as the Owners may agree),
|
|
(a) |
its jurisdiction of incorporation;
|
|
(b) |
any jurisdiction where any property owned by it and charged under a Transaction Document is situated;
|
|
(c) |
any jurisdiction where it conducts its business; and
|
|
(d) |
any jurisdiction whose laws govern the perfection of any of the Transaction Documents entered into by it creating a Security Interest,
|
|
(a) |
the Charterers, the Guarantor, the Approved Managers and any party providing security to the Owners and/or the Security Trustee for the
|
|
(b) |
the Collateral Security Parties of both Collateral Vessels,
|
|
(a) |
delivery of the original share certificates for the shares held by the Guarantor in the Company and the ancillary documents to be delivered under the Deed of Charge;
|
|
(b) |
service by the Greek court bailiff of an original signed Account Pledge on the Account Bank and the Charterers;
|
|
(c) |
execution of all notices, acknowledgments and consents as required under the Transaction Documents; and
|
|
(d) |
any other Authorisations of the Transaction Documents as may be required or recommended in any Legal Opinion.
|
|
(a) |
which is controlled, directly or indirectly, by the first mentioned company or corporation;
|
|
(b) |
more than half the issued equity share capital of which is beneficially owned, directly or indirectly, by the first mentioned company or corporation; or
|
|
(c) |
which is a Subsidiary of another Subsidiary of the first mentioned company or corporation,
|
|
(a) |
the Purchase Option Price applicable on the relevant date as if that relevant date is a Purchase Option Date; and
|
|
(b) |
(i) the Breakfunding Costs and (ii) any costs incurred and expenses incurred by the Owners and any other Creditor Parties (and their financiers (if any)) in locating, repossessing or recovering the Vessel or
collecting any payments due under this Charter or in obtaining the due performance of the obligations of the Charterers under this Charter or the other Transaction Documents and any default interest in relation thereto.
|
|
(a) |
actual, constructive, compromised, agreed or arranged total loss of the Vessel;
|
|
(b) |
any expropriation, requisition or acquisition of the Vessel, whether for full consideration, a consideration less than its proper value, a nominal consideration or without any consideration (excluding a
requisition for hire); or
|
|
(c) |
any arrest, capture, seizure, confiscation or detention of the Vessel (including any hijacking or theft but excluding any event specified in paragraph (b) of this definition), which is effected by any
Governmental Agency or by any person or persons claiming to be or to represent a Governmental Agency or other persons unless it is redelivered within three (3) months to the full control of the Owners or the Charterers.
|
|
(a) |
the Charterers, if they are resident for tax purposes in the US; or
|
|
(b) |
any other Security Parties some or all of whose payments under the Transaction Documents are from sources within the US for US federal income tax purposes.
|
32.2 |
In this Charter:
|
|
(a) |
agreed form means, in relation to a document, such document in a form agreed in writing between (i) the Owners or the Security Trustee and (ii) the Charterers;
|
|
(b) |
asset includes every kind of property, asset, interest or right, including any present, future or contingent right to any revenues or other payment;
|
|
(c) |
company includes any partnership, joint venture and unincorporated association;
|
|
(d) |
consent includes an Authorisation, consent, approval, resolution, licence, exemption, filing, registration, notarisation and legalisation;
|
|
(e) |
contingent liability means a liability which is not certain to arise and/or the amount of which remains unascertained;
|
|
(f) |
continuing means, in relation to any Termination Event, a Termination Event which has not been waived by the Owners or remedied to the satisfaction of the Owners;
|
|
(g) |
document includes a deed; also a letter, fax or telex;
|
|
(h) |
expense means any kind of cost, charge or expense (including all legal costs, charges and expenses) and any applicable value added or other tax;
|
|
(i) |
including shall be construed as including without limitation (and cognate expressions shall be construed similarly);
|
|
(j) |
indebtedness includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent;
|
|
(k) |
law includes any order or decree, any form of delegated legislation, any treaty or international convention and any regulation or resolution of the Council of the
European Union, the European Commission, the United Nations or its Security Council;
|
|
(l) |
legal or administrative action means any legal proceeding or arbitration and any administrative or regulatory action or investigation;
|
|
(m) |
liability includes every kind of debt or liability (present or future, certain or contingent), whether incurred as principal or surety or otherwise;
|
|
(n) |
months shall be construed in accordance with Clause 32.3;
|
|
(o) |
person includes any individual, firm, company, corporation, government, state or agency of a state or any association, trust, joint venture, consortium, partnership or
other entity (whether or not having separate legal personality);
|
|
(p) |
policy, in relation to any insurance, includes a slip, cover note, certificate of entry or other document evidencing the contract of insurance or its terms;
|
|
(q) |
protection and indemnity risks means the usual risks covered by the UK P&I Club or any other protection and indemnity association which is a member of the
International Group of P&I Clubs acceptable to the Owners and the Security Trustee including pollution risks, extended passenger cover and the proportion (if any) of any sums payable to any other person or persons in case of collision
which are not recoverable under the hull and machinery policies by reason of the incorporation in them of Clause 6 of the International Hull Clauses (1/11/02 or 1/11/03), Clause 8 of the Institute Time Clauses (Hulls)(1/10/83) or Clause 8
of the Institute Time clauses (Hulls) (1/11/1995) or the Institute Amended Running Down clause (1/10/71) or any equivalent provision;
|
|
(r) |
regulation includes any regulation, rule, official directive, request or guideline (whether or not having the force of law) of any governmental, intergovernmental or
supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;
|
|
(s) |
tax includes any present or future tax, duty, impost, levy or charge of any kind which is imposed by any state, any political sub-division of a state or any local or
municipal authority (including any such imposed in connection with exchange controls), and any connected penalty, interest or fine;
|
|
(t) |
a provision of law is a reference to that provision as amended or re-enacted; and
|
|
(u) |
a time of day is a reference to Hong Kong time.
|
32.3 |
Meaning of month
|
|
(a) |
(subject to paragraph (c) below) if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in which that period is to end if there is one,
or if there is not, on the immediately preceding Business Day;
|
|
(b) |
if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month; and
|
|
(c) |
if a Hire Calculation Period begins on the last Business Day of a calendar month, that Interest Period shall end on the last Business Day in the calendar month in which that Hire Calculation Period is to end.
|
32.4 |
In this Charter:
|
|
(a) |
references to a Transaction Document or any other document being in the form of a particular appendix or to any document referred to in the recitals include references to that form with any modifications to
that form which the Owners and/or the Security Trustee approve;
|
|
(b) |
references to, or to a provision of, a Transaction Document or any other document are references to it as amended or supplemented, whether before the date of this Charter or otherwise;
|
|
(c) |
references to, or to a provision of, any law include any amendment, extension, re-enactment or replacement, whether made before the date of this Charter or otherwise;
|
|
(d) |
references to Clauses, Sub-Clauses and Schedules are to be construed as references to clauses and sub-clauses of, and schedules to, this Charter; and
|
|
(e) |
words denoting the singular number shall include the plural and vice versa, and words importing a gender include every gender.
|
32.5 |
Headings
|
33. |
CHARTER PERIOD
|
33.1 |
The Charter Period shall commence on the Commencement Date.
|
33.2 |
Notwithstanding the foregoing and subject to the terms herein, this Charter shall be in full force and effect and valid, binding and enforceable against the Parties with effect from the date hereof.
|
33.3 |
The Charter Period shall, subject to the terms of this Charter, continue for a period from the Commencement Date to and including the date falling one hundred and nineteen (119) months after the second (2nd)
Payment Date.
|
34. |
CANCELLATION
|
35. |
CONDITIONS PRECEDENT AND CONDITIONS SUBSEQUENT
|
35.1 |
The obligation of the Owners to charter the Vessel to the Charterers hereunder is subject to and conditional upon:
|
|
(a) |
no Termination Event having occurred which is continuing;
|
|
(b) |
no other event has occurred which with the giving of notice or lapse of time would, if not remedied, constitute a Termination Event;
|
|
(c) |
the representations and warranties contained in Clause 46 being true and correct in all aspects on the date hereof by reference to the facts and circumstances then existing;
|
|
(d) |
the Charterers (as sellers) and the Owners having duly executed and entered into the MOA;
|
|
(e) |
the MOA Delivery occurring on or before the Cancelling Date;
|
|
(f) |
the Owners having received from the Charterers:
|
|
(i) |
no less than seven (7) days prior to Delivery, the documents or evidence set out in Part AI of Addendum No.1 in form and substance satisfactory to them;
|
|
(ii) |
no less than seven (7) Business Days prior to Delivery (or such later date as the Owners may agree), the documents or evidence set out in
|
|
(iii) |
no less than three (3) Business Days prior to Delivery (or such later date as the Owners may agree), the documents or evidence set out in Part AIII of Addendum No.1 in form and substance satisfactory to them;
|
|
(iv) |
no less than one (1) Business Day prior to Delivery, the documents or evidence set out in Part BI of Addendum No.1 in form and substance satisfactory to them; and
|
|
(v) |
on or before Delivery, the documents or evidence set out in Part BII of Addendum No.1 in form and substance satisfactory to them.
|
35.2 |
The obligation of the Owners to continue chartering the Vessel to the Charterers hereunder is subject to and conditional upon the Owners having received from the Charterers on or before such dates as specified
in Parts C and D of Addendum No.1 the documents or evidence set out in Parts C and D of Addendum No.1 in form and substance satisfactory to them.
|
35.3 |
Upon the requirements of Clause 35.1 and Clause 35.2 being fulfilled or waived to the satisfaction of the Owners, the Owners shall give notice thereof to the Charterers.
|
35.4 |
The conditions precedent set out in Clause 35.1 and the conditions subsequent set out in Clause 35.2 are for the sole benefit of the Owners and may be waived in whole or in part, with or without conditions
without prejudicing the right of the Owners to require fulfilment of such conditions in whole or in part at any time thereafter.
|
36. |
DELIVERY
|
36.1 |
Subject to the requirements of Clause 35.1 being fulfilled or waived to the satisfaction of the Owners, on delivery to and acceptance by the Owners of the Vessel from the Charterers as sellers under the MOA and
subject to the provisions of this Clause 36.1, the Vessel shall be deemed to have been delivered to, and accepted (without reservation) by, the Charterers under this Charter (irrespective of whether the Charterers shall become and be
entitled to the possession and use of the Vessel).
|
36.2 |
On Delivery, as evidence of the commencement of the Charter Period, the Charterers and the Owners shall sign the Certificate of Delivery and Acceptance. Without prejudice to this Clause, the Charterers shall be
deemed to have accepted the Vessel under this Charter, and the commencement of the Charter Period having started, on Delivery even if, for whatever reason, the Certificate of Delivery and Acceptance is not signed but Delivery has
occurred.
|
36.3 |
Without prejudice and notwithstanding the provisions of this Clause, the Charterers shall not be entitled for any reason whatsoever to refuse to accept delivery of the Vessel under this Charter once the Vessel
has been delivered to and accepted by the Owners from the Charterer as sellers under the MOA, and the Owners shall not be liable for any losses, cost or expenses whatsoever or howsoever arising including
|
|
(a) |
resulting directly or indirectly from any defect or alleged defect in the Vessel or any failure of the Vessel; or
|
|
(b) |
arising from any delay in the commencement of the Charter Period or any failure of the Charter Period to commence unless such delay or failure results solely from a failure by the Owners to pay the MOA Purchase
Price pursuant to, and in accordance with, the terms of the MOA.
|
36.4 |
The Owners will not and shall not be obliged to deliver the Vessel to the Charterers with any bunkers and unused lubricating oils and greases in storage tanks and unopened drums of the Vessel, but the Vessel
shall be delivered with whatever is onboard when delivered by the Charterers (as sellers) to the Owners (as buyers) under the MOA.
|
36.5 |
The Charterers hereby acknowledge and agree that the Owners are not the manufacturer or original supplier of the Vessel and that the Owners make no condition, term, representation or warranty, express or
implied (and whether statutory or otherwise) as to the Owners' title to the Vessel or as to the seaworthiness, merchantability, condition, design, operation, performance, quality, capacity or fitness for use or as to the eligibility of
the Vessel for any particular trade or operation or any other condition, term, representation or warranty whatsoever, express or implied, with respect to the Vessel. Acceptance of delivery by the Charterers or (as the case may be) deemed
delivery of the Vessel to the Charterers under this Charter shall be conclusive proof evidencing that, for the purposes of the obligations and liabilities of the Owners hereunder or in connection herewith, the Vessel is at that time
seaworthy, in accordance with the provisions of this Charter, in good working order and repair and without defect or inherent vice whether or not discoverable by the Charterers and free and clear of all liens, Security Interests and debts
of whatsoever nature save for the Security Interests granted pursuant to the Security Documents.
|
36.6 |
Notwithstanding and without prejudice to the foregoing Clause 36.5, the Charterers hereby waive all of their rights in respect of any condition, term, representation or warranty express or implied (and whether
statutory or otherwise) on the part of the Owners and all of their claims against the Owners howsoever and whatsoever that may arise in respect of the Vessel or the Owners' title thereto, or all of their rights therein or arising out of
the operation of the Vessel or the chartering thereof under this Charter (including in respect of the seaworthiness or otherwise of the Vessel).
|
36.7 |
The Charterers agree that the Owners shall be under no liability to supply any replacement Vessel or any piece or part thereof during any period when the Vessel is unusable and shall not be liable to the
Charterers or any other person as a result of the Vessel being unusable.
|
37. |
CHARTERHIRE
|
37.1 |
In consideration of the Owners agreeing to charter the Vessel to the Charterers under this Charter at the request of the Charterers, the Charterers hereby irrevocably and unconditionally agree to pay to the
Owners the Charterhire in respect of the chartering
|
37.2 |
Subject to the terms of this Clause, each instalment of the Fixed Charterhire and the Variable Charterhire shall be paid on each Payment Date on the following basis:
|
|
(a) |
the first instalment of the Charterhire shall be paid on the Commencement Date and shall comprise the Charterhire payable in advance in respect of the period from the Commencement Date up to and including the
date falling on the 10th day of the month falling immediately after the Commencement Date; and
|
|
(b) |
thereafter each instalment of Charterhire shall be paid on the date falling one (1) month thereafter and shall comprise the Charterhire payable in advance in respect of each such one (1) month's period,
PROVIDED THAT:
|
|
(i) |
the Charterers shall pay Variable Charterhire on the second (2nd) Payment Date which has accrued on the Charterhire Principal in respect of the shortened Hire Calculation Period commencing from the Commencement
Date and up to the second (2nd) Payment Date on a pro-rata basis; and
|
|
(ii) |
on the last Payment Date the Charterers shall pay to the Owners the Balloon Payment together with the last instalment of Fixed Charterhire and the last instalment of Variable Charterhire which together shall
comprise the Charterhire payable in arrears in respect of the one (1) month's period from the second (2nd) last Payment Date to the last Payment Date,
|
37.3 |
The Vessel shall not at any time be deemed off-hire and the Charterers' obligation to pay all Charterhire and other amounts payable in this Charter shall be paid in Dollars and shall be absolutely and
unconditionally payable under any and all circumstances and shall not be affected by any circumstances of any nature whatsoever including but not limited to:
|
|
(a) |
any set off, counterclaim, recoupment, defence, claim or other right which the Charterers may at any time have against the Owners or any other person for any reason whatsoever including, without limitation, any
act, omission or breach on the part of the Owners under this Charter or any other agreement at any time existing between the Owners and the Charterers;
|
|
(b) |
any change, extension, indulgence or other act or omission in respect of any indebtedness or obligation of the Charterers, or any sale, exchange, release or
|
|
(c) |
any title defect or Security Interest or any dispossession of the Vessel by title paramount or otherwise, unless caused by the fault or gross negligence of the Owners and/or the Security Trustee;
|
|
(d) |
any defect in the seaworthiness, condition, value, design, merchantability, operation or fitness for use of the Vessel or the ineligibility of the Vessel for any particular trade;
|
|
(e) |
any damage (including damage resulting in a Total Loss) to or forfeiture or court marshall's or other sale of the Vessel;
|
|
(f) |
any libel, attachment, levy, detention, sequestration or taking into custody of the Vessel or any restriction or prevention of or interference with or interruption or cessation in, the use or possession thereof
by the Charterers;
|
|
(g) |
any insolvency, bankruptcy, reorganization, arrangement, readjustment, dissolution, liquidation or similar proceedings by or against the Charterers;
|
|
(h) |
any invalidity, unenforceability, lack of due authorization or other defect, or any failure or delay in performing or employing with any of the terms and provisions of this Charter or any of the Transaction
Documents by any party to this Charter or any other person;
|
|
(i) |
any enforcement or attempted enforcement by any of the Owners or the other Creditor Parties of their rights under this Charter or any of the Transaction Documents executed or to be executed pursuant to this
Charter; or
|
|
(j) |
any loss of use of the Vessel due to deficiency or default or strike of officers or crew, fire, breakdown, damage, accident, defective cargo or any other cause which would or might but for this provision have
the effect of terminating or in any way affecting any obligation of the Charterers under this Charter.
|
37.4 |
Time of payment of Charterhire and other payments by the Charterers shall be of the essence of this Charter.
|
37.5 |
All payments of Charterhire and any moneys payable hereunder shall be made in Dollars.
|
37.6 |
All Charterhire and any other moneys payable hereunder shall be payable by the Charterers to the Owners Account.
|
37.7 |
Payment of Charterhire shall be at the Charterers' risk until receipt by the Owners of the payment into the Owners Account.
|
37.8 |
(a) If a Market Disruption Event occurs in relation to any Charterhire for any Hire Calculation Period, then the Interest Rate for the relevant period shall be the rate per annum which is the sum of:
|
|
(i) |
the Margin; and
|
|
(ii) |
the rate notified to the Charterers by the Owners in writing as soon as practicable and in any event before interest is due to be paid in respect of that Hire Calculation Period, to be that which expresses as a
percentage rate per annum the cost to the Owners of funding the Charterhire for such period from whatever comparable source it may select, provided that the Owners shall use their reasonable endeavours to provide or procure the provision
of the evidence of such rate.
|
|
(b) |
If a Market Disruption Event occurs and the Owners or the Charterers so require, the Owners and the Charterers shall enter into negotiations (for a period of not more than thirty (30) days) with a view to
agreeing a substitute basis for determining the rate of interest.
|
|
(c) |
Any alternative basis agreed pursuant to paragraph 37.8(b) above shall, with the prior consent of the Owners and the Charterers, be binding on both the Owners and the Charterers.
|
37.9 |
All stamp duty, value added tax, withholding or other taxes and import and export duties and all other similar types of charges which may be levied or assessed on or in connection with:
|
|
(a) |
the operation of this Charter in respect of the hire and all other payments to be made pursuant to this Charter and the remittance thereof to the Owners; and
|
|
(b) |
the import, export, purchase, delivery and re-delivery of the Vessel,
|
37.10 |
If requested by the Charterers, the Owners will use their reasonable endeavours to change their jurisdiction of incorporation to another jurisdiction reasonable designated by the Charterers, provided that:
|
|
(a) |
the new jurisdiction of incorporation of the Owners are acceptable to their financiers (if any);
|
|
(b) |
the Charterers shall be responsible for preparing all application, registration and other documents required for the change of jurisdiction of incorporation in form and substance acceptable to the Owners;
|
|
(c) |
the new jurisdiction of incorporation of the Owners is acceptable to the then current flag state of the Vessel for the purpose of maintaining the registration of the Vessel under that flag state in form and
substance acceptable to the Owners;
|
|
(d) |
the Charterers shall be responsible for preparing all application, registration and other documents required for registration of the Owners as foreign maritime entity in other relevant jurisdiction for the
purpose of maintaining the registration of the Vessel under the then current flag state in form and substance acceptable to the Owners;
|
|
(e) |
if a change of flag state is required as a result of the change of jurisdiction of incorporation of the Owners, such change of jurisdiction of incorporation of the Owners shall be subject to the prior written
consent of the Owners and the Owners' financiers (if any), and the Charterers shall be responsible for registration of the Vessel in such new flag state and pay to the Owners or their financier (if any) upon demand the legal fees,
registration fees and other duties (including any duties payable by the Owners and the Owners' financiers (if any)) imposed by the new registry or any taxing authority therein in connection with the preparation, negotiation and
registration of such new mortgage, other Financial Instruments (including any amendment or supplement thereto) and satisfactory legal opinions in favour of the Owners and/or their financier (if any); and
|
|
(f) |
all other fees, costs, expenses, payments, taxes, charges and liabilities whatsoever incurred by the Owners and/or their financiers (if any) relating to, arising out of or in connection with such change shall
be borne by the Charterers.
|
37.11 |
Any payment of the Termination Sum shall be made together with any other amount payable under this Charter.
|
37.12 |
If the Charterers fail to make any payment due under this Charter on the due date, they shall pay interest on such late payment at the Default Rate from the date on which such payment became due until the date
one (1) day prior to the date of payment thereof.
|
37.13 |
All default interest and any other payments under this Charter or any other Transaction Documents 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.
|
37.14 |
Any payment, which is due to be made on a day which is not a Business Day, shall be made on the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not). If
the last Payment Date is not a Business Day, any payment under the Transaction Documents which is due to be made on that day shall be made on the preceding Business Day.
|
37.15 |
(a) Without prejudice to Clause 37.2, the Charterers may prepay the Charterhire Principal at any time during the Charter Period (being at least $1,000,000 or an integral multiple thereof) together with any
Breakfunding Cost and expenses reasonably incurred by the Owners and the other Creditor Parties under this Charter and the other Transaction Documents in connection with or as a result of such prepayment, PROVIDED THAT (i) the Charterers
shall only be entitled to prepay the Charterhire Principal once a year and the aggregate amount of all prepayments during the Charter Period shall not exceed $5,000,000 under this Clause 37.15 and (ii) the Owners shall have received from
the Charterers not less than sixty (60) days' notice of their intention to make such prepayment, specifying the amount to be prepaid and the proposed date of such prepayment. Any amount prepaid pursuant to this Clause 37.15(a) shall be
applied towards reducing the instalments of Fixed Charterhire (for the avoidance of doubt,
|
|
(b) |
The Charterers shall not prepay all or any part of the Charterhire except at the times and in the manner expressly provided for in this Charter.
|
37.16 |
If the Financing Principal is less than US$25,600,000 or upon any prepayment made by the Charterers under Clause 37.15, the Owners shall provide the Charterers with a revised Schedule 2. The revised Schedule 2
shall be based on the actual amount of the Financing Principal and determination of the corresponding Upfront Charterhire with reference to the Market Value at Closing of the Vessel and taking account any prepayment under Clause 37.15
(each revised Schedule 2 referred to in this Clause 37.16 and throughout this Charter is a Revised Charterhire Schedule).
|
37.17 |
Each Revised Charterhire Schedule issued pursuant to Clause 37.16 shall (i) be deemed incorporated into this Charter in substitution for the then current Schedule 2, (ii) save for manifest error, be conclusive
and binding on the Owners and the Charterers and at any time, the latest Revised Charterhire Schedule incorporated pursuant hereto and (iii) for the purposes of this Charter, be conclusive evidence of the rate of Charterhire, Charterhire
Principal and the Purchase Option Price payable under this Charter and shall for all purposes be treated as if it had been attached as the Charterhire Schedule ab initio.
|
38. |
POSSESSION OF VESSEL
|
38.1 |
The Charterers shall not, without the prior written consent of the Owners and the Security Trustee, assign, mortgage or pledge the Vessel or any interest therein and shall not permit the creation of any
Security Interest thereon other than Permitted Security Interests.
|
38.2 |
The Charterers shall promptly notify any party (as the Owners may request) in writing that the Vessel is the property of the Owners and the Charterers shall provide the Owners with a copy of such written
notification and satisfactory evidence of that such party has received such written notification.
|
38.3 |
If the Vessel is arrested, seized, impounded, forfeited, detained or taken out of their possession or control (whether or not pursuant to any distress, execution or other legal process), the Charterers shall
procure the immediate release of the Vessel (whether by providing bail or procuring the provision of security or otherwise do such lawful things as the circumstances may require) and shall immediately notify the Owners of such event and
shall indemnify the Owners against all losses, costs or charges incurred by the Owners by reason thereof in re-taking possession or otherwise in re-acquiring the Vessel.
|
38.4 |
The Charterers shall pay and discharge or cause any Sub-Charterers of the Vessel to pay and discharge all obligations and liabilities whatsoever which have given or may give rise to liens on or claims
enforceable against the Vessel and take all reasonable steps to prevent a threatened arrest of the Vessel.
|
39. |
INSURANCE
|
39.1 |
The Charterers shall procure that such insurances are effected in form and substance satisfactory to the Owners, the Security Trustee and their financiers (if any):
|
|
(a) |
in Dollars;
|
|
(b) |
in the case of hull and machinery (and increased value insurance), fire and usual marine risks and war risks to cover an amount not less than the greater of (i) the Market Value of the Vessel for the time being
and (ii) one hundred and twenty per cent. (120%) of the Charterhire Principal then outstanding;
|
|
(c) |
in the case of oil pollution liability risks for the Vessel, for an aggregate amount equal to the highest level of cover from time to time available under protection and indemnity club entry and in the
international marine insurance market and for an amount of not less than US$1,000,000,000;
|
|
(d) |
in relation to protection and indemnity risks (including freight, demurrage and defence cover) in respect of the full tonnage of the Vessel;
|
|
(e) |
in relation to such other insurances reasonably required by the Owners, the Security Trustee and/or their financiers (if any) but excluding loss of hire and contingent liability insurance; and
|
|
(f) |
through approved brokers or with first class international insurers and/or underwriters acceptable to the Owners and the Security Trustee or, in the case of war risks and protection and indemnity risks, UK
P& I Club or any other approved war risks and protection and indemnity risks association which is a member of the International Group of P&I Clubs acceptable to the Owners and the Security Trustee,
|
39.2 |
In addition to the terms set out in Clause 13(a), to the extent required and acceptable to the relevant insurers and protection and indemnity club, the Charterers shall procure that the obligatory insurances
shall:
|
|
(a) |
subject always to paragraph (ii), name the Security Trustee, the Charterers and, subject to execution of the Manager's Undertakings, the Approved Managers as the only named assureds unless the interest of every
other named assured or co-assured is limited:
|
|
(i) |
in respect of any obligatory insurances for hull and machinery and war risks;
|
|
(A) |
to any provable out-of-pocket expenses that they have incurred and which form part of any recoverable claim on underwriters; and
|
|
(B) |
to any third party liability claims where cover for such claims is provided by the policy (and then only in respect of discharge of any claims made against them); and
|
|
(ii) |
in respect of any obligatory insurances for protection and indemnity risks, to any recoveries they are entitled to make by way of reimbursement following discharge of any third party liability claims made
specifically against them;
|
|
(b) |
subject to Clause 43, whenever a financier (if any) of the Owners requires:
|
|
(i) |
in respect of fire and other usual marine risks and war risks name (or be amended to name) such financier as additional named assured for its rights and interests, warranted no operational interest and with
full waiver of rights of subrogation against such financier, but without such financier thereby being liable to pay (but having the right to pay) premiums, calls or other assessments in respect of such insurance;
|
|
(ii) |
in relation to protection and indemnity risks, name (or be amended to name) such financier as additional insured or co-assured for its rights and interests to the extent permissible under the relevant
protection and indemnity club rules; and
|
|
(iii) |
name such financier (as applicable) and the Security Trustee (as applicable) as respectively the first ranking loss payee and the second ranking loss payee (and in the absence of such financier, as first
ranking loss payee) in accordance with the terms of the relevant loss payable clauses approved by such financier and the Security Trustee with such directions for payment in accordance with the terms of such relevant loss payable clause,
as the Security Trustee and their financiers (if any) may specify;
|
|
(c) |
provide that all payments by or on behalf of the insurers under the obligatory insurances to the Owners, the Security Trustee and/or their financiers (as applicable) shall be made without set-off, counterclaim
or deductions or condition whatsoever;
|
|
(d) |
provide that such obligatory insurances shall be primary without right of contribution from other insurances which may be carried by the Owners, the Security Trustee or their financiers (if any);
|
|
(e) |
provide that the Owners, the Security Trustee and/or their financiers (if any) may make proof of loss if the Charterers fail to do so; and
|
|
(f) |
provide that if any obligatory insurance is cancelled, or if any substantial change is made in the coverage which adversely affects the interest of the Owners, the Security Trustee and/or their financiers (if
any), or if any obligatory insurance is allowed to lapse for non-payment of premium, such cancellation, change or lapse shall not be effective with respect to the Owners, the Security Trustee and/or their financiers (if any) for fourteen
(14) days) after receipt by the Owners, the Security Trustee and/or their financiers (if any) of prior written notice from the insurers of such cancellation, change or lapse.
|
39.3 |
The Charterers shall:
|
|
(a) |
at least fourteen (14) days prior to Delivery, notify in writing the Owners and the Security Trustee of the terms and conditions of all Insurances and the brokers (or other insurers) and any protection and
indemnity or war risks association through or with whom the Charterers have arranged all Insurances;
|
|
(b) |
at least fourteen (14) days before the expiry of any obligatory insurance notify the Owners and the Security Trustee (copied to their financiers (if any)) of the brokers (or other insurers) and any protection
and indemnity or war risks association through or with whom the Charterers propose to renew that obligatory insurance and of the proposed terms of renewal and obtain the Owners' and the Security Trustee's approval to such matters;
|
|
(c) |
at least seven (7) days before the expiry of any obligatory insurance, procure that such obligatory insurance is renewed or to be renewed on its expiry date in accordance with the provisions of this Charter;
|
|
(d) |
procure that the approved brokers and/or the war risks and protection and indemnity associations with which such a renewal is effected shall promptly after the renewal or the effective date of the new insurance
and protection and indemnity cover notify the Owners and the Security Trustee (copied to their financiers (if any)) in writing of the terms and conditions of the renewal; and
|
|
(e) |
as soon as practicable after the expiry of any obligatory insurance, deliver to the Owners and the Security Trustee a letter of undertaking as required by this Charter in respect of such Insurances for the
Vessel as renewed pursuant to Clause 39.3(c) together with copies of the relevant policies or cover notes or entry certificates duly endorsed with the interest of the Security Trustee and/or their financiers (if any).
|
39.4 |
The Charterers shall ensure that all insurance companies, underwriters, and (if any) insurance brokers provide the Owners and the Security Trustee with all policies, cover notes and certificates of entry
relating to the obligatory insurances which they are to
|
|
(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 this Charter, the other Transaction Documents and the Financial
Instruments;
|
|
(b) |
they will hold the benefit of such policies and such insurances, to the order of the Owners, the Security Trustee and/or such financiers and/or such other party in accordance with the said loss payable clause;
|
|
(c) |
they will advise the Owners, the Security Trustee and such financiers promptly of any material change to the terms of the obligatory insurances of which they are aware;
|
|
(d) |
following a written application from the Owners, the Security Trustee and/or such financiers not later than one (1) month before the expiry of the obligatory insurances they will notify the Owners, the Security
Trustee and such financiers not less than fourteen (14) days before the expiry of the obligatory insurances, in the event of their not having received notice of renewal instructions from the Charterers and, in the event of their receiving
instructions to renew, they will promptly notify the Owners, the Security Trustee and such financiers of the terms of the instructions; and
|
|
(e) |
if any of the obligatory insurances form part of any fleet cover, the Charterers shall procure that the insurance broker(s), or leading insurer, as the case may be, undertake to the Owners, the Security Trustee
and such financiers that such insurance broker or insurer(s) will not set off against any sum recoverable in respect of a claim relating to the Vessel under such obligatory insurances any premiums due in respect of any other vessel under
any fleet cover of which the Vessel forms a part or any premium due for other insurances, they waive any lien on the policies, or any sums received under them, which they might have in respect of such premiums, and they will not cancel
such obligatory insurances by reason of non-payment of such premiums or other amounts, and will arrange for a separate policy to be issued in respect of the Vessel forthwith upon being so requested by the Owners, the Security Trustee
and/or such financiers and where practicable.
|
39.5 |
The Charterers shall ensure that any protection and indemnity and/or war risks associations in which the Vessel is entered provides the Owners, the Security Trustee and such financiers with:
|
|
(a) |
a copy of the certificate of entry for the Vessel as soon as such certificate of entry is issued;
|
|
(b) |
a letter or letters of undertaking in such form as may be required by the Owners the Security Trustee and their financiers (if any) or in such association's standard form; and
|
|
(c) |
a copy of each of (i) a certificate of insurance or other financial security in respect of civil liability for oil pollution damage, (ii) a certificate of insurance or other financial security in respect of
civil liability for bunker oil pollution damage, (iii) (if the Vessel trades or enters into US waters) a certificate issued pursuant to s1016(a) Oil Pollution Act 1990 and s108(a) Comprehensive Environmental Response, Compensation and
Liability Act 1980, as amended, in accordance with US Coast Guard Regulations, 33 CFR Part 138 and (iv) a certificate of insurance or other financial security in respect of shipowners' liability as required under the Maritime Labour
Convention.
|
39.6 |
The Charterers shall ensure that all policies relating to obligatory insurances are deposited with the approved brokers through which the insurances are effected or renewed.
|
39.7 |
The Charterers shall procure that all premiums or other sums payable in respect of the obligatory insurances are punctually paid and produce all relevant receipts when so required by the Owners and the Security
Trustee.
|
39.8 |
The Charterers shall ensure that any guarantees required by a protection and indemnity or war risks association are promptly issued and remain in full force and effect.
|
39.9 |
The Charterers shall neither do nor omit to do (nor 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 under an obligatory insurance repayable in whole or in part; and, in particular:
|
|
(a) |
the Charterers shall procure that all necessary action is taken and all requirements are complied with which may from time to time be applicable to the obligatory insurances, and (without limiting the
obligations contained in this Clause) ensure that the obligatory insurances are not made subject to any exclusions or qualifications to which the Owners and the Security Trustee have not given their prior approval (unless such exclusions
or qualifications are made in accordance with the rules of UK P&I Club or any other protection and indemnity association which is a member of the International Group of P&I Clubs acceptable to the Owners and the Security Trustee);
|
|
(b) |
the Charterers shall not make or permit any changes relating to the classification or classification society or manager or operator of the Vessel unless such changes have first been approved by the underwriters
of the obligatory insurances and the Owners and the Security Trustee;
|
|
(c) |
prior to permitting the Vessel to enter the US Exclusive Economic Zone, the Charterers shall comply with all regulations in force of the US Oil Pollution Act 1990 which apply to the Vessel including, if
necessary, obtaining within the time limits set by the US Coast Guard, a Certificate of Financial Responsibility, a copy of which shall be lodged with the Owners and the Security Trustee prior to engaging in any such voyage; and
|
|
(d) |
the Charterers shall not employ the Vessel, nor allow it to be employed, otherwise than in conformity with the terms and conditions of the obligatory
|
39.10 |
The Charterers shall not make or agree to any material alteration to the terms of any obligatory insurance nor waive any right relating to any obligatory insurance without the prior written consent of the
Owners, the Security Trustee and their financiers (if any).
|
39.11 |
The Charterers shall not settle, compromise or abandon any claim under any obligatory insurance for Total Loss or for a Major Casualty without the Owners' and the Security Trustee's approval, and shall do all
things necessary and provide all documents, evidence and information to enable the Security Trustee to collect or recover any moneys which at any time become payable in respect of the obligatory insurances.
|
39.12 |
The Charterers shall provide the Owners and the Security Trustee upon written request, copies of:
|
|
(a) |
all communications between the Charterers and:
|
|
(i) |
the approved brokers (if applicable); and
|
|
(ii) |
the approved protection and indemnity and/or war risks associations; and
|
|
(iii) |
the first class international insurers and/or underwriters, which relate directly or indirectly to:
|
|
(A) |
the Charterers' obligations relating to the obligatory insurances including, without limitation, all requisite declarations and payments of additional premiums or calls; and
|
|
(B) |
any credit arrangements made between the Charterers and any of the persons referred to in paragraphs (i) or (ii) relating wholly or partly to the effecting or maintenance of the obligatory insurances;
|
|
(b) |
any material communication with all parties involved in case of a claim under any of the Vessel's insurances.
|
39.13 |
The Charterers shall promptly provide the Owners, the Security Trustee and/or their financiers (or any persons which they may designate) with:
|
|
(a) |
any information which the Owners, the Security Trustee and/or such financiers (or such designated persons) request for the purpose of:
|
|
(i) |
obtaining or preparing any report from an independent marine insurance broker as to the adequacy of the obligatory insurance effected or proposed to be effected; and/or
|
|
(ii) |
effecting, maintaining or renewing any such insurances as are referred to in Clauses 13(a) and 39.1 or dealing with or considering any matters relating to any such insurances;
|
|
(b) |
any information and documents reasonably requested by the Owners, the Security Trustee in connection with a claim under any of the Vessel's insurances exceeding the Major Casualty amount; and
|
|
(c) |
if the Owners, the Security Trustee consider it necessary to obtain information in connection with a claim under any of the Vessel's insurances which does not exceed the Major Casualty amount, such information
and documents.
|
39.14 |
If one or more of the obligatory insurances are not effected and maintained with first class international insurers or are effected with an insurance or captive Subsidiary of the Owners, the Security Trustee or
the Charterers, then the Charterers shall procure, at their own expense, that the relevant insurers maintain in full force and effect facultative reinsurances with reinsurers and through brokers, in each case, of recognised standing and
acceptable in all respects to the Owners and the Security Trustee. Any reinsurance policy shall include, if and when permitted by law, a cut-through clause in a form acceptable to the Owners and the Security Trustee. The Charterers shall
procure that underwriters of the primary insurances assign each reinsurance to the relevant financiers in full, if required.
|
39.15 |
The Charterers shall be solely responsible for and indemnify the Owners in respect of all loss or damage to the Vessel (insofar as the Owners shall not be reimbursed by the proceeds of any insurance in respect
thereof) however caused occurring at any time or times before physical possession thereof is retaken by the Owners, reasonable wear and tear to the Vessel only excepted.
|
39.16 |
The Charterers shall:
|
|
(a) |
if so requested by the Owners, the Security Trustee and/or their financiers, reimburse the Owners, the Security Trustee and/or such financiers the costs for obtaining a detailed report signed by an independent
firm of marine insurance brokers appointed by the Owners, the Security Trustee and/or such financiers dealing with the Insurances and stating the opinion of such firm as to the adequacy of the Insurances; and
|
|
(b) |
procure that there is delivered to the insurance brokers described in Clause 39.16(a) such information in relation to the Insurances as such brokers may require.
|
39.17 |
If the Charterers fail to comply with any of the provisions of this Clause 39, the Owners and the Security Trustee shall be entitled (but not bound) to effect and subsequently to maintain all such Insurances
upon the Vessel as they may think fit in order to procure the compliance with such provisions or alternatively, to require the Vessel (at the Charterers' risk) to remain in, or to proceed to and remain in a port designated by the Owners,
the Security Trustee and/or such financiers until such provisions are fully complied with.
|
40. |
TERMINATION AND REDELIVERY; WAR; TOTAL LOSS
|
40.1 |
Upon the occurrence of a Termination Event which is continuing:
|
|
(a) |
the Owners shall notify the Charterers of occurrence of the same (the Termination Event Notice) whereupon the Charterers may:
|
|
(i) |
in relation to a Termination Event under Clause 45(a), (c) or (g), within three (3) Business Days of the date of the Termination Event Notice, provide to the Owners a written notice advising the Owners of their
intention to terminate this Charter and shall promptly pay the Termination Sum to the Owners by no later than the end of such three (3) Business Days period; or
|
|
(ii) |
in relation to any other Termination Event, within thirty (30) days of the date of the Termination Event Notice, provide to the Owners a written notice advising the Owners of their intention to terminate this
Charter and shall promptly pay the Termination Sum to the Owners by no later than the end of such thirty (30) days period; and
|
|
(b) |
if the Charterers do not notify the Owners of their intention to terminate this Charter pursuant to Clause 40.1(a) within three (3) Business Days or thirty (30) days (as the case may be) of the date of the
Termination Event Notice then the Owners may be entitled, provided the Termination Event is continuing, by notice to the Charterers to terminate this Charter at any time thereafter, and the Charterers shall immediately pay to the Owners
the Termination Sum, whereupon the Owners shall sell, transfer and redeliver, at the cost and expense of the Charterers, the Vessel to the Charterers.
|
40.2 |
The Owners shall notify the Charterers in writing if they intend to terminate this Charter in accordance with paragraph (f) of Clause 26 (War) and the Charterers shall
pay the Termination Sum to the Owners within ten (10) Business Days upon receipt of such written notification from the Owners whereupon the Owners shall, at the cost and expense of the Charterers, sell the Vessel to the Charterers in
accordance with Clause 40.4.
|
40.3 |
It is hereby agreed by the Parties that payment of the Termination Sum pursuant to Clause 40.1 or 40.2 (as the case may be) shall not be construed as a penalty but shall represent an agreed estimate of the loss
and damage suffered by the Owners in purchasing the Vessel and entering into this Charter upon the terms and conditions contained herein, in each case, at the request of the Charterers and shall therefore be paid as compensation to the
Owners for early termination and acquisition of the Vessel by the Charterers.
|
40.4 |
Concurrently with the irrevocable payment of the Termination Sum in full pursuant to the terms of this Charter, this Charter shall terminate and the Owners shall (save in the event of Total Loss) transfer the
legal and beneficial ownership of the Vessel to the Charterers or their nominees free from any registered mortgages incurred or permitted by the Owners (save for those liens, Security Interests and debts incurred by the Charterers or
arising out of or in connection with this Charter and any other Permitted Security Interests) and shall execute (i) a bill of sale, (ii) a commercial invoice, (iii) a
|
40.5 |
If the Charterers fail to make any payment or make only a partial payment of the Termination Sum on the due date in accordance with Clause 40.1 or 40.2 (as the case may be), Clauses 37.12 and 37.13 shall apply.
In addition, the Charterers agree that should the Termination Sum not be paid in full on the due date for payment under the terms of this Charter:
|
|
(a) |
the Charterers' right to possess and operate the Vessel shall immediately cease and the Charterers shall, upon the Owners' request, be obliged to immediately (and at the Charterers' own cost) redeliver the
Vessel to the Owners at such ready and nearest safe port as the Owners may require; and
|
|
(b) |
without limiting the generality of the foregoing or any other rights of the Owners, the Owners may, at their own option subject to Clause 40.6, sell the Vessel free of any charter, lease or other engagement
concerning the Vessel for such price and on such terms and conditions as it may, in its absolute discretion, think fit.
|
40.6 |
If the Termination Sum has not been paid in full on the due date for payment under the terms of this Charter, the Owners shall have the Vessel valued in Dollars by three (3) Approved Valuers appointed by the
Owners and:
|
|
(a) |
if the average value of the three (3) valuations quoted by such three Approved Valuers (after offsetting all costs and expenses incidental to such valuations of the Vessel) (the Net Average Market Value) is higher than the Termination Sum, the Owners may, at their sole discretion:
|
|
(i) |
appoint one or more of such Approved Valuers to sell the Vessel at the highest price that they could obtain. The Charterers shall also have the right to recommend a buyer for the Vessel and, if the Owners
determine to sell the Vessel, they shall sell the Vessel to the buyer recommended by the Charterers if that buyer offers the same or higher price for the Vessel upon not less favourable terms than the other buyers recommended by such
Approved Valuers; or
|
|
(ii) |
retain the Vessel;
|
|
(b) |
if the Owners sell the Vessel in accordance with Clause 40.5(b) and paragraph (a)(i) above:
|
|
(i) |
the Owners shall have the right to deduct an amount equal to the aggregate of the expenses, disbursements, taxes, costs and losses whatsoever as may have been incurred by the Owners in respect of the sale of
the Vessel (the Net Sale Proceeds) from the gross proceeds of the sale of the Vessel;
|
|
(ii) |
an amount equal to the Termination Sum shall be deducted from the Net Sale Proceeds;
|
|
(iii) |
if the Net Sale Proceeds are insufficient to satisfy all amounts due and payable from the Charterers to the Owners hereunder, the Charterers shall immediately pay the shortfall to the Owners upon demand by the
Owners; and
|
|
(iv) |
any surplus (the Surplus Sale Proceeds) in the Net Sale Proceeds after deducting the Termination Sum pursuant to sub-paragraph (ii) above shall be distributed by the
Owners in accordance with Clause 40.7;
|
|
(c) |
if the Owners elect to retain the Vessel in accordance with paragraph (a)(ii) above:
|
|
(i) |
in the case of the Net Average Market Value of the Vessel is higher than the Termination Sum, the Owners shall offset the Termination Sum against the Net Average Market Value of the Vessel and distribute the
difference between the Net Average Market Value of the Vessel and the Termination Sum (the Surplus Retention Proceeds) in accordance with Clause 40.7; and
|
|
(ii) |
in the case of the Net Average Market Value is less than the Termination Sum, the Charterers shall immediately pay the shortfall to the Owners upon demand by the Owners; and
|
|
(d) |
the Charterers shall have the right to pay the Termination Sum and purchase the Vessel pursuant to Clause 40.1 or 40.2 (as the case may be) prior to any agreement has been entered into by the Owners for a sale
of the Vessel under Clause 40.5(b) and paragraph (a)(i) above, upon which, Clause 40.4 shall apply.
|
40.7 |
The Surplus Retention Proceeds or the Surplus Sale Proceeds (as the case may be) shall be applied by the Owners (and the Charterers hereby authorise and instruct the Owners to so apply such amounts) as follows:
|
|
(a) |
(in the case of a Termination Event (as defined in the relevant Collateral Charter) has occurred under either Collateral Charter) in or towards payment of the Termination Sum (as defined in that Collateral
Charter) to which that Collateral Vessel relates, together with any fees or charges incurred under that Collateral Charter. If a Termination Event (as defined in each Collateral Charter) has occurred under both Collateral Charters and the
Surplus Retention Proceeds or the Surplus Sale Proceeds (as the case may be) are insufficient to discharge the Termination Sum (as defined in each Collateral Charter) under both Collateral Charters, the Owners shall apply the Surplus
Retention Proceeds or the Surplus Sale Proceeds (as the case may be) in or towards payment pro rata of any Termination Sum (as defined in each Collateral Charter) under the Collateral Charters;
|
|
(b) |
(where such conditions are satisfied save for the charter free market value of either Collateral Vessel being below the asset coverage ratio stated in clause
|
|
(c) |
(in the case of there being a surplus remaining after the application of the amounts in paragraphs (a) and (b) above) direct to or to the order of the Charterers, provided that no Termination Event shall have
occurred and be continuing.
|
40.8 |
Without limiting the generality of the foregoing or any other rights of the Creditor Parties, upon the occurrence of a Termination Event which is continuing, the Owners shall have the sole and exclusive right
and power to do any of the following:
|
|
(a) |
settle, compromise, compound, adjust or defend any actions, suits or proceedings relating to or pertaining to the Vessel and this Charter;
|
|
(b) |
make proof of loss, appear in and prosecute any action arising from any policy or policies of insurance maintained pursuant to this Charter, and settle, adjust or compromise any claims for loss, damage or
destruction under, or take any other action in respect of, any such policy or policies; and
|
|
(c) |
terminate any management agreement with any manager (including any Approved Manager) of the Vessel and appoint a substitute manager in its sole discretion.
|
40.9 |
The Charterers hereby undertake to indemnify the Owners against any claims incurred in relation to the Vessel as a result of the Charterers' action or performance prior to such transfer of ownership. Any taxes,
notarial, consular and other costs, charges and expenses connected with closing of the Owners' register shall be for the Charterers' account.
|
40.10 |
Without prejudice to Clause 15, if the Charterers are required to redeliver the Vessel to the Owners pursuant to the terms of this Charter, the Charterers shall ensure that the Vessel shall, at the time of
redelivery to the Owners:
|
|
(a) |
be in an equivalent class as she was as at the Commencement Date without any recommendation or condition, and with valid, unextended certificates for not less than six (6) months;
|
|
(b) |
have passed her 5-year and if applicable, 10-year special surveys, and subsequent second intermediate survey and drydock at the Charterers' time and expense without any condition or outstanding issue and to the
satisfaction of the Classification Society;
|
|
(c) |
have her survey cycles up to date and trading and class certificate valid for at least six (6) months;
|
|
(d) |
be redelivered to the Owners together with all spare parts and spare equipment as were on board at the time of Delivery, and any such spare parts and spare equipment on board at the time of re-delivery shall be
taken over by the Owners free of charge;
|
|
(e) |
be free of any cargo and Security Interest (save for the Security Interests granted pursuant to the Financial Instruments and the Security Documents); and
|
|
(f) |
be free of any charter (unless the Owners wish to retain the continuance of any then existing charter).
|
40.11 |
The Owners shall, at the time of the redelivery of the Vessel, take over all bunkers, unused lubricating oil, unbroached provisions, paints, ropes and other consumable stores (excluding spare parts) in the
Vessel at the Owners' cost at the original purchase price as evidenced by copies of invoices certified by a director of the Charterers and on a "first in, first out" basis.
|
40.12 |
If the Vessel, for any reason, becomes a Total Loss, in consideration of (i) the Owners agreeing to enter into this Charter at the request of the Charterers and purchasing the Vessel from the Charterers as
sellers under the MOA, and (ii) without prejudice to the rest of this Clause, the Owners agreeing to assign their interest in the Insurances to the Charterers upon receiving full payment of the Termination Sum (in any circumstance where
the Owners have not yet received any insurance proceeds of the Vessel at such time), the Charterers shall pay the Termination Sum to the Owners on the earlier of:
|
|
(a) |
the date falling (in the case of paragraph (a) or (b) of the definition of Total Loss) one hundred and twenty (120) days or (in the case of paragraph (c) of the definition of Total Loss) thirty (30) days after
such Total Loss has occurred; and
|
|
(b) |
the date of receipt by the Security Trustee and/or their financiers (if any), in accordance with the terms of the relevant loss payable clause) of the proceeds of insurance relating to such Total Loss,
|
|
(i) |
payment of Charterhire, and all other sums payable hereunder during such period shall continue to be made by the Charterers in accordance with the terms of this Charter unless and until the Owners receive the
Termination Sum;
|
|
(ii) |
should insurance proceeds be received by the Security Trustee from the insurers, the Charterers' obligations to pay the Termination Sum shall be accordingly reduced by such insurance proceeds but in the event
that such insurance proceeds be less than the amount of the Termination Sum together with any interest accrued thereon, the Charterers remain obliged to pay to the Owners the balance so that the full amount of the Termination Sum together
with any interest accrued thereon due are received by the Owners;
|
|
(iii) |
the Vessel continues to be insured in accordance with the terms of this Charter and as may be required by any other agreements relating to the ownership, operation, management, chartering or financing of the
Vessel; and
|
|
(iv) |
the obligation of the Charterers to pay the Termination Sum shall remain unaffected and exist regardless of whether any of the insurers have agreed or refused to meet or have disputed in good faith, the claim
for Total Loss.
|
40.13 |
For the purpose of this Charter, a Total Loss shall be deemed to have occurred:
|
|
(a) |
in the case of an actual loss of the Vessel, on the date on which it occurred or, if that is unknown, the date when the Vessel was last heard of; or
|
|
(b) |
in the case of a constructive, compromised, agreed or arranged total loss of the Vessel, on the earlier 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 Owners with the insurers in which the insurers agree to treat the Vessel as a total loss.
|
40.14 |
The Owners shall have no obligation to supply to the Charterers with a replacement vessel following the occurrence of a Total Loss.
|
41. |
FEES AND EXPENSES; INDEMNITIES;
|
41.1 |
Fees
|
41.2 |
Without prejudice to any other rights of the Owners hereunder, the Charterers shall promptly pay to the Owners within ten (10) Business Days of demand on a full indemnity basis all costs, charges and expenses
incurred by the Creditor Parties in
|
41.3 |
All costs (including, but not limited to, legal costs, fees for insurance opinions, valuation and inspection) and expenses reasonably incurred by the Creditor Parties in the preparation, negotiation,
documentation, printing and execution of all documentation in relation to this Charter and the Transaction Documents and all legal costs, expenses and other disbursements reasonably incurred by the Creditor Parties' legal counsels in
connection with the same, shall be for the account of the Charterers and the Charterers shall pay such costs and expenses promptly within ten (10) Business Days of demand.
|
41.4 |
All costs and expenses incurred by the Owners in relation to the acquisition and registration of the Vessel by the Owners in the Owners' name in the flag state stated in Box 5 together with any and all fees
(including but not limited to any vessel registration and tonnage fees) payable by the Owners to such flag state to maintain and/or renew such registration shall be for the account of the Charterers and the Charterers shall pay such costs
and expenses promptly within ten (10) Business Days of demand.
|
41.5 |
In addition to the foregoing and to the extent not already addressed by the foregoing, the Charterers agree at all times during this Charter to indemnify and keep indemnified the Creditor Parties against:
|
|
(a) |
all costs and expenses whatsoever reasonably incurred in connection with this Charter and any other Transaction Document or the Vessel, and any costs, charges, or expenses reasonably incurred which the
Charterers have agreed to pay under this Charter and any other Transaction Document and shall be claimed or assessed against or paid by the Creditor Parties save for (in each case) resulting from the wilful misconduct of the Creditor
Parties;
|
|
(b) |
any tax (except income tax) imposed on, or suffered by, any Creditor Party, excluding:
|
|
(i) |
any tax imposed on and calculated by reference to the net income actually received or receivable by such Creditor Party (but, for the avoidance of doubt, not including any sum deemed for the purposes of tax to
be received or receivable by such Creditor Party but not actually receivable) by the jurisdiction in which such Creditor Party is incorporated; or
|
|
(ii) |
any loss or liability that is compensated for by an increased payment under Clause 51.2.2;
|
|
(c) |
all losses, costs, charges, expenses, fees, payments, liabilities, penalties, fines, damages or other sanctions of a monetary nature (collectively, for the purposes of this Clause 41.5, Losses) suffered or incurred by the Creditor Parties and arising directly or indirectly in any manner out of the design, manufacture, delivery, non-delivery, purchase, importation, registration,
ownership, chartering, sub-chartering, possession, control, use, operation, condition,
|
|
(d) |
all Losses suffered or incurred by the Creditor Parties which result directly or indirectly from claims which may at any time be made on the ground that any design, article or material of or in the Vessel or
the operation or use thereof constitutes or is alleged to constitute an infringement of patent or copyright or registered design or other intellectual property right or any other right whatsoever save for (in each case) resulting from the
wilful misconduct of the Creditor Parties;
|
|
(e) |
all Losses suffered or incurred by the Owners in preventing or attempting to prevent the arrest, confiscation, seizure, taking in execution, impounding, forfeiture or detention of the Vessel, or in securing the
release of the Vessel therefrom save for (in each case) resulting from the wilful misconduct of the Creditor Parties;
|
|
(f) |
all Losses suffered or incurred by the Owners with respect to or as a direct result of the presence, escape, seepage, spillage, leaking, discharge or migration from the Vessel of oil or any other hazardous
substance, including without limitation, any claims asserted or arising under the US Oil Pollution Act of 1990 (as same may be amended and/or re-enacted from time to time hereafter) or similar legislation, regardless of whether or not
caused by or within the control of the Charterers save for (in each case) resulting from the wilful misconduct of the Creditor Parties; and
|
|
(g) |
any Losses incurred or suffered by the Owners in liquidating, employing or prepaying funds acquired or borrowed to purchase or finance or refinance the Vessel (excluding any costs incurred in unwinding any
associated interest rate or currency swaps or currency futures transactions entered into by the Owners) following any default in payment hereunder or the occurrence of any Termination Event.
|
41.6 |
If, under any applicable law, whether as a result of judgment against the Charterers or the liquidation of the Charterers or for any other reason, any payment to be made by the Charterers under or in connection
with this Charter is made or is recovered in a currency other than the currency (the currency of obligation) in which it is payable pursuant to this Charter then, to the extent that the payment
(when converted into the currency of obligation at the rate of exchange on the date for the determination of liabilities permitted by the applicable law) falls short of the amount unpaid under this Charter, the Charterers shall as a
separate and independent obligation, fully indemnify the Creditor Parties against the amount of the shortfall; and for the purposes of this sub-clause rate of exchange means the best rate at which
the Creditor Parties are able on the relevant date to purchase the currency of obligation with the other currency.
|
41.7 |
The Charterers hereby irrevocably agree to indemnify and hold harmless the Owners against any claim, expense, liability or loss to fund the acquisition of the Vessel pursuant to the MOA.
|
41.8 |
The indemnities contained in this Clause 41, and each other indemnity contained in this Charter, shall survive any termination or other ending of this Charter and any breach by, or repudiation by, the
Charterers of this Charter.
|
42. |
NO WAIVER OF RIGHTS
|
42.1 |
No neglect, delay or indulgence on the part of either Party in enforcing the terms and conditions of this Charter shall prejudice the strict rights of that party or be construed as a waiver thereof nor shall
any single or partial exercise of any right of either Party preclude any other or further exercise thereof.
|
42.2 |
No right or remedy conferred upon either Party by this Charter shall be exclusive of any other right or remedy provided for herein or by law and all such rights and remedies shall be cumulative.
|
43. |
MORTGAGE AND ASSIGNMENT
|
43.1 |
At all times during the term of this Charter, the Owners and the other Creditor Parties shall have the right to create a mortgage or as the case may be, mortgages, over the Vessel in favour of any lender, bank
or financial institution, or agent or trustee or an Affiliate of the Owners (the Mortgagee) and to assign all the rights, title, interests and benefit in and to this Charter, the other Transaction
Documents, the Insurances, the Requisition Compensation and/or all or any Security Interest under the Security Documents to the Mortgagee as security for any loan or other facilities for the purpose of financing and/or refinancing the
acquisition of the Vessel. In the event that the Vessel is transferred by the Owners to the Charterers or their nominee in accordance with this Charter, the Owners shall ensure that the mortgage(s) and assignment created pursuant to this
Clause 43 be fully discharged prior to such transfer, provided that the Owners shall, upon written request of the Sub-Charterer:
|
|
(a) |
issue the Owners' Quiet Enjoyment Letter upon the request of the Sub-Charterer; and
|
|
(b) |
use their best endeavours to procure the issuance of the Finance Party Quiet Enjoyment Letter simultaneous with the Owners' execution of any such ship mortgage.
|
43.2 |
The Charterers agree with the Owners to:
|
|
(a) |
cooperate with the Owners to execute or enter into any such documents as the Owners' financiers may reasonably require under and in connection with the financing and/or refinancing of the Vessel;
|
|
(b) |
acknowledge and agree to be bound by and if required, to ensure that any other applicable charterers consent and agree to be bound by, the notice of any assignment of this Charter, the other Transaction
Documents and/or all or any Security Interest under the Security Documents executed in favour of the Mortgagee in the manner as required by the Mortgagee; and
|
|
(c) |
comply, and provide such information and documents to enable the Owners to comply, with all such instructions or directions in regard to the employment, insurances, operation, repairs and maintenance of the
Vessel as reasonably laid down in the Financial Instruments or as may be reasonably directed from time to time during the currency of this Charter by the mortgage(s) in conformity with the Financial Instruments.
|
44. |
NOTICES
|
44.1 |
Any communication to be made under or in connection with the Transaction Documents shall be made in writing and, unless otherwise stated, may be given in person, by post, fax or email.
|
44.2 |
Except as otherwise provided for in this Charter, all notices or other communications under or in respect of the Transaction Documents shall be in writing and shall be made or given to such party at the
address, facsimile number or email address appearing below (or at such other address, facsimile number or email address as such party may hereafter specify for such purposes to the other by notice in writing):
|
|
(a) |
in the case of the Owners:
|
Address:
|
c/o Oriental Fleet International Company Limited
|
|
50/F, COSCO Tower
|
||
183 Queen's Road Central
|
||
Hong Kong
|
||
Attention:
|
Belinda Lou / Thomas Xing / Xu Ying
|
|
Email:
|
lou.can@coscoshipping.com /
|
|
thomas.xing@ofi.com.hk /
|
||
asset@coscoshipping.com
|
||
Fax:
|
+852 2339 1881
|
|
|
(b) |
to the Charterers:
|
Address:
|
c/o 1, Vas. Sofias & Meg.
|
|
Alexandrou Str.
|
||
15124, Maroussi
|
||
Athens, Greece
|
||
Attention:
|
Andreas Louka
|
|
Email:
|
louka@loukapartners.com
|
|
Fax:
|
+30 2108128320
|
|
44.3 |
Any communication or document made or delivered by each Party to the other Party under or in connection with the Transaction Documents will only be effective:
|
|
(a) |
if by way of fax, when received in legible form;
|
|
(b) |
if by way of letter, when it has been left at the relevant address to which it has been posted with postage prepaid in an envelope addressed to the relevant party at that address, and, if a particular
department or officer is specified as part of its address details provided under Clause 44.2, if addressed to that department or officer; or
|
|
(c) |
if by way of email, only when received in a legible form by the email address of the person to whom the communication is made.
|
44.4 |
All communications and documents delivered pursuant to or otherwise relating to this Charter shall be in English.
|
45. |
TERMINATION EVENTS
|
|
(a) |
the Charterers or any other Security Party fails to make any payment on its due date under a Transaction Document to which it is a party unless such failure to pay is remedied within a period of three (3)
Business Days of such payment becoming due and payable; or
|
|
(b) |
the Charterers fail to obtain and/or maintain the Insurances required under Clause 39 in accordance with the provisions thereof or any insurer in respect of such Insurances cancels the Insurances or disclaims
liability with respect thereto; or
|
|
(c) |
the Guarantor fails to comply with the financial covenants under clause 14 of schedule 2 to the Guarantee unless such financial covenants are complied with within thirty (30) days of such failure to comply (as
evidenced by the financial statements of the Guarantor as of the date of such remedy and a Compliance Certificate delivered by the Guarantor setting out (in reasonable detail) computations as to compliance with clause 14 of schedule 2 to
the Guarantee as at the date at which those financial statements were drawn up); or
|
|
(d) |
the Charterers or any other Security Party commits any other breach of, or omits to observe or perform, any of their other obligations or undertakings in this Charter or any other Transaction Document (other
than a breach referred to in paragraph (a), (b) or (c) above or paragraph (q) below) unless such breach or omission is, in the opinion of the Owners, remediable and the Charterers and/or the relevant Security Party shall remedy such
breach or omission within ten (10) Business Days of notice thereof from the Owners; or
|
|
(e) |
any representation or warranty or statement made or deemed to be made by the Charterers or any Security Party in or pursuant to any Transaction Document to which it is a party or in any document or certificate
furnished to the Owners and the Security Trustee in connection herewith or if applicable, in the case of the Charterers only, the Certificate of Delivery and Acceptance, proves to be incorrect or misleading in any material respect when it
is made or deemed made; or
|
|
(f) |
any of the following occurs in relation to any Financial Indebtedness of the Charterers or any other Security Party:
|
|
(i) |
any Financial Indebtedness of the Charterers or any other Security Party is not paid when due nor within any originally applicable grace period; or
|
|
(ii) |
any Financial Indebtedness of the Charterers or any other Security Party is declared to be or otherwise becomes due and payable, prior to its specified maturity date as a result of any event of default
(howsoever described); or
|
|
(iii) |
any commitment for any Financial Indebtedness of the Charterers or any other Security Party is cancelled or suspended by a creditor of the Charterers or any other Security Party (as the case may be) as a result
of an event of default (however described); or
|
|
(iv) |
any creditor of the Charterers or any other Security Party becomes entitled to declare any Financial Indebtedness of the Charterers or any other Security Party (as the case may be) due and payable prior to its
specified maturity as a result of an event of default (howsoever defined),
|
|
(g) |
any of the following events (or any analogous procedure or step is taken in any jurisdiction) occurs in relation to the Charterers or any other Security Party:
|
|
(i) |
the Charterers or any other Security Party are or are reasonably presumed or deemed to be unable or admits inability to pay their debts as they fall due, suspends making payments on any of their debts or, by
reason of actual or anticipated financial difficulties, commences negotiations with one or more of their creditors with a view to rescheduling any of their indebtedness; or
|
|
(ii) |
the value of their assets is less than their liabilities (taking into account contingent and prospective liabilities);
|
|
(iii) |
a moratorium is declared in respect of any indebtedness of the Charterers or any other Security Party;
|
|
(iv) |
the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration, provisional supervision or reorganisation (by way of voluntary arrangement, scheme of arrangement or
otherwise) of the Charterers or any other Security Party;
|
|
(v) |
a composition or arrangement with any creditor of the Charterers or any other Security Party, or any assignment for the benefit of creditors generally of the Charterers or any other Security Party or a class of
such creditors;
|
|
(vi) |
the appointment of a liquidator, receiver, administrator, administrative receiver, compulsory manager, provisional supervisor or other similar officer in respect of the Charterers or any other Security Party or
any of its assets; or
|
|
(vii) |
enforcement of any Security over any assets of the Charterers or any other Security Party; or
|
|
(viii) |
any expropriation, attachment, sequestration, distress or execution (or any analogous process in any jurisdiction) affects any asset or assets of the Charterers or any other Security Party which has or, in the
opinion of the Owners, is likely to have a Material Adverse Effect; or
|
|
(h) |
the Charterers or any other Security Party suspends or ceases or threatens to suspend or cease carrying on all or a material part of their business; or
|
|
(i) |
any consent, approval, Authorisation, license or permit necessary to enable the Charterers to operate or charter the Vessel or the Charterers to sell the Vessel or to enable them to comply with any provision of
this Charter or the MOA, as the case may be, to ensure that the obligations of the Charterers are legal, valid, binding or enforceable is not granted, expires without being renewed, is revoked or becomes liable to revocation or any
condition of such a consent, approval, Authorisation, license or permit is not fulfilled unless such event is, in the opinion of the Owners, remediable and the Charterers shall remedy such event within ten (10) Business Days of the
occurrence of such event; or
|
|
(j) |
any event or circumstance occurs which has or, in the reasonable opinion of the Owners, is likely to have, a Material Adverse Effect; or
|
|
(k) |
this Charter or any other Transaction Document or any Security Interest created by a Transaction Document:
|
|
(i) |
is cancelled, terminated, rescinded or suspended or otherwise ceases to remain in full force and effect for any reason or no longer constitutes legal, valid, binding and enforceable obligations of any party to
that document for any reason whatsoever; or
|
|
(ii) |
is amended or varied without the prior written consent of the Owners and the Security Trustee, except for any amendment or variation which is expressly permitted by this Charter or any other relevant
Transaction Document; or
|
|
(l) |
a Security Party rescinds or purports to rescind or repudiates or purports to repudiate a Transaction Document to which it is a party or any other party of any of those Transaction Documents evidences an
intention to repudiate or rescind any of those Transaction Documents; or
|
|
(m) |
it is or has become unlawful for the Charterers or any other Security Party to perform any of their obligations under the Transaction Documents to which they are a party or any Security Interest created or
expressed to be created or evidenced by the Security Documents to which they are a party ceases to be effective with the ranking and priority it is expressed to have; or
|
|
(n) |
the Vessel is not delivered latest by the Cancelling Date; or
|
|
(o) |
the occurrence of a Change of Control; or
|
|
(p) |
the occurrence of any of the following events:
|
|
(i) |
a default under the MOA which is not waived by the Owners; or
|
|
(ii) |
a default or termination event or the equivalent under any Collateral Transaction Documents which is not waived by the relevant Collateral Owner; or
|
|
(q) |
in the event that a shortfall occurs in the Market Value of the Vessel together with the security value of any additional cash deposit or other security provided as required under Clause 47.1(n), the Charterers
have not:
|
|
(i) |
provided or procured the provision of additional cash deposit or other security in a form and in an amount acceptable to the Owners; or
|
|
(ii) |
prepaid so much of the Charterhire Principal to cover such shortfall, within thirty (30) days in accordance with Clause 47.1(n).
|
46. |
REPRESENTATIONS AND WARRANTIES
|
|
(a) |
each Security Party is a limited liability company duly incorporated and validly existing and, where applicable, in good standing under the laws of its jurisdiction of incorporation, organisation or formation
(as the case may be) with power to own its assets, carry on its business as it is being conducted, enter into the Transaction Documents and to exercise its rights and perform its obligations under the Transaction Documents and all
corporate and other action required to authorise its execution of the Transaction Documents and its performance of its obligations thereunder have been duly taken;
|
|
(b) | (i) | the obligations expressed to be assumed by each Security Party in the Transaction Documents to it is a party constitute, subject to the Legal Reservations, its legal and valid obligations, binding on it in accordance with the terms of the Transaction Documents and no limit on any of its powers will be exceeded as a result of the sale, leasing, borrowings, granting of security or giving of guarantees contemplated by the Transaction Documents or the performance by it of any of its obligations thereunder; and |
|
(ii) |
without limiting the generality of paragraph (b)(i) above, subject to the Security Perfection Requirements, each Security Document to which each Security Party is a party creates the Security Interests which it
purports to create and such Security Interests are valid and effective;
|
|
(c) |
the execution of the Transaction Documents by each Security Party and its exercise of its rights and performance of its obligations under any of such Transaction Documents do not constitute and will not result
in any breach of or conflict with, any agreement or treaty to which it is a party;
|
|
(d) |
all Authorisations, consents, approvals, resolutions, licences, exemptions, filings, notarisations or registrations required of each of the Charterers and the other Security Parties:
|
|
(i) |
to enable them lawfully to enter into, exercise its rights and comply with its obligations in the Transaction Documents to which they are respectively a party;
|
|
(ii) |
to make the Transaction Documents to which they are respectively a party admissible in evidence in its Relevant Jurisdictions;
|
|
(iii) |
for them to carry on its business, and which are material; and
|
|
(iv) |
to enable them to create the Security Interest to be created by them under any Security Document to which they are respectively a party and to ensure that such Security Interest has the priority and ranking it
is expressed to have,
|
|
(e) |
the execution, delivery, and performance of the Transaction Documents to which each Security Party is or shall be a party will not, in each case: (i) violate any law, governmental rule, regulation, order,
judgment, award or decree which is binding upon it or any of its assets; (ii) contravene any provision of its constitutional documents; (iii) contravene or result in the breach of any agreement to which such Security Party is a party or
by which it or any of its assets or revenues is bound, and (iv) constitute a default under any agreement to which such Security Party is a party or by which it or any of its assets or revenues are bound;
|
|
(f) |
no third party has any Security Interest, other than the Permitted Security Interests, or any other interest, right or claim over, in or in relation to the Vessel, this Charter or any moneys payable hereunder
and/or any of the other Transaction Documents;
|
|
(g) |
except as specifically referred to in any Legal Opinion, all payments which a Security Party is liable to make under any Transaction Document to which such Security Party is a party may be made by such party
without deduction or
|
|
(h) |
no legal or administrative action of any kind whatsoever involving a Security Party which has or, in the opinion of the Owners, is likely to have a Material Adverse Effect has been commenced or taken;
|
|
(i) |
each Security Party has paid all taxes applicable to, or imposed on or in relation to it, its business or if applicable, the Vessel, except for those being contested in good faith with adequate reserves;
|
|
(j) |
subject to the Legal Reservations:
|
|
(i) |
the choice of governing law as stated in each Transaction Document to which a Security Party is party to and the agreement by such party to refer disputes to the relevant courts or tribunal as stated in such
Transaction Document will be recognised and enforced in the Relevant Jurisdictions of such Security Party; and
|
|
(ii) |
any arbitral award, ruling or judgment obtained in the Relevant Jurisdictions of such Security Party in relation to such Transaction Documents will be recognised and enforced in the Relevant Jurisdictions of
such Security Party;
|
|
(k) |
no Security Party nor any of their assets are entitled to immunity on the grounds of sovereignty or otherwise from any legal action or proceeding (which shall include, without limitation, suit, attachment prior
to judgment, execution or other enforcement);
|
|
(l) |
the obligations of each Security Party under each Transaction Document to which it is a party, are the direct, general and unconditional obligations of such Security Party and rank at least pari passu with all other present and future unsecured and unsubordinated creditors of such Security Party save for any obligation which is mandatorily preferred by law and not by virtue of any
contract;
|
|
(m) |
no Security Party (other than the Guarantor) is a US Tax Obligor or registered as a non-Hong Kong company under Companies Ordinance (Cap. 622 of the Laws of Hong Kong), and none of them have established a place
of business in England or the US;
|
|
(n) |
no Security Party is a Restricted Person;
|
|
(o) |
each Security Party is in compliance with all Sanctions laws, and none of them have been or are currently being investigated on compliance with Sanctions, they have received notice or are not aware of any
claim, action, suit or proceeding against any of them with respect to Sanctions and they have not taken any action to evade the application of Sanctions;
|
|
(p) |
neither the Charterers nor any other Security Party is insolvent or in liquidation or administration or subject to any other formal or informal insolvency procedure, and no receiver, administrative receiver,
administrator,
|
|
(q) |
no Termination Event is continuing or might reasonably be expected to result from the entry into and performance of this Charter or any other Transaction Document;
|
|
(r) |
subject to any qualification (if applicable) set out in such information, any information provided by the Charterers (or on their behalf) to the Owners and the other Creditor Parties was true and accurate in
all material respects as at the date it was provided or as the date at which such information was stated;
|
|
(s) | (i) | the financial statements of the Guarantor most recently supplied to the Owners (which, at the date of this Charter, are its Original Financial Statements) were prepared in accordance with GAAP consistently applied save to the extent expressly disclosed in such financial statements; |
|
(ii) |
the financial statements of the Guarantor most recently supplied to the Owners (which, at the date of this Charter, are its Original Financial Statements) give a true and fair view of (if audited) or fairly and
represent (if unaudited) their consolidated financial condition and operations for the period to which they relate, save to the extent expressly disclosed in such financial statements; and
|
|
(iii) |
there has been no material adverse change in the business or consolidated financial condition of the Group since the date of the Guarantor's Original Financial Statements;
|
|
(t) |
the Charterers are a wholly-owned Subsidiary of the Guarantor, which is ultimately controlled by the Substantial Shareholder;
|
|
(u) |
no litigation, arbitration or administrative proceedings of or before any court, arbitral body or agency (which, if adversely determined, would have a Material Adverse Effect on any Security Party) have been
started or (to the best of the knowledge and belief of such Security Party) threatened against it;
|
|
(v) |
no judgment or order of a court, arbitral body or agency which might reasonably be expected to have a Material Adverse Effect has been made against any Security Party; and
|
|
(w) |
each Security Party has complied with all anti-money laundering legislation (to the extent applicable to it) that is relevant in the context of the transactions contemplated by the Transaction Documents to
which it is a party.
|
47. |
CHARTERERS' UNDERTAKINGS
|
47.1 |
General Covenants
|
|
(a) |
they will keep the Vessel registered in the name of the Owners under the laws and flag of the Republic of Liberia, and shall not do or permit to be done anything, or omit to do anything which could or might
result in:
|
|
(i) |
such registration being forfeited or imperilled; or
|
|
(ii) |
the Vessel being required to be registered under any other law or flag
|
|
(b) |
they will provide or will procure that each Security Party provides, the Owners with details of any legal or administrative action involving such Security Party or the Vessel or any detention or arrest of the
Vessel or any damage to or alteration of the Vessel in excess of the Major Casualty amount as soon as such action is instituted or it becomes apparent to such Security Party that it is likely to be instituted and is likely to have a
Material Adverse Effect on the ability of a Security Party to perform their obligations under each Transaction Document to which it is a party;
|
|
(c) |
they will, and will procure that each other Security Party will obtain and promptly renew or procure the obtainment or renewal of and provide copies of, from time to time, any necessary consents, approvals,
Authorisations, licenses or permits of any regulatory body or authority required under any law or regulation of a Relevant Jurisdiction of such Security Party (i) to enable such Security Party to perform its obligations under each
Transaction Document to which it is a party (including without limitation to sell, charter and operate the Vessel) and (ii) to ensure the legality, validity, enforceability or admissibility in evidence of any Transaction Document to which
such Security Party is subject;
|
|
(d) |
they will not, and will procure that each other Security Party will not, create, assume or permit to exist any Security Interest of any kind upon any Transaction Document to which such Security Party is a
party, and if applicable, the Vessel, in each case other than Permitted Security Interests;
|
|
(e) |
they will at their own cost, and will procure that each other Security Party will:
|
|
(i) |
do all that such Security Party can to ensure that any Transaction Document to which such Security Party is a party validly creates the obligations and the Security Interests which Security Party purports to
create; and
|
|
(ii) |
without limiting the generality of paragraph (i) above, where necessary promptly register, file, record or enrol any Transaction Document to which such Security Party is a party with any court or authority in
all Relevant Jurisdictions of such Security Party, pay any stamp, registration or similar tax in all Relevant Jurisdictions of such Security
|
|
(f) |
they will, and will procure that each other Security Party will:
|
|
(i) |
notify the Owners as soon as it becomes aware of the occurrence of (A) any Termination Event and (B) any other matters which might lead to an occurrence of any Termination Event; and
|
|
(ii) |
notify the Owners of any steps or action which they are, or such Security Party is, taking, or considering taking, to remedy or mitigate the effect of such occurrence,
|
|
(g) |
they will, and will procure that each other Security Party will, as soon as practicable after receiving the request, provide the Owners with any additional financial or other information relating:
|
|
(i) |
to themselves and/or the Vessel (including, but not limited to the condition and location of the Vessel); or
|
|
(ii) |
to any other matter relevant to, or to any provision of any Transaction Document to which it is a party;
|
|
(h) |
they will provide the Owners with all such information as the Owners shall require regarding employment of the Vessel (including cargo, voyage details such as duration, loading port and discharge port) every
three (3) months throughout the Charter Period, and engagements, particulars of all towages and salvages of the Vessel, and copies of all charters and other contracts of her employment or otherwise howsoever concerning her;
|
|
(i) |
without prejudice to Clause 47, comply, or procure compliance, and will procure that each other Security Party and any Approved Manager of the Vessel will comply or procure compliance, with all laws or
regulations relating to the Vessel and its ownership, employment, operation, management and registration, including the ISM Code, the ISPS Code, all Environmental Laws and the laws of the Vessel's registry;
|
|
(j) |
the Vessel shall be classed and maintained in the highest class with the Classification Society upon Delivery and shall be free of all overdue recommendations and requirements and they shall promptly provide
class records and inspection reports of the Vessel to the Owners;
|
|
(k) |
neither the Charterers nor any other Security Party shall enter or be permitted to enter, into any form of merger, sub-division, amalgamation or other reorganisation or change of ownership;
|
|
(l) | (i) | they shall permit the Owners (at the expense of the Charterers) by surveyors or other persons appointed by them for such purpose to board the Vessel no more than once per calendar year during the Charter Period or, following the occurrence of a Termination Event which is continuing, at all reasonable times for the purpose of inspecting her, provided that, unless a Termination Event has occurred and is continuing, such inspection shall not unduly disrupt or interfere with the normal daily operations of the Vessel; |
|
(ii) |
they shall provide all proper facilities for such inspections; and
|
|
(iii) |
they shall give the Owners reasonable advance notice of any intended drydocking of the Vessel (whether for the purpose of classification, survey or otherwise);
|
|
(m) | (i) | they will ensure that the Market Value of the Vessel shall be tested once every twelve (12) months commencing from the Commencement Date in the absence of a Termination Event, and upon the occurrence of a Termination Event which is continuing, the Market Value of the Vessel shall be tested at any time at the request of the Owners; |
|
(ii) |
in the event of the failure or delay of the Charterers to arrange such testing of the Market Value of the Vessel, the Owners shall have the liberty to arrange such testing at such time as the Owners shall
require; and
|
|
(iii) |
they shall pay the amount of the fees and expenses of an Approved Valuer incurred for all such valuations and all legal and other expenses reasonably incurred by the Owners in connection with any matter arising
out of this Clause;
|
|
(n) |
they will ensure that the Market Value of the Vessel shall at all times be equal to or greater than one hundred and twenty per cent. (120%) of the Charterhire Principal, however, if the Owners notify the
Charterers that the Market Value of the Vessel has fallen below one hundred and twenty per cent. (120%) of the Charterhire Principal, the Charterers shall, unless otherwise agreed by the Owners, within thirty (30) days of the Owners'
receipt of the relevant valuation of the Vessel, provide additional cash deposit or other security in a form and in an amount acceptable to the Owners or prepay the Charterhire Principal to cover the shortfall. Any amount prepaid pursuant
to this Clause 47.1(n) shall be applied towards reducing the instalments of Fixed Charterhire (for the avoidance of doubt, excluding the Balloon Payment) falling on or after the date of such prepayment by the amount of such prepayment on
a pro-rata basis;
|
|
(o) |
they will notify the Owners promptly of:
|
|
(i) |
any Environmental Claim made against the Charterers in connection with the Vessel, or any Environmental Incident, arrest or detention of the Vessel, any exercise or purported exercise of any lien on the Vessel
or its Earnings or any requisition of the Vessel for hire; and
|
|
(ii) |
any casualty or occurrence as a result of which the Vessel has become or is, by the passing of time or otherwise, likely to become, a Major Casualty;
|
|
(p) | (i) | they shall not permit any chartering of the Vessel on a time charter basis of one (1) calendar year or more unless the Charterers shall have provided the Owners with prior written notice of such chartering together with detailed information about the intended Sub-Charterer, the proposed terms of the intended Sub-Charter and such further information as the Owners may reasonably request; and |
|
(ii) |
except with the prior written consent of the Owners (and then only subject to such terms as the Owners may impose), they shall not let the Vessel:
|
|
(A) |
on demise charter for any period;
|
|
(B) |
on terms whereby more than two (2) months' hire (or the equivalent) is payable in advance; or
|
|
(C) |
on any terms other than arms' length terms;
|
|
(q) |
they shall comply, and shall procure that each other Security Party complies, with:
|
|
(i) |
all applicable laws to which it may be subject (including, but not limited to, Business Ethics Laws, anti-bribery and corruption laws and anti-money lending laws); and
|
|
(ii) |
all laws and regulations in respect of Sanctions, and in particular, they shall effect and maintain a sanctions compliance policy to ensure compliance with all such laws and regulations implemented from time to
time;
|
|
(r) |
the Vessel shall not be employed, operated or managed in any manner which (i) is contrary to any Sanctions and in particular, the Vessel shall not be used by or for the benefit for any party which is a target
of Sanctions, or trade to any Restricted Country; or (ii) would trigger the operation of any sanctions limitation or exclusion clause in any insurance documentation;
|
|
(s) |
they will, and will procure that each other Security Party will, promptly notify the Owners and provide all information in relation to its business and operations which may be relevant for the purposes of
ascertaining whether they are in compliance with all laws and regulations relating to Sanctions, and in particular, they shall notify the Owners in writing immediately upon being aware that any of its shareholders or directors, officers
of employees is a Restricted Person or has otherwise become a target of Sanctions;
|
|
(t) |
they shall not appoint or permit to be appointed any manager of the Vessel unless it is an Approved Manager appointed on terms acceptable to the Owners and their financiers (if any) and such Approved Manager
has (prior to accepting its appointment) entered into a Manager's Undertaking;
|
|
(u) |
they shall notify the Owners in writing as soon as they become aware that the Charterers are likely to, or will receive, any tax credit in relation to any payments made by any Sub-Charterer to it;
|
|
(v) |
save with the prior written consent of the Owners, they shall ensure that no Change of Control occurs;
|
|
(w) |
they shall, at their own expense, replace, renew or substitute any equipment of the Vessel as shall be so damaged or worn as to be unfit for use. Title to any part replaced, renewed or substituted shall remain
with the Owners;
|
|
(x) |
save with the prior written consent of the Owners, there shall not be any transfer or disposal of:
|
|
(i) |
the legal or beneficial shareholding of the Charterers; or
|
|
(ii) |
the legal or beneficial shareholding of the Guarantor,
|
|
(y) |
they shall not create, incur, assume, suffer to exist or in any manner become or remain liable for any Financial Indebtedness, other than:
|
|
(i) |
Financial Indebtedness normally associated with the day to day operation of the Vessel, or otherwise in the normal course of business;
|
|
(ii) |
Financial Indebtedness under the Transaction Documents; and
|
|
(iii) |
Financial Indebtedness, including:
|
|
(A) |
all shareholder's and intercompany loans, which by its terms is subordinate and subject in right of payment to the prior payment in full of the Financial Indebtedness under or pursuant to the Transaction
Documents, as provided in paragraph (z) below;
|
|
(B) |
all shareholder's and intercompany advances, which upon occurrence of a Termination Event which is continuing, shall be subordinated and subject in right of payment to the prior payment in full of the Financial
Indebtedness under or pursuant to the Transaction Documents, as provided in paragraph (aa) below,
|
|
(z) |
they acknowledge to and undertake with the Owners that all shareholder's and intercompany loans from time to time made by the Guarantor or any other member of the Group to the Charterers:
|
|
(i) |
are and shall be subordinated in all respects to all amounts owing and which may in future become owing by the Charterers under this Charter and the other Transaction Documents;
|
|
(ii) |
shall not be repaid or be subject to payment of interest (although interest may accrue);
|
|
(iii) |
are and shall remain unsecured by any Security Interest over the whole or any part of the assets of the Charterers; and
|
|
(iv) |
are not and shall not be capable of becoming subject to any right of set-off or counterclaim;
|
|
(aa) |
they acknowledge to and undertake with the Owners that all shareholder's and intercompany advances from time to time made by the Guarantor or any other member of the Group to the Charterers:
|
|
(i) |
shall be non-interest bearing;
|
|
(ii) |
are and shall remain unsecured by any Security Interest over the whole or any part of the assets of the Charterers;
|
|
(iii) |
are not and shall not be capable of becoming subject to any right of set-off or counterclaim; and
|
|
(iv) |
upon occurrence of a Termination Event which is continuing:
|
|
(A) |
shall not be repaid; and
|
|
(B) |
shall be subordinated in all respects to all amounts owing and which may in future become owing by the Charterers under this Charter and the other Transaction Documents;
|
|
(bb) |
they shall not declare or pay any dividends unless no Termination Event has occurred or will occur as a result of such declaration or payment;
|
|
(cc) |
they shall, and shall procure that each other Security Parties will, ensure that all the Security Perfection Requirements have been or will be done or obtained (as the case may be) no later than the latest date
permitted by applicable law and in any event by such date as the Owners and the Security Trustee may specify;
|
|
(dd) |
they shall, and shall procure that each other Security Parties will, conduct their respective business in compliance with applicable anti-corruption laws; and
|
|
(ee) |
they shall provide the documents and evidence specified in Clause 35.2 in form and substance satisfactory to the Owners as soon as the same become
|
48. |
PURCHASE OPTION
|
48.1 |
Subject to Clause 48.2, the Owners hereby grant to the Charterers a purchase option to require the Owners to sell all of the Owners' beneficial and legal right, title and interest in the Vessel and all
belonging to her, to the Charterers at the Purchase Option Price upon the terms and conditions of this Charter.
|
48.2 |
Subject to the other terms and conditions of this Charter, the Purchase Option shall only be exercisable by the Charterers on or after the third (3rd) anniversary date of the Commencement Date provided that no
Termination Event has occurred and is continuing.
|
48.3 |
The Purchase Option may be exercised by the Charterers by giving the Owners at least ninety (90) days' prior written notice of their intention to exercise the Purchase Option such that the Purchase Option
Notice shall accordingly be given to the Owners no later than the date falling ninety (90) days' prior to the intended Purchase Option Date (unless otherwise agreed by the Owners in their absolute discretion).
|
48.4 |
The Purchase Option Price shall be the aggregate of (but in each case, not double-counting):
|
|
(a) |
any Charterhire due and payable on the Purchase Option Date and any default interest payable under Clause 37.12;
|
|
(b) |
if the Purchase Option Date is a Payment Date, the Charterhire Principal corresponding to that Payment Date in Schedule 2, or if the Purchase Option Date is not a Payment Date, all Charterhire Principal
corresponding to the Payment Date in Schedule 2 immediately preceding the Purchase Option Date (in each case, the Relevant Charterhire Principal);
|
|
(c) |
if the Purchase Option Date is not a Payment Date, any Breakfunding Costs;
|
|
(d) |
all costs (including, but not limited to, legal costs) and expenses reasonably incurred by the Owners under this Charter and the other Transaction Documents in connection with or as a result of the exercise of
the Purchase Option by the Charterers; and
|
|
(e) |
an early termination fee calculated at the following percentage of the Relevant Charterhire Principal:
|
If the Purchase Option Date occurs after the
following anniversary of the Commencement
Date
|
Percentage of Relevant Charterhire Principal
|
|
After 3rd anniversary
|
2%
|
|
After 4th anniversary
|
1.5%
|
|
After 5th anniversary
|
1%
|
|
After 6th anniversary
|
0.5%
|
After 7th anniversary
|
0%
|
|
48.5 | (a) | The Purchase Option Notice shall be signed by a duly authorised officer or attorney of the Charterers and shall contain the following information: |
|
(i) |
the Purchase Option Date; and
|
|
(ii) |
the Relevant Charterhire Principal portion of the Purchase Option Price payable on the Purchase Option Date as determined in accordance with Clause 48.4(b).
|
|
(b) |
Upon receipt of a duly signed and completed Purchase Option Notice in accordance with Clause 48.5(a), the Owners shall notify the Charterers of the Purchase Option Price in writing as soon as practicable.
|
48.6 |
The Charterers may serve a Purchase Option Notice throughout the duration of the Charter Period and is irrevocable once given.
|
48.7 |
Upon the exercise of the Purchase Option, the Owners and the Charterers shall thereupon perform their respective obligations referred to in Clause 50 and the Purchase Option Price and other costs and expenses
reasonably incurred for the sale of the Vessel shall be paid by the Charterers on the Purchase Option Date.
|
49. |
PURCHASE OBLIGATION
|
50. |
SALE OF THE VESSEL BY PURCHASE OPTION AND PURCHASE OBLIGATION
|
|
(a) |
Completion of the exercise of the Purchase Option or the performance of the Purchase Obligation (as the case may be) shall take place on the Relevant Date whereupon the Owners will sell to the Charterers (or
their nominee), and the Charterers (or their nominee) will purchase from the Owners, all the legal and beneficial interest and title in the Vessel, for the Relevant Price on an "as is where is" basis and on the following terms and
conditions:
|
|
(i) |
the Charterers expressly agree and acknowledge that, no condition, warranty or representation of any kind is or has been given by or on behalf of the Owners in respect of the Vessel or any part thereof, and
accordingly the Charterers confirm that that they have not, in entering into this Charter, relied on any condition, warranty or representation by the Owners or any person on the Owners' behalf, express or implied, whether arising by law
or otherwise in relation to the Vessel or any
|
|
(ii) |
the Vessel shall, on completion of sale, be free from any registered mortgages incurred by the Owners (where any mortgages, liens, Security Interests and debts arising out of or in connection with this Charter
or the other Transaction Documents shall be released prior to (or simultaneously with) the transfer and/or release of the Relevant Price by the Charterers (as buyers) to the Owners (as sellers));
|
|
(iii) |
the Relevant Price shall be paid by (or on behalf of) the Charterers to the Owners on the Relevant Date together with unpaid amounts of Charterhire but only up to and including the Relevant Date, and other
moneys owing by or accrued or due from the Charterers under this Charter on or prior to such Relevant Date which remain unpaid; and
|
|
(iv) |
upon the Relevant Price together with the other moneys described under paragraph (iii) above being fully and irrevocably paid to the Owners on, and in accordance with, the terms set forth in this Charter, the
Owners agree (at the cost of the Charterers) to enter into (A) a bill of sale, (B) a commercial invoice, (C) a protocol of delivery and acceptance and (D) such other additional documents as may be necessary for the purpose of registering
the Vessel at its intended flag state upon such transfer, provided that the Charterers shall notify the Owners of any such additional documents no later than five (5) Business Days (or such other mutually agreed date) prior to such
transfer, each in such form as may be required by the Charterers' intended flag state.
|
|
(b) |
For the purposes of this Clause 50:
|
|
(i) |
Relevant Date means:
|
|
(A) |
in relation to the exercise of the Purchase Option, the Purchase Option Date; and
|
|
(B) |
in relation to the performance of the Purchase Obligation, the Purchase Obligation Date.
|
|
(ii) |
Relevant Price means:
|
|
(A) |
in relation to the exercise of the Purchase Option, the Purchase Option Price; and
|
|
(B) |
in relation to the performance of the Purchase Obligation, the Purchase Obligation Price.
|
51. |
NO SET-OFF OR TAX DEDUCTION; FATCA PROVISIONS
|
51.1 |
General
|
|
(a) |
All Charterhire and any payment made from the Charterers to enable the Owners to pay all amounts under a Transaction Document shall be paid punctually:
|
|
(i) |
without any form of set-off, cross-claim or condition and in the case of Charterhire, without previous demand; and
|
|
(ii) |
free and clear of any tax deduction or withholding unless required by law.
|
|
(b) |
Without prejudice to Clause 51.1(a), if the Owners are required by law to make a tax deduction from any payment:
|
|
(i) |
the Owners shall notify the Charterers as soon as they become aware of the requirement; and
|
|
(ii) |
the amount due in respect of the payment shall be increased by the amount necessary to ensure that the Owners receive and retain (free from any liability relating to the tax deduction) a net amount which, after
the tax deduction, is equal to the full amount which they would otherwise have received.
|
|
(c) |
In this Charter, tax deduction means any deduction or withholding for or on account of any present or future tax, other than a FATCA Deduction.
|
51.2 |
FATCA provisions
|
51.2.1 |
FATCA Information
|
|
(a) |
Subject to paragraph (c) below, each Relevant Party shall, within ten (10) Business Days of a reasonable request by another Relevant Party:
|
|
(i) |
confirm to that other Relevant Party whether it is:
|
|
(A) |
a FATCA Exempt Party; or
|
|
(B) |
not a FATCA Exempt Party;
|
|
(ii) |
supply to that other Relevant Party (with a copy to all other Relevant Parties) such forms, documentation and other information relating to its status under FATCA as that other Relevant Party reasonably
requests for the purpose of that other Relevant Party's compliance with FATCA; and
|
|
(iii) |
supply to that other Relevant Party such forms, documentation and other information relating to its status as that other Party reasonably requests for the purposes of that other Relevant Party's compliance with
any other law, regulation, or exchange of information regime.
|
|
(b) |
If a Relevant Party confirms to another Relevant Party under 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 Relevant Party shall so notify all other Relevant Parties reasonably promptly.
|
|
(c) |
Paragraph (a) above shall not oblige any Relevant Party to do anything, and paragraph (a)(iii) above shall not oblige any other Relevant Party to do anything, which would or might in its reasonable opinion
constitute a breach of:
|
|
(i) |
any law or regulation;
|
|
(ii) |
any fiduciary duty; or
|
|
(iii) |
any duty of confidentiality.
|
|
(d) |
If a Relevant Party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with paragraph (a)(i) or (ii) above (including, for
the avoidance of doubt, where paragraph (c) above applies), then such Relevant Party shall be treated for the purposes of the Transaction Documents (and payments made under them) as if it is not a FATCA Exempt Party until such time as the
Relevant Party in question provides the requested confirmation, forms, documentation or other information.
|
51.2.2 |
FATCA Deduction and gross up by Security Parties
|
|
(a) |
If a Security Party is required to make a FATCA Deduction, that Security Party shall make that FATCA Deduction and any payment required in connection with that FATCA Deduction within the time allowed and in the
minimum amount required by FATCA.
|
|
(b) |
If a FATCA Deduction is required to be made by a Security Party, the amount of the payment due from that Security Party shall be increased to an amount which (after making any FATCA Deduction) leaves an amount
equal to the payment which would have been due if no FATCA Deduction had been required.
|
|
(c) |
The Charterers shall promptly upon becoming aware that a Security Party must make a FATCA Deduction (or that there is any change in the rate or the basis of a FATCA Deduction) notify the Owners accordingly.
|
|
(d) |
Within thirty (30) days of making either a FATCA Deduction or any payment required in connection with that FATCA Deduction, the Security Party making that FATCA Deduction or payment shall deliver to the Owners
evidence reasonably satisfactory to the Owners that the FATCA Deduction has been made or (as applicable) any appropriate payment paid to the relevant governmental or taxation authority.
|
51.2.3 |
FATCA Deduction by the Owners
|
51.2.4 |
FATCA Mitigation
|
52. |
INCREASED COSTS
|
52.1 |
This Clause 52.1 applies if the Owners notify the Charterers that they consider that as a result of:
|
|
(a) |
the introduction or alteration after the date of this Charter of a law or an alteration after the date of this Charter in the manner in which a law is interpreted or applied (disregarding any effect which
relates to the application to payments under this Charter of a tax on the Owners' overall net income); or
|
|
(b) |
complying with any regulation (including any which relates to capital adequacy or liquidity controls or which affects the manner in which the Owners allocates capital resources to their obligations under this
Charter) which is introduced, or altered, or the interpretation or application of which is altered, after the date of this Charter,
|
52.2 |
In this Clause 52.1, increased cost means, in relation to the Owners (without any double counting):
|
|
(a) |
an additional or increased cost incurred as a result of, or in connection with, the Owners having entered into, or being a party to, this Charter, of funding the acquisition of the Vessel pursuant to the MOA or
performing their obligations under this Charter;
|
|
(b) |
an additional or increased cost incurred by the financiers of the Owners (if any) as a result of, or in connection with, the financiers of the Owners (if any) having entered into, or being a party to, the
financing arrangements with the Owners and the relevant Financial Instruments in each case relating to the funding of the acquisition of the Vessel pursuant to the MOA;
|
|
(c) |
a reduction in the amount of any payment to the Owners under this Charter or in the effective return which such a payment represents to the Owners or their financiers (if any) on their capital;
|
|
(d) |
a reduction in the amount of any payment to the financiers of the Owners (if any) under their financing arrangements and relevant Financial Instruments or in the effective return which such a payment represents
to the financiers of the Owners (if any) or on their capital in each case relating to the funding of the acquisition of the Vessel pursuant to the MOA;
|
|
(e) |
any other additional or increased cost of funding or financing the acquisition of the Vessel pursuant to the MOA; and
|
|
(f) |
a liability to make a payment, or a return foregone, which is calculated by reference to any amounts received or receivable by the Owners under this Charter,
|
52.3 |
Subject to the terms of Clause 52.1, the Charterers shall pay to the Owners, within three (3) Business Days of the Owners' demand, the amounts which the Owners from time to time notify the Charterers to be
necessary to compensate the Owners for the increased cost.
|
52.4 |
Clause 53.3 above does not apply to the extent any increased cost is:
|
|
(a) |
attributable to a tax deduction required by law to be made by a Security Party;
|
|
(b) |
attributable to a FATCA Deduction required to be made by a Relevant Party or the Owners;
|
|
(c) |
compensated for by Clause 41.5(b) (or would have been compensated for under Clause 41.5(b) but was not so compensated solely because any of the exclusions in Clause 41.5(b) applied); or
|
|
(d) |
attributable to the wilful breach by the Owners of any law or regulation.
|
53. |
GOVERNING LAW AND JURISDICTION
|
53.1 |
This Charter and any non-contractual obligations arising out of or in connection with it are governed by and shall be construed in accordance with English law and any Dispute arising out of or in connection
with this Charter shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory re-enactment or modification thereof save to the extent necessary to give effect to the provisions of this Clause.
|
53.2 |
The arbitration reference shall be to three (3) arbitrators:
|
|
(a) |
A Party wishing to refer a Dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other Party requiring the other Party to appoint its own arbitrator within
fourteen (14) calendar days of that notice, and stating it will appoint its arbitrator as sole arbitrator unless the other Party appoints its own arbitrator and gives notice that it has done so within the fourteen (14) days specified.
|
|
(b) |
If the other Party does not appoint its own arbitrator and give notice that it has done so within the fourteen (14) days specified, the Party referring a Dispute to arbitration may, without the requirement of
any further prior notice to the other Party, appoint its arbitrator as sole arbitrator and shall advise the other Party accordingly. The award of a sole arbitrator shall be binding on both Parties as if he/she had been appointed by
agreement.
|
|
(c) |
Where each Party appoints its own arbitrator, then the two (2) arbitrators so appointed may proceed with the arbitration and at any time thereafter appoint a third arbitrator so long as they do so before any
substantive hearing or forthwith in the event that they cannot agree on any matter relating to the arbitration. If the said two arbitrators do not appoint a third within fourteen (14) days of one calling upon the other to do so, or if
they are in disagreement as to the third arbitrator, either arbitrator or a Party shall apply to the London Maritime Arbitrators Association (LMAA) for the appointment of the third arbitrator.
|
|
(d) |
The language used in the arbitration shall be English. The arbitration shall be conducted in accordance with the LMAA Terms current at the time when the arbitration proceedings are commenced.
|
|
(e) |
Nothing herein shall prevent the Parties agreeing in writing to vary these provisions to provide for the appointment of a sole arbitrator and, if necessary, for the LMAA to exercise its statutory power to
appoint the sole arbitrator if the Parties cannot agree on the appointment.
|
53.3 |
In this Clause 53, proceedings means proceedings of any kind, including an application for a provisional or protective measure and a Dispute
means any dispute arising out of or in connection with this Charter (including a dispute relating to the existence, validity or termination of this Charter) or any non-contractual obligation arising out of or in connection with
this Charter.
|
54. |
MISCELLANEOUS
|
54.1 |
The Charterers waive any rights of sovereign immunity which they or any of their properties may enjoy in any jurisdiction and subjects itself to civil and commercial law with respect to their obligations under
this Charter.
|
54.2 |
No term of this Charter is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not Party.
|
54.3 |
This Charter and each Transaction Document may be executed in any number of counterparts and by the different Parties or thereto on separate counterparts, and this has the same effect as if the signatures on
the counterparts were on a single copy of this Charter or that Transaction Document, as the case may be.
|
SIGNED for and on behalf of
|
)
|
||
ORIENTAL FLEET TANKER 11
|
)
|
||
LIMITED
|
)
|
||
(东方富利 TANKER11 有限公司)
|
)
|
||
by Li Bing, Director
|
)
|
||
in the presence of:
|
)
|
||
SIGNED for and on behalf of
|
)
|
||
MONTE CARLO SEVEN SHIPPING
|
)
|
||
COMPANY LIMITED
|
)
|
||
by
|
)
|
||
Attorney-in-Fact
|
)
|
||
in the presence of:
|
)
|
||
Monthly Period
|
Commencement Date /
Payment Date) |
Charterhire
(US$) |
Charterhire Principal (US$)
|
|
Upfront
Charterhire / Balloon Payment |
Fixed
Charterhire (being 1/120 of Financing Principal less Balloon Payment) |
Aggregate
Outstanding Fixed Charterhire and Balloon Payment |
||
1st Payment Date
(Commencement Date) |
Upfront
Charterhire:
6,400,000
|
160,000
|
25,440,000
|
|
1
|
2nd Payment Date (the date falling on the 10th day of the month falling immediately after Commencement Date)
|
160,000
|
25,280,000
|
|
2
|
3rd Payment Date
(the date falling on the 10th day of the second (2nd) month falling immediately after Commencement Date) |
160,000
|
25,120,000
|
|
3
|
4th Payment Date
(the date falling on the 10th day of the third (3rd) month falling immediately after Commencement Date) |
160,000
|
24,960,000
|
|
4
|
5th Payment Date
(the date falling on the 10th day of the fourth (4th) month falling immediately after Commencement Date) |
160,000
|
24,800,000
|
|
5
|
6th Payment Date
(the date falling on the 10th day of the fifth (5th) month falling immediately after Commencement Date) |
160,000
|
24,640,000
|
|
6
|
7th Payment Date
(the date falling on the 10th day of the sixth (6th) month falling immediately after Commencement Date) |
160,000
|
24,480,000
|
7
|
8th Payment Date
(the date falling on the 10th day of the seventh
(7th) month falling
immediately after
Commencement Date) |
160,000
|
24,320,000
|
|
8
|
9th Payment Date
(the date falling on the 10th day of the eighth
(8th) month falling
immediately after
Commencement Date) |
160,000
|
24,160,000
|
|
9
|
10th Payment Date
(the date falling on the 10th day of the ninth (9th) month falling immediately after Commencement Date) |
160,000
|
24,000,000
|
|
10
|
11th Payment Date
(the date falling on the 10th day of the tenth (10th) month falling immediately after Commencement Date) |
160,000
|
23,840,000
|
|
11
|
12th Payment Date
(the date falling on the 10th day of the eleventh (11th) month falling
immediately after
Commencement Date) |
160,000
|
23,680,000
|
|
12
|
13th Payment Date
(the date falling on the 10th day of the twelve (12th) month falling
immediately after
Commencement Date) |
160,000
|
23,520,000
|
|
13
|
14th Payment Date
(the date falling on the 10th day of the thirteenth (13th) month falling immediately after Commencement Date) |
160,000
|
23,360,000
|
|
14
|
15th Payment Date
(the date falling on the 10th day of the fourteenth (14th) month falling immediately after Commencement Date) |
160,000
|
23,200,000
|
|
15
|
16th Payment Date
(the date falling on the 10th day of the fifteenth (15th) month falling
immediately after
Commencement Date) |
160,000
|
23,040,000
|
16
|
17th Payment Date (the
date falling on the 10th day of the sixteenth (16th) month falling immediately after Commencement Date) |
160,000
|
22,880,000
|
|
17
|
18th Payment Date
(the date falling on the 10th day of the seventeenth (17th) month falling immediately after Commencement Date) |
160,000
|
22,720,000
|
|
18
|
19th Payment Date
(the date falling on the 10th day of the eighteenth (18th) month falling immediately after Commencement Date) |
160,000
|
22,560,000
|
|
19
|
20th Payment Date
(the date falling on the 10th day of the nineteenth (19th) month falling immediately after Commencement Date) |
160,000
|
22,400,000
|
|
20
|
21st Payment Date
(the date falling on the 10th day of the twentieth (20th) month falling immediately after Commencement Date) |
160,000
|
22,240,000
|
|
21
|
22nd Payment Date
(the date falling on the 10th day of the twenty-first (21st) month falling immediately after Commencement Date) |
160,000
|
22,080,000
|
|
22
|
23rd Payment Date
(the date falling on the 10th day of the twenty- second (22nd) month falling immediately after Commencement Date) |
160,000
|
21,920,000
|
|
23
|
24th Payment Date
(the date falling on the 10th day of the twenty- third (23rd) month falling immediately after Commencement Date) |
160,000
|
21,760,000
|
|
24
|
25th Payment Date
(the date falling on the 10th day of the twenty- fourth (24th) month falling immediately after Commencement Date) |
160,000
|
21,600,000
|
34
|
35th Payment Date
(the date falling on the 10th day of the thirty- fourth (34th) month falling immediately after Commencement Date) |
160,000
|
20,000,000
|
|
35
|
36th Payment Date
(the date falling on the 10th day of the thirty-fifth (35th) month falling immediately after Commencement Date) |
160,000
|
19,840,000
|
|
36
|
37th Payment Date
(the date falling on the 10th day of the thirty-sixth (36th) month falling immediately after Commencement Date) |
160,000
|
19,680,000
|
|
37
|
38th Payment Date
(the date falling on the
10th day of the thirty-
seventh (37th) month falling
immediately after
Commencement Date)
|
160,000
|
19,520,000
|
|
38
|
39th Payment Date
(the date falling on the 10th day of the thirty- eighth (38th) month falling immediately after Commencement Date) |
160,000
|
19,360,000
|
|
39
|
40th Payment Date
(the date falling on the 10th day of the thirty-ninth (39th) month falling immediately after Commencement Date) |
160,000
|
19,200,000
|
|
40
|
41st Payment Date
(the date falling on the 10th day of the fortieth (40th) month falling immediately after Commencement Date) |
160,000
|
19,040,000
|
|
41
|
42nd Payment Date
(the date falling on the 10th day of the forty-first (41st) month falling immediately after Commencement Date) |
160,000
|
18,880,000
|
|
42
|
43rd Payment Date
(the date falling on the 10th day of the forty- second (42nd) month falling immediately after Commencement Date) |
160,000
|
18,720,000
|
43
|
44th Payment Date
(the date falling on the 10th day of the forty-third (43rd) month falling immediately after Commencement Date) |
160,000
|
18,560,000
|
|
44
|
45th Payment Date
(the date falling on the 10th day of the forty- fourth (44th) month falling immediately after Commencement Date) |
160,000
|
18,400,000
|
|
45
|
46th Payment Date
(the date falling on the 10th day of the forty-fifth (45th) month falling immediately after Commencement Date) |
160,000
|
18,240,000
|
|
46
|
47th Payment Date
(the date falling on the 10th day of the forty-sixth (46th) month falling immediately after Commencement Date) |
160,000
|
18,080,000
|
|
47
|
48th Payment Date
(the date falling on the
10th day of the forty-
seventh (47th) month
falling immediately after
Commencement Date) |
160,000
|
17,920,000
|
|
48
|
49th Payment Date
(the date falling on the 10th day of the forty- eighth (48th) month falling immediately after Commencement Date) |
160,000
|
17,760,000
|
|
49
|
50th Payment Date
(the date falling on the 10th day of the forty-ninth (49th) month falling immediately after Commencement Date) |
160,000
|
17,600,000
|
|
50
|
51st Payment Date
(the date falling on the 10th day of the fiftieth (50th) month falling
immediately after
Commencement Date) |
160,000
|
17,440,000
|
|
51
|
52nd Payment Date
(the date falling on the 10th day of the fifty-first (51st) month falling immediately after Commencement Date) |
160,000
|
17,280,000
|
52
|
53rd Payment Date
(the date falling on the 10th day of the fifty- second (52nd) month falling immediately after Commencement Date) |
160,000
|
17,120,000
|
|
53
|
54th Payment Date
(the date falling on the 10th day of the fifty-third (53rd) month falling immediately after Commencement Date) |
160,000
|
16,960,000
|
|
54
|
55th Payment Date
(the date falling on the 10th day of the fifty-fourth (54th) month falling immediately after Commencement Date) |
160,000
|
16,800,000
|
|
55
|
56th Payment Date
(the date falling on the 10th day of the fifty-fifth (55th) month falling immediately after Commencement Date) |
160,000
|
16,640,000
|
|
56
|
57th Payment Date
(the date falling on the 10th day of the fifty-sixth (56th) month falling immediately after Commencement Date) |
160,000
|
16,480,000
|
|
57
|
58th Payment Date
(the date falling on the 10th day of the fifty- seventh (57th) month falling immediately after Commencement Date) |
160,000
|
16,320,000
|
|
58
|
59th Payment Date
(the date falling on the 10th day of the fifty-eighth (58th) month falling immediately after Commencement Date) |
160,000
|
16,160,000
|
|
59
|
60th Payment Date
(the date falling on the 10th day of the fifty-ninth (59th) month falling immediately after Commencement Date) |
160,000
|
16,000,000
|
|
60
|
61st Payment Date
(the date falling on the 10th day of the sixtieth (60th) month falling
immediately after
Commencement Date) |
160,000
|
15,840,000
|
61
|
62nd Payment Date
(the date falling on the 10th day of the sixty-first (61st) month falling immediately after Commencement Date) |
160,000
|
15,680,000
|
|
62
|
63rd Payment Date
(the date falling on the
10th day of the sixty-
second (62nd) month
falling immediately after
Commencement Date) |
160,000
|
15,520,000
|
|
63
|
64th Payment Date
(the date falling on the 10th day of the sixty-third (63rd) month falling immediately after Commencement Date) |
160,000
|
15,360,000
|
|
64
|
65th Payment Date
(the date falling on the 10th day of the sixty- fourth (64th) month falling immediately after Commencement Date) |
160,000
|
15,200,000
|
|
65
|
66th Payment Date
(the date falling on the 10th day of the sixty-fifth (65th) month falling immediately after Commencement Date) |
160,000
|
15,040,000
|
|
66
|
67th Payment Date
(the date falling on the 10th day of the sixty-sixth (66th) month falling immediately after Commencement Date) |
160,000
|
14,880,000
|
|
67
|
68th Payment Date
(the date falling on the
10th day of the sixty-
seventh (67th) month
falling immediately after
Commencement Date) |
160,000
|
14,720,000
|
|
68
|
69th Payment Date
(the date falling on the 10th day of the sixty- eighth (68th) month falling immediately after Commencement Date) |
160,000
|
14,560,000
|
|
69
|
70th Payment Date
(the date falling on the 10th day of the sixty-ninth (69th) month falling immediately after Commencement Date) |
160,000
|
14,400,000
|
70
|
71st Payment Date
(the date falling on the 10th day of the seventieth (70th) month falling immediately after Commencement Date) |
160,000
|
14,240,000
|
|
71
|
72nd Payment Date
(the date falling on the 10th day of the seventy- first (71st) month falling immediately after Commencement Date) |
160,000
|
14,080,000
|
|
72
|
73rd Payment Date
(the date falling on the
10th day of the seventy-
second (72nd) month falling
immediately after
Commencement Date)
|
160,000
|
13,920,000
|
|
73
|
74th Payment Date
(the date falling on the 10th day of the seventy- third (73rd) month falling immediately after Commencement Date) |
160,000
|
13,760,000
|
|
74
|
75th Payment Date
(the date falling on the 10th day of the seventy- fourth (74th) month falling immediately after Commencement Date) |
160,000
|
13,600,000
|
|
75
|
76th Payment Date
(the date falling on the 10th day of the seventy- fifth (75th) month falling immediately after Commencement Date) |
160,000
|
13,440,000
|
|
76
|
77th Payment Date
(the date falling on the 10th day of the seventy- sixth (76th) month falling immediately after Commencement Date) |
160,000
|
13,280,000
|
|
77
|
78th Payment Date
(the date falling on the
10th day of the seventy-
seventh (77th) month falling
immediately after
Commencement Date)
|
160,000
|
13,120,000
|
|
78
|
79th Payment Date
(the date falling on the 10th day of the seventy- eighth (78th) month falling immediately after Commencement Date) |
160,000
|
12,960,000
|
79
|
80th Payment Date
(the date falling on the 10th day of the seventy- ninth (79th) month falling immediately after Commencement Date) |
160,000
|
12,800,000
|
|
80
|
81st Payment Date
(the date falling on the 10th day of the eightieth (80th) month falling immediately after Commencement Date) |
160,000
|
12,640,000
|
|
81
|
82nd Payment Date
(the date falling on the 10th day of the eighty-first (81st) month falling immediately after Commencement Date) |
160,000
|
12,480,000
|
|
82
|
83rd Payment Date
(the date falling on the
10th day of the eighty-
second (82nd) month falling
immediately after
Commencement Date)
|
160,000
|
12,320,000
|
|
83
|
84th Payment Date
(the date falling on the 10th day of the eighty- third (83rd) month falling immediately after Commencement Date) |
160,000
|
12,160,000
|
|
84
|
85th Payment Date
(the date falling on the 10th day of the eighty- fourth (84th) month falling immediately after Commencement Date) |
160,000
|
12,000,000
|
|
85
|
86th Payment Date
(the date falling on the 10th day of the eighty-fifth (85th) month falling immediately after Commencement Date) |
160,000
|
11,840,000
|
|
86
|
87th Payment Date
(the date falling on the 10th day of the eighty- sixth (86th) month falling immediately after Commencement Date) |
160,000
|
11,680,000
|
|
87
|
88th Payment Date
(the date falling on the
10th day of the eighty-
seventh (87th) month falling
immediately after
Commencement Date)
|
160,000
|
11,520,000
|
88
|
89th Payment Date
(the date falling on the 10th day of the eighty- eighth (88th) month falling immediately after Commencement Date) |
160,000
|
11,360,000
|
|
89
|
90th Payment Date
(the date falling on the 10th day of the eighty- ninth (89th) month falling immediately after Commencement Date) |
160,000
|
11,200,000
|
|
90
|
91st Payment Date
(the date falling on the 10th day of the ninetieth (90th) month falling immediately after Commencement Date) |
160,000
|
11,040,000
|
|
91
|
92nd Payment Date
(the date falling on the 10th day of the ninety-first (91st) month falling immediately after Commencement Date) |
160,000
|
10,880,000
|
|
92
|
93rd Payment Date
(the date falling on the
10th day of the ninety-
second (92nd) month falling
immediately after
Commencement Date)
|
160,000
|
10,720,000
|
|
93
|
94th Payment Date
(the date falling on the 10th day of the ninety- third (93rd) month falling immediately after Commencement Date) |
160,000
|
10,560,000
|
|
94
|
95th Payment Date
(the date falling on the 10th day of the ninety- fourth (94th) month falling immediately after Commencement Date) |
160,000
|
10,400,000
|
|
95
|
96th Payment Date
(the date falling on the 10th day of the ninety-fifth (95th) month falling immediately after Commencement Date) |
160,000
|
10,240,000
|
|
96
|
97th Payment Date
(the date falling on the 10th day of the ninety- sixth (96th) month falling immediately after Commencement Date) |
160,000
|
10,080,000
|
97
|
98th Payment Date
(the date falling on the
10th day of the ninety-
seventh (97th) month falling
immediately after
Commencement Date)
|
160,000
|
9,920,000
|
|
98
|
99th Payment Date
(the date falling on the 10th day of the ninety- eighth (98th) month falling immediately after Commencement Date) |
160,000
|
9,760,000
|
|
99
|
100th Payment Date
(the date falling on the 10th day of the ninety- ninth (99th) month falling immediately after Commencement Date) |
160,000
|
9,600,000
|
|
100
|
101st Payment Date
(the date falling on the 10th day of the one hundredth (100th) month falling immediately after Commencement Date) |
160,000
|
9,440,000
|
|
101
|
102nd Payment Date
(the date falling on the 10th day of the one hundred and first (101st) month falling immediately after Commencement Date) |
160,000
|
9,280,000
|
|
102
|
103rd Payment Date
(the date falling on the 10th day of the one hundred and second (102nd) month falling immediately after Commencement Date) |
160,000
|
9,120,000
|
|
103
|
104th Payment Date
(the date falling on the 10th day of the one hundred and third (103rd) month falling immediately after Commencement Date) |
160,000
|
8,960,000
|
|
104
|
105th Payment Date
(the date falling on the 10th day of the one hundred and fourth (104th) month falling immediately after Commencement Date) |
160,000
|
8,800,000
|
112
|
113rd Payment Date
(the date falling on the
10th day of the one
hundred and
twelve (112th) month falling
immediately after
Commencement Date)
|
160,000
|
7,520,000
|
|
113
|
114th Payment Date
(the date falling on the
10th day of the one
hundred and thirteenth (113th) month falling
immediately after
Commencement Date) |
160,000
|
7,360,000
|
|
114
|
115th Payment Date
(the date falling on the
10th day of the one
hundred and fourteenth (114th) month falling
immediately after
Commencement Date) |
160,000
|
7,200,000
|
|
115
|
116th Payment Date
(the date falling on the 10th day of the one hundred and fifteenth (115th) month falling immediately after Commencement Date) |
160,000
|
7,040,000
|
|
116
|
117th Payment Date
(the date falling on the
10th day of the one
hundred and sixteenth (116th) month falling
immediately after
Commencement Date) |
160,000
|
6,880,000
|
|
117
|
118th Payment Date
(the date falling on the 10th day of the one hundred and seventeenth (117th) month falling immediately after Commencement Date) |
160,000
|
6,720,000
|
|
118
|
119th Payment Date
(the date falling on the 10th day of the one hundred and eighteenth (118th) month falling immediately after Commencement Date) |
160,000
|
6,560,000
|
119
|
120th Payment Date
(the date falling on the
10th day of the one
hundred nineteenth (119th)
month falling immediately after Commencement
Date)
|
Balloon Payment:
6,400,000
|
160,000
|
0 |
Collateral Owners
|
Collateral Charterers
|
Collateral Vessels
|
Name: Oriental Fleet TANKER 12 Limited (东方富利 TANKER12 有限公司)
Place of Incorporation: Republic of the Marshall Islands
Registration No.: 101326 ("Collateral Owner A")
|
Name: Monte Carlo 71 Shipping Company Limited Place of Incorporation: Republic of the Marshall Islands
Registration No.: 69834 ("Collateral Charterer A")
|
One (1) d/w 50,000 product oil/chemical tanker named "Stenaweco Energy" presently registered in the name of Eco Energy LLC under the laws and flag of the Republic of the Marshall Islands with Official Number 5270,
which on delivery to Collateral Owner A will be registered under the laws and flag of the Republic of the Marshall Islands with Official Number 5270
("Collateral Vessel A")
|
Name: Oriental Fleet TANKER 13 Limited (东方富利 TANKER13 有限公司)
Place of Incorporation: Republic of the Marshall Islands
Registration No.: 101327 ("Collateral Owner B")
|
Name: Monte Carlo One Shipping Company Limited Place of Incorporation: Republic of the Marshall Islands
Registration No.: 55324 ("Collateral Charterer B")
|
One (1) d/w 50,000 product oil/chemical tanker named "Stenaweco Evolution" presently registered in the name of Eco Evolution LLC under the laws and flag of the Republic of the Marshall Islands with Official Number
5271, which on delivery to Collateral Owner B will be registered under the laws and flag of the Republic of the Marshall Islands with Official Number 5271
("Collateral Vessel B")
|
Clause
|
Page No.
|
|
1.
|
Definitions and interpretation
|
1
|
2.
|
Guarantee and Indemnity
|
3
|
3.
|
Preservation of Rights
|
3
|
4.
|
Representations and Warranties
|
5
|
5.
|
Covenants
|
6
|
6.
|
Continuing Guarantee
|
6
|
7.
|
Payments
|
6
|
8.
|
Subordination
|
7
|
9.
|
Currency Conversion and Currency Indemnity
|
7
|
10.
|
Suspense Account
|
8
|
11.
|
Set-off
|
8
|
12.
|
Guarantor to comply with Charter
|
8
|
13.
|
Miscellaneous
|
8
|
14.
|
Assignments and Transfers
|
9
|
15.
|
Notices
|
9
|
16.
|
Governing Law and Jurisdiction
|
11
|
Schedule 1 : Representations and Warranties
|
13
|
|
Schedule 2 : Covenants
|
18
|
|
Schedule 3 : Form of Compliance Certificate
|
26
|
|
Guarantee – Execution Page (1/2)
|
28
|
(1) |
TOP SHIPS INC., a corporation incorporated under the laws of the Republic of the Marshall Islands with registration no. 3571, as guarantor (the Guarantor); and
|
(2) |
ORIENTAL FLEET TANKER 11 LIMITED (东方富利 TANKER11 有限公司), a corporation incorporated under the laws of the Republic of the Marshall Islands with registration no. 101325 and registered as a Foreign Maritime Entity under the laws of the Republic of Liberia
with registration no. F-915410, as owner (the Owner).
|
(A) |
The Owner and the Charterer (as defined below) are parties to a bareboat charter party dated on or about the date hereof (as amended and/or supplemented from time to time, the Charter),
pursuant to which the Owner has agreed to charter the Vessel (as defined below) to the Charterer subject to the terms and conditions specified therein.
|
(B) |
As a condition precedent to the obligations of the Owner under the Charter, the Guarantor is required to execute this Guarantee.
|
1. |
Definitions and interpretation
|
1.1 |
Unless the context otherwise requires, words or expressions defined in the Charter (whether specifically or by reference) shall have the same meanings in this Guarantee and this construction shall survive the
termination of the Charter. Where a word or phrase is defined in the Charter and this Guarantee, the definition in this Guarantee shall prevail.
|
1.2 |
In this Guarantee, the following words and expressions shall, except where the context otherwise requires, have the following respective meanings:
|
|
(a) |
all costs, charges and expenses incurred by the Owner in connection with the protection, preservation or enforcement of its rights under any of the Transaction Documents; and
|
|
(b) |
all indebtedness, moneys, obligations and liabilities due, owing or incurred in respect of any variations of the Transaction Documents or the obligations and liabilities imposed under such documents.
|
|
(a) |
execution of all notices, acknowledgments and consents as required under those Transaction Documents; and
|
|
(b) |
any other Authorisations of those Transaction Documents as may be required or recommended in any Legal Opinion.
|
1.3 |
Unless otherwise specified and except where the context otherwise requires, any reference in this Guarantee to:
|
|
(a) |
the singular includes the plural and vice versa;
|
|
(b) |
any person shall be construed so as to include its successors and permitted assigns and permitted transferees in accordance with their respective interests;
|
|
(c) |
any document (including the Charter, this Guarantee, and each other Transaction Document) shall be construed as a reference to such document as amended, restated, supplemented, varied or novated from time to
time in accordance with its terms (to the extent that such document is at the relevant time in effect);
|
|
(d) |
any provision of law shall be construed as a reference to that provision as amended, supplemented, varied, re-enacted, replaced or restated from time to time;
|
|
(e) |
any applicable law includes, without limitation, (i) applicable laws, acts, codes, conventions, decrees, decree-laws, legislation, statutes, treaties and similar
instruments, (ii) applicable final judgments, orders, determinations or awards of any court from which there is no right of appeal (or, if there is a right of appeal, such appeal is not prosecuted within the allowable time) and (iii)
applicable directives, guidance, guidelines, notices, orders, regulations and rules of any governmental, judicial or regulatory authority (whether or not having the force of law but with which, if not having the force of law, compliance
is customary);
|
|
(f) |
a Clause shall be construed as a reference to a clause of this Guarantee;
|
|
(g) |
continuing shall, in relation to a Termination Event, be construed as a reference to a Termination Event which persists and has not been waived or remedied in accordance
with the terms of the Charter;
|
|
(h) |
a person shall be construed as a reference to any association, company, corporation, firm, governmental, judicial or regulatory authority, individual, joint venture,
partnership (including any limited partnership and any limited liability partnership) or trust (in each case whether or not having separate legal personality);
|
|
(i) |
a successor shall be construed so as to mean a successor in title of a person and any person who under the applicable laws of its jurisdiction of incorporation or
domicile has assumed the rights and obligations of such person or to which, under such laws or by agreement or otherwise, such rights and obligations have been transferred; and
|
|
(j) |
the winding-up, dissolution, administration or re-organisation
of a person shall be construed so as to include any equivalent or analogous proceedings under the applicable law of the jurisdiction in which such person is incorporated or formed or any jurisdiction in which such person carries on
business including the seeking of liquidation, winding-up, reorganisation, dissolution, administration, arrangement, adjustment, protection or relief of debtors.
|
1.4 |
Clause headings shall be ignored in the interpretation of this Guarantee.
|
2. |
Guarantee and Indemnity
|
2.1 |
In consideration of the Owner entering into the Charter, the Guarantor irrevocably and unconditionally guarantees to the Owner the due payment and prompt performance by the Charterer and the other Security
Parties of the Guaranteed Obligations when due in accordance with the Charter and the other Transaction Documents.
|
2.2 |
The Guarantor further irrevocably and unconditionally undertakes to pay to the Owner, on the Owner's demand, any such amount which is not paid by the Charterer or the other Security Parties when due and payable
under the Charter, the Collateral Charters and the other Transaction Documents.
|
2.3 |
The Guarantor as principal obligor and as a separate and independent obligation and liability from its obligations and liabilities under Clauses 2.1 and 2.2 agrees to indemnify and keep indemnified the Owner,
in full and on demand, from and against all and any losses, costs, claims, liabilities, damages, demands and expenses suffered or incurred by the Owner arising out of, or in connection with, any failure of the Charterer or any other
Security Party to perform or discharge any of the Guaranteed Obligations.
|
2.4 |
The Owner may serve more than one demand under this Clause 2.
|
3. |
Preservation of Rights
|
3.1 |
The obligations of the Guarantor contained in this Guarantee shall be in addition to and independent of every other security which the Owner may at any time hold in
|
3.2 |
The Guarantor shall be liable under this Guarantee as a principal and independent debtor and accordingly it shall not have, as regards this Guarantee, any of the rights or defences of a surety. Neither the
obligations of the Guarantor contained in this Guarantee nor the rights, powers and remedies conferred upon the Owner by this Guarantee or by law shall be discharged, impaired or otherwise affected by:
|
|
(a) |
the winding-up, dissolution, administration or reorganisation of the Charterer or any other Security Party or any other person or any change in its status, function, control or ownership;
|
|
(b) |
any of the obligations of the Charterer or any other Security Party or any other person under any Transaction Document being or becoming illegal, invalid, void, voidable, unenforceable, ineffective or of
limited force and effect in any respect;
|
|
(c) |
any time or other indulgence being granted or agreed to be granted to either the Charterer or any other Security Party or any other person in respect of any of its obligations under any Transaction Document;
|
|
(d) |
any amendment to, or any variation, waiver or release of, the Charter or the other Transaction Documents or any obligation of either the Charterer or any other Security Party or any other person under any
Transaction Document;
|
|
(e) |
any failure to take, or fully to take, any security contemplated by any Transaction Document or otherwise agreed to be taken in respect of any Security Party's obligations under any Transaction Document;
|
|
(f) |
any failure to realise or fully to realise the value of, or any release, discharge, exchange or substitution of, any security taken in respect of any of either the Charterer's or any other Security Party's
obligations under any Transaction Document;
|
|
(g) |
any purported obligation of either the Charterer or any other Security Party or any other person to the Owner (or any security for that obligation) becoming wholly or in part void, invalid, illegal or
unenforceable for any reason, including negligence; and
|
|
(h) |
any other act, event or omission which, but for this Clause 3.2, might operate to discharge, impair or otherwise affect any of the obligations of the Guarantor contained in this Guarantee or any of the rights,
powers or remedies conferred upon the Owner by this Guarantee, the Charter or any other Transaction Document or by law.
|
3.3 |
Any settlement, discharge or release between the Guarantor and the Owner in relation to this Guarantee shall be conditional upon no right, security, disposition or payment to or in favour of the Owner by any
Security Party or any other person being avoided, set aside, reduced or ordered to be refunded as a result of the operation of any applicable law and if any such right, security, disposition or payment is so avoided, set aside, reduced or
ordered to be refunded, the liability of the Guarantor shall continue and the Owner shall be entitled to recover under this Guarantee the value or
|
3.4 |
The Owner shall not be obliged before exercising any of the rights, powers or remedies conferred upon it by this Guarantee or by law:
|
|
(a) |
to take any action or obtain judgment in any court against the Charterer or any other Security Party;
|
|
(b) |
to make or file any claim or proof in a winding-up or dissolution of either of the Charterer or any other Security Party; or
|
|
(c) |
to enforce or seek to enforce any security taken in respect of the Charterer's or any other Security Party's obligations under the Charter or any other Transaction Document.
|
3.5 |
The Guarantor agrees that, for so long as the Charterer or any other Security Party is under any actual or contingent obligation under the Charter or any other Transaction Document, the Guarantor shall not
exercise any right which the Guarantor may at any time have by reason of this Guarantee or the performance by it of its obligations under this Guarantee:
|
|
(a) |
to be indemnified by the Charterer or any other Security Party or to receive any collateral from the Charterer or any other Security Party in respect of the Guarantor's obligations under this Guarantee;
|
|
(b) |
to claim any contribution from any other guarantor of the Charterer's or any other Security Party's obligations under the Charter or any other Transaction Document;
|
|
(c) |
to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any of the Owner's rights under the Charter or any Transaction Document or of any other guarantee or security taken
pursuant to, or in connection with, the Charter or any other Transaction Document;
|
|
(d) |
to claim or prove in a liquidation or other insolvency proceeding of the Charterer or any other Security Party or any co-surety in competition with the Owner; and/or
|
|
(e) |
receive, claim or have the benefit of any payment, distribution or security from or on account of the Charterer or any other Security Party, or exercise any right of set-off against the Charterer or any other
Security Party.
|
4. |
Representations and Warranties
|
5. |
Covenants
|
6. |
Continuing Guarantee
|
7. |
Payments
|
7.1 |
All payments to be made by the Guarantor under this Guarantee shall be made in the currency in which the corresponding payment obligation of the Charterer is due and payable under the Charter or each other
applicable Transaction Document (as the case may be) and in immediately available, freely transferable, cleared funds to such account of the Owner with such bank as the Owner shall from time to time have specified for this purpose.
|
7.2 |
All payments to be made by the Guarantor under this Guarantee shall be made without set-off or counterclaim and without any deduction or withholding whatsoever. If the Guarantor is obliged by law to make any
deduction or withholding from any such payment, the amount due from the Guarantor in respect of such payment shall be increased to the extent necessary to ensure that, after the making of such deduction or withholding, the Owner receives
a net amount equal to the amount that the Owner would have received had no such deduction or withholding been required to be made.
|
7.3 |
The Guarantor agrees that:
|
|
(a) |
if any payment received by the Owner in respect of moneys owing or due and payable by the Guarantor is avoided on the subsequent insolvency or liquidation of the Guarantor, under any laws relating to insolvency
or liquidation, that payment does not discharge or diminish the liability of the Guarantor under this Guarantee, which continues to apply as if that payment at all times remained owing; and
|
|
(b) |
if the Guarantor has not paid to the Owner the full amount of all sums due under this Guarantee, the Owner may (for the purpose of enabling the Owner to sue the Guarantor and/or any other guarantor of the
liabilities which are hereby guaranteed or to prove in its or their liquidation or in any similar proceedings for any moneys due and unpaid by the Guarantor to the Owner) at any time place and keep for such time as it may think fit any
moneys received under this Guarantee, or under such other guarantees or from any other person, to the credit of an account or accounts (bearing interest at a commercial rate) without any obligation on the part of the Owner to apply the
same or any part thereof in or towards the discharge of the indebtedness and liabilities of the Guarantor to the Owner.
|
7.4 |
All moneys received by the Owner pursuant to this Guarantee after the occurrence of a Termination Event which is continuing shall be held by the Owner in trust and applied by the Owner in the following order:
|
|
(a) |
firstly, to pay or retain all costs and expenses of whatever nature incurred by the Owner under the Transaction Documents;
|
|
(b) |
secondly, to be applied in and towards payment of the Guaranteed Obligations (whether the same are due and payable or not); and
|
|
(c) |
fifthly, the surplus (if any) shall be paid to the Guarantor or such other person as may for the time being be entitled thereto.
|
8. |
Subordination
|
|
(a) |
claim, or in a Bankruptcy of the Charterer or any other Security Party prove for, any amount payable to the Guarantor by the Charterer or any other Security Party, whether in respect of this Guarantee or any
other Transaction Document;
|
|
(b) |
take or enforce any Security Interest for any such amount;
|
|
(c) |
claim to set-off any such amount against any amount payable by the Guarantor to the Charterer or any other Security Party; or
|
|
(d) |
claim any subrogation or other right in respect of any Transaction Document or any sum received or recovered by either the Charterer or any other Security Party under a Transaction Document.
|
9. |
Currency Conversion and Currency Indemnity
|
|
(a) |
The Owner may convert any money received or realised by it under or pursuant to this Guarantee which is not in the currency in which the relevant sum is due and payable under each applicable Transaction
Document from that currency into the currency in which such sum is due at the rate of exchange on the relevant date of the conversion.
|
|
(b) |
If, under any applicable law, whether as a result of judgment against the Guarantor or the liquidation of the Guarantor or for any other reason, any payment to be made by the Guarantor under or in connection
with this Guarantee is made or is recovered in a currency other than the currency (the currency of obligation) in which it is payable pursuant to this Guarantee then, to the extent that the payment
(when converted into the currency of obligation at the rate of exchange on the date for the determination of liabilities permitted by the applicable law) falls short of the amount unpaid under this Guarantee,
|
|
(c) |
For the purposes of this Clause 9, rate of exchange means the best rate at which the Owner is able on the relevant date to purchase the currency of obligation with the
other currency.
|
10. |
Suspense Account
|
11. |
Set-off
|
12. |
Guarantor to comply with Charter
|
13. |
Miscellaneous
|
13.1 |
This Guarantee may be executed in any number of counterparts and on separate counterparts, each of which when executed shall constitute an original, but all counterparts shall together constitute one and the
same instrument.
|
13.2 |
Any amendment, supplement or variation to any Transaction Document to which the Guarantor is a party must be in writing and executed by each party thereto.
|
13.3 |
The Guarantor may not terminate this Guarantee by notice to the Owner or otherwise until the Guaranteed Obligations are irrevocably paid to the Owner in full.
|
13.4 |
Neither the failure to exercise, nor the delay in any exercise of, nor the single or partial exercise of, any right, power or remedy by the Owner under or in relation to any Transaction Document to which the
Guarantor is a party shall (a) operate as a waiver of such right, power or remedy, (b) prevent any further or other exercise of such right, power or remedy or (c) prevent the exercise of any other right, power or remedy. The rights,
powers and remedies of the Owner provided in any Transaction
|
13.5 |
Any waiver or consent given by a party under or in relation to any Transaction Document to which the Guarantor is a party must, in order to be effective, be in writing and shall only be effective in the
specific circumstances in which it is given.
|
13.6 |
If at any time any provision of any Transaction Document to which the Guarantor is a party is or becomes illegal, invalid or unenforceable in any respect under the law of any jurisdiction, neither the legality,
validity or enforceability of the remaining provisions of that Transaction Document nor the legality, validity or enforceability of such provision under the law of any other jurisdiction shall in any way be affected or impaired.
|
13.7 |
Any certificate or determination by the Owner as to any rate of interest or as to any other amount payable under and pursuant to any Transaction Document to which the Guarantor is a party shall, in the absence
of manifest error, be conclusive and binding on Guarantor.
|
13.8 |
A person who is not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or enjoy the benefit of any term of this Guarantee.
|
13.9 |
The Guarantor shall pay to the Owner on demand all fees, costs and expenses (including legal, survey and other costs) payable or incurred by the Owner in connection with the enforcement of or preservation of
the Owner's rights under each Transaction Document to which the Guarantor is a party. All amounts payable pursuant to this Clause 13 shall be paid in the currency in which they are incurred to the Owner.
|
14. |
Assignments and Transfers
|
14.1 |
This Guarantee shall be binding upon and inure to the benefit of each Party and its respective successors, permitted assigns and permitted transferees.
|
14.2 |
The Guarantor shall not assign, transfer (whether voluntarily or involuntarily, by operation of law or otherwise) or create or permit to exist any Security Interest over, any of its rights or obligations under
this Guarantee.
|
15. |
Notices
|
15.1 |
Communications in writing
|
15.2 |
Addresses
|
|
(a) |
In the case of the Guarantor:
|
Address:
|
1, Vas. Sofias & Meg.
|
|
Alexandrou Str.
|
||
15124, Maroussi, Athens, Greece
|
||
Attention:
|
Andreas Louka
|
|
Email:
|
louka@loukapartners.com
|
|
Fax:
|
+30 2108128320
|
|
|
(b) |
In the case of the Owner:
|
Address:
|
c/o Oriental Fleet International Company Limited
|
|
50/F, COSCO Tower
|
||
183 Queen's Road Central
|
||
Hong Kong
|
||
Attention:
|
Belinda Hou / Thomas Xing / Xu Ying
|
|
Email:
|
lou.can@coscoshipping.com / thomas.xing@ofi.com.hk /
|
|
asset@coscoshipping.com
|
||
Fax:
|
+852 2339 1881
|
|
15.3 |
Delivery
|
15.3.1 |
Any communication or document made or delivered by a Party to the other Party under or in connection with the Transaction Documents to which the Guarantor is a party will only be effective:
|
|
(a) |
if by way of fax, when received in legible form;
|
|
(b) |
if by way of letter, when it has been left at the relevant address to which it has been posted with postage prepaid in an envelope addressed to the relevant party at that address, and, if a particular
department or officer is specified as part of its address details provided under Clause 15.2 (Addresses), if addressed to that department or officer; or
|
|
(c) |
if by way of email, only when received in a legible form by the email address of the person to whom the communication is made.
|
15.3.2 |
All communications and documents delivered pursuant to or otherwise relating to the Transaction Documents to which the Guarantor is a party shall be either in English or Chinese or accompanied by a certified
English or Chinese translation.
|
15.4 |
Validity of demands
|
|
(a) |
on the date on which the amount to which it relates is due and payable by the Charterer or any other Security Party under an applicable Transaction Document (as the case may be); or
|
|
(b) |
at the same time as the service of a notice under the applicable Transaction Document;
|
16. |
Governing Law and Jurisdiction
|
16.1 |
This Guarantee and any non-contractual obligations arising out of or in connection with it are governed by and shall be construed in accordance with English law and any Dispute arising out of or in connection
with this Guarantee shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory re-enactment or modification thereof save to the extent necessary to give effect to the provisions of this Clause.
|
16.2 |
The arbitration reference shall be to three arbitrators:
|
|
(a) |
A Party wishing to refer a Dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other Party requiring the other Party to appoint its own arbitrator within
fourteen (14) calendar days of that notice, and stating it will appoint its arbitrator as sole arbitrator unless the other Party appoints its own arbitrator and gives notice that it has done so within the fourteen (14) days specified.
|
|
(b) |
If the other Party does not appoint its own arbitrator and gives notice that it has done so within the fourteen (14) days specified, the Party referring a Dispute to arbitration may, without the requirement of
any further prior notice to the other Party, appoint its arbitrator as sole arbitrator and shall advise the other Party accordingly. The award of a sole arbitrator shall be binding on both Parties as if he/she had been appointed by
agreement.
|
|
(c) |
Where each Party appoints its own arbitrator, then the two (2) arbitrators so appointed may proceed with the arbitration and at any time thereafter appoint a third arbitrator so long as they do so before any
substantive hearing or forthwith in the event that they cannot agree on any matter relating to the arbitration. If the said two arbitrators do not appoint a third within fourteen (14) days of one calling upon the other to do so, or if
they are in disagreement as to the third arbitrator, either arbitrator or a Party shall apply to the London Maritime Arbitrators Association (LMAA) for the appointment of the third arbitrator.
|
|
(d) |
The language used in the arbitration shall be English. The arbitration shall be conducted in accordance with the LMAA Terms current at the time when the arbitration proceedings are commenced.
|
|
(e) |
Nothing herein shall prevent the Parties agreeing in writing to vary these provisions to provide for the appointment of a sole arbitrator.
|
16.3 |
In this Clause 16, proceedings means proceedings of any kind, including an application for a provisional or protective measure and a Dispute
means any dispute arising out of or in connection with this Guarantee (including a dispute relating to the
|
16.4 |
The Guarantor waives any rights of sovereign immunity which it or any of its properties may enjoy in any jurisdiction and subjects itself to civil and commercial law with respect to its obligations under this
Guarantee.
|
1. |
Status
|
|
(a) |
It is a company duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation.
|
|
(b) |
It has the power to own its assets and carry on its business as it is being conducted.
|
|
(c) |
It has read and understood the terms of this Guarantee, the Charter and the other Transaction Documents to which the Charterer or any other Security Party is a party and has taken appropriate legal advice as to
the extent of its obligations and liabilities under the Transaction Documents to which the Guarantor is a party.
|
|
(d) |
The Charterer is a wholly-owned Subsidiary of the Guarantor, which is ultimately controlled by the Substantial Shareholder.
|
|
(e) |
It is a publicly listed entity on the NASDAQ stock exchange under the symbol "TOPS".
|
2. |
Compliance with anti-money laundering legislation
|
3. |
Binding obligations
|
|
(a) |
The obligations expressed to be assumed by it in the Transaction Documents to which it is a party are, subject to the Legal Reservations, legal, valid, binding and enforceable obligations.
|
|
(b) |
Without limiting the generality of paragraph (a) above, subject to the Security Perfection Requirements, each Security Document to which it is a party creates the Security Interests which it purports to create
and such Security Interests are valid and effective.
|
4. |
Non-conflict with other obligations
|
|
(a) |
any law or regulation applicable to it;
|
|
(b) |
its constitutional documents; or
|
|
(c) |
any agreement or instrument binding upon it or any of its assets,
|
5. |
Power and authority
|
6. |
Validity and admissibility in evidence
|
|
(a) |
to enable it lawfully to enter into, exercise its rights and comply with its obligations in the Transaction Documents to which it is a party;
|
|
(b) |
to make the Transaction Documents to which it is a party admissible in evidence in its Relevant Jurisdictions;
|
|
(c) |
for it to carry on its business, and which are material; and
|
|
(d) |
to enable it to create the Security Interest to be created by it under any Security Document to which it is a party and to ensure that such Security Interest has the priority and ranking it is expressed to
have,
|
7. |
Governing law and enforcement
|
|
(a) |
the choice of each relevant law as the governing law of the Transaction Documents to which it is a party to and the agreement by such party to refer disputes to the relevant courts or tribunal as stated in such
Transaction Document will be recognised and enforced in its Relevant Jurisdictions; and
|
|
(b) |
any arbitral award, ruling or judgment obtained in each Relevant Jurisdiction in relation to the Transaction Documents to which it is a party will be recognised and enforced in its Relevant Jurisdictions.
|
8. |
Deduction of Tax
|
9. |
Financial statements
|
|
(a) |
Its financial statements most recently supplied to the Owner (which, at the date of this Guarantee, are its Original Financial Statements) were prepared in accordance with GAAP consistently applied save to the
extent expressly disclosed in such financial statements.
|
|
(b) |
Its financial statements most recently supplied to the Owner (which, at the date of this Guarantee, are its Original Financial Statements) give a true and fair view of (if audited) or fairly represent (if
unaudited) its consolidated financial condition and operations for the period to which they relate, save to the extent expressly disclosed in such financial statements.
|
|
(c) |
There has been no material adverse change in its business or consolidated financial condition since the date of its Original Financial Statements.
|
10. |
No filing or stamp taxes
|
11. |
No default
|
|
(a) |
No Termination Event has occurred and is continuing or might reasonably be expected to result from the entry into or performance of, or the transactions contemplated by, any Transaction Document to which it is
a party.
|
|
(b) |
No other event or circumstance has occurred and is continuing which (with the expiry of a grace period, the giving of notice or any combination of the foregoing) constitutes a default under any deed or
instrument which is binding on the Guarantor, or to which its assets are subject, which might have a Material Adverse Effect on the Guarantor's ability to perform its obligations under any Transaction Document to which it is a party.
|
12. |
No breach of laws
|
13. |
No misleading information
|
|
(a) |
All information provided by it or on its behalf in relation to the negotiation and preparation of any Transaction Document to which it is a party was true, complete and accurate in all material respects as at
the date it was provided or as at the date (if any) at which it is stated and was not misleading in any respect.
|
|
(b) |
All financial projections provided by it or on its behalf have been prepared on the basis of recent historical information and on the basis of reasonable assumptions.
|
|
(c) |
Nothing has occurred or been omitted from the information so provided and no information has been given or withheld that results in the information provided by it or on its behalf being untrue or misleading in
any material respect.
|
14. |
Pari passu ranking
|
15. |
No proceedings
|
|
(a) |
No litigation, arbitration or administrative proceedings of or before any court, arbitral body or agency (which, if adversely determined, would have a Material Adverse Effect on the Guarantor) have been started
or (to the best of its knowledge and belief) threatened against it.
|
|
(b) |
No judgment or order of a court, arbitral body or agency which might reasonably be expected to have a Material Adverse Effect has been made against it.
|
16. |
No immunity
|
17. |
Taxation
|
|
(a) |
It has complied in all material respects with all tax laws and regulations applicable to it and its business.
|
|
(b) |
It is not materially overdue in the filing of any tax returns and is not overdue in the payment of any amount in respect of tax.
|
|
(c) |
No claims or investigations are being made or conducted against it with respect to taxes.
|
|
(d) |
It is resident for tax purposes only in its jurisdiction of incorporation except (i) the taxes that are being contested in good faith by appropriate proceedings and for which the Guarantor has set aside on its
books adequate reserves and (ii) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect.
|
18. |
Disclosure of material facts
|
19. |
Place of Business and Non-Hong Kong company
|
20. |
Transaction Documents
|
21. |
Sanctions
|
|
(a) |
No Security Party is a Restricted Person.
|
|
(b) |
Each Security Party is in compliance with all Sanctions laws, and none of them have been or are currently being investigated on compliance with Sanctions, they have not received notice or are aware of any
claim, action, suit or proceeding against any of them with respect to Sanctions and they have not taken any action to evade the application of Sanctions.
|
22. |
Authorised signatories
|
1. |
Status
|
|
(a) |
It will maintain its existence as a company duly incorporated and validly existing under the laws of its jurisdiction of incorporation.
|
|
(b) |
It will remain a publicly listed entity on the NASDAQ stock exchange under the symbol "TOPS".
|
2. |
Authorisations and Compliance with applicable law
|
|
(a) |
It shall promptly:
|
|
(i) |
obtain, comply with and do all that is necessary to maintain in full force and effect; and
|
|
(ii) |
supply copies to the Owner of,
|
|
(b) |
It shall comply in all respects with all laws to which it may be subject.
|
|
(c) |
It shall ensure that all the Security Perfection Requirements have been or will be done or obtained (as the case may be) no later than the latest date permitted by applicable law and in any event by such date
as the Owner may specify.
|
3. |
Compliance with obligations
|
4. |
No prejudice to interests
|
5. |
Exercise of rights
|
6. |
Further assurance
|
7. |
Pari passu ranking
|
8. |
Negative pledge
|
|
(a) |
sell, transfer or otherwise dispose of its right, title and interest in and to any collateral which is the subject of security created under any Transaction Document;
|
|
(b) |
create, incur, assume or permit or cause to exist any Security Interest over its right, title and interest in and to any collateral which is the subject of security created under any Transaction Document; or
|
|
(c) |
consent to the taking of any such action described in the preceding two paragraphs by any other person (whether pursuant to the terms of the Transaction Documents or otherwise),
|
9. |
Security Parties
|
|
(a) |
the Charterer and each of the Security Parties maintains its existence as a company duly incorporated and validly existing and, where applicable, in good standing under the laws of its jurisdiction of
incorporation in compliance with all applicable law; and
|
|
(b) |
the Charterer and each of the Security Parties is managed and administered in the manner that is required by the Transaction Documents.
|
10. |
Subordination
|
|
(a) |
Pursuant to paragraph (z)(iii) of Clause 47.1 (General Covenants) of the Charter, the Guarantor acknowledges to and undertakes with the Owner that, at all times
throughout the Charter Period, all shareholder's and intercompany
|
|
(i) |
are and shall be subordinated in all respects to all amounts owing and which may in future become owing by the Charterer under the Charter and the other Transaction Documents;
|
|
(ii) |
shall not be repaid or be subject to any payment of interest (although interest may accrue);
|
|
(iii) |
are and shall remain unsecured by any Security Interest over the whole or any part of the assets of the Charterer; and
|
|
(iv) |
are not and shall not be capable of becoming subject to any right of set-off or counterclaim.
|
|
(b) |
Pursuant to paragraph (aa)(iv) of Clause 47.1 (General Covenants) of the Charter, the Guarantor acknowledges to and undertakes with the Owner that, at all times
throughout the Charter Period, all shareholder's and intercompany advances from time to time made by the Guarantor or any other member of the Group to the Charterer:
|
|
(i) |
shall be non-interest bearing;
|
|
(ii) |
are and shall remain unsecured by any Security Interest over the whole or any part of the assets of the Charterers;
|
|
(iii) |
are not and shall not be capable of becoming subject to any right of set-off or counterclaim; and
|
|
(iv) |
upon occurrence of a Termination Event which is continuing:
|
|
(A) |
shall not be repaid; and
|
|
(B) |
shall be subordinated in all respects to all amounts owing and which may in future become owing by the Charterers under this Charter and the other Transaction Documents.
|
11. |
Financial Statements
|
|
(a) |
as soon as the same become available, but in any event within 120 days after the end of each of its financial years, its audited consolidated financial statements for that financial year; and
|
|
(b) |
as soon as the same become available, but in any event within 75 days after the end of each half of each of its financial years, its unaudited consolidated financial statements for that financial half year.
|
12. |
Compliance Certificate
|
|
(a) |
It shall supply to the Owner, with each set of financial statements delivered pursuant to paragraphs (a) and (b) of Clause 11 (Financial Statements) of this
|
|
(b) |
Each Compliance Certificate delivered pursuant to paragraph (a) above shall be signed by its director or its chief financial officer.
|
13. |
Requirements as to financial statements
|
|
(a) |
Each set of financial statements delivered by it pursuant to Clause 11 (Financial statements) shall be certified by (its director or its chief financial officer) as
giving a true and fair view of (in the case of any such financial statements which are audited) or fairly representing (in the case of any such financial statements which are unaudited) its consolidated financial condition and operations
as at the date of and for the period in relation to which those financial statements were drawn up.
|
|
(b) |
It shall procure that each set of financial statements delivered pursuant to Clause 11 (Financial Statements) of this Schedule is in the English language and prepared
using GAAP, the accounting practices and financial reference periods consistent with those applied in the preparation of its Original Financial Statements unless, in relation to any set of financial statements, it notifies the Owner that
there has been a change in GAAP, the accounting practices or financial reference periods and its auditors deliver to the Owner:
|
|
(i) |
a description of any change necessary for those financial statements to reflect the GAAP, the accounting practices and financial reference periods upon which its Original Financial Statements were prepared; and
|
|
(ii) |
sufficient information, in form and substance as may be reasonably required by the Owner, to enable the Owner to determine whether Clause 14 (Financial Covenants) of
this Schedule has been complied with and make an accurate comparison between the financial position indicated in those financial statements and its Original Financial Statements.
|
14. |
Financial Covenants
|
|
(a) |
The Guarantor undertakes that it shall ensure at all times:
|
|
(i) |
Leverage Ratio shall not at any time exceed 75%; and
|
|
(ii) |
Free Liquidity shall not be less than the aggregate of the following:
|
|
(A) |
US$1,000,000 times number of Fleet Vessels which are Suezmax vessels;
|
|
(B) |
US$750,000 times number of Fleet Vessels which are MR tankers; and
|
|
(C) |
US$500,000 times number of MR tankers are bareboat chartered-in to a member of the Group.
|
|
(b) |
The financial covenants set out in paragraph (a) shall be tested by reference to the financial statements and Compliance Certificates delivered by the Guarantor pursuant to Clause 11 (Financial Statements), Clause 12 (Compliance Certificate) and Clause 13 (Requirements as to financial statements) of this Schedule in
respect of the Relevant Period.
|
|
(c) |
In this Clause:
|
|
(i) |
Cash means, at any time, the aggregate at such time of the amounts categorised as Cash and Cash Equivalent in the Guarantor's consolidated financial statements.
|
|
(ii) |
Cash Equivalent Investments means investments that are short term investments (excluding equity investments) which are readily convertible into cash without incurring
any significant premium or penalty.
|
|
(iii) |
Consolidated Total Debt in respect of the Guarantor means at any time the aggregate amount of all obligations of the Group which would, in accordance with GAAP, be
considered as consolidated total debt of the Group.
|
|
(iv) |
Consolidated Total Net Debt in respect of the Guarantor means at any time Consolidated Total Debt less Cash and Cash Equivalent and Restricted Cash.
|
|
(v) |
Fleet Vessel means, at any time, each vessel registered in the name of a member of the Group as owner.
|
|
(vi) |
Free Liquidity means, at any time, any unrestricted Cash and Cash Equivalent of the Guarantor which is not subject to any security interest adjusted to include any Cash
held under any minimum liquidity requirements and debt service accounts.
|
|
(vii) |
Joint Venture Vessel means any vessel registered in the name of an owner whose shareholding is owned by the Guarantor by 50% or more.
|
|
(viii) |
Leverage Ratio means, the ratio (expressed as a percentage) of:
|
|
(1) |
the Consolidated Total Net Debt; and
|
|
(2) |
the aggregate Market Value of all Fleet Vessels, including 50% of Joint Venture Vessels.
|
|
(ix) |
Market Value means, in relation to a Fleet Vessel and a Joint Venture Vessel, at a relevant date, one (1) valuation obtained by the Charterer (or failing which the
Owner) and prepared:
|
|
(1) |
on a date no earlier than thirty (30) days prior to the relevant date;
|
|
(2) |
by one (1) Approved Valuer;
|
|
(3) |
with or without physical inspection of such Fleet Vessel or Joint Venture Vessel;
|
|
(4) |
on the basis of a sale for prompt delivery for cash on normal arm's length commercial terms as between a willing seller and a willing buyer, free of any existing charter or other contract of employment; and
|
|
(5) |
if a range of valuation is given by the Approved Valuer, the lower end of the range shall apply,
|
|
(x) |
Relevant Period means each period of six (6) months immediately prior to the date of computation.
|
|
(xi) |
Restricted Cash means, at any time, the aggregate at such time of the amounts categorised as Restricted Cash in the Guarantor's consolidated financial statements.
|
15. |
Notification
|
|
(a) |
notify the Owner as soon as it becomes aware of the occurrence of:
|
|
(i) |
any Termination Event; and
|
|
(ii) |
any other matters which might lead to an occurrence of any Termination Event; and
|
|
(b) |
notify the Owner of any steps or action which it is taking, or is considering taking, to remedy or mitigate the effect of such occurrence.
|
16. |
Information: miscellaneous
|
|
(a) |
all documents dispatched by it to its shareholders (or any class of them) or its creditors generally at the same time as they are despatched (other than any document which is required to be filed by the
Guarantor in accordance with the rules of, and has been filed and posted onto any electronic website maintained by, any stock exchange on which shares in or other securities of the Guarantor are listed);
|
|
(b) |
promptly, any announcement, notice or other document relating specifically to the Guarantor posted onto any electronic website maintained by any stock exchange on which shares in or other securities of the
Guarantor are listed or any electronic website required by any such stock exchange to be maintained by or on behalf of the Guarantor;
|
|
(c) |
promptly upon becoming aware of them, details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against it, and which might, if adversely determined, have a
Material Adverse Effect;
|
|
(d) |
promptly upon becoming aware of them, details of any judgment or order of a court, arbitral body or agency which is made against it, and which might have a Material Adverse Effect;
|
|
(e) |
promptly, such information regarding its consolidated financial condition, business and operations as the Owner may reasonably request;
|
|
(f) |
promptly, notice of any change in its authorised signatories signed by its director accompanied by specimen signatures of any new authorised signatories; and
|
|
(g) |
promptly, such information and records regarding the Shares as the Chargee may reasonably request.
|
17. |
Taxes
|
|
(a) |
file or cause to be filed all tax returns required to be filed in all jurisdictions in which it is situated or carries on business or otherwise is subject to taxation; and
|
|
(b) |
pay all taxes shown to be due and payable on such returns or any assessments made against it, except to the extent these are contested in good faith and by appropriate means where such payment may be lawfully
withheld and for which adequate reserves have been established by it taking into account the amount of taxes payable.
|
18. |
No merger
|
19. |
Change of Control
|
|
(a) |
Save with the prior written consent of the Owner, it shall ensure that no Change of Control occurs.
|
|
(b) |
Save with the prior written consent of the Owner, there shall not be any transfer or disposal of:
|
|
(i) |
the legal or beneficial shareholding of the Charterer; or
|
|
(ii) |
the legal or beneficial shareholding of the Guarantor,
|
20. |
Sanctions
|
|
(a) |
It shall comply, and shall procure that each other Security Party complies, with all laws and regulations in respect of Sanctions, and in particular, it shall ensure that the Charterer shall effect and maintain
a sanctions compliance policy to ensure compliance with all such laws and regulations implemented from time to time.
|
|
(b) |
It will ensure that the Vessel shall not be employed, operated or managed in any manner which (i) is contrary to any Sanctions and in particular, the Vessel shall not be used by or for the benefit for any party
which is a target of Sanctions, or trade to any Restricted Country; or (ii) would trigger the operation of any sanctions limitation or exclusion clause in any insurance documentation.
|
|
(c) |
It will, and will procure that each other Security Party will, promptly notify the Owner and provide all information in relation to its business and operations which may be relevant for the purposes of
ascertaining whether it is in compliance with all laws and regulations relating to Sanctions, and in particular, it shall notify the Owner in writing immediately upon being aware that any of its shareholders or directors, officers of
employees is a Restricted Person or has otherwise become a target of Sanctions.
|
From:
|
TOP SHIPS INC.
|
(as Guarantor)
|
|
With copy to:
|
Monte Carlo Seven Shipping Company Limited
|
(as Charterer)
|
|
To:
|
Oriental Fleet TANKER 11 Limited
|
(东方富利 TANKER11 有限公司)
|
|
(as Owner)
|
|
1. |
We refer to the Charter and the Guarantee (as defined in the Charter). This is a Compliance Certificate. Terms defined in the Charter and the Guarantee have the same meaning when used in this Compliance
Certificate unless given a different meaning in this Compliance Certificate.
|
2. |
We confirm to the Owner that as at the date of [the audited consolidated financial statements of the Group in respect of the financial year ended on [•] / the consolidated financial statements of the Group in
respect of the financial period ended on [•]]:
|
|
(a) |
we are in compliance with the covenants and undertakings in Clause 14 (Financial Covenants) of Schedule 2 to of the Guarantee;
|
|
(b) |
Consolidated Total Net Debt is [.] and Market Value of the Fleet Vessels including 50% of Joint Venture Vessels is [●] and therefore Leverage Ratio is [●] and
does not exceed 75%;
|
|
(c) |
Free Liquidity is US$[●], which is not less than US$[●], being the aggregate of the following:
|
|
(i) |
US$[●], which is calculated by US$1,000,000 times the number of Fleet Vessels which are Suezmax vessels, being [●];
|
|
(ii) |
US$[●], which is calculated by US$750,000 times the number of Fleet Vessels which are MR tankers, being [●]; and
|
|
(iii) |
US$[●], which is calculated by US$500,000 times the number of MR tankers are bareboat chartered-in to a member of the Group, being [●].
|
3. |
We set out below calculations establishing the figures in paragraph 2: [●].
|
4. |
We also confirm that no Termination Event is continuing which has not been waived as at the date of this Compliance Certificate.
|
SIGNED as a deed by
|
)
|
, Attorney for
|
)
|
TOP SHIPS INC.
|
)
|
under a power of attorney
|
)
|
dated 2019
|
)
|
in the presence of:
|
)
|
SIGNED for and on behalf of
|
)
|
)
|
|
ORIENTAL FLEET TANKER 11 LIMITED
|
)
|
(东方富利 TANKER11 有限公司)
|
)
|
)
|
|
by Li Bing, Director
|
)
|
)
|
|
in the presence of:
|
)
|
Page
|
||
32.
|
Definitions
|
1
|
33.
|
Interpretations
|
13
|
34.
|
Background
|
15
|
35.
|
Newbuilding construction
|
15
|
36.
|
Delivery
|
16
|
37.
|
Disputes under the shipbuilding contract
|
17
|
38.
|
Terms of delivery
|
19
|
39.
|
Cancellation
|
20
|
40.
|
Conditions precedent
|
21
|
41.
|
Bunkers and luboils
|
23
|
42.
|
Further maintenance and operation
|
24
|
43.
|
Structural changes and alterations
|
24
|
44.
|
Hire
|
25
|
45.
|
Insurance
|
28
|
46.
|
Redelivery
|
31
|
47.
|
Redelivery conditions
|
32
|
48.
|
Owners’ mortgage
|
33
|
49.
|
Diver’s inspection at redelivery
|
34
|
50.
|
Transport documents
|
34
|
51.
|
Charterers’ representations and warranties
|
34
|
52.
|
Charterers’ undertakings
|
38
|
53.
|
Earnings Account
|
43
|
54.
|
Termination Events
|
43
|
55.
|
[Not Used]
|
48
|
56.
|
Name of Vessel
|
48
|
57.
|
Charter Period
|
49
|
58.
|
Transaction fees
|
49
|
59.
|
Early Termination, Purchase Option, Purchase Obligation and transfer of title, partial prepayment
|
49
|
60.
|
Pre-delivery Sales Clause
|
51
|
61.
|
Total Loss
|
51
|
62.
|
Additional payment obligations
|
52
|
63.
|
Stamp duties and taxes
|
52
|
64.
|
Operational notifiable events
|
52
|
65.
|
Further indemnities
|
53
|
66.
|
Set-off
|
54
|
67.
|
Further assurances and undertakings
|
55
|
68.
|
Cumulative rights
|
55
|
69.
|
Day count convention
|
55
|
70.
|
No waiver
|
55
|
71.
|
Entire agreement
|
55
|
72.
|
Invalidity
|
55
|
73.
|
English language
|
55
|
74.
|
No partnership
|
56
|
75.
|
Notices
|
56
|
76.
|
Conflicts
|
56
|
77.
|
Survival of Charterers’ obligations
|
57
|
78.
|
Counterparts
|
57
|
79.
|
Confidentiality
|
57
|
80.
|
Third Parties Act
|
57
|
81.
|
Law and jurisdiction
|
57
|
82.
|
Conditions subsequent
|
58
|
83.
|
FATCA
|
59
|
SCHEDULE 1 FORM OF PROTOCOL OF DELIVERY AND ACCEPTANCE
|
61
|
SCHEDULE 2 FORM OF TITLE TRANSFER PROTOCOL OF DELIVERY AND ACCEPTANCE
|
62
|
SCHEDULE 3 HIRE PAYMENT SCHEDULE
|
63
|
SCHEDULE 4 SCHEDULE OF PURCHASE OPTION PRICE (EXCLUDING HIRE DUE)
|
68
|
SIGNATURE PAGE
|
69
|
32. |
Definitions
|
|
(a) |
by means of the holding of shares, or the possession of voting powers in or in relation to the Charterers and the Charter Guarantor; or
|
|
(b) |
as a result of any powers conferred by the articles of association or any other document regulating the Charterers and the Charter Guarantor.
|
|
(a) |
a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in order for the
transactions contemplated by the Transaction Documents to be carried out which disruption is not caused by, and is beyond the control of, any of the Parties; or
|
|
(b) |
the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party preventing that, or any other
Party:
|
|
(i) |
from performing its payment obligations under the Transaction Documents; or
|
|
(ii) |
from communicating with other Parties in accordance with the terms of the Transaction Documents,
|
|
(a) |
any release, emission, spill or discharge from the Vessel or into or upon the air, sea, land or soils (including the seabed) or surface water of Environmentally Sensitive Material within or
from the Vessel; or
|
|
(b) |
any incident in which Environmentally Sensitive Material is released, emitted, spilled or discharged into or upon the air, sea, land or soils (including the seabed) or surface water from a
vessel other than the Vessel and which involves a collision between the Vessel and such other vessel or some other incident of navigation or operation, in either case, in connection with which the Vessel is actually or potentially liable
to be arrested, attached, detained or injuncted and/or the Vessel and/or any Obligor and/or any operator or manager of the Vessel is at fault or allegedly at fault or otherwise liable to any legal or administrative action; or
|
|
(c) |
any other incident in which Environmentally Sensitive Material is released, emitted, spilled or discharged into or upon the air, sea, land or soils (including the seabed) or surface water
otherwise than from the Vessel and in connection with which the Vessel is actually or potentially liable to be arrested and/or where any Obligor and/or any operator or manager of the Vessel is at fault or allegedly at fault or otherwise
liable to any legal or administrative action, other than in accordance with an Environmental Approval.
|
|
(a) |
moneys borrowed;
|
|
(b) |
any acceptance credit;
|
|
(c) |
any bond, note, debenture, loan stock or similar instrument;
|
|
(d) |
any finance, capital lease or operating leases for financing purposes;
|
|
(e) |
receivables sold or discounted (other than on a non-recourse basis);
|
|
(f) |
deferred payments for assets or services;
|
|
(g) |
any derivative transaction protecting against or benefiting from fluctuations in any rate or price (and, when calculating the value of any derivative transaction, only the marked to market
value shall be taken into account);
|
|
(h) |
any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing according to the relevant account principles;
|
|
(i) |
any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; and
|
|
(j) |
the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in (a) to (i).
|
|
(a) |
the first Hire Payment Date shall fall on the Actual Delivery Date; and
|
|
(b) |
the second Hire Payment Date shall fall on the date which is the 10th day of the next calendar month (or if
such date is not a Business Day, the immediately following Business Day) after the calendar month during which the Actual Delivery Date falls.
|
|
(a) |
the applicable Screen Rate for the longest period (for which that Screen Rate is available) which is less than that relevant period; and
|
|
(b) |
the applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds that relevant period,
|
|
(a) |
the business or financial condition of the Charter Group taken as a whole;
|
|
(b) |
the ability of the Charterers to perform and comply with their payment obligations under any Transaction Document or Project Document to which they are a party;
|
|
(c) |
the validity, legality or enforceability of this Charter, any other Transaction Document or any Project Document; or
|
|
(a) |
lawfully enter into and perform its obligations under the Transaction Documents and the Project Documents to which it is party;
|
|
(b) |
ensure the legality, validity, enforceability or admissibility in evidence in England and, if different, its jurisdiction of incorporation, of such Transaction Documents and Project
Documents to which it is party; and
|
|
(c) |
carry on its business from time to time.
|
|
(a) |
the Charterers has, at the date of this Charter or at any later time or times, to the Owners under or in connection with the Transaction Documents or any judgment relating to the
Transaction Documents; and
|
|
(b) |
the Collateral Charterer has, at the date of this Charter or at any later time or times, to the Collateral Owner under or in connection with the Transaction Documents (as defined under the
Collateral Charter) or any judgment relating to the Transaction Documents (as defined under the Collateral Charter), and for this purpose, there shall be disregarded any total or partial discharge of these liabilities, or variation of
their terms, which is effected by, or in connection with, any bankruptcy, liquidation, arrangement or other procedure under the insolvency laws of any country.
|
|
(a) |
any Security Interest created or to be created in accordance with the Security Documents;
|
|
(b) |
liens for unpaid master’s and crew’s wages in accordance with first class ship ownership and management practice;
|
|
(c) |
liens for salvage;
|
|
(d) |
liens for master’s disbursements incurred in the ordinary course of trading;
|
|
(e) |
any other lien arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of the Vessel and not as a result of any default or omission by the
Charterers, provided such liens do not secure amounts more than 21 days overdue (unless the overdue amount is being contested in good faith by appropriate steps);
|
|
(f) |
any Security Interest arising by operation of law in respect of Taxes which are not overdue for payment or which are being contested in good faith by appropriate steps and in respect of
which appropriate reserves have been made;
|
|
(g) |
any liens securing obligations incurred in the ordinary course of trading and/or operating the Vessel and not more than 21 days overdue; and
|
|
(h) |
any Security Interest which has the prior written approval of the Owners.
|
|
(a) |
the Paid Instalments together with any other sums the Owners have paid to or owe to the Builder due to the early termination of this Charter, or the repudiation or termination of the
Shipbuilding Contract, or for other reasons caused by the Charterers, together with interest accrued thereon pursuant to Clause 44 (i) up to the date of receipt by the Owners of the Pre-delivery Termination Sum;
|
|
(b) |
any and all evidenced and documented direct costs, losses, liabilities and expenses incurred or suffered by the Owners as a result of the early termination of this Charter prior to the
Delivery Date;
|
|
(c) |
any properly documented Break Costs incurred (or payable) by the Owners under the Financing Documents, with the exclusion of any SWAP related costs; and
|
|
(d) |
any sums other than Fixed Hire, due and payable, but unpaid, under this Charter (including for the avoidance of doubt Pre-Delivery Interest) together with interest accrued thereon pursuant
to Clause 44 (i) up to the date of receipt by the Owners of the Pre- delivery Termination Sum.
|
|
(a) |
the estimated amount corresponding to the Hire Payment Date in the “Purchase Option Price” column as referenced in Schedule 4 (Schedule of Purchase Option
Price) to this Charter, but such amount to be adjusted, revised, updated and replaced from time to time in accordance with the terms of this Charter and confirmed by the Owners (and agreed to by the Charterers) by reference to,
among others, the figure to be provided
|
|
(b) |
all Unpaid Sums due and payable together with interest accrued thereon pursuant to paragraph (j) of Clause 44 (Hire) from the due date for payment
thereof up to the date of actual payment,
|
|
(a) |
(other than where paragraph (b) below applies) as the rate at which the relevant Reference Bank could borrow funds in the London interbank market in US Dollars for the relevant period, were
it to do so by asking for and then accepting interbank offers for deposits in reasonable market size in that currency and for that period; or
|
|
(b) |
if different, as the rate (if any and applied to the relevant Reference Bank and the relevant period) which contributors to the Screen Rate are asked to submit to the relevant
administrator.
|
|
(a) |
the Charter Guarantee;
|
|
(b) |
the Charterers’ Assignment;
|
|
(c) |
the Managers’ Undertaking;
|
|
(d) |
the Account Charge;
|
|
(e) |
the Shares Pledge;
|
|
(f) |
the Refund Guarantee Assignment; and
|
|
(g) |
any other document that may at any time be executed by any person creating, evidencing or perfecting any Security Interest to secure all or part of the Obligors’ obligations under or in
connection with the Transaction Documents,
|
|
(a) |
the date which falls 180 days after the date of occurrence of the Total Loss or, if such date is not a Business Day, the immediately preceding Business Day; and
|
|
(b) |
the date on which the Owners receive the Total Loss Proceeds in respect of the Total Loss.
|
|
(a) |
in connection with determining the Screen Rate, 11:00 a.m. (London time) on the Quotation Day; or
|
|
(b) |
in connection with determining the Reference Bank Rate, noon (London time) on the Quotation Day.
|
|
(a) |
in respect of a termination of this Charter in accordance with paragraph (l) of Clause 44 (Hire), the date specified in the Termination Notice
served on the Charterers pursuant to that Clause having regard to the various remedy periods;
|
|
(b) |
in respect of a Default Termination, the date specified in the Termination Notice served on the Charterers pursuant to paragraph 54.3 of Clause 54 (Termination
Events) in respect of such Default Termination;
|
|
(c) |
in respect of a Total Loss Termination, the Settlement Date in respect of the Total Loss which gives rise to such Total Loss Termination.
|
|
(a) |
all Fixed Hire due and payable but unpaid under this Charter up to and including the Termination Payment Date (if the Termination Payment Date is not a Hire Payment Date, the Fixed Hire
payable shall be reduced pro-rata for the days between preceding Hire Payment Date and the Termination Payment Date;
|
|
(b) |
the amount of Cost Balance as at the relevant Termination Payment Date;
|
|
(c) |
all liabilities, costs and expenses (including, without limitation, legal fees) so incurred directly in relation to repossessing the vessel;
|
|
(d) |
any costs and expenses, relating to Owner’s finance, incurred or suffered by the Owners as a direct result of the Termination Notice.
|
|
(e) |
any and all Break Costs (excluding swap related expenses); and
|
|
(f) |
any sums (other than hire) unpaid under this Charter and if such sums due and payable but unpaid then together with interest accrued thereon up to and including the Termination Payment
Date.
|
|
(a) |
actual or constructive or compromised or agreed or arranged total loss of the Vessel;
|
|
(b) |
the requisition for title or compulsory acquisition of the Vessel by any government or other competent authority (other than by way of requisition for hire);
|
|
(c) |
the capture, seizure, arrest, detention, hijacking, theft, condemnation as prize, confiscation or forfeiture of the Vessel (not falling within paragraph (b) of this definition), unless the
Vessel is released and returned to the possession of the Owners or the Charterers within ninety (90) days after the capture, seizure, arrest, detention, hijacking, theft, condemnation as prize, confiscation or forfeiture in question,
|
|
(a) |
an Obligor which is resident for tax purposes in the United States of America; or
|
|
(b) |
an Obligor some or all of whose payments under the Transaction Documents to which it is a party are from sources within the United States for US federal income tax purposes.
|
33. |
INTERPRETATIONS
|
|
(a) |
In this Charter, unless the context otherwise requires, any reference to:
|
|
(i) |
this Charter include the Schedules hereto and references to Clauses and Schedules are, unless otherwise specified, references to Clauses of and Schedules to this Charter and, in the case of
a Schedule, to such Schedule as incorporated in this Charter as substituted from time to time;
|
|
(ii) |
any statutory or other legislative provision shall be construed as including any statutory or legislative modification or re-enactment thereof, or any substitution therefor;
|
|
(iii) |
the term “Vessel” includes any part of the Vessel;
|
|
(iv) |
the “Owners”, the “Charterers”, any “Obligor”, “Sub-charterer” or any other person include any of their respective successors, permitted assignees and permitted transferees;
|
|
(v) |
any agreement, instrument or document include such agreement, instrument or document as the same may from time to time be amended, modified, supplemented, novated or substituted;
|
|
(vi) |
the “equivalent” in one currency (the “first currency”) as at any date of an amount in another currency (the
“second currency”) shall be construed as a reference to the amount of the first currency which could be purchased with such amount of the second currency at the spot rate of exchange quoted by the
People’s Bank of China at or about 11:00 a.m. two (2) Business Days (being a day other than a Saturday or Sunday on which banks and foreign exchange markets are generally open for business in Beijing) prior to such date for the purpose of
the first currency with the second currency for delivery and value on such date;
|
|
(vii) |
“hereof”, “herein” and “hereunder” and other words of similar import
means this Charter as a whole (including the Schedules) and not any particular part hereof;
|
|
(viii) |
“law” includes common or customary law and any constitution, decree, judgment, legislation, order, ordinance, regulation, rule, statute, treaty or
other legislative measure in any jurisdiction or any present or future directive, regulation, request or requirement, or official or judicial interpretation of any of the foregoing, in each case having the force of law and, if not having
the force of law, in respect of which compliance is generally customary;
|
|
(ix) |
the word “person” or “persons” or to words importing persons include, without limitation, any state,
divisions of a state, government, individuals, partnerships, corporations, ventures, government agencies, committees, departments, authorities and other bodies, corporate or unincorporated, whether having distinct legal personality or
not;
|
|
(x) |
the “winding-up”, “dissolution”, “administration”, “liquidation”, “insolvency”, “reorganisation”, “readjustment of debt”, “suspension of payments”, “moratorium” or “bankruptcy” (and their
derivatives and cognate expressions) of any person shall each be construed so as to include the others and any equivalent or analogous proceedings or event under the laws of any jurisdiction in which such person is incorporated or any
jurisdiction in which such person carries on business;
|
|
(xi) |
“protection and indemnity risks” means the usual risks covered by a protection and indemnity association which is a member of the International Group
of P&I Club, including pollution risks, extended passenger cover and the proportion (if any) of any sums payable to any other person or persons in case of collision which are not recoverable under the hull and machinery policies by
reason of the incorporation in them of clause 6 of the International Hull Clauses (1/11/02 or 1/11/03), clause 8 of the Institute Time Clauses (Hull)(1/10/83) or clause 8 of the Institute Time Clauses (Hulls)(1/11/1995) or the Institute
Amended Running Down Clause (1/10/71) or any equivalent provision;
|
|
(xii) |
a Potential Termination Event or Termination Event which is “continuing” is a reference to a Potential Termination Event or Termination Event which is not remedied or waived; and
|
|
(xiii) |
words denoting the plural number include the singular and vice versa.
|
|
(b) |
Headings are for the purpose of reference only, have no legal or other significance, and shall be ignored in the interpretation of this Charter.
|
|
(c) |
A time of day (unless otherwise specified) is a reference to Beijing time.
|
34. |
BACKGROUND
|
|
(a) |
By a novation agreement (the “Novation Agreement”) of even date herewith made between the Original Buyer, the Owners and the Charterers, the Owners
have agreed to purchase the Vessel subject to the terms and conditions therein.
|
|
(b) |
Accordingly the parties hereby agree that the Owners’ obligation to charter the Vessel to the Charterers under this Charter is subject to the effective transfer of ownership of the Vessel
to the Owners pursuant to the Novation Agreement.
|
35. |
NEWBUILDING CONSTRUCTION
|
|
(a) |
The Vessel shall be constructed in accordance with the Shipbuilding Contract and in accordance with the Specifications (as defined in the Shipbuilding Contract) annexed thereto. Once the
Novated Rights and Obligations (as defined in the Novation Agreement) have been novated to the Owners, the Owners and Charterers shall be deemed to have accepted and agreed to the Shipbuilding Contract and the Specifications in all
respects on the understanding that the Vessel is to be built solely for the use of the Charterers.
|
|
(b) |
In addition to the Buyer’s Supplies, the Charterers or the Charter Guarantor shall, at its sole cost, expense and risk, supply bunkers, fuel, lubricating oil, hydraulic oil and greases for
the purpose of trial runs under and in accordance with the Shipbuilding Contract.
|
|
(c) |
Subject to the terms of the Novation Agreement, the Charterers or its appointed supervisor approved by the Owners (at the Charter Guarantor’s/Charterers’ cost and expense) shall continue to
exercise the Other Rights and Obligations (as ‘Buyer’ and as defined in the Novation Agreement) under the Shipbuilding Contract relating to, inter alia:
|
|
(i) |
Approval of Plans and Drawings;
|
|
(ii) |
Changes and modifications on the Vessel;
|
|
(iii) |
Supervision of the Vessel; and
|
|
(iv) |
Attending all tests and sea trials.
|
35.2 |
The Vessel shall be constructed in accordance with the Shipbuilding Contract, under the supervision of the Charterers (or its appointed supervisor). Subject to the provisions of clause
3.6(a)(ii) of the Novation Agreement, the Charterers have the right to make changes and modifications to the Vessel in accordance with the Shipbuilding Contract and the Charterers
|
35.3 |
If, on the Delivery Date, there are any amounts due from the Charterers to the Builder under the terms of the Shipbuilding Contact and/or the Novation Agreement (including but not limited
to any amounts payable by the Charterers under clause 3.7 of the Novation Agreement and any amounts due for any bunkers, lubes or other costs and expenses incurred as a result of any extras, additions or alteration of the Vessel), then
the Charterers shall pay such sums (as evidenced by a commercial invoice from the Builder) to the Builder on or before the Delivery Date (the “Extra SBC Costs”). If any liquidated damages for
reasons other than delay are payable by the Builder under the Shipbuilding Contract, these liquidated damages shall be deducted from the Delivery Instalment payable by the Owners (any such deduction shall consequently reduce the Contract
Price and the Cost Balance). If any liquidated damages for delay are payable by the Builder under the Shipbuilding Contract, then the Charterers may apply these towards payment of the Extra SBC Costs and any other reasonable, documented
and directly incurred expenses as a result of a delay in delivery (including any extra supervision costs incurred in accordance with the applicable supervision contract). Any excess liquidated damages for delay after such prior
application by the Charterers shall be used to reduce the Delivery Instalment payable by the Owners as part of the Contract Price (any such deduction shall consequently reduce the Contract Price, the Fixed Hire and Cost Balance
accordingly).
|
36. |
DELIVERY
|
36.1 |
The Vessel is scheduled to be delivered according to the terms of the Shipbuilding Contract. In case the delivery date under the Shipbuilding Contract is extended or postponed or delayed
pursuant to the Shipbuilding Contract then subject to the terms of this Charter, the delivery date under the Charter shall be automatically and accordingly extended or postponed subject to it not being after the Cancellation Date.
|
36.2 |
Notwithstanding the foregoing, the obligation of the Owners to charter the Vessel to the Charterers hereunder is conditional upon:
|
|
(a) |
the delivery of the Vessel to the Owners by the Builder and acceptance of the Vessel by the Owners pursuant to the Shipbuilding Contract; and
|
|
(b) |
the satisfaction of the conditions precedent set out in Clause 40 below.
|
36.3 |
Subject to the Vessel being delivered to, and taken over by, the Owners pursuant to the Shipbuilding Contract and the satisfaction or waiver by the Owners of the conditions precedent set
out in Clause 40, then the Charterers shall be deemed to have accepted and taken delivery of the Vessel (without reservation) under this Charter simultaneously with delivery by the Builder to the Owners pursuant to the Shipbuilding
Contract whether or not the Charterers takes actual physical possession and/or use of the Vessel on the Delivery Date.
|
36.4 |
Subject to Clauses 36.2 and 36.3, the actual date of delivery for the purpose of this Charter shall be the date when the Vessel is delivered by the Builder to the Owners as indicated by the
protocol of delivery and acceptance signed and timed by the Owners and the Builder pursuant to the Shipbuilding Contract (the “Delivery Date”) and shall be deemed to be the commencement date for the purposes of this Charter whether or not
the Charterers takes actual physical possession and/or use of the Vessel on the Delivery Date.
|
36.5 |
Without prejudice to the provisions of Clause 36.4 above, the Owners and the Charterers shall on the Delivery Date sign a protocol of delivery and acceptance in the form attached hereto as
Schedule 1.
|
37. |
DISPUTES UNDER THE SHIPBUILDING CONTRACT
|
37.1 |
Dispute under Shipbuilding Contract
|
|
(a) |
If there is a dispute under the Shipbuilding Contract, then, unless the Owners have served a Renovation Notice (and without prejudice to (i) any rights Owners may have to serve such a
Renovation Notice at any time including pursuant to paragraph (c) below and (ii) the Owners’ rights under Clause 54, the Owners shall enter into immediate consultation with the Charterers and/or the Builder in order to seek to resolve the
dispute in an amicable way and the aggregate period of such consultation shall be no more than ten (10) Banking Days (unless otherwise agreed by the Parties). The Owners shall not serve a termination notice under the Shipbuilding Contract
without prior consultation with the Charterers.
|
|
(b) |
In the event that the dispute cannot be resolved during above consultation period and arbitration proceedings have been initiated by any party under the Shipbuilding Contract in respect of
such dispute, then the arbitration proceedings shall, subject to paragraph (c) below, be handled in accordance with paragraphs (d) to (h) below.
|
|
(c) |
Without prejudice to the terms of the Novation Agreement and notwithstanding the fact that arbitration proceedings in accordance with paragraphs (d) to (h) below may have commenced, the
Owners shall also have the option to serve a Renovation Notice under the Novation Agreement in the event any (or any combination of) the following circumstances arise prior to the Delivery Date:
|
|
(i) |
the Refund Guarantee is terminated or otherwise ceases to be in full force and effect for any reason; or
|
|
(ii) |
the Vessel has not been delivered by the Builder prior to the Cancellation Date.
|
|
(d) |
If:
|
|
(i) |
the Charterers and/or Charter Guarantor propose to the Owners to terminate the Shipbuilding Contract or reject the Vessel while the Builder disputes the right of the Charter Guarantor,
Charterers and/or the Owners to terminate the Shipbuilding Contract or reject the Vessel; or
|
|
(ii) |
the Builder terminates or purports to terminate the Shipbuilding Contract while the Owners and/or the Charterers and/or the Charter Guarantor disputes such cancellation; or
|
|
(iii) |
the Builder tenders for delivery of the Vessel while the Owners and/or the Charterers and/or Charter Guarantor disputes such tender for delivery the Charter Guarantor shall, at the Charter
Guarantor’s cost and risk (and on behalf of the Owners if a Renovation Notice has not been served and otherwise also on behalf of the Charterers),
|
|
(e) |
Should the cancellation of the Shipbuilding Contract or rejection of the Vessel by the Owners based on Charterers’ proposal or instruction be proven wrongful or the Builder’s cancellation
or tender for delivery be proven justified, in whole or in part, by final award and/or settlement agreement (any settlement agreement shall be approved by the Charterers and the Owners (each acting reasonably) and any such approved
settlement agreement and/or final award shall be binding upon the Charterers), the Charterers and Charter Guarantor shall indemnify and keep the Owners indemnified against all the liability and compensation that the Owners are ordered to
assume/pay to the Builder together with all documented losses, costs, expenses, interests, orders or other sanctions suffered or incurred by the Owners arising directly in any manner out of such wrongful cancellation or rejection of the
Vessel by the Owners or justified cancellation or tender for delivery by the Builder.
|
|
(f) |
Should the cancellation of Shipbuilding Contract or rejection of the Vessel by the Charterers and/or Charter Guarantor and/or Owners based on Charterers’ proposal or instruction be proven
justified or Builder’s cancellation or tender for delivery be proven wrongful, in whole or in part, by final award and/or settlement agreement (any settlement agreement shall be approved by the Charterers and the Owners (each acting
reasonably) and any such approved settlement agreement and/or final award shall be binding upon the Charterers), after receipt of the amount from the Builder and/or Refund Guarantor as ordered by the final award and/or settlement
agreement, such amounts shall be applied in accordance with Clause 37.2.
|
|
(g) |
Should any settlement agreement (any settlement agreement shall be approved by the Charterers and the Owners (each acting reasonably)) be reached with the Builder during the arbitration or
enforcement proceeding, in respect of any and all amounts and liabilities payable by the Builder under the settlement agreement, the Owners shall and the Charterers and Charter Guarantor shall apply such amounts in accordance with Clause
37.2.
|
|
(h) |
Any refunds received by the Charter Guarantor or Charterers from the Builder and/or the Refund Guarantor under the Shipbuilding Contract and the Refund Guarantee shall be applied (and the
Charter Guarantor shall procure they are applied) in accordance with Clause 37.2 unless a Step-in Notice under clause 3.4(b) of the Novation Agreement has been served by the Owners.
|
37.2 |
Payment Regime
|
|
(a) |
firstly towards payment to the Owners in full of the Pre-delivery Termination Sum, which shall (if already not then payable) be deemed at the time of such receipt to be immediately payable
by the Charterers to the Owners;
|
|
(b) |
secondly in the event that the Owners receive an amount in excess of the Pre-delivery Termination Sum, towards any amounts then outstanding under any Collateral Charter; and
|
|
(c) |
thirdly any further excess shall be paid over to the Charterers (for the Charterers’ account or the account of the Charter Guarantor at the Charterers’ option).
|
37.3 |
Charterers’ rejection under clause 3.6 (a)(v) of the Novation Agreement
|
37.4 |
Owners’ pre-delivery default
|
|
(a) |
After the Effective Time under the Novation Agreement has occurred, if the Owners fail to pay any instalment to the Builder pursuant to the Shipbuilding Contract and the same failure has
not been remedied by the Owners by the date which falls three (3) Banking Days prior to the date upon which the Builder may terminate the Shipbuilding Contract for non-payment, then the Charterers shall be entitled to terminate this
Charter upon written notice to the Owners and serve a Renovation Notice in accordance with the terms of the Novation Agreement.
|
|
(b) |
Upon this Charter being terminated by the Charterers in accordance with Clause 37.4(a) above, the Charterers shall, notwithstanding any such termination of this Charter, be obliged to pay
to the Owners, within ten (10) days of any such termination, the Pre-delivery Termination Sum, if any on the date of such termination.
|
38. |
TERMS OF DELIVERY
|
38.1 |
The Vessel shall be delivered to the Charterers in her condition as indicated in all the protocols and delivery documents as delivered by the Builder pursuant to Article VII of the
Shipbuilding Contract, and the Charterers hereby acknowledge and agree that the Owners make no condition, term, representation, warranty, covenant, agreement or declaration, express or implied (and whether statutory or otherwise) as to
the seaworthiness, merchantability, condition, design, operation, performance, class, capacity or fitness for use or as to the eligibility of the Vessel for any particular trade or operation or any other condition, term, representation or
warranty whatsoever, express or implied, with respect to the Vessel. Acceptance of delivery by the Charterers or (as the case may be) deemed delivery of the Vessel to the Charterers under this Charter shall be irrevocable, final and
conclusive proof and evidence that, for the purposes of the obligations and liabilities of the Owners hereunder or in connection herewith, the Vessel is at that time seaworthy, in accordance with the provisions of this Charter, in good
working order and repair.
|
38.2 |
The Charterers hereby waive all their rights in respect of any condition, term, representation or warranty express or implied (and whether statutory or otherwise) on the part of the Owners
and all their claims against the Owners howsoever and whenever the same may arise in respect of the Vessel or arising out of the operation or performance of the Vessel and the chartering thereof under this Charter (including in respect of
the seaworthiness, condition, design, operation, fitness for use or otherwise with respect to the Vessel). In particular, and without prejudice to the generality of the foregoing, the Owners shall be under no liability whatever and
howsoever arising in relation to any injury, death, loss, damage or delay of, or to, or in connection with the Vessel or any person or property whatsoever, whether on board the Vessel or elsewhere, irrespective of whether such injury,
death, loss, damage or delay shall arise from the unseaworthiness of or any defect in the Vessel. For the purposes of this Clause “delay” shall include delay in relation to the Vessel. (whether in respect of delivery of the Vessel to the
Charterers under this Charter or otherwise) or any other delay whatsoever. The Charterers acknowledge that no representation has been made or will be made by or on behalf of the Owners in relation to the Vessel or any part thereof.
|
38.3 |
The Charterers agree that the Owners shall be under no liability to supply any replacement vessel or any piece or part thereof during any period when the Vessel is unusable or becomes a
Total Loss and shall not be liable to the Charterers or any other person as a result of the Vessel being unusable or a Total Loss.
|
38.4 |
None of the Owners or their respective shareholders, affiliates, subsidiaries, consultants, agents and their respective shareholders, directors, officers, employees, or representatives
shall be liable to the Charterers (including any of its assigns, novatees, successors, shareholders, affiliates, subsidiaries, consultants, agents, managers, clients and their respective shareholders, directors, officers, employees, or
representatives) for (i) indirect, special, exemplary, punitive or consequential losses and damages, arising from, or relating to or in connection with this Charter (ii) and to the extent not covered by (i) above, the following, whether
direct or indirect loss of profit, loss of production, loss of revenue, loss of time, loss of contracts or otherwise, in each case irrespective of cause (by contract, by law, in tort or otherwise) and notwithstanding the negligence,
misconduct or breach (whether contractual, statutory or otherwise) save for (in each case) resulting from the gross negligence of wilful misconduct of such indemnified parties.
|
39. |
CANCELLATION
|
40. |
CONDITIONS PRECEDENT
|
|
(a) |
Initial Conditions
|
|
(i) |
an original of each of the following:
|
|
(A) |
the duly executed Charter;
|
|
(B) |
the duly executed Novation Agreement;
|
|
(C) |
the following duly executed Security Documents:
|
|
(D) |
all documents required by any of the Security Documents set out in paragraph (C), including but not limited to the notices and acknowledgement required under such
Security Documents, except for the letters of undertaking from the insurers, underwriters, protection and indemnity clubs and association which will be provided to the Owners and the acknowledgment by the acknowledgement by the
Sub-charterers to the assignment of the Sub-charter, both of which will be required under the Charterers’ Assignment and provided to the Owners in accordance with Clause 82 (Conditions subsequent);
|
|
(ii) |
certified true copies of the memorandum and articles of association (or equivalent documents) (and all amendments thereto) of each Obligor and any other documents required to be filed or
registered or issued under the laws of their jurisdiction of incorporation to establish their incorporation;
|
|
(iii) |
certified true copies of written resolutions or (as the case may be), resolutions passed at separate meetings, in each case, of the board of directors and (if required by any legal advisors
to the Owners) shareholders of each Obligor (or its sole member or general partners), evidencing its approval of the Transaction Documents and the Project Documents to which it is a party and authorising appropriate officers or attorneys
to execute the same and to sign all notices required to be given hereunder or thereunder on its behalf or other evidence of such approvals and authorisations as shall be acceptable to the Owners;
|
|
(iv) |
if applicable, the original power of attorney of each Obligor under which any documents (including the Transaction Documents and Project Documents to which it is a party) are to be executed
or transactions undertaken by that party;
|
|
(v) |
a certified list specifying the directors and officers of the Obligor (together with their respective specimen signatures);
|
|
(vi) |
if applicable, copies of all governmental and other consents, licences, approvals and authorisations as may be necessary to authorise the performance by each Obligor of its obligations
under the Transaction Documents and Project Documents to which it is a party, and the execution, validity and enforceability of such Transaction Documents and Project Documents;
|
|
(vii) |
certified copies of the duly executed Management Agreements, in each case together with all addenda, amendments or supplements;
|
|
(viii) |
evidence that the fees, costs and expenses then due from the Charterers pursuant to the Novation Agreement, this Charter (including Clauses 62 (Fees and
expenses) and 65 (Further indemnities)) have been paid or will be paid at such time as is agreed with the Owners;
|
|
(ix) |
a legal opinion issued by legal advisers to the Owners in the following jurisdictions, each in form and substance satisfactory to and agreed by the Owners (acting reasonably) (or
confirmation satisfactory to the Owners that such an opinion will be given):
|
|
(A) |
England and Wales; and
|
|
(B) |
such other jurisdictions as the Owners may reasonably consider necessary.
|
|
(b) |
Delivery Conditions
|
|
(i) |
an original of the Account Charge and all documents required by the Account Charge, including but not limited to the notices and acknowledgement required under the Account Charge;
|
|
(ii) |
evidence that:
|
|
(A) |
all the conditions precedents under clause 2 (Conditions Precedent) of the Novation Agreement have been satisfied or, in the Owners’ opinion, will be satisfied on the
Actual Delivery Date;
|
|
(B) |
subject to Clause 82 (Conditions Subsequent), the Vessel is (or will on the Actually Delivery Date) be insured in the manner required by the Transaction Documents;
|
|
(iii) |
certified copies of:
|
|
(A) |
the Approved Managers’ current Document of Compliance (as such term is defined pursuant to the ISM Code);
|
|
(B) |
the Vessel’s current IAPPC;
|
|
(C) |
a copy of the Vessel’s classification confirmation certificate evidencing that it is free of all overdue recommendations and requirements from the Classification
Society; and (iv)a copy of each of the Collateral Transaction Documents;
|
|
(iv) |
valuations made in accordance with Clause 52 (dd), dated no more than thirty (30) days prior to the Effective Date;
|
|
(v) |
evidence that the fees, costs and expenses then due from the Charterers pursuant to the Novation Agreement, this Charter (including Clauses 62 (Fees and
expenses) and 65 (Further indemnities)) have been paid or will be paid at such time as is agreed with the Owners;
|
|
(vi) |
a legal opinion issued by legal advisers to the Owners in the following jurisdictions, each in form and substance satisfactory to and agreed by the Owners (acting reasonably) (or
confirmation satisfactory to the Owners that such an opinion will be given):
|
|
(A) |
a legal opinion of HFW, legal advisors to the Owners on matters relating to English law;
|
|
(B) |
legal opinions by lawyers appointed by the Owners on matters relating to the laws of the Republic of the Marshall Islands;
|
|
(C) |
a legal opinion of the jurisdiction in which the account bank is situated; and
|
|
(D) |
such other jurisdictions as the Owners may reasonably consider necessary; and (viii)such other consent, licence, approval, authorisation or other document, opinion or
assurance which are necessary in connection with their entry into and performance of the transactions contemplated by any of the Transaction Documents or for the validity and enforceability thereof (including, without limitation in
relation to or for the purposes of any financing by the Owners).
|
|
(c) |
If the Owners in their sole discretion agree to deliver the Vessel under this Charter to the Charterers before all of the documents and evidence required by this Clause 39 have been
delivered to or to the order of the Owners, the Charterers undertake to deliver all outstanding documents and evidence to or to the order of the Owners no later than seven (7) Business Days after the Actual Delivery Date or such other
date as specified by the Owners, acting in their sole discretion. The delivery of the Vessel by the Owners to the Charterers under this Charter shall not, unless otherwise notified by the Owners (acting in their sole discretion) to the
Charterers in writing, be taken as a waiver of the Owners’ right to require production of all the documents and evidenced required by this Clause 40.
|
41. |
BUNKERS AND LUBOILS
|
41.1 |
At delivery the Charterers shall take over all bunkers, lubricating oil, hydraulic oil, greases, water and unbroached stores and provisions in the Vessel without cost.
|
41.2 |
To the extent that Clause 46 (Redelivery) applies, at redelivery the Owners shall take over all bunkers, unused lubricating oil, hydraulic oil, greases, water and unbroached provisions and
other consumable stores in the Vessel.
|
42. |
FURTHER MAINTENANCE AND OPERATION
|
42.1 |
The good commercial maintenance practice under Clause 10 (Maintenance and Operation) (Part II) of this Charter shall be deemed to include:
|
|
(a) |
the maintenance and operation of the Vessel by the Charterers in accordance with (as the following are amended from time to time):
|
|
(i) |
the relevant regulations, requirements and recommendations of the Classification Society;
|
|
(ii) |
the relevant regulations, requirements and recommendations of the country and flag of the Vessel’s registry;
|
|
(iii) |
any applicable IMO regulations (including but not limited to the ISM Code, the ISPS Code and MARPOL);
|
|
(iv) |
all other applicable laws or regulations; and
|
|
(v) |
Charterers’ current standard operations and maintenance manuals;
|
|
(b) |
the maintenance and operation of the Vessel by the Charterers taking into account:
|
|
(i) |
engine manufacturers’ recommended maintenance and service schedules;
|
|
(ii) |
builder’s operations and maintenance manuals; and
|
|
(iii) |
recommended maintenance and service schedules of all installed equipment and pipework.
|
42.2 |
In addition to the above, the Charterers covenant with the Owners to arrange online access to class records for the Owners as available to the Charterers.
|
42.3 |
Any equipment that is found not to be required on board as a result of law or regulation is either to be removed at the Charterers expense or to be maintained in operable condition.
|
42.4 |
The title to any equipment:
|
|
(a) |
placed on board as a result of operational requirements of the Charterers shall automatically be deemed to belong to the Owners (unless hired from or belonging to a third party) immediately
upon such placement, and such equipment may only be removed: (A) with the Owners’ prior written consent, (B) at the Charterers’ own expense, and (C) without damage to the Vessel; and
|
|
(b) |
replaced, renewed or substituted shall remain with the Owners until the part or equipment which replaced it or the new or substitute part or equipment becomes property of the Owners.
|
42.5 |
Without prejudice to any other provisions under this Charter, the Charterers shall maintain, use and operate the Vessel with commercially reasonable care as if the Charterers were the owner
of the same.
|
43. |
STRUCTURAL CHANGES AND ALTERATIONS
|
43.1 |
Unless required by the Classification Society, compulsory legislation or pursuant to the terms of any Sub-charter, the Charterers shall make no material structural changes in the Vessel or
material changes in the machinery, engines, appurtenances or spare parts thereof without in each instance first securing the Owners’ consent thereto, such consent not to be unreasonably withheld or delayed, provided that:
|
|
(a) |
any such changes do not have a material adverse effect on the Vessel’s certification or the Vessel’s fitness for purpose;
|
|
(b) |
any such changes will not materially diminish the value of the Vessel and/or have a material adverse effect on the safety, performance, value or marketability of the Vessel;
|
|
(c) |
the Charterers shall bear all time, costs and expenses in relation to any such changes;
|
|
(d) |
the Charterers shall furnish the Owners with:
|
|
(i) |
copies of all plans in relation to such changes;
|
|
(ii) |
if applicable, confirmation from the Classification Society that such changes will not adversely affect the class of the Vessel, provided always that such Classification Society agrees to
issue such confirmation;
|
|
(iii) |
one Valuation Report (at the Charterers’ cost) on the Market Value of the Vessel after the implementation of such changes.
|
43.2 |
Upon the occurrence of any Termination Event which is continuing, if the Owners decide to retake possession of the Vessel, the Charterers shall at their expense restore the Vessel to its
former condition unless the changes made are carried out:
|
|
(a) |
to improve the performance, operation or marketability of the Vessel; or
|
|
(b) |
as a result of a regulatory compliance.
|
43.3 |
Any improvement, structural changes or new equipment becoming necessary for the continued operation of the Vessel by reason of new class requirements or by compulsory legislation shall be
for the Charterers’ account and the Charterers shall not have any right to recover from the Owners any part of the cost for such improvements, changes or new equipment either during the Charter Period or, to the extent that Clause 46 (Redelivery) applies, at redelivery of the Vessel. The Charterers shall give written notice to the Owners of any such improvement, structural changes or new equipment.
|
44. |
HIRE
|
44.1 |
In consideration of the Owners’ agreement to charter the Vessel to the Charterers pursuant to the terms hereof, the Charterers agree to pay to the Owners an amount of interest on the Paid
Instalments (excluding, for the avoidance of any doubt, the delivery instalment), accruing at the rate of three (3) month LIBOR plus 4.0 per cent. per annum (the “Accrued Charterhire”), with such
amount being accrued and payable quarterly in arrears.
|
44.2 |
The Accrued Charterhire shall be, for the avoidance of any doubt, non-refundable under all circumstances.
|
44.3 |
In consideration of the Owners’ agreement to charter the Vessel to the Charterers pursuant to the terms hereof, the Charterers agree to pay to the Owners the following sums on the relevant
dates as follows:
|
|
(a) |
on each and every Hire Payment Date, pay to the Owners the relevant amount then payable on the corresponding Hire Payment Date (the “Fixed Hire”) as
determined by reference to the amount set out opposite such Hire Payment Date under the heading “Fixed Hire” in the hire payment schedule as attached as Schedule 3 (Hire Payment Schedule) hereto (the “Hire
Payment Schedule”);
|
|
(b) |
for the purpose of determining any Monthly Hire payment:
|
|
(i) |
the Charterers hereby expressly acknowledge that the Hire Payment Schedule in its current form and content as attached hereto (i) is based on the Assumed
|
|
(ii) |
accordingly, should the Parties agree to a change in the Assumed Owners’ Cost or the Charterers make a partial pre-payment, the Owners shall deliver to the Charters an amended Hire Payment
Schedule at such time (including, without limitation, the cost Balance) reflecting the resulting pro-rata adjustments for the Charterers’ review and approval, which shall thereafter:
|
|
(A) |
constitute the current Hire Payment Schedule; and
|
|
(B) |
save for manifest error, be conclusive evidence of the rate of Fixed Hire payable under this Charter; and
|
|
(iii) |
for the avoidance of doubt and notwithstanding any provisions in this Clause 44 (Hire), the Charterers’ obligation to pay Monthly Hire as calculated
in accordance with the formula set out in Clause 44(b)(ii)(B) above shall remain at all times, whether or not the Owners provide any amended Hire Payment Schedule.
|
|
(c) |
All payments of Fixed Hire shall be paid in advance on each Hire Payment Date (prior to 16:00, Shanghai time) (in respect of which time is of the essence) with the first (1st) instalment falling due on the Actual Delivery Date.
|
|
(d) |
Any payment provided herein due on any day which is not a Business Day shall be payable on the following Business Day.
|
|
(e) |
All payments under this Charter shall be made to the account notified by the Owners to the Charterers prior to the first Hire Payment Date (or such other account as the Owners may
thereafter notify the Charterers from time to time) for credit to such account notified by the Owners.
|
|
(f) |
Following delivery of the Vessel to, and acceptance by, the Charterers under this Charter, the Charterers’ obligation to pay Fixed Hire in accordance with this Clause 44 shall be absolute
irrespective of any contingency whatsoever including but not limited to:
|
|
(i) |
any set-off (save as permitted under Clause 44.1), counterclaim, recoupment, defence or other right which the Charterers may have against the Owners, the Finance Parties or any other third
party (unless otherwise agreed between the Owners and the Charterers);
|
|
(ii) |
any unavailability of the Vessel, for any reason, including but not limited to seaworthiness, condition, design, operation, merchantability or fitness for use or purpose of the Vessel or
any apparent or latent defects in the Vessel or its machinery and equipment or the ineligibility of the Vessel for any particular use or trade or for registration of documentation under the laws of any relevant jurisdiction or lack of
registration or the absence or withdrawal of any consent required under the applicable law of any relevant jurisdiction for the ownership, chartering, use or operation of the Vessel or any damage to the Vessel;
|
|
(iii) |
any lack or invalidity of title or any other defect in title;
|
|
(iv) |
any failure or delay on the part of either party to this Charter, whether with or without fault on its part, in performing or complying with any of the terms, conditions or other provisions
of this Charter;
|
|
(v) |
any insolvency, bankruptcy, reorganisation, arrangement, readjustment of debt, dissolution, administration, liquidation or similar proceedings by or
|
|
(vi) |
any invalidity or unenforceability or lack of due authorisation of or any defect in this Charter;
|
|
(vii) |
any other cause which would but for this provision have the effect of terminating or in any way affecting the obligations of the Charterers hereunder,
|
|
(g) |
All payments of Fixed Hire and all other Unpaid Sums to the Owners pursuant to this Charter and the other relevant Transaction Documents shall be made in immediately available funds in US
Dollars, free and clear of, and without deduction or withholding for or on account of, any Taxes (unless otherwise agreed between the Owners and the Charterers).
|
|
(h) |
In the event that the Charterers are required by any law or regulation to make any deduction or withholding on account of any taxes which arise as a consequence of any payment due under
this Charter, then:
|
|
(i) |
the Charterers shall notify the Owners promptly after they become aware of such requirement;
|
|
(ii) |
the Charterers shall remit the amount of such taxes to the appropriate taxation authority within three (3) Business Days or any other applicable shorter time limits and in any event prior
to the date on which penalties attach thereto; and
|
|
(iii) |
such payment shall be increased by such amount as may be necessary to ensure that the Owners receive a net amount which, after deducting or withholding such taxes, is equal to the full
amount which the Owners would have received had such payment not been subject to such taxes.
|
|
(i) |
The Charterers shall forward to the Owners evidence reasonably satisfactory to the Owners that any such taxes have been remitted to the appropriate taxation authority within thirty (30)
days of the expiry of any time limit within which such taxes must be so remitted or, if earlier, the date on which such taxes are so remitted.
|
|
(j) |
Subject to sub-paragraph 54.1)(a) of Clause 54 (Termination Events), if the Charterers fail to pay any amount payable by it under a Transaction
Document on its due date, interest shall accrue on a daily basis over the Unpaid Sum from the due date up to the date of actual payment (both before and after judgment) at a rate of 8% per annum.
|
|
(k) |
In the event that this Charter is terminated for whatever reason, the Charterers’ obligation to pay Fixed Hire, and such other Unpaid Sum which (in each case) has accrued due before, and
which remains unpaid, at the date of such termination shall continue notwithstanding such termination.
|
|
(l) |
In the event that it becomes unlawful or it is prohibited for either the Owners or the Charterers to charter the Vessel pursuant to this Charter, then the Owners and Charterers, if such new
or changed law or regulation or such interpretation or application permit, shall notify the other party of the relevant event and negotiate in good faith for a period of thirty (30) days from the date of the receipt of the relevant notice
by the other party to agree an alternative. If such agreement is not reached within such thirty (30)-day period, the Charterers agree that, in such circumstances, the
|
|
(m) |
Subject to paragraph (o) below, the Charterers shall, within three (3) Business Days of a demand by the Owners, pay to the Owners the amount of any Increased Costs incurred by the Owners as
a result of (i) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation or (ii) compliance with any law or regulation made after the date of this Charter.
|
|
(i) |
“Increased Costs” means:
|
|
(A) |
a reduction in the rate of return from the Fixed Hire or on the Owners’ overall capital;
|
|
(B) |
an additional or increased cost; or
|
|
(C) |
a reduction of any amount due and payable under any Transaction Document,
|
|
(n) |
The Owners shall notify the Charterers of any claim arising from paragraph (m) above (and of the event giving rise to such claim). The Owners shall, as soon as practicable after having made
a demand in respect of such claim, provide a certificate confirming the amount of its Increased Costs as well as evidence supporting its calculation.
|
|
(o) |
Paragraph (m) above does not apply to the extent any Increased Costs is:
|
|
(i) |
compensated for by a payment made under paragraph (h)(iii) above; or
|
|
(ii) |
attributable to the wilful breach by the Owners of any law or regulation.
|
45. |
INSURANCE
|
45.1 |
During the Agreement Term, the Charterers shall at their expense keep the Vessel insured against fire and usual marine risks (including hull and machinery and excess risks), oil pollution
liability risks, war and protection and indemnity risks (and any risks against which it is compulsory to insure for the operation for the Vessel) in US Dollars and in such market and on such terms as the Owners and the Finance Parties (if
any) shall in writing approve45 in line with good shipping practise.
|
45.2 |
Such insurances shall be arranged by the Charterers to protect the interests of the Owners, the Charterers and (if any) the mortgagee of the Vessel (but if there exists any mortgagee, the
Charterers shall request such mortgagee to agree to enter into a quiet enjoyment agreement with the Charterers in such form as the parties may agree but nothing herein shall prohibit the Owners from granting such mortgage in favour of a
Finance Party under a Finance Document) or such other relevant Finance Party, and the Charterers shall be at liberty to protect under such insurances the interests of any Approved Manager.
|
45.3 |
Insurance policies shall cover the Owners, the Charterers and (if any) the Finance Parties according to their respective interests. Subject to the approval of the Owners (acting on the
instructions or with the approval of the Finance Parties (in each case if applicable) and the insurers, the Charterers shall effect all insured repairs and shall undertake settlement and reimbursement from the insurers of all costs in
connection with such repairs as well as insured
|
45.4 |
The Charterers shall also remain responsible for and to effect repairs and settlement of costs and expenses incurred thereby in respect of all other repairs not covered by the insurances
and/or not exceeding any possible franchise(s) or deductibles provided for in the insurances.
|
45.5 |
The Charterers shall arrange that, at any time during the Agreement Term, the hull and machinery and war risks insurance shall be in an amount not less than the greater of:
|
|
(a) |
an amount which equals one hundred and twenty per cent (120%) of the Cost Balance; and
|
|
(b) |
the current Market Value of the Vessel.
|
45.6 |
The terms of the hull and machinery insurance and the identity of the insurers shall be acceptable to the Owners and (if any) the Finance Parties. The Vessel shall be entered in a P&I
Club which is a member of the International Group Association on customary terms and shall be covered against liability for pollution claims in an amount not less than one billion US Dollars (US$1,000,000,000). The P&I cover shall be
placed with a P&I Club acceptable to the Owners and (if any) the Finance Parties. All insurances shall include customary protection in favour of the Owners and (if any) the Finance Parties as notice of cancellation and exclusion from
liability for premiums or calls. The insurance policies or cover notes for the hull and machinery insurance shall name the Owners as co-assured, endorsing its rights and interests. The Owners shall be entered as a member for the P&I
cover and war risks insurance.
|
45.7 |
The Charterers:
|
|
(a) |
undertake to place the Insurances in such markets, in such currency, on such terms and conditions, and with such brokers, underwriters and associations as the Owners and, if applicable, the
Finance Parties shall have previously approved in writing such approval not be unreasonably withheld; and
|
|
(b) |
shall not alter the terms of any of the Insurances nor allow any person (except the Approved Manager) to be co-assured under any of the Insurances without the prior written consent of the
Owners and, if applicable, the Finance Parties, and will supply the Owners and, if applicable, the Finance Parties from time to time on request with such information as the Owners and, if applicable, any Finance Party may in their
discretion require with regard to the Insurances and the brokers, underwriters or associations through or with which the Insurances are placed.
|
45.8 |
The Charterers undertake duly and punctually to pay all premiums, calls and contributions, and all other sums at any time payable in connection with the Insurances, and, at their own
expense, to arrange and provide any guarantees from time to time required by any protection and indemnity or war risks association. The Charterers shall provide the Owners and/or such Finance Party with (i) copies of all invoices issued
by the brokers, underwriters or associations in respect of such premiums calls, contributions and other sums, and (ii) evidence satisfactory to the Owners and/or such Finance Party that such premiums, calls, contributions and other sums
have been duly and punctually paid; that any such guarantees have been duly given; and that all declarations and notices required by the terms of any of the Insurances to be made or given by or on behalf of the Charterers to brokers,
underwriters or associations have been duly and punctually made or given.
|
45.9 |
The Charterers will comply in all respects with all terms and conditions of the Insurances and will make all such declarations to brokers, underwriters and associations as may be required
to enable the Vessel to operate in accordance with the terms and conditions of the Insurances. The Charterers will not do, nor permit to be done, any act, nor make, nor permit to be made, any omission, as a result of which any of the
Insurances may become liable to be suspended, cancelled or avoided, or may become unenforceable, or as a result of which any sums payable under or in connection with any of the Insurances may be reduced or become liable to be repaid
|
45.10 |
The Charterers will endeavour and before the expiry of any of the Insurances renew them and shall as soon as reasonably thereafter (but in any event within fifteen (15) days after the
relevant renewals) give the Owners and, if applicable, the Finance Parties such details of those renewals as the Owners and, if applicable, the Finance Parties may require.
|
45.11 |
The Charterers shall deliver to the Owners and, if applicable, the Finance Parties certified copies (and, if required by the Owners and/or (if applicable) any Finance Parties, the
originals) of all policies, certificates of entry (endorsed with the appropriate loss payable clauses as may be required by the Owners and the Finance Parties from time to time) and other documents relating to the Insurances (including,
without limitation, receipts for premiums, calls or contributions) and shall procure that letters of undertaking in such form as the Owners and, if applicable, the Finance Parties may approve shall be issued to the Owners and, if
applicable, the Finance Parties by the brokers through which the Insurances are placed (or, in the case of protection and indemnity or war risks associations, by their managers). If the Vessel is at any time during the Agreement Term
insured under any form of fleet cover, the Charterers shall procure that those letters of undertaking contain confirmation that the brokers, underwriters or association (as the case may be) will not set off claims relating to the Vessel
against premiums, calls or contributions in respect of any other vessel or other insurance, and that the insurance cover of the Vessel will not be cancelled by reason of non-payment of premiums, calls or contributions relating to any
other vessel or other insurance. Failing receipt of those confirmations, the Charterers will instruct the brokers, underwriters or association concerned to issue a separate policy or certificate for the Vessel in the sole name of the
Charterers or of the Charterers’ brokers as agents for the Charterers.
|
45.12 |
Upon the Owners’ reasonable request, the Charterers shall provide the Owners and, if applicable, the Finance Parties with full information available to the Charterers regarding any casualty
or other accident or damage to the Vessel, including, without limitation, any communication with all parties involved in case of a claim under any of the Insurances.
|
45.13 |
The Charterers agree that, at any time after the occurrence of a Termination Event which is continuing, the Owners and, if applicable, the Finance Parties shall be entitled to collect, sue
for, recover and give a good discharge for all claims in respect of any of the Insurances; to pay collecting brokers the customary commission on all sums collected in respect of those claims; to compromise all such claims or refer them to
arbitration or any other form of judicial or non-judicial determination; and otherwise to deal with such claims in such manner as the Owners and, if applicable, the Finance Parties shall in their discretion think fit.
|
45.14 |
Whether or not a Termination Event shall have occurred, the proceeds of any claim under any of the Insurances in respect of a Total Loss shall be paid and applied in accordance with Clause
61 (Total Loss).
|
45.15 |
In the event of any claim in respect of any of the Insurances (other than in respect of a Total Loss), if the Charterers shall fail to reach agreement with any of the brokers, underwriters
or associations for the immediate restoration of the Vessel, or for payment to third parties, within such time as the Owners and, if applicable, the Finance Parties may stipulate, the Owners and, if applicable, the Finance Parties shall
be entitled to require payment to itself. In the event of any dispute arising between the Charterers and any broker, underwriter or association with respect to any obligation to make any payment to the Charterers or to the Owners and/or
(if applicable) the Finance Parties under or in connection with any of the Insurances, or with respect to the amount of any such payment, the Owners and/or (if applicable) the Finance Parties shall be entitled to settle that dispute
directly with the broker, underwriter or association concerned. Any such settlement shall be binding on the Charterers.
|
|
(a) |
implement any recommendations contained in the reports issued following the surveys referred to in sub-paragraph Error! Reference source not found. above
within the relevant time limits, and provide evidence satisfactory to the Owners and, if applicable, the Finance Parties that the protection and indemnity insurers are satisfied that this has been done; and
|
|
(b) |
in addition to the foregoing (if such trade is in the United States of America and Exclusive Economic Zone):
|
|
(i) |
obtain and retain a certificate of financial responsibility under the Act in form and substance satisfactory to the United States Coast Guard and provide the Owners with evidence of the
same;
|
|
(ii) |
procure that the protection and indemnity insurances do not contain a US Trading Exclusion Clause or any other analogous provision and provide the Owners with evidence that this is so; and
|
|
(iii) |
comply strictly with any operational or structural regulations issued from time to time by any relevant authorities under the Act so that at all times the Vessel falls within the provisions
which limit strict liability under the Act for oil pollution.
|
45.17 |
The Owners shall be at liberty to, in relation to the Vessel, take out Lessor’s or Innocent Owners’ Interest Insurance and Lessor’s Additional Peril (Pollution) insurance on such terms and
conditions as the Owners may from time to time decide. The Charterers shall from time to time upon the Owners’ demand reimburse the Owners for all costs, premiums and expenses paid or incurred by the Owners in connection with such
Lessor’s or Innocent Owners’ Interest Insurance and Lessor’s Additional Peril (Pollution) insurance, but only to the extent corresponding to each of the Lessor’s or Owners’ Interest Insurance or Lessor’s Additional Peril (Pollution)
insurance for an amount not exceeding one hundred and twenty per cent (120%) of the then current Cost Balance.
|
45.18 |
Any Finance Party shall be at liberty to take out a Mortgagees’ Interest Insurance in relation to the Vessel on such terms and conditions as that Finance Party may from time to time decide.
The Charterers shall from time to time upon the Owners’ demand reimburse the Owners for all costs, premiums and expenses paid or incurred by the Owners or that Finance Party in connection with such Mortgagees’ Interest Insurance, but only
to the extent corresponding to a Mortgagee’s Interest Insurance for an amount not exceeding one hundred and twenty per cent. (120%) of the amount then outstanding under any loan made available by the Finance Parties pursuant to any
Finance Documents.
|
45.19 |
The Owners shall be at liberty to, in relation to the Vessel, take out freight, demurrage and defence cover on such terms and conditions as the Owners may from time to time decide. The
Charterers shall from time to time upon the Owners’ demand reimburse the Owners for all costs, premiums and expenses paid or incurred by the Owners in connection with such cover, but only to the extent corresponding to such cover for an
amount not exceeding one hundred and twenty per cent (120%) of the then current Cost Balance.
|
46. |
REDELIVERY
|
47. |
REDELIVERY CONDITIONS
|
|
(a) |
In addition to what has been agreed in Clauses 15 (Redelivery) (Part II) and 46 (Redelivery), the condition
of the Vessel shall at redelivery be as follows:
|
|
(i) |
the Vessel shall be free of any class and statutory recommendations affecting its trading certificates;
|
|
(ii) |
the Vessel must be redelivered with all equipment and spares or replacement items listed in the delivery inventory carried out pursuant to Clause 9 (Inventories,
Oil and Stores) (Part II) and any spare parts on board or on order for any equipment installed on the Vessel following delivery (provided that any such items which are on lease or hire purchase shall be replaced with items of an
equivalent standard and condition fair wear and tear excepted); all records, logs, plans, operating manuals and drawings, spare parts onboard shall be included at the time of redelivery in connection with a transfer of the Vessel or such
other items as are then in the possession of the Charterers shall be delivered to the Owners;
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|
(iii) |
the Vessel must be redelivered with all national and international trading certificates and hull/machinery survey positions for both class and statutory surveys free of any overdue
recommendation and qualifications valid and un-extended for a period of at least three (3) months beyond the redelivery date;
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|
(iv) |
all of the Vessel’s ballast tank coatings to be maintained in “Fair” (as such term (or its equivalent) may be defined and/or interpreted in the relevant survey report) condition as
appropriate for the Vessel’s age at the time of redelivery, fair wear and tear excepted;
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|
(v) |
the Vessel shall have passed any flag or class surveys or inspections due within three (3) months after the date of redelivery and have its continuous survey system up to date;
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|
(vi) |
the Vessel must be re-delivered with accommodation and common spaces for crew and officers substantially in the same condition as at the Actual Delivery Date, free of damage over and above
fair wear and tear, clean and free of infestation and odours; with cargo spaces generally fit to carry the cargoes originally designed and intended for the Vessel; with main propulsion equipment, auxiliary equipment, cargo handling
equipment, navigational equipment, etc., in such operating condition as provided for in this Charter;
|
|
(vii) |
the Vessel shall be free and clear of all liens other than those created by or on the instruction of the Owners;
|
|
(viii) |
the condition of the cargo holds to be in accordance with the maintenance regime undertaken by the Charterers during the Charter Period since delivery with allowance for legitimate cargoes
carried since the last major maintenance programme;
|
|
(ix) |
at the costs and expenses of the Charterers, a final joint report from the surveyors appointed by the Owners and the Charterers respectively shall be carried out as to the condition of the
Vessel and a list of agreed deficiencies if any shall be drawn up;
|
|
(x) |
the anti-fouling coating system applied at the last scheduled dry-docking shall be in accordance with prevailing regulations at the time of application;
|
|
(xi) |
the funnel markings and name (unless being maintained by the Owner following redelivery) shall be painted out by the Charterers; and
|
|
(xii) |
recently taken lube oil samples for all major machinery shall be made available within one (1) week of redelivery and results forwarded to Owners’ technical management for review.
|
|
(b) |
At redelivery, the Charterers shall ensure that the Vessel shall meet the following performance levels (which where relevant shall be determined by reference to the Vessel’s log books):
|
|
(i) |
all equipment controlling the habitability of the accommodation and service areas to be in proper working order, fair wear and tear excepted; and
|
|
(ii) |
available deadweight to be within one per cent (1%) of that achieved at delivery (as the same may be adjusted as a result of any upgrading of the Vessel carried out in accordance with this
Charter (such adjustment to be agreed between the Owners and Charterers at the time such upgrading work is to be undertaken);
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|
(c) |
The Owners and Charterers shall each appoint (at the Charterers’ cost and expense) surveyors for the purpose of determining and agreeing in writing the condition of the Vessel at
redelivery.
|
|
(d) |
If the Vessel is not in the condition or does not meet the performance criteria required by this Clause 47, a list of deficiencies together with the costs of repairing/remedying such
deficiencies shall be agreed by the respective surveyors.
|
|
(e) |
The Charterers shall be obliged to repair any class items restricting the operation or trading of the Vessel prior to redelivery.
|
|
(f) |
The Charterers shall be obliged to repair/remedy all such other deficiencies as are necessary to put the Vessel into the return condition required by this Clause 47.
|
|
(g) |
Until such time as any compensatory amount in respect of any repairs/remedial work outstanding as at redelivery has been paid in accordance with the terms of this Charter and the Vessel has
been redelivered, the Charterers shall continue to pay the Fixed Hire in accordance with the terms of this Charter.
|
48. |
OWNERS’ MORTGAGE
|
48.1 |
If required by the Sub-Charterer, the Owner shall procure, or provide, as the case may be a quiet enjoyment letter in wording to be reasonably agreed between the parties, the Charterers:
|
|
(a) |
acknowledge that the Owners are entitled and do intend to enter or have entered into certain funding arrangements with the Finance Parties in order to finance part of the Owners’ Cost,
which funding arrangements may be secured, inter alia, by ship mortgages over the Vessel and (along with other related matters) the relevant Finance Documents;
|
|
(b) |
irrevocably consent to any assignment in favour of the Finance Parties pursuant to the relevant Finance Documents of the Charterers’ rights, interests and benefits in and to the Insurances,
Earnings, Requisition Compensation and any guarantee in favour of the Charterers for the performance of the obligations of any Sub-charterer under any Sub-charter; and
|
|
(c) |
without limiting the generality of paragraph 52.14 of Clause 52 (Charterers’ undertakings), undertake to execute, provide or procure the execution or provision (as the case may be) of such
further reasonably information or document as are necessary to effect the assignment referred to in paragraph (b) above.
|
|
(d) |
Without prejudice to the foregoing, the Owners’ may assign, transfer or novate their rights under this Charter without the prior written consent of the Charterers.
|
49. |
DIVER’S INSPECTION AT REDELIVERY
|
49.1 |
Unless the Vessel is returned in dry-dock, a diver’s inspection is required to be performed at the time of redelivery.
|
49.2 |
The Charterers shall, at the written request of the Owners, arrange at the Charterers’ time and expense for an underwater inspection by a diver approved by the Classification Society
immediately prior to the redelivery.
|
49.3 |
A video film of the inspection shall be made. The extent of the inspection and the conditions under which it is performed shall be to the satisfaction of the Classification Society.
|
49.4 |
If damage to the underwater parts is found, the Charterers shall arrange, at their time and costs, for the Vessel to be dry-docked and repairs carried out to the satisfaction of the
Classification Society.
|
49.5 |
If the conditions at the port of redelivery are unsuitable for such diver’s inspection, the Charterers shall take the Vessel (in Owners’ time but at Charterers’ expense) to a suitable
alternative place nearest to the redelivery port unless an alternative solution is agreed.
|
50. |
TRANSPORT DOCUMENTS
|
51. |
CHARTERERS’ REPRESENTATIONS AND WARRANTIES
|
51.1 |
The Charterers represent and warrant to the Owners on the date of this Charter and (by reference to the facts and circumstances then pertaining) on, each payment date for making payment of
the Paid Instalments, the Actual Delivery Date and each Hire Payment Date as follows (except that (1) the representation and warranty contained in paragraph (g) and (x) below shall only be made on the date of this Charter, each payment
date for making payment of the Paid Instalments and on the Actual Delivery Date, and (2) the representations and warranties in paragraph (b) below shall only be made on the date of this Charter):
|
|
(a) |
Status and due authorisation: each Obligor is a corporation, limited partnership or limited liability company duly incorporated or formed under the laws of its jurisdiction of incorporation or formation (as the case may be) with power to enter into the
Transaction Documents and the Project Documents (to which it is a party) and to exercise its rights and perform its obligations under the Transaction Documents and the Project Documents (to which it is a party) and all corporate and
other action required to authorise its execution of the Transaction Documents and the Project documents (to which it is a party) and its performance of its obligations thereunder has been duly taken;
|
|
(b) |
No deductions or withholding: under the laws of the Obligors’ respective jurisdictions of incorporation or formation in force at the date hereof, none of the Obligors will be required to make any deduction or withholding from any payment it may make under any
of the Transaction Documents;
|
|
(c) |
Claims pari passu: under
the laws of the Obligors’ respective jurisdictions of incorporation or formation in force at the date hereof, the payment obligations of each Obligor under each Transaction Document to which it is a party, rank at least pari passu with the claims of all other unsecured and unsubordinated creditors of such obligor save for any obligations which are preferred solely by any
bankruptcy, insolvency or other similar laws of general application;
|
|
(d) |
No Immunity: in any
proceedings taken in any of the Obligors’ respective jurisdictions of incorporation or formation in relation to any of the Transaction Documents, none of the Obligors will be entitled to claim for itself or any of its assets immunity
from suit, execution, attachment or other legal process;
|
|
(e) |
Governing law and judgments: in any proceedings taken in any of the Obligors’ jurisdiction of incorporation or formation in relation to any of the Transaction
Documents in which there is an express choice of the law of a particular country as the governing law thereof, that choice of law and any judgment or (if applicable) arbitral award obtained in that country will be recognised and
enforced;
|
|
(f) |
Validity and admissibility in evidence: as at the date hereof, all acts, conditions and things required to be done, fulfilled and performed in order (A) to enable each of the Obligors lawfully to enter into, exercise its rights under and perform and
comply with the obligations expressed to be assumed by it in the Transaction Documents and the Project Documents to which it is a party, (B) to ensure that the obligations expressed to be assumed by each of the Obligors in the
Transaction Documents and the Project Documents are legal, valid and binding, and (C) to make the Transaction Documents and the Project Documents to which it is a party admissible in evidence in the jurisdictions of incorporation or
formation of each of the Obligors, have been done, fulfilled and performed;
|
|
(g) |
No filing or stamp taxes: under the laws of the Obligors’ respective jurisdictions of incorporation or formation in force at the date hereof, it is not necessary that any of the Transaction Documents to which it is a party be filed, recorded or enrolled
with any court or other authority in its jurisdiction of incorporation or formation (other than the Registrar of Companies for England and Wales or the relevant maritime registry, to the extent applicable) or that any stamp,
registration or similar tax be paid on or in relation to any of the Transaction Document except that the Charterers’ Assignment, the Manager’s Undertakings and the Account Charge shall be filed against the Charterers with the Marshall
Islands within one month of the date of execution of such document;
|
|
(h) |
Binding obligations: the
obligations expressed to be assumed by each of the Obligors in the Transaction Documents and the Project Documents to which it is a party are legal and valid obligations, binding on each of them in accordance with the terms of such
Transaction Documents and the Project Documents and no limit on any of their powers will be exceeded as a result of the borrowings, granting of security or giving of guarantees contemplated by such Transaction Documents and the Project
Documents or the performance by any of them of any of their obligations thereunder;
|
|
(i) |
No misleading information: to the best of its knowledge, any factual information provided by any Obligor to the Owners in connection with the Transaction Documents was true and accurate in all material respects as at the date it was provided and is not
misleading in any material respect;
|
|
(j) |
No winding-up: none of
the Obligors has taken any corporate, limited liability company or limited partnership action nor have any other steps been taken or legal proceedings been started or (to the best of the Charterers’ knowledge and belief) threatened
against any Obligor for its winding-up, dissolution, administration or reorganisation or for the appointment of a receiver, administrator, administrative receiver, trustee or similar officer of it or of any or all of its assets or
revenues which might have a Material Adverse Effect ;
|
|
(k) |
Solvency:
|
|
(i) |
None of the Obligors is unable, or admits or has admitted its inability, to pay its debts or has suspended making payments in respect of any of its debts;
|
|
(ii) |
None of the Obligors by reason of actual or anticipated financial difficulties, has commenced, or intends to commence, negotiations with one or more of its creditors with a view to
rescheduling any of its indebtedness.
|
|
(iii) |
The value of the assets of each Obligor is not less than the liabilities of such Obligor (as the case may be) (taking into account contingent and prospective liabilities).
|
|
(iv) |
No moratorium has been, declared in respect of any indebtedness of any Obligor.
|
|
(l) |
No material defaults:
|
|
(i) |
Without prejudice to paragraph (ii) below, none of the Obligors are in breach of or in default under any agreement to which it is a party or which is binding on it or any of its assets to
an extent or in a manner which might have a Material Adverse Effect.
|
|
(ii) |
No Potential Termination Event or Termination Event is continuing or might reasonably be expected to result from each Obligor’s entry into and performance of each Transaction Document to
which such Obligor is a party;
|
|
(m) |
No material proceedings: no
material action or administrative proceeding of or before any court, arbitral body or agency which is not covered by adequate insurance or which might have a Material Adverse Effect has been started;
|
|
(n) |
Accounts: all financial
statements relating to the Charterers required to be delivered under paragraph 52.1 of Clause 52 (Charterers’ undertakings), were each prepared in accordance
with GAAP, (in conjunction with the notes thereto) fairly represent the financial condition of the Charterers at the date as of which they were prepared and the results of their operations during the financial period then ended;
|
|
(o) |
No obligation to create Security Interest: the execution of the Transaction Documents by the Obligors and their exercise of their rights and performance of their obligations thereunder will not result in the existence of nor oblige any Obligor to create
any Security Interest over all or any of their present or future revenues or assets, other than pursuant to the Security Documents to which they are a party;
|
|
(p) |
No breach: the execution
of the Transaction Documents and the Project Documents by each of the Obligors and their exercise of their rights and performance of their obligations under any of the Transaction Documents and the Project Documents to which they are a
party do not constitute and will not result in any breach of any agreement or treaty to which any of them is a party;
|
|
(q) |
Security: each of the
Obligors is the legal and beneficial owner of all assets and other property which it purports to charge, mortgage, pledge, assign or otherwise secure pursuant to each Security Document and those Security Documents to which it is a party
create and give rise to valid and effective security having the ranking expressed in those Security Documents;
|
|
(r) |
Necessary authorisations: the Necessary Authorisations required by each Obligor are in full force and effect, and each Obligor is in compliance with the material provisions of each such Necessary Authorisation relating to it and, to the best of its
knowledge, none of the Necessary Authorisations relating to it are the subject of any pending or threatened proceedings or revocation;
|
|
(s) |
No money laundering: the
performance of the obligations of the Obligors under the Transaction Documents and the Project Documents, will be for the account of members of the respective Obligor(s) and will not involve any breach by any of them of any law or
regulatory measure relating to “money laundering” as defined in Article 1 of the
|
|
(t) |
Disclosure of material facts: the Charterers are not aware of any material facts or circumstances which have not been disclosed to the Owners and which might, if disclosed, have reasonably been expected to materially adversely affect the decision of a person
considering whether or not to enter into the Transaction Documents.
|
|
(u) |
Environmental laws:
|
|
(i) |
Each of the Charter Guarantors is in compliance with paragraph 52.8 of Clause 52 (Charterers’ undertakings) and (to the best of its knowledge and
belief) no circumstances have occurred which would prevent such compliance in a manner or to an extent which has or is reasonably likely to have a Material Adverse Effect. No
Environmental Claim has been commenced or (to the best of the Charterers’ knowledge and belief) is threatened against any of the Charter Guarantor where that claim has or is reasonably likely, if determined against the Charter Guarantor,
to have a Material Adverse Effect.
|
|
(v) |
Taxation
|
|
(i) |
No Obligor is materially overdue in the filing of any Tax returns and no Obligor overdue in the payment of any amount in respect of Tax of one million US Dollars (US$1,000,000) (or its
equivalent in any other currency) or more, save in the case of Taxes which are being contested in good faith.
|
|
(ii) |
As far as the Charterers are aware, each of the Obligors (save for the Approved Manager) is resident for Tax purposes only in the jurisdiction of its incorporation.
|
|
(w) |
No Restricted Party: no
Obligor is a Restricted Party nor has any Obligor or any of their respective directors, officers or employees or any person acting on their behalf received notice or are aware of any claim, action, suit, proceeding or investigation
against any of them with respect to Sanctions by a Sanctions Authority.
|
|
(x) |
No Material Adverse Effect: no event or circumstance which has occurred which has a Material Adverse Effect.
|
|
(y) |
Status of Project Documents: The copies of the Project Documents delivered to the Lender are true and complete copies. The Project Documents constitute legal, valid, binding and enforceable obligations of the parties to them in accordance with their
respective terms except insofar as enforcement may be limited by any applicable laws relating to bankruptcy, insolvency, administration and similar laws affecting creditors’ rights generally and by principles of equity. No amendments or
additions to the Project Documents have been agreed nor has any party to any Project Document waived any of its respective rights under that Project Document (except as those notified to the Owners in writing and, if consent of the
Owners are required pursuant to this Charter, as consented to by the Owners).
|
51.2 |
The representation and warranties of the Charterers in this Clause 51 are subject to:
|
|
(a) |
the principle that equitable remedies are remedies which may be granted or refused at the discretion of the court;
|
|
(b) |
the limitation of enforcement by laws relating to bankruptcy, insolvency, liquidation, reorganisation, court schemes, moratoria, administration and other laws generally affecting or
limiting the rights of creditors;
|
|
(c) |
the time barring of claims under any applicable limitation acts;
|
|
(d) |
the possibility that a court may strike out provisions for a contract as being invalid for reasons of oppression, undue influence or similar; and
|
|
(e) |
any other reservations or qualifications of law expressed in any legal opinions obtained by the Owners in connection with the Transaction Documents.
|
52. |
CHARTERERS’ UNDERTAKINGS
|
52.1 |
Financial statements the
Charterers shall and shall procure the Charter Guarantor to each supply to the Owners (i) as soon as the same become available, but in any event within one hundred and eighty (180) days after the end of each of its financial years, its
audited consolidated financial statements for that financial year.
|
52.2 |
Requirements as to financial statements each set of financial statements delivered to the Owners under paragraph 52.1 of Clause 52 in relation to the Charterers and the Charter Guarantor (each a “Notifying Party”):
|
|
(a) |
shall be certified by an authorised signatory of the relevant Notifying Party as fairly representing its financial condition as at the date as at which those financial statements were drawn
up; and
|
|
(b) |
shall be prepared in accordance with GAAP.
|
52.3 |
Information The
Charterers shall supply to the Owners:
|
|
(a) |
promptly upon becoming aware of them, details of any material litigation, arbitration or administrative proceedings which are current, threatened or pending against the Charterers, and
which, if adversely determined, are reasonably likely to have a Material Adverse Effect; and
|
|
(b) |
promptly, such further information regarding the financial condition, business and operations of the Charterers as the Owners may reasonably request.
|
52.4 |
Maintenance of legal validity The Charterers shall comply with the terms of and do all that is necessary to maintain in full force and effect all Necessary Authorisations required in or by the laws and regulations of its jurisdiction of formation or
incorporation and all other applicable jurisdictions, to enable it lawfully to enter into and perform its obligations under the Transaction Documents and to ensure the legality, validity, enforceability or admissibility in evidence of
the Transaction Documents in its jurisdiction of incorporation or formation and all other applicable jurisdictions.
|
52.5 |
Notification of Potential Termination Event The Charterers shall promptly, upon becoming aware of the same, inform the Owners in writing of the occurrence of any Termination Event or Potential Termination Event (and the steps, if any, being taken to
remedy this) and, upon receipt of a written request to that effect from the Owners, confirm to the Owners that, save as previously notified to the Owners or as notified in such confirmation, no Termination Event or Potential Termination
Event is continuing or if a Termination Event or Potential Termination Event is continuing specifying the steps, if any, being taken to remedy it.
|
52.6 |
Claims pari passu The
Charterers shall ensure that at all times the claims of the Owners against it under the Transaction Documents rank at least pani passu with the claims of
all its other unsecured and subordinated creditors save those whose claims are preferred by any bankruptcy, insolvency, liquidation, winding-up or other similar laws of general application.
|
52.7 |
Necessary Authorisations Without
prejudice to any specific provision of the Transaction Documents relating to a Necessary Authorisation, the Charterers shall (i) obtain, comply with and do all that is necessary to maintain in full force and effect all Necessary
Authorisations if a
|
52.8 |
Compliance with applicable laws The Charterers shall comply with all applicable laws, including Environmental Laws, to which it may be subject (except as regards Restricted Parties to which paragraph 52.9 below applies, and anti-corruption and anti-bribery laws
to which paragraph 52.10 below applies) if a failure to do the same may have a Material Adverse Effect.
|
52.9 |
No dealings with Restricted Parties The Charterers shall not, and shall not permit or authorise any other person to, directly or indirectly, utilise or employ the Vessel or to use, lend, make payments of, contribute or otherwise make available,
all or any part of the proceeds of any transaction(s) contemplated by the Transaction Documents to fund any trade, business or other activities:
|
|
(a) |
involving or for the benefit of any Restricted Party; and
|
|
(b) |
in any other manner that would reasonably be expected to result in any Obligor or the Owners or any Finance Party (if applicable) being in breach of any Sanctions or become a Restricted
Party.
|
52.10 |
Anti-corruption and anti-bribery laws The Charterers shall conduct its business in compliance with applicable anti-corruption and anti-bribery laws.
|
52.11 |
Environmental compliance
|
|
(a) |
comply with any Environmental Law;
|
|
(b) |
obtain, maintain and ensure compliance with all requisite Environmental Approvals; and
|
|
(c) |
implement procedures to monitor compliance with and to prevent liability under any Environmental Law,
|
52.12 |
Environmental Claims The
Charterers shall, promptly upon becoming aware of the same, inform the Owners in writing of:
|
|
(i) |
any Environmental Claim against the Charterers which is current or pending; and
|
|
(ii) |
any facts or circumstances which are reasonably likely to result in any Environmental Claim being commenced or threatened against the Charterers,
|
52.13 |
Taxation
|
|
(a) |
The Charterers shall pay and discharge any Tax imposed upon it or its assets within the time period allowed without incurring penalties unless and only to the extent that:
|
|
(i) |
such payment is being contested in good faith;
|
|
(ii) |
adequate reserves are being maintained for such Tax and the costs required to contest them have been disclosed in its latest financial statements; and
|
|
(iii) |
such payment can be lawfully withheld and failure to pay such Tax does not have or is not reasonably likely to have a Material Adverse Effect.
|
|
(b) |
No Obligor may change its residence for Tax purposes.
|
52.14 |
Further assurance The
Charterers shall, at their own expense, promptly take all such action as the Owners may reasonably require for the purpose of perfecting or protecting any of the Owner’s rights with respect to the security created or evidenced (or
intended to be created or evidenced) by the Security Documents.
|
52.15 |
Other information The
Charterers will promptly supply to the Owners such financial information and explanations as the Owners may from time to time reasonably require in connection with the Charterers.
|
52.16 |
Inspection of records The
Charterers will permit the inspection of their financial records and accounts relating to the Transaction Documents on reasonable notice from time to time during business hours by the Owners or its nominee.
|
52.17 |
Merger and demerger The
Charterers shall not enter into any amalgamation, merger, demerger or corporate restructuring without the prior written consent of the Owners (such consent not to be unreasonably withheld or delayed).
|
52.18 |
Transfer of assets The
Charterers shall not, sell or transfer any of its material assets other than:
|
|
(a) |
on arm’s length terms to third parties where the net proceeds of sale are used as a prepayment hereunder; or
|
|
(b) |
on arm’s length terms to its Affiliates, which are and remain members of the Charter Group.
|
52.19 |
Change of business The
Charterers shall not, without the prior written consent of the Owners, make any substantial change to the general nature of their shipping business from that carried on at the date of this Charter.
|
52.20 |
“Know your customer” checks If:
|
|
(a) |
the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Charter;
|
|
(b) |
any change in the status of the Charterers after the date of this Charter; or
|
|
(c) |
a proposed assignment or transfer by Owners of any of its rights and obligations under this Charter,
|
52.21 |
Management of the Vessel The
Charterers shall ensure that:
|
|
(a) |
the Vessel is at all times technically and commercially managed by an Approved Manager;
|
|
(b) |
unless (A) the Charterers have promptly informed the Owners in writing of any proposed change of an Approved Manager, and (B) the Owners have granted its prior written consent (which shall
not be unreasonably withheld or delayed) to such proposed change, the Approved Manager shall not be changed to another entity; and
|
|
(c) |
the Approved Managers will provide a written confirmation confirming that, among other things, following the occurrence of Termination Event which is continuing, all claims of the Approved
Managers against the Charterers shall be subordinated to the claims of the Owners or the Finance Parties (if applicable) under the Transaction Documents.
|
52.22 |
Classification The
Charterers shall ensure that the Vessel maintains the highest classification required for the purpose of the relevant trade of the Vessel which shall be with the Vessel’s Classification Society, in each case, free from any material
overdue recommendations and adverse notations affecting that the Vessel’s class.
|
52.23 |
Certificate of financial responsibility The Charterers shall, if required, obtain and maintain a certificate of financial responsibility in relation to the Vessel which is to call at the United States of America.
|
52.24 |
Registration The
Charterers shall not change or permit a change to the flag of the Vessel during the duration of this Charter other than to a Pre-Approved Flag, such approval not to be unreasonably withheld or delayed. Any change to the flag of the
Vessel shall be at the cost of the Charterers (which shall include any costs of the Finance Parties (if applicable).
|
52.25 |
ISM, ISPS and Maritime Labour Convention Compliance The Charterers shall ensure that each ISM Company and ISPS Company complies in all material respects with the ISM Code and the ISPS Code, respectively, or any replacements thereof and in particular (without
prejudice to the generality of the foregoing) shall ensure that such company holds (i) a valid and current Document of Compliance issued pursuant to the ISM Code, (ii) a valid and current SMC issued in respect of the Vessel pursuant to
the ISM Code, and (iii) an ISSC in respect of the Vessel, and the Charterers shall promptly, upon request, supply the Owners with copies of the same. The Charterers shall at all time comply with the Maritime Labour Convention.
|
52.26 |
Chartering-in The
Charterers shall not, during the duration of this Charter, without the prior written consent of the Owners, take any vessel on charter or other contract of employment (or agree to do so) except for vessels chartered in by the Charterers
on a temporary basis to be provided to any Sub-charterer in order to fulfil its obligations under the relevant Sub-charter (in circumstances where the Vessel is not available for whatever reason).
|
52.27 |
Change of control The
Charterers shall ensure that during the duration of the Charter Period, no Change of Control shall occur without the prior written consent of the Owners (which shall not be unreasonably withheld or delayed).
|
52.28 |
Inspection of Vessel and inspection reports In the absence of a Termination Event, subject to there being no undue interference with the operation of the Vessel:
|
|
(a) |
the Owners may at the Charterers’ cost arrange for persons appointed by the Owners to board the Vessel once in each calendar year during the Charter Period to inspect the Vessel’s state and
condition, and the Charterers will provide commercially reasonable assistance to facilitate such inspection; and
|
|
(b) |
the Charterers shall, within five (5) Business Days’ of the Owners’ written demand, reimburse the Owners for all costs, fees and expenses reasonably incurred by the Owners in connection
with the Owners’ procuring or arranging the procurement of the relevant inspection report as to the condition of the Vessel, provided always however that if a Termination Event has occurred and is continuing, the Owners may at any time
and at the Charterers’ cost conduct such inspection and the Charterers shall be deemed to have granted such permission and shall provide such necessary assistance to the Owners in respect of such inspection.
|
52.29 |
Sub-charterers The
Charterers will, where applicable, use best endeavours and forthwith execute and deliver any and all such other agreements, instruments and documents (including any novation agreement) as may be required by law or deemed necessary or
desirable by the Owners to ensure that any Sub-Charter which is in effect on the Actual Delivery Date remains
|
52.30 |
Valuation of Market Value
|
|
(a) |
The Charterers shall procure valuation of the Market Value of the Vessel to be made (and procure the delivery to the Owners of the Valuation Reports issued by the Approved Brokers): (i)
within thirty (30) days prior to the Actual Delivery Date, (ii) once every twelve (12) months during the Charter Period (each such Valuation Report to be at the Charterers’ cost); and (ii) at such other times as the Owners may require in
their absolute discretion (each such additional Valuation Reports to be at Owners’ cost unless a Termination Event has occurred and is continuing following which such additional Valuation Reports shall be at the cost of the Charterers).
|
|
(b) |
The Market Value of the Vessel shall be the arithmetic average of desk-top valuations obtained from two (2) Approved Brokers with one selected by the Charterers and the other selected by
the Owners prior to the Actual Delivery Date and from one Approved Broker acceptable to the Owners during the Agreement Term (in each such case the Approved Brokers shall be acceptable to the Owners and the expenses of both appointments
shall be borne by the Charterers). Each such valuation shall take into account the benefit of this Charter and any Sub-charter (dated no earlier than 30 days from the relevant date) on the basis of a willing buyer and a willing seller at
arm’s length.
|
|
(c) |
If valuation is obtained in accordance with this Clause and the Market Value of the Vessel is less than (i) the Cost Balance for the first 2 years and (ii) 120% of the Purchase Option Price
pro rata adjusted for the period after 2 years, of (x) the Cost Balance for the first 2 years after the Actual Delivery Date or (y) the Purchase Option Price for the remainder of the Agreement Term (the “Required
LTV Ratio”), the Charterers shall, within 5 days of the issuance of the Valuation Reports (or, if the two Valuation Reports are not issued on the same day, the date of the later Valuation Report), prepay to the Owners in an
amount equal to the shortfall as may be necessary to ensure that the Ratio does not exceed the Required LTV Ratio.
|
|
(d) |
After the prepayment referred to above is completed, the following Fixed Hire, Purchase Option Prices, Cost Balance and Balloon Amount shall be adjusted downwards in the same proportion as
the above proportion of the prepayment.
|
52.31 |
Sub-Charter Apart from
the Initial Sub-Charter, the Charterers shall procure that there shall be no Sub-charter (including but not limited to on a bareboat basis) of the Vessel without the consent of the Owners, such consent not to be unreasonably withheld
save that (and subject to the foregoing) any sub-chartering contract of less than twenty four (24) months (including optional extension periods) not made on a bareboat charter basis shall not require the consent of the Owners and
further provided that, (i) the Charterers shall use all reasonable endeavours to procure (if required) the consent of the Sub-Charterer to the assignment of any Sub-Charter to the Owners, upon obtaining which (if the same is required)
the Charterers shall so assign that contract to the Owners by way of security for the Charterers’ obligations under this Charter; and (ii) all sub-chartering documentation is promptly provided to the Owners, for its information.
|
52.32 |
Transactions with Affiliates The Charterers shall procure that all transactions conducted or to be conducted between them and any of the Obligors or any of that Obligor’s Affiliates will be on an arm’s length commercial basis.
|
52.33 |
Notification The
Charterers shall notify the Owners promptly after they become aware of the expiry or early termination of the Sub-Charter.
|
52.34 |
Project Documents
|
|
(a) |
The Charterers shall:
|
|
(i) |
without affecting its obligations under the applicable provisions of the Transaction Documents, perform and observe its obligations under the Project Documents and use its best endeavours
to procure that each of the other parties to the Project Documents performs and observes its obligations under them; and
|
|
(ii) |
obtain and maintain in force, and promptly furnish certified copies to the Owners of, all licences, authorisations, approvals and consents, and do all other acts and things, which may from
time to time be necessary or desirable for the continued due performance of its obligations under the Transaction Documents and the Project Documents or which may be required for the validity, enforceability or admissibility in evidence
of the Transaction Documents and the Project Documents;
|
|
(b) |
The Charterers shall not, without the prior consent of the Owners:
|
|
(i) |
except as contemplated by this Charter, sell or agree to sell the Vessel (including a sale of the Vessel during her construction by way of an assignment, novation or other transfer of the
Building Contract) or convey, assign, transfer, sell or otherwise dispose of or deal with any of its other real or personal property, assets or rights, whether present or future, in connection with the Vessel;
|
|
(ii) |
waive or fail to enforce any provision of, or agree to any amendment or supplement to, the Building Contract, save to the extent expressly permitted by the terms of any Transaction
Document.
|
53. |
EARNINGS ACCOUNT
|
54. |
TERMINATION EVENTS
|
54.1 |
Each of the following events shall constitute a Termination Event:
|
|
(a) |
Failure to pay any
Obligor fails to pay any amount due from it under any Transaction Document to which they are parties at the time, in the currency and otherwise in the manner specified therein provided that, if an Obligor can demonstrate to the
reasonable satisfaction of the Owners that all necessary instructions were given to effect such payment and the non-receipt thereof is attributable solely to an administrative or technical error or an error in the banking system or a
Disruption Event, then such payment shall instead be deemed to be due, solely for the purposes of this paragraph, within five (5) Business Days of the date on which it actually fell due under this Charter (if a payment of Hire) and
seven (7) Business Days (if a sum payable on demand) ; or
|
|
(b) |
Misrepresentation any
representation or statement made by any Obligor in any Transaction Document to which it is a party or in any notice or other document, certificate or statement delivered by it pursuant thereto or in connection therewith is or proves to
have been incorrect or misleading in any material respect, where the circumstances causing the same give rise to a Material Adverse Effect; or
|
|
(c) |
Specific covenants any
Obligor fails duly to perform or comply with any of the obligations expressed to be assumed by or procured by them under paragraphs 52.27, 52.30 and 52.32) of Clause 52 (Charterers’ undertakings) ; or
|
|
(d) |
Other obligations any of
the Obligors fails duly to perform or comply with any of the obligations expressed to be assumed by them in any Transaction Document (other
|
|
(e) |
Cross Default any
Financial Indebtedness of any Obligor is not paid when due (or within any applicable grace period) and payable prior to its specified maturity where the aggregate of all such unpaid or accelerated indebtedness of such Obligor is equal
to or greater than US Dollars Ten Million (US$10,000,000) or its equivalent in any other currency or currencies and such default is not remedied within 45 days after such default; or
|
|
(f) |
Insolvency and rescheduling any of the Obligors is unable to pay their debts as they fall due, commences negotiations with any one or more of their creditors with a view to the general readjustment or rescheduling of their indebtedness or makes a general
assignment for the benefit of their creditors or a composition with their creditors; or
|
|
(g) |
Winding-up any of the
Obligors files for initiation of formal restructuring proceedings, is wound up or declared bankrupt or take any corporate action or other steps are taken or legal proceedings are started for their winding-up, dissolution, administration
or re-organisation or for the appointment of a liquidator, receiver, administrator, administrative receiver, conservator, custodian, trustee or similar officer of them or of any or all of their revenues or assets or any moratorium is
declared or sought in respect of any of their indebtedness; or
|
|
(h) |
Execution or distress
|
|
(i) |
any Obligor fails to comply with or pays any sum due from them (within 30 days of such amount falling due) under any final judgment or any final order made or given by any court or other
official body of a competent jurisdiction in an aggregate in respect of the Obligor equal to or greater than US Dollars Ten Million (US$10,000,000) or its equivalent in any other currency, being a judgment or order against which there is
no right of appeal or if a right of appeal exists, where the time limit for making such appeal has expired; or
|
|
(ii) |
any execution or distress is levied against, or an encumbrancer takes possession of, the whole or any part of, the property, undertaking or assets of any Obligor in an aggregate amount
equal to or greater than US Dollars Five Million (US$5,000,000) or its equivalent in any other currency or currencies, other than any execution or distress which is being contested in good faith and which is either discharged within 30
days or in respect of which adequate security has been provided within 30 days to the relevant court or other authority to enable the relevant execution or distress to be lifted or released; or
|
|
(i) |
Similar event any event
occurs which, under the laws of any jurisdiction, has a similar or analogous effect to any of those events mentioned in paragraphs (f), (g) or (h) above; or
|
|
(j) |
Repudiation any of the
Obligors repudiates any Transaction Document to which it is a party or do or cause to be done any act or thing evidencing an intention to repudiate any such Transaction Document; or
|
|
(k) |
Validity and admissibility at any time any act, condition or thing required to be done, fulfilled or performed in order:
|
|
(i) |
to enable any of the Obligors lawfully to enter into, exercise their rights under and perform the material obligations expressed to be assumed by them in the Transaction Documents;
|
|
(ii) |
to ensure that the material obligations expressed to be assumed by any of the Obligors in the Transaction Documents are legal, valid and binding;
|
|
(iii) |
to make the Transaction Documents admissible in evidence in any applicable jurisdiction,
|
|
(l) |
Illegality at any time:
|
|
(i) |
it is or becomes unlawful for any of the Obligors to perform or comply with any or all of their obligations under the Transaction Documents to which they are parties;
|
|
(ii) |
any of the obligations of any of the Obligors under the Transaction Documents to which they are parties are not or cease to be legal, valid and binding; or
|
|
(iii) |
any Security Interest created or purported to be created by the Security Documents ceases to be legal, valid, binding, enforceable or effective or is alleged by a party to such Security
Document (other than the Owners) to be ineffective,
|
|
(m) |
Material adverse change at
any time there shall occur any event or change which has a Material Adverse Effect in respect of any of the Obligors and such event or change, if capable of remedy, is not so remedied within thirty (30) days of the delivery of a notice
confirming such event or change by the Owners to the Charterers; or
|
|
(n) |
Conditions precedent if
any of the conditions set out in Clause 40 (Conditions precedent) is not satisfied by the relevant time or such other time period specified by the Owners in
their discretion; or
|
|
(o) |
Revocation or modification of consents etc. if any Necessary Authorisation which is now or which at any time during the Agreement Term becomes necessary to enable an Obligor to comply with any of its obligations in or pursuant to any of the Transaction
Documents or the Project Documents is revoked, withdrawn or withheld, or modified in a manner which the Owners reasonably consider is, or may be, prejudicial to the interests of Owners in a material manner, or if such Necessary
Authorisation ceases to remain in full force and effect and not remedied with 20 days; or
|
|
(p) |
Cessation of business any
of the Obligors ceases, or threatens to cease, to carry on all or a substantial part of its business; or
|
|
(q) |
Curtailment of business if
the business of any of the Obligors is wholly or materially curtailed by any intervention by or under authority of any government, or if all or a substantial part of the undertaking, property or assets of the Obligor is seized,
nationalised, expropriated or compulsorily acquired by or under authority of any government or any of the Obligors disposes or threatens to dispose of a substantial part of their business or assets; or
|
|
(r) |
Reduction of capital if
any of the Obligors reduces their committed or subscribed capital other than in the course of regular finance or business activity; or
|
|
(s) |
Environmental matters
|
|
(i) |
any Environmental Claim is pending or made against any Obligors or in connection with the Vessel, where such Environmental Claim has a Material Adverse Effect;
|
|
(ii) |
any actual Environmental Incident occurs in connection with the Vessel, where such Environmental Incident has a Material Adverse Effect; or
|
|
(t) |
Loss of property all or
a substantial part of the business or assets of any of the Obligors is destroyed, abandoned, seized, appropriated or forfeited for any reason, and such occurrence in the reasonable opinion of the Owners has a Material Adverse Effect; or
|
|
(u) |
Sanctions any Obligor or
any of their directors, officers or employees becomes a Restricted Party and no remedy is available within 60 days or any Sanctions are enacted against the Vessel; or
|
|
(v) |
Arrest the Vessel is
arrested or seized for any reason whatsoever (other than caused solely and directly by any action or omission from the Owners) unless the Vessel is released and returned to the possession of the Charterers within forty five (45) days of
such arrest or seizure; or
|
|
(w) |
Delivery the Vessel has
not for any reason been delivered to, and accepted by, the Owners under the Novated Building Contract on or before the Cancellation Date;
|
|
(x) |
Collateral Charter a
“Termination Event” (or any other similar event or circumstance and each as however described) occurs under the Collateral Charter.
|
54.2 |
The Owners and the Charterers agree that it is a fundamental term and condition of this Charter that no Termination Event shall occur during the Agreement Term. Without prejudice to the
forgoing, a Termination Event which is continuing shall constitute an agreed terminating event, the occurrence of which will entitle the Owners to exercise all or any of the remedies set out below in this Clause 54.
|
54.3 |
At any time after occurrence of a Termination Event, the Owners shall be entitled to terminate the Charter forthwith by giving a written notice to the Charterers demanding the Charterers
(a) to redeliver the Vessel to Owners and (b) pay the Termination Sum to the Owners in accordance with Clause 54(f) below, within sixty (60) days following the date of the notice (“Termination Notice”).
Once the Termination Notice is sent to the Charterers, the Owners shall be entitled to (but not bound and without prejudice to the Charterers’ obligations hereunder) retake possession of the Vessel immediately on the date of the
Termination Notice or any other date as specified by the Owners and the Charterers shall, within sixty (60) days following the date of Termination Notice, pay the Termination Sum to the Owners in accordance with Clause 54(f) below. If the
Termination Date is not a Payment Date, the Fixed Hire payable, calculated on a pro rata basis between the immediately previous Payment Date and on the immediately following Payment Date shall become immediately due and payable on the
Termination Date. In case the Charterers fail to pay the Termination Sum in full within sixty (60) following the date of the Termination Notice the Owners shall be entitled to exercise the remedies as provided in Clause 54(i).
|
54.4 |
The Owners may demand that the Charterers pay to the Owners on the Termination Payment Date or such later date as the Owners shall specify (and without prejudice to any other rights, claims
or remedies which the Owners may have under this Charter and applicable laws) the Termination Sum. If the Termination Sum paid by the Charterers under this Charter does not cover the Owners’ loss, the Owners shall be entitled to claim
further compensation for their losses and for all reasonable expenses incurred together with any interest accrued thereon. The Owners shall not be under any liability whatsoever to the Charterers for loss or damage if any occasioned by
the Charterers for the termination of this Charter unless such termination is wrongful.
|
54.5 |
The Charterers shall pay or reimburse to the Owners on demand all losses suffered by the Owners in connection with such Termination Event and/or termination including, without prejudice to
the generality of the foregoing, all liabilities, reasonable costs and expenses so incurred in recovering possession of, and in moving, storing, insuring and maintaining, the Vessel and in carrying out any works or modifications required
to cause the Vessel to conform with the provisions of Clause 47 in respect of redelivery under this Charter together with interest thereon from the date on which the relevant loss was suffered by the Owners until the date of payment or
reimbursement thereof (both before and after any relevant judgment or winding up of the Charterers) pursuant to this Clause 51.
|
54.6 |
Upon receipt of the Termination Notice from the Owners, the Charterers have the obligation to pay the Termination Sum (together with interest at the default rate in accordance with Clause
44.3(j)) for purchasing the Vessel from the Owners within 60 days. Upon receipt of full amount of the Termination Sum, by the Charterers, the Owners will transfer to the Charterers or its nominee all of the Owners’ rights, title and
interests in the Vessel on “as is-where is” basis and shall discharge the mortgage as may be created over the Vessel. The Charterers shall not be entitled for any reason whatsoever to claim against the Owners for any losses, or any loss
of profit resulting directly or indirectly from any defect or alleged defect in the Vessel. All registration, legal or other expenses whatsoever incurred in respect of the transfer of the title in the Vessel from the Owners to the
Charterers or its nominee shall be for the account of the Charterers.
|
54.7 |
Any amount due to the Owners under this Clause shall bear interest (before and after any relevant judgment or any winding-up of the Charterers) from the Termination Date to the date of the
Owners’ actual receipt thereof.
|
54.8 |
Notwithstanding the termination of this Charter pursuant to this Clause, the Charterers shall irrevocably and unconditionally continue to comply with its obligations under this Charter
until the Owners have received the Termination Sum and other sum payable by the Charterers to the Owners pursuant to this Charter.
|
54.9 |
If the Charterers fail to pay in full the Termination Sum and other sums payable under this Charter upon the Owners’ demand for payment pursuant to this Clause 54 within sixty (60) days
following the date of the Termination Notice, the Parties shall first obtain three valuation reports from three independent Approved Valuers (each party appoint one Approved Valuers and the third one to be appointed by the parties
jointly)
|
|
(a) |
if the average of the three assessment of the Fair Market Value of the Vessel at that time is no less than the Termination Sum, Owners shall then proceed to sell the Vessel without delay in
the open market appointing as sales brokers, among other parties, at least one of the 3 independent Approved Valuers, free of any charter, lease or other engagement concerning the Vessel for such price and on such terms and conditions as
it may, in its absolute discretion, think fit, but in any event within the price ranges provided by the Approved Valuers; or Charterers shall have the right to bring forward a buyer during the time that Owners are circulating the Vessel
for sale and in case terms are better, including without limitation, than the sale price, Owner’s shall sell to the party brought forward by Charterers.
|
|
(b) |
if the average of the three assessments of the Fair Market Value of the Vessel at that time is less than the Termination Sum, then the Owners may, at any time they think fit in its absolute
discretion, sell the Vessel in the open market . In any event, the Owners shall, as soon as practicable following the Termination Payment Date, obtain three valuation reports from three independent Approved Valuers of the Fair Market
Value of the Vessel and the average of the three report values shall be deducted from the Termination Sum.
|
|
(c) |
where the Owners elect to sell the Vessel in accordance with Clause 54(i) above, an amount equal to the aggregate of the expenses, disbursements, taxes, costs and losses whatsoever as may
have been incurred by the Owners in respect of the sale of
|
|
(d) |
an amount equal to the Termination Sum plus all other amounts due and payable from the Charterers to the Owners hereunder, shall be deducted from the Net Sale Proceeds or the Fair Market
Value, as the case maybe. If the Net Sale Proceeds or the Fair Market Value, as the case maybe, are insufficient to satisfy all amounts due and payable from the Charterers to the Owners hereunder, the Charterers shall pay the outstanding
balance to the Owners. If there is any amount remaining from the Net Sale Proceeds or the Fair Market Value after the deduction of all the amounts due and payable by the Charterers to the Owners hereunder, the Owners shall pay the
difference to the Charterers provided that if the Fair Market Value of the Vessel has been deducted from the Termination Sum in accordance with Clause 54(i)(d) the Owners shall be entitled to any surplus following a subsequent sale of the
Vessel.
|
54.10 |
Where the Owners intends to sell the Vessel in accordance with Clause 54.9 above, Owners shall notify the Charterers in writing of the potential sale and the potential sale price of the
Vessel (the “Proposed Owners’ Sale Price”) whereupon the Charterers (or their nominee) may, within 15 days of such notification, purchase the Vessel and pay an amount which is higher than the
Proposed Owners’ Sale Price where the Owners intend to sell the Collateral Vessel at the same time as the Vessel, the Owners shall notifying the Charterers thereof in writing of the potential sale whereupon the Charterers (or their
nominee) may, within 15 days of such notification, purchase both the Vessel and the Collateral Vessel and pay an amount which is at least equal to the aggregate of the Termination Sum and the Termination Sum (as defined in the Collateral
Charter). If the Charterers notify the Owners that they do not intend to purchase the Vessel or the Charterers do not respond to the Owners within 5 days’ period or the MOA has not been agreed by the Owners and the Charterers’ or their
nominee or the deposit has not been remitted the nominated account under the MOA within such 10 days’ period (or such longer period as the Owners may agree), the Owners may sell the Vessel on such terms as the Owners may deem fit.
|
54.11 |
Liquidated damages received under the Building Contract
|
|
(a) |
any liquidated damages received by the Charterers or the Owners for:
|
|
(i) |
any delays in delivery of the Vessel under the Building Contract shall be for Charterers account; and
|
|
(ii) |
any physical defects or deficiencies of the Vessel under the Building Contract shall accrue to the account of the Charterers.
|
54.12 |
Where the Owners decide to terminate this Charter and retake possession of the Vessel pursuant to this Clause 54, the Owners agree to appoint a reputable ship manager to oversee the
operation of the Vessel while it is in the Owners’ possession in accordance with prudent and sound commercial ship practices.
|
55. |
[NOT USED]
|
56. |
NAME OF VESSEL
|
56.1 |
the name of the Vessel may be chosen by the Charterers; and
|
56.2 |
the Vessel may be painted in the colours, display the funnel insignia and fly the house flag as required by the Charterers.
|
57. |
CHARTER PERIOD
|
58. |
TRANSACTION FEES
|
58.1 |
Commitment fee
|
58.2 |
Handling fee
|
|
(a) |
US$100,000, receipt of which the Owners hereby acknowledge;
|
|
(b) |
US$201,000 to be paid within five (5) Business Days of the date of this Charter; and
|
|
(c) |
US$301,000 to be paid on the earlier of the date of Early Termination due to the enactment of the Pre-delivery Sales Clause and the Actual Delivery Date.
|
59. |
EARLY TERMINATION, PURCHASE OPTION, PURCHASE OBLIGATION AND TRANSFER OF TITLE, PARTIAL PREPAYMENT
|
59.1 |
Subject to no Termination Events or Total Loss under Clause 61 (Total loss), the Charterers may, at any time from the Actual Delivery Date, by at
least 90 days prior written notice to the Owners, declare to the Owners their exercise of the option to purchase the Vessel or to cause their nominee to purchase the Vessel by payment of (i) at any time prior to the second anniversary of
the Actual Delivery Date, an amount equal to the Termination Sum as at that date together with a pre-payment fee equal to five (5) per cent of the Assumed Owners’ Cost plus the Sales Clause Termination Sum or (ii) at any time after the
second anniversary of the Actual Delivery Date, the corresponding amount equal to the Purchase Option Price as set out under Schedule 4 or if the purchase option is exercised on a date which is not an anniversary date of the Actual
Delivery Date, then the Purchase Option Price shall be the sum of the applicable Purchase Option Price from the last occurring anniversary date added to the product of n/365 (where n is the number of days elapsed since the last
anniversary date to the proposed Purchase Option Date) and the positive difference between the Purchase Option Price on the next occurring anniversary date after the Purchase Option Date and the Purchase Option Price on the last
anniversary date.. To avoid any confusion, the Charter Period will end immediately upon the Purchase Option Price having been paid.
|
59.2 |
If the Charterers have not exercised their rights under paragraph 59.1, the Charterers shall be obliged to purchase the Vessel or to cause their nominee to purchase the Vessel at the end of
the Charter Period by payment of the Purchase Obligation Price and the Charterers shall pay the Purchase Obligation Price on the Purchase Obligation Date unless this Charter is terminated before the natural expiration of this Charter or
the Owners and the Charterers agree otherwise.
|
59.3 |
In exchange for the full payment of the Purchase Option Price (in the case of a purchase under paragraph 59.1 above) or the sum stated in paragraph 59.2 above (in the case of a purchase
under paragraph 59.2 above) and all sums due and payable to the Owners under the Transaction Documents and subject to compliance with the other conditions set out in this Clause, the Owners shall:
|
|
(a) |
transfer title to and ownership of the Vessel to the Charterers (or their nominee) by delivering to the Charterers (in each case at the Charterers’ costs):
|
|
(i) |
a duly executed and notarised, legalised and/or apostilled (as applicable) bill of sale; and
|
|
(ii) |
the Title Transfer PDA; and
|
|
(b) |
(subject to the prior written consent of any Finance Party or its agent or permitted assigns and transferees (in each case as applicable)) use all reasonable endeavours to procure the
deletion of any mortgage or prior Security Interest in relation to the Vessel at the Charterers’ cost,
|
59.4 |
The transfer in accordance with paragraph 59.3 above shall be made in all respects at the Charterers’ expense on an “as is, where is” basis and the Owners shall give the Charterers (or
their nominee) no representations, warranties, agreements or guarantees whatsoever concerning or in connection with the Vessel, the Insurances, the Vessel’s condition, state or class or anything related to the Vessel, expressed or
implied, statutory or otherwise.
|
59.5 |
The Owners shall have no responsibility for the registrability of a bill of sale referred to in paragraph 59.3 above executed by the Owners, as far as such bill of sale is prescribed in a
generally acceptable form.
|
59.6 |
The Charterers shall, immediately prior to the receipt of the bill of sale, furnish the Owners with a letter of indemnity (in a form satisfactory to the Owners) whereby the Charterers and
the Charter Guarantor shall state that, among other things, the Owners has and will have no interest, concern or connection with the Vessel after the date of such letter and that the Charterers and/or the Charter Guarantor shall indemnify
the Owners and keep the Owners indemnified forever against any claims made by any person arising in connection with the Vessel.
|
|
(a) |
upon at least ninety (90) days’ written notice, the Charterers should have the option for one time only to make a one-off prepayment of up to $3m (in multiples of $1m); and
|
|
(b) |
any partial prepayment should follow the following mechanism.
|
|
(i) |
If the partial prepayment is to be exercised on a date falling before the 2nd anniversary of the Delivery Date, then the proportion of the partial prepayment is equal to the amount of the
prepayment divided by USD29,000,000.
|
|
(ii) |
If the partial prepayment is to be exercised on a date falling after the 2nd anniversary of the Delivery Date, then the proportion of the partial prepayment is equal to the amount of the
prepayment divided by the Purchase Option Price on that date.
|
|
(iii) |
After the partial prepayment is completed, the following Fixed Hire, Cost Balance, Purchase Option Prices and Balloon Amount should be adjusted downwards in the same proportion as the above
proportion of the partial prepayment.
|
60. |
PRE-DELIVERY SALES CLAUSE
|
60.1 |
For the period starting from the signing of this charter and ending on the actual Delivery Date, the Charterers have the right to sell the Vessel and terminate the Charter provided that a
written notice is provided by the Charterers to the Owners at least 90 days prior to the Delivery Date and an amount equal to the Termination Sum as at that date together with a pre-payment fee equal to three (3) percent of the Assumed
Owners’ Cost plus the Sales Clause Termination Sum.
|
60.2 |
At any time, throughout the period of this charter, the Corporate Guarantor may acquire the beneficial ownership the Charterer.
|
61. |
TOTAL LOSS
|
61.1 |
If circumstances exist giving rise to a Total Loss, the Charterers shall promptly notify the Owners of the facts of such Total Loss. If the Charterers wish to proceed on the basis of a
Total Loss and advise the Owners thereof, the Owners shall agree to the Vessel being treated as a Total Loss for all purposes of this Charter. The Owners shall thereupon abandon the Vessel to the Charterers and/or execute such documents
as may be required to enable the Charterers to abandon the Vessel to insurers and claim a Total Loss. Without prejudice to the obligations of the Charterers to pay to the Owners all monies then due or thereafter to become due under this
Charter, if the Vessel shall become a Total Loss during the Charter Period, the Charter Period shall end on the Settlement Date.
|
61.2 |
If the Vessel becomes a Total Loss during the Charter Period, the Charterers shall, on the Settlement Date, pay to the Owners the amount calculated in accordance with paragraph 61.3 below.
|
61.3 |
On the Settlement Date, the Charterers shall pay to the Owners an amount equal to the Pre-delivery Termination Sum or the Termination Sum as at the Termination Payment Date (provided that
such amount payable shall be set off against the Total Loss Proceeds if they are already received by the Owners as referred to under paragraph 61.4 below). The foregoing obligations of the Charterers under this paragraph 61.3 shall apply
regardless of whether or not any moneys are payable under any Insurances in respect of the Vessel, regardless of the amount payable thereunder, regardless of the cause of the Total Loss and regardless of whether or not any of the said
compensation shall become payable.
|
61.4 |
All Total Loss Proceeds shall be paid to such account or accounts as the Owners may direct and shall be applied towards satisfaction of the Termination Sum and any other sums due and
payable under the Transaction Documents. To the extent that there is any surplus after such application, such surplus shall be promptly returned to the Charterers.
|
61.5 |
The Charterers shall, at the Owners’ request, provide satisfactory evidence, in the reasonable opinion of the Owners, as to the date on which the constructive total loss of the Vessel
occurred pursuant to the definition of Total Loss.
|
61.6 |
The Charterers shall continue to pay the Advance Hire and the Hire on the days and in the amounts required under this Charter notwithstanding that the Vessel shall become a Total Loss provided always that no further instalments of Hire or the payments of the Advance Hire shall
|
62. |
ADDITIONAL PAYMENT OBLIGATIONS
|
62.1 |
Subject always to paragraph 62.2, the Charterers shall bear all costs, fees (including legal fees) and disbursements reasonably incurred by the Owners and the Charterers in connection with:
|
|
(a) |
the negotiation, preparation and execution of this Charter and the other Transaction Documents;
|
|
(b) |
the delivery of the Vessel under the Novation Agreement and this Charter;
|
|
(c) |
preparation or procurement of any survey, inspections, tax or insurance advice;
|
|
(d) |
all legal fees and other expenses reasonably arising out of or in connection with the exercising of the purchase option by the Charterers pursuant to Clause 59 (Purchase Option and Title Transfer) of this Charter; and
|
|
(e) |
such other activities relevant to the transaction contemplated herein.
|
62.2 |
Notwithstanding anything to the contrary, the Charterers shall not bear any costs, fees (including legal fees) and disbursements incurred by the Owners in connection with:
|
|
(a) |
any financing activities undertaken by the Owners, whether or not such financing activities are undertaken for the purposes of entering into this Charter, the Novation Agreement or any of
the Transaction Documents; and
|
|
(b) |
the incorporation, setting-up or continued operation of any special purpose vehicles or legal entities for the purposes of or in relation to this Charter, the Novation Agreement or any of
the Transaction Documents.
|
63. |
STAMP DUTIES AND TAXES
|
64. |
OPERATIONAL NOTIFIABLE EVENTS
|
|
(a) |
when a material condition of class is applied by the Classification Society;
|
|
(b) |
whenever the Vessel is arrested, confiscated, seized, requisitioned, impounded, forfeited or detained by any government or other competent authorities or any other persons;
|
|
(c) |
whenever a class or flag authority refuses to issue or withdraw trading certification;
|
|
(d) |
in the event of a fire requiring the use of fixed fire systems or collision / grounding;
|
|
(e) |
whenever the Vessel is planned for dry-docking in accordance with Clause 10(g) (Part II) and whether routine or emergency;
|
|
(f) |
the Vessel is taken under tow unless in the normal course of shipping operations;
|
|
(g) |
any death or serious injury on board; or
|
|
(h) |
any damage to the Vessel the repair costs of which (whether before or after adjudication) are likely to exceed US Dollars Three Million (US$3,000,000).
|
65. |
FURTHER INDEMNITIES
|
65.1 |
Whether or not any of the transactions contemplated hereby are consummated, the Charterers shall, in addition to the provisions under Clause 17 (Indemnity)
(Part II) of this Charter, indemnify, protect, defend and hold harmless the Owners and their respective officers, directors and employees (collectively, the “Indemnitees”) throughout the Agreement
Term from, against and in respect of, any and all liabilities, obligations, losses, damages, penalties, fines, fees, claims, actions, proceedings, judgement, order or other sanction, lien, salvage, general average, suits, costs, expenses
and disbursements, including reasonable legal fees and expenses, of whatsoever kind and nature (collectively, the “Expenses”), imposed on, suffered or incurred by or asserted against any Indemnitee,
in any way relating to, resulting from or arising out of or in connection with, in each case, directly or indirectly, any one or more of the following:
|
|
(a) |
this Charter, any of the other Transaction Documents and the Project Documents, and any amendment, supplement or modification thereof or thereto requested by the Charterers;
|
|
(b) |
the Vessel or any part thereof, including with respect to:
|
|
(i) |
the ownership of, manufacture, design, possession, use or non-use, operation, maintenance, testing, repair, overhaul, condition, alteration, modification, addition, improvement, storage,
seaworthiness, replacement, repair of the Vessel or any part (including, in each case, latent or other defects, whether or not discoverable and any claim for patent, trademark, or copyright infringement and all liabilities, obligations,
losses, damages and claims in any way relating to or arising out of spillage of cargo or fuel, out of injury to persons, properties or the environment or strict liability in tort);
|
|
(ii) |
any claim or penalty arising out of violations of applicable law by the Charterers or any other Sub-charterers;
|
|
(iii) |
death or property damage of shippers or others;
|
|
(iv) |
any liens in respect of the Vessel or any part thereof; or
|
|
(v) |
any registration and/or tonnage fees (whether periodic or not) in respect of the Vessel payable to any registry of ships;
|
|
(c) |
any breach of or failure to perform or observe, or any other non-compliance with, any covenant or agreement or other obligation to be performed by the Charterers under any Transaction
Document to which it is a party or the falsity of any representation or warranty of the Charterers in any Transaction Document to which it is a party or the occurrence of any Termination Event;
|
|
(d) |
in preventing or attempting to prevent the arrest, confiscation, seizure, taking and execution, requisition, impounding, forfeiture or detention of the Vessel, or in securing or attempting
to secure the release of the Vessel in connection with the exercise of the rights of a holder of a lien created by the Charterers;
|
|
(e) |
incurred or suffered by the Owners in:
|
|
(i) |
procuring the delivery of the Vessel to the Charterers under Clause 35 (Delivery);
|
|
(ii) |
registering the Vessel at the registry of the Pre-Approved Flag;
|
|
(iii) |
recovering possession of the Vessel following termination of this Charter under Clause 54 (Termination Events);
|
|
(iv) |
arranging for a sale of the Vessel in accordance with Clause 60 (Sale of Vessel by the Owners); or
|
|
(v) |
arranging for a transfer of the title of the Vessel in accordance with paragraph 59.3 of Clause 59 (Purchase Option and transfer of title)
|
|
(f) |
arising from the Master or officers of the Vessel or the Charterers’ agents signing bills of lading or other documents;
|
|
(g) |
in connection with:
|
|
(i) |
the arrest, seizure, taking into custody or other detention by any court or other tribunal or by any governmental entity; or
|
|
(ii) |
subjection to distress by reason of any process, claim, exercise of any rights conferred by a lien or by any other action whatsoever, of the Vessel which are expended, suffered or incurred
as a result of or in connection with any claim or against, or liability of, the Charterers or any other member of the Charterers’ group, together with any costs and expenses or other outgoings which may be paid or incurred by the Owners
in releasing the Vessel from any such arrest, seizure, custody, detention or distress.
|
65.2 |
The Charterers shall pay to the Owners promptly on the Owners’ written demand the amount of all costs and expenses (including legal fees) incurred by the Owners in connection with the
enforcement of, or the preservation of any rights under, any Transaction Document including (without limitation) (i) any losses, costs and expenses which the Owners may from time to time sustain, incur or become liable for by reason of
the Owners being deemed by any court or authority to be an operator, or in any way concerned in the operation, of the Vessel and (ii) collecting and recovering the proceeds of any claim under any of the Insurances.
|
65.3 |
Without prejudice to any right to damages or other claim which either party may, at any time, have against the other hereunder, it is hereby agreed and declared that the indemnities of the
Owners by the Charterers contained in this Charter shall continue in full force and effect for a period of twenty four (24) months after the Agreement Term.
|
66. |
SET-OFF
|
66.1 |
The Owners may set off any matured and/or contingent obligation due from the Charterers under the Transaction Documents (to the extent beneficially owned by the Owners) against any
obligation (whether matured or not) owed by the Owners to the Charterers, regardless of the place of payment or currency of either obligation. If the obligations are in different currencies, the Owners may convert either obligation at a
market rate of exchange in its usual course of business for the purpose of the set-off.
|
66.2 |
The Charterers may not set off any matured and/or contingent obligation due from the Owners under the Transaction Documents (to the extent beneficially owned by the Charterers) against any
obligation (whether matured or not) owed by the Charterers to the Owners, regardless of the place of payment or currency of either obligation.
|
67. |
FURTHER ASSURANCES AND UNDERTAKINGS
|
67.1 |
Each party shall make all applications and execute all other documents and do all other acts and things as may be necessary to implement and to carry out their obligations under, and the
intent of, this Charter.
|
67.2 |
The parties shall act in good faith to each other in respect of any dealings or matters under, or in connection with, this Charter.
|
68. |
CUMULATIVE RIGHTS
|
69. |
DAY COUNT CONVENTION
|
70. |
NO WAIVER
|
71. |
ENTIRE AGREEMENT
|
71.1 |
This Charter contains all the understandings and agreements of whatsoever kind and nature existing between the parties in respect of this Charter, the rights, interests, undertakings
agreements and obligations of the parties to this Charter and shall supersede all previous and contemporaneous negotiations and agreements.
|
71.2 |
This Charter may not be amended, altered or modified except by a written instrument executed by each of the parties to this Charter.
|
72. |
INVALIDITY
|
73. |
ENGLISH LANGUAGE
|
74. |
NO PARTNERSHIP
|
75. |
NOTICES
|
75.1 |
Any notices to be given to the Owners under this Charter shall be sent in writing by registered letter, facsimile or email and addressed to:
|
|
Address: |
18/F, CATIC Tower,
|
|
Fax No.: |
+86 21 5289 5389
|
|
Email: |
chenzhengrong@chinaleasing.net
|
|
Attention: |
Ms. Emily Chen
|
75.2 |
Any notices to be given to the Charterers under this Charter shall be sent in writing by registered letter, facsimile or email and addressed to the Charterers:
|
|
Address: |
1 Vas. Sofias & Meg. Alexandrou, Athens 15124 Greece
|
|
Telephone No.: |
+30 21 081 28 180
|
|
Email: |
atsirikos@topships.org
|
|
Attention: |
Alexandros Tsirikos
|
75.3 |
Any such notice shall be deemed to have reached the party to whom it was addressed, when dispatched and acknowledged received (in case of a facsimile or an email) or when delivered (in case
of a registered letter). A notice or other such communication received on a non-working day or after business hours in the place of receipt shall be deemed to be served on the next following working day in such place
|
76. |
CONFLICTS
|
77. |
SURVIVAL OF CHARTERERS’ OBLIGATIONS
|
78. |
COUNTERPARTS
|
79. |
CONFIDENTIALITY
|
79.1 |
The Parties shall maintain the information provided in connection with the Transaction Documents strictly confidential and agree to disclose to no person other than:
|
|
(a) |
its board of directors, employees (only on a need to know basis), and shareholders, professional advisors and rating agencies;
|
|
(b) |
as may be required to be disclosed under applicable law or stock market or other regulations or for the purpose of legal proceedings;
|
|
(c) |
in the case of the Owners, to any Finance Party or other actual or potential financier providing funding for the acquisition or refinancing of the Vessel;
|
|
(d) |
in the case of the Charterers, to any Sub-charterer in respect of obtaining any consent required under the terms of any Sub-charter; and
|
|
(e) |
the managers, the classification society and flag authorities as may be necessary in connection with the transactions contemplated hereunder.
|
79.2 |
Any other disclosure by each Party shall be subject to the prior written consent of the other Party.
|
80. |
THIRD PARTIES ACT
|
80.1 |
Any person which is an Indemnitee or a Finance Party from time to time and is not a party to this Charter shall be entitled to enforce such terms of this Charter as provided for in this
Charter in relation to the obligations of the Charterers to such Indemnitee or (as the case may be) Finance Party, subject to the provisions of Clause 81 (Law and jurisdiction) and the Third
Parties Act. The Third Parties Act applies to this Charter as set out in this Clause 80.
|
80.2 |
Save as provided above, a person who is not a party to this Charter has no right under the Third Parties Act to enforce or to enjoy the benefit of any term of this Charter.
|
81. |
LAW AND JURISDICTION
|
81.1 |
This Charter and any non-contractual obligations arising from or in connection with it shall in all respects be governed by and interpreted in accordance with English law.
|
81.2 |
Any dispute, controversy or claim arising out of or relating to this Charter, including the existence, validity, interpretation, performance, breach or termination thereof or any dispute
regarding non-contractual obligations arising out of or relating to it shall be referred to and finally resolved by London arbitration.
|
81.3 |
The law of this Clause 81 shall be English law.
|
81.4 |
Any dispute arising out of or in connection with this Charter shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory modification or
re-enactment thereof save to the extent necessary to give effect to the provisions of this Clause.
|
81.5 |
The arbitration shall be conducted in accordance with the London Maritime Arbitrations Association (LMAA). Terms current at the time when the arbitration proceedings are commenced.
|
81.6 |
The reference shall be to three arbitrators. A party wishing to refer a dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other party
requiring the other party to appoint its own arbitrator within fourteen (14) calendar days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless the other party appoints its own arbitrator and gives
notice that it has done so within the fourteen (14) days specified.
|
81.7 |
If one party does not appoint its own arbitrator and give notice that it has done so within the fourteen (14) days specified, the party referring a dispute to arbitration may, without the
requirement of any further prior notice to the other party, appoint its arbitrator as sole arbitrator and shall advise the other party accordingly. The award of a sole arbitrator shall be binding on both Parties as if the sole arbitrator
had been appointed by agreement.
|
81.8 |
In cases where neither the claim nor any counterclaim exceeds the sum of US$50,000 (or such other sum as the parties may agree) the arbitration shall be conducted in accordance with the
LMAA Small Claims Procedures current at the time when the arbitration proceedings are commenced and the number of arbitrators shall be one.
|
82. |
CONDITIONS SUBSEQUENT
|
82.1 |
Notwithstanding anything to the contrary in this Charter, the obligations of the Owners to charter, or continue to charter, the Vessel to the Charterers under this Charter shall be subject
to the condition that the Owners shall have received the following documents and evidence in form and substance satisfactory to the Owners no later than three (3) Business Days after the Actual Delivery Date:
|
|
(a) |
a copy of the endorsed policy issued by the insurer in respect of the Vessel;
|
|
(b) |
a copy of the duly signed letter of undertaking issued by all the relevant underwriters or insurance brokers in respect of the Vessel;
|
|
(c) |
the Owners shall have received, no later than fourteen (14) calendar days after the Actual Delivery Date, an original of the duly executed acknowledgement by the Sub-charterers in
accordance with the Charterers Assignment;
|
|
(d) |
the Vessel’s transcript of register evidencing that the Vessel is free from any registered Security Interest;
|
|
(e) |
the Vessel’s current Safety Management Certificate (as such term is defined pursuant to the ISM Code);
|
|
(f) |
the Approved Manager’s current Document of Compliance (as such term is defined pursuant to the ISM Code);
|
|
(g) |
the Vessel’s current ISSC;
|
|
(h) |
the Vessel’s current IAPPC; and
|
|
(i) |
the Vessel’s classification certificate evidencing that it is free of all recommendations and requirements from the Classification Society.
|
83. |
FATCA
|
83.1 |
Defined terms
|
83.2 |
FATCA Information
|
|
(a) |
Subject to paragraph (iii) below, each Relevant Party shall, on the date of this Charter, and thereafter within ten (10) Business Days of a reasonable request by another Relevant 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 the requesting party (with a copy to all other Relevant Parties) such other form or forms (including IRS Form W-8 or Form W-9 or any successor or substitute form, as applicable)
and any other documentation and other information relating to its status under FATCA (including its applicable “pass thru percentage” or other information required under FATCA or other official guidance including intergovernmental
agreements) as the requesting party reasonably requests for the purpose of the requesting party’s compliance with FATCA.
|
|
(b) |
If a Relevant Party confirms to any other Relevant Party that it is a FATCA Exempt Party or provides an IRS Form W-8 or W-9 showing that it is a FATCA Exempt Party and it subsequently
becomes aware that it is not, or has ceased to be a FATCA Exempt Party, that party shall so notify all other Relevant Parties reasonably promptly.
|
|
(c) |
Nothing in this Clause 74 (FATCA) shall oblige any Relevant Party to do anything which would or, in its reasonable opinion, might 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 nothing in this paragraph shall excuse
any Relevant Party from providing a true, complete and correct IRS Form W-8 or W-9 (or any successor or substitute form where applicable). Any information provided on such
|
|
(d) |
If a Relevant Party fails to confirm its status or to supply forms, documentation or other information requested in accordance with the provisions of this Charter or the provided
information is insufficient under FATCA, then:
|
|
(i) |
if that party failed to confirm whether it is (and/or remains) a FATCA Exempt Party then such party shall be treated for the purposes of the Transaction Documents as if it is a FATCA
Non-Exempt Party; and
|
|
(ii) |
if that party failed to confirm its applicable passthru percentage then such party shall be treated for the purposes of this Charter and the Transaction Documents (and payments made
thereunder) as if its applicable passthru percentage is 100%, until (in each case) such time as the party in question provides sufficient confirmation, forms, documentation or other information to establish the relevant facts.
|
83.3 |
FATCA Deduction and gross-up by Relevant Party
|
|
(a) |
If the representation made by the Charterers under Clause 48 (Charterers’ representations and warranties) proves to be untrue or misleading such that the Charterers are required to make a
FATCA Deduction, the Charterers shall make the FATCA Deduction and any payment required in connection with that FATCA Deduction within the time allowed and in the minimum amount required by FATCA.
|
|
(b) |
If the Charterers are required to make a FATCA Deduction then the Charterers shall increase the payment due from them to the Owners to an amount which (after making any FATCA Deduction)
leaves an amount equal to the payment which would have been due if no FATCA Deduction had been required.
|
|
(c) |
The Charterers shall promptly upon becoming aware that they must make a FATCA Deduction (or that there is any change in the rate or basis of a FATCA Deduction) notify the Owners
accordingly. Within thirty (30) days of the Charterers making either a FATCA Deduction or any payment required in connection with that FATCA Deduction, the Charterers shall deliver to the Owners evidence reasonably satisfactory to the
Owners that the FATCA Deduction has been made or (as applicable) any appropriate payment paid to the relevant governmental or taxation authority.
|
|
(d) |
If the Owners are required to make a deduction or withholding from a payment under the Finance Documents in respect of FATCA, which deduction or withholding would not have been required if
a Relevant Person were not a US Tax Obligor or FATCA FFI, and are required under the Finance Documents (if any) to pay additional amounts in respect of such deduction or withholding, the amount of the payment due from the Charterers shall
be increased to an amount which, after any such deduction or withholding and payment of additional amounts, leaves the Owners with an amount equal to the amount which it would have had remaining if it had not been required to pay
additional amounts under such Finance Documents.
|
83.4 |
FATCA Deduction by Owners
|
THE OWNERS
|
THE BAREBOAT CHARTERERS
|
|
by:
|
by:
|
|
Name:
|
Name:
|
|
Title:
|
Title:
|
|
Date:
|
Date:
|
Name of Vessel:
|
[ ]
|
|
Flag:
|
Marshall Islands
|
|
Place of Registration:
|
Marshall Islands
|
|
IMO Number:
|
[ ]
|
|
Gross Registered Tonnage:
|
[..]
|
|
Net Registered Tonnage:
|
[..]
|
|
Dated:
|
20[●]
|
|
At:
|
hours (Hong Kong time)
|
|
Place of delivery:
|
||
THE OWNER
|
THE BAREBOAT CHARTERER
|
|
[ ]
|
[ ]
|
|
by:
|
by:
|
|
Name:
|
Name:
|
|
Title:
|
Title:
|
|
Date:
|
Date:
|
Builders Hull number 2750
|
payment dates
|
Cost Balance at beginning of applicable term
|
Fixed Hire
|
Balloon Amount
|
||
10/01/2020
|
US$ 30,100,000.00
|
US$ 292,485.00
|
|||
10/02/2020
|
US$ 29,984,434.99
|
US$ 273,615.00
|
|||
10/03/2020
|
US$ 29,875,690.36
|
US$ 292,485.00
|
|||
10/04/2020
|
US$ 29,758,806.92
|
US$ 283,050.00
|
|||
10/05/2020
|
US$ 29,645,029.06
|
US$ 292,485.00
|
|||
10/06/2020
|
US$ 29,526,789.85
|
US$ 283,050.00
|
|||
10/07/2020
|
US$ 29,411,692.25
|
US$ 292,485.00
|
|||
10/08/2020
|
US$ 29,292,081.55
|
US$ 292,485.00
|
|||
10/09/2020
|
US$ 29,171,767.81
|
US$ 283,050.00
|
|||
10/10/2020
|
US$ 29,054,650.80
|
US$ 292,485.00
|
|||
10/11/2020
|
US$ 28,932,941.50
|
US$ 283,050.00
|
|||
10/12/2020
|
US$ 28,814,466.01
|
US$ 292,485.00
|
|||
10/01/2021
|
US$ 28,691,344.97
|
US$ 292,485.00
|
|||
10/02/2021
|
US$ 28,567,500.25
|
US$ 264,180.00
|
|||
10/03/2021
|
US$ 28,454,983.03
|
US$ 292,485.00
|
|||
10/04/2021
|
US$ 28,329,749.04
|
US$ 283,050.00
|
|||
10/05/2021
|
US$ 28,207,842.51
|
US$ 292,485.00
|
|||
10/06/2021
|
US$ 28,081,155.89
|
US$ 283,050.00
|
|||
10/07/2021
|
US$ 27,957,835.33
|
US$ 292,485.00
|
|||
10/08/2021
|
US$ 27,829,679.24
|
US$ 292,485.00
|
10/09/2021
|
US$ 27,700,769.87
|
US$ 283,050.00
|
|
10/10/2021
|
US$ 27,575,285.62
|
US$ 292,485.00
|
|
10/11/2021
|
US$ 27,444,881.00
|
US$ 283,050.00
|
|
10/12/2021
|
US$ 27,317,941.22
|
US$ 292,485.00
|
|
10/01/2022
|
US$ 27,186,023.99
|
US$ 292,485.00
|
|
10/02/2022
|
US$ 27,053,331.39
|
US$ 264,180.00
|
|
10/03/2022
|
US$ 26,932,775.55
|
US$ 292,485.00
|
|
10/04/2022
|
US$ 26,798,594.42
|
US$ 283,050.00
|
|
10/05/2022
|
US$ 26,667,978.48
|
US$ 292,485.00
|
|
10/06/2022
|
US$ 26,532,240.94
|
US$ 283,050.00
|
|
10/07/2022
|
US$ 26,400,109.94
|
US$ 292,485.00
|
|
10/08/2022
|
US$ 26,262,797.94
|
US$ 292,485.00
|
|
10/09/2022
|
US$ 26,124,678.85
|
US$ 283,050.00
|
|
10/10/2022
|
US$ 25,990,229.58
|
US$ 292,485.00
|
|
10/11/2022
|
US$ 25,850,508.41
|
US$ 283,050.00
|
|
10/12/2022
|
US$ 25,714,499.62
|
US$ 292,485.00
|
|
10/01/2023
|
US$ 25,573,157.78
|
US$ 292,485.00
|
|
10/02/2023
|
US$ 25,430,985.17
|
US$ 264,180.00
|
|
10/03/2023
|
US$ 25,301,816.42
|
US$ 292,485.00
|
|
10/04/2023
|
US$ 25,158,048.93
|
US$ 283,050.00
|
|
10/05/2023
|
US$ 25,018,101.34
|
US$ 292,485.00
|
|
10/06/2023
|
US$ 24,872,666.25
|
US$ 283,050.00
|
|
10/07/2023
|
US$ 24,731,095.36
|
US$ 292,485.00
|
|
10/08/2023
|
US$ 24,583,973.33
|
US$ 292,485.00
|
|
10/09/2023
|
US$ 24,435,986.55
|
US$ 283,050.00
|
|
10/10/2023
|
US$ 24,291,931.76
|
US$ 292,485.00
|
|
10/11/2023
|
US$ 24,142,228.44
|
US$ 283,050.00
|
10/12/2023
|
US$ 23,996,502.72
|
US$ 292,485.00
|
|
10/01/2024
|
US$ 23,845,062.94
|
US$ 292,485.00
|
|
10/02/2024
|
US$ 23,692,733.04
|
US$ 273,615.00
|
|
10/03/2024
|
US$ 23,549,393.28
|
US$ 292,485.00
|
|
10/04/2024
|
US$ 23,395,325.50
|
US$ 283,050.00
|
|
10/05/2024
|
US$ 23,245,351.30
|
US$ 292,485.00
|
|
10/06/2024
|
US$ 23,089,496.45
|
US$ 283,050.00
|
|
10/07/2024
|
US$ 22,937,782.64
|
US$ 292,485.00
|
|
10/08/2024
|
US$ 22,780,119.98
|
US$ 292,485.00
|
|
10/09/2024
|
US$ 22,621,530.62
|
US$ 283,050.00
|
|
10/10/2024
|
US$ 22,467,154.97
|
US$ 292,485.00
|
|
10/11/2024
|
US$ 22,306,726.08
|
US$ 283,050.00
|
|
10/12/2024
|
US$ 22,150,559.77
|
US$ 292,485.00
|
|
10/01/2025
|
US$ 21,988,270.02
|
US$ 281,790.00
|
|
10/02/2025
|
US$ 21,835,721.37
|
US$ 254,520.00
|
|
10/03/2025
|
US$ 21,697,125.62
|
US$ 281,790.00
|
|
10/04/2025
|
US$ 21,542,865.69
|
US$ 272,700.00
|
|
10/05/2025
|
US$ 21,392,704.45
|
US$ 281,790.00
|
|
10/06/2025
|
US$ 21,236,655.22
|
US$ 272,700.00
|
|
10/07/2025
|
US$ 21,084,752.20
|
US$ 281,790.00
|
|
10/08/2025
|
US$ 20,926,892.91
|
US$ 281,790.00
|
|
10/09/2025
|
US$ 20,768,105.76
|
US$ 272,700.00
|
|
10/10/2025
|
US$ 20,613,537.57
|
US$ 281,790.00
|
|
10/11/2025
|
US$ 20,452,908.60
|
US$ 272,700.00
|
|
10/12/2025
|
US$ 20,296,547.53
|
US$ 281,790.00
|
|
10/01/2026
|
US$ 20,134,055.37
|
US$ 281,790.00
|
|
10/02/2026
|
US$ 19,970,608.12
|
US$ 254,520.00
|
10/03/2026
|
US$ 19,822,110.63
|
US$ 281,790.00
|
|
10/04/2026
|
US$ 19,656,829.85
|
US$ 272,700.00
|
|
10/05/2026
|
US$ 19,495,940.58
|
US$ 281,790.00
|
|
10/06/2026
|
US$ 19,328,742.66
|
US$ 272,700.00
|
|
10/07/2026
|
US$ 19,165,987.18
|
US$ 281,790.00
|
|
10/08/2026
|
US$ 18,996,849.88
|
US$ 281,790.00
|
|
10/09/2026
|
US$ 18,826,718.44
|
US$ 272,700.00
|
|
10/10/2026
|
US$ 18,661,107.37
|
US$ 281,790.00
|
|
10/11/2026
|
US$ 18,489,002.52
|
US$ 272,700.00
|
|
10/12/2026
|
US$ 18,321,470.49
|
US$ 281,790.00
|
|
10/01/2027
|
US$ 18,147,369.34
|
US$ 281,790.00
|
|
10/02/2027
|
US$ 17,972,244.87
|
US$ 254,520.00
|
|
10/03/2027
|
US$ 17,813,138.21
|
US$ 281,790.00
|
|
10/04/2027
|
US$ 17,636,049.21
|
US$ 272,700.00
|
|
10/05/2027
|
US$ 17,463,665.46
|
US$ 281,790.00
|
|
10/06/2027
|
US$ 17,284,522.36
|
US$ 272,700.00
|
|
10/07/2027
|
US$ 17,110,139.07
|
US$ 281,790.00
|
|
10/08/2027
|
US$ 16,928,918.03
|
US$ 281,790.00
|
|
10/09/2027
|
US$ 16,746,631.82
|
US$ 272,700.00
|
|
10/10/2027
|
US$ 16,569,188.95
|
US$ 281,790.00
|
|
10/11/2027
|
US$ 16,384,788.34
|
US$ 272,700.00
|
|
10/12/2027
|
US$ 16,205,287.25
|
US$ 281,790.00
|
|
10/01/2028
|
US$ 16,018,747.72
|
US$ 281,790.00
|
|
10/02/2028
|
US$ 15,831,111.77
|
US$ 263,610.00
|
|
10/03/2028
|
US$ 15,654,549.64
|
US$ 281,790.00
|
|
10/04/2028
|
US$ 15,464,773.02
|
US$ 272,700.00
|
|
10/05/2028
|
US$ 15,280,038.75
|
US$ 281,790.00
|
10/06/2028
|
US$ 15,088,060.86
|
US$ 272,700.00
|
|
10/07/2028
|
US$ 14,901,183.80
|
US$ 281,790.00
|
|
10/08/2028
|
US$ 14,706,979.10
|
US$ 281,790.00
|
|
10/09/2028
|
US$ 14,511,632.91
|
US$ 272,700.00
|
|
10/10/2028
|
US$ 14,321,477.05
|
US$ 281,790.00
|
|
10/11/2028
|
US$ 14,123,864.98
|
US$ 272,700.00
|
|
10/12/2028
|
US$ 13,931,503.44
|
US$ 281,790.00
|
|
10/01/2029
|
US$ 13,731,599.21
|
US$ 281,790.00
|
|
10/02/2029
|
US$ 13,530,519.99
|
US$ 254,520.00
|
|
10/03/2029
|
US$ 13,347,832.53
|
US$ 281,790.00
|
|
10/04/2029
|
US$ 13,144,497.63
|
US$ 272,700.00
|
|
10/05/2029
|
US$ 12,946,565.32
|
US$ 281,790.00
|
|
10/06/2029
|
US$ 12,740,871.87
|
US$ 272,700.00
|
|
10/07/2029
|
US$ 12,540,643.69
|
US$ 281,790.00
|
|
10/08/2029
|
US$ 12,332,564.34
|
US$ 281,790.00
|
|
10/09/2029
|
US$ 12,123,261.95
|
US$ 272,700.00
|
|
10/10/2029
|
US$ 11,919,520.72
|
US$ 281,790.00
|
|
10/11/2029
|
US$ 11,707,790.57
|
US$ 272,700.00
|
|
10/12/2029
|
US$ 11,501,686.08
|
US$ 281,790.00
|
|
10/01/2030
|
‐
|
US$ 11,287,500
|
Purchase Option Date
|
Purchase Option Price
|
2nd anniversary
|
USD27,274,800
|
3rd anniversary
|
USD25,704,000
|
4th anniversary
|
USD24,021,000
|
5th anniversary
|
USD22,185,000
|
6th anniversary
|
USD20,360,000
|
7th anniversary
|
USD18,380,400
|
8th anniversary
|
USD16,116,900
|
9th anniversary
|
USD13,974,000
|
THE OWNERS
|
THE CHARTERERS
|
|
GREAT MONICA LIMITED
|
SANTA MONICA MARINE INC.
|
|
by:
|
by:
|
|
Name:
|
Name:
|
|
Title:
|
Title:
|
|
Date:
|
Date:
|
GUARANTEE AND INDEMNITY
|
||
relating to the obligations of
|
||
SANTA MONICA MARINE INC.
|
Clause
|
Page
|
||
1.
|
DEFINITIONS AND INTERPRETATION
|
1
|
|
2.
|
GUARANTEE AND INDEMNITY
|
2
|
|
3.
|
CONTINUING SECURITY
|
3
|
|
4.
|
RESTRICTIONS ON GUARANTOR
|
4
|
|
5.
|
PAYMENTS
|
5
|
|
6.
|
NO SET-OFF, COUNTERCLAIM OR TAX DEDUCTION
|
5
|
|
7.
|
DISCHARGE CONDITIONAL
|
5
|
|
8.
|
REPRESENTATIONS AND WARRANTIES
|
5
|
|
9.
|
INFORMATION UNDERTAKINGS
|
8
|
|
10.
|
FINANCIAL COVENANTS
|
9
|
|
11.
|
INDEMNITIES AND EXPENSES
|
10
|
|
12.
|
CHANGES TO THE PARTIES
|
11
|
|
13.
|
SET-OFF
|
11
|
|
14.
|
MISCELLANEOUS
|
12
|
|
15.
|
NOTICES
|
13
|
|
16.
|
GOVERNING LAW AND JURISDICTION
|
14
|
|
17.
|
CONTRACTUAL RECOGNITION OF BAIL-IN
|
15
|
|
SCHEDULE 1 FORM OF COMPLIANCE CERTIFICATE
|
16
|
||
EXECUTION PAGES
|
18
|
(1) |
TOP SHIPS INC., a corporation
incorporated in the Republic of the Marshall Islands whose registered office is at 1 Vas. Sofias & Meg. Alexandrou, Athens 15124 Greece (the Guarantor);
and
|
(2) |
GREAT MONICA LIMITED, a
corporation incorporated under the laws of the Republic of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro MH96960, the Republic of the Marshall Islands (the Owner which expression includes its successors and assigns).
|
(A) |
By a bareboat charter dated 30 September 2019 (as amended and/or supplemented from time to time, the Charter) and entered into
between (i) the Owner as owners and (ii) the Santa Monica Marine Inc. as charterer(the Charterer), the Owner agreed to bareboat charter the Vessel to the Charterer pursuant to the terms and
conditions contained therein.
|
(B) |
It is one of the conditions precedent to the chartering of the Vessel by the Owner to the Charterer under the Charter that the Assignor enters into this Deed.
|
(C) |
This is the Charter Guarantee relating to the Vessel
|
1. |
DEFINITIONS AND INTERPRETATION
|
1.1 |
Definitions
|
1.2 |
General interpretation
|
|
(a) |
unless the context otherwise requires, words in the singular include the plural and vice versa;
|
|
(b) |
references to any document include that document as varied, novated, supplemented, extended or replaced from time to time;
|
|
(c) |
references to any enactment include re-enactments, amendments and extensions of that enactment;
|
|
(d) |
references to any person include that person’s successors and permitted assigns and references to a Party mean a party to this Guarantee;
|
|
(e) |
clause headings are for convenience of reference only and are not to be taken into account in construction;
|
|
(f) |
unless otherwise specified, references to Clauses and the recitals are respectively to Clauses of and the recitals to this Guarantee;
|
|
(g) |
any rights in respect of an asset includes:
|
|
(i) |
all amounts and proceeds paid or payable;
|
|
(ii) |
all rights to make any demand or claim; and
|
|
(iii) |
all powers, remedies, causes of action, security, guarantees and indemnities,
|
|
(h) |
the term the Security means the Security Interests created by the Transaction Documents to which the Guarantor is at any time a party;
|
|
(i) |
any words following the terms including, include, in particular or
any similar expression shall be construed as illustrative and shall not limit the sense of the words, description, definition, phrase or term preceding those terms; and
|
|
(j) |
a Potential Termination Event is continuing if it has not been remedied or waived and a Termination Event is continuing
it has not been waived.
|
1.3 |
Agreement to prevail
|
1.4 |
Third party rights
|
|
(a) |
A person who is not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 (the Third Parties Act) to enforce or enjoy the
benefit of any term of this Guarantee.
|
|
(b) |
Notwithstanding Clause 1.4(a) but subject always to Clause 1.4(c) and the provisions of the Third Parties Act, a person who is not a Party may rely on any clause under this Guarantee which
expressly confers rights on them.
|
|
(c) |
Notwithstanding any term of this Guarantee or any other Transaction Document, the consent of any person who is not a Party is not required to rescind or vary this Guarantee at any time.
|
2. |
GUARANTEE AND INDEMNITY
|
2.1 |
Guarantee and indemnity
|
|
(a) |
guarantees the due and punctual performance by the Charterer of all its obligations under or pursuant to the Charter and the other Transaction Documents to which the Charterer is a party
and the due and punctual payment by the Charterer to the Owner of each and every part of the Outstanding Indebtedness in accordance with the terms of the Transaction Documents;
|
|
(b) |
undertakes that, if and whenever the Charterer fails to pay on the due date any sum whatsoever due and payable under or pursuant to any Transaction Document, the Guarantor shall pay such
sum on demand by the Owner; and
|
|
(c) |
agrees, as a separate and independent stipulation, that if any amounts intended to be guaranteed by Clause 2.1(a) are not recoverable on the footing of a guarantee, whether by reason of
illegality, incapacity, lack or exceeding of powers, ineffectiveness of execution or any other fact or circumstance, whether or not known to the Owner or the Guarantor, then such amounts shall nevertheless be recoverable from the
Guarantor as sole or principal debtor by way of indemnity and shall be payable by the Guarantor to the Owner on demand.
|
2.2 |
Default interest
|
2.3 |
Nature of guarantee
|
2.4 |
Guarantor as principal debtor
|
2.5 |
Immediate recourse
|
3. |
CONTINUING SECURITY
|
3.1 |
Continuing security; guarantee not affected by other security
|
|
(a) |
is and shall at all times throughout the Agreement Term remain a continuing security for the payment of the full amount of the Outstanding Indebtedness from time to time;
|
|
(b) |
shall not be satisfied by any intermediate payment or satisfaction of any part of the Outstanding Indebtedness; and
|
|
(c) |
shall be in addition to and shall not merge with or be prejudiced or affected by any other security for the Outstanding Indebtedness which has been, or may at any time be, given to the
Owner by the Charterer or any other person.
|
3.2 |
Waiver of defences
|
|
(a) |
any time or indulgence granted to, or composition with, the Charterer or any other person; or
|
|
(b) |
any termination, renewal, extension or variation of any credit, accommodation or facility granted by the Owner to the Charterer or any other person or any amendment of, or the making of any
supplement to, any Transaction Document or any other document or security; or
|
|
(c) |
the taking, variation, compromise, renewal, enforcement, realisation or release of, or refusal or neglect to take, perfect, release or enforce, any rights, remedies or securities against,
or granted by, any Obligor or other person; or
|
|
(d) |
any incapacity, disability, or defect in powers of any Obligor or other person, or any irregular exercise of it by, or lack of authority of, any person purporting to act on behalf of any
Obligor or other person; or
|
|
(e) |
any illegality, invalidity, avoidance or unenforceability on any grounds whatsoever of, or of any obligations of any Obligor or other person under, any Transaction Document or any other
document or security; or
|
|
(f) |
the death, liquidation, administration, insolvency, amalgamation, reorganisation or dissolution, or any change in the constitution, name or style, of any Obligor, the Owner or any other
person; or
|
|
(g) |
any other act, omission, matter or thing which, but for this provision, might operate to exonerate the Guarantor from liability, whether in whole or in part, under this Guarantee.
|
4. |
RESTRICTIONS ON GUARANTOR
|
4.1 |
Deferral of Guarantor’s rights
|
|
(a) |
to exercise any right of subrogation or indemnity or any other right or remedy in relation to any rights, security or moneys held by or recovered or receivable by the Owner under the
Transaction Documents; or
|
|
(b) |
to exercise any right of set-off or counterclaim against the Charterer or any other Obligor; or
|
|
(c) |
to exercise any right of contribution from the Charterer or any other Obligor in respect of the Outstanding Indebtedness; or
|
|
(d) |
to receive, claim or have the benefit of any payment, distribution or security from the Charterer or any other Obligor; or
|
|
(e) |
unless so directed by the Owner (in which case the Guarantor shall prove in accordance with the Owner’s directions), to rank as a creditor or have any right of proof in the bankruptcy,
liquidation or insolvency of the Charterer or any other Obligor in competition with the Owner.
|
4.2 |
No security to be taken by the Guarantor
|
4.3 |
Application of payments or benefits received by the Guarantor
|
5. |
PAYMENTS
|
5.1 |
Place, time and manner of payment
|
5.2 |
Non-Business Days
|
5.3 |
Accrual of interest and periodic payments
|
5.4 |
Application of receipts
|
5.5 |
Waiver of rights of appropriation
|
6. |
NO SET-OFF, COUNTERCLAIM OR TAX DEDUCTION
|
7. |
DISCHARGE CONDITIONAL
|
8. |
REPRESENTATIONS AND WARRANTIES
|
8.1 |
Date of representations and warranties
|
8.2 |
Existence, powers and compliance
|
|
(a) |
is a corporation duly incorporated with limited liability, validly existing and in good standing under the laws of the Republic of the Marshall Islands (its jurisdiction of incorporation);
|
|
(b) |
has full power to own its property and assets and to carry on its business as it is now being conducted; and
|
|
(c) |
has complied with all statutory and other requirements relative to its business.
|
8.3 |
Capacity and authorisation
|
8.4 |
No contravention of laws or contractual restrictions
|
|
(a) |
contravene in any respect the constitutional documents of the Guarantor or any law, regulation or contractual restriction binding on the Guarantor or any of its assets; or
|
|
(b) |
result in the creation or imposition of any Security Interest (other than a Permitted Security Interest) on any of its assets in favour of any party.
|
8.5 |
Licences and approvals in force
|
8.6 |
Validity and enforceability
|
|
(a) |
constitute the legal, valid and binding obligations of the Guarantor enforceable against it in accordance with its terms; and
|
|
(b) |
(to the extent that by its terms it purports to do so) create a legal, valid and binding first priority Security Interest in accordance with its terms over all the assets to which by its
terms it relates,
|
8.7 |
No third party Security Interests; title
|
8.8 |
Insolvency
|
8.9 |
No litigation current or pending
|
8.10 |
Governing law and enforcement
|
8.11 |
Truth of financial and other information
|
8.12 |
No liability to deduction or withholding
|
8.13 |
No filing or stamp taxes
|
8.14 |
Tax compliance
|
8.15 |
Pari passu obligations
|
8.16 |
Familiarity with the terms of the Agreement
|
8.17 |
Anti-Corruption Laws
|
8.18 |
Sanctions
|
|
(a) |
The Guarantor is not a Restricted Party nor is it owned and/or controlled (directly or indirectly) by a Restricted Party.
|
|
(b) |
No proceeds provided to the Charterer shall be made available to or for the benefit of a Restricted Party nor shall they otherwise be applied (directly or indirectly) in a manner or for a
purpose prohibited by Sanctions.
|
9. |
INFORMATION UNDERTAKINGS
|
9.1 |
Duration of undertakings
|
9.2 |
Provision of financial information
|
|
(a) |
within 180 days of the end of each financial year, certified copies of the audited consolidated financial statements of the Group and the profit and loss accounts and balance sheets of the
Guarantor for that financial year, prepared in accordance with GAAP;
|
|
(b) |
together with the audited consolidated financial statements referred to in Clause 9.2(a) above, a Compliance Certificate addressed to the Owner substantially in the form set out in Schedule
1 ([Form Of Compliance Certificate]) evidencing the compliance (or otherwise) of the Guarantor with the financial covenants in respect of the Group as set out in Clause 10 (Financial Covenants); and
|
|
(c) |
promptly, such further information in the possession or control of the Guarantor regarding the financial condition and operations of the Group as the Owner may reasonably request.
|
9.3 |
Notification of default
|
|
(a) |
notify the Owner of any Termination Event (and the steps, if any, being taken to remedy it) promptly upon its becoming aware of the occurrence of it, stating whether in its opinion such
default is a Termination Event or a Potential Termination Event; and
|
|
(b) |
promptly upon a request by the Owner, supply to the Owner a certificate signed on behalf of the Guarantor by two of its directors or senior officers certifying that no Termination Event is
continuing (or if a Termination Event is continuing, specifying the Termination Event and the steps, if any, being taken to remedy it).
|
9.4 |
Notification of claims, material litigation and other proceedings
|
|
(a) |
any claim, action, suit, proceedings or investigation against any Obligor in connection with Sanctions by any Sanctions Authority;
|
|
(b) |
any Environmental Claim against any Obligor which is current, pending or threatened and of any facts or circumstances which are reasonably likely to result in any Environmental Claim being
commenced or threatened against any Obligor; and
|
|
(c) |
any litigation, arbitration, tax claim or administrative proceeding instituted or (to its knowledge) threatened and of any other occurrence of which it becomes aware which might have a
Material Adverse Effect.
|
9.5 |
Provision of other information
|
9.6 |
Know your customer checks
|
10. |
FINANCIAL COVENANTS
|
10.1 |
Duration
|
10.2 |
Financial covenants
|
|
(a) |
the Guarantor shall always maintain a minimum free cash or cash equivalent US$500,000.00 per vessel at consolidated level. For clarification purposes, any cash held under any minimum
liquidity requirements and Debt Service Reserve Accounts with other financiers shall be taken into account for the testing of this covenant; and
|
|
(b) |
the Leverage Ratio of the Guarantor (on a consolidated basis) shall not at any time exceed 75%.
|
|
(i) |
the Total Net Debt (i.e. the aggregate senior secured Financial Indebtedness of the Group, including 50% of Joint Venture vessels’ debt, as at such date minus the aggregate amount of all
cash balances standing on such date to the credit of a bank account of a member of the Group); and
|
|
(ii) |
the aggregate Fair Market Value of all Fleet Vessels including 50% of Joint Venture vessels.
|
10.3 |
Testing of financial condition
|
11. |
INDEMNITIES AND EXPENSES
|
11.1 |
Indemnity against costs
|
|
(a) |
in the negotiation, preparation, printing, execution and registration of this Guarantee and the other Transaction Documents;
|
|
(b) |
in collating, monitoring and otherwise attending to the relevant conditions precedent in the Charter;
|
|
(c) |
in the enforcement or preservation or the attempted enforcement or preservation of any of the rights and powers of the Owner under this Guarantee and the other Transaction Documents;
|
|
(d) |
in connection with any actual or proposed amendment of or supplement to this Guarantee or any other of the Transaction Documents, or with any request to the Owner to grant any consent or
waiver in respect of any provision of this Guarantee or any other Transaction Document, whether or not it is given; and
|
|
(e) |
arising out of any act or omission made by the Owner in good faith in connection with any of the matters dealt with in this Guarantee or any other Transaction Document.
|
11.2 |
Documentary taxes
|
11.3 |
Currency indemnity
|
11.4 |
Survival of indemnities
|
12. |
CHANGES TO THE PARTIES
|
12.1 |
No assignment or transfer by the Guarantor
|
12.2 |
Assignments and transfers by the Owner
|
12.3 |
Change of office
|
12.4 |
Delegation
|
12.5 |
Guarantor to assist
|
12.6 |
Disclosure of information
|
13. |
SET-OFF
|
14. |
MISCELLANEOUS
|
14.1 |
Time of essence
|
14.2 |
Remedies and waivers
|
14.3 |
Waivers and amendments to be in writing
|
14.4 |
Partial invalidity
|
14.5 |
Counterparts
|
14.6 |
Conclusiveness of certificates
|
14.7 |
Further assurances
|
|
(a) |
perfecting or protecting this Guarantee or the Security;
|
|
(b) |
the exercise by the Owner of any right, power or remedy vested in it under this Guarantee or any other Security Document to which the Guarantor is at any time a party; or
|
|
(c) |
enforcing this Guarantee or the Security after it has become enforceable (and the Guarantor undertakes to allow its name to be used as and when required by the Owner for this purpose).
|
15. |
NOTICES
|
15.1 |
Communications in writing; addresses
|
|
(a) |
in the case of the Owner, to it at:
|
|
Address: |
18/F, CATIC Tower,
212 Jiang Ning Road, Shanghai 200041, China The People’s Republic of China |
|
Telefax No.: |
+86 21 5289 5389
|
|
Attn: |
Mr. Wang Xing
|
|
Email: |
wangxing@chinaleasing.net
|
|
(b) |
in the case of the Guarantor, to it at:
|
|
Address: |
1 Vas. Sofias & Meg. Alexandrou
Athens 15124 Greece |
|
Telefax No: |
+ 30 210 80 56 441
|
|
Telephone No: |
+ 30 210 81 28 180
|
|
Attn: |
Alexandros Tsirikos
|
|
Email: |
atsirikos@topships.org
|
15.2 |
Delivery
|
|
(a) |
Subject to Clause 16.2(b) below, any communication or document made or delivered by one person to another under or in connection with this Guarantee will only be effective:
|
|
(i) |
if by way of fax, when received in legible form;
|
|
(ii) |
if by way of letter, when it has been left at the relevant address or 5 Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address; or
|
|
(iii) |
if by way of electronic mail, then in accordance with Clause 16.3 (Electronic communication),
|
|
(b) |
Any communication or document to be made or delivered to the Owner will be effective only when actually received by the Owner and then only if it is expressly marked for the attention of
the department or officer specified as part of its address details provided under Clause 16.1 (Communications in writing; addresses).
|
|
(c) |
Any communication or document which becomes effective, in accordance with Clause 16.2(a) or Clause 16.2(b) above, on a non-working day or after 5:00 p.m. in the place of receipt shall be
deemed only to become effective at the opening of business hours on the next working day in the place of receipt.
|
15.3 |
Electronic communication
|
|
(a) |
notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and
|
|
(b) |
notify each other of any change to their address or any other such information supplied by them by not less than 5 Business Days’ notice.
|
15.4 |
English language
|
16. |
GOVERNING LAW AND JURISDICTION
|
16.1 |
This Guarantee and any non-contractual obligations arising out of or in connection with it shall be governed by and construed in accordance with English law.
|
16.2 |
Any dispute arising out of or in connection with this Deed (including a dispute regarding the existence, validity or termination of this Deed or any non-contractual obligation arising out
of or in connection with this Deed) (a “Dispute”) shall be referred to and finally resolved by arbitration in London in accordance with the Arbitration Act 1996 or any statutory modification or re-enactment thereof save to the extent
necessary to give effect to the provisions of this Clause 16 (Law and Jurisdiction). The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association (LMAA) Terms current at the time when the arbitration
proceedings are commenced.
|
16.3 |
The reference shall be to three arbitrators. A Party wishing to refer a Dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other Party
requiring the other Party to appoint its own arbitrator within fourteen (14) calendar days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless the other Party appoints its own arbitrator and gives
notice that it has done so within the fourteen (14) days specified. If the other Party does not appoint its own arbitrator and give notice that it has done so within the fourteen (14) days specified, the Party referring a Dispute to
arbitration may, without the requirement of any further prior notice to the other Party, appoint its arbitrator as sole arbitrator and shall advise the other Party accordingly. The award of a sole arbitrator shall be binding on both
Parties as
|
16.4 |
In cases where neither the claim nor any counterclaim exceeds the sum of US$50,000 (or such other sum as the Parties may agree) the arbitration shall be conducted in accordance with the
LMAA Small Claims Procedure current at the time when the arbitration proceedings are commenced. Where the reference is to three arbitrators the procedure for making appointments shall be in accordance with the procedure for full
arbitration stated above.
|
16.5 |
The language of the arbitration shall be English.
|
17. |
CONTRACTUAL RECOGNITION OF BAIL-IN
|
17.1 |
Notwithstanding any other term of any Transaction Document or any other agreement, arrangement or understanding between the parties to a Transaction Document, each Party acknowledges and
accepts that any liability of any party to a Transaction Document under or in connection with the Transaction Documents may be subject to Bail-In Action by the relevant Resolution Authority and acknowledges and accepts to be bound by the
effect of:
|
|
(a) |
any Bail-In Action in relation to any such liability, including (without limitation):
|
|
(i) |
a reduction, in full or in part, in the principal amount, or outstanding amount due (including any accrued but unpaid interest) in respect of any such liability;
|
|
(ii) |
a conversion of all, or part of, any such liability into shares or other instruments of ownership that may be issued to, or conferred on, it; and
|
|
(iii) |
a cancellation of any such liability; and
|
|
(b) |
a variation of any term of any Transaction Document to the extent necessary to give effect to any Bail-In Action in relation to any such liability.
|
To: |
GREAT MONICA LIMITED
Trust Company Complex Ajeltake Road Ajeltake Island Majuro MH96960 The Republic of the Marshall Islands |
(a) |
the bareboat charter dated 30 September 2019 (as amended and/or supplemented from time to time, the Charter) made between (1)
yourselves as Owner and (2) Santa Monica Marine Inc. as Charterer, pursuant to which the Owner agreed to bareboat charter the Vessel to the Charterer; and
|
(b) |
the deed of guarantee and indemnity dated [●] 2019 (the Guarantee) made between (1) ourselves as Guarantor and (2) yourselves
as Owner under which we have guaranteed the performance by the Charterer of its obligations under the Bareboat Charter.
|
1. |
Attached to this certificate are the latest audited consolidated financial statements of the Group and the profit and loss accounts and balance sheets for the financial
year ending on [●] 201[●], prepared in accordance with GAAP.
|
2. |
Set out below are the respective amounts, in [Dollars][Euro], of [●], [●], [●], [●] and [●]of the Group as at [●] 201[●]:
|
3. |
Accordingly, as at the date of this certificate, the financial covenants set out in Clause 10.2 (Financial covenants) of the
Guarantee [are][are not] complied with, in that as at [●] 201[●]:
|
|
(i) |
the aggregate amount of cash is $[●] per vessel at consolidated level;
|
For and on behalf of
|
|
TOP SHIPS INC.
|
EXECUTED as a DEED
|
)
|
Signature in the name of the company
|
by TOP SHIPS INC.
|
)
|
TOP SHIPS INC.
|
a company incorporated in the Republic of
|
)
|
|
the Marshall Islands
|
)
|
|
acting by
|
)
|
|
)
|
||
who, in accordance with the laws of the
|
)
|
|
Republic of the Marshall Islands, is acting
|
)
|
|
under the authority of
|
)
|
|
the company as [authorised
|
||
signatory][attorney-in-fact]
|
||
in the presence of:
|
[Authorised signatory][Attorney-in-fact]
|
|
EXECUTED as a DEED
|
)
|
Signature in the name of the company
|
by GREAT MONICA LIMITED
|
)
|
GREAT MONICA LIMITED
|
a company incorporated in the Republic of
|
)
|
|
the Marshall Islands
|
)
|
|
acting by
|
)
|
|
)
|
||
who, in accordance with the laws of the
|
)
|
|
Republic of the Marshall Islands, is acting
|
)
|
|
under the authority of
|
)
|
|
the company as [authorised
|
||
signatory][attorney-in-fact]
|
||
in the presence of:
|
[Authorised signatory][Attorney-in-fact]
|
|
CONTENTS
|
||
Page
|
||
32.
|
Definitions
|
1
|
33.
|
Interpretations
|
13
|
34.
|
Background
|
15
|
35.
|
Newbuilding construction
|
15
|
36.
|
Delivery
|
16
|
37.
|
Disputes under the shipbuilding contract
|
17
|
38.
|
Terms of delivery
|
19
|
39.
|
Cancellation
|
20
|
40.
|
Conditions precedent
|
21
|
41.
|
Bunkers and luboils
|
23
|
42.
|
Further maintenance and operation
|
24
|
43.
|
Structural changes and alterations
|
24
|
44.
|
Hire
|
25
|
45.
|
Insurance
|
28
|
46.
|
Redelivery
|
31
|
47.
|
Redelivery conditions
|
32
|
48.
|
Owners’ mortgage
|
33
|
49.
|
Diver’s inspection at redelivery
|
34
|
50.
|
Transport documents
|
34
|
51.
|
Charterers’ representations and warranties
|
34
|
52.
|
Charterers’ undertakings
|
38
|
53.
|
Earnings Account
|
43
|
54.
|
Termination Events
|
43
|
55.
|
[Not Used]
|
48
|
56.
|
Name of Vessel
|
48
|
57.
|
Charter Period
|
49
|
58.
|
Transaction fees
|
49
|
59.
|
Early Termination, Purchase Option, Purchase Obligation and transfer of title, partial prepayment
|
49
|
60.
|
Pre-delivery Sales Clause
|
51
|
61.
|
Total Loss
|
51
|
62.
|
Additional payment obligations
|
52
|
63.
|
Stamp duties and taxes
|
52
|
64.
|
Operational notifiable events
|
52
|
65.
|
Further indemnities
|
53
|
66.
|
Set-off
|
54
|
67.
|
Further assurances and undertakings
|
55
|
68.
|
Cumulative rights
|
55
|
69.
|
Day count convention
|
55
|
70.
|
No waiver
|
55
|
71.
|
Entire agreement
|
55
|
72.
|
Invalidity
|
55
|
73.
|
English language
|
55
|
74.
|
No partnership
|
56
|
75.
|
Notices
|
56
|
76.
|
Conflicts
|
56
|
77.
|
Survival of Charterers’ obligations
|
57
|
78.
|
Counterparts
|
57
|
79.
|
Confidentiality
|
57
|
80.
|
Third Parties Act
|
57
|
81.
|
Law and jurisdiction
|
57
|
82.
|
Conditions subsequent
|
58
|
83.
|
FATCA
|
59
|
SCHEDULE 1 FORM OF PROTOCOL OF DELIVERY AND ACCEPTANCE
|
61
|
|
SCHEDULE 2 FORM OF TITLE TRANSFER PROTOCOL OF DELIVERY AND ACCEPTANCE
|
62
|
|
SCHEDULE 3 HIRE PAYMENT SCHEDULE
|
63
|
|
SCHEDULE 4 SCHEDULE OF PURCHASE OPTION PRICE (EXCLUDING HIRE DUE)
|
68
|
|
SIGNATURE PAGE
|
69
|
|
(a) |
by means of the holding of shares, or the possession of voting powers in or in relation to the Charterers and the Charter Guarantor; or
|
|
(b) |
as a result of any powers conferred by the articles of association or any other document regulating the Charterers and the Charter Guarantor.
|
|
(a) |
a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in order for the transactions contemplated by the Transaction
Documents to be carried out which disruption is not caused by, and is beyond the control of, any of the Parties; or
|
|
(b) |
the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party preventing that, or any other Party:
|
|
(i) |
from performing its payment obligations under the Transaction Documents; or
|
|
(ii) |
from communicating with other Parties in accordance with the terms of the Transaction Documents,
|
|
(a) |
any release, emission, spill or discharge from the Vessel or into or upon the air, sea, land or soils (including the seabed) or surface water of Environmentally Sensitive Material within or from the Vessel; or
|
|
(b) |
any incident in which Environmentally Sensitive Material is released, emitted, spilled or discharged into or upon the air, sea, land or soils (including the seabed) or surface water from a vessel other than the Vessel and which
involves a collision between the Vessel and such other vessel or some other incident of navigation or operation, in either case, in connection with which the Vessel is actually or potentially liable to be arrested, attached, detained or
injuncted and/or the Vessel and/or any Obligor and/or any operator or manager of the Vessel is at fault or allegedly at fault or otherwise liable to any legal or administrative action; or
|
|
(c) |
any other incident in which Environmentally Sensitive Material is released, emitted, spilled or discharged into or upon the air, sea, land or soils (including the seabed) or surface water otherwise than from the Vessel and in
connection with which the Vessel is actually or potentially liable to be arrested and/or where any Obligor and/or any operator or manager of the Vessel is at fault or allegedly at fault or otherwise liable to any legal or administrative
action, other than in accordance with an Environmental Approval.
|
|
(a) |
moneys borrowed;
|
|
(b) |
any acceptance credit;
|
|
(c) |
any bond, note, debenture, loan stock or similar instrument;
|
|
(d) |
any finance, capital lease or operating leases for financing purposes;
|
|
(e) |
receivables sold or discounted (other than on a non-recourse basis);
|
|
(f) |
deferred payments for assets or services;
|
|
(g) |
any derivative transaction protecting against or benefiting from fluctuations in any rate or price (and, when calculating the value of any derivative transaction, only the marked to market value shall be taken into account);
|
|
(h) |
any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing according to the relevant account principles;
|
|
(i) |
any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; and
|
|
(j) |
the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in (a) to (i).
|
|
(a) |
the first Hire Payment Date shall fall on the Actual Delivery Date; and
|
|
(b) |
the second Hire Payment Date shall fall on the date which is the 10th day of the next calendar month (or if such date is not a Business Day, the immediately following Business Day) after the calendar month during which the
Actual Delivery Date falls.
|
|
(a) |
the applicable Screen Rate for the longest period (for which that Screen Rate is available) which is less than that relevant period; and
|
|
(b) |
the applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds that relevant period,
|
|
(a) |
the business or financial condition of the Charter Group taken as a whole;
|
|
(b) |
the ability of the Charterers to perform and comply with their payment obligations under any Transaction Document or Project Document to which they are a party;
|
|
(c) |
the validity, legality or enforceability of this Charter, any other Transaction Document or any Project Document; or
|
|
(a) |
lawfully enter into and perform its obligations under the Transaction Documents and the Project Documents to which it is party;
|
|
(b) |
ensure the legality, validity, enforceability or admissibility in evidence in England and, if different, its jurisdiction of incorporation, of such Transaction Documents and Project Documents to which it is party; and
|
|
(c) |
carry on its business from time to time.
|
|
(a) |
the Charterers has, at the date of this Charter or at any later time or times, to the Owners under or in connection with the Transaction Documents or any judgment relating to the Transaction Documents; and
|
|
(b) |
the Collateral Charterer has, at the date of this Charter or at any later time or times, to the Collateral Owner under or in connection with the Transaction Documents (as defined under the Collateral Charter) or any judgment relating
to the Transaction Documents (as defined under the Collateral Charter),
|
|
(a) |
any Security Interest created or to be created in accordance with the Security Documents;
|
|
(b) |
liens for unpaid master’s and crew’s wages in accordance with first class ship ownership and management practice;
|
|
(c) |
liens for salvage;
|
|
(d) |
liens for master’s disbursements incurred in the ordinary course of trading;
|
|
(e) |
any other lien arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of the Vessel and not as a result of any default or omission by the Charterers, provided such liens do not secure
amounts more than 21 days overdue (unless the overdue amount is being contested in good faith by appropriate steps);
|
|
(f) |
any Security Interest arising by operation of law in respect of Taxes which are not overdue for payment or which are being contested in good faith by appropriate steps and in respect of which appropriate reserves have been made;
|
|
(g) |
any liens securing obligations incurred in the ordinary course of trading and/or operating the Vessel and not more than 21 days overdue; and
|
|
(h) |
any Security Interest which has the prior written approval of the Owners.
|
|
(a) |
the Paid Instalments together with any other sums the Owners have paid to or owe to the Builder due to the early termination of this Charter, or the repudiation or termination of the Shipbuilding Contract, or for other reasons caused
by the Charterers, together with interest accrued thereon pursuant to Clause 44 (i) up to the date of receipt by the Owners of the Pre-delivery Termination Sum;
|
|
(b) |
any and all evidenced and documented direct costs, losses, liabilities and expenses incurred or suffered by the Owners as a result of the early termination of this Charter prior to the Delivery Date;
|
|
(c) |
any properly documented Break Costs incurred (or payable) by the Owners under the Financing Documents, with the exclusion of any SWAP related costs; and
|
|
(d) |
any sums other than Fixed Hire, due and payable, but unpaid, under this Charter (including for the avoidance of doubt Pre-Delivery Interest) together with interest accrued thereon pursuant to Clause 44 (i) up to the date of receipt by
the Owners of the Pre- delivery Termination Sum.
|
|
(a) |
the estimated amount corresponding to the Hire Payment Date in the “Purchase Option Price” column as referenced in Schedule 4 (Schedule of Purchase Option Price) to this Charter, but such amount
to be adjusted, revised, updated and replaced from time to time in accordance with the terms of this Charter and confirmed by the Owners (and agreed to by the Charterers) by reference to, among others, the figure to be provided
|
|
(b) |
all Unpaid Sums due and payable together with interest accrued thereon pursuant to paragraph (j) of Clause 44 (Hire) from the due date for payment thereof up to the date of actual payment,
|
|
(a) |
(other than where paragraph (b) below applies) as the rate at which the relevant Reference Bank could borrow funds in the London interbank market in US Dollars for the relevant period, were it to do so by asking for and then accepting
interbank offers for deposits in reasonable market size in that currency and for that period; or
|
|
(b) |
if different, as the rate (if any and applied to the relevant Reference Bank and the relevant period) which contributors to the Screen Rate are asked to submit to the relevant administrator.
|
|
(a) |
the Charter Guarantee;
|
|
(b) |
the Charterers’ Assignment;
|
|
(c) |
the Managers’ Undertaking;
|
|
(d) |
the Account Charge;
|
|
(e) |
the Shares Pledge;
|
|
(f) |
the Refund Guarantee Assignment; and
|
|
(g) |
any other document that may at any time be executed by any person creating, evidencing or perfecting any Security Interest to secure all or part of the Obligors’ obligations under or in connection with the Transaction Documents,
|
|
(a) |
the date which falls 180 days after the date of occurrence of the Total Loss or, if such date is not a Business Day, the immediately preceding Business Day; and
|
|
(b) |
the date on which the Owners receive the Total Loss Proceeds in respect of the Total Loss.
|
|
(a) |
in connection with determining the Screen Rate, 11:00 a.m. (London time) on the Quotation Day; or
|
|
(b) |
in connection with determining the Reference Bank Rate, noon (London time) on the Quotation Day.
|
|
(a) |
in respect of a termination of this Charter in accordance with paragraph (l) of Clause 44 (Hire), the date specified in the Termination Notice served on the Charterers pursuant to that Clause
having regard to the various remedy periods;
|
|
(b) |
in respect of a Default Termination, the date specified in the Termination Notice served on the Charterers pursuant to paragraph 54.3 of Clause 54 (Termination Events) in respect of such Default
Termination;
|
|
(c) |
in respect of a Total Loss Termination, the Settlement Date in respect of the Total Loss which gives rise to such Total Loss Termination.
|
|
(a) |
all Fixed Hire due and payable but unpaid under this Charter up to and including the Termination Payment Date (if the Termination Payment Date is not a Hire Payment Date, the Fixed Hire payable shall be reduced pro-rata for the days
between preceding Hire Payment Date and the Termination Payment Date;
|
|
(b) |
the amount of Cost Balance as at the relevant Termination Payment Date;
|
|
(c) |
all liabilities, costs and expenses (including, without limitation, legal fees) so incurred directly in relation to repossessing the vessel;
|
|
(d) |
any costs and expenses, relating to Owner’s finance, incurred or suffered by the Owners as a direct result of the Termination Notice.
|
|
(e) |
any and all Break Costs (excluding swap related expenses); and
|
|
(f) |
any sums (other than hire) unpaid under this Charter and if such sums due and payable but unpaid then together with interest accrued thereon up to and including the Termination Payment Date.
|
|
(a) |
actual or constructive or compromised or agreed or arranged total loss of the Vessel;
|
|
(b) |
the requisition for title or compulsory acquisition of the Vessel by any government or other competent authority (other than by way of requisition for hire);
|
|
(c) |
the capture, seizure, arrest, detention, hijacking, theft, condemnation as prize, confiscation or forfeiture of the Vessel (not falling within paragraph (b) of this definition), unless the Vessel is released and returned to the
possession of the Owners or the Charterers within ninety (90) days after the capture, seizure, arrest, detention, hijacking, theft, condemnation as prize, confiscation or forfeiture in question,
|
|
(a) |
an Obligor which is resident for tax purposes in the United States of America; or
|
|
(b) |
an Obligor some or all of whose payments under the Transaction Documents to which it is a party are from sources within the United States for US federal income tax purposes.
|
33. |
INTERPRETATIONS
|
|
(a) |
In this Charter, unless the context otherwise requires, any reference to:
|
|
(i) |
this Charter include the Schedules hereto and references to Clauses and Schedules are, unless otherwise specified, references to Clauses of and Schedules to this Charter and, in the case of a Schedule, to such Schedule as incorporated
in this Charter as substituted from time to time;
|
|
(ii) |
any statutory or other legislative provision shall be construed as including any statutory or legislative modification or re-enactment thereof, or any substitution therefor;
|
|
(iii) |
the term “Vessel” includes any part of the Vessel;
|
|
(iv) |
the “Owners”, the “Charterers”, any “Obligor”, “Sub-charterer” or any other
person include any of their respective successors, permitted assignees and permitted transferees;
|
|
(v) |
any agreement, instrument or document include such agreement, instrument or document as the same may from time to time be amended, modified, supplemented, novated or substituted;
|
|
(vi) |
the “equivalent” in one currency (the “first currency”) as at any date of an amount in another currency (the “second
currency”) shall be construed as a reference to the amount of the first currency which could be purchased with such amount of the second currency at the spot rate of exchange quoted by the People’s Bank of China at or about 11:00
a.m. two (2) Business Days (being a day other than a Saturday or Sunday on which banks and foreign exchange markets are generally open for business in Beijing) prior to such date for the purpose of the first currency with the second
currency for delivery and value on such date;
|
|
(vii) |
“hereof”, “herein” and “hereunder” and other words of similar import means this Charter as a whole (including the
Schedules) and not any particular part hereof;
|
|
(viii) |
“law” includes common or customary law and any constitution, decree, judgment, legislation, order, ordinance, regulation, rule, statute, treaty or other legislative measure in any jurisdiction or
any present or future directive, regulation, request or requirement, or official or judicial interpretation of any of the foregoing, in each case having the force of law and, if not having the force of law, in respect of which compliance
is generally customary;
|
|
(ix) |
the word “person” or “persons” or to words importing persons include, without limitation, any state, divisions of a state, government, individuals,
partnerships, corporations, ventures, government agencies, committees, departments, authorities and other bodies, corporate or unincorporated, whether having distinct legal personality or not;
|
|
(x) |
the “winding-up”, “dissolution”, “administration”, “liquidation”, “insolvency”, “reorganisation”, “readjustment of debt”, “suspension of payments”, “moratorium” or “bankruptcy” (and their derivatives and cognate expressions) of any
person shall each be construed so as to include the others and any equivalent or analogous proceedings or event under the laws of any jurisdiction in which such person is incorporated or any jurisdiction in which such person carries on
business;
|
|
(xi) |
“protection and indemnity risks” means the usual risks covered by a protection and indemnity association which is a member of the International Group of P&I Club, including pollution risks,
extended passenger cover and the proportion (if any) of any sums payable to any other person or persons in case of collision which are not recoverable under the hull and machinery policies by reason of the incorporation in them of clause
6 of the International Hull Clauses (1/11/02 or 1/11/03), clause 8 of the Institute Time Clauses (Hull)(1/10/83) or clause 8 of the Institute Time Clauses (Hulls)(1/11/1995) or the Institute Amended Running Down Clause (1/10/71) or any
equivalent provision;
|
|
(xii) |
a Potential Termination Event or Termination Event which is “continuing” is a reference to a Potential Termination Event or Termination Event which is not remedied or waived; and
|
|
(xiii) |
words denoting the plural number include the singular and vice versa.
|
|
(b) |
Headings are for the purpose of reference only, have no legal or other significance, and shall be ignored in the interpretation of this Charter.
|
|
(c) |
A time of day (unless otherwise specified) is a reference to Beijing time.
|
34. |
BACKGROUND
|
|
(a) |
By a novation agreement (the “Novation Agreement”) of even date herewith made between the Original Buyer, the Owners and the Charterers, the Owners have agreed to purchase the Vessel subject to
the terms and conditions therein.
|
|
(b) |
Accordingly the parties hereby agree that the Owners’ obligation to charter the Vessel to the Charterers under this Charter is subject to the effective transfer of ownership of the Vessel to the Owners pursuant to the Novation
Agreement.
|
35. |
NEWBUILDING CONSTRUCTION
|
|
(a) |
The Vessel shall be constructed in accordance with the Shipbuilding Contract and in accordance with the Specifications (as defined in the Shipbuilding Contract) annexed thereto. Once the Novated Rights and Obligations (as defined in
the Novation Agreement) have been novated to the Owners, the Owners and Charterers shall be deemed to have accepted and agreed to the Shipbuilding Contract and the Specifications in all respects on the understanding that the Vessel is to
be built solely for the use of the Charterers.
|
|
(b) |
In addition to the Buyer’s Supplies, the Charterers or the Charter Guarantor shall, at its sole cost, expense and risk, supply bunkers, fuel, lubricating oil, hydraulic oil and greases for the purpose of trial runs under and in
accordance with the Shipbuilding Contract.
|
|
(c) |
Subject to the terms of the Novation Agreement, the Charterers or its appointed supervisor approved by the Owners (at the Charter Guarantor’s/Charterers’ cost and expense) shall continue to exercise the Other Rights and Obligations (as
‘Buyer’ and as defined in the Novation Agreement) under the Shipbuilding Contract relating to, inter alia:
|
|
(i) |
Approval of Plans and Drawings;
|
|
(ii) |
Changes and modifications on the Vessel;
|
|
(iii) |
Supervision of the Vessel; and
|
|
(iv) |
Attending all tests and sea trials.
|
35.2 |
The Vessel shall be constructed in accordance with the Shipbuilding Contract, under the supervision of the Charterers (or its appointed supervisor). Subject to the provisions of clause 3.6(a)(ii) of the Novation Agreement, the
Charterers have the right to make changes and modifications to the Vessel in accordance with the Shipbuilding Contract and the Charterers
|
35.3 |
If, on the Delivery Date, there are any amounts due from the Charterers to the Builder under the terms of the Shipbuilding Contact and/or the Novation Agreement (including but not limited to any amounts payable by the Charterers under
clause 3.7 of the Novation Agreement and any amounts due for any bunkers, lubes or other costs and expenses incurred as a result of any extras, additions or alteration of the Vessel), then the Charterers shall pay such sums (as evidenced
by a commercial invoice from the Builder) to the Builder on or before the Delivery Date (the “Extra SBC Costs”). If any liquidated damages for reasons other than delay are payable by the Builder
under the Shipbuilding Contract, these liquidated damages shall be deducted from the Delivery Instalment payable by the Owners (any such deduction shall consequently reduce the Contract Price and the Cost Balance). If any liquidated
damages for delay are payable by the Builder under the Shipbuilding Contract, then the Charterers may apply these towards payment of the Extra SBC Costs and any other reasonable, documented and directly incurred expenses as a result of a
delay in delivery (including any extra supervision costs incurred in accordance with the applicable supervision contract). Any excess liquidated damages for delay after such prior application by the Charterers shall be used to reduce the
Delivery Instalment payable by the Owners as part of the Contract Price (any such deduction shall consequently reduce the Contract Price, the Fixed Hire and Cost Balance accordingly).
|
36. |
DELIVERY
|
36.1 |
The Vessel is scheduled to be delivered according to the terms of the Shipbuilding Contract. In case the delivery date under the Shipbuilding Contract is extended or postponed or delayed pursuant to the Shipbuilding Contract then
subject to the terms of this Charter, the delivery date under the Charter shall be automatically and accordingly extended or postponed subject to it not being after the Cancellation Date.
|
36.2 |
Notwithstanding the foregoing, the obligation of the Owners to charter the Vessel to the Charterers hereunder is conditional upon:
|
|
(a) |
the delivery of the Vessel to the Owners by the Builder and acceptance of the Vessel by the Owners pursuant to the Shipbuilding Contract; and
|
|
(b) |
the satisfaction of the conditions precedent set out in Clause 40 below.
|
36.3 |
Subject to the Vessel being delivered to, and taken over by, the Owners pursuant to the Shipbuilding Contract and the satisfaction or waiver by the Owners of the conditions precedent set out in Clause 40, then the Charterers shall be
deemed to have accepted and taken delivery of the Vessel (without reservation) under this Charter simultaneously with delivery by the Builder to the Owners pursuant to the Shipbuilding Contract whether or not the Charterers takes actual
physical possession and/or use of the Vessel on the Delivery Date.
|
36.4 |
Subject to Clauses 36.2 and 36.3, the actual date of delivery for the purpose of this Charter shall be the date when the Vessel is delivered by the Builder to the Owners as indicated by the protocol of delivery and acceptance signed
and timed by the Owners and the Builder pursuant to the Shipbuilding Contract (the “Delivery Date”) and shall be deemed to be the commencement date for the purposes of this Charter whether or not the Charterers takes actual physical
possession and/or use of the Vessel on the Delivery Date.
|
36.5 |
Without prejudice to the provisions of Clause 36.4 above, the Owners and the Charterers shall on the Delivery Date sign a protocol of delivery and acceptance in the form attached hereto as Schedule 1.
|
37. |
DISPUTES UNDER THE SHIPBUILDING CONTRACT
|
37.1 |
Dispute under Shipbuilding Contract
|
|
(a) |
If there is a dispute under the Shipbuilding Contract, then, unless the Owners have served a Renovation Notice (and without prejudice to (i) any rights Owners may have to serve such a Renovation Notice at any time including pursuant to
paragraph (c) below and (ii) the Owners’ rights under Clause 54, the Owners shall enter into immediate consultation with the Charterers and/or the Builder in order to seek to resolve the dispute in an amicable way and the aggregate period
of such consultation shall be no more than ten (10) Banking Days (unless otherwise agreed by the Parties). The Owners shall not serve a termination notice under the Shipbuilding Contract without prior consultation with the Charterers.
|
|
(b) |
In the event that the dispute cannot be resolved during above consultation period and arbitration proceedings have been initiated by any party under the Shipbuilding Contract in respect of such dispute, then the arbitration proceedings
shall, subject to paragraph (c) below, be handled in accordance with paragraphs (d) to (h) below.
|
|
(c) |
Without prejudice to the terms of the Novation Agreement and notwithstanding the fact that arbitration proceedings in accordance with paragraphs (d) to (h) below may have commenced, the Owners shall also have the option to serve a
Renovation Notice under the Novation Agreement in the event any (or any combination of) the following circumstances arise prior to the Delivery Date:
|
|
(i) |
the Refund Guarantee is terminated or otherwise ceases to be in full force and effect for any reason; or
|
|
(ii) |
the Vessel has not been delivered by the Builder prior to the Cancellation Date.
|
|
(d) |
If:
|
|
(i) |
the Charterers and/or Charter Guarantor propose to the Owners to terminate the Shipbuilding Contract or reject the Vessel while the Builder disputes the right of the Charter Guarantor, Charterers and/or the Owners to terminate the
Shipbuilding Contract or reject the Vessel; or
|
|
(ii) |
the Builder terminates or purports to terminate the Shipbuilding Contract while the Owners and/or the Charterers and/or the Charter Guarantor disputes such cancellation; or
|
|
(iii) |
the Builder tenders for delivery of the Vessel while the Owners and/or the Charterers and/or Charter Guarantor disputes such tender for delivery the Charter Guarantor shall, at the Charter Guarantor’s cost and risk (and on behalf of
the Owners if a Renovation Notice has not been served and otherwise also on behalf of the Charterers),
|
|
(e) |
Should the cancellation of the Shipbuilding Contract or rejection of the Vessel by the Owners based on Charterers’ proposal or instruction be proven wrongful or the Builder’s cancellation or tender for delivery be proven justified, in
whole or in part, by final award and/or settlement agreement (any settlement agreement shall be approved by the Charterers and the Owners (each acting reasonably) and any such approved settlement agreement and/or final award shall be
binding upon the Charterers), the Charterers and Charter Guarantor shall indemnify and keep the Owners indemnified against all the liability and compensation that the Owners are ordered to assume/pay to the Builder together with all
documented losses, costs, expenses, interests, orders or other sanctions suffered or incurred by the Owners arising directly in any manner out of such wrongful cancellation or rejection of the Vessel by the Owners or justified
cancellation or tender for delivery by the Builder.
|
|
(f) |
Should the cancellation of Shipbuilding Contract or rejection of the Vessel by the Charterers and/or Charter Guarantor and/or Owners based on Charterers’ proposal or instruction be proven justified or Builder’s cancellation or tender
for delivery be proven wrongful, in whole or in part, by final award and/or settlement agreement (any settlement agreement shall be approved by the Charterers and the Owners (each acting reasonably) and any such approved settlement
agreement and/or final award shall be binding upon the Charterers), after receipt of the amount from the Builder and/or Refund Guarantor as ordered by the final award and/or settlement agreement, such amounts shall be applied in
accordance with Clause 37.2.
|
|
(g) |
Should any settlement agreement (any settlement agreement shall be approved by the Charterers and the Owners (each acting reasonably)) be reached with the Builder during the arbitration or enforcement proceeding, in respect of any and
all amounts and liabilities payable by the Builder under the settlement agreement, the Owners shall and the Charterers and Charter Guarantor shall apply such amounts in accordance with Clause 37.2.
|
|
(h) |
Any refunds received by the Charter Guarantor or Charterers from the Builder and/or the Refund Guarantor under the Shipbuilding Contract and the Refund Guarantee shall be applied (and the Charter Guarantor shall procure they are
applied) in accordance with Clause 37.2 unless a Step-in Notice under clause 3.4(b) of the Novation Agreement has been served by the Owners.
|
37.2 |
Payment Regime
|
|
(a) |
firstly towards payment to the Owners in full of the Pre-delivery Termination Sum, which shall (if already not then payable) be deemed at the time of such receipt to be immediately payable by the Charterers to the Owners;
|
|
(b) |
secondly in the event that the Owners receive an amount in excess of the Pre-delivery Termination Sum, towards any amounts then outstanding under any Collateral Charter; and
|
|
(c) |
thirdly any further excess shall be paid over to the Charterers (for the Charterers’ account or the account of the Charter Guarantor at the Charterers’ option).
|
37.3 |
Charterers’ rejection under clause 3.6 (a)(v) of the Novation Agreement
|
37.4 |
Owners’ pre-delivery default
|
|
(a) |
After the Effective Time under the Novation Agreement has occurred, if the Owners fail to pay any instalment to the Builder pursuant to the Shipbuilding Contract and the same failure has not been remedied by the Owners by the date
which falls three (3) Banking Days prior to the date upon which the Builder may terminate the Shipbuilding Contract for non-payment, then the Charterers shall be entitled to terminate this Charter upon written notice to the Owners and
serve a Renovation Notice in accordance with the terms of the Novation Agreement.
|
|
(b) |
Upon this Charter being terminated by the Charterers in accordance with Clause 37.4(a) above, the Charterers shall, notwithstanding any such termination of this Charter, be obliged to pay to the Owners, within ten (10) days of any such
termination, the Pre-delivery Termination Sum, if any on the date of such termination.
|
38. |
TERMS OF DELIVERY
|
38.1 |
The Vessel shall be delivered to the Charterers in her condition as indicated in all the protocols and delivery documents as delivered by the Builder pursuant to Article VII of the Shipbuilding Contract, and the Charterers hereby
acknowledge and agree that the Owners make no condition, term, representation, warranty, covenant, agreement or declaration, express or implied (and whether statutory or otherwise) as to the seaworthiness, merchantability, condition,
design, operation, performance, class, capacity or fitness for use or as to the eligibility of the Vessel for any particular trade or operation or any other condition, term, representation or warranty whatsoever, express or implied, with
respect to the Vessel. Acceptance of delivery by the Charterers or (as the case may be) deemed delivery of the Vessel to the Charterers under this Charter shall be irrevocable, final and conclusive proof and evidence that, for the
purposes of the obligations and liabilities of the Owners hereunder or in connection herewith, the Vessel is at that time seaworthy, in accordance with the provisions of this Charter, in good working order and repair.
|
38.2 |
The Charterers hereby waive all their rights in respect of any condition, term, representation or warranty express or implied (and whether statutory or otherwise) on the part of the Owners and all their claims against the Owners
howsoever and whenever the same may arise in respect of the Vessel or arising out of the operation or performance of the Vessel and the chartering thereof under this Charter (including in respect of the seaworthiness, condition, design,
operation, fitness for use or otherwise with respect to the Vessel). In particular, and without prejudice to the generality of the foregoing, the Owners shall be under no liability whatever and howsoever arising in relation to any injury,
death, loss, damage or delay of, or to, or in connection with the Vessel or any person or property whatsoever, whether on board the Vessel or elsewhere, irrespective of whether such injury, death, loss, damage or delay shall arise from
the unseaworthiness of or any defect in the Vessel. For the purposes of this Clause “delay” shall include delay in relation to the Vessel. (whether in respect of delivery of the Vessel to the Charterers under this Charter or otherwise) or
any other delay whatsoever. The Charterers acknowledge that no representation has been made or will be made by or on behalf of the Owners in relation to the Vessel or any part thereof.
|
38.3 |
The Charterers agree that the Owners shall be under no liability to supply any replacement vessel or any piece or part thereof during any period when the Vessel is unusable or becomes a Total Loss and shall not be liable to the
Charterers or any other person as a result of the Vessel being unusable or a Total Loss.
|
38.4 |
None of the Owners or their respective shareholders, affiliates, subsidiaries, consultants, agents and their respective shareholders, directors, officers, employees, or representatives shall be liable to the Charterers (including any
of its assigns, novatees, successors, shareholders, affiliates, subsidiaries, consultants, agents, managers, clients and their respective shareholders, directors, officers, employees, or representatives) for (i) indirect, special,
exemplary, punitive or consequential losses and damages, arising from, or relating to or in connection with this Charter (ii) and to the extent not covered by (i) above, the following, whether direct or indirect loss of profit, loss of
production, loss of revenue, loss of time, loss of contracts or otherwise, in each case irrespective of cause (by contract, by law, in tort or otherwise) and notwithstanding the negligence, misconduct or breach (whether contractual,
statutory or otherwise) save for (in each case) resulting from the gross negligence of wilful misconduct of such indemnified parties.
|
39. |
CANCELLATION
|
40. |
CONDITIONS PRECEDENT
|
|
(a) |
Initial Conditions
|
|
(i) |
an original of each of the following:
|
|
(A) |
the duly executed Charter;
|
|
(B) |
the duly executed Novation Agreement;
|
|
(C) |
the following duly executed Security Documents:
|
|
(I) |
the Charter Guarantee;
|
|
(II) |
the Charterers’ Assignment;
|
|
(III) |
the Managers’ Undertaking; and
|
|
(D) |
all documents required by any of the Security Documents set out in paragraph (C), including but not limited to the notices and acknowledgement required under such Security Documents, except for the letters of undertaking from the
insurers, underwriters, protection and indemnity clubs and association which will be provided to the Owners and the acknowledgment by the acknowledgement by the Sub-charterers to the assignment of the Sub-charter, both of which will be
required under the Charterers’ Assignment and provided to the Owners in accordance with Clause 82 (Conditions subsequent);
|
|
(ii) |
certified true copies of the memorandum and articles of association (or equivalent documents) (and all amendments thereto) of each Obligor and any other documents required to be filed or registered or issued under the laws of their
jurisdiction of incorporation to establish their incorporation;
|
|
(iii) |
certified true copies of written resolutions or (as the case may be), resolutions passed at separate meetings, in each case, of the board of directors and (if required by any legal advisors to the Owners) shareholders of each Obligor
(or its sole member or general partners), evidencing its approval of the Transaction Documents and the Project Documents to which it is a party and authorising appropriate officers or attorneys to execute the same and to sign all notices
required to be given hereunder or thereunder on its behalf or other evidence of such approvals and authorisations as shall be acceptable to the Owners;
|
|
(iv) |
if applicable, the original power of attorney of each Obligor under which any documents (including the Transaction Documents and Project Documents to which it is a party) are to be executed or transactions undertaken by that party;
|
|
(v) |
a certified list specifying the directors and officers of the Obligor (together with their respective specimen signatures);
|
|
(vi) |
if applicable, copies of all governmental and other consents, licences, approvals and authorisations as may be necessary to authorise the performance by each Obligor of its obligations under the Transaction Documents and Project
Documents to which it is a party, and the execution, validity and enforceability of such Transaction Documents and Project Documents;
|
|
(vii) |
certified copies of the duly executed Management Agreements, in each case together with all addenda, amendments or supplements;
|
|
(viii) |
evidence that the fees, costs and expenses then due from the Charterers pursuant to the Novation Agreement, this Charter (including Clauses 62 (Fees and expenses) and 65 (Further indemnities)) have been paid or will be paid at such time as is agreed with the Owners;
|
|
(ix) |
a legal opinion issued by legal advisers to the Owners in the following jurisdictions, each in form and substance satisfactory to and agreed by the Owners (acting reasonably) (or confirmation satisfactory to the Owners that such an
opinion will be given):
|
|
(A) |
England and Wales; and
|
|
(B) |
such other jurisdictions as the Owners may reasonably consider necessary.
|
|
(b) |
Delivery Conditions
|
|
(i) |
an original of the Account Charge and all documents required by the Account Charge, including but not limited to the notices and acknowledgement required under the Account Charge;
|
|
(ii) |
evidence that:
|
|
(A) |
all the conditions precedents under clause 2 (Conditions Precedent) of the Novation Agreement have been satisfied or, in the Owners’ opinion, will be satisfied on the Actual Delivery Date;
|
|
(B) |
subject to Clause 82 (Conditions Subsequent), the Vessel is (or will on the Actually Delivery Date) be insured in the manner required by the Transaction Documents;
|
|
(iii) |
certified copies of:
|
|
(A) |
the Approved Managers’ current Document of Compliance (as such term is defined pursuant to the ISM Code);
|
|
(B) |
the Vessel’s current IAPPC;
|
|
(C) |
a copy of the Vessel’s classification confirmation certificate evidencing that it is free of all overdue recommendations and requirements from the Classification Society; and (iv)a copy of each of the Collateral Transaction Documents;
|
|
(iv) |
valuations made in accordance with Clause 52 (dd), dated no more than thirty (30) days prior to the Effective Date;
|
|
(v) |
evidence that the fees, costs and expenses then due from the Charterers pursuant to the Novation Agreement, this Charter (including Clauses 62 (Fees and expenses) and 65 (Further indemnities)) have been paid or will be paid at such time as is agreed with the Owners;
|
|
(vi) |
a legal opinion issued by legal advisers to the Owners in the following jurisdictions, each in form and substance satisfactory to and agreed by the Owners (acting reasonably) (or confirmation satisfactory to the Owners that such an
opinion will be given):
|
|
(A) |
a legal opinion of HFW, legal advisors to the Owners on matters relating to English law;
|
|
(B) |
legal opinions by lawyers appointed by the Owners on matters relating to the laws of the Republic of the Marshall Islands;
|
|
(C) |
a legal opinion of the jurisdiction in which the account bank is situated; and
|
|
(D) |
such other jurisdictions as the Owners may reasonably consider necessary; and (viii) such other consent, licence, approval, authorisation or other document, opinion or assurance which are necessary in connection with their entry into
and performance of the transactions contemplated by any of the Transaction Documents or for the validity and enforceability thereof (including, without limitation in relation to or for the purposes of any financing by the Owners).
|
|
(c) |
If the Owners in their sole discretion agree to deliver the Vessel under this Charter to the Charterers before all of the documents and evidence required by this Clause 39 have been delivered to or to the order of the Owners, the
Charterers undertake to deliver all outstanding documents and evidence to or to the order of the Owners no later than seven (7) Business Days after the Actual Delivery Date or such other date as specified by the Owners, acting in their
sole discretion. The delivery of the Vessel by the Owners to the Charterers under this Charter shall not, unless otherwise notified by the Owners (acting in their sole discretion) to the Charterers in writing, be taken as a waiver of the
Owners’ right to require production of all the documents and evidenced required by this Clause 40.
|
41. |
BUNKERS AND LUBOILS
|
41.1 |
At delivery the Charterers shall take over all bunkers, lubricating oil, hydraulic oil, greases, water and unbroached stores and provisions in the Vessel without cost.
|
41.2 |
To the extent that Clause 46 (Redelivery) applies, at redelivery the Owners shall take over all bunkers, unused lubricating oil, hydraulic oil, greases, water and unbroached provisions and other consumable stores in the Vessel.
|
42. |
FURTHER MAINTENANCE AND OPERATION
|
42.1 |
The good commercial maintenance practice under Clause 10 (Maintenance and Operation) (Part II) of this Charter shall be deemed to include:
|
|
(a) |
the maintenance and operation of the Vessel by the Charterers in accordance with (as the following are amended from time to time):
|
|
(i) |
the relevant regulations, requirements and recommendations of the Classification Society;
|
|
(ii) |
the relevant regulations, requirements and recommendations of the country and flag of the Vessel’s registry;
|
|
(iii) |
any applicable IMO regulations (including but not limited to the ISM Code, the ISPS Code and MARPOL);
|
|
(iv) |
all other applicable laws or regulations; and
|
|
(v) |
Charterers’ current standard operations and maintenance manuals;
|
|
(b) |
the maintenance and operation of the Vessel by the Charterers taking into account:
|
|
(i) |
engine manufacturers’ recommended maintenance and service schedules;
|
|
(ii) |
builder’s operations and maintenance manuals; and
|
|
(iii) |
recommended maintenance and service schedules of all installed equipment and pipework.
|
42.2 |
In addition to the above, the Charterers covenant with the Owners to arrange online access to class records for the Owners as available to the Charterers.
|
42.3 |
Any equipment that is found not to be required on board as a result of law or regulation is either to be removed at the Charterers expense or to be maintained in operable condition.
|
42.4 |
The title to any equipment:
|
|
(a) |
placed on board as a result of operational requirements of the Charterers shall automatically be deemed to belong to the Owners (unless hired from or belonging to a third party) immediately upon such placement, and such equipment may
only be removed: (A) with the Owners’ prior written consent, (B) at the Charterers’ own expense, and (C) without damage to the Vessel; and
|
|
(b) |
replaced, renewed or substituted shall remain with the Owners until the part or equipment which replaced it or the new or substitute part or equipment becomes property of the Owners.
|
42.5 |
Without prejudice to any other provisions under this Charter, the Charterers shall maintain, use and operate the Vessel with commercially reasonable care as if the Charterers were the owner of the same.
|
43. |
STRUCTURAL CHANGES AND ALTERATIONS
|
43.1 |
Unless required by the Classification Society, compulsory legislation or pursuant to the terms of any Sub-charter, the Charterers shall make no material structural changes in the Vessel or material changes in the machinery, engines,
appurtenances or spare parts thereof without in each instance first securing the Owners’ consent thereto, such consent not to be unreasonably withheld or delayed, provided that:
|
|
(a) |
any such changes do not have a material adverse effect on the Vessel’s certification or the Vessel’s fitness for purpose;
|
|
(b) |
any such changes will not materially diminish the value of the Vessel and/or have a material adverse effect on the safety, performance, value or marketability of the Vessel;
|
|
(c) |
the Charterers shall bear all time, costs and expenses in relation to any such changes;
|
|
(d) |
the Charterers shall furnish the Owners with:
|
|
(i) |
copies of all plans in relation to such changes;
|
|
(ii) |
if applicable, confirmation from the Classification Society that such changes will not adversely affect the class of the Vessel, provided always that such Classification Society agrees to issue such confirmation;
|
|
(iii) |
one Valuation Report (at the Charterers’ cost) on the Market Value of the Vessel after the implementation of such changes.
|
43.2 |
Upon the occurrence of any Termination Event which is continuing, if the Owners decide to retake possession of the Vessel, the Charterers shall at their expense restore the Vessel to its former condition unless the changes made are
carried out:
|
|
(a) |
to improve the performance, operation or marketability of the Vessel; or
|
|
(b) |
as a result of a regulatory compliance.
|
43.3 |
Any improvement, structural changes or new equipment becoming necessary for the continued operation of the Vessel by reason of new class requirements or by compulsory legislation shall be for the Charterers’ account and the Charterers
shall not have any right to recover from the Owners any part of the cost for such improvements, changes or new equipment either during the Charter Period or, to the extent that Clause 46 (Redelivery)
applies, at redelivery of the Vessel. The Charterers shall give written notice to the Owners of any such improvement, structural changes or new equipment.
|
44. |
HIRE
|
44.1 |
In consideration of the Owners’ agreement to charter the Vessel to the Charterers pursuant to the terms hereof, the Charterers agree to pay to the Owners an amount of interest on the Paid Instalments (excluding, for the avoidance of
any doubt, the delivery instalment), accruing at the rate of three (3) month LIBOR plus 4.0 per cent. per annum (the “Accrued Charterhire”), with such amount being accrued and payable quarterly in
arrears.
|
44.2 |
The Accrued Charterhire shall be, for the avoidance of any doubt, non-refundable under all circumstances.
|
44.3 |
In consideration of the Owners’ agreement to charter the Vessel to the Charterers pursuant to the terms hereof, the Charterers agree to pay to the Owners the following sums on the relevant dates as follows:
|
|
(a) |
on each and every Hire Payment Date, pay to the Owners the relevant amount then payable on the corresponding Hire Payment Date (the “Fixed Hire”) as determined by reference to the amount set out
opposite such Hire Payment Date under the heading “Fixed Hire” in the hire payment schedule as attached as Schedule 3 (Hire Payment Schedule) hereto (the “Hire Payment Schedule”);
|
|
(b) |
for the purpose of determining any Monthly Hire payment:
|
|
(i) |
the Charterers hereby expressly acknowledge that the Hire Payment Schedule in its current form and content as attached hereto (i) is based on the Assumed
|
|
(ii) |
accordingly, should the Parties agree to a change in the Assumed Owners’ Cost or the Charterers make a partial pre-payment, the Owners shall deliver to the Charters an amended Hire Payment Schedule at such time (including, without
limitation, the cost Balance) reflecting the resulting pro-rata adjustments for the Charterers’ review and approval, which shall thereafter:
|
|
(A) |
constitute the current Hire Payment Schedule; and
|
|
(B) |
save for manifest error, be conclusive evidence of the rate of Fixed Hire payable under this Charter; and
|
|
(iii) |
for the avoidance of doubt and notwithstanding any provisions in this Clause 44 (Hire), the Charterers’ obligation to pay Monthly Hire as calculated in accordance with the formula set out in
Clause 44(b)(ii)(B) above shall remain at all times, whether or not the Owners provide any amended Hire Payment Schedule.
|
|
(c) |
All payments of Fixed Hire shall be paid in advance on each Hire Payment Date (prior to 16:00, Shanghai time) (in respect of which time is of the essence) with the first (1st) instalment falling due on the Actual Delivery
Date.
|
|
(d) |
Any payment provided herein due on any day which is not a Business Day shall be payable on the following Business Day.
|
|
(e) |
All payments under this Charter shall be made to the account notified by the Owners to the Charterers prior to the first Hire Payment Date (or such other account as the Owners may thereafter notify the Charterers from time to time) for
credit to such account notified by the Owners.
|
|
(f) |
Following delivery of the Vessel to, and acceptance by, the Charterers under this Charter, the Charterers’ obligation to pay Fixed Hire in accordance with this Clause 44 shall be absolute irrespective of any contingency whatsoever
including but not limited to:
|
|
(i) |
any set-off (save as permitted under Clause 44.1), counterclaim, recoupment, defence or other right which the Charterers may have against the Owners, the Finance Parties or any other third party (unless otherwise agreed between the
Owners and the Charterers);
|
|
(ii) |
any unavailability of the Vessel, for any reason, including but not limited to seaworthiness, condition, design, operation, merchantability or fitness for use or purpose of the Vessel or any apparent or latent defects in the Vessel or
its machinery and equipment or the ineligibility of the Vessel for any particular use or trade or for registration of documentation under the laws of any relevant jurisdiction or lack of registration or the absence or withdrawal of any
consent required under the applicable law of any relevant jurisdiction for the ownership, chartering, use or operation of the Vessel or any damage to the Vessel;
|
|
(iii) |
any lack or invalidity of title or any other defect in title;
|
|
(iv) |
any failure or delay on the part of either party to this Charter, whether with or without fault on its part, in performing or complying with any of the terms, conditions or other provisions of this Charter;
|
|
(v) |
any insolvency, bankruptcy, reorganisation, arrangement, readjustment of debt, dissolution, administration, liquidation or similar proceedings by or
|
|
(vi) |
any invalidity or unenforceability or lack of due authorisation of or any defect in this Charter;
|
|
(vii) |
any other cause which would but for this provision have the effect of terminating or in any way affecting the obligations of the Charterers hereunder,
|
|
(g) |
All payments of Fixed Hire and all other Unpaid Sums to the Owners pursuant to this Charter and the other relevant Transaction Documents shall be made in immediately available funds in US Dollars, free and clear of, and without
deduction or withholding for or on account of, any Taxes (unless otherwise agreed between the Owners and the Charterers).
|
|
(h) |
In the event that the Charterers are required by any law or regulation to make any deduction or withholding on account of any taxes which arise as a consequence of any payment due under this Charter, then:
|
|
(i) |
the Charterers shall notify the Owners promptly after they become aware of such requirement;
|
|
(ii) |
the Charterers shall remit the amount of such taxes to the appropriate taxation authority within three (3) Business Days or any other applicable shorter time limits and in any event prior to the date on which penalties attach thereto;
and
|
|
(iii) |
such payment shall be increased by such amount as may be necessary to ensure that the Owners receive a net amount which, after deducting or withholding such taxes, is equal to the full amount which the Owners would have received had
such payment not been subject to such taxes.
|
|
(i) |
The Charterers shall forward to the Owners evidence reasonably satisfactory to the Owners that any such taxes have been remitted to the appropriate taxation authority within thirty (30) days of the expiry of any time limit within which
such taxes must be so remitted or, if earlier, the date on which such taxes are so remitted.
|
|
(j) |
Subject to sub-paragraph 54.1)(a) of Clause 54 (Termination Events), if the Charterers fail to pay any amount payable by it under a Transaction Document on its due date, interest shall accrue on
a daily basis over the Unpaid Sum from the due date up to the date of actual payment (both before and after judgment) at a rate of 8% per annum.
|
|
(k) |
In the event that this Charter is terminated for whatever reason, the Charterers’ obligation to pay Fixed Hire, and such other Unpaid Sum which (in each case) has accrued due before, and which remains unpaid, at the date of such
termination shall continue notwithstanding such termination.
|
|
(l) |
In the event that it becomes unlawful or it is prohibited for either the Owners or the Charterers to charter the Vessel pursuant to this Charter, then the Owners and Charterers, if such new or changed law or regulation or such
interpretation or application permit, shall notify the other party of the relevant event and negotiate in good faith for a period of thirty (30) days from the date of the receipt of the relevant notice by the other party to agree an
alternative. If such agreement is not reached within such thirty (30)-day period, the Charterers agree that, in such circumstances, the
|
|
(m) |
Subject to paragraph (o) below, the Charterers shall, within three (3) Business Days of a demand by the Owners, pay to the Owners the amount of any Increased Costs incurred by the Owners as a result of (i) the introduction of or any
change in (or in the interpretation, administration or application of) any law or regulation or (ii) compliance with any law or regulation made after the date of this Charter.
|
|
(i) |
“Increased Costs” means:
|
|
(A) |
a reduction in the rate of return from the Fixed Hire or on the Owners’ overall capital;
|
|
(B) |
an additional or increased cost; or
|
|
(C) |
a reduction of any amount due and payable under any Transaction Document,
|
|
(n) |
The Owners shall notify the Charterers of any claim arising from paragraph (m) above (and of the event giving rise to such claim). The Owners shall, as soon as practicable after having made a demand in respect of such claim, provide a
certificate confirming the amount of its Increased Costs as well as evidence supporting its calculation.
|
|
(o) |
Paragraph (m) above does not apply to the extent any Increased Costs is:
|
|
(i) |
compensated for by a payment made under paragraph (h)(iii) above; or
|
|
(ii) |
attributable to the wilful breach by the Owners of any law or regulation.
|
45. |
INSURANCE
|
45.1 |
During the Agreement Term, the Charterers shall at their expense keep the Vessel insured against fire and usual marine risks (including hull and machinery and excess risks), oil pollution liability risks, war and protection and
indemnity risks (and any risks against which it is compulsory to insure for the operation for the Vessel) in US Dollars and in such market and on such terms as the Owners and the Finance Parties (if any) shall in writing approve45 in line
with good shipping practise.
|
45.2 |
Such insurances shall be arranged by the Charterers to protect the interests of the Owners, the Charterers and (if any) the mortgagee of the Vessel (but if there exists any mortgagee, the Charterers shall request such mortgagee to
agree to enter into a quiet enjoyment agreement with the Charterers in such form as the parties may agree but nothing herein shall prohibit the Owners from granting such mortgage in favour of a Finance Party under a Finance Document) or
such other relevant Finance Party, and the Charterers shall be at liberty to protect under such insurances the interests of any Approved Manager.
|
45.3 |
Insurance policies shall cover the Owners, the Charterers and (if any) the Finance Parties according to their respective interests. Subject to the approval of the Owners (acting on the instructions or with the approval of the Finance
Parties (in each case if applicable) and the insurers, the Charterers shall effect all insured repairs and shall undertake settlement and reimbursement from the insurers of all costs in connection with such repairs as well as insured
|
45.4 |
The Charterers shall also remain responsible for and to effect repairs and settlement of costs and expenses incurred thereby in respect of all other repairs not covered by the insurances and/or not exceeding any possible franchise(s)
or deductibles provided for in the insurances.
|
45.5 |
The Charterers shall arrange that, at any time during the Agreement Term, the hull and machinery and war risks insurance shall be in an amount not less than the greater of:
|
|
(a) |
an amount which equals one hundred and twenty per cent (120%) of the Cost Balance; and
|
|
(b) |
the current Market Value of the Vessel.
|
45.6 |
The terms of the hull and machinery insurance and the identity of the insurers shall be acceptable to the Owners and (if any) the Finance Parties. The Vessel shall be entered in a P&I Club which is a member of the International
Group Association on customary terms and shall be covered against liability for pollution claims in an amount not less than one billion US Dollars (US$1,000,000,000). The P&I cover shall be placed with a P&I Club acceptable to the
Owners and (if any) the Finance Parties. All insurances shall include customary protection in favour of the Owners and (if any) the Finance Parties as notice of cancellation and exclusion from liability for premiums or calls. The
insurance policies or cover notes for the hull and machinery insurance shall name the Owners as co-assured, endorsing its rights and interests. The Owners shall be entered as a member for the P&I cover and war risks insurance.
|
45.7 |
The Charterers:
|
|
(a) |
undertake to place the Insurances in such markets, in such currency, on such terms and conditions, and with such brokers, underwriters and associations as the Owners and, if applicable, the Finance Parties shall have previously
approved in writing such approval not be unreasonably withheld; and
|
|
(b) |
shall not alter the terms of any of the Insurances nor allow any person (except the Approved Manager) to be co-assured under any of the Insurances without the prior written consent of the Owners and, if applicable, the Finance Parties,
and will supply the Owners and, if applicable, the Finance Parties from time to time on request with such information as the Owners and, if applicable, any Finance Party may in their discretion require with regard to the Insurances and
the brokers, underwriters or associations through or with which the Insurances are placed.
|
45.8 |
The Charterers undertake duly and punctually to pay all premiums, calls and contributions, and all other sums at any time payable in connection with the Insurances, and, at their own expense, to arrange and provide any guarantees from
time to time required by any protection and indemnity or war risks association. The Charterers shall provide the Owners and/or such Finance Party with (i) copies of all invoices issued by the brokers, underwriters or associations in
respect of such premiums calls, contributions and other sums, and (ii) evidence satisfactory to the Owners and/or such Finance Party that such premiums, calls, contributions and other sums have been duly and punctually paid; that any such
guarantees have been duly given; and that all declarations and notices required by the terms of any of the Insurances to be made or given by or on behalf of the Charterers to brokers, underwriters or associations have been duly and
punctually made or given.
|
45.9 |
The Charterers will comply in all respects with all terms and conditions of the Insurances and will make all such declarations to brokers, underwriters and associations as may be required to enable the Vessel to operate in accordance
with the terms and conditions of the Insurances. The Charterers will not do, nor permit to be done, any act, nor make, nor permit to be made, any omission, as a result of which any of the Insurances may become liable to be suspended,
cancelled or avoided, or may become unenforceable, or as a result of which any sums payable under or in connection with any of the Insurances may be reduced or become liable to be repaid
|
45.10 |
The Charterers will endeavour and before the expiry of any of the Insurances renew them and shall as soon as reasonably thereafter (but in any event within fifteen (15) days after the relevant renewals) give the Owners and, if
applicable, the Finance Parties such details of those renewals as the Owners and, if applicable, the Finance Parties may require.
|
45.11 |
The Charterers shall deliver to the Owners and, if applicable, the Finance Parties certified copies (and, if required by the Owners and/or (if applicable) any Finance Parties, the originals) of all policies, certificates of entry
(endorsed with the appropriate loss payable clauses as may be required by the Owners and the Finance Parties from time to time) and other documents relating to the Insurances (including, without limitation, receipts for premiums, calls or
contributions) and shall procure that letters of undertaking in such form as the Owners and, if applicable, the Finance Parties may approve shall be issued to the Owners and, if applicable, the Finance Parties by the brokers through which
the Insurances are placed (or, in the case of protection and indemnity or war risks associations, by their managers). If the Vessel is at any time during the Agreement Term insured under any form of fleet cover, the Charterers shall
procure that those letters of undertaking contain confirmation that the brokers, underwriters or association (as the case may be) will not set off claims relating to the Vessel against premiums, calls or contributions in respect of any
other vessel or other insurance, and that the insurance cover of the Vessel will not be cancelled by reason of non-payment of premiums, calls or contributions relating to any other vessel or other insurance. Failing receipt of those
confirmations, the Charterers will instruct the brokers, underwriters or association concerned to issue a separate policy or certificate for the Vessel in the sole name of the Charterers or of the Charterers’ brokers as agents for the
Charterers.
|
45.12 |
Upon the Owners’ reasonable request, the Charterers shall provide the Owners and, if applicable, the Finance Parties with full information available to the Charterers regarding any casualty or other accident or damage to the Vessel,
including, without limitation, any communication with all parties involved in case of a claim under any of the Insurances.
|
45.13 |
The Charterers agree that, at any time after the occurrence of a Termination Event which is continuing, the Owners and, if applicable, the Finance Parties shall be entitled to collect, sue for, recover and give a good discharge for all
claims in respect of any of the Insurances; to pay collecting brokers the customary commission on all sums collected in respect of those claims; to compromise all such claims or refer them to arbitration or any other form of judicial or
non-judicial determination; and otherwise to deal with such claims in such manner as the Owners and, if applicable, the Finance Parties shall in their discretion think fit.
|
45.14 |
Whether or not a Termination Event shall have occurred, the proceeds of any claim under any of the Insurances in respect of a Total Loss shall be paid and applied in accordance with Clause 61 (Total
Loss).
|
45.15 |
In the event of any claim in respect of any of the Insurances (other than in respect of a Total Loss), if the Charterers shall fail to reach agreement with any of the brokers, underwriters or associations for the immediate restoration
of the Vessel, or for payment to third parties, within such time as the Owners and, if applicable, the Finance Parties may stipulate, the Owners and, if applicable, the Finance Parties shall be entitled to require payment to itself. In
the event of any dispute arising between the Charterers and any broker, underwriter or association with respect to any obligation to make any payment to the Charterers or to the Owners and/or (if applicable) the Finance Parties under or
in connection with any of the Insurances, or with respect to the amount of any such payment, the Owners and/or (if applicable) the Finance Parties shall be entitled to settle that dispute directly with the broker, underwriter or
association concerned. Any such settlement shall be binding on the Charterers.
|
|
(a) |
implement any recommendations contained in the reports issued following the surveys referred to in sub-paragraph Error! Reference source not found. above within the relevant time limits, and
provide evidence satisfactory to the Owners and, if applicable, the Finance Parties that the protection and indemnity insurers are satisfied that this has been done; and
|
|
(b) |
in addition to the foregoing (if such trade is in the United States of America and Exclusive Economic Zone):
|
|
(i) |
obtain and retain a certificate of financial responsibility under the Act in form and substance satisfactory to the United States Coast Guard and provide the Owners with evidence of the same;
|
|
(ii) |
procure that the protection and indemnity insurances do not contain a US Trading Exclusion Clause or any other analogous provision and provide the Owners with evidence that this is so; and
|
|
(iii) |
comply strictly with any operational or structural regulations issued from time to time by any relevant authorities under the Act so that at all times the Vessel falls within the provisions which limit strict liability under the Act
for oil pollution.
|
45.17 |
The Owners shall be at liberty to, in relation to the Vessel, take out Lessor’s or Innocent Owners’ Interest Insurance and Lessor’s Additional Peril (Pollution) insurance on such terms and conditions as the Owners may from time to time
decide. The Charterers shall from time to time upon the Owners’ demand reimburse the Owners for all costs, premiums and expenses paid or incurred by the Owners in connection with such Lessor’s or Innocent Owners’ Interest Insurance and
Lessor’s Additional Peril (Pollution) insurance, but only to the extent corresponding to each of the Lessor’s or Owners’ Interest Insurance or Lessor’s Additional Peril (Pollution) insurance for an amount not exceeding one hundred and
twenty per cent (120%) of the then current Cost Balance.
|
45.18 |
Any Finance Party shall be at liberty to take out a Mortgagees’ Interest Insurance in relation to the Vessel on such terms and conditions as that Finance Party may from time to time decide. The Charterers shall from time to time upon
the Owners’ demand reimburse the Owners for all costs, premiums and expenses paid or incurred by the Owners or that Finance Party in connection with such Mortgagees’ Interest Insurance, but only to the extent corresponding to a
Mortgagee’s Interest Insurance for an amount not exceeding one hundred and twenty per cent. (120%) of the amount then outstanding under any loan made available by the Finance Parties pursuant to any Finance Documents.
|
45.19 |
The Owners shall be at liberty to, in relation to the Vessel, take out freight, demurrage and defence cover on such terms and conditions as the Owners may from time to time decide. The Charterers shall from time to time upon the
Owners’ demand reimburse the Owners for all costs, premiums and expenses paid or incurred by the Owners in connection with such cover, but only to the extent corresponding to such cover for an amount not exceeding one hundred and twenty
per cent (120%) of the then current Cost Balance.
|
46. |
REDELIVERY
|
47. |
REDELIVERY CONDITIONS
|
|
(a) |
In addition to what has been agreed in Clauses 15 (Redelivery) (Part II) and 46 (Redelivery), the condition of the Vessel shall at redelivery be as
follows:
|
|
(i) |
the Vessel shall be free of any class and statutory recommendations affecting its trading certificates;
|
|
(ii) |
the Vessel must be redelivered with all equipment and spares or replacement items listed in the delivery inventory carried out pursuant to Clause 9 (Inventories, Oil and Stores) (Part II) and
any spare parts on board or on order for any equipment installed on the Vessel following delivery (provided that any such items which are on lease or hire purchase shall be replaced with items of an equivalent standard and condition fair
wear and tear excepted); all records, logs, plans, operating manuals and drawings, spare parts onboard shall be included at the time of redelivery in connection with a transfer of the Vessel or such other items as are then in the
possession of the Charterers shall be delivered to the Owners;
|
|
(iii) |
the Vessel must be redelivered with all national and international trading certificates and hull/machinery survey positions for both class and statutory surveys free of any overdue recommendation and qualifications valid and
un-extended for a period of at least three (3) months beyond the redelivery date;
|
|
(iv) |
all of the Vessel’s ballast tank coatings to be maintained in “Fair” (as such term (or its equivalent) may be defined and/or interpreted in the relevant survey report) condition as appropriate for the Vessel’s age at the time of
redelivery, fair wear and tear excepted;
|
|
(v) |
the Vessel shall have passed any flag or class surveys or inspections due within three (3) months after the date of redelivery and have its continuous survey system up to date;
|
|
(vi) |
the Vessel must be re-delivered with accommodation and common spaces for crew and officers substantially in the same condition as at the Actual Delivery Date, free of damage over and above fair wear and tear, clean and free of
infestation and odours; with cargo spaces generally fit to carry the cargoes originally designed and intended for the Vessel; with main propulsion equipment, auxiliary equipment, cargo handling equipment, navigational equipment, etc., in
such operating condition as provided for in this Charter;
|
|
(vii) |
the Vessel shall be free and clear of all liens other than those created by or on the instruction of the Owners;
|
|
(viii) |
the condition of the cargo holds to be in accordance with the maintenance regime undertaken by the Charterers during the Charter Period since delivery with allowance for legitimate cargoes carried since the last major maintenance
programme;
|
|
(ix) |
at the costs and expenses of the Charterers, a final joint report from the surveyors appointed by the Owners and the Charterers respectively shall be carried out as to the condition of the Vessel and a list of agreed deficiencies if
any shall be drawn up;
|
|
(x) |
the anti-fouling coating system applied at the last scheduled dry-docking shall be in accordance with prevailing regulations at the time of application;
|
|
(xi) |
the funnel markings and name (unless being maintained by the Owner following redelivery) shall be painted out by the Charterers; and
|
|
(xii) |
recently taken lube oil samples for all major machinery shall be made available within one (1) week of redelivery and results forwarded to Owners’ technical management for review.
|
|
(b) |
At redelivery, the Charterers shall ensure that the Vessel shall meet the following performance levels (which where relevant shall be determined by reference to the Vessel’s log books):
|
|
(i) |
all equipment controlling the habitability of the accommodation and service areas to be in proper working order, fair wear and tear excepted; and
|
|
(ii) |
available deadweight to be within one per cent (1%) of that achieved at delivery (as the same may be adjusted as a result of any upgrading of the Vessel carried out in accordance with this Charter (such adjustment to be agreed between
the Owners and Charterers at the time such upgrading work is to be undertaken);
|
|
(c) |
The Owners and Charterers shall each appoint (at the Charterers’ cost and expense) surveyors for the purpose of determining and agreeing in writing the condition of the Vessel at redelivery.
|
|
(d) |
If the Vessel is not in the condition or does not meet the performance criteria required by this Clause 47, a list of deficiencies together with the costs of repairing/remedying such deficiencies shall be agreed by the respective
surveyors.
|
|
(e) |
The Charterers shall be obliged to repair any class items restricting the operation or trading of the Vessel prior to redelivery.
|
|
(f) |
The Charterers shall be obliged to repair/remedy all such other deficiencies as are necessary to put the Vessel into the return condition required by this Clause 47.
|
|
(g) |
Until such time as any compensatory amount in respect of any repairs/remedial work outstanding as at redelivery has been paid in accordance with the terms of this Charter and the Vessel has been redelivered, the Charterers shall
continue to pay the Fixed Hire in accordance with the terms of this Charter.
|
48. |
OWNERS’ MORTGAGE
|
48.1 |
If required by the Sub-Charterer, the Owner shall procure, or provide, as the case may be a quiet enjoyment letter in wording to be reasonably agreed between the parties, the Charterers:
|
|
(a) |
acknowledge that the Owners are entitled and do intend to enter or have entered into certain funding arrangements with the Finance Parties in order to finance part of the Owners’ Cost, which funding arrangements may be secured, inter
alia, by ship mortgages over the Vessel and (along with other related matters) the relevant Finance Documents;
|
|
(b) |
irrevocably consent to any assignment in favour of the Finance Parties pursuant to the relevant Finance Documents of the Charterers’ rights, interests and benefits in and to the Insurances, Earnings, Requisition Compensation and any
guarantee in favour of the Charterers for the performance of the obligations of any Sub-charterer under any Sub-charter; and
|
|
(c) |
without limiting the generality of paragraph 52.14 of Clause 52 (Charterers’ undertakings), undertake to execute, provide or procure the execution or provision (as the case may be) of such further reasonably information or document as
are necessary to effect the assignment referred to in paragraph (b) above.
|
|
(d) |
Without prejudice to the foregoing, the Owners’ may assign, transfer or novate their rights under this Charter without the prior written consent of the Charterers.
|
49. |
DIVER’S INSPECTION AT REDELIVERY
|
49.1 |
Unless the Vessel is returned in dry-dock, a diver’s inspection is required to be performed at the time of redelivery.
|
49.2 |
The Charterers shall, at the written request of the Owners, arrange at the Charterers’ time and expense for an underwater inspection by a diver approved by the Classification Society immediately prior to the redelivery.
|
49.3 |
A video film of the inspection shall be made. The extent of the inspection and the conditions under which it is performed shall be to the satisfaction of the Classification Society.
|
49.4 |
If damage to the underwater parts is found, the Charterers shall arrange, at their time and costs, for the Vessel to be dry-docked and repairs carried out to the satisfaction of the Classification Society.
|
49.5 |
If the conditions at the port of redelivery are unsuitable for such diver’s inspection, the Charterers shall take the Vessel (in Owners’ time but at Charterers’ expense) to a suitable alternative place nearest to the redelivery port
unless an alternative solution is agreed.
|
50. |
TRANSPORT DOCUMENTS
|
51. |
CHARTERERS’ REPRESENTATIONS AND WARRANTIES
|
51.1 |
The Charterers represent and warrant to the Owners on the date of this Charter and (by reference to the facts and circumstances then pertaining) on, each payment date for making payment of the Paid Instalments, the Actual Delivery Date
and each Hire Payment Date as follows (except that (1) the representation and warranty contained in paragraph (g) and (x) below shall only be made on the date of this Charter, each payment date for making payment of the Paid Instalments
and on the Actual Delivery Date, and (2) the representations and warranties in paragraph (b) below shall only be made on the date of this Charter):
|
|
(a) |
Status and due authorisation: each Obligor is a corporation, limited partnership or limited liability company duly incorporated or formed under the laws of its jurisdiction
of incorporation or formation (as the case may be) with power to enter into the Transaction Documents and the Project Documents (to which it is a party) and to exercise its rights and perform its obligations under the Transaction
Documents and the Project Documents (to which it is a party) and all corporate and other action required to authorise its execution of the Transaction Documents and the Project documents (to which it is a party) and its performance of its
obligations thereunder has been duly taken;
|
|
(b) |
No deductions or withholding: under the laws of the Obligors’ respective jurisdictions of incorporation or formation in force at the date hereof, none of the Obligors will be
required to make any deduction or withholding from any payment it may make under any of the Transaction Documents;
|
|
(c) |
Claims pari passu: under the laws of the Obligors’ respective jurisdictions of incorporation or formation in force at the date hereof, the payment obligations of each Obligor
under each Transaction Document to which it is a party, rank at least pari passu with the claims of all other unsecured and unsubordinated creditors of such obligor save for any obligations which
are preferred solely by any bankruptcy, insolvency or other similar laws of general application;
|
|
(d) |
No Immunity: in any proceedings taken in any of the Obligors’ respective jurisdictions of incorporation or formation in relation to any of the Transaction Documents, none of
the Obligors will be entitled to claim for itself or any of its assets immunity from suit, execution, attachment or other legal process;
|
|
(e) |
Governing law and judgments: in any proceedings taken in any of the Obligors’ jurisdiction of incorporation or formation in relation
to any of the Transaction Documents in which there is an express choice of the law of a particular country as the governing law thereof, that choice of law and any judgment or (if applicable) arbitral award obtained in that country will
be recognised and enforced;
|
|
(f) |
Validity and admissibility in evidence: as at the date hereof, all acts, conditions and things required to be done, fulfilled and performed in order (A) to enable each of the
Obligors lawfully to enter into, exercise its rights under and perform and comply with the obligations expressed to be assumed by it in the Transaction Documents and the Project Documents to which it is a party, (B) to ensure that the
obligations expressed to be assumed by each of the Obligors in the Transaction Documents and the Project Documents are legal, valid and binding, and (C) to make the Transaction Documents and the Project Documents to which it is a party
admissible in evidence in the jurisdictions of incorporation or formation of each of the Obligors, have been done, fulfilled and performed;
|
|
(g) |
No filing or stamp taxes: under the laws of the Obligors’ respective jurisdictions of incorporation or formation in force at the date hereof, it is not necessary that any of
the Transaction Documents to which it is a party be filed, recorded or enrolled with any court or other authority in its jurisdiction of incorporation or formation (other than the Registrar of Companies for England and Wales or the
relevant maritime registry, to the extent applicable) or that any stamp, registration or similar tax be paid on or in relation to any of the Transaction Document except that the Charterers’ Assignment, the Manager’s Undertakings and the
Account Charge shall be filed against the Charterers with the Marshall Islands within one month of the date of execution of such document;
|
|
(h) |
Binding obligations: the obligations expressed to be assumed by each of the Obligors in the Transaction Documents and the Project Documents to which it is a party are legal
and valid obligations, binding on each of them in accordance with the terms of such Transaction Documents and the Project Documents and no limit on any of their powers will be exceeded as a result of the borrowings, granting of security
or giving of guarantees contemplated by such Transaction Documents and the Project Documents or the performance by any of them of any of their obligations thereunder;
|
|
(i) |
No misleading information: to the best of its knowledge, any factual information provided by any Obligor to the Owners in connection with the Transaction Documents was true
and accurate in all material respects as at the date it was provided and is not misleading in any material respect;
|
|
(j) |
No winding-up: none of the Obligors has taken any corporate, limited liability company or limited partnership action nor have any other steps been taken or legal proceedings
been started or (to the best of the Charterers’ knowledge and belief) threatened against any Obligor for its winding-up, dissolution, administration or reorganisation or for the appointment of a receiver, administrator, administrative
receiver, trustee or similar officer of it or of any or all of its assets or revenues which might have a Material Adverse Effect ;
|
|
(k) |
Solvency:
|
|
(i) |
None of the Obligors is unable, or admits or has admitted its inability, to pay its debts or has suspended making payments in respect of any of its debts;
|
|
(ii) |
None of the Obligors by reason of actual or anticipated financial difficulties, has commenced, or intends to commence, negotiations with one or more of its creditors with a view to rescheduling any of its indebtedness.
|
|
(iii) |
The value of the assets of each Obligor is not less than the liabilities of such Obligor (as the case may be) (taking into account contingent and prospective liabilities).
|
|
(iv) |
No moratorium has been, declared in respect of any indebtedness of any Obligor.
|
|
(l) |
No material defaults:
|
|
(i) |
Without prejudice to paragraph (ii) below, none of the Obligors are in breach of or in default under any agreement to which it is a party or which is binding on it or any of its assets to an extent or in a manner which might have a
Material Adverse Effect.
|
|
(ii) |
No Potential Termination Event or Termination Event is continuing or might reasonably be expected to result from each Obligor’s entry into and performance of each Transaction Document to which such Obligor is a party;
|
|
(m) |
No material proceedings: no material action or administrative proceeding of or before any court, arbitral body or agency which is not covered by adequate insurance or which
might have a Material Adverse Effect has been started;
|
|
(n) |
Accounts: all financial statements relating to the Charterers required to be delivered under paragraph 52.1 of Clause 52 (Charterers’
undertakings), were each prepared in accordance with GAAP, (in conjunction with the notes thereto) fairly represent the financial condition of the Charterers at the date as of which they were prepared and the results of their
operations during the financial period then ended;
|
|
(o) |
No obligation to create Security Interest: the execution of the Transaction Documents by the Obligors and their exercise of their rights and performance of their obligations
thereunder will not result in the existence of nor oblige any Obligor to create any Security Interest over all or any of their present or future revenues or assets, other than pursuant to the Security Documents to which they are a party;
|
|
(p) |
No breach: the execution of the Transaction Documents and the Project Documents by each of the Obligors and their exercise of their rights and performance of their
obligations under any of the Transaction Documents and the Project Documents to which they are a party do not constitute and will not result in any breach of any agreement or treaty to which any of them is a party;
|
|
(q) |
Security: each of the Obligors is the legal and beneficial owner of all assets and other property which it purports to charge, mortgage, pledge, assign or otherwise secure
pursuant to each Security Document and those Security Documents to which it is a party create and give rise to valid and effective security having the ranking expressed in those Security Documents;
|
|
(r) |
Necessary authorisations: the Necessary Authorisations required by each Obligor are in full force and effect, and each Obligor is in compliance with the material provisions
of each such Necessary Authorisation relating to it and, to the best of its knowledge, none of the Necessary Authorisations relating to it are the subject of any pending or threatened proceedings or revocation;
|
|
(s) |
No money laundering: the performance of the obligations of the Obligors under the Transaction Documents and the Project Documents, will be for the account of members of the
respective Obligor(s) and will not involve any breach by any of them of any law or regulatory measure relating to “money laundering” as defined in Article 1 of the
|
|
(t) |
Disclosure of material facts: the Charterers are not aware of any material facts or circumstances which have not been disclosed to the Owners and which might, if disclosed,
have reasonably been expected to materially adversely affect the decision of a person considering whether or not to enter into the Transaction Documents.
|
|
(u) |
Environmental laws:
|
|
(i) |
Each of the Charter Guarantors is in compliance with paragraph 52.8 of Clause 52 (Charterers’ undertakings) and (to the best of its knowledge and belief) no circumstances have occurred which
would prevent such compliance in a manner or to an extent which has or is reasonably likely to have a Material Adverse Effect. No Environmental Claim has been commenced or (to
the best of the Charterers’ knowledge and belief) is threatened against any of the Charter Guarantor where that claim has or is reasonably likely, if determined against the Charter Guarantor, to have a Material Adverse Effect.
|
|
(v) |
Taxation
|
|
(i) |
No Obligor is materially overdue in the filing of any Tax returns and no Obligor overdue in the payment of any amount in respect of Tax of one million US Dollars (US$1,000,000) (or its equivalent in any other currency) or more, save in
the case of Taxes which are being contested in good faith.
|
|
(ii) |
As far as the Charterers are aware, each of the Obligors (save for the Approved Manager) is resident for Tax purposes only in the jurisdiction of its incorporation.
|
|
(w) |
No Restricted Party: no Obligor is a Restricted Party nor has any Obligor or any of their respective directors, officers or employees or any person acting on their behalf
received notice or are aware of any claim, action, suit, proceeding or investigation against any of them with respect to Sanctions by a Sanctions Authority.
|
|
(x) |
No Material Adverse Effect: no event or circumstance which has occurred which has a Material Adverse Effect.
|
|
(y) |
Status of Project Documents: The copies of the Project Documents delivered to the Lender are true and complete copies. The Project Documents constitute legal, valid, binding
and enforceable obligations of the parties to them in accordance with their respective terms except insofar as enforcement may be limited by any applicable laws relating to bankruptcy, insolvency, administration and similar laws affecting
creditors’ rights generally and by principles of equity. No amendments or additions to the Project Documents have been agreed nor has any party to any Project Document waived any of its respective rights under that Project Document
(except as those notified to the Owners in writing and, if consent of the Owners are required pursuant to this Charter, as consented to by the Owners).
|
51.2 |
The representation and warranties of the Charterers in this Clause 51 are subject to:
|
|
(a) |
the principle that equitable remedies are remedies which may be granted or refused at the discretion of the court;
|
|
(b) |
the limitation of enforcement by laws relating to bankruptcy, insolvency, liquidation, reorganisation, court schemes, moratoria, administration and other laws generally affecting or limiting the rights of creditors;
|
|
(c) |
the time barring of claims under any applicable limitation acts;
|
|
(d) |
the possibility that a court may strike out provisions for a contract as being invalid for reasons of oppression, undue influence or similar; and
|
|
(e) |
any other reservations or qualifications of law expressed in any legal opinions obtained by the Owners in connection with the Transaction Documents.
|
52. |
CHARTERERS’ UNDERTAKINGS
|
52.1 |
Financial statements the Charterers shall and shall procure the Charter Guarantor to each supply to the Owners (i) as soon as the same become available, but in any event
within one hundred and eighty (180) days after the end of each of its financial years, its audited consolidated financial statements for that financial year.
|
52.2 |
Requirements as to financial statements each set of financial statements delivered to the Owners under paragraph 52.1 of Clause 52 in relation to the Charterers and the
Charter Guarantor (each a “Notifying Party”):
|
|
(a) |
shall be certified by an authorised signatory of the relevant Notifying Party as fairly representing its financial condition as at the date as at which those financial statements were drawn up; and
|
|
(b) |
shall be prepared in accordance with GAAP.
|
52.3 |
Information The Charterers shall supply to the Owners:
|
|
(a) |
promptly upon becoming aware of them, details of any material litigation, arbitration or administrative proceedings which are current, threatened or pending against the Charterers, and which, if adversely determined, are reasonably
likely to have a Material Adverse Effect; and
|
|
(b) |
promptly, such further information regarding the financial condition, business and operations of the Charterers as the Owners may reasonably request.
|
52.4 |
Maintenance of legal validity The Charterers shall comply with the terms of and do all that is necessary to maintain in full force and effect all Necessary Authorisations
required in or by the laws and regulations of its jurisdiction of formation or incorporation and all other applicable jurisdictions, to enable it lawfully to enter into and perform its obligations under the Transaction Documents and to
ensure the legality, validity, enforceability or admissibility in evidence of the Transaction Documents in its jurisdiction of incorporation or formation and all other applicable jurisdictions.
|
52.5 |
Notification of Potential Termination Event The Charterers shall promptly, upon becoming aware of the same, inform the Owners in writing of the occurrence of any Termination
Event or Potential Termination Event (and the steps, if any, being taken to remedy this) and, upon receipt of a written request to that effect from the Owners, confirm to the Owners that, save as previously notified to the Owners or as
notified in such confirmation, no Termination Event or Potential Termination Event is continuing or if a Termination Event or Potential Termination Event is continuing specifying the steps, if any, being taken to remedy it.
|
52.6 |
Claims pari passu The Charterers shall ensure that at all times the claims of the Owners against it under the Transaction Documents rank at least pani passu with the claims of all its other unsecured and subordinated creditors save those whose claims are preferred by any bankruptcy, insolvency, liquidation, winding-up or other similar laws of general application.
|
52.7 |
Necessary Authorisations Without prejudice to any specific provision of the Transaction Documents relating to a Necessary Authorisation, the Charterers shall (i) obtain,
comply with and do all that is necessary to maintain in full force and effect all Necessary Authorisations if a
|
52.8 |
Compliance with applicable laws The Charterers shall comply with all applicable laws, including Environmental Laws, to which it may be subject (except as regards Restricted
Parties to which paragraph 52.9 below applies, and anti-corruption and anti-bribery laws to which paragraph 52.10 below applies) if a failure to do the same may have a Material Adverse Effect.
|
52.9 |
No dealings with Restricted Parties The Charterers shall not, and shall not permit or authorise any other person to, directly or indirectly, utilise or employ the Vessel or
to use, lend, make payments of, contribute or otherwise make available, all or any part of the proceeds of any transaction(s) contemplated by the Transaction Documents to fund any trade, business or other activities:
|
|
(a) |
involving or for the benefit of any Restricted Party; and
|
|
(b) |
in any other manner that would reasonably be expected to result in any Obligor or the Owners or any Finance Party (if applicable) being in breach of any Sanctions or become a Restricted Party.
|
52.10 |
Anti-corruption and anti-bribery laws The Charterers shall conduct its business in compliance with applicable anti-corruption and anti-bribery laws.
|
52.11 |
Environmental compliance
|
|
(a) |
comply with any Environmental Law;
|
|
(b) |
obtain, maintain and ensure compliance with all requisite Environmental Approvals; and
|
|
(c) |
implement procedures to monitor compliance with and to prevent liability under any Environmental Law,
|
52.12 |
Environmental Claims The Charterers shall, promptly upon becoming aware of the same, inform the Owners in writing of:
|
|
(i) |
any Environmental Claim against the Charterers which is current or pending; and
|
|
(ii) |
any facts or circumstances which are reasonably likely to result in any Environmental Claim being commenced or threatened against the Charterers,
|
52.13 |
Taxation
|
|
(a) |
The Charterers shall pay and discharge any Tax imposed upon it or its assets within the time period allowed without incurring penalties unless and only to the extent that:
|
|
(i) |
such payment is being contested in good faith;
|
|
(ii) |
adequate reserves are being maintained for such Tax and the costs required to contest them have been disclosed in its latest financial statements; and
|
|
(iii) |
such payment can be lawfully withheld and failure to pay such Tax does not have or is not reasonably likely to have a Material Adverse Effect.
|
|
(b) |
No Obligor may change its residence for Tax purposes.
|
52.14 |
Further assurance The Charterers shall, at their own expense, promptly take all such action as the Owners may reasonably require for the purpose of perfecting or protecting
any of the Owner’s rights with respect to the security created or evidenced (or intended to be created or evidenced) by the Security Documents.
|
52.15 |
Other information The Charterers will promptly supply to the Owners such financial information and explanations as the Owners may from time to time reasonably require in
connection with the Charterers.
|
52.16 |
Inspection of records The Charterers will permit the inspection of their financial records and accounts relating to the Transaction Documents on reasonable notice from time
to time during business hours by the Owners or its nominee.
|
52.17 |
Merger and demerger The Charterers shall not enter into any amalgamation, merger, demerger or corporate restructuring without the prior written consent of the Owners (such
consent not to be unreasonably withheld or delayed).
|
52.18 |
Transfer of assets The Charterers shall not, sell or transfer any of its material assets other than:
|
|
(a) |
on arm’s length terms to third parties where the net proceeds of sale are used as a prepayment hereunder; or
|
|
(b) |
on arm’s length terms to its Affiliates, which are and remain members of the Charter Group.
|
52.19 |
Change of business The Charterers shall not, without the prior written consent of the Owners, make any substantial change to the general nature of their shipping business
from that carried on at the date of this Charter.
|
52.20 |
“Know your customer” checks If:
|
|
(a) |
the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Charter;
|
|
(b) |
any change in the status of the Charterers after the date of this Charter; or
|
|
(c) |
a proposed assignment or transfer by Owners of any of its rights and obligations under this Charter,
|
52.21 |
Management of the Vessel The Charterers shall ensure that:
|
|
(a) |
the Vessel is at all times technically and commercially managed by an Approved Manager;
|
|
(b) |
unless (A) the Charterers have promptly informed the Owners in writing of any proposed change of an Approved Manager, and (B) the Owners have granted its prior written consent (which shall not be unreasonably withheld or delayed) to
such proposed change, the Approved Manager shall not be changed to another entity; and
|
|
(c) |
the Approved Managers will provide a written confirmation confirming that, among other things, following the occurrence of Termination Event which is continuing, all claims of the Approved Managers against the Charterers shall be
subordinated to the claims of the Owners or the Finance Parties (if applicable) under the Transaction Documents.
|
52.22 |
Classification The Charterers shall ensure that the Vessel maintains the highest classification required for the purpose of the relevant trade of the Vessel which shall be
with the Vessel’s Classification Society, in each case, free from any material overdue recommendations and adverse notations affecting that the Vessel’s class.
|
52.23 |
Certificate of financial responsibility The Charterers shall, if required, obtain and maintain a certificate of financial responsibility in relation to the Vessel which is to
call at the United States of America.
|
52.24 |
Registration The Charterers shall not change or permit a change to the flag of the Vessel during the duration of this Charter other than to a Pre-Approved Flag, such approval
not to be unreasonably withheld or delayed. Any change to the flag of the Vessel shall be at the cost of the Charterers (which shall include any costs of the Finance Parties (if applicable).
|
52.25 |
ISM, ISPS and Maritime Labour Convention Compliance The Charterers shall ensure that each ISM Company and ISPS Company complies in all material respects with the ISM Code and
the ISPS Code, respectively, or any replacements thereof and in particular (without prejudice to the generality of the foregoing) shall ensure that such company holds (i) a valid and current Document of Compliance issued pursuant to the
ISM Code, (ii) a valid and current SMC issued in respect of the Vessel pursuant to the ISM Code, and (iii) an ISSC in respect of the Vessel, and the Charterers shall promptly, upon request, supply the Owners with copies of the same. The
Charterers shall at all time comply with the Maritime Labour Convention.
|
52.26 |
Chartering-in The Charterers shall not, during the duration of this Charter, without the prior written consent of the Owners, take any vessel on charter or other contract of
employment (or agree to do so) except for vessels chartered in by the Charterers on a temporary basis to be provided to any Sub-charterer in order to fulfil its obligations under the relevant Sub-charter (in circumstances where the Vessel
is not available for whatever reason).
|
52.27 |
Change of control The Charterers shall ensure that during the duration of the Charter Period, no Change of Control shall occur without the prior written consent of the Owners
(which shall not be unreasonably withheld or delayed).
|
52.28 |
Inspection of Vessel and inspection reports In the absence of a Termination Event, subject to there being no undue interference with the operation of the Vessel:
|
|
(a) |
the Owners may at the Charterers’ cost arrange for persons appointed by the Owners to board the Vessel once in each calendar year during the Charter Period to inspect the Vessel’s state and condition, and the Charterers will provide
commercially reasonable assistance to facilitate such inspection; and
|
|
(b) |
the Charterers shall, within five (5) Business Days’ of the Owners’ written demand, reimburse the Owners for all costs, fees and expenses reasonably incurred by the Owners in connection with the Owners’ procuring or arranging the
procurement of the relevant inspection report as to the condition of the Vessel,
|
52.29 |
Sub-charterers The Charterers will, where applicable, use best endeavours and forthwith execute and deliver any and all such other agreements, instruments and documents
(including any novation agreement) as may be required by law or deemed necessary or desirable by the Owners to ensure that any Sub-Charter which is in effect on the Actual Delivery Date remains
|
52.30 |
Valuation of Market Value
|
|
(a) |
The Charterers shall procure valuation of the Market Value of the Vessel to be made (and procure the delivery to the Owners of the Valuation Reports issued by the Approved Brokers): (i) within thirty (30) days prior to the Actual
Delivery Date, (ii) once every twelve (12) months during the Charter Period (each such Valuation Report to be at the Charterers’ cost); and (ii) at such other times as the Owners may require in their absolute discretion (each such
additional Valuation Reports to be at Owners’ cost unless a Termination Event has occurred and is continuing following which such additional Valuation Reports shall be at the cost of the Charterers).
|
|
(b) |
The Market Value of the Vessel shall be the arithmetic average of desk-top valuations obtained from two (2) Approved Brokers with one selected by the Charterers and the other selected by the Owners prior to the Actual Delivery Date and
from one Approved Broker acceptable to the Owners during the Agreement Term (in each such case the Approved Brokers shall be acceptable to the Owners and the expenses of both appointments shall be borne by the Charterers). Each such
valuation shall take into account the benefit of this Charter and any Sub-charter (dated no earlier than 30 days from the relevant date) on the basis of a willing buyer and a willing seller at arm’s length.
|
|
(c) |
If valuation is obtained in accordance with this Clause and the Market Value of the Vessel is less than (i) the Cost Balance for the first 2 years and (ii) 120% of the Purchase Option Price pro rata adjusted for the period after 2
years, of (x) the Cost Balance for the first 2 years after the Actual Delivery Date or (y) the Purchase Option Price for the remainder of the Agreement Term (the “Required LTV Ratio”), the
Charterers shall, within 5 days of the issuance of the Valuation Reports (or, if the two Valuation Reports are not issued on the same day, the date of the later Valuation Report), prepay to the Owners in an amount equal to the shortfall
as may be necessary to ensure that the Ratio does not exceed the Required LTV Ratio.
|
|
(d) |
After the prepayment referred to above is completed, the following Fixed Hire, Purchase Option Prices, Cost Balance and Balloon Amount shall be adjusted downwards in the same proportion as the above proportion of the prepayment.
|
52.31 |
Sub-Charter Apart from the Initial Sub-Charter, the Charterers shall procure that there shall be no Sub-charter (including but not limited to on a bareboat basis) of the
Vessel without the consent of the Owners, such consent not to be unreasonably withheld save that (and subject to the foregoing) any sub-chartering contract of less than twenty four (24) months (including optional extension periods) not
made on a bareboat charter basis shall not require the consent of the Owners and further provided that, (i) the Charterers shall use all reasonable endeavours to procure (if required) the consent of the Sub-Charterer to the assignment of
any Sub-Charter to the Owners, upon obtaining which (if the same is required) the Charterers shall so assign that contract to the Owners by way of security for the Charterers’ obligations under this Charter; and (ii) all sub-chartering
documentation is promptly provided to the Owners, for its information.
|
52.32 |
Transactions with Affiliates The Charterers shall procure that all transactions conducted or to be conducted between them and any of the Obligors or any of that Obligor’s
Affiliates will be on an arm’s length commercial basis.
|
52.33 |
Notification The Charterers shall notify the Owners promptly after they become aware of the expiry or early termination of the Sub-Charter.
|
52.34 |
Project Documents
|
|
(a) |
The Charterers shall:
|
|
(i) |
without affecting its obligations under the applicable provisions of the Transaction Documents, perform and observe its obligations under the Project Documents and use its best endeavours to procure that each of the other parties to
the Project Documents performs and observes its obligations under them; and
|
|
(ii) |
obtain and maintain in force, and promptly furnish certified copies to the Owners of, all licences, authorisations, approvals and consents, and do all other acts and things, which may from time to time be necessary or desirable for the
continued due performance of its obligations under the Transaction Documents and the Project Documents or which may be required for the validity, enforceability or admissibility in evidence of the Transaction Documents and the Project
Documents;
|
|
(b) |
The Charterers shall not, without the prior consent of the Owners:
|
|
(i) |
except as contemplated by this Charter, sell or agree to sell the Vessel (including a sale of the Vessel during her construction by way of an assignment, novation or other transfer of the Building Contract) or convey, assign, transfer,
sell or otherwise dispose of or deal with any of its other real or personal property, assets or rights, whether present or future, in connection with the Vessel;
|
|
(ii) |
waive or fail to enforce any provision of, or agree to any amendment or supplement to, the Building Contract, save to the extent expressly permitted by the terms of any Transaction Document.
|
53. |
EARNINGS ACCOUNT
|
54. |
TERMINATION EVENTS
|
54.1 |
Each of the following events shall constitute a Termination Event:
|
|
(a) |
Failure to pay any Obligor fails to pay any amount due from it under any Transaction Document to which they are parties at the time, in the currency and otherwise in the
manner specified therein provided that, if an Obligor can demonstrate to the reasonable satisfaction of the Owners that all necessary instructions were given to effect such payment and the non-receipt thereof is attributable solely to an
administrative or technical error or an error in the banking system or a Disruption Event, then such payment shall instead be deemed to be due, solely for the purposes of this paragraph, within five (5) Business Days of the date on which
it actually fell due under this Charter (if a payment of Hire) and seven (7) Business Days (if a sum payable on demand) ; or
|
|
(b) |
Misrepresentation any representation or statement made by any Obligor in any Transaction Document to which it is a party or in any notice or other document, certificate or
statement delivered by it pursuant thereto or in connection therewith is or proves to have been incorrect or misleading in any material respect, where the circumstances causing the same give rise to a Material Adverse Effect; or
|
|
(c) |
Specific covenants any Obligor fails duly to perform or comply with any of the obligations expressed to be assumed by or procured by them under paragraphs 52.27, 52.30 and
52.32) of Clause 52 (Charterers’ undertakings) ; or
|
|
(d) |
Other obligations any of the Obligors fails duly to perform or comply with any of the obligations expressed to be assumed by them in any Transaction Document (other
|
|
(e) |
Cross Default any Financial Indebtedness of any Obligor is not paid when due (or within any applicable grace period) and payable prior to its specified maturity where the
aggregate of all such unpaid or accelerated indebtedness of such Obligor is equal to or greater than US Dollars Ten Million (US$10,000,000) or its equivalent in any other currency or currencies and such default is not remedied within 45
days after such default; or
|
|
(f) |
Insolvency and rescheduling any of the Obligors is unable to pay their debts as they fall due, commences negotiations with any one or more of their creditors with a view to
the general readjustment or rescheduling of their indebtedness or makes a general assignment for the benefit of their creditors or a composition with their creditors; or
|
|
(g) |
Winding-up any of the Obligors files for initiation of formal restructuring proceedings, is wound up or declared bankrupt or take any corporate action or other steps are
taken or legal proceedings are started for their winding-up, dissolution, administration or re-organisation or for the appointment of a liquidator, receiver, administrator, administrative receiver, conservator, custodian, trustee or
similar officer of them or of any or all of their revenues or assets or any moratorium is declared or sought in respect of any of their indebtedness; or
|
|
(h) |
Execution or distress
|
|
(i) |
any Obligor fails to comply with or pays any sum due from them (within 30 days of such amount falling due) under any final judgment or any final order made or given by any court or other official body of a competent jurisdiction in an
aggregate in respect of the Obligor equal to or greater than US Dollars Ten Million (US$10,000,000) or its equivalent in any other currency, being a judgment or order against which there is no right of appeal or if a right of appeal
exists, where the time limit for making such appeal has expired; or
|
|
(ii) |
any execution or distress is levied against, or an encumbrancer takes possession of, the whole or any part of, the property, undertaking or assets of any Obligor in an aggregate amount equal to or greater than US Dollars Five Million
(US$5,000,000) or its equivalent in any other currency or currencies, other than any execution or distress which is being contested in good faith and which is either discharged within 30 days or in respect of which adequate security has
been provided within 30 days to the relevant court or other authority to enable the relevant execution or distress to be lifted or released; or
|
|
(i) |
Similar event any event occurs which, under the laws of any jurisdiction, has a similar or analogous effect to any of those events mentioned in paragraphs (f), (g) or (h)
above; or
|
|
(j) |
Repudiation any of the Obligors repudiates any Transaction Document to which it is a party or do or cause to be done any act or thing evidencing an intention to repudiate any
such Transaction Document; or
|
|
(k) |
Validity and admissibility at any time any act, condition or thing required to be done, fulfilled or performed in order:
|
|
(i) |
to enable any of the Obligors lawfully to enter into, exercise their rights under and perform the material obligations expressed to be assumed by them in the Transaction Documents;
|
|
(ii) |
to ensure that the material obligations expressed to be assumed by any of the Obligors in the Transaction Documents are legal, valid and binding;
|
|
(iii) |
to make the Transaction Documents admissible in evidence in any applicable jurisdiction,
|
|
(l) |
Illegality at any time:
|
|
(i) |
it is or becomes unlawful for any of the Obligors to perform or comply with any or all of their obligations under the Transaction Documents to which they are parties;
|
|
(ii) |
any of the obligations of any of the Obligors under the Transaction Documents to which they are parties are not or cease to be legal, valid and binding; or
|
|
(iii) |
any Security Interest created or purported to be created by the Security Documents ceases to be legal, valid, binding, enforceable or effective or is alleged by a party to such Security Document (other than the Owners) to be
ineffective,
|
|
(m) |
Material adverse change at any time there shall occur any event or change which has a Material Adverse Effect in respect of any of the Obligors and such event or change, if
capable of remedy, is not so remedied within thirty (30) days of the delivery of a notice confirming such event or change by the Owners to the Charterers; or
|
|
(n) |
Conditions precedent if any of the conditions set out in Clause 40 (Conditions precedent) is not satisfied by the relevant time or
such other time period specified by the Owners in their discretion; or
|
|
(o) |
Revocation or modification of consents etc. if any Necessary Authorisation which is now or which at any time during the Agreement Term becomes necessary to enable an Obligor
to comply with any of its obligations in or pursuant to any of the Transaction Documents or the Project Documents is revoked, withdrawn or withheld, or modified in a manner which the Owners reasonably consider is, or may be, prejudicial
to the interests of Owners in a material manner, or if such Necessary Authorisation ceases to remain in full force and effect and not remedied with 20 days; or
|
|
(p) |
Cessation of business any of the Obligors ceases, or threatens to cease, to carry on all or a substantial part of its business; or
|
|
(q) |
Curtailment of business if the business of any of the Obligors is wholly or materially curtailed by any intervention by or under authority of any government, or if all or a
substantial part of the undertaking, property or assets of the Obligor is seized, nationalised, expropriated or compulsorily acquired by or under authority of any government or any of the Obligors disposes or threatens to dispose of a
substantial part of their business or assets; or
|
|
(r) |
Reduction of capital if any of the Obligors reduces their committed or subscribed capital other than in the course of regular finance or business activity; or
|
|
(s) |
Environmental matters
|
|
(i) |
any Environmental Claim is pending or made against any Obligors or in connection with the Vessel, where such Environmental Claim has a Material Adverse Effect;
|
|
(ii) |
any actual Environmental Incident occurs in connection with the Vessel, where such Environmental Incident has a Material Adverse Effect; or
|
|
(t) |
Loss of property all or a substantial part of the business or assets of any of the Obligors is destroyed, abandoned, seized, appropriated or forfeited for any reason, and
such occurrence in the reasonable opinion of the Owners has a Material Adverse Effect; or
|
|
(u) |
Sanctions any Obligor or any of their directors, officers or employees becomes a Restricted Party and no remedy is available within 60 days or any Sanctions are enacted
against the Vessel; or
|
|
(v) |
Arrest the Vessel is arrested or seized for any reason whatsoever (other than caused solely and directly by any action or omission from the Owners) unless the Vessel is
released and returned to the possession of the Charterers within forty five (45) days of such arrest or seizure; or
|
|
(w) |
Delivery the Vessel has not for any reason been delivered to, and accepted by, the Owners under the Novated Building Contract on or before the Cancellation Date;
|
|
(x) |
Collateral Charter a “Termination Event” (or any other similar event or circumstance and each as however described) occurs under the Collateral Charter.
|
54.2 |
The Owners and the Charterers agree that it is a fundamental term and condition of this Charter that no Termination Event shall occur during the Agreement Term. Without prejudice to the forgoing, a Termination Event which is continuing
shall constitute an agreed terminating event, the occurrence of which will entitle the Owners to exercise all or any of the remedies set out below in this Clause 54.
|
54.3 |
At any time after occurrence of a Termination Event, the Owners shall be entitled to terminate the Charter forthwith by giving a written notice to the Charterers demanding the Charterers (a) to redeliver the Vessel to Owners and (b)
pay the Termination Sum to the Owners in accordance with Clause 54(f) below, within sixty (60) days following the date of the notice (“Termination Notice”). Once the Termination Notice is sent to
the Charterers, the Owners shall be entitled to (but not bound and without prejudice to the Charterers’ obligations hereunder) retake possession of the Vessel immediately on the date of the Termination Notice or any other date as
specified by the Owners and the Charterers shall, within sixty (60) days following the date of Termination Notice, pay the Termination Sum to the Owners in accordance with Clause 54(f) below. If the Termination Date is not a Payment Date,
the Fixed Hire payable, calculated on a pro rata basis between the immediately previous Payment Date and on the immediately following Payment Date shall become immediately due and payable on the Termination Date. In case the Charterers
fail to pay the Termination Sum in full within sixty (60) following the date of the Termination Notice the Owners shall be entitled to exercise the remedies as provided in Clause 54(i).
|
54.4 |
The Owners may demand that the Charterers pay to the Owners on the Termination Payment Date or such later date as the Owners shall specify (and without prejudice to any other rights, claims or remedies which the Owners may have under
this Charter and applicable laws) the Termination Sum. If the Termination Sum paid by the Charterers under this Charter does not cover the Owners’ loss, the Owners shall be entitled to claim further compensation for their losses and for
all reasonable expenses incurred together with any interest accrued thereon. The Owners shall not be under any liability whatsoever to the Charterers for loss or damage if any occasioned by the Charterers for the termination of this
Charter unless such termination is wrongful.
|
54.5 |
The Charterers shall pay or reimburse to the Owners on demand all losses suffered by the Owners in connection with such Termination Event and/or termination including, without prejudice to the generality of the foregoing, all
liabilities, reasonable costs and expenses so incurred in recovering possession of, and in moving, storing, insuring and maintaining, the Vessel and in carrying out any works or modifications required to cause the Vessel to conform with
the provisions of Clause 47 in respect of redelivery under this Charter together with interest thereon from the date on which the relevant loss was suffered by the Owners until the date of payment or reimbursement thereof (both before and
after any relevant judgment or winding up of the Charterers) pursuant to this Clause 51.
|
54.6 |
Upon receipt of the Termination Notice from the Owners, the Charterers have the obligation to pay the Termination Sum (together with interest at the default rate in accordance with Clause 44.3(j)) for purchasing the Vessel from the
Owners within 60 days. Upon receipt of full amount of the Termination Sum, by the Charterers, the Owners will transfer to the Charterers or its nominee all of the Owners’ rights, title and interests in the Vessel on “as is-where is” basis
and shall discharge the mortgage as may be created over the Vessel. The Charterers shall not be entitled for any reason whatsoever to claim against the Owners for any losses, or any loss of profit resulting directly or indirectly from any
defect or alleged defect in the Vessel. All registration, legal or other expenses whatsoever incurred in respect of the transfer of the title in the Vessel from the Owners to the Charterers or its nominee shall be for the account of the
Charterers.
|
54.7 |
Any amount due to the Owners under this Clause shall bear interest (before and after any relevant judgment or any winding-up of the Charterers) from the Termination Date to the date of the Owners’ actual receipt thereof.
|
54.8 |
Notwithstanding the termination of this Charter pursuant to this Clause, the Charterers shall irrevocably and unconditionally continue to comply with its obligations under this Charter until the Owners have received the Termination Sum
and other sum payable by the Charterers to the Owners pursuant to this Charter.
|
54.9 |
If the Charterers fail to pay in full the Termination Sum and other sums payable under this Charter upon the Owners’ demand for payment pursuant to this Clause 54 within sixty (60) days following the date of the Termination Notice, the
Parties shall first obtain three valuation reports from three independent Approved Valuers (each party appoint one Approved Valuers and the third one to be appointed by the parties jointly)
|
|
(a) |
if the average of the three assessment of the Fair Market Value of the Vessel at that time is no less than the Termination Sum, Owners shall then proceed to sell the Vessel without delay in the open market appointing as sales brokers,
among other parties, at least one of the 3 independent Approved Valuers, free of any charter, lease or other engagement concerning the Vessel for such price and on such terms and conditions as it may, in its absolute discretion, think
fit, but in any event within the price ranges provided by the Approved Valuers; or Charterers shall have the right to bring forward a buyer during the time that Owners are circulating the Vessel for sale and in case terms are better,
including without limitation, than the sale price, Owner’s shall sell to the party brought forward by Charterers.
|
|
(b) |
if the average of the three assessments of the Fair Market Value of the Vessel at that time is less than the Termination Sum, then the Owners may, at any time they think fit in its absolute discretion, sell the Vessel in the open
market . In any event, the Owners shall, as soon as practicable following the Termination Payment Date, obtain three valuation reports from three independent Approved Valuers of the Fair Market Value of the Vessel and the average of the
three report values shall be deducted from the Termination Sum.
|
|
(c) |
where the Owners elect to sell the Vessel in accordance with Clause 54(i) above, an amount equal to the aggregate of the expenses, disbursements, taxes, costs and losses whatsoever as may have been incurred by the Owners in respect of
the sale of
|
|
(d) |
an amount equal to the Termination Sum plus all other amounts due and payable from the Charterers to the Owners hereunder, shall be deducted from the Net Sale Proceeds or the Fair Market Value, as the case maybe. If the Net Sale
Proceeds or the Fair Market Value, as the case maybe, are insufficient to satisfy all amounts due and payable from the Charterers to the Owners hereunder, the Charterers shall pay the outstanding balance to the Owners. If there is any
amount remaining from the Net Sale Proceeds or the Fair Market Value after the deduction of all the amounts due and payable by the Charterers to the Owners hereunder, the Owners shall pay the difference to the Charterers provided that if
the Fair Market Value of the Vessel has been deducted from the Termination Sum in accordance with Clause 54(i)(d) the Owners shall be entitled to any surplus following a subsequent sale of the Vessel.
|
54.10 |
Where the Owners intends to sell the Vessel in accordance with Clause 54.9 above, Owners shall notify the Charterers in writing of the potential sale and the potential sale price of the Vessel (the “Proposed
Owners’ Sale Price”) whereupon the Charterers (or their nominee) may, within 15 days of such notification, purchase the Vessel and pay an amount which is higher than the Proposed Owners’ Sale Price where the Owners intend to sell
the Collateral Vessel at the same time as the Vessel, the Owners shall notifying the Charterers thereof in writing of the potential sale whereupon the Charterers (or their nominee) may, within 15 days of such notification, purchase both
the Vessel and the Collateral Vessel and pay an amount which is at least equal to the aggregate of the Termination Sum and the Termination Sum (as defined in the Collateral Charter). If the Charterers notify the Owners that they do not
intend to purchase the Vessel or the Charterers do not respond to the Owners within 5 days’ period or the MOA has not been agreed by the Owners and the Charterers’ or their nominee or the deposit has not been remitted the nominated
account under the MOA within such 10 days’ period (or such longer period as the Owners may agree), the Owners may sell the Vessel on such terms as the Owners may deem fit.
|
54.11 |
Liquidated damages received under the Building Contract
|
|
(a) |
any liquidated damages received by the Charterers or the Owners for:
|
|
(i) |
any delays in delivery of the Vessel under the Building Contract shall be for Charterers account; and
|
|
(ii) |
any physical defects or deficiencies of the Vessel under the Building Contract shall accrue to the account of the Charterers.
|
54.12 |
Where the Owners decide to terminate this Charter and retake possession of the Vessel pursuant to this Clause 54, the Owners agree to appoint a reputable ship manager to oversee the operation of the Vessel while it is in the Owners’
possession in accordance with prudent and sound commercial ship practices.
|
55. |
[NOT USED]
|
56. |
NAME OF VESSEL
|
56.1 |
the name of the Vessel may be chosen by the Charterers; and
|
56.2 |
the Vessel may be painted in the colours, display the funnel insignia and fly the house flag as required by the Charterers.
|
57. |
CHARTER PERIOD
|
58. |
TRANSACTION FEES
|
58.1 |
Commitment fee
|
58.2 |
Handling fee
|
|
(a) |
US$100,000, receipt of which the Owners hereby acknowledge;
|
|
(b) |
US$201,000 to be paid within five (5) Business Days of the date of this Charter; and
|
|
(c) |
US$301,000 to be paid on the earlier of the date of Early Termination due to the enactment of the Pre-delivery Sales Clause and the Actual Delivery Date.
|
59. |
EARLY TERMINATION, PURCHASE OPTION, PURCHASE OBLIGATION AND TRANSFER OF TITLE, PARTIAL PREPAYMENT
|
59.1 |
Subject to no Termination Events or Total Loss under Clause 61 (Total loss), the Charterers may, at any time from the Actual Delivery Date, by at least 90 days prior written notice to the
Owners, declare to the Owners their exercise of the option to purchase the Vessel or to cause their nominee to purchase the Vessel by payment of (i) at any time prior to the second anniversary of the Actual Delivery Date, an amount equal
to the Termination Sum as at that date together with a pre-payment fee equal to five (5) per cent of the Assumed Owners’ Cost plus the Sales Clause Termination Sum or (ii) at any time after the second anniversary of the Actual Delivery
Date, the corresponding amount equal to the Purchase Option Price as set out under Schedule 4 or if the purchase option is exercised on a date which is not an anniversary date of the Actual Delivery Date, then the Purchase Option Price
shall be the sum of the applicable Purchase Option Price from the last occurring anniversary date added to the product of n/365 (where n is the number of days elapsed since the last anniversary date to the proposed Purchase Option Date)
and the positive difference between the Purchase Option Price on the next occurring anniversary date after the Purchase Option Date and the Purchase Option Price on the last anniversary date.. To avoid any confusion, the Charter Period
will end immediately upon the Purchase Option Price having been paid.
|
59.2 |
If the Charterers have not exercised their rights under paragraph 59.1, the Charterers shall be obliged to purchase the Vessel or to cause their nominee to purchase the Vessel at the end of the Charter Period by payment of the Purchase
Obligation Price and the Charterers shall pay the Purchase Obligation Price on the Purchase Obligation Date unless this Charter is terminated before the natural expiration of this Charter or the Owners and the Charterers agree otherwise.
|
59.3 |
In exchange for the full payment of the Purchase Option Price (in the case of a purchase under paragraph 59.1 above) or the sum stated in paragraph 59.2 above (in the case of a purchase under paragraph 59.2 above) and all sums due and
payable to the Owners under the Transaction Documents and subject to compliance with the other conditions set out in this Clause, the Owners shall:
|
|
(a) |
transfer title to and ownership of the Vessel to the Charterers (or their nominee) by delivering to the Charterers (in each case at the Charterers’ costs):
|
|
(i) |
a duly executed and notarised, legalised and/or apostilled (as applicable) bill of sale; and
|
|
(ii) |
the Title Transfer PDA; and
|
|
(b) |
(subject to the prior written consent of any Finance Party or its agent or permitted assigns and transferees (in each case as applicable)) use all reasonable endeavours to procure the deletion of any mortgage or prior Security Interest
in relation to the Vessel at the Charterers’ cost,
|
59.4 |
The transfer in accordance with paragraph 59.3 above shall be made in all respects at the Charterers’ expense on an “as is, where is” basis and the Owners shall give the Charterers (or their nominee) no representations, warranties,
agreements or guarantees whatsoever concerning or in connection with the Vessel, the Insurances, the Vessel’s condition, state or class or anything related to the Vessel, expressed or implied, statutory or otherwise.
|
59.5 |
The Owners shall have no responsibility for the registrability of a bill of sale referred to in paragraph 59.3 above executed by the Owners, as far as such bill of sale is prescribed in a generally acceptable form.
|
59.6 |
The Charterers shall, immediately prior to the receipt of the bill of sale, furnish the Owners with a letter of indemnity (in a form satisfactory to the Owners) whereby the Charterers and the Charter Guarantor shall state that, among
other things, the Owners has and will have no interest, concern or connection with the Vessel after the date of such letter and that the Charterers and/or the Charter Guarantor shall indemnify the Owners and keep the Owners indemnified
forever against any claims made by any person arising in connection with the Vessel.
|
|
(a) |
upon at least ninety (90) days’ written notice, the Charterers should have the option for one time only to make a one-off prepayment of up to $3m (in multiples of $1m); and
|
|
(b) |
any partial prepayment should follow the following mechanism.
|
|
(i) |
If the partial prepayment is to be exercised on a date falling before the 2nd anniversary of the Delivery Date, then the proportion of the partial prepayment is equal to the amount of the prepayment divided by USD29,000,000.
|
|
(ii) |
If the partial prepayment is to be exercised on a date falling after the 2nd anniversary of the Delivery Date, then the proportion of the partial prepayment is equal to the amount of the prepayment divided by the Purchase Option Price
on that date.
|
|
(iii) |
After the partial prepayment is completed, the following Fixed Hire, Cost Balance, Purchase Option Prices and Balloon Amount should be adjusted downwards in the same proportion as the above proportion of the partial prepayment.
|
60. |
PRE-DELIVERY SALES CLAUSE
|
60.1 |
For the period starting from the signing of this charter and ending on the actual Delivery Date, the Charterers have the right to sell the Vessel and terminate the Charter provided that a written notice is provided by the Charterers to
the Owners at least 90 days prior to the Delivery Date and an amount equal to the Termination Sum as at that date together with a pre-payment fee equal to three (3) percent of the Assumed Owners’ Cost plus the Sales Clause Termination
Sum.
|
60.2 |
At any time, throughout the period of this charter, the Corporate Guarantor may acquire the beneficial ownership the Charterer.
|
61. |
TOTAL LOSS
|
61.1 |
If circumstances exist giving rise to a Total Loss, the Charterers shall promptly notify the Owners of the facts of such Total Loss. If the Charterers wish to proceed on the basis of a Total Loss and advise the Owners thereof, the
Owners shall agree to the Vessel being treated as a Total Loss for all purposes of this Charter. The Owners shall thereupon abandon the Vessel to the Charterers and/or execute such documents as may be required to enable the Charterers to
abandon the Vessel to insurers and claim a Total Loss. Without prejudice to the obligations of the Charterers to pay to the Owners all monies then due or thereafter to become due under this Charter, if the Vessel shall become a Total Loss
during the Charter Period, the Charter Period shall end on the Settlement Date.
|
61.2 |
If the Vessel becomes a Total Loss during the Charter Period, the Charterers shall, on the Settlement Date, pay to the Owners the amount calculated in accordance with paragraph 61.3 below.
|
61.3 |
On the Settlement Date, the Charterers shall pay to the Owners an amount equal to the Pre-delivery Termination Sum or the Termination Sum as at the Termination Payment Date (provided that such amount payable shall be set off against
the Total Loss Proceeds if they are already received by the Owners as referred to under paragraph 61.4 below). The foregoing obligations of the Charterers under this paragraph 61.3 shall apply regardless of whether or not any moneys are
payable under any Insurances in respect of the Vessel, regardless of the amount payable thereunder, regardless of the cause of the Total Loss and regardless of whether or not any of the said compensation shall become payable.
|
61.4 |
All Total Loss Proceeds shall be paid to such account or accounts as the Owners may direct and shall be applied towards satisfaction of the Termination Sum and any other sums due and payable under the Transaction Documents. To the
extent that there is any surplus after such application, such surplus shall be promptly returned to the Charterers.
|
61.5 |
The Charterers shall, at the Owners’ request, provide satisfactory evidence, in the reasonable opinion of the Owners, as to the date on which the constructive total loss of the Vessel occurred pursuant to the definition of Total Loss.
|
61.6 |
The Charterers shall continue to pay the Advance Hire and the Hire on the days and in the amounts required under this Charter notwithstanding that the Vessel shall become a Total Loss provided always
that no further instalments of Hire or the payments of the Advance Hire shall
|
62. |
ADDITIONAL PAYMENT OBLIGATIONS
|
62.1 |
Subject always to paragraph 62.2, the Charterers shall bear all costs, fees (including legal fees) and disbursements reasonably incurred by the Owners and the Charterers in connection with:
|
|
(a) |
the negotiation, preparation and execution of this Charter and the other Transaction Documents;
|
|
(b) |
the delivery of the Vessel under the Novation Agreement and this Charter;
|
|
(c) |
preparation or procurement of any survey, inspections, tax or insurance advice;
|
|
(d) |
all legal fees and other expenses reasonably arising out of or in connection with the exercising of the purchase option by the Charterers pursuant to Clause 59 (Purchase Option and Title Transfer)
of this Charter; and
|
|
(e) |
such other activities relevant to the transaction contemplated herein.
|
62.2 |
Notwithstanding anything to the contrary, the Charterers shall not bear any costs, fees (including legal fees) and disbursements incurred by the Owners in connection with:
|
|
(a) |
any financing activities undertaken by the Owners, whether or not such financing activities are undertaken for the purposes of entering into this Charter, the Novation Agreement or any of the Transaction Documents; and
|
|
(b) |
the incorporation, setting-up or continued operation of any special purpose vehicles or legal entities for the purposes of or in relation to this Charter, the Novation Agreement or any of the Transaction Documents.
|
63. |
STAMP DUTIES AND TAXES
|
64. |
OPERATIONAL NOTIFIABLE EVENTS
|
|
(a) |
when a material condition of class is applied by the Classification Society;
|
|
(b) |
whenever the Vessel is arrested, confiscated, seized, requisitioned, impounded, forfeited or detained by any government or other competent authorities or any other persons;
|
|
(c) |
whenever a class or flag authority refuses to issue or withdraw trading certification;
|
|
(d) |
in the event of a fire requiring the use of fixed fire systems or collision / grounding;
|
|
(e) |
whenever the Vessel is planned for dry-docking in accordance with Clause 10(g) (Part II) and whether routine or emergency;
|
|
(f) |
the Vessel is taken under tow unless in the normal course of shipping operations;
|
|
(g) |
any death or serious injury on board; or
|
|
(h) |
any damage to the Vessel the repair costs of which (whether before or after adjudication) are likely to exceed US Dollars Three Million (US$3,000,000).
|
65. |
FURTHER INDEMNITIES
|
65.1 |
Whether or not any of the transactions contemplated hereby are consummated, the Charterers shall, in addition to the provisions under Clause 17 (Indemnity) (Part II) of this Charter, indemnify,
protect, defend and hold harmless the Owners and their respective officers, directors and employees (collectively, the “Indemnitees”) throughout the Agreement Term from, against and in respect of,
any and all liabilities, obligations, losses, damages, penalties, fines, fees, claims, actions, proceedings, judgement, order or other sanction, lien, salvage, general average, suits, costs, expenses and disbursements, including
reasonable legal fees and expenses, of whatsoever kind and nature (collectively, the “Expenses”), imposed on, suffered or incurred by or asserted against any Indemnitee, in any way relating to,
resulting from or arising out of or in connection with, in each case, directly or indirectly, any one or more of the following:
|
|
(a) |
this Charter, any of the other Transaction Documents and the Project Documents, and any amendment, supplement or modification thereof or thereto requested by the Charterers;
|
|
(b) |
the Vessel or any part thereof, including with respect to:
|
|
(i) |
the ownership of, manufacture, design, possession, use or non-use, operation, maintenance, testing, repair, overhaul, condition, alteration, modification, addition, improvement, storage, seaworthiness, replacement, repair of the Vessel
or any part (including, in each case, latent or other defects, whether or not discoverable and any claim for patent, trademark, or copyright infringement and all liabilities, obligations, losses, damages and claims in any way relating to
or arising out of spillage of cargo or fuel, out of injury to persons, properties or the environment or strict liability in tort);
|
|
(ii) |
any claim or penalty arising out of violations of applicable law by the Charterers or any other Sub-charterers;
|
|
(iii) |
death or property damage of shippers or others;
|
|
(iv) |
any liens in respect of the Vessel or any part thereof; or
|
|
(v) |
any registration and/or tonnage fees (whether periodic or not) in respect of the Vessel payable to any registry of ships;
|
|
(c) |
any breach of or failure to perform or observe, or any other non-compliance with, any covenant or agreement or other obligation to be performed by the Charterers under any Transaction Document to which it is a party or the falsity of
any representation or warranty of the Charterers in any Transaction Document to which it is a party or the occurrence of any Termination Event;
|
|
(d) |
in preventing or attempting to prevent the arrest, confiscation, seizure, taking and execution, requisition, impounding, forfeiture or detention of the Vessel, or in securing or attempting to secure the release of the Vessel in
connection with the exercise of the rights of a holder of a lien created by the Charterers;
|
|
(e) |
incurred or suffered by the Owners in:
|
|
(i) |
procuring the delivery of the Vessel to the Charterers under Clause 35 (Delivery);
|
|
(ii) |
registering the Vessel at the registry of the Pre-Approved Flag;
|
|
(iii) |
recovering possession of the Vessel following termination of this Charter under Clause 54 (Termination Events);
|
|
(iv) |
arranging for a sale of the Vessel in accordance with Clause 60 (Sale of Vessel by the Owners); or
|
|
(v) |
arranging for a transfer of the title of the Vessel in accordance with paragraph 59.3 of Clause 59 (Purchase Option and transfer of title)
|
|
(f) |
arising from the Master or officers of the Vessel or the Charterers’ agents signing bills of lading or other documents;
|
|
(g) |
in connection with:
|
|
(i) |
the arrest, seizure, taking into custody or other detention by any court or other tribunal or by any governmental entity; or
|
|
(ii) |
subjection to distress by reason of any process, claim, exercise of any rights conferred by a lien or by any other action whatsoever, of the Vessel which are expended, suffered or incurred as a result of or in connection with any claim
or against, or liability of, the Charterers or any other member of the Charterers’ group, together with any costs and expenses or other outgoings which may be paid or incurred by the Owners in releasing the Vessel from any such arrest,
seizure, custody, detention or distress.
|
65.2 |
The Charterers shall pay to the Owners promptly on the Owners’ written demand the amount of all costs and expenses (including legal fees) incurred by the Owners in connection with the enforcement of, or the preservation of any rights
under, any Transaction Document including (without limitation) (i) any losses, costs and expenses which the Owners may from time to time sustain, incur or become liable for by reason of the Owners being deemed by any court or authority to
be an operator, or in any way concerned in the operation, of the Vessel and (ii) collecting and recovering the proceeds of any claim under any of the Insurances.
|
65.3 |
Without prejudice to any right to damages or other claim which either party may, at any time, have against the other hereunder, it is hereby agreed and declared that the indemnities of the Owners by the Charterers contained in this
Charter shall continue in full force and effect for a period of twenty four (24) months after the Agreement Term.
|
66. |
SET-OFF
|
66.1 |
The Owners may set off any matured and/or contingent obligation due from the Charterers under the Transaction Documents (to the extent beneficially owned by the Owners) against any obligation (whether matured or not) owed by the Owners
to the Charterers, regardless of the place of payment or currency of either obligation. If the obligations are in different currencies, the Owners may convert either obligation at a market rate of exchange in its usual course of business
for the purpose of the set-off.
|
66.2 |
The Charterers may not set off any matured and/or contingent obligation due from the Owners under the Transaction Documents (to the extent beneficially owned by the Charterers) against any obligation (whether matured or not) owed by
the Charterers to the Owners, regardless of the place of payment or currency of either obligation.
|
67. |
FURTHER ASSURANCES AND UNDERTAKINGS
|
67.1 |
Each party shall make all applications and execute all other documents and do all other acts and things as may be necessary to implement and to carry out their obligations under, and the intent of, this Charter.
|
67.2 |
The parties shall act in good faith to each other in respect of any dealings or matters under, or in connection with, this Charter.
|
68. |
CUMULATIVE RIGHTS
|
69. |
DAY COUNT CONVENTION
|
70. |
NO WAIVER
|
71. |
ENTIRE AGREEMENT
|
71.1 |
This Charter contains all the understandings and agreements of whatsoever kind and nature existing between the parties in respect of this Charter, the rights, interests, undertakings agreements and obligations of the parties to this
Charter and shall supersede all previous and contemporaneous negotiations and agreements.
|
71.2 |
This Charter may not be amended, altered or modified except by a written instrument executed by each of the parties to this Charter.
|
72. |
INVALIDITY
|
73. |
ENGLISH LANGUAGE
|
74. |
NO PARTNERSHIP
|
75. |
NOTICES
|
75.1 |
Any notices to be given to the Owners under this Charter shall be sent in writing by registered letter, facsimile or email and addressed to:
|
|
Address: |
18/F, CATIC Tower,
212 Jiang Ning Road, Shanghai 200041, China The People’s Republic of China |
|
Fax No.: |
+86 21 5289 5389
|
|
Email: |
chenzhengrong@chinaleasing.net
|
|
Attention: |
Ms. Emily Chen
|
75.2 |
Any notices to be given to the Charterers under this Charter shall be sent in writing by registered letter, facsimile or email and addressed to the Charterers:
|
|
Address: |
1 Vas. Sofias & Meg. Alexandrou, Athens 15124 Greece
|
|
Telephone No.: |
+30 21 081 28 180
|
|
Email: |
atsirikos@topships.org
|
|
Attention: |
Alexandros Tsirikos
|
75.3 |
Any such notice shall be deemed to have reached the party to whom it was addressed, when dispatched and acknowledged received (in case of a facsimile or an email) or when delivered (in case of a registered letter). A notice or other
such communication received on a non-working day or after business hours in the place of receipt shall be deemed to be served on the next following working day in such place
|
76. |
CONFLICTS
|
77. |
SURVIVAL OF CHARTERERS’ OBLIGATIONS
|
78. |
COUNTERPARTS
|
79. |
CONFIDENTIALITY
|
79.1 |
The Parties shall maintain the information provided in connection with the Transaction Documents strictly confidential and agree to disclose to no person other than:
|
|
(a) |
its board of directors, employees (only on a need to know basis), and shareholders, professional advisors and rating agencies;
|
|
(b) |
as may be required to be disclosed under applicable law or stock market or other regulations or for the purpose of legal proceedings;
|
|
(c) |
in the case of the Owners, to any Finance Party or other actual or potential financier providing funding for the acquisition or refinancing of the Vessel;
|
|
(d) |
in the case of the Charterers, to any Sub-charterer in respect of obtaining any consent required under the terms of any Sub-charter; and
|
|
(e) |
the managers, the classification society and flag authorities as may be necessary in connection with the transactions contemplated hereunder.
|
79.2 |
Any other disclosure by each Party shall be subject to the prior written consent of the other Party.
|
80. |
THIRD PARTIES ACT
|
80.1 |
Any person which is an Indemnitee or a Finance Party from time to time and is not a party to this Charter shall be entitled to enforce such terms of this Charter as provided for in this Charter in relation to the obligations of the
Charterers to such Indemnitee or (as the case may be) Finance Party, subject to the provisions of Clause 81 (Law and jurisdiction) and the Third Parties Act. The Third Parties Act applies to this
Charter as set out in this Clause 80.
|
80.2 |
Save as provided above, a person who is not a party to this Charter has no right under the Third Parties Act to enforce or to enjoy the benefit of any term of this Charter.
|
81. |
LAW AND JURISDICTION
|
81.1 |
This Charter and any non-contractual obligations arising from or in connection with it shall in all respects be governed by and interpreted in accordance with English law.
|
81.2 |
Any dispute, controversy or claim arising out of or relating to this Charter, including the existence, validity, interpretation, performance, breach or termination thereof or any dispute regarding non-contractual obligations arising
out of or relating to it shall be referred to and finally resolved by London arbitration.
|
81.3 |
The law of this Clause 81 shall be English law.
|
81.4 |
Any dispute arising out of or in connection with this Charter shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory modification or re-enactment thereof save to the extent necessary to
give effect to the provisions of this Clause.
|
81.5 |
The arbitration shall be conducted in accordance with the London Maritime Arbitrations Association (LMAA). Terms current at the time when the arbitration proceedings are commenced.
|
81.6 |
The reference shall be to three arbitrators. A party wishing to refer a dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other party requiring the other party to appoint its own
arbitrator within fourteen (14) calendar days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless the other party appoints its own arbitrator and gives notice that it has done so within the fourteen
(14) days specified.
|
81.7 |
If one party does not appoint its own arbitrator and give notice that it has done so within the fourteen (14) days specified, the party referring a dispute to arbitration may, without the requirement of any further prior notice to the
other party, appoint its arbitrator as sole arbitrator and shall advise the other party accordingly. The award of a sole arbitrator shall be binding on both Parties as if the sole arbitrator had been appointed by agreement.
|
81.8 |
In cases where neither the claim nor any counterclaim exceeds the sum of US$50,000 (or such other sum as the parties may agree) the arbitration shall be conducted in accordance with the LMAA Small Claims Procedures current at the time
when the arbitration proceedings are commenced and the number of arbitrators shall be one.
|
82. |
CONDITIONS SUBSEQUENT
|
82.1 |
Notwithstanding anything to the contrary in this Charter, the obligations of the Owners to charter, or continue to charter, the Vessel to the Charterers under this Charter shall be subject to the condition that the Owners shall have
received the following documents and evidence in form and substance satisfactory to the Owners no later than three (3) Business Days after the Actual Delivery Date:
|
|
(a) |
a copy of the endorsed policy issued by the insurer in respect of the Vessel;
|
|
(b) |
a copy of the duly signed letter of undertaking issued by all the relevant underwriters or insurance brokers in respect of the Vessel;
|
|
(c) |
the Owners shall have received, no later than fourteen (14) calendar days after the Actual Delivery Date, an original of the duly executed acknowledgement by the Sub-charterers in accordance with the Charterers Assignment;
|
|
(d) |
the Vessel’s transcript of register evidencing that the Vessel is free from any registered Security Interest;
|
|
(e) |
the Vessel’s current Safety Management Certificate (as such term is defined pursuant to the ISM Code);
|
|
(f) |
the Approved Manager’s current Document of Compliance (as such term is defined pursuant to the ISM Code);
|
|
(g) |
the Vessel’s current ISSC;
|
|
(h) |
the Vessel’s current IAPPC; and
|
|
(i) |
the Vessel’s classification certificate evidencing that it is free of all recommendations and requirements from the Classification Society.
|
83. |
FATCA
|
83.1 |
Defined terms
|
83.2 |
FATCA Information
|
|
(a) |
Subject to paragraph (iii) below, each Relevant Party shall, on the date of this Charter, and thereafter within ten (10) Business Days of a reasonable request by another Relevant 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 the requesting party (with a copy to all other Relevant Parties) such other form or forms (including IRS Form W-8 or Form W-9 or any successor or substitute form, as applicable) and any other documentation and other
information relating to its status under FATCA (including its applicable “pass thru percentage” or other information required under FATCA or other official guidance including intergovernmental agreements) as the requesting party
reasonably requests for the purpose of the requesting party’s compliance with FATCA.
|
|
(b) |
If a Relevant Party confirms to any other Relevant Party that it is a FATCA Exempt Party or provides an IRS Form W-8 or W-9 showing that it is a FATCA Exempt Party and it subsequently becomes aware that it is not, or has ceased to be a
FATCA Exempt Party, that party shall so notify all other Relevant Parties reasonably promptly.
|
|
(c) |
Nothing in this Clause 74 (FATCA) shall oblige any Relevant Party to do anything which would or, in its reasonable opinion, might 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 nothing in this paragraph shall excuse any Relevant Party from providing a true,
complete and correct IRS Form W-8 or W-9 (or any successor or substitute form where applicable). Any information provided on such
|
|
(d) |
If a Relevant Party fails to confirm its status or to supply forms, documentation or other information requested in accordance with the provisions of this Charter or the provided information is insufficient under FATCA, then:
|
|
(i) |
if that party failed to confirm whether it is (and/or remains) a FATCA Exempt Party then such party shall be treated for the purposes of the Transaction Documents as if it is a FATCA Non-Exempt Party; and
|
|
(ii) |
if that party failed to confirm its applicable passthru percentage then such party shall be treated for the purposes of this Charter and the Transaction Documents (and payments made thereunder) as if its applicable passthru percentage
is 100%, until (in each case) such time as the party in question provides sufficient confirmation, forms, documentation or other information to establish the relevant facts.
|
83.3 |
FATCA Deduction and gross-up by Relevant Party
|
|
(a) |
If the representation made by the Charterers under Clause 48 (Charterers’ representations and warranties) proves to be untrue or misleading such that the Charterers are required to make a FATCA Deduction, the Charterers shall make the
FATCA Deduction and any payment required in connection with that FATCA Deduction within the time allowed and in the minimum amount required by FATCA.
|
|
(b) |
If the Charterers are required to make a FATCA Deduction then the Charterers shall increase the payment due from them to the Owners to an amount which (after making any FATCA Deduction) leaves an amount equal to the payment which would
have been due if no FATCA Deduction had been required.
|
|
(c) |
The Charterers shall promptly upon becoming aware that they must make a FATCA Deduction (or that there is any change in the rate or basis of a FATCA Deduction) notify the Owners accordingly. Within thirty (30) days of the Charterers
making either a FATCA Deduction or any payment required in connection with that FATCA Deduction, the Charterers shall deliver to the Owners evidence reasonably satisfactory to the Owners that the FATCA Deduction has been made or (as
applicable) any appropriate payment paid to the relevant governmental or taxation authority.
|
|
(d) |
If the Owners are required to make a deduction or withholding from a payment under the Finance Documents in respect of FATCA, which deduction or withholding would not have been required if a Relevant Person were not a US Tax Obligor or
FATCA FFI, and are required under the Finance Documents (if any) to pay additional amounts in respect of such deduction or withholding, the amount of the payment due from the Charterers shall be increased to an amount which, after any
such deduction or withholding and payment of additional amounts, leaves the Owners with an amount equal to the amount which it would have had remaining if it had not been required to pay additional amounts under such Finance Documents.
|
83.4 |
FATCA Deduction by Owners
|
THE OWNERS
|
THE BAREBOAT CHARTERERS
|
|
By:
|
By:
|
|
Name:
|
Name:
|
|
Title:
|
Title:
|
|
Date:
|
Date:
|
Name of Vessel:
|
[ ]
|
|
Flag:
|
Marshall Islands
|
|
Place of Registration:
|
Marshall Islands
|
|
IMO Number:
|
[ ]
|
|
Gross Registered Tonnage:
|
[..]
|
|
Net Registered Tonnage:
|
[..]
|
|
Dated:
|
20[●]
|
|
At:
|
hours (Hong Kong time)
|
|
Place of delivery:
|
||
THE OWNER
|
THE BAREBOAT CHARTERER
|
|
[ ]
|
[ ]
|
|
by:
|
by:
|
|
Name:
|
Name:
|
|
Title:
|
Title:
|
|
Date:
|
Date:
|
Builders Hull number 2749
|
|||||
payment dates
|
Cost
Balance at beginning of applicable term |
Fixed Hire
|
Balloon Amount
|
||
10/01/2020
|
US$ 30,100,000.00
|
US$ 292,485.00
|
|||
10/02/2020
|
US$ 29,984,434.99
|
US$ 273,615.00
|
|||
10/03/2020
|
US$ 29,875,690.36
|
US$ 292,485.00
|
|||
10/04/2020
|
US$ 29,758,806.92
|
US$ 283,050.00
|
|||
10/05/2020
|
US$ 29,645,029.06
|
US$ 292,485.00
|
|||
10/06/2020
|
US$ 29,526,789.85
|
US$ 283,050.00
|
|||
10/07/2020
|
US$ 29,411,692.25
|
US$ 292,485.00
|
|||
10/08/2020
|
US$ 29,292,081.55
|
US$ 292,485.00
|
|||
10/09/2020
|
US$ 29,171,767.81
|
US$ 283,050.00
|
|||
10/10/2020
|
US$ 29,054,650.80
|
US$ 292,485.00
|
|||
10/11/2020
|
US$ 28,932,941.50
|
US$ 283,050.00
|
|||
10/12/2020
|
US$ 28,814,466.01
|
US$ 292,485.00
|
|||
10/01/2021
|
US$ 28,691,344.97
|
US$ 292,485.00
|
|||
10/02/2021
|
US$ 28,567,500.25
|
US$ 264,180.00
|
|||
10/03/2021
|
US$ 28,454,983.03
|
US$ 292,485.00
|
|||
10/04/2021
|
US$ 28,329,749.04
|
US$ 283,050.00
|
|||
10/05/2021
|
US$ 28,207,842.51
|
US$ 292,485.00
|
|||
10/06/2021
|
US$ 28,081,155.89
|
US$ 283,050.00
|
|||
10/07/2021
|
US$ 27,957,835.33
|
US$ 292,485.00
|
|||
10/08/2021
|
US$ 27,829,679.24
|
US$ 292,485.00
|
10/09/2021
|
US$ 27,700,769.87
|
US$ 283,050.00
|
|
10/10/2021
|
US$ 27,575,285.62
|
US$ 292,485.00
|
|
10/11/2021
|
US$ 27,444,881.00
|
US$ 283,050.00
|
|
10/12/2021
|
US$ 27,317,941.22
|
US$ 292,485.00
|
|
10/01/2022
|
US$ 27,186,023.99
|
US$ 292,485.00
|
|
10/02/2022
|
US$ 27,053,331.39
|
US$ 264,180.00
|
|
10/03/2022
|
US$ 26,932,775.55
|
US$ 292,485.00
|
|
10/04/2022
|
US$ 26,798,594.42
|
US$ 283,050.00
|
|
10/05/2022
|
US$ 26,667,978.48
|
US$ 292,485.00
|
|
10/06/2022
|
US$ 26,532,240.94
|
US$ 283,050.00
|
|
10/07/2022
|
US$ 26,400,109.94
|
US$ 292,485.00
|
|
10/08/2022
|
US$ 26,262,797.94
|
US$ 292,485.00
|
|
10/09/2022
|
US$ 26,124,678.85
|
US$ 283,050.00
|
|
10/10/2022
|
US$ 25,990,229.58
|
US$ 292,485.00
|
|
10/11/2022
|
US$ 25,850,508.41
|
US$ 283,050.00
|
|
10/12/2022
|
US$ 25,714,499.62
|
US$ 292,485.00
|
|
10/01/2023
|
US$ 25,573,157.78
|
US$ 292,485.00
|
|
10/02/2023
|
US$ 25,430,985.17
|
US$ 264,180.00
|
|
10/03/2023
|
US$ 25,301,816.42
|
US$ 292,485.00
|
|
10/04/2023
|
US$ 25,158,048.93
|
US$ 283,050.00
|
|
10/05/2023
|
US$ 25,018,101.34
|
US$ 292,485.00
|
|
10/06/2023
|
US$ 24,872,666.25
|
US$ 283,050.00
|
|
10/07/2023
|
US$ 24,731,095.36
|
US$ 292,485.00
|
|
10/08/2023
|
US$ 24,583,973.33
|
US$ 292,485.00
|
|
10/09/2023
|
US$ 24,435,986.55
|
US$ 283,050.00
|
|
10/10/2023
|
US$ 24,291,931.76
|
US$ 292,485.00
|
|
10/11/2023
|
US$ 24,142,228.44
|
US$ 283,050.00
|
10/12/2023
|
US$ 23,996,502.72
|
US$ 292,485.00
|
|
10/01/2024
|
US$ 23,845,062.94
|
US$ 292,485.00
|
|
10/02/2024
|
US$ 23,692,733.04
|
US$ 273,615.00
|
|
10/03/2024
|
US$ 23,549,393.28
|
US$ 292,485.00
|
|
10/04/2024
|
US$ 23,395,325.50
|
US$ 283,050.00
|
|
10/05/2024
|
US$ 23,245,351.30
|
US$ 292,485.00
|
|
10/06/2024
|
US$ 23,089,496.45
|
US$ 283,050.00
|
|
10/07/2024
|
US$ 22,937,782.64
|
US$ 292,485.00
|
|
10/08/2024
|
US$ 22,780,119.98
|
US$ 292,485.00
|
|
10/09/2024
|
US$ 22,621,530.62
|
US$ 283,050.00
|
|
10/10/2024
|
US$ 22,467,154.97
|
US$ 292,485.00
|
|
10/11/2024
|
US$ 22,306,726.08
|
US$ 283,050.00
|
|
10/12/2024
|
US$ 22,150,559.77
|
US$ 292,485.00
|
|
10/01/2025
|
US$ 21,988,270.02
|
US$ 281,790.00
|
|
10/02/2025
|
US$ 21,835,721.37
|
US$ 254,520.00
|
|
10/03/2025
|
US$ 21,697,125.62
|
US$ 281,790.00
|
|
10/04/2025
|
US$ 21,542,865.69
|
US$ 272,700.00
|
|
10/05/2025
|
US$ 21,392,704.45
|
US$ 281,790.00
|
|
10/06/2025
|
US$ 21,236,655.22
|
US$ 272,700.00
|
|
10/07/2025
|
US$ 21,084,752.20
|
US$ 281,790.00
|
|
10/08/2025
|
US$ 20,926,892.91
|
US$ 281,790.00
|
|
10/09/2025
|
US$ 20,768,105.76
|
US$ 272,700.00
|
|
10/10/2025
|
US$ 20,613,537.57
|
US$ 281,790.00
|
|
10/11/2025
|
US$ 20,452,908.60
|
US$ 272,700.00
|
|
10/12/2025
|
US$ 20,296,547.53
|
US$ 281,790.00
|
|
10/01/2026
|
US$ 20,134,055.37
|
US$ 281,790.00
|
|
10/02/2026
|
US$ 19,970,608.12
|
US$ 254,520.00
|
10/03/2026
|
US$ 19,822,110.63
|
US$ 281,790.00
|
|
10/04/2026
|
US$ 19,656,829.85
|
US$ 272,700.00
|
|
10/05/2026
|
US$ 19,495,940.58
|
US$ 281,790.00
|
|
10/06/2026
|
US$ 19,328,742.66
|
US$ 272,700.00
|
|
10/07/2026
|
US$ 19,165,987.18
|
US$ 281,790.00
|
|
10/08/2026
|
US$ 18,996,849.88
|
US$ 281,790.00
|
|
10/09/2026
|
US$ 18,826,718.44
|
US$ 272,700.00
|
|
10/10/2026
|
US$ 18,661,107.37
|
US$ 281,790.00
|
|
10/11/2026
|
US$ 18,489,002.52
|
US$ 272,700.00
|
|
10/12/2026
|
US$ 18,321,470.49
|
US$ 281,790.00
|
|
10/01/2027
|
US$ 18,147,369.34
|
US$ 281,790.00
|
|
10/02/2027
|
US$ 17,972,244.87
|
US$ 254,520.00
|
|
10/03/2027
|
US$ 17,813,138.21
|
US$ 281,790.00
|
|
10/04/2027
|
US$ 17,636,049.21
|
US$ 272,700.00
|
|
10/05/2027
|
US$ 17,463,665.46
|
US$ 281,790.00
|
|
10/06/2027
|
US$ 17,284,522.36
|
US$ 272,700.00
|
|
10/07/2027
|
US$ 17,110,139.07
|
US$ 281,790.00
|
|
10/08/2027
|
US$ 16,928,918.03
|
US$ 281,790.00
|
|
10/09/2027
|
US$ 16,746,631.82
|
US$ 272,700.00
|
|
10/10/2027
|
US$ 16,569,188.95
|
US$ 281,790.00
|
|
10/11/2027
|
US$ 16,384,788.34
|
US$ 272,700.00
|
|
10/12/2027
|
US$ 16,205,287.25
|
US$ 281,790.00
|
|
10/01/2028
|
US$ 16,018,747.72
|
US$ 281,790.00
|
|
10/02/2028
|
US$ 15,831,111.77
|
US$ 263,610.00
|
|
10/03/2028
|
US$ 15,654,549.64
|
US$ 281,790.00
|
|
10/04/2028
|
US$ 15,464,773.02
|
US$ 272,700.00
|
|
10/05/2028
|
US$ 15,280,038.75
|
US$ 281,790.00
|
10/06/2028
|
US$ 15,088,060.86
|
US$ 272,700.00
|
|
10/07/2028
|
US$ 14,901,183.80
|
US$ 281,790.00
|
|
10/08/2028
|
US$ 14,706,979.10
|
US$ 281,790.00
|
|
10/09/2028
|
US$ 14,511,632.91
|
US$ 272,700.00
|
|
10/10/2028
|
US$ 14,321,477.05
|
US$ 281,790.00
|
|
10/11/2028
|
US$ 14,123,864.98
|
US$ 272,700.00
|
|
10/12/2028
|
US$ 13,931,503.44
|
US$ 281,790.00
|
|
10/01/2029
|
US$ 13,731,599.21
|
US$ 281,790.00
|
|
10/02/2029
|
US$ 13,530,519.99
|
US$ 254,520.00
|
|
10/03/2029
|
US$ 13,347,832.53
|
US$ 281,790.00
|
|
10/04/2029
|
US$ 13,144,497.63
|
US$ 272,700.00
|
|
10/05/2029
|
US$ 12,946,565.32
|
US$ 281,790.00
|
|
10/06/2029
|
US$ 12,740,871.87
|
US$ 272,700.00
|
|
10/07/2029
|
US$ 12,540,643.69
|
US$ 281,790.00
|
|
10/08/2029
|
US$ 12,332,564.34
|
US$ 281,790.00
|
|
10/09/2029
|
US$ 12,123,261.95
|
US$ 272,700.00
|
|
10/10/2029
|
US$ 11,919,520.72
|
US$ 281,790.00
|
|
10/11/2029
|
US$ 11,707,790.57
|
US$ 272,700.00
|
|
10/12/2029
|
US$ 11,501,686.08
|
US$ 281,790.00
|
|
10/01/2030
|
‐
|
US$ 11,287,500
|
Purchase Option Date
|
Purchase Option Price
|
2nd anniversary
|
USD27,274,800
|
3rd anniversary
|
USD25,704,000
|
4th anniversary
|
USD24,021,000
|
5th anniversary
|
USD22,185,000
|
6th anniversary
|
USD20,360,000
|
7th anniversary
|
USD18,380,400
|
8th anniversary
|
USD16,116,900
|
9th anniversary
|
USD13,974,000
|
THE OWNERS
|
THE CHARTERERS
|
|
GREAT CATALINA LIMITED
|
SANTA CATALINA INC.
|
|
By:
|
By:
|
|
Name:
|
Name:
|
|
Title:
|
Title:
|
|
Date:
|
Date:
|
Clause
|
Page
|
|
1.
|
DEFINITIONS AND INTERPRETATION
|
1
|
2.
|
GUARANTEE AND INDEMNITY
|
2
|
3.
|
CONTINUING SECURITY
|
3
|
4.
|
RESTRICTIONS ON GUARANTOR
|
4
|
5.
|
PAYMENTS
|
5
|
6.
|
NO SET-OFF, COUNTERCLAIM OR TAX DEDUCTION
|
5
|
7.
|
DISCHARGE CONDITIONAL
|
5
|
8.
|
REPRESENTATIONS AND WARRANTIES
|
5
|
9.
|
INFORMATION UNDERTAKINGS
|
8
|
10.
|
FINANCIAL COVENANTS
|
9
|
11.
|
INDEMNITIES AND EXPENSES
|
10
|
12.
|
CHANGES TO THE PARTIES
|
11
|
13.
|
SET-OFF
|
11
|
14.
|
MISCELLANEOUS
|
12
|
15.
|
NOTICES
|
13
|
16.
|
GOVERNING LAW AND JURISDICTION
|
14
|
17.
|
CONTRACTUAL RECOGNITION OF BAIL-IN
|
15
|
SCHEDULE 1 [FORM OF COMPLIANCE CERTIFICATE]
|
16
|
|
EXECUTION PAGES
|
18
|
(1) |
TOP SHIPS INC., a corporation incorporated in the Republic of the Marshall Islands whose registered office is at 1 Vas. Sofias & Meg. Alexandrou, Athens 15124 Greece (the Guarantor); and
|
(2) |
GREAT CATALINA LIMITED, a corporation incorporated under the laws of the Republic of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island,
Majuro MH96960, the Republic of the Marshall Islands (the Owner which expression includes its successors and assigns).
|
(A) |
By a bareboat charter dated 30 September 2019 (as amended and/or supplemented from time to time, the Charter) and entered into between (i) the Owner as owners and (ii) the Santa Catalina Inc. as
charterer(the Charterer), the Owner agreed to bareboat charter the Vessel to the Charterer pursuant to the terms and conditions contained therein.
|
(B) |
It is one of the conditions precedent to the chartering of the Vessel by the Owner to the Charterer under the Charter that the Assignor enters into this Deed.
|
(C) |
This is the Charter Guarantee relating to the Vessel
|
1. |
DEFINITIONS AND INTERPRETATION
|
1.1 |
Definitions
|
1.2 |
General interpretation
|
|
(a) |
unless the context otherwise requires, words in the singular include the plural and vice versa;
|
|
(b) |
references to any document include that document as varied, novated, supplemented, extended or replaced from time to time;
|
|
(c) |
references to any enactment include re-enactments, amendments and extensions of that enactment;
|
|
(d) |
references to any person include that person’s successors and permitted assigns and references to a Party mean a party to this Guarantee;
|
|
(e) |
clause headings are for convenience of reference only and are not to be taken into account in construction;
|
|
(f) |
unless otherwise specified, references to Clauses and the recitals are respectively to Clauses of and the recitals to this Guarantee;
|
|
(g) |
any rights in respect of an asset includes:
|
|
(i) |
all amounts and proceeds paid or payable;
|
|
(ii) |
all rights to make any demand or claim; and
|
|
(iii) |
all powers, remedies, causes of action, security, guarantees and indemnities,
|
|
(h) |
the term the Security means the Security Interests created by the Transaction Documents to which the Guarantor is at any time a party;
|
|
(i) |
any words following the terms including, include, in particular or any similar expression shall be construed as
illustrative and shall not limit the sense of the words, description, definition, phrase or term preceding those terms; and
|
|
(j) |
a Potential Termination Event is continuing if it has not been remedied or waived and a Termination Event is continuing it has not been waived.
|
1.3 |
Agreement to prevail
|
1.4 |
Third party rights
|
|
(a) |
A person who is not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 (the Third Parties Act) to enforce or enjoy the benefit of any term of this Guarantee.
|
|
(b) |
Notwithstanding Clause 1.4(a) but subject always to Clause 1.4(c) and the provisions of the Third Parties Act, a person who is not a Party may rely on any clause under this Guarantee which expressly confers rights on them.
|
|
(c) |
Notwithstanding any term of this Guarantee or any other Transaction Document, the consent of any person who is not a Party is not required to rescind or vary this Guarantee at any time.
|
2. |
GUARANTEE AND INDEMNITY
|
2.1 |
Guarantee and indemnity
|
|
(a) |
guarantees the due and punctual performance by the Charterer of all its obligations under or pursuant to the Charter and the other Transaction Documents to which the Charterer is a party and the due and punctual payment by the
Charterer to the Owner of each and every part of the Outstanding Indebtedness in accordance with the terms of the Transaction Documents;
|
|
(b) |
undertakes that, if and whenever the Charterer fails to pay on the due date any sum whatsoever due and payable under or pursuant to any Transaction Document, the Guarantor shall pay such sum on demand by the Owner; and
|
|
(c) |
agrees, as a separate and independent stipulation, that if any amounts intended to be guaranteed by Clause 2.1(a) are not recoverable on the footing of a guarantee, whether by reason of illegality, incapacity, lack or exceeding of
powers, ineffectiveness of execution or any other fact or circumstance, whether or not known to the Owner or the Guarantor, then such amounts shall nevertheless be recoverable from the Guarantor as sole or principal debtor by way of
indemnity and shall be payable by the Guarantor to the Owner on demand.
|
2.2 |
Default interest
|
2.3 |
Nature of guarantee
|
2.4 |
Guarantor as principal debtor
|
2.5 |
Immediate recourse
|
3. |
CONTINUING SECURITY
|
3.1 |
Continuing security; guarantee not affected by other security
|
|
(a) |
is and shall at all times throughout the Agreement Term remain a continuing security for the payment of the full amount of the Outstanding Indebtedness from time to time;
|
|
(b) |
shall not be satisfied by any intermediate payment or satisfaction of any part of the Outstanding Indebtedness; and
|
|
(c) |
shall be in addition to and shall not merge with or be prejudiced or affected by any other security for the Outstanding Indebtedness which has been, or may at any time be, given to the Owner by the Charterer or any other person.
|
3.2 |
Waiver of defences
|
|
(a) |
any time or indulgence granted to, or composition with, the Charterer or any other person; or
|
|
(b) |
any termination, renewal, extension or variation of any credit, accommodation or facility granted by the Owner to the Charterer or any other person or any amendment of, or the making of any supplement to, any Transaction Document or
any other document or security; or
|
|
(c) |
the taking, variation, compromise, renewal, enforcement, realisation or release of, or refusal or neglect to take, perfect, release or enforce, any rights, remedies or securities against, or granted by, any Obligor or other person; or
|
|
(d) |
any incapacity, disability, or defect in powers of any Obligor or other person, or any irregular exercise of it by, or lack of authority of, any person purporting to act on behalf of any Obligor or other person; or
|
|
(e) |
any illegality, invalidity, avoidance or unenforceability on any grounds whatsoever of, or of any obligations of any Obligor or other person under, any Transaction Document or any other document or security; or
|
|
(f) |
the death, liquidation, administration, insolvency, amalgamation, reorganisation or dissolution, or any change in the constitution, name or style, of any Obligor, the Owner or any other person; or
|
|
(g) |
any other act, omission, matter or thing which, but for this provision, might operate to exonerate the Guarantor from liability, whether in whole or in part, under this Guarantee.
|
4. |
RESTRICTIONS ON GUARANTOR
|
4.1 |
Deferral of Guarantor’s rights
|
|
(a) |
to exercise any right of subrogation or indemnity or any other right or remedy in relation to any rights, security or moneys held by or recovered or receivable by the Owner under the Transaction Documents; or
|
|
(b) |
to exercise any right of set-off or counterclaim against the Charterer or any other Obligor; or
|
|
(c) |
to exercise any right of contribution from the Charterer or any other Obligor in respect of the Outstanding Indebtedness; or
|
|
(d) |
to receive, claim or have the benefit of any payment, distribution or security from the Charterer or any other Obligor; or
|
|
(e) |
unless so directed by the Owner (in which case the Guarantor shall prove in accordance with the Owner’s directions), to rank as a creditor or have any right of proof in the bankruptcy, liquidation or insolvency of the Charterer or any
other Obligor in competition with the Owner.
|
4.2 |
No security to be taken by the Guarantor
|
4.3 |
Application of payments or benefits received by the Guarantor
|
5. |
PAYMENTS
|
5.1 |
Place, time and manner of payment
|
5.2 |
Non-Business Days
|
5.3 |
Accrual of interest and periodic payments
|
5.4 |
Application of receipts
|
5.5 |
Waiver of rights of appropriation
|
6. |
NO SET-OFF, COUNTERCLAIM OR TAX DEDUCTION
|
7. |
DISCHARGE CONDITIONAL
|
8. |
REPRESENTATIONS AND WARRANTIES
|
8.1 |
Date of representations and warranties
|
8.2 |
Existence, powers and compliance
|
|
(a) |
is a corporation duly incorporated with limited liability, validly existing and in good standing under the laws of the Republic of the Marshall Islands (its jurisdiction of incorporation);
|
|
(b) |
has full power to own its property and assets and to carry on its business as it is now being conducted; and
|
|
(c) |
has complied with all statutory and other requirements relative to its business.
|
8.3 |
Capacity and authorisation
|
8.4 |
No contravention of laws or contractual restrictions
|
|
(a) |
contravene in any respect the constitutional documents of the Guarantor or any law, regulation or contractual restriction binding on the Guarantor or any of its assets; or
|
|
(b) |
result in the creation or imposition of any Security Interest (other than a Permitted Security Interest) on any of its assets in favour of any party.
|
8.5 |
Licences and approvals in force
|
8.6 |
Validity and enforceability
|
|
(a) |
constitute the legal, valid and binding obligations of the Guarantor enforceable against it in accordance with its terms; and
|
|
(b) |
(to the extent that by its terms it purports to do so) create a legal, valid and binding first priority Security Interest in accordance with its terms over all the assets to which by its terms it relates,
|
8.7 |
No third party Security Interests; title
|
8.8 |
Insolvency
|
8.9 |
No litigation current or pending
|
8.10 |
Governing law and enforcement
|
8.11 |
Truth of financial and other information
|
8.12 |
No liability to deduction or withholding
|
8.13 |
No filing or stamp taxes
|
8.14 |
Tax compliance
|
8.15 |
Pari passu obligations
|
8.16 |
Familiarity with the terms of the Agreement
|
8.17 |
Anti-Corruption Laws
|
8.18 |
Sanctions
|
|
(a) |
The Guarantor is not a Restricted Party nor is it owned and/or controlled (directly or indirectly) by a Restricted Party.
|
|
(b) |
No proceeds provided to the Charterer shall be made available to or for the benefit of a Restricted Party nor shall they otherwise be applied (directly or indirectly) in a manner or for a purpose prohibited by Sanctions.
|
9. |
INFORMATION UNDERTAKINGS
|
9.1 |
Duration of undertakings
|
9.2 |
Provision of financial information
|
|
(a) |
within 180 days of the end of each financial year, certified copies of the audited consolidated financial statements of the Group and the profit and loss accounts and balance sheets of the Guarantor for that financial year, prepared in
accordance with GAAP;
|
|
(b) |
together with the audited consolidated financial statements referred to in Clause 9.2(a) above, a Compliance Certificate addressed to the Owner substantially in the form set out in Schedule 1 ([Form Of
Compliance Certificate]) evidencing the compliance (or otherwise) of the Guarantor with the financial covenants in respect of the Group as set out in Clause 10 (Financial Covenants); and
|
|
(c) |
promptly, such further information in the possession or control of the Guarantor regarding the financial condition and operations of the Group as the Owner may reasonably request.
|
9.3 |
Notification of default
|
|
(a) |
notify the Owner of any Termination Event (and the steps, if any, being taken to remedy it) promptly upon its becoming aware of the occurrence of it, stating whether in its opinion such default is a Termination Event or a Potential
Termination Event; and
|
|
(b) |
promptly upon a request by the Owner, supply to the Owner a certificate signed on behalf of the Guarantor by two of its directors or senior officers certifying that no Termination Event is continuing (or if a Termination Event is
continuing, specifying the Termination Event and the steps, if any, being taken to remedy it).
|
9.4 |
Notification of claims, material litigation and other proceedings
|
|
(a) |
any claim, action, suit, proceedings or investigation against any Obligor in connection with Sanctions by any Sanctions Authority;
|
|
(b) |
any Environmental Claim against any Obligor which is current, pending or threatened and of any facts or circumstances which are reasonably likely to result in any Environmental Claim being commenced or threatened against any Obligor;
and
|
|
(c) |
any litigation, arbitration, tax claim or administrative proceeding instituted or (to its knowledge) threatened and of any other occurrence of which it becomes aware which might have a Material Adverse Effect.
|
9.5 |
Provision of other information
|
9.6 |
Know your customer checks
|
10. |
FINANCIAL COVENANTS
|
10.1 |
Duration
|
10.2 |
Financial covenants
|
|
(a) |
the Guarantor shall always maintain a minimum free cash or cash equivalent US$500,000.00 per vessel at consolidated level. For clarification purposes, any cash held under any minimum liquidity requirements and Debt Service Reserve
Accounts with other financiers shall be taken into account for the testing of this covenant; and
|
|
(b) |
the Leverage Ratio of the Guarantor (on a consolidated basis) shall not at any time exceed 75%.
|
|
(i) |
the Total Net Debt (i.e. the aggregate senior secured Financial Indebtedness of the Group, including 50% of Joint Venture vessels’ debt, as at such date minus the aggregate amount of all cash balances standing on such date to the
credit of a bank account of a member of the Group); and
|
|
(ii) |
the aggregate Fair Market Value of all Fleet Vessels including 50% of Joint Venture vessels.
|
10.3 |
Testing of financial condition
|
11. |
INDEMNITIES AND EXPENSES
|
11.1 |
Indemnity against costs
|
|
(a) |
in the negotiation, preparation, printing, execution and registration of this Guarantee and the other Transaction Documents;
|
|
(b) |
in collating, monitoring and otherwise attending to the relevant conditions precedent in the Charter;
|
|
(c) |
in the enforcement or preservation or the attempted enforcement or preservation of any of the rights and powers of the Owner under this Guarantee and the other Transaction Documents;
|
|
(d) |
in connection with any actual or proposed amendment of or supplement to this Guarantee or any other of the Transaction Documents, or with any request to the Owner to grant any consent or waiver in respect of any provision of this
Guarantee or any other Transaction Document, whether or not it is given; and
|
|
(e) |
arising out of any act or omission made by the Owner in good faith in connection with any of the matters dealt with in this Guarantee or any other Transaction Document.
|
11.2 |
Documentary taxes
|
11.3 |
Currency indemnity
|
11.4 |
Survival of indemnities
|
12. |
CHANGES TO THE PARTIES
|
12.1 |
No assignment or transfer by the Guarantor
|
12.2 |
Assignments and transfers by the Owner
|
12.3 |
Change of office
|
12.4 |
Delegation
|
12.5 |
Guarantor to assist
|
12.6 |
Disclosure of information
|
13. |
SET-OFF
|
14. |
MISCELLANEOUS
|
14.1 |
Time of essence
|
14.2 |
Remedies and waivers
|
14.3 |
Waivers and amendments to be in writing
|
14.4 |
Partial invalidity
|
14.5 |
Counterparts
|
14.6 |
Conclusiveness of certificates
|
14.7 |
Further assurances
|
|
(a) |
perfecting or protecting this Guarantee or the Security;
|
|
(b) |
the exercise by the Owner of any right, power or remedy vested in it under this Guarantee or any other Security Document to which the Guarantor is at any time a party; or
|
|
(c) |
enforcing this Guarantee or the Security after it has become enforceable (and the Guarantor undertakes to allow its name to be used as and when required by the Owner for this purpose).
|
15. |
NOTICES
|
15.1 |
Communications in writing; addresses
|
|
(a) |
in the case of the Owner, to it at:
|
|
Address: |
18/F, CATIC Tower,
212 Jiang Ning Road, Shanghai 200041, China The People’s Republic of China |
|
Telefax No.: |
+86 21 5289 5389
|
|
Attn: |
Mr. Wang Xing
|
|
Email: |
wangxing@chinaleasing.net
|
|
(b) |
in the case of the Guarantor, to it at:
|
|
Address: |
1 Vas. Sofias & Meg. Alexandrou
Athens 15124 Greece |
|
Telefax No: |
+ 30 210 80 56 441
|
|
Telephone No: |
+ 30 210 81 28 180
|
|
Attn: |
Alexandros Tsirikos
|
|
Email: |
atsirikos@topships.org
|
15.2 |
Delivery
|
|
(a) |
Subject to Clause 16.2(b) below, any communication or document made or delivered by one person to another under or in connection with this Guarantee will only be effective:
|
|
(i) |
if by way of fax, when received in legible form;
|
|
(ii) |
if by way of letter, when it has been left at the relevant address or 5 Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address; or
|
|
(iii) |
if by way of electronic mail, then in accordance with Clause 16.3 (Electronic communication),
|
|
(b) |
Any communication or document to be made or delivered to the Owner will be effective only when actually received by the Owner and then only if it is expressly marked for the attention of the department or officer specified as part of
its address details provided under Clause 16.1 (Communications in writing; addresses).
|
|
(c) |
Any communication or document which becomes effective, in accordance with Clause 16.2(a) or Clause 16.2(b) above, on a non-working day or after 5:00 p.m. in the place of receipt shall be deemed only to become effective at the opening
of business hours on the next working day in the place of receipt.
|
15.3 |
Electronic communication
|
|
(a) |
notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and
|
|
(b) |
notify each other of any change to their address or any other such information supplied by them by not less than 5 Business Days’ notice.
|
15.4 |
English language
|
16. |
GOVERNING LAW AND JURISDICTION
|
16.1 |
This Guarantee and any non-contractual obligations arising out of or in connection with it shall be governed by and construed in accordance with English law.
|
16.2 |
Any dispute arising out of or in connection with this Deed (including a dispute regarding the existence, validity or termination of this Deed or any non-contractual obligation arising out of or in connection with this Deed) (a
“Dispute”) shall be referred to and finally resolved by arbitration in London in accordance with the Arbitration Act 1996 or any statutory modification or re-enactment thereof save to the extent necessary to give effect to the provisions
of this Clause 16 (Law and Jurisdiction). The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association (LMAA) Terms current at the time when the arbitration proceedings are commenced.
|
16.3 |
The reference shall be to three arbitrators. A Party wishing to refer a Dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other Party requiring the other Party to appoint its own
arbitrator within fourteen (14) calendar days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless the other Party appoints its own arbitrator and gives notice that it has done so within the fourteen
(14) days specified. If the other Party does not appoint its own arbitrator and give notice that it has done so within the fourteen (14) days specified, the Party referring a Dispute to arbitration may, without the requirement of any
further prior notice to the other Party, appoint its arbitrator as sole arbitrator and shall advise the other Party accordingly. The award of a sole arbitrator shall be binding on both Parties as
|
16.4 |
In cases where neither the claim nor any counterclaim exceeds the sum of US$50,000 (or such other sum as the Parties may agree) the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure current at the time
when the arbitration proceedings are commenced. Where the reference is to three arbitrators the procedure for making appointments shall be in accordance with the procedure for full arbitration stated above.
|
16.5 |
The language of the arbitration shall be English.
|
17. |
CONTRACTUAL RECOGNITION OF BAIL-IN
|
17.1 |
Notwithstanding any other term of any Transaction Document or any other agreement, arrangement or understanding between the parties to a Transaction Document, each Party acknowledges and accepts that any liability of any party to a
Transaction Document under or in connection with the Transaction Documents may be subject to Bail-In Action by the relevant Resolution Authority and acknowledges and accepts to be bound by the effect of:
|
|
(a) |
any Bail-In Action in relation to any such liability, including (without limitation):
|
|
(i) |
a reduction, in full or in part, in the principal amount, or outstanding amount due (including any accrued but unpaid interest) in respect of any such liability;
|
|
(ii) |
a conversion of all, or part of, any such liability into shares or other instruments of ownership that may be issued to, or conferred on, it; and
|
|
(iii) |
a cancellation of any such liability; and
|
|
(b) |
a variation of any term of any Transaction Document to the extent necessary to give effect to any Bail-In Action in relation to any such liability.
|
To: |
GREAT CATALINA LIMITED
Trust Company Complex Ajeltake Road Ajeltake Island Majuro MH96960 The Republic of the Marshall Islands |
(a) |
the bareboat charter dated 30 September 2019 (as amended and/or supplemented from time to time, the Charter) made between (1) yourselves as Owner and (2) Santa Catalina Inc. as Charterer,
pursuant to which the Owner agreed to bareboat charter the Vessel to the Charterer; and
|
(b) |
the deed of guarantee and indemnity dated [●] 2019 (the Guarantee) made between (1) ourselves as Guarantor and (2) yourselves as Owner under which we have guaranteed the performance by the
Charterer of its obligations under the Bareboat Charter.
|
1. |
Attached to this certificate are the latest audited consolidated financial statements of the Group and the profit and loss accounts and balance sheets for the financial year ending on [●] 201[●], prepared in accordance with GAAP.
|
2. |
Set out below are the respective amounts, in [Dollars][Euro], of [●], [●], [●], [●] and [●]of the Group as at [●] 201[●]:
|
[●]
|
[$][€][●]
|
|
[●]
|
[$][€][●]
|
|
[●]
|
[$][€][●]
|
|
[●]
|
[$][€][●]
|
|
[●]
|
[$][€][●]
|
3. |
Accordingly, as at the date of this certificate, the financial covenants set out in Clause 10.2 (Financial covenants) of the Guarantee [are][are not] complied with, in that as at [●] 201[●]:
|
|
(i) |
the aggregate amount of cash is $[●] per vessel at consolidated level;
|
|
(ii) |
the Leveraged Ratio (on a consolidated basis) does not exceed 75%.
|
4. |
As at [●] 201[●] no [Termination Event][Default] has occurred and is continuing.
|
EXECUTED as a DEED
by TOP SHIPS INC. a company incorporated in the Republic of the Marshall Islands acting by who, in accordance with the laws of the Republic of the Marshall Islands, is acting under the authority of the company as [authorised signatory][attorney-in-fact] in the presence of: |
)
) ) ) ) ) ) ) ) |
Signature in the name of the company
TOP SHIPS INC. ……………………………………………..
[Authorised signatory][Attorney-in-fact]
|
EXECUTED as a DEED
by GREAT CATALINA LIMITED a company incorporated in the Republic of the Marshall Islands acting by who, in accordance with the laws of the Republic of the Marshall Islands, is acting under the authority of the company as [authorised signatory][attorney-in-fact] in the presence of: |
)
) ) ) ) ) ) ) ) |
Signature in the name of the company
GREAT CATALINA LIMITED ……………………………………………..
[Authorised signatory][Attorney-in-fact]
|
Subsidiary
|
Jurisdiction of Incorporation
|
Top Tanker Management Inc.
|
Marshall Islands
|
Mytikas Shipping Company Limited
|
Marshall Islands
|
Lyndon International Co
|
Marshall Islands
|
Monte Carlo One Shipping Company Limited
|
Marshall Islands
|
Monte Carlo Seven Shipping Company Limited
|
Marshall Islands
|
Monte Carlo 37 Shipping Company Limited
|
Marshall Islands
|
Monte Carlo 39 Shipping Company Limited
|
Marshall Islands
|
Monte Carlo LAX Shipping Company Limited
|
Marshall Islands
|
Monte Carlo 71 Shipping Company Limited
|
Marshall Islands
|
Gramos Shipping Company Inc.
|
Marshall Islands
|
Style Maritime Ltd.
|
Marshall Islands
|
Jasmin Finance Limited
|
Marshall Islands
|
Astarte International Inc.
|
Marshall Islands
|
PCH77 Shipping Company Limited
|
Marshall Islands
|
Eco Seven Inc.
|
Marshall Islands
|
PCH Dreaming Inc.
|
Marshall Islands
|
South California Inc.
|
Marshall Islands
|
Malibu Warrior Inc.
|
Marshall Islands
|
Santa Catalina Inc.
|
Marshall Islands
|
Santa Monica Marine Inc.
|
Marshall Islands
|