DYNAGAS LNG PARTNERS LP
|
(Exact name of Registrant as specified in its charter)
|
Republic of the Marshall Islands
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(Jurisdiction of incorporation or organization)
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Poseidonos Avenue and Foivis 2 Street
166 74 Glyfada, Athens, Greece
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(Address of principal executive offices)
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Michael Gregos
Poseidonos Avenue and Foivis 2 Street
166 74 Glyfada, Athens, Greece
Tel. +30 210 891 7960
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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
|
Trading Symbol(s)
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Name of Each Exchange on Which Registered
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Common units representing limited partnership interests
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DLNG
|
New York Stock Exchange
|
9.00% Series A Cumulative Redeemable Preferred Units
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DLNG PR A
|
New York Stock Exchange
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8.75% Series B Fixed to Floating Rate Cumulative Redeemable Perpetual Preferred Units
|
DLNG PR B
|
New York Stock Exchange
|
[_] Yes
|
[X] No
|
[_] Yes
|
[X] No
|
[X] Yes
|
[_] No
|
[X] Yes
|
[_] No
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Large accelerated filer [_]
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Accelerated filer [ ]
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Non-accelerated filer [X]
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Emerging growth company [_]
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Indicate by check mark which basis of accounting the Registrant has used to prepare the financial statements included in this filing:
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[X] U.S. GAAP
|
[_] International Financial Reporting Standards as issued by the International Accounting Standards Board
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[_] Other
|
If "Other" has been checked in response to the previous question, indicate by check mark which
financial statement item the Registrant has elected to follow.
|
[_] Item 17
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[_] Item 18
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[_] Yes
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[X] No
|
[_] Yes
|
[_] No
|
|
• |
LNG market trends, including charter rates, factors affecting supply and demand, and opportunities for the profitable operations of LNG carriers;
|
|
• |
our anticipated growth strategies;
|
|
• |
the effect of a worldwide economic slowdown;
|
|
• |
potential turmoil in the global financial markets;
|
|
• |
stability of Europe and the Euro;
|
|
• |
fluctuations in currencies and interest rates;
|
|
• |
the impact of the discontinuance of LIBOR after 2021 on interest rates of our debt that reference LIBOR;
|
|
• |
general market conditions, including fluctuations in charter hire rates and vessel values;
|
|
• |
changes in our operating expenses, including dry-docking, crewing and insurance costs, bunker prices and fuel prices;
|
|
• |
the adequacy of our insurance to cover our losses;
|
|
• |
our ability to make cash distributions on the units or any increase or decrease in or elimination of our cash distributions;
|
|
• |
our future financial condition or results of operations and our future revenues and expenses;
|
|
• |
our ability to repay or refinance our existing debt and settling of interest rate swaps (if any);
|
|
• |
our ability to incur additional indebtedness on acceptable terms or at all, to access the public and private debt and equity markets and to meet our restrictive covenants and other obligations under our credit facilities, including our
$675 Million Credit Facility (as defined below);
|
|
• |
our Sponsor's ability to fund our $30 Million Revolving Credit Facility (as defined below);
|
|
• |
planned capital expenditures and availability of capital resources to fund capital expenditures;
|
|
• |
our ability to comply with additional costs and risks related to our environmental, social and governance policies;
|
|
• |
our ability to maintain long-term relationships with major LNG traders;
|
|
• |
our ability to leverage our Sponsor's relationships and reputation in the shipping industry;
|
|
• |
our ability to realize the expected benefits from our vessel acquisitions;
|
|
• |
our ability to purchase vessels from our Sponsor and other parties in the future, including the Optional Vessels;
|
|
• |
our continued ability to enter into profitable long-term time charters;
|
|
• |
our ability to maximize the use of our vessels, including the re-deployment or disposition of vessels no longer under long-term time charters;
|
|
• |
future purchase prices of newbuildings and secondhand vessels and timely deliveries of such vessels;
|
|
• |
our ability to compete successfully for future chartering opportunities and newbuilding opportunities (if any);
|
|
• |
acceptance of a vessel by its charterer;
|
|
• |
termination dates and extensions of charters;
|
|
• |
changes in governmental rules and regulations or actions taken by regulatory authorities, including the implementation of new environmental regulations;
|
|
• |
the expected cost of, and our ability to comply with, governmental regulations, including regulations relating to ballast water and fuel sulphur, maritime self-regulatory organization standards, as well as standard regulations imposed
by our charterers applicable to our business;
|
|
• |
availability of skilled labor, vessel crews and management;
|
|
• |
our anticipated incremental general and administrative expenses as a publicly traded limited partnership and our fees and expenses payable under the fleet management agreements and the administrative services agreement with our
Manager;
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|
• |
our anticipated taxation and distributions to our unitholders;
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|
• |
estimated future maintenance and replacement capital expenditures;
|
|
• |
our ability to retain key employees;
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• |
charterers' increasing emphasis on environmental and safety concerns;
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• |
potential liability from any pending or future litigation;
|
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• |
potential disruption of shipping routes due to accidents, political events, public health threats, pandemics, international hostilities and instability, piracy or acts by terrorists;
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|
• |
the impact of public health threats and outbreaks of other highly communicable diseases;
|
|
• |
the length and severity of the recent coronavirus ("COVID-19") outbreak, including its impacts across our business on demand, operations in China and the Far East and knock-on impacts to our global operations;
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|
• |
the impact of adverse weather and natural disasters;
|
|
• |
future sales of our common units in the public market;
|
|
• |
any malfunction or disruption of information technology systems and networks that our operations rely on or any impact of a possible cybersecurity event;
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|
• |
our business strategy and other plans and objectives for future operations; and
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|
• |
other factors detailed in this Annual Report and from time to time in our periodic reports.
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PART I
|
1
|
|
ITEM 1.
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IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
|
1
|
ITEM 2.
|
OFFER STATISTICS AND EXPECTED TIMETABLE
|
1
|
ITEM 3.
|
KEY INFORMATION
|
1
|
ITEM 4.
|
INFORMATION ON THE PARTNERSHIP
|
42
|
ITEM 4A.
|
UNRESOLVED STAFF COMMENTS
|
71
|
ITEM 5.
|
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
|
71
|
ITEM 6.
|
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
|
86
|
ITEM 7.
|
MAJOR UNITHOLDERS AND RELATED PARTY TRANSACTIONS
|
89
|
ITEM 8.
|
FINANCIAL INFORMATION
|
97
|
ITEM 9.
|
THE OFFER AND LISTING.
|
100
|
ITEM 10.
|
ADDITIONAL INFORMATION
|
100
|
ITEM 11.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
108
|
ITEM 12.
|
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
|
109
|
PART II
|
109
|
|
ITEM 13.
|
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
|
109
|
ITEM 14.
|
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
|
109
|
ITEM 15.
|
CONTROLS AND PROCEDURES
|
109
|
ITEM 16.
|
[RESERVED]
|
110
|
ITEM 16A.
|
AUDIT COMMITTEE FINANCIAL EXPERT
|
110
|
ITEM 16B.
|
CODE OF ETHICS
|
110
|
ITEM 16C.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
111
|
ITEM 16D.
|
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
|
111
|
ITEM 16E.
|
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
|
111
|
ITEM 16F.
|
CHANGE IN REGISTRANTS' CERTIFYING ACCOUNTANT
|
111
|
ITEM 16G.
|
CORPORATE GOVERNANCE
|
111
|
ITEM 16H.
|
MINE SAFETY DISCLOSURE
|
112
|
PART III
|
112
|
|
ITEM 17
|
FINANCIAL STATEMENTS
|
112
|
ITEM 18
|
FINANCIAL STATEMENTS
|
112
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ITEM 19
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EXHIBITS
|
113
|
A. |
SELECTED FINANCIAL DATA
|
BALANCE SHEET DATA:
|
||||||||||||||||||||
Total current assets
|
$
|
18,172
|
$
|
112,963
|
$
|
70,404
|
$
|
60,195
|
$
|
25,814
|
||||||||||
Vessels, net
|
916,697
|
947,377
|
977,298
|
1,007,617
|
1,036,157
|
|||||||||||||||
Total assets
|
989,187
|
1,063,436
|
1,054,319
|
1,106,676
|
1,108,103
|
|||||||||||||||
Total current liabilities
|
64,635
|
272,742
|
22,898
|
53,056
|
51,353
|
|||||||||||||||
Total long-term debt, including current portion, gross of deferred financing fees
|
663,000
|
722,800
|
727,600
|
722,500
|
688,333
|
|||||||||||||||
Total partners' equity
|
313,707
|
326,485
|
318,318
|
367,836
|
367,838
|
|||||||||||||||
CASH FLOW DATA:
|
||||||||||||||||||||
Net cash provided by operating activities
|
$
|
43,177
|
$
|
42,994
|
$
|
59,339
|
$
|
103,618
|
$
|
96,944
|
||||||||||
Net cash used in investing activities
|
-
|
(409
|
)
|
-
|
(37,472
|
)
|
(205,045
|
)
|
||||||||||||
Net cash (used in)/provided by financing activities*
|
(86,888
|
)
|
(132
|
)
|
(74,470
|
)
|
(32,844
|
)
|
121,445
|
|||||||||||
FLEET PERFORMANCE DATA:
|
||||||||||||||||||||
Number of vessels at the end of the year
|
6
|
6
|
6
|
6
|
6
|
|||||||||||||||
Average number of vessels in operation (2)
|
6.0
|
6.0
|
6.0
|
6.0
|
5.0
|
|||||||||||||||
Average age of vessels in operation at end of year (years)
|
9.4
|
8.4
|
7.4
|
6.4
|
5.4
|
|||||||||||||||
Available Days (3)
|
2,190.0
|
2,144.7
|
2,140.3
|
2,196.0
|
1,836.0
|
|||||||||||||||
Fleet utilization (4)
|
98.5
|
%
|
100
|
%
|
98
|
%
|
100
|
%
|
99
|
%
|
||||||||||
OTHER FINANCIAL DATA:
|
||||||||||||||||||||
Time Charter Equivalent (in US dollars) (5)
|
$
|
58,535
|
$
|
57,972
|
$
|
63,249
|
$
|
75,997
|
$
|
77,559
|
||||||||||
Adjusted EBITDA (5)
|
$
|
90,357
|
$
|
96,094
|
$
|
107,545
|
$
|
139,531
|
$
|
113,202
|
* |
Comparative amounts have been reclassified due to the current presentation of restricted cash following the adoption of ASU No. 2016-18-Statement of Cash Flows-Restricted Cash.
|
(1) |
Voyage expenses include mainly commissions of 1.25% paid to our Manager.
|
(2) |
Represents the number of vessels that constituted our Fleet for the relevant year, as measured by the sum of the number of days each vessel was a part of our Fleet during the period divided by the number of calendar days in the period.
|
(3) |
Available Days are the total number of calendar days that our vessels were in our possession during a period, less the total number of scheduled off-hire days during the period associated with major repairs, or dry-dockings.
|
(4) |
We calculate fleet utilization by dividing the number of our revenue earning days, which are the total number of Available Days of our vessels net of unscheduled off-hire days, during a period, by the number of our Available Days
during that period. The shipping industry uses fleet utilization to measure a company's efficiency in finding employment for its vessels and minimizing the amount of days that its vessels are off hire for reasons other than scheduled
off-hires for vessel upgrades, dry-dockings or special or intermediate surveys.
|
(5) |
Non-GAAP Financial Information
|
Year Ended December 31,
|
||||||||||||||||||||
(In thousands of Dollars, except for TCE rate data)
|
2019
|
2018
|
2017
|
2016
|
2015
|
|||||||||||||||
Voyage revenues
|
$
|
130,901
|
$
|
127,135
|
$
|
138,990
|
$
|
169,851
|
$
|
145,202
|
||||||||||
Voyage expenses
|
$
|
(2,709
|
)
|
$
|
(2,802
|
)
|
$
|
(3,619
|
)
|
$
|
(2,961
|
)
|
$
|
(2,804
|
)
|
|||||
Time charter equivalent revenues
|
$
|
128,192
|
$
|
124,333
|
$
|
135,371
|
$
|
166,890
|
$
|
142,398
|
||||||||||
Total Available Days
|
2,190.0
|
2,144.7
|
2,140.3
|
2,196.0
|
1,836.0
|
|||||||||||||||
Time charter equivalent (TCE) rate
|
$
|
58,535
|
$
|
57,972
|
$
|
63,249
|
$
|
75,997
|
$
|
77,559
|
(In thousands of U.S. dollars)
|
||||||||||||||||||||
Reconciliation to Net Income
|
||||||||||||||||||||
Net Income
|
$
|
3,613
|
$
|
3,613
|
$
|
17,339
|
$
|
66,854
|
$
|
60,050
|
||||||||||
Net interest and finance costs (1)
|
56,260
|
49,439
|
46,078
|
34,991
|
27,939
|
|||||||||||||||
Depreciation
|
30,680
|
30,330
|
30,319
|
30,395
|
24,387
|
|||||||||||||||
Class survey costs
|
-
|
7,422
|
6,193
|
81
|
-
|
|||||||||||||||
Amortization of fair value of acquired time charter
|
-
|
5,267
|
7,247
|
7,268
|
218
|
|||||||||||||||
Amortization of deferred revenue
|
(377
|
)
|
(45
|
)
|
369
|
(58
|
)
|
608
|
||||||||||||
Amortization of deferred charges
|
181
|
68
|
-
|
-
|
-
|
|||||||||||||||
Adjusted EBITDA
|
$
|
90,357
|
$
|
96,094
|
$
|
107,545
|
$
|
139,531
|
$
|
113,202
|
B. |
CAPITALIZATION AND INDEBTEDNESS
|
C. |
REASONS FOR THE OFFER AND USE OF PROCEEDS
|
D. |
RISK FACTORS
|
|
• |
the vessel suffers a total loss or is damaged beyond repair;
|
|
• |
we default on our obligations under the charter, including prolonged periods of vessel off-hire;
|
|
• |
war or hostilities significantly disrupt the free trade of the vessel;
|
|
• |
the vessel is requisitioned by any governmental authority; or
|
|
• |
a prolonged force majeure event occurs, such as war, political unrest or a pandemic which prevents the chartering of the vessel, in each such event in accordance with the terms and conditions of the respective charter.
|
|
• |
restructuring our debt;
|
|
• |
seeking additional debt or equity capital;
|
|
• |
selling assets;
|
|
• |
reducing distributions relating to our preferred units;
|
|
• |
reducing, delaying or cancelling our business activities, acquisitions, investments or capital expenditures; or
|
|
• |
seeking bankruptcy protection.
|
|
• |
deterioration of worldwide, regional or national economic conditions and activity, which could further reduce or prolong the recent significant declines in energy prices, or adversely affect global demand for LNG, demand for our
services, and charter and spot rates;
|
|
• |
disruptions to our operations as a result of the potential health impact on our employees and crew, and on the workforces of our customers and business partners;
|
|
• |
disruptions to our business from, or additional costs related to, new regulations, directives or practices implemented in response to the pandemic, such as travel restrictions (including for any of our onshore personnel or any of our
crew members to timely embark or disembark from our vessels), increased inspection regimes, hygiene measures (such as quarantining and physical distancing) or increased implementation of remote working arrangements;
|
|
• |
potential shortages or a lack of access to required spare parts for our vessels, or potential delays in any repairs to, or scheduled or unscheduled maintenance or modifications or dry docking of, our vessels, as a result of a lack of
berths available by shipyards from a shortage in labor or due to other business disruptions;
|
|
• |
potential delays in vessel inspections and related certifications by class societies, customers or government agencies;
|
|
• |
potential reduced cash flows and financial condition, including potential liquidity constraints;
|
|
• |
reduced access to capital, including the ability to refinance any existing obligations, as a result of any credit tightening generally or due to continued declines in global financial markets, including to the prices of publicly-traded
securities of us, our peers and of listed companies generally;
|
|
• |
a reduced ability to opportunistically sell any of our LNG vessels on the second-hand market, either as a result of a lack of buyers or a general decline in the value of second-hand vessels;
|
|
• |
a decline in the market value of our vessels, which may cause us to (a) incur impairment charges or (b) breach certain covenants under our financing agreements;
|
|
• |
disruptions, delays or cancellations in the construction of new LNG projects (including production, liquefaction, regasification, storage and distribution facilities), which could limit or adversely affect our ability to pursue future
growth opportunities; and
|
|
• |
potential deterioration in the financial condition and prospects of our customers or joint venture partners, or attempts by customers or third parties to invoke force majeure contractual clauses as a result of delays or other
disruptions.
|
|
• |
fail to realize anticipated benefits, such as new customer relationships, cost-savings or cash flow enhancements;
|
|
• |
be unable to attract, hire, train or retain qualified shore and seafaring personnel to manage and operate our growing business and Fleet;
|
|
• |
decrease our liquidity by using a significant portion of available cash or borrowing capacity to finance acquisitions;
|
|
• |
significantly increase our interest expense or financial leverage if we incur additional debt to finance acquisitions;
|
|
• |
incur or assume unanticipated liabilities, losses or costs associated with the business or vessels acquired; or
|
|
• |
incur other significant charges, such as impairment of goodwill or other intangible assets, asset devaluation or restructuring charges.
|
|
• |
the rates we obtain from our charters;
|
|
• |
the level of our operating costs, such as the cost of crews and insurance;
|
|
• |
the continued availability of natural gas production;
|
|
• |
demand for LNG;
|
|
• |
supply of LNG carriers;
|
|
• |
prevailing global and regional economic and political conditions, including the recent worldwide economic downturn caused by the spread of the novel COVID-19 virus;
|
|
• |
currency exchange rate fluctuations; and
|
|
• |
the effect of governmental regulations and maritime self-regulatory organization standards on the conduct of our business.
|
|
• |
the level of capital expenditures we make, including for maintaining or replacing vessels, building new vessels, acquiring secondhand vessels and complying with regulations;
|
|
• |
the number of unscheduled off-hire days for our Fleet and the timing of, and number of days required for, scheduled dry-docking of our vessels;
|
|
• |
our debt service requirements and restrictions on distributions contained in our debt instruments;
|
|
• |
the level of debt we will incur to fund future acquisitions, including any debt we may incur as a result of acquiring the Optional Vessels that we have the right (but not the obligation) to acquire from our Sponsor, pursuant to the
terms and subject to the conditions of the Omnibus Agreement (defined below). See "Item 7. Major Unitholders and Related Party Transactions—B. Related Party Transactions";
|
|
• |
fluctuations in interest rates;
|
|
• |
fluctuations in our working capital needs;
|
|
• |
variable tax rates;
|
|
• |
the expected cost of and our ability to comply with environmental and regulatory requirements, including with respect to emissions of air pollutants and greenhouse gases, as well as future changes in such requirements or other actions
taken by regulatory authorities, governmental organizations, classification societies and standards imposed by our charterers applicable to our business;
|
|
• |
our ability to make, and the level of, working capital borrowings;
|
|
• |
the performance of our subsidiaries and their ability to distribute cash to us; and
|
|
• |
the amount of any cash reserves established by our Board of Directors.
|
|
• |
size, age, technical specifications and condition of the ship;
|
|
• |
efficiency of ship operation and reputation for operation of highly specialized vessels;
|
|
• |
LNG shipping experience and quality of ship operations;
|
|
• |
shipping industry relationships and reputation for customer service;
|
|
• |
technical ability and reputation for operation of highly specialized ships;
|
|
• |
quality and experience of officers and crew;
|
|
• |
safety record;
|
|
• |
the ability to finance ships at competitive rates and financial stability generally;
|
|
• |
relationships with shipyards and the ability to get suitable berths;
|
|
• |
its willingness to assume operational risks;
|
|
• |
construction management experience, including the ability to obtain on-time delivery of new ships according to customer specifications; and
|
|
• |
competitiveness of the bid in terms of overall price.
|
|
• |
provides that our General Partner may make determinations or take or decline to take actions without regard to our or our unitholders' interests. Our General Partner may consider only the interests and factors that it desires, and it
has no duty or obligation to give any consideration to any interest of, or factors affecting us, our affiliates or our unitholders. Decisions made by our General Partner will be made by its sole owner. Specifically, our General Partner
may decide to exercise its right to make a determination to receive common units in exchange for resetting the target distribution levels related to the incentive distribution rights, call right, pre-emptive rights or registration rights,
consent or withhold consent to any merger or consolidation of the Partnership, appoint certain of our directors or vote for the election of any director, vote or refrain from voting on amendments to our Partnership Agreement that require
a vote of the outstanding units, voluntarily withdraw from the Partnership, transfer (to the extent permitted under our Partnership Agreement) or refrain from transferring its units, the general partner interest or incentive distribution
rights or vote upon the dissolution of the Partnership;
|
|
• |
provides that our directors and officers are entitled to make other decisions in "good faith," meaning they reasonably believe that the decision is in our best interests;
|
|
• |
generally provides that affiliated transactions and resolutions of conflicts of interest not approved by the conflicts committee of our Board of Directors, or our Conflicts Committee, and not involving a vote of unitholders must be on
terms no less favorable to us than those generally being provided to or available from unrelated third-parties or be "fair and reasonable" to us and that, in determining whether a transaction or resolution is "fair and reasonable," our
Board of Directors may consider the totality of the relationships between the parties involved, including other transactions that may be particularly advantageous or beneficial to us; and
|
|
• |
provides that neither our General Partner nor our officers or our directors will be liable for monetary damages to us, our members or assignees for any acts or omissions unless there has been a final and non-appealable judgment entered
by a court of competent jurisdiction determining that our General Partner, our directors or officers or those other persons engaged in actual fraud or willful misconduct.
|
|
• |
The unitholders are unable to remove our General Partner without its consent because our General Partner and its affiliates, including our Sponsor, own sufficient units to be able to prevent its removal. The vote of the holders of at
least 66 2/3% of all outstanding common units (including common units held by the General Partner and its Affiliates) voting together as a single class is required to remove our General Partner. Our Sponsor currently owns 15,595,000 of
our common units, representing approximately 44% of the outstanding common units.
|
|
• |
Our Partnership Agreement contains provisions that limit the removal of members of our Board of Directors. Appointed Directors may be removed (i) without Cause (as defined in the Partnership Agreement) only by the General Partner and
(ii) with Cause only by the General Partner, the vote of the holders of a majority of the outstanding units at a properly called meeting of our Limited Partners, or by vote of the majority of the other members of our Board of Directors.
Elected Directors may be removed with Cause only by vote of the majority of the other members of our Board of Directors or by a vote of the majority of the outstanding common units at a properly called meeting of our Limited Partners.
|
|
• |
Common unitholders are entitled to elect only three of the five members of our Board of Directors. Our General Partner in its sole discretion appoints the remaining two directors.
|
|
• |
Election of the three directors elected by unitholders is staggered, meaning that the members of only one of three classes of our elected directors are selected each year. In addition, the two directors appointed by our General Partner
serve until a successor is duly appointed by the General Partner.
|
|
• |
Our Partnership Agreement contains provisions limiting the ability of unitholders to call meetings of unitholders, to nominate directors and to acquire information about our operations as well as other provisions limiting the
unitholders' ability to influence the manner or direction of management.
|
|
• |
Unitholders' voting rights are further restricted by the Partnership Agreement providing that if at any time any person or group, other than our General Partner and its affiliates, or a direct or subsequently approved transferee of our
General Partner or its affiliates or a transferee approved by the Board of Directors, acquires, in the aggregate, beneficial ownership of more than 4.9% of any class or series of our limited partner interests then outstanding, that person
or group will lose voting rights on all of its limited partner interests of such class or series in excess of 4.9%, except for the Series A Preferred Units and Series B Preferred Units, and such limited partner interests will not be
considered to be outstanding when sending notices of a meeting of limited partners, calculating required votes (except for nominating a person for election to our Board of Directors), determining the presence of a quorum, or for other
similar purposes. The voting rights of any such limited partner interests in excess of 4.9% will effectively be redistributed pro rata among the other limited partner interests (as applicable) holding less than 4.9% of the voting power of
such class or series. Our General Partner, its affiliates and persons who acquired limited partner interests with the prior approval of our Board of Directors will not be subject to this 4.9% limitation except with respect to voting their
common units in the election of the elected directors. Units held in nominee or street name account will be voted by the broker or other nominee in accordance with the instruction of the beneficial owner unless the arrangement between
the beneficial owner and his nominee provides otherwise.
|
|
• |
There are no restrictions in our Partnership Agreement on our ability to issue additional equity securities.
|
|
• |
renew existing charters upon their expiration;
|
|
• |
obtain new charters;
|
|
• |
successfully interact with shipyards;
|
|
• |
obtain financing on commercially acceptable terms;
|
|
• |
maintain access to capital under the Sponsor credit facility; or
|
|
• |
maintain satisfactory relationships with suppliers and other third-parties.
|
|
• |
the amount and timing of asset purchases and sales;
|
|
• |
cash expenditures;
|
|
• |
borrowings;
|
|
• |
estimates of maintenance and replacement capital expenditures;
|
|
• |
the issuance of additional units; and
|
|
• |
the creation, reduction or increase of reserves in any quarter.
|
|
• |
increases in interest rates or other events that may affect the availability of sufficient financing for LNG projects on commercially reasonable terms;
|
|
• |
increases in the cost of natural gas derived from LNG relative to the cost of natural gas generally;
|
|
• |
increases in the production levels of low-cost natural gas in domestic natural gas consuming markets, which could further depress prices for natural gas in those markets and make LNG uneconomical;
|
|
• |
increases in the production of natural gas 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-natural gas
pipelines to natural gas pipelines in those markets;
|
|
• |
decreases in the consumption of natural gas due to increases in its price, decreases in the price of alternative energy sources or other factors making consumption of natural gas less attractive;
|
|
• |
any significant explosion, spill or other incident involving an LNG facility or carrier;
|
|
• |
infrastructure constraints, including but not limited to, delays in the construction of liquefaction facilities, the inability of project owners or operators to obtain governmental approvals to construct or operate LNG facilities, as
well as community or political action group resistance to new LNG infrastructure due to concerns about the environment, safety and terrorism;
|
|
• |
labor or political unrest or military conflicts affecting existing or proposed areas of LNG production or regasification;
|
|
• |
concerns regarding the spread of disease, for example, the COVID-19 virus, safety and terrorism;
|
|
• |
decreases in the price of LNG, which might decrease the expected returns relating to investments in LNG projects;
|
|
• |
new taxes or regulations affecting LNG production or liquefaction that make LNG production less attractive; or
|
|
• |
negative global or regional economic or political conditions, including the recent worldwide economic downturn caused by the spread of the novel COVID-19 virus, particularly in LNG consuming regions, which could reduce energy
consumption or its growth.
|
|
• |
price and availability of crude oil and petroleum products;
|
|
• |
worldwide and regional supply of, demand for and price of natural gas;
|
|
• |
the costs of exploration, development, production, transportation and distribution of natural gas;
|
|
• |
expectations regarding future energy prices for both natural gas and other sources of energy, including renewable energy sources;
|
|
• |
the level of worldwide LNG production and exports;
|
|
• |
government laws and regulations, including but not limited to environmental protection laws and regulations;
|
|
• |
local and international political, economic and weather conditions, such as the recent worldwide economic downturn caused by the spread of the novel COVID-19 virus;
|
|
• |
political and military conflicts; and
|
|
• |
the availability and cost of alternative energy sources, including alternate sources of natural gas in gas importing and consuming countries as well as alternate sources of primary energy such as renewables.
|
|
• |
a reduction in exploration for or development of new natural gas reserves or projects, or the delay or cancellation of existing projects as energy companies lower their capital expenditures budgets, which may reduce our growth
opportunities;
|
|
• |
low oil prices negatively affecting the market price of natural gas, to the extent that natural gas prices are benchmarked to the price of crude oil, in turn negatively affecting the economics of potential new LNG production projects,
which may reduce our growth opportunities;
|
|
• |
high oil prices negatively affecting the competitiveness of natural gas to the extent that natural gas prices are benchmarked to the price of crude oil;
|
|
• |
low gas prices globally and/or weak differentials between prices in the Atlantic Basin and the Pacific Basin leading to reduced inter-basin trading of LNG and reduced demand for LNG shipping;
|
|
• |
lower demand for vessels of the types we own and operate, which may reduce available charter rates and revenue to us upon redeployment of our vessels following expiration or termination of existing contracts or upon the initial
chartering of vessels;
|
|
• |
customers potentially seeking to renegotiate or terminate existing vessel contracts, or failing to extend or renew contracts upon expiration;
|
|
• |
the inability or refusal of customers to make charter payments to us due to financial constraints or otherwise; or
|
|
• |
declines in vessel values, which may result in losses to us upon vessel sales or impairment charges against our earnings and could impact our compliance with the covenants in our loan agreements.
|
|
• |
worldwide supply and demand for natural gas;
|
|
• |
the cost of exploration, development, production, transportation and distribution of natural gas;
|
|
• |
expectations regarding future energy prices for both natural gas and other sources of energy;
|
|
• |
the level of worldwide LNG production and exports;
|
|
• |
government laws and regulations, including but not limited to environmental protection laws and regulations;
|
|
• |
local and international political, economic and weather conditions, such as the recent worldwide economic downturn caused by the spread of the novel COVID-19 virus;
|
|
• |
political and military conflicts; and
|
|
• |
the availability and cost of alternative energy sources, including alternate sources of natural gas in gas importing and consuming countries.
|
|
• |
prevailing economic conditions in the natural gas and energy markets;
|
|
• |
a substantial or extended decline in demand for LNG;
|
|
• |
increases in the supply of vessel capacity;
|
|
• |
the size and age of a vessel; and
|
|
• |
the cost of retrofitting or modifying secondhand vessels, if possible, as a result of technological advances in vessel design or equipment, changes in applicable environmental or other regulations or standards, customer requirements or
otherwise.
|
|
• |
marine disasters;
|
|
• |
piracy;
|
|
• |
environmental accidents and hazards;
|
|
• |
weather;
|
|
• |
mechanical failures;
|
|
• |
grounding, fire, explosions and collisions;
|
|
• |
human error; and
|
|
• |
war, political unrest and terrorism.
|
|
• |
death or injury to persons, loss of property or environmental damage;
|
|
• |
delays or failure in the delivery of cargo;
|
|
• |
loss of revenues from or termination of charter contracts;
|
|
• |
governmental fines, penalties or restrictions on conducting business;
|
|
• |
spills, pollution and the liability associated with the same;
|
|
• |
higher insurance rates; and
|
|
• |
damage to our reputation and customer relationships generally.
|
|
• |
our payment of cash distributions to our unitholders;
|
|
• |
actual or anticipated fluctuations in quarterly and annual results;
|
|
• |
fluctuations in the seaborne transportation industry, including fluctuations in the LNG carrier market;
|
|
• |
mergers and strategic alliances in the shipping industry;
|
|
• |
changes in governmental regulations or maritime self-regulatory organization standards;
|
|
• |
shortfalls in our operating results from levels forecasted by securities analysts; announcements concerning us or our competitors;
|
|
• |
the failure of securities analysts to publish research about us, or analysts making changes in their financial estimates;
|
|
• |
general economic conditions;
|
|
• |
terrorist acts;
|
|
• |
business interruptions caused by the recent outbreak of COVID-19;
|
|
• |
future sales of our units or other securities;
|
|
• |
investors' perception of us and the LNG shipping industry;
|
|
• |
the general state of the securities market; and
|
|
• |
other developments affecting us, our industry or our competitors.
|
|
• |
our existing unitholders' proportionate ownership interest in us will decrease;
|
|
• |
the amount of cash available for distribution per unit may decrease;
|
|
• |
the relative voting strength of each previously outstanding unit may be diminished; and
|
|
• |
the market price of our common units may decline.
|
|
• |
arise out of or relate in any way to the Partnership Agreement (including any claims, suits or actions to interpret, apply or enforce the provisions of the Partnership Agreement or the duties, obligations or liabilities among limited
partners or of limited partners to us, or the rights or powers of, or restrictions on, the limited partners or us);
|
|
• |
are brought in a derivative manner on our behalf;
|
|
• |
assert a claim of breach of a fiduciary duty owed by any director, officer or other employee of us or our General Partner, or owed by our General Partner, to us or the limited partners;
|
|
• |
assert a claim arising pursuant to any provision of the Partnership Act; or
|
|
• |
assert a claim governed by the internal affairs doctrine,
|
|
• |
incur or guarantee indebtedness outside of our ordinary course of business;
|
|
• |
sell, lease, transfer or otherwise dispose of our assets;
|
|
• |
redeem, repurchase or otherwise reduce any of our equity or share capital; and
|
|
• |
declare or pay any dividend, charge, fee or distribution to our common unitholders (as described below).
|
|
• |
maintain cash and cash equivalents of not less than 8 per cent of our total liabilities; and
|
|
• |
maintain a consolidated leverage ratio of total liabilities to the aggregate market value of our total assets of no more than 0.7:1.0.
|
|
• |
obtain additional financing, if necessary, for working capital, capital expenditures, acquisitions or other purposes on favorable terms, or at all;
|
|
• |
make distributions to unitholders;
|
|
• |
incur additional indebtedness, create liens or issue guarantees;
|
|
• |
charter our vessels or change the terms of our existing charter agreements;
|
|
• |
sell, transfer or lease our assets or vessels or the shares of our vessel-owning subsidiaries;
|
|
• |
make investments and capital expenditures;
|
|
• |
reduce our partners' capital; and
|
|
• |
undergo a change in ownership or Manager.
|
|
• |
failure to pay any principal, interest, fees, expenses or other amounts when due;
|
|
• |
failure to observe any other agreement, security instrument, obligation or covenant beyond specified cure periods in certain cases;
|
|
• |
default under other indebtedness;
|
|
• |
an event of insolvency or bankruptcy;
|
|
• |
failure of any representation or warranty to be materially correct; and
|
|
• |
a change of control whereby the Partnership or its affiliates no longer hold, indirectly or directly, 100% of the interests in Arctic LNG Carriers.
|
|
• |
neither our Partnership Agreement nor any other agreement requires our Sponsor or our General Partner or their respective affiliates to pursue a business strategy that favors us or utilizes our assets, and their officers and directors
have a fiduciary duty to make decisions in the best interests of their respective unitholders, which may be contrary to our interests;
|
|
• |
our Partnership Agreement provides that our General Partner may make determinations or take or decline to take actions without regard to our or our unitholders' interests. Specifically, our General Partner may exercise its call right,
pre-emptive rights, registration rights or right to make a determination to receive common units in exchange for resetting the target distribution levels related to the incentive distribution rights, consent or withhold consent to any
merger or consolidation of the Partnership, appoint certain directors or vote for the election of any director, vote or refrain from voting on amendments to our Partnership Agreement that require a vote of the outstanding units,
voluntarily withdraw from the Partnership, transfer (to the extent permitted under our Partnership Agreement) or refrain from transferring its units, the General Partner interest or incentive distribution rights or vote upon the
dissolution of the Partnership;
|
|
• |
our General Partner and our directors and officers have limited their liabilities and any fiduciary duties they may have under the laws of the Marshall Islands, while also restricting the remedies available to our unitholders, and, as
a result of purchasing common units, unitholders are treated as having agreed to the modified standard of fiduciary duties and to certain actions that may be taken by the General Partner and our directors and officers, all as set forth in
the Partnership Agreement;
|
|
• |
our General Partner and our Manager are entitled to reimbursement of all reasonable costs incurred by them and their respective affiliates for our benefit; our Partnership Agreement does not restrict us from paying our General Partner
and our Manager or their respective affiliates for any services rendered to us on terms that are fair and reasonable or entering into additional contractual arrangements with any of these entities on our behalf;
|
|
• |
our General Partner may exercise its right to call and purchase our common units if it and its affiliates own more than 80% of our common units; and is not obligated to obtain a fairness opinion regarding the value of the common units
to be repurchased by it upon the exercise of its limited call right; and
|
|
• |
although a majority of our directors are elected by common unitholders, our General Partner will likely have substantial influence on decisions made by our Board of Directors.
|
|
• |
on terms no less favorable to us than those generally being provided to or available from unrelated third-parties; or
|
|
• |
"fair and reasonable" to us, taking into account the totality of the relationships between the parties involved (including other transactions that may be particularly favorable or advantageous to us).
|
A. |
HISTORY AND DEVELOPMENT OF THE PARTNERSHIP
|
B. |
BUSINESS OVERVIEW
|
|
• |
optimal sizing with a carrying capacity of between approximately 150,000 and 155,000 cbm (which is a medium- to large-size class of LNG carrier) that maximizes operational flexibility as such vessel is compatible with most existing LNG
terminals around the world;
|
|
• |
the vessels in our Fleet consist of two series of sister vessels, which are vessels built at the same shipyard, Hyundai Heavy Industries Co. Ltd., that share (i) a near-identical hull and superstructure layout, (ii) similar
displacement, and (iii) roughly comparable features and equipment;
|
|
• |
utilization of a membrane containment system that uses insulation built directly into the hull of the vessel with a membrane covering inside the tanks designed to maintain integrity and that uses the vessel's hull to directly support
the pressure of the LNG cargo, which we refer to as a "membrane containment system" (see "—The International Liquefied Natural Gas (LNG) Shipping Industry—The LNG Fleet" for a description of the types of LNG containment systems); and
|
|
• |
double-hull construction, based on the current LNG shipping industry standard.
|
* |
As used in this Annual Report, "TFDE" refers to tri-fuel diesel electric propulsion system.
|
(1) |
On August 2, 2018, the Arctic Aurora was delivered to Equinor under a time charter contact with an initial term of three years +/- 30 days. This charter is in direct continuation of the
vessel's previous charter with Equinor, which means that this new charter commenced immediately following the prior charter. Equinor will have the option to extend the charter term by two consecutive 12-month periods at escalated rates.
|
(2) |
On August 14, 2018, the Yenisei River was delivered early to Yamal immediately upon completion of its mandatory statutory class five-year special survey and dry-docking, pursuant to an addendum
to the charter party with Yamal under which we agreed to extend the firm charter period from 15 years to 15 years plus 180 days. The charter contract for the Yenisei River with Yamal in the Yamal
LNG Project has an initial term of 15.5 years, which may be extended at Charterers' option by three consecutive periods of five years.
|
(3) |
On July 1, 2019, the Lena River commenced employment under its long term charter with Yamal. The charter contract for the Lena River with Yamal in the
Yamal LNG Project has an initial term of 15 years, which may be extended at Charterers' option by three consecutive periods of five years..
|
Vessel Name
|
Shipyard(2)
|
Delivery
Date |
Cargo Capacity
Cbm |
Ice
Class |
Charter
Commencement |
Charterer
|
Earliest
Charter Expiration |
||||||||||
Optional Vessels*:
|
|||||||||||||||||
Georgiy Brusilov(1)
|
DSME
|
12/10/2018
|
172,410
|
Yes
|
Q4-2018
|
Yamal
|
Q4-2045
|
||||||||||
Boris Davydov(1)
|
DSME
|
01/18/2019
|
172,410
|
Yes
|
Q1-2019
|
Yamal
|
Q4-2045
|
||||||||||
Nikolay Zubov(1)
|
DSME
|
02/22/2019
|
172,410
|
Yes
|
Q1-2019
|
Yamal
|
Q4-2045
|
* |
Our Sponsor directly or indirectly owns a 49.0% interest in these vessels.
|
(1) |
Vessel operates under a fixed rate time charter contract for the Yamal LNG Project until December 31, 2045, plus two consecutive five-year extension options.
|
(2) |
As used in this Annual Report, "DSME" refers to the shipyard Daewoo Shipbuilding & Marine Engineering Co.
|
Exporters
|
2007
|
2008
|
2009
|
2010
|
2011
|
2012
|
2013
|
2014
|
2015
|
2016
|
2017
|
2018
|
2019E
|
% Change 18-19
|
Algeria
|
18.0
|
15.5
|
15.3
|
14.1
|
12.5
|
10.5
|
10.9
|
12.6
|
11.8
|
11.6
|
12.3
|
12.0
|
8.5
|
-29.2%
|
USA #
|
0.9
|
0.7
|
0.6
|
1.2
|
1.5
|
0.5
|
0.1
|
0.3
|
0.6
|
3.2
|
12.2
|
18.5
|
34.5
|
86.5%
|
Liberia
|
0.6
|
0.4
|
0.5
|
0.0
|
0.1
|
-
|
-
|
-
|
-
|
-
|
-
|
0.0
|
-
|
|
Brunei
|
6.8
|
6.7
|
6.4
|
6.4
|
6.9
|
6.6
|
6.9
|
6.0
|
6.4
|
6.0
|
6.9
|
6.8
|
6.5
|
-4.4%
|
UAE
|
5.5
|
5.5
|
5.1
|
5.8
|
5.8
|
5.5
|
5.4
|
5.8
|
5.6
|
5.4
|
5.6
|
5.8
|
5.4
|
-6.9%
|
Indonesia
|
20.3
|
19.6
|
19.0
|
22.9
|
21.3
|
17.5
|
16.4
|
15.8
|
16.0
|
15.5
|
18.7
|
18.0
|
16.5
|
-8.3%
|
Malaysia
|
21.7
|
21.8
|
21.6
|
22.3
|
24.3
|
23.2
|
24.7
|
24.8
|
24.9
|
23.4
|
26.9
|
24.3
|
25.6
|
5.3%
|
Australia
|
14.8
|
14.8
|
17.7
|
18.5
|
18.9
|
20.5
|
22.1
|
23.1
|
29.0
|
41.5
|
55.6
|
67.8
|
80.5
|
18.7%
|
Qatar
|
28.1
|
29.0
|
36.1
|
55.3
|
74.9
|
76.7
|
77.0
|
75.5
|
77.6
|
76.2
|
77.5
|
78.0
|
75.5
|
-3.2%
|
Trinidad and Tobago
|
13.2
|
13.0
|
14.4
|
15.1
|
13.8
|
13.7
|
14.4
|
14.1
|
12.4
|
10.4
|
10.2
|
10.1
|
10.1
|
0.0%
|
Nigeria
|
15.4
|
15.3
|
11.7
|
17.4
|
18.9
|
19.9
|
16.3
|
18.5
|
20.1
|
17.3
|
20.3
|
20.0
|
18.9
|
-5.5%
|
Oman
|
8.9
|
8.0
|
8.4
|
8.4
|
8.0
|
8.2
|
8.4
|
7.8
|
7.4
|
7.8
|
8.2
|
8.0
|
8.8
|
9.9%
|
Egypt
|
9.9
|
9.9
|
9.4
|
7.1
|
6.3
|
4.9
|
2.7
|
0.3
|
-
|
0.5
|
0.8
|
0.8
|
1.6
|
100.0%
|
Equatorial Guinea
|
1.0
|
4.1
|
3.4
|
3.8
|
3.8
|
3.5
|
3.7
|
3.7
|
3.6
|
3.2
|
3.9
|
3.8
|
3.8
|
0.0%
|
Norway
|
0.1
|
1.6
|
2.3
|
3.4
|
2.9
|
3.3
|
2.8
|
3.9
|
4.4
|
4.6
|
3.9
|
3.9
|
3.9
|
0.0%
|
Russia
|
-
|
-
|
4.8
|
9.8
|
10.5
|
10.8
|
10.4
|
10.6
|
10.6
|
10.2
|
11.5
|
16.2
|
21.4
|
32.1%
|
Yemen
|
-
|
-
|
0.3
|
4.0
|
6.5
|
5.2
|
7.0
|
6.5
|
1.4
|
-
|
-
|
0.0
|
-
|
|
Peru
|
-
|
-
|
-
|
1.3
|
3.7
|
3.9
|
4.1
|
4.2
|
3.6
|
4.0
|
3.7
|
3.8
|
3.6
|
-4.7%
|
France
|
1.1
|
1.1
|
1.0
|
1.0
|
0.0%
|
|||||||||
Belgium #
|
-
|
-
|
0.2
|
0.4
|
0.4
|
0.3
|
1.1
|
1.1
|
0.9
|
-
|
0.0
|
0.0
|
0.0
|
-
|
Spain #
|
-
|
-
|
-
|
-
|
0.5
|
1.2
|
2.1
|
3.8
|
2.3
|
0.1
|
0.0
|
0.0
|
0.0
|
-
|
Papua New Guinea
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
3.4
|
7.1
|
7.6
|
8.1
|
8.0
|
8.2
|
1.9%
|
Others##
|
-
|
-
|
-
|
-
|
-
|
0.7
|
0.9
|
1.5
|
1.4
|
3.2
|
3.2
|
6.2
|
14.7
|
137.1%
|
Total
|
165.3
|
165.6
|
177.2
|
217.3
|
241.5
|
236.9
|
237.5
|
243.3
|
247.4
|
253.0
|
290.7
|
313.0
|
349.0
|
11.5%
|
Importer
|
2007
|
2008
|
2009
|
2010
|
2011
|
2012
|
2013
|
2014
|
2015
|
2016
|
2017
|
2018
|
2019
|
Argentina
|
-
|
0.3
|
0.7
|
1.3
|
3.2
|
3.4
|
4.7
|
4.8
|
4.3
|
3.8
|
3.4
|
3.0
|
1.8
|
Belgium
|
2.3
|
2.1
|
4.8
|
4.7
|
4.8
|
3.1
|
1.6
|
2.1
|
2.8
|
2.1
|
0.9
|
1.6
|
4.0
|
Brazil
|
-
|
-
|
0.3
|
2.0
|
0.8
|
2.5
|
4.1
|
5.8
|
5.2
|
2.2
|
1.6
|
2.0
|
3.0
|
Canada
|
-
|
-
|
0.7
|
1.5
|
2.4
|
1.3
|
0.8
|
0.6
|
0.5
|
0.2
|
0.3
|
0.4
|
0.2
|
Chile
|
-
|
-
|
0.5
|
2.2
|
2.8
|
3.0
|
3.0
|
2.8
|
3.1
|
3.1
|
3.3
|
3.6
|
2.4
|
China
|
2.8
|
3.2
|
5.6
|
9.3
|
12.1
|
14.6
|
18.3
|
19.8
|
19.1
|
26.2
|
38.2
|
53.9
|
61.9
|
Dom. Rep.
|
0.3
|
0.3
|
0.4
|
0.6
|
0.7
|
0.9
|
1.2
|
0.9
|
1.3
|
1.3
|
0.9
|
1.2
|
1.4
|
Egypt
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
2.8
|
0.6
|
6.2
|
2.5
|
0.0
|
France
|
9.5
|
9.2
|
9.5
|
10.2
|
10.6
|
7.5
|
6.4
|
5.4
|
4.8
|
7.0
|
7.4
|
7.8
|
16.0
|
Greece
|
0.6
|
0.7
|
0.5
|
0.9
|
0.9
|
0.7
|
0.5
|
0.4
|
0.3
|
0.0
|
1.3
|
1.5
|
1.5
|
India
|
7.3
|
7.9
|
9.2
|
8.9
|
12.5
|
15.0
|
12.8
|
13.8
|
15.9
|
16.5
|
18.7
|
22.3
|
23.4
|
Indonesia
|
-
|
-
|
-
|
-
|
-
|
0.7
|
1.0
|
1.6
|
2.0
|
2.0
|
2.6
|
2.0
|
0.0
|
Israel
|
-
|
-
|
-
|
-
|
-
|
-
|
0.4
|
0.3
|
0.4
|
0.0
|
0.5
|
0.0
|
0.0
|
Italy
|
1.8
|
1.1
|
2.1
|
6.6
|
6.4
|
5.2
|
3.7
|
3.5
|
4.3
|
4.1
|
6.0
|
5.6
|
9.5
|
Japan
|
64.8
|
67.3
|
62.7
|
68.2
|
78.1
|
86.7
|
87.0
|
88.0
|
86.2
|
83.3
|
83.6
|
82.9
|
77.1
|
Jordan
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
2.9
|
3.3
|
3.3
|
3.0
|
1.6
|
Kuwait
|
-
|
-
|
0.7
|
2.0
|
2.3
|
2.0
|
1.6
|
2.7
|
2.7
|
2.7
|
3.5
|
3.0
|
3.0
|
Lithuania
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
0.1
|
0.4
|
0.0
|
0.9
|
0.0
|
0.0
|
Malaysia
|
-
|
-
|
-
|
-
|
-
|
0.1
|
1.5
|
1.7
|
1.6
|
1.2
|
1.8
|
1.1
|
2.5
|
Mexico
|
1.6
|
2.6
|
2.6
|
4.2
|
3.0
|
3.5
|
5.7
|
6.8
|
5.2
|
4.3
|
4.8
|
4.2
|
7.0
|
Netherlands
|
-
|
-
|
-
|
-
|
0.6
|
0.6
|
0.6
|
0.4
|
0.4
|
1.1
|
0.8
|
1.0
|
1.3
|
Pakistan
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
1.1
|
2.9
|
4.6
|
6.0
|
6.6
|
Portugal
|
1.7
|
1.9
|
2.1
|
2.2
|
2.2
|
1.5
|
1.8
|
1.2
|
0.7
|
0.7
|
2.7
|
1.2
|
1.5
|
Puerto Rico
|
0.5
|
0.6
|
0.6
|
0.6
|
0.5
|
1.0
|
1.3
|
1.3
|
1.2
|
0.9
|
0.9
|
1.0
|
1.2
|
South Korea
|
25.1
|
26.7
|
25.1
|
32.4
|
36.0
|
35.9
|
39.6
|
37.3
|
31.9
|
32.1
|
37.8
|
44.0
|
40.7
|
Spain
|
17.7
|
21.0
|
19.7
|
20.1
|
17.6
|
14.7
|
10.9
|
11.5
|
9.5
|
9.6
|
12.1
|
10.0
|
16.1
|
Singapore
|
-
|
-
|
-
|
-
|
-
|
-
|
0.9
|
1.9
|
2.2
|
2.2
|
3.0
|
3.2
|
3.7
|
Taiwan
|
8.0
|
8.8
|
8.6
|
10.9
|
11.9
|
11.7
|
12.6
|
13.2
|
13.7
|
14.2
|
16.6
|
16.7
|
18.2
|
Thailand
|
-
|
-
|
-
|
-
|
0.7
|
1.0
|
1.5
|
1.4
|
2.6
|
3.1
|
3.8
|
4.4
|
5.1
|
Turkey
|
4.4
|
3.9
|
4.2
|
5.8
|
4.5
|
5.7
|
4.0
|
5.3
|
5.5
|
5.6
|
7.3
|
7.1
|
7.5
|
UAE
|
-
|
-
|
-
|
0.1
|
1.0
|
1.0
|
1.1
|
1.3
|
1.6
|
1.5
|
2.5
|
2.8
|
3.2
|
UK
|
1.1
|
0.8
|
7.5
|
13.6
|
18.5
|
10.0
|
6.8
|
6.1
|
9.4
|
7.7
|
4.9
|
6.6
|
13.0
|
USA
|
15.9
|
7.3
|
9.3
|
8.9
|
7.3
|
3.7
|
2.0
|
1.2
|
1.9
|
1.8
|
1.5
|
1.8
|
1.8
|
Africa
|
7.4
|
||||||||||||
Other*
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
3.4
|
2.8
|
5.6
|
12.8
|
World Total
|
165.3
|
165.6
|
177.2
|
217.3
|
241.5
|
236.9
|
237.4
|
243.3
|
247.3
|
258.3
|
290.3
|
313.0
|
349.0
|
|
• |
Bay and Gulf of Bothnia, Gulf of Finland - Finnish-Swedish Ice Class Rules (FSICR)
|
|
• |
Gulf of Finland (Russian territorial waters) - Russian Maritime Register (RMR) Ice Class Rules
|
|
• |
Barents, Kara, Laptev, East Siberian and Chukchi Seas - Russian Maritime Register (RMR) Ice Class Rules
|
|
• |
Beaufort Sea, Baffin Bay, etc. - Canadian Arctic Shipping Pollution Prevention Rules (CASPPR)
|
|
• |
RMR Ice Class Rules
|
Class
|
Standard
|
1A Super (1AS)
|
Design notional level ice thickness of 1.0m. For extreme harsh ice conditions.
|
1A
|
Design notional level ice thickness of 0.8m. For harsh ice conditions.
|
1B
|
Design notional level ice thickness of 0.6m. For medium ice conditions.
|
1C
|
Design notional level ice thickness of 0.4m. For mild ice conditions.
|
|
• |
Ice class merchant vessels (compliant with the FSICR for navigation in the northern Baltic);
|
|
• |
Fairway navigation channels; and
|
|
• |
Ice breaker assistance.
|
|
• |
reduced level of sea ice has extended the summer shipping season in the Arctic and is making some areas easy to navigate;
|
|
• |
increase in mineral resource development activities in the Arctic;
|
|
• |
commodity demand growth in Asian economies;
|
|
• |
technological developments which have made NSR a more feasible shipping route than in the past; and
|
|
• |
chronic political problems in the Middle East, piracy in North Africa, and non-transparent commercial disputes over the Suez in Egypt.
|
2010
|
2011
|
2012
|
2013
|
2014
|
2015
|
2016
|
2017
|
2018
|
2019
|
|
Number of Vessels
|
4
|
34
|
46
|
71
|
23
|
18
|
19
|
NA
|
NA
|
29
|
Total Cargo Volume (thousand tons)
|
111,000
|
820,789
|
1,261,545
|
1,355,897
|
274,000
|
39,586
|
214,513
|
NA
|
NA
|
697,277
|
|
• |
The Moss Rosenberg spherical system, which was designed in the 1970s and is used by a large portion of the existing LNG fleet. In this system, multiple self-supporting, spherical tanks are built independent of the carrier and arranged
inside its hull.
|
|
• |
The Gaz Transport membrane system, which is built inside the carrier and consists of insulation between the thin primary and secondary barriers. The membrane is designed to accommodate thermal expansion and contraction without
overstressing the membrane.
|
Size
|
No.
|
000 Cbm
|
0-17,999 cbm
|
27
|
172
|
18-49,999 cbm
|
19
|
492
|
50-74,999 cbm
|
4
|
278
|
75-124,999 cbm
|
3
|
255
|
125-149,999 cbm
|
202
|
28,239
|
150-199,999 cbm
|
268
|
44,734
|
200-219,999 cbm
|
31
|
6,608
|
220,000+ cbm
|
14
|
3,727
|
Total
|
568
|
84,506
|
Size Range in CBM
|
Average Age (Years)
|
|
0-18,000
|
9.9
|
|
18-50,000
|
8.7
|
|
50-75,000
|
17.7
|
|
75-125,000
|
21.6
|
|
125-150,000
|
18.6
|
|
150-200,000
|
4.7
|
|
200-220,000
|
11.5
|
|
220,000+
|
10.8
|
|
Average Age -Total Fleet
|
10.7
|
|
• |
LNG projects are expensive and typically involve an integrated chain of dedicated facilities. Accordingly, the overall success of an LNG project depends heavily on long-term planning and coordination of project activities, including
marine transportation; and
|
|
• |
LNG carriers are expensive to build, and vessel financing is supported by the corresponding cash-flow from long-term fixed-rate charters.
|
|
i. |
injury to, destruction or loss of, or loss of use of natural resources and related assessment costs;
|
|
ii. |
injury to, or economic losses resulting from, the destruction of real and personal property;
|
|
iii. |
loss of subsistence use of natural resources that are injured, destroyed or lost;
|
|
iv. |
net loss of taxes, royalties, rents, fees or net profit revenues resulting from injury, destruction or loss of real or personal property, or natural resources;
|
|
v. |
lost profits or impairment of earning capacity due to injury, destruction or loss of real or personal property or natural resources; and
|
|
vi. |
net cost of increased or additional public services necessitated by removal activities following a discharge of oil, such as protection from fire, safety or health hazards, and loss of subsistence use of natural resources.
|
|
• |
on-board installation of automatic identification systems to provide a means for the automatic transmission of safety-related information from among similarly equipped ships and shore stations, including information on a ship's
identity, position, course, speed and navigational status;
|
|
• |
on-board installation of ship security alert systems, which do not sound on the vessel but only alert the authorities on shore;
|
|
• |
the development of vessel security plans;
|
|
• |
ship identification number to be permanently marked on a vessel's hull;
|
|
• |
a continuous synopsis record kept onboard showing a vessel's history including, the name of the ship, the state whose flag the ship is entitled to fly, the date on which the ship was registered with that state, the ship's
identification number, the port at which the ship is registered and the name of the registered owner(s) and their registered address; and
|
|
• |
compliance with flag state security certification requirements.
|
C. |
ORGANIZATIONAL STRUCTURE
|
D. |
PROPERTY, PLANT AND EQUIPMENT
|
A. |
RESULTS OF OPERATIONS
|
|
• |
Ownership days. The number of vessels in our Fleet is a key factor in determining the level of our revenues. Aggregate expenses also increase as the size of our Fleet increases;
|
|
• |
Charter rates. Our revenue is dependent on the charter rates we are able to obtain on our vessels. Charter rates on our vessels are based primarily on demand for and supply of LNG carrier capacity at the time we enter into the charters
for our vessels, which is influenced by LNG market trends, such as the demand and supply for natural gas and in particular LNG as well as the supply of LNG carriers available for profitable employment. The charter rates we obtain are also
dependent on whether we employ our vessels under multi-year charters or charters with initial terms of less than two years. As of the date of this Annual Report, all the vessels in our Fleet are employed under multi-year time charters
with staggered maturities, which will make us less susceptible to cyclical fluctuations in charter rates than vessels operated on charters of less than two years. However, we will be exposed to fluctuations in prevailing charter rates
when we seek to re-charter our vessels upon the expiry of their respective current charters and when we seek to charter vessels that we may acquire in the future;
|
|
• |
Utilization of our Fleet. Historically, our Fleet has had a limited number of unscheduled off-hire days. However, an increase in annual off-hire days would reduce our utilization. The efficiency with which suitable employment is
secured, the ability to minimize off-hire days and the amount of time spent positioning vessels also affects our results of operations. If the utilization of our Fleet is reduced, our financial results would be affected;
|
|
• |
Operating expenses. The level of our vessel operating expenses, including crewing costs, insurance and maintenance costs. Our ability to control our vessel operating expenses also affects our financial results. These expenses include
crew wages and related costs, the cost of insurance, expenses for repairs and maintenance, the cost of spares and consumable stores, lubricating oil costs, tonnage taxes and other miscellaneous expenses. In addition, factors beyond our
control, such as developments relating to market premiums for insurance and the value of the U.S. dollar compared to currencies in which certain of our expenses, primarily crew wages, are paid, can cause our vessel operating expenses to
increase;
|
|
• |
Our ability to exercise the options to purchase the Optional Vessels;
|
|
• |
The timely delivery of the vessels we may acquire in the future;
|
|
• |
Our ability to maintain solid working relationships with our existing charterers and our ability to increase the number of our charterers through the development of new working relationships;
|
|
• |
The performance of our charterer's obligations under their charter agreements;
|
|
• |
The effective and efficient technical management of the vessels under our Management Agreements;
|
|
• |
Our ability to obtain acceptable debt financing to fund our capital commitments;
|
|
• |
The supply and demand relationship for LNG shipping services;
|
|
• |
Our ability to obtain and maintain regulatory approvals and to satisfy technical, health, safety and compliance standards that meet our charterer's requirements;
|
|
• |
Economic, regulatory, political and governmental conditions that affect shipping and the LNG industry, which includes changes in the number of new LNG importing countries and regions, as well as structural LNG market changes impacting
LNG supply that may allow greater flexibility and competition of other energy sources with global LNG use;
|
|
• |
Our ability to successfully employ our vessels at economically attractive rates, as our charters expire or are otherwise terminated;
|
|
• |
Our access to capital required to acquire additional ships and/or to implement our business strategy;
|
|
• |
Our level of debt, the related interest expense, our debt amortizations levels and the timing of required principal installments;
|
|
• |
The level of our general and administrative expenses, including salaries and costs of consultants;
|
|
• |
Our charterer's right for early termination of the charters under certain circumstances;
|
|
• |
Performance of our counterparties, which are limited in number, including our charterer's ability to make charter payments to us; and
|
|
• |
The level of any distribution on all classes of our units.
|
Carrying Value
(in millions of US dollars)
|
||||||||||||||||
Vessel
|
Capacity
(cbm) |
Year Built/
Purchased |
December 31,
2019 |
December 31,
2018 |
||||||||||||
Clean Energy
|
149,700
|
2007
|
$
|
120.5
|
$
|
125.1
|
||||||||||
Ob River
|
149,700
|
2007
|
120.8
|
125.3
|
||||||||||||
Amur River
|
149,700
|
2008
|
130.1
|
134.8
|
||||||||||||
Arctic Aurora
|
155,000
|
2014
|
180.0
|
185.6
|
||||||||||||
Yenisei River
|
155,000
|
2014
|
168.8
|
174.0
|
||||||||||||
Lena River
|
155,000
|
2015
|
196.5
|
202.6
|
||||||||||||
TOTAL
|
914,100
|
$
|
916.7
|
$
|
947.4
|
|
• |
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; and
|
|
• |
vessel sale prices and values of which we are aware through both formal and informal communications with ship-owners, shipbrokers, industry analysts and various other shipping industry participants and observers.
|
|
i) |
the Ob River which completed employment under its multi-year charter contract with Gazprom Global LNG Limited ("Gazprom") in April 2018 and subsequently began employment under a ten-year
charter party with an entity that is part of the wider Gazprom group of companies at a lower charter rate;
|
|
ii) |
the Arctic Aurora, which, on August 2, 2018, rolled-over into a new charter with Equinor ASA ("Equinor") (which was in direct continuation of its previous charter contract with Equinor) at a
lower charter rate.
|
|
iii) |
The Lena River following its positioning period by approximately one month for the purpose of the vessel's delivery to its multi-year charter contract with Yamal.
|
|
iv) |
the Clean Energy, which was delivered in accordance with its eight-year charter party with Gazprom on July 13, 2018, whereas, prior to this date the vessel was traded in the spot market at a
lower charter rate; and
|
|
v) |
the Yenisei River, further to its delivery to its multi-year contract with Yamal in August 2018.
|
(i) |
the lower revenues earned on the Arctic Aurora, which, on August 2, 2018, rolled-over into a new charter with Equinor (which was in direct continuation of its previous charter contract with
Equinor) at a lower charter rate;
|
(ii) |
the lower revenues earned on the Lena River, which concluded employment under its five-year legacy charter with Gazprom in October 2018 and after completion of its scheduled special survey and
dry-docking, was subsequently delivered into a multi-month charter with a major energy company at a lower charter rate.
|
(iii) |
the lower revenues earned on the Ob River, which concluded employment under its legacy multi-year charter contract with Gazprom in April 2018 and subsequently began employment under a ten-year
charter party with an entity, which is part of the wider Gazprom group of companies, at a lower charter rate.
|
B. |
LIQUIDITY AND CAPITAL RESOURCES
|
|
• |
the Mortgages over each of the Ships;
|
|
• |
the Deeds of Covenant in relation to each of the Ships in respect of which the Mortgage is in account current form;
|
|
• |
the General Assignments in relation to each of the Ships in respect of which the Mortgage is in preferred form;
|
|
• |
the Charter Assignment in relation to each Ship's Charter Documents;
|
|
• |
the Account Security in relation to each Account;
|
|
• |
the Management Agreement Assignment in relation to each Management Agreement for each Ship;
|
|
• |
a Manager's Undertaking by each Manager of each Ship; and
|
|
• |
a Quiet Enjoyment Agreement for each of Ship E and Ship F duly executed by the relevant Owner, the Security Agent and the relevant Charterer.
|
Year Ended December 31,
|
||||||||||||
(Amounts in thousands of Dollars)
|
2019
|
2018
|
2017
|
|||||||||
Net cash provided by operating activities
|
$
|
43,177
|
$
|
42,994
|
$
|
59,339
|
||||||
Net cash used in investing activities
|
—
|
(409
|
)
|
—
|
||||||||
Net cash used in financing activities
|
(86,888
|
)
|
(132
|
)
|
(74,470
|
)
|
||||||
Cash and cash equivalents and restricted cash at beginning of year
|
109,917
|
67,464
|
82,595
|
|||||||||
Cash and cash equivalents and restricted cash at end of year
|
$
|
66,206
|
$
|
109,917
|
$
|
67,464
|
|
(i) |
the decrease in voyage revenues as discussed in "Item 5. Operating and Financial Review and Prospects"; and
|
|
(ii) |
increase in interest and finance costs, as also discussed in "Item 5. Operating and Financial Review and Prospects."
|
C. |
RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES
|
D. |
TREND INFORMATION
|
E. |
OFF-BALANCE SHEET ARRANGEMENTS
|
F. |
CONTRACTUAL OBLIGATIONS
|
Payments due by period
|
||||||||||||||||||||
Obligations
|
Total
|
Less than
1 year |
1-3 years
|
3-5 years
|
More than
5 years |
|||||||||||||||
Long-term debt
|
$
|
663,000
|
48,000
|
96,000
|
519,000
|
-
|
||||||||||||||
Interest on long term debt (1)
|
131,738
|
31,800
|
57,471
|
42,467
|
-
|
|||||||||||||||
Management fees & commissions payable to the Manager (2)(3)
|
20,536
|
8,324
|
2,733
|
2,597
|
6,882
|
|||||||||||||||
Executive services fee (4)
|
2,344
|
604
|
1,208
|
532
|
-
|
|||||||||||||||
Administrative services fee (5)
|
40
|
40
|
-
|
-
|
-
|
|||||||||||||||
Total
|
$
|
817,658
|
88,768
|
157,412
|
564,596
|
6,882
|
(1) |
Our variable rate long-term debt outstanding as of December 31, 2019 bears variable interest at a margin over LIBOR. The calculation of interest payments has been made assuming interest rates based on the three-month period LIBOR,
specific to our $675 Million Credit Facility as of December 31, 2019 and our applicable margin rate.
|
(2) |
Under the terms of the Management Agreements, we currently pay a management fee of $3,075 per day which is subject to an annual increase of 3% and further annual increases to reflect material unforeseen costs increases of providing the
management services, by an amount to be agreed between us and our Manager, which amount will be reviewed and approved by our Conflicts Committee. The Management Agreements also provide for commissions of 1.25% of charter-hire revenues
arranged by the Manager. The agreements will terminate automatically after a change of control of the applicable shipping subsidiary and/or of the owner's ultimate parent, in which case an amount equal to fees of at the least 36 months
and not more than 60 months, will become payable to the Manager.
|
(3) |
Not including $2.1 million of the "Management fees & commissions payable to the Manager" related to the commissions on variable hire contained in certain time charter contracts with Yamal, which represents the operating expenses of
the vessel and is subject to annual adjustments on the basis of the actual operating costs incurred within each year. The actual amount of "Management fees & commissions payable to the Manager" payable to the Manager in respect of
such variable hire rate may therefore differ from the amounts included in the contractual obligations, due to the annual variations in each vessel's respective operating cost.
|
(4) |
On March 21, 2014, we entered into the Executive Services Agreement with our Manager, with retroactive effect to the date of the closing of our IPO, pursuant to which our Manager provides us with the services of our executive officers,
who report directly to our Board of Directors. Under the Executive Services Agreement, our Manager is entitled to an executive services fee of €538,000 per annum, for the initial five year term, payable in equal monthly installments. The
Executive Services Agreement had an initial term of five years and, on November 18, 2018, has been automatically renewed for successive five year terms, unless terminated earlier. The calculation of the contractual services fee set forth
in the table above assumes an exchange rate of €1.000 to $1.1.227 the EURO/USD exchange rate as of December 31, 2019 and does not include any incentive compensation which our Board of Directors may agree to pay.
|
(5) |
On December 30, 2014 and effective as of the IPO closing date, we entered into the Administrative Services Agreement with our Manager, pursuant to which the Partnership is provided with certain financial, accounting, reporting,
secretarial and information technology services, for a monthly fee of $10,000, plus expenses, payable in quarterly installments. The Agreement can be terminated upon 120 days' notice granted either by the Partnership's Board or by the
Manager as per the provisions of the agreement.
|
G. |
SAFE HARBOR
|
A. |
DIRECTORS AND SENIOR MANAGEMENT
|
Name
|
Age
|
Position
|
Georgios Prokopiou
|
73
|
Chairman of the Board of Directors and Appointed Director
|
Tony Lauritzen
|
43
|
Chief Executive Officer and Appointed Director
|
Michael Gregos
|
48
|
Chief Financial Officer
|
Levon Dedegian
|
68
|
Class III Director
|
Alexios Rodopoulos
|
72
|
Class II Director
|
Evangelos Vlahoulis
|
73
|
Class I Director
|
B. |
COMPENSATION
|
C. |
BOARD PRACTICES
|
D. |
EMPLOYEES
|
E. |
UNIT OWNERSHIP
|
A. |
MAJOR UNITHOLDERS
|
Name of Beneficial Owner
|
Number
|
Percent(1)
|
||||||
Dynagas Holding Ltd.(2)
|
15,595,000
|
43.9
|
%
|
|||||
Cobas Asset Management SGIIC SA(3)
|
3,690,128
|
10.4%
|
||||||
All executives, officers and directors as a group(3)(4)
|
*
|
*
|
(1) |
Based on 35,490,000 common units outstanding as of the date of this Annual Report.
|
(2) |
Dynagas Holding Ltd. is beneficially owned by the Prokopiou Family, including the chairman of our Board of Directors, Georgios Prokopiou and his daughters Elisavet Prokopiou, Johanna Procopiou, Marina Kalliope Prokopiou, and Maria
Eleni Prokopiou, which collectively have a business address at 23, Rue Basse, 98000 Monaco.
|
(3) |
This information is derived from Schedule 13G/A filed with SEC on February 20, 2020.
|
(4) |
Neither any member of our Board of Directors or executive officer individually, nor all of them taken as a group, hold more than 1% of our outstanding common units apart from Mr. Georgios Prokopiou, whose ownership interests are
separately presented in the above table.
|
B. |
RELATED PARTY TRANSACTIONS
|
(1) |
acquiring, owning, operating or chartering any Non-Four-Year LNG carriers;
|
(2) |
(i) acquiring or owning one or more Four-Year LNG carrier(s) (other than with respect to the Optional Vessels, which is covered in (ii) below) if such Dynagas Holding Entity (as defined in the Omnibus Agreement) offers to sell such
Four-Year LNG carrier to us for the acquisition price plus any administrative costs in accordance with the procedures set forth in the Omnibus Agreement (and we do not fulfill our obligation to purchase such Four-Year LNG carrier in
accordance with the terms of the Omnibus Agreement) and (ii) owning any Optional Interests (as defined in the Omnibus Agreement) in the entities relating to the Optional Vessels at any time on or after the time at which such interests are
treated as a Four-Year LNG carrier pursuant to the Omnibus Agreement, if the related Dynagas Holding Entities (as applicable), offer to sell such Optional Interests to us for the pro rata portion of the acquisition price relating to the
corresponding LNG carrier owned by such entity plus any administrative costs in accordance with the procedures set forth in the Omnibus Agreement (and we do not fulfill our obligation to purchase such Optional Interests in accordance with
the terms of the Omnibus Agreement);
|
(3) |
operating or chartering an LNG carrier under a charter with a term of four or more years if such Dynagas Holding Entity (other than with respect to Optional Vessels) offers to sell such LNG carrier to us for fair market value (i)
promptly after the time it becomes a Four-Year LNG carrier and (ii) at each renewal or extension of that charter if such renewal or extension is for a term of four or more years, in each case in accordance with the procedures set forth in
the Omnibus Agreement;
|
(4) |
acquiring and owning a controlling interest in one or more Four-Year LNG carriers as part of the acquisition of an interest in business or package of assets that owns, operates or charters such Four-Year LNG carriers; provided,
however; if a majority of the value of the business or assets acquired is attributable to Four-Year LNG carriers, as determined in good faith by our Sponsor's board of directors, the Dynagas Holding Entity must offer to sell such
Four-Year LNG carrier(s) to us for their fair market value plus any administrative costs in accordance with the procedures set forth in the Omnibus Agreement (for the avoidance of doubt, nothing herein shall prohibit the acquisition and
owning of one or more Four-Year LNG carriers as part of the acquisition of a minority interest in a business or package of assets that owns, operates or charters Four-Year LNG carriers);
|
(5) |
acquiring a non-controlling interest in any company, business or pool of assets;
|
(6) |
acquiring, owning, operating or chartering any Four-Year LNG carrier if we do not fulfill our obligation to purchase such Four-Year LNG carrier in accordance with the terms of the Omnibus Agreement;
|
(7) |
acquiring, owning, operating or chartering any Four-Year LNG carrier that is subject to the offers to us described in paragraphs (2), (3) and (4) above pending our determination whether to accept such offers and pending the closing of
any offers we accept;
|
(8) |
providing vessel management services relating to any LNG carrier;
|
(9) |
acquiring and owning any Four-Year LNG carrier as part of a financing arrangement, including by way of a sale leaseback transaction, which is accounted for as a financial lease under United States generally accepted accounting
principles; or
|
(10) |
acquiring, owning, operating or chartering any Four-Year LNG carrier if we have previously advised our Sponsor that we consent to such acquisition, operation or charter.
|
|
• |
certain defects in title to the Optional Vessels contributed or sold to us and any failure to obtain, prior to the time they were contributed or sold to us, certain consents and permits necessary to conduct, own and operate such
assets, in the case of the Optional Vessels which we have rights to purchase, within three years after the acquisition date Optional Vessel was contributed or sold to us r); and
|
|
• |
tax liabilities attributable to the operation of the assets contributed or sold to us prior to the time they were contributed or sold.
|
|
• |
approved by our Conflicts Committee, although neither our General Partner nor our Board of Directors are obligated to seek such approval;
|
|
• |
approved by the vote of a majority of the outstanding common units, excluding any common units owned by our General Partner or any of its affiliates, although neither our General Partner nor our Board of Directors is obligated to seek
such approval;
|
|
• |
on terms no less favorable to us than those generally being provided to or available from unrelated third-parties, but neither our General Partner nor our Board of Directors is required to obtain confirmation to such effect from an
independent third-party; or
|
|
• |
fair and reasonable to us, taking into account the totality of the relationships between the parties involved, including other transactions that may be particularly favorable or advantageous to us.
|
|
• |
the fiduciary duties imposed on our General Partner and our directors by the Partnership Act;
|
|
• |
material modifications of these duties contained in our Partnership Agreement; and
|
|
• |
certain rights and remedies of unitholders contained in the Partnership Act.
|
Marshall Islands law fiduciary duty standards
|
Fiduciary duties are generally considered to include an obligation to act in good faith and with due care and loyalty. The duty of care, in the absence of a provision in a Partnership Agreement providing
otherwise, would generally require a General Partner and the directors of a Marshall Islands limited partnership to act for the partnership in the same manner as a prudent person would act on his own behalf. The duty of loyalty, in the
absence of a provision in a Partnership Agreement providing otherwise, would generally prohibit a General Partner or the directors of a Marshall Islands limited partnership from taking any action or engaging in any transaction where a
conflict of interest is present.
|
Partnership Agreement modified standards
|
Our Partnership Agreement contains provisions that waive or consent to conduct by our General Partner and its affiliates and our directors that might otherwise raise issues as to compliance with fiduciary
duties under the laws of the Marshall Islands. For example, our Partnership Agreement provides that when our General Partner is acting in its capacity as our General Partner, as opposed to in its individual capacity, it must act in "good
faith" and will not be subject to any other standard under the laws of the Marshall Islands. In addition, when our General Partner is acting in its individual capacity, as opposed to in its capacity as our General Partner, it may act without
any fiduciary obligation to us or the unitholders whatsoever, unless another express standard is provided for in the Partnership Agreement. These standards reduce the obligations to which our General Partner and our Board of Directors would
otherwise be held. Our Partnership Agreement generally provides that affiliated transactions and resolutions of conflicts of interest not involving a vote of unitholders and that are not approved by our Conflicts Committee must be on terms no
less favorable to us than those generally being provided to or available from unrelated third-parties.
In addition to the other more specific provisions limiting the obligations of our General Partner and our directors, our Partnership Agreement further provides that our General Partner and our officers and
directors, will not be liable for monetary damages to us or our limited partners for errors of judgment or for any acts or omissions unless there has been a final and non-appealable judgment by a court of competent jurisdiction determining
that our General Partner or our officers or directors engaged in actual fraud or willful misconduct.
|
Rights and remedies of unitholders
|
The provisions of the Partnership Act resemble the provisions of the limited partnership act of Delaware. For example, like Delaware, the Partnership Act favors the principles of freedom of contract and
enforceability of Partnership Agreements and allows the Partnership Agreement to contain terms governing the rights of the unitholders. The rights of our unitholders, including voting and approval rights and our ability to issue additional
units, are governed by the terms of our Partnership Agreement.
As to remedies of unitholders, the Partnership Act permits a limited partner to institute legal action on behalf of the partnership to recover damages from a third-party where a General Partner or a Board of
Directors has refused to institute the action or where an effort to cause a General Partner or a Board of Directors to do so is not likely to succeed. These actions include actions against a General Partner for breach of its fiduciary duties
or of the Partnership Agreement.
|
C. |
INTERESTS OF EXPERTS AND COUNSEL
|
A. |
CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION
|
|
• |
Under the terms of the $675 Million Credit Facility, the Partnership is restricted from paying distributions to its common unitholders while borrowings are outstanding under the $675 Million Credit Facility.
|
|
• |
Our unitholders have no contractual or other legal right to receive distributions other than the obligation under our Partnership Agreement to distribute available cash on a quarterly basis, which is subject to the broad discretion of
our Board of Directors to establish reserves and other limitations.
|
|
• |
We are and will be subject to restrictions on distributions under our existing financing arrangements as well as under any new financing arrangements or other transactions that we may enter into in the future. Our new and existing
financing arrangements may contain financial and other covenants that must be satisfied prior to paying distributions in order to declare and pay such distributions or that may restrict or prohibit the payment of distributions. If we are
unable to satisfy the requirements contained in any of our financing arrangements or are otherwise in default under any of those agreements, there could be a material adverse effect on our financial condition and our ability to make cash
distributions to our unitholders notwithstanding our cash distribution policy.
|
|
• |
We are required to make substantial capital expenditures to maintain and replace our Fleet. These expenditures may fluctuate significantly over time, particularly as our vessels near the end of their respective useful lives. In order
to minimize these fluctuations, our Partnership Agreement requires us to deduct estimated, as opposed to actual, maintenance and replacement capital expenditures from the amount of cash that we would otherwise have available for
distribution to our unitholders. In years when estimated maintenance and replacement capital expenditures are higher than actual maintenance and replacement capital expenditures, the amount of cash available for distribution to
unitholders will be lower than if actual maintenance and replacement capital expenditures were deducted.
|
|
• |
Although our Partnership Agreement requires us to distribute all of our available cash, our Partnership Agreement, including provisions contained therein requiring us to make cash distributions may be amended, with the approval of a
majority of the outstanding common units.
|
|
• |
Even if our cash distribution policy is not modified or revoked, the amount of distributions we pay under our cash distribution policy and the decision to make any distribution is determined by our Board of Directors, taking into
consideration the terms of our Partnership Agreement.
|
|
• |
Under Section 57 of the Marshall Islands Act, we may not make a distribution to our unitholders if the distribution would cause our liabilities to exceed the fair value of our assets.
|
|
• |
We may lack sufficient cash to pay distributions to our unitholders due to decreases in total operating revenues, decreases in hire rates, the loss of a vessel or increases in operating or general and administrative expenses, principal
and interest payments on outstanding debt, taxes, working capital requirements, maintenance and replacement capital expenditures or anticipated cash needs. See "Item 3. Key Information—D. Risk Factors" for a discussion of these factors.
|
|
• |
Our ability to make distributions to our unitholders depends on the performance of our subsidiaries and their ability to distribute cash to us. The ability of our subsidiaries to make distributions to us may be restricted by, among
other things, the provisions of existing and future indebtedness, applicable limited partnership and limited liability company laws in the Marshall Islands and other laws and regulations.
|
Marginal Percentage Interest in Distributions
|
||||||||||||||
Total Quarterly
Distribution Target
Amount
|
Unitholders
|
General
Partner
|
Holders
of IDRs
|
|||||||||||
Minimum Quarterly Distribution
|
$0.365
|
99.9
|
%
|
0.1
|
%
|
0.0
|
%
|
|||||||
First Target Distribution
|
up to $0.420
|
99.9
|
%
|
0.1
|
%
|
0.0
|
%
|
|||||||
Second Target Distribution
|
above $0.420 up to $0.456
|
85.0
|
%
|
0.1
|
%
|
14.9
|
%
|
|||||||
Third Target Distribution
|
Above $0.456 up to $0.548
|
75.0
|
%
|
0.1
|
%
|
24.9
|
%
|
|||||||
Thereafter
|
above $0.548
|
50.0
|
%
|
0.1
|
%
|
49.9
|
%
|
B. |
SIGNIFICANT CHANGES
|
A. |
OFFER AND LISTING DETAILS
|
A. |
SHARE CAPITAL
|
B. |
MEMORANDUM AND ARTICLES OF ASSOCIATION
|
C. |
MATERIAL CONTRACTS
|
D. |
EXCHANGE CONTROLS
|
E. |
TAXATION
|
|
• |
we are organized in a foreign country (our "country of organization") that grants an "equivalent exemption" to corporations organized in the United States; and
|
|
• |
more than 50% of the value of our units 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, which we refer to as the "50% Ownership Test," or
|
|
• |
our units are "primarily and regularly traded on an established securities market" in our country of organization, in another country that grants an "equivalent exemption" to United States corporations, or in the United States, which
we refer to as the "Publicly-Traded Test."
|
|
• |
we have, or are considered to have, a fixed place of business in the United States involved in the earning of shipping income; and
|
|
• |
substantially all of our U.S.-source shipping income is attributable to regularly scheduled transportation, such as the operation of a vessel that follows a published schedule with repeated sailings at regular intervals between the
same points for voyages that begin or end in the United States.
|
|
• |
an individual citizen or resident of the United States (as determined for United States federal income tax purposes),
|
|
• |
a corporation (or other entity that is classified as a corporation for United States federal income tax purposes) organized under the laws of the United States or any of its political subdivisions),
|
|
• |
an estate the income of which is subject to United States federal income taxation regardless of its source, or
|
|
• |
a trust if (i) a court within the United States is able to exercise primary jurisdiction over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust or
(ii) the trust has a valid election in effect to be treated as a United States person for United States federal income tax purposes.
|
|
• |
at least 75% of our gross income (including the gross income of our vessel-owning subsidiaries) 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 us (including the assets of our vessel-owning subsidiaries) 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 units;
|
|
• |
the amount allocated to the current taxable year and any taxable year prior to the taxable year we were first treated as a PFIC with respect to the Non-Electing Holder 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 taxpayers for that year, and an interest charge for the deemed deferral benefit would be
imposed with respect to the resulting tax attributable to each such other taxable year.
|
|
• |
fails to provide an accurate taxpayer identification number;
|
|
• |
is notified by the IRS that it has failed to report all interest or corporate distributions required to be reported on its U.S. federal income tax returns; or
|
|
• |
in certain circumstances, fails to comply with applicable certification requirements.
|
F. |
DIVIDENDS AND PAYING AGENTS
|
G. |
STATEMENTS BY EXPERTS
|
H. |
DOCUMENTS ON DISPLAY
|
I. |
SUBSIDIARY INFORMATION
|
Charterer
|
2019
|
2018
|
2017
|
|||||||||
Gazprom
|
47
|
%
|
69
|
%
|
72
|
%
|
||||||
Yamal
|
31
|
%
|
8
|
%
|
-
|
|||||||
Equinor (formerly, Statoil)
|
16
|
%
|
18
|
%
|
19
|
%
|
||||||
Major energy company
|
6
|
%
|
2
|
%
|
-
|
|||||||
PetroChina
|
-
|
3
|
%
|
3
|
%
|
|||||||
Shell
|
-
|
-
|
6
|
%
|
||||||||
Total
|
100
|
%
|
100
|
%
|
100
|
%
|
ITEM 14. |
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
|
A. |
Disclosure Controls and Procedures
|
B. |
Management's Annual Report on Internal Control over Financial Reporting
|
|
• |
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Partnership;
|
|
• |
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 Partnership'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.
|
C. |
Attestation Report of the Registered Public Accounting Firm
|
D. |
Changes in Internal Control Over Financial Reporting
|
2019
|
2018
|
|||||||
Audit Fees
|
€
|
162,750
|
€
|
251,250
|
||||
Audit-Related Fees
|
-
|
-
|
||||||
Tax Fees
|
€
|
-
|
€
|
8,100
|
||||
All Other Fees
|
-
|
-
|
||||||
€
|
162,750
|
€
|
259,350
|
ITEM 16E. |
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
|
|
• |
Executive Sessions. The NYSE requires that non-management directors meet regularly in executive sessions without management. The NYSE also requires that all independent directors meet in an
executive session at least once a year. As permitted under Marshall Islands law and our Partnership Agreement, our non-management directors do not regularly hold executive sessions without management and we do not expect them to do so in
the future.
|
|
• |
Nominating/Corporate Governance Committee. The NYSE requires that a listed U.S. company have a nominating/corporate governance committee of independent
directors and a committee charter specifying the purpose, duties and evaluation procedures of the committee. As permitted under Marshall Islands law and our Partnership Agreement, we do not currently have a nominating or corporate
governance committee.
|
|
• |
Audit Committee. The NYSE requires, among other things, that a listed U.S. company have an audit committee with a minimum of three members, all of whom are independent. As permitted by Rule
10A-3 under the Exchange Act, our audit committee consists of two independent members of our Board, Alexios Rodopoulos and Evangelos Vlahoulis.
|
|
• |
Corporate Governance Guidelines. The NYSE requires that a listed U.S. Company adopt and disclose corporate governance guidelines. The guidelines must
address, among other things: director qualification standards, director responsibilities, director access to management and independent advisers, director compensation, director orientation and continuing education, management succession
and an annual performance evaluation. We are not required to adopt such guidelines under Marshall Islands law or our Partnership Agreement and we have not adopted such guidelines.
|
|
• |
Unitholder Approval of the Issuance of Certain Securities, including Equity Compensation Plans. The NYSE requires that unitholders be given the opportunity to vote on certain security issuances,
including security issuances above certain thresholds and all equity-compensation plans and material revisions thereto, with limited exemptions for employment inducement awards, certain grants, plans and amendments in the context of
mergers and acquisitions, and certain specific types of plans. As permitted under Marshall Islands law and our Partnership Agreement, we do not require unitholder approval on security issuances, including security issuances that are
senior to our common units, and equity-compensation plans and any material revisions thereto.
|
|
• |
Proxies. As a foreign private issuer, we are not required to solicit proxies or provide proxy statements to the NYSE pursuant to the
NYSE corporate governance rules or Marshall Islands law. Consistent with Marshall Islands law and as provided in our Partnership Agreement, we will notify our unitholders of meetings between 10 and 60 days before the meeting. This
notification will contain, among other things, information regarding business to be transacted at the meeting. In addition, our Partnership Agreement provides that any unitholder or group of unitholders that beneficially own 15% or more
of our outstanding common units are entitled to nominate directors for election at an annual meeting if written notice is given to the Board of Directors not more than 120 days and not less than 90 days prior to the date of the annual
meeting.
|
Exhibit
Number
|
Description
|
|
1.1
|
||
1.2
|
||
1.3
|
||
1.4
|
||
1.5
|
||
1.6
|
||
1.7
|
||
1.8
|
||
2.1
|
||
4.1
|
||
4.2
|
||
4.3
|
||
4.4
|
||
4.5
|
||
4.6
|
||
8.1
|
||
12.1
|
||
12.2
|
||
13.1
|
||
13.2
|
||
15.1
|
||
15.2
|
||
101.INS
|
XBRL Instance Document
|
|
101.SCH
|
XBRL Taxonomy Extension Schema
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase
|
(1) |
Incorporated by reference to the Partnership's Registration Statement on Form F-1, which was declared effective by the Securities and Exchange Commission on November 12, 2013 (Registration No. 333-191653)
|
(2) |
Incorporated by reference to the Partnership's Annual Report on Form 20-F, which was filed with the Securities and Exchange Commission on March 25, 2014
|
(3) |
Incorporated by reference to the Partnership's Registration Statement on Form 8-A12B, filed with the Securities and Exchange Commission on October 23, 2018.
|
(4) |
Incorporated by reference to the Partnership's Annual Report on Form 20-F, which was filed with the Securities and Exchange Commission on March 10, 2015.
|
(5) |
Incorporated by reference to the Partnership's Annual Report on Form 20-F, which was filed with the Securities and Exchange Commission on April 18, 2016.
|
DYNAGAS LNG PARTNERS LP
|
|||||
By:
|
/s/ Michael Gregos
|
||||
Name:
|
Michael Gregos
|
||||
Title:
|
Chief Financial Officer (Principal Financial Officer)
|
||||
Date:
|
April 16, 2020
|
Page
|
|
Report of Independent Registered Public Accounting Firm
|
F-3
|
Consolidated Balance Sheets as of December 31, 2019 and 2018
|
F-4
|
Consolidated Statements of Income for the years ended December 31, 2019, 2018 and 2017
|
F-5
|
Consolidated Statements of Partners' Equity for the years ended December 31, 2019, 2018 and 2017
|
F-6
|
Consolidated Statements of Cash Flows for the years ended December 31, 2019, 2018 and 2017
|
F-7
|
Notes to the Consolidated Financial Statements
|
F-8
|
Note
|
2019
|
2018
|
2017
|
|||||||||||||
REVENUES:
|
||||||||||||||||
Voyage revenues
|
7
|
$
|
130,901
|
$
|
127,135
|
$
|
138,990
|
|||||||||
EXPENSES:
|
||||||||||||||||
Voyage expenses
|
(1,078
|
)
|
(1,148
|
)
|
(1,789
|
)
|
||||||||||
Voyage expenses-related party
|
3
|
(1,631
|
)
|
(1,654
|
)
|
(1,830
|
)
|
|||||||||
Vessel operating expenses
|
(28,351
|
)
|
(25,042
|
)
|
(27,067
|
)
|
||||||||||
Dry-docking and special survey costs
|
—
|
(7,422
|
)
|
(6,193
|
)
|
|||||||||||
General and administrative expenses
|
(1,985
|
)
|
(1,452
|
)
|
(961
|
)
|
||||||||||
General and administrative expenses- related party
|
3
|
(723
|
)
|
(757
|
)
|
(725
|
)
|
|||||||||
Management fees-related party
|
3
|
(6,537
|
)
|
(6,347
|
)
|
(6,162
|
)
|
|||||||||
Depreciation
|
4
|
(30,680
|
)
|
(30,330
|
)
|
(30,319
|
)
|
|||||||||
Operating income
|
$
|
59,916
|
$
|
52,983
|
$
|
63,944
|
||||||||||
OTHER INCOME/(EXPENSES):
|
||||||||||||||||
Interest and finance costs
|
5, 11
|
(58,591
|
)
|
(50,490
|
)
|
(46,281
|
)
|
|||||||||
Interest income
|
2,331
|
1,051
|
203
|
|||||||||||||
Other, net
|
(43
|
)
|
69
|
(527
|
)
|
|||||||||||
Total other expenses, net
|
(56,303
|
)
|
(49,370
|
)
|
(46,605
|
)
|
||||||||||
Partnership's Net Income
|
$
|
3,613
|
$
|
3,613
|
$
|
17,339
|
||||||||||
Common unitholders' interest in Net Income
|
$
|
(7,942
|
)
|
$
|
(4,042
|
)
|
$
|
9,302
|
||||||||
Series A Preferred unitholders' interest in Net Income
|
$
|
6,750
|
$
|
6,750
|
$
|
6,750
|
||||||||||
Series B Preferred unitholders' interest in Net Income
|
$
|
4,813
|
$
|
909
|
$
|
—
|
||||||||||
Subordinated unitholders' interest in Net Income
|
$
|
—
|
$
|
—
|
$
|
1,208
|
||||||||||
General Partner's interest in Net Income
|
$
|
(8
|
)
|
$
|
(4
|
)
|
$
|
79
|
||||||||
(Loss)/Earnings per unit, basic and diluted:
|
10
|
|||||||||||||||
Common unit (basic and diluted)
|
$
|
(0.22
|
)
|
$
|
(0.11
|
)
|
$
|
0.27
|
||||||||
Weighted average number of units outstanding, basic and diluted:
|
10
|
|||||||||||||||
Common units
|
35,490,000
|
35,490,000
|
34,545,740
|
Partners' Capital
|
||||||||||||||||||||||||||||||||||||||||||||
Series A Preferred
|
Series B Preferred
|
Common
|
Subordinated
|
General Partner
|
Series A Preferred
|
Series B Preferred
|
Common
|
Subordinated
|
General Partner
|
Total
|
||||||||||||||||||||||||||||||||||
BALANCE, December 31, 2016
|
3,000,000
|
—
|
20,505,000
|
14,985,000
|
35,526
|
$
|
73,216
|
$
|
—
|
$
|
302,952
|
$
|
(8,429
|
)
|
$
|
97
|
$
|
367,836
|
||||||||||||||||||||||||||
—Net income
|
—
|
—
|
—
|
—
|
—
|
6,750
|
—
|
9,302
|
1,208
|
79
|
17,339
|
|||||||||||||||||||||||||||||||||
— Conversion of subordinated units to common units (Note 9)
|
—
|
—
|
14,985,000
|
(14,985,000
|
)
|
—
|
—
|
—
|
(15,171
|
)
|
15,171
|
—
|
—
|
|||||||||||||||||||||||||||||||
— Distributions declared and paid (common and preferred units) (Note 9)
|
—
|
—
|
—
|
—
|
—
|
(6,750
|
)
|
—
|
(52,028
|
)
|
(7,950
|
)
|
(129
|
)
|
(66,857
|
)
|
||||||||||||||||||||||||||||
BALANCE, December 31, 2017
|
3,000,000
|
—
|
35,490,000
|
—
|
35,526
|
$
|
73,216
|
$
|
—
|
$
|
245,055
|
$
|
—
|
$
|
47
|
$
|
318,318
|
|||||||||||||||||||||||||||
—Net income
|
—
|
—
|
—
|
—
|
—
|
6,750
|
909
|
(4,042
|
)
|
—
|
(4
|
)
|
3,613
|
|||||||||||||||||||||||||||||||
— Issuance of Series B Preferred Units, net of issuance costs (Note 9)
|
—
|
2,200,000
|
—
|
—
|
—
|
—
|
52,976
|
—
|
—
|
—
|
52,976
|
|||||||||||||||||||||||||||||||||
— Distributions declared and paid (common and preferred units) (Note 9)
|
—
|
—
|
—
|
—
|
—
|
(6,750
|
)
|
—
|
(41,613
|
)
|
—
|
(59
|
)
|
(48,422
|
)
|
|||||||||||||||||||||||||||||
BALANCE, December 31, 2018
|
3,000,000
|
2,200,000
|
35,490,000
|
—
|
35,526
|
$
|
73,216
|
$
|
53,885
|
$
|
199,400
|
$
|
—
|
$
|
(16
|
)
|
$
|
326,485
|
||||||||||||||||||||||||||
—Net income
|
—
|
—
|
—
|
—
|
—
|
6,750
|
4,813
|
(7,942
|
)
|
—
|
(8
|
)
|
3,613
|
|||||||||||||||||||||||||||||||
—Distributions declared and paid (common and preferred units) (Note 9)
|
—
|
—
|
—
|
—
|
—
|
(6,750
|
)
|
(5,200
|
)
|
(4,437
|
)
|
—
|
(4
|
)
|
(16,391
|
)
|
||||||||||||||||||||||||||||
BALANCE, December 31, 2019
|
3,000,000
|
2,200,000
|
35,490,000
|
—
|
35,526
|
$
|
73,216
|
$
|
53,498
|
$
|
187,021
|
$
|
—
|
$
|
(28
|
)
|
$
|
313,707
|
Note
|
2019
|
2018
|
2017
|
|||||||||||||
Cash flows from Operating Activities:
|
||||||||||||||||
Net income:
|
$
|
3,613
|
$
|
3,613
|
$
|
17,339
|
||||||||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||||||||||
Depreciation
|
4
|
30,680
|
30,330
|
30,319
|
||||||||||||
Amortization and write-off of deferred financing fees
|
11
|
10,696
|
3,261
|
5,387
|
||||||||||||
Deferred revenue amortization
|
(377
|
)
|
(45
|
)
|
369
|
|||||||||||
Amortization of deferred charges
|
181
|
68
|
—
|
|||||||||||||
Amortization of fair value of acquired time charter
|
7
|
—
|
5,267
|
7,247
|
||||||||||||
Changes in operating assets and liabilities:
|
||||||||||||||||
Trade accounts receivable
|
(95
|
)
|
107
|
(55
|
)
|
|||||||||||
Prepayments and other assets
|
(413
|
)
|
389
|
(315
|
)
|
|||||||||||
Inventories
|
502
|
(421
|
)
|
35
|
||||||||||||
Due from/to related parties
|
2,982
|
31
|
(235
|
)
|
||||||||||||
Trade accounts payable
|
(101
|
)
|
1,149
|
1,584
|
||||||||||||
Accrued liabilities
|
(2,565
|
)
|
155
|
299
|
||||||||||||
Deferred charges
|
(1,000
|
)
|
(1,472
|
)
|
—
|
|||||||||||
Deferred revenue
|
—
|
1,445
|
—
|
|||||||||||||
Unearned revenue
|
(926
|
)
|
(883
|
)
|
(2,635
|
)
|
||||||||||
Net cash provided by Operating Activities
|
$
|
43,177
|
$
|
42,994
|
$
|
59,339
|
||||||||||
Cash flows from Investing Activities:
|
||||||||||||||||
Other additions to vessels' equipment
|
4
|
—
|
(409
|
)
|
—
|
|||||||||||
Net cash used in Investing Activities
|
$
|
—
|
$
|
(409
|
)
|
$
|
—
|
|||||||||
Cash flows from Financing Activities:
|
||||||||||||||||
Net proceeds from issuance of preferred units
|
9
|
—
|
53,138
|
—
|
||||||||||||
Payment of securities registration and other filing costs
|
(139
|
)
|
(48
|
)
|
(145
|
)
|
||||||||||
Distributions declared and paid
|
(16,391
|
)
|
(48,422
|
)
|
(66,857
|
)
|
||||||||||
Proceeds from long-term debt
|
5
|
675,000
|
—
|
480,000
|
||||||||||||
Repayment of long-term debt
|
5
|
(734,800
|
)
|
(4,800
|
)
|
(474,900
|
)
|
|||||||||
Payment of deferred finance fees
|
(10,558
|
)
|
—
|
(12,568
|
)
|
|||||||||||
Net cash used in Financing Activities
|
$
|
(86,888
|
)
|
$
|
(132
|
)
|
$
|
(74,470
|
)
|
|||||||
Net increase/ (decrease) in cash and cash equivalents and restricted cash
|
(43,711
|
)
|
42,453
|
(15,131
|
)
|
|||||||||||
Cash and cash equivalents and restricted cash at beginning of the year
|
109,917
|
67,464
|
82,595
|
|||||||||||||
Cash and cash equivalents and restricted cash at end of the year
|
$
|
66,206
|
$
|
109,917
|
$
|
67,464
|
||||||||||
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH
|
||||||||||||||||
Cash and cash equivalents
|
16,206
|
109,917
|
67,464
|
|||||||||||||
Restricted cash
|
50,000
|
—
|
—
|
|||||||||||||
Cash and cash equivalents and restricted cash
|
$
|
66,206
|
$
|
109,917
|
$
|
67,464
|
||||||||||
SUPPLEMENTAL CASH FLOW INFORMATION
|
||||||||||||||||
Cash paid during the year for:
|
||||||||||||||||
Interest
|
$
|
48,879
|
$
|
47,033
|
$
|
39,796
|
Company Name
|
Country of incorporation/ formation
|
Vessel Name
|
Delivery date from shipyard
|
Delivery date to Partnership
|
Cbm Capacity
|
Pegasus Shipholding S.A. ("Pegasus")
|
Marshall Islands
|
Clean Energy
|
March 2007
|
October 2013
|
149,700
|
Lance Shipping S.A.
("Lance")
|
Marshall Islands
|
Ob River
|
July 2007
|
October 2013
|
149,700
|
Seacrown Maritime Ltd.
("Seacrown")
|
Marshall Islands
|
Amur River
|
January 2008
|
October 2013
|
149,700
|
Fareastern Shipping Limited
("Fareastern")
|
Malta
|
Arctic Aurora
|
July 2013
|
June 2014
|
155,000
|
Navajo Marine Limited
("Navajo")
|
Marshall Islands
|
Yenisei River
|
July 2013
|
September 2014
|
155,000
|
Solana Holding Ltd.
("Solana")
|
Marshall Islands
|
Lena River
|
October 2013
|
December 2015
|
155,000
|
Company Name
|
Country of incorporation/formation
|
Purpose of incorporation
|
Dynagas Equity Holding Limited ("Dynagas Equity")
|
Marshall Islands
|
Holding company that owns all of the outstanding share capital of Arctic LNG Carriers Ltd. ("Arctic LNG").
|
Dynagas Operating GP LLC
("Dynagas Operating GP")
|
Marshall Islands
|
Limited Liability Company in which the Partnership holds a 100% membership interest and which has 100% of the Non-Economic General Partner Interest in Dynagas Operating LP.
|
Dynagas Operating LP
("Dynagas Operating")
|
Marshall Islands
|
Limited partnership in which the Partnership holds a 100% limited partnership interest and which owns 100% of the issued and outstanding share capital of Dynagas Equity.
|
Dynagas Finance Inc.
|
Marshall Islands
|
Wholly owned subsidiary of the Partnership whose activities were limited to the co-issuance of the 2019 Notes discussed under Note 5 and engaging in other activities incidental thereto.
|
Arctic LNG
|
Marshall Islands
|
Wholly owned subsidiary of the Partnership which is directly wholly owned by Dynagas Equity and which owns all of the issued and outstanding share capital of Pegasus, Lance, Seacrown, Fareastern, Navajo, Solana and Dynagas Finance LLC.
|
Dynagas Finance LLC
|
Delaware
|
Wholly owned subsidiary of Arctic LNG and co-borrower of the Partnership's Term Loan B discussed under Note 5.
|
(a)
|
Principles of Consolidation: The accompanying consolidated financial statements have been prepared in accordance with Generally Accepted Accounting
Principles in the United States of America ("U.S. GAAP"). The consolidated financial statements include the accounts of Dynagas Partners and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated upon
consolidation. Dynagas Partners, as the holding company, determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a voting interest entity or a variable interest entity. Under Financial
Accounting Standards Board ("FASB") Accounting Standard Codification ("ASC") 810 "Consolidation", a voting interest entity is an entity in which the total equity investment at risk is deemed sufficient to absorb the expected losses of the
entity, the equity holders have all the characteristics of a controlling financial interest and the legal entity is structured with substantive voting rights.
|
|
The holding company consolidates voting interest entities in which it owns all, or at least a majority (generally, greater than 50%) of the voting interest. Variable interest entities ("VIE") are entities, as
defined under ASC 810, that in general either have equity investors with non-substantive voting rights or that have equity investors that do not provide sufficient financial resources for the entity to support its activities. The holding
company has a controlling financial interest in a VIE and is, therefore, the primary beneficiary of a VIE if it has the power to direct the activities of a VIE that most significantly impact the VIE's economic performance and the obligation
to absorb losses or the right to receive benefits that could potentially be significant to the VIE. A VIE should have only one primary beneficiary which is required to consolidate the VIE. A VIE may not have a primary beneficiary if no party
meets the criteria described above. The Partnership evaluates all arrangements that may include a variable interest in an entity to determine if it is the primary beneficiary, and would therefore be required to include assets, liabilities and
operations of a VIE in its consolidated financial statements. As of the years ended December 31, 2019, 2018 and 2017, no such interests existed.
|
||
(b)
|
Use of Estimates: The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
|
|
(c)
|
Other Comprehensive Income: The Partnership follows the provisions of ASC 220, "Comprehensive Income", which requires separate presentation of
certain transactions which are recorded directly as components of equity. The Partnership has no such transactions which affect other comprehensive income and accordingly, for the years ended December 31, 2019, 2018 and 2017, comprehensive
income equaled net income.
|
|
(d)
|
Foreign Currency Translation: The functional currency of the Partnership is the U.S. Dollar because the Partnership's vessels operate in
international shipping markets and therefore, the Partnership primarily transacts business in U.S. Dollars. The Partnership's books of accounts are maintained in U.S. Dollars. Transactions involving other currencies during the year are
converted into U.S. Dollars using the exchange rates in effect at the time of such transactions. At the balance sheet date, monetary assets and liabilities, which are denominated in other currencies, are translated into U.S. Dollars using the
balance sheet date exchange rates. Resulting gains or losses are included in "Other, net" in the accompanying consolidated statements of income.
|
|
(e)
|
Cash and Cash Equivalents: The Partnership considers highly liquid investments, such as time deposits with an original maturity of three months or
less, to be cash equivalents.
|
|
(f)
|
Restricted cash: Restricted cash may comprise of (i) minimum liquidity collateral requirements or minimum required cash deposits that are required to
be maintained under the Partnership's financing arrangements, (ii) cash deposits in so-called "retention accounts" which may only be used as per the Partnership's borrowing arrangements for the purpose of serving the loan installments coming
due or, (iii) other cash deposits required to be retained until other specified conditions prescribed in the Partnership's debt agreements are met. In the event that the obligation to maintain such deposits is expected to elapse within the
next operating cycle, these deposits are classified as current assets. Otherwise, they are classified as non-current assets.
|
|
(g)
|
Trade Accounts Receivable: The amount shown as trade accounts receivable at each balance sheet date, includes accounts receivable from charterers,
net of any provision for doubtful accounts. At each balance sheet date, all potentially uncollectible accounts are assessed individually for purposes of determining the appropriate provision for doubtful accounts primarily based on the aging
of such balances and any amounts in dispute. Provision for doubtful accounts as of December 31, 2019 and 2018, was nil.
|
|
(h)
|
Inventories: Inventories consist of lubricants which are stated at the lower of cost or net realizable value, following the adoption of ASU 2015-11,
"Simplifying the Measurement of Inventory". Cost is determined by the first in, first out method. Inventories may also consist of bunkers during periods when vessels are unemployed or under voyage charters and spares in warehouses, in which
case, they are also stated at the lower of cost or net realizable value and cost is still determined by the first in, first out method. When evidence exists that the net realizable value of inventory is lower than its cost, the difference is
recognized as a loss in earnings in the period in which it occurs.
|
(i)
|
Insurance Claims: The Partnership records insurance claim recoveries for insured losses incurred on damage to fixed assets, loss of hire and for
insured crew medical expenses. Insurance claim recoveries are recorded, net of any deductible amounts, at the time when (i) the Partnership's vessels suffer insured damages or at the time when crew medical expenses are incurred, (ii) recovery
is probable under the related insurance policies, (iii) the Partnership can estimate the amount of such recovery following submission of the insurance claim and (iv) provided that the claim is not subject to litigation.
|
|
(j)
|
Vessels, Net: Vessels are stated at cost, which consists of the contract price and any material expenses incurred upon delivery (initial repairs,
improvements and delivery expenses, capitalized interest and on-site supervision costs incurred during the construction periods). Subsequent expenditures for conversions and major improvements are also capitalized when such expenditures
appreciably extend the life, increase the earning capacity or improve the efficiency or safety of the vessels; otherwise these amounts are charged to expense as incurred. The cost of each of the Partnership's vessels is depreciated beginning
from the time when the vessel is ready for her intended use, on a straight-line basis, to the time that the vessel reaches the end of its economic useful life, after considering the estimated residual value of the vessel which is based on its
lightweight tonnage times an estimated scrap rate. Following a reassessment of the scrap rates effective from October 1, 2019, the Partnership reduced the average scrap rate estimate from $0.685 per lightweight ton per LNG carrier to $0.500
per lightweight ton per LNG carrier. This change in accounting estimate which did not require retrospective adoption as per ASC 250 "Accounting Changes and Error Corrections," results in additional future annual depreciation of $1.4 million.
For the fiscal year 2019, the effect of the change in the estimate on net income and loss per share were a decrease by $0.3 million and an increase by $0.01 respectively. Management estimates that the useful life of each of the Partnership's
vessels to be 35 years from the date of initial delivery from the shipyard. Secondhand vessels are depreciated from the date of their acquisition through their remaining estimated useful life. When regulations place limitations on the ability
of a vessel to trade on a worldwide basis, such vessel's remaining useful life is adjusted as of the date such regulations are adopted.
|
|
(k)
|
Impairment of Long-Lived Assets: The Partnership follows ASC 360-10-40 "Impairment or Disposals of Long-Lived Assets", which addresses financial
accounting and reporting for the impairment or disposal of long-lived assets. The standard requires that long-lived assets held and used by an entity be reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount of such assets may not be recoverable. When the estimate of undiscounted projected operating cash flows, excluding interest charges, expected to be generated by the use of the asset is less than its carrying amount, the asset
is evaluated for an impairment loss. Measurement of the impairment loss is based on the fair value of the asset. The Partnership reviews its long-lived assets for impairment whenever events or changes in circumstances, such as business plans
to dispose a vessel earlier than the end of its useful life and prevailing market conditions, indicate that the carrying amount of the assets may not be recoverable. When such indications are present, the Partnership determines undiscounted
projected net operating cash flows for each vessel and compares the result to the vessel's carrying value. The fair values of the assets are determined through Level 2 inputs of the fair value hierarchy as defined in ASC 820, "Fair value
measurements and disclosures" based on management's estimates, assumptions, use of available market data, use of third party valuations and other market observable data. In developing estimates of future cash flows, the Partnership must make
assumptions about future charter rates, vessel operating expenses, fleet utilization and the estimated remaining useful life of the vessels. These assumptions are based on historical trends as well as future expectations.
|
The projected net operating cash flows are determined by considering the charter revenues from existing time charters for the fixed fleet days and by estimating charter rates for the unfixed days. Expected
outflows for scheduled vessel maintenance and vessel operating expenses are based on the Partnership's budget by using historical data, which is adjusted annually with the assumption of the average annual inflation rate prevailing at the time
of the impairment test. In developing the estimate for the effective fleet utilization, the Partnership takes into account the period(s) each vessel is expected to undergo her scheduled maintenance (dry-docking and special surveys) and each
vessel's loss of hire resulting from repositioning or other conditions. In developing estimates for the remaining estimated useful lives of the current fleet and scrap values, the Partnership utilizes methods, which are identical to those
employed as part of the Partnership's depreciation policy. As and for each of the years ended December 31, 2019, 2018 and 2017, the Partnership incurred no impairment loss.
|
||
(l)
|
Intangible Assets/Liabilities Related to Time Charters Acquired: When and where the Partnership identifies any assets or liabilities associated with
the acquisition of a vessel, the Partnership records all such identified assets or liabilities at fair value. Fair value is determined by reference to market data. In connection with the acquisition of a vessel, the Partnership determines the
fair value of any asset or liability acquired based on the market value of the time charters assumed when a vessel is acquired. The amount to be recorded either as an asset or a liability on the date the vessel is acquired, is determined by
comparing the charter rate in the existing time charter agreement of the acquired vessel with the market rates for equivalent time charter agreements prevailing at the time the vessel is acquired. When the present value of the time charter
assumed is greater than the current fair value of such charter, the difference is recorded as an asset. When the present value of the existing time charter assumed is less than the current fair value of such charter, the difference is
recorded as liability. Assets and liabilities are amortized as adjustments to revenues over the remaining term of the assumed time charter and are classified as non-current assets or liabilities, as applicable, in the accompanying
consolidated balance sheets. Impairment testing is performed when events or changes in circumstances indicate that the carrying amount of the intangible asset may not be recoverable.
|
|
(m)
|
Accounting for Special Survey and Dry-Docking Costs: The Partnership follows the direct expense method of accounting for dry-docking and special
survey costs, in which case, such costs are expensed in the period incurred. The vessels undergo dry-dock or special survey approximately every five years during the first fifteen years of their life and, subsequently, every two and a half
years to the end of their useful life. Costs relating to routine repairs and maintenance are also expensed in the period they are incurred.
|
|
(n)
|
Financing Costs: In accordance with ASU 2015-03, "Interest – Imputation of Interest", costs associated with long-term debt, including but not limited
to, fees paid to lenders, fees required to be paid to third parties on the lender's behalf in connection with debt financing or refinancing, or any unamortized portion thereof, are presented by the Partnership as a reduction of long-term
debt. Such fees are deferred and amortized to interest and finance costs during the life of the related debt instrument using the effective interest method. Unamortized fees relating to loans repaid or refinanced as debt extinguishments and
loan commitment fees are expensed as interest and finance costs in the period incurred in the accompanying consolidated statements of income. Any unamortized balance of costs relating to refinanced long-term debt is deferred and amortized
over the term of the credit facility in the period that such refinancing occurs, subject to the provisions of the accounting guidance with respect to "Debt – Modifications and Extinguishments".
|
|
(o)
|
Concentration of Credit Risk: Financial instruments, which may potentially subject the Partnership to significant concentrations of credit risk,
consist principally of cash and cash equivalents and trade accounts receivable. The maximum exposure to loss due to credit risk is the book value at the balance sheet date. The Partnership places its cash and cash equivalents, consisting
mostly of deposits, with high credit qualified financial institutions. The Partnership performs periodic evaluations of the relative credit standing of those financial institutions. The Partnership limits its credit risk with trade accounts
receivable by performing ongoing credit evaluations of each of its charterer's financial condition and generally does not require collateral for its trade accounts receivable.
|
Charterer
|
2019
|
2018
|
2017
|
|||||||||
A
|
47
|
%
|
69
|
%
|
72
|
%
|
||||||
B
|
31
|
%
|
—
|
—
|
||||||||
C
|
16
|
%
|
18
|
%
|
19
|
%
|
||||||
Total |
94
|
%
|
87
|
%
|
91
|
%
|
(p)
|
Accounting for Revenues and Related Expenses: The Partnership generates its revenues from charterers under time charter agreements, which contain a
lease as they meet the criteria of a lease under ASC 842 or ASC 840 under transition accounting. In particular, under ASC 842, the Partnership elected certain practical expedients, which allowed the Partnership's existing lease arrangements,
in which it was a lessor, classified as operating leases under ASC 840 to continue to be classified as operating leases under ASC 842. Leases, which commenced on or after January 1, 2018, were classified as operating leases under ASC 842. The
Partnership's vessels are each employed under a time charter agreement, where a contract is entered into with a charterer for the charterer's use of a vessel for a specific period of time and at a specified daily charter hire rate. If a time
charter agreement exists and collection of the related revenue is reasonably assured, revenue is recognized, as it is earned ratably over the duration of the period of the time charter. Revenues from time chartering of vessels are accounted
for as operating leases. The Partnership early adopted ASC 842 as of September 30, 2018, with adoption reflected as of January 1, 2018, the beginning of the annual period in accordance with ASC 250. The Partnership has determined that the
non-lease components in its time charter contracts relate to services for the operation of the vessel, which include crew, technical, safety, commercial services, among others. The Partnership has elected to account for the lease and
non-lease component of time charter agreements as a combined component in its consolidated financial statements, having taken into account that the non-lease components would be accounted for ratably on a straight-line basis over the duration
of the time charter and that the lease component is considered as the predominant component. The Partnership qualitatively assessed that more value is ascribed to the vessel rather than to the services provided under the time charter
agreements. Such revenues are recognized on a straight line basis at the average minimum lease revenue over the rental periods of such charter agreements, as service is performed.
Revenue generated from variable lease payments is recognized in the period when changes in facts and circumstances on which the variable lease payments are based occur. The residual or excess amounts from
actually collected hire based on the time charter agreement for each period, if any, is classified as deferred or prepaid revenue in the accompanying consolidated balance sheets. Unearned revenue includes cash received prior to the balance
sheet date for which all criteria to recognize as revenue have not yet been met as at the balance sheet date and, accordingly, is related to revenue earned after such date. Apart from the agreed hire rate, the owner may be entitled to an
additional income, such as ballast bonus, which is considered as reimbursement of owner's expenses and is recognized together with the lease component over the duration of the charter. The Partnership has made an accounting policy election to
recognize the related ballast costs, mainly consisting of bunkers, incurred over the period between the charter party date or the prior redelivery date (whichever is latest) and the delivery date to the charterer, as contract fulfilment costs
in accordance with ASC 340-40 and amortized over the charter period. During the year ended December 31, 2019, the amortization of the contract fulfilment costs was $0.2 million. Voyage expenses, primarily consist of commissions, which are
paid by the Partnership as well as port, canal and bunker expenses that are unique to a particular charter and which are paid by the charterer under the time charter arrangements or by the Partnership during periods of off-hire. All voyage
expenses are expensed as incurred, except for commissions. Commissions paid to brokers are deferred and amortized over the related charter period to the extent revenue has been deferred since commissions are earned as the Partnership's
revenues are earned.
|
|
(q)
|
Repairs and Maintenance: All repair and maintenance expenses including underwater inspection costs are
expensed in the period incurred. Such costs are included in vessel operating expenses in the accompanying consolidated statements of income.
|
|
(r)
|
Earnings/ (Loss) Per Unit: As of December 31, 2019, the Partnership's capital structure consisted of
common units, two separate classes of preferred units and a general partner interest. The incentive distribution rights are a separate class of non-voting interests that are currently held by the Partnership's General Partner but, subject
to certain restrictions, may be transferred or sold apart from the General Partner's interest. The Partnership calculates basic earnings/ (loss) per each class of units by allocating period distributed and undistributed earnings/ (losses)
to the General Partner, limited partners and incentive distribution rights holders using the two-class method and in accordance with the Partnership's Fourth Amended and Restated Limited Partnership Agreement dated October 23, 2018 (the
"Limited Partnership Agreement"). Basic earnings/ (losses) per common unit are computed by allocating distributed and undistributed net income/ (losses) available to common unitholders, after subtracting the interest on the Partnership's
net income/ (loss) of all classes of preferred unitholders, subordinated unitholders (up to January 23, 2017 or the "Sponsor Subordinated Units Conversion Date", see Note 9) and the General Partner by the weighted average number of common
units outstanding during the year. Any undistributed earnings for the period are allocated to the various unitholders based on the distribution waterfall for cash available for distribution specified in the Limited Partnership Agreement.
Where distributions relating to the period are in excess of earnings, the surplus is also allocated according to the cash distribution model. Diluted earnings per common unit reflect the potential dilution that could occur if securities or
other contracts to issue units were exercised, if any. The Partnership had no dilutive securities outstanding during the three-year period ended December 31, 2019.
|
|
(s)
|
Segment Reporting: The Partnership operates under one reportable segment relating to its operations as
it operates solely LNG vessels. The Partnership reports financial information and evaluates its operations and operating results by the type of vessel and not by the length or type of vessel employment for its customers i.e. time charters.
The Partnership's management does not use discrete financial information to evaluate operating results for each type of charter. Although revenue can be identified by charter type, management cannot and does not identify expenses,
profitability or other financial information in such a manner. When the Partnership charters a vessel to a charterer, the charterer is free to trade the vessel worldwide. As a result, the disclosure of geographic information is
impracticable.
|
|
(t)
|
Fair Value Measurements: The Partnership follows ASC 820, "Fair Value Measurements and Disclosures",
which defines and provides guidance for the measurement of fair value. This guidance creates a fair value hierarchy of measurement and indicates that, when possible, fair value is the price that would be received in the sale of an asset or
the price that would be paid in the transfer of a liability in an orderly transaction between market participants in the market in which the reporting entity transacts. The fair value hierarchy gives the highest priority to quoted prices in
active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable data that are not corroborated by market data (Level 3). For example, the reporting entity's own data has a Level 3 priority because it is
not or not yet observable or corroborated by market data. Observable market based inputs or unobservable inputs that are corroborated by market data are classified under Level 2 of the fair value hierarchy. Under the standard, fair value
measurements would be separately disclosed by level within the fair value hierarchy. ASC 820 applies when assets or liabilities in the consolidated financial statements are to be measured at fair value, but does not require additional use
of fair value beyond the requirements in other accounting principles.
|
(u)
|
Commitments and Contingencies: Commitments are recognized when the Partnership has a present legal or constructive obligation as a result of past
events and it is probable that an outflow of resources embodying economic benefits will likely be required to satisfy such obligation and a reliable estimate of the amount of such obligation can be made. Provisions are reviewed at each
balance sheet date and adjusted to reflect the present value of the expenditure expected to be required to settle the obligation. Contingent liabilities are not recognized in the consolidated financial statements but are disclosed unless
there is a remote possibility of an outflow of resources embodying economic benefits. Contingent assets are not recognized in the consolidated financial statements but are disclosed when an inflow of economic benefits is probable (Note 8).
|
|
(v)
|
Accounting for Financial Instruments: The principal financial assets of the Partnership consist of cash and cash equivalents, restricted cash,
amounts due from related parties and trade accounts receivable. The principal financial liabilities of the Partnership consist of trade and other accounts payable, accrued liabilities, long-term debt and amounts due to related parties. The
Partnership may also consider, from time to time, entering into interest rate swap agreements to manage its exposure to fluctuations of interest rate risk associated with its borrowings. Derivative financial instruments are generally used to
manage risk related to fluctuations of interest rates. ASC 815, "Derivatives and Hedging", requires all derivative contracts to be recorded at fair value, as determined in accordance with ASC 820, Fair Value Measurements and Disclosures (Note
6). The changes in fair value of a derivative contract are recognized in earnings unless specific hedging criteria are met. At the inception of a hedge relationship, the Partnership formally designates and documents the hedge relationship
with respect to hedge accounting, the risk management objective and the strategy undertaken for the hedge. The documentation includes identification of the hedging instrument, hedged item or transaction, the nature of the risk being hedged
and how the entity will assess the hedging instrument's effectiveness in offsetting exposure to changes in the hedged item's cash flows attributable to the hedged risk. A cash flow hedge is the mitigation of risk exposure resulting from
variability in cash flows attributable to a particular risk associated with a recognized asset or liability or a highly probable forecasted transaction that could affect profit or loss. Such hedges are expected to be highly effective in
achieving offsetting changes in cash flows and are assessed on an ongoing basis to determine whether they actually have been highly effective throughout the financial reporting periods for which they were designated. All derivatives are
recorded on the balance sheet as assets or liabilities and measured at fair value. For derivatives designated as cash flow hedges, the effective portion of the changes in fair value of the derivatives is recorded in "Accumulated Other
Comprehensive Income/ (Loss)" and subsequently recognized in earnings when the hedged items impact earnings.
|
|
(w)
|
Going concern: The Partnership's policy is in accordance
with ASU No. 2014-15, "Presentation of Financial Statements - Going Concern", issued in August 2014 by the FASB. ASU 2014-15 provides U.S. GAAP guidance on management's responsibility in evaluating whether there is substantial doubt about a
entity's ability to continue as a going concern and on related required footnote disclosures. For each reporting period, management is required to evaluate whether there are conditions or events that raise substantial doubt about a company's
ability to continue as a going concern within one year from the date the consolidated financial statements are issued.
|
i) |
In June 2016, the FASB issued ASU 2016-13- Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 amended guidance on reporting credit losses for assets held at amortized
cost basis and available for sale debt securities. For public entities, the amendments of this Update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early
application is permitted. Furthermore, in November 2018, the FASB issued ASU 2018-19, "Codification Improvements to Topic 326, Financial Instruments—Credit Losses". The amendments clarify that receivables arising from operating leases are
not within the scope of Subtopic 326-20. Instead, impairment of receivables arising from operating leases should be accounted for in accordance with Topic 842, Leases. In addition, in April 2019, the FASB issued ASU 2019-04, "Codification
Improvements to Topic 326, Financial Instruments—Credit Losses, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825 Financial Instruments", the amendments of which clarify the modification of accounting
for available for sale debt securities excluding applicable accrued interest, which must be individually assessed for credit losses when fair value is less than the amortized cost basis. In May 2019, the FASB issued ASU 2019-05,
"Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825 Financial Instruments", the amendments of which provide entities that
have certain instruments within the scope of Subtopic 326-20, Financial Instruments—Credit Losses—Measured at Amortized Cost, with an option to irrevocably elect the fair value option in Subtopic 825-10, Financial Instruments—Overall,
applied on an instrument-by-instrument basis for eligible instruments, upon adoption of Topic 326. The fair value option election does not apply to held-to-maturity debt securities. An entity that elects the fair value option should
subsequently apply the guidance in Subtopics 820-10, Fair Value Measurement—Overall, and 825-10. The effective date and transition requirements for the amendments in these Updates are the same as the effective dates and transition
requirements in Update 2016-13, as amended by these Updates. Based on its preliminary assessment and considering that the Partnership's trade accounts receivable relates mainly to time charter revenues whose collectability is evaluated in
accordance with ASC 842 Leases, the Partnership's Management does not expect to have a material impact from the adoption of the new accounting standard on its consolidated financial statements and related disclosures.
|
ii) |
In August 2018, the FASB issued ASU No. 2018-13, "Fair Value Measurement (Topic 820 Disclosure Framework: Changes to the Disclosure Requirements for Fair Value Measurement", which changes the disclosure requirements for fair value
measurements by removing, adding, and modifying certain disclosures. This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within that year. Early adoption is permitted for any eliminated or
modified disclosures upon issuance of this ASU. The Partnership's Management has assessed the impact of this new accounting guidance and determined that the adoption of this ASU does not have a material impact on its consolidated
financial statements and related disclosures.
|
iii) |
In March 2020, the FASB issued ASU 2020-04, "Facilitation of the Effects of Reference Rate Reform on Financial Reporting (Topic 848)" which is intended to provide temporary optional expedients and exceptions to U.S. GAAP guidance on
contracts, hedge accounting and other transactions affected by the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. This ASU is effective for all
entities beginning on March 12, 2020 through December 31, 2022. The Partnership's Management is currently evaluating the impact this guidance may have on its consolidated financial statements and related disclosures.
|
Years ended
December 31,
|
||||||||||||
2019
|
2018
|
2017
|
||||||||||
Included in voyage expenses – related party
|
||||||||||||
Charter hire commissions (a)
|
$
|
1,631
|
$
|
1,654
|
$
|
1,830
|
||||||
Included in general and administrative expenses – related party
|
||||||||||||
Executive services fee (d)
|
$
|
603
|
$
|
637
|
$
|
605
|
||||||
Administrative services fee (e)
|
$
|
120
|
$
|
120
|
$
|
120
|
||||||
Management fees-related party
|
||||||||||||
Management fees (a)
|
$
|
6,537
|
$
|
6,347
|
$
|
6,162
|
Year ended December 31,
|
||||||||
2019
|
2018
|
|||||||
Assets:
|
||||||||
Working capital advances granted to the Manager (a)
|
$
|
—
|
$
|
1,086
|
||||
Security deposits to Manager (a)
|
$
|
1,350
|
$
|
1,350
|
||||
Liabilities included in Due to related party:
|
||||||||
Working capital due to Manager (a)
|
$
|
1,198
|
$
|
—
|
||||
Executive service charges due to Manager (d)
|
$
|
148
|
$
|
154
|
||||
Administrative service charges due to Manager (e)
|
$
|
30
|
$
|
30
|
||||
Management fees due to Manager (a)
|
$
|
701
|
$
|
—
|
||||
Other Partnership expenses due to Manager
|
$
|
125
|
$
|
122
|
||||
Total liabilities due to related party, current
|
$
|
2,202
|
$
|
306
|
(i) |
a commission of 1.25% over charter-hire agreements arranged by the Manager; and
|
(ii) |
a lump sum new-building supervision fee of $700 for the services rendered by the Manager in respect of the construction of the vessel, if applicable, plus out of pocket expenses.
|
Vessel
Cost |
Accumulated
Depreciation |
Net Book
Value |
||||||||||
Balance December 31, 2017
|
$
|
1,167,500
|
$
|
(190,202
|
)
|
$
|
977,298
|
|||||
Other additions to vessels' cost
|
409
|
—
|
409
|
|||||||||
Depreciation
|
—
|
(30,330
|
)
|
(30,330
|
)
|
|||||||
Balance December 31, 2018
|
$
|
1,167,909
|
$
|
(220,532
|
)
|
$
|
947,377
|
|||||
Depreciation
|
—
|
(30,680
|
)
|
(30,680
|
)
|
|||||||
Balance December 31, 2019
|
$
|
1,167,909
|
$
|
(251,212
|
)
|
$
|
916,697
|
|||||
Year Ended December 31,
|
||||||||||
Debt instruments
|
Borrowers-Issuers
|
2019
|
2018
|
|||||||
$675 Million Credit Facility
|
Fareastern Shipping Limited, Pegasus Shipholding S.A., Lance Shipping S.A., Seacrown Maritime Ltd., Navajo Marine Limited, Solana Holding Ltd.
|
663,000
|
—
|
|||||||
$480 Million Term Loan B
|
Arctic LNG and Dynagas Finance LLC
|
—
|
472,800
|
|||||||
$250 Million 2019 Notes
|
Dynagas Partners and Dynagas Finance
|
—
|
250,000
|
|||||||
Total debt
|
$
|
663,000
|
$
|
722,800
|
||||||
Less deferred financing fees
|
(9,846)
|
(9,984)
|
||||||||
Total debt, net of deferred finance costs
|
$
|
653,154
|
$
|
712,816
|
||||||
Less current portion, net of deferred financing fees
|
$
|
(45,482)
|
$
|
(251,754)
|
||||||
Long-term debt, net of current portion and deferred financing fees
|
$
|
607,672
|
$
|
461,062
|
|
• |
meet a specified minimum ratio of Cash and Cash Equivalents to Total Liabilities;
|
|
• |
meet a specified maximum ratio of Total Liabilities to the Market Value Adjusted Total Assets; and
|
|
• |
maintain a minimum liquidity of $50.0 million in a restricted Cash Collateral Account.
|
Year ending December 31,
|
Amount
|
|||
2020
|
$
|
48,000
|
||
2021
|
48,000
|
|||
2022
|
48,000
|
|||
2023
|
48,000
|
|||
2024
|
471,000
|
|||
Total long-term debt
|
$
|
663,000
|
|
• |
Cash and cash equivalents, trade accounts receivable, amounts due from/to related parties and trade accounts payable: The carrying values reported in the accompanying consolidated balance sheets
for those financial instruments (except for the fair value of non-current portion of amounts due from related party) are considered Level 1 items as they represent liquid assets and liabilities with short-term maturities and
are reasonable estimates of their fair values. The carrying value of these instruments is separately reflected in the accompanying consolidated balance sheets. The fair value of the non-current portion of the amounts due from related
parties, determined through Level 3 inputs of the fair value hierarchy by discounting future cash flows using the Partnership's estimated cost of capital, is $1,278 as of December 31, 2019, compared to its carrying value of $1,350 as of
the same date.
|
|
• |
Long-term debt: The $675 Million Credit Facility discussed in Note 5, has an approximate recorded value due to the variable interest rate payable and is thus considered a Level 2 item in
accordance with the fair value hierarchy as LIBOR rates are observable at commonly quoted intervals for the full terms of the loans.
|
|
• |
Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
|
|
• |
Level 2: Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not
active or other inputs that are observable or can be corroborated by observable market data; and
|
|
• |
Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the determination of the fair value of the assets or liabilities.
|
Year ending December 31,
|
Amount
|
|||
2020
|
125,783
|
|||
2021
|
114,794
|
|||
2022
|
103,824
|
|||
2023
|
103,824
|
|||
2024
|
103,935
|
|||
2025 and thereafter
|
550,541
|
|||
Total
|
$
|
1,102,701
|
Total Quarterly
Distribution Target Amount |
Unitholders
|
General
Partner |
Holders
of IDRs |
|||||||||||||
Minimum Quarterly Distribution
|
|
$0.365
|
99.9
|
%
|
0.1
|
%
|
0.0
|
%
|
||||||||
First Target Distribution
|
up to $0.420
|
99.9
|
%
|
0.1
|
%
|
0.0
|
%
|
|||||||||
Second Target Distribution
|
above $0.420 up to $0.456
|
85.0
|
%
|
0.1
|
%
|
14.9
|
%
|
|||||||||
Third Target Distribution
|
Above $0.456 up to $0.548
|
75.0
|
%
|
0.1
|
%
|
24.9
|
%
|
|||||||||
Thereafter
|
above $0.548
|
50.0
|
%
|
0.1
|
%
|
49.9
|
%
|
Year ended December 31,
|
||||||||||||
2019
|
2018
|
2017
|
||||||||||
Partnership's Net income
|
$
|
3,613
|
$
|
3,613
|
$
|
17,339
|
||||||
Less:
|
||||||||||||
Net Income attributable to preferred unitholders
|
11,563
|
7,659
|
6,750
|
|||||||||
Net Income attributable to subordinated unitholders
|
—
|
—
|
1,208
|
|||||||||
General Partner's interest in Net Income
|
(8
|
)
|
(4
|
)
|
79
|
|||||||
Net income/(loss) attributable to common unitholders
|
$
|
(7,942
|
)
|
$
|
(4,042
|
)
|
$
|
9,302
|
||||
Weighted average number of common units outstanding, basic and diluted
|
35,490,000
|
35,490,000
|
34,545,740
|
|||||||||
Earnings/ (Losses) per common unit, basic and diluted
|
$
|
(0.22
|
)
|
$
|
(0.11
|
)
|
$
|
0.27
|
Year ended December 31,
|
||||||||||||
2019
|
2018
|
2017
|
||||||||||
Interest expense (Note 5)
|
$
|
46,638
|
$
|
46,884
|
$
|
39,775
|
||||||
Amortization of deferred financing fees
|
3,199
|
3,261
|
2,804
|
|||||||||
Write-off of deferred financing fees
|
7,497
|
—
|
2,583
|
|||||||||
Commitment fees (Note 5)
|
791
|
—
|
—
|
|||||||||
Other
|
466
|
345
|
1,119
|
|||||||||
Total
|
$
|
58,591
|
$
|
50,490
|
$
|
46,281
|
(a) |
Quarterly Series A Preferred unit cash distribution: On January 20, 2020, the Partnership's Board of Directors declared a cash distribution of $0.5625 per unit on its Series A Preferred Units
for the period from November 12, 2019 to February 11, 2020. The cash distribution was paid on February 12, 2020, to all Series A preferred unitholders of record as of February 5, 2020.
|
(b) |
Quarterly Series B Preferred unit cash distribution: On January 30, 2020, the Partnership's Board of Directors declared a cash distribution of $0.546875 per unit on its Series B Preferred
Units for the period from November 22, 2019 to February 21, 2020. The cash distribution was paid on February 24, 2020, to all Series B preferred unitholders of record as of February 17, 2020.
|
(c) |
COVID-19 outbreak: The outbreak of COVID-19, which originated in China in December 2019 and subsequently spread to most developed nations of the world, has resulted in the
implementation of numerous actions taken by governments and governmental agencies in an attempt to mitigate the spread of the virus. These measures have resulted in a significant reduction in global economic activity and extreme
volatility in the global financial markets. The reduction of economic activity has significantly reduced the global demand for oil, refined petroleum products and LNG. The Partnership expects that the impact of the COVID-19 virus and
the uncertainty in the supply of oil will continue to cause volatility in the commodity markets. Although to date there has not been any significant effect in the Partnership's operating activities due to COVID-19, the extent to which
COVID-19 will impact the Partnership's results of operation and financial condition will depend on future developments, which are highly uncertain and cannot be predicted, including among others, new information which may emerge
concerning the severity of the virus and the actions to contain or treat its impact. An estimate of the impact cannot therefore be made at this time.
|
|
1. |
Common units representing limited partnership interests (the “Common Units”);
|
|
2. |
9.00% Series A Cumulative Redeemable Preferred Units (the “Series A Preferred Units”); and
|
|
3. |
8.75% Series B Fixed to Floating Rate Cumulative Redeemable Perpetual Preferred Units (the “Series B Preferred Units”).
|
|
• |
senior to the Junior Securities (including our common units);
|
|
• |
on a parity with the Parity Securities; and
|
|
• |
junior to the Senior Securities.
|
|
• |
issue any Parity Securities or Senior Securities if the cumulative distributions payable on outstanding Series A Preferred Units are in arrears; or
|
|
• |
create or issue any Senior Securities.
|
|
• |
senior to the Junior Securities (including our common units);
|
|
• |
pari passu with the Parity Securities (including the Series A Preferred Units);
|
|
• |
junior to all of our indebtedness and other liabilities with respect to assets available to satisfy claims against us; and
|
|
• |
junior to the Senior Securities
|
|
• |
issue any Parity Securities if the cumulative distributions payable on outstanding Series B Preferred Units are in arrears; or
|
|
• |
create or issue any Senior Securities.
|
|
• |
the Three Month LIBOR Rate will be the rate (expressed as a percentage per year) for deposits in U.S. dollars having an index maturity of three months, in amounts of at least $1,000,000,
as such rate appears on “Reuters Page LIBOR01” at approximately 11:00 a.m. (London time) on the relevant Distribution Determination Date; or
|
|
• |
if no such rate appears on “Reuters Page LIBOR01” or if the “Reuters Page LIBOR01” is not available at approximately 11:00 a.m. (London time) on the relevant Distribution Determination
Date, then the calculation agent, after consultation with us, will select four nationally-recognized banks in the London interbank market and request that the principal London offices of those four selected banks provide the calculation
agent with their offered quotation for deposits in U.S. dollars for a period of three months, commencing on the first day of the applicable Distribution Period, to prime banks in the London interbank market at approximately 11:00 a.m.
(London time) on that Distribution Determination Date for the applicable Distribution Period. Offered quotations must be based on a principal amount equal to an amount that, in the calculation agent’s discretion, is representative of a
single transaction in U.S. dollars in the London interbank market at that time. If at least two quotations are provided, the Three-Month LIBOR Rate for such Distribution Period will be the arithmetic mean (rounded upward if necessary, to
the nearest 0.00001 of 1%) of those quotations. If fewer than two quotations are provided, the Three-Month LIBOR Rate for such Distribution Period will be the arithmetic mean (rounded upward if necessary, to the nearest 0.00001 of 1%) of
the rates quoted at approximately 11:00 a.m. (New York City time) on that Distribution Determination Date for such Distribution Period by three nationally-recognized banks in New York, New York selected by the calculation agent, for loans
in U.S. dollars to nationally-recognized European banks (as selected by the calculation agent), for a period of three months commencing on the first day of such Distribution Period. The rates quoted must be based on an amount that, the
calculation agent’s discretion, is representative of a single transaction in U.S. dollars in that market at that time. If no quotation is provided as described above, then the calculation agent, after consulting such sources as it deems
comparable to any of the foregoing quotations or display page, or any such source as it deems reasonable from which to estimate LIBOR or any of the foregoing lending rates, shall determine LIBOR for the second London Business Day
immediately preceding the first day of such Distribution Period in its sole discretion. If the calculation agent is unable or unwilling to determine LIBOR as provided in the immediately preceding sentence, the calculation agent will use a
substitute or successor base rate that it has determined in its sole discretion is most comparable to the Three-Month LIBOR Rate, provided that if the calculation agent determines there is an industry-accepted substitute or successor base
rate, then the calculation agent shall use such substitute or successor base rate. If the calculation agent has determined a substitute or successor base rate in accordance with the immediately preceding sentence, the calculation agent in
its sole discretion may determine what business day convention to use, the definition of business day, the distribution determination date to be used and any other relevant methodology for calculating such substitute or successor base
rate, including any adjustment factor needed to make such substitute or successor base rate comparable to the Three-Month LIBOR Rate, in a manner that is consistent with industry accepted practices for such substitute or successor base
rate.
|
|
||
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.
|
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.
|
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.
|
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.
|
|
|||
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.
|
|
Clause
|
Page
|
|
Section 1 - Interpretation
|
1
|
|
1
|
Definitions and interpretation
|
1
|
Section 2 - The Facility
|
26
|
|
2
|
The Facility
|
26
|
3
|
Purpose
|
28
|
4
|
Conditions of Utilisation
|
28
|
Section 3 - Utilisation
|
30
|
|
5
|
Utilisation
|
30
|
Section 4 - Repayment, Prepayment and Cancellation
|
32
|
|
6
|
Repayment
|
32
|
7
|
Illegality, prepayment and cancellation
|
33
|
8
|
Restrictions
|
36
|
Section 5 - Costs of Utilisation
|
38
|
|
9
|
Interest
|
38
|
10
|
Interest Periods
|
39
|
11
|
Changes to the calculation of interest
|
39
|
12
|
Fees
|
41
|
Section 6 - Additional Payment Obligations
|
42
|
|
13
|
Tax gross-up and indemnities
|
42
|
14
|
Increased costs
|
46
|
15
|
Other indemnities
|
47
|
16
|
Mitigation by the Lenders
|
51
|
17
|
Costs and expenses
|
51
|
Section 7 - Guarantee
|
54
|
|
18
|
Guarantee and indemnity
|
54
|
Section 8 - Representations, Undertakings and Events of Default
|
58
|
|
19
|
Representations
|
58
|
20
|
Information undertakings
|
67
|
21
|
Financial covenants
|
71
|
22
|
General undertakings
|
73
|
23
|
Dealings with Ship
|
78
|
24
|
Condition and operation of Ship
|
81
|
25
|
Insurance
|
84
|
26
|
Minimum security value
|
88
|
27
|
Chartering undertakings
|
90
|
28
|
Bank accounts
|
91
|
29
|
Business restrictions
|
94
|
30
|
Events of Default
|
98
|
Section 9 - Changes to Parties
|
104
|
|
31
|
Changes to the Lenders
|
104
|
Section 10 - The Finance Parties
|
108
|
|
32
|
Roles of Agent, Security Agent and Arranger
|
108
|
33
|
Trust and security matters
|
119
|
34
|
Enforcement of Transaction Security
|
123
|
35
|
Application of proceeds
|
124
|
36
|
Conduct of business by the Finance Parties
|
127
|
37
|
Sharing among the Finance Parties
|
127
|
Section 11 - Administration
|
130
|
|
38
|
Payment mechanics
|
130
|
39
|
Set-off
|
133
|
40
|
Notices
|
134
|
41
|
Calculations and certificates
|
136
|
42
|
Partial invalidity
|
136
|
43
|
Remedies and waivers
|
136
|
44
|
Amendments and grant of waivers
|
136
|
45
|
Confidentiality
|
143
|
46
|
Counterparts
|
148
|
47
|
Contractual recognition of bail-in
|
148
|
Section 12 - Governing Law and Enforcement
|
149
|
|
48
|
Governing law
|
149
|
49
|
Enforcement
|
149
|
Schedule 1 The original parties
|
150
|
|
Schedule 2 Ship information
|
161
|
|
Schedule 3 Conditions precedent
|
165
|
|
Schedule 4 Utilisation Request
|
171
|
|
Schedule 5 Selection Notice
|
172
|
|
Schedule 6 Form of Transfer Certificate
|
173
|
|
Schedule 7 Form of Compliance Certificate
|
176
|
|
Schedule 8 Forms of Notifiable Debt Purchase Transaction Notice
|
177
|
(1) |
THE ENTITIES listed in Schedule 1 (The original parties) as borrowers (the Borrowers);
|
(2) |
DYNAGAS LNG PARTNERS LP as parent (the Parent);
|
(3) |
THE ENTITIES listed in Schedule 1 (The original parties) (including the Parent) as guarantors (the Guarantors);
|
(4) |
CITIBANK, N.A., LONDON BRANCH, CREDIT SUISSE AG, KfW IPEX-BANK GmbH as mandated lead arrangers, as
co-ordinators, as underwriters and as bookrunners, DEUTSCHE BANK AG FILIALE DEUTSCHLANDGESCHÄFT and ALPHA BANK A.E. as mandated lead arrangers, AMSTERDAM TRADE BANK N.V. as lead arranger and E. SUN COMMERCIAL BANK, LTD. (INCORPORATED IN TAIWAN, WITH LIMITED LIABILITY), HONG KONG BRANCH as arranger (whether acting individually or together, the Arranger);
|
(5) |
THE FINANCIAL INSTITUTIONS listed in Schedule 1 (The original parties) as lenders (the Original Lenders);
|
(6) |
CITIBANK EUROPE PLC, UK BRANCH as agent of the other Finance Parties (the Agent); and
|
(7) |
CITIBANK, N.A., LONDON BRANCH as security agent and trustee for and on behalf of the other Finance Parties (the Security Agent).
|
1 |
Definitions and interpretation
|
1.1 |
Definitions
|
|
(a) |
a bank or financial institution which has a rating for its long-term unsecured and non credit-enhanced debt obligations of “A-” or higher by Standard & Poor’s Rating Services or Fitch Ratings Ltd or “Baa1” or higher by Moody’s
Investor Services Limited or a comparable rating from another internationally recognised credit rating agency; or
|
|
(b) |
any other bank or financial institution approved by the Majority Lenders.
|
|
(a) |
in relation to any Account (other than the Cash Collateral Account), Citibank, N.A., London Branch, acting through its office at Citigroup Centre, Canada Square, London E14 5LB, England; or
|
|
(b) |
in relation to the Cash Collateral Account, Credit Suisse AG, a company incorporated in Switzerland, having its registered office at Paradeplatz 8, 8001 Zurich, Switzerland, acting through its office at St. Alban-Graben 1-3, 4051
Basel, Switzerland,
|
|
(a) |
in relation to an EEA Member Country which has implemented, or which at any time implements, Article 55 of Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms, the
relevant implementing law or regulation as described in the EU Bail-In Legislation Schedule from time to time; and
|
|
(b) |
in relation to any other state, any analogous law or regulation from time to time which requires contractual recognition of any Write-down and Conversion Powers contained in that law or regulation.
|
|
(a) |
any law or regulation in force as at the date hereof implementing the Basel II Accord (including the relevant provisions of CRD IV and CRR) to the extent only that such law or regulation re-enacts and/or implements the requirements of
the Basel II Accord but excluding any provision of such law or regulation implementing the Basel III Accord; and
|
|
(b) |
any Basel II Approach adopted by a Finance Party or any of its Affiliates.
|
|
(a) |
the agreements on capital requirements, a leverage ratio and liquidity standards contained in “Basel III: A global regulatory framework for more resilient banks and banking systems”, “Basel III: International framework for liquidity
risk measurement, standards and monitoring” and “Guidance for national authorities operating the countercyclical capital buffer” published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or
restated;
|
|
(b) |
the rules for global systemically important banks contained in “Global systemically important banks: assessment methodology and the additional loss absorbency requirement – Rules text” published by the Basel Committee on Banking
Supervision in November 2011, as amended, supplemented or restated; and
|
|
(c) |
any further guidance or standards published by the Basel Committee on Banking Supervision relating to “Basel III” other than, in each such case, the agreements, rules, guidance and standards set out in “Basel III: Finalising the post
crisis reforms (including the relevant provisions of CRD IV and CRR)” published by the Basel Committee on Banking Supervision in December 2017, as amended, supplemented or restated.
|
|
(a) |
the interest which a Lender should have received for the period from the date of receipt of all or any part of its participation in the Loan or relevant part of it or Unpaid Sum to the last day of the current Interest Period in respect
of the Loan or relevant part of it or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period;
|
|
(b) |
the amount which that Lender would be able to obtain by placing an amount equal to the relevant principal amount or Unpaid Sum received by it on deposit with a leading bank for a period starting on the Business Day following receipt or
recovery and ending on the last day of that Interest Period.
|
|
(a) |
which is not a public holiday in Athens or Piraeus, Greece; and
|
|
(b) |
on which banks are open for general business in London, Frankfurt am Main, Zurich, Basel, Amsterdam and, in respect of a day on which a payment in, or purchase of, dollars is to be made under a Finance Document, also in New York.
|
|
(a) |
a Borrower ceases to be a direct wholly-owned Subsidiary of the Arctic LNG Guarantor; and/or
|
|
(b) |
the Dynagas Finance LLC Guarantor ceases to be a direct wholly-owned Subsidiary of the Arctic LNG Guarantor; and/or
|
|
(c) |
the Arctic LNG Guarantor ceases to be a direct wholly-owned Subsidiary of the Dynagas Equity Guarantor; and/or
|
|
(d) |
the Dynagas Equity Guarantor ceases to be a wholly-owned direct Subsidiary of the Dynagas Operating Guarantor; and/or
|
|
(e) |
any of the Dynagas Finance Guarantor, the Dynagas Operating GP Guarantor or the Dynagas Operating LP Guarantor ceases to be a wholly-owned direct Subsidiary of the Parent; and/or
|
|
(f) |
the Parent (i) ceases to own (legally and/or beneficially, directly and/or indirectly) 100% of total share capital, total common partnership interest or units or the total limited liability company
interest (as the case may be) in any other Guarantor or any Borrower; and/or (ii) ceases to have the ability to control, either directly or indirectly, the affairs or composition of the majority of the board of directors or board of
managers or single manager or sole member (as the case may be) of the any other Guarantor or any Borrower; and/or
|
|
(g) |
the Sponsor ceases to own directly (legally and/or beneficially) at least 30% of the total common partnership interest or units in the Parent; and/or
|
|
(h) |
any person or persons acting in consent (other than Permitted Holders) (i) own (legally and/or beneficially, directly and/or indirectly) a higher percentage of the total common partnership interest or units in the Parent than the
Sponsor; and/or (ii) have the ability to control, either directly or indirectly, the affairs or composition of the majority of the board of directors or the board of managers of the Parent; and/or
|
|
(i) |
the Sponsor ceases to control, directly or indirectly, the affairs or the composition of the board of directors or the board of managers (or equivalent, as applicable) of the Parent; and/or
|
|
(j) |
Mr. George Prokopiou ceases to be a member of the board of managers and/or the Chairman of the board of managers of the Parent; and/or
|
|
(k) |
the General Partner ceases to be the general partner of the Parent; and/or
|
|
(l) |
Permitted Holders (i) cease to control, directly or indirectly, the affairs or the composition of the board of directors or board of managers (or equivalent, as applicable) of the General Partner or the Sponsor or the Manager; and/or
(ii) cease to own (legally and/or beneficially, directly and/or indirectly) 100% of the total limited liability company interest of the General Partner and/or 100% of the total share capital and/or the total voting share capital of any of
the Sponsor or the Manager; and/or
|
|
(m) |
the Dynagas Operating GP Guarantor ceases to be the general partner of the Dynagas Operating LP Guarantor.
|
|
(a) |
in relation to an Original Lender, the amount set opposite its name under the heading “Commitment” in Schedule 1 (The original parties) and the amount of any other Commitment assigned to it
under this Agreement; and
|
|
(b) |
in relation to any other Lender, the amount of any Commitment assigned to it under this Agreement,
|
|
(a) |
any Group Member or any of its advisers; or
|
|
(b) |
another Finance Party, if the information was obtained by that Finance Party directly or indirectly from any Group Member or any of its advisers,
|
|
(i) |
information that:
|
|
(A) |
is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of clause 45 (Confidentiality); or
|
|
(B) |
is identified in writing at the time of delivery as non-confidential by any Group Member or any of its advisers; or
|
|
(C) |
is known by that Finance Party before the date the information is disclosed to it in accordance with paragraphs (a) or (b) above or is lawfully obtained by that Finance Party after that date, from a source which is, as far as that
Finance Party is aware, unconnected with the Group and which, in either case, as far as that Finance Party is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality; and
|
|
(ii) |
any Funding Rate.
|
|
(a) |
purchases by way of assignment or transfer;
|
|
(b) |
enters into any sub-participation in respect of; or
|
|
(c) |
enters into any other agreement or arrangement having an economic effect substantially similar to a sub-participation in respect of,
|
|
(a) |
which has failed to make its participation in the Loan available (or has notified the Agent or a Borrower (which has notified the Agent) that it will not make its participation in the Loan available) by the Utilisation Date in
accordance with clause 5.4 (Lenders’ participation);
|
|
(b) |
which has otherwise rescinded or repudiated a Finance Document; or
|
|
(c) |
with respect to which an Insolvency Event has occurred and is continuing,
|
|
(i) |
its failure to pay is caused by:
|
|
(A) |
administrative or technical error; or
|
|
(B) |
a Disruption Event,
|
|
(ii) |
the Lender is disputing in good faith whether it is contractually obliged to make the payment in question.
|
|
(a) |
a Total Loss of a Mortgaged Ship, the applicable Total Loss Repayment Date; or
|
|
(b) |
a sale of a Mortgaged Ship by the relevant Owner, the date upon which such sale is completed by the transfer of title to the purchaser in exchange for payment of all or part of the relevant purchase price (and upon or immediately prior
to such completion).
|
|
(a) |
a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Facility (or otherwise in order for the
transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties; or
|
|
(b) |
the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party preventing that, or any other Party:
|
|
(i) |
from performing its payment obligations under the Finance Documents; or
|
|
(ii) |
from communicating with other Parties in accordance with the terms of the Finance Documents,
|
|
(a) |
enforcement, clean-up, removal or other governmental or regulatory action or orders or claims instituted or made pursuant to any Environmental Laws or resulting from a Spill; or
|
|
(b) |
any claim made by any other person relating to a Spill.
|
|
(a) |
any Fleet Vessel or its owner, operator or manager may be liable for Environmental Claims arising from the Spill (other than Environmental Claims arising and fully satisfied before the date of this Agreement); and/or
|
|
(b) |
any Fleet Vessel may be arrested or attached in connection with any such Environmental Claim.
|
|
(a) |
in respect of a Lender, the office or offices notified by that Lender to the Agent in writing on or before the date it becomes a Lender (or, following that date, by not less than five Business Days’ written notice) as the office or
offices through which it will perform its obligations under this Agreement; or
|
|
(b) |
in respect of any other Finance Party, the office in the jurisdiction in which it is resident for tax purposes.
|
|
(a) |
sections 1471 to 1474 of the Code or any associated regulations;
|
|
(b) |
any treaty, law or a regulation of any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of any law or regulation referred
to in paragraph (a) above; or
|
|
(c) |
any agreement pursuant to the implementation of any treaty, law or regulation referred to in paragraphs (a) or (b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other
jurisdiction.
|
|
(a) |
in relation to a “withholdable payment” described in section 1473(1)(A)(i) of the Code (which relates to payments of interest and certain other payments from sources within the US), 1 July 2014; or
|
|
(b) |
in relation to a “passthru payment” described in section 1471(d)(7) of the Code not falling within paragraph (a) above, the first date from which such payment may become subject to a deduction or withholding required by FATCA.
|
|
(a) |
moneys borrowed and debit balances at banks or other financial institutions;
|
|
(b) |
any amount raised by acceptance under any acceptance credit or bill discounting facility (or dematerialised equivalent);
|
|
(c) |
any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;
|
|
(d) |
the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with GAAP, be treated as a finance or capital lease or as a balance sheet liability;
|
|
(e) |
receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);
|
|
(f) |
any Treasury Transaction (and, when calculating the value of that Treasury Transaction, only the marked to market value (or, if any actual amount is due as a result of the termination or close-out of that Treasury Transaction, that
amount) shall be taken into account);
|
|
(g) |
any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution;
|
|
(h) |
any amount raised by the issue of shares which are redeemable (other than at the option of the issuer) before the Final Repayment Date or are otherwise classified as borrowings under GAAP);
|
|
(i) |
any amount of any liability under an advance or deferred purchase agreement if (i) one of the primary reasons behind entering into the agreement is to raise finance or to finance the acquisition or construction of the asset or service
in question or (ii) the agreement is in respect of the supply of assets or services and payment is due more than 180 days after the date of supply;
|
|
(j) |
any amount raised under any other transaction (including any forward sale or purchase, sale and sale back or sale and leaseback agreement) of a type not referred to in any other paragraph of this definition) having the commercial
effect of a borrowing or otherwise classified as borrowings under GAAP; and
|
|
(k) |
the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (i) above.
|
|
(a) |
it has failed to make (or has notified a Party that it will not make) a payment required to be made by it under the Finance Documents by the due date for payment;
|
|
(b) |
the Agent otherwise rescinds or repudiates a Finance Document;
|
|
(c) |
(if the Agent is also a Lender) it is a Defaulting Lender under paragraphs (a) or (b) of the definition of Defaulting Lender; or
|
|
(d) |
an Insolvency Event has occurred and is continuing with respect to the Agent;
|
|
(i) |
its failure to pay is caused by:
|
|
(A) |
administrative or technical error; or
|
|
(B) |
a Disruption Event,
|
|
(ii) |
the Agent is disputing in good faith whether it is contractually obliged to make the payment in question.
|
|
(a) |
each Finance Party, each Receiver, any Delegate and any attorney, agent or other person appointed by them under the Finance Documents;
|
|
(b) |
each Affiliate of each Finance Party, each Receiver and each Delegate; and
|
|
(c) |
any officers, directors, employees, advisers, representatives or agents of any Finance Party, any Receiver or any Delegate.
|
|
(a) |
is dissolved (other than pursuant to a consolidation, amalgamation or merger);
|
|
(b) |
becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due;
|
|
(c) |
makes a general assignment, arrangement or composition with or for the benefit of its creditors;
|
|
(d) |
institutes or has instituted against it, by a regulator, supervisor or any similar official with primary insolvency, rehabilitative or regulatory jurisdiction over it in the jurisdiction of its incorporation or organisation or the
jurisdiction of its head or home office, a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors’ rights, or a petition is presented
for its winding-up or liquidation by it or such regulator, supervisor or similar official;
|
|
(e) |
has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors’ rights, or a petition is presented for its
winding-up or liquidation, and, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition is instituted or presented by a person or entity not described in paragraph (d) above and:
|
|
(i) |
results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up or liquidation; or
|
|
(ii) |
is not dismissed, discharged, stayed or restrained in each case within 30 days of the institution or presentation thereof;
|
|
(f) |
has exercised in respect of it one or more of the stabilisation powers pursuant to Part 1 of the Banking Act 2009 and/or has instituted against it a bank insolvency proceeding pursuant to Part 2 of the Banking Act 2009 or a bank
administration proceeding pursuant to Part 3 of the Banking Act 2009;
|
|
(g) |
has a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger);
|
|
(h) |
seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets (other than, for so long as
it is required by law or regulation not to be publicly disclosed, any such appointment which is to be made, or is made, by a person or entity described in paragraph (d) above);
|
|
(i) |
has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other enforcement action or legal process levied, enforced, taken or sued on or against all or
substantially all its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within 30 days thereafter;
|
|
(j) |
causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in paragraphs (a) to (i) above; or
|
|
(k) |
takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts.
|
|
(a) |
all policies and contracts of insurance; and
|
|
(b) |
all entries in a protection and indemnity or war risks or other mutual insurance association,
|
|
(a) |
the applicable Screen Rate for the longest period (for which that Screen Rate is available) which is less than the relevant Interest Period; and
|
|
(b) |
the applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds the relevant Interest Period,
|
|
(a) |
the principle that equitable remedies may be granted or refused at the discretion of a court and the limitation of enforcement by laws relating to insolvency, reorganisation and other laws generally affecting the rights of creditors;
|
|
(b) |
the time barring of claims under the Limitation Act 1980 and the Foreign Limitation Periods Act 1984, the possibility that an undertaking to assume liability for, or indemnify a person against, non-payment of UK stamp duty may be void
and defences of set-off or counterclaim; and
|
|
(c) |
similar principles, rights and defences under the laws of any Relevant Jurisdiction.
|
|
(a) |
any Original Lender; and
|
|
(b) |
any bank, financial institution, trust, fund or other entity which has become a Party as a “Lender” in accordance with clause 31 (Changes to the Lenders),
|
|
(a) |
the applicable Screen Rate as at 11:00 a.m. on the relevant Quotation Day for a period equal in length to the Interest Period of the Loan or relevant part of it or Unpaid Sum; or
|
|
(b) |
as otherwise determined pursuant to clause 11.1 (Unavailability of Screen Rate),
|
|
(a) |
the business, operations, property, condition (financial or otherwise), performance or prospects of any Obligor or of the Group taken as a whole; or
|
|
(b) |
the ability of an Obligor to perform its obligations under any of the Finance Documents; or
|
|
(c) |
the legality, validity or enforceability of, or the effectiveness or ranking of any Security Interest granted or purporting to be granted pursuant to any of, the Finance Documents or any of the rights or remedies of any Finance Party
under any of the Finance Documents.
|
|
(a) |
(subject to paragraph (c) below) if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in the calendar month in which that period is to end (if there is one) or on the immediately
preceding Business Day (if there is not);
|
|
(b) |
if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month; and
|
|
(c) |
if an Interest Period begins on the last Business Day of a calendar month, that Interest Period shall end on the last Business Day in the calendar month in which that Interest Period is to end.
|
|
(a) |
the audited consolidated financial statements of the Group for its financial year ended on 31 December 2018; and
|
|
(b) |
the unaudited consolidated financial statements of the Arctic LNG Guarantor for its financial year ended on 31 December 2018.
|
|
(a) |
the Mortgages over each of the Ships;
|
|
(b) |
the Deeds of Covenant in relation to each of the Ships in respect of which the Mortgage is in account current form;
|
|
(c) |
the General Assignments in relation to each of the Ships in respect of which the Mortgage is in preferred form;
|
|
(d) |
the Charter Assignment in relation to each Ship’s Charter Documents;
|
|
(e) |
the Account Security in relation to each Account;
|
|
(f) |
the Management Agreement Assignment in relation to each Management Agreement for each Ship;
|
|
(g) |
a Manager’s Undertaking by each Manager of each Ship; and
|
|
(h) |
a Quiet Enjoyment Agreement for each of Ship E and Ship F duly executed by the relevant Owner, the Security Agent and the relevant Charterer.
|
|
(a) |
unless a Default is continuing, any ship repairer’s or outfitter’s possessory lien in respect of the Ship for an amount not exceeding the Major Casualty Amount for such Ship;
|
|
(b) |
any lien on the Ship for master’s, officer’s or crew’s wages outstanding in the ordinary course of its trading; and
|
|
(c) |
any lien on the Ship for salvage.
|
|
(a) |
granted by the Finance Documents; or
|
|
(b) |
a Permitted Maritime Lien; or
|
|
(c) |
approved by the Majority Lenders.
|
|
(a) |
its Original Jurisdiction;
|
|
(b) |
any jurisdiction where any Charged Property owned by it is situated;
|
|
(c) |
any jurisdiction where it conducts its business; and
|
|
(d) |
any jurisdiction whose laws govern the perfection of any of the Security Documents entered into by it.
|
|
(a) |
the First Repayment Date;
|
|
(b) |
each of the dates falling at intervals of 3 Months thereafter up to but not including the Final Repayment Date; and
|
|
(c) |
the Final Repayment Date.
|
|
(a) |
the Original Security Documents; and
|
|
(b) |
any other document as may be executed to guarantee and/or secure any amounts owing to the Finance Parties under this Agreement or any other Finance Document.
|
|
(a) |
the Transaction Security expressed to be granted in favour of the Security Agent as trustee for the Finance Parties and all proceeds of that Transaction Security;
|
|
(b) |
all obligations expressed to be undertaken by any Obligor to pay amounts in respect of the Secured Obligations to the Security Agent as trustee for the Finance Parties and secured by the Transaction Security together with all
representations and warranties expressed to be given by an Obligor in favour of the Security Agent as trustee for the Finance Parties; and
|
|
(c) |
any other amounts or property, whether rights, entitlements, choses in action or otherwise, actual or contingent, which the Security Agent is required by the terms of the Finance Documents to hold as trustee on trust for the Finance
Parties.
|
|
(a) |
directly or indirectly controlled by such person; or
|
|
(b) |
of whose dividends or distributions on ordinary voting share capital, partnership interest or units or limited liability company interests (as the case may be) such person is beneficially entitled to receive more than 50% per cent,
|
|
(a) |
actual, constructive, compromised, agreed or arranged total loss; or
|
|
(b) |
requisition for title, confiscation or other compulsory acquisition by a government entity; or
|
|
(c) |
hijacking, piracy, theft, condemnation, capture, seizure, arrest or detention for more than 30 days.
|
|
(a) |
in the case of an actual total loss, the date it happened or, if such date is not known, the date on which the vessel was last reported;
|
|
(b) |
in the case of a constructive, compromised, agreed or arranged total loss, the earliest of:
|
|
(i) |
the date notice of abandonment of the vessel is given to its insurers; or
|
|
(ii) |
if the insurers do not admit such a claim, the date later determined by a competent court of law to have been the date on which the total loss happened; or
|
|
(iii) |
the date upon which a binding agreement as to such compromised or arranged total loss has been entered into by the vessel’s insurers;
|
|
(c) |
in the case of a requisition for title, confiscation or compulsory acquisition, the date it happened; and
|
|
(d) |
in the case of hijacking, piracy, theft, condemnation, capture, seizure, arrest or detention, the date 30 days after the date upon which it happened.
|
|
(a) |
the date falling 120 days after its Total Loss Date; and
|
|
(b) |
the date upon which insurance proceeds or Requisition Compensation for such Total Loss are paid by insurers or the relevant government entity.
|
|
(a) |
each of the Finance Documents; and
|
|
(b) |
each Charter Document.
|
|
(a) |
the proposed Transfer Date specified in the Transfer Certificate; and
|
|
(b) |
the date on which the Agent executes the Transfer Certificate.
|
|
(a) |
a Borrower if it is resident for tax purposes in the US; or
|
|
(b) |
an Obligor some or all of whose payments under the Finance Documents are from sources within the US for US federal income tax purposes.
|
|
(a) |
any tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112); and
|
|
(b) |
any other tax of a similar nature, whether imposed in a member state of the European Union in substitution for, or levied in addition to, such tax referred to in paragraph (a) above, or imposed elsewhere.
|
|
(a) |
in relation to any Bail-In Legislation described in the EU Bail-In Legislation Schedule from time to time, the powers described as such in relation to that Bail-In Legislation in the EU Bail-In Legislation Schedule; and
|
|
(b) |
in relation to any other applicable Bail-In Legislation:
|
|
(i) |
any powers under that Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution,
to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person
or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation
that are related to or ancillary to any of those powers; and
|
|
(ii) |
any similar or analogous powers under that Bail-In Legislation.
|
1.2 |
Construction
|
|
(a) |
Unless a contrary indication appears, any reference in any of the Finance Documents to:
|
|
(i) |
Sections, clauses and Schedules are to be construed as references to the Sections and clauses of, and the Schedules to, the relevant Finance Document and references to a Finance Document include its Schedules;
|
|
(ii) |
a Finance Document or any other agreement or instrument is a reference to that Finance Document or other agreement or instrument as it may from time to time be amended, restated, novated or
replaced, however fundamentally;
|
|
(iii) |
words importing the plural shall include the singular and vice versa;
|
|
(iv) |
a time of day is to London time;
|
|
(v) |
any person includes its successors in title, permitted assignees or transferees;
|
|
(vi) |
the knowledge, awareness and/or beliefs (and similar expressions) of any Obligor shall be construed so as to mean the knowledge, awareness and beliefs of the directors, managers and officers of such Obligor, having made due and careful
enquiry;
|
|
(vii) |
two or more persons are acting in concert if pursuant to an agreement or understanding (whether formal or informal) they actively co-operate, through the acquisition (directly or indirectly) of
shares, partnership interest or units or limited liability company interests in an entity by any of them, either directly or indirectly, to obtain or consolidate control of that entity;
|
|
(viii) |
a document in agreed form means:
|
|
(A) |
where a Finance Document has already been executed by all of the relevant parties to it, such Finance Document in its executed form; and
|
|
(B) |
prior to the execution of a Finance Document, the form of such Finance Document separately agreed in writing between the Agent (acting on the instructions of all the Lenders) and the Borrowers as the form in which that Finance Document
is to be executed or another form approved at the request of the Borrowers or, if not so agreed or approved, is in the form specified by the Agent (acting on the instructions of all the Lenders);
|
|
(ix) |
approved by the Majority Lenders or approved by the Lenders means approved in writing by the Agent acting on the instructions of the Majority Lenders or,
as the case may be, all of the Lenders (on such conditions as they may respectively impose) and otherwise approved means approved in writing by the Agent (acting on the instructions of the Majority
Lenders) (on such conditions as the Majority Lenders may impose) and approval and approve shall be construed accordingly;
|
|
(x) |
assets includes present and future properties, revenues and rights of every description;
|
|
(xi) |
charter commitment means, in relation to a vessel, any charter or contract for the use, employment or operation of that vessel or the carriage of people and/or cargo or the provision of services
by or from it and includes any agreement for pooling or sharing income derived from any such charter or contract;
|
|
(xii) |
control of an entity means:
|
|
(A) |
the power (whether by way of ownership of shares, partnership interest or units or limited liability company interest, proxy, contract, agency or otherwise, directly or indirectly) to:
|
|
(1) |
cast, or control the casting of, more than 50% of the maximum number of votes that might be cast at a general meeting (or equivalent) of that entity; or
|
|
(2) |
appoint or remove all, or the majority, of the directors, managers or other equivalent officers of that entity; or
|
|
(3) |
give directions with respect to the operating and financial policies of that entity with which the directors, managers or other equivalent officers of that entity are obliged to comply; and/or
|
|
(B) |
the holding beneficially of more than 50% of the issued share capital, partnership interest or units or limited liability company interest of that entity, as the case may be (excluding any part of that issued share capital, partnership
interest or units or limited liability company interest, respectively, that carries no right to participate beyond a specified amount in a distribution of either profits or capital) (and, for this purpose, a Security Interest over share
capital, partnership interest or units or limited liability company interest, respectively, shall be disregarded in determining the beneficial ownership of such share capital, partnership interest or units or limited liability company
interest),
|
|
(xiii) |
the term disposal or dispose means a sale, transfer or other disposal (including by way of lease or loan but not including by way of loan of money) by a
person of all or part of its assets, whether by one transaction or a series of transactions and whether at the same time or over a period of time, but not the creation of a Security Interest;
|
|
(xiv) |
the equivalent of an amount specified in a particular currency (the specified currency amount) shall be construed as a reference to the amount of the
other relevant currency which can be purchased with the specified currency amount in the London foreign exchange market at or about 11 a.m. on the date the calculation falls to be made for spot delivery, as conclusively determined by the
Agent (with the relevant exchange rate of any such purchase being the Agent’s spot rate of exchange);
|
|
(xv) |
a government entity means any government, state or agency of a state;
|
|
(xvi) |
a group of Lenders or a group of Finance Parties includes all the Lenders or (as the case may be) all the Finance Parties;
|
|
(xvii) |
a guarantee means (other than in clause 18 (Guarantee and indemnity)) any guarantee, letter of credit, bond, indemnity or similar assurance against
loss, or any obligation, direct or indirect, actual or contingent, to purchase or assume any indebtedness of any person or to make an investment in or loan to any person or to purchase assets of any person where, in each case, such
obligation is assumed in order to maintain or assist the ability of such person to meet its indebtedness;
|
|
(xviii) |
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;
|
|
(xix) |
an obligation means any duty, obligation or liability of any kind;
|
|
(xx) |
something being in the ordinary course of business of a person means something that is in the ordinary course of that person’s current day-to-day operational business (and not merely anything
which that person is entitled to do under its Constitutional Documents);
|
|
(xxi) |
pay, prepay or repay in clause 29 (Business restrictions) includes by
way of set-off, combination of accounts or otherwise;
|
|
(xxii) |
a person includes any individual, firm, company, corporation, government entity or any association, trust, joint venture, consortium or partnership or other entity (whether or not having
separate legal personality);
|
|
(xxiii) |
a regulation includes any regulation, rule, official directive, request or guideline (whether or not having the force of law) of any governmental, intergovernmental or supranational body,
agency, department or regulatory, self-regulatory or other authority or organisation and, in relation to any Lender, includes (without limitation) any Basel II Regulation or Basel III Regulation applicable to that Lender;
|
|
(xxiv) |
right means any right, privilege, power or remedy, any proprietary interest in any asset and any other interest or remedy of any kind, whether actual or contingent, present or future, arising
under contract or law, or in equity;
|
|
(xxv) |
trustee, fiduciary and fiduciary duty has in each case the meaning given to such term under applicable law;
|
|
(xxvi) |
(i) the liquidation, winding up, dissolution, or administration of
person or (ii) a receiver or administrative receiver or administrator in the context of insolvency proceedings or
security enforcement actions in respect of a person shall be construed so as to include any equivalent or analogous proceedings or any equivalent and analogous person or appointee (respectively) under the law of the jurisdiction in which
such person is established, formed or incorporated or any jurisdiction in which such person carries on business including (in respect of proceedings) the seeking or occurrences of liquidation, winding-up, reorganisation, dissolution,
administration, arrangement, adjustment, protection or relief of debtors; and
|
|
(xxvii) |
a provision of law is a reference to that provision as amended or re-enacted.
|
|
(b) |
The determination of the extent to which a rate is “for a period equal in length” to an Interest Period shall disregard any inconsistency arising from the last day of that Interest Period being
determined pursuant to the terms of this Agreement.
|
|
(c) |
Where in this Agreement a provision includes a monetary reference level in one currency, unless a contrary indication appears, such reference level is intended to apply equally to its equivalent in other currencies as of the relevant
time for the purposes of applying such reference level to any other currencies.
|
|
(d) |
Section, clause and Schedule headings are for ease of reference only.
|
|
(e) |
Unless a contrary indication appears, a term used in any other Finance Document or in any notice given under or in connection with any Finance Document has the same meaning in that Finance Document or notice as in this Agreement.
|
|
(f) |
A Default (other than an Event of Default) is continuing if it has not been remedied or waived and an Event of Default is continuing if it has not been waived.
|
|
(g) |
Unless a contrary indication appears, in the event of any inconsistency between the terms of this Agreement and the terms of any other Finance Document when dealing with the same or similar subject matter, the terms of this Agreement
shall prevail.
|
1.3 |
Currency symbols and definitions
|
1.4 |
Third party rights
|
|
(a) |
Unless expressly provided to the contrary in a Finance Document, a provision expressed to be for the benefit of a Finance Party or another Indemnified Person, a person who is not a party to a
Finance Document has no right under the Contracts (Rights of Third Parties) Act 1999 (the Third Parties Act) to enforce or to enjoy the benefit of any term of the relevant Finance Document.
|
|
(b) |
Any Finance Document may be rescinded or varied by the parties to it without the consent of any person who is not a party to it (unless otherwise provided by this Agreement).
|
|
(c) |
An Indemnified Person who is not a party to a Finance Document may only enforce its rights under that Finance Document through a Finance Party and if and to the extent and in such manner as the Finance Party may determine.
|
1.5 |
Finance Documents
|
1.6 |
Conflict of documents
|
2 |
The Facility
|
2.1 |
The Facility
|
2.2 |
Finance Parties’ rights and obligations
|
|
(a) |
The obligations of each Finance Party under the Finance Documents are several. Failure by a Finance Party to perform its obligations under the Finance Documents does not affect the obligations of any other Party under the Finance
Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents.
|
|
(b) |
The rights of each Finance Party under or in connection with the Finance Documents are separate and independent rights and any debt arising under the Finance Documents to a Finance Party from an Obligor is a separate and independent
debt in respect of which a Finance Party shall be entitled to enforce its rights in accordance with paragraph (c) below. The rights of each Finance Party include any debt owing to that Finance Party under the Finance Documents and, for
the avoidance of doubt, any part of the Loan or any other amount owed by an Obligor which relates to a Finance Party’s participation in the Facility or its role under a Finance Document (including any such amount payable to the Agent on
its behalf) is a debt owing to that Finance Party by that Obligor.
|
|
(c) |
A Finance Party may, except as specifically provided in the Finance Documents (including clause 36.2 (Finance Parties acting together)), separately enforce its rights under or in connection with
the Finance Documents.
|
2.3 |
Borrowers’ rights and obligations
|
|
(a) |
The obligations of each Borrower under this Agreement are joint and several. Failure by a Borrower to perform its obligations under this Agreement shall constitute a failure by all of the Borrowers.
|
|
(b) |
Each Borrower irrevocably and unconditionally jointly and severally with each other Borrower:
|
|
(i) |
agrees that it is responsible for the performance of the obligations of each other Borrower under this Agreement;
|
|
(ii) |
acknowledges and agrees that it is a principal and original debtor in respect of all amounts due from the Borrowers under this Agreement; and
|
|
(iii) |
agrees with each Finance Party that, if any obligation of another Borrower under this Agreement is or becomes unenforceable, invalid or illegal for any reason it will, as an independent and primary obligation, indemnify that Finance
Party immediately on demand against any and all Losses it incurs as a result of another Borrower not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by that other Borrower under
this Agreement. The amount payable under this indemnity shall be equal to the amount which that Finance Party would otherwise have been entitled to recover.
|
|
(c) |
The obligations of each Borrower under the Finance Documents shall continue until all amounts which may be or become payable by the Borrowers under or in connection with the Finance Documents have been irrevocably and unconditionally
paid or discharged in full, regardless of any intermediate payment or discharge in whole or in part.
|
|
(d) |
If any discharge, release or arrangement (whether in respect of the obligations of a Borrower or any security for those obligations or otherwise) is made by a Finance Party in whole or in part on the basis of any payment, security or
other disposition which is avoided or must be restored in insolvency, liquidation, administration or otherwise, without limitation, then the liability of the Borrowers under this Agreement will continue or be reinstated as if the
discharge, release or arrangement had not occurred.
|
|
(e) |
The obligations of each Borrower under the Finance Documents shall not be affected by an act, omission, matter or thing which, but for this clause (whether or not known to it or any Finance Party), would reduce, release or prejudice
any of its obligations under the Finance Documents including:
|
|
(i) |
any time, waiver or consent granted to, or composition with, any Obligor or other person;
|
|
(ii) |
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;
|
|
(iii) |
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;
|
|
(iv) |
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;
|
|
(v) |
any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of a Finance Document or any other document or security;
|
|
(vi) |
any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security; or
|
|
(vii) |
any insolvency or similar proceedings.
|
|
(f) |
Each Borrower waives any right it may have of first requiring any Finance Party (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from
that Borrower under any Finance Document. This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.
|
|
(g) |
Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably and unconditionally paid or discharged in full, each Finance Party (or any trustee or agent on its
behalf) may:
|
|
(i) |
refrain from applying or enforcing any other moneys, security or rights held or received by that Finance Party (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order
as it sees fit (whether against those amounts or otherwise) and no Borrower will be entitled to the benefit of the same; and
|
|
(ii) |
hold in an interest-bearing suspense account any money received from any Borrower or on account of any Borrower’s liability under any Finance Document.
|
|
(h) |
Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full and unless the Agent otherwise directs (on such terms as it may require), no Borrower
shall exercise any rights (including rights of set-off) which it may have by reason of performance by it of its obligations under the Finance Documents:
|
|
(i) |
to be indemnified by another Obligor; and/or
|
|
(ii) |
to claim any contribution from any other Obligor or any guarantor of any Obligor’s obligations under the Finance Documents; and/or
|
|
(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 guarantee or security taken pursuant to, or in connection with, the
Finance Documents by any Finance Party; and/or
|
|
(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 that Borrower is liable under this Agreement or any of the other Finance Documents; and/or
|
|
(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.
|
3 |
Purpose
|
3.1 |
Purpose
|
3.2 |
Refinancing
|
3.3 |
Monitoring
|
4 |
Conditions of Utilisation
|
4.1 |
Initial conditions precedent
|
4.2 |
Ship and security conditions precedent
|
4.3 |
Notice of satisfaction of conditions
|
4.4 |
Further conditions precedent
|
|
(a) |
on the date of the Utilisation Request and on the proposed Utilisation Date, no Default is continuing or would result from the proposed Utilisation;
|
|
(b) |
on the date of the Utilisation Request and on the proposed Utilisation Date, all of the representations set out in clause 19 (Representations) are true; and
|
|
(c) |
on the date of the Utilisation Request and on the proposed Utilisation Date, no Total Loss has occurred in respect of any Ship.
|
4.5 |
Waiver of conditions precedent
|
5 |
Utilisation
|
5.1 |
Delivery of a Utilisation Request
|
5.2 |
Completion of a Utilisation Request
|
|
(a) |
A Utilisation Request is irrevocable and will not be regarded as having been duly completed unless:
|
|
(i) |
the proposed Utilisation Date is a Business Day falling on or before the Last Availability Date;
|
|
(ii) |
the currency and amount of the Utilisation comply with clause 5.3 (Currency and amount);
|
|
(iii) |
the proposed Interest Period complies with clause 10 (Interest Periods); and
|
|
(iv) |
it identifies the purpose for the Utilisation and that purpose complies with clause 3 (Purpose).
|
|
(b) |
Only one Utilisation Request may be made.
|
|
(c) |
The Commitments may only be borrowed in a single Utilisation.
|
5.3 |
Currency and amount
|
|
(a) |
The currency specified in a Utilisation Request must be dollars.
|
|
(b) |
Only one Utilisation may be made.
|
|
(c) |
The total amount available and advanced under the Facility shall not exceed the lower of:
|
|
(i) |
the Total Commitments; and
|
|
(ii) |
the amount in dollars which is equal to the aggregate of:
|
|
(A) |
65% of the aggregate market values of all the Ships as determined pursuant to the valuations of the Ships obtained under Part 2 of Schedule 3 (Ship and security conditions precedent) and/or
clause 26.1 (Valuation of assets); plus
|
|
(B) |
Fifty million dollars ($50,000,000).
|
5.4 |
Lenders’ participation
|
|
(a) |
If the conditions set out in this Agreement have been met, each Lender shall make its participation in the Loan available by 11:00 am on the Utilisation Date through its Facility Office.
|
|
(b) |
The amount of each Lender’s participation in the Loan will be equal to the proportion borne by its Available Commitment to the Available Facility immediately prior to making the Loan.
|
|
(c) |
The Agent shall promptly notify each Lender of the amount of the Loan and the amount of its participation in the Loan, in each case on the relevant Quotation Day.
|
|
(d) |
The Agent shall pay all amounts received by it in respect of the Loan to the agent of the relevant lenders of the Existing Indebtedness or (in the case of an amount of $204,600,000) to the credit of the Cash Collateral Account to form
part of the Blocked Amount, in each case in accordance with the instructions contained in the Utilisation Request.
|
6 |
Repayment
|
6.1 |
Repayment
|
6.2 |
Scheduled repayment of Facility
|
|
(a) |
To the extent not previously reduced, the Loan shall be repaid by instalments on each Repayment Date by the amount specified in the table below (as revised by clause 6.3 (Adjustment of scheduled
repayments):
|
Repayment Date
|
Amount ($)
|
First
|
12,000,000
|
Second
|
12,000,000
|
Third
|
12,000,000
|
Fourth
|
12,000,000
|
Fifth
|
12,000,000
|
Sixth
|
12,000,000
|
Seventh
|
12,000,000
|
Eighth
|
12,000,000
|
Ninth
|
12,000,000
|
Tenth
|
12,000,000
|
Eleventh
|
12,000,000
|
Twelfth
|
12,000,000
|
Thirteenth
|
12,000,000
|
Fourteenth
|
12,000,000
|
Fifteenth
|
12,000,000
|
Sixteenth
|
12,000,000
|
Seventeenth
|
12,000,000
|
Eighteenth
|
12,000,000
|
Nineteenth
|
12,000,000
|
Twentieth
|
447,000,000
|
Total
|
675,000,000
|
|
(b) |
On the Final Repayment Date (without prejudice to the other provisions of this Agreement), the Loan shall be repaid in full.
|
6.3 |
Adjustment of scheduled repayments
|
7 |
Illegality, prepayment and cancellation
|
7.1 |
Illegality
|
|
(a) |
that Lender shall promptly notify the Agent upon becoming aware of that event;
|
|
(b) |
upon the Agent notifying the Borrowers, the Available Commitment of that Lender will be immediately cancelled and the Available Facility shall be reduced correspondingly; and
|
|
(c) |
to the extent that the Lender’s participation has not been assigned pursuant to clause 7.8 (Replacement of Lender), the Borrowers shall repay that Lender’s participation in the Loan on the last
day of the Interest Period occurring after the Agent has notified the Borrowers or, if earlier, the date specified by the Lender in the notice delivered to the Agent (being no earlier than the last day of any applicable grace period
permitted by law) and that Lender’s corresponding Commitment shall be cancelled in the amount of the participation repaid.
|
7.2 |
Change of control; delisting
|
|
(a) |
Change of control
|
|
(i) |
The Borrowers shall promptly notify the Agent upon any Obligor becoming aware of a Change of Control occurring.
|
|
(ii) |
If a Change of Control occurs and following written instructions by a Lender to this effect, the Agent will, by notice to the Borrowers:
|
|
(A) |
with effect from a date (as required by that Lender) specified in that notice, cancel the Available Commitment of that Lender, whereupon the Available Facility shall be reduced correspondingly; and
|
|
(B) |
declare that Lender’s participation in the Loan to be payable within ten (10) days from the date of such notice and that Lender’s corresponding Commitment shall be cancelled in the amount of the participation repaid.
|
|
(b) |
De-listing
|
|
(i) |
with effect from a date (as required by that Lender) specified in that notice, cancel the Available Commitment of that Lender, whereupon the Available Facility shall be reduced correspondingly; and
|
|
(ii) |
declare that Lender’s participation in the Loan to be payable within ten (10) days from the date of such notice and that Lender’s corresponding Commitment shall be cancelled in the amount of the participation repaid.
|
7.3 |
Sanctions
|
|
(a) |
cancel the Available Commitment of that Lender immediately, whereupon the Available Facility shall be reduced correspondingly; and
|
|
(b) |
declare that Lender’s participation in the Loan to be payable immediately and that Lender’s corresponding Commitment shall be cancelled in the amount of the participation repaid.
|
7.4 |
Voluntary cancellation
|
7.5 |
Voluntary prepayment
|
7.6 |
Right of cancellation and prepayment in relation to a single Lender
|
|
(a) |
If:
|
|
(i) |
any sum payable to any Lender by an Obligor is required to be increased under clause 13.2 (Tax gross-up); or
|
|
(ii) |
any Lender claims indemnification from the Borrowers under clause 13.3 (Tax indemnity) or clause 14.1 (Increased costs),
|
|
(b) |
On receipt of a notice referred to in paragraph (a) above, the Commitment of that Lender shall immediately be reduced to zero.
|
|
(c) |
On the last day of each Interest Period which ends after the Borrowers have given notice under paragraph (a) above in relation to a Lender (or, if earlier, the date specified by the Borrowers in that notice), the Borrowers shall repay
that Lender’s participation in the Loan together with all interest and other amounts accrued under the Finance Documents which is then owing to it.
|
7.7 |
Right of cancellation in relation to a Defaulting Lender
|
|
(a) |
If any Lender becomes a Defaulting Lender, the Borrowers may, at any time whilst the Lender continues to be a Defaulting Lender give the Agent ten (10) Business Days’ notice of cancellation of the Available Commitment of that Lender.
|
|
(b) |
On such notice becoming effective, the Available Commitment of the Defaulting Lender shall immediately be reduced to zero and the Available Facility shall be reduced correspondingly and the Agent shall as soon as practicable after
receipt of such notice, notify all the Lenders.
|
7.8 |
Replacement of Lender
|
|
(a) |
If:
|
|
(i) |
any Lender becomes a Non-Consenting Lender (as defined in paragraph (d) below); or
|
|
(ii) |
the Borrowers become obliged to repay any amount in accordance with clause 7.1 (Illegality) to any Lender; or
|
|
(iii) |
any of the circumstances set out in paragraph (a) of clause 7.6 (Right of cancellation and prepayment in relation to a single Lender) apply to a Lender, the Borrowers may, on ten (10) Business
Days’ prior notice to the Agent and such Lender, replace such Lender by requiring such Lender to assign (and, to the extent permitted by law, such Lender shall assign) pursuant to clause 31 (Changes to
the Lenders) all (and not part only) of its rights under this Agreement (and any Security Document to which that Lender is a party in its capacity as a Lender) to an Eligible Institution (a Replacement
Lender) which confirms its willingness to undertake and does undertake all the obligations of the assigning Lender in accordance with clause 31 (Changes to the Lenders) for a purchase
price in cash payable at the time of the assignment in an amount equal to the aggregate of:
|
|
(A) |
the outstanding principal amount of such Lender’s participation in the Loan;
|
|
(B) |
all accrued interest owing to such Lender;
|
|
(C) |
the Break Costs which would have been payable to such Lender pursuant to clause 11.5 (Break Costs) had the Borrowers prepaid in full that Lender’s participation in the Loan on the date of the
assignment; and
|
|
(D) |
all other amounts payable to that Lender under the Finance Documents on the date of the assignment.
|
|
(b) |
The replacement of a Lender pursuant to this clause 7.8 shall be subject to the following conditions:
|
|
(i) |
the Borrowers shall have no right to replace the Agent or the Security Agent;
|
|
(ii) |
neither the Agent nor any Lender shall have any obligation to find a Replacement Lender;
|
|
(iii) |
in the event of a replacement of a Non-Consenting Lender such replacement must take place no later than thirty (30) Business Days after the date on which that Lender is deemed a Non-Consenting Lender;
|
|
(iv) |
in no event shall the Lender replaced under this clause 7.8 be required to pay or surrender any of the fees received by such Lender pursuant to the Finance Documents; and
|
|
(v) |
the Lender shall only be obliged to assign its rights pursuant to paragraph (a) above once it is satisfied that it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations
in relation to that assignment.
|
|
(c) |
A Lender shall perform the checks described in paragraph (b)(v) above as soon as reasonably practicable following delivery of a notice referred to in paragraph (a) above and shall notify the Agent and the Borrowers when it is satisfied
that it has complied with those checks.
|
|
(d) |
In the event that:
|
|
(i) |
the Borrowers or the Agent (at the request of the Borrowers) has requested the Lenders to give a consent in relation to, or to agree to a waiver or amendment of, any provisions of the Finance Documents;
|
|
(ii) |
the consent, waiver or amendment in question requires the approval of all the Lenders; and
|
|
(iii) |
the Majority Lenders have consented or agreed to such waiver or amendment,
|
7.9 |
Sale or Total Loss
|
|
(a) |
the Security Value is equal to or higher than the Minimum Value; and
|
|
(b) |
the ratio of (i) the Security Value, to (ii) the Loan minus the Minimum Liquidity Amount (if and to the extent the same is standing to the credit of the Cash Collateral Account pursuant to clause 28.3 (Cash
Collateral Account)), is not lower than the same ratio was before such prepayment.
|
7.10 |
Automatic cancellation
|
8 |
Restrictions
|
8.1 |
Notices of cancellation and prepayment
|
8.2 |
Interest and other amounts
|
8.3 |
No reborrowing
|
8.4 |
Prepayment in accordance with Agreement
|
8.5 |
No reinstatement of Commitments
|
8.6 |
Agent’s receipt of notices
|
8.7 |
Effect of repayment and prepayment on Commitments
|
8.8 |
Application of cancellations
|
8.9 |
Application of prepayments
|
|
(a) |
Any prepayment required as a result of a cancellation in full of an individual Lender’s Commitment under clause 7.1 (Illegality), clause 7.2 (Change of control;
delisting) or clause 7.6 (Right of cancellation and prepayment in relation to a single Lender) shall be applied in prepaying the relevant Lender’s participation in the Loan.
|
|
(b) |
Any other prepayment shall be applied pro rata to each Lender’s participation in the Loan.
|
8.10 |
Removal of Lender from security
|
9 |
Interest
|
9.1 |
Calculation of interest
|
|
(a) |
Margin; and
|
|
(b) |
LIBOR for the relevant Interest Period.
|
9.2 |
Payment of interest
|
9.3 |
Default interest
|
|
(a) |
If an Obligor fails to pay any amount payable by it under a Finance Document to a Finance Party on its due date, interest shall accrue on the overdue amount from the due date up to the date of actual payment (both before and after
judgment) at a rate which, subject to paragraph (c) below, is 2 per cent per annum higher than the rate which would have been payable if the overdue amount had, during the period
of non-payment, constituted the Loan for successive Interest Periods, each of a duration selected by the Agent (acting reasonably).
|
|
(b) |
Any interest accruing under this clause 9.3 shall be immediately payable by the Obligors on demand by the Agent.
|
|
(c) |
If any overdue amount consists of all or part of the Loan (or any relevant part of it) which became due on a day which was not the last day of an Interest Period relating to the Loan or the relevant part of it:
|
|
(i) |
the first Interest Period for that overdue amount shall have a duration equal to the unexpired portion of the current Interest Period relating to the Loan or the relevant part of it; and
|
|
(ii) |
the rate of interest applying to the overdue amount during that first Interest Period shall be 2 per cent per annum higher than the rate which would have applied if the overdue amount had not become due.
|
|
(d) |
Default interest payable under this clause 9.3 (if unpaid) arising on an overdue amount will be compounded with the overdue amount at the end of each Interest Period applicable to that overdue amount but will remain immediately due and
payable.
|
9.4 |
Notification of rates of interest
|
|
(a) |
The Agent shall notify the Lenders and the Borrowers of the determination of a rate of interest under this Agreement.
|
|
(b) |
The Agent shall notify the Borrowers of each Funding Rate relating to the Loan (or any relevant part of it).
|
10 |
Interest Periods
|
10.1 |
Selection of Interest Periods
|
|
(a) |
The Borrowers may select an Interest Period for the Loan in the Utilisation Request or (if the Loan has already been borrowed) in a Selection Notice.
|
|
(b) |
Each Selection Notice is irrevocable and must be delivered to the Agent by the Borrowers not later than 11:00 a.m. three (3) Business Days before the last day of the then current Interest Period.
|
|
(c) |
If the Borrowers fail to deliver a Selection Notice to the Agent in accordance with paragraph (a) above, the relevant Interest Period will, subject to clause 10.2 (Interest Periods overrunning
Repayment Dates), be three (3) Months.
|
|
(d) |
Subject to this clause 10, the Borrowers may select an Interest Period of three Months, or any other period previously agreed in writing between the Borrowers and the Agent (acting on the instructions of all the Lenders).
|
|
(e) |
No Interest Period shall extend beyond the Final Repayment Date.
|
|
(f) |
The first Interest Period for the Loan shall start on the Utilisation Date and each subsequent Interest Period for the Loan shall start on the last day of its preceding Interest Period.
|
10.2 |
Interest Periods overrunning Repayment Dates
|
10.3 |
Non-Business Days
|
11 |
Changes to the calculation of interest
|
11.1 |
Unavailability of Screen Rate
|
|
(a) |
If no Screen Rate is available for LIBOR for an Interest Period, LIBOR shall be the Interpolated Screen Rate for a period equal in length to that Interest Period.
|
|
(b) |
If no Screen Rate is available for LIBOR for:
|
|
(i) |
dollars; or
|
|
(ii) |
the relevant Interest Period and it is not possible to calculate the Interpolated Screen Rate,
|
11.2 |
Market disruption
|
11.3 |
Cost of funds
|
|
(a) |
If this clause 11.3 applies, the rate of interest on each Lender’s share of the Loan or relevant part of it for the Interest Period shall be the percentage rate per annum which is the sum of:
|
|
(i) |
the Margin; and
|
|
(ii) |
the weighted average of each rate notified to the Agent by each Lender as soon as practicable and in any event by close of business on the date falling ten (10) Business Days after the Quotation Day (or, if earlier, on the date falling
ten (10) Business Days before the date on which interest is due to be paid in respect of that Interest Period), to be that which expresses as a percentage rate per annum the cost which the relevant Lender would have in order to fund an
amount equal to its participation in the Loan or relevant part of it from whatever source it may reasonably select.
|
|
(b) |
If this clause 11.3 applies and the Agent or the Borrowers so require, the Agent and the Borrowers shall enter into negotiations (for a period of not more than thirty days) with a view to agreeing a substitute basis for determining the
rate of interest.
|
|
(c) |
Any alternative basis agreed pursuant to paragraph (b) above shall, with the prior consent of all the Lenders and the Borrowers, be binding on all Parties.
|
|
(d) |
If this clause 11.3 applies pursuant to clause 11.2 (Market disruption) and:
|
|
(i) |
a Lender’s Funding Rate is less than LIBOR; or
|
|
(ii) |
a Lender does not supply a quotation by the time specified in paragraph (a)(ii) above,
|
11.4 |
Notification to the Borrowers
|
11.5 |
Break Costs
|
|
(a) |
The Borrowers shall, within three (3) Business Days of demand by a Finance Party, pay to that Finance Party its Break Costs attributable to all or any part of the Loan or any relevant part of it or Unpaid Sum being paid by the
Borrowers on a day other than the last day of an Interest Period for the Loan or that relevant part of it or Unpaid Sum.
|
|
(b) |
Each Lender shall, as soon as reasonably practicable after a demand by the Agent, provide a certificate confirming the amount of its Break Costs for any Interest Period in which they accrue.
|
12 |
Fees
|
12.1 |
Commitment fee
|
|
(a) |
The Borrowers shall pay to the Agent (for the account of each Lender) a commitment fee in dollars computed at the rate of 1.20 per cent per annum on that Lender’s Available Commitment calculated on a daily basis from the date of this
Agreement (the start date).
|
|
(b) |
The Borrowers shall pay the accrued commitment fee on the last day of the period of three Months commencing on the start date, on the last day of each successive period of three Months thereafter, on the Last Availability Date to occur
and, if cancelled in full, on the cancelled amount of the relevant Lender’s Available Commitment at the time the cancellation is effective.
|
|
(c) |
No commitment fee is payable to the Agent (for the account of a Lender) on any Available Commitment of that Lender for any day on which that Lender is a Defaulting Lender.
|
12.2 |
Agency fee
|
12.3 |
Security agency fee
|
12.4 |
Upfront fee
|
12.5 |
Other fees
|
13 |
Tax gross-up and indemnities
|
13.1 |
Definitions
|
|
(a) |
In this Agreement:
|
|
(b) |
Unless a contrary indication appears, in this clause 13 a reference to determines or determined means a determination made in the absolute discretion of
the person making the determination.
|
13.2 |
Tax gross-up
|
|
(a) |
Each Obligor shall make all payments to be made by it under any Finance Document without any Tax Deduction, unless a Tax Deduction is required by law.
|
|
(b) |
The Borrowers shall, promptly upon any of them becoming aware that an Obligor must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction), notify the Agent accordingly. Similarly, a Lender shall
notify the Agent on becoming so aware in respect of a payment payable to that Lender. If the Agent receives such notification from a Lender it shall notify the Borrowers and that Obligor.
|
|
(c) |
If a Tax Deduction is required by law to be made by an Obligor, the amount of the payment due from that Obligor under the relevant Finance Document shall be increased to an amount which (after making any Tax Deduction) leaves an amount
equal to the payment which would have been due if no Tax Deduction had been required.
|
|
(d) |
If an Obligor is required to make a Tax Deduction, that Obligor shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law.
|
|
(e) |
Within 30 days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Obligor making that Tax Deduction shall deliver to the Agent for the Finance Party entitled to the payment evidence
reasonably satisfactory to that Finance Party that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.
|
13.3 |
Tax indemnity
|
|
(a) |
Each Obligor who is a Party shall (within three Business Days of demand by the Agent) pay to a Protected Party an amount equal to the loss, liability or cost which that Protected Party determines will be or has been (directly or
indirectly) suffered for or on account of Tax by that Protected Party in respect of a Finance Document.
|
|
(b) |
Paragraph (a) above shall not apply:
|
|
(i) |
with respect to any Tax assessed on a Finance Party:
|
|
(A) |
under the law of the jurisdiction in which that Finance Party is formed or (as the case may be) incorporated or, if different, the jurisdiction (or jurisdictions) in which that Finance Party is treated as resident for tax purposes; or
|
|
(B) |
under the law of the jurisdiction in which that Finance Party’s Facility Office is located in respect of amounts received or receivable in that jurisdiction,
|
|
(ii) |
to the extent a loss, liability or cost:
|
|
(A) |
is compensated for by an increased payment under clause 13.2 (Tax gross-up); or
|
|
(B) |
relates to a FATCA Deduction required to be made by a Party or any other Obligor which is not a Party.
|
|
(c) |
A Protected Party making, or intending to make a claim under paragraph (a) above shall promptly notify the Agent of the event which will give, or has given, rise to the claim, following which the Agent shall notify the Borrowers and
the Guarantors.
|
|
(d) |
A Protected Party shall, on receiving a payment from an Obligor under this clause 13.3, notify the Agent.
|
13.4 |
Indemnities on after Tax basis
|
|
(a) |
If and to the extent that any sum payable to any Protected Party by the Borrowers under any Finance Document by way of indemnity or reimbursement proves to be insufficient, by reason of any Tax suffered thereon, for that Protected
Party to discharge the corresponding liability to a third party, or to reimburse that Protected Party for the cost incurred by it in discharging the corresponding liability to a third party, the Borrowers shall pay that Protected Party
such additional sum as (after taking into account any Tax suffered by that Protected Party on such additional sum) shall be required to make up the relevant deficit.
|
|
(b) |
If and to the extent that any sum (the Indemnity Sum) constituting (directly or indirectly) an indemnity to any Protected Party but paid by the Borrowers to any person other than that Protected Party, shall be treated as taxable in the
hands of the Protected Party, the Borrowers shall pay to that Protected Party such sum (the Compensating Sum) as (after taking into account any Tax suffered by that Protected Party on the Compensating Sum) shall reimburse that Protected
Party for any Tax suffered by it in respect of the Indemnity Sum.
|
|
(c) |
For the purposes of paragraph (a) and paragraph (b) above, a sum shall be deemed to be taxable in the hands of a Protected Party if it falls to be taken into account in computing the profits or gains of that Protected Party for the
purposes of Tax and, if so, that Protected Party shall be deemed to have suffered Tax on the relevant sum at the rate of Tax applicable to that Protected Party’s profits or gains for the period in which the payment of the relevant sum
falls to be taken into account for the purposes of such Tax.
|
13.5 |
Stamp taxes
|
13.6 |
Value added tax
|
|
(a) |
All amounts expressed in a Finance Document to be payable by any party to a Finance Party which (in whole or in part) constitute the consideration for any supply for VAT purposes are deemed to be exclusive of any VAT which is
chargeable on that supply, and accordingly, subject to paragraph (b) below, if VAT is or becomes chargeable on any supply made by any Finance Party to any party under a Finance Document, and such Finance Party is required to account to
the relevant tax authority for the VAT, that party must pay to such Finance Party (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of the VAT (and such Finance Party
must promptly provide an appropriate VAT invoice to that party).
|
|
(b) |
If VAT is or becomes chargeable on any supply made by any Finance Party (the Supplier) to any other Finance Party (the Recipient) under a Finance
Document, and any party to a Finance Document other than the Recipient (the Subject Party) is required by the terms of any Finance Document to pay an amount equal to the consideration for that
supply to the Supplier (rather than being required to reimburse or indemnify the Recipient in respect of that consideration):
|
|
(i) |
(where the Supplier is the person required to account to the relevant tax authority for the VAT) the Subject Party must also pay to the Supplier (at the same time as paying that amount) an additional amount equal to the amount of the
VAT. The Recipient must (where this paragraph (a) applies) promptly pay to the Subject Party an amount equal to any credit or repayment the Recipient receives from the relevant tax authority which the Recipient reasonably determines
relates to the VAT chargeable on that supply; and
|
|
(ii) |
(where the Recipient is the person required to account to the relevant tax authority for the VAT) the Subject Party must promptly, following demand from the Recipient, pay to the Recipient an amount equal to the VAT chargeable on that
supply but only to the extent that the Recipient reasonably determines that it is not entitled to credit or repayment from the relevant tax authority in respect of that VAT.
|
|
(c) |
Where a Finance Document requires any party to it to reimburse or indemnify a Finance Party for any cost or expense, that party shall reimburse or indemnify (as the case may be) such Finance Party for the full amount of such cost or
expense, including such part thereof as represents VAT save to the extent that such Finance Party reasonably determines that it is entitled to credit or repayment in respect of such VAT from the relevant tax authority.
|
|
(d) |
Any reference in this clause 13.6 to any party shall, at any time when such party is treated as a member of a group for VAT purposes, include (where appropriate and unless the context otherwise requires) a reference to the
representative member of such group at such time (the term “representative member” to have the same meaning as in the Value Added Tax Act 1994).
|
|
(e) |
In relation to any supply made by a Finance Party to any party under a Finance Document, if reasonably requested by such Finance Party, that party must promptly provide such Finance Party with details of that party’s VAT registration
and such other information as is reasonably requested in connection with such Finance Party’s VAT reporting requirements in relation to such supply.
|
13.7 |
FATCA information
|
|
(a) |
Subject to paragraph (c) below, each Party shall, within ten Business Days of a reasonable request by another Party:
|
|
(i) |
confirm to that other Party whether it is:
|
|
(A) |
a FATCA Exempt Party; or
|
|
(B) |
not a FATCA Exempt Party;
|
|
(ii) |
supply to that other Party such forms, documentation and other information relating to its status under FATCA as that other Party reasonably requests for the purposes of that other Party’s compliance with FATCA; and
|
|
(iii) |
supply to that other Party such forms, documentation and other information relating to its status as that other Party reasonably requests for the purposes of that other Party’s compliance with any other law, regulation, or exchange of
information regime.
|
|
(b) |
If a Party confirms to another Party pursuant to paragraph (a)(i) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not or has ceased to be a FATCA Exempt Party, that Party shall notify that other Party
reasonably promptly.
|
|
(c) |
Paragraph (a) above shall not oblige any Finance Party to do anything, and paragraph (a)(iii) above shall not oblige any other Party to do anything, which would or might in its reasonable opinion constitute a breach of:
|
|
(i) |
any law or regulation;
|
|
(ii) |
any fiduciary duty; or
|
|
(iii) |
any duty of confidentiality
|
|
(d) |
If a Party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with paragraphs (a)(i) or (a)(ii) above (including, for the avoidance of doubt, where
paragraph (c) above applies), then such Party shall be treated for the purposes of the Finance Documents (and payments under them) as if it is not a FATCA Exempt Party until such time as the Party in question provides the requested
confirmation, forms, documentation or other information.
|
|
(e) |
If a Borrower is a US Tax Obligor or the Agent reasonably believes that its obligations under FATCA or any other applicable law or regulation require it, each Lender shall, within ten Business Days of:
|
|
(i) |
where a Borrower is a US Tax Obligor and the relevant Lender is an Original Lender, the date of this Agreement;
|
|
(ii) |
where a Borrower is a US Tax Obligor on a date on which any other Lender becomes a Party as a Lender, that date; or
|
|
(iii) |
where a Borrower is not a US Tax Obligor, the date of a request from the Agent,
|
|
(A) |
a withholding certificate on Form W-8, Form W-9 or any other relevant form; or
|
|
(B) |
any withholding statement or other document, authorisation or waiver as the Agent may require to certify or establish the status of such Lender under FATCA or that other law or regulation.
|
|
(f) |
The Agent shall provide any withholding certificate, withholding statement, document, authorisation or waiver it receives from a Lender pursuant to paragraph (e) above to the relevant Borrower.
|
|
(g) |
If any withholding certificate, withholding statement, document, authorisation or waiver provided to the Agent by a Lender pursuant to paragraph (e) above is or becomes materially inaccurate or incomplete, that Lender shall promptly
update it and provide such updated withholding certificate, withholding statement, document, authorisation or waiver to the Agent unless it is unlawful for the Lender to do so (in which case the Lender shall promptly notify the Agent).
The Agent shall provide any such updated withholding certificate, withholding statement, document, authorisation or waiver to the relevant Borrower.
|
|
(h) |
The Agent may rely on any withholding certificate, withholding statement, document, authorisation or waiver it receives from a Lender pursuant to paragraphs (e) or (g) above without further verification. The Agent shall not be liable
for any action taken by it under or in connection with paragraphs (e), (f) or (g) above.
|
13.8 |
FATCA Deduction
|
|
(a) |
Each Party may make any FATCA Deduction it is required to make by FATCA, and any payment required in connection with that FATCA Deduction, and no Party shall be required to increase any payment in respect of which it makes such a FATCA
Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction.
|
|
(b) |
Each Party shall promptly, upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate or the basis of such FATCA Deduction), notify the Party to whom it is making the payment and, in addition,
shall notify the Borrowers and the Agent and the Agent shall notify the other Finance Parties.
|
14 |
Increased costs
|
14.1 |
Increased costs
|
|
(a) |
Subject to clause 14.3 (Exceptions), the Borrowers shall, within three Business Days of a demand by the Agent, pay for the account of a Finance Party the amount of any Increased Cost incurred by
that Finance Party or any of its Affiliates which:
|
|
(i) |
arises as a result of (A) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation or (B) compliance with any law or regulation made after the date of this Agreement;
and/or
|
|
(ii) |
is a Basel III Increased Cost.
|
|
(b) |
In this Agreement Increased Costs means:
|
|
(i) |
a reduction in the rate of return from the Facility or on a Finance Party’s (or its Affiliate’s) overall capital;
|
|
(ii) |
an additional or increased cost; or
|
|
(iii) |
a reduction of any amount due and payable under any Finance Document,
|
14.2 |
Increased cost claims
|
|
(a) |
A Finance Party intending to make a claim pursuant to clause 14.1 (Increased costs) shall notify the Agent of the event giving rise to the claim, following which the Agent shall promptly notify
the Borrowers.
|
|
(b) |
Each Finance Party shall, as soon as practicable after a demand by the Agent, provide a certificate confirming the amount of its Increased Costs.
|
14.3 |
Exceptions
|
|
(a) |
Clause 14.1 (Increased costs) does not apply to the extent any Increased Cost is:
|
|
(i) |
attributable to a Tax Deduction required by law to be made by an Obligor;
|
|
(ii) |
attributable to a FATCA Deduction required to be made by a Party;
|
|
(iii) |
compensated for by clause 13.3 (Tax indemnity) (or would have been compensated for under clause 13.3 (Tax indemnity) but was not so compensated solely
because any of the exclusions in paragraph (b) of clause 13.3 (Tax indemnity) applied); or
|
|
(iv) |
attributable to the wilful breach by the relevant Finance Party or its Affiliates of any law or regulation.
|
|
(b) |
In paragraph (a) above, a reference to a Tax Deduction has the same meaning given to the term in clause 13.1 (Definitions).
|
15 |
Other indemnities
|
15.1 |
Currency indemnity
|
|
(a) |
If any sum due from an Obligor under the Finance Documents (a Sum), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the First Currency) in which that Sum is payable into another currency (the Second Currency) for the purpose of:
|
|
(i) |
making or filing a claim or proof against that Obligor; and/or
|
|
(ii) |
obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,
|
|
(b) |
Each Obligor waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable.
|
15.2 |
Mandatory Cost
|
|
(a) |
in the case of a Lender lending from a Facility Office in a Participating Member State, the minimum reserve requirements (or other requirements having the same or similar purpose) of the European Central Bank or any other authority or
agency which replaces all or any of its functions) in respect of loans made from that Facility Office;
|
|
(b) |
in the case of any Lender lending from a Facility Office in the United Kingdom, any reserve asset, special deposit or liquidity requirements (or other requirements having the same or similar purpose) of the Bank of England (or any
other governmental authority or agency) and/or paying any fees to the Financial Conduct Authority and/or the Prudential Regulation Authority (or any other governmental authority or agency which replaces all or any of their functions); and
|
|
(c) |
in the case of any Lender lending from a Facility Office in Switzerland, any minimum reserve requirements or liquidity requirements (or other requirements having the same or similar purpose) of the Swiss National Bank, the Swiss
Financial Markets Supervisory Authority (or any other governmental authority or agency which replaces all or any of their functions),
|
15.3 |
Other indemnities
|
|
(a) |
a breach of clause 22.13 (Sanctions);
|
|
(b) |
the occurrence of any Event of Default;
|
|
(c) |
a failure by an Obligor to pay any amount due under a Finance Document on its due date, including without limitation, any and all Losses arising as a result of clause 37 (Sharing among the Finance
Parties);
|
|
(d) |
funding, or making arrangements to fund, its participation in the Loan requested by the Borrowers in a Utilisation Request but not made by reason of the operation of any one or more of the provisions of this Agreement (other than by
reason of default or negligence by that Finance Party alone); or
|
|
(e) |
the Loan (or part of the Loan) not being prepaid in accordance with a notice of prepayment given by the Borrowers,
|
15.4 |
Indemnity to the Agent and the Security Agent
|
|
(a) |
any and all Losses (together with any applicable VAT) incurred by the Agent or the Security Agent as a result of:
|
|
(i) |
investigating any event which it reasonably believes is a Default;
|
|
(ii) |
acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised;
|
|
(iii) |
instructing lawyers, accountants, tax advisers, insurance consultants, ship managers, valuers, surveyors or other professional advisers or experts as permitted under the Finance Documents; or
|
|
(iv) |
any action taken by the Agent or the Security Agent or any of its or their representatives, agents or contractors in connection with any powers conferred by any Security Document to remedy any breach of any Obligor’s obligations under
the Finance Documents; and
|
|
(b) |
any and all Losses (including, without limitation in respect of liability, for negligence or any other category of liability whatsoever) (together with any applicable VAT) incurred by the Agent or the Security Agent (otherwise than by
reason of the Agent’s or the Security Agent’s gross negligence or wilful default) (or, in the case of any cost, loss or liability pursuant to clause 38.11 (Disruption to payment systems etc.)
notwithstanding the Agent’s or the Security Agent’s negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Agent) in acting as Agent or the Security Agent under the
Finance Documents).
|
15.5 |
Indemnity concerning security
|
|
(a) |
The Borrowers shall (or shall procure that another Obligor will) promptly indemnify each Indemnified Person against any and all Losses (together with any applicable VAT) incurred by it as a result of:
|
|
(i) |
any failure by the Borrowers to comply with its obligations under clause 17 (Costs and expenses) or any similar provision in any other Finance Document;
|
|
(ii) |
acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised;
|
|
(iii) |
the taking, holding, protection or enforcement of the Transaction Security;
|
|
(iv) |
the exercise or purported exercise of any of the rights, powers, discretions, authorities and remedies vested in the Security Agent and/or any other Finance Party and each Receiver and each Delegate by the Finance Documents or by law
(otherwise, in each case, than by reason of the relevant Security Agent’s and/or other Finance Party’s, Receiver’s or Delegate’s gross negligence or wilful default);
|
|
(v) |
any default by any Obligor in the performance of any of the obligations expressed to be assumed by it in the Finance Documents;
|
|
(vi) |
any claim (whether relating to the environment or otherwise) made or asserted against the Indemnified Person which would not have arisen but for the execution or enforcement of one or more Finance Documents (unless and to the extent it
is caused by the gross negligence or wilful default of that Indemnified Person);
|
|
(vii) |
instructing lawyers, accountants, tax advisers, insurance consultants, ship managers, valuers, surveyors or other professional advisers or experts as permitted under the Finance Documents; or
|
|
(viii) |
(in the case of the Security Agent and/or any other Finance Party, any Receiver and any Delegate) acting as Security Agent and/or as holder of any of the Transaction Security, Receiver or Delegate under the Finance Documents or which
otherwise relates to the Charged Property (otherwise, in each case, than by reason of the Security Agent’s and/or other Finance Party’s, Receiver’s or Delegate’s gross negligence or wilful default).
|
|
(b) |
The Security Agent (and each Affiliate of the Security Agent and each officer or employee of the Security Agent or its Affiliate) may, in priority to any payment to the other Finance Parties, indemnify itself out of the Charged
Property in respect of, and pay and retain, all sums necessary to give effect to the indemnity in this clause 15.5 and shall have a lien on the Transaction Security and the proceeds of the enforcement of the Transaction Security for all
moneys payable to it.
|
|
(c) |
The rights conferred by clause (b) above are without prejudice to any right to indemnity by law given to trustees generally and to any provision of the Finance Documents entitling the Security Agent or any other person to an indemnity
in respect of, and/or reimbursement of, any liabilities, costs or expenses incurred or suffered by it in connection with any of the Finance Documents or the performance of any duties under any of the Finance Documents.
|
15.6 |
Continuation of indemnities
|
15.7 |
Third Parties Act
|
|
(a) |
Each Indemnified Person may rely on the terms of clause 15.5 (Indemnity concerning security) and clauses 13 (Tax gross-up and indemnities) and 15.8 (Interest) insofar as it relates to interest on or the calculation of any amount demanded by that Indemnified Person under clause 15.5 (Indemnity concerning security),
subject to clause 1.4 (Third party rights) and the provisions of the Third Parties Act.
|
|
(b) |
Where an Indemnified Person (other than a Finance Party) (the Relevant Beneficiary) who is:
|
|
(i) |
appointed by a Finance Party under the Finance Documents;
|
|
(ii) |
an Affiliate of any such person or that Finance Party; or
|
|
(iii) |
an officer, director, employee, adviser, representative or agent of any of the above persons or that Finance Party,
|
|
(A) |
the Borrowers shall at the same time as the relevant Third Party Claim is due to the Relevant Beneficiary pay to that Finance Party a sum in the amount of that Third Party Claim;
|
|
(B) |
payment of such sum to that Finance Party shall, to the extent of that payment, satisfy the corresponding obligations of the Borrowers to pay the Third Party Claim to the Relevant Beneficiary; and
|
|
(C) |
if the Borrowers pay the Third Party Claim direct to the Relevant Beneficiary, such payment shall, to the extent of that payment, satisfy the corresponding obligations of the Borrowers to that Finance Party under sub-paragraph (A)
above.
|
15.8 |
Interest
|
15.9 |
Exclusion of liability
|
15.10 |
Waiver
|
16 |
Mitigation by the Lenders
|
16.1 |
Mitigation
|
|
(a) |
Each Finance Party shall, in consultation with the Borrowers, take all reasonable steps to mitigate any circumstances which arise and which would result in the Facility ceasing to be available or any amount becoming payable under or
pursuant to, or cancelled pursuant to, any of clause 7.1 (Illegality), clause 13 (Tax gross-up and indemnities), clause 14 (Increased costs) including (but not limited to) assigning its rights under the Finance Documents to another Affiliate or Facility Office.
|
|
(b) |
Paragraph (a) above does not in any way limit the obligations of any Obligor under the Finance Documents.
|
16.2 |
Limitation of liability
|
|
(a) |
The Borrowers shall promptly indemnify each Finance Party for all costs and expenses incurred by that Finance Party as a result of steps taken by it under clause 16.1 (Mitigation).
|
|
(b) |
A Finance Party is not obliged to take any steps under clause 16.1 (Mitigation) if, in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it.
|
17 |
Costs and expenses
|
17.1 |
Transaction expenses
|
|
(a) |
this Agreement, any other documents referred to in this Agreement and the Security Documents;
|
|
(b) |
any other Finance Documents executed or proposed to be executed after the date of this Agreement including any document executed to provide additional security under clause 26 (Minimum security value);
or
|
|
(c) |
any Security Interest expressed or intended to be granted by a Finance Document,
|
17.2 |
Amendment costs
|
|
(a) |
an Obligor requests an amendment, waiver or consent; or
|
|
(b) |
an amendment or waiver is required pursuant to clause 38.10 (Change of currency) or clause 44.4 (Replacement of Screen Rate),
|
17.3 |
Agent’s and Security Agent’s management time and additional remuneration
|
|
(a) |
Any amount payable to the Agent or the Security Agent under clause 15.4 (Indemnity to the Agent and the Security Agent), clause 15.5 (Indemnity concerning security), clause 17 (Costs and expenses) or clause 32.15 (Lenders’ indemnity to
the Agent and others) shall include the cost of utilising the Agent’s or (as the case may be) the Security Agent’s management time or other resources and will be calculated on the basis of such reasonable daily or hourly rates as the
Agent or (as the case may be) the Security Agent may notify to the Borrowers and the other Finance Parties, and is in addition to any other fee paid or payable to the Agent or the Security Agent.
|
|
(b) |
Any cost of utilising the Agent’s management time or other resources shall include, without limitation, any such costs in connection with clause 44.9 (Disenfranchisement of Parent Affiliates).
|
|
(c) |
Without prejudice to paragraph (a) above, in the event of:
|
|
(i) |
a Default;
|
|
(ii) |
the Agent or the Security Agent being requested by an Obligor or the other Finance Parties to undertake duties which the Agent or (as the case may be) the Security Agent and the Borrowers agree to be of an exceptional nature or outside
the scope of the normal duties of the Agent or (as the case may be) the Security Agent under the Finance Documents (which, for the avoidance of doubt, shall include any amendments to the Finance Documents and the time incurred in relation
thereto); or
|
|
(iii) |
the Agent or (as the case may be) the Security Agent and the Borrowers agreeing that it is otherwise appropriate in the circumstances,
|
|
(d) |
If the Agent or (as the case may be) the Security Agent and the Borrowers fail to agree upon the nature of the duties, or upon the additional remuneration referred to in paragraph (c) above or whether additional remuneration is
appropriate in the circumstances, any dispute shall be determined by a financial institution (acting as an expert and not as an arbitrator) selected by the Agent or (as the case may be) the Security Agent and approved by the Borrowers or,
failing approval, nominated (on the application of the Agent or (as the case may be) the Security Agent) by the President for the time being of the Law Society of England and Wales (the costs of the nomination and of the financial
institution being payable by the Borrowers) and the determination of any financial institution shall be final and binding upon the Parties.
|
17.4 |
Enforcement, preservation and other costs
|
|
(a) |
the enforcement of, or the preservation of any rights under, any Finance Document and the Transaction Security and any proceedings instituted by or against any Indemnified Person as a consequence of taking or holding the Security
Documents or enforcing those rights;
|
|
(b) |
any valuation carried out under clause 26 (Minimum security value) when it is so stipulated under clause 26.3 (Expenses of valuation);
|
|
(c) |
any inspection carried out under clause 24.8 (Inspection and notice of dry-docking) provided that (i) if the relevant Ship is, pursuant to such inspection, found to be in satisfactory condition
and maintaining specifications acceptable to the Majority Lenders and (ii) if no Event of Default has occurred, the Borrowers shall bear the cost of such inspection only once per calendar year; or
|
|
(d) |
any survey carried out under clause 24.16 (Survey report) or any inspection carried out under clause 22.15 (Inspection).
|
18 |
Guarantee and indemnity
|
18.1 |
Guarantee and indemnity
|
|
(a) |
guarantees to the Security Agent (as trustee for the Finance Parties) and the other Finance Parties punctual performance by each other Obligor of all such Obligor’s obligations under the Finance Documents (including the repayment
when due of any debit balances or overdrawn amounts in any Account);
|
|
(b) |
undertakes with the Security Agent (as trustee for the Finance Parties) and the other Finance Parties that whenever another Obligor does not pay any amount when due under or in connection with any Finance Document (including the
repayment when due of any debit balances or overdrawn amounts in any Account), it shall immediately on demand pay that amount as if it was the principal obligor; and
|
|
(c) |
agrees with the Security Agent (as trustee for the Finance Parties) and the other Finance Parties that it will, as an independent and primary obligation, indemnify each Finance Party immediately on demand against any cost, loss or
liability it incurs:
|
|
(A) |
if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal (including the obligation to repay when due any debit balances or overdrawn amounts in any Account); or
|
|
(B) |
by operation of law, and as a result of the same, the Borrowers have not paid any amount which would, but for such unenforceability, invalidity, illegality or operation of law, have been payable by the Borrowers under any Finance
Document (including the repayment when due of any debit balances or overdrawn amounts in any Account) on the date when it would have been due; or
|
|
(ii) |
if as a result (directly or indirectly) of the introduction of or any change in (or the interpretation, administration or application of) any law or regulation, or compliance with any law, regulation or administrative procedure made
after entry into this Agreement (a Change in Law), there is a change in the currency, the value of the currency or the timing, place or manner in which any obligation guaranteed by a Guarantor is
payable.
|
|
(1) |
in respect of paragraph (i) above, shall be the amount it would have had to pay under this clause 17.1 if the amount claimed had been recoverable on the basis of a guarantee but for any relevant unenforceability, invalidity or
illegality, and
|
|
(2) |
in respect of paragraph (ii) above, shall include (aa) the difference between (x) the amount (if any) received by the Security Agent and the other Finance Parties from the Borrowers and (y) the amount that the Borrowers were obliged
to pay under the original express terms of the Finance Documents in the currency specified in the Finance Documents, disregarding any Change in Law (the Original Currency), and (bb) all further costs, losses and liabilities suffered or
incurred by
|
18.2 |
Continuing guarantee
|
18.3 |
Reinstatement
|
|
(a) |
the liability of each Obligor under this clause 17 shall continue or be reinstated as if the payment, discharge, release, arrangement, avoidance or reduction had not occurred; and
|
|
(b) |
each Finance Party shall be entitled to recover the value or amount of that security or payment from each Obligor, as if the payment, discharge, release, arrangement, avoidance or reduction had not occurred.
|
18.4 |
Waiver of defences
|
|
(a) |
any time, waiver or consent granted to, or composition with, any Obligor or other person;
|
|
(b) |
the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of any other Obligor;
|
|
(c) |
the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any Obligor or other person or any non-presentation or
non-observance of any formality or other 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;
|
|
(g) |
any law or regulation of any jurisdiction or any other event affecting any term of the guaranteed obligations;
|
|
(h) |
any other circumstance that might constitute a defence of the Guarantor; or
|
|
(i) |
any insolvency or similar proceedings.
|
18.5 |
Guarantor intent
|
18.6 |
Immediate recourse
|
18.7 |
Appropriations
|
|
(a) |
refrain from applying or enforcing any other moneys, security or rights held or received by that Finance Party (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and
order as it sees fit (whether against those amounts or otherwise) and no Guarantor shall be entitled to the benefit of the same; and
|
|
(b) |
hold in an interest-bearing suspense account any moneys received from any Guarantor or on account of a Guarantor’s liability under this clause 18.
|
18.8 |
Deferral of Guarantors’ rights
|
|
(a) |
Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full and unless the Agent otherwise directs, no Guarantor will exercise any rights which
it may have by reason of performance by it of its obligations under the Finance Documents or by reason of any amount being payable, or liability arising, under this clause 18:
|
|
(i) |
to be indemnified by another Obligor;
|
|
(ii) |
to claim any contribution from any other guarantor of any Obligor’s obligations under the Finance Documents;
|
|
(iii) |
to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under the Finance Documents or of any other guarantee or security taken pursuant to, or in connection with,
the Finance Documents by any Finance Party;
|
|
(iv) |
to bring legal or other proceedings for an order requiring any Obligor to make any payment, or perform any obligation, in respect of which that Guarantor has given a guarantee, undertaking or indemnity under clause 18 (Guarantee and indemnity);
|
|
(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 Guarantor receives any benefit, payment or distribution in relation to such rights it will promptly pay an equal amount to the Agent for application in accordance with clause 38 (Payment
mechanics). This only applies until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full.
|
18.9 |
Additional security
|
18.10 |
Guarantors’ rights and obligations
|
|
(a) |
The obligations of each Guarantor under the Guarantee and under this Agreement are joint and several. Failure by a Guarantor to perform its obligations under the Guarantee and/or this Agreement shall constitute a failure by all of
the Guarantors.
|
|
(b) |
Each Guarantor irrevocably and unconditionally jointly and severally with the other Guarantor:
|
|
(i) |
agrees that it is responsible for the performance of the obligations of the other Guarantor under the Guarantee and this Agreement;
|
|
(ii) |
acknowledges and agrees that it is a principal and original debtor in respect of all amounts due from the Guarantors under the Guarantee and under this Agreement; and
|
|
(iii) |
agrees with each Finance Party that, if any obligation of the other Guarantor under the Guarantee and this Agreement is or becomes unenforceable, invalid or illegal for any reason it will, as an independent and primary obligation,
indemnify that Finance Party immediately on demand against any and all Losses it incurs as a result of the other Guarantor not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by
the other Guarantor under the Guarantee and/or this Agreement. The amount payable under this indemnity shall be equal to the amount which that Finance Party would otherwise have been entitled to recover.
|
|
(c) |
The obligations of each Guarantor under the Finance Documents shall continue until all amounts which may be or become payable by the Guarantors under or in connection with the Finance Documents have been irrevocably and
unconditionally paid or discharged in full, regardless of any intermediate payment or discharge in whole or in part.
|
18.11 |
Amendments
|
19 |
Representations
|
19.1 |
Status
|
|
(a) |
Each Obligor is duly incorporated, formed or established and validly existing under the laws of the jurisdiction of its incorporation, formation or establishment as a limited liability company or corporation or limited partnership
(as the case may be).
|
|
(b) |
Each Obligor and each other Group Member has power and authority to own its assets and to carry on its business as it is now being conducted.
|
19.2 |
Binding obligations
|
|
(a) |
the obligations expressed to be assumed by each Obligor in each Transaction Document to which it is, or is to be, a party are or, when entered into by it, will be legal, valid, binding and enforceable obligations; and
|
|
(b) |
(without limiting the generality of paragraph (a) above) each Security Document to which an Obligor is, or will be, a party, creates or will create the Security Interests which that Security Document purports to create and those
Security Interests are or will be valid and effective.
|
19.3 |
Non-conflict
|
|
(a) |
any law or regulation applicable to any Obligor;
|
|
(b) |
the Constitutional Documents of any Obligor or any other Group Member; or
|
|
(c) |
any agreement or other instrument binding upon any Obligor or any other Group Member or its or any other Group Member’s assets,
|
19.4 |
Power and authority
|
|
(a) |
Each Obligor has the power to enter into, perform and deliver and comply with its obligations under, and has taken all necessary action to authorise its entry into, performance and delivery of, and compliance with, each Transaction
Document to which it is, or is to be, a party and each of the transactions contemplated by those documents.
|
|
(b) |
No limitation on any Obligor’s powers to borrow, create security or give guarantees will be exceeded as a result of any transaction under, or the entry into of, any Transaction Document to which such Obligor is, or is to be, a party.
|
19.5 |
Validity and admissibility in evidence
|
|
(a) |
All Authorisations required or desirable:
|
|
(i) |
to enable each Obligor lawfully to enter into, exercise its rights and comply with its obligations under each Transaction Document to which it is a party;
|
|
(ii) |
to make each Transaction Document to which it is a party admissible in evidence in its Relevant Jurisdictions; and
|
|
(iii) |
to ensure that the Transaction Security has the priority and ranking contemplated by the Security Documents,
|
|
(b) |
All Authorisations necessary for the conduct of the business, trade and ordinary activities of each Obligor and each other Group Member have been obtained or effected and are in full force and effect if failure to obtain or effect
those Authorisations might have a Material Adverse Effect.
|
19.6 |
Governing law and enforcement
|
|
(a) |
The choice of English law or any other applicable law as the governing law of any Transaction Document will be recognised and enforced in each Obligor’s Relevant Jurisdictions.
|
|
(b) |
Any judgment obtained in any Transaction Document in the jurisdiction of the governing law of that Transaction Document will be recognised and enforced in its Relevant Jurisdictions.
|
|
19.7 |
No misleading information
|
|
(a) |
Any factual information contained in the Information Package is true and accurate in all material respects as at the date of the relevant report or document containing the information or (as the case may be) as at the date the
information is expressed to be given.
|
|
(b) |
Any financial projection or forecast contained in the Information Package has been prepared on the basis of recent historical information and on the basis of reasonable assumptions and was fair (as at the date of the relevant report
or document containing the projection or forecast) and arrived at after careful consideration.
|
|
(c) |
The expressions of opinion or intention provided by or on behalf of an Obligor for the purposes of the Information Package were made after careful consideration and (as at the date of the relevant report or document containing the
expression of opinion or intention) were fair and based on reasonable grounds.
|
|
(d) |
No event or circumstance has occurred or arisen and no information has been omitted from the Information Package and no information has been given or withheld that results in the information, opinions, intentions, forecasts or
projections contained in the Information Package being untrue or misleading in any material respect.
|
|
(e) |
All other written information provided by any Group Member (including its advisers) to a Finance Party was true, complete and accurate in all material respects as at the date it was provided and is not misleading in any respect.
|
|
(f) |
For the purposes of this clause 19.7, Information Package means any information provided by any Obligor or any other Group Member to any of the Finance
Parties in connection with the Transaction Documents or the transactions referred to in them including that contained in the Information Memorandum.
|
19.8 |
Original Financial Statements
|
|
(a) |
The Original Financial Statements were prepared in accordance with GAAP consistently applied.
|
|
(b) |
The Original Financial Statements fairly present the financial condition as at the end of the relevant Financial Year and its results of operations during the relevant Financial Year of the relevant Obligors and the Group
(consolidated in the case of the Group and the Arctic LNG Guarantor, respectively) during the relevant Financial Year.
|
|
(c) |
There has been no material adverse change in the assets, business, prospects or financial condition of any Obligor (other than the Manager) (or the assets, business, prospects or consolidated financial condition of the Group, in the
case of the Parent or of the Arctic LNG Guarantor, respectively) since the date of the Original Financial Statements.
|
19.9 |
Pari passu ranking
|
19.10 |
Ranking and effectiveness of security
|
|
(a) |
the Transaction Security has (or will have when the relevant Security Documents have been executed) the priority which it is expressed to have in the Security Documents;
|
|
(b) |
the Charged Property is not subject to any Security Interest other than Permitted Security Interests; and
|
|
(c) |
the Transaction Security will constitute perfected security on the assets described in the Security Documents.
|
19.11 |
Centre of main interests and establishments
|
19.12 |
Ownership of Charged Property
|
19.13 |
No insolvency
|
19.14 |
No filing or stamp taxes
|
19.15 |
Deduction of Tax
|
19.16 |
Tax compliance
|
|
(a) |
No Obligor or other Group Member is materially overdue in the filing of any Tax returns or overdue in the payment of any amount in respect of Tax.
|
|
(b) |
No claims or investigations are being, or are reasonably likely to be, made or conducted against any Obligor or other Group Member with respect to Taxes such that a liability of, or claim against, any Obligor or other Group Member is
reasonably likely to arise for an amount for which adequate reserves have not been provided in the Original Financial Statements and which might have a Material Adverse Effect.
|
|
(c) |
Each Obligor is resident for Tax purposes only in its Original Jurisdiction.
|
19.17 |
Other Tax matters
|
|
(a) |
having any liability in respect of Tax in any Flag State;
|
|
(b) |
having or being deemed to have a place of business in any Flag State or any Relevant Jurisdiction of any Obligor.
|
19.18 |
Pension exposure
|
19.19 |
No Default
|
|
(a) |
No Default is continuing or might reasonably be expected to result from the making of any Utilisation or the entry into, the performance of, or any transaction contemplated by, any Transaction Document.
|
|
(b) |
No other event or circumstance is outstanding which constitutes (or, with the expiry of a grace period, the giving of notice, the making of any determination or any combination of any of the foregoing, would constitute) a default or
termination event (however described) under any other agreement or instrument which is binding on any Obligor or any other Group Member or to which any Obligor’s (or any other Group Member’s) assets are subject which might have a
Material Adverse Effect.
|
19.20 |
No proceedings
|
|
(a) |
No litigation, arbitration or administrative proceedings or investigations of, or before, any court, arbitral body or agency which, if adversely determined, might reasonably be expected to have a Material Adverse Effect has or have
(to the best of any Obligor’s knowledge and belief (having made due and careful enquiry)) been started or threatened against any Obligor or any other Group Member.
|
|
(b) |
No judgment or order of a court, arbitral tribunal or other tribunal or any order or sanction of any governmental or other regulatory body which is reasonably likely to have a Material Adverse Effect has (to the best of any Obligor’s
knowledge and belief (having made due and careful enquiry)) been made against any Obligor or any other Group Member.
|
19.21 |
No breach of laws
|
|
(a) |
No Obligor or other Group Member has breached any law or regulation which breach might have a Material Adverse
Effect.
|
|
(b) |
No labour dispute is current or, to the best of any Obligor’s knowledge and belief (having made due and careful enquiry), threatened against any Obligor or other Group Member which might have a Material Adverse Effect.
|
19.22 |
Environmental matters
|
|
(a) |
No Environmental Law applicable to any Fleet Vessel and/or any Obligor or other Group Member has been violated in a manner or to an extent which might have, a Material Adverse Effect.
|
|
(b) |
All consents, licences and approvals required under such Environmental Laws have been obtained and are currently in force.
|
|
(c) |
No Environmental Claim has been made or, to the best of any Obligor’s knowledge and belief (having made due and careful enquiry), is threatened or is pending against any Group Member or any Fleet Vessel where that claim might have a
Material Adverse Effect and there has been no Environmental Incident which has given, or might give, rise to such a claim.
|
19.23 |
Anti-corruption law
|
19.24 |
Security and Financial Indebtedness
|
|
(a) |
No Security Interest exists over all or any of the present or future assets of any Obligor, in breach of this Agreement.
|
|
(b) |
No Obligor has any Financial Indebtedness outstanding in breach of this Agreement.
|
19.25 |
Ownership of assets
|
19.26 |
Shares
|
|
(a) |
The shares of each Owner are fully paid and not subject to any option to purchase or similar rights.
|
|
(b) |
The Constitutional Documents of each Owner do not and could not restrict or inhibit any transfer of those shares on creation or enforcement of the Security Documents.
|
|
(c) |
There are no agreements in force which provide for the issue or allotment of, or grant any person the right to call for the issue or allotment of, any share or loan capital of each Owner (including any option or right of pre-emption
or conversion).
|
19.27 |
Ownership of Obligors
|
|
(a) |
Each Borrower is a direct wholly-owned Subsidiary of the Arctic LNG Guarantor.
|
|
(b) |
The Dynagas Finance LLC Guarantor is a direct wholly-owned Subsidiary of the Arctic LNG Guarantor.
|
|
(c) |
The Arctic LNG Guarantor is a direct wholly-owned Subsidiary of the Dynagas Equity Guarantor.
|
|
(d) |
The Dynagas Equity Guarantor is a wholly-owned direct Subsidiary of the Dynagas Operating Guarantor.
|
|
(e) |
Each of the Dynagas Finance Guarantor, the Dynagas Operating GP Guarantor and the Dynagas Operating LP Guarantor is a wholly-owned direct Subsidiary of the Parent.
|
|
(f) |
Not less than 100% of total share capital, total common partnership interest and units and the total limited liability company interest (as applicable) in each other Guarantor and each Borrower is owned (legally and/or beneficially,
directly and/or indirectly) by the Parent, and the Parent controls each other Guarantor and each Borrower.
|
|
(g) |
Not less than 43.9% of the total common partnership interest and units in the Parent is directly owned (legally and beneficially) by the Sponsor, and the Sponsor controls the Parent.
|
|
(h) |
The General Partner ceases to be the general partner of the Parent.
|
|
(i) |
The Permitted Holders control each of the General Partner, the Sponsor and the Manager.
|
|
(j) |
Not less than 100% of the issued and outstanding (i) share capital and (ii) voting share capital of each of the Sponsor and the Manager, and not less than 100% of the total limited liability company interest in the General Partner,
are owned (legally and/or beneficially, directly and/or indirectly) by the Permitted Holders.
|
|
(k) |
The Dynagas Operating GP Guarantor is the general partner of the Dynagas Operating LP Guarantor.
|
19.28 |
No Change of Control
|
19.29 |
Accounting Reference Date
|
19.30 |
No adverse consequences
|
|
(a) |
It is not necessary under the laws of the Relevant Jurisdictions of any Obligor:
|
|
(i) |
in order to enable any Finance Party to enforce its rights under any Finance Document to which it is, or is to be, a party; or
|
|
(ii) |
by reason of the execution of any Finance Document or the performance by any Obligor of its obligations under any Finance Document,
|
|
(b) |
No Finance Party is or will be deemed to be resident, domiciled or carrying on business in any Relevant Jurisdiction of any Obligor by reason only of the execution, performance and/or enforcement of any Finance Document.
|
19.31 |
Copies of documents
|
19.32 |
No breach, etc of any Charter Document
|
19.33 |
No breach of any Charter Document
|
19.34 |
No immunity
|
19.35 |
Ship status
|
|
(a) |
registered in the name of the relevant Owner through the relevant Registry as a ship under the laws and flag of the relevant Flag State;
|
|
(b) |
operationally seaworthy and in every way fit for service;
|
|
(c) |
classed with the relevant Classification free of all requirements and recommendations of the relevant Classification Society; and
|
|
(d) |
insured in the manner required by the Finance Documents.
|
19.36 |
Ship’s employment
|
|
(a) |
have been delivered, and accepted for service, under its Charter; and
|
|
(b) |
be free of any other charter commitment which, if entered into after that date, would require approval under the Finance Documents.
|
19.37 |
Address commission
|
19.38 |
Money Laundering
|
|
(a) |
all its operations are and have been conducted at all times in compliance with all Anti-Money Laundering Laws;
|
|
(b) |
it has instituted and maintained, and will continue to maintain and enforce, policies and procedures which are designed to promote compliance with Anti-Money Laundering Laws;
|
|
(c) |
no action, suit or proceeding by or before any court, governmental agency, authority, body or any arbitrator involving such Borrower or its management board with respect to Anti-Money Laundering Laws is pending and no such actions,
suits or proceedings are threatened or contemplated;
|
|
(d) |
it is acting for its own account;
|
|
(e) |
it will use the proceeds of the Loan for its own benefit, under its full responsibility and exclusively for the purposes specified in this Agreement;
|
|
(f) |
it shall (and shall ensure that all its directors, officers, or employees shall) not directly or indirectly use the proceeds of the Loan for any purpose that would constitute a breach of Anti-Money Laundering Laws; and
|
|
(g) |
the foregoing will not involve or lead to a contravention of any law, official requirement or other regulatory measure or procedure which has been implemented to combat money laundering (as defined in the provisions of the directive
(2015/849/EC) of the European Parliament and of the Council and/or Article 305bis of the Swiss Penal Code).
|
|
(a) |
all applicable anti-money laundering laws of any jurisdiction in which an Obligor conducts business; and
|
|
(b) |
the rules and regulations thereunder and any related or similar rules, regulations or guidelines issued, administered or enforced by any governmental agency including regulations governing predicate offences for money laundering.
|
19.39 |
Sanctions
|
|
(a) |
No Ship is a vessel with which any individual, entity or any other person is prohibited or restricted from dealing with under any Sanctions.
|
|
(b) |
No Obligor nor any other Group Member nor any Affiliate of any Group Member, nor any of their respective directors, officers or employees nor, to the best of the knowledge of any Obligor, any persons acting on any of their behalf:
|
|
(i) |
is a Prohibited Person;
|
|
(ii) |
is subject to or the target of any United Nations, United States, European Union, or any of the member states of the European Union, Switzerland or the United Kingdom or any other sanctions regime regarding in particular, but not
exclusively, economic sanctions against Iran, including, without limitation, any Sanctions;
|
|
(iii) |
is owned or controlled by, or acting directly or indirectly on behalf of or for the benefit of, a Prohibited Person;
|
|
(iv) |
owns or controls a Prohibited Person;
|
|
(v) |
is located or resident in, or doing business or operating from, organised, formed or (as the case may be) incorporated under the laws of, a country or territory which is, or whose government is, the subject of Sanctions (including,
without limitation, Cuba, Iran, Burma (Myanmar), North Korea, Sudan, Syria and the Crimea Region as at the date of this Agreement);
|
|
(vi) |
is in breach of Sanctions; or
|
|
(vii) |
has received notice of or is aware of any claim, action, suit, proceeding or investigation against it with respect to Sanctions by any Sanctions Authority.
|
19.40 |
Times when representations are made
|
|
(a) |
All of the representations and warranties set out in this clause 19 (other than Ship Representations) are deemed to be made on the dates of:
|
|
(i) |
this Agreement;
|
|
(ii) |
the Utilisation Request;
|
|
(iii) |
the Utilisation; and
|
|
(iv) |
the date when the Borrowers request that the Blocked Amount is withdrawn pursuant to clause 28.3(e) and the date when the Blocked Amount is to be so withdrawn.
|
|
(b) |
The Repeating Representations are deemed to be made on the date of issuance of each Compliance Certificate and the first day of each Interest Period and, in the case of the representation in clause 19.7 (No misleading information) (but in relation to the Information Memorandum only), on the date of primary syndication of the Facility.
|
|
(c) |
All of the Ship Representations are deemed to be made on the first day of the Mortgage Period for the relevant Ship.
|
|
(d) |
Each representation or warranty deemed to be made after the date of this Agreement shall be deemed to be made by reference to the facts and circumstances then existing at the date the representation or warranty is deemed to be made.
|
20 |
Information undertakings
|
20.1 |
Financial statements
|
|
(a) |
The Borrowers shall supply to the Agent (in sufficient copies for all the Lenders, if the Agent so requests):
|
|
(i) |
the audited consolidated financial statements of the Parent for each Financial Year as soon as the same become available, but in any event within 180 days after the end of each Financial Year;
|
|
(ii) |
the unaudited consolidated financial statements of the Parent and the unaudited consolidated financial statements of the Arctic LNG Guarantor for the first financial half-year of each Financial Year as soon as the same become
available, but in any event within 90 days after the end of each such financial half-year; and
|
|
(iii) |
the unaudited financial statements of each Borrower and the unaudited consolidated financial statements of the Arctic LNG Guarantor, in each case for each Financial Year as soon as the same become available, but in any event within
180 days after the end of each Financial Year.
|
20.2 |
Provision and contents of Compliance Certificate and valuations
|
|
(a) |
The Parent shall supply to the Agent (and the Agent shall supply to each Lender):
|
|
(i) |
with each set of Annual Financial Statements and Semi-Annual Financial Statements, a Compliance Certificate; and
|
|
(ii) |
with each set of Annual Financial Statements and Semi-Annual Financial Statements, valuations of each Fleet Vessel (as defined in clause 21.1 (Financial definitions)), each made in accordance
with clause 26 (Minimum security value) and showing the value of each such Fleet Vessel (and for such purposes, the provisions of such clause 26 (Minimum
security value) shall apply to each such Fleet Vessel and this paragraph (a)(ii) mutatis mutandis as if each such Fleet Vessel was a Ship).
|
|
(b) |
Each Compliance Certificate shall, amongst other things, set out (in reasonable detail) computations as to compliance with clause 21.2 (Financial condition).
|
|
(c) |
Each Compliance Certificate shall be signed by the chief financial officer of the Parent.
|
20.3 |
Requirements as to financial statements
|
|
(a) |
The Borrowers shall procure that each set of financial statements delivered pursuant to clause 20.1 (Financial statements) includes a profit and loss account, a balance sheet and a cashflow
statement and that, in addition, each set of annual financial statements of the Parent shall be audited by the Auditors.
|
|
(b) |
Each set of financial statements delivered pursuant to clause 20.1 (Financial statements) shall:
|
|
(i) |
be prepared in accordance with GAAP;
|
|
(ii) |
fairly present, and be certified by a director of the relevant company as fairly presenting, its financial condition and operations, as at the date as at which those financial statements were drawn up and, in the case of the annual
financial statements of the Parent, shall be accompanied by any letter addressed to the management of the Parent by the Auditors and accompanying those annual financial statements; and
|
|
(iii) |
in the case of audited annual financial statements, not be the subject of any qualification in the Auditors’ opinion.
|
|
(c) |
The Borrowers shall procure that each set of financial statements delivered pursuant to clause 20.1 (Financial statements) shall be prepared using GAAP, accounting practices and financial
reference periods consistent with those applied in the preparation of the Original Financial Statements, unless, in relation to any set of financial statements, the Borrowers notify the Agent that there has been a change in GAAP or the
accounting practices and the Auditors deliver to the Agent:
|
|
(i) |
a description of any change necessary for those financial statements to reflect the GAAP or accounting practices and reference periods upon which corresponding Original Financial Statements were prepared; and
|
|
(ii) |
sufficient information, in form and substance as may be reasonably required by the Agent, to enable the Lenders to determine whether clause 21 (Financial covenants) has been complied with and
to make an accurate comparison between the financial position indicated in those financial statements and the Original Financial Statements.
|
20.4 |
Presentations
|
20.5 |
Year-end
|
20.6 |
Information: miscellaneous
|
|
(a) |
at the same time as they are dispatched, copies of all documents dispatched by the Parent to its shareholders generally (or any class of them) or dispatched by the Parent or any Obligors to its creditors generally (or any class of
them);
|
|
(b) |
promptly upon becoming aware of them, the details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against any Group Member, and which, if adversely determined, might have a
Material Adverse Effect or which would involve a liability, or a potential or alleged liability, exceeding $1,000,000 (or its equivalent in other currencies);
|
|
(c) |
promptly on request by the Agent (acting on the instructions of the Majority Lenders given to the Agent not later than 30 days before the beginning of each Financial Year), a budget and cash flow projections for the Group in respect
of such Financial Year, in form and substance reasonably acceptable to the Majority Lenders;
|
|
(d) |
promptly upon becoming aware of them, the details of any judgment or order of a court, arbitral tribunal or other tribunal or any order or sanction of any governmental or other regulatory body which is made against any Group Member
and which is reasonably likely to have a Material Adverse Effect or which would involve a liability, or a potential or alleged liability, exceeding $1,000,000 (or its equivalent in other currencies);
|
|
(e) |
promptly, such information as the Agent or the Security Agent may reasonably require about the Charged Property and compliance of the Obligors with the terms of any Security Documents; and
|
|
(f) |
promptly on request, such further information regarding the financial condition, assets, liabilities and operations of the Group and/or any Group Member as any Finance Party through the Agent may reasonably request.
|
20.7 |
Notification of Default
|
|
(a) |
The Borrowers shall notify the Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon any Obligor becoming aware of its occurrence (unless that Obligor is aware that a notification has already been
provided by another Obligor).
|
|
(b) |
Promptly upon a request by the Agent, the Borrowers shall supply to the Agent a certificate signed by two of its directors or senior officers of the Parent on its behalf certifying that no Default is continuing (or if a Default is
continuing, specifying the Default and the steps, if any, being taken to remedy it).
|
20.8 |
Sufficient copies
|
20.9 |
Use of websites
|
|
(a) |
The Borrowers may satisfy their obligation under this Agreement to deliver any information in relation to those Lenders (the Website Lenders) who accept this method of communication by posting
this information onto an electronic website designated by the Borrowers and the Agent (the Designated Website) if:
|
|
(i) |
the Agent expressly agrees (after consultation with each of the Lenders) that it will accept communication of the information by this method;
|
|
(ii) |
both the Borrowers and the Agent are aware of the address of and any relevant password specifications for the Designated Website; and
|
|
(iii) |
the information is in a format previously agreed between the Borrowers and the Agent.
|
|
(b) |
If any Lender (a Paper Form Lender) does not agree to the delivery of information electronically then the Agent shall notify the Borrowers accordingly and the Borrowers shall supply the
information to the Agent (in sufficient copies for each Paper Form Lender) in paper form. In any event the Borrowers shall supply the Agent with at least one copy in paper form of any information required to be provided by it.
|
|
(c) |
The Agent shall supply each Website Lender with the address of and any relevant password specifications for the Designated Website following designation of that website by the Borrowers and the Agent.
|
|
(d) |
The Borrowers shall promptly upon any of them becoming aware of its occurrence notify the Agent if:
|
|
(i) |
the Designated Website cannot be accessed due to technical failure;
|
|
(ii) |
the password specifications for the Designated Website change;
|
|
(iii) |
any new information which is required to be provided under this Agreement is posted onto the Designated Website;
|
|
(iv) |
any existing information which has been provided under this Agreement and posted onto the Designated Website is amended; or
|
|
(v) |
any Borrower becomes aware that the Designated Website or any information posted onto the Designated Website is or has been infected by any electronic virus or similar software.
|
|
(e) |
If the Borrowers notify the Agent under paragraphs (i) to (v) above, all information to be provided by the Borrowers under this Agreement after the date of that notice shall be supplied in paper form unless and until the Agent and
each Website Lender is satisfied that the circumstances giving rise to the notification are no longer continuing.
|
|
(f) |
Any Website Lender may request, through the Agent, one paper copy of any information required to be provided under this Agreement which is posted onto the Designated Website. The Borrowers shall comply with any such request within
ten Business Days.
|
20.10 |
“Know your customer” checks
|
|
(a) |
If:
|
|
(i) |
the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement;
|
|
(ii) |
any change in the status of an Obligor or the composition of the shareholders of an Obligor after the date of this Agreement;
|
|
(iii) |
a proposed assignment by a Lender of any of its rights under this Agreement to a party that is not already a Lender prior to such assignment; or
|
|
(iv) |
any law and/or regulation to prevent money laundering and corruption, to conduct ongoing monitoring of the business relationship with the Obligors or in relation to necessary “know your customer” or other similar checks as applicable
to a Lender or the transactions contemplated in the Finance Documents,
|
|
(b) |
Each Finance Party shall, promptly upon the request of the Agent or the Security Agent, supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent or the Security Agent (for
itself) in order for it to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance
Documents.
|
20.11 |
Money Laundering
|
|
(a) |
provide the Agent (and the Agent shall provide each Lender) with information, certificates and any documents required by the Agent or any other Finance Party to ensure compliance with any law official requirement or other regulatory
measure or procedure implemented to combat money laundering (as defined in the provisions of the directive (2015/849/EC) of the European Parliament and of the Council and/or Article 305bis of the Swiss Penal Code) throughout the
Facility Period; and
|
|
(b) |
notify the Agent (and the Agent shall notify each Lender) as soon as it becomes aware of any matters evidencing that a breach of any law official requirement or other regulatory measure or procedure implemented to combat money
laundering (as defined in the provisions of the directive (2015/849/EC) of the European Parliament and of the Council and/or Article 305bis of the Swiss Penal Code) may or is about to occur or that the person(s) who have or will receive
the commercial benefit of this Agreement have changed from the date hereof.
|
21 |
Financial covenants
|
21.1 |
Financial definitions
|
|
(a) |
cash in hand or on deposit with any bank
|
|
(b) |
Marketable Securities valued at their then published market value rates; an
|
|
(c) |
any other instrument, security or investment approved by the Majority Lenders,
|
|
(a) |
the Mortgaged Ships, as most recently determined pursuant to valuations made in accordance with the provisions of clause 26 (Minimum security value); and
|
|
(b) |
all other Fleet Vessels (other than the Mortgaged Ships), as most recently determined pursuant to valuations of such vessels provided to the Agent together with each Compliance Certificate and made in accordance with the provisions
of clause 26 (Minimum security value) which shall apply for the purposes of this paragraph mutatis mutandis to each Fleet Vessel as if each such vessel was a Ship.
|
21.2 |
Financial condition
|
|
(a) |
Cash and Cash Equivalents: the Group’s Cash and Cash Equivalents as at the end of, and in relation to, each Measurement Period, shall be not less than 8 per cent of the Total Liabilities in
relation to that Measurement Period; and
|
|
(b) |
Consolidated leverage ratio: the ratio of Total Liabilities to the Market Value Adjusted Total Assets shall, at all times during each Measurement Period, be not higher than 0.7:1.0.
|
21.3 |
Financial testing
|
22 |
General undertakings
|
22.1 |
Undertaking to comply
|
22.2 |
Use of proceeds
|
22.3 |
Authorisations
|
|
(a) |
obtain, comply with and do all that is necessary to maintain in full force and effect; and
|
|
(b) |
supply certified copies to the Agent of,
|
|
(i) |
enable it to perform its obligations under the Transaction Documents;
|
|
(ii) |
ensure the legality, validity, enforceability or admissibility in evidence of any Transaction Document; and
|
|
(iii) |
carry on its business where failure to do so has, or is reasonably likely to have, a Material Adverse Effect.
|
22.4 |
Compliance with laws
|
22.5 |
Tax compliance
|
|
(a) |
Each Obligor shall (and shall ensure that each other Group Member will) pay and discharge all Taxes imposed upon it or its assets within the time period allowed without incurring penalties unless and only to the extent that:
|
|
(i) |
such payment is being contested in good faith;
|
|
(ii) |
adequate reserves are being maintained for those Taxes and the costs required to contest them which have been disclosed in its latest financial statements delivered to the Agent under clause 20.1 (Financial
statements); and
|
|
(iii) |
such payment can be lawfully withheld.
|
|
(b) |
Except as approved by the Majority Lenders, each Obligor shall maintain its residence for Tax purposes in the jurisdiction in which it is formed or (as the case may be) incorporated and ensure that it is not resident for Tax purposes
in any other jurisdiction.
|
22.6 |
Change of business
|
22.7 |
Merger and corporate reconstruction
|
|
(a) |
no Obligor shall (and shall ensure that no other Group Member will) enter into any amalgamation, demerger, merger, consolidation redomiciliation, legal migration or corporate reconstruction (other than the solvent liquidation of any
Group Member which is not an Obligor so long as any payments or assets distributed as a result of such liquidation or reorganisation are distributed to other Group Members); and
|
|
(b) |
none of the Obligors nor any other Group Member nor the Group will change their corporate structure.
|
22.8 |
Pension exposure
|
22.9 |
Further assurance
|
|
(a) |
Each Obligor shall promptly do all such acts or execute all such documents (including assignments, transfers, mortgages, charges, notices and instructions) as the Agent may reasonably specify (and in such form as the Agent or the
Security Agent may reasonably require in favour of the Security Agent or its nominee(s)):
|
|
(i) |
to perfect the Security Interests created or intended to be created by that Obligor under or evidenced by, the Security Documents (which may include the execution of a mortgage, charge, assignment or other security over all or any of
the assets which are, or are intended to be, the subject of the Security Documents) or to protect, maintain or ensure the priority of such Security Interests or for the exercise of any rights, powers and remedies of the Security Agent
and/or any other Finance Parties provided by or pursuant to the Finance Documents or by law;
|
|
(ii) |
to confer on the Security Agent and/or any other Finance Parties Security Interests over any property and assets of that Obligor located in any jurisdiction equivalent or similar to the Security Interest intended to be conferred by
or pursuant to the Security Documents;
|
|
(iii) |
to facilitate the realisation of the assets which are, or are intended to be, the subject of the Security Documents; and/or
|
|
(iv) |
to facilitate the accession by a New Lender to any Security Document following an assignment in accordance with clause 31.1 (Assignments by the Lenders).
|
|
(b) |
Each Obligor shall take all such action as is available to it (including making all filings and registrations) as may be necessary for the purpose of the creation, perfection, protection or maintenance of any Security Interest (or
the priority of any Security Interest) conferred or intended to be conferred on the Security Agent and/or any other Finance Parties by or pursuant to the Finance Documents.
|
22.10 |
Negative pledge in respect of Charged Property and Obligor’s shares
|
|
(a) |
Except as approved by the Majority Lenders and for Permitted Maritime Liens, no Obligor will grant or allow to exist any Security Interest over:
|
|
(i) |
any Charged Property; or
|
|
(ii) |
any shares, partnership interest or units or limited liability company interest in any Guarantor (other than the Parent) or any Borrower, or any rights deriving from, or related to, such shares, partnership interest or units or
limited liability company interest.
|
|
(b) |
Each Obligor will procure that all of the shares, partnership interest or units or limited liability company interest of or in all of the Obligors will be in registered form (and not in bearer form) at all times.
|
22.11 |
Environmental matters
|
|
(a) |
The Agent will be notified as soon as reasonably practicable of any Environmental Claim being made against any Group Member or any Fleet Vessel and of any Environmental Incident which may give rise to such a claim and will be kept
regularly and promptly informed in reasonable detail of the nature of, and response to, any such Environmental Incident and the defence to any such claim.
|
|
(b) |
Environmental Laws (and any consents, licences or approvals obtained under them) applicable to Fleet Vessels will not be violated in a way which might have a Material Adverse Effect.
|
22.12 |
Syndication
|
22.13 |
Sanctions
|
|
(a) |
No Obligor nor any other Group Member nor any Affiliate of any Group Member will, directly or indirectly, make any proceeds of the Loan available to, or for the benefit of, a Prohibited Person or any individual, entity or any other
person in any country or territory which is or whose government is, the subject of country-wide or territory-wide Sanctions (including, without limitation, Cuba, Iran, Burma (Myanmar), North Korea, Sudan, Syria and the Crimea Region as
at the date of this Agreement), or any persons owned or controlled by or acting on behalf of such persons, or permit or authorise any such proceeds to be applied in a manner or for a purpose prohibited by Sanctions.
|
|
(b) |
The Borrowers will prevent any Mortgaged Ship from being used, directly or indirectly:
|
|
(i) |
by, or for the benefit of, any Prohibited Person or any person owned or controlled by any Prohibited Person (including from being sold, chartered, leased or otherwise provided directly or indirectly to any Prohibited Person), but
always excluding, as of the date of this Agreement, each of the Charterers, and then only to the extent that, and for as long as, the relevant Charter does not cause any Party or any other person to be in violation of any Sanctions;
|
|
(ii) |
in any trade which could expose the relevant Ship, any Finance Party, any manager of the Ships, the ships’ crew or the Ships’ insurers to enforcement proceedings or any other consequences whatsoever arising from Sanctions; and/or
|
|
(iii) |
in any transport of any goods that are prohibited to be sold, supplied, transferred, purchased, exported or imported under any Sanctions.
|
|
(c) |
The Borrowers will (so long as failing to do so would violate Sanctions) prevent each Mortgaged Ship from trading to or from Iranian and/or Syrian ports or carrying crude oil, petroleum products or petrochemical products or natural
gas if they originate in Iran and/or Syria, or are being exported from or via Iran and/or Syria to any other country.
|
|
(d) |
Without prejudice to the rights of the Finance Parties under any other provisions of this Agreement and the other Finance Documents, if an Owner finds out that its Ship, without its knowledge, has been sold, chartered, conferred,
leased or otherwise provided directly or indirectly to any Prohibited Person (but always excluding, as of the date of this Agreement, each of the Charterers, and then only to the extent that, and for as long as, the relevant Charter
does not cause any Party or any other person to be in violation of any Sanctions), it shall terminate, as soon as possible and in any case within thirty (30) days after the day it finds out that any of the events described in this
clause has occurred, the relationship with the Prohibited Person under the premise that the Finance Parties may commit a breach of law by this behaviour. In this case the Borrowers will also inform the Finance Parties immediately.
|
|
(e) |
In addition and without prejudice to any of the foregoing, the Obligors shall procure that:
|
|
(i) |
no proceeds, funds or benefit from any activity or dealing with or involving a Prohibited Person are used in discharging any obligation due or owing to any Finance Party under the Finance Documents or are credited to any Account and
the Obligors agree that each Finance Party that receives or is to receive any such payment shall be entitled to decline its receipt if it considers it to be in breach of this paragraph (e), and if it does so then the Obligors shall not
be deemed discharged from their obligation to make such payment unless they make such payment to such Finance Party in a manner that is not considered by such Finance Party to be in breach of this paragraph (e); and
|
|
(ii) |
no payment to a Prohibited Person is effected by them, whether to discharge any obligation due or owing to such other person or for any other purpose whatsoever, whether through the use of any Account or otherwise.
|
|
(f) |
Each Owner will provide the Finance Parties upon their request with all relevant documentation related to its Mortgaged Ship, and the transported goods:
|
|
(i) |
to demonstrate that such Owner is not acting in breach of any Sanctions; and
|
|
(ii) |
which a Finance Party is required to disclose to any regulatory authority pursuant to any Sanctions.
|
|
(g) |
For the purposes of this clause 22.13 the following words shall have the following meanings:
|
|
(a) |
OFAC; or
|
|
(b) |
any other United States of America government sanction, export or procurement laws including, without limitation, any Sanctions, the Sectoral Sanctions Identification List and the List of Foreign Sanctions Evaders; or
|
|
(c) |
any other sanctions or other such restrictions on business dealings imposed by a member state of the European Union; or
|
|
(d) |
any other sanctions or other restrictions on business dealings imposed by Switzerland,
|
|
(i) |
the United States of America Government’s List of Specially Designated Nationals and Blocked Persons, Denied Persons List, Entities List, Debarred Parties List, Excluded Parties List and Terrorism Exclusion List;
|
|
(ii) |
Her Majesty’s Treasury’s Consolidated List of Financial Sanctions Targets and the List of Persons subject to Restrictive Measures in View of Russia’s Actions Destabilising the Situation in Ukraine ;
|
|
(iii) |
the European Union Restricted Person Lists issued under Council Regulation (EC) No. 881/2002 of 27 May 2002, Council Regulation (EC) No. 2580/2001 of 27 December 2001 and Council Common Position 2005/725/CFSP of 17 October 2005;
|
|
(iv) |
the United Nations Consolidated List established and maintained by the 1267 Committee;
|
|
(v) |
the sanctions lists issued and administered by the State Secretariat for Economic Affairs of Switzerland (SECO) and/or the Swiss Directorate of Public International Law.
|
|
(a) |
the United States government;
|
|
(b) |
the United Nations;
|
|
(c) |
the United Kingdom;
|
|
(d) |
the European Union (or any member state thereof);
|
|
(e) |
Hong Kong; or
|
|
(f) |
Switzerland,
|
22.14 |
Borrowers’ own account
|
22.15 |
Inspection
|
22.16 |
Anti-corruption law
|
|
(a) |
No Obligor shall (and shall ensure that no other Group Member will) directly or indirectly use the proceeds of the Facility for any purpose which would breach the Bribery Act 2010, the United States Foreign Corrupt Practices Act of
1977 or other similar legislation in other jurisdictions.
|
|
(b) |
Each Obligor shall (and shall ensure that each other Group Member will):
|
|
(i) |
conduct its businesses in compliance with applicable anti-corruption laws; and
|
|
(ii) |
maintain policies and procedures designed to promote and achieve compliance with such laws.
|
23 |
Dealings with Ship
|
23.1 |
Undertaking to comply
|
23.2 |
Ship’s name and registration
|
|
(a) |
The Ship’s name shall only be changed after prior notice to the Agent.
|
|
(b) |
The Ship shall be permanently registered in the name of the relevant Owner with the relevant Registry under the laws of its Flag State. Except with approval from all Lenders, the Ship shall not be registered under any other flag or
at any other port or fly any other flag (other than that of its Flag State). If that registration is for a limited period, it shall be renewed at least 45 days before the date it is due to expire and the Agent shall be notified of that
renewal at least 30 days before that date.
|
|
(c) |
Nothing will be done and no action will be omitted if that might result in such registration being forfeited or imperilled or the Ship being required to be registered under the laws of another state of registry.
|
23.3 |
Sale or other disposal of Ship
|
|
(a) |
with approval from all the Lenders; or
|
|
(b) |
if no Event of Default is then continuing, for a sale to a buyer who is not an Affiliate of the Borrowers for a cash price payable on completion of the sale which is no less than the amount by which the Commitments must be reduced
and the Loan prepaid under clause 7.9 (Sale or Total Loss) on completion of the sale and then only provided that the Obligors comply with their prepayment and other obligations under clause 7.9 (Sale or Total Loss) and the other provisions of this Agreement on completion of such sale,
|
23.4 |
Manager
|
23.5 |
Copy of Mortgage on board
|
23.6 |
Notice of Mortgage
|
23.7 |
Conveyance on default
|
23.8 |
Chartering
|
|
(a) |
Except with approval, the relevant Owner shall not enter into any charter commitment for a Ship (other than the Ship’s Charter) which is:
|
|
(i) |
a bareboat or demise charter or passes possession and operational control of the Ship to another person;
|
|
(ii) |
capable of lasting more than 18 calendar months (taking into account any options to extend or renew contained therein);
|
|
(iii) |
on terms as to payment or amount of hire which are materially less beneficial to it than the terms which at that time could reasonably be expected to be obtained on the open market for vessels of the same age and type as the Ship
under charter commitments of a similar type and period; or
|
|
(iv) |
to another Group Member.
|
|
(b) |
Further, without prejudice to the rights of the Finance Parties under the provisions of paragraph (a) above and any other provisions of the Finance Documents, the Borrowers shall advise the Agent promptly of any proposed charter
commitment in respect of a Ship (other than the Ship’s Charter) which has an original term in excess of 18 calendar months (taking into account any option to extend or renew contained therein) together with any guarantee or security
given by any person for the charterer’s obligations under it, and:
|
|
(i) |
deliver a certified copy of each such charter commitment and any such guarantee or security, to the Agent forthwith after it has been entered into;
|
|
(ii) |
forthwith following a demand made by the Agent (acting on the instructions of the Majority Lenders):
|
|
(A) |
procure that the relevant Owner executes a charter assignment in the same form as the Charter Assignment of any such charter commitment and/or any such guarantee or security in favour of the Security Agent and any notice of
assignment required in connection therewith; and
|
|
(B) |
procure the service of any such notice of assignment on the relevant charterer and/or guarantor, and the acknowledgement of such notice by the relevant charterer and/or guarantor;
|
|
(iii) |
deliver to the Agent such documents and evidence of the type referred to in Schedule 3 (Conditions precedent), in relation to any such charter assignment or any other related matter referred
to in this paragraph (b), as the Agent (acting on the instructions of the Majority Lenders in their sole discretion) shall require; and
|
|
(iv) |
pay on demand by the Agent all legal and other costs incurred by the Agent and/or the Lenders and/or the Security Agent in connection with or in relation to any such assignment or any other related matter referred to in this
paragraph (b),
|
23.9 |
Lay up
|
23.10 |
Sharing of Earnings
|
23.11 |
Payment of Earnings
|
24 |
Condition and operation of Ship
|
24.1 |
Defined terms
|
24.2 |
Repair
|
24.3 |
Modification
|
24.4 |
Removal of parts
|
24.5 |
Third party owned equipment
|
24.6 |
Maintenance of class; compliance with laws and codes
|
24.7 |
Surveys
|
24.8 |
Inspection and notice of dry-docking
|
24.9 |
Prevention of arrest
|
24.10 |
Release from arrest
|
24.11 |
Information about the Ship
|
24.12 |
Notification of certain events
|
|
(a) |
any damage to the Ship where the cost of the resulting repairs may exceed the Major Casualty Amount for such Ship;
|
|
(b) |
any occurrence which may result in the Ship becoming a Total Loss;
|
|
(c) |
any requisition of the Ship for hire;
|
|
(d) |
any Environmental Incident involving the Ship and Environmental Claim being made in relation to such an incident;
|
|
(e) |
any withdrawal or threat to withdraw any applicable operating certificate or any withdrawal of, or threat to withdraw, its registration with the Flag State;
|
|
(f) |
the issue of any operating certificate required under any applicable code;
|
|
(g) |
the receipt of notification that any application for such a certificate has been refused;
|
|
(h) |
any requirement or recommendation made in relation to the Ship by any insurer or the Ship’s Classification Society or by any competent authority which is not, or cannot be, complied with in the manner or time required or recommended;
and
|
|
(i) |
any arrest, hijacking or detention of the Ship or any exercise or purported exercise of a lien or other claim on the Ship or its Earnings or Insurances.
|
24.13 |
Payment of outgoings
|
24.14 |
Evidence of payments
|
|
(a) |
the wages and allotments and the insurance and pension contributions of the Ship’s crew are being promptly and regularly paid;
|
|
(b) |
all deductions from its crew’s wages in respect of any applicable Tax liability are being properly accounted for; and
|
|
(c) |
the Ship’s master has no claim for disbursements other than those incurred by him in the ordinary course of trading on the voyage then in progress.
|
24.15 |
Repairers’ liens
|
24.16 |
Survey report
|
24.17 |
Lawful use
|
|
(a) |
in any way or in any activity which is unlawful under international law or the domestic laws of any relevant country;
|
|
(b) |
in carrying illicit or prohibited goods;
|
|
(c) |
in a way which may make it liable to be condemned by a prize court or destroyed, seized or confiscated; or
|
|
(d) |
if there are hostilities in any part of the world (whether war has been declared or not), in carrying contraband goods,
|
24.18 |
War zones
|
25 |
Insurance
|
25.1 |
Insurance terms
|
25.2 |
Coverage required
|
|
(a) |
against fire and usual marine risks (including excess risks) and war risks (including war protection and indemnity risks (including crew) and terrorism risks, piracy and confiscation risks) on an agreed value basis, for the higher of
its minimum hull cover and its market value (and with the insured value under the hull and machinery cover to be at least 66 2/3 % of its market value);
|
|
(b) |
against P&I risks for the highest amount then available in the insurance market for vessels of similar age, size and type as the Ship (but, in relation to liability for oil pollution, for an amount of not less than
$1,000,000,000) and a freight, demurrage and defence cover;
|
|
(c) |
against such other risks and matters which the Agent notifies it that it considers reasonable for a prudent shipowner or operator engaged in the same or similar business
|
|
(d) |
on terms which comply with the other provisions of this clause 25.
|
25.3 |
Placing of cover
|
|
(a) |
in the name of the relevant Owner and (in the case of the Ship’s hull cover) no other person (other than the Security Agent and any other Finance Party, if required by the Agent) if required by the Agent (unless such other person is
approved and, if so required by the Agent, has duly executed and delivered a first priority assignment of its interest in the Ship’s Insurances to the Security Agent (and any other Finance Party required by the Agent) and/or executed
and delivered to the Security Agent any other letter of subordination or undertaking, in each case in an approved form and provided such supporting documents and opinions in relation to that assignment as the Agent requires);
|
|
(b) |
if the Agent so requests, in the joint names of the relevant Owner and the Security Agent and any other Finance Party required by the Agent) (without liability on the part of the Security Agent or such Finance Party for premiums or
calls);
|
|
(c) |
in dollars or another approved currency;
|
|
(d) |
arranged through approved brokers or direct with approved insurers or protection and indemnity or war risks associations;
|
|
(e) |
in full force and effect; and
|
|
(f) |
on approved terms and with approved insurers or associations.
|
25.4 |
Deductibles
|
25.5 |
Mortgagee’s insurance
|
|
(a) |
The Borrowers shall promptly reimburse to the Agent the cost (as conclusively certified by the Agent) of taking out and keeping in force in respect of the Ship and the other Mortgaged Ships on approved terms, or in considering or
making claims under:
|
|
(i) |
a mortgagee’s interest insurance and a mortgagee’s additional perils (all P&I risks) cover for the benefit of the Finance Parties for an aggregate amount of up to 120% per cent of the Loan at such time; and
|
|
(ii) |
any other insurance cover which the Agent reasonably requires in respect of any Finance Party’s interests and potential liabilities (whether as mortgagee of the Ship or beneficiary of the Security Documents).
|
|
(b) |
The Agent shall take out mortgagee’s interest insurance (on the terms provided under clause 25.5(a)) prior to the Utilisation and keep such mortgagee’s interest insurance in force in respect of the Ship throughout the Mortgage Period
of that Ship.
|
25.6 |
Fleet liens, set off and cancellations
|
|
(a) |
set off against any claims in respect of the Ship any premiums due in respect of any of such other vessels insured (other than other Mortgaged Ships); or
|
|
(b) |
cancel that cover because of non-payment of premiums in respect of such other vessels,
|
25.7 |
Payment of premiums
|
25.8 |
Details of proposed renewal of Insurances
|
25.9 |
Instructions for renewal
|
25.10 |
Confirmation of renewal
|
25.11 |
P&I guarantees
|
25.12 |
Insurance documents
|
25.13 |
Letters of undertaking
|
25.14 |
Insurance Notices and Loss Payable Clauses
|
25.15 |
Insurance correspondence
|
25.16 |
Qualifications and exclusions
|
25.17 |
Independent report
|
25.18 |
Collection of claims
|
25.19 |
Employment of Ship
|
25.20 |
Declarations and returns
|
25.21 |
Application of recoveries
|
25.22 |
Settlement of claims
|
25.23 |
Change in insurance requirements
|
26 |
Minimum security value
|
26.1 |
Valuation of assets
|
26.2 |
Valuation frequency
|
26.3 |
Expenses of valuation
|
26.4 |
Valuations procedure
|
26.5 |
Currency of valuation
|
26.6 |
Basis of valuation
|
|
(a) |
without physical inspection (unless required by the Agent);
|
|
(b) |
on the basis of a sale for prompt delivery for a price payable in full in cash on delivery at arm’s length on normal commercial terms between a willing buyer and a willing seller; and
|
|
(c) |
without taking into account the benefit (but taking into account the burden) of any charter commitment.
|
26.7 |
Information required for valuation
|
26.8 |
Approval of valuers
|
26.9 |
Appointment of Approved Brokers
|
26.10 |
Number of valuers
|
|
(a) |
Each valuation must be carried out by two (2) Approved Brokers both of whom shall be nominated by the Borrowers. If the Borrowers fail promptly to nominate an Approved Broker then the Agent may nominate that Approved Broker.
|
|
(b) |
If the two (2) valuations of a Ship made by two (2) Approved Brokers vary by more than 15% (by reference to the lower of the two), then a third Approved Broker must be nominated by the Borrowers to provide a valuation of such Ship.
If the Borrowers fail to promptly nominate such third Approved Broker, then the Agent may nominate that third Approved Broker.
|
26.11 |
Differences in valuations; common valuations
|
|
(a) |
If different valuations provided by individual Approved Brokers vary, the value of the relevant Ship for the purposes of the Finance Documents will be the mean average of those valuations.
|
|
(b) |
If any Approved Broker provides a range of values for a Ship, the value of such Ship for the purposes of the Finance Documents will be the mean average of the values comprising such range.
|
26.12 |
Security shortfall
|
|
(a) |
If at any time the Security Value is less than the Minimum Value, the Agent may, and shall, if so directed by the Majority Lenders, by notice to the Borrowers require that such deficiency be remedied. The Borrowers shall then within
15 days of receipt of such notice
|
|
(i) |
provide additional security over other assets approved by all the Lenders in accordance with this clause 26; and/or
|
|
(ii) |
cancel part of the Total Commitments under clause 7.4 (Voluntary cancellation) and prepay under clause 7.5 (Voluntary prepayment) (but on five Business
Days’ notice instead of the period required by such clause) a corresponding amount of the Loan.
|
|
(b) |
Any prepayment pursuant to clause 26.12(a)(ii) shall be made without any requirement as to any minimum amount required by clause 7.5 (Voluntary prepayment).
|
26.13 |
Creation of additional security
|
|
(a) |
that additional security, its value and the method of its valuation have been approved by all the Lenders (and providing to the Security Agent, for that purpose, pledged or charged and blocked cash deposits in dollars is hereby
approved by all the Lenders);
|
|
(b) |
a Security Interest over that security has been constituted in favour of the Security Agent or (if appropriate) the Finance Parties in an approved form and manner;
|
|
(c) |
this Agreement has been unconditionally amended in such manner as the Agent requires in consequence of that additional security being provided; and
|
|
(d) |
the Agent, or its duly authorised representative, has received such documents and evidence it may require in relation to that amendment and additional security including documents and evidence of the type referred to in Schedule 3 (Conditions precedent) in relation to that amendment and additional security and its execution and (if applicable) registration.
|
27 |
Chartering undertakings
|
27.1 |
Undertaking to comply
|
27.2 |
Variations
|
27.3 |
Releases and waivers
|
27.4 |
Termination by the relevant Owner
|
27.5 |
Charter performance
|
27.6 |
Notice of assignment
|
27.7 |
Payment of Charter Earnings
|
27.8 |
Termination Cure
|
|
(a) |
as soon as possible after such cancellation, rescission, frustration or withdrawal, the relevant Owner of that Ship will enter into an approved time charter commitment in respect of that Ship on terms (including as to tenor, charter
hire and credit standing of the charterer) which are in the opinion of the Agent (acting on the instructions of the Majority Lenders in their absolute and unfettered discretion) not less favourable to the relevant Owner, the Group and
the Finance Parties than those of the original Charter for that Ship; and
|
|
(b) |
forthwith after the entry into such charter commitment, the relevant Owner will grant in favour of the Security Agent a Security Interest in respect of such charter commitment in a form substantially similar to a Charter Assignment
and approved by all the Lenders and will provide and deliver to the Agent in respect of the same, any documents and evidence of the nature described in Schedule 3 (Conditions precedent) as
required by the Agent.
|
28 |
Bank accounts
|
28.1 |
Undertaking to comply
|
28.2 |
Earnings Accounts
|
|
(a) |
An Owner or all of the Owners jointly shall be the holder(s) of one or more Accounts with an Account Bank which is designated as an “Earnings Account” for the purposes of the Finance Documents.
|
|
(b) |
The Earnings of the Mortgaged Ships and all moneys payable to the relevant Owners under the Ships’ Insurances shall be paid by the persons from whom they are due to an Earnings Account unless required to be paid to the Security Agent
under the relevant Finance Documents.
|
|
(c) |
The relevant Account Holder(s) shall not withdraw amounts standing to the credit of an Earnings Account except as permitted by paragraph (d) below.
|
|
(d) |
If there is no continuing Event of Default, the relevant Account Holder(s) may withdraw the following amounts from an Earnings Account:
|
|
(i) |
payments then due to Finance Parties under the Finance Documents (other than payments due in respect of a prepayment);
|
|
(ii) |
payments to another Account;
|
|
(iii) |
payments of the proper costs and expenses of insuring, repairing, operating and maintaining any Mortgaged Ship;
|
|
(iv) |
payments of dividends to the extent permitted by clause 29.13 (Distributions and other payments);
|
|
(v) |
repayment of unsecured indebtedness of the Parent to the extent permitted by clause 29.3 (Financial Indebtedness); and
|
|
(vi) |
payments to purchase other currencies in amounts and at times required to make payments referred to above in the currency in which they are due.
|
28.3 |
Cash Collateral Account
|
|
(a) |
The Borrowers jointly shall be the holders of an interest bearing Account denominated in dollars with an Account Bank which is designated as the “Cash Collateral Account” for the purposes of the Finance Documents.
|
|
(b) |
On or before the Utilisation Date, the Borrowers shall deposit in the Cash Collateral Account (and the Borrowers shall maintain at all times thereafter in the Cash Collateral Account) the amount of Fifty million dollars ($50,000,000)
(the Minimum Liquidity Amount), without taking into account for that purpose the Blocked Amount which shall not constitute any part or all of the Minimum Liquidity Amount.
|
|
(c) |
Except where all the proceeds of the Loan are paid directly to the lenders of the Existing Indebtedness on the Utilisation Date subject to and in accordance with the terms of this Agreement, on the Utilisation Date:
|
|
(i) |
an amount of Two hundred and four million six hundred thousand dollars ($204,600,000) of the proceeds of the Loan shall be deposited in the Cash Collateral Account immediately upon Utilisation; and
|
|
(ii) |
the Borrowers shall deposit in the Cash Collateral Account an additional amount of Forty five million four hundred thousand dollars ($45,400,000) (without taking into account for that purpose the Minimum Liquidity Amount).
|
|
(d) |
The Borrowers shall not withdraw amounts standing to the credit of the Cash Collateral Account except as permitted by paragraph (e) below.
|
|
(e) |
If:
|
|
(i) |
there is no continuing Default at the time of the withdrawal nor would it result from the withdrawal immediately thereafter; and
|
|
(ii) |
all of the representations set out in clause 19 (Representations) are true; and
|
|
(iii) |
no Total Loss has occurred in respect of any Ship; and
|
|
(iv) |
immediately after the withdrawal, the balance on the Cash Collateral Account will be at least Fifty million dollars ($50,000,000) (being not less than the amount required to be maintained under paragraph (b) above as Minimum
Liquidity Amount); and
|
|
(v) |
the Security Value is no less than the Minimum Value at the time of, and immediately after, the withdrawal,
|
|
(f) |
If the Existing Unsecured Indebtedness is not repaid by 30 October 2019 (or such other later date as the Majority Lenders may accept in writing), the Majority Lenders may forthwith apply the Blocked Amount against part repayment of
the Loan.
|
28.4 |
Other provisions
|
|
(a) |
An Account may only be designated for the purposes described in this clause 28 if:
|
|
(i) |
such designation is made in writing by the Agent and acknowledged by the Borrowers and specifies the name and address of the Account Bank and the Account Holder(s) and the number and any designation or other reference attributed to
the Account;
|
|
(ii) |
an Account Security has been duly executed and delivered by the relevant Account Holder(s) in favour of the Security Agent (and any other Finance Party required by the
Agent);
|
|
(iii) |
any notice required by the Account Security to be given to an Account Bank has been given to, and acknowledged by, the Account Bank in the form required by the relevant Account Security; and
|
|
(iv) |
the Agent, or its duly authorised representative, has received such documents and evidence it may require in relation to the Account and the Account Security including documents and evidence of the type referred to in Schedule 3 (Conditions precedent) in relation to the Account and the relevant Account Security.
|
|
(b) |
The rates of payment of interest and other terms regulating any Account will be a matter of separate agreement between the relevant Account Holder(s) and an Account Bank.
|
|
(c) |
If an Account is a fixed term deposit account, the relevant Account Holder(s) may select the terms of deposits until the relevant Account Security has become enforceable and the Security Agent directs otherwise.
|
|
(d) |
The relevant Account Holder(s) shall not close any Account or alter the terms of any Account from those in force at the time it is designated for the purposes of this clause 28 or waive any of its rights in relation to an Account
except with approval.
|
|
(e) |
The relevant Account Holder(s) shall deposit with the Security Agent all certificates of deposit, receipts or other instruments or securities relating to any Account, notify the Security Agent of any claim or notice relating to an
Account from any other party and provide the Agent with any other information it may request concerning any Account.
|
|
(f) |
Each of the Agent and the Security Agent agrees that if it is an Account Bank in respect of an Account then there will be no restrictions on creating a Security Interest over that Account as contemplated by this Agreement and it
shall not (except with the approval of the Majority Lenders) exercise any right of combination, consolidation or set-off which it may have in respect of that Account in a manner adverse to the rights of the other Finance Parties.
|
29 |
Business restrictions
|
29.1 |
Undertaking to comply
|
29.2 |
General negative pledge
|
|
(a) |
In this clause 29.2, Quasi-Security means an arrangement or transaction described in paragraph (c) below.
|
|
(b) |
No Obligor shall create or permit to subsist any Security Interest over any of its assets.
|
|
(c) |
(Without prejudice to clauses 29.3 (Financial Indebtedness) and 29.7 (Disposals)), no Obligor shall:
|
|
(i) |
sell, transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to, or re-acquired by, an Obligor or any other Group Member;
|
|
(ii) |
sell, transfer, factor or otherwise dispose of any of its receivables on recourse terms;
|
|
(iii) |
enter into any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject to a combination of accounts; or
|
|
(iv) |
enter into any other preferential arrangement having a similar effect,
|
|
(d) |
Paragraphs (b) and (c) above do not apply to any Security Interest or (as the case may be) Quasi-Security, listed below:
|
|
(i) |
those granted or expressed to be granted by any of the Security Documents; and
|
|
(ii) |
in relation to a Mortgaged Ship, Permitted Maritime Liens.
|
29.3 |
Financial Indebtedness
|
|
(a) |
the Existing Indebtedness and then only:
|
|
(i) |
in the case of the Existing Secured Indebtedness, until the Utilisation; and
|
|
(ii) |
in the case of the Existing Unsecured Indebtedness, until the earlier of:
|
|
(A) |
the date when all of the Blocked Amount is released for the purpose of repayment of the Existing Unsecured Indebtedness in full pursuant to paragraph (e) of clause 28.3 (Cash Collateral Account);
and
|
|
(B) |
30 October 2019 (or such later date as may be agreed by the Majority Lenders);
|
|
(b) |
Financial Indebtedness incurred under the Finance Documents;
|
|
(c) |
Financial Indebtedness owing to other Group Members or Affiliates of an Obligor or the Sponsor or any of its Affiliates, which is unsecured and fully subordinated at all times to any indebtedness owing to the Lender under the Finance
Documents from time to time and is otherwise on terms acceptable to the Agent (acting on the instructions of the Majority Lenders) and always provided that no payments of principal or interest or any other payments thereunder of
whatsoever nature may be made by any Obligor throughout the Facility Period except that payment of principal or interest by the Parent to the Sponsor in respect of any such permitted Financial Indebtedness may be made if and for as long
as (i) no Event of Default exists at the time of, or could result from, any such payment and (ii) the Security Value is higher than or equal to the Minimum Value at the time of, and immediately after, any such payment;
|
|
(d) |
Financial Indebtedness incurred by the Parent and owing to any person (other than any Group Members or Affiliates of an Obligor or the Sponsor or any of its Affiliates) which is unsecured;
|
|
(e) |
Financial Indebtedness permitted under clause 29.4 (Guarantees); and
|
|
(f) |
Financial Indebtedness permitted under clause 29.5 (Loans and credit).
|
29.4 |
Guarantees
|
|
(a) |
guarantees in favour of its trade creditors given in the ordinary course of its business;
|
|
(b) |
guarantees issued by the Parent to lenders (which are not Group Members of Affiliates of any Obligor) of Financial Indebtedness of other Group Members; and
|
|
(c) |
guarantees which are Financial Indebtedness permitted under clause 29.3 (Financial Indebtedness).
|
29.5 |
Loans and credit
|
|
(a) |
loans or credit to another Borrower or Guarantor permitted under clause 29.3 (Financial Indebtedness); and
|
|
(b) |
trade credit granted by it to its customers on normal commercial terms in the ordinary course of its trading activities.
|
29.6 |
Bank accounts, operating leases and other financial transactions
|
|
(a) |
maintain any current or deposit account with a bank or financial institution except for the Accounts and the deposit of money, operation of current accounts and the conduct of electronic banking operations through the Accounts;
|
|
(b) |
hold cash in any account (other than the Accounts) over or in respect of which any set-off, combination of accounts, netting or Security Interest exists except as permitted by clause 29.2 (General
negative pledge);
|
|
(c) |
enter into any obligations under operating leases relating to assets except on normal commercial terms in the ordinary course of business; or
|
|
(d) |
be party to any banking or financial transaction, whether on or off balance sheet, that is not expressly permitted under this clause 29.
|
29.7 |
Disposals
|
|
(a) |
disposals of assets made in (and on terms reflecting) the ordinary course of trading of the disposing entity;
|
|
(b) |
disposals of obsolete assets, or assets which are no longer required for the purpose of the business of the relevant Obligor, in each case for cash on normal commercial terms and on an arm’s length basis;
|
|
(c) |
disposals permitted by clauses 29.2 (General negative pledge), 29.3 (Financial Indebtedness) or 23.3 (Sale or other disposal of a Ship);
|
|
(d) |
disposals by the Parent of one or more of its assets which do not constitute all or a material part of its assets, are not Charged Property and are not subject to clause 22.10 (Negative pledge in
respect of Charged Property and Obligor’s shares);
|
|
(e) |
dealings with its own trade creditors with respect to book debts in the ordinary course of trading; and
|
|
(f) |
the application of cash or cash equivalents in the acquisition of assets or services in the ordinary course of its business.
|
29.8 |
Contracts and arrangements with Affiliates
|
29.9 |
Subsidiaries
|
29.10 |
Acquisitions and investments
|
|
(a) |
capital expenditures or investments related to maintenance of a Ship in the ordinary course of its business;
|
|
(b) |
acquisitions of assets in the ordinary course of business (not being new businesses or vessels) for the purpose of investing in, upgrading or maintaining the Ships;
|
|
(c) |
the incurrence of liabilities in the ordinary course of its business;
|
|
(d) |
any loan or credit not otherwise prohibited under this Agreement; or
|
|
(e) |
pursuant to any Finance Documents or any Charter Documents to which it is party.
|
29.11 |
Reduction of capital
|
29.12 |
Increase in capital
|
29.13 |
Distributions and other payments
|
|
(a) |
No Obligor (other than the Parent and the Manager) shall:
|
|
(i) |
declare or pay (including by way of set-off, combination of accounts or otherwise) any dividend, charge, fee or other distribution (or interest on any unpaid dividend, charge, fee or other distribution) (whether in cash or in kind)
on or in respect of its share capital, partnership interest or units or limited liability company interest (or any class of the same) or any warrants for the time being in issue;
|
|
(ii) |
repay or distribute any dividend or share premium reserve;
|
|
(iii) |
pay or agree to pay any management, advisory or other fee to or to the order of any of the unitholders of the Parent;
|
|
(iv) |
redeem, repurchase, defease, retire or repay any of its share capital, partnership interest or units or limited liability company interest or resolve to do so; or
|
|
(v) |
make any payment (including by way of set-off, combination of accounts or otherwise) by way of interest, or repayment, redemption, purchase or other payment, in respect of any shareholder or member loan, loan stock or similar
instrument,
|
|
(A) |
no Event of Default has occurred and is continuing at the time of the declaration or payment of any such dividend, distribution or other payment;
|
|
(B) |
no Event of Default would result from the declaration or payment of the same;
|
|
(C) |
the Security Value is no less than the Minimum Value at the time of the declaration or payment of any such dividend, distribution or other payment; and
|
|
(D) |
the Majority Lenders are satisfied that immediately following such declaration or payment, the Security Value will continue to exceed the Minimum Value.
|
|
(b) |
The Parent shall not:
|
|
(i) |
declare or pay (including by way of set-off, combination of accounts or otherwise) any dividend, charge, fee or other distribution (or interest on any unpaid dividend, charge, fee or other distribution) (whether in cash or in kind)
on or in respect of its partnership interest or units (or any class of the same) or any warrants for the time being in issue;
|
|
(ii) |
repay or distribute any dividend or share premium reserve;
|
|
(iii) |
pay or agree to pay any management, advisory or other fee to or to the order of any of the unitholders of the Parent;
|
|
(iv) |
redeem, repurchase, defease, retire or repay any of its partnership interest or units or resolve to do so; or
|
|
(v) |
make any payment (including by way of set-off, combination of accounts or otherwise) by way of interest, or repayment, redemption, purchase or other payment, in respect of any shareholder or member loan, loan stock or similar
instrument,
|
|
(A) |
no Event of Default has occurred and is continuing at the time of the declaration or payment of any such dividend or distribution; and
|
|
(B) |
no Event of Default would result from the declaration or payment of the same; and
|
|
(C) |
the Security Value is no less than the Minimum Value at the time of the declaration or payment of any such dividend or distribution; and
|
|
(D) |
the Majority Lenders are satisfied that immediately following such declaration or payment, the Security Value will continue to exceed the Minimum Value.
|
30 |
Events of Default
|
30.1 |
Non-payment
|
30.2 |
Existing Unsecured Indebtedness
|
30.3 |
Financial covenants; Sanctions
|
|
(a) |
The Obligors do not comply with clause 21 (Financial covenants).
|
|
(b) |
The Obligors do not comply with clause 22.13 (Sanctions) insofar as they relate to Sanctions imposed by Germany, the European Union or the United Nations.
|
30.4 |
Value of security
|
30.5 |
Insurance
|
|
(a) |
The Insurances of a Mortgaged Ship are not placed and kept in force in the manner required by clause 25 (Insurance).
|
|
(b) |
Any insurer either:
|
|
(i) |
cancels any such Insurances; or
|
|
(ii) |
disclaims liability under them or asserts that its liability under them is or should be reduced by reason of any mis-statement or failure or default by any person.
|
30.6 |
Other obligations
|
|
(a) |
An Obligor does not comply with any provision of the Finance Documents, except:
|
|
(i) |
those referred to in clauses 30.1 (Non-payment), 30.2 (Existing Unsecured Indebtedness), 30.3 (Financial covenants; Sanctions), 30.4 (Value of security) and 30.5 (Insurance) or any other provision of this clause
30); and
|
|
(ii) |
those referred to in clause 22.13 (Sanctions), insofar as they relate to Sanctions not imposed by Germany, the European Union or the United Nations,
|
|
(b) |
No Event of Default under paragraph (a) above will occur if the Agent considers that the failure to comply is capable of remedy and the failure is remedied within ten Business Days of the earlier of (A) the Agent giving notice to the
Borrowers and (B) any of the Borrowers or any other Obligor becoming aware of the failure to comply.
|
30.7 |
Misrepresentation
|
30.8 |
Cross default
|
|
(a) |
Any Financial Indebtedness of any Group Member is not paid when due nor within any originally applicable grace period.
|
|
(b) |
Any Financial Indebtedness of any Group Member is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described).
|
|
(c) |
Any commitment for any Financial Indebtedness of any Group Member is cancelled or suspended by a creditor of that Group Member as a result of an event of default (however described).
|
|
(d) |
The counterparty to a Treasury Transaction entered into by any Group Member becomes entitled to terminate that Treasury Transaction early by reason of an event of default (however described).
|
|
(e) |
Any creditor of any Group Member becomes entitled to declare any Financial Indebtedness of that Group Member due and payable prior to its specified maturity as a result of an event of default (however described).
|
30.9 |
Insolvency
|
|
(a) |
A Group Member:
|
|
(i) |
is unable or admits inability to pay its debts as they fall due;
|
|
(ii) |
is deemed to, or is declared to, be unable to pay its debts under applicable law;
|
|
(iii) |
suspends or threatens to suspend making payments on any of its debts; or
|
|
(iv) |
by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors (excluding any Finance Party in its capacity as such) with a view to rescheduling any of its indebtedness.
|
|
(b) |
The value of the assets of any Group Member is less than its liabilities (taking into account contingent and prospective liabilities).
|
|
(c) |
A moratorium is declared in respect of any indebtedness of any Group Member. If a moratorium occurs, the ending of the moratorium will not remedy any Event of Default caused by that moratorium.
|
30.10 |
Insolvency proceedings
|
|
(a) |
Any corporate action, legal proceedings or other procedure or step is taken in relation to:
|
|
(i) |
the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of any Group Member other than a solvent
liquidation or reorganisation of any Group Member which is not an Obligor;
|
|
(ii) |
a composition, compromise, assignment or arrangement with any creditor of any Group Member;
|
|
(iii) |
the appointment of a liquidator (other than in respect of a solvent liquidation of a Group Member which is not an Obligor), receiver, administrator, administrative receiver, compulsory manager or other similar officer in respect of
any Group Member or any of its assets (including the directors of any Group Member requesting a person to appoint any such officer in relation to it or any of its assets); or
|
|
(iv) |
enforcement of any Security Interest over any assets of any Group Member,
|
|
(b) |
Paragraph (a) above shall not apply to any winding-up petition (or analogous procedure or step) which is frivolous or vexatious and is discharged, stayed or dismissed within seven (7) days of commencement or, if earlier, the date on
which it is advertised.
|
30.11 |
Creditors’ process
|
|
(a) |
Any expropriation, attachment, sequestration, distress, execution or any other analogous process or enforcement action (including enforcement by a landlord) affects any asset or assets of any Group Member and is not discharged within
seven (7) days.
|
|
(b) |
Any judgment or order is made against any Group Member and is not stayed or complied with within seven (7) days.
|
30.12 |
Unlawfulness and invalidity
|
|
(a) |
It is or becomes unlawful for an Obligor to perform any of its obligations under the Finance Documents or any Transaction Security ceases to be effective.
|
|
(b) |
Any obligation or obligations of any Obligor under any Finance Documents are not (subject to the Legal Reservations) or cease to be legal, valid, binding or enforceable and the cessation individually or cumulatively materially and
adversely affects the interests of the Lenders under the Finance Documents.
|
|
(c) |
Any Finance Document or any Transaction Security ceases to be in full force and effect or ceases to be legal, valid, binding, enforceable or effective or is alleged by a party to it (other than a Finance Party) to be ineffective for
any reason.
|
|
(d) |
Any Security Document does not create legal, valid, binding and enforceable security over the assets charged under that Security Document or the ranking or priority of such security is adversely affected.
|
30.13 |
Cessation of business
|
30.14 |
Expropriation
|
30.15 |
Repudiation and rescission of Finance Documents
|
30.16 |
Litigation
|
|
(a) |
any litigation, alternative dispute resolution, arbitration or administrative governmental, regulatory or other investigations, proceedings or disputes are commenced or threatened; or
|
|
(b) |
any judgment or order of a court, arbitral tribunal or other tribunal or any order or sanction of any governmental or other regulatory body is made, in relation to any Transaction Document or the transactions contemplated in the
Transaction Documents or against any
|
30.17 |
Material Adverse Effect
|
30.18 |
Security enforceable
|
30.19 |
Arrest of Ship
|
30.20 |
Ship registration
|
30.21 |
Political risk
|
|
(a) |
Either (1) the Flag State of any Mortgaged Ship or any Relevant Jurisdiction of an Obligor becomes involved in hostilities or civil war or (2) there is a seizure of power in the Flag State or any such Relevant Jurisdiction by
unconstitutional means and (in either such case), in the reasonable opinion of the Agent such event or circumstance, has or is reasonably likely to have, a Material Adverse Effect; or
|
|
(b) |
No Event of Default under paragraph (a) above will occur if:
|
|
(i) |
in the reasonable opinion of the Agent it is practicable for action to be taken by: the Borrowers to prevent the relevant event or circumstance having a Material Adverse Effect; and
|
|
(ii) |
the Borrowers take such action to the Agent’s satisfaction within 14 days of notice from the Agent (specifying the relevant action to be taken) to do so.
|
30.22 |
Charters
|
|
(a) |
Except with approval:
|
|
(i) |
the Charter of any Ship is repudiated, cancelled, rescinded or otherwise terminated or (except as a result of the relevant Ship being a Total Loss) frustrated; or
|
|
(ii) |
a Ship is withdrawn from service under the relevant Charter or the relevant Charter is terminated for any reason whatsoever, in each case before the time that such Charter was scheduled to expire.
|
|
(b) |
The Charter Guarantee in relation to a Ship is repudiated, cancelled, rescinded or otherwise terminated or is not or ceases to be legal, valid, binding and enforceable obligations of the relevant Charter Guarantor or it is or becomes
unlawful for a Charter Guarantor to perform its obligations under a Charter Guarantee to which it is a party or a
|
30.23 |
Acceleration
|
|
(a) |
by notice to the Borrowers:
|
|
(i) |
declare that no withdrawals be made from any Account; and/or
|
|
(ii) |
cancel the Total Commitments at which time they shall immediately be cancelled; and/or
|
|
(iii) |
declare that all or part of the Loan, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents be immediately due and payable, at which time they shall become immediately due and
payable; and/or
|
|
(iv) |
declare that all or part of the Loan be payable on demand, at which time they shall immediately become payable on demand by the Agent on the instructions of the Majority Lenders; and/or
|
|
(b) |
exercise or direct the Security Agent and/or any other beneficiary of the Security Documents to exercise any or all of its rights, remedies, powers or discretions under the Finance Documents.
|
31 |
Changes to the Lenders
|
31.1 |
Assignments by the Lenders
|
|
31.2 |
Conditions of assignment
|
|
(a) |
An assignment will only be effective:
|
|
(i) |
on receipt by the Agent of written confirmation from the New Lender (in form and substance satisfactory to the Agent) that the New Lender will assume the same obligations to the Borrowers and the other Finance Parties as it
would have been under if it had been an Original Lender;
|
|
(ii) |
on the New Lender entering into any documentation required for it to accede as a party to any Security Document to which the Existing Lender is a party in its capacity as a Lender and, in relation to such Security Documents,
completing any filing, registration or notice requirements;
|
|
(iii) |
on the performance by the Agent of all necessary “know your customer” or similar checks under all applicable laws and regulations relating to any person that it is required to carry out in relation to such assignment to a New
Lender, the completion of which the Agent shall promptly notify to the Existing Lender and the New Lender; and
|
|
(iv) |
if that Existing Lender assigns equal fractions of its Commitment and participation in the Loan.
|
|
(b) |
Each New Lender, by executing the relevant Transfer Certificate, confirms, for the avoidance of doubt, that the Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the
requisite Lender or Lenders in accordance with the Finance Documents on or prior to the date on which the assignment becomes effective in accordance with the Finance Documents and that it is bound by that decision to the same
extent as the Existing Lender would have been had it remained a Lender.
|
31.3 |
Fee
|
|
(a) |
all costs and expenses (including legal fees) incurred by the Agent or the Security Agent in connection with any such assignment; and
|
|
(b) |
any cost, loss or liability the Agent or the Security Agent incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of any such assignment.
|
31.4 |
Assignment costs and expenses relating to security
|
|
(a) |
all costs and expenses (including legal fees) incurred by the Agent or the Security Agent to facilitate the accession by the New Lender to, or assignment or transfer to the New Lender of, any Security Document and/or the
benefit of any Security Document and any appropriate registration of any such accession or assignment or transfer; and
|
|
(b) |
any cost, loss or liability the Agent or the Security Agent incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of any such accession, assignment or transfer.
|
31.5 |
Limitation of responsibility of Existing Lenders
|
|
(a) |
Unless expressly agreed to the contrary, an Existing Lender makes no representation or warranty and assumes no responsibility to a New Lender for:
|
|
(i) |
the legality, validity, effectiveness, adequacy or enforceability of the Finance Documents, the Transaction Security or any other documents;
|
|
(ii) |
the financial condition of any Obligor;
|
|
(iii) |
the performance and observance by any Obligor or any other person of its obligations under the Finance Documents or any other documents;
|
|
(iv) |
the application of any Basel II Regulation or Basel III Regulation to the transactions contemplated by the Finance Documents; or
|
|
(v) |
the accuracy of any statements (whether written or oral) made in or in connection with any Finance Document or any other document,
|
|
(b) |
Each New Lender confirms to the Existing Lender and the other Finance Parties that it:
|
|
(i) |
has made (and shall continue to make) its own independent investigation and assessment of:
|
|
(A) |
the financial condition and affairs of the Obligors and their related entities in connection with its participation in this Agreement; and
|
|
(B) |
the application of any Basel II Regulation or any Basel III Regulation to the transactions contemplated by the Finance Documents,
|
|
(ii) |
will continue to make its own independent appraisal of the application of any Basel II Regulation or Basel III Regulation to the transactions contemplated by the Finance Documents; and
|
|
(iii) |
will continue to make its own independent appraisal of the creditworthiness of each Obligor and its related entities whilst any amount is or may be outstanding under the Finance Documents or any Commitment is in force.
|
|
(c) |
Nothing in any Finance Document obliges an Existing Lender to:
|
|
(i) |
accept a re-assignment from a New Lender of any of the rights assigned under this clause 31; or
|
|
(ii) |
support any losses directly or indirectly incurred by the New Lender by reason of the non-performance by any Obligor of its obligations under any Transaction Document or by reason of the application of any Basel II Regulation
to the transactions contemplated by the Transaction Documents or otherwise.
|
31.6 |
Procedure for assignment
|
|
(a) |
Subject to the conditions set out in clause 31.2 (Other conditions of assignment) an assignment may be effected in accordance with paragraph (d) below when (a) the Agent executes an
otherwise duly completed Transfer Certificate and (b) the Agent executes any document required under paragraph (a) of clause 31.2 (Other conditions of assignment) which it may be necessary
for it to execute in each case delivered to it by the Existing Lender and the New Lender duly executed by them and, in the case of any such other document, any other relevant person. The Agent shall, subject to paragraph (b)
below, as soon as reasonably practicable after receipt by it of a Transfer Certificate and any such other document each duly completed, appearing on its face to comply with the terms of this Agreement and delivered in accordance
with the terms of this Agreement, execute that Transfer Certificate and such other document.
|
|
(b) |
The Agent shall only be obliged to execute a Transfer Certificate delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary “know your customer” or other similar checks
under all applicable laws and regulations in relation to the assignment to such New Lender.
|
|
(c) |
The Obligors who are Parties and the other Finance Parties irrevocably authorise the Agent to execute any Transfer Certificate on their behalf without any consultation with them.
|
|
(d) |
Subject to clause 31.9 (Pro rata interest settlement), on the Transfer Date:
|
|
(i) |
the Existing Lender will assign absolutely to the New Lender the rights under the Finance Documents expressed to be the subject of the assignment in the Transfer Certificate;
|
|
(ii) |
the Existing Lender will be released by each Obligor and the other Finance Parties from the obligations owed by it (the Relevant Obligations) and expressed to be the subject of the
release in the Transfer Certificate (but the obligations owed by the Obligors under the Finance Documents shall not be released); and
|
|
(iii) |
the New Lender shall become a Party to the Finance Documents as a “Lender” for the purposes of all the Finance Documents and will be bound by obligations equivalent to the Relevant Obligations.
|
|
(e) |
Lenders may utilise procedures other than those set out in this clause 31.6 to assign their rights under the Finance Documents (but not, without the consent of the relevant Obligor or unless in accordance with this clause 31.6
to obtain a release by that Obligor from the obligations owed to that Obligor by the Lenders nor the assumption of equivalent obligations by a New Lender) provided that they comply with the conditions set out in clause 31.2 (Other conditions of assignment).
|
31.7 |
Copy of Transfer Certificate to Borrowers
|
31.8 |
Security over Lenders’ rights
|
|
(a) |
any charge, assignment or other Security Interest to secure obligations to a federal reserve or central bank; and
|
|
(b) |
any charge, assignment or other Security Interest granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by that Lender as security for those obligations or securities,
|
|
(i) |
release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or other Security Interest for the Lender as a party to any of the Finance Documents; or
|
|
(ii) |
require any payments to be made by an Obligor other than or in excess of, or grant to any person any more extensive rights than, those required to be made or granted to the relevant Lender under the Finance Documents.
|
31.9 |
Pro rata interest settlement
|
|
(a) |
any interest or fees in respect of the relevant participation which are expressed to accrue by reference to the lapse of time shall continue to accrue in favour of the Existing Lender up to but excluding the Transfer Date (Accrued Amounts) and shall become due and payable to the Existing Lender (without further interest accruing on them) on the last day of the current Interest Period (or, if the Interest Period is
longer than six months, on the next of the dates which falls at six monthly intervals after the first day of that Interest Period); and
|
|
(b) |
the rights assigned or transferred by the Existing Lender will not include the right to the Accrued Amounts, so that, for the avoidance of doubt:
|
|
(i) |
when the Accrued Amounts become payable, those Accrued Amounts will be payable to the Existing Lender; and
|
|
(ii) |
the amount payable to the New Lender on that date will be the amount which would, but for the application of this clause 31.9, have been payable to it on that date, but after deduction of the Accrued Amounts.
|
31.10 |
Changes to the Obligors
|
32 |
Roles of Agent, Security Agent and Arranger
|
32.1 |
Appointment of the Agent and Security Agent
|
|
(a) |
the Agent to act as its agent under and in connection with the Finance Documents; and
|
|
(b) |
the Security Agent to act as its agent and as trustee under the Security Documents and, in relation to Security Documents governed by Swiss law, to act in the name and on behalf of the Finance Parties as their direct
representative (direkter Stellvertreter).
|
32.2 |
Security Agent as trustee
|
32.3 |
Authorisation of Agent and Security Agent
|
|
(a) |
to perform the duties, obligations and responsibilities and to exercise the rights, powers, authorities and discretions specifically given to the Agent or (as the case may be) the Security Agent under or in connection with the
Finance Documents together with any other incidental rights, powers, authorities and discretions; and
|
|
(b) |
to execute each of the Security Documents and all other documents that may be approved by the Majority Lenders for execution by it and, in relation to Security Documents governed by Swiss law, to execute such Security Documents
in the name and on behalf of the Finance Parties as their direct representative (direkter Stellvertreter).
|
32.4 |
Instructions to Agent and the Security Agent
|
|
(a) |
The Agent and the Security Agent shall:
|
|
(i) |
subject to paragraphs (d) and (e) below, exercise or refrain from exercising any right, power, authority or discretion vested in it as Agent or (as the case may be) the Security Agent in accordance with any instructions given
to it by:
|
|
(A) |
the Agent, acting on the instructions of all Lenders, if the relevant Finance Document stipulates the matter is an all Lender decision; and
|
|
(B) |
in all other cases, the Agent, acting on the instructions of the Majority Lenders; and
|
|
(ii) |
not be liable for any act (or omission) if it acts (or refrains from acting) in accordance with paragraph (i) above (or, if the relevant Finance Document stipulates the matter is a decision for any other Finance Party or group
of Finance Parties, in accordance with instructions given to it by that Finance Party or group of Finance Parties).
|
|
(b) |
The Agent and the Security Agent shall be entitled to request instructions, or clarification of any instruction, from the Agent and/or the Majority Lenders (or, if the relevant Finance Document stipulates the matter is a
decision for any other Finance Party or group of Finance Parties, from that Finance Party or group of Finance Parties) as to whether, and
|
|
(c) |
Save in the case of decisions stipulated to be a matter for any other Finance Party or group of Finance Parties under the relevant Finance Document and, unless a contrary indication appears in a Finance Document, any
instructions given to the Agent by the Majority Lenders or (as the case may be) the Security Agent by the Agent (acting on the instructions of the Majority Lenders) shall override any conflicting instructions given by any other
Parties and will be binding on all Finance Parties.
|
|
(d) |
Paragraph (a) above shall not apply:
|
|
(i) |
where a contrary indication appears in a Finance Document;
|
|
(ii) |
(where a Finance Document requires the Agent or the Security Agent to act in a specified manner or to take a specified action;
|
|
(iii) |
in respect of any provision which protects the Agent’s or the Security Agent’s own position in its personal capacity as opposed to its role of the Agent or the Security Agent for the Finance Parties including, without
limitation, clauses 32.9 (No duty to account) to clause 32.14 (Exclusion of liability), clause 32.19 (Confidentiality)
to clause 33.6 (Custodians and nominees) and clauses 33.9 (Acceptance of title) to 33.12 (Disapplication of
Trustee Acts).
|
|
(e) |
If giving effect to instructions given by any other Finance Party or group of Finance Parties would (in the Agent’s opinion) have an effect equivalent to an amendment or waiver which is subject to clause 44 (Amendments and grant of waivers), the Agent shall not act in accordance with those instructions unless consent to it so acting is obtained from each Party (other than itself) whose consent
would have been required in respect of that amendment or waiver.
|
|
(f) |
The Agent and Security Agent may refrain from acting in accordance with any instructions of any other Finance Party or group of Finance Parties (in the case of the Agent) or the Agent (in the case of the Security Agent), until
it has received any indemnification and/or security that it may in its discretion require (which may be greater in extent than that contained in the Finance Documents and which may include payment in advance) for any cost, loss or
liability (together with any applicable VAT) which it may incur in complying with those instructions.
|
|
(g) |
Without prejudice to the provisions of clause 34 (Enforcement of Transaction Security) and the remainder of this clause 32, in the absence of instructions, the Agent and the Security
Agent may act (or refrain from acting) as it considers to be in the best interest of the Lenders.
|
32.5 |
Legal or arbitration proceedings
|
32.6 |
Duties of the Agent and the Security Agent
|
|
(a) |
The Agent’s and the Security Agent’s duties under the Finance Documents are solely mechanical and administrative in nature.
|
|
(b) |
Subject to paragraph (c) below, the Agent or (as the case may be) the Security Agent shall promptly:
|
|
(i) |
(in the case of the Security Agent) forward to the Agent a copy of any document received by the Security Agent from any Obligor under any Finance Document; and;
|
|
(ii) |
forward to a Party the original or a copy of any document which is delivered to the Agent or (as the case may be) the Security Agent for that Party by any other Party.
|
|
(c) |
Without prejudice to clause 31.7 (Copy of Transfer Certificate to Borrowers), paragraph (b) above shall not apply to any Transfer Certificate.
|
|
(d) |
Except where a Finance Document specifically provides otherwise, neither the Agent nor the Security Agent is obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party.
|
|
(e) |
Without prejudice to clause 35.11 (Notification of prescribed events), if the Agent or the Security Agent receives notice from a Party referring to this Agreement, describing a Default
and stating that the circumstance described is a Default, it shall promptly notify the other Finance Parties.
|
|
(f) |
If the Agent is aware of the non-payment of any principal, interest, commitment fee or other fee payable to a Finance Party (other than the Agent or the Arranger or the Security Agent for their own account) under this Agreement
it shall promptly notify the other Finance Parties.
|
|
(g) |
The Agent shall provide to the Borrowers, within 5 Business Days of a request by the Borrowers (but no more frequently than once per calendar month), a list (which may be in electronic form) setting out the names of the Lenders
as at the date of that request and their respective Commitments.
|
|
(h) |
The Agent and the Security Agent shall have only those duties, obligations and responsibilities expressly specified in the Finance Documents to which it is expressed to be a party (and no others shall be implied).
|
32.7 |
Role of the Arranger
|
32.8 |
No fiduciary duties
|
32.9 |
No duty to account
|
32.10 |
Business with the Group
|
32.11 |
Rights and discretions of the Agent and the Security Agent
|
|
(a) |
The Agent and the Security Agent may:
|
|
(i) |
rely on any representation, communication, notice or document believed by it to be genuine, correct and appropriately authorised;
|
|
(ii) |
assume that:
|
|
(A) |
any instructions received by it from the Majority Lenders, any Lenders or other Finance Parties or any group of Lenders or other Finance Parties are duly given in accordance with the terms of the Finance Documents;
|
|
(B) |
unless it has received notice of revocation, that those instructions have not been revoked; and
|
|
(C) |
in the case of the Security Agent, if it receives any instructions to act in relation to the Transaction Security, that all applicable conditions under the Finance Documents for so acting have been satisfied; and
|
|
(iii) |
rely on a certificate, statement or document from any person:
|
|
(A) |
as to any matter of fact or circumstance which might reasonably be expected to be within the knowledge of that person; or
|
|
(B) |
to the effect that such person approves of any particular dealing, transaction, step, action or thing,
|
|
(b) |
The Agent and the Security Agent may assume (unless it has received notice to the contrary in its capacity as agent or (as the case may be) security trustee for the other Finance Parties) that:
|
|
(i) |
no Notifiable Debt Purchase Transaction:
|
|
(A) |
has been entered into;
|
|
(B) |
has been terminated; or
|
|
(C) |
has ceased to be with a Parent Affiliate;
|
|
(ii) |
no Default has occurred (unless (in the case of the Agent) it has actual knowledge of a Default arising under clause 30.1 (Non-payment));
|
|
(iii) |
any right, power, authority or discretion vested in any Party or any group of Finance Parties has not been exercised; and
|
|
(iv) |
any notice or request made by the Borrowers (other than (in the case of the Agent) a Utilisation Request or Selection Notice) is made on behalf of and with the consent and knowledge of all the Obligors.
|
|
(c) |
Each of the Agent and the Security Agent may engage and pay for (at the expense of the Borrowers) the advice or services of any lawyers, accountants, tax advisers, insurance consultants, ship managers, valuers, surveyors or
other professional advisers or experts.
|
|
(d) |
Without prejudice to the generality of paragraph (c) above or paragraph (e) below, each of the Agent and the Security Agent may at any time engage and pay for (at the expense of the Borrowers) the services of any lawyers to act
as independent counsel to it (and so
|
|
(e) |
Each of the Agent and the Security Agent may rely on the advice or services of any lawyers, accountants, tax advisers, insurance consultants, ship managers, valuers, surveyors or other professional advisers or experts (whether
obtained by it or by any other Party and whether or not liability thereunder is limited by reference to a monetary cap or otherwise) and shall not be liable for any damages, costs or losses to any person, any diminution in value
or any liability whatsoever arising as a result of its so relying.
|
|
(f) |
The Agent, the Security Agent, any Receiver and any Delegate may act in relation to the Finance Documents, the Transaction Security and the Security Property through its officers, employees and agents and shall not:
|
|
(i) |
be liable for any error of judgment made by any such person; or
|
|
(ii) |
be bound to supervise or be in any way responsible for any loss incurred by reason of misconduct, omission or default on the part of any such person, unless such error or such loss was directly caused by the Agent’s, the
Security Agent’s, Receiver’s or Delegate’s gross negligence or wilful default.
|
|
(g) |
Unless any Finance Document expressly specifies otherwise, the Agent or the Security Agent may disclose to any other Party any information it reasonably believes it has received as agent or security trustee under the Finance
Documents.
|
|
(h) |
Without prejudice to the generality of paragraph (g) above, the Agent:
|
|
(i) |
may disclose; and
|
|
(ii) |
on the written request of a Borrower or the Majority Lenders shall, as soon as reasonably practicable, disclose
|
|
(i) |
Notwithstanding any other provision of any Finance Document to the contrary, none of the Agent, the Security Agent nor the Arranger is obliged to do or omit to do anything if it would or might in its reasonable opinion
constitute a breach of any law, directive or regulation or state, or agency of any jurisdiction or state (including, but not limited to England and the United States), or a breach of a fiduciary duty or duty of confidentiality,
and the Security Agent may do anything which, in its opinion, is necessary or desirable to comply with any such law, direction or regulation and the Security Agent may refrain from taking any action in respect of any property
where it may incur liability in respect of that property (including, without limitation, any liability to make repairs and/or any liability under applicable health and safety legislation or environmental legislation).
|
|
(j) |
Notwithstanding any provision of any Finance Document to the contrary, neither the Agent nor the Security Agent is obliged to expend or risk its own funds or otherwise incur any financial liability in the performance of its
duties, obligations or responsibilities or the exercise of any right, power, authority or discretion if it has grounds for believing the repayment of such funds or adequate indemnity against, or security for, such risk or
liability is not reasonably assured to it.
|
|
(k) |
Neither the Agent nor the Arranger shall be obliged to request any certificate, opinion or other information under clause 20 (Information undertakings) unless so required in writing by a
Lender, in which case the Agent shall promptly make the appropriate request of the Borrowers if such request would be in accordance with the terms of this Agreement.
|
|
(l) |
Without prejudice to the generality of any other provision of this Agreement or any other Security Document, the entry into possession of the Charged Property shall not render the Security Agent or any Receiver liable to
account as mortgagee in possession
|
|
(m) |
The Security Agent shall have no responsibility whatsoever to the Obligors, the Agent or any Finance Party as regards any deficiency which might arise because the Security Agent is subject to any Tax in respect of all or any of
the Charged Property, the income therefrom or the proceeds thereof.
|
32.12 |
Responsibility for documentation and other matters
|
|
(a) |
the adequacy, accuracy and/or completeness of any information (whether oral or written) supplied by the Agent, the Security Agent, the Arranger, an Obligor or any other person given in or in connection with any Transaction
Document, the Information Memorandum or the transactions contemplated in the Transaction Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any
Transaction Document or of any representations in any Transaction Document or of any copy of any document delivered under any Transaction Document;
|
|
(b) |
the legality, validity, effectiveness, adequacy or enforceability of any Transaction Document or any Security Interest or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or
in connection with any Transaction Document or any Security Interest constructed thereby;
|
|
(c) |
the application of any Basel II Regulation or Basel III Regulation to the transactions contemplated by the Transaction Documents;
|
|
(d) |
(in the case of the Security Agent) any loss to the Security Property arising in consequence of the failure, depreciation or loss of any Charged Property or any investments made or retained in good faith or by reason of any
other matter or thing;
|
|
(e) |
the failure of any Obligor or any other party to perform its obligations under any Transaction Document or the financial condition of any such person;
|
|
(f) |
(save as otherwise provided in this clause 32) taking or omitting to take any other action under or in relation to the Security Documents;
|
|
(g) |
any other beneficiary of a Security Document failing to perform or discharge any of its duties or obligations under any Finance Document; or
|
|
(h) |
any determination as to whether any information provided or to be provided to any Finance Party is non-public information the use of which may be regulated or prohibited by any applicable law or regulation relating to insider
dealing or otherwise.
|
32.13 |
No duty to monitor
|
|
(a) |
whether or not any Default has occurred;
|
|
(b) |
as to the performance, default or any breach by any Party or any Obligor of its obligations under any Finance Document; or
|
|
(c) |
whether any other event specified in any Finance Document has occurred.
|
32.14 |
Exclusion of liability
|
|
(a) |
Without limiting paragraph (b) below (and without prejudice to any other provision of any Finance Document excluding or limiting the liability of the Agent, the Security Agent, any Receiver or Delegate), none of the Agent, the
Security Agent, any Receiver nor any Delegate will be liable (including, without limitation, for negligence or any other category of liability whatsoever) for:
|
|
(i) |
any damages, costs or losses to any person, any diminution in value, or any liability whatsoever arising as a result of taking or not taking any action under or in connection with any Finance Document or the Security Property,
unless directly caused by its gross negligence or wilful misconduct;
|
|
(ii) |
exercising, or not exercising, any right, power, authority or discretion given to it by, or in connection with, any Finance Document, the Security Property or any other agreement, arrangement or document entered into, made or
executed in anticipation of, under or in connection with, any Finance Document or the Security Property;
|
|
(iii) |
any shortfall which arises on the enforcement or realisation of the Security Property; or
|
|
(iv) |
without prejudice to the generality of paragraphs (i) to (iii) above, any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of:
|
|
(A) |
any act, event or circumstance not reasonably within its control; or
|
|
(B) |
the general risks of investment in, or the holding of assets in, any jurisdiction,
|
|
(b) |
No Party (other than the Agent, the Security Agent, that Receiver or that Delegate (as applicable)) may take any proceedings against any officer, employee or agent of the Agent, the Security Agent, a Receiver or a Delegate in
respect of any claim it might have against the Agent, the Security Agent, a Receiver or a Delegate or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Transaction Document or any
Security Property and any officer, employee or agent of the Agent, the Security Agent, a Receiver or a Delegate may rely on this clause 32.14 subject to clause 1.4 (Third party rights) and
the provisions of the Third Parties Act.
|
|
(c) |
Neither the Agent or the Security Agent will be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by it if it has taken all necessary steps
as soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by it for that purpose.
|
|
(d) |
Nothing in any Finance Document shall oblige the Agent, the Security Agent or the Arranger to carry out:
|
|
(i) |
any “know your customer” or other checks in relation to any person; or
|
|
(ii) |
any check on the extent to which any transaction contemplated by any of the Finance Documents might be unlawful for any Finance Party or for any Affiliate of any Finance Party or for any Affiliate of any Finance Party,
|
|
(e) |
Without prejudice to any provision of any Finance Document excluding or limiting the liability of the Agent, the Security Agent, any Receiver or any Delegate, any liability of the Agent, the Security Agent, any Receiver or any
Delegate arising under or in connection with any Finance Document or the Security Property shall be limited to the amount of actual loss which has been finally judicially determined to have been suffered (as determined by
reference to the date of default of the Agent, the Security Agent, any Receiver or any Delegate (as the case may be) or, if later, the date on which the loss arises as a result of such default) but without reference to any special
conditions or circumstances known to the Agent, the Security Agent, any Receiver or any Delegate (as the case may be) at any time which increase the amount of that loss. In no event shall the Agent, the Security Agent, any
Receiver or any Delegate be liable for any loss of profits, goodwill, reputation, business opportunity or anticipated saving, or for special, punitive, indirect or consequential damages, whether or not the Agent, the Security
Agent, Receiver or Delegate (as the case may be) has been advised of the possibility of such loss or damages.
|
32.15 |
Lenders’ indemnity to the Agent, Security Agent and others
|
|
(a) |
Each Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments are then zero, to its share of the Total Commitments immediately prior to their being reduced to zero) indemnify the Agent, the
Security Agent, every Receiver and every Delegate, within three Business Days of demand, against any Losses (including, without limitation, for negligence or any other category of liability whatsoever incurred by any of them
(otherwise than by reason of the relevant Agent’s, Security Agent’s, Receiver’s or Delegate’s gross negligence or wilful default (or in the circumstances contemplated pursuant to clause 38.11 (Disruption
to payment systems etc.) notwithstanding the Agent’s negligence, gross negligence, or any other category of liability whatsoever but not including any claim based on the fraud of the Agent) in acting as Agent, Security
Agent, Receiver or Delegate under, or exercising any authority conferred under) the Finance Documents (unless the relevant Agent, Security Agent, Receiver or Delegate has been reimbursed by an Obligor pursuant to a Finance
Document) and this paragraph (a) shall be without prejudice to any right to indemnity by law given to trustees generally and any other indemnity in the Security Agent’s favour in any other Finance Document.
|
|
(b) |
Subject to paragraph (c) below, the Borrowers shall immediately on demand reimburse any Lender for any payment that Lender makes to the Agent or the Security Agent or any Receiver or Delegate pursuant to paragraph (a) above.
|
|
(c) |
Paragraph (b) above shall not apply to the extent that the indemnity payment in respect of which the Lender claims reimbursement relates to a liability of the Agent or the Security Agent to an Obligor.
|
|
(d) |
The indemnity contained in this clause 32.15 shall survive the termination or discharge of this Agreement.
|
32.16 |
Resignation of the Agent or the Security Agent
|
|
(a) |
The Agent or the Security Agent may, without giving any reason therefor, resign and appoint one of its Affiliates as successor by giving notice to the other Finance Parties and the Borrowers.
|
|
(b) |
Alternatively the Agent or the Security Agent may without giving any reason therefor resign by giving 30 days’ notice to the other Finance Parties and the Borrowers, in which case the Majority Lenders may appoint a successor
Agent or Security Agent.
|
|
(c) |
If the Majority Lenders have not appointed a successor Agent or Security Agent in accordance with paragraph (b) above within 30 days after notice of resignation was given, the retiring Agent or Security Agent (after
consultation with (in the case of the Agent) the Borrowers or (in the case of the Security Agent) the Agent) may appoint a successor Agent or Security Agent.
|
|
(d) |
If the Agent or Security Agent wishes to resign because it has concluded that it is no longer appropriate for it to remain as agent or trustee and the Agent or (as the case may be) Security Agent is entitled to appoint a
successor Agent or (as the case may be) Security Agent under paragraph (c) above, the Agent or (as the case may be) Security Agent may (if it concludes that it is necessary to do so in order to persuade the proposed successor
Agent or (as the case may be) Security Agent to become a party to this Agreement as Agent or (as the case may be) Security Agent) agree with the proposed successor Agent or (as the case may be) Security Agent such amendments to
this clause 32 and any other term of this Agreement dealing with the rights or obligations of the Agent or (as the case may be) Security Agent consistent with then current market practice for the appointment and protection of
corporate trustees together with any amendments to the fee payable to it in its capacity as Agent or (as the case may be) Security Agent under this Agreement which are consistent with the successor Agent’s or (as the case may be)
Security Agent’s normal fee rates and those amendments will bind the Parties.
|
|
(e) |
The retiring Agent or Security Agent shall make available to the successor Agent or Security Agent such documents and records and provide such assistance as the successor Agent or Security Agent may reasonably request for the
purposes of performing its functions as Agent or (as the case may be) Security Agent under the Finance Documents. The Borrowers shall, within three Business Days of demand, reimburse the retiring Agent or (as the case may be)
Security Agent for the amount of all costs and expenses (including legal fees) (together with any applicable VAT) properly incurred by it in making available such documents and records and providing such assistance.
|
|
(f) |
The Agent’s or Security Agent’s resignation notice shall only take effect upon:
|
|
(i) |
the appointment of a successor; and
|
|
(ii) |
(in the case of the Security Agent) the transfer or assignment of all the Transaction Security and the other Security Property to that successor and any appropriate filings or registrations, any notices of transfer or
assignment and the payment of any fees or duties related to such transfer or assignment which the Security Agent considers necessary or advisable have been duly completed.
|
|
(g) |
Upon the appointment of a successor, the retiring Agent or Security Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under paragraph (b) of clause 33.10 (Winding up of trust) and paragraph (e) above) but shall remain entitled to the benefit of clauses 15.3 (Other indemnities), 15.4 (Indemnity to the Agent and the Security Agent) and 15.5 (Indemnity concerning security) and this clause 32 (and any agency or other fees for the account
of the retiring Agent or Security Agent in its capacity as such shall cease to accrue from (and shall be
|
|
(h) |
The Agent shall resign in accordance with paragraph (b) above (and, to the extent applicable, shall use reasonable endeavours to appoint a successor Agent pursuant to paragraph (c) above) if on or after the date which is three
months before the earliest FATCA Application Date relating to any payment to the Agent under the Finance Documents, either:
|
|
(i) |
the Agent fails to respond to a request under clause 13.4 (FATCA Information) and the Borrowers or a Lender reasonably believes that the Agent will not be (or will have ceased to be) a
FATCA Exempt Party on or after that FATCA Application Date;
|
|
(ii) |
the information supplied by the Agent pursuant to clause 13.4 (FATCA Information) indicates that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that
FATCA Application Date; or
|
|
(iii) |
the Agent notifies the Borrowers and the Lenders that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date,
|
32.17 |
Replacement of the Agent
|
|
(a) |
After consultation with the Borrowers, the Majority Lenders may, by giving 30 days’ notice to the Agent (or, at any time the Agent is an Impaired Agent, by giving any shorter notice determined by the Majority Lenders) replace
the Agent by appointing a successor Agent.
|
|
(b) |
The retiring Agent shall (at its own cost if it is an Impaired Agent and otherwise at the expense of the Lenders) make available to the successor Agent such documents and records and provide such assistance as the successor
Agent may reasonably request for the purposes of performing its functions as Agent under the Finance Documents.
|
|
(c) |
The appointment of the successor Agent shall take effect on the date specified in the notice from the Majority Lenders to the retiring Agent. As from this date, the retiring Agent shall be discharged from any further obligation
in respect of the Finance Documents (other than its obligations under paragraph (b) above) but shall remain entitled to the benefit of clauses 15.4 ((Indemnity to the Agent and the Security Agent)
and 15.5 (Indemnity concerning security) and this clause 32) (and any agency fees for the account of the retiring Agent shall cease to accrue from (and shall be payable on) that date).
|
|
(d) |
Any successor Agent and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.
|
32.18 |
Replacement of the Security Agent
|
32.19 |
Confidentiality
|
|
(a) |
In acting as agent or trustee for the Finance Parties, the Agent or (as the case may be) the Security Agent shall be regarded as acting through its agency, trustee or other division or department directly responsible for the
management of the Finance Documents which shall be treated as a separate entity from any other of its divisions or departments.
|
|
(b) |
If information is received by another division or department of the Agent or (as the case may be) the Security Agent, it may be treated as confidential to that division or department and the Agent or (as the case may be) the
Security Agent shall not be deemed to have notice of it.
|
|
(c) |
Notwithstanding any other provision of any Finance Document to the contrary, none of the Agent, the Security Agent nor the Arranger is obliged to disclose to any other person (i) any confidential information or (ii) any other
information if the disclosure would, or might in its reasonable opinion, constitute a breach of any law or regulation or a breach of a fiduciary duty.
|
32.20 |
Agent’s relationship with the Lenders
|
|
(a) |
Subject to clause 31.9 (Pro rata interest settlement), the Agent may treat the person shown in its records as each Lender at the opening of business (in the place of the Agent’s
principal office as notified to the Finance Parties from time to time) as a Lender acting through its Facility Office:
|
|
(i) |
entitled to or liable for any payment due under any Finance Document on that day; and
|
|
(ii) |
entitled to receive and act upon any notice, request, document or communication or make any decision or determination under any Finance Document made or delivered on that day,
|
|
(b) |
Any Lender may by notice to the Agent appoint a person to receive on its behalf all notices, communications, information and documents to be made or despatched to that Lender or (as the case may be) under the Finance
Documents. Such notice shall contain the address, fax number and (where communication by electronic mail or other electronic means is permitted under clause 40.5 (Electronic communication))
electronic mail address and/or any other information required to enable the sending and receipt of information by that means (and, in each case, the department or officer, if any, for whose attention communication is to be made)
and be treated as a notification of a substitute address, fax number, electronic mail address, department and officer (or such other information) by that Lender for the purposes of clause 40.2 (Addresses)
and clause 40.6 (Electronic communication) and the Agent shall be entitled to treat such person as the person entitled to receive all such notices, communications, information and documents
as though that person were that Lender.
|
32.21 |
Information from the Finance Parties
|
|
(a) |
Each Finance Party shall supply the Agent or the Security Agent with any information that the Agent or (as the case may be) the Security Agent may reasonably specify as being necessary or desirable to enable the Agent or (as
the case may be) the Security Agent to perform its functions as Agent or (as the case may be) Security Agent (including, without limitation, such written information and directions as are necessary to make the calculations and
applications contemplated by clause 35.1 (Order of application)).
|
|
(b) |
Each Lender shall deal with the Security Agent exclusively through the Agent and shall not deal directly with the Security Agent.
|
32.22 |
Credit appraisal by the Finance Parties
|
|
(a) |
the financial condition, status and nature of each Obligor and other Group Member;
|
|
(b) |
the legality, validity, effectiveness, adequacy or enforceability of any Transaction Document and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any
Transaction Document, the Transaction Security or the Security Property;
|
|
(c) |
the application of any Basel II Regulation or Basel III Regulation to the transactions contemplated by the Finance Documents;
|
|
(d) |
whether that Finance Party has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under or in connection with any Finance Document, the Transaction Security, the Security
Property, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document, the Transaction
Security or the Security Property;
|
|
(e) |
the adequacy, accuracy or completeness of the Information Memorandum and any other information provided by the Agent, the Security Agent, the Arranger or any other Party or by any other person under or in connection with any
Transaction Document, the transactions contemplated by any Transaction Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction
Document; and
|
|
(f) |
the right or title of any person in or to, or the value or sufficiency of, any part of the Charged Property, the priority of any of the Transaction Security or the existence of any Security Interest affecting the Charged
Property.
|
32.23 |
Deduction from amounts payable by the Agent or Security Agent
|
33 |
Trust and security matters
|
33.1 |
Undertaking to pay
|
|
(a) |
Each Obligor who is a Party undertakes with the Security Agent as trustee for itself and on behalf of the Finance Parties that it will, on demand by the Security Agent, pay to the Security Agent as trustee for itself and on
behalf of the Finance Parties all money from time to time owing to the other Finance Parties (in addition to paying any money owing under the Finance Documents to the Security Agent for its own account), and discharge all other
obligations from time to time incurred, by it under or in connection with the Finance Documents.
|
|
(b) |
Each payment which such an Obligor makes to another Finance Party in accordance with any Finance Document shall, to the extent of the amount of that payment, satisfy that Obligor’s corresponding obligation under paragraph (a)
above to make that payment to the Security Agent.
|
33.2 |
Parallel debt
|
|
(a) |
In this clause 33.2:
|
|
(b) |
Each Obligor irrevocably and unconditionally undertakes to pay to the Security Agent its Parallel Debt which shall be amounts equal to, and in the currency or currencies of, its Corresponding Debt.
|
|
(c) |
The Parallel Debt of an Obligor:
|
|
(i) |
shall become due and payable at the same time as its Corresponding Debt; and
|
|
(ii) |
is independent and separate from, and without prejudice to, its Corresponding Debt.
|
|
(d) |
For the purposes of this clause 33.2, the Security Agent:
|
|
(i) |
is the independent and separate creditor of each Parallel Debt;
|
|
(ii) |
acts in its own name and not as agent, representative or trustee of the Finance Parties and its claims in respect of each Parallel Debt shall not be held on trust; and
|
|
(iii) |
shall have the independent and separate right to demand payment of each Parallel Debt in its own name (including, without limitation, through any suit, execution, enforcement of security, recovery of guarantees and applications
for and voting in any kind of insolvency proceeding).
|
|
(e) |
The Parallel Debt of an Obligor shall be:
|
|
(i) |
decreased to the extent that its Corresponding Debt has been irrevocably and unconditionally paid or discharged; and
|
|
(ii) |
increased to the extent that its Corresponding Debt has increased,
|
|
(A) |
decreased to the extent that its Parallel Debt has been irrevocably and unconditionally paid or discharged; and
|
|
(B) |
increased to the extent that its Parallel Debt has increased,
|
|
(f) |
All amounts received or recovered by the Security Agent in connection with this clause 33.2 (Parallel debt) to the extent permitted by applicable law, shall be applied in accordance with
clause 35.1 (Order of application).
|
|
(g) |
This clause 33.2 shall apply, with any necessary modifications, to each Finance Document governed by laws other than English law and Greek law.
|
33.3 |
No responsibility to perfect Transaction Security
|
|
(a) |
ascertain whether all deeds and documents which should have been deposited with it under or pursuant to any of the Security Documents have been so deposited;
|
|
(b) |
require the deposit with it of any deed or document certifying, representing or constituting the title of any Obligor to any of the Charged Property;
|
|
(c) |
obtain any licence, consent or other authority for the execution, delivery, legality, validity, enforceability or admissibility in evidence of any Finance Document or the Transaction Security;
|
|
(d) |
register, file or record or otherwise protect any of the Transaction Security (or the priority of any of the Transaction Security) under any law or regulation or to give notice to any person of the execution of any Finance
Document or of the Transaction Security;
|
|
(e) |
take, or to require any Obligor to take, any step to perfect its title to any of the Charged Property or to render the Transaction Security effective or to secure the creation of any ancillary Security Interest under any law or
regulation; or
|
|
(f) |
require any further assurance in relation to any Security Document.
|
33.4 |
Insurance by Security Agent
|
|
(a) |
The Security Agent shall not be obliged:
|
|
(i) |
to insure any of the Charged Property;
|
|
(ii) |
to require any other person to maintain any insurance; or
|
|
(iii) |
to verify any obligation to arrange or maintain insurance contained in any Finance Document,
|
|
(b) |
Where the Security Agent is named on any insurance policy as loss payee, it shall not be liable for any damages, costs or losses to any person as a result of its failure to notify the insurers of any material fact relating to
the risk assumed by such insurers or any other information of any kind, unless the Agent requests it to do so in writing and the Security Agent fails to do so within fourteen days after receipt of that request.
|
33.5 |
Common parties
|
33.6 |
Custodians and nominees
|
33.7 |
Delegation by the Security Agent
|
|
(a) |
Each of the Security Agent, any Receiver and any Delegate may, at any time, delegate by power of attorney or otherwise to any person for any period, all or any right, power, authority or discretion vested in it in its capacity
as such.
|
|
(b) |
That delegation may be made upon any terms and conditions (including the power to sub-delegate) and subject to any restrictions that the Security Agent, that Receiver or that Delegate (as the case may be) may, in its
discretion, think fit in the interests of the Finance Parties.
|
|
(c) |
No Security Agent, Receiver or Delegate shall be bound to supervise, or be in any way responsible for any damages, costs or losses incurred by reason of any misconduct, omission or default on the part of, any such delegate or
sub-delegate.
|
33.8 |
Additional trustees
|
|
(a) |
The Security Agent shall have power by notice in writing to the other Finance Parties and the Borrowers to appoint and subsequently remove any person either to act as separate trustee or as co-trustee jointly with the Security
Agent:
|
|
(i) |
if the Security Agent reasonably considers such appointment to be in the best interests of the Finance Parties;
|
|
(ii) |
for the purpose of conforming with any legal requirement, restriction or condition which the Security Agent deems to be relevant; or
|
|
(iii) |
for the purpose of obtaining a judgment in any jurisdiction or the enforcement in any jurisdiction against any person of a judgment already obtained,
|
|
(b) |
Any person so appointed shall have the rights, powers, authorities and discretions (not exceeding those given to the Security Agent under or in connection with the Finance Documents) and the duties, obligations and
responsibilities that are given or imposed by the instrument of appointment and the Security Agent shall have power to remove any person so appointed.
|
|
(c) |
The remuneration that the Security Agent may pay to that person, and any costs and expenses (together with any applicable VAT) incurred by that person in performing its functions pursuant to that appointment shall, for the
purposes of this Agreement, be treated as costs and expenses incurred by the Security Agent.
|
|
(d) |
At the request of the Security Agent, the other Parties shall forthwith execute all such documents and do all such things as may be required to perfect such appointment or removal and each such Party irrevocably authorises the
Security Agent in its name and on its behalf to do the same.
|
|
(e) |
Such a person shall accede to this Agreement as a Security Agent to the extent necessary to carry out their role on terms satisfactory to the Security Agent.
|
|
(f) |
The Security Agent shall not be bound to supervise, or be responsible for any loss incurred by reason of any act or omission of, any such person if the Security Agent shall have exercised reasonable care in the selection of
such person.
|
33.9 |
Acceptance of title
|
33.10 |
Winding up of trust
|
|
(a) |
all of the Secured Obligations and all other obligations secured by the Security Documents have been fully and finally discharged; and
|
|
(b) |
no Finance Party is under any commitment, obligation or liability (actual or contingent) to make advances or provide other financial accommodation to any Obligor pursuant to the Finance Documents,
|
|
(i) |
the trusts set out in this Agreement shall be wound up and the Security Agent shall release, without recourse or warranty, all of the Transaction Security and the rights of the Security Agent under each of the Security
Documents; and
|
|
(ii) |
any Security Agent which has resigned pursuant to clause 32.16 (Resignation of the Agent or the Security Agent) shall release, without recourse or warranty, all of its rights under each
Security Document.
|
33.11 |
Powers supplemental to Trustee Acts
|
33.12 |
Disapplication of Trustee Acts
|
34 |
Enforcement of Transaction Security
|
34.1 |
Enforcement Instructions
|
|
(a) |
The Security Agent may refrain from enforcing the Transaction Security unless instructed otherwise by the Agent (acting on the instructions of the Majority Lenders).
|
|
(b) |
Subject to the Transaction Security having become enforceable in accordance with its terms, the Agent (acting on the instructions of the Majority Lenders) may give or refrain from giving instructions to the Security Agent to
enforce or refrain from enforcing the Transaction Security as they see fit.
|
|
(c) |
The Security Agent is entitled to rely on and comply with instructions given in accordance with this clause 34.1.
|
34.2 |
Manner of enforcement
|
34.3 |
Waiver of rights
|
34.4 |
Enforcement through Security Agent only
|
|
(a) |
The other Finance Parties shall not have any independent power to enforce, or have recourse to, any of the Transaction Security or to exercise any right, power, authority or discretion arising or to grant any consents or
releases under the Security Documents except through the Security Agent.
|
|
(b) |
Each Finance Party (other than the Security Agent) shall, promptly upon being requested by the Agent to do so, grant a power of attorney or other sufficient authority to the Security Agent to enable the Security Agent to
enforce or have recourse to the relevant Transaction Security or to exercise any such right, power, authority or discretion or to grant any such consent or release.
|
35 |
Application of proceeds
|
35.1 |
Order of application
|
|
(a) |
in discharging any sums owing to the Security Agent (other than pursuant to clause 33.1 (Undertaking to pay) or 33.2 (Parallel debt)), any
Receiver or any Delegate under the Finance Documents;
|
|
(b) |
in discharging all costs and expenses incurred by any Finance Party in connection with any realisation or enforcement of the Transaction Security taken in accordance with the terms of this Agreement;
|
|
(c) |
in payment or distribution to the Agent on its own behalf and on behalf of the other Finance Parties for application in accordance with clause 38.6 (Partial payments);
|
|
(d) |
if none of the Obligors is under any further actual or contingent liability under any Finance Document, in payment or distribution to any person to whom the Security Agent is obliged to pay or distribute in priority to any
Obligor; and
|
|
(e) |
the balance, if any, in payment or distribution to the relevant Obligor.
|
35.2 |
Security proceeds realised by other Finance Parties
|
35.3 |
Investment of cash proceeds
|
|
(a) |
all or part of any Recoveries which are in the form of cash; and
|
|
(b) |
any cash which is generated by holding, managing, exploiting, collecting, realising or disposing of any proceeds of the Security Property which are not in the form of cash,
|
35.4 |
Currency conversion
|
|
(a) |
For the purpose of, or pending the discharge of, any of the Secured Obligations the Security Agent may:
|
|
(i) |
convert any moneys received or recovered by the Security Agent from one currency to another; and
|
|
(ii) |
notionally convert the valuation provided in any opinion or valuation from one currency to another,
|
|
(b) |
The obligations of any Obligor to pay in the due currency shall only be satisfied:
|
|
(i) |
in the case of paragraph (a)(i) above, to the extent of the amount of the due currency purchased after deducting the costs of conversion; and
|
|
(ii) |
in the case of paragraph (a)(ii) above, to the extent of the amount of the due currency which results from the notional conversion referred to in that paragraph.
|
35.5 |
Permitted Deductions
|
35.6 |
Good discharge
|
|
(a) |
Any distribution or payment to be made in respect of the Secured Obligations by the Security Agent may be made to the Agent on behalf of the Finance Parties.
|
|
(b) |
Any distribution or payment made as described in paragraph (a) above shall be a good discharge, to the extent of that payment or distribution, by the Security Agent to the extent of that payment.
|
|
(c) |
The Security Agent is under no obligation to make the payments to the Agent under paragraph (a) above in the same currency as that in which the Secured Obligations owing to the relevant Finance Party are denominated pursuant to
the relevant Finance Document.
|
35.7 |
Calculation of amounts
|
|
(a) |
For the purpose of calculating any person’s share of any amount payable to or by it, the Security Agent shall be entitled to:
|
|
(b) |
notionally convert the Secured Obligations owed to any person into a common base currency (decided in its discretion by the Security Agent), that notional conversion to be made at the spot rate at which the Security Agent is
able to purchase the notional base currency with the actual currency of the Secured Obligations owed to that person at the time at which that calculation is to be made; and
|
|
(c) |
assume that all amounts received or recovered as a result of the enforcement or realisation of the Security Property are applied in discharge of the Secured Obligations in accordance with the terms of the Finance Documents
under which those Secured Obligations have arisen.
|
35.8 |
Release to facilitate enforcement and realisation
|
|
(a) |
Each Finance Party acknowledges that, for the purpose of any enforcement action by the Security Agent or a Receiver and/or maximising or facilitating the realisation of the Charged Property, it may be desirable that certain
rights or claims against an Obligor and/or under certain of the Transaction Security, be released.
|
|
(b) |
Each other Finance Party hereby irrevocably authorises the Security Agent (acting on the instructions of the Agent) to grant any such releases to the extent necessary to effect such enforcement action and/or realisation
including, to the extent necessary for such purpose, to execute release documents in the name of and on behalf of the other Finance Parties.
|
35.9 |
Dealings with Security Agent
|
35.10 |
Disclosure between Finance Parties and Security Agent
|
35.11 |
Notification of prescribed events
|
|
(a) |
If an Event of Default or Default either occurs or ceases to be continuing, the Agent shall, upon becoming aware of that occurrence or cessation, notify the Security Agent.
|
|
(b) |
If the Security Agent enforces, or takes formal steps to enforce, any of the Transaction Security it shall notify each other Finance Party of that action.
|
|
(c) |
If any Finance Party exercises any right it may have to enforce, or to take formal steps to enforce, any of the Transaction Security it shall notify the Security Agent and the Security Agent shall, upon receiving that
notification, notify each other Finance Party of that action.
|
36 |
Conduct of business by the Finance Parties
|
36.1 |
Finance Parties tax affairs
|
|
(a) |
interfere with the right of any Finance Party to arrange its affairs (tax or otherwise) in whatever manner it thinks fit;
|
|
(b) |
oblige any Finance Party to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or
|
|
(c) |
oblige any Finance Party to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax.
|
36.2 |
Finance Parties acting together
|
|
(a) |
Notwithstanding clause 2.2 (Finance Parties’ rights and obligations), if the Agent makes a declaration under clause 30.23 (Acceleration) or (acting on the instructions of the Majority Lenders) notifies the other Finance Parties that it considers it is entitled to make such a declaration,
the Agent shall, in the names of all the Finance Parties, take such action on behalf of the Finance Parties and conduct such negotiations with the Borrowers and any Group Members and generally administer the Facility in accordance
with the wishes of the Majority Lenders. All the Finance Parties shall be bound by the provisions of this clause and no Finance Party shall be entitled to take action independently against any Obligor or any of its assets without
the prior consent of the Majority Lenders.
|
|
(b) |
Paragraph (a) above shall not override clause 32 (Roles of Agent, Security Agent and Arranger) as it applies to the Security Agent.
|
37 |
Sharing among the Finance Parties
|
37.1 |
Payments to Finance Parties
|
|
(a) |
the Recovering Finance Party shall, within three Business Days, notify details of the receipt or recovery, to the Agent;
|
|
(b) |
the Agent shall determine whether the receipt or recovery is in excess of the amount the Recovering Finance Party would have been paid had the receipt or recovery been received or made by the Agent and distributed in accordance
with clause 38 (Payment mechanics), without taking account of any Tax which would be imposed on the Agent in relation to the receipt, recovery or distribution; and
|
|
(c) |
the Recovering Finance Party shall, within three Business Days of demand by the Agent, pay to the Agent an amount (the Sharing Payment) equal to such receipt or recovery less any amount
which the Agent determines may be retained by the Recovering Finance Party as its share of any payment to be made, in accordance with clause 38.6 (Partial payments).
|
37.2 |
Redistribution of payments
|
37.3 |
Recovering Finance Party’s rights
|
37.4 |
Reversal of redistribution
|
|
(a) |
each Sharing Finance Party shall, upon request of the Agent, pay to the Agent for the account of that Recovering Finance Party an amount equal to the appropriate part of its share of the Sharing Payment (together with an amount
as is necessary to reimburse that Recovering Finance Party for its proportion of any interest on the Sharing Payment which that Recovering Finance Party is required to pay) (the Redistributed
Amount); and
|
|
(b) |
as between the relevant Obligor and each relevant Sharing Finance Party, an amount equal to the relevant Redistributed Amount will be treated as not having been paid by that Obligor.
|
37.5 |
Exceptions
|
|
(a) |
This clause 37 shall not apply to the extent that the Recovering Finance Party would not, after making any payment pursuant to this clause, have a valid and enforceable claim against the relevant Obligor.
|
|
(b) |
A Recovering Finance Party is not obliged to share with any other Finance Party any amount which the Recovering Finance Party has received or recovered as a result of taking legal or arbitration proceedings in accordance with
the terms of this Agreement, if:
|
|
(i) |
it notified that other Finance Party of the legal or arbitration proceedings;
|
|
(ii) |
the taking legal or arbitration proceedings was in accordance with the terms of this Agreement; and
|
|
(iii) |
that other Finance Party had an opportunity to participate in those legal or arbitration proceedings but did not do so as soon as reasonably practicable having received notice and did not take separate legal or arbitration
proceedings.
|
38 |
Payment mechanics
|
38.1 |
Payments to the Agent
|
|
(a) |
On each date on which an Obligor or a Lender is required to make a payment under a Finance Document, that Obligor or Lender shall make the same available to the Agent (unless a contrary indication appears in a Finance Document)
for value on the due date at the time and in such funds specified by the Agent as being customary at the time for settlement of transactions in the relevant currency in the place of payment.
|
|
(b) |
Payment shall be made to such account in the principal financial centre of the country of that currency (or, in relation to euro, in a principal financial centre in such Participating Member State or London, as specified by the
Agent) and with such bank as the Agent, in each case, specifies.
|
38.2 |
Distributions by the Agent
|
38.3 |
Distributions to an Obligor
|
38.4 |
Clawback and pre-funding
|
|
(a) |
Where a sum is to be paid to the Agent under the Finance Documents for another Party, the Agent is not obliged to pay that sum to that other Party (or to enter into or perform any related exchange contract) until it has been
able to establish to its satisfaction that it has actually received that sum.
|
|
(b) |
Unless paragraph (c) below applies, if the Agent pays an amount to another Party and it proves to be the case that the Agent had not actually received that amount, then the Party to whom that amount (or the proceeds of any
related exchange contract) was paid by the Agent shall on demand refund the same to the Agent together with interest on that amount from the date of payment to the date of receipt by the Agent, calculated by the Agent to reflect
its cost of funds.
|
|
(c) |
If the Agent has notified the Lenders that it is willing to make available amounts for the account of a Borrower before receiving funds from the Lenders, and such Lenders agree, then if and to the extent that the Agent does so
but it proves to be the case that it does not then receive funds from a Lender in respect of a sum which it paid to a Borrower:
|
|
(i) |
the Agent shall notify the Borrowers of that Lender’s identity and the Borrowers shall on demand refund it to the Agent; and
|
|
(ii) |
the Lender by whom those funds should have been made available or, if that Lender fails to do so, the Borrowers, shall on demand pay to the Agent the amount
|
38.5 |
Impaired Agent
|
|
(a) |
If, at any time, the Agent becomes an Impaired Agent, the Borrowers or a Lender which is required to make a payment under the Finance Documents to the Agent in accordance with clause 38.1 (Payments
to the Agent) may instead either:
|
|
(i) |
pay that amount direct to the required recipient(s); or
|
|
(ii) |
if in its absolute discretion it considers that it is not reasonably practicable to pay that amount direct to the required recipient(s), pay that amount or the relevant part of that amount to an interest-bearing account held
with an Acceptable Bank within the meaning of paragraph (a) of the definition of “Acceptable Bank” and in relation to which no Insolvency Event has occurred and is continuing, in the name of the Borrowers or the Lender making the
payment (the Paying Party) and designated as a trust account for the benefit of the Party or Parties beneficially entitled to that payment under the Finance Documents (the Recipient Party or Recipient Parties).
|
|
(b) |
All interest accrued on the amount standing to the credit of the trust account shall be for the benefit of the Recipient Party or the Recipient Parties pro rata to their respective entitlements.
|
|
(c) |
A Party which has made a payment in accordance with this clause 43.5 shall be discharged of the relevant payment obligation under the Finance Documents and shall not take any credit risk with respect to the amounts standing to
the credit of the trust account.
|
|
(d) |
Promptly upon the appointment of a successor Agent in accordance with this Agreement, each Paying Party shall (other than to the extent that that Party has given an instruction pursuant to paragraph (e) below) give all
requisite instructions to the bank with whom the trust account is held to transfer the amount (together with any accrued interest) to the successor Agent for distribution to the relevant Recipient Party or Recipient Parties in
accordance with clause 38.2 (Distributions by the Agent).
|
|
(e) |
A Paying Party shall, promptly upon request by a Recipient Party and to the extent:
|
|
(i) |
that it has not given an instruction pursuant to paragraph (d) above; and
|
|
(ii) |
that it has been provided with the necessary information by that Recipient Party,
|
38.6 |
Partial payments
|
|
(a) |
If the Agent receives a payment for application against amounts due in respect of any Finance Documents that is insufficient to discharge all the amounts then due and payable by an Obligor under those Finance Documents, the
Agent shall apply that payment towards the obligations of that Obligor under the Finance Documents in the following order:
|
|
(i) |
first, in or towards payment pro rata of any unpaid amount owing to the Agent, the Security Agent or the Arranger under those Finance Documents;
|
|
(ii) |
secondly, in or towards payment to the Lenders pro rata of any amount owing to the Lenders under clause 32.15 (Lenders’ indemnity to the Agent and others);
|
|
(iii) |
thirdly, in or towards payment to the Lenders pro rata of any accrued interest, fee or commission due but unpaid under those Finance Documents;
|
|
(iv) |
fourthly, in or towards payment to the Lenders pro rata of any amount of principal due but unpaid to the Lenders under those Finance Documents; and
|
|
(v) |
fifthly, in or towards payment pro rata of any other sum due but unpaid to the Finance Parties under the Finance Documents.
|
|
(b) |
The Agent shall, if so directed by all the Lenders, vary the order set out in paragraphs (ii) to (v) of paragraph (a).
|
|
(c) |
Paragraphs (a) and (b) above will override any appropriation made by an Obligor.
|
38.7 |
No set-off by Obligors
|
38.8 |
Business Days
|
|
(a) |
Any payment under the Finance Documents which is due to be made on a day that is not a Business Day shall be made on the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is
not).
|
|
(b) |
During any extension of the due date for payment of any principal or Unpaid Sum under this Agreement interest is payable on the principal or Unpaid Sum at the rate payable on the original due date.
|
38.9 |
Currency of account
|
|
(a) |
Subject to paragraphs (b) and (c) below, dollars is the currency of account and payment for any sum due from an Obligor under any Finance Document.
|
|
(b) |
A repayment of all or part of the Loan or an Unpaid Sum and each payment of interest shall be made in dollars on its due date.
|
|
(c) |
Each payment in respect of the amount of any costs, expenses or Taxes or other losses shall be made in dollars and, if they were incurred in a currency other than dollars, the amount payable under the Finance Documents shall be
the equivalent in dollars of the relevant amount in such other currency on the date on which it was incurred.
|
|
(d) |
All moneys received or held by the Security Agent or by a Receiver under a Security Document in a currency other than dollars may be sold for dollars and the Obligor which executed that Security Document shall indemnify the
Security Agent against the full cost in relation to the sale. Neither the Security Agent nor such Receiver will have any liability to that Obligor in respect of any loss resulting from any fluctuation in exchange rates after the
sale.
|
38.10 |
Change of currency
|
|
(a) |
Unless otherwise prohibited by law, if more than one currency or currency unit are at the same time recognised by the central bank of any country as the lawful currency of that country, then:
|
|
(i) |
any reference in the Finance Documents to, and any obligations arising under the Finance Documents in, the currency of that country shall be translated into, or paid
|
|
(ii) |
any translation from one currency or currency unit to another shall be at the official rate of exchange recognised by the central bank for the conversion of that currency or currency unit into the other, rounded up or down by
the Agent (acting reasonably).
|
|
(b) |
If a change in any currency of a country occurs, this Agreement will, to the extent the Agent (acting reasonably and after consultation with the Borrowers) specifies to be necessary, be amended to comply with any generally
accepted conventions and market practice in the Interbank Market and otherwise to reflect the change in currency.
|
38.11 |
Disruption to payment systems etc.
|
|
(a) |
the Agent may, and shall if requested to do so by the Borrowers, consult with the Borrowers with a view to agreeing with the Borrowers such changes to the operation or administration of the Facility as the Agent may deem
necessary in the circumstances;
|
|
(b) |
the Agent shall not be obliged to consult with the Borrowers in relation to any changes mentioned in paragraph (a) above if, in its opinion, it is not practicable to do so in the circumstances and, in any event, shall have no
obligation to agree to such changes;
|
|
(c) |
the Agent may consult with the Finance Parties in relation to any changes mentioned in paragraph (a) above but shall not be obliged to do so if, in its opinion, it is not practicable to do so in the circumstances;
|
|
(d) |
any such changes agreed upon by the Agent and the Borrowers shall (whether or not it is finally determined that a Disruption Event has occurred) be binding upon the Parties as an amendment to (or, as the case may be, waiver of)
the terms of the Finance Documents notwithstanding the provisions of clause 44 (Amendments and grant of waivers);
|
|
(e) |
the Agent shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever (including, without limitation for negligence, gross negligence or any other category of
liability whatsoever but not including any claim based on the fraud of the Agent) arising as a result of its taking, or failing to take, any actions pursuant to or in connection with this clause 38.11; and
|
|
(f) |
the Agent shall notify the Finance Parties of all changes agreed pursuant to paragraph (d) above.
|
39 |
Set-off
|
40 |
Notices
|
40.1 |
Communications in writing
|
40.2 |
Addresses
|
|
(i) |
in the case of any Obligor who is a Party, that identified with its name in Schedule 1 (The original parties);
|
|
(ii) |
in the case of any Obligor who is not a Party, that identified in any Finance Document to which it is a party;
|
|
(iii) |
in the case of the Security Agent, the Agent and any other original Finance Party that identified with its name in Schedule 1 (The original parties); and
|
|
(iv) |
in the case of each Lender or other Finance Party, that notified in writing to the Agent on or prior to the date on which it becomes a Party in the relevant capacity,
|
40.3 |
Delivery
|
|
(a) |
Any communication or document made or delivered by one person to another under or in connection with the Finance Documents will only be effective:
|
|
(i) |
if by way of fax, when received in legible form; or
|
|
(ii) |
if by way of letter, when it has been left at the relevant address or five Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address,
|
|
(b) |
Any communication or document to be made or delivered to the Agent or the Security Agent will be effective only when actually received by the Agent or the Security Agent and then only if it is expressly marked for the attention
of the department or officer identified in Schedule 1 (The original parties) (or any substitute department or officer as the Agent or the Security Agent shall specify for this purpose).
|
|
(c) |
All notices from or to an Obligor shall be sent through the Agent.
|
|
(d) |
Any communication or document made or delivered to the Borrowers in accordance with this clause 40.3 will be deemed to have been made or delivered to each of the Obligors.
|
|
(e) |
Any communication or document which becomes effective, in accordance with paragraphs (a) to (d) above, after 5:00pm in the place of receipt shall be deemed only to become effective on the following day.
|
40.4 |
Notification of address and fax number
|
40.5 |
Communication when Agent is Impaired Agent
|
|
40.6 |
Electronic communication
|
|
(a) |
Any communication to be made between any two Parties under or in connection with the Finance Documents may be made by electronic mail or other electronic means (including, without limitation, by way of posting to a secure
website) if those two Parties:
|
|
(i) |
notify each other in writing of their electronic mail address and/or any other information required to enable the transmission of information by that means; and
|
|
(ii) |
notify each other of any change to their address or any other such information supplied by them by not less than five Business Days’ notice.
|
|
(b) |
Any such electronic communication as specified in paragraph (a) above to be made between an Obligor and a Finance Party may only be made in that way to the extent that those two Parties agree that, unless and until notified to
the contrary, this is to be an accepted form of communication.
|
|
(c) |
Any such electronic communication as specified in paragraph (a) above made between any two Parties will be effective only when actually received (or made available) in readable form and in the case of any electronic
communication made by a Party to the Agent or the Security Agent only if it is addressed in such a manner as the Agent or the Security Agent shall specify for this purpose.
|
|
(d) |
Any electronic communication which becomes effective, in accordance with paragraph (c) above, after 5:00 p. m. in the place in which the Party to whom the relevant communication is sent or made available has its address for the
purpose of this Agreement or any other Finance Document shall be deemed only to become effective on the following day.
|
|
(e) |
Any reference in a Finance Document to a communication being sent or received shall be construed to include that communication being made available in accordance with this clause 40.6.
|
40.7 |
English language
|
|
(a) |
Any notice given under or in connection with any Finance Document shall be in English.
|
|
(b) |
All other documents provided under or in connection with any Finance Document shall be:
|
|
(i) |
in English; or
|
|
(ii) |
if not in English, and if so required by the Agent or the Security Agent, accompanied by a certified English translation and, in this case, the English
|
41 |
Calculations and certificates
|
41.1 |
Accounts
|
41.2 |
Certificates and determinations
|
41.3 |
Day count convention
|
42 |
Partial invalidity
|
43 |
Remedies and waivers
|
44 |
Amendments and grant of waivers
|
44.1 |
Required consents
|
|
(a) |
Subject to clauses 44.2 (All Lender matters) and 44.3 (Other exceptions), any term of the Finance Documents may be amended or waived only with
the consent of the Majority Lenders and the Borrowers and any such amendment or waiver agreed or given by the Agent will be binding on all the Finance Parties and other Obligors.
|
|
(b) |
The Agent may (or, in the case of the Security Documents, instruct the Security Agent to) effect, on behalf of any Finance Party, any amendment or waiver permitted by this clause 44.
|
|
(c) |
Without prejudice to the generality of paragraphs (c), (d) and (e) of clause 32.11 (Rights and discretions of the Agent), the Agent may engage, pay for and rely on the services of
lawyers in determining the consent level required for and effecting any amendment, waiver or consent under this Agreement.
|
|
(d) |
Each Obligor agrees to any such amendment or waiver permitted by this clause 44 which is agreed to by the Borrowers. This includes any amendment or waiver which would, but for this paragraph (d), require the consent of the
Parent.
|
44.2 |
All Lender matters
|
|
(a) |
the definition of “Change of Control” in clause 1.1 (Definitions);
|
|
(b) |
the definition of “Majority Lenders” in clause 1.1 (Definitions);
|
|
(c) |
the definition of “Last Availability Date” in clause 1.1 (Definitions);
|
|
(d) |
an extension to the date of payment of any amount under the Finance Documents;
|
|
(e) |
a reduction in the Margin or a reduction in the amount of any payment of principal, interest, fees or commission payable or the rate at which they are calculated;
|
|
(f) |
an increase in, or extension of, any Commitment or the Total Commitments, an extension of any period within which the Facility is available for Utilisation or any requirement that a cancellation of Commitments reduces the
Commitments of the Lenders rateably;
|
|
(g) |
a change to any Borrower or any other Obligor;
|
|
(h) |
any provision which expressly requires the consent or approval of all the Lenders;
|
|
(i) |
clause 37 (Sharing among the Finance Parties);
|
|
(j) |
clause 2.2 (Finance Parties’ rights and obligations), clause 7.1 (Illegality), 7.2 (Change of control),
clause 19.38 (Money Laundering), clause 19.39 (Sanctions), clause 20.11 (Money Laundering), clause 22.13 (Sanctions), clause 31 (Changes to the Lenders), clause 37.1 (Payments to Finance Parties), this clause 44 (Amendments and grant of waivers), clause 46 (Counterparts) or clause 49.1 (Jurisdiction of English courts);
|
|
(k) |
the order of distribution under clause 38.5 (Partial payments);
|
|
(l) |
the order of distribution under clause 35.1 (Order of application);
|
|
(m) |
the currency in which any amount is payable under any Finance Document;
|
|
(n) |
(other than as expressly permitted by the provisions of the Finance Documents) the nature or scope of the Charged Property or of the manner in which the proceeds of enforcement of the Transaction Security are distributed;
|
|
(o) |
(other than as expressly permitted by the provisions of any Finance Document) the nature or scope of any guarantee and indemnity granted under any Finance Document (including under clause 18 (Guarantee
and indemnity)); or
|
|
(p) |
the release of the Transaction Security or the Guarantee or the circumstances in which any of the Transaction Security or the Guarantee is permitted or required to be released under any of the Finance Documents,
|
44.3 |
Other exceptions
|
|
(a) |
An amendment or waiver which relates to the rights or obligations of the Agent, the Security Agent or the Arranger in their respective capacities as such (and not just as a Lender) may not be effected without the consent of the
Agent, the Security Agent or the Arranger (as the case may be).
|
|
(b) |
Notwithstanding clauses 44.1 (Required consents), 44.2 (All Lender matters) and paragraph (a) above, the Agent may make technical amendments to
the Finance Documents arising out of manifest errors on the face of the Finance Documents, where such amendments would not prejudice or otherwise be adverse to the interests of any Finance Party without any reference or consent of
the Finance Parties.
|
|
(c) |
Amendments to, or waivers in respect of, any Finance Document may only be agreed in writing.
|
44.4 |
Replacement of Screen Rate
|
|
(a) |
Subject to clause 44.3 (Other exceptions), if a Screen Rate Replacement Event has occurred in relation to the Screen Rate any amendment or waiver which relates to providing for the use
of a Replacement Benchmark; and
|
|
(i) |
aligning any provision of any Finance Document to the use of that Replacement Benchmark;
|
|
(ii) |
enabling that Replacement Benchmark to be used for the calculation of interest under this Agreement (including, without limitation, any consequential changes required to enable that Replacement Benchmark to be used for the
purposes of this Agreement);
|
|
(iii) |
implementing market conventions applicable to that Replacement Benchmark;
|
|
(iv) |
providing for appropriate fallback (and market disruption) provisions for that Replacement Benchmark; or
|
|
(v) |
adjusting the pricing to reduce or eliminate, to the extent reasonably practicable, any transfer or economic value from one Party to another as a result of the application of that Replacement Benchmark (and if any adjustment or
method for calculating any adjustment has been formally designated, nominated or recommended by the Relevant Nominating Body, the adjustment shall be determined on the basis of that designation, nomination or recommendation),
|
|
(b) |
For the purposes of this clause 44.4, the following definitions shall have the following meanings:
|
|
(a) |
formally designated, nominated or recommended as the replacement for the Screen Rate by:
|
|
(i) |
the administrator of that Screen Rate; or
|
|
(ii) |
any Relevant Nominating Body,
|
|
(b) |
in the opinion of the Majority Lenders and the Borrowers, generally accepted in the international or any relevant domestic syndicated loan markets as the appropriate successor to the Screen Rate; or
|
|
(c) |
in the opinion of the Majority Lenders and the Borrowers, an appropriate successor to the Screen Rate.
|
|
(a) |
the methodology, formula or other means of determining that Screen Rate has, in the opinion of the Majority Lenders and the Borrowers, materially changed; or
|
|
(A) |
the administrator of that Screen Rate or its supervisor publicly announces that such administrator is insolvent; or
|
|
(B) |
information is published in any order, decree, notice, petition or filing, however described, of or filed with a court, tribunal, exchange, regulatory authority or similar administrative, regulatory or judicial body which
reasonably confirms that the administrator of that Screen Rate is insolvent,
|
|
(ii) |
the administrator of that Screen Rate publicly announces that it has ceased or will cease, to provide that Screen Rate permanently or indefinitely and, at that time, there is no successor administrator to continue to provide
that Screen Rate; or
|
|
(iii) |
the supervisor of the administrator of that Screen Rate publicly announces that the Screen Rate has been or will be permanently or indefinitely discontinued; or
|
|
(iv) |
the administrator of that Screen Rate or its supervisor announces that that Screen Rate may no longer be used; or
|
|
(c) |
the administrator of the Screen Rate determines that the Screen Rate should be calculated in accordance with its reduced submissions or other contingency or fallback policies or arrangements and either:
|
|
(i) |
the circumstance(s) or event(s) leading to such determination are not (in the opinion of the Majority Lenders and the Borrowers) temporary; or
|
|
(ii) |
that Screen Rate is calculated in accordance with any such policy or arrangement for a period no less than 15 Business Days; or
|
|
(d) |
in the opinion of the Majority Lenders and the Borrowers, the Screen Rate is otherwise no longer appropriate for the purposes of calculating interest under this Agreement.
|
44.5 |
Releases
|
|
(a) |
any Charged Property from the Transaction Security; or
|
|
(b) |
any Obligor from any of its guarantee or other obligations under any Finance Document.
|
44.6 |
Disenfranchisement of Defaulting Lenders
|
|
(a) |
For so long as a Defaulting Lender has any Available Commitment, in ascertaining:
|
|
(i) |
the Majority Lenders; or
|
|
(ii) |
whether:
|
|
(A) |
any given percentage (including, for the avoidance of doubt, unanimity) of the Total Commitments under the Facility; or
|
|
(B) |
the agreement of any specified group of Lenders,
|
|
(b) |
For the purposes of this clause 44.6, the Agent may assume that the following Lenders are Defaulting Lenders:
|
|
(i) |
any Lender which has notified the Agent that it has become a Defaulting Lender; and
|
|
(ii) |
any Lender in relation to which it is aware that any of the events or circumstances referred to in paragraphs (a), (b) or (c) of the definition of “Defaulting Lender” has occurred,
|
44.7 |
Excluded Commitments
|
|
(a) |
any Defaulting Lender fails to respond to a request for a consent, waiver, amendment of or in relation to any term of any Finance Document or any other vote of Lenders under the terms of this Agreement within 10 Business Days
of that request being made; or
|
|
(b) |
any Lender which is not a Defaulting Lender fails to respond to such a request (other than an amendment, waiver or consent referred to in paragraphs (c), (d), (e) and (k) of clause 44.2 (All
Lender matters)) or such a vote within 20 Business Days of that request being made,
|
|
(i) |
its Commitment or its participation in the Loan shall not be included for the purpose of calculating the Total Commitments or the amount of the Loan when ascertaining whether any relevant percentage (including, for the
avoidance of doubt, unanimity) of Total Commitments or the amount of the Loan has been obtained to approve that request; and
|
|
(ii) |
its status as a Lender shall be disregarded for the purpose of ascertaining whether the agreement of any specified group of Lenders has been obtained to approve that request.
|
44.8 |
Replacement of a Defaulting Lender
|
|
(a) |
The Borrowers may, at any time a Lender has become and continues to be a Defaulting Lender, by giving 10 Business Days’ prior written notice to the Agent and such Lender replace such Lender by requiring such Lender to (and, to
the extent permitted by law such Lender shall) assign pursuant to clause 31 (Changes to the Lenders) all (and not part only) of its rights under this Agreement (and any Security Document to
which that Lender is a party in its capacity as a Lender) to an Eligible Institution (a Replacement Lender) which confirms its willingness to undertake and does undertake all the
obligations or all the relevant obligations of the assigning Lender in accordance with clause 31 (Changes to the Lenders) for a purchase price in cash payable at the time of transfer which
is either:
|
|
(i) |
in an amount equal to:
|
|
(A) |
the outstanding principal amount of such Lender’s participation in the Loan;
|
|
(B) |
all accrued interest owing to such Lender;
|
|
(C) |
the Break Costs which would have been payable to such Lender pursuant to clause 11.5 (Break Costs) had the Borrowers prepaid in full that Lender’s participation in the Loan on the date
of the assignment; and
|
|
(D) |
all other amounts payable to that Lender under the Finance Documents on the date of the assignment or
|
|
(ii) |
in an amount agreed between that Defaulting Lender, the Replacement Lender and the Borrowers and which does not exceed the amount described in paragraph (i) above.
|
|
(b) |
Any assignment of rights by a Defaulting Lender pursuant to this clause 44.8 shall be subject to the following conditions:
|
|
(i) |
the Borrowers shall have no right to replace the Agent or the Security Agent;
|
|
(ii) |
neither the Agent nor the Defaulting Lender shall have any obligation to the Borrowers to find a Replacement Lender;
|
|
(iii) |
the assignment must take place no later than 14 Business Days after the notice referred to in paragraph (a) above (or such other longer period as agreed by the Majority Lenders);
|
|
(iv) |
in no event shall the Defaulting Lender be required to pay or surrender to the Replacement Lender any of the fees received by the Defaulting Lender pursuant to the Finance Documents; and
|
|
(v) |
the Defaulting Lender shall only be obliged to assign its rights pursuant to paragraph (a) above once it is satisfied that it has complied with all necessary “know your customer” or other similar checks under all applicable
laws and regulations in relation to that assignment to the Replacement Lender.
|
|
(c) |
The Defaulting Lender shall perform the checks described in paragraph (b) (v) above as soon as reasonably practicable following delivery of a notice referred to in paragraph (a) above and shall notify the Agent and the
Borrowers when it is satisfied that it has complied with those checks.
|
44.9 |
Disenfranchisement of Parent Affiliates
|
|
(a) |
For so long as a Parent Affiliate:
|
|
(i) |
beneficially owns a Commitment; or
|
|
(ii) |
has entered into a sub-participation agreement relating to a Commitment or other agreement or arrangement having a substantially similar economic effect and such agreement or arrangement has not been terminated,
|
|
(A) |
the Majority Lenders; or
|
|
(B) |
whether:
|
|
(1) |
any given percentage (including, for the avoidance of doubt, unanimity) of the Total Commitments; or
|
|
(2) |
the agreement of any specified group of Lenders,
|
|
(iii) |
has been obtained to approve any request for a consent, waiver, amendment or other vote under the Finance Documents,
|
|
(b) |
Each Lender shall, unless such Debt Purchase Transaction is an assignment or transfer, promptly notify the Agent in writing if it knowingly enters into a Debt Purchase Transaction with a Parent Affiliate (a Notifiable Debt
Purchase Transaction), such notification to be substantially in the form set out in Part I of Schedule 9 (Forms of Notifiable Debt Purchase Transaction Notice).
|
|
(c) |
A Lender shall promptly notify the Agent if a Notifiable Debt Purchase Transaction to which it is a party:
|
|
(i) |
is terminated; or
|
|
(ii) |
ceases to be with a Parent Affiliate,
|
|
(iii) |
such notification to be substantially in the form set out in Part II of Schedule 9 (Forms of Notifiable Debt Purchase Transaction Notice).
|
|
(d) |
Each Parent Affiliate that is a Lender agrees that:
|
|
(i) |
in relation to any meeting or conference call to which all the Lenders are invited to attend or participate, it shall not attend or participate in the same, nor be entitled to receive the agenda or any minutes of the same; and
|
|
(ii) |
in its capacity as Lender, it shall not be entitled to receive any report or other document prepared at the behest of, or on the instructions of, the Agent or one or more of the Lenders.
|
45 |
Confidentiality
|
45.1 |
Confidential Information
|
45.2 |
Disclosure of Confidential Information
|
|
(a) |
Any Finance Party may disclose to any of its Affiliates and Related Funds and any of its or their officers, directors, employees, professional and other advisers, auditors, partners and Representatives and to any of their
insurers, reinsurers, insurance brokers and their own officers, partners, employees, Affiliates, professional or other advisers or Representatives (irrespective of whether such party is located in the jurisdiction where a Finance
Party is located) such Confidential Information as that Finance Party shall consider appropriate if any person to whom the Confidential Information is to be given pursuant to this paragraph (a) is informed in writing of its
confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to
maintain the confidentiality of the information or is otherwise bound by requirements of confidentiality in relation to the Confidential Information.
|
|
(b) |
Any Finance Party and any of that Finance Party’s Affiliates may disclose to any person:
|
|
(i) |
to (or through) whom it assigns or transfers (or may potentially assign or transfer) all or any of its rights and/or obligations under one or more Finance Documents or which succeeds (or which may potentially succeed) it as
Agent or Security Agent, and, in each case, to any of that person’s Affiliates, Related Funds, Representatives and professional advisers;
|
|
(ii) |
with (or through) whom it enters into (or may potentially enter into), whether directly or indirectly, any sub-participation in relation to, or any other transaction under which payments are to be made or may be made by
reference to, one or more Finance Documents (including derivative market participants) and/or one or more Obligors and to any of that person’s Affiliates, Related Funds, Representatives and professional advisers;
|
|
(iii) |
appointed by any Finance Party or any of that Finance Party’s Affiliates or by a person to whom paragraphs (b)(i) or (b)(ii) above applies to receive communications, notices, information or documents delivered pursuant to the
Finance Documents on its behalf (including, without limitation, any person appointed under paragraph (c) of clause 32.20 (Agent’s relationship with the Lenders));
|
|
(iv) |
appointed by any Finance Party or any of that Finance Party’s Affiliates or by a person to whom paragraph (b)(ii) above applies to act as a verification agent in respect of any transaction referred to in paragraph (b)(ii)
above;
|
|
(v) |
who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in paragraphs (b)(i) or (b)(ii) above or who is a derivative market participant;
|
|
(vii) |
to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes;
|
|
(viii) |
to whom or for whose benefit that Finance Party charges, assigns or otherwise creates Security (or may do so) pursuant to clause 31.8 (Security over Lenders’ rights);
|
|
(ix) |
who is a Party; or
|
|
(x) |
with the consent of the Borrowers,
|
|
(A) |
in relation to paragraphs (b)(i), (b)(ii), (b)(iii) and (b)(iv) above, the person to whom the Confidential Information is to be given has entered into a confidentiality undertaking substantially in a recommended form of the
Loan Market Association from time to time or in any other form agreed between the Borrowers and the relevant Finance Party (a Confidentiality Undertaking) except that there shall be no
requirement for a Confidentiality Undertaking if the recipient is a professional adviser and is subject to professional obligations to maintain the confidentiality of the Confidential Information;
|
|
(B) |
in relation to paragraph (b)(v) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking or is otherwise bound by requirements of confidentiality in relation to the
Confidential Information they receive and is informed that some or all of such Confidential Information may be price-sensitive information;
|
|
(C) |
in relation to paragraphs (b)(vi), (b)(vii) and (b)(viii) above, the person to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be
price-sensitive information except that there shall be no requirement to so inform if, in the opinion of that Finance Party, it is not practicable so to do in the circumstances;
|
|
(c) |
to any person appointed by that Finance Party or by a person to whom paragraphs (b)(i) or (b)(ii) above applies to provide administration or settlement services in respect of one or more of the Finance Documents including
without limitation, in relation to the trading of participations in respect of the Finance Documents, such Confidential Information as may be required to be disclosed to enable such service provider to provide any of the services
referred to in this paragraph (c) if the service provider to whom the Confidential Information is to be given has entered into a confidentiality agreement substantially in the form of the LMA Master Confidentiality Undertaking for
Use With Administration/Settlement Service Providers or such other form of confidentiality undertaking agreed between the Borrowers and the relevant Finance Party; and
|
|
(d) |
to any rating agency (including its professional advisers) such Confidential Information as may be required to be disclosed to enable such rating agency to carry out its normal rating activities in relation to the Finance
Documents and/or the Obligors if the rating agency to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive
information.
|
45.3 |
Disclosure to numbering service providers
|
|
(a) |
Any Finance Party may disclose to any national or international numbering service provider appointed by that Finance Party to provide identification numbering services in respect of this Agreement, the Facility and/or one or
more Obligors the following information:
|
|
(i) |
names of Obligors;
|
|
(ii) |
country of domicile of Obligors;
|
|
(iii) |
place of incorporation of Obligors;
|
|
(iv) |
date of this Agreement;
|
|
(v) |
clause 46 (Counterparts);
|
|
(vi) |
the names of the Agent and the Arranger;
|
|
(vii) |
date of each amendment and restatement of this Agreement;
|
|
(viii) |
amount of Total Commitments;
|
|
(ix) |
currency of the Facility;
|
|
(x) |
type of Facility;
|
|
(xi) |
ranking of Facility;
|
|
(xii) |
the term of the Facility;
|
|
(xiii) |
changes to any of the information previously supplied pursuant to paragraphs 45.3(a)(i) to 45.3(a)(xii) above; and
|
|
(xiv) |
such other information agreed between such Finance Party and the Borrowers,
|
|
(b) |
The Parties acknowledge and agree that each identification number assigned to this Agreement, the Facility and/or one or more Obligors by a numbering service provider and the information associated with each such number may be
disclosed to users of its services in accordance with the standard terms and conditions of that numbering service provider.
|
|
(c) |
The Borrowers represent that none of the information set out in clauses 45.3(a)(i) to 45.3(a)(xiii) above is, nor will at any time be, unpublished price-sensitive information.
|
|
(d) |
The Agent shall notify the Borrowers and the other Finance Parties of:
|
|
(i) |
the name of any numbering service provider appointed by the Agent in respect of this Agreement, the Facility and/or one or more Obligors; and
|
|
(ii) |
the number or, as the case may be, numbers assigned to this Agreement, the Facility and/or one or more Obligors by such numbering service provider.
|
45.4 |
Entire agreement
|
45.5 |
Inside information
|
45.6 |
Banking secrecy laws
|
45.7 |
Continuing obligations
|
|
(a) |
the date on which all amounts payable by the Obligors under or in connection with the Finance Documents have been paid in full and all Commitments have been cancelled or otherwise cease to be available; and
|
|
(b) |
the date on which such Finance Party otherwise ceases to be a Finance Party.
|
45.8 |
Confidentiality of Funding Rates
|
|
(a) |
Confidentiality and disclosure
|
|
(i) |
The Agent and each Obligor agree to keep each Funding Rate confidential and not to disclose it to anyone, save to the extent permitted by paragraphs (ii) and (iii) below.
|
|
(ii) |
The Agent may disclose:
|
|
(A) |
any Funding Rate to the Borrowers pursuant to clause 9.4 (Notification of rates of interest); and
|
|
(B) |
any Funding Rate to any person appointed by it to provide administration services in respect of one or more of the Finance Documents to the extent necessary to enable such service provider to provide those services if the
service provider to whom that information is to be given has entered into a confidentiality agreement substantially in the form of the LMA Master Confidentiality Undertaking for Use With Administration/Settlement Service Providers
or such other form of confidentiality undertaking agreed between the Agent and the relevant Lender.
|
|
(iii) |
The Agent may disclose any Funding Rate, and each Obligor may disclose any Funding Rate, to:
|
|
(A) |
any of its Affiliates and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives if any person to whom that Funding Rate is to be given pursuant to this paragraph (i)
is informed in writing of its confidential nature and that it may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the
confidentiality of that Funding Rate or is otherwise bound by requirements of confidentiality in relation to it;
|
|
(B) |
any person to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant
stock exchange or pursuant to any applicable law or regulation if the person to whom that Funding Rate is to be given is informed in writing of its confidential nature and that it may be price-sensitive information except that
there shall be no requirement to so inform if, in the opinion of the Agent or the relevant Obligor, as the case may be, it is not practicable to do so in the circumstances;
|
|
(C) |
any person to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes if the person to whom that
Funding Rate is to be given is informed in writing of its confidential nature and that it may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of the Agent or the relevant
Obligor, as the case may be, it is not practicable to do so in the circumstances; and
|
|
(D) |
any person with the consent of the relevant Lender.
|
|
(b) |
Related obligations
|
|
(i) |
The Agent and each Obligor acknowledge that each Funding Rate is or may be price-sensitive information and that its use may be regulated or prohibited by applicable legislation including securities law relating to insider
dealing and market abuse and the Agent and each Obligor undertake not to use any Funding Rate for any unlawful purpose.
|
|
(ii) |
The Agent and each Obligor agree (to the extent permitted by law and regulation) to inform the relevant Lender:
|
|
(A) |
of the circumstances of any disclosure made pursuant to clause 45.8(a)(iii)(B) (Confidentiality and disclosure) except where such disclosure is made to any of the persons referred to in
that paragraph during the ordinary course of its supervisory or regulatory function; and
|
|
(B) |
upon becoming aware that any information has been disclosed in breach of this clause 45.8.
|
|
(c) |
No Event of Default
|
46 |
Counterparts
|
47 |
Contractual recognition of bail-in
|
|
(a) |
any Bail-In Action in relation to any such liability, including (without limitation):
|
|
(i) |
a reduction, in full or in part, in the principal amount, or outstanding amount due (including any accrued but unpaid interest) in respect of any such liability;
|
|
(ii) |
a conversion of all, or part of, any such liability into shares or other instruments of ownership that may be issued to, or conferred on, it; and
|
|
(iii) |
a cancellation of any such liability; and
|
|
(b) |
a variation of any term of any Finance Document to the extent necessary to give effect to any Bail-In Action in relation to any such liability.
|
48 |
Governing law
|
49 |
Enforcement
|
49.1 |
Jurisdiction of English courts
|
|
(a) |
The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement or any non-contractual obligations connected with it (including a dispute regarding the existence,
validity or termination of this Agreement) (a Dispute).
|
|
(b) |
The Parties agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary.
|
|
(c) |
Notwithstanding paragraph (a) above, no Finance Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Finance Parties may take concurrent
proceedings in any number of jurisdictions.
|
49.2 |
Service of process
|
|
(a) |
irrevocably appoints the person named in Schedule 1 (The original parties) as that Obligor’s English process agent as its agent for service of process in relation to any proceedings
before the English courts in connection with any Finance Document;
|
|
(b) |
agrees that failure by an agent for service of process to notify the relevant Obligor of the process will not invalidate the proceedings concerned; and
|
|
(c) |
if any person appointed as process agent for an Obligor is unable for any reason to act as agent for service of process, that Obligor must immediately (and in any event within ten days of such event taking place) appoint
another agent on terms acceptable to the Agent. Failing this, the Agent may appoint another agent for this purpose.
|
Name:
|
Fareastern Shipping Limited
|
Jurisdiction of incorporation
|
Malta
|
Registration number (or equivalent, if any)
|
C 52103
|
English process agent
|
Intermar Chartering (UK) Ltd., 9 Staple Inn, 1st Floor, Holborn, WC1V 7QH London, England
|
Registered office
|
147/1 St. Lucia Street, Valletta, Malta
|
Address for service of notices
|
97 Poseidonos Avenue & 2 Foivis Street, 16674 Glyfada, Athens, Greece
F.A.O. Mr Michael Gregos
Fax: +30 210 9680571
|
Name:
|
Pegasus Shipholding S.A.
|
Jurisdiction of incorporation
|
Marshall Islands
|
Registration number (or equivalent, if any
|
10748
|
English process agent
|
Intermar Chartering (UK) Ltd., 9 Staple Inn, 1st Floor, Holborn, WC1V 7QH London, England
|
Registered office
|
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
|
Address for service of notices
|
97 Poseidonos Avenue & 2 Foivis Street, 16674 Glyfada, Athens, Greece
F.A.O. Mr Michael Gregos
Fax: +30 210 9680571
|
Name:
|
Lance Shipping S.A.
|
Jurisdiction of incorporation
|
Marshall Islands
|
Registration number (or equivalent, if any)
|
10149
|
English process agent
|
Intermar Chartering (UK) Ltd., 9 Staple Inn, 1st Floor, Holborn, WC1V 7QH London, England
|
Registered office
|
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
|
Address for service of notices
|
97 Poseidonos Avenue & 2 Foivis Street, 16674 Glyfada, Athens, Greece
F.A.O. Mr Michael Gregos
Fax: +30 210 9680571
|
Name:
|
Seacrown Maritime Ltd.
|
Jurisdiction of incorporation
|
Marshall Islands
|
Registration number (or equivalent, if any)
|
10628
|
English process agent
|
Intermar Chartering (UK) Ltd., 9 Staple Inn, 1st Floor, Holborn, WC1V 7QH London, England
|
Registered office
|
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
|
Address for service of notices
|
97 Poseidonos Avenue & 2 Foivis Street, 16674 Glyfada, Athens, Greece
F.A.O. Mr Michael Gregos
Fax: +30 210 9680571
|
Name:
|
Navajo Marine Limited
|
Jurisdiction of incorporation
|
Marshall Islands
|
Registration number (or equivalent, if any)
|
47650
|
English process agent
|
Intermar Chartering (UK) Ltd., 9 Staple Inn, 1st Floor, Holborn, WC1V 7QH London, England
|
Registered office
|
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
|
Address for service of notices
|
97 Poseidonos Avenue & 2 Foivis Street, 16674 Glyfada, Athens, Greece
F.A.O. Mr Michael Gregos
Fax: +30 210 9680571
|
Name:
|
Solana Holding Ltd.
|
Jurisdiction of incorporation
|
Marshall Islands
|
Registration number (or equivalent, if any)
|
47644
|
English process agent
|
Intermar Chartering (UK) Ltd., 9 Staple Inn, 1st Floor, Holborn, WC1V 7QH London, England
|
Registered office
|
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
|
Address for service of notices
|
97 Poseidonos Avenue & 2 Foivis Street, 16674 Glyfada, Athens, Greece
F.A.O. Mr Michael Gregos
Fax: +30 210 9680571
|
Name:
|
Dynagas LNG Partners LP
|
Jurisdiction of incorporation
|
Marshall Islands
|
Registration number (or equivalent, if any)
|
950060
|
English process agent
|
Intermar Chartering (UK) Ltd., 9 Staple Inn, 1st Floor, Holborn, WC1V 7QH London, England
|
Registered office
|
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
|
Address for service of notices
|
97 Poseidonos Avenue & 2 Foivis Street, 16674 Glyfada, Athens, Greece
F.A.O. Mr Michael Gregos
Fax: +30 210 9680571
|
Parent
|
|
Name:
|
Dynagas LNG Partners LP
|
Jurisdiction of incorporation
|
Marshall Islands
|
Registration number (or equivalent, if any)
|
950060
|
English process agent
|
Intermar Chartering (UK) Ltd., 9 Staple Inn, 1st Floor, Holborn, WC1V 7QH London, England
|
Registered office
|
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
|
Address for service of notices
|
97 Poseidonos Avenue & 2 Foivis Street, 16674 Glyfada, Athens, Greece
F.A.O. Mr Michael Gregos
Fax: +30 210 9680571
|
Arctic LNG Guarantor
|
|
Name:
|
Arctic LNG Carriers Ltd.
|
Jurisdiction of incorporation
|
Marshall Islands
|
Registration number (or equivalent, if any)
|
77480
|
English process agent
|
Intermar Chartering (UK) Ltd., 9 Staple Inn, 1st Floor, Holborn, WC1V 7QH London, England
|
Registered office
|
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
|
Address for service of notices
|
97 Poseidonos Avenue & 2 Foivis Street, 16674 Glyfada, Athens, Greece
F.A.O. Mr Michael Gregos
Fax: +30 210 9680571
|
Dynagas Equity Guarantor
|
|
Name:
|
Dynagas Equity Holding Limited
|
Jurisdiction of incorporation
|
Marshall Islands
|
Registration number (or equivalent, if any)
|
99338
|
English process agent
|
Intermar Chartering (UK) Ltd., 9 Staple Inn, 1st Floor, Holborn, WC1V 7QH London, England
|
Registered office
|
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
|
Address for service of notices
|
97 Poseidonos Avenue & 2 Foivis Street, 16674 Glyfada, Athens, Greece
F.A.O. Mr Michael Gregos
Fax: +30 210 9680571
|
Dynagas Operating LP Guarantor
|
|
Name:
|
Dynagas Operating LP
|
Jurisdiction of incorporation
|
Marshall Islands
|
Registration number (or equivalent, if any)
|
950059
|
English process agent
|
Intermar Chartering (UK) Ltd., 9 Staple Inn, 1st Floor, Holborn, WC1V 7QH London, England
|
Registered office
|
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
|
Address for service of notices
|
97 Poseidonos Avenue & 2 Foivis Street, 16674 Glyfada, Athens, Greece
F.A.O. Mr Michael Gregos
Fax: +30 210 9680571
|
Dynagas Operating GP Guarantor
|
|
Name:
|
Dynagas Operating GP LLC
|
Jurisdiction of incorporation
|
Marshall Islands
|
Registration number (or equivalent, if any)
|
962418
|
English process agent
|
Intermar Chartering (UK) Ltd., 9 Staple Inn, 1st Floor, Holborn, WC1V 7QH London, England
|
Registered office
|
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
|
Address for service of notices
|
97 Poseidonos Avenue & 2 Foivis Street, 16674 Glyfada, Athens, Greece
F.A.O. Mr Michael Gregos
Fax: +30 210 9680571
|
Dynagas Finance Guarantor
|
|
Name:
|
Dynagas Finance Inc.
|
Jurisdiction of incorporation
|
Marshall Islands
|
Registration number (or equivalent, if any)
|
70905
|
English process agent
|
Intermar Chartering (UK) Ltd., 9 Staple Inn, 1st Floor, Holborn, WC1V 7QH London, England
|
Registered office
|
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
|
Address for service of notices
|
97 Poseidonos Avenue & 2 Foivis Street, 16674 Glyfada, Athens, Greece
F.A.O. Mr Michael Gregos
Fax: +30 210 9680571
|
Name
|
Citibank, N.A., London Branch
|
|
Facility Office and contact details for notices
|
[Omitted] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
Commitment ($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitment ($)
|
|
|
Name
|
Alpha Bank A.E.
|
|
Facility Office and contact details for notices
|
[Omitted] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
Commitment ($)
|
|
Total Commitments
|
$675,000,000
|
Name
|
Citibank Europe Plc, UK Branch
|
|
Office and contact details for notices
|
[Omitted] |
|
|
|
|
|
|
Name
|
Citibank, N.A., London Branch
|
|
Office and contact details for notices | [Omitted] |
|
|
|
|
Name
|
Citibank, N.A., London Branch as mandated lead arranger
|
Name
|
Credit Suisse AG as mandated lead arranger
|
Name
|
KfW IPEX-BANK GmbH as mandated lead arranger
|
Name
|
Deutsche Bank Ag Filiale Deutschlandgeschäft as mandated lead arranger
|
Name
|
Alpha Bank A.E. as mandated lead arranger
|
Name
|
Amsterdam Trade Bank N.V. as lead arranger
|
Name
|
E. Sun Commercial Bank, Ltd. (incorporated in Taiwan, with limited liability), Hong Kong Branch as arranger
|
Owner
|
Fareastern Shipping Limited
|
Name
|
Arctic Aurora
|
IMO Number
|
9645970
|
Year of build
|
2013
|
Charter
|
Time charterparty dated 13 June 2013 followed in direct continuation by a new time charterparty dated 20 December 2017 made between Fareastern Shipping Limited
and Equinor ASA (formerly known as Statoil ASA) as amended and supplemented from time to time
|
Charterer
|
Equinor ASA (formerly known as Statoil ASA)
|
Flag State
|
Malta
|
Classification
|
* 100A1, Liquefied Gas Tanker, Ship Type 2G, Methane (LNG) in Membrane Tanks, Maximum Vapour Pressure 0.25 barg, Minimum Temperature Minus 163 deg C, ShipRight(SDA, FDA Plus (40,
NA) FDA ICE, CM, ACS(B)), *IWS, LI, ECO(IHM)
Winterisation H(-30), D(-30), Ice Class 1A FS, Max/min draughts: Forward: 12,9/8.9m, Midship: 12.9/9.1m, Aft: 13.2/8.9m, Power required 18,751kw, Power installed 24,900kw.
* LMC, UMS, ICC, NAV1, IBS
Descriptive Note: Part Higher Tensile Steel, ShipRight(BWMP(S), MPMS, SERS, SCM)
|
Classification Society
|
Lloyd’s Register of Shipping
|
Major Casualty Amount
|
$2,000,000
|
Owner
|
Pegasus Shipholding S.A.
|
Name
|
Clean Energy
|
IMO Number
|
9323687
|
Year of build
|
2007
|
Charter
|
Time charterparty dated 31 October 2016 made between Pegasus Shipholding S.A. and Gazprom Marketing and Trading Singapore Pte. Ltd. as amended and supplemented
from time to time
|
Charterer
|
Gazprom Marketing and Trading Singapore Pte. Ltd.
|
Charter Guarantee
|
Guarantee dated 31 October 2016 issued by Gazprom Marketing and Trading Ltd in favour of Pegasus Shipholding S.A.
|
Charter Guarantor
|
Gazprom Marketing and Trading Ltd
|
Flag State
|
Marshall Islands
|
Classification
|
* 100A1, Liquefied Gas Tanker, Ship Type 2G, Methane (LNG) in Membrane tanks, Maximum Vapour Pressure 0.25 bar, Minimum Temperature minus 163o C, ShipRight (SDA), *IWS, LI, EP.
|
* LMC, UMS, ICC, NAV1, IBS
Descriptive Notes: ShipRight (FDA Plus, CM, BWMP(S), SCM, TCM, MPMS, SERS, SEA (Hss-4, L, VDR-4)). Part Higher Tensile Steel.
|
|
Classification Society
|
Lloyd’s Register
|
Major Casualty Amount
|
$2,000,000
|
Owner
|
Seacrown Maritime Ltd.
|
Name
|
Amur River
|
IMO Number
|
9317999
|
Year of build
|
2008
|
Charter
|
Time charterparty dated 17 April 2014 and made between Seacrown Maritime Ltd. and Gazprom Marketing and Trading Singapore Pte. Ltd. as amended and supplemented
from time to time.
|
Owner
|
Navajo Marine Limited
|
Name
|
Yenisei river
|
IMO Number
|
9629586
|
Year of build
|
2013
|
Charter
|
Time charterparty dated 14 January 2016 made between Navajo Marine Limited and Yamal Trade Pte. Ltd. as amended and supplemented from time to time.
|
Charter Guarantee
|
Guarantee dated 14 January 2016 issued by Joint-Stock Company Yamal LNG in favour of Navajo Marine Limited
|
Charter Guarantor
|
Joint-Stock Company Yamal LNG
|
Charterer
|
Yamal Trade Pte. Ltd.
|
Flag State
|
Marshall Islands
|
Classification
|
* 100A1, Liquefied Gas Tanker, Ship Type 2G, Methane
(LNG) in Membrane Tanks, Maximum Vapour Pressure 0.25 barg, Minimum Temperature Minus 163 deg C, ShipRight(SDA, FDA Plus (40, NA), FDA ICE, CM, ACS(B)), *IWS, LI, ECO(IHM)
Winterisation H(-30), D(-30), Ice Class 1A FS, Max/min draughts: Forward: 12,9/8.9m, Midship: 12.9/9.1m, Aft: 13.2/8.9m, Power required 18,751kw, Power installed 24,900kw.
* LMC, UMS, ICC, NAV1, IBS
Descriptive Note: Part Higher Tensile Steel, ShipRight(BWMP(S), MPMS, SERS, SCM)
|
Classification Society
|
Lloyd’s Register
|
Major Casualty Amount
|
$2,000,000
|
Owner
|
Solana Holding Ltd.
|
Name
|
Lena River
|
IMO Number
|
9629598
|
Year of build
|
2013
|
Charter
|
Time charterparty dated 14 January 2016 made between Solana Holding Ltd. and Yamal Trade Pte. Ltd. as amended and supplemented from time to time
|
Charterer
|
Yamal Trade Pte. Ltd.
|
Charter Guarantee
|
Guarantee dated 14 January 2016 issued by Joint-Stock Company Yamal LNG in favour of Navajo Marine Limited
|
Charter Guarantor
|
Joint-Stock Company Yamal LNG
|
Flag State
|
Marshall Islands
|
Classification
|
I * HULL * MACH
Liquefied gas carrier/LNG
Unrestricted navigation ICE CLASS 1A
CPS(WBT), * VeriSTAR-HULL DFL 40 years, * AUT-UMS, * AUT-IMS * SYS-NEQ-1, * SYS-IBS, MON-SHAFT, CLEANSHIP (C) GREEN PASSPORT, BWE, ERS-S, Fatigue PLUS spectral (worldwide
navigation with 10% North Atlantic) DF, INWATERSURVEY
|
Classification Society
|
Bureau Veritas
|
Major Casualty Amount
|
$2,000,000
|
1 |
Original Obligors' corporate documents
|
|
(a) |
A copy of the Constitutional Documents and, if applicable, a certificate of good standing of each Original Obligor.
|
|
(b) |
A copy of a resolution of the board of directors or board of managers of each Original Obligor (or, if applicable, any committee of such board empowered to approve and authorise the following matters):
|
|
(i) |
approving the terms of, and the transactions contemplated by, the Finance Documents (Relevant Documents) to which it is a party (its Relevant Documents)
and resolving that it execute, deliver and perform the Relevant Documents to which it is a party;
|
|
(ii) |
authorising a specified person or persons to execute its Relevant Documents on its behalf; and
|
|
(iii) |
authorising a specified person or persons, on its behalf, to sign and/or despatch all documents and notices (including, if relevant, any Utilisation Request and any Selection Notice) to be signed and/or despatched by it under
or in connection with its Relevant Documents.
|
|
(c) |
If applicable, a copy of a resolution of the board of directors or board of managers of the relevant entity, establishing any committee referred to in paragraph (b) above and conferring authority on that committee.
|
|
(d) |
A specimen of the signature of each person authorised by the resolution referred to in paragraph (b) above in relation to its Relevant Documents and any related documents.
|
|
(e) |
A copy of a resolution signed by all the holders of the issued shares or partnership interest or units or limited liability company interest in each Original Obligor, approving the terms of, and the transactions contemplated
by, its Relevant Documents.
|
|
(f) |
A copy of a resolution of the board of directors of each corporate shareholder of each Original Obligor approving the terms of the resolution referred to in paragraph (e) above.
|
|
(g) |
A certificate of the Parent (signed by a director) confirming that borrowing or guaranteeing or securing, as appropriate, the Total Commitments would not cause any borrowing, guarantee, security or similar limit binding on
any Original Obligor to be exceeded.
|
|
(h) |
A copy of any power of attorney under which any person is appointed by any Original Obligor to execute any of its Relevant Documents on its behalf.
|
|
(i) |
A certificate of an authorised signatory of each relevant Original Obligor certifying that each copy document relating to it specified in this Part of this Schedule is correct, complete and in full force and effect and has
not been amended or superseded as at a date no earlier than the date of this Agreement and that any such resolutions or power of attorney have not been revoked.
|
2 |
Legal opinions
|
|
(a) |
A legal opinion of Norton Rose Fulbright on matters of English law, substantially in the form distributed to the Original Lenders and approved by the Agent, the Security Agent and the Original Lenders prior to signing this
Agreement.
|
|
(b) |
A legal opinion of the legal advisers to the Arranger, the Security Agent and the Agent in each jurisdiction (other than England and Wales) in which an Obligor is formed or (as the case may be) incorporated and/or which is or
is to be the Flag State of a Mortgaged Ship, or in which an Account opened at the relevant time is established substantially in the form distributed to the Original Lenders and approved by the Agent, the Security Agent and the
Original Lenders prior to signing this Agreement.
|
3 |
Other documents and evidence
|
|
(a) |
Evidence that any process agent referred to in clause 49.2 (Service of process) or any equivalent provision of any other Finance Document entered into on or before the Utilisation
Date, if not an Original Obligor, has accepted its appointment.
|
|
(b) |
A copy of any other Authorisation or other document, opinion or assurance which the Agent considers to be necessary or desirable (if it has notified the Borrowers accordingly) in connection with the entry into and performance
of the transactions contemplated by any Finance Document or for the validity and enforceability of any Finance Document.
|
|
(c) |
The Original Financial Statements.
|
|
(d) |
The Fee Letters duly executed and evidence that the fees, commissions, costs and expenses then due from the Borrowers pursuant to clause 12 (Fees) and clause 17 (Costs and expenses) have been paid or will be paid by the Utilisation Date.
|
4 |
Bank Accounts
|
5 |
Charter Documents
|
6 |
"Know your customer" information
|
1 |
Corporate documents
|
|
(a) |
A certificate of an authorised signatory of the relevant Owner certifying that each copy document relating to it specified in Part 1 of this Schedule remains correct, complete and in full force and effect as at a date no
earlier than a date approved for this purpose and that any resolutions or power of attorney referred to in Part 1 of this Schedule in relation to it have not been revoked or amended.
|
|
(b) |
A certificate of an authorised signatory of each other Obligor which is party to any of the Original Security Documents required to be executed at or before the Utilisation certifying that each copy document relating to it
specified in Part 1 of this Schedule remains correct, complete and in full force and effect as at a date no earlier than a date approved for this purpose and that any resolutions or power of attorney referred to in Part 1 of
this Schedule in relation to it have not been revoked or amended.
|
2 |
Security
|
|
(a) |
The Mortgage and the Deed of Covenant or (as applicable) the General Assignment in respect of each Ship duly executed by the relevant Owner.
|
|
(b) |
A Manager's Undertaking in respect of each Ship duly executed by each Manager of each Ship.
|
|
(c) |
A Management Agreement Assignment in respect of each Management Agreement of each Ship.
|
|
(d) |
The Charter Assignment in respect of each Ship duly executed by the relevant Owner.
|
|
(e) |
Duly executed notices of assignment and acknowledgements of those notices as required by any of the above Security Documents.
|
|
(f) |
Any Account Security in respect of each such Account has been executed and delivered by the relevant Account Holder(s) in favour of the Security Agent and/or any of the other Finance Parties and that any notice required to be
given to an Account Bank under that Account Security has been given to it and acknowledged by it in the manner required by that Account Security and that an amount has been credited to it
|
3 |
Delivery and registration of Ship
|
|
(a) |
is legally and beneficially owned by the relevant Owner and registered in the name of the relevant Owner free from any Security Interests (other than Security
Interests created under the Finance Documents) through the relevant Registry as a ship under the laws and flag of the relevant Flag State;
|
|
(b) |
is classed with the relevant Classification free of all requirements and recommendations of the relevant Classification Society;
|
|
(c) |
is insured in the manner required by the Finance Documents;
|
|
(d) |
has been delivered, and accepted for service, under its Charter (which, for the avoidance of doubt, in the case of Ship E and Ship F, shall mean “Delivery” of the relevant Ship as defined in clause 1.1 of the relevant Charter
and has taken place in accordance with clause 8 of the relevant Charter); and
|
|
(e) |
is free of any charter commitment (except for its Charter) which would require approval under the Finance Documents.
|
4 |
Mortgage registration
|
5 |
Legal opinions
|
|
(a) |
A legal opinion of Norton Rose Fulbright on matters of English law, substantially in the form distributed to the Original Lenders and approved by the Agent, the Security Agent and the Original Lenders prior to signing this
Agreement in relation to Security Documents.
|
|
(b) |
A legal opinion of the legal advisers to the Arranger, the Security Agent and the Agent in each jurisdiction (other than England and Wales) in which an Obligor is formed or (as the case may be) incorporated and/or which is or
is to be the Flag State of a Mortgaged Ship, or in which an Account opened at the relevant time is established, substantially in the form distributed to the Original Lenders and approved by the Agent, the Security Agent and the
Original Lenders prior to signing this Agreement.
|
6 |
Insurance
|
|
(a) |
an opinion from insurance consultants appointed by the Agent on such Insurances;
|
|
(b) |
evidence that such Insurances have been placed in accordance with clause 25 (Insurance); and
|
|
(c) |
evidence that approved brokers, insurers and/or associations have issued or will issue letters of undertaking in favour of the Security Agent in an approved form in relation to the Insurances.
|
7 |
ISM and ISPS Code
|
|
(a) |
the document of compliance issued in accordance with the ISM Code to the person who is the operator of each of the Ships for the purposes of that code;
|
|
(b) |
the safety management certificate in respect of each of the Ships issued in accordance with the ISM Code;
|
|
(c) |
the international ship security certificate in respect of each of the Ships issued under the ISPS Code; and
|
|
(d) |
if so requested by the Agent, any other certificates issued under any applicable code required to be observed by each of the Ships or in relation to its operation under any applicable law.
|
8 |
Value of security
|
9 |
Existing Indebtedness
|
|
(a) |
Evidence in all respects satisfactory to the Agent that the Existing Secured Indebtedness has been or, will be immediately following the Utilisation and with the proceeds of the same, repaid in full together with interest
thereon and any other amounts in relation to it owing by the Borrowers or any other Obligors, and all Obligors have been released from all their obligations thereunder; and
|
|
(b) |
evidence that all Security Interests created in respect of the Existing Secured Indebtedness by the relevant Owner or any other Obligor, whether over or in relation to the Ships or any other Charged Property or otherwise
relevant to such Existing Secured Indebtedness, have been discharged.
|
10 |
Cash Collateral Account
|
|
(a) |
an amount equal to $50,000,000, being the Minimum Liquidity Amount, is standing to the credit of the Cash Collateral Account in accordance with paragraph (b) of clause 28.3 (Cash Collateral
Account);
|
|
(b) |
an additional amount of Forty five million four hundred thousand dollars ($45,400,000) (comprising part of the Blocked Amount) has been deposited in the Cash Collateral Account in accordance with paragraph (c) of clause 28.3
(Cash Collateral Account); and
|
|
(c) |
an additional amount of Two hundred and four million six hundred thousand dollars ($204,600,000) (comprising the remaining part of the Blocked Amount) has been or will on the Utilisation Date be deposited in the Cash
Collateral Account (whether from the proceeds of the Loan in accordance with paragraph (c) of clause 28.3 (Cash Collateral Account) or otherwise).
|
11 |
Survey report
|
12 |
Fees and expenses
|
13 |
Management Agreement
|
14 |
Process agent
|
From: |
Fareastern Shipping Limited
Pegasus Shipholding S.A. Lance Shipping S.A. Seacrown Maritime Ltd. Navajo Marine Limited and Solana Holding Ltd |
To: |
Citibank Europe Plc, UK Branch as Agent
|
Dated: |
[●]
|
1 |
We refer to the Facility Agreement. This is a Utilisation Request. Terms defined in the Facility Agreement have the same meaning in this Utilisation Request unless given a different meaning in this Utilisation Request.
|
2 |
We wish to borrow the Loan on the following terms:
|
3 |
We confirm that each condition specified in clause 4.4 (Further conditions precedent) of the Facility Agreement is satisfied on the date of this Utilisation Request.
|
4 |
The purpose of the Loan is [specify purpose complying with clause 3 of the Facility Agreement] and its proceeds should be credited to [●].
|
5 |
We confirm that we will use the proceeds of the Loan for our benefit and under our full responsibility and exclusively for the purposes specified in the Facility Agreement.
|
6 |
We request that the first Interest Period for the Loan be 3 Months.
|
7 |
This Utilisation Request is irrevocable.
|
From: |
Fareastern Shipping Limited
Pegasus Shipholding S.A. Lance Shipping S.A. Seacrown Maritime Ltd. Navajo Marine Limited and Solana Holding Ltd
as Borrowers
|
To: |
Citibank Europe Plc, UK Branch as Agent
|
Dated:
|
[●]
|
1 |
We refer to the Facility Agreement. This is a Selection Notice. Terms defined in the Facility Agreement have the same meaning in this Selection Notice unless given a different meaning in this Selection Notice.
|
2 |
We request that the next Interest Period for the Loan be [●] Months.
|
3 |
This Selection Notice is irrevocable.
|
To: |
Citibank Europe Plc, UK Branch as Agent
|
From: |
[The Existing Lender] (the Existing Lender) and [The New Lender] (the New
Lender)
|
1 |
We refer to the Facility Agreement. This agreement (the Agreement) shall take effect as a Transfer Certificate for the purposes of the Facility Agreement. Terms defined in the
Facility Agreement have the same meaning in this Agreement unless given a different meaning in this Agreement.
|
2 |
We refer to clause 31.6 (Procedure for assignment) of the Facility Agreement:
|
|
(a) |
The Existing Lender assigns absolutely to the New Lender all the rights of the Existing Lender under the Facility Agreement and the other Finance Documents which correspond to that portion of the Existing Lender’s Commitment
and participation in the Loan under the Facility Agreement as specified in the Schedule.
|
|
(b) |
The Existing Lender is released from the obligations owed by it which correspond to that portion of the Existing Lender’s Commitment and participation in the Loan under the Facility Agreement specified in the Schedule (but
the obligations owed by the Obligors under the Finance Documents shall not be released).
|
|
(c) |
On the Transfer Date the New Lender becomes a Party as a Lender and is bound by obligations equivalent to those from which the Existing Lender is released under paragraph (b) above.
|
|
(d) |
The proposed Transfer Date is [●].
|
|
(e) |
The Facility Office and address, fax number and attention details for notices of the New Lender for the purposes of clause 40.2 (Addresses) of the Facility Agreement are set out in the
Schedule.
|
3 |
The New Lender expressly acknowledges the limitations on the Existing Lender's obligations set out in clause 34.5 (Limitation of responsibility of Existing Lenders) of the Facility Agreement.]
|
4 |
The New Lender confirms that it [is]/ [is not] a Parent Affiliate.
|
5 |
This Agreement acts as notice to the Agent (on behalf of each Finance Party) and, upon delivery in accordance with clause 31.7 (Copy of Transfer Certificate to Borrowers), to the
Borrowers (on behalf of each Obligor) of the assignment referred to in this Agreement.
|
6 |
This Agreement may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Agreement.
|
7 |
This Agreement and any non-contractual obligations connected with it are governed by English law.
|
8 |
This Agreement has been entered into on the date stated at the beginning of this Agreement.
|
To: |
Citibank Europe Plc, UK Branch as Agent
|
From: |
Dynagas LNG Partners LP as Parent
|
1 |
I/We refer to the Facility Agreement. This is a Compliance Certificate. Terms defined in the Facility Agreement have the same meaning when used in this Compliance Certificate unless given a different meaning in this
Compliance Certificate.
|
2 |
I/We confirm that as at the end of the Measurement Period ended on [30 June] [31 December] [●]:
|
|
(a) |
Cash and Cash Equivalents: the Group’s Cash and Cash Equivalents are $[●], calculated as shown in Appendix A and compared against a minimum required
amount of $[●] [to include also a calculation of Total Liabilities].
|
|
(b) |
Consolidated leverage ratio: the ratio of Total Liabilities to the Market Value Adjusted Total Assets was [●]:1, calculated as shown in Appendix B
and compared against a maximum required ratio of 0.7:1.0.
|
3 |
We confirm that the Security Value is $[●] calculated as shown in Appendix C, compared against a Minimum Value of $[●].
|
4 |
The Permitted Holders own (legally and/or beneficially, [indirectly through the Sponsor]) [●]% of the aggregate partnership interest or units in the Parent versus a required minimum
holding of 30% of the aggregate partnership interest or units in the Parent.
|
5 |
[I/We confirm that no Default is continuing.] [If this statement cannot be made, the certificate should identify any Default that is continuing and the steps, if any, being taken to remedy it.]
|
To: |
Citibank Europe Plc, UK Branch as Agent
|
From: |
[The Lender]
|
1 |
We refer to clause 44.9 (Disenfranchisement of Parent Affiliates) of the Facility Agreement. Terms defined in the Facility Agreement have the
same meaning in this notice unless given a different meaning in this notice.
|
2 |
We have entered into a Notifiable Debt Purchase Transaction.
|
3 |
The Notifiable Debt Purchase Transaction referred to in paragraph 2 above relates to the amount of our Commitment(s) as set out below.
|
Commitment
|
Amount of our Commitment to which Notifiable Debt Purchase Transaction relates
|
[●]
|
[insert amount (of Commitment) to which the relevant Debt Purchase Transaction applies]
|
To: |
Citibank Europe Plc, UK Branch as Agent
|
From: |
[The Lender]
|
1 |
We refer to clause 44.9 (Disenfranchisement of Parent Affiliates) of the Facility Agreement. Terms defined in the Facility Agreement have the
same meaning in this notice unless given a different meaning in this notice.
|
2 |
A Notifiable Debt Purchase Transaction which we entered into and which we notified you of in a notice dated [●] has [terminated]/[ceased to be with a Parent Affiliate].
|
3 |
The Notifiable Debt Purchase Transaction referred to in paragraph 2 above relates to the amount of our Commitment(s) as set out below.
|
Commitment
|
Amount of our Commitment to which Notifiable Debt Purchase Transaction relates (Base Currency)
|
[●]
|
[insert amount (of Commitment) to which the relevant Debt Purchase Transaction applies]
|
THE BORROWERS
|
||
FAREASTERN SHIPPING LIMITED
|
)
|
/s/ Konstantinos Lampsias
|
By: Konstantinos Lampsias
|
)
|
|
PEGASUS SHIPHOLDING S.A.
|
)
|
/s/ Konstantinos Lampsias
|
By: Konstantinos Lampsias
|
)
|
|
LANCE SHIPPING S.A.
|
)
|
/s/ Konstantinos Lampsias
|
By: Konstantinos Lampsias
|
)
|
|
SEACROWN MARITIME LTD.
|
)
|
/s/ Konstantinos Lampsias
|
By: Konstantinos Lampsias
|
)
|
|
NAVAJO MARINE LIMITED
|
)
|
/s/ Konstantinos Lampsias
|
By: Konstantinos Lampsias
|
)
|
|
SOLANA HOLDING LTD.
|
)
|
/s/ Konstantinos Lampsias
|
By: Konstantinos Lampsias
|
)
|
|
THE PARENT
|
||
EXECUTED as a DEED
|
)
|
|
by Konstantinos Lampsias
|
)
|
|
for and on behalf of
|
)
|
/s/ Konstantinos Lampsias
|
DYNAGAS LNG PARTNERS LP
|
)
|
Attorney-in-fact
|
as Parent
|
)
|
|
in the presence of:
|
)
|
|
|
||
/s/ Ureshnie Papanastassiou
|
||
Witness
|
||
Name: Ureshnie Papanastassiou
|
||
Address: Norton Rose Fulbright Greece
Piraeus
|
||
Occupation:
|
||
THE GUARANTORS
|
||
EXECUTED as a DEED
|
)
|
|
by Konstantinos Lampsias
|
)
|
|
for and on behalf of
|
)
|
/s/ Konstantinos Lampsias
|
DYNAGAS LNG PARTNERS LP
|
)
|
Attorney-in-fact
|
as Guarantor
|
)
|
|
in the presence of:
|
)
|
|
/s/ Ureshnie Papanastassiou
|
||
Witness
|
||
Name: Ureshnie Papanastassiou
|
||
Address: Norton Rose Fulbright Greece
Piraeus
|
||
Occupation:
|
EXECUTED as a DEED
|
)
|
|
By Konstantinos Lampsias
|
)
|
|
for and on behalf of
|
)
|
|
ARCTIC LNG CARRIERS LTD.
|
)
|
/s/ Konstantinos Lampsias
|
as Guarantor
|
)
|
Attorney-in-fact
|
in the presence of:
|
)
|
|
/s/ Ureshnie Papanastassiou
|
||
Witness
|
||
Name: Ureshnie Papanastassiou
|
||
Address: Norton Rose Fulbright Greece
Piraeus
|
||
Occupation:
|
||
EXECUTED as a DEED
|
)
|
|
By Konstantinos Lampsias
|
)
|
|
for and on behalf of
|
)
|
|
DYNAGAS EQUITY HOLDING LIMITED
|
)
|
/s/ Konstantinos Lampsias
|
as Guarantor
|
)
|
Attorney-in-fact
|
in the presence of:
|
)
|
|
/s/ Ureshnie Papanastassiou
|
||
Witness
|
||
Name: Ureshnie Papanastassiou
|
||
Address: Norton Rose Fulbright Greece
Piraeus
|
||
Occupation:
|
||
EXECUTED as a DEED
|
)
|
|
By Konstantinos Lampsias
|
)
|
|
for and on behalf of
|
)
|
|
DYNAGAS OPERATING LP
|
)
|
/s/ Konstantinos Lampsias
|
as Guarantor
|
)
|
Attorney-in-fact
|
in the presence of:
|
)
|
|
/s/ Ureshnie Papanastassiou
|
||
Witness
|
||
Name: Ureshnie Papanastassiou
|
||
Address: Norton Rose Fulbright Greece
Piraeus
|
||
Occupation:
|
||
EXECUTED as a DEED
|
)
|
|
By Konstantinos Lampsias
|
)
|
|
for and on behalf of
|
)
|
|
DYNAGAS OPERATING GP LLC
|
)
|
/s/ Konstantinos Lampsias
|
as Guarantor
|
)
|
Attorney-in-fact
|
in the presence of:
|
)
|
|
/s/ Ureshnie Papanastassiou
|
||
Witness
|
||
Name: Ureshnie Papanastassiou
|
||
Address: Norton Rose Fulbright Greece
Piraeus
|
||
Occupation:
|
EXECUTED as a DEED
|
)
|
|
By Konstantinos Lampsias
|
)
|
|
for and on behalf of
|
)
|
|
DYNAGAS FINANCE INC.
|
)
|
/s/ Konstantinos Lampsias
|
as Guarantor
|
)
|
Attorney-in-fact
|
in the presence of:
|
)
|
|
/s/ Ureshnie Papanastassiou
|
||
Witness
|
||
Name: Ureshnie Papanastassiou
|
||
Address: Norton Rose Fulbright Greece
Piraeus
|
||
Occupation:
|
||
EXECUTED as a DEED
|
)
|
|
By Konstantinos Lampsias
|
)
|
|
for and on behalf of
|
)
|
|
DYNAGAS FINANCE LLC
|
)
|
/s/ Konstantinos Lampsias
|
as Guarantor
|
)
|
Attorney-in-fact
|
in the presence of:
|
)
|
|
/s/ Ureshnie Papanastassiou
|
||
Witness
|
||
Name: Ureshnie Papanastassiou
|
||
Address: Norton Rose Fulbright Greece
Piraeus
|
||
Occupation:
|
||
THE ARRANGER
|
||
CITIBANK, N.A., LONDON BRANCH
|
)
|
/s/ Joseph Clark
|
as Arranger
|
)
|
Director
|
By: Joseph Clark
|
)
|
|
CREDIT SUISSE AG
|
)
|
|
as Arranger
|
)
|
|
By: Argyro T
Epeni Ermidou
|
)
)
|
/s/ Argyro T
/s/ Epeni Ermidou
|
KfW IPEX-BANK GmbH
|
)
|
|
as Arranger
|
)
|
|
By: Sven Peters
Delphine Deroche
|
)
)
)
)
)
|
/s/ Sven Peters
Vice President
/s/ Delphine Deroche
Director
|
DEUTSCHE BANK AG FILIALE DEUTSCHLANDGESCHÄFT
|
)
|
/s/ Tilman Stein
|
as Arranger
|
)
|
Director/Senior Counsel
|
By: Tilman Stein
|
)
|
|
ALPHA BANK A.E.
|
)
|
|
as Arranger
|
)
|
|
By: A S Damianidou
|
)
|
/s/ A S Damianidou
|
and
|
)
|
|
By: C. G. Papathanasopoulou
|
)
|
/s/ C. G. Papathanasopoulou
|
AMSTERDAM TRADE BANK N.V.
|
)
|
/s/ Iraklis Tsirigotis
|
as Arranger
|
)
|
H.P.M.G. Steeghs
|
By: Iraklis Tsirigotis
|
)
|
Director |
E. SUN COMMERCIAL BANK, LTD.
|
)
|
|
(INCORPORATED IN TAIWAN, WITH LIMITED LIABILITY),
|
)
|
|
HONG KONG BRANCH
|
)
|
/s/ TSUN-JEN KE, JEFF
|
as Arranger
|
)
|
GENERAL MANAGER
|
By: TSUN-JEN KE, JEFF
|
)
|
|
THE ORIGINAL LENDERS
|
||
CITIBANK, N.A., LONDON BRANCH
|
)
|
/s/ Joseph Clark
|
By: Joseph Clark
|
)
|
Director
|
CREDIT SUISSE AG
|
)
|
|
By: Argyro T
Epeni Ermidou
|
)
)
|
/s/ Argyro T
/s/ Epeni Ermidou
|
KfW IPEX-BANK GmbH
|
)
|
|
By: Sven Peters
Delphine Deroche
|
)
)
)
)
)
)
|
/s/ Sven Peters
Vice President
/s/ Delphine Deroche
Director
|
ALPHA BANK A.E.
|
)
|
|
By: A S Damianidou
|
)
|
/s/ A S Damianidou
|
and
|
)
|
|
By: C. G. Papathanasopoulou
|
)
|
/s/ C. G. Papathanasopoulou
|
DEUTSCHE BANK AG FILIALE DEUTSCHLANDGESCHÄFT
|
)
|
/s/ Tilman Stein
|
By: Tilman Stein
|
)
|
|
Director/Senior Counsel
|
||
AMSTERDAM TRADE BANK N.V
|
)
|
/s/ Iraklis Tsirigotis
|
By: Iraklis Tsirigotis
|
)
|
H.P.M.G. Steeghs
Director
|
E. SUN COMMERCIAL BANK, LTD.
|
)
|
|
(INCORPORATED IN TAIWAN, WITH LIMITED LIABILITY),
|
)
|
|
HONG KONG BRANCH
|
)
|
/s/ TSUN-JEN KE, JEFF
|
By: TSUN-JEN KE, JEFF
|
)
|
GENERAL MANAGER
|
THE AGENT
|
||
CITIBANK EUROPE PLC, UK BRANCH
|
)
|
/s/ Robert Skews
|
By: Robert Skews
|
)
|
|
THE SECURITY AGENT
|
||
CITIBANK, N.A., LONDON BRANCH
|
)
|
/s/ Viola Japaul
|
By: Viola Japaul
|
)
|
|
Director |
Name
|
Jurisdiction of Formation
|
Description
|
Percentage ownership
(direct or indirect)
|
Dynagas Operating LP
|
Marshall Islands
|
Holding Company
|
100%
|
|
|
|
|
Dynagas Operating GP LLC
|
Marshall Islands
|
General Partner of Dynagas Operating LP
|
100%
|
|
|
|
|
Dynagas Equity Holding Ltd.
|
Marshall Islands
|
Holding Company
|
100%
|
|
|
|
|
Dynagas Finance Inc.
|
Marshall Islands
|
Finance Company
|
100%
|
|
|
|
|
Dynagas Finance LLC
|
Delaware
|
Finance Company
|
100%
|
|
|
|
|
Pegasus Shipholding S.A.
|
Marshall Islands
|
Vessel Company
|
100%
|
|
|
|
|
Seacrown Maritime Ltd.
|
Marshall Islands
|
Vessel Company
|
100%
|
|
|
|
|
Lance Shipping S.A.
|
Marshall Islands
|
Vessel Company
|
100%
|
|
|
|
|
Fareastern Shipping Limited
|
Malta
|
Vessel Company
|
100%
|
|
|
|
|
Navajo Marine Limited
|
Marshall Islands
|
Vessel Company
|
100%
|
|
|
|
|
Solana Holding Limited
|
Marshall Islands
|
Vessel Company
|
100%
|
|
|
|
|
Arctic LNG Carriers Ltd.
|
Marshall Islands
|
Holding Company
|
100%
|
/s/ Tony Lauritzen
|
||||
Tony Lauritzen
|
||||
Chief Executive Officer and Director
|
/s/ Michael Gregos
|
|||
Michael Gregos
|
|||
Chief Financial Officer
|
(1) |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.
|
/s/ Tony Lauritzen
|
||
Tony Lauritzen
|
||
Chief Executive Officer
|
(1) |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.
|
/s/ Michael Gregos
|
|||
Michael Gregos
|
|||
Chief Financial Officer
|
/s/ Ernst & Young (Hellas) Certified Auditors Accountants S.A.
|
||
Athens, Greece
|
||
April 16, 2020
|
||
|
||
|
/s/ Nigel Gardiner
|
||
Nigel Gardiner
|
||
Managing Director
|
||
Drewry Shipping Consultants Ltd
|