☐
|
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☒
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2019
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from _________________ to _________________
|
Forward-Looking Statements
|
1
|
|
Part I
|
||
Item 1.
|
Identity of Directors, Senior Management and Advisers
|
2
|
Item 2.
|
Offer Statistics and Expected Timetable
|
2
|
Item 3.
|
Key Information
|
2
|
Item 4.
|
Information on the Company
|
37
|
Item 4A.
|
Unresolved Staff Comments
|
53
|
Item 5.
|
Operating and Financial Review and Prospects
|
54
|
Item 6.
|
Directors, Senior Management and Employees
|
65
|
Item 7.
|
Major Shareholders and Related Party Transactions
|
70
|
Item 8.
|
Financial Information
|
74
|
Item 9.
|
The Offer and Listing
|
75
|
Item 10.
|
Additional Information
|
76
|
Item 11.
|
Quantitative and Qualitative Disclosures About Market Risk
|
88
|
Item 12.
|
Description of Securities Other than Equity Securities
|
89
|
Item 13.
|
Defaults, Dividend Arrearages and Delinquencies
|
89
|
Item 14.
|
Material Modifications to the Rights of Security Holders and Use of Proceeds
|
89
|
Item 15.
|
Controls and Procedures
|
89
|
Item 16A.
|
Audit Committee Financial Expert
|
90
|
Item 16B.
|
Code of Ethics
|
90
|
Item 16C.
|
Principal Accountant Fees and Services
|
91
|
Item 16D.
|
Exemptions from the Listing Standards for Audit Committees
|
91
|
Item 16E.
|
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
|
91
|
Item 16F.
|
Change in Registrant's Certifying Accountant
|
91
|
Item 16G.
|
Corporate Governance
|
91
|
Item 16H.
|
Mine Safety Disclosure
|
91
|
Item 17.
|
Financial Statements
|
91
|
Item 18.
|
Financial Statements
|
92
|
Item 19.
|
Exhibits
|
92
|
|
• |
our future operating or financial results;
|
|
• |
future, pending or recent acquisitions, joint ventures, business strategy, areas of possible expansion, and expected capital spending or operating expenses;
|
|
• |
container shipping industry trends, including charter rates and factors affecting vessel supply and demand;
|
|
• |
our financial condition and liquidity, including our ability to obtain additional financing in the future to fund capital expenditures, acquisitions and other general corporate activities;
|
|
• |
availability of crew, number of off-hire days, drydocking requirements and insurance costs;
|
|
• |
our expectations about the availability of vessels to purchase or the useful lives of our vessels;
|
|
• |
our expectations relating to dividend payments and our ability to make such payments;
|
|
• |
our ability to leverage to our advantage our manager's relationships and reputations in the container shipping industry;
|
|
• |
changes in seaborne and other transportation patterns;
|
|
• |
changes in governmental rules and regulations or actions taken by regulatory authorities;
|
|
• |
potential liability from future litigation;
|
|
• |
global and regional political conditions;
|
|
• |
acts of terrorism and other hostilities, including piracy;
|
|
• |
business disruptions due to natural disasters or other disasters outside our control, such as the recent novel Coronavirus COVID-19 ("Coronavirus") outbreak; and
|
|
• |
other factors discussed in the section titled "Risk Factors."
|
Item 1. |
Identity of Directors, Senior Management and Advisers
|
Item 2. |
Offer Statistics and Expected Timetable
|
Item 3. |
Key Information
|
A. |
Selected Financial Data
|
Euroseas Ltd. – Summary of Selected Historical Financials
(in U.S. Dollars except for Fleet Data and number of shares)
|
||||||||||||||||||||
Year Ended December 31,
|
||||||||||||||||||||
2015
|
2016
|
2017
|
2018
|
2019
|
||||||||||||||||
Statement of Operations Data
|
||||||||||||||||||||
Time charter revenue
|
35,509,971
|
21,409,236
|
24,278,048
|
36,062,202
|
41,769,278
|
|||||||||||||||
Voyage charter revenue
|
-
|
47,979
|
559,319
|
206,682
|
-
|
|||||||||||||||
Related party management fee income
|
240,000
|
240,000
|
240,000
|
-
|
-
|
|||||||||||||||
Commissions
|
(1,965,466
|
)
|
(1,151,879
|
)
|
(1,318,248
|
)
|
(1,844,147
|
)
|
(1,745,599
|
)
|
||||||||||
Net revenue, continuing operations
|
33,784,505
|
20,545,336
|
23,759,119
|
34,424,737
|
40,023,679
|
|||||||||||||||
Voyage expenses
|
(1,852,482
|
)
|
(1,209,085
|
)
|
(1,564,489
|
)
|
(1,261,088
|
)
|
(1,055,408
|
)
|
||||||||||
Vessel operating expenses
|
(21,833,674
|
)
|
(13,853,444
|
)
|
(15,019,342
|
)
|
(19,986,170
|
)
|
(23,983,282
|
)
|
||||||||||
Other operating income
|
-
|
-
|
499,103
|
-
|
-
|
|||||||||||||||
Dry-docking expenses
|
(1,332,378
|
)
|
(2,204,784
|
)
|
(571,291
|
)
|
(2,774,924
|
)
|
(2,714,662
|
)
|
||||||||||
Vessel depreciation
|
(8,108,231
|
)
|
(4,959,487
|
)
|
(3,585,965
|
)
|
(3,305,951
|
)
|
(4,178,886
|
)
|
||||||||||
Related party management fees
|
(3,589,167
|
)
|
(2,399,461
|
)
|
(2,632,637
|
)
|
(3,536,094
|
)
|
(3,671,335
|
)
|
||||||||||
General and administrative expenses
|
(2,886,884
|
)
|
(2,673,594
|
)
|
(2,502,203
|
)
|
(2,565,502
|
)
|
(2,444,495
|
)
|
||||||||||
Net gain on sale of vessels
|
461,586
|
10,597
|
803,811
|
1,340,952
|
-
|
|||||||||||||||
Loss on write-down of vessels held for sale
|
(1,641,885
|
)
|
(5,924,668
|
)
|
(4,595,819
|
)
|
-
|
-
|
||||||||||||
Operating (loss) / income, continuing operations
|
(6,978,610
|
)
|
(12,668,590
|
)
|
(5,409,713
|
)
|
2,335,960
|
1,975,611
|
||||||||||||
Interest and other financing costs
|
(1,398,553
|
)
|
(1,370,830
|
)
|
(1,554,695
|
)
|
(3,050,768
|
)
|
(3,424,969
|
)
|
||||||||||
(Loss)/gain on derivatives, net
|
(261,674
|
)
|
(119,154
|
)
|
12,389
|
(44,343
|
)
|
(2,885
|
)
|
|||||||||||
Other investment income
|
1,212,938
|
1,024,714
|
-
|
-
|
-
|
|||||||||||||||
Impairment of other investment
|
-
|
(4,421,452
|
)
|
-
|
-
|
-
|
||||||||||||||
Loss on debt extinguishment
|
-
|
-
|
-
|
-
|
(328,291
|
)
|
||||||||||||||
Foreign exchange gain / (loss)
|
16,711
|
(31,033
|
)
|
(30,214
|
)
|
13,963
|
2,024
|
|||||||||||||
Interest income
|
26,445
|
22,277
|
37,972
|
81,792
|
95,839
|
|||||||||||||||
Equity loss in joint venture
|
(2,158,393
|
)
|
(2,444,627
|
)
|
-
|
-
|
-
|
|||||||||||||
Impairment in joint venture
|
-
|
(14,071,075
|
)
|
-
|
-
|
-
|
||||||||||||||
Net loss, continuing operations
|
(9,541,136
|
)
|
(34,079,770
|
)
|
(6,944,261
|
)
|
(663,396
|
)
|
(1,682,671
|
)
|
||||||||||
Dividends to Series B preferred shares
|
(1,639,149
|
)
|
(1,725,699
|
)
|
(1,808,811
|
)
|
(1,335,733
|
)
|
(1,271,782
|
)
|
||||||||||
Preferred deemed dividend
|
-
|
-
|
-
|
-
|
(504,577
|
)
|
||||||||||||||
Net loss attributable to common shareholders, continuing operations
|
(11,180,285
|
)
|
(35,805,469
|
)
|
(8,753,072
|
)
|
(1,999,129
|
)
|
(3,459,030
|
)
|
||||||||||
Loss per share attributable to common shareholders- basic and diluted, continuing operations (1)
|
(13.95
|
)
|
(35.08
|
)
|
(6.33
|
)
|
(1.41
|
)
|
(1.21
|
)
|
||||||||||
Preferred stock dividends declared
|
1,639,149
|
1,725,699
|
1,808,811
|
1,335,733
|
1,271,782
|
|||||||||||||||
Preferred dividends declared per preferred share outstanding at end of period
|
48.53
|
48.60
|
48.48
|
68.13
|
158.97
|
|||||||||||||||
Weighted average number of shares outstanding during period, basic and diluted (1)
|
801,349
|
1,020,713
|
1,383,440
|
1,414,775
|
2,861,928
|
Euroseas Ltd. – Summary of Selected Historical Financials (continued)
As of December 31,
|
||||||||||||||||||||
Balance Sheet Data
|
2015
|
2016
|
2017
|
2018
|
2019
|
|||||||||||||||
Current assets, continuing operations
|
20,872,484
|
8,285,054
|
12,168,251
|
11,994,168
|
6,297,092
|
|||||||||||||||
Current assets of discontinued operations
|
711,815
|
2,159,029
|
3,914,117
|
-
|
-
|
|||||||||||||||
Vessels, net
|
52,521,193
|
41,145,269
|
52,132,079
|
48,826,128
|
116,230,333
|
|||||||||||||||
Deferred assets and other long term assets, continuing operations
|
51,185,084
|
33,459,098
|
28,919,785
|
6,134,267
|
4,334,267
|
|||||||||||||||
Long-term assets of discontinued operations
|
47,116,387
|
58,645,054
|
65,195,329
|
-
|
-
|
|||||||||||||||
Total assets
|
172,406,963
|
143,693,504
|
162,329,561
|
66,954,563
|
126,861,692
|
|||||||||||||||
Total current liabilities, continuing operations
|
20,391,502
|
9,710,927
|
12,649,309
|
11,592,535
|
24,851,259
|
|||||||||||||||
Current liabilities of discontinued operations
|
(1,026,121
|
)
|
1,463,708
|
5,883,288
|
-
|
-
|
||||||||||||||
Long term bank loans, including current portion
|
22,201,040
|
20,402,911
|
34,014,502
|
36,586,790
|
84,483,105
|
|||||||||||||||
Related party loan, current
|
-
|
2,000,000
|
-
|
-
|
5,000,000
|
|||||||||||||||
Vessel profit participation liability
|
-
|
-
|
1,297,100
|
1,067,500
|
-
|
|||||||||||||||
Long-term liabilities of discontinued operations
|
16,440,000
|
28,243,478
|
30,364,035
|
-
|
-
|
|||||||||||||||
Total liabilities
|
45,279,121
|
55,781,792
|
80,021,604
|
44,376,584
|
98,753,414
|
|||||||||||||||
Preferred shares
|
32,079,249
|
33,804,948
|
35,613,759
|
18,757,361
|
7,654,577
|
|||||||||||||||
Number of common shares outstanding (1)
|
1,024,470
|
1,359,514
|
1,409,266
|
1,564,456
|
5,600,259
|
|||||||||||||||
Common stock
|
30,734
|
40,785
|
42,279
|
46,934
|
168,008
|
|||||||||||||||
Total shareholders' equity
|
95,048,593
|
54,106,764
|
46,694,198
|
3,820,618
|
20,453,701
|
|||||||||||||||
Cash Flow Data
|
Year Ended December 31,
|
|||||||||||||||||||
2015
|
2016
|
2017
|
2018
|
2019
|
||||||||||||||||
Net cash (used in) / provided by operating activities of continuing operations
|
(905,910
|
)
|
(5,088,067
|
)
|
5,053,025
|
(1,474,830
|
)
|
3,240,429
|
||||||||||||
Net cash provided by/(used in) investing activities of continuing operations
|
8,904,008
|
1,109,456
|
(16,511,220
|
)
|
6,253,868
|
(55,720,226
|
)
|
|||||||||||||
Net cash (used in)/ provided by financing activities of continuing operations
|
(20,058,980
|
)
|
(6,341,223
|
)
|
12,750,658
|
135,403
|
45,198,270
|
Fleet Data (1)
|
2015
|
2016
|
2017
|
2018
|
2019
|
|||||||||||||||
Number of vessels
|
12.74
|
8.67
|
9.28
|
11.49
|
13.1
|
|||||||||||||||
Calendar days
|
4,650
|
3,175
|
3,386
|
4,191
|
4,782
|
|||||||||||||||
Available days
|
4,587
|
3,028
|
3,285
|
4,115
|
4,680
|
|||||||||||||||
Voyage days
|
4,285
|
2,844
|
3,184
|
3,814
|
4,636
|
|||||||||||||||
Utilization Rate (percent)
|
93.0
|
%
|
93.9
|
%
|
96.9
|
%
|
92.7
|
%
|
99.1
|
%
|
||||||||||
(In U.S. Dollars per day per vessel)
|
||||||||||||||||||||
Average TCE rate (2)
|
7,855
|
7,120
|
7,309
|
9,179
|
8,782
|
|||||||||||||||
Vessel Operating Expenses
|
4,695
|
4,363
|
4,436
|
4,769
|
5,015
|
|||||||||||||||
Management Fees
|
772
|
756
|
777
|
844
|
768
|
|||||||||||||||
G&A Expenses
|
621
|
842
|
739
|
612
|
511
|
|||||||||||||||
Total Operating Expenses excluding drydocking expenses
|
6,088
|
5,961
|
5,952
|
6,225
|
6,294
|
|||||||||||||||
Drydocking expenses
|
287
|
694
|
169
|
662
|
568
|
2015
|
2016
|
2017
|
2018
|
2019
|
||||||||||||||||
(In U.S. dollars, except for voyage days and TCE rates which are expressed in U.S. dollars per day)
|
||||||||||||||||||||
Time charter revenue
|
35,509,971
|
21,409,236
|
24,278,048
|
36,062,202
|
41,769,278
|
|||||||||||||||
Voyage charter revenue
|
-
|
47,979
|
559,319
|
206,682
|
-
|
|||||||||||||||
Voyage expenses
|
(1,852,482
|
)
|
(1,209,085
|
)
|
(1,564,489
|
)
|
(1,261,088
|
)
|
(1,055,408
|
)
|
||||||||||
Time Charter Equivalent or TCE Revenues
|
33,657,489
|
20,248,130
|
23,272,878
|
35,007,796
|
40,713,870
|
|||||||||||||||
Voyage days
|
4,285
|
2,844
|
3,184
|
3,814
|
4,636
|
|||||||||||||||
Average TCE rate
|
7,855
|
7,120
|
7,309
|
9,179
|
8,782
|
B. |
Capitalization and Indebtedness
|
C. |
Reasons for the Offer and Use of Proceeds
|
D. |
Risk Factors
|
•
|
supply of, and demand for, containerized cargo;
|
|
•
|
changes in the production of semi-finished and finished consumer and industrial products, and the resulting changes in the international pattern of trade;
|
|
•
|
global and regional economic and political conditions, armed conflicts and terrorist activities;
|
|
•
|
pandemics, such as the outbreak of Coronavirus in China in 2020;
|
|
•
|
embargoes and strikes;
|
|
•
|
the location of regional and global manufacturing facilities;
|
|
•
|
availability of credit to finance international trade;
|
|
•
|
the location of consuming regions for semi-finished and finished consumer and industrial products;
|
|
•
|
the distance containerized commodities are to be moved by sea;
|
|
•
|
environmental and other regulatory developments;
|
|
•
|
currency exchange rates;
|
|
•
|
changes in global production and manufacturing distribution patterns of finished goods that utilize containerized commodities;
|
|
•
|
changes in seaborne and other transportation patterns; and
|
|
•
|
weather and other natural phenomena.
|
•
|
the number of newbuilding orders and deliveries including slippage in deliveries;
|
|
•
|
the scrapping rate of older vessels;
|
|
•
|
the price of steel and other materials;
|
|
•
|
port and canal congestion;
|
|
•
|
changes in environmental and other regulations that may limit the useful life of vessels;
|
|
•
|
vessel casualties;
|
|
•
|
the number of vessels that are out of service; and
|
•
|
changes in global commodity production.
|
•
|
general economic and market conditions affecting the shipping industry in general;
|
|
•
|
supply of container vessels, including newbuildings;
|
|
•
|
demand for container vessels;
|
|
•
|
types and sizes of vessels;
|
|
•
|
scrap values;
|
|
•
|
other modes of transportation;
|
•
|
cost of newbuildings;
|
|
•
|
technological advances;
|
|
•
|
new regulatory requirements from governments or self-regulated organizations;
|
|
•
|
competition from other shipping companies; and
|
|
•
|
prevailing level of charter rates.
|
|
• |
work stoppages or other hostilities, political or economic disturbances that disrupt the operations of the shipyard;
|
|
• |
quality or engineering problems;
|
|
• |
bankruptcy or other financial crisis of the shipyard;
|
|
• |
a backlog of orders at the shipyard;
|
|
• |
disputes between us and the shipyard regarding contractual obligations;
|
|
• |
weather interference or catastrophic events, such as major earthquakes or fires;
|
|
• |
our requests for changes to the original vessel specifications or disputes with the shipyard; or
|
|
• |
shortages of or delays in the receipt of necessary construction materials, such as steel, or equipment, such as main engines, electricity generators and propellers.
|
•
|
incur additional indebtedness;
|
|
•
|
create liens on our assets;
|
|
•
|
sell capital stock of our subsidiaries;
|
|
•
|
make investments;
|
|
•
|
engage in mergers or acquisitions;
|
|
•
|
pay dividends;
|
|
•
|
make capital expenditures;
|
|
•
|
change the management of our vessels or terminate or materially amend the management agreement relating to each vessel; and
|
|
•
|
sell our vessels.
|
•
|
marine disaster;
|
|
•
|
piracy;
|
|
•
|
environmental accidents;
|
|
•
|
grounding, fire, explosions and collisions;
|
|
•
|
cargo and property losses or damage;
|
|
•
|
business interruptions caused by mechanical failure, human error, war, terrorism, political action in various countries, labor strikes, adverse weather conditions, natural disasters or other disasters outside our control, such as the
recent Coronavirus outbreak; and
|
|
•
|
work stoppages or other labor problems with crew members serving on our vessels including crew strikes and/or boycotts.
|
•
|
actual or anticipated fluctuations in our quarterly and annual results and those of other public companies in our industry;
|
|
•
|
changes in market valuations or sales or earnings estimates or publication of research reports by analysts;
|
|
•
|
changes in earnings estimates or shortfalls in our operating results from levels forecasted by securities analysts;
|
|
•
|
speculation in the press or investment community about our business or the shipping industry;
|
|
•
|
changes in market valuations of similar companies and stock market price and volume fluctuations generally;
|
|
•
|
payment of dividends;
|
|
•
|
strategic actions by us or our competitors such as mergers, acquisitions, joint ventures, strategic alliances or restructurings;
|
|
•
|
changes in government and other regulatory developments;
|
|
•
|
additions or departures of key personnel;
|
|
•
|
general market conditions and the state of the securities markets; and
|
|
•
|
domestic and international economic, market and currency factors unrelated to our performance.
|
Item 4. |
Information on the Company
|
A. |
History and Development of the Company
|
B. |
Business Overview
|
(*) |
TC denotes time charter. All dates listed are the earliest redelivery dates under each TC unless the contract rate is lower than the current market rate in which cases the latest redelivery date is assumed; vessels with the latest
redelivery date shown are marked by (+).
|
(**) |
The CONTEX (Container Ship Time Charter Assessment Index) has been published by the Hamburg and Bremen Shipbrokers' Association (VHBS) since October 2007. The CONTEX is a company-independent index of time charter rates for container
ships. It is based on assessments of the current day charter rates of six selected container ship types, which are representative of their size categories: Type 1,100 TEU and Type 1,700 TEU with a charter period of one year, and the Types
2,500, 2,700, 3,500 and 4,250 TEU all with a charter period of two years.
|
(***) |
On February 24, 2020, we entered into an agreement to sell the M/V Manolis P for scrap. The vessel reached her destination port on April 7, 2020, but so far has not been delivered to the buyers due to Coronavirus restrictions and port
lockdowns in the territory of arrival (Alang, India). The scrap price has dropped since the date of the agreement to sell the M/V Manolis P, and the buyers are now seeking to terminate the agreement on the basis that timely delivery did
not occur. We are in the process of seeking a settlement with the buyers.
|
•
|
reports by industry analysts and data providers that focus on our industry and related dynamics affecting vessel values;
|
|
•
|
news and industry reports of similar vessel sales;
|
|
•
|
news and industry reports of sales of vessels that are not similar to our vessels where we have made certain adjustments in an attempt to derive information that can be used as part of our estimates;
|
|
•
|
approximate market values for our vessels or similar vessels that we have received from shipbrokers, whether solicited or unsolicited, or that shipbrokers have generally disseminated;
|
|
•
|
offers that we may have received from potential purchasers of our vessels; and
|
|
•
|
vessel sale prices and values of which we are aware through both formal and informal communications with shipowners, shipbrokers, industry analysts and various other shipping industry participants and observers.
|
Name
|
Capacity
|
Purchase Date
|
Carrying Value as of December 31, 2018 (in millions)
|
Carrying Value as of December 31, 2019 (in millions)
|
Container Carriers
|
(teu)
|
|||
EVRIDIKI
|
2,556
|
May-2008
|
$8.88(1)
|
$8.06(2)
|
MANOLIS P
|
1,452
|
Apr-2007
|
$2.11
|
$1.79
|
NINOS
|
1,169
|
Feb-2001
|
$1.51
|
$1.51
|
JOANNA
|
1,732
|
Jul-2013
|
$3.81
|
$3.40
|
KUO HSIUNG
|
1,169
|
May-2002
|
$1.57
|
$1.57
|
AEGEAN EXPRESS
|
1,439
|
Sep-2016
|
$2.51
|
$2.25
|
AKINADA BRIDGE
|
5,610
|
Dec-2017
|
$10.54
|
$10.33
|
EM ASTORIA
|
2,788
|
Jun-2017
|
$4.55
|
$4.42
|
EM ATHENS
|
2,506
|
Sep-2017
|
$4.03
|
$3.87
|
EM CORFU
|
2,556
|
Nov-2017
|
$5.28
|
$4.95
|
EM OINOUSSES
|
2,506
|
Oct-2017
|
$4.04
|
$3.86
|
EM KEA
|
3,100
|
Aug-2019
|
-
|
$9.31
|
EM SPETSES
|
1,740
|
Aug-2019
|
-
|
$7.40
|
EM HYDRA
|
1,740
|
Aug-2019
|
-
|
$6.57
|
DIAMANTIS P
|
2,008
|
Aug-2019
|
-
|
$4.95(2)
|
SYNERGY BUSAN
|
4,253
|
Nov-2019
|
-
|
$10.12
|
SYNERGY ANTWERP
|
4,253
|
Nov-2019
|
-
|
$10.06
|
SYNERGY OAKLAND
|
4,253
|
Nov-2019
|
-
|
$10.45
|
SYNERGY KEELUNG
|
4,253
|
Nov-2019
|
-
|
$11.36
|
Total Container Carriers
|
51,083
|
$48.83
|
$116.23
|
|
• |
Experienced Management Team. Our management team has significant experience in all aspects of commercial, technical, operational and financial areas of our business. Aristides J. Pittas, our
Chairman and Chief Executive Officer, holds a dual graduate degree in Naval Architecture and Marine Engineering and Ocean Systems Management from the Massachusetts Institute of Technology. He has worked in various technical, shipyard and
ship management capacities and since 1991 has focused on the ownership and operation of vessels carrying dry cargoes. Dr. Anastasios Aslidis, our Chief Financial Officer, holds a Ph.D. in Ocean Systems Management also from Massachusetts
Institute of Technology and has over 20 years of experience, primarily as a partner at a Boston based international consulting firm focusing on investment and risk management in the maritime industry.
|
|
• |
Cost Efficient Vessel Operations. We believe that because of the efficiencies afforded to us through Eurobulk, the strength of our management team and the quality of our fleet, we are, and will
continue to be, a reliable, low cost vessel operator, without compromising our high standards of performance, reliability and safety. Despite the average age of our fleet being approximately 17.7 years on April 15, 2020, our total vessel
operating expenses, including management fees and general and administrative expenses but excluding drydocking expenses were $6,294 per day for the year ended December 31, 2019. We consider this amount to be among the lowest of the
publicly listed containerships shipping companies in the United States. Our technical and operating expertise allows us to efficiently manage and transport a wide range of cargoes with a flexible trade route profile, which helps reduce
ballast time between voyages and minimize off-hire days. Our professional, well-trained masters, officers and onboard crews further help us to control costs and ensure consistent vessel operating performance. We actively manage our fleet
and strive to maximize utilization and minimize maintenance expenditures for operational and commercial utilization. For the year ended December 31, 2019, our operational fleet utilization was 99.9%, up from 96.0% in 2018, while our
commercial utilization rate was 99.2%, up from 96.7% in 2018. Our total fleet utilization rate in 2019 was 99.1%.
|
|
• |
Strong Relationships with Customers and Financial Institutions. We believe ourselves, Eurobulk and the Pittas family to have developed strong industry relationships and to have gained acceptance
with charterers, lenders and insurers because of long-standing reputation for safe and reliable service and financial responsibility through various shipping cycles. Through Eurobulk, we offer reliable service and cargo carrying
flexibility that enables us to attract customers and obtain repeat business. We also believe that the established customer base and reputation of ourselves, Eurobulk and the Pittas family help us to secure favorable employment for our
vessels with well-known charterers.
|
|
• |
Renew and Expand our Fleet. We expect to grow our fleet in a disciplined manner through timely and selective acquisitions of quality vessels. We perform in-depth technical review and financial
analysis of each potential acquisition and only purchase vessels as market opportunities present themselves. We focus on purchasing well-maintained secondhand vessels, newbuildings or newbuilding resales based on the evaluation of each
investment option at the time it is made. In January 2017, we sold one containership. In June, September, October and December 2017, we took delivery of five secondhand containerships, and in December 2017, we sold one containership. On
May 30, 2018, we spun-off our drybulk fleet (excluding M/V Monica P, which was agreed to be sold) into EuroDry. As a result of the spin-off and subsequent sale of Monica P in June 2018, we became a pure containership company. In August
and November 2019, we acquired eight secondhand containerships, expanding our fleet to nineteen containership vessels.
|
|
• |
Maintain Balanced Employment. We intend to employ our fleet on either longer term time charters, i.e. charters with duration of more than a year, or shorter term time/spot charters. We seek
longer term time charter employment to obtain adequate cash flow to cover as much as possible of our fleet's recurring costs, consisting of vessel operating expenses, management fees, general and administrative expenses, interest expense
and drydocking costs for the upcoming 12-month period. When we expect charter rates to improve we try to increase the percentage of our fleet employed in shorter term contracts (allowing us to take advantage of higher rates in the
future), while when we expect the market to weaken we try to increase the percentage of our fleet employed in longer term contracts (allowing us to take advantage of higher current rates). We believe this balanced employment strategy will
provide us with more predictable operating cash flows and sufficient downside protection, while allowing us to participate in the potential upside of the spot market during periods of rising charter rates. As of April 15, 2020, on the
basis of our existing time charters, approximately 47% of our vessel capacity for the remainder of 2020 and approximately 5% in 2020 are under time charter contracts, which will ensure employment of a portion of our fleet, partly protect
us from market fluctuations and increase our ability to make principal and interest payments on our debt and pay dividends to our shareholders.
|
|
• |
Optimize Use of Financial Leverage. We intend to use bank debt to partly fund our vessel acquisitions and increase financial returns for our shareholders. We actively assess the level of debt we
incur in light of our ability to repay that debt based on the level of cash flow generated from our balanced chartering strategy and efficient operating cost structure. Our bank debt repayment schedule as of December 31, 2019 calls for a
reduction of approximately 14.7% of our debt by the end of 2020 and an additional reduction of about 41.2% by the end of 2021 for a total of 55.9% reduction over the next two years, excluding any new debt that we
|
|
(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.
|
Vessel
|
Next
|
Type
|
EVRIDIKI G.
|
June 2021
|
Special Survey (Drydocking)
|
EM CORFU
|
October 2021
|
Special Survey (Drydocking)
|
AKINADA BRIDGE
|
November 2021
|
Intermediate Survey
|
KUO HSIUNG
|
November 2021
|
Special Survey (Drydocking)
|
AEGEAN EXPRESS
|
October 2020
|
Intermediate Survey
|
EM ASTORIA
|
October 2021
|
Intermediate Survey
|
JOANNA P
|
January 2022
|
Intermediate Survey
|
EM ATHENS
|
December 2020
|
Special Survey (Drydocking)
|
EM SPETSES
|
July 2020
|
Special Survey
|
EM KEA
|
July 2020
|
Special Survey
|
EM HYDRA
|
June 2020
|
Special Survey
|
DIAMANTIS P
|
September 2021
|
Intermediate Survey (Drydocking)
|
SYNERGY BUSAN
|
January 2022
|
Intermediate Survey
|
SYNERGY ANTWERP
|
November 2021
|
Intermediate Survey
|
SYNERGY OAKLAND
|
February 2022
|
Intermediate Survey
|
SYNERGY KEELUNG
|
May 2022
|
Intermediate Survey
|
NINOS
|
July 2020
|
Intermediate Survey
|
C. |
Organizational structure
|
D. |
Property, plants and equipment
|
Item 5. |
Operating and Financial Review and Prospects
|
|
• |
the effective fleet utilization rate;
|
|
• |
estimated scrap values;
|
|
• |
future drydocking costs; and
|
|
• |
probabilities of sale for each vessel.
|
Vessel
|
Charter Rate as of 12/31/2019
|
Remaining
Months Chartered
|
Remaining Life (years)
|
Rate Year 1 (2020)
|
Rate Year 2 (2021)
|
Rate Year 3+ (2022+)
|
Breakeven Rate (USD/day)
|
Evridiki
|
10,250
|
8.0
|
6.5
|
10,902
|
10,902
|
12,917
|
11,113
|
Diamantis P
|
8,000
|
6.0
|
3.5
|
8,966
|
8,966
|
9,884
|
8,775
|
B. |
Liquidity and Capital Resources
|
C. |
Research and development, patents and licenses, etc.
|
D. |
Trend information
|
E. |
Off-balance Sheet Arrangements
|
F. |
Tabular Disclosure of Contractual Obligations
|
In U.S. dollars
|
Total
|
Less Than
|
One to
Three Years |
Three to
|
More Than Five Years
|
One Year
|
Five Years
|
||||
Long-term bank loans
|
$85,207,220
|
$12,541,840
|
$38,665,380
|
$34,000,000
|
-
|
Related party loan
|
$5,000,000
|
$5,000,000
|
-
|
-
|
-
|
Interest Payments (1)
|
$10,093,000
|
$4,425,000
|
$4,877,000
|
$791,000
|
-
|
Vessel Management fees (2)
|
$15,516,488
|
$5,131,034
|
$10,385,454
|
||
Other Management fees (3)
|
$6,120,800
|
$2,000,000
|
$4,120,800
|
||
Total
|
$121,937,508
|
$29,097,874
|
$58,048,634
|
$34,791,000
|
Item 6. |
Directors, Senior Management and Employees
|
A. |
Directors and Senior Management
|
Name
|
Age
|
Position
|
Aristides J. Pittas
|
60
|
Chairman, President and CEO; Class A Director
|
Dr. Anastasios Aslidis
|
60
|
CFO and Treasurer; Class A Director
|
Aristides P. Pittas
|
68
|
Vice Chairman; Class A Director
|
Stephania Karmiri
|
52
|
Secretary
|
Panagiotis Kyriakopoulos
|
59
|
Class B Director
|
Christian Donohue
|
52
|
Director
|
Andreas Papathomas
|
68
|
Director
|
George Taniskidis
|
59
|
Class C Director
|
Apostolos Tamvakakis
|
62
|
Class C Director
|
B. |
Compensation
|
|
• |
We are not required under Marshall Islands law to maintain a Board of Directors with a majority of independent directors, and we may not be able to maintain a Board of Directors with a majority of independent directors in the future.
|
|
• |
In lieu of a compensation committee comprised of independent directors, our Board of Directors will be responsible for establishing the executive officers' compensation and benefits. Under Marshall Islands law, compensation of the
executive officers is not required to be determined by an independent committee.
|
|
• |
In lieu of a nomination committee comprised of independent directors, our Board of Directors will be responsible for identifying and recommending potential candidates to become board members and recommending directors for appointment
to board committees. Shareholders may also identify and recommend potential candidates to become board members in writing. No formal written charter has been prepared or adopted because this process is outlined in our bylaws.
|
|
• |
In lieu of obtaining an independent review of related party transactions for conflicts of interests, consistent with Marshall Islands law requirements, a related party transaction will be permitted if: (i) the material facts as to his
or her relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors and the Board of Directors in good faith authorizes the contract or transaction by the affirmative votes of a
majority of the disinterested directors, or, if the votes of the disinterested directors are insufficient to constitute an act of the Board of Directors as defined in Section 55 of the Marshall Islands Business Corporations Act, by
unanimous vote of the disinterested directors; or (ii) the material facts as to his relationship or interest are disclosed and the shareholders are entitled to vote thereon, and the contract or transaction is specifically approved in good
faith by a simple majority vote of the shareholders; or (iii) the contract or transaction is fair as to the Company as of the time it is authorized, approved or ratified, by the Board of Directors, a committee thereof or the shareholders.
Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction.
|
|
• |
As a foreign private issuer, we are not required to solicit proxies or provide proxy statements to Nasdaq pursuant to Nasdaq corporate governance rules or Marshall Islands law. Consistent with Marshall Islands law, we will notify our
shareholders of meetings between 15 and 60 days before the meeting. This notification will contain, among other things, information regarding business to be transacted at the meeting. In addition, our bylaws provide that shareholders must
give us advance notice to properly introduce any business at a meeting of the shareholders. Our bylaws also provide that shareholders may designate in writing a proxy to act on their behalf.
|
|
• |
In lieu of holding regular meetings at which only independent directors are present, our entire Board of Directors, a majority of whom are independent, will hold regular meetings as is consistent with the laws of the Republic of the
Marshall Islands.
|
|
• |
The Board of Directors adopted a new Equity Incentive Plan in February 2018. Shareholder approval was not necessary since Marshall Islands law permits the Board of Directors to take such actions.
|
|
• |
As a foreign private issuer, we are not required to obtain shareholder approval if any of our directors, officers, or 5% or greater shareholders has a 5% or greater interest (or such persons collectively have a 10% or greater
interest), directly or indirectly, in the company, or assets to be acquired, or in the consideration to be paid in the transaction(s) and the present or potential issuance of common stock, or securities convertible into or exercisable for
common stock, could result in an increase in outstanding common stock or voting power of 5% or more.
|
|
• |
In lieu of obtaining shareholder approval prior to the issuance of designated securities, the Company will comply with provisions of the Marshall Islands Business Corporations Act, providing that the Board of Directors approves share
issuances.
|
Item 7. |
Major Shareholders and Related Party Transactions
|
A. |
Major Stockholders
|
Name of Beneficial Owner (1)
|
Number of Shares of Voting Common Stock Beneficially Owned
|
Percent of Voting of common Stock (17)
|
Number of Shares of Voting Series B Preferred Stock Beneficially Owned (18)
|
Percent of Voting of Series B Preferred Shares (18)
|
Number of Shares of Voting Common Stock Beneficially Owned Upon Conversion; 50% Voting Before Conversion
|
Percent of Total Voting Securities
|
||||||||||||||||||
Containers Trinity Shareholders Ltd. (2)
|
2,171,479
|
38.8
|
%
|
-
|
-
|
-
|
35.5
|
%
|
||||||||||||||||
Eurobulk Marine Holdings Inc. (3)
|
531,614
|
9.5
|
%
|
-
|
-
|
-
|
8.7
|
%
|
||||||||||||||||
Synergy Holdings Limited (4)
|
528,169
|
9.4
|
%
|
-
|
-
|
-
|
8.6
|
%
|
||||||||||||||||
Friends Investment Company Inc. (5)
|
503,303
|
9.0
|
%
|
-
|
-
|
-
|
8.2
|
%
|
||||||||||||||||
Diamantis Shareholders Ltd (6)
|
243,451
|
4.3
|
%
|
-
|
-
|
-
|
4.0
|
%
|
||||||||||||||||
Family United Navigation Co
|
87,842
|
1.6
|
%
|
-
|
-
|
1.4
|
%
|
|||||||||||||||||
Tennenbaum Opportunities Fund V, LP (7, 8)
|
76,050
|
1.4
|
%
|
-
|
-
|
-
|
1.2
|
%
|
||||||||||||||||
Tennenbaum Opportunities Partners V, LLC (7, 8)
|
36,450
|
0.7
|
%
|
4,345
|
54.3
|
%
|
278,526
|
5.2
|
%
|
|||||||||||||||
Preferred Friends Investment Company Inc (8)
|
-
|
-
|
3,655
|
45.7
|
%
|
234,295
|
3.8
|
%
|
||||||||||||||||
Aristides J Pittas(9)
|
12,504
|
*
|
-
|
-
|
-
|
*
|
||||||||||||||||||
Anastasios Aslidis (10)
|
10,775
|
*
|
-
|
-
|
-
|
*
|
||||||||||||||||||
Panagiotis Kyriakopoulos (11)
|
4,220
|
*
|
-
|
-
|
-
|
*
|
Aristides P Pittas (12)
|
2,598
|
*
|
-
|
-
|
-
|
*
|
||||||||||||||||||
Apostolos Tamvakakis (13)
|
1,742
|
*
|
-
|
-
|
-
|
*
|
||||||||||||||||||
George Taniskidis (14)
|
562
|
*
|
-
|
-
|
-
|
*
|
||||||||||||||||||
Christian Donohue
|
-
|
*
|
-
|
-
|
-
|
*
|
||||||||||||||||||
Andreas Papathomas
|
-
|
*
|
-
|
-
|
-
|
*
|
||||||||||||||||||
Stephania Karmiri (15)
|
-
|
*
|
-
|
-
|
-
|
*
|
||||||||||||||||||
Symeon Pariaros (16)
|
562
|
*
|
-
|
-
|
-
|
*
|
||||||||||||||||||
All directors and officers and 5% owners as a group
|
4,236,197
|
75.6
|
%
|
8,000
|
100.0
|
%
|
512,821
|
77.7
|
%
|
(1) |
Beneficial ownership is determined in accordance with the Rule 13d-3(a) of the Securities Exchange Act of 1934, as amended, and generally includes voting or investment power with respect to securities. Except as subject to community
property laws, where applicable, the person named above has sole voting and investment power with respect to all shares of common stock shown as beneficially owned by him/her.
|
(2) |
Represents 2,171,479 shares of common stock held of record by Containers Trinity Shareholders Ltd. ("CTS"). A majority of the shareholders of CTS are members of the Pittas family. Investment power and voting control by CTS resides in
its Board of Directors which consists of three directors, affiliated with the Pittas family. Actions by CTS may be taken by a majority of the members on its Board of Directors.
|
(3) |
Represents 528,169 shares of common stock held of record by Eurobulk Marine Holdings Inc. ("EMH"). A majority of the shareholders of EMH are members of the Pittas family. Investment power and voting control by EMH resides in its Board
of Directors which consists of three directors, a majority of whom are members of the Pittas family. Actions by EMH may be taken by a majority of the members on its Board of Directors.
|
(4) |
Represents 528,169 shares of common stock held of record by Synergy Holdings Ltd. ("SHL"). SHL is indirectly controlled by a trust (under which Andreas Papathomas is a beneficiary) which may be deemed to have beneficial ownership of
shares beneficially owned by SHL. Mr. Papathomas is a director of the Company.
|
(5) |
Represents 531,614 shares of common stock held of record by Friends. A majority of the shareholders of Friends are members of the Pittas family. Investment power and voting control by Friends resides in its Board of Directors which
consists of five directors, a majority of whom are members of the Pittas family. Actions by Friends may be taken by a majority of the members on its Board of Directors.
|
(6) |
Represents 243,451 shares of common stock held of record by Diamantis Shareholders Ltd. ("DSL"). A majority of the shareholders of DSL are members of the Pittas family. Investment power and voting control by DSL resides in its Board of
Directors which consists of three directors, affiliated with the Pittas family. Actions by DSL may be taken by a majority of the members on its Board of Directors.
|
(7) |
Tennenbaum Capital Partners, LLC serves as investment advisor to, inter alia, Tennenbaum Opportunities Partners V, LP and Tennenbaum Opportunities Fund VI, LLC, which are the registered holders of the Common Shares and Series B
Preferred Shares of Euroseas Ltd. beneficially owned by Tennenbaum Capital Partners, LLC. Tennenbaum Capital Partners, LLC is indirectly controlled by BlackRock, Inc., which may be deemed to have beneficial ownership of shares
beneficially owned by Tennenbaum Capital Partners, LLC. The address of Tennenbaum Opportunities Partners V, LP, Tennenbaum Opportunities Fund V, LLC and Tennenbaum Capital Partners, LLC is 2951 28th Street, Suite 1000, Santa Monica, CA
90405. The address of BlackRock, Inc. is 55 East 52nd Street, New York, NY 10055. Tennenbaum Opportunities Partners V, LP and Tennenbaum Opportunities Fund VI, LLC currently hold (a) 112,500 shares of common stock and (b) Series B
Preferred Shares that are convertible into 278,526 shares of common stock.
|
(8) |
Common shares are issuable upon conversion of Series B Preferred Shares (or any convertible notes into which the Series B Preferred Shares may convert) owned by this shareholder (based on the current conversion ratio).
|
(9) |
Does not include 1,004,507 shares of common stock held of record by CTS, EMH, Friends and DSL by virtue of ownership interest in above entities by Mr. Pittas. Mr. Pittas disclaims beneficial ownership except to the
|
(10) |
Does not include 20,344 shares of common stock held of record by CTS and DSL by virtue of ownership interest in above entities by Mr. Aslidis. Mr. Aslidis disclaims beneficial ownership except to the extent of his pecuniary interest.
Includes 1,188 shares vesting on July 1, 2020, 1,182 shares of common stock vesting on November 16, 2020 and 1,188 shares vesting on July 1, 2021.
|
(11) |
Includes 188 shares vesting on July 1, 2020, 186 shares of common stock vesting on November 16, 2020 and 188 shares vesting on July 1, 2021.
|
(12) |
Does not include 279,640 shares of common stock held of record by CTS, EMH, Friends, DSL and Family United Navigation Co., by virtue of ownership interest in above entities by Mr. Pittas and members of his family. Mr. Pittas disclaims
beneficial ownership except to the extent of his pecuniary interest. Does not include 24 shares of Series B Preferred stock held of record by Preferred Friends Investment Company Inc., by virtue of ownership interest in Preferred Friends
Investment Company Inc. by Mr. Pittas and members of his family. Includes 482 shares vesting on July 1, 2020, 475 shares of common stock vesting on November 16, 2020 and 482 shares vesting on July 1, 2021.
|
(13) |
Includes 188 shares vesting on July 1, 2020, 186 shares of common stock vesting on November 16, 2020 and 188 shares vesting on July 1, 2021.
|
(14) |
Does not include 45,264 shares held of record by Friends, by virtue of Mr. Taniskidis' ownership in CTS, Friends and DSL. Mr. Taniskidis disclaims beneficial ownership except to the extent of his pecuniary interest. Does not include 96
Series B Preferred Shares held of record by Preferred Friends Investment Company Inc., by virtue of ownership interest in Preferred Friends Investment Company Inc. by Mr. Taniskidis. Includes 188 shares vesting on July 1, 2020, 186 shares
of common stock vesting on November 16, 2020 and 188 shares vesting on July 1, 2021.
|
(15) |
Does not include 67 shares of common stock held of record by Friends, by virtue of Mrs. Karmiri's ownership in Friends. Mrs. Karmiri disclaims beneficial ownership except to the extent of her pecuniary interest.
|
(16) |
Includes 188 shares vesting on July 1, 2020, 186 shares of common stock vesting on November 16, 2020 and 188 shares vesting on July 1, 2021.
|
(17) |
Voting stock includes 23,299 unvested shares for a total of 5,600,259 issued and outstanding shares of the Company as of April 15, 2020.
|
(18) |
As of April 15, 2020, Series B Preferred Shares vote on an as-converted basis weighted by 50%.
|
B. |
Related Party Transactions
|
C. |
Interests of Experts and Counsel
|
Item 8. |
Financial Information
|
A. |
Consolidated Statements and Other Financial Information
|
B. |
Significant Changes
|
Item 9. |
The Offer and Listing
|
A. |
Offer and Listing Details
|
B. |
Plan of Distribution
|
C. |
Markets
|
D. |
Selling Shareholders
|
E. |
Dilution
|
F. |
Expenses of the Issue
|
Item 10. |
Additional Information
|
A. |
Share Capital
|
B. |
Memorandum and Articles of Association
|
C. |
Material Contracts
|
D. |
Exchange Controls
|
E. |
Taxation
|
|
• |
we are organized in a foreign country, or our country of organization, that grants an "equivalent exemption" to corporations organized in the United States; and
|
|
• |
more than 50% of the value of our stock is owned, directly or indirectly, by "qualified shareholders," individuals who are "residents" of our country of organization or of another foreign country that grants an "equivalent exemption"
to corporations organized in the United States, which we refer to as the "50% Ownership Test," or
|
|
• |
our stock is "primarily and regularly traded on an established securities market" in our country of organization, in another country that grants an "equivalent exemption" to United States corporations, or in the United States, which we
refer to as the "Publicly-Traded Test."
|
|
• |
We have, or are considered to have, a fixed place of business in the United States involved in the earning of shipping income; and
|
|
• |
substantially all of our U.S.-source shipping income is attributable to regularly scheduled transportation, such as the operation of a vessel that follows a published schedule with repeated sailings at regular intervals between the
same points for voyages that begin or end in the United States.
|
|
• |
at least 75% of our gross income for such taxable year consists of passive income (e.g., dividends, interest, capital gains and rents derived other than in the active conduct of a rental business); or
|
|
• |
at least 50% of the average value of our assets during such taxable year produce, or are held for the production of, passive income, which we refer to as "passive assets".
|
|
• |
such gain is effectively connected with the Non-U.S. Holder's conduct of a trade or business in the United States, if the Non-U.S. Holder is entitled to the benefits of a United States income tax treaty with respect to that gain, that
gain is taxable only if it is attributable to a permanent establishment maintained by the Non-U.S. Holder in the United States; or
|
|
• |
the Non-U.S. Holder is an individual who is present in the United States for 183 days or more during the taxable year of disposition and other conditions are met.
|
|
• |
fails to provide an accurate taxpayer identification number;
|
|
• |
is notified by the IRS that he failed to report all interest or dividends required to be shown on your United States federal income tax returns; or
|
|
• |
in certain circumstances, fails to comply with applicable certification requirements.
|
F. |
Dividends and paying agents
|
G. |
Statement by experts
|
H. |
Documents on display
|
I. |
Subsidiary Information
|
Item 11. |
Quantitative and Qualitative Disclosures about Market Risk
|
Year Ended December 31,
|
Amount in $ (floating rate loans)
|
|||
2020
|
787,113
|
|||
2021
|
648,945
|
|||
2022
|
385,194
|
|||
2023
|
200,938
|
|||
2024 and thereafter
|
-
|
Item 12. |
Description of Securities Other than Equity Securities
|
Item 13. |
Defaults, Dividend Arrearages and Delinquencies
|
Item 14. |
Material Modifications to the Rights of Security Holders and Use of Proceeds
|
Item 15. |
Controls and Procedures
|
2018
(dollars in thousands) |
2019
(dollars in thousands) |
|||||||
Audit Fees
|
$
|
288
|
$
|
197
|
||||
Audit-Related Fees
|
_
|
_
|
||||||
Tax Fees
|
_
|
_
|
||||||
All Other Fes
|
_
|
_
|
||||||
Total
|
$
|
288
|
$
|
197
|
Item 18. |
Financial Statements
|
Item 19. |
Exhibits
|
1.1
|
||
1.2
|
||
1.3
|
||
2.1
|
||
2.2
|
||
2.3
|
||
2.4
|
||
2.5
|
||
2.7
|
||
2.8
|
||
4.1
|
||
4.2
|
||
4.3
|
||
4.4
|
||
4.5
|
||
4.6
|
||
4.7
|
||
4.8
|
||
4.9
|
||
4.10
|
||
4.11
|
||
4.12
|
||
4.13
|
||
4.14
|
||
4.15
|
||
4.16
|
||
4.17
|
||
4.18
|
||
4.19
|
4.20
|
||
4.21
|
||
4.22
|
||
4.23
|
||
4.24
|
||
4.25
|
||
4.26
|
||
4.27
|
||
4.28
|
||
4.29
|
||
4.30
|
||
4.31
|
||
8.1
|
||
12.1
|
||
12.2
|
||
13.1
|
||
13.2
|
||
15.1
|
||
101.INS*
|
XBRL Instance Document
|
|
101.SCH*
|
XBRL Taxonomy Extension Schema Document
|
|
101.CAL*
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
101.DEF*
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
101.LAB*
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
101.PRE*
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
* |
Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not
filed for the purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.
|
(1)
|
Filed as an Exhibit to the Company's Registration Statement (File No. 333-129145) on October 20, 2005.
|
(2)
|
Filed as an Exhibit to the Company's Amendment No.1 to Registration Statement (File No. 333-129145) on December 5, 2005.
|
(3)
|
Filed as an Exhibit to the Company's Amendment No. 4 to Registration Statement (File No. 333-138780) on January 29, 2007.
|
(4)
|
Filed as an Exhibit to the Company's Annual Report on Form 20-F (File No. 001-33283) on May 13, 2008.
|
(5)
|
Filed as an Exhibit to the Company's Registration Statement (File No. 333-152089) on July 2, 2008.
|
(6)
|
Filed as an Exhibit to the Company's Annual Report on Form 20-F (File No. 001-33283) on May 18, 2009.
|
(7)
|
Filed as an Exhibit to the Company's Annual Report on Form 20-F (File No. 001-33283) on May 28, 2010.
|
(8)
|
Filed as an Exhibit to the Company's Annual Report on Form 20-F (File No. 001-33283) on May 27, 2011.
|
(9)
|
Filed as an Exhibit to the Company's Form 6-K (File No. 001-33283) on May 25, 2012.
|
(10)
|
Filed as an Exhibit to the Company's Annual Report on Form 20-F (File No. 001-33283) on April 25, 2019.
|
(11)
|
Filed as an Exhibit to the Company's Form 6-K (File No. 001-33283) on May 28, 2019.
|
(12)
|
Filed as an Exhibit to the Company's Form 6-K (File No. 001-33283) on March 5, 2020.
|
EUROSEAS LTD.
(Registrant) |
|||
By:
|
/s/ Aristides J. Pittas
|
||
Aristides J. Pittas
|
|||
Chairman, President and CEO
|
|||
Pages
|
|
Report of Independent Registered Public Accounting Firm
|
F-2
|
Consolidated Balance Sheets as of December 31, 2018 and 2019
|
F-3
|
Consolidated Statements of Operations for the Years Ended December 31, 2017, 2018 and 2019
|
F-5
|
Consolidated Statements of Shareholders’ Equity for the Years Ended December 31, 2017, 2018 and 2019
|
F-6
|
Consolidated Statements of Cash Flows for the Years Ended December 31, 2017, 2018 and 2019
|
F-7
|
Notes to the Consolidated Financial Statements
|
F-10
|
Notes
|
2018
|
2019
|
||||||||||
Assets
|
||||||||||||
Current assets
|
||||||||||||
Cash and cash equivalents
|
6,960,258
|
985,418
|
||||||||||
Restricted cash
|
8
|
117,063
|
610,376
|
|||||||||
Trade accounts receivable, net
|
958,705
|
715,097
|
||||||||||
Other receivables
|
2,031,415
|
1,570,506
|
||||||||||
Inventories
|
3
|
1,704,391
|
1,889,164
|
|||||||||
Prepaid expenses
|
222,336
|
526,531
|
||||||||||
Total current assets
|
11,994,168
|
6,297,092
|
||||||||||
Long-term assets
|
||||||||||||
Vessels, net
|
4
|
48,826,128
|
116,230,333
|
|||||||||
Restricted cash
|
8
|
6,134,267
|
4,334,267
|
|||||||||
Total assets
|
66,954,563
|
126,861,692
|
||||||||||
Liabilities, mezzanine equity and shareholders’ equity
|
||||||||||||
Current liabilities
|
||||||||||||
Long-term bank loans, current portion
|
8
|
4,870,241
|
12,295,320
|
|||||||||
Related party loan, current
|
7, 8
|
-
|
5,000,000
|
|||||||||
Trade accounts payable
|
2,288,525
|
3,899,967
|
||||||||||
Accrued expenses
|
5
|
1,301,805
|
1,725,321
|
|||||||||
Accrued preferred dividends
|
-
|
161,315
|
||||||||||
Deferred revenues
|
417,634
|
973,774
|
||||||||||
Due to related company
|
7
|
2,672,895
|
795,562
|
|||||||||
Derivatives
|
14, 16
|
41,435
|
-
|
|||||||||
Total current liabilities
|
11,592,535
|
24,851,259
|
Notes
|
December 31, 2018
|
December 31, 2019
|
||||||||||
Long-term liabilities
|
||||||||||||
Long-term bank loans, net of current portion
|
8
|
31,716,549
|
72,187,785
|
|||||||||
Vessel profit participation liability
|
8
|
1,067,500
|
-
|
|||||||||
Fair value of below market time charters acquired
|
6
|
-
|
1,714,370
|
|||||||||
Total long-term liabilities
|
32,784,049
|
73,902,155
|
||||||||||
Total liabilities
|
44,376,584
|
98,753,414
|
||||||||||
Commitments and contingencies
|
10
|
|||||||||||
Mezzanine Equity
|
||||||||||||
Preferred shares (par value $0.01, 20,000,000 shares authorized, 19,605 and 8,000 issued and outstanding, respectively)
|
15
|
18,757,361
|
7,654,577
|
|||||||||
Shareholders’ equity
|
||||||||||||
Common stock (par value $0.03, 200,000,000 shares authorized, 1,564,456 and 5,600,259 issued and outstanding)
|
18
|
46,934
|
168,008
|
|||||||||
Additional paid-in capital
|
233,996,669
|
253,967,708
|
||||||||||
Accumulated deficit
|
(230,222,985
|
)
|
(233,682,015
|
)
|
||||||||
Total shareholders’ equity
|
3,820,618
|
20,453,701
|
||||||||||
Total liabilities, mezzanine equity and shareholders’ equity
|
66,954,563
|
126,861,692
|
Notes
|
2017
|
2018
|
2019
|
|||||||||||||
Revenues
|
||||||||||||||||
Time charter revenue
|
24,278,048
|
36,062,202
|
41,769,278
|
|||||||||||||
Voyage charter revenue
|
559,319
|
206,682
|
-
|
|||||||||||||
Related party management fee income
|
240,000
|
-
|
-
|
|||||||||||||
Commissions (including $310,467, $453,361 and $493,341, respectively, to related party)
|
7
|
(1,318,248
|
)
|
(1,844,147
|
)
|
(1,745,599
|
)
|
|||||||||
Net revenue, continuing operations
|
23,759,119
|
34,424,737
|
40,023,679
|
|||||||||||||
Operating expenses
|
||||||||||||||||
Voyage expenses
|
13
|
1,564,489
|
1,261,088
|
1,055,408
|
||||||||||||
Vessel operating expenses (including $190,723, $256,069 and $249,081, respectively, to related party)
|
7, 13
|
15,019,342
|
19,986,170
|
23,983,282
|
||||||||||||
Other operating income
|
(499,103
|
)
|
-
|
-
|
||||||||||||
Dry-docking expenses
|
571,291
|
2,774,924
|
2,714,662
|
|||||||||||||
Vessel depreciation
|
4
|
3,585,965
|
3,305,951
|
4,178,886
|
||||||||||||
Related party management fees
|
7
|
2,632,637
|
3,536,094
|
3,671,335
|
||||||||||||
General and administrative expenses (including $1,306,476, $1,561,126 and $1,344,250, respectively, to related party)
|
7, 11
|
2,502,203
|
2,565,502
|
2,444,495
|
||||||||||||
Net gain on sale of vessels (including $70,640, $64,500 and $0, respectively, to related party)
|
4, 7
|
(803,811
|
)
|
(1,340,952
|
)
|
-
|
||||||||||
Loss on write-down of vessels held for sale
|
4, 7
|
4,595,819
|
-
|
-
|
||||||||||||
Total operating expenses, continuing operations
|
29,168,832
|
32,088,777
|
38,048,068
|
|||||||||||||
Operating (loss) / income, continuing operations
|
(5,409,713
|
)
|
2,335,960
|
1,975,611
|
||||||||||||
Other income/(expenses)
|
||||||||||||||||
Interest and other financing costs (including $0, $0 and $84,444, respectively, to related party)
|
7,8
|
(1,554,695
|
)
|
(3,050,768
|
)
|
(3,424,969
|
)
|
|||||||||
Loss on debt extinguishment
|
8
|
-
|
-
|
(328,291
|
)
|
|||||||||||
Gain / (loss) on derivatives, net
|
14
|
12,389
|
(44,343
|
)
|
(2,885
|
)
|
||||||||||
Foreign exchange (loss) / gain
|
(30,214
|
)
|
13,963
|
2,024
|
||||||||||||
Interest income
|
37,972
|
81,792
|
95,839
|
|||||||||||||
Other expenses, net, continuing operations
|
(1,534,548
|
)
|
(2,999,356
|
)
|
(3,658,282
|
)
|
||||||||||
Net loss, continuing operations
|
(6,944,261
|
)
|
(663,396
|
)
|
(1,682,671
|
)
|
||||||||||
Dividends to Series B preferred shares
|
15
|
(1,808,811
|
)
|
(1,335,733
|
)
|
(1,271,782
|
)
|
|||||||||
Preferred deemed dividend
|
-
|
-
|
(504,577
|
)
|
||||||||||||
Net loss attributable to common shareholders, continuing operations
|
(8,753,072
|
)
|
(1,999,129
|
)
|
(3,459,030
|
)
|
||||||||||
Net income attributable to common shareholders, discontinued operations
|
17
|
849,701
|
554,506
|
-
|
||||||||||||
Net loss attributable to common shareholders
|
(7,903,371
|
)
|
(1,444,623
|
)
|
(3,459,030
|
)
|
||||||||||
Weighted average number of shares outstanding during the year, basic and diluted
|
12
|
1,383,440
|
1,414,775
|
2,861,928
|
||||||||||||
Loss per share attributable to common shareholders - basic and diluted, continuing operations
|
12
|
(6.33
|
)
|
(1.41
|
)
|
(1.21
|
)
|
|||||||||
Earnings per share attributable to common shareholders - basic and diluted, discontinued operations
|
0.61
|
0.39
|
-
|
|||||||||||||
Loss per share attributable to common shareholders - basic and diluted,
|
12
|
(5.72
|
)
|
(1.02
|
)
|
(1.21
|
)
|
Number
Of Shares Outstanding(*)
|
Common Stock
Amount(*)
|
Additional Paid - in
Capital(*)
|
Accumulated Deficit
|
Total
|
||||||||||||||||
Balance January 1, 2017
|
1,359,514
|
40,785
|
284,043,237
|
(229,977,258
|
)
|
54,106,764
|
||||||||||||||
Net loss
|
-
|
-
|
-
|
(6,094,560
|
)
|
(6,094,560
|
)
|
|||||||||||||
Dividends to Series B preferred shares
|
-
|
-
|
-
|
(1,808,811
|
)
|
(1,808,811
|
)
|
|||||||||||||
Issuance of shares sold at the market (ATM), net of issuance costs
|
37,723
|
1,133
|
373,110
|
-
|
374,243
|
|||||||||||||||
Issuance of restricted shares for stock incentive award and share-based compensation
|
12,534
|
376
|
116,186
|
-
|
116,562
|
|||||||||||||||
Shares forfeited
|
(505
|
)
|
(15
|
)
|
15
|
-
|
-
|
|||||||||||||
Balance December 31, 2017
|
1,409,266
|
42,279
|
284,532,548
|
(237,880,629
|
)
|
46,694,198
|
||||||||||||||
Net loss
|
-
|
-
|
-
|
(663,396
|
)
|
(663,396
|
)
|
|||||||||||||
Dividends to Series B preferred shares
|
-
|
-
|
-
|
(1,335,733
|
)
|
(1,335,733
|
)
|
|||||||||||||
Spin-off of EuroDry Ltd. to stockholders
|
-
|
-
|
(52,520,821
|
)
|
9,656,773
|
(42,864,048
|
)
|
|||||||||||||
Issuance of shares sold at the market (ATM), net of issuance costs
|
139,509
|
4,185
|
1,860,925
|
-
|
1,865,110
|
|||||||||||||||
Issuance of restricted shares for stock incentive award and share-based compensation
|
15,681
|
470
|
124,017
|
-
|
124,487
|
|||||||||||||||
Balance December 31, 2018
|
1,564,456
|
46,934
|
233,996,669
|
(230,222,985
|
)
|
3,820,618
|
||||||||||||||
Net loss
|
-
|
-
|
-
|
(1,682,671
|
)
|
(1,682,671
|
)
|
|||||||||||||
Dividends to Series B preferred shares
|
-
|
-
|
-
|
(1,271,782
|
)
|
(1,271,782
|
)
|
|||||||||||||
Preferred deemed dividend
|
-
|
-
|
-
|
(504,577
|
)
|
(504,577
|
)
|
|||||||||||||
144,727
|
4,342
|
771,190
|
-
|
775,532
|
||||||||||||||||
Issuance of restricted shares for stock incentive award and share-based compensation
|
15,444
|
463
|
97,456
|
-
|
97,919
|
|||||||||||||||
Shares issued in connection with acquisition of vessels
|
2,816,901
|
84,507
|
13,134,155
|
-
|
13,218,662
|
|||||||||||||||
1,056,338
|
31,690
|
5,968,310
|
-
|
6,000,000
|
||||||||||||||||
Rounding of stock split
|
2,393
|
72
|
(72
|
)
|
-
|
-
|
||||||||||||||
Balance December 31, 2019
|
5,600,259
|
168,008
|
253,967,708
|
(233,682,015
|
)
|
20,453,701
|
2017
|
2018
|
2019
|
||||||||||
Cash flows from operating activities:
|
||||||||||||
Net loss
|
(6,944,261
|
)
|
(663,396
|
)
|
(1,682,671
|
)
|
||||||
Adjustments to reconcile net loss to net cash provided by / (used in) operating activities:
|
||||||||||||
Vessel depreciation
|
3,585,965
|
3,305,951
|
4,178,886
|
|||||||||
Other operating income
|
(499,103
|
)
|
-
|
-
|
||||||||
Loss on write-down of vessels held for sale
|
4,595,819
|
-
|
-
|
|||||||||
Amortization and write off of deferred charges
|
113,244
|
321,181
|
205,590
|
|||||||||
Amortization of debt discount
|
60,988
|
465,507
|
95,214
|
|||||||||
Net gain on sale of vessels
|
(803,811
|
)
|
(1,340,952
|
)
|
-
|
|||||||
Amortization of fair value of below market time charters acquired
|
-
|
-
|
(857,945
|
)
|
||||||||
Share-based compensation
|
116,562
|
124,487
|
97,919
|
|||||||||
Change in the fair value of derivatives
|
5,901
|
(204,647
|
)
|
(41,435
|
)
|
|||||||
Loss on debt extinguishment
|
-
|
-
|
328,291
|
|||||||||
Changes in operating assets and liabilities:
|
||||||||||||
(Increase) / decrease in:
|
||||||||||||
Trade accounts receivable
|
(91,604
|
)
|
(73,210
|
)
|
243,608
|
|||||||
Prepaid expenses
|
(117,793
|
)
|
24,703
|
(304,195
|
)
|
|||||||
Other receivables
|
(210,741
|
)
|
(1,066,378
|
)
|
460,909
|
|||||||
Inventories
|
329,244
|
(511,373
|
)
|
(184,773
|
)
|
|||||||
Increase / (decrease) in:
|
||||||||||||
Due to related company
|
4,314,415
|
(2,732,256
|
)
|
(1,877,333
|
)
|
|||||||
Trade accounts payable
|
197,782
|
766,052
|
1,539,553
|
|||||||||
Accrued expenses
|
167,016
|
282,045
|
482,671
|
|||||||||
Deferred revenues
|
233,402
|
(172,544
|
)
|
556,140
|
||||||||
Net cash provided by / (used in) operating activities of continuing operations
|
5,053,025
|
(1,474,830
|
)
|
3,240,429
|
||||||||
Cash flows from investing activities:
|
||||||||||||
Cash paid for capitalized expenses and acquisition of vessels including attached time charter agreements
|
(30,063,480
|
)
|
(1,867
|
)
|
(55,720,226
|
)
|
||||||
Cash released from other investment
|
4,000,000
|
-
|
-
|
|||||||||
Proceeds from sale of vessels
|
9,552,260
|
6,255,735
|
-
|
|||||||||
Net cash (used in) / provided by investing activities of continuing operations
|
(16,511,220
|
)
|
6,253,868
|
(55,720,226
|
)
|
|||||||
2017
|
2018
|
2019
|
||||||||||
Cash flows from financing activities:
|
||||||||||||
Redemption of Series B preferred shares
|
-
|
-
|
(11,686,000
|
)
|
||||||||
Proceeds from issuance of common stock, net of commissions paid
|
549,495
|
1,975,110
|
6,853,101
|
|||||||||
Investment in subsidiary spun-off
|
(915,525
|
)
|
(3,298,356
|
)
|
-
|
|||||||
Due from spun-off subsidiary
|
639,312
|
-
|
-
|
|||||||||
Preferred dividends paid
|
-
|
-
|
(1,031,827
|
)
|
||||||||
Offering expenses paid
|
(341,072
|
)
|
(22,488
|
)
|
(136,724
|
)
|
||||||
Loan arrangement fees paid
|
(187,637
|
)
|
(419,863
|
)
|
(566,500
|
)
|
||||||
Proceeds from long-term bank loans
|
22,250,000
|
34,250,000
|
60,167,680
|
|||||||||
Repayment of long-term bank loans and vessel profit participation liability
|
(7,243,915
|
)
|
(32,349,000
|
)
|
(13,401,460
|
)
|
||||||
Proceeds from related party loan
|
-
|
-
|
5,000,000
|
|||||||||
Repayment of related party loan
|
(2,000,000
|
)
|
-
|
-
|
||||||||
Net cash provided by financing activities of continuing operations
|
12,750,658
|
135,403
|
45,198,270
|
|||||||||
Net increase / (decrease) in cash, cash equivalents and restricted cash
|
1,292,463
|
4,914,441
|
(7,281,527
|
)
|
||||||||
Cash, cash equivalents and restricted cash at beginning of year
|
7,004,684
|
8,297,147
|
13,211,588
|
|||||||||
Cash, cash equivalents and restricted cash at end of year, continuing operations
|
8,297,147
|
13,211,588
|
5,930,061
|
|||||||||
Cash breakdown
|
||||||||||||
Cash and cash equivalents
|
2,858,927
|
6,960,258
|
985,418
|
|||||||||
Restricted cash, current
|
1,103,953
|
117,063
|
610,376
|
|||||||||
Restricted cash, long term
|
4,334,267
|
6,134,267
|
4,334,267
|
|||||||||
Total cash, cash equivalents and restricted cash shown in the statement of cash flows, continuing operations
|
8,297,147
|
13,211,588
|
5,930,061
|
|||||||||
Discontinued operations:
|
||||||||||||
Net cash provided by operating activities of discontinued operations
|
2,910,287
|
3,970,170
|
-
|
|||||||||
Net cash used in investing activities of discontinued operations
|
(9,635,504
|
)
|
(29,045,685
|
)
|
-
|
|||||||
Net cash provided by financing activities of discontinued operations
|
9,283,359
|
27,928,885
|
-
|
Supplemental cash flow information
Cash paid for interest, net of capitalized expenses
|
1,174,863
|
2,475,631
|
3,100,049
|
|||||||||
Financing, and investing activities fees:
|
||||||||||||
Loan arrangement fees accrued
|
74,863
|
-
|
-
|
|||||||||
Offering expenses accrued
|
12,488
|
100,000
|
40,846
|
|||||||||
Payment-in-kind dividends
|
1,808,811
|
1,335,733
|
78,640
|
|||||||||
Capital expenditures included in liabilities
|
-
|
-
|
71,890
|
|||||||||
Accrued preferred dividends
|
-
|
-
|
161,315
|
|||||||||
-
|
-
|
13,218,662
|
||||||||||
Preferred shares distributed to EuroDry
|
-
|
18,192,131
|
-
|
• |
Allendale Investment S.A., incorporated in Panama on January 22, 2002, owner of the Panama flag 18,154 deadweight tons (“DWT”) / 1,169 twenty-foot equivalent (“TEU” – a measure of
carrying capacity in containers) container carrier M/V “Kuo Hsiung”, which was built in 1993 and acquired on May 13, 2002.
|
• |
Alterwall Business Inc., incorporated in Panama on January 15, 2001, owner of the Panama flag 18,253 DWT / 1,169 TEU container carrier M/V “Ninos” (previously named M/V “Quingdao I”)
which was built in 1990 and acquired on February 16, 2001.
|
• |
Prospero Maritime Inc., incorporated in the Republic of Marshall Islands on July 21, 2006, owner of the Marshall Islands flag 69,268 DWT dry bulk M/V “Aristides N.P.”, which was built in
1993 and acquired on September 21, 2006. The vessel was sold on January 15, 2016.
|
• |
Manolis Shipping Ltd., incorporated in the Republic of Marshall Islands on March 16, 2007, owner of the Marshall Islands flag 20,346 DWT / 1,452 TEU container carrier M/V “Manolis P”,
which was built in 1995 and acquired on April 12, 2007.
|
• |
Noumea Shipping Ltd, incorporated in the Republic of Marshall Islands on May 14, 2008, owner of the Marshall Islands flag 34,677 DWT / 2,556 TEU container carrier M/V “Maersk Noumea”,
renamed “Evridiki G”, which was built in 2001 and acquired on May 22, 2008.
|
• |
Eleni Shipping Ltd., incorporated in the Republic of Liberia on February 11, 2009, owner of the Liberian flag 72,119 DWT bulk carrier M/V “Eleni P”, which was built in 1997, acquired on
March 6, 2009 and sold on January 26, 2017.
|
• |
Aggeliki Shipping Ltd., incorporated in the Republic of Liberia on May 21, 2010, owner of the Liberian flag 30,306 DWT / 2008 TEU container carrier M/V “Aggeliki P”, which was built in
1998, acquired on June 21, 2010 and sold on December 6, 2017.
|
• |
Joanna Maritime Ltd., incorporated in Liberia on June 10, 2013, owner of the Liberian flag 22,301 DWT / 1,732 TEU container carrier M/V “Joanna”, which was built in 1999 and acquired on
July 4, 2013. On January 8, 2016, the vessel was renamed M/V “Vento di Grecale”. On March 17, 2017 the vessel was again renamed M/V “Joanna”.
|
• |
Jonathan John Shipping Ltd., incorporated in the Republic of the Marshall Islands on August 19, 2016, owner of the Panamanian flag 18,581 DWT / 1,439 TEU container carrier M/V “Aegean
Express”, which was built in 1997 and acquired on September 29, 2016.
|
• |
Gregos Shipping Ltd., incorporated in the Republic of Liberia on May 25, 2017, owner of the Liberian flag 35,600 DWT / 2,788 TEU container carrier M/V “EM Astoria”, which was built in
2004 and acquired on June 20, 2017.
|
• |
Athens Shipping Ltd., incorporated in the Republic of the Marshall Islands on September 18, 2017, owner of the Marshall Islands flag 32,350 DWT / 2,506 TEU container carrier M/V “EM
Athens”, which was built in 2000 and acquired on September 29, 2017.
|
• |
Corfu Navigation Ltd., incorporated in the Republic of the Marshall Islands on September 18, 2017, owner of the Marshall Islands flag 34,654 DWT / 2,556 TEU container carrier M/V “EM
Corfu”, which was built in 2001 and acquired on October 29, 2017.
|
• |
Oinousses Navigation Ltd., incorporated in the Republic of the Marshall Islands on September 18, 2017, owner of the Marshall Islands flag 32,350 DWT / 2,506 TEU container carrier M/V “EM
Oinousses”, which was built in 2000 and acquired on October 23, 2017.
|
• |
Bridge Shipping Ltd., incorporated in the Republic of the Marshall Islands on September 18, 2017, owner of the Marshall Islands flag 71,366 DWT / 5,610 TEU container carrier M/V “Akinada
Bridge”, which was built in 2001 and acquired on December 21, 2017.
|
• |
Diamantis Shipowners Ltd., incorporated in the Republic of Liberia on June 3, 2019, owner of the Liberian flag 30,360 DWT / 2,008 TEU container carrier M/V “Diamantis P”, which was built
in 1998 and acquired on August 2, 2019.
|
• |
Hydra Shipowners Ltd., incorporated in the Republic of Liberia on June 3, 2019, owner of the Liberian flag 23,351 DWT / 1,740 TEU container carrier M/V “EM Hydra”, which was built in 2005
and acquired on August 2, 2019.
|
• |
Spetses Shipowners Ltd., incorporated in the Republic of Liberia on June 3, 2019, owner of the Liberian flag 23,224 DWT / 1,740 TEU container carrier M/V “EM Spetses”, which was built in
2007 and acquired on August 7, 2019.
|
• |
Kea Shipowners Ltd., incorporated in the Republic of Liberia on June 3, 2019, owner of the Liberian flag 42,165 DWT / 3,100 TEU container carrier M/V “EM Kea”, which was built in 2007 and
acquired on August 7, 2019.
|
• |
Antwerp Shipping Ltd., incorporated in the Republic of the Marshall Islands on November 1, 2019, owner of the Marshall Islands flag 50,726 DWT / 4,253 TEU container carrier M/V “Synergy
Antwerp”, which was built in 2008 and acquired on November 19, 2019.
|
• |
Keelung Shipping Ltd., incorporated in the Republic of the Marshall Islands on November 1, 2019, owner of the Cypriot flag 50,969 DWT / 4,253 TEU container carrier M/V “Synergy Keelung”,
which was built in 2009 and acquired on November 18, 2019.
|
• |
Oakland Shipping Ltd., incorporated in the Republic of the Marshall Islands on November 1, 2019, owner of the Cypriot flag 50,787 DWT / 4,253 TEU container carrier M/V “Synergy Oakland”,
which was built in 2009 and acquired on November 19, 2019.
|
• |
Busan Shipping Ltd., incorporated in the Republic of the Marshall Islands on November 1, 2019, owner of the Marshall Islands flag 50,726 DWT / 4,253 TEU container carrier M/V “Synergy
Busan”, which was built in 2009 and acquired on November 21, 2019.
|
Year ended December 31,
|
||||||||||||
Charterer
|
2017
|
2018
|
2019
|
|||||||||
CMA CGM, Marseille
|
34
|
%
|
51
|
%
|
24
|
%
|
||||||
New Golden Sea Shipping Pte. Ltd., Singapore
|
31
|
%
|
33
|
%
|
21
|
%
|
||||||
Hapag-Lloyd AG, Hamburg
|
-
|
-
|
16
|
%
|
||||||||
MSC Geneva
|
17
|
%
|
11
|
%
|
15
|
%
|
||||||
Maersk Line A/S
|
-
|
-
|
11
|
%
|
2. |
Significant Accounting Policies - continued
|
2. |
Significant Accounting Policies - continued
|
2. |
Significant Accounting Policies - continued
|
2. |
Significant Accounting Policies - continued
|
3. |
Inventories
|
2018
|
2019
|
|||||||
Lubricants
|
1,043,763
|
1,728,861
|
||||||
Victualing
|
79,965
|
160,303
|
||||||
Bunkers
|
580,663
|
-
|
||||||
Total
|
1,704,391
|
1,889,164
|
4. |
Vessels, net
|
Costs
|
Accumulated Depreciation
|
Net Book Value
|
||||||||||
Balance, January 1, 2018
|
61,279,976
|
(9,147,897
|
)
|
52,132,079
|
||||||||
- Depreciation for the year
|
-
|
(3,305,951
|
)
|
(3,305,951
|
)
|
|||||||
Balance, December 31, 2018
|
61,279,976
|
(12,453,848
|
)
|
48,826,128
|
||||||||
- Depreciation for the year
|
-
|
(4,178,886
|
)
|
(4,178,886
|
)
|
|||||||
- Vessel acquisitions
|
71,214,470
|
-
|
71,214,470
|
|||||||||
- Vessel improvements
|
368,621
|
-
|
368,621
|
|||||||||
Balance, December 31, 2019
|
132,863,067
|
(16,632,734
|
)
|
116,230,333
|
||||||||
4. |
Vessels, net - continued
|
4. |
Vessels, net - continued
|
As of December 31, 2018
|
As of December 31, 2019
|
|||||||
Accrued payroll expenses
|
93,404
|
231,093
|
||||||
Accrued interest expense
|
565,623
|
590,216
|
||||||
Accrued general and administrative expenses
|
348,761
|
111,720
|
||||||
Accrued commissions
|
39,545
|
67,682
|
||||||
Other accrued expenses
|
254,472
|
724,610
|
||||||
Total
|
1,301,805
|
1,725,321
|
7. |
Related Party Transactions
|
7. |
Related Party Transactions - Continued
|
7. |
Related Party Transactions - continued
|
8. |
Long-Term Bank Loans
|
Borrower
|
December 31,
2018 |
December 31,
2019 |
|||||||
Noumea Shipping Ltd.
|
(a)
|
3,341,000
|
-
|
||||||
Gregos Shiping Ltd.
|
(b)
|
4,150,000
|
-
|
||||||
Alterwall Business Inc. / Allendale Investments S.A. / Manolis Shipping Ltd. / Joanna Maritime Ltd. / Jonathan John Shipping Ltd. / Athens Shipping Ltd. / Oinousses Navigation Ltd. / Corfu Navigation Ltd.
/ Bridge Shipping Ltd. / Noumea Shipping Ltd. / Gregos Shiping Ltd.
|
(c)
|
30,000,000
|
37,650,000
|
||||||
Diamantis Shipowners Ltd.
|
(d)
|
-
|
3,507,220
|
||||||
Kea Shipowners Ltd. / Spetses Shipowners Ltd. / Hydra Shipowners Ltd.
|
(e)
|
-
|
12,050,000
|
||||||
Antwerp Shipping Ltd. / Busan Shipping Ltd. / Keelung Shipping Ltd. / Oakland Shipping Ltd.
|
(f)
|
-
|
32,000,000
|
||||||
37,491,000
|
85,207,220
|
||||||||
Less: Current portion
|
(5,212,000
|
)
|
(12,541,840
|
)
|
|||||
Long-term portion
|
32,279,000
|
72,665,380
|
|||||||
Deferred charges, current portion
|
125,357
|
246,520
|
|||||||
Deferred charges, long-term portion
|
237,848
|
477,595
|
|||||||
Debt discount, current portion
|
216,402
|
-
|
|||||||
Debt discount, long-term portion
|
324,603
|
-
|
|||||||
Long-term bank loans, current portion net of deferred charges and debt discount
|
4,870,241
|
12,295,320
|
|||||||
Long-term bank loans, long-term portion net of deferred charges and debt discount
|
31,716,549
|
72,187,785
|
|||||||
Loan from related party, current
|
|||||||||
Euroseas Ltd.
|
(g)
|
-
|
5,000,000
|
To December 31:
|
||||
2020
|
12,541,840
|
|||
2021
|
29,941,840
|
|||
2022
|
8,723,540
|
|||
2023
|
34,000,000
|
|||
Total
|
85,207,220
|
|
(a) |
On December 22, 2016, the supplemental agreement between Credit Agricole and Noumea Shipping Ltd., owner of M/V “Evridiki G” was signed in order to refinance the final quarterly
instalment of $720,000 and the balloon payment of $6,360,000 originally due in December 2016. The borrower and the lender agreed to amend the repayment profile in respect of the loan of which $7,080,000 remained outstanding as of the
date of the supplemental agreement and to extend the final maturity date to January 2018. The loan will be repaid with three repayments of $720,000 each, due in December 2016, in July 2017 and in January 2018 together with the balloon
payment of $4,920,000 due in January 2018. On February 27, 2018, the Company signed and drew a term loan facility of $4,250,000 with Credit Agricole in order to partly refinance the existing indebtedness of M/V “Evridiki G” with the
bank. The loan was payable in thirteen consecutive quarterly instalments of $303,000 each and a final instalment in the amount of $311,000. The margin of the loan was 3.00% above LIBOR. The loan was secured with the following: (i) first
priority mortgages over M/V “Evridiki G” and collateral vessel (M/V “EM Astoria”), (ii) first assignment of earnings and insurance and (iii) other covenants and guarantees similar to the remaining loans of the Company. The Company
completed the refinancing of the specific loan using its revolving loan facility with Eurobank Ergasias S.A., as explained in note (c) below.
|
|
(b) |
On June 15, 2017, the Company signed a term loan facility with Credit Agricole and on June 19, 2017 a loan of $4,750,000 was drawn by Gregos Shipping Ltd. to partly finance the
acquisition of M/V “EM Astoria”. The loan was payable in twenty or sixteen consecutive equal quarterly installments of $100,000 plus a balloon amount of $2,750,000 or $3,150,000. The margin of the loan was 2.65% above LIBOR. The loan
was secured with (i) first priority mortgage over M/V “EM Astoria”, (ii) first assignment of earnings and insurance of M/V “EM Astoria”, (iii) a corporate guarantee of Euroseas Ltd. and other covenants and guarantees similar to
remaining loans of the Company. The Company paid a loan arrangement fee of $50,000 in 2017 for this loan. The Company had also entered into a profit sharing agreement with Credit Agricole whereby it would share with the bank, 35% of the
excess of the fair market value of the vessel over the outstanding loan when the vessel was sold or when the loan matured. As a result of the lender's entitlement to participate in the appreciation of the market value of the mortgaged
vessel, the Company recognized a participation liability of an amount of $1,067,500 as of December 31, 2018, presented in "Vessel profit participation liability" in the consolidated balance sheets, with a corresponding debit to a debt
discount account, presented contra to the loan balance. In addition, 35% of the cash flow after debt service would be set aside and be used to repay the balloon payment with any excess funds to be paid to the bank. The Company completed
the refinancing of the specific loan in June 2019 using its revolving loan facility with Eurobank Ergasias S.A., as explained in note (c) below, with the final participation liability paid amounting to $950,000 included in the
“Repayment of long-term bank loans and vessel profit participation liability” in the consolidated statement of cash flows. The portion of debt discount remaining unamortized at the time of the refinancing was written-off and presented
as “Loss on debt extinguishment” in the consolidated statement of operations, partly offset by the lower amount of $950,000 at which the vessel profit participation liability was finally settled as described above.
|
|
(c) |
On November 21, 2018, the Company signed a reducing revolving credit facility with Eurobank Ergasias S.A (the “Lender”) for an amount of up to $45,000,000. A loan of $30,000,000 was drawn
on November 21, 2018 by Alterwall Business Inc., Allendale Investments S.A., Manolis Shipping Ltd., Joanna Maritime Ltd., Jonathan John Shipping Ltd., Athens Shipping Ltd., Oinousses Navigation Ltd., Corfu Navigation Ltd. and Bridge
Shipping Ltd. to fully refinance all of the Company’s existing facilities with this bank and provide working capital. The revolving tranche will be available for a period of 18 months from signing of the loan agreement for the purpose
of partly financing new vessel acquisitions or providing working capital and can be renewed subject to the bank’s approval and a fee to be determined. The loan is payable in 12 equal consecutive quarterly principal installments of
$900,000 and the balance will be repaid through balloon payment of $19,200,000 together with the last principal installment in November 2021. Each quarterly principal instalment paid is added to the revolving tranche and may be redrawn.
The interest rate margin is 3.90% over LIBOR, reduced from 4.40% as described below. The loan is secured with (i) first priority mortgages over M/V “Ninos”, M/V “Kuo Hsiung”, M/V “Aegean Express”, M/V “Manolis P.” M/V “Joanna”, M/V “EM
Athens”, M/V “EM Oinousses”, M/V “EM Corfu” and M/V “Akinada Bridge”, (ii) first assignment of earnings and insurance of the aforementioned vessels, (iii) a corporate guarantee of Euroseas Ltd. and other covenants and guarantees similar
to the remaining loans of the Company. The Company has the option (at the Lender’s absolute discretion) to substitute a mortgaged vessel by notifying the Lender in writing at least one (1) month prior to the intended substitution date,
provided that: a) the substitute vessel is of a similar type, of the same or younger age, having the same or enhanced characteristics (including, without limitation, deadweight, lightweight, shipyard pedigree and technical
specifications) and will be 100% owned by a shipowning company, incorporated in a jurisdiction acceptable to the Lender and owned by a ship owning company owned by the Company (directly or indirectly) and b) the new shipowning company
provides a first preferred mortgage over the new vessel and a corporate guarantee in favor of the Lender and executes any other security documentation as may be requested by the Lender at its discretion. The Company paid loan
arrangement fees of $300,000 within 2018 for this tranche.
|
|
(d) |
On July 29, 2019, the Company signed a term loan facility with Piraeus Bank S.A. for an amount not exceeding the lesser between $4,000,000 and 90% of the scrap value of M/V “Diamantis P”.
On July 31, 2019, a loan of $3,667,680 was drawn by Diamantis Shipping Ltd. to partly finance the acquisition of M/V “Diamantis P”. The loan is payable in twelve equal consecutive quarterly instalments of $160,460 plus a balloon amount
of $1,742,160 paid together with the last instalment in July 2022. The margin of the loan is 3.50% over LIBOR. The loan is secured with (i) first priority mortgage over M/V “Diamantis P”, (ii) first assignment of earnings and insurance
of M/V “Diamantis P”, (iii) a corporate guarantee of Euroseas Ltd. and other covenants and guarantees similar to remaining loans of the Company. The Company paid a loan arrangement fee of $32,000 within 2019 for this loan. The security
cover ratio covenant for the facility is set to 110% until the first anniversary of the drawdown date and 120% thereafter.
|
|
(e) |
On July 30, 2019, the Company signed a term loan facility with HSBC Bank plc. for an amount of $12,500,000. The loan was used to partly finance the acquisition of M/V “EM Hydra”, M/V “EM
Kea” and M/V “EM Spetses”. The loan was drawn in tranches upon the delivery of each vessel to the Company with the last drawdown taking place on August 8, 2019.The loan is payable in fourteen consecutive equal quarterly installments of
$450,000 and a balloon payment of $6,200,000 paid with the last instalment in February 2023. The loan bears interest at LIBOR plus a margin of 2.95%. The loan is secured with (i) first priority mortgages over M/V “EM Hydra”, M/V “EM
Kea” and M/V “EM Spetses” (ii) first assignment of earnings and insurance of the abovementioned vessels, (iii) a corporate guarantee of Euroseas Ltd. and other covenants and guarantees similar to the remaining loans of the Company. The
Company paid loan arrangement fees of $62,500 within 2019 for this loan. The security cover ratio covenant for the facility is set to 130%.
|
|
(f) |
On November 8, 2019, the Company signed a term loan facility with Piraeus Bank S.A. for an amount of $32,000,000. The loan was used to partly finance the acquisition of M/V “Synergy
Antwerp”, M/V “Synergy Busan”, M/V “Synergy Keelung” and M/V “Synergy Oakland”. The loan was drawn in tranches upon the delivery of each vessel to the Company with the last drawdown taking place on November 18, 2019. The loan is payable
in three consecutive equal quarterly instalments of $1,400,000 followed by thirteen consecutive equal quarterly instalments of $800,000 and a balloon payment of $17,400,000 paid with the last instalment. The loan bears interest at LIBOR
plus a margin of 3.50%. The loan is secured with (i) first priority mortgages over M/V “Synergy Antwerp”, M/V “Synergy Busan”, M/V “Synergy Keelung” and M/V “Synergy Oakland” (ii) first assignment of earnings and insurance of the
abovementioned vessels, (iii) a corporate guarantee of Euroseas Ltd. and other covenants and guarantees similar to the remaining loans of the Company. The Company paid loan arrangement fees of $352,000 within 2019 for this loan. The
security cover ratio covenant for the facility is set to 125%.
|
10. |
Commitments and Contingencies
|
|
(a) |
As of December 31, 2019 a subsidiary of the Company, Alterwall Business Inc. owner of M/V “Ninos”, is involved in a dispute with a fuel oil supplier who claimed a maritime lien against
the vessel after the company which had time-chartered the vessel from the Company went bankrupt in October 2009 and failed to pay certain invoices. The vessel was arrested in Karachi in November 2009 and released after a bank guarantee
for an amount of $0.53 million was provided on behalf of the Company, for which the bank has restricted an equal amount of the Company's cash which is presented within “Restricted Cash” in the consolidated balance sheets. The legal
proceedings are ongoing. Although the Company believes it will be successful in its claim, it made a provision of $0.15 million in 2016, for any costs that may be incurred.
|
|
(b) |
On November 7, 2019, Euroseas Ltd. and Synergy Holdings Limited, on the basis of the acquisition of the vessels M/V “Synergy Busan”, M/V “Synergy Keelung”, M/V “Synergy Oakland” and M/V
“Synergy Antwerp” (refer Notes 1 and 4), have agreed that Euroseas will issue certain shares of its common stock to Synergy Holdings Limited under the following terms:
|
10. |
Commitments and Contingencies - continued
|
|
a) |
On November 2, 2017 an award of 12,534 non-vested restricted shares, was made to 18 key persons of which 50% vested on July 1, 2018 and 50% vested on July 1, 2019; awards to officers and
directors amounted to 7,213 shares and the remaining 5,321 shares were awarded to employees of Eurobulk.
|
|
b) |
On November 21, 2018 an award of 15,681 non-vested restricted shares, was made to 18 key persons of which 50% vested on November 16, 2019 and 50% will vest on November 16, 2020; awards to
officers and directors amounted to 9,021 shares and the remaining 6,660 shares were awarded to employees of Eurobulk.
|
|
c) |
On November 4, 2019 an award of 15,444 non-vested restricted shares, was made to 17 key persons of which 50% will vest on July 1, 2020 and 50% will vest on July 1, 2021; awards to
officers and directors amounted to 8,713 shares and the remaining 6,731 shares were awarded to employees of Eurobulk.
|
Non-vested Shares
|
Shares
|
Weighted-Average Grant-Date Fair Value
|
||||||
Non-vested on January 1, 2019
|
21,948
|
10.16
|
||||||
Granted
|
15,444
|
5.84
|
||||||
Vested
|
(14,108
|
)
|
11.01
|
|||||
Non-vested on December 31, 2019
|
23,284
|
6.77
|
12. |
Loss Per Share
|
2017
|
2018
|
2019
|
||||||||||
Income:
|
||||||||||||
Net loss, continuing operations
|
(6,944,261
|
)
|
(663,396
|
)
|
(1,682,671
|
)
|
||||||
Dividends to Series B preferred shares
|
(1,808,811
|
)
|
(1,335,733
|
)
|
(1,271,782
|
)
|
||||||
Preferred deemed dividend
|
-
|
-
|
(504,577
|
)
|
||||||||
Net loss attributable to common shareholders, continuing operations
|
(8,753,072
|
)
|
(1,999,129
|
)
|
(3,459,030
|
)
|
||||||
Weighted average common shares –outstanding , basic and diluted
|
1,383,440
|
1,414,775
|
2,861,928
|
|||||||||
Basic and diluted loss per share, continuing operations
|
(6.33
|
)
|
(1.41
|
)
|
(1.21
|
)
|
||||||
Net income attributable to common shareholders, discontinued operations
|
849,701
|
554,506
|
-
|
|||||||||
Net loss attributable to common shareholders
|
(7,903,371
|
)
|
(1,444,623
|
)
|
(3,459,030
|
)
|
||||||
Basic and diluted loss per share
|
(5.72
|
)
|
(1.02
|
)
|
(1.21
|
)
|
Year ended December 31,
|
||||||||||||
2017
|
2018
|
2019
|
||||||||||
Voyage expenses
|
||||||||||||
Port charges and canal dues
|
1,156,511
|
384,893
|
251,197
|
|||||||||
Bunkers
|
407,978
|
876,195
|
804,211
|
|||||||||
Total
|
1,564,489
|
1,261,088
|
1,055,408
|
|||||||||
Vessel operating expenses
|
||||||||||||
Crew wages and related costs
|
8,771,386
|
11,020,924
|
13,111,682
|
|||||||||
Insurance
|
1,261,976
|
1,537,539
|
1,844,088
|
|||||||||
Repairs and maintenance
|
643,788
|
1,043,632
|
1,110,995
|
|||||||||
Lubricants
|
1,169,412
|
1,665,849
|
2,029,230
|
|||||||||
Spares and consumable stores
|
2,391,420
|
3,445,422
|
4,758,290
|
|||||||||
Professional and legal fees
|
10,037
|
252,156
|
259,311
|
|||||||||
Other
|
771,323
|
1,020,648
|
869,686
|
|||||||||
Total
|
15,019,342
|
19,986,170
|
23,983,282
|
Derivatives not designated as hedging instruments
|
Balance Sheet Location
|
December 31, 2018
|
December 31, 2019
|
Interest rate swap contract
|
Current liabilities – Derivatives
|
41,435
|
-
|
Total derivative liabilities
|
41,435
|
-
|
Derivatives not designated as hedging instruments
|
Location of gain (loss) recognized
|
Year Ended December 31, 2017
|
Year Ended December 31, 2018
|
Year Ended December 31, 2019
|
Interest rate swap contract– Unrealized (loss) / gain
|
(Gain) / loss on derivatives, net
|
(5,901)
|
204,647
|
-
|
Interest rate swap contract - Realized gain / (loss)
|
Gain / (loss) on derivatives, net
|
19,071
|
(201,745)
|
(2,885)
|
Total net gain / (loss) on interest rate swap contract
|
13,170
|
2,902
|
(2,885)
|
FFA contracts not designated as hedging instruments
|
Location of gain (loss) recognized
|
Year Ended December 31, 2017
|
Year Ended December 31, 2018
|
Year Ended December 31, 2019
|
FFA contracts – Unrealized loss
|
Gain / (loss) on derivatives, net
|
(781)
|
-
|
-
|
FFA contracts – Realized loss
|
Gain / (loss) on derivatives, net
|
-
|
(47,245)
|
-
|
Total loss on FFA contracts
|
(781)
|
(47,245)
|
-
|
Number of
Shares
|
Preferred Shares
Amount
|
Dividends paid-in-kind
|
Total
|
|||||||||||||
Balance,
January 1, 2017
|
35,505
|
29,000,000
|
4,804,948
|
33,804,948
|
||||||||||||
Dividends declared
|
1,809
|
-
|
1,808,811
|
1,808,811
|
||||||||||||
Balance,
December 31, 2017
|
37,314
|
29,000,000
|
6,613,759
|
35,613,759
|
||||||||||||
Dividends declared
|
1,333
|
-
|
1,335,733
|
1,335,733
|
||||||||||||
Shares distributed to EuroDry
|
(19,042
|
)
|
(14,500,000
|
)
|
(3,692,131
|
)
|
(18,192,131
|
)
|
||||||||
Balance,
December 31, 2018
|
19,605
|
14,500,000
|
4,257,361
|
18,757,361
|
||||||||||||
Dividends declared
|
81
|
-
|
78,639
|
78,639
|
||||||||||||
Redemption of shares
|
(11,686
|
)
|
(8,155,055
|
)
|
(3,530,945
|
)
|
(11,686,000
|
)
|
||||||||
Preferred deemed dividend
|
-
|
504,577
|
-
|
504,577
|
||||||||||||
Balance,
December 31, 2019
|
8,000
|
6,849,522
|
805,055
|
7,654,577
|
Fair Value Measurement as of December 31, 2018
|
||||||||||||||||
Total,
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
|||||||||||||
Liabilities
|
||||||||||||||||
Interest rate swap contract, current portion
|
$
|
41,435
|
-
|
$
|
41,435
|
-
|
December 31, 2017
|
||||||||||||||||||||
Fair Value
|
Level 1
|
Level 2
|
Level 3
|
Loss 2017
|
||||||||||||||||
Vessel profit participating liability
|
$
|
1,297,100
|
-
|
$
|
1,297,100
|
-
|
-
|
|||||||||||||
Vessels held for sale
|
$
|
5,000,000
|
-
|
$
|
5,000,000
|
-
|
$
|
4,595,819
|
||||||||||||
|
December 31, 2018
|
|||||||||||||||||||
|
Fair Value
|
Level 1
|
Level 2
|
Level 3
|
Loss 2018
|
|||||||||||||||
Vessel profit participating liability
|
$
|
1,067,500
|
-
|
$
|
1,067,500
|
-
|
-
|
|||||||||||||
|
||||||||||||||||||||
|
December 31, 2019
|
|||||||||||||||||||
|
Fair Value
|
Level 1
|
Level 2
|
Level 3
|
Loss 2019
|
|||||||||||||||
Vessel profit participating liability
|
-
|
-
|
-
|
-
|
-
|
17. |
Discontinued Operations
|
Year Ended December 31
(discontinued operations)
|
||||||||||||
|
2017
|
2018
|
2019
|
|||||||||
Statement of Operations Data
|
||||||||||||
Voyage revenue
|
20,280,215
|
25,934,204
|
-
|
|||||||||
Commissions (including, $253,503, $324,178 and nil respectively, to related party)
|
(1,122,196
|
)
|
(1,411,333
|
)
|
-
|
|||||||
Voyage expenses
|
(2,396,318
|
)
|
(410,676
|
)
|
-
|
|||||||
Vessel operating expenses (including, $102,131, $115,026 and nil, respectively, to related party)
|
(6,892,388
|
)
|
(9,183,152
|
)
|
-
|
|||||||
Drydocking expenses
|
(127,509
|
)
|
(1,465,079
|
)
|
-
|
|||||||
Related party management fees
|
(1,409,716
|
)
|
(1,701,340
|
)
|
-
|
|||||||
Vessel depreciation
|
(4,786,272
|
)
|
(5,422,155
|
)
|
-
|
|||||||
General and administrative expenses (including $693,524, $731,456 and nil, respectively, to related party)
|
(917,160
|
)
|
(2,346,502
|
)
|
-
|
|||||||
Operating income
|
2,628,656
|
3,993,967
|
-
|
|||||||||
Total other expenses, net
|
(1,778,955
|
)
|
(2,874,232
|
)
|
-
|
|||||||
Net income
|
849,701
|
1,119,735
|
-
|
|||||||||
Dividend Series B Preferred Shares
|
-
|
(565,229
|
)
|
-
|
||||||||
Net income attributable to common shareholders
|
849,701
|
554,506
|
-
|
17. |
Discontinued Operations - continued
|
|
(a) |
In January 2020, M/V EM Oinousses experienced an engine room fire while sailing off Mozambique carrying empty containers. The fire was extinguished without any injuries to the crew. The
vessel is currently undergoing evaluation for the type of repairs required and is idle during the evaluations. It is expected that the Company’s insurance will cover the majority of the costs. It is possible that the vessel may be
scrapped after the insurance process is complete.
|
|
(c) |
In April 2020, the Company entered into one interest rate swap with Eurobank for a notional amount of $30.0 million, in order to manage interest costs and the risk associated with
changing interest rates of the Company’s loans. Under the terms of the swap, Eurobank makes a quarterly payment to the Company equal to the 3-month LIBOR while the Company pays a fixed rate of 0.78% based on the notional amount. The
swap is effective from April 24, 2020 until April 24, 2025.
|
|
(d) |
Coronavirus Outbreak: On March 11, 2020, the World Health Organization declared the 2019 Novel Coronavirus (the “COVID-19”) outbreak a pandemic. In response to the
outbreak, many countries, ports and organizations, including those where the Company conducts a large part of its operations, have implemented measures to combat the outbreak, such as quarantines and travel restrictions. Such measures
have and will likely continue to cause severe trade disruptions. The extent to which COVID-19 will impact the Company’s results of operations and financial condition will depend on future developments, which are highly uncertain and
cannot be predicted, including new information which may emerge concerning the severity of the virus and the actions to contain or treat its impact, among others. Accordingly, an estimate of the impact cannot be made at this time.
|
Euroseas Ltd.
|
||
By:
|
/s/ Aristides J. Pittas
|
|
Name:
|
Aristides J. Pittas
|
|
Title:
|
CEO
|
|
Eurobulk Ltd.
|
||
By:
|
/s/ Nikolaos Pittas
|
|
Name:
|
Nikolaos Pittas
|
|
Title:
|
Director
|
|
In cooperation with Kyriakides Georgopoulos Law Firm
|
www.daniolos.gr
|
CLAUSE
|
PAGE
|
|
1.
|
AGREEMENT
|
2
|
2.
|
AMENDMENTS TO THE PRINCIPAL AGREEMENT
|
2
|
3.
|
CONDITIONS
|
4
|
4.
|
REPRESENTATIONS AND WARRANTIES
|
5
|
5.
|
UNDERTAKING AND COVENANTS
|
5
|
6.
|
CONTINUED FORCE AND EFFECT
|
5
|
7.
|
FEES AND EXPENSES
|
5
|
8.
|
NOTICES
|
5
|
9.
|
COUNTERPARTS
|
5
|
10.
|
LAW AND JURISDICTION
|
5
|
SCHEDULE
|
10
|
To: |
EUROSEAS LTD.
(as Borrower) |
To: |
Jonathan John Shipping Ltd
Joanna Maritime Ltd Allendale Investments S.A. Manolis Shipping Limited Alterwall Business Inc. Athens shipping Ltd Oinousses Navigation Ltd Corfu Navigation Ltd and Bridge Shipping Ltd (as Guarantors and Existing Owners) |
To: |
Eurobulk Ltd.
(as Approved Manager) |
(a) |
a reducing revolving credit facility agreement dated 21 November 2018 (the “Principal Agreement” and as the same is hereby supplemented and/or amended and as it may
further amended, supplemented, novated or varied from time to time, the “Facility Agreement”) made between (i) Euroseas Ltd. as borrower, (ii) the banks and financial institutions listed in
Schedule 1 of the Principal Agreement, which on the date thereof and on the date hereof comprised only Eurobank Ergasias S.A., as lenders (the “Lenders” or “a
Lender”) and (iii) Eurobank Ergasias S.A., as security trustee (the “Security Trustee”), as agent (the “Agent”), as arranger (the “Arranger”) and as account bank (the “Account Bank” and together with the Lenders, the Security Trustee, the Agent, the Arranger and the Account Bank, the “Creditor Parties”), pursuant to which it was agreed that the Lender would make available for drawing through multiple advances to the Borrower a reducing revolving credit facility of up to Forty Five
Million Dollars ($45,000,000) (the “Facility”, which expression shall, where the context permits, also mean the amount of the facility from time to time outstanding) for the purposes and upon the
terms and conditions set out therein, of which the aggregate amount of Thirty Million Dollars ($30,000,000) representing all Existing Ship-Related Advances has been made available to the Borrower, out of which the amount of twenty eight
million two hundred thousand Dollars ($28,200,000) currently remains outstanding;
|
(b) |
an Agency and Trust Deed dated 21 November 2018 and entered into pursuant to the Principal Agreement, it was, inter alia, agreed that the Security Trustee would hold the Trust Property on trust for the Lenders;
|
(c) |
the Borrower’s request that:
|
2.1 |
by inserting the following new definitions of “Effective Date” and “Supplemental Letter” in clause 1.2 of the Principal
Agreement in the correct alphabetical order:
|
2.3 |
by deleting the definitions of “Cash Collateral Deposit” and “Margin” in clause 1.2 of the Principal Agreement in their
entirety and by inserting in their place the following new definitions of “Cash Collateral Deposit” and “Margin”:
|
2.4 |
by inserting the following new paragraph (c) after paragraph b) of clause 19.3 of the Principal Agreement:
|
2.5 |
by inserting in Schedule 2 (Ship information) of the Principal Agreement after the block in relation to Ship 1, blocks for the New Ship A and the New Ship B as follows:
|
Name of Ship
|
EM ASTORIA
|
Description
|
Container
|
Owner
|
GREGOS SHIPPING LIMITED
|
Year of Built
|
2004
|
Flag State
|
Liberia
|
IMO Number
|
9243617
|
Register/Official Number
|
15321
|
Ship Commitment
|
$6,600,000
|
Name of Ship
|
EVRIDIKI G
|
Description
|
Container
|
Owner
|
NOUMEA SHIPPING LTD
|
Year of Built
|
2001
|
Flag State
|
Liberia
|
IMO Number
|
9231482
|
Register/Official Number
|
13898
|
Ship Commitment
|
$5,400,000
|
2.6 |
by deleting paragraph 9. of Part C of Schedule 4 (Condition Precedent Documents) of the Principal Agreement in its entirety and
by inserting in its place the following new paragraph 6.
|
2.7 |
by construing all references in the Principal Agreement to “this Agreement”, “hereunder” and the like and in the Finance Documents to the “Facility Agreement” as references to the Principal Agreement as amended
and supplemented by this Supplemental Letter.
|
3.2 |
the Borrower deliver to us:
|
3.3 |
all conditions of clause 4.1 to 4.6 and clause 9.1 of the Principal Agreement in relation to the advance of the two (2) New Ship-Related Advances have been fully satisfied and all documents and evidences
described in Schedule 4, Part C of the Principal Agreement have been received in form and substance satisfactory to the Agent and its lawyers on or before the Drawdown Date of such New Ship-Related Advances;
|
(a) |
the representations and warranties contained in clause 10 of the Principal Agreement and in clause 10 of the Guarantee granted by each existing Owner are true and correct on the date of this Supplemental Letter
as if all references therein to “this Agreement” were references to the Principal Agreement as supplemented by this Supplemental Letter; and
|
(b) |
this Supplemental Letter comprises the legal, valid and binding obligations of the Borrower and the Existing Owners enforceable in accordance with its terms.
|
/s/ Stavros Yagos
|
/s/ Maria Gripaiou
|
Stavros Yagos and Maria Gripaiou
|
Maria Gripaiou
|
Attorney -in-fact
|
|
for and on behalf of
|
|
EUROBANK ERGASIAS S.A
|
|
as Lender, Security Trustee, Agent, Arranger and Account Bank
|
|
Accepted and agreed
|
|
/s/ S. Karmiri
|
|
by S. Karmiri
|
|
for and on behalf of
|
|
EUROSEAS LTD.
|
|
as Borrower
|
|
Dated: 30 May 2019
|
/s/ S. Karmiri
|
|
by S. Karmiri
|
|
for and on behalf of
|
|
JONATHAN JOHN SHIPPING LTD
|
|
as Guarantor/Existing Owner
|
|
Dated: 30 May 2019
|
/s/ S. Karmiri
|
|
by S. Karmiri
|
|
for and on behalf of
|
|
JOANNA MARITIME LTD
|
|
as Guarantor/Existing Owner
|
|
Dated: 30 May 2019
|
/s/ S. Karmiri
|
|
by S. Karmiri
|
|
for and on behalf of
|
|
ALLENDALE INVESTMENTS S.A.
|
|
as Guarantor/Existing Owner
|
|
Dated: 30 May 2019
|
/s/ S. Karmiri
|
|
by S. Karmiri
|
|
for and on behalf of
|
|
MANOLIS SHIPPING LIMITED
|
|
as Guarantor/Existing Owner
|
|
Dated: 30 May 2019
|
/s/ S. Karmiri
|
|
by S. Karmiri
|
|
for and on behalf of
|
|
ALTERWALL BUSINESS INC.
|
|
as Guarantor/Existing Owner
|
|
Dated: 30 May 2019
|
/s/ S. Karmiri
|
|
by S. Karmiri
|
|
for and on behalf of
|
|
ATHENS SHIPPING LTD
|
|
as Guarantor/Existing Owner
|
|
Dated: 30 May 2019
|
/s/ S. Karmiri
|
|
by S. Karmiri
|
|
for and on behalf of
|
|
OINOUSSES NAVIGATION LTD
|
|
as Guarantor/Existing Owner
|
|
Dated: 30 May 2019
|
/s/ S. Karmiri
|
|
by S. Karmiri
|
|
for and on behalf of
|
|
CORFU NAVIGATION LTD
|
|
as Guarantor/Existing Owner
|
|
Dated: 30 May 2019
|
/s/ S. Karmiri
|
|
by S. Karmiri
|
|
for and on behalf of
|
|
BRIDGE SHIPPING LTD
|
|
as Guarantor/Existing Owner
|
|
Dated: 30 May 2019
|
/s/ S. Karmiri
|
|
by S. Karmiri
|
|
for and on behalf of
|
|
EUROBULK LTD.
|
|
as Approved Manager
|
|
Dated: 30 May 2019
|
Name of Ship
|
AEGEAN EXPRESS
|
Description
|
Container
|
Owner
|
JONATHAN JOHN SHIPPING LTD
|
Year of Built
|
1997
|
Flag State
|
Panama
|
IMO Number
|
9138161
|
Register/Official Number
|
26618-PEXT-5
|
Ship Commitment
|
$2,375,000
|
Name of Ship
|
JOANNA
|
Description
|
Container
|
Owner
|
JOANNA MARITIME LTD
|
Year of Built
|
1999
|
Flag State
|
Liberia
|
IMO Number
|
9204477
|
Register/Official Number
|
16118
|
Ship Commitment
|
$3,250,000
|
Name of Ship
|
KUO HSIUNG
|
Description
|
Container
|
Owner
|
ALLENDALE INVESTMENTS S.A.
|
Year of Built
|
1993
|
Flag State
|
Panama
|
IMO Number
|
9055448
|
Register/Official Number
|
20825-93-F
|
Ship Commitment
|
$1,875,000
|
Name of Ship
|
MANOLIS P.
|
Description
|
Container
|
Owner
|
MANOLIS SHIPPING LIMITED
|
Year of Built
|
1995
|
Flag State
|
Marshall Islands
|
IMO Number
|
9101493
|
Register/Official Number
|
2849
|
Ship Commitment
|
$2,375,000
|
Name of Ship
|
NINOS
|
Description
|
Container
|
Owner
|
ALTERWALL BUSINESS INC.
|
Year of Built
|
1990
|
Flag State
|
Panama
|
IMO Number
|
8909082
|
Register/Official Number
|
27893-01-F
|
Ship Commitment
|
$1,500,000
|
Name of Ship
|
EM ATHENS
|
Description
|
Container
|
Owner
|
ATHENS SHIPPING LTD
|
Year of Built
|
2000
|
Flag State
|
Marshall Islands
|
IMO Number
|
9203538
|
Register/Official Number
|
4019
|
Ship Commitment
|
$4,250,000
|
Name of Ship
|
EM OINOUSSES
|
Description
|
Container
|
Owner
|
OINOUSSES NAVIGATION LTD
|
Year of Built
|
2000
|
Flag State
|
Marshall Islands
|
IMO Number
|
9203514
|
Register/Official Number
|
4018
|
Ship Commitment
|
$4,250,000
|
Name of Ship
|
EM CORFU
|
Description
|
Container
|
Owner
|
CORFU NAVIGATION LTD
|
Year of Built
|
2001
|
Flag State
|
Marshall Islands
|
IMO Number
|
9231494
|
Register/Official Number
|
7209
|
Ship Commitment
|
$4,750,000
|
Name of Ship
|
AKINADA BRIDGE
|
Description
|
Container
|
Owner
|
BRIDGE SHIPPING LTD
|
Year of Built
|
2001
|
Flag State
|
Panama
|
IMO Number
|
9224532
|
Register/Official Number
|
21874-01-D
|
Ship Commitment
|
$5,375,000
|
Name of Ship
|
EM ASTORIA
|
Description
|
Container
|
Owner
|
GREGOS SHIPPING LIMITED
|
Year of Built
|
2004
|
Flag State
|
Liberia
|
IMO Number
|
9243617
|
Register/Official Number
|
15321
|
Ship Commitment
|
$6,600,000
|
Name of Ship
|
EVRIDIKI G
|
Description
|
Container
|
Owner
|
NOUMEA SHIPPING LTD
|
Year of Built
|
2001
|
Flag State
|
Liberia
|
IMO Number
|
9231482
|
Register/Official Number
|
13898
|
Ship Commitment
|
$5,400,000
|
Clause
|
Page
|
|
1
|
Purpose, definitions and construction
|
3
|
2
|
The Commitment and cancellation
|
17
|
3
|
Interest and Interest Periods
|
18
|
4
|
Repayment and prepayment
|
21
|
5
|
Fees and expenses
|
23
|
6
|
Payments and taxes; accounts and calculations
|
24
|
7
|
Representations and warranties
|
26
|
8
|
Undertakings
|
31
|
9
|
Conditions
|
42
|
10
|
Events of Default
|
43
|
11
|
Indemnities
|
47
|
12
|
Unlawfulness, increased costs and bail-in
|
48
|
13
|
Application of moneys, set off, pro-rata payments and miscellaneous
|
50
|
14
|
Accounts
|
52
|
15
|
Assignment, transfer and lending office
|
53
|
16
|
Notices and other matters
|
54
|
17
|
Governing law
|
56
|
18
|
Jurisdiction
|
56
|
Schedule 1 Form of Drawdown Notice
|
59
|
|
Schedule 2 Conditions precedent
|
60
|
|
Schedule 3 Form of Compliance Certificate
|
65
|
|
Execution Page
|
66
|
(1) |
DIAMANTIS SHIPOWNERS LTD as Borrower; and
|
(2) |
PIRAEUS BANK S.A. as Lender.
|
1 |
PURPOSE, DEFINITIONS AND CONSTRUCTION
|
1.1 |
Purpose
|
1.2 |
Definitions
|
|
(a) |
any repayment or prepayment of the Loan or any part thereof otherwise than (i) in accordance with clause 4.1, or (ii) on an Interest Payment Date whether on a voluntary or involuntary basis or otherwise
howsoever; or
|
|
(b) |
the Borrower failing or being incapable of drawing the Loan after the Drawdown Notice has been given;
|
|
(i) |
sections 1471 to 1474 of the US Internal Revenue Code of 1986 (the “Code”) or any associated regulations or other official guidance;
|
|
(ii) |
any treaty, law, regulation or other official guidance enacted in any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case)
facilitates the implementation of paragraph (a) above; or
|
|
(iii) |
any agreement pursuant to the implementation of paragraphs (a) or (b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction;
|
|
(i) |
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
|
|
(ii) |
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) |
‘The International Management Code for the Safe Operation of Ships and for Pollution Prevention’, currently known or referred to as the ‘ISM Code’, adopted by the Assembly of the International Maritime
Organisation by Resolution A.741(18) on 4 December 1993 and incorporated on 19 May 1994 into Chapter IX of the International Convention for Safety of Life at Sea 1974 (SOLAS 1974); and
|
|
(b) |
all further resolutions, circulars, codes, guidelines, regulations and recommendations which are now or in the future issued by or on behalf of the International Maritime Organisation or any other entity with
responsibility for implementing the ISM Code, including, without limitation, the ‘Guidelines on implementation or administering of the International Safety Management (ISM) Code by Administrations’ produced by the International Maritime
Organisation pursuant to Resolution A.788(19) adopted on 25 December 1995,
|
|
(a) |
the London interbank offered rate administered by ICE Benchmark Administration Limited (“ICE”) (or any other person which takes over the administration of that rate) for
deposits in Dollars for a period equal to, or as near as possible equal to, the relevant Interest Period which appears on page LIBOR 1 of the REUTERS screen at or about 11.45 a.m. (London time) on the Interest Rate Determination Date for
that Interest Period (and, for the purposes of this Agreement, “REUTERS LIBOR page 01” means the display designated as
|
|
(b) |
if on such date no rate is quoted on REUTERS LIBOR page 01, LIBOR for such period shall be the rate per annum (rounded upward if necessary to five decimal place) at which the Lender is able in accordance with
its usual practices to obtain deposits in Dollars in an amount approximately equal to the amount in relation to which LIBOR is to be determined for a period equivalent to such period in the London Interbank Market at or about 11:45 a.m.
(London time) on the Interest Rate Determination Date for that Interest Period for a period equal to that Interest Period and for delivery on the first Banking Day of it,
|
|
(i) |
listed on, or directly or indirectly owned or controlled (as such terms are defined by the relevant Sanctions Authority) by a person listed on, any Sanctions List;
|
|
(ii) |
located in, incorporated under the laws of, or owned or controlled by, or acting on behalf of, a person located in or organised under the laws of, a country or territory that is the target of country or
territory-wide Sanctions (“Sanctions Restricted Jurisdiction”); or
|
|
(iii) |
otherwise a target of Sanctions;
|
|
(i) |
the United States government;
|
|
(ii) |
the United Nations;
|
|
(iii) |
the European Union or any of its Member States;
|
|
(iv) |
the United Kingdom;
|
|
(v) |
any country to which any Security Party or any other member of the Group or any affiliate of any of them is bound; or
|
|
(vi) |
the respective governmental institutions and agencies of any of the foregoing, including without limitation, the Office of Foreign Assets Control of the US Department of Treasury (“OFAC”), the United States Department of State, and Her Majesty’s Treasury (“HMT”) (together “Sanctions Authorities” and each, “Sanctions Authority”);
|
|
(ii) |
Compulsory Acquisition; or
|
|
(iii) |
any hijacking, theft, condemnation, capture, seizure, arrest, detention or confiscation of the Vessel not falling within the definition of Compulsory Acquisition, unless the Vessel be released and restored to
the Borrower within sixty (60) days after such incident;
|
|
(a) |
the Borrower if it is resident for tax purposes in the USA; or
|
|
(b) |
a Security Party some or all of whose payments under the Security Documents are from sources within the USA for US federal income tax purposes;
|
1.3 |
Construction
|
1.3.1 |
clause headings and the index are inserted for convenience of reference only and shall be ignored in the construction of this Agreement;
|
1.3.2 |
references to clauses and schedules are to be construed as references to clauses of, and schedules to, this Agreement and references to this Agreement include its schedules and any supplemental agreements
executed pursuant hereto;
|
1.3.3 |
references to (or to any specified provision of) this Agreement or any other document shall be construed as references to this Agreement, that provision or that document as in force for the time being and as
duly amended and/or supplemented and/or novated;
|
1.3.4 |
references to a “regulation” include any present or future regulation, rule, directive, requirement, request or guideline (whether or not having the force of law) of any Government Entity, central bank or any
self-regulatory or other supra-national authority;
|
1.3.5 |
references to any person in or party to this Agreement shall include reference to such person’s lawful successors and assigns and references to the Lender shall also include a Transferee Lender;
|
1.3.6 |
words importing the plural shall include the singular and vice versa;
|
1.3.7 |
references to a time of day are, unless otherwise stated, to Athens time;
|
1.3.8 |
references to a person shall be construed as references to an individual, firm, company, corporation or unincorporated body of persons or any Government Entity;
|
1.3.9 |
references to a “guarantee” include references to an indemnity or any other kind of assurance whatsoever (including, without limitation, any kind of negotiable instrument, bill or note) against financial loss or
other liability including, without limitation, an obligation to purchase assets or services as a consequence of a default by any other person to pay any Indebtedness and “guaranteed” shall be construed accordingly;
|
1.3.10 |
references to any statute or other legislative provision are to be construed as references to any such statute or other legislative provision as the same may be re enacted or modified or substituted by any
subsequent statute or legislative provision (whether before or after the date hereof) and shall include any regulations, orders, instruments or other subordinate legislation issued or made under such statute or legislative provision;
|
1.3.11 |
a certificate by the Lender as to any amount due or calculation made or any matter whatsoever determined in connection with this Agreement shall be conclusive and binding on the Borrower except for manifest
error;
|
1.3.12 |
if any document, term or other matter or thing is required to be approved, agreed or consented to by the Lender such approval, agreement or consent must be obtained in writing unless the contrary is stated;
|
1.3.13 |
time shall be of the essence in respect of all obligations whatsoever of the Borrower under this Agreement, howsoever and whensoever arising;
|
1.3.14 |
and the words “other” and “otherwise” shall not be construed eiusdem generis with any foregoing words where a wider construction is possible.
|
1.4 |
References to currencies
|
1.5 |
Contracts (Rights of Third Parties Act) 1999
|
2 |
THE COMMITMENT AND CANCELLATION
|
2.1 |
Agreement to lend
|
2.2 |
Drawdown
|
2.2.1 |
Subject to the terms and conditions of this Agreement, the Loan shall be made available to the Borrower following receipt by the Lender from the Borrower of a Drawdown Notice not later than 10:00 a.m. on the
third Banking Day before the date, which shall be a Banking Day falling within the Drawdown Period, on which the Borrower proposes the Loan is made available.
|
2.2.2 |
The Drawdown Notice shall be effective on actual receipt by the Lender and, once given, shall, subject as provided in clause 3.5, be irrevocable.
|
2.3 |
Limitation and application of the Loan
|
2.3.1 |
The amount of the Loan shall not exceed the amount of the Loan Facility.
|
2.3.2 |
The principal amount specified in the Drawdown Notice for borrowing on the Drawdown Date shall, subject to the terms of this Agreement, not exceed the lesser of (i) four million Dollars (USD4,000,000) and (ii)
90% of the Scrap Value of the Vessel (to be determined immediately prior to the Drawdown Date), to be applied in or towards financing the purchase of the Vessel by the Borrower.
|
2.3.3 |
The Loan shall be paid forthwith upon drawdown to such account as the Borrower shall stipulate in the Drawdown Notice.
|
2.4 |
Availability
|
2.4.1 |
The Borrower acknowledges that payment of the Loan referred to in clause 2.3.2 to the account or accounts specified in the Drawdown Notice shall satisfy the obligation of the Lender to lend the Loan to the
Borrower under this Agreement.
|
2.5 |
Cancellation in changed circumstances
|
2.5.1 |
The Borrower may at any time during the Facility Period by notice to the Lender (effective only on actual receipt) cancel with effect from a date not less than ten (10) Banking Days after receipt by the Lender
of such notice, all or part of the undrawn Total Commitment.
|
2.5.2 |
The Borrower may also at any time during the Facility Period by notice to the Lender (effective only on actual receipt) prepay and/or cancel with effect from a date not less than ten (10) Banking Days after
receipt by the Lender of such notice, the whole but not part only, but without prejudice to the Borrower’s obligations under clauses 3.5, 6.6 and 12, of the Commitment (if any). Upon any notice of such prepayment and cancellation being
given, the Commitment shall be reduced to zero, the Borrower shall be obliged to prepay the Loan and the Lender’s related costs (including but not limited to Break Costs, if any) on such date, but always without any premium or penalty if
such prepayment is effected on the next Interest Payment Date, and the Lender shall be under no obligation to make available the Loan.
|
2.6 |
Use of proceeds
|
2.6.1 |
Without prejudice to the Borrower’s obligations under clause 8.1.4, the Lender shall not have any responsibility for the application of the proceeds of the Loan or any part thereof by the Borrower.
|
2.6.2 |
The Borrower shall not, and shall procure that each Security Party and each other Group Member and any Subsidiary of any of them shall not, permit or authorise any other person to, directly or indirectly, use,
lend, make payments of, contribute or otherwise make available, all or any part of the proceeds of the Loan or other transactions contemplated by this Agreement to fund or facilitate trade, business or other activities: (i) involving or
for the benefit of any Restricted Person; or (ii) in any other manner that could result in the Borrower or any other Security Party being in breach of any Sanctions or becoming a Restricted Person.
|
2.6.3 |
It is prohibited to use any part of the proceeds of the Loan for the purposes of acquiring shares in the share capital of the Lender or other banks and/or financial institutions or acquiring hybrid capital
debentures (T12Aoug u(3gibticdiv Kupculaicov) of the Lender or other banks and/or financial institutions.
|
3 |
INTEREST AND INTEREST PERIODS
|
3.1 |
Normal interest rate
|
3.2 |
Selection of Interest Periods
|
3.3 |
Determination of Interest Periods
|
3.3.1 |
the first Interest Period in respect of the Loan shall start on the date the Loan is drawn and each subsequent Interest Period shall start on the last day of the previous Interest Period;
|
3.3.2 |
if any Interest Period would otherwise overrun a Repayment Date, then, in the case of the last Interest Period, such Interest Period shall end on the Maturity Date, and in the case of any other Interest Period,
the Loan shall be divided into parts so that there is one part in the amount of the Repayment Instalment due on such Repayment Date and having an Interest Period ending on the relevant Repayment Date and another part in the amount of the
balance of the Loan having an Interest Period ascertained in accordance with clause 3.2 and the other provisions of this clause 3.3; and
|
3.3.3 |
if the Borrower fails to specify the duration of an Interest Period in accordance with the provisions of clause 3.2 and this clause 3.3, such Interest Period shall have a duration of three (3) months or such
other period as shall comply with this clause 3.3.
|
3.4 |
Default interest
|
3.5 |
Market disruption; non-availability
|
3.5.1 |
If at any time prior to the commencement of any Interest Period:
|
|
(a) |
the Lender for any reason is unable to obtain Dollars in the London Interbank Market in order to fund the Loan (or any part of it) during that Interest Period; or
|
|
(b) |
the Lender considers that LIBOR would not accurately reflect the cost to it of funding the Loan (or any part of them) during that Interest Period
|
3.5.2 |
Within ten (10) Banking Days of any Determination Notice being given by the Lender under clause 3.5.1, the Lender must certify an alternative basis in place of LIBOR (the “Alternative
Basis”) for maintaining the Loan. The Alternative Basis may at the Lender’s sole discretion include (without limitation) alternative interest periods, alternative currencies or alternative rates of interest but shall include the
relevant Margin above the cost of funds to the Lender.
|
3.5.3 |
Interest Rate Swaps
|
4 |
REPAYMENT AND PREPAYMENT
|
4.1 |
Repayment
|
4.1.1 |
Subject to any obligation to pay earlier under this Agreement, the Borrower must repay the Loan by:
|
|
(a) |
twelve (12) equal quarterly instalments of USD175,000 each; and
|
|
(b) |
an instalment (the “Balloon Instalment”) of USD1,900,000, the first repayment instalment falling due 3 months after the Drawdown Date and subsequent instalments falling
due at quarterly intervals thereafter, with the final instalment falling due on the Maturity Date and the Balloon Instalment being repayable together with the final such instalment.
|
4.1.2 |
If less than the full amount of the Loan is drawn down, then each of the said repayment instalments and the Balloon Instalment shall be reduced pro rata by the amount of, in aggregate, such undrawn amount.
|
4.1.3 |
The Borrower shall on the Maturity Date also pay to the Lender all other amounts in respect of interest or otherwise then due and payable under this Agreement and the Security Documents.
|
4.2 |
Voluntary prepayment
|
4.3 |
Mandatory Prepayment on Total Loss
|
4.3.1 |
Interpretation
|
|
(a) |
in the case of an actual total loss of the Vessel, on the actual date and at the time the Vessel was lost or, if such date is not known, on the date on which the Vessel was last reported;
|
|
(b) |
in the case of a constructive total loss of the Vessel, upon the date and at the time notice of abandonment of the Vessel is given to the then insurers of the Vessel (provided a claim for total loss is admitted
by such insurers) or, if such
|
|
(c) |
in the case of a compromised or arranged total loss of the Vessel, on the date upon which a binding agreement as to such compromised or arranged total loss has been entered into by the then insurers of the
Vessel;
|
|
(d) |
in the case of Compulsory Acquisition, on the date upon which the relevant requisition of title or other compulsory acquisition occurs; and
|
|
(e) |
in the case of hijacking, theft, condemnation, capture, seizure, arrest, detention or confiscation of the Vessel (other than within the definition of Compulsory Acquisition) by any Government Entity, or by
persons allegedly acting or purporting to act on behalf of any Government Entity, which deprives the Borrower of the use of the Vessel for more than sixty (60) days, upon the expiry of the period of sixty (60) days after the date upon
which the relevant incident occurred.
|
4.4 |
Mandatory prepayment on sale of the Vessel
|
4.5 |
Amounts payable on prepayment
|
4.5.1 |
Any prepayment of all or part of the Loan under this Agreement shall be made together with:
|
|
(a) |
accrued interest on the amount to be prepaid to the date of such prepayment;
|
|
(b) |
any additional amount payable under clauses 3.5, 6.6 or 12.2; and
|
|
(c) |
all other sums payable by the Borrower to the Lender under this Agreement or any of the other Security Documents including, without limitation any Break Costs.
|
4.6 |
Notice of prepayment; reduction of Repayment Instalments
|
4.6.1 |
Every notice of prepayment shall be effective only on actual receipt by the Lender, shall be irrevocable, shall specify the amount to be prepaid and shall oblige the Borrower to make such prepayment on the date
specified.
|
4.6.2 |
Any amount prepaid pursuant to clause 4.2 shall be applied pro rata against the remaining Repayment Instalments (including the Balloon Instalment) specified in clause 4.1.1.
|
4.6.3 |
The Borrower may not prepay the Loan or any part thereof except as expressly provided in this Agreement.
|
4.6.4 |
No amount repaid or prepaid may be re-borrowed.
|
5 |
FEES AND EXPENSES
|
5.1 |
Arrangement fee
|
5.2 |
Expenses
|
5.2.1 |
in connection with the negotiation, preparation, execution and, where relevant, registration of the Security Documents and of any contemplated or actual amendment, or indulgence or the granting of any waiver or
consent howsoever in connection with, any of the Security Documents (including legal fees) (but excluding any such expense incurred in connection with the transfer, assignment or sub-participation of any of the rights and/or obligations
of the Lender under the Security Documents);
|
5.2.2 |
in contemplation or furtherance of, or otherwise howsoever in connection with, the exercise or enforcement of, or preservation of any rights, powers, remedies or discretions under any of the Security Documents,
or in consideration of the Lender’s rights thereunder or any action proposed or taken following the occurrence of a Default or otherwise in respect of the moneys owing under any of the Security Documents; and
|
5.2.3 |
in connection with obtaining a written report from a maritime insurance consultant or broker acceptable to the Lender in relation to the Insurances of the Vessel (which the Lender may obtain not more than once a
year, and at any time when there has been a change of insurer or terms of cover for the Vessel, other than in respect of the insured value of the Vessel),
|
5.3 |
Value added tax
|
5.4 |
Stamp and other duties
|
6 |
PAYMENTS AND TAXES; ACCOUNTS AND CALCULATIONS
|
6.1 |
No set-off or counterclaim
|
6.2 |
Payment by the Lender
|
6.3 |
Non-Banking Days
|
6.4 |
Calculations
|
6.5 |
Currency of account
|
6.6 |
Grossing-up for Taxes - by the Borrower
|
6.7 |
Claw back of Tax benefit
|
6.8 |
Loan account
|
6.9 |
Partial payments
|
6.9.1 |
first, in or towards payment, in such order as the Lender may decide, of any unpaid costs and expenses of the Lender under any of the Security Documents;
|
6.9.2 |
secondly, in or towards payment of any fees payable to the Lender under, or in relation to, the Security Documents which remain unpaid;
|
6.9.3 |
thirdly, in or towards payment to the Lender of any accrued default interest owing pursuant to clause 3.4 but remains unpaid;
|
6.9.4 |
fourthly, in or towards payment to the Lender of any accrued interest owing in respect of the Loan which shall have become due under any of the Security Documents but remains unpaid;
|
6.9.5 |
fifthly, in or towards payment to the Lender of any due but unpaid Repayment Instalments; and
|
6.9.6 |
sixthly, in or towards payment to the Lender, on a pro rata basis, for any loss suffered by reason of any such payment in respect of principal not being effected on an Interest Payment Date relating to the part
of the Loan repaid and which amounts are so payable under this Agreement and any other sum relating to the Loan which shall have become due under any of the Security Documents but remains unpaid.
|
7 |
REPRESENTATIONS AND WARRANTIES
|
7.1 |
Continuing representations and warranties
|
7.1.1 |
Due incorporation
|
7.1.2 |
Corporate power
|
7.1.3 |
Binding obligations
|
7.1.4 |
No conflict with other obligations
|
7.1.5 |
No default
|
7.1.6 |
No litigation or judgments
|
7.1.7 |
No filings required
|
7.1.8 |
Required Authorisations and legal compliance
|
7.1.9 |
Choice of law
|
7.1.10 |
No immunity
|
7.1.11 |
Financial statements correct and complete
|
7.1.12 |
Pari passu
|
7.1.13 |
Information
|
7.1.14 |
No withholding Taxes
|
7.1.15 |
No Default under Underlying Documents
|
7.1.16 |
Use of proceeds
|
7.1.17 |
Copies true and complete
|
7.1.18 |
Ownership of Borrower
|
7.1.19 |
No Indebtedness
|
7.1.20 |
Tax returns
|
7.1.21 |
Freedom from Encumbrances
|
7.1.22 |
Environmental Matters
|
|
(a) |
the Borrower, the Manager and the other Group Members and, to the best of the Borrower’s knowledge and belief (having made due enquiry), their respective Environmental Affiliates have complied with the
provisions of all Environmental Laws;
|
|
(b) |
the Borrower, the Manager and the other Group Members and, to the best of the Borrower’s knowledge and belief (having made due enquiry), their respective Environmental Affiliates have obtained all Environmental
Approvals and are in compliance with all such Environmental Approvals;
|
|
(c) |
no Environmental Claim has been made or threatened or pending against any of the Borrower, the Manager, any other Group Member or, to the best of the Borrower’s knowledge and belief (having made due enquiry),
any of their respective Environmental Affiliates; and
|
|
(d) |
there has been no Environmental Incident;
|
7.1.23 |
ISM and ISPS Code
|
7.1.24 |
Accounting reference date
|
7.1.25 |
Office
|
7.1.26 |
Restricted Persons, unlawful activity
|
|
(a) |
none of the shares in the Borrower, in (to the best of its knowledge) the Corporate Guarantor, or in any other Security Party or the Vessel are or will be at any time during the Facility Period legally or
beneficially owned or controlled by a Restricted Person;
|
|
(b) |
no Restricted Person has or will have at any time during the Facility Period any legal or beneficial interest of any nature whatsoever in any of the shares of the Borrower, (to the best of its knowledge) the
Corporate Guarantor, or any other Security Party or the Vessel;
|
7.1.27 |
Sanctions
|
7.1.28 |
FATCA
|
7.2 |
Repetition of representations and warranties
|
8 |
UNDERTAKINGS
|
8.1 |
General
|
8.1.1 |
Notice of Event of Default and Proceedings
|
8.1.2 |
Authorisation
|
8.1.3 |
Corporate Existence
|
8.1.4 |
Use of proceeds
|
8.1.5 |
Pari passu
|
8.1.6 |
Financial statements
|
8.1.7 |
Compliance Certificates
|
8.1.8 |
Financial Covenants
|
|
(a) |
the Net Worth of the Group will at all times exceed USD15,000,000; and
|
|
(b) |
the Total Liabilities divided by the Total Assets (each net of cash balance) shall at all times be no more than 75%;
|
8.1.9 |
Reimbursement of MII & MAP Policy premiums
|
8.1.10 |
Provision of further information
|
8.1.11 |
Obligations under Security Documents, etc.
|
8.1.12 |
Compliance with ISM Code
|
8.1.13 |
Withdrawal of DOC and SMC
|
8.1.14 |
Issuance of DOC and SMC
|
8.1.15 |
ISPS Code Compliance
|
|
(a) |
maintain at all times a valid and current ISSC in respect of the Vessel;
|
|
(b) |
immediately notify the Lender in writing of any actual or threatened withdrawal, suspension, cancellation or material modification of the ISSC in respect of the Vessel; and
|
|
(c) |
procure that the Vessel will comply at all times with the ISPS Code;
|
8.1.16 |
Compliance with Laws and payment of taxes
|
|
(a) |
comply with all relevant Environmental Laws, laws, statutes and regulations applicable to it and pay all taxes for which it is liable as they fall due; and
|
|
(b) |
comply in all respects with, and will procure that each Security Party and each other Group Member will comply in all respects with, all Sanctions;
|
8.1.17 |
Inspection
|
8.1.18 |
The Vessel
|
|
(i) |
in the absolute sole, legal and beneficial ownership of the Borrower and not held on trust for any third party;
|
|
(ii) |
registered through the offices of the Registry as a ship under the laws and flag of the Flag State;
|
|
(iii) |
in compliance with the ISM Code and the ISPS Code and operationally seaworthy and in every way fit for service;
|
|
(iv) |
classed with the Classification free of all overdue requirements and recommendations of the Classification Society affecting the Classification;
|
|
(v) |
insured in accordance with the Ship Security Documents; and
|
|
(vi) |
managed by the Manager in accordance with the terms of the Management Agreement, which shall be acceptable to the Lender.
|
8.1.19 |
Charters
|
8.1.20 |
Chartering
|
|
(a) |
on demise charter for any period; or
|
|
(b) |
by any time or consecutive voyage charter for a term which exceeds or which by virtue of any optional extensions therein contained might exceed twelve (12) months’ duration; or
|
|
(c) |
on terms whereby more than two (2) months’ hire (or the equivalent) is payable in advance;
|
8.1.21 |
Sanctions
|
|
(a) |
(to the best of its knowledge only in respect of an agent) not be, and shall procure that any Security Party and other Group Member, or any director, officer, agent, employee or person acting on behalf of the
foregoing is not, a Restricted Person and does not act directly or indirectly on behalf of a Restricted Person;
|
|
(b) |
and shall procure that each Security Party and each other Group Member shall, not use any revenue or benefit derived from any activity or dealing with a Restricted Person in discharging any obligation due or
owing to the Lender;
|
|
(c) |
procure that no proceeds from any activity or dealing with a Restricted Person are credited to any bank account held with the Lender in its name or in the name of any other member of the Group;
|
|
(d) |
take, and shall procure that each Security Party and each other Group Member has taken, reasonable measures to ensure compliance with Sanctions;
|
|
(e) |
and shall procure that each Security Party and each other Group Member shall, to the extent permitted by law promptly upon becoming aware of them, supply to the Lender details of any claim, action, suit,
proceedings or investigation against it with respect to Sanctions by any Sanctions Authority; and
|
|
(f) |
not accept, obtain or receive any goods or services from any Restricted Person, except (without limiting clause 8.1.21(b)), to the extent relating to any warranties and/or guarantees given and/or liabilities
incurred in respect of an activity or dealing with a Restricted Person by the Borrower, any other Security Party or any other Group Member in accordance with this Agreement;
|
8.1.22 |
Ownership
|
8.1.23 |
Unencumbered liquidity
|
8.1.24 |
Listing
|
8.1.25 |
Shipping activities
|
8.1.26 |
Executive management
|
|
(a) |
Mr Aristeidis Pittas shall be the Chief Executive Officer or Chairman of the Corporate Guarantor; and
|
|
(b) |
the manager shall be managed and/or controlled by Mr Aristeidis Pittas or any other person acceptable to the Lender;
|
8.1.27 |
FATCA Information
|
|
(a) |
subject to paragraph (c) below each party to any Security Document shall, within 10 Banking Days of a reasonable request by the other party to that Security Documents:
|
|
(i) |
confirm to that other party whether it is:
|
|
(A) |
a FATCA Exempt Party; or
|
|
(B) |
not a FATCA Exempt Party; and
|
|
(ii) |
supply to that other party such forms, documentation and other information relating to its status under FATCA as that other party reasonably requests for the purposes of that other party’s compliance with FATCA;
|
|
(iii) |
supply to that other party such forms, documentation and other information relating to its status as that other party reasonably requests for
|
|
(b) |
if a party to any Security Document 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 the other party reasonably promptly;
|
|
(c) |
paragraph (a) above shall not oblige the Lender to do anything, and paragraph (a)(iii) above shall not oblige any other party to any Security Document to do anything, which would or might in its reasonable
opinion constitute a breach of:
|
|
(i) |
any law or regulation;
|
|
(ii) |
any policy of the Lender;
|
|
(iii) |
any fiduciary duty; or
|
|
(iv) |
any duty of confidentiality;
|
|
(d) |
paragraph (a) above shall not oblige the Lender to do anything, and paragraph (a)(iii) above shall not oblige any other party to any Security Document to do anything, which would or might in its reasonable
opinion cause it to disclose any confidential information (including, without limitation, its tax returns and calculations); provided, however, that information required (or equivalent to the information so required) by United States
Internal Revenue Service Forms W-8 or W-9 (or any successor forms) shall not be treated as confidential information of such Lender for purposes of this paragraph (d);
|
|
(e) |
if a party to any Security Document fails to confirm whether or not it is a FATCA Exempt Party, or to supply forms, documentation or other information requested in accordance with paragraph (a) (i) or (ii) above
(including, for the avoidance of doubt, where paragraph (c) above applies), then such party shall be treated for the purposes of the Security Documents (and payments under them) as if it is not a FATCA Exempt Party until (in each case)
such time as that party provides the requested confirmation, forms, documentation or other information.
|
8.1.28 |
FATCA Deduction
|
|
(a) |
A party to any Security Document may make any FATCA Deduction it is required to make by FATCA, and any payment required in connection with that FATCA Deduction, and no party to any Security Document shall be
required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction.
|
|
(b) |
A party to any Security Document shall promptly, upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate or the basis of such FATCA Deduction) notify the party to whom it
is making the payment and, in addition, shall notify the Borrower and the Lender.
|
8.1.29 |
Equal treatment of lenders
|
8.2 |
Security value maintenance
|
8.2.1 |
Security shortfall
|
|
(a) |
prepay such part of the Loan as will result in the Security Value after such prepayment (taking into account any other repayment of the Loan made between the date of the notice and the date of such prepayment)
being equal to or higher than the Required Security Amount; or
|
|
(b) |
constitute to the satisfaction of the Lender such further security for the Loan as shall be acceptable to the Lender having a value for security purposes (as determined by the Lender in accordance with clause
8.2.5) at the date upon which such further security shall be constituted which, when added to the Security Value, shall not be less than the Required Security Amount as at such date.
|
8.2.2 |
Valuation of the Vessel
|
8.2.3 |
Information
|
8.2.4 |
Costs
|
8.2.5 |
Valuation of additional security
|
8.2.6 |
Documents and evidence
|
8.2.7 |
Release of Security
|
8.3 |
Negative undertakings relating to the Borrower
|
8.3.1 |
Negative pledge
|
8.3.2 |
No merger or transfer
|
8.3.3 |
Disposals
|
8.3.4 |
Other business or manager
|
8.3.5 |
Acquisitions
|
8.3.6 |
Other obligations
|
8.3.7 |
No borrowing
|
8.3.8 |
Repayment of borrowings
|
8.3.9 |
Guarantees
|
8.3.10 |
Loans
|
8.3.11 |
Sureties
|
8.3.12 |
Flag, Class etc.
|
|
(a) |
any change in the name or flag of the Vessel;
|
|
(b) |
any change of Classification or Classification Society in respect of the Vessel;
|
|
(c) |
any change of Manager in respect of the Vessel; or
|
|
(d) |
any change in the ownership (including ultimate beneficial ownership) or control of the Borrower from that existing as at the date hereof and shall procure that there is no change in the ownership (including
ultimate beneficial ownership) or control of the Manager (if other than the Corporate Guarantor) from that existing as at the date hereof (and for the avoidance of doubt any change in the ownership of shares of and in the Corporate
Guarantor occurring in the normal course of business shall not constitute a breach of this clause);
|
8.3.13 |
Underlying Documents
|
8.3.14 |
Lay-up
|
8.3.15 |
Place of business
|
8.3.16 |
Share capital and distribution
|
8.3.17 |
Sharing of Earnings
|
8.3.18 |
Lawful use
|
|
(i) |
in any way or in any activity with a Restricted Person or in any Sanctions Restricted Jurisdiction or which is (i) unlawful under international law or the domestic laws of any relevant country or (ii) contrary
to any Sanctions;
|
|
(ii) |
to the best of its knowledge, in carrying illicit or prohibited goods;
|
|
(iii) |
in a way which may make the Vessel liable to be condemned by a prize court or destroyed, seized or confiscated;
|
|
(iv) |
in any part of the world where there are hostilities (whether war has been declared or not), unless such employment has been notified to, and approved by, the relevant insurers of the Vessel; or
|
|
(v) |
to the best of its knowledge, in carrying contraband goods,
|
8.3.19 |
FATCA
|
9 |
CONDITIONS
|
9.1 |
Availability of the Loan
|
9.1.1 |
the Lender, or its authorised representative, having received, not later than two (2) Banking Days before the day on which the Drawdown Notice is given, the documents and evidence specified in Part 1 of schedule
2 in form and substance satisfactory to the Lender; and
|
9.1.2 |
the representations and warranties contained in clause 7 being then true and correct as if each was made with respect to the facts and circumstances existing at such time and the same being unaffected by the
drawdown of the Loan; and
|
9.1.3 |
no Default having occurred and being continuing and there being no Default which would result from the lending of the Loan.
|
9.2 |
Advance of the Loan
|
9.3 |
Waiver of conditions precedent
|
9.4 |
Further conditions precedent
|
10 |
EVENTS OF DEFAULT
|
10.1 |
Events
|
10.1.1 |
Non-payment: any Security Party fails to pay any sum payable by it under any of the Security Documents to which it is a party at the time, in the currency and in the
manner stipulated in the Security Documents (and so that, for this purpose, sums payable (i) under clauses 3.1 and 4.1 shall be treated as having been paid at the stipulated time if (aa) received by the Lender within three (3) Banking
Days of the dates therein referred to and (bb) such delay in receipt is caused by administrative or other delays or errors within the banking system and (ii) on demand shall be treated as having been paid at the stipulated time if paid
within three (3) Banking Days of demand); or
|
10.1.2 |
Breach of Insurance and certain other obligations: the Borrower or, as the context may require, the Manager or any other person fails to obtain and/or maintain the
Insurances (as defined in, and in accordance with the requirements of, the Ship Security Documents) for the Vessel or if any insurer in respect of such Insurances cancels the Insurances or disclaims liability by reason, in either case, of
mis-statement in any proposal for the Insurances or for any other failure or default on the part of the Borrower or any other person or the Borrower commits any breach of or omits to observe any of the obligations or undertakings
expressed to be assumed by it under clause 8 or clause 14; or
|
10.1.3 |
Breach of other obligations: any Security Party commits any breach of or omits to observe Documents (other than those referred to in clauses 10.1.1 and 10.1.2 above)
unless such breach or omission, in the opinion of the Lender is capable of remedy, in which case the same shall constitute an Event of Default if it has not been remedied within fifteen (15) days of the occurrence thereof; or
|
10.1.4 |
Misrepresentation: any representation or warranty made or deemed to be made or repeated by or in respect of any Security Party in or pursuant to any of the Security
Documents or in any notice, certificate or statement referred to in or delivered under any of the Security Documents is or proves to have been incorrect or misleading in any material respect; or
|
10.1.5 |
Cross-default: any Indebtedness of the Borrower or any Indebtedness of the Corporate Guarantor exceeding USD1,000,000 is not paid when due (subject to applicable grace
periods) or any Indebtedness of the Borrower or any Indebtedness of the Corporate Guarantor exceeding USD1,000,000 becomes (whether by declaration or automatically in accordance with the relevant agreement or instrument constituting the
same) due and payable prior to the date when it would otherwise have become due (unless as a result of the exercise by the Borrower or the Corporate Guarantor of a voluntary right of prepayment), or any creditor of the Borrower or the
Corporate Guarantor becomes entitled to declare any such Indebtedness due and payable or any facility or commitment available to the Borrower or the Corporate Guarantor relating to Indebtedness is withdrawn, suspended or cancelled by
reason of any default (however described) of the person concerned, and such Indebtedness of the Borrower or the Corporate Guarantor (as the case may be) is not paid within fourteen (14) Banking Days from the due date for payment; or
|
10.1.6 |
Execution: any uninsured judgment or order made against any Security Party is not stayed, appealed against or complied with within fifteen (15) days or a creditor
attaches or takes possession of, or a distress, execution, sequestration or other process is levied or enforced upon or sued out against, any of the undertakings, assets, rights or revenues of any Security Party and is not discharged
within twenty (20) days; or
|
10.1.7 |
Insolvency: any Security Party is unable or admits inability to pay its debts as they fall due; suspends making payments on any of its debts or announces an intention to
do so; becomes insolvent; or has negative net worth (taking into account contingent liabilities); or suffers the declaration of a moratorium in respect of any of its Indebtedness; or
|
10.1.8 |
Dissolution: any corporate action, Proceedings or other steps are taken to dissolve or wind-up any Security Party unless the Borrower can demonstrate to the satisfaction
of the Lender, by providing an opinion of leading counsel that such corporate action,
|
10.1.9 |
Administration: any petition is presented, notice given or other steps are taken anywhere to appoint an administrator of any Security Party or an administration order is
made in relation to any Security Party; or
|
10.1.10 |
Appointment of receivers and managers: any administrative or other receiver is appointed anywhere of any Security Party or any material part of its assets and/or
undertaking or any other steps are taken to enforce any Encumbrance over all or any substantial part of the assets of any Security Party; or
|
10.1.11 |
Compositions: any corporate action, legal proceedings or other procedures or steps are taken or negotiations commenced, by any Security Party or by any of its creditors
with a view to the general readjustment or rescheduling of all or a substantial part of its Indebtedness or to proposing any kind of composition, compromise or arrangement involving such company and any of its creditors (excluding always
negotiations with holders of preferred shares); or
|
10.1.12 |
Analogous proceedings: there occurs, in relation to any Security Party, in any country or territory in which any of them carries on business or to the jurisdiction of
whose courts any part of their assets is subject, any event which, in the reasonable opinion of the Lender, appears in that country or territory to correspond with, or have an effect equivalent or similar to, any of those mentioned in
clauses 10.1.6 to 10.1.11 (inclusive) or any Security Party otherwise becomes subject, in any such country or territory, to the operation of any law relating to insolvency, bankruptcy or liquidation; or
|
10.1.13 |
Cessation of business: any Security Party suspends or ceases or threatens to suspend or cease to carry on its business without the prior consent of the Tender; or
|
10.1.14 |
Seizure: all or a material part of the undertaking, assets, rights or revenues of, or shares or other ownership interests in, any Security Party are seized, nationalised,
expropriated or compulsorily acquired by or under the authority of any Government Entity and the same are not returned to the relevant Security Party within 45 days of such seizure, nationalisation, expropriation or compulsory
acquisition; or
|
10.1.15 |
Invalidity: any of the Security Documents shall at any time and for any reason become invalid or unenforceable or otherwise cease to remain in full force and effect, or
if the validity or enforceability of any of the Security Documents shall at any time and for any reason be contested by any Security Party which is a party thereto, or if any such Security Party shall deny that it has any, or any further,
liability thereunder; or
|
10.1.16 |
Unlawfulness: any Unlawfulness occurs or it becomes impossible or unlawful at any time for any Security Party, to fulfil any of the covenants and obligations expressed to
be assumed by it in any of the Security Documents or for the Lender to exercise the rights or any of them vested in it under any of the Security Documents or otherwise; or
|
10.1.17 |
Repudiation: any Security Party repudiates any of the Security Documents or does or causes or permits to be done any act or thing evidencing an intention to repudiate any
of the Security Documents; or
|
10.1.18 |
Encumbrances enforceable: any Encumbrance (other than Permitted Encumbrances) in respect of any of the property (or part thereof) which is the subject of any of the
Security Documents becomes enforceable; or
|
10.1.19 |
Arrest: the Vessel is arrested, confiscated, seized, taken in execution, impounded, forfeited, detained in exercise or purported exercise of any possessory lien or other
claim or otherwise taken from the possession of the Borrower and the Borrower shall fail to procure the release of the Vessel within a period of fifteen (15) days thereafter; or
|
10.1.20 |
Registration: the registration of the Vessel under the laws and flag of the Flag State is cancelled or terminated without the prior written consent of the Lender; or
|
10.1.21 |
Unrest: the Flag State of the Vessel becomes involved in hostilities or civil war or there is a seizure of power in the Flag State by unconstitutional means unless the
Borrower shall have transferred the Vessel onto a new flag acceptable to the Lender within thirty (30) days of the Lender’s written request to the Borrower to effect such transfer; or
|
10.1.22 |
Environmental Incidents: an Environmental Incident occurs which gives rise, or may give rise, to an Environmental Claim which could, in the opinion of the Lender be
expected to have a Material Adverse Effect (i) on the financial condition of any Security Party or the Group taken as a whole or (ii) on the security constituted by any of the Security Documents or the enforceability of that security in
accordance with its terms; or
|
10.1.23 |
P&I: the Borrower or the Manager or any other person fails or omits to comply with any requirements of the protection and indemnity association or other insurer with
which the Vessel is entered for insurance or insured against protection and indemnity risks (including oil pollution risks) to the effect that any cover (including, without limitation, any cover in respect of liability for Environmental
Claims arising in jurisdictions where the Vessel operates or trades) is or may be liable to cancellation, qualification or exclusion at any time; or
|
10.1.24 |
Material events: any other event occurs or circumstance arises which, in the reasonable opinion of the Lender, is likely materially and adversely to affect either (i) the
ability of any Security Party to perform all or any of its obligations under or otherwise to comply with the terms of any of the Security Documents to which it is a party or (ii) the security created by any of the Security Documents or
(iii) the value or nature of the financial condition of any Security Party (other than the Manager); or
|
10.1.25 |
Required Authorisations: to the extent it has not been waived, any Required Authorisation is revoked or withheld or modified or is otherwise not granted or fails to
remain in full force and effect; or
|
10.1.26 |
Money Laundering: any Security Party is in breach of or fails to observe any law, requirement, measure or procedure implemented to combat “money laundering” as defined in
Article 1 of the Directive (91/308 EEC) of the Council of the European Communities; or
|
10.1.27 |
Management Agreement: a Management Agreement is terminated, revoked, suspended, rescinded, transferred, novated or otherwise ceases to remain in full force and effect for
any reason except with the prior consent of the Lender; or
|
10.1.28 |
Change of Ownership: there is any change in the immediate and/or ultimate legal and/or beneficial ownership or control of any of the shares of the Borrower or the
Shareholder from that existing on the Execution Date (and for the avoidance of doubt any change in the ownership of shares of and in the Corporate Guarantor occurring in the normal course of business shall not constitute a breach of this
clause); or
|
10.1.29 |
Sanctions: A Security Party fails to comply with clauses 7.1.25 (Restricted Persons, unlawful activity), 7.1.26 (Sanctions) or 8.1.21 (Sanctions) of this Agreement.
|
10.2 |
Acceleration
|
10.2.1 |
the obligation of the Lender to make its Commitment available shall be terminated, whereupon the Total Commitment shall be reduced to zero forthwith; and/or
|
10.2.2 |
the Loan and all interest accrued and all other sums payable whatsoever under the Security Documents have become due and payable, whereupon the same shall, immediately or in accordance with the terms of such
notice, become due and payable.
|
10.3 |
Demand Basis
|
11 |
INDEMNITIES
|
11.1 |
General indemnity
|
11.2 |
Environmental indemnity
|
11.3 |
Capital adequacy and reserve requirements indemnity
|
12 |
UNLAWFULNESS, INCREASED COSTS AND BAIL-IN
|
12.1 |
Unlawfulness
|
|
(a) |
have an adverse effect on its business, operations or financial condition; or
|
|
(b) |
involve it in any activity which is unlawful or prohibited or any activity that is contrary to, or inconsistent with, any regulation; or
|
|
(c) |
involve it in any expense (unless indemnified to its satisfaction) or tax disadvantage.
|
12.2 |
Increased costs
|
12.2.1 |
subject the Lender to Taxes or change the basis of Taxation of the Lender with respect to any payment under any of the Security Documents (other than Taxes or Taxation on the overall net income, profits or gains
of the Lender imposed in the jurisdiction in which its principal or lending office under this Agreement is located); and/or
|
12.2.2 |
increase the cost to, or impose an additional cost on, the Lender or its holding company in making or keeping the Commitment available or maintaining or funding all or part of the Loan; and/or
|
12.2.3 |
reduce the amount payable or the effective return to the Lender under any of the Security Documents; and/or
|
12.2.4 |
reduce the Lender’s or its holding company’s rate of return on its overall capital by reason of a change in the manner in which it is required to allocate capital resources to its obligations under any of the
Security Documents; and/or
|
12.2.5 |
require the Lender or its holding company to make a payment or forgo a return on or calculated by reference to any amount received or receivable by it under any of the Security Documents; and/or
|
12.2.6 |
require the Lender or its holding company to incur or sustain a loss (including a loss of future potential profits) by reason of being obliged to deduct all or part of the Commitment or the Loan from its capital
for regulatory purposes, then and in each such case (subject to clause 12.3);
|
|
(a) |
the Lender shall notify the Borrower in writing of such event promptly upon its becoming aware of the same; and
|
|
(b) |
the Borrower shall on demand made at any time whether or not the Loan has been repaid, pay to the Lender the amount which the Lender specifies (in a certificate setting forth the basis of the computation of such
amount but not including any matters which the Lender or its holding company regards as confidential) is required to compensate the Lender and/or (as the case may be) its holding company for such liability to Taxes, cost, reduction,
payment, forgone return or loss.
|
12.3 |
Exception
|
12.4 |
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 Security Document to the extent necessary to give effect to any Bail-In Action in relation to any such liability
|
13 |
APPLICATION OF MONEYS, SET OFF, PRO-RATA PAYMENTS AND MISCELLANEOUS
|
13.1 |
Application of moneys
|
13.1.1 |
first, in or towards payment, in such order as the Lender may decide, of any unpaid costs and expenses of the Lender and the Lender under any of the Security Documents;
|
13.1.2 |
secondly, in or towards payment of any fees payable to the Lender under, or in relation to, the Security Documents which remain unpaid;
|
13.1.3 |
thirdly, in or towards payment to the Lender of any accrued default interest owing pursuant to clause 3.4 but remains unpaid;
|
13.1.4 |
fourthly, in or towards payment to the Lender of any accrued interest owing in respect of the Loan which shall have become due under any of the Security Documents but remains unpaid;
|
13.1.5 |
fifthly, in or towards payment to the Lender of any due but unpaid Repayment Instalments;
|
13.1.6 |
sixthly, in or towards payment to the Lender in application in repayment of the Loan in accordance with clause 4.6.2;
|
13.1.7 |
seventhly, in or towards payment for any loss suffered by reason of any such payment in respect of principal not being effected on an Interest Payment Date relating to the
|
13.1.8 |
eighthly, the surplus (if any) shall be paid to the Borrower or to whomsoever else may then be entitled to receive such surplus.
|
13.2 |
Set-off
|
13.2.1 |
The Borrower irrevocably authorises the Lender (without prejudice to any of the Lender’s rights at law, in equity or otherwise), following the occurrence of an Event of Default which is continuing and without
notice to the Borrower, to apply any credit balance to which the Borrower is then entitled standing upon any account of the Borrower with any branch of the Lender in or towards satisfaction of any sum due and payable from the Borrower to
the Lender under any of the Security Documents. For this purpose, the Lender is authorised to purchase with the moneys standing to the credit of such account such other currencies as may be necessary to effect such application.
|
13.2.2 |
The Lender shall not be obliged to exercise any right given to it by this clause 13.2. The Lender shall notify the Borrower forthwith upon the exercise or purported exercise of any right of set off giving full
details in relation thereto.
|
13.2.3 |
Nothing in this clause 13.2 shall be effective to create a charge or other security interest.
|
13.3 |
Further assurance
|
13.4 |
Conflicts
|
13.5 |
No implied waivers, remedies cumulative
|
13.6 |
Severability
|
13.7 |
Force Majeure
|
13.8 |
Amendments
|
13.9 |
Counterparts
|
13.10 |
English language
|
14 |
ACCOUNTS
|
14.1 |
General
|
14.1.1 |
it will on or before the Drawdown Date, open the Earnings Account in its name; and
|
14.1.2 |
all moneys payable to the Borrower in respect of the Earnings of the Vessel shall, unless and until the Lender directs to the contrary pursuant to the provisions of the Mortgage, be paid to the Earnings Account,
Provided however that if any of the moneys paid to
|
14.2 |
Earnings Account: withdrawals
|
14.3 |
Application of accounts
|
15 |
ASSIGNMENT, TRANSFER AND LENDING OFFICE
|
15.1 |
Benefit and burden
|
15.2 |
No assignment by Borrower
|
15.3 |
Transfer by Lender
|
15.4 |
Documenting transfers
|
15.5 |
Sub-Participation
|
15.6 |
Disclosure of information
|
15.7 |
No additional costs
|
16 |
NOTICES AND OTHER MATTERS
|
16.1 |
Notices
|
16.1.1 |
unless otherwise specifically provided herein, every notice under or in connection with this Agreement shall be given in English by letter delivered personally and/or sent by post and/or transmitted by fax
and/or electronically;
|
16.1.2 |
in this clause “notice” includes any demand, consent, authorisation, approval, instruction, certificate, request, waiver or other communication.
|
16.2 |
Addresses for communications, effective date of notices
|
16.2.1 |
Subject to clause 16.2.2 and clause 16.2.5 notices to the Borrower shall be deemed to have been given and shall take effect when received in full legible form by the Borrower at the address and/or the fax number
appearing below (or at such other address or fax number as the Borrower may hereafter specify for such purpose to the Lender by notice in writing);
|
|
Address: |
c/o Euroseas Ltd.
|
|
Fax: |
+30 211 1804097
|
|
Attn: |
Anastasios Aslidis / George Kavalis
|
|
Email: |
aha@euroseas.gr / gik@euroseas.gr
|
16.2.2 |
notwithstanding the provisions of clause 16.2.1 or clause 16.2.5, a notice of Default and/or a notice given pursuant to clause 10.2 or clause 10.3 to the Borrower shall be deemed to have been given and shall
take effect when delivered, sent or transmitted by the Lender to the Borrower to the address or fax number referred to in clause 16.2.1;
|
16.2.3 |
subject to clause 16.2.5, notices to the Lender shall be deemed to be given, and shall take effect, when received in full legible form by the Lender at the address and/or the fax number appearing below (or at
any such other address or fax number as the Lender may hereafter specify for such purpose to the Borrower in writing);
|
|
Address: |
170 Alexandras Ave.
|
|
Fax No. |
+30 210 3739783
|
|
Attention: |
Thanassis Doudoulas / Olga Voutsa
|
|
Email: |
DoudouiasA@piraeusbank.gr / VoutsaOlOpiraeusbank.gr
|
16.2.4 |
subject to clause 16.2.5, notices to the Lender shall be deemed to be given and shall take effect when received in full legible form by the Lender at its address and/or fax number specified in the definition of
“Lender” (or at any other address or fax number as the Lender may hereafter specify for such purpose); and
|
16.2.5 |
if under clause 16.2.1 or clause 16.2.3 a notice would be deemed to have been given and effective on a day which is not a working day in the place of receipt or is outside the normal business hours in the place
of receipt, the notice shall be deemed to have been given and to have taken effect at the opening of business on the next working day in such place.
|
16.3 |
Electronic Communication
|
16.3.1 |
Any communication to be made by and/or between the Lender and the Security Parties or any of them under or in connection with the Security Documents or any of them may be made by electronic mail or other
electronic means, if and provided that all such parties:
|
|
(a) |
notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and
|
|
(b) |
notify each other of any change to their electronic mail address or any other such information supplied by them.
|
16.3.2 |
Any electronic communication made by and/or between the Lender and the Security Parties or any of them will be effective only when actually received in readable form.
|
17 |
GOVERNING LAW
|
18 |
JURISDICTION
|
18.1 |
Exclusive Jurisdiction
|
18.1.1 |
to settle any disputes or other matters whatsoever arising under or in connection with this Agreement or any non-contractual obligation arising out of or in connection with this Agreement and any disputes or
other such matters arising in connection with the negotiation, validity or enforceability of this Agreement or any part thereof, whether the alleged liability shall arise under the laws of England or under the laws of some other country
and regardless of whether a particular cause of action may successfully be brought in the English courts; and
|
18.1.2 |
to grant interim remedies or other provisional or protective relief.
|
18.2 |
Submission and service of process
|
18.2.1 |
irrevocably empowers and appoints Messrs Hill Dickinson Services (London) Ltd at present of The Broadgate Tower, 20 Primrose Street, London EC2A 2EW, England, as its agent to receive and accept on its behalf any
process or other document relating to any proceedings before the English courts in connection with this Agreement;
|
18.2.2 |
agrees to maintain such an agent for service of process in England from the date hereof until the end of the Facility Period;
|
18.2.3 |
agrees that failure by a process agent to notify the Borrower of service of process will not invalidate the proceedings concerned;
|
18.2.4 |
without prejudice to the effectiveness of service of process on its agent under clause 18.2.1 above but as an alternative method, consents to the service of process relating to any such proceedings by mailing or
delivering a copy of the process to its address for the time being applying under clause 16.2; and
|
18.2.5 |
agrees that if the appointment of any person mentioned in clause 18.2.1 ceases to be effective, the Borrower shall immediately appoint a further person in England to accept service of process on its behalf in
England and, failing such appointment within seven (7) days the Lender shall thereupon be entitled and is hereby irrevocably authorised by the Borrower in those circumstances to appoint such person by notice to the Borrower.
|
18.3 |
Forum non conveniens and enforcement abroad
|
18.3.1 |
waives any right and agrees not to apply to the English court or other court in any jurisdiction whatsoever to stay or strike out any proceedings commenced in England on the ground that England is an
inappropriate forum and/or that Proceedings have been or will be started in any other jurisdiction in connection with any dispute or related matter falling within clause 18.1; and
|
18.3.2 |
agrees that a judgment or order of an English court in a dispute or other matter falling within clause 18.1 shall be conclusive and binding on the Borrower and may be enforced against it in the courts of any
other jurisdiction.
|
18.4 |
Right of Lender, but not Borrower, to bring proceedings in any other jurisdiction
|
18.4.1 |
Nothing in this clause 18 limits the right of the Lender to bring Proceedings, including third party proceedings, against the Borrower, or to apply for interim remedies, in connection with this Agreement in any
other court and/or concurrently in more than one jurisdiction;
|
18.4.2 |
the obtaining by the Lender of judgment in one jurisdiction shall not prevent the Lender from bringing or continuing proceedings in any other jurisdiction, whether or not these shall be founded on the same cause
of action.
|
18.5 |
Enforceability despite invalidity of Agreement
|
18.6 |
Effect in relation to claims by and against non-parties
|
18.6.1 |
For the purpose of this clause “Foreign Proceedings” shall mean any Proceedings except proceedings brought or pursued in England arising out of or in connection with (i) or in any way related to any of the
Security Documents or any assets subject thereto or (ii) any action of any kind whatsoever taken by the Lender pursuant thereto or which would, if brought by the Borrower against the Lender, have been required to be brought in the English
courts;
|
18.6.2 |
the Borrower shall not bring or pursue any Foreign Proceedings against the Lender and the Borrower shall use its best endeavours to prevent persons not party to this Agreement from bringing or pursuing any
Foreign Proceedings against the Lender;
|
18.6.3 |
If, for any reason whatsoever, any Security Party and/or any person connected howsoever with any Security Party (including but not limited to any shareholder of the Borrower) brings or pursues against the Lender
any Foreign Proceedings, the Borrower shall indemnify the Lender on demand in respect of any and all claims, losses, damages, demands, causes of action, liabilities, costs and expenses (including, but not limited to, legal costs) of
whatsoever nature howsoever arising from or in connection with such Foreign Proceedings which the Lender certifies as having been incurred by it;
|
To: |
Piraeus Bank S.A.
170 Alexandras Ave. 11521 Athens Greece |
Re: |
Facility agreement dated July 2019 in respect of a loan of up to USD4,000,000 (the “Loan Agreement”) made between (1) Diamantis Shipowners Ltd as Borrower and (2) Piraeus Bank S.A. as Lender
|
(a) |
no Default has occurred and is continuing;
|
(b) |
the representations and warranties contained in clause 7 of the Loan Agreement are true and correct at the date hereof as if made with respect to the facts and circumstances existing at such date;
|
(c) |
the borrowing to be effected by the drawdown of the Loan will be within our corporate powers, has been validly authorised by appropriate corporate action and will not cause any limit on our borrowings (whether
imposed by statute, regulation, agreement or otherwise howsoever) to be exceeded;
|
(d) |
there has been no material adverse change in our financial position or in the consolidated financial position of the Borrower or the Corporate Guarantor from that described by us to the Lender in the negotiation
of the Loan Agreement and/or in any documents or statements already delivered to the Lender in connection therewith;
|
(e) |
there are no Required Authorisations;
|
(f) |
there has occurred nothing which would have a Material Adverse Effect; and
|
(g) |
no part of the proceeds of the Loan shall be used for the purpose of acquiring shares in the share capital of the Lender or other banks and/or financial institutions or acquiring hybrid capital debentures
(thAouc u(3Qt.bucv icepoulotimv) of the Lender or other banks and/or financial institutions.
|
By
|
||
Authorised Signatory
|
||
DIAMANTIS SHIPOWNERS LTD
|
(a) |
Corporate documents
|
(b) |
Corporate authorities
|
|
(i) |
Certified Copies of resolutions of the directors of each Security Party and shareholders of the Borrower approving such of the MOA and the Security Documents to which such Security Party is a party and
authorising the execution and delivery thereof and performance of such Security Party’s obligations thereunder, additionally certified by an officer of such Security Party, as having been duly passed at a duly convened meeting of the
directors and shareholders of such Security Party and not having been amended, modified or revoked and being in full force and effect; and
|
|
(ii) |
an original of any power of attorney issued by each Security Party pursuant to such resolutions;
|
(c) |
Required Authorisations
|
(d) |
Certificate of incumbency
|
(e) |
Shareholders
|
(f) |
Security Documents
|
(g) |
Declaration of compliance / “know your customer”
|
|
(i) |
the Borrower has complied at all times and in all respects with (i) any relevant employment legislation and employment regulations applicable to it, (ii) all documentation required by the Lender in relation to
the Lender’s “know your customer” requirements and (iii) all documentation required by the Lender for the opening of the Earnings Account with the Lender; and
|
|
(ii) |
the Guarantor and the Shareholder has complied at all times and in all respects with all documentation required by the Lender in relation to the Lender’s “know your customer” requirements; and
|
(h) |
process agent
|
(a) |
Approval of drawdown
|
(b) |
Copies of Underlying Documents
|
(c) |
Evidence satisfactory to the Lender that the Vessel:
|
|
(i) |
Purchase
|
|
(ii) |
Registration and Encumbrances
|
|
(iii) |
Classification
|
|
(iv) |
Insurance
|
|
(v) |
Management
|
|
(vi) |
Charter
|
(d) |
Security Documents
|
(e) |
Notices of assignment and acknowledgments
|
(f) |
Mortgage registration
|
(g) |
Bank accounts
|
(h) |
Laws of Marshall Islands: opinion
|
(a) |
Laws of Liberia: opinion
|
(i) |
ISPS Code
|
(j) |
DOC and Application for SMC
|
(k) |
Additional Vessel’s Certificates
|
(l) |
Lightweight
|
(m) |
Scrap Value
|
(n) |
Manager’s confirmation
|
(o) |
Insurance Report
|
(p) |
Fees
|
(q) |
Material Adverse Effect
|
(r) |
MIT and MAP Policy premium
|
(s) |
Further conditions precedent
|
To: |
Piraeus Bank S.A.
|
1. |
all the Borrower’s financial covenants in the Loan Agreement set out in clause 8 are being fully complied with, and, in particular, by reference to the latest audited financial statements, management accounts
and all other current relevant information available to us:
|
|
(a) |
the Net Worth of the Group is USD [ ];
|
|
(b) |
the Total Liabilities are USD [ ] and the Total Assets (adjusted for market values of vessels calculated in accordance with clause 8.2.5(i)) are USD [ ]; and
|
|
(c) |
the Total Liabilities divided by the Total Assets (each net of cash balance) (adjusted for market values of vessels calculated in accordance with clause 8.2.5(i)) is [ ]%;
|
2. |
no Default has occurred which is continuing;
|
3. |
the representations set out in clause 7 of the Loan Agreement are true and accurate with reference to all facts and circumstances now existing and all Required Authorisations have been obtained and are in full
force and effect.
|
By
|
SIGNED by STEFANIA KARMIRI
|
)
|
|
attorney-in-fact for and on behalf of
|
)
|
|
DIAMANTIS SHIPOWNERS LTD
|
)
|
|
pursuant to a Power of Attorney
|
)
|
/s/ STEFANIA KARMIRI
|
dated 15 July 2019
|
)
|
Attorney-in-fact
|
SIGNED by OLGA VOUTSA
|
)
|
|
|
|
and by EUGENIA KOUVARA
|
)
|
|
|
|
for and on behalf of
|
)
|
/s/ Olga Voutsa
|
|
/s/ Eugenia Kouvara
|
PIRAEUS BANK S.A.
|
)
|
Olga Voutsa
|
|
Eugenia Kouvara
|
Authorised signatories
|
Witness to all the above signatures
|
)
|
||
Name:
|
VASILIKI TZOANNOU
|
)
|
|
Address:
|
47-49 Akti Miaouli
|
)
|
/s/ VASILIKI TZOANNOU
|
185 36 Piraeus
|
|||
Greece
|
(1) |
Kea Shipowners Ltd
Spetses Shipowners Ltd Hydra Shipowners Ltd (as Borrowers) |
(2) |
HSBC Bank plc
(as Lender) |
1
|
Definitions and Interpretation
|
2
|
|
2
|
The Loan
|
21
|
|
3
|
Purpose
|
21
|
|
4
|
Conditions of Utilisation
|
21
|
|
5
|
Advance
|
23
|
|
6
|
Repayment
|
24
|
|
7
|
Illegality, Prepayment and Cancellation
|
25
|
|
8
|
Interest
|
28
|
|
9
|
Interest Periods
|
28
|
|
10
|
Changes to the Calculation of Interest
|
29
|
|
11
|
Fees
|
30
|
|
12
|
Tax Gross Up and Indemnities
|
31
|
|
13
|
Increased Costs
|
37
|
|
14
|
Other Indemnities
|
38
|
|
15
|
Mitigation by the Lender
|
40
|
|
16
|
Costs and Expenses
|
40
|
|
17
|
Security Documents and Application of Moneys
|
42
|
|
18
|
Representations
|
46
|
|
19
|
Information Undertakings
|
52
|
|
20
|
Financial Covenants
|
54
|
|
21
|
General Undertakings
|
56
|
|
22
|
Events of Default
|
62
|
|
23
|
Changes to the Lender
|
68
|
|
24
|
Changes to the Obligors
|
69
|
|
25
|
Conduct of Business by the Lender
|
70
|
|
26
|
Payment Mechanics
|
71
|
|
27
|
Set-Off
|
75
|
28
|
Notices
|
75
|
29
|
Calculations and Certificates
|
76
|
30
|
Partial Invalidity
|
77
|
31
|
Remedies and Waivers
|
77
|
32
|
Confidentiality
|
77
|
33
|
Counterparts
|
81
|
34
|
Governing Law
|
82
|
35
|
Enforcement
|
82
|
Schedule 1
|
Part I Conditions Precedent
|
83
|
Schedule 2
|
Utilisation Request
|
88
|
Schedule 3
|
Form of Compliance Certificate
|
89
|
(1) |
Kea Shipowners Ltd, a company incorporated under the law of
the Republic of Liberia, with its registered office at 80 Broad Street, Monrovia, Republic of Liberia and company number C-120948 (“Kea”);
Spetses Shipowners Ltd, a company incorporated under the law of the Republic of Liberia, with its registered office at 80 Broad Street, Monrovia, Republic of Liberia and company number C-120949 (“Spetses”) and Hydra Shipowners Ltd, a company
incorporated under the law of the Republic of Liberia, with its registered office at 80 Broad Street, Monrovia, Republic of Liberia and company number C-120950 (“Hydra” and, together with Kea and Spetses, the “Borrowers” and each a “Borrower”); and
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(2) |
HSBC BANK plc, of 8 Canada Square, London, E14 SHQ, England
(the “Lender”). Preliminary
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(A) |
Kea has agreed to purchase the Kea Vessel from the Kea Seller on the terms of the Kea MOA and intends to register the Kea Vessel in its ownership under the laws and
the flag of the Republic of Liberia.
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(B) |
Spetses has agreed to purchase the Spetses Vessel from the Spetses Seller on the terms of the Spetses MOA and intends to register the Spetses Vessel in its
ownership under the laws and the flag of the Republic of Liberia.
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(C) |
Hydra has agreed to purchase the Hydra Vessel from the Hydra Seller on the terms of the Hydra MOA and intends to register the Hydra Vessel in its ownership under
the laws and the flag of the Republic of Liberia.
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(D) |
The Lender has agreed to advance to the Borrowers on a joint and several basis up to the lesser of (a) $12,500,000 and (b) 49.9% of the aggregate Market Values of
the Vessels to assist the Borrowers to finance part of the purchase prices of the Vessels.
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Section 1 |
Interpretation
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1 |
Definitions and Interpretation
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1.1 |
Definitions In this Agreement:
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(a) |
the interest which the Lender should have received Per the period from the date of receipt of all or tiny part of the Loan or an Unpaid Sum to the last day of the
current Interest Period in respect of the Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period,
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(b) |
the amount which the Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank
in the Relevant Interbank Market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period.
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(i) |
is or becomes public information other than as a direct or indirect result of any breach by the Lender of Clause 32 (Confidentiality); or
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(ii) |
is identified in writing at the time of delivery as non-confidential by any Obligor, any other member of the Group or any of its advisers; or
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(iii) |
is known by the Lender before the date the information is disclosed to it by any Obligor, any other member of the Group or any of its advisers or is lawfully
obtained by the Lender after that date, from a source which is, as far as the Lender is aware, unconnected with any Obligor or any other member of the Group and which, in either case, as far as the Lender is aware, has not been obtained
in breach of, and is not otherwise subject to, any obligation of confidentiality.
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(a) |
a material disruption to those payment or communications systems or to those financial markets which are, in each case„ required to operate in order for payments to
be made in connection with the Loan (or otherwise in order for the transactions contemplated by the Finance’ Documents to be carried out) which disruption is not caused by. and is beyond the control of, any of the Parties; or
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(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:
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(i) |
from performing its payment obligations under the Finance Documents; or
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(ii) |
from communicating with other Parties in accordance with the terms of the Finanog Documents,
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(a) |
any release, emission, spill or discharge into a Vessel or into or upon the air, sea, land or soils (including the seabed) or surface water of Environmentally
Sensitive Material within or from a Vessel; or
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(b) |
any incident in which Environmentally Sensitive Material is released, emitted, spilled or discharged into or upon the air, sea, land or soils (including the seabed)
or surface water from a vessel other than a Vessel and which involves a collision between a Vessel and such other vessel or some other incident of navigation or operation, in either case, in connection with which a Vessel is actually or
potentially liable to be arrested, attached, detained or injuncted and/or a Vessel and/or any Obligor and/or any operator or manager of a Vessel is at fault or allegedly at fault or otherwise liable to any legal or administrative action;
or
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(c) |
any other incident in which Environmentally Sensitive Material is released, emitted, spilled or discharged into or upon the air, sea, land or soils (including the
seabed) or surface water otherwise than from a Vessel and in connection with which a Vessel is actually or potentially liable to be arrested and/or where any Obligor and/or any operator or manager of a Vessel is at fault or allegedly at
fault or otherwise liable to any legal or administrative action, other than in accordance with an Environmental Approval.
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(a) |
sections 1471 to 1474 of the Code or any associated regulations;
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(b) |
any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction,
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(c) |
any agreement pursuant to the implementation of any treaty, law or regulation referred to in (a) or (b) with the US Internal Revenue Service, the US government or
any government& or taxation authority in any other jurisdiction.
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(a) |
moneys borrowed and debit balances at banks or other financial institutons;
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(b) |
any acceptance under any acceptance credit or bill discounting facility (or dematerialised equivalent);
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(c) |
any note purchase facility or the issue of bonds„ notes, debentures, loan stock or any similar instrument°
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(d) |
the amount of any liability in respect of any finance or capital lease;
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(e) |
receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);
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(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 dose-out of that Treasury Transaction, that amount) shall be taken into account);
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(g) |
any counter-indemnity obligation in respect of a guarantee, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial
institution in respect of (i) an underlying liability of an entity which is not an Obligor which liability would fall within one of the other sections of this definition or (ii) any liabilities of any Obligor relating to any
post-retirement benefit scheme;
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(h) |
any amount raised by the issue of shares which are redeemable (other than at the option of the issuer) before the Termination Date or are otherwise classified as
borrowings under GAAP;
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(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 Page 7
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(j) |
any amount raised under any other transaction (including any forward sale or purchase, sale and sale back or sale and leaseback agreement) having the commercial
effect of a borrowing or otherwise classified as borrowings under GAAP; and
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(k) |
the amount of any liability in respect of any guarantee or indemnity for any of the Items referred to in (a) to (j).
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(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;
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(b) |
the time barring of claims under the Limitation Acts, the possibility that an undertaking to assume liability for or indemnify a person against non-payment of UK
stamp duty may be void and defences of set-off or counterclaim;
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(c) |
similar principles, rights and defences under the laws of any Relevant Jurisdiction; and any other matters which are set out as qualifications or reservations as to
matters of law of genera/ application in the Legal Opinions.
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(a) |
the applicable Screen Rate; or
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(b) |
(if (i) no Screen Rate is available for the currency of the Loan or (ii) no Screen Rate is available for the relevant Interest Period) the Reference Bank Rate,
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(a) |
it will remain the commercial or technical manager of that Vessel (as the case may be); and
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(b) |
it will not, without the prior written consent of the Lender, subcontract or delegate the commercial or technical management of that Vessel (as the case may be) to
any third party; and
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(c) |
the interests of the Managers in the Insurances (other than the right to be reimbursed for protection and indemnity claims under the “pay and be paid” rule) will be
assigned to the Lender with first priority; and
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(d) |
(following the occurrence of an Event of Default which is continuing) all claims of the Managers against a Borrower shall be subordinated to the claims of the
Lender under the Finance Documents.
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(a) |
in respect of the Kea Vesscl Loan, an amocirit up to the lesser of (i) $4,900,10100 and (li) 49.9% of the Market lilalue of Keg Vessell as evidenced by a Valuation
of that Vessel to be obtained pursuant to Schedule 1 Part I 2(f);
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(b) |
in respect of the Spetses Vessel Loan, an amount up to the lesser of (i) 4,100,000 and 00 49.9% of the Market Value of Spetses Vessel as evidenced by a Vaination of
that Vessel to be obtained pursuant to Schedule 1 Part I 2 (f); and
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(c) |
In respect of Hydra Veessel Loan, an amount up to the lesser of (i) $3,5002000 and (ii) 49.9% of the Market Value of Hydra Vessel as evidenced by a valuation of that Vessel to be obtained pursuant to Schedule
Part I 2 (f).
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(a) |
any Encumbrance created by the Finance Documents;
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(b) |
any netting or set-off arrangement entered into by any Obligor in the ordinary course of its banking arrangements for the purpose of netting debit and credit
balances;
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(c) |
liens for unpaid master’s and crew’s wages in accordance with first class ship ownership and management practice and not being enforced through arrest;
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(d) |
liens for salvage;
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(e) |
liens for master’s disbursements incurred in the ordinary course of trading in accordance with first class ship ownership and management practice and not being
enforced through arrest; and
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(f) |
any other lien arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of a Vessel:
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(I) |
not as a result of any default or omission by a Borrower; and
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(ii) |
not being enforced through arrest, provided such liens do not secure amounts more than 30 days overdue (unless the overdue amount is being contested
in good faith by appropriate steps).
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(a) |
its Original Jurisdiction;
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(b) |
any jurisdiction where any asset (other than a Vessel) subject to or intended to be subject to a Security Document to be executed by it is situated and, in relation
to a Vessel, the flag of that Vessel;
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(c) |
any jurisdiction where it conducts its business; and
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(a) |
imposed by any law or regulation of the US Department of the Treasury’s Office of Foreign Assets Control, the US Department of State , the United Nations Security
Council, the European Union, Her Majesty’s Treasury or the Hong Kong Monetary Authority, whether or not any Obligor or any other member of the Group or any Affiliate is legally bound to comply with the Forgoing; or
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(b) |
otherwise imposed by any law or regulation by which any Obligor, any other member of the Group or any Affiliate of any of them is bound or, as regards a regulation,
compliance with which is reasonable in the ordinary course of business of any Obligor, any other member of the Group or any Affiliate of any of them.
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(a) |
an actual, constructive, arranged, agreed or compromised total loss of a Vessel; or
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(b) |
the requisition for title or compulsory acquisition of a Vessel by any government or other competent authority (other than by way of requisition for hire); or
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(c) |
the capture, seizure, arrest, detention, hijacking, theft, condemnation as prize, confiscation or forfeiture of a Vessel (not falling within (b)), unless a Vessel
is released and returned to the possession of the relevant Borrower within 60 days after the capture, seizure, arrest, detention, hijacking, theft, condemnation as prize, confiscation or forfeiture in question.
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(a) |
an Obligor which is resident for tax purposes in the US; or
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(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.
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(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
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(b) |
any other tax of a similar nature, whether imposed in a member state of the European Union in substitution for, or levied in addition to, such tax referred to in
(a), or imposed elsewhere.
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1.2 |
Construction Unless a contrary indication appears, any reference in this Agreement to:
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1.2.1 |
the “Lender”, any “Borrower”, any “Secured Party” or any “Party” shall be
construed so as to include its successors in title permitted assignees and permitted transferees;
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1.2.2 |
a document in “agreed form" is a document which is
previously agreed in writing by or on behalf of the Borrowers and the Lender or, if not so agreed, is in the form specified by the Lender;
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1.2.3 |
“assets” includes present and future properties, revenues
and rights of every description;
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1.2.4 |
a “Finance Document”, a “Security Document”, a “Relevant Document” or any other document is a reference to that Finance Document, Security Document, Relevant Document or other document as amended, novated,
supplemented, extended or restated from time to time;
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1.2.5 |
“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;
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1.2.6 |
a "person includes any individual, firm, company,
corporation„ government state or agency of a state or any association, trust, joint venture, consortium or partnership or other entity (whether or not having separate legal personality);
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1.2.7 |
a “regulation” includes any regulation„ rule, official
directive, request or guideline (whether or not having the force, of law) of any governmental intergovernmental or supranational body, agency, department or of any regulatory, self-regulatory or other authority or organisation;
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1.2.8 |
a provision of law, is a reference to that provision as amended or re-enacted from time to time; and
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1.29 |
a time of day (unless otherwise specified) is a reference to London time.
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1.3 |
Headings Section, Clause and Schedule headings are for ease
of reference only.
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1.4 |
Defined terms Unless a contrary indication appears, a term
used in any other Finance Document or in any notice given under or in connection with any Finance Document has the same meaning in that Finance Document or notice as in this Agreement.
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1.5 |
Default A Default (and/or an Event of Default) is
“continuing” if it has not been remedied or waived.
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1.6 |
Currency symbols and definitions “$”, “USD” and “dollars” denote the lawful currency of the United States of America.
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1.7 |
Third party rights A person who is not a Party has no right
under the Contracts (Rights of Third Parties) Act 1999 (the “Third Parties Act”) to enforce or to enjoy the benefit of any term of this
Agreement.
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1.8 |
Offer letter This Agreement supersedes the terms and
conditions contained in any correspondence relating to the subject matter of this Agreement exchanged between the Lender and the Borrowers or their representatives before the date of this Agreement.
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1.9 |
Contractual recognition of bail-in
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1.9.1 |
In this Clause 1.9:
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(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
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(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.
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(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
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(b) |
in relation to any other applicable Bail-In Legislation:
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(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
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(ii) |
any similar or analogous powers under that Bail-In Legislation; and
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(c) |
in relation to any UK Bail-In Legislation:
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(i) |
any powers under that UK 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 UK Bail-In
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(ii) |
any similar or analogous powers under that UK Bail-In Legislation.
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1.9.2 |
Notwithstanding any other term of any Finance Document or any other agreement, arrangement or understanding between the Parties, each Party acknowledges and accepts
that any liability of any Party to any other Party under or in connection with the Finance Documents may be subject to Bail-In Action by the relevant Resolution Authority and acknowledges and accepts to be bound by the effect of:
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(a) |
any Bail-In Action in relation to any such liability, including (without limitation):
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(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;
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(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
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(iii) |
a cancellation of any such liability; and
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(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.
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Section 2 |
The Loan
|
2 |
The Loan
|
3 |
Purpose
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3.1 |
Purpose The Borrowers shall apply the Loan for the purposes referred to in Preliminary (B).
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3.2 |
Monitoring The Lender shall not be bound to monitor or
verify the application of any amount borrowed under this Agreement.
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4 |
Conditions of Utilisation
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4.1 |
Initial conditions precedent
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4.2 |
Further conditions precedent
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4.2.1 |
The Lender will only be obliged to advance a Vessel Loan if on the date of the relevant Utilisation Request and on the proposed Utilisation Date:
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(a) |
no Default is continuing or would result from the advance of that Vessel Loan;
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(b) |
the representations made by the Borrowers under Clause 18 (Representations) are true in all material respects; and
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(c) |
no event or series of events has occurred which is likely to have a Material Adverse Effect.
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4.2.2 |
The Lender will only be obliged to advance a Vessel Loan if:
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(a) |
that Vessel Loan will not be in excess of the relevant Maximum Vessel Loan Amount; and
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(b) |
that Vessel Loan will not increase the Loan to a sum in excess of the Maximum Loan Amount.
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4.3 |
Conditions subsequent The Borrowers undertake to deliver or
to cause to be delivered to the Lender within 14 days after the relevant Utilisation Date the
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4.4 |
No waiver If the Lender in its sole
discretion agrees to advance a Vessel Loan to the Borrowers before all of the documents and evidence required by Clause 4.1 (Initial
conditions precedent) have been delivered to or to the order of the Lender, the Borrowers undertake to deliver all outstanding documents and evidence to or to the order of the Lender no later than 30 days after the relevant
Utilisation Date or such other date specified by the Lender.
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4.5 |
Form and content Al! documents and evidence
delivered to the Lender under this Clause shall:
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4.5.1 |
be in form and substance acceptable to the Lender; and
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4.5.2 |
if required by the Lender, be certified, notarised, legalised or attested in a manner acceptable to the Lender.
|
Section 3 |
Utilisation
|
5 |
Advance
|
5.1 |
Delivery of an Utilisation Request The
Borrower may request a Vessel Loan to be advanced by delivery to the Lender of a duly completed Utilisation Request not more than ten and not fewer than three Business Days before the proposed Utilisation Date.
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5.2 |
Completion of an Utilisation Request An
Utilisation Request is irrevocable and will not be regarded as having been duly completed unless:
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5.2.1 |
it is signed by an authorised signatory of each Borrower;
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5.2.2 |
the proposed Utilisation Date is a Business Day within the Availability Period; and
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5.2.3 |
the proposed Interest Period complies with Clause 9 (Interest Periods).
|
5.3 |
Lender’s compliance with an Utilisation Request
Subject to Clauses 2 (The Loan), 3 (Purpose)
and 4 (Conditions of Utilisation), the Lender shall comply with an Utilisation Request by advancing the relevant Vessel Loan
through the Facility Office.
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5.4 |
Cancellation of undrawn amount The
availability of the Loan shall be cancelled at the end of the Availability Period to the extent that it is undrawn at that time.
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Section 4 |
Repayment, Prepayment and Cancellation
|
6 |
Repayment
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6.1 |
Repayment of Vessel Loans The Borrowers agree
to repay each Vessel Loan to the Lender as follows:
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6.1.1 |
the Kea Vessel Loan, by 14 equal quarterly instalments, the first 13 (15t to 13th) such instalments each in the amount of
$120,000 and the 14th and final such instalment in the sum of $3,340,000, comprising of an instalment of $120,000 and a balloon payment in the amount of $3,220,000 (the “Kea Balloon”), the first instalment falling due on the date which is three calendar months after the Utilisation Date in respect of Kea Vessel Loan and subsequent instalments falling
due at consecutive intervals of three calendar months thereafter and the 14th and final instalment falling due not later the Termination Date;
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6.1.2 |
the Spetses Vessel Loan, by 14 equal quarterly instalments, the first 13 (15t to 13th) such instalments each in the amount of $200,000
and the 14th and final such instalment in the sum of $1,500,000, comprising of an instalment of $200,000 and a balloon payment in the amount of $1,300,000 (the “Spetses Balloon”), the first instalment falling due on the date which is three calendar months after the Utilisation Date in respect of Spetses Vessel Loan and subsequent instalments falling due
at consecutive intervals of three calendar months thereafter and the 14th and final instalment falling due not later the Termination Date; and
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6.1.3 |
the Hydra Vessel Loan, by 14 equal quarterly instalments, the first 13 (1st to 13th) such instalments each in the amount of
$130,000 and the 14th and final such instalment in the sum of $1,810,000, comprising of an instalment of $130,000 and a balloon payment in the amount of $1,680,000 (the “Hydra Balloon” and together with the Kea Balloon and the Spetses Balloon, the “Balloons”
and each a “Balloon), the first instalment falling due on the date which is three calendar months after the Utilisation Date in respect
of Hydra Vessel Loan and subsequent instalments falling due at consecutive intervals of three calendar months thereafter and the 14th and final instalment falling due not later the Termination Date.
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6.2 |
Reduction of Repayment Instalments If the
aggregate amount advanced to the Borrowers is less than:
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6.2.1 |
$4,900,000 in respect of Kea Vessel;
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6.2.2 |
$4,100,000 in respect of Spetses Vessel; or
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6.2.3 |
$3,500,000 in respect of Hydra Vessel,
|
6.3 |
Reborrowing The Borrowers may not reborrow
any part of a Vessel Loan which is repaid or prepaid.
|
7 |
Illegality, Prepayment and Cancellation
|
7.1 |
Illegality If it becomes unlawful in any
jurisdiction (other than by reason of Sanctions) for the Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain the Loan or it becomes unlawful for any Affiliate of the Lender for the Lender to
do so:
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7.1.1 |
the Lender shall promptly notify the Borrowers upon becoming aware of that event;
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7.1.2 |
upon the Lender notifying the Borrowers, the availability of the Loan will be Immediately cancelled; and
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7.1.3 |
the Borrowers shall repay each Vessel Loan on the last day of its current Interest Period or, if earlier, the date specified by the Lender in the
notice delivered to the Borrowers (being no earlier than the last day of any applicable grace period permitted by law).
|
7.2 |
Voluntary cancellation The Borrowers may, if
it gives the Lender not less than 14 Business Days’ (or such shorter period as the Lender may agree) prior notice, cancel the whole or any part (being a minimum amount of $200,000) of the undrawn amount of a Vessel Loan.
|
7.3 |
Voluntary prepayment of Loan The Borrowers
may prepay the whole or any part of the Loan freely and without penalty on the final day of an Interest Period (but, if in part, being an amount that reduces a Vessel Loan by an amount which is an integral multiple of (a) $120,000 in
respect of Kea Vessel Loan, (b) $200,000 in respect of Spetses Vessel Loan or (c) $130,000 in respect of Hydra Vessel Loan, subject as follows:
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|
7.3.1 |
they give the Lender not less than five Business Days’ (or such shorter period as the Lender may agree) prior notice;
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7.3.2 |
the Loan may only be prepaid after the last day of the Availability Period; and
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7.3.3 |
any prepayment under this Clause 7.3 shall satisfy the obligations under Clause 6.1 (Repayment of Vessel Loans) by reducing the amount of the repayment instalments (i) on a pro rata basis in respect of each Vessel Loan and (ii) within each Vessel Loan, on a pro rata basis
including the relevant Balloon.
|
7.4 |
Right of cancellation and prepayment
|
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(a) |
any sum payable to the Lender by the Borrowers is required to be
increased under Clause 12.2.2 (Tax gross-up); or
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(b) |
the Lender claims indemnification from the Borrowers under Clause 12.3 (Tax indemnity) or Clause 13.1 (Increased costs);
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|
7.4.2 |
On the last day of the Interest Period, in respect of each Vessel Loan, which ends after the Borrowers have given notice under Clause 7.4.1 (or, if earlier, the
date specified by the Borrowers in that notice), the Borrowers shall repay that Vessel Loan together with all interest and other amounts accrued under the Finance Documents.
|
7.5 |
Mandatory prepayment on sale or Total Loss If
a Vessel is sold by a Borrower or becomes a Total Loss, the Borrowers shall, simultaneously with any such sale or on the earlier of the date falling 120 days after any such Total Loss and the date on which the proceeds of any such Total
Loss are realised, make a prepayment of the Loan in an amount equivalent to the aggregate of (a) the full outstanding amount in respect of the Vessel Loan relevant to that Vessel and (b) any additional amount in respect of the remaining
Vessel Loans as may be required to ensure that the VTL Coverage in respect of the remaining Vessels is fully complied with following such sale or Total Loss.
|
7.6 |
Mandatory prepayment on change of ownership of Guarantor
|
|
7.6.1 |
If, without the prior written consent of the Lender (such consent not be unreasonably withheld), there is a Change of Control, the Borrowers shall
promptly notify the Lender upon becoming aware of that event and, if the Lender so requires, the Lender shall, by no less than 10 days’ notice to the Borrowers declare the Loan, together with accrued interest and ail other amounts accrued
under the Finance Documents immediately due and payable, whereupon the Loan and all such outstanding interest and amounts will become immediately due and payable provided that in the case of Clause 7.6.2 (b) below, the Borrowers will first have the option to rectify the Security Cover Ratio within 15 Business Days.
|
|
7.6.2 |
For the purpose of paragraph (a) above, “Change of
Control” means:
|
|
(a) |
the members of the Nominated Family cease to own directly or indirectly more than 10% of the shares (and the voting rights attaching to those
shares) in the Guarantor; or
|
|
(b) |
the members of the Nominated Family own directly or indirectly between 10.1% to 19.9%, (inclusive) of the shares (and the voting rights attaching to
those shares) in the Guarantor and the Security Cover Ratio is equal to or less than 143% of the Loan.
|
|
7.6.3 |
The Borrowers shall (and shall procure that the Guarantor shall) promptly notify the Lender of any covenants regarding the Change of Control of the
Guarantor agreed with its financiers and if the Lender (acting reasonably) considers that those terms agreed with any other financiers are more favourable than those set out in this Clause 7.6, then the Borrowers shall (and shall procure
that the Guarantor shall) provide amended terms on
|
7.7 |
Restrictions Any notice of prepayment or cancellation given
under this Clause 7 shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date or dates upon which the relevant prepayment or cancellation is to be made and the amount of that prepayment or
cancellation.
|
Section 5 |
Costs of Utilisation
|
8 |
Interest
|
8.1 |
Calculation of interest The rate of interest
on each Vessel Loan for each Interest Period is the percentage rate per annum which is the aggregate of the applicable:
|
|
8.1.1 |
Margin; and
|
|
8.1.2 |
LIBOR.
|
8.2 |
Payment of interest The Borrowers shall pay
accrued Interest on each Vessel Loan on the last day of each Interest Period (and, if the Interest Period is longer than three (3) months, on the dates falling at three (3) monthly intervals after the first day of the Interest Period).
|
8.3 |
Default Interest In the event of a failure by
the Borrowers to pay any amount on the date on which such amount is due and payable pursuant to this Agreement and/or any of the other Finance Documents (unless otherwise specifically provided in any Finance Document) and irrespective of
any notice by the Lender or any other person to the Borrowers in respect of such failure, the Borrowers shall pay interest at the rate of two per cent (2%) higher than the rate provided under Clause 8.2 (Payment of Interest) up to the date of actual payment (both before and after judgment), compounded at such intervals as the Lender shall in its discretion
determine. Any Interest accruing under this Clause 8.3 (Default Interest) in respect of an unpaid amount shall be compounded with
the overdue amount at the end of each Interest Period applicable to that overdue amount and shall be due and payable at the end of the period by reference to which it is calculated or such other date or dates as the Lender may specify by
written notice to the Borrowers.
|
8.4 |
Notification of rates of interest The Lender
shall promptly notify the Borrowers of the determination of a rate of interest under this Agreement.
|
9 |
Interest Periods
|
9.1 |
Selection of Interest Periods The Borrowers
may select in a written notice to the Lender the duration of an Interest Period for each Vessel Loan subject as follows:
|
|
9.1.1 |
each notice is irrevocable and must be delivered to the Lender by the Borrowers not later than 11.00 a.m. on the Quotation Day;
|
|
9.1.2 |
if the Borrowers fail to give a notice in accordance with Clause 9.1.1, the relevant Interest Period will, subject to Clauses 9.2 (Second and subsequent Vessel Loans) 9.3, (Interest Periods to meet Repayment Dates) and 9.4 (Non-Business Days), be three (3) months;
|
|
9.1.3 |
subject to this Clause 9, the Borrowers may select an Interest Period of three (3), or six (6) or twelve (12) months or any other period agreed
between the Borrowers and the Lender;
|
|
9.1.4 |
an Interest Period shall not extend beyond the Termination Date; and
|
|
9.1.5 |
each Interest Period shall start on the Utilisation Date in respect of the first Vessel Loan or (if the first Vessel Loan is already made) on the
last day of
|
9.2 |
Second and subsequent Vessel Loans If the
second or any subsequent Vessel Loan is made otherwise than on the first day of an Interest Period for the balance of the Loan, there shall be a separate initial Interest Period for that Vessel Loan commencing on its Utilisation Date and
expiring on the final date of the current Interest Period for the balance of the Loan.
|
9.3 |
Interest Periods to meet Repayment Dates If
an Interest Period will expire after the next Repayment Date in respect of the relevant Vessel Loan, there shall be a separate Interest Period for a part of that Vessel Loan equal to the Repayment Instalment due on that next Repayment
Date and that separate Interest Period shall expire on that next Repayment Date.
|
9.4 |
Non-Business Days If an Interest Period
would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).
|
10 |
Changes to the Calculation of Interest
|
10.1 |
Absence of quotations Subject to Clause 10.2
(Market disruption), if LIBOR is to be determined by reference to the Reference Banks but a Reference Bank does not supply a
quotation by 11.00 am on the Quotation Day, the applicable LIBOR shall be determined on the basis of the quotations of the remaining Reference Banks.
|
10.2 |
Market disruption If a Market Disruption
Event occurs for any Interest Period, then the rate of interest on the Loan for that Interest Period shall be the percentage rate per annum which is the sum of:
|
|
10.2.1 |
the Margin; and
|
|
10.2.2 |
the rate notified to the Borrowers by the Lender as soon as practicable, and in any event by close of business on the date falling three (3)
Business Days after the Quotation Day (or, if earlier, on the date falling three (3) Business Days prior to the date on which interest is due to be paid in respect of that Interest Period), to be that which expresses as a percentage rate
per annum the cost to the Lender of funding the Loan from whatever source it may reasonably select.
|
|
(a) |
at or about noon on the Quotation Day for the relevant Interest Period LIBOR is to be determined by reference to the Reference Banks and none or
only one of the Reference Banks supplies a rate to the Lender to determine LIBOR for dollars and the relevant Interest Period; or
|
|
(b) |
before close of business in London on the Quotation Day for the relevant Interest Period, the Borrowers receive notification from the Lender that
the
|
10.3 |
Alternative basis of interest or funding
|
|
10.3.1 |
If a Market Disruption Event occurs and the Lender or the Borrowers so requires, the Lender and the Borrowers shall enter into negotiations (for a
period of not more than thirty (30) days) with a view to agreeing a substitute basis for determining the rate of interest.
|
|
10.3.2 |
Any alternative basis agreed pursuant to Clause 10.3.1 shall be binding on all Parties.
|
10.4 |
Break Costs The Borrowers shall, within three
Business Days of demand by the Lender, pay to the Lender its Break Costs attributable to all or any part of the Loan or Unpaid Sum being paid by the Borrowers on a day other than the last day of an Interest Period for the Loan, that
Vessel Loan or Unpaid Sum.
|
11 |
Fees
|
11.1 |
Commitment Fee The Borrowers shall pay to the
Lender a fee computed at the rate of zero point five per cent (0.50/0) per annum on the undrawn amount of the Loan for the period commencing on the date of this Agreement and ending on the earlier to occur of (a) the last day
of the Availability Period and (b) the relevant Utilisation Date in respect of the last Vessel Loan to be drawn.
|
11.2 |
Arrangement fee The Borrowers shall pay to
the Lender on the relevant Utilisation Date in respect of a Vessel Loan an arrangement fee in an amount equal to zero point five per cent (0.5%) of the final amount to be advanced to the Borrowers in respect of that Vessel Loan by the
Lender under this Agreement.
|
Section 6 |
Additional Payment Obligations
|
12 |
Tax Gross Up and Indemnities
|
12.1 |
Definitions In this Agreement:
|
|
(a) |
is a bank (as defined for the purpose of section 879 of the ITA) making an advance under a Finance Document and is within the charge to United
Kingdom corporation tax as respects any payments of interest made in respect of that advance or would be within such charge as respects such payments apart from section 18A of the CTA; or in respect of an advance made under a Finance
Document by a person that was a bank (as defined for the purpose of section 879 of the ITA) at the time that that advance was made and within the charge to United Kingdom corporation tax as respects any payments of interest made in
respect of that advance; or
|
|
(b) |
is:
|
|
(i) |
a company resident in the United Kingdom for United Kingdom tax purposes;
|
|
(ii) |
a partnership each member of which is:
|
|
(A) |
a company so resident in the United Kingdom; or
|
|
(B) |
a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings
into account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or (iii)a company not
so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the
meaning of section 19 of the CTA) of that company; or
|
|
(c) |
is a Treaty Lender.
|
|
(a) |
a company resident in the United Kingdom for United Kingdom tax purposes;
|
|
(b) |
a partnership each member of which is:
|
|
(i) |
a company so resident in the United Kingdom; or
|
|
(ii) |
a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings
into account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or
|
|
(c) |
a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings
into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company.
|
|
(a) |
is treated as a resident of a Treaty State for the purposes of the Treaty;
|
|
(b) |
does not carry on a business in the United Kingdom through a permanent establishment with which the Loan is effectively connected.
|
12.2 |
Tax gross-up Each Borrower shall (and shall
procure that each other Obligor shall) make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law, subject as follows:
|
|
12.2.1 |
the Borrowers shall promptly upon becoming aware that any Obligor must make a Tax Deduction (or that there is any change in the rate or the basis of
a Tax Deduction) notify the Lender accordingly. Similarly, the Lender shall notify the Borrowers and any such other Obligor on becoming so aware in respect of a payment payable to the Lender;
|
|
12.2.2 |
if a Tax Deduction is required by law to be made by a Borrower or any other Obligor, the amount of the payment due from the Borrowers or that other
Obligor shall be increased to an amount which (after making any Tax
|
|
12.2.3 |
a payment shall not be increased under Clause 12.2.2 by reason of a Tax Deduction on account of Tax imposed by the United Kingdom, if on the date on
which the payment falls due:
|
|
(a) |
the payment could have been made to the Lender without a Tax Deduction if the Lender had been a Qualifying Lender, but on that date the Lender is not or has ceased
to be a Qualifying Lender other than as a result of any change after the date it became a Lender under this Agreement in (or in the interpretation, administration, or application of) any law or Treaty or any published practice or
published concession of any relevant taxing authority; or
|
|
(b) |
the Lender is a Qualifying Lender solely by virtue of (b) of the definition of Qualifying Lender and:
|
|
(i) |
an officer of H.M. Revenue & Customs has given (and not revoked) a direction (a “Direction”) under section 931 of the ITA which relates to the payment and that
Lender has received from the Borrowers or from any other Obligor making the payment a certified copy of that Direction; and
|
|
(ii) |
the payment could have been made to the Lender without any Tax Deduction if that Direction had not been made; or
|
|
(c) |
the Lender is a Qualifying Lender solely by virtue of (b) of the definition of Qualifying Lender and:
|
|
(i) |
the Lender has not given a Tax Confirmation to the Borrowers; and
|
|
(ii) |
the payment could have been made to the Lender without any Tax Deduction if the Lender had given a Tax Confirmation to the Borrowers, on the basis that the Tax
Confirmation would have enabled the Borrowers to have formed a reasonable belief that the payment was an “excepted payment” for the purpose of section 930 of the ITA; or
|
|
(d) |
the Lender is a Treaty Lender and a Borrower or the other Obligor making the payment is able to demonstrate that the payment could have been made to the Lender
without the Tax Deduction had the Lender complied with its obligations under Clause 12.2.6;
|
|
12.2.4 |
if a Borrower or any other Obligor is required to make a Tax Deduction, the Borrowers shall (and shall procure that such other 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;
|
|
12.2.5 |
within thirty (30) days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Borrowers shall (and
shall procure that such other Obligor shall) deliver to the Lender a statement under section 975 of the ITA or other evidence reasonably satisfactory to the Lender that the Tax Deduction has been made or (as applicable) any appropriate
payment paid to the relevant taxing authority;
|
|
12.2.6 | (a) | Subject to (b), if the Lender is a Treaty Lender, the Lender and the Borrowers shall co-operate (and the Borrowers shall procure that each other Obligor which makes a payment to which that Treaty Lender is entitled will co-operate) in completing any procedural formalities necessary for that Borrower or that other Obligor to obtain authorisation to make that payment without a Tax Deduction. |
|
(b) |
If the Lender is a Treaty Lender which holds a passport under the HMRC DT Treaty Passport scheme, and which wishes that scheme to apply to this Agreement, the
Lender shall confirm its scheme reference number and its jurisdiction of tax residence to the Borrowers, and, having done so, the Lender shall be under no obligation pursuant to (a).
|
12.3 |
Tax indemnity
|
|
12.3.1 |
The Borrowers shall (within three (3) Business Days of demand by the Lender) pay to the Lender, if the Lender is a Protected Party, an amount equal
to the loss, liability or cost which the Lender determines will be or has been (directly or indirectly) suffered for or on account of Tax by the Lender in respect of a Finance Document.
|
|
12.3.2 |
Clause 12.3.1 shall not apply:
|
|
(a) |
with respect to any Tax assessed on the Lender:
|
|
(i) |
under the law of the jurisdiction in which the Lender is incorporated or, if different, the jurisdiction (or jurisdictions) in which the Lender is treated as
resident for tax purposes; or
|
|
(ii) |
under the law of the jurisdiction in which the Facility Office is located in respect of amounts received or receivable in that jurisdiction, if that Tax is imposed
on or calculated by reference to the net income received or receivable (but not any sum deemed to be received or receivable) by the Lender; or
|
|
(b) |
to the extent a loss, liability or cost:
|
|
(i) |
is compensated for by an increased payment under Clause 12.2 (Tax
gross-up);
|
|
(ii) |
would have been compensated for by an increased payment under Clause 12.2 (Tax gross-up) but was not so
|
|
(iii) |
relates to a FATCA Deduction required to be made by a Party.
|
|
12.3.3 |
If the Lender makes or intends to make a claim under Clause 12.3.1 as a Protected Party, the Lender shall promptly notify the Borrowers of the event
which will give, or has given, rise to the claim.
|
12.4 |
Tax Credit If a Borrower or any other
Obligor makes a Tax Payment and the Lender determines that:
|
|
12.4.1 |
a Tax Credit is attributable to an increased payment of which that Tax Payment forms part, to that Tax Payment or to a Tax Deduction in consequence
of which that Tax Payment was required; and
|
|
12.4.2 |
the Lender has obtained and utilised that Tax Credit, the Lender shall pay an amount to the Borrowers or to that other Obligor which the Lender
determines will leave it (after that payment) in the same after-Tax position as it would have been in had the Tax Payment not been made by the Borrowers or that other Obligor.
|
12.5 |
Stamp taxes The Borrowers shall pay and,
within five Business Days of written demand, indemnify the Lender against any cost, loss or liability the Lender incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of any Finance Document.
|
12.6 |
VAT
|
|
12.6.1 |
All amounts expressed to be payable under a Finance Document by any Obligor to the Lender 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, if VAT is or becomes chargeable on any supply made by the Lender to any Obligor under a Finance Document and the
Lender is required to account to the relevant tax authority for the VAT, that Obligor must pay to the Lender (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 the Lender must promptly provide an appropriate VAT invoice to the Borrowers).
|
|
12.6.2 |
Where a Finance Document requires any Obligor to reimburse or indemnify the Lender for any cost or expense, that Obligor shall reimburse or
indemnify (as the case may be) the Lender for the full amount of such cost or expense, including such part thereof as represents VAT, save to the extent that the Lender reasonably determines that it is entitled to credit or repayment in
respect of such VAT from the relevant tax authority.
|
|
12.6.3 |
Any reference in this Clause 12.6 to any Obligor shall, at any time when such Obligor 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
|
|
12.6.4 |
In relation to any supply made by the Lender to any Obligor under a Finance Document, if reasonably requested by the Lender, that Obligor must
promptly provide the Lender with details of that Obligor’s VAT registration and such other information as is reasonably requested in connection with the Lender’s VAT reporting requirements in relation to such supply.
|
12.7 |
FATCA information
|
|
12.7.1 |
Subject to Clause 12.7.3, each Party shall, within ten (10) Business Days of a reasonable request by another Party:
|
|
(a) |
confirm to that other Party whether it is:
|
|
(i) |
a FATCA Exempt Party; or
|
|
(ii) |
not a FATCA Exempt Party; and
|
|
(b) |
supply to that other Party such forms, documentation and other information relating to its status under FATCA as that other Party reasonably requests for the
purposes of that other Party’s compliance with FATCA; and
|
|
(c) |
supply to that other Party such forms, documentation and other information relating to its status as that other Party reasonably requests for the purposes of that
other Party’s compliance with any other law, regulation, or exchange of information regime.
|
|
12.7.2 |
If a Party confirms to another Party pursuant to Clause 12.7.1(a)(i) that it is a FATCA Exempt Party and it subsequently becomes aware that it is
not, or has ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly.
|
|
12.7.3 |
Clause 12.7.1 shall not oblige the Lender to do anything, and Clause (c) shall not oblige any other Party to do anything, which would or might in
its reasonable opinion constitute a breach of:
|
|
(a) |
any law or regulation;
|
|
(b) |
any fiduciary duty; or
|
|
(c) |
any duty of confidentiality.
|
|
12.7.4 |
If a Party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance
with Clause(a) or (b) (including, for the avoidance of doubt, where Clause 12.7.3 applies), then such Party shall be treated for the purposes of the Finance Documents (and payments under them) as if it is not a FATCA Exempt Party until
such time as the Party in question provides the requested confirmation, forms, documentation or other information.
|
|
12.7.5 |
If a Borrower is a US Tax Obligor or the Lender reasonably believes that its obligations under FATCA or any other applicable law or regulation
require it, the Lender shall, within ten Business Days of:
|
|
(a) |
where a Borrower is a US Tax Obligor, the date of this Agreement; or
|
|
(b) |
where a Borrower is not a US Tax Obligor, the date of a request from that Borrower, supply to the Borrowers:
|
|
(i) |
a withholding certificate on Form W-8 or Form W-9 or any other relevant form; or
|
|
(ii) |
any withholding statement or other document, authorisation or waiver as the Borrowers may require to certify or establish the status of the Lender under FATCA or
that other law or regulation.
|
|
12.7.6 |
If any withholding certificate, withholding statement, document, authorisation or waiver provided to the Borrowers by the Lender pursuant to Clause
12.7.5 is or becomes materially inaccurate or incomplete, the Lender shall promptly update it and provide such updated withholding certificate, withholding statement, document, authorisation or waiver to the Borrowers unless it is
unlawful for the Lender to do so (in which case the Lender shall promptly notify the Borrowers).
|
12.8 |
FATCA Deduction
|
|
12.8.1 |
Each Party may make any FATCA Deduction it is required to make by FATCA, and any payment required in connection with that FATCA Deduction, and no
Party shall be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction.
|
|
12.8.2 |
Each Party shall promptly, upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate or the basis of such
FATCA Deduction) notify the Party to whom it is making the payment.
|
13 |
Increased Costs
|
13.1 |
Increased costs Subject to Clause 13.3 (Exceptions) the Borrowers shall, within five Business Days of a demand by the Lender, pay to the Lender the amount of any Increased
Costs incurred by the Lender or any of its Affiliates as a result of (i) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation or (ii) compliance with any law or regulation
or any request from or requirement of any central bank or other fiscal, monetary or other authority made after the date of this Agreement (including Basel III (as defined in Clause 13.3) and any other which relates to capital adequacy or
liquidity controls or which affects the manner in which the Lender allocates capital resources to obligations under this Agreement or (iii) any change in the risk weight allocated by the Lender to the Borrowers after the date of this
Agreement.
|
|
(a) |
a reduction in the rate of return from the Loan or on the Lender’s (or its Affiliate’s) overall capital;
|
|
(b) |
an additional or increased cost; or
|
|
(c) |
a reduction of any amount due and payable under any Finance Document, which is incurred or suffered by the Lender or any of its Affiliates as a result of the events
referred to in Clause 13.1 to the extent that it is attributable to the Lender having entered into any Finance Document or funding or performing its obligations under any Finance Document.
|
13.2 |
Increased cost claims
|
|
13.2.1 |
If the Lender intends to make a claim pursuant to Clause 13.1
(Increased costs) the Lender shall promptly notify the Borrowers of the event giving rise to the claim.
|
|
13.22 |
The Lender shall, as soon as practicable after a demand by the Borrowers, provide a certificate confirming the amount of its Increased Costs.
|
13.3 |
Exceptions Clause 13.1 (Increased costs) does not apply to the extent any Increased
Cost is:
|
|
13.3.1 |
attributable to a Tax Deduction required by law to be made by the Borrowers;
|
|
13.3.2 |
attributable to a FATCA Deduction required to be made by a Party;
|
|
13.3.3 |
compensated for by Clause 12.3 (Tax indemnity) (or would have been compensated for under Clause 12.3 but was not so compensated solely because any of the exclusions
in Clause 12.3 applied); or
|
14 |
Other Indemnities
|
14.1 |
Currency indemnity If any sum due from a Borrower under the Finance Documents (a “Sum”), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency
(the “First Currency”) in which that Sum is payable into another currency (the “Second Currency”) for the purpose of:
|
|
14.1.1 |
making or filing a claim or proof against that Borrower, or
|
|
14.1.2 |
obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,
|
14.2 |
Other indemnities
|
|
14.2.1 |
The Borrowers shall, within five Business Days of demand, indemnify the Lender against any cost, loss or liability incurred by the Lender as a
result of:
|
|
(a) |
the occurrence of any Event of Default which is continuing;
|
|
(b) |
a failure by an Obligor to pay any amount due under a Finance Document on its due date;
|
|
(c) |
funding, or making arrangements to fund, a Vessel Loan following delivery by the Borrowers of an Utilisation Request but that Vessel Loan not being advanced 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 the Lender alone); or
|
|
(d) |
the Loan (or part of the Loan) not being prepaid in accordance with a notice of prepayment given by the Borrowers.
|
|
14.2.2 |
The Borrowers shall promptly indemnify the Lender, each Affiliate of the Lender and each officer or employee of the Lender or its Affiliate (each
such person for the purposes of this Clause 14.2 an “Indemnified Person”) against any cost, loss or liability incurred by that Indemnified Person pursuant to or in connection with any litigation, arbitration or administrative proceedings or regulatory enquiry, in
connection with or arising out of the entry into and the transactions contemplated by the Finance Documents, having the benefit of any Encumbrance constituted by the Finance Documents or which relates to the condition or operation of, or
any incident occurring in relation to, a Vessel, unless such cost, loss or liability is caused by the gross negligence or wilful misconduct of that Indemnified Person.
|
|
14.2.3 |
Subject to any limitations set out in Clause 14.2.2, the indemnity in that Clause shall cover any cost, loss or liability incurred by each
Indemnified Person in any jurisdiction:
|
|
(a) |
arising or asserted under or in connection with any law relating to safety at sea, the ISM Code, any Environmental Law or any Sanctions; or
|
|
(b) |
in connection with any Environmental Claim.
|
|
14.2.4 |
The Borrowers shall promptly indemnify the Lender as holder of any of the Security Documents and every Receiver and Delegate against any cost, loss
or liability incurred by any of them as a result of:
|
|
(a) |
any failure by the Borrowers to comply with its obligations under Clause 16 (Costs and Expenses);
|
|
(b) |
acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised;
|
|
(c) |
the taking, holding, protection or enforcement of the Security Documents;
|
|
(d) |
the exercise of any of the rights, powers, discretions, authorities and remedies vested in the Lender and each Receiver and Delegate by the Finance Documents or by
law;
|
|
(e) |
any default by any Obligor in the performance of any of the obligations expressed to be assumed by it in the Finance Documents to which it is a party; or
|
|
(f) |
acting as holder of any of the Security Documents, Receiver or Delegate or otherwise relating to any of the Charged Property (otherwise, in each case, than by
reason of the relevant Lender’s, Receiver’s or Delegate’s gross negligence or wilful misconduct).
|
14.3 |
Indemnity survival The indemnities contained
in this Agreement shall survive repayment of the Loan.
|
15 |
Mitigation by the Lender
|
15.1 |
Mitigation The Lender shall, in consultation
with the Borrowers, take all reasonable steps to mitigate any circumstances which arise and which would result in the Loan ceasing to be available or any amount becoming payable under or pursuant to any of Clause 7.1 (Illegality), Clause 12 (Tax Gross Up
and Indemnities) or Clause 13 (Increased Costs) including (but not limited to) transferring its rights and obligations under
the Finance Documents to another Affiliate or Facility Office. The above does not in any way limit the obligations of any Obligor under the Finance Documents.
|
15.2 |
Limitation of liability The Borrowers shall
promptly indemnify the Lender for all costs and expenses reasonably incurred by the Lender as a result of steps taken by it under Clause 15.1 (Mitigation). The Lender is not obliged to take any steps under Clause 15.1 if, in its opinion (acting reasonably), to do so might be prejudicial to it.
|
16 |
Costs and Expenses
|
16.1 |
Transaction expenses The Borrowers shall on
demand and in any event by not later than thirty (30) days following such demand, pay the Lender the amount of all costs and expenses (including, without limitation, all agreed legal fees, VAT, disbursements and correspondent lawyers’
fees provided that the demand for payment is accompanied by the respective invoice) reasonably incurred by any of them in connection with the negotiation, preparation, printing, execution, syndication and perfection of:
|
|
16.1.1 |
this Agreement and any other documents referred to in this Agreement;
|
|
16.1.2 |
any other Finance Documents executed after the date of this Agreement;
|
|
16.1.3 |
any other document which may at any time be required by the Lender to give effect to any Finance Document or which the Lender is entitled to call
for or obtain under any Finance Document (including, without limitation, any valuation of a Vessel and a Fleet Vessel, subject to Clause 17.15); and
|
|
16.1.4 |
any discharge, release or reassignment of any of the Security Documents.
|
16.2 |
Amendment costs If an Obligor requests an
amendment, waiver or consent, the Borrowers shall, within three Business Days of demand, reimburse the Lender for the amount of all costs and expenses (including legal fees and currency exchange costs) reasonably incurred by the Lender
and any Receiver or Delegate in responding to, evaluating, negotiating or complying with that request or requirement provided that no sum shall be payable under this Clause if the relevant request for an amendment, notice, waiver or
consent are rejected by the Lender and/or are not granted.
|
16.3 |
Enforcement and preservation costs The
Borrowers shall, within three Business Days of written demand, pay to the Lender and each other Secured Party the amount of all costs and expenses (including legal fees) incurred by the Lender and that other Secured Party in connection
with the enforcement of, or the preservation of any rights under, any Finance Document and any proceedings instituted by or against the Lender as a consequence of taking or holding the Security Documents or enforcing those rights
including (without limitation) any losses, costs and expenses which the Lender or that other Secured Party may from time to time sustain, incur or become liable for by reason of the Lender or that other Secured Party being mortgagee of a
Vessel and/or a lender to a Borrower, or by reason of the Lender or that other Secured Party being deemed by any court or authority to be an operator or controller, or in any way concerned in the operation or control, of a Vessel.
|
16.4 |
Other costs The Borrowers shall, within
three Business Days of written demand, pay to the Lender and each other Secured Party the amount of all sums which the Lender or that other Secured Party may pay or become actually or contingently liable for on account of a Borrower in
connection with a Vessel (whether alone or jointly or jointly and severally with any other person) including (without limitation) all sums which the Lender or that other Secured Party may pay or guarantees which it may give in respect of
the Insurances, any expenses incurred by the Lender or that other Secured Party in connection with the maintenance or repair of a Vessel or in discharging any lien, bond or other claim relating in any way to a Vessel, and any sums which
the Lender or that other Secured Party may pay or guarantees which it may give to procure the release of a Vessel from arrest or detention.
|
Section 7 |
Security and Application of Moneys
|
17 |
Security Documents and Application of Moneys
|
17.1 |
Security Documents As security for the
payment of the Indebtedness, the Borrowers shall execute and deliver to the Lender or cause to be executed and delivered to the Lender the following documents in such forms and containing such terms and conditions as the Lender shall
require:
|
|
17.1.1 |
first preferred mortgages over the Vessels;
|
|
17.1.2 |
first priority deed or deeds of assignment of the Insurances, Earnings, Charter Rights and Requisition Compensation of the Vessels from the
Borrowers;
|
|
17.1.3 |
a guarantee and indemnity from the Guarantor;
|
|
17.1.4 |
first priority charges of all the issued shares of the Borrowers from the Chargor;
|
|
17.1.5 |
first priority account security deeds in respect of all amounts from time to time standing to the credit of the Earnings Accounts;
|
|
17.1.6 |
a first priority account security deed in respect of all amounts from time to time standing to the credit of the Cash Collateral Account; and
|
|
17.1.7 |
letters of undertaking, including an assignment of the Vessels’ Insurances, from the Managers in respect of the Vessels.
|
17.2 |
Accounts The Borrowers shall maintain the
Earnings Accounts and the Cash Collateral Account with the Account Holder for the duration of the Facility Period free of Encumbrances and rights of set off other than those created by or under the Finance Documents.
|
17.3 |
Earnings The Borrowers shall procure that all
Earnings and any Requisition Compensation are credited to the relevant Earnings Account.
|
17.4 |
Application of the Earnings Accounts The
Borrowers shall procure that there is transferred from the Earnings Accounts to the Lender:-
|
|
17.4.1 |
on each Repayment Date, in respect of the relevant Vessel Loan, the amount of the Repayment Instalment then due; and
|
|
17.4.2 |
on each Interest Payment Date, in respect of the relevant Vessel Loan, the amount of Interest then due and the Borrowers irrevocably authorises the
Lender to instruct the Account Holder to make those transfers.
|
17.5 |
Borrowers’ obligations not affected If for
any reason the amount standing to the credit of the Earnings Accounts is insufficient to pay any Repayment Instalment or to make any payment of interest when due, the Borrowers’ obligation to pay that Repayment Instalment or to make that
payment of interest shall not be affected.
|
17.6 |
Release of surplus Any amount remaining to
the credit of the Earnings Accounts following the making of any transfer required by Clause 17.4 (Application of the Earnings Accounts) shall
(unless a Default shall have occurred and be continuing) be released to or to the order of the Borrowers.
|
17.7 |
Restriction on withdrawal During the Facility
Period no sum may be withdrawn from:
|
|
17.7.1 |
the Earnings Accounts without the prior written consent of the Lender (except in accordance with this Clause 17); and
|
|
17.7.2 |
the Cash Collateral Account without the prior written consent of the Lender. No Account shall be overdrawn.
|
17.8 |
Relocation of the Accounts At any time
following the occurrence and during the continuation of a Default, the Lender may without the consent of the Borrowers instruct the Account Holder to relocate any of the Accounts to any other branch of the Account Holder, without
prejudice to the continued application of this Clause 17 and the rights of the Secured Parties under the Finance Documents.
|
17.9 |
Access to information The Borrowers agree
that the Lender (and its nominees) may from time to time during the Facility Period review the records held by the Account Holder (whether in written or electronic form) in relation to the Accounts, and irrevocably waives any right of
confidentiality which may exist in relation to those records.
|
17.10 |
StatementsWithout prejudice to the rights of
the Lender under Clause 17.9 (Access to information), the Borrowers shall procure that the Account Holder provides to the Lender, no less frequently than each calendar month during the Facility Period, written statements of account
showing all entries made to the credit and debit of each of the Accounts during the immediately preceding calendar month.
|
17.11 |
Application after acceleration From and after
the giving of notice to the Borrowers by the Lender under Clause 22.2 (Acceleration), the Borrowers shall procure that all sums from
time to time standing to the credit of any of the Accounts are immediately transferred to the Lender or any Receiver or Delegate for application in accordance with Clause 17.12 (Application of moneys by Lender) and the Borrowers irrevocably authorise the Lender to instruct the Account Holder to make those transfers.
|
17.12 |
Application of moneys by Lender The Borrowers
irrevocably authorise the Lender or any Receiver or Delegate to apply all moneys which it receives and is entitled to receive:
|
|
17.12.1 |
pursuant to a sale or other disposition of a Vessel or any right, title or interest in that Vessel; or
|
|
17.12.2 |
by way of payment of any sum in respect of the Insurances, Earnings, Charter Rights or Requisition Compensation; or
|
|
17.12.3 |
by way of transfer of any sum from any of the Accounts; or
|
|
17.12.4 |
otherwise under or in connection with any Security Document,
|
|
(a) |
first, in or towards payment of any unpaid fees, costs, expenses and default interest due to the Lender and any Receiver or Delegate under all or any of the Finance
Documents, such application to be apportioned between the Lender and any Receiver or Delegate pro rata to the aggregate amount of such items due to each of them;
|
|
(b) |
second, in or towards payment of any accrued interest, fee or commission due but unpaid under this Agreement;
|
|
(c) |
third, in or towards payment of any principal due but unpaid under this Agreement;
|
|
(d) |
fourth, in or towards payment of any other sum due and payable to the Lender but unpaid under all or any of the Finance Documents,
|
17.13 |
Retention on account Moneys to be applied by
the Lender or any Receiver or Delegate under Clause 17.12 (Application of moneys by Lender) shall be applied as soon as practicable
after the relevant moneys are received by it, or otherwise become available to it.
|
17.14 |
Additional security Subject to Clause 7.6 (Mandatory Prepayment on change of ownership of Guarantor), if at any time the aggregate of the Market Values of the Vessels and the
value of any additional security (such value to be the face amount of the deposit (in the case of cash), determined conclusively by appropriate advisers appointed by the Lender (in the case ❑f other charged assets), and determined by the
Lender in its discretion (in all other cases)) for the time being provided to the Lender under this Clause 17.14 is less than 130% of the Loan then outstanding (the “VTL Coverage”), the Borrowers shall, within 30 days of the Lender’s request, at the Borrowers’ option:
|
|
17.14.1 |
pay to the Lender or to its nominee a cash deposit in the amount of the shortfall to be secured in favour of the Lender as additional security for
the payment of the Indebtedness; or
|
|
17.14.2 |
give to the Lender other additional security in amount and form acceptable to the Lender in its discretion; or
|
|
17.14.3 |
prepay the Loan in the amount of the shortfall.
|
17.15 |
Valuation certificates The Lender may obtain at the cost and
expense of the Borrowers:
|
|
17.15.1 |
one valuation from an Approved Shipbroker in order to certify the Initial Market Value of a Vessel for the purposes of determining the Maximum
Vessel Loan Amount;
|
|
17.15.2 |
one set of valuations per year from the required number of Approved Shipbrokers (a) for the purposes of determining the relevant percentage referred
to in Clause 17.14 (Additional Security) and (b) for the purposes of determining the relevant percentage referred to in Clause 7.6 (Mandatory prepayment on change of ownership of Guarantor);
|
|
17.15.3 |
two sets of valuations from the required number of Approved Shipbrokers for the purposes of determining compliance with Clause 20.1 (Guarantor’s
Covenants); and
|
|
17.15.4 |
following the occurrence of an Event of Default which is continuing, as many sets of valuations per year as may be necessary or desirable to the
Lender from the required number of Approved Shipbrokers in order to certify the Market Value of a Vessel and any Fleet Market Value.
|
Section 8 |
Representations, Undertakings and Events of Default
|
18 |
Representations
|
18.1 |
Representations Each Borrower makes the representations and
warranties set out in this Clause 18 to the Lender:-
|
|
18.1.1 |
Status Each of the Obligors:
|
|
(a) |
is duly incorporated and validly existing under the law of its jurisdiction of incorporation; and
|
|
(b) |
has the power to own its assets and carry on its business as it is being conducted.
|
|
18.1.2 |
Binding obligations Subject to the Legal Reservations:
|
|
(a) |
the obligations expressed to be assumed by each of the Obligors in each of the Relevant Documents to which it is a party are legal, valid, binding and enforceable
obligations; and
|
|
(b) |
(without limiting the generality of Clause 18.1.2(a)) each Security Document to which it is a party creates the security interests which that Security Document
purports to create and those security interests are valid and effective.
|
|
18.1.3 |
Non-conflict with other obligations The entry into and
performance by each of the Obligors of, and the transactions contemplated by, the Relevant Documents do not conflict with:
|
|
(a) |
any law or regulation applicable to such Obligor;
|
|
(b) |
the constitutional documents of such Obligor; or
|
|
(c) |
any agreement or instrument binding upon such Obligor or any of such Obligor’s assets or constitute a default or termination event (however described) under any
such agreement or instrument.
|
|
18.1.4 |
Power and authority
|
|
(a) |
Each of the Obligors has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry Into, performance and delivery of,
the Relevant Documents to which it is or will be a party and the transactions contemplated by those Relevant Documents.
|
|
(b) |
No limit on the powers of any Obligor will be exceeded as a result of the borrowing, grant of security or giving of guarantees or indemnities contemplated by the
Relevant Documents to which it is a party.
|
|
18,1,5 |
Validity and admissibility in evidence All Authorisations
required or desirable:
|
|
(a) |
to enable each of the Obligors lawfully to enter into, exercise its rights and comply with its obligations in the Relevant Documents to which it is a party or to
enable the Lender to enforce and exercise all its rights under the Relevant Documents; and
|
|
(b) |
to make the Relevant Documents to which any Obligor is a party admissible in evidence in its Relevant Jurisdictions,
|
|
(c) |
have been obtained or effected and are in full force and effect, with the exception only of the registrations referred to in Part II of Schedule 1 (Conditions
Subsequent).
|
|
18.1.6 |
Governing law and enforcement
|
|
(a) |
The choice of governing law of any Finance Document will be recognised and enforced in the Relevant Jurisdictions of each relevant Obligor.
|
|
(b) |
Any judgment obtained in relation to any Finance Document in the jurisdiction of the governing law of that Finance Document will be recognised and enforced in the
Relevant Jurisdictions of each relevant Obligor.
|
|
18.1.7 |
Insolvency No corporate action, legal proceeding or other
procedure or step described in Clause 22.1.7 (Insolvency proceedings) or creditors’ process described in Clause 22.1.8 (Creditors’ process) has been taken or, to the knowledge of any Borrower, threatened in relation to an Obligor; and none of the
circumstances described in Clause 22.1.6 (Insolvency) applies to an Obligor.
|
|
18.1.8 |
No filing or stamp taxes Under the laws of the Relevant
Jurisdictions of each relevant Obligor it is not necessary that the Finance Documents be filed, recorded or enrolled with any court or other authority in any of those jurisdictions or that any stamp, registration, notarial or similar tax
or fees be paid on or in relation to the Finance Documents or the transactions contemplated by the Finance Documents except for the registration of each Mortgage at the Ships Registry where title to the relevant Vessel is registered in
the ownership of the relevant Borrower and payment of associated fees, which registration and fees will be made and paid promptly after the date of the relevant Finance Document.
|
|
18.1.9 |
Deduction of Tax None of the Obligors is required under the
law of its jurisdiction of incorporation to make any deduction for or on account of Tax from any payment it may make under any Finance Document to a Lender which is:
|
|
(a) |
a Qualifying Lender falling within (a) of the definition of Qualifying Lender; or, except where a Direction has been given under section 931 of the ITA in relation
to the payment concerned, a Qualifying Lender falling within (b) of the definition of Qualifying Lender; or
|
|
(b) |
a Treaty Lender and the payment is one specified in a direction given by the Commissioners of Revenue & Customs under Regulation 2 of the Double Taxation Relief
(Taxes on Income) (General) Regulations 1970 (SI 1970/488).
|
|
18.1.10 |
No default
|
|
(a) |
No Event of Default and, on the date of this Agreement and on each Utilisation Date, no Default is continuing or Is reasonably likely to result from the advance of
any Vessel Loan or the entry into, the performance of, or any transaction contemplated by, any of the Relevant Documents.
|
|
(b) |
No other event or circumstance is outstanding which constitutes (or, with the expiry of a grace period, the giving of notice, the making of any determination or any
combination of any of the foregoing, would constitute) a default or termination event (howsoever described) under any other agreement or instrument which is binding on any of the Obligors or to which its assets are subject which has or is
reasonably likely to have a Material Adverse Effect.
|
|
18.1.11 |
No misleading information Save as disclosed in writing to the
Lender prior to the date of this Agreement:
|
|
(a) |
all material information provided to the Lender by or on behalf of any of the Obligors or any other member of the Group on or before the date of this Agreement and
not superseded before that date is accurate and not misleading in any material respect and all projections provided to the Lender on or before the date of this Agreement have been prepared in good faith on the basis of assumptions which
were reasonable at the time at which they were prepared and supplied; and
|
|
(b) |
all other written information provided by any of the Obligors or any other member of the Group (including its advisers) to the Lender was true, complete and
accurate in all material respects as at the date it was provided and is not misleading in any respect.
|
|
18 1 12 |
Financial statements
|
|
(a) |
The Original Financial Statements were prepared in accordance with GAAP consistently applied unless expressly disclosed to the Lender in writing to the contrary.
|
|
(b) |
The unaudited Original Financial Statements fairly represent the Guarantor’s consolidated financial condition and results of operations for the relevant financial
year unless expressly disclosed to the Lender in writing to the contrary prior to the date of this Agreement.
|
|
(c) |
The audited Original Financial Statements give a true and fair view of the Guarantor’s consolidated financial condition and results of operations during the
relevant financial year unless expressly disclosed to the Lender in writing to the contrary prior to the date of this Agreement.
|
|
(d) |
There has been no material adverse change in any Obligor’s assets, business or financial condition since the date of the Original Financial Statements.
|
|
(e) |
The Guarantor’s most recent financial statements delivered pursuant to Clause 19.1 (Financial statements):
|
|
(i) |
have been prepared in accordance with GAAP as applied to the Original Financial Statements; and
|
|
(ii) |
give a true and fair view of (if audited) or fairly represent (if unaudited) its consolidated financial condition as at the end of, and consolidated results of
operations for, the period to which they relate.
|
|
(f) |
Since the date of the most recent financial statements delivered pursuant to Clause 19.1 (Financial statements) there has been no material adverse change in the business, assets or financial condition of any of the Obligors.
|
|
18.1.13 |
No proceedings pending or threatened No litigation, arbitration, or administrative proceedings of or before any court, arbitral body or agency which, if adversely determined, are reasonably
likely to have a Material Adverse Effect have (to the best of its knowledge and belief) been started or threatened against any of the Obligors.
|
|
18.1.14 |
No breach of laws None of the Obligors or any other member
of the Group has breached any law or regulation which breach has or is reasonably likely to have a Material Adverse Effect.
|
|
18.1.15 |
Environmental laws
|
|
(a) |
Each of the Obligors and each other member of the Group is in compliance with Clause 21.3 (Environmental compliance) and to the best of its knowledge and belief (having made due and careful enquiry) no circumstances have occurred which would prevent such compliance in a manner or to an
extent which has or is reasonably likely to have a Material Adverse Effect.
|
|
(b) |
No Environmental Claim has been commenced or (to the best of its knowledge and belief (having made due and careful enquiry)) is threatened against any of the
Obligors or any other member of the Group where that claim has or is reasonably likely, if determined against that Obligor or other member of the Group, to have a Material Adverse Effect.
|
|
18.1.16 |
Taxation
|
|
(a) |
None of the Obligors is materially overdue in the filing of any Tax returns or is overdue in the payment of any amount in respect of Tax.
|
|
(b) |
No claims or investigations are being, or are reasonably likely to be, made or conducted against any of the Obligors with respect to Taxes.
|
|
(c) |
Each of the Obligors (other than the Managers) is resident for Tax purposes only in its Original Jurisdiction.
|
|
18.117 |
Anti-corruption law None of the Obligors, or any member of
the Group nor, to the knowledge of any Borrower, any director, officer, agent, employee, Affiliate or other person acting on behalf of any of the Borrowers, an Obligor or any of their Subsidiaries is aware of or has taken any action,
directly or indirectly, that would result in a violation by such persons of any applicable anti-corruption and anti-bribery law, including but not limited to, the UK Bribery Act and the FCPA. Furthermore, the Borrowers and, to the
knowledge of each Borrower, their Affiliates, any member of the Group and each Obligor have conducted their businesses in compliance with the UK Bribery Act, the FCPA and similar laws, rules or regulations and have instituted and maintain
policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.
|
|
18.1.18 |
No Encumbrance or Financial Indebtedness
|
|
(a) |
No Encumbrance (other than any Permitted Encumbrance) exists over (i) all or any of the present or future assets of a Borrower and (ii) the shares of the Chargor in
each Borrower; and
|
|
(b) |
No Borrower has any other Financial Indebtedness outstanding other than as permitted by this Agreement.
|
|
18.1.19 |
Pari passu ranking The payment obligations of each of the
Obligors under the Finance Documents to which it is a party rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies
generally.
|
|
18.1.20 |
No adverse consequences
|
|
(a) |
It is not necessary under the laws of the Relevant Jurisdictions of any of the Obligors:
|
|
(i) |
in order to enable the Lender to enforce its rights under any Finance Document; or
|
|
(ii) |
by reason of the execution of any Finance Document or the performance by it of its obligations under any Finance Document,
|
|
(b) |
The Lender is not and will not be deemed to be resident, domiciled or carrying on business in any of the Relevant Jurisdictions of any of the Obligors by reason
only of the execution, performance and/or enforcement of any Finance Document.
|
|
18.1.21 |
Ownership of a Borrower and Chargor Each Borrower is a wholly owned subsidiary of the Chargor and the Chargor is a wholly owned subsidiary of the Guarantor.
|
|
18.1.22 |
Disclosure of material facts No Borrower is aware of any
material facts or circumstances which have not been disclosed to the Lender and which might, if disclosed, have adversely affected the decision of a person considering whether or not to make loan facilities of the nature contemplated by this Agreement available to the Borrowers.
|
|
18.1.23 |
Completeness of Relevant Documents The copies of any
Relevant Documents provided or to be provided by the Borrowers to the Lender in accordance with Clause 4 (Conditions of Utilisation) are,
or will be, true and accurate copies of the originals and represent, or will represent, the full agreement between the parties to those Relevant Documents in relation to the subject matter of those Relevant Documents and there are no
commissions, rebates, premiums or other payments due or to become due in connection with the subject matter of those Relevant Documents other than in the ordinary course of business or as disclosed to, and approved in writing by, the
Lender.
|
|
18.1.24 |
No Immunity No Obligor or any of its assets is immune to any
legal action or proceeding.
|
|
18.1.25 |
Money laundering Any borrowing by a Borrower under this
Agreement, and the performance of its obligations under this Agreement and under the other Finance Documents, will be for its own account and will not involve any breach by it of any law or regulatory measure relating to “money laundering” as defined in Article 1 of the Directive (2005/EC/60) of the European Parliament and of the Council of the European
Communities.
|
|
18.1.26 |
Sanctions None of the Obligors, or any of their respective
Subsidiaries or any director or officer, or any employee, agent, or Affiliate, of any of the Obligors or any of their respective Subsidiaries is an individual or entity (“Person”) that is, or is owned or controlled by Persons that are, (i) the target of any sanctions administered or enforced by the US Department of the Treasury’s Office of Foreign Assets Control, the
US Department of State, the United Nations Security Council, the European Union, Her Majesty’s Treasury or the Hong Kong Monetary Authority, or (ii) located, organised or resident in a country or territory that is, or whose government is,
the target of Sanctions, including, without limitation, the Crimea region, Cuba, Iran, North Korea, Sudan and Syria.
|
|
18.1.27 |
US Tax Obligor No Obligor is a US Tax Obligor.
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18.2 |
Repetition Each Repeating Representation is deemed to be
repeated by each Borrower by reference to the facts and circumstances then existing on the date of each Utilisation Request, on each
Utilisation Date, on the first day of each Interest Period and, in the case or those contained in Clauses 18.1.12(d) and 18.1.12(f)
(Financial statements) and for so long as any amount is outstanding under the Finance Documents or any part of the Loan is undrawn and available, on each day.
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19 |
Information Undertakings
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19.1 |
Financial statements Each Borrower shall procure that the
Guarantor supplies to the Lender:
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19.1.1 |
as soon as the same become available, but in any event within 180 days after the end of each of the Guarantor’s financial years, the Guarantor’s consolidated
audited financial statements (including profit and loss accounts and balance sheets) for that financial year; and
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19.1.2 |
as soon as the same become available, but in any event within 90 days after the end of each half year during each of the Guarantor’s financial years, the
Guarantor’s consolidated unaudited semi-annual financial statements for that half year.
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19.2 |
Compliance Certificate
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19.2.1 |
Each Borrower shall procure that the Guarantor supplies to the
Lender, with each set of its annual consolidated financial statements delivered pursuant to Clause 19.1.1 (Financial statements) and
each set of its semi-annual consolidated financial statements delivered pursuant to Clause 19.1.2 (Financial statements), a
Compliance Certificate setting out (in reasonable detail) computations as to compliance with Clause 20 (Financial Covenants) as at
the date as at which those financial statements were drawn up.
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19.2.2 |
Each Compliance Certificate shall be signed by two directors of each Borrower and the Guarantor shall be reported on by the Guarantor’s auditors in the form agreed
by the Borrowers, the Guarantor and the Lender before the date of this Agreement.
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19.3 |
Requirements as to financial statements
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19.3.1 |
shall be certified by a director of the Guarantor as giving a true and fair view of (in the case of annual financial statements), or fairly representing (in other
cases), its financial condition as at the date as at which those financial statements were drawn up;
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19.3.2 |
shall be prepared using GAAP, accounting practices and financial reference periods consistent with those applied in the preparation of the Original Financial
Statements unless, in relation to any set of financial statements, it notifies the Lender that there has been a change in GAAP, the accounting practices or reference periods and its auditors deliver to the Lender:
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(a) |
a description of any change necessary for those financial statements to reflect the GAAP, accounting practices and reference periods upon which the Original
Financial Statements were prepared; and
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(b) |
sufficient information, in form and substance as may be reasonably required by the Lender, to enable the Lender to determine whether Clause 20 (Financial Covenants) has been complied with and make an accurate comparison between the financial position indicated in those financial
statements and the Original Financial Statements.
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19.4 |
Information: miscellaneous Each Borrower shall supply to the
Lender:
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19.4.1 |
at the same time as they are dispatched, copies of all documents dispatched by that Borrower to its shareholders generally (or any class of them) or dispatched by
that Borrower or any other Obligor to its creditors generally (or any class of them);
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19.4.2 |
promptly upon becoming aware of them, the details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against any
Obligor and which, if adversely determined, are reasonably likely to have a Material Adverse Effect;
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19.4.3 |
promptly, such information as the Lender may reasonably require about the Charged Property and compliance of the Obligors with the terms of any Security Document
including without limitation cash flow analyses and details of the operating costs of any Vessel; and
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19.4.4 |
promptly on request, such further information regarding the financial condition, affairs, commitments, assets and operations of any Obligor or any other member of
the Group (including any requested amplification or explanation of any item in the financial statements, budgets or other material provided by any Obligor under this Agreement and an up to date copy of its shareholders’ register (or
equivalent in its Original Jurisdiction)) as the Lender may reasonably request.
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19.5 |
Notification of default
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19.5.1 |
Each Borrower shall notify the Lender of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence.
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19.5.2 |
Promptly upon a request by the Lender, each Borrower shall supply to the Lender a certificate signed by two of its directors or senior officers on its
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19.6 |
“Know your customer” checks If:
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196.1 |
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;
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19.6.2 |
any change in the status of an Obligor after the date of this Agreement; or
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19.6.3 |
a proposed assignment or transfer by the Lender of any of its rights and obligations under this Agreement; or
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19.6.4 |
any of the Lender’s internal compliance rules, policies and procedures, obliges the Lender (or, in the case of Clause 19.6.3, any prospective new Lender) to comply
with “know your customer” or similar identification procedures in circumstances where the necessary information is not already available to it, each Borrower, the Guarantor or any other member of the Group which has a loan with the Lender
and has issued registered shares shall promptly upon the request of the Lender, supply, or procure the supply of, such documentation and other evidence as is requested by the Lender at its absolute satisfaction, prior to the date of this
Agreement (for itself or, in the case of the event described in Clause 19.6.3, on behalf of any prospective new Lender) in order for the Lender or, in the case of the event described in Clause 19.6,3, any prospective new Lender to carry
out and be satisfied it has complied with or has refreshed all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.
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20 |
Financial Covenants
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20.1 |
Guarantor’s Covenants Each Borrower shall procure that the
Guarantor shall maintain at all times during the Facility Period:
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20.1.1 |
Maximum Leverage not higher than 75%; and
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20.1.2 |
Liquidity of an amount of not less than:
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(a) |
$200,000 in respect of each Fleet Vessel from the date of this Agreement up to and including 29 September 2020; and
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(b) |
$300,000 in respect of each Fleet Vessel from 30 September 2020 and throughout the remainder of the Facility Period; and
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20.1.3 |
Net Worth of not less than fifteen million dollars ($15,000,000).
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20.2 |
Cash Collateral Amount The Borrowers shall maintain in the
Cash Collateral Account:
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20.2.1 |
an amount of $300,000 during the period commencing on the first Utilisation Date up to but excluding the second Utilisation Date, or, if only one Utilisation is
made, throughout the remainder of the Facility Period;
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20.2.2 |
an amount of $600,000 during the period commencing on the second Utilisation Date up to but excluding the third Utilisation Date, or, if only two Utilisations are
made, throughout the remainder of the Facility Period; and
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20.2.3 |
an amount of $900,000 during the period commencing on the third Utilisation Date and throughout the remainder of the Facility Period,
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21 |
General Undertakings
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21.1 |
Authorisations Each Borrower shall promptly:
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21.1.1 |
obtain, comply with and do all that is necessary to maintain in full force and effect;
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21.1.2 |
supply certified copies to the Lender of,
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(a) |
enable any Obligor to perform its obligations under the Finance Documents to which it is a party;
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(b) |
ensure the legality, validity, enforceability or admissibility in evidence of any Finance Document; and
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(c) |
enable any Obligor to carry on its business where failure to do so has or is reasonably likely to have a Material Adverse Effect.
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21.2 |
Compliance with laws
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21.2.1 |
Each Borrower shall comply (and shall procure that each other Obligor, each other member of the Group and each Affiliate of any of them shall comply), in all
respects with all laws to which it may be subject, if (except as regards Sanctions, to which Clause 21.2.2 applies, and anti-corruption laws to which Clause 20.5 applies) failure so to comply has or is reasonably likely to have a Material
Adverse Effect.
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21.2.2 |
Each Borrower shall comply (and shall procure that each other Obligor, each other member of the Group and each Affiliate of any of them shall comply) in all
respects with all Sanctions.
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21.3 |
Environmental compliance Each Borrower shall:
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21.3.1 |
comply with all Environmental Laws;
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21.3.2 |
obtain, maintain and ensure compliance with all requisite Environmental Approvals; and
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21.3.3 |
implement procedures to monitor compliance with and to prevent liability under any Environmental Law,
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21.4 |
Environmental Claims
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21.4.1 |
any Environmental Claim against any of the Obligors or any other member of the Group which is current, pending or threatened; and
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21.4.2 |
any facts or circumstances which are reasonably likely to result in any Environmental Claim being commenced or threatened against any of the Obligors or any other
member of the Group,
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21.5.1 |
No part of the proceeds of the Loan will be used, directly or indirectly, for any payments that could constitute a violation of any applicable anti-bribery law,
including, without limitation the UK Bribery Act, the FCPA or other similar legislation in other jurisdictions.
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21.5.2 |
Each Borrower shall (and shall procure that each other Obligor, each other member of the Group and each Affiliate of any of them shall):
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(a) |
conduct its businesses in compliance with applicable anti-corruption laws; and
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(b) |
maintain policies and procedures designed to promote and achieve compliance with such laws.
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21.6 |
Taxation
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21.6.1 |
Each Borrower shall (and shall procure that each other Obligor shall) 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:
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(a) |
such payment is being contested in good faith;
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(b) |
adequate reserves are being maintained for those Taxes and the costs required to contest them which have been disclosed in its latest financial statements delivered
to the Lender under Clause 19.1 (Financial statements); and
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(c) |
such payment can be lawfully withheld and failure to pay those Taxes does not have or is not reasonably likely to have a Material Adverse Effect.
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21.6.2 |
No Borrower may (and each Borrower shall procure that no other Obligor may) change its residence for Tax purposes.
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21.7 |
Evidence of good standing Each Borrower will from time to
time if requested by the Lender provide the Lender with evidence in form and substance satisfactory to the Lender that the Obligors and all corporate shareholders of any of the Obligors (other than in respect of the Guarantor’s corporate
shareholders) remain in good standing.
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21.8 |
Pari passu ranking Each Borrower shall (and shall procure
that each other Obligor shall) ensure that at all times any unsecured and unsubordinated claims of the Lender against it under the Finance Documents rank at least pan passu with the claims of all its other unsecured and unsubordinated creditors except those creditors whose claims are mandatorily preferred by laws of general application to companies.
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21.9 |
Negative pledge
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21.9.1 |
Each Borrower shall:
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(a) |
not create nor permit to subsist any Encumbrance (other than any Permitted Encumbrance) over any of its assets; and
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(b) |
procure that the Chargor will not create nor permit to subsist any Encumbrance over the shares of the Chargor in a Borrower.
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21.9.2 |
No Borrower shall:
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(a) |
sell, transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to or re-acquired by an Obligor;
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(b) |
sell, transfer or otherwise dispose of any of its receivables on recourse terms;
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(c) |
enter into any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject to a combination of accounts; or
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(d) |
enter into any other preferential arrangement having a similar effect,
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21.10 |
Disposals
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21.10.1 |
No Borrower shall (and each Borrower shall procure that no other Obligor other than the Guarantor will) enter into a single transaction or a series of transactions
(whether related or not) and whether voluntary or involuntary to sell, lease, transfer or otherwise dispose of any asset.
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21.10.2 |
Each Borrower shall procure that the Chargor shall not enter into a single transaction or a series of transactions (whether related or not) and whether voluntary or
involuntary to sell, transfer or otherwise dispose of its shares in a Borrower.
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21.11 |
Arm’s length basis
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21.11.1 |
No Borrower shall enter into any transaction with any person except on arm’s length terms and for full market value.
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21.11.2 |
Fees, costs and expenses payable under the Relevant Documents in the amounts set out in the Relevant Documents delivered to the Lender under Clause 4.1 (Initial conditions precedent) or agreed by the Lender shall not be a breach of this Clause 21.11.
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21.12 |
Merger No Borrower shall (and each Borrower shall procure
that no other Obligor will) enter into any amalgamation, demerger, merger, consolidation or corporate reconstruction without the prior written consent of the Lender.
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21.13 |
Change of business No Borrower shall (and each Borrower
shall procure that no other Obligor will) make any substantial change to the general nature of its business from that carried on at the date of this Agreement.
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21.14 |
No other business No Borrower shall (and each Borrower shall
procure that no other Obligor other than the Guarantor will) engage in any business other than the ownership, operation, chartering and management of a Vessel.
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21.15 |
No acquisitions No Borrower shall acquire a company or any
shares or securities or a business or undertaking (or, in each case, any interest in any of them) or incorporate a company.
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21.16 |
No Joint Ventures No Borrower shall:
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21.16.1 |
enter into, invest in or acquire (or agree to acquire) any shares, stocks, securities or other interest in any Joint Venture; or
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21.16.2 |
transfer any assets or lend to or guarantee or give an indemnity for or give security for the obligations of a Joint Venture or maintain the solvency of or provide
working capital to any Joint Venture (or agree to do any of the foregoing).
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21.17 |
No borrowings No Borrower shall incur or allow to remain outstanding any Financial Indebtedness (except for the Loan).
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21.18 |
No substantial liabilities Except in the ordinary course of
business, no Borrower shall incur any liability to any third party which is of a substantial nature.
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21.19 |
No loans or credit No Borrower shall, without the Lender’s
prior written consent, be a creditor in respect of any Financial Indebtedness unless it is a loan made in the ordinary course of business in connection with the chartering, operation or repair of its Vessel.
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21.20 |
No guarantees or indemnities No Borrower shall incur or allow to remain outstanding any guarantee in respect of any obligation of any person.
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21.21 |
No dividends
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21.21.1 |
No Borrower shall (and each Borrower shall procure that the Guarantor will not):
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(a) |
declare, make or pay any dividend, charge, fee or other distribution (or interest on any unpaid dividend, charge, fee or other distribution) (whether in cash or in
kind) on or in respect of the Borrower’s share capital and the Guarantor’s common share capital (or any class of the Borrower’s share capital and any class of the Guarantor’s common share capital (as applicable));
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(b) |
repay or distribute any dividend or share premium reserve in respect of the Borrower and repay or distribute any dividend or common share premium reserve in respect
of the Guarantor (as applicable); or
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(c) |
redeem, repurchase, defease, retire or repay any of the Borrower’s share capital and the Guarantor’s common share capital (as applicable) or resolve to do so,
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21.22 |
Ownership and management of a Borrower No change in the
management or the legal or beneficial ownership of a Borrower shall occur from that advised to the Lender by the Borrowers at the date of this Agreement. Subject to Clause 7.6 (Mandatory prepayment on change of ownership of Guarantor), for the avoidance of doubt, the Lender consents and agrees to any changes relating to the shareholders of the Guarantor’s trading
shares in the normal course of business,
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21.23 |
No change of CEO The Borrowers shall ensure (and shall
procure that the Guarantor shall ensure) that throughout the Facility Period no change in the chief executive officer of the board of directors and/or the chairman of the Guarantor shall occur, without the Lender’s prior written consent.
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21.24 |
Inspection of records Each Borrower will permit the
inspection of its financial records and accounts from time to time by the Lender or its nominee.
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21.25 |
No change in Relevant Documents Without the prior written
consent of the Lender, no Borrower shall (and each Borrower shall procure that no other Obligor will) materially amend (and for the avoidance of doubt, but without limitation, any amendment in respect of the fees (but excluding any
amendment in respect of the fees already agreed under the Management Agreements), reduction of hire, duration of a Charter, termination events of a Charter and governing law of any of the Relevant Documents will be considered material),
vary, novate, supplement, supersede, waive or terminate any term of, any of the Relevant Documents which are not Fknance Documents, or any other document delivered to the Lender pursuant to Clause 4.1 (Initial conditions precedent) or Clause 4.2 (Further
conditions precedent) or Clause 4.3 (Conditions subsequent).
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21.26 |
Sanctions No Borrower will, directly or indirectly, use the
proceeds of the Loan, or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other Person, (i) to fund any activities or business of or with any Person, or in any country or territory,
that, at the time of such funding, is, or whose government is, the target of Sanctions or (ii) in any other manner that would result in a violation of Sanctions by any Person (including any Person participating in the Loan, whether as
underwriter, advisor, investor or otherwise).
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21.27 |
Banking operations Each Borrower shall conduct all banking
operations in connection with its Vessel through the Lender or any other branch nominated by the Lender in its discretion.
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21.28 |
Vessels’ Trading No Borrower shall allow its Vessel to trade
in areas prohibited by (a) the law applicable to that Vessel’s flag, (b) the applicable law of the country of incorporation of that Borrower and (c) the applicable law of the nationality of the officers and crew of that Vessel.
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21.29 |
No change of Vessels’ ownership or management There shall be
no change in the ownership or management of a Vessel, without the Lender’s prior written consent.
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21.30 |
ISM Code compliance Each Borrower shall comply and shall
procure that each of the Guarantor and the Manager comply with the ISM Code.
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21.31 |
Further assurance
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21.31.1 |
Each Borrower shall (and shall procure that each other Obligor shall) promptly do all such acts or execute all such documents (including assignments, transfers,
mortgages, charges, notices and instructions) as the Lender may reasonably specify (and in such form as the Lender may reasonably require in favour of the Lender or its nominee(s)):
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(a) |
to perfect any Encumbrance created or intended to be created under or evidenced by the Security Documents (which may include the execution of a mortgage, charge,
assignment or other Encumbrance over all or any of the assets which are, or are intended to be, the subject of the Security Documents) or for the exercise of any rights, powers and remedies of the Lender or the Secured Parties provided by
or pursuant to the Finance Documents or by law;
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(b) |
to confer on the Lender or confer on the Secured Parties an Encumbrance over any property and assets of that Borrower (or that other Obligor as the case may be)
located in any jurisdiction equivalent or similar to the Encumbrance intended to be conferred by or pursuant to the Security Documents; and/or
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(c) |
to facilitate the realisation of the assets which are, or are intended to be, the subject of the Security Documents, in respect of which any Encumbrance has become
enforceable following the occurrence of an Event of Default which is continuing.
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21.31.2 |
Each Borrower shall (and shall procure that each other 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 Encumbrance conferred or intended to be conferred on the Lender or the Secured Parties by or pursuant to the Finance Documents.
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22 |
Events of Default
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22.1 |
Events of Default Each of the events or circumstances set out
in this Clause 22.1 is an Event of Default.
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22.1.1 |
Non-payment An Obligor does not pay on the due date any
amount payable by it under a Finance Document at the place at and in the currency in which it is expressed to be payable unless:-
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(a) |
its failure to pay is caused by:
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(i) |
administrative or technical error; or
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(ii) |
a Disruption Event; and
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(b) |
payment is made within two (2) Business Days of its due date.
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22.1.2 |
Other specific obligations
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22.1.3 |
Other obligations
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(a) |
Art Obligor does not comply with any provision of a Finance Document (other than those referred to in Clause 22.1.1 (Non-payment) and Clause 22.1.2 (Other specific obligations).
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(b) |
NO Event of Default under this Clause 22.1.3 will occur if the failure to comply is capable of remedy and is remedied within ten (10) Business Days of the earlier
of (i) the Lender giving notice to the Borrowers and (ii) the Borrowers becoming aware of the failure to comply.
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22.1.4 |
Misrepresentation Any representation or statement made or
deemed to be repeated by an Obligor in any Finance Document or any other document delivered by or on behalf of an Obligor under or in connection with any Finance Document is or proves to have been incorrect or misleading when made or
deemed to be made.
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22.1.5 |
Cross default Any Financial Indebtedness of an Obligor
(other than the Managers):
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(a) |
is not paid when due nor within any originally applicable grace period; or
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(b) |
is declared to be, or otherwise becomes, due and payable prior to its specified maturity as a result of an event of default (however described); or
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(c) |
is capable of being declared by a creditor to be due and payable prior to its specified maturity as a result of such an event.
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22.1.6 |
Insolvency
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(a) |
An Obligor is unable or admits inability to pay its debts as they fall due, is deemed to, or is declared to, be unable to pay its debts under applicable law,
suspends or threatens to suspend making payments on any of its debts, or, by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors with a view to rescheduling any of its
indebtedness.
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(b) |
The value of the assets of an Obligor is less than its liabilities (taking into account contingent and prospective liabilities).
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(c) |
A moratorium is declared in respect of any indebtedness of an Obligor or any other member of the Group. If a moratorium occurs, the ending of the moratorium will
not remedy any Event of Default caused by that moratorium.
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22.1.7 |
Insolvency proceedings Any corporate action, legal
proceedings or other procedure or step is taken for:
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(a) |
the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration,bankruptcy or reorganisation (by way of voluntary arrangement,
scheme of arrangement or otherwise) of an Obligor;
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(b) |
a composition, compromise, assignment or arrangement with any creditor of an Obligor ;
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(c) |
the appointment of a liquidator, receiver, administrative receiver, administrator, compulsory manager, or trustee or other similar officer in respect of an Obligor
or any of its assets; or
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(d) |
enforcement of any Encumbrance over any assets of an Obligor,
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22.1.8 |
Creditors’ process Any expropriation, attachment,
sequestration, distress or execution affects any asset or assets of a Borrower, the Guarantor or the Chargor.
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22.1.9 |
Ownership of a Borrower A Borrower is not or ceases to be a
100% directly owned Subsidiary of the Chargor.
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22.1.10 |
Change of chairman or CEO of Guarantor Mr Aristeidis J.
Pittas ceases to be throughout the Facility Period the chief executive officer of the board of directors and/or the chairman of the Guarantor.
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22.1.11 |
Delisting of Guarantor The Guarantor is delisted for any
reason whatsoever from the Nasdaq stock exchange.
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22.1.12 |
Unlawfulness and invalidity
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(a) |
It is or becomes unlawful for an Obligor to perform any of
its obligations under the Finance Documents to which it is a party or any Encumbrance created or expressed to be created or evidenced by the Security Documents
ceases to be effective.
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(b) |
Any obligation or obligations of any Obligor under any Finance Documents to which it is a party 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 Lender under the Finance Documents.
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(c) |
Any Finance Document ceases to be in full force and effect or any Encumbrance created or expressed to be created or evidenced by the Security Documents ceases to be
legal, valid, binding, enforceable or effective or is alleged by a party to it (other than the Lender) to be ineffective,
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22.1.13 |
Cessation of business An Obligor ceases, or threatens to
cease, to carry on all or a substantial part of its business,
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22.1.14 |
Change in management, ownership or control of a Borrower
There is any change in the management, beneficial ownership or control of a Borrower from that advised to the Lender by that Borrower at the date of this Agreement. Subject to Clause 7.6 (Mandatory prepayment on change of ownership of Guarantor), for the avoidance of doubt, the Lender consents and agrees to any changes relating to the shareholders of the Guarantor’s
trading shares in the normal course of business and confirms that such changes do not violate the terms of this Agreement.
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22.1.15 | Expropriation | The authority or ability of an Obligor to conduct its business is limited or wholly or substantially curtailed by any seizure, expropriation, nationalisation, intervention, restriction or other action by or on behalf of any governmental, regulatory or other authority (excluding requisition of hire not involving requisition of title) or other person in relation to an Obligor or any of its assets. |
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22.1.16 |
Repudiation and rescission of agreements
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(a) |
An Obligor rescinds or purports to rescind or repudiates or purports to repudiate a Finance Document or evidences an intention to rescind or repudiate a Finance
Document.
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(b) |
Subject to Clause 22.1.16 (c), any party to any of the Relevant Documents that is not a Finance Document rescinds or purports to rescind or repudiates or purports
to repudiate that Relevant Document in whole or in part where to do so has or is, in the reasonable opinion of the Lender, likely to have a material adverse effect on the interests of the Lender under the Finance Documents.
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(c) |
The Management Agreement is terminated, cancelled or otherwise ceases to remain in full force and effect at any time prior to its contractual expiry date and is not
immediately replaced by a similar agreement in form and substance satisfactory to the Lender.
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22.1.17 |
Conditions subsequent Any of the conditions referred to in
Clause 4.3 (Conditions subsequent) is not satisfied within the time reasonably required by the Lender.
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22.1.18 |
Revocation or modification of Authorisation Any Authorisation
of any governmental, judicial or other public body or authority which is now, or which at any time during the Facility Period becomes, necessary to enable any of the Obligors or any other person (except the Lender) to comply with any of
their obligations under any Relevant Document is not obtained, is revoked, suspended, withdrawn or withheld, or is modified in a manner which the Lender considers is, or may be, prejudicial to the interests of the Lender, or ceases to
remain in full force and effect.
|
|
22.1.19 |
Reduction of capital An Obligor (other than the Guarantor)
reduces its issued or subscribed capital.
|
|
22.1.20 |
Loss of Vessel A Vessel suffers a Total Loss or is otherwise
destroyed or abandoned, or a similar event occurs in relation to any other vessel which may from time to time be mortgaged to the Lender as security for the payment of all or any part of the Indebtedness, except that a Total Loss (which
term shall for the purposes of the remainder of this Clause 22.1.20 include an event similar to a Total Loss in relation to any other vessel) shall not be an Event of Default if:
|
|
(a) |
that Vessel or other vessel is insured in accordance with the Security Documents and a claim for Total Loss is available under the terms of the relevant insurances;
and
|
|
(b) |
no insurer has refused to meet or has disputed the claim for Total Loss and it is not apparent to the Lender in its discretion that any such refusal or dispute is
likely to occur; and
|
|
(c) |
payment of all insurance proceeds in respect of the Total Loss is made in full to the Lender within 180 days of the occurrence of the casualty giving rise to the
Total Loss in question or such longer period as the Lender may in its discretion agree.
|
|
22.1.21 |
Challenge to registration The registration of a Vessel or a
Mortgage is contested or becomes void or voidable or liable to cancellation or termination, or the validity or priority of a Mortgage is contested.
|
|
22.1.22 |
War The country of registration of a Vessel becomes involved
in war (whether or not declared) or civil war or is occupied by any other power and the Lender in its discretion considers that, as a result, the security conferred by any of the Security Documents is materially prejudiced and the
relevant Borrower fails to comply with the Lender’s request to (a) change the flag of its Vessel to a country acceptable to the Lender in its absolute discretion by paying promptly any costs and expenses related to such registration under
the new flag, (b) provide any additional documentation including any additional security documents required pursuant to such registration under the new flag and (c) record a substitute mortgage over its Vessel and any additional security
required pursuant to such recordation within 15 Business Days.
|
|
22.1.23 |
Notice of determination The Guarantor gives notice to the
Lender to determine any obligations under the Guarantee.
|
|
22.1.24 |
Litigation Any litigation, arbitration, administrative,
governmental, regulatory or other investigations, proceedings or disputes are commenced or threatened in relation to the Relevant Documents or the transactions contemplated in the Relevant Documents or against an Obligor or its assets
which have or are reasonably likely to have a Material Adverse Effect.
|
|
22.1.25 |
Material adverse change Any event or circumstance occurs
which the Lender reasonably believes has or is reasonably likely to have a Material Adverse Effect.
|
|
22.1.26 |
Sanctions
|
|
(a) |
Any of the Obligors, any other member of the Group or any Affiliate of any of them becomes a Prohibited Person or becomes owned or controlled by, or acts directly
or indirectly on behalf of, a Prohibited Person or any of such persons becomes the owner or controller of a Prohibited Person.
|
|
(b) |
Any proceeds of the Loan are made available, directly or indirectly, to or for the benefit of a Prohibited Person or otherwise is, directly or indirectly, applied
in a manner or for a purpose prohibited by Sanctions.
|
|
(c) |
Any of the Obligors, any other member of the Group or any Affiliate of any of them is not in compliance with all Sanctions.
|
22.2 |
Acceleration On and at any time after the occurrence of an
Event of Default which is continuing the Lender may:
|
|
22.2.1 |
by notice to the Borrowers, cancel the availability of the Loan, at which time it shall immediately be cancelled;
|
|
22.2.2 |
by notice to the Borrowers, declare that the Loan, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents are
immediately due and payable, at which time they shall become immediately due and payable;
|
|
22.2.3 |
by notice to the Borrowers, declare that the Loan is payable on demand, at which time it shall immediately become payable on demand by the Lender; and/or
|
|
22.2.4 |
exercise any or all of its rights, remedies, powers or discretions under the Finance Documents.
|
Section 9 |
Changes to Parties
|
23 |
Changes to the Lender
|
23.1 |
Assignments and transfers by the Lender Subject to this
Clause 23, the Lender may:
|
|
23.1.1 |
assign any of its rights; or
|
|
23.1.2 |
transfer by novation any of its rights and obligations, under any Finance Document to another bank or financial institution or to a trust, fund or other entity
which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets (the “New Lender”).
|
23.2 |
Conditions of assignment or transfer
|
|
23.2.1 |
The Lender shall not be required to consult with the Borrowers or obtain the Borrowers’ prior consent in connection with an assignment or transfer pursuant to
Clause 23.1 (Assignments and transfers by the Lender).
|
|
23.2.2 |
If:
|
|
(a) |
the Lender assigns or transfers any of its rights or obligations under the Finance Documents or changes its Facility Office; and
|
|
(b) |
as a result of circumstances existing at the date the assignment, transfer or change occurs, the Borrowers would be obliged to make a payment to the New Lender or
the Lender acting through its new Facility Office under Clause 12 (Tax Gross Up and Indemnities) or Clause 13 (Increased Costs), then the New Lender or the Lender acting through its new Facility Office is only entitled to receive payment under those Clauses to the
same extent as the Lender or the Lender acting through its previous Facility Office would have been if the assignment, transfer or change had not occurred.
|
23.3 |
Limitation of responsibility of Lender
|
|
23.3.1 |
Unless expressly agreed to the contrary, the Lender makes no representation or warranty and assumes no responsibility to a New Lender for:
|
|
(a) |
the legality, validity, effectiveness, adequacy or enforceability of the Relevant Documents or any other documents;
|
|
(b) |
the financial condition of any Obligor;
|
|
(c) |
the performance and observance by any Obligor of its obligations under the Relevant Documents or any other documents; or
|
|
(d) |
the accuracy of any statements (whether written or oral) made in or in connection with any of the Relevant Documents or any other document,
|
|
23.3.2 |
Each New Lender confirms to the Lender that it:
|
|
(a) |
has made (and shall continue to make) its own independent investigation and assessment of the financial condition and affairs of each Obligor and its related
entities in connection with its participation in this Agreement and has not relied exclusively on any information provided to it by the Lender in connection with any of the Relevant Documents; and
|
|
(b) |
will continue to make its own independent appraisal of the creditworthiness of each Obligor and its related entities whilst any amount is or may be outstanding
under the Finance Documents or any part of the Loan is undrawn and available.
|
|
23.3.3 |
Nothing in any Finance Document obliges the Lender to:
|
|
(a) |
accept a re-transfer or re-assignment from a New Lender of any of the rights and obligations assigned or transferred under this Clause 23; or
|
|
(b) |
support any losses directly or indirectly Incurred by the New Lender by reason of the non-performance by any Obligor of its obligations under the Relevant Documents
or otherwise.
|
23.4 |
Securitisation The Lender may disclose the size and term of
the Loan and the name of each of the Obligors to any investor or potential investor in a securitisation (or similar transaction of broadly equivalent economic effect) of the Lender’s rights or obligations under the Finance Documents.
|
24 |
Changes to the Obligors
|
24.1 |
No assignment or transfer by Obligors No Obligor may assign any of its rights or transfer any of its rights or obligations under the Finance Documents.
|
Section 10 |
The Lender’s Business
|
25 |
Conduct of Business by the Lender
|
25.1 |
interfere with the right of the Lender to arrange its affairs (tax or otherwise) in whatever manner it thinks fit;
|
25.2 |
oblige the Lender to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or
|
25.3 |
oblige the Lender to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax.
|
Section 11 |
Administration
|
26 |
Payment Mechanics
|
26.1 |
Payments to the Lender On each date on which an Obligor is required to make a payment under a Finance Document, that Obligor shall make the same available to the
Lender for value on the due date at the time and, in such funds, as required by the Finance Documents or, if not specified therein, as specified by the Lender as being customary at the time for settlement of transactions in the relevant
currency in the place of payment.
|
26.2 |
Partial payments
|
|
26.2.1 |
If the Lender receives a payment that is insufficient to discharge all the amounts then due and payable by an Obligor under the Finance Documents, the Lender shall
apply that payment towards the obligations of that Obligor under the Finance Documents, in the following order:
|
|
(a) |
first, in or towards payment pro rata of any unpaid fees, costs and expenses of the Lender under the Finance Documents;
|
|
(b) |
second, in or towards payment of any accrued interest, fee or commission due but unpaid under this Agreement;
|
|
(c) |
third, in or towards payment of any principal due but unpaid under this Agreement;
|
|
(d) |
fourth, in or towards payment pro rata of any other sum due but unpaid under the Finance Documents.
|
|
26.2.2 |
The Lender may vary the order set out in Clauses 26.2.1(b) to 26.2.1(d).
|
|
26.2.3 |
Clauses 26.2.1 and 26.2.2 will override any appropriation made by an Obligor.
|
26.3 |
No set-off by Obligors All payments to be made by an Obligor
under the Finance Documents shall be calculated and be made without (and free and clear of any deduction for) set-off, counterclaim, taxes, stamp duties, levies of any governmental or other authority.
|
26.4 |
Business Days Any payment 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).
|
26.5 |
Currency of account
|
|
26.5.1 |
Subject to Clauses 26.5.2 to 26.5.5, dollars is the currency of account and payment for any sum due from an Obligor under any Finance Document.
|
|
26.5.2 |
A repayment or payment of all or part of the Loan or an Unpaid Sum shall be made in the currency in which the Loan or Unpaid Sum is denominated on its due date.
|
|
26.5.3 |
Each payment of interest shall be made in the currency in which the sum in respect of which the interest is payable was denominated when that interest accrued.
|
|
26.5.4 |
Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred.
|
|
26.5.5 |
Any amount expressed to be payable in a currency other than dollars shall be paid in that other currency.
|
26.6 |
Control account The Lender shall open and maintain on its
books a control account in the name of the Borrowers showing the advance of the Loan and the computation and payment of interest and all other sums due under this Agreement. The Borrowers’ obligations to repay the Loan and to pay interest
and all other sums due under this Agreement shall be evidenced by the entries from time to time made in the control account opened and maintained under this Clause 26.6 and those entries will, in the absence of manifest error, be
conclusive and binding.
|
26.7 |
Disruption to payment systems etc. If either the Lender
determines in its discretion that a Disruption Event has occurred or the Lender is notified by the Borrowers that a Disruption Event has occurred which negatively affects the ability of the Borrowers to repay the Loan and at the same has
a Material Adverse Effect:
|
|
26.7.1 |
the Lender may, and shall if requested to do so by the Borrowers, consult with the Borrowers with a view to agreeing with the Borrowers such changes to the
operation or administration of the Loan as the Lender may deem necessary in the circumstances;
|
|
26.7.2 |
the Lender shall not be obliged to consult with the Borrowers in relation to any changes mentioned in Clause 26.7.1 if, in its opinion, it is not practicable to do
so in the circumstances and, in any event, shall have no obligation to agree to any such changes;
|
|
26.7.3 |
any such changes agreed upon by the Lender 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; and
|
|
26.7.4 |
the Lender shall not be liable for any damages, costs or losses 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 Lender) arising as a result of its taking, or failing to take, any actions pursuant to or in connection with this Clause 26.7.
|
26.8 |
Replacement of Screen Rate
|
|
(a) |
providing for the use of a Replacement Benchmark in relation to that currency in place of (or in addition to) the affected Screen Rate; and
|
|
(i) |
aligning any provision of any Finance Document to the use of that Replacement Benchmark;
|
|
(ii) |
enabling that Replacement Benchmark to be used for the calculation of interest under this Agreement (including, without limitation, any consequential changes
required to enable that Replacement Benchmark to be used for the purposes of this Agreement);
|
|
(iii) |
implementing market conventions applicable to that Replacement Benchmark;
|
|
(iv) |
providing for appropriate fallback (and market disruption) provisions for that Replacement Benchmark; or
|
|
(v) |
adjusting the pricing to reduce or eliminate, to the extent reasonably practicable, any transfer of economic value from one Party to another as a result of the
application of that Replacement Benchmark (and if any adjustment or method for calculating any adjustment has been formally designated, nominated or recommended by the Relevant Nominating Body, the adjustment shall be determined on the
basis of that designation, nomination or recommendation),
|
|
(a) |
formally designated, nominated or recommended as the replacement for a Screen Rate by:
|
|
(i) |
the administrator of that Screen Rate (provided that the market or economic reality that such benchmark rate measures is the same as that measured by that Screen
Rate); or
|
|
(ii) |
any Relevant Nominating Body,
|
|
(b) |
in the opinion of the Lender and the Borrowers, generally accepted in the international or any relevant domestic syndicated loan markets as the appropriate
successor to a Screen Rate; or
|
|
(c) |
in the opinion of the Lender and the Borrowers, an appropriate successor to a Screen Rate.
|
|
(a) |
the methodology, formula or other means of determining that Screen Rate has, in the opinion of the Lender and the Borrowers materially changed;
|
|
(A) |
the administrator of that Screen Rate or its supervisor publicly announces that such administrator is insolvent; or
|
|
(B) |
Information is published in any order, decree, notice, petition or filing, however described, of or filed with a court, tribunal, exchange, regulatory authority or
similar administrative, regulatory or judicial body which reasonably confirms that the administrator of that Screen Rate is insolvent,
|
|
(ii) |
the administrator of that Screen Rate publicly announces that it has ceased or will cease, to provide that Screen Rate permanently or indefinitely and, at that
time, there is no successor administrator to continue to provide that Screen Rate;
|
|
(iii) |
the supervisor of the administrator of that Screen Rate publicly announces that such Screen Rate has been or will be permanently or indefinitely discontinued; or
|
|
(iv) |
the administrator of that Screen Rate or its supervisor announces that that Screen Rate may no longer be used; or
|
|
(c) |
the administrator of that Screen Rate determines that that Screen Rate should be calculated in accordance with its reduced
|
|
(i) |
the circumstance(s) or event(s) leading to such determination are not (in the opinion of the Lender 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 Lender and the Borrowers, that Screen Rate is otherwise no longer appropriate for the purposes of calculating interest under this Agreement.
|
27 |
Set-Off
|
27.1 |
Finance Documents The Lender may set off any matured
obligation due from an Obligor under the Finance Documents (to the extent beneficially owned by the Lender) against any matured obligation owed by the Lender to that Obligor, regardless of the place of payment, booking branch or currency
of either obligation. If the obligations are in different currencies, the Lender may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.
|
28 |
Notices
|
28.1 |
Communications in writing Any communication to be made under or in connection with the Finance Documents shall be made in writing and, unless otherwise stated, may be made by fax or letter.
|
28.2 |
Addresses The address and fax number (and the department or
officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under or in connection with the Finance Documents is:
|
|
28.2.1 |
in the case of each Borrower, that identified with its name below; and
|
|
28.2.2 |
in the case of the Lender, that identified with its name below,
|
28.3 |
Delivery Any communication or document made or delivered by one Party to another under or in connection with the Finance Documents will only be effective:
|
|
28.3.1 |
if by way of fax, when received in legible form; or
|
|
28.3.2 |
if by way of letter, when it has been left at the relevant address or five (5) Business Days after being deposited in the post postage prepaid in an envelope
addressed to it at that address;
|
28.4 |
Electronic communication
|
|
28.4.1 |
Any communication to be made between any two Parties under or in connection with the Finance Documents may be made by electronic mail or other electronic means 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 and if those two Parties:
|
|
(a) |
notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means;
and
|
|
(b) |
notify each other of any change to their address or any other such information supplied by them by not less than five Business Days’ notice.
|
|
28.4.2 |
Any electronic communication made between those two Parties will be effective only when actually received in readable form and in the case of any electronic
communication made by a Party to the Lender only if it is addressed in such a manner as the Lender shall specify for this purpose.
|
|
28.4.3 |
Any electronic communication which becomes effective, in accordance with Clause 28.4.2, after 5.00 p.m. in the place of receipt shall be deemed only to become
effective on the following day.
|
28.5 |
English language Any notice given under or in connection
with any Finance Document must be in English. All other documents provided under or in connection with any Finance Document must be:
|
|
28.5.1 |
in English; or
|
|
28.5.2 |
if not in English, and if so required by the Lender, accompanied by a certified English translation and, in this case, the English translation will prevail unless
the document is a constitutional, statutory or other official document.
|
29 |
Calculations and Certificates
|
29.1 |
Accounts In any litigation or arbitration proceedings arising
out of or in connection with a Finance Document, the entries made in the accounts maintained by the Lender pursuant to Clause 26.6 (Control
account) are, in the absence of manifest error, prima fade evidence of the matters to which they relate.
|
29.2 |
Certificates and determinations Any certification or
determination by the Lender of a rate or amount under any Finance Document is, in the absence of manifest error, conclusive evidence of the matters to which it relates.
|
29.3 |
Day count convention Any interest, commission or fee accruing
under a Finance Document will accrue from day to day and is calculated on the basis of the actual number of days elapsed and a year of 360 days or, in any case where the practice in the Relevant Interbank Market differs, in accordance
with that market practice.
|
30 |
Partial Invalidity
|
31 |
Remedies and Waivers
|
32 |
Confidentiality
|
32.1 |
Confidential Information The Lender agrees to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent permitted by
Clause 32.2 (Disclosure of Confidential Information) and Clause 32.3 (Disclosure to numbering service providers).
|
32.2 |
Disclosure of Confidential Information The Lender may
disclose:
|
|
32.2.1 |
to any of its Affiliates and Related Funds and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives
such Confidential Information as the Lender shall consider appropriate if any person to whom the Confidential Information is to be given pursuant to this Clause 32.2.1 is informed in writing of its confidential nature and that some or all
of such Confidential Information may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of the information or
is otherwise bound by requirements of confidentiality in relation to the Confidential Information;
|
|
32.2.2 |
to any person:
|
|
(a) |
to (or through) whom it assigns or transfers (or may potentially assign or transfer) all or any of its rights and/or obligations under
|
|
(b) |
with (or through) whom it enters into (or may potentially enter into), whether directly or indirectly, any sub-participation in relation to, or any other
transaction under which payments are to be made or may be made by reference to, one or more Finance Documents and/or one or more Obligors and to any of that person’s Affiliates, Related Funds, Representatives and professional advisers;
|
|
(c) |
appointed by the Lender or by a person to whom Clause 32.2.2(a) or 32.2.2(b) applies to receive communications, notices, information or documents delivered pursuant
to the Finance Documents on its behalf;
|
|
(d) |
who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in Clause 32.2.2(a) or
32.2.2(b);
|
|
(e) |
to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory
authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation;
|
|
(f) |
to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations,
proceedings or disputes;
|
|
(g) |
who is a Party; or
|
|
(h) |
with the consent of the Borrowers;
|
|
(i) |
in relation to Clauses 32.2.2(a), 32.2.2(b) and 32.2.2(c), the person to whom the Confidential Information is to be given has entered into a Confidentiality
Undertaking except that there shall be no requirement for a Confidentiality Undertaking if the recipient is a professional adviser and is subject to professional obligations to maintain the confidentiality of the Confidential Information;
|
|
(ii) |
in relation to Clause 32.2.2(d), the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking or is otherwise bound
by requirements of confidentiality in relation to the Confidential Information they receive and is informed that
|
|
(iii) |
in relation to Clauses 32.2.2(e) and 32.2.2(f), 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 the Lender, it is not practicable so to do in the circumstances;
|
|
32.2.3 |
to any person appointed by the Lender or by a person to whom Clause 32.2.2(a) or 32.2.2(b) applies to provide administration or settlement services in respect of
one or more of the Finance Documents including without limitation, in relation to the trading of participations in respect of the Finance Documents, such Confidential Information as may be required to be disclosed to enable such service
provider to provide any of the services referred to in this Clause 32.2.3 if the service provider to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking; and
|
|
32.2.4 |
to any rating agency (including its professional advisers) such Confidential Information as may be required to be disclosed to enable such rating agency to carry
out its normal rating activities in relation to the Finance Documents and/or the Obligors and/or the Group 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.
|
32.3 |
Disclosure to numbering service providers
|
|
32.3.1 |
The Lender may disclose to any national or international numbering service provider appointed by the Lender to provide identification numbering services in respect
of this Agreement, the Loan and/or one or more Obligors the following information:
|
|
(a) |
names of Obligors;
|
|
(b) |
country of domicile of Obligors;
|
|
(c) |
place of incorporation of Obligors;
|
|
(d) |
date of this Agreement;
|
|
(e) |
Clause 34 (Governing law);
|
|
(f) |
date of each amendment and restatement of this Agreement;
|
|
(g) |
amount of the Loan;
|
|
(h) |
currencies of the Loan;
|
|
(i) |
type of Loan;
|
|
(j) |
ranking of the Loan;
|
|
(k) |
Termination Date;
|
|
(I) |
changes to any of the Information previously supplied pursuant to (a) to (I); and
|
|
(m) |
such other information agreed between the Lender and that Obligor,
|
|
32.3.2 |
The Parties acknowledge and agree that each identification number assigned to this Agreement, the Loan and/or one or more Obligors by a numbering service provider
and the information associated with each such number may be disclosed to users of its services in accordance with the standard terms and conditions of that numbering service provider.
|
|
32.3.3 |
Each Borrower represents that none of the information set out in Clauses 32.3.1(a) to 32,3.1(m) is, nor will at any time be, unpublished price-sensitive
information.
|
32.4 |
Entire agreement This Clause 32 constitutes the entire
agreement between the Parties in relation to the obligations of the Lender under the Finance Documents regarding Confidential Information and supersedes any previous agreement, whether express or implied, regarding Confidential
Information.
|
32.5 |
Inside information The Lender acknowledges that some or all
of the Confidential Information is or may be price-sensitive information and that the use of such information may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse
and the Lender undertakes not to use any Confidential Information for any unlawful purpose.
|
32.6 |
Notification of disclosure The Lender agrees (to the extent
permitted by law and regulation) to inform the Borrowers:
|
|
32.6.1 |
of the circumstances of any disclosure of Confidential Information made pursuant to Clause 32.2.2(e) (Disclosure of Confidential Information) except where such disclosure is made to any of the persons referred to in that Clause during the ordinary course of its supervisory or regulatory
function; and
|
|
32.6.2 |
upon becoming aware that Confidential Information has been disclosed in breach of this Clause 32.
|
32.7 |
Continuing obligations The obligations in this Clause 32 are
continuing and, in particular, shall survive and remain binding on the Lender for a period of 12 months from the earlier of:
|
|
32.7.1 |
the date on which all amounts payable by the Obligors under or in connection with the Finance Documents have been paid in full and the Loan has been cancelled or
otherwise ceases to be available; and Page 80
|
|
32.7.2 |
the date on which the Lender otherwise ceases to be the Lender.
|
33 |
Counterparts
|
Section 12 |
Governing Law and Enforcement
|
34 |
Governing Law
|
35 |
Enforcement
|
35.1 |
Jurisdiction of English courts The courts of England have
exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement (including a dispute relating to the existence, validity or termination of this Agreement or any non-contractual obligation arising out of or
in connection with this Agreement) (a “Dispute”). Each Party agrees that the courts of England are the most appropriate and convenient
courts to settle Disputes and accordingly no Party will argue to the contrary.
|
35.2 |
Service of process
|
|
35.2.1 |
Without prejudice to any other mode of service allowed under any relevant law, each Borrower:
|
|
(a) |
irrevocably appoints Hill Dickinson Services (London) Ltd of Broadgate Tower, 20 Primrose Street, London EC2A 2E, United Kingdom as its agent for service of process
in relation to any proceedings before the English courts in connection with any Finance Document; and
|
|
(b) |
agrees that failure by a process agent to notify that Borrower of the process will not invalidate the proceedings concerned.
|
|
35.2.2 |
If any person appointed as an agent for service of process is unable for any reason to act as agent for service of process or terminates its appointment as agent
for service of process, the relevant Borrower must immediately (and in any event within five days of such event taking place) appoint another agent on terms acceptable to the Lender„ Failing this, the Lender may appoint another agent for
this purpose.
|
1 |
Obligors
|
|
(a) |
Constitutional documents Copies of the constitutional documents of each Obligor together with such other evidence as the Lender may reasonably require that each Obligor is duly
incorporated in its country of incorporation and remains in existence with power to enter into, and perform its obligations under, the Relevant Documents to which it is or is to become a party.
|
|
(b) |
Certificates of good standing A certificate of good standing
in respect of each Obligor (if such a certificate can be obtained).
|
|
(c) |
Board resolutions A copy of a resolution of the board of
directors of each Obligor:
|
|
(i) |
approving the terms of, and the transactions contemplated by, the Relevant Documents to which it is a party and resolving that it execute those Relevant Documents;
and
|
|
(ii) |
authorising a specified person or persons to execute those Relevant Documents (and all documents and notices to be signed and/or dispatched under those documents)
on its behalf.
|
|
(d) |
Specimen signatures or Copy passports A specimen of the
signature or copy of the passport of each person authorised by the resolutions referred to in (c).
|
|
(e) |
Shareholder resolutions A copy of a resolution signed by all
the holders of the issued shares in each Obligor (other than the Guarantor and the Manager), approving the terms of, and the transactions contemplated by, the Relevant Documents to which that Obligor (other than the Guarantor and the
Manager) is a party.
|
|
(f) |
Extract of Shareholder resolutions A copy of the extract of
a resolution signed by the Secretary of the Manager, approving the terms of, and the transactions contemplated by, the Relevant Documents to which the Manager is a party.
|
|
(g) |
Officer’s certificates An original certificate of a duly
authorised officer of each Obligor:
|
|
(i) |
certifying that each copy document relating to it specified in this Part I of Schedule 1 is correct, complete and in full force and effect;
|
|
(ii) |
setting out the names of the directors, officers and shareholders of that Obligor (other than in respect of the shareholders of the
|
|
(iii) |
confirming that borrowing or guaranteeing or securing, as appropriate, the Loan would not cause any borrowing, guarantee, security or similar limit binding on that
Obligor to be exceeded.
|
|
(h) |
Powers of attorney The original notarially attested and
legalised power of attorney of each of the Obligors under which the Relevant Documents to which it is or is to become a party are to be executed or transactions undertaken by that Obligor.
|
2 |
Security and related documents
|
|
(a) |
Vessel documents Photocopies, certified as true, accurate and
complete by a director or the secretary or the legal advisers of the Borrowers, of:
|
|
(i) |
the MOA in respect of the Vessel;
|
|
(ii) |
the bill of sale transferring title in the Vessel to the relevant Borrower free of all encumbrances, maritime liens or other debts;
|
|
(iii) |
the protocol of delivery and acceptance evidencing the unconditional physical delivery of the Vessel by the relevant Seller to the relevant Borrower pursuant to the
MOA;
|
|
(ii) |
any charterparty or other contract of employment of the Vessel which will be in force on the Utilisation Date;
|
|
(ii) |
the Management Agreements in respect of the Vessel;
|
|
(iii) |
the Vessel’s current Safety Construction, Safety Equipment, Safety Radio, Oil Pollution Prevention and Load Line Certificates;
|
|
(iv) |
evidence of the Vessel’s current Certificate of Financial Responsibility issued pursuant to the United States Oil Pollution Act 1990;
|
|
(v) |
the Vessel’s current SMC;
|
|
(vi) |
the ISM Company’s current DOC;
|
|
(vii) |
the Vessel’s current ISSC;
|
|
(viii) |
the Vessel’s current IAPPC; and
|
|
(ix) |
the Vessel’s current Tonnage Certificate;
|
|
(b) |
Evidence of relevant Seller’s title Certificate of ownership and encumbrance (or equivalent) issued by the Registrar of Ships (or equivalent official) of the Vessel’s current flag confirming
that the Vessel is owned by
|
|
(c) |
Evidence of Borrower’s title Evidence that on the Utilisation
Date (i) the Vessel will be at least provisionally registered under the flag stated in Preliminary (A) in the ownership of the relevant Borrower and (ii) the Mortgage will be capable of being registered against the Vessel with first
priority.
|
|
(d) |
Evidence of insurance Evidence that the Vessel is insured in
the manner required by the Security Documents and that letters of undertaking will be issued in the manner required by the Security Documents, together with (if required by the Lender) the written approval of the Insurances by an
insurance adviser appointed by the Lender.
|
|
(e) |
Confirmation of class A Class Certificate and/or
Certificate of Confirmation of Class for hull and machinery confirming that the Vessel is classed with the highest class applicable to vessels of her type with Lloyd’s Register or such other classification society as may be acceptable to
the Lender free of any recommendations affecting class.
|
|
(f) |
Valuation Not more than 20 days prior to the relevant
Utilisation Date, a valuation of the Vessel addressed to the Lender from an Approved Shipbroker certifying the Market Value for the Vessel, acceptable to the Lender.
|
|
(g) |
Security Documents The Security Documents, together with all
other documents required by any of them, including, without limitation, all notices of assignment and/or charge and evidence that those notices will be duly acknowledged by the recipients.
|
|
(h) |
Clause 20.2 In respect of the relevant Utilisation Date,
evidence that Clause 20.2 (Cash Collateral Amount) has been complied with to the absolute satisfaction of the Lender.
|
|
(i) |
Mandates Such duly signed forms of mandate, and/or other
evidence of the opening of the Earnings Accounts, as the Lender may require.
|
|
(j) |
No disputes The written confirmation of the Borrowers that
there is no dispute under any of the Relevant Documents as between the parties to any such document.
|
|
(k) |
Ultimate beneficial owner Evidence of the Borrowers’ ultimate
beneficial owner(s) in a form and substance acceptable to the Lender prior to the date of this Agreement.
|
|
(l) |
Other Relevant Documents Copies of each of the Relevant
Documents not otherwise comprised in the documents listed in this Part I of Schedule 1.
|
|
(m) |
Equity Contribution If applicable, evidence of full payment
to the Seller of any part of the purchase price of the Vessel under the relevant MOA which is payable on or before the relevant Utilisation Date and which is not being financed by the Loan.
|
3 |
Legal opinions
|
|
(a) |
a legal opinion of Stephenson Harwood LLP, legal advisers to the Lender as to English law substantially in the form provided to the Lender prior to signing
this Agreement;
|
|
(b) |
a legal opinion of the following legal advisers to the Lender:
|
|
(i) |
Herring Parry Khan Law Office (part of Ince Gordon Dadds International), as to Liberian law; and
|
|
(ii) |
Herring Parry Khan Law Office (part of Ince Gordon Dadds International), as to Marshal Islands law.
|
4 |
Other documents and evidence
|
|
(a) |
Utilisation Request A duly completed Utilisation
Request.
|
|
(b) |
Process agent Evidence that any process agent referred
to in Clause 35.2 (Service of process) and any process agent appointed under any other Finance Document has accepted its
appointment.
|
|
(c) |
Other Authorisations A copy of any other Authorisation
or other document, opinion or assurance which the Lender considers to be necessary or desirable (if it has notified the Borrowers accordingly) in connection with the entry into and performance of the transactions contemplated by
any Relevant Document or for the validity and enforceability of any Relevant Document.
|
|
(d) |
Financial statements A copy of the Original Financial
Statements of the Guarantor.
|
|
(e) |
Fees Evidence that the fees, costs and expenses then due from the
Borrowers under Clause 11 (Fees) and Clause 16 (Costs and Expenses) have been paid or will be paid by the relevant Utilisation Date. |
|
(f) |
“Know your customer” documents Such documentation and
other evidence as is reasonably requested by the Lender prior to the execution of this Agreement in order for the Lender to comply with all necessary “know your customer” or similar identification procedures in relation to the
transactions contemplated in the Finance Documents including (without limitation) all documents required under any regulation or laws in force in the United Kingdom and the Regulation 281/2009 of the Central Bank of Greece, such
documents to be to the absolute satisfaction of the Lender. The Borrowers shall provide the Lender with evidence that the Borrowers, the Guarantor and all their respective corporate shareholders (if any) have issued registered
shares.
|
1 |
Evidence of Borrower’s title Certificate of ownership and encumbrance (or equivalent) issued by the Registrar of Ships (or equivalent official) of the flag stated in Preliminary
(A) confirming that (a) the Vessel is permanently registered under that flag in the ownership of the relevant Borrower, (b) the Mortgage has been registered with first priority against the Vessel and (c) there are no further
Encumbrances registered against the Vessel.
|
2 |
Letters of undertaking Letters of undertaking in
respect of the Insurances as required by the Security Documents together with copies of the relevant policies or cover notes or entry certificates duly endorsed with the interest of the Lender.
|
3 |
Acknowledgements of notices Acknowledgements of all
notices of assignment and/or charge given pursuant to the Security Documents.
|
4 |
Legal opinions Such of the legal opinions specified in
Part I of this Schedule 1 as have riot already been provided to the Lender.
|
From: |
Kea Shipowners Ltd
Spetses Shipowners Ltd Hydra Shipowners Ltd |
To: |
HSBC BANK plc
|
Dated: |
________________ 2019
|
1 |
We refer to the Agreement. This is the Utilisation Request. Terms defined in the Agreement have the same meaning in this Utilisation Request unless given a
different meaning in this Utilisation Request.
|
2 |
We wish to borrow the Loan on the following terms:
|
3 |
We confirm that each condition specified in Clause 4.2 (Further
conditions precedent) is satisfied on the date of this Utilisation Request.
|
4 |
The proceeds of the Loan should be paid towards [
|
5 |
This Utilisation Request is irrevocable.
|
To: |
HS BC BANK plc
|
From: |
Kea Shipowners Ltd
Spetses Shipowners Ltd Hydra Shipowners Ltd Euroseas Ltd. |
1 |
Werefer to the Agreement. This is El Compliance Certificate. TerrnS defined M the Agreement have the same meaning when used in this Compilionce Certificate
unlless given a different meaning in this Compliance Certificate%
|
2 |
We confirm that Euroseas Ltd. maintains:
|
|
(b) |
Liquidity of an amount: of not less than:
|
|
(a) |
$200,00o in respect of each Fleet Vessel from the date of theis Agreement up to and including 29 September 2020; and
|
|
(b) |
$300,000 from 30 September 2020 and throughout the remainder of the Facility Period; and
|
|
(c) |
Net Worth of not less than $15,000,000.
|
3 |
We confirm that no Default is continuing.
|
Signed
|
||||
|
Director |
Director
|
||
|
of Kea Shipowners Ltd |
of Kea Shipowners Ltd
|
Director
|
Director
|
|||
of Spetses Shipowners Ltd
|
of Spetses Shipowners Ltd
|
Director
|
Director
|
|||
of Hydra Shipowners Ltd
|
of Hydra Shipowners Ltd
|
Director
|
Director
|
|||
of Euroseas Ltd.
|
of Euroseas Ltd.
|
Kea Shipowners Ltd
|
)
|
|
By: STEFANIA KARMIRI
|
)
|
|
Address: c/o o Eurobulk Ltd.
|
)
|
|
4 Messogiou & Evropis
|
)
|
/s/ STEFANIA KARMIRI
|
Maroussi, Athens, Greece
|
)
|
|
Fax no.: +30 211 180 4097
|
)
|
|
Department/Officer: Legal department
|
)
|
|
Spetses Shipowners Ltd
|
)
|
|
By: STEFANIA KARMIRI
|
)
|
|
Address: c/o o Eurobulk Ltd.
|
)
|
|
4 Messogiou & Evropis
|
)
|
s/ STEFANIA KARMIRI
|
Maroussi, Athens, Greece
|
)
|
|
Fax no.: +30 211 180 4097
|
)
|
|
Department/Officer: Legal department
|
)
|
|
Hydra Shipowners Ltd
|
)
|
|
By: STEFANIA KARMIRI
|
||
Address: c/o o Eurobulk Ltd.
|
)
|
s/ STEFANIA KARMIRI
|
4 Messogiou & Evropis
|
)
|
|
Maroussi, Athens, Greece
|
)
|
|
Fax no.: +30 211 180 4097
|
)
|
|
Department/Officer: Legal department
|
)
|
|
HSBC BANK plc
|
)
|
|
By:
|
)
|
|
Address: 8 Canada Square,
|
)
|
|
London E14 5HQ,
|
)
|
|
England
|
)
|
|
Fax no.: +44 (0)20 7991 4619
|
)
|
|
Department/Officer: Alastair Muir/
|
)
|
|
Head of European Corporate Banking Centre
|
Clause
|
Page
|
1
|
Purpose, definitions and construction
|
1
|
2
|
The Commitment and cancellation
|
18
|
3
|
Interest and Interest Periods
|
20
|
4
|
Repayment and prepayment
|
24
|
5
|
Fees and expenses
|
27
|
6
|
Payments and taxes; accounts and calculations
|
28
|
7
|
Representations and warranties
|
30
|
8
|
Undertakings
|
35
|
9
|
Conditions
|
47
|
10
|
Events of Default
|
48
|
11
|
Indemnities
|
52
|
12
|
Unlawfulness, increased costs and bail-in
|
53
|
13
|
Application of moneys, set off, pro-rata payments and miscellaneous
|
55
|
14
|
Accounts
|
57
|
15
|
Assignment, transfer and lending office
|
58
|
16
|
Notices and other matters
|
59
|
17
|
Governing law
|
61
|
18
|
Jurisdiction
|
61
|
19
|
Borrowers' obligations
|
63
|
Schedule 1 Form of Drawdown Notice
|
66
|
|
Schedule 2 Conditions precedent
|
68
|
|
Schedule 3 Form of Compliance Certificate
|
73
|
|
Execution Page
|
75
|
(1) |
ANTWERP SHIPPING LTD, BUSAN SHIPPING LTD, KEELUNG SHIPPING LTD and OAKLAND SHIPPING LTD as joint and several Borrowers; and
|
(2) |
PIRAEUS BANK S.A. as Lender.
NOW IT IS HEREBY AGREED AS FOLLOWS: |
1 |
PURPOSE, DEFINITIONS AND CONSTRUCTION
|
1.1 |
Purpose
|
1.2 |
Definitions
|
|
(a) |
any repayment or prepayment of the Loan or any part thereof otherwise than (i) in accordance with clause 4.1, or (ii) on an Interest Payment Date whether on a voluntary or involuntary basis or otherwise howsoever; or
|
|
(b) |
the Borrowers failing or being incapable of drawing the Loan after the Drawdown Notice has been given;
|
|
(i) |
sections 1471 to 1474 of the US Internal Revenue Code of 1986 (the "Code") or any associated regulations or other official guidance;
|
|
(ii) |
any treaty, law, regulation or other official guidance enacted in any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of
paragraph (a) above; or
|
|
(iii) |
any agreement pursuant to the implementation of paragraphs (a) or (b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction;
|
|
(i) |
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
|
|
(ii) |
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) |
'The International Management Code for the Safe Operation of Ships and for Pollution Prevention', currently known or referred to as the 'ISM Code', adopted by the Assembly of the International Maritime Organisation by Resolution
A.741(18) on 4 December 1993 and incorporated on 19 May 1994 into Chapter IX of the International Convention for Safety of Life at Sea 1974 (SOLAS 1974); and
|
|
(b) |
all further resolutions, circulars, codes, guidelines, regulations and recommendations which are now or in the future issued by or on behalf of the International Maritime Organisation or any other entity with responsibility for
implementing the ISM Code, including, without limitation, the 'Guidelines on implementation or administering of the International Safety Management (ISM) Code by Administrations' produced by the International Maritime Organisation
pursuant to Resolution A.788(19) adopted on 25 December 1995,
|
|
(a) |
the applicable Screen Rate at or about 11.45 a.m. (London time) on the Quotation Day for Dollars and for a period equal in length to the Interest Period then applicable to the Loan or that part of the Loan; or
|
|
(b) |
in case of Screen Rate Replacement Event, the Replacement Benchmark on the Quotation Day for Dollars and for a period equal in length to the Interest Period,
|
|
(a) |
in relation to each of Vessel A and Vessel B, the first preferred Marshall Islands mortgage of such Vessel required to be executed hereunder by the Owner thereof; and
|
|
(b) |
in relation to each of Vessel C and Vessel D, the first priority Cypriot statutory mortgage and deed of covenant collateral thereto required to be executed hereunder by the Owner thereof,
|
|
(a) |
formally designated, nominated or recommended as the replacement for a Screen Rate by:
|
|
(i) |
the administrator of that Screen Rate (provided that the market or economic reality that such benchmark rate measures is the same as that measured by that Screen Rate); or
|
|
(ii) |
any Relevant Nominating Body,
|
|
(b) |
in the opinion of the Lender and the Borrower, generally accepted in the international loan markets as the appropriate successor to a Screen Rate; or
|
|
(c) |
in the opinion of the Lender and the Borrower, an appropriate successor to a Screen Rate;
|
|
(i) |
listed on, or directly or indirectly owned or controlled (as such terms are defined by the relevant Sanctions Authority) by a person listed on, any Sanctions List;
|
|
(ii) |
located in, incorporated under the laws of, or owned or controlled by, or acting on behalf of, a person located in or organised under the laws of, a country or territory that is the target of country or territory -wide Sanctions ("Sanctions Restricted Jurisdiction"); or
|
|
(iii) |
otherwise a target of Sanctions;
|
|
(i) |
the United States government;
|
|
(ii) |
the United Nations;
|
|
(iii) |
the European Union or any of its Member States;
|
|
(iv) |
the United Kingdom;
|
|
(v) |
any country to which any Security Party or any other member of the Group or any affiliate of any of them is bound; or
|
|
(vi) |
the respective governmental institutions and agencies of any of the foregoing, including without limitation, the Office of Foreign Assets Control of the US Department of Treasury ("OFAC"), the United States Department of State, and Her Majesty's Treasury ("HMT") (together "Sanctions Authorities" and each, "Sanctions Authority");
|
|
(a) |
the methodology, formula or other means of determining that Screen Rate has, in the opinion of the Lender and the Borrower, materially changed;
|
|
(A) |
the administrator of that Screen Rate or its supervisor publicly announces that such administrator is insolvent; or
|
|
(B) |
information is published in any order, decree, notice, petition or filing, however described, or filed with a court, tribunal, exchange, regulatory authority or similar administrative, regulatory or judicial body which reasonably
confirms that the administrator of that Screen Rate is insolvent,
|
|
(ii) |
the administrator of that Screen Rate publicly announces that it has ceased or will cease, to provide that Screen Rate permanently or indefinitely and, at that time, there is no successor administrator to continue to provide that
Screen Rate;
|
|
(iii) |
the supervisor of the administrator of that Screen Rate publicly announces that such Screen Rate has been or will be permanently or indefinitely discontinued; or
|
|
(iv) |
the administrator of that Screen Rate or its supervisor announces that that Screen Rate may no longer be used; or
|
|
(v) |
in the opinion of the Lender and the Borrower, that Screen Rate is otherwise no longer appropriate for the purposes of calculating interest under this Agreement;
|
|
(i) |
the actual, constructive, compromised or arranged total loss of such Mortgaged Vessel; or
|
|
(ii) |
Compulsory Acquisition; or
|
|
(iii) |
any hijacking, theft, condemnation, capture, seizure, arrest, detention or confiscation of such Mortgaged Vessel not falling within the definition of
|
|
(a) |
a Borrower if it is resident for tax purposes in the USA; or
|
|
(b) |
a Security Party some or all of whose payments under the Security Documents are from sources within the USA for US federal income tax purposes;
|
1.3 |
Construction
|
1.3.1 |
clause headings and the index are inserted for convenience of reference only and shall be ignored in the construction of this Agreement;
|
1.3.2 |
references to clauses and schedules are to be construed as references to clauses of, and schedules to, this Agreement and references to this Agreement include its schedules and any supplemental agreements executed pursuant hereto;
|
1.3.3 |
references to (or to any specified provision of) this Agreement or any other document shall be construed as references to this Agreement, that provision or that document as in force for the time being and as duly amended and/or
supplemented and/or novated;
|
1.3.4 |
references to a "regulation" include any present or future regulation, rule, directive, requirement, request or guideline (whether or not having the force of law) of any Government Entity, central bank or any self-regulatory or other
supra-national authority;
|
1.3.5 |
references to any person in or party to this Agreement shall include reference to such person's lawful successors and assigns and references to the Lender shall also include a Transferee Lender;
|
1.3.6 |
words importing the plural shall include the singular and vice versa;
|
1.3.7 |
references to a time of day are, unless otherwise stated, to Athens time;
|
1.3.8 |
references to a person shall be construed as references to an individual, firm, company, corporation or unincorporated body of persons or any Government Entity;
|
1.3.9 |
references to a "guarantee" include references to an indemnity or any other kind of assurance whatsoever (including, without limitation, any kind of negotiable instrument, bill or note) against financial loss or other liability
including, without limitation, an obligation to purchase assets or services as a consequence of a default by any other person to pay any Indebtedness and "guaranteed" shall be construed accordingly;
|
1.3.10 |
references to any statute or other legislative provision are to be construed as references to any such statute or other legislative provision as the same may be re enacted or modified or substituted by any subsequent statute or
legislative provision (whether before or after the date hereof) and shall include any regulations, orders, instruments or other subordinate legislation issued or made under such statute or legislative provision;
|
1.3.11 |
a certificate by the Lender as to any amount due or calculation made or any matter whatsoever determined in connection with this Agreement shall be conclusive and binding on the Borrowers except for manifest error;
|
1.3.12 |
if any document, term or other matter or thing is required to he approved, agreed or consented to by the Lender such approval, agreement or consent must be obtained in writing unless the contrary is stated;
|
1.3.13 |
time shall be of the essence in respect of all obligations whatsoever of the Borrowers under this Agreement, howsoever and whensoever arising;
|
1.3.14 |
and the words "other" and "otherwise" shall not be construed eiusdem generis with any foregoing words where a wider construction is possible;
|
1.3.15 |
a Default and an Event of Default) is "continuing" if it has not been remedied or waived.
|
1.4 |
References to currencies
|
1.5 |
Contracts (Rights of Third Parties Act) 1999
|
2 |
THE COMMITMENT AND CANCELLATION
|
2.1 |
Agreement to lend
|
2.2 |
Drawdown
|
2.2.1 |
Subject to the terms and conditions of this Agreement, each Advance shall be made available to the Borrowers following receipt by the Lender from the Borrowers of a Drawdown Notice not later than 10:00 a.m. on the third Banking Day
before the date, which shall be a Banking Day falling within the Drawdown Period, on which the Borrowers propose that Advance is made available.
|
2.2.2 |
The Drawdown Notice shall be effective on actual receipt by the Lender and, once given, shall, subject as provided in clause 3.5, be irrevocable.
|
2.3 |
Limitation and application of Advances
|
2.3.1 |
The amount of the Loan shall not exceed the amount of the Loan Facility.
|
2.3.2 |
The principal amount specified in the Drawdown Notice for borrowing on a Drawdown Date shall, subject to the terms of this Agreement, not exceed:
|
|
(a) |
in respect of Advance A, an amount equal to the least of (i) eight million Dollars (USD8,000,000), (ii) 80% of the Purchase Price of Vessel A and (iii) 65.05% of the Valuation Amount of Vessel A (to be determined no more than 15 days
prior to the Drawdown Date in respect of Advance A), to be made available by the Lender to the Borrowers and be applied in or towards part-financing the purchase of Vessel A by Busan;
|
|
(b) |
in respect of Advance B, an amount equal to the least of (i) eight million Dollars (USD8,000,000), (ii) 80% of the Purchase Price of Vessel B and (iii) 65.05% of the Valuation Amount of Vessel B (to be determined no more than 15 days
prior to the Drawdown Date in respect of Advance B), to be made available by the Lender to the Borrowers and be applied in or towards part-financing the purchase of Vessel B by Antwerp;
|
|
(c) |
in respect of Advance C, an amount equal to the least of (i) eight million Dollars (USD8,000,000), (ii) 80% of the Purchase Price of Vessel C and (iii) 65.05% of the Valuation Amount of Vessel C (to be determined no more than 15 days
prior to the Drawdown Date in respect of Advance C), to be made available by the Lender to the Borrowers and be applied in or towards part-financing the purchase of Vessel C by Oakland; and
|
|
(d) |
in respect of Advance D, an amount equal to the least of (i) eight million Dollars (USD8,000,000), (ii) 80% of the Purchase Price of Vessel D and (iii) 65.05% of the Valuation Amount of Vessel D (to be determined no more than 15 days
prior to the Drawdown Date in respect of Advance D), to be made available by the Lender to the Borrowers and be applied in or towards part-financing the purchase of Vessel D by Keelung;
|
2.3.3 |
Each Advance shall be paid forthwith upon drawdown to such account of the Lender as the Borrowers shall stipulate in the relevant Drawdown Notice.
|
2.4 |
Availability
|
2.4.1 |
The Borrowers acknowledge that payment of an Advance referred to in clause 2.3.2 to the account or accounts specified in the Drawdown Notice shall satisfy the obligation of the Lender to lend that Advance to the Borrowers under this
Agreement.
|
2.5 |
Cancellation in changed circumstances
|
2.5.1 |
The Borrowers may at any time during the Facility Period by notice to the Lender (effective only on actual receipt) cancel with effect from a date not less than ten (10) Banking Days after receipt by the Lender of such notice, all or
part of the undrawn Total Commitment.
|
2.5.2 |
The Borrowers may also at any time during the Facility Period by notice to the Lender (effective only on actual receipt) prepay and/or cancel with effect from a date not less than ten (10) Banking Days after receipt by the Lender of
such notice, the whole but not part only, but without prejudice to the Borrowers' obligations under clauses 3.5, 6.6 and 12, of the Commitment (if any). Upon any notice of such prepayment and cancellation being given, the Commitment shall
be reduced to zero, the Borrowers shall be obliged to prepay the Loan and the Lender's related costs (including but not limited to Break Costs, if any) on such date, but always without any premium or penalty if such prepayment is effected
on the next Interest Payment Date, and the Lender shall be under no obligation to make available the Loan.
|
2.6 |
Use of proceeds
|
2.6.1 |
Without prejudice to the Borrowers' obligations under clause 8.1.4, the Lender shall not have any responsibility for the application of the proceeds of any Advance or any part thereof by the Borrowers.
|
2.6.2 |
The Borrowers shall not, and shall procure that each Security Party and each other Group Member and any Subsidiary of any of them shall not, permit or authorise any other person to, directly or indirectly, use, lend, make payments of,
contribute or otherwise make available, all or any part of the proceeds of the Loan or other transactions contemplated by this Agreement to fund or facilitate trade, business or other activities: (i) involving or for the benefit of any
Restricted Person; or (ii) in any other manner that could result in a Borrower or any other Security Party being in breach of any Sanctions or becoming a Restricted Person.
|
2.6.3 |
It is prohibited to use any part of the proceeds of the Loan for the purposes of acquiring shares in the share capital of the Lender or other banks and/or financial institutions or acquiring hybrid capital debentures (TITAmc
v(3Q1bucc3v icapaAaicov) of the Lender or other banks and/or financial institutions.
|
3 |
INTEREST AND INTEREST PERIODS
|
3.1 |
Normal interest rate
|
3.2 |
Selection of Interest Periods
|
3.3 |
Determination of Interest Periods
|
3.3.1 |
the first Interest Period in respect of the first Advance to be made hereunder shall start on the Drawdown Date in respect thereof, and each subsequent Interest Period relating to the first Advance shall start the day falling the day
after the last day of the previous Interest Period;
|
3.3.2 |
the first Interest Period in respect of each subsequent Advance to be made hereunder shall commence on its Drawdown Date and each subsequent Interest Period shall start the day falling the day after the last day of the previous
Interest Period;
|
3.3.3 |
if any Interest Period would otherwise overrun a Repayment Date, then in the case of the last Repayment Date, such Interest Period shall end on the Maturity Date, and in the case of any other Repayment Date, the Loan shall be divided
into parts so that there is one part in the amount of the Repayment Instalment due on such Repayment Date and having an Interest Period ending on the relevant Repayment Date and another part in the amount of the balance of the Loan having
an Interest Period ascertained in accordance with clause 3.2 and the other provisions of this clause 3.3;
|
3.3.4 |
if the Borrowers fail to specify the duration of an Interest Period in accordance with the provisions of clause 3.2 and this clause 3.3, such Interest Period shall have a duration of three (3) months or such other period as shall
comply with this clause 3.3.
|
3.4 |
Default interest
|
3.5 |
Market disruption; non-availability
|
3.5.1 |
Market Disruption Event: If and whenever, at any time prior to the commencement of any Interest Period, the Lender (in its discretion) shall have determined (which determination shall be conclusive in the absence of manifest
error) that a Market Disruption Event has occurred in relation to the Loan for any such Interest Period, then the Lender shall forthwith give notice thereof (a "Determination Notice") to the Borrowers and the rate of interest on the Loan (or the relevant part thereof) for that Interest Period shall be the percentage rate per annum which is the sum of
|
|
(a) |
the Margin; and
|
|
(b) |
the rate which expresses as a percentage rate per annum the cost to the Lender of funding the Loan (or the relevant part thereof) from whatever source it may select.
|
3.5.2 |
Suspension of drawdown: If the Determination Notice is given before the Commitment (or a part thereof) is advanced, the Lender's obligation to make the Commitment (or a part
thereof) available shall be suspended while the circumstances referred to in the Determination Notice continue.
|
3.5.3 |
Meaning of "Market Disruption Event": In this Agreement "Market Disruption Event" means:
|
|
(a) |
at or about noon on the Quotation Day for the relevant Interest Period no Screen Rate is available for Dollars or Replacement Benchmark; and/or
|
|
(b) |
before close of business on the Quotation Day for the relevant Interest Period, the Lender determines (in its sole discretion) that the cost to it of obtaining matching deposits in the London Interbank Market or the international
market relevant to the Replacement Benchmark (as the case may be) to fund the Loan (or the relevant part thereof) for such Interest Period would be in excess of the Screen Rate or, as the case may be, the Replacement Benchmark for that
Interest Period; and/or
|
|
(c) |
before close of business on the Quotation Day for the relevant Interest Period, deposits in Dollars are not available to the Lender in the London Interbank Market or the international market relevant to the Replacement Benchmark (as
the case may be) in the ordinary course of business in sufficient amounts to fund the Loan (or the relevant part thereof) for that Interest Period.
|
3.5.4 |
Alternative basis of interest or funding
|
|
(a) |
If a Market Disruption Event occurs and the Lender or the Borrowers so require, the Lender and the Borrowers shall enter into negotiations (for a period of not more than fifteen (15) days (the "Negotiation
Period")) after the giving of the relevant Determination Notice with a view to agreeing a substitute basis for determining the rate of interest.
|
|
(b) |
Any alternative basis agreed pursuant to paragraph (i) above shall be binding on the Lender and all Security Parties.
|
3.5.5 |
Alternative basis of interest in absence of agreement: If the Lender and the Borrowers will not enter into negotiations as provided in Clause 3.5.4(a) or if an alternative interest rate or alternative basis is not agreed within
the Negotiation Period, and the relevant circumstances are continuing at the end of the Negotiation Period, then the Lender shall set the following Interest Period and an interest rate representing the cost of funding of the Lender in
Dollars of the Loan (or the relevant part thereof) plus the Margin for such Interest Period; if the relevant circumstances are continuing at the end of the Interest Period so set by the Lender, the Lender shall continue to set the
following Interest Period and an interest rate representing its cost of funding in Dollars of the Loan (or the relevant part thereof) plus the Margin for such Interest Period.
|
3.5.6 |
Notice of prepayment: If the Borrowers do not agree with an interest rate set by the Lender under Clause 3.5.5 (Alternative basis of interest in
absence of agreement), the Borrowers may give the Lender not less than 5 Banking Days' notice of its intention to prepay the Loan at the end of the interest period set by the Lender.
|
3.5.7 |
Prepayment; termination of Commitment: A notice under Clause 3.5.4 (Alternative basis of interest or
funding) shall be irrevocable; and on the last Banking Day of the interest period set by the Lender the Borrowers shall prepay (without premium or penalty) the Loan, together with accrued interest thereon at the applicable
rate plus the Margin and the balance of all other amounts payable under this Agreement and the other Security Documents or, if the Commitment has not been advanced, the Commitment shall be reduced to zero and the Loan shall not be made to
the Borrowers under this Agreement thereafter.
|
3.5.8 |
Application of prepayment: The provisions of Clause 4 (Repayment and Prepayment) shall apply in relation to the prepayment made hereunder.
|
3.6 |
Replacement of Screen Rate
|
|
(a) |
providing for the use of a Replacement Benchmark in relation to that currency in place of that Screen Rate ; and
|
|
(b) |
|
|
(i) |
aligning any provision of any Security 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
|
|
(iii) |
implementing market conventions applicable to that Replacement Benchmark;
|
|
(iv) |
providing for appropriate fallback (and market disruption) provisions for that Replacement Benchmark; or
|
|
(v) |
adjusting the pricing to reduce or eliminate, to the extent reasonably practicable, any transfer of economic value from one party hereto 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),
|
3.6.2 |
Interest Rate Swaps
|
4 |
REPAYMENT AND PREPAYMENT
|
4.1 |
Repayment
|
4.1.1 |
Subject as otherwise provided in this Agreement, the Borrowers must repay each Advance by (i) sixteen (16) consecutive instalments, the first three (3) in the amount of three hundred and fifty thousand Dollars (USD350,000) each and the
next thirteen (13) in the amount of two hundred thousand Dollars (USD200,000) each and (ii) an instalment (the "Balloon Instalment") of four million three hundred and fifty thousand Dollars (USD4,350,000), with the first such instalment
falling due on the date falling three months after the Drawdown Date and subsequent instalments falling due al quarterly intervals thereafter, with the final instalment and the Balloon Instalment falling due on the last Repayment Date for
that Advance.
|
4.1.2 |
If an Advance is not drawn in full, the amount of each Repayment Instalment including the Balloon Instalment relating to that Advance shall be reduced pro rata.
|
4.1.3 |
The Borrowers shall on the Maturity Date also pay to the Lender all other amounts in respect of interest or otherwise then due and payable under this Agreement and the Security Documents.
|
4.2 |
Voluntary prepayment
|
4.3 |
Mandatory Prepayment on Total Loss
|
|
(a) |
the Relevant Advance; and
|
|
(b) |
such amount as would be required to ensure that the Prepayment Security Value after such prepayment is at least equal to one hundred and thirty per cent (130%) of the Loan.
|
4.3.1 |
Interpretation
|
|
(a) |
in the case of an actual total loss of a Mortgaged Vessel, on the actual date and at the time such Mortgaged Vessel was lost or, if such date is not known, on the date on which such Mortgaged Vessel was last reported;
|
|
(b) |
in the case of a constructive total loss of a Mortgaged Vessel, upon the date and at the time notice of abandonment of such Mortgaged Vessel is given to the then insurers of such Mortgaged Vessel (provided a claim for total loss is
admitted by such insurers) or, if such insurers do not immediately admit such a claim, at the date and at the time at which either a total loss is subsequently admitted by such insurers or a total loss is subsequently adjudged by a
competent court of law or arbitration tribunal to have occurred;
|
|
(c) |
in the case of a compromised or arranged total loss of a Mortgaged Vessel, on the date upon which a binding agreement as to such compromised or arranged total loss has been entered into by the then insurers of such Mortgaged Vessel;
|
|
(d) |
in the case of Compulsory Acquisition, on the date upon which the relevant requisition of title or other compulsory acquisition occurs; and
|
|
(e) |
in the case of hijacking, theft, condemnation, capture, seizure, arrest, detention or confiscation of a Mortgaged Vessel (other than within the definition of Compulsory Acquisition) by any Government Entity, or by persons allegedly
acting or purporting to act on behalf of any Government Entity, which deprives its Owner of the use of that Mortgaged Vessel for more than sixty (60) days, upon the expiry of the period of sixty (60) days after the date upon which the
relevant incident occurred.
|
4.4 |
Mandatory prepayment on sale of Mortgaged Vessel
|
|
(a) |
the Relevant Advance; and
|
|
(b) |
such amount as would be required to ensure that the Prepayment Security Value after such prepayment is at least equal to one hundred and thirty per cent (130%) of the Loan.
|
4.5 |
Mandatory prepayment on failure to acquire the Vessel
|
|
(a) |
the Lender prepositioning an Advance or any part thereof with a Seller's bank in advance of the delivery of a Vessel to the relevant Borrower under SWIFT MT199 release instructions or equivalent; and
|
|
(b) |
funds representing that Advance or any part thereof being returned by the relevant Seller's bank to the relevant Earnings Account in accordance with the said SWIFT MT199 release instructions or equivalent,
|
4.6 |
Amounts payable on prepayment
|
4.6.1 |
accrued interest on the amount to be prepaid to the date of such prepayment;
|
4.6.2 |
any additional amount payable under clauses 3.5, 6.6 or 12.2; and
|
4.6.3 |
all other sums payable by the Borrowers to the Lender under this Agreement or any of the other Security Documents including, without limitation any Break Costs.
|
4.7 |
Notice of prepayment; reduction of Repayment Instalments
|
4.7.1 |
Every notice of prepayment shall be effective only on actual receipt by the Lender, shall be irrevocable, shall specify the amount to be prepaid and the Advance which is to be prepaid and shall oblige the Borrowers to make such
prepayment on the date specified.
|
4.7.2 |
Any amount prepaid pursuant to clause 4.2 shall be applied against the relevant Advance in reducing each Repayment Instalment (including the Balloon Instalment) pro rata.
|
4.7.3 |
Any amounts prepaid pursuant to clauses 4.3 and 4.4 shall be applied fully against the Relevant Advance and thereafter shall be applied pro rata against the Repayment Instalments of the remaining Advances which are at that time
outstanding (including the Balloon Instalments).
|
4.7.4 |
The Borrowers may not prepay the Loan or any part thereof except as expressly provided in this Agreement.
|
4.7.5 |
No amount repaid or prepaid may be re-borrowed
|
5 |
FEES AND EXPENSES
|
5.1 |
Arrangement fee
|
5.2 |
Expenses
|
5.2.1 |
in connection with the negotiation, preparation, execution and, where relevant, registration of the Security Documents and of any contemplated or actual amendment, or indulgence or the granting of any waiver or consent howsoever in
connection with, any of the Security Documents (including legal fees) (but excluding any such expense incurred in connection with the transfer, assignment or sub-participation of any of the rights and/or obligations of the Lender under
the Security Documents);
|
5.2.2 |
in contemplation or furtherance of, or otherwise howsoever in connection with, the exercise or enforcement of, or preservation of any rights, powers, remedies or discretions under any of the Security Documents, or in consideration of
the Lender's rights thereunder or any action proposed or taken following the occurrence of a Default or otherwise in respect of the moneys owing under any of the Security Documents; and
|
5.2.3 |
in connection with obtaining a written report from a maritime insurance consultant or broker acceptable to the Lender in relation to the Insurances of each Mortgaged Vessel (which the Lender may obtain not more than once a year, and at
any time when there has been a change of insurer or terms of cover for any Mortgaged Vessel, other than in respect of the insured value of that Mortgaged Vessel),
|
5.3 |
Value added tax
|
5.4 |
Stamp and other duties
|
6 |
PAYMENTS AND TAXES; ACCOUNTS AND CALCULATIONS
|
6.1 |
No set-off or counterclaim
|
6.2 |
Payment by the Lender
|
6.3 |
Non-Banking Days
|
6.4 |
Calculations
|
6.5 |
Currency of account
|
6.6 |
Grossing-up for Taxes - by the Borrowers
|
6.7 |
Claw back of Tax benefit
|
6.8 |
Loan account
|
6.9 |
Partial payments
|
6.9.1 |
first, in or towards payment, in such order as the Lender may decide, of any unpaid costs and expenses of the Lender under any of the Security Documents;
|
6.9.2 |
secondly, in or towards payment of any fees payable to the Lender under, or in relation to, the Security Documents which remain unpaid;
|
6.9.3 |
thirdly, in or towards payment to the Lender of any accrued default interest owing pursuant to clause 3.4 but remains unpaid;
|
6.9.4 |
fourthly, in or towards payment to the Lender of any accrued interest owing in respect of the Loan which shall have become due under any of the Security Documents but remains unpaid;
|
6.9.5 |
fifthly, in or towards payment to the Lender of any due hot unpaid Repayment Instalments; and
|
6.9.6 |
sixthly, in or towards payment to the Lender, on a pro rata basis, for any loss suffered by reason of any such payment in respect of principal not being effected on an Interest Payment Date relating to the part of the Loan repaid and
which amounts are so payable under this Agreement and any other sum relating to the Loan which shall have become due under any of the Security Documents but remains unpaid.
|
7 |
REPRESENTATIONS AND WARRANTIES
|
7.1 |
Continuing representations and warranties
|
7.1.1 |
Due incorporation
|
7.1.2 |
Corporate power
|
7.1.3 |
Binding obligations
|
7.1.4 |
No conflict with other obligations
|
7.1.5 |
No default
|
7.1.6 |
No litigation or judgments
|
7.1.7 |
No filings required
|
7.1.8 |
Required Authorisations and legal compliance
|
7.1.9 |
Choice of law
|
7.1.10 |
No immunity
|
7.1.11 |
Financial statements correct and complete
|
7.1.12 |
Pari passu
|
7.1.13 |
Information
|
7.1.14 |
No withholding Taxes
|
7.1.15 |
No Default under Underlying Documents
|
7.1.17 |
Copies true and complete
|
7.1.18 |
Ownership of Borrowers
|
7.1.19 |
No Indebtedness
|
7.1.20 |
Tax returns
|
7.1.21 |
Freedom from Encumbrances
|
7.1.22 |
Environmental Matters
|
|
(a) |
the Borrowers, the Manager and the other Group Members and, to the best of the Borrowers' knowledge and belief (having made due enquiry), their respective Environmental Affiliates have complied with the provisions of all Environmental
Laws;
|
|
(b) |
the Borrowers, the Manager and the other Group Members and, to the best of the Borrowers' knowledge and belief (having made due enquiry), their respective Environmental Affiliates have obtained all Environmental Approvals and are in
compliance with all such Environmental Approvals;
|
|
(c) |
no Environmental Claim has been made or threatened or pending against any of the Borrowers, the Manager, any other Group Member or, to the best of the Borrowers' knowledge and belief (having made due enquiry), any of their respective
Environmental Affiliates; and
|
|
(d) |
there has been no Environmental Incident;
|
7.1.23 |
ISM and ISPS Code
|
7.1.24 |
Accounting reference date
|
7.1.25 |
Office
|
7.1.26 |
Restricted Persons, unlawful activity
|
|
(a) |
none of the shares in any Borrower, in (to the best of its knowledge) the Corporate Guarantor, or in any other Security Party or any Vessel are or will be at any time during the Facility Period legally or beneficially owned or
controlled by a Restricted Person;
|
|
(b) |
no Restricted Person has or will have at any time during the Facility Period any legal or beneficial interest of any nature whatsoever in any of the shares of any of the Borrowers, (to the best of its knowledge) the Corporate
Guarantor, or any other Security Party or any Vessel;
|
7.1.27 |
Sanctions
|
7.1.28 |
FATCA
|
7.2 |
Repetition of representations and warranties
|
8 |
UNDERTAKINGS
|
8.1 |
General
|
8.1.1 |
Notice of Event of Default and Proceedings
|
8.1.2 |
Authorisation
|
8.1.3 |
Corporate Existence
|
8.1.4 |
Use of proceeds
|
8.1.5 |
Pari passu
|
8.1.6 |
Financial statements
|
8.1.7 |
Compliance Certificates
|
8.1.8 |
Financial Covenants
|
|
(a) |
the Net Worth of the Group will at all times exceed USD15,000,000; and
|
|
(b) |
the Total Liabilities divided by the Total Assets (each net of cash balance) shall at all times be no more than 75%;
|
8.1.9 |
Reimbursement of MII & MAP Policy premiums
|
8.1.10 |
Provision of further information
|
8.1.11 |
Obligations under Security Documents, etc.
|
8.1.12 |
Compliance with ISM Code
|
8.1.13 |
Withdrawal of DOC and SMC
|
8.1.14 |
Issuance of DOC and SMC
|
8.1.15 |
ISPS Code Compliance
|
|
(a) |
maintain at all times a valid and current ISSC in respect of each Mortgaged Vessel;
|
|
(b) |
immediately notify the Lender in writing of any actual or threatened withdrawal, suspension, cancellation or material modification of the ISSC in respect of a Mortgaged Vessel; and
|
|
(c) |
procure that each Mortgaged Vessel will comply at all times with the ISPS Code;
|
8.1.16 |
Compliance with Laws and payment of taxes
|
|
(a) |
comply with all relevant Environmental Laws, laws, statutes and regulations applicable to it and pay all taxes for which it is liable as they fall due; and
|
|
(b) |
comply in all respects with, and will procure that each Security Party and each other Group Member will comply in all respects with, all Sanctions;
|
8.1.17 |
Inspection
|
8.1.18 |
The Mortgaged Vessels
|
|
(a) |
in the absolute sole, legal and beneficial ownership of the relevant Owner and not held on trust for any third party;
|
|
(b) |
registered through the offices of the relevant Registry as a ship under the laws and flag of the relevant Flag State;
|
|
(c) |
in compliance with the ISM Code and the ISPS Code and operationally seaworthy and in every way fit for service;
|
|
(d) |
classed with the Classification free of all overdue requirements and recommendations of the Classification Society affecting the Classification;
|
|
(e) |
insured in accordance with the Ship Security Documents relating thereto; and
|
|
(f) |
managed by the Manager in accordance with the terms of the Management Agreement, which shall be acceptable to the Lender;
|
8.1.19 |
Charters
|
8.1.20 |
Chartering
|
|
(a) |
on demise charter for any period; or
|
|
(b) |
by any time or consecutive voyage charter for a term which exceeds or which by virtue of any optional extensions therein contained might exceed nine (9) months' duration; or
|
|
(c) |
on terms whereby more than two (2) months' hire (or the equivalent) is payable in advance;
|
8.1.21 |
Sanctions
|
|
(a) |
(to the best of its knowledge only in respect of an agent) not be, and shall procure that any Security Party and other Group Member, or any director, officer, agent, employee or person acting on behalf of the foregoing is not, a
Restricted Person and does not act directly or indirectly on behalf of a Restricted Person;
|
|
(b) |
, and shall procure that each Security Party and each other Group Member shall, not use any revenue or benefit derived from any activity or dealing with a Restricted Person in discharging any obligation due or owing to the Lender;
|
|
(c) |
procure that no proceeds from any activity or dealing with a Restricted Person are credited to any bank account held with the Lender in its name or in the name of any other member of the Group;
|
|
(d) |
take, and shall procure that each Security Party and each other Group Member has taken, reasonable measures to ensure compliance with Sanctions;
|
|
(e) |
, and shall procure that each Security Party and each other Group Member shall, to the extent permitted by law promptly upon becoming aware of them, supply to the Lender details of any claim, action, suit, proceedings or investigation
against it with respect to Sanctions by any Sanctions Authority;
|
|
(f) |
not accept, obtain or receive any goods or services from any Restricted Person, except (without limiting clause 8.1.21(b)), to the extent relating to any warranties and/or guarantees given and/or liabilities incurred in respect of an
activity or dealing with a Restricted Person by any Borrower, any other Security Party or any other Group Member in accordance with this Agreement;
|
8.1.22 |
Ownership
|
8.1.23 |
Cash Collateral
|
|
(a) |
if on each Drawdown Date in respect of Vessel B, Vessel C and Vessel D, the relevant Vessel is and will remain employed under its respective Approved Charter, the Cash Collateral will be immediately released to the Borrowers;
|
|
(b) |
on the Drawdown Date in respect of Vessel A the Cash Collateral will be released to the Borrowers PROVIDED THAT the Borrowers shall procure that, no later than the date falling 75 days after the Drawdown Date in respect of Vessel A,
Vessel A is employed under an Approved Charter and if on the date falling 75 days after the Drawdown Date in respect of Vessel A, Vessel A is not employed under an Approved Charter the Borrowers shall prepay the Loan in an amount
equivalent to the Cash Collateral in respect of Advance A, and the amount prepaid shall be applied against Advance A, first against the first three Repayment Instalments in order of maturity until each of such Repayment Instalments has
been reduced to USD200,000 and thereafter against the Balloon Instalment of Advance A;
|
8.1.24 |
Unencumbered liquidity
|
8.1.25 |
Listing
|
8.1.26 |
Shipping activities
|
8.1.27 |
Executive management
|
|
(a) |
Mr Aristeidis Pittas shall be the Chief Executive Officer or Chairman of the Corporate Guarantor; and
|
|
(b) |
the manager shall be managed and/or controlled by Mr Aristeidis Pittas or any other person acceptable to the Lender.
|
8.1.28 |
FATCA Information
|
|
(a) |
Subject to paragraph (c) below each party to any Security Document shall, within 10 Banking Days of a reasonable request by the other party to that Security Documents:
|
|
(i) |
confirm to that other party whether it is:
|
|
(A) |
a FATCA Exempt Party; or
|
|
(B) |
not a FATCA Exempt Party; and
|
|
(ii) |
supply to that other party such forms, documentation and other information relating to its status under FATCA as that other party reasonably requests for the purposes of that other party's compliance with FATCA;
|
|
(iii) |
supply to that other party such forms, documentation and other information relating to its status as that other party reasonably requests for the purposes of that other party's compliance with any other law, regulation, or exchange of
information regime;
|
|
(b) |
if a party to any Security Document 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 the other party reasonably promptly;
|
|
(c) |
paragraph (a) above shall not oblige the Lender to do anything, and paragraph (a)(iii) above shall not oblige any other party to any Security Document to do anything, which would or might in its reasonable opinion constitute a breach
of:
|
|
(i) |
any law or regulation;
|
|
(ii) |
any policy of the Lender;
|
|
(iii) |
any fiduciary duty; or
|
|
(iv) |
any duty of confidentiality;
|
|
(d) |
paragraph (a) above shall not oblige the Lender to do anything, and paragraph (a)(iii) above shall not oblige any other party to any Security Document to do anything, which would or might in its reasonable opinion cause it to disclose
any confidential information (including, without limitation, its tax returns and calculations); provided, however, that information required (or equivalent to
|
|
(e) |
if a party to any Security Document fails to confirm whether or not it is a FATCA Exempt Party, or to supply forms, documentation or other information requested in accordance with paragraph (a) (i) or (ii) above (including, for the
avoidance of doubt, where paragraph (c) above applies), then such party shall be treated for the purposes of the Security Documents (and payments under them) as if it is not a FATCA Exempt Party until (in each case) such time as that
party provides the requested confirmation, forms, documentation or other information.
|
8.1.29 |
FATCA Deduction
|
|
(a) |
A party to any Security Document may make any FATCA Deduction it is required to make by FATCA, and any payment required in connection with that FATCA Deduction, and no party to any Security Document shall be required to increase any
payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction.
|
|
(b) |
A party to any Security Document shall promptly, upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate
|
8.1.30 |
Equal treatment of lenders
|
8.2 |
Security value maintenance
|
8.2.1 |
Security shortfall
|
|
(a) |
prepay such part of the Loan as will result in the Security Value after such prepayment (taking into account any other repayment of the Loan made between the date of the notice and the date of such prepayment) being equal to or higher
than the Required Security Amount; or
|
|
(b) |
constitute to the satisfaction of the Lender such further security for the Loan as shall be acceptable to the Lender having a value for security purposes (as determined by the Lender in accordance with clause 8.2.5) at the date upon
which such further security shall be constituted which, when added to the Security Value, shall not be less than the Required Security Amount as at such date.
|
8.2.2 |
Valuation of Mortgaged Vessels
|
8.2.3 |
Information
|
8.2.4 |
Costs
|
8.2.5 |
Valuation of additional security
|
8.2.6 |
Documents and evidence
|
8.2.7 |
Release of Security
|
8.3 |
Negative undertakings relating to the Borrowers
|
8.3.1 |
Negative pledge
|
8.3.2 |
No merger or transfer
|
8.3.3 |
Disposals
|
8.3.4 |
Other business or manager
|
8.3.5 |
Acquisitions
|
8.3.6 |
Other obligations
|
8.3.7 |
No borrowing
|
8.3.8 |
Repayment of borrowings
|
8.3.9 |
Guarantees
|
8.3.10 |
Loans
|
8.3.11 |
Sureties
|
8.3.12 |
Flag, Class etc.
|
|
(a) |
any change in the name or flag of a Vessel;
|
|
(b) |
any change of Classification or Classification Society in respect of a Vessel;
|
|
(c) |
any change of Manager in respect of a Vessel; or
|
|
(d) |
any change in the ownership (including ultimate beneficial ownership) or control of a Borrower from that existing as at the date hereof and shall procure that there is no change in the ownership (including ultimate beneficial
ownership) or control of the Manager (if other than the Corporate Guarantor) from that existing as at the date hereof (and for the avoidance of doubt any change in the ownership of shares of and in the Corporate Guarantor occurring in the
normal course of business shall not constitute a breach of this clause);
|
8.3.13 |
Underlying Documents
|
8.3.14 |
Lay-up
|
8.3.15 |
Place of business
|
8.3.16 |
Share capital and distribution
|
8.3.17 |
Sharing of Earnings
|
8.3.18 |
Lawful use
|
|
(a) |
in any way or in any activity with a Restricted Person or in any Sanctions Restricted Jurisdiction or which is (i) unlawful under international law or the domestic laws of any relevant country or (ii) contrary to any Sanctions;
|
|
(b) |
to the best of its knowledge, in carrying illicit or prohibited goods;
|
|
(c) |
in a way which may make that Vessel liable to be condemned by a prize court or destroyed, seized or confiscated;
|
|
(d) |
in any part of the world where there are hostilities (whether war has been declared or not), unless such employment has been notified to, and approved by, the relevant insurers of that Vessel; or
|
|
(e) |
to the best of its knowledge, in carrying contraband goods,
|
8.3.19 |
FATCA
|
8.3.20 |
Sale or transfer of ownership of Vessel
|
9 |
CONDITIONS
|
9.1 |
Availability of the Advances
|
9.1.1 |
the Lender, or its authorised representative, having received, not later than two (2) Banking Days before the day on which the Drawdown Notice is given, the documents and evidence specified in Part 1 of schedule 2 in form and substance
satisfactory to the Lender; and
|
9.1.2 |
the representations and warranties contained in clause 7 being then true and correct as if each was made with respect to the facts and circumstances existing at such time and the same being unaffected by the drawdown of the Loan; and
|
9.1.3 |
no Default having occurred and being continuing and there being no Default which would result from the lending of the Advances.
|
9.2 |
Advance of the Advances
|
9.2.1 |
the obligation of the Lender to make available an Advance is conditional upon the Lender, or its authorised representative, having received, on or prior to the relevant Drawdown Date, the documents and evidence specified in Part 2 of
schedule 2 in form
|
9.3 |
Waiver of conditions precedent
|
9.4 |
Further conditions precedent
|
10 |
EVENTS OF DEFAULT
|
10.1 |
Events
|
10.1.1 |
Non-payment: any Security Party fails to pay any sum payable by it under any of the Security Documents to which it is a party at the time, in the currency and in the manner stipulated in the
Security Documents (and so that, for this purpose, sums payable (i) under clauses 3.1 and 4.1 shall be treated as having been paid at the stipulated time if (aa) received by the Lender within three (3) Banking Days of the dates therein
referred to and (bb) such delay in receipt is caused by administrative or other delays or errors within the banking system and (ii) on demand shall be treated as having been paid at the stipulated time if paid within three (3) Banking
Days of demand); or
|
10.1.2 |
Breach of Insurance and certain other obligations: a Borrower or, as the context may require, the Manager or any other person fails to obtain and/or maintain the Insurances for any of the
Mortgaged Vessels or if any insurer in respect of such Insurances cancels the Insurances or disclaims liability by reason, in either case, of mis-statement in any proposal for the Insurances or for any other failure or default on the part
of a Borrower or any other person or a Borrower commits any breach of or omits to observe any of the obligations or undertakings expressed to be assumed by it under clause 8 or clause 14;
|
10.1.3 |
Breach of other obligations: any Security Party commits any breach of or omits to observe any of its obligations or undertakings expressed to be assumed by it under any of the Security Documents
(other than those referred to in clauses 10.1.1 and 10.1.2 above) unless such breach or omission, in the opinion of the Lender is capable of remedy, in which case the same shall constitute an Event of Default if it has not been remedied
within fifteen (15) days of the occurrence thereof; or
|
10.1.4 |
Misrepresentation: any representation or warranty made or deemed to be made or repeated by or in respect of any Security Party in or pursuant to any of the Security Documents or in any notice,
certificate or statement referred to in or delivered under
|
10.1.5 |
Cross-default: any Indebtedness of any Borrower or any Indebtedness of the Corporate Guarantor exceeding USD1,000,000 is not paid when due (subject to applicable grace periods) or any Indebtedness of any Borrower or any Indebtedness of
the Corporate Guarantor exceeding USD1,000,000 becomes (whether by declaration or automatically in accordance with the relevant agreement or instrument constituting the same) due and payable prior to the date when it would otherwise have
become due (unless as a result of the exercise by a Borrower or the Corporate Guarantor of a voluntary right of prepayment), or any creditor of a Borrower or the Corporate Guarantor becomes entitled to declare any such Indebtedness due
and payable or any facility or commitment available to a Borrower or the Corporate Guarantor relating to Indebtedness is withdrawn, suspended or cancelled by reason of any default (however described) of the person concerned, and such
Indebtedness of a Borrower or the Corporate Guarantor (as the case may be) is not paid within fourteen (14) Banking Days from the due date for payment; or
|
10.1.6 |
Execution: any uninsured judgment or order made against any Security Party is not stayed, appealed against or complied with within fifteen (15) days or a creditor attaches or takes possession
of, or a distress, execution, sequestration or other process is levied or enforced upon or sued out against, any of the undertakings, assets, rights or revenues of any Security Party and is not discharged within twenty (20) days; or
|
10.1.7 |
Insolvency: any Security Party is unable or admits inability to pay its debts as they fall due; suspends making payments on any of its debts or announces an intention to do so; becomes
insolvent; or has negative net worth (taking into account contingent liabilities); or suffers the declaration of a moratorium in respect of any of its Indebtedness; or
|
10.1.8 |
Dissolution: any corporate action, Proceedings or other steps are taken to dissolve or wind-up any Security Party unless the Borrowers can demonstrate to the satisfaction of the Lender, by
providing an opinion of leading counsel that such corporate action, Proceedings or other steps are frivolous, vexatious or an abuse of the process of the court or an order is made or resolution passed for the dissolution or winding up of
any Security Party or a notice is issued convening a meeting for such purpose; or
|
10.1.9 |
Administration: any petition is presented, notice given or other steps are taken anywhere to appoint an administrator of any Security Party or an administration order is made in relation to any
Security Party; or
|
10.1.10 |
Appointment of receivers and managers: any administrative or other receiver is appointed anywhere of any Security Party or any material part of its
assets and/or undertaking or any other steps are taken to enforce any Encumbrance over all or any substantial part of the assets of any Security Party; or
|
10.1.11 |
Compositions: any corporate action, legal proceedings or other procedures or steps are taken or negotiations commenced, by any Security Party or by any of its creditors with a view to the
general readjustment or rescheduling of all or a substantial part of its Indebtedness or to proposing any kind of composition, compromise or arrangement involving such company and any of its creditors (excluding always negotiations with
holders of preferred shares); or
|
10.1.12 |
Analogous proceedings: there occurs, in relation to any Security Party, in any country or territory in which any of them carries on business or to the jurisdiction of whose courts any part of
their assets is subject, any event which, in the reasonable opinion of the Lender, appears in that country or territory to correspond with, or have an effect equivalent or similar to, any of those mentioned in clauses 10.1.6 to 10.1.11
(inclusive) or any Security Party otherwise becomes subject, in any such country or territory, to the operation of any law relating to insolvency, bankruptcy or liquidation; or
|
10.1.13 |
Cessation of business: any Security Party suspends or ceases or threatens to suspend or cease to carry on its business without the prior consent of the Lender; or
|
10.1.14 |
Seizure: all or a material part of the undertaking, assets, rights or revenues of, or shares or other ownership interests in, any Security Party are seized, nationalised, expropriated or
compulsorily acquired by or under the authority of any Government Entity and the same are not returned to the relevant Security Party within 45 days of such seizure, nationalisation, expropriation or compulsory acquisition; or
|
10.1.15 |
Invalidity: any of the Security Documents shall at any time and for any reason become invalid or unenforceable or otherwise cease to remain in full force and effect, or if the validity or
enforceability of any of the Security Documents shall at any time and for any reason be contested by any Security Party which is a party thereto, or if any such Security Party shall deny that it has any, or any further, liability
thereunder; or
|
10.1.16 |
Unlawfulness: any Unlawfulness occurs or it becomes impossible or unlawful at any time for any Security Party, to fulfil any of the covenants and obligations expressed to be assumed by it in any
of the Security Documents or for the Lender to exercise the rights or any of them vested in it under any of the Security Documents or otherwise; or
|
10.1.17 |
Repudiation: any Security Party repudiates any of the Security Documents or does or causes or permits to be done any act or thing evidencing an intention to repudiate any of the Security
Documents; or
|
10.1.18 |
Encumbrances enforceable: any Encumbrance (other than Permitted Encumbrances) in respect of any of the property (or part thereof) which is the subject of any of the Security Documents becomes
enforceable; or
|
10.1.19 |
Arrest: a Mortgaged Vessel is arrested, confiscated, seized, taken in execution, impounded, forfeited, detained in exercise or purported exercise of any possessory lien or other claim or
otherwise taken from the possession of its Owner and that Owner shall fail to procure the release of such Mortgaged Vessel within a period of fifteen (15) days thereafter; or
|
10.1.20 |
Registration: the registration of any Mortgaged Vessel under the laws and flag of the relevant Flag State is cancelled or terminated without the prior written consent of the Lender; or
|
10.1.21 |
Unrest: the Flag State of a Vessel becomes involved in hostilities or civil war or there is a seizure of power in the Flag State by unconstitutional means unless the Owner of the Vessel
registered in such Flag State shall have transferred its Vessel onto a new flag acceptable to the Lender within thirty (30) days of the Lender's written request to the Borrowers to effect such transfer; or
|
10.1.22 |
Environmental Incidents: an Environmental Incident occurs which gives rise, or may give rise, to an Environmental Claim which could, in the opinion of the Lender be expected to have a Material
Adverse Effect (i) on the financial condition of any Security Party or the Group taken as a whole or (ii) on the security constituted by any of the Security Documents or the enforceability of that security in accordance with its terms; or
|
10.1.23 |
P&I: an Owner or the Manager or any other person fails or omits to comply with any requirements of the protection and indemnity association or other insurer with which a Mortgaged Vessel is
entered for insurance or insured against protection and indemnity risks (including oil pollution risks) to the effect that any cover (including, without limitation, any cover in respect of liability for Environmental Claims arising in
jurisdictions where such Mortgaged Vessel operates or trades) is or may be liable to cancellation, qualification or exclusion at any time; or
|
10.1.24 |
Material events: any other event occurs or circumstance arises which, in the reasonable opinion of the Lender, is likely materially and adversely to affect either (i) the ability of any Security
Party to perform all or any of its obligations under or otherwise to comply with the terms of any of the Security Documents to which it is a party or (ii) the security created by any of the Security Documents or (iii) the value or nature
of the financial condition of any Security Party (other than the Manager); or
|
10.1.25 |
Required Authorisations: to the extent it has not been waived, any Required Authorisation is revoked or withheld or modified or is otherwise not granted or fails to remain in full force and
effect;
|
10.1.26 |
Money Laundering: any Security Party is in breach of or fails to observe any law, requirement, measure or procedure implemented to combat "money laundering" as defined in Article 1 of the
Directive (91/308 EEC) of the Council of the European Communities; or
|
10.1.27 |
Management Agreement: a Management Agreement is terminated, revoked, suspended, rescinded, transferred, novated or otherwise ceases to remain in full force and effect for any reason except with
the prior consent of the Lender; or
|
10.1.28 |
Change of Ownership: there is any change in the immediate and/or ultimate legal and/or beneficial ownership or control of any of the shares of a Borrower or the Shareholder from that existing on
the Execution Date (and for the avoidance of doubt any change in the ownership of shares of and in the Corporate Guarantor occurring in the normal course of business shall not constitute a breach of this clause); or
|
10.1.29 |
Sanctions: a Security Party fails to comply with clauses 7.1.26 (Restricted Persons, unlawful activity), 7.1.27 (Sanctions) or 8.1.21 (Sanctions) of this Agreement.
|
10.2 |
Acceleration
|
10.2.1 |
the obligation of the Lender to make its Commitment available shall be terminated, whereupon the Total Commitment shall be reduced to zero forthwith; and/or
|
10.2.2 |
the Loan and all interest accrued and all other sums payable whatsoever under the Security Documents have become due and payable, whereupon the same shall, immediately or in accordance with the terms of such notice, become due and
payable.
|
10.3 |
Demand Basis
|
11 |
INDEMNITIES
|
11.1 |
General indemnity
|
11.2 |
Environmental indemnity
|
11.3 |
Capital adequacy and reserve requirements indemnity
|
12 |
UNLAWFULNESS, INCREASED COSTS AND BAIL-IN
|
12.1 |
Unlawfulness
|
|
(a) |
have an adverse effect on its business, operations or financial condition; or
|
|
(b) |
involve it in any activity which is unlawful or prohibited or any activity that is contrary to, or inconsistent with, any regulation; or
|
|
(c) |
involve it in any expense (unless indemnified to its satisfaction) or tax disadvantage.
|
12.2 |
Increased costs
|
12.2.1 |
subject the Lender to Taxes or change the basis of Taxation of the Lender with respect to any payment under any of the Security Documents (other than Taxes or Taxation on the overall net income, profits or gains of the Lender imposed
in the jurisdiction in which its principal or lending office under this Agreement is located); and/or
|
12.2.2 |
increase the cost to, or impose an additional cost on, the Lender or its holding company in making or keeping the Commitment available or maintaining or funding all or part of the Loan; and/or
|
12.2.3 |
reduce the amount payable or the effective return to the Lender under any of the Security Documents; and/or
|
12.2.4 |
reduce the Lender's or its holding company's rate of return on its overall capital by reason of a change in the manner in which it is required to allocate capital resources to its obligations under any of the Security Documents; and/or
|
12.2.5 |
require the Lender or its holding company to make a payment or forgo a return on or calculated by reference to any amount received or receivable by it under any of the Security Documents; and/or
|
12.2.6 |
require the Lender or its holding company to incur or sustain a loss (including a loss of future potential profits) by reason of being obliged to deduct all or part of the Commitment or the Loan from its capital for regulatory
purposes,
|
|
(a) |
the Lender shall notify the Borrowers in writing of such event promptly upon its becoming aware of the same; and
|
|
(b) |
the Borrowers shall on demand made at any time whether or not the Loan has been repaid, pay to the Lender the amount which the Lender specifies (in a certificate setting forth the basis of the computation of such amount but not
including any matters which the Lender or its holding company regards as confidential) is required to compensate the Lender and/or (as the case may be) its holding company for such liability to Taxes, cost, reduction, payment , forgone
return or loss.
|
12.3 |
Exception
|
12.4 |
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 Security Document to the extent necessary to give effect to any Bail-In Action in relation to any such liability
|
13 |
APPLICATION OF MONEYS, SET OFF, PRO-RATA PAYMENTS AND MISCELLANEOUS
|
13.1 |
Application of moneys
|
13.1.1 |
first, in or towards payment, in such order as the Lender may decide, of any unpaid costs and expenses of the Lender under any of the Security Documents;
|
13.1.2 |
secondly, in or towards payment of any fees payable to the Lender under, or in relation to, the Security Documents which remain unpaid;
|
13.1.3 |
thirdly, in or towards payment to the Lender of any accrued default interest owing pursuant to clause 3.4 but remains unpaid;
|
13.1.4 |
fourthly, in or towards payment to the Lender of any accrued interest owing in respect of the Loan which shall have become due under any of the Security Documents but remains unpaid;
|
13.1.5 |
fifthly, in or towards payment to the Lender of any due but unpaid Repayment Instalments;
|
13.1.6 |
sixthly, in or towards payment to the Lender in application in repayment of the Loan in accordance with clause 4.7.2;
|
13.1.7 |
seventhly, in or towards payment for any loss suffered by reason of any such payment in respect of principal not being effected on an Interest Payment Date relating to the part of the Loan repaid and which amounts are so payable under
this Agreement and any other sum relating to the Loan which shall have become due under any of the Security Documents but remains unpaid; and
|
13.1.8 |
eighthly, the surplus (if any) shall be paid to the Borrowers or to whomsoever else may then be entitled to receive such surplus.
|
13.2 |
Set-off
|
13.2.1 |
Each Borrower irrevocably authorises the. Tender (without prejudice to any of the Lender's rights at law, in equity or otherwise), following the occurrence of an Event of Default which is continuing, and without notice to the
Borrowers, to apply any credit balance to which any Borrower is then entitled standing upon any account of any Borrower with any branch of the Lender in or towards satisfaction of any sum due and
|
13.2.2 |
The Lender shall not be obliged to exercise any right given to it by this clause 13.2. The Lender shall notify the Borrowers forthwith upon the exercise or purported exercise of any right of set off giving full details in relation
thereto.
|
13.2.3 |
Nothing in this clause 13.2 shall be effective to create a charge or other security interest.
|
13.3 |
Further assurance
|
13.4 |
Conflicts
|
13.5 |
No implied waivers, remedies cumulative
|
13.6 |
Scvcrability
|
13.7 |
Force Majeure
|
13.8 |
Amendments
|
13.9 |
Counterparts
|
13.10 |
English language
|
14 |
ACCOUNTS
|
14.1 |
General
|
14.1.1 |
it will on or before the Drawdown Date, open an Earnings Account in its name; and
|
14.1.2 |
all moneys payable to any Borrower in respect of the Earnings of its Mortgaged Vessel shall, unless and until the Lender directs to the contrary pursuant to the provisions of the relevant Mortgage, be paid to the Earnings Account in
the name of that Borrower, Provided however that if any of the moneys paid to such Earnings Account are payable in a currency other than USD, they shall be paid to a sub-account of that Earnings Account denominated in such currency
(except that if the relevant Borrower fails to open such a sub-account, the Lender shall then convert such moneys into USD at the Lender's spot rate of exchange at the relevant time for the purchase of USD with such currency and the term
"spot rate of exchange" shall include any premium and costs of exchange payable in connection with the purchase of USD with such currency).
|
14.2 |
Earnings Account: withdrawals
|
14.3 |
Application of accounts
|
15 |
ASSIGNMENT, TRANSFER AND LENDING OFFICE
|
15.1 |
Benefit and burden
|
15.2 |
No assignment by Borrowers
|
15.3 |
Transfer by Lender
|
15.4 |
Documenting transfers
|
15.5 |
Sub-Participation
|
15.6 |
Disclosure of information
|
16 |
NOTICES AND OTHER MATTERS
|
16.1 |
Notices
|
16.1.1 |
unless otherwise specifically provided herein, every notice under or in connection with this Agreement shall be given in English by letter delivered personally and/or sent by post and/or transmitted by fax and/or electronically;
|
16.1.2 |
in this clause "notice" includes any demand, consent, authorisation, approval, instruction, certificate, request, waiver or other communication.
|
16.2 |
Addresses for communications, effective date of notices
|
16.2.1 |
Subject to clause 16.2.2 and clause 16.2.5 notices to the Borrowers shall be deemed to have been given and shall take effect when received in full legible form by the Borrowers at the address and/or the fax number appearing below (or
at such other address or fax number or email address as the Borrowers may hereafter specify for such purpose to the Lender by notice in writing);
|
Address:
|
c/o Euroseas Ltd.
|
4 Messogiou & Evropis Street
|
|
151 24 Maroussi
|
|
Greece
|
|
Fax:
|
+30 211 1804097
|
Attn:
|
Anastasios Aslidis
|
Email:
|
aha@euroseas.gr
|
16.2.2 |
notwithstanding the provisions of clause 16.2.1 or clause 16.2.5, a notice of Default and/or a notice given pursuant to clause 10.2 or clause 10.3 to the Borrowers shall be deemed to have been given and shall take effect when
delivered, sent or transmitted by the Lender to the Borrowers to the address or fax number referred to in clause 16.2.1;
|
16.2.3 |
subject to clause 16.2.5, notices to the Lender shall be deemed to be given, and shall take effect, when received in full legible form by the Lender at the address and/or the fax number appearing below (or at any such other address or
fax number as the Lender may hereafter specify for such purpose to the Borrowers in writing);
|
Address:
|
170 Alexandras Ave.
|
11521 Athens
|
|
Greece
|
|
Fax No.
|
+30 210 3739783
|
Attention:
|
Thanassis Doudoulas / Olga Voutsa
|
Email:
|
DoudoulasA@piraeusbank.gr / VoutsaOl@piraeusbank.gr
|
16.2.4 |
subject to clause 16.2.5, notices to the Lender shall be deemed to be given and shall take effect when received in full legible form by the Lender at its address and/or fax number specified in the definition of "Lender" (or at any
other address or fax number as the Lender may hereafter specify for such purpose); and
|
16.2.5 |
if under clause 16.2.1 or clause 16.2.3 a notice would be deemed to have been given and effective on a day which is not a working day in the place of receipt or is outside the normal business hours in the place of receipt, the notice
shall be deemed to have been given and to have taken effect at the opening of business on the next working day in such place.
|
16.3 |
Electronic Communication
|
16.3.1 |
Any communication to be made by and/or between the Lender and the Security Parties or any of them under or in connection with the Security Documents or any of them may be made by electronic mail or other electronic means, if and
provided that all such parties:
|
|
(a) |
notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and
|
|
(b) |
notify each other of any change to their electronic mail address or any other such information supplied by them.
|
16.3.2 |
Any electronic communication made by and/or between the Lender and the Security Parties or any of them will be effective only when actually received in readable form.
|
16.3.3 |
The Lender and the Borrowers further agree that information may be sent via email to (or from) third parties involved in the provision of services. In particular, the Borrowers are aware that:
|
|
(a) |
the unencrypted information is transported over an open, publicly accessible network and can, in principle, be viewed by others, thereby allowing conclusions to be drawn about a banking relationship;
|
|
(b) |
the information can be changed and manipulated by a third party;
|
|
(c) |
the sender's identity (sender of the e-mail) can be assumed or otherwise manipulated;
|
|
(d) |
the exchange of information can be delayed or disrupted due to transmission errors, technical faults, disruptions, malfunctions, illegal interventions, network overload, the malicious blocking of electronic access by third parties, or
other shortcomings on the part of the network provider. In certain situations, time-critical orders and instructions might not be processed on time;
|
|
(e) |
the Lender assumes no liability for any loss incurred as a result of manipulation of the e-mail address or content nor is it liable for any loss incurred by the Borrowers and any other Security Party due to interruptions and delays in
transmission caused by technical problems.
|
16.3.4 |
The Lender is entitled to assume that all the orders and instructions, and communications in general, received from the Borrowers or a third party are from an authorized individual, irrespective of the existing signatory rights in
accordance with the commercial register (or any other applicable equivalent document) or the specimen signature provided to the Lender. The Borrowers shall further procure that all third parties referred to herein agree with the use of
emails and are aware of the above terms and conditions related to the use of email.
|
17 |
GOVERNING LAW
|
18 |
JURISDICTION
|
18.1 |
Exclusive Jurisdiction
|
18.1.1 |
to settle any disputes or other matters whatsoever arising under or in connection with this Agreement or any non-contractual obligation arising out of or in connection with this Agreement and any disputes or other such matters arising
in connection with the negotiation, validity or enforceability of this Agreement or any part thereof, whether the alleged liability shall arise under the laws of England or under the laws of some other country and regardless of whether a
particular cause of action may successfully be brought in the English courts; and
|
18.1.2 |
to grant interim remedies or other provisional or protective relief.
|
18.2 |
Submission and service of process
|
18.2.1 |
irrevocably empowers and appoints Messrs Hill Dickinson Services (London) Ltd at present of The Broadgate Tower, 20 Primrose Street, London EC2A 2EW, England as its agent to receive and accept on its behalf any process or other
document relating to any proceedings before the English courts in connection with this Agreement;
|
18.2.2 |
agrees to maintain such an agent for service of process in England from the date hereof until the end of the Facility Period;
|
18.2.3 |
agrees that failure by a process agent to notify the Borrowers of service of process will not invalidate the proceedings concerned;
|
18.2.4 |
without prejudice to the effectiveness of service of process on its agent under clause 18.2.1 above but as an alternative method, consents to the service of process relating to any such proceedings by mailing or delivering a copy of
the process to its address for the time being applying under clause 16.2; and
|
18.2.5 |
agrees that if the appointment of any person mentioned in clause 18.2.1 ceases to be effective, the Borrowers shall immediately appoint a further person in England to accept service of process on its behalf in England and, failing such
appointment within seven (7) days the Lender shall thereupon be entitled and is hereby irrevocably authorised by the Borrowers in those circumstances to appoint such person by notice to the Borrowers.
|
18.3 |
Forum non conveniens and enforcement abroad
|
18.3.1 |
waives any right and agrees not to apply to the English court or other court in any jurisdiction whatsoever to stay or strike out any proceedings commenced in England on the ground that England is an inappropriate forum and/or that
Proceedings have been or will be started in any other jurisdiction in connection with any dispute or related matter falling within clause 18.1; and
|
18.3.2 |
agrees that a judgment or order of an English court in a dispute or other matter falling within clause 18.1 shall be conclusive and binding on the Borrowers and may be enforced against it in the courts of any other jurisdiction.
|
18.4 |
Right of Lender, but not Borrowers, to bring proceedings in any other jurisdiction
|
18.4.1 |
Nothing in this clause 18 limits the right of the Lender to bring Proceedings, including third party proceedings, against the Borrowers or any of them, or to apply for interim remedies, in connection with this Agreement in any other
court and/or concurrently in more than one jurisdiction;
|
18.4.2 |
the obtaining by the Lender of judgment in one jurisdiction shall not prevent the Lender from bringing or continuing proceedings in any other jurisdiction, whether or not these shall be founded on the same cause of action.
|
18.5 |
Enforceability despite invalidity of Agreement
|
18.6 |
Effect in relation to claims by and against non-parties
|
18.6.1 |
For the purpose of this clause "Foreign Proceedings" shall mean any Proceedings except proceedings brought or pursued in England arising out of or in connection with (i) or in any way related to any of the Security Documents or any
assets subject thereto or (ii) any action of any kind whatsoever taken by the Lender pursuant thereto or which would, if brought by the Borrowers or any of them against the Lender, have been required to be brought in the English courts;
|
18.6.2 |
no Borrower shall not bring or pursue any Foreign Proceedings against the Lender and each Borrower shall use its best endeavours to prevent persons not party to this Agreement from bringing or pursuing any Foreign Proceedings against
the Lender;
|
18.6.3 |
If, for any reason whatsoever, any Security Party and/or any person connected howsoever with any Security Party (including but not limited to any shareholder of any Borrower) brings or pursues against the Lender any Foreign
Proceedings, the Borrowers shall indemnify the Lender on demand in respect of any and all claims, losses, damages, demands, causes of action, liabilities, costs and expenses (including, but not limited to, legal costs) of whatsoever
nature howsoever arising from or in connection with such Foreign Proceedings which the Lender certifies as having been incurred by it;
|
19 |
Borrowers' obligations
|
19.1 |
Joint and several
|
19.2 |
Borrowers as principal debtors
|
19.3 |
Indemnity
|
19.4 |
Liability unconditional
|
19.4.1 |
the death, bankruptcy, unsoundness of mind, insolvency, liquidation, dissolution, winding-up, administration, receivership, amalgamation, reconstruction or other incapacity of any person whatsoever (including, in the case of a
partnership, a termination or change in the composition of the partnership) or any change of name or style or constitution of any Borrower or any other person liable;
|
19.4.2 |
the Lender granting any time, indulgence or concession to, or compounding with, discharging, releasing or varying the liability of, any Borrower or any other person liable or renewing, determining, varying or increasing any
accommodation, facility or transaction or otherwise dealing with the same in any manner whatsoever or concurring in, accepting, varying any compromise, arrangement or settlement or omitting to claim or enforce payment from any Borrower or
any other person liable; or
|
19.4.3 |
anything done or omitted which but for this provision might operate to exonerate the Borrowers or any of them.
|
19.5 |
Recourse to other security
|
19.6 |
Waiver of Borrowers' rights
|
19.6.1 |
exercise any right of subrogation, reimbursement and indemnity against the other Borrowers or any other person liable under the Security Documents;
|
19.6.2 |
demand or accept repayment in whole or in part of any Indebtedness now or hereafter due to such Borrower from the other Borrower or from any other person liable for such Indebtedness or demand or accept any guarantee against financial
loss or any document or instrument created or evidencing an Encumbrance in respect of the same or dispose of the same;
|
19.6.3 |
take any steps to enforce any right against the other Borrowers or any other person liable in respect of any such moneys; or
|
Re: |
Facility agreement dated [ ] November 2019 in respect of a loan of up to USD32,000,000 (the "Loan Agreement") made between (1) [ ], [ ], [ ] and [ ] as Borrowers and (2) Piraeus Bank S.A. as Lender
|
(a) |
no Default has occurred and is continuing;
|
(b) |
the representations and warranties contained in clause 7 of the Loan Agreement are true and correct at the date hereof as if made with respect to the facts and circumstances existing at such date;
|
(c) |
the borrowing to be effected by the drawdown of the Loan will be within our corporate powers, has been validly authorised by appropriate corporate action and will not cause any limit on our borrowings (whether imposed by statute,
regulation, agreement or otherwise howsoever) to be exceeded;
|
(d) |
there has been no material adverse change in our financial position or in the consolidated financial position of the Borrowers or the Corporate Guarantor from that described by us to the Lender in the negotiation of the Loan Agreement
and/or in any documents or statements already delivered to the Lender in connection therewith;
|
(e) |
there are no Required Authorisations;
|
(f) |
there has occurred nothing which would have a Material Adverse Effect; and
|
(g) |
no part of the proceeds of the Loan shall be used for the purpose of acquiring shares in the share capital of the Lender or other banks and/or financial institutions or acquiring hybrid capital debentures (TI'rAouc u(3obuccbv icapaAai.cov) of the Lender or other banks and/or financial institutions.
|
(a) |
Corporate documents
|
(b) |
Corporate authorities
|
|
(i) |
Certified Copies of resolutions of the directors of each Security Party and shareholders of each Borrower approving such of the MOA and the Security Documents to which such Security Party is a party and authorising the execution and
delivery thereof and performance of such Security Party's obligations thereunder, additionally certified by an officer of such Security Party, as having been duly passed at a duly convened meeting of the directors and shareholders of such
Security Party and not having been amended, modified or revoked and being in full force and effect; and
|
|
(ii) |
an original of any power of attorney issued by each Security Party pursuant to such resolutions;
|
(c) |
Required Authorisations
|
(d) |
Certificate of incumbency
|
(e) |
Shareholders
|
(f) |
Security Documents
|
(g) |
Declaration of compliance / "know your customer"
|
|
(a) |
each Borrower has complied at all times and in all respects with (i) any relevant employment legislation and employment regulations applicable to it, (ii) all documentation required by the Lender in relation to the Lender's "know your
customer" requirements and (iii) all documentation required by the Lender for the opening of its Earnings Account with the Lender; and
|
|
(b) |
the Guarantor and the Shareholder have complied at all times and in all respects with all documentation required by the Lender in relation to the Lender's "know your customer" requirements; and
|
(h) |
Bank accounts
|
|
(i) |
the Earnings Accounts have been opened by Antwerp, Busan, Keelung and Oakland respectively and duly completed mandates in relation thereto have been delivered to the Lender;
|
|
(ii) |
all mandate forms and other legal documents required for the opening of an account under any applicable law, such as the account for the securitization of the Shares Pledge as well as signature cards and properly adopted authorizations
have been duly delivered to and have been accepted by the compliance department of the Lender;
|
(i) |
process agent
|
(a) |
Copies of Underlying Documents
|
(b) |
Evidence satisfactory to the Lender that the relevant Vessel:
|
|
i. |
Purchase
|
|
ii. |
Registration and Encumbrances
|
|
iii. |
Classification
|
|
iv. |
Insurance
|
|
v. |
Management.
|
(c) |
Security Documents
|
(d) |
Notices of assignment and acknowledgements
|
(e) |
Mortgage registration
|
(j) |
Laws of Liberia: opinion
|
(k) |
Laws of Marshall Islands: opinion
|
(1) |
Laws of Cyprus: opinion
|
(m) |
ISPS Code
|
(n) |
DOC and Application for SMC
|
(o) |
Additional Vessels' Certificates
|
(p) |
Lightweight
|
(q) |
Manager's confirmation
|
(r) |
Insurance Report
|
(s) |
Valuation
|
(t) |
Fees
|
(u) |
Material Adverse Effect
|
(v) |
MII and MAP Policy premium
|
(w) |
Equity contribution
|
(x) |
Further conditions precedent
|
|
1. |
all the Borrowers' financial covenants in the Loan Agreement set out in clause 8 are being fully complied with, and, in particular, by reference to the latest audited financial statements, management accounts and all other current
relevant information available to us:
|
|
(c) |
the Net Worth of the Group is USD [ ];
|
|
(d) |
the Total Liabilities are USD [ ] and the Total Assets (adjusted for market values of vessels calculated in accordance with clause 8.2.5(i)) are USD [ ]; and
|
|
(e) |
the Total Liabilities divided by the Total Assets (each net of cash balance) (adjusted for market values of vessels calculated in accordance with clause
|
|
3. |
the representations set out in clause 7 of the Loan Agreement are true and accurate with reference to all facts and circumstances now existing and all Required Authorisations have been obtained and are in full force and effect.
|
SIGNED BY STEFANIA KARMIRI
|
)
|
|
attorney-in-fact for and on behalf of
|
)
|
|
ANTWERP SHIPPING LTD
|
)
|
|
pursuant to a Power of Attorney
|
)
|
/s/ Stefania Karmiri
|
dated 4 November 2019
|
)
|
Attorney-in-fact
|
SIGNED BY STEFANIA KARMIRI
|
)
|
|
attorney-in-fact for and on behalf of
|
)
|
|
BUSAN SHIPPING LTD
|
)
|
|
pursuant to a Power of Attorney
|
)
|
/s/ Stefania Karmiri
|
dated 4 November 2019
|
)
|
Attorney-in-fact
|
SIGNED BY STEFANIA KARMIRI
|
)
|
|
attorney-in-fact for and on behalf of
|
)
|
|
KEELUNG SHIPPING LTD
|
)
|
|
pursuant to a Power of Attorney
|
)
|
/s/ Stefania Karmiri
|
dated 4 November 2019
|
)
|
Attorney-in-fact
|
SIGNED BY STEFANIA KARMIRI
|
)
|
|
attorney-in-fact for and on behalf of
|
)
|
|
OAKLAND SHIPPING LTD
|
)
|
|
pursuant to a Power of Attorney
|
)
|
/s/ Stefania Karmiri
|
dated 4 November 2019
|
)
|
Attorney-in-fact
|
SIGNED BY OLGA VOUTSA
|
)
|
|
and by EUGENIA KOUVARA
|
)
|
|
for and on behalf of
|
)
|
|
PIRAEUS BANK S.A.
|
)
|
/s/ Olga Voutsa /s/ Eugenia Kouvara
|
Authorised signatories
|
||
Witness to all the above signatures
|
)
|
|
Name: STAVROULA MYLONA
|
)
|
/s/ Stavroula Mylona
|
Address: Ince
|
)
|
|
Akti Miaouli 47-49
|
||
Piraeus 185 36 Greece
|
EUROSEAS LTD.
|
|||
By:
|
/s/ Dr. Anastasios (Tasos) Aslidis
|
||
Name:
|
Dr. Anastasios (Tasos) Aslidis
|
||
Title:
|
CFO & Treasurer
|
||
SYNERGY HOLDINGS LIMITED
|
|||
(FORMERLY KNOWN AS NAUTILUS HOLDINGS NO. 2 LIMITED)
|
|||
By:
|
|||
Name:
|
|||
Title:
|
By:
|
/s/ Nikolaos Priton
|
||
Name:
|
Nikolaos Priton
|
||
Title:
|
Attorney – in - fact
|
By:
|
/s/ Aristides J. Pittas
|
||
Name:
|
Aristides J. Pittas
|
||
Title:
|
Attorney – in - fact
|
(1) |
EUROSEAS LTD a company incorporated under the laws of the Marshall Islands, (the “Borrower”) and
|
(2) |
COLBY TRADING LTD, a company incorporated under the laws of the Marshall Islands (as “Lender”).
|
(A) |
By a loan facility dated 30 September 2019 (as from time to time amended or supplemented, the “Loan”) and made
between (i) the Borrower and (ii) the Lender, the Lender agreed to make available to the Borrower a loan facility of $2,500,000 for the purpose of financing the special survey and water ballasting treatment ("WBT") plant installation of my
Akinanda Bridge which is owned by a subsidiary of the Borrower and providing working capital financing on the terms and conditions contained therein.
|
(B) |
Whereas for reasons beyond Borrower's control the special survey and water ballasting treatment ("WBT") plant installation delayed and a result my Akinanda Bridge was delivered to her
charterers on 4 December 2019.
|
(C) |
The Borrower has requested (the "Request") that the Lender agrees to defer payment of the first repayment instalment in the amount of US$312,500 (which was originally due on 31 December
2019) to be repaid together with the last repayment instalment, i.e. 365 days after completion of the dry docking of my Akinada Bridge.
|
(D) |
This First Supplemental Agreement sets out the terms and conditions on which the Lender agrees to:
|
|
(i) |
the Borrower's Request; and
|
|
(ii) |
the consequential amendments to the Loan.
|
1 |
DEFINITIONS
|
1.1 |
Defined Expressions
|
2 |
REPRESENTATIONS AND WARRANTIES
|
2.1 |
Repetition of Loan representations
|
2.2 |
Further representations and warranties
|
(a) |
it has all power to enter into and perform its obligations under this First Supplemental Agreement;
|
(b) |
all consents, licences, approvals and authorizations required in connection with this First Supplemental Agreement and the transactions contemplated hereby and thereby have been obtained and
are in full force and effect; and
|
(c) |
no action, suit, proceeding or litigation is presently taking place or pending or, to its knowledge, is threatened against the Borrower which if adversely determined would result to a
Material Adverse Effect on the Borrower;
|
3 |
AGREEMENT OF THE LENDER
|
3.1 |
Agreement of the Lender
|
(a) |
the Request; and
|
(b) |
the amendments/variations to the Loan referred to in Article 5.
|
4 |
CONDITIONS
|
4.1 |
Conditions precedent
|
(a) |
in form and substance satisfactory to it and its legal advisors an original of this First Supplemental Agreement duly executed by the parties hereto; and
|
(b) |
such legal opinions as the Lender may reasonably require in respect of the matters contained in this First Supplemental Agreement;
|
5 |
VARIATIONS TO LOAN
|
5.1 |
Specific amendments to Loan
|
(a) |
by deleting Article 4.1 and replacing it with the following:
|
5.2 |
Loan to remain in full force and effect
|
(a) |
the amendments to the Loan; and
|
(b) |
such further or consequential modifications as may be necessary to make the same consistent with, and to give full effect to, the terms of this First Supplemental Agreement.
|
6 |
SUPPLEMENTAL
|
6.1 |
Counterparts
|
7.1 |
Governing law
|
7.2 |
Incorporation of the Loan Agreement provisions
|
|
BORROWER
|
||
SIGNED by Aristides J. Pittas
|
)
|
/s/ Aristides J. Pittas
|
for and behalf of
|
)
|
|
EUROSEAS LTD
|
)
|
|
in the presence of:
|
)
|
|
LENDER
|
||
)
|
||
SIGNED by Nikolaos Pittas
|
)
|
/s/ Nikolaos Pittas
|
for and behalf of
|
)
|
|
COLBY TRADING LTD
|
)
|
|
in the presence of:
|
||
(1) |
EUROSEAS LTD a company incorporated under the laws of the Marshall Islands, (the “Borrower”) and
|
(2) |
COLBY TRADING LTD, a company incorporated under the laws of the Marshall Islands (as “Lender”).
|
(A) |
By a loan facility dated 30 September 2019 as supplemented by a First Supplemental Agreement dated 20th December 2019 (as from time to time amended or supplemented, the “Loan”) and made between (i) the Borrower and (ii) the Lender, the Lender agreed to make available to the Borrower a loan facility of $2,500,000 for the purpose of financing the special survey and water
ballasting treatment (“WBT”) plant installation of my Akinanda Bridge which is owned by a subsidiary of the Borrower and providing working capital financing on the terms and conditions contained therein.
|
(B) |
Whereas the Borrower has requested (the “Request”) that the Lender agrees to defer payment of the first repayment instalment in the amount of
US$625,000 (which was originally due on 31 March 2020) to be repaid on 15 May 2020.
|
(C) |
This Second Supplemental Agreement sets out the terms and conditions on which the Lender agrees to:
|
(i) |
the Borrower’s Request; and
|
(ii) |
the consequential amendments to the Loan.
|
1 |
DEFINITIONS
|
1.1 |
Defined Expressions
|
2 |
REPRESENTATIONS AND WARRANTIES
|
2.1 |
Repetition of Loan representations
|
2.2 |
Further representations and warranties
|
(a) |
it has all power to enter into and perform its obligations under this Second Supplemental Agreement;
|
(b) |
all consents, licences, approvals and authorizations required in connection with this Second Supplemental Agreement and the transactions contemplated hereby and thereby have been obtained
and are in full force and effect; and
|
(c) |
no action, suit, proceeding or litigation is presently taking place or pending or, to its knowledge, is threatened against the Borrower which if adversely determined would result to a
Material Adverse Effect on the Borrower;
|
3 |
AGREEMENT OF THE LENDER
|
3.1 |
Agreement of the Lender
|
(a) |
the Request; and
|
(b) |
the amendments/variations to the Loan referred to in Article 5.
|
4 |
CONDITIONS
|
4.1 |
Conditions precedent
|
(a) |
in form and substance satisfactory to it and its legal advisors an original of this Second Supplemental Agreement duly executed by the parties hereto; and
|
(b) |
such legal opinions as the Lender may reasonably require in respect of the matters contained in this Second Supplemental Agreement;
|
5 |
VARIATIONS TO LOAN
|
5.1 |
Specific amendments to Loan
|
(a) |
by deleting Article 4.1 and replacing it with the following:
|
5.2 |
Loan to remain in full force and effect
|
(a) |
the amendments to the Loan; and
|
(b) |
such further or consequential modifications as may be necessary to make the same consistent with, and to give full effect to, the terms of this Second Supplemental Agreement.
|
6 |
SUPPLEMENTAL
|
6.1 |
Counterparts
|
7 |
LAW AND JURISDICTION
|
7.1 |
Governing law
|
7.2 |
Incorporation of the Loan Agreement provisions
|
|
BORROWER
|
||
SIGNED by Aristides J. Pittas
|
/s/ Aristides J. Pittas
|
|
for and behalf of
|
||
EUROSEAS LTD
|
||
in the presence of:
|
||
LENDER
|
||
SIGNED by Nikolaos Pittas
|
/s/ Nikolaos Pittas
|
|
for and behalf of
|
||
COLBY TRADING LTD
|
||
in the presence of:
|
||
COLBY TRADING LTD
|
||||
By:
|
/s/ Nikaloos Pittan
|
|||
Name: Nikaloos Pittan
|
||||
Title: Attorney-in-fact
|
||||
EUROSEAS LTD
|
||||
By:
|
/s/ Aristides S. Pittan
|
|||
Name: Aristides S. Pittan
|
||||
Title: Attorney-in-fact
|
||||
THE COMPANY:
|
||
EUROSEAS LTD.
|
||
By:
|
/s/ Dr. Anastasios (Tasos) Aslidis | |
Name: Dr. Anastasios (Tasos) Aslidis
|
||
Title: CFO & Treasurer
|
INVESTOR:
SYNERGY HOLDINGS LIMITED (formerly known as Nautilus Holdings No. 2 Limited) |
||
By:
|
||
Name:
|
||
Title:
|
|
2. |
Representations and Warranties of the Company as to Maritime Matters.
|
|
Very truly yours,
EUROSEAS LTD.
|
||
|
|
||
|
By:
|
/s/ Dr. Anastasios Aslidis
|
|
|
Name:
|
Anastasios Aslidis
|
|
|
Title:
|
Chief Financial Officer
|
|
|
||
|
|
||
By:
|
/s/ Clifford A. Teller
|
|
|
Name:
|
Clifford A. Teller
|
|
|
Title:
|
Executive Managing Director,
Head of Investment Banking
|
|
•
|
Simos Pariaros - smp@euroseas.gr
|
|
•
|
Tasos Aslidis - aha@euroseas.gr
|
From: |
Euroseas Ltd
|
To: |
Maxim Group LLC
|
Subject: |
Transaction Notice
|
Date: |
[•], 201 __
|
•
|
William Vitale, Head of Equity Trading, bvitale@maximgrp.com
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•
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Rich Vaughan - rvaughan@maximgrp.com
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•
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Robert Sayegh - rsayegh@maximgrp.com
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Subsidiary
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Country of Incorporation
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Gregos Shipping Limited
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Liberia
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Joanna Maritime Ltd
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Liberia
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Noumea Shipping Ltd
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Liberia
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Athens Shipping Ltd
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Marshall Islands
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Bridge Shipping Ltd
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Marshall Islands
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Corfu Navigation Ltd
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Marshall Islands
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Jonathan John Shipping Ltd
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Marshall Islands
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Manolis Shipping Limited
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Marshall Islands
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Oinousses Navigation Ltd
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Marshall Islands
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Allendale Investments S.A.
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Panama
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Alterwall Business Inc.
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Panama
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Trade Date:
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16/04/2020
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Effective Date:
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24/04/2020
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Termination Date:
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24/04/2025, subject to adjustment in accordance with the Modified Following Business Day Convention.
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FIXED AMOUNTS:
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Fixed Rate Payer:
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Party B
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Fixed Rate Payer Currency Amount:
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USD 30,000,000.00 as set forth in Schedule
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Transaction fee:
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In relation to each Calculation Period, 0.13% of the Notional Amount for such Calculation Period, embedded in the Fixed Rate. The total Transaction fee in respect of the Transaction is USD
197,816.65.
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Fixed Rate Payer Payment Dates:
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Quarterly, commencing on 24/07/2020 up to and including the Termination Date subject to adjustment in accordance with the Modified Following Business Day Convention and there will be an
adjustment to the Calculation Period.
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Initial Calculation Period:
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From and including 24/04/2020 to and excluding 24/07/2020.
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Fixed Rate:
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0.7800000 PERCENT
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Fixed Rate Day Count Fraction:
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ACT/360
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Business Days for Payment Date is:
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New York, London and Athens Settlement Days
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FLOATING AMOUNTS:
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Floating Rate Payer:
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Party A
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Floating Rate Payer Currency Amount:
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USD 30,000,000.00 as set forth in Schedule
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Floating Rate Payer Payment Dates:
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Quarterly, commencing on 24/0712020 up to and including the Termination Date subject to adjustment in accordance with the Modified Following Business Day Convention and there will be an
adjustment to the Calculation Period.
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Floor Rate:
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From 24/04,2020 up to and including 24/04.2025, 0.00000 PERCENT, in the event that the Relevant Rate determined in respect of a Calculation Period is less than 0.00% the Floating Rate for such
Calculation Period shall be 0.00%
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Initial Calculation Period
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From and including 24/04/2020 to and excluding 24/07/2020.
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Floating Rate Option
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USD-LIBOR-BBA
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Designated Maturity
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3 MONTHS
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Spread
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0.0000 bps
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Floating Rate Day Count Fraction
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ACT/360
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Reset Dates
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The First Date of each Calculation Period
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Yours sincerely,
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||||||
EUROBANK SA
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||||||
By:
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||||||
Confirmed as of the
Date first above written: |
||||||
By:
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/s/ Aristides J. Pittas
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|||||
Name:
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Aristides J. Pittas
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|||||
Title:
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||||||
/s/ Stefania Karmiri
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||||||
Stefania Karmiri
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||||||
Notional Amount
USD |
Calculation Period
|
Payment Date
|
|
Start Date
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End Date
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||
30,000,000.00
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24/04/2020
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24/07/2020
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24/07/2020
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30,000,000.00
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24/07/2020
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26/10/2020
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26/10/2020
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30,000,000.00
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26/10/2020
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25/01/2021
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25/01/2021
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30,000,000.00
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25/01/2021
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26/04/2021
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26/04/2021
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30,000,000.00
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26/04/2021
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26/07/2021
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26/07/2021
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30,000,000.00
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26/07/2021
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25/10/2021
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25/10/2021
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30,000,000.00
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25/10/2021
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24/01/2022
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24/01/2022
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30,000,000.00
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24/01/2022
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26/04/2022
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26/04/2022
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30,000,000.00
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26/04/2022
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25/07/2022
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25/07/2022
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30,000,000.00
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25/07/2022
|
24/10/2022
|
24/10/2022
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30,000,000.00
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24/10/2022
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24/01/2023
|
24/01/2023
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30,000,000.00
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24/01/2023
|
24/04/2023
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24/04/2023
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30,000,000.00
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24/04/2023
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24/07/2023
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24/07/2023
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30,000,000.00
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24/07/2023
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24/10/2023
|
24/10/2023
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30,000,000.00
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24/10/2023
|
24/01/2024
|
24/01/2024
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30,000,000.00
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24/01/2024
|
24/04/2024
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24/04/2024
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30,000,000.00
|
24/04/2024
|
24/07/2024
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24/07/2024
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30,000,000.00
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24/07/2024
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24/10/2024
|
24/10/2024
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30,000,000.00
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24/10/2024
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24/01/2025
|
24/01/2025
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30,000,000.00
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24/01/2025
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24/04/2025
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24/04/2025
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Notional Amount
USD |
Calculation Period
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Payment Date
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Fixed Rate %
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|
Start Date
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End Date
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|||
30,000,000.00
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24/04/2020
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24/07/2020
|
24/07/2020
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0.78000
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30,000,000.00
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24/07/2020
|
26/10/2020
|
26/10/2020
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0.78000
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30,000,000.00
|
26/10/2020
|
25/01/2021
|
25/01/2021
|
0.78000
|
30,000,000.00
|
25/01/2021
|
26/04/2021
|
26/04/2021
|
0.78000
|
30,000,000.00
|
26/04/2021
|
26/07/2021
|
26/07/2021
|
0.78000
|
30,000,000.00
|
26/07/2021
|
25/10/2021
|
25/10/2021
|
0.78000
|
30,000,000.00
|
25/10/2021
|
24/01/2022
|
24/01/2022
|
0.78000
|
30,000,000.00
|
24/01/2022
|
26/04/2022
|
26/04/2022
|
0.78000
|
30,000,000.00
|
26/04/2022
|
25/07/2022
|
25/07/2022
|
0.78000
|
30,000,000.00
|
25/07/2022
|
24/10/2022
|
24/10/2022
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0.78000
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30,000,000.00
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24/10/2022
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24/01/2023
|
24/01/2023
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0.78000
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30,000,000.00
|
24/01/2023
|
24/04/2023
|
24/04/2023
|
0.78000
|
30,000,000.00
|
24/04/2023
|
24/07/2023
|
24/07/2023
|
0.78000
|
30,000,000.00
|
24/07/2023
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24/10/2023
|
24/10/2023
|
0.78000
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30,000,000.00
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24/10/2023
|
24/01/2024
|
24/01/2024
|
0.78000
|
30,000,000.00
|
24/01/2024
|
24/04/2024
|
24/04/2024
|
0.78000
|
30,000,000.00
|
24/04/2024
|
24/07/2024
|
24/07/2024
|
0.78000
|
30,000,000.00
|
24/07/2024
|
24/10/2024
|
24/10/2024
|
0.78000
|
30,000,000.00
|
24/10/2024
|
24/01/2025
|
24/01/2025
|
0.78000
|
30,000,000.00
|
24/01/2025
|
24/04/2025
|
24/04/2025
|
0.78000
|
Subsidiary
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Country of Incorporation
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Eleni Shipping Ltd.
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Liberia
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Aggeliki Shipping Ltd.
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Liberia
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Joanna Maritime Ltd.
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Liberia
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Gregos Shipping Ltd.
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Liberia
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Diamantis Shipowners Ltd.
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Liberia
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Hydra Shipowners Ltd.
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Liberia
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Spetses Shipowners Ltd.
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Liberia
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Kea Shipowners Ltd.
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Liberia
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Prospero Maritime Inc.
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Marshall Islands
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Manolis Shipping Ltd.
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Marshall Islands
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Noumea Shipping Ltd.
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Marshall Islands
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Johnathan John Shipping Ltd.
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Marshall Islands
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Athens Shipping Ltd.
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Marshall Islands
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Corfu Navigation Ltd.
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Marshall Islands
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Oinousses Navigation Ltd.
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Marshall Islands
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Bridge Shipping Ltd.
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Marshall Islands
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Eurocon Ltd.
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Marshall Islands
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Antwerp Shipping Ltd.
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Marshall Islands
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Eurocon Ltd.
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Marshall Islands
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Keelung Shipping Ltd.
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Marshall Islands
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Oakland Shipping Ltd.
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Marshall Islands
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Busan Shipping Ltd.
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Marshall Islands
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Allendale Investment S.A.
|
Panama
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Alterwall Business Inc.
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Panama
|
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a) |
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b) |
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c) |
evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
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d) |
disclosed in this report any change in the Company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the
Company's internal control over financial reporting; and
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a) |
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company's ability to record, process, summarize and report
financial information; and
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|
b) |
any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting.
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a)
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designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the
Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and
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d)
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disclosed in this report any change in the Company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to
materially affect, the Company's internal control over financial reporting; and
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a)
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all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company's ability
to record, process, summarize and report financial information; and
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b)
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any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting.
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|