o | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 1 5(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 1 5(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 1 5(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Title of each class | Name of each exchange on which registered | |
Shares of common stock, par value $0.001 per share | NASDAQ Global Market | |
Class W Warrants to purchase shares of common stock | NASDAQ Global Market | |
Class Z Warrants to purchase shares of common stock | NASDAQ Global Market |
Large accelerated filer o | Accelerated filer o | Non-accelerated filer þ | Smaller reporting company o | |||
(Do not check if a smaller reporting company) |
U.S. GAAP þ | IFRS as issued by IASB o | Other o |
PART I
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EX-4.61 | ||||||||
EX-4.62 | ||||||||
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EX-4.64 | ||||||||
EX-4.65 | ||||||||
EX-4.66 | ||||||||
EX-4.67 | ||||||||
EX-4.68 | ||||||||
EX-4.69 | ||||||||
EX-12.1 | ||||||||
EX-12.2 | ||||||||
EX-13.1 | ||||||||
EX-13.2 | ||||||||
EX-15.1 | ||||||||
EX-15.2 | ||||||||
EX-15.3 |
i
| our future operating or financial results; | ||
| 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; | ||
| our ability to pay dividends in the future; | ||
| dry bulk shipping industry trends, including charter rates and factors affecting vessel supply and demand; | ||
| competition in the seaborne transportation industry; | ||
| future, pending or recent acquisitions, business strategy, areas of possible expansion, and expected capital spending or operating expenses; | ||
| increases in costs and expenses, including, but not limited to, crew wages, insurance, provisions, lube oil, bunkers, repairs, maintenance and general and administrative expenses; | ||
| expected compliance with financing agreements and the expected effect of restrictive covenants in such agreements; | ||
| our ability to receive in full or partially our insurance claims and accounts receivable; | ||
| the overall health and condition of the U.S. and global financial markets, including the value of the U.S. dollar relative to other currencies; | ||
| the remaining useful lives and value of our vessels; | ||
| anticipated levels of drybulk vessel newbuilding orders or drybulk vessel scrapping; | ||
| changes in costs of other modes of bulk commodity transportation; | ||
| availability of crew, number of off-hire days, dry-docking requirements, and insurance costs; | ||
| global and regional economic and political conditions; | ||
| our ability to leverage to our advantage our managers relationships and reputation in the dry bulk shipping industry; | ||
| changes in seaborne and other transportation patterns; | ||
| changes in governmental rules and regulations or actions taken by regulatory authorities, including maintenance and dry-docking standards; | ||
| potential liability from future litigation and incidents involving our vessels; | ||
| acts of terrorism and other hostilities; and | ||
| other factors discussed in the section titled Risk Factors. |
1
2
Year Ended December 31, | ||||||||||||||||||||
2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||
Statement of Operations
Data:
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Operating revenues
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$ | 57,533 | $ | 66,689 | $ | 20,147 | $ | 11,727 | $ | 10,326 | ||||||||||
Income (loss) from operations
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11, 459 | 26,570 | 5,761 | (2,281 | ) | 1,205 | ||||||||||||||
Other expense
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(4,600 | ) | (7,378 | ) | (5,917 | ) | (1,043 | ) | (1,053 | ) | ||||||||||
Net income (loss)
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6,859 | 19,192 | (156 | ) | (3,324 | ) | 152 | |||||||||||||
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Earnings Per Share Data:
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Net income (loss) per share:
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Basic earnings
(loss) per share
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$ | 0.27 | $ | 0.91 | $ | (0.02 | ) | $ | (0.53 | ) | $ | 0.03 | ||||||||
Diluted earnings
(loss) per share
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$ | 0.27 | $ | 0.91 | $ | (0.02 | ) | $ | (0.53 | ) | $ | 0.03 | ||||||||
Weighted average number of
shares:
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||||||||||||||||||||
Basic weighted average
number of shares
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25,463,862 | 21,006,497 | 8,786,287 | 6,290,100 | 4,574,588 | |||||||||||||||
Diluted weighted average
number of shares
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25,463,862 | 21,051,963 | 8,786,287 | 6,290,100 | 4,600,444 | |||||||||||||||
Dividends per share
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$ | | $ | 0.45 | $ | 0.175 | $ | | $ | |
Year Ended December 31, | ||||||||||||||||||||
2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||
Selected Balance Sheet
Data:
|
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Cash and cash equivalents
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$ | 6,341 | $ | 3,378 | $ | 63,394 | $ | 372 | $ | 3,285 | ||||||||||
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Restricted cash
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3,250 | 2,595 | 350 | | | |||||||||||||||
Fixed assets, net
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270,701 | 275,405 | 108,021 | 19,369 | 23,848 | |||||||||||||||
Total assets
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297,321 | 307,861 | 191,972 | 23,086 | 29,840 | |||||||||||||||
Long-term
debt, including current portion
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137,959 | 160,350 | 56,300 | 7,830 | 13,000 | |||||||||||||||
Total shareholders equity
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144,452 | 120,855 | 112,626 | 7,007 | 9,705 |
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| crew strikes and/or boycotts; | ||
| marine disaster; | ||
| piracy; | ||
| environmental accidents; | ||
| cargo and property losses or damage; and | ||
| business interruptions caused by mechanical failure, human error, war, terrorism, political action in various countries, labor strikes or adverse weather conditions. |
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| demand for and production of drybulk products; | ||
| global and regional economic and political conditions including developments in international trade, fluctuations in industrial and agricultural production and armed conflicts; | ||
| the distance drybulk cargo is to be moved by sea; | ||
| environmental and other regulatory developments; and | ||
| changes in seaborne and other transportation patterns. | ||
The factors that influence the supply of vessel capacity include: | |||
| the number of newbuilding deliveries; | ||
| port and canal congestion; | ||
| the scrapping rate of older vessels; | ||
| vessel casualties; and | ||
| the number of vessels that are out of service, i.e., laid-up, drydocked, awaiting repairs or otherwise not available for hire. |
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| the customer fails to make charter payments because of its financial inability, disagreements with us or otherwise; | ||
| the customer terminates the charter because we fail to deliver the vessel within the time specified in the charter, the vessel is lost or damaged beyond repair, there are serious deficiencies in the vessel or prolonged periods of off-hire, default under the charter; or | ||
| the customer terminates the charter because the vessel has been subject to seizure for more than a specified number of days. |
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| 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 our management agreements; and | ||
| sell our vessels. |
| locating and acquiring suitable vessels; | ||
| placing newbuilding orders and taking delivery of vessels | ||
| identifying and consummating acquisitions or joint ventures; | ||
| integrating any acquired vessel successfully with our existing operations; |
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| enhancing our customer base; | ||
| managing our expansion; and | ||
| obtaining the required financing. |
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| expenditures for alterations to existing equipment; | ||
| the addition of new equipment; or | ||
| restrictions on the type of cargo a vessel may transport. |
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| quarterly variations in our results of operations; | ||
| our lenders willingness to extend our loan covenant waivers, if necessary; | ||
| changes in market valuations of similar companies and stock market price and volume fluctuations generally; | ||
| changes in earnings estimates or publication of research reports by analysts; | ||
| speculation in the press or investment community about our business or the shipping industry generally; | ||
| strategic actions by us or our competitors such as acquisitions or restructurings; | ||
| the thin trading market for our common stock, which makes it somewhat illiquid; | ||
| the current ineligibility of our common stock to be the subject of margin loans because of its low current market price; | ||
| regulatory developments; | ||
| additions or departures of key personnel; | ||
| general market conditions; and | ||
| domestic and international economic, market and currency factors unrelated to our performance. |
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| authorizing our Board of Directors to issue blank check preferred stock without shareholder approval; | ||
| providing for a classified Board of Directors with staggered, three year terms; | ||
| prohibiting cumulative voting in the election of directors; | ||
| authorizing the removal of directors only for cause and only upon the affirmative vote of the holders of a two-thirds majority of the outstanding shares of our common shares, voting as a single class, entitled to vote for the directors; | ||
| limiting the persons who may call special meetings of shareholders; | ||
| establishing advance notice requirements for election to our Board of Directors or proposing matters that can be acted on by shareholders at shareholder meetings; and | ||
| limiting our ability to enter into business combination transactions with certain shareholders. |
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Vessel Name | Type | Built | Dwt | Employment | ||||||||
M/V Free Destiny
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Handysize | 1982 | 25,240 | 45-55 day time charter trip at $10,750 per day through June 2010 | ||||||||
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M/V Free Envoy
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Handysize | 1984 | 26,318 | 30 day time charter trip at $15,000 per day through June 2010 | ||||||||
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M/V Free Goddess
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Handysize | 1995 | 22,051 | Passing scheduled dry-dock | ||||||||
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M/V Free Hero
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Handysize | 1995 | 24,318 | 75-100 day time charter at $18,000 per day through August/September 2010 | ||||||||
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M/V Free Impala
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Handysize | 1997 | 24,111 | 30 day time charter trip at $17,600 per day through July 2010 | ||||||||
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M/V Free Jupiter
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Handymax | 2002 | 47,777 | Balance of time charter at $25,216 per day through February 2011 and any day in excess at $28,000 per day through May 2011 | ||||||||
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M/V Free Knight
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Handysize | 1998 | 24,111 | 2-4 months time charter at $16,900 per day through August/October 2010 | ||||||||
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M/V Free Lady
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Handymax | 2003 | 50,246 | 60 day time charter trip at $24,000 per day through August 2010 | ||||||||
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M/V Free Maverick
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Handysize | 1998 | 23,994 | 50 day time charter trip at $14,750 per day through July 2010 | ||||||||
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M/V Free Neptune
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Handysize | 1996 | 30,838 | 3.5 6 months time charter at $23,500 per day for the first 150 days & $24,500 for the remaining period if any, through September/December 2010 |
| Experienced management team . We have benefited from the expertise of our executive officers and of our managers personnel which consists of seasoned shipping professionals with long-standing experience in the industry. Our management team has significant experience in commercial, technical, operational and financial areas of our business and has developed relationships with leading charterers, ship brokers and financial institutions. Since 1997, Ion G. Varouxakis, our chairman, chief executive officer and president, has served in various management roles for shipping companies in the dry bulk sector. We believe that our management team and our Manager have strengthened our company over the last years. | ||
| Solid balance sheet. We have strengthened our balance sheet through (1) the reduction of our net debt to $128.4 million on December 31, 2009 which reflects a net debt to capitalization ratio of 45% and (2) the issuing of common stock resulting in net proceeds of $16.2 million which were mainly utilized in the acquisition of M/V Free Neptune at the price of $11.0 million. Furthermore, we raised additional bank financing of $6.0 million and restructured our loan agreements while maintaining a relatively low cost of funding (a weighted average interest rate for the year ended December 31, 2009 of approximately 2.51% per annum). | ||
| Strong customer relationships . Through Free Bulkers, our ship management company, we have established and maintained customer relationships with leading charterers around the world, such as major international industrial companies, commodity producers and traders and a number of chartering brokerage houses. We believe that the established customer base and the reputation of our fleet manager enable us to secure favorable employment for our vessels with well-known charterers. In addition, in light of current economic conditions, we have worked to maintain our relationships with our customers by negotiating strategically appropriate modifications to charters when determined to be in our best long-term interests. | ||
| Cost effective and efficient operations . Through Free Bulkers, we believe that we have established a strong track record in the technical management of drybulk carriers, which has enabled us to maintain cost-efficient operations. We actively monitor and control vessel operating expenses while maintaining the high quality of our fleet through regular inspections, balanced maintenance programs, |
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high standards of operation, and retaining and training qualified crew members. Our strong operating performance is also highlighted by a utilization rate of 97% during the year ended December 31, 2009, which may be considered high given the type and the average age of our fleet. |
| Optimize Our Employment Mix. We intend to continue to deploy a large part of our fleet primarily in the spot market depending on our view of the direction of the markets and other tactical or strategic considerations. The spot market is volatile and holds the potential for significant increases or decreases in shipping rates over time. Additionally, we may pursue time charter coverage to provide cash flow to cover part of our fleets fixed costs and lock our vessels into medium to long-term charters depending on our views of the market. We believe this employment strategy will allow us to participate in the potential upside of the spot market during periods of rising charter rates while provide us with more predictable operating cashflows and sufficient downside protection. | ||
| Handysize and Handymax focus . Our fleet of drybulk carriers will consist primarily of Handysize and Handymax vessels, although we may consider acquiring larger vessels if we identify appropriate opportunities. Based on the relatively low number of drybulk newbuildings on order in the Handysize and Handymax categories, we believe there will be continued high demand for such vessels. Handysize and Handymax vessels are typically shallow-drafted and equipped with onboard cranes. This makes them more versatile and able to access a wider range of loading and discharging ports than larger ships, which are unable to service many ports due to their size or the local port infrastructure. Many countries in the Asia Pacific region, including China, as well as countries in Africa and South America, have shallow ports. We believe that our vessels, and any Handysize or Handymax vessels that we acquire, should enable us to transport a wider variety of cargoes and to pursue a greater number of chartering opportunities than if we owned larger drybulk vessels. Handysize and Handymax vessels have also historically achieved greater charter rate stability than larger drybulk vessels. | ||
| Renew and expand our fleet . We intend to continue growing our fleet in a disciplined manner through acquisition of well-maintained, secondhand vessels, preferably not more than 15 years old. We perform a technical review and financial analysis of each potential acquisition and only purchase vessels as market conditions and opportunities dictate and warrant. We are focused on purchasing such vessels, because we believe that secondhand vessels, when operated in a cost-efficient manner, should provide significant value given the prevailing charter rate environment. The recent upheaval in the credit markets has led a number of shipowners who had ordered newbuildings at the peak of the market to seek to sell them prior to taking delivery because they lacked necessary financing or their credit situation had deteriorated. We may seek to take advantage of such opportunities, selectively, as they arise. Additionally, we may consider newbuilding opportunities. Furthermore, as part of our fleet renewal, we will continue to sell vessels in order to renew our fleet when we believe it is in the best interests of FreeSeas and our shareholders. | ||
| Use of flexible financial strategy. We have used and intend to continue to use a conservative combination of bank debt, cash flow and proceeds from equity offerings to fund our vessel acquisitions. We assess the level of debt we will incur in light of our ability to repay that debt based on the level of cash flow we expect to generate pursuant to our chartering strategy and our operating cost structure. We believe that the maintenance of a reasonable ratio of net debt to total capitalization will be important to our ability to borrow funds to make additional vessel acquisitions, and we have determined to suspend cash dividends to our shareholders while we focus on reducing our debt and expand our fleet. | ||
| Leveraging our strategic relationships . Free Bulkers and their affiliates have extensive experience and relationships in the ship brokerage and financial industries as well as directly with industrial charterers and commodity traders. We use these relationships to identify chartering and acquisition opportunities and make available to us sources of additional financing, make contacts, and gain market intelligence. |
24
| General Administration. Free Bulkers provides us with general administrative, office and support services necessary for our operations and our fleet, including technical and clerical personnel, communication, accounting, and data processing services. | ||
| Financial Accounting Services. Free Bulkers maintains our books, records and accounts and provides all services as are necessary in connection with our compliance with the rules promulgated by the Securities and Exchange Commission (the SEC) and the NASDAQ Stock Market relating to the preparation and maintenance of the our accounting records in accordance with United States generally accepted accounting principles (U.S. GAAP), preparing and filing financial statements with the SEC and NASDAQ in accordance with applicable financial reporting requirements, and developing, implementing, monitoring and assessing our internal controls; | ||
| Sale and Purchase of Vessels. Free Bulkers advises our board of directors when opportunities arise to purchase, including through newbuildings, or to sell any vessels. All decisions to purchase or sell vessels require the approval of our board of directors. Any purchases or sales of vessels approved by our board of directors are arranged and completed by Free Bulkers. This involves the appointment of superintendents to inspect and take delivery of vessels and to monitor compliance with the terms and conditions of the purchase contracts. |
25
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a) | Credit Suisse loan agreement: (i) the Company should maintain minimum cash balances of $375 for each of the Companys vessels covered by the loan agreement; (ii) the aggregate fair market value of the financed vessels must not be less than 135% of the outstanding loan balance. | ||
b) | FBB loan agreement: (i) the Company should maintain an average corporate liquidity of at least $3,000; (ii) the leverage ratio of the corporate guarantor should not at any time exceed 55%; (iii) the ratio of EBITDA to net interest expense must not be less than 3; (iv) the fair market value of the financed vessels should be at least (i) 100% of the outstanding loan balance up to June 30, 2010, (ii) 115% for the period July 1, 2010 to June 30, 2011 and (iii) 125% thereafter. | ||
c) | HBU loan agreement: (i) the interest coverage ratio should not be less than 3.75; (ii) the debt service coverage ratio should not be less than 1.00; (iii) the gearing ratio should not exceed 2.5; (iv) the outstanding loan balance should not be more than a ratio of the fair market value of the financed vessels as follows: (a) 70% from September 15, 2009 until and including June 30, 2010, (b) 100% from July 1, 2010 until and including June 30, 2011, (c) 110% from July 1, 2011 until and including June 30, 2012, (d) 120% from July 1, 2012 until and including December 30, 2012 and (e) 125% from December 31, 2012 onwards. |
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| on-board installation of automatic information systems, to enhance vessel-to-vessel and vessel-to-shore communications; | ||
| on-board installation of ship security alert systems; | ||
| the development of vessel security plans; and | ||
| compliance with flag state security certification requirements. |
31
Next Intermediate | Next Special Survey | |||
Vessel | Dry-docking | Dry-docking | ||
Free Destiny
|
Third quarter 2010 | Third quarter 2012 | ||
Free Envoy
|
Second quarter 2011 | Third quarter 2013 | ||
Free Goddess
|
Second quarter 2013 | Second quarter 2010 | ||
Free Hero
|
Fourth quarter 2013 | Fourth quarter 2010 | ||
Free Impala
|
Second quarter 2014 | Second quarter 2012 | ||
Free Jupiter
|
Second quarter 2010 | Second quarter 2012 | ||
Free Knight
|
Second quarter 2010 | Second quarter 2013 | ||
Free Lady
|
Second quarter 2011 | Second quarter 2013 | ||
Free Maverick
|
First quarter 2011 | First quarter 2013 | ||
Free Neptune
|
Fourth quarter 2014 | Third quarter 2011 |
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| Obtain the charterers consent to us as the new owner; | ||
| Obtain the charterers consent to a new technical manager; | ||
| Obtain the charterers consent to a new flag for the vessel, if applicable; | ||
| Arrange for a new crew for the vessel; | ||
| Replace all hired equipment on board the vessel, such as gas cylinders and communication equipment; | ||
| Negotiate and enter into new insurance contracts for the vessel through our own insurance brokers; | ||
| Register the vessel under a flag state and perform the related inspections in order to obtain new trading certificates from the flag state, if we change the flag state; | ||
| Implement a new planned maintenance program for the vessel; and | ||
| Ensure that the new technical manager obtains new certificates of compliance with the safety and vessel security regulations of the flag state. |
| Employment and operation of our drybulk carriers; and | ||
| Management of the financial, general and administrative elements involved in the ownership and operation of our drybulk vessels. |
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| Vessel maintenance and repair; | ||
| Planning and undergoing dry-docking, special surveys and other major repairs; | ||
| Organizing and undergoing regular classification society surveys; | ||
| Crew selection and training; | ||
| Vessel spares and stores supply; | ||
| Vessel bunkering; | ||
| Contingency response planning; | ||
| Onboard safety procedures auditing; | ||
| Accounting; | ||
| Vessel insurance arrangements; | ||
| Vessel chartering; | ||
| Vessel hire management; and | ||
| Vessel performance monitoring. |
36
| Ownership days. We define ownership days as the total number of calendar days in a period during which each vessel in the fleet was owned by us. Ownership days are an indicator of the size of the fleet over a period and affect both the amount of revenues earned and the amount of expenses that we incur during that period. | ||
| Available days. We define available days as the number of ownership days less the aggregate number of days that our vessels are off-hire due to major repairs, dry-dockings or special or intermediate surveys. The shipping industry uses available days to measure the number of ownership days in a period during which vessels are actually capable of generating revenues. | ||
| Operating days. We define operating days as the number of available days in a period less the aggregate number of days that vessels are off-hire due to any reason, including unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a period during which vessels actually generate revenues. | ||
| Fleet utilization. We calculate fleet utilization by dividing the number of operating days during a period by the number of ownership days during that period. The shipping industry uses fleet utilization to measure a companys efficiency in finding suitable employment for its vessels and minimizing the amount of days that its vessels are off-hire for any reason including scheduled repairs, vessel upgrades, dry-dockings or special or intermediate surveys. | ||
| Off-hire. The period a vessel is unable to perform the services for which it is required under a charter. Off-hire periods typically include days spent undergoing repairs and dry-docking, whether or not scheduled. | ||
| Time charter. A time charter is a contract for the use of a vessel for a specific period of time during which the charterer pays substantially all of the voyage expenses, including port costs, canal charges and bunkers expenses. The vessel owner pays the |
37
vessel operating expenses, which include crew wages, insurance, technical maintenance costs, spares, stores and supplies and commissions on gross voyage revenues. Time charter rates are usually fixed during the term of the charter. Prevailing time charter rates do fluctuate on a seasonal and year-to-year basis and may be substantially higher or lower from a prior time charter agreement when the subject vessel is seeking to renew the time charter agreement with the existing charterer or enter into a new time charter agreement with another charterer. Fluctuations in time charter rates are influenced by changes in spot charter rates. | |||
| Voyage charter. A voyage charter is an agreement to charter the vessel for an agreed per-ton amount of freight from specified loading port(s) to specified discharge port(s). In contrast to a time charter, the vessel owner is required to pay substantially all of the voyage expenses, including port costs, canal charges and bunkers expenses, in addition to the vessel operating expenses. | ||
| Time charter equivalent (TCE). The time charter equivalent, or TCE, equals voyage revenues minus voyage expenses divided by the number of operating days during the relevant time period, including the trip to the loading port. TCE is a non-GAAP, standard seaborne transportation industry performance measure used primarily to compare period-to-period changes in a seaborne transportation companys performance despite changes in the mix of charter types (i.e., spot charters, time charters and bareboat charters) under which the vessels may be employed during a specific period. | ||
| Adjusted EBITDA. We consider Adjusted EBITDA to represent net earnings/ (loss) before interest, taxes, depreciation and amortization, amortization of deferred revenue, back log asset, gain/(loss) on derivative instruments and stock based compensation expense. Under the laws of the Marshall Islands, we are not subject to tax on international shipping income. However, we are subject to registration and tonnage taxes, which have been included in vessel operating expenses. Accordingly, no adjustment for taxes has been made for purposes of calculating Adjusted EBITDA. Adjusted EBITDA is a non-GAAP measure and does not represent and should not be considered as an alternative to net income or cash flow from operations, as determined by U.S. GAAP, and our calculation of Adjusted EBITDA may not be comparable to that reported by other companies. Adjusted EBITDA is included herein because it is an alternative measure of our liquidity performance and indebtedness. |
| The nature and duration of our charters; | ||
| The amount of time that we spent repositioning its vessels; | ||
| The amount of time that our vessels spent in dry-dock undergoing repairs; | ||
| Maintenance and upgrade work; | ||
| The age, condition and specifications of our vessels; | ||
| The levels of supply and demand in the drybulk carrier transportation market; and | ||
| Other factors affecting charter rates for drybulk carriers under voyage charters. |
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| Number of vessels owned and operated; | ||
| Charter market rates and periods of charter hire; | ||
| Vessel operating expenses and direct voyage costs, which are incurred in both U.S. dollars and other currencies, primarily Euros; | ||
| Management fees and service fees | ||
| Depreciation and amortization expenses, which are a function of vessel cost, any significant post-acquisition improvements, estimated useful lives, estimated residual scrap values, and fluctuations in the carrying value of our vessels, as well as, drydocking and special survey costs; | ||
| Financing costs related to indebtedness associated with the vessels; and | ||
| Fluctuations in foreign exchange rates. |
For the year ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Adjusted EBITDA (1)
|
$ | 30,337 | $ | 41,296 | $ | 9,500 | ||||||
Fleet Data:
|
||||||||||||
Average number of vessels (2)
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9.35 | 7.36 | 3.3 | |||||||||
Ownership days (3)
|
3,414 | 2,688 | 1,206 | |||||||||
Available days (4)
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3,373 | 2,605 | 1,177 | |||||||||
Operating days (5)
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3,294 | 2,441 | 1,048 | |||||||||
Fleet utilization (6)
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96.5 | % | 90.8 | % | 86.9 | % | ||||||
Average Daily Results:
|
||||||||||||
|
||||||||||||
Average TCE rate (7)
|
$ | 16,105 | $ | 25,719 | $ | 17,925 | ||||||
Vessel operating expenses (8)
|
5,218 | 6,084 | 4,976 |
39
For the year ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Management fees (9)
|
549 | 727 | 601 | |||||||||
General and administrative expenses(10)
|
1,262 | 1,451 | 2,249 | |||||||||
Total vessel operating expenses (11)
|
5,767 | 6,811 | 5,577 |
(1) | Adjusted EBITDA reconciliation to net income: | |
Adjusted EBITDA represents net earnings before interest, depreciation and amortization, amortization of deferred revenue, back log asset, gain /(loss) on derivative instruments and stock based compensation expense. Adjusted EBITDA does not represent and should not be considered as an alternative to net income or cash flow from operations, as determined by United States generally accepted accounting principles, or U.S. GAAP and our calculation of adjusted EBITDA may not be comparable to that reported by other companies. Adjusted EBITDA is included herein because it is an alternative measure of our liquidity, performance and indebtedness. The following is a reconciliation of adjusted EBITDA to net income: |
For the year ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Net income (loss)
|
$ | 6,859 | $ | 19,192 | $ | (156 | ) | |||||
Depreciation and amortization
|
17,748 | 14,137 | 5,192 | |||||||||
Amortization of deferred revenue
|
(81 | ) | (368 | ) | (1,516 | ) | ||||||
Back log asset
|
907 | 899 | | |||||||||
Stock-based compensation expense
|
494 | 107 | 96 | |||||||||
Gain/(loss) on derivative instruments
|
111 | 1,456 | 749 | |||||||||
Interest and finance cost, net of interest income
|
4,299 | 5,873 | 5,135 | |||||||||
|
||||||||||||
|
||||||||||||
Adjusted EBITDA
|
$ | 30,337 | $ | 41,296 | $ | 9,500 | ||||||
|
(2) | Average number of vessels is the number of vessels that constituted our fleet for the relevant period, as measured by the sum of the number of days each vessel was a part of our fleet during the period divided by the number of calendar days in the period. | |
(3) | Ownership days are the total number of days in a period during which the vessels in our fleet have been owned by us. Ownership days are an indicator of the size of our fleet over a period and affect both the amount of revenues and the amount of expenses that we record during a period. | |
(4) | Available days are the number of ownership days less the aggregate number of days that our vessels are off-hire due to major repairs, dry dockings or special or intermediate surveys. The shipping industry uses available days to measure the number of ownership days in a period during which vessels should be capable of generating revenues. | |
(5) | Operating days are the number of available days less the aggregate number of days that our vessels are off-hire due to any reason, including unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a period during which vessels actually generate revenues. | |
(6) | We calculate fleet utilization by dividing the number of our fleets operating days during a period by the number of ownership days during the period. The shipping industry uses fleet utilization to measure a companys efficiency in finding suitable employment for its vessels and minimizing the amount of days that its vessels are off-hire for reasons such as scheduled repairs, vessel upgrades, or dry dockings or other surveys. | |
(7) | Time charter equivalent, or TCE, is a measure of the average daily revenue performance of a vessel on a per voyage basis. Our method of calculating TCE is consistent with industry standards and is determined by dividing operating revenues (net of voyage expenses and commissions) by operating days for the relevant time period. Voyage expenses primarily consist of port, canal and fuel costs that are unique to a particular voyage, which would otherwise be paid by the charterer under a time charter contract. TCE is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping companys performance despite changes in the mix of charter types (i.e., spot charters, time charters and bareboat charters) under which the vessels may be employed between the periods: |
40
For the year ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Operating revenues
|
$ | 57,533 | $ | 66,689 | $ | 20,147 | ||||||
Voyage expenses and commissions
|
(4,483 | ) | (3,910 | ) | (1,362 | ) | ||||||
|
||||||||||||
|
||||||||||||
Net operating revenues
|
53,050 | 62,779 | 18,785 | |||||||||
Operating days
|
3,294 | 2,441 | 1,048 | |||||||||
|
||||||||||||
|
||||||||||||
Time charter equivalent daily rate
|
$ | 16,105 | $ | 25,719 | $ | 17,925 | ||||||
|
(8) | Average daily vessel operating expenses, which includes crew costs, provisions, deck and engine stores, lubricating oil, insurance, maintenance and repairs, is calculated by dividing vessel operating expenses by ownership days for the relevant time periods |
For the year ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Vessel operating expenses
|
$ | 17,813 | $ | 16,354 | $ | 6,001 | ||||||
Ownership days
|
3,414 | 2,688 | 1,206 | |||||||||
|
||||||||||||
|
||||||||||||
Daily vessel operating expense
|
$ | 5,218 | $ | 6,084 | $ | 4,976 | ||||||
|
(9) | Daily management fees are calculated by dividing total management fees paid on ships owned by ownership days for the relevant time period. | |
(10) | Average daily general and administrative expenses are calculated by dividing general and administrative expenses by operating days for the relevant period. | |
(11) | Total vessel operating expenses, or TVOE, is a measurement of our total expenses associated with operating our vessels. TVOE is the sum of daily vessel operating expense and daily management fees. Daily TVOE is calculated by dividing TVOE by fleet ownership days for the relevant time period. |
41
42
43
44
45
46
a) | Credit Suisse loan agreement: i) the Company should maintain minimum cash balances of $375 for each of the Companys vessels covered by the loan agreement; ii) the aggregate fair market value of the financed vessels must not be less than 135% of the outstanding loan balance. | ||
b) | FBB loan agreement: i) the Company should maintain an average corporate liquidity of at least $3,000 ii) the leverage ratio of the corporate guarantor should not at any time exceed 55%; iii) the ratio of EBITDA to net interest expense must not be less than 3; iv) the fair market value of the financed vessels should be at least (i) 100% of the outstanding loan balance up to June 30, 2010, (ii) 115% for the period July 1, 2010 to June 30, 2011 and (iii) 125% thereafter. | ||
c) | HBU loan agreement: i) the interest coverage ratio should not be less than 3.75; ii) the debt service coverage ratio should not be less than 1.00; iii) the gearing ratio should not exceed 2.5; iv) the outstanding loan balance should not be more than a ratio of the fair market value of the financed vessels as follows: (a) 70% from September 15, 2009 until and including June 30, 2010, (b) 100% from July 1, 2010 until and including June 30, 2011, (c) 110% from July 1, 2011 until and including June 30, 2012, (d) 120% from July 1, 2012 until and including December 30, 2012 and (e) 125% from December 31, 2012 onwards. |
47
31/12/2009 | Total | <1 yr | 1-3 yrs | 3-5 yrs | > 5 yrs | |||||||||||||||
HBU
|
41.959 | 5,400 | 27,809 | 6,000 | 2,750 | |||||||||||||||
Credit Suisse
|
68,250 | 8,000 | 16,000 | 16,000 | 28,250 | |||||||||||||||
FBB
|
27,750 | 2,000 | 6,700 | 6,700 | 12,350 | |||||||||||||||
Total
|
137,959 | 15,400 | 50,509 | 28,700 | 43,350 | |||||||||||||||
Payments Due by Period | ||||||||||||||||||||
Less than | More than | |||||||||||||||||||
Total | 1 Year | 1-3 Years | 3-5 Years | 5 Years | ||||||||||||||||
(U.S. dollars in thousands) | ||||||||||||||||||||
Long-term debt
|
$ | 137,959 | $ | 15,400 | $ | 50,509 | $ | 28,700 | $ | 43,350 | ||||||||||
Interest on variable-rate debt
|
18,462 | 4,777 | 8,043 | 4,087 | 1,555 | |||||||||||||||
Services fees to Free Bulkers
|
12,443 | 1,422 | 2,844 | 2,844 | 5,333 | |||||||||||||||
Management fees to Free
Bulkers
|
26,891 | 1,942 | 3,399 | 3,168 | 18,382 | |||||||||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
Total obligations
|
$ | 195,755 | $ | 23,541 | $ | 64,795 | $ | 38,799 | $ | 68,620 | ||||||||||
|
Director | ||||||||
Name | Age | Position | Class | |||||
Ion G. Varouxakis
|
39 | Chairman of the Board of Directors, Chief Executive Officer and President | C | |||||
Alexandros Mylonas
|
36 | Chief Financial Officer | | |||||
Kostas Koutsoubelis
|
55 | Director, Vice President and Treasurer | A | |||||
Maria Badekas
|
38 | Secretary | | |||||
Didier Salomon
|
64 | Director | A | |||||
Focko H. Nauta
|
52 | Director | B | |||||
Dimitrios Panagiotopoulos
|
49 | Director | C | |||||
Keith Bloomfield
|
38 | Director | B |
48
49
50
51
Percentage of | ||||||||
Number of Shares of | Shares of Common | |||||||
Common Stock | Stock Beneficially | |||||||
Name | Beneficially Owned | Owned(1) | ||||||
Ion G. Varouxakis
|
2,731,364 | (2) | 8.40 | % | ||||
Directors and executive
officers as a group (eight
persons)
|
3,086,364 | (3) | 9.50 | % | ||||
FS Holdings Limited
|
3,240,593 | (4) | 9.97 | % | ||||
Newland Capital Management LLC
|
1,603,768 | (5) | 5.1 | % |
1. | For purposes of computing the percentage of outstanding shares of common stock held by each person named above, any restricted shares granted to the named person are deemed to be outstanding for that person and for purposes of computing the percentage ownership of any other person. Any shares that the named person has the right to acquire within 60 days under warrants or options are deemed to be outstanding for that person and for any total including that person, but are not deemed to be outstanding when computing the percentage ownership of any other person. As beneficial owners of shares of common stock, the persons listed in the table do not have different voting rights than any other holder of common stock. | |
2. | Reflects 2,514,697 shares and 16,667 shares underlying warrants owned by The Midas Touch S.A., a Marshall Islands corporation wholly owned by Mr. Varouxakis and 200,000 restricted shares held directly by Mr. Varouxakis and that will vest on December 31, 2010. Does not include 40,000 shares owned by V Estates S.A., which is controlled by his father, 30,600 shares owned by his mother, or 106,000 shares owned by Edifice Holdings S.A., which is controlled by his brother, Alexis Varouxakis, or individually held by Alexis Varouxakis. | |
3. | Includes an aggregate of 755,000 restricted shares granted to the directors and executive officers, of which 305,000 vested immediately, 200,000 will vest on December 31, 2010 and 250,000 will vest on December 31, 2013. | |
4. | Reflects 2,808,782 shares owned by FS Holdings Limited, a Marshall Islands corporation, and 431,811 shares owned by Benbay Limited, a Republic of Cyprus corporation, each of which is controlled by the Restis Family. | |
5. | As reported in a Schedule 13D filed with the SEC on May 4, 2010. |
52
A. | Consolidated Statements and Other Financial Information | ||
Please see Item 18. Financial Statements for a list of the financial statements filed as part of this annual report. | |||
B. | Significant Changes | ||
Not applicable. |
A. | Offer and Listing Details | ||
Not applicable. | |||
B. | Plan of Distribution | ||
Not applicable. |
53
C. | Markets |
Common Stock | Class W Warrants | Class Z Warrants | ||||||||||||||||||||||
For the Years Ended: | High | Low | High | Low | High | Low | ||||||||||||||||||
December 31, 2007
|
$ | 10.24 | $ | 2.76 | $ | 5.14 | $ | 0.25 | $ | 5.20 | $ | 0.48 | ||||||||||||
December 31, 2008
|
7.97 | 0.90 | 3.05 | 0.02 | 3.35 | 0.05 | ||||||||||||||||||
December 31, 2009
|
3.49 | 1.17 | 0.34 | 0.03 | 0.65 | 0.08 |
Common Stock | Class W Warrants | Class Z Warrants | ||||||||||||||||||||||
For the Quarters Ended: | High | Low | High | Low | High | Low | ||||||||||||||||||
March 31, 2008
|
6.09 | 4.49 | 2.45 | 1.06 | 2.45 | 1.40 | ||||||||||||||||||
June 30, 2008
|
7.97 | 5.90 | 3.05 | 1.85 | 3.35 | 1.85 | ||||||||||||||||||
September 30, 2008
|
7.07 | 3.95 | 2.24 | 0.97 | 2.65 | 1.25 | ||||||||||||||||||
December 31, 2008
|
4.01 | 0.90 | 1.15 | 0.02 | 1.46 | 0.05 | ||||||||||||||||||
March 31, 2009
|
1.88 | 0.54 | 0.24 | 0.04 | 0.33 | 0.08 | ||||||||||||||||||
June 30, 2009
|
3.49 | 1.17 | 0.34 | 0.07 | 0.65 | 0.10 | ||||||||||||||||||
September 30, 2009
|
2.43 | 1.57 | 0.31 | 0.04 | 0.55 | 0.16 | ||||||||||||||||||
December 31, 2009
|
1.75 | 1.27 | 0.25 | 0.03 | 0.32 | 0.16 | ||||||||||||||||||
March 31, 2010
|
1.34 | 1.28 | 0.12 | 0.11 | 0.20 | 0.20 |
Common Stock | Class W Warrants | Class Z Warrants | ||||||||||||||||||||||
For the Months Ended: | High | Low | High | Low | High | Low | ||||||||||||||||||
December 31, 2009
|
1.49 | 1.34 | 0.15 | 0.03 | 0.25 | 0.16 | ||||||||||||||||||
January 31, 2010
|
1.59 | 1.28 | 0.15 | 0.09 | 0.25 | 0.17 | ||||||||||||||||||
February 28, 2010
|
1.41 | 1.11 | 0.11 | 0.06 | 0.24 | 0.17 | ||||||||||||||||||
March 31, 2010
|
1.30 | 1.25 | 0.11 | 0.11 | 0.20 | 0.19 | ||||||||||||||||||
April 30, 2010
|
1.44 | 1.38 | 0.10 | 0.10 | 0.15 | 0.14 | ||||||||||||||||||
May 31, 2010
|
1.37 | 1.29 | 0.11 | 0.10 | 0.15 | 0.14 |
D. | Selling Shareholders | ||
Not applicable. | |||
E. | Dilution | ||
Not applicable. | |||
F. | Expenses of the Issue | ||
Not applicable. |
A. | Share Capital | ||
Not applicable. |
54
B. | Memorandum and Articles of Incorporation |
55
56
| we are organized in a foreign country (our country of organization) that grants an equivalent exemption to corporations organized in the United States; and either | ||
| more than 50% of the value of our stock is owned, directly or indirectly, by qualified shareholders, that are persons (i) 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, and (ii) who comply with certain documentation requirements, which we refer to as the 50% Ownership Test, or |
57
| our stock is primarily and regularly traded on one or more established securities markets 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. |
58
| 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. |
59
| at least 75% of our gross income for such taxable year consists of passive income (e.g., dividends, interest, capital gains and rents derived other than in the active conduct of a rental business); or | ||
| at least 50% of the average value of the assets held by the corporation during such taxable year produce, or are held for the production of, passive income. |
60
| the excess distribution or gain would be allocated ratably over the Non-Electing Holders aggregate holding period for the common stock; | ||
| the amount allocated to the current taxable year and any taxable year before we became a passive foreign investment company would be taxed as ordinary income; and | ||
| the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for that year, and an interest charge for the deemed deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year. |
61
| the gain is effectively connected with the Non-U.S. Holders conduct of a trade or business in the United States. If the Non-U.S. Holder is entitled to the benefits of an income tax treaty with respect to that gain, that gain is taxable only if it is attributable to a permanent establishment maintained by the Non-U.S. Holder in the United States; or | ||
| the Non-U.S. Holder is an individual who is present in the United States for 183 days or more during the taxable year of disposition and other conditions are met. |
| fail to provide an accurate taxpayer identification number; | ||
| are notified by the Internal Revenue Service that you have failed to report all interest or dividends required to be shown on your federal income tax returns; or | ||
| in certain circumstances, fail to comply with applicable certification requirements. |
F. | Dividends and Paying Agents | ||
Not applicable. | |||
G. | Statement by Experts | ||
Not applicable. | |||
H. | Documents on Display |
62
I. | Subsidiary Information | ||
Not applicable. |
Vessel Name | 2010 | 2011 | 2012 | 2013 | 2014 | |||||||||||||||
Free Hero/Free Goddess/Free Jupiter
|
$ | 347 | $ | 297 | $ | 247 | $ | 195 | $ | 145 | ||||||||||
Free Impala/Free Neptune
|
$ | 273 | $ | 248 | $ | 214 | $ | 179 | $ | 145 | ||||||||||
Free Knight
|
$ | 167 | $ | 137 | $ | 107 | $ | 76 | $ | 46 | ||||||||||
Free Lady
|
$ | 298 | $ | 268 | $ | 238 | $ | 207 | $ | 177 | ||||||||||
Free Maverick
|
$ | 232 | $ | 208 | $ | 156 | | |
63
64
2008 | 2009 | |||||||
Audit fees (1)
|
$ | 749 | $ | 704 | ||||
Audit-related fees
|
| | ||||||
Tax fees
|
| | ||||||
Other fees
|
| | ||||||
Total
|
749 | 704 |
(1) | Audit fees represent fees for professional services related to the audit of our financial statements for the years ended December 31, 2009 and 2008, which include for 2009 fees for professional services related to the filing of our prospectus supplement to the Companys previously filed shelf registration statement which we used for July 2009 follow-on offering and fees that relate to the Companys filing on October 22, 2009 with the U.S. Securities and Exchange Commission of the registration statement on Form F-1 for the purpose of undertaking possible capital raises in the future and for 2008 fees for professional services related to the filing with the U.S. Securities and Exchange Commission of the registration statement on Form F-3 |
65
Exhibit | ||||
No.: | Exhibit Description | Where Filed | ||
1.1
|
Amended and Restated Articles of Incorporation of FreeSeas Inc. (formerly known as Adventure Holdings S.A.) | Exhibit 3.1 to Registrants Registration Statement on Form F-1 (File No. 333-124825) filed on May 11, 2005 and incorporated herein by reference | ||
|
||||
1.2
|
Amended and Restated By-Laws of FreeSeas Inc. (formerly known as Adventure Holdings S.A.) | Exhibit 3.2 to Registrants Registration Statement on Form F-1 (File No. 333-124825) filed on May 11, 2005 and incorporated herein by reference | ||
|
||||
1.3
|
First Amendment to the Amended and Restated Bylaws of FreeSeas Inc. | Exhibit 3.3 to Amendment No. 1 to Registrants Registration Statement on Form F-1 (File No. 333-124825) filed on July 22, 2005 and incorporated herein by reference | ||
|
||||
1.4
|
First Amendment to the Amended and Restated Articles of Incorporation of FreeSeas Inc. | Exhibit 99.3 to Registrants Form 6-K filed on October 22, 2009 and incorporated herein by reference | ||
|
||||
2.1
|
Specimen Common Stock Certificate | Exhibit 4.1 to Amendment No. 1 to Registrants Registration Statement on Form F-1 (File No. 333-124825) filed on July 22, 2005 and incorporated herein by reference | ||
|
||||
2.2
|
Form of Class A Warrant | Exhibit 4.2 to Amendment No. 1 to Registrants Registration Statement on Form F-1 (File No. 333-124825) filed on July 22, 2005 and incorporated herein by reference | ||
|
||||
2.3
|
Warrant dated as of May 8, 2007 issued to FS Holdings Limited | Exhibit 4.3 to Registrants Registration Statement on Form F-3 filed on August 3, 2007 and incorporated herein by reference | ||
|
||||
2.4
|
Warrant dated as of June 22, 2007 issued to FS Holdings Limited | Exhibit 4.4 to Registrants Registration Statement on Form F-3 filed on August 3, 2007 and incorporated herein by reference | ||
|
||||
2.5
|
Form of Class W Warrant | Exhibit 4.3 to Amendment No. 1 to Registrants Registration Statement on Form F-1 (File No. 333-124825) filed on July 22, 2005 and incorporated herein by reference | ||
|
||||
2.6
|
Form of Class Z Warrant | Exhibit 4.4 to Amendment No. 1 to Registrants Registration Statement on Form F-1 (File No. 333-124825) filed on July 22, 2005 and incorporated herein by reference |
66
Exhibit | ||||
No.: | Exhibit Description | Where Filed | ||
2.7
|
Warrant Clarification Agreement dated May 10, 2007 between FreeSeas Inc. and American Stock Transfer & Trust Company | Exhibit 4.27 to Registrants Annual Report on Form 20-F for the year ended December 31, 2006 and incorporated herein by reference | ||
|
||||
2.8
|
Form of Management Stock Option Agreement | Exhibit 4.5 to Amendment No. 2 to Registrants Registration Statement on Form F-1 (File No. 333-124825) filed on October 11, 2005 and incorporated herein by reference | ||
|
||||
2.9
|
Shareholder Rights Agreement entered into effective as of January 14, 2009 by and between FreeSeas Inc. and American Stock Transfer & Trust Company, LLC | Exhibit 2.9 to Registrants Annual Report on Form 20-F for the year ended December 31, 2008 | ||
|
||||
4.1
|
Employment Agreement between Ion G. Varouxakis and FreeSeas Inc. | Exhibit 10.2 to Amendment No. 1 to Registrants Registration Statement on Form F-1 (File No. 333-124825) filed on July 22, 2005 and incorporated herein by reference | ||
|
||||
4.2
|
Amended and Restated 2005 Stock Incentive Plan | Annex A to Registrants Form 6-K filed on December 1, 2006 and incorporated herein by reference | ||
|
||||
4.3
|
Mortgage dated September 29, 2004 by Adventure Three S.A. in favor of Hollandsche Bank Unie N.V. | Exhibit 10.8 to Amendment No. 1 to Registrants Registration Statement on Form F-1 (File No. 333-124825) filed on July 22, 2005 and incorporated herein by reference | ||
|
||||
4.4
|
Deed of Assignment dated September 29, 2004 between Adventure Three S.A. and Hollandsche Bank Unie N.V. | Exhibit 10.9 to Amendment No. 1 to Registrants Registration Statement on Form F-1 (File No. 333-124825) filed on July 22, 2005 and incorporated herein by reference | ||
|
||||
4.5
|
Standard Ship Management Agreement dated July 1, 2004 between Free Bulkers S.A. and Adventure Two S.A. | Exhibit 10.11 to Registrants Registration Statement on Form F-1 (File No. 333-124825) filed on May 11, 2005 and incorporated herein by reference | ||
|
||||
4.6
|
Amendment No. 1 of July 22, 2005 to the Shipman 98 Agreement dated July 1, 2004 between Adventure Two S.A. and Free Bulkers S.A. | Exhibit 10.20 to Amendment No. 1 to Registrants Registration Statement on Form F-1 (File No. 333-124825) filed on July 22, 2005 and incorporated herein by reference | ||
|
||||
4.7
|
Standard Ship Management Agreement dated July 1, 2004 between Free Bulkers S.A. and Adventure Three S.A. | Exhibit 10.12 to Registrants Registration Statement on Form F-1 (File No. 333-124825) filed on May 11, 2005 and incorporated herein by reference | ||
|
||||
4.8
|
Amendment No. 1 of July 22, 2005 to the Shipman 98 Agreement dated July 1, 2004 between Adventure Three S.A. and Free Bulkers S.A. | Exhibit 10.13 to Amendment No. 1 to Registrants Registration Statement on Form F-1 (File No. 333-124825) filed on July 22, 2005 and incorporated herein by reference | ||
|
||||
4.9
|
Credit Agreement dated September 23, 2005 between Adventure Two S.A. and Hollandsche Bank Unie N.V. | Exhibit 10.22 to Amendment No. 2 to Registrants Registration Statement on Form F-1 (File No. 333-124825) filed on October 11, 2005 and incorporated herein by reference | ||
|
||||
4.10
|
Credit Agreement dated September 23, 2005 between Adventure Three S.A. and Hollandsche Bank Unie N.V. | Exhibit 10.23 to Amendment No. 2 of Registrants Registration Statement on Form F-1 (File No. 333-124825) filed on October 11, 2005 and incorporated herein by reference | ||
|
||||
4.11
|
Mortgage dated October 24, 2005 by Adventure Two S.A. in favor of Hollandsche Bank Unie N.V. | Exhibit 4.22 to Registrants Annual Report on Form 20-F for the year ended December 31, 2005 and incorporated herein by reference | ||
|
||||
4.12
|
Deed of Assignment dated October 24, 2005 between Adventure Two S.A. and Hollandsche Bank Unie N.V. | Exhibit 4.23 to Registrants Annual Report on Form 20-F for the year ended December 31, 2005 and incorporated herein by reference |
67
Exhibit | ||||
No.: | Exhibit Description | Where Filed | ||
4.13
|
Amendment dated January 23, 2006 to Credit Agreement dated September 23, 2005 between Adventure Two S.A. and Hollandsche Bank Unie N.V. | Exhibit 4.27 to Registrants Annual Report on Form 20-F for the year ended December 31, 2005 and incorporated herein by reference | ||
|
||||
4.14
|
Amendment dated January 23, 2006 to Credit Agreement dated September 23, 2005 between Adventure Three S.A. and Hollandsche Bank Unie N.V. | Exhibit 4.28 to Registrants Annual Report on Form 20-F for the year ended December 31, 2005 and incorporated herein by reference | ||
|
||||
4.15
|
Loan Agreement dated September 2006 between Adventure Four S.A. and First Business Bank S.A. | Exhibit 4.24 to Registrants Annual Report on Form 20-F for the year ended December 31, 2006 and incorporated herein by reference | ||
|
||||
4.16
|
Deed of Assignment dated September 2006 between Adventure Four S.A. in favor of First Business Bank S.A. | Exhibit 4.25 to Registrants Annual Report on Form 20-F for the year ended December 31, 2006 and incorporated herein by reference | ||
|
||||
4.17
|
Mortgage dated September 2006 by Adventure Four S.A. in favor of First Business Bank S.A. | Exhibit 4.26 to Registrants Annual Report on Form 20-F for the year ended December 31, 2006 and incorporated herein by reference | ||
|
||||
4.18
|
Credit Agreement dated May 7, 2007 among Adventure Two S.A., Adventure Three S.A. and Hollandsche Bank Unie N.V. | Exhibit 10.32 to Amendment No. 1 to Registrants Registration Statement on Form F-1 (File No. 333-145203) filed on October 15, 2007 and incorporated herein by reference | ||
|
||||
4.19
|
Credit Suisse Offer Letter dated August 28, 2007 | Exhibit 10.33 to Amendment No. 1 to Registrants Registration Statement on Form F-1 (File No. 333-145203) filed on October 15, 2007 and incorporated herein by reference | ||
|
||||
4.20
|
Memorandum of Agreement dated May 1, 2007 for the M/V Free Hero | Exhibit 10.34 to Amendment No. 1 to Registrants Registration Statement on Form F-1 (File No. 333-145203) filed on October 15, 2007 and incorporated herein by reference | ||
|
||||
4.21
|
Memorandum of Agreement dated May 1, 2007 for the M/V Free Jupiter | Exhibit 10.35 to Amendment No. 1 to Registrants Registration Statement on Form F-1 (File No. 333-145203) filed on October 15, 2007 and incorporated herein by reference | ||
|
||||
4.22
|
Memorandum of Agreement dated August 29, 2007 for the M/V Free Goddess | Exhibit 10.36 to Amendment No. 1 to Registrants Registration Statement on Form F-1 (File No. 333-145203) filed on October 15, 2007 and incorporated herein by reference | ||
|
||||
4.23
|
Memorandum of Agreement dated January 22, 2008 for the M/V Free Impala | Exhibit 4.35 to Registrants Annual Report on Form 20-F for the year ended December 31, 2007 and incorporated herein by reference | ||
|
||||
4.24
|
Memorandum of Agreement dated January 22, 2008 for the M/V Free Knight | Exhibit 4.36 to Registrants Annual Report on Form 20-F for the year ended December 31, 2007 and incorporated herein by reference | ||
|
||||
4.25
|
Memorandum of Agreement dated March 10, 2008 for M/V Free Lady | Exhibit 4.38 to Registrants Annual Report on Form 20-F for the year ended December 31, 2007 and incorporated herein by reference | ||
|
||||
4.26
|
Facility Agreement dated December 24, 2007 between FreeSeas Inc. and Credit Suisse | Exhibit 4.39 to Registrants Annual Report on Form 20-F for the year ended December 31, 2007 and incorporated herein by reference |
68
Exhibit | ||||
No.: | Exhibit Description | Where Filed | ||
4.27
|
First Preferred Mortgage on the M/V Free Hero in favor of Credit Suisse | Exhibit 4.40 to Registrants Annual Report on Form 20-F for the year ended December 31, 2007 and incorporated herein by reference | ||
|
||||
4.28
|
First Preferred Mortgage on the M/V Free Goddess in favor of Credit Suisse | Exhibit 4.41 to Registrants Annual Report on Form 20-F for the year ended December 31, 2007 and incorporated herein by reference | ||
|
||||
4.29
|
First Preferred Mortgage on the M/V Free Jupiter in favor of Credit Suisse | Exhibit 4.42 to Registrants Annual Report on Form 20-F for the year ended December 31, 2007 and incorporated herein by reference | ||
|
||||
4.30
|
Loan Agreement dated March 31, 2008 between Adventure Nine and First Business Bank | Exhibit 4.43 to Registrants Annual Report on Form 20-F for the year ended December 31, 2007 and incorporated herein by reference | ||
|
||||
4.31
|
First Preferred Mortgage on the M/V Free Impala in favor of First Business Bank | Exhibit 4.44 to Registrants Annual Report on Form 20-F for the year ended December 31, 2007 and incorporated herein by reference | ||
|
||||
4.32
|
Deed of Covenants dated April 2, 2008 between Adventure Nine and First Business Bank | Exhibit 4.45 to Registrants Annual Report on Form 20-F for the year ended December 31, 2007 and incorporated herein by reference | ||
|
||||
4.33
|
Credit Agreement dated January 21, 2008 among Adventure Two, Adventure Three and Adventure Seven with Hollandsche Bank Unie N.V. | Exhibit 4.46 to Registrants Annual Report on Form 20-F for the year ended December 31, 2007 and incorporated herein by reference | ||
|
||||
4.34
|
Short Term Loan Agreement among Adventure Two, Adventure Three, Adventure Seven and Hollandsche BankUnie N.V. | Exhibit 4.47 to Registrants Annual Report on Form 20-F for the year ended December 31, 2007 and incorporated herein by reference | ||
|
||||
4.35
|
Rollover Loan Agreement dated April 3, 2008 among Adventure Two, Adventure Three, Adventure Seven and Hollandsche Bank Unie N.V. | Exhibit 4.48 to Registrants Annual Report on Form 20-F for the year ended December 31, 2007 and incorporated herein by reference | ||
|
||||
4.36
|
First Preferred Mortgage dated March 19, 2008 on the M/V Free Knight in favor of Hollandsche Bank Unie N.V. | Exhibit 4.49 to Registrants Annual Report on Form 20-F for the year ended December 31, 2007 and incorporated herein by reference | ||
|
||||
4.37
|
Deed of Covenants between Adventure Seven and Hollandsche Bank Unie N.V | Exhibit 4.45 to Registrants Annual Report on Form 20-F for the year ended December 31, 2007 and incorporated herein by reference | ||
|
||||
4.38
|
Second Preferred Mortgage on the M/V Free Destiny in favor of Hollandsche Bank Unie N.V. | Exhibit 4.51 to Registrants Annual Report on Form 20-F for the year ended December 31, 2007 and incorporated herein by reference | ||
|
||||
4.39
|
Second Preferred Mortgage on the M/V Free Envoy in favor of Hollandsche Bank Unie N.V. | Exhibit 4.52 to Registrants Annual Report on Form 20-F for the year ended December 31, 2007 and incorporated herein by reference | ||
|
||||
4.40
|
Memorandum of Agreement dated August 7, 2008 for the M/V Free Maverick | Exhibit 4.53 to Registrants Annual Report on Form 20-F for the year ended December 31, 2008 | ||
|
||||
4.41
|
First Preferred Mortgage on the M/V Free Maveric k in favor of Hollandsche Bank Unie N.V | Exhibit 4.54 to Registrants Annual Report on Form 20-F for the year ended December 31, 2008 | ||
|
||||
4.42
|
Amended Credit Agreement dated August 12, 2008 among Adventure Two, Adventure Three, Adventure Seven and Adventure Eleven with Hollandsche Bank Unie N.V. | Exhibit 4.55 to Registrants Annual Report on Form 20-F for the year ended December 31, 2008 | ||
|
||||
4.43
|
Supplemental Agreement dated June 26, 2008 to the | Exhibit 4.56 to |
69
Exhibit | ||||
No.: | Exhibit Description | Where Filed | ||
|
Facility Agreement dated December 24, 2007 between FreeSeas Inc. and Credit Suisse | Registrants Annual Report on Form 20-F for the year ended December 31, 2008 | ||
|
||||
4.44
|
Supplemental Agreement dated March 23, 2009 to the Facility Agreement dated December 24, 2007 between FreeSeas Inc. and Credit Suisse | Exhibit 4.57 to Registrants Annual Report on Form 20-F for the year ended December 31, 2008 | ||
|
||||
4.45
|
First Supplemental Agreement dated March 17, 2009 to Loan Agreement dated March 31, 2008 with First Business Bank S.A. | Exhibit 4.58 to Registrants Annual Report on Form 20-F for the year ended December 31, 2008 | ||
|
||||
4.46
|
Deed of Amendment dated March 17, 2009 of the Deed of Covenant dated April 2, 2008 between Adventure Nine S.A. and First Business Bank S.A. | Exhibit 4.59 to Registrants Annual Report on Form 20-F for the year ended December 31, 2008 | ||
|
||||
4.47
|
Term Sheet dated March 2009 between HBU and FreeSeas Inc. | Exhibit 4.60 to Registrants Annual Report on Form 20-F for the year ended December 31, 2008 | ||
|
||||
4.48
|
Amended and Restated Services Agreement dated October 1, 2008 between FreeSeas Inc. and Free Bulkers S.A. | Exhibit 4.61 to Registrants Annual Report on Form 20-F for the year ended December 31, 2008 | ||
|
||||
4.49
|
Memorandum of Agreement dated August 5, 2009 for the M/V Free Neptune | Exhibit 99.4 to Registrants 6-K filed on October 22, 2009 | ||
|
||||
4.50
|
Amendment and Restatement Agreement dated September 1, 2009 among Adventure Two, Adventure Three, Adventure Seven, Adventure Eleven, FreeSeas Inc. and New HBU II N.V. | Exhibit 99.5 to Registrants 6-K filed on October 22, 2009 | ||
|
||||
4.51
|
Facility Agreement dated September 1, 2009 among Adventure Two, Adventure Three, Adventure Seven, Adventure Eleven, FreeSeas Inc. and New HBU II N.V. | Exhibit 99.6 to Registrants 6-K filed on October 22, 2009 | ||
|
||||
4.52
|
Deed of Release of Whole dated September 15, 2009 by New HBU II N.V. in favour of Adventure Two, Adventure Three, Adventure Seven and Adventure Eleven | Exhibit 99.7 to Registrants 6-K filed on October 22, 2009 | ||
|
||||
4.53
|
Deed of Assignment dated September 15, 2009 between Adventure Two and New HBU II N.V. | Exhibit 99.8 to Registrants 6-K filed on October 22, 2009 | ||
|
||||
4.54
|
Deed of Assignment dated September 15, 2009 between Adventure Three and New HBU II N.V. | Exhibit 99.9 to Registrants 6-K filed on October 22, 2009 | ||
|
||||
4.55
|
Deed of Assignment dated September 15, 2009 between Adventure Seven and New HBU II N.V. | Exhibit 99.10 to Registrants 6-K filed on October 22, 2009 | ||
|
||||
4.56
|
Deed of Assignment dated September 15, 2009 between Adventure Eleven and New HBU II N.V. | Exhibit 99.11 to Registrants 6-K filed on October 22, 2009 | ||
|
||||
4.57
|
Addendum No. 1 dated September 17, 2009 to the Amended and Restated Services Agreement dated October 1, 2008 by and between FreeSeas Inc. and Free Bulkers S.A. | Exhibit 99.12 to Registrants 6-K filed on October 22, 2009 | ||
|
||||
4.58
|
Form of Standard Ship Management Agreement by and between Free Bulkers S.A. and each of Adventure Five S.A. through Adventure Twelve S.A. | Exhibit 99.13 to Registrants 6-K filed on October 22, 2009 | ||
|
||||
4.59
|
Form of Addendum to BIMCO Management Agreement by and between Free Bulkers S.A. and each of Adventure Two S.A. through Adventure Twelve S.A. | Exhibit 99.14 to Registrants 6-K filed on October 22, 2009 | ||
|
||||
4.60
|
Loan Agreement dated December 15, 2009 among | Filed herewith |
70
Exhibit | ||||
No.: | Exhibit Description | Where Filed | ||
|
Adventure Nine, Adventure Twelve and First Business Bank | |||
|
||||
4.61
|
First Priority Mortgage on the M/V Free Impala in favor of First Business Bank | Filed herewith | ||
|
||||
4.62
|
First Preferred Mortgage on the M/V Free Neptune in favor of First Business Bank | Filed herewith | ||
|
||||
4.63
|
Deed of Covenants dated December 16, 2009 between Adventure Nine and First Business Bank | Filed herewith | ||
|
||||
4.64
|
Amendment and Restatement Agreement dated December 1, 2009 among Adventure Two, Adventure Three, Adventure Seven, Adventure Eleven, FreeSeas Inc. and New HBU II N.V. | Filed herewith | ||
|
||||
4.65
|
Restated Facility Agreement dated December 1, 2009 among Adventure Two, Adventure Three, Adventure Seven, Adventure Eleven, FreeSeas Inc. and New HBU II N.V. | Filed herewith | ||
|
||||
4.66
|
Third Supplemental Agreement dated November 27, 2009 to the Facility Agreement dated December 24, 2007 between FreeSeas Inc. and Credit Suisse | Filed herewith | ||
|
||||
4.67
|
First Preferred Liberian Ship Mortgage on the M/V Free Goddess in favor of Credit Suisse AG | Filed herewith | ||
|
||||
4.68
|
First Preferred Liberian Ship Mortgage on the M/V Free Hero in favor of Credit Suisse AG | Filed herewith | ||
|
||||
4.69
|
First Preferred Liberian Ship Mortgage on the M/V Free Jupiter in favor of Credit Suisse AG | Filed herewith | ||
|
||||
8.1
|
Subsidiaries of the Registrant | Filed as Exhibit 21.1 to Registrants Registration Statement on Form F-1 (File No. 333-162630) filed on October 22, 2009 and incorporated herein by reference | ||
|
||||
12.1
|
Section 302 Certification of Chief Executive Officer | Filed herewith | ||
|
||||
12.2
|
Section 302 Certification of Chief Financial Officer | Filed herewith | ||
|
||||
13.1
|
Section 906 Certification of Chief Executive Officer | Filed herewith | ||
|
||||
13.2
|
Section 906 Certification of Chief Financial Officer | Filed herewith | ||
|
||||
15.1
|
Letter Regarding Change in Certifying Accountant | Filed herewith | ||
|
||||
15.2
|
Consent of PricewaterhouseCoopers, S.A. | Filed herewith | ||
|
||||
15.3
|
Consent of Ernst & Young (Hellas) Certified Auditors Accountants S.A. | Filed herewith |
71
72
F - 1
FREESEAS INC.
By:
Name:
/s/ Alexandros Mylonas
Title:
Chief Financial Officer
Table of Contents
Page
Number
F-2
F-3
F-4
F-5
F-6
F-7 F-8
F-9
Table of Contents
F - 2
June 16, 2010
Table of Contents
F - 3
Athens
April 14, 2009
Table of Contents
F - 4
Year ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
OPERATING REVENUES
|
$ | 57,533 | $ | 66,689 | $ | 20,147 | ||||||
|
||||||||||||
OPERATING EXPENSES:
|
||||||||||||
Voyage expenses
|
(1,394 | ) | (527 | ) | (267 | ) | ||||||
Vessel operating expenses
|
(17,813 | ) | (16,354 | ) | (6,001 | ) | ||||||
Depreciation expense (Note 4)
|
(16,006 | ) | (13,349 | ) | (4,435 | ) | ||||||
Amortization of deferred charges (Note 5)
|
(1,742 | ) | (788 | ) | (757 | ) | ||||||
Management and other fees to a related party
|
(1,874 | ) | (2,634 | ) | (875 | ) | ||||||
Commissions
|
(3,089 | ) | (3,383 | ) | (1,095 | ) | ||||||
General and administrative expenses
|
(4,156 | ) | (2,863 | ) | (2,207 | ) | ||||||
Bad debts
|
| (221 | ) | (118 | ) | |||||||
Gains on sale of vessel (Note 4)
|
| | 1,369 | |||||||||
|
||||||||||||
|
||||||||||||
Income (loss) from operations
|
$ | 11,459 | $ | 26,570 | $ | 5,761 | ||||||
|
||||||||||||
OTHER INCOME (EXPENSE):
|
||||||||||||
Interest and finance costs
|
(4,323 | ) | (6,453 | ) | (5,774 | ) | ||||||
Loss on derivative instruments (Note 7)
|
(111 | ) | (1,456 | ) | (749 | ) | ||||||
Interest income
|
24 | 580 | 639 | |||||||||
Other
|
(190 | ) | (49 | ) | (33 | ) | ||||||
|
||||||||||||
|
||||||||||||
Other income (expense)
|
$ | (4,600 | ) | $ | (7,378 | ) | $ | (5,917 | ) | |||
|
||||||||||||
|
||||||||||||
Net income (loss)
|
$ | 6,859 | $ | 19,192 | $ | (156 | ) | |||||
|
||||||||||||
|
||||||||||||
Basic earnings (loss) per share
|
$ | 0.27 | $ | 0.91 | $ | (0.02 | ) | |||||
Diluted earnings (loss) per share
|
$ | 0.27 | $ | 0.91 | $ | (0.02 | ) | |||||
Basic weighted average number of shares
|
25,463,862 | 21,006,497 | 8,786,287 | |||||||||
Diluted weighted average number of shares
|
25,463,862 | 21,051,963 | 8,786,287 |
F - 5
Additional | Retained | |||||||||||||||||||
Common | Common | Paid-in | Earnings | |||||||||||||||||
Shares | Shares $ | Capital | (Accumulated deficit) | Total | ||||||||||||||||
Balance December 31,
2006
|
6,290,100 | 6 | 9,703 | (2,702 | ) | 7,007 | ||||||||||||||
Issuance of shares, net
(Note 12)
|
12,650,000 | 12 | 95,141 | 95,153 | ||||||||||||||||
Distributions to shareholders
|
| (6 | ) | (6 | ) | |||||||||||||||
Stock compensation expense
|
| 96 | 96 | |||||||||||||||||
Stock issued upon exercise
of warrants
|
1,803,356 | 2 | 8,665 | 8,667 | ||||||||||||||||
Discount on promissory note
|
1,865 | 1,865 | ||||||||||||||||||
Net loss
|
| (156 | ) | (156 | ) | |||||||||||||||
|
||||||||||||||||||||
Balance December 31,
2007
|
20,743,456 | 20 | 115,464 | (2,858 | ) | 112,626 | ||||||||||||||
Dividend payments
|
(7,335 | ) | (5,822 | ) | (13,157 | ) | ||||||||||||||
Stock compensation expense
|
107 | 107 | ||||||||||||||||||
Stock issued upon exercise
of warrants
|
177,873 | 836 | 836 | |||||||||||||||||
Stock issued upon exercise
of options
|
250,000 | 1 | 1,250 | 1,250 | ||||||||||||||||
Net income
|
19,192 | 19,192 | ||||||||||||||||||
|
||||||||||||||||||||
Balance December 31,
2008
|
21,171,329 | 21 | 110,322 | 10,512 | 120,855 | |||||||||||||||
Common shares issued
|
10,041,151 | 10 | 16,234 | | 16,244 | |||||||||||||||
Stock compensation expense
|
| | 493 | | 493 | |||||||||||||||
Restricted shares issued
|
1,275,000 | 1 | | | 1 | |||||||||||||||
Net income
|
| | | 6,859 | 6,859 | |||||||||||||||
Balance December 31, 2009
|
32,487,480 | $ | 32 | $ | 127,049 | $ | 17,371 | $ | 144,452 |
F - 6
Year Ended | ||||||||||||
December 31, | December 31, | December 31, | ||||||||||
2009 | 2008 | 2007 | ||||||||||
Cash Flows from Operating Activities:
|
||||||||||||
Net income (loss)
|
$ | 6,859 | $ | 19,192 | $ | (156 | ) | |||||
|
||||||||||||
Adjustments to reconcile net income (loss) to net cash
|
||||||||||||
Depreciation (Note 4)
|
16,006 | 13,349 | 4,435 | |||||||||
Amortization of deferred charges (Note 5)
|
2,087 | 1,141 | 757 | |||||||||
Amortization of debt discount
|
| | 433 | |||||||||
Provision for bad debts
|
| 221 | 118 | |||||||||
Compensation cost (Note 11)
|
494 | 107 | 96 | |||||||||
Write off of deferred financing fees (Note 5)
|
111 | 639 | 2,570 | |||||||||
Change in fair value of derivatives (Note 7)
|
(560 | ) | 1,061 | 749 | ||||||||
Amortization of deferred revenue
|
(81 | ) | (368 | ) | (1,516 | ) | ||||||
Gain on sale of vessel (Note 4)
|
| | (1,369 | ) | ||||||||
Back log asset (Note 6)
|
907 | 899 | | |||||||||
|
||||||||||||
Changes in:
|
||||||||||||
-Trade receivables
|
(1,199 | ) | (973 | ) | 100 | |||||||
-Insurance claims
|
8,567 | (1,691 | ) | (15,631 | ) | |||||||
-Due from related party
|
224 | (597 | ) | (997 | ) | |||||||
-Inventories
|
(22 | ) | (80 | ) | (257 | ) | ||||||
-Prepayments and other
|
200 | (638 | ) | (334 | ) | |||||||
-Accounts payable
|
(170 | ) | 7,735 | 1,178 | ||||||||
-Accrued liabilities
|
(10,037 | ) | (5,366 | ) | 15,198 | |||||||
-Unearned revenue
|
(904 | ) | 537 | 604 | ||||||||
-Due to related party
|
6 | 12 | | |||||||||
Dry-docking and special survey (Note 5)
|
(1,097 | ) | (2,617 | ) | (907 | ) | ||||||
|
||||||||||||
|
||||||||||||
Net Cash from Operating Activities
|
$ | 21,391 | $ | 32,563 | $ | 5,071 | ||||||
|
||||||||||||
Cash flows from (used in) Investing Activities:
|
||||||||||||
Vessel acquisitions (Note 4 & Note 6)
|
(11,302 | ) | (182,539 | ) | (97,585 | ) | ||||||
Cash from sale of vessel, net
|
| | 10,606 | |||||||||
|
||||||||||||
|
||||||||||||
Net Cash used in Investing Activities
|
$ | (11,302 | ) | $ | (182,539 | ) | $ | (86,979 | ) | |||
|
||||||||||||
Cash flows from (used in) Financing Activities:
|
||||||||||||
(Increase) in restricted cash
|
(655 | ) | (2,245 | ) | (350 | ) | ||||||
Net movement in bank overdraft
|
| | (2,000 | ) | ||||||||
Proceeds from long term loan
|
6,000 | 153,650 | 104,743 | |||||||||
Payments of bank loans
|
(28,391 | ) | (49,600 | ) | (56,273 | ) | ||||||
Payments of shareholders loans
|
| | (16,614 | ) | ||||||||
Proceeds from issuance of common shares, net of
issuance costs (Note 12)
|
16,244 | | 95,153 | |||||||||
Exercise of warrants (Note 12)
|
| 836 | 8,667 | |||||||||
Exercise of stock options (Note 12)
|
| 1,250 | |
F - 7
Year Ended | ||||||||||||
December 31, | December 31, | December 31, | ||||||||||
2009 | 2008 | 2007 | ||||||||||
Shareholders loans
|
| | 14,000 | |||||||||
Common stock dividend
|
| (13,157 | ) | | ||||||||
Deferred financing fees (Note 5)
|
(324 | ) | (774 | ) | (2,396 | ) | ||||||
|
||||||||||||
|
||||||||||||
Net Cash from (used in) Financing Activities
|
$ | (7,126 | ) | $ | 89,960 | $ | 144,930 | |||||
|
||||||||||||
Net increase (decrease) in cash in hand and at bank
|
$ | 2,963 | $ | (60,016 | ) | $ | 63,022 | |||||
Cash and cash equivalents, Beginning of year
|
3,378 | 63,394 | 372 | |||||||||
|
||||||||||||
|
||||||||||||
Cash and cash equivalents, end of year
|
$ | 6,341 | $ | 3,378 | $ | 63,394 | ||||||
|
||||||||||||
|
||||||||||||
Supplemental Cash Flow Information:
|
||||||||||||
Cash paid for interest
|
$ | 4,462 | $ | 4,410 | $ | 2,629 | ||||||
Non-cash shareholder distributions
|
| | $ | 6 | ||||||||
Discount on promissory note
|
| | $ | 1,865 | ||||||||
|
||||||||||||
Liability assumed in connection with vessel acquisitions
|
| | $ | 3,136 |
F - 8
% | Date of | Date of | ||||||||||||||||||
Company | Owned | M/V | Type | Dwt | Built | Acquisition | Disposal | |||||||||||||
Adventure Two S.A.
|
100% | Free Destiny | Handysize | 25,240 | 1982 | 08/04/04 | N/A | |||||||||||||
Adventure Three S.A.
|
100% | Free Envoy | Handysize | 26,318 | 1984 | 09/29/04 | N/A | |||||||||||||
Adventure Four S.A.
|
100% | Free Fighter | Handysize | 38,905 | 1982 | 06/14/05 | 04/27/07 | |||||||||||||
Adventure Five S.A.
|
100% | Free Goddess | Handysize | 22,051 | 1995 | 10/30/07 | N/A | |||||||||||||
Adventure Six S.A.
|
100% | Free Hero | Handysize | 24,318 | 1995 | 07/03/07 | N/A | |||||||||||||
Adventure Seven S.A.
|
100% | Free Knight | Handysize | 24,111 | 1998 | 03/19/08 | N/A | |||||||||||||
Adventure Eight S.A.
|
100% | Free Jupiter | Handymax | 47,777 | 2002 | 09/05/07 | N/A | |||||||||||||
Adventure Nine S.A.
|
100% | Free Impala | Handysize | 24,111 | 1997 | 04/02/08 | N/A | |||||||||||||
Adventure Ten S.A.
|
100% | Free Lady | Handymax | 50,246 | 2003 | 07/07/08 | N/A | |||||||||||||
Adventure Eleven S.A
|
100% | Free Maverick | Handysize | 23,994 | 1998 | 09/01/08 | N/A | |||||||||||||
Adventure Twelve S.A.
|
100% | Free Neptune | Handysize | 30,838 | 1996 | 08/25/09 | N/A |
a) | FASB Accounting Standards Codification: In June 2009, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standard No. 168 (SFAS 168), The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles a replacement of FASB Statement No. 162 codified as Accounting Standards Codification (ASC) 105, which establishes the ASC as the source of authoritative accounting literature recognized by the FASB to be applied by nongovernmental entities in addition to rules and interpretive releases of the Securities and Exchange Commission (SEC), which are sources of authoritative accounting principles generally accepted in the United States of America (GAAP) for SEC registrants. All other non-grandfathered, non-SEC accounting literature not included in the Codification will become non-authoritative. ASC 105 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of the financial statements. Following this statement, the FASB will issue new standards in the form of Accounting Standards Updates (ASU). In conjunction with the issuance of SFAS 168, the FASB also issued its first Accounting Standards Update No. 2009-1, Topic 105 Generally Accepted Accounting Principles (ASU 2009-1) which includes SFAS 168 in its entirety as a transition to the ASC. ASU 2009-1 was effective on a prospective basis for interim and annual periods ended after September 15, 2009. The Codification was effective for the Company for the interim reporting period ended September 30, 2009. As a result of the adoption of this pronouncement, the Companys consolidated financial statements reference the Codification as the sole source of authoritative literature. Accordingly, all accounting references have been updated and SFAS references have been replaced with ASC references as if the SFAS has been adopted into the Codification. The Codification did not change or alter existing GAAP and, therefore, it did not have an impact of the Companys financial position, results of operations and cash flows. |
F - 9
b) | Principles of Consolidation: The accompanying consolidated financial statements have been prepared in accordance with US GAAP and include in each of the three years in the period ended December 31, 2009 the accounts and operating results of the Company and its wholly-owned subsidiaries referred to in Note 1 above. All significant inter-company balances and transactions have been eliminated upon consolidation. | ||
c) | Use of Estimates: The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | ||
d) | Comprehensive Income: The Company follows the provisions of ASC 220, Comprehensive Income, which requires separate presentation of certain transactions, which are recorded directly as components of stockholders equity. For the years ended December 31, 2009, 2008 and 2007 comprehensive income was the same as net income. | ||
e) | Concentration of Credit Risk: Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist principally of cash and cash equivalents, trade accounts receivable, insurance claims and derivative contracts (interest rate swaps). The Company places its cash and cash equivalents, consisting mostly of deposits, with high credit qualified financial institutions. The Company performs periodic evaluations of the relative credit standing of those financial institutions. The Company limits its credit risk with accounts receivable by performing ongoing credit evaluations of its charterers financial condition. The Company does not obtain rights to collateral to reduce its credit risk. The Company is exposed to credit risk in the event of non-performance by counter parties to derivative instruments; however, the Company limits its exposure by diversifying among counter parties with high credit ratings. | ||
Credit risk with respect to trade accounts receivable is high due to the fact that the Companys total income is derived from few charterers. During the years ended December 31, 2009, 2008 and 2007 charterers that individually accounted for more than 10% of the Companys voyage revenues are as follows: |
Charterer | FY 2009 | FY 2008 | FY 2007 | |||
A
|
37% | 38% | | |||
B
|
18% | 13% | | |||
C
|
Less than 10% | 10% | Less than 10% | |||
D
|
| | 30% | |||
E
|
| | 19% |
f) | Foreign Currency Translation: The functional currency of the Group is the U.S. Dollar because the Companys vessels operate in international shipping markets, and therefore primarily transact business in U.S. Dollars. The Companys accounting records are maintained in U.S. Dollars. Transactions involving other currencies during the year are converted into U.S. Dollars using the exchange rates in effect at the time of the transactions. At the balance sheet date, monetary assets and liabilities, which are denominated in other currencies, are translated into U.S. Dollars at the year-end exchange rates. Resulting gains or losses are included in other income/loss in the accompanying consolidated statements of operations. | ||
g) | Cash and Cash Equivalents: The Company considers highly liquid investments such as time deposits and certificates of deposit with an original maturity of three months or less to be cash equivalents. | ||
h) | Restricted Cash: Restricted cash includes bank deposits that are required under the Companys borrowing arrangements to be kept as part of the security required under the respective loan agreements. | ||
i) | Trade Receivables, net: The amount shown as Trade Receivables at each balance sheet date includes receivables from charterers for hire, freight and demurrage billings, net of an allowance for doubtful debts. An estimate is made of the allowance for doubtful debts based on a review of all outstanding amounts at year end, and an allowance is made for any accounts which management believes are not recoverable | ||
j) | Insurance Claims: Insurance claims comprise claims submitted and/or claims in the process of compilation for submission (claims pending) relating to hull and machinery or protection and indemnity insurance coverage. They are recorded as incurred on the accrual basis and represent the claimable expenses incurred, net of deductibles, the recovery of which is probable under the related insurance policies and the Company can make an estimate of the amount to be reimbursed. Any non-recoverable amounts are included in |
F - 10
accrued liabilities and are classified as operating expenses in the statement of operations. The classification of insurance claims (if any) into current and non-current assets is based on managements expectations as to their collection dates. | |||
k) | Inventories: Inventories, which are comprised of bunkers and lubricants remaining on board the vessels at year end, are valued at the lower of cost, as determined on a first-in, first-out basis, or market. | ||
l) | Vessels Cost: Vessels are stated at cost, which consists of the contract purchase price and any material expenses incurred upon acquisition (initial repairs, improvements, delivery expenses and other expenditures to prepare the vessel for her initial voyage). Subsequent expenditures for conversions and major improvements are also capitalized when they appreciably extend the life, increase the earning capacity or improve the efficiency or safety of the vessels. Otherwise, these expenditures are charged to expense as incurred. | ||
m) | Vessels Depreciation: The cost of the Groups vessels is depreciated on a straight-line basis over the vessels remaining economic useful lives from the acquisition date, after considering the estimated residual value. Effective April 1, 2009, and following managements reassessment of the useful lives of the Companys vessels, the fleet useful life was increased from 27 to 28 years. Managements estimate was based on the current vessels operating condition, as well as the conditions prevailing in the market for the same type of vessels. The effect of this change in accounting estimate, which did not require retrospective application as per ASC 250, Accounting Changes and Error Corrections was to increase net income for the year ended December 31, 2009 by $1,088 or $0.04 per weighted average number of share, both basic and diluted. | ||
n) | Impairment of Long-lived Assets: The Company follows the guidance under ASC 360, Property, Plant and Equipment, which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. The standard requires that, long-lived assets and certain identifiable intangibles held and used or disposed of by an entity be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. When the estimate of undiscounted cash flows, excluding interest charges, expected to be generated by the use of the asset is less than its carrying amount, the Company should evaluate the asset for an impairment loss. Measurement of the impairment loss is based on the fair value of the asset which is determined based on management estimates and assumptions and by making use of available market data. The Company evaluates the carrying amounts and periods over which long-lived assets are depreciated to determine if events have occurred which would require modification to their carrying values or useful lives. In evaluating useful lives and carrying values of long-lived assets, management reviews certain indicators of potential impairment, such as future undiscounted net operating cash flows, vessel sales and purchases, business plans and overall market conditions. The Company determines future undiscounted net operating cash flows for each vessel and compares it to the vessels carrying value. The future undiscounted net operating cash flows are determined by considering estimated vessels utilization, its scrap value, the charter revenues from existing time charters for the fixed fleet days and an estimated daily time charter equivalent for the unfixed days over the remaining estimated useful life of the vessel, net of vessel operating expenses adjusted for inflation, and cost of scheduled major maintenance. When the Companys estimate of future undiscounted net operating cash flows for any vessel is lower than the vessels carrying value, the carrying value is written down, by recording a charge to operations, to the vessels fair market value if the fair market value is lower than the vessels carrying value. As of December 31, 2009, the Company performed an impairment assessment of its long-lived assets by comparing the undiscounted net operating cash flows for each vessel to its respective carrying value. The significant factors and assumptions the Company used in each future undiscounted net operating cash flow analysis included, among others, operating revenues, off-hire revenues, dry-docking costs, operating expenses and management fee estimates. Revenue assumptions were based on contracted time charter rates up to the end of life of the current contract of each vessel as well as Forward Freight Agreements (FFAs) and historical average time charter rates for the remaining life of the vessel after the completion of the current contracts. In addition, the Company used annual operating expenses escalation factor and an estimate of off hire days. All estimates used and assumptions made were in accordance with the Groups internal budgets and historical experience of the shipping industry. The Companys assessment concluded that no impairment of vessel existed as of December 31, 2009, as the future undiscounted net operating cash flows per vessel exceeded the carrying value of each vessel. | ||
o) | Accounting for Special Survey and Dry-docking Costs: The Group follows the deferral method of accounting for special survey and dry-docking costs, whereby actual costs incurred are deferred and are amortized over a period of five and two and a half years, respectively. If special survey or dry-docking is performed prior to the scheduled date, the remaining un-amortized balances are immediately written-off. Indirect costs and/or costs related to ordinary maintenance, carried out while at dry dock, are expensed when incurred as they do not provide any future economic benefit. | ||
p) | Financing Costs: Fees incurred for obtaining new loans are deferred and amortized over the loans respective repayment periods, using the effective interest rate method. These charges are included in the balance sheet line item Deferred Charges. Any unamortized balance of costs relating to loans repaid or refinanced is expensed in the period the repayment or refinancing is made, if the refinancing is deemed to be a debt extinguishment under the provision of ASC 470-50 Debt: Modifications and Extinguishments. |
F - 11
q) | Unearned Revenue: Unearned revenue includes cash received prior to the balance sheet date and is related to revenue earned after such date. These amounts are recognized as revenue over the voyage or charter period. | ||
r) | Deferred Revenue and Back-log assets: When a vessel is acquired with an assumed remaining time charter, the Company records any below or above market value of the time charter assumed. The difference between market and assumed below-market charter value is discounted using the weighted average cost of capital method and is recorded as deferred revenue or a back log asset and amortized on a straight line basis to revenue over the remaining life of the assumed time charter. | ||
s) | Interest Rate Swaps: The Company uses interest rate swaps to manage net exposure to interest rate changes related to its borrowings and to lower its overall borrowing costs. Such swap agreements, designated as economic hedges are recorded at fair value with changes in the derivatives fair value recognized in earnings unless specific hedge accounting criteria are met. During the years ended December 31, 2007, 2008 and 2009, there was no derivative transaction meeting such hedge accounting criteria; therefore the change in their fair value is recognised in earnings. Effective January 1, 2009, the Company adopted the accounting pronouncement relating to the expanded disclosure requirements about derivative instruments and hedging activities codified as ASC 815, Derivatives and Hedging. ASC 815 intends to provide users of financial statements with an enhanced understanding of: (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for, and (c) how derivative instruments and related hedged items affect an entitys financial position, financial performance, and cash flows. | ||
ASC 815 requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about the fair value of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative instruments. ASC 815 relates to disclosures only and its adoption did not have any effect on the financial condition, results of operations or liquidity of the Company. | |||
t) | Financial Instruments: The principal financial assets of the Company consist of cash and cash equivalents and restricted cash, accounts receivable, trade (net of allowance), insurance claims, prepayments and advances. The principal financial liabilities of the Company consist of accounts payable, accrued liabilities, deferred revenue, long-term debt, and interest-rate swaps. The carrying amounts reflected in the accompanying consolidated balance sheets of financial assets and liabilities, approximate their respective fair values. | ||
u) | Fair Value Measurements : In September 2006, the FASB issued ASC 820, Fair Value Measurements and Disclosures which defines and provides guidance as to the measurement of fair value. ASC 820 creates a hierarchy of measurement and indicates that, when possible, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. ASC 820 applies when assets or liabilities in the financial statements are to be measured at fair value, but does not require additional use of fair value beyond the requirements in other accounting principles. The statement was effective for the Company as of January 1, 2008, excluding certain nonfinancial assets and nonfinancial liabilities, for which the statement was effective for fiscal years beginning after November 15, 2008 and its adoption did not have a significant impact on the Companys financial position or results of operations. Effective January 1, 2009, the Company adopted ASC 820-10-65, Fair Value Measurements and Disclosures that provides additional guidelines for estimating fair value in accordance with fair value accounting. The adoption of this guidance did not have a material impact on the Companys consolidated financial position, cash flows or results of operations. In August 2009, the FASB issued ASU No. 2009-05, Measuring Liabilities at Fair Value, which provides additional guidance on how companies should measure liabilities at fair value under ASC 820. The ASU clarifies that the quoted price for an identical liability should be used. However, if such information is not available, a entity may use, the quoted price of an identical liability when traded as an asset, quoted prices for similar liabilities or similar liabilities traded as assets, or another valuation technique (such as the market or income approach). The ASU also indicates that the fair value of a liability is not adjusted to reflect the impact of contractual restrictions that prevent its transfer and indicates circumstances in which quoted prices for an identical liability or quoted price for an identical liability traded as an asset may be considered level 1 fair value. The adoption of this statement did not have a material impact on the Companys consolidated results of operations or financial condition. | ||
v) | Fair value option: In February, 2007, the FASB issued ASC 825, Financial Instruments, which permits companies to report certain financial assets and financial liabilities at fair value. ASC 825 was effective for the Company as of January 1, 2008 at which time the Company could elect to apply the standard prospectively and measure certain financial instruments at fair value. The Company has evaluated the guidance contained in ASC 825, and has elected not to report any existing financial assets or liabilities at fair value that are not already reported, therefore, the adoption of the statement had no impact on its financial position and results of operations. The Company retains the ability to elect the fair value option for certain future assets and liabilities acquired under this new pronouncement. In April 2009, the FASB issued guidance that amends the requirements for disclosures about fair value of financial instruments for annual as well as interim reporting periods. These pronouncements were effective prospectively for all interim and annual reporting periods ending after June 15, 2009. The adoption of this statement did not have any impact on the Companys financial condition and results of operations. |
F - 12
w) | Accounting for Revenue and Expenses: Revenue is recorded when services are rendered, the Company has a signed charter agreement or other evidence of an arrangement, the price is fixed or determinable, and collection is reasonably assured. Voyage revenues for the transportation of cargo are recognized ratably over the estimated relative transit time of each voyage while the related voyage expenses are recognized as incurred. A voyage is deemed to commence when a vessel is available for loading and is deemed to end upon the completion of the discharge of the current cargo. Estimated losses on voyages are provided for in full at the time such losses become evident. Under a voyage charter, the Group agrees to provide a vessel for the transportation of specific goods between specific ports in return for payment of an agreed upon freight rate per ton of cargo. Revenues from time chartering of vessels are accounted for as operating leases and are thus recognized on a straight line basis as the average revenue over the rental periods of such charter agreements, as service is performed, except for loss generating time charters, in which case the loss is recognized in the period when such loss is determined. A time charter involves placing a vessel at the charterers disposal for a period of time during which the charterer uses the vessel in return for the payment of a specified daily hire rate. Short period charters for less than three months are referred to as spot charters. Time charters extending three months to a year are generally referred to as medium term charters. All other time charters are considered long term. Under time charters, operating cost such as for crews, maintenance and insurance are typically paid by the owner of the vessel. | ||
x) | Profit Sharing Arrangements: From time to time, the Company has entered into profit sharing arrangements with its charterers, whereby the Company may have received additional income at an agreed percentage of net earnings earned by such charterer, where those earnings are over the base rate of hire and settled periodically during the term of the charter agreement. Revenues generated from the profit sharing arrangements are recorded in the period they are earned. | ||
y) | Repairs and Maintenance: All repair and maintenance expenses, including major overhauling and underwater inspection expenses, are charged against income as incurred and are included in vessel operating expenses in the accompanying Consolidated Statements of Operations. | ||
z) | Stock-Based Compensation: Following the provisions of ASC 718, Compensation- Stock Compensation the Company recognizes all share-based payments to employees, including grants of employee stock options, in the consolidated statements of operations based on their fair values on the grant date. Compensation cost on stock based awards with graded vesting is recognized on an accelerated basis as though each separately vesting portion of the award was-in substance, a separate award. | ||
aa) | Earnings per Share: Basic earnings per share are computed by dividing net income (loss) by the weighted average number of common shares outstanding during the periods presented. Diluted earnings per share reflect the potential dilution that would occur if securities or other contracts to issue common stock were exercised. Dilution has been computed by the treasury stock method whereby all of the Companys dilutive securities (warrants, options restricted shares) are assumed to be exercised and the proceeds used to repurchase common shares at the weighted average market price of the Companys common stock during the relevant periods. The incremental shares (the difference between the number of shares assumed issued and the number of shares assumed purchased) are included in the denominator of the diluted earnings per share computation unless such inclusion would be anti-dilutive. | ||
bb) | Segment Reporting: The Group reports financial information and evaluates its operations by total charter revenues. The Group does not have discrete financial information to evaluate the operating results for each type of charter. Although revenue can be identified for these types of charters, management does not identify expenses, profitability or other financial information for these charters. As a result, management, including the chief operating decision makers, reviews operating results solely by revenue per day and operating results of the fleet and thus the Group has determined that it operates under one reportable segment. Furthermore, when the Company charters a vessel to a charterer, the charterer is free to trade the vessel worldwide and, as a result, the disclosure of geographic information is impracticable. | ||
cc) | Subsequent Events: In May 2009, FASB issued ASC 855, Subsequent events. The objective of this guidance is to establish general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. In particular, this guidance sets forth: (i) the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements; (ii) the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements; and (iii) the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. This guidance does not result in significant changes in the subsequent events that an entity reportseither through recognition or disclosurein its financial statements. This guidance introduces the concept of financial statements being available to be issued. It requires the disclosure of the date through which an entity has evaluated subsequent events and the basis for that date, that is, whether that date represents the date the financial statements were issued or were available to be issued. In accordance with this guidance, an entity should apply the requirements to interim or annual financial periods ending after June 15, 2009. The Company has adopted ASC 855 for the financial period ended June 30, 2009. In February 2010, the FASB issued ASU 2010-09, Subsequent Events |
F - 13
(Topic 855)-Amendments to Certain Recognition and Disclosure Requirements. ASU 2010-09 addresses both the interaction of the requirements of Topic 855 with the SECs reporting requirements and the intended breadth of the reissuance disclosure provision related to subsequent events (ASC 855-10-50-4). This update amends ASC 855-10 as follows: (1) an entity that either (a) is an SEC filer or (b) is a conduit bond obligor for conduit debt securities that are traded in a public market (a domestic or foreign stock exchange or an over-the-counter market, including local or regional markets) is required to evaluate subsequent events through the date that the financial statements are issued. If an entity meets neither of those criteria, then it should evaluate subsequent events through the date the financial statements are available to be issued; (2) the glossary of ASC 855 is amended to include the definition of SEC filer. An SEC filer is an entity that is required to file or furnish its financial statements with either the SEC or, with respect to an entity subject to Section 12 (i) of the Securities Exchange Act of 1934, as amended, the appropriate agency under that Section. It does not include an entity that is not otherwise an SEC filer whose financial statements are include in a submission by another SEC filer; (3) an entity that is an SEC filer is not required to disclose the date through which subsequent events have been evaluated. This change alleviates potential conflicts between ASC 855-10 and the SECs requirements; (4) the glossary of ASC 855 is amended to remove the definition of public entity. The definition of a public entity in ASC 855 was used to determine the date through which subsequent events should be evaluated. Based on the amendments, that definition is no longer necessary for purposes of ASC 855; (5) the scope of the reissuance disclosure requirements is refined to include revised financial statements only. The term revised financial statements is added to the glossary of ASC 855. Revised financial statements include financial statements revised either as a result of correction of an error or retrospective application of U.S. generally accepted accounting principles. The amendments remove the requirement for an SEC filer to disclose a date in both issued and revised financial statements. Revised financial statements include financial statements revised as a result of either correction of an error or retrospective application of U.S. GAAP. Additionally, the Board has clarified that if the financial statements have been revised, then an entity that is not a SEC filer should disclose both the date that the financial statements were issued or available to be issued and the date the revised financial statements were issued or available to be issued. Those amendments remove potential conflicts with the SECs literature. All of the amendments in this update are effective upon issuance of the final update, except for use of the issued date for conduit debt obligors. That amendment is effective for interim or annual period ending after June 15, 2010. The Company has adopted ASU 2010-09 for the financial period ended December 31, 2009. | |||
dd) | Recent Accounting Standards Updates: |
F - 14
F - 15
Accumulated | Net Book | |||||||||||
Vessel Cost | Depreciation | Value | ||||||||||
December 31, 2006
|
$ | 28,273 | $ | (8,904 | ) | $ | 19,369 | |||||
Additions new vessels
|
100,721 | | 100,721 | |||||||||
Depreciation
|
| (4,435 | ) | (4,435 | ) | |||||||
Disposal of vessel
|
(11,213 | ) | 3,579 | (7,634 | ) | |||||||
|
||||||||||||
December 31, 2007
|
$ | 117,781 | $ | (9,760 | ) | $ | 108,021 | |||||
Additions new vessels
|
180,733 | | 180,733 | |||||||||
Depreciation
|
| (13,349 | ) | (13,349 | ) | |||||||
|
||||||||||||
December 31, 2008
|
$ | 298,514 | $ | (23,109 | ) | $ | 275,405 | |||||
Additions new vessels
|
11,302 | | 11,302 | |||||||||
Depreciation
|
| (16,006 | ) | (16,006 | ) | |||||||
|
||||||||||||
December 31, 2009
|
$ | 309,816 | $ | (39,115 | ) | $ | 270,701 | |||||
|
F - 16
Special | ||||||||||||||||
Dry-docking | survey | Financing | ||||||||||||||
costs | costs | costs | Total | |||||||||||||
December 31, 2006
|
$ | 730 | $ | 1,453 | $ | 117 | $ | 2,300 | ||||||||
Additions
|
147 | 760 | 2,396 | 3,303 | ||||||||||||
Write-offs
|
(350 | ) | (1,252 | ) | (1,083 | ) | (2,685 | ) | ||||||||
Amortization
|
(285 | ) | (209 | ) | (263 | ) | (757 | ) | ||||||||
|
||||||||||||||||
December 31, 2007
|
$ | 242 | $ | 752 | $ | 1,167 | $ | 2,161 | ||||||||
Additions
|
737 | 1,880 | 774 | 3,391 | ||||||||||||
Write-offs
|
| | (639 | ) | (639 | ) | ||||||||||
Amortization
|
(273 | ) | (515 | ) | (353 | ) | (1,141 | ) | ||||||||
|
||||||||||||||||
December 31, 2008
|
$ | 706 | $ | 2,117 | $ | 949 | $ | 3,772 | ||||||||
Additions
|
551 | 546 | 324 | 1,421 | ||||||||||||
Write-offs
|
| | (111 | ) | (111 | ) | ||||||||||
Amortization
|
(504 | ) | (1,238 | ) | (345 | ) | (2,087 | ) | ||||||||
|
||||||||||||||||
December 31, 2009
|
$ | 753 | $ | 1,425 | $ | 817 | $ | 2,995 | ||||||||
|
F - 17
Fair Value Measurements as of December 31, 2009 | ||||||||||||||||
Quoted | ||||||||||||||||
Prices | ||||||||||||||||
in Active | Significant | |||||||||||||||
Markets for | Other | Significant | ||||||||||||||
Identical | Observable | Unobservable | ||||||||||||||
Assets | Inputs | Inputs | ||||||||||||||
Liabilities | Total | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
Interest rate swap contracts
|
$ | 1,250 | $ | | $ | 1,250 | $ | | ||||||||
|
||||||||||||||||
|
||||||||||||||||
Total
|
$ | 1,250 | $ | | $ | 1,250 | $ | | ||||||||
|
F - 18
December 31, 2009 | December 31, 2008 | |||||||||||||||||||||||
Current | Long-term | Current | Long-term | |||||||||||||||||||||
Lender | portion | portion | Total | portion | portion | Total | ||||||||||||||||||
HBU (a)
|
$ | 3,000 | $ | 14,750 | $ | 17,750 | $ | 4,000 | $ | 17,750 | $ | 21,750 | ||||||||||||
HBU (b)
|
$ | 2,400 | $ | 21,809 | $ | 24,209 | $ | 6,200 | $ | 25,900 | $ | 32,100 | ||||||||||||
Credit Suisse (c)
|
$ | 5,000 | $ | 31,975 | $ | 36,975 | $ | 6,725 | $ | 36,975 | $ | 43,700 | ||||||||||||
Credit Suisse (d)
|
$ | 3,000 | $ | 28,275 | $ | 31,275 | $ | 6,775 | $ | 31,275 | $ | 38,050 | ||||||||||||
First Business Bank S.A. (e)
|
$ | 2,000 | $ | 25,750 | $ | 27,750 | $ | 3,000 | $ | 21,750 | $ | 24,750 | ||||||||||||
Total
|
$ | 15,400 | $ | 122,559 | $ | 137,959 | $ | 26,700 | $ | 133,650 | $ | 160,350 | ||||||||||||
|
Lender
|
Vessel | Remaining Repayment Terms | ||
|
||||
(a) HBU
|
M/V FREE KNIGHT
M/V FREE DESTINY M/V FREE ENVOY |
Twenty-three quarterly installments of $750 followed by one installment of $500. | ||
|
||||
(b) HBU
|
M/V FREE MAVERICK | Eleven quarterly installments of $600 and one balloon payment of $17,609 to be paid with the last installment. | ||
|
||||
(c) Credit Suisse
|
M/V FREE HERO
M/V FREE GODDESS M/V FREE JUPITER |
Twenty-four quarterly installments of $1,250 and a balloon payment of $6,975 to be paid with the last installment. | ||
|
||||
(d) Credit Suisse
|
M/V FREE LADY | Twenty-five consecutive quarterly installments of $750 and a balloon payment of $12,525 to be paid with the last installment. | ||
|
||||
(e) First Business Bank
|
M/V FREE IMPALA
M/V FREE NEPTUNE |
Twenty-eight quarterly consecutive installments, the first four installments of $500 beginning on March 16, 2010, then followed by twenty-four installments in the amount of $837.5 each plus a balloon payment in the amount of $5,650, payable together with the last installment. |
F - 19
a) | Credit Suisse loan agreement: i) the Company should maintain minimum cash balances of $375 for each of the Companys vessels covered by the loan agreement; ii) the aggregate fair market value of the financed vessels must not be less than 135% of the outstanding loan balance. | ||
b) | FBB loan agreement: i) the Company should maintain an average corporate liquidity of at least $3,000 ii) the leverage ratio of the corporate guarantor should not at any time exceed 55%; iii) the ratio of EBITDA to net interest expense must not be less than 3; iv) the fair market value of the financed vessels should be at least (a) 100% of the outstanding loan balance up to June 30, 2010, (b) 115% for the period July 1, 2010 to June 30, 2011 and (c) 125% thereafter.. | ||
c) | HBU loan agreement: i) the interest coverage ratio should not be less than 3.75; ii) the debt service coverage ratio should not be less than 1.00; iii) the gearing ratio should not exceed 2.5; iv) the outstanding loan balance should not be more than a ratio of the fair market value of the financed vessels as follows: (a) 70% from September 15, 2009 until and including June 30, 2010, (b) 100% from July 1, 2010 until and including June 30, 2011, (c) 110% from July 1, 2011 until and including June 30, 2012, (d) 120% from July 1, 2012 until and including December 30, 2012 and (e) 125% from December 31, 2012 onwards. |
F - 20
Period | Principal Repayments | |||
January 1, 2010 to December 31, 2010
|
15,400 | |||
January 1, 2011 to December 31, 2011
|
16,750 | |||
January 1, 2012 to December 31, 2012
|
33,759 | |||
January 1, 2013 to December 31, 2013
|
14,350 | |||
January 1, 2014 to December 31, 2014
|
14,350 | |||
January 1, 2015 and thereafter
|
43,350 | |||
Total
|
137,959 |
F - 21
Years ending December 31, | Amount* | |||
2010
|
$ | 8,744 | ||
2011
|
$ | 1,150 | ||
Total
|
$ | 9,894 |
* | These amounts do not include any assumed offhire. |
F - 22
For the year | For the year | For the year | ||||||||||
ended | ended | ended | ||||||||||
December 31, | December 31, | December 31, | ||||||||||
2009 | 2008 | , 2007 | ||||||||||
Numerator:
|
||||||||||||
Net income (loss) basic and diluted
|
$ | 6,859 | $ | 19,192 | $ | (156 | ) | |||||
Basic earnings per share denominator:
|
||||||||||||
Weighted average common shares outstanding
|
25,463,862 | 21,006,497 | 8,786,827 | |||||||||
Diluted earnings per share denominator:
|
||||||||||||
Weighted average common shares outstanding
|
25,463,862 | 21,051,963 | 8,786,827 | |||||||||
Dilutive common shares:
|
||||||||||||
Options
|
| 17,229 | | |||||||||
Warrants
|
| 28,237 | | |||||||||
|
||||||||||||
|
||||||||||||
|
||||||||||||
Dilutive effect
|
| 45,466 | | |||||||||
|
||||||||||||
|
||||||||||||
Weighted average common shares diluted
|
25,463,862 | 21,051,963 | 8,786,827 | |||||||||
|
||||||||||||
Basic income/(loss) per common share
|
$ | 0.27 | $ | 0.91 | $ | (0.02 | ) | |||||
Diluted income/(loss) per common share
|
$ | 0.27 | $ | 0.91 | $ | (0.02 | ) |
F - 23
Class A | ||||||||||||||||||||||||||||||||
Class A | Exercise | Options | Warrants | Exercise | ||||||||||||||||||||||||||||
Options | Warrants | Total | Price | Exercisable | Exercisable | Total | Price | |||||||||||||||||||||||||
December 31, 2006
|
750,000 | 200,000 | 950,000 | $ | 5.00 | 500,000 | 200,000 | 700,000 | $ | 5.00 | ||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Options granted
to directors
|
45,000 | | 45,000 | $ | 8.25 | | | | | |||||||||||||||||||||||
Options granted to
officers
|
125,000 | | 125,000 | $ | 8.25 | | | | | |||||||||||||||||||||||
Options forfeited
|
(165,000 | ) | | (165,000 | ) | $ | 5.00 | | | | | |||||||||||||||||||||
Options cancelled
|
(335,000 | ) | | (335,000 | ) | $ | 5.00 | (335,000 | ) | | (335,000 | ) | $ | 5.00 | ||||||||||||||||||
Options vested
|
| | | | 85,000 | | 85,000 | $ | 5.00 | |||||||||||||||||||||||
December 31, 2007
|
420,000 | 200,000 | 620,000 | $ | 5.83 | 250,000 | 200,000 | 450,000 | $ | 5.00 | ||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Options/Class A
warrants exercised
|
(250,000 | ) | (50,000 | ) | (300,000 | ) | $ | 5.00 | (250,000 | ) | (50,000 | ) | (300,000 | ) | $ | 5.00 | ||||||||||||||||
Options vested
|
| | | | 140,000 | | 140,000 | $ | 8.25 | |||||||||||||||||||||||
December 31, 2008
|
170,000 | 150,000 | 320,000 | $ | 6.73 | 140,000 | 150,000 | 290,000 | $ | 6.57 | ||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Options vested
|
| | | | 15,000 | | 15,000 | $ | 8.25 | |||||||||||||||||||||||
Options forfeited
|
(110,000 | ) | | (110,000 | ) | $ | 8.25 | (110,000 | ) | | (110,000 | ) | $ | 8.25 | ||||||||||||||||||
December 31, 2009
|
60,000 | 150,000 | 210,000 | $ | 5.93 | 45,000 | 150,000 | 195,000 | $ | 5.75 | ||||||||||||||||||||||
|
F - 24
F - 25
F - 26
F - 27
CLAUSE | HEADINGS | PAGE | ||||
1.
|
PURPOSE, DEFINITIONS AND INTERPRETATION | 1 | ||||
2.
|
THE LOAN | 11 | ||||
3.
|
INTEREST | 13 | ||||
4.
|
REPAYMENT - PREPAYMENT | 17 | ||||
5.
|
PAYMENTS, TAXES, LOAN ACCOUNT AND COMPUTATION | 20 | ||||
6.
|
REPRESENTATIONS AND WARRANTIES | 21 | ||||
7.
|
CONDITIONS PRECEDENT | 26 | ||||
8.
|
COVENANTS | 30 | ||||
9.
|
EVENTS OF DEFAULT | 38 | ||||
10.
|
INDEMNITIES - EXPENSES - FEES | 44 | ||||
11.
|
SECURITY, APPLICATION, AND SET-OFF | 47 | ||||
12.
|
UNLAWFULNESS, INCREASED COSTS | 51 | ||||
13.
|
ASSIGNMENT, PARTICIPATION, LENDING BRANCH | 53 | ||||
14.
|
MISCELLANEOUS | 54 | ||||
15.
|
NOTICES AND OTHER MATTERS | 56 | ||||
16.
|
APPLICABLE LAW AND JURISDICTION | 58 | ||||
|
||||||
|
SCHEDULES | |||||
|
||||||
1.
|
FORM OF DRAWDOWN NOTICE | 59 | ||||
2.
|
INSURANCES | 60 | ||||
|
||||||
SIGNATURE PAGE | 67 |
(1) | FBB-FIRST BUSINESS BANK S.A. , a bank incorporated in the Republic of Greece with its head office at 91 Michalakopoulou Street, 11528 Athens, Greece, acting except otherwise herein provided, through its office at 62, Notara and Sotiros Dios streets, 185 35 Piraeus, Greece (the Bank ); and | |
(2) | ADVENTURE NINE S.A., a company duly incorporated and validly existing under the laws of the Republic of the Marshall Islands and having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 (hereinafter called the First Borrower ); and | |
(3) | ADVENTURE TWELVE S.A., a company duly incorporated and validly existing under the laws of the Republic of Liberia and having its registered office at 80, Broad Street, Monrovia, Liberia (hereinafter called the Second Borrower ); and |
1. | PURPOSE, DEFINITIONS AND INTERPRETATION |
1.1 | Amount and Purpose | |
This Agreement sets out the terms and conditions upon and subject to which the Bank agrees to make available to the Borrowers, on a joint and several basis, a loan of up to the lesser of (i) 95% of the aggregate Appraised/Market value of the Vessels (as hereinafter defined) and (ii) $27,750,000 (United States Dollars twenty seven million seven hundred and fifty thousand) by way of one (1) Advance. | ||
For the purposes of this Clause, the Appraised/Market Value of the Vessels will be evidenced by a valuation of each Vessel addressed to the Bank on the basis of Clause 8.6 (b), to be obtained by a reputable independent shipbroker mutually acceptable to the Bank and the Borrowers. | ||
The Loan will be used by the Borrowers for the following purposes: | ||
(a) an amount of $21,750,000 (United States Dollars twenty one million seven hundred and fifty thousand) to refinance the existing indebtedness of m/v FREE IMPALA with the Bank as per the Loan Agreement dated 31 st March, 2008 (as amended); and | ||
(b) an amount of up to $6,000,000 (United States Dollars six million) to provide corporate liquidity to the Borrowers. | ||
1.2 | Definitions | |
In this Agreement, unless the context otherwise requires each term or expression defined in the recital of the parties and in this Clause shall have the meaning given to it in the recital of the parties, in this Clause: | ||
Accounts Pledge Agreement means an agreement to be entered into between the Borrowers and the Bank for the creation of a pledge over the Earnings Accounts and the Retention Account in favour of the Bank, in form and substance satisfactory to the Bank as the same may from time to time be amended and/or supplemented; |
1
Advance means each borrowing of a portion of the Commitment by the Borrowers or (as the context may require) the principal amount of such borrowing; | ||
Agreed Rate means a rate agreed between the Bank and the Borrowers on the basis of which (instead of LIBOR) the interest rate is determined pursuant to Clause 3.6; | ||
Approved Manager means for the time being Free Bulkers S.A., a company duly incorporated in the Republic of the Marshall Islands and having an office established in Greece (at 89 Akti Miaouli & 4 Mavrokordatou street, Piraeus, Greece) pursuant to the Greek laws 378/68, 27/75 and 814/79 (as amended) or any other person appointed by the Borrowers, with the prior written consent of the Bank, as the manager of the Vessels and includes its successors in title; | ||
Availability Period means the period starting on the date hereof and ending on the 31 st day of December, 2009 or until such later date as the Bank may agree in writing or on such earlier date (if any): (i) on which the whole Commitment has been advanced by the Bank to the Borrowers, or (ii) on which the Commitment is reduced to zero pursuant to Clauses 3.6, 9.9, 12.1 or 12.2 or any other Clause of this Agreement; | ||
Balloon Instalment means the principal part of the Loan amounting to $5,650,000 (Dollars five million six hundred fifty thousand); | ||
Bank means the Bank as specified in the beginning of this Agreement and includes its successors in title and transferees; | ||
Banking Day means any day on which banks and foreign exchange markets in New York, London, Piraeus and Athens and in each country or place in or at which an act is required to be done under this Agreement in accordance with the usual practice of the Bank, are open for the transaction of business of the nature contemplated in this Agreement; | ||
Borrowed Money means Indebtedness incurred in respect of (i) money borrowed or raised, (ii) any bond, note, loan stock, debenture or similar instrument, (iii) acceptance of documentary credit facilities, (iv) deferred payments for assets or services acquired, (v) rental payments under leases (whether in respect of land, machinery, equipment or otherwise) entered into primarily as a method of raising finance or of financing the acquisition of the asset leased, (vi) guarantees, bonds, stand-by letters of credit or other instruments issued in connection with the performance of contracts and (vii) guarantees or other assurances against financial loss in respect of Indebtedness of any person falling within any of sub-paragraphs (i) to (vi) above; | ||
Borrowers means the First Borrower and the Second Borrower as specified in the beginning of this Agreement and Borrower means each of them; | ||
Charterparty means any time or bareboat charterparty or contract of affreightment, agreement or related document in respect of the employment of any of the Vessels for a period for more than 12 months to be made between the relevant Borrower and any charterer (and shall include any addenda thereto) after the prior written consent of the Bank; | ||
Charterparty Assignment means the assignment of the Charterparty and after the termination thereof the assignment of any charterparty which exceeds or is capable of exceeding twelve (12) months in duration, executed or (as the context may require) to be executed by the relevant Borrower in favour of the Bank and the acknowledgement of notice of the assignment in respect of the Charterparty to be given by a Charterer, both in |
2
form and substance satisfactory to the Bank as the same may from time to time be amended and/or supplemented; | ||
Commitment means the amount which the Bank has agreed to lend to the Borrowers on a joint and several basis under Clause 2.1 as reduced pursuant to any relevant term of this Agreement; | ||
Commitment Letter means the Commitment Letter dated 04-11-2009 addressed by the Bank to the Borrowers and shall include any amendments or addenda thereto; | ||
Corporate Guarantee means an irrevocable and unconditional guarantee given or, as the context may require, to be given by the Corporate Guarantor in form and substance satisfactory to the Bank as a security for the Outstanding Indebtedness and any and all other obligations of the Borrowers under this Agreement; | ||
Corporate Guarantor means FREESEAS INC., a company duly incorporated in the Republic of the Marshall Islands and listed and trading in the Nasdaq Stock Exchange and/or any other person nominated by the Borrowers and acceptable to the Bank which may give a Corporate Guarantee; | ||
Default means any Event of Default or any event which with the giving of notice or lapse of time or the satisfaction of any other condition (or any combination thereof) would constitute an Event of Default; | ||
Default Rate means that rate of interest per annum which is determined in accordance with the provisions of Clause 3.4; | ||
DOC means a document of compliance issued to an Operator in accordance with rule 13 of the ISM Code; | ||
Dollars and $ mean the lawful currency of the United States of America and in respect of all payments to be made under any of the Security Documents means funds which are for same day settlement in the New York Clearing House Interbank Payments System (or such other U.S. dollar funds as may at the relevant time be customary for the settlement of international banking transactions denominated in Dollars); | ||
Drawdown Date means the day, being a Banking Day, on which the Commitment is or, as the context may require, shall be advanced to the Borrowers; | ||
Drawdown Notice means a notice substantially in the terms of Schedule 1; | ||
Earnings in relation to a Vessel, means all earnings of such Vessel, both present or future, including all freight, hire and passage moneys, compensation payable to the Owner in the event of requisition of a Vessel for hire, remuneration for salvage and towage services, demurrage and detention moneys, contributions of any nature whatsoever in respect of general average, damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of such Vessel and any other earnings whatsoever due or to become due to the Owner in respect of a Vessel and all sums recoverable under the Insurances in respect of loss of Earnings and includes, if and whenever such Vessel is employed on terms whereby any and all such moneys as aforesaid are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or sharing agreement which is attributable to such Vessel; |
3
Earnings Accounts means the accounts to be opened and maintained with the Lending Branch or with any other Branch of the Bank or with any other bank the Bank may designate to the Borrowers at the discretion of the Bank, to which (inter alia) all Earnings of the Vessels are to be paid in accordance with the provisions of this Agreement; | ||
Encumbrance means any mortgage, charge (whether fixed or floating), pledge, lien, hypothecation, assignment, security interest, title retention, arrest, seizure, garnishee order (whether nisi or absolute) or any other order or judgement having similar effect or other encumbrance of any kind securing or any right conferring a priority of payment in respect of any obligation of any person; | ||
Environmental Affiliate means any agent or employee of the Borrowers or any other Relevant Party or any person having a contractual relationship with the Borrowers or any other Relevant Party in connection with any Relevant Ship or her operation or the carriage of cargo thereon; | ||
Environmental Approval means any consent, authorisation, licence or approval of any governmental or public body or authorities or courts applicable to any Relevant Ship or her operation or the carriage of cargo thereon and/or passengers therein and/or provisions of goods and/or services on or from the Relevant Ship required under any Environmental Law; | ||
Environmental Claim means any and all enforcement, clean up, removal or other governmental or regulatory actions or orders instituted or completed pursuant to any Environmental Law or any Environmental Approval together with claims made by any third party relating to damage, contribution, loss or injury, resulting from any actual or threatened emission, spill, release or discharge of a Material of Environmental Concern from any Relevant Ship; | ||
Environmental Laws means all national, international and state laws, rules, regulations, treaties and conventions applicable to any Relevant Ship pertaining to the pollution or protection of human health or the environment including, without limitation, the carriage or Materials of Environmental Concern and actual or threatened emissions, spills, releases or discharges of Materials of Environmental Concern and actual or threatened emissions, spills, releases or discharges of Materials of Environmental Concern from any Relevant Ship; | ||
Event of Default means any event or circumstance set out in Clause 9 or described as such in any other of the Security Documents; | ||
Expenses means the aggregate at any relevant time (to the extent that the same have not been received or recovered by the Bank) of: |
(a) | all losses, liabilities, costs, charges, expenses, damages and outgoings of whatever nature, (including, without limitation, Taxes, repair costs, registration fees and insurance premiums, crew wages, repatriation expenses and seamens pension fund dues) suffered, incurred, charged to or paid or committed to be paid by the Bank in connection with the exercise of the powers referred to in or granted by any of the Security Documents or otherwise payable by the Borrowers in accordance with the terms of any of the Security Documents; | ||
(b) | the expenses referred to in Clause 10.2 (a) and (b); and |
4
(c) | interest on all such losses, liabilities, costs, charges, expenses, damages and outgoings from, in the case of Expenses referred to in sub-paragraph (b) above, the date on which such Expenses were demanded by the Bank from the Borrowers and in all other cases, the date on which the same were suffered, incurred or paid by the Bank until the date of receipt or recovery thereof (whether before or after judgement) at the Default Rate (as conclusively certified by the Bank); |
Final Maturity Date means the date falling seven (7) years after (i) the Drawdown Date or (ii) the end of the Availability Period, whichever occurs earlier; | |||
Flag State means the Commonwealth of Bahamas or Liberia or such other state or territory proposed in writing by the Borrowers to the Bank and approved (at its sole discretion) by the Bank, as being the Flag State of the Vessels for the purposes of the Security Documents; | |||
General Assignments means the assignment of the Earnings, Insurances and Requisition compensation collateral to the Mortgages executed or (as the context may require) to be executed by the Borrowers in favour of the Bank in form satisfactory to the Bank; | |||
Governmental Withholdings means withholdings and any restrictions or conditions resulting in any charge whatsoever imposed, either now or hereafter, by any sovereign state or by any political sub-division or taxing authority of any sovereign state; | |||
Group means the Borrowers, the Approved Manager, the Corporate Guarantor and any other shipping company substantially owned and/or controlled by the same beneficial owners as the Borrowers; | |||
Guarantees means together the Corporate Guarantee and any other guarantee granted or to be granted to the Bank and Guarantee means any of them; | |||
Guarantors means together the Corporate Guarantor and any other person who has granted or will grant a Guarantee to the Bank and Guarantor means either of them; | |||
Indebtedness means any obligation for the payment or repayment of money, whether as principal or as surety, whether present or future, actual or contingent; | |||
Insurances includes all policies and contracts of insurance (which expression includes all entries of the Vessels in a protection and indemnity or war risks association) which are from time to time taken out or entered into in respect of the Vessels and their Earnings or otherwise howsoever in connection with the Vessels; | |||
Interest Payment Date means in respect of the Loan or any part thereof in respect of which a separate Interest Period is fixed the last day of the relevant Interest Period and in case of any Interest Period longer than three (3) months the date(s) falling at successive three (3) monthly intervals during such longer Interest Period and the last day of such Interest Period; | |||
Interest Period means in relation to the Loan or any part thereof, each period for the calculation of interest in respect of the Loan or such part ascertained in accordance with Clauses 3.2 and 3.3; | |||
ISM Code means in relation to its application to the Borrowers, the Vessels and their operation: |
5
(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 4th November, 1993 and incorporated on 19th May, 1994 into chapter IX of the International Convention for the 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 25th November, 1995; |
as the same may be amended, supplemented or replaced from time to time; | ||
ISM Code Documentation includes: |
(a) | the DOC and SMC issued by a classification society in all respects acceptable to the Bank in its absolute discretion pursuant to the ISM Code in relation to the Vessels within the period specified by the ISM Code; | ||
(b) | all other documents and data which are relevant to the ISM SMS and its implementation and verification which the Bank may require by request; and | ||
(c) | any other documents which are prepared or which are otherwise relevant to establish and maintain the Vessels or the Borrowers compliance with the ISM Code which the Bank may require by request; |
ISM SMS means the safety management system which is required to be developed, implemented and maintained under the ISM Code; | ||
ISPS Code means the International Ship and Port facility Security Code constituted pursuant to resolution A.924(22) of the International Maritime Organization now set out in Chapter XI-2 of the International Convention for the Safety of Life at Sea 1974 (as amended) as adopted by a Diplomatic Conference of the International Maritime Organisation on Maritime Security in December 2002 and includes any amendments or extensions to it and any regulation issued pursuant to it; | ||
ISSC means an International Ship Security Certificate issued in respect of the Vessels pursuant to the ISPS Code; |
(a) | LIBOR means, in relation to a particular period and a particular amount, the offered rate (if any) per annum for deposits in Dollars for such amount and for such period which is the rate, for such period, appearing on the relevant page of the Reuters Screen LIBOR01 at or about 11 a.m. London time on the second Banking Day before the first day of such period (or, if the Bank shall have made a determination pursuant to Clause 3.6 such later time (not being later than 1 p.m. (London time) on the first day of such period) as the Bank may determine) or such other page as may replace the relevant Page of the Reuter screen on that service for the purpose of displaying rates comparable to that rate or on such other service as may be nominated by the British Bankers Association as the |
6
information vendor for the purpose of displaying the British Bankers Association Interest Settlement Rates for Dollars; and | |||
(b) | if on such date no such rate is so displayed, LIBOR for such period shall be the rate determined by the Bank to be the rate at which the Bank in accordance with its usual practices is able to obtain similar deposit(s) 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 11:00 a.m. (London time) on the second Banking Day before the first day of such period; |
Loan means the aggregate principal amount borrowed by the Borrowers in respect of the Commitment or (as the context may require) the principal amount thereof owing to the Bank under this Agreement at any relevant time; | ||
Lending Branch means the office of the Bank appearing at the beginning of this Agreement or any other office of the Bank designated by the Bank as the Lending Branch by notice to the Borrowers; | ||
Major Casualty Amount means any casualty to a Vessel in respect whereof the claim or the aggregate of the claims against all insurers, before adjustment for any relevant franchise or deductible, exceeds two hundred thousand Dollars ($200,000) or the equivalent in any other currency; | ||
Management Agreement means the agreement made between the relevant Borrower and the Approved Manager providing (inter alia) for the Approved Manager to manage the relevant Vessel; | ||
Managers Undertaking means a letter of undertaking and subordination to be executed by the Approved Manager, as manager, whereby the Approved Manager shall subordinate any and all claims it may have against the Borrowers and/or the Vessels to the claims of the Bank hereunder and the Security Documents; | ||
Margin means three percentage points (3%) per annum; | ||
Market Value means the market value of each Vessel as determined in accordance with Clause 8.6(b); | ||
Material of Environmental Concern means and includes pollutants, contaminants, toxic substances, oil as defined in the United States Oil Pollution Act of 1990 and all hazardous substances as defined in the United States Comprehensive Environmental Response, Compensation and Liability Act 1988; | ||
Month means a period beginning in one calendar month and ending in the next calendar month on the day numerically corresponding to the day of the calendar month on which it started provided that (i) if there is no such numerically corresponding day, it shall end on the last Banking Day in such next calendar month and (ii) if such numerically corresponding day is not a Banking Day, the period shall end on the next following Banking Day in the same calendar month but if there is no such Banking Day it shall end on the preceding Banking Day and months and monthly shall be construed accordingly; |
7
Mortgages means the first preferred ship mortgages on the Vessels, each to be executed by the relevant Borrower in favour of the Bank in form and substance satisfactory to the Bank; | ||
Mortgaged Vessel(s) means the Vessels and any vessel which is or remain mortgaged in favour of the Bank pursuant to this Agreement at any relevant time hereunder; | ||
Operator means any person who is from time to time during the Security Period concerned in the operation of the Vessels and falls within the definition of Company set out in rule 1.1.2. of the ISM Code; | ||
Outstanding Indebtedness means the aggregate of the Loan and interest accrued and accruing thereon, the Expenses and all other sums of money from time to time owing by the Borrowers to the Bank, whether actually or contingently under this Agreement and the other Security Documents; | ||
Owner means the respective Borrower as owner of its Vessel; | ||
Permitted Encumbrance means any Encumbrance in favour of the Bank created pursuant to the Security Documents and Permitted Liens; | ||
Permitted Lien means any lien on the Vessels for masters, officers or crews wages outstanding in the ordinary course of trading, any lien for salvage and any ship repairers or outfitters possessory lien for a sum not (except with the prior written consent of the Bank) exceeding the Major Casualty Amount (as defined in the Mortgage); | ||
Receiving Bank means Deutsche Bank Trust Co. Americas (ex. Bankers Trust Company, New York), SWIFT address BKTRUS33, or such other bank in New York as the Bank may notify to the Borrowers; | ||
Registry means the offices of such registrar, commissioner or representative of the Flag State who is duly authorised to register the Vessels, the Borrowers title to the Vessels and the Mortgages over the Vessels under the laws and flag of the Flag State; | ||
Related Company means any company member of the Group or other entity of which such company is a Subsidiary and any Subsidiary of any such company or entity; | ||
Relevant Jurisdiction means any jurisdiction in which or where any Security Party is incorporated, resident, domiciled, has a permanent establishment, carries on, or has a place of business or is otherwise effectively connected; | ||
Relevant Party means the Borrowers, the Borrowers Related Companies, any other Security Party and any Security Partys Related Companies; | ||
Relevant Ship means the Vessels and any other vessel from time to time (whether before or after the date of this Agreement) owned, managed or crewed by, or chartered to, any Relevant Party; | ||
Repayment Date means each of the dates specified in Clause 4.1 on which the Repayment Instalments shall be payable by the Borrowers to the Bank; | ||
Repayment Instalment means each instalment of the Loan which becomes due for repayment by the Borrowers to the Bank on a Repayment Date pursuant to Clause 4.1; |
8
Requisition Compensation means all sums of money or other compensation from time to time payable by reason of requisition of the Vessels otherwise than by requisition for hire; | ||
Retention Account means an interest bearing account of the Borrowers opened (or as the context may require) to be opened by the Borrowers with the Bank or such other branch of the Bank or any other bank as may be required by and at the discretion of the Bank and designated ADVENTURE NINE S.A. & ADVENTURE TWELVE S.A.- Retention Account and includes any other account designated by the Bank to be a Retention Account for the purposes of this Agreement; | ||
Security Documents means this Agreement, the documents listed in Clause 11.1 and any and every other document as may have been or shall from time to time after the date of this Agreement be executed to guarantee and/or to secure the whole or any part of the Outstanding Indebtedness and/or any and all other obligations of the Borrowers to the Bank pursuant to this Agreement (whether or not any such document also secures moneys from time to time owing pursuant to any other document or agreement); | ||
Security Party means the Borrowers, the Guarantor, the Approved Manager and any other person (other than the Bank) which is or may become a party to any of the Security Documents; | ||
Security Period means the period commencing on the date hereof and terminating on the date upon which the Loan together with all interest thereon and all other moneys payable to the Bank under this Agreement and the other Security Documents has been repaid in full to the Bank; | ||
Security Requirement means the amount in Dollars (as certified by the Bank whose certificate shall, in the absence of manifest error, be conclusively binding on the Borrowers) and which is: (i) one hundred percent (100%) of the Loan for the period commencing on the Drawdown Date and expiring on the 30 th June, 2010, (ii) one hundred and fifteen percent (115%) of the Loan for the period commencing on 1 st July, 2010 and expiring on the 30 th June, 2011 and (iii) one hundred and twenty five percent (125%) of the Loan for the period commencing on 1 st July, 2011 and expiring on the Final Maturity Date; | ||
Security Value means the amount in Dollars (as certified by the Bank whose certificate shall, in the absence of manifest error, be conclusive and binding on the Borrowers) which, at any relevant time is the aggregate of (a) the Market Value of the Mortgaged Vessel(s) as most recently determined in accordance with Clause 8.6(b) and (b) the market value of any additional security provided under Clause 8.6 (c) (if any); | ||
SMC means a safety management certificate issued in respect of the Vessels in accordance with rule 13 of the ISM Code; | ||
Subsidiary of a person means any company or entity directly or indirectly controlled by such person, and for this purpose control means either ownership of more than fifty percent (50%) of the voting share capital (or equivalent rights of ownership) of such company or entity or the power to direct its policies and management, whether by contract or otherwise; | ||
Taxes includes all present and future taxes, levies, imposts, duties, fees or charges of whatever nature together with interest thereon and penalties in respect thereof (except |
9
taxes concerning the Bank and imposed on the net income of the Bank) and Taxation shall be construed accordingly; | ||
Total Loss in relation to a Vessel, means (a) actual, constructive, compromised or arranged total loss of such Vessel; or (b) requisition for title or other compulsory acquisition of the Vessel otherwise than by requisition for hire; or (c) hijacking, theft, condemnation, capture, seizure, detention, arrest or confiscation of a Vessel by any government or by any person acting or purporting to act on behalf of any government, unless such Vessel is released and restored to the relevant Borrower within thirty (30) days after the occurrence thereof; | ||
Vessels means collectively: (a) the motor vessel FREE IMPALA, of 15,888 gt and 8,036 nt, registered under the flag of the Commonwealth of the Bahamas in the ownership of the First Borrower, with Off. Reg. No. 8000947 and IMO No. 9138680 and (b) the motor vessel FREE NEPTUNE, of 17997 gt and 10222 nt, registered under the flag of Liberia in the ownership of the Second Borrower, with Off. Reg. No. 12063 and IMO No. 9146819 and Vessel means each of them. |
1.3 | Interpretation | |
In this Agreement: |
(a) | clause headings and the table of contents are inserted for convenience of reference only and shall be ignored in the interpretation of this Agreement; | ||
(b) | subject to any specific provision of this Agreement or of any assignment and/or participation or syndication agreement of any nature whatsoever, reference to each of the parties hereto and to the other Security Documents shall be deemed to be reference to and/or to include, as appropriate, their respective successors and permitted assigns; | ||
(c) | reference to a person shall be construed as including reference to an individual, firm, company, corporation, unincorporated body of persons or any State or any agency thereof; | ||
(d) | where the context so admits, words in the singular include the plural and vice versa; | ||
(e) | the words including and in particular shall not be construed as limiting the generality of any foregoing words; | ||
(f) | references to (or to any specified provisions of) this Agreement and all documents referred to in this Agreement shall be construed as references to this Agreement, that provision or that document as are in force for the time being and as are amended and/or supplemented from time to time; | ||
(g) | reference to this Agreement includes all the terms of this Agreement and any Schedules, Annexes or Appendices to this Agreement, which form an integral part of same; | ||
(h) | reference to Clauses, sub-Clauses and Schedules are to Clauses, sub-Clauses and Schedules in this Agreement; | ||
(i) | reference to the opinion of the Bank or a determination or acceptance by the Bank or to documents, acts, or persons acceptable or satisfactory to the Bank or the like |
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shall be construed as reference to opinion, determination, acceptance or satisfaction of the Bank at the sole discretion of the Bank and such opinion, determination, acceptance or satisfaction of the Bank shall be conclusive and binding on the Borrowers; |
(j) | 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 agency, authority, central bank or government department or any self regulatory or other national or supra-national authority; | ||
(k) | references to any person include such persons assignees and successors in title; | ||
(l) | references to a guarantee include references to an indemnity or other assurance against financial loss 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; and | ||
(m) | references to any enactment shall be deemed to include references to such enactment as re-enacted, amended or extended. |
2. | THE LOAN | |
2.1 | Commitment to Lend | |
The Bank, relying upon (inter alia) each of the representations and warranties set forth in Clause 6 and in each of the other Security Documents, agrees to lend to the Borrowers, on a joint and several basis, in one (1) advance and upon and subject to the terms of this Agreement, the amount specified in Clause 1.1 hereof. | ||
2.2 | Drawdown Notice and Commitment to Borrow | |
Subject to the terms and conditions of this Agreement, the Commitment shall be advanced to the Borrowers following receipt by the Bank from the Borrowers of a Drawdown Notice not later than 10 a.m. (London time) on the second Banking Day before the date on which the drawdown is intended to be made. A Drawdown Notice shall be effective on actual receipt thereof by the Bank and, once given, shall, subject as provided in Clause 3.6, be irrevocable. | ||
2.3 | Number of Advances Agreed | |
The Commitment shall be advanced to the Borrowers in one advance. | ||
2.4 | Disbursement | |
Upon receipt of the Drawdown Notice complying with the terms of this Agreement the Bank shall, subject to the provisions of Clause 7, on the date specified in the Drawdown Notice, make the Commitment available to the Borrowers. | ||
2.5 | Application of Proceeds | |
Without prejudice to the Borrowers obligations under Clause 8.9, the Bank shall have no responsibility for the application of the proceeds of the Loan (or any part thereof) by the Borrowers. | ||
2.6 | Termination Date of the Commitment |
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Any part of the Commitment undrawn and uncancelled at the end of the Availability Period shall thereupon be automatically cancelled. |
2.7 | Evidence | |
It is hereby expressly agreed and admitted by the Borrowers that abstracts or photocopies of the books of the Bank as well as statements of accounts or a certificate signed by an authorised officer of the Bank shall be conclusive binding and full evidence, save for manifest error, on the Borrowers as to the existence and/or the amount of the at any time Outstanding Indebtedness, of any amount due under this Agreement, of the applicable interest rate or Default Rate or any other rate provided for or referred to in this Agreement, the Interest Period, the value of additional securities under Clause 8.6(c), the payment or non payment of any amount and/or the occurrence of any other Event of Default. Nevertheless, enforcement procedures or any other court or out-of-court procedure can be commenced by the Bank on the basis of the above mentioned means of evidence including written statements or certificates of the Bank. | ||
2.8 | Cancellation | |
The Borrowers may cancel any undrawn part of the Commitment under this Agreement upon giving the Bank not less than five (5) Banking Days notice in writing to that effect, provided that no Drawdown Notice has been given to the Bank under Clause 2.2 for the full amount of the Commitment or in respect of the portion thereof in respect of which cancellation is required by the Borrowers. Any such notice of cancellation, once given, shall be irrevocable. Any amount cancelled may not be drawn. Notwithstanding any such cancellation pursuant to this Clause 2.8 the Borrowers shall continue to be liable for any and all amounts due to the Bank under this Agreement including without limitation any amounts due to the Bank under Clause 10. | ||
2.9 | No security or lien from other person | |
The Borrowers have not taken or received, and the Borrowers undertake that until all moneys, obligations and liabilities due, owing or incurred by the Borrowers under this Agreement and the Security Documents have been paid in full, they will not take or receive, any security or lien from any other person liable or for any liability whatsoever. | ||
2.10 | Joint and Several Liability of the Borrowers |
(a) | The liability of each of the Borrowers hereunder shall in all cases, whether so expressed to be or not, be joint and several and each representation and warranty and each covenant and agreement made or given by the Borrowers is made or given by them all jointly and severally. | ||
(b) | The Bank may at its discretion accept orders, instructions, notices or advices from any of the Borrowers hereunder (which Borrower will be deemed to act on behalf of all the Borrowers and express authority is given to it by this Clause to act on this way) and shall ignore any subsequent conflicting instructions, notices or advices from any of the other Borrowers (unless they may be deemed at the discretion of the Bank as proper revocation or amendments of earlier instructions) and may reach any agreement in connection with this Agreement or any of the other Security Documents with any of the Borrowers which shall be binding on all the Borrowers. | ||
(c) | None of the Borrowers shall be exonerated and its liability hereunder shall not be lessened or impaired by any time, indulgence or relief being given by the Bank to any other Borrower or any other person or by any person to the Borrowers, by any amendment of or supplement to this Agreement or any of the other Security |
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Documents or any other document, by the taking, variation, compromise, renewal or release of or refusal or neglect to perfect or enforce any right, remedies or securities against any of the Borrowers or any other person or by anything done or omitted which but for this provision might operate to exonerate such Borrower (or might be interpreted as such). |
(d) | The obligations of each of the Borrowers hereunder shall not be affected by any legal limitation, disability, incapacity or other circumstances relating to any other Borrower or any other person, whether or not known to the Bank, by any invalidity in or irregularity or unenforceability of the obligations of any other Borrower or any other person under this Agreement or any of the other Security Documents or otherwise or by any change in the constitution of, or any amalgamation or reconstruction of any other Borrower, the Bank or any other person. | ||
(e) | The Borrowers hereby waive all rights any Borrower may have of first requiring the Bank to proceed against or enforce any right or security of, or claim payment from any other Borrower or any other person. |
2.11 | Non competition of the Borrowers with the Bank |
(a) | Until all moneys, obligations and liabilities due, owing or incurred by the Borrowers to the Bank under this Agreement and the other Security Documents have been paid or discharged in full, each Borrower agrees not to exercise or enforce any rights of subrogation or indemnity or any other right which otherwise it has against any other Borrower and agrees not to claim any set-off or counterclaim against any other Borrower or to claim or prove in competition with the Bank in the event of bankruptcy, insolvency or liquidation of any other Borrower or have any benefit of or any share in any guarantee or security now or hereafter held by the Bank. | ||
(b) | None of the Borrowers has taken or received, and each Borrower undertakes that until all moneys, obligations and liabilities due, owing or incurred by the Borrowers under this Agreement and the Security Documents have been paid in full, it will not take or receive, any security or lien from any other Borrower in respect of borrowing as co-borrower jointly and severally liable or for any liability whatsoever. |
2.12 | Interest to co-borrow | |
The Borrowers have an interest in borrowing jointly and severally in that they are companies which have close financial co-operation and mutual assistance and in that the Commitment would not have been available to each one of the Borrowers separately. | ||
3. | INTEREST | |
3.1 | Normal Interest Rate | |
The Borrowers shall pay interest on the Loan (or as the case may be, each portion thereof to which a different Interest Period relates) in respect of each Interest Period related thereto on each Interest Payment Date and in case of any Interest Period longer than three (3) months interest shall be payable quarterly in arrears and on the last day of such Interest Period. The interest rate for the calculation of interest shall be the rate per annum determined by the Bank to be the aggregate of (i) the Margin and (ii) LIBOR. | ||
3.2 | Selection of Interest Period | |
The Borrowers may by notice received by the Bank not later than 10 a.m. (London time) on the second Banking Day before the beginning of each Interest Period specify (subject |
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to Clause 3.3 below) whether such Interest Period shall have a duration of one (1) or three (3) or six (6) months (or such other period as may be requested by the Borrowers and as the Bank, in its sole discretion, may agree to). | ||
3.3 | Duration of Interest Period | |
Every Interest Period shall, subject to market availability to be conclusively determined by the Bank, be of the duration specified by the Borrowers pursuant to Clause 3.2 but so that: |
(a) | the initial Interest Period in respect of the Loan will commence on the Drawdown Date and each subsequent Interest Period will commence forthwith upon the expiry of the previous Interest Period; | ||
(b) | if any Interest Period would otherwise overrun one or more Repayment Dates, then, in the case of the last Repayment Date, such Interest Period shall end on such Repayment Date, and in the case of any other Repayment Date or Dates the Loan shall be divided into parts so that there is one part equal to the amount of the Repayment Instalment due on each Repayment Date falling during that Interest Period and having an Interest Period ending on the relevant Repayment Date and another part equal to the amount of the balance of the Loan having an Interest Period determined in accordance with Clause 3.2 and the other provisions of this Clause 3.3 and the expression Interest Period in respect of the Loan when used in this Agreement refers to the Interest Period in respect of the balance of the Loan; | ||
(c) | 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 unless another period shall be agreed between the Bank and the Borrowers provided always that such period shall comply with this Clause 3.3; and | ||
(d) | if the Bank determines that funds for the duration of an Interest Period specified by the Borrowers in accordance with Clause 3.2 are not readily available, then that Interest Period shall have such duration as the Bank, in consultation with the Borrowers, may determine. | ||
provided always that : |
(i) | any Interest Period which commences on the last day of a calendar month, and any Interest Period which commences on the day on which there is no numerically corresponding day in the calendar month during which such Interest Period is due to end, shall end on the last Banking Day of the calendar month during which such Interest Period is due to end; and | ||
(ii) | if the last day of an Interest Period is not a Banking Day the Interest Period shall be extended until the next following Banking Day unless such next following Banking Day falls in the next calendar month in which case such Interest Period shall be shortened to expire on the preceding Banking Day |
3.4 | Default Interest |
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If the Borrowers fail to pay any sum (including, without limitation, any sum payable pursuant to this Clause 3.4) on its due date for payment under any of the Security Documents, the Borrowers shall pay interest on such sum from the due date up to the date of actual payment (as well after as before judgement) at the rate determined by the Bank pursuant to this Clause 3.4. The period beginning on such due date and ending on such date of payment shall be divided into successive periods of not more than one (1) month (or as selected by the Bank each of which (other than the first, which shall commence on such due date) shall commence on the last day of the preceding such period. The rate of interest applicable to each such period shall be the aggregate (as determined by the Bank) of (i) two per cent (2%), per annum, (ii) the Margin and (iii) LIBOR. Such interest shall be due and payable on the last day of each such period as determined by the Bank and each such day shall, for the purposes of this Agreement, be treated as an Interest Payment Date. In case that a payment is made in default for any amount, the Interest Periods will be determined by the Bank at its discretion including the amounts for which there is no default, even if the Bank has not (yet) exercised its rights pursuant to Clause 9.9(b) of the Agreement. If for the reasons specified in Clause 3.6, the Bank is unable to determine a rate in accordance with the foregoing provisions of this Clause 3.4, interest on any sum not paid on its due date for payment shall be calculated at a rate determined by the Bank to be two per cent (2%) per annum above the aggregate of the Margin and costs of funds to the Bank as conclusively determined by the Bank save for manifest error. Interest payable by the Borrowers as aforesaid shall be compounded semi-annually and shall be payable on demand. | ||
3.5 | Notification of Interest and Interest Rate | |
The Bank shall notify the Borrowers promptly of the duration of each Interest Period and of each rate of interest determined by it under this Clause 3 without prejudice to the right of the Bank to make determinations at its sole discretion. However, omission of the Bank to make such notification (without the application of the Borrowers) will not constitute and will not be interpreted as if to constitute a breach of obligation of the Bank except in case of willful misconduct. | ||
3.6 | Market disruption Non Availability |
(a) | If and whenever, at any time prior to the commencement of any Interest Period, the Bank (in its reasonable discretion) shall have determined (which determination shall be conclusive) that a Market Disruption Event has occurred in relation to the Loan for any such Interest Period, then the Bank shall forthwith give notice (a Determination Notice ) thereof 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: | ||
(i) | the Margin; and |
(ii) | the rate which expresses as a percentage rate per annum the cost to the Bank of funding the Loan (or the relevant part thereof) from whatever source it may reasonably select. |
(b) | In this Agreement Market Disruption Event means: |
(i) | at or about noon on the Quotation Day for the relevant Interest Period the LIBOR is not available; and/or |
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(ii) | before close of business in London on the Quotation Day for the relevant Interest Period, the Bank determines (in its sole discretion) that the cost to it of obtaining matching deposits in the London Interbank Market to fund the Loan (or the relevant part thereof) for such Interest Period would be in excess of LIBOR; and | ||
(iii) | before close of business in London on the Quotation Day for the relevant Interest Period, deposits in Dollars are not available to the Bank in the London Interbank Market in the ordinary course of business in sufficient amounts to fund the Loan (or the relevant part thereof) for such Interest Period. | ||
And for the purposes of this Clause, Quotation Day means, in respect of any period in respect of which LIBOR falls to be determined under this Agreement, the second Banking Day before the first day of such period. |
(c) | Alternative basis of interest or funding |
(i) | If a Market Disruption Event occurs and the Bank or the Borrowers so require, the Bank and the Borrowers shall enter into negotiations (for a period of not more than five (5) 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. | ||
(ii) | Any alternative basis agreed pursuant to paragraph (i) above shall be binding on the Bank and all Security Parties. |
(d) | Alternative basis of interest in absence of agreement |
If the Bank and the Borrowers will not enter into negotiations as provided in clause 3.6(c)(i) 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 Bank shall set the following Interest Period and an interest rate representing the cost of funding of the Bank 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 Bank, the Bank 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. |
(e) | Notice of prepayment |
If the Borrowers do not agree with an interest rate set by the Bank under Clause 3.6(d), the Borrowers may give the Bank not less than 15 Banking Days notice of its intention to prepay the Loan at the end of the interest period set by the Bank. |
(f) | Prepayment; termination of the Term Commitment |
A notice under Clause 3.6(e) shall be irrevocable; and on the last Banking Day of the interest period set by the Bank, 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 the Outstanding Indebtedness. |
(g) | Application of prepayment |
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The provisions of Clause 4 shall apply in relation to the prepayment made hereunder. |
4. | REPAYMENT PREPAYMENT | |
4.1 | Repayment | |
The Borrowers shall, jointly and severally, and it is expressly undertaken by the Borrower to repay the Loan jointly and severally by (a) twenty eight (28) consecutive quarterly repayment instalments (the Repayment Instalments ), each to be repaid on each of the Repayment Dates so that the first be repaid three (3) months from the Drawdown Date and each of the subsequent ones consecutively falling due for payment on each of the dates falling three (3) months after the immediately preceding Repayment Date with the last of such Repayment Instalments falling due for payment on the Final Maturity Date and (b) the Balloon Instalment falling due for payment together with the last (28 th ) Repayment Instalment on the Final Maturity Date; subject to the provisions of this Agreement, each Repayment Instalment shall be in amounts as follows: |
(i) | 1 st to 4 th (both inclusive) of such Repayment Instalments shall be in the amount of Dollars five hundred thousand ($500,000) each; and | ||
(ii) | 5 th to 28 th (both inclusive) of such Repayment Instalments shall be in the amount of Dollars eight hundred and thirty seven thousand five hundred ($837,500) each; |
Provided that (a) if the last Repayment Date would otherwise fall after the Final Maturity Date, the last Repayment Date shall be the Final Maturity Date, (b) in the event that the Commitment is not drawn down in full, the amount of each of the Repayment Instalments and the Balloon Instalment shall be proportionally reduced, (c) there shall be no Repayment Dates after the Final Maturity Date and (d) on the Final Maturity Date the Borrowers shall also pay to the Bank any and all other moneys then due and payable under this Agreement and the other Security Documents. | ||
and Provided further that if any of the Repayment Instalments shall become due on a day which is not a Banking Day, the due date therefor shall be extended to the next succeeding Banking Day unless such Banking Day falls in the next calendar month in which event such due date shall be the immediately preceding Banking Day. | ||
4.2 | Voluntary Prepayment | |
The Borrowers shall have the right, upon giving the Bank not less than five (5) Banking Days notice in writing, to prepay part or all of the Loan in each case together with all unpaid interest accrued thereon and all other sums of money whatsoever due and owing from the Borrowers to the Bank hereunder or pursuant to the other Security Documents and all interest accrued thereon, provided that: |
(a) | the giving of such notice by the Borrowers will irrevocably commit the Borrowers to prepay such amount as stated in such notice; | ||
(b) | such prepayment may take place only on the last day of an Interest Period in respect of the Loan provided however, that if the Borrowers shall request consent to make such prepayment on another day and the Bank shall accede to such request (it being in the sole discretion of the Bank to decide whether or not to do so) the Borrowers will pay in addition to the amount to be prepaid, any such sum as may be payable to the Bank pursuant to Clause 10.1; |
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(c) | each such prepayment shall be in an amount of no less than the amount of the Repayment Instalment due and payable at that time or a whole multiple thereof or the balance of the Loan and will be applied by the Bank in or towards the pro-rata prepayment of the Balloon Installment and the Repayment Instalments; | ||
(d) | every notice of prepayment shall be effective only on actual receipt (including by fax) by the Bank, shall be irrevocable and shall oblige the Borrowers to make such prepayment on the date specified; | ||
(e) | no amount prepaid may be re-borrowed; and | ||
(f) | the Borrowers may not prepay the Loan or any part thereof save as expressly provided in this Agreement. |
4.3 | Compulsory Prepayment in case of Total Loss or sale of a Vessel |
(a) | Total Loss of a Mortgaged Vessel |
On any Mortgaged Vessel being subsequently determined to be a Total Loss: |
(i) | prior to the advancing of the Commitment, the obligation of the Bank to make available the Commitment shall immediately cease; or | ||
(ii) | in case the Commitment or, as the case may be, an Advance, has been already advanced, the amount of the Loan shall, on expiry of a period of one hundred and eighty (180) days following the occurrence of such Total Loss or the date on which the relevant Vessel suffered damage or the incident which, in the reasonable opinion of the Bank, may result in such Vessel being subsequently determined to be a Total Loss occurred or, if earlier, on the date upon which the insurance proceeds in respect of such Total Loss are, or Requisition Compensation in respect of such Mortgaged Vessel, is received by the Owner thereof (or the Bank pursuant to the Security Documents), be reduced by an amount equal to higher of (a) the full amount of the insurance proceeds and (b) the Relevant Percentage (as hereinafter defined) together with accrued interest on the Loan to the date of prepayment and all other sums due and payable by the Borrower to the Bank pursuant to this Agreement and the other Security Documents, including without limitation, any amounts payable under Clause 4.4, as the Bank may in its absolute discretion determine, which should be prepaid by the Borrowers in order to protect the Banks security position and (without limitation) satisfy the provision of Clause 8.6 (c).. |
For the purpose of this Agreement: |
(aa) | an actual total loss of a Vessel shall be deemed to have occurred at the actual date and time such Vessel was lost but in the event of the date of the loss being unknown then the actual total loss shall be deemed to have occurred on the date on which the Vessel was last reported; | ||
(bb) | a constructive total loss shall be deemed to have occurred at the earlier of (a) date and time notice of abandonment of a Vessel has been given to the insurers of such Vessel and (b) date and time claim for insurance indemnity has been submitted to the insurers of a Vessel and in any case no later than sixty (60) days from the date of occurrence of the total loss and regardless of whether notice of abandonment of the Vessel has been given to the |
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insurers of such Vessel or claim for insurance indemnity has been submitted to the insurers of such Vessel; | |||
(cc) | a compromised or arranged total loss shall be deemed to have occurred on the date on which a binding agreement as to such compromised or arranged total loss has been entered into by the insurers of a Vessel and the Owner and in any case no later than sixty (60) days from the date of occurrence of the total loss and regardless of whether claim for insurance indemnity has been submitted to the insurers of the Vessel or a binding agreement as to such total loss has been entered into by the insurers of such Vessel and the Owner; | ||
(dd) | requisition for title or other compulsory acquisition of the Vessel shall be deemed to have occurred on the date upon which the relevant requisition for title or other compulsory acquisition occurs; and | ||
(ee) | hijacking, theft, condemnation, capture, seizure, detention, arrest, or confiscation of the Vessel by any government or by any person acting or purporting to act on behalf of any government, which deprives the Borrower of the use of the Vessel for more than thirty (30) days shall be deemed to occur upon the expiry of the period of thirty (30) days after the date upon which the relevant hijacking, theft, condemnation, capture, seizure, detention, arrest or confiscation occurred. |
(b) | Sale of a Mortgaged Vessel | ||
In the event of a sale or other disposal of any Mortgaged Vessel or if the Borrowers request the Banks consent for the discharge of the Mortgage on any Mortgaged Vessel, the Borrowers shall prepay an amount equal to higher of (a) the full amount of the sale proceeds and (b) the Relevant Percentage (as hereinafter defined) together with accrued interest on the Loan to the date of prepayment and all other sums due and payable by the Borrower to the Bank pursuant to this Agreement and the Borrowers shall thereupon be obliged to make such repayment of the Loan, Provided always that such sale or such other disposal is made at the Market Value of the relevant Vessel prevailing at the time and that all sale proceeds are paid to the Bank for application as described herein; | |||
and for the purpose of this Clause 4.3, | |||
Relevant Percentage in relation to any Mortgaged Vessel, means an amount equal to the proportion which the Market Value of such Mortgaged Vessel bears to the aggregate of the Market Values of the Mortgaged Vessels based on the valuations of such Vessels carried out under Clause 8.6(b) immediately before the Total Loss or the date on which the relevant Mortgaged Vessel suffered damage or the incident which, in the reasonable opinion of the Bank, may result in such Mortgaged Vessel being subsequently determined to be a Total Loss occurred or the sale or other disposal of the relevant Vessel, as the case may be, | |||
Provided however that if the relevant Mortgaged Vessel so lost or sold or otherwise disposed of is the last Mortgaged Vessel, then the full amount of the insurance or, as the case may be, the sale proceeds shall apply against full repayment of the Outstanding Indebtedness and additionally the Borrowers shall pay to the Bank the balance (if any) of the Outstanding Indebtedness; |
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In case of refinancing by another bank, then the full amount of the Outstanding Indebtedness will be repaid to the Bank. | |||
(c) | Application by the Bank in case of compulsory prepayment | ||
Any amount prepaid in accordance with Clause 4.3 (a) and (b) which is less than the whole of the Outstanding Indebtedness will be applied by the Bank in or towards pro rata satisfaction of the Balloon Instalment and the then outstanding Repayment Instalments. |
4.4 | Amounts payable on prepayment | |
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 (calculated, in the case of a prepayment pursuant to Clause 3.6 (b) at a rate equal to the aggregate of the Margin and the cost to the Bank of funding the Loan), (b) any additional amount payable under Clause 5 and (c) all other sums payable by the Borrowers to the Bank under this Agreement or any of the other Security Documents including, without limitation, any amounts payable under Clause 10. | ||
5. | PAYMENTS, TAXES, LOAN ACCOUNT AND COMPUTATION | |
5.1 | Payments No set-off or Counterclaims |
(a) | The Borrowers acknowledge that, in performing their obligations under this Agreement, the Bank will be incurring liabilities to third parties in relation to the funding of amounts to the Borrowers, such liabilities matching the liabilities of the Borrowers to the Bank and that it is reasonable for the Bank to be entitled to receive payments from the Borrowers gross on the due date in order that the Bank is put in a position to perform its matching obligations to the relevant third parties. Accordingly, all payments to be made by the Borrowers under this Agreement and/or any of the other Security Documents shall be made in full, without any set-off or counterclaim whatsoever and, subject as provided in Clause 5.3, free and clear of any deductions or withholdings or Governmental Withholdings whatsoever, as follows: |
(i) | in Dollars, not later than 10.00 a.m. (London time) on the Banking Day (in Athens, London and New York City) on which the relevant payment is due under the terms of this Agreement; and | ||
(ii) | to the Receiving Bank for the account of the Bank, reference: ADVENTURE NINE S.A. & ADVENTURE TWELVE S.A. LOAN AGREEMENT DATED .... DECEMBER 2009, Provided however, that the Bank shall have the right to change the place of account for payment, upon eight (8) Banking Days prior written notice to the Borrowers. |
(b) | If at any time it shall become unlawful or impracticable for the Borrowers to make payment under this Agreement to the relevant account or bank referred to in Clause 5.1(a), the Borrowers may request and the Bank may agree to alternative arrangements for the payment of the amounts due by the Borrowers to the Bank under this Agreement or the other Security Documents. |
5.2 | Payments on Banking Days |
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All payments due shall be made on a Banking Day. If the due date for payment falls on a day which is not a Banking Day, the payment or payments due shall be made on the next following Banking Day unless such Banking Day falls in the next calendar month in which case payment shall be made on the immediately preceding Banking Day. | ||
5.3 | Gross Up | |
If at any time any law, regulation, regulatory requirement or requirement of any governmental authority, monetary agency, central bank or the like compels the Borrowers to make payment subject to Governmental Withholdings, or any other deduction or withholding, the Borrowers shall pay to the Bank such additional amounts as may be necessary to ensure that there will be received by the Bank a net amount equal to the full amount which would have been received had payment not been made subject to such Governmental Withholdings or other deduction or withholding. The Borrowers shall indemnify the Bank against any losses or costs incurred by the Bank by reason of any failure of the Borrowers to make any such deduction or withholding or by reason of any increased payment not being made on the due date for such payment. The Borrowers shall, not later than thirty (30) days after each deduction, withholding or payment of any Governmental Withholdings, forward to the Bank official receipts and any other documentary receipts and any other documentary evidence reasonably required by the Bank in respect of the payment made or to be made of any deduction or withholding or Governmental Withholding. The obligations of the Borrowers under this provision shall, subject to applicable law, remain in force notwithstanding the repayment of the Loan and the payment of all interest due thereon pursuant to the provisions of this Agreement. | ||
5.4 | Certificates Conclusive | |
Any certificate or determination of the Bank as to any rate of interest, rate of exchange or any other amount pursuant to and for the purposes of any of the Security Documents shall, in the absence of manifest error, be conclusive and binding on the Borrowers. | ||
5.5 | Computation | |
All interest and other payments payable by reference to a rate per annum under this Agreement shall accrue from day to day and be calculated on the basis of actual days elapsed and a 360 day year. | ||
6. | REPRESENTATIONS AND WARRANTIES | |
6.1 | The Borrowers, jointly and severally, hereby represent and warrant to the Bank that: | |
Continuing representations and warranties |
(a) | Due Incorporation/Valid Existence | ||
each Borrower and each of the other corporate Security Parties is duly incorporated and validly existing and in good standing under the laws of their respective countries of incorporation as limited liability companies, and have power to own their respective property and assets, to carry on their respective business as the same are now being lawfully conducted and to (directly or indirectly) purchase, own, finance and operate vessels, or, as the case may be, manage vessels, as well as to undertake the obligations which they have undertaken or shall undertake pursuant to the Security Documents; |
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(b) | Due Corporate Authority | ||
each Borrower and each of the other Security Parties has power to execute, deliver and perform its obligations under the Security Documents to which it is a party and to borrow the Commitment and each of the other Security Parties has power to execute and deliver and perform its obligations under the Security Documents to which it is or is to be a party; all necessary corporate, shareholder (if required) and other action has been taken to authorise the execution, delivery and performance of the same and no limitation on the powers of the Borrowers to borrow will be exceeded as a result of borrowing the Loan; | |||
(c) | Litigation | ||
no litigation, arbitration, tax claim or administrative proceeding involving a potential liability of any of the Borrowers or any other Security Party is current or pending or (to its or its officers knowledge) threatened against any of the Borrowers or any other Security Party, which, if adversely determined, would have a materially adverse effect on the business assets or the financial condition of any of them; | |||
(d) | No conflict with other obligations | ||
the execution and delivery of, the performance of its obligations under, and compliance with the provisions of, the Security Documents by the relevant Security Parties will not (i) contravene any existing applicable law, statute, rule or regulation or any judgment, decree or permit to which any of the Borrowers or any other Security Party is subject, (ii) conflict with, or result in any breach of any of the terms of, or constitute a default under, any agreement or other instrument to which any of the Borrowers or any other Security Party is a party or is subject to or by which it or any of its property is bound, (iii) contravene or conflict with any provision of the memorandum and articles of association/articles of incorporation/by-laws/statutes or other constitutional documents of any of the Borrowers or any other Security Party or (iv) result in the creation or imposition of or oblige any of the Borrowers or any other Security Party to create any Encumbrance (other than a Permitted Encumbrance) on any of the undertakings, assets, rights or revenues of any of the Borrowers or any other Security Party; | |||
(e) | Financial Condition | ||
the financial condition any of the Borrowers or of any of the other Security Parties has not suffered any material deterioration since that condition was last disclosed to the Bank; | |||
(f) | No Immunity | ||
None of the Borrowers nor any other Security Party nor any of their respective assets are entitled to immunity on the grounds of sovereignty or otherwise from any legal action or proceeding (which shall include, without limitation, suit, attachment prior to judgement, execution or other enforcement); | |||
(g) | Shipping Company |
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each of the Borrowers and the Approved Manager is a shipping company involved in the owning or, as the case may be, managing of ships engaged in international voyages and earning profits in free foreign currency; | |||
(h) | Licences/Authorisation | ||
every consent, authorisation, license or approval of, or registration with or declaration to, governmental or public bodies or authorities or courts required by any Security Party to authorise, or required by any Security Party in connection with, the execution, delivery, validity, enforceability or admissibility in evidence of each of the Security Documents or the performance by each Security Party of its obligations under the Security Documents has been obtained or made and is in full force and effect and there has been no default in the observance of any of the conditions or restrictions (if any) imposed in, or in connection with, any of the same so far as the Borrowers are aware; | |||
(i) | Perfected Securities | ||
when duly executed, the Security Documents will create a perfected security interest in favour of the Bank, with the intended priority, over the assets and revenues intended to be covered, valid and enforceable against the Borrowers and the other Security Parties; | |||
(j) | No Notarisation/Filing/Recording | ||
save for the registration of any mortgage in the Registry, it is not necessary to ensure the legality, validity, enforceability or admissibility in evidence of this Agreement or any of the other Security Documents that it or they or any other instrument be notarised, filed, recorded, registered or enrolled in any court, public office or elsewhere or that any stamp, registration or similar tax or charge be paid on or in relation to this Agreement or the other Security Documents; | |||
(k) | Validity and Binding Effect | ||
the Security Documents constitute (or upon their execution and in the case of any mortgage upon its registration at the Registry will constitute) valid and legally binding obligations of the relevant Security Parties enforceable against the Borrowers and the other Security Parties in accordance with their respective terms and that there are no other agreements or arrangements which may adversely affect or conflict with the Security Documents or the security thereby created; and | |||
(l) | Valid Choice of Law | ||
the choice of law agreed to govern this Agreement and/or any other Security Document and the submission to the jurisdiction of the courts agreed in each of the Security Documents are or will be, on execution of the respective Security Documents, valid and binding on the Borrowers and any other Security Party which is or is to be a party thereto. |
6.2 | Each Borrower hereby further represents and warrants to the Bank that: | |
Initial representations and warranties |
(a) | Direct obligations Pari Passu |
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the obligations of the Borrowers under this Agreement are direct, general and unconditional obligations of the Borrowers and rank at least pari passu with all other present and future unsecured and unsubordinated Indebtedness of the Borrowers with the exception of any obligations which are mandatorily preferred by law; | |||
(b) | Information | ||
all information, accounts, statements of financial position, exhibits and reports furnished by or on behalf of any Security Party and the Group to the Bank in connection with the negotiation and preparation of this Agreement and each of the other Security Documents are true and accurate in all material respects and not misleading, do not omit material facts and all reasonable enquiries have been made to verify the facts and statements contained therein; to the knowledge of the Directors/Officers of the Borrowers, there are no other facts the omission of which would make any fact or statement therein misleading and, in the case of accounts and statements of financial position, they have been prepared in accordance with generally accepted accounting principles which have been consistently applied; | |||
(c) | No Default | ||
no Default has occurred and is continuing; | |||
(d) | No Taxes | ||
no Taxes are imposed by deduction, withholding or otherwise on any payment to be made by the Borrowers under this Agreement and/or any other of the Security Documents or are imposed on or by virtue of the execution or delivery of this Agreement and/or any other of the Security Documents or any document or instrument to be executed or delivered hereunder or thereunder. In case that any Tax exists now or will be imposed in the future, it will be borne by the Borrowers; | |||
(e) | No Default under other Indebtedness | ||
None of the Borrower is in Default under any agreement relating to Indebtedness to which it is a party or by which it may be bound; | |||
(f) | Ownership/Flag/Seaworthiness/Class/Insurance of the Vessels | ||
each Vessel on the Drawdown Date will be: |
(i) | in the absolute and free from Encumbrances (other than in favour of the Bank) ownership of the respective Borrower who will on and after the Drawdown Date be the sole legal and beneficial owner of the relevant Vessel; | ||
(ii) | registered in the name of the respective Borrower through the Registry under the laws and flag of the Flag State; | ||
(iii) | operationally seaworthy and in every way fit for service; | ||
(iv) | classed with a classification society which is a member of IACS and which has been approved by the Bank in writing and such class will be |
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free of all requirements and recommendations of such classification society affecting class; | |||
(v) | insured in accordance with the provisions of this Agreement; | ||
(vi) | managed by the Approved Manager; and | ||
(vii) | in full compliance with the ISM Code and the ISPS Code; |
(g) | No Charter | ||
Save for any Charterparty, the Vessels will not on or before the Drawdown Date be subject to any charter or contract nor to any agreement to enter into any charter or contract which, if entered into after the Drawdown Date would have required the consent of the Bank under any of the Security Documents and there will not on or before the Drawdown Date be any agreement or arrangement whereby the Earnings of the Vessels may be shared with any other person; | |||
(h) | No Encumbrances | ||
None of the Vessels, nor their Earnings, Requisition Compensation or Insurances nor any other properties or rights which are, or are to be, the subject of any of the Security Documents nor any part thereof will, on the Drawdown Date, be subject to any Encumbrances other than Permitted Encumbrances; | |||
(i) | Compliance with Environmental Laws and Approvals | ||
except as may already have been disclosed by the Borrowers in writing to, and acknowledged in writing by, the Bank: |
(i) | the Borrowers and their Related Companies have complied with the provisions of all Environmental Laws; | ||
(ii) | the Borrowers and their Related Companies have obtained all Environmental Approvals and are in compliance with all such Environmental Approvals; and | ||
(iii) | none of the Borrowers nor any of their Related Companies have received notice of any Environmental Claim that any of the Borrowers or any of its Related Companies are not in compliance with any Environmental Law or any Environmental Approval; |
(j) | No Environmental Claims |
(i) | except as may already have been disclosed by the Borrowers in writing to, and acknowledged in writing by, the Bank: |
(aa) | there is no Environmental Claim pending or, to the best of the Borrowers knowledge and belief, threatened against any of the Borrowers or the Vessels or the Borrowers Related Companies or any other Relevant Ship; and | ||
(bb) | there has been no emission, spill, release or discharge of a Material of Environmental Concern from any of the Vessels or any other Related Ship or any vessel owned by, managed or |
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crewed by or chartered to any of the Borrowers which could give rise to an Environmental Claim; |
(k) | Copies true and complete | ||
the copies of the Management Agreement delivered or to be delivered to the Bank pursuant to clause 7.4 are, or will when delivered be, true and complete copies of such documents; such documents will when delivered constitute valid and binding obligations of the parties thereto enforceable in accordance with their respective terms and there will have been no amendments or variations thereof or defaults thereunder; | |||
(l) | Application made for DOC and SMC | ||
the Operator has applied for a DOC for itself and an SMC in respect of the Vessels and that none of the Borrowers nor any Operator is aware of any reason why such application may be refused; | |||
(m) | Compliance with ISPS code | ||
the Vessels and any Operator comply or will on the Drawdown Date comply with the requirements of the ISPS Code. | |||
(n) | Acting for its own account | ||
Each Borrower by entering into this Agreement and the other Security Documents is acting on its own behalf and for its own account. | |||
(o) | No Money laundering | ||
in relation to the borrowing by each Borrower of the Loan, the performance and discharge of its obligations and liabilities under this Agreement and the transactions and other arrangements effected or contemplated by this Agreement, each Borrower is acting for its own account and that the foregoing will not involve or lead to contravention of any law, official, requirement or other regulatory measure or procedure implemented to combat money laundering as defined in para (a) of Article 1 of the Law 2331/1995 (as amended) of the Hellenic Republic. |
6.3 | Representations Correct | |
At the time of entering into this Agreement all above representations and warranties or any other information given by the Borrowers and/or the Corporate Guarantor to the Bank are true and accurate. | ||
6.4 | Repetition of Representations and Warranties | |
The representations and warranties in this Clause 6 (except in relation to the representations and warranties in Clause 6.2) shall be deemed to be repeated by the Borrowers on the Drawdown Date and on each Interest Payment Date throughout the Security Period. | ||
7. | CONDITIONS PRECEDENT | |
7.1 | Conditions precedent to the execution of this Agreement |
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The Borrowers shall provide the Bank prior to the execution of this Agreement the following documents and evidence in form and substance satisfactory to the Bank: |
(a) | a duly certified true copy of the Articles of Incorporation and By-Laws or the Memorandum and Articles of Association, or of any other constitutional documents, as the case may be, of each corporate Security Party; | ||
(b) | a recent certificate of incumbency of each corporate Security Party issued by the appropriate authority or, as appropriate, signed by the secretary or a director thereof, stating the officers and the directors of each of them and containing specimens of their respective signatures; | ||
(c) | minutes of separate meetings of the directors and shareholders (if required) of each corporate Security Party at which there was approved (inter alia) the entry into, execution, delivery and performance of this Agreement, the other Security Documents and any other documents executed or to be executed pursuant hereto or thereto to which the relevant corporate Security Party is or is to be a party; | ||
(d) | the original of any power(s) of attorney and any further evidence of the due authority of any person signing this Agreement, the other Security Documents, and any other documents executed or to be executed pursuant hereto or thereto on behalf of any corporate person; | ||
(e) | evidence that all necessary licences, consents, permits and authorisations (including exchange control ones) have been obtained by any Security Party for the execution, delivery, validity, enforceability, admissibility in evidence and the due performance of the respective obligations under or pursuant to this Agreement and the other Security Documents; and | ||
(f) | evidence that the arrangement fee due under Clause 10.9 has been paid in full; | ||
(g) | any other documents or recent certificates or other evidence which would be required by the Bank in relation to any other corporate Security Party evidencing that the relevant Security Party has been properly established, continues to exist validly and to be in good standing and stating respectively the full names and addresses of the person or persons beneficially entitled as shareholders/ stockholders of the entire issued and outstanding shares/ stock of each of them (in connection to the Corporate Guarantor, this will apply to the shareholders controlling 25% of its issued share capital); | ||
(h) | evidence that the Earnings Account and the Retention Account have been duly opened and all mandate forms, signature cards and authorities have been duly delivered; |
7.2 | Conditions concerning the Vessels | |
The obligation of the Bank to advance the Commitment is subject to the further condition that the Bank shall have received prior to the drawdown: |
(a) | evidence that each Vessel is duly registered in the ownership of the respective Borrower through the Registry at the port of such Vessels port of registry under the laws and flag of the Flag State free from any Encumbrances save for those in favour of the Bank and otherwise as contemplated herein; |
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(b) | evidence in form and substance satisfactory to the Bank that each Vessel has been or will on the Drawdown Date be insured in accordance with the insurance requirements provided for in Schedule 2 this Agreement and the other Security Documents including a Mortgagees Interest Insurance, (herein MII ) for an amount equal to 110% of the amount of the Loan, which the Bank may at any time effect on such terms and with such insurers as shall from time to time be determined by the Bank, to be followed by full copies of cover notes, policies, certificates of entry or other contracts of insurance and irrevocable authority is hereby given to the Bank at any time at its discretion to obtain copies of the policies, certificates of entry or other contracts of insurance from the insurers and/or obtain any information in relation to the Insurances relating to such Vessel; | ||
(c) | certified true copy of the Management Agreement(s) evidencing that each Vessel is managed by the Approved Manager on terms acceptable to the Bank; | ||
(d) | evidence that the trading certificates of the Vessels are valid and in force; | ||
(e) | all necessary confirmations from the insurers of the Vessels that they will issue letters of undertaking and endorse notice of assignment and loss payable clauses on the Insurances, in form and substance satisfactory to the Bank in its sole discretion and ( in the event of fleet cover accompanied by waivers for liens for unpaid premium of other vessels managed by the Approved Manager and which are not subject to any mortgage in favour of the Bank) and an opinion signed by an independent firm of marine insurance brokers appointed and/or approved by the Bank at the expenses of the Borrowers confirming the adequacy of the Insurances maintained on the Vessels; | ||
(f) | each of the Security Documents (as set out in Clause 11.1) duly executed and where appropriate duly registered with the appropriate Registry; | ||
(g) | valid class certificate (dated not more than three (3) days before the Drawdown Date) issued by a major IACS classification society acceptable to the Bank, evidencing that each of the Vessel maintains its class and remains free from any and all recommendations, conditions, overdue notations or average damage affecting class; | ||
(h) | the Drawdown Notice in respect of the Commitment duly executed and issued; | ||
(i) | copies of the DOC and SMC referred to in paragraph (a) in the definition of the ISM Code Documentation certified as true and in effect by the Borrowers and the Approved Manager; and | ||
(j) | copies of such ISM Code Documentation as the Bank may by written notice to the Borrowers have requested not later than two (2) days before the Drawdown Date certified as true and complete in all material respects by the Borrowers and the Approved Manager; | ||
(k) | copies of the ISSCs in relation to the Vessels; | ||
(l) | a report signed by an independent firm of marine insurance brokers appointed by the Bank at the expense of the Borrowers confirming the adequacy of the Insurances maintained on the Vessels; |
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(m) | if the Bank so requires, a satisfactory to the Bank review of class records and recent condition survey report on the Vessels together with a comprehensive record inspection from a surveyor appointed by the Bank, at the Borrowers expense; | ||
(n) | certified true and complete copy of any Charterparty and any addenda thereto; | ||
(o) | valuation of the Vessels, at the Borrowers expense, as at a date determined by the Bank but in any event before the relevant drawdown, prepared on the basis specified in Clause 8.6(b) by major shipbrokers appointed and/or approved by the Bank in form and substance satisfactory to the Bank in its sole discretion; |
7.3 | No change of circumstances | |
The obligation of the Bank to advance the Commitment or any part thereof is subject to the further condition that at the time of the giving of the Drawdown Notice and on the Drawdown Date: |
(a) | the representations and warranties set out in Clause 6 and in each of the Security Documents are true and correct on and as of each such time as if each was made with respect to the facts and circumstances existing at such time; | ||
(b) | no Default shall have occurred and be continuing or would result from the drawdown; and | ||
(c) | the Bank shall be satisfied that there has been no change in the ownership, management, operations and/or adverse change in the financial condition of any Security Party which (change) might, in the sole opinion of the Bank, be detrimental to the interests of the Bank. |
7.4 | General Conditions | |
The obligation of the Bank to advance the Commitment or any part thereof is subject to the further condition that the Bank, prior to or simultaneously with the drawdown, shall have received: |
(a) | opinions from lawyers appointed by the Bank as to all the matters referred to in Clauses 6.1(a) and (b) and all such aspects of law as the Bank shall deem relevant to this Agreement and the other Security Documents and any other documents executed pursuant hereto or thereto and any further legal or other expert opinion as the Bank at its sole discretion may require; | ||
(b) | confirmation from any agents nominated in this Agreement and elsewhere in the other Security Documents for the acceptance of any notice or service of process, that they consent to such nomination; and | ||
(c) | a receipt in writing in form and substance satisfactory to the Bank including an acknowledgement and admission of the Borrowers and/or any other Security Party to the effect that the Commitment or relevant part thereof (as the case may be) was drawn by the Borrowers and a declaration by the Borrowers that all conditions precedent have been fulfilled, that there is no Event of Default and that all the representations and warranties are true and correct. |
7.5 | Waiver of conditions precedent |
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The conditions specified in this Clause 7 are inserted solely for the benefit of the Bank and may be waived by the Bank in whole or in part and with or without conditions. Without prejudice to any of the other provisions of this Agreement, in the event that the Bank, in its sole and absolute discretion, makes the Commitment available to the Borrowers prior to the satisfaction of all or any of the conditions referred to in Clause 7.1 and 7.2, the Borrowers hereby covenant and undertake to satisfy or procure the satisfaction of such condition or conditions within such period as the Bank may, in its sole and absolute discretion, agree or specify. |
7.6 | Further conditions precedent |
The Bank may request and the Borrower shall within such period from the date of such request as shall be reasonably determined by the Bank, deliver to the Bank on such request further favourable certificates and/or opinions as to any or all of the matters which are the subject of Clauses 6, 7, 8 and 9. |
8. | COVENANTS |
The Borrowers hereby, jointly and severally, undertake with the Bank that, from the date of this Agreement and as long as any moneys are due and/or owing and/or outstanding under this Agreement or any of the other Security Documents, the Borrowers will: |
8.1 | Information Covenants |
(a) | Annual financial Statements | ||
furnish the Bank, in form and substance satisfactory to the Bank, with annual financial statements of the Borrowers and annual audited consolidated financial statements of the Corporate Guarantor at latest within 180 days after the end of the financial year concerned, this obligation to commence with the financial year ending 31st December, 2009, prepared in accordance with generally accepted accounting principles consistently applied; | |||
(b) | Financial Information | ||
provide the Bank annually and from time to time as the Bank may reasonably request and in form and substance satisfactory to the Bank with information on the financial conditions, cash flow position, commitments and operations of the Borrowers and the Group including cash flow analysis and voyage accounts of any vessels owned by any such party with a breakdown of income and running expenses showing net trading profit, trade payables and trade receivables, such financial details to be certified by one of the directors of the relevant company as to their correctness; and | |||
(c) | Information on adverse change or Default | ||
promptly inform the Bank of any occurrence which came to the knowledge of the Borrowers which might adversely affect the ability of any of the Borrowers or any other Security Party to perform its respective obligations under this Agreement and/or any of the other Security Documents and of any Default forthwith upon becoming aware thereof and will from time to time, if so requested by the Bank, confirm to the Bank in writing that, save as otherwise stated in such confirmation, no Default has occurred and is continuing; |
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(d) | Information on the employment of the Vessels | ||
provide the Bank from time to time as the Bank may request with information on the employment of the Vessels and of any Relevant Ship as well as on the terms and conditions of any charterparty, contract of affreightment, agreement or related document in respect of the employment of the Vessels and of any Relevant Ship, such information to be certified by one of the directors of the Borrowers as to their correctness; | |||
(e) | Information for the Securities and Exchange Commission (SEC) |
8.2 | Banking operations |
ensure that, all banking operations in connection with the Vessels are carried out through the Lending Branch; and |
8.3 | Additional Financial Covenants |
The Borrowers shall ensure that, commencing with the financial year ending 31 st December, 2010 and throughout the Security Period, the financial condition of the Corporate Guarantor on a consolidated basis and as evidenced by the most recent financial statements produced in accordance with sub-clause 8.1(a), shall be such that: |
(a) | ensure that the Leverage Ratio of the Corporate Guarantor will not at any time exceed 55%; | ||
(b) | ensure that the ratio of EBITDA over Net Interest Expenses is not lower than 3x; | ||
(c) | ensure that the Corporate Liquidity of the Corporate Guarantor to be on average Dollars three million ($3,000,000); |
The expressions used in this Clause 8.3 shall be construed in accordance with law and accounting principles internationally accepted as used in the most recent financial statements produced in accordance with sub-clause 8.1(a), and for the purposes of this Agreement: | ||
Accounting Period means each consecutive period of twelve (12) months falling during the Security Period (ending on the last day in December of each year) for which the annual financial statements are required to be delivered pursuant to sub-clause 8.1(a); | ||
Leverage Ratio means, in respect of each Accounting Period and on a consolidated basis of the Group, Total Liabilities divided by the Total Assets (both net of cash) during such period. | ||
Corporate Liquidity in relation to the Corporate Guarantor means, in respect of an Accounting Period, the aggregate amount of cash deposits held in accounts of the Corporate Guarantor free from any encumbrances; | ||
EBITDA means, in respect of an Accounting Period, the aggregate amount of consolidated pre-tax profits of the Group before interest, taxes, depreciation and amortization; |
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Interest Expenses means, in respect of an Accounting Period, the aggregate of all interest incurred by any member of the Group (excluding any amounts owing by one member of the Group to another member of the Group) and any net amounts payable under interest rate hedge agreements; | ||
Total Assets means, in respect of an Accounting Period, total assets (excluding cash and cash equivalents) of the Group as stated in the most recent financial statements produced in accordance with sub-clause 8.1(a); and | ||
Total Liabilities means at any relevant time the total liabilities (excluding cash and cash equivalents) of the Group as stated in the most recent financial statements produced in accordance with sub-clause 8.1(a). |
8.4 | No Further Financial Exposure |
without the prior written consent of the Bank: |
(a) | No further Indebtedness | ||
incur no further Indebtedness nor authorise or accept any capital commitments (other than that (i) normally associated with the day to day operations of the Vessels) and (ii) associated with the issuance of letters of guarantee up to Dollars three hundred thousand ($300,000) in aggregate under normal course of business) nor enter into any agreement for payment on deferred terms or hire agreement; | |||
(b) | No Loans | ||
not make any loans or advances to, or any investments or pay any interest thereon, in any person, firm, corporation, joint venture or other entity including (without limitation) any loan or advance to any officer, director, stockholder or employee directly or through the Approved Manager; | |||
(c) | No Disposal of Assets/Dividends | ||
not dispose of any assets without the prior written consent of the Bank; the payment of dividends is permitted provided that no Event of Default has occurred and that no Event of Default will result out of the distribution of dividends; | |||
(d) | No Payments | ||
except pursuant to this Agreement and the other Security Documents (or as expressly permitted by the same) not pay out any funds to any company or person except in connection with the administration of the Borrowers, the operation, maintenance and/or repair of the Vessels; |
8.5 | Maintenance of Business and legal Structure |
(a) | Maintenance of Business Structure | ||
not change the nature, organisation and conduct of its business as, owner of the Vessels or carry on any business other than the business carried on at the date hereof; | |||
(b) | Maintenance of Legal Structure |
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ensure that none of the documents defining the constitution of the Borrowers and/or any corporate shareholder shall be altered in any manner whatsoever; | |||
(c) | Control | ||
ensure that no change shall be made directly or indirectly in the ownership, beneficial ownership, control or management of the Borrowers and the Corporate Guarantor (as far as its controlling interest is concerned) or any share therein or, of the Vessels without the prior written consent of the Bank; | |||
(d) | No change of controlling interest | ||
ensure that, without the prior written consent of the Bank, no change will be made in the shareholding of the Corporate Guarantor that may result in one shareholder interest controlling 25% or more of the Corporate Guarantors issued share capital; | |||
(e) | No merger | ||
not merge or consolidate with any other company or person; | |||
(f) | Subsidiaries | ||
not form or acquire any Subsidiaries; and | |||
(g) | Share capital and distribution | ||
not purchase or otherwise acquire for value any shares of its capital or distribute any of its present or future assets, undertakings, rights or revenues to any of its shareholders; | |||
(h) | Know your customer and money laundering compliance | ||
provide the Bank with such documents and evidence as the Bank shall from time to time require, based on law and regulations applicable from time to time and the Banks own internal guidelines applicable from time to time to identify the Borrowers and the other Security Parties, including the ultimate legal and beneficial owner or owners of such entities (in respect to the Corporate Guarantor, this will apply to the shareholders controlling 25% or more of its issued share capital), and any other persons involved or affected by the transaction(s) contemplated by this Agreement. |
8.6 | Pari passu/Value of Security |
(a) | Pari passu | ||
ensure that its obligations under this Agreement shall, without prejudice to the provisions of this Clause 8.6 at all times rank at least pari passu with all its other present and future unsecured and unsubordinated Indebtedness with the exception of any obligations which are mandatorily preferred by law and not by contract; | |||
(b) | Valuation of the Vessels | ||
at any time (and at least once per year) that the Bank might consider to be (at the sole discretion of the Bank) necessary or useful and at the expense of the |
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Borrowers, have the Vessels valued in Dollars, without, unless required by the Bank, physical inspection and on the basis of sale for prompt delivery and free of Encumbrances for cash at arms length on normal commercial terms as between a willing seller and a willing buyer without taking into account the benefit of any charterparty or other engagement concerning the Vessels (the basis of valuation), by a reputable shipbroker as may from time to time be appointed by the Bank for this purpose; | |||
(c) | Vessels Value to Debt Ratio-Additional Security | ||
ensure and procure that the Security Value shall be no less than the Security Requirement at the relevant time and if at any relevant time the Security Value is less than the Security Requirement, the Borrowers shall within fifteen (15) days of being advised by the Bank of such shortfall, either prepay or provide additional security in form and substance in all respects acceptable to the Bank in an amount at least equal to the amount of such shortfall. Such additional security shall be constituted by: |
(i) | additional pledged cash deposits in favour of the Bank in an amount equal to such shortfall with a bank and in an account and manner to be determined by the Bank; and/or | ||
(ii) | any other security acceptable to the Bank to be provided in a manner determined by the Bank. |
(d) | Market Value | ||
The Market Value of the Vessels shall be determined for the purpose of Clause 8.6(c) and shall be notified by the Bank to the Borrowers and the valuation of such shipbroker shall constitute the value of the Vessels for the purposes of this Agreement and shall be binding upon the parties hereto. All costs in connection with such valuation and any valuation of any additional security provided pursuant to Clause 8.6(c) shall be borne by the Borrowers. Any valuation referred to in Clause 8.6 to be addressed to the Bank, but copies to be given to the Borrowers after relevant request by the Borrowers. | |||
Provided, however, that in the event that the Market Value of the Vessels (determined in accordance with Clause 8.6(b)) shall be less than the Security Requirement, then the value of the Vessels shall be determined by three (3) out of the shipbrokers referred to in Clause 8.6(b) (one of which shall be the initial valuator) and in that case the mean of such three (3) valuations of such shipbrokers shall constitute the value of the Vessels for the purposes of this Agreement and shall be binding upon the parties hereto. | |||
(e) | Valuation of additional security | ||
For the purpose of this Clause 8.6, the market value of any additional security provided or to be provided to the Bank shall be determined by the Bank in its absolute discretion without any necessity for the Bank assigning any reason thereto provided always that if the additional security is in the form of a collateral vessel such collateral vessel shall be valued in accordance with the provisions of Clause 8.6(b) or if the additional security is in form of a cash deposit full credit shall be given for such cash deposit on a Dollar for Dollar basis. |
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(f) | Documents and evidence | ||
In connection with any additional security provided in accordance with this Clause 8.6, the Bank shall be entitled to receive such evidence and documents as may in the Banks reasonable opinion be appropriate and such favourable legal opinions as the Bank shall in its absolute discretion require. |
8.7 | Maintenance of Assets |
(a) | No Transfer of Assets | ||
not convey, assign, transfer, sell or otherwise dispose of or deal with any of their real or personal property, assets or rights, whether present or future, without the prior written consent of the Bank; and | |||
(b) | No Encumbrance of Assets | ||
not allow any part of its undertaking, property, assets or rights, whether present or future, to be mortgaged, charged, pledged, used as a lien or otherwise encumbered without the prior written consent of the Bank; and |
8.8 | Covenants Concerning the Vessels |
(a) | Ownership/Management/Control | ||
ensure that the Vessels are registered on the Drawdown Date under the laws of the Flag State and thereafter maintain her present ownership, management, control and beneficial ownership and that no change of name, ownership or flag of the Vessels will take place without the Banks prior written consent; | |||
(b) | Class | ||
ensure that the Vessels will remain in highest class free of any and all recommendations, overdue notations or average damage affecting class and provide the Bank on demand with copies of all class and trading certificates of the Vessels; | |||
(c) | Insurances | ||
ensure that all Insurances of the Vessels are maintained and comply with all insurance requirements specified in this Agreement and in the Mortgages and in case of failure to maintain the Vessels so insured authorise the Bank (and such authorisation is hereby expressly given to the Bank) to have the right but not the obligation to effect such Insurances on behalf of the Borrowers (and in case that any of the Vessels remains in port for an extended period to effect port risks insurances at the cost of the Borrowers which, if paid by the Bank, shall be Expenses); | |||
(d) | Transfer/Encumbrances | ||
not without the prior written consent of the Bank sell or otherwise dispose of any of the Vessels or any share therein or create or agree to create or permit to subsist any Encumbrance over any of the Vessels (or any share or interest therein) other than Permitted Encumbrances; |
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(e) | Not imperil Flag, Ownership, Insurances | ||
ensure that each Vessel is maintained and trades in conformity with the laws of the Flag State, of its owning company or of the nationality of the officers of such Vessel, the requirements of the Insurances and nothing is done or permitted to be done which could endanger the flag of the said Vessel or its unencumbered (other than Permitted Encumbrances) ownership or its Insurances; | |||
(f) | Mortgage Covenants | ||
always comply with all the covenants provided for in the Mortgages; | |||
(g) | Charter | ||
save for any Charterparty, not enter into a charterparty, contract of affreightment, agreement or related document in respect of the employment of any of the Vessels (i) on demise charterparty or (ii) without the prior written consent of the Bank, for a period for more than twelve (12) months or below the market rate prevailing at the time when any of the Vessels is fixed in or on terms which are not in accordance with the commercial practice prevailing at the relevant time; | |||
(h) | Assignment of Earnings | ||
not assign or agree to assign otherwise than to the Bank the Earnings or any part thereof; and | |||
(i) | Compliance with Environmental Laws | ||
comply with, and procure that all Environmental Affiliates of any Relevant Party comply with, all Environmental Laws including without limitation, requirements relating to manning and establishment of financial responsibility and to obtain and comply with, and procure that all Environmental Affiliates of such Relevant Party obtain and comply with, all Environmental Approvals and to notify the Bank forthwith: |
(i) | of any Environmental Claim for an amount or amounts in aggregate exceeding (a) $200,000 made against any of the Vessels and $500,000 made against any Relevant Ship and/or her respective owner; and | ||
(ii) | upon becoming aware of any incident which may give rise to an Environmental Claim and to keep the Bank advised in writing of the Borrowers response to such Environmental Claim on such regular basis and in such detail as the Bank shall require; |
(j) | Right of survey | ||
the Bank shall have the right of inspection and/or survey of the Vessels at any time, at the Borrowers expense, and shall have the right to review the operating and insurance records of the Borrowers and the Corporate Guarantor; | |||
(k) | Compliance with ISM and ISPS Codes | ||
Ensure that each Vessel and the Approved Manager will always be in compliance with the ISM and ISPS Codes; |
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8.9 | Observance of Covenants |
(a) | Use of the Loan | ||
use the Loan exclusively for the purpose specified in this Agreement; | |||
(b) | Compliance with Covenants | ||
duly and punctually perform each of the obligations expressed to be assumed by it under this Agreement and the other Security Documents; | |||
(c) | Payment on Demand | ||
pay to the Bank on demand any sum of money which is payable by the Borrowers to the Bank under this Agreement but in respect of which it is not specified in any other Clause when it is due and payable; and | |||
(d) | Evidence of Compliance | ||
upon request by the Bank from time to time provide such information and evidence to the Bank as the Bank would reasonably require to demonstrate compliance with the covenants and undertakings set forth in this Agreement and the other Security Documents; |
8.10 | Validity of Securities Taxes etc. |
(a) | Validity | ||
ensure and procure that all governmental or other consents required by law and/or any other steps required for the validity, enforceability and legality of this Agreement and the other Security Documents are maintained in full force and effect and/or appropriately taken; | |||
(b) | Earnings | ||
ensure and procure that, unless and until directed by the Bank otherwise (i) all the Earnings of the Vessels shall be paid to the Earnings Account and (ii) the persons from whom the Earnings are from time to time due are irrevocably instructed to pay them to such account in the name of the Borrowers as shall be from time to time agreed by the Bank in accordance with the provisions hereof and of the relevant Security Documents; | |||
(c) | Taxes | ||
pay all Taxes, assessments and other governmental charges when the same fall due, except to the extent that the same are being contested in good faith by appropriate proceedings and adequate reserves have been set aside for their payment if such proceedings fail; and | |||
(d) | Additional Documents | ||
from time to time and within ten (10) days after the Banks request execute and deliver to the Bank or procure the execution and delivery to the Bank of all such documents as shall be deemed desirable at the reasonable discretion of the Bank for giving full effect to this Agreement, and for perfecting, protecting the value of |
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or enforcing any rights or securities granted to the Bank under any one or more of this Agreement, the other Security Documents and any other documents executed pursuant hereto or thereto and in case that any conditions precedent (with the Banks consent) have not been fulfilled prior to the Drawdown, such conditions shall be complied with within fourteen (14) days of Drawdown (unless the Bank agrees otherwise in writing) and failure to comply with this covenant shall be an Event of Default. |
8.11 | Compliance with the ISM Code |
Procure that the Approved Manager and any Operator: |
(a) | will comply with and ensure that the Vessels and any Operator by no later than the Drawdown Date complies with the requirements of the ISM Code, including (but not limited to) the maintenance and renewal of valid certificates pursuant thereto throughout the Security Period; | ||
(b) | immediately inform the Bank if there is any threatened or actual withdrawal of the Borrowers, the Approved Managers or an Operators DOC or the SMC in respect of the Vessels; and | ||
(c) | promptly inform the Bank upon the issue to the Borrowers, the Approved Manager or any Operator of a DOC and to the Vessels of an SMC or the receipt by the Borrowers, the Approved Manager or any Operator of notification that its application for the same has been realised. |
8.12 | ISPS Code Compliance |
Procure that the Approved Manager or any Operator will: |
(a) | maintain at all times a valid and current ISSC respect of the Vessels; | ||
(b) | immediately notify the Bank in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC in respect of the Vessels; and | ||
(c) | procure that the Vessels will comply at all times with the ISPS Code; |
8.13 | Covenants for the Security Parties |
ensure and procure that all other Security Parties and each of them duly and punctually comply, with the covenants in Clauses 8.1 to 8.12 which are applicable to them mutatis mutandis. |
9. | EVENTS OF DEFAULT |
There shall be an Event of Default whenever an event described in Clauses 9.1 to 9.7 occurs: |
9.1 | Non Performance of Obligations |
(a) | Any of the Borrowers or any other Security Party fails to pay any sum due from any of the Borrowers or, as the case may be such Security Party, under this Agreement and/or any of the other Security Documents at the time, in the currency and in the manner stipulated herein and/or any of the other Security |
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Documents, or, in the case of any sum payable on demand, within three (3) Banking Days of such demand; or | |||
(b) | Any of the Borrowers or any other Security Party fails to observe and perform any one or more of the covenants, terms or obligations contained in this Agreement and/or any other Security Document relating to the Insurances; or | ||
(c) | Any of the Borrowers or any other Security Party commits any breach of or omits to observe any of the covenants, terms, obligations or undertakings under this Agreement and/or any of the other Security Documents (other than failure to pay any sum when due or to comply with any obligation concerning the Insurances) and, in respect of any such breach or omission which in the opinion of the Bank is capable of remedy, such action as the Bank may require shall not have been taken within five (5) days of the Bank notifying the Borrowers and/or the relevant Security Party of such required action to remedy the breach or omission; or |
9.2 | Events affecting the Security Parties |
(a) | any Security Party is adjudicated or found bankrupt or insolvent or any judgement or order is made by any competent court or resolution passed or petition (which is not in the reasonable opinion of the Bank frivolous and is not being contested in good faith by such Security Party) presented for the winding-up or dissolution of any Security Party or for the appointment of a liquidator, trustee, receiver, administrator or conservator of the whole or any part of the undertakings, assets, rights or revenues of any Security Party; or | ||
(b) | any Security Party becomes or is deemed to be insolvent or suspends payment of its debts or is (or is deemed to be) unable to or admits inability to pay its debts as they fall due or proposes or enters into any composition, compromise or other arrangement for the benefit of its creditors generally or good faith proceedings are commenced in relation to any Security Party under any law, regulation or procedure relating to reconstruction or readjustment of debts; or | ||
(c) | an encumbrancer takes possession or a receiver or similar officer is appointed of the whole or any part of the undertakings, assets, rights or revenues of any Security Party 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 fifteen (15) days; or | ||
(d) | all or a material part of the undertakings, assets, rights or revenues of any Security Party are seized, nationalised, expropriated or compulsorily acquired by or under the authority of any government; or | ||
(e) | any event occurs or proceeding is taken with respect to any Security Party in any jurisdiction to which it is subject which has an effect equivalent or similar to any of the events mentioned in sub-Clauses 9.2(a) to 9.2(d); or | ||
(f) | any Security Party suspends or ceases or threatens to suspend or cease to carry on its business; or | ||
(g) | there occurs, in the reasonable opinion of the Bank, a materially adverse change in the financial condition of any Security Party; or |
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(h) | any other event occurs or circumstances arise which, in the reasonable opinion of the Bank, materially and adversely affects 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 this Agreement and/or any of the other Security Documents, or (ii) the security created by this Agreement and/or any of the Security Documents; or | ||
(i) | there is any material change in the beneficial ownership of the shares in any of the Borrowers and/or in any other corporate Security Party (in respect to the Corporate Guarantor, this to apply for the shareholders controlling 25% or more of its issued share capital); or | ||
(j) | a meeting is convened by any Security Party for the purpose of passing any resolution to purchase, reduce or redeem any of its share capital; or |
9.3 | Representations Incorrect |
any representation or warranty made or deemed to be made or repeated by or in respect of any Security Party in or pursuant to this Agreement or any of the other Security Documents or in any notice, certificate or statement referred to in or delivered under this Agreement or any of the other Security Documents is or proves to have been incorrect in any material respect; or |
9.4 | Cross-default of the Borrowers |
any Indebtedness of any of the Borrowers is not paid when due or becomes due and payable, or any creditor of any of the Borrowers becomes entitled to declare any such Indebtedness due and payable prior to the date when it would otherwise have become due, or any guarantee or indemnity given or any obligation or covenant undertaken or agreement made by any of the Borrowers in respect of Indebtedness is not honoured when due; or |
9.5 | Events affecting the Security Documents |
(a) | this Agreement or any of the other 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 party thereto (other than the Bank), or if any such party shall deny that it has any, or any further, liability thereunder or it becomes impossible or unlawful for any of the Borrowers to fulfil any of its covenants and obligations contained in this Agreement or any of the Security Documents or for the Bank to exercise the rights vested in it thereunder or otherwise; or | ||
(b) | any consent, authorisation, licence or approval of, or registration with or declaration to, governmental or public bodies or authorities or courts required by any of the Borrowers to authorise or otherwise in connection with, the execution, delivery, validity, enforceability or admissibility in evidence of this Agreement and/or any of the other Security Documents or the performance by any of the Borrowers of its obligations under this Agreement and/or any of the other Security Documents is modified in a manner unacceptable to the Bank or is not granted or is revoked or terminated or expires and is not renewed or otherwise ceases to be in full force and effect; or |
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(c) | any Encumbrance (other than Permitted Liens) in respect of any of the property (or part thereof) which is the subject of the Security Documents (or any of them) becomes enforceable; or |
9.6 | Events concerning the Security Parties |
(a) | any Security Party (other than the Borrowers) fails to pay any sum due from it under this Agreement and/or any of the Security Documents when due, or, in the case of any sum payable on demand, within three (3) Banking Days of demand; or | ||
(b) | any Security Party (other than the Borrowers) fails to observe and perform any one or more of the covenants, terms or obligations contained in this Agreement (including Schedule 1) and/or the other Security Documents relating to the Insurances; or | ||
(c) | any Security Party (other than the Borrowers) commits any breach of or omits to observe any of the covenants, terms, obligations or undertakings expressed to be assumed by it under this Agreement and/or any of the Security Documents (other than failure to pay any sum when due or to observe or perform obligations relating to the Insurances) and, in respect of any such breach or omission which in the opinion of the Bank is capable of remedy, such action as the Bank may require shall not have been taken within seven (7) days of the Bank notifying the relevant Security Party, of such required action to remedy the breach or omission; or | ||
(d) | any representation or warranty made or deemed to be made or repeated by or in respect of any Security Party (other than the Borrowers) in or pursuant to this Agreement or any of the other Security Documents or in any notice, certificate or statement referred to in or delivered under this Agreement or any of the other Security Documents is or proves to have been incorrect in any material respect; or | ||
(e) | any of the events referred to in Clauses 9.2 to 9.5 occurs (amended as appropriate) in relation to any Security Party (other than the Borrowers). |
9.7 | Events concerning the Vessels |
(a) | Any of the Vessels becomes a Total Loss or suffers damage or is involved in an incident which in the reasonable opinion of the Bank may result in any of the Vessels being subsequently determined to be a Total Loss and the insurance indemnity is not paid by the insurers to the Bank under the General Assignment within a period of one hundred and eighty (180) days from the date such Total Loss or damage or incident occurred; | ||
(b) | Any of the Vessels ceases to be managed by the Approved Manager (for any reason other than the reason of a Total Loss or sale of any of the Vessels) with the approval of the Bank and the Borrowers fail to appoint an Approved Manager within seven (7) days after the termination of the Management Agreement with the previous Approved Manager; or | ||
(c) | any of the Vessels is arrested, confiscated, seized, taken in execution, impounded, forfeited, detained in exercise or purported exercise of any possessory lien or other claim and the Owner shall fail to procure the release of such Vessel within a period of fourteen (14) days thereafter; or |
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(d) | (without prejudice to the generality of sub-Clauses 9.1(b) and (c)) for any reason whatsoever any of the Vessels ceases to comply with the ISM Code; or | ||
(e) | (without prejudice to the generality of sub-Clauses 9.1(b) and (c)) for any reason any of the Vessels ceases to comply with the ISPS Code; or | ||
(f) | the registration of any of the Vessels under the laws and flag of the Flag State is cancelled or terminated without the prior written consent of the Bank; or | ||
(g) | the Flag State of any of the Vessels becomes involved in hostilities or civil war or there is a seizure of power in such Flag State by unconstitutional means if, in any such case, such event could in the reasonable opinion of the Bank reasonably be expected to have a material adverse effect on the security constituted by any of the Security Documents and alternative arrangements satisfactory to the Bank have not been made promptly upon the Banks request; or | ||
(h) | the registration of any of the Vessels under the laws and flag of the Flag State is cancelled or terminated without the prior written consent of the Bank or, if such Vessel is only provisionally registered on the Drawdown Date and is not permanently registered under the laws and flag of the Flag State at least ninety (90) days prior to the deadline for completing such permanent registration; | ||
(i) | any Charterparty is at any time and for any reason terminated or becomes invalid or unenforceable or otherwise ceases to remain in full force and effect, or if the validity of the Charterparty shall at any time and for any reason be contested by any party thereto, or it becomes impossible or unlawful for any party to the Charterparty to fulfil any of its covenants and obligations contained therein and the Borrowers do not provide within 15 days of the Banks notice to the Borrowers an alternative charterparty in form and substance satisfactory to the Bank and/or additional security as provided in Clause 8.6(c); or |
9.8 | Environmental Events |
(a) | any Relevant Party and/or the Approved Manager and/or any of their respective Environmental Affiliates fails to comply with any Environmental Law or any Environmental Approval or any of the Vessels or any Relevant Ship is involved in any incident which gives rise or which may give rise to any Environmental Claim, if in any such case, such non compliance or incident or the consequences thereof could (in the reasonable opinion of the Bank) be expected to have a material adverse effect on the business assets, operations, property or financial condition of any of the Borrowers or any other Security Party or on the security created by any of the Security Documents; or | ||
(b) | any Security Party or any other person fails or omits to comply with any requirements of the protection and indemnity association or other insurer with which any of the Vessels is entered for insurance or insured against protection and indemnity risks (including oil pollution risks) to the effect that any cover in relation to any of the Vessels (including without limitation, liability for Environmental Claims arising in jurisdictions where such Vessel operates or trades) is or may be liable to cancellation, qualification or exclusion at any time; or |
9.9 | Consequences of Default |
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The Bank may without prejudice to any other rights of the Bank (which will continue to be in force concurrently with the following), at any time after the happening of an Event of Default: |
(a) | by notice to the Borrowers declare that the obligation of the Bank to make the Commitment available shall be terminated, whereupon the Commitment shall be reduced to zero forthwith; and/or | ||
(b) | by notice to the Borrowers declare that the Loan and all interest and commitment commission accrued and all other sums payable under this Agreement and the other 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 without any further diligence, presentment, demand of payment, protest or notice or any other procedure from the Bank which are expressly waived by the Borrowers; and/or | ||
(c) | put into force and exercise all or any of the rights, powers and remedies possessed by it under this Agreement and/or under any other Security Document and/or as mortgagee of the Vessels, mortgagee, chargee or assignee or as the beneficiary of any other property right or any other security (as the case may be) over the assets charged or assigned to it under the Security Documents or otherwise (whether at law, by virtue of any of the Security Documents or otherwise). |
9.10 | Insolvency Events of Default |
If an event occurs in respect of any of the Borrowers or the other Security Parties of the type described in sub-Clauses 9.2(a) to (e) (except (i) in the case when a petition was presented or proceedings were commenced or a suit or writ were issued by a third party and any of the Borrowers or the relevant Security Party is defending itself in bona fide and (ii) in the case that such events mentioned in Clause 9.2 relate to only a part of the undertakings, assets, rights or revenues which in the opinion of the Bank does not affect the ability of any of the Borrowers or the relevant Security Party to perform its respective obligations under this Agreement and/or the other Security Documents) the obligation of the Bank to make the Commitment available shall terminate immediately upon receipt by the Bank of the relevant information (as such receipt shall be conclusively certified by a certificate of the Bank) and all amounts payable under sub-Clause 9.9(b) above shall become immediately due and payable without any notice or other formality which is hereby expressly waived by the Borrowers. |
9.11 | Proof of Default |
It is agreed that (i) the non-payment of any sum of money in time will be proved conclusively by mere passage of time and (ii) the occurrence of this (non payment) shall be proved conclusively by a mere written statement of the Bank (save for manifest error). |
9.12 | Exclusion of Banks liability |
Neither the Bank nor any receiver or manager appointed by the Bank, shall have any liability to any of the Borrowers or any other Security Party: |
(a) | for any loss caused by an exercise of rights under, or enforcement of an Encumbrance created by, a Security Document or by any failure or delay to exercise such a right or to enforce such an Encumbrance; or |
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(b) | as mortgagee in possession or otherwise, for any income or principal amount which might have been produced by or realised from any asset comprised in such an Encumbrance or for any reduction (however caused) in the value of such an asset, |
except that this does not exempt the Bank or a receiver or manager from liability for losses shown to have been caused by the wilful misconduct of the Banks own officers and employees or (as the case may be) such receivers or managers own partners or employees. |
10. | INDEMNITIES EXPENSES FEES |
10.1 | Indemnity |
The Borrowers shall on demand (and it is hereby expressly undertaken by the Borrowers to) indemnify the Bank, without prejudice to any of the other rights of the Bank under any of the Security Documents, against any loss or expense which the Bank shall certify as sustained or incurred as a consequence of: |
(a) | any default in payment by any of the Security Parties of any sum under any of the Security Documents when due; | ||
(b) | the occurrence of any Event of Default; | ||
(c) | any prepayment of the Loan or part thereof being made under Clauses 4.2(b) and 4.3, 8.6(c) or 12 or any other repayment of the Loan or part thereof being made otherwise than on an Interest Payment Date relating to the part of the Loan prepaid or repaid; or | ||
(d) | the Commitment not being advanced for any reason (excluding any default by the Bank) after the Drawdown Notice has been given, |
including, in any such case, but not limited to, any loss or expense sustained or incurred in maintaining or funding the Loan or any part thereof or in liquidating or re-employing deposits from third parties acquired to effect or maintain the Loan or any part thereof. |
10.2 | Expenses |
The Borrowers shall (and it is hereby expressly undertaken by the Borrowers to) pay to the Bank on demand: |
(a) | Initial and Amendment expenses | ||
all expenses (including legal, printing and out-of-pocket expenses) reasonably incurred by the Bank in connection with the negotiation, preparation and execution of this Agreement and the other Security Documents and of any amendment or extension of or the granting of any waiver or consent under this Agreement and/or any of the Security Documents and/or in connection with any proposal by the Borrowers to constitute additional security pursuant to sub-Clause 8.6(c), whether any such security shall in fact be constituted or not; | |||
(b) | Enforcement expenses | ||
all expenses (including legal and out-of-pocket expenses) incurred by the Bank in contemplation of, or otherwise in connection with, the enforcement of, or |
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preservation of any rights under, this Agreement and/or any of the other Security Documents, or otherwise in respect of the moneys owing under this Agreement and/or any of the other Security Documents or the contemplation or preparation of the above, whether they have been effected or not; | |||
(c) | MII costs | ||
reimburse the Bank on demand for any and all costs incurred by the Bank (as conclusively certified by the Bank) in effecting and keeping effected a Mortgagees Interest Insurance for an amount equal to 110% of the amount of the Loan (herein MII) which the Bank may at any time effect on such terms and with such insurers as shall from time to time be determined by the Bank) to be followed by full copies of cover notes, policies, certificates of entry or other contracts of insurance and irrevocable authority is hereby given to the Bank at any time at its discretion to obtain copies of the policies, certificates of entry or other contracts of insurance from the insurers and/or obtain any information in relation to the Insurances relating to the Vessels; and | |||
(d) | Other expenses | ||
any and all other Expenses. |
All expenses payable pursuant to this Clause 10.2 shall be paid together with value added tax (if any) thereon. |
10.3 | Stamp duty |
The Borrowers shall pay any and all stamp, registration and similar taxes or charges (including those payable by the Bank) imposed by governmental authorities in relation to this Agreement and any of the other Security Documents, and shall indemnify the Bank against any and all liabilities with respect to, or resulting from delay or omission on the part of the Borrowers to pay such stamp taxes or charges. |
10.4 | Environmental Indemnity |
The Borrowers shall indemnify the Bank on demand and hold the Bank harmless from and against all costs, expenses, payments, charges, losses, demands, liabilities, actions, proceedings (whether civil or criminal) penalties, fines, damages, judgements, orders, sanctions or other outgoings of whatever nature which may be suffered, incurred or paid by, or made or asserted against the Bank at any time, whether before or after the repayment in full of principal and interest under this Agreement, relating to, or arising directly or indirectly in any manner or for any cause or reason out of an Environmental Claim made or asserted against the Bank. |
10.5 | Currencies |
If any sum due from the Borrowers under any of the Security Documents or any order or judgment given or made in relation hereto has to be converted from the currency (the first currency) in which the same is payable under the relevant Security Document or under such order or judgement into another currency (the second currency) for the purpose of (i) making or filing a claim or proof against the Borrowers or any other Security Party, as the case may be or (ii) obtaining an order or judgment in any court or other tribunal or (iii) enforcing any order or judgement given or made in relation to any of the Security Documents, the Borrowers shall (and it is hereby expressly undertaken by the |
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Borrowers to) indemnify and hold harmless the Bank from and against any loss suffered as a result of any difference between (a) the rate of exchange used for such purpose to convert the sum in question from the first currency into the second currency and (b) the rate or rates of exchange at which the Bank may in the ordinary course of business purchase the first currency with the second currency upon receipt of a sum paid to it in satisfaction, in whole or in part, of any such order, judgment, claim or proof. The term rate of exchange includes any premium and costs of exchange payable in connection with the purchase of the first currency with the second currency. |
10.6 | Central Bank or European Central Bank reserve requirements indemnity |
The Borrowers shall on demand promptly indemnify the Bank against any cost incurred or loss suffered by the Bank as a result of its complying with the minimum reserve requirements of the European Central Bank and/or with respect to maintaining required reserves with the relevant national Central Bank to the extent that such compliance relates to the Commitment or deposits obtained by it to fund the whole or part of the Loan and to the extent such cost or loss is not recoverable by the Bank under clause 12.2. |
10.7 | Maintenance of the Indemnities |
The indemnities contained in this Clause 10 shall apply irrespective of any indulgence granted to the Borrowers or any other party from time to time and shall continue to be in full force and effect notwithstanding any payment in favour of the Bank and any sum due from the Borrowers under this Clause 10 will be due as a separate debt and shall not be affected by judgment being obtained for any other sums due under any one or more of this Agreement, the other Security Documents and any other documents executed pursuant hereto or thereto. |
10.8 | Communications Indemnity |
It is hereby agreed in connection with communications that: |
(a) | Express authority is hereby given by the Borrowers to the Bank to accept (at the sole discretion of the Bank) all tested or untested communications given by facsimile or otherwise (but not e-mail), regarding any or all of the notices, requests, instructions or other communications under this Agreement, subject to any restrictions imposed by the Bank relating to such communications including, without limitation (if so required by the Bank), the obligation to confirm such communications by letter. | ||
(b) | The Borrowers shall recognise any and all of the said notices, requests, instructions or other communications as legal, valid and binding, when these notices, requests, instructions or communications come from the fax number mentioned in Clause 15.1 or any other fax usually used by them or their managing company. | ||
(c) | The Borrowers hereby assume full responsibility for the execution of the said notices, requests, instructions or communications by the Bank and promise and recognise that the Bank shall not be held responsible for any loss, liability or expense that may result from such notices, requests, instructions or other communications. It is hereby undertaken by the Borrowers to indemnify in full the Bank from and against all actions, proceedings, damages, costs, claims, demands, expenses and any and all direct and/or indirect losses which the Bank |
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may suffer, incur or sustain by reason of the Bank following such notices, requests, instructions or communications. | |||
(d) | With regard to notices, requests, instructions or communications issued by electronic and/or mechanical processes (e.g. by facsimile) (but not e-mail), the risk of equipment malfunction, including, without limitation, paper shortage, transmission errors, omissions and distortions is assumed fully and accepted by the Borrowers, save in case of Banks gross misconduct. | ||
(e) | The risks of misunderstandings and errors resulting from notices, requests, instructions or communications being given as mentioned above, are for the Borrowers and the Bank will be indemnified in full pursuant to this Clause save in case of Banks gross misconduct. | ||
(f) | The Bank shall have the right to ask the Borrowers to furnish any information the Bank may require to establish the authority of any person purporting to act on behalf of the Borrowers for these notices, requests, instructions or communications but it is expressly agreed that there is no obligation for the Bank to do so. The Bank shall be fully protected in, and the Bank shall incur no liability to the Borrowers for acting upon the said notices, requests, instructions or communications which were believed by the Bank in good faith to have been given by the Borrowers or by any of their authorised representative(s). | ||
(g) | It is undertaken by the Borrowers to safeguard the function and the security of the electronic and mechanical appliance(s) such as fax(es) etc., as well as the code word list, if any, and to take adequate precautions to protect such code word list from loss and to prevent its terms becoming known to any persons not directly concerned with its use. The Borrowers shall hold the Bank harmless and indemnified from all claims, losses, damages and expenses which the Bank may incur by reason of the failure of the Borrowers to comply with the obligations under this Clause. | ||
(h) | The Borrowers hereby expressly give their consent to the communication for process in the meaning of law 2472/97 of their personal data contained in this Agreement, the Security Documents or any of them, the Earnings Account or any accounts in its name kept with the Bank at any relevant time. Such personal data may be communicated to an inter-banking database record and may be used only by banks and financial institutions for the purposes of credit protection and transactions improvement. The Borrowers are authorised to revoke their consent given hereunder at any relevant time by written notice to the registrar of Teiresias A.E. at 2, Alamanas Street, 15125 Maroussi, Athens, Greece. |
10.9 | Arrangement Fee |
As an inducement for the Bank to enter into this Agreement the Borrowers shall pay to the Bank latest upon drawdown an arrangement fee in the amount of Dollars $60,000 (Dollars sixty thousand). |
The arrangement fee referred to in this Clause 10.9 shall be payable by the Borrowers to the Bank whether or not any part of the Commitment is ever advanced. |
11. | SECURITY, APPLICATION, AND SET-OFF |
11.1 | Securities |
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As security for the due and punctual repayment of the Loan and payment of interest thereon as provided in this Agreement and of all other Outstanding Indebtedness, the Borrowers shall ensure and procure that the following Security Documents are duly executed and, where required, registered in favour of the Bank in form and substance satisfactory to the Bank at the time specified herein or otherwise as required by the Bank and ensure that such security consists, on the Drawdown Date, of: |
(a) | the Mortgages duly registered over the Vessels through the Registry; | ||
(b) | the General Assignments; | ||
(c) | the Guarantee; | ||
(d) | the Accounts Pledge Agreement; | ||
(e) | the Charterparty Assignment(s); and | ||
(f) | the Managers Undertaking. |
11.2 | Maintenance of Securities |
It is hereby undertaken by the Borrowers that the Security Documents shall both at the date of execution and delivery thereof and so long as any moneys are owing and/or due under this Agreement or under the other Security Documents be valid and binding obligations of the respective Security Parties thereto and rights of the Bank enforceable in accordance with their respective terms and that they will, at the expense of the Borrowers, execute, sign, perfect and do any and every such further assurance, document, act, omission or thing as in the opinion of the Bank may be necessary or desirable for perfecting the security contemplated or constituted by the Security Documents. |
11.3 | Application of funds |
All moneys received by the Bank under or pursuant to any of the Security Documents and expressed to be applicable in accordance with this Clause 11.3 shall be applied by the Bank in the following manner: |
(a) | Firstly: in or towards payment of Expenses and all sums other than principal or interest which may be due to the Bank under this Agreement and the other Security Documents or any of them at the time of application; | ||
(b) | Secondly: in or towards payment of any default interest; | ||
(c) | Thirdly: in or towards payment of any arrears of interest (other than default interest) due in respect of the Loan or any part thereof; | ||
(d) | Fourthly: in or towards repayment of the Loan whether the same is due and payable or not; | ||
(e) | Fifthly: in or towards payment to the Bank 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; | ||
(f) | Sixthly: the surplus (if any) shall be paid to the Borrowers, or to whomsoever else shall be entitled to receive such surplus. |
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11.4 | Set off | |
Express authority is hereby given by the Borrowers to the Bank without prejudice to any of the rights of the Bank at law, contractually or otherwise, at any time after a Default has occurred and without notice to the Borrowers: |
(a) | to apply any credit balance standing upon any account of the Borrowers with any branch of the Bank and in whatever currency in or towards satisfaction of any sum due to the Bank from the Borrowers under this Agreement and/or any of the other Security Documents; | ||
(b) | in the name of the Borrowers and/or the Bank to do all such acts and execute all such documents as may be necessary or expedient to effect such application; and | ||
(c) | to combine and/or consolidate all or any accounts in the name of the Borrowers with the Bank. | ||
(d) | For all or any of the above purposes authority is hereby given to the Bank to purchase with the moneys standing to the credit of any such account or accounts such other currencies as may be necessary to effect such application. The Bank shall not be obliged to exercise any right given by this Clause. |
11.5 | Earnings Account Retention Account |
(a) | The Borrowers shall procure that all moneys payable in respect of the Earnings of the Vessels shall be paid to the Earnings Accounts free from Encumbrances and rights of set off other than those created by or under the Security Documents. Unless and until an Event of Default shall occur (whereupon the provisions of Clause 11.3 shall be applicable) and subject to the terms and conditions of the Accounts Pledge Agreement no monies shall be withdrawn from the Earnings Accounts save as hereinafter provided: |
(i) | first : in payment of any and all sums whatsoever due and payable to the Bank hereunder (such sums to be paid in such order as the Bank may in its sole discretion elect); | ||
(ii) | second : during each month of the Security Period (but by no later than, in the case of the first such month, the date falling thirty (30) days after the Drawdown Date and, in the case of each subsequent month, the same date of that month), the Borrowers shall cause to be transferred from the Earnings Accounts to the Retention Account out of the aggregate amount of the Earnings of the Vessels received in the Earnings Account during the preceding month: |
(aa) | one third (1/3rd) of the amount of the Repayment Instalment specified in Clause 4.1 falling due for payment on the next following Repayment Date; and | ||
(bb) | the relevant fraction of the amount of interest on the Loan falling due on the next due date for payment of interest under this Agreement. | ||
The expression relevant fraction in relation to an amount of interest on the Loan falling due for payment means a fraction (which shall be notified |
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by the Bank to the Borrowers at the beginning of each Interest Period) where the numerator is always one (1) and where the denominator shall always be three (3) except in the case of an Interest Period of less than three months, in which case the denominator shall be the number of months comprised in such Interest Period; and |
(iii) | third : any balance shall be released to the Borrowers. |
(b) | If the aggregate amount of the Earnings of the Vessels received in the Earnings Accounts is insufficient in any month for the required transfer to be made from the Earnings Accounts to the Retention Account in accordance with Clause 11.5(a), the Borrowers shall make up the amount of such insufficiency on demand from the Bank, but, without prejudice to its right to make such demand, the Bank may elect to make up the whole or any part of such insufficiency by increasing the amount of any transfer to be made in accordance with Clause 11.5(a)(ii) from the aggregate amount of such Earnings received in the next or subsequent months. | ||
(c) | Until the occurrence of an Event of Default (or an event which, with the giving of notice and/or lapse of time or other applicable condition, might constitute an Event of Default), the Bank shall on each Repayment Date and on each due date for the payment of interest under this Agreement apply in accordance with the provisions of Clause 8.1 the relevant part of the balance then standing to the credit of the Retention Account as shall be required to make payment of the Repayment Instalment specified in Clause 4.1 then due under the terms of this Agreement or payment of interest then due under the terms of this Agreement and such transfer shall constitute a pro tanto satisfaction of the Borrowers obligations to pay such repayment instalment or interest (as the case may be) then due under this Agreement. | ||
(d) | Any amounts for the time being standing to the credit of the Retention Account shall bear interest at the rate from time to time offered by the Bank to its customers for Dollar deposits of similar amounts and for periods similar to those for which such amounts are likely to remain standing to the credit of the Retention Account. Such interest shall, provided that the foregoing provisions of this Clause 11.5 shall have been complied with and provided that no Event of Default (or event which, with the giving of notice and/or lapse of time or other applicable condition, might constitute an Event of Default) shall have occurred, be released to the Borrowers. | ||
(e) | Nothing herein contained shall be deemed to affect the absolute obligation of the Borrowers to pay interest on and to repay the Loan as provided in Clauses 3 and 6 or shall constitute a manner or postponement thereof. | ||
(f) | The Borrowers hereby irrevocably authorise the Bank to make from the Earnings Accounts any and all above payments and repayments as and when the same fall due or at any time thereafter. The Bank shall advise the Borrowers in respect of any such payment or repayment. | ||
(g) | The Borrowers will comply with any written requirement of the Bank from time to time as to the location or re-location of the Earnings Accounts and the Retention Account (or any of them) and will from time to time enter into such documentation as the Bank may reasonably require in order to create or maintain in favour of the Bank an Encumbrance in the Earnings Accounts and the Retention Account, all at cost and expense of the Borrowers. |
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(h) | The Borrowers hereby covenant with the Bank that the Earnings Accounts, the Retention Account and any moneys therein shall not be charged, assigned, transferred or pledged nor shall there be granted by the Borrowers or suffered to arise any third party rights over or against the whole or any part of the Earnings Accounts other than in favour of the Bank. | ||
(i) | The Earnings Accounts shall be operated in accordance with the Banks usual terms and conditions (full knowledge of which the Borrowers hereby acknowledges) and subject to the Banks usual charges levied on such accounts and/or transactions conducted on such accounts (as from time to time notified by the Bank to the Borrowers). | ||
(j) | The Borrowers hereby warrant that sufficient monies to meet the next Repayment Instalment plus interest thereon will be accumulated each and every month in the Retention Account. | ||
(k) | After the occurrence of an Event of Default the Bank shall be entitled, but not bound, to apply the balance (if any) including any accrued interest standing to the credit of the Earnings Accounts and the Retention Account in accordance with the provisions of Clause 11.3. | ||
(l) | Upon payment in full of all principal, interest and all other amounts due to the Bank under the terms of this Agreement and the other Security Documents, any balance then standing to the credit of the Retention Account and/or the Earnings Accounts shall be released and paid to the Borrowers or to whomsoever else may be entitled to receive such balance. |
12.1 | Unlawfulness | |
If any change in, or introduction of, any law, regulation or regulatory requirement or any request of any central bank, monetary, regulatory or other authority or any order of any court renders it unlawful or contrary to any such regulation, requirement, request or order for the Bank to advance the Commitment or to maintain or fund the Loan, notice shall be given promptly by the Bank to the Borrowers whereupon the Commitment shall be reduced to zero and the Borrowers shall be obliged to prepay the Loan in accordance with such notice, together with accrued interest thereon to the date of prepayment and all other sums payable by the Borrowers under this Agreement. | ||
In any such event the Borrowers and the Bank shall (as per the provisions of sub-Clause 3.6) negotiate in good faith (but without incurring any legal obligations) with a view to agreeing the terms for making the Loan available from another jurisdiction or providing the Loan from alternative sources. |
12.2 | Change of circumstances | |
If any change in or in the interpretation of any applicable law or regulation, by any government or governmental authority or agency, makes it unlawful for the Bank to maintain or give effect to its obligations or to claim or receive any amount payable to the Bank under this Agreement, then the Bank may serve written notice on the Borrowers declaring its obligations under this Agreement terminated in whole or in part, whereupon the same shall terminate forthwith and the Borrowers will immediately repay the Loan |
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and accrued interest to the date of prepayment together with all other Outstanding Indebtedness to the Bank pursuant to the terms of the notice. |
12.3 | Increased Cost | |
If, as a result of (a) any change in or in the interpretation of any law, regulation or official directive (whether or not having the force of law but, if not having the force of law, with which the Bank habitually complies) including (without limitation) those relating to Taxation, capital adequacy, liquidity, reserve assets, cash ratio deposits and special deposits or those resulting from the implementation of any amendment of the 1988 Basel convergence agreement or any amendatory or substitute agreement thereof (the Basel II) by any governmental authority in any country the laws or regulations of which are applicable on the Bank, or (b) compliance by the Bank with any request from any applicable fiscal or monetary authority (whether or not having the force of law but, if not having the force of law, with which the Bank habitually complies) or (c) any other set of circumstances affecting the Bank: |
(a) | the cost to the Bank of making the Commitment or any part thereof or maintaining or funding the Loan is increased or an additional cost on the Bank is imposed; and/or | ||
(b) | subject the Bank to Taxes or the basis of Taxation (other than Taxes or Taxation on the overall net income of the Bank) in respect of any payments to the Bank under this Agreement or any of the other Security Documents is changed; and/or | ||
(c) | the amount payable or the effective return to the Bank under any of the Security Documents is reduced; and/or | ||
(d) | the Banks 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 the Banks obligations under any of the Security Document is reduced; and/or | ||
(e) | require the Bank to make a payment or forgo a return on or calculated by references to any amount received or receivable by it under any of the Security Documents is required; and/or | ||
(f) | require the Bank 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 case (subject to Clause 12.6) the Borrowers shall pay to the Bank, from time to time, upon demand, such additional moneys as shall indemnify the Bank for any increased or additional cost, reduction, payment, foregone return or loss whatsoever. |
12.4 | Claim for increased cost | |
The Bank will promptly notify the Borrowers of any intention to claim indemnification pursuant to Clause 12.3 and such notification will be a conclusive and full evidence binding on the Borrowers as to the amount of any increased cost or reduction and the method of calculating the same and the Borrowers shall be allowed to rebut such evidence by any means of evidence save for witness. A claim under Clause 12.3 may be made at any time and must be discharged by the Borrowers within seven (7) days of demand. It shall not be a defense to a claim by the Bank under this Clause 12.3 that any increased cost or reduction could have been avoided by the Bank. Any amount due from the |
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Borrowers under Clause 12.3 shall be due as a separate debt and shall not be affected by judgment being obtained for any other sums due under or in respect of this Agreement. |
12.5 | Option to prepay | |
If any additional amounts are required to be paid by the Borrowers to the Bank by virtue of Clause 12.3, the Borrowers shall be entitled, on giving the Bank not less than fourteen (14) days prior notice in writing, to prepay the Loan and accrued interest thereon, together with all other Outstanding Indebtedness, on the next Repayment Date. Any such notice, once given, shall be irrevocable. |
12.6 | Exception | |
Nothing in Clause 12.3 shall entitle the Bank to receive any amount in respect of compensation for any such liability to Taxes, increased or additional cost, reduction, payment, foregone return or loss to the extent that the same is subject of an additional payment under Clause 5.3. |
13.1 | Binding Effect | |
This Agreement shall be binding upon and inure to the benefit of the Bank and the Borrowers and their respective successors and permitted assigns. |
13.2 | No Assignment by the Borrowers | |
The Borrowers and any other parties to the Security Documents other than the Bank may not (without the prior written consent of the Bank) assign or transfer any of its rights and/or obligations under this Agreement or any of the other Security Documents or any documents executed pursuant to this Agreement and/or the other Security Documents. |
13.3 | Assignment by the Bank | |
The Bank may at any time (following sufficient notice being given to the Borrowers and the other Security Parties but without the consent of the Borrowers) assign, transfer, or offer participation to any other bank or financial institution, in whole or in part, or in any manner dispose of all or any of its rights and/or obligations arising or accruing under this Agreement or any of the other Security Documents or any documents executed pursuant to this Agreement and/or the other Security Documents. |
13.4 | Documentation | |
If the Bank assigns, transfers or in any other manner grants participation in respect of all or any part of its rights or benefits or transfers all or any of its obligations as provided in this Clause 13, each Borrower undertakes, immediately on being requested to do so by the Bank, to enter into and procure that each Security Party enters into such documents as may be necessary or desirable to transfer to the assignee, transferee or participant all or the relevant part of the interest of the Bank in the Security Documents and all relevant references in this Agreement to the Bank shall thereafter be construed as a reference to the Bank and/or assignee, transferee or participant of the Bank to the extent of their respective interests and, in the case of a transfer of all or part of the obligations of the Bank, the Borrowers shall thereafter look only to the assignee, transferee or participant in respect of that proportion of the obligations of the Bank under this Agreement assumed by such assignee, transferee or participant. Each Borrower hereby expressly consents to |
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any subsequent transfer of the rights and obligations of the Bank and undertakes that it shall join in and execute such supplemental or substitute agreements as may be necessary to enable the Bank to assign and/or transfer and/or grant participation in respect of its rights and obligations to another branch or to one or more banks or financial institutions in a syndicate or otherwise. The cost of any such assignment shall be borne by the Bank. |
13.5 | Disclosure of information | |
The Bank may, on a confidential basis, to a prospective assignee, substitute or transferee or to any other person who may propose entering into contractual relations with the Bank in relation to this Agreement such information about the Borrowers and the other Security Parties as the Bank shall consider appropriate. |
13.6 | Change of Lending Branch | |
The Bank shall be at liberty to transfer the Loan to any branch or branches, and upon notification of any such transfer, the word Bank in this Agreement and in the other Security Documents shall mean the Bank, acting through such branch or branches and the terms and provisions of this Agreement and of the other Security Documents shall be construed accordingly. |
14.1 | Cumulative Remedies | |
The rights and remedies of the Bank contained in this Agreement and the other Security Documents are cumulative and not exclusive of each other nor of any other rights or remedies conferred by law. |
14.2 | Waivers | |
No failure, delay or omission by the Bank to exercise any right, remedy or power vested in the Bank under this Agreement and/or the other Security Documents or by law shall impair such right or power, or be construed as a waiver of, or as an acquiescence in any default by the Borrowers, nor shall any single or partial exercise by the Bank of any power, right or remedy preclude any other or further exercise thereof or the exercise of any other power, right or remedy. In the event of the Bank on any occasion agreeing to waive any such right, remedy or power, or consenting to any departure from the strict application of the provisions of this Agreement or of any other Security Document, such waiver shall not in any way prejudice or affect the powers conferred upon the Bank under this Agreement and the other Security Documents or the right of the Bank thereafter to act strictly in accordance with the terms of this Agreement and the other Security Documents. No modification or waiver by the Bank of any provision of this Agreement or of any of the other Security Documents nor any consent by the Bank to any departure therefrom by any Security Party shall be effective unless the same shall be in writing and then shall only be effective in the specific case and for the specific purpose for which given. No notice to or demand on any such party in any such case shall entitle such party to any other or further notice or demand in similar or other circumstances. |
14.3 | Integration of Terms | |
This Agreement contains the entire agreement of the parties and its provisions supersede the provisions of the Commitment Letter (save for the provisions thereof which relate to |
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14.4 | Amendments | |
This Agreement and any other Security Documents shall not be amended or varied in their respective terms by any oral agreement or representation or in any other manner other than by an instrument in writing of even date herewith or subsequent hereto executed by or on behalf of the parties hereto or thereto. |
14.5 | Invalidity of Terms | |
In the event of any provision contained in one or more of this Agreement, the other Security Documents and any other documents executed pursuant hereto or thereto being invalid, illegal or unenforceable in any respect under any applicable law in any jurisdiction whatsoever, such provision shall be ineffective as to that jurisdiction only without affecting the remaining provisions hereof or thereof. If, however, this event becomes known to the Bank prior to the drawdown of the Commitment or of any part thereof the Bank shall be entitled to refuse drawdown until this discrepancy is remedied. In case that the invalidity of a part results in the invalidity of the whole Agreement, it is hereby agreed that there will exist a separate obligation of the Borrowers for the prompt payment to the Bank of all the Outstanding Indebtedness. Where, however, the provisions of any such applicable law may be waived, they are hereby waived by the parties hereto to the full extent permitted by the law to the intent that this Agreement, the other Security Documents and any other documents executed pursuant hereto or thereto shall be deemed to be valid binding and enforceable in accordance with their respective terms. |
14.6 | Inconsistency of Terms | |
In the event of any inconsistency between the provisions of this Agreement and the provisions of any other Security Document the provisions of this Agreement shall prevail. |
14.7 | Language and genuineness of documents |
(a) | Language | ||
All certificates, instruments and other documents to be delivered under or supplied in connection with this Agreement or any of the other Security Documents shall be in the Greek or the English language (or such other language as the Bank shall agree) or shall be accompanied by a certified Greek translation upon which the Bank shall be entitled to rely. | |||
(b) | Certification of documents | ||
Any copies of documents delivered to the Bank shall be duly certified as true, complete and accurate copies by appropriate authorities or legal counsel practising in Greece or otherwise as will be acceptable to the Bank at the sole discretion of the Bank. | |||
(c) | Certification of signature |
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(d) | Further assurances |
(e) | Conflicts | ||
In the event of any conflict between this Agreement and any of the other Security Documents, and the provisions of this Agreement shall prevail. |
15.1 | Notices | |
Every notice, request, demand or other communication under the Agreement or, unless otherwise provided therein, under any of the other Security Documents shall: |
(a) | be in writing delivered personally or be first-class prepaid letter (airmail if available), or shall be served through a process server or subject to Clause 10.7 by fax; | ||
(b) | be deemed to have been received, subject as otherwise provided in this Agreement or the relevant Security Document, in the case of fax, at the time of dispatch as per transmission report (provided, in either case, that if the date of despatch is not a business day in the country of the addressee it shall be deemed to have been received at the opening of business on the next such business day), and in the case of a letter when delivered or served personally or five (5) days after it has been put into the post; and | ||
(c) | be sent: |
(i) | if to be sent to any Security Party, to: | ||
c/o Free Bulkers S.A.
89 Akti Miaouli & 4 Mavrokordatou street Piraeus Greece Fax: (+30) 210 4291100 Attention: Mr. Ion Varouxakis |
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(ii) | in the case of the Bank at: | ||
62, Notara & Sotiros Dios streets
185 35 Piraeus Greece Fax No. (+30) 210 41 32 058 Attention : The Manager |
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15.2 | Process Agent | |
Mr. Ioannis Fassolis, an Attorney-at-Law, whose present address is at 15 Sachtouri Street, 185 36, Piraeus, Greece, is hereby appointed by the Borrowers as agent to accept service (hereinafter Process Agent) upon whom any judicial process in respect of proceedings in Greece may be served and any process notice, judicial or extra-judicial request, demand for payment, payment order, foreclosure proceedings, notarial announcement of claim, notice, request, demand or other communication under this Agreement or any of the Security Documents. In the event that the Process Agent (or any substitute process agent notified to the Bank in accordance with the foregoing) cannot be found at the address specified above (or, as the case may be, notified to the Bank), which will be conclusively proved by a deed of a process server to the effect that the Process Agent was not found at such address, any process notice, judicial or extra-judicial request, demand for payment, payment order, foreclosure proceedings, notarial announcement of claim or other communication to be sent to any Security Party may be validly notified in accordance with the relevant provisions of the Hellenic Code on Civil Procedure. |
15.3 | Confidentiality |
(a) | Each of the parties hereto agrees and undertakes to keep confidential any documentation and any confidential information concerning the business, affairs, directors or employees of the other which comes into its possession in connection with this Agreement and not to use any such documentation, information for any purpose other than for which it was provided. | ||
(b) | Each Borrower acknowledges and accepts that the Bank may be required by law, regulation or regulatory requirement or any request of any central bank or any court order to disclose information and deliver documentation relating to the Borrowers and the transactions and matters in relation to this Agreement and/or the other Security Documents to governmental or regulatory agencies and authorities. | ||
(c) | Each Borrower acknowledges and accepts that in case of occurrence of any of the Events of Default the Bank may disclose information and deliver documentation relating to the Borrowers and the transactions and matters in relation to this Agreement and/or the other Security Documents to third parties to the extent that this is necessary for the enforcement or the contemplation of enforcement of the Banks rights or for any other purpose for which in the opinion of the Bank, such disclosure would be useful or appropriate for the interests of the Bank or otherwise and each Borrower expressly authorises any such disclosure and delivery. | ||
(d) | Each Borrower acknowledges and accepts that the Bank may be prohibited from disclosing information to the Borrowers by reason of law or duties of confidentiality owed or to be owed to other persons. |
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16.1 | Law |
16.2 | Submission to Jurisdiction |
(a) | For the exclusive benefit of the Bank, each Borrower hereby (i) irrevocably submits to the non exclusive jurisdiction of the Courts of Piraeus in Greece and (ii) agrees that any summons, writ, judicial or extra-judicial notice, protest, payment order, order for payment, order for enforcement, announcement of claim or other legal process issued against it in Greece shall be served upon the Process Agent, who is hereby authorised to accept such service, which shall be deemed to be good service on the Borrowers. | ||
(b) | The submission to the jurisdiction of the Courts of Piraeus shall not (and shall not be construed so as to) limit the right of the Bank to take proceedings against the Borrowers in the courts of any other jurisdiction nor shall the taking of proceedings in any one or more jurisdictions preclude the taking of proceedings in any other jurisdiction, whether concurrently or not. | ||
(c) | The parties further agree that subject to sub-Clause 16.2(b) the Courts of Piraeus shall have exclusive jurisdiction to determine any claim which the Borrowers may have against the Bank arising out of or in connection with this Agreement and each Borrower hereby waives any objections to proceedings with respect to this Agreement in such courts on the grounds of venue or inconvenient forum. |
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To:
|
FBB- First Business Bank S.A. | |||
|
62, Notara and Sotiros Dios streets | |||
|
Piraeus, Greece | |||
|
(the Bank) | |||
|
||||
|
[ ] 2009 |
(a) | no event or circumstance has occurred and is continuing which constitutes a Default; | |
(b) | the representations and warranties contained in Clause 6 of the Loan Agreement and the representations and warranties contained in each of the other Security Documents 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 drawing down of the Commitment 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) to be exceeded; and | |
(d) | to the best of our knowledge and belief there has been no material adverse change in our financial position or in the consolidated financial position of ourselves and the other Security Parties from that described by us to the Bank in the negotiation of the Loan Agreement. |
SIGNED by
|
) | |||||
Mr.
|
) | |||||
for and on behalf of the First Borrower
|
) | |||||
ADVENTURE NINE S.A.
|
) | Attorney-in-Fact | ||||
of the Marshall Islands, in the presence of:
|
) | |||||
|
||||||
SIGNED by
|
) | |||||
Mr.
|
) | |||||
for and on behalf of the Second Borrower
|
) | |||||
ADVENTURE TWELVE S.A.
|
) | Attorney-in-Fact | ||||
of Liberia, in the presence of:
|
) |
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Witness: | ||||
Name: | ||||
Address: | ||||
Piraeus, Greece | ||||
Occupation: Attorney-at-law | ||||
1. | DEFINITIONS |
1.1 | Words and expressions used in this Schedule shall have the meanings given thereto in the agreement to which this Schedule is attached and the following expressions shall have the meanings listed below: |
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2.1 | The insurance which must be effected and maintained in accordance with the provisions of the agreement to which these Insurance Requirements are attached should be in the name of the Owner and as follows: |
(a) | Hull and Machinery | ||
insurance against fire and usual marine risks on an agreed value basis, on a full cover/all risks basis according to English or American Hull Clauses with a reasonable deductible and upon such terms as shall from time to time be approved in writing by the Bank; and | |||
(b) | War Risks Insurance | ||
insurance against War risks according to the London Institute War Clauses, on an agreed value basis attaching also the so called war protection clauses. In this case crew war liabilities insurance shall also have to be effected separately; and | |||
(c) | Increased Value | ||
increased Value insurance (Total Loss only, including Excess Liabilities) as per the applicable English or American Institute Clauses (Disbursement/Increased Value/ Excess Liabilities) up to an amount not exceeding the Insurance Amount specified in Clause 3.3 below; and | |||
(d) | Protection and Indemnity | ||
insurance against protection and indemnity risks for the full value and tonnage of the vessel insured (as approved in writing by the Bank) according to the relevant rules and deductibles provided thereof for all risks including Pollution (and if the vessel is passenger ship including liability towards third parties which is not covered by the War Risk Insurance) insured by P+I Clubs, members of the International Group of Protection and Indemnity Associations. If any risks are excluded or the deductibles as provided by the rules have been altered, the written consent of the Bank shall have to be previously required. In case that crew liabilities (including without limitation loss of life, injury or illness) have been entirely excluded from the association cover or insured on a deductible excess basis, (always subject to the prior written consent of the Bank) such liabilities shall have to be further insured separately with other underwriters acceptable to the Bank and upon such terms as shall from time to time be approved in writing by the Bank; and | |||
(e) | FD & D Insurance | ||
Freight, Demurrage and Defence insurance as per the terms and conditions of a mutual club or association acceptable to the Bank; and |
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(f) | Pollution Liability Insurance | ||
an extra insurance in respect of excess Oil Pollution Liability (including -if the vessel insured is a tanker- the Civil Liability Convention certificate) including full cover of pollution risks for the amount up to the maximum commercially available limit and upon such terms as shall be commercially available and accepted by the Bank; and | |||
(g) | USA Pollution Risk Insurance | ||
(in case that the vessel is scheduled to operate within or nearby USA jurisdiction) to cover and keep such vessel covered with an extra insurance in respect of oil pollution liability for an amount and upon such terms as required by international and national law regulations and shall from time to time be required by the Bank; and | |||
(h) | Mortgagees Interest Insurance Mortgagees Additional Perils (Pollution) Interest Insurance | ||
Mortgagees Interest Insurance and Mortgagees Additional Perils (Pollution) Interest Insurance each in an amount equal to 110% of the amount of the Loan including Mortgagees asset protection (pollution) cover or other similar insurance in respect of any pollution claims against the Vessels upon such terms as shall from time to time be determined by the Bank; and | |||
(i) | Other Insurance | ||
insurance in respect of such other matters of whatsoever nature and howsoever arising in respect of which the Bank would at any time require at its discretion the vessel to be insured. |
3.1 | The Insurances to be effected in such currency as the Bank may approve and through the Approved Brokers (other than the mortgagees interest insurance which shall be effected through brokers nominated by the Bank) and with such insurance companies and/or underwriters as shall from time to time be approved in writing by the Bank, provided however that the insurances against war risks, protection and indemnity, FD & D cover or other mutual insurance risks may be effected by the entry of the vessel with such war, protection and indemnity or other mutual insurance associations as shall from time to time be approved in writing by the Bank. | |
3.2 | The Insurances to be effected and maintained free of cost and expense to the Bank and in the sole name of the Owner or, if so required by the Bank, in the joint names of the Owner and the Bank (but without liability on the part of the Bank for premiums or calls). All insurances to be in form and substance and under terms satisfactory to the Bank and with insurers acceptable to the Bank. | |
3.3 | Unless otherwise agreed in writing by the Bank: |
(a) | The amount in respect of which the Insurances should be effected shall be an amount (Insurance Amount) which will be (aa) in respect of Hull and Machinery Insurance the greater of the market value of the vessel insured for the time being |
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and 125% of an amount (the Amount of Debt) equal to (i) the Loan if the agreement to which these Insurance Requirements are attached is a Loan Agreement or (ii) the Maximum Limit of the Facility if the agreement to which these Insurance Requirements are attached is an Overdraft Facility or a Facility for Issue of Guarantees or Letters of Credit; and (bb) in respect of Protection and Indemnity, FD&D, Mortgagees Interest Insurance and/or Mortgagees Asset Additional Perils (Pollution), 110% of the Amount of Debt. | |||
(b) | In case that the Amount of Debt is secured by more than one vessels the above percentages should be covered by the aggregate of the Insurances in respect of all such vessels. | ||
(c) | In case that the vessel insured secures by its Insurances Amounts of Debt under more than one agreements then the above percentages apply to the aggregate of all the Amounts of Debt under all the agreements. |
3.4 | Any person which is obliged under the agreement to which these Insurance Requirements are attached to effect and maintain the Insurances, it will be obliged and it hereby undertakes, jointly and severally with any other person having the same obligation to (and will ensure that the Owner, if it is a different person shall): |
(a) | procure and ensure that the Approved Brokers and/or the Club Managers, as the case may be, shall send to the Bank a letter of undertaking in respect of the Insurances in form and substance satisfactory to the Bank and Notice of Cancellation as per Clause 4(d) below. The Approved Brokers Letter of Undertaking shall be compatible with the form recommended by Lloyds Insurance Brokers Committee, or any subsequent LIBC form. Such brokers to further undertake to give immediate notice of any insurance being subject to the Condition Survey Warranty (J.H.II5) and/or Structural Conditions Warranty (J.H.722) and/or the Classification Clause (Hulls) 29/6/89, 30 days prior to the attachment date of any insurance bearing any of these warranties. | ||
(b) | (if any of the Insurances form part of a fleet cover), procure that the Approved Brokers shall undertake to the Bank that they shall neither set off against any claims in respect of the vessel insured any premiums due in respect of other vessels under such fleet cover or any premiums due for other insurances, nor cancel the insurance for reasons of non-payment of premiums for other vessels under such fleet cover or of premiums for such other insurances, and shall undertake to issue a separate policy in respect of the vessel insured if and when so requested by the Bank; | ||
(c) | punctually pay all premiums, calls, contributions or other sums payable in respect of all Insurances and produce all relevant receipts or other evidence of payment when so required by the Bank; | ||
(d) | at least fourteen (14) days before the Insurances expire, notify the Bank of the names of the brokers and/or the war risks and protection and indemnity risks associations proposed to be employed by the Owner for the purposes of the renewal of such Insurances and of the amounts in which such Insurances are proposed to be renewed and the risks to be covered and, subject to compliance with any requirements of the Bank under the Insurance Requirements, procure that appropriate instructions for the renewal of such Insurances on the terms so specified are given to the Approved Brokers and/or to the approved war risks and protection and indemnity risks associations at least ten (10) days before the |
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relevant Insurances expire, and that the Approved Brokers and/or the approved war risks and protection and indemnity risks associations will at least seven (7) days before such expiry (or within such shorter period as the Bank may from time to time agree) confirm in writing to the Bank as and when such renewals have been effected in accordance with the instructions so given; |
(e) | arrange for the execution and delivery of such guarantees or indemnities as may from time to time be required by any protection and indemnity or war risks association; | ||
(f) | deposit with the Approved Brokers (or procure the deposit of) all slips, cover notes, policies, certificates of entry or other instruments of insurance from time to time issued and procure that the interest of the Bank shall be endorsed thereon by incorporation of the relevant Loss Payable Clause and by means of a notice of assignment (signed by the Owner) in the form set out in Paragraph 4 of this Schedule or in such other form as may from time to time be agreed in writing by the Bank, and that the Bank shall be furnished with pro forma copies thereof and a letter or letters of undertaking from the Approved Brokers in such form as shall from time to time be required by the Bank; | ||
(g) | procure that any protection and indemnity and/or war risks associations and/or Hull and Machinery and/or any other insurance company or underwriters in which the vessel insured is for the time being entered and/or insured shall endorse the relevant Loss Payable Clause on the relevant certificate of entry or policy and shall furnish the Bank with a copy of such certificate of entry or policy and a letter or letters of undertaking in such form as shall from time to time be required by the Bank; | ||
(h) | (if so requested by the Bank, but at the cost of the Owner) furnish the Bank from time to time with a detailed report signed by an independent firm of marine insurance brokers appointed by the Bank dealing with the Insurances maintained on the vessel insured and stating the opinion of such firm as to the adequacy thereof; | ||
(i) | do all things necessary and provide all documents, evidence and information to enable the Bank to collect or recover any moneys which shall at any time become due in respect of the Insurances; | ||
(j) | ensure that the vessel insured shall not be employed otherwise than in conformity with the terms of the Insurances (including any warranties express or implied therein) without first obtaining the consent of the insurers to such employment and complying with such requirements as to extra premium or otherwise as the insurers may prescribe; | ||
(k) | apply all sums receivable under the Insurances which are paid to the Owner in accordance with the Loss Payable Clauses in repairing all damage and/or in discharging the liability in respect of which such sums shall have been received; | ||
(l) | (in case that the vessel is scheduled to operate or operates within or nearby USA jurisdiction) make all the Protection & Indemnity Club US Voyage Quarterly Declarations for each quarter in time and send copies of same to the Bank; and |
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(m) | Fleet Cover is permitted only subject to the prior written approval of the Bank, to the conditions set out in 3.4(b) above and the Banks prior express written approval of fleet aggregate deductibles. |
4.1 | The Loss Payable Clauses to be attached to the relevant Insurances should be substantially in the following form: | |
(A) Hull and Machinery (Marine and War Risks) | ||
It is noted that by a Deed of General Assignment and a first priority statutory ship Mortgage [and a Deed of covenant supplemental thereto, both] dated , 2009 granted by , of (the Owner) in favour of FBB FIRST BUSINESS BANK S.A., acting through its office at 62, Notara and Sotiros Dios streets, Piraeus, Greece (the Mortgagee) all the Owners rights, title and interest in and to all policies and contracts of insurance from time to time taken out or entered into by or for the benefit of the Owner including all claims of whatsoever nature and return or premia in respect of the flag m/v and accordingly: |
(a) | all claims hereunder in respect of an actual or constructive or compromised or arranged total loss, and all claims in respect of a major casualty (that is to say any casualty the claim in respect of which exceeds the Major Casualty Amount inclusive of any deductible) shall be paid in full to the Mortgagee or to its order; and | ||
(b) | all other claims hereunder shall be paid in full to the Owner or to its order, unless and until the Mortgagee shall have notified the insurers hereunder to the contrary, whereupon all such claims shall be paid to the Mortgagee or to its order. | ||
(B) | Protection and Indemnity Risks |
Payment of any recovery which , of (the Owner) is entitled to make out of the funds of the Association in respect of any liability, costs or expenses incurred by the Owner, shall be made to the Owner or to its order, unless and until the Association receives notice to the contrary from FBB FIRST BUSINESS BANK S.A., acting through its office at 62, Notara and Sotiros Dios streets, Piraeus, Greece (the Mortgagee) in which event all recoveries shall thereafter be paid to the Mortgagee or to its order; provided that no liability whatsoever shall attach to the Association, its managers or its agents for failure to comply with the latter obligation until the expiry of two clear business days from the receipt of such notice. | ||
4.2 | Notice of Cancellation | |
The Owner to procure that Notice of Cancellation of Insurances be given to the Mortgagee along the following terms: | ||
Notice of Cancellation of Insurances will be given to FBB FIRST BUSINESS BANK S.A., acting through its office at 62, Notara and Sotiros Dios streets, Piraeus, Greece (the Mortgagee) in any of the following cases: |
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(a) | immediately of any material changes which are proposed to be made in the terms of the Insurances or if the insurers cease to be insurers for any purposes connected with the Insurances; | ||
(b) | not later than fourteen (14) days prior to the expiry of any of the Insurances if instructions have not been received for the renewal thereof and, in the event of instructions being received to renew, of the details thereof; | ||
(c) | immediately of any instructions or notices received by insurers with regard to the cancellation or invalidity of any of the Insurances aforesaid; and | ||
(d) | immediately if the insurers give notice of their intention to cancel the Insurances, provided that the insurers will not exercise any rights of cancellation by reason of unpaid premiums without giving the Bank fourteen (14) days, from the receipt of such notice in which to remit the sums due. |
4.3 | Notice of Assignment | |
The Notice of Assignment shall be in the following form: |
Dated _________, 2009
For and on behalf of The Owner |
||||
By: | ||||
Attorney-in-fact | ||||
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SIGNED by
|
) | |||||||||
Mr.
|
) | |||||||||
for and on behalf of the First Borrower
|
) | /s/ Ion G. Varouxakis | ||||||||
ADVENTURE NINE S.A.
|
) | Attorney-in-Fact | ||||||||
of the Marshall Islands, in the presence of:
|
) | |||||||||
|
||||||||||
SIGNED by
|
) | |||||||||
Mr.
|
) | |||||||||
for and on behalf of the Second Borrower
|
) | /s/ Ion G. Varouxakis | ||||||||
ADVENTURE TWELVE S.A.
|
) | Attorney-in-Fact | ||||||||
of Liberia, in the presence of:
|
) |
Witness: | /s/ Ioannis Fassolis | |||
Name: | Ioannis Fassolis | |||
Address: 15 Sachtouri Street, Piraeus, Greece Occupation: Attorney-at-law | ||||
SIGNED
|
) | |||||
by Mr. Nikolaos Vougioukas
|
) | |||||
for and on behalf of
|
) | |||||
FBB-FIRST BUSINESS BANK S.A.
|
) | |||||
its duly authorised Attorney-in-fact
|
) | /s/ illegible | ||||
in the presence of:
|
) | Attorney-in-Fact |
Witness: | /s/ Maria C. Galanopoulou | |||
Name: | Maria C. Galanopoulou | |||
Address: Defteras Merarchias 13, Piraeus, Greece Occupation: Attorney-at-law | ||||
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|
THE COMMONWEALTH OF THE BAHAMAS | |
|
MORTGAGE REGISTRATION FORM | |
|
(Page 1 of 2) |
Official Number | IMO Number | Name of Ship | Port of Registry | |||||
8000947
|
9138680 | FREE IMPALA | NASSAU |
Propulsion and Engine Details
|
Vessel Dimensions |
Propulsion: Single Propeller
|
Length: 151.71 metres | |
Type of Engines: Diesel
|
Breadth: 25.79 metres | |
Total Power: 6074 KW
|
Depth: 13.72 metres |
GROSS TONNAGE:
|
15888 tons | NET TONNAGE: | 8036 tons |
(1) | ADVENTURE TWELVE S.A., a company organised and existing under the laws of the Republic of Liberia and having its registered office at 80, Broad Street, Monrovia, Liberia (hereinafter called the Owner ) |
(2) | FBB FIRST BUSINESS BANK S.A. , a bank incorporated in Greece with its head office at 91 Michalakopoulou Street, 115 28 Athens, Greece acting for the time being through its office at 62, Notara & Sotiros Dios Streets, 185 35 Piraeus, Greece (hereinafter called the Mortgagee, which expression shall include its successors and assigns). |
(A) | The Owner is the sole owner of the vessel FREE NEPTUNE (hereinafter called the Vessel ). The Vessel is duly documented in the name of the Owner under and pursuant to the laws of the Republic of Liberia at the Port of Monrovia under Official No. 12063, International Call Sign A8DF7, its gross tonnage is 17997 tons, its net tonnage is 10222, and she was built in the year 1996 by Naikai Zosen Corporation, Japan. | |
(B) | By a Loan Agreement dated 15 th December, 2009 (hereinafter as the same may from time to time be amended and/or supplemented called the Loan Agreement ) entered into between (A) the Mortgagee, as lender and (B) the following companies including the Owner, as joint and several co-borrowers and co-debtors, i.e. ADVENTURE NINE S.A., of Marshall Islands and ADVENTURE TWELVE S.A., of Liberia (therein collectively referred to as the Borrowers ), the Bank agreed, inter alia, to make available to the Borrowers on a joint and several basis and upon the terms and conditions therein contained a secured term loan in the amount of up to United States Dollars twenty seven million seven hundred and fifty thousand (US$27,750,000) (the Commitment ) for the purpose referred to therein. | |
(C) | Pursuant to the terms of the Loan Agreement, the Mortgagee has advanced to the Borrowers the full amount of the Commitment i.e. United States Dollars twenty seven million seven hundred and fifty thousand (US$27,750,000) (and the Owner hereby acknowledges receipt thereof) and the Owner is indebted as of the date hereof to the Mortgagee in the principal sum of United States Dollars twenty seven million seven hundred and fifty thousand (US$27,750,000). | |
(D) | The Owner in order to secure: |
(a) | the repayment of the said principal amount of the Commitment advanced to the Borrowers pursuant to the Loan Agreement and interest thereon and all other sums of money from time to time owing by the Borrowers to the Mortgagee under the Loan Agreement and the Security Documents; and | ||
(b) | the performance and observance of and compliance by the Owner with all of the covenants terms and conditions in the Loan Agreement and the Security Documents contained, |
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has duly authorised the execution and delivery of this First Preferred Mortgage on the Vessel pursuant to the laws of the Republic of Liberia. |
1. | DEFINITIONS AND INTERPRETATION |
(a) | In this Mortgage unless the context otherwise requires: | ||
Dollars (and the sign $ ) means the legal currency, at any relevant time hereunder, of the United States of America; | |||
Earnings means all moneys whatsoever due or to become due to the Owner at any time during the Security Period arising out of the use or operation of the Vessel including (but without prejudice to the generality of the foregoing) all freight, hire and passage moneys, compensation payable to the Owner in event of requisition of the Vessel for hire, remuneration for salvage and towage services, demurrage and detention moneys and damages for breach (or payments for variations or termination) of any charterparty or other contract for the employment of the Vessel and all sums recoverable under the Insurances in respect of loss of Earnings and includes, if and whenever the Vessel is employed on terms whereby any and all such moneys as aforesaid are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or sharing agreement which is attributable to the Vessel; | |||
Environmental Approvals means all approvals, licenses, permits, exemptions or authorisations required under applicable Environmental Laws: | |||
Environmental Claim means (i) any claim by, or directive from, any applicable governmental, judicial or other regulatory authority alleging breach of or non-compliance with any Environmental Laws or Environmental Approvals or otherwise howsoever relating to or arising out of an Environmental Incident or (ii) any claim by any other third party howsoever relating to or arising out of an Environmental Incident (and, in each such case, claim shall mean a claim for damages, clean-up costs, compliance, remedial action or otherwise); | |||
Environmental Incident means (i) any release of Environmentally Sensitive Material from the Vessel, (ii) any incident in which Environmentally Sensitive Material is released from a vessel other than the Vessel and which involves collision between the Vessel and such other vessel or some other incident of navigation or operation, in either case, where the Vessel, the Owner or the Manager are actually or allegedly at fault or otherwise liable (in whole or in part) or (iii) any incident in which Environmentally Sensitive Material is released from a vessel other than the Vessel and where the Vessel is actually or potentially liable to be arrested as a result and/or where the Owner or the Manager are actually or allegedly at fault or otherwise liable; | |||
Environmental Laws means all laws, regulations, conventions and agreements whatsoever relating to pollution or protection of the environment (including, without limitation, the United States Oil Pollution Act of 1990 and any comparable laws of the individual States of the United States of America) which are from time to time and at any relevant time applicable to the Vessel; | |||
Environmentally Sensitive Material means oil, oil products, any other substance which is polluting, toxic or hazardous or any substance the release of |
2
which into the environment is regulated, prohibited or penalised by or pursuant to any Environmental Law; | |||
Events of Default means any of the events described in Clause 9; | |||
General Assignment means the deed of Assignment bearing even date herewith whereby the Owner has assigned to the Mortgagee the Insurances, the Requisition Compensation and the Earnings of the Vessel, as the same may from time to time be supplemented and/or amended. | |||
Insurances means all policies and contracts of insurance (which expression includes all entries of the Vessel in a protection and indemnity or war risks association) which are from time to time taken out or entered into in respect of the Vessel and her Earnings or otherwise howsoever in connection with the Vessel; | |||
ISM Code means in relation to its application to the Owner, the Vessel and her operation: |
(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 th November, 1993 and incorporated on 19 th May, 1994 into chapter IX of the International Convention for the 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 th November, 1995; |
as the same may be amended, supplemented or replaced from time to time; | |||
ISM Code Documentation includes: |
(a) | the DOC and SMC issued by a classification society in all respects acceptable to the Mortgagee in its absolute discretion pursuant to the ISM Code in relation to the Vessel within the period specified by the ISM Code; | ||
(b) | all other documents and data which are relevant to the ISM SMS and its implementation and verification which the Mortgagee may require by request; and | ||
(c) | any other documents which are prepared or which are otherwise relevant to establish and maintain the Vessels or the Owners compliance with the ISM Code which the Mortgagee may require by request; |
ISM SMS means the safety management system which is required to be developed, implemented and maintained under the ISM Code; |
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ISPS Code means the International Security of Ships and Port Safety Code and includes any amendments or extensions thereto and any regulation issued pursuant thereto; | |||
ISSC means an International Ship Security Certificate issued in respect of the Ship pursuant to the ISPS Code; | |||
LIBOR means in relation to any amount and for any period: |
(a) | the offered rate (if any) per annum for deposits in Dollars for such amount and for such period which is the rate, for such period, appearing on the relevant page of the Reuters Screen LIBOR01 at or about 11 a.m. London time on the Quotation Date (or, if the Mortgagee shall have made a determination pursuant to Clause 3.6 such later time (not being later than 1 p.m. (London time) on the first day of such period) as the Mortgagee may determine) (and, for the purposes of this Agreement, Reuters Screen LIBOR01 means the display designated as LIBOR01 on the Reuters Service or such other page as may replace LIBOR01 on that service for the purpose of displaying rates comparable to that rate or on such other service as may be nominated by the British Bankers Association as the information vendor for the purpose of displaying the British Bankers Association Interest Settlement Rates for Dollars); and | ||
(b) | if on such date no such rate is so displayed, LIBOR for such period shall be the rate determined by the Mortgagee in accordance with its usual practices to obtain similar deposit(s) in Dollars on the basis of the rates quoted by the Mortgagee as the Mortgagees offered rate for 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 11:00 a.m. (London time) on the second Banking Day before the first day of such period; |
Loan means the aggregate principal amount borrowed by the Borrowers in respect of the Commitment or (as the context may require) the principal amount thereof owing to the Mortgagee at any relevant time outstanding under the Loan Agreement; | |||
Loan Agreement means the Loan Agreement mentioned in Recital (B as the same may from time to time be amended and/or supplemented; | |||
Major Casualty means any casualty to the Vessel in respect whereof the claim or the aggregate of the claims against all insurers, before adjustment for any relevant franchise or deductible, exceeds Dollars two hundred thousand ($200,000) or the equivalent in any other currency; | |||
Margin means three percentage points (3%) per annum; | |||
Mortgaged Property means: |
(i) | the Vessel; | ||
(ii) | the Insurances and all benefits thereof (including claims of whatsoever nature and return of premiums); | ||
(iii) | the Earnings; and | ||
(iv) | any Requisition Compensation; |
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person includes any body of persons corporate or unincorporated; | |||
Quotation Date means, in respect of any period in respect of which LIBOR falls to be determined under the Loan Agreement, the second Banking Day before the first day of such period; | |||
Requisition Compensation means all moneys or other compensation payable during the Security Period by reason of requisition for title or other compulsory acquisition of the Vessel otherwise than by requisition for hire; | |||
Secured Indebtedness means the aggregate of (a) the Loan, (b) all other sums of any nature (together with all interest on any of those sums) which from time to time may be payable by the Borrowers to the Mortgagee pursuant to the Security Documents (or any of them) whether actually or contingently, presently or in the future, (c) any damages payable as a result of any breach by the Borrowers of any of the Security Documents and (d) any damages or other sums payable as a result of any of the obligations of the Borrowers under or pursuant to any of the Security Documents being disclaimed by a liquidator or any other person, or, where the context permits, the amount thereof for the time being outstanding; | |||
Security Documents means the Loan Agreement, this Mortgage, the Guarantee, the General Assignment and any other such document as may have been or may hereafter be executed to secure and/or regulate the Secured Indebtedness and any such other document as may be defined in the Loan Agreement as a Security Document (including, where the context so admits, the Loan Agreement itself); | |||
Security Interest means a mortgage, charge (whether fixed or floating), pledge, lien, hypothecation, assignment, trust arrangement, title retention or other interest given by way of security or arrangement of any kind whatsoever; | |||
Security Party(ies) means the Borrowers, the Approved Manager, the Guarantor and any other party (other than the Mortgagee) to any of the Security Documents or any such person as is defined in the Loan Agreement as a Security Party; | |||
Security Period means the period commencing on the date hereof and terminating upon discharge of the security created by the Security Documents by payment of all moneys payable thereunder; | |||
Total Loss means: |
(i) | actual or constructive or compromised or arranged total loss of the Vessel; or | ||
(ii) | requisition for title or other compulsory acquisition of the Vessel otherwise than by requisition for hire; | ||
(iii) | capture, seizure, arrest, detention or confiscation of the Vessel by any government or by persons acting or purporting to act on behalf of any government unless the Vessel be released from such seizure capture arrest or detention within one month after the occurrence thereof. |
Vessel means the motor vessel FREE NEPTUNE described above in Recital (A) hereto and as she is more particularly described in her Certificate of Registry and includes her engines, machinery, boats, tackle, outfit, spare, gear, fuel, |
5
consumable or other stores belongings and appurtenances whether on board or ashore and whether now owned or hereafter acquired; |
(b) | In 6.1 hereof: |
(i) | excess risks means the proportion of claims for general average salvage and salvage charges not recoverable under the hull and machinery policies in respect of the Vessel in consequence of her insured value being less than the value at which the Vessel is assessed for the purpose of such claims; | ||
(ii) | protection and indemnity risks means the usual risks covered by a protection and indemnity association managed in London including the proportion (if any) of any sums payable to any other person or persons in case of collision which are not recoverable under the hull and machinery policies by reason of the incorporation therein of Clause 8 of the Institute Time Clauses (Hulls) (1/11/95) or any equivalent provision; | ||
(iii) | war risks includes the risk of mines and all risks excluded by Clause 24 of the Institute Time Clauses (Hulls) 1/11/95 |
(c) | In this Mortgage: |
(i) | Defined expressions: all capitalised terms which are used herein and are not otherwise defined herein shall have the meaning given to them in the Loan Agreement; | ||
(ii) | Headings: Clause headings are inserted for convenience only and shall not affect the construction of this Mortgage and, unless otherwise specified, all references to Clauses are to clauses of this Mortgage; |
(d) | Construction of certain terms: In this Mortgage, unless the context otherwise requires: |
(i) | words denoting the singular number shall include the plural and vice versa; | ||
(ii) | references to: |
aa) | persons include bodies corporate and unincorporate; | ||
bb) | assets include property, rights and assets of every description; | ||
cc) | any document are to be construed as references to such document as amended or supplemented from time to time; | ||
dd) | any enactment include re-enactments, amendments and extensions thereof; |
(e) | Conflict with the Loan Agreement: This Mortgage contract shall be read together with the Loan Agreement and the other Security Documents, but in case of any conflict between the Loan Agreement and this Mortgage contract, the provisions of the Loan Agreement shall prevail, provided however, that the law applicable to this Mortgage shall be solely that of the Republic of Liberia. |
2. | GRANT, CONVEYANCE AND MORTGAGE |
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2.1 | Mortgage: In consideration of the agreement of the Mortgagee to make available the Loan to the Borrowers and in further consideration of the agreement of the Mortgagee to maintain the Loan available to the Borrowers throughout the Security Period pursuant and subject to the terms and conditions of the Loan Agreement and in order to secure the prompt, full and complete payment to the Mortgagee of the Secured Indebtedness by the Borrowers and to secure the performance and observance of and compliance with all the covenants terms and conditions in this Mortgage and in the Loan Agreement by the Owner, the Owner has granted, conveyed, mortgaged, pledged, set over and confirmed and does by these presents grant, convey, mortgage, pledge, set over and confirm unto the Mortgagee, its successors and assigns, the whole of the Vessel, together with any interest therein and her engines, machinery, boats, tackle, outfit derricks, tools, drillers, cranes, rigging, anchors, drill stem, drilling equipment, pumps and pumping equipment, boat, blow-out preventers, mud systems, tubing casing spare gear, fuel, consumable or other stores, belonging and appurtenances whether on board or ashore and whether now owned or hereafter acquired and also any and all additions, improvements and replacements. | |
TO HAVE AND TO HOLD the same unto the Mortgagee, its successors and assigns, forever, upon the terms herein set forth, for the enforcement of the payment of the Secured Indebtedness by the Borrowers to the Mortgagee under the Loan Agreement and to secure the performance and observance of and compliance with the covenants, terms and conditions in this Mortgage and in the Loan Agreement contained and supplemental thereto, express or implied. | ||
PROVIDED ONLY, and the condition of these presents is such, that if the Owner, its successors or assigns shall pay or cause to be paid to the Mortgagee the Secured Indebtedness under the Loan Agreement as and when the same shall become due and payable in accordance with the terms of this Mortgage, the Loan Agreement and all other such sums as may hereafter become owing and payable to the Mortgagee or its successors or assigns and secured by this Mortgage in accordance with the terms hereof, and shall perform, observe and comply with the covenants, terms and conditions in this Mortgage, the Loan Agreement contained, expressed or implied to be performed, observed or complied with by and on the part of the Owner, then these presents and the rights hereunder shall cease, determine and be void; otherwise to be and remain in full force and effect. | ||
2.2 | Extent of property mortgaged: IT IS NOT INTENDED that this Mortgage shall cover and this Mortgage shall not cover, property other than the Vessel as term Vessel is used in Chapter 3 of Title 21 of Liberian Code of Laws Revised. | |
3. | PAYMENT COVENANTS |
3.1 | For the consideration aforesaid the Owner hereby covenants and undertakes with the Mortgagee: |
(a) | Covenant to repay the Loan: that the Loan will be repaid by the instalments at the times and in the manner specified in Clause 4.1 of the Loan Agreement. | ||
(b) | Covenant to pay interest on the Loan: that the Owner will pay, in accordance with Clause 3.1 of the Loan Agreement, to the Mortgagee, interest on the Loan (or any part thereof) calculated on the actual number of days elapsed and on the basis of a 360 day year for each Interest Period selected or determined as per Clause 3.2 and 3.3 of the Loan Agreement relative thereto at the annual rate of interest (the Interest Rate ) which is conclusively (save for manifest error) certified by the Mortgagee to be (subject to Clause 3.6 of the Loan Agreement), the aggregate of (i) the Margin and (ii) the LIBOR. |
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(c) | Covenant to pay default interest: that in the event of any delay by the Owner in the payment on the due date of any sum due under the Loan Agreement, this Mortgage or any of the Security Documents the Owner shall, without affecting any other remedy of the Mortgagee, pay in accordance with Clause 3.4 of the Loan Agreement on demand interest on all sums overdue from the due date therefor to the date of actual payment (as well as after as before judgement) accruing on a daily basis at the interest rate set forth in Clause 3.4 of the Loan Agreement. | ||
(d) | Covenant to pay other moneys: that the Owner will pay in full amount of any and all other moneys comprising the Secured Indebtedness as and when the same shall become due and payable in accordance with the terms of the Security Documents. | ||
(e) | Indemnity: that the Owner will pay to and/or indemnify the Mortgagee for such additional amounts as may be necessary in order that all payments under this Mortgage after deduction of for or on account of every present or future tax assessment or governmental charge imposed by any competent authority in any country to the revenue laws of which the Owner may for the time be the subject shall be no less than such payment would have been had there been no such tax assessment or charge; | ||
(f) | Covenant to pay expenses etc: that the Owner will pay all such expenses, liabilities, losses, costs, duties, fees, charges or other moneys as are stated in this Mortgage to be payable by the Owner to or recoverable from the Owner by the Mortgagee (or in respect of which the Owner agrees in this Mortgage to indemnify the Mortgagee) at the time and in the manner specified in this Mortgage; and | ||
(g) | Covenant to pay interest expenses etc : that the Owner will pay interest on any such expenses, liabilities, losses, costs, duties, fees, charges or other moneys referred to in Clause 3.1(f) from the date on which the relevant expense, liability, loss, costs, duty, fee, charge or other money is paid or incurred by the Mortgagee (both before and after any relevant judgement) at the rate described in Clause 3.1(c), such interest to be payable on demand, Provided however that this provision shall not affect the right of the Mortgagee to receive interest calculated at the rate prescribed in Clause 3.1(c) from such date prior to demand being made as is provided for by Clause 7.15, 7.17, 8.1, 10.1(g) and 10.1(h) hereof in relation to the matters therein referred to. |
4. | PRESERVATION OF SECURITY AND CUMULATIVE REMEDIES | |
4.1 | Continuing security: |
(a) | the security created by this Mortgage and the other Security Documents shall be held by the Mortgagee as a continuing security for the payment of the Secured Indebtedness and the performance of all the obligations (express or implied) of the Owner in the Security Documents contained; | ||
(b) | the security so created shall not be satisfied by any intermediate payment or satisfaction of any part of the amount hereby and thereby secured (or by any settlement of accounts between the Owner or any other person who may be liable to the Mortgagee in respect of the Secured Indebtedness or any part thereof and the Mortgagee); |
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(c) | the security so created shall be in addition to and shall not in any way prejudice or affect and may be enforced by the Mortgagee without prior recourse to the security created by any other of the Security Documents or by any deposit of documents, or any guarantee, lien, bill, note, mortgage or other security now or hereafter held by the Mortgagee, or any right or remedy of the Mortgagee thereunder and shall not in any way be prejudiced or affected thereby or by the invalidity or unenforceability thereof, or by the Mortgagee releasing, modifying or refraining from perfecting or enforcing any of the same, or granting time or indulgence or compounding with any person liable; | ||
(d) | all the rights, powers and remedies given to the Mortgagee hereunder shall be in addition to and not a limitation of any and every other right, power or remedy vested in the Mortgagee under the Loan Agreement, this Mortgage, the other Security Documents or at law and that all the powers so vested in the Mortgagee may be exercised from time to time and as often as the Mortgagee may deem expedient; | ||
(e) | no failure, delay or omission on the part of the Mortgagee to exercise any right, power or remedy vested in it under the Security Documents or any of them shall impair such right, power or remedy or be construed as a waiver of or as acquiescence in any default by the Owner and no express waiver given by the Mortgagee in relation to any default by the Owner or breach by the Owner of any of its obligations under this Mortgage shall prejudice the rights of the Mortgagee under this Mortgage arising from any subsequent default or breach (whether or not such subsequent default or breach is of a nature different from the previous default or breach) nor the discontinuance, abandonment or adverse determination of any proceedings taken by the Mortgagee to enforce any right, power or remedy preclude any other or further exercise thereof or proceedings to enforce the same or the exercise of any other right, power or remedy nor shall the giving by the Mortgagee of any consent to the doing of any act which by the terms hereof requires the consent of the Mortgagee prejudice the right of the Mortgagee to give or withhold as it thinks fit its consent to the doing of any other similar act; | ||
(f) | the Mortgagee shall not be obliged to make any enquiry as to the nature or sufficiency of any payment received by it hereunder or to make any claim or to take any action to collect any moneys hereby assigned or to enforce any rights and benefits hereby assigned to the Mortgagee or to which the Mortgagee may at any time be entitled hereunder; | ||
(g) | the Mortgagee shall not be bound to enforce any of the other Security Documents before enforcing the security created by the Mortgage; and | ||
(h) | any waiver by the Mortgagee of any terms of this Mortgage or any consent given by the Mortgagee under this Mortgage shall only be effective if given in writing and then only for the purpose and upon the terms for which it is given. |
4.2 | Waiver : The Owner waives any right it may have of first requiring the Mortgagee to proceed against or claim payment from any other person or enforce any guarantee or security (whether by the Owner or any other person) before enforcing this Mortgage. | |
4.3 | Settlement or discharge conditional: Any settlement or discharge under this Mortgage between the Mortgagee and the Owner shall be conditional upon no security or payment to the Mortgagee by the Owner, any other Security Party or any other person being avoided or set- aside or ordered to be refunded or reduced by virtue of any provision or enactment relating to bankruptcy, insolvency or liquidation for the time being in force, |
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and if such condition is not satisfied, the Mortgagee shall be entitled to recover from the Owner on demand the value of such security or the amount of any such payment as if such settlement or discharge had not occurred. |
4.4 | Certificates conclusive: Any certificate submitted by the Mortgagee to the Owner as to the amount owing in respect of the Secured Indebtedness or any part thereof or the Interest Rate or the default interest rate shall (in the absence of manifest error) be conclusive and binding on the Owner. | |
4.5 | Owner to remain liable: The Owner shall remain liable to perform all the obligations assumed by it in relation to the Vessel and the Mortgagee shall not be under any obligation of any kind whatsoever in respect thereof or be under any liability whatsoever in event of any failure by the Owner to perform its obligations in respect thereof. | |
4.6 | Discharge of Mortgage: Upon the Mortgagee being satisfied that the Secured Indebtedness has been unconditionally and irrevocably paid and discharged in full, and following a written request therefor from the Owner, the Mortgagee will, subject to being indemnified to their satisfaction for the costs and expenses incurred by the Mortgagee in connection therewith, release the security created by this Mortgage. | |
5. | REPRESENTATIONS AND WARRANTIES | |
5.1 | The Owner hereby represents and warrants to the Mortgagee that: |
(a) | it is a corporation duly organised and existing in good standing under the Laws of the Republic of Liberia; | ||
(b) | the Owner is the sole legal and beneficial owner of the whole of the Vessel and neither the whole nor any part of the Vessel is subject to any Security Interest (save as constituted by this Mortgage); | ||
(c) | the Owner has power to own the Vessel and register the Vessel under the laws and flag of the Republic of Liberia; and | ||
(d) | this Mortgage is in accordance with the provisions of the Laws of Liberia. |
6. | INSURANCES | |
6.1 | The Owner further covenants with the Mortgagee and undertakes throughout the Security Period: |
(a) | Insured risks, amounts and terms: to insure and keep the Vessel insured at the expense of the Owner against: fire and usual marine risks (including excess risks), war risks and protection and indemnity risks (without any exclusion for any Environmental Incident) as more specifically provided for in the Loan Agreement; and to indemnify the Mortgagee for any and all costs incurred by it (as conclusively certified by the Mortgagee) in effecting and keeping effected (i) a Mortgagees Interest Insurance which the Mortgagee may from time to time effect in respect of the Vessel upon such terms as it shall deem desirable and in an amount of not less than 110% of the Loan and (ii) (if the Mortgage so requires) a Mortgagees Interest Additional Perils (Pollution) insurance policy, which the Mortgagee may at any time effect on such terms, in an amount of not less than 110% of the Loan and with such insurers as shall from time to time be determined by the Mortgagee and any other insurance cover which the Mortgagee may from time to time effect in respect of the Vessel and/or in respect of its interest or |
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potential third party liability as mortgagee of the Vessel as it shall deem desirable having regard to any limitations in respect of amount or extent of cover which may from time to time be applicable to any of the insurances referred to in this Clause 6.1(a); |
(b) | Approved brokers, insurers and associations: to effect the Insurances aforesaid (i) in Dollars, (ii) in the case of the insurances against fire and usual marine risks and war risks in amounts not less than such sum which is equal to the greater of (aa) the Vessels full market value (determined pursuant to Sub-Clause 8.5(b) of the Loan Agreement) and (bb) 125% of the Loan, (iii) in the case of oil pollution liability risks currently included within the protection and indemnity risks in the maximum amount available in the International Group of Protection & Indemnity Clubs from time to time and without any exclusion of any Environmental Incident, (iv) and upon such terms as shall from time to time be approved in writing by the Mortgagee, (v) through such brokers (hereinafter, save as regards the brokers employed to effect the mortgagees interest insurance, called the Approved Brokers ) and with such insurance companies and/or underwriters as shall from time to time be approved in writing by the Mortgagee, provided that the Insurance in respect of war risks and protection and indemnity risks may be effected by entry of the Vessel, on terms approved by the Mortgagee in writing, in such war risks and protection and indemnity associations as shall from time to time be approved in writing by the Mortgagee and (vi) if so required by the Mortgagee (but without liability on the part of the Mortgagee for premiums or calls) naming the Mortgagee as co-assured; | ||
(c) | Fleet liens, set-off and cancellation: if any of the Insurances referred to in Clause 6.1(a) form part of a fleet cover, to procure that the approved brokers shall undertake to the Mortgagee that they shall neither set off against any claims in respect of the Vessel any premiums due in respect of other vessels under such fleet cover or any premiums due for other insurances, nor cancel the insurance for reason of non-payment of premiums for other vessels under such fleet cover or of premiums for such other insurances and shall undertake to issue a separate policy in respect of the Vessel if and when so requested by the Mortgagee; | ||
(d) | Renewal: at least fourteen (14) days before the expiry of any of the policies or contracts for the said insurances to notify the Mortgagee in writing of the identity of the brokers (or other insurers) and any protection and indemnity or war risks association through or with whom the Owner proposes to renew the said insurances and at least ten (10) days before the relevant policies or contracts expire to renew all such insurances and upon the renewal of the said insurances to procure that the approved brokers and/or the war risks and protection and indemnity associations, with which any such renewal is effected, shall promptly notify the Mortgagee in writing of the terms and conditions of such renewal; | ||
(e) | Payment of premiums and calls: punctually to pay all premiums calls contributions or other sums payable in respect of all such insurances and to produce all relevant receipts when so required by the Mortgagee; | ||
(f) | Guarantees: to arrange for the execution of such guarantees as may from time to time be required by any protection and indemnity or war risks association; | ||
(g) | Endorsement loss payable clauses: to procure that there are duly endorsed upon all slips cover notes policies certificates of entry or other instruments of insurance issued or to be issued in connection with the insurances aforesaid: the interest of |
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the Mortgagee by means of a Notice of Assignment (signed by the Assured) and/or a Loss Payable Clause providing that unless and until any of the events specified in Clause 9 hereof shall happen and the Mortgagee shall give notice thereof to the insurers (whereupon all insurance recoveries shall be receivable by the Mortgagee in accordance with Clause 10.1(c) hereof) there shall be paid to the Mortgagee any and every sum receivable in respect of a Total Loss and any and every sum receivable in respect of a Major Casualty and all other sums receivable in respect of the Insurances shall be paid to the Owner and a cancellation clause providing that the insurers undertake not to exercise any right of cancellation which they may have by reason of non-payment of premiums or calls when due without giving 14 days prior written notice of such cancellation to the Mortgagee and an opportunity of paying any such unpaid premium or call and a provision that the insurances will not be permitted to lapse or be materially modified without 14 days prior written notice being given to the Mortgagee; | |||
Provided However that unless and until any of the events specified in Clause 9 hereof shall happen (whereupon all insurance monies shall be applied in accordance with Clause 11 hereof) the insurance monies received by the Mortgagee in respect of any Major Casualty shall be paid over to the Assured upon the Assured furnishing evidence that all loss and damage resulting from the casualty has been properly made good and repaired and that all repair accounts and other liabilities whatsoever in connection with the casualty have been fully paid and discharged by the Assured; | |||
(h) | Hull policy documents, notices and brokers undertakings: to procure that all such instruments of insurance as are referred to in Clause 6.1(g) above shall be deposited with the approved brokers and/or insurance companies and that the approved brokers and/or insurance companies shall (if so required by the Mortgagee) furnish the Mortgagee with pro forma copies thereof and a letter or letters or undertaking in such form as may be required by the Mortgagee, such letter or letters to include undertakings by the approved brokers that: |
(i) | they will hold the said instruments of insurance, and the benefit of the insurances thereunder, to be the order of the Mortgagee in accordance with the terms of the loss payable clause referred to in Clause 6.1(g); and | ||
(ii) | they will endorse on each and every policy as and when the same is issued the loss payable clause and the notice of assignment referred to in Clause 6.1(g); and | ||
(iii) | they will advise immediately the Mortgagee of any material changes which may be made to the terms of the said insurances and notify the Mortgagee, not less than fourteen days prior to the expiry of the said insurance, in the event of their not having received notice of renewal instructions from the Owner and/or its agents and, in the event of their receiving instructions to renew, they will advise the Mortgagee promptly of the details thereof; and | ||
(iv) | they will not set off against any sum recoverable in respect of a claim against the Vessel under the said insurances any premiums or other amounts due to the approved brokers or any other person in respect of any other vessel nor cancel the said insurances by reason of non-payment of such premiums or other amounts; |
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(i) | P&I: to procure that the protection and indemnity and/or war risks associations wherein the Vessel is entered shall (if so required by the Mortgagee) furnish the Mortgagee with a letter or letters of undertaking in such form as may be required by the Mortgagee; | ||
(j) | Employment: not to employ the Vessel or suffer the Vessel to be employed otherwise than in conformity with the terms of the instruments of insurance aforesaid (including any warranties express or implied therein) without first obtaining the consent to such employment of the insurers and complying with such requirements as to extra premium or otherwise as the insurers may prescribe; | ||
(k) | Associations loss payable clauses, undertakings and certificates: to apply all such sums as are received by it in respect of the Insurances for the purpose of making good the loss and fully repairing all damage in respect whereof the insurance moneys shall have been received; | ||
(l) | Trading to USA: in the event of any trading of the Vessel to the United States of America and the Exclusive Economic Zone (as defined in the said Oil Pollution Act of 1990), to procure and maintain a Certificate of Financial Responsibility as required by the United States Oil Pollution Act of 1990 and make all such quarterly or other voyage declarations as may from time to time be required by the protection and indemnity risks association in order to maintain cover for trading to the United States of America and Exclusive-Economic Zone and promptly deliver to the Mortgagee copies of all such declarations; | ||
(m) | Warranties: to comply with all warranties contained in the instruments of insurance referred to in Clause 6.1(g) including, without limitation, warranties in relation to the classification of the Vessel; | ||
(n) | Independent report: to reimburse to the Mortgagee on demand any costs or expenses incurred by the Mortgagee in obtaining reports from time to time from an independent marine insurance broker as to the adequacy of the insurances effected or proposed to be effected by the Owner pursuant to this Clause 6.1(a) and procure that there is promptly delivered to such broker any and all such information in relation to the said insurances as such broker may require; | ||
(o) | Alterations: not to make any alteration in any of the terms of any of the instruments of insurance referred to in Clause 6.1(g) which have been approved by the Mortgagee and not to make, do, consent or agree to any act or omission which would or might render any such instrument of insurance invalid, void, voidable or unenforceable or render any sum payable thereunder repayable in whole or in part; | ||
(p) | Total Loss claims: not without the prior written consent of the Mortgagee to settle, compromise or abandon any claim under the said insurances for Total Loss or for a Major Casualty; | ||
(q) | Extent of cover and exclusions: to take all necessary action and comply with all requirements which may from time to time be applicable to the Insurances (including, without limitation, the making of all requisite declarations within any prescribed time limits and the payment of any additional premiums or calls) so as to ensure that the Insurances are not made subject to any exclusions or qualifications to which the Mortgagee has not given its prior written consent and are otherwise maintained on terms and conditions from time to time approved in writing by the Mortgagee; |
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(r) | Correspondence with brokers and associations: to provide to the Mortgagee, at the time of each such communication, copies of all written communications between the Owner and the Approved Brokers and approved war risks and protection and indemnity risks associations which relate to compliance with requirements from time to time applicable to the Insurances including, without limitation, all requisite declarations referred to in Clause 6.1(l); and | ||
(s) | Collection of claims: to do all things necessary and provide all documents, evidence and information to enable the Mortgagee to collect or recover any moneys which shall at any time become due in respect of the Insurances. |
6.2 | Review : The Mortgagee shall be entitled to review the requirements of Clause 6.1 from time to time in order to take account of changes in circumstances after the date of this Mortgage (such changes in circumstances to include, without limitation, changes in the vessels trading patterns, changes in applicable law and changes in the price and availability of insurance coverage). The Mortgagee may notify the Owner in writing from time to time of any modification to the requirements of Clause 6.1 which the Mortgagee shall specify and any such notification shall be binding on the Owner and shall take effect as an amendment to Clause 6.1. | |
7. | OWNERS COVENANTS IN RESPECT OF THE VESSEL | |
The Owner covenants with the Mortgagee in respect of the Vessel: | ||
7.1 | Vessels name and registration: Not to change the Vessels name and/or the Owners name and to arrange for the permanent registration of the Vessel under the Liberian flag within a period of no less than three (3) months from the date hereof and thereafter and thereafter to keep the Vessel permanently registered and matriculated as a Liberian flag Vessel at the Port of Monrovia by paying all fees and expenses and filing or producing to the Public Registry and the Shipping Bureau (and any other appropriate authorities) of the Republic of Liberia any and all such documents or things as may be required for such purpose to keep the Vessel registered and matriculated as a Liberian ship and to do or suffer to be done nothing whereby such registration may be forfeited or imperiled and to procure that no attempts will be made to abandon, delete or remove the Vessel from the said registry and/or enter the Vessel in a special registry pursuant to charterparty arrangements or otherwise and/or change the Vessels nationality without the consent of the Mortgagee and promptly furnish to the Mortgagee from time to time such proofs as the Mortgagee may request for its satisfaction with respect to the Owners compliance with the provisions of this Clause 7.1. | |
7.2 | Modification: Not without the previous written consent of the Mortgagee to make any modification of the Vessel which would involve material alterations of her structure type or performance characteristics or materially reduce the value of the Vessel. | |
7.3 | Maintenance of Class Compliance with Regulations Repairs Removal of Parts: To keep the Vessel or procure that the Vessel is kept, in a good and efficient state of repair so as to maintain the highest availability class with a classification society which is member of IACS acceptable in all respects by the Mortgagee and will continue at all times to maintain such classification (or equivalent) with any other first-class classification society which is a member of IACS and which is in all respects satisfactory to the Mortgagee, so as to comply with the provisions of all laws regulations and requirements (statutory or otherwise) from time to time applicable to vessels registered under the laws and flag of the Republic of Liberia and to procure that all repairs to or replacement of any damaged worn or lost parts or equipment be effected in such manner (both as regards workmanship and quality of materials) as not to diminish the value of the |
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Vessel and not to remove any material part of, or item of equipment installed on, the Vessel unless the part or item so removed is forthwith replaced by a suitable part or item which is in the same condition as or better condition than the part or item removed, is free from any Security Interest in favor of any person other than the Mortgagee and becomes on installation on the Vessel, the property of the Owner and subject to the security constituted by this Mortgage. |
7.4 | Surveys: To submit the Vessel or procure that the Vessel be submitted, regularly to such periodical or other surveys as may be required for classification purposes and if so required to supply to the Mortgagee copies of all survey reports issued in respect thereof. | |
7.5 | Inspection: To permit the Mortgagee by surveyors or other persons appointed by it in that behalf to board the Vessel at all reasonable times for the purpose of inspecting her condition or for the purpose of satisfying itself in regard to proposed or executed repairs and to afford all proper facilities for such inspection. | |
7.6 | Prevention of, and Release from, Arrest: To pay and discharge or procure the payment and discharge of all debts damages and liabilities whatsoever which have given or may give rise to maritime or possessory liens on or claims enforceable against the Vessel and in event of arrest of the Vessel pursuant to legal process or in event of her detention in exercise or purported exercise of any such lien as aforesaid to procure the release of the Vessel from such arrest or detention forthwith upon receiving notice thereof by providing bail or otherwise as the circumstances may require. | |
7.7 | Employment: Not to employ the Vessel or suffer her employment in any trade or business which is forbidden by International Law or is otherwise illicit or in carrying illicit or prohibited goods or in any manner whatsoever which may render her liable to condemnation in a Prize Court or to destruction seizure or confiscation and in event of hostilities in any part of the world (whether war be declared or not) not to employ the Vessel or suffer her employment in carrying any contraband goods or to enter or trade to or to continue to trade in any zone after it has been declared a war zone by any Government or by the Vessels war risks Insurers unless the Mortgagee shall have first given its consent thereto in writing and there shall have been effected by the Owner and at its expense such special insurance cover as the Mortgagee may require. | |
7.8 | Information: Promptly to furnish to the Mortgagee all such information as it may from time to time require regarding the Vessel her employment position and engagement particulars of all towages . | |
7.9 | Notification of Certain Events: To notify the Mortgagee forthwith by letter or in the case of urgency by telegram or telex of: |
(a) | any accident to the Vessel involving repairs the cost whereof will or is likely to exceed two hundred thousand United States Dollars (US$200,000) (or the equivalent in any other currency), and | ||
(b) | any occurrence in consequence whereof the Vessel has become or is likely to become a Total Loss, and | ||
(c) | any requirement or recommendation made by any insurer or classification society or by any competent authority which is not immediately complied with, and | ||
(d) | any arrest of the Vessel or the exercise or purported exercise of any lien on the Vessel or her Earnings, and |
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(e) | any petition or notice of meeting to consider any resolution to wind-up the Owner (or any event analogous thereto under the laws of the place of its incorporation); |
7.10 | Payment of Outgoings and Evidence of Payments: Promptly to pay or procure the payment of, all tolls due and other outgoings whatsoever in respect of the Vessel and to keep proper books of account in respect of the Vessel and her Earnings and as and when the Mortgagee may so require to make such books available for inspection on behalf of the Mortgagee and furnish satisfactory evidence that the wages and allotments and the insurance and pension contributions of the Master and crew are being regularly paid and that all deductions from crews wages in respect of any tax liability are being properly accounted for and that the Master has no claim for disbursements other than those incurred by him in the ordinary course of trading. | |
7.11 | Encumbrances : Not to mortgage charge or otherwise assign the Vessel nor her Insurances Earnings or Requisition Compensation or to suffer the creation of any such mortgage charge or assignment as aforesaid to or in favor of any person other than the Mortgagee. | |
7.12 | Sale or other Disposal: Not without the previous consent in writing of the Mortgagee (and then only subject to such terms as the Mortgagee may impose) to sell, agree to sell or otherwise dispose of the Vessel or any share therein. | |
7.13 | Repairers Liens: Not without the previous consent in writing of the Mortgagee to put the Vessel into the possession of any person for the purpose of work being done upon her in an amount exceeding or likely to exceed two hundred thousand dollars ($200,000) (or the equivalent in any other currency) unless such person shall first have given to the Mortgagee and in terms satisfactory to it a written undertaking not to exercise any lien on the Vessel or her Earnings for the cost of such work or otherwise. | |
7.14 | Maintenance and Protection of the Security: to pay to the Mortgagee on demand all moneys whatsoever which the Mortgagee shall or may expend be put to or become liable for in or about the protection maintenance or enforcement of the security created by this Mortgage or in or about the exercise by the Mortgagee of any the powers vested in it under the Security Documents and to pay interest thereon at the rate provided for Clause 3.1(c) hereof from the date whereon such expense or liability was incurred by the Mortgagee until the date of actual receipt (as well after as before any judgment). | |
7.15 | Sharing of Earnings: Not without the previous consent in writing of the Mortgagee to enter into any agreement or arrangement whereby the Earnings may be shared with any other person. | |
7.16 | Investigation, legal expenses, etc.: To pay on demand to the Mortgagee (or as it may direct) the amount of all investigation and legal expenses of any kind whatsoever stamp duties (if any) registration fees and any other charges incurred by the Mortgagee in connection with the preparation, completion and registration of the Security Documents or otherwise in connection with the Secured Indebtedness and the security therefor and to pay interest thereon at the rate prescribed in Clause 3.1(c) from the date whereon such expense or liability was incurred by the Mortgagee, until the date of payment whether before or after any relevant judgement. | |
7.17 | Manager: Not without the previous consent in writing of the Mortgagee (and then only on and subject to such terms and conditions as the Mortgagee from time to time may agree) to appoint a manager of the Vessel other than the Manager. |
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7.18 | Books of account: To keep proper books of account in respect of the Vessel and her Earnings and as and when the Mortgagee may so require make such books available for inspection on behalf of the Mortgagee and furnish satisfactory evidence that the wages and allotments and the insurance and pension contributions of the Master and crew are being regularly paid and that all deductions from crews wages in respect of tax and/or social security liability are being properly accounted for and that the Master has no claim for disbursements other than those incurred by him in the ordinary course of trading on the voyage then in progress. | |
7.19 | Compliance with Environmental laws Notification: The Owner further covenants with the Mortgagee that throughout the Security Period the Owner will: |
(a) | comply, or procure compliance with, all Environmental Laws and Environmental Approvals applicable to and relating to the Vessel, her operation or management and the business of the Owner from time to time; | ||
(b) | notify the Mortgagee forthwith upon: |
(i) | any Environmental Claim being or made against the Owner, the Manager or otherwise in connection with the Vessel; or | ||
(ii) | any Environmental Incident occurring. | ||
(iii) | and keep the Mortgagee promptly advised, in writing on such regular basis and in such detail as the Mortgagee shall require, of the Owners response to such Environmental Claim or Environmental Incident. |
and keep the Mortgagee promptly advised, in writing on such regular basis and in such detail as the Mortgagee shall require, of the Owners response to such Environmental Claim or Environmental Incident. |
7.20 | Compliance with the ISM Code: The Owner covenants to procure that any Operator will: |
(a) | comply with and ensure that the Vessel and any Operator always complies with the requirements of the ISM Code, including (but not limited to) the maintenance and renewal of valid certificates pursuant thereto throughout the Security Period; | ||
(b) | immediately inform the Mortgagee if there is any threatened or actual withdrawal of the Owners or any Operators or DOC or the SMC in respect of the Vessel; and | ||
(c) | promptly inform the Mortgagee upon the issue to the Owner or any Operator of a DOC and to the Vessel of an SMC or the receipt by the Owner or any Operator of notification that its application for the same has been realised; |
7.21 | Compliance with the ISPS Code: The Owner covenants to procure that the Owner or the Manager will: |
(a) | maintain at all times a valid and current ISSC respect of the Vessel issued under the ISPS Code; | ||
(b) | immediately notify the Mortgagee in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC in respect of the Vessel; and |
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(c) | procure full current compliance of the Vessel at all times with the ISPS Code. |
7.22 | Compliance with Liberian law etc. |
(a) | to cause this Mortgage to be recorded with the Deputy Commissioner for Maritime Affairs of the Republic of Liberia as prescribed by Chapter 3 of Title 21 of Liberian Code of Laws Revised and otherwise to comply with and satisfy all the requirements and formalities established by the said Liberian Code of Laws and any other pertinent legislation of the Republic of Liberia to perfect this Mortgage as a valid and enforceable first and preferred lien upon the Ship and to furnish to the Mortgagee from time to time such proofs as the Mortgagee may reasonably request for its satisfaction with respect to the Owners compliance with the provisions of this clause 7.21(a); and | ||
(b) | to comply, or procure compliance with all laws or official requirements relating to the Ship, its ownership, operation and management or to the business of the Owner; |
7.23 | Notice of Mortgage: At all times to carry on board the Vessel a duly certified copy of this Mortgage (which shall form a part of the Vessels documents) and to cause the same to be shown to any person having business with the Vessel which might create or imply any commitment or encumbrance whatsoever on the Vessel and to place and maintain in a conspicuous place in the navigation room and in the cabin of the Captain of the Vessel a printed notice in the following form: |
This Vessel is mortgaged by the Owner thereof ADVENTURE TWELVE S.A., of Liberia with a First Preferred Ship Mortgage to FBB-FIRST BUSINES BANK S.A. of Greece, under authority of Title 21 of Liberian Code of Laws Revised and other pertinent legislation and pursuant also to the terms of the said Mortgage, a certified copy of which is preserved with the Vessels papers. Therefore, neither the Owner nor any Charterer nor the Master of this Vessel nor any other person has any right power or authority to create, incur or permit to be imposed upon this Vessel any lien whatsoever other than liens commitments or encumbrances for crews wages and salvage. |
8. | PROTECTION OF SECURITY | |
8.1 | Mortgagees right to protect or maintain security: The Mortgagee shall without prejudice to its other rights and powers hereunder be entitled (but not bound) at any time and so often as may be necessary to take any such action as it may in its discretion think fit for the purpose of protecting the security created by this Mortgage and the other Security Documents (including, without limitation, such action as is referred to in Clause 8.2 and each and every expense or liability or loss so incurred by the Mortgagee in or about the protection of the security shall be repayable to it by the Owner on demand together with interest thereon at the rate provided for in Clause 3.1(c) hereof from the date whereon such expense or liability or loss was incurred by the Mortgagee until the date of actual receipt (as well after as before any judgement). | |
8.2 | Mortgagees right to insure, repair etc.: Without prejudice to the generality of the foregoing: |
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(a) | in every case that the provisions of Clause 6.1 hereof or any of them shall not be complied with the Mortgagee shall be at liberty to effect and hereafter to maintain all such insurances upon the Vessel as in its discretion it may think fit; | ||
(b) | in event that the provisions of Clause 7.4 and/or 7.5 hereof or any of them shall not be complied with the Mortgagee shall be at liberty to arrange for the carrying out of such repairs and/or surveys as it may deem expedient or necessary; | ||
(c) | in event that the provisions of Clause 7.6 hereof or any of them shall not be complied with the Mortgagee shall be at liberty to pay and discharge all such debts damages and liabilities as are therein mentioned and/or to take any such measures as it may deem expedient or necessary for the purpose of securing the release of the Vessel. |
9. | EVENTS OF DEFAULT | |
9.1 | Events of Default: In case anyone or more of the following events (herein termed Events of Default ) shall have happened and shall not have been remedied: |
(a) | if an Event of Default , as such term is defined in the Loan Agreement, shall have occurred and shall be continuing, including without limitation as to the generality of the foregoing, if default shall be made by any party other than the Mortgagee in the due and punctual payment of any amount due under the Loan Agreement and/or performance and observance of any of the term or covenants contained in the Loan Agreement or in any collateral securing the Secured Indebtedness; or | ||
(b) | if the Vessel shall be laid-up or shall become a Total Loss or suffers damage or is involved in an incident which in the reasonable opinion of the Mortgagee may result in the Vessel being subsequently determined to be a Total Loss and the insurance indemnity is not paid by the insurers to the Mortgagee under the General Assignment within a period of one hundred and eighty (180) days from the date of the occurrence of the Total Loss or the incident which may result in the Vessel being subsequently determined to be a Total Loss occurred, or if the Vessel is destroyed, abandoned, captured, confiscated or forfeited and the Owner shall fail to procure the release (where relevant) of the Vessel within a period of thirty (30) days thereafter; or | ||
(c) | if any charter, legally assigned to the Mortgagee, shall be for any reason whatsoever and by any of the parties thereto prematurely terminated or interrupted or otherwise cancelled or repudiated or frustrated and is not substituted within a reasonable time period by another charter party acceptable to the Mortgagee; or | ||
(d) | default shall be made in the due and punctual observance and performance of any of the provisions Clauses 6.1, 7.1, 7.6, 7.7, 7.11, 7.12, 7.13, 7.15, 7.17 and 7.18 hereof; or | ||
(e) | default by the Owner in the observance and performance of any other agreement under this Mortgage which shall remain unremedied for ten (10) days after written notice thereof shall have been given to the Owner by the Mortgagee. | ||
(f) | any other event or events (whether related or not) occurs (including, without limitation, a material (in the opinion of the Mortgagee) adverse change, from the position applicable as at the date of the Loan Agreement, in the business, affairs |
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or condition (financial or otherwise) of the Owner) (including any such change resulting from an Environmental Incident) the effect of which is, in the opinion of the Mortgagee, to impair, delay or prevent the due fulfillment by the Owner or of any of its obligations or undertakings contained in the Loan Agreement or any of other the Security Documents. |
(a) | to take possession of the Vessel (whether actually or constructively) and/or otherwise to take control of the Vessel, wherever the Vessel may be, without legal process and without any liability on the Mortgagee for any losses or damages incurred thereby and without having to render accounts to the Owner in connection therewith and the Owner shall forthwith upon being required to do so surrender possession and control of the Vessel to the Mortgagee at its own cost and expense whereupon (inter alia) the Master, officers and crew shall comply with the instructions given from time to time or on behalf of the Mortgagee; | ||
(b) | to require that all policies contracts and other records relating to the Insurances (including details of and correspondence concerning outstanding claims) be forthwith delivered to such adjusters and/or brokers and/or other insurers as the Mortgagee may nominate; | ||
(c) | to collect, recover, compromise and give a good discharge for any and all moneys or claims of moneys then outstanding or thereafter arising under the Insurances or any of them or in respect of the Earnings or any Requisition Compensation and to permit the brokers through whom collection or recovery is effected to charge the usual brokerage therefor; | ||
(d) | to take over or institute (if necessary using the name of the Owner) all such proceedings in connection of the Vessel, the Insurances, the Earnings or any Requisition Compensation as the Mortgagee in its absolute discretion thinks fit and to discharge compound release or compromise claims against the Owner in respect of the Vessel which have given or may give rise to any charge or lien on the Vessel or which are or may be enforceable by proceedings against the Vessel; |
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(e) | to sell the Vessel or any share therein (after twenty calendar days prior notice to the Owner and other mortgagees of record (if any) or such lesser period of notice (or no notice at all) as may be permitted under Liberian law from time to time) and with or without the benefit of any charterparty by public auction or private contract at such place and upon such terms as the Mortgagee in its absolute discretion may determine with power to postpone any such sale and without being answerable for any loss occasioned by such sale or resulting from postponement thereof and/or itself to purchase the Vessel at public auction and to set-off the purchase price against all or any part of the Secured Indebtedness; | ||
(f) | to manage, insure, maintain and repair the Vessel and to employ or lay up the Vessel in such manner and for such period as the Mortgagee in its absolute discretion deems expedient and for the purposes aforesaid the Mortgagee shall be entitled to do all acts and things incidental or conductive thereto and in particular to enter into such arrangements respecting the Vessel her insurance management maintenance repair classification and employment in all respects as if the Mortgagee was the Owner of the Vessel and without being responsible for any loss thereby incurred; | ||
(g) | to recover from the Owner on demand any such expenses, liabilities or losses as may be incurred by the Mortgagee in or about the exercise of the power vested in the Mortgagee under sub-clause (f) above with interest thereon at the rate provided for in Clause 3.1(c) hereof from the date when such expenses, liabilities or losses were incurred by the Mortgagee until the date of payment or judgement; and | ||
(h) | to recover from the Owner on demand all expenses payment and disbursements incurred by the Mortgagee in or about or incidental to the exercise by it of any of the powers aforesaid together with interest thereon at the rate provided for in Clause 3.1(c) hereof from the date when such expenses payments or disbursements were incurred by the Mortgagee until the date of actual receipt (as well after as before any judgement). | ||
(i) | to exercise all the rights and remedies in foreclosure and otherwise given to mortgagees by the provisions of Chapter 3 of Title 21 of Liberian Code of Laws Revised and all applicable laws of any other jurisdiction; |
10.2 | Right to discharge cargo etc.: The Mortgagee shall be entitled to do all acts and things incidental or conducive to the exercise of any of the rights, powers or remedies possessed by it as mortgagee of the Vessel (whether at law, under this Mortgage or otherwise) and in particular (but without prejudice to the generality of the foregoing), upon becoming entitled to exercise any of its powers under Clause 10.1, the Mortgagee shall be entitled to discharge any cargo on board the Vessel (whether the same shall belong to the Owner or any other person) and to enter into such other arrangements in respect of the Vessel, her insurances, management, maintenance, repair, classification and employment in all respects as if the Mortgagee was the owner of the Vessel, but without being responsible for any loss incurred as a result of the Mortgagee doing or omitting to do any such acts or things as aforesaid. | |
10.3 | No liability in respect of expenses etc.: Neither the Mortgagee nor its agents, managers, officers, employees, delegates and advisers shall be liable for any expense, claim, liability, loss, cost, damage or expense incurred or arising in connection with the exercise or purported exercise of any rights, powers and discretions under this Mortgage in the absence of gross negligence or wilful misconduct. |
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10.4 | No liability as mortgagee-in-possession: The Mortgagee shall not, by reason of the taking possession of the Vessel, be liable to account as mortgagee-in-possession in respect of all or any of the Mortgaged Property or for anything except actual receipts or be liable for any loss upon realisation or for any default or omission of any nature whatsoever in connection therewith for which a mortgagee-in-possession might be liable as such. | |
10.5 | Sale of Vessel: Upon any sale of the Vessel or any share therein by the Mortgagee pursuant to sub-clause 10.1(e) above the purchaser shall not be bound to see or enquire whether the Mortgagees power of sale has become exercisable in the manner herein provided and the sale shall be deemed to be within the power of the Mortgagee, notwithstanding the observance or not by the Mortgagee of the terms and conditions therefor which are set forth herein and the receipt of the Mortgagee for the purchase money shall effectively discharge the purchaser who shall not be concerned with the manner of application of the proceeds of sale or be in any way answerable therefor and the sale shall operate to divest the Owner of all rights, title and interest of any nature whatsoever in the Vessel and to bar any such interest of the Owner and all persons claiming through, by or under the Owner. | |
11. | APPLICATION OF MONIES | |
11.1 | General: All monies received by the Mortgagee: |
(a) | in respect of a sale of the Vessel or any share therein; | ||
(b) | in respect of recovery under the Insurances; | ||
(c) | in respect of Requisition Compensation; | ||
(d) | in respect of net profits arising out of the employment of the Vessel pursuant to Clause 10.1(f); and | ||
(e) | in respect of any other transaction or arrangement under Clause 10.1, |
shall be held by it upon trust in the first place to pay or retain all such payments disbursements expenses and losses whatsoever (together with interest payable thereon under Clause 3.1(c)) as may have been incurred by the Mortgagee in or about or incidental to the exercise by the Mortgagee of the powers specified or otherwise referred to in Clauses 8 and 10 hereof or any of them and the balance shall be applied in the following manner: | ||
FIRST : in or towards satisfaction of any amounts in respect of the balance of the Secured Indebtedness as are then accrued due and payable or are then due and payable by virtue of payment demanded, in such order of application as the Mortgagee shall think fit; | ||
SECOND : in retention of an amount equal to any part or parts of the Secured Indebtedness as is or are not then due and payable but which (in the sole and absolute opinion of the Mortgagee) will or may become due and payable in the future and, upon the same becoming due and payable, in or towards satisfaction thereof in the manner specified in Clause 11.3 of the Loan Agreement; | ||
THIRD : the surplus (if any) shall be paid to the Owner or to whomsoever else may be entitled thereto. |
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Provided always that in the event that such balance is insufficient to pay in full the whole of the Secured Indebtedness the Mortgagee shall be entitled to collect the shortfall from the Owner or any other person liable therefor. | ||
Notwithstanding the foregoing, the Mortgagee may, at its absolute discretion, apply such monies on its own books of account in any order or priority among paragraphs FIRST, SECOND and THIRD above without affecting the obligations of the Owner to the Mortgagee. |
12. | DELEGATION | |
12.1 | The Mortgagee shall be entitled at any time and as often as may be expedient to delegate by power of attorney or in any other manner to any person or persons all or any of the powers, authorities and discretions which are for the time being exercisable by the Mortgagee under this Mortgage (including the powers vested in it by virtue of Clause 14 hereof). Any such delegation may be made upon such terms and subject to such regulations as the Mortgagee may think fit. The Mortgagee shall not be in any way liable or responsible to the Owner for any loss or damage arising from any act, default, omission or misconduct on the part of any such delegate. | |
13. | INDEMNITIES | |
13.1 | General: The Owner will indemnify and save harmless the Mortgagee and each agent or attorney appointed under or pursuant to this Mortgage from and against any and all expenses, claims, liabilities, losses, taxes, costs, duties, fees and charges suffered, incurred or made by the Mortgagee or such agent or attorney: |
(a) | in the exercise or purported exercise of any rights, powers or discretions vested in them pursuant to this Mortgage; or | ||
(b) | in the preservation or enforcement of the Mortgagees rights under this Mortgage; or | ||
(c) | on the release of the Vessel or any share therein from the security created by this Mortgage, |
and the Mortgagee and each such agent or attorney may retain and pay all sums in respect of the same out of money received under the powers conferred by this Mortgage. All such amounts recoverable by the Mortgagee or such agent or attorney shall be recoverable on a full indemnity basis. | ||
13.2 | Currency indemnity: If any sum due from the Owner under or in connection with the Loan Agreement, this Mortgage or under any order or judgement given or made in relation to the Loan Agreement and this Mortgage (or either of them) has to be converted from the currency (the first currency) in which the same is payable under the Loan Agreement and this Mortgage (or either of them) or under such order or judgement into another currency (the second currency) for the purpose of (a) making or filing a claim or proof against the Owner, (b) obtaining an order or judgement in any court or other tribunal, or (c) enforcing any order or judgement given or made in relation to the Loan Agreement and this Mortgage (or either of them), the Owner shall indemnify and hold harmless the Mortgagee from and against any loss or damage suffered as a result of any discrepancy between (i) the rate of exchange used for such purpose to convert the sum in question from the first currency into the second currency and (ii) the rate or rates of exchange at which the Mortgagee may in the ordinary course of business purchase the |
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first currency with the second currency upon receipt of a sum paid to them in or towards satisfaction of any such order, judgement, claim or proof. |
13.3 | Continuation: The indemnity contained in this Clause 13 shall apply irrespective of any indulgence granted to the Owner from time to time and shall continue in full force and effect notwithstanding any payment in favour of the Mortgagee and any amount due from the Owner under this Clause 13 will be due as a separate debt and shall not be affected by judgement being obtained for any other sums due under or in respect of the Loan Agreement and this Mortgage (or either of them). | |
14. | POWER OF ATTORNEY | |
14.1 | Appointment: The Owner, by way of security and in order more fully to secure the performance of the Owners obligations under this Mortgage, HEREBY IRREVOCABLY APPOINTS (such appointment being coupled with an interest of the Mortgagee) the Mortgagee as its attorney for the duration of the Security Period for the purposes of: |
(a) | doing in its name all acts and executing, signing and (if required) registering in its name all documents which the Owner itself could do, execute, sign or register in relation to the Vessel (including without limitation, transferring title to the Vessel to a third party (after prior notice of at least 20 calendar days to the Owner) (or such lesser period of notice (or no notice at all) as may be permitted under Liberian law from time to time)) Provided however that such power shall not be exercisable by or on behalf of the Mortgagee until the Secured Indebtedness shall have become repayable on demand (whether or not such demand shall have been made) under Agreement and the security constituted by this Mortgage shall become enforceable pursuant to Clause 10 hereof; and | ||
(b) | executing, signing, perfecting, doing and (if required) registering every such further assurance document, act or thing as is referred to in Clause 15. |
14.2 | Exercise of power: The exercise of such power as is referred to in Clause 14.1 by or on behalf of the Mortgagee shall not put any person dealing with the Mortgagee upon any enquiry as to whether the Loan have become repayable on demand and/or by this Mortgage has become enforceable nor shall such person be in any way affected by notice that such security has not become repayable and/or this Mortgage has become enforceable and in relation to Clauses 14.1(a) and 14.1(b) the exercise by the Mortgagee of such power shall be conclusive evidence of its rights to exercise the same. | |
14.3 | Ratification of actions of attorney: For the avoidance of doubt and without limiting the generality of Clause 14.1, the Owner confirms that Clause 14.1 authorizes the Mortgagee to execute on its behalf a document ratifying any transaction or action which the Mortgagee has purported to enter into or to take and which the Mortgagee considers was or might have been outside its powers or otherwise invalid. | |
14.4 | Delegation. The Mortgagee may sub-delegate to any person or persons all or any of the powers (including the discretions) conferred on the Mortgagee by Clauses 14.1 and/or 14.2, and may do so on terms authorizing successive sub-delegations. | |
15. | FURTHER ASSURANCES | |
15.1 | The Owner hereby further undertakes at its own expense to execute sign perfect do and (if required) register every such further assurance document act or thing as in the opinion of the Mortgagee may be necessary or desirable for the purpose of more effectual mortgaging and charging the Vessel or perfecting the security constituted or intended to |
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be constituted by this Mortgage or contemplated by the Loan Agreement or ensuring that the security constituted by this Mortgage and the covenants and obligations of the Owner under this Mortgage shall inure to the benefit of any such assignee of the Mortgagee as is referred to in Clause 23.2. |
16. | EXPENSES | |
16.1 | The Owner covenants that it will pay to the Mortgagee (or as it may direct) on demand the amount of all investigation and legal fees, costs and expenses of any kind whatsoever (inclusive of value added tax thereon) stamp duties (if any) registration fees and any other charges and Taxes thereon incurred by the Mortgagee or for which the Mortgagee may become liable in connection with: (a) the negotiation, preparation, completion and (if required) registration of the Loan Agreement, this Mortgage and the other Security Documents and the preserving or enforcing of, or attempting to preserve or enforce, the security created by this Mortgage or otherwise in connection with the Secured Indebtedness and the security therefor; and (b) any variation of, or amendment or supplement to, any of the terms of, or any consent or waiver required from the Mortgagee in relation to, the Loan Agreement and the other Security Documents (or any of them), and in each case, regardless of whether the same is actually implemented, completed or granted as the case may be. | |
17. | MISCELLANEOUS | |
17.1 | Invalidity: If any provision in this Mortgage be or becomes invalid or unenforceable under any applicable law, the provisions thereof shall in all other respects remain in full force and effect and the provision in question shall be ineffective to the extent (but only to the extent) of its disconformity with the requirement of the applicable law and if it is competent to the parties to waive any requirements which would otherwise operate as aforesaid those requirements are hereby waived to the extent permitted by such law to the end that this Mortgage shall be valid binding and enforceable in accordance with its terms. | |
17.2 | Certificates conclusive: For the purposes of enforcement, the interest rate in respect of each Interest Period, the default interest rate, the occurrence of an Event of Default and in particular the failure of the Owner to pay any amount due when it was due and the amount at any time due from the Owner under the Loan Agreement and this Mortgage shall be proven by a certificate of the Mortgagee, which it is hereby agreed that it shall be conclusive and binding upon the Owner (save for manifest error). | |
18. | PREFERRED STATUS | |
18.1 | No provision in this Mortgage can be interpreted or construed as constituting a waiver of the preferred status of this Mortgage and particularly in respect to the lien created hereby in relation of the other liens under the laws of any applicable jurisdiction or forum anywhere world-wide. | |
19. | SUNDRY PROVISIONS | |
19.1 | The Loan Agreement, the form of which is attached hereto as Exhibit A, and all its terms, conditions, representations, covenants, etc. form an integral part of this First Preferred Ship Mortgage and in case of conflict or other discrepancy between the terms of the Loan Agreement and the other terms of this Mortgage contract the terms of the Loan Agreement shall have priority and prevail, Provided however, that the law applicable to this Mortgage shall be solely that of the Republic of Liberia. |
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19.2 | Conflict: No failure or delay on the part of the Mortgagee in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercises thereof or the exercise of any other right or power hereunder. No modification or waiver of any provision of the Loan Agreement nor consent to any departure therefrom by any party thereof shall in any event be effective unless the same shall be in writing and then such waiver or consent shall be effective only on the specific instances and for the purpose for which given. No notice to or demand on any such party in any such case shall entitle such party to any other or further notice or demand in similar or other circumstances. | |
20. | TOTAL AMOUNT AND MATURITY | |
20.1 | For the purpose of recording this First Preferred Mortgage as required by Chapter 3 of Title 21 of Liberian Code of Laws Revised, the total amount is United States Dollars twenty seven million seven hundred and fifty thousand (US$27,750,000) plus interest on the Loan and default interest, indemnities, damages, costs, commissions, expenses and expenses of the Mortgagee and interest thereon and performance of the Loan Agreement and Mortgage covenants. The date of maturity in respect of the Loan is the 16 th December, 2016 and the discharge amount is the same as the total amount. | |
21. | COUNTERPARTS | |
21.1 | This Mortgage may be executed in any number of counterparts each of which shall be an original but such counterparts shall together constitute but one and the same instrument. | |
22. | NOTICES AND COMMUNICATIONS | |
22.1 | The provisions of Clause 15.1 of the Loan Agreement shall (mutatis mutandis) apply in relation to any notice, demand or other communication under this Mortgage. | |
23. | ASSIGNMENTS | |
23.1 | Benefit: This Mortgage shall be binding upon and shall enure to the benefit of the Owner and the Mortgagee and their respective successors and permitted assigns and references in this Mortgage shall be construed accordingly, provided that the Owner may not assign or transfer all or any part of its rights and/or obligations under this Mortgage. | |
23.2 | Right to assign: The Mortgagee may assign or transfer all or any part of its respective rights or obligations under this Mortgage to any other bank or financial institution of all or a similar proportion of its respective rights and/or obligations under the Loan Agreement without the consent of the Owner. The Mortgagee shall notify the Owner promptly following any such assignment or transfer and the cost of any such assignment shall be borne by the Mortgagee. | |
24. | APPLICABLE LAW AND JURISDICTION | |
24.1 | Applicable law: This Mortgage shall be governed by and construed according to the laws of the Republic of Liberia. | |
24.2 | (a) Choice of forum: The Owner hereby irrevocably and unconditionally submits to the non exclusive jurisdiction of the Courts of Piraeus and waives any objection to proceedings with respect to this Mortgage in such Courts on the grounds of venue or convenience forum, and further the Owner hereby appoints Mr. Ioannis Fassolis, an Attorney-at-Law, whose present address is at 15 Sachtouri Street, 185 36, Piraeus, Greece (herein called the Process Agent ) as agent to accept service upon whom any judicial or extrajudicial process may be served (including but |
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without limitation any documents initiating legal proceedings) and any notice, request, demand payment order, announcement of claim, any enforcement process or other communication under this Mortgage. In the event that the Process Agent (or any substitute process agent notified to the Mortgagee in accordance with the foregoing) cannot be found at the address specified above (or, as the case may be, notified to the Mortgagee), which will be conclusively proved by the affidavit of a process server to that effect, the authority of the Process Agent as agent to accept service shall be deemed to have ceased and service of documents may be effected in accordance with the procedure provided by the relevant provisions on service of process provided by the Hellenic Procedural Code. In case, however, that such Process Agent is found at any other address, the Mortgagee shall have the right to serve the documents either on the Process Agent at such address or in accordance with the procedure provided by the relevant law. | |||
(b) | Mortgagees rights unaffected : Nothing in this Clause shall affect the Mortgagees right to serve process in any other manner permitted by law or limit the right of the Mortgagee to take proceedings with respect to this Mortgage in any jurisdiction (including, without limitation, any jurisdiction where the Vessel may be located) nor shall the taking of proceedings with respect to this Mortgage in any jurisdiction preclude the Mortgagee from taking proceedings in any other jurisdiction or jurisdictions, whether concurrently or not. | ||
(c) | Proceedings in any other country : If it is decided by the Mortgagee that any such proceedings should be commenced in any other country, then any objections as to the jurisdiction or any claim as to the inconvenience of the forum are hereby waived by the Owner and it is agreed and undertaken by the Owner to instruct lawyers in that country to accept service of legal process and not to contest the validity of such proceedings as far as the jurisdiction of the court or courts involved is concerned. |
24.3 | Action against Ship: Without prejudice to the generality of Clause 24.2, the Mortgagee shall have the right to arrest and take action against the Vessel at whatever place the Vessel shall be found lying and for the purpose of any action which the Mortgagee may bring before the Courts of such jurisdiction or other judicial authority and for the purpose of any action which the Mortgagee may bring against the Vessel, any writ, notice, judgement or other legal process or documents may (without prejudice to any other method of service under applicable law) be served upon the Master of the Vessel (or upon anyone acting as her Master) and such service shall be deemed good service on the Owner for all purposes. | |
24.4 | Benefit of this Mortgage: All of the covenants, promises, stipulations and agreements of the Owner in this Mortgage contained shall bind the Owner and its successors and assigns and shall inure to the benefit of the Mortgagee and its successors and assigns. In the event of any assignment of this Mortgage, the term Mortgagee, as used in this Mortgage, shall be deemed to mean any such assignee. | |
24.5 | Mortgagees actions: Wherever and whenever herein any right, power or authority is granted or given to the Mortgagee, such right, power or authority may be exercised in all cases by the Mortgagee or such agent or agents as it may appoint, and the act or acts of such agent or agents when taken shall constitute the act of the Mortgagee hereunder. |
SIGNED BY Mr Ioannis Fassolis
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) | |
for and on behalf of
|
) | |
ADVENTURE TWELVE S.A.
|
) /s/ Ioannis Fassolis | |
of Liberia, as its duly authorised
|
) | |
Attorney-in-fact
|
) | |
in the presence of:
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) |
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CITY OF PIRAEUS
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) | |
|
-:s: | |
REPUBLIC OF GREECE
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) |
28
By: | /s/ Nikolaos Vougioukas | |||
Name: | Nikolaos Vougioukas | |||
Title: | Attorney-in-fact |
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CLAUSE | HEADINGS | PAGE | ||||
1.
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DEFINITIONS AND INTERPRETATION | 2 | ||||
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2.
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PAYMENT COVENANTS | 7 | ||||
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3.
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MORTGAGE | 9 | ||||
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4.
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PRESERVATION OF THE SECURITY - REMEDIES CUMULATIVE | 9 | ||||
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5.
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INSURANCES | 11 | ||||
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6.
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OWNERS COVENANTS IN RESPECT OF THE SHIP | 12 | ||||
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7.
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PROTECTION OF THE SECURITY | 17 | ||||
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8.
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EVENTS OF DEFAULT | 18 | ||||
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9.
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ENFORCEABILITY AND POWERS OF THE MORTGAGEE | 21 | ||||
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10.
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APPLICATION OF MONIES | 24 | ||||
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11.
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DELEGATION | 25 | ||||
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12.
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INDEMNITIES | 25 | ||||
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13.
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POWER OF ATTORNEY | 26 | ||||
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14.
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FURTHER ASSURANCES | 26 | ||||
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15.
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EXPENSES | 27 | ||||
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16.
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NOTICES | 27 | ||||
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17.
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ASSIGNMENT | 27 | ||||
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18.
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REPRESENTATIONS AND WARRANTIES | 27 | ||||
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19.
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MISCELLANEOUS | 28 | ||||
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20.
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LAW AND JURISDICTION | 28 |
(1) | ADVENTURE NINE S.A., a corporation incorporated and validly existing under the laws of the Republic of the Marshall Islands and having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 (hereinafter called the Owner ) (which expression shall include its successors and permitted assigns) and | |
(2) | FBB-FIRST BUSINESS BANK S.A. , a bank incorporated in the Republic of Greece with its head office at 91 Michalakopoulou Street, 11528 Athens, Greece, acting except otherwise herein provided, through its office at 62, Notara and Sotiros Dios streets, 185 35 Piraeus, Greece (hereinafter called the Mortgagee which expression shall include its successors and assigns). |
(A) | The Owner is the absolute and unencumbered legal and beneficial owner of the sixty-four sixty-fourth shares of and in the motor vessel FREE IMPALA built by Shanghai Shipyard, in 1997, lawfully and permanently registered under Bahamas flag in the Ships Register of the Port of Nassau and having Official No. 8000947 , Call Sign C6UF9 , IMO No.: 9138680 , of 15888 gross tonnage and 8036 net tonnage, propelled by a diesel internal combustion engine of 6074 KW, together with all her boats, engines, machinery tackle outfit spare gear fuel consumable and other stores belongings and appurtenances whether on board or ashore and whether now owned or hereafter acquired and all the additions, improvements and replacements in or on the above described ship (the said Ship together with all aforesaid is hereinafter called the Ship ). | |
(B) | By a Loan Agreement dated 15 th December, 2009 (hereinafter as the same may from time to time be amended and/or supplemented called the Loan Agreement ) entered into between (A) the Mortgagee, as lender and (B) the following companies including the Owner, as joint and several co-borrowers and co-debtors, i.e. ADVENTURE NINE S.A., of Marshall Islands and ADVENTURE TWELVE S.A., of Liberia (therein collectively referred to as the Borrowers ), the Bank agreed, inter alia, to make available to the Borrowers on a joint and several basis and upon the terms and conditions therein contained a secured term loan in the amount of up to United States Dollars twenty seven million seven hundred and fifty thousand (US$27,750,000) (the Loan ) for the purposes referred to therein. | |
(C) | It is a condition precedent for the Mortgagee to advance the Loan to the Borrowers and to maintain the Loan available to the Borrowers throughout the Security Period subject to the terms of the Loan Agreement that the Owner as security for, inter alia, its obligations under the said Loan Agreement shall execute, deliver and register a first priority Statutory Mortgage in favour of the Mortgagee over sixty-four sixty-fourth shares in the Ship and shall enter into a Deed of Covenant supplemental thereto in the form of this Deed and the |
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Owner has agreed to execute the said Statutory Mortgage and this Deed in favour of the Mortgagee in consideration of the foregoing. | ||
(D) | There has contemporaneously with the execution of this Deed, been executed and delivered by the Owner to the Mortgagee the said Statutory Mortgage in account current form constituting a first mortgage of sixty-four sixty-fourth shares in the Ship. | |
(E) | This Deed is supplemental to the said Loan Agreement and the Statutory Mortgage aforesaid and to the security thereby created. |
1. | DEFINITIONS AND INTERPRETATION |
1.1 | In this Deed unless the context otherwise requires, the following expressions shall have the following meaning: | |
Account Current means, as used in this Deed and in the Mortgage, an account which shall be kept by the Owner with the Mortgagee and to which the Mortgagee, shall (without demand or notice) debit the whole of the Secured indebtedness) and shall be deemed to include any and all accounts whatsoever now or from time to time kept by the Owner with the Mortgagee; | ||
DOC means a document of compliance issued to an Operator in accordance with rule 13 of the ISM Code; | ||
Dollars (and the sign $ ) means the legal currency, at any relevant time hereunder, of the United States of America; | ||
Earnings means all moneys whatsoever due or to become due to the Owner at any time during the Security Period arising out of the use or operation of the Ship including (but without prejudice to the generality of the foregoing) all freight hire and passage moneys, income arising under pooling arrangements, compensation payable to the Owner in event of requisition of the Ship for hire remuneration for salvage and towage services, demurrage and detention moneys, contribution of any nature whatsoever in respect of general average and damages for breach (or payments for variation or termination) of any charter or contract of affreightment or other contract for the employment of the Ship; Provided, that if and so long as the Ship may be used for the purpose of any pooling arrangement or joint venture between the Owner and any other person or persons (the terms of which pooling arrangement or joint venture shall be subject to the prior written approval of the Mortgagee), the term Earnings shall be construed for the period during which the Ship is used for such purpose as meaning that proportion of the net revenue from the relevant pooling or joint venture agreement or agreements as is attributed to the Ship; | ||
Environmental Approvals means any consent, authorisation, licence or approval of any governmental or public body or authorities or courts applicable to the Ship or her operation or the carriage of cargo and/or passengers thereon and/or provisions of goods and/or services on the Ship required under any Environmental Law; | ||
Environmental Claim means (i) any claim by, or directive from, any applicable governmental, judicial or other regulatory authority alleging breach of, or non- |
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compliance with, any Environmental Laws or Environmental Approvals or otherwise howsoever relating to or arising out of an Environmental Incident or (ii) any claim by any other third party howsoever relating to or arising out of an Environmental Incident (and, in each such case, claim shall mean a claim for damages, clean-up costs, compliance, remedial action or otherwise); | ||
Environmental Incident means (i) any release of Material of Environmental Concern from the Ship, (ii) any incident in which Material of Environmental Concern is released from a vessel other than the Ship and which involves collision between the Ship and such other vessel or some other incident of navigation or operation, in either case, where the Ship, the Owner or the Manager are at fault or otherwise liable (in whole or in part) or (iii) any incident in which Material of Environmental Concern is released from a vessel other than the Ship and where the Ship is liable to be arrested as a result and/or where the Owner or the Manager are at fault or otherwise liable; | ||
Environmental Laws means all laws, regulations, conventions and agreements whatsoever relating to pollution or protection of the environment (including, without limitation, the United States Oil Pollution Act of 1990 and any comparable laws of the individual States of the United States of America) which are from time to time and at any relevant time applicable to the Ship; | ||
Events of Default means any of the events or circumstances described in Clauses 8.1 to 8.8 (incl.) hereof; | ||
Expenses means the aggregate at any relevant time (to the extent that the same have not been received or recovered by the Mortgagee or any Receiver) of: |
(a) | all losses, liabilities, costs, charges, expenses, damages and outgoings of whatever nature (including, without limitation, Taxes, repair costs, registration fees and insurance premiums) suffered, incurred or paid by the Mortgagee or any Receiver in connection with the exercise of powers referred to in or granted by the Mortgage or this Deed or otherwise payable by the Owner in accordance with Clause 8 and Clause 12; and | ||
(b) | interest on all such losses, liabilities, costs charges, expenses, damages and outgoings from the date on which the same were suffered, incurred or paid by the Mortgagee or any Receiver until the date of receipt or recovery thereof (whether before or after judgement) at a rate per annum calculated in accordance with Clause 2.3 hereof (as conclusively certified by the Mortgagee or such Receiver, as the case may be); |
General Assignment means the Deed of Assignment bearing even date herewith whereby the Owner has assigned to the Mortgagee the Earnings, the Insurances and any Requisition Compensation of the Ship, as the same may from time to time thereafter be supplemented and/or amended; | ||
Insurances means all policies and contracts of insurance (which expression includes all entries of the Ship in a protection and indemnity or war risks association) which are from time to time taken out or entered into in respect of the Ship and her Earnings or otherwise howsoever in connection with the Ship; |
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ISM Code means the International Safety Management Code for the Safe Operating of Ships and for Pollution Prevention constituted pursuant to Resolution A.741 (18) of the International Maritime Organisation and incorporated into the Safety of Life at Sea Convention and includes any amendments or extensions thereto and any regulation issued pursuant thereto; | ||
ISPS Code means the International Ship and Port Security Code of the International Maritime Organization and includes any amendments or extensions thereto and any regulation issued pursuant thereto; |
LIBOR means in relation to any amount and for any period: |
(a) | the offered rate (if any) per annum for deposits in Dollars for such amount and for such period which is the rate, for such period, appearing on the relevant page of the Reuters Screen LIBOR01 at or about 11 a.m. London time on the Quotation Date (or, if the Mortgagee shall have made a determination pursuant to Clause 3.6 such later time (not being later than 1 p.m. (London time) on the first day of such period) as the Mortgagee may determine) (and, for the purposes of this Agreement, Reuters Screen LIBOR01 means the display designated as LIBOR01 on the Reuters Service or such other page as may replace LIBOR01 on that service for the purpose of displaying rates comparable to that rate or on such other service as may be nominated by the British Bankers Association as the information vendor for the purpose of displaying the British Bankers Association Interest Settlement Rates for Dollars); and | ||
(b) | if on such date no such rate is so displayed, LIBOR for such period shall be the rate determined by the Mortgagee in accordance with its usual practices to obtain similar deposit(s) in Dollars on the basis of the rates quoted by the Mortgagee as the Mortgagees offered rate for 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 11:00 a.m. (London time) on the second Banking Day before the first day of such period; |
Loan means the principal amount of Dollars twenty seven million seven hundred and fifty thousand ($27,750,000) advanced or to be advanced by the Mortgagee to the Borrowers or, as the context may require, the principal amount thereof outstanding at any relevant time under the Loan Agreement; | ||
Loan Agreement means the Loan Agreement mentioned in Recital (B) hereto as the same may from time to time be amended or supplemented; | ||
Major casualty means any casualty to the Ship in respect whereof the claim or the aggregate of the claims against all insurers, before adjustment for any relevant franchise or deductible, exceeds Dollars two hundred thousand ($200,000) or the equivalent thereof in any other currency; | ||
Material of Environmental Concern means and includes oil, oil products, pollutants, contaminants, toxic substances, as defined in the United States Oil Pollution Act of 1990 |
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and all hazardous substances as defined in the United States Comprehensive Environmental Response, Compensation and Liability Act 1988; | ||
Mortgage means the statutory mortgage mentioned in Recital (D) hereto; | ||
Mortgagee includes its successors in title and assignees; | ||
Mortgaged Property means: |
(a) | the Ship; | ||
(b) | the Insurances and all benefits thereof (including claims of whatsoever nature and return of premiums); | ||
(c) | the Earnings; | ||
(d) | Requisition Compensation; |
Operator means any person who is from time to time during the Security Period concerned in the operation of the Ship and falls within the definition of Company set out in rule 1.1.2. of the ISM Code; |
person includes any body of persons corporate or unincorporate; | ||
Receiver means any receiver and/or manager appointed pursuant to Clause 8.2; | ||
Requisition Compensation means all moneys or other compensation payable during the Security Period by reason of requisition for title or other compulsory acquisition of the Ship otherwise than by requisition for hire; | ||
Secured indebtedness means the aggregate of (a) the Loan and interest thereon (and interest on any unpaid interest thereon and on any other sums of money on which interest is stated in the Loan Agreement to be payable), (b) all such expenses, claims, liabilities, losses, costs, duties, fees, charges or other moneys as are stated in this Deed to be payable by the Owner to or recoverable from the Owner by the Mortgagee or any Receiver (or in respect of which the Owner agrees in this Deed to indemnify the Mortgagee or any Receiver) whether actually or contingently, presently or in the future together with interest thereon as provided in the Loan Agreement and this Deed and (c) all other sums of money from time to time owing to the Mortgagee under the Security Documents or any of them whether actually or contingently, presently or in the future; | ||
Security Documents means the Loan Agreement, this Deed, the Mortgage, the General Assignment and any other such document as may have been or may hereafter be executed by any person as security for or as guarantee of the Secured Indebtedness or any part thereof as the same may hereafter be supplemented and/or amended and any such other document as is defined in the Loan Agreement as a Security Document; | ||
Encumbrance means any mortgage, charge (whether fixed or floating), pledge, lien, hypothecation, assignment, security interest, title retention, arrest, seizure, garnishee order (whether nisi or absolute) or any other order or judgement having similar effect or other encumbrance of any kind securing or any right conferring a priority of payment in respect of any obligation of any person; |
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Security Period means the period commencing on the date hereof and terminating upon discharge of the security created by the Security Documents by payment of all moneys payable thereunder; | ||
Security Parties means the Owner and any other party (other than the Mortgagee) to any of the Security Documents or any such person as is defined in the Loan Agreement as a Security Party and in singular means any of them; | ||
Ship means the motor vessel FREE IMPALA described above in Recital (A) hereto; | ||
Total Loss means: |
(a) | actual or constructive or compromised or arranged total loss of the Ship; or | ||
(b) | requisition for title or other compulsory acquisition of the Ship otherwise than by requisition for hire; | ||
(c) | capture, seizure, arrest, detention or confiscation of the Ship by any government or by persons acting or purporting to act on behalf of any government unless the Ship be released from such seizure capture arrest or detention within one month after the occurrence thereof. |
1.2 | In Clause 5.1 hereof: |
(a) | excess risks means the proportion of claims for general average, salvage and salvage charges not recoverable under the hull and machinery policies in respect of the Ship in consequence of her insured value being less than the value at which the Ship is assessed for the purpose of such claims; | ||
(b) | protection and indemnity risks means the usual risks (including oil pollution and freight, demurrage and defence cover) covered by a protection and indemnity association which is a member of the International Group of P+I Clubs (including, without limitation, the proportion (if any) of any sums payable to any other person or persons in case of collision which are not recoverable under the hull and machinery policies by reason of the incorporation therein of Clause 1 of the Institute Time Clauses (Hulls) (1/10/83) or the Institute Amended Running Down Clause (1/10/71) or (with respect to insurances commencing on or after (1/11/95)) the Institute Time Clauses (1/11/95) which may be insured by entry with such association or any equivalent provision); and | ||
(c) | war risks includes the risk of war protection and indemnity, mines, terrorism, blocking and trapping, missing vessel, confiscation and all risks excluded by Clause 24 of the Institute Time Clauses (Hulls) (1/11/95). |
1.3 | This Deed shall be read together with the Loan Agreement and the other Security Documents, but in case of any conflict between the Loan Agreement and this Deed the provisions of the Loan Agreement shall prevail. |
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1.4 | Notwithstanding that this Deed is supplemental to the Loan Agreement and the Mortgage it shall continue in full force and effect after any discharge of the Mortgage until full repayment of the Secured Indebtedness. |
1.5 | In this Deed: |
(a) | Clause headings are inserted for convenience only and shall not affect the construction of this Deed and, unless otherwise specified, all references to Clauses are to clauses of this Deed; | ||
(b) | unless the context otherwise requires, words denoting the singular number shall include the plural and vice versa; | ||
(c) | references to: |
(i) | persons include bodies corporate and unincorporate; | ||
(ii) | assets include property, rights and assets of every description; | ||
(iii) | any document are to be construed as references to such document as amended or supplemented from time to time; | ||
(iv) | any enactment include re-enactments, amendments and extensions thereof; and | ||
(v) | interest means interest covenanted to be paid in accordance with Clauses 2, 6.15, 6.17, 7.1 and 8.1(g) and (h) hereof. |
(d) | the expression all sums for the time being owing to the Mortgagee means the whole of the Secured Indebtedness. |
1.6 | Any expressions which are not defined herein shall have the meanings respectively assigned to them in Clause 1.2 of the Loan Agreement. |
2. | PAYMENT COVENANTS | |
2.1 | In consideration of the agreement of the Mortgagee to make available the Loan to the Borrowers and to maintain available the Loan to the Borrowers throughout the Security Period in accordance with the provisions of and subject to the terms and conditions of the Loan Agreement, the Owner hereby covenants with the Mortgagee to repay the Loan by (a) twenty eight (28) consecutive quarterly repayment instalments (the Repayment Instalments ), each to be repaid on each of the Repayment Dates so that the first be repaid three (3) months from the Drawdown Date and each of the subsequent ones consecutively falling due for payment on each of the dates falling three (3) months after the immediately preceding Repayment Date with the last of such Repayment Instalments falling due for payment on the Final Maturity Date and (b) a balloon instalment of Dollars five million six hundred fifty thousand ($5,650,000) (the Balloon Instalment ) falling due for payment together with the last (28 th ) Repayment Instalment on the Final Maturity Date; subject to the provisions of the Loan Agreement, each Repayment Instalment shall be in amounts as follows: |
(i) | 1 st to 4 th (both inclusive) of such Repayment Instalments shall be in the amount of Dollars five hundred thousand ($500,000) each; and |
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(ii) | 5 th to 28 th (both inclusive) of such Repayment Instalments shall be in the amount of Dollars eight hundred and thirty seven thousand five hundred ($837,500) each; |
Provided that (a) if the last Repayment Date would otherwise fall after the Final Maturity Date, the last Repayment Date shall be the Final Maturity Date, (b) in the event that the Commitment is not drawn down in full, the amount of each of the Repayment Instalments and the Balloon Instalment shall be proportionally reduced, (c) there shall be no Repayment Dates after the Final Maturity Date and (d) on the Final Maturity Date the Borrowers shall also pay to the Mortgagee any and all other moneys then due and payable under this Agreement and the other Security Documents. | ||
The Owner shall be entitled to prepay the Loan in whole or in part, subject to and in accordance with Clause 4.2 of the Loan Agreement and the Loan or any part thereof may become repayable or prepayable in accordance with Clauses 3.6, 4.3, 9.9, 12.1 and 12.2 of the Loan Agreement. | ||
2.2 | The Owner will pay in accordance with Clause 3.1 of the Loan Agreement to the Mortgagee interest on the Loan calculated on the actual number of days elapsed and on the basis of a 360 day year for each Interest Period relative thereto at the annual rate of interest which is conclusively certified by the Mortgagee to be the aggregate of (i) on three percentage points (3%) (the Margin ) and (ii) LIBOR. Such interest shall be paid in arrears on the last day of each Interest Period, provided that, in the case of an Interest Period during which one or more Repayment Date(s) fall(s), interest accruing during such Interest Period shall be payable on each such Repayment Date and on the last day of such Interest Period; | |
Provided however , that the rate of interest for the Loan or the method of computation thereof may be varied in accordance with Clause 3.6 of the Loan Agreement; and | ||
Provided always, that the actual method of calculating the Interest Rate payable in respect of the Loan or any part thereof and the dates for the payment thereof shall be governed by the relevant provisions of the Loan Agreement. | ||
2.3 | In the event of any delay by the Borrowers in the payment on the due date of any sum due under the Loan Agreement or any of the Security Documents the Owner shall, without affecting any other remedy of the Mortgagee, pay interest on all sums overdue from the due date therefor to the date of actual payment (as well as after as before judgement) at the interest rate per annum determined by the Mortgagee pursuant to Clause 3.4 of the Loan Agreement. The period beginning on such due date and ending on such date of payment shall be divided into successive periods of not more than six (6) months as selected by the Mortgagee each of which (other than the first, which shall commence on such due date) shall commence on the last day of the preceding such period. The rate of interest applicable to each such period shall be the aggregate (as determined by the Mortgagee) of (i) two per cent (2%) per annum, (ii) the Margin and (iii) LIBOR. Such interest shall be due and payable on the last day of each such period as determined by the Mortgagee and each such day shall, for the purposes of the Loan Agreement and this Deed, be treated as an Interest Payment Date. In case that a payment is made in default for any amount, the Interest Periods will be determined by the Mortgagee at its discretion including the amounts for which there is no default, even if the Mortgagee has not (yet) exercised its rights pursuant to Clause 9.9 (b) of the Loan Agreement. If for the reasons specified in Clause 3.6 of the Loan Agreement, the Mortgagee is unable to determine a rate in accordance with the foregoing provisions of this Clause 2.3, interest on any sum |
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not paid on its due date for payment shall be calculated at a rate determined by the Mortgagee to be two per cent (2%) per annum above the aggregate of the Margin and costs of funds to the Mortgagee as conclusively determined by the Mortgagee save for manifest error. Interest payable by the Owner as aforesaid shall be compounded semi-annually and shall be payable on demand. | ||
Provided always that the actual method of calculating the Interest Rate in respect of any sum or sums overdue and the dates for the payment thereof shall be governed by the relevant provisions of the Loan Agreement. | ||
2.4 | The Owner will pay interest at a rate calculated in accordance with Clause 2.3 hereof (as if the moneys payable hereunder were amounts payable under the Loan Agreement) on any moneys which are by this Deed expressed to be payable on demand and which be not paid when demanded from the date of demand until payment (before or after any relevant judgement) Provided however, that this provision shall not affect the right of the Mortgagee to receive interest calculated at the rate herein prescribed from such date prior to demand being made as is provided for by Clauses 6.15 and 6.17, 7.1 and 8.1(g) and (h) hereof in relation to the matters therein referred to. | |
2.5 | The Owner will pay to and/or indemnify the Mortgagee for such additional amounts as may be necessary in order that all payments under this Deed after deduction of for or on account of every present or future tax assessment or governmental charge imposed by any competent authority in any country to the revenue laws of which the Owner may for the time being be subject shall be no less than such payments would have been had thereto been no such tax assessment or charge. | |
2.6 | The Owner will pay all such Expenses or other moneys as are stated in this Deed to be payable by the Owner to or recoverable from the Owner by the Mortgagee (or in respect of which the Owner agrees in this Deed to indemnify the Mortgagee) at the time and in the manner specified in this Deed. | |
2.7 | The Owner will pay interest on any such Expenses or other moneys referred to in Clause 2.6 from the date on which the relevant expense, liability, loss, costs, duty, fee, charge or other money is paid or incurred by the Mortgagee (both before and after any relevant judgement) at the rate described in Clause 2.3, such interest to be payable on demand. | |
3. | MORTGAGE | |
In pursuance of the Loan Agreement, in consideration of the premises and by way of security for payment of the Secured Indebtedness THE OWNER WITH FULL TITLE GUARANTEE HEREBY MORTGAGES AND CHARGES to and in favour of the Mortgagee all its interest present and future in the Mortgaged Property and without prejudice to the generality of the foregoing HEREBY ASSIGNS AND AGREES to assign to the Mortgagee the Earnings the Insurances and all benefits thereof and any Requisition Compensation, PROVIDED HOWEVER that as to the payment and/or receipt and/or the application of any amount payable to and/or received by the Mortgagee in respect of the Earnings and/or the Insurances or any Requisition Compensation as well as any other matter relevant thereto the provisions of the General Assignment shall apply. | ||
4. | PRESERVATION OF THE SECURITY REMEDIES CUMULATIVE |
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4.1 | It is declared and agreed that: |
(a) | the security created by this Deed and the other Security Documents shall be held by the Mortgagee as a continuing security for the payment of the Secured Indebtedness and the performance of all the obligations (express or implied) of the Owner in the Security Documents contained; and | ||
(b) | the security so created shall not be satisfied by any intermediate payment or satisfaction of any part of the amount hereby and thereby secured (or by any settlement of accounts between the Owner or any other person who may be liable to the Mortgagee in respect of the Secured Indebtedness or any part thereof and the Mortgagee); and | ||
(c) | the security so created shall be in addition to and shall not in any way prejudice or affect and may be enforced by the Mortgagee without prior recourse to the security created by any other of the Security Documents or by any deposit of documents, or any guarantee, lien, bill, note, mortgage or other security now or hereafter held by the Mortgagee, or any right or remedy of the Mortgagee thereunder and shall not in any way be prejudiced or affected thereby or by the invalidity or unenforceability thereof, or by the Mortgagee releasing, modifying or refraining from perfecting or enforcing any of the same, or granting time or indulgence or compounding with any person liable; and | ||
(d) | all the rights, powers and remedies given to the Mortgagee hereunder shall be in addition to and not a limitation of any and every other right, power or remedy vested in the Mortgagee under the Loan Agreement, this Deed, the other Security Documents or at law and that all the powers so vested in the Mortgagee may be exercised from time to time and as often as the Mortgagee may deem expedient; and | ||
(e) | no failure, delay or omission on the part of the Mortgagee to exercise any right, power or remedy vested in it under the Security Documents or any of them shall impair such right, power or remedy or be construed as a waiver of or as acquiescence in any default by the Owner and no express waiver given by the Mortgagee in relation to any default by the Owner or breach by the Owner of any of its obligations under this Deed shall prejudice the rights of the Mortgagee under the Mortgage and/or this Deed arising from any subsequent default or breach (whether or not such subsequent default or breach is of a nature different from the previous default or breach) nor the discontinuance, abandonment or adverse determination of any proceedings taken by the Mortgagee to enforce any right, power or remedy preclude any other or further exercise thereof or proceedings to enforce the same or the exercise of any other right, power or remedy nor shall the giving by the Mortgagee of any consent to the doing of any act which by the terms hereof requires the consent of the Mortgagee prejudice the right of the Mortgagee to give or withhold as it think fit its consent to the doing of any other similar act; and | ||
(f) | the Mortgagee shall not be obliged to make any enquiry as to the nature or sufficiency of any payment received by it hereunder or to make any claim or to take any action to collect any moneys hereby assigned or to enforce any rights |
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and benefits hereby assigned to the Mortgagee or to which the Mortgagee may at any time be entitled hereunder; and | |||
(g) | the Mortgagee shall not be bound to enforce any of the other Security Documents before enforcing the security created by the Mortgage and this Deed (or either of them); and | ||
(h) | any waiver by the Mortgagee of any terms of this Deed or any consent given by the Mortgagee under this Deed shall only be effective if given in writing and then only for the purpose and upon the terms for which it is given. |
4.2 | Any settlement or discharge under the Mortgage and this Deed (or either of them) between the Mortgagee and the Owner shall be conditional upon no security or payment to the Mortgagee by the Owner or any other person being avoided or set aside or ordered to be refunded or reduced by any provision or enactment relating to bankruptcy, insolvency, administration or liquidation for the time being in force and, if such condition is not satisfied, the Mortgagee shall be entitled to recover from the Owner on demand the value of such security or the amount of any such payment as if such settlement or discharge had not occurred. | |
4.3 | The Owner waives any right it may have of first requiring the Mortgagee to proceed against or claim payment from any other person or enforce any guarantee or security (whether by the Owner or any other person) before enforcing the Mortgage and this Deed. | |
4.4 | Any moneys received, recovered or realised by the Mortgagee under the Mortgage and/or this Deed or any of the other Security Documents to which the Owner is or is to be a party will be applied in or towards the discharge of the Secured Indebtedness. | |
4.5 | Upon the Mortgagee being satisfied that the Secured Indebtedness has been unconditionally and irrevocably paid and discharged in full and following a written request therefore from the Owner, the Mortgagee will, subject to being indemnified to its satisfaction for the costs and expenses incurred by the Mortgagee in connection therewith, release the security created by the Mortgage. | |
5. | INSURANCES | |
5.1 | The Owner further covenants with the Mortgagee and undertakes throughout the Security Period: |
(a) | to insure and keep the Ship insured at no expense of the Mortgagee against (i) fire and usual marine risks (including excess risks) (ii) war risks (including excess risks) and (iii) protection and indemnity risks (including full insurance cover for oil pollution risks in the maximum amount available within the protection and indemnity risks) in accordance with Schedule 1 of the Loan Agreement; | ||
(b) | to reimburse to the Mortgagee on the Mortgagees first demand from time to time all costs and expenses incurred by the Mortgagee (as conclusively certified by the Mortgagee) in effecting and keeping effected a Mortgagees Interest Insurance which the Mortgagee may at any time effect for an amount of 110% of the Loan |
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upon such terms and with such insurers as the Mortgagee shall, in its absolute discretion, consider appropriate. |
5.2 | The Mortgagee shall be entitled to review the requirements of Clause 5.1 from time to time in order to take account of changes in circumstances after the date of this Deed (such changes in circumstances to include, without limitation, changes in the ships trading patterns, changes in applicable law and changes in the price and availability of insurance coverage). The Mortgagee may notify the Owner in writing from time to time of any modification to the requirements of Clause 5.1 which the Mortgagee shall specify and any such notification shall be binding on the Owner and shall take effect as an amendment to Clause 5.1. | |
6. | OWNERS COVENANTS IN RESPECT OF THE SHIP | |
The Owner further covenants with the Mortgagee that throughout the Security Period the Owner will: | ||
6.1 | Ships name and registration | |
not (without the previous consent of the Mortgagee) to change the Ships name and/or the Owners name and to keep the Ship registered as a Bahamian flag Ship at the Port of Nassau and not to do or suffer to be done anything whereby such registration may be forfeited or imperilled and to procure that no attempts will be made to abandon, delete or remove the Ship from the said registry and/or enter the Ship in a special registry pursuant to charterparty arrangements or otherwise and/or change the Ships nationality without the consent of the Mortgagee and promptly furnish to the Mortgagee from time to time such proofs as the Mortgagee may request for its satisfaction with respect to the Owners compliance with the provisions of this sub-clause; | ||
6.2 | Modification | |
not without the previous consent in writing of the Mortgagee to make any further modification to the Ship which would involve material alterations of her structure type or performance characteristics other than in order to comply with any international convention or other provisions applicable to the Ship to enable her to trade on a world-wide basis; | ||
6.3 | Maintenance of Class Compliance with Regulations Repairs Removal of Parts | |
to keep the Ship or procure that the Ship is kept, in a good and efficient state of repair consistent with first-class ship-ownership and management practice and so as to be classed 100A1 with the Bureau Veritas or to a similar standard with another classification society of like standing and member of IACS to be specifically approved by the Mortgagee and to maintain such class free of recommendations affecting class save those notified and approved in writing by the Mortgagee and so as to comply with the provisions of the Merchant Shipping Acts and all other laws, regulations and requirements (statutory or otherwise) from time to time applicable to vessels registered under the Bahamian flag and applicable to vessels of the same type of the Ship trading to any jurisdiction to which the Ship may, subject to the provisions of this Deed, trade from time to time and to procure that all repairs to or replacements of any damaged, worn or lost parts or equipment be effected in such manner (both as regards workmanship and |
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quality of materials) as not to diminish the value of the Ship and not to remove any material part of, or item of equipment installed on, the Ship unless the part or item so removed is forthwith replaced by a suitable part or item which is in the same condition as or better condition than the part or item removed, is free from any Encumbrance in favour of any person other than the Mortgagee and becomes on installation on the Ship, the property of the Owner and subject to the security constituted by the Mortgage and this Deed; | ||
6.4 | Surveys | |
to submit the Ship regularly to such periodical or other surveys as may be required for classification purposes and if so required to supply to the Mortgagee copies of all survey reports issued in respect thereof; | ||
6.5 | Inspection | |
to permit the Mortgagee by surveyors or other persons appointed by the Mortgagee on its behalf to board the Ship at all reasonable times and without interference for her trading for the purpose of inspecting her condition or for the purpose of satisfying itself in regard to proposed or executed repairs and to afford all proper facilities for such inspection; | ||
6.6 | Prevention of, and Release from, Arrest | |
to pay and discharge or procure the payment and discharge of all debts damages and liabilities whatsoever which have given or may give rise to maritime or possessory liens on or claims enforceable against the Ship, unless contested in good faith, and in event of arrest of the Ship pursuant to legal process or in event of her detention in exercise or purported exercise of any such lien as aforesaid to procure the release of the Ship from such arrest or detention forthwith upon receiving notice thereof by providing bail or otherwise as the circumstances may require; | ||
6.7 | Employment | |
not to employ the Ship or suffer her employment in any trade or business which is forbidden by International Law or is otherwise illicit or in carrying illicit or prohibited goods or in any manner whatsoever which may render her liable to condemnation in a Prize Court or to destruction seizure or confiscation and in event of hostilities in any part of the world (whether war be declared or not) not to employ the Ship or suffer her employment in carrying any contraband goods or to enter or trade to or to continue to trade in any zone after it has been declared a war zone by any Government or by the Ships war risks Insurers unless the Mortgagee shall have first given its consent thereto in writing and there shall have been effected by the Owner and at its expense such special insurance cover as the Mortgagee may require; | ||
6.8 | Information | |
promptly to furnish to the Mortgagee all such information as it may from time to time reasonably require regarding the Ship her employment position and engagement particulars of all towages and salvages and copies of all charters and other contracts for her employment or otherwise howsoever concerning her; |
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6.9 | Notification of Certain Events | |
to notify the Mortgagee forthwith by letter or in the case of urgency by telegram or telex of: |
(a) | any accident to the Ship involving repairs the cost whereof will or is likely to exceed two hundred thousand Dollars ($200,000) (or the equivalent in any other currency), and | ||
(b) | any occurrence in consequence whereof the Ship has become or is likely to become a Total Loss, and | ||
(c) | any requirement or recommendation made by any insurer or classification society affecting class or by any competent authority which is not immediately complied with, and | ||
(d) | any arrest of the Ship or the exercise or purported exercise of any lien on the Ship or her Earnings, which is not lifted within five (5) working days, and | ||
(e) | any petition or notice of meeting to consider any resolution to wind-up the Owner (or any event analogous thereto under the laws of the place of its incorporation); and | ||
(f) | any intended dry-docking of the Ship; and | ||
(g) | the occurrence of any Event of Default, which is continuing; |
6.10 | Payment of Outgoings and Evidence of Payments | |
promptly to pay or procure the payment of, all tolls due and other outgoings whatsoever in respect of the Ship and to keep proper books of account in respect of the Ship and her Earnings and as and when the Mortgagee may so require to make such books available for inspection on behalf of the Mortgagee and furnish satisfactory evidence that the wages and allotments and the insurance and pension contributions of the Master and crew are being regularly paid and that all deductions from crews wages in respect of any tax liability are being properly accounted for and that the Master has no claim for disbursements other than those incurred by him in the ordinary course of trading; | ||
6.11 | Encumbrances | |
not to create or to suffer the creation of any Encumbrance on or in respect of the Ship nor other part of the Mortgaged Property in favour of any person other than the Mortgagee; | ||
6.12 | Sale or other Disposal | |
not without the previous consent in writing of the Mortgagee, which shall not be unreasonably withheld (and then only subject to such terms as the Mortgagee may impose) to sell, agree to sell or otherwise dispose of the Ship or any share or interest therein; |
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6.13 | Chartering Laid-up | |
not without the previous consent of the Mortgagee in writing (which shall not be unreasonably withheld except in the case under (a) below which the Mortgagee shall have full liberty to withhold): |
(a) | to let the Ship on demise charter for any period; or | ||
(b) | to let the Ship by any time or consecutive voyage charter for a term which exceeds or which by virtue of any optional extension therein contained is likely to exceed twelve (12) months duration; or | ||
(c) | to let the Ship on terms whereby more than two months hire is payable in advance; or | ||
(d) | to let the Ship otherwise than on an arms length basis; or | ||
(e) | to de-activate or lay up the Ship; |
6.14 | Repairers Liens | |
not without the previous consent in writing of the Mortgagee to put the Ship into the possession of any person for the purpose of work being done upon her in an amount exceeding or likely to exceed two hundred thousand Dollars ($200,000) (or the equivalent in any other currency) unless (i) such person shall first have given to the Mortgagee and in terms satisfactory to it a written undertaking not to exercise any lien on the Ship or her Earnings for the cost of such work or otherwise or (ii) the previous written consent of the Mortgagee shall have been obtained (which consent shall not be unreasonably withheld); | ||
6.15 | Maintenance and Protection of the Security | |
to pay to the Mortgagee on demand all moneys whatsoever which the Mortgagee shall or may expend be put to or become liable for in or about the protection maintenance or enforcement of the security created by the Mortgage and this Deed or in or about the exercise by the Mortgagee of any of the powers vested in it under the Security Documents and to pay interest thereon at the rate provided for in Clause 2.3; | ||
6.16 | Sharing of Earnings | |
not without the previous consent in writing of the Mortgagee to enter into any agreement or arrangement whereby the Earnings may be shared with any other person; | ||
6.17 | Investigation, legal expenses, etc. | |
to pay on demand to the Mortgagee (or as it may direct) the amount of all investigation and legal expenses of any kind whatsoever stamp duties (if any) registration fees and any other charges incurred by the Mortgagee in connection with the preparation, completion and registration of the Security Documents or otherwise in connection with the Secured Indebtedness and the security therefor and if any such amount be not paid forthwith upon demand being made to pay interest thereon at the rate prescribed in Clause 2.3 from the date of demand until the date of payment whether before or after any relevant judgement; |
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6.18 | Manager | |
not without the previous consent in writing of the Mortgagee (such consent not to be unreasonably withheld and then only on and subject to terms and conditions acceptable to the Mortgagee) to appoint a manager of the Ship other than the Manager; | ||
6.19 | Conveyance | |
where the Ship is (or is to be) sold in exercise of any power contained in the Mortgage and this Deed, to execute, forthwith upon request by the Mortgagee, such form of conveyance of the Ship as the Mortgagee may require; | ||
6.20 | Compliance with Environmental Laws Notification |
(a) | comply with, and procure that all Environmental Affiliates of the Owner comply with, all Environmental Laws including without limitation, requirements relating to manning and establishment of financial responsibility and to obtain and comply with, and procure that all Environmental Affiliates of the Owner obtain and comply with, all Environmental Approvals applicable to and relating to the Ship, her operation or management and the business of the Owner from time to time; | ||
(b) | notify the Mortgagee forthwith upon: |
(i) | any Environmental Claim being or made against the Owner, the Manager or otherwise in connection with the Ship; | ||
(ii) | any Environmental Incident occurring, |
and keep the Mortgagee promptly advised, in writing on such regular basis and in such detail as the Mortgagee shall require, of the Owners response to such Environmental Claim or Environmental Incident and on such regular basis and in such detail as the Mortgagee shall require; |
6.21 | Compliance with obligations | |
without prejudice to the provisions of Section 34 of the Merchant Shipping Act 1894, to perform all the obligations assumed by the Owner in relation to the Ship without any liability to the Mortgagee in the event of failure by the Owner to perform its obligations in respect thereof; | ||
6.22 | Compliance with ISM Code | |
procure that the Manager and any Operator will: |
(a) | comply with and ensure that any Operator and the Manager and the Ship comply with the requirements of the ISM Code, including (but not limited to) the maintenance and renewal of valid certificates pursuant thereto throughout the Security Period; | ||
(b) | immediately inform the Mortgagee if there is any threatened or actual withdrawal of the Owners the Managers or an Operators or DOC or the SMC in respect of the Ship; and |
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(c) | promptly inform the Mortgagee upon the issue to the Owner, the Manager or any Operator of a DOC and to the Ship of an SMC or the receipt by the Owner, the Manager or any Operator of notification that its application for the same has been realised; |
6.23 | Compliance with ISPS Code |
the Owner will procure that the Owner or any Operator will: |
(i) | maintain at all times a valid and current ISSC in respect of the Ship; | ||
(ii) | immediately notify the Mortgagee in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC in respect of the Ship; and | ||
(iii) | procure that the Ship will comply at all times with the ISPS Code; and |
6.24 | Notice of Mortgage | |
to keep the Mortgage registered against the Ship as a valid first priority mortgage, to carry on board the Ship a certified copy of the Mortgage and this Deed and (if this is required by the laws of the Flag State) to place and maintain in a conspicuous place in the navigation room and the Masters cabin of the Ship a framed printed notice stating that the Ship is mortgaged by the Owner to the Mortgagee. |
7. | PROTECTION OF THE SECURITY | |
7.1 | The Mortgagee shall, without prejudice to its other rights and powers hereunder, be entitled (but not bound) at any time and so often as may be necessary to take any such action as it may in its discretion think fit for the purpose of protecting the security created by this Deed and the other Security Documents and each and every expense or liability so incurred by the Mortgagee in or about the protection of the security hereby and by the Mortgage constituted shall be repayable to it by the Owner on demand together with interest thereon at the rate provided for in Clause 2.3 from the date whereon such expense or liability was incurred by the Mortgagee until the date of payment, whether before or after any relevant judgement. | |
7.2 | Without prejudice to the generality of the foregoing: |
(a) | in the event that the Owner does not comply with the provisions of Clause 5.1 hereof or any of them the Mortgagee shall be at liberty to effect and thereafter to maintain all such insurances upon the Ship as in its discretion it may think fit; | ||
(b) | in event that the Owner does not comply with the provisions of Clause 6.3 and/or 6.4 hereof or any of them the Mortgagee shall be at liberty to arrange for the carrying out of such repairs and/or surveys as it may deem expedient or necessary; and | ||
(c) | in event that the Owner does not comply with the provisions of Clause 6.6 hereof or any of them the Mortgagee shall be at liberty to pay and discharge all such debts damages and liabilities as are therein mentioned and/or to take any such |
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measures as it may deem expedient or necessary for the purpose of securing the release of the Ship. |
8. | EVENTS OF DEFAULT | |
There shall be an Event of Default whenever an event occurs described in Clauses 8.1 to 8.8: | ||
8.1 | Non Performance of Obligations |
(a) | the Owner or any other Security Party fails to pay any sum due from the Owner or, as the case may be such Security Party, under the Loan Agreement and/or any of the other Security Documents at the time, in the currency and in the manner stipulated herein and/or any of the other Security Documents, or, in the case of any sum payable on demand, within three (3) Banking Days of such demand; or | ||
(b) | failure by the Owner to observe and perform any one or more of the covenants, terms or obligations contained in the Loan Agreement, the Mortgage, this Deed and/or any other Security Document relating to the Insurances; or | ||
(c) | any breach by the Owner of or omission of the Owner to observe any of the covenants, terms, obligations or undertakings under the Loan Agreement, the Mortgage, this Deed and/or any of the other Security Documents (other than failure to pay any sum when due or to comply with any obligation concerning the Insurances) and, in respect of any such breach or omission which in the reasonable opinion of the Mortgagee is capable of remedy, such action as the Mortgagee may require shall not have been taken within ten (10) days of the Mortgagee notifying the Owner of such required action to remedy the breach or omission); or | ||
(d) | the Owner or any other Security Party fails to observe and perform any one or more of the covenants, terms or obligations contained in the Loan Agreement and/or any other Security Document relating to the Insurances; or |
8.2 | Events affecting the Owner |
(a) | the Owner is adjudicated or found bankrupt or insolvent or any order is made by any competent court or resolution passed by the Owner or petition presented for the winding-up or dissolution of the Owner or for the appointment of a liquidator, trustee, administrator or conservator of the whole or any part of the undertakings, assets, rights or revenues of the Owner; or | ||
(b) | the Owner becomes or is deemed to be insolvent or suspends payment of its debts or is (or is deemed to be) unable to or admits inability to pay its debts as they fall due (or within the meaning of section 123 of The Insolvency Act 1986) or proposes or enters into any composition or other arrangement for the benefit of its creditors generally or proceedings are commenced in relation to the Owner under any law, regulation or procedure relating to reconstruction or readjustment of debts; or |
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(c) | an encumbrancer takes possession or a receiver or similar officer is appointed of the whole or any part of the undertakings, assets, rights or revenues of the Owner 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 the Owner and is not discharged within fourteen (14) days; or | ||
(d) | all or a material part of the undertakings, assets, rights or revenues of the Owner are seized, nationalised, expropriated or compulsorily acquired by or under the authority of any government; or | ||
(e) | any event occurs or proceeding is taken with respect to the Owner in any jurisdiction to which it is subject which has an effect equivalent or similar to any of the events mentioned in Clauses 8.2(a) to 8.2(d); or | ||
(f) | the Owner suspends or ceases or threatens to suspend or cease to carry on its business; or | ||
(g) | there occurs, in the reasonable opinion of the Mortgagee, a materially adverse change in the financial condition of the Owner; or | ||
(h) | any other event occurs or circumstances arise which, in the reasonable opinion of the Mortgagee, is likely materially and adversely to affect either (i) the ability of the Owner to perform all or any of its obligations under or otherwise to comply with the terms of the Loan Agreement, the Mortgage, this Deed and/or any of the other Security Documents, or (ii) the security created by the Loan Agreement, the Mortgage, this Deed and/or any of the other Security Documents; or | ||
(i) | (without the prior written consent of the Mortgagee) there is any change in the beneficial ownership of the shares in the Owner and the Manager which is not otherwise permitted under the terms of the Loan Agreement; or | ||
(j) | a meeting is convened by the Owner for the purpose of passing any resolution to purchase, reduce or redeem any of its share capital, without the Mortgagees prior written consent which shall not be unreasonably withheld; or |
8.3 | Representations Incorrect | |
any representation or warranty made or deemed to be made or repeated by or in respect of the Owner in or pursuant to the Loan Agreement, this Deed or any of the other Security Documents or in any notice, certificate or statement referred to in or delivered under the Loan Agreement, this Deed or any of the other Security Documents is or proves to have been intentionally and/or fraudulently incorrect in any material respect; or |
8.4 | Cross default of the Owner in respect of other Indebtedness | |
any Indebtedness of the Owner is not paid when due or becomes due and payable (unless contested in good faith with the appropriate judicial proceedings); | ||
8.5 | Events affecting the Security Documents |
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(a) | the Loan Agreement, the Mortgage, this Deed or any of the other 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 party thereto (other than the Mortgagee), or if any such party shall deny that it has any, or any further, liability thereunder or it becomes impossible or unlawful for the Owner to fulfil any of its covenants and obligations contained in the Loan Agreement, the Mortgage, this Deed or any of the Security Documents or for the Mortgagee to exercise the rights vested in it thereunder or otherwise; or | |
(b) | any consent, authorisation, licence or approval of, or registration with or declaration to, governmental or public bodies or authorities or courts required by the Owner to authorise or otherwise in connection with, the execution, delivery, validity, enforceability or admissibility in evidence of the Loan Agreement, the Mortgage, this Deed and/or any of the other Security Documents or the performance by the Owner of its obligations under the Loan Agreement, the Mortgage, this Deed and/or any of the other Security Documents is modified in a manner unacceptable to the Mortgagee or is not granted or is revoked or terminated or expires and is not renewed or otherwise ceases to be in full force and effect. The occurrence of any of the circumstances described in this Sub-clause (b) hereinabove would not give rise to an Event of Default if the Owner remedies the relevant circumstances within ten (10) days after the occurrence of such modification, not granting, revocation, termination or expiry or not renewal (as the case may be) of any such consent, authorisation, licence or approval of, or registration with or declaration to, governmental or public bodies or authorities or courts; or | |
(c) | any Encumbrance in respect of any of the property (or part thereof) which is the subject of the Security Documents (or any of them) is enforced; or | |
(d) | the registration of the Mortgage is contested or becomes void or voidable or liable to cancellation or termination, or if the validity or priority of the Mortgage is contested; or | |
8.6 | Events concerning the Security Parties | |
any of the events referred to in Clauses 8.2 to 8.5 occurs (amended as appropriate) in relation to any Security Party; or | ||
8.7 | Environmental Events | |
(a) | the Owner and/or the Manager and/or any of their respective Environmental Affiliates fails to comply with any Environmental Law or any Environmental Approval or the Ship is involved in any incident which gives rise or which may give rise to any Environmental Claim, if in any such case, such non compliance or incident or the consequences thereof could (in the opinion of the Mortgagee) reasonably be expected to have a material adverse effect on the business assets, operations, property or financial condition of the Owner or the Manager or on the security created by any of the Security Documents; or | |
(b) | the Owner or any other person fails or omits to comply with any requirements of the protection and indemnity association or other insurer with which the Ship is entered for insurance or insured against protection and indemnity risks (including oil pollution risks) to the effect that any cover (including without limitation, liability for Environmental Claims arising in jurisdictions where the Ship operates or trades) is or may be liable to cancellation, qualification or exclusion at any time and the relevant cover is not reinstated or reconstituted in a manner meeting the requirements of the Loan Agreement and this Deed within seven (7) days of such cancellation, qualification or exclusion; or |
20
cancellation, qualification or exclusion at any time and the relevant cover is not reinstated or reconstituted in a manner meeting the requirements of the Loan Agreement and this Deed within seven (7) days of such cancellation, qualification or exclusion; or | ||
8.8 | Events affecting the Ship | |
(a) | the Ship becomes a Total Loss or suffers damage or is involved in an incident which in the reasonable opinion of the Mortgagee may result in the Ship being subsequently determined to be a Total Loss and the insurance indemnity is not paid by the insurers to the Lenders under the relevant General Assignment within a period of one hundred eighty (180) days from the earlier of: (1) the date such Total Loss occurred and (2) the date on which in the reasonable opinion of the Mortgagee the incident may result in the Ship being subsequently determined to be a Total Toss has occurred; or | |
(b) | the Ship ceases to be managed by the Manager (for any reason other than the reason of a Total Loss or sale of the Ship) with the approval of the Mortgagee (such approval not to be unreasonably withheld) and the Owner fail to appoint an Manager within seven (7) days after the termination of the Management Agreement with the previous Manager; or | |
(c) | the Ship 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 Owner thereof and such Owner shall fail to procure the release of the Ship within a period of fourteen (14) days thereafter; or | |
(d) | the registration of the Ship under the laws of the state under the flag of which she is registered of the is cancelled or terminated without the prior written consent of the Mortgagee or, if the Ship is only provisionally registered on the relevant Drawdown Date and is not permanently registered under the laws and flag of the of the state under the flag of which she is registered at least thirty (30) days prior to the final deadline for completing such permanent registration as such may be validly extended; or | |
(e) | (without prejudice to the generality of Sub-Clause 8.1(b) and (c)) for any reason whatsoever the provisions of Clause 6.22 are not complied with and/or, the Ship ceases to comply with the ISM Code; or | |
(f) | (without prejudice to the generality of sub-Clause 8.1(b) and (c)) for any reason whatsoever the provisions of Clause 6.23 are not complied with and/or, the Ship ceases to comply with the ISPS Code; or | |
(g) | any other Event of Default specified in Clause 10.1 of the Loan Agreement or in any other Security Document, occurs; or | |
9. | ENFORCEABILITY AND POWERS OF THE MORTGAGEE | |
9.1 | Upon the happening of any of the Events of Default set out in Clause 8.1 to 8.8 (both incl.) which is continuing, but without the necessity for any Courts order or any declaration to be made in any jurisdiction to the effect that an Event of Default has occurred (and whether prior to or after the Mortgagee having made demand on the Owner as referred to in Clause 10.2 of the Loan Agreement) the Secured Indebtedness together with interest accrued and other moneys owing in respect thereof shall immediately become due and payable to the Mortgagee, and the security created by this Deed and the |
21
Mortgage shall become immediately enforceable and the Mortgagee shall (whether or not any such demand shall have been made) become forthwith entitled as and when it may see fit to put into force and to exercise all the powers possessed by it as mortgagee and chargee of the Mortgaged Property and in particular (but without limitation): |
(a) | to take possession of the Ship (whether actually or constructively) and/or otherwise to take control of the Ship, wherever the Ship may be, without legal process and (other than to the extend provided as a matter of law) without any liability of the Mortgagee or any Receiver for any losses or damages incurred thereby and the Owner shall forthwith upon being required to do so surrender possession and control of the Ship to the Mortgagee or any Receiver at its own cost and expense whereupon (inter alia) the Master, officers and crew shall comply with the instructions given from time to time by or on behalf of the Mortgagee or any such Receiver; | ||
(b) | to require that all policies, contracts and other records relating to the Insurances (including details of and correspondence concerning outstanding claims) be forthwith delivered to such brokers as the Mortgagee may nominate; | ||
(c) | to collect, recover, compromise and give a good discharge for all claims then outstanding or thereafter arising under the Insurances or any of them or in respect of the Earnings or any Requisition Compensation and to permit the brokers through whom collection or recovery is effected to charge the usual brokerage therefor; | ||
(d) | to take over or institute (if necessary using the name of the Owner) all such proceedings in connection with the Ship, the Insurances, the Earnings or any Requisition Compensation as the Mortgagee in its absolute discretion think fit and to discharge, compound, release or compromise claims against the Owner in respect of the Ship which have given or may give rise to any charge or lien on the Ship or which are or may be enforceable by proceedings against the Ship; | ||
(e) | To sell the Ship or any share or interest therein with or without prior notice to the Owner and with or without the benefit of a charter by public auction or private contract at such place and upon such terms as the Mortgagee or any Receiver in its absolute discretion may determine with power to postpone any such sale and without being answerable for any loss occasioned by such sale or resulting from postponement thereof and/or themselves to purchase the Ship at any such public auction and to set off the purchase price against all or any part of the Secured Indebtedness; | ||
(f) | to manage, insure, maintain and repair the Ship and to employ or sail or lay up the Ship in such manner and for such period as the Mortgagee or any Receiver in their/its absolute discretion deem expedient and for the purposes aforesaid the Mortgagee or such Receiver shall be entitled to do all acts and things incidental or conductive thereto and in particular to enter into such arrangements respecting the Ship her insurance, management, maintenance, repair, classification and employment in all respects as if the Mortgagee or such Receiver were the owner of the Ship and without being responsible for any loss thereby incurred; |
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(g) | to recover from the Owner on demand any such losses as may be incurred by the Mortgagee or any Receiver in or about the exercise of the power vested under sub-clause (f) above with interest thereon at the rate provided for in Clause 2.3 from the date when such losses were incurred by the Mortgagee or any Receiver until the date of payment whether before or after any relevant judgement; and | ||
(h) | to recover from the Owner on demand all expenses payments and disbursements incurred by the Mortgagee or any Receiver in or about or incidental to the exercise by it of any of the powers aforesaid together with default interest thereon at the rate prescribed in Clause 2.3 from the date when such expenses, payments or disbursements were incurred by the Mortgagee or any Receiver until the date of payment whether before or after any relevant judgement. |
9.2 | (a) | At any time after the Secured Indebtedness shall have become due and payable in accordance with a notice given by the Mortgagee to the Owner pursuant to Clause 10.2 of the Loan Agreement, the Mortgagee shall (in addition to the other powers described in this Clause 9) be entitled (but not bound) by an instrument in writing under its Common seal or under the hand of any director or officer of the Mortgagee to appoint any person or persons to be a Receiver of the Mortgaged Property or any part thereof (with power to authorise any joint receiver and/or manager to exercise any power independently of any other joint receiver and/or manager) and may from time to time fix his remuneration, and may remove any Receiver so appointed and appoint another in his place. Any Receiver so appointed shall be the Mortgagee of the Owner and the Owner shall be solely responsible for his acts or defaults and for his remuneration, and such Receiver so appointed shall have all powers conferred by the Law of Property Act 1925 without the restrictions contained in Sections 93 and 103 of that Act and, in addition, power on behalf of and at the cost of the Owner (notwithstanding any liquidation of the Owner) to do or omit to do anything which the Owner could do or omit to do in relation to the Mortgaged Property or any part thereof and in particular (but without prejudice to the generality of the foregoing) any such Receiver may exercise all the powers and discretions conferred on the Mortgagee by the Mortgage and this Deed. |
(b) | Any Receiver shall be entitled to remuneration appropriate to the work and responsibilities involved, upon the basis of charging from time to time adopted by the Receiver in accordance with the current practice of his firm, without being limited to the maximum rate specified in Section 109(6) of the Law of Property Act 1925. |
9.3 | The Mortgagee or any Receiver shall be entitled to do all acts and things incidental or conducive to the exercise of any of the rights, powers or remedies possessed by it as mortgagee of the Ship (whether at law, under the Mortgage and/or this Deed or otherwise) and in particular (but without prejudice to the generality of the foregoing), upon becoming entitled to exercise any of its powers under Clause 9.1 and 9.2, the Mortgagee or any such Receiver shall be entitled to discharge any cargo on board the Ship (whether the same shall belong to the Owner or any other person) and to enter into such other arrangements in respect of the Ship, her insurances, management, maintenance, repair, classification and employment in all respects as if the Mortgagee or any such Receiver was the owner of the Ship, but without being responsible for any loss |
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(a) | a sale of the Ship or any share or interest therein; or | ||
(b) | any recovery under the Insurances (other than any such sum or sums as may have been received by the Mortgagee in accordance with proviso (b) to Clause 2.1 of the General Assignment in respect of a Major Casualty (as therein defined) and which has or have been paid over to the Owner as therein provided) ; or | ||
(c) | any Requisition Compensation; or | ||
(d) | net profits arising out of the employment of the Ship pursuant to Clause 9.1(f); or |
24
(e) | otherwise received by the Mortgagee or any Receiver pursuant to the Mortgage or this Deed, |
(a) | in the exercise or purported exercise of any rights, powers or discretions vested in it pursuant to the Mortgage and this Deed (or either of them); or | ||
(b) | in the preservation or enforcement of the Mortgagee or any Receivers rights under the Mortgage and this Deed (or either of them); or | ||
(c) |
on the release of the Ship or any share or interest therein from the security
created by the Mortgage and this Deed (or either of them)
and the Mortgagee or any Receiver and each such agent or attorney may retain and pay all sums in respect of the same out of money received under the powers conferred by the Mortgage and this Deed (or either of them). All such amounts recoverable by the Mortgagee or any Receiver or such agent or attorney shall be recoverable on a full indemnity basis. |
12.2 | If any sum due from the Owner under or in connection with the Loan Agreement, the Mortgage and this Deed (or any of them) or under any order or judgement given or made in relation to the Loan Agreement, the Mortgage and this Deed (or any of them) has to be |
25
converted from the currency (the first currency) in which the same is payable under the Loan Agreement, the Mortgage and this Deed (or any of them) or under such order or judgement into another currency (the second currency) for the purpose of (i) making or filing a claim or proof against the Owner (ii) obtaining an order or judgement in any court or other tribunal or (iii) enforcing any order or judgement given or made in relation to the Loan Agreement, the Mortgage and this Deed (or any of them), the Owner shall indemnify and hold harmless the Mortgagee from and against any loss or damage suffered as a result of any discrepancy between (a) the rate of exchange used for such purpose to convert the sum in question from the first currency into the second currency and (b) the rate or rates of exchange at which the Mortgagee may in the ordinary course of business purchase the first currency with the second currency upon receipt of a sum paid to it in or towards satisfaction of any such order, judgement, claim or proof. | ||
12.3 | The indemnity contained in this Clause 12 shall apply irrespective of any indulgence granted to the Owner from time to time and shall continue in full force and effect notwithstanding any payment in favour of the Mortgagee and any amount due from the Owner under this Clause 12 will be due as a separate debt and shall not be affected by judgement being obtained for any other sums due under or in respect of the Loan Agreement, the Mortgage and the Deed (or any of them). | |
13. | POWER OF ATTORNEY | |
13.1 | The Owner, by way of security and in order more fully to secure the performance of the Owners obligations under the Mortgage and this Deed, HEREBY IRREVOCABLY APPOINTS (such appointment being coupled with an interest of the Mortgagee) the Mortgagee as its attorney for the duration of the Security Period for the purposes of: |
(a) | doing in its name all acts which the Owner itself could do in relation to or in connection the Mortgaged Property and executing signing and (if required) registering in its name all documents which the Owner itself could do, execute, sign or register in relation to the Ship (including but without limitation the execution of bills of sale for the Ship transferring title to the Ship to a third party) | ||
PROVIDED HOWEVER that such power shall not be exercisable by or on behalf of the Mortgagee until the Secured Indebtedness shall have become repayable on demand (whether or not such demand shall have been made) under Clause 10.2 of the Loan Agreement hereof and the Mortgage and this Deed shall have become immediately enforceable pursuant to Clause 9; and | |||
(b) | executing, signing, perfecting, doing and (if required) registering every such further assurance document, act or thing as is referred to in Clause 13. |
13.2 | The exercise of such power as is referred to in Clause 13.1 by or on behalf of the Mortgagee shall not put any person dealing with the Mortgagee upon any enquiry as to whether the Loan have become repayable on demand and/or the Mortgage and this Deed have become enforceable nor shall such person be in any way affected by notice that such security has not become repayable and/or the Mortgage and this Deed have not become enforceable and in relation to both Clauses 13.1(a) and (b) and the exercise by the Mortgagee of such power shall be conclusive evidence of its rights to exercise the same. | |
14. | FURTHER ASSURANCES |
26
(a) | the Owner is the sole legal and beneficial owner of sixty-four sixty-fourth shares of and in the Ship and none of the said shares is subject to any mortgage, charge, lien, hypothecation, assignment, title retention or encumbrance of whatsoever nature or any other interest given by way of security (save as constituted by the Mortgage and this Deed); | ||
(b) | the Owner has not sold or transferred, or agreed to sell or transfer, the Ship or any part thereof; |
27
(c) | the representations and warranties contained in Clause 6 of the Loan Agreement are true and correct with respect to the facts and circumstances existing at the date of this Deed and are hereby repeated and restated as if set out in full herein; and | ||
(d) | the Owner has the power as security for the Secured Indebtedness to mortgage its property including the Ship and to assign the Insurances, Requisition Compensation and the Earnings of the Ship in favour of the Mortgagee. |
18.2 | The Owner hereby further represents and warrants to the Mortgagee that: |
(a) | all applicable Environmental Laws and Environmental Approvals in relation to the Ship, her operation and management and the business of the Owner (as now conducted and as reasonably anticipated to be conducted in the future) have been complied with; | ||
(b) | no Environmental Claim has been made threatened against the Owner, the Manager or otherwise in connection with the Ship; | ||
(c) | no Environmental Incident has occurred; and | ||
(d) | the Ship will be in full compliance with the provisions of the ISM Code and ISPS Code. |
19. | MISCELLANEOUS | |
19.1 | Any provision of the Security Documents prohibited by or unlawful or unenforceable under any applicable law shall (to the extent required by such law) be ineffective without modifying the remaining provisions of the Security Documents but where the provisions of any such applicable law may be waived they are hereby waived to the full extent permitted by such law to the end that the Security Documents shall be valid and binding documents enforceable in accordance with their respective terms. | |
19.2 | For the purposes of enforcement, the interest rate in respect of each Interest Period and the Default Rate, the occurrence of an Event of Default and in particular the failure of the Owner to pay any amount due when it was due and the amount at any time due from the Owner under the Loan Agreement, the Mortgage and this Deed shall be proved by a Certificate of the Mortgagee, which it is hereby agreed that it shall be conclusive and binding upon the Owner (save for manifest error). | |
19.3 | This Deed may be executed in several counterparts, each of which shall be an original, but which together shall constitute but one and the same document. | |
19.4 | No term of this Deed is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this Deed. | |
20. | LAW AND JURISDICTION | |
20.1 | This Deed shall be governed and construed in accordance with the laws of the Commonwealth of the Bahamas. | |
20.2 | Subject to Clause 20.3, the courts of England shall have exclusive jurisdiction to settle any dispute which may arise out of or in connection with the Mortgage and this Deed (or either of |
28
them) and the Owner hereby waives any objections to proceedings with respect to the Mortgage and this Deed (or either of them) in such courts on the grounds of venue or inconvenient forum. | ||
20.3 | Clause 20.2 is for the exclusive benefit of the Mortgagee and any Receiver, each of which reserves the right: |
(a) | to commence proceeding in relation to any matter which arises out of or in connection with the Mortgage and this Deed (or either of them) in the courts of any country other than England and which have or claim jurisdiction to that matter; and | ||
(b) | to commence proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in England or without commencing proceedings in England. |
The Owner shall not commence any proceedings in any country other than England in relation to a matter which arises out of or in connection with the Mortgage and this Deed (or either of them). | ||
20.4 | Further, the Owner agrees that any summons, writ or other legal process issued against them in England shall be served upon Messrs. Atlas Maritime Services Limited, currently located at Enterprise House, 113-115 George Lane, London, England, or their successors, who are hereby authorised to accept such service, which shall be deemed to be good service on the Owner. Provided, however, that the Owner further agrees that in the event that (i) Messrs. Atlas Maritime Services Limited close or fail to maintain a business presence in England, or (ii) the Mortgagee, in its sole discretion, shall determine that service of process on the said agents is not feasible or may be insufficient under the laws of England, then any summons, writ or other legal process issued against them in England may be served upon Messrs. The Law Debenture Corporate Services Limited, currently located at 5 th Floor, 100 Wood Street, London EC2V 7EX, England (hereinafter called the Process Agent for English Proceedings ), or their successors, who are hereby authorised to accept such service, which shall be deemed to be good service on the Owner. The Mortgagee is hereby irrevocably appointed by the Owner as the duly authorised attorney of the Owner for the purpose of appointing the Process Agent for English Proceedings as provided herein. The appointment of the Process Agent for English Proceedings shall be valid and binding from the date notice of such appointment is given by the Mortgagee to the Owner in accordance with Clauses 15.1 of the Loan Agreement. Finally, the Owner hereby waives any objections to the inconvenience of England as a forum and the parties further agree that only the Courts of England and not those of any other State shall have jurisdiction to determine any claim which the Owner may have against the Mortgagee arising out of or in connection with this Deed. | |
20.5 | Nothing in this Clause 20 shall exclude or limit any right which the Mortgagee or any Receiver may have (whether under the law of any country, an international convention or otherwise) with regard to the bringing of proceedings, the service of process, the recognition or enforcement of a judgement or any similar or related matter in any jurisdiction (including, without limitation any jurisdiction where any part of the Mortgaged Property may be located) nor shall the taking of proceedings with respect to the Mortgage and this Deed (or either of them) in any jurisdiction preclude the Mortgagee or any Receiver from taking proceedings in any other jurisdiction or jurisdictions, whether concurrently or not. | |
20.6 | Without prejudice to the generality of this Clause 20 the Mortgagee or any Receiver shall have the right to arrest and take action against the Ship at whatever place the Ship shall be found lying and for the purpose of any action which the Mortgagees may bring before the Courts of such jurisdiction or other judicial authority and for the purpose of any action which the Mortgagee or any Receiver may bring against the Ship, any writ, notice, judgement or |
29
other legal process or documents may (without prejudice to any other method of service under applicable law) be served upon the Master of the Ship (or upon anyone acting as the Master) and such service shall be deemed good service on the Owner for all purposes. | ||
20.7 | The parties further agree that subject to Clause 20.3, the courts of England shall have exclusive jurisdiction to settle any dispute which may arise out of or in connection with the Mortgage and this Deed (or either of them) and the Owner hereby waives any objections to proceedings with respect to the Mortgage and this Deed (or either of them) in such courts on the grounds of venue or inconvenient forum. | |
20.8 | If it is decided by the Mortgagee that any such proceedings should be commenced in any other country, then any objections as to the jurisdiction or any claim as to the inconvenience of the forum is hereby waived by the Owner and it is agreed and undertaken by the Owner to instruct lawyers in that country to accept service of legal process and not to contest the validity of such proceedings as far as the jurisdiction of the court or courts involved is concerned and the Owner agrees that any judgement or order obtained in an English court shall be conclusive and binding on the Owner and shall be enforceable without review in the courts of any other jurisdiction. | |
20.9 | The Owner hereby appoints Mr. Ioannis Fassolis, an Attorney-at-Law, whose present address is at 15 Sachtouri Street, 185 36, Piraeus, Greece, as agent to accept service in Greece (hereinafter called the Process Agent for Hellenic Proceedings ) upon whom any judicial or extra-judicial process in Greece may be served as well as any notice, request, demand payment order or other communication under the Mortgage and this Deed. In the event that the Process Agent for Hellenic Proceeding (or any substitute process agent notified to the Mortgagee in accordance with the foregoing) cannot be found at the address specified above (or, as the case may be, notified to the Mortgagee), which will be conclusively proved by a deed of a process server that the process agent cannot be found at such address, any judicial process in Greece and any notice, request, payment order, announcement of claim, demand or other communication to be sent to the Owner may be validly effected in accordance with the procedure provided by the relevant law. In case, however, that such Process Agent is found at any other address, the Mortgagee shall have the right to serve the documents either on such Process Agent at such address or in accordance with the procedure provided by the relevant law. |
Signed
and
Delivered
as a
Deed
|
) | |
By Mr. Ion
Varouxakis
|
) /s/ Ion Varouxakis | |
for and on behalf of
|
) | |
ADVENTURE NINE S.A.
|
) | |
of Marshall Islands, in the presence of:
|
) |
30
Witness: | /s/ Ioannis Fassolis | |||
Name: | Ioannis Fassolis | |||
Address: | 15, Sachtouri Street, Pireas, Greece | |||
Occupation: | Attorney-at-Law | |||
EXECUTED as a DEED
|
) | |||||
for and on behalf of
|
) | |||||
FBB-FIRST BUSINESS BANK S.A.
|
) | |||||
|
||||||
by Mr. Nikolaos Vougioukas
|
) | |||||
|
||||||
its duly authorised Attorney-in-fact,
|
) | /s/ Nikolaos Vougioukas | ||||
|
||||||
|
||||||
in the presence of:
|
) | Attorney-in-fact |
Witness: | /s/ Maria C. Galanopoulou | ||
Name: | Maria C. Galanopoulou | ||
Address: | 13, Defteras Merarchias street, Pireas, Greece | ||
Occupation: | Attorney-at-law | ||
31
|
CLIFFORD CHANCE LLP | |
|
ADVOCATEN SOLICITORS NOTARIS | |
|
BELASTINGADVISEURS |
Clause | Page | |||||
1.
|
Definitions And Interpretation | 3 | ||||
|
||||||
2.
|
Restatement Of The Original Facility Agreement | 4 | ||||
|
||||||
3.
|
Representations | 4 | ||||
|
||||||
4.
|
Continuity And Further Assurance | 4 | ||||
|
||||||
5.
|
Fees, Costs And Expenses | 5 | ||||
|
||||||
6.
|
Miscellaneous | 6 | ||||
|
||||||
7.
|
Governing Law | 6 | ||||
|
||||||
Schedule 1
|
The Obligors | 7 | ||||
|
||||||
Part I
|
Term Borrowers | 7 | ||||
|
||||||
Part Ii
|
Overdraft Facility Borrowers | 7 | ||||
|
||||||
Part Iii
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Joint And Several Borrowers | 7 | ||||
|
||||||
Schedule 2
|
Conditions Precedent | 7 | ||||
|
||||||
Schedule 3
|
Restated Agreement | 11 | ||||
|
||||||
Signatures
|
12 |
-2-
(1) | FREESEAS INC. , a company incorporated under the laws of the Marshall Islands (the Parent and the Guarantor ); | |
(2) | THE SUBSIDIARIES OF THE PARENT listed in Schedule 1 ( The Parties ), Part I hereto as term borrowers (the Term Borrowers and each a Term Borrower ); | |
(3) | THE SUBSIDIARIES OF THE PARENT listed in Schedule 1 ( The Parties ), Part II hereto as overdraft facility borrowers (the Overdraft Facility Borrowers and each an Overdraft Facility Borrower ); | |
(4) | THE SUBSIDIARIES OF THE PARENT listed in Schedule 1 ( The Parties ), Part III hereto as joint and several borrowers (the Joint and Several Borrowers and each a Joint and Several Borrower ); and | |
(5) | NEW HBU II N.V. (as legal successor to Hollandsche Bank-Unie N.V. pursuant to the deed of demerger ( akte van splitsing ) dated 6 August 2008), having its registered office in Amstelveen, The Netherlands, acting through its branch at Coolsingel 104, Rotterdam, The Netherlands as lender (the Lender ). |
1. | DEFINITIONS AND INTERPRETATION | |
1.1 | Definitions | |
In this Agreement: | ||
Co-Debtor has the meaning given to that term in the Restated Agreement. | ||
Effective Date means ___ December 2009 provided that on or prior to such date the Lender has confirmed to the Borrowers that it has received each of the documents and evidence listed in Schedule 2 ( Conditions Precedent ) in a form and substance satisfactory to the Lender. | ||
Obligor has the meaning given to that term in the Restated Agreement. | ||
Original Facility Agreement means the USD 27,000,000 rollover loan agreement dated 9 April 2008 between Adventure Two S.A., Adventure Three S.A. and Adventure Seven S.A. as borrowers and Hollandsche Bank-Unie N.V. as lender as supplemented and/or amended by the USD 66,725,000 credit agreement dated 12 August 2008 and as further amended and restated on 1 September 2009 between Adventure Two S.A., Adventure Three S.A., Adventure Seven S.A. and Adventure Eleven S.A. as borrowers and Hollandsche Bank-Unie N.V. as lender. | ||
Restated Agreement means the Original Facility Agreement, as amended and restated by this Agreement, the terms of which are set out in Schedule 3 ( Restated Agreement ). | ||
1.2 | Incorporation of defined terms |
1.2.1 | Unless a contrary indication appears, a term defined in the Restated Agreement has the same meaning in this Agreement. | ||
1.2.2 | The principles of construction set out in the Original Facility Agreement shall have effect as if set out in this Agreement. |
1.3 | Clauses | |
In this Agreement any reference to a Clause or a Schedule is, unless the context otherwise requires, a reference to a Clause or a Schedule to this Agreement. | ||
1.4 | Third party rights | |
Except where any Finance Document expressly provides otherwise: |
1.4.1 | a person who is not a party to this Agreement has no right under Article 6:253 Dutch Civil Code to exercise or enforce any term or condition of this Agreement; and | ||
1.4.2 | where a person who is not a Party has a right under Article 6:253 Dutch Civil Code to exercise or enforce a term or condition of this Agreement, this Agreement (including, for the avoidance of doubt, that persons rights under this Agreement) may be amended, novated, supplemented, extended, restated or waived without that persons consent. |
1.5 | Designation | |
Each of the Obligors and the Lender designates this Agreement as a Finance Document. | ||
2. | RESTATEMENT OF THE ORIGINAL FACILITY AGREEMENT | |
With effect from the Effective Date the Original Facility Agreement shall be amended and restated so that it shall be read and construed for all purposes as set out in Schedule 3 ( Restated Agreement ). | ||
3. | REPRESENTATIONS | |
The representations and warranties included in Clause 19 ( Representations ) of the Restated Agreement are deemed to be made by each Obligor (by reference to the facts and circumstances then existing) on: |
(i) | the date of this Agreement; and | ||
(ii) | the Effective Date. |
4. | CONTINUITY AND FURTHER ASSURANCE | |
4.1 | Continuing obligations | |
The provisions of the Original Facility Agreement and the other Finance Documents shall, save as amended by this Agreement, continue in full force and effect. | ||
4.2 | Further assurance |
Each Obligor shall, at the reasonable request of the Lender and at their own expense, do all such acts and things necessary or desirable to give effect to the amendments effected or to be effected pursuant to this Agreement. | ||
4.3 | Security Documents |
4.3.1 | Each Obligor, with effect from the Effective Date, confirms that the Security Documents shall (i) continue to be in full force and effect notwithstanding the amendment and restatement effected by this Agreement and (ii) extends to all the liabilities and obligations of the Obligors under the Finance Documents as amended and restated pursuant to this Agreement. | ||
4.3.2 | The parties hereby furthermore agree and confirm that, notwithstanding the amendments pursuant to this Agreement, none of the modifications to the Original Facility Agreement or any of the Finance Documents: |
(i) | Will in any way adversely affect the validity or perfection of the Security granted on the Assets as defined in the relevant Security Documents; and | ||
(ii) | Constitute a novation ( schuldvernieuwing ) or termination of the obligations outstanding under the Finance Documents. |
4.4 | Guarantees | |
Each of the Co-Debtors hereby confirms that: |
(a) | the guarantee granted by it pursuant to the Original Facility Agreement shall remain unaffected; and | ||
(b) | the obligations guaranteed by it will be the obligations defined in the Original Facility Agreement as those obligations have been amended and restated pursuant to this Agreement. |
5. | FEES, COSTS AND EXPENSES | |
5.1 | Transaction expenses | |
Each Borrower shall within three Business Days of demand, pay the Lender the amount of all reasonable, documented costs and expenses (including legal fees) reasonably incurred by any of them in connection with the negotiation, preparation, printing and execution of this Agreement and any other documents referred to in this Agreement. | ||
5.2 | Enforcement costs | |
Each Borrower shall, within three Business Days of demand, pay to the Lender the amount of all reasonable documented costs and expenses (including legal fees) incurred by the Lender in connection with the enforcement of, or the preservation of any rights under, this Agreement. | ||
5.3 | Stamp taxes |
Each Borrower shall pay and, within three Business Days of demand, indemnify the Lender against any cost, loss or liability that the Lender incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of this Agreement. | ||
6. | MISCELLANEOUS | |
6.1 | Incorporation of terms | |
The provisions of Clause 29 ( Notices ), Clause 31 ( Partial Invalidity ), Clause 32 ( Remedies and waivers ) and Clause 36 ( Enforcement ) of the Restated Agreement shall be incorporated into this Agreement as if set out in full in this Agreement and as if references in those clauses to this Agreement or the Finance Documents are references to this Agreement. | ||
6.2 | Counterparts | |
This Agreement may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of this Agreement. | ||
7. | GOVERNING LAW | |
This Agreement is governed by Dutch law. |
Term Loan Borrowers | Registration number | |
Adventure Two S.A.
|
10413 | |
|
||
Adventure Three S.A.
|
10414 | |
|
||
Adventure Seven S.A.
|
23506 | |
|
||
Adventure Eleven S.A.
|
C-111797 |
Overdraft Facility Borrowers | Registration number | |
Adventure Two S.A.
|
10413 | |
|
||
Adventure Three S.A.
|
10414 | |
|
||
Adventure Seven S.A.
|
23506 | |
|
||
Adventure Eleven S.A.
|
C-111797 |
Co-Debtors | Registration number | |
Adventure Two S.A.
|
10413 | |
|
||
Adventure Three S.A.
|
10414 | |
|
||
Adventure Seven S.A.
|
23506 | |
|
||
Adventure Eleven S.A.
|
C-111797 |
1. | Obligors |
(a) | A copy of the articles of association and bylaws of each Obligor. | ||
(b) | A copy of a resolution of the board of directors (or other managing entity) of each Obligor: |
(i) | approving the terms of, and the transactions contemplated by, this Agreement and the other Finance Documents to which it is a party and resolving that it execute the Finance Documents to which it is a party (to the extent that such Finance Documents were not previously approved and executed in accordance with the Original Facility Agreement); | ||
(ii) | authorising a specified person or persons to execute this Agreement and the other Finance Documents to which it is a party on its behalf (to the extent that such Finance Documents were not previously approved and executed in accordance with the Original Facility Agreement); and | ||
(iii) | authorising a specified person or persons, on its behalf, to sign and/or despatch all documents and notices (including, if relevant, any Utilisation Request and Selection Notice) to be signed and/or despatched by it under or in connection with this Agreement and the other Finance Documents to which it is a party. |
(c) | A specimen of the signature of each person authorised by the resolution referred to in paragraph (b) above. | ||
(d) | A certificate of the Borrowers (signed by a director and/or officer) confirming that borrowing or guaranteeing, as appropriate would not cause any borrowing or guaranteeing, or similar limit binding on any Obligor to be exceeded. | ||
(e) | A certificate of an authorised signatory of each Obligor certifying that each copy document relating to it specified in this Section 1 of Schedule 1 is correct, complete and in full force and effect as at a date no earlier than the date of this Agreement. |
2. | Legal opinions |
(a) | A legal opinion of Clifford Chance LLP, Amsterdam, legal advisers to the Lender in The Netherlands, substantially in the form distributed to the Lender prior to signing this Agreement. | ||
(b) | If an Obligor is incorporated in a jurisdiction other than The Netherlands, a legal opinion of the legal advisers to the Lender in the relevant jurisdiction, substantially in the form distributed to the Lender prior to signing this Agreement. |
3. | Security |
(a) | First preferred Liberian mortgage granted in continuation of a prior mortgage on Free Destiny, dated on or about the Effective Date. |
(b) | First preferred Liberian mortgage granted in connection of a prior mortgage on Free Envoy, dated on or about the Effective Date. | ||
(c) | Second amended and restated first preferred mortgage recorded against the FREE MAVERICK, which further amends and restates that certain first preferred mortgages dated September 1, 2008, as amended and restated by that certain amended and restated first preferred mortgage dated September 1, 2009. | ||
(d) | Security confirmation in relation to the deed of assignment entered into by Adventure Two S.A. on 15 September 2009 in order to secure the rights and earnings of Adventure Two S.A. arising out of the Free Destiny and any associated charterparties, together with any insurances and requisition compensation in relation to the Free Destiny. | ||
(e) | Security confirmation in relation to the deed of assignment entered into by Adventure Three S.A. on 15 September 2009 in order to secure the rights and earnings of Adventure Tree S.A. arising out of the Free Envoy and any associated charterparties, together with any insurances and requisition compensation in relation to the Free Envoy. |
(a) | Copies of the executed Charter Contracts and the latest Valuation Reports. | ||
(b) | A copy of the Group Structure Chart. | ||
(c) | Copies of the executed Finance Documents by all parties thereto. | ||
(d) | Evidence that all fees, costs and expenses (including legal fees) due from the Borrowers pursuant to Clause 5 ( Fees, Costs and Expenses ) of this Agreement have been paid or will be paid by the Effective Date. | ||
(e) | A certificate signed by an authorized signatory of the Borrowers stating that, upon the Effective Date, (i) no member of the Group will have any Financial Indebtedness other than Permitted Financial Indebtedness and each member of the Group will have (ii) no Encumbrance existing in relation to any asset of any member of the Group other than any Permitted Encumbrance. | ||
(f) | Evidence satisfactory to the Lender that the Security has been or will be perfected in accordance with all applicable laws on the Effective Date and constitutes valid security with the ranking it is expressed to have. | ||
(g) | Copies of all relevant insurance policies and evidence that these are in full force and effect. | ||
(h) | All requested information required pursuant to the obligations of the Lender, together with any other additional documents, records and information that the Lender may be required to obtain, verify or review pursuant to the terms of any other applicable law or regulation. |
(i) | All documentation or information on assets required to be provided under any Security Documents. | ||
(j) | A copy of any other authorisation or other document, opinion or assurance which the Lender notifies the Borrowers is necessary or desirable in connection with the Finance Documents. | ||
(k) | Evidence reasonably satisfactory to the Lender that all governmental and regulatory consents and other clearances (including but not limited to tax clearances) and all third party consents and approvals necessary in connection herewith or other competition or regulatory authority have been obtained. | ||
(l) | A good standing certificate from each Obligor. |
The Parent
|
||||
|
||||
For and on behalf of:
|
||||
|
||||
FREESEAS INC.
|
||||
/s/ Ion G. Varouxakis
|
||||
|
||||
By: I. Varouxakis
|
By: | |||
Title:
President
|
Title: | |||
|
||||
The Term Loan Borrowers
|
||||
|
||||
For and on behalf of
|
||||
|
||||
ADVENTURE TWO S.A.
|
||||
/s/ Ion G. Varouxakis
|
||||
|
||||
By: I. Varouxakis
|
||||
Title:
President
|
||||
Address:
|
||||
Fax:
|
||||
|
||||
ADVENTURE THREE S.A.
|
||||
/s/ Ion G. Varouxakis
|
||||
|
||||
By: I. Varouxakis
|
||||
Title: President
|
||||
Address:
|
||||
Fax:
|
ADVENTURE SEVEN S.A.
|
||||
/s/ Ion G. Varouxakis
|
||||
|
||||
By: I. Varouxakis
|
||||
Title: President
|
||||
Address:
|
||||
Fax:
|
||||
|
||||
ADVENTURE ELEVEN S.A.
|
||||
/s/ Ion G. Varouxakis
|
||||
|
||||
By: I. Varouxakis
|
||||
Title: President
|
||||
Address:
|
||||
Fax:
|
||||
The Overdraft Facility Borrowers
|
||||
|
||||
For and on behalf of
|
||||
|
||||
ADVENTURE TWO S.A.
|
||||
/s/ Ion G. Varouxakis
|
||||
|
||||
By: I. Varouxakis
|
||||
Title: President
|
||||
Address:
|
||||
Fax:
|
||||
|
ADVENTURE THREE S.A.
|
||||
/s/ Ion G. Varouxakis
|
||||
|
||||
By: I. Varouxakis
|
||||
Title: President
|
||||
Address:
|
||||
Fax:
|
||||
|
||||
ADVENTURE SEVEN S.A.
|
||||
/s/ Ion G. Varouxakis
|
||||
|
||||
By: I. Varouxakis
|
||||
Title: President
|
||||
Address:
|
||||
Fax:
|
||||
|
||||
ADVENTURE ELEVEN S.A.
|
||||
/s/ Ion G. Varouxakis
|
||||
|
||||
By: I. Varouxakis
|
||||
Title: President
|
||||
Address:
|
||||
Fax:
|
||||
|
||||
The Co-Debtors
|
||||
|
||||
For and on behalf of
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FREESEAS INC.
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/s/ Ion G. Varouxakis
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|
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By: I. Varouxakis
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By: | |||
Title: President
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Title: | |||
ADVENTURE TWO S.A.
|
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/s/ Ion G. Varouxakis
|
||||
|
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By: I. Varouxakis
|
||||
Title: President
|
||||
Address:
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Fax:
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|
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ADVENTURE THREE S.A.
|
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/s/ Ion G. Varouxakis
|
||||
|
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By: I. Varouxakis
|
||||
Title: President
|
||||
Address:
|
||||
Fax:
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||||
|
||||
ADDVENTURE SEVEN S.A.
|
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/s/ Ion G. Varouxakis
|
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|
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By: I. Varouxakis
|
||||
Title: President
|
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Address:
|
||||
Fax:
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ADVENTURE ELEVEN S.A.
|
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/s/ Ion G. Varouxakis
|
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|
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By: I. Varouxakis
|
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Title:
President
|
||||
Address:
|
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Fax:
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The Lender
|
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|
||||
For and on behalf of
|
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|
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NEW HBU II N.V.
|
||||
|
||||
/s/ Peter Vodegel
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/s/ W. J. Griep | |||
|
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By: P.M.W. Vodegel
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By: W. J. Griep | |||
Title: Sr. Vice President
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Title: | |||
Address:
|
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Attention:
|
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Tel:
|
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Fax:
|
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E-mail:
|
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|
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Contact for administrative matters:
|
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|
||||
Attention:
|
||||
Tel:
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Fax:
|
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E-mail:
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- 1 -
Clause | Page | |||
1.Definitions And Interpretation
|
4 | |||
2.The Facilities
|
18 | |||
3.Purpose
|
19 | |||
4.Conditions Of Utilisation
|
19 | |||
5.Utilisation
|
20 | |||
6.Overdraft Facility
|
21 | |||
7.Repayment
|
22 | |||
8.Prepayment And Cancellation
|
26 | |||
9.Interest
|
30 | |||
10.Interest Periods
|
31 | |||
11.Changes To The Calculation Of Interest
|
32 | |||
12.Fees
|
33 | |||
13.Tax Gross Up And Indemnities
|
33 | |||
14.Increased Costs
|
36 | |||
15.Other Indemnities
|
37 | |||
16.Mitigation By The Lender
|
38 | |||
17.Costs And Expenses
|
38 | |||
18.Guarantee And Indemnity
|
39 | |||
19.Representations
|
42 | |||
20.Information Undertakings
|
46 | |||
21.Financial Covenants
|
49 | |||
22.General Undertakings
|
54 | |||
23.Events Of Default
|
62 | |||
24.Changes To The Lender
|
66 | |||
25.Changes To The Obligors
|
66 | |||
26.Conduct Of Business By The Lender
|
66 | |||
27.Payment Mechanics
|
66 | |||
28.Set-Off
|
69 | |||
29.Notices
|
69 | |||
30.Calculations And Certificates
|
70 | |||
31.Partial Invalidity
|
70 | |||
32.Remedies And Waivers
|
70 |
- 2 -
Clause | Page | |||
33. Amendments And Waivers
|
71 | |||
34. Counterparts
|
71 | |||
35. Governing Law
|
71 | |||
36. Enforcement
|
71 | |||
37. Representation By Attorney
|
71 | |||
|
||||
Schedule 1
The Parties
|
72 | |||
Part I The Lenders
|
72 | |||
Part Ii Term Borrowers
|
72 | |||
Part Iii Overdraft Facility Borrowers
|
72 | |||
Part Iv Joint And Several Borrowers
|
72 | |||
|
||||
Schedule 2
Requests
|
73 | |||
Part I Utilisation Request
|
73 | |||
Part Ii Selection Notice
|
73 | |||
|
||||
Schedule 3
Security Memorandum
|
75 | |||
|
||||
Schedule 4
Margin
|
78 | |||
|
||||
Schedule 5
Form Of Compliance Certificate
|
79 | |||
|
||||
Schedule 6
Timetables
|
81 | |||
|
||||
Schedule 7
Existing Encumbrances
|
82 | |||
|
||||
Schedule 8
Existing Financial Indebtedness
|
83 |
- 3 -
(1) | FREESEAS INC. , a company incorporated under the laws of the Marshall Islands (the Parent and the Guarantor ); |
(2) | THE SUBSIDIARIES OF THE PARENT listed in Schedule 1 ( The Parties ), Part II hereto as term borrowers (the Term Borrowers and each a Term Borrower ); |
(3) | THE SUBSIDIARIES OF THE PARENT listed in Schedule 1 ( The Parties ), Part III hereto as overdraft facility borrowers (the Overdraft Facility Borrowers and each an Overdraft Facility Borrower ); |
(4) | THE SUBSIDIARIES OF THE PARENT listed in Schedule 1 ( The Parties ), Part IV hereto as joint and several borrowers (the Joint and Several Borrowers and each a Joint and Several Borrower ); and |
(5) | NEW HBU II N.V. (as legal successor to Hollandsche Bank-Unie N.V. pursuant to the deed of demerger ( akte van splitsing ) dated 6 August 2008), having its registered office in Amstelveen, The Netherlands, acting through its branch at Coolsingel 104, Rotterdam, The Netherlands as lender (the Lender ). |
1.1 | Definitions |
In this Agreement: |
Acquisition Agreement means the bill of sale dated 26 February 2008 between Adventure Seven S.A. as buyer and Wynne Shipholding S.A. as seller pursuant to which Adventure Seven S.A. acquired Free Knight. |
Affiliate means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company. |
Amendment and Restatement Agreement means the amendment and restatement agreement dated 1 December 2009 and made between the Borrowers, the Co-Debtors and the Lender whereby the Original Facility Agreement is amended and restated. |
Authorisation means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration. |
(a) | in relation to Facility A, 1 April 2008; |
(b) | in relation to Facility B, the Effective Date; and |
(c) | in relation to the Overdraft Facility, the period from and including 12 August 2008 to and including the date falling one month prior to the Termination Date for the Overdraft Facility. |
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(a) | the amount of its participation in any outstanding Utilisations under that Facility; and |
(b) | in relation to any proposed Utilisation, the amount of its participation in any Utilisations that are due to be made under that Facility on or before the proposed Utilisation Date, |
(a) | the interest (excluding the Mandatory Costs (if any)) which the Lender should have received for the period from the date of receipt of all or any part of a Loan or Unpaid Sum to the last day of the current Interest Period in respect of that Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period; |
(b) | the amount which 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. |
Business Day means a day (other than a Saturday or Sunday) on which banks are open for general business in Amsterdam, London and New York. |
Capital Market Proceeds means the aggregate cash proceeds received by any member of the Group pursuant to: |
(a) | any issue or allotment, or agreement for the issue or allotment, of any shares or any equity interest of any nature of or in such member of the Group (other than any issues or allotment of such shares or equity interest to another member of the Group); |
(b) | any issue or allotment, or agreement for the issue or allotment, of debt securities, warrants, options or any other instrument convertible or exchangeable into share capital (or any other equity interest) of or in such |
- 5 -
member of the Group (other than any issue or allotment of such debt securities, warrants, options or other instruments to another member of the Group); |
(c) | the issuance by such member of the Group of any Financial Indebtedness, pursuant to any private placement or the issue of commercial paper, medium term notes, bonds, debentures or other similar instruments, |
(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 Facilities (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties; or |
(b) | the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party preventing that, or any other Party: |
(i) | from performing its payment obligations under the Finance Documents; or | ||
(ii) | from communicating with other Parties in accordance with the terms of the Finance Documents, |
- 6 -
(a) | the proceeds of any Disposal (for the avoidance of doubt not being a Disposal of any Vessel) made in the ordinary course of trading of the disposing entity and on arms length terms; and |
(b) | any Net Disposal Proceeds of which the Lender has, in its reasonable discretion (whereby the Lender will take into account, inter alios, the financial condition and prospects of the Group and the prevailing market conditions at such time), notified the Borrowers in writing that such proceeds do not have to be applied in prepayment of the Facilities. |
- 7 -
(a) | moneys borrowed; |
(b) | any amount raised by acceptance under any acceptance credit facility or dematerialised equivalent; |
- 8 -
(c) | any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument; |
(d) | any lease or hire purchase contract which would, in accordance with GAAP, be treated as a finance or capital lease but only to the extent of such treatment; |
(e) | receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis); |
(f) | any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing; |
(g) | any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative transaction, only the marked to market value shall be taken into account); |
(h) | any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; and |
(i) | the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (h) above. |
(a) | all members of the Group; and |
(b) | any person in which any Group member has an interest in the issued share capital or equivalent ownership interest of such person and the percentage of the |
- 9 -
issued share capital or equivalent ownership interest owned by such Group member. |
(a) | held in The Netherlands by an Obligor with the Lender; |
(b) | identified in a letter between a Borrower and the Lender as a Holding Account; |
(c) | subject to Security in favour of the Lender which Security is in form and substance satisfactory to the Lender, |
(a) | the applicable Screen Rate; or |
(b) | (if no Screen Rate is available for dollars for the Interest Period of that Loan) the rate quoted by the Lender to leading banks in the London interbank market, |
- 10 -
(a) | the business, operations, property, condition (financial or otherwise) or prospects of the Group taken as a whole, such that, in the reasonable opinion of the Lender, the ability of the Group to fulfill its obligations to the Lender at the time and in the manner required could be prejudiced; or |
(b) | the ability of the Obligors to perform their obligations under the Finance Documents; or |
(c) | the validity or enforceability of any of the Finance Documents or the rights or remedies of the Lender under any of the Finance Documents. |
(a) | (subject to paragraph (c) below) if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in which that period is to end if there is one, or if there is not, on the immediately preceding Business Day; |
(b) | if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month; and |
(c) | if an Interest Period begins on the last Business Day of a calendar month, that Interest Period shall end on the last Business Day in the calendar month in which that Interest Period is to end. |
The above rules will only apply to the last Month of any period. |
(i) | any reasonable expenses which are incurred by any Obligor with respect to that Disposal to persons who are not members of the Group; and |
(ii) | any Tax incurred and required to be paid by the seller in connection with that Disposal (as reasonably determined by the seller, on the basis of existing rates and taking account of any available credit, deduction or allowance). |
- 11 -
(a) | of assets by a member of the Group in its ordinary course of trade and on arms length terms and for fair market value; |
(b) | of cash where such Disposal is not otherwise prohibited by the Finance Documents; |
(c) | made by one member of the Group to another member of the Group (where neither member of the Group is an Obligor); |
(d) | of any assets which are obsolete or not required for the efficient operation of the business of the Group; |
(e) | of assets in exchange for other assets comparable or superior as to type, value or quality; |
(f) | of vessels (not being the Vessels) by members of the Group (not being Obligors) provided that the proceeds of such disposal are applied towards: |
(i) | firstly, repayment of all Financial Indebtedness owed by members of the Group to the bank that has a mortgage on such vessel; | ||
(ii) | secondly, pro rata repayment of the Financial Indebtedness provided by the Lender and all other banks financing the Group as follows: |
- 12 -
(A) | in the event that the Value to Loan Ratio is less than 110%, all proceeds of such disposal have to be applied in pro rata repayment; and |
(B) | in the event that the Value to Loan Ratio is equal to or greater than 110%, 0% of the proceeds of such disposal have to be applied in pro rata repayment; |
(iii) | thirdly, financing the working capital requirements of the Group; |
(g) | not falling within paragraphs (a) to (f) above made with the prior written consent of the Lender. |
(a) | any Encumbrance arising by virtue of the maintenance of a credit balance on any bank account of any member of the Group pursuant to the general terms and conditions of the bank with which such account is held; |
(b) | any lien arising by operation of law and in the normal course of the day-to-day business and not as a result of any default or omission by any member of the Group; |
(c) | any Encumbrance arising under a Security Document; |
(d) | any Encumbrance in favour of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods; |
(e) | any other Encumbrance not permitted by paragraphs (a) to (d) above which secures Permitted Financial Indebtedness which does not exceed USD 1,000,000 in aggregate; |
(f) | any other Encumbrance created by any member of the Group with the prior written consent of the Lender; and |
(g) | all Encumbrances listed in Schedule 7 ( Existing Encumbrances ). |
(a) | any Financial Indebtedness arising under or permitted pursuant to the Finance Documents; |
(b) | any Financial Indebtedness arising under Permitted Treasury Transactions; |
(c) | any other Financial Indebtedness which is fully subordinated to any Financial Indebtedness incurred pursuant to the Finance Documents, which subordination shall be on terms and conditions pre approved by the Lender; |
- 13 -
(d) | Financial Indebtedness of a member of the Group arising pursuant to the making of any loan, granting of credit or the giving of any guarantee in circumstances which are permitted pursuant to Clause 22.9 ( Loans and Guarantees ); |
(e) | any Financial Indebtedness of members of the Group not permitted pursuant to paragraphs (a) to (d) above provided that the principal amount of such Financial Indebtedness does not (when aggregated with the aggregate amount of all other Financial Indebtedness permitted under this paragraph (e)) exceed USD 1,000,000 (or its equivalent in any other currency or currencies); |
(f) | any Financial Indebtedness incurred by any member of the Group as a result of Capital Market Proceeds provided that Clause 8.5 ( Mandatory Prepayment of Capital Market Proceeds ) is complied with; |
(g) | any other Financial Indebtedness of a member of the Group, incurred after the date of this Agreement, approved by the Lender in writing (such approval not to be unreasonably withheld); |
(h) | any Financial Indebtedness in order to acquire additional vessels, approved by the Lender in writing, such approval not to be unreasonably withheld with criterion being the Lenders position not to be deteriorated, provided that the Lender shall have a right of first refusal in respect of such Financial Indebtedness (in form and substance satisfactory to the Lender); and |
(i) | all Financial Indebtedness listed in Schedule 8 ( Existing Financial Indebtedness ). |
(a) | the hedging transactions documented by the Hedging Documents; and |
(b) | any foreign exchange transactions for spot or forward delivery in each case entered into by a Borrower in the ordinary course of trading activities of a Borrower for a period of not more than 3 months (and not for investment or speculative purposes). |
- 14 -
(a) | in relation to Adventure Two S.A., Adventure Three S.A., Adventure Seven S.A. and the Parent, the Marshall Islands; |
(b) | in relation to Adventure Eleven S.A., Liberia; and |
(c) | in relation to any other member of the Group, its jurisdiction of incorporation or organisation (as the case may be). |
- 15 -
(a) | which is controlled, directly or indirectly, by the first mentioned company or corporation; |
(b) | more than half the issued share capital of which is beneficially owned, directly or indirectly by the first mentioned company or corporation; or |
(c) | which is a Subsidiary of another Subsidiary of the first mentioned company or corporation, |
and for this purpose, a company or corporation shall be treated as being controlled by another if that other company or corporation is able to direct its affairs and/or to control the composition of its board of directors or equivalent body. |
(a) | in relation to Facility A, 1 January 2016; |
(b) | in relation to Facility B, 1 November 2012; |
(c) | in relation to the Overdraft Facility, 27 March 2011. |
(a) | in relation to the period beginning on the Effective Date and ending on 31 December 2009: |
(i) | in relation to Free Destiny, the valuation report dated 30 June 2009 and prepared by Cass Technava Maritime S.A. and in a form and substance satisfactory to the Lender; |
- 16 -
(ii) | in relation to Free Envoy, the valuation report dated 30 June 2009 and prepared by Cass Technava Maritime S.A. and in a form and substance satisfactory to the Lender; | ||
(iii) | in relation to Free Knight, the valuation report dated 30 June 2009 and prepared by Cass Technava Maritime S.A. and in a form and substance satisfactory to the Lender; and | ||
(iv) | in relation to Free Maverick, the valuation report dated 30 June 2009 and prepared by Cass Technava Maritime S.A. and in a form and substance satisfactory to the Lender; and |
(b) | in relation to any other period, any updated Valuation Report delivered to the Lender pursuant to and in accordance with Clause 20.5 ( Valuation Report ). |
1.2 | Construction |
(a) | Unless a contrary indication appears, any reference in this Agreement to: |
(i) | the Lender , any Borrower , Co-Debtor , Obligor or any Party shall be construed so as to include its successors in title, permitted assigns and permitted transferees; |
(ii) | assets includes present and future properties, revenues and rights of every description; |
(iii) | a Finance Document or any other agreement or instrument is a reference to that Finance Document or other agreement or instrument as amended, novated, supplemented, extended or restated; |
(iv) | 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; |
(v) | a person includes any individual, firm, company, corporation, government, state or agency of a state or any association, trust, joint venture, consortium or partnership (whether or not having separate legal personality); |
(vi) | a regulation includes any regulation, rule, official directive, request or guideline (whether or not having the force of law but if not having the force of law, being of a type with which persons to whom it is directed are expected and accustomed to comply) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation; |
- 17 -
(vii) | a provision of law is a reference to that provision as amended or re-enacted; and |
(viii) | a time of day is a reference to Amsterdam time. |
(b) | Section, Clause and Schedule headings are for ease of reference only. |
(c) | 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. |
(d) | A Default is continuing if it has not been remedied or waived. |
1.3 | Third party rights |
Except where any Finance Document expressly provides otherwise: |
(a) | a person who is not a Party has no right under Article 6:253 Dutch Civil Code to exercise or enforce any term or condition of this Agreement; and |
(b) | where a person who is not a Party has a right under Article 6:253 Dutch Civil Code to exercise or enforce a term or condition of this Agreement, this Agreement (including, for the avoidance of doubt, that persons rights under this Agreement) may be amended, novated, supplemented, extended, restated or waived without that persons consent. |
1.4 | Currency Symbols |
2. | THE FACILITIES |
2.1 | The Facilities |
Subject to the terms of this Agreement, the Lender grants or has granted (as the case may be), upon the terms and subject to the conditions hereof: |
(a) | a dollar term loan facility in an aggregate amount equal to the Facility A Commitment ( Facility A ); |
(b) | a dollar term loan facility in an aggregate amount equal to the Facility B Commitment ( Facility B ); and |
(c) | a dollar overdraft facility in an aggregate amount equal to the Overdraft Facility Commitments ( Overdraft Facility ). |
2.2 | Obligors Agent |
(a) | Each Obligor by its execution of this Agreement irrevocably appoints the Parent to act on its behalf as its agent in relation to the Finance Documents and irrevocably authorises: |
(i) | the Parent on its behalf to supply all information concerning itself contemplated by this Agreement to the Parties and to give all notices and instructions (including, in the case of a Borrower, Utilisation Requests), to make such agreements and to effect the relevant amendments, |
- 18 -
supplements and variations capable of being given, made or effected by any Obligor notwithstanding that they may affect the Obligor, without further reference to or the consent of that Obligor; and |
(ii) | the Lender to give to the Parent any notice, demand or other communication addressed to that Obligor pursuant to the Finance Documents, |
and in each case the Obligor shall be bound as though the Obligor itself had given the notices and instructions (including, without limitation, any Utilisation Requests) or executed or made the agreements or effected the amendments, supplements or variations, or received the relevant notice, demand or other communication. |
(b) | Every act, omission, agreement, undertaking, settlement, waiver, amendment, supplement, variation, notice or other communication given or made by the Obligors Agent or given to the Obligors Agent under any Finance Document on behalf of another Obligor or in connection with any Finance Document (whether or not known to any other Obligor and whether occurring before or after such other Obligor became an Obligor under any Finance Document) shall be binding for all purposes on that Obligor as if that Obligor had expressly made, given or concurred with it. In the event of any conflict between any notices or other communications of the Obligors Agent and any other Obligor, those of the Obligors Agent shall prevail. |
3. | PURPOSE |
3.1 | Purpose |
(a) | Each Borrower has applied all amounts borrowed by it under Facility A towards the financing of the purchase price for Free Knight under the Acquisition Agreement. |
(b) | Each Borrower shall apply all amounts borrowed by it under Facility B towards refinancing the Existing Facility. |
(c) | Each Borrower shall apply all amounts borrowed by it under the Overdraft Facility towards financing working capital purposes and general corporate purposes of the Group. |
3.2 | Monitoring |
The Lender is not bound to monitor or verify the application of any amount borrowed pursuant to this Agreement. |
4. | CONDITIONS OF UTILISATION |
4.1 | Conditions precedent | |
The Lender will only be obliged to make a Loan available to the Borrowers if on the date of the Utilisation Request and on the proposed Utilisation Date: |
(a) | no Default is continuing or would result from the proposed Loan; and |
- 19 -
(b) | the Repeating Representations to be made by the relevant Borrower are true in all material respects. |
4.2 | Maximum number of Loans |
The Borrower may not deliver a Utilisation Request if as a result of the proposed Utilisation: |
(a) | six or more Facility A Loans would be outstanding; or |
(b) | six or more Facility B Loans would be outstanding. |
5. | UTILISATION |
5.1 | Delivery of a Utilisation Request |
A Borrower may utilise a Facility by delivery to the Lender of a duly completed Utilisation Request not later than the Specified Time. |
5.2 | Completion of a Utilisation Request |
(a) | Each Utilisation Request is irrevocable and will not be regarded as having been duly completed unless: |
(i) | it identifies the Facility to be utilised; |
(ii) | the proposed Utilisation Date is a Business Day within the Availability Period applicable to that Facility; |
(iii) | the currency and amount of the Utilisation comply with Clause 5.3 ( Currency and amount ); and |
(iv) | the proposed Interest Period complies with Clause 10 ( Interest Periods ). |
(b) | Only one Loan may be requested in each Utilisation Request except that multiple utilisations may be requested in a Utilisation Request where the proposed Utilisation Date is the Effective Date. |
5.3 | Currency and amount |
(a) | The currency specified in a Utilisation Request must be dollars. |
(b) | The amount of the proposed Loan must be an amount which is not more than the Available Facility and which is a minimum of USD 500,000 or, if less, the Available Facility. |
5.4 | Cancellation of Commitment |
(a) | The Facility A Commitments which, at that time, are unutilised shall be immediately cancelled at the end of the Availability Period for Facility A. |
(b) | The Facility B Commitments which, at that time, are unutilised shall be immediately cancelled at the end of the Availability Period for Facility B. |
(c) | The Overdraft Facility Commitments which, at that time, are unutilised shall be immediately cancelled at the end of the Availability Period for the Overdraft Facility. |
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6. | OVERDRAFT FACILITY |
6.1 | Availability |
(a) | The Overdraft Facility is provided by the Lender to the Borrowers in accordance with any Overdraft Facility Documents, unless otherwise provided for herein. |
(b) | No amendment or waiver of a term of any Overdraft Facility shall require the consent of any Party other than the relevant Borrower and the Lender unless such amendment or waiver itself relates to or gives rise to a matter which would require an amendment of or under this Agreement (including, for the avoidance of doubt, under this Clause). In such a case, the provisions of this Agreement with regard to amendments and waivers will apply. |
6.2 | Terms of Overdraft Facility |
(a) | Except as provided below, the terms of the Overdraft Facility will be those agreed by the Lender and each relevant Borrower in an Overdraft Facility Document. |
(b) | However, those terms: |
(i) | must be based on terms previously agreed upon between the Lender and the Parent in respect of overdraft facilities (except as varied by this Agreement); |
(ii) | may allow only Borrowers to use the Overdraft Facility; |
(iii) | may not allow the Overdraft Facility Utilisations to exceed the Overdraft Facility Commitment; and |
(iv) | must require that the Overdraft Facility Commitment is reduced to nil, and that all Overdraft Facility Utilisations are repaid not later than the Termination Date for the Overdraft Facility (or such earlier date as the Overdraft Facility Commitment of the Lender is reduced to zero). |
(c) | If there is any inconsistency between any term of an Overdraft Facility Document and any term of this Agreement, this Agreement shall prevail except for (i) Clause 30.3 ( Day count convention ) which shall not prevail for the purposes of calculating fees, interest or commission relating to an Overdraft Facility and (ii) an Overdraft Facility comprising more than one account where the terms of the Overdraft Facility Documents shall prevail. |
(d) | Utilisations of an Overdraft Facility may only be used for the working capital purposes and general corporate purposes of the Group. |
(e) | The rate of interest, fees and other remuneration in respect of the Overdraft Facility Document shall be based upon the normal market rates and terms from time to time of the Lender but taking into account the Margin and fees applicable under the Overdraft Facility. |
6.3 | Repayment of Overdraft Facility |
(a) | An Overdraft Facility shall cease to be available on the Termination Date in relation to the Overdraft Facility or such earlier date on which its expiry date |
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occurs or on which it is cancelled in accordance with the terms of this Agreement. |
(b) | If an Overdraft Facility expires in accordance with its terms the Overdraft Facility Commitment shall be reduced to zero. |
7. | REPAYMENT |
7.1 | Repayment of Facility A Loans |
(a) | Subject to paragraph (b) below, the Borrowers under Facility A shall repay the aggregate Facility A Loans in instalments on each Facility A Repayment Date set out below such that the amount of the Facility A Loans is reduced on each Facility A Repayment Date by an amount equal to the Facility A Repayment Instalment set out below opposite such Facility A Repayment Date: |
Facility A Repayment Date | Facility A Repayment Instalment | |||
18 June 2008
|
USD 1,750,000 | |||
18 September 2008
|
USD 1,750,000 | |||
18 December 2008
|
USD 1,750,000 | |||
18 March 2009
|
USD 1,750,000 | |||
18 June 2009
|
USD 750,000 | |||
18 September 2009
|
USD 750,000 | |||
18 December 2009
|
USD 750,000 | |||
18 March 2010
|
USD 750,000 | |||
18 June 2010
|
USD 750,000 | |||
18 September 2010
|
USD 750,000 | |||
18 December 2010
|
USD 750,000 | |||
18 March 2011
|
USD 750,000 | |||
18 June 2011
|
USD 750,000 | |||
18 September 2011
|
USD 750,000 | |||
18 December 2011
|
USD 750,000 | |||
18 March 2012
|
USD 750,000 | |||
18 June 2012
|
USD 750,000 | |||
18 September 2012
|
USD 750,000 | |||
18 December 2012
|
USD 750,000 |
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18 March 2013
|
USD 750,000 | |||
18 June 2013
|
USD 750,000 | |||
18 September 2013
|
USD 750,000 | |||
18 December 2013
|
USD 750,000 | |||
18 March 2014
|
USD 750,000 | |||
18 June 2014
|
USD 750,000 | |||
18 September 2014
|
USD 750,000 | |||
18 December 2014
|
USD 750,000 | |||
18 March 2015
|
USD 750,000 | |||
18 June 2015
|
USD 750,000 | |||
18 September 2015
|
USD 750,000 | |||
18 December 2015
|
USD 500,000 |
(b) | In the event that as a result of (i) a restructuring of existing or future Charter Contracts or (ii) a mismatch in terms of revenues between two subsequent Charter Contracts relating to the same Vessel, the Borrowers are not able to pay a Facility A Repayment Instalment in an amount of USD 750,000 on the relevant Facility A Repayment Date and the relevant Borrower has given the Lender not less than 10 days prior notice thereof in writing, the Borrowers may, once during the lifetime of the Facilities, refrain from making such repayment on such date provided that such Facility A Repayment Instalment shall be repaid on the Termination Date relating to Facility A (together with the then applicable Facility A Repayment Instalment). | ||
(c) | If not otherwise fully repaid, the Borrowers shall repay the then outstanding Facility A Loans in full on the Termination Date for Facility A. | ||
(d) | No Borrower may reborrow any part of Facility A which is repaid. |
7.2 | Repayment of Facility B Loans |
(a) | Subject to paragraph (b) below, the Borrowers shall repay the Facility B Loans in instalments on each Facility B Repayment Date set out below such that the amount of the Facility B Loans is reduced on each Facility B Repayment Date by an amount equal to the Facility B Repayment Instalment set out below opposite such Facility B Repayment Date. |
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Facility B Repayment Date | Facility B Repayment Instalment | |||
1 August 2009
|
USD 600,000 | |||
1 November 2009
|
USD 600,000 | |||
1 February 2010
|
USD 600,000 | |||
1 May 2010
|
USD 600,000 | |||
1 August 2010
|
USD 600,000 | |||
1 November 2010
|
USD 600,000 | |||
1 February 2011
|
USD 600,000 | |||
1 May 2011
|
USD 600,000 | |||
1 August 2011
|
USD 600,000 | |||
1 November 2011
|
USD 600,000 | |||
1 February 2012
|
USD 600,000 | |||
1 May 2012
|
USD 600,000 | |||
1 August 2012
|
USD 600,000 | |||
1 November 2012
|
USD 19,300,000 |
(b) | In the event that as a result of (i) a restructuring of existing or future Charter Contracts or (ii) a mismatch in terms of revenues between two subsequent Charter Contracts relating to the same Vessel, the Borrowers are not able to pay a Facility B Repayment Instalment in an amount of USD 600,000 on the relevant Facility B Repayment Date and the relevant Borrower has given the Lender not less than 10 days prior notice thereof in writing, the Borrowers may, once during the lifetime of the Facilities, refrain from making such repayment on such date provided that such Facility B Repayment Instalment shall be repaid on the Termination Date relating to Facility B (together with the then applicable Facility B Repayment Instalment). | ||
(c) | If not otherwise fully repaid, the Borrowers shall repay the then outstanding Facility B Loans in full on the last Termination Date for Facility B. | ||
(d) | No Borrower may reborrow any part of Facility B which is repaid. |
7.3 | Reduction of Overdraft Facility | |
The Overdraft Facility Commitments shall be reduced in instalments on each Reduction Date by an amount equal to the amount set opposite each Reduction Date in the table below: |
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Reduction Date | Reduction Instalment | |||
27 September 2009
|
USD 125,000 | |||
27 December 2009
|
USD 125,000 | |||
27 March 2010
|
USD 125,000 | |||
27 June 2010
|
USD 125,000 | |||
27 September 2010
|
USD 125,000 | |||
27 December 2010
|
USD 125,000 | |||
27 March 2011
|
USD 125,000 |
7.4 | Prepayment fee |
(a) | In the event that Facility A is being prepaid (wholly or partially) within two years of the date of the Original Facility Agreement, the relevant Borrower(s) shall pay to the Lender a fee of 0.375% of the prepaid amount. | ||
(b) | In the event that Facility A is being prepaid (wholly or partially) after the date falling two years after the date of the Original Facility Agreement, the relevant Borrower(s) shall pay to the Lender a fee of 0.25% of the prepaid amount. | ||
(c) | Prepayment of Facility B is allowed without payment of any prepayment fee. |
7.5 | Effect of cancellation and prepayment on scheduled repayments and reductions |
(a) | If (A) the Facility A Commitment, Facility B Commitment or Overdraft Facility Commitment is reduced under Clause 8.1 ( Illegality ) or (B) a Borrower cancels the whole or any part of the Facility A Commitment, Facility B Commitment or the Overdraft Facility Commitment in accordance with Clause 8.10 ( Voluntary cancellation ) then: |
(i) | in the case of the Facility A Commitment, the amount of the Facility Repayment Instalment for each Facility A Repayment Date falling after that cancellation will reduce in inverse chronological order by the amount cancelled; | ||
(ii) | in the case of Facility B Commitment, the amount of the Facility B Repayment Instalment for each Facility B Repayment Date falling after that cancellation will reduce in inverse chronological order by the amount cancelled; and | ||
(iii) | in the case of the Overdraft Facility Commitment, the amount of the Reduction Instalment for each Reduction Date falling after that cancellation will reduce in inverse chronological order by the amount cancelled. |
(b) | If any of the Facility A Loans or the Facility B Loans are prepaid in accordance with Clause 8.1 ( Illegality ) then the amount of the Repayment Instalment for the relevant Facility for each Repayment Date falling after that prepayment will reduce pro rata by the amount of the Facility A Loan or Facility B Loan (as the case may be) prepaid. |
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(c) | If any of the Facility A Loans, Facility B Loans or Overdraft Facility Utilisations are prepaid in accordance with Clause 8.11 ( Voluntary prepayment of Term Loans ), Clause 8.12 ( Voluntary prepayment of Overdraft Facility Utilisations ), Clause 8.4 ( Mandatory Prepayment of Insurance Proceeds ), Clause 8.5 ( Mandatory Prepayment of Capital Market Proceeds ), Clause 8.6 ( Mandatory Prepayment of Excess Cash ) or Clause 8.7 ( Application of Mandatory Prepayments ) then: |
(i) | in the case of Facility A, the amount of the Repayment Instalment for each Repayment Date falling after that prepayment will reduce in inverse chronological order by the amount of the Facility A Loan prepaid; and | ||
(ii) | in the case of Facility B, the amount of the Repayment Instalment for each Repayment Date falling after that prepayment will reduce in chronological order by the amount of the Facility B Loan prepaid; and | ||
(iii) | in the case of a prepayment of the Overdraft Facility under Clause 8.4 ( Mandatory Prepayment of Insurance Proceeds ), Clause 8.5 ( Mandatory Prepayment of Capital Market Proceeds ) and Clause 8.6 ( Mandatory Prepayment of Excess Cash ) only, the amount of the Reduction Instalment for each Reduction Date falling after that prepayment will reduce in inverse chronological order by the amount of the Overdraft Facility Utilisation prepaid. |
8. | PREPAYMENT AND CANCELLATION | |
8.1 | Illegality | |
If, at any time, it becomes unlawful in any applicable jurisdiction for the Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain any Loan: |
(a) | the Lender shall promptly notify the Borrower(s) upon becoming aware of that event whereupon the Facilities will be immediately cancelled; |
(b) | each Borrower shall repay the Loans on the last day of the Interest Period for each Loan occurring after the Lender has notified each Borrower or, if earlier, the date specified by the Lender in the notice delivered to each Borrower (being no earlier than the last day of any applicable grace period permitted by law); |
8.2 | Exit |
(a) | upon the occurrence of: |
(i) | any Flotation; or |
(ii) | a Change of Control; or |
(iii) | the sale of all or substantially all of the assets of an Obligor without the Lenders prior written consent whether in a single transaction or a series of related transactions, |
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(b) | For the purposes of this Clause 8.2 ( Exit ): |
(i) | Change of Control means (a) Mr. I.G. Varouxakis ceases to be a shareholder of the Parent and/or (b) any person (other than Mr. I.G. Varouxakis) or group of persons acting in concert gains direct or indirect control of the Parent. For the purpose of this definition: |
control of the Parent means: |
(A) | the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to: |
(1) | cast, or control the casting, of more than one-half of the maximum number of votes that might be cast at a general meeting of the Parent; or |
(2) | appoint or remove all, or the majority, of the directors or other equivalent officers of the Parent; or |
(3) | give directions with respect to the operating and financial policies of the Parent with which the directors or other equivalent officers of the Parent are obliged to comply; and/or |
(B) | the holding beneficially of more than one-half of the issued shares (or similar equity interests) of the Parent (excluding any part of that issued shares (or similar equity interests) that carries no right to participate beyond a specified amount in a distribution of either profits or capital); |
(ii) | acting in concert means, a group of persons who, pursuant to an agreement or understanding (whether formal or informal), actively co-operate, through the acquisition of shares in the Parent by any of them, either directly or indirectly, to obtain or consolidate control of the Parent. |
(iii) | Flotation means a listing or issue of any of the shares in the share capital or any equity or equity-linked securities of any Obligor (other than the Parent) in or on the Alternative Investment Market or the European Association of Securities Dealers Automated Quotation System, the Official List of the London Stock Exchange Limited or any recognised investment exchange or in or on any exchange or market replacing the same or any other exchange or market in any country. |
8.3 | Mandatory Prepayment on Disposal | |
The Borrowers shall procure that, promptly upon receipt of the same by any Obligor but in any event within 10 Business Days of receipt by the relevant Obligor, an amount equal to the Net Disposal Proceeds received by any Obligor shall be applied in or towards prepayment of the Facilities in accordance with the provisions of this Agreement. |
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8.4 | Mandatory Prepayment of Insurance Proceeds |
Subject to the assignment of insurances included in Schedule 3 ( Security Memorandum ), the Borrowers shall procure that, promptly upon receipt of the same by any Obligor but in any event within 10 Business Days of receipt by the relevant Obligor, an amount equal to the amount of any Insurance Proceeds (net of reasonable costs and expenses and, if any, taxes associated with the relevant insurance claim) received by any Obligor which when aggregated with all other Insurance Proceeds of the Obligors in any Financial Year of the Group, in excess of USD 500,000 shall be applied in or towards prepayment of the Facilities in accordance with the provisions of this Agreement, save for any Insurance Proceeds which the Parent notifies the Lender are, or are to be, applied to the replacement (other than in respect of the Vessels), reinstalment (other than in respect of the Vessels) and/or repair of the assets (including Vessels), provided that if such Insurance Proceeds are not committed to be applied to such purpose within 3 months of receipt of such Insurance Proceeds or are not actually applied to such purpose within 6 months of receipt of such Insurance Proceeds, an amount equal to such Insurance Proceeds shall promptly be applied in prepayment of the Facilities. |
8.5 | Mandatory Prepayment of Capital Market Proceeds |
The Borrowers shall procure that, promptly upon receipt of the same by any member of the Group but in any event within 10 Business Days of receipt by the relevant member of the Group, an amount equal to 10% of any Capital Market Proceeds received by any member of the Group (with a maximum of USD 3,000,000 over the lifetime of the Facilities) shall be applied in prepayment of the Facilities. In addition, an amount equal to 30% of any Capital Market Proceeds remaining after the above prepayment, shall be paid into a deposit account opened with the Lender (the Deposit Account ). Amounts paid into the Deposit Account pursuant to this Clause can only be used (unless otherwise agreed by the Lender) for (i) the business of the Group, (ii) working capital of the Group, (iii) payment by any Obligor of interest and (re)payment of principal in respect of the Facilities or (iv) the purchase of vessels by any member of the Group, which purchase requires prior written approval of the Lender in the event that additional Financial Indebtedness is incurred by any member of the Group in connection with or as a result of such purchase. |
8.6 | Mandatory Prepayment of Excess Cash |
The Borrowers shall procure that within 30 days of delivery of the annual consolidated accounts of the Group under Clause 20.1(a) ( Annual Statements ) for any Financial Year of the Group the Facilities shall be prepaid in accordance with the provisions of this Agreement in an aggregate amount equal to: |
(a) | in the event that the Value to Loan Ratio for such Financial Year is less than or equal to 70%, 75% of Excess Cash for such Financial Year; |
(b) | in the event that the Value to Loan Ratio for such Financial Year is less than or equal to 100% and greater than 70%, 50% of Excess Cash for such Financial Year; |
(c) | in the event that the Value to Loan Ratio for such Financial Year is less than 110% and greater than 100%, 25% of Excess Cash for such Financial Year; and |
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(d) | in the event that the Value to Loan Ratio for such Financial Year is equal to or greater than 110%, 0% of Excess Cash for such Financial Year. |
8.7 | Application of Mandatory Prepayments |
Any prepayment made pursuant to Clause 8.3 ( Mandatory Prepayment on Disposal ), Clause 8.4 ( Mandatory Prepayment of Insurance Proceeds ), Clause 8.5 ( Mandatory Prepayment of Capital Markets Proceeds ) and Clause 8.6 ( Mandatory Prepayment of Excess Cash ) shall be applied in the following order: |
(a) | firstly, in prepayment of the Facility B Loans; |
(b) | secondly, when all the Facility B Loans have been prepaid in full, in prepayment of the Facility A Loans; |
(c) | thirdly, when all the Facility A Loans and all the Facility B Loans have been prepaid in full, in cancellation of Available Commitments under the Overdraft Facility will be cancelled rateably); and |
(d) | fourthly, in prepayment of the Overdraft Facility Utilisations, a cancellation of the Overdraft Facility Commitment. |
8.8 | Payment on last day of Interest Period |
Notwithstanding any provision of this Agreement, all prepayments made pursuant to this Clause 8 may be made to the Holding Account in which case the prepayment obligations shall be modified as specified in such clause in that such prepayment will be deemed to be required to be made on the last day of the then current Interest Period in respect of such Loan or Loans to which the relevant proceeds are to be applied in prepayment. Amounts paid into the Holding Account pursuant to this Clause are blocked and can only be used for the relevant prepayment. |
8.9 | Notifications of Prepayments |
A Borrower shall give written notice to the Lender of any expected receipt (and of the expected date of receipt) of any Net Disposal Proceeds, Insurance Proceeds or Capital Market Proceeds by any member of the Group as soon as reasonably practicable prior to such receipt and in any event shall give written notice to the Lender of the actual receipt of such proceeds by any member of the Group. |
8.10 | Voluntary cancellation |
Each Borrower may, if it gives the Lender not less than 10 Business Days (or such shorter period as the Lender may agree) prior notice, cancel the whole or any part (being a minimum amount of USD 1,000,000) of an Available Facility. |
8.11 | Voluntary prepayment of Term Loans |
(a) | A Borrower to which a Facility A Loan or Facility B Loan has been made may, if it gives the Lender not less than 10 Business Days (or such shorter period as the Lender may agree) prior notice, prepay the whole or any part of any Facility A Loan or Facility B Loan (but, if in part, being an amount that reduces the amount of the Facility A Loan or Facility B Loan by a minimum amount of USD 500,000 and multiples thereof). |
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(b) | A Facility A Loan or Facility B Loan may only be prepaid after the last day of the Availability Period relating thereto (or, if earlier, the day on which the Available Facility is zero). |
(c) | Any prepayment under this Clause 8.11 shall satisfy the obligations under Clause 7.1 ( Repayment of Facility A Loans ) and under Clause 7.2 ( Repayment of Facility B Loans ) in inverse chronological order provided that the Facility A Loans may only be prepaid when all Facility B Loans have been prepaid in full. |
8.12 | Voluntary Prepayment of Overdraft Facility Utilisations |
Each Borrower to which an Overdraft Facility Utilisation has been made may, if it gives the Lender not less than 3 Business Days prior notice, prepay the whole or any part of an Overdraft Facility Utilisation (but if in part, being an amount that reduces the amount of the Overdraft Facility Utilisation by a minimum amount of USD 100,000 and integral multiples of USD 100,000). |
8.13 | Restrictions |
(a) | Any notice of cancellation or prepayment given by any Party under this Clause 8 shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date or dates upon which the relevant cancellation or prepayment is to be made and the amount of that cancellation or prepayment. |
(b) | Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and, subject to any Break Costs, without premium or penalty other than pursuant to Clause 7.4 ( Prepayment fee ). |
(c) | No Borrower may reborrow any part of Facility A or Facilty B which has been prepaid. |
(d) | Unless a contrary indication appears in this Agreement, any part of the Overdraft Facility which is prepaid may be reborrowed in accordance with the terms of this Agreement. |
(e) | No Borrower shall repay or prepay all or any part of the Loans or cancel all or any part of an Available Facility except at the times and in the manner expressly provided for in this Agreement. |
(f) | No amount of the Commitments cancelled under this Agreement may be subsequently reinstated. |
9. | INTEREST |
9.1 | Calculation of interest |
The rate of interest on each Loan for each Interest Period is the percentage rate per annum which is the aggregate of the applicable: |
(a) | Margin; |
(b) | LIBOR; and |
(c) | Mandatory Cost, if any. |
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9.2 | Payment of interest |
(a) | The Borrower to which a Loan has been made shall pay accrued interest on that Loan on the last day of each Interest Period (and, if the Interest Period is longer than six Months, on the dates falling at six monthly intervals after the first day of the Interest Period). |
(b) | If the annual audited financial statements of the Group and related Compliance Certificate received by the Lender show that a higher Margin should have applied during a certain period, then the Borrower(s) shall promptly pay to the Lender any amounts necessary to put the Lender in the position it would have been in had the appropriate rate of the Margin applied during such period. |
9.3 | Default interest |
(a) | If an Obligor fails to pay any amount payable by it under a Finance Document on its due date, interest shall accrue on the overdue amount from the due date up to the date of actual payment (both before and after judgment) at a rate which, subject to paragraph (b) below, is 2.50 per cent higher than the rate which would have been payable if the overdue amount had, during the period of non-payment, constituted a Loan in the currency of the overdue amount for successive Interest Periods, each of a duration selected by the Lender (acting reasonably). Any interest accruing under this Clause 9.3 shall be immediately payable by the Obligor on demand by the Lender. |
(b) | If any overdue amount consists of all or part of a Loan which became due on a day which was not the last day of an Interest Period relating to that Loan: |
(i) | the first Interest Period for that overdue amount shall have a duration equal to the unexpired portion of the current Interest Period relating to that Loan; and |
(ii) | the rate of interest applying to the overdue amount during that first Interest Period shall be 2.50 per cent. higher than the rate which would have applied if the overdue amount had not become due. |
(c) | Default interest (if unpaid) arising on an overdue amount will be compounded with the overdue amount at the end of each Interest Period applicable to that overdue amount but will remain immediately due and payable. |
9.4 | Notification of rates of interest |
The Lender shall promptly notify the Borrowers of the determination of a rate of interest under this Agreement. |
10. | INTEREST PERIODS |
10.1 | Selection of Interest Periods |
(a) | A Borrower may select an Interest Period for a Loan in the Utilisation Request for that Loan or (if the Loan has already been borrowed) in a Selection Notice. |
(b) | Each Selection Notice for a Term Loan is irrevocable and must be delivered to the Lender by the Borrower not later than the Specified Time. |
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(c) | If the Borrower fails to deliver a Selection Notice to the Lender in accordance with paragraph (b) above, the relevant Interest Period will be one Month. |
(d) | Subject to this Clause 10, the Borrowers may select an Interest Period of 3 or 6 Months (in respect of Facility A and Facility B) or any other period agreed between a Borrower and the Lender. |
(e) | An Interest Period for a Facility A Loan or Facility B Loan shall not extend beyond the Termination Date applicable to its Facility. |
(f) | Each Interest Period for a Loan shall start on the Utilisation Date or (if already made) on the last day of its preceding Interest Period. |
10.2 | 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). |
11. | CHANGES TO THE CALCULATION OF INTEREST |
11.1 | Market disruption |
(a) | If a Market Disruption Event occurs in relation to a Loan for any Interest Period, then the rate of interest on that Loan for the Interest Period shall be the percentage rate per annum which is the sum of: |
(i) | the Margin; |
(ii) | the rate notified to the Borrowers by the Lender as soon as practicable and in any event before 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 that Loan from whatever source it may reasonably select (such costs to be clearly documented and shown to the Borrowers in the notice); and |
(iii) | the Mandatory Cost, if any. |
(b) | In this Agreement Market Disruption Event means before close of business in London on the Quotation Day for the relevant Interest Period, the Lender determines that the cost to it of obtaining matching deposits in the Relevant Interbank Market would be in excess of LIBOR. |
11.2 | Alternative basis of interest or funding |
(a) | If a Market Disruption Event occurs and the Lender or a Borrower so requires, the Lender and such Borrower shall enter into negotiations (for a period of not more than thirty days) with a view to agreeing a substitute basis for determining the rate of interest. |
(b) | Any alternative basis agreed pursuant to paragraph (a) above shall be binding on all Parties. |
11.3 | Break Costs |
Each Borrower shall, within three Business Days of demand by the Lender, pay to the Lender its Break Costs attributable to all or any part of a Loan or Unpaid Sum being paid |
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by the Borrower on a day other than the last day of an Interest Period for that Loan or Unpaid Sum. |
12. | FEES |
12.1 | Commitment fee |
(a) | The Borrowers shall pay to the Lender a fee computed at the rate of 0.65 per cent. per annum on the Available Commitment under the Overdraft Facility for the Availability Period applicable to the Overdraft Facility. |
(b) | The accrued commitment fee is payable on the last day of each successive period of three Months which ends during the Availability Period, on the last day of the Availability Period and, if cancelled in full, on the cancelled amount of the Available Facility at the time the cancellation is effective. |
12.2 | Success Fee |
On 1 November 2011, the Borrowers shall pay (or procure the payment) to the Lender a fee in an amount equal to the higher of (i) 2.25 per cent. of the amount of the Facility B Loans then outstanding and (ii) USD 100,000, to the bank account specified to the Borrowers by the Lender. |
13. | TAX GROSS UP AND INDEMNITIES |
13.1 | Definitions |
In this Agreement: |
(a) | is treated as a resident of a Treaty State for the purposes of the Treaty; and |
(b) | does not carry on a business in the jurisdiction where the Borrower is resident for tax purposes through a permanent establishment, a fixed base or a permanent representative with which the Lenders funding of the Loan is effectively connected. |
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13.2 | Tax gross-up |
(a) | Each Obligor shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law. |
(b) | Any Obligor shall promptly upon becoming aware that it 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 Obligor on becoming so aware in respect of a payment payable to it. |
(c) | If a Tax Deduction is required by law to be made by the Obligor, the amount of the payment due from that Obligor shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required. |
(d) | An Obligor is not required to make an increased payment to the Lender under paragraph 13.2(c) for a Tax Deduction from a payment of interest on a Loan, if on the date on which the payment falls due (i) the Obligor making the payment is able to demonstrate that the payment could have been made to the Lender without the, or with a lower, Tax Deduction had the Lender complied with its obligations under paragraph 13.2(f) below or (ii) the Lender is a Treaty Lender and if and to the extent the Borrower making the payment is able to demonstrate that the payment could have been made to the Lender without the, or with a lower, Tax Deduction had the Lender complied with its obligations under paragraph 13.2(g) below. |
(e) | If an Obligor is required to make a Tax Deduction, that Obligor shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law. |
(f) | Within thirty days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Obligor making that Tax Deduction shall deliver to the Lender 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. |
(g) | If the Lender is a Treaty Lender, then the Lender and each Obligor shall co-operate in completing any procedural formalities necessary for that Obligor to obtain authorisation to make that payment without a, or with a lower, Tax Deduction. |
13.3 | Tax indemnity |
(a) | Each Obligor shall (within three Business Days of demand by the Lender) pay to the Lender 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. |
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(b) | Paragraph (a) above shall not apply: |
(i) | with respect to any Tax assessed on the Lender: |
(A) | 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 |
(B) | under the law of the jurisdiction in which the Lenders Facility Office is located in respect of amounts received or receivable in that jurisdiction, |
(ii) | to the extent a loss, liability or cost: |
(A) | is compensated for by an increased payment under Clause 13.2 ( Tax gross-up ); or |
(B) | would have been compensated for by an increased payment under Clause 13.2 ( Tax gross-up ) but was not so compensated solely because one of the exclusions in paragraph (d) of Clause 13.2 ( Tax gross-up ) applied. |
(c) | If the Lender makes or intends to make a claim under paragraph (a) above, the Lender shall promptly notify the Obligors rower of the event which will give, or has given, rise to the claim. |
13.4 | Tax Credit |
If an Obligor makes a Tax Payment and the Lender determines that: |
(a) | a Tax Credit is attributable either to an increased payment of which that Tax Payment forms part, or to that Tax Payment; and |
(b) | the Lender has obtained, utilised and retained that Tax Credit, |
the Lender shall pay an amount to the 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 required to be made by the Obligor. |
13.5 | Stamp taxes |
The Obligors shall pay and, within three Business Days of demand, indemnify the Lender against any cost, loss or liability that the Lender incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of any Finance Document. |
13.6 | Value added tax |
(a) | All amounts set out, or expressed to be payable under a Finance Document by the Obligors to the Lender which (in whole or in part) constitute the consideration for VAT purposes shall be deemed to be exclusive of any VAT which is chargeable on such supply, and accordingly, subject to paragraph (b) below, if VAT is chargeable on any supply made by the Lender to the Obligors |
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under a Finance Document, the Obligors shall pay to the Lender (in addition to and at the same time as paying the consideration) an amount equal to the amount of the VAT (and the Lender shall promptly provide an appropriate VAT invoice to that Obligor). |
(b) | Where a Finance Document requires any Obligor to reimburse the Lender for any costs or expenses, such Obligor shall also at the same time pay and indemnify the Lender against all VAT incurred by the Lender in respect of the costs or expenses to the extent that the Lender reasonably determines that neither it nor any other member of any group of which it is a member for VAT purposes is entitled to credit or repayment from the relevant tax authority in respect of the VAT. |
14. | INCREASED COSTS |
14.1 | Increased costs |
(a) | Subject to Clause 14.3 ( Exceptions ) the Obligors shall, within three Business Days of a demand by the Lender, pay for the account of 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 made after the date of this Agreement. |
(b) | In this Agreement Increased Costs means: |
(i) | a reduction in the rate of return from the Facility or on the Lenders (or its Affiliates) overall capital; |
(ii) | an additional or increased cost; or |
(iii) | 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 to the extent that it is attributable to the Lender having entered into a commitment or funding or performing its obligations under any Finance Document. |
14.2 | Increased cost claims |
If the Lender intends to make a claim pursuant to Clause 14.1 ( Increased costs ) the Lender shall promptly notify the Obligors of the event giving rise to the claim accompanied with a calculation setting out the increased costs. |
14.3 | Exceptions |
(a) | Clause 14.1 ( Increased costs ) does not apply to the extent any Increased Cost is: |
(i) | attributable to a Tax Deduction required by law to be made by an Obligor; |
(ii) | compensated for by Clause 13.3 ( Tax indemnity ) (or would have been compensated for under Clause 13.3 ( Tax indemnity ) but was not so compensated solely because any of the exclusions in paragraph (b) of Clause 13.3 ( Tax indemnity ) applied); |
(iii) | compensated for by the payment of the Mandatory Cost; or |
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(iv) | attributable to the wilful breach by the Lender or its Affiliates of any law or regulation. |
(b) | In this Clause 14.3, a reference to a Tax Deduction has the same meaning given to the term in Clause 13.1 ( Definitions ). |
15. | OTHER INDEMNITIES |
15.1 | Currency indemnity |
(a) | If any sum due from an Obligor under the Finance Documents (a Sum ), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the First Currency ) in which that Sum is payable into another currency (the Second Currency ) for the purpose of: |
(i) | making or filing a claim or proof against that Obligor; |
(ii) | obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings, |
(b) | Each Obligor waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable. |
15.2 | Other indemnities |
(a) | Each Obligor shall, within three Business Days of demand, indemnify the Lender against any reasonable documented cost, loss or liability incurred by the Lender as a result of: |
(i) | the occurrence of any Event of Default; |
(ii) | a failure by an Obligor to pay any amount due under a Finance Document on its due date; |
(iii) | funding, or making arrangements to fund, a Loan requested by a Borrower in a Utilisation Request but not made by reason of the operation of any one or more of the provisions of this Agreement (other than by reason of default or negligence by the Lender); or |
(iv) | a Loan (or part of a Loan) not being prepaid in accordance with a notice of prepayment given by the Borrower. |
(b) | Each Obligor shall promptly indemnify the Lender against any reasonable documented cost, loss or liability incurred by the Lender (acting reasonably) as a result of: |
(i) | investigating any event which it reasonably believes is a Default; or |
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(ii) | acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised. |
16. | MITIGATION BY THE LENDER |
16.1 | Mitigation |
(a) | The Lender shall, in consultation with each Obligor, take all reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to, or cancelled pursuant to, any of Clause 8.1 ( Illegality ), Clause 13 ( Tax gross-up and indemnities ) or Clause 14 ( Increased costs ) including (but not limited to) transferring its rights and obligations under the Finance Documents to another Affiliate or Facility Office. |
(b) | Paragraph (a) above does not in any way limit the obligations of any Obligor under the Finance Documents. |
16.2 | Limitation of liability |
(a) | Each Obligor shall indemnify the Lender for all reasonable documented costs and expenses incurred by the Lender (acting reasonably) as a result of steps taken by it under Clause 16.1 ( Mitigation ). |
(b) | The Lender is not obliged to take any steps under Clause 16.1 ( Mitigation ) if, in the opinion of the Lender (acting reasonably), to do so might be prejudicial to it. |
17. | COSTS AND EXPENSES |
17.1 | Transaction expenses | |
Each Obligor shall promptly on demand pay the Lender the amount of all reasonable costs and expenses (including but not limited to legal fees, accounting fees and, if appropriate, valuation fees) reasonably incurred by it in connection with the negotiation, preparation, printing and execution of: |
(a) | this Agreement and any other documents referred to in this Agreement; and |
(b) | any other Finance Documents executed after the date of this Agreement. |
17.2 | Amendment costs | |
If (a) an Obligor requests an amendment, waiver or consent or (b) an amendment is required pursuant to Clause 27.7 ( Change of currency ), each Obligor shall, within three Business Days of demand, reimburse the Lender for the amount of all reasonable documented costs and expenses (including legal fees) reasonably incurred by the Lender in responding to, evaluating, negotiating or complying with that request or requirement. |
17.3 | Enforcement costs | |
Each Obligor shall, within three Business Days of demand, pay to the Lender the amount of all reasonable documented costs and expenses (including legal fees) incurred by the Lender in connection with the enforcement of, or the preservation of any rights under, any Finance Document. |
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18. | GUARANTEE AND INDEMNITY | |
18.1 | Guarantee and indemnity | |
Each Co-Debtor irrevocably and unconditionally jointly and severally by way of an independent guarantee ( onafhankelijke garantie ): |
(a) | guarantees to the Lender punctual performance by other Obligor of all that Obligors obligations under the Finance Documents; |
(b) | undertakes with the Lender that whenever another Obligor does not pay any amount when due under or in connection with any Finance Document, that Co-Debtor shall immediately on demand pay that amount as if it was the principal obligor; and |
(c) | indemnifies the Lender immediately on demand against any cost, loss or liability suffered by the Lender if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal. The amount of the cost, loss or liability shall be equal to the amount which the Lender would otherwise have been entitled to recover. |
18.2 | Continuing guarantee |
This guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by any Obligor under the Finance Documents, regardless of any intermediate payment or discharge in whole or in part. |
18.3 | Reinstatement |
If any payment by an Obligor or any discharge given by the Lender (whether in respect of the obligations of any Obligor or any security for those obligations or otherwise) is avoided or reduced as a result of insolvency or any similar event: |
(a) | the liability of each Obligor shall continue as if the payment, discharge, avoidance or reduction had not occurred; and |
(b) | the Lender shall be entitled to recover the value or amount of that security or payment from each Obligor, as if the payment, discharge, avoidance or reduction had not occurred. |
18.4 | Waiver of defences | |
The obligations of each Co-Debtor under this Clause 18.4 will not be affected by an act, omission, matter or thing which, but for this Clause, would reduce, release or prejudice any of its obligations under this Clause 18.4 (without limitation and whether or not known to it or the Lender) including: |
(a) | any time, waiver or consent granted to, or composition with, any Obligor or other person; |
(b) | the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of any member of the Group; |
(c) | the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any Obligor or other person or any non-presentation or non-observance of |
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any formality or other requirement in respect of any instrument or any failure to realise the full value of any security; |
(d) | any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor or any other person; |
(e) | any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of any Finance Document or any other document or security including without limitation any change in the purpose of, any extension of or any increase in any facility or the addition of any new facility under any Finance Document or other document or security; |
(f) | any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security; or |
(g) | any insolvency or similar proceedings. |
18.5 | Co-Debtor Intent | |
Without prejudice to the generality of Clause 18.4 ( Waiver of defences ), each Co-Debtor expressly confirms that it intends that this guarantee shall extend from time to time to any (however fundamental) variation, increase, extension or addition of or to any of the Finance Documents and/or any facility or amount made available under any of the Finance Documents for the purposes of or in connection with any of the following: acquisitions of any nature; increasing working capital; enabling investor distributions to be made; carrying out restructurings; refinancing existing facilities; refinancing any other indebtedness; making facilities available to new borrowers; any other variation or extension of the purposes for which any such facility or amount might be made available from time to time; and any fees, costs and/or expenses associated with any of the foregoing. |
18.6 | Immediate recourse | |
Each Co-Debtor waives any right it may have of first requiring the Lender to proceed against or enforce any other rights or security or claim payment from any person before claiming from that Co-Debtor under this Clause 18.6 ( Immediate recourse ). This waiver applies irrespective of any law or any provision of a Finance Document to the contrary. |
18.7 | Appropriations | |
Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full, the Lender may: |
(a) | refrain from applying or enforcing any other moneys, security or rights held or received by the Lender in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and no Co-Debtor shall be entitled to the benefit of the same; and |
(b) | hold in an interest-bearing suspense account any moneys received from any Co-Debtor or on account of any Co-Debtors liability under this Clause 18.7. |
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18.8 | Deferral of Co-Debtors rights | |
Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full and unless the Lender otherwise directs, no Co-Debtor will exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents: |
(a) | to be indemnified by an Obligor; |
(b) | to claim any contribution from any other guarantor of any Obligors obligations under the Finance Documents; and/or |
(c) | to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Lender under the Finance Documents or of any other guarantee or security taken pursuant to, or in connection with, the Finance Documents by the Lender. |
18.9 | Release of Co-Debtors right of contribution | |
If any Co-Debtor (a Retiring Co-Debtor ) ceases to be a Co-Debtor in accordance with the terms of the Finance Documents for the purpose of any sale or other disposal of that Retiring Co-Debtor then on the date such Retiring Co-Debtor ceases to be a Co-Debtor: |
(a) | that Retiring Co-Debtor is released by each other Co-Debtor from any liability (whether past, present or future and whether actual or contingent) to make a contribution to any other Co-Debtor arising by reason of the performance by any other Co-Debtor of its obligations under the Finance Documents; and |
(b) | each other Co-Debtor waives any rights it may have by reason of the performance of its obligations under the Finance Documents to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Lender under any Finance Document or of any other security taken pursuant to, or in connection with, any Finance Document where such rights or security are granted by or in relation to the assets of the Retiring Co-Debtor. |
18.10 | Waiver of rights | |
Each Co-Debtor waives all its rights and defences pursuant to paragraphs 1, 2 and 3 of Article 7:852, Article 7:853 and Article 7:855 Dutch Civil Code and all its rights and defences pursuant to Article 6:139 and Article 6:154 Dutch Civil Code as well as all other rights and defences accorded to it by law or otherwise including, without limitation, the right of set-off, insofar as such a waiver is not contrary to mandatory provisions of law. |
18.11 | Additional security | |
This guarantee is in addition to and is not in any way prejudiced by any other guarantee or security now or subsequently held by any Finance Party. |
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19. | REPRESENTATIONS | |
Each Obligor makes the representations and warranties set out in this Clause 19 to the Lender. |
19.1 | Status |
(a) | It and each of its Subsidiaries is a corporation or a company, duly incorporated and validly existing under the law of its jurisdiction of incorporation or organisation. |
(b) | It and each of its Subsidiaries has the legal capacity to own its assets and carry on its business as it is being conducted. |
19.2 | Binding obligations and Security | |
The obligations expressed to be assumed by it in each Finance Document are legal, valid, binding and enforceable obligations and each of the Security Documents (as and when entered into) creates valid Security with the ranking it is expressed to have in favour of the Lender in accordance with the terms thereof. |
19.3 | Power and authority |
(a) | It 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 Finance Documents to which it is a party and the transactions contemplated by those Finance Documents. |
(b) | No limit on its powers will be exceeded as a result of the borrowing, grant of security or giving of guarantees or indemnities contemplated by the Finance Documents to which it is a party. |
19.4 | Execution of Finance Documents |
(a) | The execution by it of the Finance Documents to which it is a party and its exercise of its rights and performance of its obligations thereunder do not and will not conflict: |
(i) | with any law or regulation or official or judicial order applicable to it; |
(ii) | with any agreement, mortgage, bond or other instrument which is binding upon it or any of its assets in a manner or to an extent that such conflict has or could reasonably be expected to have a Material Adverse Effect unless a waiver of such breach has been granted or the relevant Obligor is involved in good faith discussions to replace such contract and the Lender has been informed of this discussion; or |
(iii) | with the constitutional documents of any member of the Group. |
(b) | Each Obligor has the power to enter into the Finance Documents to which it is a party and all corporate or other action required to authorise its execution of such Finance Documents and the performance of its obligations thereunder has been duly taken. |
19.5 | No Obligation to Create Encumbrances | |
The execution by it of the Finance Documents to which it is a party and its exercise of its rights and performance of its obligations thereunder will not result in the existence of nor |
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19.6 | Validity and Admissibility in Evidence | |
All Authorisations required in order (a) to enable it lawfully to enter into, exercise its rights under and perform and comply with the obligations expressed to be assumed by it in the Finance Documents to which it is a party and (b) to make the Finance Documents to which the Borrower is a party admissible in evidence in its Relevant Jurisdiction have been obtained and are in full force and effect or will be obtained and will be in full force and effect when required. |
19.7 | Governing law and enforcement |
(a) | the choice of Dutch law as the governing law of the Finance Documents (other than the Security Documents) will be recognised and enforced in its Relevant Jurisdiction; |
(b) | any judgment obtained in The Netherlands in relation to a Finance Document will be recognised and enforced in its Relevant Jurisdiction; |
(c) | the choice of law set forth as the governing law of each Security Documents will be recognised and enforced in its Relevant Jurisdiction; and |
(d) | any judgment obtained in relation to a Security Document in the jurisdiction of the governing law of that Security Document will be recognised and enforced in its Relevant Jurisdiction. |
19.8 | Insolvency | |
No: |
(a) | corporate action, legal proceeding or other procedure or step described in paragraph (a) of Clause 23.7 ( Insolvency proceedings ); or |
(b) | creditors process described in Clause 23.8 ( Creditors process ), |
has been taken or threatened in relation to a member of the Group and none of the circumstances described in Clause 23.6 ( Insolvency ) applies to a member of the Group. |
19.9 | Taxation |
(a) | It is not (and none of its Subsidiaries is) materially overdue in the filing of any Tax returns and it is not (and none of its Subsidiaries is) overdue in the payment of any amount in respect of Tax or more. |
(b) | No claims or investigations are being, or are reasonably likely to be, made or conducted against it (or any of its Subsidiaries) with respect to Taxes such that a liability of, or claim against, any member of the Group is reasonably likely to arise. |
(c) | It is resident for Tax purposes only in the jurisdiction of its incorporation. |
19.10 | No Immunity |
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19.11 | No default |
(a) | No Default is continuing or is reasonably likely to result from the making of any Utilisation or the entry into, the performance of, or any transaction contemplated by, any Finance Document. |
(b) | No other event or circumstance is outstanding which constitutes (or, with the expiry of a grace period, the giving of notice, the making of any determination or any combination of any of the foregoing, would constitute) a default or termination event (however described) under any other agreement or instrument which is binding on it or any of its Subsidiaries or to which its (or any of its Subsidiaries) assets are subject which has or is reasonably likely to have a Material Adverse Effect. |
19.12 | Financial statements |
The most recent financial statements delivered pursuant to Clause 20.1 ( Financial statements ): |
(a) | have been prepared in accordance with GAAP; and |
(b) | give a true and fair view of (if audited) or fairly present (if unaudited) the financial condition of each Obligor as at the end of, and results of operations for, the period to which they relate. |
19.13 | No misleading information |
(a) | Any factual information provided by any member of the Group, including the opening balance sheet of each Obligor, was true, complete and accurate in all material respects as at the date it was provided or as at the date (if any) at which it is stated. |
(b) | No information has been given or withheld that results in any material factual information being untrue or misleading. |
(c) | All other written information provided by each Obligor or any member of the Group was (subject to any reservations or qualifications made by each Obligor or the relevant member of the Group as at the date such information was provided) true and accurate in all material respects as at the date it was provided and not misleading in any material respect. |
19.14 | Pari passu ranking | |
Its payment obligations under the Finance Documents 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. |
19.15 | No proceedings pending or threatened | |
No litigation, arbitration or administrative proceedings of or before any court, arbitral body or agency which are reasonably likely to be adversely determined and, if adversely determined, could reasonably be expected to have a Material Adverse Effect have been |
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started or (to the best of its knowledge and belief) threatened against it or any of its Subsidiaries. |
19.16 | Encumbrances | |
Save for Permitted Encumbrances, no Encumbrance exists over all or any of the present or future revenues or assets of any member of the Group. |
19.17 | Financial Indebtedness | |
Save for Permitted Financial Indebtedness, no member of the Group has any Financial Indebtedness. |
19.18 | Environmental Compliance | |
Each member of the Group is in compliance with Clause 22.4 ( Environmental Compliance ) and to the best of its knowledge and belief (having made due and careful enquiry) no circumstances have occurred which would prevent compliance with Environmental Laws in a manner or to an extent which has or could reasonably be expected to have a Material Adverse Effect. |
19.19 | Good title to assets | |
It and each of its Subsidiaries has a good, valid and marketable title to, or valid leases or licences of, and all appropriate Authorisations to use, the assets necessary to carry on its business as presently conducted. |
19.20 | Ownership and Group Structure | |
The Group Structure Chart is true, complete and accurate in all material respects. |
19.21 | Single Ship Company | |
Each Borrower is and will remain a single ship company for the purposes of owning, leasing and operating the relevant Vessels and any undertaking, business or activities related thereto. |
19.22 | Compliance with Applicable Laws | |
Each member of the Group has complied in all respects with all laws to which it may be subject, if failure so to comply would materially impair an Obligors ability to perform its obligations under the Finance Documents. |
19.23 | Vessels and Other Assets |
(a) | Subject to any Permitted Encumbrances: |
(i) | Adventure Two S.A. has good title to Free Destiny and is duly documented in the name of Adventure Two S.A. under the laws and flag of the Marshall Islands, and Adventure Two S.A. shall document the Free Destiny in its name under the laws and flag of Liberia on or about the Effective Date, such change in flag having been consented by the Lender; |
(ii) | Adventure Three S.A. has good title to Free Envoy and is duly documented in the name of Adventure Three S.A. under the laws and flag of the Marshall Islands, and Adventure Three S.A. shall document the Free Envoy in its name under the laws and flag of Liberia on or about the Effective Date, such change in flag having been consented to by the Lender; |
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(iii) | Adventure Seven S.A. has good title to Free Knight and is duly documented in the name of Adventure Seven S.A. under the laws and flag of the Bahamas; and |
(iv) | Adventure Eleven S.A. has good title to Free Maverick and is duly documented in the name of Adventure Eleven S.A. under the laws and flag of Liberia, and |
(b) | Each Vessel is classed in a class acceptable to the Lender on the date hereof and is classed, free of any overdue recommendations with a classification society acceptable to the Lender. |
(c) | So far as it is aware (after having made due and careful enquiry), the manager of the Vessels complies with all applicable international regulations concerning the operation of the Vessels. |
19.24 | Intellectual Property Rights | |
It owns or has validly licensed to it and has properly registered (in the case of registrable Intellectual Property) and taken all other necessary or appropriate action to maintain and protect its Intellectual Property which is material in the context of its business and which is required by it in order to carry on its business as it is being conducted and has not (to the best of its knowledge), in carrying on its business infringed any third party Intellectual Property in a manner that has or could reasonably be expected to have a Material Adverse Effect. |
19.25 | Repetition |
(a) | All the representations and warranties in this Clause 19 are made by each Obligor on the date of this Agreement. |
(b) | All the representations and warranties in this Clause 19 are deemed to be made by each Obligor on the Effective Date. |
(c) | The Repeating Representations are deemed to be made by each Obligor on the date of each Utilisation Request, on each Utilisation Date and on the first day of each Interest Period. |
(d) | Each representation or warranty deemed to be made after the date of this Agreement shall be deemed to be made by reference to the facts and circumstances existing at the date the representation or warranty is deemed to be made. |
20. | INFORMATION UNDERTAKINGS | |
The undertakings in this Clause 20 remain in force from the date of this Agreement for so long as any amount is outstanding under the Finance Documents. |
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20.1 | Financial Statements | |
The Parent shall supply to the Lender: |
(a) | as soon as the same becomes available, but in any event within 120 days after the end of each of its Financial Years, its audited consolidated financial statements for that Financial Year; and | ||
(b) | as soon as the same becomes available, but in any event within 60 days after the end of each Financial Quarter, its audited (if available) consolidated financial statements for that Financial Quarter. |
20.2 | Provision and contents of Compliance Certificate |
(a) | The Parent shall supply a Compliance Certificate to the Lender with each set of its audited consolidated annual financial statements and each set of its consolidated quarterly financial statements delivered pursuant to Clause 20.1 ( Financial Statements ). | ||
(b) | Each Compliance Certificate shall, amongst other things, set out (in reasonable detail) computations as to compliance with Clause 21 ( Financial Covenants ) and prepayments to be made from Excess Cash under Clause 8.6 ( Mandatory Prepayment of Excess Cash ) and the Margin computations set out in the definition Margin as at the date as at which those financial statements were drawn up. | ||
(c) | Each Compliance Certificate shall be signed by two directors of the Parent and, if required to be delivered with the consolidated annual financial statements of the Parent, shall be reported on by the Groups auditors in the form agreed by the Parent and the Lender. |
20.3 | Requirements as to financial statements |
(a) | Each set of financial statements delivered by the Obligors pursuant to Clause 20.1 ( Financial statements ) shall be certified by a duly authorised representative of such Obligor as fairly representing its financial condition as at the date as at which those financial statements were drawn up. | ||
(b) | Each Obligor shall procure that each set of financial statements delivered pursuant to paragraph (a) of Clause 20.1 ( Financial statements ) is delivered together with management commentary and profit and loss statements for each Obligor. |
20.4 | Information: miscellaneous | |
Each Obligor shall supply to the Lender: |
(a) | at the same time as they are dispatched, copies of all documents dispatched by the Obligor to its shareholders generally (or any class of them) or dispatched by the Obligors to its creditors generally (or any class of them); | ||
(b) | promptly upon becoming aware of them, the details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against any member of the Group or its assets, and which, if adversely determined, are reasonably likely to have a Material Adverse Effect; |
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(c) | promptly on request, such further information regarding the financial condition, assets and operations of the Group and/or any member of the Group (including any requested amplification or explanation of any item in the financial statements, budgets or other material provided by any Obligor under this Agreement, any changes to management of the Group and an up to date copy of its Shareholders register (or equivalent in its jurisdiction of incorporation)) as any Party to this Agreement may reasonably request; | ||
(d) | promptly, details of an issue or allocation of or, promptly upon becoming aware of the same, a transfer of the legal or beneficial ownership of or change of control of, any share of the Obligors (other than the Parent); | ||
(e) | promptly, details of any material changes in the insurance cover in respect of the Group and copies of insurance policies or certificates of insurance in respect of the Group or such other evidence of the existence of those policies as may be reasonably acceptable to the Lender; | ||
(f) | promptly, any actuarial reports relating to pension schemes operated by or maintained for the benefit of members of the Group and/or any of their employees; and | ||
(g) | promptly, such further information regarding the business, financial condition or assets of the Group as the Lender may reasonably request. |
20.5 | Valuation Report | |
Each Obligor shall at the reasonable request of the Lender, but in any event once per Financial Year, deliver to the Lender copies of the updated Valuation Reports relating to each Vessel, by a valuer acceptable to the Lender, addressed to the Lender, in a form and substance satisfactory to the Lender, at the costs of the Obligors. |
20.6 | Notification of default |
(a) | Each Obligor shall notify the Lender of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence. | ||
(b) | Promptly following a request by the Lender, each Obligor shall supply to the Lender a certificate signed by two duly authorised representatives or senior officers of such Obligor certifying that no Default is continuing (or if a Default is continuing, specifying the Default and the steps, if any, being taken to remedy it). | ||
(c) | The Parent shall, promptly upon becoming aware thereof, notify the Lender of the expectation that it will not meet the financial covenants set out in Clause 21 ( Financial covenants ). |
20.7 | Know your customer checks | |
If: |
(i) | the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement; or | ||
(ii) | any change in the status of the Obligors after the date of this Agreement. |
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obliges the Lender to comply with know your customer or similar identification procedures in circumstances where the necessary information is not already available to it, the Obligors shall promptly upon the request of the Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Lender in order for the Lender to carry out and be satisfied it has complied with all necessary know your customer or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents. |
20.8 | Accounting Terms | |
All accounting expressions which are not otherwise defined herein shall be construed in accordance with GAAP. |
20.9 | Disclosure of information | |
Any publicity in respect of the transactions contemplated by the Finance Documents is to be agreed in advance between the Lender and the Obligors. |
21. | FINANCIAL COVENANTS |
21.1 | Financial Condition | |
The Borrowers shall ensure that: |
(a) | Interest Cover Ratio | ||
The Interest Cover Ratio in respect of any Relevant Period specified in column 1 below shall not be less than the ratio set out in column 2 below set opposite that Relevant Period: |
Column 1: | Column 2: | |
Relevant Period: | Interest Cover Ratio (%) | |
30 June 2009
|
3.75:1.00 | |
|
||
30 September 2009
|
3.75:1.00 | |
|
||
31 December 2009
|
3.75:1.00 | |
|
||
31 March 2010
|
3.75:1.00 | |
|
||
30 June 2010
|
3.75:1.00 | |
|
||
30 September 2010
|
3.00:1.00 | |
|
||
31 December 2010
|
3.00:1.00 | |
|
||
Thereafter
|
To be recalculated, reset and determined by the Lender (in its reasonable discretion) in consultation with the Parent in accordance with the proviso below |
provided that the Lender shall (in its reasonable discretion), by no later than 31 October 2010, recalculate, reset and determine the level of the Interest Cover |
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Ratio in respect of any Relevant Period ending after 31 December 2010, in consultation with the Parent. |
(b) | Value to Loan | ||
The Value to Loan Ratio for the period mentioned in column 1 below shall exceed the percentage included in column 2 below set opposite such period: |
Column 1: | Column 2: | |||
Period | Value to Loan Ratio (%) | |||
From the Effective Date until and including 30 June 2010
|
70 | % | ||
From 1 July 2010 until and including 30 June 2011
|
100 | % | ||
From 1 July 2011 until and including 30 June 2012
|
110 | % | ||
From 1 July 2012 until and including 30 December 2012
|
120 | % | ||
From 31 December 2012 onwards
|
125 | % |
(c) | Debt Service Cover Ratio | ||
The Debt Service Cover Ratio in respect of any Relevant Period specified in column 1 below shall not be less than the ratio set out in column 2 below set opposite that Relevant Period: |
Column 1: | Column 2: | |
Relevant Period: | Debt Service Cover Ratio (%) | |
31 December 2009
|
1.00:1.00 | |
|
||
31 December 2010
|
1.00:1.00 | |
|
||
Thereafter
|
To be recalculated, reset and determined by the Lender (in its reasonable discretion) in consultation with the Parent in accordance with the proviso below |
provided that (i) the USD 5,000,000 prepayment to Credit Suisse made on 31 July 2009 by FreeSeas Inc. shall be excluded from the definition of Net Total Debt Service for the purpose of calculating the Debt Service Cover Ratio for |
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each Relevant Period ending in 2009 and (ii) the Lender shall (in its reasonable discretion), by no later than 31 October 2010, recalculate, reset and determine the level of the Debt Service Cover Ratio in respect of any Relevant Period ending after 31 December 2010, in consultation with the Parent. |
(d) | Gearing | ||
Gearing in respect of any Relevant Period shall not be higher than 2.5:1.00. |
21.2 | Financial definitions | |
For the purposes of this Agreement the following terms have the following meanings. | ||
Annual Accounts means, the Parents annual accounts, consisting of the consolidated balance sheet, profit and loss account and accompanying notes, including an unqualified audit certificate, drawn up by Price Waterhouse Coopers or another comparable firm acceptable to the Lender in accordance with the calculation bases and accounting principles applied in the Parents consolidated annual accounts for the financial year 2008. | ||
Capital Expenditure means, expenditure that should be treated as capital expenditure in accordance with GAAP. | ||
Consolidated EBIT means, in respect of any Relevant Period, the consolidated net operating profit of the Parent plus corporation tax or other taxes on income or gains, plus Net Interest Expense in respect of that Relevant Period, plus extraordinary and/or non-operational costs and charges less extraordinary and/or non-operational income or gains in respect of that Relevant Period. | ||
Consolidated EBITD means, in respect of any Relevant Period, Consolidated EBIT for that Relevant Period plus depreciation in respect of that Relevant Period. | ||
Consolidated EBITDA means, in respect of any Relevant Period, the Consolidated EBITD for that Relevant Period plus the amount attributable to amortization of goodwill and any other intangible assets (including capitalized transaction costs) during that Relevant Period. | ||
Consolidated Net Finance Charges means, for any Relevant Period, the aggregate amount of the accrued interest, arrangement fee and other amounts in the nature of interest in respect of all borrowings whether paid, payable or capitalized by the Parent in respect of that Relevant Period: |
(i) | excluding any such obligations owed to the Parent; | ||
(ii) | including the interest element of leasing and hire purchase payments under any such contract which would, in accordance with the accounting principles, be treated as a finance or capital lease; | ||
(iii) | including any accrued commission, fees, discounts and other finance payments payable by the Parent under any interest rate hedging arrangement, if any; |
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(iv) | deducting any accrued commission, fees , discount or other finance payments owing to the Parent under any interest rate hedging instrument, if any; | ||
(v) | deducting any accrued interest owing to the Parent on any deposit or bank account; and | ||
(vi) | excluding any acquisition costs. |
Debt Service Cover Ratio means, in relation to any Relevant Period, Free Operating Cash Flow for such Relevant Period divided by Net Total Debt Service for such Relevant Period. | ||
Excess Cash means, in respect of any Relevant Period, Free Operating Cash Flow for that Relevant Period minus Net Total Debt Service for that Relevant Period minus any voluntary prepayments made in respect of this Agreement in that Relevant Period. | ||
Free Operating Cash Flow means, in respect of any Relevant Period, Consolidated EBITDA for that Relevant Period after: | ||
Adding : |
(i) | any decrease in the amount of Working Capital; | ||
(ii) | any cash receipt in respect of any exceptional or extraordinary item (including, without limitation, the proceeds of the sale of any assets other than material part of the business disposal proceeds or the proceeds from the disposal of a material asset); | ||
(iii) | any increase in provisions, other non-cash debits and other non-cash charges taken into account in establishing Consolidated EBITDA; |
And deducting : |
(i) | any amount of Capital Expenditure actually made by the Group; | ||
(ii) | any increase in the amount of Working Capital; | ||
(iii) | any cash payment in respect of any exceptional or extraordinary item; | ||
(iv) | any amount actually paid or due and payable in respect of taxes on the profits of the Group; | ||
(v) | any decrease in provisions and other non-cash credits taken into account in establishing Consolidated EBITDA. |
Gearing means Total Gross Debt for any Relevant Period divided by Tangible Net Worth on the last day of that Relevant Period. | ||
Interest Coverage Ratio means, in relation to any Relevant Period, Consolidated EBITD for such Relevant Period divided by the sum of Consolidated Net Finance Charges for such Relevant Period. |
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Interest Expense means, in respect of any relevant Period and any Financial Indebtedness of the Group referred to in the definition of Total Net Debt, the aggregate of all continuing, regular or periodic costs, charges and expenses incurred in effecting, servicing or maintaining such Financial Indebtedness in respect of such Relevant Period (but not agency or underwriting fees) including; |
(a) | gross interest and arrangement fee on any form of such Financial Indebtedness which has accrued as an obligation of the Group during that Relevant Period, including the interest element of finance leases; and | ||
(b) | the consideration given by the Group during that Relevant Period by way of discount in connection with such Financial Indebtedness by way of acceptance credit, bill discounting or other like arrangement. |
Net Interest Expense means, in respect of any Relevant Period, Interest Expense for such Relevant Period less interest, commission, fees, discounts and other finance charges receivable during that Relevant Period (including interest, commission, fees, discounts and other finance charges receivable under Permitted Treasury Transactions). | ||
Net Total Debt Service means, in respect of any Relevant Period, the aggregate of: |
(a) | Net Interest Expense for such Relevant Period; and | ||
(b) | all scheduled repayments of capital or principal under the terms of any Financial Indebtedness of any member of the Group (excluding (A) any Financial Indebtedness owed by any member of the Group to any other member of the Group, (B) any Financial Indebtedness referred to in paragraph (i) of the definition of Financial Indebtedness in Clause 1.1 ( Definitions ) and (C) any amounts due under any overdraft or overdraft facility and which were available for simultaneous redrawing according to the terms of that facility) in each case which fall due during that Relevant Period. |
Quarterly Accounts means the Parents consolidated balance sheet, profit and loss account, and compliance certificate, in accordance with the calculation bases and accounting principles applied in the Parents consolidated Annual Accounts for the Financial Year. | ||
Relevant Period means each period of twelve months ending on the last day of each of the Groups Financial Years and each period of twelve months ending on each Quarter Date starting with the period of twelve months ending on 30 June 2009. | ||
Tangible Net Worth means, issued and paid-up share capital plus reserves, deferred tax liabilities and loans subordinated to the Groups Financial Indebtedness to the Lender, minus intangible assets, deferred tax assets, participating interests, receivables from shareholders and/or directors and shares FreeSeas Inc. holds in his own company, as shown in the Annual Accounts. | ||
Total Gross Debt means, in respect of any Relevant Period, the aggregate of all Financial Indebtedness of the Group as at the last day of such Relevant Period. |
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Total Net Debt means, in respect of any Relevant Period, the aggregate of all outstanding Financial Indebtedness of the Group as at the last day of such Relevant Period and less all Cash as at the last day of such Relevant Period. | ||
Value means the aggregate fair market value of all Vessels which are subject to Security in favour of the Lender as set out in the (most recent) (desk) Valuation Report relating to the Vessels from a broker acceptable to the Lender. | ||
Value to Loan Ratio means the ratio of: |
(a) | the Value; to | ||
(b) | the aggregate of the amounts outstanding under the Facilities at any time. |
Working Capital means trade and other debtors in respect of operating items of any member of the Group, plus prepayments and stock, less trade and other creditors in respect of operating items of the Group and less accrued expenses and accrued costs of the Group. |
21.3 | Financial Testing | |
The financial covenants set out in Clause 21.1 ( Financial Condition ) shall be tested quarterly by reference to the Groups consolidated annual and quarterly financial statements and the annual and quarterly Compliance Certificates delivered pursuant to Clause 20.2 ( Provisions and contents of Compliance Certificate ) in respect of such Relevant Period provided that: |
(i) | the financial covenant set out in Clause 21.1(b) ( Value to Loan Ratio ) shall be tested as of the Relevant Period ending 30 June 2010; and | ||
(ii) | the financial covenant set out in Clause 21.1(c) ( Debt Service Cover Ratio ) shall be tested annually by reference to the Groups consolidated annual financial statements and shall, for information purposes only, be determined quarterly on the basis of the quarterly financial statements. |
22. | GENERAL UNDERTAKINGS | |
The undertakings in this Clause 22 remain in force from the date of this Agreement for so long as any amount is outstanding under the Finance Documents. | ||
22.1 | Maintenance of Legal Validity | |
Each Obligor shall, and shall ensure that each member of the Group shall comply with the terms of and do all that is necessary to maintain in full force and effect in all material respects all Authorisations required in or by the laws of its Relevant Jurisdiction to enable it lawfully to conduct its business and (to the extent applicable) enter into and perform its obligations under the Finance Documents to which it is a party in all material respects and to ensure the legality, validity, enforceability or admissibility in evidence in its Relevant Jurisdiction of such Finance Documents. | ||
22.2 | Insurance |
(a) | Each Obligor shall effect and maintain insurances on and in relation to its business and assets with reputable underwriters or insurance companies acceptable to the Lender against such risks and to such extent as is usual for |
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prudent companies carrying on a business such as that carried on by such member of the Group and, in the case of any Vessel subject to Security, for the greater of (i) the Value and (ii) an amount which in aggregate with the amounts for which the other Vessels are insured is 120% of the aggregate principal amount outstanding under the Facilities. |
(b) | Any Obligor owning any Vessel which is subject to Security shall, by no later than the Effective Date, enter into and maintain a mortgagees interest insurance agreement with the Lender covering 110% of the amounts outstanding under the Facilities in form and substance satisfactory to the Lender and taken out by the Lender at the costs of the Obligors. The premiums associated therewith shall be paid by the relevant Obligors in addition to any other amounts payable under or pursuant to this Agreement. | ||
(c) | Any Obligor curing any Vessel which is subject to Security shall at all times ensure that each insurance policy relating thereto is in the names of the Obligors concerned and shall forthwith notify the insurer(s) of property and equipment insurances of the Security created over its rights under each insurance policy in favour of the Lender and shall ensure that the Lender is mentioned as the loss payee on each of the insurance policies over which Security is created. |
22.3 | Vessels and other assets | |
Each Obligor shall: |
(a) | ensure that, at all times, each Vessel is classed in at least the class acceptable to the Lender at the date hereof and remains classed, in good working order and free of any overdue material recommendations with a classification society acceptable to the Lender; | ||
(b) | ensure that each member of the Group has good title to all of its assets necessary to carry on its business and shall enjoy such possession under all leases of property or assets (if any) leased by it as is necessary for the conduct of such member of the Groups business; | ||
(c) | at all times, comply with, or procure that the manager of the relevant Vessel will comply with, all applicable international regulations concerning the operation of the Vessels; | ||
(d) | ensure that each of the Vessels which is subject to Security has a flag acceptable to the Lender; | ||
(e) | ensure that the flag, ownership or management of each of the Vessels shall not be changed, other than with the prior written consent of the Lender (not to be unreasonably withheld or delayed); | ||
(f) | cause, or procure, each of the Vessels to be operated, serviced, maintained and repaired so that the condition and operating efficiency thereof will be maintained and preserved (ordinary wear and tear excepted) in all material respects at all times; |
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(g) | procure that, other than as otherwise permitted under this Agreement, no Security is granted over any Vessel, the Charter Contracts or any other assets owned by any Obligor without the prior written consent of the Lenders; and | ||
(h) | not appoint or allow the appointment of a replacement manager of any Vessel without the prior written consent of the Lender (such replacement manager to be acceptable to the Lender). |
22.4 | Environmental Compliance | |
Each Obligor shall and shall ensure that each member of the Group shall comply in all respects with all Environmental Laws relevant for the Group and obtain and maintain any Environmental Permits relevant for the Group and take all reasonable steps in anticipation of known or expected future changes to or obligations under the same where failure to do so has or is reasonably likely to have a Material Adverse Effect. | ||
22.5 | Environmental Claims | |
Each Obligor shall inform the Lender in writing as soon as reasonably practicable upon becoming aware of the same if any Environmental Claim has been commenced which is reasonably likely to be adversely determined against a member of the Group and if adversely determined against such member of the Group, could reasonably be expected to have a Material Adverse Effect. | ||
22.6 | Claims Pari Passu | |
Each Obligor shall ensure that at all times the claims of the Lender against it under the Finance Documents rank at least pari passu with the claims of all its other Obligors other unsecured and unsubordinated creditors save those whose claims are preferred by any bankruptcy, insolvency, liquidation or other similar laws of general application. | ||
22.7 | Bank Accounts | |
None of the Borrowers shall have any bank account other than bank accounts held with the Lender and shall ensure that all cash flows relating to the Charter Contracts and all money transfers ( betalingsverkeer ) of the Borrowers shall be administered on such bank accounts. The Parent shall have bank accounts only with the Lender and/or Credit Suisse and/or First Business Bank of Greece. | ||
22.8 | Negative Pledge | |
None of the Obligors shall and each of them shall ensure that no other member of the Group shall create or permit to subsist any Encumbrance over all or any of its present or future assets other than a Permitted Encumbrance. | ||
22.9 | Loans and Guarantees | |
None of the Obligors shall, and each of them shall ensure that no other member of the Group shall make any loans, grant any credit or give any guarantee or indemnity (except as required or permitted pursuant to the Finance Documents) to or for the benefit of any person or otherwise voluntarily incur any indebtedness or assume any liability, whether actual or contingent, in respect of any obligation of any other person (except as required or permitted pursuant to the Finance Documents) other than Permitted Financial Indebtedness provided that: |
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(a) | the Parent may make a loan, grant credit or give a guarantee for the benefit of any person not being a member of the Group as long as such loan, credit or guarantee does not exceed USD 1,000,000 (or its equivalent) at any time; | ||
(b) | a member of the Group may make a loan, grant credit or give a guarantee to another member of the Group (where neither member of the Group is an Obligor); | ||
(c) | a member of the Group may grant trade credit to its customers (including other members of the Group), guarantees and indemnities in the ordinary course of trading and upon terms usual for such trade; and | ||
(d) | a member of the Group may make any loans, grant any credit or give any guarantee or indemnity to or for the benefit of any person not permitted by the preceding paragraphs and the outstanding principal amount of the Financial Indebtedness of any such loans and/or guarantees does not exceed USD 500,000 (or its equivalent) in aggregate for the Group at any time. |
22.10 | Disposals | |
None of the Obligors shall and each of them shall ensure that no member of the Group shall dispose of, by one or more transactions or series of transactions (whether related or not), the whole or any part of its assets, other than a Permitted Disposal or as otherwise explicitly permitted under the terms of this Agreement. | ||
22.11 | Mergers | |
None of the Obligors shall, and each of them shall ensure that no member of the Group shall, without the prior written consent of the Lender (which shall not be unreasonably withheld), merge, consolidate or establish or enter into any demerger transaction or participate in any other type of corporate reconstruction other than any such transactions between members of the Group. | ||
22.12 | Acquisitions and investments |
(a) | None of the Obligors shall, and each of them shall ensure that no member of the Group shall, purchase, subscribe for or otherwise acquire any shares (or other securities or any interest therein) in, or purchase or otherwise acquire all or substantially all the assets of, or acquire any business or interest in, or incorporate, any other company or person, other than with prior written approval of the Lender. | ||
(b) | None of the Obligors shall, and each of them shall ensure that no member of the Group shall, purchase or otherwise acquire any vessel unless with the prior written approval of the Lender, such consent not to be unreasonably withheld and subject to the Lenders position not being deteriorated. The Lender shall have the right of first refusal in respect of any Financial Indebtedness required for any such Obligor to purchase or acquire such vessel, to the extent permitted by the terms of this Agreement. | ||
(c) | No Obligor shall make investments of more than USD 500,000 in aggregate without the prior written approval of the Lender, unless it is an acquisition of a vessel which is fully financed by Capital Market Proceeds and the Parent has |
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provided the Lender with evidence thereof (in form and substance satisfactory to the Lender). |
22.13 | Joint Ventures | |
Other than with the consent of the Lender (which shall not be unreasonably withheld or delayed), none of the Obligors shall, and each of them shall ensure that no member of the Group shall enter into or acquire or subscribe (or agree to enter into or acquire or subscribe) for any shares, stocks, securities or other interest in any Joint Venture. | ||
22.14 | Share Capital | |
Except for the Parent, none of the Obligors shall, and each of them shall procure that no member of the Group shall issue or redeem or repurchase, purchase, defease or retire any shares or any other equity investments, howsoever called, or grant any person the right (whether conditional or unconditional) to call for the issue or allotment of any share or any other equity investment, howsoever called, of any Obligor or any other member of the Group (including an option or right of pre-emption or conversion) or alter any rights attaching to its issued shares or any other equity investments, howsoever called (including ordinary and preference shares). | ||
22.15 | Access | |
Each Obligor shall, and shall ensure that each other member of the Group shall permit the Lender, or any other person on its behalf, upon request of the Lender to inspect the properties (including the Vessels without hindering their operation) and/or the books, records and inventory of such member of the Group. | ||
22.16 | Intellectual Property Rights | |
Each Obligor shall, and shall ensure that each other member of the Group shall, maintain its Intellectual Property necessary for the business of the relevant Group member and use its reasonable efforts to prevent any third party from infringing such Intellectual Property and shall not (other than in the ordinary course of business) discontinue the use of its Intellectual Property if such discontinuation is reasonably likely to have or result in a Material Adverse Effect. | ||
22.17 | Change of Business | |
Each Obligor shall, and shall ensure that each other member of the Group shall, ensure that no material changes are made to the general nature of the business of the Group as carried on at the date hereof or carry on any other business which results in any material change to the nature of such business. | ||
22.18 | Conduct of Business | |
Each Obligor shall, and each of them shall ensure that each other member of the Group shall, at all times have the right and be duly qualified to conduct its business as it is conducted from time to time in all Relevant Jurisdictions and do all things necessary and reasonable to obtain, preserve and keep in full force and effect all rights including, without limitation, all franchises, contracts, licences, consents, authorisations, approvals and other rights which are necessary and material for the conduct of its business, in each case where failure to do so could reasonably be expected to have a Material Adverse Effect. |
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22.19 | No Amendments | |
None of the Obligors shall, and each of them shall ensure that no other member of the Group shall, without the prior written consent of the Lender (which shall not be unreasonably withheld), terminate (other than upon the date it is originally scheduled to expire) or agree to any amendment, modification or variation to its constitutional documents, any Finance Document or any Charter Contract to which it is a party other than any termination, amendment, modification or variation which does not materially adversely affect the Lender, or is not detrimental in any way to the interests of the Lender as provider of the Facilities. | ||
22.20 | Dividends and share redemption | |
The Parent shall not: |
(i) | declare, make or pay any dividend, charge, fee or other distribution (or interest on any unpaid dividend, charge, fee or other distribution) (whether in cash or in kind) on or in respect of its shares (or any class of its shares); | ||
(ii) | repay or distribute any dividend or share premium reserve; | ||
(iii) | pay or allow any member of the Group to pay any management, advisory or other fee to or to the order of any of the shareholders of the Obligors, other than (A) any reasonable management fees under any management contracts for management services actually provided to the Group on market standard terms and (B) any reasonable fees at arms length basis under any advisory and services agreement for advice and/or services actually provided to the Group; or | ||
(iv) | redeem, repurchase, defease, retire or repay any of its shares or resolve to do so, |
without the prior written approval of the Lender, such approval not to be unreasonably withheld. | ||
22.21 | Fees and Commissions | |
Other than as required or permitted under the Finance Documents, none of the Obligors shall, and each of them shall ensure that no member of the Group shall, pay any management fees or other compensation to any person providing advisory and/or management services to the Group or any member of the Group which, in the reasonable opinion of the Lender, fall outside the normal course of business or are in excess of prevailing market rates for similar services. Before making any such payments in the ordinary course of business or to Affiliates, the Obligors shall provide copies of the relevant management contracts to the Lender. | ||
22.22 | Compliance with Laws and Regulations | |
Each Obligor shall, and each of them shall ensure that each other member of the Group shall, comply in all respects with all laws to which it will be subject. |
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22.23 | Financial Indebtedness | |
None of the Obligors shall, and they shall ensure that no other member of the Group shall, incur or permit to subsist any Financial Indebtedness other than Permitted Financial Indebtedness. | ||
22.24 | Tax | |
Each Obligor shall and they shall ensure that each member of the Group shall, duly and punctually pay and discharge (a) all material taxes, assessments and governmental charges imposed upon it or its assets within the time periods allowed therefore without incurring penalties (save to the extent that the same are being disputed by the relevant member of the Group in good faith and by appropriate action prior to any final judgment in relation thereto) and (b) all lawful claims which, if unpaid, could by law become Security upon its assets. | ||
22.25 | Preservation of Assets | |
Each Obligor shall and each of them shall ensure that each other member of the Group shall, maintain and preserve all of its assets that are necessary and material in the conduct of its business as conducted at the date hereof in good working order and condition, ordinary wear and tear excepted. | ||
22.26 | No change of director | |
As soon as any Obligor becomes aware of a resignation or dismissal or an intended resignation or intended dismissal by or with respect to Mr. I. G. Varouxakis, in his capacity of chief executive officer of the Parent, such Obligor shall start selecting a qualified replacement (and in doing so shall keep the Lender informed on the progress made) and shall use its best efforts to have obtained a legally binding offer of employment with a qualified replacement within 90 Business Days. This covenant shall also apply to any replacement manager as if references in this Clause to Mr. I.G. Varouxakis were references to that replacement person. | ||
22.27 | Treasury Transactions |
(a) | Each Obligor shall ensure that no Obligor shall enter into any Treasury Transaction which is not a Permitted Treasury Transaction. | ||
(b) | Before 30 June 2010 or such later date as mutually agreed between the Parent and the Lender, the Borrowers shall enter into hedging arrangements in a form and substance satisfactory to the Lender with the Lender as hedge counterparty for the remaining life time of the Facilities in respect of at least 50% of the interest costs and exchange rate risks of the Facilities. The Parent and the Lender shall stay in close contact as to the timing of the entry into the hedging arrangements. |
22.28 | Security |
(a) | The Borrower shall enter into the Security Documents specified in Schedule 3 ( Security Memorandum ) on the Effective Date. | ||
(b) | In addition to paragraph (a), each Obligor shall, if requested to do so by the Lender, create (or procure the creation of) first ranking security in favour of the Lender for the Secured Liabilities on terms acceptable to the Lender similar to those of the existing Security over or in respect of any assets not already subject to Security as of the Effective Date, by the Obligors as may be specified by the |
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Lender, including without limitation, over or in respect of any Intellectual Property related to the relevant Obligors ownership or operation of the Vessels and (ii) execute assignments of any Charter Contract to the Lender for the Secured Liabilities on terms acceptable to the Lender. |
22.29 | Auditors | |
No Obligor shall appoint a new auditor, unless it is one of the Big Four leading accounting firms (or such other auditor firm reasonably approved by the Lender) and the Lender is notified ten Business Days in advance of the intention to do so accompanied by reasons (giving such detail as the Lender may reasonably require) as to why the appointment of a new auditor is required or deemed useful. | ||
22.30 | Arms Length Basis | |
None of the Obligors shall, and each of them shall procure that no other member of the Group shall, enter into any arrangement, transaction or contract with any person save where such arrangement or contract is entered into on an arms length basis and for full market value. | ||
22.31 | Charter Contracts | |
Each Obligor shall use reasonable endeavours to ensure that the terms of any new Charter Contract entered into after the date of this Agreement does not prohibit assignment of such Charter Contract to the Lender. Promptly following the entering into of a Charter Contract each Obligor shall provide the Lender with a copy of the relevant executed Charter Contract. In case the Charter Contract prohibits the assignment of the Charter Contract to the Lender, such Obligor shall promptly inform the Lender in writing of (i) the efforts it has made to allow for the assignment of the Charter Contract, and (ii) the reasons, to the best of such Obligors knowledge, for not having succeeded in achieving this. Each Obligor shall at all times and with respect to all Charter Contracts (irrespective of term) be obliged to assign the earnings under the Charter Contracts to the Lender and hence ensure that such assignment of the earnings is not prohibited. | ||
22.32 | Group Structure Chart | |
Each Obligor shall and each of them shall ensure that no changes are being made to the Group Structure Chart, other than: |
(a) | in the event that the Value to Loan Ratio is equal to or less than 130%, with the prior written approval of the Lender; | ||
(b) | in the event that the Value to Loan Ratio exceeds 130%, each Obligor shall inform the Lender about any changes to the Group Structure Chart and shall provide the Lender with all information about the reason for the change as well as the purpose of new subsidiaries (if any) and the relevant Obligor shall provide the Lender with the available financial information of new subsidiaries (if any) and all other information the Lender reasonably requests; and | ||
(c) | incorporating new subsidiaries of the Parent for the sole purpose of acquiring new vessels. |
22.33 | Further assurance |
(e) | Each Obligor shall and shall procure that each member of the Group will, if applicable, promptly do all such acts or execute all such documents (including |
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assignments, transfers, mortgages, charges, notices and instructions) as the Lender may reasonably specify: |
(i) | to perfect the Security 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 Security over all or any of the assets which are, or are intended to be, the subject of the Security) or for the exercise of any rights, powers and remedies of the Lender or the Obligors provided by or pursuant to the Finance Documents or by law; | ||
(ii) | to confer on the Lender or confer on the Obligors Security over any property and assets of that Obligor located in any jurisdiction equivalent or similar to the Security intended to be conferred by or pursuant to the Security Documents; and/or | ||
(iii) | to facilitate the realisation of the assets which are, or are intended to be, the subject of the Security. |
(f) | Each Obligor shall and shall procure that each member of the Group shall, if applicable, take all such action as is available to it (including making all filings and registrations) as may be necessary for the purpose of the creation, perfection, protection or maintenance of any Security conferred or intended to be conferred on the Lender or the Obligors by or pursuant to the Finance Documents. |
23. | EVENTS OF DEFAULT | |
Each of the events or circumstances set out in Clause 23 is an Event of Default (save for Clause 23.20 ( Acceleration )). | ||
23.1 | Failure to Pay | |
Any Obligor fails to pay any sum due from it under any of the Finance Documents to which it is a party at the time, in the currency and in the manner specified therein unless such failure to pay is caused solely by administrative or technical error and payment is made within three Business Days of the due date. | ||
23.2 | Misrepresentation | |
Any representation or statement made or deemed to be made by any Obligor in any of the Finance Documents or in any notice or other document, certificate or statement delivered by it pursuant thereto or in connection therewith is or proves to have been incorrect or misleading in any material respect when made or deemed to be made and, if such misrepresentation or misstatement is capable of remedy, such misrepresentation or misstatement has not been remedied within ten Business Days of the date on which such representation or statement was first made or deemed to be made. | ||
23.3 | Financial condition | |
At any time any of the requirements of Clause 20.2 ( Compliance certificate ) or Clause 21 ( Financial Covenants ) are not satisfied. | ||
23.4 | Covenants | |
Any Obligor fails duly to perform or comply with any of the obligations expressed to be assumed by it in any of the Finance Documents to which it is a party and such failure, if |
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capable of remedy, is not remedied within three Business Days of the earlier of (i) the Lender giving notice to any Obligor or (ii) the relevant Obligor becoming aware of the failure to perform or comply. |
23.5 | Cross Default |
(a) | Any Financial Indebtedness of any member of the Group is not paid when due nor within any originally applicable grace period. | ||
(b) | Any Financial Indebtedness of any member of the Group is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described). | ||
(c) | Any commitment for any Financial Indebtedness of any member of the Group is cancelled or suspended by a creditor of any member of the Group as a result of an event of default (however described). | ||
(d) | Any creditor of any member of the Group becomes entitled to declare any Financial Indebtedness of any member of the Group due and payable prior to its specified maturity as a result of an event of default (however described). | ||
(e) | No Event of Default will occur under this Clause 23.5 if the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness falling within paragraphs (a) to (d) above is less than USD 500,000 (or its equivalent in any other currency or currencies). |
23.6 | Insolvency |
(a) | A member of the Group is unable or admits inability to pay its debts as they fall due or is deemed to or 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. | ||
(b) | A moratorium is declared in respect of any indebtedness of any member of the Group. If a moratorium occurs, the ending of the moratorium will not remedy any Event of Default caused by that moratorium. |
23.7 | Insolvency proceedings |
(a) | Any corporate action, legal proceedings or other procedure or step is taken in relation to: |
(i) | the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of any member of the Group; | ||
(ii) | a composition, compromise, assignment or arrangement with any creditor of any member of the Group; | ||
(iii) | the appointment of a liquidator, receiver, administrative receiver, administrator, compulsory manager or other similar officer in respect of any member of the Group or any of its assets; or |
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(iv) | enforcement of any Security over any assets of any member of the Group, |
or any analogous procedure or step is taken in any jurisdiction. | |||
(b) | Paragraph (a) shall not apply to any winding-up petition which is frivolous or vexatious and is discharged, stayed or dismissed within 14 days of commencement or, if earlier, the date on which it is advertised. |
23.8 | Creditors process | |
Any expropriation, attachment, sequestration, distress or execution or any analogous process in any jurisdiction affects any asset or assets of a member of the Group having an aggregate value of USD 500,000. |
23.9 | Winding-up |
(a) | Any board resolution or shareholders resolution is passed by a member of the Group or any Holding Company of a member of the Group, approving any legal proceedings or other constitutional or legal procedure or step is taken in relation to the winding-up, liquidation, dissolution, administration, bankruptcy, moratorium or re-organisation (whether by way of voluntary arrangement, scheme of arrangement or otherwise) (other than on a solvent basis in respect of any member of the Group which is not the Borrower or otherwise on terms approved by the Lender) of any member of the Group or for the appointment of a liquidator, receiver, administrator, administrative receiver, conservator, custodian, trustee or similar officer of it or of any or all of its revenues and assets. | ||
(b) | Paragraph (a) shall not apply to any winding-up petition which is frivolous or vexatious and is discharged, stayed or dismissed within 30 days of commencement. |
23.10 | Failure to Comply with Final Judgment | |
Any member of the Group fails to comply with in any material respect or pay any sum due from it under any final judgment or any final order made or given by any court of competent jurisdiction. | ||
23.11 | Governmental Intervention | |
By or under the authority of any government, (a) the management of any member of the Group is wholly or partially displaced or the authority of any member of the Group in the conduct of its business is wholly or partially curtailed in any material respect or (b) all or a majority of the issued shares of any member of the Group or the whole or any part of its revenues or assets is seized, nationalised, expropriated or compulsorily acquired. | ||
23.12 | Security Documents | |
Any Security created or purported to be created by a Security Document is not or ceases to be in full force and effect in accordance with the terms of such Security Document or, if that Security Document purports to evidence a security interest, the Security so evidenced is not or ceases to be legal, valid, binding or enforceable or any Security does not or ceases to rank in priority as specified in the Security Document creating or evidencing that Security and if capable of remedy, any such unlawfulness or ceasing to be legal, valid, binding or enforceable or ceasing to be in full force and effect or ceasing to rank in priority, is not remedied on or prior to the tenth Business Day following the |
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earlier of (i) the Lender giving notice to any Obligor or (ii) the relevant Obligor becoming aware of the unlawfulness, of the ceasing to be legal, valid, binding or enforceable or ceasing to be in full force and effect or ceasing to rank in priority. |
23.13 | Unlawfulness and Invalidity | |
At any time it is or becomes unlawful for an Obligor to perform or comply with any or all of its obligations under any of the Finance Documents to which it is a party or any of the obligations of an Obligor under any of the Finance Documents to which it is a party are not or cease to be legal, valid, binding and enforceable. | ||
23.14 | Qualification to Financial Statements | |
The external auditors of the Group qualify their report on any audited consolidated financial statement of the Group and such qualification is in the opinion of the Lender, material, or refuse to issue any such report. | ||
23.15 | Material Adverse Change | |
Any event or circumstance occurs which has or results in or is reasonably likely to have or result in a Material Adverse Effect. | ||
23.16 | Change of ownership |
An Obligor (other than the Parent) ceases to be a wholly-owned Subsidiary of the Parent. | ||
23.17 | Litigation | |
Any litigation, arbitration, administrative proceedings or governmental or regulatory investigations, proceedings or disputes (other than of a frivolous or vexatious nature) are commenced or threatened against any member of the Group or its respective assets or there are any circumstances likely to give rise to any such litigation, arbitration, administrative proceedings or governmental or regulatory investigations, proceedings or disputes which, if adversely determined, is reasonably likely to have a Material Adverse Effect. | ||
23.18 | Repudiation | |
Any Obligor (or any other relevant party other than the Lender) repudiates any Finance Document or any of the Security or evidences an intention to repudiate any Finance Document or any of the Security. | ||
23.19 | Cessation of Business | |
Any member of the Group ceases (or threatens to cease) to carry on all or a substantial part of its business, except as a result of a Permitted Disposal or with the prior written consent of the Lender (not to be unreasonably withheld). | ||
23.20 | Acceleration | |
On and at any time after the occurrence of an Event of Default which is continuing the Lender may, by notice to the Obligors: |
(a) | cancel the Commitments whereupon they shall immediately be cancelled; | ||
(b) | declare that all or part of the Utilisations, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents be immediately due and payable, whereupon they shall become immediately due and payable; |
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(c) | declare that all or part of the Utilisations be payable on demand, whereupon they shall immediately become payable on demand by the Lender; and/or | ||
(d) | exercise any or all of its rights, remedies or discretions under the Finance Documents. |
24. | CHANGES TO THE LENDER | |
Assignments and transfers by the Lender
The Lender may: |
(a) | assign ( cederen ) any of its rights; or | ||
(b) | transfer by way of assumption of contract ( contractsoverneming ) its entire or part of its legal relationship, |
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, but not to a fund or other party whose business is to purchase distressed debt. In the event that the Lender so assigns any of its rights or transfers its legal relationship, the Obligors shall give any assistance which the Lender reasonably requires as a result of such assignment or transfer, including (without limitation) agreeing to amend this Agreement and any other Finance Documents as the Lender and the Parent may agree. The costs of any such transfer shall not be for the account of the Obligors. |
25. | CHANGES TO THE OBLIGORS | |
Assignments and transfer by Obligors | ||
No Obligor may assign any of its rights or transfer any of its rights or obligations under the Finance Documents. |
26. | CONDUCT OF BUSINESS BY THE LENDER | |
No provision of this Agreement will: |
(a) | interfere with the right of the Lender to arrange its affairs (tax or otherwise) in whatever manner it thinks fit; | ||
(b) | 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 | ||
(c) | oblige the Lender to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax. |
27. | PAYMENT MECHANICS |
27.1 | Payments to the Lender |
(a) | On each date on which the Obligors are required to make a payment under a Finance Document, the Obligors shall make the same available to the Lender (unless a contrary indication appears in a Finance Document) for value on the due date at the time and in such funds specified by the Lender as being customary at the time for settlement of transactions in the relevant currency in the place of payment. |
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(b) | Payment shall be made to such account in the principal financial centre of the country of that currency with such bank as the Lender specifies in writing to the relevant Obligor or the Obligors Agent reasonably in advance. |
27.2 | Distributions to the Obligors | |
The Lender may (with the consent of the Obligors or in accordance with Clause 28 ( Set-off )) apply any amount received by it for the Obligors in or towards payment (on the date and in the currency and funds of receipt) of any amount due from the Obligors under the Finance Documents or in or towards purchase of any amount of any currency to be so applied. |
27.3 | Partial payments |
(a) | If the Lender receives a payment that is insufficient to discharge all the amounts then due and payable by the Obligors under the Finance Documents, the Lender shall apply that payment towards the obligations of the Obligors under the Finance Documents in the following order: |
(i) | first , in or towards payment pro rata of any unpaid fees, costs and expenses of the Lender under the Finance Documents; | ||
(ii) | secondly , in or towards payment pro rata of any accrued interest, fee or commission due but unpaid under this Agreement; | ||
(iii) | thirdly , in or towards payment pro rata of any principal due but unpaid under this Agreement; and | ||
(iv) | fourthly , in or towards payment pro rata of any other sum due but unpaid under the Finance Documents. |
(b) | The Lender may vary the order set out in paragraphs (a)(ii) to (iv) above. | ||
(c) | Paragraphs (a) and (b) above will override any appropriation made by the Obligors. |
27.4 | No set-off by Obligors | |
All payments to be made by the Obligors under the Finance Documents shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim. |
27.5 | Business Days |
(a) | 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). | ||
(b) | During any extension of the due date for payment of any principal or Unpaid Sum under this Agreement interest is payable on the principal or Unpaid Sum at the rate payable on the original due date. |
27.6 | Currency of account |
(a) | Subject to paragraphs (b) and (c) below, dollars is the currency of account and payment for any sum due from the Obligors under any Finance Document. |
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(b) | Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred. | ||
(c) | Any amount expressed to be payable in a currency other than dollars shall be paid in that other currency. |
27.7 | Change of currency |
(a) | Unless otherwise prohibited by law, if more than one currency or currency unit are at the same time recognised by the central bank of any country as the lawful currency of that country, then: |
(i) | any reference in the Finance Documents to, and any obligations arising under the Finance Documents in, the currency of that country shall be translated into, or paid in, the currency or currency unit of that country designated by the Lender (after consultation with the Borrower); and | ||
(ii) | any translation from one currency or currency unit to another shall be at the official rate of exchange recognised by the central bank for the conversion of that currency or currency unit into the other, rounded up or down by the Lender (acting reasonably). |
(b) | If a change in any currency of a country occurs, this Agreement will, to the extent the Lender (acting reasonably and after consultation with the Borrower) specifies to be necessary, be amended to comply with any generally accepted conventions and market practice in the Relevant Interbank Market and otherwise to reflect the change in currency. |
27.8 | Disruption to Payment Systems etc. | |
If either the Lender determines (in its reasonable discretion) that a Disruption Event has occurred or the Lender is notified by an Obligor that a Disruption Event has occurred: |
(a) | the Lender may, and shall if requested to do so by such Obligor, consult with the Obligors with a view to agreeing with the Obligors such changes to the operation or administration of the Facilities as the Lender may deem necessary in the circumstances; | ||
(b) | the Lender shall not be obliged to consult with the Obligors in relation to any changes mentioned in paragraph (a) if, in its opinion, it is not practicable to do so in the circumstances and, in any event, shall have no obligation to agree to such changes; | ||
(c) | any such changes agreed upon by the Lender and the Obligors shall (whether or not it is finally determined that a Disruption Event has occurred) be binding upon the Parties as an amendment to (or, as the case may be, waiver of) the terms of the Finance Documents notwithstanding the provisions of Clause 33 ( Amendments and Waivers ); and | ||
(d) | the Lender shall not be liable for any damages, costs or losses whatsoever (including, without limitation for negligence, but not including any claim based on gross negligence, wilful default or fraud of the Lender) arising as a result of |
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its taking, or failing to take, any actions pursuant to or in connection with this Clause 27.8. |
28. | SET-OFF |
(a) | The Lender may set off any matured obligation due from the Obligors under the Finance Documents (to the extent beneficially owned by the Lender) against any matured obligation owed by the Lender to the Obligors, 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. | ||
(b) | Any credit balances taken into account by the Lender when operating a net limit in respect of any overdraft under the Overdraft Facility shall on enforcement of the Finance Documents be applied first in reduction of the overdraft provided under that Overdraft Facility in accordance with its terms. |
29. | NOTICES |
29.1 | 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. |
29.2 | Addresses | |
The address and fax number (and the department, officer or person, 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: |
(a) | in the case of an Obligor, that identified with its name below; and | ||
(b) | in the case of the Lender, that identified with its name below, |
or any substitute address or fax number or department, officer or person as the Party may notify to the Lender (or the Lender may notify to the relevant Obligor, if a change is made by the Lender) by not less than five Business Days notice. |
29.3 | Delivery |
(a) | Any communication or document made or delivered by one person to another under or in connection with the Finance Documents will only be effective: |
(i) | if by way of fax, when received in legible form; or | ||
(ii) | if by way of letter, (a) when it has been delivered at the relevant address, (b) five Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address, or (c) sent by overnight courier; |
and, if a particular department, officer or person is specified as part of its address details provided under Clause 29.2 ( Addresses ), if addressed to that department, officer or person. |
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(b) | Any communication or document to be made or delivered to the Lender and an Obligor will be effective only when actually received by the Lender or such Obligor as the case may be, and then only if it is expressly marked for the attention of the department, officer or person identified with the Lenders or the Obligors signature below (or any substitute department, officer or person as the Lender and the Obligor shall specify for this purpose). |
29.4 | English language |
(a) | Any notice given under or in connection with any Finance Document must be in English. | ||
(b) | All other documents provided under or in connection with any Finance Document must be: |
(i) | in English; or | ||
(ii) | 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. |
30. | CALCULATIONS AND CERTIFICATES |
30.1 | 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 are prima facie evidence of the matters to which they relate. |
30.2 | 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. |
30.3 | 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. |
31. | PARTIAL INVALIDITY | |
If, at any time, any provision of the Finance Documents is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired. |
32. | REMEDIES AND WAIVERS | |
No failure to exercise, nor any delay in exercising, on the part of the Lender, any right or remedy under the Finance Documents shall operate as a waiver, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise or the |
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33. | AMENDMENTS AND WAIVERS | |
Any term of the Finance Documents may be amended or waived with the consent of the Lender and the Obligors Agent and any such amendment or waiver will be binding on all Parties. |
34. | COUNTERPARTS | |
Each Finance Document may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of the Finance Document. |
35. | GOVERNING LAW | |
This Agreement is governed by Dutch law. |
36. | ENFORCEMENT |
36.1 | Jurisdiction |
(a) | The courts ( rechtbank ) of Amsterdam, The Netherlands, shall, subject to ordinary appeal ( hoger beroep ) and final appeal ( cassatie ), have exclusive jurisdiction to hear and determine any suit, action or proceeding and to settle any dispute arising out of or in connection with this Agreement (including a dispute regarding the existence, validity or termination of this Agreement or the consequences of its nullity) (a Dispute ). | ||
(b) | This Clause 36 is for the benefit of the Lender only. As a result, the Lender shall not be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Lender may take concurrent proceedings in any number of jurisdictions. |
37. | REPRESENTATION BY ATTORNEY | |
If a party to this Agreement is represented by (an) attorney(s) in connection with the execution of this Agreement or any agreement or document pursuant hereto, and the relevant power of attorney is expressed to be governed by Dutch law, such choice of law is hereby accepted by each other party to this Agreement, in accordance with Article 14 of the Hague Convention on the Law Applicable to Agency of 14 March 1978. | ||
This Agreement has been entered into on the date stated at the beginning of this Agreement. |
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Lender | Facility | A Facility | B Overdraft Facility | |||||||||
Commitment (USD) | Commitment (USD) | Commitment (USD) | ||||||||||
New HBU II N.V.
|
19,250,000 | 27,100,000 | 875,000 |
Term Loan Borrowers
|
Registration number | |||
|
||||
Adventure Two S.A.
|
10413 | |||
|
||||
Adventure Three S.A.
|
10414 | |||
|
||||
Adventure Seven S.A.
|
23506 | |||
|
||||
Adventure Eleven S.A.
|
C-111797 |
Overdraft Facility Borrowers | Registration number | |||
Adventure Two S.A.
|
10413 | |||
|
||||
Adventure Three S.A.
|
10414 | |||
|
||||
Adventure Seven S.A.
|
23506 | |||
|
||||
Adventure Eleven S.A.
|
C-111797 |
Joint and Several Borrowers | Registration number | |||
Adventure Two S.A.
|
10413 | |||
|
||||
Adventure Three S.A.
|
10414 | |||
|
||||
Adventure Seven S.A.
|
23506 | |||
|
||||
Adventure Eleven S.A.
|
C-111797 |
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1. | We refer to the Agreement. This is an 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 a Loan on the following terms: |
Proposed Utilisation Date:
|
[ ] (or, if that is not a Business Day, the next Business Day) | |
|
||
Amount:
|
[ ] or, if less, the Available Facility | |
|
||
Interest Period:
|
[ ] |
3. | We confirm that each condition specified in Clause 4.1 ( Further conditions precedent ) is satisfied on the date of this Utilisation Request. | |
4. | The proceeds of this Loan should be credited to [ account ]. | |
5. | This Utilisation Request is irrevocable. |
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1. | We refer to the Agreement. This is a Selection Notice. Terms defined in the Agreement have the same meaning in this Selection Notice unless given a different meaning in this Selection Notice. |
2. | We refer to the following Loan[s] with an Interest Period ending on [ ] * |
3. | [We request that the next Interest Period for the above Loan[s] is [ ]]. |
4. | This Selection Notice is irrevocable. |
* | Insert details of all Facility Loans which have an Interest Period ending on the same date. |
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1. | First Preferred Liberian mortgage of USD 66,725,000 on Free Maverick, dated 1 September 2008. |
2. | First Preferred Marshall Islands mortgage of USD 3,700,000 on Free Destiny, dated 24 October 2005. |
3. | Second Preferred Marshall Islands mortgage of USD 34,600,000 on Free Destiny, dated 17 March 2008. |
4. | Third Preferred Marshall Islands mortgage of USD 66,725,000 on Free Destiny, dated 26 August 2008. |
5. | First Preferred Marshall Islands mortgage of USD 6,000,000 on Free Envoy, dated 29 September 2004. |
6. | Second Preferred Marshall Islands mortgage of USD 34,600,000 on Free Envoy, dated 17 March 2008. |
7. | Third Preferred Marshall Islands mortgage of USD 66,725,000 on Free Envoy, dated 26 August 2008. |
8. | First ranking preferred Bahamian governed deed of mortgage of USD 38,500,000 on Free Knight, dated 19 March 2008. |
9. | Second ranking preferred Bahamian governed deed of mortgage on Free Knight, dated 19 March 2008. |
10. | Independent Corporate Guarantee of USD 63,725,000 plus interest and costs, from FreeSeas Inc., established in Majuro, Marshall Islands. |
11. | Pledge of rights and earnings under time charter contracts concluded or to be concluded, dated 12 August 2008. |
12. | Pledge of rights under hull and machinery insurance policy, dated 12 August 2008. |
13. | Pledge of rights under protection and indemnity risk insurance policy, dated 12 August 2008. |
14. | Assignment of insurances for Free Knight, Free Envoy and Free Destiny, dated 26 August 2008, and for Free Maverick, dated 1 September 2008. |
1. | First Preferred Liberian mortgage of USD 66,725,000 on Free Maverick, dated 1 September 2008. |
2. | An amendment and restatement dated on or about the Effective Date to the first preferred Liberian mortgage on Free Maverick, dated 1 September 2008. |
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3. | First preferred Marshall Islands mortgage on Free Destiny, dated on or about the Effective Date, which shall keep the applicable priority of existing obligations under the renewal rule. |
4. | First preferred Marshall Islands mortgage on Free Envoy, dated on or about the Effective Date, which shall keep the applicable priority of existing obligations under the renewal rule. |
5. | First ranking preferred Bahamian governed deed of mortgage of USD 38,500,000 on Free Knight, dated 19 March 2008. |
6. | Second ranking preferred Bahamian governed deed of mortgage on Free Knight, dated 19 March 2008. |
7. | Third preferred Bahamian mortgage on Free Knight, dated on or about the Effective Date. |
8. | Deed of assignment (to be) entered into by Adventure Eleven S.A. on or about the Effective Date in order to secure the rights and earnings of Adventure Eleven S.A. arising out of the Free Maverick and any associated charterparties, together with any insurances and requisition compensation in relation to the Free Maverick. |
9. | Deed of assignment (to be) entered into by Adventure Two S.A. on or about the Effective Date in order to secure the rights and earnings of Adventure Two S.A. arising out of the Free Destiny and any associated charterparties, together with any insurances and requisition compensation in relation to the Free Destiny. |
10. | Deed of assignment (to be) entered into by Adventure Three S.A. on or about the Effective Date in order to secure the rights and earnings of Adventure Tree S.A. arising out of the Free Envoy and any associated charterparties, together with any insurances and requisition compensation in relation to the Free Envoy. |
11. | Deed of assignment (to be) entered into by Adventure Seven S.A. on or about the Effective Date in order to secure the rights and earnings of Adventure Seven S.A. arising out of the Free Knight and any associated charterparties, together with any insurances and requisition compensation in relation to the Free Knight. |
12. | Deed of covenants entered into by Adventure Seven S.A. |
1. | First preferred Liberian mortgage granted in continuation of a prior mortgage on Free Destiny, dated on or about the Effective Date. |
2. | First preferred Liberian mortgage granted in continuation of a prior mortgage on Free Envoy, dated on or about the Effective Date. |
3. | Second amended and restated first preferred mortgage recorded against the FREE MAVERICK, which further amends and restates that certain first preferred mortgage dated September 1, 2008, as amended and restated by that certain amended and restated first preferred mortgage dated September 1, 2009. |
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4. | Security confirmation in relation to the deed of assignment (to be) entered into by Adventure Two S.A. on 15 September 2009 in order to secure the rights and earnings of Adventure Two S.A. arising out of the Free Destiny and any associated charterparties, together with any insurances and requisition compensation in relation to the Free Destiny. |
5. | Security confirmation in relation to the deed of assignment (to be) entered into by Adventure Three S.A. on 15 September 2009 in order to secure the rights and earnings of Adventure Tree S.A. arising out of the Free Envoy and any associated charterparties, together with any insurances and requisition compensation in relation to the Free Envoy. |
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Margin means: |
(a) | as of 1 March 2009, in relation to any Facility A Loan, 2.25 per cent. per annum; | ||
(b) | in relation to any Facility B Loan, 4.25 per cent. per annum; | ||
(c) | in relation to any Overdraft Facility Utilisation, 2.25 per cent. per annum; |
but if: |
(i) | no Event of Default has occurred and is continuing; | ||
(ii) | the Debt Service Cover Ratio is less than 1.00:1.00; and | ||
(iii) | the Value to Loan Ratio in respect of the most recently completed Relevant Period is within a range set out below, |
then the Margin for each Loan under Facility A will be the percentage per annum set out below in the column for that Facility opposite that range: |
Facility A Margin | ||||
Value to Loan Ratio | % p.a. | |||
Less than or equal to 70%
|
2.25 | |||
|
||||
Greater than 70%
|
1.30 |
However: |
(i) | any increase or decrease in the Margin for a Loan shall take effect on the date (the reset date ) falling 5 days after receipt by the Lender of the Obligors interim consolidated half-yearly financial statements in accordance with paragraph (b) of Clause 20.1 ( Financial statements ); | ||
(ii) | a failure to deliver the information set out in paragraph (i) above, will cause the Margin for each Loan to be the highest percentage per annum set out above for a Loan under that Facility until the relevant information is delivered to the Lender; | ||
(iii) | while an Event of Default is continuing, the Margin for each Loan shall be 1.00 per cent higher than the rate which would have been payable if no Event of Default would be outstanding; and | ||
(iv) | for the purpose of determining the Margin, Debt Service Cover Ratio, the Value to Loan Ratio and Relevant Period shall be determined in accordance with Clause 21.2 ( Financial definitions ). |
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1. | The enclosed [audited] consolidated [annual/quarterly] financial statements of the Parent give a true and fair view of the consolidated financial condition of the Group and have been prepared on the same basis as [the Business Plan [ in relation to Relevant Periods ending before a Budget is delivered ]/the Budget for [ relevant financial year [ in relation to Relevant Periods ending after a Budget has been delivered ]].. |
2. | The Parent is in compliance with Clause 21 ( Financial Covenants ) of the Facility Agreement. |
3. | The Excess Cash of the Group for the financial year ending [ ] is USD [ ] (and calculations supporting this certification are attached). |
4. | The Parent is in compliance with SCHEDULE 4 ( Margin ) of the Facility Agreement. |
5. | We confirm that no Default is continuing.* |
Signed:
|
||||||
|
||||||
|
Director | Director | ||||
|
||||||
|
||||||
for and on behalf of |
- 79 -
* | If this statement cannot be made, the certificate should identify any Default that is continuing and the steps, if any, being taken to remedy it. |
- 80 -
Loans in USD | ||
Delivery of a duly completed
|
U-2 | |
Utilisation Request (Clause 5.1
|
||
(
Delivery of a Utilisation Request
)
|
11.00 a.m.
Amsterdam time |
|
or a Selection Notice (Clause 10.1
|
||
(
Selection of Interest Periods
))
|
||
LIBOR is fixed
|
Quotation Day as of 11:00 a.m. Amsterdam time |
U | = | date of utilisation | ||
|
||||
U X
|
= | X Business Days prior to date of utilisation |
- 81 -
Adventure Five S.A. - Free Goddess
|
||
|
||
Master Agreement Security Deed, dated 24 December 2007
|
||
|
||
Corporate Guarantee, dated 28 December 2007
|
FreeSeas | |
|
||
General Assignment, dated 28 December 2007
|
||
|
||
Charter Assignment, dated 28 December 2007
|
||
Managers Undertaking, dated 28 December 2007
|
||
First Preferred Marshall Islands Ship Mortgage, dated 28
December 2007
|
ADVENTURE FIVE S.A. in favour of CREDIT SUISSE | |
Master Swap Agreement
|
ADVENTURE FIVE S.A. $18,200,000 | |
Flag Marshall Islands
|
||
Adventure Six S.A. - Free Hero
|
FreeSeas | |
Master Agreement Security Deed, dated 24 December 2007
|
||
|
||
Corporate Guarantee, dated 28 December 2007
|
||
General Assignment, dated 28 December 2007
|
||
Charter Assignment, dated 28 December 2007
|
ADVENTURE SIX S.A. in favour of CREDIT SUISSE | |
Managers Undertaking, dated 28 December 2007
|
ADVENTURE SIX S.A. $18,200,000 | |
First Preferred Marshall Islands Ship Mortgage, dated 28
December 2007
|
||
Master Swap Agreement
|
FreeSeas | |
Flag Marshall Islands
|
||
|
||
Adventure Eight S.A. Free Jupiter
|
||
Corporate Guarantee, dated 14 April 2008
|
ADVENTURE EIGHT S.A. in favour of CREDIT SUISSE | |
General Assignment, dated 14 April 2008
|
ADVENTURE EIGHT S.A.- $ 18,200,000 | |
Charter Assignment, dated 14 April 2008
|
||
Managers Undertaking, dated 14 April 2008
|
FreeSeas | |
First Preferred Marshall Islands Ship Mortgage, dated 14
April 2008
|
||
Master Swap Agreement
|
||
Flag Marshall Islands
|
||
|
ADVENTURE TEN S.A. in favour of CREDIT SUISSE | |
|
||
Adventure Ten S.A. Free Lady
|
||
Corporate Guarantee
|
||
General Assignment, dated 7 July 2008
|
||
Charter Assignment, dated 7 July 2008
|
||
Managers Undertaking, dated 7 July 2008
|
||
First Preferred Liberian Ship Mortgage, dated 7 July 2008
|
||
Flag Liberia
|
- 82 -
HBU | CREDIT SUISSE | FBB | Total | |||||||||||||
December 31, 2008
|
$ | 53,850 | $ | 81,750 | $ | 24,750 | $ | 160,350 | ||||||||
Additions
|
0 | 0 | 0 | 0 | ||||||||||||
Payments
|
(7,500 | ) | (4,500 | ) | (1,500 | ) | (13,500 | ) | ||||||||
|
||||||||||||||||
June 30, 2009
|
$ | 46,350 | $ | 77,250 | $ | 23,250 | $ | 146,850 | ||||||||
|
- 83 -
Clause | Page | |||||
1 |
Definitions
|
2 | ||||
|
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2 |
Consent of the Bank
|
5 | ||||
|
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3 |
Amendments to the Existing Documents
|
6 | ||||
|
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4 |
Representations and warranties
|
10 | ||||
|
||||||
5 |
Conditions
|
12 | ||||
|
||||||
6 |
Relevant Parties confirmation
|
12 | ||||
|
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7 |
Expenses
|
13 | ||||
|
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8 |
Miscellaneous and notices
|
14 | ||||
|
||||||
9 |
Applicable law
|
14 | ||||
|
||||||
Schedule 1 Documents and evidence required as conditions precedent | 15 | |||||
|
||||||
Schedule 2 Form of New Mortgage | 19 |
(1) | FREESEAS INC. , a company incorporated in the Marshall Islands with its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the Marshall Islands MH96960 (the Borrower ); | |
(2) | ADVENTURE FIVE S.A. (the Free Goddess Owner ), ADVENTURE SIX S.A. (the Free Hero Owner ), ADVENTURE EIGHT S.A. (the Free Jupiter Owner ) and ADVENTURE TEN S.A. (the Free Lady Owner and, together with the Free Goddess Owner, the Free Hero Owner and the Free Jupiter Owner, the Owners ), each being a company incorporated in the Marshall Islands, with its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the Marshall Islands MH96960; | |
(3) | FREE BULKERS S.A. a company incorporated in the Marshall Islands, with its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the Marshall Islands MH96960 (the Manager ); and | |
(4) | CREDIT SUISSE AG (formerly known as CREDIT SUISSE ), a company incorporated in Switzerland, with its registered office at Paradeplatz 8, 8070 Zurich, Switzerland (the Bank ). |
(A) | this Agreement is supplemental to: |
(a) | a facility agreement dated 24 December 2007 (the Original Agreement ) made between the Borrower and the Bank as amended and restated by a supplemental agreement dated 26 June 2008 (the First Supplemental Agreement ) and as further amended and supplemented by a supplemental agreement dated 23 March 2009 (the Second Supplemental Agreement and, together with the Original Agreement and the First Supplemental Agreement, the Principal Agreement ), relating to a reducing revolving credit facility of up to Ninety one million Dollars ($91,000,000) (the Facility ) (of which the aggregate principal amount outstanding at the date hereof is Sixty eight million two hundred fifty thousand Dollars ($68,250,000)), upon the terms and conditions set out therein; | ||
(b) | the following documents relating to the Initial Ships and, registered on the date of this Agreement in the name of the relevant Initial Owner under the Marshall Islands flag: |
(i) | a general assignment dated 28 December 2007 (the Principal Free Goddess General Assignment ) made between the Free Goddess Owner and the Bank in respect of the Earnings, Insurances and Requisition Compensation in respect of Free Goddess ; | ||
(ii) | a general assignment dated 28 December 2007 (the Principal Free Hero General Assignment ) made between the Free Hero Owner and the Bank in respect of the Earnings, Insurances and Requisition Compensation in respect of Free Hero ; |
1
(iii) | a general assignment dated 14 April 2008 (the Principal Free Jupiter General Assignment and, together with the Principal Free Goddess General Assignment and the Principal Free Hero General Assignment, the Principal General Assignments and each a Principal General Assignment ) made between the Free Jupiter Owner and the Bank in respect of the Earnings, Insurances and Requisition Compensation in respect of Free Jupiter ; | ||
(iv) | a charter assignment dated 28 December 2007 (the Principal Free Goddess Charter Assignment ) made between the Free Goddess Owner and the Bank in respect of Free Goddess ; | ||
(v) | a charter assignment dated 28 December 2007 (the Principal Free Hero Charter Assignment ) made between the Free Hero Owner and the Bank in respect of Free Hero ; | ||
(vi) | a charter assignment dated 14 April 2008 (the Principal Free Jupiter Charter Assignment and, together with the Principal Free Goddess Charter Assignment and the Principal Free Hero Charter Assignment, the Principal Charter Assignments and each a Principal Charter Assignment ) made between the Free Jupiter Owner and the Bank in respect of Free Jupiter ; | ||
(vii) | a managers undertaking dated 28 December 2007 (the Principal Free Goddess Managers Undertaking ) executed by the Manager in favour of the Bank in respect of Free Goddess ; | ||
(viii) | a managers undertaking dated 28 December 2007 (the Principal Free Hero Managers Undertaking ) executed by the Manager in favour of the Bank in respect of Free Hero ; and | ||
(ix) | a managers undertaking dated 14 April 2008 (the Principal Free Jupiter Managers Undertaking and, together with the Principal Free Goddess Managers Undertaking and the Principal Free Hero Managers Undertaking, the Principal Managers Undertakings and each a Principal Managers Undertaking ) executed by the Manager in favour of the Bank in respect of Free Jupiter ; |
(B) | the Borrower and the Initial Owners wish to change the flag of each Initial Ship by deleting such Initial Ship from its existing Marshall Islands flag and registering it in the name of its Initial Owner under the laws and flag of the Republic of Liberia; and | |
(C) | this Agreement sets out the terms and conditions upon which the Bank shall, at the request of the Borrower and the Initial Owners, provide its consent to the change of flag of each Initial Ship from Marshall Islands to Liberia. |
1 | Definitions |
2
1.1 | Defined expressions | |
Words and expressions defined in the Principal Agreement shall unless the context otherwise requires or unless otherwise defined herein, have the same meanings when used in this Agreement. | ||
1.2 | Definitions | |
In this Agreement, unless the context otherwise requires: | ||
Effective Date means, in respect of each Initial Ship, the date being no later than 31 December 2009, on which the Bank notifies the Borrower in writing that the Bank has received the documents and evidence specified in (a) clause 5.1.1 and (b) clause 5.1.2 in respect of that Initial Ship, each in form and substance satisfactory to it; | ||
Existing Documents means, together, the Principal Agreement, the Principal General Assignments, the Principal Charter Assignments and the Principal Managers Undertakings; | ||
Existing Free Goddess Mortgage means the first preferred Marshall Islands ship mortgage over Free Goddess , dated 28 December 2007, as amended by an amendment No. 1 dated 4 July 2008 and an amendment No. 2 thereto dated 2 April 2009, all made between the Free Goddess Owner and the Bank; | ||
Existing Free Hero Mortgage means the first preferred Marshall Islands ship mortgage over Free Hero , dated 28 December 2007, as amended by an amendment No 1, dated 4 July 2008 and an amendment No. 2 thereto dated 2 April 2009, all made between the Free Hero Owner and the Bank; | ||
Existing Free Jupiter Mortgage means the first preferred Marshall Islands ship mortgage over Free Jupiter , dated 28 December 2007, as amended by an amendment No 1, dated 4 July 2008 and an amendment No. 2 thereto dated 2 April 2009, all made between the Free Jupiter Owner and the Bank; | ||
Existing Mortgages means together the Existing Free Goddess Mortgage, the Existing Free Hero Mortgage and the Existing Free Jupiter Mortgage and Existing Mortgage means any of them; | ||
Existing Register means the Marshall Islands Ships Register at the Port of Majuro, Marshall Islands; | ||
Facility Agreement means the Principal Agreement as amended and supplemented by this Agreement; | ||
Free Goddess Charter Assignment means the Principal Free Goddess Charter Assignment as amended by this Agreement; | ||
Free Goddess General Assignment means the Principal Free Goddess General Assignment as amended by this Agreement; |
3
Free Goddess Managers Undertaking means the Principal Free Goddess Managers Undertaking as amended by this Agreement; | ||
Free Hero Charter Assignment means the Principal Free Hero Charter Assignment as amended by this Agreement; | ||
Free Hero General Assignment means the Principal Free Hero General Assignment as amended by this Agreement; | ||
Free Hero Managers Undertaking means the Principal Free Hero Managers Undertaking as amended by this Agreement; | ||
Free Jupiter Charter Assignment means the Principal Free Jupiter Charter Assignment as amended by this Agreement; | ||
Free Jupiter General Assignment means the Principal Free Jupiter General Assignment as amended by this Agreement; | ||
Free Jupiter Managers Undertaking means the Principal Free Jupiter Managers Undertaking as amended by this Agreement; | ||
Initial Owners means the Owners excluding the Free Lady Owner; | ||
New Free Goddess Mortgage means the first preferred Liberian ship mortgage over Free Goddess , executed or (as the context may require) to be executed by the Free Goddess Owner in favour of the Bank in the form set out in schedule 2 and made in continuation of the Existing Free Goddess Mortgage; | ||
New Free Hero Mortgage means the first preferred Liberian ship mortgage over Free Hero , executed or (as the context may require) to be executed by the Free Hero Owner in favour of the Bank in the form set out in schedule 2 and made in continuation of the Existing Free Hero Mortgage; | ||
New Free Jupiter Mortgage means the first preferred Liberian ship mortgage over Free Jupiter , executed or (as the context may require) to be executed by the Free Jupiter Owner in favour of the Bank in the form set out in schedule 2 and made in continuation of the Existing Free Jupiter Mortgage; | ||
New Mortgages means, together, the New Free Goddess Mortgage, the New Free Hero Mortgage and the New Free Jupiter Mortgage and New Mortgage means any of them; | ||
New Register means the register of ships of the Republic of Liberia; | ||
Relevant Documents means, together, this Agreement and the New Mortgages and | ||
Relevant Document means any of them; and | ||
Relevant Parties means the Borrower, the Owners and the Manager or, where the context so requires or permits, means any or all of them. |
4
1.3 | Headings | |
Clause headings and the table of contents are inserted for convenience of reference only and shall be ignored in the interpretation of this Agreement. | ||
1.4 | Construction of certain terms | |
Clause 1.4 of the Principal Agreement shall apply to this Agreement (mutatis mutandis) as if set out herein and as if references therein to this Agreement were references to this Agreement. | ||
1.5 | Existing Documents | |
References in: | ||
1.5.1 | the Principal Agreement to this Agreement; | |
1.5.2 | the Principal General Assignment for an Initial Ship to this Deed or this Assignment; | |
1.5.3 | the Principal Charter Assignment for an Initial Ship to this Deed or this Assignment; and | |
1.5.4 | the Principal Managers Undertaking for an Initial Ship to this Letter or this Assignment, | |
shall, with effect from the Effective Date in respect of that Initial Ship and unless the context otherwise requires, be references to the Principal Agreement, that Principal General Assignment, that Principal Charter Assignment and that Principal Managers Undertaking respectively, each as amended by this Agreement on that Effective Date, and words such as herein, hereof, hereunder, hereafter, hereby and hereto, where they appear in the Principal Agreement and/or in the relevant Principal General Assignment and/or the relevant Principal Charter Assignment and/or the relevant Principal Managers Undertaking, shall be construed accordingly. | ||
2 | Consent of the Bank | |
2.1 | Consent | |
The Bank, relying upon the representations and warranties made by each of the Relevant Parties in clause 4, agree with the Borrower that, subject to the terms and conditions of this Agreement and in particular, but without prejudice to the generality of the foregoing, fulfilment on or before 31 December 2009 of the conditions contained in (a) clause 5.1.1 and (b) clause 5.1.2 in respect of an Initial Ship, the Bank consents to: | ||
2.1.1 | the transfer of that Initial Ship from the Existing Register to the New Register; and | |
2.1.2 | the amendment of the Existing Documents on the terms set out in clause 3. |
5
6
(i) | from the date of this Agreement until the Effective Date in relation to such Initial Ship, the Republic of Marshall Islands or; | ||
(ii) | at all other times thereafter, the Republic of Liberia; or |
3.1.3 | by deleting the words the Supplemental Agreement and replacing them with the words the Supplemental Agreements, and by deleting the words the Mortgage Addenda, each in the definition of Security Documents in clause 1. 2 of the Principal Agreement; | |
3.1.4 | by deleting the definitions Free Goddess , Free Hero and Free Jupiter in clause 1.1 of the Principal Agreement and inserting in the place of each one respectively the following new definitions of Free Goddess , Free Hero and Free Jupiter : | |
Free Goddess means the motor vessel Free Goddess , a 1995-built, 22,051 dwt bulk carrier, registered in the ownership of the Free Goddess Owner under the laws and flag of the relevant Flag State with IMO Number 9107045;; | ||
Free Hero means the motor vessel Free Hero , a 1995-built, 24,318 dwt bulk carrier registered in the ownership of the Free Hero Owner under the laws and flag of the relevant Flag State with IMO Number 9111591;; | ||
Free Jupiter means the motor vessel Free Jupiter , a 2002-built, 47,777 dwt bulk carrier, registered in the ownership of the Free Jupiter Owner under the laws and flag of the relevant Flag State with IMO Number 9264037;; | ||
3.1.5 | by deleting the definition of Mortgage in clause 1.2 of the Principal Agreement and by inserting in its place the following new definition of Mortgage : | |
Mortgage means: |
(a) | in relation to each Initial Ship: |
(i) | before the Effective Date in respect of such Initial Ship, the first preferred Marshall Islands mortgage over that Initial Ship dated 28 December 2007 or (in respect of Free Jupiter only) 14 April 2008; or | ||
(ii) | at all other times thereafter, the first preferred Liberian ship mortgage over that Initial Ship executed or (as the context may require) to be executed by the relevant Initial Owner in favour of the Bank in the form set out in schedule 2 of the Third Supplemental Agreement; or |
(b) | in relation to the Additional Ship, the first preferred Liberian Mortgage dated 7 July 2008 executed by the Additional Owner in favour of the Bank, |
and Mortgages means any or all of them;; | ||
3.1.6 | by deleting the definitions Mortgage Addendum and Supplemental Agreement in clause 1.2; |
7
3.1.7 | by deleting clause 15.1.3 in its entirety and inserting in its place a new clause 15.1.3: | |
15.1.3 be sent: |
(a) | if to the Borrower at: |
(b) | if to the Bank at: |
or to such other address and/or numbers as is notified by one party to the other party under this Agreement.. | ||
3.2 | Amendments to the Principal General Assignments | |
The Principal General Assignment in relation to an Initial Ship shall, with effect on and from the Effective Date for that Initial Ship, be (and it is hereby) amended by deleting the existing recital (E) thereto and by inserting in its place the following new recital (E) (and each Principal General Assignment (as so amended) will continue to be binding upon each of the parties hereto upon such terms as so amended): |
(E) | pursuant to the Loan Agreement there has been or will be executed by the Owner in favour of the Mortgagee a first preferred Liberian ship mortgage (the Mortgage ) on the m.v. Free Goddess documented in the name of the Owner under the laws and flag of the Republic of Liberia under Official Number 14519 (the Ship ) and the Mortgage has been or will be registered under the provisions of Chapter 3 of Title 21 of the Liberian Code of the Laws Revised as amended, as security for the payment by the Owner of the Outstanding Indebtedness (as that expression is defined in the Mortgage); and; |
(E) | pursuant to the Loan Agreement there has been or will be executed by the Owner in favour of the Mortgagee a first preferred Liberian ship mortgage |
8
(the Mortgage ) on the m.v. Free Hero documented in the name of the Owner under the laws and flag of the Republic of Liberia under Official Number 14520 ( Ship ) and the Mortgage has been or will be registered under the provisions of Chapter 3 of Title 21 of the Liberian Code of the Laws Revised as amended, as security for the payment by the Owner of the Outstanding Indebtedness (as that expression is defined in the Mortgage); and; |
(E) | pursuant to the Loan Agreement there has been or will be executed by the Owner in favour of the Mortgagee a first preferred Liberian ship mortgage (the Mortgage ) on the m.v. Free Jupiter documented in the name of the Owner under the laws and flag of the Republic of Liberia under Official Number 14521 (the Ship ) and the Mortgage has been or will be registered under the provisions of Chapter 3 of Title 21 of the Liberian Code of the Laws Revised as amended, as security for the payment by the Owner of the Outstanding Indebtedness (as that expression is defined in the Mortgage); and. |
3.3 | Amendments to the Principal Charter Assignments | |
The Principal Charter Assignment in relation to an Initial Ship shall, with effect on and from the Effective Date for that Initial Ship, be (and it is hereby) amended by deleting the existing recital (E) thereto and by inserting in its place the following new recital (E) (and the relevant Principal Charter Assignment (as so amended) will continue to be binding upon each of the parties hereto upon such terms as so amended): |
(E) | pursuant to the Loan Agreement, there has been or will be executed by the Owner in favour of the Mortgagee a first preferred Liberian ship mortgage (the Mortgage ) on the vessel Free Goddess documented in the name of the Owner under the laws and flag of the Republic of Liberia under Official Number 14519 (the Ship ) and the Mortgage has been or will be registered under the provisions of Chapter 3 of Title 21 of the Liberian Code of the Laws Revised as amended, as security for the payment by the Owner of the Outstanding Indebtedness (as that expression is defined in the Mortgage);; |
(E) | pursuant to the Loan Agreement, there has been or will be executed by the Owner in favour of the Mortgagee a first preferred Liberian ship mortgage (the Mortgage ) on the vessel Free Hero documented in the name of the Owner under the laws and flag of the Republic of Liberia under Official Number 14520 (the Ship ) and the Mortgage has been or will be registered under the provisions of Chapter 3 of Title 21 of the Liberian Code of the Laws Revised as amended of the Republic of Liberia, as security for the payment by the Owner of the Outstanding Indebtedness (as that expression is defined in the Mortgage);; |
9
(E) | pursuant to the Loan Agreement, there has been or will be executed by the Owner in favour of the Mortgagee a first preferred Liberian ship mortgage (the Mortgage ) on the vessel Free Jupiter documented in the name of the Owner under the laws and flag of the Republic of Liberia under Official Number 14521 (the Ship ) and the Mortgage has been or will be registered under the provisions of Chapter 3 of Title 21 of the Liberian Code of the Laws Revised as amended, as security for the payment by the Owner of the Outstanding Indebtedness (as that expression is defined in the Mortgage);. |
3.4 | Amendments to the Principal Managers Undertakings | |
The Principal Managers Undertaking in relation to an Initial Ship, shall with effect from the Effective Date for that Initial Ship, be (and it is hereby) amended by deleting the words Marshall Islands flag in the second line of paragraph 2 thereof and by inserting in their place the words Liberian flag (and each Principal Managers Undertaking (as so amended) will continue to be binding upon each of the parties hereto upon such terms as so amended). | ||
3.5 | Continued force and effect | |
Save as amended by this Agreement, the provisions of each of the Existing Documents shall continue in full force and effect and each of the Existing Documents and this Agreement shall be read and construed as one instrument. |
4 | Representations and warranties |
4.1 | Primary representations and warranties | |
Each of the Relevant Parties represents and warrants to the Bank that: | ||
4.1.1 | Existing representations and warranties | |
the representations and warranties set out in clause 7 of the Principal Agreement, clause 4 of each Owners Guarantee and clause 3 of each Managers Undertaking were true and correct on the date of the Principal Agreement and are true and correct, including to the extent that they may have been or shall be amended by this Agreement, as if made at the date of this Agreement with reference to the facts and circumstances existing at such date; | ||
4.1.2 | Corporate power | |
each of the Relevant Parties has power to execute, deliver and perform its obligations under the Relevant Documents to which it is or is to be a party; all necessary corporate, shareholder and other action has been taken by each of the Relevant Parties to authorise the execution, delivery and performance of the Relevant Documents to which it is or is to be a party; | ||
4.1.3 | Binding obligations |
10
the Relevant Documents to which it is or is to be a party constitute valid and legally binding obligations of each of the Relevant Parties enforceable in accordance with their terms; | ||
4.1.4 | No conflict with other obligations | |
the execution, delivery and performance of the Relevant Documents to which it is or is to be a party by each of the Relevant Parties will not (i) contravene any existing law, statute, rule or regulation or any judgment, decree or permit to which any of the Relevant Parties is subject, (ii) conflict with, or result in any breach of any of the terms of, or constitute a default under, any agreement or other instrument to which any of the Relevant Parties is a party or is subject or by which it or any of its property is bound or (iii) contravene or conflict with any provision of the constitutional documents of any of the Relevant Parties or (iv) result in the creation or imposition of or oblige any of the Relevant Parties to create any Encumbrance (other than a Permitted Encumbrance) on any of the undertaking, assets, rights or revenues of any of the Relevant Parties; | ||
4.1.5 | No filings required | |
save for the registration of the New Mortgages with the relevant Registry, it is not necessary to ensure the legality, validity, enforceability or admissibility in evidence of any of the Relevant Documents that they or any other instrument be notarised, filed, recorded, registered or enrolled in any court, public office or elsewhere in any Relevant Jurisdiction or that any stamp, registration or similar tax or charge be paid in any Relevant Jurisdiction on or in relation to the Relevant Documents and each of the Relevant Documents is in proper form for its enforcement in the courts of each Relevant Jurisdiction; | ||
4.1.6 | Choice of law | |
the choice of English law to govern this Agreement and the choice of the laws of the Republic of Liberia to govern the New Mortgages and the submissions by the Relevant Parties to the non-exclusive jurisdiction of the English courts, are valid and binding; and | ||
4.1.7 | Consents obtained | |
every consent, authorisation, licence or approval of, or registration or declaration to, governmental or public bodies or authorities or courts required by any of the Relevant Parties in connection with the execution, delivery, validity, enforceability or admissibility in evidence of the Relevant Documents to which it is or will become a party or the performance by any of the Relevant Parties of their respective obligations under such documents has been obtained or made and is in full force and effect and there has been no default in the observance of any conditions or restrictions (if any) imposed in, or in connection with, any of the same. | ||
4.2 | Repetition of representations and warranties | |
Each of the representations and warranties contained in clause 4.1 of this Agreement, clause 4 of each Owners Guarantee and clause 3 of each Managers Undertaking shall |
11
be deemed to be repeated by each of the Relevant Parties on each Effective Date as if made with reference to the facts and circumstances existing on such day. |
5 | Conditions |
5.1 | Documents and evidence | |
5.1.1 | Common conditions | |
The consent of the Bank referred to in clause 2 in respect of all Initial Ships shall be subject to the receipt by the Bank or its duly authorised representative of the documents and evidence specified in Part 1 of schedule 1 in form and substance satisfactory to the Bank. | ||
5.1.2 | Individual conditions | |
In addition to the conditions precedent referred to in clause 5.1.1 above, the consent of the Bank referred to in clause 2 in respect of an individual Initial Ship shall be subject to the receipt by the Bank or its duly authorised representative of the documents and evidence specified in Part 2 of schedule 1 in relation to that particular Initial Ship (referred to in Part 2 of schedule 1 as the Relevant Ship ), all in form and substance satisfactory to the Bank. | ||
5.2 | General conditions precedent | |
The consent of the Bank referred to in clause 2 in relation to each Initial Ship shall be further subject to: | ||
5.2.1 | the representations and warranties in clause 4 being true and correct on the relevant Effective Date for that Initial Ship as if each was made with respect to the facts and circumstances existing at such time; and | |
5.2.2 | no Default having occurred and continuing at the time of the relevant Effective Date for that Initial Ship. | |
5.3 | Waiver of conditions precedent | |
The conditions specified in this clause 5 are inserted solely for the benefit of the Bank and may be waived by the Bank in whole or in part with or without conditions. |
6 | Relevant Parties confirmation |
Each of the Relevant Parties hereby confirms its consent to the amendments to the Existing Documents contained in this Agreement and agrees that: | ||
6.1 | each of the Security Documents to which it is a party, and its obligations thereunder, shall remain in full force and effect notwithstanding the amendments made to the Existing Documents by this Agreement; and | |
6.2 | with effect from the first Effective Date to occur under this Agreement, references to the Agreement or the Facility Agreement or the the Loan Agreement in any of the Security Documents to which it is a party shall henceforth be references to the |
12
Principal Agreement as amended by this Agreement on that Effective Date and as from time to time hereafter amended; and |
6.3 | with effect from an Effective Date in respect of an Initial Ship, references in any of the Security Documents to which it is a party to the General Assignment , the Charter Assignment or the Managers Undertaking insofar as they relate to that Initial Ship, shall henceforth be references to such document as amended by this Agreement on that Effective Date and as from time to time hereafter amended. |
7 | Expenses |
7.1 | Expenses | |
The Borrower agrees to pay to the Bank on a full indemnity basis on demand all expenses (including legal and out-of-pocket expenses) incurred by the Bank: | ||
7.1.1 | in connection with the negotiation, preparation, execution and, where relevant, registration of this Agreement and the other Relevant Documents and of any amendment or extension of or the granting of any waiver or consent under this Agreement or the other Relevant Documents; and | |
7.1.2 | in contemplation of, or otherwise in connection with, the enforcement of, or preservation of any rights under this Agreement or the other Relevant Documents or otherwise in respect of the monies owing and obligations incurred under this Agreement and the other Relevant Documents, | |
together with interest at the rate referred to in clause 3.2 of the Principal Agreement from the date on which such expenses were incurred to the date of payment (as well after as before judgment). | ||
7.2 | Value Added Tax | |
All expenses payable pursuant to this clause 7 shall be paid together with value added tax or any similar tax (if any) properly chargeable thereon. | ||
7.3 | Stamp and other duties | |
The Borrower agrees to pay to the Bank on demand all stamp, documentary, registration or other like duties or taxes (including any duties or taxes payable by the Bank) imposed on or in connection with this Agreement and the other Relevant Documents and shall indemnify the Bank against any liability arising by reason of any delay or omission by the Borrower to pay such duties or taxes. |
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8 | Miscellaneous and notices |
8.1 | Notices | |
The provisions of clause 15.1 of the Principal Agreement shall extend and apply to the giving or making of notices or demands hereunder as if the same were expressly stated herein. | ||
8.2 | Counterparts | |
This Agreement may be executed in any number of counterparts and by the different parties on separate counterparts, each of which when so executed and delivered shall be an original but all counterparts shall together constitute one and the same instrument. |
9 | Applicable law |
9.1 | Law | |
This Agreement and any non-contractual obligations connected with it are governed by, and shall be construed in accordance with, English law. | ||
9.2 | Submission to jurisdiction | |
Each of the Relevant Parties agrees, for the benefit of the Bank, that any legal action or proceedings arising out of or in connection with this Agreement (including any non-contractual obligations connected with it) against any of the Relevant Parties or any of its assets may be brought in the English courts. Each of the Relevant Parties irrevocably and unconditionally submits to the jurisdiction of such courts and irrevocably designates, appoints and empowers Messrs Atlas Maritime Services Ltd. at present of Enterprise House, 113-115 George Lane, London E18 1AB, England to receive for it and on its behalf, service of process issued out of the English courts in any such legal action or proceedings. The submission to such jurisdiction shall not (and shall not be construed so as to) limit the right of the Relevant Parties in the courts of any other competent jurisdiction nor shall the taking of proceedings in any one or more jurisdictions preclude the taking of proceedings in any other jurisdiction, whether concurrently or not. The parties further agree that only the Courts of England and not those of any other State shall have jurisdiction to determine any claim which any of the Relevant Parties may have against the Bank arising out of or in connection with this Agreement (including any non-contractual obligations connected with it). |
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1 | Corporate authorisations | |
In relation to each of the Relevant Parties: |
(a) | Constitutional documents | ||
copies certified by an officer of each of the Relevant Parties, as true, complete and up to date copies, of all documents which contain or establish or relate to the constitution of that party or a secretarys certificate confirming that there have been no changes or amendments to the constitutional documents certified copies of which were previously delivered to the Bank pursuant to the Principal Agreement; | |||
(b) | Resolutions | ||
copies of resolutions of each of its board of directors and its shareholders approving such of the Relevant Documents to which it is or is to be a party and the terms and conditions hereof and thereof and authorising the signature, delivery and performance of each such partys obligations thereunder, certified (in a certificate dated no earlier than fifteen (15) Banking Days prior to the date of this Agreement) by an officer of the Relevant Parties: |
(1) | being true and correct; | ||
(2) | being duly passed at meetings of the directors of such Relevant Party and of the shareholders of such Relevant Party each duly convened and held; | ||
(3) | not having been amended, modified or revoked; and | ||
(4) | being in full force and effect |
together with originals or certified copies of any powers of attorney issued by any party pursuant to such resolutions; and | |||
(c) | Certificate of incumbency | ||
a list of directors and officers of each Relevant Party specifying the names and positions of such persons, certified (in a certificate dated no earlier than fifteen (15) Banking Days prior to the date of this Agreement) by an officer of such Relevant Party to be true, complete and up to date; |
15
2 | Consents | |
a certificate (dated no earlier than fifteen (15) Banking Days prior to the date of this Agreement) from an officer of each of the Relevant Parties stating that no consents, authorisations, licences or approvals are necessary for such Relevant Party to authorise, or are required by each of the Relevant Parties or any other party (other than the Bank) in connection with, the execution, delivery and performance of the Relevant Documents to which they are or will be a party; | ||
3 | Legal opinions | |
an opinion of Messrs Reeder & Simpson, special legal advisers on matters of Marshall Islands law to the Bank; and | ||
4 | Process agent | |
an original or certified true copy of a letter from each of the Relevant Parties agent for receipt of service of proceedings accepting its appointment under this Agreement or any other Relevant Document as each of the Relevant Parties process agent. |
16
1 | Deletion | |
A copy, certified by an officer of the Borrower, as a true, complete and up to date copy of, the deletion certificate issued in relation to the deletion of the Relevant Ship from its Existing Register and if such deletion certificate is not available on the date the Relevant Ship is registered in the name of the relevant Initial Owner in the New Registry no later than 10 Banking Days after such date; | ||
2 | Title | |
evidence that the Relevant Ship is registered in the name of the relevant Initial Owner in the New Register and that the Relevant Ship and its Earnings, Insurances and Requisition Compensation (as defined in the relevant New Mortgage) are free from Encumbrances other than Permitted Encumbrances; | ||
3 | New Mortgage registration | |
evidence that the relevant New Mortgage has been, or will simultaneously with the discharge of the relevant Existing Mortgage be, registered against the Relevant Ship through the New Register; | ||
4 | Insurance | |
evidence that the Relevant Ship is insured in accordance with the provisions of the New Mortgage and all requirements of such New Mortgage in respect of such insurances have been complied with (including evidence that the insurers of the Relevant Ship have been notified of and have approved the change of flag referred to in this Agreement); | ||
5 | Classification | |
evidence that the Relevant Ship maintains the relevant Classification free of all requirements and recommendations of the relevant Classification Society; | ||
6 | Legal opinions | |
legal opinions of Messrs Reeder & Simpson, special legal advisers on matters of Marshall Islands law and Liberian law to the Bank; |
17
7 | Process agent | |
an original or certified true copy of a letter from the agent of the Initial Owner of the Relevant Ship for receipt of service of proceedings accepting its appointment under the relevant New Mortgage as such Initial Owners process agent; | ||
8 | Registration forms | |
such statutory forms duly signed by the relevant Initial Owner and the other Relevant Parties as may be reasonably required by the Bank to perfect the security contemplated by the relevant New Mortgage for the Relevant Ship; and | ||
9 | Further matters of opinion | |
any such other matter or opinion as may be required by the Bank. |
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19
EXECUTED
as a
DEED
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) | |||||
by Ion Varouxakis
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) | |||||
for and on behalf of
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) | |||||
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/s/ Ion Varouxakis | |||||
FREESEAS INC.
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) | Attorney-in-fact | ||||
in the presence of:
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) | |||||
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/s/ Evangelia Platsidaki
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Witness
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Name: Evangelia Platsidaki
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Address:
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Occupation: Solicitor
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EXECUTED
as a
DEED
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) | |||||
by Ioannis Fassolis
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) | |||||
for and on behalf of
|
) | |||||
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/s/ Ioannis Fassolis | |||||
ADVENTURE FIVE S.A.
|
) | Attorney-in-fact | ||||
in the presence of:
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) | |||||
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||||||
/s/ Evangelia Platsidaki
|
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Witness
|
||||||
Name: Evangelia Platsidaki
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||||||
Address:
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||||||
Occupation: Solicitor
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||||||
EXECUTED
as a
DEED
|
) | |||||
by Ioannis Fassolis
|
) | |||||
for and on behalf of
|
) | |||||
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/s/ Ioannis Fassolis | |||||
ADVENTURE SIX S.A.
|
) | Attorney-in-fact | ||||
in the presence of:
|
) | |||||
|
||||||
/s/ Evangelia Platsidaki
|
||||||
Witness
|
||||||
Name: Evangelia Platsidaki
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||||||
Address:
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||||||
Occupation: Solicitor
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||||||
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||||||
EXECUTED
as a
DEED
|
) | |||||
by Ioannis Fassolis
|
) | |||||
for and on behalf of
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) | |||||
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/s/ Ioannis Fassolis | |||||
ADVENTURE EIGHT S.A.
|
) | Attorney-in-fact |
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in the presence of:
|
) | |||||
|
||||||
/s/ Evangelia Platsidaki
|
||||||
Witness
|
||||||
Name: Evangelia Platsidaki
|
||||||
Address:
|
||||||
Occupation: Solicitor
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||||||
|
||||||
EXECUTED
as a
DEED
|
) | |||||
by Ioannis Fassolis
|
) | |||||
for and on behalf of
|
) | |||||
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/s/ Ioannis Fassolis | |||||
ADVENTURE TEN S.A.
|
) | Attorney-in-fact | ||||
in the presence of:
|
) | |||||
|
||||||
/s/ Evangelia Platsidaki
|
||||||
Witness
|
||||||
Name: Evangelia Platsidaki
|
||||||
Address:
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||||||
Occupation: Solicitor
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||||||
|
||||||
EXECUTED
as a
DEED
|
) | |||||
by Ioannis Fassolis
|
) | |||||
for and on behalf of
|
) | |||||
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/s/ Ioannis Fassolis | |||||
FREE BULKERS S.A.
|
) | Attorney-in-fact | ||||
in the presence of:
|
) | |||||
|
||||||
/s/ Evangelia Platsidaki
|
||||||
Witness
|
||||||
Name: Evangelia Platsidaki
|
||||||
Address:
|
||||||
Occupation: Solicitor
|
||||||
|
||||||
EXECUTED
as a
DEED
|
) | |||||
by Evangelia Platsidaki
|
) | |||||
for and on behalf of
|
) | |||||
|
/s/ Evangelia Platsidaki | |||||
CREDIT SUISSE AG
|
) | Attorney-in-fact | ||||
(formerly known as
CREDIT SUISSE
)
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) | |||||
in the presence of:
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) |
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/s/ Niki Alexandrou
|
||||||
Witness
|
||||||
Name: Niki Alexandrou
|
||||||
Address:
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||||||
Occupation: Solicitor
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|
ADVENTURE FIVE S.A. | (1 | ) | |||
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in favour of | |||||
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CREDIT SUISSE AG | (2 | ) | |||
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(formerly known as CREDIT SUISSE) |
Clause | Page | |||
1 Definitions
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2 | |||
2 Grant, conveyance and mortgage
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6 | |||
3 Covenants to pay and perform
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6 | |||
4 Continuing security and other matters
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6 | |||
5 Covenants
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7 | |||
6 Powers of Mortgagee to protect security and remedy defaults
|
14 | |||
7 Powers of Mortgagee on Event of Default
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15 | |||
8 Application of moneys
|
16 | |||
9 Remedies cumulative and other provisions
|
16 | |||
10 Costs and indemnity
|
17 | |||
11 Attorney
|
17 | |||
12 Further assurance
|
18 | |||
13 Total amount and maturity
|
18 | |||
14 Law, jurisdiction and other provisions
|
18 | |||
15 Other provisions
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19 | |||
16 Notices
|
19 | |||
Schedule 1 The Principal Agreement
|
21 | |||
Schedule 2 The Second and Third Supplemental Agreements
|
22 | |||
Schedule 3 The Master Swap Agreement
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23 | |||
Schedule 4 The Corporate Guarantee
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24 | |||
Schedule 5 The Prior Mortgage
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25 |
(1) | ADVENTURE FIVE S.A. , a company incorporated under the laws of the Republic of Marshall Islands, whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 and qualified as a Foreign Maritime Entity in the Republic of Liberia (the Owner ) in favour of | |
(2) | CREDIT SUISSE AG (formerly known as CREDIT SUISSE ) of Paradeplatz 8, 8070 Zurich, Switzerland (the Mortgagee ). |
(A) | the Owner is the sole, absolute and unencumbered, legal and beneficial owner of the whole of m.v. Free Goddess documented under the laws and flag of the Republic of Liberia, Official Number 14519 of 13,695 gross tons and 7,710 net tons; | |
(B) | by a facility agreement dated 24 December 2007 (the Original Agreement ) and made between (i) FreeSeas Inc. (therein and herein referred to as the Borrower ) as borrower and (ii) the Mortgagee as lender (therein referred to as the Bank ) as amended and restated by a supplemental agreement dated 26 June 2008 made between (inter alios) the Borrower, the Owner and the Mortgagee (the First Supplemental Agreement and, together with the Original Agreement the Principal Agreement ) (a copy of the form of which Principal Agreement without its schedules is annexed hereto as schedule 1 and forms an integral part hereof) and as further amended and supplemented by a supplemental agreement dated 23 March 2009 made between (inter alios) the Borrower, the Owner and the Mortgagee (the Second Supplemental Agreement ) and a supplemental agreement dated 27 November 2009 (the Third Supplemental Agreement and together with the Principal Agreement and the Second Supplemental Agreement, the Loan Agreement ) (an executed copy of which Second Supplemental Agreement and a copy of the form of which Third Supplemental Agreement without their schedules are annexed hereto as schedule 2 and forms an integral part hereof), the Mortgagee agreed (inter alia) to make available to the Borrower, upon the terms and conditions therein contained, a reducing revolving credit facility of up to Ninety one million Dollars ($91,000,000); | |
(C) | by a 2002 ISDA master swap agreement dated as of 24 December 2007 (the Master Swap Agreement ) and made between the Borrower and the Mortgagee (a copy of the form of which Master Swap Agreement with its Schedule is annexed hereto as schedule 3 and forms an integral part hereof), the Mortgagee agreed the terms and conditions upon which it would enter into (inter alia) derivative transactions with the Borrower, whether in respect of the Loan (whether in whole or in part, as the case may be, from time to time) or for any other purpose whatsoever. The Owner has agreed pursuant to this Mortgage to secure the debts and obligations arising or that may arise in favour of the Mortgagee under the Master Swap Agreement and the Owner and the Mortgagee agree for the purpose of this Mortgage that the maximum amount of such obligations to be secured by this Mortgage shall be Eighteen million two hundred thousand Dollars ($18,200,000) (the Swap Obligations ); | |
(D) | pursuant to the said Loan Agreement, the Mortgagee as of the date hereof has advanced or has agreed to advance to the Borrower (and the Borrower is indebted to the Mortgagee in) a total principal amount of up to Ninety one million Dollars ($91,000,000) which (together with interest (as provided in clause 3.1 of the said Loan Agreement) thereon and fees) is to be repaid and paid, as the case may be, as provided in the Loan Agreement; | |
(E) | by a corporate guarantee (the Corporate Guarantee ) dated 28 December 2007 and executed by the Owner (therein referred to as the Guarantor ) in favour of the Mortgagee (a copy of the form of which Corporate Guarantee is annexed hereto as schedule 4 and forms an integral part hereof), the Owner (inter alia) guaranteed the payment of any moneys owing by |
1
the Borrower to the Mortgagee under the Loan Agreement, the Master Swap Agreement and the other Security Documents; | ||
(F) | prior to the date hereof, the Ship was registered in the Marshall Islands (the Prior Registry ) in the ownership of the Owner with Official No. 3030, I.M.O. No. 9107045 and with International Call Sign V7NW4 and the Owners obligation to repay the Outstanding Indebtedness was secured by, among other instruments, a first preferred Marshall Islands ship mortgage dated 28 December 2007 made by the Owner in favour of the Mortgagee and recorded on 28 December 2007 (the First Recording Date ) with the Office of the Maritime Administrator of the Marshall Islands (Book PM 18 at Page 1143), as amended by an amendment No. 1 dated 4 July 2008 made by the Owner in favour of the Mortgagee and recorded on 4 July 2008 with the Office of the Maritime Administrator of the Marshall Islands (Book PM 19 at Page 531) and an amendment No. 2 dated 2 April 2009 made by the Owner in favour of the Mortgagee and recorded on 2 April 2009 with the Office of the Maritime Administrator of the Marshall Islands (Book PM 20 at page 215) (together the Prior Mortgage ). A copy of the Prior Mortgage, together with a copy of a Certificate of Ownership and Encumbrance issued by the Registrar of Marshall Islands Ships on 2 April 2009 are annexed hereto as schedule 5; | |
(G) | pursuant to the Third Supplemental Agreement, the Mortgagee consented to the deletion of the Ship from the Marshall Islands registry and the registration of the Ship under the laws and flag of Liberia on condition that, inter alia, the Owner executes and records this Mortgage on the Ship for the purpose of securing the repayment of the said principal amount and interest thereon, costs, expenses of collection and all other sums of money from time to time owing to the Mortgagee under the said Corporate Guarantee and the performance and observance of and compliance with all of the covenants, terms and conditions in this Mortgage, the Corporate Guarantee, the Loan Agreement, the Master Swap Agreement, the Prior Mortgage and the other Security Documents, in continuation of the Prior Mortgage, and with preferred status as of the First Recording Date as provided under Section 101 of Title 21 of the Liberian Code of Laws Revised as amended; and | |
(H) | this Mortgage is the Mortgage in respect of the Ship referred to in the Loan Agreement. |
1.1 | Defined expressions | |
Words and expressions defined in the Loan Agreement and/or the Corporate Guarantee shall, unless the context otherwise requires or unless otherwise defined herein, have the same meanings when used in this Mortgage. | ||
1.2 | Definitions | |
In this Mortgage unless the context otherwise requires: | ||
Approved Brokers means such firm or firms of insurance brokers, appointed by the Owner, as may from time to time be approved in writing by the Mortgagee for the purposes of this Mortgage; | ||
Casualty Amount means Two hundred and fifty thousand Dollars ($250,000) (or the equivalent in any other currency); | ||
Collateral Instruments means notes, bills of exchange, certificates of deposit and other negotiable and non-negotiable instruments, guarantees, indemnities and other assurances against financial loss and any other documents or instruments which contain or evidence an obligation (with or without security) to pay, discharge or be responsible directly or indirectly for, any indebtedness or liabilities of the Owner or any other person liable and includes any |
2
documents or instruments creating or evidencing a mortgage, charge (whether fixed or floating), pledge, lien, hypothecation, assignment, trust arrangement or security interest of any kind; | ||
Earnings means all moneys whatsoever from time to time due or payable to the Owner during the Security Period arising out of the use or operation of the Ship including (but without limiting the generality of the foregoing) all freight, hire and passage moneys, income arising under pooling arrangements, compensation payable to the Owner in the event of requisition of the Ship for hire, remuneration for salvage and towage services, demurrage and detention moneys, and damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of the Ship; | ||
Event of Default means any of the events or circumstances described in clause 10.1 of the Loan Agreement; | ||
Expenses means the aggregate at any relevant time (to the extent that the same have not been received or recovered by the Mortgagee) of: |
(a) | all losses, liabilities, costs, charges, expenses, damages and outgoings of whatever nature, (including, without limitation, Taxes, repair costs, registration fees and insurance premiums) suffered, incurred or paid by the Mortgagee in connection with the exercise of the powers referred to in or granted by the Corporate Guarantee, the Loan Agreement, the Master Swap Agreement, this Mortgage, the General Assignment or any other of the Security Documents or otherwise payable by the Owner in accordance with clause 10 of this Mortgage or clause 8 of the General Assignment; and | ||
(b) | interest on all such losses, liabilities, costs, charges, expenses, damages and outgoings from the date on which the same were suffered, incurred or paid by the Mortgagee until the date of receipt or recovery thereof (whether before or after judgement) at a rate per annum calculated in accordance with clause 2.5 of the Corporate Guarantee (as conclusively certified by the Mortgagee); |
General Assignment means a deed of assignment dated 28 December 2007 as amended by a supplemental agreement dated 27 November 2009 made between the Owner and the Mortgagee whereby the Owner has assigned to the Mortgagee the Insurances, any Requisition Compensation and the Earnings of the Ship; | ||
Guaranteed Liabilities shall have the meaning ascribed thereto in the Corporate Guarantee; | ||
Insurances means all policies and contracts of insurance (which expression includes all entries of the Ship in a protection and indemnity or war risks association) which are from time to time during the Security Period in place or taken out or entered into by or for the benefit of the Owner (whether in the sole name of the Owner, or in the joint names of the Owner and the Mortgagee or otherwise) in respect of the Ship and her Earnings or otherwise howsoever in connection with the Ship and all benefits thereof (including claims of whatsoever nature and returns of premia); | ||
Loan means the total principal amount of up to Ninety one million Dollars ($91,000,000) referred to in recital (B) hereto advanced by the Mortgagee to the Borrower pursuant to the Loan Agreement or (as the context may require) the amount thereof at any time advanced and outstanding; | ||
Loan Agreement means, together, the agreement dated 24 December 2007 as amended and restated by the First Supplemental Agreement, as further amended by the Second Supplemental Agreement and the Third Supplemental Agreement, each mentioned in recital (B) hereto and as may be further amended and supplemented from time to time; | ||
Loss Payable Clauses means the provisions regulating the manner of payment of sums receivable under the Insurances which are to be incorporated in the relevant insurance |
3
documents, such provisions to be in the forms set out in schedule 1 to the General Assignment or in such other form as may from time to time be required or agreed in writing by the Mortgagee; | ||
Master Swap Agreement means the 2002 ISDA Master Agreement dated as of 24 December 2007 made between the Mortgagee and the Borrower mentioned in recital (C) hereto, comprising an ISDA Master Agreement (and a Schedule thereto), together with any Confirmations (as defined therein) supplemental thereto; | ||
Master Swap Agreement Liabilities means, at any relevant time, all liabilities, actual or contingent, present or future, owing by the Borrower to the Mortgagee under the Master Swap Agreement; | ||
Mortgagee includes the successors in title and the Assignees and/or Transferees of the Mortgagee; | ||
Notice of Assignment of Insurances means a notice of assignment in the form set out in schedule 2 to the General Assignment or in such other form as may from time to time be required or agreed in writing by the Mortgagee; | ||
Outstanding Indebtedness means the aggregate of the Guaranteed Liabilities and interest accrued and accruing thereon, the Master Swap Agreement Liabilities up to the maximum amount of Eighteen million two hundred thousand Dollars ($18,200,000), the Expenses and all other sums of money from time to time owing to the Mortgagee whether actually or contingently, under the Corporate Guarantee, the Loan Agreement, the Master Swap Agreement and the other Security Documents or any of them; | ||
Owner includes the successors in title of the Owner; | ||
Requisition Compensation means all moneys or other compensation from time to time payable during the Security Period by reason of the Compulsory Acquisition of the Ship; | ||
Security Documents means the Corporate Guarantee, the Loan Agreement, the Master Swap Agreement, this Mortgage, the General Assignment and any other such document as is defined in the Loan Agreement as a Security Document or as may have been or may hereafter be executed to guarantee and/or secure all or any part of the Guaranteed Liabilities, the Master Swap Agreement Liabilities, the Loan, interest thereon and other moneys from time to time owing by the Owner and/or any other Security Party pursuant to the Corporate Guarantee and/or any other Security Document (whether or not any such document also secures moneys from time to time owing pursuant to any other document or agreement); | ||
Security Period means the period commencing on the date hereof and terminating upon discharge of the security created by the Security Documents by payment of all moneys payable thereunder; | ||
Ship means the vessel described in Recital (A) hereto and includes any interest therein and her engines, machinery, boats, tackle, outfit, equipment, spare gear, fuel, consumable or other stores, belongings and appurtenances whether on board or ashore and whether now owned or hereafter acquired and also any and all additions, improvements and replacements hereafter made in or to such vessel or any part thereof or in or to her equipment and appurtenances aforesaid; | ||
Total Loss means: |
(a) | the actual, constructive, compromised or arranged total loss of the Ship; or | ||
(b) | the Compulsory Acquisition of the Ship; or |
4
(c) | the hijacking, theft, condemnation, capture, seizure, arrest, detention or confiscation of the Ship (other than where the same amounts to the Compulsory Acquisition of the Ship) by any Government Entity or by persons acting or purporting to act on behalf of any Government Entity unless the Ship be released and restored to the Owner from such hijacking, theft, condemnation, capture, seizure, arrest, detention or confiscation within thirty (30) days after the occurrence thereof. |
1.3 | Insurance terms | |
In clause 5.1.1: | ||
1.3.1 | excess risks means the proportion (if any) of claims for general average, salvage and salvage charges and under the ordinary collision clause not recoverable in consequence of the value at which a vessel is assessed for the purpose of such claims exceeding her insured value; | |
1.3.2 | protection and indemnity risks means the usual risks (including oil pollution and freight, demurrage and defence cover) covered by a protection and indemnity association which is a member of the International Group of P&I Clubs (including, without limitation, the proportion (if any) of any sums payable to any other person or persons in case of collision which are not recoverable under the hull and machinery policies by reason of the incorporation therein of Clause 8 of the Institute Time Clauses (Hulls) (1/11/95) or the Institute Amended Running Down Clause (1/10/71) or any equivalent provision; and | |
1.3.3 | war risks includes those risks covered by the standard form of English marine policy with Institute War and Strikes Clauses Hulls-Time (1/11/95) attached or similar cover. | |
1.4 | Headings | |
Clause headings and the table of contents are inserted for convenience of reference only and shall be ignored in the interpretation of this Mortgage. | ||
1.5 | Construction of certain terms | |
In this Mortgage, unless the context otherwise requires: | ||
1.5.1 | references to clauses and schedules are to be construed as references to clauses of, and schedules to, this Mortgage and references to this Mortgage include its schedules; | |
1.5.2 | references to (or to any specified provision of) this Mortgage or any other documents shall be construed as references to this Mortgage, that provision or that document as in force for the time being and as amended in accordance with the terms thereof or, as the case may be, with the agreement of the relevant parties; | |
1.5.3 | words importing the plural shall include the singular and vice versa; | |
1.5.4 | references to a person shall be construed as references to an individual, firm, company, corporation, unincorporated body of persons or any Government Entity; | |
1.5.5 | references to a guarantee include references to an indemnity or other assurance against financial loss 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; and | |
1.5.6 | references to statutory provisions shall be construed as references to those provisions as replaced or amended or re-enacted from time to time. |
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For good and valuable consideration (receipt of which is hereby acknowledged by the Owner) and, pursuant to the Corporate Guarantee and in order to secure the repayment of the Outstanding Indebtedness and to secure the performance and observance of and compliance with the covenants, terms and conditions contained in this Mortgage, the Corporate Guarantee, the Loan Agreement and the Master Swap Agreement, express or implied, the Owner has granted, conveyed and mortgaged and does by these presents grant, convey and mortgage unto the Mortgagee, the whole of the Ship TO HAVE AND TO HOLD the same unto the Mortgagee forever, upon the terms herein set forth, for the enforcement of the payment of the Outstanding Indebtedness and to secure the performance and observance of and compliance with the covenants, terms and conditions contained in this Mortgage, the Corporate Guarantee, the Loan Agreement and the Master Swap Agreement, express or implied. | ||
PROVIDED ONLY, and the condition of these presents is such that, if the Owner shall pay or cause to be repaid to the Mortgagee, the Outstanding Indebtedness as and when the same shall become due and payable in accordance with the terms of the Corporate Guarantee and this Mortgage and shall observe and comply with the covenants, terms and conditions contained in the Corporate Guarantee and this Mortgage, expressed or implied, to be performed, observed or complied with, by and on the part of the Owner, then these presents and the rights hereunder shall cease, determine and be void, otherwise to be and remain in full force and effect. | ||
IT IS NOT INTENDED that this Mortgage shall cover, and this Mortgage shall not cover, property other than the Ship as the term Vessel is used in Sub-division 1 of Section 106 of Chapter 3 of Title 21 of the Liberian Code of Laws Revised (as amended). |
3.1 | For the consideration aforesaid the Owner hereby covenants with the Mortgagee as follows: | |
3.1.1 | the Owner will pay to the Mortgagee any sums payable by the Owner pursuant to the Corporate Guarantee at the times and in the manner specified in the Corporate Guarantee; | |
3.1.2 | the Owner will pay to the Mortgagee interest on any such sums and overdue interest or other moneys payable under the Corporate Guarantee at the rates, at the times and in the manner specified in the Corporate Guarantee; | |
3.1.3 | the Owner will pay all other moneys comprising the Outstanding Indebtedness as and when the same shall become due and payable in accordance with the terms of the Corporate Guarantee and this Mortgage; | |
3.1.4 | the Owner will pay interest at a rate per annum calculated in accordance with clause 2.5 of the Corporate Guarantee (as conclusively certified by the Mortgagee) on any moneys which are by this Mortgage expressed to be payable on demand and which are not paid forthwith on demand being made as from the date of demand until payment (both before and after any judgment) provided however that this provision shall not affect the right of the Mortgagee to receive that part of its Expenses as comprises interest from such date prior to demand being made as is referred to in the definition of Expenses; and | |
3.1.5 | the Owner will keep, perform and observe the covenants and provisions of the Corporate Guarantee. |
4.1 | Continuing security | |
The security created by this Mortgage shall: |
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4.1.1 | be held by the Mortgagee as a continuing security for the payment of the Outstanding Indebtedness and the performance and observance of and compliance with all of the covenants, terms and conditions contained in the Corporate Guarantee, the Loan Agreement, the Master Swap Agreement or this Mortgage, express or implied, and the security so created shall not be satisfied by any intermediate payment or satisfaction of any part of the amount hereby and thereby secured (or by any settlement of accounts between the Owner or any other person who may be liable to the Mortgagee in respect of the Outstanding Indebtedness or any part thereof and the Mortgagee; | |
4.1.2 | be in addition to, and shall not in any way prejudice or affect, and may be enforced by the Mortgagee without prior recourse to, the security created by any other of the Security Documents or by any present or future Collateral Instruments, right or remedy held by or available to the Mortgagee or any right or remedy of the Mortgagee thereunder; and | |
4.1.3 | not be in any way prejudiced or affected by the existence of any of the other Security Documents or any such Collateral Instrument, rights or remedies or by the same becoming wholly or in part void, voidable or unenforceable on any ground whatsoever or by the Mortgagee dealing with, exchanging, varying or failing to perfect or enforce any of the same, or giving time for payment or performance or indulgence or compounding with any other person liable. | |
4.2 | Rights additional | |
All the rights, powers and remedies vested in the Mortgagee hereunder shall be in addition to and not a limitation of any and every other right, power or remedy vested in the Mortgagee under the Corporate Guarantee, the Loan Agreement, the Master Swap Agreement, this Mortgage, the other Security Documents or any Collateral Instrument or at law and all the rights, powers and remedies so vested in the Mortgagee may be exercised from time to time and as often as the Mortgagee may deem expedient. | ||
4.3 | No enquiry | |
The Mortgagee shall not be obliged to make any enquiry as to the nature or sufficiency of any payment received by it under this Mortgage or to make any claim or take any action to collect any moneys or to enforce any rights or benefits to which the Mortgagee may at any time be entitled under this Mortgage. | ||
4.4 | Waiver of rights | |
The Owner hereby waives any rights under the provisions of the laws of a given country which require the Mortgagee to levy execution against the Owner or make any demand or claim against the Owner prior to the enforcement of rights under this Mortgage. | ||
5 | Covenants | |
5.1 | The Owner further covenants with the Mortgagee and undertakes throughout the Security Period: | |
5.1.1 | Insurance |
(a) | Insured risks, amounts and terms | ||
to insure and keep the Ship insured free of cost and expense to the Mortgagee and in the sole name of the Owner or, if so required by the Mortgagee, in the joint names of the Owner and the Mortgagee (but without liability on the part of the Mortgagee for premiums or calls and to procure that no other assured shall be additionally named without the prior written consent of the Mortgagee): |
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(i) | against fire and usual marine risks (including excess risks) and war risks, on an agreed value basis, in such amounts (but not in any event less than whichever shall be the greater of (A) the market value of the Ship for the time being (as determined by the Mortgagee pursuant to clause 8.2 of the Loan Agreement) and (B) of an amount which, when aggregated with the equivalent insurance for all other Mortgaged Ships, shall be equal to at least one hundred and twenty per cent (120%) of (1) the Loan and (2) the Swap Exposure) and upon such terms as shall from time to time be approved in writing by the Mortgagee; | ||
(ii) | against protection and indemnity risks (including pollution risks for the highest amount in respect of which cover is or may become available for ships of the same type, size, age and flag as the Ship) for the full value and tonnage of the Ship (as approved in writing by the Mortgagee) and upon such terms as shall from time to time be approved in writing by the Mortgagee; and | ||
(iii) | in respect of such other matters of whatsoever nature and howsoever arising in respect of which insurance would be maintained by a prudent owner of the Ship, |
and to pay to the Mortgagee the cost (as conclusively certified by the Mortgagee) of (aa) any mortgagees interest insurance ( MII ) (including, if the Mortgagee shall so require, mortgagees additional perils (including all P&I risks) coverage ( MAP )) which the Mortgagee may from time to time effect in respect of the Ship upon such terms and in such amounts (not exceeding one hundred and ten per cent (110%) (in respect of MII) and one hundred and ten per cent (110%) (in respect of MAP), in each case, of (1) the Loan and (2) the Swap Exposure) as it shall deem desirable; and (bb) any other insurance cover which the Mortgagee may from time to time effect in respect of the Ship and/or in respect of its interest and potential third party liability as mortgagee of the Ship as the Mortgagee shall deem desirable having regard to any limitations in respect of amount or extent of cover which may from time to time be applicable to any of the other insurances referred to in this clause 5.1.1(a); | |||
(b) | Approved brokers, insurers and associations | ||
to effect the insurances aforesaid in such currency as the Mortgagee may approve and through the Approved Brokers (other than the said mortgagee interest insurance which shall be effected through brokers appointed by the Mortgagee) and with such insurance companies and/or underwriters having a Standard & Poor rating of at least BBB or a comparable rating of another comparable rating agency as shall from time to time be approved in writing by the Mortgagee; provided however that the insurances against war risks and protection and indemnity risks may be effected by the entry of the Ship with such war risks and protection and indemnity associations as shall from time to time be approved in writing by the Mortgagee; | |||
(c) | Fleet liens, set-off and cancellation | ||
if any of the insurances referred to in clause 5.1.1(a) form part of a fleet cover, to procure that the Approved Brokers shall undertake to the Mortgagee that they shall neither set off against any claims in respect of the Ship any premiums due in respect of other vessels under such fleet cover or any premiums due for other insurances, nor cancel the insurance for reason of non-payment of premiums for other vessels under such fleet cover or of premiums for such other insurances, and shall undertake to issue a separate policy in respect of the Ship if and when so requested by the Mortgagee; | |||
(d) | Payment of premiums and calls | ||
punctually to pay all premiums, calls, contributions or other sums payable in respect of all such insurances and to produce all relevant receipts or other evidence of payment when so required by the Mortgagee; |
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(e) | Renewal | ||
at least fourteen (14) days before the relevant policies, contracts or entries expire, to notify the Mortgagee of the names of the brokers and/or the war risks and protection and indemnity associations proposed to be employed by the Owner or any other party for the purposes of the renewal of such insurances and of the amounts in which such insurances are proposed to be renewed and the risks to be covered and, subject to compliance with any requirements of the Mortgagee pursuant to this clause 5.1.1, to procure that appropriate instructions for the renewal of such Insurances on the terms so specified are given to the Approved Brokers and/or to the approved war risks and protection and indemnity associations at least ten (10) days before the relevant policies, contracts or entries expire, and that the Approved Brokers and/or the approved war risks and protection and indemnity associations will at least seven (7) days before such expiry (or within such shorter period as the Mortgagee may from time to time agree) confirm in writing to the Mortgagee as and when such renewals have been effected in accordance with the instructions so given; | |||
(f) | Guarantees | ||
to arrange for the execution and delivery of such guarantees or indemnities as may from time to time be required by any protection and indemnity or war risks association; | |||
(g) | Hull policy documents, notices, loss payable clauses and brokers undertakings | ||
to deposit with the Approved Brokers (or procure the deposit of) all slips, cover notes, policies, certificates of entry or other instruments of insurance from time to time issued in connection with such of the insurances referred to in clause 5.1.1(a) as are effected through the Approved Brokers and procure that the interest of the Mortgagee shall be endorsed thereon by incorporation of the relevant Loss Payable Clause and, where the Insurances have been assigned to the Mortgagee, by means of a Notice of Assignment of Insurances (signed by the Owner and by any other assured who shall have assigned its interest in the Insurances to the Mortgagee) and that the Mortgagee shall be furnished with pro forma copies thereof and a letter or letters of undertaking from the Approved Brokers in such form as shall from time to time be required by the Mortgagee; | |||
(h) | Associations loss payable clauses, undertakings and certificates | ||
to procure that any protection and indemnity and/or war risks associations in which the Ship is for the time being entered shall endorse the relevant Loss Payable Clause on the relevant certificate of entry or policy and shall furnish the Mortgagee with a copy of such certificate of entry or policy and a letter or letters of undertaking in such form as may from time to time be required by the Mortgagee; | |||
(i) | Extent of cover and exclusions | ||
to take all necessary action and comply with all requirements which may from time to time be applicable to the Insurances (including, without limitation, the making of all requisite declarations within any prescribed time limits and the payment of any additional premiums or calls) so as to ensure that the Insurances are not made subject to any exclusions or qualifications to which the Mortgagee has not given its prior written consent and are otherwise maintained on terms and conditions from time to time approved in writing by the Mortgagee; | |||
(j) | Correspondence with brokers and associations | ||
to provide to the Mortgagee, at the time of each such communication, copies of all written communications between the Owner and the Approved Brokers and approved war risks and protection and indemnity associations which relate to compliance with requirements from time to time applicable to the Insurances including, without |
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limitation, all requisite declarations and payments of additional premiums or calls referred to in clause 5.1.1(i); | |||
(k) | Independent report | ||
if so requested by the Mortgagee, but at the cost of the Owner, to furnish the Mortgagee from time to time with a detailed report signed by an independent firm of marine insurance brokers appointed by the Mortgagee dealing with the insurances maintained on the Ship and stating the opinion of such firm as to the adequacy thereof; | |||
(l) | Collection of claims | ||
to do all things necessary and provide all documents, evidence and information to enable the Mortgagee to collect or recover any moneys which shall at any time become due in respect of the Insurances; | |||
(m) | Employment of Ship | ||
not to employ the Ship or suffer the Ship to be employed otherwise than in conformity with the terms of the Insurances (including any warranties express or implied therein) without first obtaining the consent of the insurers to such employment and complying with such requirements as to extra premium or otherwise as the insurers may prescribe; and |
(n) | Application of recoveries |
to apply all sums receivable under the Insurances which are paid to the Owner in accordance with the Loss Payable Clauses in repairing all damage and/or in discharging the liability in respect of which such sums shall have been received; |
5.1.2 | Ships name and registration |
not to change the name of the Ship and to register the Ship as a Liberian ship and not to do or suffer to be done anything, or omit to do anything the doing or omission of which could or might result in such registration being forfeited or imperilled or which could or might result in the Ship being required to be registered under any flag other than the Liberian flag and not to register the Ship or permit its registration under any other flag without the prior written consent of the Mortgagee; |
5.1.3 | Repair |
to keep the Ship in a good and efficient state of repair and to procure that all repairs to or replacement of any damaged, worn or lost parts or equipment are effected in such manner (both as regards workmanship and quality of materials) as not to diminish the value of the Ship; |
5.1.4 | Modification; removal of parts; equipment owned by third parties |
not without the prior written consent of the Mortgagee to or suffer any other person to: |
(a) | make any modification to the Ship in consequence of which her structure, type or performance characteristics could or might be materially altered or her value materially reduced; or | ||
(b) | remove any material part of the Ship or any equipment the value of which is such that its removal from the Ship would materially reduce the value of the Ship without replacing the same with equivalent parts or equipment which are owned by the Owner free from Encumbrances; or |
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(c) | install on the Ship any equipment owned by a third party which cannot be removed without causing damage to the structure or fabric of the Ship; |
5.1.5 | Maintenance of class; compliance with regulations |
to maintain the Classification as the class of the Ship and to comply with and ensure that the Ship at all times complies with the provisions of all laws, regulations and requirements (statutory or otherwise) from time to time applicable to vessels registered under the laws and flag of the Republic of Liberia or otherwise applicable to the Ship and to procure that the Classification Society shall make available to the Mortgagee upon its request such information and documents in respect of the Ship as are maintained in the records of the Classification Society; |
5.1.6 | Surveys |
to submit the Ship to continuous surveys and such periodical or other surveys as may be required for classification purposes and if so required to supply to the Mortgagee copies of all survey reports issued in respect thereof; |
5.1.7 | Inspection |
to ensure that the Mortgagee, by surveyors or other persons appointed by it (at the expense of the Owner) for such purpose, may board the Ship at all reasonable times for the purpose of inspecting her and her records and to afford all proper facilities for such inspections and for this purpose to give the Mortgagee reasonable advance notice of any intended drydocking of the Ship (whether for the purpose of classification, survey or otherwise) Provided that if no Event of Default has occurred the Owner shall only bear the cost of no more than one (1) such inspection in every two (2) calendar years; |
5.1.8 | Prevention of and release from arrest |
promptly to pay and discharge all debts, damages, liabilities and outgoings whatsoever which have given or may give rise to maritime, statutory or possessory liens on, or claims enforceable against, the Ship, her Earnings or Insurances or any part thereof and, in the event of a writ or libel being filed against the Ship, her Earnings or Insurances or any part thereof, or of any of the same being arrested, attached or levied upon pursuant to legal process or purported legal process or in the event of detention of the Ship in exercise or purported exercise of any such lien or claim as aforesaid, to procure the release of the Ship, her Earnings and Insurances from such arrest, detention, attachment or levy or, as the case may be, the discharge of the writ or libel forthwith upon receiving notice thereof by providing bail or procuring the provision of security or otherwise as the circumstances may require; |
5.1.9 | Employment |
not to employ the Ship or permit her employment in any manner, trade or business which is forbidden by Liberian law or international law, or which is otherwise unlawful or illicit under the law of any relevant jurisdiction, or in carrying illicit or prohibited goods, or in any manner whatsoever which may render her liable to condemnation in a prize court, or to destruction, seizure, confiscation, penalty or sanctions and, in the event of hostilities in any part of the world (whether war be declared or not), not to employ the Ship or permit her employment in carrying any contraband goods, or to enter or trade to or to continue to trade in any zone which has been declared a war zone by any Government Entity or by the Ships war risks insurers unless the prior written consent of the Mortgagee is obtained and such special insurance cover as the Mortgagee may require shall have been effected by the Owner and at its expense; |
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5.1.10 | Information |
promptly to furnish to the Mortgagee all such information as it may from time to time require regarding the Ship, her employment, position and engagements, particulars of all towages and salvages, and copies of all charters and other contracts for her employment or otherwise howsoever concerning her; |
5.1.11 | Notification of certain events |
to notify the Mortgagee forthwith by facsimile thereafter confirmed by letter of: |
(a) | any damage to the Ship requiring repairs the cost of which will or might exceed the Casualty Amount; | ||
(b) | any occurrence in consequence of which the Ship has or may become a Total Loss; | ||
(c) | any requisition of the Ship for hire; | ||
(d) | any requirement or recommendation made by any insurer or the Classification Society or by any competent authority which is not, or cannot be, complied with in accordance with its terms; | ||
(e) | any arrest or detention of the Ship or any exercise or purported exercise of a lien or other claim on the Ship or the Earnings or Insurances or any part thereof; | ||
(f) | any petition or notice of meeting to consider any resolution to wind-up the Owner (or any event analogous thereto under the laws of the place of its incorporation); | ||
(g) | the occurrence of any Default; | ||
(h) | the occurrence of any Environmental Claim against the Owner, the Ship, any other Relevant Party or any other Relevant Ship or any incident, event or circumstance which may give rise to any such Environmental Claim; or | ||
(i) | the occurrence of any other matter, event or incident, actual or threatened, the effect of which will or could lead to the ISPS Code not being complied with by the Owner; |
5.1.12 | Payment of outgoings and evidence of payments |
promptly to pay all tolls, dues and other outgoings whatsoever in respect of the Ship and her Earnings and Insurances and to keep proper books of account in respect of the Ship and her Earnings and, as and when the Mortgagee may so require, to make such books available for inspection on behalf of the Mortgagee, and to furnish satisfactory evidence that the wages and allotments and the insurance and pension contributions of the Master and crew are being promptly and regularly paid and that all deductions from crews wages in respect of any tax liability are being properly accounted for and that the Master has no claim for disbursements other than those incurred by him in the ordinary course of trading on the voyage then in progress; |
5.1.13 | Encumbrances |
not without the prior written consent of the Mortgagee (and then only subject to such conditions as the Mortgagee may impose) to hypothecate, create or purport or agree to create or permit to arise or subsist any Encumbrance (other than Permitted Liens) over or in respect of the Ship, any share or interest therein or in the Insurances, Earnings or Requisition Compensation or any part thereof or interest therein other than to or in favour of the Mortgagee; |
5.1.14 | Sale or other disposal |
not without the prior written consent of the Mortgagee (and then only subject to such terms and conditions as the Mortgagee may impose) to sell, agree to sell, transfer, abandon or otherwise dispose of the Ship or any share or interest therein; |
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5.1.15 | Chartering |
save under any charter relating to the Ship as disclosed to the Mortgagee by the Owner, not without the prior written consent of the Mortgagee (which the Mortgagee shall have full liberty to withhold) and, if such consent is given, only subject to such conditions as the Mortgagee may impose, to let the Ship: |
(a) | on demise charter for any period; | ||
(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; | ||
(c) | on terms whereby more than two (2) months hire (or the equivalent) is payable in advance; or | ||
(d) | below the market rate prevailing at the time when the Ship is fixed or other than on arms length terms; |
5.1.16 | Sharing of Earnings |
not without the prior written consent of the Mortgagee (and then only subject to such conditions as the Mortgagee may impose) to enter into any agreement or arrangement whereby the Earnings may be shared with any other person; |
5.1.17 | Payment of Earnings |
to procure that the Earnings are paid to the Operating Account for the Ship at all times unless and until the Mortgagee shall have directed to the contrary pursuant to clause 2.1.1 of the General Assignment and that any Earnings which are so payable and which are in the hands of the Owners brokers or agents are duly accounted for and paid over to the Mortgagee forthwith on demand; |
5.1.18 | Repairers liens |
not without the prior written consent of the Mortgagee to put the Ship into the possession of any person for the purpose of work being done upon her in an amount exceeding or likely to exceed the Casualty Amount unless such person shall first have given to the Mortgagee in terms satisfactory to it, a written undertaking not to exercise any lien on the Ship or her Earnings for the cost of such work or otherwise; |
5.1.19 | Manager |
not without the prior written consent of the Mortgagee to appoint manager of the Ship other than the Manager, or terminate, or amend the terms of, the relevant Management Agreement; |
5.1.20 | Compliance with Liberian law |
to cause this Mortgage to be recorded with the Deputy Commissioner for Maritime Affairs of the Republic of Liberia as prescribed by Chapter 3 of Title 21 of the Liberian Code of Laws Revised as amended and otherwise to comply with and satisfy all the requirements and formalities established by the said Liberian Code of Laws and any other pertinent legislation of the Republic of Liberia to perfect this Mortgage as a valid and enforceable first and preferred lien upon the Ship and to furnish to the Mortgagee from time to time such proofs as the Mortgagee may reasonably request for its satisfaction with respect to the Owners compliance with the provisions of this sub-clause; |
5.1.21 | Notice of Mortgage |
to place and at all times and places use due diligence to retain a properly certified copy of this Mortgage (which shall form part of the ships documents) on board the Ship with her |
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papers and cause such certified copy of this Mortgage to be exhibited to any and all persons having business with the Ship which might create or imply any commitment or encumbrance whatsoever on or in respect of the Ship (other than a lien for crews wages and salvage) and to any representative of the Mortgagee and to place and keep prominently displayed in the chart room and in the Masters cabin of the Ship a framed printed notice in plain type reading as follows: |
This Vessel is covered by a First Preferred Liberian Continuation Mortgage to CREDIT SUISSE AG (formerly known as CREDIT SUISSE ) of Paradeplatz 8, 8070 Zurich, Switzerland under authority of Title 21 of the Liberian Code of Laws Revised as amended. Under the terms of the said Mortgage neither the Owner nor any charterer nor the Master of this Vessel nor any other person has any right, power or authority to create, incur or permit to be imposed upon this Vessel any commitments or encumbrances whatsoever other than for crews wages and salvage; |
5.1.22 | Conveyance on default |
where the Ship is (or is to be) sold in exercise of any power contained in this Mortgage to execute, forthwith upon request by the Mortgagee, such form of conveyance of the Ship as the Mortgagee may require; |
5.1.23 | Anti-drug abuse |
without prejudice to clause 5.1.9, to take all necessary and proper precautions to prevent any infringements of the Anti-Drug Abuse Act of 1986 of the United States of America or any similar legislation applicable to the Ship in any jurisdiction in or to which the Ship shall be employed or located or trade or which may otherwise be applicable to the Ship and/or the Owner and, if the Mortgagee shall so require, to enter into a Carrier Initiative Agreement with the United States Customs and Border Protection and to procure that such agreement (or any similar agreement hereafter introduced by any Government Entity of the United States of America) is maintained in full force and effect and performed by the Owner; and |
5.1.24 | Compliance with environmental laws |
to comply with, and use all reasonable and proper endeavours to procure that all Environmental Affiliates of the Owner comply with, all Environmental Laws in relation to the Ship including, without limitation, requirements relating to manning, submission of oil spill response plans, designation of qualified individuals and establishing of financial responsibility and to obtain and comply with, and procure that all Environmental Affiliates of the Owner obtain and comply with, all Environmental Approvals in relation to the Ship. |
6 | Powers of Mortgagee to protect security and remedy defaults | |
6.1 | Protective action | |
The Mortgagee shall, without prejudice to its other rights, powers and remedies, be entitled (but not bound) at any time, and as often as may be necessary, to take any such action as it may in its discretion think fit for the purpose of protecting or maintaining the security created by this Mortgage and all Expenses attributable thereto shall be payable by the Owner on demand. | ||
6.2 | Remedy of defaults | |
Without prejudice to the generality of the provisions of clause 6.1: |
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6.2.1 | if the Owner fails to comply with any of the provisions of clause 5.1.1 the Mortgagee shall be entitled (but not bound) to effect and thereafter to maintain all such insurances upon the Ship as in its discretion it may think fit in order to procure the compliance with such provisions or alternatively, to require the Ship (at the Owners risk) to remain in, or to proceed to and remain in, a port designated by the Mortgagee until such provisions are fully complied with; | |
6.2.2 | if the Owner fails to comply with any of the provisions of clauses 5.1.3, 5.1.5 or 5.1.6, the Mortgagee shall be entitled (but not bound) to arrange for the carrying out of such repairs, changes or surveys as it may deem expedient or necessary in order to procure the compliance with such provisions; and | |
6.2.3 | if the Owner fails to comply with any of the provisions of clause 5.1.8, the Mortgagee shall be entitled (but not bound) to pay and discharge all such debts, damages, liabilities and outgoings as are therein mentioned and/or to take any such measures as it may deem expedient or necessary for the purpose of securing the release of the Ship in order to procure the compliance with such provisions, | |
and the Expenses attributable to the exercise by the Mortgagee of any such powers shall be payable by the Owner to the Mortgagee on demand. | ||
7 | Powers of Mortgagee on Event of Default | |
7.1 | Powers | |
Upon the happening of any Event of Default, the Mortgagee shall become forthwith entitled to demand in accordance with the provisions of the Corporate Guarantee the payment of the Outstanding Indebtedness immediately whereupon the Outstanding Indebtedness shall become so due and payable and (whether or not the Mortgagee shall have made any such demand) the Mortgagee shall become forthwith entitled as and when it may see fit, to put into force and exercise all or any of the rights, powers and remedies possessed by it as mortgagee of the Ship or otherwise (whether at law, by virtue of this Mortgage or otherwise) and in particular (without limiting the generality of the foregoing): | ||
7.1.1 | to exercise all the rights and remedies in foreclosure and otherwise given to mortgagees by the provisions of Chapter 3 of Title 21 of the Liberian Code of Laws Revised (as amended) and all applicable laws of any other jurisdiction; | |
7.1.2 | to take possession of the Ship; | |
7.1.3 | to require that all policies, contracts, certificates of entry and other records relating to the Insurances (including details of and correspondence concerning outstanding claims) be delivered forthwith to such adjusters and/or brokers and/or other insurers as the Mortgagee may nominate; | |
7.1.4 | to collect, recover, compromise and give a good discharge for, all claims then outstanding or thereafter arising under the Insurances or any of them or in respect of the Ship, her Earnings or Requisition Compensation or any part thereof, and to take over or institute (if necessary using the name of the Owner) all such proceedings in connection therewith as the Mortgagee in its absolute discretion thinks fit, and, in the case of the Insurances, to permit any brokers through whom collection or recovery is effected to charge the usual brokerage therefor; | |
7.1.5 | to discharge, compound, release or compromise claims in respect of the Ship, her Earnings, Insurances or Requisition Compensation or any part thereof which have given or may give rise to any charge or lien or other claim on the Ship, her Earnings, Insurances or Requisition Compensation or any part thereof or which are or may be enforceable by proceedings against the Ship, her Earnings, Insurances or Requisition Compensation or any part thereof; |
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7.1.6 | to sell the Ship or any share or interest therein with or without prior notice to the Owner, and with or without the benefit of any charterparty, and free from any claim by the Owner (whether in admiralty, in equity, at law or by statute) by public auction or private contract, at such place and upon such terms as the Mortgagee in its absolute discretion may determine, with power to postpone any such sale, and without being answerable for any loss occasioned by such sale or resulting from postponement thereof and with power, where the Mortgagee purchases the Ship, to make payment of the sale price by making an equivalent reduction in the amount of the Outstanding Indebtedness in the manner referred to in clause 8.1; | |
7.1.7 | to manage, insure, maintain and repair the Ship, and to employ, sail or lay up the Ship in such manner and for such period as the Mortgagee, in its absolute discretion, deems expedient accounting only for net profits arising from any such employment; and | |
7.1.8 | to recover from the Owner on demand all Expenses incurred or paid by the Mortgagee in connection with the exercise of the powers (or any of them) referred to in this clause 7.1. | |
7.2 | Dealings with Mortgagee | |
Upon any sale of the Ship or any share or interest therein by the Mortgagee pursuant to clause 7.1.6 or pursuant to clause 11.1, the purchaser shall not be bound to see or enquire whether the Mortgagees power of sale has arisen in the manner provided in this Mortgage or whether the Mortgagee has made a demand for payment under the provisions of the Corporate Guarantee and the sale shall be deemed to be within the power of the Mortgagee and the receipt of the Mortgagee for the purchase money shall effectively discharge the purchaser who shall not be concerned with the manner of application of the proceeds of sale or be in any way answerable therefor and the sale shall operate to divest the Owner of all rights, title and interest of any nature whatsoever in the Ship and to bar any such interest of the Owner, and all persons claiming through or under the Owner. | ||
8 | Application of moneys | |
8.1 | Application | |
All moneys received by the Mortgagee in respect of a sale of the Ship or any share or interest therein or in respect of the employment of the Ship pursuant to the provisions of clause 7.1.7 (or otherwise pursuant to the provisions of this Mortgage) and all moneys received and retained by the Mortgagee in respect of the Insurances pursuant to this Mortgage shall be held by it upon trust in the first place to pay or make good the Expenses and the balance shall be applied in the manner specified in clause 2.10 of the Corporate Guarantee. | ||
8.2 | Shortfall | |
In the event that the balance referred to in clause 8.1 is insufficient to pay in full the whole of the Outstanding Indebtedness, the Mortgagee shall be entitled to collect the shortfall from the Owner or any other person liable therefor. | ||
9 | Remedies cumulative and other provisions | |
9.1 | No implied waivers; remedies cumulative | |
No failure or delay on the part of the Mortgagee to exercise any right, power or remedy vested in it under the Corporate Guarantee or this Mortgage shall operate as a waiver thereof, nor shall any single or partial exercise by the Mortgagee of any right, power or remedy nor the discontinuance, abandonment or adverse determination of any proceedings taken by the Mortgagee to enforce any right, power or remedy preclude any other or further exercise thereof or proceedings to enforce the same or the exercise of any other right, power or remedy, nor shall the giving by the Mortgagee of any consent to any act which by the terms of this Mortgage requires such consent prejudice the right of the Mortgagee to give or withhold |
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consent to the doing of any other similar act. The remedies provided in the Corporate Guarantee and this Mortgage are cumulative and are not exclusive of any remedies provided by law. | ||
9.2 | Preferred status | |
Anything herein to the contrary notwithstanding, it is intended that nothing herein shall waive the preferred status of this Mortgage and that, if any provision or portion hereof shall be construed to waive the preferred status of this Mortgage, then such provision or portion to such extent shall be void and of no effect. | ||
9.3 | Delegation | |
The Mortgagee shall be entitled, at any time and as often as may be expedient, to delegate all or any of the powers and discretions vested in it by the Corporate Guarantee or this Mortgage (including the power vested in it by virtue of clause 11) in such manner, upon such terms, and to such persons as the Mortgagee in its absolute discretion may think fit. | ||
9.4 | Incidental powers | |
The Mortgagee shall be entitled to do all acts and things incidental or conducive to the exercise of any of the rights, powers or remedies possessed by it as mortgagee of the Ship (whether at law, under this Mortgage or otherwise) and in particular (but without prejudice to the generality of the foregoing), upon becoming entitled to exercise any of its powers under clause 7.1, the Mortgagee shall be entitled to discharge any cargo on board the Ship (whether the same shall belong to the Owner or any other person) and to enter into such other arrangements respecting the Ship, her insurances, management, maintenance, repair, classification and employment in all respects as if the Mortgagee was the owner of the Ship, but without being responsible for any loss incurred as a result of the Mortgagee doing or omitting to do any such acts or things as aforesaid. | ||
10 | Costs and indemnity | |
10.1 | Costs | |
The Owner shall pay to the Mortgagee on demand on a full indemnity basis all expenses or liabilities of whatsoever nature (including legal fees, fees of insurance advisers, printing, out-of-pocket expenses, stamp duties, registration fees and other duties or charges) together with any value added tax or similar tax payable in respect thereof, incurred by the Mortgagee in connection with the exercise or enforcement of, or preservation of any rights under, the Corporate Guarantee or this Mortgage or otherwise in respect of the Outstanding Indebtedness and the security therefor, or in connection with the preparation, completion, execution or registration of the Corporate Guarantee or this Mortgage. | ||
10.2 | Mortgagees indemnity | |
The Owner hereby agrees and undertakes to indemnify the Mortgagee against all losses, actions, claims, expenses, demands, obligations and liabilities whatever and whenever arising which may now or hereafter be incurred by the Mortgagee or by any manager, agent, officer or employee for whose liability, act or omission the Mortgagee may be answerable in respect of, in relation to, or in connection with anything done or omitted in the exercise or purported exercise of the powers contained in this Mortgage or otherwise in connection with such powers or with this Mortgage or with the Ship, its Earnings, Requisition Compensation and Insurances or otherwise howsoever in relation to, or in connection with, any of the matters dealt with in the Corporate Guarantee or this Mortgage. | ||
11 | Attorney |
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11.1 | Power | |
By way of security, the Owner hereby irrevocably appoints the Mortgagee to be its attorney generally for and in the name and on behalf of the Owner, and as the act and deed or otherwise of the Owner to execute, seal and deliver and otherwise perfect and do all such deeds, assurances, agreements, instruments, acts and things which may be required for the full exercise of all or any of the rights, powers or remedies conferred by the Corporate Guarantee, this Mortgage or any of the other Security Documents, or which may be deemed proper in or in connection with all or any of the purposes aforesaid (including, without prejudice to the generality of the foregoing, the execution and delivery of a bill of sale of the Ship). The power of attorney hereby conferred shall be a general power of attorney and the Owner ratifies and confirms, and agrees to ratify and confirm, any deed, assurance, agreement, instrument, act or thing which the Mortgagee may execute or do pursuant thereto. Provided however that such power shall not be exercisable by or on behalf of the Mortgagee until the happening of an Event of Default. | ||
11.2 | Dealings with attorney | |
The exercise of such power by or on behalf of the Mortgagee shall not put any person dealing with the Mortgagee upon any enquiry as to whether any Event of Default has happened, nor shall such person be in any way affected by notice that no such Event of Default has happened, and the exercise by the Mortgagee of such power shall be conclusive evidence of the Mortgagees right to exercise the same. | ||
11.3 | Filings | |
The Owner hereby irrevocably appoints the Mortgagee to be its attorney in its name and on its behalf and as its act and deed or otherwise of it to agree the form of and to execute and do all deeds, instruments, acts and things in order to file, record, register or enrol this Mortgage in any court, public office or elsewhere which the Mortgagee may in its discretion consider necessary or advisable, now or in the future, to ensure the legality, validity, enforceability or admissibility in evidence thereof. | ||
12 | Further assurance | |
The Owner hereby further undertakes at its own expense from time to time to execute, sign, perfect, do and (if required) register every such further assurance, document, act or thing as in the opinion of the Mortgagee may be necessary or desirable for the purpose of more effectually mortgaging and charging the Ship or perfecting the security constituted or intended to be constituted by this Mortgage or contemplated by the Corporate Guarantee. | ||
13 | Total amount and maturity | |
For the purpose of recording this First Preferred Mortgage as required by Chapter 3 of Title 21 of the Liberian Code of Laws Revised as amended the total amount is One hundred and nine million two hundred thousand Dollars ($109,200,000) (of which Ninety one million Dollars ($91,000,000) represents the maximum principal amount of the Loan that may be outstanding at any one time and Eighteen million two hundred thousand Dollars ($18,200,000) represents maximum amount secured by this Mortgage with respect to the Swap Obligations) and interest on the Loan and performance of mortgage covenants. The date of maturity is 31 October 2015 and the discharge amount is the same as the total amount. | ||
14 | Law, jurisdiction and other provisions | |
14.1 | Law | |
This Mortgage and any non-contractual obligations connected with it are governed by, and shall be construed and enforceable in accordance with, the laws of the Republic of Liberia. |
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14.2 | Submission to jurisdiction | |
For the benefit of the Mortgagee, the Owner irrevocably agrees, that any legal action or proceedings in connection with this Mortgage (including any non-contractual obligations connected with it) may be brought in the English courts, or in the courts of any other country chosen by the Mortgagee, each of which shall have jurisdiction to settle any disputes arising out of, or in connection with, this Mortgage. The Owner irrevocably and unconditionally submits to the jurisdiction of the English courts and the courts of any country chosen by the Mortgagee and irrevocably designates, appoints and empowers Atlas Maritime Service Ltd. at present of Enterprise House, 113-115 George Lane, London E18 1AB, England to receive, for it and on its behalf, service of process issued out of the English courts in any legal action or proceedings arising out of or in connection with this Mortgage (including any non-contractual obligations connected with it). The submission to such jurisdiction shall not (and shall not be construed so as to) limit the right of the Mortgagee to take proceedings against the Owner or the Ship in any other court of competent jurisdiction nor shall the taking of proceedings in any one or more jurisdictions preclude the taking of proceedings in any other jurisdiction, whether concurrently or not. | ||
15 | Other provisions | |
15.1 | Severability | |
If any provision in the Corporate Guarantee, the Loan Agreement, the Master Swap Agreement, this Mortgage or any of the other Security Documents be or becomes invalid or unenforceable under any applicable law the provisions hereof shall in all other respects remain in full force and effect and the provision in question shall be ineffective to the extent (but only to the extent) of its disconformity with the requirement of the applicable law and if it is competent to the parties to waive any requirements which would otherwise operate as aforesaid those requirements are hereby waived to the extent permitted by such law to the end that the Corporate Guarantee, the Loan Agreement, the Master Swap Agreement, this Mortgage and each of the other Security Documents shall be valid, binding and enforceable in accordance with their respective terms. | ||
15.2 | Counterparts | |
This Mortgage may be executed in any number of counterparts each of which shall be an original but such counterparts shall together constitute one and the same instrument. | ||
15.3 | Continuation Mortgage | |
This Mortgage is granted in continuation of the Prior Mortgage within the meaning of Section 101 of Title 21 of the Liberian Code of Laws Revised as amended, and upon recordation of this Mortgage in accordance with the provisions of Title 21 of the Liberian Code of Laws Revised as amended, this Mortgage shall have preferred status as of 28 December 2007, the First Recording Date. | ||
16 | Notices | |
16.1 | Every notice, request, demand or other communication under this Mortgage shall: | |
16.1.1 | be in writing delivered personally or by first-class prepaid letter (airmail if available) or facsimile transmission or other means of telecommunication in permanent written form; | |
16.1.2 | be deemed to have been received in the case of a letter, when delivered personally or three (3) days after it has been put in to the post and, in the case of a facsimile transmission or other means of telecommunication in permanent written form, at the time of despatch (provided that if the date of despatch is not a business day in the country of the addressee or if the time of despatch is after the close of business in the country of the addressee it shall be deemed to have been received at the opening of business on the next such business day); and |
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16.1.3 | be sent: |
(a) | if to the Owner at: | ||
c/o Free Bulkers S.A.
89 Akti Miaouli 185 38 Piraeus Greece Fax no: +30 210 429 1010 Attention: Mr Ion Varouxakis |
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(b) | if to the Mortgagee at: | ||
Credit Suisse AG
Paradeplatz 8 8070 Zurich Switzerland Fax: +41 612 667 939 Attention: Mr Gianrichy Giamboi |
or to such other address and/or numbers as is notified by one party to the other party under this Mortgage. |
ADVENTURE FIVE S.A.
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By: | /s/ Ioannis Fassolis | |||
Name: | Ioannis Fassolis | |||
Title: | Attorney-in-Fact |
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Special Agent
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ADVENTURE SIX S.A. | (1 | ) | |||
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in favour of | |||||
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CREDIT SUISSE AG | (2 | ) | |||
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(formerly known as CREDIT SUISSE) |
Clause | Page | |||
1 Definitions
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2 Grant, conveyance and mortgage
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3 Covenants to pay and perform
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4 Continuing security and other matters
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5 Covenants
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6 Powers of Mortgagee to protect security and remedy defaults
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7 Powers of Mortgagee on Event of Default
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8 Application of moneys
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9 Remedies cumulative and other provisions
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10 Costs and indemnity
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11 Attorney
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12 Further assurance
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13 Total amount and maturity
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14 Law, jurisdiction and other provisions
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15 Other provisions
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16 Notices
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Schedule 1 The Principal Agreement
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Schedule 2 The Second and Third Supplemental Agreements
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Schedule 3 The Master Swap Agreement
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Schedule 4 The Corporate Guarantee
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Schedule 5 The Prior Mortgage
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(1) | ADVENTURE SIX S.A. , a company incorporated under the laws of the Republic of Marshall Islands, whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 and qualified as a Foreign Maritime Entity in the Republic of Liberia (the Owner ) in favour of | |
(2) | CREDIT SUISSE AG (formerly known as CREDIT SUISSE ) of Paradeplatz 8, 8070 Zurich, Switzerland (the Mortgagee ). |
(A) | the Owner is the sole, absolute and unencumbered, legal and beneficial owner of the whole of m.v. Free Hero documented under the laws and flag of the Republic of Liberia, Official Number 14520 of 15,737 gross tons and 8,039 net tons; | |
(B) | by a facility agreement dated 24 December 2007 (the Original Agreement ) and made between (i) FreeSeas Inc. (therein and herein referred to as the Borrower ) as borrower and (ii) the Mortgagee as lender (therein referred to as the Bank ) as amended and restated by a supplemental agreement dated 26 June 2008 made between (inter alios) the Borrower, the Owner and the Mortgagee (the First Supplemental Agreement and, together with the Original Agreement the Principal Agreement ) (a copy of the form of which Principal Agreement without its schedules is annexed hereto as schedule 1 and forms an integral part hereof) and as further amended and supplemented by a supplemental agreement dated 23 March 2009 made between (inter alios) the Borrower, the Owner and the Mortgagee (the Second Supplemental Agreement ) and a supplemental agreement dated 27 November 2009 (the Third Supplemental Agreement and together with the Principal Agreement and the Second Supplemental Agreement, the Loan Agreement ) (an executed copy of which Second Supplemental Agreement and a copy of the form of which Third Supplemental Agreement without their schedules are annexed hereto as schedule 2 and forms an integral part hereof), the Mortgagee agreed (inter alia) to make available to the Borrower, upon the terms and conditions therein contained, a reducing revolving credit facility of up to Ninety one million Dollars ($91,000,000); | |
(C) | by a 2002 ISDA master swap agreement dated as of 24 December 2007 (the Master Swap Agreement ) and made between the Borrower and the Mortgagee (a copy of the form of which Master Swap Agreement with its Schedule is annexed hereto as schedule 3 and forms an integral part hereof), the Mortgagee agreed the terms and conditions upon which it would enter into (inter alia) derivative transactions with the Borrower, whether in respect of the Loan (whether in whole or in part, as the case may be, from time to time) or for any other purpose whatsoever. The Owner has agreed pursuant to this Mortgage to secure the debts and obligations arising or that may arise in favour of the Mortgagee under the Master Swap Agreement and the Owner and the Mortgagee agree for the purpose of this Mortgage that the maximum amount of such obligations to be secured by this Mortgage shall be Eighteen million two hundred thousand Dollars ($18,200,000) (the Swap Obligations ); | |
(D) | pursuant to the said Loan Agreement, the Mortgagee as of the date hereof has advanced or has agreed to advance to the Borrower (and the Borrower is indebted to the Mortgagee in) a total principal amount of up to Ninety one million Dollars ($91,000,000) which (together with interest (as provided in clause 3.1 of the said Loan Agreement) thereon and fees) is to be repaid and paid, as the case may be, as provided in the Loan Agreement; | |
(E) | by a corporate guarantee (the Corporate Guarantee ) dated 28 December 2007 and executed by the Owner (therein referred to as the Guarantor ) in favour of the Mortgagee (a copy of the form of which Corporate Guarantee is annexed hereto as schedule 4 and forms an integral part hereof), the Owner (inter alia) guaranteed the payment of any moneys owing by |
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the Borrower to the Mortgagee under the Loan Agreement, the Master Swap Agreement and the other Security Documents; |
(F) | prior to the date hereof, the Ship was registered in the Marshall Islands (the Prior Registry ) in the ownership of the Owner with Official No. 2540, I.M.O. No. 9111591 and with International Call Sign V7JL2 and the Owners obligation to repay the Outstanding Indebtedness was secured by, among other instruments, a first preferred Marshall Islands ship mortgage dated 28 December 2007 made by the Owner in favour of the Mortgagee and recorded on 28 December 2007 (the First Recording Date ) with the Office of the Maritime Administrator of the Marshall Islands (Book PM 18 at Page 1144), as amended by an amendment No. 1 dated 4 July 2008 made by the Owner in favour of the Mortgagee and recorded on 4 July 2008 with the Office of the Maritime Administrator of the Marshall Islands (Book PM 19 at Page 525) and an amendment No. 2 dated 2 April 2009 made by the Owner in favour of the Mortgagee and recorded on 2 April 2009 with the Office of the Maritime Administrator of the Marshall Islands (Book PM 20 at Page 216) (together the Prior Mortgage ). A copy of the Prior Mortgage, together with a copy of a Certificate of Ownership and Encumbrance issued by the Registrar of Marshall Islands Ships on 2 April 2009 are annexed hereto as schedule 5; | |
(G) | pursuant to the Third Supplemental Agreement, the Mortgagee consented to the deletion of the Ship from the Marshall Islands registry and the registration of the Ship under the laws and flag of Liberia on condition that, inter alia, the Owner executes and records this Mortgage on the Ship for the purpose of securing the repayment of the said principal amount and interest thereon, costs, expenses of collection and all other sums of money from time to time owing to the Mortgagee under the said Corporate Guarantee and the performance and observance of and compliance with all of the covenants, terms and conditions in this Mortgage, the Corporate Guarantee, the Loan Agreement, the Master Swap Agreement, the Prior Mortgage and the other Security Documents, in continuation of the Prior Mortgage, and with preferred status as of the First Recording Date as provided under Section 101 of Title 21 of the Liberian Code of Laws Revised as amended; and | |
(H) | this Mortgage is the Mortgage in respect of the Ship referred to in the Loan Agreement. |
1 | Definitions | |
1.1 | Defined expressions | |
Words and expressions defined in the Loan Agreement and/or the Corporate Guarantee shall, unless the context otherwise requires or unless otherwise defined herein, have the same meanings when used in this Mortgage. | ||
1.2 | Definitions | |
In this Mortgage unless the context otherwise requires: | ||
Approved Brokers means such firm or firms of insurance brokers, appointed by the Owner, as may from time to time be approved in writing by the Mortgagee for the purposes of this Mortgage; | ||
Casualty Amount means Two hundred and fifty thousand Dollars ($250,000) (or the equivalent in any other currency); | ||
Collateral Instruments means notes, bills of exchange, certificates of deposit and other negotiable and non-negotiable instruments, guarantees, indemnities and other assurances against financial loss and any other documents or instruments which contain or evidence an obligation (with or without security) to pay, discharge or be responsible directly or indirectly for, any indebtedness or liabilities of the Owner or any other person liable and includes any |
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documents or instruments creating or evidencing a mortgage, charge (whether fixed or floating), pledge, lien, hypothecation, assignment, trust arrangement or security interest of any kind; | ||
Earnings means all moneys whatsoever from time to time due or payable to the Owner during the Security Period arising out of the use or operation of the Ship including (but without limiting the generality of the foregoing) all freight, hire and passage moneys, income arising under pooling arrangements, compensation payable to the Owner in the event of requisition of the Ship for hire, remuneration for salvage and towage services, demurrage and detention moneys, and damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of the Ship; | ||
Event of Default means any of the events or circumstances described in clause 10.1 of the Loan Agreement; | ||
Expenses means the aggregate at any relevant time (to the extent that the same have not been received or recovered by the Mortgagee) of: |
(a) | all losses, liabilities, costs, charges, expenses, damages and outgoings of whatever nature, (including, without limitation, Taxes, repair costs, registration fees and insurance premiums) suffered, incurred or paid by the Mortgagee in connection with the exercise of the powers referred to in or granted by the Corporate Guarantee, the Loan Agreement, the Master Swap Agreement, this Mortgage, the General Assignment or any other of the Security Documents or otherwise payable by the Owner in accordance with clause 10 of this Mortgage or clause 8 of the General Assignment; and | ||
(b) | interest on all such losses, liabilities, costs, charges, expenses, damages and outgoings from the date on which the same were suffered, incurred or paid by the Mortgagee until the date of receipt or recovery thereof (whether before or after judgement) at a rate per annum calculated in accordance with clause 2.5 of the Corporate Guarantee (as conclusively certified by the Mortgagee); |
General Assignment means a deed of assignment dated 28 December 2007 as amended by a supplemental agreement dated 27 November 2009 made between the Owner and the Mortgagee whereby the Owner has assigned to the Mortgagee the Insurances, any Requisition Compensation and the Earnings of the Ship; | ||
Guaranteed Liabilities shall have the meaning ascribed thereto in the Corporate Guarantee; | ||
Insurances means all policies and contracts of insurance (which expression includes all entries of the Ship in a protection and indemnity or war risks association) which are from time to time during the Security Period in place or taken out or entered into by or for the benefit of the Owner (whether in the sole name of the Owner, or in the joint names of the Owner and the Mortgagee or otherwise) in respect of the Ship and her Earnings or otherwise howsoever in connection with the Ship and all benefits thereof (including claims of whatsoever nature and returns of premia); | ||
Loan means the total principal amount of up to Ninety one million Dollars ($91,000,000) referred to in recital (B) hereto advanced by the Mortgagee to the Borrower pursuant to the Loan Agreement or (as the context may require) the amount thereof at any time advanced and outstanding; | ||
Loan Agreement means, together, the agreement dated 24 December 2007 as amended and restated by the First Supplemental Agreement, as further amended by the Second Supplemental Agreement and the Third Supplemental Agreement, each mentioned in recital (B) hereto and as may be further amended and supplemented from time to time; | ||
Loss Payable Clauses means the provisions regulating the manner of payment of sums receivable under the Insurances which are to be incorporated in the relevant insurance |
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documents, such provisions to be in the forms set out in schedule 1 to the General Assignment or in such other form as may from time to time be required or agreed in writing by the Mortgagee; | ||
Master Swap Agreement means the 2002 ISDA Master Agreement dated as of 24 December 2007 made between the Mortgagee and the Borrower mentioned in recital (C) hereto, comprising an ISDA Master Agreement (and a Schedule thereto), together with any Confirmations (as defined therein) supplemental thereto; | ||
Master Swap Agreement Liabilities means, at any relevant time, all liabilities, actual or contingent, present or future, owing by the Borrower to the Mortgagee under the Master Swap Agreement; | ||
Mortgagee includes the successors in title and the Assignees and/or Transferees of the Mortgagee; | ||
Notice of Assignment of Insurances means a notice of assignment in the form set out in schedule 2 to the General Assignment or in such other form as may from time to time be required or agreed in writing by the Mortgagee; | ||
Outstanding Indebtedness means the aggregate of the Guaranteed Liabilities and interest accrued and accruing thereon, the Master Swap Agreement Liabilities up to the maximum amount of Eighteen million two hundred thousand Dollars ($18,200,000), the Expenses and all other sums of money from time to time owing to the Mortgagee whether actually or contingently, under the Corporate Guarantee, the Loan Agreement, the Master Swap Agreement and the other Security Documents or any of them; | ||
Owner includes the successors in title of the Owner; | ||
Requisition Compensation means all moneys or other compensation from time to time payable during the Security Period by reason of the Compulsory Acquisition of the Ship; | ||
Security Documents means the Corporate Guarantee, the Loan Agreement, the Master Swap Agreement, this Mortgage, the General Assignment and any other such document as is defined in the Loan Agreement as a Security Document or as may have been or may hereafter be executed to guarantee and/or secure all or any part of the Guaranteed Liabilities, the Master Swap Agreement Liabilities, the Loan, interest thereon and other moneys from time to time owing by the Owner and/or any other Security Party pursuant to the Corporate Guarantee and/or any other Security Document (whether or not any such document also secures moneys from time to time owing pursuant to any other document or agreement); | ||
Security Period means the period commencing on the date hereof and terminating upon discharge of the security created by the Security Documents by payment of all moneys payable thereunder; | ||
Ship means the vessel described in Recital (A) hereto and includes any interest therein and her engines, machinery, boats, tackle, outfit, equipment, spare gear, fuel, consumable or other stores, belongings and appurtenances whether on board or ashore and whether now owned or hereafter acquired and also any and all additions, improvements and replacements hereafter made in or to such vessel or any part thereof or in or to her equipment and appurtenances aforesaid; | ||
Total Loss means: |
(a) | the actual, constructive, compromised or arranged total loss of the Ship; or | ||
(b) | the Compulsory Acquisition of the Ship; or |
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(c) | the hijacking, theft, condemnation, capture, seizure, arrest, detention or confiscation of the Ship (other than where the same amounts to the Compulsory Acquisition of the Ship) by any Government Entity or by persons acting or purporting to act on behalf of any Government Entity unless the Ship be released and restored to the Owner from such hijacking, theft, condemnation, capture, seizure, arrest, detention or confiscation within thirty (30) days after the occurrence thereof. |
1.3 | Insurance terms | |
In clause 5.1.1: | ||
1.3.1 | excess risks means the proportion (if any) of claims for general average, salvage and salvage charges and under the ordinary collision clause not recoverable in consequence of the value at which a vessel is assessed for the purpose of such claims exceeding her insured value; | |
1.3.2 | protection and indemnity risks means the usual risks (including oil pollution and freight, demurrage and defence cover) covered by a protection and indemnity association which is a member of the International Group of P&I Clubs (including, without limitation, the proportion (if any) of any sums payable to any other person or persons in case of collision which are not recoverable under the hull and machinery policies by reason of the incorporation therein of Clause 8 of the Institute Time Clauses (Hulls) (1/11/95) or the Institute Amended Running Down Clause (1/10/71) or any equivalent provision; and | |
1.3.3 | war risks includes those risks covered by the standard form of English marine policy with Institute War and Strikes Clauses Hulls-Time (1/11/95) attached or similar cover. | |
1.4 | Headings | |
Clause headings and the table of contents are inserted for convenience of reference only and shall be ignored in the interpretation of this Mortgage. | ||
1.5 | Construction of certain terms | |
In this Mortgage, unless the context otherwise requires: | ||
1.5.1 | references to clauses and schedules are to be construed as references to clauses of, and schedules to, this Mortgage and references to this Mortgage include its schedules; | |
1.5.2 | references to (or to any specified provision of) this Mortgage or any other documents shall be construed as references to this Mortgage, that provision or that document as in force for the time being and as amended in accordance with the terms thereof or, as the case may be, with the agreement of the relevant parties; | |
1.5.3 | words importing the plural shall include the singular and vice versa; | |
1.5.4 | references to a person shall be construed as references to an individual, firm, company, corporation, unincorporated body of persons or any Government Entity; | |
1.5.5 | references to a guarantee include references to an indemnity or other assurance against financial loss 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; and | |
1.5.6 | references to statutory provisions shall be construed as references to those provisions as replaced or amended or re-enacted from time to time. |
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4.1.1 | be held by the Mortgagee as a continuing security for the payment of the Outstanding Indebtedness and the performance and observance of and compliance with all of the covenants, terms and conditions contained in the Corporate Guarantee, the Loan Agreement, the Master Swap Agreement or this Mortgage, express or implied, and the security so created shall not be satisfied by any intermediate payment or satisfaction of any part of the amount hereby and thereby secured (or by any settlement of accounts between the Owner or any other person who may be liable to the Mortgagee in respect of the Outstanding Indebtedness or any part thereof and the Mortgagee; | |
4.1.2 | be in addition to, and shall not in any way prejudice or affect, and may be enforced by the Mortgagee without prior recourse to, the security created by any other of the Security Documents or by any present or future Collateral Instruments, right or remedy held by or available to the Mortgagee or any right or remedy of the Mortgagee thereunder; and | |
4.1.3 | not be in any way prejudiced or affected by the existence of any of the other Security Documents or any such Collateral Instrument, rights or remedies or by the same becoming wholly or in part void, voidable or unenforceable on any ground whatsoever or by the Mortgagee dealing with, exchanging, varying or failing to perfect or enforce any of the same, or giving time for payment or performance or indulgence or compounding with any other person liable. | |
4.2 | Rights additional | |
All the rights, powers and remedies vested in the Mortgagee hereunder shall be in addition to and not a limitation of any and every other right, power or remedy vested in the Mortgagee under the Corporate Guarantee, the Loan Agreement, the Master Swap Agreement, this Mortgage, the other Security Documents or any Collateral Instrument or at law and all the rights, powers and remedies so vested in the Mortgagee may be exercised from time to time and as often as the Mortgagee may deem expedient. | ||
4.3 | No enquiry | |
The Mortgagee shall not be obliged to make any enquiry as to the nature or sufficiency of any payment received by it under this Mortgage or to make any claim or take any action to collect any moneys or to enforce any rights or benefits to which the Mortgagee may at any time be entitled under this Mortgage. | ||
4.4 | Waiver of rights | |
The Owner hereby waives any rights under the provisions of the laws of a given country which require the Mortgagee to levy execution against the Owner or make any demand or claim against the Owner prior to the enforcement of rights under this Mortgage. | ||
5 | Covenants | |
5.1 | The Owner further covenants with the Mortgagee and undertakes throughout the Security Period: | |
5.1.1 | Insurance |
(a) | Insured risks, amounts and terms | ||
to insure and keep the Ship insured free of cost and expense to the Mortgagee and in the sole name of the Owner or, if so required by the Mortgagee, in the joint names of the Owner and the Mortgagee (but without liability on the part of the Mortgagee for premiums or calls and to procure that no other assured shall be additionally named without the prior written consent of the Mortgagee): |
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(i) | against fire and usual marine risks (including excess risks) and war risks, on an agreed value basis, in such amounts (but not in any event less than whichever shall be the greater of (A) the market value of the Ship for the time being (as determined by the Mortgagee pursuant to clause 8.2 of the Loan Agreement) and (B) of an amount which, when aggregated with the equivalent insurance for all other Mortgaged Ships, shall be equal to at least one hundred and twenty per cent (120%) of (1) the Loan and (2) the Swap Exposure) and upon such terms as shall from time to time be approved in writing by the Mortgagee; | ||
(ii) | against protection and indemnity risks (including pollution risks for the highest amount in respect of which cover is or may become available for ships of the same type, size, age and flag as the Ship) for the full value and tonnage of the Ship (as approved in writing by the Mortgagee) and upon such terms as shall from time to time be approved in writing by the Mortgagee; and | ||
(iii) | in respect of such other matters of whatsoever nature and howsoever arising in respect of which insurance would be maintained by a prudent owner of the Ship, |
and to pay to the Mortgagee the cost (as conclusively certified by the Mortgagee) of (aa) any mortgagees interest insurance ( MII ) (including, if the Mortgagee shall so require, mortgagees additional perils (including all P&I risks) coverage ( MAP )) which the Mortgagee may from time to time effect in respect of the Ship upon such terms and in such amounts (not exceeding one hundred and ten per cent (110%) (in respect of MII) and one hundred and ten per cent (110%) (in respect of MAP), in each case, of (1) the Loan and (2) the Swap Exposure) as it shall deem desirable; and (bb) any other insurance cover which the Mortgagee may from time to time effect in respect of the Ship and/or in respect of its interest and potential third party liability as mortgagee of the Ship as the Mortgagee shall deem desirable having regard to any limitations in respect of amount or extent of cover which may from time to time be applicable to any of the other insurances referred to in this clause 5.1.1(a); |
(b) | Approved brokers, insurers and associations | ||
to effect the insurances aforesaid in such currency as the Mortgagee may approve and through the Approved Brokers (other than the said mortgagee interest insurance which shall be effected through brokers appointed by the Mortgagee) and with such insurance companies and/or underwriters having a Standard & Poor rating of at least BBB or a comparable rating of another comparable rating agency as shall from time to time be approved in writing by the Mortgagee; provided however that the insurances against war risks and protection and indemnity risks may be effected by the entry of the Ship with such war risks and protection and indemnity associations as shall from time to time be approved in writing by the Mortgagee; | |||
(c) | Fleet liens, set-off and cancellation | ||
if any of the insurances referred to in clause 5.1.1(a) form part of a fleet cover, to procure that the Approved Brokers shall undertake to the Mortgagee that they shall neither set off against any claims in respect of the Ship any premiums due in respect of other vessels under such fleet cover or any premiums due for other insurances, nor cancel the insurance for reason of non-payment of premiums for other vessels under such fleet cover or of premiums for such other insurances, and shall undertake to issue a separate policy in respect of the Ship if and when so requested by the Mortgagee; | |||
(d) | Payment of premiums and calls | ||
punctually to pay all premiums, calls, contributions or other sums payable in respect of all such insurances and to produce all relevant receipts or other evidence of payment when so required by the Mortgagee; |
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(e) | Renewal | ||
at least fourteen (14) days before the relevant policies, contracts or entries expire, to notify the Mortgagee of the names of the brokers and/or the war risks and protection and indemnity associations proposed to be employed by the Owner or any other party for the purposes of the renewal of such insurances and of the amounts in which such insurances are proposed to be renewed and the risks to be covered and, subject to compliance with any requirements of the Mortgagee pursuant to this clause 5.1.1, to procure that appropriate instructions for the renewal of such Insurances on the terms so specified are given to the Approved Brokers and/or to the approved war risks and protection and indemnity associations at least ten (10) days before the relevant policies, contracts or entries expire, and that the Approved Brokers and/or the approved war risks and protection and indemnity associations will at least seven (7) days before such expiry (or within such shorter period as the Mortgagee may from time to time agree) confirm in writing to the Mortgagee as and when such renewals have been effected in accordance with the instructions so given; | |||
(f) | Guarantees | ||
to arrange for the execution and delivery of such guarantees or indemnities as may from time to time be required by any protection and indemnity or war risks association; | |||
(g) | Hull policy documents, notices, loss payable clauses and brokers undertakings | ||
to deposit with the Approved Brokers (or procure the deposit of) all slips, cover notes, policies, certificates of entry or other instruments of insurance from time to time issued in connection with such of the insurances referred to in clause 5.1.1(a) as are effected through the Approved Brokers and procure that the interest of the Mortgagee shall be endorsed thereon by incorporation of the relevant Loss Payable Clause and, where the Insurances have been assigned to the Mortgagee, by means of a Notice of Assignment of Insurances (signed by the Owner and by any other assured who shall have assigned its interest in the Insurances to the Mortgagee) and that the Mortgagee shall be furnished with pro forma copies thereof and a letter or letters of undertaking from the Approved Brokers in such form as shall from time to time be required by the Mortgagee; | |||
(h) | Associations loss payable clauses, undertakings and certificates | ||
to procure that any protection and indemnity and/or war risks associations in which the Ship is for the time being entered shall endorse the relevant Loss Payable Clause on the relevant certificate of entry or policy and shall furnish the Mortgagee with a copy of such certificate of entry or policy and a letter or letters of undertaking in such form as may from time to time be required by the Mortgagee; | |||
(i) | Extent of cover and exclusions | ||
to take all necessary action and comply with all requirements which may from time to time be applicable to the Insurances (including, without limitation, the making of all requisite declarations within any prescribed time limits and the payment of any additional premiums or calls) so as to ensure that the Insurances are not made subject to any exclusions or qualifications to which the Mortgagee has not given its prior written consent and are otherwise maintained on terms and conditions from time to time approved in writing by the Mortgagee; | |||
(j) | Correspondence with brokers and associations | ||
to provide to the Mortgagee, at the time of each such communication, copies of all written communications between the Owner and the Approved Brokers and approved war risks and protection and indemnity associations which relate to compliance with requirements from time to time applicable to the Insurances including, without |
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limitation, all requisite declarations and payments of additional premiums or calls referred to in clause 5.1.1(i); | |||
(k) | Independent report | ||
if so requested by the Mortgagee, but at the cost of the Owner, to furnish the Mortgagee from time to time with a detailed report signed by an independent firm of marine insurance brokers appointed by the Mortgagee dealing with the insurances maintained on the Ship and stating the opinion of such firm as to the adequacy thereof; | |||
(l) | Collection of claims | ||
to do all things necessary and provide all documents, evidence and information to enable the Mortgagee to collect or recover any moneys which shall at any time become due in respect of the Insurances; | |||
(m) | Employment of Ship | ||
not to employ the Ship or suffer the Ship to be employed otherwise than in conformity with the terms of the Insurances (including any warranties express or implied therein) without first obtaining the consent of the insurers to such employment and complying with such requirements as to extra premium or otherwise as the insurers may prescribe; and | |||
(n) | Application of recoveries | ||
to apply all sums receivable under the Insurances which are paid to the Owner in accordance with the Loss Payable Clauses in repairing all damage and/or in discharging the liability in respect of which such sums shall have been received; |
5.1.2 | Ships name and registration | |
not to change the name of the Ship and to register the Ship as a Liberian ship and not to do or suffer to be done anything, or omit to do anything the doing or omission of which could or might result in such registration being forfeited or imperilled or which could or might result in the Ship being required to be registered under any flag other than the Liberian flag and not to register the Ship or permit its registration under any other flag without the prior written consent of the Mortgagee; | ||
5.1.3 | Repair | |
to keep the Ship in a good and efficient state of repair and to procure that all repairs to or replacement of any damaged, worn or lost parts or equipment are effected in such manner (both as regards workmanship and quality of materials) as not to diminish the value of the Ship; | ||
5.1.4 | Modification; removal of parts; equipment owned by third parties | |
not without the prior written consent of the Mortgagee to or suffer any other person to: |
(a) | make any modification to the Ship in consequence of which her structure, type or performance characteristics could or might be materially altered or her value materially reduced; or | ||
(b) | remove any material part of the Ship or any equipment the value of which is such that its removal from the Ship would materially reduce the value of the Ship without replacing the same with equivalent parts or equipment which are owned by the Owner free from Encumbrances; or |
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(c) | install on the Ship any equipment owned by a third party which cannot be removed without causing damage to the structure or fabric of the Ship; |
5.1.5 | Maintenance of class; compliance with regulations | |
to maintain the Classification as the class of the Ship and to comply with and ensure that the Ship at all times complies with the provisions of all laws, regulations and requirements (statutory or otherwise) from time to time applicable to vessels registered under the laws and flag of the Republic of Liberia or otherwise applicable to the Ship and to procure that the Classification Society shall make available to the Mortgagee upon its request such information and documents in respect of the Ship as are maintained in the records of the Classification Society; | ||
5.1.6 | Surveys | |
to submit the Ship to continuous surveys and such periodical or other surveys as may be required for classification purposes and if so required to supply to the Mortgagee copies of all survey reports issued in respect thereof; | ||
5.1.7 | Inspection | |
to ensure that the Mortgagee, by surveyors or other persons appointed by it (at the expense of the Owner) for such purpose, may board the Ship at all reasonable times for the purpose of inspecting her and her records and to afford all proper facilities for such inspections and for this purpose to give the Mortgagee reasonable advance notice of any intended drydocking of the Ship (whether for the purpose of classification, survey or otherwise) Provided that if no Event of Default has occurred the Owner shall only bear the cost of no more than one (1) such inspection in every two (2) calendar years; | ||
5.1.8 | Prevention of and release from arrest | |
promptly to pay and discharge all debts, damages, liabilities and outgoings whatsoever which have given or may give rise to maritime, statutory or possessory liens on, or claims enforceable against, the Ship, her Earnings or Insurances or any part thereof and, in the event of a writ or libel being filed against the Ship, her Earnings or Insurances or any part thereof, or of any of the same being arrested, attached or levied upon pursuant to legal process or purported legal process or in the event of detention of the Ship in exercise or purported exercise of any such lien or claim as aforesaid, to procure the release of the Ship, her Earnings and Insurances from such arrest, detention, attachment or levy or, as the case may be, the discharge of the writ or libel forthwith upon receiving notice thereof by providing bail or procuring the provision of security or otherwise as the circumstances may require; | ||
5.1.9 | Employment | |
not to employ the Ship or permit her employment in any manner, trade or business which is forbidden by Liberian law or international law, or which is otherwise unlawful or illicit under the law of any relevant jurisdiction, or in carrying illicit or prohibited goods, or in any manner whatsoever which may render her liable to condemnation in a prize court, or to destruction, seizure, confiscation, penalty or sanctions and, in the event of hostilities in any part of the world (whether war be declared or not), not to employ the Ship or permit her employment in carrying any contraband goods, or to enter or trade to or to continue to trade in any zone which has been declared a war zone by any Government Entity or by the Ships war risks insurers unless the prior written consent of the Mortgagee is obtained and such special insurance cover as the Mortgagee may require shall have been effected by the Owner and at its expense; |
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5.1.10 | Information | |
promptly to furnish to the Mortgagee all such information as it may from time to time require regarding the Ship, her employment, position and engagements, particulars of all towages and salvages, and copies of all charters and other contracts for her employment or otherwise howsoever concerning her; | ||
5.1.11 | Notification of certain events | |
to notify the Mortgagee forthwith by facsimile thereafter confirmed by letter of: |
(a) | any damage to the Ship requiring repairs the cost of which will or might exceed the Casualty Amount; | ||
(b) | any occurrence in consequence of which the Ship has or may become a Total Loss; | ||
(c) | any requisition of the Ship for hire; | ||
(d) | any requirement or recommendation made by any insurer or the Classification Society or by any competent authority which is not, or cannot be, complied with in accordance with its terms; | ||
(e) | any arrest or detention of the Ship or any exercise or purported exercise of a lien or other claim on the Ship or the Earnings or Insurances or any part thereof; | ||
(f) | any petition or notice of meeting to consider any resolution to wind-up the Owner (or any event analogous thereto under the laws of the place of its incorporation); | ||
(g) | the occurrence of any Default; | ||
(h) | the occurrence of any Environmental Claim against the Owner, the Ship, any other Relevant Party or any other Relevant Ship or any incident, event or circumstance which may give rise to any such Environmental Claim; or | ||
(i) | the occurrence of any other matter, event or incident, actual or threatened, the effect of which will or could lead to the ISPS Code not being complied with by the Owner; |
5.1.12 | Payment of outgoings and evidence of payments | |
promptly to pay all tolls, dues and other outgoings whatsoever in respect of the Ship and her Earnings and Insurances and to keep proper books of account in respect of the Ship and her Earnings and, as and when the Mortgagee may so require, to make such books available for inspection on behalf of the Mortgagee, and to furnish satisfactory evidence that the wages and allotments and the insurance and pension contributions of the Master and crew are being promptly and regularly paid and that all deductions from crews wages in respect of any tax liability are being properly accounted for and that the Master has no claim for disbursements other than those incurred by him in the ordinary course of trading on the voyage then in progress; | ||
5.1.13 | Encumbrances | |
not without the prior written consent of the Mortgagee (and then only subject to such conditions as the Mortgagee may impose) to hypothecate, create or purport or agree to create or permit to arise or subsist any Encumbrance (other than Permitted Liens) over or in respect of the Ship, any share or interest therein or in the Insurances, Earnings or Requisition Compensation or any part thereof or interest therein other than to or in favour of the Mortgagee; | ||
5.1.14 | Sale or other disposal | |
not without the prior written consent of the Mortgagee (and then only subject to such terms and conditions as the Mortgagee may impose) to sell, agree to sell, transfer, abandon or otherwise dispose of the Ship or any share or interest therein; |
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5.1.15 | Chartering | |
save under any charter relating to the Ship as disclosed to the Mortgagee by the Owner, not without the prior written consent of the Mortgagee (which the Mortgagee shall have full liberty to withhold) and, if such consent is given, only subject to such conditions as the Mortgagee may impose, to let the Ship: |
(a) | on demise charter for any period; | ||
(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; | ||
(c) | on terms whereby more than two (2) months hire (or the equivalent) is payable in advance; or | ||
(d) | below the market rate prevailing at the time when the Ship is fixed or other than on arms length terms; |
5.1.16 | Sharing of Earnings | |
not without the prior written consent of the Mortgagee (and then only subject to such conditions as the Mortgagee may impose) to enter into any agreement or arrangement whereby the Earnings may be shared with any other person; | ||
5.1.17 | Payment of Earnings | |
to procure that the Earnings are paid to the Operating Account for the Ship at all times unless and until the Mortgagee shall have directed to the contrary pursuant to clause 2.1.1 of the General Assignment and that any Earnings which are so payable and which are in the hands of the Owners brokers or agents are duly accounted for and paid over to the Mortgagee forthwith on demand; | ||
5.1.18 | Repairers liens | |
not without the prior written consent of the Mortgagee to put the Ship into the possession of any person for the purpose of work being done upon her in an amount exceeding or likely to exceed the Casualty Amount unless such person shall first have given to the Mortgagee in terms satisfactory to it, a written undertaking not to exercise any lien on the Ship or her Earnings for the cost of such work or otherwise; | ||
5.1.19 | Manager | |
not without the prior written consent of the Mortgagee to appoint manager of the Ship other than the Manager, or terminate, or amend the terms of, the relevant Management Agreement; | ||
5.1.20 | Compliance with Liberian law | |
to cause this Mortgage to be recorded with the Deputy Commissioner for Maritime Affairs of the Republic of Liberia as prescribed by Chapter 3 of Title 21 of the Liberian Code of Laws Revised as amended and otherwise to comply with and satisfy all the requirements and formalities established by the said Liberian Code of Laws and any other pertinent legislation of the Republic of Liberia to perfect this Mortgage as a valid and enforceable first and preferred lien upon the Ship and to furnish to the Mortgagee from time to time such proofs as the Mortgagee may reasonably request for its satisfaction with respect to the Owners compliance with the provisions of this sub-clause; | ||
5.1.21 | Notice of Mortgage | |
to place and at all times and places use due diligence to retain a properly certified copy of this Mortgage (which shall form part of the ships documents) on board the Ship with her |
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papers and cause such certified copy of this Mortgage to be exhibited to any and all persons having business with the Ship which might create or imply any commitment or encumbrance whatsoever on or in respect of the Ship (other than a lien for crews wages and salvage) and to any representative of the Mortgagee and to place and keep prominently displayed in the chart room and in the Masters cabin of the Ship a framed printed notice in plain type reading as follows: |
This Vessel is covered by a First Preferred Mortgage to CREDIT SUISSE AG (formerly known as CREDIT SUISSE ) of Paradeplatz 8, 8070 Zurich, Switzerland under authority of Title 21 of the Liberian Code of Laws Revised as amended. Under the terms of the said Mortgage neither the Owner nor any charterer nor the Master of this Vessel nor any other person has any right, power or authority to create, incur or permit to be imposed upon this Vessel any commitments or encumbrances whatsoever other than for crews wages and salvage; | ||
5.1.22 | Conveyance on default | |
where the Ship is (or is to be) sold in exercise of any power contained in this Mortgage to execute, forthwith upon request by the Mortgagee, such form of conveyance of the Ship as the Mortgagee may require; | ||
5.1.23 | Anti-drug abuse | |
without prejudice to clause 5.1.9, to take all necessary and proper precautions to prevent any infringements of the Anti-Drug Abuse Act of 1986 of the United States of America or any similar legislation applicable to the Ship in any jurisdiction in or to which the Ship shall be employed or located or trade or which may otherwise be applicable to the Ship and/or the Owner and, if the Mortgagee shall so require, to enter into a Carrier Initiative Agreement with the United States Customs and Border Protection and to procure that such agreement (or any similar agreement hereafter introduced by any Government Entity of the United States of America) is maintained in full force and effect and performed by the Owner; and | ||
5.1.24 | Compliance with environmental laws | |
to comply with, and use all reasonable and proper endeavours to procure that all Environmental Affiliates of the Owner comply with, all Environmental Laws in relation to the Ship including, without limitation, requirements relating to manning, submission of oil spill response plans, designation of qualified individuals and establishing of financial responsibility and to obtain and comply with, and procure that all Environmental Affiliates of the Owner obtain and comply with, all Environmental Approvals in relation to the Ship. | ||
6 | Powers of Mortgagee to protect security and remedy defaults | |
6.1 | Protective action | |
The Mortgagee shall, without prejudice to its other rights, powers and remedies, be entitled (but not bound) at any time, and as often as may be necessary, to take any such action as it may in its discretion think fit for the purpose of protecting or maintaining the security created by this Mortgage and all Expenses attributable thereto shall be payable by the Owner on demand. | ||
6.2 | Remedy of defaults | |
Without prejudice to the generality of the provisions of clause 6.1: |
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6.2.1 | if the Owner fails to comply with any of the provisions of clause 5.1.1 the Mortgagee shall be entitled (but not bound) to effect and thereafter to maintain all such insurances upon the Ship as in its discretion it may think fit in order to procure the compliance with such provisions or alternatively, to require the Ship (at the Owners risk) to remain in, or to proceed to and remain in, a port designated by the Mortgagee until such provisions are fully complied with; | |
6.2.2 | if the Owner fails to comply with any of the provisions of clauses 5.1.3, 5.1.5 or 5.1.6, the Mortgagee shall be entitled (but not bound) to arrange for the carrying out of such repairs, changes or surveys as it may deem expedient or necessary in order to procure the compliance with such provisions; and | |
6.2.3 | if the Owner fails to comply with any of the provisions of clause 5.1.8, the Mortgagee shall be entitled (but not bound) to pay and discharge all such debts, damages, liabilities and outgoings as are therein mentioned and/or to take any such measures as it may deem expedient or necessary for the purpose of securing the release of the Ship in order to procure the compliance with such provisions, | |
and the Expenses attributable to the exercise by the Mortgagee of any such powers shall be payable by the Owner to the Mortgagee on demand. | ||
7 | Powers of Mortgagee on Event of Default | |
7.1 | Powers | |
Upon the happening of any Event of Default, the Mortgagee shall become forthwith entitled to demand in accordance with the provisions of the Corporate Guarantee the payment of the Outstanding Indebtedness immediately whereupon the Outstanding Indebtedness shall become so due and payable and (whether or not the Mortgagee shall have made any such demand) the Mortgagee shall become forthwith entitled as and when it may see fit, to put into force and exercise all or any of the rights, powers and remedies possessed by it as mortgagee of the Ship or otherwise (whether at law, by virtue of this Mortgage or otherwise) and in particular (without limiting the generality of the foregoing): | ||
7.1.1 | to exercise all the rights and remedies in foreclosure and otherwise given to mortgagees by the provisions of Chapter 3 of Title 21 of the Liberian Code of Laws Revised (as amended) and all applicable laws of any other jurisdiction; | |
7.1.2 | to take possession of the Ship; | |
7.1.3 | to require that all policies, contracts, certificates of entry and other records relating to the Insurances (including details of and correspondence concerning outstanding claims) be delivered forthwith to such adjusters and/or brokers and/or other insurers as the Mortgagee may nominate; | |
7.1.4 | to collect, recover, compromise and give a good discharge for, all claims then outstanding or thereafter arising under the Insurances or any of them or in respect of the Ship, her Earnings or Requisition Compensation or any part thereof, and to take over or institute (if necessary using the name of the Owner) all such proceedings in connection therewith as the Mortgagee in its absolute discretion thinks fit, and, in the case of the Insurances, to permit any brokers through whom collection or recovery is effected to charge the usual brokerage therefor; | |
7.1.5 | to discharge, compound, release or compromise claims in respect of the Ship, her Earnings, Insurances or Requisition Compensation or any part thereof which have given or may give rise to any charge or lien or other claim on the Ship, her Earnings, Insurances or Requisition Compensation or any part thereof or which are or may be enforceable by proceedings against the Ship, her Earnings, Insurances or Requisition Compensation or any part thereof; |
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7.1.6 | to sell the Ship or any share or interest therein with or without prior notice to the Owner, and with or without the benefit of any charterparty, and free from any claim by the Owner (whether in admiralty, in equity, at law or by statute) by public auction or private contract, at such place and upon such terms as the Mortgagee in its absolute discretion may determine, with power to postpone any such sale, and without being answerable for any loss occasioned by such sale or resulting from postponement thereof and with power, where the Mortgagee purchases the Ship, to make payment of the sale price by making an equivalent reduction in the amount of the Outstanding Indebtedness in the manner referred to in clause 8.1; | |
7.1.7 | to manage, insure, maintain and repair the Ship, and to employ, sail or lay up the Ship in such manner and for such period as the Mortgagee, in its absolute discretion, deems expedient accounting only for net profits arising from any such employment; and | |
7.1.8 | to recover from the Owner on demand all Expenses incurred or paid by the Mortgagee in connection with the exercise of the powers (or any of them) referred to in this clause 7.1. | |
7.2 | Dealings with Mortgagee | |
Upon any sale of the Ship or any share or interest therein by the Mortgagee pursuant to clause 7.1.6 or pursuant to clause 11.1, the purchaser shall not be bound to see or enquire whether the Mortgagees power of sale has arisen in the manner provided in this Mortgage or whether the Mortgagee has made a demand for payment under the provisions of the Corporate Guarantee and the sale shall be deemed to be within the power of the Mortgagee and the receipt of the Mortgagee for the purchase money shall effectively discharge the purchaser who shall not be concerned with the manner of application of the proceeds of sale or be in any way answerable therefor and the sale shall operate to divest the Owner of all rights, title and interest of any nature whatsoever in the Ship and to bar any such interest of the Owner, and all persons claiming through or under the Owner. | ||
8 | Application of moneys | |
8.1 | Application | |
All moneys received by the Mortgagee in respect of a sale of the Ship or any share or interest therein or in respect of the employment of the Ship pursuant to the provisions of clause 7.1.7 (or otherwise pursuant to the provisions of this Mortgage) and all moneys received and retained by the Mortgagee in respect of the Insurances pursuant to this Mortgage shall be held by it upon trust in the first place to pay or make good the Expenses and the balance shall be applied in the manner specified in clause 2.10 of the Corporate Guarantee. | ||
8.2 | Shortfall | |
In the event that the balance referred to in clause 8.1 is insufficient to pay in full the whole of the Outstanding Indebtedness, the Mortgagee shall be entitled to collect the shortfall from the Owner or any other person liable therefor. | ||
9 | Remedies cumulative and other provisions | |
9.1 | No implied waivers; remedies cumulative | |
No failure or delay on the part of the Mortgagee to exercise any right, power or remedy vested in it under the Corporate Guarantee or this Mortgage shall operate as a waiver thereof, nor shall any single or partial exercise by the Mortgagee of any right, power or remedy nor the discontinuance, abandonment or adverse determination of any proceedings taken by the Mortgagee to enforce any right, power or remedy preclude any other or further exercise thereof or proceedings to enforce the same or the exercise of any other right, power or remedy, nor shall the giving by the Mortgagee of any consent to any act which by the terms of this Mortgage requires such consent prejudice the right of the Mortgagee to give or withhold |
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consent to the doing of any other similar act. The remedies provided in the Corporate Guarantee and this Mortgage are cumulative and are not exclusive of any remedies provided by law. | ||
9.2 | Preferred status | |
Anything herein to the contrary notwithstanding, it is intended that nothing herein shall waive the preferred status of this Mortgage and that, if any provision or portion hereof shall be construed to waive the preferred status of this Mortgage, then such provision or portion to such extent shall be void and of no effect. | ||
9.3 | Delegation | |
The Mortgagee shall be entitled, at any time and as often as may be expedient, to delegate all or any of the powers and discretions vested in it by the Corporate Guarantee or this Mortgage (including the power vested in it by virtue of clause 11) in such manner, upon such terms, and to such persons as the Mortgagee in its absolute discretion may think fit. | ||
9.4 | Incidental powers | |
The Mortgagee shall be entitled to do all acts and things incidental or conducive to the exercise of any of the rights, powers or remedies possessed by it as mortgagee of the Ship (whether at law, under this Mortgage or otherwise) and in particular (but without prejudice to the generality of the foregoing), upon becoming entitled to exercise any of its powers under clause 7.1, the Mortgagee shall be entitled to discharge any cargo on board the Ship (whether the same shall belong to the Owner or any other person) and to enter into such other arrangements respecting the Ship, her insurances, management, maintenance, repair, classification and employment in all respects as if the Mortgagee was the owner of the Ship, but without being responsible for any loss incurred as a result of the Mortgagee doing or omitting to do any such acts or things as aforesaid. | ||
10 | Costs and indemnity | |
10.1 | Costs | |
The Owner shall pay to the Mortgagee on demand on a full indemnity basis all expenses or liabilities of whatsoever nature (including legal fees, fees of insurance advisers, printing, out-of-pocket expenses, stamp duties, registration fees and other duties or charges) together with any value added tax or similar tax payable in respect thereof, incurred by the Mortgagee in connection with the exercise or enforcement of, or preservation of any rights under, the Corporate Guarantee or this Mortgage or otherwise in respect of the Outstanding Indebtedness and the security therefor, or in connection with the preparation, completion, execution or registration of the Corporate Guarantee or this Mortgage. | ||
10.2 | Mortgagees indemnity | |
The Owner hereby agrees and undertakes to indemnify the Mortgagee against all losses, actions, claims, expenses, demands, obligations and liabilities whatever and whenever arising which may now or hereafter be incurred by the Mortgagee or by any manager, agent, officer or employee for whose liability, act or omission the Mortgagee may be answerable in respect of, in relation to, or in connection with anything done or omitted in the exercise or purported exercise of the powers contained in this Mortgage or otherwise in connection with such powers or with this Mortgage or with the Ship, its Earnings, Requisition Compensation and Insurances or otherwise howsoever in relation to, or in connection with, any of the matters dealt with in the Corporate Guarantee or this Mortgage. | ||
11 | Attorney |
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11.1 | Power | |
By way of security, the Owner hereby irrevocably appoints the Mortgagee to be its attorney generally for and in the name and on behalf of the Owner, and as the act and deed or otherwise of the Owner to execute, seal and deliver and otherwise perfect and do all such deeds, assurances, agreements, instruments, acts and things which may be required for the full exercise of all or any of the rights, powers or remedies conferred by the Corporate Guarantee, this Mortgage or any of the other Security Documents, or which may be deemed proper in or in connection with all or any of the purposes aforesaid (including, without prejudice to the generality of the foregoing, the execution and delivery of a bill of sale of the Ship). The power of attorney hereby conferred shall be a general power of attorney and the Owner ratifies and confirms, and agrees to ratify and confirm, any deed, assurance, agreement, instrument, act or thing which the Mortgagee may execute or do pursuant thereto. Provided however that such power shall not be exercisable by or on behalf of the Mortgagee until the happening of an Event of Default. | ||
11.2 | Dealings with attorney | |
The exercise of such power by or on behalf of the Mortgagee shall not put any person dealing with the Mortgagee upon any enquiry as to whether any Event of Default has happened, nor shall such person be in any way affected by notice that no such Event of Default has happened, and the exercise by the Mortgagee of such power shall be conclusive evidence of the Mortgagees right to exercise the same. | ||
11.3 | Filings | |
The Owner hereby irrevocably appoints the Mortgagee to be its attorney in its name and on its behalf and as its act and deed or otherwise of it to agree the form of and to execute and do all deeds, instruments, acts and things in order to file, record, register or enrol this Mortgage in any court, public office or elsewhere which the Mortgagee may in its discretion consider necessary or advisable, now or in the future, to ensure the legality, validity, enforceability or admissibility in evidence thereof. | ||
12 | Further assurance | |
The Owner hereby further undertakes at its own expense from time to time to execute, sign, perfect, do and (if required) register every such further assurance, document, act or thing as in the opinion of the Mortgagee may be necessary or desirable for the purpose of more effectually mortgaging and charging the Ship or perfecting the security constituted or intended to be constituted by this Mortgage or contemplated by the Corporate Guarantee. | ||
13 | Total amount and maturity | |
For the purpose of recording this First Preferred Mortgage as required by Chapter 3 of Title 21 of the Liberian Code of Laws Revised as amended the total amount is One hundred and nine million two hundred thousand Dollars ($109,200,000) (of which Ninety one million Dollars ($91,000,000) represents the maximum principal amount of the Loan that may be outstanding at any one time and Eighteen million two hundred thousand Dollars ($18,200,000) represents maximum amount secured by this Mortgage with respect to the Swap Obligations) and interest on the Loan and performance of mortgage covenants. The date of maturity is 31 October 2015 and the discharge amount is the same as the total amount. | ||
14 | Law, jurisdiction and other provisions | |
14.1 | Law | |
This Mortgage and any non-contractual obligations connected with it are governed by, and shall be construed and enforceable in accordance with, the laws of the Republic of Liberia. |
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14.2 | Submission to jurisdiction | |
For the benefit of the Mortgagee, the Owner irrevocably agrees, that any legal action or proceedings in connection with this Mortgage (including any non-contractual obligations connected with it) may be brought in the English courts, or in the courts of any other country chosen by the Mortgagee, each of which shall have jurisdiction to settle any disputes arising out of, or in connection with, this Mortgage. The Owner irrevocably and unconditionally submits to the jurisdiction of the English courts and the courts of any country chosen by the Mortgagee and irrevocably designates, appoints and empowers Atlas Maritime Service Ltd. at present of Enterprise House, 113-115 George Lane, London E18 1AB, England to receive, for it and on its behalf, service of process issued out of the English courts in any legal action or proceedings arising out of or in connection with this Mortgage (including any non-contractual obligations connected with it). The submission to such jurisdiction shall not (and shall not be construed so as to) limit the right of the Mortgagee to take proceedings against the Owner or the Ship in any other court of competent jurisdiction nor shall the taking of proceedings in any one or more jurisdictions preclude the taking of proceedings in any other jurisdiction, whether concurrently or not. | ||
15 | Other provisions | |
15.1 | Severability | |
If any provision in the Corporate Guarantee, the Loan Agreement, the Master Swap Agreement, this Mortgage or any of the other Security Documents be or becomes invalid or unenforceable under any applicable law the provisions hereof shall in all other respects remain in full force and effect and the provision in question shall be ineffective to the extent (but only to the extent) of its disconformity with the requirement of the applicable law and if it is competent to the parties to waive any requirements which would otherwise operate as aforesaid those requirements are hereby waived to the extent permitted by such law to the end that the Corporate Guarantee, the Loan Agreement, the Master Swap Agreement, this Mortgage and each of the other Security Documents shall be valid, binding and enforceable in accordance with their respective terms. | ||
15.2 | Counterparts | |
This Mortgage may be executed in any number of counterparts each of which shall be an original but such counterparts shall together constitute one and the same instrument. | ||
15.3 | Continuation Mortgage | |
This Mortgage is granted in continuation of the Prior Mortgage within the meaning of Section 101 of Title 21 of the Liberian Code of Laws Revised as amended, and upon recordation of this Mortgage in accordance with the provisions of Title 21 of the Liberian Code of Laws Revised as amended, this Mortgage shall have preferred status as of 28 December 2007, the First Recording Date. | ||
16 | Notices | |
16.1 | Every notice, request, demand or other communication under this Mortgage shall: | |
16.1.1 | be in writing delivered personally or by first-class prepaid letter (airmail if available) or facsimile transmission or other means of telecommunication in permanent written form; | |
16.1.2 | be deemed to have been received in the case of a letter, when delivered personally or three (3) days after it has been put in to the post and, in the case of a facsimile transmission or other means of telecommunication in permanent written form, at the time of despatch (provided that if the date of despatch is not a business day in the country of the addressee or if the time of despatch is after the close of business in the country of the addressee it shall be deemed to have been received at the opening of business on the next such business day); and |
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16.1.3 | be sent: |
(a) | if to the Owner at: | ||
c/o Free Bulkers S.A.
89 Akti Miaouli 185 38 Piraeus Greece |
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Fax no: +30 210 429 1010
Attention: Mr Ion Varouxakis |
(b) | if to the Mortgagee at: | ||
Credit Suisse AG
Paradeplatz 8 8070 Zurich Switzerland |
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Fax: +41 612 667 939
Attention: Mr Gianrichy Giamboi |
or to such other address and/or numbers as is notified by one party to the other party under this Mortgage. |
ADVENTURE SIX S.A.
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By: | /s/ Ioannis Fassolis | |||
Name: | Ioannis Fassolis | |||
Title: | Attorney-in-Fact |
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Special Agent
ADVENTURE EIGHT S.A.
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(1 | ) |
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in favour of
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CREDIT SUISSE AG
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(2 | ) |
(formerly known as CREDIT SUISSE)
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Clause | Page | ||||
1 |
Definitions
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2 | |||
2 |
Grant, conveyance and mortgage
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5 | |||
3 |
Covenants to pay and perform
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6 | |||
4 |
Continuing security and other matters
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6 | |||
5 |
Covenants
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7 | |||
6 |
Powers of Mortgagee to protect security and remedy defaults
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14 | |||
7 |
Powers of Mortgagee on Event of Default
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15 | |||
8 |
Application of moneys
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16 | |||
9 |
Remedies cumulative and other provisions
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16 | |||
10 |
Costs and indemnity
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11 |
Attorney
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17 | |||
12 |
Further assurance
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18 | |||
13 |
Total amount and maturity
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18 | |||
14 |
Law, jurisdiction and other provisions
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15 |
Other provisions
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16 |
Notices
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Schedule 1 The Principal Agreement
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Schedule 2 The Second and Third Supplemental Agreements
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Schedule 3 The Master Swap Agreement
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Schedule 4 The Corporate Guarantee
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Schedule 5 The Prior Mortgage
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(1) | ADVENTURE EIGHT S.A. , a company incorporated under the laws of the Republic of Marshall Islands, whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 and qualified as a Foreign Maritime Entity in the Republic of Liberia (the Owner ) in favour of | |
(2) | CREDIT SUISSE AG (formerly known as CREDIT SUISSE ) of Paradeplatz 8, 8070 Zurich, Switzerland (the Mortgagee ). |
(A) | the Owner is the sole, absolute and unencumbered, legal and beneficial owner of the whole of m.v. Free Jupiter documented under the laws and flag of the Republic of Liberia, Official Number 14521 of 27,176 gross tons and 15,533 net tons; | |
(B) | by a facility agreement dated 24 December 2007 (the Original Agreement ) and made between (i) FreeSeas Inc. (therein and herein referred to as the Borrower ) as borrower and (ii) the Mortgagee as lender (therein referred to as the Bank ) as amended and restated by a supplemental agreement dated 26 June 2008 made between (inter alios) the Borrower, the Owner and the Mortgagee (the First Supplemental Agreement and, together with the Original Agreement the Principal Agreement ) (an executed copy of which Principal Agreement without its schedules is annexed hereto as schedule 1 and forms an integral part hereof) and as further amended and supplemented by a supplemental agreement dated 23 March 2009 made between (inter alios) the Borrower, the Owner and the Mortgagee (the Second Supplemental Agreement ) and a supplemental agreement dated 27 November 2009 (the Third Supplemental Agreement and together with the Principal Agreement and the Second Supplemental Agreement, the Loan Agreement ) (an executed copy of which Second Supplemental Agreement and a copy of the form of which Third Supplemental Agreement without their schedules are annexed hereto as schedule 2 and forms an integral part hereof), the Mortgagee agreed (inter alia) to make available to the Borrower, upon the terms and conditions therein contained, a reducing revolving credit facility of up to Ninety one million Dollars ($91,000,000); | |
(C) | by a 2002 ISDA master swap agreement dated as of 24 December 2007 (the Master Swap Agreement ) and made between the Borrower and the Mortgagee (a copy of the form of which Master Swap Agreement with its Schedule is annexed hereto as schedule 3 and forms an integral part hereof), the Mortgagee agreed the terms and conditions upon which it would enter into (inter alia) derivative transactions with the Borrower, whether in respect of the Loan (whether in whole or in part, as the case may be, from time to time) or for any other purpose whatsoever. The Owner has agreed pursuant to this Mortgage to secure the debts and obligations arising or that may arise in favour of the Mortgagee under the Master Swap Agreement and the Owner and the Mortgagee agree for the purpose of this Mortgage that the maximum amount of such obligations to be secured by this Mortgage shall be Eighteen million two hundred thousand Dollars ($18,200,000) (the Swap Obligations ); | |
(D) | pursuant to the said Loan Agreement, the Mortgagee as of the date hereof has advanced or has agreed to advance to the Borrower (and the Borrower is indebted to the Mortgagee in) a total principal amount of up to Ninety one million Dollars ($91,000,000) which (together with interest (as provided in clause 3.1 of the said Loan Agreement) thereon and fees) is to be repaid and paid, as the case may be, as provided in the Loan Agreement; | |
(E) | by a corporate guarantee (the Corporate Guarantee ) dated 14 April 2008 and executed by the Owner (therein referred to as the Guarantor ) in favour of the Mortgagee (a copy of the form of which Corporate Guarantee is annexed hereto as schedule 4 and forms an integral part hereof), the Owner (inter alia) guaranteed the payment of any moneys owing by the Borrower to the Mortgagee under the Loan Agreement, the Master Swap Agreement and the other Security Documents; |
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(F) | prior to the date hereof, the Ship was registered in the Marshall Islands (the Prior Registry ) in the ownership of the Owner with Official No. 2506 , I.M.O. No. 9264037 and with International Call Sign V7JE7 and the Owners obligation to repay the Outstanding Indebtedness was secured by, among other instruments, a first preferred Marshall Islands ship mortgage dated 14 April 2008 made by the Owner in favour of the Mortgagee and recorded on 14 April 2008 (the First Recording Date ) with the Office of the Maritime Administrator of the Marshall Islands (Book PM 19 at Page 279), as amended by an amendment No. 1 dated 4 July 2008 made by the Owner in favour of the Mortgagee and recorded on 4 July 2008 with the Office of the Maritime Administrator of the Marshall Islands (Book PM 19 at Page 528) and an amendment No. 2 dated 2 April 2009 made by the Owner in favour of the Mortgagee and recorded on 2 April 2009 with the Office of the Maritime Administrator of the Marshall Islands (Book PM 20 at Page 217) (together the Prior Mortgage ). A copy of the Prior Mortgage, together with a copy of a Certificate of Ownership and Encumbrance issued by the Registrar of Marshall Islands Ships on 2 April 2009 are annexed hereto as schedule 5; | |
(G) | pursuant to the Third Supplemental Agreement, the Mortgagee consented to the deletion of the Ship from the Marshall Islands registry and the registration of the Ship under the laws and flag of Liberia on condition that, inter alia, the Owner executes and records this Mortgage on the Ship for the purpose of securing the repayment of the said principal amount and interest thereon, costs, expenses of collection and all other sums of money from time to time owing to the Mortgagee under the said Corporate Guarantee and the performance and observance of and compliance with all of the covenants, terms and conditions in this Mortgage, the Corporate Guarantee, the Loan Agreement, the Master Swap Agreement, the Prior Mortgage and the other Security Documents, in continuation of the Prior Mortgage, and with preferred status as of the First Recording Date as provided under Section 101 of Title 21 of the Liberian Code of Laws Revised as amended; and | |
(H) | this Mortgage is the Mortgage in respect of the Ship referred to in the Loan Agreement. |
1 | Definitions | |
1.1 | Defined expressions | |
Words and expressions defined in the Loan Agreement and/or the Corporate Guarantee shall, unless the context otherwise requires or unless otherwise defined herein, have the same meanings when used in this Mortgage. |
1.2 | Definitions | |
In this Mortgage unless the context otherwise requires: | ||
Approved Brokers means such firm or firms of insurance brokers, appointed by the Owner, as may from time to time be approved in writing by the Mortgagee for the purposes of this Mortgage; | ||
Casualty Amount means Two hundred and fifty thousand Dollars ($250,000) (or the equivalent in any other currency); | ||
Collateral Instruments means notes, bills of exchange, certificates of deposit and other negotiable and non-negotiable instruments, guarantees, indemnities and other assurances against financial loss and any other documents or instruments which contain or evidence an obligation (with or without security) to pay, discharge or be responsible directly or indirectly for, any indebtedness or liabilities of the Owner or any other person liable and includes any documents or instruments creating or evidencing a mortgage, charge (whether fixed or floating), pledge, lien, hypothecation, assignment, trust arrangement or security interest of any kind; |
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Earnings means all moneys whatsoever from time to time due or payable to the Owner during the Security Period arising out of the use or operation of the Ship including (but without limiting the generality of the foregoing) all freight, hire and passage moneys, income arising under pooling arrangements, compensation payable to the Owner in the event of requisition of the Ship for hire, remuneration for salvage and towage services, demurrage and detention moneys, and damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of the Ship; | ||
Event of Default means any of the events or circumstances described in clause 10.1 of the Loan Agreement; | ||
Expenses means the aggregate at any relevant time (to the extent that the same have not been received or recovered by the Mortgagee) of: |
(a) | all losses, liabilities, costs, charges, expenses, damages and outgoings of whatever nature, (including, without limitation, Taxes, repair costs, registration fees and insurance premiums) suffered, incurred or paid by the Mortgagee in connection with the exercise of the powers referred to in or granted by the Corporate Guarantee, the Loan Agreement, the Master Swap Agreement, this Mortgage, the General Assignment or any other of the Security Documents or otherwise payable by the Owner in accordance with clause 10 of this Mortgage or clause 8 of the General Assignment; and | ||
(b) | interest on all such losses, liabilities, costs, charges, expenses, damages and outgoings from the date on which the same were suffered, incurred or paid by the Mortgagee until the date of receipt or recovery thereof (whether before or after judgement) at a rate per annum calculated in accordance with clause 2.5 of the Corporate Guarantee (as conclusively certified by the Mortgagee); |
General Assignment means a deed of assignment dated 28 December 2007 as amended by a supplemental agreement dated 27 November 2009 made between the Owner and the Mortgagee whereby the Owner has assigned to the Mortgagee the Insurances, any Requisition Compensation and the Earnings of the Ship; | ||
Guaranteed Liabilities shall have the meaning ascribed thereto in the Corporate Guarantee; | ||
Insurances means all policies and contracts of insurance (which expression includes all entries of the Ship in a protection and indemnity or war risks association) which are from time to time during the Security Period in place or taken out or entered into by or for the benefit of the Owner (whether in the sole name of the Owner, or in the joint names of the Owner and the Mortgagee or otherwise) in respect of the Ship and her Earnings or otherwise howsoever in connection with the Ship and all benefits thereof (including claims of whatsoever nature and returns of premia); | ||
Loan means the total principal amount of up to Ninety one million Dollars ($91,000,000) referred to in recital (B) hereto advanced by the Mortgagee to the Borrower pursuant to the Loan Agreement or (as the context may require) the amount thereof at any time advanced and outstanding; | ||
Loan Agreement means, together, the agreement dated 24 December 2007 as amended and restated by the First Supplemental Agreement, as further amended by the Second Supplemental Agreement and the Third Supplemental Agreement, each mentioned in recital (B) hereto and as may be further amended and supplemented from time to time; | ||
Loss Payable Clauses means the provisions regulating the manner of payment of sums receivable under the Insurances which are to be incorporated in the relevant insurance documents, such provisions to be in the forms set out in schedule 1 to the General Assignment or in such other form as may from time to time be required or agreed in writing by the Mortgagee; |
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Master Swap Agreement means the 2002 ISDA Master Agreement dated as of 24 December 2007 made between the Mortgagee and the Borrower mentioned in recital (C) hereto, comprising an ISDA Master Agreement (and a Schedule thereto), together with any Confirmations (as defined therein) supplemental thereto; | ||
Master Swap Agreement Liabilities means, at any relevant time, all liabilities, actual or contingent, present or future, owing by the Borrower to the Mortgagee under the Master Swap Agreement; | ||
Mortgagee includes the successors in title and the Assignees and/or Transferees of the Mortgagee; | ||
Notice of Assignment of Insurances means a notice of assignment in the form set out in schedule 2 to the General Assignment or in such other form as may from time to time be required or agreed in writing by the Mortgagee; | ||
Outstanding Indebtedness means the aggregate of the Guaranteed Liabilities and interest accrued and accruing thereon, the Master Swap Agreement Liabilities up to the maximum amount of Eighteen million two hundred thousand Dollars ($18,200,000), the Expenses and all other sums of money from time to time owing to the Mortgagee whether actually or contingently, under the Corporate Guarantee, the Loan Agreement, the Master Swap Agreement and the other Security Documents or any of them; | ||
Owner includes the successors in title of the Owner; | ||
Requisition Compensation means all moneys or other compensation from time to time payable during the Security Period by reason of the Compulsory Acquisition of the Ship; | ||
Security Documents means the Corporate Guarantee, the Loan Agreement, the Master Swap Agreement, this Mortgage, the General Assignment and any other such document as is defined in the Loan Agreement as a Security Document or as may have been or may hereafter be executed to guarantee and/or secure all or any part of the Guaranteed Liabilities, the Master Swap Agreement Liabilities, the Loan, interest thereon and other moneys from time to time owing by the Owner and/or any other Security Party pursuant to the Corporate Guarantee and/or any other Security Document (whether or not any such document also secures moneys from time to time owing pursuant to any other document or agreement); | ||
Security Period means the period commencing on the date hereof and terminating upon discharge of the security created by the Security Documents by payment of all moneys payable thereunder; | ||
Ship means the vessel described in Recital (A) hereto and includes any interest therein and her engines, machinery, boats, tackle, outfit, equipment, spare gear, fuel, consumable or other stores, belongings and appurtenances whether on board or ashore and whether now owned or hereafter acquired and also any and all additions, improvements and replacements hereafter made in or to such vessel or any part thereof or in or to her equipment and appurtenances aforesaid; | ||
Total Loss means: |
(a) | the actual, constructive, compromised or arranged total loss of the Ship; or | ||
(b) | the Compulsory Acquisition of the Ship; or | ||
(c) | the hijacking, theft, condemnation, capture, seizure, arrest, detention or confiscation of the Ship (other than where the same amounts to the Compulsory Acquisition of the Ship) by any Government Entity or by persons acting or purporting to act on behalf of any Government Entity unless the Ship be released and restored to the Owner from such hijacking, theft, condemnation, capture, seizure, arrest, detention or confiscation within thirty (30) days after the occurrence thereof. |
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1.3 | Insurance terms | |
In clause 5.1.1: |
1.3.1 | excess risks means the proportion (if any) of claims for general average, salvage and salvage charges and under the ordinary collision clause not recoverable in consequence of the value at which a vessel is assessed for the purpose of such claims exceeding her insured value; | |
1.3.2 | protection and indemnity risks means the usual risks (including oil pollution and freight, demurrage and defence cover) covered by a protection and indemnity association which is a member of the International Group of P&I Clubs (including, without limitation, the proportion (if any) of any sums payable to any other person or persons in case of collision which are not recoverable under the hull and machinery policies by reason of the incorporation therein of Clause 8 of the Institute Time Clauses (Hulls) (1/11/95) or the Institute Amended Running Down Clause (1/10/71) or any equivalent provision; and | |
1.3.3 | war risks includes those risks covered by the standard form of English marine policy with Institute War and Strikes Clauses Hulls-Time (1/11/95) attached or similar cover. | |
1.4 | Headings | |
Clause headings and the table of contents are inserted for convenience of reference only and shall be ignored in the interpretation of this Mortgage. | ||
1.5 | Construction of certain terms | |
In this Mortgage, unless the context otherwise requires: | ||
1.5.1 | references to clauses and schedules are to be construed as references to clauses of, and schedules to, this Mortgage and references to this Mortgage include its schedules; | |
1.5.2 | references to (or to any specified provision of) this Mortgage or any other documents shall be construed as references to this Mortgage, that provision or that document as in force for the time being and as amended in accordance with the terms thereof or, as the case may be, with the agreement of the relevant parties; | |
1.5.3 | words importing the plural shall include the singular and vice versa; | |
1.5.4 | references to a person shall be construed as references to an individual, firm, company, corporation, unincorporated body of persons or any Government Entity; | |
1.5.5 | references to a guarantee include references to an indemnity or other assurance against financial loss 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; and | |
1.5.6 | references to statutory provisions shall be construed as references to those provisions as replaced or amended or re-enacted from time to time. |
2 | Grant, conveyance and mortgage | |
For good and valuable consideration (receipt of which is hereby acknowledged by the Owner) and, pursuant to the Corporate Guarantee and in order to secure the repayment of the Outstanding Indebtedness and to secure the performance and observance of and compliance with the covenants, terms and conditions contained in this Mortgage, the Corporate Guarantee, the Loan Agreement and the Master Swap Agreement, express or implied, the Owner has granted, conveyed and mortgaged and does by these presents grant, convey and mortgage unto the Mortgagee, the whole of the Ship TO HAVE AND TO HOLD the same unto the Mortgagee forever, upon the terms herein set forth, for the enforcement of the payment of |
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the Outstanding Indebtedness and to secure the performance and observance of and compliance with the covenants, terms and conditions contained in this Mortgage, the Corporate Guarantee, the Loan Agreement and the Master Swap Agreement, express or implied. | ||
PROVIDED ONLY, and the condition of these presents is such that, if the Owner shall pay or cause to be repaid to the Mortgagee, the Outstanding Indebtedness as and when the same shall become due and payable in accordance with the terms of the Corporate Guarantee and this Mortgage and shall observe and comply with the covenants, terms and conditions contained in the Corporate Guarantee and this Mortgage, expressed or implied, to be performed, observed or complied with, by and on the part of the Owner, then these presents and the rights hereunder shall cease, determine and be void, otherwise to be and remain in full force and effect. | ||
IT IS NOT INTENDED that this Mortgage shall cover, and this Mortgage shall not cover, property other than the Ship as the term Vessel is used in Sub-division 1 of Section 106 of Chapter 3 of Title 21 of the Liberian Code of Laws Revised (as amended). | ||
3 | Covenants to pay and perform | |
3.1 | For the consideration aforesaid the Owner hereby covenants with the Mortgagee as follows: | |
3.1.1 | the Owner will pay to the Mortgagee any sums payable by the Owner pursuant to the Corporate Guarantee at the times and in the manner specified in the Corporate Guarantee; | |
3.1.2 | the Owner will pay to the Mortgagee interest on any such sums and overdue interest or other moneys payable under the Corporate Guarantee at the rates, at the times and in the manner specified in the Corporate Guarantee; | |
3.1.3 | the Owner will pay all other moneys comprising the Outstanding Indebtedness as and when the same shall become due and payable in accordance with the terms of the Corporate Guarantee and this Mortgage; | |
3.1.4 | the Owner will pay interest at a rate per annum calculated in accordance with clause 2.5 of the Corporate Guarantee (as conclusively certified by the Mortgagee) on any moneys which are by this Mortgage expressed to be payable on demand and which are not paid forthwith on demand being made as from the date of demand until payment (both before and after any judgment) provided however that this provision shall not affect the right of the Mortgagee to receive that part of its Expenses as comprises interest from such date prior to demand being made as is referred to in the definition of Expenses; and | |
3.1.5 | the Owner will keep, perform and observe the covenants and provisions of the Corporate Guarantee. | |
4 | Continuing security and other matters | |
4.1 | Continuing security | |
The security created by this Mortgage shall: | ||
4.1.1 | be held by the Mortgagee as a continuing security for the payment of the Outstanding Indebtedness and the performance and observance of and compliance with all of the covenants, terms and conditions contained in the Corporate Guarantee, the Loan Agreement, the Master Swap Agreement or this Mortgage, express or implied, and the security so created shall not be satisfied by any intermediate payment or satisfaction of any part of the amount hereby and thereby secured (or by any settlement of accounts between the Owner or any other person who may be liable to the Mortgagee in respect of the Outstanding Indebtedness or any part thereof and the Mortgagee; |
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4.1.2 | be in addition to, and shall not in any way prejudice or affect, and may be enforced by the Mortgagee without prior recourse to, the security created by any other of the Security Documents or by any present or future Collateral Instruments, right or remedy held by or available to the Mortgagee or any right or remedy of the Mortgagee thereunder; and | |
4.1.3 | not be in any way prejudiced or affected by the existence of any of the other Security Documents or any such Collateral Instrument, rights or remedies or by the same becoming wholly or in part void, voidable or unenforceable on any ground whatsoever or by the Mortgagee dealing with, exchanging, varying or failing to perfect or enforce any of the same, or giving time for payment or performance or indulgence or compounding with any other person liable. | |
4.2 | Rights additional | |
All the rights, powers and remedies vested in the Mortgagee hereunder shall be in addition to and not a limitation of any and every other right, power or remedy vested in the Mortgagee under the Corporate Guarantee, the Loan Agreement, the Master Swap Agreement, this Mortgage, the other Security Documents or any Collateral Instrument or at law and all the rights, powers and remedies so vested in the Mortgagee may be exercised from time to time and as often as the Mortgagee may deem expedient. | ||
4.3 | No enquiry | |
The Mortgagee shall not be obliged to make any enquiry as to the nature or sufficiency of any payment received by it under this Mortgage or to make any claim or take any action to collect any moneys or to enforce any rights or benefits to which the Mortgagee may at any time be entitled under this Mortgage. | ||
4.4 | Waiver of rights | |
The Owner hereby waives any rights under the provisions of the laws of a given country which require the Mortgagee to levy execution against the Owner or make any demand or claim against the Owner prior to the enforcement of rights under this Mortgage. | ||
5 | Covenants | |
5.1 | The Owner further covenants with the Mortgagee and undertakes throughout the Security Period: | |
5.1.1 | Insurance |
(a) | Insured risks, amounts and terms | ||
to insure and keep the Ship insured free of cost and expense to the Mortgagee and in the sole name of the Owner or, if so required by the Mortgagee, in the joint names of the Owner and the Mortgagee (but without liability on the part of the Mortgagee for premiums or calls and to procure that no other assured shall be additionally named without the prior written consent of the Mortgagee): |
(i) | against fire and usual marine risks (including excess risks) and war risks, on an agreed value basis, in such amounts (but not in any event less than whichever shall be the greater of (A) the market value of the Ship for the time being (as determined by the Mortgagee pursuant to clause 8.2 of the Loan Agreement) and (B) of an amount which, when aggregated with the equivalent insurance for all other Mortgaged Ships, shall be equal to at least one hundred and twenty per cent (120%) of (1) the Loan and (2) the Swap Exposure) and upon such terms as shall from time to time be approved in writing by the Mortgagee; | ||
(ii) | against protection and indemnity risks (including pollution risks for the highest amount in respect of which cover is or may become available for ships of the |
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same type, size, age and flag as the Ship) for the full value and tonnage of the Ship (as approved in writing by the Mortgagee) and upon such terms as shall from time to time be approved in writing by the Mortgagee; and | |||
(iii) | in respect of such other matters of whatsoever nature and howsoever arising in respect of which insurance would be maintained by a prudent owner of the Ship, |
and to pay to the Mortgagee the cost (as conclusively certified by the Mortgagee) of (aa) any mortgagees interest insurance ( MII ) (including, if the Mortgagee shall so require, mortgagees additional perils (including all P&I risks) coverage ( MAP )) which the Mortgagee may from time to time effect in respect of the Ship upon such terms and in such amounts (not exceeding one hundred and ten per cent (110%) (in respect of MII) and one hundred and ten per cent (110%) (in respect of MAP), in each case, of (1) the Loan and (2) the Swap Exposure) as it shall deem desirable; and (bb) any other insurance cover which the Mortgagee may from time to time effect in respect of the Ship and/or in respect of its interest and potential third party liability as mortgagee of the Ship as the Mortgagee shall deem desirable having regard to any limitations in respect of amount or extent of cover which may from time to time be applicable to any of the other insurances referred to in this clause 5.1.1(a); | |||
(b) | Approved brokers, insurers and associations | ||
to effect the insurances aforesaid in such currency as the Mortgagee may approve and through the Approved Brokers (other than the said mortgagee interest insurance which shall be effected through brokers appointed by the Mortgagee) and with such insurance companies and/or underwriters having a Standard & Poor rating of at least BBB or a comparable rating of another comparable rating agency as shall from time to time be approved in writing by the Mortgagee; provided however that the insurances against war risks and protection and indemnity risks may be effected by the entry of the Ship with such war risks and protection and indemnity associations as shall from time to time be approved in writing by the Mortgagee; | |||
(c) | Fleet liens, set-off and cancellation | ||
if any of the insurances referred to in clause 5.1.1(a) form part of a fleet cover, to procure that the Approved Brokers shall undertake to the Mortgagee that they shall neither set off against any claims in respect of the Ship any premiums due in respect of other vessels under such fleet cover or any premiums due for other insurances, nor cancel the insurance for reason of non-payment of premiums for other vessels under such fleet cover or of premiums for such other insurances, and shall undertake to issue a separate policy in respect of the Ship if and when so requested by the Mortgagee; | |||
(d) | Payment of premiums and calls | ||
punctually to pay all premiums, calls, contributions or other sums payable in respect of all such insurances and to produce all relevant receipts or other evidence of payment when so required by the Mortgagee; | |||
(e) | Renewal | ||
at least fourteen (14) days before the relevant policies, contracts or entries expire, to notify the Mortgagee of the names of the brokers and/or the war risks and protection and indemnity associations proposed to be employed by the Owner or any other party for the purposes of the renewal of such insurances and of the amounts in which such insurances are proposed to be renewed and the risks to be covered and, subject to compliance with any requirements of the Mortgagee pursuant to this clause 5.1.1, to procure that appropriate instructions for the renewal of such Insurances on the terms so specified are given to the Approved Brokers and/or to the approved war risks and |
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protection and indemnity associations at least ten (10) days before the relevant policies, contracts or entries expire, and that the Approved Brokers and/or the approved war risks and protection and indemnity associations will at least seven (7) days before such expiry (or within such shorter period as the Mortgagee may from time to time agree) confirm in writing to the Mortgagee as and when such renewals have been effected in accordance with the instructions so given; | |||
(f) | Guarantees | ||
to arrange for the execution and delivery of such guarantees or indemnities as may from time to time be required by any protection and indemnity or war risks association; | |||
(g) | Hull policy documents, notices, loss payable clauses and brokers undertakings | ||
to deposit with the Approved Brokers (or procure the deposit of) all slips, cover notes, policies, certificates of entry or other instruments of insurance from time to time issued in connection with such of the insurances referred to in clause 5.1.1(a) as are effected through the Approved Brokers and procure that the interest of the Mortgagee shall be endorsed thereon by incorporation of the relevant Loss Payable Clause and, where the Insurances have been assigned to the Mortgagee, by means of a Notice of Assignment of Insurances (signed by the Owner and by any other assured who shall have assigned its interest in the Insurances to the Mortgagee) and that the Mortgagee shall be furnished with pro forma copies thereof and a letter or letters of undertaking from the Approved Brokers in such form as shall from time to time be required by the Mortgagee; | |||
(h) | Associations loss payable clauses, undertakings and certificates | ||
to procure that any protection and indemnity and/or war risks associations in which the Ship is for the time being entered shall endorse the relevant Loss Payable Clause on the relevant certificate of entry or policy and shall furnish the Mortgagee with a copy of such certificate of entry or policy and a letter or letters of undertaking in such form as may from time to time be required by the Mortgagee; | |||
(i) | Extent of cover and exclusions | ||
to take all necessary action and comply with all requirements which may from time to time be applicable to the Insurances (including, without limitation, the making of all requisite declarations within any prescribed time limits and the payment of any additional premiums or calls) so as to ensure that the Insurances are not made subject to any exclusions or qualifications to which the Mortgagee has not given its prior written consent and are otherwise maintained on terms and conditions from time to time approved in writing by the Mortgagee; | |||
(j) | Correspondence with brokers and associations | ||
to provide to the Mortgagee, at the time of each such communication, copies of all written communications between the Owner and the Approved Brokers and approved war risks and protection and indemnity associations which relate to compliance with requirements from time to time applicable to the Insurances including, without limitation, all requisite declarations and payments of additional premiums or calls referred to in clause 5.1.1(i); | |||
(k) | Independent report | ||
if so requested by the Mortgagee, but at the cost of the Owner, to furnish the Mortgagee from time to time with a detailed report signed by an independent firm of marine insurance brokers appointed by the Mortgagee dealing with the insurances maintained on the Ship and stating the opinion of such firm as to the adequacy thereof; |
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(l) | Collection of claims | ||
to do all things necessary and provide all documents, evidence and information to enable the Mortgagee to collect or recover any moneys which shall at any time become due in respect of the Insurances; | |||
(m) | Employment of Ship | ||
not to employ the Ship or suffer the Ship to be employed otherwise than in conformity with the terms of the Insurances (including any warranties express or implied therein) without first obtaining the consent of the insurers to such employment and complying with such requirements as to extra premium or otherwise as the insurers may prescribe; and | |||
(n) | Application of recoveries | ||
to apply all sums receivable under the Insurances which are paid to the Owner in accordance with the Loss Payable Clauses in repairing all damage and/or in discharging the liability in respect of which such sums shall have been received; |
5.1.2 | Ships name and registration | |
not to change the name of the Ship and to register the Ship as a Liberian ship and not to do or suffer to be done anything, or omit to do anything the doing or omission of which could or might result in such registration being forfeited or imperilled or which could or might result in the Ship being required to be registered under any flag other than the Liberian flag and not to register the Ship or permit its registration under any other flag without the prior written consent of the Mortgagee; | ||
5.1.3 | Repair | |
to keep the Ship in a good and efficient state of repair and to procure that all repairs to or replacement of any damaged, worn or lost parts or equipment are effected in such manner (both as regards workmanship and quality of materials) as not to diminish the value of the Ship; | ||
5.1.4 | Modification; removal of parts; equipment owned by third parties | |
not without the prior written consent of the Mortgagee to or suffer any other person to: |
(a) | make any modification to the Ship in consequence of which her structure, type or performance characteristics could or might be materially altered or her value materially reduced; or | ||
(b) | remove any material part of the Ship or any equipment the value of which is such that its removal from the Ship would materially reduce the value of the Ship without replacing the same with equivalent parts or equipment which are owned by the Owner free from Encumbrances; or | ||
(c) | install on the Ship any equipment owned by a third party which cannot be removed without causing damage to the structure or fabric of the Ship; |
5.1.5 | Maintenance of class; compliance with regulations | |
to maintain the Classification as the class of the Ship and to comply with and ensure that the Ship at all times complies with the provisions of all laws, regulations and requirements (statutory or otherwise) from time to time applicable to vessels registered under the laws and flag of the Republic of Liberia or otherwise applicable to the Ship and to procure that the Classification Society shall make available to the Mortgagee upon its request such |
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information and documents in respect of the Ship as are maintained in the records of the Classification Society; | ||
5.1.6 | Surveys | |
to submit the Ship to continuous surveys and such periodical or other surveys as may be required for classification purposes and if so required to supply to the Mortgagee copies of all survey reports issued in respect thereof; | ||
5.1.7 | Inspection | |
to ensure that the Mortgagee, by surveyors or other persons appointed by it (at the expense of the Owner) for such purpose, may board the Ship at all reasonable times for the purpose of inspecting her and her records and to afford all proper facilities for such inspections and for this purpose to give the Mortgagee reasonable advance notice of any intended drydocking of the Ship (whether for the purpose of classification, survey or otherwise) Provided that if no Event of Default has occurred the Owner shall only bear the cost of no more than one (1) such inspection in every two (2) calendar years; | ||
5.1.8 | Prevention of and release from arrest | |
promptly to pay and discharge all debts, damages, liabilities and outgoings whatsoever which have given or may give rise to maritime, statutory or possessory liens on, or claims enforceable against, the Ship, her Earnings or Insurances or any part thereof and, in the event of a writ or libel being filed against the Ship, her Earnings or Insurances or any part thereof, or of any of the same being arrested, attached or levied upon pursuant to legal process or purported legal process or in the event of detention of the Ship in exercise or purported exercise of any such lien or claim as aforesaid, to procure the release of the Ship, her Earnings and Insurances from such arrest, detention, attachment or levy or, as the case may be, the discharge of the writ or libel forthwith upon receiving notice thereof by providing bail or procuring the provision of security or otherwise as the circumstances may require; | ||
5.1.9 | Employment | |
not to employ the Ship or permit her employment in any manner, trade or business which is forbidden by Liberian law or international law, or which is otherwise unlawful or illicit under the law of any relevant jurisdiction, or in carrying illicit or prohibited goods, or in any manner whatsoever which may render her liable to condemnation in a prize court, or to destruction, seizure, confiscation, penalty or sanctions and, in the event of hostilities in any part of the world (whether war be declared or not), not to employ the Ship or permit her employment in carrying any contraband goods, or to enter or trade to or to continue to trade in any zone which has been declared a war zone by any Government Entity or by the Ships war risks insurers unless the prior written consent of the Mortgagee is obtained and such special insurance cover as the Mortgagee may require shall have been effected by the Owner and at its expense; | ||
5.1.10 | Information | |
promptly to furnish to the Mortgagee all such information as it may from time to time require regarding the Ship, her employment, position and engagements, particulars of all towages and salvages, and copies of all charters and other contracts for her employment or otherwise howsoever concerning her; | ||
5.1.11 | Notification of certain events | |
to notify the Mortgagee forthwith by facsimile thereafter confirmed by letter of: |
(a) | any damage to the Ship requiring repairs the cost of which will or might exceed the Casualty Amount; |
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(b) | any occurrence in consequence of which the Ship has or may become a Total Loss; | ||
(c) | any requisition of the Ship for hire; | ||
(d) | any requirement or recommendation made by any insurer or the Classification Society or by any competent authority which is not, or cannot be, complied with in accordance with its terms; | ||
(e) | any arrest or detention of the Ship or any exercise or purported exercise of a lien or other claim on the Ship or the Earnings or Insurances or any part thereof; | ||
(f) | any petition or notice of meeting to consider any resolution to wind-up the Owner (or any event analogous thereto under the laws of the place of its incorporation); | ||
(g) | the occurrence of any Default; | ||
(h) | the occurrence of any Environmental Claim against the Owner, the Ship, any other Relevant Party or any other Relevant Ship or any incident, event or circumstance which may give rise to any such Environmental Claim; or | ||
(i) | the occurrence of any other matter, event or incident, actual or threatened, the effect of which will or could lead to the ISPS Code not being complied with by the Owner; |
5.1.12 | Payment of outgoings and evidence of payments | |
promptly to pay all tolls, dues and other outgoings whatsoever in respect of the Ship and her Earnings and Insurances and to keep proper books of account in respect of the Ship and her Earnings and, as and when the Mortgagee may so require, to make such books available for inspection on behalf of the Mortgagee, and to furnish satisfactory evidence that the wages and allotments and the insurance and pension contributions of the Master and crew are being promptly and regularly paid and that all deductions from crews wages in respect of any tax liability are being properly accounted for and that the Master has no claim for disbursements other than those incurred by him in the ordinary course of trading on the voyage then in progress; | ||
5.1.13 | Encumbrances | |
not without the prior written consent of the Mortgagee (and then only subject to such conditions as the Mortgagee may impose) to hypothecate, create or purport or agree to create or permit to arise or subsist any Encumbrance (other than Permitted Liens) over or in respect of the Ship, any share or interest therein or in the Insurances, Earnings or Requisition Compensation or any part thereof or interest therein other than to or in favour of the Mortgagee; | ||
5.1.14 | Sale or other disposal | |
not without the prior written consent of the Mortgagee (and then only subject to such terms and conditions as the Mortgagee may impose) to sell, agree to sell, transfer, abandon or otherwise dispose of the Ship or any share or interest therein; | ||
5.1.15 | Chartering | |
save under any charter relating to the Ship as disclosed to the Mortgagee by the Owner, not without the prior written consent of the Mortgagee (which the Mortgagee shall have full liberty to withhold) and, if such consent is given, only subject to such conditions as the Mortgagee may impose, to let the Ship: |
(a) | on demise charter for any period; | ||
(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; |
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(c) | on terms whereby more than two (2) months hire (or the equivalent) is payable in advance; or | ||
(d) | below the market rate prevailing at the time when the Ship is fixed or other than on arms length terms; |
5.1.16 | Sharing of Earnings | |
not without the prior written consent of the Mortgagee (and then only subject to such conditions as the Mortgagee may impose) to enter into any agreement or arrangement whereby the Earnings may be shared with any other person; | ||
5.1.17 | Payment of Earnings | |
to procure that the Earnings are paid to the Operating Account for the Ship at all times unless and until the Mortgagee shall have directed to the contrary pursuant to clause 2.1.1 of the General Assignment and that any Earnings which are so payable and which are in the hands of the Owners brokers or agents are duly accounted for and paid over to the Mortgagee forthwith on demand; | ||
5.1.18 | Repairers liens | |
not without the prior written consent of the Mortgagee to put the Ship into the possession of any person for the purpose of work being done upon her in an amount exceeding or likely to exceed the Casualty Amount unless such person shall first have given to the Mortgagee in terms satisfactory to it, a written undertaking not to exercise any lien on the Ship or her Earnings for the cost of such work or otherwise; | ||
5.1.19 | Manager | |
not without the prior written consent of the Mortgagee to appoint manager of the Ship other than the Manager, or terminate, or amend the terms of, the relevant Management Agreement; | ||
5.1.20 | Compliance with Liberian law | |
to cause this Mortgage to be recorded with the Deputy Commissioner for Maritime Affairs of the Republic of Liberia as prescribed by Chapter 3 of Title 21 of the Liberian Code of Laws Revised as amended and otherwise to comply with and satisfy all the requirements and formalities established by the said Liberian Code of Laws and any other pertinent legislation of the Republic of Liberia to perfect this Mortgage as a valid and enforceable first and preferred lien upon the Ship and to furnish to the Mortgagee from time to time such proofs as the Mortgagee may reasonably request for its satisfaction with respect to the Owners compliance with the provisions of this sub-clause; | ||
5.1.21 | Notice of Mortgage | |
to place and at all times and places use due diligence to retain a properly certified copy of this Mortgage (which shall form part of the ships documents) on board the Ship with her papers and cause such certified copy of this Mortgage to be exhibited to any and all persons having business with the Ship which might create or imply any commitment or encumbrance whatsoever on or in respect of the Ship (other than a lien for crews wages and salvage) and to any representative of the Mortgagee and to place and keep prominently displayed in the chart room and in the Masters cabin of the Ship a framed printed notice in plain type reading as follows: |
This Vessel is covered by a First Preferred Liberian Continuation Mortgage to CREDIT SUISSE AG (formerly known as CREDIT SUISSE ) of Paradeplatz 8, 8070 Zurich, Switzerland under authority of Title 21 of the Liberian Code of Laws Revised as amended. Under the terms of the said Mortgage neither the Owner nor any charterer nor the Master of this Vessel nor any other person has any right, power or authority to create, incur or |
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permit to be imposed upon this Vessel any commitments or encumbrances whatsoever other than for crews wages and salvage; | ||
5.1.22 | Conveyance on default | |
where the Ship is (or is to be) sold in exercise of any power contained in this Mortgage to execute, forthwith upon request by the Mortgagee, such form of conveyance of the Ship as the Mortgagee may require; | ||
5.1.23 | Anti-drug abuse | |
without prejudice to clause 5.1.9, to take all necessary and proper precautions to prevent any infringements of the Anti-Drug Abuse Act of 1986 of the United States of America or any similar legislation applicable to the Ship in any jurisdiction in or to which the Ship shall be employed or located or trade or which may otherwise be applicable to the Ship and/or the Owner and, if the Mortgagee shall so require, to enter into a Carrier Initiative Agreement with the United States Customs and Border Protection and to procure that such agreement (or any similar agreement hereafter introduced by any Government Entity of the United States of America) is maintained in full force and effect and performed by the Owner; and | ||
5.1.24 | Compliance with environmental laws | |
to comply with, and use all reasonable and proper endeavours to procure that all Environmental Affiliates of the Owner comply with, all Environmental Laws in relation to the Ship including, without limitation, requirements relating to manning, submission of oil spill response plans, designation of qualified individuals and establishing of financial responsibility and to obtain and comply with, and procure that all Environmental Affiliates of the Owner obtain and comply with, all Environmental Approvals in relation to the Ship. | ||
6 | Powers of Mortgagee to protect security and remedy defaults | |
6.1 | Protective action | |
The Mortgagee shall, without prejudice to its other rights, powers and remedies, be entitled (but not bound) at any time, and as often as may be necessary, to take any such action as it may in its discretion think fit for the purpose of protecting or maintaining the security created by this Mortgage and all Expenses attributable thereto shall be payable by the Owner on demand. | ||
6.2 | Remedy of defaults | |
Without prejudice to the generality of the provisions of clause 6.1: | ||
6.2.1 | if the Owner fails to comply with any of the provisions of clause 5.1.1 the Mortgagee shall be entitled (but not bound) to effect and thereafter to maintain all such insurances upon the Ship as in its discretion it may think fit in order to procure the compliance with such provisions or alternatively, to require the Ship (at the Owners risk) to remain in, or to proceed to and remain in, a port designated by the Mortgagee until such provisions are fully complied with; | |
6.2.2 | if the Owner fails to comply with any of the provisions of clauses 5.1.3, 5.1.5 or 5.1.6, the Mortgagee shall be entitled (but not bound) to arrange for the carrying out of such repairs, changes or surveys as it may deem expedient or necessary in order to procure the compliance with such provisions; and | |
6.2.3 | if the Owner fails to comply with any of the provisions of clause 5.1.8, the Mortgagee shall be entitled (but not bound) to pay and discharge all such debts, damages, liabilities and outgoings as are therein mentioned and/or to take any such measures as it may deem |
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expedient or necessary for the purpose of securing the release of the Ship in order to procure the compliance with such provisions, | ||
and the Expenses attributable to the exercise by the Mortgagee of any such powers shall be payable by the Owner to the Mortgagee on demand. | ||
7 | Powers of Mortgagee on Event of Default | |
7.1 | Powers | |
Upon the happening of any Event of Default, the Mortgagee shall become forthwith entitled to demand in accordance with the provisions of the Corporate Guarantee the payment of the Outstanding Indebtedness immediately whereupon the Outstanding Indebtedness shall become so due and payable and (whether or not the Mortgagee shall have made any such demand) the Mortgagee shall become forthwith entitled as and when it may see fit, to put into force and exercise all or any of the rights, powers and remedies possessed by it as mortgagee of the Ship or otherwise (whether at law, by virtue of this Mortgage or otherwise) and in particular (without limiting the generality of the foregoing): | ||
7.1.1 | to exercise all the rights and remedies in foreclosure and otherwise given to mortgagees by the provisions of Chapter 3 of Title 21 of the Liberian Code of Laws Revised (as amended) and all applicable laws of any other jurisdiction; | |
7.1.2 | to take possession of the Ship; | |
7.1.3 | to require that all policies, contracts, certificates of entry and other records relating to the Insurances (including details of and correspondence concerning outstanding claims) be delivered forthwith to such adjusters and/or brokers and/or other insurers as the Mortgagee may nominate; | |
7.1.4 | to collect, recover, compromise and give a good discharge for, all claims then outstanding or thereafter arising under the Insurances or any of them or in respect of the Ship, her Earnings or Requisition Compensation or any part thereof, and to take over or institute (if necessary using the name of the Owner) all such proceedings in connection therewith as the Mortgagee in its absolute discretion thinks fit, and, in the case of the Insurances, to permit any brokers through whom collection or recovery is effected to charge the usual brokerage therefor; | |
7.1.5 | to discharge, compound, release or compromise claims in respect of the Ship, her Earnings, Insurances or Requisition Compensation or any part thereof which have given or may give rise to any charge or lien or other claim on the Ship, her Earnings, Insurances or Requisition Compensation or any part thereof or which are or may be enforceable by proceedings against the Ship, her Earnings, Insurances or Requisition Compensation or any part thereof; | |
7.1.6 | to sell the Ship or any share or interest therein with or without prior notice to the Owner, and with or without the benefit of any charterparty, and free from any claim by the Owner (whether in admiralty, in equity, at law or by statute) by public auction or private contract, at such place and upon such terms as the Mortgagee in its absolute discretion may determine, with power to postpone any such sale, and without being answerable for any loss occasioned by such sale or resulting from postponement thereof and with power, where the Mortgagee purchases the Ship, to make payment of the sale price by making an equivalent reduction in the amount of the Outstanding Indebtedness in the manner referred to in clause 8.1; | |
7.1.7 | to manage, insure, maintain and repair the Ship, and to employ, sail or lay up the Ship in such manner and for such period as the Mortgagee, in its absolute discretion, deems expedient accounting only for net profits arising from any such employment; and | |
7.1.8 | to recover from the Owner on demand all Expenses incurred or paid by the Mortgagee in connection with the exercise of the powers (or any of them) referred to in this clause 7.1. |
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7.2 | Dealings with Mortgagee | |
Upon any sale of the Ship or any share or interest therein by the Mortgagee pursuant to clause 7.1.6 or pursuant to clause 11.1, the purchaser shall not be bound to see or enquire whether the Mortgagees power of sale has arisen in the manner provided in this Mortgage or whether the Mortgagee has made a demand for payment under the provisions of the Corporate Guarantee and the sale shall be deemed to be within the power of the Mortgagee and the receipt of the Mortgagee for the purchase money shall effectively discharge the purchaser who shall not be concerned with the manner of application of the proceeds of sale or be in any way answerable therefor and the sale shall operate to divest the Owner of all rights, title and interest of any nature whatsoever in the Ship and to bar any such interest of the Owner, and all persons claiming through or under the Owner. | ||
8 | Application of moneys | |
8.1 | Application | |
All moneys received by the Mortgagee in respect of a sale of the Ship or any share or interest therein or in respect of the employment of the Ship pursuant to the provisions of clause 7.1.7 (or otherwise pursuant to the provisions of this Mortgage) and all moneys received and retained by the Mortgagee in respect of the Insurances pursuant to this Mortgage shall be held by it upon trust in the first place to pay or make good the Expenses and the balance shall be applied in the manner specified in clause 2.10 of the Corporate Guarantee. | ||
8.2 | Shortfall | |
In the event that the balance referred to in clause 8.1 is insufficient to pay in full the whole of the Outstanding Indebtedness, the Mortgagee shall be entitled to collect the shortfall from the Owner or any other person liable therefor. | ||
9 | Remedies cumulative and other provisions | |
9.1 | No implied waivers; remedies cumulative | |
No failure or delay on the part of the Mortgagee to exercise any right, power or remedy vested in it under the Corporate Guarantee or this Mortgage shall operate as a waiver thereof, nor shall any single or partial exercise by the Mortgagee of any right, power or remedy nor the discontinuance, abandonment or adverse determination of any proceedings taken by the Mortgagee to enforce any right, power or remedy preclude any other or further exercise thereof or proceedings to enforce the same or the exercise of any other right, power or remedy, nor shall the giving by the Mortgagee of any consent to any act which by the terms of this Mortgage requires such consent prejudice the right of the Mortgagee to give or withhold consent to the doing of any other similar act. The remedies provided in the Corporate Guarantee and this Mortgage are cumulative and are not exclusive of any remedies provided by law. | ||
9.2 | Preferred status | |
Anything herein to the contrary notwithstanding, it is intended that nothing herein shall waive the preferred status of this Mortgage and that, if any provision or portion hereof shall be construed to waive the preferred status of this Mortgage, then such provision or portion to such extent shall be void and of no effect. | ||
9.3 | Delegation | |
The Mortgagee shall be entitled, at any time and as often as may be expedient, to delegate all or any of the powers and discretions vested in it by the Corporate Guarantee or this Mortgage (including the power vested in it by virtue of clause 11) in such manner, upon such terms, and to such persons as the Mortgagee in its absolute discretion may think fit. |
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9.4 | Incidental powers | |
The Mortgagee shall be entitled to do all acts and things incidental or conducive to the exercise of any of the rights, powers or remedies possessed by it as mortgagee of the Ship (whether at law, under this Mortgage or otherwise) and in particular (but without prejudice to the generality of the foregoing), upon becoming entitled to exercise any of its powers under clause 7.1, the Mortgagee shall be entitled to discharge any cargo on board the Ship (whether the same shall belong to the Owner or any other person) and to enter into such other arrangements respecting the Ship, her insurances, management, maintenance, repair, classification and employment in all respects as if the Mortgagee was the owner of the Ship, but without being responsible for any loss incurred as a result of the Mortgagee doing or omitting to do any such acts or things as aforesaid. | ||
10 | Costs and indemnity | |
10.1 | Costs | |
The Owner shall pay to the Mortgagee on demand on a full indemnity basis all expenses or liabilities of whatsoever nature (including legal fees, fees of insurance advisers, printing, out-of-pocket expenses, stamp duties, registration fees and other duties or charges) together with any value added tax or similar tax payable in respect thereof, incurred by the Mortgagee in connection with the exercise or enforcement of, or preservation of any rights under, the Corporate Guarantee or this Mortgage or otherwise in respect of the Outstanding Indebtedness and the security therefor, or in connection with the preparation, completion, execution or registration of the Corporate Guarantee or this Mortgage. | ||
10.2 | Mortgagees indemnity | |
The Owner hereby agrees and undertakes to indemnify the Mortgagee against all losses, actions, claims, expenses, demands, obligations and liabilities whatever and whenever arising which may now or hereafter be incurred by the Mortgagee or by any manager, agent, officer or employee for whose liability, act or omission the Mortgagee may be answerable in respect of, in relation to, or in connection with anything done or omitted in the exercise or purported exercise of the powers contained in this Mortgage or otherwise in connection with such powers or with this Mortgage or with the Ship, its Earnings, Requisition Compensation and Insurances or otherwise howsoever in relation to, or in connection with, any of the matters dealt with in the Corporate Guarantee or this Mortgage. | ||
11 | Attorney | |
11.1 | Power | |
By way of security, the Owner hereby irrevocably appoints the Mortgagee to be its attorney generally for and in the name and on behalf of the Owner, and as the act and deed or otherwise of the Owner to execute, seal and deliver and otherwise perfect and do all such deeds, assurances, agreements, instruments, acts and things which may be required for the full exercise of all or any of the rights, powers or remedies conferred by the Corporate Guarantee, this Mortgage or any of the other Security Documents, or which may be deemed proper in or in connection with all or any of the purposes aforesaid (including, without prejudice to the generality of the foregoing, the execution and delivery of a bill of sale of the Ship). The power of attorney hereby conferred shall be a general power of attorney and the Owner ratifies and confirms, and agrees to ratify and confirm, any deed, assurance, agreement, instrument, act or thing which the Mortgagee may execute or do pursuant thereto. Provided however that such power shall not be exercisable by or on behalf of the Mortgagee until the happening of an Event of Default. | ||
11.2 | Dealings with attorney | |
The exercise of such power by or on behalf of the Mortgagee shall not put any person dealing with the Mortgagee upon any enquiry as to whether any Event of Default has happened, nor |
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shall such person be in any way affected by notice that no such Event of Default has happened, and the exercise by the Mortgagee of such power shall be conclusive evidence of the Mortgagees right to exercise the same. | ||
11.3 | Filings | |
The Owner hereby irrevocably appoints the Mortgagee to be its attorney in its name and on its behalf and as its act and deed or otherwise of it to agree the form of and to execute and do all deeds, instruments, acts and things in order to file, record, register or enrol this Mortgage in any court, public office or elsewhere which the Mortgagee may in its discretion consider necessary or advisable, now or in the future, to ensure the legality, validity, enforceability or admissibility in evidence thereof. | ||
12 | Further assurance | |
The Owner hereby further undertakes at its own expense from time to time to execute, sign, perfect, do and (if required) register every such further assurance, document, act or thing as in the opinion of the Mortgagee may be necessary or desirable for the purpose of more effectually mortgaging and charging the Ship or perfecting the security constituted or intended to be constituted by this Mortgage or contemplated by the Corporate Guarantee. | ||
13 | Total amount and maturity | |
For the purpose of recording this First Preferred Mortgage as required by Chapter 3 of Title 21 of the Liberian Code of Laws Revised as amended the total amount is One hundred and nine million two hundred thousand Dollars ($109,200,000) (of which Ninety one million Dollars ($91,000,000) represents the maximum principal amount of the Loan that may be outstanding at any one time and Eighteen million two hundred thousand Dollars ($18,200,000) represents maximum amount secured by this Mortgage with respect to the Swap Obligations) and interest on the Loan and performance of mortgage covenants. The date of maturity is 31 October 2015 and the discharge amount is the same as the total amount. | ||
14 | Law, jurisdiction and other provisions | |
14.1 | Law | |
This Mortgage and any non-contractual obligations connected with it are governed by, and shall be construed and enforceable in accordance with, the laws of the Republic of Liberia. | ||
14.2 | Submission to jurisdiction | |
For the benefit of the Mortgagee, the Owner irrevocably agrees, that any legal action or proceedings in connection with this Mortgage (including any non-contractual obligations connected with it) may be brought in the English courts, or in the courts of any other country chosen by the Mortgagee, each of which shall have jurisdiction to settle any disputes arising out of, or in connection with, this Mortgage. The Owner irrevocably and unconditionally submits to the jurisdiction of the English courts and the courts of any country chosen by the Mortgagee and irrevocably designates, appoints and empowers Atlas Maritime Service Ltd. at present of Enterprise House, 113-115 George Lane, London E18 1AB, England to receive, for it and on its behalf, service of process issued out of the English courts in any legal action or proceedings arising out of or in connection with this Mortgage (including any non-contractual obligations connected with it). The submission to such jurisdiction shall not (and shall not be construed so as to) limit the right of the Mortgagee to take proceedings against the Owner or the Ship in any other court of competent jurisdiction nor shall the taking of proceedings in any one or more jurisdictions preclude the taking of proceedings in any other jurisdiction, whether concurrently or not. |
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15 | Other provisions | |
15.1 | Severability | |
If any provision in the Corporate Guarantee, the Loan Agreement, the Master Swap Agreement, this Mortgage or any of the other Security Documents be or becomes invalid or unenforceable under any applicable law the provisions hereof shall in all other respects remain in full force and effect and the provision in question shall be ineffective to the extent (but only to the extent) of its disconformity with the requirement of the applicable law and if it is competent to the parties to waive any requirements which would otherwise operate as aforesaid those requirements are hereby waived to the extent permitted by such law to the end that the Corporate Guarantee, the Loan Agreement, the Master Swap Agreement, this Mortgage and each of the other Security Documents shall be valid, binding and enforceable in accordance with their respective terms. | ||
15.2 | Counterparts | |
This Mortgage may be executed in any number of counterparts each of which shall be an original but such counterparts shall together constitute one and the same instrument. | ||
15.3 | Continuation Mortgage | |
This Mortgage is granted in continuation of the Prior Mortgage within the meaning of Section 101of Title 21 of the Liberian Code of Laws Revised as amended, and upon recordation of this Mortgage in accordance with the provisions of Title 21 of the Liberian Code of Laws Revised as amended, this Mortgage shall have preferred status as of 14 April 2008, the First Recording Date. | ||
16 | Notices | |
16.1 | Every notice, request, demand or other communication under this Mortgage shall: | |
16.1.1 | be in writing delivered personally or by first-class prepaid letter (airmail if available) or facsimile transmission or other means of telecommunication in permanent written form; | |
16.1.2 | be deemed to have been received in the case of a letter, when delivered personally or three (3) days after it has been put in to the post and, in the case of a facsimile transmission or other means of telecommunication in permanent written form, at the time of despatch (provided that if the date of despatch is not a business day in the country of the addressee or if the time of despatch is after the close of business in the country of the addressee it shall be deemed to have been received at the opening of business on the next such business day); and | |
16.1.3 | be sent: |
(a) | if to the Owner at: |
c/o Free Bulkers S.A.
89 Akti Miaouli 185 38 Piraeus Greece |
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Fax no: +30 210 429 1010
Attention: Mr Ion Varouxakis |
(b) | if to the Mortgagee at: |
Credit Suisse AG
Paradeplatz 8 8070 Zurich Switzerland |
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Fax: +41 612 667 939
Attention: Mr Gianrichy Giamboi |
or to such other address and/or numbers as is notified by one party to the other party under this Mortgage. |
By: | /s/ Ioannis Fassolis | |||
Name: | Ioannis Fassolis | |||
Title: | Attorney-in-Fact |
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S.S
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1. | I have reviewed this annual report on Form 20-F of FreeSeas Inc.; |
2. | Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this annual report; |
4. | The companys other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15-d-15(f)) for the company and have: |
(a) | Designed such disclosures controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
(c) | Evaluated the effectiveness of the companys disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
(d) | Disclosed in this report any change in the companys 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 companys internal control over financial reporting; and |
5. | The companys other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the companys auditors and the audit committee of the companys board of directors (or persons performing the equivalent functions): |
(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 companys ability to record, process, summarize and report financial information; and | ||
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the companys internal control over financial reporting. |
/s/ Ion G. Varouxakis | ||||
Ion G. Varouxakis | ||||
Chief Executive Officer | ||||
1. | I have reviewed this annual report on Form 20-F of FreeSeas Inc.; |
2. | Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this annual report; |
4. | The companys other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15-d-15(f)) for the company and have: |
(a) | Designed such disclosure controls and procedures or caused such disclosure controls and procedures, to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
(c) | Evaluated the effectiveness of the companys disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
(d) | Disclosed in this report any change in the companys 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 companys internal control over financial reporting; and |
5. | The companys other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the companys auditors and the audit committee of the companys board of directors (or persons performing the equivalent functions): |
(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 companys ability to record, process, summarize and report financial information; and | ||
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the companys internal control over financial reporting. |
/s/ Alexandros Mylonas | ||||
Alexandros Mylonas | ||||
Chief Financial Officer | ||||
/s/ Ion G. Varouxakis | ||||
Ion G. Varouxakis | ||||
Chief Executive Officer | ||||
/s/ Alexandros Mylonas | ||||
Alexandros Mylonas | ||||
Chief Financial Officer | ||||
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PricewaterhouseCoopers S.A. | |
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268 Kifissias Avenue | |
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152 32 Halandri | |
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Greece | |
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www.pwc.gr | |
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e-mail:pwc.greece@gr.pwc.com | |
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Tel. : +30 210 6874 400 | |
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Fax : +30 210 6874 444 |
Halandri
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268/270 Kifissias Avenue, 152 32 Halandri, Tel: + 30 210 6874 400, Fax: +30 210 6874 444 | |
Piraeus
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2, 2nd Merarchias Str., 185 35 Piraeus, Tel.: +30 210 4284 000, Fax: +30 210 4520 263 | |
Thessaloniki:
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17 Ethnikis Antistassis Str, 551 34 Thessaloniki, Tel: +30 2310 488 880, Fax: +30 2310 459 487 |