Date 17 May 2006
MATRIX GAS TRADING LTD., VCM TRADING LTD.,
GENEVE BUTANE INC., LPGONE LTD.,
SEMICHLAUS EXPORTS LTD., VENTSPILS GASES LTD.,
PACIFIC GASES LTD., ARACRUZ TRADING LTD.,
INDUSTRIAL MATERIALS INC., ENERGETIC PENINSULA LIMITED,
OXFORDGAS LIMITED, OCEAN BLUE LIMITED AND STEALTHGAS INC.
as joint and several borrowers
- and -
FORTIS BANK N.V./S.A.
as Lender
--------------------------------------------------------------------------------
LOAN AGREEMENT
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relating to a US$79,850,000 facility to (a) refinance the
existing indebtedness secured on the LPG carriers "GAS
AMAZON", "GAS ARCTIC", "GAS ICE", "XXXXXX
XXXXX", "GAS EMPEROR", "GAS COURCHEVEL",
"GAS SHANGHAI", "GAS PROPHET" and "GAS
TINY" and (b) finance part of the acquisition costs of the
LPG carriers "LYNE", " SIR IVOR" and "GAS HOPE
M." (tbr "GAS NEMESIS")
XXXXXX, XXXXXX & XXXXXXXX
PIRAEUS
INDEX
CLAUSE PAGE
1 INTERPRETATION 1
2 FACILITY 20
3 DRAWDOWN 20
4 INTEREST 21
5 INTEREST PERIODS 22
6 DEFAULT INTEREST 23
7 REPAYMENT AND PREPAYMENT 24
8 CONDITIONS PRECEDENT 25
9 REPRESENTATIONS AND WARRANTIES 26
10 GENERAL UNDERTAKINGS 28
11 CORPORATE UNDERTAKINGS 31
12 INSURANCE 32
13 SHIP COVENANTS 36
14 SECURITY COVER 40
15 PAYMENTS AND CALCULATIONS 41
16 APPLICATION OF RECEIPTS 42
17 APPLICATION OF EARNINGS 42
18 EVENTS OF DEFAULT 44
19 FEES AND EXPENSES 48
20 INDEMNITIES 48
21 NO SET-OFF OR TAX DEDUCTION 50
22 ILLEGALITY, ETC 51
23 INCREASED COSTS 51
24 SET-OFF 52
25 TRANSFERS AND CHANGES IN LENDING OFFICE 53
26 VARIATIONS AND WAIVERS 54
27 NOTICES 54
28 JOINT AND SEVERAL LIABILITY 56
29 SUPPLEMENTAL 56
30 LAW AND JURISDICTION 57
SCHEDULE 1 DRAWDOWN NOTICE 58
SCHEDULE 2 DETAILS OF BORROWERS 59
SCHEDULE 3 DETAILS OF SHIPS 62
SCHEDULE 4 CONDITION PRECEDENT DOCUMENTS 64
EXECUTION PAGE 69
THIS AGREEMENT is made on 17 May 2006
BETWEEN
(1) MATRIX GAS TRADING LTD., VCM TRADING LTD., GENEVE BUTANE INC., LPGONE
LTD., SEMICHLAUS EXPORTS LTD., VENTSPILS GASES LTD., PACIFIC GASES
LTD., ARACRUZ TRADING LTD., INDUSTRIAL MATERIALS INC., ENERGETIC
PENINSULA LIMITED, OXFORDGAS LIMITED, OCEAN BLUE LIMITED and STEALTHGAS
INC. as joint and several borrowers; and
(2) FORTIS BANK N.V./S.A., acting through its branch at 000 Xxxxxxx Xxxxxx,
000 00 Xxxxxx, Xxxxxx as "LENDER".
BACKGROUND
(A) The Lender has agreed to make available to the Borrowers a loan
facility of up to US$79,850,000 in 4 Advances as follows:
(i) as to an amount of US$46,349,250, to refinance the existing
indebtedness secured on the Existing Ships;
(ii) as to an amount of up to US$15,700,000, to finance 100 per
cent. of the purchase price of the 2003-built LPG Carrier of
5,000 cubic metres currently named "SIR IVOR";
(iii) as to an amount of up to US$11,000,000, to finance 100 per
cent. of the purchase price of the 1996-built LPG Carrier of
5,000 cubic metres currently named "LYNE"; and
(iv) as to the amount of up to US$6,800,750, to finance 64.77 per
cent. of the purchase price of the 1995-built LPG Carrier of
5,000 cubic metres currently named "GAS HOPE M" (tbr "GAS
NEMESIS").
(B) The Borrowers may, if they wish, from time to time hedge their exposure
under this Agreement to interest rate fluctuations by entering into
interest rate swap transactions with the Lender.
IT IS AGREED as follows:
1 INTERPRETATION
1.1 DEFINITIONS. Subject to Clause 1.5, in this Agreement:
"ACCOUNTING INFORMATION" means the annual audited consolidated accounts
to be provided by the Borrowers to the Lender in accordance with Clause
10.6;
"ACCOUNTS PLEDGE" means a deed creating security in respect of the
Earnings Account and the Retention Account, to be in favour of the
Lender, in such form as the Lender may approve or require;
"ADVANCE" means the principal amount of each borrowing by the Borrowers
under this Agreement;
"APPROVED MANAGER" means, in relation to a Ship, Stealth, being the
commercial manager of the Ship and any of (a) Stealth, (b) V Ships
Cyprus whose principal office is at V. Ships House, 00 Xxxxxx Xxxxxx,
0000 Xxxxxxxx, Xxxxxx, (x) XXXXX Xxxxxxx A/S. whose principal office is
at Xxxxxxx Xxxxxx House, Xxxxxxxxxxx 0, XX 0000, Xxxxxxxx, Xxxxxxx, (x)
XXXXX Xxxxxxxxx Pte Ltd whose principal office is at 00 Xxx Xxx Xxxx
Xxxx, #00-04 Sembawang Kimtrans Logistics Centre, Singapore 597654,
Singapore, (e) Swan Shipping Corp. whose principal office is at 0X X&X
Xxxxxxxx, 0000 Xxxxx Xxxxxxxxx, Xxxxxx, Xxxxxx or (f) Hanseatic
Shipping Company Limited whose principal office is at Hanseatic House,
000, Xxxxxx Xxxxxxxx Xxxxxx, Xxxxxxxx 0000, Xxxxxx, being the technical
manager of the Ship or any other company which the Lender may approve
from time to time as the commercial and/or technical manager of the
Ship;
"ARACRUZ" means Aracruz Trading Ltd. a corporation incorporated and
existing under the laws of the Xxxxxxxx Islands and having its
registered office at Trust Company Complex, Ajeltake Road, Ajeltake
Island, Majuro, Xxxxxxxx Islands, MH96960;
"ASSET COVER RATIO" means at any time, the ratio of:
(a) the aggregate of:
(i) the aggregate Market Values of the Ships then subject
to a Mortgage; and
(ii) the net realisable value of any additional security
previously provided under Clause 14 of this
Agreement; to
(b) the Loan;
"AVAILABILITY PERIOD" means the period commencing on the date of this
Agreement and ending on:
(a) 30 June 2006 (or such later date as the Lender may agree with
the Borrowers, such agreement not to be unreasonably withheld
by the Lender); or
(b) if earlier, the date on which the Commitment is fully
borrowed, cancelled or terminated;
"BAREBOAT CHARTER" means, each of the Xxxxxx Xxxxx Bareboat Charter,
the Gas Ice Bareboat Charter, the Gas Arctic Bareboat Charter, the Xxx
Xxxx Xxxxxxxx Charter and the Lyne Bareboat Charter and in the plural
means all of them;
"BAREBOAT CHARTERER" means, in the relation to:
(a) "XXXXXX XXXXX", Unigas Kosan;
(b) each of "GAS ICE" and "GAS ARCTIC", Xxxxxxx; and
(c) each of "LYNE" and "XXX XXXX", Xxxxxxxx,
and in the plural means both of them;
"XXXXXX XXXXX BAREBOAT CHARTER" means the bareboat charterparty in
relation to "XXXXXX XXXXX" dated 4 January 2005 and entered into
between Industrial as owner and Unigas Kosan as bareboat charterer;
2
"XXXXXX XXXXX BAREBOAT CHARTER ASSIGNMENT" means a specific assignment
of the rights of Industrial under the Xxxxxx Xxxxx Bareboat Charter and
the Xxxxxx Xxxxx Xxxxxxxxx's Insurance Assignment, to be executed by
Industrial in favour of the Lender in such form as the Lender may
approve or require;
"XXXXXX XXXXX CHARTERER'S INSURANCE ASSIGNMENT" means a deed of
assignment made or to be made by Unigas Kosan (in its capacity as
bareboat charterer of "XXXXXX XXXXX"), in favour of Industrial in the
agreed form;
"XXXXXX XXXXX BAREBOAT CHARTER PERIOD" means the period during which
"XXXXXX XXXXX" is operating under the Xxxxxx Xxxxx Bareboat Charter;
"BORROWERS" means, together, Matrix, VCM, Geneve, Lpgone, Semichalaus,
Ventsplis, Pacific, Aracruz, Industrial, Energetic, Oxfordgas, Ocean
and Stealthgas, and in the singular means any of them;
"BUSINESS DAY" means a day on which banks are open in London, Athens,
Rotterdam and, in respect of a day on which a payment is required to be
made under a Finance Document, also in New York City;
"BUYERS" means, together, Xxxxxxxxx, Energetic and Ocean in their
capacity as the buyers of "LYNE", "SIR IVOR" and "GAS NEMESIS"
respectively pursuant to the MOAs, and in the singular means any of
them;
"CHARTER" means, in relation to a Ship, any time charter or other
contract for its employment (other than the Bareboat Charter relative
to that Ship) for a term of at least 12 months, or capable of exceeding
12 months, whether or not already in existence at the date of this
Agreement, to be performed at any time during the Security Period;
"CHARTER ASSIGNMENT" means in relation to a Ship, a specific assignment
of the rights of the relevant Shipowner under any future Charter
pursuant to Clause 13.15 and any guarantee of such Charter, to be
executed by that Shipowner in favour of the Lender in such form as the
Lender may approve or require;
"COMMITMENT" means $79,850,000, as that amount may be reduced,
cancelled or terminated in accordance with this Agreement;
"CONFIRMATION" and "EARLY TERMINATION DATE", in relation to any
continuing Transaction, have the meanings given in the Master
Agreement;
"CONTRACTUAL CURRENCY" has the meaning given in Clause 20.4;
"DEBT TO VALUE RATIO" means, at any relevant time, the ratio of the
Loan to the aggregate Market Value of the Ships subject to a Mortgage
at that time;
"DEED OF COVENANT" means, in relation to each of "GAS EMPEROR", "GAS
ICE", "GAS ARCTIC" and "SIR IVOR", a deed of covenant collateral to the
Mortgage relating to that Ship executed or to be executed by the
relevant Shipowner in favour of the Lender in such form as the Lender
may approve or require and, in the plural, means all of them;
"DELIVERY DATE" means, in relation to a Ship, the date on which that
Ship is delivered to the relevant Buyer pursuant to the MOA relative to
that Ship;
"DOLLARS" and "$" means the lawful currency for the time being of the
United States of America;
3
"DRAWDOWN DATE" means, in relation to an Advance, the date requested by
the Borrowers for the Advance to be made, or (as the context requires)
the date on which the Advance is actually made;
"DRAWDOWN NOTICE" means a notice in the form set out in Schedule 1 (or
in any other form which the Lender approves or reasonably requires);
"EARNINGS" means, in relation to a Ship, all moneys whatsoever which
are now, or later become, payable (actually or contingently) to the
Shipowner owning the Ship and which arise out of the use or operation
of the Ship, including (but not limited to):
(a) all freight, hire and passage moneys, compensation payable to
the Shipowner owning the Ship 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;
(b) all moneys which are at any time payable under Insurances in
respect of loss of earnings; and
(c) if and whenever the Ship is employed on terms whereby any
moneys falling within paragraphs (a) or (b) are pooled or
shared with any other person, that proportion of the net
receipts of the relevant pooling or sharing arrangement which
is attributable to the Ship;
"EARNINGS ACCOUNT" means an account in the joint names of the Borrowers
with the Lender in Athens designated "Matrix Gas Trading Ltd. c.s. -
Earnings Account" and having account number 1000120205, or any other
account (with that or another office of the Lender) which is designated
by the Lender as the Earnings Account for the purposes of this
Agreement;
"EBITDA" means, in respect of the relevant period, the aggregate amount
of consolidated or combined pre-tax profits of the Group before
extraordinary or exceptional items, depreciation, interest, repayment
of principal in respect of any loan, rentals under finance leases and
similar charges payable;
"ENERGETIC" means Energetic Peninsula Limited, a company incorporated
under the laws of Hong Kong having its registered office at 16th-19th
Floors, Prince's Building, 00 Xxxxxx Xxxx, Xxxxxxx, Xxxx Xxxx;
"ENVIRONMENTAL CLAIM" means:
(a) any claim by any governmental, judicial or regulatory
authority which arises out of an Environmental Incident or an
alleged Environmental Incident or which relates to any
Environmental Law; or
(b) any claim by any other person which relates to an
Environmental Incident or to an alleged Environmental
Incident,
and "CLAIM" means a claim for damages, compensation, fines, penalties
or any other payment of any kind, whether or not similar to the
foregoing; an order or direction to take, or not to take, certain
action or to desist from or suspend certain action; and any form of
enforcement or regulatory action, including the arrest or attachment of
any asset;
"ENVIRONMENTAL INCIDENT" means:
4
(a) any release of Environmentally Sensitive Material from a Ship;
or
(b) any incident in which Environmentally Sensitive Material is
released from a vessel other than a Ship and which involves a
collision between a Ship and such other vessel or some other
incident of navigation or operation, in either case, in
connection with which a Ship is actually or potentially liable
to be arrested, attached, detained or injuncted and/or a Ship
and/or any vessel and/or any operator or manager of the Ship
is at fault or allegedly at fault or otherwise liable to any
legal or administrative action; or
(c) any other incident in which Environmentally Sensitive Material
is released otherwise than from a Ship and in connection with
which a Ship is actually or potentially liable to be arrested
and/or where any vessel and/or any operator or manager of a
Ship is at fault or allegedly at fault or otherwise liable to
any legal or administrative action;
"ENVIRONMENTAL LAW" means any law relating to pollution or protection
of the environment, to the carriage of Environmentally Sensitive
Material or to actual or threatened releases of Environmentally
Sensitive Material;
"ENVIRONMENTALLY SENSITIVE MATERIAL" means oil, oil products and any
other substance (including any chemical, gas or other hazardous or
noxious substance) which is (or is capable of being or becoming)
polluting, toxic or hazardous;
"EVENT OF DEFAULT" means any of the events or circumstances described
in Clause 18.1;
"EXCESS CASH FLOW" means, in relation to each financial year of the
Holding Company, an amount equal to the actual aggregate gross
operating revenues of all the Ships during that financial year (or
budgeted gross operating revenue in the case of the final month of that
financial year) less the aggregate of:
(a) the amount of principal and interest payable during that
financial year in accordance with the terms of this Agreement;
and
(b) actual gross operating expenses of all the Ships during that
financial year (or budgeted gross operating expenses in the
case of the final month of that financial year) including (for
the avoidance of doubt) expenditure necessarily incurred in
that financial year by the Shipowners in operating, insuring,
maintaining, repairing and generally trading the Ships (but
excluding any exceptional and extraordinary expenses);
"EXISTING INDEBTEDNESS" means, at any relevant time, the aggregate
Financial Indebtedness of the Borrowers under the Existing Loan
Agreement;
"EXISTING LOAN AGREEMENT" means the loan agreement dated 16 March 2005
made between (inter alia) the Existing Shipowners as joint and several
borrowers and (ii) Fortis Bank (Nederland) N.V. as lender in respect of
a loan facility of (originally) $54,000,000 (of which an amount of
$46,349,250 is outstanding by way of principal on the date of this
Agreement);
"EXISTING SHIPS" means, together:
5
(a) the 1995-built LPG Carrier of 5,013 cubic metres registered
under Cypriot flag in the ownership of Pacific with the name
"GAS EMPEROR" ("GAS EMPEROR");
(b) the 1991-built LPG Carrier of 3,436 cubic metres registered
under Maltese flag in the ownership of Semichlaus with the
name "GAS ICE" and parallel registered in the name of Finaval
at the Italian bareboat charter registry at the port of
Palermo ("GAS ICE");
(c) the 1992-built LPG Carrier of 3,436 cubic metres registered
under Maltese flag in the ownership of Ventspils with the name
"GAS ARCTIC" and parallel registered in the name of Finaval at
the Italian bareboat charter registry at the port of Palermo
("GAS ARCTIC");
(c) the 1994-built LPG Carrier of 5,012 cubic metres registered
under Maltese flag in the ownership of Industrial with the
name "XXXXXX XXXXX" ("XXXXXX XXXXX");
(d) the 1991-built LPG Carrier of 4,109 cubic metres registered
under Xxxxxxxx Islands flag in the ownership of Geneve with
the name "GAS COURCHEVEL" ("GAS COURCHEVEL");
(e) the 1999-built LPG Carrier of 3,526 cubic metres registered
under Xxxxxxxx Islands flag in the ownership of Matrix with
the name "GAS SHANGHAI" ("GAS SHANGHAI");
(f) the 1996-built LPG Carrier of 3,556 cubic metres registered
under Xxxxxxxx Islands flag in the ownership of VCM with the
name "GAS PROPHET" ("GAS PROPHET");
(g) the 1991-built LPG Carrier of 1,320 cubic metres registered
under Xxxxxxxx Islands flag in the ownership of Lpgone with
the name "GAS TINY" ("GAS TINY");
(h) the 1992-built LPG Carrier of 6,562 cubic metres registered
under Xxxxxxxx Islands flag in the ownership of Aracruz with
the name "GAS AMAZON" ("GAS AMAZON"),
and, in the singular, means any of them;
"EXISTING SHIPOWNERS" means, together, Matrix, VCM, Geneve, Lpgone,
Semichlaus, Ventspils, Pacific, Aracruz and Industrial, each in its
capacity as the registered owner of an Existing Ship, and in the
singular means any of them;
"FINANCE DOCUMENTS" means:
(a) this Agreement;
(b) the Master Agreement;
(c) the Mortgages;
(d) the Deeds of Covenant;
(e) the General Assignments;
(f) the Master Agreement Assignment;
6
(g) the Accounts Pledge;
(h) the Tripartite Agreements;
(i) the Xxxxxx Xxxxx Bareboat Charter Assignment;
(j) the Gas Nemesis Charter Assignment;
(k) any Charter Assignment; and
(l) any other document (whether creating a Security Interest or
not) which is executed at any time by any Borrower or any
other person as security for, or to establish any form of
subordination or priorities arrangement in relation to, any
amount payable to the Lender under this Agreement or any of
the other documents referred to in this definition;
"FINANCIAL INDEBTEDNESS" means, in relation to a person (the "DEBTOR"),
a liability of the debtor:
(a) for principal, interest or any other sum payable in respect of
any moneys borrowed or raised by the debtor;
(b) under any loan stock, bond, note or other security issued by
the debtor;
(c) under any acceptance credit, guarantee or letter of credit
facility made available to the debtor;
(d) under a financial lease, a deferred purchase consideration
arrangement or any other agreement having the commercial
effect of a borrowing or raising of money by the debtor;
(e) under any foreign exchange transaction any interest or
currency swap or any other kind of derivative transaction
entered into by the debtor or, if the agreement under which
any such transaction is entered into requires netting of
mutual liabilities, the liability of the debtor for the net
amount; or
(f) under a guarantee, indemnity or similar obligation entered
into by the debtor in respect of a liability of another person
which would fall within (a) to (e) if the references to the
debtor referred to the other person;
"FINAVAL" means Finaval S.P.A., a company incorporated under the laws
of Italy and having its registered office at Xxx Xxxxxxxx Xxxxxxxx 0,
00000 Xxxx, Xxxxx;
"GAS ARCTIC BAREBOAT CHARTER" means the bareboat charterparty dated 23
February 2005 and entered into between Ventspils as owner and Finaval
as charterer in relation to "GAS ARCTIC", in such form as the Lender
may approve or require;
"GAS ARCTIC BAREBOAT CHARTER PERIOD" means the period during which "GAS
ARCTIC" is operating under the Gas Arctic Bareboat Charter;
"GAS ARCTIC TRIPARTITE AGREEMENT" means an agreement dealing with
(inter alia) the operation of "GAS ARCTIC" during the Gas Arctic
Bareboat Charter Period, made or to be made between (i) Ventspils, (ii)
Finaval and (iii) the Lender, in such form as the Lender may approve or
require;
7
"GAS ICE BAREBOAT CHARTER" means the bareboat charterparty in relation
to "GAS ICE" dated 23 February 2005 and entered into between Semichlaus
as owner and Finaval as bareboat charterer;
"GAS ICE BAREBOAT CHARTER PERIOD" means the period during which "GAS
ICE" is operating under the Gas Ice Bareboat Charter;
"GAS ICE TRIPARTITE AGREEMENT" means an agreement dealing with (inter
alia) the operation of "GAS ICE" during the Gas Ice Bareboat Charter
Period, made or to be made between (i) Semichlaus, (ii) Finaval and
(iii) the Lender, in such form as the Lender may approve or require;
"GAS NEMESIS" means the 1995-built LPG Carrier of 5,000 cubic metres
currently registered under Panamanian flag in the ownership of the
Seller thereof with the name "GAS HOPE M" which is to be acquired by
Ocean pursuant to the Gas Nemesis MOA and registered in its ownership
under Panamanian flag with the name "GAS NEMESIS";
"GAS NEMESIS CHARTER ASSIGNMENT" means, in relation to the Gas Nemesis
Time Charterparty, a specific assignment of the rights of Ocean under
the Gas Nemesis Time Charterparty, to be executed by Xxxxx in favour of
the Lender in such form as the Lender may approve or require;
"GAS NEMESIS CHARTERER" means Shell Gas Trading (Asia Pacific) Inc., a
company incorporated in Manila, Philippines whose registered office is
at Shell House, 000 Xxxxxx Xxxxxx, Xxxxxxx Xxxxxxx, Xxxxxx Xxxx,
Xxxxxxxxxxx;
"GAS NEMESIS MOA" means a memorandum of agreement in relation to "GAS
NEMESIS" dated 9 May 2006 made between Ocean and the Seller thereof;
"GAS NEMESIS TIME CHARTERPARTY" means the time charterparty in relation
to "GAS NEMESIS" dated 11 July 2001 and made between (i) Pacific Pearl
Shipping Inc. of Monrovia, Liberia (the "DISPONENT OWNER") and the Gas
Nemesis Charterer as the same has been novated by the Disponent Owner
to Ocean by a novation agreement dated 9 May 2006 made between the
Disponent Owner, the Gas Nemesis Charterer and Ocean;
"GENERAL ASSIGNMENT" means, in relation to each Ship, a general
assignment of the Earnings, the Insurances and any Requisition
Compensation of that Ship, in such form as the Lender may approve or
require, and in the plural means all of them;
"GENEVE" means Geneve Butane Inc., a corporation incorporated and
existing under the laws of the Xxxxxxxx Islands and having its
registered office at Trust Company Complex, Ajeltake Road, Ajeltake
Island, Majuro, Xxxxxxxx Islands, MH96960;
"GROUP" means the Holding Company and its subsidiaries (whether direct
or indirect and including, but not limited to, the Borrowers) from time
to time during the Security Period and "MEMBER OF THE GROUP" shall be
construed accordingly;
"HOLDING COMPANY" means Stealthgas in its capacity as ultimate
beneficial owner of each of the other Borrowers;
"INDUSTRIAL" means Industrial Materials Inc., a corporation
incorporated and existing under the laws of the Xxxxxxxx Islands and
having its registered office at Trust Company Complex, Ajeltake Road,
Ajeltake Island, Majuro, Xxxxxxxx Islands, MH96960;
"INSURANCES" means, in relation to a Ship:
8
(a) all policies and contracts of insurance, including entries of
the Ship in any protection and indemnity or war risks
association, which are effected in respect of the Ship, her
Earnings or otherwise in relation to her; and
(b) all rights and other assets relating to, or derived from, any
of the foregoing, including any rights to a return of a
premium;
"INTEREST EXPENSES" means, in respect of the relevant period, the
aggregate of all interest payable by any member of the Group on any
Financial Indebtedness (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;
"INTEREST PERIOD" means a period determined in accordance with Clause
5;
"ISM CODE" means, in relation to its application to each Borrower, its
Ship and its 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 November 1993 and incorporated on 19 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 Organisations pursuant
to Resolution A.788(19) adopted on 25 November 1995,
as the same may be amended, supplemented or replaced from time to time;
"ISM CODE DOCUMENTATION" includes:
(a) the document of compliance (DOC) and safety management
certificate (SMC) issued pursuant to the ISM Code in relation
to each Ship within the periods specified by the ISM Code; and
(b) all other documents and data which are relevant to the ISM SMS
and its implementation and verification which the Lender may
require; and
(c) any other documents which are prepared or which are otherwise
relevant to establish and maintain a Ship's or a Shipowner's
compliance with the ISM Code which the Lender may require;
"ISM SMS" means the safety management system for each Ship 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 Organisation ("IMO") now set out in Chapter XI-2 of the Safety
of Life at Sea Convention (SOLAS) 1974 (as amended) and the mandatory
ISPS Code as adopted by a Diplomatic Conference of the IMO on Maritime
Security in December 2002 and includes any amendments or extensions to
it and any regulation issued pursuant to it but shall only apply
insofar as it is
9
applicable law in the relevant Ship's flag state and any jurisdiction
on which such Ship is operated;
"ISPS CODE DOCUMENTATION" includes:
(a) the International Ship Security Certificate issued pursuant to
the ISPS Code in relation to each Ship within the period
specified in the ISPS Code; and
(i) all other documents and data which are relevant to the ISPS
Code and its implementation and verification which the Agent
may require;
"LENDER" means Fortis Bank N.V./S.A., acting through its branch at 000
Xxxxxxx Xxxxxx, 000 00 Xxxxxx, Xxxxxx (or through another branch
notified to the Borrower under Clause 25.6) or its successor or assign;
"LIBOR" means, for an Interest Period:
(a) the rate per annum equal to the offered quotation for deposits
in Dollars for a period equal to, or as near as possible equal
to, the relevant Interest Period which appears on Reuters BBA
Page LIBOR 01 at or about 11.00 a.m. (London time) on the
second Business Day prior to the commencement of that Interest
Period (and, for the purposes of this Agreement, "Reuters BBA
Page LIBOR 01" means the display designated as "Reuters BBA
Page LIBOR 01" on the Reuters Money News Service or such other
page as may replace Reuters BBA Page LIBOR 01 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; or
(b) in relation to an Interest Period of any other duration or if
no rate is quoted on Reuters BBA Page LIBOR 01, the rate per
annum determined by the Lender to be the arithmetic mean
(rounded upwards, if necessary, to the nearest one-sixteenth
of one per cent.) of the rates per annum determined by the
Lender as the rate at which deposits in Dollars are offered to
the Lender by leading banks in the London Interbank Market at
the Lender's request at or about 11.00 a.m. (Athens time) on
the Quotation Date for that Interest Period for a period equal
to that Interest Period and for delivery on the first Business
Day of it;
"LOAN" means the principal amount for the time being outstanding under
this Agreement;
"LPGONE" means Lpgone Ltd., a corporation incorporated and existing
under the laws of the Xxxxxxxx Islands and having its registered office
at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro,
Xxxxxxxx Islands, MH96960;
"LYNE" means the 1996-built LPG Carrier of 5,000 cubic metres currently
registered under Panamanian flag in the ownership of the Seller thereof
with the name "LYNE" which is to be acquired by Oxfordgas pursuant to
the Xxxx XXX and registered in its ownership under Panamanian flag with
the same name;
"XXXX XXXXXXXX CHARTER" means the bareboat charterparty in relation to
"LYNE" dated 27 April 2006 and entered into between Oxfordgas (as
nominee of the Holding Company) as owner and Petredec as bareboat
charterer;
"LYNE BAREBOAT CHARTER PERIOD" means the period during which "LYNE" is
operating the Lyne Bareboat Charter;
10
"LYNE MOA" means a memorandum of agreement in relation to "LYNE" dated
27 April 2006 and made between Xxxxxxxxx and the Seller thereof;
"LYNE TRIPARTITE AGREEMENT" means an agreement dealing with (inter
alia) the operation of "LYNE" during the Lyne Bareboat Charter Period,
made or to be made between (i) Oxfordgas, (ii) Petredec and (iii) the
Lender, in such form as the Lender may approve or require;
"MAJOR CASUALTY" means, in relation to a Ship, any casualty to the Ship
in respect of which the claim or the aggregate of the claims against
all insurers, before adjustment for any relevant franchise or
deductible, exceeds $1,000,000 or the equivalent in any other currency;
"MARGIN" means, at any time when the Debt to Value Ratio is:
(a) equal to or lower than 67 per cent., 0.75 per cent. per annum;
or
(b) higher than 67 per cent. and lower or equal to 77 per cent.,
0.8 per cent. per annum; or
(c) higher than 77 per cent., 0.9 per cent per annum;
"MARKET VALUE" means the market value of a Ship at any date determined
in accordance with Clause 14.3;
"MASTER AGREEMENT" means the master agreement (on the 1992 ISDA
(Multicurrency - Crossborder) form) made or to be made between the
Borrowers and the Lender and includes all Transactions from time to
time entered into and Confirmations from time to time exchanged
thereunder;
"MASTER AGREEMENT ASSIGNMENT" means the assignment of the Master
Agreement in favour of the Lender executed or to be executed by the
Borrowers, in such form as the Lender may approve or require;
"MATRIX" means Matrix Gas Trading Ltd. a corporation company
incorporated and existing under the laws of the Xxxxxxxx Islands and
having its registered office at Trust Company Complex, Ajeltake Road,
Ajeltake Island, Majuro, The Xxxxxxxx Islands, MH96960;
"MOAS" means, together, the Sir Xxxx XXX, the Lyne MOA and the Gas
Nemesis MOA, and in the singular, means any of them;
"MORTGAGE" means:
(a) in the case of "GAS EMPEROR", a first priority Cypriot
mortgage to be executed by Pacific;
(b) in the case of "GAS ICE", a first priority Maltese mortgage to
be executed by Xxxxxxxxxx;
(c) in the case of "GAS ARCTIC", a first priority Maltese mortgage
to be executed by Ventspils;
(d) in the case of "XXXXXX XXXXX", a first preferred Panamanian
mortgage to be executed by Industrial;
11
(e) in the case of "GAS COURCHEVEL", a first preferred Xxxxxxxx
Islands mortgage to be executed by Geneve;
(f) in the case of "GAS SHANGHAI", a first preferred Xxxxxxxx
Islands mortgage to be executed by Xxxxxx;
(g) in the case of "GAS PROPHET", a first preferred Xxxxxxxx
Islands mortgage to be executed by VCM;
(h) in the case of "GAS TINY", a first preferred Xxxxxxxx Islands
mortgage to be executed by Xxxxxx;
(i) in the case of "GAS AMAZON", a first preferred Xxxxxxxx
Islands mortgage to be executed by Xxxxxxx;
(j) in the case of "XXX XXXX", a first priority Hong Kong mortgage
to be executed by Xxxxxxxxx;
(k) in the case of "LYNE", a first preferred Panamanian mortgage
to be executed by Xxxxxxxxx; and
(l) in the case of "GAS NEMESIS", a first preferred Panamanian
mortgage to be executed by Xxxxx,
each to be executed in favour of the Lender and to be in such form as
the Lender may approve or require and in the singular means any of
them;
"NEGOTIATION PERIOD" has the meaning given in Clause 4.6;
"NET TOTAL DEBT" means, at any relevant time, Total Debt less the
amount of any Unencumbered Cash;
"NEW SHIP ADVANCE" means, in relation to a New Ship, the Advance to be
used in financing the whole or, as the case may be, part of the
Purchase Price of that New Ship pursuant to the MOA for the New Ship,
such Advance to be made available in accordance with and pursuant to
Clauses 2.2 and 3.2(c);
"NEW SHIPOWNERS" means, together, Oxfordgas, Energetic and Ocean, each
in its capacity as the registered owner of a New Ship, and , in the
singular, means any of them;
"NEW SHIPS" means, together, "SIR IVOR", "LYNE" and "GAS NEMESIS" and
in the singular means any of them;
"OCEAN" means Ocean Blue Limited, a corporation incorporated in the
Xxxxxxxx Islands and having its registered office at Trust Company
Complex, Ajeltake Road, Ajeltake Island, Majuro, Xxxxxxxx Islands,
MH96960;
"OXFORDGAS" means Oxfordgas Limited, a corporation incorporated in the
Xxxxxxxx Islands and having its registered office at Trust Company
Complex, Ajeltake Road, Ajeltake Island, Majuro, Xxxxxxxx Islands,
MH96960;
"PACIFIC" means Pacific Gases Ltd. a company incorporated and existing
under the laws of Malta and having its registered office at 000/0 Xx.
Xxxxx Xxxxxx, Xxxxxxxx, Xxxxx;
"PAYMENT CURRENCY" has the meaning given in Clause 20.4;
12
"PERMITTED SECURITY INTERESTS" means:
(a) Security Interests created by the Finance Documents;
(b) liens for unpaid master's and crew's wages in accordance with
usual maritime practice;
(c) liens for salvage;
(d) liens arising by operation of law for not more than 2 months'
prepaid hire under any charter in relation to a Ship not
prohibited by this Agreement;
(e) liens for master's disbursements incurred in the ordinary
course of trading and any other lien arising by operation of
law or otherwise in the ordinary course of the operation,
repair or maintenance of a Ship, provided such liens do not
secure amounts more than 30 days overdue (unless the overdue
amount is being contested by the Borrower in good faith by
appropriate steps) and subject, in the case of liens for
repair or maintenance, to Clause 13.12(g);
(f) any Security Interest created in favour of a plaintiff or
defendant in any proceedings or arbitration as security for
costs and expenses where the Borrower is actively prosecuting
or defending such proceedings or arbitration in good faith;
and
(g) Security Interests arising by operation of law in respect of
taxes which are not overdue for payment or in respect of taxes
being contested in good faith by appropriate steps and in
respect of which appropriate reserves have been made;
"PERTINENT DOCUMENT" means:
(a) any Finance Document;
(b) any policy or contract of insurance contemplated by or
referred to in Clause 12 or any other provision of this
Agreement or another Finance Document;
(c) any other document contemplated by or referred to in any
Finance Document; and
(d) any document which has been or is at any time sent by or to
the Lender in contemplation of or in connection with any
Finance Document or any policy, contract or document falling
within paragraphs (b) or (c);
"PERTINENT JURISDICTION", in relation to a company, means:
(a) England and Wales;
(b) the country under the laws of which the company is
incorporated or formed;
(c) a country in which the company's central management and
control is or has recently been exercised;
(d) a country in which the overall net income of the company is
subject to corporation tax, income tax or any similar tax;
(e) a country in which assets of the company (other than
securities issued by, or loans to, related companies) having a
substantial value are situated, in which the company maintains
a permanent place of business, or in which a Security Interest
created by
13
the company must or should be registered in order to ensure
its validity or priority; and
(f) a country the courts of which have jurisdiction to make a
winding up, administration or similar order in relation to the
company or which would have such jurisdiction if their
assistance were requested by the courts of a country referred
to in paragraphs (b) or (c) above;
"PERTINENT MATTER" means:
(a) any transaction or matter contemplated by, arising out of, or
in connection with a Pertinent Document; or
(b) any statement relating to a Pertinent Document or to a
transaction or matter falling within paragraph (a),
and covers any such transaction, matter or statement, whether entered
into, arising or made at any time before the signing of this Agreement
or on or at any time after that signing;
"PETREDEC" means Petredec S.A., a company incorporated and existing
under the laws of Bermuda;
"POTENTIAL EVENT OF DEFAULT" means an event or circumstance which, with
the giving of any notice, the lapse of time, a determination of the
Lender and/or the satisfaction of any other condition, would constitute
an Event of Default;
"PURCHASE PRICE" means, in relation to a Ship, the aggregate amount
paid or to be paid by the relevant Shipowner to the seller of the Ship
pursuant to the memorandum of agreement which relates to the sale and
purchase of that Ship;
"QUOTATION DATE" means, in relation to any Interest Period (or any
other period for which an interest rate is to be determined under any
provision of a Finance Document), the day on which quotations would
ordinarily be given by leading banks in the London Interbank Market for
deposits in the currency in relation to which such rate is to be
determined for delivery on the first day of that Interest Period or
other period;
"REFINANCING ADVANCE" means an amount of $46,349,250 which is to be
used in refinancing the Existing Indebtedness and which is to be made
available in accordance with and pursuant to Clauses 2.2 and 3.2(b);
"RELEVANT PERSON" has the meaning given in Clause 18.7;
"REPAYMENT DATE" means a date on which a repayment is required to be
made under Clause 7;
"RETENTION ACCOUNT" means an account in the joint names of the
Borrowers with the Lender in Athens designated "Stealthgas Inc. -
Retention Account" and having account number 1000120203, or any other
account (with that or another office of the Lender) which is designated
by the Lender as the Retention Account for the purposes of this
Agreement;
"REQUISITION COMPENSATION" includes all compensation or other moneys
payable by reason of any act or event such as is referred to in
paragraph (b) of the definition of "Total Loss";
14
"SECURED LIABILITIES" means all liabilities which the Borrowers, the
Security Parties or any of them have, at the date of this Agreement or
at any later time or times, under or in connection with any Finance
Document or any judgment relating to any Finance Document; and for this
purpose, there shall be disregarded any total or partial discharge of
these liabilities, or variation of their terms, which is effected by,
or in connection with, any bankruptcy, liquidation, arrangement or
other procedure under the insolvency laws of any country;
"SECURITY INTEREST" means:
(a) a mortgage, charge (whether fixed or floating) or pledge, any
maritime or other lien or any other security interest of any
kind;
(b) the security rights of a plaintiff under an action in rem; and
(c) any arrangement entered into by a person (A) the effect of
which is to place another person (B) in a position which is
similar, in economic terms, to the position in which B would
have been had he held a security interest over an asset of A;
but this paragraph (c) does not apply to a right of set off or
combination of accounts conferred by the standard terms of
business of a bank or financial institution;
"SECURITY PARTY" means each Shareholder and any other person (except
the Lender) who, as a surety or mortgagor, as a party to any
subordination or priorities arrangement, or in any similar capacity,
executes a document falling within the last paragraph of the definition
of "Finance Documents";
"SECURITY PERIOD" means the period commencing on the date of this
Agreement and ending on the date on which the Lender notifies the
Borrowers and the Security Parties that:
(a) all amounts which have become due for payment by any Borrower
or any Security Party under the Finance Documents have been
paid;
(b) no amount is owing or has accrued (without yet having become
due for payment) under any Finance Document;
(c) neither any Borrower nor any Security Party has any future or
contingent liability under Clause 19, 20, or 21 or any other
provision of this Agreement or another Finance Document; and
(d) the Lender does not consider that there is a significant risk
that any payment or transaction under a Finance Document would
be set aside, or would have to be reversed or adjusted, in any
present or possible future bankruptcy of a Borrower or a
Security Party or in any present or possible future proceeding
relating to a Finance Document or any asset covered (or
previously covered) by a Security Interest created by a
Finance Document;
"SELLER" means, in the case of:
(a) "SIR IVOR", Forli Shipping Inc. of Panama City, Panama;
(b) "LYNE", Lyne Shipping Limited of the Xxxxxxxx Islands; and
(c) "GAS NEMESIS", Duck Marine S.A. of Panama City, Panama,
and in the plural means all of them;
15
"SEMICHLAUS" means Semichlaus Exports Ltd., a company incorporated and
existing under the laws of Malta having its registered office at 000/0
Xx Xxxxx Xx., Xxxxxxxx, Xxxxx;
"SHIPOWNERS" means, together, the Existing Shipowners and the New
Shipowners and in the singular means any of them;
"SHAREHOLDER" means, in relation to a Borrower, the company referred to
in Schedule 2 as the holder of all, or a part of the issued share
capital of that Borrower;
"SHIPS" means, together, the Existing Ships and the New Ships and in
the singular means any of them;
"XXX XXXX" means the 2003-built LPG Carrier of 5,000 cubic metres
currently registered under the Hong Kong flag in the ownership of the
Seller thereof with the name "SIR IVOR" which is to be acquired by
Energetic pursuant to the Sir Xxxx XXX and registered in its ownership
under the Hong Kong flag with the same name;
"XXX XXXX XXXXXXXX CHARTER" means the bareboat charterparty in relation
to "XXX XXXX" dated 27 April 2006 and entered in to between Energetic
(as the nominee of the Holding Company) as owner and Petredec as
bareboat charterer;
"XXX XXXX XXXXXXXX CHARTER PERIOD" means the period during which "SIR
IVOR" is operating the Sir Ivor Bareboat Charter;
"XXX XXXX XXX" means a memorandum of agreement in relation to "SIR
IVOR" dated 27 April 2006 and made between Energetic (as the nominee of
the Holding Company) and the Seller thereof;
"SIR IVOR TRIPARTITE AGREEMENT" means an agreement dealing with (inter
alia) the operation of "SIR IVOR" during the Sir Ivor Bareboat Charter
Period, made or to be made between (i) Energetic, (ii) Petredec and
(iii) the Lender, in such form as the Lender may approve or require;
"STEALTH" means Stealth Maritime Corporation S.A., a corporation
incorporated and existing under the laws of the Republic of Liberia and
having its registered office at 00 Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxx;
"STEALTHGAS" means Stealthgas Inc., a corporation incorporated and
existing under the laws of the Xxxxxxxx Islands and having its
registered office at Trust Company Complex, Ajeltake Road, Ajeltake
Island, Majuro, the Xxxxxxxx Islands, MH96960;
"SWAP EXPOSURE" means, as at any relevant date the aggregate net amount
in Dollars which would be payable by the Borrowers to the Lender under
(and calculated in accordance with) section 6(e) (Payments on Early
Termination) of the Master Agreement if an Early Termination Date had
occurred on the relevant date in relation to all continuing
Transactions entered into between the Borrowers and the Lender;
"TOTAL LIABILITIES" means, as at any date, the total liabilities (but
excluding any amount in respect of Total Shareholder's Equity) of the
Group determined in accordance with, and as shown in, the most recent
Accounting Information;
"TOTAL MARKET ADJUSTED ASSETS" means, at any time, the total assets
(net of Unencumered Cash) of the Group as shown in the most recent
Accounting Information
16
adjusted to reflect the market value of all vessels owned by members of
the Group, as determined by valuations in accordance with Clause 14.4
as at any relevant date;
"TOTAL LOSS" means in relation to a Ship:
(a) actual, constructive, compromised, agreed or arranged total
loss of the Ship;
(b) any expropriation, confiscation, requisition or acquisition of
the Ship, whether for full consideration, a consideration less
than its proper value, a nominal consideration or without any
consideration, which is effected by any government or official
authority or by any person or persons claiming to be or to
represent a government or official authority (excluding a
requisition for hire for a fixed period not exceeding 1 year
without any right to an extension) unless it is within 1 month
redelivered to the full control of the Shipowner owning the
Ship;
(c) any arrest, capture, seizure or detention of the Ship
(including any hijacking or theft) unless it is within 30 days
redelivered to the full control of the Shipowner owning the
Ship;
"TOTAL LOSS DATE" means in relation to a Ship:
(a) in the case of an actual loss of the Ship, the date on which
it occurred or, if that is unknown, the date when the Ship was
last heard of;
(b) in the case of a constructive, compromised, agreed or arranged
total loss of the Ship, the earliest of:
(i) the date on which a notice of abandonment is given to
the insurers; and
(ii) the date of any compromise, arrangement or agreement
made by or on behalf of the Shipowner owning the Ship
with the Ship's insurers in which the insurers agree
to treat the Ship as a total loss; and
(c) in the case of any other type of total loss, on the date (or
the most likely date) on which it appears to the Lender that
the event constituting the total loss occurred;
"TOTAL SHAREHOLDER'S EQUITY" means, at any date, the total
shareholder's equity of the Group determined in accordance with, and as
shown in, the most recent Accounting Information;
"TRANSACTION" has the meaning given in the Master Agreement;
"TRIPARTITE AGREEMENTS" means, together the Gas Arctic Tripartite
Agreement, the Gas Ice Tripartite Agreement, the Sir Ivor Tripartite
Agreement and the Lyne Tripartite Agreement and in the singular means
any of them;
"UNENCUMBERED CASH" means any cash or cash equivalent owned by the
Guarantor or any member of the Group which is not subject to a Security
Interest;
"UNIGAS KOSAN" means Unigas Kosan Ltd., a company incorporated and
existing under the laws of Hong Kong having its registered office at
0000 Xxxxxxxx Xxxxxx, 00 Xxxxx'x Xxxx, Xxxx Xxxxxxx, Xxxx Xxxx;
17
"VCM" means VCM Trading Ltd., a corporation incorporated and existing
under the laws of the Xxxxxxxx Islands and having its registered office
at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro,
Xxxxxxxx Islands, MH96960; and
"VENTSPILS" means Ventspils Gases Ltd., a company incorporated and
existing under the laws of Malta and having its registered office is at
000/0 Xx. Xxxxx Xxxxxx, Xxxxxxxx, Xxxxx.
1.2 CONSTRUCTION OF CERTAIN TERMS. In this Agreement:
"APPROVED" means, for the purposes of Clause 12, approved in writing by
the Lender;
"ASSET" includes every kind of property, asset, interest or right,
including any present, future or contingent right to any revenues or
other payment;
"COMPANY" includes any partnership, joint venture and unincorporated
association;
"CONSENT" includes an authorisation, consent, approval, resolution,
licence, exemption, filing, registration, notarisation and
legalisation;
"CONTINGENT LIABILITY" means a liability which is not certain to arise
and/or the amount of which remains unascertained;
"DOCUMENT" includes a deed; also a letter or fax;
"EXCESS RISKS" means, in relation to a Ship, 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 its insured value being less than the value at which the Ship is
assessed for the purpose of such claims;
"EXPENSE" means any kind of cost, charge or expense (including all
legal costs, charges and expenses) and any applicable value added or
other tax;
"LAW" includes any order or decree, any form of delegated legislation,
any treaty or international convention and any regulation or resolution
of the Council of the European Union, the European Commission, the
United Nations or its Security Council;
"LEGAL OR ADMINISTRATIVE ACTION" means any legal proceeding or
arbitration and any administrative or regulatory action or
investigation;
"LIABILITY" includes every kind of debt or liability (present or
future, certain or contingent), whether incurred as principal or surety
or otherwise;
"MONTHS" shall be construed in accordance with Clause 1.3;
"OBLIGATORY INSURANCES" means, in relation to a Ship, all insurances
effected, or which the Borrower owning the Ship is obliged to effect,
under Clause 12 or any other provision of this Agreement or another
Finance Document;
"PARENT COMPANY" has the meaning given in Clause 1.4;
"PERSON" includes any company; any state, political sub-division of a
state and local or municipal authority; and any international
organisation;
"POLICY", in relation to any insurance, includes a slip, cover note,
certificate of entry or other document evidencing the contract of
insurance or its terms;
18
"PROTECTION AND INDEMNITY RISKS" means the usual risks covered by a
protection and indemnity association managed in London, including
pollution risks and the proportion (if any) of any sums payable to any
other person or persons in case of collision which are not recoverable
under the hull and machinery policies by reason of the incorporation in
them of clause 1 of the Institute Time Clauses (Hulls)(1/10/83) or
clause 8 of the Institute Time Clauses (Hulls)(1/11/1995) or the
Institute Amended Running Down Clause (1/10/71) or any equivalent
provision;
"REGULATION" includes any regulation, rule, official directive, request
or guideline whether or not having the force of law of any
governmental, intergovernmental or supranational body, agency,
department or regulatory, self-regulatory or other authority or
organisation;
"SUBSIDIARY" has the meaning given in Clause 1.4;
"TAX" includes any present or future tax, duty, impost, levy or charge
of any kind which is imposed by any state, any political sub-division
of a state or any local or municipal authority (including any such
imposed in connection with exchange controls), and any connected
penalty, interest or fine; and
"WAR RISKS" includes the risk of mines and all risks excluded by clause
23 of the Institute Time Clauses (Hulls)(1/10/83) or clause 24 of the
Institute Time Clauses (Hulls)(1/11/1995).
1.3 MEANING OF "MONTH". A period of one or more "MONTHS" ends on the day in
the relevant calendar month numerically corresponding to the day of the
calendar month on which the period started ("THE NUMERICALLY
CORRESPONDING DAY"), but:
(a) on the Business Day following the numerically corresponding day if the
numerically corresponding day is not a Business Day or, if there is no
later Business Day in the same calendar month, on the Business Day
preceding the numerically corresponding day; or
(b) on the last Business Day in the relevant calendar month, if the period
started on the last Business Day in a calendar month or if the last
calendar month of the period has no numerically corresponding days,
and "MONTH" and "MONTHLY" shall be construed accordingly.
1.4 MEANING OF "SUBSIDIARY". A company (S) is a subsidiary of another
company (P) if:
(a) a majority of the issued shares in S (or a majority of the issued
shares in S which carry unlimited rights to capital and income
distributions) are directly owned by P or are indirectly attributable
to P; or
(b) P has direct or indirect control over a majority of the voting rights
attaching to the issued shares of S; or
(c) P has the direct or indirect power to appoint or remove a majority of
the directors of S; or
(d) P otherwise has the direct or indirect power to ensure that the affairs
of S are conducted in accordance with the wishes of P,
and any company of which S is a subsidiary is a parent company of S.
1.5 GENERAL INTERPRETATION. In this Agreement:
19
(a) references in Clause 1.1 to a Finance Document or any other document
being in the form of a particular appendix include references to that
form with any modifications to that form which the Lender approves or
reasonably requires;
(b) references to, or to a provision of, a Finance Document or any other
document are references to it as amended or supplemented, whether
before the date of this Agreement or otherwise;
(c) references to, or to a provision of, any law include any amendment,
extension, re-enactment or replacement, whether made before the date of
this Agreement or otherwise;
(d) words denoting the singular number shall include the plural and vice
versa; and
(e) Clauses 1.1 to 1.5 apply unless the contrary intention appears.
1.6 HEADINGS. In interpreting a Finance Document or any provision of a
Finance Document, all clause, sub-clause and other headings in that and
any other Finance Document shall be entirely disregarded.
2 FACILITY
2.1 AMOUNT OF FACILITY. Subject to the other provisions of this Agreement,
the Lender shall make a loan facility of up to the lesser of (a)
$79,850,000 and (b) 62 per cent. of the aggregate Market Value of the
Ships, available to the Borrowers in up to 4 Advances.
2.2 PURPOSE OF ADVANCES. The Borrowers undertake with the Lender to use
each Advance only for the purpose stated in the preamble to this
Agreement.
3 DRAWDOWN
3.1 REQUEST FOR ADVANCE. Subject to the following conditions, the Borrowers
may request an Advance or Advances to be made by ensuring that the
Lender receives a completed Drawdown Notice not later than 11.00 a.m.
(Athens time) 2 Business Days prior to the intended Drawdown Date.
3.2 AVAILABILITY. The conditions referred to in Clause 3.1 are that:
(a) a Drawdown Date has to be a Business Day during the Availability
Period;
(b) the Refinancing Advance shall be applied in fully repaying the Existing
Indebtedness;
(c) each New Ship Advance shall be applied in financing the whole (or, in
the case of the New Ship Advance in respect of "GAS NEMESIS", 64.77 per
cent.) of the Purchase Price of the New Ship which is to be financed by
that New Ship Advance; and
(d) the aggregate amount of the Advances shall not exceed the lesser of (i)
Commitment and (ii) 62 per cent. of the aggregate Market Values of the
Ships.
3.3 DRAWDOWN NOTICE IRREVOCABLE. A Drawdown Notice must be signed by a
director or other authorised person of a Borrower; and once served, a
Drawdown Notice cannot be revoked without the prior consent of the
Lender.
3.4 DISBURSEMENT OF ADVANCE. Subject to the provisions of this Agreement,
the Lender shall on each Drawdown Date make available the relevant
Advance to the Borrowers;
20
and payment to the Borrowers shall be made to the account which the
Borrowers specify in the relevant Drawdown Notice.
3.5 DISBURSEMENT OF ADVANCE TO THIRD PARTY. The payment of an Advance by
the Lender under Clause 3.4 shall constitute the making of the Advance
and the Borrowers shall at that time become indebted, as principal and
direct obligors, to the Lender in an amount equal to that Advance.
4 INTEREST
4.1 PAYMENT OF NORMAL INTEREST. Subject to the provisions of this
Agreement, interest on the Loan in respect of each Interest Period
shall be paid by the Borrowers on the last day of that Interest Period.
4.2 NORMAL RATE OF INTEREST. Subject to the provisions of this Agreement,
the rate of interest on the Loan in respect of an Interest Period shall
be the aggregate of the Margin and LIBOR for that Interest Period.
4.3 PAYMENT OF ACCRUED INTEREST. In the case of an Interest Period longer
than 3 months, accrued interest shall be paid every 3 months during
that Interest Period and on the last day of that Interest Period.
4.4 NOTIFICATION OF MARKET DISRUPTION. The Lender shall promptly notify the
Borrowers if no rate is quoted on Reuters BBA Page LIBOR 01 or if for
any reason the Lender is unable to obtain Dollars in the London
Interbank Market in order to fund the Loan (or any part of it) during
any Interest Period, stating the circumstances which have caused such
notice to be given.
4.5 SUSPENSION OF DRAWDOWN. If the Lender's notice under Clause 4.4 is
served before an Advance is made, the Lender's obligation to make the
Advance shall be suspended while the circumstances referred to in the
Lender's notice continue.
4.6 NEGOTIATION OF ALTERNATIVE RATE OF INTEREST. If the Lender's notice
under Clause 4.4 is served after an Advance is made, the Borrowers and
the Lender shall use reasonable endeavours to agree, within the 30 days
after the date on which the Lender serves its notice under Clause 4.4
(the "NEGOTIATION PERIOD"), an alternative interest rate or (as the
case may be) an alternative basis for the Lender to fund or continue to
fund the Loan during the Interest Period concerned.
4.7 APPLICATION OF AGREED ALTERNATIVE RATE OF INTEREST. Any alternative
interest rate or an alternative basis which is agreed during the
Negotiation Period shall take effect in accordance with the terms
agreed.
4.8 ALTERNATIVE RATE OF INTEREST IN ABSENCE OF AGREEMENT. If an alternative
interest rate or alternative basis is not agreed within the Negotiation
Period, and the relevant circumstances are continuing at the end of the
Negotiation Period, then the Lender shall set an interest period and
interest rate representing the cost of funding of the Lender in Dollars
or in any available currency of the Loan plus the applicable Margin;
and the procedure provided for by this Clause 4.8 shall be repeated if
the relevant circumstances are continuing at the end of the interest
period so set by the Lender.
4.9 NOTICE OF PREPAYMENT. If the Borrowers do not agree with an interest
rate set by the Lender under Clause 4.8, the Borrowers may give the
Lender not less than 10 Business Days' notice of their intention to
prepay at the end of the interest period set by the Lender.
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4.10 PREPAYMENT. A notice under Clause 4.9 shall be irrevocable; and on the
last Business Day of the interest period set by the Lender, the
Borrowers shall prepay (without premium or penalty) the Loan, together
with accrued interest thereon at the applicable rate plus the Margin.
4.11 APPLICATION OF PREPAYMENT. The provisions of Clause 7 shall apply in
relation to the prepayment.
4.12 CALCULATION OF DEBT TO VALUE RATIO. The Lender shall calculate the Debt
to Value Ratio on (a) the earlier of (i) the Drawdown Date for the
final Advance and (ii) 30 June 2006 and (b) every 6 months thereafter
(each a "REVIEW DATE") for the purposes of calculating the Margin and
shall advise the Borrowers in writing within 10 Business Days of each
Review Date of the Margin which will apply for the 6-month period
commencing on the relevant Review Date PROVIDED THAT in respect of each
Review Date other than the first Review Date, the Lender shall only be
obliged to advise the Borrowers of the Margin which will apply for the
6-month period commencing on the relevant Review Date if that Margin
will be different to the Margin which applied immediately prior to the
relevant Review Date.
5 INTEREST PERIODS
5.1 COMMENCEMENT OF INTEREST PERIODS. The first Interest Period applicable
to an Advance shall commence on the Drawdown Date relative to that
Advance and each subsequent Interest Period shall commence on the
expiry of the preceding Interest Period.
5.2 DURATION OF NORMAL INTEREST PERIODS. Subject to Clauses 5.3 and 5.4,
each Interest Period shall be:
(a) 1, 3, 6, 9 or 12 months as notified by the Borrowers to the Lender not
later than 11.00 a.m. (Athens time) 2 Business Days before the
commencement of the Interest Period PROVIDED THAT the Borrowers may not
select more than three 1 month Interest Periods in any calendar year
unless otherwise agreed by the Lender; or
(b) in the case of the first Interest Period applicable to the second and
any subsequent Advance, a period ending on the last day of the Interest
Period applicable to the Advances then current, whereupon all Advances
shall be consolidated and treated as a single Advance; or
(c) 3 months, if the Borrowers fail to notify the Lender by the time
specified in paragraph (a); or
(d) such other period as the Lender may agree with the Borrowers.
5.3 DURATION OF INTEREST PERIODS FOR REPAYMENT INSTALMENTS. In respect of
an amount due to be repaid under Clause 7 on a particular Repayment
Date, an Interest Period shall end on that Repayment Date.
5.4 NON-AVAILABILITY OF MATCHING DEPOSITS FOR INTEREST PERIOD SELECTED. If,
after the Borrowers have selected and the Lender has agreed an Interest
Period longer than 6 months, the Lender notifies the Borrowers by 11.00
a.m. (London time) on the third Business Day before the commencement of
the Interest Period that it is not satisfied that deposits in Dollars
for a period equal to the Interest Period will be available to it in
the London Interbank Market when the Interest Period commences, the
Interest Period shall be of 6 months.
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6 DEFAULT INTEREST
6.1 PAYMENT OF DEFAULT INTEREST ON OVERDUE AMOUNTS. The Borrowers shall pay
interest in accordance with the following provisions of this Clause 6
on any amount payable by the Borrowers under any Finance Document which
the Lender does not receive on or before the relevant date, that is:
(a) the date on which the Finance Documents provide that such amount is due
for payment; or
(b) if a Finance Document provides that such amount is payable on demand,
the date on which the demand is served; or
(c) if such amount has become immediately due and payable under Clause
18.4, the date on which it became immediately due and payable.
6.2 DEFAULT RATE OF INTEREST. Interest shall accrue on an overdue amount
from (and including) the relevant date until the date of actual payment
(as well after as before judgment) at the rate per annum determined by
the Lender to be 2 per cent. above:
(a) in the case of an overdue amount of principal, the higher of the rates
set out at Clauses 6.3(a) and (b); or
(b) in the case of any other overdue amount, the rate set out at Clause
6.3(b).
6.3 CALCULATION OF DEFAULT RATE OF INTEREST. The rates referred to in
Clause 6.2 are:
(a) the rate applicable to the overdue principal amount immediately prior
to the relevant date (but only for any unexpired part of any then
current Interest Period applicable to it);
(b) the applicable Margin plus, in respect of successive periods of any
duration (including at call) up to 3 months which the Lender may select
from time to time:
(i) LIBOR; or
(ii) if the Lender determines that Dollar deposits for any such
period are not being made available to it by leading banks in
the London Interbank Market in the ordinary course of
business, a rate from time to time determined by the Lender by
reference to the cost of funds to it from such other sources
as the Lender may from time to time determine.
6.4 NOTIFICATION OF INTEREST PERIODS AND DEFAULT RATES. The Lender shall
promptly notify the Borrowers of each interest rate determined by it
under Clause 6.3 and of each period selected by it for the purposes of
paragraph (b) of that Clause; but this shall not be taken to imply that
the Borrowers are liable to pay such interest only with effect from the
date of the Lender's notification.
6.5 PAYMENT OF ACCRUED DEFAULT INTEREST. Subject to the other provisions of
this Agreement, any interest due under this Clause shall be paid on the
last day of the period by reference to which it was determined.
6.6 COMPOUNDING OF DEFAULT INTEREST. Any such interest which is not paid at
the end of the period by reference to which it was determined shall
thereupon be compounded.
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6.7 APPLICATION TO MASTER AGREEMENT. For the avoidance of doubt this Clause
6 does not apply to any amount payable under the Master Agreement in
respect of any continuing Transaction as to which section 2(e) (Default
Interest, Other Amounts) of the Master Agreement shall apply.
7 REPAYMENT AND PREPAYMENT
7.1 AMOUNT OF REPAYMENT INSTALMENTS. The Borrowers shall repay the Loan by:
(a) 40 equal consecutive three-monthly instalments, of in the case of:
(i) the first to fourth (inclusive) such instalments, $2,200,000
each;
(ii) the fifth to twelfth (inclusive) such instalments, $1,640,000
each; and
(iii) the thirteenth to fortieth (inclusive) such instalments,
$1,560,000 each; and
(b) a balloon instalment (the "BALLOON INSTALMENT") of $14,250,000 (as such
amount may be increased through the operation of Clause 7.10).
7.2 REPAYMENT DATES. The first instalment shall be repaid on 31 August
2006, each subsequent instalment shall be repaid at 3-monthly intervals
with the final instalment, together with the Balloon Instalment, being
repaid on 31 May 2016.
7.3 FINAL REPAYMENT DATE. On the final Repayment Date, the Borrowers shall
additionally pay to the Lender all other sums then accrued or owing
under any Finance Document.
7.4 VOLUNTARY PREPAYMENT. Subject to the following conditions, the
Borrowers may prepay the whole or any part of the Loan on the last day
of an Interest Period.
7.5 CONDITIONS FOR VOLUNTARY PREPAYMENT. The conditions referred to in
Clause 7.4 are that:
(a) a partial prepayment shall be $500,000 or a multiple of $500,000;
(b) the Lender has received from the Borrowers at least 5 days' prior
written notice specifying the amount to be prepaid and the date on
which the prepayment is to be made; and
(c) the Borrowers have provided evidence satisfactory to the Lender that
any consent required by any Borrower or any Security Party in
connection with the prepayment has been obtained and remains in force,
and that any regulation relevant to this Agreement which affects any
Borrower or any Security Party has been complied with.
7.6 EFFECT OF NOTICE OF PREPAYMENT. A prepayment notice may not be
withdrawn or amended without the consent of the Lender and the amount
specified in the prepayment notice shall become due and payable by the
Borrowers on the date for prepayment specified in the prepayment
notice.
7.7 MANDATORY PREPAYMENT. Without prejudice to the provisions of Clause 14,
the Borrowers shall be obliged to prepay the relevant proportion of the
Loan if a Ship is sold or becomes a Total Loss:
(a) in the case of a sale, on or before the date on which the sale is
completed by delivery of the Ship to the buyer; or
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(b) in the case of a Total Loss, on the earlier of the date falling 150
days after the Total Loss Date and the date of receipt by the Security
Trustee of the proceeds of insurance relating to such Total Loss,
and in this Clause 7.7 "RELEVANT PROPORTION" means such amount
necessary to ensure that following the sale or Total Loss of a Ship,
the Asset Cover Ratio is equal to the Asset Cover Ratio immediately
prior to the sale or Total Loss (as the case may be) of that Ship.
7.8 AMOUNTS PAYABLE ON PREPAYMENT. A prepayment shall be made together with
accrued interest (and any other amount payable under Clause 20 or
otherwise) in respect of the amount prepaid and, if the prepayment is
not made on the last day of an Interest Period together with any sums
payable under Clause 20.1(b) but without premium or penalty.
7.9 APPLICATION OF PARTIAL PREPAYMENT. Each partial prepayment shall be
applied pro rata against the repayment instalments, including, without
limitation, the balloon instalment, specified in Clause 7.1.
7.10 DEFERRAL OPTION. The Borrowers may elect to defer the repayment of up
to one third of any six repayment instalments falling due after the
Repayment Date in relation to the thirteenth repayment instalment
subject to the following terms and conditions:
(a) the Borrowers shall have sent to the Lender a notice at least 10 days
prior to the Repayment Date relative to the repayment instalment the
payment of part of which the Borrowers are electing to defer specifying
the amount to be deferred (which amount shall not exceed one third of
the relevant repayment instalment);
(b) no Event of Default (i) has occurred or is continuing either at the
date of the Borrowers' request or on the Repayment Date on which the
deferred instalment was due and payable or (ii) will result from the
deferral of the relevant repayment instalment; and
(c) each part of a repayment instalment which is deferred (which shall not
exceed, when added to the parts of all other repayment instalments
which have been deferred, $3,120,000 in aggregate) shall be added to
the Balloon Instalment which shall be increased by such amount.
7.11 NO REBORROWING. No amount prepaid may be reborrowed.
8 CONDITIONS PRECEDENT
8.1 DOCUMENTS, FEES AND NO DEFAULT. The Lender's obligation to make an
Advance is subject to the following conditions precedent:
(a) that, on or before the service of the first Drawdown Notice, the Lender
receives the documents described in Part A of Schedule 4, in form and
substance satisfactory to it and its lawyers;
(b) that, on the Drawdown Date in respect of the Refinancing Advance but
prior to the making of that Advance, the Lender receives the documents
described in Part B of Schedule 4, in form and substance satisfactory
to it and its lawyers;
(c) that, on the Drawdown Date relating to a New Ship Advance but prior to
the making of that Advance, the Lender receives the documents described
in Part C of Schedule 4, in form and substance satisfactory to it and
its lawyers;
25
(d) that, before the service of the first Drawdown Notice, the Lender
receives the arrangement fee referred to in Clause 19.1 and has
received payment of the expenses referred to in Clause 19.2; and
(e) that both at the date of each Drawdown Notice and at each Drawdown
Date:
(i) no Event of Default or Potential Event of Default has occurred
and is continuing or would result from the borrowing of the
relevant Advance;
(ii) the representations and warranties in Clause 9.1 and those of
any Borrower or any Security Party which are set out in the
other Finance Documents would be true and not misleading if
repeated on each of those dates with reference to the
circumstances then existing; and
(iii) none of the circumstances contemplated by Xxxxxx 4.4 has
occurred and is continuing; and
(f) that, if the ratio set out in Clause 14.1 were applied immediately
following the making of any Advance, the Borrowers would not be obliged
to provide additional security or prepay part of the Loan under that
Clause; and
(g) that the Lender has received, and found to be acceptable to it, any
further opinions, consents, agreements and documents in connection with
the Finance Documents which the Lender may request by notice to the
Borrowers prior to the relevant Drawdown Date.
8.2 WAIVERS OF CONDITIONS PRECEDENT. If the Lender, at its discretion,
permits an Advance to be borrowed before certain of the conditions
referred to in Clause 8.1 are satisfied, the Borrowers shall ensure
that those conditions are satisfied within 20 Business Days after the
relevant Drawdown Date (or such longer period as the Lender may
specify).
9 REPRESENTATIONS AND WARRANTIES
9.1 GENERAL. Each Borrower represents and warrants to the Lender as
follows.
9.2 STATUS. Each Borrower is duly incorporated and validly existing and in
good standing under the laws of its place of incorporation as indicated
in Schedule 2.
9.3 SHARE CAPITAL AND OWNERSHIP. Each Borrower has an authorised and issued
share capital as set out in Schedule 2 and the legal title and
beneficial ownership of all those shares is held, free of any Security
Interest or other claim, by the relevant Shareholder or Shareholders.
9.4 CORPORATE POWER. Each Borrower, or in the case of paragraph (a), each
Buyer or each Borrower which is a party to a Bareboat Charter, has the
corporate capacity, and has taken all corporate action and obtained all
consents necessary for it:
(a) to execute the MOA to which it is a party, to execute the Bareboat
Charter to which it is a party, to purchase and pay for the relevant
Ship under that MOA and to register that Ship in its name under the
relevant flag;
(b) to execute the Finance Documents to which that Xxxxxxxx is a party; and
(c) to borrow under this Agreement, to enter into Transactions under the
Master Agreement and to make all the payments contemplated by, and to
comply with, those Finance Documents to which that Borrower is a party
and the Master Agreement.
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9.5 CONSENTS IN FORCE. All the consents referred to in Clause 9.4 remain in
force and nothing has occurred which makes any of them liable to
revocation.
9.6 LEGAL VALIDITY; EFFECTIVE SECURITY INTERESTS. The Finance Documents to
which each Borrower is a party, do now or, as the case may be, will,
upon execution and delivery (and, where applicable, registration as
provided for in the Finance Documents):
(a) constitute that Borrower's legal, valid and binding obligations
enforceable against that Borrower in accordance with their respective
terms; and
(b) create legal, valid and binding Security Interests enforceable in
accordance with their respective terms over all the assets to which
they, by their terms, relate,
subject to any relevant insolvency laws affecting creditors' rights
generally.
9.7 NO THIRD PARTY SECURITY INTERESTS. Without limiting the generality of
Clause 9.6, at the time of the execution and delivery of each Finance
Document:
(a) each Borrower which is a party to that Finance Document will have the
right to create all the Security Interests which that Finance Document
purports to create; and
(b) no third party will have any Security Interest (except for Permitted
Security Interests) or any other interest, right or claim over, in or
in relation to any asset to which any such Security Interest, by its
terms, relates.
9.8 NO CONFLICTS. The execution by each Borrower of each Finance Document
to which it is a party, and the borrowing by that Borrower of the Loan,
and its compliance with each Finance Document to which it is a party
will not involve or lead to a contravention of:
(a) any law or regulation; or
(b) the constitutional documents of that Xxxxxxxx; or
(c) any contractual or other obligation or restriction which is binding on
that Borrower or any of its assets.
9.9 NO WITHHOLDING TAXES. All payments which each Borrower is liable to
make under the Finance Documents to which it is a party may be made
without deduction or withholding for or on account of any tax payable
under any law of any Pertinent Jurisdiction.
9.10 NO DEFAULT. No Event of Default or Potential Event of Default has
occurred and is continuing.
9.11 INFORMATION. All information which has been provided in writing by or
on behalf of the Borrowers or any Security Party to the Lender in
connection with any Finance Document satisfied the requirements of
Clause 10.5; all audited and unaudited accounts which have been so
provided satisfied the requirements of Clause 10.7; and there has been
no material adverse change in the financial position or state of
affairs of any Borrower from that disclosed in the latest of those
accounts.
9.12 NO LITIGATION. No legal or administrative action involving any Borrower
(including, in the case of each Shipowner, action relating to any
alleged or actual breach of the ISM Code or the ISPS Code) has been
commenced or taken or, to any Borrower's knowledge, is likely to be
commenced or taken.
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9.13 VALIDITY AND COMPLETENESS OF MOAS AND BAREBOAT CHARTERS. Each MOA and
each Bareboat Charter constitutes valid, binding and enforceable
obligations of the parties thereto respectively in accordance with
their terms; and:
(a) each copy of an MOA and a Bareboat Charter delivered to the Lender
before the date of this Agreement is a true and complete copy of such
MOA or, as the case may be, such Bareboat Charter (including, without
limitation, any addenda thereto); and
(b) no amendments or additions to any MOA or any Bareboat Charter have been
agreed nor has any party to an MOA or a Bareboat Charter waived any of
its rights under an MOA or a Bareboat Charter.
9.14 NO REBATES ETC. There is no agreement or understanding to allow or pay
any rebate, premium, commission, discount or other benefit or payment
(howsoever described) to any Buyer, any Seller or any third party in
connection with the purchase by a Buyer of a Ship other than as
disclosed to the Lender in writing on or prior to the date of this
Agreement.
9.15 COMPLIANCE WITH CERTAIN UNDERTAKINGS. At the date of this Agreement,
the Borrowers are in compliance with Clauses 10.2, 10.4, 10.9 and
10.13.
9.16 TAXES PAID. Each Borrower has paid all taxes applicable to, or imposed
on or in relation to that Borrower, its business and, in the case of a
Borrower which is a Shipowner, the Ship owned by it.
9.17 ISM CODE AND ISPS CODE COMPLIANCE. All requirements of the ISM Code and
the ISPS Code as they relate to the Shipowners, the Approved Manager,
each Bareboat Charterer and each Ship have been complied with.
10 GENERAL UNDERTAKINGS
10.1 GENERAL. Each Borrower undertakes with the Lender to comply, or, in the
case of Clauses 10.17 and 10.18, procure the compliance by the Holding
Company, with the following provisions of this Clause 10 at all times
during the Security Period, except as the Lender may otherwise permit
(such permission not to be unreasonably withheld).
10.2 TITLE; NEGATIVE PLEDGE. Each Shipowner will:
(a) hold the legal title to, and own the entire beneficial interest in the
Ship owned by it, her Insurances and Earnings, free from all Security
Interests and other interests and rights of every kind, except for
those created by the Finance Documents and the effect of assignments
contained in the Finance Documents and except for Permitted Security
Interests; and
(b) not create or permit to arise any Security Interest (except for
Permitted Security Interests) over any other asset, present or future
including, but not limited to, the Borrowers' rights against the Lender
under the Master Agreement or all or any part of the Borrowers'
interest in any amount payable to the Borrowers by the Lender under the
Master Agreement.
10.3 NO DISPOSAL OF ASSETS. No Borrower will transfer, lease or otherwise
dispose of:
(a) all or a substantial part of its assets, whether by one transaction or
a number of transactions, whether related or not; or
28
(b) any debt payable to it or any other right (present, future or
contingent right) to receive a payment, including any right to damages
or compensation.
10.4 NO OTHER LIABILITIES OR OBLIGATIONS TO BE INCURRED. No Borrower will
incur any liability or obligation except liabilities and obligations:
(a) under the Finance Documents to which it is a party;
(b) in the case of a Buyer, pursuant to the MOA to which it is a party;
(c) in the case of a Borrower whose Ship is subject to a Bareboat Charter,
pursuant to the Bareboat Charter to which it is a party;
(d) in the case of each Shipowner, liabilities or obligations reasonably
incurred in the ordinary course of operating and chartering the Ship
owned by it; and
(e) in the case of the Holding Company liabilities or obligations
reasonably incurred in the ordinary course of its business.
10.5 INFORMATION PROVIDED TO BE ACCURATE. All financial and other
information which is provided in writing by or on behalf of a Borrower
under or in connection with any Finance Document will be true and not
misleading and will not omit any material fact or consideration.
10.6 PROVISION OF FINANCIAL STATEMENTS. The Borrowers will send to the
Lender:
(a) as soon as possible, but in no event later than 180 days after the end
of each financial year of the Holding Company, the audited consolidated
accounts of the Group; and
(b) as soon as possible, but in no event later than 90 days after the end
of each half year in each financial year of the Holding Company, the
unaudited management accounts of the Group in a format approved by the
Lender, which are certified as to their correctness by the chief
financial officer of the Holding Company,
in each case together with a certificate signed by the chief financial
officer of the Holding Company confirming that the Holding Company is
as at the date of that certificate in compliance with the financial
covenants specified in Clauses 10.17 and 10.18 and that the Asset Cover
Ratio is until 30 June 2009, above 1.25:1 and, at all times thereafter,
above 1.30:1.
10.7 FORM OF FINANCIAL STATEMENTS. All accounts (audited and unaudited)
delivered under Clause 10.6 will:
(a) be prepared in accordance with all applicable laws and generally
accepted accounting principles consistently applied;
(b) give a true and fair view of the state of affairs of the relevant
parties at the date of those accounts and of their profit for the
period to which those accounts relate; and
(c) fully disclose or provide for all significant liabilities of the Group.
10.8 SHAREHOLDER AND CREDITOR NOTICES. Each Borrower will send to the
Lender, at the same time as they are despatched, copies of all
communications which are despatched to that Borrower's shareholders or
creditors or any class of them.
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10.9 CONSENTS. Each Borrower will maintain in force and promptly obtain or
renew, and will promptly send certified copies to the Lender of, all
consents required:
(a) for that Borrower to perform its obligations under any Finance Document
and any MOA to which it is a party;
(b) for the validity or enforceability of any Finance Document to which it
is a party; and
(c) if that Borrower is a Shipowner, for that Borrower to continue to own
and operate the Ship owned by it, and
(d) if that Borrower is a party to a Bareboat Charter, for it to continue
to perform its obligations under the Bareboat Charter to which it is a
party,
and that Xxxxxxxx will comply with the terms of all such consents.
10.10 MAINTENANCE OF SECURITY INTERESTS. Each Borrower will:
(a) at its own cost, do all that it reasonably can to ensure that any
Finance Document validly creates the obligations and the Security
Interests which it purports to create; and
(b) without limiting the generality of paragraph (a), at its own cost,
promptly register, file, record or enrol any Finance Document with any
court or authority in all Pertinent Jurisdictions, pay any stamp,
registration or similar tax in all Pertinent Jurisdictions in respect
of any Finance Document, give any notice or take any other step which
may be or has become necessary or desirable for any Finance Document to
be valid, enforceable or admissible in evidence or to ensure or protect
the priority of any Security Interest which it creates.
10.11 NOTIFICATION OF LITIGATION. Each Borrower will provide the Lender with
details of any legal or administrative action involving that Borrower,
any Security Party, the Approved Manager or, in the case of each
Shipowner, the Ship owned by it, her Earnings or her Insurances and, in
the case of each of Industrial, Ventspils, Semichlaus, Oxford and
Energetic, the relevant Bareboat Charterer, as soon as such action is
instituted or it becomes apparent to that Borrower that it is likely to
be instituted, unless it is clear that the legal or administrative
action cannot be considered material in the context of any Finance
Document.
10.12 NO AMENDMENT TO MOA OR BAREBOAT CHARTER. No Borrower will agree to any
amendment or supplement to, or waive or fail to enforce, the MOA or the
Bareboat Charter to which it is a party or any of its provisions.
10.13 PRINCIPAL PLACE OF BUSINESS. Each Borrower will maintain its place of
business, and keep its corporate documents and records, at the address
stated in Clause 27.2; and no Borrower will establish, or do anything
as a result of which it would be deemed to have, a place of business in
the United Kingdom or the United States of America.
10.14 CONFIRMATION OF NO DEFAULT. Each Borrower will, within 2 Business Days
after service by the Lender of a written request, serve on the Lender a
notice which is signed by the director of that Borrower and which:
(a) states that no Event of Default or Potential Event of Default has
occurred; or
(b) states that no Event of Default or Potential Event of Default has
occurred, except for a specified event or matter, of which all material
details are given.
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10.15 NOTIFICATION OF DEFAULT. Each Borrower will notify the Lender as soon
as that Xxxxxxxx becomes aware of:
(a) the occurrence of an Event of Default or a Potential Event of Default;
or
(b) any matter which indicates that an Event of Default or a Potential
Event of Default may have occurred,
and will keep the Lender fully up-to-date with all developments.
10.16 PROVISION OF FURTHER INFORMATION. Each Borrower will, as soon as
practicable after receiving the request, provide the Lender with any
additional financial or other information relating:
(a) any Borrower, any Ship, any Earnings, or any Insurances or either
Bareboat Charterer; or
(b) to any other matter relevant to, or to any provision of, a Finance
Document,
which may be requested by the Lender at any time.
10.17 MINIMUM CASH BALANCE. For the duration of the Security Period, the
members of the Group will maintain cash deposits with the Lender, free
of Security Interests except in favour of the Lender pursuant to this
Agreement and the other Finance Documents (but excluding any monies
transferred to the Retention Account pursuant to Clause 17.3), in
aggregate equal to not less than the amount of interest accruing (or
estimated by the Lender to accrue) on the Loan during the 6-month
period commencing on the date on which such determination is made.
10.18 FINANCIAL UNDERTAKINGS. The Holding Company shall ensure that at all
times throughout the Security Period:
(a) the ratio of Net Total Debt to Total Market Adjusted Assets shall not
be more then 0.8:1; and
(b) the ratio of EBITDA to Interest Expenses for the 6 months preceeding
such time shall be greater than or equal to 2.5:1.
11 CORPORATE UNDERTAKINGS
11.1 GENERAL. Each Borrower also undertakes with the Lender to comply with
the following provisions of this Clause 11 at all times during the
Security Period except as the Lender may otherwise permit (such
permission not to be unreasonably withheld).
11.2 MAINTENANCE OF STATUS. Each Borrower will maintain its separate
corporate existence and remain in good standing under the laws of its
place of incorporation indicated in Schedule 2.
11.3 NEGATIVE UNDERTAKINGS. No Borrower will:
(a) carry on any business other than, in the case of a Shipowner, the
ownership, chartering and operation of the Ship owned by it and, in the
case of the Holding Company, investing in companies which own or are to
acquire LPG carriers or other types of ocean-going vessels which are
used to transport petroleum, petrochemical gas products or liquefied
natural gas; or
31
(b) pay any dividend or make any other form of distribution or effect any
form of redemption, purchase or return of share capital except in
accordance with Clause 11.4; or
(c) provide any form of credit or financial assistance to:
(i) a person who is directly or indirectly interested in that
Xxxxxxxx's share or loan capital; or
(ii) any company in or with which such a person is directly or
indirectly interested or connected,
or enter into any transaction with or involving such a person or
company on terms which are, in any respect, less favourable to that
Borrower than those which it could obtain in a bargain made at arms'
length;
(d) open or maintain any account with any bank or financial institution
except (i) accounts with the Lender for the purposes of the Finance
Documents if that Borrower is a Shipowner, (ii) accounts with any other
bank or financial institution notified in writing to the Lender in the
case of the Holding Company and (iii) the existing account opened by
Geneve and held in its name with Alpha Bank,
PROVIDED THAT the exemption set out in sub-paragraph (iii) of this
Clause 11.3(d) shall be without prejudice to the obligations of Geneve
under Clause 17.1;
(e) issue, allot or grant any person a right to any shares in its capital
or repurchase or reduce its issued share capital;
(f) acquire any shares or other securities other than US or UK Treasury
bills and certificates of deposit issued by major North American or
European banks, or enter into any transaction in a derivative; or
(g) enter into any form of amalgamation, merger or de-merger or any form of
reconstruction or reorganisation.
11.4 PAYMENT OF DIVIDENDS. Subject to no Event of Default having occurred,
the Borrowers may in any financial year, declare and pay by way of
dividends an amount of up to 50 per cent. of the Excess Cash Flow of
the Group for that financial year.
12 INSURANCE
12.1 GENERAL. Each Borrower also undertakes with the Lender to comply, or as
the case may be, procure compliance, with the following provisions of
this Clause 12 at all times during the Security Period except as the
Lender may otherwise permit.
12.2 MAINTENANCE OF OBLIGATORY INSURANCES. Each Shipowner shall keep the
Ship owned by it insured at the expense of that Shipowner against:
(a) fire and usual marine risks (including hull and machinery and excess
risks);
(b) war risks;
(c) protection and indemnity risks; and
(d) any other risks against which the Xxxxxx considers, having regard to
practices and other circumstances prevailing at the relevant time, it
would in the opinion of the Lender be
32
reasonable for that Shipowner to insure and which are specified by the
Lender by notice to that Shipowner.
12.3 TERMS OF OBLIGATORY INSURANCES. Each Shipowner shall effect such
insurances:
(a) in Dollars;
(b) in the case of fire and usual marine risks and war risks, in an amount
on an agreed value basis at least the greater of (i) such amount, which
when aggregated with the amount for which any other Ship then subject
to a Mortgage is insured, is equal to 130 per cent. of the aggregate of
the Loan and the Swap Exposure and (ii) the market value of the Ship
owned by it; and
(c) in the case of oil pollution liability risks, for an aggregate amount
equal to the highest level of cover from time to time available under
basic protection and indemnity club entry (with the international group
of protection and indemnity clubs) and in the international marine
insurance market (currently $1,000,000,000);
(d) in relation to protection and indemnity risks in respect of the full
tonnage of the Ship owned by it;
(e) on approved terms; and
(f) through approved brokers and with approved insurance companies and/or
underwriters or, in the case of war risks and protection and indemnity
risks, in approved war risks and protection and indemnity risks
associations.
12.4 FURTHER PROTECTIONS FOR THE LENDER. In addition to the terms set out in
Clause 12.3, each Shipowner shall procure that the obligatory
insurances shall:
(a) name (or be amended to name) the Lender as mortgagee of the relevant
Ship, but without the Lender thereby being liable to pay (but having
the right to pay) premiums, calls or other assessments in respect of
such insurance;
(b) name the Lender as loss payee with such directions for payment as the
Lender may specify;
(c) provide that all payments by or on behalf of the insurers under the
obligatory insurances to the Lender shall be made without set-off,
counterclaim or deductions or condition whatsoever;
(d) provide that such obligatory insurances shall be primary without right
of contribution from other insurances which may be carried by the
Lender;
(e) provide that the Lender may make proof of loss if any of the Shipowners
fail to do so.
12.5 RENEWAL OF OBLIGATORY INSURANCES. Each Shipowner shall:
(a) at least 7 days before the expiry of any obligatory insurance effected
by it:
(i) notify the Lender of the brokers (or other insurers) and any
protection and indemnity or war risks association through or
with whom that Xxxxxxxx proposes to renew that obligatory
insurance and of the proposed terms of renewal; and
(ii) obtain the Lender's approval to the matters referred to in
paragraph (i);
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(b) at least 7 days before the expiry of any obligatory insurance effected
by it, renew that obligatory insurance in accordance with the Lender's
approval pursuant to paragraph (a); and
(c) procure that the approved brokers and/or the war risks and protection
and indemnity associations with which such a renewal is effected shall
promptly after the renewal notify the Lender in writing of the terms
and conditions of the renewal.
12.6 COPIES OF POLICIES; LETTERS OF UNDERTAKING. Each Shipowner shall ensure
that all approved brokers provide the Lender with copies of all
policies relating to the obligatory insurances which they are to effect
or renew and of a letter or letters or undertaking in a form required
by the Lender and including undertakings by the approved brokers that:
(a) they will have endorsed on each policy, immediately upon issue, a loss
payable clause and a notice of assignment complying with the provisions
of Clause 12.4;
(b) they will hold such policies, and the benefit of such insurances, to
the order of the Lender in accordance with the said loss payable
clause;
(c) they will advise the Lender immediately of any material change to the
terms of the obligatory insurances;
(d) they will notify the Lender, not less than 14 days before the expiry of
the obligatory insurances, in the event of their not having received
notice of renewal instructions from that Shipowner or its agents and,
in the event of their receiving instructions to renew, they will
promptly notify the Lender of the terms of the instructions; and
(e) they will not set off against any sum recoverable in respect of a claim
relating to the Ship owned by that Shipowner under such obligatory
insurances any premiums or other amounts due to them or any other
person whether in respect of that Ship or otherwise, they waive any
lien on the policies, or any sums received under them, which they might
have in respect of such premiums or other amounts, and they will not
cancel such obligatory insurances by reason of non-payment of such
premiums or other amounts, and will arrange for a separate policy to be
issued in respect of that Ship forthwith upon being so requested by the
Lender.
12.7 COPIES OF CERTIFICATES OF ENTRY. Each Shipowner shall ensure that any
protection and indemnity and/or war risks associations in which the
Ship owned by it is entered provides the Lender with:
(a) a certified copy of the certificate of entry for that Ship;
(b) a letter or letters of undertaking in such form as may be required by
the Lender; and
(c) a certified copy of each certificate of financial responsibility for
pollution by oil or other Environmentally Sensitive Material issued by
the relevant certifying authority in relation to that Ship,
PROVIDED THAT if any protection and indemnity and/or war risks
associations in which a Ship is entered does not provide the Lender
with a certified copy of the certificate of entry for that Ship, the
Shipowner which owns that Ship shall provide the Lender with a
certified copy of the certificate of entry for the Ship.
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12.8 DEPOSIT OF ORIGINAL POLICIES. Each Shipowner shall ensure that all
policies relating to obligatory insurances effected by it are deposited
with the approved brokers through which the insurances are effected or
renewed.
12.9 PAYMENT OF PREMIUMS. Each Shipowner shall punctually pay all premiums
or other sums payable in respect of the obligatory insurances effected
by it and produce all relevant receipts when so required by the Lender.
12.10 GUARANTEES. Each Shipowner shall ensure that any guarantees required by
a protection and indemnity or war risks association are promptly issued
and remain in full force and effect.
12.11 COMPLIANCE WITH TERMS OF INSURANCES. No Shipowner shall do nor omit to
do (nor permit to be done or not to be done) any act or thing which
would or might render any obligatory insurance invalid, void, voidable
or unenforceable or render any sum payable under an obligatory
insurance repayable in whole or in part; and, in particular:
(a) each Shipowner shall take all necessary action and comply with all
requirements which may from time to time be applicable to the
obligatory insurances, and (without limiting the obligation contained
in Clause 12.7(c)) ensure that the obligatory insurances are not made
subject to any exclusions or qualifications to which the Lender has not
given its prior approval;
(b) no Shipowner shall make any changes relating to the classification or
classification society or manager or operator of the Ship owned by it
approved by the underwriters of the obligatory insurances;
(c) each Shipowner shall make (and promptly supply copies to the Lender of)
all quarterly or other voyage declarations which may be required by the
protection and indemnity risks association in which the Ship owned by
it is entered to maintain cover for trading to the United States of
America and Exclusive Economic Zone (as defined in the United States
Oil Pollution Act 1990 or any other applicable legislation); and
(d) no Shipowner shall employ the Ship owned by it, nor allow it to be
employed, otherwise than in conformity with the terms and conditions of
the obligatory insurances, without first obtaining the consent of the
insurers and complying with any requirements (as to extra premium or
otherwise) which the insurers specify.
12.12 ALTERATION TO TERMS OF INSURANCES. No Shipowner shall either make or
agree to any alteration to the terms of any obligatory insurance nor
waive any right relating to any obligatory insurance.
12.13 SETTLEMENT OF CLAIMS. No Shipowner shall settle, compromise or abandon
any claim under any obligatory insurance for Total Loss or for a Major
Casualty, and shall do all things necessary and provide all documents,
evidence and information to enable the Lender to collect or recover any
moneys which at any time become payable in respect of the obligatory
insurances.
12.14 PROVISION OF COPIES OF COMMUNICATIONS. Each Shipowner shall provide the
Lender, promptly following the Lender's request, with copies of all
written communications between that Shipowner and:
(a) the approved brokers; and
(b) the approved protection and indemnity and/or war risks associations;
and
35
(c) the approved insurance companies and/or underwriters, which relate
directly or indirectly to:
(i) that Shipowner's obligations relating to the obligatory
insurances including, without limitation, all requisite
declarations and payments of additional premiums or calls; and
(ii) any credit arrangements made between that Shipowner and any of
the persons referred to in paragraphs (a) or (b) relating
wholly or partly to the effecting or maintenance of the
obligatory insurances.
12.15 PROVISION OF INFORMATION. In addition, each Shipowner shall promptly
provide the Lender (or any persons which it may designate) with any
information which the Lender (or any such designated person) requests
for the purpose of:
(a) obtaining or preparing any report from an independent marine insurance
broker as to the adequacy of the obligatory insurances effected or
proposed to be effected; and/or
(b) effecting, maintaining or renewing any such insurances as are referred
to in Clause 12.16 below or dealing with or considering any matters
relating to any such insurances,
and the Shipowners shall, forthwith upon demand, indemnify the Lender
in respect of all fees and other expenses incurred by or for the
account of the Lender in connection with any such report as is referred
to in paragraph (a).
12.16 MORTGAGEE'S INTEREST AND ADDITIONAL PERILS INSURANCES. The Lender shall
be entitled from time to time to effect, maintain and renew a
mortgagee's interest additional perils insurance in respect of any
Ship, a mortgagee's political risks insurance and a mortgagee's
interest marine insurance in such amounts, on such terms, through such
insurers and generally in such manner as the Lender may from time to
time consider appropriate and the Borrowers shall upon demand fully
indemnify the Lender in respect of all premiums and other expenses
which are incurred in connection with or with a view to effecting,
maintaining or renewing any such insurance or dealing with, or
considering, any matter arising out of any such insurance.
13 SHIP COVENANTS
13.1 GENERAL. Each Borrower also undertakes with the Lender to comply with,
or to procure compliance with (as the case may be), with the following
provisions of this Clause 13 at all times during the Security Period,
except as the Lender may otherwise permit.
13.2 SHIP'S NAME AND REGISTRATION. Each Shipowner shall keep the Ship owned
by it registered in its name at the ship registry and port indicated in
Schedule 3, shall not do or allow to be done anything as a result of
which such registration might be cancelled or imperilled; and shall not
change the name or port of registry of the Ship owned by it.
13.3 REPAIR AND CLASSIFICATION. Each Shipowner shall keep the Ship owned by
it in a good and safe condition and state of repair:
(a) consistent with first-class ship ownership and management practice;
(b) so as to maintain that Ship's present class (namely that indicated in
Schedule 3) free of overdue recommendations and conditions affecting
the Ship's class; and
36
(c) so as to comply with all laws and regulations applicable to vessels
registered at ports in the flag state relevant to that Ship or to
vessels trading to any jurisdiction to which that Ship may trade from
time to time, including but not limited to the ISM Code and the ISPS
Code.
13.4 MODIFICATION. No Shipowner shall make or allow any modification or
repairs to, or replacement of, any Ship or equipment installed on the
Ship which would or might materially alter the structure, type or
performance characteristics of any Ship or materially reduce its value.
13.5 REMOVAL OF PARTS. No Shipowner shall remove or allow the removal of any
material part of any Ship, or any item of equipment installed on any
Ship, unless the part or item so removed is forthwith replaced by a
suitable part or item which is in the same condition as or better
condition than the part or item removed, is free from any Security
Interest or any right in favour of any person other than the Lender and
becomes on installation on the relevant Ship the property of the
relevant Shipowner and subject to the security constituted by the
relevant Mortgage PROVIDED THAT a Shipowner may install equipment owned
by a third party if the equipment can be removed without any risk of
damage to the Ship owned by it.
13.6 SURVEYS. Each Shipowner shall submit the Ship owned by it regularly to
all periodical or other surveys which may be required for
classification purposes and, if so required by the Lender provide the
Lender, with copies of all survey reports.
13.7 INSPECTION. Each Shipowner shall permit the Lender (by surveyors or
other persons appointed by it for that purpose) to board the Ship owned
by it at all reasonable times to inspect its condition or to satisfy
themselves about proposed or executed repairs and shall afford all
proper facilities for such inspections.
13.8 PREVENTION OF AND RELEASE FROM ARREST. Each Shipowner shall promptly
discharge:
(a) all liabilities which give or may give rise to maritime or possessory
liens on or claims enforceable against the Ship owned by it, her
Earnings or her Insurances;
(b) all taxes, dues and other amounts charged in respect of the Ship owned
by it, her Earnings or her Insurances; and
(c) all other outgoings whatsoever in respect of the Ship owned by it, her
Earnings or her Insurances,
and, forthwith upon receiving notice of the arrest of the Ship owned by
it, or of its detention in exercise or purported exercise of any lien
or claim, that Borrower shall procure its release by providing bail or
otherwise as the circumstances may require.
13.9 COMPLIANCE WITH LAWS ETC. Each Shipowner shall:
(a) comply, or procure compliance with the ISM Code, the ISPS Code, all
Environmental Laws and all other laws or regulations relating to the
Ship owned by it, its ownership, operation and management or to the
business of that Shipowner;
(b) not employ the Ship owned by it nor allow its employment in any manner
contrary to any law or regulation in any relevant jurisdiction
including but not limited to the ISM Code and the ISPS Code; and
37
(c) in the event of hostilities in any part of the world (whether war is
declared or not), not cause or permit the Ship owned by it to enter or
trade to any zone which is declared a war zone by any government or by
the Ship's war risks insurers unless the prior written consent of the
Lender has been given and that Shipowner has (at its expense) effected
any special, additional or modified insurance cover which the Lender
may require.
13.10 PROVISION OF INFORMATION. Each Borrower shall promptly provide the
Lender with any information which it requests regarding:
(a) the Ship owned by it, its employment, position and engagements;
(b) the Earnings and payments and amounts due to the master and crew of the
Ship owned by it;
(c) any expenses incurred, or likely to be incurred, in connection with the
operation, maintenance or repair of the Ship owned by it and any
payments made in respect of that Ship;
(d) any towages and salvages;
(e) its compliance, the Approved Manager's compliance, the compliance of
the Ship owned by it and (in the case of each Ship which is, or will be
subject to, a Bareboat Charter), the relevant Bareboat Charterer's
compliance, with the ISM Code and the ISPS Code,
and, upon the Lender's request, provide copies of any current charter
relating to the Ship owned by it, of any current charter guarantee and
of the Document of Compliance and the International Ship Security
Certificate in respect of the Ship.
13.11 NOTIFICATION OF CERTAIN EVENTS. Each Shipowner shall immediately notify
the Lender by fax, confirmed forthwith, by letter of:
(a) any casualty which is or is likely to be or to become a Major Casualty;
(b) any occurrence as a result of which the Ship owned by it has become or
is, by the passing of time or otherwise, likely to become a Total Loss;
(c) any requirement or recommendation made by any insurer or classification
society or by any competent authority which is not immediately complied
with;
(d) any arrest or detention of the Ship owned by it, any exercise or
purported exercise of any lien on that Ship or its Earnings or any
requisition of that Ship for hire;
(e) any intended dry docking of the Ship owned by it;
(f) any Environmental Claim made against that Shipowner or in connection
with the Ship owned by it, or any Environmental Incident;
(g) any claim for breach of the ISM Code or the ISPS Code being made
against that Shipowner, the Approved Manager or a Bareboat Charterer
(as the case may be) or otherwise in connection with the Ship owned by
it; or
(h) any other matter, event or incident, actual or threatened, the effect
of which will or could lead to the ISM Code or the ISPS Code not being
complied with,
38
and that Shipowner shall keep the Lender advised in writing on a
regular basis and in such detail as the Lender shall require of that
Shipowner's, the Approved Manager's, a Bareboat Charterer's or any
other person's response to any of those events or matters.
13.12 RESTRICTIONS ON CHARTERING, APPOINTMENT OF MANAGERS ETC. No Shipowner
shall, in relation to the Ship owned by it:
(a) other than, in the case of each of "XXXXXX XXXXX", "GAS ARCTIC", "GAS
ICE", "SIR IVOR" and "LYNE" pursuant to the relevant Bareboat Charter,
let that Ship on demise charter for any period;
(b) other than, in the case of "GAS NEMESIS", the Gas Nemesis Time
Charterparty, enter into any time or consecutive voyage charter in
respect of that Ship for a term which exceeds, or which by virtue of
any optional extensions may exceed, 13 months;
(c) enter into any charter in relation to that Ship under which more than 2
months' hire (or the equivalent) is payable in advance;
(d) charter that Ship otherwise than on bona fide arm's length terms at the
time when that Ship is fixed;
(e) appoint a manager of that Ship other than the Approved Manager or agree
to any alteration to the terms of the Approved Manager's appointment;
(f) de-activate or lay up that Ship; or
(g) put that Ship into the possession of any person for the purpose of work
being done upon her in an amount exceeding or likely to exceed $500,000
(or the equivalent in any other currency) unless that person has first
given to the Lender and in terms satisfactory to it a written
undertaking not to exercise any lien on that Ship or the Earnings for
the cost of such work or any other reason.
13.13 NOTICE OF MORTGAGE. Each Shipowner shall:
(a) keep the relevant Mortgage registered against the Ship owned by it as a
valid first priority or first preferred mortgage; and
(b) carry on board that Ship a certified copy of the relevant Mortgage and
place and maintain in a conspicuous place in the navigation room and
the Master's cabin of that Ship a framed printed notice stating that
that Ship is mortgaged by that Shipowner to the Lender.
13.14 SHARING OF EARNINGS. No Borrower shall enter into any agreement or
arrangement for the sharing of any Earnings.
13.15 TIME CHARTER ASSIGNMENT. If any Borrower enters into any Charter
(subject to obtaining the consent of the Lender in accordance with
Clause 13.12(b)), the relevant Borrower shall, at the request of the
Lender, execute in favour of the Lender a Charter Assignment in
relation to such Charter, and shall deliver to the Lender such other
documents equivalent to those referred to at paragraphs 3, 4 and 5 of
Part A of Schedule 4 hereof as the Lender may require.
13.16 COMPLIANCE WITH INSURANCE AND SHIP COVENANTS. Each of Industrial,
Ventspils, Semichlaus, Oxford and Energetic shall procure the
performance by Unigas Kosan, Finaval and Petredec respectively of all
the covenants and undertakings to be observed, performed and complied
with, by or on behalf of each of Industrial, Ventspils,
39
Semichlaus, Oxford and Energetic respectively under Clause 12 (other
than Clause 12.16) and Clause 13 and, to the extent that each Bareboat
Charterer duly performs and discharges its obligations set out in this
Clause 13.16 or to the further extent that each Bareboat Charterer, by
its performance of the relevant Bareboat Charter, performs and
discharges further obligations of Industrial, Ventspils, Semichlaus,
Energetic and Baroness (as the case may be) contained in the Finance
Documents, then such performance and discharge shall, to that extent,
be deemed due performance and discharge of Industrial's, Ventspils',
Semichlaus', Oxford's and Energetic's obligations (as the case may be)
under the Finance Documents.
14 SECURITY COVER
14.1 MINIMUM REQUIRED SECURITY COVER. Clause 14.2 applies if the Lender
notifies the Borrowers that the Asset Cover Ratio is below:
(a) at any time on or prior to 30 June 2009, 1.25 to 1; and
(b) at all times thereafter, 1.3 to 1.
14.2 PROVISION OF ADDITIONAL SECURITY; PREPAYMENT. If the Lender serves a
notice on the Borrowers under Clause 14.1, the Borrowers shall, within
1 month after the date on which the Lender's notice is served, either:
(a) provide, or ensure that a third party provides, additional security
which, in the reasonable opinion of the Lender, has a net realisable
value at least equal to the shortfall in the Asset Cover Ratio and is
documented in such terms as the Lender may approve or require; or
(b) prepay such part (at least) of the Loan as will eliminate the shortfall
in the Asset Cover Ratio.
14.3 VALUATION OF SHIPS. The market value of a Ship at any date is that
shown by the arithmetic average of two valuations, each prepared:
(a) as at a date not more than 14 days previously;
(b) by an independent sale and purchase shipbroker which the Lender has
approved or appointed for the purpose;
(c) with or without physical inspection of the Ship (as the Lender may
require);
(d) on the basis of a sale for prompt delivery for cash on normal arm's
length commercial terms as between a willing seller and a willing
buyer, free of any existing charter or other contract of employment;
and
(e) after deducting the estimated amount of the usual and reasonable
expenses which would be incurred in connection with the sale.
14.4 VALUE OF ADDITIONAL VESSEL SECURITY. The net realisable value of any
additional security which is provided under Clause 14.2 and which
consists of a Security Interest over a vessel shall be that shown by a
valuation complying with the requirements of Clause 14.3.
14.5 VALUATIONS BINDING. Any valuation under Clause 14.2, 14.3 or 14.4 shall
be binding and conclusive as regards the Borrowers, as shall be any
valuation which the Lender makes of any additional security which does
not consist of or include a Security Interest.
40
14.6 PROVISION OF INFORMATION. The Borrowers shall promptly provide the
Lender and any shipbroker or expert acting under Clause 14.3 or 14.4
with any information which the Lender or the shipbroker or expert may
request for the purposes of the valuation; and, if the Borrowers fail
to provide the information by the date specified in the request, the
valuation may be made on any basis and assumptions which the shipbroker
or the Lender (or the expert appointed by it) considers prudent.
14.7 PAYMENT OF VALUATION EXPENSES. Without prejudice to the generality of
the Borrowers' obligations under Clauses 19.2, 19.3 and 20.3, the
Borrowers shall, on demand, pay the Lender the amount of the fees and
expenses of any shipbroker or expert instructed by the Lender under
this Clause and all legal and other expenses incurred by the Lender in
connection with any matter arising out of this Clause.
14.8 APPLICATION OF PREPAYMENT. Clause 7 shall apply in relation to any
prepayment pursuant to Clause 14.2(b).
15 PAYMENTS AND CALCULATIONS
15.1 CURRENCY AND METHOD OF PAYMENTS. All payments to be made by any
Borrower to the Lender under a Finance Document shall be made to the
Lender:
(a) by not later than 11.00 a.m. (New York City time) on the due date;
(b) in same day Dollar funds settled through the New York Clearing House
Interbank Payments System (or in such other Dollar funds and/or settled
in such other manner as the Lender shall specify as being customary at
the time for the settlement of international transactions of the type
contemplated by this Agreement); and
(c) to the account of the Lender (SWIFT address: GEBAGRAA) with Fortis Bank
N.V./S.A., Brussels (account number 291-1176465-49-USD-0; SWIFT
address: XXXXXXXX00X) through its US correspondent bank, JPMorgan Chase
Bank, New York City (SWIFT address: CHASEUS33) or to such other account
with such other bank as the Lender may from time to time notify to the
Borrowers.
15.2 PAYMENT ON NON-BUSINESS DAY. If any payment by any Borrower under a
Finance Document would otherwise fall due on a day which is not a
Business Day:
(a) the due date shall be extended to the next succeeding Business Day; or
(b) if the next succeeding Business Day falls in the next calendar month,
the due date shall be brought forward to the immediately preceding
Business Day,
and interest shall be payable during any extension under paragraph (a)
at the rate payable on the original due date.
15.3 BASIS FOR CALCULATION OF PERIODIC PAYMENTS. All interest and any other
payments under any Finance Document which are of an annual or periodic
nature shall accrue from day to day and shall be calculated on the
basis of the actual number of days elapsed and a 360 day year.
15.4 LENDER ACCOUNTS. The Lender shall maintain an account showing the
amounts advanced by the Lender and all other sums owing to the Lender
from the Borrowers and each Security Party under the Finance Documents
and all payments in respect of those amounts made by the Borrowers and
any Security Party.
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15.5 ACCOUNTS PRIMA FACIE EVIDENCE. If the account maintained under Clauses
15.4 shows an amount to be owing by a Borrower or a Security Party to
the Lender, that account shall be prima facie evidence that that amount
is owing to the Lender.
16 APPLICATION OF RECEIPTS
16.1 NORMAL ORDER OF APPLICATION. Except as any Finance Document may
otherwise provide, any sums which are received or recovered by the
Lender under or by virtue of any Finance Document shall be applied:
(a) FIRST: in or towards satisfaction of any amounts then due and payable
under the Finance Documents (or any of them) in such order of
application and/or such proportions as the Lender may specify by notice
to the Borrowers and the Security Parties;
(b) SECONDLY: in retention of an amount equal to any amount not then due
and payable under any Finance Document but which the Lender, by notice
to the Borrowers and the Security Parties, states in its opinion will
or may become due and payable in the future and, upon those amounts
becoming due and payable, in or towards satisfaction of them in
accordance with the provisions of this Clause; and
(c) THIRDLY: any surplus shall be paid to the Borrowers or to any other
person appearing to be entitled to it.
16.2 VARIATION OF ORDER OF APPLICATION. The Lender may, at its reasonable
discretion, by notice to the Borrowers and the Security Parties,
provide for a different manner of application from that set out in
Clause 16.1 either as regards a specified sum or sums or as regards
sums in a specified category or categories.
16.3 NOTICE OF VARIATION OF ORDER OF APPLICATION. The Lender may give
notices under Xxxxxx 16.2 from time to time; and such a notice may be
stated to apply not only to sums which may be received or recovered in
the future, but also to any sum which has been received or recovered on
or after the third Business Day before the date on which the notice is
served.
16.4 APPROPRIATION RIGHTS OVERRIDDEN. This Clause 16 and any notice which
the Lender gives under Clause 16.2 shall override any right of
appropriation possessed, and any appropriation made, by any Borrower or
any Security Party.
17 APPLICATION OF EARNINGS
17.1 PAYMENT OF EARNINGS. Each Shipowner undertakes with the Lender to
ensure that, throughout the Security Period:
(a) (subject only to the provisions of the General Assignments to which
that Shipowner is a party), all the Earnings of the Ship owned by it
are paid to the Earnings Account; and
(b) all payments by the Lender to a Borrower under each Transaction are
paid to the Earnings Account.
17.2 APPLICATION OF EARNINGS. Each Shipowner undertakes with the Lenders
that money from time to time credited to, or for the time being
standing to the credit of, the Earnings Account shall, unless and until
an Event of Default or Potential Event of Default shall have occurred
(whereupon the provisions of Clause 16.1 shall be and become
applicable), be available for application in the following manner:
42
(a) in or towards meeting the costs and expenses from time to time incurred
by or on behalf of the relevant Shipowner in connection with the
operation of the Ship owned by it;
(b) in or towards making payments of all amounts due and payable by the
Borrowers under this Agreement other than the payments of principal and
interest pursuant to Clauses 7.1 and 4.1;
(c) in or towards making the transfers to the Retention Account required
pursuant to Clause 17.3; and
(d) as to any surplus from time to time arising on the Earnings Account
following application as aforesaid, to be paid to the relevant
Shipowner or to whomsoever it may direct.
17.3 MONTHLY RETENTIONS. The Borrowers undertake with the Lender to ensure
that, on the date falling one month after the date on which the final
Drawdown Notice is served and on the same day in each subsequent month
throughout the Security Period, there is transferred to the Retention
Account out of the Earnings received in the Earnings Account during the
preceding month:
(a) one-third of the amount of the repayment instalment falling due under
Clause 7 on the next Repayment Date; and
(b) the relevant fraction of the aggregate amount of interest on the Loan
which is payable on the next due date for payment of interest under
this Agreement.
The "RELEVANT FRACTION" is a fraction of which the numerator is 1 and
the denominator the number of months comprised in the then current
Interest Period (or, if the period is shorter, the number of months
from the later of the commencement of the current Interest Period or
the last due date for payment of interest to the next due date for
payment of interest under this Agreement).
17.4 SHORTFALL IN EARNINGS. If the aggregate Earnings received in the
Earnings Account are insufficient in any month for the required amount
to be transferred to the Retention Account under Clause 17.3, the
Borrowers shall make up the amount of the insufficiency on demand from
the Lender; but, without thereby prejudicing the Lender's right to make
such demand at any time, the Lender may permit the Borrowers to make up
all or part of the insufficiency by increasing the amount of any
transfer under Clause 17.3 from the Earnings received in the next or
subsequent months.
17.5 APPLICATION OF RETENTIONS. Until an Event of Default or a Potential
Event of Default occurs, the Lender shall on each Repayment Date and on
each due date for the payment of interest under this Agreement apply in
accordance with Clause 15.1 so much of the balance on the Retention
Account as equals:
(a) the repayment instalment due on that Repayment Date; or
(b) the amount of interest payable on that interest payment date,
in discharge of the Borrowers' liability for that repayment instalment
or that interest.
17.6 INTEREST ACCRUED ON RETENTION ACCOUNT. Any credit balance on the
Retention Account shall bear interest at the rate from time to time
offered by the Lender to its customers for Dollar deposits of similar
amounts and for periods similar to those for which such balances appear
to the Lender likely to remain on the Retention Account.
43
17.7 RELEASE OF ACCRUED INTEREST. Interest accruing under Clause 17.6 shall
be released to the Borrowers on each Repayment Date unless an Event of
Default or a Potential Event of Default has occurred or the then credit
balance on the Retention Account is less than what would have been the
balance had the full amount required by Clause 17.3 been transferred in
that and each previous month.
17.8 LOCATION OF ACCOUNTS. Each Borrower shall promptly:
(a) comply with any requirement of the Lender as to the location or
re-location of the Earnings Account and the Retention Account (or
either of them); and
(b) execute any documents which the Lender specifies to create or maintain
in favour of the Lender a Security Interest over (and/or rights of
set-off, consolidation or other rights in relation to) the Earnings
Account and the Retention Account.
17.9 DEBITS FOR EXPENSES ETC. The Lender shall be entitled (but not obliged)
from time to time to debit the Earnings Account without prior notice in
order to discharge any amount due and payable to it under Clause 19 or
20 or payment of which it has become entitled to demand under Clause 19
or 20.
17.10 BORROWERS' OBLIGATIONS UNAFFECTED. The provisions of this Clause 17 (as
distinct from a distribution effected under Clause 17.5) do not affect:
(a) the liability of the Borrowers to make payments of principal and
interest on the due dates; or
(b) any other liability or obligation of the Borrowers or any Security
Party under any Finance Document.
18 EVENTS OF DEFAULT
18.1 EVENTS OF DEFAULT. An Event of Default occurs if:
(a) any Borrower or any Security Party fails to pay when due or (if so
payable) on demand any sum payable under a Finance Document or under
any document relating to a Finance Document; or
(b) any breach occurs of Clause 8.2, 10.2, 10.3, 10.17, 10.18, 11.2, 11.3
or 14.1; or
(c) any breach by any Borrower or any Security Party occurs of any
provision of a Finance Document (other than a breach covered by
paragraph (a) or (b)) if, in the opinion of the Lender, such default is
capable of remedy and such default continues unremedied 10 days after
written notice from the Lender requesting action to remedy the same; or
(d) (subject to any applicable grace period specified in any Finance
Document) any breach by any of the Borrowers or any Security Party
occurs of any provision of a Finance Document (other than a breach
caused by paragraph (a), (b) or (c)); or
(e) any representation, warranty or statement made by, or by an officer of,
a Borrower or a Security Party in a Finance Document or in the Drawdown
Notice or any other notice or document relating to a Finance Document
is untrue or misleading when it is made; or
(f) any of the following occurs in relation to any Financial Indebtedness
of a Relevant Person:
44
(i) any Financial Indebtedness of a Relevant Person is not paid
when due or, if so payable, on demand; or
(ii) any Financial Indebtedness of a Relevant Person becomes due
and payable or capable of being declared due and payable prior
to its stated maturity date as a consequence of any event of
default; or
(iii) a lease, hire purchase agreement or charter creating any
Financial Indebtedness of a Relevant Person is terminated by
the lessor or owner or becomes capable of being terminated as
a consequence of any termination event; or
(iv) any overdraft, loan, note issuance, acceptance credit, letter
of credit, guarantee, foreign exchange or other facility, or
any swap or other derivative contract or transaction, relating
to any Financial Indebtedness of a Relevant Person ceases to
be available or becomes capable of being terminated as a
result of any event of default, or cash cover is required, or
becomes capable of being required, in respect of such a
facility as a result of any event of default; or
(v) any Security Interest securing any Financial Indebtedness of a
Relevant Person becomes enforceable; or
(g) any of the following occurs in relation to a Relevant Person:
(i) a Relevant Person is unable to pay its debts as they fall due;
or
(ii) any assets of a Relevant Person are subject to any form of
execution, attachment, arrest, sequestration or distress in
respect of a sum of, or sums aggregating, $500,000 or more or
the equivalent in another currency and such execution,
attachment, arrest, sequestration or distress is not withdrawn
within 7 days of its commencement; or
(iii) any administrative or other receiver is appointed over any
asset of a Relevant Person; or
(iv) a Relevant Person makes any formal declaration of bankruptcy
or any formal statement to the effect that it is insolvent or
likely to become insolvent, or a winding up or administration
order is made in relation to a Relevant Person, or the members
or directors of a Relevant Person pass a resolution to the
effect that it should be wound up, placed in administration or
cease to carry on business, save that this paragraph does not
apply to a fully solvent winding up of a Relevant Person other
than a Borrower which is, or is to be, effected for the
purposes of an amalgamation or reconstruction previously
approved by the Lender and effected not later than 3 months
after the commencement of the winding up; or
(v) a petition is presented in any Pertinent Jurisdiction for the
winding up or administration, or the appointment of a
provisional liquidator, of a Relevant Person unless the
petition is being contested in good faith and on substantial
grounds and is dismissed or withdrawn within 30 days of the
presentation of the petition; or
(vi) a Relevant Person petitions a court, or presents any proposal
for, any form of judicial or non-judicial suspension or
deferral of payments, reorganisation of its debt (or certain
of its debt) or arrangement with all or a substantial
proportion (by number or value) of its creditors or of any
class of them or any such suspension or deferral of payments,
reorganisation or arrangement is effected by court order,
contract or otherwise; or
45
(vii) any meeting of the members or directors of a Relevant Person
is summoned for the purpose of considering a resolution or
proposal to authorise or take any action of a type described
in paragraphs (iii), (iv), (v) or (vi); or
(viii) in a Pertinent Jurisdiction other than England, any event
occurs or any procedure is commenced which, in the opinion of
the Lender, is similar to any of the foregoing; or
(h) any Borrower ceases or suspends carrying on its business or a part of
its business which, in the opinion of the Lender, is material in the
context of this Agreement; or
(i) it becomes unlawful in any Pertinent Jurisdiction or impossible:
(i) for any Borrower or any Security Party to discharge any
liability under a Finance Document or to comply with any other
obligation which the Lender considers material under a Finance
Document; or
(ii) for the Lender to exercise or enforce any right under, or to
enforce any Security Interest created by, a Finance Document;
or
(j) any consent necessary to enable any Shipowner or the Bareboat Charterer
to own, operate or charter the Ship owned or chartered by it (as the
case may be) or to enable any Borrower or any Security Party to comply
with any provision which the Lender considers material of a Finance
Document, an MOA or the Bareboat Charter is not granted, expires
without being renewed, is revoked or becomes liable to revocation or
any condition of such a consent is not fulfilled; or
(k) it appears to the Lender that, without its prior consent, either (i) a
change has occurred or probably has occurred after the date of this
Agreement in the ultimate beneficial ownership of any of the shares in
any Shipowner or the Shareholders or in the ultimate control of the
voting rights attaching to any of those shares or (ii) the Vafias
family (either directly and/or through companies beneficially owned or
controlled by the Vafias family and/or trusts or foundations of which
members of the Vafias family are beneficiaries) do not own and control
at least 30 per cent. of the issued share capital of the Holding
Company; or
(l) any provision which the Lender considers material of a Finance Document
proves to have been or becomes invalid or unenforceable, or a Security
Interest created by a Finance Document proves to have been or becomes
invalid or unenforceable or such a Security Interest proves to have
ranked after, or loses its priority to, another Security Interest or
any other third party claim or interest; or
(m) the security constituted by a Finance Document is in any way imperilled
or in jeopardy; or
(n) an Event of Default (as defined in Section 14 of the Master Agreement)
occurs;
(o) the Master Agreement is terminated, cancelled, suspended, rescinded or
revoked or otherwise ceases to remain in full force and effect for any
reason except with the consent of the Lender; or
(p) any other event occurs or any other circumstances arise or develop
including, without limitation:
(i) a change in the financial position, state of affairs or
prospects of any Borrower or any Shareholder; or
46
(ii) any accident or other event involving any Ship or another
vessel owned, chartered or operated by a Relevant Person,
in the light of which the Borrowers are, or will later become, unable
to discharge their liabilities under the Finance Documents as they fall
due.
18.2 ACTIONS FOLLOWING AN EVENT OF DEFAULT. On, or at any time after, the
occurrence of an Event of Default the Lender may:
(a) serve on the Borrowers a notice stating that all obligations of the
Lender to the Borrowers under this Agreement are terminated; and/or
(b) serve on the Borrowers a notice stating that the Loan, all accrued
interest and all other amounts accrued or owing under this Agreement
are immediately due and payable or are due and payable on demand;
and/or
(c) take any other action which, as a result of the Event of Default or any
notice served under paragraph (a) or (b), the Lender is entitled to
take under any Finance Document or any applicable law.
18.3 TERMINATION OF COMMITMENT. On the service of a notice under Clause
18.2(a) the Commitment, and all other obligations of the Lender to the
Borrowers under this Agreement, shall terminate.
18.4 ACCELERATION OF LOAN. On the service of a notice under Clause 18.2(b),
the Loan, all accrued interest and all other amounts accrued or owing
from the Borrowers or any Security Party under this Agreement and every
other Finance Document shall become immediately due and payable or, as
the case may be, payable on demand.
18.5 MULTIPLE NOTICES; ACTION WITHOUT NOTICE. The Lender may serve notices
Clauses 18.2(a) and (b) simultaneously or on different dates and it may
take any action referred to in Clause 18.2 if no such notice is served
or simultaneously with or at any time after the service of both or
either of such notices.
18.6 EXCLUSION OF XXXXXX XXXXXXXXX. Neither the Lender nor any receiver or
manager appointed by the Lender, shall have any liability to a Borrower
or a Security Party:
(a) for any loss caused by an exercise of rights under, or enforcement of a
Security Interest created by, a Finance Document or by any failure or
delay to exercise such a right or to enforce such a Security Interest;
or
(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 a Security Interest or for any reduction (however
caused) in the value of such an asset,
except that this does not exempt the Lender or a receiver or manager
from liability for losses shown to have been caused directly and mainly
by the dishonesty or the wilful misconduct of the Lender's own officers
and employees or (as the case may be) such receiver's or manager's own
partners or employees.
18.7 RELEVANT PERSONS. In this Clause 18 a "RELEVANT PERSON" means a
Borrower, a Security Party, and any company which is a subsidiary of a
Borrower.
18.8 INTERPRETATION. In Clause 18.1(f) references to an event of default or
a termination event include any event, howsoever described, which is
similar to an event of default in a
47
facility agreement or a termination event in a finance lease; and in
Clause 18.1(g) "PETITION" includes an application.
19 FEES AND EXPENSES
19.1 ARRANGEMENT FEE. The Borrowers shall pay to the Lender on the date of
this Agreement, a non-refundable arrangement fee of $67,000.
19.2 COSTS OF NEGOTIATION, PREPARATION ETC. The Borrowers shall pay to the
Lender on its demand the amount of all expenses incurred by the Lender
in connection with the negotiation, preparation, execution or
registration of any Finance Document or any related document or with
any transaction contemplated by a Finance Document or a related
document.
19.3 COSTS OF VARIATIONS, AMENDMENTS, ENFORCEMENT ETC. The Borrowers shall
pay to the Lender, on the Lender's demand, the amount of all expenses
incurred by the Lender in connection with:
(a) any amendment or supplement to a Finance Document, or any proposal for
such an amendment to be made;
(b) any consent or waiver by the Lender concerned under or in connection
with a Finance Document, or any request for such a consent or waiver;
(c) the valuation of any security provided or offered under Clause 14 or
any other matter relating to such security; or
(d) any step taken by the Lender with a view to the protection, exercise or
enforcement of any right or Security Interest created by a Finance
Document or for any similar purpose.
There shall be recoverable under paragraph (d) the full amount of all
legal expenses, whether or not such as would be allowed under rules of
court or any taxation or other procedure carried out under such rules.
19.4 DOCUMENTARY TAXES. The Borrowers shall promptly pay any tax payable on
or by reference to any Finance Document, and shall, on the Lender's
demand, fully indemnify the Lender against any claims, expenses,
liabilities and losses resulting from any failure or delay by the
Borrowers to pay such a tax.
19.5 CERTIFICATION OF AMOUNTS. A notice which is signed by 2 officers of the
Lender, which states that a specified amount, or aggregate amount, is
due to the Lender under this Clause 19 and which indicates (without
necessarily specifying a detailed breakdown) the matters in respect of
which the amount, or aggregate amount, is due shall be prima facie
evidence that the amount, or aggregate amount, is due.
20 INDEMNITIES
20.1 INDEMNITIES REGARDING BORROWING AND REPAYMENT OF LOAN. The Borrowers
shall fully indemnify made or brought against the Lender on its demand
in respect of all claims, expenses, liabilities and losses which are
incurred by the Lender, or which the Lender reasonably and with due
diligence estimates that it will incur, as a result of or in connection
with:
(a) an Advance not being borrowed on the date specified in the Drawdown
Notice for any reason other than a default by the Lender;
48
(b) the receipt or recovery of all or any part of the Loan or an overdue
sum otherwise than on the last day of an Interest Period or other
relevant period;
(c) any failure (for whatever reason) by the Borrowers to make payment of
any amount due under a Finance Document on the due date or, if so
payable, on demand (after giving credit for any default interest paid
by the Borrowers on the amount concerned under Clause 6);
(d) the occurrence and/or continuance of an Event of Default or a Potential
Event of Default and/or the acceleration of repayment of the Loan under
Clause 18,
and in respect of any tax (other than tax on its overall net income)
for which the Lender is liable in connection with any amount paid or
payable to the Lender (whether for its own account or otherwise) under
any Finance Document.
20.2 BREAKAGE COSTS. Without limiting its generality, Clause 20.1 covers any
claim, expense, liability or loss, including a loss of a prospective
profit, incurred by the Lender:
(a) in liquidating or employing deposits from third parties acquired or
arranged to fund or maintain all or any part of the Loan and/or any
overdue amount (or an aggregate amount which includes the Loan or any
overdue amount); and
(b) in terminating, or otherwise in connection with, any interest and/or
currency swap or any other transaction entered into (whether with
another legal entity or with another office or department of the
Lender) to hedge any exposure arising under this Agreement or a number
of transactions of which this Agreement is one.
20.3 MISCELLANEOUS INDEMNITIES. The Borrowers shall fully indemnify the
Lender on its demand in respect of all claims, expenses, liabilities
and losses which may be made or brought against or incurred by the
Lender, in any country, as a result of or in connection with:
(a) any action taken, or omitted or neglected to be taken, under or in
connection with any Finance Document by the Lender or by any receiver
appointed under a Finance Document;
(b) any other Pertinent Matter,
other than claims, expenses, liabilities and losses which are shown to
have been directly and mainly caused by the dishonesty or wilful
misconduct of the officers or employees of the Lender.
Without prejudice to its generality, this Clause 20.3 covers any
claims, expenses, liabilities and losses which arise, or are asserted,
under or in connection with any law relating to safety at sea, the ISM
Code, the ISPS Code or any Environmental Law.
20.4 CURRENCY INDEMNITY. If any sum due from any Borrower or any Security
Party to the Lender under a Finance Document or under any order or
judgment relating to a Finance Document has to be converted from the
currency in which the Finance Document provided for the sum to be paid
(the "CONTRACTUAL CURRENCY") into another currency (the "PAYMENT
CURRENCY") for the purpose of:
(a) making or lodging any claim or proof against any Borrower or any
Security Party, whether in its liquidation, any arrangement involving
it or otherwise; or
49
(b) obtaining an order or judgment from any court or other tribunal; or
(c) enforcing any such order or judgment,
the Borrowers shall indemnify the Lender against the loss arising when
the amount of the payment actually received by the Lender is converted
at the available rate of exchange into the Contractual Currency.
In this Clause 20.4, the "AVAILABLE RATE OF EXCHANGE" means the rate at
which the Lender is able at the opening of business (London time) on
the Business Day after it receives the sum concerned to purchase the
Contractual Currency with the Payment Currency.
This Clause 20.4 creates a separate liability of the Borrowers which is
distinct from their other liabilities under the Finance Documents and
which shall not be merged in any judgment or order relating to those
other liabilities.
20.5 APPLICATION OF MASTER AGREEMENT. For the avoidance of doubt, Clause
20.4 does not apply in respect of sums due from the Borrowers to the
Lender under or in connection with the Master Agreement as to which
sums the provisions of Section 8 (Contractual Currency) of the Master
Agreement shall apply.
20.6 CERTIFICATION OF AMOUNTS. A notice which is signed by 2 officers of the
Lender, which states that a specified amount, or aggregate amount, is
due to the Lender under this Clause 20 and which indicates (without
necessarily specifying a detailed breakdown) the matters in respect of
which the amount, or aggregate amount, is due shall be prima facie
evidence that the amount, or aggregate amount, is due.
21 NO SET-OFF OR TAX DEDUCTION
21.1 NO DEDUCTIONS. All amounts due from the Borrowers under a Finance
Document shall be paid:
(a) without any form of set-off, cross-claim or condition; and
(b) free and clear of any tax deduction except a tax deduction which a
Borrower is required by law to make.
21.2 GROSSING-UP FOR TAXES. If a Borrower is required by law to make a tax
deduction from any payment:
(a) that Borrower shall notify the Lender as soon as it becomes aware of
the requirement;
(b) that Borrower shall pay the tax deducted to the appropriate taxation
authority promptly, and in any event before any fine or penalty arises;
and
(c) the amount due in respect of the payment shall be increased by the
amount necessary to ensure that the Lender receives and retains (free
from any liability relating to the tax deduction) a net amount which,
after the tax deduction, is equal to the full amount which it would
otherwise have received.
21.3 EVIDENCE OF PAYMENT OF TAXES. Within one month after making any tax
deduction, the Borrower concerned shall deliver to the Lender
documentary evidence satisfactory to the Lender that the tax had been
paid to the appropriate taxation authority.
50
21.4 EXCLUSION OF TAX ON OVERALL NET INCOME. In this Clause 21 "TAX
DEDUCTION" means any deduction or withholding for or on account of any
present or future tax except tax on the Lender's overall net income.
21.5 APPLICATION OF MASTER AGREEMENT. For the avoidance of doubt, Xxxxxx 21
does not apply in respect of sums due from the Borrowers to the Lender
under or in connection with the Master Agreement as to which sums the
provisions of Section 2(d) (Deduction or Withholding for Tax) of the
Master Agreement shall apply.
22 ILLEGALITY, ETC
22.1 ILLEGALITY. This Clause 22 applies if the Lender notifies the Borrowers
that it has become, or will with effect from a specified date, become:
(a) unlawful or prohibited as a result of the introduction of a new law, an
amendment to an existing law or a change in the manner in which an
existing law is or will be interpreted or applied; or
(b) contrary to, or inconsistent with, any regulation,
for the Lender to maintain or give effect to any of its obligations
under this Agreement in the manner contemplated by this Agreement.
22.2 NOTIFICATION AND EFFECT OF ILLEGALITY. On the Lender notifying the
Borrowers under Clause 22.1, the Commitment shall terminate; and
thereupon or, if later, on the date specified in the Lender's notice
under Clause 22.1 as the date on which the notified event would become
effective the Borrowers shall prepay the Loan in full in accordance
with Clause 7.
22.3 MITIGATION. If circumstances arise which would result in a notification
under Clause 22.1 then, without in any way limiting the rights of the
Lender under Clause 22.3, the Lender shall use reasonable endeavours to
transfer its obligations, liabilities and rights under this Agreement
and the Finance Documents to another office or financial institution
not affected by the circumstances but the Lender shall not be under any
obligation to take any such action if, in its opinion, to do would or
might:
(a) have an adverse effect on its business, operations or financial
condition; or
(b) involve it in any activity which is unlawful or prohibited or any
activity that is contrary to, or inconsistent with, any regulation; or
(c) involve it in any expense (unless indemnified to its satisfaction) or
tax disadvantage.
23 INCREASED COSTS
23.1 INCREASED COSTS. This Clause 23 applies if the Lender notifies the
Borrowers that it considers that as a result of:
(a) the introduction or alteration after the date of this Agreement of a
law or an alteration after the date of this Agreement in the manner in
which a law is interpreted or applied (disregarding any effect which
relates to the application to payments under this Agreement of a tax on
the Lender's overall net income); or
(b) complying with any regulation (including any which relates to capital
adequacy or liquidity controls or which affects the manner in which the
Lender allocates capital
51
resources to its obligations under this Agreement) which is introduced,
or altered, or the interpretation or application of which is altered,
after the date of this Agreement,
the Lender (or a parent company of it) has incurred or will incur an
"INCREASED COST".
23.2 MEANING OF "INCREASED COST". In this Clause 23, "INCREASED COST" means:
(a) an additional or increased cost incurred as a result of, or in
connection with, the Lender having entered into, or being a party to,
this Agreement or having taken an assignment of rights under this
Agreement, of funding or maintaining the Commitment or performing its
obligations under this Agreement, or of having outstanding all or any
part of the Loan or other unpaid sums; or
(b) a reduction in the amount of any payment to the Lender under this
Agreement or in the effective return which such a payment represents to
the Lender or on its capital;
(c) an additional or increased cost of funding all or maintaining all or
any of the advances comprised in a class of advances formed by or
including the Loan or (as the case may require) the proportion of that
cost attributable to the Loan; or
(d) a liability to make a payment, or a return foregone, which is
calculated by reference to any amounts received or receivable by the
Lender under this Agreement,
but not an item attributable to a change in the rate of tax on the
overall net income of the Lender (or a parent company of it) or an item
covered by the indemnity for tax in Clause 20.1 or by Clause 21.
For the purposes of this Clause 23.2 the Lender may in good faith
allocate or spread costs and/or losses among its assets and liabilities
(or any class of its assets and liabilities) on such basis as it
considers appropriate.
23.3 PAYMENT OF INCREASED COSTS. The Borrowers shall pay to the Lender, on
its demand, the amounts which the Lender from time to time notifies the
Borrowers that it has specified to be necessary to compensate it for
the increased cost.
23.4 NOTICE OF PREPAYMENT. If the Borrowers are not willing to continue to
compensate the Lender for the increased cost under Clause 23.3, the
Borrowers may give the Lender not less than 14 days' notice of their
intention to prepay the Loan at the end of an Interest Period.
23.5 PREPAYMENT. A notice under Clause 23.4 shall be irrevocable; and on the
date specified in the Borrowers' notice of intended prepayment, the
Commitment shall terminate and the Borrowers shall prepay (without
premium or penalty) the Loan, together with accrued interest thereon at
the applicable rate plus the Margin.
23.6 APPLICATION OF PREPAYMENT. Clause 7 shall apply in relation to the
prepayment.
24 SET-OFF
24.1 APPLICATION OF CREDIT BALANCES. The Lender may, following the
occurrence of an Event of Default which is continuing:
(a) apply any balance (whether or not then due) which at any time stands to
the credit of any account in the name of a Borrower at any office in
any country of the Lender in or
52
towards satisfaction of any sum then due from that Borrower to the
Lender under any of the Finance Documents; and
(b) for that purpose:
(i) break, or alter the maturity of, all or any part of a deposit
of that Borrower;
(ii) convert or translate all or any part of a deposit or other
credit balance into Dollars; and
(iii) enter into any other transaction or make any entry with regard
to the credit balance which the Lender considers appropriate.
24.2 EXISTING RIGHTS UNAFFECTED. The Lender shall not be obliged to exercise
any of its rights under Clause 24.1; and those rights shall be without
prejudice and in addition to any right of set-off, combination of
accounts, charge, lien or other right or remedy to which the Lender is
entitled (whether under the general law or any document).
24.3 NO SECURITY INTEREST. This Clause 24 gives the Lender a contractual
right of set-off only, and does not create any equitable charge or
other Security Interest over any credit balance of the Borrower.
25 TRANSFERS AND CHANGES IN LENDING OFFICE
25.1 TRANSFER BY BORROWERS. No Borrower may, without the consent of the
Lender transfer any of its rights or obligations under any Finance
Document.
25.2 ASSIGNMENT BY XXXXXX. The Lender may assign all or any of the rights
and interests which it has under or by virtue of the Finance Documents
without the consent of any Borrower.
25.3 RIGHTS OF ASSIGNEE. In respect of any breach of a warranty,
undertaking, condition or other provision of a Finance Document, or any
misrepresentation made in or in connection with a Finance Document, a
direct or indirect assignee of any of the Lender's rights or interests
under or by virtue of the Finance Documents shall be entitled to
recover damages by reference to the loss incurred by that assignee as a
result of the breach or misrepresentation irrespective of whether the
Lender would have incurred a loss of that kind or amount.
25.4 SUB-PARTICIPATION; SUBROGATION ASSIGNMENT. The Lender may
sub-participate all or any part of its rights and/or obligations under
or in connection with the Finance Documents without the consent of, or
any notice to, any Borrower; and the Lender may assign, in any manner
and terms agreed by it, all or any part of those rights to an insurer
or surety who has become subrogated to them.
25.5 DISCLOSURE OF INFORMATION. The Lender may disclose to a potential
assignee or sub-participant any information which the Lender has
received in relation to any Borrower, any Security Party or their
affairs under or in connection with any Finance Document, unless the
information is clearly of a confidential nature.
25.6 CHANGE OF LENDING OFFICE. The Lender may change its lending office by
giving notice to the Borrowers and the change shall become effective on
the later of:
(a) the date on which the Borrowers receive the notice; and
53
(b) the date, if any, specified in the notice as the date on which the
change will come into effect.
26 VARIATIONS AND WAIVERS
26.1 VARIATIONS, WAIVERS ETC. BY XXXXXX. A document shall be effective to
vary, waive, suspend or limit any provision of a Finance Document, or
the Lender's rights or remedies under such a provision or the general
law, only if the document is signed, or specifically agreed to by fax
or telex, by the Borrowers and the Lender and, if the document relates
to a Finance Document to which a Security Party is party, by that
Security Party.
26.2 EXCLUSION OF OTHER OR IMPLIED VARIATIONS. Except for a document which
satisfies the requirements of Clause 26.1, no document, and no act,
course of conduct, failure or neglect to act, delay or acquiescence on
the part of the Lender (or any person acting on its behalf) shall
result in the Lender (or any person acting on its behalf) being taken
to have varied, waived, suspended or limited, or being precluded
(permanently or temporarily) from enforcing, relying on or exercising:
(a) a provision of this Agreement or another Finance Document; or
(b) an Event of Default; or
(c) a breach by a Borrower or a Security Party of an obligation under a
Finance Document or the general law; or
(d) any right or remedy conferred by any Finance Document or by the general
law;
and there shall not be implied into any Finance Document any term or
condition requiring any such provision to be enforced, or such right or
remedy to be exercised, within a certain or reasonable time.
27 NOTICES
27.1 GENERAL. Unless otherwise specifically provided, any notice under or in
connection with any Finance Document shall be given by letter or fax;
and references in the Finance Documents to written notices, notices in
writing and notices signed by particular persons shall be construed
accordingly.
27.2 ADDRESSES FOR COMMUNICATIONS. A notice shall be sent:
(a) to a Borrower: c/o Stealthgas Inc.
000 Xxxxxxxxx Xxxxxx
Xxxxxxxx 000 00
Xxxxxx
Fax No: x00 000 000 0000
(b) to the Lender: Fortis Bank N.V./S.A.
000 Xxxxxxx Xxxxxx
000 00 Xxxxxx
Xxxxxx
Fax No: x00 000 000 0000
and in the event that a notice
concerns the Master Agreement, with
a copy to:
54
Fortis Bank Oslo
Haakon XXX Xxxx 00
0000 Xxxx
Xxxxxx
Fax No: + 00 0000 0000
or to such other address as the relevant party may notify the other.
27.3 EFFECTIVE DATE OF NOTICES. Subject to Clauses 27.4 and 27.5:
(a) a notice which is delivered personally or posted shall be deemed to be
served, and shall take effect, at the time when it is delivered; and
(b) a notice which is sent by telex or fax shall be deemed to be served,
and shall take effect, 2 hours after its transmission is completed.
27.4 SERVICE OUTSIDE BUSINESS HOURS. However, if under Clause 27.3 a notice
would be deemed to be served:
(a) on a day which is not a business day in the place of receipt; or
(b) on such a business day, but after 5 p.m. local time,
the notice shall (subject to Clause 27.5) be deemed to be served, and
shall take effect, at 9 a.m. on the next day which is such a business
day.
27.5 ILLEGIBLE NOTICES. Clauses 27.3 and 27.4 do not apply if the recipient
of a notice notifies the sender within 1 hour after the time at which
the notice would otherwise be deemed to be served that the notice has
been received in a form which is illegible in a material respect.
27.6 ENGLISH LANGUAGE. Any notice under or in connection with a Finance
Document shall be in English.
27.7 VALID NOTICES. A notice under or in connection with a Finance Document
shall not be invalid by reason that its contents or the manner of
serving it do not comply with the requirements of this Agreement or,
where appropriate, any other Finance Document under which it is served
if:
(a) the failure to serve it in accordance with the requirements of this
Agreement or other Finance Document, as the case may be, has not caused
any party to suffer any significant loss or prejudice; or
(b) in the case of incorrect and/or incomplete contents, it should have
been reasonably clear to the party on which the notice was served what
the correct or missing particulars should have been.
27.8 MEANING OF "NOTICE". In this Clause 28 "NOTICE" includes any demand,
consent, authorisation, approval, instruction, waiver or other
communication.
55
28 JOINT AND SEVERAL LIABILITY
28.1 GENERAL. All liabilities and obligations of the Borrowers under this
Agreement shall, whether expressed to be so or not, be several and, if
and to the extent consistent with Clause 28.2, joint.
28.2 NO IMPAIRMENT OF XXXXXXXX'S OBLIGATIONS. The liabilities and
obligations of a Borrower shall not be impaired by:
(a) this Agreement being or later becoming void, unenforceable or illegal
as regards any other Borrower;
(b) the Lender entering into any rescheduling, refinancing or other
arrangement of any kind with any other Borrower;
(c) the Lender releasing any other Borrower or any Security Interest
created by a Finance Document; or
(d) any combination of the foregoing.
28.3 PRINCIPAL DEBTORS. Each Borrower declares that it is and will,
throughout the Security Period, remain a principal debtor for all
amounts owing under this Agreement and the Finance Documents and no
Borrower shall in any circumstances be construed to be a surety for the
obligations of any other Borrower under this Agreement.
28.4 SUBORDINATION. Subject to Clause 28.5, during the Security Period, no
Borrower shall:
(a) claim any amount which may be due to it from any other Borrower whether
in respect of a payment made, or matter arising out of, this Agreement
or any Finance Document, or any matter unconnected with this Agreement
or any Finance Document; or
(b) take or enforce any form of security from any other Borrower for such
an amount, or in any other way seek to have recourse in respect of such
an amount against any asset of any other Borrower; or
(c) set off such an amount against any sum due from it to any other
Borrower; or
(d) prove or claim for such an amount in any liquidation, administration,
arrangement or similar procedure involving any other Borrower or other
Security Party; or
(e) exercise or assert any combination of the foregoing.
28.5 BORROWER'S REQUIRED ACTION. If during the Security Period, the Lender,
by notice to a Borrower, requires it to take any action referred to in
paragraphs (a) to (d) of Clause 28.4, in relation to any other
Borrower, that Borrower shall take that action as soon as practicable
after receiving the Lender's notice.
29 SUPPLEMENTAL
29.1 RIGHTS CUMULATIVE, NON-EXCLUSIVE. The rights and remedies which the
Finance Documents give to the Lender are:
(a) cumulative;
(b) may be exercised as often as appears expedient; and
56
(c) shall not, unless a Finance Document explicitly and specifically states
so, be taken to exclude or limit any right or remedy conferred by any
law.
29.2 SEVERABILITY OF PROVISIONS. If any provision of a Finance Document is
or subsequently becomes void, unenforceable or illegal, that shall not
affect the validity, enforceability or legality of the other provisions
of that Finance Document or of the provisions of any other Finance
Document.
29.3 COUNTERPARTS. A Finance Document may be executed in any number of
counterparts.
29.4 THIRD PARTY RIGHTS. A person who is not a party to this Agreement has
no right under the Contracts (Rights of Third Parties) Act 1999 to
enforce or to enjoy the benefit of any term of this Agreement.
30 LAW AND JURISDICTION
30.1 ENGLISH LAW. This Agreement shall be governed by, and construed in
accordance with, English law.
30.2 EXCLUSIVE ENGLISH JURISDICTION. Subject to Clause 30.3, the courts of
England shall have exclusive jurisdiction to settle any disputes which
may arise out of or in connection with this Agreement.
30.3 CHOICE OF FORUM FOR THE EXCLUSIVE BENEFIT OF THE LENDER. Clause 30.2 is
for the exclusive benefit of the Lender, which reserves the rights:
(a) to commence proceedings in relation to any matter which arises out of
or in connection with this Agreement in the courts of any country other
than England and which have or claim jurisdiction to that matter; and
(b) to commence such proceedings in the courts of any such country or
countries concurrently with or in addition to proceedings in England or
without commencing proceedings in England. Neither Borrower shall
commence any proceedings in any country other than England in relation
to a matter which arises out of or in connection with this Agreement.
30.4 PROCESS AGENT. Each Borrower irrevocably appoints Xxxxxxxx Xxxxxx at
its registered office for the time being, presently at Beaufort House,
00 Xx. Xxxxxxx Xxxxxx, Xxxxxx XX0X 0XX, Xxxxxxx, to act as its agent to
receive and accept on its behalf any process or other document relating
to any proceedings in the English courts which are connected with this
Agreement.
30.5 XXXXXX'S RIGHTS UNAFFECTED. Nothing in this Clause 30 shall exclude or
limit any right which the Lender may have (whether under the law of any
country, an international convention or otherwise) with regard to the
bringing of proceedings, the service of process, the recognition or
enforcement of a judgment or any similar or related matter in any
jurisdiction.
30.6 MEANING OF "PROCEEDINGS". In this Clause 30, "PROCEEDINGS" means
proceedings of any kind, including an application for a provisional or
protective measure.
THIS AGREEMENT has been entered into on the date stated at the beginning of this
Agreement.
57
SCHEDULE 1
DRAWDOWN NOTICE
To: Fortis Bank (Nederland) N.V.
000 Xxxxxxx Xxxxxx
000 00 Xxxxxx
Xxxxxx
Attention: Xxxxx Xxxxxx
2006
DRAWDOWN NOTICE
1 We refer to the loan agreement (the "LOAN AGREEMENT") dated [o] May
2006 and made between us, as Borrowers, and you, as Lender, in
connection with a facility of up to US$79,850,000. Terms defined in the
Loan Agreement have their defined meanings when used in this Drawdown
Notice.
2 We request to borrow [the Refinancing Advance] [a New Ship Advance in
relation to "[o]"] as follows:
(a) Amount: US$[o];
(b) Drawdown Date: [o];
(c) Duration of the first Interest Period shall be [o] months;
(d) Payment instructions : account in our name and numbered [o] with [o] of
[o].
3 We represent and warrant that:
(e) the representations and warranties in Clause 9 of the Loan Agreement
would remain true and not misleading if repeated on the date of this
notice with reference to the circumstances now existing;
(f) no Event of Default or Potential Event of Default has occurred or will
result from the borrowing of the Loan.
4 This notice cannot be revoked without the prior consent of the Lender.
[Name of Signatory]
.....................................
Authorised Signatory
for and on behalf of
MATRIX GAS TRADING LTD., VCM TRADING LTD.,
GENEVE BUTANE INC., LPGONE LTD.,
SEMICHLAUS EXPORTS LTD., VENTSPILS GASES LTD.,
PACIFIC GASES LTD., ARACRUZ TRADING LTD.,
INDUSTRIAL MATERIALS INC., ENERGETIC PENINSULA LIMITED, OXFORDGAS
LIMITED, OCEAN BLUE LIMITED AND STEALTHGAS INC.
58
SCHEDULE 2
DETAILS OF BORROWERS
---------------------------------------------------------------------------------------------------------------------------------
SHAREHOLDER(S), EACH
COUNTRY OF AUTHORISED SHARE ISSUED SHARE INCORPORATED IN THE
BORROWER REGISTERED ADDRESS INCORPORATION CAPITAL CAPITAL XXXXXXXX ISLANDS
---------------------------------------------------------------------------------------------------------------------------------
Aracruz Trading Ltd. Trust Company Complex, Xxxxxxxx Islands 100 registered 100 registered Xxxxxxx Enterprises S.A.
Ajeltake Road, Ajeltake and/or bearer shares by way of
Island, Majuro, Marshall shares of no par stock certificate
Islands, MH96960 value no. 1
---------------------------------------------------------------------------------------------------------------------------------
Geneve Butane Inc. Trust Company Complex, Xxxxxxxx Islands 100 registered 100 registered Access Consultants Co.
Ajeltake Road, Ajeltake and/or bearer shares by way of
Island, Majuro, Marshall shares of no par stock certificate
Islands, MH96960 value no. 1
---------------------------------------------------------------------------------------------------------------------------------
Industrial Trust Company Complex, Xxxxxxxx Islands 100 registered 100 registered Lyonet Holdings Corp.
Materials Inc. Ajeltake Road, Ajeltake and/or bearer shares by way of
Island, Majuro, Marshall shares of no par stock certificate
Islands, MH96960 value no. 1
---------------------------------------------------------------------------------------------------------------------------------
Lpgone Ltd. Trust Company Complex, Xxxxxxxx Islands 100 registered 100 registered Atlas Investments S.A.
Ajeltake Road, Ajeltake and/or bearer shares by way of
Island, Majuro, Marshall shares of no par stock certificate
Islands, MH96960 value no. 1
---------------------------------------------------------------------------------------------------------------------------------
59
-----------------------------------------------------------------------------------------------------------------------------------
Matrix Gas Trust Company Complex, Xxxxxxxx Islands 100 registered 100 registered Heather Trading S.A.
Trading Ltd. Ajeltake Road, Ajeltake and/or bearer shares by way of
Island, Majuro, Marshall shares of no par stock certificate
Islands, MH96960 value no. 1
-----------------------------------------------------------------------------------------------------------------------------------
Pacific Gases Ltd. 000/0 Xx. Xxxxx Xxxxxx Malta 2000 shares of 500 shares of LM1 Alexis Shipholding X.X.
Xxxxxxxx, Malta LM1 each each, each (325 shares) and Grazia
20% paid up Maritime Ltd. (175 shares)
-----------------------------------------------------------------------------------------------------------------------------------
Semichlaus 000/0 Xx. Xxxxx Xxxxxx Malta 2000 shares of 500 shares of LM1 Xxxxx Properties Co.(325
Exports Ltd. Valletta, Malta LM1 each each, each shares) and Aubine
20% paid up Services Ltd. (175 shares)
-----------------------------------------------------------------------------------------------------------------------------------
VCM Trading Ltd. Trust Company Complex, Xxxxxxxx Islands 100 registered 100 registered Leader Investments Inc.
Ajeltake Road, Ajeltake and/or bearer shares by way of
Island, Majuro, Marshall shares of no par stock certificate
Islands, MH96960 value no. 1
-----------------------------------------------------------------------------------------------------------------------------------
Ventspils Gases Ltd. 000/0 Xx. Xxxxx Xxxxxx Malta 2000 shares of 500 shares of LM1 Xxxxxx Trading Limited
Valletta, Malta LM1 each each, each (325 shares) and
20% paid up Celidon Investments Inc.
(175 shares)
-----------------------------------------------------------------------------------------------------------------------------------
Oxfordgas Limited Trust Company Complex, Xxxxxxxx Islands 100 registered 100 registered Xxxxxx Trading Company
Ajeltake Road, Ajeltake and/or bearer shares by way of
Island, Majuro, Marshall shares of no par stock certificate
Islands, MH96960 value no. 1
-----------------------------------------------------------------------------------------------------------------------------------
Energetic Peninsula [o], Hong Kong Hong Kong 1000 registered 1000 registered Stealthgas Inc.
Limited shares of HK$1 shares by way of
each share certificate
no. [1]
-----------------------------------------------------------------------------------------------------------------------------------
60
-----------------------------------------------------------------------------------------------------------------------------------
Ocean Blue Limited Trust Company Complex, Xxxxxxxx Islands 100 registered 100 registered Neutron Marine Corp.
Ajeltake Road, Ajeltake and/or bearer shares by way of
Island, Majuro, Marshall shares of no par stock certificate
Islands, MH96960 value no. 1
-----------------------------------------------------------------------------------------------------------------------------------
Stealthgas Inc. Trust Company Complex, Xxxxxxxx Islands 50,000,000 14,000,000 The shares are publicly
Ajeltake Road, Ajeltake registered registered shares traded
Island, Majuro, Marshall shares of $0.01 of $0.01 each
Islands, MH96960 each and
5,000,000 shares
of preferred
stock of $0.01
each
-----------------------------------------------------------------------------------------------------------------------------------
61
SCHEDULE 3
DETAILS OF SHIPS
----------------------------------------------------------------------------------------------------------
SHIP FLAG OWNER CLASS NOTATION CLASSIFICATION SOCIETY
----------------------------------------------------------------------------------------------------------
"XXXXXX XXXXX Panama Industrial NS* (Tanker, Liquefied Nippon Kaiji Kyokai
Gases-Maximum Pressure
1.77 MPa and Minimum
Temperature 0 deg C Type
2PG) MNS*
----------------------------------------------------------------------------------------------------------
"GAS AMAZON" Xxxxxxxx Islands Aracruz 1 + HULL + MACH Liquefied Bureau Veritas
gas carrier Unrestricted
navigation + AUT UMS
----------------------------------------------------------------------------------------------------------
"GAS ARCTIC" Malta Ventspils C + Liquefied Gas Carrier RINA
Unrestricted Navigation,
+ AUT-UMS; MON-SHAPT; ICE
CLASS 1B
----------------------------------------------------------------------------------------------------------
"GAS COURCHEVEL" Xxxxxxxx Islands Geneve 1 + HULL + MACH Liquefied Bureau Veritas
gas carrier Unrestricted
navigation ICE CLASS 1C
+ AUT UMS
----------------------------------------------------------------------------------------------------------
"GAS EMPEROR" Cyprus Pacific 1 + HULL + MACH Liquefied Bureau Veritas
gas carrier Unrestricted
navigation
----------------------------------------------------------------------------------------------------------
"GAS ICE" Malta Semichlaus C + Liquefied Gas Carrier RINA
Unrestricted Navigation,
+ AUT-UMS; MON-SHAPT; ICE
CLASS 1B
----------------------------------------------------------------------------------------------------------
62
----------------------------------------------------------------------------------------------------------
"GAS PROPHET" Xxxxxxxx Islands VCM NS* (Tanker Liquefied Gases
- Maximum Pressure 1.77 MPa Nippon Kaiji Kyokai
and Minimum Temperature 0 deg
C Type 2PG) MNS*
----------------------------------------------------------------------------------------------------------
"GAS TINY" Xxxxxxxx Islands Lpgone 1 + HULL + MACH Liquefied Bureau Veritas
gas carrier Unrestricted
navigation
----------------------------------------------------------------------------------------------------------
"GAS SHANGHAI" Xxxxxxxx Islands Matrix + A1, Liquefied gas carrier, American Bureau of
(E), + AMS Shipping
----------------------------------------------------------------------------------------------------------
"SIR IVOR" Hong Kong Energetic +100A1 (Liquefied Gas Lloyd's Register of
Carrier) IMO type II PG Shipping
----------------------------------------------------------------------------------------------------------
"LYNE" Panama Oxfordgas NS*MNS* (Tanker, Liquefied Nippon Kaiji Kyokai
Gas)
----------------------------------------------------------------------------------------------------------
"GAS NEMESIS" Xxxxxxxx Islands Ocean NS* (Tanker, Liquefied Nippon Kaiji Kyokai
Gases, Maximum Pressure
18.0kg/cm(2) and Miniumum
Temperature 0 deg C, Type 2PG)
MNS*
----------------------------------------------------------------------------------------------------------
63
SCHEDULE 4
CONDITION PRECEDENT DOCUMENTS
PART A
The following are the documents referred to in Clause 8.1(a).
1 A duly executed original of each Finance Document (and of each document
required to be delivered by each Finance Document) other than those
referred to in Part B or Part C.
2 Copies of the constitutional documents of each Borrower and each
Security Party.
3 Copies of resolutions of the shareholders and directors of each
Borrower and each Security Party authorising the execution of each of
the Finance Documents to which that Borrower or that Security Party is
a party and, in the case of a Borrower, authorising named officers to
give the Drawdown Notices and other notices under this Agreement, and
(a) in the case of each Buyer, ratifying the execution of the MOA to
which it is a party and (b) in the case of each Shipowner which is a
party to a Bareboat Charter, ratifying the execution of the Bareboat
Charter to which it is a party.
4 The original of any power of attorney under which any Finance Document
is executed on behalf of the Borrower or a Security Party.
5 Copies of all consents which any Borrower or any Security Party
requires to enter into, or make any payment under, any Finance Document
or an MOA.
6 The originals of any mandates or other documents required in connection
with the opening or operation of the Earnings Account and the Retention
Account and all other information required by the Lender in relation to
its "know your customer" regulations (whether in connection with the
opening of the Earnings Account, the Retention Account or otherwise).
7 Documentary evidence that the agent for service of process named in
Clause 30 has accepted its appointment.
8 If the Lender so requires, in respect of any of the documents referred
to above, a certified English translation prepared by a translator
approved by the Lender.
64
PART B
The following are the documents referred to in Clause 8.1(b).
1 A duly executed original of the Mortgage, the General Assignment and,
if applicable, the Deed of Covenant (and of each document to be
delivered under each of them) relating to each Existing Ship.
2 A duly executed original of the Xxxxxx Xxxxx Bareboat Charter
Assignment, the Xxxxxx Xxxxx Charterer's Insurance Assignments, the Gas
Arctic Tripartite Agreement and the Gas Ice Tripartite Agreement (and
of each document to be delivered under each of them).
3 Documentary evidence that:
(a) in accordance with the information contained in Schedule 3, each
Existing Ship is definitively and permanently registered in the name of
the relevant Shipowner under the flag and at the port specified in
Schedule 3;
(b) each of "GAS ARCTIC" and "GAS ICE" is registered in the name of Finaval
at the bareboat charter registry of Palermo, Italy and notice of the
Lender's Mortgage over each such Ship has been included within the
Ship's certificate of registration at the Palermo bareboat charter
registry;
(c) each Existing Ship is in the absolute and unencumbered ownership of its
Shipowner save as contemplated by the Finance Documents;
(d) each Existing Ship maintains the class as set out in Schedule 3 with
the relevant classification society free of all overdue recommendations
and conditions of such classification society;
(e) the Mortgage relating to each Existing Ship has been duly registered
against that Ship as a valid first preferred or priority (as the case
may be) ship mortgage in accordance with the laws of the relevant flag
state; and
(f) each Existing Ship is insured in accordance with the provisions of this
Agreement and all requirements therein in respect of insurances have
been complied with.
3 In the case of each of "XXXXXX XXXXX", "GAS ARCTIC" and "GAS ICE",
documentary evidence that:
(a) each such Existing Ship is operating under the Bareboat Charter
relative to it;
(b) copies of the constitutional documents of each Bareboat Charterer
(other than Xxxxxxxx);
(c) copies of resolutions of the directors of each Bareboat Charterer
(other than Xxxxxxxx) authorising the execution of the Finance
Documents to which it is a party; and
(d) the original power of attorney under which any Finance Document is
executed on behalf of a Bareboat Charterer (other than Xxxxxxxx).
4 Documents establishing that each Existing Ship will, as from the
Drawdown Date relative to the Refinancing Advance, be managed by the
applicable Approved Manager on terms acceptable to the Lender, together
with, in relation to each Existing Ship:
65
(a) a letter of undertaking executed by the applicable Approved Manager in
favour of the Lender in the terms required by the Lender agreeing
certain matters in relation to the management of that Existing Ship and
subordinating the rights of the Approved Manager against the relevant
Shipowner to the rights of the Lender under the Finance Documents; and
(b) copies of the Approved Manager's Document of Compliance and the Safety
Management Certificate and International Ship Security Certificate in
respect of that Existing Ship (together with any other details of the
applicable safety management system which the Lender requires).
5 Satisfactory valuations of each Existing Ship addressed to the Lender,
stated to be for the purposes of this Agreement and dated not earlier
than 30 days before the Drawdown Date for the Refinancing Advance, from
2 independent London sale and purchase shipbroker selected by the
Lender.
6 A favourable opinion from an independent insurance consultant
acceptable to the Lender on such matters relating to the insurances for
the Existing Ships as the Lender may approve.
7 Favourable legal opinions from lawyers appointed by the Lender on such
matters concerning the laws of Cyprus, Malta, Panama, the Xxxxxxxx
Islands, Italy and such other relevant jurisdiction as the Lender may
require.
PART C
The following are the documents referred to in Clause 8.1(c). In this Part C of
Schedule 4, "RELEVANT SHIP" means the New Ship whose acquisition is to be
financed by the New Ship Advance being drawn down on the relevant Drawdown Date.
1 Copies of resolutions of the directors of the relevant New Shipowner
authorising the execution of each of the Finance Documents in relation
to the Relevant Ship and ratifying the execution of the MOA in relation
to that Relevant Ship.
2 The original of any power of attorney under which any Finance Document
in relation to the Relevant Ship is executed on behalf of the relevant
New Shipowner.
3 A duly executed original of the Mortgage, the General Assignment and,
if applicable, the Deed of Covenant for the Relevant Ship (and of each
document to be delivered under each of them).
4 Copies of the MOA and, if applicable, the Bareboat Charters applicable
to the Relevant Ship and all addenda thereto and of all documents
signed or issued by the relevant New Shipowner, the relevant Seller and
the relevant Bareboat Charterer under or in connection with any of
them.
5 Documentary evidence that:
(a) the Relevant Ship has been unconditionally delivered to, and accepted
by, the relevant New Shipowner under the relevant MOA and the full
purchase price payable under that MOA (in addition to the part financed
by the relevant Advance) has been duly paid;
(b) the Relevant Ship is definitively and permanently registered in the
name of the relevant New Shipowner under the flag and at the port
specified in Schedule 3;
66
(c) the Relevant Ship is in the absolute and unencumbered ownership of the
relevant New Shipowner save as contemplated by the Finance Documents;
(d) the Relevant Ship maintains the class as set out in Schedule 3 with the
relevant classification society free of all overdue recommendations and
conditions of such classification society;
(e) the Mortgage relative to the Relevant Ship has been duly registered or
recorded (as the case may be) against the Relevant Ship as a valid
first priority or preferred ship mortgage in accordance with the laws
of the relevant flag state; and
(f) the Relevant Ship is insured in accordance with the provisions of this
Agreement and all requirements therein in respect of insurances have
been complied with.
6 Documents establishing that each Relevant Ship will, as from the
Drawdown Date relative to the relevant New Ship Advance, be managed by
the applicable Approved Manager on terms acceptable to the Lender,
together with:
(a) a letter of undertaking executed by the Approved Manager in favour of
the Lender in the terms required by the Lender agreeing certain matters
in relation to the management of the Relevant Ship and subordinating
the rights of the Approved Manager against the relevant New Shipowner
to the rights of the Lender under the Finance Documents; and
(b) copies of the Approved Manager's Document of Compliance and the Safety
Management Certificate and International Ship Security Certificate in
respect of the Relevant Ship (together with any other details of the
applicable safety management system which the Lender requires).
7 Two valuations (at the cost of the Borrower) of the Relevant Ship,
addressed to the Lender, stated to be for the purpose of this Agreement
and dated not earlier than 15 days before the relevant Drawdown Date,
each from an independent London sale and purchase shipbroker selected
by the Lender.
8 If the Relevant Ship is "SIR IVOR" or "LYNE":
(a) a duly executed original of the Tripartite Agreement relative to the
Relevant Ship (and of each document to be delivered pursuant thereto);
(b) documentary evidence that the Relevant Ship has been unconditionally
delivered by the relevant New Shipowner to, and accepted by, the
relevant Bareboat Charterer for operation under the relevant Bareboat
Charter;
(c) copies of the constitutional documents of Xxxxxxxx;
(d) copies of resolutions of the directors of Petredec authorising the
execution of the relevant Tripartite Agreement and ratifying its entry
into the relevant Bareboat Charter; and
(e) the original power of attorney under which any Finance Document is
executed on behalf of Xxxxxxxx.
9 If the Relevant Ship is "GAS NEMESIS":
(a) a duly executed original of the Gas Nemesis Charter Assignment (and of
each document to be delivered pursuant thereto); and
67
(b) documentary evidence that "GAS NEMESIS" is operating under the Gas
Nemesis Time Charterparty.
10 Such documentary evidence as the Lender and its legal advisers may
require in relation to the due authorisation and execution by the
Seller of the Relevant Ship the MOA to which it is a party and of all
documents to be executed by that Seller under that MOA.
11 Favourable legal opinions from lawyers appointed by the Lender on such
matters concerning the laws of the flag state where the Relevant Ship
is registered and such other relevant jurisdictions as the Lender may
require.
12 A favourable opinion from an independent insurance consultant
acceptable to the Lender on such matters relating to the insurances for
the Relevant Ship as the Lender may require.
13 If the Lender so requires, in respect of any of the documents referred
to above, a certified English translation prepared by a translator
approved by the Lender.
Each copy document delivered under this Schedule shall be certified as a true
and up to date copy by a director or the secretary (or equivalent officer) of a
Borrower.
68
EXECUTION PAGE
BORROWERS
SIGNED by Xxxxxxxx Xxxxxxxx ) /s/ Xxxxxxxx Xxxxxxxx
for and on behalf of )
MATRIX GAS TRADING LTD. )
SIGNED by Xxxxxxxx Xxxxxxxx ) /s/ Xxxxxxxx Xxxxxxxx
for and on behalf of )
VCM TRADING LTD. )
SIGNED by Xxxxxxxx Xxxxxxxx ) /s/ Xxxxxxxx Xxxxxxxx
for and on behalf of )
GENEVE BUTANE INC. )
SIGNED by Xxxxxxxx Xxxxxxxx ) /s/ Xxxxxxxx Xxxxxxxx
for and on behalf of )
LPGONE LTD. )
SIGNED by Xxxxxxxx Xxxxxxxx ) /s/ Xxxxxxxx Xxxxxxxx
for and on behalf of )
SEMICHLAUS EXPORTS LTD. )
SIGNED by Xxxxxxxx Xxxxxxxx ) /s/ Xxxxxxxx Xxxxxxxx
for and on behalf of )
VENTSPILS GASES LTD. )
SIGNED by Xxxxxxxx Xxxxxxxx ) /s/ Xxxxxxxx Xxxxxxxx
for and on behalf of )
PACIFIC GASES LTD. )
SIGNED by Xxxxxxxx Xxxxxxxx ) /s/ Xxxxxxxx Xxxxxxxx
for and on behalf of )
ARACRUZ TRADING LTD. )
SIGNED by Xxxxxxxx Xxxxxxxx ) /s/ Xxxxxxxx Xxxxxxxx
for and on behalf of )
INDUSTRIAL MATERIALS INC. )
SIGNED by Xxxxxxxx Xxxxxxxx ) /s/ Xxxxxxxx Xxxxxxxx
for and on behalf of )
ENERGETIC PENINSULA LIMITED )
69
SIGNED by Xxxxxxxx Xxxxxxxx ) /s/ Xxxxxxxx Xxxxxxxx
for and on behalf of )
OXFORDGAS LIMITED )
SIGNED by Xxxxxxxx Xxxxxxxx ) /s/ Xxxxxxxx Xxxxxxxx
for and on behalf of )
OCEAN BLUE LIMITED )
SIGNED by Xxxxxxxx Xxxxxxxx ) /s/ Xxxxxxxx Xxxxxxxx
for and on behalf of )
STEALTHGAS INC. )
LENDER
SIGNED by Xxxxxx Xxxxxxx & ) /s/ Xxxxxx Xxxxxxx
for and on behalf of Xxxxxxxx Xxxxxxxxxxxxxxx ) /s/ Xxxxxxxx Xxxxxxxxxxxxxxx
FORTIS BANK (NEDERLAND) N.V. )
Witness to all ) /s/ Xxxxxxxxx Xxxxxxxxxxxx
the above signatures: )
Name: Xxxxxxxxx Xxxxxxxxxxxx
Xxxxxxxxx
Address: Xxxxxx, Xxxxxx & Xxxxxxxx
2 Defteras Merarchias
Piraeus 185 36 - Greece
70
