11.028 EXHIBIT 10.12
DATED 30 JUNE 2006
XENIA INTERNATIONAL CORP.
(as Borrower)
- and -
FORTIS BANK N.V./S.A., ATHENS BRANCH
and others
(as lenders)
-and-
FORTIS BANK N.V./S.A., ATHENS BRANCH
(as agent and security trustee)
----------------------------------------
US$8,250,000 SECURED LOAN
FACILITY AGREEMENT
m.v. "TASMAN TRADER"
----------------------------------------
XXXXXXXXXX XXXXXXX
Xxx Xx. Xxxx'x Xxxxxxxxxx
Xxxxxx XX0X 0XX
Tel: 000 0000 0000
Fax: 000 0000 0000
Ref: 11.028
CONTENTS
Page
1 Definitions and Interpretation............................................5
2 The Loan and its Purpose.................................................19
3 Conditions Precedent and Subsequent......................................21
4 Representations and Warranties...........................................25
5 Repayment and Prepayment.................................................29
6 Interest.................................................................30
7 The Master Agreement.....................................................32
8 Fee......................................................................34
9 Security Documents.......................................................34
10 Agency and Trust.........................................................35
11 Covenants................................................................44
12 Accounts.................................................................58
13 Events of Default........................................................59
14 Set-Off and Lien.........................................................64
15 Assignment and Sub-Participation.........................................66
16 Payments, Mandatory Prepayment, Reserve Requirements and Illegality......67
17 Communications...........................................................72
18 General Indemnities......................................................73
19 Miscellaneous............................................................75
20 Law and Jurisdiction.....................................................79
SCHEDULE 1....................................................................81
The Banks and the Commitments.......................................81
APPENDIX A....................................................................83
Drawdown Notice.....................................................83
APPENDIX B....................................................................84
Form of Transfer Certificate........................................84
LOAN AGREEMENT
Dated: 30 June 2006
BETWEEN:-
(1) XENIA INTERNATIONAL CORP., a company incorporated according to the law of
the Xxxxxxxx Islands, with its registered office at The Trust Company
Complex, Ajeltake Island, Ajeltake Road, Majuro Xxxxxxxx Islands, M.H.
96960, c/o The Trust Company of the Xxxxxxxx Islands Inc. ("the Borrower");
(2) FORTIS BANK N.V./S.A., ATHENS BRANCH (the "Original Bank") AND THE BANKS
AND FINANCIAL INSTITUTIONS (together with the Original Bank, the "Banks"
and each a "Bank") named in Schedule 1, of the offices listed in that
Schedule or such other offices as they may select and notify to the Agent
from time to time;
(3) FORTIS BANK N.V./S.A., ATHENS BRANCH acting as arranger, agent and security
trustee through its office at 000, Xxxxxxx Xxx. 000 00, Xxxxxx, Xxxxxx (in
that capacity "the Agent").
WHEREAS:-
(A) The Borrower is the registered owner of the Vessel. which is registered in
the ownership of the Borrower under the flag of the Xxxxxxxx Islands.
(B) Each of the Banks have agreed to advance to the Borrower its respective
Commitment of an aggregate amount not exceeding the lesser of (i) eight
million two hundred and fifty thousand Dollars ($8,250,000) and (ii)
seventy seven per centum (77%) of the lower of (a) the Fair Market Value of
the Vessel and (b) the Acquisition Price of the Vessel, in order to assist
the Borrower in re-financing part of the Acquisition Price of the Vessel.
IT IS AGREED as follows:-
1 Definitions and Interpretation
1.1 Definitions
In this Agreement:-
1.1.1 "the Accounts" means the Earnings Account and the Retention
Account.
1.1.2 "the Accounts Security Deed" means the Accounts Security
Deed referred to in Clause 9.5.
1.1.3 "Acquisition Price", in respect of the Vessel, means an
amount which shall not exceed ten million seven hundred and
seventy five thousand Dollars ($10,775,000).
1.1.4 "the Address for Service" means HTD, Xxxxxxxx Xxxxx, Xxxx'x
Xxxxx, Xxxxxx, XX0X 0XX, Xxxxxx Xxxxxxx or, in relation to
any of the Security Parties, such other address in England
and Wales as that Security Party may from time to time
designate by no fewer than ten days' written notice to the
Agent.
1.1.5 "the Administration" has the meaning given to it in
paragraph 1.1.3 of the ISM Code.
1.1.6 "Annex VI" means Annex VI (Regulations for the Prevention of
Air Pollution from Ships) to the International Convention
for the Prevention of Pollution from Ships 1973 (as modified
in 1978 and 1997).
1.1.7 "Approved Brokers" means independent sale and purchase
brokers appointed by the Agent in its discretion.
1.1.8 "the Assignment" means the deed of assignment of the
Insurances, Earnings, Charter Rights and Requisition
Compensation referred to in Clause 9.2.
1.1.9 "the Availability Termination Date" means 15 July 2006 or
such later date as the Borrower may request and the Banks
may in their discretion agree (such consent not to be
unreasonably withheld).
1.1.10 "Break Costs" means all costs, losses, premiums or penalties
incurred by the Agent or any Bank in the circumstances
contemplated by Clause 18.4, or as a result of it receiving
any prepayment of all or any part of the Loan (whether
pursuant to Clause 5 or otherwise), or any other payment
under or in relation to the Security Documents on a day
other than the due date for payment of the sum in question,
and includes (without limitation) any losses or costs
incurred in liquidating or re-employing deposits from third
parties acquired to effect or maintain the Loan, and any
liabilities, expenses or losses incurred by the Agent or any
Bank in terminating or reversing, or otherwise in connection
with, any Transaction or any other interest rate and/or
currency swap, transaction or arrangement entered into by
the Agent or any Bank to hedge any exposure arising under
this Agreement, or in terminating or reversing, or otherwise
in connection with, any open position arising under this
Agreement or the Master Agreement.
1.1.11 "Business Day" means a day on which banks are open for the
transaction of business of the nature contemplated by this
Agreement (and not authorised by law to close) in Xxx Xxxx,
Xxxxxx Xxxxxx xx Xxxxxxx; Xxxxxx, Xxxxxxx; Athens, Greece
and any other financial centre which any Bank may consider
appropriate for the operation of the provisions of this
Agreement.
1.1.12 "Charter" means (a) the time charter dated 17 December 2003
(as amended and supplemented by addendum no.1 dated 17
December 2003, as further amended and supplemented by
addendum no.2 dated 17 December 2003 and as further amended
and supplemented by addendum no.3 dated 17 December 2003) at
a gross daily rate of hire of (i) eight thousand eight
hundred and fifty Dollars ($8,850) per day with two point
two five per centum (2.25%) commission from the Drawdown
Date until December 2008, (ii) nine thousand five hundred
Dollars ($9,500) per day with two point five per centum
(2.5%) commission until December 2010 and (iii) nine
thousand Dollars ($9,000) per day with two point five per
centum (2.5%) commission until March 2012, and (b) any other
time charter, consecutive voyage charter, contract of
affreightment or any other contract of employment of the
Vessel in excess of twelve (12) months.
1.1.13 "Charterer" means Tasman Orient Line (Cyprus Ltd.) of
Limassol, Cyprus in respect of the Vessel.
1.1.14 "Charter Rights" means all rights and benefits accruing to
the Borrower in respect of the Vessel under or arising out
of the Charter or any other charterparty or contract of
employment in respect of the Vessel and not forming part of
the Earnings.
1.1.15 "Commitment" means, in relation to each Bank, the amount of
the Loan which that Bank agrees to advance to the Borrower
as its several liability as indicated against the name of
that Bank in Schedule 1 and/or, where the context permits,
the amount of the Loan advanced by that Bank and remaining
outstanding.
1.1.16 a "Communication" means any notice, approval, demand,
request or other communication from one party to this
Agreement to the other.
1.1.17 "the Communications Address" means c/o Eurobulk Ltd,
Aethrion Center, 40 Xx. Xxxxxxxxxxxx Xxxxxx, 000 00
Xxxxxxxx, Xxxxxx, marked for the attention of Xx. Xxxxxxxxx
X. Xxxxxx.
1.1.18 "the Company" means, at any given time, the company
responsible for the Vessel's compliance with the ISM Code
pursuant to paragraph 1.1.2 of the ISM Code.
1.1.19 a "Confirmation" means a Confirmation exchanged, or deemed
exchanged, between the Agent and the Borrower as
contemplated by the Master Agreement.
1.1.20 "Corporate Guarantee" means the guarantee and indemnity
referred to in Clause 9.3.
1.1.21 "Corporate Guarantor" means Euroseas Ltd., a company
incorporated according to the law of the Xxxxxxxx Islands,
with registered office at The Trust Company Complex,
Ajeltake Island, Ajeltake Road, Majuro Xxxxxxxx Islands,
M.H. 96960, c/o The Trust Company of the Xxxxxxxx Islands
Inc. and/or (where the context permits) any other person or
company who shall at any time during the Facility Period
give to the Banks or to the Agent a guarantee and/or
indemnity for the repayment of all or part of the
Indebtedness.
1.1.22 "Credit Support Document" means any document described as
such in the Master Agreement and, where the context permits,
any other document referred to in any Credit Support
Document which has the effect of creating an Encumbrance in
favour of the Agent.
1.1.23 "Credit Support Provider" means any person (other than the
Borrower) described as such in the Master Agreement.
1.1.24 "Currency of Account" means, in relation to any payment to
be made to the Agent or a Bank under or pursuant to any of
the Security Documents, the currency in which that payment
is required to be made by the terms of the relevant Security
Document.
1.1.25 "Default Rate" means the aggregate rate of the Margin and
two per centum (2%) per annum above the cost to the Agent of
obtaining funds in amount similar to the amount of the
Indebtedness or any relevant part of the Indebtedness for
such periods as the Agent shall determine in its discretion.
1.1.26 "DOC" means a valid Document of Compliance issued for the
Company by the Administration pursuant to paragraph 13.2 of
the ISM Code.
1.1.27 "Dollars" and "$" each means available and freely
transferable and convertible funds in lawful currency of the
United States of America.
1.1.28 "the Drawdown Date" means the date on which the Loan is
advanced by the Banks to the Borrower pursuant to Clause 2.
1.1.29 "Drawdown Notice" means a notice complying with Clause 2.2.
1.1.30 "Earnings" means all hires, freights, pool income and other
sums payable to or for the account of the Borrower in
respect of the Vessel including (without limitation) all
remuneration for salvage and towage services, demurrage and
detention moneys, contributions in general average,
compensation in respect of any requisition for hire, and
damages and other payments (whether awarded by any court or
arbitral tribunal or by agreement or otherwise) for breach,
termination or variation of any contract for the operation,
employment or use of the Vessel.
1.1.31 "the Earnings Account" means a bank account to be opened in
the name of the Borrower with the Agent and designated
"Xenia International Corp. - Earnings Account".
1.1.32 "Encumbrance" means any mortgage, charge (fixed or
floating), pledge, lien, assignment, hypothecation,
preferential right, option, title retention or trust
arrangement or any other agreement or arrangement which has
the effect of creating security or payment priority.
1.1.33 "Environmental Affiliate" means an agent, employee,
independent contractor, sub-contractor or other person in a
contractual relationship with the Borrower relating to the
Vessel or its carriage of cargo or its operation whose acts
or omissions would have a Material Adverse Effect.
1.1.34 "Environmental Approval" means all approvals, licences,
permits, exemptions and authorisations required under any
applicable Environmental Laws.
1.1.35 "Environmental Claim" means any and all enforcement, clean
up, removal or other governmental or regulatory actions or
orders instituted or completed pursuant to any Environmental
Laws or Environmental Approval together with claims made by
any third party relating to damage, contributions, loss or
injury, resulting from any Release of Materials of
Environmental Concern.
1.1.36 "Environmental Laws" means all local, state, provincial,
federal, state local, foreign and international laws,
regulations, treaties and conventions (including any
amendments and/or protocols thereto) for the time being in
force pertaining to the pollution or protection of human
health or the environment (including ambient air, surface
water, ground water, land surface or subsurface strata and
all or any part of navigable waters, waters of the
contiguous zone, ocean waters and international waters
(howsoever called)), including laws, regulations, treaties
and conventions (including any amendments and/or protocols
thereto) for the time being in force relating to the Release
(or threatened Release) of Materials of Environmental
Concern.
1.1.37 "Event of Default" means any of the events set out in Clause
13.2.
1.1.38 "the Facility Period" means the period beginning on the date
of this Agreement and ending on the date when the whole of
the Indebtedness has been repaid in full and the Borrower
has ceased to be under any further actual or contingent
liability to the Banks or the Agent under or in connection
with the Security Documents.
1.1.39 "Fair Market Value" means the average of two valuations
obtained from two Approved Brokers.
1.1.40 "Final Maturity Date" means the earlier of the date falling
sixety nine (69) months after the Drawdown Date and 15 April
2012.
1.1.41 a "Hedging Transaction" means a Transaction entered into
between the Agent and the Borrower pursuant to the Master
Agreement for the express purpose of hedging all or part of
the Borrower's interest rate risk pursuant to this
Agreement.
1.1.42 "IAPPC" means a valid international air pollution prevention
certificate for the Vessel issued under Annex VI.
1.1.43 "the Indebtedness" means the Loan; any Master Agreement
Liabilities; all other sums of any nature (together with all
interest on any of those sums) which from time to time may
be payable by the Borrower to the Agent or to the Banks
pursuant to the Security Documents; any damages payable as a
result of any breach by the Borrower of any of the Security
Documents; and any damages or other sums payable as a result
of any of the obligations of the Borrower under or pursuant
to any of the Security Documents being disclaimed by a
liquidator or any other person, or, where the context
permits, the amount thereof for the time being outstanding.
1.1.44 an "Instructing Group" means any one or more Banks whose
combined Proportionate Shares exceed seventy per centum
(70%).
1.1.45 "Insurances", in respect of the Vessel, means all policies
and contracts of insurance (including all entries in hull
and machinery, protection and indemnity or war risks
associations) which are from time to time taken out or
entered into in respect of or in connection with the Vessel
or her increased value or her Earnings or the loss of hire
and (where the context permits) all benefits thereof,
including all claims of any nature and returns of premium.
1.1.46 "Interest Payment Date" means each date for the payment of
interest in accordance with Clause 6.
1.1.47 "Interest Period" means each interest period selected by the
Borrower or agreed by the Agent pursuant to Clause 6.
1.1.48 "the ISM Code" means the International Management Code for
the Safe Management of Ships and for Pollution Prevention,
as adopted by the Assembly of the International Maritime
Organisation on 4 November 1993 by resolution A.741 (18) and
incorporated on 19 May 1994 as chapter IX of the Safety of
Life at Sea Convention 1974.
1.1.49 "the ISPS Code" means the International Ship and Port
Facility Security Code adopted by the International Maritime
Organisation (as the same may be amended from time to time).
1.1.50 "law" means any law, statute, treaty, convention,
regulation, instrument or other subordinate legislation or
other legislative or quasi-legislative rule or measure, or
any order or decree of any government, judicial or public or
other body or authority, or any directive, code of practice,
circular, guidance note or other direction issued by any
competent authority or agency (whether or not having the
force of law).
1.1.51 "LIBOR" means the rate displayed as the British Bankers'
Association Interest Settlement Rate on any information
service selected by the Agent on which that rate is
displayed (without rounding), for deposits in Dollars of
amounts equal to the amount of the Loan or any relevant part
of the Loan for a period equal in length to the relevant
Interest Period, or (if the Agent is for any reason unable
to ascertain that rate) the average rate at which deposits
in Dollars of amounts comparable to the amount of the Loan
(or any relevant part of the Loan) are offered to the Agent
in the London Interbank market for a period equal in length
to the relevant Interest Period.
1.1.52 "the Loan" means the aggregate amount from time to time
advanced by the Banks to the Borrower pursuant to Clause 2
or, where the context permits, the amount advanced and for
the time being outstanding.
1.1.53 "the Managers" means Eurobulk Ltd., or such other commercial
and/or technical managers of the Vessel nominated by the
Borrower as the Agent may in its discretion approve.
1.1.54 "Manager's Undertakings" means the Undertakings of the
Managers referred to in Clause 9.5.
1.1.55 "the Margin" means zero point nine five per centum (0.95%)
per annum.
1.1.56 "Master Agreement" means any ISDA Master Agreement (or any
other form of master agreement relating to interest or
currency exchange transactions) entered into between the
Agent and the Borrower during the Facility Period, including
each Schedule to any Master Agreement and each Confirmation
exchanged pursuant to any Master Agreement.
1.1.57 "the Master Agreement Liabilities" means, at any relevant
time, all liabilities of the Borrower to the Agent under or
pursuant to the Master Agreement, whether actual or
contingent, present or future.
1.1.58 "Material Adverse Effect" means a material adverse effect on
the Borrower's ability to meet its obligations to the Agent
in respect of the Indebtedness or on the security provided
to the Agent and the Banks in respect of the Indebtedness.
1.1.59 "Material of Environmental Concern" means and includes all
pollutants, contaminants, toxic substances, oil and
hazardous substances as may be defined in any applicable
local, state, provincial, federal, national and
international laws, regulations, treaties and conventions
(including any amendments and/or protocols thereto) for the
time being in force.
1.1.60 "the Maximum Loan Amount" means an aggregate amount not
exceeding the lesser of (i) eight million two hundred and
fifty thousand Dollars ($8,250,000) and (ii) seventy seven
per centum (77%) of the lower of (a) the Acquisition Price
and (b) the Fair Market Value.
1.1.61 "the Mortgagees' Insurances" means all policies and
contracts of mortgagees' interest insurance and any other
insurance from time to time taken out by the Agent on behalf
of the Banks in relation to the Vessel for an amount of not
less than one hundred and ten per centum (110%) of the
outstanding Loan.
1.1.62 "the Mortgage" means the first preferred mortgage referred
to in Clause 9.1.
1.1.63 "Notional Amount", in respect of any Hedging Transaction,
means the Notional Amount as defined in the Confirmation
relating to that Hedging Transaction.
1.1.64 "Operating Expenses" means cash expenses properly and
reasonably incurred by the Borrower in connection with the
operation, employment, maintenance, repair and insurance of
the Vessel.
1.1.65 "Potential Event of Default" means any event which, with the
giving of notice and/or the passage of time and/or the
satisfaction of any materiality test, would constitute an
Event of Default.
1.1.66 "Proceedings" means any suit, action or proceedings begun by
the Agent or any of the Banks arising out of or in
connection with the Security Documents.
1.1.67 "Proportionate Share" means, at any time, the proportion
which that Bank's Commitment (whether or not advanced) then
bears to the aggregate Commitments of all the Banks (whether
or not advanced).
1.1.68 "Release" means an emission, spill, release or discharge
into or upon the air, surface water, groundwater, or soils
of any Material of Environmental Concern for which the
Borrower has any liability under Environmental Law, except
in accordance with a valid Environmental Approval.
1.1.69 "Repayment Date" means the date for payment of any Repayment
Instalment in accordance with Clause 5.
1.1.70 "Repayment Instalment" means any instalment of the Loan to
be repaid by the Borrower pursuant to Clause 5.
1.1.71 "Requisition Compensation" means all compensation or other
money which may from time to time be payable to the Borrower
as a result of the Vessel being requisitioned for title or
in any other way compulsorily acquired (other than by way of
requisition for hire).
1.1.72 "the Retention Account" means the bank account to be opened,
in the name of the Borrower, with the Agent, designated
"Xenia International Corp. - Retention Account".
1.1.73 "the Security Documents" means this Agreement, the Mortgage,
the Assignment, the Corporate Guarantee, the Accounts
Security Deed, the Managers' Undertakings, the Master
Agreement and any other Credit Support Documents or (where
the context permits) any one or more of them, and any other
agreement or document which may at any time be executed by
any person as security for the payment of all or any part of
the Indebtedness.
1.1.74 "Security Parties" means the Borrower, the Corporate
Guarantor, the Managers, any other Credit Support Providers,
and any other person or company who may at any time during
the Facility Period be liable for, or provide security for,
all or any part of the Indebtedness, and "Security Party"
means any one of them.
1.1.75 "SMC" means a valid safety management certificate issued for
the Vessel by or on behalf of the Administration pursuant to
paragraph 13.4 of the ISM Code.
1.1.76 "SMS" means a safety management system for the Vessel
developed and implemented in accordance with the ISM Code
and including the functional requirements, duties and
obligations required by the ISM Code.
1.1.77 "Taxes" means all taxes, levies, imposts, duties, charges,
fees, deductions and withholdings (including any related
interest, fines, surcharges and penalties) and any
restrictions or conditions resulting in any charge, other
than taxes on the overall net income of the Agent or of a
Bank, and "Tax" and "Taxation" shall be interpreted
accordingly.
1.1.78 "Total Loss" means:-
(a) an actual, constructive, arranged, agreed or
compromised total loss of the Vessel; or
(b) the requisition for title or compulsory acquisition of
the Vessel by or on behalf of any government or other
authority (other than by way of requisition for hire);
or
(c) the capture, seizure, arrest, detention or confiscation
of the Vessel, unless the Vessel is released and
returned to the possession of the Borrower within one
month after the capture, seizure, arrest, detention or
confiscation in question.
1.1.79 "Transaction" means a transaction entered into between the
Agent and the Borrower governed by the Master Agreement.
1.1.80 "Transfer Certificate" means a certificate materially in the
form of Appendix B.
1.1.81 "Transfer Date", in relation to a transfer of any of a
Bank's rights and/or obligations under or pursuant to this
Agreement, means the fifth Business Day after the date of
delivery of the relevant Transfer Certificate to the Agent,
or such later Business Day as may be specified in the
relevant Transfer Certificate.
1.1.82 "Transferee" means any bank or financial institution to
which a Bank transfers any of its rights and/or obligations
under or pursuant to this Agreement.
1.1.83 "the Trust Property" means:-
(a) the benefit of the covenant contained in Clause 10; and
(b) all benefits arising under (including, without
limitation, all proceeds of the enforcement of) each of
the Security Documents (other than this Agreement),
with the exception of any benefits arising solely for
the benefit of the Agent.
1.1.84 "the Vessel" means the container motor vessel "TASMAN
TRADER", built in 1990 of approximately 22,568 dwt and 950
TEU, currently registered under the flag of the Xxxxxxxx
Islands in the ownership of the Borrower and everything now
or in the future belonging to her on board and ashore.
1.2 Interpretation
In this Agreement:-
1.2.1 words denoting the plural number include the singular and
vice versa;
1.2.2 words denoting persons include corporations, partnerships,
associations of persons (whether incorporated or not) or
governmental or quasi-governmental bodies or authorities and
vice versa;
1.2.3 references to Recitals, Clauses and Appendices are
references to recitals and clauses of, and appendices to,
this Agreement;
1.2.4 references to this Agreement include the Recitals and the
Appendices;
1.2.5 the headings and contents page(s) are for the purpose of
reference only, have no legal or other significance, and
shall be ignored in the interpretation of this Agreement;
1.2.6 references to any document (including, without limitation,
to all or any of the Security Documents) are, unless the
context otherwise requires, references to that document as
amended, supplemented, novated or replaced from time to
time;
1.2.7 references to statutes or provisions of statutes are
references to those statutes, or those provisions, as from
time to time amended, replaced or re-enacted;
1.2.8 words and expressions defined in the Master Agreement,
unless the context otherwise requires, have the same
meaning;
1.2.9 references to a Bank or to the Agent include its successors,
transferees and assignees;
1.2.10 references to times of day are to London time.
1.3 Offer letter
This Agreement supersedes the terms and conditions contained in any
correspondence relating to the subject matter of this Agreement
exchanged between the Agent or any of the Banks and the Borrower or
their representatives prior to the date of this Agreement.
2 The Loan and its Purpose
2.1 Agreement to lend Subject to the terms and conditions of this
Agreement, and in reliance on each of the representations and
warranties made or to be made in or in accordance with each of the
Security Documents, each of the Banks agrees to advance to the
Borrower an aggregate amount not exceeding the Maximum Loan Amount
to be used by the Borrower for the purpose referred to in Recital
(B).
2.2 Advance of the Loan Subject to satisfaction by the Borrower of the
conditions set out in Clause 3.1, the Loan shall be advanced to
the Borrower in one amount by such method of funds transfer as the
Banks and the Borrower shall agree. The Loan shall be advanced in
Dollars on a Business Day, provided that the Borrower shall have
given to the Agent not more than ten and not fewer than three
Business Days' notice (or such lesser period of notice as the
Agent may accept in its discretion) in writing materially in the
form set out in Appendix A of the required Drawdown Date. The
Drawdown Notice once given shall be irrevocable and shall
constitute a warranty by the Borrower that:-
2.2.1 all conditions precedent to the advance of the Loan will
have been satisfied on or before the Drawdown Date
requested;
2.2.2 no Event of Default or Potential Event of Default will then
have occurred;
2.2.3 no Event of Default or Potential Event of Default will
result from the advance of the Loan; and
2.2.4 there has been no material adverse change in the business,
affairs or financial condition of any of the Security
Parties from that pertaining at the date of this Agreement.
The Agent shall promptly notify each Bank of the receipt of the
Drawdown Notice, following which each Bank will make, subject to the
provisions of Clause 3, its Proportionate Share of the amount of the
Loan available to the Borrower through the Agent on the Drawdown Date
requested.
2.3 Availability Termination Date No Bank shall be under any
obligation to advance all or any part of the Loan after the
Availability Termination Date.
2.4 Several obligations The obligations of the Banks under this
Agreement are several. The failure of a Bank to perform its
obligations under this Agreement shall not affect the obligations
of the Borrower to the Agent or to the other Banks, nor shall the
Agent or any other Bank be liable for the failure of a Bank to
perform any of its obligations under or in connection with this
Agreement.
2.5 Application of Loan Without prejudice to the obligations of the
Borrower under this Agreement, neither the Banks nor the Agent
shall be obliged to concern itself with the application of the
Loan by the Borrower.
2.6 Loan and control accounts The Borrower will open and maintain with
the Agent such loan and control accounts as the Agent shall in its
discretion consider necessary or desirable.
2.7 Interest several Notwithstanding any other term of this Agreement
(but without prejudice to the provisions of this Agreement
relating to or requiring action by the Instructing Group) the
interest of the Banks is several and the amount due to any Bank is
separate and independent debt.
2.8 General terms and conditions In addition to the terms and
conditions set-out in this Loan Agreement the General Terms and
Conditions of the Agent will apply.
3 Conditions Precedent and Subsequent
3.1 Conditions Precedent Before any Bank shall have any obligation to
advance any part of the Loan, the Borrower shall deliver or cause
to be delivered to or to the order of the Agent the following
documents and evidence:-
3.1.1 Evidence of incorporation Such evidence as the Agent may
reasonably require that each Security Party is duly
incorporated in its country of incorporation and remains in
existence and, where appropriate, in good standing, with
power to enter into, and perform its obligations under,
those of the Security Documents to which it is, or is
intended to be, a party, including (without limitation) a
copy, certified by a director or the secretary of the
Security Party in question as true, complete, accurate and
unamended, of all documents establishing or limiting the
constitution of each Security Party.
3.1.2 Corporate authorities A copy, certified by a director or the
secretary of the Security Party in question as true,
complete, accurate and neither amended nor revoked, of a
resolution of the directors and a resolution of the
shareholders of each Security Party (together, where
appropriate, with signed waivers of notice of any directors'
or shareholders' meetings) approving, and authorising or
ratifying the execution of, those of the Security Documents
to which that Security Party is or is intended to be a party
and all matters incidental thereto.
3.1.3 Officer's certificate A certificate signed by a duly
authorised officer of each of the Security Parties setting
out the names of the directors, officers and shareholders of
that Security Party.
3.1.4 Power of attorney The notarially attested and legalised
power of attorney of each of the Security Parties under
which any documents are to be executed or transactions
undertaken by that Security Party.
3.1.5 Vessel documents Photocopies, certified as true, accurate
and complete by a director or the secretary of the Borrower,
of:-
(a) the Charter and/or any other contract of employment of
the Vessel which will be in force on the Drawdown Date
and must be reviewed and accepted by the Agent;
(c) the management agreement between the Borrower and the
Managers relating to the Vessel;
(d) the Vessel's current Safety Construction, Safety
Equipment, Safety Radio, Oil Pollution Prevention,
International Tonnage and Load Line Certificates;
(e) the Vessel's current Certificate of Financial
Responsibility issued pursuant to the United States Oil
Pollution Xxx 0000;
(f) the Vessel's International Ship Security Certificate
issued pursuant to the ISPS Code;
(g) the Vessel's current SMC; and
(h) the Company's current DOC;
(i) the Vessel's current IAPPC;
in each case together with all addenda, amendments or
supplements.
3.1.6 Evidence of ownership Certificate(s) of ownership and
encumbrance (or equivalent) issued by the Registrar of Ships
(or equivalent official) at the Vessel's port of registry
confirming that the Vessel is on the Drawdown Date owned by
the Borrower and free of registered Encumbrances.
3.1.7 Evidence of insurance Evidence that the Vessel is, or will
from the Drawdown Date be, insured in the manner required by
the Security Documents and that letters of undertaking will
be issued in the manner required by the Security Documents,
together with the written approval of the Insurances by an
insurance adviser appointed by the Agent (at the cost of the
Borrower) confirming (inter alia) that the required
Insurances have been placed and are acceptable to the Agent
and that the underwriters are acceptable to the Agent.
3.1.8 Confirmation of class A Certificate of Confirmation of Class
for hull and machinery confirming that the Vessel is classed
with the highest class applicable to Vessel of her type with
Nippon Kaiji Kyokai free and clear of all overdue
recommendations or such other classification society as may
be acceptable to the Agent.
3.1.9 Survey reports The latest annual survey and class status
reports prepared by surveyors instructed by the class
society for the Vessel (namely Nippon Kaiji Kyokai), and at
the cost of the Borrower, confirming the condition of the
Vessel, such condition to be in all respects acceptable to
the Agent.
3.1.10 Valuations A valuation of the Vessel addressed to the Agent
from two Approved Brokers appointed by the Agent and
approved by the Borrower certifying a value for the Vessel,
assessed in such manner as the Agent may require, acceptable
to the Agent and at the cost of the Borrower.
3.1.11 The Security Documents The Security Documents, together with
all notices and other documents required by any of them,
duly executed and, in the case of the Mortgage, registered
with first priority through the Registrar of Ships (or
equivalent official) at the Vessel's port of registry.
3.1.12 Drawdown Notice A Drawdown Notice.
3.1.13 Process agent A letter from HTD, Xxxxxxxx Xxxxx, Xxxx'x
Xxxxx, Xxxxxx, XX0X 0XX, Xxxxxx Xxxxxxx, accepting their
appointment by each of the Security Parties as agent for
service of Proceedings pursuant to the Security Documents.
3.1.14 Mandates Such duly signed forms of mandate, and/or other
evidence of opening of the Accounts, as the Agent or any of
the Banks may require.
3.1.15 Fee Payment of the fee due from the Borrower to the Banks
pursuant to the terms of Clause 8 or any other provision of
the Security Documents.
3.1.16 Legal opinions Confirmation satisfactory to the Agent that
all legal opinions required by the Agent will be given
substantially in the form required by the Agent.
3.2 Conditions Subsequent The Borrower undertakes to deliver or to
cause to be delivered to the Agent, in the case of Clause 3.2.1
not later than three days after the Drawdown Date and, in the case
of Clauses 3.2.2 and 3.2.3 not later than two weeks after the
Drawdown Date, the following additional documents and evidence:-
3.2.1 Evidence of registration Evidence of permanent registration
of the Vessel and the Mortgage (with first priority) with
the Registrar of Ships (or equivalent official) at the
Vessel's port of registry.
3.2.2 Letters of undertaking Letters of undertaking as required by
the Security Documents in form and substance acceptable to
the Agent including, without limitation confirmation notices
of assignment of Insurances, notices of cancellation and
loss payable clause in form and substance acceptable to the
Agent.
3.2.3 Legal opinions Such legal opinions as the Agent shall
require.
3.2.4 Companies Act registrations Evidence that the prescribed
particulars of the Corporate Guarantee have been delivered
to the Registrar of Companies of the United States of
America within the statutory time limit.
3.2.5 Master's receipt The master's receipt for the Mortgage.
3.3 No waiver If the Banks in their sole discretion agree to advance
the Loan to the Borrower before all of the documents and evidence
required by Clause 3.1 have been delivered to or to the order of
the Agent, the Borrower undertakes to deliver all outstanding
documents and evidence to or to the order of the Agent no later
than five (5) Business Days, and the Banks' advance of the Loan
shall not be taken as a waiver of the Agent's right to require
production of all the documents and evidence required by Clause
3.1.
3.4 Form and content All documents and evidence delivered to the Agent
pursuant to this Clause shall:-
3.4.1 be in form and substance acceptable to the Agent;
3.4.2 be accompanied, if required by the Agent, by translations
into the English language, certified in a manner acceptable
to the Agent;
3.4.3 if required by the Agent, be certified, notarised, legalised
or attested in a manner acceptable to the Agent.
3.5 Event of Default No Bank shall be under any obligation to advance
any part of the Loan nor to act on any Drawdown Notice if, at the
date of the Drawdown Notice or at the date on which the advance of
the Loan is requested in the Drawdown Notice, an Event of Default
or Potential Event of Default shall have occurred, or if an Event
of Default or Potential Event of Default would result from the
advance of the Loan.
4 Representations and Warranties
The Borrower represents and warrants to the Agent at the date of this
Agreement and (by reference to the facts and circumstances then
pertaining) at the date of the Drawdown Notice, at the Drawdown Date and
at each Interest Payment Date as follows:-
4.1 Incorporation and capacity Each of the Security Parties is a body
corporate duly constituted and existing and (where applicable) in
good standing under the law of its country of incorporation, in
each case with perpetual corporate existence and the power to xxx
and be sued, to own its assets and to carry on its business, and
all of the corporate shareholders (if any) of each Security Party
are duly constituted and existing under the laws of their
countries of incorporation with perpetual corporate existence and
the power to xxx and be sued, to own their assets and to carry on
their business.
4.2 Solvency None of the Security Parties is insolvent or in
liquidation or administration or subject to any other insolvency
procedure, and no receiver, administrative receiver,
administrator, liquidator, trustee or analogous officer has been
appointed in respect of any of the Security Parties or all or any
part of their assets.
4.3 Binding obligations The Security Documents when duly executed and
delivered will constitute the legal, valid and binding obligations
of the Security Parties enforceable in accordance with their
respective terms.
4.4 Satisfaction of conditions All acts, conditions and things
required to be done and satisfied and to have happened prior to
the execution and delivery of the Security Documents in order to
constitute the Security Documents the legal, valid and binding
obligations of the Security Parties in accordance with their
respective terms have been done, satisfied and have happened in
compliance with all applicable laws.
4.5 Registrations and consents With the exception only of the
registrations referred to in Clause 3.2.1, all (if any) consents,
licences, approvals and authorisations of, or registrations with
or declarations to, any governmental authority, bureau or agency
which may be required in connection with the execution, delivery,
performance, validity or enforceability of the Security Documents
have been obtained or made and remain in full force and effect and
the Borrower is not aware of any event or circumstance which could
reasonably be expected adversely to affect the right of any of the
Security Parties to hold and/or obtain renewal of any such
consents, licences, approvals or authorisations.
4.6 Disclosure of material facts The Borrower is not aware of any
material facts or circumstances which have not been disclosed to
the Agent and which might, if disclosed, have adversely affected
the decision of a person considering whether or not to make loan
facilities of the nature contemplated by this Agreement available
to the Borrower.
4.7 No material litigation There is no action, suit, arbitration or
administrative proceeding pending or to its knowledge about to be
pursued before any court, tribunal or governmental or other
authority which would, or would be likely to, have a materially
adverse effect on the business, assets, financial condition or
creditworthiness of any of the Security Parties.
4.8 No breach of law or contract The execution, delivery and
performance of the Security Documents will not contravene any
contractual restriction or any law binding on any of the Security
Parties or on any shareholder (whether legal or beneficial) of any
of the Security Parties, or the constitutional documents of any of
the Security Parties, nor result in the creation of, nor oblige
any of the Security Parties to create, any Encumbrance over all or
any of its assets, with the exception of the Encumbrances created
by or pursuant to the Security Documents and, in entering into
those of the Security Documents to which it is, or is to be, a
party, and in borrowing the Loan, the Borrower is acting for its
own account.
4.9 No deductions The Borrower is not required to make any deduction
or withholding from any payment which it may be obliged to make to
the Agent or any of the Banks under or pursuant to the Security
Documents.
4.10 No established place of business in the United Kingdom or United
States None of the Security Parties (other than the Corporate
Guarantor) has, nor will any of them have during the Facility
Period, an established place of business in the United Kingdom or
the United States of America.
4.11 Use of Loan The Loan will be used for the purpose specified in
Recital (B).
4.12 Pari passu The obligations of the Borrower under this Agreement
are direct, general and unconditional obligations of the Borrower
and rank at least pari passu with all other present and future
unsecured and unsubordinated indebtedness of the Borrower with the
exception of any obligations which are mandatorily preferred by
law and not by contract.
4.13 No default under any other indebtedness Neither the Borrower nor
any other Security Party is (nor would with the giving of notice
or lapse of time or the satisfaction of any other condition or
combination thereof be) in breach of or in default under any
agreement relating to any indebtedness to which it is a party or
by which it may be bound.
4.14 Information The information, exhibits and reports furnished by any
Security Party to the Agent in connection with the negotiation and
preparation of the Security Documents are true and accurate in all
material respects and not misleading, do not omit material facts
and all reasonable enquiries have been made to verify the facts
and statements contained therein; to the best knowledge of the
Borrower there are no other facts the omission of which would make
any fact or statement therein misleading.
4.15 No material adverse change There has been no material adverse
change in the financial position of the Borrower or any other
Security Party from that described to the Agent in the negotiation
of this Agreement.
4.16 Environment Except as may already have been disclosed by the
Borrower in writing to, and acknowledged in writing by, the Agent,
the Borrower represents and warrants to the Agent as follows:
4.16.1 the Borrower and (to the best of the Borrower's knowledge)
its Environmental Affiliates have without limitation
complied with the provisions of applicable Environmental
Laws, except where non-compliance would not have a Material
Adverse Effect;
4.16.2 the Borrower and (to the best of the Borrower's knowledge)
its Environmental Affiliates have obtained all requisite
Environmental Approvals and are in compliance with such
Environmental Approvals, except where the failure to obtain
or comply with any such Environmental Approvals would not
have a Material Adverse Effect;
4.16.3 neither the Borrower nor (to the best of the Borrower's
knowledge) any of its Environmental Affiliates have received
notice of any Environmental Claim which alleges that the
Borrower is not in compliance with applicable Environmental
Laws or Environmental Approvals, where such non-compliance
would have a Material Adverse Effect;
4.16.4 there is no Environmental Claim pending or, to the
Borrower's knowledge, threatened which would have a Material
Adverse Effect; and
4.16.5 to the best of the Borrower's knowledge, there has been no
Release of Material of Environmental Concern except where
the event would not have a Material Adverse Effect.
5 Repayment and Prepayment
5.1 Repayment The Borrower agrees to repay the Loan to the Agent as
agent for the Banks by twenty three (23) consecutive quarterly
Repayment Instalments, the first twenty two (22) such Repayment
Instalments in the sum of two hundred and sixty five hundred
thousand Dollars ($265,000) each and the twenty third (23rd) and
final Repayment Instalment in the sum of two million four hundred
and twenty thousand Dollars ($2,420,000) (consisting of an
instalment of two hundred and sixty five hundred thousand Dollars
($265,000) and a balloon payment of two million one hundred and
fifty five thousand Dollars ($2,155,000) ("the Balloon Payment"))
the first Repayment Date being the date which is three calendar
months after the Drawdown Date and subsequent Repayment Dates
being at consecutive intervals of three calendar months thereafter
and the final Repayment Instalment shall be due and payable on the
Final Maturity Date.
5.2 Reduction of Repayment Instalments If the aggregate amount
advanced to the Borrower is less than the Maximum Loan Amount, the
amount of each Repayment Instalment shall be reduced pro rata to
the amount actually advanced.
5.3 Voluntary Prepayment The Borrower may without any premium or
penalty prepay the Loan in whole or in part in minimum amounts
equal to one hundred thousand Dollars ($100,000) or an integral
multiple of that amount (or as otherwise may be agreed by the
Agent) provided that it has first given to the Agent not fewer
than fifteen (15) days' prior written notice expiring on a
Business Day of its intention to do so. Any notice pursuant to
this Clause once given shall be irrevocable and shall oblige the
Borrower to make the prepayment referred to in the notice on the
Business Day specified in the notice, together with all interest
accrued on the amount prepaid up to and including that Business
Day.
5.4 Prepayment indemnity If the Borrower shall, subject always to
Clause 5.3, make a prepayment on a Business Day other than the
last day of an Interest Period, it shall, in addition to the
amount prepaid and accrued interest, pay to the Agent any amount
which the Agent may certify is necessary to compensate the Agent
and the Banks for any Break Costs incurred by the Agent or any of
the Banks as a result of the making of the prepayment in question.
5.5 Application of prepayments Any prepayment pursuant to Clause 5.3
in an amount less than the Indebtedness shall be applied in
satisfaction or reduction first of any costs and other amounts
outstanding; secondly of all interest outstanding; and thirdly pro
rata against the outstanding Repayment Instalments (including the
Balloon Payment).
5.6 No reborrowing No amount repaid or prepaid pursuant to this
Agreement may in any circumstances be reborrowed.
5.7 Mandatory Prepayment - sale or Total Loss of Vessel In the event
of the Vessel being sold or becoming a Total Loss, the
Indebtedness shall be repaid in full. In the case of a sale or
disposal of the Vessel, the proceeds of such sale or disposal of
the Vessel shall be used to repay the Indebtedness immediately
upon the date of such sale or disposal of the Vessel. In the case
of a Total Loss of theVessel, the proceeds of the Insurances of
the Vessel shall be used to prepay the Indebtedness on the earlier
of the date on which Insurance proceeds are received by the
Borrower and the date which is ninety (90) days after the date on
which the Vessel was declared a Total Loss.
6 Interest
6.1 Interest Periods The period during which the Loan shall be
outstanding pursuant to this Agreement shall be divided into
consecutive Interest Periods of one, three six, nine or twelve
months' duration, as selected by the Borrower by written notice to
the Agent not later than 11.00 a.m. on the third Business Day
before the beginning of the Interest Period in question, or such
other duration as may be agreed by the Agent in its discretion.
6.2 Beginning and end of Interest Periods The first Interest Period
shall begin on the Drawdown Date, and the final Interest Period
shall end on the Repayment Date applicable to the final Repayment
Instalment.
6.3 Interest Periods to meet Repayment Dates If the Borrower shall
select, or the Borrower and the Banks shall agree, an Interest
Period which does not expire on the next Repayment Date, there
shall, in respect of each part of the Loan equal to a Repayment
Instalment falling due for payment before the expiry of that
Interest Period, be a separate Interest Period which shall expire
on the relevant Repayment Date, and the Interest Period selected
or agreed shall apply to the balance of the Loan only.
6.4 Interest rate During each Interest Period interest shall accrue on
the Loan at the rate determined by the Agent to be the aggregate
of (a) the Margin and (b) LIBOR determined at or about 11.00 a.m.
on the second Business Day prior to the beginning of that Interest
Period.
6.5 Failure to select Interest Period If the Borrower at any time
fails to select or to agree an Interest Period in accordance with
Clause 6.1, the interest rate applicable after the expiry of the
then current Interest Period shall be the rate determined by the
Agent in accordance with Clause 6.4 for consecutive Interest
Periods each of such duration (not exceeding six months) as the
Agent may in its discretion select.
6.6 Accrual and payment of interest Interest shall accrue from day to
day, shall be calculated on the basis of a 360 day year and the
actual number of days elapsed and shall be paid by the Borrower to
the Agent on the last day of each Interest Period and
additionally, during any Interest Period exceeding three months,
on the last day of each successive three month period after the
beginning of that Interest Period.
6.7 Ending of Interest Periods Each Interest Period shall, subject to
Clauses 6.2 and 6.3, end on the date which numerically corresponds
to the date on which the immediately preceding Interest Period
ended (or, in the case of the first Interest Period, to the
Drawdown Date) in the calendar month which is the number of months
selected or agreed after the calendar month in which the
immediately preceding Interest Period ended (or, in the case of
the first Interest Period, in which the Drawdown Date occurred),
except that:-
6.7.1 if there is no numerically corresponding date in the
calendar month in which the Interest Period ends, the
Interest Period shall end on the last Business Day in that
calendar month; and
6.7.2 if any Interest Period would end on a day which is not a
Business Day, that Interest Period shall end on the next
succeeding Business Day (unless the next succeeding Business
Day falls in the next calendar month, in which event the
Interest Period in question shall end on the next preceding
Business Day).
Any adjustment made pursuant to Clause 6.7.1 or 6.7.2 shall be ignored
for the purpose of determining the date on which any subsequent
Interest Period shall end.
6.8 Default Rate If an Event of Default shall occur, the whole of the
Indebtedness shall, from the date of the occurrence of the Event
of Default, bear interest up to the date of actual payment (both
before and after judgment) at the Default Rate, compounded at such
intervals as the Agent shall in its discretion determine, which
interest shall be payable from time to time by the Borrower to the
Agent on demand.
6.9 Determinations conclusive Each determination of an interest rate
made by the Agent in accordance with Clause 6 shall (save in the
case of manifest error or on any question of law) be final and
conclusive.
7 The Master Agreement
7.1 Purpose The Agent and the Borrower have entered, and/or may during
the Facility Period enter, into one or more Transactions pursuant
to a Master Agreement, the terms and conditions of each of which
are or will be specified in a Confirmation sent by the Agent to
the Borrower.
7.2 Additional Termination Event If the Loan is for any reason not
advanced to the Borrower on or before the Availability Termination
Date, and the Agent and the Borrower have entered into any
Transactions on or before the Availability Termination Date, for
the purposes of the Master Agreement an Additional Termination
Event (with the Agent as the Affected Party) shall be deemed to
have occurred on the Availability Termination Date.
7.3 Adjustment of Notional Amounts If the aggregate amount of the Loan
actually advanced by the Banks to the Borrower is less than the
Notional Amount (or the aggregate Notional Amounts) of the Hedging
Transactions entered into on or before the Drawdown Date, the
obligations of the Borrower in respect of those Hedging
Transactions shall, unless otherwise agreed by the Agent, be
calculated, so far as the Agent considers it practicable to do so,
by reference to a Notional Amount (or aggregate Notional Amounts)
equal to the amount of the Loan actually advanced, reduced on each
Repayment Date by the amount of the Repayment Instalment due on
that Repayment Date, adjusted if necessary in accordance with
Clause 5.2.
7.4 Effect of prepayment If the Borrower, subject always to Clause 5,
prepays part of the Loan (whether pursuant to Clause 5, Clause
11.2.5 or any other provision of this Agreement), and the amount
of the Loan remaining outstanding after application of that
prepayment is less than the Notional Amount (or the aggregate
Notional Amounts) of the Hedging Transactions then in effect
(reduced, if appropriate, in accordance with the Confirmations
relating to those Hedging Transactions), the obligations of the
Borrower in respect of those Hedging Transactions shall, unless
otherwise agreed by the Agent, be calculated, so far as the Agent
considers it practicable to do so, by reference to a Notional
Amount (or aggregate Notional Amounts) equal to the amount of the
Loan remaining outstanding after application of the prepayment in
question, reduced on each Repayment Date by the amount of the
Repayment Instalment due on that Repayment Date after taking into
account the application of the prepayment.
7.5 Authority In order to give effect to Clauses 7.3 and 7.4, or in
the event of voluntary or mandatory prepayment by the Borrower of
the whole of the Loan, the Borrower irrevocably authorises the
Agent to amend, restructure, unwind, cancel, net out, terminate,
liquidate, transfer or assign any of the rights and/or obligations
created pursuant to the Master Agreement in respect of those
Hedging Transactions, and/or to enter into any other interest rate
exchange and/or hedging transaction or commitment with the
Borrower or with any other counterparty approved by the Agent.
7.6 Termination of Transactions If the exercise of the Agent's rights
under Clause 7.5 results in the termination of any Transaction,
that Transaction shall, for the purposes of the Master Agreement
(including, without limitation, section 6(e)(i) of the Master
Agreement) be treated as a Terminated Transaction resulting from
an Event of Default by the Borrower.
7.7 Indemnity The Borrower will indemnify the Agent from time to time
on demand in respect of all liabilities, losses, costs or expenses
suffered, incurred or sustained by the Agent arising in any way in
relation to the exercise by the Agent of its rights under this
Clause, or arising in any way from any other termination,
cancellation, unwinding or restructuring of any Transaction,
together (in each case) with interest at the Default Rate from the
date of the Agent's demand until the date on which the Agent
receives payment or reimbursement, before or after any relevant
judgment.
8 Fee
The Borrower shall pay to or to the order of the Agent on the date of
this Agreement an arrangement fee in an amount equal to forty one
thousand two hundred and fifty Dollars ($41,250).
9 Security Documents
As security for the repayment of the Indebtedness, the Borrower shall
execute and deliver to the Agent or cause to be executed and delivered to
the Agent, on or before the Drawdown Date, the following Security
Documents in such forms and containing such terms and conditions as the
Agent shall require:-
9.1 the Mortgage a first preferred Xxxxxxxx Islands ship mortgage over
the Vessel;
9.2 the Assignment a deed of assignment of the Insurances, Earnings,
Charter Rights and Requisition Compensation of the Vessel;
9.3 the Corporate Guarantee the guarantee and indemnity of the
Corporate Guarantor;
9.4 the Accounts Security Deed an accounts security deed in respect of
all amounts from time to time standing to the credit of the
Accounts; and
9.5 Manager's Undertakings an undertaking from the Managers in respect
of the Vessel and the Borrower.
10 Agency and Trust
10.1 Appointment Each of the Banks appoints the Agent its agent for the
purpose of administering the Loan and the Security Documents.
10.2 Authority Each of the Banks irrevocably authorises the Agent
(subject to Clauses 10.4 and 10.19):-
10.2.1 to execute the Security Documents (other than this
Agreement) in its capacity as Agent;
10.2.2 to collect, receive, release or pay any money on its behalf;
10.2.3 acting on the instructions from time to time of an
Instructing Group to give or withhold any waivers, consents
or approvals under or pursuant to any of the Security
Documents;
10.2.4 acting on the instructions from time to time of and
Instructing Group to exercise, or refrain from exercising,
any discretions under or pursuant to any of the Security
Documents; and
10.2.5 to enforce the Security Documents on its behalf acting on
its instructions.
The Agent shall have no duties or responsibilities as agent or as
security trustee other than those expressly conferred on it by the
Security Documents and shall not be obliged to act on any instructions
from the Banks or an Instructing Group if to do so would, in the
opinion of the Agent, be contrary to any provision of the Security
Documents or to any law, or would expose the Agent to any actual or
potential liability to any third party.
10.3 Trust The Agent agrees and declares, and each of the Banks
acknowledges, that, subject to the terms and conditions of this
Clause, the Agent holds the Trust Property on trust for the Banks,
in accordance with their respective Proportionate Shares,
absolutely. Each of the Banks agrees that the obligations, rights
and benefits vested in the Agent in its capacity as security
trustee shall be performed and exercised in accordance with this
Clause. The Agent in its capacity as security trustee shall have
the benefit of all of the provisions of this Agreement benefitting
it in its capacity as agent for the Banks, and all the powers and
discretions conferred on trustees by the Trustee Xxx 0000 (to the
extent not inconsistent with this Agreement). In addition:-
10.3.1 the Agent (and any attorney, agent or delegate of the Agent)
may indemnify itself or himself out of the Trust Property
against all liabilities, costs, fees, damages, charges,
losses and expenses sustained or incurred by it or him in
relation to the taking or holding of any of the Trust
Property or in connection with the exercise or purported
exercise of the rights, trusts, powers and discretions
vested in the Agent or any other such person by or pursuant
to the Security Documents or in respect of anything else
done or omitted to be done in any way relating to the
Security Documents; and
10.3.2 the Banks acknowledge that the Agent shall be under no
obligation to insure any property nor to require any other
person to insure any property and shall not be responsible
for any loss which may be suffered by any person as a result
of the lack or insufficiency of any insurance; and
10.3.3 the Agent and the Banks agree that the perpetuity period
applicable to the trusts declared by this Agreement shall be
the period of eighty years from the date of this Agreement.
10.4 Limitations on authority Except with the prior written consent of
each of the Banks, the Agent shall not be entitled to :-
10.4.1 release or vary any security given for the Borrower's
obligations under this Agreement; nor
10.4.2 waive the payment of any sum of money payable by any of the
Security Parties under the Security Documents; nor
10.4.3 change the meaning of the expressions "Instructing Group" or
"Margin"; nor
10.4.4 exercise, or refrain from exercising, any discretion, or
give or withhold any consent, the exercise or giving of
which is, by the terms of this Agreement, expressly reserved
to the Banks; nor
10.4.5 extend the due date for the payment of any sum of money
payable by any of the Security Parties under the Security
Documents; nor
10.4.6 take or refrain from taking any step if the effect of such
action or inaction may lead to the increase of the
obligations of a Bank under any of the Security Documents;
nor
10.4.7 agree to change the currency in which any sum is payable
under the Security Documents (other than in accordance with
the terms of the Security Documents); nor
10.4.8 agree to change the covenants contained in Clause 11.2; nor
10.4.9 agree to amend this Clause 10.4.
10.5 Liability Neither the Agent nor any of its directors, officers,
employees or agents shall be liable to the Banks for anything done
or omitted to be done by the Agent under or in connection with the
Security Documents unless as a result of the Agent's wilful
misconduct or gross negligence.
10.6 Acknowledgement Each of the Banks acknowledges that:-
10.6.1 it has not relied on any representation made by the Agent or
any of the Agent's directors, officers, employees or agents
or by any other person acting or purporting to act on behalf
of the Agent to induce it to enter into any of the Security
Documents;
10.6.2 it has made and will continue to make without reliance on
the Agent, and based on such documents and other evidence as
it considers appropriate, its own independent investigation
of the financial condition and affairs of the Security
Parties in connection with the making and continuation of
the Loan;
10.6.3 it has made its own appraisal of the creditworthiness of the
Security Parties;
10.6.4 the Agent shall not have any duty or responsibility at any
time to provide it with any credit or other information
relating to any of the Security Parties unless that
information is received by the Agent pursuant to the express
terms of the Security Documents.
Each of the Banks agrees that it will not assert nor seek to assert
against any director, officer, employee or agent of the Agent or
against any other person acting or purporting to act on behalf of the
Agent any claim which it might have against them in respect of any of
the matters referred to in this Clause.
10.7 Limitations on responsibility The Agent shall have no
responsibility to any of the Security Parties or to the Banks on
account of:-
10.7.1 the failure of a Bank or of any of the Security Parties to
perform any of their respective obligations under the
Security Documents;
10.7.2 the financial condition of any of the Security Parties;
10.7.3 the completeness or accuracy of any statements,
representations or warranties made in or pursuant to any of
the Security Documents, or in or pursuant to any document
delivered pursuant to or in connection with any of the
Security Documents;
10.7.4 the negotiation, execution, effectiveness, genuineness,
validity, enforceability, admissibility in evidence or
sufficiency of any of the Security Documents or of any
document executed or delivered pursuant to or in connection
with any of the Security Documents.
10.8 The Agent's rights The Agent may:-
10.8.1 assume that all representations or warranties made or deemed
repeated by any of the Security Parties in or pursuant to
any of the Security Documents are true and complete, unless,
in its capacity as the Agent, it has acquired actual
knowledge to the contrary; and
10.8.2 assume that no Event of Default or Potential Event of
Default has occurred unless, in its capacity as the Agent,
it has acquired actual knowledge to the contrary; and
10.8.3 rely on any document or Communication believed by it to be
genuine; and
10.8.4 rely as to legal or other professional matters on opinions
and statements of any legal or other professional advisers
selected or approved by it; and
10.8.5 rely as to any factual matters which might reasonably be
expected to be within the knowledge of any of the Security
Parties on a certificate signed by or on behalf of that
Security Party; and
10.8.6 refrain from exercising any right, power, discretion or
remedy unless and until instructed to exercise that right,
power, discretion or remedy and as to the manner of its
exercise by the Banks (or, where applicable, by an
Instructing Group) and unless and until the Agent has
received from the Banks any payment which the Agent may
require on account of, or any security which the Agent may
require for, any costs, claims, expenses (including legal
and other professional fees) and liabilities which it
considers it may incur or sustain in complying with those
instructions.
10.9 The Agent's duties The Agent shall:-
10.9.1 if requested in writing to do so by a Bank, make enquiry and
advise the Banks as to the performance or observance of any
of the provisions of the Security Documents by any of the
Security Parties or as to the existence of an Event of
Default; and
10.9.2 inform the Banks promptly of any Event of Default of which
the Agent has actual knowledge.
10.10 No deemed knowledge The Agent shall not be deemed to have actual
knowledge of the falsehood or incompleteness of any representation
or warranty made or deemed repeated by any of the Security Parties
or actual knowledge of the occurrence of any Event of Default or
Potential Event of Default unless a Bank or any of the Security
Parties shall have given written notice thereof to the Agent in
its capacity as the Agent. Any information acquired by the Agent
other than specifically in its capacity as the Agent shall not be
deemed to be information acquired by the Agent in its capacity as
the Agent.
10.11 Other business The Agent may, without any liability to account to
the Banks, generally engage in any kind of banking or trust
business with any of the Security Parties or any of their
respective subsidiaries or associated companies or with a Bank as
if it were not the Agent.
10.12 Indemnity The Banks shall, promptly on the Agent's request,
reimburse the Agent in their respective Proportionate Shares, for,
and keep the Agent fully indemnified in respect of:-
10.12.1 all amounts payable by the Borrower to the Agent pursuant to
Clause 18.2 to the extent that those amounts are not paid by
the Borrower;
10.12.2 all liabilities, damages, costs and claims sustained or
incurred by the Agent in connection with the Security
Documents, or the performance of its duties and obligations,
or the exercise of its rights, powers, discretions or
remedies under or pursuant to any of the Security Documents;
or in connection with any action taken or omitted by the
Agent under or pursuant to any of the Security Documents,
unless in any case those liabilities, damages, costs or
claims arise solely from the Agent's wilful misconduct or
gross negligence.
10.13 Employment of agents In performing its duties and exercising its
rights, powers, discretions and remedies under or pursuant to the
Security Documents, the Agent shall be entitled to employ and pay
agents to do anything which the Agent is empowered to do under or
pursuant to the Security Documents (including the receipt of money
and documents and the payment of money) and to act or refrain from
taking action in reliance on the opinion of, or advice or
information obtained from, any lawyer, banker, broker, accountant,
valuer or any other person believed by the Agent in good faith to
be competent to give such opinion, advice or information.
10.14 Distribution of payments The Agent shall pay promptly to the order
of each of the Banks that Bank's Proportionate Share of every sum
of money received by the Agent pursuant to the Security Documents
or the Mortgagees' Insurances (with the exception of any amounts
payable pursuant to Clause 8 and any amounts which, by the terms
of the Security Documents, are paid to the Agent for the account
of the Agent alone or specifically for the account of one or more
Banks) and until so paid such amount shall be held by the Agent on
trust absolutely for that Bank.
10.15 Reimbursement The Agent shall have no liability to pay any sum to
a Bank until it has itself received payment of that sum. If,
however, the Agent does pay any sum to a Bank on account of any
amount prospectively due to that Bank pursuant to Clause 10.14
before it has itself received payment of that amount, and the
Agent does not in fact receive payment within five Business Days
after the date on which that payment was required to be made by
the terms of the Security Documents or the Mortgagees' Insurances,
each Bank receiving any such payment will, on demand by the Agent,
refund to the Agent an amount equal to the amount received by it,
together with an amount sufficient to reimburse the Agent for any
amount which the Agent may certify that it has been required to
pay by way of interest on money borrowed to fund the amount in
question during the period beginning on the date on which that
amount was required to be paid by the terms of the Security
Documents or the Mortgagees' Insurances and ending on the date on
which the Agent receives reimbursement.
10.16 Redistribution of payments Unless otherwise agreed between the
Banks and the Agent, if at any time a Bank receives or recovers by
way of set-off, the exercise of any lien or otherwise (other than
from any assignee or transferee of or sub-participant in that
Bank's Commitment), an amount greater than that Bank's
Proportionate Share of any sum due from any of the Security
Parties under the Security Documents (the amount of the excess
being referred to in this Clause as the "Excess Amount") then:-
10.16.1 that Bank shall promptly notify the Agent (which shall
promptly notify each other Bank);
10.16.2 that Bank shall pay to the Agent an amount equal to the
Excess Amount within ten days of its receipt or recovery of
the Excess Amount; and
10.16.3 the Agent shall treat that payment as if it were a payment
by the Security Party in question on account of the sum owed
to the Banks as aforesaid and shall account to the Banks in
respect of the Excess Amount in accordance with the
provisions of this Clause.
However, if a Bank has commenced any Proceedings to recover sums owing to
it under the Security Documents and, as a result of, or in connection
with, those Proceedings has received an Excess Amount, the Agent shall
not distribute any of that Excess Amount to any other Bank which had been
notified of the Proceedings and had the legal right to, but did not, join
those Proceedings or commence and diligently prosecute separate
Proceedings to enforce its rights in the same or another court.
10.17 Rescission of Excess Amount If all or any part of any Excess
Amount is rescinded or must otherwise be restored to any of the
Security Parties or to any other third party, the Banks which have
received any part of that Excess Amount by way of distribution
from the Agent pursuant to this Clause shall repay to the Agent
for the account of the Bank which originally received or recovered
the Excess Amount, the amount which shall be necessary to ensure
that the Banks share rateably in accordance with their
Proportionate Shares in the amount of the receipt or payment
retained, together with interest on that amount at a rate
equivalent to that (if any) paid by the Bank receiving or
recovering the Excess Amount to the person to whom that Bank is
liable to make payment in respect of such amount, and Clause
10.16.3 shall apply only to the retained amount.
10.18 Proceedings Each of the Banks and the Agent shall notify one
another of the proposed commencement of any Proceedings under any
of the Security Documents prior to their commencement.
10.19 Instructions Where the Agent is authorised or directed to act or
refrain from acting in accordance with the instructions of the
Banks or of an Instructing Group each of the Banks shall provide
the Agent with instructions within three Business Days of the
Agent's request (which request may be made orally or in writing).
If a Bank does not provide the Agent with instructions within that
period, that Bank shall be bound by the decision of the Agent.
Nothing in this Clause shall limit the right of the Agent to take,
or refrain from taking, any action without obtaining the
instructions of the Banks or an Instructing Group if the Agent in
its discretion considers it necessary or appropriate to take, or
refrain from taking, such action in order to preserve the rights
of the Banks under or in connection with the Security Documents.
In that event, the Agent will notify the Banks of the action taken
by it as soon as reasonably practicable, and the Banks agree to
ratify any action taken by the Agent pursuant to this Clause.
10.20 Communications Any Communication under this Clause shall be given,
delivered, made or served, in the case of the Agent (in its
capacity as Agent or as one of the Banks), and in the case of the
other Banks, at the address or fax number indicated in Schedule 1.
10.21 Payments All amounts payable to a Bank under this Clause shall be
paid to such account at such bank as that Bank may from time to
time direct in writing to the Agent.
10.22 Retirement Subject to a successor acceptable to the Borrower being
appointed in accordance with this Clause, the Agent may retire as
agent and/or security trustee at any time without assigning any
reason by giving to the Borrower and the Banks notice of its
intention to do so, in which event the following shall apply:-
10.22.1 the Banks may within thirty days after the date of the
Agent's notice appoint a successor to act as agent and/or
security trustee or, if they fail to do so, the Agent may
appoint any other bank or financial institution as its
successor;
10.22.2 the resignation of the Agent shall take effect
simultaneously with the appointment of its successor on
written notice of that appointment being given to the
Borrower and the Banks;
10.22.3 the Agent shall thereupon be discharged from all further
obligations as agent and/or security trustee but shall
remain entitled to the benefit of the provisions of this
Clause;
10.22.4 the Agent's successor and each of the other parties to this
Agreement shall have the same rights and obligations amongst
themselves as they would have had if that successor had been
a party to this Agreement.
10.23 No fiduciary relationship Except as provided in Clauses 10.3 and
10.14, the Agent shall not have any fiduciary relationship with or
be deemed to be a trustee of or for a Bank and nothing contained
in any of the Security Documents shall constitute a partnership
between any two or more Banks or between the Agent and any Bank.
10.24 The Agent as a Bank The expression "the Banks" when used in the
Security Documents includes the Agent in its capacity as one of
the Banks. The Agent shall be entitled to exercise its rights,
powers, discretions and remedies under or pursuant to the Security
Documents in its capacity as one of the Banks in the same manner
as any other Bank and as if it were not also the Agent.
10.25 The Agent as security trustee Unless the context otherwise
requires, the expression "the Agent" when used in the Security
Documents includes the Agent acting in its capacities both as
agent and security trustee.
11 Covenants
11.1 Negative covenants
The Borrower will not without the Agent's prior written consent:-
11.1.1 no disposals or third party rights dispose of or create or
permit to arise or continue any Encumbrance or other third
party right on or over all or any part of its present or
future assets or undertaking (including, without limitation,
any of its rights under or in connection with the Master
Agreement and any amount at any time payable by it to the
Agent under or pursuant to the Master Agreement); nor
11.1.2 no borrowings borrow any money or incur any obligations
under leases, except monies borrowed under this Agreement or
from shareholders and/or affiliates, which shall be
subordinated to the Agent; nor
11.1.3 no repayments repay any loans made to it; nor
11.1.4 no substantial liabilities except in the ordinary course of
business, incur any liability to any third party which is in
the opinion of the Agent of a substantial nature; nor
11.1.5 no dealings with Master Agreement assign, novate or in any
other way transfer any of its rights or obligations under or
pursuant to the Master Agreement, nor enter into any
interest rate exchange or hedging agreement with anyone
other than the Agent, nor any other agreement or commitment
the effect of which is, in the opinion of the Agent,
materially to prejudice the hedging of the Borrower's
interest rate risk effected by the Hedging Transactions from
time to time entered into between the Borrower and the
Agent; nor
11.1.6 no other business engage in any business other than the
ownership, operation, chartering and management of the
Vessel; nor
11.1.7 no loans or other financial commitments make any loan nor
enter into any guarantee or indemnity or otherwise
voluntarily assume any actual or contingent liability in
respect of any obligation of any other person; nor
11.1.8 no sale of Vessel sell or otherwise dispose of the Vessel or
any shares in the Vessel nor agree to do so; nor
11.1.9 no chartering after Event of Default following the
occurrence and during the continuation of an Event of
Default let the Vessel on charter or renew or extend any
charter or other contract of employment of the Vessel (nor
agree to do so); nor
11.1.10 no change in Vessel's managers appoint anyone other than the
Managers as commercial or technical managers of the Vessel,
nor terminate or materially vary the arrangements for the
commercial or technical management of the Vessel, nor permit
the Managers to sub-contract or delegate the commercial or
technical management of the Vessel to any third party; nor
11.1.11 no change in ownership or control permit any change in the
Borrower's and/or the Corporate Guarantor's intermediate or
ultimate beneficial ownership and control from that advised
to the Agent at the date of this Agreement; nor
11.1.12 negative pledge permit any Encumbrance (other than in favour
of the Banks) to subsist, arise or be created or extended
over all or any part of its present or future undertakings,
assets, rights or revenues to secure or prefer any present
or future Indebtedness or other liability or obligation of
the Borrower or any other person; nor
11.1.13 no merger merge or consolidate with any other person; nor
11.1.14 acquisitions acquire any further assets other than the
Vessel and rights arising under contracts entered into by or
on behalf of the Borrower in the ordinary course of its
business of owning, operating and chartering the Vessel; nor
11.1.15 other obligations incur any obligations except for
obligations arising under the Security Documents or
contracts entered into in the ordinary course of its
business of owning, operating and chartering the Vessel; nor
11.1.16 guarantees it will not issue any guarantees or indemnities
or otherwise become directly or contingently liable for the
obligations of any person, firm, or corporation except
pursuant to the Security Documents and except for guarantees
or indemnities from time to time required in the ordinary
course by any protection and indemnity or war risks
association with which the Vessel is entered, guarantees
required to procure the release of the Vessel from any
arrest, detention, attachment or levy or guarantees or
undertakings required for the salvage of the Vessel.
11.2 Positive covenants
11.2.1 Registration of Vessel The Borrower undertakes to maintain
the registration of the Vessel under the flag referred to in
Recital (A) for the duration of the Facility Period.
11.2.2 Provision of valuation certificate The Agent will within the
last ninety (90) days of each calendar year commencing after
the Drawdown Date obtain at the Borrower's expense a
valuation certificate addressed to the Agent from two
Approved Brokers certifying the market value of the Vessel.
Such valuation shall be for the cost of the Borrower once
during each period of twelve calendar months during the
Facility Period (commencing on the Drawdown Date) and may be
made with or without physical inspection of the Vessel (as
the Agent may require) on the basis of a sale for prompt
delivery for cash at arm's length on normal commercial terms
as between a willing seller and a willing buyer and (at the
option of the Agent) either free of or subject to any
existing charter or other contract of employment. The Agent
may obtain additional valuations at any time at its
discretion at its own cost (unless there is an Event of
Default which is continuing in which case the cost shall be
for the Borrower's account).
11.2.3 Vessel valuations for purposes of Security Documents For the
purposes of the Security Documents, the market value of the
Vessel shall be the value certified in the last valuation
certificate obtained by the Agent pursuant to Clauses 11.2.2
PROVIDED THAT if the Vessel at the date of the Agent's
request shall be subject to any charter or other contact of
employment or any Encumbrance (other than as created by or
pursuant to the Security Documents) the Agent shall for the
purpose of the Security Documents, be entitled to deduct
from the market value (determined as aforesaid) such sum (if
any) as in the Agent's discretion shall represent the amount
of the diminution in the market value of the Vessel arising
as a result of the existence of such charter or other
contract of employment or Encumbrance and in that event, for
the purposes of the Security Documents, the market value of
the Vessel shall be the said value less any amount so
deducted by the Agent.
11.2.4 Additional security If and so often as the aggregate of the
market value of the Vessel (determined by the Agent in
accordance with Clause 11.2.3) plus the value of any
additional security for the time being provided to the Agent
pursuant to this Clause shall be less than (i) one hundred
and twenty per centum (120%) of the amount of the
Indebtedness for the period commencing on the Drawdown Date
and ending on 31 December 2008 and (ii) one hundred and
twenty five per centum (125%) of the amount of the
Indebtedness for the remainder of the Facility Period, the
Borrower will, within thirty days of the request of the
Agent to do so, at the Borrower's option:-
(a) pay to the Agent or to its nominee a cash deposit in
the amount of the shortfall to be secured in favour of
the Banks (or to the Agent on their behalf) as
additional security for the payment of the Loan; or
(b) give to the Banks other additional security in amount
and form acceptable to the Banks in their discretion;
or
(c) prepay the amount of the Loan which will ensure that
the aggregate of the market value of the Vessel
(determined as aforesaid) plus the value of any such
additional security is not less than (i) one hundred
and twenty per centum (120%) of the amount of the
Indebtedness for the period commencing on the Drawdown
Date and ending on 31 December 2008 and (ii) one
hundred and twenty five per centum (125%) of the amount
of the Indebtedness for the remainder of the Facility
Period.
Clauses 5.4, 5.5 and 5.6 shall apply, mutatis mutandis, to
any prepayment made pursuant to this Clause and the value of
any additional security provided pursuant to this Clause
shall be determined by the Agent in its discretion.
11.2.5 Financial statements The Borrower will supply to the Agent
without request:
(a) the Borrower's and Corporate Guarantor's annual audited
financial statements for each financial year of the
Borrower and the Corporate Guarantor ending during the
Facility Period, containing (amongst other things) the
Borrower's and Corporate Guarantor's profit and loss
account for, and balance sheet within one hundred and
eighty (180) days after the end of, each such financial
year, prepared in accordance with generally accepted
accounting principles and practices applicable to
companies incorporated in the Borrower's and Corporate
Guarantor's country of incorporation consistently
applied, and audited by a firm of chartered accountants
(or equivalent) acceptable to the Agent and in the case
of the Corporate Guarantor consolidated, in each case
within one hundred and eighty days of the end of the
financial year to which they relate;
(b) the Borrower's and Corporate Guarantor's semi-annual
audited management accounts and financial statements
within ninety days (90) after the end of each financial
half year.
11.2.6 Other information The Borrower will promptly supply and will
procure that the Corporate Guarantor supplies to the Agent
copies of all financial and other information from time to
time given by the Borrower and the Corporate Guarantor to
its shareholders and such information and explanations as
the Agent may from time to time require in connection with
the operation of the Vessel and the Borrower's and the
Corporate Guarantor's profit and liquidity based on the
applicable laws and regulations and the Agent's own internal
guidelines relating to the Agent's verification of the
identity and knowledge of its customers, and will procure
that the Agent be given the like information and
explanations relating to all other Security Parties.
11.2.7 Evidence of goodstanding The Borrower will from time to time
on the request of the Bank provide the Agent with evidence
in form and substance satisfactory to the Agent that the
Security Parties and all corporate shareholders of any of
the Security Parties remain in good standing.
11.2.8 Evidence of current COFR Without limiting the Borrower's
obligations under Clause 11.2.6, and prior to the Vessel
entering any location that is subject to the United States
Oil Pollution Act 1990 (or any re-enactment thereof), the
Borrower shall notify the Agent and the Borrower shall (and
shall from time to time whilst the Vessel is situated in
such location) at the request of the Agent provide the Agent
with such evidence as the Agent may reasonably require that
the Vessel has a valid and current Certificate of Financial
Responsibility pursuant to the United States Oil Pollution
Xxx 0000.
11.2.9 ISM Code compliance The Borrower will:-
(a) procure that the Vessel remains for the duration of the
Facility Period subject to a SMS;
(b) maintain a valid and current SMC for the Vessel
throughout the Facility Period;
(c) if not itself the Company, procure that each Company
maintains a valid and current DOC throughout the
Facility Period;
(d) immediately notify the Agent in writing of any actual
or threatened withdrawal, suspension, cancellation or
modification of the Vessel's SMC or of the Company's
DOC;
(e) immediately notify the Agent in writing of any
"accident" or "major non-conformity", as each of those
terms is defined in the Guidelines on the
Implementation of the International Safety Management
Code by Administrations adopted by the Assembly of the
International Maritime Organisation pursuant to
Resolution A.788(19), and of the steps being taken to
remedy the situation; and
(f) not without the prior written consent of the Agent
(which will not be unreasonably withheld) change the
identity of the Company.
11.2.10 ISPS Code compliance The Borrower will:-
(a) procure that the Vessel and the Company responsible for
the Vessel's compliance with the ISPS Code comply with
the ISPS Code; and
(b) maintain for the Vessel throughout the Facility Period
a valid and current International Ship Security
Certificate issued under the ISPS Code ("ISSC"); and
(c) notify the Agent immediately in writing of any actual
or threatened withdrawal, suspension, cancellation or
modification of the ISSC.
11.2.11 Annex VI compliance The Borrower will:
(a) for the duration of the Facility Period comply with
Annex VI in relation to the Vessel and procure that the
Vessel's master and crew are familiar with, and that
the Vessel complies with, Annex VI;
(b) maintain a valid and current IAPPC for the Vessel
throughout the Facility Period and provide a copy to
the Agent; and
(c) immediately notify the Agent in writing of any actual
or threatened withdrawal, suspension, cancellation or
modification of the IAPPC of the Vessel.
11.2.12 Environment The Borrower covenants with the Agent as
follows:
(a) it shall comply with all applicable Environmental Laws
including, without limitation, requirements relating to
the establishment of financial responsibility (and
shall require that all Environmental Affiliates of the
Borrower comply with all applicable Environmental Laws
and obtain and comply with all required Environmental
Approvals, which Environmental Laws and Environmental
Approvals relate to the Vessel or its operation or its
carriage or cargo), except where that non-compliance
would not have a Material Adverse Effect;
(b) it shall conduct and complete all reasonably necessary
investigations, studies, sampling, audits and testings
required in connection with any known (or threatened)
Release of Materials of Environmental Concern which
would have a Material Adverse Effect; and
(c) it shall, promptly upon the occurrence of any of the
following events, provide to the Agent a certificate of
an officer of the Borrower or of the Borrower's agents
specifying in detail the nature of the event
concerned:-
(i) the receipt by the Borrower or any Environmental
Affiliate (where the Borrower has knowledge of the
receipt) of any Environmental Claim which would
have a Material Adverse Effect; or
(ii) any (or any threatened) Release of Materials of
Environmental Concern which would have a Material
Adverse Effect;
and upon the written request of the Agent, the Borrower
shall submit to the Agent, at reasonable intervals, a
report updating the status of any occurrence of an
Environmental Claim or a Release of Materials of
Environmental Concern, that would have a Material
Adverse Effect.
11.2.13 Inspection of records The Borrower will permit the
inspection of its financial records and accounts from time
to time by the Agent or its nominee.
11.2.14 Pari passu obligations The Borrower will ensure that,
throughout the Facility Period, the obligations of the
Security Parties under or pursuant to the Security Documents
rank at least pari passu with all other existing or future
indebtedness, obligations or liabilities of the Security
Parties, other than any mandatorily preferred by law.
11.2.15 Notification of Event of Default The Borrower will
immediately notify the Agent in writing of the occurrence of
any Event of Default or Potential Event of Default.
11.2.16 Not imperil Flag, Ownership, Insurances The Borrower will
ensure that the Vessel is maintained and trade in conformity
with the laws of the Xxxxxxxx Islands, of the Borrower or of
the nationality of its officers, and in accordance with the
requirements of the Insurances and will ensure that nothing
is done or permitted to be done which could endanger the
flag of the Vessel or its unencumbered (other than
Encumbrances in favour of the Banks and/or permitted by this
Agreement) ownership or its Insurances.
11.2.17 Chartering The Borrower will ensure and procure that in the
event of the Vessel being employed under a charterparty, the
duration of which exceeds twelve (12) months, the Agent
shall be furnished forthwith with (a) details of the new
employment, (b) (if required by the Agent) a specific
charterparty assignment in favour of the Agent of the
benefit of such charterparty and (c) a notice of any such
assignment addressed to the relevant charterer and endorsed
with an acknowledgement of receipt by the relevant
charterer, all in form and substance satisfactory to the
Agent.
11.2.18 Earnings The Borrower will ensure and procure that, unless
and until directed by the Agent otherwise upon an Event of
Default (i) all the Earnings of the Vessel shall be paid to
the Earnings Accounts and (ii) the persons from whom the
Earnings are from time to time due are irrevocably
instructed to pay them to the Earnings Accounts or to such
account in the name of the Borrower as shall be from time to
time determined by the Agent in accordance with the
provisions hereof and of the relevant Security Documents.
11.2.19 Additional Documents The Borrower will from time to time and
within ten (10) days after the Agent's request execute and
deliver to the Agent or procure the execution and delivery
to the Agent of all such documents as shall be deemed
desirable at the reasonable discretion of the Agent for
giving full effect to this Agreement, and for perfecting,
protecting the value of or enforcing any rights or
securities granted to the Agent under any one or more of
this Agreement, the other Security Documents and any other
documents executed pursuant hereto or thereto and in case
that any conditions precedent (with the Agent's consent)
have not been fulfilled prior to the Drawdown Date, such
conditions shall be complied with within fourteen (14) days
of the Drawdown Date (unless the Agent agrees otherwise in
writing) and failure to comply with this covenant shall be
an Event of Default.
11.2.20 Physical condition survey of the Vessel and inspection of
records The Borrower will permit the Agent to conduct a
physical condition survey of the Vessel and to conduct a
comprehensive inspection of the class and other records of
the Vessel by a surveyor appointed by the Agent (in its
discretion) from time to time during the Facility Period and
at the Borrower's expense.
11.2.21 Majority control of Corporate Guarantor The Borrower shall
procure that members of the family of the ultimate
beneficial shareholder of the Borrower and the Corporate
Guarantor shall maintain the majority control over the
shares of the Corporate Guarantor.
11.2.22 Financial covenants of Corporate Guarantor The Borrower and
the Corporate Guarantor shall procure that at all times
during the Facility Period:
(a) the Leverage in relation to the Corporate Guarantor
does not exceed 75%; and
(b) the Corporate Guarantor shall maintain a minimum Market
Adjusted Net Worth (basis book value) of not less than
fifteen million Dollars ($15,000,000); and
(c) the Corporate Guarantor shall maintain minimum Free
Liquidity of not less than three hundred thousand
Dollars ($300,000) per Fleet Vessel.
The expressions used in this Clause 11.2.22 shall be
construed in accordance with law and accounting principles
internationally accepted as used in the financial statements
produced in accordance with Clause 11.2.5, and for the
purposes of this Agreement:
"Accounting Information" means the semi-annual financial
statements and/or the annual financial statements to be
provided by the Borrower and the Corporate Guarantor to the
Agent in accordance with Clause 11.2.5.
"Accounting Period" means each consecutive period of
approximately six months falling during the Facility Period
(ending on the last day in June and December of each year)
for which semi-annual Accounting Information is required to
be delivered pursuant to this Agreement.
"Current Assets" means, in respect of the Corporate
Guarantor, the aggregate (as of the date of calculation) of
the Corporate Guarantor's cash, marketable securities, trade
and other receivables realisable within one year,
inventories and prepaid expenses which are to be charged to
income within one year as well as any other assets listed
under the definition of Total Assets as stated in the
Accounting Information then most recently required to be
delivered pursuant to Clause 11.2.5.
"Debt" means the aggregate (as of the date of calculation)
of all obligations of the Corporate Guarantor then
outstanding for the payment or repayment of money as stated
in the Accounting Information then most recently required to
be delivered pursuant to Clause 11.2.5 including, without
limitation:
(a) any amounts payable by the Corporate Guarantor under
leases or similar arrangements over their respective
periods;
(b) any credit to the Corporate Guarantor from a supplier
of goods or under any instalment purchase or other
similar arrangement;
(c) the aggregate amount then outstanding of liabilities
and obligations of third parties to the extent that
they are guaranteed by the Corporate Guarantor;
(d) any contingent liabilities (including any taxes or
other payments under dispute or arbitration) which have
been or, under GAAP, should be recorded in the notes to
the Corporate Guarantor's financial statements; and
(e) any deferred tax liabilities.
"Fleet Market Value" means the aggregate of the Market Value
of the Fleet Vessels.
"Fleet Vessels" means any vessel (including, but not limited
to, the Vessel) from time to time owned by the Corporate
Guarantor (each a "Fleet Vessel").
"Free Liquidity" means the sum of cash and bank deposits,
free of any Encumbrances.
"GAAP" means accounting principles, concepts, bases and
policies generally adopted and accepted in the United States
of America consistently applied.
"Leverage" means Total Long Term Debt divided by Total
Market Adjusted Assets.
"Market Adjusted Net Worth" means, in respect of an
Accounting Period, the amount of the Corporate Guarantor's
total shareholders' equity, as such equity is reflected in
the most recent Accounting Information, adjusted by the
difference between the Fleet Market Value and the book value
of Tangible Fixed Assets.
"Tangible Fixed Assets" means, in respect of an Accounting
Period, the value (less depreciation) on a consolidated
basis of all tangible fixed assets of the Corporate
Guarantor as stated in the then most recent Accounting
Information.
"Total Assets" means, in respect of an Account Period, the
aggregate of Current Assets and Tangible Fixed Assets, as
well as any other assets listed under the definition Total
Assets as stated in the then most recent Accounting
Information.
"Total Long Term Debt" means the aggregate (as of the date
of calculation) of all those component parts of the Debt
which fall due or whose final payment is due more than one
year after the respective dates of the agreements providing
for such component parts of the Debt (including for the
avoidance of doubt the current portion of such Debt) as
stated in the Accounting Information then most recently
required to be delivered pursuant to Clause 11.2.5.
"Total Market Adjusted Assets" means the aggregate at any
time of Current Assets and Value Adjusted Long Term Assets.
"Value Adjusted Long Term Assets" means the aggregate at any
time of the Fleet Market Value (as most recently required to
be calculated) and the Corporate Guarantor's other long term
tangible assets as stated in its Accounting Information then
most recently required to be delivered pursuant to Clause
11.2.5.
12 Accounts
12.1 Maintenance of Accounts The Borrower shall maintain the Accounts
with the Agent for the duration of the Facility Period free of
Encumbrances and rights of set off other than as created by or
pursuant to the Security Documents.
12.2 Earnings The Borrower shall procure that there is credited to the
Earnings Account, all Earnings and any Requisition Compensation of
the Vessel.
12.3 Transfers to Retention Account On the day in each calendar month
during the Facility Period which numerically corresponds to the
day on which the Drawdown Date occurred (or, in any month in which
there is no such day, on the last Business Day of that month), the
Borrower shall procure that there is transferred from the Earnings
Account (and irrevocably authorise the Agent to transfer from the
Earnings Account) to the Retention Account :-
12.3.1 any costs or other amounts due and payable or outstanding in
respect of the Loan, other than interest and principal; and
12.3.2 one-third of the amount of the Repayment Instalment due on
the next Repayment Date; and
12.3.3 the amount of interest due on the next Interest Payment Date
divided by the number of months between the last Interest
Payment Date and the Interest Payment Date in question.
12.4 Additional payments to Retention Account If for any reason the
amount standing to the credit of the Earnings Account shall be
insufficient to make any transfer to the Retention Account
required by Clause 12.3, the Borrower shall, without demand,
procure that there is credited to the Retention Account, on the
date on which the relevant amount would have been transferred from
the Earnings Account, an amount equal to the amount of the
shortfall.
12.5 Application of Retention Account The Borrower shall procure that
there is transferred from the Retention Account (and irrevocably
authorise the Agent to transfer from the Retention Account) to the
Agent on behalf of the Banks:-
12.5.1 on each Repayment Date, the amount of the Repayment
Instalment then due; and
12.5.2 on each Interest Payment Date, the amount of interest then
due.
12.6 Borrower's obligations not affected If for any reason the amount
standing to the credit of the Retention Account shall be
insufficient to pay any Repayment Instalment or to make any
payment of interest when due, the Borrower's obligation to pay
that Repayment Instalment or to make that payment of interest
shall not be affected.
12.7 Release of surplus Any amount remaining to the credit of the
Earnings Account following the making of any transfer required by
Clause 12.3 shall (unless an Event of Default or Potential Event
of Default shall have occurred and be continuing) be released to
or to the order of the Borrower.
12.8 Restriction on withdrawal During the Facility Period no sum may be
withdrawn from the Retention Account (except in accordance with
this Clause) without the prior written consent of the Agent.
12.9 Relocation of Accounts At any time following the occurrence and
during the continuation of an Event of Default, the Agent may
without the consent of the Borrower relocate either of the
Accounts to any other branch of the Agent, without prejudice to
the continued application of this Clause and the rights of the
Agent and the Banks under or pursuant to the Security Documents.
13 Events of Default
13.1 The Agent's rights If any of the events set out in Clause 13.2
occurs, the Agent may at its discretion by notice to the Borrower
declare itself to be under no further obligation to the Borrower
under or pursuant to this Agreement and may declare all or any
part of the Indebtedness (including such unpaid interest as shall
have accrued) to be immediately payable, in which event the
Indebtedness (or the part of the Indebtedness referred to in the
Bank's notice) shall immediately become due and payable without
any further demand or notice of any kind.
13.2 Events of Default The events referred to in Clause 13.1 are:-
13.2.1 payment default if the Borrower defaults in the payment of
any part of the Indebtedness when due; or if the Charterer
defaults in the payment of any part of the hire under the
Charter when due;
13.2.2 other default if any of the Security Parties fails to
observe or perform any of the covenants, conditions,
undertakings, agreements or obligations on its part
contained in any of the Security Documents and, where such
default is capable of remedy, such default is not remedied
within thirty (30) days if the date of its occurrence, or
shall in any other way be in breach of or do or cause to be
done any act repudiating or evidencing an intention to
repudiate any of the Security Documents; or
13.2.3 misrepresentation or breach of warranty if any
representation or warranty made or repeated, or any other
information given, by any of the Security Parties to the
Agent in or leading up to or during the currency of any of
the Security Documents, or in or pursuant to any notice or
other document delivered to the Agent under or pursuant to
any of the Security Documents, is false or incorrect or
misleading in any respect which the Agent in its discretion
considers to be material; or
13.2.4 execution if a distress or execution or other process of a
court or authority is levied on any of the property of any
of the Security Parties before or after final judgment or by
order of any competent court or authority and is not
satisfied within seven days of levy; or
13.2.5 insolvency events if any of the Security Parties or the
Charterer:-
(a) resolves to appoint, or applies for or consents to the
appointment of, a receiver, administrative receiver,
trustee, administrator or liquidator of itself or of
all or part of its assets; or
(b) is unable or admits its inability to pay its debts as
they fall due; or
(c) makes a general assignment for the benefit of creditors
or enters into a moratorium on payment of any of its
indebtedness; or
(d) ceases trading or threatens to cease trading; or
(e) has appointed an Inspector under the Companies Xxx 0000
or any statutory provision which the Agent in its
discretion considers analogous thereto; or
13.2.6 insolvency proceedings if any proceedings are commenced or
threatened, or any order or judgment is given by any court,
for the bankruptcy, liquidation, winding up, administration
or re-organisation of any of the Security Parties or for the
appointment of a receiver, administrative receiver,
administrator, liquidator or trustee of any of the Security
Parties or of all or part of the assets of any of the
Security Parties, or if any person appoints or purports to
appoint such receiver, administrative receiver,
administrator, liquidator or trustee; or
13.2.7 impossibility or illegality if any event occurs which would,
or would with the passage of time, render performance of any
of the Security Documents by any of the Security Parties
impossible, unlawful or unenforceable by the Agent; or
13.2.8 conditions subsequent if any of the conditions set out in
Clause 3.2 is not satisfied within the time reasonably
required by the Agent; or
13.2.9 covenants if any of the covenants set out in Clause 11 is
not satisfied within thirty days; or 13.2.10 change in
ownership or control if any change occurs in the Borrower's
and/or the Corporate Guarantor's beneficial ownership and
control from that advised to the Agent at the date of this
Agreement, or otherwise in accordance with Clause 11.1.12
(or in the case of the Borrower) or Clause 8.1. of the
Corporate Guarantee (in the case of the Corporate
Guarantor).
13.2.11 revocation or modification of consents etc. if any consent,
licence, approval, authorisation, filing, registration or
other requirement of any governmental, judicial or other
public body or authority which is now, or which at any time
during the Facility Period becomes, necessary to enable any
of the Security Parties to comply with any of their
obligations in or pursuant to any of the Security Documents
is not obtained or is revoked, suspended, withdrawn or
withheld, or is modified in a manner which the Agent
considers is, or may be, prejudicial to its interests, or
ceases to remain in full force and effect; or
13.2.12 Master Agreement termination if a notice is sent by the
Agent under section 6(a) of the Master Agreement, or by any
person under section 6(b)(iv) of the Master Agreement, in
either case designating an Early Termination Date for the
purpose of the Master Agreement, or if the Master Agreement
is for any other reason terminated, cancelled, suspended,
rescinded, revoked or otherwise ceases to remain in full
force and effect; or
13.2.13 curtailment of business if the business of any of the
Security Parties is wholly or partially curtailed or
suspended by any intervention by or under authority of any
government, or if all or a substantial part of the
undertaking, property or assets of any of the Security
Parties is seized, nationalised, expropriated or
compulsorily acquired by or under authority of any
government; or
13.2.14 acceleration of other indebtedness if any other indebtedness
or obligation for borrowed money of any of the Security
Parties becomes due or capable of being declared due prior
to its stated maturity by reason of default on the part of
that Security Party, or is not repaid or satisfied at
maturity; or
13.2.15 reduction of capital if any of the Security Parties reduces
its authorised or issued or subscribed capital; or
13.2.16 challenge to registration if the registration of the Vessel
or the Mortgage is contested or becomes void or voidable or
liable to cancellation or termination, or if the validity or
priority of the Mortgage is contested; or
13.2.17 war if the country of registration of the Vessel becomes
involved in war (whether or not declared) or civil war or is
occupied by any other power and the Agent in its discretion
considers that, as a result, the security conferred by the
Security Documents is materially prejudiced; or
13.2.18 notice of termination if the Corporate Guarantor gives
notice to the Agent to determine its obligations under the
Corporate Guarantee; or
13.2.19 material adverse change etc. if anything is done or
permitted or omitted to be done by any of the Security
Parties which in the reasonable opinion of the Agent
jeopardises or imperils (or may jeopardise or imperil) the
rights conferred on the Agent by the Security Documents, or
if there occurs (in the opinion of the Agent) any material
adverse change in the business, affairs or financial
condition of any of the Security Parties from that
pertaining at the date of this Agreement; or
13.2.20 environment if the Borrower fails to observe or perform any
of the covenants, conditions, undertakings, agreements or
obligations contained in Clause 11.2.12 or shall in any
other way be in breach of or do or cause to be done any act
repudiating or evidencing an intention to repudiate any of
the covenants, conditions, undertakings, agreements or
obligations contained in Clause 11.2.12; or
13.2.21 cross-default an event of default (howsoever defined) occurs
in relation to any other loan agreement facility entered
into by the Borrower and/or the Corporate Guarantor or any
subsidiary of the Corporate Guarantor; or
13.2.22 Charter the Charter is terminated, cancelled or repudiated
or is not in force at any time during the Facility Period,
unless it has expired by effluxion of time, or the Borrower
or the Charterer defaults in the performance of any of their
respective material obligations under or pursuant to the
Charter and unless the Charter is replaced within a period
of one month with another charter or contract of employment
satisfactory to the Agent in all respects in its absolute
discretion; or
13.2.23 analogous events if any event which (in the opinion of the
Agent or ) is analogous to any of the events set out above
shall occur.
14 Set-Off and Lien
14.1 Set-off The Borrower irrevocably authorises the Agent and the
Banks at any time after all or any part of the Indebtedness shall
have become due and payable to set off without notice any
liability of the Borrower to any of the Banks or the Agent
(whether present or future, actual or contingent, and irrespective
of the branch or office, currency or place of payment) against any
credit balance from time to time standing on any account of the
Borrower (whether current or otherwise and whether or not subject
to notice) with any branch of the Agent or of any Bank in or
towards satisfaction of the Indebtedness and, in the name of the
Agent or that Bank or the Borrower, to do all acts (including,
without limitation, converting or exchanging any currency) and
execute all documents which may be required to effect such
application.
14.2 Lien The Agent and each Bank shall have a lien on and be entitled
to retain and realise as additional security for the repayment of
the Indebtedness any cheques, drafts, bills, notes or negotiable
or non-negotiable instruments and any stocks, shares or marketable
or other securities and property of any kind of the Borrower (or
of the Agent or that Bank as agent or nominee of the Borrower)
from time to time held by the Agent, whether for safe custody or
otherwise.
14.3 Restrictions on withdrawal Despite any term to the contrary in
relation to any deposit or credit balance at any time on any
account of the Borrower with any of Banks or with the Agent, no
such deposit or balance shall be repayable or capable of being
assigned, mortgaged, charged or otherwise disposed of or dealt
with by the Borrower during the Facility Period except in
accordance with the Security Documents, but the Agent may from
time to time permit the withdrawal of all or any part of any such
deposit or balance without affecting the continued application of
this Clause.
14.4 Application The Borrower irrevocably authorises the Agent to apply
all sums which the Agent may receive:-
14.4.1 pursuant to a sale or other disposition of the Vessel or any
right, title or interest in the Vessel; or
14.4.2 by way of payment to the Agent of any sum in respect of the
Insurances, Earnings, Charter Rights or Requisition
Compensation; or
14.4.3 otherwise arising under or in connection with any of the
Security Documents
in or towards satisfaction, or by way of retention on account, of the
Indebtedness, in such manner as the Agent may in its discretion
determine.
14.5 Master Agreement rights The rights conferred on the Agent by this
Clause shall be in addition to, and without prejudice to or
limitation of, the rights of netting and set off conferred on the
Agent by the Master Agreement. The Borrower acknowledges that the
Agent shall be under no obligation to make any payment to the
Borrower under or pursuant to the Master Agreement if, at the time
that payment becomes due, there shall have occurred an Event of
Default or Potential Event of Default, or an Event of Default or
Termination Event (as those terms are respectively defined in the
Master Agreement).
15 Assignment and Sub-Participation
15.1 Right to assign The Original Bank may grant sub-participations in
all or any part of the Loan and may assign or transfer all or any
of its rights under or pursuant to the Security Documents to any
other branch of that Bank or (in consultation with the Borrower)
to one or more other banks or financial institutions.
15.2 Borrower's co-operation The Borrower will co-operate fully with
the Banks in connection with any assignment, transfer or
sub-participation; will execute and procure the execution of such
documents as the Banks may require in connection therewith; and
irrevocably authorises the Agent to sign any Transfer Certificate
on its behalf, and irrevocably authorises the Agent and the Banks
disclose to any proposed assignee, transferee or sub-participant
(whether before or after any assignment, transfer or
sub-participation and whether or not any assignment, transfer or
sub-participation shall take place) all information relating to
the Security Parties, the Loan or the Security Documents which the
Agent or the Banks may in their discretion consider necessary or
desirable.
15.3 Rights of assignee Any assignee, transferee or sub-participant of
a Bank shall (unless limited by the express terms of the
assignment, transfer or sub-participation) take the full benefit
of every provision of the Security Documents benefitting that
Bank.
15.4 Transfer Certificates If any Bank wishes to transfer any of its
rights and/or obligations under or pursuant to this Agreement, it
may do so by delivering to the Agent a duly completed Transfer
Certificate, in which event on the Transfer Date:-
15.4.1 to the extent that that Bank seeks to transfer its rights
and/or obligations, the Borrower (on the one hand) and the
Bank in question (on the other) shall be released from all
further obligations towards the other(s);
15.4.2 the Borrower (on the one hand) and the Transferee (on the
other) shall assume obligations towards the other(s)
identical to those released pursuant to Clause 15.4.1;
15.4.3 the Agent, each of the Banks and the Transferee shall have
the same rights and obligations between themselves as they
would have had if the Transferee had been an original party
to this Agreement as a Bank; and
15.4.4 the Transferee shall pay to the Agent for its own account a
transfer fee of five thousand Dollars.
Each Bank irrevocably authorises the Agent to sign on its behalf any
Transfer Certificate relating to the transfer of any of the rights
and/or obligations of any other Bank.
15.5 Security Documents Unless otherwise expressly provided in any
Security Document or otherwise expressly agreed between a Bank and
any proposed Transferee and notified by that Bank to the Agent on
or before the relevant Transfer Date, there shall automatically be
assigned to the Transferee with any transfer of a Bank's rights
and/or obligations under or pursuant to this Agreement the rights
of that Bank under or pursuant to the Security Documents (other
than this Agreement) which relate to the portion of the Bank's
rights and/or obligations transferred by the relevant Transfer
Certificate.
16 Payments, Mandatory Prepayment, Reserve Requirements and Illegality
16.1 Payments All amounts payable by the Borrower under or pursuant to
any of the Security Documents shall be paid to such accounts at
such banks as the Agent may from time to time direct to the
Borrower, and (unless payable in any other Currency of Account)
shall be paid in Dollars in same day funds (or such funds as are
required by the authorities in the United States of America for
settlement of international payments for immediate value).
Payments shall be deemed to have been received by the Agent on the
date on which the Agent receives authenticated advice of receipt,
unless that advice is received by the Agent on a day other than a
Business Day or at a time of day (whether on a Business Day or
not) when the Agent in its discretion considers that it is
impossible or impracticable for the Agent to utilise the amount
received for value that same day, in which event the payment in
question shall be deemed to have been received by the Agent on the
Business Day next following the date of receipt of advice by the
Agent.
16.2 No deductions or withholdings All payments (whether of principal
or interest or otherwise) to be made by the Borrower pursuant to
the Security Documents shall, subject only to Clause 16.3, be made
free and clear of and without deduction for or on account of any
Taxes or other deductions, withholdings, restrictions, conditions
or counterclaims of any nature.
16.3 Grossing-up If at any time any law requires (or is interpreted to
require) the Borrower to make any deduction or withholding from
any payment, or to change the rate or manner in which any required
deduction or withholding is made, the Borrower will promptly
notify the Agent and, simultaneously with making that payment,
will pay to the Agent whatever additional amount (after taking
into account any additional Taxes on, or deductions or
withholdings from, or restrictions or conditions on, that
additional amount) is necessary to ensure that, after making the
deduction or withholding, the Agent and the Banks receive a net
sum equal to the sum which it would have received had no deduction
or withholding been made.
16.4 Evidence of deductions If at any time the Borrower is required by
law to make any deduction or withholding from any payment to be
made by it pursuant to any of the Security Documents, the Borrower
will pay the amount required to be deducted or withheld to the
relevant authority within the time allowed under the applicable
law and will, no later than thirty days after making that payment,
deliver to the Agent an original receipt issued by the relevant
authority, or other evidence acceptable to the Agent, evidencing
the payment to that authority of all amounts required to be
deducted or withheld.
16.5 Adjustment of due dates If any payment or transfer of funds to be
made under any of the Security Documents, other than a payment of
interest on the Loan or a payment pursuant to the Master
Agreement, shall be due on a day which is not a Business Day, that
payment shall be made on the next succeeding Business Day (unless
the next succeeding Business Day falls in the next calendar month
in which event the payment shall be made on the next preceding
Business Day). Any such variation of time shall be taken into
account in computing any interest in respect of that payment.
16.6 Change in law If, by reason of the introduction of any law, or any
change in any law, or the interpretation or administration of any
law, or in compliance with any request or requirement from any
central bank or any fiscal, monetary or other authority:-
16.6.1 any Bank or the Agent (or the holding company of the Bank or
the Agent) shall be subject to any Tax with respect to
payments of all or any part of the Indebtedness; or
16.6.2 the basis of Taxation of payments to any Bank or the Agent
in respect of all or any part of the Indebtedness shall be
changed; or
16.6.3 any reserve requirements shall be imposed, modified or
deemed applicable against assets held by or deposits in or
for the account of or loans by any branch of any Bank or the
Agent; or
16.6.4 the manner in which any Bank or the Agent allocates capital
resources to its obligations under this Agreement and/or the
Master Agreement or any ratio (whether cash, capital
adequacy, liquidity or otherwise) which any Bank or the
Agent is required or requested to maintain shall be
affected; or
16.6.5 there is imposed on any Bank or the Agent (or on the holding
company of any Bank or the Agent) any other condition in
relation to the Indebtedness or the Security Documents;
and the result of any of the above shall be to increase the cost to
any Bank (or to the holding company of any Bank) of that Bank making
or maintaining the Loan or of maintaining its obligations under the
Master Agreement, or to cause the any Bank or the Agent to suffer (in
its opinion) a material reduction in the rate of return on its overall
capital below the level which it reasonably anticipated at the date of
this Agreement and which it would have been able to achieve but for
its entering into this Agreement or the Master Agreement and/or
performing its obligations under this Agreement or the Master
Agreement, the Bank affected shall notify the Agent and the Borrower
shall from time to time pay to the Agent on demand for the account of
the Bank affected (or, in retention to the Master Agreement, for the
Agent's own account) the amount which shall compensate that Bank (or
the holding company of the Bank) for such additional cost or reduced
return. A certificate signed by an authorised signatory of the Bank
affected setting out the amount of that payment and the basis of its
calculation shall be submitted to the Borrower and shall be conclusive
evidence of such amount save for manifest error or on any question of
law. The Borrower shall have the right to prepay the Loan in full,
subject to Clauses 5.4, 5.5 and 5.6.
16.7 Illegality and impracticality Notwithstanding anything contained
in the Security Documents, the obligation of the Banks to advance
or maintain the Loan shall terminate in the event that a change in
any law or in the interpretation of any law by any authority
charged with its administration shall make it unlawful or, in the
opinion of any Bank, impracticable for that Bank to advance or
maintain the Loan. In that event the Bank affected shall, by
written notice to the Borrower, declare its obligations to be
immediately terminated. If all or any part of the Loan shall have
been advanced by the Banks to the Borrower, the Indebtedness
(including all accrued interest) shall be prepaid within thirty
days from the date of such notice. Clause 5.4 shall apply to that
prepayment if it is made on a day other than the last day of an
Interest Period.
16.8 Changes in market circumstances If at any time a Bank determines
(which determination shall be final and conclusive and binding on
the Borrower) that, by reason of changes affecting the London
Interbank market, adequate and fair means do not exist for
ascertaining the rate of interest on the Loan pursuant to this
Agreement:-
16.8.1 that Bank shall give notice to the Borrower of the
occurrence of such event; and
16.8.2 the Agent shall as soon as reasonably practicable certify to
the Borrower in writing the effective cost to the Banks of
maintaining the Loan for such further period as shall be
selected by the Banks and the rate of interest payable by
the Borrower for that period; or, if that is not acceptable
to the Borrower,
16.8.3 the Agent will negotiate with the Borrower in good faith
with a view to modifying this Agreement to provide a
substitute basis for the Loan which is financially a
substantial equivalent to the basis provided for in this
Agreement.
If, within thirty days of the giving of the notice referred to in
Clause 16.8.1, the Borrower and the Agent fail to agree in writing on
a substitute basis for the Loan, the Borrower will immediately prepay
the Indebtedness. Clause 5.4 shall apply to that prepayment if it is
made on a day other than the last day of an Interest Period.
16.9 Non-availability of currency If a Bank is for any reason unable to
obtain Dollars in the London Interbank market and is, as a result,
or as a result of any other contingency affecting the London
Interbank market, unable to advance or maintain the Loan in
Dollars, that Bank shall give notice to the Agent and the Agent
shall give notice to the Borrowers and the Banks' obligations to
make the Loan available shall immediately cease. In that event, if
all or any part of the Loan shall have been advanced by the Banks
to the Borrower, the Agent on behalf of the Banks will negotiate
with the Borrower in good faith with a view to establishing a
mutually acceptable basis for funding the Loan from an alternative
source. If the Agent and the Borrower have failed to agree in
writing on a basis for funding the Loan from an alternative source
by 11.00 a.m. on the second Business Day prior to the end of the
then current Interest Period, the Borrower will (without prejudice
to its other obligations under or pursuant to this Agreement,
including, without limitation, its obligation to pay interest on
the Loan, arising on the expiry of the then current Interest
Period) prepay the Indebtedness to the Agent on behalf of the
Banks on the expiry of the then current Interest Period.
17 Communications
17.1 Method Any Communication may be given, delivered, made or served
(as the case may be) under or in relation to this Agreement by
letter or fax and shall be in the English language and sent
addressed:-
17.1.1 in the case of the Banks or the Agent to the Agent at its
address at the head of this Agreement (fax no: x00 000 000
4368) marked for the attention of: Global Shipping Group;
and
17.1.2 in the case of the Borrower to the Communications Address;
or to such other address or fax number as the Banks, the Agent or the
Borrower may designate for itself by written notice to the other.
17.2 Timing A Communication shall be deemed to have been duly given,
delivered, made or served to or on, and received by, the
Borrower:-
17.2.1 in the case of a fax when the sender receives one or more
transmission reports showing the whole of the Communication
to have been transmitted to the correct fax number;
17.2.2 if delivered to an officer of the Borrower or left at the
Communications Address at the time of delivery or leaving;
or
17.2.3 if posted, at 9.00 a.m. on the Business Day after posting by
prepaid first class post.
A Communication shall only be deemed to have been duly given,
delivered, made or served to or on, and received by, the Banks or the
Agent on actual receipt of the whole of that Communication by the
Agent.
17.3 Indemnity The Borrower shall indemnify the Agent against any cost,
claim, liability, loss or expense (including legal fees and any
Value Added Tax or any similar or replacement tax (if applicable))
which the Agent or any of the Banks may sustain or incur as a
consequence of any Communication sent by or on behalf of the
Borrower by fax not being received by its intended recipient, or
being received incomplete, or by reason of any Communication
purportedly having been sent by or on behalf of the Borrower
having been sent fraudulently.
18 General Indemnities
18.1 Currency In the event of the Agent or a Bank receiving or
recovering any amount payable under any of the Security Documents
in a currency other than the Currency of Account, and if the
amount received or recovered is insufficient when converted into
the Currency of Account at the date of receipt to satisfy in full
the amount due, the Borrower shall, on the Agent's written demand,
pay to the Bank such further amount in the Currency of Account as
is sufficient to satisfy in full the amount due and that further
amount shall be due to the Agent as a separate debt under this
Agreement.
18.2 Costs and expenses The Borrower will, within fourteen days of the
Agent's written demand, reimburse the Agent for all costs and
expenses (including Value Added Tax or any similar or replacement
tax if applicable) of and incidental to:-
18.2.1 the negotiation, preparation, execution and registration of
the Security Documents (whether or not any of the Security
Documents are actually executed or registered and whether or
not all or any part of the Loan is advanced);
18.2.2 any amendments, addenda or supplements to any of the
Security Documents (whether or not completed);
18.2.3 any other documents which may at any time be required by the
Bank or the Agent to give effect to any of the Security
Documents or which any Bank or the Agent is entitled to call
for or obtain pursuant to any of the Security Documents
(including, without limitation, all premiums and other sums
from time to time payable by the Agent in relation to the
Mortgagees' Insurances); and
18.2.4 the exercise of the rights, powers, discretions and remedies
of the Banks and/or the Agent under or pursuant to the
Security Documents.
18.3 Events of Default The Borrower shall indemnify the Banks and the
Agent from time to time on demand against all losses and costs
incurred or sustained by any Bank and/or the Agent as a
consequence of any Event of Default, including (without
limitation) any Break Costs.
18.4 Funding costs The Borrower shall indemnify the Banks and the Agent
from time to time on demand against all losses and costs incurred
or sustained by any Bank or by the Agent if, for any reason, the
Loan is not advanced to the Borrower after the Drawdown Notice has
been given to the Agent, or is advanced on a date other than that
requested in the Drawdown Notice (unless, in either case, as a
result of any default by the Agent or any of the Banks), including
(without limitation) any Break Costs.
18.5 Protection and enforcement The Borrower shall indemnify the Banks
and the Agent from time to time on demand against all losses,
costs and liabilities which any Bank or the Agent may from time to
time sustain, incur or become liable for in or about the
protection, maintenance or enforcement of the rights conferred on
the Banks and/or the Agent by the Security Documents or in or
about the exercise or purported exercise by the Banks and/or the
Agent of any of the rights, powers, discretions or remedies vested
in them under or arising out of the Security Documents, including
(without limitation) any losses, costs and liabilities which any
Bank or the Agent may from time to time sustain, incur or become
liable for by reason of the Banks or the Agent being mortgagees of
the Vessel and/or a lender to the Borrower, or by reason of any
Bank or the Agent being deemed by any court or authority to be an
operator or controller, or in any way concerned in the operation
or control, of the Vessel.
18.6 Liabilities of Banks and Agent The Borrower will from time to time
reimburse the Banks and the Agent on demand for all sums which any
Bank or the Agent may pay or become actually or contingently
liable for on account of the Borrower or in connection with the
Vessel (whether alone or jointly or jointly and severally with any
other person) including (without limitation) all sums which any
Bank or the Agent may pay or guarantees which any Bank or the
Agent may give in respect of the Insurances, any expenses incurred
by any Bank or the Agent in connection with the maintenance or
repair of the Vessel or in discharging any lien, bond or other
claim relating in any way to the Vessel, and any sums which any
Bank or the Agent may pay or guarantees which it may give to
procure the release of the Vessel from arrest or detention.
18.7 Taxes The Borrower shall pay all Taxes to which all or any part of
the Indebtedness or any of the Security Documents may be at any
time subject and shall indemnify the Agent and the Banks on demand
against all liabilities, costs, claims and expenses resulting from
any omission to pay or delay in paying any such Taxes.
19 Miscellaneous
19.1 Waivers No failure or delay on the part of the Agent or of a Bank
in exercising any right, power, discretion or remedy under or
pursuant to any of the Security Documents, nor any actual or
alleged course of dealing between the Agent and any Bank and the
Borrower, shall operate as a waiver of, or acquiescence in, any
default on the part of any Security Party, unless expressly agreed
to do so in writing by the Agent, nor shall any single or partial
exercise by the Agent or a Bank of any right, power, discretion or
remedy preclude any other or further exercise of that right,
power, discretion or remedy, or the exercise by the Agent or a
Bank of any other right, power, discretion or remedy.
19.2 No oral variations No variation or amendment of any of the
Security Documents shall be valid unless in writing and signed on
behalf of the Banks and the Agent.
19.3 Severability If at any time any provision of any of the Security
Documents is invalid, illegal or unenforceable in any respect that
provision shall be severed from the remainder and the validity,
legality and enforceability of the remaining provisions shall not
be affected or impaired in any way.
19.4 Successors etc. The Security Documents shall be binding on the
Security Parties and on their successors and permitted transferees
and assignees, and shall inure to the benefit of the Banks and the
Agent and its successors, transferees and assignees. The Borrower
may not assign nor transfer any of its rights under or pursuant to
any of the Security Documents without the prior written consent of
the Agent.
19.5 Further assurance If any provision of the Security Documents shall
be invalid or unenforceable in whole or in part by reason of any
present or future law or any decision of any court, or if the
documents at any time held by the Banks or by the Agent on their
behalf are considered by the Banks for any reason insufficient to
carry out the terms of this Agreement, then from time to time the
Borrower will promptly, on demand by the Agent, execute or procure
the execution of such further documents as in the opinion of the
Banks are necessary to provide adequate security for the repayment
of the Indebtedness.
19.6 Other arrangements The Banks and the Agent may, without prejudice
to its rights under or pursuant to the Security Documents, at any
time and from time to time, on such terms and conditions as it may
in its discretion determine, and without notice to the Borrower,
grant time or other indulgence to, or compound with, any other
person liable (actually or contingently) to the Banks and/or the
Agent in respect of all or any part of the Indebtedness, and may
release or renew negotiable instruments and take and release
securities and hold funds on realisation or suspense account
without affecting the liabilities of the Borrower or the rights of
the Banks and the Agent under or pursuant to the Security
Documents.
19.7 Advisers The Borrower irrevocably authorise the Agent, at any time
and from time to time during the Facility Period, to consult
insurance advisers on any matters relating to the Insurances,
including, without limitation, the collection of insurance claims,
and from time to time to consult or retain advisers or consultants
to monitor or advise on any other claims relating to the Vessel.
The Borrower will provide such advisers and consultants with all
information and documents which it may from time to time require
and will reimburse the Agent on demand for all costs and expenses
incurred by the Agent in connection with the consultation or
retention of such advisers or consultants.
19.8 Delegation The Banks and the Agent may at any time and from time
to time delegate to any person any of its rights, powers,
discretions and remedies pursuant to the Security Documents on
such terms as it may consider appropriate (including the power to
sub-delegate).
19.9 Rights etc. cumulative Every right, power, discretion and remedy
conferred on the Banks and/or the Agent under or pursuant to the
Security Documents shall be cumulative and in addition to every
other right, power, discretion or remedy to which it may at any
time be entitled by law or in equity. The Banks and the Agent may
exercise each of their rights, powers, discretions and remedies as
often and in such order as they deem appropriate. The exercise or
the beginning of the exercise of any right, power, discretion or
remedy shall not be interpreted as a waiver of the right to
exercise that or any other right, power, discretion or remedy
either simultaneously or subsequently.
19.10 No enquiry The Banks and the Agent shall not be concerned to
enquire into the powers of the Security Parties or of any person
purporting to act on behalf of any of the Security Parties, even
if any of the Security Parties or any such person shall have acted
in excess of their powers or if their actions shall have been
irregular, defective or informal, whether or not any Bank or the
Agent had notice thereof.
19.11 Continuing security The security constituted by the Security
Documents shall be continuing and shall not be satisfied by any
intermediate payment or satisfaction until the Indebtedness shall
have been repaid in full and neither the Banks nor the Agent shall
be under no further actual or contingent liability to any third
party in relation to the Vessel, the Insurances, Earnings or
Requisition Compensation or any other matter referred to in the
Security Documents.
19.12 Security cumulative The security constituted by the Security
Documents shall be in addition to any other security now or in the
future held by the Banks or by the Agent for or in respect of all
or any part of the Indebtedness, and shall not merge with or
prejudice or be prejudiced by any such security or any other
contractual or legal rights of the Banks or the Agent, nor
affected by any irregularity, defect or informality, or by any
release, exchange or variation of any such security. Section 93 of
the Law of Property Xxx 0000 and all provisions which the Agent
considers analogous thereto under the law of any other relevant
jurisdiction shall not apply to the security constituted by the
Security Documents. 19.13 Re-instatement If the Banks or the Agent
takes any steps to exercise any of its rights, powers, remedies or
discretions pursuant to the Security Documents and the result
shall be adverse to the Banks and/or the Agent, the Borrower and
the Banks and the Agent shall be restored to their former
positions as if no such steps had been taken.
19.14 No liability Neither the Banks nor the Agent, nor any agent or
employee of any Bank or of the Agent, nor any receiver and/or
manager appointed by the Agent, shall be liable for any losses
which may be incurred in or about the exercise of any of the
rights, powers, discretions or remedies of the Banks and/or the
Agent under or pursuant to the Security Documents nor liable as
mortgagee in possession for any loss on realisation or for any
neglect or default of any nature for which a mortgagee in
possession might otherwise be liable.
19.15 Rescission of payments etc. Any discharge, release or reassignment
by the Banks and/or the Agent of any of the security constituted
by, or any of the obligations of any Security Party contained in,
any of the Security Documents shall be (and be deemed always to
have been) void if any act (including, without limitation, any
payment) as a result of which such discharge, release or
reassignment was given or made is subsequently wholly or partially
rescinded or avoided by operation of any law.
19.16 Subsequent Encumbrances If the Agent receives notice of any
subsequent Encumbrance affecting the Vessel or all or any part of
the Insurances, Earnings, Charter Rights or Requisition
Compensation or the Accounts, the Agent may open a new account in
its books for the Borrower. If the Agent does not open a new
account, then (unless the Agent gives written notice to the
contrary to the Borrower) as from the time of receipt by the Agent
of notice of such subsequent Encumbrance, all payments made to the
Agent shall be treated as having been credited to a new account of
the Borrower and not as having been applied in reduction of the
Indebtedness.
19.17 Releases If any Bank or the Agent shall at any time in its
discretion release any party from all or any part of any of the
Security Documents, the liability of any other party to the
Security Documents shall not be varied or diminished.
19.18 Discretions Unless otherwise expressly indicated, where any Bank
or the Agent is stated in the Security Documents to have a
discretion and/or where the opinion of any Bank or the Agent is
referred to and/or where the consent, agreement or approval of any
Bank or the Agent is required for any course of action, or where
anything is required to be acceptable to any Bank or the Agent,
the Banks and the Agent shall have a sole, absolute and unfettered
discretion and/or may give or withhold their consent, agreement or
approval at its sole, absolute and unfettered discretion.
19.19 Certificates Any certificate or statement signed by an authorised
signatory of the Agent purporting to show the amount of the
Indebtedness (or any part of the Indebtedness) or any other amount
referred to in any of the Security Documents shall, save for
manifest error or on any question of law, be conclusive evidence
as against the Borrower of that amount.
19.20 Survival of representations and warranties The representations and
warranties on the part of the Borrower contained in this Agreement
shall survive the execution of this Agreement and the advance of
the Loan.
19.21 Counterparts This Agreement may be executed in any number of
counterparts each of which shall be original but which shall
together constitute the same instrument.
19.22 Contracts (Rights of Third Parties) Xxx 0000 No term of the
Agreement is enforceable by a person who is not a party to it.
20 Law and Jurisdiction
20.1 Governing law This Agreement shall in all respects be governed by
and interpreted in accordance with English law.
20.2 Jurisdiction For the exclusive benefit of the Banks and the Agent,
the parties to this Agreement irrevocably agree that the courts of
England are to have jurisdiction to settle any disputes which may
arise out of or in connection with this Agreement and that any
Proceedings may be brought in those courts.
20.3 Alternative jurisdictions Nothing contained in this Clause shall
limit the right of the Banks or the Agent to commence any
Proceedings against the Borrower in any other court of competent
jurisdiction nor shall the commencement of any Proceedings against
the Borrower in one or more jurisdictions preclude the
commencement of any Proceedings in any other jurisdiction, whether
concurrently or not.
20.4 Waiver of objections The Borrower irrevocably waives any objection
which it may now or in the future have to the laying of the venue
of any Proceedings in any court referred to in this Clause, and
any claim that those Proceedings have been brought in an
inconvenient or inappropriate forum, and irrevocably agrees that a
judgment in any Proceedings commenced in any such court shall be
conclusive and binding on it and may be enforced in the courts of
any other jurisdiction.
20.5 Service of process Without prejudice to the right of the Agent and
the Banks to use any other method of service permitted by law, the
Borrower irrevocably agrees that any writ, notice, judgment or
other legal process shall be sufficiently served on it if
addressed to it and left at or sent by post to the Address for
Service, and in that event shall be conclusively deemed to have
been served at the time of leaving or, if posted, at 9.00 a.m. on
the Business Day after posting by prepaid first class post.
SCHEDULE 1
The Banks and the Commitments
The Banks The Commitments
FORTIS BANK N.V./S.A., ATHENS BRANCH 100%
000, Xxxxxxx Xxx.
000 00, Xxxxxx
Xxxxxx
IN WITNESS of which the parties to this Agreement have executed this Agreement
the day and year first before written.
SIGNED by )
duly authorised for and on behalf )
of XENIA INTERNATIONAL CORP. )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of FORTIS BANK N.V./S.A., )
ATHENS BRANCH (as lender) )
in the presence of:- )
SIGNED by )
duly authorised for and on behalf )
of FORTIS BANK N.V./S.A., )
ATHENS BRANCH (as agent) )
in the presence of:- )
APPENDIX A
To: FORTIS BANK N.V./S.A., ATHENS BRANCH
From: XENIA INTERNATIONAL CORP.
2006
Dear Sirs,
Drawdown Notice
We refer to the Loan Agreement dated 2006 made between ourselves and
yourselves ("the Agreement").
Words and phrases defined in the Agreement have the same meaning when used
in this Drawdown Notice.
Pursuant to Clause 2.2 of the Agreement, we irrevocably request that you
advance the sum of [ ] to us on 2006, which is a Business Day, by paying the
amount of the Loan to [ ].
We warrant that the representations and warranties contained in Clause 4 of
the Agreement are true and correct at the date of this Drawdown Notice and will
be true and correct on 2006; that no Event of Default nor Potential Event of
Default has occurred and is continuing, and that no Event of Default or
Potential Event of Default will result from the advance of the Loan requested in
this Drawdown Notice.
We select the period of [ ] months as the first Interest Period.
Yours faithfully
.......................
For and on behalf of
XENIA INTERNATIONAL CORP.
APPENDIX B
Form of Transfer Certificate
To: FORTIS BANK N.V./S.A., ATHENS BRANCH
TRANSFER CERTIFICATE
This transfer certificate relates to a secured loan facility agreement (as from
time to time amended, varied, supplemented or novated "the Loan Agreement")
dated 2006, on the terms and subject to the conditions of which a secured loan
facility of up to $8,250,000 was made available to Xenia International Corp. by
a syndicate of banks on whose behalf you act as agent and security trustee.
1 Terms defined in the Loan Agreement shall, unless otherwise expressly
indicated, have the same meaning when used in this certificate. The terms
"Transferor" and "Transferee" are defined in the schedule to this
certificate.
2 The Transferor:-
2.1 confirms that the details in the Schedule under the heading
"Transferor's Commitment" accurately summarise its Commitment; and
2.2 requests the Transferee to accept by way of novation the transfer to
the Transferee of the amount of the Transferor's Commitment specified
in the Schedule by counter-signing and delivering this certificate to
the Agent at its address for Communications specified in the Loan
Agreement.
3 The Transferee requests the Agent to accept this certificate as being
delivered to the Agent pursuant to and for the purposes of clause 15.4 of
the Loan Agreement so as to take effect in accordance with the terms of
that clause on the Transfer Date specified in the Schedule.
4 The Agent (on its own behalf and on behalf of the Borrower and each of the
Banks other than the Transferor) confirms its acceptance of this
certificate for the purposes of clause 15.4 of the Loan Agreement.
5 The Transferee confirms that:-
5.1 it has received a copy of the Loan Agreement together with all other
information which it has required in connection with this transaction;
5.2 it has not relied and will not in the future rely on the Transferor or
any other party to the Loan Agreement to check or enquire on its
behalf into the legality, validity, effectiveness, adequacy, accuracy
or completeness of any such information; and
5.3 it has not relied and will not in the future rely on the Transferor or
any other party to the Loan Agreement to keep under review on its
behalf the financial condition, creditworthiness, condition, affairs,
status or nature of any of the Security Parties.
6 Execution of this certificate by the Transferee constitutes its
representation to the Transferor and to all other parties to the Loan
Agreement that it has the power to become a party to the Loan Agreement as
a Bank on the terms of the Loan Agreement and has taken all steps to
authorise execution and delivery of this certificate.
7 The Transferee undertakes with the Transferor and each of the other parties
to the Loan Agreement that it will perform in accordance with their terms
all those obligations which by the terms of the Loan Agreement will be
assumed by it after delivery of this certificate to the Agent and the
satisfaction of any conditions subject to which this certificate is
expressed to take effect.
8 The Transferor makes no representation or warranty and assumes no
responsibility with respect to the legality, validity, effectiveness,
adequacy or enforceability of any of the Security Documents or any document
relating to any of the Security Documents, and assumes no responsibility
for the financial condition of any of the Security Parties or for the
performance and observance by the Security Parties of any of their
obligations under any of the Security Documents or any document relating to
any of the Security Documents and any conditions and warranties implied by
law are expressly excluded.
9 The Transferee acknowledges that nothing in this certificate or in the Loan
Agreement shall oblige the Transferor to:-
9.1 accept a re-transfer from the Transferee of the whole or any part of
the rights, benefits and/or obligations transferred pursuant to this
certificate; or
9.2 support any losses directly or indirectly sustained or incurred by the
Transferee for any reason including, without limitation, the
non-performance by any party to any of the Security Documents of any
obligations under any of the Security Documents.
10 The address and fax number of the Transferee for the purposes of clause
10.20 of the Loan Agreement are set out in the Schedule.
11 This certificate may be executed in any number of counterparts each of
which shall be original but which shall together constitute the same
instrument.
12 This certificate shall be governed by and interpreted in accordance with
English law.
THE SCHEDULE
1 Transferor:
2 Transferee:
3 Transfer Date (not earlier that the fifth Business Day after the date of
delivery of the Transfer Certificate to the Agent):
4 Transferor's Commitment:
5 Amount transferred:
6 Transferee's address and fax number for the purposes of clause 10.20 of the
Loan Agreement:
[name of Transferor] [name of Transferee]
By: By:
Date: Date:
FORTIS BANK N.V./S.A., ATHENS BRANCH as Agent
for and on behalf of itself, the Borrower and each of the Banks (other than the
Transferor)
By:
Date:
SK 02558 0002 700697
