Dated 20 November 2007 SUNRAY NAVIGATION INC. - and -
EXHIBIT
4.13
Dated
20 November 2007
SUNRAY
NAVIGATION INC.
-
and -
NATIONAL
BANK OF GREECE S.A.
as
Lender
__________________________
__________________________
relating
to a term loan facility of up to $33,176,250
to
part-finance the construction and acquisition cost
of
one 37,000 metric tons deadweight
Handymax
product chemical tanker having
Hull
No. 2191 currently under construction
at
Hyundai Mipo Dockyard, Ulsan, Korea
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Clause
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Page
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1
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INTERPRETATION
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1
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2
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FACILITY
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12
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3
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DRAWDOWN
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12
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4
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INTEREST
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13
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5
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INTEREST
PERIODS
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14
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6
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DEFAULT
INTEREST
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15
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7
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REPAYMENT
AND PREPAYMENT
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15
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8
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CONDITIONS
PRECEDENT
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17
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9
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REPRESENTATIONS
AND WARRANTIES
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18
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10
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GENERAL
UNDERTAKINGS
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20
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11
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CORPORATE
UNDERTAKINGS
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22
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12
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INSURANCE
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23
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13
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SHIP
COVENANTS
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28
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14
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SECURITY
COVER
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31
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15
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PAYMENTS
AND CALCULATIONS
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33
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16
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APPLICATION
OF RECEIPTS
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33
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17
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APPLICATION
OF EARNINGS
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34
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18
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EVENTS
OF DEFAULT
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35
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19
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FEES
AND EXPENSES
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38
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20
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INDEMNITIES
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39
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21
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NO
SET-OFF OR TAX DEDUCTION
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41
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22
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ILLEGALITY,
ETC
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41
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23
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INCREASED
COSTS
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42
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24
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SET
OFF
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43
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25
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TRANSFERS
AND CHANGES IN LENDING OFFICES
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43
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26
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VARIATIONS
AND WAIVERS
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44
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27
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NOTICES
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44
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28
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SUPPLEMENTAL
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46
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29
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LAW
AND JURISDICTION
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46
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EXECUTION
PAGE
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48
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SCHEDULE
1 DRAWDOWN NOTICE
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49
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SCHEDULE
2
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50
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CONDITION
PRECEDENT DOCUMENTS
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50
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THIS AGREEMENT is made on 20
November 2007
BETWEEN:
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(1)
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SUNRAY NAVIGATION INC.,
a corporation incorporated in the Republic of the Xxxxxxxx Islands whose
registered office is at Trust Company Complex, Ajeltake Road, Xxxxxxxx
Xxxxxx, Xxxxxx, XX 00000 , Xxxxxxxx of the Xxxxxxxx Islands (the “Borrower”);
and
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(2)
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NATIONAL BANK OF GREECE S.A.
acting through its branch at 0 Xxxxxxxxxxx Xxxxxx & Xxxx
Xxxxxxx, 000 00 Xxxxxxx, Xxxxxx (the “Lender”)
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BACKGROUND
The
Lender has agreed to make available to the Borrower a term loan facility of up
to the lesser of (a) $33,176,250, (b) 75 per cent. of the Contract Price of the
Ship and (c) 75 per cent. of the Market Value of the Ship (as determined by the
valuations referred to at paragraph 6 of Schedule 2, Part C), for the purpose of
part-financing the construction and acquisition cost of the ship, known as Hull
No. 2191 which is to be constructed by the Builder and purchased by the
Borrower.
IT IS AGREED as
follows:
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1
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INTERPRETATION
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1.1
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Definitions. Subject
to Clause 1.5 in this Agreement:
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| “Advance” means the principal amount of each borrowing by the Borrower under this Agreement being: |
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(a)
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an
amount of up to $3,981,150 to be made available to the Borrower for the
purpose of refinancing part of the first instalment paid pursuant to the
Shipbuilding Contract (the “First
Advance”);
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(b)
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an
amount of up to $3,981,150 to be made available to the Borrower for the
purpose of part-financing the second instalment payable pursuant to the
Shipbuilding Contract (the “Second
Advance”);
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(c)
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an
amount of up to $7,077,600 to be made available to the Borrower for the
purpose of part-financing the third instalment payable pursuant to the
Shipbuilding Contract upon steel-cutting of the Ship (the “Third
Advance”);
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(d)
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an
amount of up to $7,077,600 to be made available to the Borrower for the
purpose of part-financing the fourth instalment payable pursuant to the
Shipbuilding Contract upon keel-laying of the Ship (the “Fourth
Advance”);
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(e)
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an
amount of up to $5,529,375 to be made available to the Borrower for the
purpose of part-financing the fifth instalment payable pursuant to the
Shipbuilding Contract upon launching of the Ship (the “Fifth Advance”);
and
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(f)
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an
amount of up to $5,529,375 to be made available to the Borrower for the
purpose of part-financing the sixth instalment payable pursuant to the
Shipbuilding Contract upon delivery of the Ship (the “Sixth
Advance”),
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and
in the plural means all of them;
“Approved
Flag” means such flag as the Lender may in its sole and
absolute discretion, approve as the flag on which the Ship shall be
registered;
“Approved Flag
State” means any country in which the Lender may in its sole
and absolute discretion, approve that such Ship be registered;
“Approved Manager” means any
company which the Lender may approve from time to time to be the manager of the
Ship;
“Approved Manager’s
Undertaking” means a letter of undertaking executed by the
Approved Manager in favour of the Lender in the terms required by the Lender
agreeing certain matters in relation to the Approved Manager serving as the
manager of the Ship and subordinating the rights of the Approved Manager against
the Ship and the Borrower to the rights of the Lender under the Finance
Documents in such form as the Lender may approve or require;
“Availability Period” means the
period commencing on the date of this Agreement and ending on:
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(a)
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the
earlier of (A) 29 April 2011 and (B) the Delivery Date in respect of the
Ship;
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(or, such later date as the Lender may agree with the Borrower); or
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(b)
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if
earlier, the date on which the Lender’s obligation to make the Loan is
cancelled or terminated;
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“Balloon Instalment” has the
meaning given in Clause 7.1(b);
“Builder” means
Hyundai Mipo Dockyard Co., Ltd., a company incorporated in the Republic of Korea
with its principal office at 0000, Xxxxxx-Xxxx, Xxxx-Xx, Xxxxx,
Xxxxx;
“Business Day” means
a day on which banks are open in London, Athens, Piraeus and
the Republic of Korea and, in respect of a day on which a payment is
required to be made under a Finance Document, also in Brussels and New York
City;
“Charterparty
Assignment” means, in relation to the Ship, an assignment of
the rights of the Borrower under any time charterparty which is of or exceeds or
is capable of exceeding 12 months in duration executed or to be executed by the
Borrower in such form as the Lender may approve or require;
“Contract
Price” means, the aggregate amount payable by the Borrower to
the Builder pursuant to the Shipbuilding Contract;
“Contractual Currency” has the
meaning given in Clause 20.4;
“Corporate
Guarantee” means the guarantee of the obligations of the
Borrower under this Agreement and the Finance Documents to which they are a
party, executed or (as the context may require) to be executed by the Corporate
Guarantor in favour of the Lender in such form as the Lender may approve or
require;
“Corporate Guarantor” means
Omega Navigation Enterprises Inc., a corporation incorporated in the Republic of
the Xxxxxxxx Islands whose registered office is at Trust Company Complex,
Ajeltake Road, Ajeltake Island, Xxxxxx XX 00000 Xxxxxxxx Xxxxxxx;
“Delivery
Date” means the date on which title to and possession of the
Ship is transferred from the Builder to the Borrower pursuant to the
Shipbuilding Contract;
“Dollars” and “$” means the lawful
currency for the time being of the United States of America;
“Drawdown
Date” means, in relation to each Advance, the date requested
by the Borrower for that Advance to be made, or (as the context requires) the
date on which that Advance is actually made;
“Drawdown
Notice” means a notice in the form set out in Schedule 1 (or
in any other form which the Lender approves or reasonably
requires);
“Earnings” mean all
moneys whatsoever which are now, or later become, payable (actually or
contingently) to the Borrower and which arise out of the use or operation of the
Ship, including (but not limited to):
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(a)
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all
freight, hire and passage moneys, compensation payable to the Borrower in
the event of requisition of the Ship for hire, remuneration for salvage
and towage services, demurrage and detention moneys and damages for breach
(or payments for variation or termination) of any charterparty or other
contract for the employment of the
Ship;
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(b)
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all
moneys which are at any time payable under Insurances in respect of loss
of earnings; and
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(c)
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if
and whenever the Ship is employed on terms whereby any moneys falling
within paragraphs (a) or (b) are pooled or shared with any other person
(which may only be effected with the prior consent of the Lender in
accordance with Clause 13.15), that proportion of the net receipts of the
relevant pooling or sharing arrangement which is attributable to the
Ship;
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“Earnings Account” means an
account in the name of the Borrower with the Lender in Piraeus designated
“Sunray Navigation Inc. - Earnings Account”, or any other account (with that or
another office of the Lender) which is designated by the Lender as the Earnings
Account for the purposes of this Agreement;
“Environmental
Claim” means:
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(a)
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any
claim by any governmental, judicial or regulatory authority which arises
out of an Environmental Incident or an alleged Environmental Incident or
which relates to any Environmental Law;
or
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(b)
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any
claim by any other person which relates to an Environmental Incident or to
an alleged Environmental Incident,
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and
“claim” means a claim
for damages, compensation, fines, penalties or any other payment of any kind,
whether or not similar to the foregoing; an order or direction to take, or not
to take, certain action or to desist from or suspend certain action; and any
form of enforcement or regulatory action, including the arrest or attachment of
any asset;
“Environmental
Incident” means:
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(a)
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any
release of Environmentally Sensitive Material from the Ship;
or
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(b)
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any
incident in which Environmentally Sensitive Material is released from a
vessel other than the Ship and which involves a collision between the Ship
and such other vessel or some other incident of navigation or operation,
in either case, in connection with which the Ship is actually or
potentially liable to be arrested, attached, detained or injuncted and/or
the Ship and/or the Borrower who owns the Ship and/or any operator or
manager of the Ship is at fault or allegedly at fault or otherwise liable
to any legal or administrative action;
or
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(c)
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any
other incident in which Environmentally Sensitive Material is released
otherwise than from the Ship and in connection with which the Ship is
actually or potentially liable to be arrested and/or where the Borrower
who owns the Ship and/or any operator or manager of the Ship is at fault
or allegedly at fault or otherwise liable to any legal or administrative
action;
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“Environmental
Law” means any law relating to pollution or protection
of the environment, to the carriage of Environmentally Sensitive Material
or to actual or threatened releases of Environmentally Sensitive
Material;
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“Environmentally Sensitive
Material” means oil, oil products and any other
substance (including any chemical, gas or other hazardous or noxious
substance) which is (or is capable of being or becoming) polluting, toxic
or hazardous;
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“Event of
Default” means any of the events or circumstances
described in Clause 18.1;
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“Final Maturity Date” means the
earlier of (i) the date falling 120 months after the Delivery Date and (ii) 29
April 2021;
“Finance
Documents” means:
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(a)
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this
Agreement;
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(b)
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the
Retention Account Pledge;
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(c)
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the
Corporate Guarantee;
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(d)
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the
Predelivery Security Assignment;
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(e)
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the
Mortgage;
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(f)
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the
General Assignment;
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(g)
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any
Charterparty Assignments; and
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(h)
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any
other document (whether creating a Security Interest or not) which is
executed at any time by the Borrower, the Corporate Guarantor or any other
person as security for, or to establish any form of subordination or
priorities arrangement in relation to, any amount payable to the Lender
under this Agreement or any of the other documents referred to in this
definition;
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“Financial
Indebtedness” means, in relation to a person (the “debtor”), a
liability of the debtor:
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(a)
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for
principal, interest or any other sum payable in respect of any moneys
borrowed or raised by the debtor;
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(b)
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under
any loan stock, bond, note or other security issued by the
debtor;
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(c)
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under
any acceptance credit, guarantee or letter of credit facility made
available to the debtor;
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(d)
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under
a financial lease, a deferred purchase consideration arrangement or any
other agreement having the commercial effect of a borrowing or raising of
money by the debtor;
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(e)
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under
any foreign exchange transaction, any interest or currency swap or
any other kind of derivative transaction entered into by the debtor or, if
the agreement under
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which
any such transaction is entered into requires netting of mutual
liabilities, the liability of the debtor for the net amount;
or
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(f)
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under
a guarantee, indemnity or similar obligation entered into by the debtor in
respect of a liability of another person which would fall within (a) to
(e) if the references to the debtor referred to the other
person;
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“GAAP” means
generally accepted accounting principles as from time to time in effect in the
United States of America;
“General
Assignment” means, a general assignment of the Earnings, the
Insurances and any Requisition Compensation in such form as the Lender may
approve or require;
“Group” means the Borrower, the
Corporate Guarantor, the Approved Manager (provided that the Approved Manager is
a member of the Group) and all other companies with the same beneficial
ownership as the Borrower and/or belonging to the same holding company structure
(as the case may be) and their subsidiaries and “member of the Group” shall be
construed accordingly;
“Insurances” means:
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(a)
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all
policies and contracts of insurance, including entries of the Ship in any
protection and indemnity or war risks association, which are effected in
respect of the Ship, her Earnings or otherwise in relation to her;
and
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(b)
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all
rights and other assets relating to, or derived from, any of the
foregoing, including any rights to a return of a
premium;
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“Interest
Period” means a period determined in accordance with
Clause 5;
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“ISM Code”
means:
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(a)
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‘The
International Management Code for the Safe Operation of Ship and for
Pollution Prevention’, currently known or referred to as the ‘ISM Code’,
adopted by the Assembly of the International Maritime Organisation by
Resolution A.741(18) on 4 November 1993 and incorporated on 19 May 1994
into chapter IX of the International Convention for the Safety of Life at
Sea 1974 (SOLAS 1974); and
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(b)
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all
further resolutions, circulars, codes, guidelines, regulations and
recommendations which are now or in the future issued by or on behalf of
the International Maritime Organisation or any other entity with
responsibility for implementing the ISM Code, including without
limitation, the ‘Guidelines on implementation or administering of the
International Safety Management (ISM) Code by Administrations’ produced by
the International Maritime Organisations pursuant to Resolution A.788(19)
adopted on 25 November 1995,
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as
the same may be amended, supplemented or replaced from time to
time;
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“ISM Code Documentation”
includes, in relation to the Ship:
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(a)
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the
document of compliance (DOC) and safety management certificate (SMC)
issued pursuant to the ISM Code in relation to the Ship within the periods
specified by the ISM Code; and
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(b)
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all
other documents and data which are relevant to the ISM SMS and its
implementation and verification which the Lender may require;
and
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(c)
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any
other documents which are prepared or which are otherwise relevant to
establish and maintain the Ship’s compliance or the compliance of the
Borrower, with the ISM Code which the Lender may
require;
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“ISM SMS” means the
safety management system for the Ship which is required to be developed,
implemented and maintained under the ISM
Code;
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“ISPS
Code” means the “International Code for the Security of
Ships and of Port Facilities” as adopted on 12 December 2002 by resolution
2 of the Conference of Contracting Governments to the International
Convention for the Safety of Life at Sea,
1974;
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“Lender” means
the National Bank Of Greece S.A. acting through its branch at 0
Xxxxxxxxxxx Xxxxxx & Xxxx Xxxxxxx, 000 00 Xxxxxxx,
Xxxxxx;
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“LIBOR” means, for
an Interest Period:
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(a)
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the
rate per annum equal to the offered quotation for deposits in Dollars for
a period equal to, or as near as possible equal to, the relevant Interest
Period which appears on Reuters BBA Page LIBOR 01 at or about 11.00 a.m.
(London time) on the second Business Day prior to the commencement of that
Interest Period (and, for the purposes of this Agreement, “Reuters BBA
Page LIBOR 01” means the display designated as “Reuters BBA Page LIBOR 01”
on the Reuters Money News Service or such other page as may replace BBA
Page LIBOR 01 on that service for the purpose of displaying rates
comparable to that rate or on such other service as may be nominated by
the British Bankers’ Association as the information vendor for the purpose
of displaying British Bankers’ Association Interest Settlement Rates for
Dollars); or
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(b)
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if
no rate is quoted on Reuters BBA Page LIBOR 01, the rate per annum
(rounded upwards, if necessary, to the nearest one-sixteenth of one per
cent.) at which deposits in Dollars are offered to the Reference Bank by
leading banks in the London Interbank Market at the request of the
Reference Bank at or about 11.00 a.m. (London time) on the Quotation Date
for that Interest Period for a period equal to that Interest Period and
for delivery on the first Business Day of
it;
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“Loan” means the
principal amount for the time being outstanding under this
Agreement;
“Major
Casualty” means, any casualty to the Ship in respect of which
the claim or the aggregate of the claims against all insurers, before adjustment
for any relevant franchise or deductible, exceeds $250,000 or the equivalent in
any other currency;
“Margin” means:
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(a)
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in
relation to all Advances during the period commencing on the Drawdown Date
of the First Advance and ending on the Drawdown Date of the
Sixth Advance, 0.90 per cent. per
annum; and
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(b)
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at
all times after the Drawdown Date of the Sixth Advance, in respect of that
part of the Loan which is constituted by (i) the repayment instalments
referred to in clause 7.1(a), 0.90 per cent. per annum and (ii) the
Balloon Instalment, 1 per cent. per
annum;
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“Market Value” means the market
value of the Ship determined in accordance with Clause 14.4;
“Material Adverse Change Warranty
Letter” means a letter to be issued by the Borrower and the Corporate
Guarantor on each Drawdown Date in which they confirm that, as at that Drawdown
Date, here has been no material adverse change in the financial position, state
of
affairs
or prospects of the Borrower, the Corporate Guarantor and the Group since the
date of acceptance by the Borrower of the Lender’s commitment letter (being 28
September 2007);
“Mortgage” means the
first preferred or priority ship mortgage on the Ship and, if required pursuant
to the laws of the applicable Approved Flag State, a deed of covenant collateral
thereto in such form as the Lender may approve or require;
“Negotiation
Period” has the meaning given in Clause 4.6;
“Payment
Currency” has the meaning given in
Clause 20.4;
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“Pertinent
Document” means:
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(a)
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any
Finance Document;
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(b)
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any
policy or contract of insurance contemplated by or referred to in Clause
12 or any other provision of this Agreement or another Finance
Document;
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(c)
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any
other document contemplated by or referred to in any Finance Document;
and
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(d)
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any
document which has been or is at any time sent by or to the Lender in
contemplation of or in connection with any Finance Document or any policy,
contract or document falling within paragraphs (b) or
(c);
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“Pertinent
Jurisdiction”, in relation to a company, means:
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(a)
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England
and Wales;
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(b)
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the
country under the laws of which the company is incorporated or
formed;
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(c)
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a
country in which the company’s central management and control is or has
recently been exercised;
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(d)
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a
country in which the overall net income of the company is subject to
corporation tax, income tax or any similar
tax;
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(e)
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a
country in which assets of the company (other than securities issued by,
or loans to, related companies) having a substantial value are situated,
in which the company maintains a permanent place of business, or in which
a Security Interest created by the company must or should be registered in
order to ensure its validity or priority;
and
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(f)
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a
country the courts of which have jurisdiction to make a winding up,
administration or similar order in relation to the company or which would
have such jurisdiction if their assistance were requested by the courts of
a country referred to in paragraphs (b) or (c)
above;
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“Pertinent
Matter” means:
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(a)
|
any
transaction or matter contemplated by, arising out of, or connection with
a Pertinent Document; or
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(b)
|
any
statement relating to a Pertinent Document or to a transaction or matter
falling within paragraph (a);
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and covers any such transaction,
matter or statement, whether entered into, arising or made at
any time before the signing of this Agreement or on or at any time after that
signing;
“Predelivery Security
Assignment” means an assignment of the Shipbuilding Contract
and of the Refund Guarantee executed or to be executed by the Borrower in such
form as the Lender may approve or require;
“Quotation
Date” means, in relation to any Interest Period (or any other
period for which an interest rate is to be determined under any provision of a
Finance Document), the day on which quotations would ordinarily be given by
leading banks in the London Interbank Market for deposits in the currency in
relation to which such rate is to be determined for delivery on the first day of
that Interest Period or other period;
“Reference
Bank” means National Bank of Greece S.A. acting through its
branch at 00 Xxxx Xxxxxxx Xxxxxx, Xxxxxx XX0X 0XX, Xxxxxxx;
“Refund
Guarantee” means, in relation to the Ship, the irrevocable and
unconditional letter of guarantee dated 21 June 2007 issued by the Refund
Guarantor in favour of the Borrower in respect of the instalments payable under
the Shipbuilding Contract in such form as the Lender may approve or
require;
“Refund Guarantor” means The
Export-Import Bank of Korea, a company incorporated in the Republic of Korea or
such other bank or financial institution as the Lender may consent to be the
issuer of a Refund Guarantee;
“Related Company” of a person
means any subsidiary of such person, any company or other entity of which such
person is a subsidiary and any subsidiary of any such company or
entity;
“Relevant
Person” means the Borrower, any member of the Group, the
Borrower’s Related Companies, any other Security Party and any other Security
Party’s Related Company;
“Repayment
Date” means a date on which a repayment is required to be made
under Clause 7;
“Requisition
Compensation” includes all compensation or other moneys
payable by reason of any act or event such as is referred to in paragraph (b) of
the definition of “Total Loss”;
“Retention Account” means an
account in the name of the Borrower with the Lender in Piraeus designated
“Sunray Navigation Inc. - Retention Account”, or any other account (with that or
another office of the Lender) which is designated by the Lender as the Retention
Account for the purposes of this Agreement;
“Retention Account Pledge”
means a pledge agreement creating security of the Retention Account to be
executed by the Borrower in favour of the Lender in such form and terms as the
Lender may approve or require in its sole discretion;
“Secured
Liabilities” means all liabilities which the Borrower, the
Security Parties or any of them have, at the date of this Agreement or at any
later time or times, under or in connection with any Finance Document or any
judgment relating to any Finance Document; and for this purpose, there shall be
disregarded any total or partial discharge of these liabilities, or variation of
their terms, which is effected by, or in connection with, any bankruptcy,
liquidation, arrangement or other procedure under the insolvency laws of any
country;
“Security
Interest” means:
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|
(a)
|
a
mortgage, charge (whether fixed or floating) or pledge, any maritime or
other lien or any other security interest of any
kind;
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|
|
(b)
|
the
security rights of a plaintiff under an action in rem;
and
|
|
|
(c)
|
any
arrangement entered into by a person (A) the effect of which is to place
another person (B) in a position which is similar, in economic terms, to
the position in which B would have been had he held a security interest
over an asset of A; but this paragraph (c) does not apply to a right of
set off or combination of accounts conferred by the standard terms of
business of a bank or financial
institution;
|
“Security
Party” means the Borrower, the Corporate Guarantor, the
Approved Manager and any other person who, as a surety or mortgagor, as a party
to any subordination or priorities arrangement, or in any similar capacity,
executes a document falling within the last paragraph of the definition of
“Finance Documents”;
“Security
Period” means the period commencing on the date of this
Agreement and ending on the date on which the Lender notifies the Borrower and
the Security Parties that:
|
|
(a)
|
all
amounts which have become due for payment by the Borrower or any other
Security Party under the Finance Documents have been
paid;
|
|
|
(b)
|
no
amount is owing or has accrued (without yet having become due for payment)
under any Finance Document;
|
|
|
(c)
|
neither
the Borrower nor any other Security Party has any future or contingent
liability under Clause 19, 20 or 21 or any other provision of this
Agreement or another Finance Document;
and
|
|
|
(d)
|
the
Lender does not consider that there is a significant risk that any payment
or transaction under a Finance Document would be set aside, or would have
to be reversed or adjusted, in any present or possible future bankruptcy
of the Borrower or a Security Party or in any present or possible future
proceeding relating to a Finance Document or any asset covered (or
previously covered) by a Security Interest created by a Finance
Document;
|
“Ship” means the
Handymax product chemical tanker of approximately 37,000 metric tons deadweight
which is to be constructed by the Builder for the Borrower pursuant to the
Shipbuilding Contract currently having Hull No. 2191 and which is to be
purchased by the Borrower and registered, on the Delivery Date in its name under
an Approved Flag in accordance with the laws of the applicable Approved Flag
State;
“Shipbuilding
Contract” means, the Shipbuilding Contract dated 15
June 2007 made between the Builder and the Borrower for the construction by the
Builder of the Ship for the Borrower and its purchase by the Borrower (as the
same may be supplemented and amended from time to time;
“Total
Loss” means:
|
|
(a)
|
actual,
constructive, compromised, agreed or arranged total loss of the
Ship;
|
|
|
(b)
|
any
expropriation, confiscation, requisition or acquisition of the Ship,
whether for full consideration, a consideration less than its proper
value, a nominal consideration or without any consideration, which is
effected by any government or official authority or by any person or
persons claiming to be or to represent a government or official authority
(excluding a requisition for hire for a fixed period not exceeding 1 year
without any right to an extension) unless it is within 1 month redelivered
to the Borrower’s full control;
|
|
|
(c)
|
any
arrest, capture, seizure or detention of the Ship (including any hijacking
or theft) unless it is within 1 month redelivered to the Borrower’s full
control;
|
“Total Loss
Date” means:
|
|
(a)
|
in
the case of an actual loss of the Ship, the date on which it occurred or,
if that is unknown, the date when the Ship was last heard
of;
|
|
|
(b)
|
in
the case of a constructive, compromised, agreed or arranged total loss of
the Ship, the earliest of:
|
|
|
(i)
|
the
date on which a notice of abandonment is given to the insurers;
and
|
|
|
(ii)
|
the
date of any compromise, arrangement or agreement made by or on behalf of
the Borrower with the Ship’s insurers in which the insurers agree to treat
the Ship as a total loss; and
|
|
|
(c)
|
in
the case of any other type of total loss, on the date (or the most likely
date) on which it appears to the Lender that the event constituting the
total loss occurred.
|
|
1.2
|
Construction of certain
terms. In this
Agreement:
|
“approved” means,
for the purposes of Clause 12, approved in writing by the
Lender;
“asset” includes
every kind of property, asset, interest or right, including any present, future
or contingent right to any revenues or other payment;
“company” includes
any partnership, joint venture and unincorporated association;
“consent” includes an
authorisation, consent, approval, resolution, licence, exemption, filing,
registration, notarisation and legalisation;
“contingent
liability” means a liability which is not certain to arise
and/or the amount of which remains unascertained;
“document” includes
a deed; also a letter, fax or telex;
“excess risks” means
the proportion of claims for general average, salvage and salvage charges not
recoverable under the hull and machinery policies in respect of the Ship in
consequence of its insured value being less than the value at which the Ship is
assessed for the purpose of such claims;
“expense” means any
kind of cost, charge or expense (including all legal costs, charges and
expenses) and any applicable value added or other tax;
“law” includes any
order or decree, any form of delegated legislation, any treaty or international
convention and any regulation or resolution of the Council of the European
Union, the European Commission, the United Nations or its security
council;
“legal or administrative
action” means any legal proceeding or arbitration and any
administrative or regulatory action or investigation;
“liability” includes
every kind of debt or liability (present or future, certain or contingent),
whether incurred as principal or surety or otherwise;
“months” shall be
construed in accordance with Clause 1.3;
“obligatory
insurances” means all insurances effected, or which the
Borrower is obliged to effect, under Clause 12 or any other provision of
this Agreement or another Finance Document;
“person” includes
any company; any state, political sub-division of a state and local or municipal
authority; and any international organisation;
“policy”, in relation to any
insurance, includes a slip, cover note, certificate of entry or other document
evidencing the contract of insurance or its terms;
“protection and indemnity
risks” means the usual risks covered by a protection and
indemnity association managed in London, including pollution risks and the
proportion (if any) of any sums payable to any other person or persons in case
of collision which are not recoverable under the hull and machinery policies by
reason of the incorporation in them of clause 1 of the Institute Time Clauses
(Hulls)(1/10/83) or (with respect to Insurances commencing on or after
1/11/1995) clause 8 of the Institute Time Clauses (Hulls) (1/11/1995) or the
Institute Amended Running Down Clause (1/10/71) or any equivalent
provision;
“regulation” includes
any regulation, rule, official directive, request or guideline whether or not
having the force of law of any governmental, intergovernmental or supranational
body, agency, department or regulatory, self-regulatory or other authority or
organisation;
“subsidiary” has the
meaning given in Clause 1.4;
“successor” includes
any person who is entitled (by assignment, novation, merger or otherwise) to any
other person’s rights under this Agreement or any other Finance Document (or any
interest in those rights) or who, as administrator, liquidator or otherwise, in
entitled to exercise those rights; and in particular references to a successor
include a person to whom those rights (or any interest in those rights) are
transferred or pass as a result of a merger, division, reconstruction or other
reorganisation of it or any other person;
“tax” includes any
present or future tax, duty, impost, levy or charge of any kind which is imposed
by any state, any political sub-division of a state or any local or municipal
authority (including any such imposed in connection with exchange controls), and
any connected penalty, interest or fine; and
“war risks” includes
the risk of mines and all risks excluded by clause 23 of the Institute Time
Clauses (Hulls)(1/10/83) or (with respect to Insurances commencing on or after
1/11/1995) clause 24 of the Institute Time Clauses (Hulls)
(1/11/1995).
|
1.3
|
Meaning of
“month”. A period of one or more “months” ends on the day
in the relevant calendar month numerically corresponding to the day of the
calendar month on which the period started (“the numerically corresponding
day”), but:
|
|
(a)
|
on
the Business Day following the numerically corresponding day if the
numerically corresponding day is not a Business Day or, if there is no
later Business Day in the same calendar month, on the Business Day
preceding the numerically corresponding day;
or
|
|
(b)
|
on
the last Business Day in the relevant calendar month, if the period
started on the last Business Day in a calendar month or if the last
calendar month of the period has no numerically corresponding
day;
|
and “month” and “monthly” shall be construed
accordingly.
|
1.4
|
Meaning of
“subsidiary”. A company (S) is a subsidiary of another
company (P) if:
|
|
(a)
|
a
majority of the issued shares in S (or a majority of the issued shares in
S which carry unlimited rights to capital and income distributions) are
directly owned by P or are indirectly attributable to P;
or
|
|
(b)
|
P
has direct or indirect control over a majority of the voting rights
attaching to the issued shares of S;
or
|
|
(c)
|
P
has the direct or indirect power to appoint or remove a majority of the
directors of S; or
|
|
(d)
|
P
otherwise has the direct or indirect power to ensure that the affairs of S
are conducted in accordance with the wishes of
P;
|
and any company of which S
is a subsidiary is a parent company of S.
|
1.5
|
General
Interpretation. In this
Agreement:
|
|
(a)
|
references
in Clause 1.1 to a Finance Document or any other document being in the
form of a particular appendix include references to that form with any
modifications to that form which the Lender approves or reasonably
requires;
|
|
(b)
|
references
to, or to a provision of, a Finance Document or any other document are
references to it as amended or supplemented, whether before the date of
this Agreement or otherwise;
|
|
(c)
|
references
to, or to a provision of, any law include any amendment, extension,
re-enactment or replacement, whether made before the date of this
Agreement or otherwise;
|
|
(d)
|
words
denoting the singular number shall include the plural and vice versa;
and
|
|
(e)
|
Clauses
1.1 to 1.5 apply unless the contrary intention
appears.
|
|
1.6
|
Headings. In
interpreting a Finance Document or any provision of a Finance Document,
all clause, sub-clause and other headings in that and any other Finance
Document shall be entirely
disregarded.
|
|
2
|
FACILITY
|
|
2.1
|
Amount of
facility. Subject to the other provisions of this
Agreement the Lender shall make available to the Borrower a loan facility
of up to $33,176,250 divided into six
Advances.
|
|
2.2
|
Purpose of
Loan. The Borrower undertakes with the Lender to use
each Advance only for the purpose stated in the preamble to this
Agreement.
|
|
3
|
DRAWDOWN
|
|
3.1
|
Request for
Advance. Subject to the following conditions, the
Borrower may request an Advance to be made by ensuring that the Lender
receives a completed Drawdown Notice not later than 11.00 a.m. (Athens
time) 3 Business Days prior to the intended Drawdown
Date.
|
|
3.2
|
Availability. The
conditions referred to in Clause 3.1 are
that:
|
|
(a)
|
a
Drawdown Date has to be a Business Day during the Availability
Period;
|
|
(b)
|
the
amount of each Advance shall not
exceed:
|
|
|
(i)
|
in
the case of the First Advance, an amount up to $3,981,150 to be made
available to the Borrower for the purpose of refinancing part
of the first instalment paid pursuant to the Shipbuilding
Contract;
|
|
|
(ii)
|
in
the case of the Second Advance, an amount up to $3,981,150 to be made
available to the Borrower for the purpose of part-financing the second
instalment payable on the date falling 180 days after the date of the
Shipbuilding Contract pursuant to the Shipbuilding
Contract;
|
|
|
(iii)
|
in
the case of the Third Advance, an amount up to $7,077,600 to be made
available to the Borrower for the purpose of part-financing the third
instalment payable pursuant to the Shipbuilding Contract upon
steel-cutting of the Ship;
|
|
|
(iv)
|
in
the case of the Fourth Advance, an amount up to $7,077,600 to be made
available to the Borrower for the purpose of part-financing the fourth
instalment payable pursuant to the Shipbuilding upon the laying of the
first keel block of the Ship;
|
|
|
(v)
|
in
the case of the Fifth Advance, an amount up to $5,529,375 to be made
available to the Borrower for the purpose of part-financing the fifth
instalment payable pursuant to the Shipbuilding Contract upon launching of
the Ship; and
|
|
|
(vi)
|
in
the case of the Sixth Advance, an amount up to $5,529,375 to be made
available to the Borrower for the purpose, of part-financing the sixth
instalment payable pursuant to the Shipbuilding Contract upon delivery of
the Ship,
|
Provided always that the total
amount of the Loan shall not exceed the lower of (i) $33,176,250, (ii) 75 per
cent. of the Contract Price of the Ship or (iii) 75 per cent. of the Market
Value of the Ship.
|
3.3
|
Drawdown Notice
irrevocable. A Drawdown Notice must be signed by a an
authorised person of the Borrower; and once served, a Drawdown Notice
cannot be revoked without the prior consent of the
Lender.
|
|
3.4
|
Disbursement of
Advance. Subject to the terms of this Agreement, the
Lender shall on each Drawdown Date make available the relevant Advance to
the Borrower by paying the proceeds thereof to the Builder which the
Borrower specifies in the Drawdown Notice (save for the First Advance
which shall be made available to the Borrower in accordance with Clause
3.2(b)(i)), and the Borrower hereby unconditionally and irrevocably
authorises the Lender to make such payment on its
behalf.
|
|
3.5
|
Disbursement of Advance to
third party. The payment by the Lender under
Clause 3.4 to the Builder shall constitute the making of an Advance
and the Borrower shall at that time become indebted, as principal and
direct obligor, to the Lender in an amount equal to that
Advance.
|
|
4
|
INTEREST
|
|
4.1
|
Payment of normal
interest. Subject to the provisions of this Agreement,
interest on the Loan, in respect of each Interest Period shall be paid by
the Borrower on the last day of that Interest
Period.
|
|
4.2
|
Normal rate of
interest. Subject to the provisions of this Agreement,
the rate of interest on the Loan in respect of an Interest Period shall be
the aggregate of (a) the applicable Margin and (b) LIBOR for that Interest
Period.
|
|
4.3
|
Payment of accrued
interest. In the case of an Interest Period longer than
3 months, accrued interest shall be paid every 3 months during that
Interest Period and on the last day of that Interest
Period.
|
|
4.4
|
Notification of market
disruption. The Lender shall promptly notify the
Borrower if no rate is quoted on Reuters BBA page LIBOR01 or if for any
reason both the Lender and the Reference Bank is unable to obtain Dollars
in the London Interbank Market in order to fund the Loan (or any part of
it) or an Advance during any Interest Period, stating the circumstances
which have caused such notice to be
given.
|
|
4.5
|
Suspension of
drawdown. If the Lender's notice under Clause 4.4
is served before an Advance is made, the Lender's obligation to make that
Advance shall be suspended while the circumstances referred to in the
Lender's notice continue.
|
|
4.6
|
Negotiation of alternative rate
of interest. If the Lender’s notice under
Clause 4.4 is served after an Advance is made, the Borrower and the
Lender shall use reasonable endeavours
to
|
agree,
within the 30 days after the date on which the Lender serves its notice under
Clause 4.4 (the “Negotiation Period”), an
alternative interest rate or (as the case may be) an alternative basis for the
Lender to fund or continue to fund the Loan during the Interest Period
concerned.
|
4.7
|
Application of agreed
alternative rate of interest. Any alternative interest
rate or an alternative basis which is agreed during the Negotiation Period
shall take effect in accordance with the terms
agreed.
|
|
4.8
|
Alternative rate of interest in
absence of agreement. If an alternative interest rate or
alternative basis is not agreed within the Negotiation Period, and the
relevant circumstances are continuing at the end of the Negotiation
Period, then the Lender shall set an interest period and interest rate
representing the cost of funding of the Lender in Dollars or in any
available currency of the Loan plus the applicable Margin; and the
procedure provided for by this Clause 4.8 shall be repeated if the
relevant circumstances are continuing at the end of the interest period so
set by the Lender.
|
|
4.9
|
Notice of
prepayment. If the Borrower does not agree with an
interest rate set by the Lender under Clause 4.8, the Borrower may
give the Lender not less than 15 Business Days' notice of its intention to
prepay at the end of the interest period set by the
Lender.
|
|
4.10
|
Prepayment. A
notice under Clause 4.9 shall be irrevocable; and on the last
Business Day of the interest period set by the Lender, the Borrower shall
prepay (without premium or penalty) the Loan, together with accrued
interest thereon at the applicable rate plus the applicable
Margin.
|
|
4.11
|
Application of
prepayment. The provisions of Clause 7 shall apply
in relation to the prepayment.
|
|
5
|
INTEREST
PERIODS
|
|
5.1
|
Commencement of Interest
Periods. The first Interest Period applicable to each
Advance shall commence on the Drawdown Date relative to that Advance and
each subsequent Interest Period shall commence on the expiry of the
preceding Interest Period.
|
|
5.2
|
Duration of normal Interest
Periods. Subject to Clauses 5.3 and 5.4, each
Interest Period shall be:
|
|
(a)
|
1,
3, 6, 9 or 12 months as notified by the Borrower to the Lender not later
than 11.00 a.m. (Athens time) 3 Business Days before the commencement of
the Interest Period; or
|
|
(b)
|
in
the case of the first Interest Period applicable to the second and each
subsequent Advance, a period ending on the last day of the then current
Interest Period for that Advance, whereupon all of the Advances shall be
consolidated and treated as a single
Advance;
|
|
(c)
|
3
months, if the Borrower fails to notify the Lender by the time specified
in paragraph (a); or
|
|
(d)
|
such
other period as the Lender may agree with the
Borrower.
|
|
5.3
|
Duration of Interest Periods
for repayment instalments. In respect of an amount due
to be repaid under Clause 7 on a particular Repayment Date, an
Interest Period shall end on that Repayment
Date.
|
|
5.4
|
Non-availability of matching
deposits for Interest Period selected. If, after the
Borrower has selected and the Lender has agreed an Interest Period longer
than 3 months, the Lender notifies the Borrower by 11.00 a.m. (Athens
time) on the third Business Day before the commencement of the Interest
Period that it is not satisfied that deposits in Dollars for
a
|
|
|
period
equal to the Interest Period will be available to it in the London
Interbank Market when the Interest Period commences, the Interest Period
shall be of 3 months duration.
|
|
6
|
DEFAULT
INTEREST
|
|
6.1
|
Payment of default interest on
overdue amounts. If the Borrower fails to pay any sum
(including, without limitation, any sum payable pursuant to this Clause
6.1) on its due date for payment under any of the Finance Documents, the
Borrower shall pay interest on such sum on demand from the due date up to
the date of actual payment (as well after as before judgment) at a rate
determined by the Lender, on the due date for payment and thereafter on 30
June and 31 December in each calendar year. Each of such
periods for the calculation of interest (other than the first, which shall
commence on the due date for payment) shall commence on the last day of
the preceding period. The rate of interest applicable to each
such period shall be the aggregate (as determined by the Lender) of (a)
three per cent. (3%) per annum and (b) LIBOR for such period.
Such interest shall be due and payable on 30 June and 31 December in each
calendar year and each such day shall, for the purposes of this Agreement,
be treated as the final day of an Interest Period in respect of that
amount. The Borrower hereby specifically acknowledges and agrees that the
rate of default interest payable pursuant to this Clause 6.1 on any amount
which is not paid on its due date shall be the aggregate (as determined by
the Lender ) of (a) three per cent. (3%) per annum and (b) LIBOR for the
relevant period and that such interest shall also be determined and
payable on 30 June and 31 December in each calendar year. If,
for the reasons specified in Clause 4.4, the Lender is unable to determine
a rate in accordance with the foregoing provisions of this Clause 6.1,
interest on any sum not paid on its due date for payment shall be
calculated at a rate determined by the Lender to be three per cent. (3%)
per annum above the cost of funds to the
Lender.
|
|
7
|
REPAYMENT
AND PREPAYMENT
|
|
7.1
|
Amount of repayment
instalments. The Borrower shall repay the Loan
by:
|
|
(a)
|
40
equal consecutive three-monthly instalments of $497,650, each;
and
|
|
(b)
|
a
balloon instalment of $13,270,250 (the “Balloon
Instalment”),
|
Provided that if the principal
amount of the Loan drawn down by the Borrower is less than $33,176,250 each
repayment instalment and the Balloon Instalment shall be reduced pro rata by an
amount in aggregate equal to such undrawn amount.
|
7.2
|
Repayment
Dates. The first repayment instalment of in respect of
the Loan shall be repaid the earlier of (i) on the date falling 3 months
after the Drawdown Date of the Sixth Advance and (ii) 29 July 2011 and
each subsequent repayment instalment shall be repaid at 3-monthly
intervals thereafter and the last repayment instalment, together with the
Balloon Instalment, shall be repaid on the date falling on the earlier of
(a) the tenth anniversary of the Drawdown Date of the Sixth Advance and
(b) the Final Maturity Date.
|
|
7.3
|
Final Repayment
Date. On the final Repayment Date, the Borrower shall
additionally pay to the Lender for the account of the Lender all other
sums then accrued or owing under any Finance
Document.
|
|
7.4
|
Voluntary
prepayment. Subject to the following conditions, the
Borrower may prepay the whole or any part of the Loan on the last day of
an Interest Period without penalty or premium pursuant to Clause
7.8.
|
|
7.5
|
Conditions for voluntary
prepayment. The conditions referred to in
Clause 7.4 are that:
|
|
(a)
|
a
partial prepayment shall be $100,000 or a multiple thereof or any other
amount mutually agreed between the Borrower and the
Lender;
|
|
(b)
|
the
Lender has received from the Borrower at least 10 days’ prior written
notice specifying the amount to be prepaid and the date on which the
prepayment is to be made;
|
|
(c)
|
the
Borrower has provided evidence satisfactory to the Lender that any consent
required by the Borrower or any other Security Party in connection with
the prepayment has been obtained and remains in force, and that any
regulation relevant to this Agreement which affects the Borrower or any
other Security Party has been complied
with.
|
|
7.6
|
Effect of notice of
prepayment. A prepayment notice may not be withdrawn or
amended without the consent of the Lender and the amount specified in the
prepayment notice shall become due and payable by the Borrower on the date
for prepayment specified in the prepayment
notice.
|
|
7.7
|
Mandatory
prepayment. The Borrower shall be obliged to prepay the
whole of the Loan:
|
|
(a)
|
if
the Borrower transfers, assigns or novates its rights and/or obligations
under the Shipbuilding Contract to which it is a party or enters into an
agreement before the Delivery Date, on or before the date on which such
transfer, assignment or novation takes effect or, as the case may be, the
date on which the agreement to sell the Ship becomes effective;
or
|
|
(b)
|
if
the Ship is sold, on or before the date on which the sale is completed by
delivery of the Ship to the buyer;
or
|
|
(c)
|
if
the Ship becomes a Total Loss, on the earlier of the date falling 180 days
after the Total Loss Date and the date of receipt by the Lender of the
proceeds of insurance relating to such Total Loss;
or
|
|
(d)
|
if
any of the following occurs, on demand by the
Lender:
|
|
|
(i)
|
any
of the events specified in Article XI of the Shipbuilding Contract occurs;
or
|
|
|
(ii)
|
either
the Shipbuilding Contract or the Refund Guarantee is cancelled,
terminated, rescinded or suspended or otherwise ceases to remain in force
for any reason; or
|
|
|
(iii)
|
the
Shipbuilding Contract is amended or varied without the prior written
consent of the Lender except for any such amendment or variation as is
permitted by this Agreement or any other relevant Finance Document;
or
|
|
|
(iv)
|
the
Ship has not for any reason been delivered to, and accepted by, the
Borrower under the Shipbuilding Contract by the end of the Availability
Period; or
|
|
|
(v)
|
there
is a change in the ultimate beneficial legal ownership or control of the
Borrower from that disclosed to the Lender on or before the date of this
Agreement.
|
|
7.8
|
Amounts payable on
prepayment. A prepayment shall be made together with
accrued interest (and any other amount payable under Clause 20 or
otherwise) in respect of the amount prepaid and, if the prepayment is not
made on the last day of an Interest Period together with any sums payable
under Clause 20.1(b) but without premium or
penalty.
|
|
7.9
|
Application of partial
prepayment. Each partial prepayment shall be applied
pro-rata against the then outstanding repayment instalments referred to in
Clause 7.1 and the Balloon
Instalment.
|
|
7.10
|
No
reborrowing. No amount prepaid may be
reborrowed.
|
|
8
|
CONDITIONS
PRECEDENT
|
|
8.1
|
Documents, fees and no
default. Each Lender’s obligation to make available a
Advance is subject to the following conditions
precedent:
|
|
(a)
|
that,
on or before service of the Drawdown Notice in respect of the First
Advance, the Lender receives the documents described in Part A of Schedule
2 in form and substance satisfactory to it and its
lawyers;
|
|
(b)
|
that,
on or before the Drawdown Date in respect of each of the Second, Third,
Fourth and Fifth Advances, the Lender receives the documents described in
Part B of Schedule 2 in a form and substance satisfactory to it and its
lawyers;
|
|
(c)
|
that
on or before the Drawdown Date in respect of the Sixth Advance, the Lender
receives the documents described in Part C of Schedule 2 (save for the
documents described in paragraphs 1 and 2 in Part C of Schedule 2 which
shall be delivered by the Borrower to the Lender on the Delivery
Date), in a form and substance satisfactory to it and its
lawyers;
|
|
(d)
|
that,
on or before service of each Drawdown Notice the Lender has received all
accrued commitment commission due and payable pursuant to Clause
19.1;
|
|
(e)
|
that,
on or before service of the Drawdown Notice in respect of the first
Advance, the Lender has received the arrangement fee referred to in Clause
19.1;
|
|
(f)
|
that
both at the date of each Drawdown Notice and at each Drawdown
Date:
|
|
|
(i)
|
no
Event of Default has occurred and is continuing or would result from the
borrowing of the relevant Advance;
|
|
|
(ii)
|
the
representations and warranties in Clause 9.1 and those of the
Borrower or any other Security Party which are set out in the other
Finance Documents would be true and not misleading if repeated on each of
those dates with reference to the circumstances then
existing;
|
|
|
(iii)
|
none
of the circumstances contemplated by Clause 4.4 has occurred and is
continuing; and
|
|
|
(iv)
|
there
has been no material adverse change in the financial position, state of
affairs or prospects of the Borrower, any other Security Party or any
member of the Group, in the light of which the Lender considers that there
is a significant risk that the Borrower or any other Security Party will
later become, unable to discharge its liabilities under the Finance
Documents to which it is a party as they fall due;
and
|
|
(g)
|
that,
if the ratio set out in Clause 14.1 were applied immediately
following the making of the Sixth Advance, the Borrower would not be
obliged to provide additional security or prepay part of the Loan under
that Clause; and
|
|
(h)
|
that
the Lender has received, and found to be acceptable to it, any further
opinions, consents, agreements and documents in connection with the
Finance Documents which the Lender may request by notice to the Borrower
prior to the relevant Drawdown
Date.
|
|
8.2
|
Waivers of conditions
precedent. If the Lender, at its discretion, permits an
Advance to be borrowed before certain of the conditions referred to in
Clause 8.1 are satisfied, the Borrower shall ensure that those
conditions are satisfied within 5 Business Days after the relevant
Drawdown Date (or such longer period as the Lender may
specify).
|
|
9
|
REPRESENTATIONS
AND WARRANTIES
|
|
9.1
|
General. The
Borrower represents and warrants to the Lender as
follows.
|
|
9.2
|
Status. The
Borrower is duly incorporated and validly existing and in good standing
under the laws of the Republic of the Xxxxxxxx
Islands.
|
|
9.3
|
Share capital and
ownership. The Borrower has an authorised share capital
divided into 500 registered shares of $0.01 each, all of which shares have
been issued in registered form and the legal title and beneficial
ownership of all those shares is held free of any Security Interest or
other claim by the Corporate
Guarantor.
|
|
9.4
|
Corporate
power. The Borrower has the corporate capacity, and has
taken all corporate action and obtained all consents necessary for
it:
|
|
(a)
|
to
execute the Shipbuilding Contract and any addenda
thereto;
|
|
(b)
|
to
purchase and pay for the Ship and register the Ship in its name under an
Approved Flag;
|
|
(c)
|
to
execute the Finance Documents to which the Borrower is a party;
and
|
|
(d)
|
to
borrow under this Agreement and to make all the payments contemplated by,
and to comply with, those Finance Documents to which the Borrower is a
party.
|
|
9.5
|
Consents in
force. All the consents referred to in Clause 9.4
remain in force and nothing has occurred which makes any of them liable to
revocation.
|
|
9.6
|
Legal validity; effective
Security Interests. The Finance Documents to which the
Borrower is a party, do now or, as the case may be, will, upon execution
and delivery (and, where applicable, registration as provided for in the
Finance Documents):
|
|
(a)
|
constitute
the Borrower’s legal, valid and binding obligations enforceable against
the Borrower in accordance with their respective terms;
and
|
|
(b)
|
create
legal, valid and binding Security Interests enforceable in accordance with
their respective terms over all the assets to which they, by their terms,
relate,
|
subject to any relevant insolvency laws affecting creditors’ rights
generally.
|
9.7
|
No third party Security
Interests. Without limiting the generality of
Clause 9.6, at the time of the execution and delivery of each Finance
Document:
|
|
(a)
|
the
Borrower will have the right to create all the Security Interests which
that Finance Document purports to create;
and
|
|
(b)
|
no
third party will have any Security Interest or any other interest, right
or claim over, in or in relation to any asset to which any such Security
Interest, by its terms, relates.
|
|
9.8
|
No
conflicts. The execution by the Borrower of each Finance
Document and the borrowing by the Borrower of the Loan, and the Borrower’s
compliance with each Finance Document will not involve or lead to a
contravention of:
|
|
(a)
|
any
law or regulation; or
|
|
(b)
|
the
constitutional documents of the Borrower;
or
|
|
(c)
|
any
contractual or other obligation or restriction which is binding on the
Borrower or any of its assets.
|
|
9.9
|
No withholding
taxes. All payments which the Borrower is liable to make
under the Finance Documents may be made without deduction or withholding
for or on account of any tax payable under any law of any Pertinent
Jurisdiction.
|
|
9.10
|
No
default. No Event of Default has occurred and is
continuing.
|
|
9.11
|
Information. All
information which has been provided in writing by or on behalf of the
Borrower or any other Security Party to the Lender in connection with any
Finance Document satisfied the requirements of Clause 10.5; all
accounts which have been so provided satisfied the requirements of
Clause 10.7; and there has been no material adverse change in the
financial position or state of affairs of either the Borrower or any
member of the Group which may (in the opinion of the Lender) affect the
ability of the Borrower or any other Security Party to comply with the
terms of and/or perform its obligations under this Agreement and the
Financial Documents.
|
|
9.12
|
No
litigation. No legal or administrative action involving
the Borrower (including, without limitation, any action relating to any
alleged or actual breach of the ISM Code and the ISPS Code and/or any
action relating to the Shipbuilding Contract to which it is a party) has
been commenced or taken or, to the Borrower’s knowledge, is likely to be
commenced or taken which, in either case, would be likely to have a
material adverse effect on the Borrower’s financial position or
profitability.
|
|
9.13
|
Validity and completeness of
Shipbuilding Contract. The Shipbuilding Contract constitutes valid,
binding and enforceable obligations of the Builder and the Borrower
respectively in accordance with its terms;
and:
|
|
(a)
|
the
copy of the Shipbuilding Contract delivered to the Lender before the date
of this Agreement is a true and complete copy;
and
|
|
(b)
|
no
amendments or additions to the Shipbuilding Contract have been agreed nor
has the Borrower waived any of its rights under the Shipbuilding
Contract.
|
|
9.14
|
No rebates
etc. There is no agreement or understanding to allow or
pay any rebate, premium, commission, discount or other benefit or payment
(howsoever described) to the Borrower, the Builder or a third party in
connection with the purchase of the Ship, other than as disclosed to the
Lender in writing on or prior to the date of this
Agreement.
|
|
9.15
|
Compliance with certain
undertakings. At the date of this Agreement, the
Borrower is in compliance with Clauses 10.2, 10.4, 10.9 and
10.13.
|
|
9.16
|
Taxes
paid. The Borrower has paid all taxes applicable to, or
imposed on or in relation to the Borrower, its business or the
Ship.
|
|
9.17
|
ISO 9002. The
Borrower will, once it is required to do so by law, obtain ISO 9002
certification.
|
|
9.18
|
ISM Code and ISPS Code
compliance. All requirements of the ISM Code and the
ISPS Code as they relate to the Borrower, the Approved Manager and the
Ship have been complied with.
|
|
9.19
|
No money
laundering. Without prejudice to the generality of
Clause 2.2, in relation to the borrowing by the Borrower of the Loan, the
performance and discharge of its obligations and liabilities under the
Finance Documents, and the transactions and other arrangements effected or
contemplated by the Finance Documents to which the Borrower is a party,
the Borrower confirms (i) that it is acting for its own account, (ii) that
it will use the proceeds of the Loan for its own benefit, under its full
responsibility and exclusively for the purposes specified in this
Agreement and (iii) that the foregoing will not involve or lead to
contravention of any
|
law,
official requirement or other regulatory measure or procedure implemented to
combat “money laundering” (as defined in Article 1 of the Directive (91/308/EEC)
of the Council of the European Communities).
|
10
|
GENERAL
UNDERTAKINGS
|
|
10.1
|
General. The
Borrower undertakes with the Lender to comply with the following
provisions of this Clause 10 at all times during the Security Period,
except as the Lender may otherwise
permit.
|
|
10.2
|
Title; negative
pledge. The Borrower
will:
|
|
(a)
|
hold
the legal title to, and own the entire beneficial interest in the Ship,
the Insurances and Earnings, free from all Security Interests and other
interests and rights of every kind, except for those created by the
Finance Documents and the effect of assignments contained in the Finance
Document;
|
|
(b)
|
not
create or permit to arise any Security Interest over any other asset,
present or future; and
|
|
(c)
|
procure
that its liabilities under the Finance Documents to which it is party do
and will rank at least pari passu with all other present and future
insecured liabilities, except for Liabilities which are mandatorily
preferred by law.
|
|
10.3
|
No disposal of
assets. The Borrower will not transfer, lease or
otherwise dispose of:
|
|
(a)
|
all
or a substantial part of its assets, whether by one transaction or a
number of transactions, whether related or not;
or
|
|
(b)
|
any
debt payable to it or any other right (present, future or contingent
right) to receive a payment, including any right to damages or
compensation if any such debt or debts exceeds in any calendar year,
$200,000 (or the equivalent in any other currency) in
aggregate.
|
|
10.4
|
No other liabilities or
obligations to be incurred. The Borrower will not incur
any liability or obligation, including, without limitation, any Financial
Indebtedness, except liabilities and obligations under the Shipbuilding
Contract and the Finance Documents which it is a party and liabilities or
obligations reasonably incurred in the ordinary course of operating and
chartering the Ship.
|
|
10.5
|
Information provided to be
accurate. All financial and other information which is
provided in writing by or on behalf of the Borrower under or in connection
with any Finance Document will be true and not misleading and will not
omit any material fact or
consideration.
|
|
10.6
|
Provision of financial
statements. The Borrower will send (or procure there are
sent) to the Lender:
|
|
(a)
|
as
soon as possible, but in no event later than 6 months after the end of
each financial year of the Borrower, its audited individual
accounts;
|
|
(b)
|
promptly
following the request of the Lender, the audited consolidated financial
statements of the Group; and
|
|
(c)
|
upon
receipt of the Lender’s request, information with respect to the financial
standing, commitments, operations and performance of the Borrower, the
other members of the Group and the
Ship.
|
|
10.7
|
Form of financial
statements. All accounts delivered under
Clause 10.6 will:
|
|
(a)
|
be
prepared in accordance with all applicable laws and
GAAP;
|
|
(b)
|
give
a true and fair view of the state of affairs of the Borrower or, as the
case may be, the Group at the date of those financial statements and of
their profit for the period to which those accounts relate;
and
|
|
(c)
|
fully
disclose or provide for all significant liabilities of the Borrower or, as
the case may be, the Group.
|
|
10.8
|
Shareholder and creditor
notices. In case of an Event of Default, the Borrower
will send the Lender, at the same time as they are despatched, copies of
all communications which are despatched to the Borrower’s shareholders or
creditors or any class of them.
|
|
10.9
|
Consents. The
Borrower will maintain in force and promptly obtain or renew, and will
promptly send certified copies to the Lender of, all consents
required:
|
|
(a)
|
for
the Borrower to perform its obligations under any Finance Document and the
Shipbuilding Contract;
|
|
(b)
|
for
the validity or enforceability of any Finance Document and the
Shipbuilding Contract;
|
|
(c)
|
for
the Borrower to continue to own and operate the
Ship,
|
and the Borrower will comply with the terms of all such consents.
|
10.10
|
Maintenance of Security
Interests. The Borrower
will:
|
|
(a)
|
at
its own cost, do all that it reasonably can to ensure that any Finance
Document validly creates the obligations and the Security Interests which
it purports to create; and
|
|
(b)
|
without
limiting the generality of paragraph (a), at its own cost, promptly
register, file, record or enrol any Finance Document with any court or
authority in all Pertinent Jurisdictions, pay any stamp, registration or
similar tax in all Pertinent Jurisdictions in respect of any Finance
Document, give any notice or take any other step which may be or become
necessary or desirable for any Finance Document to be valid, enforceable
or admissible in evidence or to ensure or protect the priority of any
Security Interest which it creates.
|
|
10.11
|
Notification of
litigation. The Borrower will provide the Lender with
details of any legal or administrative action involving the Borrower, any
other Security Party, or the Ship, the Earnings or the Insurances as soon
as such action is instituted or it becomes apparent to the Borrower that
it is likely to be instituted, unless it is clear that the legal or
administrative action cannot be considered material in the context of any
Finance Document.
|
|
10.12
|
No amendment to Shipbuilding
Contracts. The Borrower will not agree to any amendment,
variation or supplement to, or waive or fail to enforce, the Shipbuilding
Contract or any of the provisions
thereof.
|
|
10.13
|
Principal place of
business. The Borrower will maintain its place of
business, and keep its corporate documents and records, at the address
stated at Clause 27.2(a); and will not establish, or do anything as a
result of which it would be deemed to have a place of business in any
country other than the Republic of the Xxxxxxxx Islands and/or Greece.
|
|
10.14
|
Confirmation of no
default. The Borrower will, within 3 Business Days after
service by the Lender of a written request, serve on the Lender a notice
which is signed by 2 directors of the Borrower and
which:
|
|
(a)
|
states
that no Event of Default has occurred;
or
|
|
(b)
|
states
that no Event of Default has occurred, except for a specified event or
matter, of which all material details are
given.
|
|
10.15
|
Notification of
default. The Borrower will notify the Lender as soon as
it becomes aware of:
|
|
(a)
|
the
occurrence of an Event of Default;
or
|
|
(b)
|
any
matter which indicates that an Event of Default may have
occurred,
|
and will keep the Lender fully up-to-date with all developments.
|
10.16
|
Ownership. The
Borrower shall procure that there is no change in the legal or beneficial
ownership of the shares in the Borrower throughout the Security Period, or
any change in the management of the
Borrower.
|
|
10.17
|
Provision of further
information. The Borrower will, as soon as practicable
after receiving the request, provide the Lender with any additional
financial or other information relating
to:
|
|
(a)
|
the
Borrower, the Ship, the Shipbuilding Contract, the Earnings or the
Insurances; or
|
|
(b)
|
any
other matter relevant to, or to any provision of, a Finance Document;
and
|
|
(c)
|
which
may be requested by the Lender at any
time.
|
|
11
|
CORPORATE
UNDERTAKINGS
|
|
11.1
|
General. The
Borrower also undertakes with the Lender to comply with the following
provisions of this Clause 11 at all times during the Security Period
except as the Lender may otherwise
permit.
|
|
11.2
|
Maintenance of
status. The Borrower will maintain its separate
corporate existence and remain in good standing under the laws of the
Republic of the Xxxxxxxx Islands.
|
|
11.3
|
Negative
undertakings. The Borrower will
not:
|
|
(a)
|
carry
on any business other than the ownership, chartering and operation of the
Ship; or
|
|
(b)
|
without
the Lender’s prior written consent in case an Event of Default has
occurred, pay any dividend or make any other form of distribution or
effect any form of redemption, purchase or return of share capital;
or
|
|
(c)
|
provide
any form of credit or financial assistance
to:
|
|
|
(i)
|
a
person who is directly or indirectly interested in the Borrower’s share or
loan capital; or
|
|
|
(ii)
|
any
company in or with which such a person is directly or indirectly
interested or connected;
|
|
|
(iii)
|
or
enter into any transaction with or involving such a person or company on
terms which are, in any respect, less favourable to the Borrower than
those which it could obtain in a bargain made at arms’
length;
|
|
(d)
|
other
than the Earnings Account and the Retention Account, open or maintain any
account with any bank or financial institution except accounts with the
Lender for the purposes of the Finance
Documents;
|
|
(e)
|
issue,
allot or grant any person a right to any shares in its capital or
repurchase or reduce its issued share
capital;
|
|
(f)
|
acquire
any shares or other securities other than US or UK Treasury bills and
certificates of deposit issued by major North American or European banks,
or enter into any transaction in a
derivative;
|
|
(g)
|
enter
into any form of amalgamation, merger or de-merger or any form of
reconstruction or reorganisation;
or
|
|
(h)
|
acquire
any vessel other than the Ship.
|
|
12
|
INSURANCE
|
|
12.1
|
General. The
Borrower also undertakes with the Lender to comply with the following
provisions of this Clause 12 at all times during the Security Period
(after the Ship has been delivered to it under the Shipbuilding Contract
or under any other applicable agreement) except as the Lender may
otherwise permit.
|
|
12.2
|
Maintenance of obligatory
insurances. The Borrower shall keep the Ship insured at
its expense against:
|
|
(a)
|
fire
and usual marine risks (including hull and machinery and excess
risks);
|
|
(b)
|
war
risks;
|
|
(c)
|
protection
and indemnity risks; and
|
|
(d)
|
any
other risks against which the Lender considers, having regard to practices
and other circumstances prevailing at the relevant time, it would in the
opinion of the Lender be reasonable for the Borrower to insure and which
are specified by the Lender by notice to the
Borrower.
|
|
12.3
|
Terms of obligatory
insurances. The Borrower shall effect such
insurances:
|
|
(a)
|
in
Dollars;
|
|
(b)
|
in
the case of fire and usual marine risks and war risks, in an amount on an
agreed value basis of at least the greater of (i) an amount equal to 130
per cent. of the Loan and (ii) the Market Value of the Ship;
and
|
|
(c)
|
in
the case of oil pollution liability risks, for an aggregate amount equal
to the highest level of cover from time to time available under basic
protection and indemnity club entry and in the international marine
insurance market (currently
$1,000,000,000);
|
|
(d)
|
in
relation to protection and indemnity risks, in respect of the full tonnage
of the Ship owned by it;
|
|
(e)
|
on
approved terms; and
|
|
(f)
|
through
approved brokers and with approved insurance companies and/or underwriters
or, in the case of war risks and protection and indemnity risks, in
approved war risks and protection and indemnity risks
associations.
|
|
12.4
|
Further protections for the
Lender. In addition to the terms set out in
Clause 12.3, the Borrower shall procure that the obligatory
insurances shall:
|
|
(a)
|
whenever
the Lender requires name (or be amended to name) the Lender as additional
named assured for its rights and interests, warranted no operational
interest and with full waiver of rights of subrogation against the Lender,
but without the Lender thereby being liable to
pay
|
(but having the right to pay) premiums, calls or other assessments in respect of
such insurance;
|
(b)
|
name
the Lender as loss payee with such directions for payment as the Lender
may specify;
|
|
(c)
|
provide
that all payments by or on behalf of the insurers under the obligatory
insurances to the Lender shall be made without set-off, counterclaim or
deductions or condition whatsoever;
|
|
(d)
|
provide
that the insurers shall waive, to the fullest extent permitted by English
law, their entitlement (if any) (whether by statute, common law, equity,
or otherwise) to be subrogated to the rights and remedies of the Lender in
respect of any rights or interests (secured or not) held by or available
to the Lender in respect of the Secured Liabilities, until the Secured
Liabilities shall have been fully repaid and discharged, except that the
insurers shall not be restricted by the terms of this paragraph (d) from
making personal claims against persons (other than the Borrower or the
Lender) in circumstances where the insurers have fully discharged their
liabilities and obligations under the relevant obligatory
insurances;
|
|
(e)
|
provide
that such obligatory insurances shall be primary without right of
contribution from other insurances which may be carried by the
Lender;
|
|
(f)
|
provide
that the Lender may make proof of loss if the Borrower fails to do
so;
|
|
(g)
|
provide
that if any obligatory insurance is cancelled, or if any substantial
change is made in the coverage which adversely affects the interest of the
Lender, or if any obligatory insurance is allowed to lapse for non-payment
of premium, such cancellation, charge or lapse shall not be effective with
respect to the Lender for 30 days (or 7 days in the case of war risks)
after receipt by the Lender of prior written notice from the insurers of
such cancellation, change or lapse.
|
|
12.5
|
Renewal of obligatory
insurances. The Borrower
shall:
|
|
(a)
|
at
least 21 days before the expiry of any obligatory
insurance:
|
|
|
(i)
|
notify
the Lender of the brokers (or other insurers) and any protection and
indemnity or war risks association through or with whom the Borrower
proposes to renew that obligatory insurance and of the proposed terms of
renewal; and
|
|
|
(ii)
|
in
case of any substantial change in the obligatory insurance, obtain the
Lender's approval to the matters referred to in paragraph
(i);
|
|
(b)
|
at
least 14 days before the expiry of any obligatory insurance, renew that
obligatory insurance in accordance with the Lender's approval pursuant to
paragraph (a); and
|
|
(c)
|
procure
that the approved brokers and/or the war risks and protection and
indemnity associations with which such a renewal is effected shall
promptly after the renewal notify the Lender in writing of the terms and
conditions of the renewal.
|
|
12.6
|
Copies of policies; letters of
undertaking. The Borrower shall ensure that all approved
brokers provide the Lender with pro forma copies of all policies relating
to the obligatory insurances which they are to effect or renew and of a
letter or letters or undertaking in a form required by the Lender and
including undertakings by the approved brokers
that:
|
|
(a)
|
they
will have endorsed on each policy, immediately upon issue, a loss payable
clause and a notice of assignment complying with the provisions of
Clause 12.4;
|
|
(b)
|
they
will hold such policies, and the benefit of such insurances, to the order
of the Lender in accordance with the said loss payable
clause;
|
|
(c)
|
they
will advise the Lender immediately of any material change to the terms of
the obligatory insurances;
|
|
(d)
|
they
will notify the Lender in writing, not less than 14 days before the expiry
of the obligatory insurances, in the event of their not having received
notice of renewal instructions from the Borrower or its agents and, in the
event of their receiving instructions to renew, they will promptly notify
the Lender of the terms of the instructions;
and
|
|
(e)
|
they
will not set off against any sum recoverable in respect of a claim
relating to the Ship under such obligatory insurances any premiums or
other amounts due to them or any other person whether in respect of the
Ship or otherwise, they waive any lien on the policies (including, without
limitation, any fleet lien), or any sums received under them, which they
might have in respect of such premiums or other amounts, and they will not
cancel such obligatory insurances by reason of non-payment of such
premiums or other amounts, and will arrange for a separate policy to be
issued in respect of the Ship forthwith upon being so requested by the
Lender.
|
|
12.7
|
Copies of certificates of
entry. The Borrower shall ensure that any protection and
indemnity and/or war risks associations in which the Ship is entered
provides the Lender with:
|
|
(a)
|
a
certified copy of the certificate of entry for the
Ship;
|
|
(b)
|
a
letter or letters of undertaking in such form as may be required by the
Lender;
|
|
(c)
|
where
required to be issued under the terms of insurance/indemnity provided by
the Borrower's protection and indemnity association, a certified copy of
each United States of America voyage quarterly declaration (or other
similar document or documents) made by the Borrower in relation to the
Ship in accordance with the requirements of such protection and indemnity
association; and
|
|
(d)
|
a
certified copy of each certificate of financial responsibility for
pollution by oil or other Environmentally Sensitive Material issued by the
relevant certifying authority in relation to the
Ship.
|
|
12.8
|
Deposit of original
policies. The Borrower shall ensure that all policies
relating to obligatory insurances are deposited with the approved brokers
through which the insurances are effected or
renewed.
|
|
12.9
|
Payment of
premiums. The Borrower shall punctually pay all premiums
or other sums payable in respect of the obligatory insurances and produce
all relevant receipts when so required by the
Lender.
|
|
12.10
|
Guarantees. The
Borrower shall ensure that any guarantees required by a protection and
indemnity or war risks association are promptly issued and remain in full
force and effect.
|
|
12.11
|
Restrictions on
employment. The Borrower shall not employ the Ship, nor
permit her to be employed, outside the cover provided by any obligatory
insurances.
|
|
12.12
|
Compliance with terms of
insurances. The Borrower shall not do or omit to do (or
permit to be done or not to be done) any act or thing which would or might
render any obligatory insurance invalid, void, voidable or unenforceable
or render any sum payable under an obligatory insurance repayable in whole
or in part; and, in particular:
|
|
(a)
|
the
Borrower shall take all necessary action and comply with all requirements
which may from time to time be applicable to the obligatory insurances,
and (without limiting the obligation contained in
Clause 12.7 (c)) ensure that the obligatory insurances are not
made subject to any exclusions or qualifications to which the Lender has
not given its prior approval;
|
|
(b)
|
the
Borrower shall not make any changes relating to the classification or
classification society or manager or operator of the Ship approved by the
underwriters of the obligatory
insurances;
|
|
(c)
|
the
Borrower shall make (and promptly supply copies to the Lender of) all
quarterly or other voyage declarations which may be required by the
protection and indemnity risks association in which the Ship is entered to
maintain cover for trading to the United States of America and Exclusive
Economic Zone (as defined in the United States Oil Pollution Act 1990 or
any other applicable legislation);
and
|
|
(d)
|
the
Borrower shall not employ the Ship, nor allow it to be employed, otherwise
than in conformity with the terms and conditions of the obligatory
insurances, without first obtaining the consent of the insurers and
complying with any requirements (as to extra premium or otherwise) which
the insurers specify.
|
|
12.13
|
Alteration to terms of
insurances. The Borrower shall neither make nor agree to
any alteration to the terms of any obligatory insurance nor waive any
right relating to any obligatory
insurance.
|
|
12.14
|
Settlement of
claims. The Borrower shall not settle, compromise or
abandon any claim under any obligatory insurance for Total Loss or for a
Major Casualty, and the Borrower shall do all things necessary and provide
all documents, evidence and information to enable the Lender to collect or
recover any moneys which at any time become payable in respect of the
obligatory insurances.
|
|
12.15
|
Provision of copies of
communications. The Borrower shall provide the Lender,
at the time of each such communication, copies of all written
communications between itself and:
|
|
(a)
|
the
approved brokers; and
|
|
(b)
|
the
approved protection and indemnity and/or war risks associations;
and
|
|
(c)
|
the
approved insurance companies and/or underwriters, which relate directly or
indirectly to:
|
|
|
(i)
|
the
Borrower's obligations relating to the obligatory insurances including,
without limitation, all requisite declarations and payments of additional
premiums or calls; and
|
|
|
(ii)
|
any
credit arrangements made between the Borrower and any of the persons
referred to in paragraphs (a) or (b) relating wholly or partly to the
effecting or maintenance of the obligatory
insurances.
|
|
12.16
|
Provision of
information. In addition, the Borrower shall promptly
provide the Lender (or any persons which it may designate) with any
information which the Lender (or any such designated person) requests for
the purpose of:
|
|
(a)
|
obtaining
or preparing any report from an independent marine insurance broker as to
the adequacy of the obligatory insurances effected or proposed to be
effected; and/or
|
|
(b)
|
effecting,
maintaining or renewing any such insurances as are referred to in
Clause 12.17 below or dealing with or considering any matters
relating to any such insurances;
|
and
the Borrower shall, forthwith upon demand, indemnify the Lender in respect of
all fees and other expenses incurred by or for the account of the Lender in
connection with any such report as is referred to in paragraph (a).
|
12.17
|
Mortgagee's interest and
additional perils insurances. The Lender shall be
entitled from time to time to effect, maintain and renew all or any of the
following insurances in such
|
amounts, on such terms, through such insurers and generally in such manner as
the Lender may
from time to time consider appropriate:
|
(a)
|
a
mortgagee's interest marine insurance in relation to the Ship in an amount
equal to 115 per cent. of the Loan providing for the indemnification of
the Lender for any losses under or in connection with any Finance Document
which directly or indirectly result from loss of or damage to the Ship or
a liability of the Ship or of the Borrower, being a loss or damage which
is prima facie covered by an obligatory insurance but in respect of which
there is a non-payment (or reduced payment) by the underwriters by reason
of, or on the basis of an allegation
concerning:
|
|
|
(i)
|
any
act or omission on the part of the Borrower, of any operator, charterer,
manager or sub-manager of the Ship or of any officer, employee or Lender
of the Borrower or of any such person, including any breach of warranty or
condition or any non-disclosure relating to such obligatory
insurance;
|
|
|
(ii)
|
any
act or omission, whether deliberate, negligent or accidental, or any
knowledge or privity of the Borrower, any other person referred to in
paragraph (i) above, or of any officer, employee or agent of the Borrower
or of such a person, including the casting away or damaging of the Ship
and/or the Ship being unseaworthy;
and/or
|
|
|
(iii)
|
any
other matter capable of being insured against under a mortgagee's interest
marine insurance policy whether or not similar to the
foregoing;
|
|
(b)
|
a
mortgagee's interest additional perils policy in relation to each Ship in
an amount equal to 115 per cent. of the Loan, providing for the
indemnification of the Lender against, among other things, any possible
losses or other consequences of any Environmental Claim, including the
risk of expropriation, arrest or any form of detention of the Ship, the
imposition of any Security Interest over the Ship and/or any other matter
capable of being insured against under a mortgagee's interest additional
perils policy whether or not similar to the
foregoing,
|
|
|
and
the Borrower shall upon demand fully indemnify the Lender in respect of
all premiums and other expenses which are incurred in connection with or
with a view to effecting, maintaining or renewing any such insurance or
dealing with, or considering, any matter arising out of any such
insurance.
|
|
12.18
|
Review of insurance
requirements. The Lender shall be entitled to review the
requirements of this Clause 12 from time to time in order to take account
of any changes in circumstances after the date of this Agreement which
are, in the opinion of the Lender, significant and capable of affecting
the Borrower or the Ship and its or their insurance (including, without
limitation, changes in the availability or the cost of insurance coverage
or the risks to which the Borrower may be subject), and may appoint
insurance consultants in relation to this review at the cost of the
Borrower.
|
|
12.19
|
Modification of insurance
requirements. The Lender shall notify the Borrower of
any proposed modification under Clause 12.18 to the requirements of this
Clause 12 which the Lender consider appropriate in the circumstances, and
such modification shall take effect on and from the date it is notified in
writing to the Borrower as an amendment to this Clause 12 and shall bind
the Borrower accordingly.
|
|
12.20
|
Compliance with mortgagee's
instructions. The Lender shall be entitled (without
prejudice to or limitation of any other rights which it may have or
acquire under any Finance Document) to require the Ship to remain at any
safe port or to proceed to and remain at any safe port designated by the
Lender until the Borrower implements any amendments to the terms of the
obligatory insurances and any operational changes required as a result of
a notice served under Clause 12.19.
|
|
13
|
SHIP
COVENANTS
|
|
13.1
|
General. The
Borrower also undertakes with the Lender to comply with the following
provisions of this Clause 13 at all times during the Security Period
(after the Ship has been delivered to it under the Shipbuilding Contract
or under any other applicable agreement) except as the Lender may
otherwise permit in writing (in the case of Clause 13.13 such permission
not to be unreasonably withheld).
|
|
13.2
|
Ship’s name and
registration. The Borrower shall keep the Ship
registered in its name under an Approved Flag; shall not do or allow to be
done anything as a result of which such registration might be cancelled or
imperilled; and shall not change the name or port of registry of the
Ship.
|
|
13.3
|
Repair and
classification. The Borrower shall keep the Ship in a
good and safe condition and state of
repair:
|
|
(a)
|
consistent
with first-class ship ownership and management
practice;
|
|
(b)
|
so
as to maintain the Ship with the classification specified in Article I,
4(a) of the Shipbuilding Contract with American Bureau of
Shipping or any other classification society, approved by the Lender,
which is a member of IACS, free of outstanding or overdue recommendations
and conditions of such classification society affecting the Ship’s class;
and
|
|
(c)
|
so
as to comply with all laws and regulations applicable to vessels
registered at ports in the relevant Approved Flag State or to vessels
trading to any jurisdiction to which the Ship may trade from time to time
including but not limited to the ISM Code, the ISPS Code and the ISM Code
Documentation.
|
|
13.4
|
Classification society
undertaking. The Borrower shall instruct the
classification society referred to in Clause 13.3 (and procure that
the classification society undertakes with the
Lender):
|
|
(a)
|
to
send to the Lender, following receipt of a written request from the
Lender, certified true copies of all original class records held by the
classification society in relation to the
Ship;
|
|
(b)
|
to
allow the Lender (or its agents), at any time and from time to time, to
inspect the original class and related records of the Borrower and the
Ship at the offices of the classification society and to take copies of
them;
|
|
(c)
|
to
notify the Lender immediately in writing if the classification
society:
|
|
|
(i)
|
receives
notification from the Borrower or any other person that the Ship’s
classification society is to be changed;
or
|
|
|
(ii)
|
becomes
aware of any facts or matters which may result in or have resulted in a
change, suspension, discontinuance, withdrawal or expiry of the Ship’s
class under the rules or terms and conditions of the Borrower’s or the
Ship’s membership of the classification
society;
|
|
(d)
|
following
receipt of a written request from the
Lender:
|
|
|
(i)
|
to
confirm that the Borrower is not in default of any of its contractual
obligations or liabilities to the classification society and, without
limiting the foregoing, that it has paid in full all fees or other charges
due and payable to the classification society;
or
|
|
|
(ii)
|
if
the Borrower is in default of any of its contractual obligations or
liabilities to the classification society, to specify to the Lender in
reasonable detail the facts and
|
circumstances of such default, the consequences of such default, and any
remedy
period agreed or allowed by the classification society.
|
13.5
|
Modification. The
Borrower shall not make any modification or repairs to, or replacement of,
the Ship or equipment installed on the Ship which would or might
materially alter the structure, type or performance characteristics of the
Ship or materially reduce its
value.
|
|
13.6
|
Removal of
parts. The Borrower shall not remove any material part
of the Ship, or any item of equipment installed on the Ship, unless the
part or item so removed is forthwith replaced by a suitable part or item
which is in the same condition as or better condition than the part or
item removed, is free from any Security Interest or any right in favour of
any person other than the Lender and becomes on installation on the Ship
the property of the Borrower and subject to the security constituted by
the Mortgage Provided
that the Borrower may install equipment owned by a third party if
the equipment can be removed without any risk of damage to the
Ship.
|
|
13.7
|
Surveys. The
Borrower shall submit the Ship regularly to all periodical or other
surveys which may be required for classification purposes and, if so
required by the Lender, provide the Lender with copies of all survey
reports and shall allow the Lender’s representatives to conduct a
comprehensive inspection of the Ship’s records when and if required by the
Lender.
|
|
13.8
|
Inspection. The
Borrower shall permit the Lender (by surveyors or other persons appointed
by it for that purpose) to board the Ship at all reasonable times (during
the pre-delivery and post-delivery period) to inspect its condition or to
satisfy themselves about proposed or executed repairs and shall afford all
proper facilities for such inspections, and all costs and expenses in
relation thereto shall be for the account of the
Borrower.
|
|
13.9
|
Prevention of and release from
arrest. The Borrower shall promptly
discharge:
|
|
(a)
|
all
liabilities which give or may give rise to maritime or possessory liens on
or claims enforceable against the Ship, the Earnings or the
Insurances;
|
|
(b)
|
all
taxes, dues and other amounts charged in respect of the Ship, the Earnings
or the Insurances; and
|
|
(c)
|
all
other outgoings whatsoever in respect of the Ship, the Earnings or the
Insurances,
|
and,
forthwith upon receiving notice of the arrest of the Ship, or of its detention
in exercise or purported exercise of any lien or claim, the Borrower shall
procure its release by providing bail or otherwise as the circumstances may
require.
|
13.10
|
Compliance with laws
etc. The Borrower
shall:
|
|
(a)
|
comply,
or procure compliance with the ISM Code, the ISPS Code, SOLAS, MARPOL all
Environmental Laws and all other laws or regulations relating to the Ship,
its ownership, operation and management or to the business of the Borrower
and the Approved Manager;
|
|
(b)
|
not
employ the Ship nor allow its employment in any manner contrary to any law
or regulation in any relevant jurisdiction including but not limited to
the ISM Code and the ISPS Code; and
|
|
(c)
|
in
the event of hostilities in any part of the world (whether war is declared
or not), not cause or permit its to enter or trade to any zone which is
declared a war zone by any government or by the Ship’s war risks insurers
unless the prior written consent of the Lender has been given and the
Borrower has (at its expense) effected any special, additional or modified
insurance cover which the Lender may
require.
|
|
13.11
|
Provision of
information. The Borrower shall promptly provide the
Lender with any information which it requests
regarding:
|
|
(a)
|
the
Ship, its employment, position and
engagements;
|
|
(b)
|
the
Earnings and payments and amounts due to the Ship’s master and
crew;
|
|
(c)
|
any
expenses incurred, or likely to be incurred, in connection with the
operation, maintenance or repair of the Ship and any payments made in
respect of the Ship;
|
|
(d)
|
any
towages and salvages;
|
|
(e)
|
the
Borrower’s, the Approved Manager’s or the Ship’s compliance with the ISM
Code and the ISPS Code;
|
and,
upon the Lender’s request, provide copies of any current charter relating to the
Ship, of any current charter guarantee and of the Document of Compliance, Safety
Management Certificate and International Ship Security Certificate of the
Ship.
|
13.12
|
Notification of certain
events. The Borrower shall immediately notify the Lender
by fax, confirmed forthwith by letter,
of:
|
|
(a)
|
any
casualty which is or is likely to be or to become a Major
Casualty;
|
|
(b)
|
any
occurrence as a result of which the Ship has become or is, by the passing
of time or otherwise, likely to become a Total
Loss;
|
|
(c)
|
any
requirement or recommendation made by any insurer or classification
society or by any competent authority which is not immediately complied
with;
|
|
(d)
|
any
arrest or detention of the Ship, any exercise or purported exercise of any
lien on the Ship or its Earnings or any requisition of the Ship for
hire;
|
|
(e)
|
any
intended dry docking of the Ship;
|
|
(f)
|
any
Environmental Claim made against the Borrower or in connection with the
Ship, or any Environmental
Incident;
|
|
(g)
|
any
claim for breach of the ISM Code or the ISPS Code being made against the
Borrower, the Approved Manager or otherwise in connection with the
Ship;
|
|
(h)
|
any
other matter, event or incident, actual or threatened, the effect of which
will or could lead to the ISM Code or the ISPS Code not being complied
with,
|
and
the Borrower shall keep the Lender advised in writing on a regular basis and in
such detail as the Lender shall require of the Borrower’s, the Approved
Manager’s or any other person’s response to any of those events or
matters.
|
13.13
|
Restrictions on chartering,
appointment of managers etc. The Borrower shall
not:
|
|
(a)
|
let
the Ship on demise charter for any
period;
|
|
(b)
|
enter
into any time or consecutive voyage charter in respect of the Ship for a
term which is equal to or exceeds, or which by virtue of any optional
extensions may exceed, 12 months;
|
|
(c)
|
enter
into any charter in relation to the Ship under which more than 2 months’
hire (or the equivalent) is payable in
advance;
|
|
(d)
|
charter
the Ship otherwise than on bona fide arm’s length terms at the time when
the Ship is fixed;
|
|
(e)
|
appoint
a manager of the Ship other than the Approved Manager or agree to any
alteration to the terms of the Approved Manager’s
appointment;
|
|
(f)
|
de-activate
or lay up the Ship; or
|
|
(g)
|
put
the Ship into the possession of any person for the purpose of work being
done upon her in an amount exceeding or likely to exceed $250,000 (or the
equivalent in any other currency) unless that person has first given to
the Lender and in terms satisfactory to it a written undertaking not to
exercise any lien on the Ship or the Earnings for the cost of such work or
for any other reason.
|
|
13.14
|
Notice of
Mortgage. The Borrower shall keep the relevant Mortgage
registered against the Ship as a valid first priority mortgage, carry on
board the Ship a certified copy of the Mortgage and place and maintain in
a conspicuous place in the navigation room and the Master’s cabin of the
Ship a framed printed notice stating that the Ship is mortgaged by the
Borrower to the Lender.
|
|
13.15
|
Sharing of
Earnings. The Borrower shall
not:
|
|
(a)
|
enter
into any agreement or arrangement for the sharing of any
Earnings;
|
|
(b)
|
enter
into any agreement or arrangement for the postponement of any date on
which any Earnings are due; the reduction of the amount of any Earnings or
otherwise for the release or adverse alteration of any right of the
Borrower to any Earnings; or
|
|
(c)
|
enter
into any agreement or arrangement for the release of, or adverse
alteration to, any guarantee or Security Interest relating to any
Earnings.
|
|
13.16
|
Charterparty
Assignment. If the Borrower enters into any time charter
(such charter to be in form and substance in all respects acceptable to
the Lender) in respect of the Ship after the date of delivery thereof to
the Borrower and which is of 12 or more months in duration, or is capable
of exceeding 12 or more months in duration, the Borrower shall at the
request of the Lender execute in favour of the Lender (and register, if
applicable) a Charterparty Assignment in respect of such charter in such
form and on such terms as the Lender may require, and shall deliver to the
Lender any documents in relation thereto which the Lender may
require.
|
|
14
|
SECURITY
COVER
|
|
14.1
|
Required security
cover. The Borrower hereby undertakes that if (after the
Ship has been delivered to it under the Shipbuilding Contract), and so
often as, the aggregate of:
|
|
(a)
|
the
Market Value of the Ship; and
|
|
(b)
|
the
net realisable value of any additional security for the time being
actually provided to the Lender pursuant to this Clause
14,
|
is
less than the amount equal to the 120 per cent. of the Loan it will within 1
month after the date on which the Lender's notice is served,
either:
|
|
(i)
|
provide,
or ensure that a third party provides, additional security which, in the
opinion of the Lender, has a net realisable value at least equal to the
shortfall and is documented in such terms as the Lender may approve or
require; or
|
|
|
(ii)
|
prepay
such part (at least) of the Loan as will eliminate the
shortfall.
|
|
14.2
|
Meaning of additional
security. In Clause 14.1 “security” means a
Security Interest over an asset or assets (whether securing the Borrower’s
liabilities under the Finance Documents or a guarantee in respect of those
liabilities), or a guarantee, letter of credit or other security in
respect of the Borrower’s liabilities under the Finance
Documents. |
|
14.3
|
Requirement for additional
documents. The Borrower shall not be deemed to have
complied with Clause 14.1 (i) above until the Lender has received in
connection with the additional security certified copies of documents
referred to in paragraphs 3, 4 and 5 of Schedule 2, Part A below and such
legal opinions in terms acceptable to the Lender from such lawyers as they
may select.
|
|
14.4
|
Valuation of
Ship. The Market Value of the Ship at any date is that
shown by the average of valuations prepared by two independent sale and
purchase shipbrokers selected by the Lender, each such valuation to be
prepared:
|
|
(a)
|
with
or without physical inspection of the Ship (as the Lender may
require);
|
|
(b)
|
on
the basis of a sale for prompt delivery for cash on normal arm's length
commercial terms as between a willing seller and a willing buyer on a
charter free basis;
|
|
(c)
|
in
Dollars; and
|
|
(d)
|
after
deducting the estimated amount of the usual and reasonable expenses which
would be incurred in connection with the
sale
|
Provided that if
one such valuation is more than 115 per cent. of the other valuation, then the
Lender shall select a third such shipbroker to provide a valuation of the Ship
in accordance with this Clause 14.4 and the Market Value of the Ship shall be
the arithmetic average of all three such valuations.
|
14.5
|
Value of additional
security. The net realisable value of any additional
security which is provided under Clause 14.1 and which consists of a
Security Interest over a vessel shall be that shown by a valuation
complying with the requirements of Clause
14.4.
|
|
14.6
|
Valuations
binding. Any valuation under Clause 14.1(i), 14.4 or
14.5 shall be binding and conclusive as regards the Borrower, as shall be
any valuation which the Lender makes of a security which does not consist
of or include a Security Interest.
|
|
14.7
|
Frequency of
valuations. The Borrower acknowledges and agrees that
the Lender may commission valuations of the Ship at such times as the
Lender shall deem necessary and in any event not less often than once
during each 12 month period of the Security
Period.
|
|
14.8
|
Provision of
information. The Borrower shall promptly provide the
Lender and any shipbroker or expert acting under Clause 14.4 or 14.5 with
any information which the Lender or the Shipbroker or expert may request
for the purposes of the valuation; and, if the Borrower fails to provide
the information by the date specified in the request, the valuation may be
made on any basis and assumptions which the shipbroker or the Lender (or
the expert appointed by them) consider
prudent.
|
|
14.9
|
Payment of valuation
expenses. Without prejudice to the generality of the
Borrower’s obligations under Clauses 19.2, 19.3 and 20.3, the Borrower
shall, on demand, pay the Lender the amount of the fees and expenses of
any shipbroker or expert instructed by the Lender under this Clause and
all legal and other expenses incurred by the Lender in connection with any
matter arising out of this Clause.
|
|
15
|
PAYMENTS
AND CALCULATIONS
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15.1
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Currency and method of
payments. All payments to be made by the Borrower to the
Lender under a Finance Document shall be made to the
Lender:
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(a)
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by
not later than 11.00 a.m. (Athens time) on the due
date;
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(b)
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in
same day Dollar funds settled through the New York Clearing House
Interbank Payments System (or in such other Dollar funds and/or settled in
such other manner as the Lender shall specify as being customary at the
time for the settlement of international transactions of the type
contemplated by this Agreement);
and
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(c)
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to
the account of the Lender with Citibank N.A., New York, NY, USA (Account
No 00000000 under reference “Sunray Navigation Inc. - for Shipping
Branch), or to such other account with such other bank as the Lender may
from time to time notify to the
Borrower.
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15.2
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Payment on non-Business
Day. If any payment by the Borrower under a Finance
Document would otherwise fall due on a day which is not a Business
Day:
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(a)
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the
due date shall be extended to the next succeeding Business Day;
or
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(b)
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if
the next succeeding Business Day falls in the next calendar month, the due
date shall be brought forward to the immediately preceding Business
Day;
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and
interest shall be payable during any extension under paragraph (a) at the rate
payable on the original due date.
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15.3
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Basis for calculation of
periodic payments. All interest and commitment fee and
any other payments under any Finance Document which are of an annual or
periodic nature shall accrue from day to day and shall be calculated on
the basis of the actual number of days elapsed and a 360 day
year.
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15.4
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Lender
accounts. The Lender shall maintain an account or
accounts showing the amounts advanced by the Lender and all other sums
owing to the Lender from the Borrower and each Security Party under the
Finance Documents and all payments in respect of those amounts made by the
Borrower and any other Security
Party.
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15.5
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Accounts prima facie
evidence. If the account maintained under
Clauses 15.4 shows an amount to be owing by the Borrower or a
Security Party to the Lender, that account shall be prima facie evidence
that that amount is owing to the
Lender.
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16
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APPLICATION
OF RECEIPTS
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16.1
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Normal order of
application. Except as any Finance Document may
otherwise provide, any sums which are received or recovered by the Lender
under or by virtue of any Finance Document shall be
applied:
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(a)
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FIRSTLY:
in or towards the payment of expenses and all sums other than principal or
interest which may be owing to the Lender under the Finance
Documents;
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(b)
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SECONDLY:
in or towards the payment of any arrears of interest owing to the Lender
hereunder;
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(c)
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THIRDLY:
in or towards the payment of any other sums of money due to the Lender
under the Finance Documents;
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(d)
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FOURTHLY:
in or towards the repayment of the Loan (whether the same is due and
payable or not);
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(e)
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FIFTHLY:
following the occurrence of an Event of Default, in retention of an amount
equal to any amount not then due and payable under any Finance Document
but which the Lender, by notice to the Borrower and the Security Parties,
states in its opinion will or may become due and payable in the future
and, upon those amounts becoming due and payable, in or towards
satisfaction of them in accordance with the provisions of this Clause;
and
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(f)
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SIXTHLY:
the balance (if any) shall be paid as the Borrower shall direct in writing
to the Lender.
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16.2
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Variation of order of
application. The Lender may, by notice to the Borrower
and the Security Parties, provide for a different manner of application
from that set out in Clause 16.1 either as regards a specified sum or
sums or as regards sums in a specified category or
categories.
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16.3
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Notice of variation of order of
application. The Lender may give notices under
Clause 16.2 from time to time; and such a notice may be stated to
apply not only to sums which may be received or recovered in the future,
but also to any sum which has been received or recovered on or after the
third Business Day before the date on which the notice is
served.
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16.4
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Appropriation rights
overridden. This Clause 16 and any notice which the
Lender gives under Clause 16.2 shall override any right of
appropriation possessed, and any appropriation made, by the Borrower or
any other Security Party.
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17
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APPLICATION
OF EARNINGS
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17.1
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Payment of
Earnings. The Borrower undertakes with the Lender to
ensure that, throughout the Security Period (subject only to the
provisions of the relevant General Assignment), all the Earnings of the
Ship are paid to the Earnings
Account.
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17.2
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Monthly
retentions. The Borrower undertakes with the Lender to
ensure that, on the day falling 1 month after the Drawdown Date of the
Sixth Advance and on the same day in each subsequent month, there is
transferred to the Retention Account out of the aggregate Earnings
received in the Earnings Account during the preceding calendar
month:
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(a)
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one-third
of the amount of each repayment instalment falling due under Clause 7.1(a)
on the next Repayment Date; and
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(b)
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the
relevant fraction of the aggregate amount of interest on the Loan which is
payable on the next due date for payment of interest under this
Agreement.
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The
“relevant fraction” is a
fraction of which the numerator is 1 and the denominator the number of months
comprised in the then current Interest Period (or, if the period is shorter, the
number of months from the later of the commencement of the current Interest
Period or the last due date for payment of interest to the next due date for
payment of interest under this Agreement).
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17.3
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Shortfall in
Earnings. If the aggregate Earnings received in the
Earnings Account are insufficient in any month for the required amount to
be transferred to the Retention Account under Clause 17.2, the Borrower
shall make up the amount of the insufficiency on demand from the
Lender.
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17.4
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Application of
retentions. Until an Event of Default occurs, the Lender
shall on each Repayment Date and on each due date for the payment of
interest under this Agreement apply so much of the then balance on the
Retention Account as equals:
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(a)
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the
repayment instalment due on that Repayment Date;
or
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(b)
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the
amount of interest payable on that interest payment
date;
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in discharge of the Borrower’s liability for that repayment instalment or that
interest.
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17.5
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Interest accrued on Retention
Account. Any credit balance on the Retention Account
shall bear interest at the rate from time to time offered by the Lender to
its customers for Dollar deposits of similar amounts and for periods
similar to those for which such balances appear to the Lender likely to
remain the Retention Account.
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17.6
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Release of accrued
interest. Interest accruing under Clause 17.5 shall be
released to the Borrower on each Repayment Date unless an Event of Default
has occurred or the then credit balance on the Retention Account is less
than what would have been the balance had the full amount required by
Clause 17.2 (and Clause 17.3, if applicable) been transferred in that and
each previous month.
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17.7
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Location of
accounts. The Borrower shall
promptly:
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(a)
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comply
with any requirement of the Lender as to the location or re-location of
the Earnings Account and the Retention Account (or either of
them);
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(b)
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execute
any documents which the Lender specifies to create or maintain in favour
of the Lender a Security Interest over (and/or rights of set-off,
consolidation or other rights in relation to) the Retention
Account.
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17.8
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Debits for expenses
etc. The Lender shall be entitled (but not obliged) from
time to time to debit the Earnings Account without prior notice in order
to discharge any amount due and payable under Clause 19 or 20 to the
Lender or payment of which the Lender has become entitled to demand under
Clause 19 or 20.
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17.9
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Borrower’s obligations
unaffected. The provisions of this Clause 17 (as
distinct from a distribution effected under Clause 17.4) do not
affect:
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(a)
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the
liability of the Borrower to make payments of principal and interest on
the due dates; or
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(b)
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any
other liability or obligation of the Borrower or any other Security Party
under any Finance Document.
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18
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EVENTS
OF DEFAULT
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18.1
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Events of
Default. An Event of Default occurs
if:
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(a)
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the
Borrower or any other Security Party fails to pay when due or (if so
payable) on demand within 3 Business Days of such demand and any sum
payable under a Finance Document or under any document relating to a
Finance Document; or
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(b)
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any
breach occurs of Clause 8.2, 10.2, 10.3, 10.16, 11.2, 11.3 or 14.1 or
Clause 11.15 (financial covenants) of the Corporate Guarantee;
or
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(c)
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any
breach by the Borrower or any other Security Party occurs of any provision
of a Finance Document (other than a breach covered by paragraphs (a) or
(b) above) if, in the opinion of the Lender, such default is capable of
remedy, and such default continues unremedied 10 Business Days after
written notice from the Lender requesting action to remedy the same;
or
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(d)
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any
breach by the Borrower or any other Security Party occurs of any provision
of a Finance Document (other than a breach covered by paragraphs (a), (b)
or (c) above); or
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(e)
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any
representation, warranty or statement made by, or by an officer of, the
Borrower or a Security Party in a Finance Document or in a Drawdown Notice
or any other notice or document relating to a Finance Document is untrue
or misleading when it is made; or
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(f)
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any
of the following occurs in relation to any Financial Indebtedness of a
Relevant Person:
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(i)
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any
Financial Indebtedness of a Relevant Person is not paid when due or, if so
payable, on demand; or
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(ii)
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any
Financial Indebtedness of a Relevant Person becomes due and payable or
capable of being declared due and payable prior to its stated maturity
date as a consequence of any event of default;
or
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(iii)
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a
lease, hire purchase agreement or charter creating any Financial
Indebtedness of a Relevant Person is terminated by the lessor or owner or
becomes capable of being terminated as a consequence of any termination
event; or
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(iv)
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any
overdraft, loan, note issuance, acceptance credit, letter of credit,
guarantee, foreign exchange or other facility, or any swap or other
derivative contract or transaction, relating to any Financial Indebtedness
of a Relevant Person ceases to be available or becomes capable of being
terminated as a result of any event of default, or cash cover is required,
or becomes capable of being required, in respect of such a facility as a
result of any event of default; or
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(v)
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any
Security Interest securing any Financial Indebtedness of a Relevant Person
becomes enforceable; or
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(g)
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any
of the following occurs in relation to a Relevant
Person:
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(i)
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a
Relevant Person becomes, in the opinion of the Lender, unable to pay its
debts as they fall due; or
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(ii)
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any
assets of a Relevant Person are subject to any form of execution,
attachment, arrest, sequestration or distress or any form of freezing
order; or
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(iii)
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any
administrative or other receiver is appointed over any asset of a Relevant
Person; or
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(iv)
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a
Relevant Person makes any formal declaration of bankruptcy or any formal
statement to the effect that it is insolvent or likely to become
insolvent, or a winding up or administration order is made in relation to
a Relevant Person, or the members or directors of a Relevant Person pass a
resolution to the effect that it should be wound up, placed in
administration or cease to carry on business, save that this paragraph
does not apply to a fully solvent winding up of a Relevant Person other
than the Borrower or the Corporate Guarantor which is, or is to be,
effected for the purposes of an amalgamation or reconstruction previously
approved by the Lender and effected not later than 3 months after the
commencement of the winding up; or
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(v)
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a
petition is presented in any Pertinent Jurisdiction for the winding up or
administration, or the appointment of a provisional liquidator, of a
Relevant Person unless the petition is being contested in good faith and
on substantial grounds and is dismissed or withdrawn within 30 days of the
presentation of the petition; or
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(vi)
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a
Relevant Person petitions a court, or presents any proposal for, any form
of judicial or non-judicial suspension or deferral of payments,
reorganisation of its debt (or certain of its debt) or arrangement with
all or a substantial proportion (by number or value) of its creditors or
of any class of them or any such suspension or deferral of payments,
reorganisation or arrangement is effected by court order, contract or
otherwise; or
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(vii)
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any
meeting of the members or directors of a Relevant Person is summoned for
the purpose of considering a resolution or proposal to authorise or take
any action of a type described in paragraphs (iii), (iv), (v) or (vi)
above; or
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(viii)
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in
a Pertinent Jurisdiction other than England, any event occurs or any
procedure is commenced which, in the opinion of the Lender, is similar to
any of the foregoing; or
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(h)
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the
Borrower ceases or suspends carrying on its business or a part of its
business which, in the opinion of the Lender, is material in the context
of this Agreement; or
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(i)
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it
becomes unlawful in any Pertinent Jurisdiction or
impossible:
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(i)
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for
the Borrower or any other Security Party to discharge any liability under
a Finance Document or to comply with any other obligation which the Lender
considers material under a Finance Document;
or
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(ii)
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for
the Lender to exercise or enforce any right under, or to enforce any
Security Interest created by, a Finance Document;
or
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(j)
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any
official consent necessary to enable the Borrower to own, operate or
charter the Ship or to enable the Borrower or any other Security Party to
comply with any provision which the Lender considers material of a Finance
Document or the Shipbuilding Contract is not granted, expires without
being renewed, is revoked or becomes liable to revocation or any condition
of such a consent is not fulfilled;
or
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(k)
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it
appears to the Lender that, without its prior consent, a change has
occurred or probably has occurred after the date of this Agreement in the
ownership of any of the shares in the Borrower or any other Security Party
or in the ultimate control of the voting rights attaching to any of those
shares or in the management of the Borrower;
or
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(l)
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any
provision which the Lender considers material of a Finance Document proves
to have been or becomes invalid or unenforceable, or a Security Interest
created by a Finance Document proves to have been or becomes invalid or
unenforceable or such a Security Interest proves to have ranked after, or
loses its priority to, another Security Interest or any other third party
claim or interest; or
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(m)
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the
security constituted by a Finance Document is in any way imperilled or in
jeopardy; or
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(n)
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any
other event occurs or any other circumstances arise or develop including,
without limitation:
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(i)
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a
change in the financial position, state of affairs or prospects of the
Borrower, the Corporate Guarantor or the Group;
or
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(ii)
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any
accident or other event involving the Ship or another vessel owned,
chartered or operated by a Relevant
Person
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in
the light of which the Lender considers that there is a significant risk
that the Borrower or any other Security Party is, or will later become,
unable to discharge its liabilities under the Finance Documents as they
fall due.
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18.2
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Actions following an Event of
Default. On, or at any time after, the occurrence of an
Event of Default:
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(a)
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the
Lender may:
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(i)
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serve
on the Borrower a notice stating that the obligations of the Lender to the
Borrower under this Agreement are terminated;
and/or
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(ii)
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serve
on the Borrower a notice stating that the Loan, all accrued interest and
all other amounts accrued or owing under this Agreement are immediately
due and payable or are due and payable on demand;
and/or
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(iii)
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take
any other action which, as a result of the Event of Default or any notice
served under paragraph (i) or (ii) above, the Lender is entitled to take
under any Finance Document or any applicable law;
and/or
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(b)
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the
Lender may take any action which, as a result of the Event of Default or
any notice served under paragraph (a) (i) or (ii) above, the Lender is
entitled to take under any Finance Document or any applicable
law.
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18.3
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Termination of
obligations. On the service of a notice under
Clause 18.2(a), all the obligations of the Lender to the Borrower
under this Agreement shall
terminate.
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18.4
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Acceleration of
Loan. On the service of a notice under
Clause 18.2(b), the Loan, all accrued interest and all other amounts
accrued or owing from the Borrower or any other Security Party under this
Agreement and every other Finance Document shall become immediately due
and payable or, as the case may be, payable on
demand.
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18.5
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Multiple notices; action
without notice. The Lender may serve notices under
Clause 18.2 (a) and (b) simultaneously or on different dates and it
may take any action referred to in Clause 18.2 if no such notice is served
or simultaneously with or at any time after the service of both or either
of such notices.
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18.6
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Exclusion of Lender
liability. Neither the Lender nor any receiver or
manager appointed by the Lender, shall have any liability to the Borrower
or a Security Party:
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(a)
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for
any loss caused by an exercise of rights under, or enforcement of a
Security Interest created by, a Finance Document or by any failure or
delay to exercise such a right or to enforce such a Security Interest;
or
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(b)
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as
mortgagee in possession or otherwise, for any income or principal amount
which might have been produced by or realised from any asset comprised in
such a Security Interest or for any reduction (however caused) in the
value of such an asset;
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except
that this does not exempt the Lender or a receiver or manager from liability for
losses shown to have been caused directly and mainly by the dishonesty or the
wilful misconduct of the Lender's own officers and employees or (as the case may
be) such receiver's or manager's own partners or employees.
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18.7
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Interpretation. In
Clause 18.1(f) references to an event of default or a termination
event include any event, howsoever described, which is similar to an event
of default in a facility agreement or a termination event in a finance
lease; and in Clause 18.1(g) “petition” includes an
application.
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19
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FEES
AND EXPENSES
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19.1
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Arrangement and commitment
fees. The Borrower shall pay to the
Lender:
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(a)
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on
the date of this Agreement a non-refundable arrangement fee of $66,350;
and
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(b)
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quarterly
in arrears during the period from (and including) date of this Agreement
to the earlier of (i) the Drawdown Date in respect of the Sixth Advance
and (ii) the last day of the Availability Period and on the last day of
that period, a non-refundable commitment fee equal to 0.20 per cent. per
annum of the undrawn amount of the
Loan.
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19.2
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Costs of negotiation,
preparation etc. The Borrower shall pay to the Lender on
its demand the amount of all expenses incurred by the Lender in connection
with the negotiation, preparation, execution or registration of any
Finance Document or any related document or with any transaction
contemplated by a Finance Document or a related
document.
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19.3
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Costs of variation, amendments,
enforcement etc. The Borrower shall pay to the Lender,
on the Lender’s demand, the amount of all expenses incurred by the Lender
in connection with:
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(a)
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any
amendment or supplement to a Finance Document, or any proposal for such an
amendment to be made;
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(b)
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any
consent or waiver by the Lender under or in connection with a Finance
Document, or any request for such a consent or
waiver;
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(c)
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the
valuation of any security provided or offered under Clause 14 or any
other matter relating to such
security;
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(d)
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the
opinions of the independent insurance consultant referred to in paragraph
7 of Part C of Schedule 2; or
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(e)
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any
step taken by the Lender with a view to the protection, exercise or
enforcement of any right or Security Interest created by a Finance
Document or for any similar
purpose.
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| There shall be recoverable under paragraph (e) the full amount of all legal expenses, whether or not such as would be allowed under rules of court or any taxation or other procedure carried out under such rules. |
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19.4
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Documentary
taxes. The Borrower shall promptly pay any tax payable
on or by reference to any Finance Document, and shall, on the Lender’s
demand, fully indemnify the Lender against any claims, expenses,
liabilities and losses resulting from any failure or delay by the Borrower
to pay such a tax.
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19.5
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Certification of
amounts. A notice which is signed by an authorised
officer of the Lender, which states that a specified amount, or aggregate
amount, is due to that Lender under this Clause 19 and which
indicates (without necessarily specifying a detailed breakdown) the
matters in respect of which the amount, or aggregate amount, is due shall
be prima facie evidence that the amount, or aggregate amount, is
due.
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20
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INDEMNITIES
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20.1
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Indemnities regarding borrowing
and repayment of Loan. The Borrower shall fully
indemnify the Lender on its demand in respect of all claims, expenses,
liabilities and losses which are made or brought against or incurred by
the Lender, or which the Lender reasonably and with due diligence
estimates that it will incur, as a result of or in connection
with:
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(a)
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an
Advance not being borrowed on the date specified in the Drawdown Notice
for any reason other than a default by the
Lender;
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(b)
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the
receipt or recovery of all or any part of the Loan or an overdue sum
otherwise than on the last day of an Interest Period or other relevant
period;
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(c)
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any
failure (for whatever reason) by the Borrower to make payment of any
amount due under a Finance Document on the due date or, if so payable, on
demand (after giving credit for any default interest paid by the Borrower
on the amount concerned under
Clause 6;
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(d)
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the
occurrence and/or continuance of an Event of Default and/or the
acceleration of repayment of the Loan under
Clause 18,
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| and in respect of any tax (other than tax on its overall net income) for which the Lender is liable in connection with any amount paid or payable to the Lender (whether for its own account or otherwise) under any Finance Document. |
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20.2
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Breakage
costs. Without limiting its generality, Clause 20.1
covers any claim, expense, liability or loss incurred by the
Lender:
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(a)
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in
liquidating or employing deposits from third parties acquired or arranged
to fund or maintain all or any part of the Loan and/or any overdue amount
(or an aggregate amount which includes the Loan or any overdue amount);
and
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(b)
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in
terminating, or otherwise in connection with, any interest and/or currency
swap or any other transaction entered into (whether with another legal
entity or with another office or department of the Lender) to hedge any
exposure arising under this Agreement or a number of transactions of which
this Agreement is one.
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20.3
|
Miscellaneous
indemnities. The Borrower shall fully indemnify the
Lender on its respective demands in respect of all claims, demands,
proceedings, liabilities, taxes, losses and expenses of every kind (“liability items”) which
may be made or brought against, or incurred by, the Lender in any country,
in relation to:
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(a)
|
any
action taken, or omitted or neglected to be taken, under or in connection
with any Finance Document by the Lender or by any receiver appointed under
a Finance Document;
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(b)
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any
other event, matter or question which occurs or arises at any time during
the Security Period and which has any connection with, or any bearing on,
any Finance Document, any payment or other transaction relating to a
Finance Document or any asset covered (or previously covered) by a
Security Interest created (or intended to be created) by a Finance
Document,
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| other than liability items which are shown to have been caused by the gross negligence or the wilful misconduct of the Lender's or (as the case may be) the Lender’s own officers or employees. |
| Without prejudice to its generality, this Clause 20.3 covers any claims, expenses, liabilities and losses which arise, or are asserted, under or in connection with any law relating to safety at sea, the ISM Code, the ISPS Code, or any Environmental law. |
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20.4
|
Currency
indemnity. If any sum due from the Borrower or any other
Security Party to the Lender under a Finance Document or under any order
or judgment relating to a Finance Document has to be converted from the
currency in which the Finance Document provided for the sum to be paid
(the “Contractual
Currency”) into another currency (the “Payment Currency”) for
the purpose of:
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(a)
|
making
or lodging any claim or proof against the Borrower or any other Security
Party, whether in its liquidation, any arrangement involving it or
otherwise; or
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|
(b)
|
obtaining
an order or judgment from any court or other tribunal;
or
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|
(c)
|
enforcing
any such order or judgment,
|
| the Borrower shall indemnify the Lender against the loss arising when the amount of the payment actually received by the Lender is converted at the available rate of exchange into the Contractual Currency. |
| In this Clause 20.4, the “available rate of exchange” means the rate at which the Lender is able at the opening of business (London time) on the Business Day after it receives the sum concerned to purchase the Contractual Currency with the Payment Currency. |
| This Clause 20.4 creates a separate liability of the Borrower which is distinct from its other liabilities under the Finance Documents and which shall not be merged in any judgment or order relating to those other liabilities. |
|
20.5
|
Certification of
amounts. A notice which is signed by two authorised
officers of the Lender, which states that a specified amount, or aggregate
amount, is due to the Lender under this Clause 20 and which indicates
(without necessarily specifying a detailed breakdown) the matters in
respect of which the amount, or aggregate amount, is due shall be prima
facie evidence that the amount, or aggregate amount, is
due.
|
|
21
|
NO
SET-OFF OR TAX DEDUCTION
|
|
21.1
|
No
deductions. All amounts due from the Borrower under a
Finance Document shall be paid:
|
|
(a)
|
without
any form of set-off, cross-claim or condition;
and
|
|
(b)
|
free
and clear of any tax deduction except a tax deduction which the Borrower
is required by law to make.
|
|
21.2
|
Grossing-up for
taxes. If the Borrower is required by law to make a tax
deduction from any payment:
|
|
(a)
|
the
Borrower shall notify the Lender as soon as it becomes aware of the
requirement;
|
|
(b)
|
the
Borrower shall pay the tax deducted to the appropriate taxation authority
promptly, and in any event before any fine or penalty
arises;
|
|
(c)
|
the
amount due in respect of the payment shall be increased by the amount
necessary to ensure that the Lender receives and retains (free from any
liability relating to the tax deduction) a net amount which, after the tax
deduction, is equal to the full amount which it would otherwise have
received.
|
|
21.3
|
Evidence of payment of
taxes. Within one month after making any tax deduction,
the Borrower shall deliver to the Lender documentary evidence satisfactory
to the Lender that the tax had been paid to the appropriate taxation
authority.
|
|
21.4
|
Exclusion of tax on overall net
income. In this Clause 21 “tax deduction” means any
deduction or withholding for or on account of any present or future tax
except tax on the Lender's overall net
income.
|
|
22
|
ILLEGALITY,
ETC
|
|
22.1
|
Illegality. This
Clause 22 applies if the Lender notifies the Borrower that it has
become, or will with effect from a specified date,
become:
|
|
(a)
|
unlawful
or prohibited as a result of the introduction of a new law, an amendment
to an existing law or a change in the manner in which an existing law is
or will be interpreted or applied;
or
|
|
(b)
|
contrary
to, or inconsistent with, any
regulation,
|
| for the Lender to maintain or give effect to any of its obligations under this Agreement in the manner contemplated by this Agreement or any of the Finance Documents. |
| 22.2 | Notification and effect of illegality. On the Lender notifying the Borrower under Clause 22.1, the Lender's obligation to make any further Advance available to the Borrower shall terminate; and thereupon or, if later, on the date specified in the Lender's notice under |
| Clause 22.1 as the date on which the notified event would become effective the Borrower shall prepay the Loan in full in accordance with Clause 7. |
|
22.3
|
Mitigation. If
circumstances arise which would result in a notification under
Clause 22.1 then, without in any way limiting the rights of the
Lender under Clause 22.3, the Lender shall use reasonable endeavours
to transfer its obligations, liabilities and rights under this Agreement
and the Finance Documents to another office or financial institution not
affected by the circumstances but the Lender shall not be under any
obligation to take any such action if, in its opinion, to do would or
might:
|
|
(a)
|
have
an adverse effect on its business, operations or financial condition;
or
|
|
(b)
|
involve
it in any activity which is unlawful or prohibited or any activity that is
contrary to, or inconsistent with, any regulation;
or
|
|
(c)
|
involve
it in any expense (unless indemnified to its satisfaction) or tax
disadvantage.
|
|
23
|
INCREASED
COSTS
|
|
23.1
|
Increased
costs. This Clause 23 applies if the Lender notifies the
Borrower that it considers that as a result
of:
|
|
(a)
|
the
introduction or alteration after the date of this Agreement of a law or an
alteration after the date of this Agreement in the manner in which a law
is interpreted or applied (disregarding any effect which relates to the
application to payments under this Agreement of a tax on the Lender's
overall net income); or
|
|
(b)
|
the
effect of complying with any regulation (including any which relates to
capital adequacy or liquidity controls or which affects the manner in
which the Lender allocates capital resources to its obligations under this
Agreement) which is introduced, or altered, or the interpretation or
application of which is altered, after the date of this
Agreement,
|
|
|
is
that the Lender (or a parent company of it) has incurred or will incur an
“increased cost”, that is to say:
|
|
|
(i)
|
an
additional or increased cost incurred as a result of, or in connection
with, the Lender having entered into, or being a party to, this Agreement
of funding or maintaining the Loan or performing its obligations under
this Agreement, or of having outstanding all or any part of the Loan or
other unpaid sums; or
|
|
|
(ii)
|
a
reduction in the amount of any payment to the Lender under this Agreement
or in the effective return which such a payment represents to the Lender
or on its capital;
|
|
|
(iii)
|
an
additional or increased cost of funding all or maintaining all or any of
the advances comprised in a class of advances formed by or including the
Loan or (as the case may require) the proportion of that cost attributable
to the Loan; or
|
|
|
(iv)
|
a
liability to make a payment, or a return foregone, which is calculated by
reference to any amounts received or receivable by the Lender under this
Agreement,
|
|
|
but
not an item attributable to a change in the rate of tax on the overall net
income of the Lender (or a parent company of it) or an item covered by the
indemnity for tax in Clause 20.1 or by Clause
21.
|
| For the purposes of this Clause 23.1 the Lender may in good faith allocate or spread costs and/or losses among its assets and liabilities (or any class thereof) on such basis as it considers appropriate. |
|
23.2
|
Payment of increased
costs. The Borrower shall pay to the Lender, on the
Lender's demand, for the account of the Lender the amounts which the
Lender from time to time notifies the Borrower that it has specified to be
necessary to compensate the Lender for the increased
cost.
|
|
23.3
|
Notice of
prepayment. If the Borrower is not willing to continue
to compensate the Lender for the increased cost under Clause 23.2, the
Borrower may give the Lender not less than 14 days' notice of their
intention to prepay the Loan at the end of an Interest
Period.
|
|
23.4
|
Prepayment. A
notice under Clause 23.3 shall be irrevocable and on the date specified in
its notice of intended prepayment, the Borrower shall prepay (without
premium or penalty) the Loan, together with accrued interest thereon at
the applicable rate plus the applicable
Margin.
|
|
23.5
|
Application of
prepayment. Clause 7 shall apply in relation to the
prepayment.
|
|
24
|
SET-OFF
|
|
24.1
|
Application of credit
balances. The Lender may without prior
notice:
|
|
(a)
|
apply
any balance (whether or not then due) which at any time stands to the
credit of any account in the name of the Borrower at any office in any
country of the Lender in or towards satisfaction of any sum then due from
the Borrower to the Lender under any of the Finance Documents;
and
|
|
(b)
|
for
that purpose:
|
|
|
(i)
|
break,
or alter the maturity of, all or any part of a deposit of the
Borrower;
|
|
|
(ii)
|
convert
or translate all or any part of a deposit or other credit balance into
Dollars;
|
|
|
(iii)
|
enter
into any other transaction or make any entry with regard to the credit
balance which the Lender considers
appropriate.
|
|
24.2
|
Existing rights
unaffected. The Lender shall not be obliged to exercise
any of its rights under Clause 24.1; and those rights shall be
without prejudice and in addition to any right of set-off, combination of
accounts, charge, lien or other right or remedy to which the Lender is
entitled (whether under the general law or any
document).
|
|
24.3
|
No Security
Interest. This Clause 24 gives the Lender a contractual
right of set-off only, and does not create any equitable charge or other
Security Interest over any credit balance of the
Borrower.
|
|
25
|
TRANSFERS
AND CHANGES IN LENDING OFFICES
|
|
25.1
|
Transfer by
Borrower. The Borrower may not transfer any of its
rights, liabilities or obligations under any Finance
Document.
|
|
25.2
|
Assignment by
Lender. The Lender may assign or transfer all or any of
the rights and interests which it has under or by virtue of the Finance
Documents by giving notice to the
Borrower.
|
|
25.3
|
Rights of
assignee. In respect of any breach of a warranty,
undertaking, condition or other provision of a Finance Document, or any
misrepresentation made in or in connection with a Finance Document, a
direct or indirect assignee of any of the Lender's rights or interests
under or by virtue of the Finance Documents shall be entitled to recover
damages by reference to the loss incurred by that assignee as a result of
the breach or misrepresentation irrespective of whether the Lender would
have incurred a loss of that kind or
amount.
|
|
25.4
|
Sub-participation; subrogation
assignment. The Lender may sub-participate all or any
part of its rights and/or obligations under or in connection with the
Finance Documents without the consent of the Borrower and the Lender may
assign, in any manner and terms agreed by it, all or any part of those
rights to an insurer or surety who has become subrogated to
them.
|
|
25.5
|
Disclosure of
information. The Lender may disclose to a potential
assignee or sub-participant any information which the Lender has received
in relation to the Borrower, any other Security Party or their affairs
under or in connection with any Finance Document, unless the information
is clearly of a confidential
nature.
|
|
25.6
|
Change of lending
office. The Lender may change its lending office by
giving notice to the Borrower and the change shall become effective on the
later of:
|
|
(a)
|
the
date on which the Borrower receives the notice;
and
|
|
(b)
|
the
date, if any, specified in the notice as the date on which the change will
come into effect.
|
|
26
|
VARIATIONS
AND WAIVERS
|
|
26.1
|
Variations, waivers etc. by
Lender. A document shall be effective to vary, waive,
suspend or limit any provision of a Finance Document, or the Lender's
rights or remedies under such a provision or the general law, only if the
document is signed, or specifically agreed to by fax or telex, by the
Borrower and the Lender and, if the document relates to a Finance Document
to which a Security Party is party, by that Security
Party.
|
|
26.2
|
Exclusion of other or implied
variations. Except for a document which satisfies the
requirements of Clause 26.1, no document, and no act, course of
conduct, failure or neglect to act, delay or acquiescence on the part of
the Lender (or any person acting on its behalf) shall result in the Lender
(or any person acting on its behalf) being taken to have varied, waived,
suspended or limited, or being precluded (permanently or temporarily) from
enforcing, relying on or
exercising:
|
|
(a)
|
a
provision of this Agreement or another Finance Document;
or
|
|
(b)
|
an
Event of Default; or
|
|
(c)
|
a
breach by the Borrower or a Security Party of an obligation under a
Finance Document or the general law;
or
|
|
(d)
|
any
right or remedy conferred by any Finance Document or by the general
law;
|
| and there shall not be implied into any Finance Document any term or condition requiring any such provision to be enforced, or such right or remedy to be exercised, within a certain or reasonable time |
|
27
|
NOTICES
|
|
27.1
|
General. Unless
otherwise specifically provided, any notice under or in connection with
any Finance Document shall be given by letter or fax and references in the
Finance Documents to written notices, notices in writing and notices
signed by particular persons shall be construed
accordingly.
|
|
27.2
|
Addresses for
communications. A notice shall be
sent:
|
|
(a)
|
to
the Borrower:
|
00
Xxxxxxxx Xx.
|
|
|
|
Xxxxxxx
|
|
|
Xxxxxx
|
|
|
Attention
of:
|
Xxxxxxxxx
Xxxxxxxxxxx - Executive Vice
President
|
|
|
Fax
No: x00 000 000 0000
|
|
(b)
|
to
the Lender:
|
The
National Bank of Greece S.A.
|
|
| 0 Xxxxxxxxxxx Xxxxxx & Xxxx Xxxxxxx | |||
| 000 00 Xxxxxxx | |||
| Xxxxxx | |||
|
Fax
No: x00 000 000 0000
|
| or to such other address as the relevant party may notify the Lender or, if the relevant party is the Lender, the Borrower, the Lender and the Security Parties. |
|
27.3
|
Effective date of
notices. Subject to Clauses 27.4 and
27.5:
|
|
(a)
|
a
notice which is delivered personally or posted shall be deemed to be
served, and shall take effect, at the time when it is
delivered;
|
|
(b)
|
a
notice which is sent by fax shall be deemed to be served, and shall take
effect, 2 hours after its transmission is
completed.
|
|
27.4
|
Service outside business
hours. However, if under Clause 27.3 a notice would
be deemed to be served:
|
|
(a)
|
on
a day which is not a Business Day in the place of receipt;
or
|
|
(b)
|
on
such a Business Day, but after 5 p.m. local
time;
|
| the notice shall (subject to Clause 27.5) be deemed to be served, and shall take effect, at 9 a.m. on the next day which is such a business day. |
|
27.5
|
Illegible
notices. Clauses 27.4 and 27.4 do not apply if the
recipient of a notice notifies the sender within 1 hour after the time at
which the notice would otherwise be deemed to be served that the notice
has been received in a form which is illegible in a material
respect.
|
|
27.6
|
Valid
notices. A notice under or in connection with a Finance
Document shall not be invalid by reason that its contents or the manner of
serving it do not comply with the requirements of this Agreement or, where
appropriate, any other Finance Document under which it is served
if:
|
|
(a)
|
the
failure to serve it in accordance with the requirements of this Agreement
or other Finance Document, as the case may be, has not caused any party to
suffer any significant loss or prejudice;
or
|
|
(b)
|
in
the case of incorrect and/or incomplete contents, it should have been
reasonably clear to the party on which the notice was served what the
correct or missing particulars should have
been.
|
|
27.7
|
English
language. Any notice under or in connection with a
Finance Document shall be in
English.
|
|
27.8
|
Meaning of
“notice”. In this Clause 27 “notice” includes any
demand, consent, authorisation, approval, instruction, waiver or other
communication.
|
|
28
|
SUPPLEMENTAL
|
|
28.1
|
Rights cumulative,
non-exclusive. The rights and remedies which the Finance
Documents give to the Lender are:
|
|
(a)
|
cumulative;
|
|
(b)
|
may
be exercised as often as appears expedient;
and
|
|
(c)
|
shall
not, unless a Finance Document explicitly and specifically states so, be
taken to exclude or limit any right or remedy conferred by any
law.
|
|
28.2
|
Severability of
provisions. If any provision of a Finance Document is or
subsequently becomes void, unenforceable or illegal, that shall not affect
the validity, enforceability or legality of the other provisions of that
Finance Document or of the provisions of any other Finance
Document.
|
|
28.3
|
Counterparts. A
Finance Document may be executed in any number of
counterparts.
|
|
28.4
|
Third party
rights. A person who is not a party to this Agreement
has no right under the Contracts (Rights of Third Parties) Xxx 0000 to
enforce or to enjoy the benefit of any term of this
Agreement.
|
|
29
|
LAW
AND JURISDICTION
|
|
29.1
|
English
law. This Agreement shall be governed by, and construed
in accordance with, English law.
|
|
29.2
|
Exclusive English
jurisdiction. Subject to Clause 29.3, the courts of
England shall have exclusive jurisdiction to settle any disputes which may
arise out of or in connection with this
Agreement.
|
|
29.3
|
Choice of forum for the
exclusive benefit of the Lender. Clause 29.2 is for the
exclusive benefit of the Lender, each of which reserves the
right:
|
|
(a)
|
to
commence proceedings in relation to any matter which arises out of or in
connection with this Agreement in the courts of any country other than
England and which have or claim jurisdiction to that matter;
and
|
|
(b)
|
to
commence such proceedings in the courts of any such country or countries
concurrently with or in addition to proceedings in England or without
commencing proceedings in England.
|
| No Borrower shall commence any proceedings in any country other than England in relation to a matter which arises out of or in connection with this Agreement. |
|
29.4
|
Process
Agent. The Borrower irrevocably appoints Hill Xxxxxxxxx
Services Limited at its office for the time being, presently at Xxxxxxxx
Xxxxx, 0 Xxxx’s Place, London EC3A 7LP, England to act as its agent to
receive and accept on its behalf any process or other document relating to
any proceedings in the English courts which are connected with this
Agreement.
|
|
29.5
|
Lender’s rights
unaffected. Nothing in this Clause 29 shall exclude or
limit any right which the Lender may have (whether under the law of any
country, an international convention or otherwise) with regard to the
bringing of proceedings, the service of process, the recognition or
enforcement of a judgment or any similar or related matter in any
jurisdiction.
|
|
29.6
|
Meaning of
“proceedings”. In this Clause 29, “proceedings” means
proceedings of any kind, including an application for a provisional or
protective measure.
|
THIS AGREEMENT has been
entered into on the date stated at the beginning of this Agreement.
EXECUTION
PAGE
|
BORROWER
|
|||
|
SIGNED
by
|
)
|
||
|
for
and on behalf of
|
)
|
||
|
SUNRAY
NAVIGATION INC.
|
)
|
||
|
in
the presence of:
|
)
|
||
|
LENDER
|
|||
|
SIGNED
by
|
)
|
||
|
for
and on behalf of
|
)
|
||
|
NATIONAL
BANK OF GREECE S.A.
|
)
|
||
|
in
the presence of:
|
)
|
SCHEDULE
1
DRAWDOWN
NOTICE
To: National
Bank of Greece S.A.
Administration, Shipping
Division
0 Xxxxxxxxxxx Xxxxxx & Akti
Xxxxxxx
XX 000 00 Xxxxxxx
Xxxxxx
Attention:
Shipping Department
2007
DRAWDOWN
NOTICE
|
1
|
We
refer to the loan agreement (the “Loan Agreement”)
dated 2007
and made between ourselves, as Borrower, and yourselves, as Lender, in
connection with a facility of up to $33,176,250. Terms defined
in the Loan Agreement have their defined meanings when used in this
Drawdown Notice.
|
|
2
|
We
request to borrow the [l]Advance as
follows:
|
|
(a)
|
Amount
of Advance: $[l].
|
|
(b)
|
Drawdown
Date: [ ]
200[l].
|
|
(c)
|
Duration
of the first Interest Period shall be [l]
months;
|
|
(d)
|
Payment
instructions : account of [l] and numbered
[l] with
[l] of [l].
|
|
3
|
We
represent and warrant that:
|
|
(a)
|
the
representations and warranties in Clause 9 of the Loan Agreement
would remain true and not misleading if repeated on the date of this
notice with reference to the circumstances now
existing;
|
|
(b)
|
no
Event of Default has occurred or will result from the borrowing of the
Loan.
|
|
4
|
This
notice cannot be revoked without the prior consent of the
Lender.
|
|
5
|
We
authorise you to deduct from the amount of the Advance all accrued but
unpaid fees payable pursuant to Clause
19.1.
|
.................................................
For
and on behalf of
SUNRAY
NAVIGATION INC.
SCHEDULE
2
CONDITION
PRECEDENT DOCUMENTS
PART
A
The
following are the documents referred to in Clause 8.1(a).
|
1
|
A
duly executed original of this Agreement, the Corporate Guarantee and the
Predelivery Security Assignment (and of each document required to be
delivered pursuant thereto).
|
|
2
|
Copies
of the certificate of incorporation and constitutional documents of the
Borrower and each Security Party.
|
|
3
|
Copies
of resolutions of the shareholders and directors of the Borrower and each
Security Party authorising the execution of each of the Finance Documents
referred to at paragraph 1 above to which the Borrower and that Security
Party is a party and, in the case of the Borrower, authorising named
officers to give the Drawdown Notices and other notices under this
Agreement and ratifying the execution of the Shipbuilding Contract or the
Refund Guarantee.
|
|
4
|
The
original of any power of attorney under which any Finance Document
referred to at paragraph 1 above is executed on behalf of the Borrower and
each Security Party.
|
|
5
|
Copies
of all consents which the Borrower or any other Security Party requires to
enter into, or make any payment under, any Finance Document or the
Shipbuilding Contract or the Refund
Guarantee.
|
|
6
|
Copies
of the Shipbuilding Contract and of all documents signed or issued by the
Borrower or the Builder (or any of them) under or in connection with the
Shipbuilding Contract, each to be in a form acceptable to the
Lender.
|
|
7
|
The
original Refund Guarantee, to be in a form and on terms acceptable to the
Lender and its legal advisers.
|
|
8
|
A
duly issued invoice from the Builder showing all sums due and payable to
the Builder pursuant to Article X, 2(a) of the Shipbuilding
Contract.
|
|
9
|
Documentary
evidence that the full amount of the instalment payable pursuant to
Article X, 2(a) of the Shipbuilding Contract has been paid to and received
by the Builder.
|
|
10
|
A
Material Adverse Charge Warranty Letter duly signed by the Borrower and
the Corporate Guarantor.
|
|
11
|
Evidence
that the Borrower is a wholly owned subsidiary of the Corporate
Guarantor.
|
|
12
|
Documentary
evidence that the agent for service of process named in Clause 29 has
accepted its appointment.
|
|
13
|
Favourable
legal opinions from lawyers appointed by the Lender on such matters
concerning the laws of the Republic of the Xxxxxxxx Xxxxxxx xxx xxx
Xxxxxxxx xx Xxxxx Xxxxx and such other relevant jurisdictions as the
Lender may require.
|
|
14
|
If
the Lender so requires, in respect of any of the documents referred to
above, a certified English translation prepared by a translator approved
by the Lender.
|
PART
B
The
following are the documents referred to in Clause 8.1(b)
|
1
|
Documentary
evidence that the steel of the Ship has been cut (in the case of the Third
Advance) the keel of the Ship has been laid (in the case of the Fourth
Advance) or that the Ship has been launched (in the case of the Fifth
Advance).
|
|
2
|
A
duly issued invoice from the Builder showing all sums due and payable to
the Builder pursuant to the Shipbuilding Contract in respect of the
instalment payable pursuant to Article X, 2(c) of the Shipbuilding
Contract, upon the steel-cutting of the Ship (in the case of the the Third
Advance), Article X, 2(d) upon the keel-laying of the Ship (in the case of
the Fourth Advance) or Article X, 2(e) upon launching of the Ship (in the
case of the Fifth Advance) (as the case may
be).
|
|
3
|
Stage
certificates issued by such classification society as the Lender may
approve in a form acceptable to the Lender, confirming that the building
works carried out up to and including the steel-cutting of the Ship (in
the case of the Third Advance), the keel-laying of the Ship (in the case
of the Fourth Advance) or launching of the Ship (in the case of the Fifth
Advance) (as the case may be) have been completed to the satisfaction of
such classification society;
|
|
4
|
Documentary
evidence that the full amount of the relevant instalment due under Article
X, 2(b) (in the case of the Second Advance), Article X, 2(c)
(in the case of the Third Advance), Article X 2(d) (in the case of the
Fourth Advance) and Article X, 2(e) (in the case of the Fifth Advance) of
the Shipbuilding Contract (in addition to the part to be financed by the
relevant Advance) has been duly
paid.
|
|
5
|
A
Material Adverse Change Warranty Letter duly signed by the
Borrower.
|
|
6
|
Except
in the case of the First Advance and the Second Advance written
confirmation from the Borrower and the Approved Manager that they have
irrevocably accepted and approved the building works which have been
completed on the Ship up to the date of her steel-cutting, keel-laying or
launching as the case may be.
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PART
C
The
following are the documents referred to in Clause 8.1(c).
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1
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A
duly executed original of each of the Mortgage, the Retention Account
Pledge, the General Assignment and any Charterparty Assignment (and of
each document to be delivered pursuant to each of
them).
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2
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Documentary
evidence that:
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(a)
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the
Ship has been unconditionally delivered by the Builder to, and accepted by
the Borrower under the Shipbuilding Contract, and the full purchase price
payable under the Shipbuilding Contract (in addition to the part (if any)
to be financed by the Sixth Advance) has been duly paid, together with a
copy of each of the documents to be delivered by the Builder to the
Borrower under the Shipbuilding Contract (including but not limited to,
the Builder’s certificate, the xxxx of sale, the commercial invoice and
the protocol of delivery and
acceptance);
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(b)
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the
Ship is definitively and permanently registered in the name of the
Borrower under an Approved Flag;
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(c)
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the
Ship is in the absolute and unencumbered ownership of the Borrower save as
contemplated by the Finance Documents to which the Borrower is a
party;
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(d)
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the
Ship maintains the classification specified in Clause 13.3(b) with
American Bureau of Shipping or any other classification
society, approved by the Lender, which is a member of IACS, free of any
outstanding or overdue recommendations and conditions of such
classification society affecting the Ship’s
class;
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(e)
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the
Mortgage has been duly registered against the Ship as a valid first
preferred or priority ship mortgage in accordance with the laws of the
applicable Approved Flag State; and
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(f)
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the
Ship is insured in accordance with the provisions of this Agreement and
all requirements therein in respect of insurances have been complied
with.
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3
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A
duly issued invoice from the Builder showing all sums due and payable to
the Builder pursuant to Article X, 2(f) of the Shipbuilding Contract upon
delivery of the Ship.
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4
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Evidence
that the part of the instalment payable pursuant to Article X, 2(f) of the
Shipbuilding Contract which is not to be financed by the Sixth Advance has
been remitted by the Lender to the
Builder.
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5
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Documents
establishing that the Ship will, as from the relevant Delivery Date, be
managed by the Approved Manager on terms acceptable to the Lender,
together with:
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(a)
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the
Approved Manager’s Undertaking in relation to the Ship duly signed by the
Approved Manager and the Material Adverse Change Warranty Letter duly
signed by the Borrower;
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(b)
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copies
of the Approved Manager’s document of compliance (DOC) and the safety
management certificate (SMC) in respect of the Ship referred to in
paragraph (a) of the definition of the ISM Code Documentation certified as
true and in effect by the Borrower and the Approved Manager;
and
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(c)
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a
copy of the International Ship Security Certificate in respect of the Ship
certified as true and in effect by the Borrower and the Approved
Manager.
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6
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Two
valuations of the Ship (at the cost of the Borrower), each from an
independent sale and purchase shipbroker appointed by the Lender dated not
earlier than 10 days before the Drawdown Date of the Sixth Advance
applicable to the Ship and prepared in accordance with Clause
14.4.
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7
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Favourable
opinions from an independent insurance consultant acceptable to the Lender
on such matters relating to the insurances for the Ship as the Lender may
require.
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8
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Favourable
legal opinions from lawyers appointed by the Lender on such matters
concerning the laws of the applicable Approved Flag State and such other
relevant jurisdictions as the Lender may
require.
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9
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The
originals of any mandates or other documents required in connection with
the opening of operation of the Earnings Account and the Retention
Account.
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Every
copy document delivered under this Schedule shall be certified as a true and up
to date copy by a director or the secretary (or equivalent officer) of the
Borrower.
SK
23286 0002 890397
