Date 17 May 2006
MATRIX GAS TRADING LTD., VCM TRADING LTD.,
GENEVE BUTANE INC., LPGONE LTD.,
SEMICHLAUS EXPORTS LTD., VENTSPILS GASES LTD.,
PACIFIC GASES LTD., ARACRUZ TRADING LTD.,
INDUSTRIAL MATERIALS INC., ENERGETIC PENINSULA LIMITED,
OXFORDGAS LIMITED, OCEAN BLUE LIMITED AND STEALTHGAS INC.
as joint and several borrowers
- and -
FORTIS BANK N.V./S.A.
as Lender
----------
LOAN AGREEMENT
----------
relating to a US$79,850,000 facility to (a) refinance the
existing indebtedness secured on the LPG carriers "GAS
AMAZON", "GAS ARCTIC", "GAS ICE", "XXXXXX
XXXXX", "GAS EMPEROR", "GAS COURCHEVEL",
"GAS SHANGHAI", "GAS PROPHET" and "GAS
TINY" and (b) finance part of the acquisition costs of the
LPG carriers "LYNE", " SIR IVOR" and "GAS HOPE
M." (tbr "GAS NEMESIS")
XXXXXX, XXXXXX & XXXXXXXX
PIRAEUS
INDEX
CLAUSE PAGE
------ ----
1 INTERPRETATION 1
2 FACILITY 19
3 DRAWDOWN 19
4 INTEREST 20
5 INTEREST PERIODS 21
6 DEFAULT INTEREST 22
7 REPAYMENT AND PREPAYMENT 23
8 CONDITIONS PRECEDENT 24
9 REPRESENTATIONS AND WARRANTIES 25
10 GENERAL UNDERTAKINGS 27
11 CORPORATE UNDERTAKINGS 30
12 INSURANCE 31
13 SHIP COVENANTS 35
14 SECURITY COVER 38
15 PAYMENTS AND CALCULATIONS 39
16 APPLICATION OF RECEIPTS 40
17 APPLICATION OF EARNINGS 41
18 EVENTS OF DEFAULT 43
19 FEES AND EXPENSES 46
20 INDEMNITIES 47
21 NO SET-OFF OR TAX DEDUCTION 48
22 ILLEGALITY, ETC 49
23 INCREASED COSTS 50
24 SET-OFF 51
25 TRANSFERS AND CHANGES IN LENDING OFFICE 51
26 VARIATIONS AND WAIVERS 52
27 NOTICES 52
28 JOINT AND SEVERAL LIABILITY 54
29 SUPPLEMENTAL 55
30 LAW AND JURISDICTION 55
SCHEDULE 1 DRAWDOWN NOTICE 57
SCHEDULE 2 DETAILS OF BORROWERS 58
SCHEDULE 3 DETAILS OF SHIPS 61
SCHEDULE 4 CONDITION PRECEDENT DOCUMENTS 63
EXECUTION PAGE 68
THIS AGREEMENT is made on 17 May 2006
BETWEEN
(1) MATRIX GAS TRADING LTD., VCM TRADING LTD., GENEVE BUTANE INC., LPGONE LTD.,
SEMICHLAUS EXPORTS LTD., VENTSPILS GASES LTD., PACIFIC GASES LTD., ARACRUZ
TRADING LTD., INDUSTRIAL MATERIALS INC., ENERGETIC PENINSULA LIMITED,
OXFORDGAS LIMITED, OCEAN BLUE LIMITED and STEALTHGAS INC. as joint and
several borrowers; and
(2) FORTIS BANK N.V./S.A., acting through its branch at 000 Xxxxxxx Xxxxxx,
000 00 Xxxxxx, Xxxxxx as "LENDER".
BACKGROUND
(A) The Lender has agreed to make available to the Borrowers a loan facility of
up to US$79,850,000 in 4 Advances as follows:
(i) as to an amount of US$46,349,250, to refinance the existing
indebtedness secured on the Existing Ships;
(ii) as to an amount of up to US$15,700,000, to finance 100 per cent. of
the purchase price of the 2003-built LPG Carrier of 5,000 cubic
metres currently named "SIR IVOR";
(iii) as to an amount of up to US$11,000,000, to finance 100 per cent. of
the purchase price of the 1996-built LPG Carrier of 5,000 cubic
metres currently named "LYNE"; and
(iv) as to the amount of up to US$6,800,750, to finance 64.77 per cent. of
the purchase price of the 1995-built LPG Carrier of 5,000 cubic
metres currently named "GAS HOPE M" (tbr "GAS NEMESIS").
(B) The Borrowers may, if they wish, from time to time hedge their exposure
under this Agreement to interest rate fluctuations by entering into
interest rate swap transactions with the Lender.
IT IS AGREED as follows:
1 INTERPRETATION
1.1 DEFINITIONS. Subject to Clause 1.5, in this Agreement:
"ACCOUNTING INFORMATION" means the annual audited consolidated accounts to
be provided by the Borrowers to the Lender in accordance with Clause 10.6;
"ACCOUNTS PLEDGE" means a deed creating security in respect of the Earnings
Account and the Retention Account, to be in favour of the Lender, in such
form as the Lender may approve or require;
"ADVANCE" means the principal amount of each borrowing by the Borrowers
under this Agreement;
"APPROVED MANAGER" means, in relation to a Ship, Stealth, being the
commercial manager of the Ship and any of (a) Stealth, (b) V Ships Cyprus
whose principal office is at V. Ships House, 13 Omonia Avenue, 3312
Limassol, Cyprus, (c) TESMA Denmark A/S. whose
principal office is at Xxxxxxx Xxxxxx Xxxxx, Xxxxxxxxxxx 0, XX 0000,
Xxxxxxxx, Xxxxxxx, (x) TESMA Singapore Pte Ltd whose principal office is at
00 Xxx Xxx Xxxx Xxxx, #00-00 Xxxxxxxxx Xxxxxxxx Logistics Centre, Singapore
597654, Singapore, (e) Swan Shipping Corp. whose principal office is at 0X
X&X Xxxxxxxx, 0000 Xxxxx Xxxxxxxxx, Xxxxxx, Xxxxxx or (f) Hanseatic
Shipping Company Limited whose principal office is at Xxxxxxxxx Xxxxx, 000,
Xxxxxx Xxxxxxxx Xxxxxx, Xxxxxxxx 0000, Xxxxxx, being the technical manager
of the Ship or any other company which the Lender may approve from time to
time as the commercial and/or technical manager of the Ship;
"ARACRUZ" means Aracruz Trading Ltd. a corporation incorporated and
existing under the laws of the Xxxxxxxx Islands and having its registered
office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro,
Xxxxxxxx Xxxxxxx, XX00000;
"ASSET COVER RATIO" means at any time, the ratio of:
(a) the aggregate of:
(i) the aggregate Market Values of the Ships then subject to a
Mortgage; and
(ii) the net realisable value of any additional security previously
provided under Clause 14 of this Agreement; to
(b) the Loan;
"AVAILABILITY PERIOD" means the period commencing on the date of this
Agreement and ending on:
(a) 30 June 2006 (or such later date as the Lender may agree with the
Borrowers, such agreement not to be unreasonably withheld by the
Lender); or
(b) if earlier, the date on which the Commitment is fully borrowed,
cancelled or terminated;
"BAREBOAT CHARTER" means, each of the Xxxxxx Xxxxx Bareboat Charter, the
Gas Ice Bareboat Charter, the Gas Arctic Bareboat Charter, the Sir Ivor
Bareboat Charter and the Lyne Bareboat Charter and in the plural means all
of them;
"BAREBOAT CHARTERER" means, in the relation to:
(a) "XXXXXX XXXXX", Unigas Kosan;
(b) each of "GAS ICE" and "GAS ARCTIC", Finaval; and
(c) each of "LYNE" and "SIR IVOR", Petredec,
and in the plural means both of them;
"XXXXXX XXXXX BAREBOAT CHARTER" means the bareboat charterparty in relation
to "XXXXXX XXXXX" dated 4 January 2005 and entered into between Industrial
as owner and Unigas Kosan as bareboat charterer;
"XXXXXX XXXXX BAREBOAT CHARTER ASSIGNMENT" means a specific assignment of
the rights of Industrial under the Xxxxxx Xxxxx Bareboat Charter and the
Xxxxxx Xxxxx Charterer's Insurance Assignment, to be executed by Industrial
in favour of the Lender in such form as the Lender may approve or require;
2
"XXXXXX XXXXX CHARTERER'S INSURANCE ASSIGNMENT" means a deed of assignment
made or to be made by Unigas Kosan (in its capacity as bareboat charterer
of "XXXXXX XXXXX"), in favour of Industrial in the agreed form;
"XXXXXX XXXXX BAREBOAT CHARTER PERIOD" means the period during which
"XXXXXX XXXXX" is operating under the Xxxxxx Xxxxx Bareboat Charter;
"BORROWERS" means, together, Matrix, VCM, Geneve, Lpgone, Semichalaus,
Ventsplis, Pacific, Aracruz, Industrial, Energetic, Oxfordgas, Ocean and
Stealthgas, and in the singular means any of them;
"BUSINESS Day" means a day on which banks are open in London, Athens,
Rotterdam and, in respect of a day on which a payment is required to be
made under a Finance Document, also in New York City;
"BUYERS" means, together, Oxfordgas, Energetic and Ocean in their capacity
as the buyers of "LYNE", "SIR IVOR" and "GAS NEMESIS" respectively pursuant
to the MOAs, and in the singular means any of them;
"CHARTER" means, in relation to a Ship, any time charter or other contract
for its employment (other than the Bareboat Charter relative to that Ship)
for a term of at least 12 months, or capable of exceeding 12 months,
whether or not already in existence at the date of this Agreement, to be
performed at any time during the Security Period;
"CHARTER ASSIGNMENT" means in relation to a Ship, a specific assignment of
the rights of the relevant Shipowner under any future Charter pursuant to
Clause 13.15 and any guarantee of such Charter, to be executed by that
Shipowner in favour of the Lender in such form as the Lender may approve or
require;
"COMMITMENT" means $79,850,000, as that amount may be reduced, cancelled or
terminated in accordance with this Agreement;
"CONFIRMATION" and "EARLY TERMINATION DATE", in relation to any continuing
Transaction, have the meanings given in the Master Agreement;
"CONTRACTUAL CURRENCY" has the meaning given in Clause 20.4;
"DEBT TO VALUE RATIO" means, at any relevant time, the ratio of the Loan to
the aggregate Market Value of the Ships subject to a Mortgage at that time;
"DEED OF COVENANT" means, in relation to each of "GAS EMPEROR", "GAS ICE",
"GAS ARCTIC" and "SIR IVOR", a deed of covenant collateral to the Mortgage
relating to that Ship executed or to be executed by the relevant Shipowner
in favour of the Lender in such form as the Lender may approve or require
and, in the plural, means all of them;
"DELIVERY DATE" means, in relation to a Ship, the date on which that Ship
is delivered to the relevant Buyer pursuant to the MOA relative to that
Ship;
"DOLLARS" and "$" means the lawful currency for the time being of the
United States of America;
"DRAWDOWN DATE" means, in relation to an Advance, the date requested by the
Borrowers for the Advance to be made, or (as the context requires) the date
on which the Advance is actually made;
"DRAWDOWN NOTICE" means a notice in the form set out in Schedule 1 (or in
any other form which the Lender approves or reasonably requires);
3
"EARNINGS" means, in relation to a Ship, all moneys whatsoever which are
now, or later become, payable (actually or contingently) to the Shipowner
owning the Ship and which arise out of the use or operation of the Ship,
including (but not limited to):
(a) all freight, hire and passage moneys, compensation payable to the
Shipowner owning the Ship in the event of requisition of the Ship for
hire, remuneration for salvage and towage services, demurrage and
detention moneys and damages for breach (or payments for variation or
termination) of any charterparty or other contract for the employment
of the Ship;
(b) all moneys which are at any time payable under Insurances in respect
of loss of earnings; and
(c) if and whenever the Ship is employed on terms whereby any moneys
falling within paragraphs (a) or (b) are pooled or shared with any
other person, that proportion of the net receipts of the relevant
pooling or sharing arrangement which is attributable to the Ship;
"EARNINGS ACCOUNT" means an account in the joint names of the Borrowers
with the Lender in Athens designated "Matrix Gas Trading Ltd. c.s. -
Earnings Account" and having account number 1000120205, or any other
account (with that or another office of the Lender) which is designated by
the Lender as the Earnings Account for the purposes of this Agreement;
"EBITDA" means, in respect of the relevant period, the aggregate amount of
consolidated or combined pre-tax profits of the Group before extraordinary
or exceptional items, depreciation, interest, repayment of principal in
respect of any loan, rentals under finance leases and similar charges
payable;
"ENERGETIC" means Energetic Peninsula Limited, a company incorporated under
the laws of Hong Kong having its registered office at 16th-19th Floors,
Prince's Building, 00 Xxxxxx Xxxx, Xxxxxxx, Xxxx Xxxx;
"ENVIRONMENTAL CLAIM" means:
(a) any claim by any governmental, judicial or regulatory authority which
arises out of an Environmental Incident or an alleged Environmental
Incident or which relates to any Environmental Law; or
(b) any claim by any other person which relates to an Environmental
Incident or to an alleged Environmental Incident,
and "CLAIM" means a claim for damages, compensation, fines, penalties or
any other payment of any kind, whether or not similar to the foregoing; an
order or direction to take, or not to take, certain action or to desist
from or suspend certain action; and any form of enforcement or regulatory
action, including the arrest or attachment of any asset;
"ENVIRONMENTAL INCIDENT" means:
(a) any release of Environmentally Sensitive Material from a Ship; or
(b) any incident in which Environmentally Sensitive Material is released
from a vessel other than a Ship and which involves a collision between
a Ship and such other vessel or some other incident of navigation or
operation, in either case, in connection with which a Ship is actually
or potentially liable to be arrested, attached, detained or injuncted
and/or a Ship and/or any vessel and/or any operator
4
or manager of the Ship is at fault or allegedly at fault or otherwise
liable to any legal or administrative action; or
(c) any other incident in which Environmentally Sensitive Material is
released otherwise than from a Ship and in connection with which a
Ship is actually or potentially liable to be arrested and/or where any
vessel and/or any operator or manager of a Ship is at fault or
allegedly at fault or otherwise liable to any legal or administrative
action;
"ENVIRONMENTAL LAW" means any law relating to pollution or protection of
the environment, to the carriage of Environmentally Sensitive Material or
to actual or threatened releases of Environmentally Sensitive Material;
"ENVIRONMENTALLY SENSITIVE MATERIAL" means oil, oil products and any other
substance (including any chemical, gas or other hazardous or noxious
substance) which is (or is capable of being or becoming) polluting, toxic
or hazardous;
"EVENT OF DEFAULT" means any of the events or circumstances described in
Clause 18.1;
"EXCESS CASH FLOW" means, in relation to each financial year of the Holding
Company, an amount equal to the actual aggregate gross operating revenues
of all the Ships during that financial year (or budgeted gross operating
revenue in the case of the final month of that financial year) less the
aggregate of:
(a) the amount of principal and interest payable during that financial
year in accordance with the terms of this Agreement; and
(b) actual gross operating expenses of all the Ships during that financial
year (or budgeted gross operating expenses in the case of the final
month of that financial year) including (for the avoidance of doubt)
expenditure necessarily incurred in that financial year by the
Shipowners in operating, insuring, maintaining, repairing and
generally trading the Ships (but excluding any exceptional and
extraordinary expenses);
"EXISTING INDEBTEDNESS" means, at any relevant time, the aggregate
Financial Indebtedness of the Borrowers under the Existing Loan Agreement;
"EXISTING LOAN AGREEMENT" means the loan agreement dated 16 March 2005 made
between (inter alia) the Existing Shipowners as joint and several borrowers
and (ii) Fortis Bank (Nederland) N.V. as lender in respect of a loan
facility of (originally) $54,000,000 (of which an amount of $46,349,250 is
outstanding by way of principal on the date of this Agreement);
"EXISTING SHIPS" means, together:
(a) the 1995-built LPG Carrier of 5,013 cubic metres registered under
Cypriot flag in the ownership of Pacific with the name "GAS EMPEROR"
("GAS EMPEROR");
(b) the 1991-built LPG Carrier of 3,436 cubic metres registered under
Maltese flag in the ownership of Semichlaus with the name "GAS ICE"
and parallel registered in the name of Finaval at the Italian bareboat
charter registry at the port of Palermo ("GAS ICE");
(c) the 1992-built LPG Carrier of 3,436 cubic metres registered under
Maltese flag in the ownership of Ventspils with the name "GAS ARCTIC"
and parallel registered
5
in the name of Finaval at the Italian bareboat charter registry at the
port of Palermo ("GAS ARCTIC");
(c) the 1994-built LPG Carrier of 5,012 cubic metres registered under
Maltese flag in the ownership of Industrial with the name "XXXXXX
XXXXX" ("XXXXXX XXXXX");
(d) the 1991-built LPG Carrier of 4,109 cubic metres registered under
Xxxxxxxx Islands flag in the ownership of Geneve with the name "GAS
COURCHEVEL" ("GAS COURCHEVEL");
(e) the 1999-built LPG Carrier of 3,526 cubic metres registered under
Xxxxxxxx Islands flag in the ownership of Matrix with the name "GAS
SHANGHAI" ("GAS SHANGHAI");
(f) the 1996-built LPG Carrier of 3,556 cubic metres registered under
Xxxxxxxx Islands flag in the ownership of VCM with the name "GAS
PROPHET" ("GAS PROPHET");
(g) the 1991-built LPG Carrier of 1,320 cubic metres registered under
Xxxxxxxx Islands flag in the ownership of Lpgone with the name "GAS
TINY" ("GAS TINY");
(h) the 1992-built LPG Carrier of 6,562 cubic metres registered under
Xxxxxxxx Islands flag in the ownership of Aracruz with the name "GAS
AMAZON" ("GAS AMAZON"),
and, in the singular, means any of them;
"EXISTING SHIPOWNERS" means, together, Matrix, VCM, Geneve, Lpgone,
Semichlaus, Ventspils, Pacific, Aracruz and Industrial, each in its
capacity as the registered owner of an Existing Ship, and in the singular
means any of them;
"FINANCE DOCUMENTS" means:
(a) this Agreement;
(b) the Master Agreement;
(c) the Mortgages;
(d) the Deeds of Covenant;
(e) the General Assignments;
(f) the Master Agreement Assignment;
(g) the Accounts Pledge;
(h) the Tripartite Agreements;
(i) the Xxxxxx Xxxxx Bareboat Charter Assignment;
(j) the Gas Nemesis Charter Assignment;
(k) any Charter Assignment; and
(1) any other document (whether creating a Security Interest or not) which
is executed at any time by any Borrower or any other person as
security for, or to establish any
6
form of subordination or priorities arrangement in relation to, any
amount payable to the Lender under this Agreement or any of the other
documents referred to in this definition;
"FINANCIAL INDEBTEDNESS" means, in relation to a person (the "DEBTOR"), a
liability of the debtor:
(a) for principal, interest or any other sum payable in respect of any
moneys borrowed or raised by the debtor;
(b) under any loan stock, bond, note or other security issued by the
debtor;
(c) under any acceptance credit, guarantee or letter of credit facility
made available to the debtor;
(d) under a financial lease, a deferred purchase consideration arrangement
or any other agreement having the commercial effect of a borrowing or
raising of money by the debtor;
(e) under any foreign exchange transaction any interest or currency swap
or any other kind of derivative transaction entered into by the debtor
or, if the agreement under which any such transaction is entered into
requires netting of mutual liabilities, the liability of the debtor
for the net amount; or
(f) under a guarantee, indemnity or similar obligation entered into by the
debtor in respect of a liability of another person which would fall
within (a) to (e) if the references to the debtor referred to the
other person;
"FINAVAL" means Finaval S.P.A., a company incorporated under the laws of
Italy and having its registered office at Xxx Xxxxxxxx Xxxxxxxx 0, 00000
Xxxx, Xxxxx;
"GAS ARCTIC BAREBOAT CHARTER" means the bareboat charterparty dated 23
February 2005 and entered into between Ventspils as owner and Finaval as
charterer in relation to "GAS ARCTIC", in such form as the Lender may
approve or require;
"GAS ARCTIC BAREBOAT CHARTER PERIOD" means the period during which "GAS
ARCTIC" is operating under the Gas Arctic Bareboat Charter;
"GAS ARCTIC TRIPARTITE AGREEMENT" means an agreement dealing with (inter
alia) the operation of "GAS ARCTIC" during the Gas Arctic Bareboat Charter
Period, made or to be made between (i) Ventspils, (ii) Finaval and (iii)
the Lender, in such form as the Lender may approve or require;
"GAS ICE BAREBOAT CHARTER" means the bareboat charterparty in relation to
"GAS ICE" dated 23 February 2005 and entered into between Semichlaus as
owner and Finaval as bareboat charterer;
"GAS ICE BAREBOAT CHARTER PERIOD" means the period during which "GAS ICE"
is operating under the Gas Ice Bareboat Charter;
"GAS ICE TRIPARTITE AGREEMENT" means an agreement dealing with (inter alia)
the operation of "GAS ICE" during the Gas Ice Bareboat Charter Period, made
or to be made between (i) Semichlaus, (ii) Finaval and (iii) the Lender, in
such form as the Lender may approve or require;
"GAS NEMESIS" means the 1995-built LPG Carrier of 5,000 cubic metres
currently registered under Panamanian flag in the ownership of the Seller
thereof with the name
7
"GAS HOPE M" which is to be acquired by Ocean pursuant to the Gas Nemesis
MOA and registered in its ownership under Panamanian flag with the name
"GAS NEMESIS";
"GAS NEMESIS CHARTER ASSIGNMENT" means, in relation to the Gas Nemesis Time
Charterparty, a specific assignment of the rights of Ocean under the Gas
Nemesis Time Charterparty, to be executed by Ocean in favour of the Lender
in such form as the Lender may approve or require;
"GAS NEMESIS CHARTERER" means Shell Gas Trading (Asia Pacific) Inc., a
company incorporated in Manila, Philippines whose registered office is at
Xxxxx Xxxxx, 000 Xxxxxx Xxxxxx, Xxxxxxx Xxxxxxx, Xxxxxx Sity, Philippines;
"GAS NEMESIS MOA" means a memorandum of agreement in relation to "GAS
NEMESIS" dated 9 May 2006 made between Ocean and the Seller thereof;
"GAS NEMESIS TIME CHARTERPARTY" means the time charterparty in relation to
"GAS NEMESIS" dated 11 July 2001 and made between (i) Pacific Pearl
Shipping Inc. of Monrovia, Liberia (the "DISPONENT OWNER") and the Gas
Nemesis Charterer as the same has been novated by the Disponent Owner to
Ocean by a novation agreement dated 9 May 2006 made between the Disponent
Owner, the Gas Nemesis Charterer and Ocean;
"GENERAL ASSIGNMENT" means, in relation to each Ship, a general assignment
of the Earnings, the Insurances and any Requisition Compensation of that
Ship, in such form as the Lender may approve or require, and in the plural
means all of them;
"GENEVE" means Geneve Butane Inc., a corporation incorporated and existing
under the laws of the Xxxxxxxx Islands and having its registered office at
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Xxxxxxxx
Xxxxxxx, XX00000;
"GROUP" means the Holding Company and its subsidiaries (whether direct or
indirect and including, but not limited to, the Borrowers) from time to
time during the Security Period and "MEMBER OF THE GROUP" shall be
construed accordingly;
"HOLDING COMPANY" means Stealthgas in its capacity as ultimate beneficial
owner of each of the other Borrowers;
"INDUSTRIAL" means Industrial Materials Inc., a corporation incorporated
and existing under the laws of the Xxxxxxxx Islands and having its
registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island,
Majuro, Xxxxxxxx Xxxxxxx, XX00000;
"INSURANCES" means, in relation to a Ship:
(a) all policies and contracts of insurance, including entries of the Ship
in any protection and indemnity or war risks association, which are
effected in respect of the Ship, her Earnings or otherwise in relation
to her; and
(b) all rights and other assets relating to, or derived from, any of the
foregoing, including any rights to a return of a premium;
"INTEREST EXPENSES" means, in respect of the relevant period, the aggregate
of all interest payable by any member of the Group on any Financial
Indebtedness (excluding any amounts owing by one member of the Group to
another member of the Group) and any net amounts payable under interest
rate hedge agreements;
"INTEREST PERIOD" means a period determined in accordance with Clause 5;
8
"ISM CODE" means, in relation to its application to each Borrower, its Ship
and its operation:
(a) 'The International Management Code for the Safe Operation of Ships and
for Pollution Prevention', currently known or referred to as the 'ISM
Code', adopted by the Assembly of the International Maritime
Organisation by Resolution A.741(18) on 4 November 1993 and
incorporated on 19 May 1994 into chapter IX of the International
Convention for the Safety of Life at Sea 1974 (SOLAS 1974); and
(b) all further resolutions, circulars, codes, guidelines, regulations and
recommendations which are now or in the future issued by or on behalf
of the International Maritime Organisation or any other entity with
responsibility for implementing the ISM Code, including without
limitation, the 'Guidelines on implementation or administering of the
International Safety Management (ISM) Code by Administrations'
produced by the International Maritime Organisations pursuant to
Resolution A.788(19) adopted on 25 November 1995,
as the same may be amended, supplemented or replaced from time to time;
"ISM CODE DOCUMENTATION" includes:
(a) the document of compliance (DOC) and safety management certificate
(SMC) issued pursuant to the ISM Code in relation to each Ship within
the periods specified by the ISM Code; and
(b) all other documents and data which are relevant to the ISM SMS and its
implementation and verification which the Lender may require; and
(c) any other documents which are prepared or which are otherwise relevant
to establish and maintain a Ship's or a Shipowner's compliance with
the ISM Code which the Lender may require;
"ISM SMS" means the safety management system for each Ship which is
required to be developed, implemented and maintained under the ISM Code;
"ISPS CODE" means the International Ship and Port Facility Security Code
constituted pursuant to resolution A.924(22) of the International Maritime
Organisation ("IMO") now set out in Chapter XI-2 of the Safety of Life at
Sea Convention (SOLAS) 1974 (as amended) and the mandatory ISPS Code as
adopted by a Diplomatic Conference of the IMO on Maritime Security in
December 2002 and includes any amendments or extensions to it and any
regulation issued pursuant to it but shall only apply insofar as it is
applicable law in the relevant Ship's flag state and any jurisdiction on
which such Ship is operated;
"ISPS CODE DOCUMENTATION" includes:
(a) the International Ship Security Certificate issued pursuant to the
ISPS Code in relation to each Ship within the period specified in the
ISPS Code; and
(i) all other documents and data which are relevant to the ISPS Code and
its implementation and verification which the Agent may require;
"LENDER" means Fortis Bank N.V./S.A., acting through its branch at 000
Xxxxxxx Xxxxxx, 000 00 Xxxxxx, Xxxxxx (or through another branch notified
to the Borrower under Clause 25.6) or its successor or assign;
"LIBOR" means, for an Interest Period:
9
(a) the rate per annum equal to the offered quotation for deposits in
Dollars for a period equal to, or as near as possible equal to, the
relevant Interest Period which appears on Reuters BBA Page LIBOR 01 at
or about 11.00 a.m. (London time) on the second Business Day prior to
the commencement of that Interest Period (and, for the purposes of
this Agreement, "Reuters BBA Page LIBOR 01" means the display
designated as "Reuters BBA Page LIBOR 01" on the Reuters Money News
Service or such other page as may replace Reuters BBA Page LIBOR 01 on
that service for the purpose of displaying rates comparable to that
rate) or on such other service as may be nominated by the British
Bankers' Association as the information vendor for the purpose of
displaying the British Bankers' Association Interest Settlement Rates
for Dollars; or
(b) in relation to an Interest Period of any other duration or if no rate
is quoted on Reuters BBA Page LIBOR 01, the rate per annum determined
by the Lender to be the arithmetic mean (rounded upwards, if
necessary, to the nearest one-sixteenth of one per cent.) of the rates
per annum determined by the Lender as the rate at which deposits in
Dollars are offered to the Lender by leading banks in the London
Interbank Market at the Lender's request at or about 11.00 a.m.
(Athens time) on the Quotation Date for that Interest Period for a
period equal to that Interest Period and for delivery on the first
Business Day of it;
"LOAN" means the principal amount for the time being outstanding under this
Agreement;
"LPGONE" means Lpgone Ltd., a corporation incorporated and existing under
the laws of the Xxxxxxxx Islands and having its registered office at Trust
Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Xxxxxxxx Xxxxxxx,
XX00000;
"LYNE" means the 1996-built LPG Carrier of 5,000 cubic metres currently
registered under Panamanian flag in the ownership of the Seller thereof
with the name "LYNE" which is to be acquired by Oxfordgas pursuant to the
Lyne MOA and registered in its ownership under Panamanian flag with the
same name;
"LYNE BAREBOAT CHARTER" means the bareboat charterparty in relation to
"LYNE" dated 27 April 2006 and entered into between Oxfordgas (as nominee
of the Holding Company) as owner and Petredec as bareboat charterer;
"LYNE BAREBOAT CHARTER PERIOD" means the period during which "LYNE" is
operating the Lyne Bareboat Charter;
"LYNE MOA" means a memorandum of agreement in relation to "LYNE" dated 27
April 2006 and made between Oxfordgas and the Seller thereof;
"LYNE TRIPARTITE AGREEMENT" means an agreement dealing with (inter alia)
the operation of "LYNE" during the Lyne Bareboat Charter Period, made or to
be made between (i) Oxfordgas, (ii) Petredec and (iii) the Lender, in such
form as the Lender may approve or require;
"MAJOR CASUALTY" means, in relation to a Ship, any casualty to the Ship in
respect of which the claim or the aggregate of the claims against all
insurers, before adjustment for any relevant franchise or deductible,
exceeds $1,000,000 or the equivalent in any other currency;
"MARGIN" means, at any time when the Debt to Value Ratio is:
(a) equal to or lower than 67 per cent., 0.75 per cent, per annum; or
10
(b) higher than 67 per cent, and lower or equal to 77 per cent., 0.8 per
cent, per annum; or
(c) higher than 77 per cent., 0.9 per cent per annum;
"MARKET VALUE" means the market value of a Ship at any date determined in
accordance with Clause 14.3;
"MASTER AGREEMENT" means the master agreement (on the 1992 ISDA
(Multicurrency - Crossborder) form) made or to be made between the
Borrowers and the Lender and includes all Transactions from time to time
entered into and Confirmations from time to time exchanged thereunder;
"MASTER AGREEMENT ASSIGNMENT" means the assignment of the Master Agreement
in favour of the Lender executed or to be executed by the Borrowers, in
such form as the Lender may approve or require;
"MATRIX" means Matrix Gas Trading Ltd. a corporation company incorporated
and existing under the laws of the Xxxxxxxx Islands and having its
registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island,
Majuro, The Xxxxxxxx Xxxxxxx, XX00000;
"MOAS" means, together, the Sir Ivor MOA, the Lyne MOA and the Gas Nemesis
MOA, and in the singular, means any of them;
"MORTGAGE" means:
(a) in the case of "GAS EMPEROR", a first priority Cypriot mortgage to be
executed by Pacific;
(b) in the case of "GAS ICE", a first priority Maltese mortgage to be
executed by Semichlaus;
(c) in the case of "GAS ARCTIC", a first priority Maltese mortgage to be
executed by Ventspils;
(d) in the case of "XXXXXX XXXXX", a first preferred Panamanian mortgage
to be executed by Industrial;
(e) in the case of "GAS COURCHEVEL", a first preferred Xxxxxxxx Islands
mortgage to be executed by Geneve;
(f) in the case of "GAS SHANGHAI", a first preferred Xxxxxxxx Islands
mortgage to be executed by Matrix;
(g) in the case of "GAS PROPHET", a first preferred Xxxxxxxx Islands
mortgage to be executed by VCM;
(h) in the case of "GAS TINY", a first preferred Xxxxxxxx Islands mortgage
to be executed by Lpgone;
(i) in the case of "GAS AMAZON", a first preferred Xxxxxxxx Islands
mortgage to be executed by Aracruz;
(j) in the case of "SIR IVOR", a first priority Hong Kong mortgage to be
executed by Energetic;
11
(k) in the case of "LYNE", a first preferred Panamanian mortgage to be
executed by Oxfordgas; and
(1) in the case of "GAS NEMESIS", a first preferred Panamanian mortgage to
be executed by Ocean,
each to be executed in favour of the Lender and to be in such form as the
Lender may approve or require and in the singular means any of them;
"NEGOTIATION PERIOD" has the meaning given in Clause 4.6;
"NET TOTAL DEBT" means, at any relevant time, Total Debt less the amount of
any Unencumbered Cash;
"NEW SHIP ADVANCE" means, in relation to a New Ship, the Advance to be used
in financing the whole or, as the case may be, part of the Purchase Price
of that New Ship pursuant to the MOA for the New Ship, such Advance to be
made available in accordance with and pursuant to Clauses 2.2 and 3.2(c);
"NEW SHIPOWNERS" means, together, Oxfordgas, Energetic and Ocean, each in
its capacity as the registered owner of a New Ship, and, in the singular,
means any of them;
"NEW SHIPS" means, together, "SIR IVOR", "LYNE" and "GAS NEMESIS" and in
the singular means any of them;
"OCEAN" means Ocean Blue Limited, a corporation incorporated in the
Xxxxxxxx Islands and having its registered office at Trust Company Complex,
Ajeltake Road, Ajeltake Island, Majuro, Xxxxxxxx Xxxxxxx, XX00000;
"OXFORDGAS" means Oxfordgas Limited, a corporation incorporated in the
Xxxxxxxx Islands and having its registered office at Trust Company Complex,
Ajeltake Road, Ajeltake Island, Majuro, Xxxxxxxx Xxxxxxx, XX00000;
"PACIFIC" means Pacific Gases Ltd. a company incorporated and existing
under the laws of Malta and having its registered office at 000/0 Xx. Xxxxx
Xxxxxx, Xxxxxxxx, Xxxxx;
"PAYMENT CURRENCY" has the meaning given in Clause 20.4;
"PERMITTED SECURITY INTERESTS" means:
(a) Security Interests created by the Finance Documents;
(b) liens for unpaid master's and crew's wages in accordance with usual
maritime practice;
(c) liens for salvage;
(d) liens arising by operation of law for not more than 2 months' prepaid
hire under any charter in relation to a Ship not prohibited by this
Agreement;
(e) liens for master's disbursements incurred in the ordinary course of
trading and any other lien arising by operation of law or otherwise in
the ordinary course of the operation, repair or maintenance of a Ship,
provided such liens do not secure amounts more than 30 days overdue
(unless the overdue amount is being contested by the Borrower in good
faith by appropriate steps) and subject, in the case of liens for
repair or maintenance, to Clause 13.12(g);
12
(f) any Security Interest created in favour of a plaintiff or defendant in
any proceedings or arbitration as security for costs and expenses
where the Borrower is actively prosecuting or defending such
proceedings or arbitration in good faith; and
(g) Security Interests arising by operation of law in respect of taxes
which are not overdue for payment or in respect of taxes being
contested in good faith by appropriate steps and in respect of which
appropriate reserves have been made;
"PERTINENT DOCUMENT" means:
(a) any Finance Document;
(b) any policy or contract of insurance contemplated by or referred to in
Clause 12 or any other provision of this Agreement or another Finance
Document;
(c) any other document contemplated by or referred to in any Finance
Document; and
(d) any document which has been or is at any time sent by or to the Lender
in contemplation of or in connection with any Finance Document or any
policy, contract or document falling within paragraphs (b) or (c);
"PERTINENT JURISDICTION", in relation to a company, means:
(a) England and Wales;
(b) the country under the laws of which the company is incorporated or
formed;
(c) a country in which the company's central management and control is or
has recently been exercised;
(d) a country in which the overall net income of the company is subject to
corporation tax, income tax or any similar tax;
(e) a country in which assets of the company (other than securities issued
by, or loans to, related companies) having a substantial value are
situated, in which the company maintains a permanent place of
business, or in which a Security Interest created by the company must
or should be registered in order to ensure its validity or priority;
and
(f) a country the courts of which have jurisdiction to make a winding up,
administration or similar order in relation to the company or which
would have such jurisdiction if their assistance were requested by the
courts of a country referred to in paragraphs (b) or (c) above;
"PERTINENT MATTER" means:
(a) any transaction or matter contemplated by, arising out of, or in
connection with a Pertinent Document; or
(b) any statement relating to a Pertinent Document or to a transaction or
matter falling within paragraph (a),
and covers any such transaction, matter or statement, whether entered into,
arising or made at any time before the signing of this Agreement or on or
at any time after that signing;
13
"PETREDEC" means Petredec S.A., a company incorporated and existing under
the laws of Bermuda;
"POTENTIAL EVENT OF DEFAULT" means an event or circumstance which, with the
giving of any notice, the lapse of time, a determination of the Lender
and/or the satisfaction of any other condition, would constitute an Event
of Default;
"PURCHASE PRICE" means, in relation to a Ship, the aggregate amount paid or
to be paid by the relevant Shipowner to the seller of the Ship pursuant to
the memorandum of agreement which relates to the sale and purchase of that
Ship;
"QUOTATION DATE" means, in relation to any Interest Period (or any other
period for which an interest rate is to be determined under any provision
of a Finance Document), the day on which quotations would ordinarily be
given by leading banks in the London Interbank Market for deposits in the
currency in relation to which such rate is to be determined for delivery on
the first day of that Interest Period or other period;
"REFINANCING ADVANCE" means an amount of $46,349,250 which is to be used in
refinancing the Existing Indebtedness and which is to be made available in
accordance with and pursuant to Clauses 2.2 and 3.2(b);
"RELEVANT PERSON" has the meaning given in Clause 18.7;
"REPAYMENT DATE" means a date on which a repayment is required to be made
under Clause 7;
"RETENTION ACCOUNT" means an account in the joint names of the Borrowers
with the Lender in Athens designated "Stealthgas Inc. - Retention Account"
and having account number 1000120203, or any other account (with that or
another office of the Lender) which is designated by the Lender as the
Retention Account for the purposes of this Agreement;
"REQUISITION COMPENSATION" includes all compensation or other moneys
payable by reason of any act or event such as is referred to in paragraph
(b) of the definition of "Total Loss";
"SECURED LIABILITIES" means all liabilities which the Borrowers, the
Security Parties or any of them have, at the date of this Agreement or at
any later time or times, under or in connection with any Finance Document
or any judgment relating to any Finance Document; and for this purpose,
there shall be disregarded any total or partial discharge of these
liabilities, or variation of their terms, which is effected by, or in
connection with, any bankruptcy, liquidation, arrangement or other
procedure under the insolvency laws of any country;
"SECURITY INTEREST" means:
(a) a mortgage, charge (whether fixed or floating) or pledge, any maritime
or other lien or any other security interest of any kind;
(b) the security rights of a plaintiff under an action in rem; and
(c) any arrangement entered into by a person (A) the effect of which is to
place another person (B) in a position which is similar, in economic
terms, to the position in which B would have been had he held a
security interest over an asset of A; but this paragraph (c) does not
apply to a right of set off or combination of accounts conferred by
the standard terms of business of a bank or financial institution;
14
"SECURITY PARTY" means each Shareholder and any other person (except the
Lender) who, as a surety or mortgagor, as a party to any subordination or
priorities arrangement, or in any similar capacity, executes a document
falling within the last paragraph of the definition of "Finance Documents";
"SECURITY PERIOD" means the period commencing on the date of this Agreement
and ending on the date on which the Lender notifies the Borrowers and the
Security Parties that:
(a) all amounts which have become due for payment by any Borrower or any
Security Party under the Finance Documents have been paid;
(b) no amount is owing or has accrued (without yet having become due for
payment) under any Finance Document;
(c) neither any Borrower nor any Security Party has any future or
contingent liability under Clause 19, 20, or 21 or any other provision
of this Agreement or another Finance Document; and
(d) the Lender does not consider that there is a significant risk that any
payment or transaction under a Finance Document would be set aside, or
would have to be reversed or adjusted, in any present or possible
future bankruptcy of a Borrower or a Security Party or in any present
or possible future proceeding relating to a Finance Document or any
asset covered (or previously covered) by a Security Interest created
by a Finance Document;
"SELLER" means, in the case of:
(a) "SIR IVOR", Forli Shipping Inc. of Panama City, Panama;
(b) "LYNE", Lyne Shipping Limited of the Xxxxxxxx Islands; and
(c) "GAS NEMESIS", Duck Marine S.A. of Panama City, Panama,
and in the plural means all of them;
"SEMICHLAUS" means Semichlaus Exports Ltd., a company incorporated and
existing under the laws of Malta having its registered office at 000/0 Xx
Xxxxx Xx., Xxxxxxxx, Xxxxx;
"SHIPOWNERS" means, together, the Existing Shipowners and the New
Shipowners and in the singular means any of them;
"SHAREHOLDER" means, in relation to a Borrower, the company referred to in
Schedule 2 as the holder of all, or a part of the issued share capital of
that Borrower;
"SHIPS" means, together, the Existing Ships and the New Ships and in the
singular means any of them;
"SIR IVOR" means the 2003-built LPG Carrier of 5,000 cubic metres currently
registered under the Hong Kong flag in the ownership of the Seller thereof
with the name "SIR IVOR" which is to be acquired by Energetic pursuant to
the Sir Ivor MOA and registered in its ownership under the Hong Kong flag
with the same name;
"SIR IVOR BAREBOAT CHARTER" means the bareboat charterparty in relation to
"SIR IVOR" dated 27 April 2006 and entered in to between Energetic (as the
nominee of the Holding Company) as owner and Petredec as bareboat
charterer;
00
"XXX XXXX XXXXXXXX CHARTER PERIOD" means the period during which "SIR IVOR"
is operating the Sir Ivor Bareboat Charter;
"SIR IVOR MOA" means a memorandum of agreement in relation to "SIR IVOR"
dated 27 April 2006 and made between Energetic (as the nominee of the
Holding Company) and the Seller thereof;
"SIR IVOR TRIPARTITE AGREEMENT" means an agreement dealing with (inter
alia) the operation of "SIR IVOR" during the Sir Ivor Bareboat Charter
Period, made or to be made between (i) Energetic, (ii) Petredec and (iii)
the Lender, in such form as the Lender may approve or require;
"STEALTH" means Stealth Maritime Corporation S.A., a corporation
incorporated and existing under the laws of the Republic of Liberia and
having its registered office at 00 Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxx;
"STEALTHGAS" means Stealthgas Inc., a corporation incorporated and existing
under the laws of the Xxxxxxxx Islands and having its registered office at
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, the Xxxxxxxx
Xxxxxxx, XX00000;
"SWAP EXPOSURE" means, as at any relevant date the aggregate net amount in
Dollars which would be payable by the Borrowers to the Lender under (and
calculated in accordance with) section 6(e) (Payments on Early Termination)
of the Master Agreement if an Early Termination Date had occurred on the
relevant date in relation to all continuing Transactions entered into
between the Borrowers and the Lender;
"TOTAL LIABILITIES" means, as at any date, the total liabilities (but
excluding any amount in respect of Total Shareholder's Equity) of the Group
determined in accordance with, and as shown in, the most recent Accounting
Information;
"TOTAL MARKET ADJUSTED ASSETS" means, at any time, the total assets (net of
Unencumered Cash) of the Group as shown in the most recent Accounting
Information adjusted to reflect the market value of all vessels owned by
members of the Group, as determined by valuations in accordance with Clause
14.4 as at any relevant date;
"TOTAL LOSS" means in relation to a Ship:
(a) actual, constructive, compromised, agreed or arranged total loss of
the Ship;
(b) any expropriation, confiscation, requisition or acquisition of the
Ship, whether for full consideration, a consideration less than its
proper value, a nominal consideration or without any consideration,
which is effected by any government or official authority or by any
person or persons claiming to be or to represent a government or
official authority (excluding a requisition for hire for a fixed
period not exceeding 1 year without any right to an extension) unless
it is within 1 month redelivered to the full control of the Shipowner
owning the Ship;
(c) any arrest, capture, seizure or detention of the Ship (including any
hijacking or theft) unless it is within 30 days redelivered to the
full control of the Shipowner owning the Ship;
"TOTAL LOSS DATE" means in relation to a Ship:
(a) in the case of an actual loss of the Ship, the date on which it
occurred or, if that is unknown, the date when the Ship was last heard
of;
16
(b) in the case of a constructive, compromised, agreed or arranged total
loss of the Ship, the earliest of:
(i) the date on which a notice of abandonment is given to the
insurers; and
(ii) the date of any compromise, arrangement or agreement made by or
on behalf of the Shipowner owning the Ship with the Ship's
insurers in which the insurers agree to treat the Ship as a total
loss; and
(c) in the case of any other type of total loss, on the date (or the most
likely date) on which it appears to the Lender that the event
constituting the total loss occurred;
"TOTAL SHAREHOLDER'S EQUITY" means, at any date, the total shareholder's
equity of the Group determined in accordance with, and as shown in, the
most recent Accounting Information;
"TRANSACTION" has the meaning given in the Master Agreement;
"TRIPARTITE AGREEMENTS" means, together the Gas Arctic Tripartite
Agreement, the Gas Ice Tripartite Agreement, the Sir Ivor Tripartite
Agreement and the Lyne Tripartite Agreement and in the singular means any
of them;
"UNENCUMBERED CASH" means any cash or cash equivalent owned by the
Guarantor or any member of the Group which is not subject to a Security
Interest;
"UNIGAS KOSAN" means Unigas Kosan Ltd., a company incorporated and existing
under the laws of Hong Kong having its registered office at 2109 Dominion
Centre, 00 Xxxxx'x Xxxx, Xxxx Xxxxxxx, Xxxx Xxxx;
"VCM" means VCM Trading Ltd., a corporation incorporated and existing under
the laws of the Xxxxxxxx Islands and having its registered office at Trust
Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Xxxxxxxx Xxxxxxx,
XX00000; and
"VENTSPILS" means Ventspils Gases Ltd., a company incorporated and existing
under the laws of Malta and having its registered office is at 000/0 Xx.
Xxxxx Xxxxxx, Xxxxxxxx, Xxxxx.
1.2 CONSTRUCTION OF CERTAIN TERMS. In this Agreement:
"APPROVED" means, for the purposes of Clause 12, approved in writing by the
Lender;
"ASSET" includes every kind of property, asset, interest or right,
including any present, future or contingent right to any revenues or other
payment;
"COMPANY" includes any partnership, joint venture and unincorporated
association;
"CONSENT" includes an authorisation, consent, approval, resolution,
licence, exemption, filing, registration, notarisation and legalisation;
"CONTINGENT LIABILITY" means a liability which is not certain to arise
and/or the amount of which remains unascertained;
"DOCUMENT" includes a deed; also a letter or fax;
"EXCESS RISKS" means, in relation to a Ship, the proportion of claims for
general average, salvage and salvage charges not recoverable under the hull
and machinery policies in respect of the Ship in consequence of its insured
value being less than the value at which the Ship is assessed for the
purpose of such claims;
17
"EXPENSE" means any kind of cost, charge or expense (including all legal
costs, charges and expenses) and any applicable value added or other tax;
"LAW" includes any order or decree, any form of delegated legislation, any
treaty or international convention and any regulation or resolution of the
Council of the European Union, the European Commission, the United Nations
or its Security Council;
"LEGAL OR ADMINISTRATIVE ACTION" means any legal proceeding or arbitration
and any administrative or regulatory action or investigation;
"LIABILITY" includes every kind of debt or liability (present or future,
certain or contingent), whether incurred as principal or surety or
otherwise;
"MONTHS" shall be construed in accordance with Clause 1.3;
"OBLIGATORY INSURANCES" means, in relation to a Ship, all insurances
effected, or which the Borrower owning the Ship is obliged to effect, under
Clause 12 or any other provision of this Agreement or another Finance
Document;
"PARENT COMPANY" has the meaning given in Clause 1.4;
"PERSON" includes any company; any state, political sub-division of a state
and local or municipal authority; and any international organisation;
"POLICY", in relation to any insurance, includes a slip, cover note,
certificate of entry or other document evidencing the contract of insurance
or its terms;
"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)(l/10/83) or clause 8 of the Institute
Time Clauses (Hulls)(l/11/1995) or the Institute Amended Running Down
Clause (1/10/71) or any equivalent provision;
"REGULATION" includes any regulation, rule, official directive, request or
guideline whether or not having the force of law of any governmental,
intergovernmental or supranational body, agency, department or regulatory,
self-regulatory or other authority or organisation;
"SUBSIDIARY" has the meaning given in Clause 1.4;
"TAX" includes any present or future tax, duty, impost, levy or charge of
any kind which is imposed by any state, any political sub-division of a
state or any local or municipal authority (including any such imposed in
connection with exchange controls), and any connected penalty, interest or
fine; and
"WAR RISKS" includes the risk of mines and all risks excluded by clause 23
of the Institute Time Clauses (Hulls)(l/10/83) or clause 24 of the
Institute Time Clauses (Hulls)(l/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
18
(b) on the last Business Day in the relevant calendar month, if the period
started on the last Business Day in a calendar month or if the last
calendar month of the period has no numerically corresponding days,
and "MONTH" and "MONTHLY" shall be construed accordingly.
1.4 MEANING OF "SUBSIDIARY". A company (S) is a subsidiary of another company
(P) if:
(a) a majority of the issued shares in S (or a majority of the issued shares in
S which carry unlimited rights to capital and income distributions) are
directly owned by P or are indirectly attributable to P; or
(b) P has direct or indirect control over a majority of the voting rights
attaching to the issued shares of S; or
(c) P has the direct or indirect power to appoint or remove a majority of the
directors of S; or
(d) P otherwise has the direct or indirect power to ensure that the affairs of
S are conducted in accordance with the wishes of P,
and any company of which S is a subsidiary is a parent company of S.
1.5 GENERAL INTERPRETATION. In this Agreement:
(a) references in Clause 1.1 to a Finance Document or any other document being
in the form of a particular appendix include references to that form with
any modifications to that form which the Lender approves or reasonably
requires;
(b) references to, or to a provision of, a Finance Document or any other
document are references to it as amended or supplemented, whether before
the date of this Agreement or otherwise;
(c) references to, or to a provision of, any law include any amendment,
extension, re-enactment or replacement, whether made before the date of
this Agreement or otherwise;
(d) words denoting the singular number shall include the plural and vice versa;
and
(e) Clauses 1.1 to 1.5 apply unless the contrary intention appears.
1.6 HEADINGS. In interpreting a Finance Document or any provision of a Finance
Document, all clause, sub-clause and other headings in that and any other
Finance Document shall be entirely disregarded.
2 FACILITY
2.1 AMOUNT OF FACILITY. Subject to the other provisions of this Agreement, the
Lender shall make a loan facility of up to the lesser of (a) $79,850,000
and (b) 62 per cent, of the aggregate Market Value of the Ships, available
to the Borrowers in up to 4 Advances.
2.2 PURPOSE OF ADVANCES. The Borrowers undertake with the Lender to use each
Advance only for the purpose stated in the preamble to this Agreement.
3 DRAWDOWN
3.1 REQUEST FOR ADVANCE. Subject to the following conditions, the Borrowers may
request an Advance or Advances to be made by ensuring that the Lender
receives a completed
19
Drawdown Notice not later than 11.00 a.m. (Athens time) 2 Business Days
prior to the intended Drawdown Date.
3.2 AVAILABILITY. The conditions referred to in Clause 3.1 are that:
(a) a Drawdown Date has to be a Business Day during the Availability Period;
(b) the Refinancing Advance shall be applied in fully repaying the Existing
Indebtedness;
(c) each New Ship Advance shall be applied in financing the whole (or, in the
case of the New Ship Advance in respect of "GAS NEMESIS", 64.77 per cent.)
of the Purchase Price of the New Ship which is to be financed by that New
Ship Advance; and
(d) the aggregate amount of the Advances shall not exceed the lesser of (i)
Commitment and (ii) 62 per cent, of the aggregate Market Values of the
Ships.
3.3 DRAWDOWN NOTICE IRREVOCABLE. A Drawdown Notice must be signed by a director
or other authorised person of a Borrower; and once served, a Drawdown
Notice cannot be revoked without the prior consent of the Lender.
3.4 DISBURSEMENT OF ADVANCE. Subject to the provisions of this Agreement, the
Lender shall on each Drawdown Date make available the relevant Advance to
the Borrowers; and payment to the Borrowers shall be made to the account
which the Borrowers specify in the relevant Drawdown Notice.
3.5 DISBURSEMENT OF ADVANCE TO THIRD PARTY. The payment of an Advance by the
Lender under Clause 3.4 shall constitute the making of the Advance and the
Borrowers shall at that time become indebted, as principal and direct
obligors, to the Lender in an amount equal to that Advance.
4 INTEREST
4.1 PAYMENT OF NORMAL INTEREST. Subject to the provisions of this Agreement,
interest on the Loan in respect of each Interest Period shall be paid by
the Borrowers on the last day of that Interest Period.
4.2 NORMAL RATE OF INTEREST. Subject to the provisions of this Agreement, the
rate of interest on the Loan in respect of an Interest Period shall be the
aggregate of the Margin and LIBOR for that Interest Period.
4.3 PAYMENT OF ACCRUED INTEREST. In the case of an Interest Period longer than
3 months, accrued interest shall be paid every 3 months during that
Interest Period and on the last day of that Interest Period.
4.4 NOTIFICATION OF MARKET DISRUPTION. The Lender shall promptly notify the
Borrowers if no rate is quoted on Reuters BBA Page LIBOR 01 or if for any
reason the Lender is unable to obtain Dollars in the London Interbank
Market in order to fund the Loan (or any part of it) during any Interest
Period, stating the circumstances which have caused such notice to be
given.
4.5 SUSPENSION OF DRAWDOWN. If the Lender's notice under Clause 4.4 is served
before an Advance is made, the Lender's obligation to make the Advance
shall be suspended while the circumstances referred to in the Lender's
notice continue.
4.6 NEGOTIATION OF ALTERNATIVE RATE OF INTEREST. If the Lender's notice under
Clause 4.4 is served after an Advance is made, the Borrowers and the Lender
shall use reasonable endeavours to agree, within the 30 days after the date
on which the Lender serves its
20
notice under Clause 4.4 (the "NEGOTIATION PERIOD"), an alternative interest
rate or (as the case may be) an alternative basis for the Lender to fund or
continue to fund the Loan during the Interest Period concerned.
4.7 APPLICATION OF AGREED ALTERNATIVE RATE OF INTEREST. Any alternative
interest rate or an alternative basis which is agreed during the
Negotiation Period shall take effect in accordance with the terms agreed.
4.8 ALTERNATIVE RATE OF INTEREST IN ABSENCE OF AGREEMENT. If an alternative
interest rate or alternative basis is not agreed within the Negotiation
Period, and the relevant circumstances are continuing at the end of the
Negotiation Period, then the Lender shall set an interest period and
interest rate representing the cost of funding of the Lender in Dollars or
in any available currency of the Loan plus the applicable Margin; and the
procedure provided for by this Clause 4.8 shall be repeated if the relevant
circumstances are continuing at the end of the interest period so set by
the Lender.
4.9 NOTICE OF PREPAYMENT. If the Borrowers do not agree with an interest rate
set by the Lender under Clause 4.8, the Borrowers may give the Lender not
less than 10 Business Days' notice of their intention to prepay at the end
of the interest period set by the Lender.
4.10 PREPAYMENT. A notice under Clause 4.9 shall be irrevocable; and on the last
Business Day of the interest period set by the Lender, the Borrowers shall
prepay (without premium or penalty) the Loan, together with accrued
interest thereon at the applicable rate plus the Margin.
4.11 APPLICATION OF PREPAYMENT. The provisions of Clause 7 shall apply in
relation to the prepayment.
4.12 CALCULATION OF DEBT TO VALUE RATIO. The Lender shall calculate the Debt to
Value Ratio on (a) the earlier of (i) the Drawdown Date for the final
Advance and (ii) 30 June 2006 and (b) every 6 months thereafter (each a
"REVIEW DATE") for the purposes of calculating the Margin and shall advise
the Borrowers in writing within 10 Business Days of each Review Date of the
Margin which will apply for the 6-month period commencing on the relevant
Review Date PROVIDED THAT in respect of each Review Date other than the
first Review Date, the Lender shall only be obliged to advise the Borrowers
of the Margin which will apply for the 6-month period commencing on the
relevant Review Date if that Margin will be different to the Margin which
applied immediately prior to the relevant Review Date.
5 INTEREST PERIODS
5.1 COMMENCEMENT OF INTEREST PERIODS. The first Interest Period applicable to
an Advance shall commence on the Drawdown Date relative to that Advance and
each subsequent Interest Period shall commence on the expiry of the
preceding Interest Period.
5.2 DURATION OF NORMAL INTEREST PERIODS. Subject to Clauses 5.3 and 5.4, each
Interest Period shall be:
(a) 1, 3, 6, 9 or 12 months as notified by the Borrowers to the Lender not
later than 11.00 a.m. (Athens time) 2 Business Days before the commencement
of the Interest Period PROVIDED THAT the Borrowers may not select more than
three 1 month Interest Periods in any calendar year unless otherwise agreed
by the Lender; or
(b) in the case of the first Interest Period applicable to the second and any
subsequent Advance, a period ending on the last day of the Interest Period
applicable to the Advances then current, whereupon all Advances shall be
consolidated and treated as a single Advance; or
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(c) 3 months, if the Borrowers fail to notify the Lender by the time specified
in paragraph (a); or
(d) such other period as the Lender may agree with the Borrowers.
5.3 DURATION OF INTEREST PERIODS FOR REPAYMENT INSTALMENTS. In respect of an
amount due to be repaid under Clause 7 on a particular Repayment Date, an
Interest Period shall end on that Repayment Date.
5.4 NON-AVAILABILITY OF MATCHING DEPOSITS FOR INTEREST PERIOD SELECTED. If,
after the Borrowers have selected and the Lender has agreed an Interest
Period longer than 6 months, the Lender notifies the Borrowers by 11.00
a.m. (London time) on the third Business Day before the commencement of the
Interest Period that it is not satisfied that deposits in Dollars for a
period equal to the Interest Period will be available to it in the London
Interbank Market when the Interest Period commences, the Interest Period
shall be of 6 months.
6 DEFAULT INTEREST
6.1 PAYMENT OF DEFAULT INTEREST ON OVERDUE AMOUNTS. The Borrowers shall pay
interest in accordance with the following provisions of this Clause 6 on
any amount payable by the Borrowers under any Finance Document which the
Lender does not receive on or before the relevant date, that is:
(a) the date on which the Finance Documents provide that such amount is due for
payment; or
(b) if a Finance Document provides that such amount is payable on demand, the
date on which the demand is served; or
(c) if such amount has become immediately due and payable under Clause 18.4,
the date on which it became immediately due and payable.
6.2 DEFAULT RATE OF INTEREST. Interest shall accrue on an overdue amount from
(and including) the relevant date until the date of actual payment (as well
after as before judgment) at the rate per annum determined by the Lender to
be 2 per cent, above:
(a) in the case of an overdue amount of principal, the higher of the rates set
out at Clauses 6.3(a) and (b); or
(b) in the case of any other overdue amount, the rate set out at Clause 6.3(b).
6.3 CALCULATION OF DEFAULT RATE OF INTEREST. The rates referred to in Clause
6.2 are:
(a) the rate applicable to the overdue principal amount immediately prior to
the relevant date (but only for any unexpired part of any then current
Interest Period applicable to it);
(b) the applicable Margin plus, in respect of successive periods of any
duration (including at call) up to 3 months which the Lender may select
from time to time:
(i) LIBOR; or
(ii) if the Lender determines that Dollar deposits for any such period are
not being made available to it by leading banks in the London
Interbank Market in the ordinary course of business, a rate from time
to time determined by the Lender by reference to the cost of funds to
it from such other sources as the Lender may from time to time
determine.
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6.4 NOTIFICATION OF INTEREST PERIODS AND DEFAULT RATES. The Lender shall
promptly notify the Borrowers of each interest rate determined by it under
Clause 6.3 and of each period selected by it for the purposes of paragraph
(b) of that Clause; but this shall not be taken to imply that the Borrowers
are liable to pay such interest only with effect from the date of the
Lender's notification.
6.5 PAYMENT OF ACCRUED DEFAULT INTEREST. Subject to the other provisions of
this Agreement, any interest due under this Clause shall be paid on the
last day of the period by reference to which it was determined.
6.6 COMPOUNDING OF DEFAULT INTEREST. Any such interest which is not paid at the
end of the period by reference to which it was determined shall thereupon
be compounded.
6.7 APPLICATION TO MASTER AGREEMENT. For the avoidance of doubt this Clause 6
does not apply to any amount payable under the Master Agreement in respect
of any continuing Transaction as to which section 2(e) (Default Interest,
Other Amounts) of the Master Agreement shall apply.
7 REPAYMENT AND PREPAYMENT
7.1 AMOUNT OF REPAYMENT INSTALMENTS. The Borrowers shall repay the Loan by:
(a) 40 equal consecutive three-monthly instalments, of in the case of:
(i) the first to fourth (inclusive) such instalments, $2,200,000 each;
(ii) the fifth to twelfth (inclusive) such instalments, $1,640,000 each;
and
(iii) the thirteenth to fortieth (inclusive) such instalments, $1,560,000
each; and
(b) a balloon instalment (the "BALLOON INSTALMENT") of $14,250,000 (as such
amount may be increased through the operation of Clause 7.10).
7.2 REPAYMENT DATES. The first instalment shall be repaid on 31 August 2006,
each subsequent instalment shall be repaid at 3-monthly intervals with the
final instalment, together with the Balloon Instalment, being repaid on 31
May 2016.
7.3 FINAL REPAYMENT DATE. On the final Repayment Date, the Borrowers shall
additionally pay to the Lender all other sums then accrued or owing under
any Finance Document.
7.4 VOLUNTARY PREPAYMENT. Subject to the following conditions, the Borrowers
may prepay the whole or any part of the Loan on the last day of an Interest
Period.
7.5 CONDITIONS FOR VOLUNTARY PREPAYMENT. The conditions referred to in Clause
7.4 are that:
(a) a partial prepayment shall be $500,000 or a multiple of $500,000;
(b) the Lender has received from the Borrowers at least 5 days' prior written
notice specifying the amount to be prepaid and the date on which the
prepayment is to be made; and
(c) the Borrowers have provided evidence satisfactory to the Lender that any
consent required by any Borrower or any Security Party in connection with
the prepayment has been obtained and remains in force, and that any
regulation relevant to this Agreement which affects any Borrower or any
Security Party has been complied with.
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7.6 EFFECT of NOTICE OF PREPAYMENT. A prepayment notice may not be withdrawn or
amended without the consent of the Lender and the amount specified in the
prepayment notice shall become due and payable by the Borrowers on the date
for prepayment specified in the prepayment notice.
7.7 MANDATORY PREPAYMENT. Without prejudice to the provisions of Clause 14, the
Borrowers shall be obliged to prepay the relevant proportion of the Loan if
a Ship is sold or becomes a Total Loss:
(a) in the case of a sale, on or before the date on which the sale is completed
by delivery of the Ship to the buyer; or
(b) in the case of a Total Loss, on the earlier of the date falling 150 days
after the Total Loss Date and the date of receipt by the Security Trustee
of the proceeds of insurance relating to such Total Loss,
and in this Clause 7.7 "RELEVANT PROPORTION" means such amount necessary to
ensure that following the sale or Total Loss of a Ship, the Asset Cover
Ratio is equal to the Asset Cover Ratio immediately prior to the sale or
Total Loss (as the case may be) of that Ship.
7.8 AMOUNTS PAYABLE ON PREPAYMENT. A prepayment shall be made together with
accrued interest (and any other amount payable under Clause 20 or
otherwise) in respect of the amount prepaid and, if the prepayment is not
made on the last day of an Interest Period together with any sums payable
under Clause 20. l(b) but without premium or penalty.
7.9 APPLICATION OF PARTIAL PREPAYMENT. Each partial prepayment shall be applied
pro rata against the repayment instalments, including, without limitation,
the balloon instalment, specified in Clause 7.1.
7.10 DEFERRAL OPTION. The Borrowers may elect to defer the repayment of up to
one third of any six repayment instalments falling due after the Repayment
Date in relation to the thirteenth repayment instalment subject to the
following terms and conditions:
(a) the Borrowers shall have sent to the Lender a notice at least 10 days prior
to the Repayment Date relative to the repayment instalment the payment of
part of which the Borrowers are electing to defer specifying the amount to
be deferred (which amount shall not exceed one third of the relevant
repayment instalment);
(b) no Event of Default (i) has occurred or is continuing either at the date of
the Borrowers' request or on the Repayment Date on which the deferred
instalment was due and payable or (ii) will result from the deferral of the
relevant repayment instalment; and
(c) each part of a repayment instalment which is deferred (which shall not
exceed, when added to the parts of all other repayment instalments which
have been deferred, $3,120,000 in aggregate) shall be added to the Balloon
Instalment which shall be increased by such amount.
7.11 NO REBORROWING. No amount prepaid may be reborrowed.
8 CONDITIONS PRECEDENT
8.1 DOCUMENTS, FEES AND NO DEFAULT. The Lender's obligation to make an Advance
is subject to the following conditions precedent:
(a) that, on or before the service of the first Drawdown Notice, the Lender
receives the documents described in Part A of Schedule 4, in form and
substance satisfactory to it and its lawyers;
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(b) that, on the Drawdown Date in respect of the Refinancing Advance but prior
to the making of that Advance, the Lender receives the documents described
in Part B of Schedule 4, in form and substance satisfactory to it and its
lawyers;
(c) that, on the Drawdown Date relating to a New Ship Advance but prior to the
making of that Advance, the Lender receives the documents described in Part
C of Schedule 4, in form and substance satisfactory to it and its lawyers;
(d) that, before the service of the first Drawdown Notice, the Lender receives
the arrangement fee referred to in Clause 19.1 and has received payment of
the expenses referred to in Clause 19.2; and
(e) that both at the date of each Drawdown Notice and at each Drawdown Date:
(i) no Event of Default or Potential Event of Default has occurred and is
continuing or would result from the borrowing of the relevant
Advance;
(ii) the representations and warranties in Clause 9.1 and those of any
Borrower or any Security Party which are set out in the other Finance
Documents would be true and not misleading if repeated on each of
those dates with reference to the circumstances then existing; and
(iii) none of the circumstances contemplated by Clause 4.4 has occurred and
is continuing; and
(f) that, if the ratio set out in Clause 14.1 were applied immediately
following the making of any Advance, the Borrowers would not be obliged to
provide additional security or prepay part of the Loan under that Clause;
and
(g) that the Lender has received, and found to be acceptable to it, any further
opinions, consents, agreements and documents in connection with the Finance
Documents which the Lender may request by notice to the Borrowers prior to
the relevant Drawdown Date.
8.2 WAIVERS OF CONDITIONS PRECEDENT. If the Lender, at its discretion, permits
an Advance to be borrowed before certain of the conditions referred to in
Clause 8.1 are satisfied, the Borrowers shall ensure that those conditions
are satisfied within 20 Business Days after the relevant Drawdown Date (or
such longer period as the Lender may specify).
9 REPRESENTATIONS AND WARRANTIES
9.1 GENERAL. Each Borrower represents and warrants to the Lender as follows.
9.2 STATUS. Each Borrower is duly incorporated and validly existing and in good
standing under the laws of its place of incorporation as indicated in
Schedule 2.
9.3 SHARE CAPITAL AND OWNERSHIP. Each Borrower has an authorised and issued
share capital as set out in Schedule 2 and the legal title and beneficial
ownership of all those shares is held, free of any Security Interest or
other claim, by the relevant Shareholder or Shareholders.
9.4 CORPORATE POWER. Each Borrower, or in the case of paragraph (a), each Buyer
or each Borrower which is a party to a Bareboat Charter, has the corporate
capacity, and has taken all corporate action and obtained all consents
necessary for it:
(a) to execute the MOA to which it is a party, to execute the Bareboat Charter
to which it is a party, to purchase and pay for the relevant Ship under
that MOA and to register that Ship in its name under the relevant flag;
25
(b) to execute the Finance Documents to which that Borrower is a party; and
(c) to borrow under this Agreement, to enter into Transactions under the Master
Agreement and to make all the payments contemplated by, and to comply with,
those Finance Documents to which that Borrower is a party and the Master
Agreement.
9.5 CONSENTS IN FORCE. All the consents referred to in Clause 9.4 remain in
force and nothing has occurred which makes any of them liable to
revocation.
9.6 LEGAL VALIDITY; EFFECTIVE SECURITY INTERESTS. The Finance Documents to
which each Borrower is a party, do now or, as the case may be, will, upon
execution and delivery (and, where applicable, registration as provided for
in the Finance Documents):
(a) constitute that Borrower's legal, valid and binding obligations enforceable
against that Borrower in accordance with their respective terms; and
(b) create legal, valid and binding Security Interests enforceable in
accordance with their respective terms over all the assets to which they,
by their terms, relate,
subject to any relevant insolvency laws affecting creditors' rights
generally.
9.7 NO THIRD PARTY SECURITY INTERESTS. Without limiting the generality of
Clause 9.6, at the time of the execution and delivery of each Finance
Document:
(a) each Borrower which is a party to that Finance Document will have the right
to create all the Security Interests which that Finance Document purports
to create; and
(b) no third party will have any Security Interest (except for Permitted
Security Interests) or any other interest, right or claim over, in or in
relation to any asset to which any such Security Interest, by its terms,
relates.
9.8 NO CONFLICTS. The execution by each Borrower of each Finance Document to
which it is a party, and the borrowing by that Borrower of the Loan, and
its compliance with each Finance Document to which it is a party will not
involve or lead to a contravention of:
(a) any law or regulation; or
(b) the constitutional documents of that Borrower; or
(c) any contractual or other obligation or restriction which is binding on that
Borrower or any of its assets.
9.9 NO WITHHOLDING TAXES. All payments which each Borrower is liable to make
under the Finance Documents to which it is a party may be made without
deduction or withholding for or on account of any tax payable under any law
of any Pertinent Jurisdiction.
9.10 NO DEFAULT. No Event of Default or Potential Event of Default has occurred
and is continuing.
9.11 INFORMATION. All information which has been provided in writing by or on
behalf of the Borrowers or any Security Party to the Lender in connection
with any Finance Document satisfied the requirements of Clause 10.5; all
audited and unaudited accounts which have been so provided satisfied the
requirements of Clause 10.7; and there has been no material adverse change
in the financial position or state of affairs of any Borrower from that
disclosed in the latest of those accounts.
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9.12 NO LITIGATION. No legal or administrative action involving any Borrower
(including, in the case of each Shipowner, action relating to any alleged
or actual breach of the ISM Code or the ISPS Code) has been commenced or
taken or, to any Borrower's knowledge, is likely to be commenced or taken.
9.13 VALIDITY AND COMPLETENESS OF MOAS AND BAREBOAT CHARTERS. Each MOA and each
Bareboat Charter constitutes valid, binding and enforceable obligations of
the parties thereto respectively in accordance with their terms; and:
(a) each copy of an MOA and a Bareboat Charter delivered to the Lender before
the date of this Agreement is a true and complete copy of such MOA or, as
the case may be, such Bareboat Charter (including, without limitation, any
addenda thereto); and
(b) no amendments or additions to any MOA or any Bareboat Charter have been
agreed nor has any party to an MOA or a Bareboat Charter waived any of its
rights under an MOA or a Bareboat Charter.
9.14 NO REBATES ETC. There is no agreement or understanding to allow or pay any
rebate, premium, commission, discount or other benefit or payment
(howsoever described) to any Buyer, any Seller or any third party in
connection with the purchase by a Buyer of a Ship other than as disclosed
to the Lender in writing on or prior to the date of this Agreement.
9.15 COMPLIANCE WITH CERTAIN UNDERTAKINGS. At the date of this Agreement, the
Borrowers are in compliance with Clauses 10.2, 10.4, 10.9 and 10.13.
9.16 TAXES PAID. Each Borrower has paid all taxes applicable to, or imposed on
or in relation to that Borrower, its business and, in the case of a
Borrower which is a Shipowner, the Ship owned by it.
9.17 ISM CODE AND ISPS CODE COMPLIANCE. All requirements of the ISM Code and the
ISPS Code as they relate to the Shipowners, the Approved Manager, each
Bareboat Charterer and each Ship have been complied with.
10 GENERAL UNDERTAKINGS
10.1 GENERAL. Each Borrower undertakes with the Lender to comply, or, in the
case of Clauses 10.17 and 10.18, procure the compliance by the Holding
Company, with the following provisions of this Clause 10 at all times
during the Security Period, except as the Lender may otherwise permit (such
permission not to be unreasonably withheld).
10.2 TITLE; NEGATIVE PLEDGE. Each Shipowner will:
(a) hold the legal title to, and own the entire beneficial interest in the Ship
owned by it, her Insurances and Earnings, free from all Security Interests
and other interests and rights of every kind, except for those created by
the Finance Documents and the effect of assignments contained in the
Finance Documents and except for Permitted Security Interests; and
(b) not create or permit to arise any Security Interest (except for Permitted
Security Interests) over any other asset, present or future including, but
not limited to, the Borrowers' rights against the Lender under the Master
Agreement or all or any part of the Borrowers' interest in any amount
payable to the Borrowers by the Lender under the Master Agreement.
10.3 NO DISPOSAL OF ASSETS. No Borrower will transfer, lease or otherwise
dispose of:
27
(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.
10.4 NO OTHER LIABILITIES OR OBLIGATIONS TO BE INCURRED. No Borrower will incur
any liability or obligation except liabilities and obligations:
(a) under the Finance Documents to which it is a party;
(b) in the case of a Buyer, pursuant to the MOA to which it is a party;
(c) in the case of a Borrower whose Ship is subject to a Bareboat Charter,
pursuant to the Bareboat Charter to which it is a party;
(d) in the case of each Shipowner, liabilities or obligations reasonably
incurred in the ordinary course of operating and chartering the Ship owned
by it; and
(e) in the case of the Holding Company liabilities or obligations reasonably
incurred in the ordinary course of its business.
10.5 INFORMATION PROVIDED TO BE ACCURATE. All financial and other information
which is provided in writing by or on behalf of a Borrower under or in
connection with any Finance Document will be true and not misleading and
will not omit any material fact or consideration.
10.6 PROVISION OF FINANCIAL STATEMENTS. The Borrowers will send to the Lender:
(a) as soon as possible, but in no event later than 180 days after the end of
each financial year of the Holding Company, the audited consolidated
accounts of the Group; and
(b) as soon as possible, but in no event later than 90 days after the end of
each half year in each financial year of the Holding Company, the unaudited
management accounts of the Group in a format approved by the Lender, which
are certified as to their correctness by the chief financial officer of the
Holding Company,
in each case together with a certificate signed by the chief financial
officer of the Holding Company confirming that the Holding Company is as at
the date of that certificate in compliance with the financial covenants
specified in Clauses 10.17 and 10.18 and that the Asset Cover Ratio is
until 30 June 2009, above 1.25:1 and, at all times thereafter, above
1.30:1.
10.7 FORM OF FINANCIAL STATEMENTS. All accounts (audited and unaudited)
delivered under Clause 10.6 will:
(a) be prepared in accordance with all applicable laws and generally accepted
accounting principles consistently applied;
(b) give a true and fair view of the state of affairs of the relevant parties
at the date of those accounts and of their profit for the period to which
those accounts relate; and
(c) fully disclose or provide for all significant liabilities of the Group.
10.8 SHAREHOLDER AND CREDITOR NOTICES. Each Borrower will send to the Lender, at
the same time as they are despatched, copies of all communications which
are despatched to that Borrower's shareholders or creditors or any class of
them.
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10.9 CONSENTS. Each Borrower will maintain in force and promptly obtain or
renew, and will promptly send certified copies to the Lender of, all
consents required:
(a) for that Borrower to perform its obligations under any Finance Document
and any MOA to which it is a party;
(b) for the validity or enforceability of any Finance Document to which it is a
party; and
(c) if that Borrower is a Shipowner, for that Borrower to continue to own and
operate the Ship owned by it, and
(d) if that Borrower is a party to a Bareboat Charter, for it to continue to
perform its obligations under the Bareboat Charter to which it is a party,
and that Borrower will comply with the terms of all such consents.
10.10 MAINTENANCE OF SECURITY INTERESTS. Each Borrower will:
(a) at its own cost, do all that it reasonably can to ensure that any Finance
Document validly creates the obligations and the Security Interests which
it purports to create; and
(b) without limiting the generality of paragraph (a), at its own cost,
promptly register, file, record or enrol any Finance Document with any
court or authority in all Pertinent Jurisdictions, pay any stamp,
registration or similar tax in all Pertinent Jurisdictions in respect of
any Finance Document, give any notice or take any other step which may be
or has become necessary or desirable for any Finance Document to be valid,
enforceable or admissible in evidence or to ensure or protect the priority
of any Security Interest which it creates.
10.11 NOTIFICATION OF LITIGATION. Each Borrower will provide the Lender with
details of any legal or administrative action involving that Borrower, any
Security Party, the Approved Manager or, in the case of each Shipowner,
the Ship owned by it, her Earnings or her Insurances and, in the case of
each of Industrial, Ventspils, Semichlaus, Oxford and Energetic, the
relevant Bareboat Charterer, as soon as such action is instituted or it
becomes apparent to that Borrower that it is likely to be instituted,
unless it is clear that the legal or administrative action cannot be
considered material in the context of any Finance Document.
10.12 NO AMENDMENT TO MOA OR BAREBOAT CHARTER. No Borrower will agree to any
amendment or supplement to, or waive or fail to enforce, the MOA or the
Bareboat Charter to which it is a party or any of its provisions.
10.13 PRINCIPAL PLACE OF BUSINESS. Each Borrower will maintain its place of
business, and keep its corporate documents and records, at the address
stated in Clause 27.2; and no Borrower will establish, or do anything as a
result of which it would be deemed to have, a place of business in the
United Kingdom or the United States of America.
10.14 CONFIRMATION OF NO DEFAULT. Each Borrower will, within 2 Business Days
after service by the Lender of a written request, serve on the Lender a
notice which is signed by the director of that Borrower and which:
(a) states that no Event of Default or Potential Event of Default has
occurred; or
(b) states that no Event of Default or Potential Event of Default has
occurred, except for a specified event or matter, of which all material
details are given.
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10.15 NOTIFICATION OF DEFAULT. Each Borrower will notify the Lender as soon as
that Borrower becomes aware of:
(a) the occurrence of an Event of Default or a Potential Event of Default; or
(b) any matter which indicates that an Event of Default or a Potential Event
of Default may have occurred,
and will keep the Lender fully up-to-date with all developments.
10.16 PROVISION OF FURTHER INFORMATION. Each Borrower will, as soon as
practicable after receiving the request, provide the Lender with any
additional financial or other information relating:
(a) any Borrower, any Ship, any Earnings, or any Insurances or either Bareboat
Charterer; or
(b) to any other matter relevant to, or to any provision of, a Finance
Document,
which may be requested by the Lender at any time.
10.17 MINIMUM CASH BALANCE. For the duration of the Security Period, the members
of the Group will maintain cash deposits with the Lender, free of Security
Interests except in favour of the Lender pursuant to this Agreement and
the other Finance Documents (but excluding any monies transferred to the
Retention Account pursuant to Clause 17.3), in aggregate equal to not less
than the amount of interest accruing (or estimated by the Lender to
accrue) on the Loan during the 6-month period commencing on the date on
which such determination is made.
10.18 FINANCIAL UNDERTAKINGS. The Holding Company shall ensure that at all times
throughout the Security Period:
(a) the ratio of Net Total Debt to Total Market Adjusted Assets shall not be
more then 0.8:1; and
(b) the ratio of EBITDA to Interest Expenses for the 6 months preceeding such
time shall be greater than or equal to 2.5:1.
11 CORPORATE UNDERTAKINGS
11.1 GENERAL. Each Borrower also undertakes with the Lender to comply with the
following provisions of this Clause 11 at all times during the Security
Period except as the Lender may otherwise permit (such permission not to
be unreasonably withheld).
11.2 MAINTENANCE OF STATUS. Each Borrower will maintain its separate corporate
existence and remain in good standing under the laws of its place of
incorporation indicated in Schedule 2.
11.3 NEGATIVE UNDERTAKINGS. No Borrower will:
(a) carry on any business other than, in the case of a Shipowner, the
ownership, chartering and operation of the Ship owned by it and, in the
case of the Holding Company, investing in companies which own or are to
acquire LPG carriers or other types of ocean-going vessels which are used
to transport petroleum, petrochemical gas products or liquefied natural
gas; or
(b) pay any dividend or make any other form of distribution or effect any form
of redemption, purchase or return of share capital except in accordance
with Clause 11.4; or
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(c) provide any form of credit or financial assistance to:
(i) a person who is directly or indirectly interested in that Borrower's
share or loan capital; or
(ii) any company in or with which such a person is directly or indirectly
interested or connected,
or enter into any transaction with or involving such a person or company on
terms which are, in any respect, less favourable to that Borrower than
those which it could obtain in a bargain made at arms' length;
(d) open or maintain any account with any bank or financial institution except
(i) accounts with the Lender for the purposes of the Finance Documents if
that Borrower is a Shipowner, (ii) accounts with any other bank or
financial institution notified in writing to the Lender in the case of the
Holding Company and (iii) the existing account opened by Geneve and held in
its name with Alpha Bank,
PROVIDED THAT the exemption set out in sub-paragraph (iii) of this Clause
11.3(d) shall be without prejudice to the obligations of Geneve under
Clause 17.1;
(e) issue, allot or grant any person a right to any shares in its capital or
repurchase or reduce its issued share capital;
(f) acquire any shares or other securities other than US or UK Treasury bills
and certificates of deposit issued by major North American or European
banks, or enter into any transaction in a derivative; or
(g) enter into any form of amalgamation, merger or de-merger or any form of
reconstruction or reorganisation.
11.4 PAYMENT OF DIVIDENDS. Subject to no Event of Default having occurred, the
Borrowers may in any financial year, declare and pay by way of dividends an
amount of up to 50 per cent. of the Excess Cash Flow of the Group for that
financial year.
12 INSURANCE
12.1 GENERAL. Each Borrower also undertakes with the Lender to comply, or as the
case may be, procure compliance, with the following provisions of this
Clause 12 at all times during the Security Period except as the Lender may
otherwise permit.
12.2 MAINTENANCE OF OBLIGATORY INSURANCES. Each Shipowner shall keep the Ship
owned by it insured at the expense of that Shipowner against:
(a) fire and usual marine risks (including hull and machinery and excess
risks);
(b) war risks;
(c) protection and indemnity risks; and
(d) any other risks against which the 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 that Shipowner to insure and
which are specified by the Lender by notice to that Shipowner.
12.3 TERMS OF OBLIGATORY INSURANCES. Each Shipowner shall effect such
insurances:
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(a) in Dollars;
(b) in the case of fire and usual marine risks and war risks, in an amount on
an agreed value basis at least the greater of (i) such amount, which when
aggregated with the amount for which any other Ship then subject to a
Mortgage is insured, is equal to 130 per cent. of the aggregate of the Loan
and the Swap Exposure and (ii) the market value of the Ship owned by it;
and
(c) in the case of oil pollution liability risks, for an aggregate amount equal
to the highest level of cover from time to time available under basic
protection and indemnity club entry (with the international group of
protection and indemnity clubs) and in the international marine insurance
market (currently $1,000,000,000);
(d) in relation to protection and indemnity risks in respect of the full
tonnage of the Ship owned by it;
(e) on approved terms; and
(f) through approved brokers and with approved insurance companies and/or
underwriters or, in the case of war risks and protection and indemnity
risks, in approved war risks and protection and indemnity risks
associations.
12.4 FURTHER PROTECTIONS FOR THE LENDER. In addition to the terms set out in
Clause 12.3, each Shipowner shall procure that the obligatory insurances
shall:
(a) name (or be amended to name) the Lender as mortgagee of the relevant Ship,
but without the Lender thereby being liable to pay (but having the right to
pay) premiums, calls or other assessments in respect of such insurance;
(b) name the Lender as loss payee with such directions for payment as the
Lender may specify;
(c) provide that all payments by or on behalf of the insurers under the
obligatory insurances to the Lender shall be made without set-off,
counterclaim or deductions or condition whatsoever;
(d) provide that such obligatory insurances shall be primary without right of
contribution from other insurances which may be carried by the Lender;
(e) provide that the Lender may make proof of loss if any of the Shipowners
fail to do so.
12.5 RENEWAL OF OBLIGATORY INSURANCES. Each Shipowner shall:
(a) at least 7 days before the expiry of any obligatory insurance effected by
it:
(i) notify the Lender of the brokers (or other insurers) and any
protection and indemnity or war risks association through or with whom
that Borrower proposes to renew that obligatory insurance and of the
proposed terms of renewal; and
(ii) obtain the Lender's approval to the matters referred to in paragraph
(i);
(b) at least 7 days before the expiry of any obligatory insurance effected by
it, renew that obligatory insurance in accordance with the Lender's
approval pursuant to paragraph (a); and
32
(c) procure that the approved brokers and/or the war risks and protection and
indemnity associations with which such a renewal is effected shall promptly
after the renewal notify the Lender in writing of the terms and conditions
of the renewal.
12.6 COPIES OF POLICIES; LETTERS OF UNDERTAKING. Each Shipowner shall ensure
that all approved brokers provide the Lender with copies of all policies
relating to the obligatory insurances which they are to effect or renew and
of a letter or letters or undertaking in a form required by the Lender and
including undertakings by the approved brokers that:
(a) they will have endorsed on each policy, immediately upon issue, a loss
payable clause and a notice of assignment complying with the provisions of
Clause 12.4;
(b) they will hold such policies, and the benefit of such insurances, to the
order of the Lender in accordance with the said loss payable clause;
(c) they will advise the Lender immediately of any material change to the terms
of the obligatory insurances;
(d) they will notify the Lender, not less than 14 days before the expiry of the
obligatory insurances, in the event of their not having received notice of
renewal instructions from that Shipowner or its agents and, in the event of
their receiving instructions to renew, they will promptly notify the Lender
of the terms of the instructions; and
(e) they will not set off against any sum recoverable in respect of a claim
relating to the Ship owned by that Shipowner under such obligatory
insurances any premiums or other amounts due to them or any other person
whether in respect of that Ship or otherwise, they waive any lien on the
policies, or any sums received under them, which they might have in respect
of such premiums or other amounts, and they will not cancel such obligatory
insurances by reason of non-payment of such premiums or other amounts, and
will arrange for a separate policy to be issued in respect of that Ship
forthwith upon being so requested by the Lender.
12.7 COPIES OF CERTIFICATES OF ENTRY. Each Shipowner shall ensure that any
protection and indemnity and/or war risks associations in which the Ship
owned by it is entered provides the Lender with:
(a) a certified copy of the certificate of entry for that Ship;
(b) a letter or letters of undertaking in such form as may be required by the
Lender; and
(c) a certified copy of each certificate of financial responsibility for
pollution by oil or other Environmentally Sensitive Material issued by the
relevant certifying authority in relation to that Ship,
PROVIDED THAT if any protection and indemnity and/or war risks associations
in which a Ship is entered does not provide the Lender with a certified
copy of the certificate of entry for that Ship, the Shipowner which owns
that Ship shall provide the Lender with a certified copy of the certificate
of entry for the Ship.
12.8 DEPOSIT OF ORIGINAL POLICIES. Each Shipowner shall ensure that all policies
relating to obligatory insurances effected by it are deposited with the
approved brokers through which the insurances are effected or renewed.
12.9 PAYMENT OF PREMIUMS. Each Shipowner shall punctually pay all premiums or
other sums payable in respect of the obligatory insurances effected by it
and produce all relevant receipts when so required by the Lender.
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12.10 GUARANTEES. Each Shipowner shall ensure that any guarantees required by a
protection and indemnity or war risks association are promptly issued and
remain in full force and effect.
12.11 COMPLIANCE WITH TERMS OF INSURANCES. No Shipowner shall do nor omit to do
(nor permit to be done or not to be done) any act or thing which would or
might render any obligatory insurance invalid, void, voidable or
unenforceable or render any sum payable under an obligatory insurance
repayable in whole or in part; and, in particular:
(a) each Shipowner shall take all necessary action and comply with all
requirements which may from time to time be applicable to the obligatory
insurances, and (without limiting the obligation contained in Clause
12.7(c)) ensure that the obligatory insurances are not made subject to any
exclusions or qualifications to which the Lender has not given its prior
approval;
(b) no Shipowner shall make any changes relating to the classification or
classification society or manager or operator of the Ship owned by it
approved by the underwriters of the obligatory insurances;
(c) each Shipowner shall make (and promptly supply copies to the Lender of)
all quarterly or other voyage declarations which may be required by the
protection and indemnity risks association in which the Ship owned by it
is entered to maintain cover for trading to the United States of America
and Exclusive Economic Zone (as defined in the United States Oil Pollution
Act 1990 or any other applicable legislation); and
(d) no Shipowner shall employ the Ship owned by it, nor allow it to be
employed, otherwise than in conformity with the terms and conditions of
the obligatory insurances, without first obtaining the consent of the
insurers and complying with any requirements (as to extra premium or
otherwise) which the insurers specify.
12.12 ALTERATION TO TERMS OF INSURANCES. No Shipowner shall either make or agree
to any alteration to the terms of any obligatory insurance nor waive any
right relating to any obligatory insurance.
12.13 SETTLEMENT OF CLAIMS. No Shipowner shall settle, compromise or abandon any
claim under any obligatory insurance for Total Loss or for a Major
Casualty, and shall do all things necessary and provide all documents,
evidence and information to enable the Lender to collect or recover any
moneys which at any time become payable in respect of the obligatory
insurances.
12.14 PROVISION OF COPIES OF COMMUNICATIONS. Each Shipowner shall provide the
Lender, promptly following the Lender's request, with copies of all
written communications between that Shipowner and:
(a) the approved brokers; and
(b) the approved protection and indemnity and/or war risks associations; and
(c) the approved insurance companies and/or underwriters, which relate
directly or indirectly to:
(i) that Shipowner's obligations relating to the obligatory insurances
including, without limitation, all requisite declarations and
payments of additional premiums or calls; and
34
(ii) any credit arrangements made between that Shipowner and any of the
persons referred to in paragraphs (a) or (b) relating wholly or
partly to the effecting or maintenance of the obligatory insurances.
12.15 PROVISION OF INFORMATION. In addition, each Shipowner shall promptly
provide the Lender (or any persons which it may designate) with any
information which the Lender (or any such designated person) requests for
the purpose of:
(a) obtaining or preparing any report from an independent marine insurance
broker as to the adequacy of the obligatory insurances effected or
proposed to be effected; and/or
(b) effecting, maintaining or renewing any such insurances as are referred to
in Clause 12.16 below or dealing with or considering any matters relating
to any such insurances,
and the Shipowners shall, forthwith upon demand, indemnify the Lender in
respect of all fees and other expenses incurred by or for the account of
the Lender in connection with any such report as is referred to in
paragraph (a).
12.16 MORTGAGEE'S INTEREST AND ADDITIONAL PERILS INSURANCES. The Lender shall be
entitled from time to time to effect, maintain and renew a mortgagee's
interest additional perils insurance in respect of any Ship, a mortgagee's
political risks insurance and a mortgagee's interest marine insurance in
such amounts, on such terms, through such insurers and generally in such
manner as the Lender may from time to time consider appropriate and the
Borrowers shall upon demand fully indemnify the Lender in respect of all
premiums and other expenses which are incurred in connection with or with
a view to effecting, maintaining or renewing any such insurance or dealing
with, or considering, any matter arising out of any such insurance.
13 SHIP COVENANTS
13.1 GENERAL. Each Borrower also undertakes with the Lender to comply with,
or to procure compliance with (as the case may be), with the following
provisions of this Clause 13 at all times during the Security Period,
except as the Lender may otherwise permit.
13.2 SHIP'S NAME AND REGISTRATION. Each Shipowner shall keep the Ship owned
by it registered in its name at the ship registry and port indicated in
Schedule 3, shall not do or allow to be done anything as a result of which
such registration might be cancelled or imperilled; and shall not change
the name or port of registry of the Ship owned by it.
13.3 REPAIR AND CLASSIFICATION. Each Shipowner shall keep the Ship owned by
it in a good and safe condition and state of repair:
(a) consistent with first-class ship ownership and management practice;
(b) so as to maintain that Ship's present class (namely that indicated in
Schedule 3) free of overdue recommendations and conditions affecting the
Ship's class; and
(c) so as to comply with all laws and regulations applicable to vessels
registered at ports in the flag state relevant to that Ship or to vessels
trading to any jurisdiction to which that Ship may trade from time to
time, including but not limited to the ISM Code and the ISPS Code.
13.4 MODIFICATION. No Shipowner shall make or allow any modification or
repairs to, or replacement of, any Ship or equipment installed on the Ship
which would or might materially alter the structure, type or performance
characteristics of any Ship or materially reduce its value.
35
13.5 REMOVAL OF PARTS. No Shipowner shall remove or allow the removal of any
material part of any Ship, or any item of equipment installed on any Ship,
unless the part or item so removed is forthwith replaced by a suitable
part or item which is in the same condition as or better condition than
the part or item removed, is free from any Security Interest or any right
in favour of any person other than the Lender and becomes on installation
on the relevant Ship the property of the relevant Shipowner and subject to
the security constituted by the relevant Mortgage PROVIDED THAT a
Shipowner may install equipment owned by a third party if the equipment
can be removed without any risk of damage to the Ship owned by it.
13.6 SURVEYS. Each Shipowner shall submit the Ship owned by it regularly to
all periodical or other surveys which may be required for classification
purposes and, if so required by the Lender provide the Lender, with copies
of all survey reports.
13.7 INSPECTION. Each Shipowner shall permit the Lender (by surveyors or
other persons appointed by it for that purpose) to board the Ship owned by
it at all reasonable times to inspect its condition or to satisfy
themselves about proposed or executed repairs and shall afford all proper
facilities for such inspections.
13.8 PREVENTION OF AND RELEASE FROM ARREST. Each Shipowner shall promptly
discharge:
(a) all liabilities which give or may give rise to maritime or possessory
liens on or claims enforceable against the Ship owned by it, her Earnings
or her Insurances;
(b) all taxes, dues and other amounts charged in respect of the Ship owned by
it, her Earnings or her Insurances; and
(c) all other outgoings whatsoever in respect of the Ship owned by it, her
Earnings or her Insurances,
and, forthwith upon receiving notice of the arrest of the Ship owned by
it, or of its detention in exercise or purported exercise of any lien or
claim, that Borrower shall procure its release by providing bail or
otherwise as the circumstances may require.
13.9 COMPLIANCE WITH LAWS ETC. Each Shipowner shall:
(a) comply, or procure compliance with the ISM Code, the ISPS Code, all
Environmental Laws and all other laws or regulations relating to the Ship
owned by it, its ownership, operation and management or to the business of
that Shipowner;
(b) not employ the Ship owned by it nor allow its employment in any manner
contrary to any law or regulation in any relevant jurisdiction including
but not limited to the ISM Code and the ISPS Code; and
(c) in the event of hostilities in any part of the world (whether war is
declared or not), not cause or permit the Ship owned by it to enter or
trade to any zone which is declared a war zone by any government or by the
Ship's war risks insurers unless the prior written consent of the Lender
has been given and that Shipowner has (at its expense) effected any
special, additional or modified insurance cover which the Lender may
require.
13.10 PROVISION OF INFORMATION. Each Borrower shall promptly provide the
Lender with any information which it requests regarding:
(a) the Ship owned by it, its employment, position and engagements;
(b) the Earnings and payments and amounts due to the master and crew of the
Ship owned by it;
36
(c) any expenses incurred, or likely to be incurred, in connection with the
operation, maintenance or repair of the Ship owned by it and any payments
made in respect of that Ship;
(d) any towages and salvages;
(e) its compliance, the Approved Manager's compliance, the compliance of the
Ship owned by it and (in the case of each Ship which is, or will be
subject to, a Bareboat Charter), the relevant Bareboat Charterer's
compliance, with the ISM Code and the ISPS Code,
and, upon the Lender's request, provide copies of any current charter
relating to the Ship owned by it, of any current charter guarantee and of
the Document of Compliance and the International Ship Security Certificate
in respect of the Ship.
13.11 NOTIFICATION OF CERTAIN EVENTS. Each Shipowner shall immediately notify
the Lender by fax, confirmed forthwith, by letter of:
(a) any casualty which is or is likely to be or to become a Major Casualty;
(b) any occurrence as a result of which the Ship owned by it has become or is,
by the passing of time or otherwise, likely to become a Total Loss;
(c) any requirement or recommendation made by any insurer or classification
society or by any competent authority which is not immediately complied
with;
(d) any arrest or detention of the Ship owned by it, any exercise or purported
exercise of any lien on that Ship or its Earnings or any requisition of
that Ship for hire;
(e) any intended dry docking of the Ship owned by it;
(f) any Environmental Claim made against that Shipowner or in connection with
the Ship owned by it, or any Environmental Incident;
(g) any claim for breach of the ISM Code or the ISPS Code being made against
that Shipowner, the Approved Manager or a Bareboat Charterer (as the case
may be) or otherwise in connection with the Ship owned by it; or
(h) any other matter, event or incident, actual or threatened, the effect of
which will or could lead to the ISM Code or the ISPS Code not being
complied with,
and that Shipowner shall keep the Lender advised in writing on a regular
basis and in such detail as the Lender shall require of that Shipowner's,
the Approved Manager's, a Bareboat Charterer's or any other person's
response to any of those events or matters.
13.12 RESTRICTIONS ON CHARTERING, APPOINTMENT OF MANAGERS ETC. No Shipowner
shall, in relation to the Ship owned by it:
(a) other than, in the case of each of "XXXXXX XXXXX", "GAS ARCTIC", "GAS
ICE", "SIR IVOR" and "LYNE" pursuant to the relevant Bareboat Charter, let
that Ship on demise charter for any period;
(b) other than, in the case of "GAS NEMESIS", the Gas Nemesis Time
Charterparty, enter into any time or consecutive voyage charter in respect
of that Ship for a term which exceeds, or which by virtue of any optional
extensions may exceed, 13 months;
(c) enter into any charter in relation to that Ship under which more than 2
months' hire (or the equivalent) is payable in advance;
37
(d) charter that Ship otherwise than on bona fide arm's length terms at the
time when that Ship is fixed;
(e) appoint a manager of that Ship other than the Approved Manager or agree to
any alteration to the terms of the Approved Manager's appointment;
(f) de-activate or lay up that Ship; or
(g) put that Ship into the possession of any person for the purpose of work
being done upon her in an amount exceeding or likely to exceed $500,000
(or the equivalent in any other currency) unless that person has first
given to the Lender and in terms satisfactory to it a written undertaking
not to exercise any lien on that Ship or the Earnings for the cost of such
work or any other reason.
13.13 NOTICE OF MORTGAGE. Each Shipowner shall:
(a) keep the relevant Mortgage registered against the Ship owned by it as a
valid first priority or first preferred mortgage; and
(b) carry on board that Ship a certified copy of the relevant Mortgage and
place and maintain in a conspicuous place in the navigation room and the
Master's cabin of that Ship a framed printed notice stating that that Ship
is mortgaged by that Shipowner to the Lender.
13.14 SHARING OF EARNINGS. No Borrower shall enter into any agreement or
arrangement for the sharing of any Earnings.
13.15 TIME CHARTER ASSIGNMENT. If any Borrower enters into any Charter (subject
to obtaining the consent of the Lender in accordance with Clause
13.12(b)), the relevant Borrower shall, at the request of the Lender,
execute in favour of the Lender a Charter Assignment in relation to such
Charter, and shall deliver to the Lender such other documents equivalent
to those referred to at paragraphs 3, 4 and 5 of Part A of Schedule 4
hereof as the Lender may require.
13.16 COMPLIANCE WITH INSURANCE AND SHIP COVENANTS. Each of Industrial,
Ventspils, Semichlaus, Oxford and Energetic shall procure the performance
by Unigas Kosan, Finaval and Petredec respectively of all the covenants
and undertakings to be observed, performed and complied with, by or on
behalf of each of Industrial, Ventspils, Semichlaus, Oxford and Energetic
respectively under Clause 12 (other than Clause 12.16) and Clause 13 and,
to the extent that each Bareboat Charterer duly performs and discharges
its obligations set out in this Clause 13.16 or to the further extent that
each Bareboat Charterer, by its performance of the relevant Bareboat
Charter, performs and discharges further obligations of Industrial,
Ventspils, Semichlaus, Energetic and Baroness (as the case may be)
contained in the Finance Documents, then such performance and discharge
shall, to that extent, be deemed due performance and discharge of
Industrial's, Ventspils', Semichlaus', Oxford's and Energetic's
obligations (as the case may be) under the Finance Documents.
14 SECURITY COVER
14.1 MINIMUM REQUIRED SECURITY COVER. Clause 14.2 applies if the Lender notifies
the Borrowers that the Asset Cover Ratio is below:
(a) at any time on or prior to 30 June 2009, 1.25 to 1; and
(b) at all times thereafter, 1.3 to 1.
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14.2 PROVISION OF ADDITIONAL SECURITY; PREPAYMENT. If the Lender serves a notice
on the Borrowers under Clause 14.1, the Borrowers shall, within 1 month
after the date on which the Lender's notice is served, either:
(a) provide, or ensure that a third party provides, additional security which,
in the reasonable opinion of the Lender, has a net realisable value at
least equal to the shortfall in the Asset Cover Ratio and is documented in
such terms as the Lender may approve or require; or
(b) prepay such part (at least) of the Loan as will eliminate the shortfall in
the Asset Cover Ratio.
14.3 VALUATION OF SHIPS. The market value of a Ship at any date is that shown by
the arithmetic average of two valuations, each prepared:
(a) as at a date not more than 14 days previously;
(b) by an independent sale and purchase shipbroker which the Lender has
approved or appointed for the purpose;
(c) with or without physical inspection of the Ship (as the Lender may
require);
(d) on the basis of a sale for prompt delivery for cash on normal arm's length
commercial terms as between a willing seller and a willing buyer, free of
any existing charter or other contract of employment; and
(e) after deducting the estimated amount of the usual and reasonable expenses
which would be incurred in connection with the sale.
14.4 VALUE OF ADDITIONAL VESSEL SECURITY. The net realisable value of any
additional security which is provided under Clause 14.2 and which consists
of a Security Interest over a vessel shall be that shown by a valuation
complying with the requirements of Clause 14.3.
14.5 VALUATIONS BINDING. Any valuation under Clause 14.2, 14.3 or 14.4 shall be
binding and conclusive as regards the Borrowers, as shall be any valuation
which the Lender makes of any additional security which does not consist of
or include a Security Interest.
14.6 PROVISION OF INFORMATION. The Borrowers shall promptly provide the Lender
and any shipbroker or expert acting under Clause 14.3 or 14.4 with any
information which the Lender or the shipbroker or expert may request for
the purposes of the valuation; and, if the Borrowers fail to provide the
information by the date specified in the request, the valuation may be made
on any basis and assumptions which the shipbroker or the Lender (or the
expert appointed by it) considers prudent.
14.7 PAYMENT OF VALUATION EXPENSES. Without prejudice to the generality of the
Borrowers' obligations under Clauses 19.2, 19.3 and 20.3, the Borrowers
shall, on demand, pay the Lender the amount of the fees and expenses of any
shipbroker or expert instructed by the Lender under this Clause and all
legal and other expenses incurred by the Lender in connection with any
matter arising out of this Clause.
14.8 APPLICATION OF PREPAYMENT. Clause 7 shall apply in relation to any
prepayment pursuant to Clause 14.2(b).
15 PAYMENTS AND CALCULATIONS
15.1 CURRENCY AND METHOD OF PAYMENTS. All payments to be made by any Borrower to
the Lender under a Finance Document shall be made to the Lender:
39
(a) by not later than 11.00 a.m. (New York City time) on the due date;
(b) in same day Dollar funds settled through the New York Clearing House
Interbank Payments System (or in such other Dollar funds and/or settled in
such other manner as the Lender shall specify as being customary at the
time for the settlement of international transactions of the type
contemplated by this Agreement); and
(c) to the account of the Lender (SWIFT address: GEBAGRAA) with Fortis Bank
N.V./S.A., Brussels (account number 291-0000000-49-USD-0; SWIFT address:
XXXXXXXX00X) through its US correspondent bank, JPMorgan Chase Bank, New
York City (SWIFT address: CHASEUS33) or to such other account with such
other bank as the Lender may from time to time notify to the Borrowers.
15.2 PAYMENT ON NON-BUSINESS DAY. If any payment by any Borrower under a Finance
Document would otherwise fall due on a day which is not a Business Day:
(a) the due date shall be extended to the next succeeding Business Day; or
(b) if the next succeeding Business Day falls in the next calendar month, the
due date shall be brought forward to the immediately preceding Business
Day,
and interest shall be payable during any extension under paragraph (a) at
the rate payable on the original due date.
15.3 BASIS FOR CALCULATION OF PERIODIC PAYMENTS. All interest and any other
payments under any Finance Document which are of an annual or periodic
nature shall accrue from day to day and shall be calculated on the basis of
the actual number of days elapsed and a 360 day year.
15.4 LENDER ACCOUNTS. The Lender shall maintain an account showing the amounts
advanced by the Lender and all other sums owing to the Lender from the
Borrowers and each Security Party under the Finance Documents and all
payments in respect of those amounts made by the Borrowers and any Security
Party.
15.5 ACCOUNTS PRIMA FACIE EVIDENCE. If the account maintained under Clauses 15.4
shows an amount to be owing by a Borrower or a Security Party to the
Lender, that account shall be prima facie evidence that that amount is
owing to the Lender.
16 APPLICATION OF RECEIPTS
16.1 NORMAL ORDER OF APPLICATION. Except as any Finance Document may otherwise
provide, any sums which are received or recovered by the Lender under or by
virtue of any Finance Document shall be applied:
(a) FIRST: in or towards satisfaction of any amounts then due and payable under
the Finance Documents (or any of them) in such order of application and/or
such proportions as the Lender may specify by notice to the Borrowers and
the Security Parties;
(b) SECONDLY: in retention of an amount equal to any amount not then due and
payable under any Finance Document but which the Lender, by notice to the
Borrowers and the Security Parties, states in its opinion will or may
become due and payable in the future and, upon those amounts becoming due
and payable, in or towards satisfaction of them in accordance with the
provisions of this Clause; and
(c) THIRDLY: any surplus shall be paid to the Borrowers or to any other person
appearing to be entitled to it.
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16.2 VARIATION OF ORDER OF APPLICATION. The Lender may, at its reasonable
discretion, by notice to the Borrowers and the Security Parties, provide
for a different manner of application from that set out in Clause 16.1
either as regards a specified sum or sums or as regards sums in a specified
category or categories.
16.3 NOTICE OF VARIATION OF ORDER OF APPLICATION. The Lender may give notices
under 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.
16.4 APPROPRIATION RIGHTS OVERRIDDEN. This Clause 16 and any notice which the
Lender gives under Clause 16.2 shall override any right of appropriation
possessed, and any appropriation made, by any Borrower or any Security
Party.
17 APPLICATION OF EARNINGS
17.1 PAYMENT OF EARNINGS. Each Shipowner undertakes with the Lender to ensure
that, throughout the Security Period:
(a) (subject only to the provisions of the General Assignments to which that
Shipowner is a party), all the Earnings of the Ship owned by it are paid to
the Earnings Account; and
(b) all payments by the Lender to a Borrower under each Transaction are paid to
the Earnings Account.
17.2 APPLICATION OF EARNINGS. Each Shipowner undertakes with the Lenders that
money from time to time credited to, or for the time being standing to the
credit of, the Earnings Account shall, unless and until an Event of Default
or Potential Event of Default shall have occurred (whereupon the provisions
of Clause 16.1 shall be and become applicable), be available for
application in the following manner:
(a) in or towards meeting the costs and expenses from time to time incurred by
or on behalf of the relevant Shipowner in connection with the operation of
the Ship owned by it;
(b) in or towards making payments of all amounts due and payable by the
Borrowers under this Agreement other than the payments of principal and
interest pursuant to Clauses 7.1 and 4.1;
(c) in or towards making the transfers to the Retention Account required
pursuant to Clause 17.3; and
(d) as to any surplus from time to time arising on the Earnings Account
following application as aforesaid, to be paid to the relevant Shipowner or
to whomsoever it may direct.
17.3 MONTHLY RETENTIONS. The Borrowers undertake with the Lender to ensure that,
on the date falling one month after the date on which the final Drawdown
Notice is served and on the same day in each subsequent month throughout
the Security Period, there is transferred to the Retention Account out of
the Earnings received in the Earnings Account during the preceding month:
(a) one-third of the amount of the repayment instalment falling due under
Clause 7 on the next Repayment Date; and
(b) the relevant fraction of the aggregate amount of interest on the Loan which
is payable on the next due date for payment of interest under this
Agreement.
41
The "RELEVANT FRACTION" is a fraction of which the numerator is 1 and the
denominator the number of months comprised in the then current Interest
Period (or, if the period is shorter, the number of months from the later
of the commencement of the current Interest Period or the last due date for
payment of interest to the next due date for payment of interest under this
Agreement).
17.4 SHORTFALL IN EARNINGS. If the aggregate Earnings received in the Earnings
Account are insufficient in any month for the required amount to be
transferred to the Retention Account under Clause 17.3, the Borrowers shall
make up the amount of the insufficiency on demand from the Lender; but,
without thereby prejudicing the Lender's right to make such demand at any
time, the Lender may permit the Borrowers to make up all or part of the
insufficiency by increasing the amount of any transfer under Clause 17.3
from the Earnings received in the next or subsequent months.
17.5 APPLICATION OF RETENTIONS. Until an Event of Default or a Potential Event
of Default occurs, the Lender shall on each Repayment Date and on each due
date for the payment of interest under this Agreement apply in accordance
with Clause 15.1 so much of the balance on the Retention Account as equals:
(a) the repayment instalment due on that Repayment Date; or
(b) the amount of interest payable on that interest payment date,
in discharge of the Borrowers' liability for that repayment instalment or
that interest.
17.6 INTEREST ACCRUED ON RETENTION ACCOUNT. Any credit balance on the Retention
Account shall bear interest at the rate from time to time offered by the
Lender to its customers for Dollar deposits of similar amounts and for
periods similar to those for which such balances appear to the Lender
likely to remain on the Retention Account.
17.7 RELEASE OF ACCRUED INTEREST. Interest accruing under Clause 17.6 shall be
released to the Borrowers on each Repayment Date unless an Event of Default
or a Potential Event of Default has occurred or the then credit balance on
the Retention Account is less than what would have been the balance had the
full amount required by Clause 17.3 been transferred in that and each
previous month.
17.8 LOCATION OF ACCOUNTS. Each Borrower shall promptly:
(a) comply with any requirement of the Lender as to the location or re-location
of the Earnings Account and the Retention Account (or either of them); and
(b) execute any documents which the Lender specifies to create or maintain in
favour of the Lender a Security Interest over (and/or rights of set-off,
consolidation or other rights in relation to) the Earnings Account and the
Retention Account.
17.9 DEBITS FOR EXPENSES ETC. The Lender shall be entitled (but not obliged)
from time to time to debit the Earnings Account without prior notice in
order to discharge any amount due and payable to it under Clause 19 or 20
or payment of which it has become entitled to demand under Clause 19 or 20.
17.10 BORROWERS' OBLIGATIONS UNAFFECTED. The provisions of this Clause 17 (as
distinct from a distribution effected under Clause 17.5) do not affect:
(a) the liability of the Borrowers to make payments of principal and interest
on the due dates; or
42
(b) any other liability or obligation of the Borrowers or any Security Party
under any Finance Document.
18 EVENTS OF DEFAULT
18.1 EVENTS OF DEFAULT. An Event of Default occurs if:
(a) any Borrower or any Security Party fails to pay when due or (if so payable)
on demand any sum payable under a Finance Document or under any document
relating to a Finance Document; or
(b) any breach occurs of Clause 8.2, 10.2, 10.3, 10.17, 10.18, 11.2, 11.3 or
14.1; or
(c) any breach by any Borrower or any Security Party occurs of any provision of
a Finance Document (other than a breach covered by paragraph (a) or (b))
if, in the opinion of the Lender, such default is capable of remedy and
such default continues unremedied 10 days after written notice from the
Lender requesting action to remedy the same; or
(d) (subject to any applicable grace period specified in any Finance Document)
any breach by any of the Borrowers or any Security Party occurs of any
provision of a Finance Document (other than a breach caused by paragraph
(a), (b) or (c)); or
(e) any representation, warranty or statement made by, or by an officer of, a
Borrower or a Security Party in a Finance Document or in the Drawdown
Notice or any other notice or document relating to a Finance Document is
untrue or misleading when it is made; or
(f) any of the following occurs in relation to any Financial Indebtedness of a
Relevant Person:
(i) any Financial Indebtedness of a Relevant Person is not paid when due
or, if so payable, on demand; or
(ii) any Financial Indebtedness of a Relevant Person becomes due and
payable or capable of being declared due and payable prior to its
stated maturity date as a consequence of any event of default; or
(iii) a lease, hire purchase agreement or charter creating any Financial
Indebtedness of a Relevant Person is terminated by the lessor or
owner or becomes capable of being terminated as a consequence of any
termination event; or
(iv) any overdraft, loan, note issuance, acceptance credit, letter of
credit, guarantee, foreign exchange or other facility, or any swap or
other derivative contract or transaction, relating to any Financial
Indebtedness of a Relevant Person ceases to be available or becomes
capable of being terminated as a result of any event of default, or
cash cover is required, or becomes capable of being required, in
respect of such a facility as a result of any event of default; or
(v) any Security Interest securing any Financial Indebtedness of a
Relevant Person becomes enforceable; or
(g) any of the following occurs in relation to a Relevant Person:
(i) a Relevant Person is unable to pay its debts as they fall due; or
(ii) any assets of a Relevant Person are subject to any form of execution,
attachment, arrest, sequestration or distress in respect of a sum of,
or sums aggregating, $500,000
43
or more or the equivalent in another currency and such execution,
attachment, arrest, sequestration or distress is not withdrawn
within 7 days of its commencement; or
(iii) any administrative or other receiver is appointed over any asset of
a Relevant Person; or
(iv) a Relevant Person makes any formal declaration of bankruptcy or any
formal statement to the effect that it is insolvent or likely to
become insolvent, or a winding up or administration order is made in
relation to a Relevant Person, or the members or directors of a
Relevant Person pass a resolution to the effect that it should be
wound up, placed in administration or cease to carry on business,
save that this paragraph does not apply to a fully solvent winding
up of a Relevant Person other than a Borrower which is, or is to be,
effected for the purposes of an amalgamation or reconstruction
previously approved by the Lender and effected not later than 3
months after the commencement of the winding up; or
(v) a petition is presented in any Pertinent Jurisdiction for the
winding up or administration, or the appointment of a provisional
liquidator, of a Relevant Person unless the petition is being
contested in good faith and on substantial grounds and is dismissed
or withdrawn within 30 days of the presentation of the petition; or
(vi) a Relevant Person petitions a court, or presents any proposal for,
any form of judicial or non-judicial suspension or deferral of
payments, reorganisation of its debt (or certain of its debt) or
arrangement with all or a substantial proportion (by number or
value) of its creditors or of any class of them or any such
suspension or deferral of payments, reorganisation or arrangement is
effected by court order, contract or otherwise; or
(vii) any meeting of the members or directors of a Relevant Person is
summoned for the purpose of considering a resolution or proposal to
authorise or take any action of a type described in paragraphs
(iii), (iv), (v) or (vi); or
(viii) in a Pertinent Jurisdiction other than England, any event occurs or
any procedure is commenced which, in the opinion of the Lender, is
similar to any of the foregoing; or
(h) any Borrower ceases or suspends carrying on its business or a part of its
business which, in the opinion of the Lender, is material in the context of
this Agreement; or
(i) it becomes unlawful in any Pertinent Jurisdiction or impossible:
(i) for any Borrower or any Security Party to discharge any liability
under a Finance Document or to comply with any other obligation which
the Lender considers material under a Finance Document; or
(ii) for the Lender to exercise or enforce any right under, or to enforce
any Security Interest created by, a Finance Document; or
(j) any consent necessary to enable any Shipowner or the Bareboat Charterer to
own, operate or charter the Ship owned or chartered by it (as the case may
be) or to enable any Borrower or any Security Party to comply with any
provision which the Lender considers material of a Finance Document, an MOA
or the Bareboat Charter is not granted, expires without being renewed, is
revoked or becomes liable to revocation or any condition of such a consent
is not fulfilled; or
(k) it appears to the Lender that, without its prior consent, either (i) a
change has occurred or probably has occurred after the date of this
Agreement in the ultimate beneficial ownership of any of the shares in any
Shipowner or the Shareholders or in the ultimate
44
control of the voting rights attaching to any of those shares or (ii) the
Vafias family (either directly and/or through companies beneficially owned
or controlled by the Vafias family and/or trusts or foundations of which
members of the Vafias family are beneficiaries) do not own and control at
least 30 per cent. of the issued share capital of the Holding Company; or
(l) any provision which the Lender considers material of a Finance Document
proves to have been or becomes invalid or unenforceable, or a Security
Interest created by a Finance Document proves to have been or becomes
invalid or unenforceable or such a Security Interest proves to have ranked
after, or loses its priority to, another Security Interest or any other
third party claim or interest; or
(m) the security constituted by a Finance Document is in any way imperilled or
in jeopardy; or
(n) an Event of Default (as defined in Section 14 of the Master Agreement)
occurs;
(o) the Master Agreement is terminated, cancelled, suspended, rescinded or
revoked or otherwise ceases to remain in full force and effect for any
reason except with the consent of the Lender; or
(p) any other event occurs or any other circumstances arise or develop
including, without limitation:
(i) a change in the financial position, state of affairs or prospects of
any Borrower or any Shareholder; or
(ii) any accident or other event involving any Ship or another vessel
owned, chartered or operated by a Relevant Person,
in the light of which the Borrowers are, or will later become, unable to
discharge their liabilities under the Finance Documents as they fall due.
18.2 ACTIONS FOLLOWING AN EVENT OF DEFAULT. On, or at any time after, the
occurrence of an Event of Default the Lender may:
(a) serve on the Borrowers a notice stating that all obligations of the Lender
to the Borrowers under this Agreement are terminated; and/or
(b) serve on the Borrowers a notice stating that the Loan, all accrued interest
and all other amounts accrued or owing under this Agreement are immediately
due and payable or are due and payable on demand; and/or
(c) take any other action which, as a result of the Event of Default or any
notice served under paragraph (a) or (b), the Lender is entitled to take
under any Finance Document or any applicable law.
18.3 TERMINATION OF COMMITMENT. On the service of a notice under Clause 18.2(a)
the Commitment, and all other obligations of the Lender to the Borrowers
under this Agreement, shall terminate.
18.4 ACCELERATION OF LOAN. On the service of a notice under Clause 18.2(b), the
Loan, all accrued interest and all other amounts accrued or owing from the
Borrowers or any Security Party under this Agreement and every other
Finance Document shall become immediately due and payable or, as the case
may be, payable on demand.
45
18.5 MULTIPLE NOTICES; ACTION WITHOUT NOTICE. The Lender may serve notices
Clauses 18.2(a) and (b) simultaneously or on different dates and it may
take any action referred to in Clause 18.2 if no such notice is served or
simultaneously with or at any time after the service of both or either of
such notices.
18.6 EXCLUSION OF LENDER LIABILITY. Neither the Lender nor any receiver or
manager appointed by the Lender, shall have any liability to a Borrower or
a Security Party:
(a) for any loss caused by an exercise of rights under, or enforcement of a
Security Interest created by, a Finance Document or by any failure or delay
to exercise such a right or to enforce such a Security Interest; or
(b) as mortgagee in possession or otherwise, for any income or principal amount
which might have been produced by or realised from any asset comprised in
such a Security Interest or for any reduction (however caused) in the value
of such an asset,
except that this does not exempt the Lender or a receiver or manager from
liability for losses shown to have been caused directly and mainly by the
dishonesty or the wilful misconduct of the Lender's own officers and
employees or (as the case may be) such receiver's or manager's own partners
or employees.
18.7 RELEVANT PERSONS. In this Clause 18 a "RELEVANT PERSON" means a Borrower, a
Security Party, and any company which is a subsidiary of a Borrower.
18.8 INTERPRETATION. In Clause 18.l(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.
19 FEES AND EXPENSES
19.1 ARRANGEMENT FEE. The Borrowers shall pay to the Lender on the date of this
Agreement, a non-refundable arrangement fee of $67,000.
19.2 COSTS OF NEGOTIATION, PREPARATION ETC. The Borrowers shall pay to the
Lender on its demand the amount of all expenses incurred by the Lender in
connection with the negotiation, preparation, execution or registration of
any Finance Document or any related document or with any transaction
contemplated by a Finance Document or a related document.
19.3 COSTS OF VARIATIONS, AMENDMENTS, ENFORCEMENT ETC. The Borrowers shall pay
to the Lender, on the Lender's demand, the amount of all expenses incurred
by the Lender in connection with:
(a) any amendment or supplement to a Finance Document, or any proposal for such
an amendment to be made;
(b) any consent or waiver by the Lender concerned under or in connection with a
Finance Document, or any request for such a consent or waiver;
(c) the valuation of any security provided or offered under Clause 14 or any
other matter relating to such security; or
(d) any step taken by the Lender with a view to the protection, exercise or
enforcement of any right or Security Interest created by a Finance Document
or for any similar purpose.
46
There shall be recoverable under paragraph (d) the full amount of all legal
expenses, whether or not such as would be allowed under rules of court or
any taxation or other procedure carried out under such rules.
19.4 DOCUMENTARY TAXES. The Borrowers shall promptly pay any tax payable on or
by reference to any Finance Document, and shall, on the Lender's demand,
fully indemnify the Lender against any claims, expenses, liabilities and
losses resulting from any failure or delay by the Borrowers to pay such a
tax.
19.5 CERTIFICATION OF AMOUNTS. A notice which is signed by 2 officers of the
Lender, which states that a specified amount, or aggregate amount, is due
to the Lender under this Clause 19 and which indicates (without necessarily
specifying a detailed breakdown) the matters in respect of which the
amount, or aggregate amount, is due shall be prima facie evidence that the
amount, or aggregate amount, is due.
20 INDEMNITIES
20.1 INDEMNITIES REGARDING BORROWING AND REPAYMENT OF LOAN. The Borrowers shall
fully indemnify made or brought against the Lender on its demand in respect
of all claims, expenses, liabilities and losses which are incurred by the
Lender, or which the Lender reasonably and with due diligence estimates
that it will incur, as a result of or in connection with:
(a) an Advance not being borrowed on the date specified in the Drawdown Notice
for any reason other than a default by the Lender;
(b) the receipt or recovery of all or any part of the Loan or an overdue sum
otherwise than on the last day of an Interest Period or other relevant
period;
(c) any failure (for whatever reason) by the Borrowers to make payment of any
amount due under a Finance Document on the due date or, if so payable, on
demand (after giving credit for any default interest paid by the Borrowers
on the amount concerned under Clause 6);
(d) the occurrence and/or continuance of an Event of Default or a Potential
Event of Default and/or the acceleration of repayment of the Loan under
Clause 18,
and in respect of any tax (other than tax on its overall net income) for
which the Lender is liable in connection with any amount paid or payable to
the Lender (whether for its own account or otherwise) under any Finance
Document.
20.2 BREAKAGE COSTS. Without limiting its generality, Clause 20.1 covers any
claim, expense, liability or loss, including a loss of a prospective
profit, incurred by the Lender:
(a) in liquidating or employing deposits from third parties acquired or
arranged to fund or maintain all or any part of the Loan and/or any overdue
amount (or an aggregate amount which includes the Loan or any overdue
amount); and
(b) in terminating, or otherwise in connection with, any interest and/or
currency swap or any other transaction entered into (whether with another
legal entity or with another office or department of the Lender) to hedge
any exposure arising under this Agreement or a number of transactions of
which this Agreement is one.
20.3 MISCELLANEOUS INDEMNITIES. The Borrowers shall fully indemnify the Lender
on its demand in respect of all claims, expenses, liabilities and losses
which may be made or brought against or incurred by the Lender, in any
country, as a result of or in connection with:
47
(a) any action taken, or omitted or neglected to be taken, under or in
connection with any Finance Document by the Lender or by any receiver
appointed under a Finance Document;
(b) any other Pertinent Matter,
other than claims, expenses, liabilities and losses which are shown to have
been directly and mainly caused by the dishonesty or wilful misconduct of
the officers or employees of the Lender.
Without prejudice to its generality, this Clause 20.3 covers any claims,
expenses, liabilities and losses which arise, or are asserted, under or in
connection with any law relating to safety at sea, the ISM Code, the ISPS
Code or any Environmental Law.
20.4 CURRENCY INDEMNITY. If any sum due from any Borrower or any Security Party
to the Lender under a Finance Document or under any order or judgment
relating to a Finance Document has to be converted from the currency in
which the Finance Document provided for the sum to be paid (the
"CONTRACTUAL CURRENCY") into another currency (the "PAYMENT CURRENCY") for
the purpose of:
(a) making or lodging any claim or proof against any Borrower or any Security
Party, whether in its liquidation, any arrangement involving it or
otherwise; or
(b) obtaining an order or judgment from any court or other tribunal; or
(c) enforcing any such order or judgment,
the Borrowers shall indemnify the Lender against the loss arising when the
amount of the payment actually received by the Lender is converted at the
available rate of exchange into the Contractual Currency.
In this Clause 20.4, the "AVAILABLE RATE OF EXCHANGE" means the rate at
which the Lender is able at the opening of business (London time) on the
Business Day after it receives the sum concerned to purchase the
Contractual Currency with the Payment Currency.
This Clause 20.4 creates a separate liability of the Borrowers which is
distinct from their other liabilities under the Finance Documents and which
shall not be merged in any judgment or order relating to those other
liabilities.
20.5 APPLICATION OF MASTER AGREEMENT. For the avoidance of doubt, Clause 20.4
does not apply in respect of sums due from the Borrowers to the Lender
under or in connection with the Master Agreement as to which sums the
provisions of Section 8 (Contractual Currency) of the Master Agreement
shall apply.
20.6 CERTIFICATION OF AMOUNTS. A notice which is signed by 2 officers of the
Lender, which states that a specified amount, or aggregate amount, is due
to the Lender under this Clause 20 and which indicates (without necessarily
specifying a detailed breakdown) the matters in respect of which the
amount, or aggregate amount, is due shall be prima facie evidence that the
amount, or aggregate amount, is due.
21 NO SET-OFF OR TAX DEDUCTION
21.1 NO DEDUCTIONS. All amounts due from the Borrowers under a Finance Document
shall be paid:
(a) without any form of set-off, cross-claim or condition; and
48
(b) free and clear of any tax deduction except a tax deduction which a Borrower
is required by law to make.
21.2 GROSSING-UP FOR TAXES. If a Borrower is required by law to make a tax
deduction from any payment:
(a) that Borrower shall notify the Lender as soon as it becomes aware of the
requirement;
(b) that Borrower shall pay the tax deducted to the appropriate taxation
authority promptly, and in any event before any fine or penalty arises; and
(c) the amount due in respect of the payment shall be increased by the amount
necessary to ensure that the Lender receives and retains (free from any
liability relating to the tax deduction) a net amount which, after the tax
deduction, is equal to the full amount which it would otherwise have
received.
21.3 EVIDENCE OF PAYMENT OF TAXES. Within one month after making any tax
deduction, the Borrower concerned shall deliver to the Lender documentary
evidence satisfactory to the Lender that the tax had been paid to the
appropriate taxation authority.
21.4 EXCLUSION OF TAX ON OVERALL NET INCOME. In this Clause 21 "TAX DEDUCTION"
means any deduction or withholding for or on account of any present or
future tax except tax on the Lender's overall net income.
21.5 APPLICATION OF MASTER AGREEMENT. For the avoidance of doubt, Clause 21 does
not apply in respect of sums due from the Borrowers to the Lender under or
in connection with the Master Agreement as to which sums the provisions of
Section 2(d) (Deduction or Withholding for Tax) of the Master Agreement
shall apply.
22 ILLEGALITY, ETC
22.1 ILLEGALITY. This Clause 22 applies if the Lender notifies the Borrowers
that it has become, or will with effect from a specified date, become:
(a) unlawful or prohibited as a result of the introduction of a new law, an
amendment to an existing law or a change in the manner in which an existing
law is or will be interpreted or applied; or
(b) contrary to, or inconsistent with, any regulation,
for the Lender to maintain or give effect to any of its obligations under
this Agreement in the manner contemplated by this Agreement.
22.2 NOTIFICATION AND EFFECT OF ILLEGALITY. On the Lender notifying the
Borrowers under Clause 22.1, the Commitment shall terminate; and thereupon
or, if later, on the date specified in the Lender's notice under Clause
22.1 as the date on which the notified event would become effective the
Borrowers shall prepay the Loan in full in accordance with Clause 7.
22.3 MITIGATION. If circumstances arise which would result in a notification
under Clause 22.1 then, without in any way limiting the rights of the
Lender under Clause 22.3, the Lender shall use reasonable endeavours to
transfer its obligations, liabilities and rights under this Agreement and
the Finance Documents to another office or financial institution not
affected by the circumstances but the Lender shall not be under any
obligation to take any such action if, in its opinion, to do would or
might:
(a) have an adverse effect on its business, operations or financial condition;
or
49
(b) involve it in any activity which is unlawful or prohibited or any activity
that is contrary to, or inconsistent with, any regulation; or
(c) involve it in any expense (unless indemnified to its satisfaction) or tax
disadvantage.
23 INCREASED COSTS
23.1 INCREASED COSTS. This Clause 23 applies if the Lender notifies the
Borrowers that it considers that as a result of:
(a) the introduction or alteration after the date of this Agreement of a law or
an alteration after the date of this Agreement in the manner in which a law
is interpreted or applied (disregarding any effect which relates to the
application to payments under this Agreement of a tax on the Lender's
overall net income); or
(b) complying with any regulation (including any which relates to capital
adequacy or liquidity controls or which affects the manner in which the
Lender allocates capital resources to its obligations under this Agreement)
which is introduced, or altered, or the interpretation or application of
which is altered, after the date of this Agreement,
the Lender (or a parent company of it) has incurred or will incur an
"INCREASED COST".
23.2 MEANING OF "INCREASED COST". In this Clause 23, "INCREASED COST" means:
(a) an additional or increased cost incurred as a result of, or in connection
with, the Lender having entered into, or being a party to, this Agreement
or having taken an assignment of rights under this Agreement, of funding or
maintaining the Commitment or performing its obligations under this
Agreement, or of having outstanding all or any part of the Loan or other
unpaid sums; or
(b) a reduction in the amount of any payment to the Lender under this Agreement
or in the effective return which such a payment represents to the Lender or
on its capital;
(c) an additional or increased cost of funding all or maintaining all or any of
the advances comprised in a class of advances formed by or including the
Loan or (as the case may require) the proportion of that cost attributable
to the Loan; or
(d) a liability to make a payment, or a return foregone, which is calculated by
reference to any amounts received or receivable by the Lender under this
Agreement,
but not an item attributable to a change in the rate of tax on the overall
net income of the Lender (or a parent company of it) or an item covered by
the indemnity for tax in Clause 20.1 or by Clause 21.
For the purposes of this Clause 23.2 the Lender may in good faith allocate
or spread costs and/or losses among its assets and liabilities (or any
class of its assets and liabilities) on such basis as it considers
appropriate.
23.3 PAYMENT OF INCREASED COSTS. The Borrowers shall pay to the Lender, on its
demand, the amounts which the Lender from time to time notifies the
Borrowers that it has specified to be necessary to compensate it for the
increased cost.
23.4 NOTICE OF PREPAYMENT. If the Borrowers are not willing to continue to
compensate the Lender for the increased cost under Clause 23.3, the
Borrowers may give the Lender not less than 14 days' notice of their
intention to prepay the Loan at the end of an Interest Period.
50
23.5 PREPAYMENT. A notice under Clause 23.4 shall be irrevocable; and on the
date specified in the Borrowers' notice of intended prepayment, the
Commitment shall terminate and the Borrowers shall prepay (without premium
or penalty) the Loan, together with accrued interest thereon at the
applicable rate plus the Margin.
23.6 APPLICATION OF PREPAYMENT. Clause 7 shall apply in relation to the
prepayment.
24 SET-OFF
24.1 APPLICATION OF CREDIT BALANCES. The Lender may, following the occurrence of
an Event of Default which is continuing:
(a) apply any balance (whether or not then due) which at any time stands to the
credit of any account in the name of a Borrower at any office in any
country of the Lender in or towards satisfaction of any sum then due from
that Borrower to the Lender under any of the Finance Documents; and
(b) for that purpose:
(i) break, or alter the maturity of, all or any part of a deposit of that
Borrower;
(ii) convert or translate all or any part of a deposit or other credit
balance into Dollars; and
(iii) enter into any other transaction or make any entry with regard to the
credit balance which the Lender considers appropriate.
24.2 EXISTING RIGHTS UNAFFECTED. The Lender shall not be obliged to exercise any
of its rights under Clause 24.1; and those rights shall be without
prejudice and in addition to any right of set-off, combination of accounts,
charge, lien or other right or remedy to which the Lender is entitled
(whether under the general law or any document).
24.3 NO SECURITY INTEREST. This Clause 24 gives the Lender a contractual right
of set-off only, and does not create any equitable charge or other Security
Interest over any credit balance of the Borrower.
25 TRANSFERS AND CHANGES IN LENDING OFFICE
25.1 TRANSFER BY BORROWERS. No Borrower may, without the consent of the Lender
transfer any of its rights or obligations under any Finance Document.
25.2 ASSIGNMENT BY LENDER. The Lender may assign all or any of the rights and
interests which it has under or by virtue of the Finance Documents without
the consent of any Borrower.
25.3 Rights OF ASSIGNEE. In respect of any breach of a warranty, undertaking,
condition or other provision of a Finance Document, or any
misrepresentation made in or in connection with a Finance Document, a
direct or indirect assignee of any of the Lender's rights or interests
under or by virtue of the Finance Documents shall be entitled to recover
damages by reference to the loss incurred by that assignee as a result of
the breach or misrepresentation irrespective of whether the Lender would
have incurred a loss of that kind or amount.
25.4 SUB-PARTICIPATION; SUBROGATION ASSIGNMENT. The Lender may sub-participate
all or any part of its rights and/or obligations under or in connection
with the Finance Documents without the consent of, or any notice to, any
Borrower; and the Lender may assign, in any
51
manner and terms agreed by it, all or any part of those rights to an
insurer or surety who has become subrogated to them.
25.5 DISCLOSURE OF INFORMATION. The Lender may disclose to a potential assignee
or sub-participant any information which the Lender has received in
relation to any Borrower, any Security Party or their affairs under or in
connection with any Finance Document, unless the information is clearly of
a confidential nature.
25.6 CHANGE OF LENDING OFFICE. The Lender may change its lending office by
giving notice to the Borrowers and the change shall become effective on the
later of:
(a) the date on which the Borrowers receive the notice; and
(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 Borrowers and the Lender and, if the document relates to a Finance
Document to which a Security Party is party, by that Security Party.
26.2 EXCLUSION OF OTHER OR IMPLIED VARIATIONS. Except for a document which
satisfies the requirements of Clause 26.1, no document, and no act, course
of conduct, failure or neglect to act, delay or acquiescence on the part of
the Lender (or any person acting on its behalf) shall result in the Lender
(or any person acting on its behalf) being taken to have varied, waived,
suspended or limited, or being precluded (permanently or temporarily) from
enforcing, relying on or exercising:
(a) a provision of this Agreement or another Finance Document; or
(b) an Event of Default; or
(c) a breach by a Borrower or a Security Party of an obligation under a Finance
Document or the general law; or
(d) any right or remedy conferred by any Finance Document or by the general
law;
and there shall not be implied into any Finance Document any term or
condition requiring any such provision to be enforced, or such right or
remedy to be exercised, within a certain or reasonable time.
27 NOTICES
27.1 GENERAL. Unless otherwise specifically provided, any notice under or in
connection with any Finance Document shall be given by letter or fax; and
references in the Finance Documents to written notices, notices in writing
and notices signed by particular persons shall be construed accordingly.
27.2 ADDRESSES FOR COMMUNICATIONS. A notice shall be sent:
(a) to a Borrower:
c/o Stealthgas Inc.
000 Xxxxxxxxx Xxxxxx
Xxxxxxxx 000 00
00
Xxxxxx
Fax No:x00 000 000 0000
(b) to the Lender:
Fortis Bank N.V./S.A.
000 Xxxxxxx Xxxxxx
000 00 Xxxxxx
Xxxxxx
Fax No: x00 000 000 0000
and in the event that a notice concerns
the Master Agreement, with a copy to:
Fortis Bank Oslo
Xxxxxx XXX Xxxx 00
0000 Xxxx
Xxxxxx
Fax No:+ 00 0000 0000
or to such other address as the relevant party may notify the other.
27.3 EFFECTIVE DATE OF NOTICES. Subject to Clauses 27.4 and 27.5:
(a) a notice which is delivered personally or posted shall be deemed to be
served, and shall take effect, at the time when it is delivered; and
(b) a notice which is sent by telex or fax shall be deemed to be served, and
shall take effect, 2 hours after its transmission is completed.
27.4 SERVICE OUTSIDE BUSINESS HOURS. However, if under Clause 27.3 a notice
would be deemed to be served:
(a) on a day which is not a business day in the place of receipt; or
(b) on such a business day, but after 5 p.m. local time,
the notice shall (subject to Clause 27.5) be deemed to be served, and shall
take effect, at 9 a.m. on the next day which is such a business day.
27.5 ILLEGIBLE NOTICES. Clauses 27.3 and 27.4 do not apply if the recipient of a
notice notifies the sender within 1 hour after the time at which the notice
would otherwise be deemed to be served that the notice has been received in
a form which is illegible in a material respect.
27.6 ENGLISH LANGUAGE. Any notice under or in connection with a Finance Document
shall be in English.
27.7 VALID NOTICES. A notice under or in connection with a Finance Document
shall not be invalid by reason that its contents or the manner of serving
it do not comply with the requirements of this Agreement or, where
appropriate, any other Finance Document under which it is served if:
(a) the failure to serve it in accordance with the requirements of this
Agreement or other Finance Document, as the case may be, has not caused any
party to suffer any significant loss or prejudice; or
53
(b) in the case of incorrect and/or incomplete contents, it should have been
reasonably clear to the party on which the notice was served what the
correct or missing particulars should have been.
27.8 MEANING OF "NOTICE". In this Clause 28 "NOTICE" includes any demand,
consent, authorisation, approval, instruction, waiver or other
communication.
28 JOINT AND SEVERAL LIABILITY
28.1 GENERAL. All liabilities and obligations of the Borrowers under this
Agreement shall, whether expressed to be so or not, be several and, if and
to the extent consistent with Clause 28.2, joint.
28.2 NO IMPAIRMENT OF BORROWER'S OBLIGATIONS. The liabilities and obligations of
a Borrower shall not be impaired by:
(a) this Agreement being or later becoming void, unenforceable or illegal as
regards any other Borrower;
(b) the Lender entering into any rescheduling, refinancing or other arrangement
of any kind with any other Borrower;
(c) the Lender releasing any other Borrower or any Security Interest created by
a Finance Document; or
(d) any combination of the foregoing.
28.3 PRINCIPAL DEBTORS. Each Borrower declares that it is and will, throughout
the Security Period, remain a principal debtor for all amounts owing under
this Agreement and the Finance Documents and no Borrower shall in any
circumstances be construed to be a surety for the obligations of any other
Borrower under this Agreement.
28.4 SUBORDINATION. Subject to Clause 28.5, during the Security Period, no
Borrower shall:
(a) claim any amount which may be due to it from any other Borrower whether in
respect of a payment made, or matter arising out of, this Agreement or any
Finance Document, or any matter unconnected with this Agreement or any
Finance Document; or
(b) take or enforce any form of security from any other Borrower for such an
amount, or in any other way seek to have recourse in respect of such an
amount against any asset of any other Borrower; or
(c) set off such an amount against any sum due from it to any other Borrower;
or
(d) prove or claim for such an amount in any liquidation, administration,
arrangement or similar procedure involving any other Borrower or other
Security Party; or
(e) exercise or assert any combination of the foregoing.
28.5 BORROWER'S REQUIRED ACTION. If during the Security Period, the Lender, by
notice to a Borrower, requires it to take any action referred to in
paragraphs (a) to (d) of Clause 28.4, in relation to any other Borrower,
that Borrower shall take that action as soon as practicable after receiving
the Lender's notice.
54
29 SUPPLEMENTAL
29.1 RIGHTS CUMULATIVE, NON-EXCLUSIVE. The rights and remedies which the Finance
Documents give to the Lender are:
(a) cumulative;
(b) may be exercised as often as appears expedient; and
(c) shall not, unless a Finance Document explicitly and specifically states so,
be taken to exclude or limit any right or remedy conferred by any law.
29.2 SEVERABILITY OF PROVISIONS. If any provision of a Finance Document is or
subsequently becomes void, unenforceable or illegal, that shall not affect
the validity, enforceability or legality of the other provisions of that
Finance Document or of the provisions of any other Finance Document.
29.3 COUNTERPARTS. A Finance Document may be executed in any number of
counterparts.
29.4 THIRD PARTY RIGHTS. A person who is not a party to this Agreement has no
right under the Contracts (Rights of Third Parties) Xxx 0000 to enforce or
to enjoy the benefit of any term of this Agreement.
30 LAW AND JURISDICTION
30.1 ENGLISH LAW. This Agreement shall be governed by, and construed in
accordance with, English law.
30.2 EXCLUSIVE ENGLISH JURISDICTION. Subject to Clause 30.3, the courts of
England shall have exclusive jurisdiction to settle any disputes which may
arise out of or in connection with this Agreement.
30.3 CHOICE OF FORUM FOR THE EXCLUSIVE BENEFIT OF THE LENDER. Clause 30.2 is for
the exclusive benefit of the Lender, which reserves the rights:
(a) to commence proceedings in relation to any matter which arises out of or in
connection with this Agreement in the courts of any country other than
England and which have or claim jurisdiction to that matter; and
(b) to commence such proceedings in the courts of any such country or countries
concurrently with or in addition to proceedings in England or without
commencing proceedings in England. Neither Borrower shall commence any
proceedings in any country other than England in relation to a matter which
arises out of or in connection with this Agreement.
30.4 PROCESS AGENT. Each Borrower irrevocably appoints Xxxxxxxx Xxxxxx at its
registered office for the time being, presently at Beaufort House, 00 Xx.
Xxxxxxx Xxxxxx, Xxxxxx XX0X 0XX, Xxxxxxx, to act as its agent to receive
and accept on its behalf any process or other document relating to any
proceedings in the English courts which are connected with this Agreement.
30.5 LENDER'S RIGHTS UNAFFECTED. Nothing in this Clause 30 shall exclude or
limit any right which the Lender may have (whether under the law of any
country, an international convention or otherwise) with regard to the
bringing of proceedings, the service of process, the recognition or
enforcement of a judgment or any similar or related matter in any
jurisdiction.
55
30.6 MEANING OF "PROCEEDINGS". In this Clause 30, "PROCEEDINGS" means
proceedings of any kind, including an application for a provisional or
protective measure.
THIS AGREEMENT has been entered into on the date stated at the beginning of this
Agreement.
56
SCHEDULE 1
DRAWDOWN NOTICE
To: Fortis Bank (Nederland) N.V.
000 Xxxxxxx Xxxxxx
000 00 Xxxxxx
Xxxxxx
Attention: Xxxxx Xxxxxx
2006
DRAWDOWN NOTICE
1 We refer to the loan agreement (the "LOAN AGREEMENT") dated [o] May 2006
and made between us, as Borrowers, and you, as Lender, in connection with a
facility of up to US$79,850,000. Terms defined in the Loan Agreement have
their defined meanings when used in this Drawdown Notice.
2 We request to borrow [the Refinancing Advance] [a New Ship Advance in
relation to "[o]"] as follows:
(a) Amount: US$[o];
(b) Drawdown Date: [o];
(c) Duration of the first Interest Period shall be [o] months;
(d) Payment instructions : account in our name and numbered [o] with [o] of
[o].
3 We represent and warrant that:
(e) the representations and warranties in Clause 9 of the Loan Agreement would
remain true and not misleading if repeated on the date of this notice with
reference to the circumstances now existing;
(f) no Event of Default or Potential Event of Default has occurred or will
result from the borrowing of the Loan.
4 This notice cannot be revoked without the prior consent of the Lender.
[Name of Signatory]
------------------------
Authorised Signatory
for and on behalf of
MATRIX GAS TRADING LTD., VCM TRADING LTD.,
GENEVE BUTANE INC., LPGONE LTD.,
SEMICHLAUS EXPORTS LTD., VENTSPILS GASES LTD.,
PACIFIC GASES LTD., ARACRUZ TRADING LTD.,
INDUSTRIAL MATERIALS INC., ENERGETIC PENINSULA LIMITED, OXFORDGAS
LIMITED, OCEAN BLUE LIMITED AND STEALTHGAS INC.
57
SCHEDULE 2
DETAILS OF BORROWERS
SHAREHOLDER(S), EACH
COUNTRY OF AUTHORISED ISSUED SHARE INCORPORATED IN THE
BORROWER REGISTERED ADDRESS INCORPORATION SHARE CAPITAL CAPITAL XXXXXXXX ISLANDS
------------------------------------------------------------------------------------------------------------------------------
Aracruz Trading Ltd. Trust Company Complex, Xxxxxxxx Islands 100 registered 100 registered Xxxxxxx Enterprises S.A.
Ajeltake Road, Ajeltake and/or bearer shares by way of
Island, Majuro, Marshall shares of no stock certificate
Islands, MH96960 par value no. 1
------------------------------------------------------------------------------------------------------------------------------
Geneve Butane Inc. Trust Company Complex, Xxxxxxxx Islands 100 registered 100 registered Access Consultants Co.
Ajeltake Road, Ajeltake and/or bearer shares by way of
Island, Majuro, Marshall shares of no stock certificate
Islands, MH96960 par value no. 1
------------------------------------------------------------------------------------------------------------------------------
Industrial Materials Trust Company Complex, Xxxxxxxx Islands 100 registered 100 registered Lyonet Holdings Corp.
Inc. Ajeltake Road, Ajeltake and/or bearer shares by way of
Island, Majuro, Marshall shares of no stock certificate
Islands, MH96960 par value no. 1
------------------------------------------------------------------------------------------------------------------------------
Lpgone Ltd. Trust Company Complex, Xxxxxxxx Islands 100 registered 100 registered Atlas Investments S.A.
Ajeltake Road, Ajeltake and/or bearer shares by way of
Island, Majuro, Marshall shares of no stock certificate
Islands, MH96960 par value no. 1
------------------------------------------------------------------------------------------------------------------------------
Matrix Gas Trading Trust Company Complex, Xxxxxxxx Islands 100 registered 100 registered Xxxxxxx Trading S.A.
Ltd. Ajeltake Road, Ajeltake and/or bearer shares by way of
Island, Majuro, Marshall shares of no stock
Islands, MH96960 par value certificate no. 1
------------------------------------------------------------------------------------------------------------------------------
58
------------------------------------------------------------------------------------------------------------------------------
Pacific Gases Ltd. 000/0 Xx. Xxxxx Xxxxxx Xxxxx 0000 shares of 500 shares of LM1 Alexis Shipholding X.X.
Xxxxxxxx, Malta LM1 each each, each 20% (325 shares) and Grazia
paid up Maritime Ltd. (175
shares)
------------------------------------------------------------------------------------------------------------------------------
Semichlaus Exports 000/0 Xx. Xxxxx Xxxxxx Xxxxx 0000 shares of 500 shares of LM1 Xxxxx Properties Co.
Ltd. Xxxxxxxx, Xxxxx XX0 each each, each 20% (325 shares) and Aubine
paid up Services Ltd. (175
shares)
------------------------------------------------------------------------------------------------------------------------------
VCM Trading Ltd. Trust Company Complex, Xxxxxxxx Islands 100 registered 100 registered Leader Investments Inc.
Ajeltake Road, and/or bearer shares by way of
Ajeltake Island, shares of no stock certificate
Majuro, Marshall par value no. 1
Islands, MH96960
------------------------------------------------------------------------------------------------------------------------------
Ventspils Gases Ltd. 000/0 Xx. Xxxxx Xxxxxx Xxxxx 0000 shares of 500 shares of LM1 Xxxxxx Trading Limited
Valletta, Malta LM1 each each, each 20% (325 shares) and Celidon
paid up Investments Inc. (175
shares)
------------------------------------------------------------------------------------------------------------------------------
Oxfordgas Limited Trust Company Complex, Xxxxxxxx Islands 100 registered 100 registered Xxxxxx Trading Company
Ajeltake Road, Ajeltake and/or bearer shares by way of
Island, Majuro, Marshall shares of no stock
Islands, MH96960 par value certificate no. 1
------------------------------------------------------------------------------------------------------------------------------
Energetic Peninsula [o], Hong Kong Hong Kong 1000 registered 1000 registered Stealthgas Inc.
Limited shares of HK$1 shares by way of
each share certificate
no. [1]
------------------------------------------------------------------------------------------------------------------------------
59
----------------------------------------------------------------------------------------------------------------------------
Ocean Blue Limited Trust Company Complex, Xxxxxxxx Islands 100 registered 100 registered Neutron Marine Corp.
Ajeltake Road, Ajeltake and/or bearer shares by way
Island, Majuro, Marshall shares of no of stock
Islands, MH96960 par value certificate no. 1
----------------------------------------------------------------------------------------------------------------------------
The shares are publicly
Stealthgas Inc. Trust Company Complex, Xxxxxxxx Islands 50,000,000 14,000,000 traded
Ajeltake Road, Ajeltake registered registered
Island, Majuro, Marshall shares of $0.01 shares of $0.01
Islands, MH96960 each and each
5,000,000
shares of
preferred stock
of $0.01 each
----------------------------------------------------------------------------------------------------------------------------
60
SCHEDULE 3
DETAILS OF SHIPS
-------------------------------------------------------------------------------------------------------------------
SHIP FLAG OWNER CLASS NOTATION CLASSIFICATION SOCIETY
-------------------------------------------------------------------------------------------------------------------
"XXXXXX XXXXX Panama Industrial NS* (Tanker, Liquefied Gases-Maximum Nippon Kaiji Kyokai
Pressure 1.77 MPa and Minimum
Temperature 0(degree)C Type 2PG) MNS*
-------------------------------------------------------------------------------------------------------------------
"GAS AMAZON" Xxxxxxxx Xxxxxxx Xxxxxxx 0 ^HULL ^MACH Liquefied gas carrier Bureau Veritas
Unrestricted navigation ^AUT UMS
-------------------------------------------------------------------------------------------------------------------
"GAS ARCTIC" Malta Ventspils C ^Liquefied Gas Carrier Unrestricted RINA
Navigation, ^ AUT-UMS; MON-SHAPT; ICE CLASS
IB
-------------------------------------------------------------------------------------------------------------------
"GAS COURCHEVEL" Xxxxxxxx Islands Geneve 1 ^HULL ^MACH Liquefied gas carrier Bureau Veritas
Unrestricted navigation ICE CLASS
1C ^AUT UMS
-------------------------------------------------------------------------------------------------------------------
"GAS EMPEROR" Cyprus Pacific 1 ^HULL ^MACH Liquefied gas carrier Bureau Veritas
Unrestricted navigation
-------------------------------------------------------------------------------------------------------------------
"GAS ICE" Malta Semichlaus C ^Liquefied Gas Carrier Unrestricted RINA
Navigation, ^ AUT-UMS; MON-SHAPT; ICE CLASS
IB
-------------------------------------------------------------------------------------------------------------------
"GAS PROPHET" Xxxxxxxx Islands VCM NS* (Tanker Liquefied Gases - Maximum Nippon Kaiji Kyokai
Pressure 1.77 MPa and Minimum Temperature
0(degree)C Type 2PG) MNS*
-------------------------------------------------------------------------------------------------------------------
61
-------------------------------------------------------------------------------------------------------------------
"GAS TINY" Xxxxxxxx Islands Lpgone 1 ^HULL ^MACH Liquefied gas carrier Bureau Veritas
Unrestricted navigation
-------------------------------------------------------------------------------------------------------------------
"GAS SHANGHAI" Xxxxxxxx Xxxxxxx Xxxxxx xX0, Liquefied gas carrier, (E), American Bureau of
^AMS Shipping
-------------------------------------------------------------------------------------------------------------------
"SIR IVOR" Hong Kong Energetic +100A1 (Liquefied Gas Carrier) IMO type II Lloyd's Register of
PG Shipping
-------------------------------------------------------------------------------------------------------------------
"LYNE" Panama Oxfordgas NS*MNS* (Tanker, Liquefied Gas) Nippon Kaiji Kyokai
-------------------------------------------------------------------------------------------------------------------
"GAS NEMESIS" Xxxxxxxx Islands Ocean NS* (Tanker, Liquefied Gases, Maximum Nippon Kaiji Kyokai
Pressure 18.0kg/cm(2) and Miniumum
Temperature 0(degree)C, Type 2PG1 MNS*
-------------------------------------------------------------------------------------------------------------------
62
SCHEDULE 4
CONDITION PRECEDENT DOCUMENTS
PART A
The following are the documents referred to in Clause 8.1 (a).
1 A duly executed original of each Finance Document (and of each document
required to be delivered by each Finance Document) other than those
referred to in Part B or Part C.
2 Copies of the constitutional documents of each Borrower and each Security
Party.
3 Copies of resolutions of the shareholders and directors of each Borrower
and each Security Party authorising the execution of each of the Finance
Documents to which that Borrower or that Security Party is a party and, in
the case of a Borrower, authorising named officers to give the Drawdown
Notices and other notices under this Agreement, and (a) in the case of each
Buyer, ratifying the execution of the MOA to which it is a party and (b) in
the case of each Shipowner which is a party to a Bareboat Charter,
ratifying the execution of the Bareboat Charter to which it is a party.
4 The original of any power of attorney under which any Finance Document is
executed on behalf of the Borrower or a Security Party.
5 Copies of all consents which any Borrower or any Security Party requires to
enter into, or make any payment under, any Finance Document or an MOA.
6 The originals of any mandates or other documents required in connection
with the opening or operation of the Earnings Account and the Retention
Account and all other information required by the Lender in relation to its
"know your customer" regulations (whether in connection with the opening of
the Earnings Account, the Retention Account or otherwise).
7 Documentary evidence that the agent for service of process named in Clause
30 has accepted its appointment.
8 If the Lender so requires, in respect of any of the documents referred to
above, a certified English translation prepared by a translator approved by
the Lender.
63
PART B
The following are the documents referred to in Clause 8.1(b).
1 A duly executed original of the Mortgage, the General Assignment and, if
applicable, the Deed of Covenant (and of each document to be delivered
under each of them) relating to each Existing Ship.
2 A duly executed original of the Xxxxxx Xxxxx Bareboat Charter Assignment,
the Xxxxxx Xxxxx Charterer's Insurance Assignments, the Gas Arctic
Tripartite Agreement and the Gas Ice Tripartite Agreement (and of each
document to be delivered under each of them).
3 Documentary evidence that:
(a) in accordance with the information contained in Schedule 3, each Existing
Ship is definitively and permanently registered in the name of the relevant
Shipowner under the flag and at the port specified in Schedule 3;
(b) each of "GAS ARCTIC" and "GAS ICE" is registered in the name of Finaval at
the bareboat charter registry of Palermo, Italy and notice of the Lender's
Mortgage over each such Ship has been included within the Ship's
certificate of registration at the Palermo bareboat charter registry;
(c) each Existing Ship is in the absolute and unencumbered ownership of its
Shipowner save as contemplated by the Finance Documents;
(d) each Existing Ship maintains the class as set out in Schedule 3 with the
relevant classification society free of all overdue recommendations and
conditions of such classification society;
(e) the Mortgage relating to each Existing Ship has been duly registered
against that Ship as a valid first preferred or priority (as the case may
be) ship mortgage in accordance with the laws of the relevant flag state;
and
(f) each Existing Ship is insured in accordance with the provisions of this
Agreement and all requirements therein in respect of insurances have been
complied with.
3 In the case of each of "XXXXXX XXXXX", "GAS ARCTIC" and "GAS ICE",
documentary evidence that:
(a) each such Existing Ship is operating under the Bareboat Charter relative to
it;
(b) copies of the constitutional documents of each Bareboat Charterer (other
than Petredec);
(c) copies of resolutions of the directors of each Bareboat Charterer (other
than Petredec) authorising the execution of the Finance Documents to which
it is a party; and
(d) the original power of attorney under which any Finance Document is executed
on behalf of a Bareboat Charterer (other than Petredec).
4 Documents establishing that each Existing Ship will, as from the Drawdown
Date relative to the Refinancing Advance, be managed by the applicable
Approved Manager on terms acceptable to the Lender, together with, in
relation to each Existing Ship:
(a) a letter of undertaking executed by the applicable Approved Manager in
favour of the Lender in the terms required by the Lender agreeing certain
matters in relation to the management of that Existing Ship and
subordinating the rights of the Approved Manager
64
against the relevant Shipowner to the rights of the Lender under the
Finance Documents; and
(b) copies of the Approved Manager's Document of Compliance and the Safety
Management Certificate and International Ship Security Certificate in
respect of that Existing Ship (together with any other details of the
applicable safety management system which the Lender requires).
5 Satisfactory valuations of each Existing Ship addressed to the Lender,
stated to be for the purposes of this Agreement and dated not earlier than
30 days before the Drawdown Date for the Refinancing Advance, from 2
independent London sale and purchase shipbroker selected by the Lender.
6 A favourable opinion from an independent insurance consultant acceptable to
the Lender on such matters relating to the insurances for the Existing
Ships as the Lender may approve.
7 Favourable legal opinions from lawyers appointed by the Lender on such
matters concerning the laws of Cyprus, Malta, Panama, the Xxxxxxxx Islands,
Italy and such other relevant jurisdiction as the Lender may require.
PART C
The following are the documents referred to in Clause 8.1(c). In this Part C of
Schedule 4, "RELEVANT SHIP" means the New Ship whose acquisition is to be
financed by the New Ship Advance being drawn down on the relevant Drawdown Date.
1 Copies of resolutions of the directors of the relevant New Shipowner
authorising the execution of each of the Finance Documents in relation to
the Relevant Ship and ratifying the execution of the MOA in relation to
that Relevant Ship.
2 The original of any power of attorney under which any Finance Document in
relation to the Relevant Ship is executed on behalf of the relevant New
Shipowner.
3 A duly executed original of the Mortgage, the General Assignment and, if
applicable, the Deed of Covenant for the Relevant Ship (and of each
document to be delivered under each of them).
4 Copies of the MOA and, if applicable, the Bareboat Charters applicable to
the Relevant Ship and all addenda thereto and of all documents signed or
issued by the relevant New Shipowner, the relevant Seller and the relevant
Bareboat Charterer under or in connection with any of them.
5 Documentary evidence that:
(a) the Relevant Ship has been unconditionally delivered to, and accepted by,
the relevant New Shipowner under the relevant MOA and the full purchase
price payable under that MOA (in addition to the part financed by the
relevant Advance) has been duly paid;
(b) the Relevant Ship is definitively and permanently registered in the name of
the relevant New Shipowner under the flag and at the port specified in
Schedule 3;
(c) the Relevant Ship is in the absolute and unencumbered ownership of the
relevant New Shipowner save as contemplated by the Finance Documents;
65
(d) the Relevant Ship maintains the class as set out in Schedule 3 with the
relevant classification society free of all overdue recommendations and
conditions of such classification society;
(e) the Mortgage relative to the Relevant Ship has been duly registered or
recorded (as the case may be) against the Relevant Ship as a valid first
priority or preferred ship mortgage in accordance with the laws of the
relevant flag state; and
(f) the Relevant Ship is insured in accordance with the provisions of this
Agreement and all requirements therein in respect of insurances have been
complied with.
6 Documents establishing that each Relevant Ship will, as from the Drawdown
Date relative to the relevant New Ship Advance, be managed by the
applicable Approved Manager on terms acceptable to the Lender, together
with:
(a) a letter of undertaking executed by the Approved Manager in favour of the
Lender in the terms required by the Lender agreeing certain matters in
relation to the management of the Relevant Ship and subordinating the
rights of the Approved Manager against the relevant New Shipowner to the
rights of the Lender under the Finance Documents; and
(b) copies of the Approved Manager's Document of Compliance and the Safety
Management Certificate and International Ship Security Certificate in
respect of the Relevant Ship (together with any other details of the
applicable safety management system which the Lender requires).
7 Two valuations (at the cost of the Borrower) of the Relevant Ship,
addressed to the Lender, stated to be for the purpose of this Agreement and
dated not earlier than 15 days before the relevant Drawdown Date, each from
an independent London sale and purchase shipbroker selected by the Lender.
8 If the Relevant Ship is "SIR IVOR" or "LYNE":
(a) a duly executed original of the Tripartite Agreement relative to the
Relevant Ship (and of each document to be delivered pursuant thereto);
(b) documentary evidence that the Relevant Ship has been unconditionally
delivered by the relevant New Shipowner to, and accepted by, the relevant
Bareboat Charterer for operation under the relevant Bareboat Charter;
(c) copies of the constitutional documents of Petredec;
(d) copies of resolutions of the directors of Petredec authorising the
execution of the relevant Tripartite Agreement and ratifying its entry into
the relevant Bareboat Charter; and
(e) the original power of attorney under which any Finance Document is executed
on behalf of Petredec.
9 If the Relevant Ship is "GAS NEMESIS":
(a) a duly executed original of the Gas Nemesis Charter Assignment (and of each
document to be delivered pursuant thereto); and
(b) documentary evidence that "GAS NEMESIS" is operating under the Gas Nemesis
Time Charterparty.
66
10 Such documentary evidence as the Lender and its legal advisers may require
in relation to the due authorisation and execution by the Seller of the
Relevant Ship the MOA to which it is a party and of all documents to be
executed by that Seller under that MOA.
11 Favourable legal opinions from lawyers appointed by the Lender on such
matters concerning the laws of the flag state where the Relevant Ship is
registered and such other relevant jurisdictions as the Lender may require.
12 A favourable opinion from an independent insurance consultant acceptable to
the Lender on such matters relating to the insurances for the Relevant Ship
as the Lender may require.
13 If the Lender so requires, in respect of any of the documents referred to
above, a certified English translation prepared by a translator approved by
the Lender.
Each copy document delivered under this Schedule shall be certified as a true
and up to date copy by a director or the secretary (or equivalent officer) of a
Borrower.
67
EXECUTION PAGE
BORROWERS
SIGNED by Xxxxxxxx Xxxxxxxx ) /s/ Xxxxxxxx Xxxxxxxx
for and on behalf of ) ----------------------------------------
MATRIX GAS TRADING LTD. )
SIGNED by Xxxxxxxx Xxxxxxxx ) /s/ Xxxxxxxx Xxxxxxxx
for and on behalf of ) ----------------------------------------
VCM TRADING LTD. )
SIGNED by Xxxxxxxx Xxxxxxxx ) /s/ Xxxxxxxx Xxxxxxxx
for and on behalf of ) ----------------------------------------
GENEVE BUTANE INC. )
SIGNED by Xxxxxxxx Xxxxxxxx ) /s/ Xxxxxxxx Xxxxxxxx
for and on behalf of ) ----------------------------------------
LPGONE LTD. )
SIGNED by Xxxxxxxx Xxxxxxxx ) /s/ Xxxxxxxx Xxxxxxxx
for and on behalf ) ----------------------------------------
of SEMICHLAUS EXPORTS LTD. )
SIGNED by Xxxxxxxx Xxxxxxxx ) /s/ Xxxxxxxx Xxxxxxxx
for and on behalf of ) ----------------------------------------
VENTSPILS GASES LTD. )
SIGNED by Xxxxxxxx Xxxxxxxx ) /s/ Xxxxxxxx Xxxxxxxx
for and on behalf of ) ----------------------------------------
PACIFIC GASES LTD. )
SIGNED by Xxxxxxxx Xxxxxxxx ) /s/ Xxxxxxxx Xxxxxxxx
for and on behalf of ) ----------------------------------------
ARACRUZ TRADING LTD. )
68
SIGNED by Xxxxxxxx Xxxxxxxx ) /s/ Xxxxxxxx Xxxxxxxx
for and on behalf of ) ----------------------------------------
INDUSTRIAL MATERIALS INC. )
SIGNED by Xxxxxxxx Xxxxxxxx ) /s/ Xxxxxxxx Xxxxxxxx
for and on behalf of ) ----------------------------------------
ENERGETIC PENINSULA LIMITED )
SIGNED by Xxxxxxxx Xxxxxxxx ) /s/ Xxxxxxxx Xxxxxxxx
for and on behalf of ) ----------------------------------------
OXFORDGAS LIMITED )
SIGNED by Xxxxxxxx Xxxxxxxx ) /s/ Xxxxxxxx Xxxxxxxx
for and on behalf of ) ----------------------------------------
OCEAN BLUE LIMITED )
SIGNED by Xxxxxxxx Xxxxxxxx ) /s/ Xxxxxxxx Xxxxxxxx
for and on behalf of ) ----------------------------------------
STEALTHGAS INC. )
LENDER
SIGNED by Xxxxxx Arcadis ) /s/ Xxxxxx Arcadis
for and on behalf of ) ----------------------------------------
FORTIS BANK (NEDERLAND) N.V. )
Witness to all
the above signatures:
/s/ Xxxxxxxxx Xxxxxxxxxxxx
----------------------------------------
Name: XXXXXXXXX XXXXXXXXXXXX
SOLICITOR
Address: XXXXXX, XXXXXX & XXXXXXXX
2 DEFTERAS XXXXXXXXXX
XXXXXXX 000 00 - XXXXXX
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