Certified to be a true copy of the
original document this 1 day of June 2005
XXXXXXXXXX XXXXXXX
Exhibit 10.6
11.024
DATED 24 MAY 2005
ALLENDALE INVESTMENTS S.A.
ALTERWALL BUSINESS INC
(AS BORROWERS)
- AND-
FORTIS BANK (NEDERLAND) N.V
AND OTHERS (AS LENDERS)
-AND-
FORTIS BANK (NEDERLAND) N.V
(AS AGENT AND SECURITY TRUSTEE)
----------
US$20,000,000 SECURED LOAN
FACILITY AGREEMENT
M.V. "XXX XXXXXX"
M.V. "YM QINGDAO I"
----------
XXXXXXXXXX XXXXXXX
ONE ST. PAUL'S CHURCHYARD
LONDON EC4M 8SH
TEL: 000 0000 0000
FAX: 000 0000 0000
REF: 11.024
CONTENTS
PAGE
----
1 Definitions and Interpretation........................................ 1
2 The Loan and its Purpose.............................................. 15
3 Conditions Precedent and Subsequent................................... 17
4 Representations and Warranties........................................ 21
5 Repayment and Prepayment.............................................. 25
6 Interest.............................................................. 26
7 The Master Agreement.................................................. 28
8 Fee................................................................... 30
9 Security Documents.................................................... 30
10 Agency and Trust...................................................... 31
11 Covenants............................................................. 40
12 Accounts.............................................................. 49
13 Events of Default..................................................... 51
14 Set-Off and Lien...................................................... 55
15 Assignment and Sub-Participation...................................... 56
16 Payments, Mandatory Prepayment, Reserve Requirements and Illegality... 58
17 Communications........................................................ 62
18 General Indemnities................................................... 63
19 Miscellaneous......................................................... 65
20 Law and Jurisdiction.................................................. 69
SCHEDULE 1............................................................... 71
The Banks and the Commitments......................................... 71
APPENDIX A............................................................... 73
Drawdown Notice....................................................... 73
APPENDIX B............................................................... 74
Form of Transfer Certificate.......................................... 74
79
LOAN AGREEMENT
DATED: 24 May 2005
BETWEEN:-
(1) ALLENDALE INVESTMENTS S.A. ("ALLENDALE") and ALTERWALL BUSINESS INC.
("ALTERWALL"), each a company incorporated according to the law of the
Republic of Panama, with its registered office at Edificio Torre Universal
Ave, Xxxxxxxxx Xxxx, Xxxxx 00, Xxxx Xx. 00, 00 (Xxxxxxxxx) Xxxxxx 0
Xxxxxxxx of Panama (together "THE BORROWERS" and each a "BORROWER");
(2) FORTIS BANK (NEDERLAND) N.V. (the "ORIGINAL BANK") AND THE BANKS AND
FINANCIAL INSTITUTIONS (together with the Original Bank, the "BANKS" and
each a "BANK") named in Schedule 1, of the offices listed in that Schedule
or such other offices as they may select and notify to the Agent from time
to time;
(3) FORTIS BANK (NEDERLAND) N.V. acting as arranger, agent and security trustee
through its office at Coolsingel 93, P.O. Box 749, 3000 AS Rotterdam, The
Netherlands (in that capacity "THE AGENT").
WHEREAS:-
(A) Allendale is the registered owner of the Kuo Vessel and Alterwall is the
registered owner of the YM Vessel.
(B) Each of the Vessels is registered in the ownership of her Owner under the
flag of the Republic of Panama.
(C) Each of the Banks have agreed to advance to the Borrowers, as joint and
several debtors and obligors, its respective Commitment of an aggregate
amount not exceeding the lesser of (i) twenty million Dollars ($20,000,000)
and (ii) fifty per centum (50%) of the Fair Market Value of the Vessels, in
order to assist the Borrowers in re-financing certain existing indebtedness
secured over the Vessels.
IT IS AGREED as follows:-
1 DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In this Agreement:-
1.1.1 "THE ACCOUNTS" means the Earnings Account and the Retention
Account.
1.1.2 "THE ACCOUNTS SECURITY DEED" means the Accounts Security Deed
referred to in Clause 9.5.
1.1.3 "THE ADDRESS FOR SERVICE" means HTD, Irongate House, Duke's
Place, London, EC3A 7LP, United Kingdom or, in relation to any of
the Security Parties, such other address in England and Wales as
that Security Party may from time to time designate by no fewer
than ten days' written notice to the Agent.
1.1.4 "THE ADMINISTRATION" has the meaning given to it in paragraph
1.1.3 of the ISM Code.
1.1.5 "APPROVED BROKERS" means independent sale and purchase brokers
appointed by the Agent in its discretion.
1.1.6 "THE ASSIGNMENTS" means the deeds of assignment of the
Insurances, Earnings, Charter Rights and Requisition Compensation
referred to in Clause 9.2 (each, an "ASSIGNMENT").
1.1.7 "THE AVAILABILITY TERMINATION DATE" means 31 May 2005 or such
later date as the Borrowers may request and the Banks may in
their discretion agree (such consent not to be unreasonably
withheld).
1.1.8 "BREAK COSTS" means all costs, losses, premiums or penalties
incurred by the Agent or any Bank in the circumstances
contemplated by Clause 18.4, or as a result of it receiving any
prepayment of all or any part of the Loan (whether pursuant to
Clause 5 or otherwise), or any other payment under or in relation
to the Security Documents on a day other than the due date for
payment of the sum in question, and includes (without
limitation) any losses or costs incurred in liquidating or
re-employing deposits from third parties acquired to effect or
maintain the Loan, and any liabilities, expenses or losses
incurred by the Agent or any Bank in terminating or reversing, or
otherwise in connection with, any Transaction or any other
interest rate and/or currency swap, transaction
2
or arrangement entered into by the Agent or any Bank to hedge any
exposure arising under this Agreement, or in terminating or
reversing, or otherwise in connection with, any open position
arising under this Agreement or the Master Agreement.
1.1.9 "BUSINESS DAY" means a day on which banks are open for the
transaction of business of the nature contemplated by this
Agreement (and not authorised by law to close) in New York,
United States of America; London, England; Piraeus, Greece and
any other financial centre which any Bank may consider
appropriate for the operation of the provisions of this
Agreement.
1.1.10 "CHARTER" means the time charter or other contract of
employment of the Kuo Vessel at a gross daily rate of hire of (i)
twenty two thousand Dollars ($22,000) per day with five per
centum (5%) commission from the Drawdown Date until 16 November
2005, (ii) sixteen thousand Dollars ($16,000) per day with five
per centum (5%) commission until 16 November 2006, (iii) twelve
thousand Dollars ($12,000) per day with five per centum (5%)
commission from 17 November 2006 until 16 November 2007, which
will expire by effluxion of time by 16 November 2007 and of the
YM Vessel at a gross daily rate of hire of eleven thousand nine
hundred Dollars ($11,900) with six point two five per centum
(6.25%) commission from the Drawdown Date until 12 May 2007,
which will expire by effuxion of time by 12 May 2007.
1.1.11 "CHARTERER" means Xxxxx Xxx Navigation Co. Ltd. of Taipei in
respect of the Kuo Vessel and Yangming (UK) Ltd. of London in
respect of the YM Vessel.
1.1.12 "CHARTER RIGHTS" means all rights and benefits accruing to the
Borrowers in respect of the Vessels under or arising out of the
Charters in respect of the Vessels or any other charterparty or
contract of employment in respect of the Vessels and not forming
part of the Earnings in respect of the Vessels.
3
1.1.13 "COMMITMENT" means, in relation to each Bank, the amount of the
Loan which that Xxxx agrees to advance to the Borrowers as its
several liability as indicated against the name of that Bank in
Schedule 2 and/or, where the context permits, the amount of the
Loan advanced by that Bank and remaining outstanding.
1.1.14 a "COMMUNICATION" means any notice, approval, demand, request
or other communication from one party to this Agreement to the
other.
1.1.15 "THE COMMUNICATIONS ADDRESS" means c/o Eurobulk Ltd, Aethrion
Center, 40 Ag. Xxxxxxxxxxxx Xxxxxx, 000 00 Xxxxxxxx, Xxxxxx,
marked for the attention of Xx. Xxxxxxxxx X. Xxxxxx.
1.1.16 "THE COMPANY" means, at any given time, the company responsible
for each Vessel's compliance with the ISM Code pursuant to
paragraph 1.1.2 of the ISM Code.
1.1.17 a "CONFIRMATION" means a Confirmation exchanged, or deemed
exchanged, between the Agent and the Borrowers as contemplated by
the Master Agreement.
1.1.18 "CORPORATE GUARANTEE" means the guarantee and indemnity
referred to in Clause 9.3.
1.1.19 "CORPORATE GUARANTOR" means Eurobulk Ltd of the Republic of
Liberia, a company incorporated according to the law of the
Republic of Liberia with its registered office with its
registered office at 00 Xxxxx Xxxxxx Xxxxxxxx, Xxxxxxx.
1.1.20 "CREDIT SUPPORT DOCUMENT" means any document described as such
in the Master Agreement and, where the context permits, any other
document referred to in any Credit Support Document which has the
effect of creating an Encumbrance in favour of the Agent.
1.1.21 "CREDIT SUPPORT PROVIDER" means any person (other than the
Borrowers) described as such in the Master Agreement.
1.1.22 "CURRENCY OF ACCOUNT" means, in relation to any payment to be
made to the Agent or a Bank under or pursuant to any of the
Security Documents,
4
the currency in which that payment is required to be made by the
terms of the relevant Security Document.
1.1.23 "DEFAULT RATE" means the aggregate rate of the Margin and two
per centum (2%) per annum above the cost to the Agent of
obtaining funds in amount similar to the amount of the
Indebtedness or any relevant part of the Indebtedness for such
periods as the Agent shall determine in its discretion.
1.1.24 "DOC" means a valid Document of Compliance issued for the
Company by the Administration pursuant to paragraph 13.2 of the
ISM Code.
1.1.25 "DOLLARS" and "$" each means available and freely transferable
and convertible funds in lawful currency of the United States of
America.
1.1.26 "THE DRAWDOWN DATE" means the date on which the Loan is
advanced by the Banks to the Borrowers pursuant to Clause 2.
1.1.27 "DRAWDOWN NOTICE" means a notice complying with Clause 2.2.
1.1.28 "EARNINGS" means all hires, freights, pool income and other
sums payable to or for the account of the Borrowers in respect of
the Vessels including (without limitation) all remuneration for
salvage and towage services, demurrage and detention moneys,
contributions in general average, compensation in respect of any
requisition for hire, and damages and other payments (whether
awarded by any court or arbitral tribunal or by agreement or
otherwise) for breach, termination or variation of any contract
for the operation, employment or use of the Vessels.
1.1.29 "THE EARNINGS ACCOUNT" means a bank account to be opened in the
joint names of the Borrowers with the Agent and designated
"Allendale Investments S.A. and Alterwall Business Inc. -
Earnings Account".
1.1.30 "ENCUMBRANCE" means any mortgage, charge (fixed or floating),
pledge, lien, assignment, hypothecation, preferential right,
option, title retention or trust arrangement or any other
agreement or arrangement which has the effect of creating
security or payment priority.
5
1.1.31 "ENVIRONMENTAL AFFILIATE" means an agent, employee, independent
contractor, sub-contractor or other person in a contractual
relationship with the Borrowers relating to the Vessels or its
carriage of cargo or its operation whose acts or omissions would
have a Material Adverse Effect.
1.1.32 "ENVIRONMENTAL APPROVAL" means all approvals, licences,
permits, exemptions and authorisations required under any
applicable Environmental Laws.
1.1.33 "ENVIRONMENTAL CLAIM" means any and all enforcement, clean up,
removal or other governmental or regulatory actions or orders
instituted or completed pursuant to any Environmental Laws or
Environmental Approval together with claims made by any third
party relating to damage, contributions, loss or injury,
resulting from any Release of Materials of Environmental Concern.
1.1.34 "ENVIRONMENTAL LAWS" means all local, state, provincial,
federal, state local, foreign and international laws,
regulations, treaties and conventions (including any amendments
and/or protocols thereto) for the time being in force pertaining
to the pollution or protection of human health or the environment
(including ambient air, surface water, ground water, land surface
or subsurface strata and all or any part of navigable waters,
waters of the contiguous zone, ocean waters and international
waters (howsoever called)), including laws, regulations, treaties
and conventions (including any amendments and/or protocols
thereto) for the time being in force relating to the Release (or
threatened Release) of Materials of Environmental Concern.
1.1.35 "EVENT OF DEFAULT" means any of the events set out in Clause
13.2.
1.1.36 "THE FACILITY PERIOD" means the period beginning on the date of
this Agreement and ending on the date when the whole of the
Indebtedness has been repaid in full and the Borrowers has ceased
to be under any further actual or contingent liability to the
Banks or the Agent under or in connection with the Security
Documents.
6
1.1.37 "FAIR MARKET VALUE" means the average of two valuations
obtained from two Approved Brokers.
1.1.38 "FINAL MATURITY DATE" means the earlier of the date falling six
(6) years after the Drawdown Date and 31 May 2011.
1.1.39 "THE GUARANTEES" means the Personal Guarantee and the Corporate
Guarantee.
1.1.40 "THE GUARANTORS" means the Corporate Guarantor and the Personal
Guarantor and/or (where the context permits) any other person or
company who shall at any time during the Facility Period give to
the Banks or to the Agent a guarantee and/or indemnity for the
repayment of all or part of the Indebtedness.
1.1.41 a "HEDGING TRANSACTION" means a Transaction entered into
between the Agent and the Borrowers pursuant to the Master
Agreement for the express purpose of hedging all or part of the
Borrowers' interest rate risk pursuant to this Agreement.
1.1.42 "THE INDEBTEDNESS" means the Loan; any Master Agreement
Liabilities; all other sums of any nature (together with all
interest on any of those sums) which from time to time may be
payable by the Borrowers to the Agent or to the Banks pursuant to
the Security Documents; any damages payable as a result of any
breach by the Borrowers of any of the Security Documents; and any
damages or other sums payable as a result of any of the
obligations of the Borrowers under or pursuant to any of the
Security Documents being disclaimed by a liquidator or any other
person, or, where the context permits, the amount thereof for the
time being outstanding.
1.1.43 an "INSTRUCTING GROUP" means any one or more Banks whose
combined Proportionate Shares exceed seventy per centum (70%).
1.1.44 "INSURANCES", in respect of each Vessel, means all policies and
contracts of insurance (including all entries in protection and
indemnity or war risks associations) which are from time to time
taken out or entered into in respect of or in connection with the
Vessel or her increased value or
7
her Earnings or the loss of hire and (where the context permits)
all benefits thereof, including all claims of any nature and
returns of premium.
1.1.45 "INTEREST PAYMENT DATE" means each date for the payment of
interest in, accordance with Clause 6.
1.1.46 "INTEREST PERIOD" means each interest period selected by the
Borrowers or agreed by the Agent pursuant to Clause 6.
1.1.47 "THE ISM CODE" means the International Management Code for the
Safe Management of Ships and for Pollution Prevention, as adopted
by the Assembly of the International Maritime Organisation on 4
November 1993 by resolution A.741 (18) and incorporated on 19 May
1994 as chapter IX of the Safety of Life at Sea Convention 1974.
1.1.48 "THE ISPS CODE" means the International Ship and Port Facility
Security Code adopted by the International Maritime Organisation
(as the same may be amended from time to time).
1.1.49 "KUO VESSEL" means the container motor vessel "XXX XXXXXX",
built in 1993 of approximately 18,154 dwt and 1,169 TEU
registered in the ownership of Allendale under the laws and the
flag of the Republic of Panama and everything now or in the
future belonging to her on board and ashore.
1.1.50 "LAW" means any law, statute, treaty, convention, regulation,
instrument or other subordinate legislation or other legislative
or quasi-legislative rule or measure, or any order or decree of
any government, judicial or public or other body or authority, or
any directive, code of practice, circular, guidance note or other
direction issued by any competent authority or agency (whether or
not having the force of law).
1.1.51 "LIBOR" means the rate displayed as the British Bankers'
Association Interest Settlement Rate on any information service
selected by the Agent on which that rate is displayed (without
rounding), for deposits in Dollars of amounts equal to the amount
of the Loan or any relevant part of the Loan for a period equal
in length to the relevant Interest Period, or
8
(if the Agent is for any reason unable to ascertain that rate)
the average rate at which deposits in Dollars of amounts
comparable to the amount of the Loan (or any relevant part of the
Loan) are offered to the Agent in the London Interbank market for
a period equal in length to the relevant Interest Period.
1.1.52 "THE LOAN" means the aggregate amount from time to time
advanced by the Banks to the Borrowers pursuant to Clause 2 or,
where the context permits, the amount advanced and for the time
being outstanding.
1.1.53 "THE MANAGERS" means Eurobulk Ltd., or such other commercial
and/or technical managers of the Vessels nominated by the
Borrowers as the Agent may in its discretion approve.
1.1.54 "MANAGER'S UNDERTAKINGS" means the Undertakings of the Managers
referred to in Clause 9.7.
1.1.55 "THE MARGIN" means:-
(a) one point two five per centum (1.25%) per annum for as long
as the amount of the Loan outstanding remains below sixty
per centum (60%) of the Fair Market Value of the Vessels;
and
(b) one point three seven five per centum (1.375%) per annum for
as long as the amount of the Loan outstanding exceeds sixty
per centum (60%) of the Fair Market Value of the Vessels.
1.1.56 "MASTER AGREEMENT" means any ISDA Master Agreement (or any
other form of master agreement relating to interest or currency
exchange transactions) entered into between the Agent and the
Borrowers during the Facility Period, including each Schedule to
any Master Agreement and each Confirmation exchanged pursuant to
any Master Agreement.
1.1.57 "THE MASTER AGREEMENT LIABILITIES" means, at any relevant time,
all liabilities of the Borrowers to the Agent under or pursuant
to the Master Agreement, whether actual or contingent, present or
future.
1.1.58 "MATERIAL ADVERSE EFFECT" means a material adverse effect on
the Borrowers' ability to meet its obligations to the Agent in
respect of the
9
Indebtedness or on the security provided to the Agent and the
Banks in respect of the Indebtedness.
1.1.59 "MATERIAL OF ENVIRONMENTAL CONCERN" means and includes all
pollutants, contaminants, toxic substances, oil and hazardous
substances as may be defined in any applicable local, state,
provincial, federal, national and international laws,
regulations, treaties and conventions (including any amendments
and/or protocols thereto) for the time being in force.
1.1.60 "THE MAXIMUM LOAN AMOUNT" means an aggregate amount not
exceeding the lesser of (i) twenty million Dollars ($20,000,000)
and (ii) fifty per centum (50%) of the Fair Market Value of the
Vessels.
1.1.61 "THE MORTGAGEES' INSURANCES" means all policies and contracts
of mortgagees' interest insurance, mortgagees' additional perils
(oil pollution) insurance and any other insurance from time to
time taken out by the Agent on behalf of the Banks in relation to
the Vessels.
1.1.62 "THE MORTGAGES" means the first priority mortgages referred to
in Clause 9.1 (each a "MORTGAGE").
1.1.63 "NOTIONAL AMOUNT", in respect of any Hedging Transaction, means
the Notional Amount as defined in the Confirmation relating to
that Hedging Transaction.
1.1.64 "OPERATING EXPENSES" means cash expenses properly and
reasonably incurred by the Borrowers in connection with the
operation, employment, maintenance, repair and insurance of the
Vessels.
1.1.65 "OWNER" means Allendale in respect of the Kuo Vessel and
Alterwall in respect of the YM Vessel.
1.1.66 "PERSONAL GUARANTEE" means the guarantee and indemnity referred
to in Clause 9.4.
1.1.67 "PERSONAL GUARANTOR" means a person acceptable to the Banks in
their discretion and/or (where the context permits) any other
person or company who shall at any time during the Facility
Period give to the
10
Xxxxx or to the Agent on their behalf a guarantee and/or
indemnity for the repayment of all or part of the Indebtedness.
1.1.68 "PLEDGORS" means, Safeway Maritime Co. and Xxxxxxx Holdings
Inc. each a company incorporated according to the law of the
Republic of Liberia with its registered office at 00 Xxxxx
Xxxxxx, Xxxxxxxx, Xxxxxxx.
1.1.69 "POTENTIAL EVENT OF DEFAULT" means any event which, with the
giving of notice and/or the passage of time and/or the
satisfaction of any materiality test, would constitute an Event
of Default.
1.1.70 "PROCEEDINGS" means any suit, action or proceedings begun by
the Agent or any of the Banks arising out of or in connection
with the Security Documents.
1.1.71 "PROPORTIONATE SHARE" means, at any time, the proportion which
that Bank's Commitment (whether or not advanced) then bears to
the aggregate Commitments of all the Banks (whether or not
advanced).
1.1.72 "RELEASE" means an emission, spill, release or discharge into
or upon the air, surface water, groundwater, or soils of any
Material of Environmental Concern for which the Borrowers have
any liability under Environmental Law, except in accordance with
a valid Environmental Approval.
1.1.73 "REPAYMENT DATE" means the date for payment of any Repayment
Instalment in accordance with Clause 5.
1.1.74 "REPAYMENT INSTALMENT" means any instalment of the Loan to be
repaid by the Borrowers pursuant to Clause 5.
1.1.75 "REQUISITION COMPENSATION" means all compensation or other
money which may from time to time be payable to the Borrowers as
a result of the Vessels being requisitioned for title or in any
other way compulsorily acquired (other than by way of
requisition for hire).
1.1.76 "THE RETENTION ACCOUNT" means the bank account to be opened, in
the joint names of the Borrowers, with the Agent, designated
"Allendale Investments S.A., Alterwall Business Inc. - Retention
Account".
11
1.1.77 "THE SECURITY DOCUMENTS" means this Agreement, the Mortgages,
the Assignments, the Guarantees, the Shares Pledges, the Accounts
Security Deed, the Managers' Undertakings, the Master Agreement
and any other Credit Support Documents or (where the context
permits) any one or more of them, and any other agreement or
document which may at any time be executed by any person as
security for the payment of all or any part of the Indebtedness.
1.1.78 "SECURITY PARTIES" means the Borrowers, the Guarantors, the
Pledgor; the Managers, any other Credit Support Providers, and
any other person or company who may at any time during the
Facility Period be liable for, or provide security for, all or
any part of the Indebtedness, and "SECURITY PARTY" means any one
of them.
1.1.79 "SHARE PLEDGES" means the Pledges of the issued share capital
of each of the Borrowers referred to in Clause 9.6 (each a "SHARE
PLEDGE").
1.1.80 "SMC" means a valid safety management certificate issued for
the Vessels by or on behalf of the Administration pursuant to
paragraph 13.4 of the ISM Code.
1.1.81 "SMS" means a safety management system for the Vessels
developed and implemented in accordance with the ISM Code and
including the functional requirements, duties and obligations
required by the ISM Code.
1.1.82 "TAXES" means all taxes, levies, imposts, duties, charges,
fees, deductions and withholdings (including any related
interest, fines, surcharges and penalties) and any restrictions
or conditions resulting in any charge, other than taxes on the
overall net income of the Agent or of a Bank, and "TAX" and
"TAXATION" shall be interpreted accordingly.
1.1.83 "TOTAL LOSS" means, in respect of a Vessel:-
(a) an actual, constructive, arranged, agreed or compromised
total loss of the Vessel; or
12
(b) the requisition for title or compulsory acquisition of the
Vessel by or on behalf of any government or other authority
(other than by way of requisition for hire); or
(c) the capture, seizure, arrest, detention or confiscation of
the Vessel, unless the Vessel is released and returned to
the possession of its Owner within one month after the
capture, seizure, arrest, detention or confiscation in
question.
1.1.84 "TRANSACTION" means a transaction entered into between the
Agent and the Borrowers governed by the Master Agreement.
1.1.85 "TRANSFER CERTIFICATE" means a certificate materially in the
form of Appendix B.
1.1.86 "TRANSFER DATE", in relation to a transfer of any of a Bank's
rights and/or obligations under or pursuant to this Agreement,
means the fifth Business Day after the date of delivery of the
relevant Transfer Certificate to the Agent, or such later
Business Day as may be specified in the relevant Transfer
Certificate.
1.1.87 "TRANSFEREE" means any bank or financial institution to which a
Bank transfers any of its rights and/or obligations under or
pursuant to this Agreement.
1.1.88 "THE TRUST PROPERTY" means:-
(a) the benefit of the covenant contained in Clause 10; and
(b) all benefits arising under (including, without limitation,
all proceeds of the enforcement of) each of the Security
Documents (other than this Agreement), with the exception of
any benefits arising solely for the benefit of the Agent.
1.1.89 "THE VESSELS" means the Kuo Vessel and the YM Vessel.
1.1.90 "THE YM VESSEL" means the container motor vessel "YM QINGDAO
I", built in 1990 of approximately 18,253 dwt and 1,142 TEU,
currently registered under the flag of the Republic of Panama in
the ownership of
13
Alterwall and everything now or in the future belonging to her on
board and ashore.
1.2 INTERPRETATION
In this Agreement:-
1.2.1 words denoting the plural number include the singular and vice
versa;
1.2.2 words denoting persons include corporations, partnerships,
associations of persons (whether incorporated or not) or
governmental or quasi-governmental bodies or authorities and vice
versa;
1.2.3 references to Recitals, Clauses and Appendices are references to
recitals and clauses of, and appendices to, this Agreement;
1.2.4 references to this Agreement include the Recitals and the
Appendices;
1.2.5 the headings and contents page(s) are for the purpose of
reference only, have no legal or other significance, and shall be
ignored in the interpretation of this Agreement;
1.2.6 references to any document (including, without limitation, to
all or any of the Security Documents) are, unless the context
otherwise requires, references to that document as amended,
supplemented, novated or replaced from time to time;
1.2.7 references to statutes or provisions of statutes are references
to those statutes, or those provisions, as from time to time
amended, replaced or re-enacted;
1.2.8 words and expressions defined in the Master Agreement, unless
the context otherwise requires, have the same meaning;
1.2.9 references to a Bank or to the Agent include its successors,
transferees and assignees;
1.2.10 references to times of day are to London time.
1.3 OFFER LETTER
14
This Agreement supersedes the terms and conditions contained in any
correspondence relating to the subject matter of this Agreement
exchanged between the Agent or any of the Banks and the Borrowers or
their representatives prior to the date of this Agreement.
1.4 JOINT AND SEVERAL LIABILITY
1.4.1 All obligations, covenants, representations, warranties and
undertakings in or pursuant to the Security Documents assumed,
given, made or entered into by the Borrowers shall, unless
otherwise expressly provided, be assumed, given, made or entered
into by the Borrowers jointly and severally.
1.4.2 Each of the Borrowers agrees that any rights which it may have
at any time during the Facility Period by reason of the
performance of its obligations under the Security Documents to be
indemnified by any other Borrower and/or to take the benefit of
any security taken by the Banks or by the Agent pursuant to the
Security Documents shall be exercised in such manner and on such
terms as the Agent may require. Each of the Borrowers agrees to
hold any sums received by it as a result of its having exercised
any such right on trust for the Agent (as agent for the Banks)
absolutely.
1.4.3 Each of the Borrowers agrees that it will not at any time during
the Facility Period claim any set-off or counterclaim against any
other Borrower in respect of any liability owed to it by that
other Borrower under or in connection with the Security
Documents, nor prove in competition with the Banks or the Agent
in any liquidation of (or analogous proceeding in respect of) any
other Borrower in respect of any payment made under the Security
Documents or in respect of any sum which includes the proceeds of
realisation of any security held by the Banks or the Agent for
the repayment of the Indebtedness.
2 THE LOAN AND ITS PURPOSE
2.1 AGREEMENT TO LEND Subject to the terms and conditions of this
Agreement, and in reliance on each of the representations and
warranties made or to be made in or in accordance with each of the
Security Documents, each of the Banks agrees to
15
advance to the Borrowers an aggregate amount not exceeding the Maximum
Loan Amount to be used by the Borrowers for the purpose referred to in
Recital (C).
2.2 ADVANCE OF THE LOAN Subject to satisfaction by the Borrowers of the
conditions set out in Clause 3.1, the Loan shall be advanced to the
Borrowers in one amount by such method of funds transfer as the Banks
and the Borrowers shall agree. The Loan shall be advanced in Dollars
on a Business Day, provided that the Borrowers shall have given to the
Agent not more than ten and not fewer than three Business Days' notice
(or such lesser period of notice as the Agent may accept in its
discretion) in writing materially in the form set out in Appendix A of
the required Drawdown Date. The Drawdown Notice once given shall be
irrevocable and shall constitute a warranty by the Borrowers that:-
2.2.1 all conditions precedent to the advance of the Loan will have
been satisfied on or before the Drawdown Date requested;
2.2.2 no Event of Default or Potential Event of Default will then have
occurred;
2.2.3 no Event of Default or Potential Event of Default will result
from the advance of the Loan; and
2.2.4 there has been no material adverse change in the business,
affairs or financial condition of any of the Security Parties
from that pertaining at the date of this Agreement.
The Agent shall promptly notify each Bank of the receipt of the
Drawdown Notice, following which each Bank will make, subject to the
provisions of Clause 3, its Proportionate Share of the amount of the
Loan available to the Borrowers through the Agent on the Drawdown Date
requested.
2.3 AVAILABILITY TERMINATION DATE No Bank shall be under any obligation to
advance all or any part of the Loan after the Availability Termination
Date.
2.4 SEVERAL OBLIGATIONS The obligations of the Banks under this Agreement
are several. The failure of a Bank to perform its obligations under
this Agreement shall not affect the obligations of the Borrowers to
the Agent or to the other Banks, nor
16
shall the Agent or any other Bank be liable for the failure of a Bank
to perform any of its obligations under or in connection with this
Agreement.
2.5 APPLICATION OF LOAN Without prejudice to the obligations of the
Borrowers under this Agreement, neither the Banks nor the Agent shall
be obliged to concern itself with the application of the Loan by the
Borrowers.
2.6 LOAN AND CONTROL ACCOUNTS The Borrowers will open and maintain with
the Agent such loan and control accounts as the Agent shall in its
discretion consider necessary or desirable.
2.7 INTEREST SEVERAL Notwithstanding any other term of this Agreement (but
without prejudice to the provisions of this Agreement relating to or
requiring action by the Instructing Group) the interest of the Banks
is several and the amount due to any Bank is separate and independent
debt.
2.8 GENERAL TERMS AND CONDITIONS In addition to the terms and conditions
set-out in this Loan Agreement the General Terms and Conditions of the
Agent will apply.
3 CONDITIONS PRECEDENT AND SUBSEQUENT
3.1 CONDITIONS PRECEDENT Before any Bank shall have any obligation to
advance any part of the Loan, the Borrowers shall deliver or cause to
be delivered to or to the order of the Agent the following documents
and evidence: -
3.1.1 EVIDENCE OF INCORPORATION Such evidence as the Agent may
reasonably require that each Security Party is duly incorporated
in its country of incorporation and remains in existence and,
where appropriate, in good standing, with power to enter into,
and perform its obligations under, those of the Security
Documents to which it is, or is intended to be, a party,
including (without limitation) a copy, certified by a director or
the secretary of the Security Party in question as true,
complete, accurate and unamended, of all documents establishing
or limiting the constitution of each Security Party.
3.1.2 CORPORATE AUTHORITIES A copy, certified by a director or the
secretary of the Security Party in question as true, complete,
accurate and neither amended nor revoked, of a resolution of the
directors and a resolution of
17
the shareholders of each Security Party (together, where
appropriate, with signed waivers of notice of any directors' or
shareholders' meetings) approving, and authorising or ratifying
the execution of, those of the Security Documents to which that
Security Party is or is intended to be a party and all matters
incidental thereto.
3.1.3 OFFICER'S CERTIFICATE A certificate signed by a duly authorised
officer of each of the Security Parties setting out the names of
the directors, officers and shareholders of that Security Party.
3.1.4 POWER OF ATTORNEY The notarially attested and legalised power of
attorney of each of the Security Parties under which any
documents are to be executed or transactions undertaken by that
Security Party.
3.1.5 VESSELS DOCUMENTS Photocopies, certified as true, accurate and
complete by a director or the secretary of the Owner, of (in
respect of each Vessel):-
(a) the Charters and/or any other contract of employment of the
Vessels which will be in force on the Drawdown Date and must
be reviewed and accepted by the Agent;
(c) the management agreement between the Borrowers and the
Managers relating to the Vessels;
(d) the Vessels' current Safety Construction, Safety Equipment,
Safety Radio, Oil Pollution Prevention, International
Tonnage and Load Line Certificates;
(e) the Vessels' current Certificate of Financial Responsibility
issued pursuant to the United States Oil Pollution Act 1990;
(f) the Vessels' International Ship Security Certificate issued
pursuant to the ISPS Code;
(g) the Vessels' current SMC; and
(h) the Company's current DOC;
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in each case together with all addenda, amendments or
supplements.
3.1.6 EVIDENCE OF OWNERSHIP Certificate(s) of ownership and
encumbrance (or equivalent) issued by the Registrar of Ships (or
equivalent official) at the Vessel's port of registry confirming
that each Vessel is on the Drawdown Date owned by her Owner and
free of registered Encumbrances.
3.1.7 EVIDENCE OF INSURANCE Evidence that the Vessels are, or will
from the Drawdown Date be, insured in the manner required by the
Security Documents and that letters of undertaking will be issued
in the manner required by the Security Documents, together with
the written approval of the Insurances by an insurance adviser
appointed by the Agent (at the cost of the Borrowers) confirming
(inter alia) that the required Insurances have been placed and
are acceptable to the Agent and that the underwriters are
acceptable to the Agent.
3.1.8 CONFIRMATION OF CLASS A Certificate of Confirmation of Class for
hull and machinery confirming that the Vessels are classed with
the highest class applicable to Vessels of their type with Nippon
Kaiji Kyokai free and clear of all overdue recommendations or
such other classification society as may be acceptable to the
Agent.
3.1.9 SURVEY REPORTS The latest annual survey and class status reports
prepared by surveyors instructed by the class society for the
Vessels (namely Nippon Kaiji Kyokai), and at the cost of the
Borrowers, confirming the condition of the Vessels, such
condition to be in all respects acceptable to the Agent.
3.1.10 VALUATIONS A valuation of each Vessel addressed to the Agent
from two Approved Brokers appointed by the Agent and approved by
the Borrowers certifying a value for each Vessel which is not
less than fifty per centum (50%) of the amount of the Loan,
assessed in such manner as the Agent may require, acceptable to
the Agent and at the cost of the Borrowers.
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3.1.11 THE SECURITY DOCUMENTS The Security Documents, together with
all notices and other documents required by any of them, duly
executed and, in the case of the Mortgages, registered with first
priority through the Registrar of Ships (or equivalent official)
at the Vessels' port of registry
3.1.12 DRAWDOWN NOTICE A Drawdown Notice.
3.1.13 PROCESS AGENT A letter from HTD, Irongate House, Duke's Place,
London, EC3A 7LP, United Kingdom, accepting their appointment by
each of the Security Parties as agent for service of Proceedings
pursuant to the Security Documents.
3.1.14 MANDATES Such duly signed forms of mandate, and/or other
evidence of opening of the Accounts, as the Agent or any of the
Banks may require,
3.1.15 FEE Payment of the fee due from the Borrowers to the Banks
pursuant to the terms of Clause 8 or any other provision of the
Security Documents.
3.1.16 LEGAL OPINIONS Confirmation satisfactory to the Agent that all
legal opinions required by the Agent will be given substantially
in the form required by the Agent.
3.2 CONDITIONS SUBSEQUENT The Borrowers undertake to deliver or to cause
to be delivered to the Agent, in the case of Clause 3.2.1 not later
than three days after the Drawdown Date and, in the case of Clauses
3.2.2 and 3.2.3 not later than two weeks after the Drawdown Date, the
following additional documents and evidence:-
3.2.1 EVIDENCE OF REGISTRATION Evidence of permanent registration of
the Vessels and the Mortgages (with first priority) with the
Registrar of Ships (or equivalent official) at the Vessels' port
of registry.
3.2.2 LETTERS OF UNDERTAKING Letters of undertaking as required by the
Security Documents in form and substance acceptable to the Agent
including, without limitation confirmation notices of assignment
of Insurances, notices of cancellation and loss payable clause in
form and substance acceptable to the Agent.
3.2.3 LEGAL OPINIONS Such legal opinions as the Agent shall require.
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3.3 NO WAIVER If the Banks in their sole discretion agree to advance the
Loan to the Borrowers before all of the documents and evidence
required by Clause 3.1 have been delivered to or to the order of the
Agent, the Borrowers undertake to deliver all outstanding documents
and evidence to or to the order of the Agent no later than the date
specified by the Agent, and the Banks' advance of the Loan shall not
be taken as a waiver of the Agent's right to require production of all
the documents and evidence required by Clause 3.1.
3.4 FORM AND CONTENT All documents and evidence delivered to the Agent
pursuant to this Clause shall:-
3.4.1 be in form and substance acceptable to the Agent;
3.4.2 be accompanied, if required by the Agent, by translations into
the English language, certified in a manner acceptable to the
Agent;
3.4.3 if required by the Agent, be certified, notarised, legalised or
attested in a manner acceptable to the Agent.
3.5 EVENT OF DEFAULT No Bank shall be under any obligation to advance any
part of the Loan nor to act on any Drawdown Notice if, at the date of
the Drawdown Notice or at the date on which the advance of the Loan is
requested in the Drawdown Notice, an Event of Default or Potential
Event of Default shall have occurred, or if an Event of Default or
Potential Event of Default would result from the advance of the Loan
4. REPRESENTATIONS AND WARRANTIES
The Borrowers represent and warrant to the Agent at the date of this
Agreement and (by reference to the facts and circumstances then pertaining)
at the date of the Drawdown Notice, at the Drawdown Date and at each
Interest Payment Date as follows:-
4.1 INCORPORATION AND CAPACITY Each of the Security Parties is a body
corporate duly constituted and existing and (where applicable) in good
standing under the law of its country of incorporation, in each case
with perpetual corporate existence and the power to sue and be sued,
to own its assets and to carry on its business, and all of the
corporate shareholders (if any) of each Security Party are duly
constituted and existing under the laws of their countries of
incorporation with perpetual corporate
21
existence and the power to sue and be sued, to own their assets and to
carry on their business.
4.2 SOLVENCY None of the Security Parties is insolvent or in liquidation
or administration or subject to any other insolvency procedure, and no
receiver, administrative receiver, administrator, liquidator, trustee
or analogous officer has been appointed in respect of any of the
Security Parties or all or any part of their assets.
4.3 BINDING OBLIGATIONS The Security Documents when duly executed and
delivered will constitute the legal, valid and binding obligations of
the Security Parties enforceable in accordance with their respective
terms.
4.4 SATISFACTION OF CONDITIONS All acts, conditions and things required to
be done and satisfied and to have happened prior to the execution and
delivery of the Security Documents in order to constitute the Security
Documents the legal, valid and binding obligations of the Security
Parties in accordance with their respective terms have been done,
satisfied and have happened in compliance with all applicable laws.
4.5 REGISTRATIONS AND CONSENTS With the exception only of the
registrations referred to in Clause 3.2.1, all (if any) consents,
licences, approvals and authorisations of, or registrations with or
declarations to, any governmental authority, bureau or agency which
may be required in connection with the execution, delivery,
performance, validity or enforceability of the Security Documents have
been obtained or made and remain in full force and effect and the
Borrowers are not aware of any event or circumstance which could
reasonably be expected adversely to affect the right of any of the
Security Parties to hold and/or obtain renewal of any such consents,
licences, approvals or authorisations.
4.6 DISCLOSURE OF MATERIAL FACTS The Borrowers are not aware of any
material facts or circumstances which have not been disclosed to the
Agent and which might, if disclosed, have adversely affected the
decision of a person considering whether or not to make loan
facilities of the nature contemplated by this Agreement available to
the Borrowers.
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4.7 NO MATERIAL LITIGATION There is no action, suit, arbitration or
administrative proceeding pending or to its knowledge about to be
pursued before any court, tribunal or governmental or other authority
which would, or would be likely to, have a materially adverse effect
on the business, assets, financial condition or creditworthiness of
any of the Security Parties.
4.8 NO BREACH OF LAW OR CONTRACT The execution, delivery and performance
of the Security Documents will not contravene any contractual
restriction or any law binding on any of the Security Parties or on
any shareholder (whether legal or beneficial) of any of the Security
Parties, or the constitutional documents of any of the Security
Parties, nor result in the creation of, nor oblige any of the Security
Parties to create, any Encumbrance over all or any of its assets, with
the exception of the Encumbrances created by or pursuant to the
Security Documents and, in entering into those of the Security
Documents to which it is, or is to be, a party, and in borrowing the
Loan, the Borrowers is acting for its own account.
4.9 NO DEDUCTIONS The Borrowers are not required to make any deduction or
withholding from any payment which it may be obliged to make to the
Agent or any of the Banks under or pursuant to the Security Documents.
4.10 NO ESTABLISHED PLACE OF BUSINESS IN THE UNITED KINGDOM OR UNITED
STATES None of the Security Parties has, nor will any of them have
during the Facility Period, an established place of business in the
United Kingdom or the United States of America.
4.11 USE OF LOAN The Loan will be used for the purpose specified in Recital
(C).
4.12 PARI PASSU The obligations of the Borrowers under this Agreement are
direct, general and unconditional obligations of the Borrowers and
rank at least pari passu with all other present and future unsecured
and unsubordinated indebtedness of the Borrowers with the exception of
any obligations which are mandatorily preferred by law and not by
contract.
4.13 NO DEFAULT UNDER ANY OTHER INDEBTEDNESS Neither the Borrowers nor any
other Security Party is (nor would with the giving of notice or lapse
of time or the satisfaction of any other condition or combination
thereof be) in breach of or in
23
default under any agreement relating to any indebtedness to which it
is a party or by which it may be bound.
4.14 INFORMATION The information, exhibits and reports furnished by any
Security Party to the Agent in connection with the negotiation and
preparation of the Security Documents are true and accurate in all
material respects and not misleading, do not omit material facts and
all reasonable enquiries have been made to verify the facts and
statements contained therein; to the best knowledge of the Borrowers
there are no other facts the omission of which would make any fact or
statement therein misleading.
4.15 NO MATERIAL ADVERSE CHANGE There has been no material adverse change
in the financial position of the Borrowers or any other Security Party
from that described to the Agent in the negotiation of this Agreement.
4.16 ENVIRONMENT Except as may already have been disclosed by the Borrowers
in writing to, and acknowledged in writing by, the Agent, the
Borrowers represents and warrants to the Agent as follows:
4.16.1 the Borrowers and (to the best of the Borrowers' knowledge)
their Environmental Affiliates have without limitation complied
with the provisions of applicable Environmental Laws, except
where non-compliance would not have a Material Adverse Effect;
4.16.2 the Borrowers and (to the best of the Borrowers' knowledge)
their Environmental Affiliates have obtained all requisite
Environmental Approvals and are in compliance with such
Environmental Approvals, except where the failure to obtain or
comply with any such Environmental Approvals would not have a
Material Adverse Effect;
4.16.3 neither the Borrowers nor (to the best of the Borrowers'
knowledge) any of its Environmental Affiliates have received
notice of any Environmental Claim which alleges that the
Borrowers are not in compliance with applicable Environmental
Laws or Environmental Approvals, where such non-compliance would
have a Material Adverse Effect;
4.16.4 there is no Environmental Claim pending or, to the Borrowers'
knowledge threatened which would have a Material Adverse Effect;
and
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4.16.5 to the best of the Borrowers' knowledge, there has been no
Release of Material of Environmental Concern except where the
event would not have a Material Adverse Effect.
5 REPAYMENT AND PREPAYMENT
5.1 REPAYMENT The Borrowers agree to repay the Loan to the Agent as agent
for the Banks by twenty four (24) consecutive quarterly Repayment
Instalments, the first four (4) such Repayment Instalments in the sum
of one million five hundred thousand Dollars ($1,500,000) each, the
following four (4) such Repayment Instalments in the sum of one
million one hundred and twenty five thousand Dollars ($1,125,000)
each, the following four (4) such Repayment Instalments in the sum of
seven hundred and seventy five thousand Dollars ($775,000) each, the
following eleven (11) such Repayment Instalments in the sum of four
hundred and fifty thousand Dollars ($450,000) each, and the twenty
fourth (24th) and final Repayment Instalment in the sum of one million
four hundred and fifty thousand Dollars ($1,450,000) (comprising a
Repayment Instalment of four hundred and fifty thousand Dollars
($450,000) and a balloon payment of one million Dollars ($1,000,000)
("THE BALLOON PAYMENT")) the first Repayment Date being the date which
is three calendar months after the Drawdown Date and subsequent
Repayment Dates being at consecutive intervals of three calendar
months thereafter and the final Repayment Instalment shall be due and
payable on the Final Maturity Date.
5.2 REDUCTION OF REPAYMENT INSTALMENTS If the aggregate amount advanced to
the Borrowers is less than the Maximum Loan Amount, the amount of each
Repayment Instalment shall be reduced pro rata to the amount actually
advanced.
5.3 VOLUNTARY PREPAYMENT The Borrowers may without any premium or penalty
prepay the Loan in whole or in part in minimum amounts equal to one
hundred thousand Dollars ($100,000) or an integral multiple of that
amount (or as otherwise may be agreed by the Agent) provided that they
have first given to the Agent not fewer than fifteen (15) days' prior
written notice expiring on a Business Day of their intention to do so.
Any notice pursuant to this Clause once given shall be irrevocable and
shall oblige the Borrowers to make the prepayment referred to in the
notice on the Business Day specified in the notice, together with all
interest accrued on the amount prepaid up to and including that
Business Day.
25
5.4 PREPAYMENT INDEMNITY If the Borrowers shall, subject always to Clause
5.3, make a prepayment on a Business Day other than the last day of an
Interest Period, they shall, in addition to the amount prepaid and
accrued interest, pay to the Agent any amount which the Agent may
certify is necessary to compensate the Agent and the Banks for any
Break Costs incurred by the Agent or any of the Banks as a result of
the making of the prepayment in question.
5.5 APPLICATION OF PREPAYMENTS Any prepayment pursuant to Clause 5.3 in an
amount less than the Indebtedness shall be applied in satisfaction or
reduction first of any costs and other amounts outstanding; secondly
of all interest outstanding; and thirdly pro rata against the
outstanding Repayment Instalments (including the Balloon Payment).
5.6 NO REBORROWING No amount repaid or prepaid pursuant to this Agreement
may in any circumstances be reborrowed.
5.7 MANDATORY PREPAYMENT - SALE OR TOTAL LOSS OF VESSELS In the event of a
Vessel being sold or becoming a Total Loss, the Indebtedness shall be
repaid in full. In the case of a sale or disposal of a Vessel, the
proceeds of such sale or disposal of the Vessel shall be used to repay
the Indebtedness immediately upon the date of such sale or disposal of
the Vessel. In the case of a Total Loss of a Vessel, the proceeds of
the Insurances of the Vessel shall be used to prepay the Indebtedness
on the earlier of the date on which Insurance proceeds are received by
the Borrowers and the date which is ninety (90) days after the date on
which the Vessel was declared a Total Loss.
6 INTEREST
6.1 INTEREST PERIODS The period during which the Loan shall be outstanding
pursuant to this Agreement shall be divided into consecutive Interest
Periods of one (a maximum of three one-month Interest Periods in any
calendar year will be permitted), three six, nine or twelve months'
duration, as selected by the Borrowers by written notice to the Agent
not later than 11.00 a.m. on the third Business Day before the
beginning of the Interest Period in question, or such other duration
as may be agreed by the Agent in its discretion.
26
6.2 BEGINNING AND END OF INTEREST PERIODS The first Interest Period shall
begin on the Drawdown Date, and the final Interest Period shall end on
the Repayment Date applicable to the final Repayment Instalment.
6.3 INTEREST PERIODS TO MEET REPAYMENT DATES If the Borrowers shall
select, or the Borrowers and the Banks shall agree, an Interest Period
which does not expire on the next Repayment Date, there shall, in
respect of each part of the Loan equal to a Repayment Instalment
falling due for payment before the expiry of that Interest Period, be
a separate Interest Period which shall expire on the relevant
Repayment Date, and the Interest Period selected or agreed shall apply
to the balance of the Loan only.
6.4 INTEREST RATE During each Interest Period interest shall accrue on the
Loan at the rate determined by the Agent to be the aggregate of (a)
the Margin and (b) LIBOR determined at or about 11.00 a.m. on the
second Business Day prior to the beginning of that Interest Period.
6.5 FAILURE TO SELECT INTEREST PERIOD If the Borrowers at any time fail to
select or to agree an Interest Period in accordance with Clause 6.1,
the interest rate applicable after the expiry of the then current
Interest Period shall be the rate determined by the Agent in
accordance with Clause 6.4 for consecutive Interest Periods each of
such duration (not exceeding six months) as the Agent may in its
discretion select.
6.6 ACCRUAL AND PAYMENT OF INTEREST Interest shall accrue from day to day,
shall be calculated on the basis of a 360 day year and the actual
number of days elapsed and shall be paid by the Borrowers to the Agent
on the last day of each Interest Period and additionally, during any
Interest Period exceeding six months, on the last day of each
successive six month period after the beginning of that Interest
Period.
6.7 ENDING OF INTEREST PERIODS Each Interest Period shall, subject to
Clauses 6.2 and 6.3, end on the date which numerically corresponds to
the date on which the immediately preceding Interest Period ended (or,
in the case of the first Interest Period, to the Drawdown Date) in the
calendar month which is the number of months selected or agreed after
the calendar month in which the immediately preceding Interest Period
ended (or, in the case of the first Interest Period, in which the
Drawdown Date occurred), except that:-
27
6.7.1 if there is no numerically corresponding date in the calendar
month in which the Interest Period ends, the Interest Period
shall end on the last Business Day in that calendar month; and
6.7.2 if any Interest Period would end on a day which is not a
Business Day, that Interest Period shall end on the next
succeeding Business Day (unless the next succeeding Business Day
falls in the next calendar month, in which event the Interest
Period in question shall end on the next preceding Business Day).
Any adjustment made pursuant to Clause 6.7.1 or 6.7.2 shall be ignored
for the purpose of determining the date on which any subsequent
Interest Period shall end.
6.8 DEFAULT RATE If an Event of Default shall occur, the whole of the
Indebtedness shall, from the date of the occurrence of the Event of
Default, bear interest up to the date of actual payment (both before
and after judgment) at the Default Rate, compounded at such intervals
as the Agent shall in its discretion determine, which interest shall
be payable from time to time by the Borrowers to the Agent on demand.
6.9 DETERMINATIONS CONCLUSIVE Each determination of an interest rate made
by the Agent in accordance with Clause 6 shall (save in the case of
manifest error or on any question of law) be final and conclusive.
7 THE MASTER AGREEMENT
7.1 PURPOSE The Agent and the Borrowers have entered, and/or may during
the Facility Period enter, into one or more Transactions pursuant to a
Master Agreement, the terms and conditions of each of which are or
will be specified in a Confirmation sent by the Agent to the
Borrowers.
7.2 ADDITIONAL TERMINATION EVENT If the Loan is for any reason not
advanced to the Borrowers on or before the Availability Termination
Date, and the Agent and the Borrowers have entered into any
Transactions on or before the Availability Termination Date, for the
purposes of the Master Agreement an Additional Termination Event (with
the Agent as the Affected Party) shall be deemed to have occurred on
the Availability Termination Date.
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7.3 ADJUSTMENT OF NOTIONAL AMOUNTS If the aggregate amount of the Loan
actually advanced by the Banks to the Borrowers is less than the
Notional Amount (or the aggregate Notional Amounts) of the Hedging
Transactions entered into on or before the Drawdown Date, the
obligations of the Borrowers in respect of those Hedging Transactions
shall, unless otherwise agreed by the Agent, be calculated, so far as
the Agent considers it practicable to do so, by reference to a
Notional Amount (or aggregate Notional Amounts) equal to the amount of
the Loan actually advanced reduced on each Repayment Date by the
amount of the Repayment Instalment due on that Repayment Date,
adjusted if necessary in accordance with Clause 5.2.
7.4 EFFECT OF PREPAYMENT If the Borrowers, subject always to Clause 5,
prepays part of the Loan (whether pursuant to Clause 5, Clause 11.2.5
or any other provision of this Agreement), and the amount of the Loan
remaining outstanding after application of that prepayment is less
than the Notional Amount (or the aggregate Notional Amounts) of the
Hedging Transactions then in effect (reduced, if appropriate, in
accordance with the Confirmations relating to those Hedging
Transactions), the obligations of the Borrowers in respect of those
Hedging Transactions shall, unless otherwise agreed by the Agent, be
calculated, so far as the Agent considers it practicable to do so, by
reference to a Notional Amount (or aggregate Notional Amounts) equal
to the amount of the Loan remaining outstanding after application of
the prepayment in question, reduced on each Repayment Date by the
amount of the Repayment Instalment due on that Repayment Date after
taking into account the application of the prepayment.
7.5 AUTHORITY In order to give effect to Clauses 7.3 and 7.4, or in the
event of voluntary or mandatory prepayment by the Borrowers of the
whole of the Loan, the Borrowers irrevocably authorise the Agent to
amend, restructure, unwind, cancel, net out, terminate, liquidate,
transfer or assign any of the rights and/or obligations created
pursuant to the Master Agreement in respect of those Hedging
Transactions, and/or to enter into any other interest rate exchange
and/or hedging transaction or commitment with the Borrowers or with
any other counterparty approved by the Agent.
7.6 TERMINATION OF TRANSACTIONS If the exercise of the Agent's rights
under Clause 7.5 results in the termination of any Transaction, that
Transaction shall, for the purposes of the Master Agreement
(including, without limitation, section 6(e)(i) of
29
the Master Agreement) be treated as a Terminated Transaction resulting
from as Event of Default by the Borrowers.
7.7 INDEMNITY The Borrowers will indemnify the Agent from time to time on
demand in respect of all liabilities, losses, costs or expenses
suffered, incurred or sustained by the Agent arising in any way in
relation to the exercise by the Agent of its rights under this Clause,
or arising in any way from any other termination, cancellation,
unwinding or restructuring of any Transaction, together (in each case)
with interest at the Default Rate from the date of the Agent's demand
until the date on which the Agent receives payment or reimbursement,
before or after any relevant judgment.
8 FEE
The Borrowers shall pay to or to the order of the Agent on the date of this
Agreement an arrangement fee in an amount equal to ninety thousand Dollars
($90,000).
9 SECURITY DOCUMENTS
As security for the repayment of the Indebtedness, the Borrowers shall
execute and deliver to the Agent or cause to be executed and delivered to
the Agent, on or before the Drawdown Date, the following Security Documents
in such forms and containing such terms and conditions as the Agent shall
require:-
9.1 THE MORTGAGES a first priority ship mortgage over each Vessel;
9.2 THE ASSIGNMENTS a deed of assignment of the Insurances, Earnings,
Charter Rights and Requisition Compensation of each Vessel;
9.3 THE CORPORATE GUARANTEE the guarantee and indemnity of the Guarantor;
9.4 THE PERSONAL GUARANTEE the guarantee and indemnity of the Personal
Guarantor;
9.5 THE ACCOUNTS SECURITY DEED an accounts security deed in respect of all
amounts from time to time standing to the credit of the Accounts;
9.6 THE SHARE PLEDGES a pledge of all the issued shares of each of the
Borrowers; and
9.7 MANAGER'S UNDERTAKINGS an undertaking from the Managers in respect of
each Vessel and its Owner.
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10 AGENCY AND TRUST
10.1 APPOINTMENT Each of the Banks appoints the Agent its agent for the
purpose of administering the Loan and the Security Documents.
10.2 AUTHORITY Each of the Banks irrevocably authorises the Agent (subject
to Clauses 10.4 and 10.19):-
10.2.1 to execute the Security Documents (other than this Agreement)
in its capacity as Agent;
10.2.2 to collect, receive, release or pay any money on its behalf;
10.2.3 acting on the instructions from time to time of an Instructing
Group to give or withhold any waivers, consents or approvals
under or pursuant to any of the Security Documents;
10.2.4 acting on the instructions from time to time of and Instructing
Group to exercise, or refrain from exercising, any discretions
under or pursuant to any of the Security Documents; and
10.2.5 to enforce the Security Documents on its behalf acting on its
instructions.
The Agent shall have no duties or responsibilities as agent or as
security trustee other than those expressly conferred on it by the
Security Documents and shall not be obliged to act on any instructions
from the Banks or an Instructing Group if to do so would, in the
opinion of the Agent, be contrary to any provision of the Security
Documents or to any law, or would expose the Agent to any actual or
potential liability to any third party.
10.3 TRUST The Agent agrees and declares, and each of the Banks
acknowledges, that, subject to the terms and conditions of this
Clause, the Agent holds the Trust Property on trust for the Banks, in
accordance with their respective Proportionate Shares, absolutely.
Each of the Banks agrees that the obligations, rights and benefits
vested in the Agent in its capacity as security trustee shall be
performed and exercised in accordance with this Clause. The Agent in
its capacity as security trustee shall have the benefit of all of the
provisions of this Agreement benefitting it in its capacity as agent
for the Banks, and all the powers and discretions conferred on
trustees by the Trustee Act 1925 (to the extent not inconsistent with
this Agreement). In addition:-
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10.3.1 the Agent (and any attorney, agent or delegate of the Agent)
may indemnify itself or himself out of the Trust Property against
all liabilities, costs, fees, damages, charges, losses and
expenses sustained or incurred by it or him in relation to the
taking or holding of any of the Trust Property or in connection
with the exercise or purported exercise of the rights, trusts,
powers and discretions vested in the Agent or any other such
person by or pursuant to the Security Documents or in respect of
anything else done or omitted to be done in any way relating to
the Security Documents; and
10.3.2 the Banks acknowledge that the Agent shall be under no
obligation to insure any property nor to require any other person
to insure any property and shall not be responsible for any loss
which may be suffered by any person as a result of the lack or
insufficiency of any insurance; and
10.3.3 the Agent and the Banks agree that the perpetuity period
applicable to the trusts declared by this Agreement shall be the
period of eighty years from the date of this Agreement.
10.4 LIMITATIONS ON AUTHORITY Except with the prior written consent of each
of the Banks, the Agent shall not be entitled to :-
10.4.1 release or vary any security given for the Borrowers'
obligations under this Agreement; nor
10.4.2 waive the payment of any sum of money payable by any of the
Security Parties under the Security Documents; nor
10.4.3 change the meaning of the expressions "INSTRUCTING GROUP" or
"MARGIN"; nor
10.4.4 exercise, or refrain from exercising, any discretion, or give
or withhold any consent, the exercise or giving of which is, by
the terms of this Agreement, expressly reserved to the Banks; nor
10.4.5 extend the due date for the payment of any sum of money payable
by any of the Security Parties under the Security Documents; nor
32
10.4.6 take or refrain from taking any step if the effect of such
action or inaction may lead to the increase of the obligations of
a Bank under any of the Security Documents; nor
10.4.7 agree to change the currency in which any sum is payable under
the Security Documents (other than in accordance with the terms
of the Security Documents); nor
10.4.8 agree to amend this Clause 10.4.
10.5 LIABILITY Neither the Agent nor any of its directors, officers,
employees or agents shall be liable to the Banks for anything done or
omitted to be done by the Agent under or in connection with the
Security Documents unless as a result of the Agent's wilful misconduct
or gross negligence.
10.6 ACKNOWLEDGEMENT Each of the Banks acknowledges that:-
10.6.1 it has not relied on any representation made by the Agent or
any of the Agent's directors, officers, employees or agents or by
any other person acting or purporting to act on behalf of the
Agent to induce it to enter into any of the Security Documents;
10.6.2 it has made and will continue to make without reliance on the
Agent, and based on such documents and other evidence as it
considers appropriate, its own independent investigation of the
financial condition and affairs of the Security Parties in
connection with the making and continuation of the Loan;
10.6.3 it has made its own appraisal of the creditworthiness of the
Security Parties;
10.6.4 the Agent shall not have any duty or responsibility at any time
to provide it with any credit or other information relating to
any of the Security Parties unless that information is received
by the Agent pursuant to the express terms of the Security
Documents.
Each of the Banks agrees that it will not assert nor seek to assert
against any director, officer, employee or agent of the Agent or
against any other person acting or purporting to act on behalf of the
Agent any claim which it might have against them in respect of any of
the matters referred to in this Clause.
33
10.7 LIMITATIONS ON RESPONSIBILITY The Agent shall have no responsibility
to any of the Security Parties or to the Banks on account of:-
10.7.1 the failure of a Bank or of any of the Security Parties to
perform any of their respective obligations under the Security
Documents;
10.7.2 the financial condition of any of the Security Parties;
10.7.3 the completeness or accuracy of any statements, representations
or warranties made in or pursuant to any of the Security
Documents, or in or pursuant to any document delivered pursuant
to or in connection with any of the Security Documents;
10.7.4 the negotiation, execution, effectiveness, genuineness,
validity, enforceability, admissibility in evidence or
sufficiency of any of the Security Documents or of any document
executed or delivered pursuant to or in connection with any of
the Security Documents.
10.8 THE AGENT'S RIGHTS The Agent may:-
10.8.1 assume that all representations or warranties made or deemed
repeated by any of the Security Parties in or pursuant to any of
the Security Documents are true and complete, unless, in its
capacity as the Agent, it has acquired actual knowledge to the
contrary; and
10.8.2 assume that no Event of Default or Potential Event of Default
has occurred unless, in its capacity as the Agent, it has
acquired actual knowledge to the contrary; and
10.8.3 rely on any document or Communication believed by it to be
genuine; and
10.8.4 rely as to legal or other professional matters on opinions and
statements of any legal or other professional advisers selected
or approved by it; and
10.8.5 rely as to any factual matters which might reasonably be
expected to be within the knowledge of any of the Security
Parties on a certificate signed by or on behalf of that Security
Party; and
34
10.8.6 refrain from exercising any right, power, discretion or remedy
unless and until instructed to exercise that right, power,
discretion or remedy and as to the manner of its exercise by the
Banks (or, where applicable, by an Instructing Group) and unless
and until the Agent has received from the Banks any payment which
the Agent may require on account of, or any security which the
Agent may require for, any costs, claims, expenses (including
legal and other professional fees) and liabilities which it
considers it may incur or sustain in complying with those
instructions.
10.9 THE AGENT'S DUTIES The Agent shall:-
10.9.1 if requested in writing to do so by a Bank, make enquiry and
advise the Banks as to the performance or observance of any of
the provisions of the Security Documents by any of the Security
Parties or as to the existence of an Event of Default; and
10.9.2 inform the Banks promptly of any Event of Default of which the
Agent has actual knowledge.
10.10 NO DEEMED KNOWLEDGE The Agent shall not be deemed to have actual
knowledge of the falsehood or incompleteness of any representation or
warranty made or deemed repeated by any of the Security Parties or
actual knowledge of the occurrence of any Event of Default or
Potential Event of Default unless a Bank or any of the Security
Parties shall have given written notice thereof to the Agent in its
capacity as the Agent. Any information acquired by the Agent other
than specifically in its capacity as the Agent shall not be deemed to
be information acquired by the Agent in its capacity as the Agent.
10.11 OTHER BUSINESS The Agent may, without any liability to account to the
Banks, generally engage in any kind of banking or trust business with
any of the Security Parties or any of their respective subsidiaries or
associated companies or with a Bank as if it were not the Agent.
10.12 INDEMNITY The Banks shall, promptly on the Agent's request, reimburse
the Agent in their respective Proportionate Shares, for, and keep the
Agent fully indemnified in respect of:-
35
10.12.1 all amounts payable by the Borrowers to the Agent pursuant to
Clause 18.2 to the extent that those amounts are not paid by the
Borrowers;
10.12.2 all liabilities, damages, costs and claims sustained or
incurred by the Agent in connection with the Security Documents,
or the performance of its duties and obligations, or the exercise
of its rights, powers, discretions or remedies under or pursuant
to any of the Security Documents; or in connection with any
action taken or omitted by the Agent under or pursuant to any of
the Security Documents, unless in any case those liabilities,
damages, costs or claims arise solely from the Agent's wilful
misconduct or gross negligence.
10.13 EMPLOYMENT OF AGENTS In performing its duties and exercising its
rights, powers, discretions and remedies under or pursuant to the
Security Documents, the Agent shall be entitled to employ and pay
agents to do anything which the Agent is empowered to do under or
pursuant to the Security Documents (including the receipt of money and
documents and the payment of money) and to act or refrain from taking
action in reliance on the opinion of, or advice or information
obtained from, any lawyer, banker, broker, accountant, valuer or any
other person believed by the Agent in good faith to be competent to
give such opinion, advice or information.
10.14 DISTRIBUTION OF PAYMENTS The Agent shall pay promptly to the order of
each of the Banks that Bank's Proportionate Share of every sum of
money received by the Agent pursuant to the Security Documents or the
Mortgagees' Insurances (with the exception of any amounts payable
pursuant to Clause 8 and any amounts which, by the terms of the
Security Documents, are paid to the Agent for the account of the Agent
alone or specifically for the account of one or more Banks) and until
so paid such amount shall be held by the Agent on trust absolutely for
that Bank.
10.15 REIMBURSEMENT The Agent shall have no liability to pay any sum to a
Bank until it has itself received payment of that sum. If, however,
the Agent does pay any sum to a Bank on account of any amount
prospectively due to that Bank pursuant to Clause 10.14 before it has
itself received payment of that amount, and the Agent does not in fact
receive payment within five Business Days after the date on which that
payment was required to be made by the terms of the Security Documents
or the
36
Mortgagees' Insurances, each Bank receiving any such payment will, on
demand by the Agent, refund to the Agent an amount equal to the amount
received by it, together with an amount sufficient to reimburse the
Agent for any amount which the Agent may certify that it has been
required to pay by way of interest on money borrowed to fund the
amount in question during the period beginning on the date on which
that amount was required to be paid by the terms of the Security
Documents or the Mortgagees' Insurances and ending on the date on
which the Agent receives reimbursement.
10.16 REDISTRIBUTION OF PAYMENTS Unless otherwise agreed between the Banks
and the Agent, if at any time a Bank receives or recovers by way of
set-off, the exercise of any lien or otherwise (other than from any
assignee or transferee of or sub-participant in that Bank's
Commitment), an amount greater than that Bank's Proportionate Share of
any sum due from any of the Security Parties under the Security
Documents (the amount of the excess being referred to in this Clause
as the "EXCESS AMOUNT") then:-
10.16.1 that Bank shall promptly notify the Agent (which shall
promptly notify each other Bank);
10.16.2 that Bank shall pay to the Agent an amount equal to the Excess
Amount within ten days of its receipt or recovery of the Excess
Amount; and
10.16.3 the Agent shall treat that payment as if it were a payment by
the Security Party in question on account of the sum owed to the
Banks as aforesaid and shall account to the Banks in respect of
the Excess Amount in accordance with the provisions of this
Clause.
However, if a Bank has commenced any Proceedings to recover sums owing
to it under the Security Documents and, as a result of, or in
connection with, those Proceedings has received an Excess Amount, the
Agent shall not distribute any of that Excess Amount to any other Bank
which had been notified of the Proceedings and had the legal right to,
but did not, join those Proceedings or commence and diligently
prosecute separate Proceedings to enforce its rights in the same or
another court.
37
10.17 RESCISSION OF EXCESS AMOUNT If all or any part of any Excess Amount
is rescinded or must otherwise be restored to any of the Security
Parties or to any other third party, the Banks which have received any
part of that Excess Amount by way of distribution from the Agent
pursuant to this Clause shall repay to the Agent for the account of
the Bank which originally received or recovered the Excess Amount, the
amount which shall be necessary to ensure that the Banks share
rateably in accordance with their Proportionate Shares in the amount
of the receipt or payment retained, together with interest on that
amount at a rate equivalent to that (if any) paid by the Bank
receiving or recovering the Excess Amount to the person to whom that
Bank is liable to make payment in respect of such amount, and Clause
10.16.3 shall apply only to the retained amount.
10.18 PROCEEDINGS Each of the Banks and the Agent shall notify one another
of the proposed commencement of any Proceedings under any of the
Security Documents prior to their commencement.
10.19 INSTRUCTIONS Where the Agent is authorised or directed to act or
refrain from acting in accordance with the instructions of the Banks
or of an Instructing Group each of the Banks shall provide the Agent
with instructions within three Business Days of the Agent's request
(which request may be made orally or in writing). If a Bank does not
provide the Agent with instructions within that period, that Bank
shall be bound by the decision of the Agent. Nothing in this Clause
shall limit the right of the Agent to take, or refrain from taking,
any action without obtaining the instructions of the Banks or an
Instructing Group if the Agent in its discretion considers it
necessary or appropriate to take, or refrain from taking, such action
in order to preserve the rights of the Banks under or in connection
with the Security Documents. In that event, the Agent will notify the
Banks of the action taken by it as soon as reasonably practicable, and
the Banks agree to ratify any action taken by the Agent pursuant to
this Clause.
10.20 COMMUNICATIONS Any Communication under this Clause shall be given,
delivered, made or served, in the case of the Agent (in its capacity
as Agent or as one of the Banks), and in the case of the other Banks,
at the address or fax number indicated in Schedule 1.
38
10.21 PAYMENTS All amounts payable to a Bank under this Clause shall be
paid to such account at such bank as that Bank may from time to time
direct in writing to the Agent.
10.22 RETIREMENT Subject to a successor acceptable to the Borrowers being
appointed in accordance with this Clause, the Agent may retire as
agent and/or security trustee at any time without assigning any reason
by giving to the Borrowers and the Banks notice of its intention to do
so, in which event the following shall apply:-
10.22.1 the Banks may within thirty days after the date of the Agent's
notice appoint a successor to act as agent and/or security
trustee or, if they fail to do so, the Agent may appoint any
other bank or financial institution as its successor;
10.22.2 the resignation of the Agent shall take effect simultaneously
with the appointment of its successor on written notice of that
appointment being given to the Borrowers and the Banks;
10.22.3 the Agent shall thereupon be discharged from all further
obligations as agent and/or security trustee but shall remain
entitled to the benefit of the provisions of this Clause;
10.22.4 the Agent's successor and each of the other parties to this
Agreement shall have the same rights and obligations amongst
themselves as they would have had if that successor had been a
party to this Agreement.
10.23 NO FIDUCIARY RELATIONSHIP Except as provided in Clauses 10.3 and
10.14, the Agent shall not have any fiduciary relationship with or be
deemed to be a trustee of or for a Bank and nothing contained in any
of the Security Documents shall constitute a partnership between any
two or more Banks or between the Agent and any Bank.
10.24 THE AGENT AS A BANK The expression "THE BANKS" when used in the
Security Documents includes the Agent in its capacity as one of the
Banks. The Agent shall be entitled to exercise its rights, powers,
discretions and remedies under or pursuant to the Security Documents
in its capacity as one of the Banks in the same manner as any other
Bank and as if it were not also the Agent.
39
10.25 THE AGENT AS SECURITY TRUSTEE Unless the context otherwise requires,
the expression "THE AGENT" when used in the Security Documents
includes the Agent acting in its capacities both as agent and security
trustee.
11 COVENANTS
11.1 NEGATIVE COVENANTS
The Borrowers will not without the Agent's prior written consent: -
11.1.1 NO DISPOSALS OR THIRD PARTY RIGHTS dispose of or create or
permit to arise or continue any Encumbrance or other third party
right on or over all or any part of its present or future assets
or undertaking (including, without limitation, any of its rights
under or in connection with the Master Agreement and any amount
at any time payable by it to the Agent under or pursuant to the
Master Agreement); nor
11.1.2 NO BORROWINGS borrow any money or incur any obligations under
leases, except monies borrowed under this Agreement or from
shareholders and/or affiliates, which shall be subordinated to
the Agent; nor
11.1.3 NO REPAYMENTS repay any loans made to it; nor
11.1.4 NO SUBSTANTIAL LIABILITIES except in the ordinary course of
business, incur any liability to any third party which is in the
opinion of the Agent of a substantial nature; nor
11.1.5 NO DEALINGS WITH MASTER AGREEMENT assign, novate or in any
other way transfer any of its rights or obligations under or
pursuant to the Master Agreement, nor enter into any interest
rate exchange or hedging agreement with anyone other than the
Agent, nor any other agreement or commitment the effect of which
is, in the opinion of the Agent, materially to prejudice the
hedging of the Borrowers' interest rate risk effected by the
Hedging Transactions from time to time entered into between the
Borrowers and the Agent; nor
11.1.6 NO OTHER BUSINESS engage in any business other than the
ownership, operation, chartering and management of the Vessels;
nor
40
11.1.7 NO LOANS OR OTHER FINANCIAL COMMITMENTS make any loan nor enter
into any guarantee or indemnity or otherwise voluntarily assume
any actual or contingent liability in respect of any obligation
of any other person; nor
11.1.8 NO DIVIDENDS pay any dividends or make any other distributions
to shareholders or issue any new shares; nor
11.1.9 NO SALE OF VESSELS sell or otherwise dispose of the Vessel
owned by it or any shares in that Vessel nor agree to do so; nor
11.1.10 NO CHARTERING AFTER EVENT OF DEFAULT following the occurrence
and during the continuation of an Event of Default let the
Vessels on charter or renew or extend any charter or other
contract of employment of the Vessels (nor agree to do so); nor
11.1.11 NO CHANGE IN VESSELS' MANAGERS appoint anyone other than the
Managers as commercial or technical managers of the Vessels, nor
terminate or materially vary the arrangements for the commercial
or technical management of the Vessels, nor permit the Managers
to subcontract or delegate the commercial or technical
management of the Vessels to any third party; nor
11.1.12 NO CHANGE IN OWNERSHIP OR CONTROL permit any change in the
Borrowers' and/or the Corporate Guarantor's intermediate or
ultimate beneficial ownership and control from that advised to
the Agent at the date of this Agreement; nor
11.1.13 NEGATIVE PLEDGE permit any Encumbrance (other than in favour
of the Banks) to subsist, arise or be created or extended over
all or any part of its present or future undertakings, assets,
rights or revenues to secure or prefer any present or future
Indebtedness or other liability or obligation of the Borrowers or
any other person; nor
11.1.14 NO MERGER merge or consolidate with any other person; nor
11.1.15 ACQUISITIONS acquire any further assets other than the Vessels
and rights arising under contracts entered into by or on behalf
of the Borrowers in
41
the ordinary course of its business of owning, operating and
chartering the Vessels; nor
11.1.16 OTHER OBLIGATIONS incur any obligations except for obligations
arising under the Security Documents or contracts entered into in
the ordinary course of its business of owning, operating and
chartering the Vessels; nor
11.1.17 GUARANTEES it will not issue any guarantees or indemnities or
otherwise become directly or contingently liable for the
obligations of any person, firm, or corporation except pursuant
to the Security Documents and except for guarantees or
indemnities from time to time required in the ordinary course by
any protection and indemnity or war risks association with which
the Vessels is entered, guarantees required to procure the
release of the Vessels from any arrest, detention, attachment or
levy or guarantees or undertakings required for the salvage of
the Vessels.
11.2 POSITIVE COVENANTS
11.2.1 REGISTRATION OF VESSELS The Borrowers undertakes to maintain the
registration of the Vessels under the flag referred to in Recital (B)
for the duration of the Facility Period.
11.2.2 PROVISION OF VALUATION CERTIFICATE The Agent will within the last
ninety (90) days of each calendar year commencing after the Drawdown
Date obtain at the Borrowers' expense a valuation certificate
addressed to the Agent from two Approved Brokers certifying the market
value of the Vessels. Such valuation shall be for the cost of the
Borrowers once during each period of twelve calendar months during the
Facility Period (commencing on the Drawdown Date) and may be made with
or without physical inspection of the Vessels (as the Agent may
require) on the basis of a sale for prompt delivery for cash at arm's
length on normal commercial terms as between a willing seller and a
willing buyer and (at the option of the Agent) either free of or
subject to any existing charter or other contract of employment. The
Agent may obtain additional valuations at any time at its discretion
at its own cost (unless there is an
42
Event of Default which is continuing in which case the cost shall be for
the Borrowers' account).
11.2.3 VESSEL VALUATIONS FOR PURPOSES OF SECURITY DOCUMENTS For the purposes of
the Security Documents, the market value of the Vessels shall be the value
certified in the last valuation certificate obtained by the Agent pursuant
to Clauses 11.2.2 PROVIDED THAT if the Vessels at the date of the Agent's
request shall be subject to any charter or other contact of employment or
any Encumbrance (other than as created by or pursuant to the Security
Documents) the Agent shall for the purpose of the Security Documents, be
entitled to deduct from the market value (determined as aforesaid) such sum
(if any) as in the Agent's discretion shall represent the amount of the
diminution in the market value of the Vessels arising as a result of the
existence of such charter or other contract of employment or Encumbrance
and in that event, for the purposes of the Security Documents, the market
value of the Vessels shall be the said value less any amount so deducted by
the Agent.
11.2.4 ADDITIONAL SECURITY If and so often as the aggregate of the market value
of the Vessels (determined by the Agent in accordance with Clause 11.2.3)
plus the value of any additional security for the time being provided to
the Agent pursuant to this Clause shall be less than (i) one hundred and
forty per centum (140%) of the amount of the Indebtedness for the period
commencing on the Drawdown Date and ending on 31 May 2007 and (ii) one
hundred and fifty per centum (150%) of the amount of the Indebtedness for
the remainder of the Facility Period, the Borrowers will, within thirty
days of the request of the Agent to do so, at the Borrowers' option: -
(a) pay to the Agent or to its nominee a cash deposit in the amount of the
shortfall to be secured in favour of the Banks (or to the Agent on
their behalf) as additional security for the payment of the Loan; or
(b) give to the Banks other additional security in amount and form
acceptable to the Banks in their discretion; or
43
(c) prepay the amount of the Loan which will ensure that the aggregate of
the market value of the Vessels (determined as aforesaid) plus the
value of any such additional security is not less than (i) one hundred
and forty per centum (140%) of the amount of the Indebtedness for the
period commencing on the Drawdown Date and ending on 31 May 2007 and
(ii) one hundred and fifty per centum (150%) of the amount of the
Indebtedness for the remainder of the Facility Period.
Clauses 5.4, 5.5 and 5.6 shall apply, mutatis mutandis, to any prepayment
made pursuant to this Clause and the value of any additional security
provided pursuant to this Clause shall be determined by the Agent in its
discretion.
11.2.5 FINANCIAL STATEMENTS The Borrowers will supply to the Agent without
request:
(a) the Borrowers' and Corporate Guarantor's annual audited financial
statements for each financial year of the Borrowers and the Corporate
Guarantor ending during the Facility Period, containing (amongst other
things) the Borrowers' and Corporate Guarantor's profit and loss
account for, and balance sheet within one hundred and eighty (180)
days after the end of, each such financial year, prepared in
accordance with generally accepted accounting principles and practices
applicable to companies incorporated in the Borrowers' and Corporate
Guarantor's country of incorporation consistently applied, and audited
by a firm of chartered accountants (or equivalent) acceptable to the
Agent, in each case within one hundred and eighty days of the end of
the financial year to which they relate;
(b) the Borrowers' and Corporate Guarantor's semi-annual audited
management accounts and financial statements within ninety days (90)
after the end of each financial half year.
11.2.6 OTHER INFORMATION The Borrowers will promptly supply and will procure
that the Corporate Guarantor supplies to the Agent copies of all
44
financial and other information from time to time given by the Borrowers
and the Corporate Guarantor to its shareholders and such information and
explanations as the Agent may from time to time require in connection with
the operation of the Vessels and the Borrowers' and the Corporate
Guarantor's profit and liquidity based on the applicable laws and
regulations and the Agent's own internal guidelines relating to the Agent's
verification of the identity and knowledge of its customers, and will
procure that the Agent be given the like information and explanations
relating to all other Security Parties.
11.2.7 EVIDENCE OF GOODSTANDING The Borrowers will from time to time on the
request of the Bank provide the Agent with evidence in form and substance
satisfactory to the Agent that the Security Parties and all corporate
shareholders of any of the Security Parties remain in good standing.
11.2.8 EVIDENCE OF CURRENT COFR Without limiting the Borrowers' obligations
under Clause 11.2.6, and prior to the Vessels entering any location that is
subject to the United States Oil Pollution Act 1990 (or any re-enactment
thereof), the Borrowers shall notify the Agent and the Borrowers shall (and
shall from time to time whilst the Vessels is situated in such location) at
the request of the Agent provide the Agent with such evidence as the Agent
may reasonably require that the Vessels has a valid and current Certificate
of Financial Responsibility pursuant to the United States Oil Pollution Act
1990.
11.2.9 ISM CODE COMPLIANCE The Borrowers will:-
(a) procure that the Vessels remain for the duration of the Facility
Period subject to a SMS;
(b) maintain a valid and current SMC for the Vessels throughout the
Facility Period;
(c) if not itself the Company, procure that each Company maintains a valid
and current DOC throughout the Facility Period;
45
(d) immediately notify the Agent in writing of any actual or
threatened withdrawal, suspension, cancellation or
modification of the Vessels' SMC or of the Companys' DOC;
(e) immediately notify the Agent in writing of any "accident" or
"major non-conformity", as each of those terms is defined in
the Guidelines on the Implementation of the International
Safety Management Code by Administrations adopted by the
Assembly of the International Maritime Organisation pursuant
to Resolution A.788(19), and of the steps being taken to
remedy the situation; and
(f) not without the prior written consent of the Agent (which
will not be unreasonably withheld) change the identity of
the each Company.
11.2.10 ISPS CODE COMPLIANCE The Borrowers will:-
(a) procure that the Vessels and the Companies responsible for
the, Vessels' compliance with the ISPS Code comply with the
ISPS Code; and
(b) maintain for the Vessels throughout the Facility Period a
valid and current International Ship Security Certificate
issued under the ISPS Code ("ISSC"); and
(c) notify the Agent immediately in writing of any actual or
threatened withdrawal, suspension, cancellation or
modification of the ISSC,
11.2.11 ENVIRONMENT The Borrowers covenant with the Agent as follows:
(a) they shall comply with all applicable Environmental Laws
including, without limitation, requirements relating to the
establishment of financial responsibility (and shall require
that all Environmental Affiliates of the Borrowers comply
with all applicable Environmental Laws and obtain and comply
with all required Environmental Approvals, which
Environmental Laws and Environmental Approvals relate to the
Vessels or its
46
operation or its carriage or cargo), except where that
non-compliance would not have a Material Adverse Effect;
(b) they shall conduct and complete all reasonably necessary
investigations, studies, sampling, audits and testings
required in connection with any known (or threatened)
Release of Materials of Environmental Concern which would
have a Material Adverse Effect; and
(c) they shall, promptly upon the occurrence of any of the
following events, provide to the Agent a certificate of an
officer of the Borrowers or of the Borrowers' agents
specifying in detail the nature of the event concerned:-
(i) the receipt by the Borrowers or any Environmental
Affiliate (where the Borrowers has knowledge of the
receipt) of any Environmental Claim which would have a
Material Adverse Effect; or
(ii) any (or any threatened) Release of Materials of
Environmental Concern which would have a Material
Adverse Effect;
and upon the written request of the Agent, the Borrowers
shall submit to the Agent, at reasonable intervals, a report
updating the status of any occurrence of an Environmental
Claim or a Release of Materials of Environmental Concern,
that would have a Material Adverse Effect.
11.2.12 INSPECTION OF RECORDS The Borrowers will permit the inspection
of its financial records and accounts from time to time by the
Agent or its nominee.
11.2.13 PARI PASSU OBLIGATIONS The Borrowers will ensure that,
throughout the Facility Period, the obligations of the Security
Parties under or pursuant to the Security Documents rank at least
pari passu with all other existing or future indebtedness,
obligations or liabilities of the Security Parties, other than
any mandatorily preferred by law.
47
11.2.14 NOTIFICATION OF EVENT OF DEFAULT The Borrowers will
immediately notify the Agent in writing of the occurrence of any
Event of Default or Potential Event of Default.
11.2.15 NOT IMPERIL FLAG, OWNERSHIP, INSURANCES The Borrowers will
ensure that the Vessels are maintained and trade in conformity
with the laws of the Republic of Panama, of the Borrowers or of
the nationality of its officers, and in accordance with the
requirements of the Insurances and will ensure that nothing is
done or permitted to be done which could endanger the flag of the
Vessels or their unencumbered (other than Encumbrances in favour
of the Banks and/or permitted by this Agreement) ownership or
their Insurances.
11.2.16 CHARTERING The Borrowers will ensure and procure that in the
event of the Vessels being employed under a charterparty, the
duration of which exceeds twelve (12) months, the Agent shall be
furnished forthwith with (a) details of the new employment, (b)
(if required by the Agent) a specific charterparty assignment in
favour of the Agent of the benefit of such charterparty and (c) a
notice of any such assignment addressed to the relevant charterer
and endorsed with an acknowledgement of receipt by the relevant
charterer, all in form and substance satisfactory to the Agent.
11.2.17 EARNINGS The Borrowers will ensure and procure that, unless
and until directed by the Agent otherwise upon an Event of
Default (i) all the Earnings of the Vessels shall be paid to the
Earnings Accounts and (ii) the persons from whom the Earnings are
from time to time due are irrevocably instructed to pay them to
the Earnings Accounts or to such account in the name of the
Borrowers as shall be from time to time determined by the Agent
in accordance with the provisions hereof and of the relevant
Security Documents.
11.2.18 ADDITIONAL DOCUMENTS The Borrowers will from time to time and
within ten (10) days after the Agent's request execute and
deliver to the Agent or procure the execution and delivery to the
Agent of all such documents as shall be deemed desirable at the
reasonable discretion of the Agent for giving full effect to this
Agreement, and for perfecting,
48
protecting the value of or enforcing any rights or securities
granted to the Agent under any one or more of this Agreement, the
other Security Documents and any other documents executed
pursuant hereto or thereto and in case that any conditions
precedent (with the Agent's consent) have not been fulfilled
prior to the Drawdown Date, such conditions shall be complied
with within fourteen (14) days of the Drawdown Date (unless the
Agent agrees otherwise in writing) and failure to comply with
this covenant shall be an Event of Default.
11.2.19 PHYSICAL CONDITION SURVEY OF THE VESSELS AND INSPECTION OF
RECORDS The Borrowers will permit the Agent to conduct a physical
condition survey of each Vessel and to conduct a comprehensive
inspection of the class and other records of each Vessel by a
surveyor appointed by the Agent (in its discretion) from time to
time during the Facility Period and at the Borrowers' expense.
12 ACCOUNTS
12.1 MAINTENANCE OF ACCOUNTS The Borrowers shall maintain the Accounts with
the Agent for the duration of the Facility Period free of Encumbrances
and rights of set off other than as created by or pursuant to the
Security Documents.
12.2 EARNINGS The Borrowers shall procure that there is credited to the
Earnings Account, all Earnings and any Requisition Compensation of
each Vessel.
12.3 TRANSFERS TO RETENTION ACCOUNT On the day in each calendar month
during the Facility Period which numerically corresponds to the day on
which the Drawdown Date occurred (or, in any month in which there is
no such day, on the last Business Day of that month), the Borrowers
shall procure that there is transferred from the Earnings Account (and
irrevocably authorise the Agent to transfer from the Earnings Account)
to the Retention Account:-
12.3.1 any costs or other amounts due and payable or outstanding in
respect of the Loan; and
12.3.2 one-third of the amount of the Repayment Instalment due on the
next Repayment Date; and
49
12.3.3 the amount of interest due on the next Interest Payment Date
divided by the number of months between the last Interest Payment
Date and the Interest Payment Date in question.
12.4 ADDITIONAL PAYMENTS TO RETENTION ACCOUNT If for any reason the amount
standing to the credit of the Earnings Account shall be insufficient
to make any transfer to the Retention Account required by Clause 12.3,
the Borrowers shall, without demand, procure that there is credited to
the Retention Account, on the date on which the relevant amount would
have been transferred from the Earnings Account, an amount equal to
the amount of the shortfall.
12.5 APPLICATION OF RETENTION ACCOUNT The Borrowers shall procure that
there is transferred from the Retention Account (and irrevocably
authorise the Agent to transfer from the Retention Account) to the
Agent on behalf of the Banks:-
12.5.1 on each Repayment Date, the amount of the Repayment Instalment
then due; and
12.5.2 on each Interest Payment Date, the amount of interest then due.
12.6 BORROWERS' OBLIGATIONS NOT AFFECTED If for any reason the amount
standing to the credit of the Retention Account shall be insufficient
to pay any Repayment Instalment or to make any payment of interest
when due, the Borrowers' obligation to pay that Repayment Instalment
or to make that payment of interest shall not be affected.
12.7 RELEASE OF SURPLUS Any amount remaining to the credit of the Earnings
Account following the making of any transfer required by Clause 12.3
shall (unless an Event of Default or Potential Event of Default shall
have occurred and be continuing) be released to or to the order of the
Borrowers.
12.8 RESTRICTION ON WITHDRAWAL During the Facility Period no sum may be
withdrawn from the Account (except in accordance with this Clause)
without the prior written consent of the Agent.
12.9 RELOCATION OF ACCOUNTS At any time following the occurrence and during
the continuation of an Event of Default, the Agent may without the
consent of the Borrowers relocate either of the Accounts to any other
branch of the Agent, without
50
prejudice to the continued application of this Clause and the rights
of the Agent and the Banks under or pursuant to the Security
Documents.
13 EVENTS OF DEFAULT
13.1 THE AGENT'S RIGHTS If any of the events set out in Clause 13.2 occurs,
the Agent may at its discretion by notice to the Borrowers declare
itself to be under no further obligation to the Borrowers under or
pursuant to this Agreement and may declare all or any part of the
Indebtedness (including such unpaid interest as shall have accrued) to
be immediately payable, in which event the Indebtedness (or the part
of the Indebtedness referred to in the Bank's notice) shall
immediately become due and payable without any further demand or
notice of any kind.
13.2 EVENTS OF DEFAULT The events referred to in Clause 13.1 are:-
13.2.1 PAYMENT DEFAULT if the Borrowers default in the payment of any
part of the Indebtedness when due; or if the Charterer defaults
in the payment of any part of the hire under the Charter when
due;
13.2.2 OTHER DEFAULT if any of the Security Parties fails to observe
or perform any of the covenants, conditions, undertakings,
agreements or obligations on its part contained in any of the
Security Documents and, where such default is capable of remedy,
such default is not remedied within thirty (30) days if the date
of its occurrence, or shall in any other way be in breach of or
do or cause to be done any act repudiating or evidencing an
intention to repudiate any of the Security Documents; or
13.2.3 MISREPRESENTATION OR BREACH OF WARRANTY if any representation
or warranty made or repeated, or any other information given, by
any of the Security Parties to the Agent in or leading up to or
during the currency of any of the Security Documents, or in or
pursuant to any notice or other document delivered to the Agent
under or pursuant to any of the Security Documents, is false or
incorrect or misleading in any respect which the Agent in its
discretion considers to be material; or
13.2.4 EXECUTION if a distress or execution or other process of a
court or authority is levied on any of the property of any of the
Security Parties
51
before or after Final judgment or by order of any competent court
or authority and is not satisfied within seven days of xxxx; or
13.2.5 INSOLVENCY EVENTS if any of the Security Parties or the
Charterer: -
(a) resolves to appoint, or applies for or consents to the
appointment of, a receiver, administrative receiver,
trustee, administrator or liquidator of itself or of all or
part of its assets; or
(b) is unable or admits its inability to pay its debts as they
fall due; or
(c) makes a general assignment for the benefit of creditors or
enters into a moratorium on payment of any of its
indebtedness; or
(d) ceases trading or threatens to cease trading; or
(e) has appointed an Inspector under the Companies Act 1985 or
any statutory provision which the Agent in its discretion
considers analogous thereto; or
13.2.6 INSOLVENCY PROCEEDINGS if any proceedings are commenced or
threatened, or any order or judgment is given by any court, for
the bankruptcy, liquidation, winding up, administration or
re-organisation of any of the Security Parties or for the
appointment of a receiver, administrative receiver,
administrator, liquidator or trustee of any of the Security
Parties or of all or part of the assets of any of the Security
Parties, or if any person appoints or purports to appoint such
receiver, administrative receiver, administrator, liquidator or
trustee; or
13.2.7 IMPOSSIBILITY OR ILLEGALITY if any event occurs which would, or
would with the passage of time, render performance of any of the
Security Documents by any of the Security Parties impossible,
unlawful or unenforceable by the Agent; or
13.2.8 CONDITIONS SUBSEQUENT if any of the conditions set out in
Clause 3.2 is not satisfied within the time reasonably required
by the Agent; or
13.2.9 COVENANTS if any of the covenants set out in Clause 11 is not
satisfied within thirty days; or
52
13.2.10 CHANGE IN OWNERSHIP OR CONTROL if any change occurs in the
Borrowers' and/or the Corporate Guarantor's beneficial ownership
and control from that advised to the Agent at the date of this
Agreement, or otherwise in accordance with Clause 11.1.12 (or in
the case of the Borrowers) or Clause 8.1. of the Corporate
Guarantee (in the case of the Corporate Guarantor).
13.2.11 REVOCATION OR MODIFICATION OF CONSENTS ETC. if any consent,
licence, approval, authorisation, filing, registration or other
requirement of any governmental, judicial or other public body or
authority which is now, or which at any time during the Facility
Period becomes, necessary to enable any of the Security Parties
to comply with any of their obligations in or pursuant to any of
the Security Documents is not obtained or is revoked, suspended,
withdrawn or withheld, or is modified in a manner which the Agent
considers is, or may be, prejudicial to its interests, or ceases
to remain in full force and effect; or
13.2.12 MASTER AGREEMENT TERMINATION if a notice is sent by the Agent
under section 6(a) of the Master Agreement, or by any person
under section 6(b)(iv) of the Master Agreement, in either case
designating an Early Termination Date for the purpose of the
Master Agreement, or if the Master Agreement is for any other
reason terminated, cancelled, suspended, rescinded, revoked or
otherwise ceases to remain in full force and effect; or
13.2.13 CURTAILMENT OF BUSINESS if the business of any of the Security
Parties is wholly or partially curtailed or suspended by any
intervention by or under authority of any government, or if all
or a substantial part of the undertaking, property or assets of
any of the Security Parties is seized, nationalised, expropriated
or compulsorily acquired by or under authority of any government;
or
13.2.14 ACCELERATION OF OTHER INDEBTEDNESS if any other indebtedness
or obligation for borrowed money for an amount exceeding one
million Dollars ($1,000,000) in aggregate of any of the Security
Parties becomes due or capable of being declared due prior to its
stated maturity by
53
reason of default on the part of that Security Party, or is not
repaid or satisfied at maturity; or
13.2.15 REDUCTION OF CAPITAL if any of the Security Parties reduces
its authorised or issued or subscribed capital; or
13.2.16 CHALLENGE TO REGISTRATION if the registration of the Vessels
or the Mortgages, or any of them is contested or becomes void or
voidable or liable to cancellation or termination, or if the
validity or priority of the Mortgages, or either of them, is
contested; or
13.2.17 WAR if the country of registration of the Vessels, or either
of them, becomes involved in war (whether or not declared) or
civil war or is occupied by any other power and the Agent in its
discretion considers that, as a result, the security conferred by
the Security Documents is materially prejudiced; or
13.2.18 NOTICE OF TERMINATION if a Guarantor gives notice to the Agent
to determine its or his obligations under its Guarantee; or
13.2.19 MATERIAL ADVERSE CHANGE ETC if anything is done or permitted
or omitted to be done by any of the Security Parties which in the
reasonable opinion of the Agent jeopardises or imperils (or may
jeopardise or imperil) the rights conferred on the Agent by the
Security Documents, or if there occurs (in the opinion of the
Agent) any material adverse change in the business, affairs or
financial condition of any of the Security Parties from that
pertaining at the date of this Agreement; or
13.2.20 ENVIRONMENT if the Borrowers fail to observe or perform any of
the covenants, conditions, undertakings, agreements or
obligations contained in Clause 11.2.12 or shall in any other way
be in breach of or do or cause to be done any act repudiating or
evidencing an intention to repudiate any of the covenants,
conditions, undertakings, agreements or obligations contained in
Clause 11.2.12; or
13.2.21 CROSS-DEFAULT an event of default (howsoever defined) occurs
in relation to any other loan agreement facility entered into by
the Borrowers and/or
54
the Corporate Guarantor or any subsidiary of the Corporate
Guarantor; or
13.2.22 CHARTER The Charter is terminated, cancelled or repudiated or
is not in force at any time during the Facility Period, unless it
has expired by effluxion of time, or the Borrower or the
Charterer defaults in the performance of any of their respective
material obligations under or pursuant to the Charter; or
13.2.23 ANALOGOUS EVENTS if any event which (in the opinion of the
Agent or) is analogous to any of the events set out above shall
occur.
14 SET-OFF AND LIEN
14.1 SET-OFF The Borrowers irrevocably authorise the Agent and the Banks at
any time after all or any part of the Indebtedness shall have become
due and payable to set off without notice any liability of the
Borrowers to any of the Banks or the Agent (whether present or future,
actual or contingent, and irrespective of the branch or office,
currency or place of payment) against any credit balance from time to
time standing on any account of the Borrowers (whether current or
otherwise and whether or not subject to notice) with any branch of the
Agent or of any Bank in or towards satisfaction of the Indebtedness
and, in the name of the Agent or that Bank or the Borrowers, to do all
acts (including, without limitation, converting or exchanging any
currency) and execute all documents which may be required to effect
such application.
14.2 LIEN The Agent and each Bank shall have a lien on and be entitled to
retain and realise as additional security for the repayment of the
Indebtedness any cheques, drafts, bills, notes or negotiable or
non-negotiable instruments and any stocks, shares or marketable or
other securities and property of any kind of the Borrowers (or of the
Agent or that Bank as agent or nominee of the Borrowers) from time to
time held by the Agent, whether for safe custody or otherwise.
14.3 RESTRICTIONS ON WITHDRAWAL Despite any term to the contrary in
relation to any deposit or credit balance at any time on any account
of the Borrowers with any of Banks or with the Agent, no such deposit
or balance shall be repayable or capable of being assigned, mortgaged,
charged or otherwise disposed of or dealt with by the
55
Borrowers during the Facility Period except in accordance with the
Security Documents, but the Agent may from time to time permit the
withdrawal of all or any part of any such deposit or balance without
affecting the continued application of this Clause.
14.4 APPLICATION The Borrowers irrevocably authorise the Agent to apply all
sums which the Agent may receive:-
14.4.1 pursuant to a sale or other disposition of the Vessels or any
right, title or interest in the Vessels; or
14.4.2 by way of payment to the Agent of any sum in respect of the
Insurances, Earnings, Charter Rights or Requisition Compensation;
or
14.4.3 otherwise arising under or in connection with any of the
Security Documents
in or towards satisfaction, or by way of retention on account, of the
Indebtedness, in such manner as the Agent may in its discretion
determine.
14.5 MASTER AGREEMENT RIGHTS The rights conferred on the Agent by this
Clause shall be in addition to, and without prejudice to or limitation
of, the rights of netting and set off conferred on the Agent by the
Master Agreement. The Borrowers acknowledges that the Agent shall be
under no obligation to make any payment to the Borrowers under or
pursuant to the Master Agreement if, at the time that payment becomes
due, there shall have occurred an Event of Default or Potential Event
of Default, or an Event of Default or Termination Event (as those
terms are respectively defined in the Master Agreement).
15 ASSIGNMENT AND SUB-PARTICIPATION
15.1 RIGHT TO ASSIGN The Original Bank may grant sub-participations in all
or any part of the Loan and may assign or transfer all or any of its
rights under or pursuant to the Security Documents to any other branch
of that Bank or (in consultation with the Borrowers') to one or more
other banks or financial institutions.
15.2 BORROWERS' CO-OPERATION The Borrowers will co-operate fully with the
Banks in connection with any assignment, transfer or
sub-participation; will execute and procure the execution of such
documents as the Banks may require in connection
56
therewith; and irrevocably authorises the Agent to sign any Transfer
Certificate on its behalf, and irrevocably authorises the Agent and
the Banks disclose to any proposed assignee, transferee or
sub-participant (whether before or after any assignment, transfer or
sub-participation and whether or not any assignment, transfer or
sub-participation shall take place) all information relating to the
Security Parties, the Loan or the Security Documents which the Agent
or the Banks may in their discretion consider necessary or desirable.
15.3 RIGHTS OF ASSIGNEE Any assignee, transferee or sub-participant of a
Bank shall (unless limited by the express terms of the assignment,
transfer or sub-participation) take the full benefit of every
provision of the Security Documents benefiting that Bank.
15.4 TRANSFER CERTIFICATES If any Bank wishes to transfer any of its rights
and/or obligations under or pursuant to this Agreement, it may do so
by delivering to the Agent a duly completed Transfer Certificate, in
which event on the Transfer Date:-
15.4.1 to the extent that that Bank seeks to transfer its rights
and/or obligations, the Borrowers (on the one hand) and the Bank
in question (on the other) shall be released from all further
obligations towards the other(s);
15.4.2 the Borrowers (on the one hand) and the Transferee (on the
other) shall assume obligations towards the other(s) identical to
those released pursuant to Clause 15.4.1;
15.4.3 the Agent, each of the Banks and the Transferee shall have the
same rights and obligations between themselves as they would have
had if the Transferee had been an original party to this
Agreement as a Bank; and
15.4.4 the Transferee shall pay to the Agent for its own account a
transfer fee of five thousand Dollars.
Each Bank irrevocably authorises the Agent to sign on its behalf any
Transfer Certificate relating to the transfer of any of the rights
and/or obligations of any other Bank.
15.5 SECURITY DOCUMENTS Unless otherwise expressly provided in any
Security Document or otherwise expressly agreed between a Bank
and any proposed Transferee and
57
notified by that Bank to the Agent on or before the relevant Transfer
Date, there shall automatically be assigned to the Transferee with any
transfer of a Bank's rights and/or obligations under or pursuant to
this Agreement the rights of that Bank under or pursuant to the
Security Documents (other than this Agreement) which relate to the
portion of the Bank's rights and/or obligations transferred by the
relevant Transfer Certificate.
16 PAYMENTS, MANDATORY PREPAYMENT, RESERVE REQUIREMENTS AND ILLEGALITY
16.1 PAYMENTS All amounts payable by the Borrowers under or pursuant to any
of the Security Documents shall be paid to such accounts at such banks
as the Agent may from time to time direct to the Borrowers, and
(unless payable in any other Currency of Account) shall be paid in
Dollars in same day funds (or such funds as are required by the
authorities in the United States of America for settlement of
international payments for immediate value). Payments shall be deemed
to have been received by the Agent on the date on which the Agent
receives authenticated advice of receipt, unless that advice is
received by the Agent on a day other than a Business Day or at a time
of day (whether on a Business Day or not) when the Agent in its
discretion considers that it is impossible or impracticable for the
Agent to utilise the amount received for value that same day, in which
event the payment in question shall be deemed to have been received by
the Agent on the Business Day next following the date of receipt of
advice by the Agent.
16.2 NO DEDUCTIONS OR WITHHOLDINGS All payments (whether of principal or
interest or otherwise) to be made by the Borrowers pursuant to the
Security Documents shall, subject only to Clause 16.3, be made free
and clear of and without deduction for or on account of any Taxes or
other deductions, withholdings, restrictions, conditions or
counterclaims of any nature.
16.3 GROSSING-UP If at any time any law requires (or is interpreted to
require) the Borrowers to make any deduction or withholding from any
payment, or to change the rate or manner in which any required
deduction or withholding is made, the Borrowers will promptly notify
the Agent and, simultaneously with making that payment, will pay to
the Agent whatever additional amount (after taking into account any
additional Taxes on, or deductions or withholdings from, or
restrictions or conditions on, that additional amount) is necessary to
ensure that, after making
58
the deduction or withholding, the Agent and the Banks receive a net
sum equal to the sum which it would have received had no deduction or
withholding been made.
16.4 EVIDENCE OF DEDUCTIONS If at any time the Borrowers is required by law
to make any deduction or withholding from any payment to be made by it
pursuant to any of the Security Documents, the Borrowers will pay the
amount required to be deducted or withheld to the relevant authority
within the time allowed under the applicable law and will, no later
than thirty days after making that payment, deliver to the Agent an
original receipt issued by the relevant authority, or other evidence
acceptable to the Agent, evidencing the payment to that authority of
all amounts required to be deducted or withheld.
16.5 ADJUSTMENT OF DUE DATES If any payment or transfer of funds to be made
under any of the Security Documents, other than a payment of interest
on the Loan or a payment pursuant to the Master Agreement, shall be
due on a day which is not a Business Day, that payment shall be made
on the next succeeding Business Day (unless the next succeeding
Business Day falls in the next calendar month in which event the
payment shall be made on the next preceding Business Day). Any such
variation of time shall be taken into account in computing any
interest in respect of that payment.
16.6 CHANGE IN LAW If, by reason of the introduction of any law, or any
change in any law, or the interpretation or administration of any law,
or in compliance with any request or requirement from any central bank
or any fiscal, monetary or other authority:-
16.6.1 any Bank or the Agent (or the holding company of the Bank or
the Agent) shall be subject to any Tax with respect to payments
of all or any part of the Indebtedness; or
16.6.2 the basis of Taxation of payments to any Bank or the Agent in
respect of all or any part of the Indebtedness shall be changed;
or
16.6.3 any reserve requirements shall be imposed, modified or deemed
applicable against assets held by or deposits in or for the
account of or loans by any branch of any Bank or the Agent; or
59
16.6.4 the manner in which any Bank or the Agent allocates capital
resources to its obligations under this Agreement and/or the
Master Agreement or any ratio (whether cash, capital adequacy,
liquidity or otherwise) which any Bank or the Agent is required
or requested to maintain shall be affected; or
16.6.5 there is imposed on any Bank or the Agent (or on the holding
company of any Bank or the Agent) any other condition in relation
to the Indebtedness or the Security Documents;
and the result of any of the above shall be to increase the cost to
any Bank (or to the holding company of any Bank) of that Bank making
or maintaining the Loan or of maintaining its obligations under the
Master Agreement, or to cause the any Bank or the Agent to suffer (in
its opinion) a material reduction in the rate of return on its overall
capital below the level which it reasonably anticipated at the date of
this Agreement and which it would have been able to achieve but for
its entering into this Agreement or the Master Agreement and/or
performing its obligations under this Agreement or the Master
Agreement, the Bank affected shall notify the Agent and the Borrowers
shall from time to time pay to the Agent on demand for the account of
the Bank affected (or, in retention to the Master Agreement, for the
Agent's own account) the amount which shall compensate that Bank (or
the holding company of the Bank) for such additional cost or reduced
return. A certificate signed by an authorised signatory of the Bank
affected setting out the amount of that payment and the basis of its
calculation shall be submitted to the Borrowers and shall be
conclusive evidence of such amount save for manifest error or on any
question of law. The Borrowers shall have the right to prepay the Loan
in full, subject to Clauses 5.4, 5.5 and 5.6.
16.7 ILLEGALITY AND IMPRACTICALITY Notwithstanding anything contained in
the Security Documents, the obligation of the Banks to advance or
maintain the Loan shall terminate in the event that a change in any
law or in the interpretation of any law by any authority charged with
its administration shall make it unlawful or, in the opinion of any
Bank, impracticable for that Bank to advance or maintain the Loan. In
that event the Bank affected shall, by written notice to the
Borrowers, declare its obligations to be immediately terminated. If
all or any part of the Loan shall have been advanced by the Banks to
the Borrowers, the Indebtedness (including all
60
accrued interest) shall be prepaid within thirty days from the date of
such notice. Clause 5.4 shall apply to that prepayment if it is made
on a day other than the last day of an Interest Period.
16.8 CHANGES IN MARKET CIRCUMSTANCES If at any time a Bank determines
(which determination shall be final and conclusive and binding on the
Borrowers) that, by reason of changes affecting the London Interbank
market, adequate and fair means do not exist for ascertaining the rate
of interest on the Loan pursuant to this Agreement:-
16.8.1 that Bank shall give notice to the Borrowers of the occurrence
of such event; and
16.8.2 the Agent shall as soon as reasonably practicable certify to
the Borrowers in writing the effective cost to the Banks of
maintaining the Loan for such further period as shall be selected
by the Banks and the rate of interest payable by the Borrowers
for that period; or, if that is not acceptable to the Borrowers,
16.8.3 the Agent will negotiate with the Borrowers in good faith with
a view to modifying this Agreement to provide a substitute basis
for the Loan which is financially a substantial equivalent to the
basis provided for in this Agreement.
If, within thirty days of the giving of the notice referred to in
Clause 16.8.1, the Borrowers and the Agent fail to agree in writing on
a substitute basis for the Loan, the Borrowers will immediately prepay
the Indebtedness. Clause 5.4 shall apply to that prepayment if it is
made on a day other than the last day of an Interest Period.
16.9 NON-AVAILABILITY OF CURRENCY If a Bank is for any reason unable to
obtain Dollars in the London Interbank market and is, as a result, or
as a result of any other contingency affecting the London Interbank
market, unable to advance or maintain the Loan in Dollars, that Bank
shall give notice to the Agent and the Agent shall give notice to the
Agent and the Banks' obligations to make the Loan available shall
immediately cease. In that event, if all or any part of the Loan shall
have been advanced by the Banks to the Borrowers, the Agent on behalf
of the Banks will negotiate with the Borrowers in good faith with a
view to establishing a mutually
61
acceptable basis for funding the Loan from an alternative source. If
the Agent and the Borrowers have failed to agree in writing on a basis
for funding the Loan from an alternative source by 11.00 a.m. on the
second Business Day prior to the end of the then current Interest
Period, the Borrowers will (without prejudice to its other obligations
under or pursuant to this Agreement, including, without limitation,
its obligation to pay interest on the Loan, arising on the expiry of
the then current Interest Period) prepay the Indebtedness to the Agent
on behalf of the Banks on the expiry of the then current Interest
Period.
17 COMMUNICATIONS
17.1 METHOD Any Communication may be given, delivered, made or served (as
the case may be) under or in relation to this Agreement by letter or
fax and shall be in the English language and sent addressed: -
17.1.1 in the case of the Banks or the Agent to the Agent at its
address at the head of this Agreement (fax no: x00 00 000 0000)
marked for the attention of: Global Shipping Group; and
17.1.2 in the case of the Borrowers to the Communications Address;
or to such other address or fax number as the Banks, the Agent or the
Borrowers may designate for itself by written notice to the other.
17.2 TIMING A Communication shall be deemed to have been duly given,
delivered, made or served to or on, and received by, the Borrowers:-
17.2.1 in the case of a fax when the sender receives one or more
transmission reports showing the whole of the Communication to
have been transmitted to the correct fax number;
17.2.2 if delivered to an officer of the Borrowers or left at the
Communications Address at the time of delivery or leaving; or
17.2.3 if posted, at 9.00 a.m. on the Business Day after posting by
prepaid first class post.
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A Communication shall only be deemed to have been duly given,
delivered, made or served to or on, and received by, the Banks or the
Agent on actual receipt of the whole of that Communication by the
Agent.
17.3 INDEMNITY The Borrowers shall indemnify the Agent against any cost,
claim, liability, loss or expense (including legal fees and any Value
Added Tax or any similar or replacement tax (if applicable)) which the
Agent or any of the Banks may sustain or incur as a consequence of any
Communication sent by or on behalf of the Borrowers by fax not being
received by its intended recipient, or being received incomplete, or
by reason of any Communication purportedly having been sent by or on
behalf of the Borrowers having been sent fraudulently.
18 GENERAL INDEMNITIES
18.1 CURRENCY In the event of the Agent or a Bank receiving or recovering
any amount payable under any of the Security Documents in a currency
other than the Currency of Account, and if the amount received or
recovered is insufficient when converted into the Currency of Account
at the date of receipt to satisfy in full the amount due, the
Borrowers shall, on the Agent's written demand, pay to the Bank such
further amount in the Currency of Account as is sufficient to satisfy
in full the amount due and that further amount shall be due to the
Agent as a separate debt under this Agreement.
18.2 COSTS AND EXPENSES The Borrowers will, within fourteen days of the
Agent's written demand, reimburse the Agent for all costs and expenses
(including Value Added Tax or any similar or replacement tax if
applicable) of and incidental to:-
18.2.1 the negotiation, preparation, execution and registration of the
Security Documents (whether or not any of the Security Documents
are actually executed or registered and whether or not all or any
part of the Loan is advanced);
18.2.2 any amendments, addenda or supplements to any of the Security
Documents (whether or not completed);
18.2.3 any other documents which may at any time be required by the
Bank or the Agent to give effect to any of the Security
Documents or which any Bank or the Agent is entitled to call for
or obtain pursuant to any of the
63
Security Documents (including, without limitation, all premiums
and other sums from time to time payable by the Agent in relation
to the Mortgagees' Insurances); and
18.2.4 the exercise of the rights, powers, discretions and remedies
of the Banks and/or the Agent under or pursuant to the Security
Documents.
18.3 EVENTS OF DEFAULT The Borrowers shall indemnify the Banks and the
Agent from time to time on demand against all losses and costs
incurred or sustained by any Bank and/or the Agent as a consequence
of any Event of Default, including (without limitation) any Break
Costs.
18.4 FUNDING COSTS The Borrowers shall indemnify the Banks and the Agent
from time to time on demand against all losses and costs incurred or
sustained by any Bank or by the Agent if, for any reason, the Loan is
not advanced to the Borrowers after the Drawdown Notice has been given
to the Agent, or is advanced on a date other than that requested in
the Drawdown Notice (unless, in either case, as a result of any
default by the Agent or any of the Banks), including (without
limitation) any Break Costs.
18.5 PROTECTION AND ENFORCEMENT The Borrowers shall indemnify the Banks and
the Agent from time to time on demand against all losses, costs and
liabilities which any Bank or the Agent may from time to time sustain,
incur or become liable for in or about the protection, maintenance or
enforcement of the rights conferred on the Banks and/or the Agent by
the Security Documents or in or about the exercise or purported
exercise by the Banks and/or the Agent of any of the rights, powers,
discretions or remedies vested in them under or arising out of the
Security Documents, including (without limitation) any losses, costs
and liabilities which any Bank or the Agent may from time to time
sustain, incur or become liable for by reason of the Banks or the
Agent being mortgagees of the Vessels and/or a lender to the
Borrowers, or by reason of any Bank or the Agent being deemed by any
court or authority to be an operator or controller, or in any way
concerned in the operation or control, of the Vessels.
18.6 LIABILITIES OF BANKS AND AGENT The Borrowers will from time to time
reimburse the Banks and the Agent on demand for all sums which any
Bank or the Agent may pay or become actually or contingently liable
for on account of the Borrowers or in
64
connection with the Vessels (whether alone or jointly or jointly and
severally with any other person) including (without limitation) all
sums which any Bank or the Agent may pay or guarantees which any Bank
or the Agent may give in respect of the Insurances, any expenses
incurred by any Bank or the Agent in connection with the maintenance
or repair of the Vessels or in discharging any lien, bond or other
claim relating in any way to the Vessels, and any sums which any Bank
or the Agent may pay or guarantees which it may give to procure the
release of the Vessels from arrest or detention.
18.7 TAXES The Borrowers shall pay all Taxes to which all or any part of
the Indebtedness or any of the Security Documents may be at any time
subject and shall indemnify the Agent and the Banks on demand against
all liabilities, costs, claims and expenses resulting from any
omission to pay or delay in paying any such Taxes.
19 MISCELLANEOUS
19.1 WAIVERS No failure or delay on the part of the Agent or of a Bank in
exercising any right, power, discretion or remedy under or pursuant to
any of the Security Documents, nor any actual or alleged course of
dealing between the Agent and any Bank and the Borrowers, shall
operate as a waiver of, or acquiescence in, any default on the part of
any Security Party, unless expressly agreed to do so in writing by the
Agent, nor shall any single or partial exercise by the Agent or a Bank
of any right, power, discretion or remedy preclude any other or
further exercise of that right, power, discretion or remedy, or the
exercise by the Agent or a Bank of any other right, power, discretion
or remedy.
19.2 NO ORAL VARIATIONS No variation or amendment of any of the Security
Documents shall be valid unless in writing and signed on behalf of the
Banks and the Agent.
19.3 SEVERABILITY If at any time any provision of any of the Security
Documents is invalid, illegal or unenforceable in any respect that
provision shall be severed from the remainder and the validity,
legality and enforceability of the remaining provisions shall not be
affected or impaired in any way.
19.4 SUCCESSORS ETC. The Security Documents shall be binding on the
Security Parties and on their successors and permitted transferees and
assignees, and shall inure to
65
the benefit of the Banks and the Agent and its successors, transferees
and assignees. The Borrowers may not assign nor transfer any of its
rights under or pursuant to any of the Security Documents without the
prior written consent of the Agent.
19.5 FURTHER ASSURANCE If any provision of the Security Documents shall be
invalid or unenforceable in whole or in part by reason of any present
or future law or any decision of any court, or if the documents at any
time held by the Banks or by the Agent on their behalf are considered
by the Banks for any reason insufficient to carry out the terms of
this Agreement, then from time to time the Borrowers will promptly, on
demand by the Agent, execute or procure the execution of such further
documents as in the opinion of the Banks are necessary to provide
adequate security for the repayment of the Indebtedness.
19.6 OTHER ARRANGEMENTS The Banks and the Agent may, without prejudice to
its rights under or pursuant to the Security Documents, at any time
and from time to time, on such terms and conditions as it may in its
discretion determine, and without notice to the Borrowers, grant time
or other indulgence to, or compound with, any other person liable
(actually or contingently) to the Banks and/or the Agent in respect of
all or any part of the Indebtedness, and may release or renew
negotiable instruments and take and release securities and hold funds
on realisation or suspense account without affecting the liabilities
of the Borrowers or the rights of the Banks and the Agent under or
pursuant to the Security Documents.
19.7 ADVISERS The Borrowers irrevocably authorise the Agent, at any time
and from time to time during the Facility Period, to consult insurance
advisers on any matters relating to the Insurances, including, without
limitation, the collection of insurance claims, and from time to time
to consult or retain advisers or consultants to monitor or advise on
any other claims relating to the Vessels. The Borrowers will provide
such advisers and consultants with all information and documents which
they may from time to time require and will reimburse the Agent on
demand for all costs and expenses incurred by the Agent in connection
with the consultation or retention of such advisers or consultants.
19.8 DELEGATION The Banks and the Agent may at any time and from time to
time delegate to any person any of its rights, powers, discretions and
remedies pursuant to the Security Documents on such terms as it may
consider appropriate (including the power to sub-delegate).
66
19.9 RIGHTS ETC. CUMULATIVE Every right, power, discretion and remedy
conferred on the Banks and/or the Agent under or pursuant to the
Security Documents shall be cumulative and in addition to every other
right, power, discretion or remedy to which it may at any time be
entitled by law or in equity. The Banks and the Agent may exercise
each of their rights, powers, discretions and remedies as often and in
such order as they deems appropriate. The exercise or the beginning of
the exercise of any right, power, discretion or remedy shall not be
interpreted as a waiver of the right to exercise that or any other
right, power, discretion or remedy either simultaneously or
subsequently.
19.10 NO ENQUIRY The Banks and the Agent shall not be concerned to enquire
into the powers of the Security Parties or of any person purporting to
act on behalf of any of the Security Parties, even if any of the
Security Parties or any such person shall have acted in excess of
their powers or if their actions shall have been irregular, defective
or informal, whether or not any Bank or the Agent had notice thereof.
19.11 CONTINUING SECURITY The security constituted by the Security
Documents shall be continuing and shall not be satisfied by any
intermediate payment or satisfaction until the Indebtedness shall have
been repaid in full and neither the Banks nor the Agent shall be under
no further actual or contingent liability to any third party in
relation to the Vessels, the Insurances, Earnings or Requisition
Compensation or any other matter referred to in the Security
Documents.
19.12 SECURITY CUMULATIVE The security constituted by the Security
Documents shall be in addition to any other security now or in the
future held by the Banks or by the Agent for or in respect of all or
any part of the Indebtedness, and shall not merge with or prejudice or
be prejudiced by any such security or any other contractual or legal
rights of the Banks or the Agent, nor affected by any irregularity,
defect or informality, or by any release, exchange or variation of any
such security. Section 93 of the Law of Property Act 1925 and all
provisions which the Agent considers analogous thereto under the law
of any other relevant jurisdiction shall not apply to the security
constituted by the Security Documents.
19.13 RE-INSTATEMENT If the Banks or the Agent takes any steps to exercise
any of its rights, powers, remedies or discretions pursuant to the
Security Documents and the result shall be adverse to the Banks and/or
the Agent, the Borrowers and the Banks
67
and the Agent shall be restored to their former positions as if no
such steps had been taken.
19.14 NO LIABILITY Neither the Banks nor the Agent, nor any agent or
employee of any Bank or of the Agent, nor any receiver and/or manager
appointed by the Agent, shall be liable for any losses which may be
incurred in or about the exercise of any of the rights, powers,
discretions or remedies of the Banks and/or the Agent under or
pursuant to the Security Documents nor liable as mortgagee in
possession for any loss on realisation or for any neglect or default
of any nature for which a mortgagee in possession might otherwise be
liable.
19.15 RESCISSION OF PAYMENTS ETC. Any discharge, release or reassignment by
the Banks and/or the Agent of any of the security constituted by, or
any of the obligations of any Security Party contained in, any of the
Security Documents shall be (and be deemed always to have been) void
if any act (including, without limitation, any payment) as a result of
which such discharge, release or reassignment was given or made is
subsequently wholly or partially rescinded or avoided by operation of
any law.
19.16 SUBSEQUENT ENCUMBRANCES If the Agent receives notice of any
subsequent Encumbrance affecting the Vessels or all or any part of the
Insurances, Earnings, Charter Rights of Requisition Compensation or
the Accounts, the Agent may open a new account in its books for the
Borrowers. If the Agent does not open a new account, then (unless the
Agent gives written notice to the contrary to the Borrowers) as from
the time of receipt by the Agent of notice of such subsequent
Encumbrance, all payments made to the Agent shall be treated as having
been credited to a new account of the Borrowers and not as having been
applied in reduction of the Indebtedness.
19.17 RELEASES If any Bank or the Agent shall at any time in its discretion
release any party from all or any part of any of the Security
Documents, the liability of any other party to the Security Documents
shall not be varied or diminished.
19.18 DISCRETIONS Unless otherwise expressly indicated, where any Bank or
the Agent is stated in the Security Documents to have a discretion
and/or where the opinion of any Bank or the Agent is referred to
and/or where the consent, agreement or approval of any Bank or the
Agent is required for any course of action, or where
68
anything is required to be acceptable to any Bank or the Agent, the
Banks and the Agent shall have a sole, absolute and unfettered
discretion and/or may give or withhold their consent, agreement or
approval at its sole, absolute and unfettered discretion.
19.19 CERTIFICATES Any certificate or statement signed by an authorised
signatory of the Agent purporting to show the amount of the
Indebtedness (or any part of the Indebtedness) or any other amount
referred to in any of the Security Documents shall, save for manifest
error or on any question of law, be conclusive evidence as against the
Borrowers of that amount.
19.20 SURVIVAL OF REPRESENTATIONS AND WARRANTIES The representations and
warranties on the part of the Borrowers contained in this Agreement
shall survive the execution of this Agreement and the advance of the
Loan.
19.21 COUNTERPARTS This Agreement may be executed in any number of
counterparts each of which shall be original but which shall together
constitute the same instrument.
19.22 CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999 No term of the Agreement
is enforceable by a person who is not a party to it.
20 LAW AND JURISDICTION
20.1 GOVERNING LAW This Agreement shall in all respects be governed by and
interpreted in accordance with English law.
20.2 JURISDICTION For the exclusive benefit of the Banks and the Agent, the
parties to this Agreement irrevocably agree that the courts of England
are to have jurisdiction to settle any disputes which may arise out of
or in connection with this Agreement and that any Proceedings may be
brought in those courts.
20.3 ALTERNATIVE JURISDICTIONS Nothing contained in this Clause shall limit
the right of the Banks or the Agent to commence any Proceedings
against the Borrowers in any other court of competent jurisdiction nor
shall the commencement of any Proceedings against the Borrowers in one
or more jurisdictions preclude the commencement of any Proceedings in
any other jurisdiction, whether concurrently or not.
69
20.4 WAIVER OF OBJECTIONS The Borrowers irrevocably waive any objection
which it may now or in the future have to the laying of the venue of
any Proceedings in any court referred to in this Clause, and any claim
that those Proceedings have been brought in an inconvenient or
inappropriate forum, and irrevocably agrees that a judgment in any
Proceedings commenced in any such court shall be conclusive and
binding on it and may be enforced in the courts of any other
jurisdiction.
20.5 SERVICE OF PROCESS Without prejudice to the right of the Agent and the
Banks to use any other method of service permitted by law, the
Borrowers irrevocably agree that any writ, notice, judgment or other
legal process shall be sufficiently served on it if addressed to it
and left at or sent by post to the Address for Service, and in that
event shall be conclusively deemed to have been served at the time of
leaving or, if posted, at 9.00 a.m. on the Business Day after posting
by prepaid first class post.
70
IN WITNESS of which the parties to this Agreement have executed this Agreement
the day and year first before written.
SIGNED by XXXXXXXXX XXXXXXX ) /s/ XXXXXXXXX XXXXXXX
duly authorised for and on behalf ) ---------------------------------------
of ALLENDALE INVESTMENTS S.A. )
in the presence of:- )
/s/ XXXXXXXXXX X. XXXXXXXXXX
---------------------------------
XXXXXXXXXX X. XXXXXXXXXX
ATTORNEY AT LAW
XXXXXXXXXX XXXXXXX
10 ANT. Illegible & SACHTOURI
PIRAEUS 18536 - TEL. 000 0000 000
A.M. / (Greek characters) 2867
SIGNED by XXXXXXXXX XXXXXXX ) /s/ XXXXXXXXX XXXXXXX
duly authorised for and on behalf ) ---------------------------------------
of ALTERWALL BUSINESS INC. )
in the presence of:- )
/s/ XXXXXXXXXX X. XXXXXXXXXX
---------------------------------
XXXXXXXXXX X. XXXXXXXXXX
ATTORNEY AT LAW
XXXXXXXXXX XXXXXXX
10 ANT. Illegible & SACHTOURI
PIRAEUS 18536 - TEL. 000 0000 000
A.M. / (Greek characters) 2867
SIGNED by XXXXX XXXXXXX XXXXX-XXXXXX ) /s/ XXXXX XXXXXXX XXXXX-XXXXXX
duly authorised for and on behalf ) ---------------------------------------
of FORTIS BANK (NEDERLAND) N.V. )
(AS LENDER) in the presence of:- )
/s/ XXXXXXXXXX X. XXXXXXXXXX
---------------------------------
XXXXXXXXXX X. XXXXXXXXXX
ATTORNEY AT LAW
XXXXXXXXXX XXXXXXX
10 ANT. Illegible & SACHTOURI
PIRAEUS 18536 - TEL. 000 0000 000
A.M. / (Greek characters) 2867
SIGNED by XXXXX XXXXXXX XXXXX-XXXXXX ) /s/ XXXXX XXXXXXX XXXXX-XXXXXX
duly authorised for and on behalf ) ---------------------------------------
of FORTIS BANK (NEDERLAND) N.V. )
(AS AGENT) in the presence of:- )
/s/ XXXXXXXXXX X. XXXXXXXXXX
---------------------------------
XXXXXXXXXX X. XXXXXXXXXX
ATTORNEY AT LAW
XXXXXXXXXX XXXXXXX
10 ANT. Illegible & SACHTOURI
PIRAEUS 18536 - TEL. 000 0000 000
A.M. / (Greek characters) 2867
71
SCHEDULE 1
THE BANKS AND THE COMMITMENTS
THE BANKS THE COMMITMENTS
--------- ---------------
FORTIS BANK (NEDERLAND) N.V. 100%
Coolsingel 93
P.O. Box 749
3000 AS Rotterdam
The Netherlands
72
APPENDIX A
To: FORTIS BANK (NEDERLAND) N.V.
From: ALLENDALE INVESTMENTS S.A.
ALTERWALL BUSINESS INC.
2005
Dear Sirs,
DRAWDOWN NOTICE
We refer to the Loan Agreement dated _____ 2005 made between ourselves and
yourselves ("THE AGREEMENT").
Words and phrases defined in the Agreement have the same meaning when used
in this Drawdown Notice.
Pursuant to Clause 2.2 of the Agreement, we irrevocably request that you
advance the sum of [_____] to us on _____ 2005, which is a Business Day, by
paying the amount of the Loan to [___].
We warrant that the representations and warranties contained in Clause 4 of
the Agreement are true and correct at the date of this Drawdown Notice and will
be true and correct on 2005; that no Event of Default nor Potential Event of
Default has occurred and is continuing, and that no Event of Default or
Potential Event of Default will result from the advance of the Loan requested in
this Drawdown Notice.
We select the period of [_____] months as the first Interest Period.
Yours faithfully
----------------------------------------
For and on behalf of
ALLENDALE INVESTMENTS S.A.
ALTERWALL BUSINESS INC.
73
APPENDIX B
FORM OF TRANSFER CERTIFICATE
To: FORTIS BANK (NEDERLAND) N.V.
TRANSFER CERTIFICATE
This transfer certificate relates to a secured loan facility agreement (as from
time to time amended, varied, supplemented or novated "THE LOAN AGREEMENT")
dated ___________ 2005, on the terms and subject to the conditions of which a
secured loan facility of up to $20,000,000 was made available to
[_________________________] by a syndicate of banks on whose behalf you act as
agent and security trustee.
1 Terms defined in the Loan Agreement shall, unless otherwise expressly
indicated, have the same meaning when used in this certificate. The terms
"TRANSFEROR" and "TRANSFEREE" are defined in the schedule to this
certificate.
2 The Transferor:-
2.1 confirms that the details in the Schedule under the heading
"TRANSFEROR'S COMMITMENT" accurately summarise its Commitment; and
2.2 requests the Transferee to accept by way of novation the transfer to
the Transferee of the amount of the Transferor's Commitment specified
in the Schedule by counter-signing and delivering this certificate to
the Agent at its address for Communications specified in the Loan
Agreement.
3 The Transferee requests the Agent to accept this certificate as being
delivered to the Agent pursuant to and for the purposes of clause 15.4 of
the Loan Agreement so as to take effect in accordance with the terms of
that clause on the Transfer Date specified in the Schedule.
4 The Agent (on its own behalf and on behalf of each of the Borrowers and
each of the Banks other than the Transferor) confirms its acceptance of
this certificate for the purposes of clause 15.4 of the Loan Agreement.
5 The Transferee confirms that:-
5.1 it has received a copy of the Loan Agreement together with all other
information which it has required in connection with this transaction;
5.2 it has not relied and will not in the future rely on the Transferor or
any other party to the Loan Agreement to check or enquire on its
behalf into the legality, validity, effectiveness, adequacy, accuracy
or completeness of any such information; and
5.3 it has not relied and will not in the future rely on the Transferor or
any other party to the Loan Agreement to keep under review on its
behalf the financial condition, creditworthiness, condition, affairs,
status or nature of any of the Security Parties.
6 Execution of this certificate by the Transferee constitutes its
representation to the Transferor and to all other parties to the Loan
Agreement that it has the power to become a
74
party to the Loan Agreement as a Bank on the terms of the Loan Agreement
and has taken all steps to authorise execution and delivery of this
certificate.
7 The Transferee undertakes with the Transferor and each of the other parties
to the Loan Agreement that it will perform in accordance with their terms
all those obligations which by the terms of the Loan Agreement will be
assumed by it after delivery of this certificate to the Agent and the
satisfaction of any conditions subject to which this certificate is
expressed to take effect.
8 The Transferor makes no representation or warranty and assumes no
responsibility with respect to the legality, validity, effectiveness,
adequacy or enforceability of any of the Security Documents or any document
relating to any of the Security Documents, and assumes no responsibility
for the financial condition of any of the Security Parties or for the
performance and observance by the Security Parties of any of their
obligations under any of the Security Documents or any document relating to
any of the Security Documents and any conditions and warranties implied by
law are expressly excluded.
9 The Transferee acknowledges that nothing in this certificate or in the Loan
Agreement shall oblige the Transferor to:-
9.1 accept a re-transfer from the Transferee of the whole or any part of
the rights, benefits and/or obligations transferred pursuant to this
certificate; or
9.2 support any losses directly or indirectly sustained or incurred by the
Transferee for any reason including, without limitation, the
non-performance by any party to any of the Security Documents of any
obligations under any of the Security Documents.
10 The address and fax number of the Transferee for the purposes of clause
10.20 of the Loan Agreement are set out in the Schedule.
11 This certificate may be executed in any number of counterparts each of
which shall be original but which shall together constitute the same
instrument.
12 This certificate shall be governed by and interpreted in accordance with
English law.
THE SCHEDULE
1 TRANSFEROR:
2 TRANSFEREE:
3 TRANSFER DATE (not earlier that the fifth Business Day after the date of
delivery of the Transfer Certificate to the Agent):
4 TRANSFEROR'S COMMITMENT:
5 AMOUNT TRANSFERRED:
6 TRANSFEREE'S ADDRESS AND FAX NUMBER FOR THE PURPOSES OF CLAUSE 11.20 OF THE
LOAN AGREEMENT:
75
[NAME OF TRANSFEROR] [NAME OF TRANSFEREE]
By: By:
--------------------------------- ------------------------------------
Date: Date:
------------- -------------
FORTIS BANK (NEDERLAND) N.V. as Agent
for and on behalf of itself, the Borrowers and each of the Banks (other than the
Transferor)
By:
---------------------------------
Date:
-------------
76
