LOAN AGREEMENT for a Multicurrency Loan of up to $45,000,000 to SOFFIVE SHIPPING CORPORATION provided by THE ROYAL BANK OF SCOTLAND plc
EXHIBIT
10.22
Private
& Confidential
for
a
Multicurrency
Loan of up to $45,000,000
to
SOFFIVE
SHIPPING CORPORATION
provided
by
THE
ROYAL BANK OF SCOTLAND plc
Contents
|
Clause
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Page
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1
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Purpose
and definitions
|
1
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2
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The
Commitment and the Loan
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9
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3
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Interest
and Interest Periods
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10
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4
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Currencies
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12
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5
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Repayment
and prepayment
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14
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6
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Commitment
commission, fees and expenses
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16
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7
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Payments
and taxes; accounts and calculations
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18
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8
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Representations
and warranties
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19
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9
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Undertakings
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23
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10
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Conditions
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28
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11
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Events
of Default
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29
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12
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Indemnities
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32
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13
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Unlawfulness
and increased costs
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33
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14
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Security
and set-off
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34
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15
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Accounts
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36
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16
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Assignment,
transfer and lending office
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36
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17
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Notices
and other matters
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37
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18
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Governing
law and jurisdiction
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38
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Schedule
1 Form of Drawdown Notice
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40
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Schedule
2 Documents and evidence required as conditions precedent
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41
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Schedule
3 Calculation of Additional Cost
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45
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Schedule
4 Form of Interest Period Letter
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47
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Schedule
5 Form of Mortgage
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48
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Schedule
6 Form of Deed of Covenant
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49
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Schedule
7 Form of General Assignment
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50
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Schedule
8 Form of Manager’s Undertaking
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51
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Schedule
9 Form of Master Swap Agreement
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52
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Schedule
10 Form of Master Agreement Security Deed
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53
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THIS
AGREEMENT is
dated
19 November 2007 and made BETWEEN:
(1) SOFFIVE
SHIPPING CORPORATION as
Borrower; and
(2) THE
ROYAL BANK OF SCOTLAND plc as
Bank.
IT
IS AGREED as
follows:
| 1 |
Purpose
and
definitions
|
|
1.1
|
Purpose
|
This
Agreement sets out the terms and conditions upon and subject to which the Bank
agrees to make available to the Borrower a loan of up to Forty five million
Dollars ($45,000,000), or the equivalent in Optional Currencies, to be used
for
the purpose of refinancing part of the purchase price of the Ship paid by the
Borrower.
| 1.2 |
Definitions
|
In
this
Agreement, unless the context otherwise requires:
“Additional
Cost” means
in
relation to any period a percentage calculated for such period at an annual
rate
determined by the application of the formula set out in schedule 3;
“Assignee”
has
the
meaning ascribed thereto in clause 16.3;
“Bank”
means
The
Royal Bank of Scotland plc whose registered office is at 00 Xx. Xxxxxx Xxxxxx,
Xxxxxxxxx XX0, 0XX, Xxxxxxxx, acting for the purposes of this Agreement through
its branch at The Shipping Business Centre, 0-00 Xxxxx Xxxxx Xxxxxx, Xxxxxx,
XX0X 0XX, Xxxxxxx (or of such other address as may last have been notified
to
the Borrower pursuant to clause 16.6) and includes its successors in title
and
Assignees and Transferees;
“Banking
Day” means
a
day (other than Saturday or Sunday) and:
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(a)
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for
interest rate fixing purposes:
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|
(i)
|
in
relation to a rate fixing in respect of euro, a day on which the
Trans-European Automated Real-Time Gross Settlement Express Transfer
system (TARGET) is operating; and
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(ii)
|
in
relation to a rate fixing in respect of any Optional Currency or
Dollars,
a day on which banks are open for business in the principal financial
centre in, respectively, the jurisdiction of the relevant Optional
Currency or New York City; and
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(b)
|
for
all other purposes (including, but not limited to, payments and receiving
notices):
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(i)
|
a
day on which banks are open for business in London;
and
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(ii)
|
in
relation to payments in euros, a day on which banks are open for
business
in such other principal financial centre or centres of relevant
Participating Member States as the Bank may nominate;
and
|
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(iii)
|
in
relation to payments in any Optional Currency or Dollars, a day on
which
banks are open for business in the principal financial centre in,
respectively, the jurisdiction of the relevant Optional Currency
or New
York City;
|
1
“Borrowed
Money” means
Indebtedness in respect of (i) money borrowed or raised and debit balances
at
banks, (ii) any bond, note, loan stock, debenture or similar debt instrument,
(iii) acceptance or documentary credit facilities, (iv) receivables sold or
discounted (otherwise than on a non-recourse basis), (v) deferred payments
for
assets or services acquired, (vi) finance leases and hire purchase contracts,
(vii) swaps, forward exchange contracts, futures and other derivatives, (viii)
any other transaction (including without limitation forward sale or purchase
agreements) having the commercial effect of a borrowing or raising of money
or
of any of (ii) to (vii) above and (ix) guarantees in respect of Indebtedness
of
any person falling within any of (i) to (viii) above;
“Borrower”
means
Soffive Shipping Corporation of 00 Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx of Liberia
and includes its successors in title;
“Borrower’s
Security Documents” means,
at
any relevant time, such of the Security Documents as shall have been executed
by
the Borrower at such time;
“Canadian
Dollars and
“C$”
mean
the
lawful currency of Canada at any relevant time;
“Cash
Collateral Account” means
an
interest bearing Dollar account of the Borrower to be opened by the Borrower
with the Bank and includes any other account designated in writing by the Bank
to be a Cash Collateral Account for the purposes of this Agreement;
“Classification”
means
the
classification “+100A1 Bulk Carrier-BC-A, Strengthened for Heavy Cargoes, Hold
Nos. 2,4 and 6 may be empty, ShipRight (SDA,FDA,CM), ESN, ESP, LI, *IWS,
+LMC,UMS with descriptive note “Pt.Higher Tensile Steel”, ShipRight (SCM)” with
the Classification Society or such other classification as the Bank shall,
at
the request of the Borrower, have agreed in writing shall be treated as the
Classification for the purposes of the Security Documents;
“Classification
Society” means
Lloyds Register of Shipping or such other classification society which the
Bank
shall, at the request of the Borrower, have agreed in writing shall be treated
as the Classification Society for the purposes of the Security
Documents;
“Code”
means
the
International Management Code for the Safe Operation of Ships and for Pollution
Prevention constituted pursuant to Resolution A. 741 (18) of the International
Maritime Organisation and incorporated into the International Convention on
Safety of Life at Sea 1974 (as amended) and includes any amendments or
extensions thereto and any regulation issued pursuant thereto;
“Commitment”
means
the
amount which the Bank has agreed to lend to the Borrower under clause 2.1 as
reduced by any relevant term of this Agreement;
“Compulsory
Acquisition” means
requisition for title or other compulsory acquisition, requisition,
appropriation, expropriation, deprivation, forfeiture or confiscation for any
reason of the Ship by any Government Entity or other competent authority,
whether de jure or de facto, but shall exclude requisition for use or hire
not
involving requisition of title;
“Credit
Support Document” has
the
meaning given to that expression in section 14 of the Master Swap Agreement
and
as set out in paragraph (f) of Part 4 of the Schedule to the Master Swap
Agreement;
“Credit
Support Provider” means
any
person defined as such in the Master Swap Agreement pursuant to section 14
of
the Master Swap Agreement;
“Deed
of Covenant” means
the
deed of covenant collateral to the Mortgage executed or (as the context may
require) to be executed by the Borrower in favour of the Bank in substantially
the
2
form
set
out in schedule 6 or in such other form as the Bank may in its absolute
discretion require;
“Default”
means
any
Event of Default or any event or circumstance which with the giving of notice
or
lapse of time or the satisfaction of any other condition (or any combination
thereof) would constitute an Event of Default;
“DOC”
means
the
document of compliance issued to an Operator in accordance with rule 13 of
the
Code;
“Dollar
Amount” means
(a)
in relation to a Tranche to be drawn down in Dollars or, as the case may be,
in
relation to the Loan if it is to be wholly drawn down in Dollars, the amount
in
Dollars so drawn down (b) in relation to a Tranche to be drawn down in an
Optional Currency or, as the case may be, in relation to the Loan if it is
to be
wholly drawn down in an Optional Currency, the amount in Dollars specified
in
the Drawdown Notice which would be required to purchase the principal amount
of
that Tranche or, as the case may be, the Loan as determined in accordance with
clause 4.3 and (c) in relation to clause 5.1 where the Loan has been converted
in whole or in part into one or more Optional Currencies pursuant to clause
4.4,
the amount in Dollars which would have been outstanding had the Loan been
originally drawn down in, and remained outstanding at all times in, Dollars,
as
reduced by any repayment or prepayment under this Agreement;
“Dollars”
and
“$”
mean the lawful currency of the United States of America and in respect of
all
payments to be made under any of the Security Documents mean funds which are
for
same day settlement in the New York Clearing House Interbank Payments System
(or
such other U.S. dollar funds as may at the relevant time be customary for the
settlement of international banking transactions denominated in U.S.
dollars);
“Drawdown
Date” means
the
date, being a Banking Day falling not later than the Termination Date, on which
the Loan is, or is to be, drawn down;
“Drawdown
Notice” means
a
notice substantially in the terms of schedule 1;
“Encumbrance”
means
any
mortgage, charge (whether fixed or floating), pledge, lien, hypothecation,
assignment, trust arrangement or security interest or other encumbrance of
any
kind securing any obligation of any person or any type of preferential
arrangement (including without limitation title transfer and/or retention
arrangements having a similar effect);
“Environmental
Affiliate” means
any
agent or employee of the Borrower or any person having a contractual
relationship with the Borrower in connection with the Ship or its operation
or
the carriage of cargo and/or passengers thereon and/or the provision of goods
and/or services on or from the Ship;
“Environmental
Approval” means
any
consent, authorisation, licence or approval of any governmental or public body
or authorities or courts applicable to the Ship or its operation or the carriage
of cargo and/or passengers thereon and/or the provision of goods and/or services
on or from the Ship required under any Environmental Law;
“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 Law
or
any Environmental Approval together with claims made by any third party relating
to damage, contribution, loss or injury, resulting from any actual or threatened
emission, spill, release or discharge of a Pollutant from the Ship;
“Environmental
Laws” means
all
national, international and state laws, rules, regulations, treaties and
conventions applicable to the Ship pertaining to the pollution or protection
of
human
3
health
or
the environment including, without limitation, the carriage of Pollutants and
actual or threatened emissions, spills, releases or discharges of
Pollutants;
“Equivalent
Amount” means,
as
at any date, the equivalent in one currency of an amount in another currency
as
converted at the rate determined by the Bank to be the spot rate of exchange
ruling on the London Foreign Exchange Market for the purchase of the former
currency with the latter currency at or about 11:00 a.m. on the second Banking
Day before such date;
“EURIBOR”
shall
mean in relation to any amount in euros and any period the offered rate for
deposits for such amount and for such period which is:
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(a)
|
the
rate of interest for such period which appears on page EURIBOR 01
of the
Reuters screen (or such other page on the Reuters screen as may
customarily be used from time to time to display EURIBOR rates) at
or
about 11:00 a.m. (Brussels time) on the Quotation Date for such period;
or
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|
(b)
|
if
the relevant rate of EURIBOR cannot be determined in accordance with
paragraph (a) above, the rate (rounded upwards if necessary to the
nearest
one sixteenth of one per cent) the Bank offers for deposits in an
amount
approximately equal to the amount in relation to which EURIBOR is
to be
determined for a period equivalent to such period to prime banks
in the
London Interbank Market at or about 11:00 a.m. (London time) on the
Quotation Date for such period;
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“euro”
and
“euros” and “€” mean the single currency of Participating Member States
introduced in accordance with the provisions of Article 109(1)4 of the Treaty
and in respect of all payments to be made under this Agreement in euro means
immediately available, freely transferable funds;
“Event
of Default” means
any
of the events or circumstances described in clause 11.1;
“Flag
State” means
the
Republic of Cyprus or such other state or territory designated in writing by
the
Bank, at the request of the Borrower, as being the “Flag
State” of
the
Ship for the purposes of the Security Documents;
“Funding
Cost” means
(i)
in respect of the Loan or, as the case may be, any Tranche to be advanced or
outstanding in euros, EURIBOR or (ii) in respect of the Loan or, as the case
may
be, any Tranche to be advanced or outstanding in Dollars or an Optional Currency
(other than euros), LIBOR;
“General
Assignment” means
the
assignment collateral to the Mortgage and Deed of Covenant executed or (as
the
context may require) to be executed by the Borrower in favour of the Bank in
substantially the form set out in schedule 7 or in such other form as the Bank
may in its absolute discretion require;
“Government
Entity” means
and
includes (whether having a distinct legal personality or not) any national
or
local government authority, board, commission, department, division, organ,
instrumentality, court or agency and any association, organisation or
institution of which any of the foregoing is a member or to whose jurisdiction
any of the foregoing is subject or in whose activities any of the foregoing
is a
participant;
“Indebtedness”
means
any
obligation for the payment or repayment of money, whether as principal or as
surety and whether present or future, actual or contingent;
“Interest
Payment Date” means
the
last day of an Interest Period;
“Interest
Period” means
each period for the calculation of interest in respect of the Loan or, as the
case may be, a Tranche thereof ascertained in accordance with clauses 3.2 and
3.3;
4
“Interest
Period Letter” means
the
letter addressed by the Borrower to the Bank, such letter to be substantially
in
the form set out in schedule 4;
“ISPS
Code” means
the
International Ship and Port Facility Security Code constituted pursuant to
resolution A.924(22) of the International Maritime Organisation now set out
in
Chapter XI-2 of the International Convention for the Safety of Life at Sea
(SOLAS) 1974 (as amended) and the mandatory ISPS Code as adopted by a Diplomatic
Conference of the International Maritime Organisation on Maritime Security
in
December 2002 and includes any amendments or extensions to it and any regulation
issued pursuant to it;
“ISSC”
means an
International Ship Security Certificate issued in respect of the Ship pursuant
to the ISPS Code;
“Japanese
Yen” and
“¥”
mean
the
lawful currency for the time being of Japan;
“LIBOR”
means,
in
relation to a particular period, the rate for deposits of the relevant currency
for a period equivalent to such period at or about 11:00 a.m. (London time)
on
the Quotation Date for such period as displayed on Reuters page LIBOR 01
(British Bankers’ Association Interest Settlement Rates) (or such other page as
may replace such page LIBOR 01 on such system or on any other system of the
information vendor for the time being designated by the British Bankers’
Association to calculate the BBA Interest Settlement Rate (as defined in the
British Bankers’ Association’s Recommended Terms and Conditions (“BBAIRS”
terms)
applicable at the time)), provided that if on such date no such rate is so
displayed, LIBOR for such period shall be the rate (rounded upward if necessary
to five decimal places) quoted by the Bank as the Bank’s offered rate for
deposits of the relevant currency in an amount approximately equal to the amount
in relation to which LIBOR is to be determined for a period equivalent to such
period to prime banks in the London Interbank Market at or about 11:00 am.
(London time) on the Quotation Date for such period;
“Loan”
means
the
principal amount borrowed by the Borrower on the Drawdown Date or (as the
context may require) the principal amount owing to the Bank under this Agreement
at any relevant time;
“Management
Agreement” means
the
agreement entered or (as the context may require) to be entered into (in a
form
and substance acceptable to the Bank in its sole discretion) between the
Borrower and the Manager providing (inter alia) for the Manager to manage the
Ship;
“Manager”
means
Safety Management Overseas S.A. of Edificio Torre Universal, Piso 12, Xxxxxxx
Xxxxxxxx Xxxx, X.X. Xxx 0000, Xxxxxx Xxxx, Xxxxxxxx of Panama, or any other
person appointed by the Borrower, with the prior written consent of the Bank,
as
the manager of the Ship and includes its successors in title;
“Manager’s
Undertaking” means
an
undertaking and assignment executed or (as the context may require) to be
executed by the Manager in favour of the Bank as a condition precedent to the
approval of the Management Agreement, such undertaking to be in substantially
the form set out in schedule 8 or in such form as the Bank may in its absolute
discretion require;
“Margin”
means
zero point five hundred and seventy-five per cent (0.575%) per
annum;
“Master
Agreement Security Deed” means
the
deed executed or (as the context may require) to be executed by the Borrower
in
favour of the Bank in the form set out in schedule 10;
“Master
Swap Agreement” means
the
agreement made or (as the context may require) to be made between the Bank
and
the Borrower comprising an ISDA Master Agreement and the Schedule thereto in
the
form or substantially in the form set out in schedule 9, and the Confirmations
(as defined therein) supplemental thereto;
5
“month”
means
a
period beginning in one calendar month and ending in the next calendar month
on
the day numerically corresponding to the day of the calendar month on which
it
started, provided that (i) if the period started on the last Banking Day in
a
calendar month or if there is no such numerically corresponding day, it shall
end on the last Banking Day in such next calendar month and (ii) if such
numerically corresponding day is not a Banking Day, the period shall end on
the
next following Banking Day in the same calendar month but if there is no such
Banking Day it shall end on the preceding Banking Day and “months” and “monthly”
shall be construed accordingly;
“Mortgage”
means
the
first priority statutory mortgage of the Ship executed or (as the context may
require) to be executed by the Borrower in favour of the Bank in substantially
the form set out in schedule 5 or in such form as the Bank may in its absolute
discretion require;
“Operator”
means
any person who is from time to time during the Security Period (as defined
in
the General Assignment) concerned in the operation of the Ship and falls within
the definition of “Company”
set
out
in rule 1.1.2 of the Code;
“Optional
Currency” means
any
of Swiss Francs, Japanese Yen, euros, Canadian Dollars or Sterling so long
as
each such currency is freely transferable, freely convertible into Dollars
and
dealt in on the London Interbank Market and, in respect of all payments to
be
made under any of the Security Documents in an Optional Currency, means
immediately available freely transferable cleared funds in that Optional
Currency and “Optional
Currencies” means,
together, all or any of them;
“Participating
Member State” means
a
member state of the European Union that has adopted a single currency in
accordance with the Treaty;
“Permitted
Encumbrance” means
any
Encumbrance in favour of the Bank created pursuant to the Security Documents
and
Permitted Liens;
“Permitted
Liens” means
any
lien on the Ship for master’s, officer’s or crew’s wages outstanding in the
ordinary course of trading’, any lien for salvage and any ship repairer’s or
outfitter’s possessory lien for a sum not (except with the prior written consent
of the Bank) exceeding the Casualty Amount (as defined in the Deed of
Covenant);
“Pollutant”
means
and
includes pollutants, contaminants, toxic substances, oil as defined in the
United States Oil Pollution Act of 1990 and all hazardous substances as defined
in the United States Comprehensive Environmental Response, Compensation and
Liability Xxx 0000;
“Quotation
Date” means,
in
relation to any period for which the relevant Funding Cost is to be determined,
the date which is two Banking Days prior to the first day of the relevant
period;
“Registry”
means,
in
relation to the Ship, such registrar, commissioner, or representative of the
relevant Flag State who is duly authorised and empowered to register such Ship,
the Borrower’s title to such Ship and the Mortgage under the laws and flag of
the Flag State;
“Regulatory
Agency” means
the
Government Entity or other organisation in the Flag State which has been
designated by the government of the Flag State to implement and/or administer
and/or enforce the provisions of the Code;
“Relevant
Jurisdiction” means
any
jurisdiction in which or where any Security Party is incorporated, resident,
domiciled, has a permanent establishment, carries on, or has a place of business
or is otherwise effectively connected;
“Repayment
Dates” means,
subject to clause 7.3, each of the dates falling at six (6) monthly intervals
after the Drawdown Date up to and including the date falling one hundred and
forty four (144) months after the Drawdown Date;
6
“Requisition
Compensation” means
all
sums of money or other compensation from time to time payable during the
Security Period by reason of the Compulsory Acquisition of the
Ship;
“Safety
Account” means
an
interest bearing Dollar account of the Manager opened with the Bank designated
SAMAOV-USDA and includes any other account designated in writing by the Bank
to
be a Safety Account for the purposes of this Agreement;
“Security
Documents” means
this Agreement, the Mortgage, the Deed of Covenant, the General Assignment,
the
Manager’s Undertaking, the Master Swap Agreement and the Master Agreement
Security Deed and any other documents as may have been or shall from time to
time after the date of this Agreement be executed to guarantee and/or secure
all
or any part of the Loan, interest thereon and other moneys from time to time
owing by the Borrower pursuant to this Agreement and/or the Master Swap
Agreement (whether or not any such document also secures moneys from time to
time owing pursuant to any other document or agreement);
“Security
Party” means
the
Borrower, the Manager or any other person who may at any time be a party to
any
of the Security Documents (other than the Bank);
“Security
Requirement” means
the
amount in Dollars (as certified by the Bank whose certificate shall, in the
absence of manifest error, be conclusive and binding on the Borrower and the
Bank) which shall be:
|
(a)
|
for
the period commencing on the Drawdown Date and ending on the date
falling
thirty-six (36) months thereafter, equal to one hundred per cent
(100%) of
(i) the Loan (or the Equivalent Amount in Dollars when the Loan or
part
thereof is denominated in an Optional Currency) and (ii) the cost
(if any)
(as certified by the Bank whose certificate shall, in the absence
of
manifest error, be conclusive and binding on the Borrower and the
Bank) of
terminating any Transaction entered into pursuant to the Master Swap
Agreement;
|
|
(b)
|
for
the period commencing one day after the date falling thirty-six (36)
months after the Drawdown Date and ending on the date falling seventy-two
(72) months after the Drawdown Date, equal to one hundred and ten
per cent
(110%) of (i) the Loan (or the Equivalent Amount in Dollars when
the Loan
or part thereof is denominated in an Optional Currency) and (ii)
the cost
(if any) (as certified by the Bank whose certificate shall, in the
absence
of manifest error, be conclusive and binding on the Borrower and
the Bank)
of terminating any Transaction entered into pursuant to the Master
Swap
Agreement; and
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|
(c)
|
for
the period commencing one day after the date falling seventy-two
(72)
months after the Drawdown Date and ending on the last day of the
Security
Period (as defined in the Deed of Covenant), equal to one hundred
and
twenty per cent (120%) of (i) the Loan (or the Equivalent Amount
in
Dollars when the Loan or part thereof is denominated in an Optional
Currency) and (ii) the cost (if any) (as certified by the Bank whose
certificate shall, in the absence of manifest error, be conclusive
and
binding on the Borrower and the Bank) of terminating any Transaction
entered into pursuant to the Master Swap
Agreement;
|
“Security
Value” means
the
amount in Dollars (as certified by the Bank whose certificate shall, in the
absence of manifest error, be conclusive and binding on the Borrower and the
Bank) which, at any relevant time, is the aggregate of (i) the market value
of
the Ship as most recently determined in accordance with clause 9.2.2 (ii) the
market value of any additional security for the time being actually provided
to
the Bank pursuant to clause 9.2 as most recently determined in accordance with
clause 9.2.5, and (iii) the amount (if any) at the relevant time standing to
the
credit of the Cash Collateral Account;
7
“Ship”
means
m.v. Sophia
registered
in the name of the Borrower under the laws and flag of the Flag State with
IMO
number 9323912;
“SMC”
means
a
safety management certificate issued in respect of a Ship in accordance with
rule 13 of the Code;
“Sterling”
and
“E”
mean the lawful currency for the time being of the United Kingdom;
“Subsidiary”
of
a
person means any company or entity directly or indirectly controlled by such
person, and for this purpose “control” means either the ownership of more than
fifty per cent (50%) of the voting share capital (or equivalent rights of
ownership) of such company or entity or the power to direct its policies and
management, whether by contract or otherwise;
“Swiss
Francs” or
“CHF”
mean
the
lawful currency for the time being of Switzerland;
“Taxes”
includes
all present and future taxes, levies, imposts, duties, fees or charges of
whatever nature together with interest thereon and penalties in respect thereof
and “Taxation”
shall
be
construed accordingly;
“Termination
Date” means
16
November 2007 or such later date as the Bank may in its absolute discretion
agree in writing;
“Total
Loss”
means:
|
(a)
|
the
actual, constructive, compromised or arranged total loss of the Ship;
or
|
|
(b)
|
the
Compulsory Acquisition of the Ship;
or
|
|
(c)
|
the
hijacking, theft, condemnation, capture, seizure, arrest, detention
or
confiscation of the Ship (other than where the same amounts to the
Compulsory Acquisition of the Ship) by any Government Entity, or
by
persons acting or purporting to act on behalf of any Government Entity,
unless the Ship be released and restored to the Borrower from such
hijacking, theft, condemnation, capture, seizure, arrest, detention
or
confiscation within thirty (30) days after the occurrence
thereof;
|
“Tranche”
means
each separate portion of the Loan for the purposes of calculation of interest
or, where the Loan is not divided into separate portions for such purpose,
means
the Loan;
“Transaction”
means
a
Transaction as defined in the introductory paragraph of the Master Swap
Agreement;
“Transferee”
has
the
meaning ascribed thereto in clause 16.4; and
“Treaty”
means
the
Treaty establishing the European Economic Community, being the Treaty of Rome
of
25 March 1957 as amended by the Single Xxxxxxxx Xxx 0000 and Maastricht Treaty
(which was signed on 7 February 1992 and came into force on 1 November 1993)
as
amended, varied or supplemented from time to time.
|
1.3
|
Headings
|
Clause
headings and the table of contents are inserted for convenience of reference
only and shall be ignored in the interpretation of this Agreement.
8
|
1.4
|
Construction
of certain terms
|
In
this
Agreement, unless the context otherwise requires:
|
1.4.1
|
references
to clauses and schedules are to be construed as references to clauses
of,
and schedules to, this Agreement and references to this Agreement
include
its schedules;
|
|
1.4.2
|
references
to (or to any specified provision of) this Agreement or any other
document
shall be construed as references to this Agreement, that provision
or that
document as in force for the time being and as amended in accordance
with
the terms thereof, or, as the case may be, with the agreement of
the
relevant parties;
|
|
1.4.3
|
references
to a “regulation” include any present or future regulation, rule,
directive, requirement, request or guideline (whether or not having
the
force of law) of any agency, authority, central bank or government
department or any self-regulatory or other national or supra-national
authority;
|
|
1.4.4
|
words
importing the plural shall include the singular and vice
versa;
|
|
1.4.5
|
references
to a time of day are to London
time;
|
|
1.4.6
|
references
to a person shall be construed as references to an individual, firm,
company, corporation, unincorporated body of persons or any Government
Entity;
|
|
1.4.7
|
references
to a “guarantee”
include
references to an indemnity or other assurance against financial loss
including, without limitation, an obligation to purchase assets or
services as a consequence of a default by any other person to pay
any
Indebtedness and “guaranteed”
shall
be construed accordingly; and
|
|
1.4.8
|
references
to any enactment shall be deemed to include references to such enactment
as re-enacted, amended or extended.
|
|
2
|
The
Commitment and the Loan
|
|
2.1
|
Agreement
to lend
|
The
Bank,
relying upon each of the representations and warranties in clause 8, agrees
to
lend to the Borrower upon and subject to the terms of this Agreement Forty
five
million Dollars (45,000,000) or the equivalent in Optional Currencies calculated
in accordance with clause 4.
|
2.2
|
Drawdown
|
Subject
to the terms and conditions of this Agreement, the Loan shall be advanced in
full in one amount (in up to two Tranches) on the Drawdown Date following
receipt by the Bank from the Borrower of a Drawdown Notice not later than 10
a.m. on the second Banking Day before the proposed Drawdown Date. A Drawdown
Notice shall be effective on actual receipt by the Bank, shall specify the
amount in Dollars and/or, as the case may be, Optional Currencies into which
the
Borrower wishes the Loan to be subdivided on such Drawdown Date and, once given,
shall, subject as provided in clause 3.6.1, be irrevocable.
|
2.3
|
Amount
|
The
principal amount specified in the Drawdown Notice for borrowing on the Drawdown
Date shall, subject to the terms and conditions of this Agreement be Forty
five
million Dollars ($45,000,000) or the equivalent in Optional Currencies,
calculated in accordance with clause 4,
9
which
sum
may be advanced in up to two Tranches of different currencies in accordance
with
clause 4 provided no Tranche has a Dollar Amount of less than $1,000,000
on the
Drawdown Date as a result. Each Tranche shall be denominated in one currency
only.
|
2.4
|
Availability
|
Upon
receipt of a Drawdown Notice complying with the terms of this Agreement the
Bank
shall, subject to the provisions of clause 10, on the Drawdown Date make the
Loan available to the Borrower in accordance with clause 7.2.
|
2.5
|
Termination
of Commitment
|
If
the
Loan is not drawn down by the Termination Date, the Commitment shall thereupon
be automatically cancelled.
|
2.6
|
Application
of Proceeds
|
Without
prejudice to the Borrower’s obligations under clause 9.1.3, the Bank shall have
no responsibility for the application of proceeds of the Loan by the
Borrower.
|
3
|
Interest
and Interest Periods
|
|
3.1
|
Normal
interest rate
|
The
Borrower shall pay interest on each Tranche in the currency in which such
Tranche is outstanding in respect of each Interest Period relating thereto
on
each Interest Payment Date (or, in the case of Interest Periods of more than
six
(6) months, by instalments, the first such instalment being payable six (6)
months from the commencement of the relevant Interest Period and the subsequent
instalments at intervals of six (6) months or, if shorter, the period from
the
date of the preceding instalment until the Interest Payment Date relative to
such Interest Period) at the rate per annum determined by the Bank to be the
aggregate of (a) the Margin, (b) the Additional Cost and (c) the Funding Cost
for such Interest Period.
|
3.2
|
Selection
of Interest Periods
|
The
Borrower may by notice received by the Bank not later than 10 a.m. on the fifth
Banking Day before the beginning of each Interest Period in relation to each
Tranche specify whether such Interest Period shall have a duration (subject
to
availability which shall be determined solely by the Bank) of one (1), two
(2),
three (3), six (6) or twelve (12) months or such other period as the Borrower
may select and the Bank may, in its absolute discretion, agree.
|
3.3
|
Determination
of Interest Periods
|
Every
Interest Period shall be of the duration specified by the Borrower pursuant
to
clause 3.2 but so that:
|
3.3.1
|
the
first Interest Period in respect of a Tranche shall commence on the
Drawdown Date and each subsequent Interest Period in respect of a
Tranche
shall commence on the last day of the previous Interest Period in
respect
of such Tranche;
|
|
3.3.2
|
Interest
Periods in respect of different Tranches shall end on the same
day;
|
|
3.3.3
|
if
any Interest Period would otherwise overrun a Repayment Date, then,
in the
case of the last Repayment Date, such Interest Period shall end on
such
Repayment Date, and in the case of any other Repayment Date or Repayment
Dates the Loan or, if the Loan is divided into Tranches, the aggregate
of
the Tranches, shall be divided into parts so that there is
one
|
10
part
(in
the case of Tranches to be calculated on pro rata basis between the Tranches
in
the aggregate Dollar Amount of all such Tranches) in the amount of the repayment
instalment due on each Repayment Date falling during that Interest Period and
having an Interest Period ending on the relevant Repayment Date and another
part
(in the case of Tranches to be calculated on a pro rata basis between the
Tranches in the aggregate Dollar Amount of all such Tranches) in the amount
of
the balance of the Loan having an Interest Period ascertained in accordance
with
clause 3.2 and the other provisions of this clause 3.3 and the expression
“Interest Period in respect of the Loan” when used in clause 4 and elsewhere in
this Agreement refers to the Interest Period in respect of the balance of the
Loan; and
|
3.3.4
|
if
the Borrower fails to specify the duration of an Interest Period
in
accordance with the provisions of clause 3.2 and this clause 3.3
such
Interest Period shall have a duration of six (6) months or such other
period as shall comply with this clause
3.3.
|
|
3.4
|
Default
interest
|
If
the
Borrower fails to pay any sum (including, without limitation, any sum payable
pursuant to this clause 3.4) on its due date for payment under any of the
Security Documents, the Borrower shall pay interest on such sum on demand from
the due date up to the date of actual payment (as well after as before judgment)
at a rate determined by the Bank pursuant to this clause 3.4. The period
beginning on such due date and ending on such date of payment shall be divided
into successive periods of not more than three (3) months as selected by the
Bank each of which (other than the first, which shall commence on such due
date)
shall commence on the last day of the preceding such period. The rate of
interest applicable to each such period shall be the aggregate (as determined
by
the Bank) of (a) one per cent (1%) per annum, (b) the Margin, (c) the Additional
Cost and (d) the Funding Cost for such period and applicable to such sum. Such
interest shall be due and payable on the last day of each such period as
determined by the Bank and each such day shall, for the purposes of this
Agreement, be treated as an Interest Payment Date, provided that if such unpaid
sum is an amount of principal which became due and payable, by reason of a
declaration by the Bank under clause 11.2.2, or a prepayment pursuant to clauses
5.2, 5.3, 9.2 or 13.1, on a date other than an Interest Payment Date relating
thereto, the first such period selected by the Bank shall be of a duration
equal
to the period between the due date of such principal sum and such Interest
Payment Date and interest shall be payable on such principal sum during such
period at a rate of one per cent (1%) above the rate applicable thereto
immediately before it shall have become so due and payable. If, for the reasons
specified in clause 3.6.1, the Bank is unable to determine a rate in accordance
with the foregoing provisions of this clause 3.4, interest on any sum not paid
on its due date for payment shall be calculated at a rate determined by the
Bank
to be one per cent (1%) per annum above the aggregate of the Margin and the
cost
of funds (including Additional Cost ) to the Bank.
|
3.5
|
Notification
of Interest Periods and interest
rate
|
The
Bank
shall notify the Borrower promptly of the duration of each Interest Period
and
of each rate of interest determined by it under this clause 3.
| 3.6 |
Market
disruption;
non-availability
|
|
3.6.1
|
If
and whenever, at any time prior to the commencement of any Interest
Period, the Bank shall have determined (which determination shall,
in the
absence of manifest error, be
conclusive):
|
| (a) |
that
adequate and fair means do not exist for ascertaining LIBOR or, as
the
case may be, EURIBOR during such Interest Period;
or
|
| (b) |
that
deposits in Dollars are not available to the Bank in the London Interbank
Market in the ordinary course of business in sufficient amounts to
fund
the Loan for such Interest
|
11
Period
or
that LIBOR and/or, as the case may be, EURIBOR does not accurately reflect
the
cost to the Bank of obtaining such deposits;
the
Bank
shall forthwith give notice (a “Determination
Notice”) thereof
to the Borrower. A Determination Notice shall contain particulars of the
relevant circumstances giving rise to its issue. After the giving of any
Determination Notice the undrawn amount of the Commitment shall not be borrowed
until notice to the contrary is given to the Borrower by the Bank.
|
3.6.2
|
During
the period of ten (10) days after any Determination Notice has been
given
by the Bank under clause 3.6.1, the Bank shall certify an alternative
basis (the “Substitute
Basis”) for
maintaining the Loan. The Substitute Basis may (without limitation)
include alternative interest periods, alternative currencies or
alternative rates of interest but shall include a margin above the
cost of
funds including Additional Cost, if any, to the Bank equivalent to
the
Margin. Each Substitute Basis so certified shall be binding upon
the
Borrower and shall take effect in accordance with its terms from
the date
specified in the Determination Notice until such time as the Bank
notifies
the Borrower that none of the circumstances specified in clause 3.6.1
continues to exist whereupon the normal interest rate fixing provisions
of
this Agreement shall apply.
|
|
4
|
Currencies
|
|
4.1
|
Selection
of currencies
|
Subject
to clause 4.2, if the Borrower so requests in the Drawdown Notice or, in any
case other than drawdown of the Loan, by notice received by the Bank not later
than 10 a.m. on the fifth Banking Day before the beginning of an Interest Period
in respect of the Loan or, as the case may be, Tranche, the Loan, or part
thereof may be drawn down in Dollars or in an Optional Currency or, on the
first
day of such Interest Period, the Loan or as the case may be such Tranche may
be
converted into an, or another, Optional Currency or Dollars but, if no such
request is received by the Bank, the Loan will be drawn down in Dollars or,
as
the case may be, the Loan or such Tranche will remain outstanding in the
currency in which it was outstanding during its immediately preceding Interest
Period.
|
4.2
|
Limit
on currencies;
non-availability
|
|
4.2.1
|
The
Loan or any part thereof may not be drawn down in, and the Loan or
a
Tranche may not be, converted into or remain outstanding in an Optional
Currency if:
|
| (a) |
in
consequence thereof there would be more than two (2) currencies
outstanding at any time; or
|
| (b) |
the
amount to be converted is less than $1,000,000 or an integral multiple
of
$1,000,000; or
|
| (c) |
the
Bank notifies the Borrower not later than 3 p.m. on the fourth Banking
Day
before the date on which the Loan or the relevant part thereof is
to be
drawn down or the beginning of the relevant Interest Period that
deposits
of such Optional Currency are not readily available to the Bank in
an
amount comparable with the Loan or the relevant part thereof;
or
|
| (d) |
the
Bank determines (which determination shall be conclusive) at any
time
prior to 10 a.m. (local time in the place of payment) on the first
day of
the relevant Interest Period that by reason of any change in currency
availability, currency exchange rates or exchange controls it is
or will
be impracticable for the Loan or the relevant part thereof to be
drawn
down in, converted into or remain outstanding in that Optional Currency;
or
|
12
| (e) |
a
Default has occurred and is continuing;
or
|
| (f) |
a
Transaction is outstanding under the Master Swap
Agreement,
|
accordingly,
in any such event, the Loan or the relevant part thereof shall be drawn down
in,
remain outstanding in or be converted
into Dollars.
|
4.2.2
|
The
Borrower shall not be allowed to convert the Loan or any part thereof
on
more than four (4) occasions in any twelve month period. The first
twelve-month period shall commence on the Drawdown Date and each
subsequent twelve-month period shall commence on the expiry of the
previous such period.
|
|
4.3
|
Currency
amounts on drawdown
|
|
4.3.1
|
Drawdown
in Optional Currency
|
If
the
Loan is to be drawn down in full or in part in an Optional Currency, the Bank
shall, subject to clauses 10.1 and 10.2, advance to the Borrower on the Drawdown
Date the Equivalent Amount of such Optional Currency (as determined by the
Bank)
which can be purchased with the Dollar Amount of the Loan or the relevant part
thereof as at the Drawdown Date.
|
4.3.2
|
Drawdown
in Dollars
|
If
the
Loan or part thereof is to be drawn down in Dollars, the Bank shall, subject
to
clauses 10.1 and 10.2, advance to the Borrower on the Drawdown Date, the Dollar
Amount of the Loan or such part thereof.
|
4.4
|
Currency
amount on conversion
|
Subject
to clause 4.2, in the event the Borrower requests the Bank (in accordance with
clause 4.1) to convert the Loan or a part thereof from Dollars into an, or
another, Optional Currency (the “new
currency”) or
from
an Optional Currency into Dollars, the amount into which the Loan or such part
thereof is to be converted shall be the Equivalent Amount in the new currency
of
the currency in which the Loan or such part thereof was outstanding immediately
prior to conversion (after taking into account any repayment or prepayment
due
on the date of conversion).
|
4.5
|
Notional
obligations
|
The
obligation of the Bank to convert the Loan or, as the case may be, a Tranche
in
accordance with clause 4.4 is notional only, and the same shall be deemed to
be
satisfied by the Bank making appropriate adjustments in the principal amount
of
the Loan in the account referred to in clause 7.7.
|
4.6
|
Currency
Correction
|
Where
at
any time the Loan or part thereof is outstanding in one or more Optional
Currencies and/or Dollars and the Bank by notice given to the Borrower pursuant
to clause 17 (a “Currency
Correction Notice”) certifies
to the Borrower (which Currency Correction Notice shall in the absence of
manifest error be conclusive and binding on the Borrower) that the Equivalent
Amount in Dollars of the Loan then outstanding (less any amount standing to
the
credit of the Cash Collateral Account) exceeds by ten per cent (10%) or more
(the “excess
amount”), the
Dollar Amount on the date of such Currency Correction Notice, the Borrower
shall, within five (5) Banking Days from the date of such Currency Correction
Notice, pay to the Cash Collateral Account such amount in Dollars as shall
be
necessary to ensure that the minimum balance
13
standing
to the credit of the Cash Collateral Account following such deposit being made
is equal to the excess amount.
|
4.7
|
Release
of moneys in Cash Collateral
Account
|
If
at any
time following a payment to the Cash Collateral Account in accordance with
clause 4.6, the Equivalent Amount in Dollars of the Loan outstanding no longer
exceeds one hundred and ten per cent (110%) of the Dollar Amount, the Bank
shall, provided that (a) no Event of Default has occurred and is continuing
and
(b) the Security Value exceeds the Security Requirement at the time, release
to
the Borrower the sums deposited in the Cash Collateral Account in accordance
with clause 4.6 from the Cash Collateral Account. The Borrower shall not be
entitled to make any withdrawals from the Cash Collateral Account other than
pursuant to this clause 4.7 and clause 15.2.
|
4.8
|
Incidental
costs and expenses
|
All
costs
and expenses incidental to any currency conversion pursuant to this clause
4
shall be borne by the Borrower.
|
5
|
Repayment
and prepayment
|
|
5.1
|
Repayment
|
Subject
to the terms of this Agreement, the Borrower shall repay the Loan by twenty
four
consecutive instalments, one such instalment to be repaid on each of the
Repayment Dates Subject to the provisions of this Agreement, the amount of
each
of the first six (6) instalments shall be Nine hundred thousand Dollars
($900,000) or the equivalent amount in an Optional Currency calculated in
accordance with clause 5.7 and the amount of each of the seventh to the
eighteenth instalment (inclusive) shall be One million two hundred thousand
Dollars ($1,200,000) or the equivalent amount in an Optional Currency calculated
in accordance with clause 5.7 and the amount of the nineteenth to the twenty
third instalment inclusive shall be One million five hundred thousand Dollars
($1,500,000) or the equivalent amount in an Optional Currency calculated in
accordance with clause 5.7 and the amount of the last instalment shall be
Seventeen million seven hundred thousand Dollars ($17,700,000) or the equivalent
amount in an Optional Currency calculated in accordance with clause 5.7. If
the
Commitment is not drawn in full, the amount of each repayment instalment shall
be reduced proportionately.
|
5.2
|
Voluntary
prepayment
|
The
Borrower may prepay the Loan or any Tranche thereof in whole or part (being
Five
hundred thousand Dollars ($500,000) or any larger sum which is an integral
multiple of Five hundred thousand Dollars ($500,000) or, in each case, the
equivalent in the relevant Optional Currency) calculated in accordance with
clauses 5.7:
|
5.2.1
|
without
premium or penalty, on any Interest Payment Date relating to the
part of
the Loan or as the case may be, a Tranche thereof being prepaid together
with any amounts payable under clause 12 and accrued interest to
the date
of prepayment and any other sums then payable under this Agreement
and/or
the Master Swap Agreement and/or the other Security Documents or
any of
them in respect of the Loan or a Tranche thereof calculated in accordance
with clause 5.7; and
|
|
5.2.2
|
at
any other time upon payment to the Bank of accrued interest to the
date of
prepayment and such sum as the Bank in its absolute discretion shall
determine to be the loss (excluding loss of Margin on the amount
prepaid
to the end of the then current Interest Period), cost and expense
incurred
by the Bank as a result of the prepayment not being made on an Interest
Payment Date for any part of the Loan being prepaid and any other
sums
then payable under
|
14
this
Agreement and/or the Master Swap Agreement and/or the other Security Documents
or any of them.
|
5.3
|
Master
Swap Agreement, Repayments and
Prepayments
|
|
5.3.1
|
Notwithstanding
any provision of the Master Swap Agreement to the contrary, in the
case of
a prepayment of all or part of the Loan (including, without limit,
upon a
Total Loss in accordance with clause 5.4 and under clause 9.2) then,
subject to clause 5.3.2, the Bank shall be entitled but not obliged
(and,
where relevant, may do without the consent of the Borrower, where
it would
otherwise be required whether under the Master Swap Agreement or
otherwise) to amend, re-book, supplement, cancel, close out, net
out,
terminate, liquidate, transfer or assign all or any part of the rights,
benefits and obligations created by any Transaction and/or the Master
Swap
Agreement and/or to obtain or re-establish any hedge or related trading
position in any manner and with any person the Bank in its absolute
discretion may determine and both the Bank’s and the Borrower’s continuing
obligations under any Transaction and/or Master Swap Agreement shall,
unless agreed otherwise by the Bank, be calculated so far as the
Bank
considers it practicable by reference to the amended repayment schedule
for the Loan taking into account the fact that less than the full
amount
of the Loan remains outstanding.
|
|
5.3.2
|
If
less than the full amount of the Loan remains outstanding, following
a
prepayment under this Agreement and the Bank in its absolute discretion
agrees, following a written request of the Borrower, that the Borrower
may
be permitted to maintain all or part of a Transaction in an amount
not
wholly matched with or linked to all or part of the Loan, the Borrower
shall within ten (10) days of being notified by the Bank of such
requirement, provide the Bank with, or procure the provision to the
Bank
of, such additional security as shall in the opinion of the Bank
be
adequate to secure the performance of such Transaction, which additional
security shall take such form, be constituted by such documentation
and be
entered into between such parties, as the Bank in its absolute discretion
may approve or require, and each document comprising such additional
security shall constitute a Credit Support
Document.
|
|
5.3.3
|
The
Borrower shall on the first written demand of the Bank indemnify
the Bank
in respect of all losses, costs and expenses (including, but not
limited
to, legal costs and expenses) incurred or sustained by the Bank as
a
consequence of or in relation to the effecting of any matter or
Transactions referred to in this clause
5.3.
|
|
5.3.4
|
Notwithstanding
any provision of the Master Swap Agreement to the contrary, if for
any
reason a Transaction has been entered into but the Loan is not drawn
down
under this Agreement then, subject to clause 5.3.5, the Bank shall
be
entitled but not obliged (and, where relevant, may do so without
the
consent of the Borrower where it would otherwise be required whether
under
the Master Swap Agreement or otherwise) to amend, re-book, supplement,
cancel, close out, net out, terminate, liquidate, transfer or assign
all
or any part of the rights, benefits and obligations created by such
Transaction and/or the Master Swap Agreement and/or to obtain or
re-establish any hedge or related trading position in any manner
and with
any person the Bank in its absolute discretion may
determine.
|
|
5.3.5
|
If
a Transaction has been entered into but the Loan is not drawn down
under
this Agreement and the Bank in its absolute discretion agrees, following
a
written request of the Borrower, that the Borrower may be permitted
to
maintain all or part of a Transaction, the Borrower shall within
ten (10)
days of being notified by the Bank of such requirement, provide the
Bank
with, or procure the provision to the Bank of, such additional security
as
shall in the opinion of the Bank be adequate to secure the performance
of
such Transaction, which additional security shall take such form,
be
constituted by such documentation and be entered into between such
parties, as the Bank in its absolute discretion may approve or require,
and each document comprising such additional security shall constitute
a
Credit Support Document for the purposes of the Master Swap Agreement
and/or otherwise.
|
15
|
5.3.6
|
Without
prejudice to or limitation of the obligations of the Borrower under
clause
5.3.3, in the event that the Bank exercises any of its rights under
clauses 5.3.1, 5.3.2, 5.3.3 or 5.3.4 and such exercise results in
all or
part of a Transaction being terminated such Transaction or the part
thereof terminated (which shall for the purposes hereof be treated
as a
separate Transaction) in each case shall be treated under the Master
Swap
Agreement in the same manner as if it were a Terminated Transaction
(as
defined in Section 14 of the Master Swap Agreement) pursuant to an Event
of Default (as so defined in that Section 14) by the Borrower and,
accordingly, the Bank shall be permitted to recover from the Borrower
a
payment for early termination calculated in accordance with the provisions
of section 6(e)(i) of the Master Swap Agreement in respect of such
Transaction.
|
|
5.4
|
Prepayment
on Total Loss
|
On
the
Ship becoming a Total Loss or suffering damage or being involved in an incident
which in the opinion of the Bank may result in the Ship being subsequently
determined to be a Total Loss, the obligation of the Bank to advance the Loan
shall immediately cease and the Commitment shall be reduced to
zero.
On
the
date falling ninety (90) days after that on which the Ship became a Total Loss
or, if earlier, on the date upon which the insurance proceeds in respect of
such
Total Loss are, or Requisition Compensation is, received by the Borrower (or
the
Bank pursuant to the Security Documents), the Borrower shall prepay the Loan
in
full. For the purpose of this Agreement, a Total Loss shall be deemed to have
occurred:
|
5.4.1
|
in
the case of an actual total loss of the Ship on the actual date and
at the
time the Ship was lost or, if such date is not known, on the date
on which
the Ship was last reported;
|
|
5.4.2
|
in
the case of a constructive total loss of the Ship, upon the date
and at
the time notice of abandonment of the Ship is given to the insurers
of the
Ship for the time being (provided a claim for total loss is admitted
by
such insurers) or, if such insurers do not forthwith admit such a
claim,
at the date and at the time at which either a total loss is subsequently
admitted by the insurers or a total loss is subsequently adjudged
by a
competent court of law or arbitration tribunal to have
occurred;
|
|
5.4.3
|
in
the case of a compromised or arranged total loss, on the date upon
which a
binding agreement as to such compromised or arranged total loss has
been
entered into by the insurers of the
Ship;
|
|
5.4.4
|
in
the case of Compulsory Acquisition, on the date upon which the relevant
requisition of title or other compulsory acquisition occurs;
and
|
|
5.4.5
|
in
the case of hijacking, theft, condemnation, capture, seizure, arrest,
detention or confiscation of the Ship (other than where the same
amounts
to Compulsory Acquisition of the Ship) by any Government Entity,
or by
persons purporting to act on behalf of any Government Entity, which
deprives the Borrower of the use of the Ship for more than thirty
(30)
days, upon the expiry of the period of thirty (30) days after the
date
upon which the relevant hijacking, theft, condemnation, capture,
seizure,
arrest, detention or confiscation
occurred.
|
|
5.5
|
Amounts
payable on prepayment
|
Any
prepayment of all or part of the Loan under this Agreement shall be made
together with (a) accrued interest on the amount to be prepaid to the date
of
such prepayment, (b) any additional amount payable under clauses 7.6 or 13.2
and
(c) all others sums payable by the Borrower to the Bank under this Agreement
or
any
of
the other Security Documents including, without limitation
16
any
accrued commitment commission payable under clause 6.1 and, any amounts payable
under clause 12.
|
5.6
|
Notice
of prepayment; reduction of repayment
instalments
|
No
prepayment may be effected under clause 5.2 unless the Borrower shall have
given
the Bank at least fourteen (14) days notice of its intention to make such
prepayment. Every notice of prepayment shall be effective only on actual receipt
by the Bank, shall be irrevocable, shall specify the amount to be prepaid and
shall oblige the Borrower to make such prepayment on the date specified. No
amount prepaid may be reborrowed and any amount prepaid pursuant to clause
5.2
or clause 9.2.1 shall be applied in reducing the repayment instalments under
clause 5.1 in direct order of their due dates for payment. The Borrower may
not
prepay the Loan or any part thereof save as expressly provided in this
Agreement.
|
5.7
|
Currency
amounts repayable
|
Each
repayment or prepayment of any Tranche and/or the Loan under this Agreement
shall be made in the currency in which such Tranche and/or the Loan was
outstanding immediately prior to such repayment or prepayment and shall be
in an
amount equal to the Equivalent Amount in such currency.
|
6
|
Commitment
commission, fees and
expenses
|
|
6.1
|
Fees
|
The
Borrower shall pay to the Bank:
|
6.1.1
|
A
fee of Forty five thousand Dollars ($45,000) on the Drawdown
Date;
|
|
6.1.2
|
commitment
commission computed from 8 June 2007 payable on the earlier of (i)
the
Drawdown Date and (ii) the Termination Date, at the rate of 0.15%
per
annum on the daily undrawn amount of Commitment and payable on the
date of
this Agreement and at three (3) monthly intervals (in arrears) thereafter;
and
|
|
6.1.3
|
The
fee referred to in clause 6.1.1 and the commitment commission referred
to
in clause shall be payable in full by the Borrower to the Bank whether
or
not any part of the Commitment is ever advanced and shall, in either
case,
be non-refundable.
|
|
6.2
|
Expenses
|
The
Borrower shall pay to the Bank on a full indemnity basis on demand all expenses
(including legal, printing and out-of-pocket expenses) incurred by the
Bank:
|
6.2.1
|
in
connection with the negotiation, preparation, execution and, where
relevant, registration of the Security Documents and of any amendment
or
extension of or the granting of any waiver or consent under, any
of the
Security Documents (including, for the avoidance of doubt, the Master
Swap
Agreement); and
|
|
6.2.2
|
in
contemplation of, or otherwise in connection with, the enforcement
of, or
preservation of any rights under, any of the Security Documents (including
for the avoidance of doubt the Master Swap Agreement), or otherwise
in
respect of the moneys owing under any of the Security Documents
(including, for the avoidance of doubt, expenses incurred in connection
with the Bank obtaining any further insurance opinion(s) in respect
of the
Insurances for the Ship as may be required by the Bank during the
Security
Period (as such term is defined in the Deed of Covenant)), together
with
interest at the rate referred to in clause 3.4 from the
|
17
date
on
which such expenses were incurred to the date of payment (as well after as
before judgment).
|
6.3
|
Value
Added Tax
|
All
fees
and expenses payable pursuant to this clause 6 shall be paid together with
value
added tax or any similar tax (if any) properly chargeable thereon. Any value
added tax chargeable in respect of any services supplied by the Bank under
this
Agreement shall, on delivery of the value added tax invoice, be paid in addition
to any sum agreed to be paid hereunder.
|
6.4
|
Stamp
and other duties
|
The
Borrower shall pay all stamp, documentary, registration or other like duties
or
taxes (including any duties or taxes payable by the Bank) imposed on or in
connection with any of the Management Agreement, the Security Documents
(including, for the avoidance of doubt, the Master Swap Agreement or the Loan
and shall indemnify the Bank against any liability arising by reason of any
delay or omission by the Borrower to pay such duties or taxes.
|
7
|
Payments
and taxes; accounts and
calculations
|
|
7.1
|
No
set-off or counterclaim
|
All
payments to be made by the Borrower under any of the Security Documents shall
be
made in full, without any set-off or counterclaim whatsoever and, subject as
provided in clause 7.6, free and clear of any deductions or withholdings, in
Dollars or the relevant Optional Currency on the due date (for value on the
day
on which payment is due) to such account at such bank in such place as the
Bank
may from time to time specify for this purpose.
|
7.2
|
Payment
by the Bank
|
All
sums
to be advanced on the Drawdown Date by the Bank to the Borrower under this
Agreement shall be remitted in Dollars or the relevant Optional Currency to
the
account of the Borrower specified in the Drawdown Notice.
|
7.3
|
Non-Banking
Days
|
When
any
payment under any of the Security Documents would otherwise be due on a day
which is not a Banking Day, the due date for payment shall be extended to the
next following Banking Day unless such Banking Day falls in the next calendar
month in which case payment shall be made on the immediately preceding Banking
Day.
|
7.4
|
Calculations
|
All
payments of interest in respect of the Loan and/or a Tranche shall be made
in
the currency in which the Loan and/or such Tranche is outstanding at the
relevant time. All interest and other payments of an annual nature under any
of
the Security Documents shall accrue from day to day and be calculated on the
basis of actual days elapsed and a 360 days year except for any part of the
Loan
denominated in Sterling, where a 365 days year shall apply.
|
7.5
|
Certificates
conclusive
|
Any
certificate or determination of the Bank as to any rate of interest or any
other
amount pursuant to and for the purposes of any of the Security Documents shall,
in the absence of manifest error, be conclusive and binding on the
Borrower.
18
|
7.6
|
Grossing-up
for Taxes
|
If
at any
time the Borrower is required to make any deduction or withholding in respect
of
Taxes from any payment due under any of the Borrower’s Security Documents, the
sum due from the Borrower in respect of such payment shall be increased to
the
extent necessary to ensure that, after the making of such deduction or
withholding, the Bank receives on the due date for such payment (and retains,
free from any liability in respect of such deduction or withholding), a net
sum
equal to the sum which it would have received had no such deduction or
withholding been required to be made and the Borrower shall indemnify the Bank
against any losses or costs incurred by it by reason of any failure of the
Borrower to make any such deduction or withholding or by reason of any increased
payment not being made on the due date for such payment. The Borrower shall
promptly deliver to the Bank any receipts, certificates or other proof
evidencing the amounts (if any) paid or payable in respect of any deduction
or
withholding as aforesaid.
|
7.7
|
Loan
account
|
The
Bank
shall maintain, in accordance with its usual practice, an account (which shall
be the “Account Current” referred to in the Mortgage) evidencing the amounts
from time to time lent by, owing to and paid to it under the Security Documents.
Such account shall, in the absence of manifest error, be conclusive as to the
amount from time to time owing by the Borrower under the Security
Documents.
|
8
|
Representations
and warranties
|
| 8.1 |
Continuing
representations and
warranties
|
The
Borrower represents and warrants to the Bank that:
|
8.1.1
|
Due
incorporation
|
the
Borrower and each of the other Security Parties are duly incorporated and
validly existing in good standing, in the case of the Borrower, under the laws
of the Republic of Liberia as a Liberian Corporation and in the case of the
Manager, under the laws of the Republic of Panama, as a limited liability
company, and in the case of each of the other Security Parties, under the laws
of their respective countries of incorporation as limited liability companies
having power to carry on their respective businesses as they are now being
conducted and to own their respective property and other assets;
|
8.1.2
|
Corporate
power
|
the
Borrower has power to execute, deliver and perform its obligations under the
Management Agreement and the Borrower’s Security Documents and to borrow the
Commitment and each of the other Security Parties has power to execute and
deliver and perform its obligations under the Security Documents to which it
is
or is to be a party; all necessary corporate, shareholder and other action
has
been taken to authorise the execution, delivery and performance of the same
and
no limitation on the powers of the Borrower to borrow will be exceeded as a
result of borrowing the Loan;
|
8.1.3
|
Binding
obligations
|
the
Security Documents constitute or will, when executed, constitute valid and
legally binding obligations of the relevant Security Parties enforceable in
accordance with their respective terms;
19
|
8.1.4
|
No
conflict with other obligations
|
the
execution and delivery of, the performance of its obligations under, and
compliance with the provisions of, the Management Agreement and the Security
Documents by the relevant Security Parties will not (i) contravene any existing
applicable law, statute, rule or regulation or any judgment, decree or permit
to
which the Borrower or any other Security Party is subject, (ii) conflict with,
or result in any breach of any of the terms of, or constitute a default under,
any agreement or other instrument to which the Borrower or any other Security
Party is a party or is subject or by which it or any of its property is bound,
(iii) contravene or conflict with any provision of the constitutional documents
of the Borrower or any other Security Party or (iv) result in the creation
or
imposition of or oblige the Borrower or any other Security Party to create
any
Encumbrance (other than a Permitted Encumbrance) on any of the undertakings,
assets, rights or revenues of the Borrower or any other Security
Party;
|
8.1.5
|
No
litigation
|
no
litigation, arbitration or administrative proceeding is taking place, pending
or, to the knowledge of the officers of the Borrower, threatened against the
Borrower or any other Security Party which could have a material adverse effect
on the business, assets or financial condition of the Borrower or any other
Security Party;
|
8.1.6
|
No
filings required
|
save
for
the registration of the Mortgage and the Deed of Covenant in the Ships Registry
of the Republic of Cyprus, it is not necessary to ensure the legality, validity,
enforceability or admissibility in evidence of the Management Agreement or
any
of the Security Documents that they or any other instrument be notarised, filed,
recorded, registered or enrolled in any court, public office or elsewhere in
any
Relevant Jurisdiction or that any stamp, registration or similar tax or charge
be paid in any Relevant Jurisdiction on or in relation to the Management
Agreement and the Security Documents and each of the Management Agreement and
the Security Documents is in proper form for its enforcement in the courts
of
each Relevant Jurisdiction;
|
8.1.7
|
Choice
of law
|
the
choice of English law to govern the Management Agreement and the Security
Documents (other than the Mortgage and the Deed of Covenant) and the choice
of
Cypriot law to govern the Mortgage and the Deed of Covenant and the submissions
by the Security Parties to the non-exclusive jurisdiction of the English courts
are valid and binding;
|
8.1.8
|
No
immunity
|
neither
the Borrower nor any other Security Party nor any of their respective assets
is
entitled to immunity on the grounds of sovereignty or otherwise from any legal
action or proceeding (which shall include, without limitation, suit, attachment
prior to judgement, execution or other enforcement); and
|
8.1.9
|
Consents
obtained
|
every
consent, authorisation, licence or approval of, or registration with or
declaration to, governmental or public bodies or authorities or courts required
by any Security Party to authorise, or required by any Security Party in
connection with, the execution, delivery, validity, enforceability or
admissibility in evidence of the Management Agreement and each of the Security
Documents or the performance by each Security Party of its obligations under
the
Security Documents has been obtained or made and is in full force and effect
and
there
20
has
been
no default in the observance of any of the conditions or restrictions (if any)
imposed in, or in connection with, any of the same.
|
8.2
|
Initial
representations and
warranties
|
The
Borrower further represents and warrants to the Bank that:
|
8.2.1
|
Pari
passu
|
the
obligations of the Borrower under this Agreement and the Master Swap Agreement
are direct, general and unconditional obligations of the Borrower and rank
at
least pari passu with all other present and future unsecured and unsubordinated
Indebtedness of the Borrower;
|
8.2.2
|
No
default under other Indebtedness
|
neither
the Borrower nor any other Security Party is (nor would with the giving of
notice or lapse of time or the satisfaction of any other condition or
combination thereof be) in breach of or in default under any agreement relating
to Indebtedness to which it is a party or by which it may be bound;
|
8.2.3
|
Information
|
the
information, exhibits and reports furnished by any Security Party to the Bank
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; there are no other facts the omission of
which
would make any fact or statement therein misleading;
|
8.2.4
|
No
withholding Taxes
|
no
Taxes
are imposed by withholding or otherwise on any payment to be made by any
Security Party under the Management Agreement or the Security Documents or
are
imposed on or by virtue of the execution or delivery by the Security Parties
of
the Management Agreement or the Security Documents or any other document or
instrument to be executed or delivered under any of the Security
Documents;
|
8.2.5
|
No
Default
|
no
Default has occurred and is continuing;
|
8.2.6
|
the
Ship
|
the
Ship
will on the Drawdown Date be:
| (a) |
in
the absolute ownership of the Borrower who will on and after the
Drawdown
Date be the sole, legal and beneficial owner of the
Ship;
|
| (b) |
registered
in the name of the Borrower through the Registry as a ship under
the laws
and flag of the Flag State;
|
| (c) |
operationally
seaworthy and in every way fit for service;
and
|
| (d) |
classed
with the Classification free of all requirements and recommendations
of
the Classification Society;
|
21
|
8.2.7
|
Ship’s
employment
|
save
as
already disclosed to the Bank in writing and acknowledged by the Bank, the
Ship
will not on or before the Drawdown Date be subject to any charter or contract
or
to any agreement to enter into any charter or contract which, if entered into
after the date of the Deed of Covenant would have required the consent of the
Bank and on or before the Drawdown Date there will not be any agreement or
arrangement whereby the Earnings (as defined in the General Assignment) may
be
shared with any other person;
|
8.2.8
|
Freedom
from Encumbrances
|
neither
the Ship, nor her Earnings, Insurances or Requisition Compensation (each as
defined in the General Assignment) nor the Cash Collateral Account nor any
other
properties or rights which are, or are to be, the subject of any of the Security
Documents nor any part thereof will be, on the Drawdown Date, subject to any
Encumbrance;
|
8.2.9
|
Compliance
with Environmental Laws and
Approvals
|
except
as
may already have been disclosed by the Borrower in writing to, and acknowledged
in writing by, the Bank:
| (a) |
the
Borrower and to the best of the Borrower’s knowledge and belief (having
made due enquiry) its Environmental Affiliates have complied with
the
provisions of all Environmental
Laws;
|
| (b) |
the
Borrower and to the best of the Borrower’s knowledge and belief (having
made due enquiry) its Environmental Affiliates have obtained all
Environmental Approvals and are in compliance with all such Environmental
Approvals; and
|
| (c) |
neither
the Borrower nor to the best of the Borrower’s knowledge and belief
(having made due enquiry) any of its Environmental Affiliates has
received
notice of any Environmental Claim that the Borrower or any such
Environmental Affiliate is not in compliance with any Environmental
Law or
any Environmental Approval;
|
|
8.2.10
|
No
Environmental Claims
|
except
as
may already have been disclosed by the Borrower in writing to, and acknowledged
in writing by, the Bank, there is no Environmental Claim pending or, to the
best
of the Borrower’s knowledge and belief, threatened against the Borrower or the
Ship or to the best of the Borrower’s knowledge and belief (having made due
enquiry) any of its Environmental Affiliates;
|
8.2.11
|
No
potential Environmental Claims
|
except
as
may already have been disclosed by the Borrower in writing to, and acknowledged
in writing by, the Bank, there has been no emission, spill, release or discharge
of a Pollutant from the Ship which could give rise to an Environmental
Claim;
|
8.2.12
|
No
material adverse change
|
there
has
been no material adverse change in the financial position of the Borrower from
that described by the Borrower to the Bank in the negotiation of this Agreement;
and
|
8.2.13
|
Copies
true and complete
|
the
copy
of the Management Agreement delivered or to be delivered to the Bank pursuant
to
clause 10.1, is or will when delivered be, a true and complete copy of such
document; such
22
document
will when delivered constitute valid and binding obligations of the parties
thereto enforceable in accordance with its terms and there will have been no
amendments or variations thereof or defaults thereunder.
|
8.3
|
Repetition
of representations and
warranties
|
On
and as
of the Drawdown Date and (except in relation to the representations and
warranties in clause 8.2) on each Interest Payment Date the Borrower shall
be
deemed to repeat the representations and warranties in clauses 8.1 and 8.2
as if
made with reference to the facts and circumstances existing on such
day.
|
9
|
Undertakings
|
|
9.1
|
General
|
The
Borrower undertakes with the Bank that, from the date of this Agreement and
so
long as any moneys are owing under any of the Security Documents and/or the
Master Swap Agreement and while all or any part of the Commitment remains
outstanding, it will:
|
9.1.1
|
Notice
of Default
|
promptly
inform the Bank of any occurrence of which it becomes aware which might
adversely affect the ability of any Security Party to perform its obligations
under any of the Security Documents and, without limiting the generality of
the
foregoing, will inform the Bank of any Default forthwith upon becoming aware
thereof and will from time to time, if so requested by the Bank, confirm to
the
Bank in writing that, save as otherwise stated in such confirmation, no Default
has occurred and is continuing;
|
9.1.2
|
Consents
and licences
|
without
prejudice to clauses 8.1 and 10, obtain or cause to be obtained, maintain in
full force and effect and comply in all material respects with the conditions
and restrictions (if any) imposed in, or in connection with, every consent,
authorisation, licence or approval of governmental or public bodies or
authorities or courts and do, or cause to be done, all other acts and things
which may from time to time be necessary or desirable under applicable law
for
the continued due performance of all the obligations of the Security Parties
under each of the Security Documents;
|
9.1.3
|
Use
of proceeds
|
use
the
Loan exclusively for the purpose specified in clause 1.1;
|
9.1.4
|
Pari
passu
|
ensure
that its obligations under this Agreement and the Master Swap Agreement shall,
without prejudice to the provisions of clause 9.3, at all times rank at least
pari passu with all its other present and future unsecured and unsubordinated
Indebtedness with the exception of any obligations which are mandatorily
preferred by law and not by contract;
|
9.1.5
|
Financial
statements
|
provide
the Bank at the end of each calendar year with unaudited management accounts
for
the Ship showing the income and expenditure of the Ship for such calendar year,
the first such management accounts to be provided at the end of the calendar
year 2007;
23
|
9.1.6
|
Delivery
of reports
|
deliver
to the Bank as many copies as the Bank may reasonably require of every report,
circular, notice or like document issued by the Borrower or the Manager to
their
respective shareholders or creditors generally;
|
9.1.7
|
Provision
of further information
|
provide
the Bank with such financial and other information concerning the Borrower
and
its affairs as the Bank may from time to time reasonably require;
|
9.1.8
|
Obligations
under Security Documents
|
duly
and
punctually perform each of the obligations expressed to be assumed by it under
the Borrower’s Security Documents;
|
9.1.9
|
Compliance
with Code
|
procure
that the Manager and/or any Operator complies with and ensures that the Ship
complies with the requirements of the Code, including (but not limited to)
the
maintenance and renewal of valid certificates pursuant thereto throughout the
Security Period (as defined in the Deed of Covenant);
|
9.1.10
|
Withdrawal
of DOC and SMC
|
procure
that the Manager and/or any Operator will, immediately inform the Bank if there
is any threatened or actual withdrawal of the Manager’s or Operator’s DOC or the
SMC in respect of the Ship;
|
9.1.11
|
Issuance
of DOC and SMC
|
procure
that the Manager and/or any Operator will, promptly inform the Bank upon the
issuance to the Manager or any Operator of a DOC and to the Ship of an SMC
or
the receipt by the Manager or any Operator of notification that its application
for the same has been refused;
|
9.1.12
|
ISPS
Code compliance
|
and
will
procure that the Manager or any Operator will, with effect on and from the
date
of this Agreement:
(a) maintain
at all times a valid and current ISSC in respect of the Ship;
(b) immediately
notify the Bank in writing of any actual or threatened withdrawal, suspension,
cancellation or modification of the ISSC in respect of the Ship;
and
(c) procure
that the Ship will comply at all times with the ISPS Code; and
|
9.1.13
|
Know
your customer information
|
deliver
to the Bank such documents and evidence as the Bank shall from time to time
require relating to the verification of identity and knowledge of the Bank’s
customers and the compliance by the Bank with all necessary “know your customer”
or similar checks, always on the basis of applicable laws and regulations or
the
Bank’s own internal guidelines, in each case as such laws, regulations or
internal guidelines apply from time to time.
24
|
9.2
|
Security
value maintenance
|
|
9.2.1
|
Security
shortfall
|
If
at any
time the Security Value shall be less than the Security Requirement, the Bank
may give notice to the Borrower requiring that such deficiency be remedied
and
then the Borrower shall (unless the Ship has become a Total Loss) within a
period of fifteen (15) days of the date of receipt by the Borrower of the Bank’s
said notice either:
| (a) |
prepay
such sum in Dollars as will result in the Security Requirement after
such
prepayment (taking into account any other repayment of the Loan made
between the date of the notice and the date of such prepayment) being
equal to the Security Value; or
|
| (b) |
constitute
to the satisfaction of the Bank such further security for the Loan
as
shall be acceptable to the Bank having a value for security purposes
(as
determined by the Bank in its absolute discretion) at the date upon
which
such further security shall be constituted which, when added to the
Security Value, shall not be less than the Security Requirement as
at such
date; or
|
| (c) |
pay
such additional amount to the credit of the Cash Collateral Account
as
will result in the Security Value after such payment being not less
than
the Security Requirement as at the date of such
payment.
|
Clause
5.6 shall apply to prepayments under clause 9.2.1(a).
|
9.2.2
|
Valuation
of Ship
|
The
Ship
shall at the discretion of the Bank from time to time, for the purposes of
this
clause 9.2, be valued in Dollars by an independent firm of shipbrokers appointed
by the Bank in its sole discretion (each such valuation to be made without,
unless required by the Bank, physical inspection and on the basis of a sale
for
prompt delivery for cash at arms length on normal commercial terms as between
a
willing buyer and a willing seller without taking into account the benefit
of
any charterparty or other engagement concerning the Ship). Such valuation shall
constitute the value of the Ship for the purposes of this clause
9.2.
The
value
of the Ship determined in accordance with the provisions of this clause 9.2
shall be binding upon the parties hereto until such time as any further such
valuations shall be obtained.
|
9.2.3
|
Information
|
The
Borrower undertakes to the Bank to supply to the Bank and to any such
shipbrokers such information concerning the Ship and its condition as such
shipbrokers may reasonably require for the purpose of making any such
valuation.
|
9.2.4
|
Costs
|
All
costs
in connection with the Bank obtaining any valuation of the Ship twice per
calendar year and any valuation either of any additional security for the
purposes of ascertaining the Security Value at any time or necessitated by
the
Borrower electing to constitute additional security pursuant to clause 9.2.1(b)
shall be borne by the Borrower. Also the cost of additional valuations of the
Ship shall be for the account of the Borrower, whilst an Event of Default has
occurred and is continuing.
25
|
9.2.5
|
Valuation
of additional security
|
For
the
purpose of this clause 9.2, the value of any additional security provided or
to
be provided to the Bank shall be determined by the Bank in its absolute
discretion without any necessity for the Bank assigning any reason
thereto.
|
9.2.6
|
Documents
and evidence
|
In
connection with any additional security provided in accordance with this clause
9.2, the Bank shall be entitled to receive such evidence and documents of the
kind referred to in schedule 2 as may in the Bank’s opinion be appropriate and
such favourable legal opinions as the Bank shall in its absolute discretion
require.
|
9.2.7
|
Security
release
|
If
the
Security Value shall at any time during the Security Period (as such term is
defined in the Deed of Covenant) exceeds one hundred and four per cent (104%)
of
the Security Requirement and the Borrower shall previously have provided further
security to the Bank pursuant to clauses 9.2.1(b) or 9.2.1(c) the Bank shall,
as
soon as reasonably practicable after receiving a written request from the
Borrower to do so, release any such further security specified by the Borrower
provided that the Bank is satisfied that, immediately following such release,
the Security Value will be equal to or in excess of the Security
Requirement.
|
9.3
|
Negative
undertakings
|
The
Borrower undertakes with the Bank that, from the date of this Agreement and
so
long as any moneys are owing under the Security Documents and while all or
any
part of the Commitment remains outstanding, it will not, without the prior
written consent of the Bank:
|
9.3.1
|
Negative
pledge
|
permit
any Encumbrance (other than a Permitted Encumbrance) to subsist, arise or be
created or extended over all or any part of its present or future undertakings,
assets, rights or revenues (including, but not limited to the Borrower’s rights
against the Bank under any Transaction and/or the Master Swap Agreement or
all
or part of the Borrower’s interest in any amounts payable to the Borrower by the
Bank under such Transaction and/or the Master Swap Agreement) to secure or
prefer any present or future Indebtedness or other liability or obligation
of
the Borrower or any other person;
|
9.3.2
|
No
merger
|
merge
or
consolidate with any other person;
|
9.3.3
|
Disposals
|
sell,
transfer, abandon, lend or otherwise dispose of or cease to exercise direct
control over any part (being either alone or when aggregated with all other
disposals falling to be taken into account pursuant to this clause 9.3.3
material in the opinion of the Bank in relation to the undertakings, assets,
rights and revenues of the Borrower) of its present or future undertaking,
assets, rights or revenues (otherwise than, save for any asset which is subject
to the Security Documents, by transfers, sales or disposals for full
consideration in the ordinary course of trading) whether by one or a series
of
transactions related or not;
26
|
9.3.4
|
Other
business
|
undertake
any business other than the ownership and operation of the Ship and the
chartering of the Ship to third parties;
|
9.3.5
|
Acquisitions
|
acquire
any further assets other than the Ship and rights arising under contracts
entered into by or on behalf of the Borrower in the ordinary course of its
business of owning, operating and chartering the Ship;
|
9.3.6
|
Other
obligations
|
incur
any
obligations except for obligations arising under the Management Agreement or
the
Security Documents or contracts entered into in the ordinary course of its
business of owning, operating and chartering the Ship;
|
9.3.7
|
No
borrowing
|
incur
any
Borrowed Money except for Borrowed Money pursuant to the Security
Documents;
|
9.3.8
|
Repayment
of borrowings
|
repay
the
principal of, or pay interest on or any other sum in connection with any of
its
Borrowed Money except for Borrowed Money pursuant to the Security
Documents;
|
9.3.9
|
Guarantees
|
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 Ship is entered, guarantees required to procure
the
release of such Ship from any arrest, detention, attachment or levy or
guarantees or undertakings required for the salvage of the Ship;
|
9.3.10
|
Loans
|
make
any
loans or grant any credit (save for normal trade credit in the ordinary course
of business) to any person or agree to do so,
|
9.3.11
|
Sureties
|
permit
any Indebtedness of the Borrower to any person (other than the Bank) to be
guaranteed by any person (save 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 Ship is entered, guarantees required to procure
the
release of the Ship from any arrest, detention, attachment or levy or guarantees
or undertakings required for the salvage of the Ship);
|
9.3.12
|
Share
capital and distribution
|
purchase
or otherwise acquire for value any of its shares or distribute any of its
present or future assets, undertakings, rights or revenues to any of its
shareholders provided however that, notwithstanding the provisions of this
clause 9.3.12, the Borrower shall have the right to declare or pay cash
dividends as long as no Event of Default has occurred and is continuing nor
will
an Event of Default occur because of such declaration or payment;
27
|
9.3.13
|
Change
of Ownership
|
permit
any change in the legal ownership of the shares in the Borrower from that
existing at the date of this Agreement;
|
9.3.14
|
Subsidiaries
|
form
or
acquire any Subsidiaries; and
|
9.3.15
|
Manager
|
appoint
any manager of the Ship other than the Manager.
|
9.4
|
Cash
Collateral Account
Undertaking
|
Upon
the
request of the Bank, the Borrower undertakes to immediately open the Cash
Collateral Account and, at its expense, execute such documentation as may be
required by the Bank in order to charge the Cash Collateral Account and all
monies from time to time standing to the credit of the Cash Collateral Account
including any interest from time to time accrued and accruing thereon (whether
or not credited thereto) to the Bank as security for the Borrower’s obligations
under the Security Documents.
|
10
|
Conditions
|
|
10.1
|
Documents
and evidence
|
The
obligation of the Bank to make the Commitment available shall be subject to
the
condition that:
|
10.1.1
|
the
Bank, or its duly authorised representative, shall have received,
not
later than two (2) Banking Days before the day on which the Drawdown
Notice for the Loan is given, the documents and evidence specified
in Part
1 of schedule 2 in form and substance satisfactory to the Bank;
and
|
|
10.1.2
|
the
Bank, or its duly authorised representative, shall have received,
on or
prior to the Drawdown Date, the documents and evidence specified
in Part 2
of schedule 2 in form and substance satisfactory to the
Bank.
|
|
10.2
|
General
conditions precedent
|
The
obligation of the Bank to make the Loan shall be subject to the further
condition that, at the time of the giving of the Drawdown Notice , and at the
time of the making of the Loan:
|
10.2.1
|
the
representations and warranties contained in clauses 8.1 and 8.2 are
true
and correct on and as of each such time as if each was made with
respect
to the facts and circumstances existing at such time;
and
|
|
10.2.2
|
no
Default shall have occurred and be continuing or would result from
the
making of the Loan.
|
|
10.3
|
Waiver
of conditions precedent
|
The
conditions specified in this clause 10 are inserted solely for the benefit
of
the Bank and may be waived by the Bank in whole or in part and with or without
conditions.
28
|
10.4
|
Further
conditions precedent
|
Not
later
than five (5) Banking Days prior to the Drawdown Date and not later than five
(5) Banking Days prior to each Interest Payment Date, the Bank may request
and
the Borrower shall, not later than two (2) Banking Days prior to such date,
deliver to the Bank on such request further favourable certificates and/or
opinions as to any or all of the matters which are the subject of clauses 8,
9,
10 and 11;
|
11
|
Events
of Default
|
|
11.1
|
Events
|
There
shall be an Event of Default if:
|
11.1.1
|
Non-payment:
any Security Party fails to pay any sum payable by it under any of
the
Security Documents at the time, in the currency and in the manner
stipulated in the Security Documents (and so that, for this purpose,
sums
payable on demand shall be treated as having been paid at the stipulated
time if paid within three (3) Banking Days of demand);
or
|
|
11.1.2
|
Master
Swap Agreement:
(i) an Event of Default or Potential Event of Default (in each case
as
defined in the Master Swap Agreement) has occurred and is continuing
under
the Master Swap Agreement or (ii) an Early Termination Date (as defined
in
the Master Swap Agreement) has occurred or been or become capable
of being
effectively designated under the Master Swap Agreement or (iii) a
person
entitled to do so gives notice of an Early Termination Date under
section
6(b)(iv) of the Master Swap Agreement or (iv) the Master Swap Agreement
is
terminated, cancelled, suspended, rescinded or revoked or otherwise
ceases
to remain in full force and effect for any reason;
or
|
|
11.1.3
|
Breach
of Insurance and certain other obligations:
the Borrower fails to obtain and/or maintain the Insurances (as defined
in, and in accordance with the requirements of, the Security Documents)
or
if any insurer in respect of such Insurances cancels the Insurances
or
disclaims liability by reason, in either case, of mis-statement in
any
proposal for the Insurances or for any other failure or default on
the
part of the Borrower or any other person or the Borrower commits
any
breach of or omits to observe any of the obligations or undertakings
expressed to be assumed by it under clauses 9.2, 9.3 or 9.4;
or
|
|
11.1.4
|
Breach
of other obligations:
any Security Party commits any breach of or omits to observe any
of its
obligations or undertakings expressed to be assumed by it under any
of the
Security Documents (other than those referred to in clauses 11.1.1,
11.1.2
and 11.1.3 above) and, in respect of any such breach or omission
which in
the opinion of the Bank is capable of remedy, such action as the
Bank may
require shall not have been taken within fourteen (14) days of the
Bank
notifying the relevant Security Party of such default and of such
required
action; or
|
|
11.1.5
|
Misrepresentation:
any representation or warranty made or deemed to be made or repeated
by or
in respect of any Security Party in or pursuant to any of the Security
Documents or in any notice, certificate or statement referred to
in or
delivered under any of the Security Documents is or proves to have
been
incorrect or misleading in any material respect;
or
|
|
11.1.6
|
Cross-default:
any Indebtedness of the Borrower is not paid when due or any Indebtedness
of the Borrower becomes (whether by declaration or automatically
in
accordance with the relevant agreement or instrument constituting
the
same) due and payable prior to the date when it would otherwise have
become due (unless as a result of the exercise by the Borrower of
a
voluntary right of prepayment), or any creditor of the Borrower becomes
entitled to declare any such Indebtedness due and payable or any
facility
or commitment available to the Borrower relating to Indebtedness
is
withdrawn, suspended or cancelled by reason of any
|
29
default
(however described) of the person concerned unless the Borrower shall have
satisfied the Bank that such withdrawal, suspension or cancellation will
not
affect or prejudice in any way the Borrower’s ability to pay its debts as they
fall due and fund its commitments, or any guarantee given by any Security
Party
in respect of Indebtedness is not honoured when due and called upon;
or
|
11.1.7
|
Legal
process:
any judgment or order made against the Borrower is not stayed or
complied
with within seven (7) days or a creditor attaches or takes possession
of,
or a distress, execution, sequestration or other process is levied
or
enforced upon or sued out against, any of the undertakings, assets,
rights
or revenues of the Borrower and is not discharged within seven (7)
days;
or
|
|
11.1.8
|
Insolvency:
the Borrower is unable or admits inability to pay its debts as they
fall
due; suspends making payments on any of its debts or announces an
intention to do so; becomes insolvent; has assets the value of which
is
less than the value of its liabilities (taking into account contingent
and
prospective liabilities); or suffers the declaration of a moratorium
in
respect of any of its Indebtedness;
or
|
|
11.1.9
|
Reduction
or loss of capital:
a
meeting is convened by the Borrower for the purpose of passing any
resolution to purchase, reduce or redeem any of its shares;
or
|
|
11.1.10
|
Winding
up:
any corporate action, legal proceedings or other procedure or step
is
taken for the purpose of winding up or an order is made or resolution
passed for the winding up of the Borrower or a notice is issued convening
a meeting for the purpose of passing any such resolution;
or
|
|
11.1.11
|
Administration:
any petition is presented, notice is given or other step is taken
for the
purpose of the appointment of an administrator of the Borrower or
the Bank
believes that any such petition or other step is imminent or an
administration order is made in relation to the Borrower;
or
|
|
11.1.12
|
Appointment
of receivers and managers:
any administrative or other receiver is appointed of the Borrower
or any
part of its assets and/or undertaking or any other steps are taken
to
enforce any Encumbrance over all or any part of the assets of the
Borrower; or
|
|
11.1.13
|
Compositions:
any corporate action, legal proceedings or other procedures or steps
are
taken, or negotiations commenced, by the Borrower or by any of its
creditors with a view to the general readjustment or rescheduling
of all
or part of its indebtedness or to proposing any kind of composition,
compromise or arrangement involving such company and any of its creditors;
or
|
|
11.1.14
|
Analogous
proceedings:
there occurs, in relation to the Borrower in any country or territory
in
which it carries on business or to the jurisdiction of whose courts
any
part of its assets is subject, any event which, in the reasonable
opinion
of the Bank, appears in that country or territory to correspond with,
or
have an effect equivalent or similar to, any of those mentioned in
clauses
11.1.7 to 11.1.13 (inclusive) or any Security Party otherwise becomes
subject, in any such country or territory, to the operation of any
law
relating to insolvency, bankruptcy or liquidation;
or
|
|
11.1.15
|
Cessation
of business:
the Borrower suspends or ceases or threatens to suspend or cease
to carry
on its business; or
|
|
11.1.16
|
Seizure:
all or a material part of the undertaking, assets, rights or revenues
of,
or shares or other ownership interests in the Borrower are seized,
nationalised, expropriated or compulsorily acquired by or under the
authority of any government; or
|
30
|
11.1.17
|
Invalidity:
any of the Security Documents shall at any time and for any reason
become
invalid or unenforceable or otherwise cease to remain in full force
and
effect, or if the validity or enforceability of any of the Security
Documents shall at any time and for any reason be contested by any
Security Party which is a party thereto, or if any such Security
Party
shall deny that it has any, or any further, liability thereunder;
or
|
|
11.1.18
|
Unlawfulness:
it becomes impossible or unlawful at any time for any Security Party,
to
fulfil any of the covenants and obligations expressed to be assumed
by it
in any of the Security Documents or for the Bank to exercise the
rights or
any of them vested in it under any of the Security Documents or otherwise;
or
|
|
11.1.19
|
Repudiation:
any Security Party repudiates any of the Security Documents or does
or
causes or permits to be done any act or thing evidencing an intention
to
repudiate any of the Security Documents;
or
|
|
11.1.20
|
Encumbrances
enforceable:
any Encumbrance (other than Permitted Liens) in respect of any of
the
property (or part thereof) which is the subject of any of the Security
Documents becomes enforceable; or
|
|
11.1.21
|
Material
adverse change:
there occurs, in the opinion of the Bank, a material adverse change
in the
financial condition of the Borrower by reference to the financial
position
of the Borrower as described by the Borrower to the Bank in the
negotiation of this Agreement; or
|
|
11.1.22
|
Arrest:
the Ship is arrested, confiscated, seized, taken in execution, impounded,
forfeited, detained in exercise or purported exercise of any possessory
lien or other claim or otherwise taken from the possession of the
Borrower
and the Borrower shall fail to procure the release of the Ship within
a
period of fourteen (14) days thereafter;
or
|
|
11.1.23
|
Registration:
the registration of the Ship under the laws and flag of the Flag
State is
cancelled or terminated without the prior written consent of the
Bank;
or
|
|
11.1.24
|
Unrest:
the Flag State becomes involved in hostilities or civil war or there
is a
seizure of power in the Flag State by unconstitutional means if,
in any
such case, such event could in the opinion of the Bank reasonably
be
expected to have a material adverse effect on the security constituted
by
any of the Security Documents; or
|
|
11.1.25
|
Environment:
the Borrower and/or any of its Environmental Affiliates fails to
comply
with any Environmental Law or any Environmental Approval or the Ship
is
involved in any incident which gives rise or may give rise to an
Environmental Claim if, in any such case, such non-compliance or
incident
or the consequences thereof could, in the opinion of the Bank, reasonably
be expected to have a material adverse effect on the business, assets,
operations, property or financial condition of the Borrower or any
other
Security Party or on the security constituted by any of the Security
Documents; or
|
|
11.1.26
|
P&I:
the Borrower or any other person fails or omits to comply with any
requirements of the protection and indemnity association or other
insurer
with which the Ship is entered for insurance or insured against protection
and indemnity risks (including oil pollution risks) to the effect
that any
cover (including, without limitation, any cover in respect of liability
for Environmental Claims arising in jurisdictions where the Ship
operates
or trades) is or may be liable to cancellation, qualification or
exclusion
at any time; or
|
|
11.1.27
|
Ownership:
there is any change in the legal ownership of the shares in the Borrower
from that existing at the date of this Agreement;
or
|
31
|
11.1.28
|
Material
events:
any other event occurs or circumstance arises which, in the opinion
of the
Bank, is likely materially and adversely to affect either (i) the
ability
of any Security Party to perform all or any of its obligations under
or
otherwise to comply with the terms of any of the Security Documents
(including, for the avoidance of doubt, the Master Swap Agreement)
or (ii)
the security created by any of the Security
Documents.
|
|
11.2
|
Acceleration
|
The
Bank
may, without prejudice to any other rights of the Bank, at any time after the
happening of an Event of Default so long as the same is continuing by notice
to
the Borrower declare that:
|
11.2.1
|
the
obligation of the Bank to make the Commitment available shall be
terminated, whereupon the Commitment shall be reduced to zero forthwith;
and/or
|
|
11.2.2
|
the
Loan and all interest and commitment commission accrued and all other
sums
payable under the Security Documents have become due and payable,
whereupon the same shall, immediately or in accordance with the terms
of
such notice, become due and
payable.
|
|
11.3
|
Demand
basis
|
If,
pursuant to clause 11.2.2, the Bank declares the Loan to be due and payable
on
demand, the Bank may by written notice to the Borrower (a) call for repayment
of
the Loan on such date as may be specified whereupon the Loan shall become due
and payable on the date so specified together with all interest and commitment
commission accrued and all other sums payable under this Agreement or (b)
withdraw such declaration with effect from the date specified in such
notice.
|
12
|
Indemnities
|
|
12.1
|
Miscellaneous
indemnities
|
The
Borrower shall on demand indemnify the Bank, without prejudice to any of the
Bank’s other rights under any of the Security Documents, against any loss
(excluding loss of Margin) or expense which the Bank shall certify as sustained
or incurred by it as a consequence of:
|
12.1.1
|
any
default in payment by the Borrower of any sum under any of the Security
Documents when due;
|
|
12.1.2
|
the
occurrence of any other Event of
Default;
|
|
12.1.3
|
any
prepayment of the Loan or part thereof being made under clauses 5.2,
5.3,
9.2.1 or 13.1, or any other repayment or prepayment of the Loan or
part
thereof being made otherwise than on an Interest Payment Date relating
to
the part of the Loan prepaid or repaid;
or
|
|
12.1.4
|
the
Loan or part thereof not being made for any reason (excluding any
default
by the Bank) after the Drawdown Notice has been
given,
|
including,
in any such case, but not limited to, any loss or expense sustained or incurred
in maintaining or funding the Loan or any part thereof or in liquidating or
re-employing deposits from third parties acquired to effect or maintain the
Loan
or any part thereof.
|
12.2
|
Currency
indemnity
|
If
any
sum due from the Borrower under any of the Security Documents or any order
or
judgment given or made in relation thereto has to be converted from the currency
(the “first
currency”)
in
which the same is payable under the relevant Security Document or under such
order or judgment into another currency (the “second
currency”)
for
the purpose of (a) making or filing a
32
claim
or
proof against the Borrower, (b) obtaining an order or judgment in any court
or
other tribunal or (c) enforcing any order or judgment given or made in relation
to any of the Security Documents, the Borrower shall indemnify and hold harmless
the Bank from and against any loss suffered as a result of any difference
between (i) the rate of exchange used for such purpose to convert the sum in
question from the first currency into the second currency and (ii) the rate
or
rates of exchange at which the Bank may in the ordinary course of business
purchase the first currency with the second currency upon receipt of a sum
paid
to it in satisfaction, in whole or in part, of any such order, judgment, claim
or proof. Any amount due from the Borrower under this clause 12.2 shall be
due
as a separate debt and shall not be affected by judgment being obtained for
any
other sums due under or in respect of any of the Security Documents and the
term
“rate of exchange” includes any premium and costs of exchange payable in
connection with the purchase of the first currency with the second
currency.
|
12.3
|
Environmental
indemnity
|
The
Borrower shall indemnify the Bank on demand and hold the Bank harmless from
and
against all costs, expenses, payments, charges, losses, demands, liabilities,
actions, proceedings (whether civil or criminal), penalties, fines, damages,
judgements, orders, sanctions or other outgoings of whatever nature which may
be
suffered, incurred or paid by, or made or asserted against the Bank at any
time,
whether before or after the repayment in full of principal and interest under
this Agreement, relating to, or arising directly or indirectly in any manner
or
for any cause or reason whatsoever out of an Environmental Claim made or
asserted against the Bank if such Environmental Claim would not have been,
or
been capable of being, made or asserted against the Bank if it had not entered
into any of the Security Documents and/or exercised any of its rights, powers
and discretions thereby conferred and/or performed any of its obligations
thereunder and/or been involved in any of the transactions contemplated by
the
Security Documents.
|
13
|
Unlawfulness
and increased costs
|
|
13.1
|
Unlawfulness
|
If
it is
or becomes contrary to any law or regulation for the Bank to advance the Loan,
or a Tranche, or to, maintain the Commitment or fund the Loan, or a Tranche,
the
Bank shall promptly give notice to the Borrower whereupon (a) the Commitment
shall be reduced to zero and (b) the Borrower shall be obliged to prepay the
Loan either (i) forthwith or (ii) on a future specified date not being earlier
than the latest date permitted by the relevant law or regulation together with
interest and commitment commission accrued to the date of prepayment and all
other sums payable by the Borrower under this Agreement and/or the Master Swap
Agreement;
|
13.2
|
Increased
costs
|
If
the
result of any change in, or in the interpretation or application of, or the
introduction of, any law or any regulation, request or requirement (whether
or
not having the force of law, but, if not having the force of law, with which
the
Bank or, as the case may be, its holding company habitually complies), including
(without limitation) those relating to Taxation, capital adequacy, liquidity,
reserve assets, cash ratio deposits and special deposits or other banking or
monetary controls or requirements which affect the manner in which the Bank
allocates capital resources to its obligations hereunder (including without
limitation, those resulting from the implementation or application of or
compliance with the “International Convergence of Capital Measurement and
Capital Standards, a Revised Framework” published by the Basle Committee on
Banking Supervision in June 2004 in the form existing on the date of this
Agreement (“Basle
II”)
or any
other law or regulation which implements Basel II) is to:
|
13.2.1
|
subject
the Bank to Taxes or change the basis of Taxation of the Bank with
respect
to any payment under any of the Security Documents (other than Taxes
or
Taxation on the overall
|
33
net
income, profits or gains of the Bank imposed in the jurisdiction in which
its
principal or lending office under this Agreement is located);
and/or
|
13.2.2
|
increase
the cost to, or impose an additional cost on, the Bank or its holding
company in making or keeping the Commitment available or maintaining
or
funding all or part of the Loan;
and/or
|
|
13.2.3
|
reduce
the amount payable or the effective return to the Bank under any
of the
Security Documents; and/or
|
|
13.2.4
|
reduce
the Bank’s or its holding company’s rate of return on its overall capital
by reason of a change in the manner in which it is required to allocate
capital resources to the Bank’s obligations under any of the Security
Documents; and/or
|
|
13.2.5
|
require
the Bank or its holding company to make a payment or forego a return
on or
calculated by reference to any amount received or receivable by the
Bank
under any of the Security Documents;
and/or
|
|
13.2.6
|
require
the Bank or its holding company to incur or sustain a loss (including
a
loss of future potential profits) by reason of being obliged to deduct
all
or part of the Commitment or the Loan from its capital for regulatory
purposes,
|
then
and
in each such case (subject to clause 13.3);
| (a) |
the
Bank shall notify the Borrower in writing of such event promptly
upon its
becoming aware of the same; and
|
| (b) |
the
Borrower shall on demand pay to the Bank the amount which the Bank
specifies (in a certificate setting forth the basis of the computation
of
such amount but not including any matters which the Bank or its holding
company regards as confidential) is required to compensate the Bank
and/or
(as the case may be) its holding company for such liability to Taxes,
cost, reduction, payment, foregone return or
loss.
|
For
the
purposes of this clause 13.2 “holding company”
means
the company or entity (if any) within the consolidated supervision of which
the
Bank is included.
|
13.3
|
Exception
|
Nothing
in clause 13.2 shall entitle the Bank to receive any amount in respect of
compensation for any such liability to Taxes, increased or additional cost,
reduction, payment, foregone return or loss (a) to the extent that the same
is
taken into account in calculating the Additional Cost or (b) to the extent
that
the same is the subject of an additional payment under clause 7.6.
|
14
|
Security
and set-off
|
|
14.1
|
Application
of moneys
|
All
moneys received by the Bank under or pursuant to any of the Security Documents
and expressed to be applicable in accordance with the provisions of this clause
14.1 shall be applied by the Bank in the following manner:
|
14.1.1
|
first
in or towards payment of all unpaid fees and expenses which may be
owing
to the Bank under any of the Security Documents and/or the Master
Swap
Agreement;
|
|
14.1.2
|
secondly
in or towards payment of any arrears of interest owing in respect
of the
Loan or any part thereof;
|
34
|
14.1.3
|
thirdly
in or towards repayment of the Loan (whether the same is due and
payable
or not);
|
|
14.1.4
|
fourthly
in or towards payment to the Bank for any loss suffered by reason
of any
such payment in respect of principal not being effected on an Interest
Payment Date relating to the part of the Loan
repaid;
|
|
14.1.5
|
fifthly,
in or towards payment to the Bank of any sum owing to the Bank under
the
Master Swap Agreement;
|
|
14.1.6
|
sixthly
in or towards payment to the Bank of any other sums owing to it under
any
of the other Security Documents;
and
|
|
14.1.7
|
seventhly
the surplus (if any) shall be paid to the Borrower or to whomsoever
else
may be entitled to receive such
surplus.
|
|
14.2
|
Set-off
|
|
14.2.1
|
The
Borrower authorises the Bank (without prejudice to any of the Bank’s
rights at law, in equity or otherwise), at any time and without notice
to
the Borrower, to apply any credit balance to which the Borrower is
then
entitled standing upon any account of the Borrower with any branch
of the
Bank in or towards satisfaction of any sum due and payable from the
Borrower to the Bank under any of the Security Documents. For this
purpose, the Bank is authorised to purchase with the moneys standing
to
the credit of such account such other currencies as may be necessary
to
effect such application.
|
|
14.2.2
|
Without
prejudice to its rights hereunder and/or under the Master Swap Agreement,
the Bank may at the same time as, or at any time after, any Default
under
this Agreement or the Borrower’s default under the Master Swap Agreement,
set-off any amount due now or in the future from the Borrower to
the Bank
under this Agreement against any amount due from the Bank to the
Borrower
under the Master Swap Agreement and apply the first amount in discharging
the second amount. The effect of any set-off under this clause 14.2.2
shall be effective to extinguish or, as the case may require, reduce
the
liabilities of the Bank under the Master Swap
Agreement.
|
|
14.2.3
|
The
Bank shall not be obliged to exercise any right given to it by this
clause
14.2. The Bank shall notify the Borrower forthwith upon the exercise
or
purported exercise of any right of set-off giving full details in
relation
thereto.
|
|
14.3
|
Further
assurance
|
The
Borrower undertakes that the Security Documents shall both at the date of
execution and delivery thereof and so long as any moneys are owing under any
of
the Security Documents be valid and binding obligations of the respective
parties thereto and rights of the Bank enforceable in accordance with their
respective terms and that it will, at its expense, execute, sign, perfect and
do, and will procure the execution, signing, perfecting and doing by each of
the
other Security Parties of, any and every such further assurance, document,
act
or thing as in the reasonable opinion of the Bank may be necessary or desirable
for perfecting the security contemplated or constituted by the Security
Documents.
|
14.4
|
Conflicts
|
In
the
event of any conflict between this Agreement and any of the other Borrower’s
Security Documents, the provisions of this Agreement shall prevail.
35
|
15
|
Accounts
|
|
15.1
|
Safety
Account
|
The
Borrower undertakes with the Bank that it will procure that all moneys payable
to the Borrower in respect of the Earnings (as defined in the General
Assignment) of the Ship shall, unless and until the Bank directs to the contrary
pursuant to clause 2.1.1 of the General Assignment, be paid to the Safety
Account.
|
15.2
|
Cash
Collateral Account:
withdrawals
|
Unless
the Bank otherwise agrees in writing, the Borrower shall not be entitled to
withdraw any moneys from the Cash Collateral Account at any time from the date
of this Agreement and so long as any moneys are owing under the Security
Documents save that, unless and until a Default shall occur and the Bank shall
direct to the contrary, the Borrower may request that moneys are released from
the Cash Collateral Account in accordance with clause 4.7 or
clause 9.2.7.
|
15.3
|
Application
of accounts
|
At
any
time after the occurrence of an Event of Default, the Bank may, without notice
to the Borrower, apply all moneys then standing to the credit of the Cash
Collateral Account (together with interest from time to time accruing or accrued
thereon) in or towards satisfaction of any sums due to the Bank under the
Security Documents in the manner specified in clause 14.1.
|
15.4
|
Charging
of Cash Collateral Account
|
The
Borrower, with full title guarantee hereby charges and agrees to charge by
way
of first fixed charge and releases and agrees to release to the Bank as a
continuing security for the payment of the Outstanding Indebtedness (as this
term is defined in the Deed of Covenant) the Cash Collateral Account and all
monies from time to time standing to the credit of the Cash Collateral Account
including any interest from time to time accrued and accruing thereon (whether
or not credited thereto) and the Borrower shall not be entitled to withdraw
any
such monies from the Cash Collateral Account otherwise than in accordance with
this clause 15 until such time as the said Outstanding Indebtedness has been
conclusively certified by the Bank to have been repaid in full.
|
16
|
Assignment,
transfer and lending
office
|
|
16.1
|
Benefit
and burden
|
This
Agreement shall be binding upon, and enure for the benefit of, the Bank and
the
Borrower and their respective successors.
|
16.2
|
No
assignment by Borrower
|
The
Borrower may not assign or transfer any of its rights or obligations under
this
Agreement.
|
16.3
|
Assignment
by Bank
|
The
Bank
may assign all or any part of its rights under this Agreement and/or the Master
Swap Agreement or under any of the other Security Documents to any other bank
or
financial institution (an “Assignee”)
without the consent of the Borrower.
36
|
16.4
|
Transfer
|
The
Bank
may transfer all or any part of its rights, benefits and/or obligations under
this Agreement and/or the Master Swap Agreement and/or any of the other Security
Documents to any one or more banks or other financial institutions (a
“Transferee”),
if
the Transferee, by delivery of such undertaking as the Bank may approve, becomes
bound by the terms of this Agreement and agrees to perform all or, as the case
may be, part of the Bank’s obligations under this Agreement without the consent
of the Borrower.
|
16.5
|
Documenting
assignments and transfers
|
If
the
Bank assigns all or any part of its rights or transfers all or any part of
its
rights, benefits and/or obligations as provided in clauses 16.3 or 16.4, the
Borrower undertakes, immediately on being requested to do so by the Bank and
at
the cost of the Bank, to enter into, and procure that the other Security Parties
shall enter into, such documents as may be necessary or desirable to transfer
to
the Assignee or Transferee all or the relevant part of the Bank’s interest in
the Security Documents and all relevant references in this Agreement to the
Bank
shall thereafter be construed as a reference to the Bank and/or its Assignee
or
Transferee (as the case may be) to the extent of their respective
interests.
|
16.6
|
Lending
office
|
The
Bank
shall lend through its office at the address specified above or through any
other office of the Bank selected from time to time by it through which the
Bank
wishes to lend for the purposes of this Agreement. If the office through which
the Bank is lending is changed pursuant to this clause 16.6, the Bank shall
notify the Borrower promptly of such change.
|
16.7
|
Disclosure
of information
|
The
Bank
may disclose to a prospective assignee, transferee or to any other person who
may propose entering into contractual relations with the Bank in relation to
this Agreement such information about the Borrower as the Bank shall consider
appropriate.
|
17
|
Notices
and other matters
|
|
17.1
|
Notices
|
Every
notice, request, demand or other communication under this Agreement or (unless
otherwise provided therein) under any of the other Security Documents
shall:
|
17.1.1
|
be
in writing delivered personally or by first-class prepaid letter
(airmail
if available) or facsimile transmission or other means of
telecommunication in permanent written
form;
|
|
17.1.2
|
be
deemed to have been received, subject as otherwise provided in the
relevant Security Document, in the case of a letter, when delivered
personally or three (3) days after it has been put in to the post
and, in
the case of a facsimile transmission or other means of telecommunication
in permanent written form, at the time of despatch (provided that
if the
date of despatch is not a business day in the country of the addressee
or
if the time of despatch is after the close of business in the country
of
the addressee it shall be deemed to have been received at the opening
of
business on the next such business day);
and
|
37
|
17.1.3
|
be
sent.
|
|
(a)
|
if
to the Borrower at:
|
|
|
00
Xxxxxxxxx Xxxxxx
|
||
|
000
00 Xxxxx
|
||
|
Xxxxxx
|
||
|
Fax
no:
|
x00
000 000 0000
|
|
|
Attention:
|
Mr
Xxxxxx Xxxxxxxxxxxx
|
|
|
(b)
|
if
to the Bank at:
|
|
|
The
Shipping Business Centre
|
||
|
0-00
Xxxxx Xxxxx Xxxxxx
|
||
|
Xxxxxx,
XX0X 0XX
|
||
|
Xxxxxxx
|
||
|
Fax
No:
|
x00
000 0000000
|
|
|
Attention:
|
Shipping
Business Centre
|
|
or
to
such other address and/or numbers as is notified by one party to the other
party
under this Agreement.
|
17.2
|
No
implied waivers, remedies
cumulative
|
No
failure or delay on the part of the Bank to exercise any power, right or remedy
under any of the Security Documents shall operate as a waiver thereof, nor
shall
any single or partial exercise by the Bank of any power, right or remedy
preclude any other or further exercise thereof or the exercise of any other
power, right or remedy. The remedies provided in the Security Documents are
cumulative and are not exclusive of any remedies provided by law.
|
17.3
|
English
language
|
All
certificates, instruments and other documents to be delivered under or supplied
in connection with any of the Security Documents shall be in the English
language or shall be accompanied by a certified English translation upon which
the Bank shall be entitled to rely.
|
18
|
Governing
law and jurisdiction
|
|
18.1
|
Law
|
This
Agreement is governed by and shall be construed in accordance with English
law.
|
18.2
|
Submission
to jurisdiction
|
The
Borrower agrees, for the benefit of the Bank, that any legal action or
proceedings arising out of or in connection with this Agreement against the
Borrower or any of its assets may be brought in the English courts. The Borrower
irrevocably and unconditionally submits to the jurisdiction of such courts
and
irrevocably designates, appoints and empowers Cheeswrights at present of
Xxxxxxxx Xxxxx, 000 Xxxxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX, Xxxxxxx to receive
for
it and on its behalf, service of process issued out of the English courts in
any
such legal action or proceedings. The submission to such jurisdiction shall
not
(and shall not be construed so as to) limit the right of the Bank to take
proceedings against the Borrower in the courts of any other competent
jurisdiction nor shall the taking of proceedings in any one or more
jurisdictions preclude the taking of proceedings in any other jurisdiction,
whether concurrently or not. The
38
parties
further agree that only the Courts of England and not those of any other State
shall have jurisdiction to determine any claim which the Borrower may have
against the Bank arising out of or in connection with this
Agreement.
|
18.3
|
Contracts
(Rights of Third Parties) Xxx
0000
|
No
term
of this Agreement is enforceable under the Contracts (Rights of Third Parties)
Xxx 0000 by a person who is not a party to this Agreement.
IN
WITNESS whereof
the parties to this Agreement have caused this Agreement to be duly executed
on
the date and year first above written.
39
Schedule
1
Form
of Drawdown Notice
(referred
to in clause 2.2)
[Date]
|
To:
|
The
Royal Bank of Scotland plc
|
|
Shipping
Business Centre
|
|
|
0-00
Xxxxx Xxxxx Xxxxxx
|
|
|
Xxxxxx
XX0X 0X
|
|
|
Xxxxxxx
|
Forty
five million Dollar ($45,000,000) Loan
Loan
Agreement dated [•] 2007
We
refer
to the above Loan Agreement and hereby give you notice that we wish to draw
down
the Loan, namely Forty five million Dollars ($45,000,000) on
[ ] [and select a first Interest Period in respect
thereof of • months] [the first Interest Period in respect thereof to expire on
(date)].
The
funds
should be credited to [name
and number of account] with
[details
of bank in [New York] [principal financial centre for relevant Optional
Currency] [in
the
following Tranches].
|
Dollar
Amount
|
Currency
in which Tranche
interest
Period is to be
outstanding
|
Interest
Period
|
Please
credit the funds
to:
|
|||
We
confirm that:
| (a) |
no
event or circumstance has occurred and is continuing which constitutes
a
Default;
|
| (b) |
the
representations and warranties contained in clauses 8.1 and 8.2 of
the
Loan Agreement are true and correct at the date hereof as if made
with
respect to the facts and circumstances existing at such
date;
|
| (c) |
the
borrowing to be effected by the drawdown of the Loan will be within
our
corporate powers, has been validly authorised by appropriate corporate
action and will not cause any limit on our borrowings (whether imposed
by
statute, regulation, agreement or otherwise) to be exceeded;
and
|
| (d) |
there
has been no material adverse change in our financial position from
that
described by us to the Bank in the negotiation of the Loan
Agreement.
|
Words
and
expressions defined in the Loan Agreement shall have the same meanings where
used herein.
|
|
|
For
and on behalf of
|
|
SOFFIVE
SHIPPING CORPORATION
|
40
Schedule
2
Documents
and evidence required as conditions precedent
(referred
to in clause 10.1)
Part
1
| 1 |
Ship
conditions
|
evidence
that the Ship:
| 1.1 |
Registration
and Encumbrances
|
is
registered in the name of the Borrower through the Registry under the laws
and
flag of the Flag State and that the Ship and its Earnings, Insurances and
Requisition Compensation (as defined in the General Assignment) are free of
Encumbrances;
| 1.2 |
Classification
|
maintains
the Classification free of all requirements and recommendations of the
Classification Society; and
| 1.3 |
Insurance
|
is
insured in accordance with the provisions of the Security Documents and all
requirements of the Security Documents in respect of such insurance have been
complied with (including without limitation, confirmation from the protection
and indemnity association or other insurer with which the Ship is, or is to
be,
entered for insurance or insured against protection and indemnity risks
(including oil pollution risks) that any necessary declarations required by
the
association or insurer for the removal of any oil pollution exclusion have
been
made and that any such exclusion does not apply to the Ship);
| 2 |
Constitutional
documents
|
copies,
certified by an officer of each Security Party as true, complete and up to
date
copies of all documents which contain or establish or relate to the constitution
of that Security Party;
| 3 |
Corporate
authorisations
|
copies
of
resolutions of the directors of the Borrower and of the directors and
shareholders of each other Security Party approving such of the Security
Documents to which such Security Party is, or is to be, party and authorising
the signature, delivery and performance of such Security Party’s obligations
thereunder, certified (in a certificate dated no earlier than five (5) Banking
Days prior to the date of this Agreement) by an officer of such Security Party
as:
| (a) |
being
true and correct;
|
| (b) |
being
duly passed at meetings of the directors of such Security Party and
of the
shareholders of such Security Party each duly convened and
held;
|
| (c) |
not
having been amended, modified or revoked;
and
|
| (d) |
being
in full force and effect,
|
together
with
originals or certified copies of any powers of attorney issued by any Security
Party pursuant to such resolutions;
41
| 4 |
Specimen
signatures
|
copies
of
the signatures of the persons who have been authorised on behalf of each
Security Party to sign such of the Security Documents to which such Security
Party is, or is to be, party and to give notices and communications, including
notices of drawing, under or in connection with the Security Documents,
certified (in a certificate dated no earlier than five (5) Banking Days prior
to
the date of this Agreement) by an officer of such Security Party as being the
true signatures of such persons;
| 5 |
Certificate
of incumbency
|
a
list of
directors and officers of each Security Party specifying the names and positions
of such persons, certified (in a certificate dated no earlier than five (5)
Banking Days prior to the date of this Agreement) by an officer of such Security
Party to be true, complete and up to date;
| 6 |
Borrower’s
consents and approvals
|
a
certificate (dated no earlier than five (5) Banking Days prior to the date
of
this Agreement) from an officer of the Borrower that no consents,
authorisations, licences or approvals are necessary for the Borrower to
authorise or are required by the Borrower in connection with the borrowing
by
the Borrower of the Loan pursuant to this Agreement or the execution, delivery
and performance of the Borrower’s Security Documents;
| 7 |
Other
consents and approvals
|
a
certificate (dated no earlier than five (5) Banking Days prior to the date
of
this Agreement) from an officer of each Security Party (other than the Borrower)
that no consents, authorisations, licences or approvals are necessary for such
Security Party to guarantee and/or grant security for the borrowing by the
Borrower of the Commitment pursuant to this Agreement and execute, deliver
and
perform the Security Documents insofar as such Security Party is a party
thereto;
| 8 |
Certified
Management Agreement
|
a
copy,
certified (in a certificate dated no earlier than five (5) Banking Days prior
to
the date of the Drawdown Notice) as a true and complete copy by an officer
of
the Manager of the Management Agreement; and
| 9 |
Insurance
opinion
|
an
opinion from Messrs BankServe Insurance Services Limited insurance consultants
to the Bank, on the insurances effected or to be effected in respect of the
Ship
upon and following the Drawdown Date.
42
Part
2
| 1 |
Security
Documents, letters and other
documents
|
The
Mortgage, the Deed of Covenant, the General Assignment, the Manager’s
Undertaking, the Interest Period Letter, the Master Swap Agreement and the
Master Agreement Security Deed all duly
executed;
| 2 |
Mortgage
registration
|
evidence
that the Mortgage has been registered against the Ship through the Registry
under the laws and flag of the Flag State;
| 3 |
Notices
of assignment
|
copies
of
duly executed notices of assignment required by the terms of the Security
Documents and in the forms prescribed by the Security Documents;
| 4 |
Cyprus
opinion
|
an
opinion of Chrysses Xxxxxxxxxxx & Co, special legal advisers to the Bank on
matters of Cyprus Law;
| 5 |
Liberian
legal opinion
|
an
opinion of Xxxxxx & Xxxxxx LLP, special legal advisers to the Bank on
matters of Liberian Law;
| 6 |
Further
opinions
|
any
such
further opinion as may be required by the Bank;
| 7 |
Borrower’s
process agent
|
a
letter
from the Borrower’s agent for receipt of service of proceedings referred to in
clause 18.2 accepting its appointment under the said clause and under each
of
the other Security Documents in which it is or is to be appointed as the
Borrower’s agent;
| 8 |
Manager’s
process agent
|
a
letter
from the Manager’s agent for receipt of service of proceedings referred to in
clause 6.2 of the Manager’s Undertaking accepting its appointment under the said
clause;
| 9 |
Registration
forms
|
such
statutory forms duly signed by the Borrower and the other Security Parties
as
may be required by the Bank to perfect the security contemplated by the Security
Documents;
| 10 |
Manager’s
confirmation
|
the
Manager has confirmed in writing that the representations and warranties set
out
in clauses 8.2.9, 8.2.10 and 8.2.11 are true and correct;
43
| 11 |
SMC/DOC
|
a
copy, certified (in a certificate dated no earlier than five (5) Banking Days
prior to the date of
this
Agreement) as a true and complete copy by an officer of the Borrower of the
DOC
issued to the Operator and the SMC for the Ship;
| 12 |
ISPS
Code
|
| 12.1 |
evidence
satisfactory to the Bank that the Ship is subject to a ship security
plan
which complies with the ISPS Code;
and
|
| 12.2 |
a
copy certified (in a certificate dated no earlier than five (5) Banking
Days prior to the Drawdown Date) as a true and complete copy by an
officer
of the Borrower of the ISSC for the Ship and the continuous synopsis
record required by the ISPS Code in respect of the
Ship;
|
| 13 |
Fee
|
evidence
that the fee and commitment commission due under clauses 6.1.1 and 6.1.2 have
been paid in full; and
| 14 |
Due
Diligence
|
evidence
that all information required in order for the Bank to complete its due
diligence formalities required in connection with this Agreement has been
provided and is satisfactory to the Bank in all respects.
44
Schedule
3
Calculation
of Additional Cost
| 1 |
The
Additional Cost is an addition to the interest rate to compensate
the Bank
for the cost of compliance with (a) the requirements of the Bank
of
England and/or the Financial Services Authority (or, in either case,
any
other authority which replaces all or any of its functions) or (b)
the
requirements of the European Central
Bank.
|
| 2 |
On,
or as soon as possible after, the first day of each Interest Period,
the
Bank shall calculate, as a percentage rate, its Additional Cost in
accordance with the following paragraphs. The Additional Cost will
be
expressed as a percentage rate per annum and will be rounded up to
four
decimal places.
|
| 3. |
The
Additional Cost when the Bank lends from an office in any member
state of
the European Union that has adopted or adopts the Euro as its lawful
currency in accordance with legislation of the European Union relating
to
Economic and Monetary Union will be the percentage (expressed as
a per
annum rate) which is its reasonable determination of the cost of
complying
with the minimum reserve requirements of the European Central Bank
in
respect of loans made from that
office.
|
| 4. |
The
Additional Cost for the Bank lending from an office in the United
Kingdom
will be calculated as follows:
|
| (a) |
in
relation to a sterling Loan:
|
|
AB
+ C(B - D) + Ex 0.01
|
per
cent per annum
|
|
|
100
- (A + C)
|
(b) in
relation to a Loan in any currency other than sterling:
|
Ex0.01
|
per
cent. per annum
|
|
|
300
|
Where:
|
A
|
is
the percentage of Eligible Liabilities (assuming these to be in excess
of
any stated minimum) which that Lender is from time to time required
to
maintain as an interest free cash ratio deposit with the Bank of
England
to comply with cash ratio
requirements.
|
|
B
|
is
the percentage rate of interest (excluding the Margin and the Additional
Cost and, if any part of the Loan has not been paid on its due date,
the
additional rate of interest specified in clause 3.4 payable for the
relevant Interest Period on the
Loan.
|
|
C
|
is
the percentage (if any) of Eligible Liabilities which that Lender
is
required from time to time to maintain as interest bearing Special
Deposits with the Bank of England.
|
|
D
|
is
the percentage rate per annum payable by the Bank of England to the
Agent
on interest bearing Special
Deposits.
|
|
E
|
is
designed to compensate the Bank for amounts payable under the Fees
Rules
and is calculated by the Bank as being the most recent rate of charge
payable by it to the Financial Services Authority under the Fees
Rules in
respect of the relevant financial year of the Financial Services
Authority
(calculated for this purpose by the Bank as being the average of
the Fee
Tariffs applicable to the Bank for that financial year) and expressed
in
pounds per £1,000,000 of the Tariff Base of the
Bank.
|
45
| 5. |
For
the purposes of this schedule:
|
|
(a)
|
|
(b)
|
“Fees
Rules” means
the rules on periodic fees contained in the Supervision manual of
the
Financial Services Authority’s Handbook of rules and guidance or such
other law or regulation as may be in force from time to time in respect
of
the payment of fees for the acceptance of
deposits;
|
|
(c)
|
“Fee
Tariffs” means
the fee tariffs specified in the Fees Rules under the activity group
A.1
Deposit acceptors (ignoring any minimum fee or zero rated fee required
pursuant to the Fees Rules but taking into account any applicable
discount
rate);
|
|
(d)
|
“Tariff
Base” has
the meaning given to it in, and will be calculated in accordance
with, the
Fees Rules; and
|
|
(e)
|
“pounds”
and
“E” means the lawful currency of the United
Kingdom.
|
| 6. |
In
application of the above formulae, A, B, C and D will be included
in the
formulae as figures and not as percentages (i.e. 5 per cent. will
be
included in the formula as 5 and not a 0.05). A negative result obtained
by subtracting D from B shall be taken as zero. The resulting figures
shall be rounded to four decimal
places.
|
| 7. |
Any
determination by the Bank in accordance with this schedule in relation
to
a formula, the Additional Cost or any amount payable to it shall,
in the
absence of manifest error, be conclusive and binding on the
Borrower.
|
| 8. |
The
Bank may from time to time, after consultation with the Borrower,
determine and notify the Borrower of any amendments which need to
be made
to this schedule to comply with any change in law, regulation or
any
requirements from time to time imposed by the Bank of England, the
Financial Services Authority or the European Central Bank (or, in
any
case, any other authority which replaces all or any of its functions)
and
any such determination shall, in the absence of manifest error, be
conclusive and binding on the
Borrower.
|
46
Schedule
4
Form
of Interest Period Letter
The
Royal
Bank of Scotland plc
Shipping
Business Centre
0-00
Xxxxx Xxxxx Xxxxxx
Xxxxxx
XX0X 0XX
Xxxxxxx
[•]
2007
Dear
Sirs
Loan
Agreement dated [•] 2007 between Soffive Shipping Corporation (the “Borrower”)
and The Royal Bank of Scotland plc (the “Bank”)
We
hereby
confirm that any one of the following individuals is authorised to give verbal
and/or written instructions to the Bank on behalf of the Borrower in respect
of
selection of any Interest Period pursuant to clause 3.2 of the Loan
Agreement:
[•]
Yours
faithfully
|
|
|
For
and on behalf of
|
|
SOFFIVE
SHIPPING CORPORATION
|
47
Schedule
5
Form
of Mortgage
48
REPUBLIC
OF CYPRUSS
The
Merchant Shipping (Registration of Ships, Sales and Mortgages) Law, 1963, (as
amended)
FIRST
STATUTORY MORTGAGE (TO SECURE ACCOUNT CURRENT)
(BODY
CORPORATE)
|
I.M.O.
No.
CALL
SIGN
|
Name
of Ship
|
Year
of Registry or Date of
Provisional
Registry/ Port of
Registry
|
||
|
9323912
C4VZ2
|
Sophia
|
0000,
Xxxxxxxx, Xxxxxx
|
||
|
Whether
a Sailing,
Steam
or Motor Ship
|
Horse
Power of Engines, if any
|
|||
|
Motor
Ship
|
10,300
kw
|
|||
|
Metres
|
|
|
Length
(Article 2(8))
|
221,07
|
|
Breadth
(Regulation 2(3))
|
36,50
|
|
Moulded
depth amidships to Upper Deck (Regulation 2(2))
|
19.90
|
|
Number
of Tons
|
|
|
Gross: 46,982
|
Net: 26,950
|
and
as
described in more detail in the Certificate of the Surveyor and the Register
Book.
WHEREAS
there is an Account Current between SOFFIVE
SHIPPING CORPORATION
whose
registered office is at 00 Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxx, (hereinafter
sometimes called the “Mortgagor”)
and
THE
ROYAL BANK OF SCOTLAND plc,
whose
registered office is at 00 Xx. Xxxxxx Xxxxxx, Xxxxxxxxx XX0 0XX, Xxxxxxxx,
acting for the purposes of this Deed through its branch at The Shipping Business
Centre, 0-00 Xxxxx Xxxxx Xxxxxx, Xxxxxx XX0X 0XX, Xxxxxxx (hereinafter sometimes
called the “Mortgagee”
which
expression shall include its successors and assignees), regulated by a Loan
Agreement (hereinafter, as the same may from time to time be amended, varied
or
supplemented called the “Loan
Agreement”)
dated
19 November 2007 made between the Mortgagor and the Mortgagee, an ISDA Master
Agreement (together with the Schedule thereto) dated 19 November 2007 made
between the Mortgagor and the Mortgagee (the said ISDA Master Agreement and
Schedule thereto, as the same may from time to time be amended, varied or
supplemented and all Confirmations (as therein defined) from time to time
exchanged under the said ISDA Master Agreement hereinafter together referred
to
as the “Master
Swap Agreement”)
and a
Deed of Covenant bearing even date herewith made between the Mortgagor and
the
Mortgagee supplemental to this Mortgage (hereinafter, as the same may from
time
to time be amended, varied or supplemented called the “Deed
of Covenant”)
and
WHEREAS pursuant to the Loan Agreement the Mortgagor has agreed to execute
this
Mortgage in favour of the Mortgagee for the purposes of securing payment by
the
Mortgagor to the Mortgagee of all sums for the time being owing by the Mortgagor
under the Loan Agreement, the Master Swap Agreement and the Deed of Covenant
(as
each of the same may from time to time hereafter be amended, varied or
supplemented) in the manner and the times set forth therein and WHEREAS the
amount of principal and interest due at any given time and the manner and time
for payment can be ascertained by reference to the Loan Agreement, the Master
Swap Agreement and the Deed of Covenant (each as so amended, varied or
supplemented) and/or to the books of account or other accounting records of
the
Mortgagee.
NOW
we
the said SOFFIVE SHIPPING CORPORATION in consideration of the premises for
ourselves and our successors, covenant with the said THE
ROYAL BANK OF SCOTLAND plc
and its
successors and assigns to pay to him, them or it the sums for the time being
due
to the Mortgagee whether by way of principal or interest or otherwise at the
times and in the manner aforesaid.
AND
for
the purpose of better securing to the said THE
ROYAL BANK OF SCOTLAND plc
and its
successors and assigns the payment of such sums as last aforesaid, we the
Mortgagor do hereby mortgage to the said THE
ROYAL BANK OF SCOTLAND plc
all one
hundred one hundredth (100/100th) shares, of which we are the Owner in the
Ship
above particularly described and in her boats and appurtenances.
Lastly,
we the Mortgagor for ourselves and our successors covenant with the Mortgagee
and its successors and assigns that we have power to mortgage in the manner
aforesaid the above mentioned shares, and that the same are free from
encumbrances.
IN
WITNESS WHEREOF
this
Mortgage has been duly executed the 20th
day of
November Two Thousand and Seven.
|
SIGNED,
SEALED AND DELIVERED
as
a DEED
|
)
|
||
|
by
|
)
|
||
|
as
the duly authorised attorney-in-fact
|
)
|
||
|
of
|
)
|
||
|
SOFFIVE
SHIPPING CORPORATION
|
)
|
||
|
in
the presence of:-
|
)
|
||
MEMORANDUM
OF RECORDING THE MORTGAGE
BY
THE REGISTRAR OF CYPRUS SHIPS
Mortgage
" "
entered in the Register on
the
day of
at hours
pursuant to Section 31(3) of the Merchant Shipping (Registration of Ships,
Sales
and Mortgages) Law, 1963
(as
amended).
|
|
(Seal)
|
|
|
Registrar
of Cyprus Ships
|
INSTRUMENT
OF TRANSFER OF MORTGAGE
WE,
the
within-mentioned
in
consideration
of
________________________________________
this
day
paid to us by ____________________ of ______________________________________
hereby transfer to him / them the benefit of the within-written
security.
IN
WITNESS WHEREOF
we have
hereunto executed this Instrument of Transfer this _____________
day of _____________
|
SIGNED,
SEALED AND DELIVERED
|
)
|
|
|
by
|
)
|
|
|
as
the duly authorised Attorney of
|
)
|
|
|
)
|
||
|
pursuant
to a Power of Attorney
|
)
|
|
|
dated
|
)
|
|
|
in
the presence of:-
|
)
|
|
|
|
||
|
Name:
|
||
|
Title:
|
||
|
Seat.
|
||
|
of
Consular Officer/Notary Public/Certifying Officer
|
||
MEMORANDUM
OF RECORDING
OF
TRANSFER OF MORTGAGE BY REGISTRAR OF CYPRUS SHIPS
Transfer
of Mortgage " " entered in the Register on the
____________
day of ______________________ 200 ________ at ________________ hours
pursuant to Section 37 of the
Merchant
Shipping
(Registration
of Ships, Sales and Mortgages) Law, 1963, (as amended).
|
|
(Seal)
|
|
|
Registrar
of Cyprus Ships
|
MEMORANDUM
OF DISCHARGE OF MORTGAGE
RECEIVED
all sums
due / the sum of _______________________________________
____________in
discharge of the within-written security.
IN
WITNESS WHEREOF
we have
hereunto executed this Memorandum this ____ day of ________
|
THE
COMMON SEAL OF
|
)
|
|
|
)
|
||
|
was
hereunto affixed
|
)
|
|
|
in
the presence of:-
|
)
|
|
|
|
||
|
|
||
|
or
|
||
|
SIGNED,
SEALED AND DELIVERED
|
)
|
|
|
by
|
)
|
|
|
and
|
)
|
|
|
as
the duly authorised Attorney/
|
)
|
|
|
Signatories
of
|
)
|
|
|
)
|
||
|
pursuant
to a Power of Attorney/
|
)
|
|
|
Instruments
of Procuration dated
|
)
|
|
|
in
|
)
|
|
|
the
presence of:-
|
)
|
|
|
|
||
|
Name:
|
||
|
Title:
|
||
|
Seat:
|
||
|
of
Consular Officer/Notary Public/Certifying Officer
|
||
Signature(s)
and description of witnesses / sealing officers, i.e., Director, Secretary
etc.
(as the case may be).
Schedule
6
Form
of Deed of Covenant
49
Private
& Confidential
Dated
20 November 2007
SOFFIVE
SHIPPING CORPORATION (1)
and
THE
ROYAL BANK OF SCOTLAND plc (2)
MORTGAGE
AND DEED OF COVENANT
relating
to m.v. Sophia
Contents
|
Clause
|
Page
|
||
|
1
|
Definitions
|
1
|
|
|
2
|
Representations
and warranties
|
5
|
|
|
3
|
Mortgage
of the Ship
|
6
|
|
|
4
|
Covenant
to pay
|
6
|
|
|
5
|
Continuing
security and other matters
|
6
|
|
|
6
|
Covenants
|
7
|
|
|
7
|
Powers
of Mortgagee to protect security and remedy defaults
|
14
|
|
|
8
|
Powers
of Mortgagee on Event of Default
|
15
|
|
|
9
|
Application
of moneys
|
16
|
|
|
10
|
Remedies
cumulative and other provisions
|
17
|
|
|
11
|
Costs
and indemnity
|
17
|
|
|
12
|
Attorney
|
18
|
|
|
13
|
Further
assurance
|
18
|
|
|
14
|
Notices
|
19
|
|
|
15
|
Counterparts
|
19
|
|
|
16
|
Severability
of provisions
|
19
|
|
|
17
|
Law,
jurisdiction and language
|
19
|
THIS
DEED OF COVENANT is
dated
20 November 2007 and made BETWEEN:
|
(1)
|
SOFFIVE
SHIPPING CORPORATION whose
registered office is at 00 Xxxxx Xxxxxx,
Xxxxxxxx,
|
Xxxxxxxx
of Liberia (the “Owner”);
and
|
(2)
|
THE
ROYAL BANK OF SCOTLAND plc whose
registered office is at 00 Xx. Xxxxxx Xxxxxx, Xxxxxxxxx XX0 0XX,
Xxxxxxxx,
acting for the purposes of this Deed through its branch at The Shipping
Business Centre, 0-00 Xxxxx Xxxxx Xxxxxx, Xxxxxx XX0X 0XX, Xxxxxxx
(the
“Mortgagee”).
|
WHEREAS:
| (A) |
the
Owner is the sole, absolute and unencumbered, legal and beneficial
owner
of one hundred one hundredth (100/100th) shares in the Ship described
in
clause 1.2;
|
| (B) |
by
a Loan Agreement dated 19 November 2007 and made between (1) the
Owner
(therein referred to as the “Borrower”)
and
(2) the Mortgagee (therein referred to as the “Bank”),
the
Mortgagee agreed (inter alia) to advance by way of a multicurrency
loan to
the Owner, upon the terms and conditions therein contained, a sum
of up to
Forty five million Dollars ($45,000,000) or the Equivalent Amount
in an
Optional Currency or Optional
Currencies;
|
| (C) |
by
a Master Swap Agreement dated 19 November 2007 and made between (1)
the
Owner and (2) the Mortgagee, the Mortgagee agreed the terms and conditions
upon which it would enter into an interest rate swap transaction
or
transactions with the Owner in respect of the Loan (whether in whole
or in
part as the case may be from time to
time);
|
| (D) |
the
Owner has executed in favour of the Mortgagee a statutory mortgage
of even
date herewith in account current form constituting a first priority
Cyprus
mortgage of one hundred one hundredth (100/100th) shares in the said
Ship;
and
|
| (E) |
this
Deed is supplemental to the Loan Agreement, the Master Swap Agreement
and
the Mortgage and to the security thereby created and is the Deed
of
Covenant referred to in the Loan Agreement but shall nonetheless
continue
in full force and effect notwithstanding any discharge of the
Mortgage.
|
NOW
THIS DEED WITNESSES AND IT IS HEREBY AGREED as
follows:
| 1 |
Definitions
|
| 1.1 |
Defined
expressions
|
Words
and
expressions defined in the Loan Agreement shall, unless the context otherwise
requires or unless otherwise defined herein, have the same meanings when used
in
this Deed.
| 1.2 |
Definitions
|
In
this
Deed, unless the context otherwise requires:
“Approved
Brokers” means
such firm of insurance brokers, appointed by the Owner, as may from time to
time
be approved in writing by the Mortgagee for the purposes of this
Deed;
“Casualty
Amount” means
Five hundred thousand Dollars ($500,000) (or the equivalent in any other
currency);
“Collateral
Instruments” means
notes, bills of exchange, certificates of deposit and other negotiable and
non-negotiable instruments, guarantees, indemnities and other assurances against
financial loss and any other documents or instruments which contain or evidence
an
1
obligation
(with or without security) to pay, discharge or be responsible directly or
indirectly for, any indebtedness or liabilities of the Owner or any other person
liable and includes any documents or instruments creating or evidencing a
mortgage, charge (whether fixed or floating), pledge, lien, hypothecation,
assignment, trust arrangement or security interest of any kind;
“Cyprus”
means
the
Republic of Cyprus;
“Earnings”
means
all
moneys whatsoever from time to time due or payable to the Owner during the
Security Period arising out of the use or operation of the Ship including (but
without limiting the generality of the foregoing) all freight, hire and passage
moneys, income arising under pooling arrangements, compensation payable to
the
Owner in the event of requisition of the Ship for hire, remuneration for salvage
and towage services, demurrage and detention moneys, and damages for breach
(or
payments for variation or termination) of any charterparty or other contract
for
the employment of the Ship;
“Event
of Default” means
any
failure by the Owner or any other party to the Loan Agreement and the other
Security Documents (other than the Mortgagee) to perform, observe, comply with
or discharge any of the covenants, terms, conditions or obligations on their
part to be performed, observed, complied with or discharged pursuant to the
Loan
Agreement and the other Security Documents or any of them in the manner, within
the time (including the applicable grace period, if any) and otherwise in
accordance with the terms and conditions of the Loan Agreement and the other
Security Documents and includes, without limitation to the generality of the
foregoing, any of the events set out in clause 11 of the Loan
Agreement;
“Expenses”
means
the
aggregate at any relevant time (to the extent that the same have not been
received or recovered by the Mortgagee or any Receiver) of:
|
(a)
|
all
losses, liabilities, costs, charges, expenses, damages and outgoings
of
whatever nature (including, without limitation, Taxes, repair costs,
registration fees and insurance premiums) suffered, incurred or paid
by
the Mortgagee or any Receiver in connection with the exercise of
the
powers referred to in or granted by this Deed or otherwise payable
by the
Owner in accordance with clause 11;
and
|
|
(b)
|
interest
on all such losses, liabilities, costs, charges, expenses, damages
and
outgoings from the date on which the same were suffered, incurred
or paid
by the Mortgagee or any Receiver until the date of receipt or recovery
thereof (whether before or after judgment) at a rate per annum calculated
in accordance with clause 3.4 of the Loan Agreement (as conclusively
certified by the Mortgagee or such Receiver, as the case may
be);
|
“Insurances”
means
all
policies and contracts of insurance (which expression includes all entries
of
the Ship in a protection and indemnity or war risks association) which are
from
time to time during the Security Period in place or taken out or entered into
by
or for the benefit of the Owner (whether in the sole name of the Owner or in
the
joint names of the Owner and the Mortgagee or otherwise) in respect of the
Ship
and her Earnings or otherwise howsoever in connection with the Ship and all
benefits thereof (including claims of whatsoever nature and return of
premiums);
“Loan”
means
the
principal amount advanced by the Mortgagee to the Owner pursuant to the Loan
Agreement or, as the context may require, the amount thereof at any time
outstanding;
“Loan
Agreement” means
the
agreement dated 19 November 2007 mentioned in recital (B) hereto;
“Loss
Payable Clauses” means
the
provisions regulating the manner of payment of sums receivable under the
Insurances which are to be incorporated in the relevant insurance documents,
such Loss Payable Clauses to be in the forms set out in schedule 1 to the
General
2
Assignment,
or in such other forms as may from time to time be agreed in writing by the
Mortgagee;
“Master
Swap Agreement” means
the
agreement made between the Mortgagee and the Owner dated as of 19 November
2007
mentioned in recital (C) hereto, comprising an ISDA Master Agreement and the
Schedule thereto in the form or substantially in the form set out in schedule
9
to the Loan Agreement, together with any Confirmations (as defined therein)
supplemental thereto;
“Master
Swap Agreement Liabilities” means
at
any relevant time all liabilities actual or contingent, present or future,
of
the Owner to the Mortgagee under the Master Swap Agreement;
“Mortgage”
means
the
statutory mortgage mentioned in recital (D);
“Mortgaged
Property” means:
| (a) |
the
Ship;
|
| (b) |
the
Insurances;
|
| (c) |
the
Earnings; and
|
| (d) |
any
Requisition Compensation;
|
“Mortgagee”
includes
the successors in title, Assignees and Transferees of the
Mortgagee;
“Notice
of Assignment of Insurances” means
a
notice of assignment in the form set out in schedule 2 to the General
Assignment, or in such other form as may from time to time be required or agreed
in writing by the Mortgagee;
“Outstanding
Indebtedness” means
the
aggregate of the Loan, and interest accrued and accruing thereon, the Expenses,
the Master Swap Agreement Liabilities and all other sums of money from time
to
time owing by the Owner to the Mortgagee, whether actually or contingently,
under the Security Documents or any of them;
“Owner”
includes
the successors in title of the Owner;
“Port
of Registry” means
the
Port of Limassol or such other port of registry approved in writing by the
Mortgagee which the Ship is, or is to be registered on, or at any relevant
time
hereafter;
“Receiver”
means
any
receiver and/or manager appointed pursuant to clause 8.2;
“Requisition
Compensation” means
all
sums of money or other compensation from time to time payable during the
Security Period by reason of the Compulsory Acquisition of the
Ship;
“Security
Documents” means
the
Loan Agreement, this Deed, the Mortgage, the General Assignment, the Manager’s
Undertaking, the Master Swap Agreement and the Master Agreement Security Deed
and any other such document as is defined in the Loan Agreement as a Security
Document or as may have been or may hereafter be executed to guarantee and/or
secure all or any part of the Loan, interest thereon and other moneys from
time
to time owing by the Owner pursuant to the Loan Agreement and/or the Master
Swap
Agreement (whether or not such document also secures moneys from time to time
owing pursuant to any other document or agreement);
“Security
Period” means
the
period commencing on the date hereof and terminating upon discharge of the
security created by the Security Documents by payment of all moneys payable
thereunder;
3
“Ship”
means
the
motor vessel Sophia
registered
at the Port of Registry under IMO Number 9323912 and includes any share or
interest therein and her engines, machinery, boats, tackle, outfit, equipment,
spare gear, fuel, consumable or other stores, belongings and appurtenances
whether on board or ashore and whether now owned or hereafter acquired and
also
any and all additions, improvements and replacements hereafter made in or to
such vessel or any part thereof or in or to her equipment and appurtenances
aforesaid;
“Total
Loss”
means:
|
(a)
|
the
actual, constructive, compromised or arranged total loss of the Ship;
or
|
|
(b)
|
the
Compulsory Acquisition of the Ship;
or
|
|
(c)
|
the
hijacking, theft, condemnation, capture, seizure, arrest, detention
or
confiscation of the Ship (other than where the same amounts to the
Compulsory Acquisition of the Ship) by any Government Entity, or
by
persons acting or purporting to act on behalf of any Government Entity,
unless the Ship be released and restored to the Owner from such hijacking,
theft, condemnation, capture, seizure, arrest, detention or confiscation
within thirty (30) days after the occurrence thereof;
and
|
“United
Kingdom” means
Great Britain, Northern Ireland, the Channel Islands and the Isle of
Man.
| 1.3 |
Insurance
terms
|
In
clause
6.1.1:
| 1.3.1 |
“excess
risks” means
the proportion (if any) of claims for general average, salvage and
salvage
charges and under the ordinary collision clause not recoverable in
consequence of the value at which the Ship is assessed for the purpose
of
such claims exceeding her insured
value;
|
| 1.3.2 |
“protection
and indemnity risks” means
the usual risks (including oil pollution and freight, demurrage and
defence cover) covered by a United Kingdom protection and indemnity
association or a protection and indemnity association which is managed
in
London (including, without limitation, the proportion (if any) of
any sums
payable to any other person or persons in case of collision which
are not
recoverable under the hull and machinery policies by reason of the
incorporation therein of Clause 8 of the Institute Time Clauses (Hulls)
(1/11/95) or the Institute Amended Running Down Clause (1/11/95)
or any
equivalent provision); and
|
| 1.3.3 |
“war
risks” includes
those risks covered by the standard form of English marine policy
with
Institute War and Strikes Clauses (Time) (1/10/83) attached or similar
cover.
|
| 1.4 |
Construction
of Mortgage terms
|
In
the
Mortgage:
| 1.4.1 |
references
to “interest” shall be construed as references to interest covenanted to
be paid in accordance with clause 4.1.2 and any interest specified
in
paragraph (b) of the definition of “Expenses” in clause
1.2;
|
| 1.4.2 |
references
to “principal” shall be construed as references to all moneys (other than
interest) for the time being comprised in the Outstanding
Indebtedness;
|
| 1.4.3 |
the
expression “all sums for the time being owing to the Mortgagee” means the
whole of the Outstanding Indebtedness;
and
|
4
| 1.4.4 |
the
expression “Account Current” means an account or accounts which shall be
kept by the Owner with the Mortgagee and from which the Mortgagee
may
(without giving notice or making any demand) debit any part of the
Outstanding Indebtedness.
|
| 1.5 |
Headings
|
Clause
headings and the table of contents are inserted for convenience of reference
only and shall be ignored in the interpretation of this Deed.
| 1.6 |
Construction
of certain terms
|
In
this
Deed, unless the context otherwise requires:
| 1.6.1 |
references
to clauses and schedules are to be construed as references to clauses
of,
and schedules to, this Deed and references to this Deed include its
schedules;
|
| 1.6.2 |
references
to (or to any specified provision of) this Deed or any other document
shall be construed as references to this Deed, that provision or
that
document as in force for the time being and as amended in accordance
with
the terms thereof, or, as the case may be, with the agreement of
the
relevant parties;
|
| 1.6.3 |
words
importing the plural shall include the singular and vice
versa;
|
| 1.6.4 |
references
to a person shall be construed as references to an individual, firm,
company, corporation, unincorporated body of persons or any Government
Entity;
|
| 1.6.5 |
references
to a “guarantee”
shall include references to an indemnity or other assurance against
financial loss including, without limitation, an obligation to purchase
assets or services as a consequence of a default by any other person
to
pay any Indebtedness and “guaranteed”
shall
be construed accordingly; and
|
| 1.6.6 |
references
to statutory provisions shall be construed as references to those
provisions as replaced or amended or re-enacted from time to
time.
|
| 1.7 |
Conflict
with Loan Agreement
|
This
Deed
shall be read together with the Loan Agreement but in case of any conflict
between the two instruments, the provisions of the Loan Agreement shall
prevail.
| 2 |
Representations
and warranties
|
| 2.1 |
The
Owner hereby represents and warrants to the Mortgagee
that:
|
| 2.1.1 |
it
is the sole, absolute, legal and beneficial owner of the
Ship;
|
| 2.1.2 |
the
Ship is not subject to any charter which, if entered into after the
date
of this Deed, would have required the consent of the Mortgagee under
clause 6.1.15, and there is no existing or intended agreement or
arrangement whereby the Earnings may be shared with any person other
than
the Mortgagee as provided in the General
Assignment;
|
| 2.1.3 |
neither
the Mortgaged Property nor any part thereof is subject to any Encumbrance
save as constituted by the Mortgage and this Deed and the General
Assignment or otherwise permitted by the terms of this Deed;
and
|
| 2.1.4 |
it
has power and is entitled to register the Ship under the laws and
flag of
Cyprus.
|
5
| 3 |
Mortgage
of the Ship
|
By
way of
security for payment of the Outstanding Indebtedness the Owner as beneficial
owner hereby mortgages and charges to and in favour of the Mortgagee all its
rights, title and interest present and future in and to the Ship.
| 4 |
Covenant
to pay
|
| 4.1 |
In
consideration of the advance by the Mortgagee to the Owner on or
before
the date hereof of the total principal sum of Forty five million
Dollars
($45,000,000) or the Equivalent Amount in an Optional Currency
or Optional
Currencies (receipt of which sum the Owner hereby acknowledges)
in
accordance with the provisions of the Loan Agreement, the Owner
hereby
covenants with the Mortgagee:
|
| 4.1.1 |
to
repay the Loan by the instalments and on the dates referred to and
otherwise in the manner and upon the terms set out in the Loan
Agreement;
|
| 4.1.2 |
to
pay interest on the Loan, and on any overdue interest or other moneys
payable under the Loan Agreement, at the rate or rates from time
to time
applicable thereto in the manner and upon the terms set out in the
Loan
Agreement;
|
| 4.1.3 |
to
pay all other moneys payable by the Owner under the Security Documents
or
any of them at the times and in the manner therein specified;
and
|
| 4.1.4 |
to
pay and discharge to the Mortgagee the Master Swap Agreement Liabilities
on their due date.
|
| 5 |
Continuing
security and other matters
|
| 5.1 |
Continuing
Security
|
The
security created by the Mortgage and this Deed shall:
| 5.1.1 |
be
held by the Mortgagee as a continuing security for the payment of
the
Outstanding Indebtedness and the performance and observance of and
compliance by the Owner with all of the covenants, terms and conditions
contained in the Security Documents to which the Owner is or is to
be a
party, express or implied and the security so created shall not be
satisfied by any intermediate payment or satisfaction of any part
of the
amount hereby and thereby secured (or by any settlement of accounts
between the Owner or any other person who may be liable to the Mortgagee
in respect of the Outstanding Indebtedness or any part thereof and
the
Mortgagee);
|
| 5.1.2 |
be
in addition to, and shall not in any way prejudice or affect, and
may be
enforced by the Mortgagee without prior recourse to, the security
created
by any other of the Security Documents or by any present or future
Collateral Instruments, right or remedy held by or available to the
Mortgagee or any right or remedy of the Mortgagee thereunder;
and
|
| 5.1.3 |
not
be in any way prejudiced or affected by the existence of any of the
other
Security Documents or any such Collateral Instrument, rights or remedies
or by the same becoming wholly or in part void, voidable or unenforceable
on any ground whatsoever or by the Mortgagee dealing with, exchanging,
varying or failing to perfect or enforce any of the same, or giving
time
for payment or performance or indulgence or compounding with any
other
person liable.
|
6
| 5.2 |
Rights
additional
|
All
the
rights, remedies and powers vested in the Mortgagee hereunder shall be in
addition to and not a limitation of any and every other right, power or remedy
vested in the Mortgagee under the Loan Agreement, this Deed, the other Security
Documents or any Collateral Instrument or at law and all the powers so vested
in
the Mortgagee may be exercised from time to time and as often as the Mortgagee
may deem expedient.
| 5.3 |
No
enquiry
|
Neither
the Mortgagee nor any Receiver shall be obliged to make any enquiry as to the
nature or sufficiency of any payment received by it under the Mortgage and/or
this Deed or to make any claim or take any action to collect any moneys hereby
assigned or to enforce any rights or benefits hereby assigned to the Mortgagee
or to which the Mortgagee may at any time be entitled under the Mortgage and/or
this Deed.
| 5.4 |
Obligations
of Owner and Mortgagee
|
The
Owner
shall remain liable to perform all the obligations assumed by it in relation
to
the Mortgaged Property and the Mortgagee shall be under no obligation of any
kind whatsoever in respect thereof or be under any liability whatsoever in
the
event of any failure by the Owner to perform its obligations in respect
thereof.
| 5.5 |
Discharge
of Mortgage
|
Notwithstanding
that this Deed is expressed to be supplemental to the Mortgage it shall continue
in full force and effect after any discharge of the Mortgage.
| 6 |
Covenants
|
| 6.1 |
The
Owner hereby covenants with the Mortgagee and undertakes throughout
the
Security Period:
|
| 6.1.1 |
Insurance
|
| (a) |
Insured
risks, amounts and terms
|
to
insure
and keep the Ship insured free of cost and expense to the Mortgagee and in
the
sole name of the Owner or, if so required by the Mortgagee, in the joint names
of the Owner and the Mortgagee (but without liability on the part of the
Mortgagee for premiums or calls):
| (i) |
against
fire and usual marine risks (including excess risks) and war risks,
on an
agreed value basis, in such amounts (but not in any event less than
whichever shall be the greater of the market value of the Ship for
the
time being and One hundred and ten per cent (110%) of the aggregate
of the
Loan and the Master Swap Agreement Liabilities) and upon such terms
as
shall from time to time be approved in writing by the Mortgagee;
and
|
| (ii) |
against
protection and indemnity risks (including pollution risks for the
highest
amount in respect of which cover is or may become available for ships
of
the same type, size, age and flag as the Ship and a freight, demurrage
and
defence cover) for the full value and tonnage of the Ship (as approved
in
writing by the Mortgagee) and upon such terms as shall from time
to time
be approved in writing by the Mortgagee;
and
|
| (iii) |
in
respect of such other matters of whatsoever nature and howsoever
arising
in respect of which insurance would be maintained by a prudent owner
of
the Ship;
|
7
and
to
pay to the Mortgagee the cost (as conclusively certified by the Mortgagee)
of
any mortgagee’s interest insurance (including mortgagee’s additional perils (all
P&I risks) coverage) which the Mortgagee may from time to time effect in
respect of the Ship upon such terms and in such amounts (not exceeding one
hundred and ten per cent (110%) of the aggregate of the Loan and the Master
Swap
Agreement Liabilities) as it shall deem desirable provided however that such
cost shall not exceed $90,000 (“Mll
premia”) for
the
duration of the Security Period and shall be payable to the Mortgagee on the
Drawdown Date or, at the option of the Owner, which option shall be declared
on
or before the Drawdown Date, at a rate of 0.02% of the amount of the Loan per
annum payable annually to the Mortgagee on each anniversary of the Drawdown
Date
during the Security Period. In the event of a prepayment in full of the
outstanding amount of the Loan by the Owner, the Mortgagee agrees to refund
to
the Owner such proportion of the Mil premia as the amount and remaining period
of the Loan immediately prior to such prepayment bears to the original amount
and period of the Loan on the Drawdown Date. Such amount to be calculated by
the
Bank and to be binding on the Owner;
| (b) |
Approved
brokers, insurers and associations
|
to
effect
the insurances aforesaid in such currency as the Mortgagee may approve and
through the Approved Brokers and with such insurance companies and/or
underwriters as shall from time to time be approved in writing by the Mortgagee;
provided however that the insurances against war risks and protection and
indemnity risks may be effected by the entry of the Ship with such war risks
and
protection and indemnity associations as shall from time to time be approved
in
writing by the Mortgagee;
| (c) |
Fleet
liens, set-off and cancellation
|
if
any of
the insurances referred to in clause 6.1.1(a) form part of a fleet cover, to
procure that the Approved Brokers shall undertake to the Mortgagee that they
shall neither set-off against any claims in respect of the Ship any premiums
due
in respect of other vessels under such fleet cover or any premiums due for
other
insurances, nor cancel the insurance for reason of non-payment of premiums
for
other vessels under such fleet cover or of premiums for such other insurances,
and shall undertake to issue a separate policy in respect of the Ship if and
when so requested by the Mortgagee;
| (d) |
Payment
of premiums and calls
|
punctually
to pay all premiums, calls, contributions or other sums payable in respect
of
all such insurances and to produce all relevant receipts or other evidence
of
payment when so required by the Mortgagee;
| (e) |
Renewal
|
at
least
fourteen (14) days before the relevant policies, contracts or entries expire,
to
notify the Mortgagee of the names of the brokers and/or the war risks and
protection and indemnity associations proposed to be employed by the Owner
or
any other party for the purposes of the renewal of such insurances and of the
amounts in which such insurances are proposed to be renewed and the risks to
be
covered and, subject to compliance with any requirements of the Mortgagee
pursuant to this clause 6.1.1, to procure that appropriate instructions for
the
renewal of such insurances on the terms so specified are given to the Approved
Brokers and/or to the approved war risks and protection and indemnity
associations at least ten (10) days before the relevant policies, contracts
or
entries expire, and that the Approved Brokers and/or the approved war risks
and
protection and indemnity associations will at least seven (7) days before such
expiry (or within such shorter period as the Mortgagee may from time to time
agree) confirm in writing to the Mortgagee as and when such renewals have been
effected in accordance with the instructions so given;
8
| (f) |
Guarantees
|
to
arrange for the execution and delivery of such guarantees or indemnities as
may
from time to time be required by any protection and indemnity or war risks
association;
| (g) |
Hull
policy documents, notices, loss payable clauses and brokers’
undertakings
|
to
deposit with the Approved Brokers (or procure the deposit of) all slips, cover
notes, policies, certificates of entry or other instruments of insurance from
time to time issued in connection with such of the insurances referred to in
clause 6.1.1(a) as are effected through the Approved Brokers and procure that
the interest of the Mortgagee shall be endorsed thereon by incorporation of
the
relevant Loss Payable Clause and, where the Insurances have been assigned to
the
Mortgagee, by means of a Notice of Assignment of Insurances (signed by the
Owner
and by any other assured who shall have assigned its interest in the Insurances
to the Mortgagee) and that the Mortgagee shall be furnished with pro forma
copies thereof and a letter or letters of undertaking from the Approved Brokers
in such form as shall from time to time be required by the
Mortgagee;
| (h) |
Associations’
loss payable clauses, undertakings and
certificates
|
to
procure that any protection and indemnity and/or war risks associations in
which
the Ship is for the time being entered shall endorse the relevant Loss Payable
Clause on the relevant certificate of entry or policy and shall furnish the
Mortgagee with a copy of such certificate of entry or policy and a letter or
letters of undertaking in such form as shall from time to time be required
by
the Mortgagee;
| (i) |
Extent
of cover and exclusions
|
to
take
all necessary action and comply with all requirements which may from time to
time be applicable to the Insurances (including, without limitation, the making
of all requisite declarations within any prescribed time limits and the payment
of any additional premiums) so as to ensure that the Insurances are not made
subject to any exclusions or qualifications to which the Mortgagee has not
given
its prior written consent and are otherwise maintained on terms and conditions
from time to time approved in writing by the Mortgagee;
| (j) |
Correspondence
with brokers and associations
|
to
provide to the Mortgagee, at the time of each such communication, copies of
all
written communications between the Owner and the Approved Brokers and approved
war risks and protection and indemnity associations which relate to compliance
with requirements from time to time applicable to the Insurances including,
without limitation, all requisite declarations and payments of additional
premiums or calls referred to in clause 6.1.1(i);
| (k) |
Independent
report
|
if
so
requested by the Mortgagee, but at the cost of the Owner, to furnish the
Mortgagee from time to time with a detailed report signed by an independent
firm
of marine insurance brokers appointed by the Mortgagee dealing with the
insurances maintained on the Ship and stating the opinion of such firm as to
the
adequacy thereof;
| (I) |
Collection
of claims
|
to
do all
things necessary and provide all documents, evidence and information to enable
the Mortgagee to collect or recover any moneys which shall at any time become
due in respect of the Insurances;
9
| (m) |
Employment
of Ship
|
not
to
employ the Ship or suffer the Ship to be employed otherwise than in conformity
with the terms of the Insurances (including any warranties express or implied
therein) without first obtaining the consent of the insurers to such employment
and complying with such requirements as to extra premium or otherwise as the
insurers may prescribe;
| (n) |
Application
of recoveries
|
to
apply
all sums receivable under the Insurances which are paid to the Owner in
accordance with the Loss Payable Clauses in repairing all damage and/or in
discharging the liability in respect of which such sums shall have been
received; and
| (o) |
Assignment
of Insurances
|
forthwith
upon being requested so to do by the Mortgagee to assign to the Mortgagee (in
such form as it may require) the Insurances and all benefits
thereof;
| 6.1.2 |
Ship’s
name and registration
|
not
to
change the name of the Ship and to keep the Ship registered as a Cyprus Ship
at
the Port of Limassol and not do or suffer to be done anything, or omit to do
anything the doing or omission of which could or might result in such
registration being forfeited or imperilled or which could or might result in
the
Ship being required to be registered otherwise than as a Cyprus ship at the
Port
of Registry and not to register the Ship or permit its registration under any
other flag or at any other port without the prior written consent of the
Mortgagee;
| 6.1.3 |
Repair
|
to
keep
the Ship in a good and efficient state of repair and procure that all repairs
to
or replacement of any damaged, worn or lost parts or equipment are effected
in
such manner (both as regards workmanship and quality of materials) as not to
diminish the value of the Ship;
| 6.1.4 |
Modification;
removal of parts; equipment owned by third
parties
|
not
without the prior written consent of the Mortgagee to, or suffer any other
person to:
| (a) |
make
any modification to the Ship in consequence of which her structure,
type
or performance characteristics could or might be materially altered
or her
value materially reduced; or
|
| (b) |
remove
any material part of the Ship or any equipment the value of which is such
that its removal from the Ship would materially reduce the value
of the
Ship without replacing the same with equivalent parts or equipment
which
are owned by the Owner free from Encumbrances;
or
|
| (c) |
install
on the Ship any equipment owned by a third party which cannot be
removed
without causing damage to the structure or fabric of the
Ship;
|
| 6.1.5 |
Maintenance
of class; compliance with
regulations
|
to
maintain the Classification as the class of the Ship and to comply with and
ensure that the Ship at all times complies with the provisions of the Cyprus
Merchant Shipping Laws and all regulations and requirements (statutory or
otherwise) from time to time applicable to vessels registered at the Port of
Registry or otherwise applicable to the Ship;
10
| 6.1.6 |
Surveys
|
to
submit
the Ship to continuous surveys and such periodical or other surveys as may
be
required for classification purposes and to supply to the Mortgagee copies
of
all survey reports issued in respect thereof;
| 6.1.7 |
Inspection
|
to
ensure
that the Mortgagee, by surveyors or other persons appointed by it for such
purpose may board the Ship at all reasonable times for the purpose of inspecting
her and to afford all proper facilities for such inspections and for this
purpose to give the Mortgagee reasonable advance notice of any intended
drydocking of the Ship (whether for the purpose of classification, survey or
otherwise) (provided however that if an Event of Default has occurred, the
cost
of any such inspection shall be borne by the Owner);
| 6.1.8 |
Prevention
of and release from arrest
|
promptly
to pay and discharge all debts, damages, liabilities and outgoings whatsoever
which have given or may give rise to maritime, statutory or possessory liens
on,
or claims enforceable against, the Ship, her Earnings or Insurances or any
part
thereof and, in the event of a writ or libel being filed against the Ship,
her
Earnings or Insurances or any part thereof, or of any of the same being
arrested, attached or levied upon pursuant to legal process or purported legal
process or in the event of detention of the Ship in exercise or purported
exercise of any such lien or claim as aforesaid, to procure the release of
the
Ship, her Earnings and Insurances from such arrest, detention attachment or
levy
or, as the case may be, the discharge of the writ or libel forthwith upon
receiving notice thereof by providing bail or procuring the provision of
security or otherwise as the circumstances may require;
| 6.1.9 |
Employment
|
not
to
employ the Ship or permit her employment in any manner, trade or business which
is forbidden by international law, or which is unlawful or illicit under the
law
of any relevant jurisdiction, or in carrying illicit or prohibited goods, or
in
any manner whatsoever which may render her liable to condemnation in a prize
court, or to destruction, seizure, confiscation, penalty or sanctions and,
in
the event of hostilities in any part of the world (whether war be declared
or
not), not to employ the Ship or permit her employment in carrying any contraband
goods, or enter or trade to or to continue to trade in any zone which has been
declared a war zone by any Government Entity or by the Ship’s war risks insurers
unless the prior written consent of the Mortgagee is obtained and such special
insurance cover as the Mortgagee may require shall have been effected by the
Owner and at its expense;
| 6.1.10 |
Information
|
promptly
to furnish the Mortgagee with all such information as it may from time to time
require regarding the Ship, her employment, position and engagements,
particulars of all towages and salvages, and copies of all charters and other
contracts for her employment, or otherwise howsoever concerning
her;
| 6.1.11 |
Notification
of certain events
|
to
notify
the Mortgagee forthwith by fax thereafter confirmed by letter of:
| (a) |
any
damage to the Ship requiring repairs the cost of which will or might
exceed the Casualty Amount;
|
| (b) |
any
occurrence in consequence of which the Ship has or may become a Total
Loss;
|
| (c) |
any
requisition of the Ship for hire;
|
11
| (d) |
any
requirement or recommendation made by any insurer or the Classification
Society or by any competent authority which is not, or cannot be,
complied
with in accordance with its terms;
|
| (e) |
any
arrest or detention of the Ship or any exercise or purported exercise
of a
lien or other claim on the Ship or the Earnings or Insurances or
any part
thereof;
|
| (f) |
any
petition or notice of meeting to consider any resolution to wind
up the
Owner (or any event analogous thereto under the laws of the place
of its
incorporation);
|
| (g) |
the
occurrence of any Default; or
|
| (h) |
the
occurrence of any Environmental Claim against the Owner or the Ship
or any
incident, event or circumstances which may give rise to any such
Environmental Claim;
|
| 6.1.12 |
Payment
of outgoings and evidence of
payments
|
promptly
to pay all tolls, dues and other outgoings whatsoever in respect of the Ship
and
her Earnings and Insurances and to keep proper books of account in respect
of
the Ship and her Earnings and, as and when the Mortgagee may so require, to
make
such books available for inspection on behalf of the Mortgagee, and to furnish
satisfactory evidence that the wages and allotments and the insurance and
pension contributions of the Master and crew are being promptly and regularly
paid and that all deductions from crew’s wages in respect of any applicable tax
liability are being properly accounted for and that the Master has no claim
for
disbursements other than those incurred by him in the ordinary course of trading
on the voyage then in progress;
| 6.1.13 |
Encumbrances
|
not
without the prior written consent of the Mortgagee (and then only subject to
such conditions as the Mortgagee may impose) to create or purport or agree
to
create or permit to arise or subsist any Encumbrance (other than Permitted
Liens) over or in respect of the Ship, any share or interest therein or in
any
other part of the Mortgaged Property otherwise than to or in favour of the
Mortgagee;
| 6.1.14 |
Sale
or other disposal
|
not
without the prior written consent of the Mortgagee (and then only subject to
such conditions as the Mortgagee may impose) to sell, agree to sell, transfer,
abandon or otherwise dispose of the Ship or any share or interest
therein;
| 6.1.15 |
Chartering
|
not
without the prior written consent of the Mortgagee (which the Mortgagee shall
have full liberty to withhold) and, if such consent is given, only subject
to
such conditions as the Mortgagee may impose, to let the Ship:
| (a) |
on
demise charter for any period;
|
| (b) |
by
any time or consecutive voyage charter for a term which exceeds or
which
by virtue of any optional extensions therein contained may exceed
thirteen
(13) months’ duration;
|
| (c) |
on
terms whereby more than two (2) months’ hire (or the equivalent) is
payable in advance; and
|
| (d) |
below
the market rate prevailing at the time when the Ship is fixed or
other
than on arms’ length terms;
|
12
| 6.1.16 |
Sharing
of Earnings
|
not
without the prior written consent of the Mortgagee (and then only subject to
such conditions as the Mortgagee may impose) to enter into any agreement or
arrangement whereby the Earnings may be shared with any other
person;
| 6.1.17 |
Payment
of Earnings
|
to
procure that the Earnings are paid to the Mortgagee at all times if and when
the
same shall be or shall have become so payable in accordance with the Security
Documents after the Mortgagee shall have directed pursuant to clause 2.1 of
the
General Assignment that the same shall be no longer receivable by the Owner
and
that any Earnings which are so payable and which are in the hands of the Owner’s
brokers or agents are duly accounted for and paid over to the Mortgagee
forthwith on demand;
| 6.1.18 |
Repairers’
liens
|
not
without the prior written consent of the Mortgagee to put the Ship into the
possession of any person for the purpose of work being done upon her in an
amount exceeding or likely to exceed the Casualty Amount unless such person
shall first have given to the Mortgagee in terms satisfactory to it, a written
undertaking not to exercise any lien on the Ship or the Earnings for the cost
of
such work or otherwise;
| 6.1.19 |
Manager
|
not
without the prior written consent of the Mortgagee to appoint a manager of
the
Ship other than the Manager, or terminate or amend the terms of the Management
Agreement;
| 6.1.20 |
Registration
of Mortgage
|
to
cause
the Mortgage to be duly registered and otherwise to comply with and satisfy
all
the requirements and formalities established by the laws of Cyprus and to
perfect the Mortgage and this Deed as a valid and enforceable first priority
statutory mortgage upon the Ship and to furnish to the Mortgagee from time
to
time such proof as the Mortgagee may reasonably request in order to satisfy
themselves that the Owner has complied with the provisions of this clause
6.1.20;
| 6.1.21 |
Notice
of Mortgage
|
to
place
and at all times and places to retain a properly certified copy of the Mortgage
and this Deed (which shall form part of the Ship’s documents) on board the Ship
with her papers and cause such certified copy of the Mortgage and this Deed
to
be exhibited to any and all persons having business with the Ship which might
create or imply any commitment or encumbrance whatsoever on or in respect of
the
Ship (other than a lien for crew’s wages and salvage) and to any representative
of the Mortgagee and to place and keep prominently displayed in the navigation
room and in the Master’s cabin of the Ship a framed printed notice in plain type
reading as follows:
“NOTICE
OF MORTGAGE”
This
Ship
is subject to a first priority mortgage and deed of covenant in favour of The
Royal Bank of Scotland plc of The Shipping Business Centre, 0-00 Xxxxx Xxxxx
Xxxxxx, Xxxxxx XX0X 0XX, Xxxxxxx. Under the said mortgage and deed of covenant,
neither the Owner nor any charterer nor the Master of this Ship has any right,
power or authority to create, incur or permit to be imposed upon this Ship
any
commitments or encumbrances whatsoever other than for crew’s wages and
salvage”
13
and
in
terms of the said notice it is hereby agreed that save and subject as otherwise
herein provided, neither the Owner nor any charterer nor the Master of the
Ship
nor any other person has any right, power or authority to create, incur or
permit to be imposed upon the Ship any lien whatsoever other than for crew’s
wages and salvage;
| 6.1.22 |
Conveyance
on default
|
where
the
Ship is (or is to be) sold in exercise of any power contained in this Deed
or
otherwise conferred on the Mortgagee, to execute, forthwith upon request by
the
Mortgagee, such form of conveyance of the Ship as the Mortgagee may
require;
| 6.1.23 |
Anti-drug
abuse
|
without
prejudice to clause 6.1.9, to take all necessary and proper precautions to
prevent any infringements of the Anti-Drug Abuse Act of 1986 of the United
States of America or any similar legislation applicable to the Ship in any
jurisdiction in or to which the Ship shall be employed or located or trade
or
which may otherwise be applicable to the Ship and/or the Owner and, if the
Mortgagee shall so require, to enter into a “Carrier Initiative Agreement” with
the United States Customs and Border Protection and to procure that such
agreement (or any similar agreement hereafter introduced by any Government
Entity of the United States of America) is maintained in full force and effect
and performed by the Owner; and
| 6.1.24 |
Compliance
with Environmental Laws
|
to
comply
with, and procure that all Environmental Affiliates of the Owner comply with,
all Environmental Laws including, without limitation, requirements relating
to
xxxxxxx and establishment of financial responsibility and to obtain and comply
with, and procure that all Environmental Affiliates of the Owner obtain and
comply with, all Environmental Approvals.
| 7 |
Powers
of Mortgagee to protect security and remedy
defaults
|
| 7.1 |
Protective
action
|
The
Mortgagee shall, without prejudice to its other rights, powers and remedies
under any of the Security Documents, be entitled (but not bound) at any time,
and as often as may be necessary, to take any such action as it may in its
discretion think fit for the purpose of protecting or maintaining the security
created by this Deed and the other Security Documents, and all Expenses
attributable thereto shall be payable by the Owner on demand.
| 7.2 |
Remedy
of defaults
|
Without
prejudice to the generality of the provisions of clause 7.1:
| 7.2.1 |
if
the Owner fails to comply with any of the provisions of clause
6.1.1, the
Mortgagee shall be entitled (but not bound) to effect and thereafter
to
maintain all such insurances upon the Ship as in its discretion
it may
think fit in order to procure the compliance with such provisions
or
alternatively, to require the Ship (at the Owner’s risk) to remain in, or
to proceed to and remain in a port designated by the Mortgagee
until such
provisions are fully complied
with;
|
| 7.2.2 |
if
the Owner fails to comply with any of the provisions of clauses
6.1.3,
6.1.5 or 6.1.6, the Mortgagee shall be entitled (but not bound)
to arrange
for the carrying out of such repairs, changes or surveys as it
may deem
expedient or necessary in order to procure the compliance with
such
provisions; and
|
| 7.2.3 |
if
the Owner fails to comply with any of the provisions of clause
6.1.8, the
Mortgagee shall be entitled (but not bound) to pay and discharge
all such
debts, damages, liabilities and outgoings as are therein mentioned
and/or
to take any such measures as it may deem
|
14
expedient
or necessary for the purpose of securing the release of the Ship in order to
procure the compliance with such provisions,
and
the
Expenses attributable to the exercise by the Mortgagee of any such powers shall
be payable by the Owner to the Mortgagee on demand.
| 8 |
Powers
of Mortgagee on Event of
Default
|
| 8.1 |
Powers
|
Upon
the
happening of any Event of Default, the Mortgagee shall become forthwith entitled
by notice given to the Owner in accordance with the provisions of clause 11.2
of
the Loan Agreement to declare the Outstanding Indebtedness to be due and payable
immediately or in accordance with such notice and to terminate the Master Swap
Agreement, whereupon the Outstanding Indebtedness shall become so due and
payable and (whether or not the Mortgagee shall have given any such notice)
the
Mortgagee shall become forthwith entitled, as and when it may see fit, to put
into force and exercise in relation to the Mortgaged Property or any part
thereof all or any of the rights, powers and remedies possessed by it as
mortgagee of the Mortgaged Property (whether at law, by virtue of the Mortgage
and this Deed or otherwise) and in particular (without limiting the generality
of the foregoing):
| 8.1.1 |
to
take possession of the Ship;
|
| 8.1.2 |
to
require that all policies, contracts, certificates of entry and other
records relating to the Insurances (including details of and
correspondence concerning outstanding claims) be delivered forthwith
to
such adjusters and/or brokers and/or other insurers as the Mortgagee
may
nominate;
|
| 8.1.3 |
to
collect, recover, compromise and give a good discharge for, all claims
then outstanding or thereafter arising under the Insurances or any
of them
or in respect of any other part of the Mortgaged Property, and to
take
over or institute (if necessary using the name of the Owner) all
such
proceedings in connection therewith as the Mortgagee in its absolute
discretion thinks fit, and, in the case of the Insurances, to permit
the
brokers through whom collection or recovery is effected to charge
the
usual brokerage therefor;
|
| 8.1.4 |
to
discharge, compound, release or compromise claims in respect of the
Ship
or any other part of the Mortgaged Property which have given or may
give
rise to any charge or lien or other claim on the Ship or any other
part of
the Mortgaged Property or which are or may be enforceable by proceedings
against the Ship or any other part of the Mortgaged
Property;
|
| 8.1.5 |
to
sell the Ship or any share or interest therein with or without prior
notice to the Owner, and with or without the benefit of any charterparty,
and free from any claim by the Owner (whether in admiralty, in equity,
at
law or by statute) by public auction or private contract, at such
place
and upon such terms as the Mortgagee in its absolute discretion may
determine, with power to postpone any such sale, or otherwise to
sell the
Ship pursuant to the Mortgagee’s statutory power of sale under section 35
of the Merchant Shipping (Registration of Ships, Sales and Mortgages)
Law
of 1963 (as amended) and without being answerable for any loss occasioned
by such sale or resulting from postponement thereof and with power,
where
the Mortgagee purchases the Ship, to make payment of the sale price
by
making an equivalent reduction in the amount of the Outstanding
Indebtedness in the manner referred to in clause
9.1;
|
| 8.1.6 |
to
manage, insure, maintain and repair the Ship, and to employ, sail
or lay
up the Ship in such manner and for such period as the Mortgagee,
in its
absolute discretion, deems expedient accounting only for net profits
arising from any such employment;
and
|
15
| 8.1.7 |
to
recover from the Owner on demand all Expenses incurred or paid by
the
Mortgagee in connection with the exercise of the powers (or any of
them)
referred to in this clause 8.1.
|
| 8.2 |
Receiver
|
| 8.2.1 |
Appointment
|
At
any
time after the Outstanding Indebtedness shall have become due and payable in
accordance with a notice given by the Mortgagee to the Owner pursuant to clause
11.2 of the Loan Agreement, the Mortgagee shall be entitled (but not bound)
by
writing executed as a deed or under the hand of any Director or officer of
the
Mortgagee to appoint any person or persons to be a receiver and/or manager
of
the Mortgaged Property or any part thereof (with power to authorise any joint
receiver and/or manager to exercise any power independently of any other joint
receiver and/or manager) and may from time to time fix his remuneration, and
may
remove any receiver and/or manager so appointed and appoint another in his
place. Any receiver and/or manager so appointed shall be the agent of the Owner
and the Owner shall be solely responsible for his acts or defaults and for
his
remuneration, and such receiver and/or manager so appointed shall have all
powers conferred by the United Kingdom Law of Property Xxx 0000 without the
restrictions contained in sections 93 and 103 of that Act and, in addition,
power on behalf of and at the cost of the Owner (notwithstanding any liquidation
of the Owner) to do or omit to do anything which the Owner could do or omit
to
do in relation to the Mortgaged Property or any part thereof and in particular
(but without prejudice to the generality of the foregoing) any such receiver
and/or manager may exercise all the powers and discretions conferred on the
Mortgagee by the Mortgage and this Deed.
| 8.2.2 |
Remuneration
|
Any
Receiver shall be entitled to remuneration appropriate to the work and
responsibilities involved, upon the basis of charging from time to time adopted
by the Receiver in accordance with the current practice of his firm, without
being limited to the maximum rate specified in section 109(6) of the United
Kingdom Law of Property Xxx 0000.
| 8.2.3 |
Liability
of mortgagee in possession
|
Neither
the Mortgagee nor any Receiver shall be liable as mortgagee in possession in
respect of all or any of the Mortgaged Property to account or be liable for
any
loss upon realisation or for any neglect or default of any nature whatsoever
in
connection therewith for which a mortgagee in possession may be liable as
such.
| 8.3 |
Dealings
with Mortgagee or Receiver
|
Upon
any
sale of the Ship or any share or interest therein by the Mortgagee pursuant
to
clause 8.1.5 or pursuant to clause 12.1, or by any Receiver, the purchaser
shall
not be bound to see or enquire whether the Mortgagee’s power of sale has arisen
in the manner provided in this Deed and the sale shall be deemed to be within
the power of the Mortgagee (or the Receiver, as the case may be) and the receipt
of the Mortgagee (or the Receiver, as the case may be) for the purchase money
shall effectively discharge the purchaser who shall not be concerned with the
manner of application of the proceeds of sale or be in any way answerable
therefor and the sale shall operate to divest the Owner of all rights, title
and
interest of any nature whatsoever in the Ship and to bar any such interest
of
the Owner and all persons claiming through or under the Owner.
16
| 9 |
Application
of moneys
|
| 9.1 |
Application
|
All
moneys received by the Mortgagee or any Receiver in respect of sale of the
Ship
or any share or interest therein or in respect of the employment of the Ship
pursuant to the provisions of clause 8.1.6 shall be held by it upon trust in
the
first place to pay or make good the Expenses and the balance shall be applied
in
the manner specified in clause 14.1 of the Loan Agreement.
| 9.2 |
Shortfalls
|
In
the
event that the balance referred to in clause 9.1 is insufficient to pay in
full
the whole of the Outstanding Indebtedness, the Mortgagee or the Receiver, as
the
case may be, shall be entitled to collect the shortfall from the Owner or any
other person liable for the time being therefor.
| 10 |
Remedies
cumulative and other
provisions
|
| 10.1 |
No
implied waivers; remedies
cumulative
|
No
failure or delay on the part of the Mortgagee to exercise any right, power
or
remedy vested in it under any of the Security Documents shall operate as a
waiver thereof, nor shall any single or partial exercise by the Mortgagee of
any
right, power or remedy nor the discontinuance, abandonment or adverse
determination of any proceedings taken by the Mortgagee to enforce any right,
power or remedy preclude any other or further exercise thereof or proceedings
to
enforce the same or the exercise of any other right, power or remedy nor shall
the giving by the Mortgagee of any consent to any act which by the terms of
this
Deed requires such consent prejudice the right of the Mortgagee to withhold
or
give consent to the doing of any other similar act. The remedies provided in
the
Security Documents are cumulative and are not exclusive of any remedies provided
by law.
| 10.2 |
Delegation
|
The
Mortgagee shall be entitled, at any time and as often as may be expedient,
to
delegate all or any of the powers and discretions vested in it by the Mortgage
and this Deed (including the power vested in it by virtue of clause 12) or
any
of the other Security Documents in such manner, upon such terms, and to such
persons as the Mortgagee in its absolute discretion may think fit.
| 10.3 |
Incidental
powers
|
The
Mortgagee shall be entitled to do all acts and things incidental or conducive
to
the exercise of any of the rights, powers or remedies possessed by it as
mortgagee of the Ship (whether at law, under the Mortgage and/or this Deed
or
otherwise) and in particular (but without prejudice to the generality of the
foregoing), upon becoming entitled to exercise any of its powers under clause
8.1, the Mortgagee shall be entitled to discharge any cargo on board the Ship
(whether the same shall belong to the Owner or any other person) and to enter
into such other arrangements in respect of the Ship, her Insurances, management,
maintenance, repair, classification and employment in all respects as if the
Mortgagee was the owner of the Ship, but without being responsible for any
loss
incurred as a result of the Mortgagee doing or omitting to do any such acts
or
things as aforesaid.
| 11 |
Costs
and indemnity
|
| 11.1 |
Costs
|
The
Owner
shall pay to the Mortgagee on demand on a full indemnity basis all expenses
or
liabilities of whatsoever nature (including legal fees, fees of insurance
advisers, printing, out-of-pocket expenses, stamp duties, registration fees
and
other duties or charges) together with any
17
value
added tax or similar tax payable in respect thereof, incurred by the Mortgagee
in connection with the enforcement of, or preservation of any rights under,
the
Mortgage, this Deed or the Master Swap Agreement or otherwise in respect of
the
Outstanding Indebtedness and the security therefor or in connection with the
preparation, completion, execution or registration of the Mortgage, this Deed
or
the Master Swap Agreement.
| 11.2 |
Mortgagee’s
and Receiver’s indemnity
|
The
Owner
hereby agrees and undertakes to indemnify the Mortgagee and any Receiver against
all losses, actions, claims, expenses, demands, obligations and liabilities
whatever and whenever arising which may now or hereafter be incurred by the
Mortgagee or any such Receiver, or by any manager, agent, officer or employee
for whose liability, act or omission it or he may be answerable, in respect
of,
in relation to, or in connection with anything done or omitted in the exercise
or purported exercise of the powers contained in the Mortgage, this Deed or
the
Master Swap Agreement or otherwise in connection therewith and herewith or
with
any part of the Mortgaged Property or otherwise howsoever in relation to, or
in
connection with, any of the matters dealt with in the Mortgage, this Deed or
the
Master Swap Agreement.
| 12 |
Attorney
|
| 12.1 |
Power
|
By
way of
security, the Owner hereby irrevocably appoints the Mortgagee and any Receiver,
jointly and also severally, to be its attorney generally for and in the name
and
on behalf of the Owner, and as the act and deed or otherwise of the Owner to
execute, seal and deliver and otherwise perfect and do all such deeds,
assurances, agreements, instruments, acts and things which may be required
for
the full exercise of all or any of the rights, powers or remedies conferred
by
the Mortgage, this Deed, the Loan Agreement or any of the other Security
Documents, or which may be deemed proper in or in connection with all or any
of
the purposes aforesaid (including, without prejudice to the generality of the
foregoing, the execution and delivery of a xxxx of sale of the Ship). The power
hereby conferred shall be a general power of attorney under the United Kingdom
Powers of Xxxxxxxx Xxx 0000, and the Owner ratifies and confirms, and agrees
to
ratify and confirm, any deed, assurance, agreement, instrument, act or thing
which the Mortgagee or any Receiver may execute or do pursuant thereto. Provided
always that such power shall not be exercisable by or on behalf of the Mortgagee
or any Receiver until the happening of an Event of Default.
| 12.2 |
Exercise
of power
|
The
exercise of such power by or on behalf of the Mortgagee or any Receiver shall
not put any person dealing with the Mortgagee or the Receiver upon any enquiry
as to whether any Event of Default has happened, nor shall such person be in
any
way affected by notice that no such Event of Default has happened, and the
exercise by the Mortgagee or the Receiver of such power shall be conclusive
evidence of the Mortgagee’s or such Receiver’s right to exercise the
same.
| 12.3 |
Filings
|
The
Owner
hereby irrevocably appoints the Mortgagee and any Receiver jointly and also
severally to be its attorney in its name and on its behalf and as its act and
deed or otherwise of it, to agree the form of and to execute and do all deeds,
instruments, acts and things in order to file, record, register or enrol the
Mortgage and/or this Deed in any court, public office or elsewhere which the
Mortgagee or the Receiver may in its or his discretion consider necessary or
advisable, now or in the future, to ensure the legality, validity,
enforceability or admissibility in evidence thereof and any other assurance,
document, act or thing required to be executed by the Owner pursuant to clause
13.
18
| 13 |
Further
assurance
|
The
Owner
hereby further undertakes at its own expense from time to time to execute,
sign,
perfect, do and (if required) register every such further assurance, document,
act or thing as in the opinion of the Mortgagee may be necessary or desirable
for the purpose of more effectually mortgaging and charging the Mortgaged
Property or perfecting the security constituted or intended to be constituted
by
the Mortgage and this Deed.
| 14 |
Notices
|
The
provisions of clause 17.1 of the Loan Agreement shall apply mutatis mutandis
in
respect of any certificate, notice, demand or other communication given or
made
under this Deed.
| 15 |
Counterparts
|
This
Deed
may be entered into in the form of two counterparts, each executed by one of
the
parties, and, provided both the parties shall so execute this Deed, each of
the
executed counterparts, when duly exchanged or delivered, shall be deemed to
be
an original but, taken together, they shall constitute one
instrument.
| 16 |
Severability
of provisions
|
Each
of
the provisions in this Deed are severable and distinct from the others, and
if
at any time one or more such provisions is or becomes invalid, illegal or
enforceable, the validity, legality and enforceability of the remaining
provisions of this Deed shall not in any way be affected or impaired
thereby.
| 17 |
Law,
jurisdiction and language
|
| 17.1 |
Law
|
This
Deed
is governed by and shall be construed in accordance with the laws of
Cyprus.
| 17.2 |
Submission
to jurisdiction
|
For
the
benefit of the Mortgagee, the parties hereto irrevocably agree that any legal
action or proceedings in connection with the Mortgage and/or this Deed may
be
brought in the English courts, or in the Courts of Cyprus or in the courts
of
any other country chosen by the Mortgagee, each of which shall have jurisdiction
to settle any disputes arising out of or in connection with the Mortgage and/or
this Deed. The Owner irrevocably and unconditionally submits to the jurisdiction
of the English courts, the Courts of Cyprus and the courts of any country chosen
by the Mortgagee and irrevocably designates, appoints and empowers Cheeswrights
at present of Xxxxxxxx Xxxxx, 000 Xxxxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX, Xxxxxxx
to
receive, for it and on its behalf, service of process issued out of the English
courts in any legal action or proceedings arising out of or in connection with
the Mortgage and/or this Deed. The submission to such jurisdiction shall not
(and shall not be construed so as to) limit the right of the Mortgagee to take
proceedings against the Owner in any other court of competent jurisdiction
nor
shall the taking of proceedings in any one or more jurisdictions preclude the
taking of proceedings in any other jurisdiction, whether concurrently or not.
The parties further agree that only the courts of England and not those of
any
other State shall have jurisdiction to determine any claim which the Owner
may
have against the Mortgagee arising out of or in connection with the Mortgage
and/or this Deed.
IN
WITNESS whereof
this Deed has been duly executed as a deed the day and year first above
written.
19
|
SIGNED,
SEALED and DELIVERED as a DEED
|
)
|
|||
|
by
|
)
|
|||
|
for
and on behalf of
|
)
|
|
||
|
SOFFIVE
SHIPPING CORPORATION
|
)
|
Attorney-in-Fact
|
||
|
in
the presence of:
|
)
|
|||
|
|
||||
|
Witness
|
||||
|
Name:
|
||||
|
Address.
|
||||
|
Occupation:
|
||||
|
SIGNED,
SEALED and DELIVERED as a DEED
|
)
|
|||
|
by
|
)
|
|||
|
for
and on behalf of
|
)
|
|
||
|
THE
ROYAL BANK OF SCOTLAND
|
)
|
Attorney-in-Fact
|
||
|
in
the presence of:
|
)
|
|||
|
|
||||
|
Witness
|
||||
|
Name:
|
||||
|
Address.
|
||||
|
Occupation:
|
||||
20
Schedule
7
Form
of General Assignment
50
Private
& Confidential
Dated
20 November 2007
|
SOFFIVE
SHIPPING CORPORATION
|
(1)
|
|
and
|
|
|
THE
ROYAL BANK OF SCOTLAND plc
|
(2)
|
GENERAL
ASSIGNMENT
relating
to m.v. Xxxxxx
XXXXXX
XXXX
Contents
|
Clause
|
Page
|
|||
|
1
|
Definitions
|
1
|
||
|
2
|
Assignment
and application of funds
|
4
|
||
|
3
|
Continuing
security and other matters
|
6
|
||
|
4
|
Powers
of Mortgagee to protect security and remedy defaults
|
7
|
||
|
5
|
Powers
of Mortgagee on Event of Default
|
7
|
||
|
6
|
Attorney
|
8
|
||
|
7
|
Further
assurance
|
8
|
||
|
8
|
Costs
and indemnities
|
9
|
||
|
9
|
Remedies
cumulative and other provisions
|
9
|
||
|
10
|
Notices
|
10
|
||
|
11
|
Counterparts
|
10
|
||
|
12
|
Law
and jurisdiction
|
10
|
||
|
Schedule
1 Forms
of Loss Payable Clauses
|
11
|
|||
|
Schedule
2 Form
of Notice of Assignment of Insurances
|
12
|
|||
THIS
DEED OF ASSIGNMENT is
dated
20 November 2007 and made BETWEEN:
| (1) |
SOFFIVE
SHIPPING CORPORATION a
corporation incorporated in Liberia whose registered office is at
00 Xxxxx
Xxxxxx, Xxxxxxxx, Xxxxxxxx of Liberia (the “Owner”);
and
|
| (2) |
THE
ROYAL BANK OF SCOTLAND plc a
company incorporated in Scotland whose registered office is at 00
Xx.
Xxxxxx Xxxxxx, Xxxxxxxxx XX0 0XX, Xxxxxxxx, acting for the purposes
of
this Deed through its branch at The Shipping Business Centre, 0-00
Xxxxx
Xxxxx Xxxxxx, Xxxxxx, XX0X 0XX, Xxxxxxx (the “Mortgagee”).
|
WHEREAS:
| (A) |
by
an Agreement (the “Loan
Agreement”) dated
19 November 2007 and made between the Owner (1) (therein referred
to as
the “Borrower”)
and
the Mortgagee (2) (therein referred to as the “Bank”)
the
Mortgagee agreed (inter alia) to advance by way of a multicurrency
loan to
the Owner, upon the terms and conditions therein contained the sum
of up
to Forty five million Dollars ($45,000,000) or the Equivalent Amount
in an
Optional Currency or Optional Currencies (the “Loan”);
|
| (B) |
by
a Master Swap Agreement dated 19 November 2007 and made between (1)
the
Owner and (2) the Mortgagee, the Mortgagee agreed the terms and conditions
upon which it would enter into an interest rate swap transaction
or
transactions with the Owner in respect of the Loan (whether in whole
or in
part as the case may be from time to
time);
|
| (C) |
pursuant
to the Loan Agreement there has been or will be executed by the Owner
in
favour of the Mortgagee a first priority Cyprus statutory ship mortgage
in
account current form and deed of covenant collateral thereto (together
the
“Mortgage”)
on
the motor vessel Sophia
documented
in the name of the Owner under the laws and flag of the Republic
of Cyprus
under IMO Number 9323912 (the “Ship”)
and
the Mortgage of even date herewith has been or will be registered
in the
Registry of Cyprus Ships as security for the payment by the Owner
of the
Outstanding Indebtedness (as that expression is defined in the Mortgage);
and
|
| (D) |
this
Deed is supplemental to the Loan Agreement, the Master Swap Agreement
and
the Mortgage and to the security thereby created and is the General
Assignment referred to in the Loan Agreement but shall nonetheless
continue in full force and effect notwithstanding any discharge of
the
Mortgage.
|
NOW
THIS DEED WITNESSETH AND IT IS HEREBY AGREED as
follows:
| 1 |
Definitions
|
|
1.1
|
Defined
expressions
|
Words
and
expressions defined in the Loan Agreement or in the Mortgage shall, unless
otherwise defined in this Deed, or the context otherwise requires, have the
same
meanings when used in this Deed.
|
1.2
|
Definitions
|
In
this
Deed, unless the context otherwise requires:
“Approved
Brokers” means
such firm of insurance brokers, appointed by the Owner, as may from time to
time
be approved in writing by the Mortgagee for the purposes of this
Deed;
“Assigned
Property” means:
| (a) |
the
Earnings;
|
1
| (b) |
the
Insurances; and
|
| (c) |
any
Requisition Compensation;
|
“Casualty
Amount” means
Five hundred thousand Dollars ($500,000) (or the equivalent in any other
currency);
“Collateral
Instruments” means
notes, bills of exchange, certificates of deposit and other negotiable and
non-negotiable instruments, guarantees, indemnities and other assurances against
financial loss and any other documents or instruments which contain or evidence
an obligation (with or without security) to pay, discharge or be responsible
directly or indirectly for, any indebtedness or liabilities of the Owner or
any
other person liable and includes any documents or instruments creating or
evidencing a mortgage, charge (whether fixed or floating), pledge, lien,
hypothecation, assignment, trust arrangement or security interest of any
kind;
“Default”
means
any
Event of Default or any event or circumstance which with the giving of notice
or
lapse of time or the satisfaction of any other condition (or any combination
thereof) would constitute an Event of Default;
“Earnings”
means
all
moneys whatsoever from time to time due or payable to the Owner during the
Security Period arising out of the use or operation of the Ship including (but
without limiting the generality of the foregoing) all freight, hire and passage
moneys, income arising under pooling arrangements, compensation payable to
the
Owner in event of requisition of the Ship for hire, remuneration for salvage
and
towage services, demurrage and detention moneys, and damages for breach (or
payments for variation or termination) or any charterparty or other contract
for
the employment of the Ship;
“Expenses”
means
the
aggregate at any relevant time (to the extent that the same have not been
received or recovered by the Mortgagee) of:
|
(a)
|
all
losses, liabilities, costs, charges, expenses, damages and outgoings
of
whatever nature (including without limitation Taxes, repair costs,
registration fees and insurance premiums) suffered, incurred or paid
by
the Mortgagee in connection with the exercise of the powers referred
to in
or granted by the Loan Agreement, the Mortgage, this Deed or any
other of
the Security Documents or otherwise payable by the Owner in accordance
with clause 11 of the Mortgage or clause 8;
and
|
|
(b)
|
interest
on all such losses, liabilities, costs, charges, expenses, damages
and
outgoings from the date on which the same were suffered, incurred
or paid
by the Mortgagee until the date of receipt or recovery thereof (whether
before or after judgment) at a rate per annum calculated in accordance
with clause 3.4 of the Loan Agreement (as conclusively certified
by the
Mortgagee);
|
“Insurances”
means
all
policies and contracts of insurance (which expression includes all entries
of
the Ship in a protection and indemnity or war risks association) which are
from
time to time during the Security Period in place or taken out or entered into
by
or for the benefit of the Owner (whether in the sole name of the Owner, or
in
the joint names of the Owner and the Mortgagee or otherwise) in respect of
the
Ship and her Earnings or otherwise howsoever in connection with the Ship and
all
benefits thereof (including claims of whatsoever nature and return of
premiums);
“Loss
Payable Clauses” means
the
provisions regulating the manner of payment of sums receivable under the
Insurances which are to be incorporated in the relevant insurance documents,
such provisions to be in the forms set out in schedule 1, or in such other
forms
as may from time to time be required or agreed in writing by the
Mortgagee;
2
“Master
Swap Agreement” means
the
agreement made between the Mortgagee and the Owner dated 19 November 2007
mentioned in recital (C) hereto, comprising an ISDA Master Agreement and the
Schedule thereto in the form or substantially in the form set out in schedule
9
to the Loan Agreement, together with any Confirmations (as defined therein)
supplemental thereto;
“Master
Swap Agreement Liabilities” means
at
any relevant time all liabilities actual or contingent, present or future,
of
the Owner to the Mortgagee under the Master Swap Agreement;
“Mortgagee”
includes
the successors in title, Assignees and Transferees of the
Mortgagee;
“Notice
of Assignment of Insurances” means
a
notice of assignment in the form set out in schedule 2, or in such other form
as
may from time to time be required or agreed in writing by the
Mortgagee;
“Outstanding
Indebtedness” means
the
aggregate of the Loan and interest accrued and accruing thereon, the Expenses,
the Master Swap Agreement Liabilities and all other sums of money from time
to
time owing by the Owner to the Mortgagee, whether actually or contingently,
under the Security Documents or any of them;
“Requisition
Compensation” means
all
moneys or other compensation from time to time payable during the Security
Period by reason of the Compulsory Acquisition of the Ship;
“Security
Documents” means
the
Loan Agreement, the Mortgage, the Manager’s Undertaking, the Master Swap
Agreement, the Master Agreement Security Deed and this Deed and any other such
document as may have been or may hereafter be executed to guarantee and/or
secure all or any part of the Loan, interest thereon and other moneys from
time
to time owing by the Owner pursuant to the Loan Agreement and/or the Master
Swap
Agreement (whether or not such document also secures moneys from time to time
owing pursuant to any other document or agreement); and
“Security
Period” means
the
period commencing on the date hereof and terminating upon discharge of the
security created by the Security Documents by payment of all moneys payable
thereunder.
|
1.3
|
Headings
|
Clause
headings and the table of contents are inserted for convenience of reference
only and shall be ignored in the interpretation of this Deed.
|
1.4
|
Construction
of certain terms
|
In
this
Deed, unless the context otherwise requires:
| 1.4.1 |
references
to clauses and schedules are to be construed as references to clauses
of
and schedules to this Deed and references to this Deed include its
schedules;
|
| 1.4.2 |
references
to (or to any specified provision of) this Deed or any other document
shall be construed as references to this Deed, that provision or
that
document as in force for the time being and as amended in accordance
with
the terms thereof, or, as the case may be, with the agreement of
the
relevant parties;
|
| 1.4.3 |
words
importing the plural shall include the singular and vice
versa;
|
| 1.4.4 |
references
to a person shall be construed as references to an individual, firm,
company, corporation, unincorporated body of persons or any Government
Entity;
|
| 1.4.5 |
references
to a “guarantee”
include
references to an indemnity or other assurance against financial loss
including, without limitation, an obligation to purchase assets or
services as a
|
3
consequence
of a default by any other person to pay any Indebtedness and “guaranteed”
shall
be
construed accordingly; and
| 1.4.6 |
references
to statutory provisions shall be construed as references to those
provisions as replaced or amended or re-enacted from time to
time.
|
|
1.5
|
Conflict
with Loan Agreement
|
This
Deed
shall be read together with the Loan Agreement but in case of any conflict
between the two instruments, the provisions of the Loan Agreement shall
prevail.
|
2
|
Assignment
and application of funds
|
|
2.1
|
Assignment
|
By
way of
security for payment of the Outstanding Indebtedness the Owner with full title
guarantee hereby assigns and agrees to assign to the Mortgagee absolutely all
its rights title and interest in and to the Assigned Property and all its
benefits and interests present and future therein. Provided however
that:
| 2.1.1 |
Earnings
|
the
Earnings shall be payable to the Safety Account until such time as a Default
shall occur and the Mortgagee shall direct to the contrary whereupon the Owner
shall forthwith, and the Mortgagee may at any time thereafter, instruct the
persons from whom the Earnings are then payable to pay the same to the Mortgagee
or as it may direct and any Earnings then in the hands of the Owner’s brokers or
other agents shall be deemed to have been received by them for the use and
on
behalf of the Mortgagee;
| 2.1.2 |
Insurances
|
unless
and until a Default shall occur (whereupon all insurance recoveries, other
than
any moneys payable under any loss of earnings insurance, shall be receivable
by
the Mortgagee and applied in accordance with clause 2.3 or clause 2.6 (as the
case may be)):
|
(a)
|
any
moneys payable under the Insurances, other than any moneys payable
under
any loss of earnings insurance, shall be payable in accordance with
the
terms of the relevant Loss Payable Clause and the Mortgagee will
not in
the meantime give any notification to the contrary to the insurers
as
contemplated by the Loss Payable
Clauses;
|
|
(b)
|
any
insurance moneys received by the Mortgagee in respect of any major
casualty (as specified in the relevant Loss Payable Clause) shall,
unless
prior to receipt or whilst such moneys are in the hands of the Mortgagee
there shall have occurred a Default (whereupon such insurance monies
shall
be applied in accordance with clause 2.3 or clause 2.6 (as the case
may
be)), be paid over to the Owner upon the Owner furnishing evidence
satisfactory to the Mortgagee that all loss and damage resulting
from such
casualty has been properly made good and repaired, and that all repair
accounts and other liabilities whatsoever in connection with the
casualty
have been fully paid and discharged by the Owner, provided however
that
the insurers with whom the fire and usual marine risks insurances
are
effected may, in the case of a major casualty, and with the previous
consent in writing of the Mortgagee, make payment on account of repairs
in
the course of being effected; and
|
|
(c)
|
any
moneys payable under any loss of earnings insurance shall be payable
in
accordance with the terms of the relevant Loss Payable Clause and
shall be
subject to such provisions of this clause 2 as shall apply to Earnings
and
the Mortgagee will not give any notification to the insurers as
contemplated in such Loss Payable Clause unless
|
4
and
until
the Mortgagee shall have become entitled under clause 2.1.1 to direct that
the
Earnings be paid to the Mortgagee.
|
2.2
|
Notice
|
The
Owner
hereby covenants and undertakes with the Mortgagee that it will from time to
time upon the written request of the Mortgagee give written notice (in such
form
as the Mortgagee shall reasonably require) of the assignment herein contained
to
the persons from whom any part of the Assigned Property is or may be due and
that it will procure that the interest of the Mortgagee in the Insurances shall
be endorsed on the instruments of insurance from time to time issued in
connection with such of the Insurances as are placed with the Approved Brokers
by means of a Notice of Assignment of Insurances (signed by the Owner and by
any
other assured who shall have assigned its interest in the insurances to the
Mortgagee).
|
2.3
|
Application
|
All
moneys received by the Mortgagee in respect of:
| 2.3.1 |
recovery
under the Insurances (other than under any loss of earnings insurance
and
any such sum or sums as may have been received by the Mortgagee in
accordance with the relevant Loss Payable Clause in respect of a
major
casualty as therein defined and paid over to the Owner as provided
in
clause 2.1.:2(b) or which fall to be otherwise applied under clause
2.6);
and
|
| 2.3.2 |
Requisition
Compensation,
|
shall
be
held by it upon trust in the first place to pay or make good the Expenses and
the balance shall be applied in the manner specified in clause 14.1 of the
Loan
Agreement.
|
2.4
|
Shortfalls
|
In
the
event that the balance referred to in clause 2.3 is insufficient to pay in
full
the whole of the Outstanding Indebtedness, the Mortgagee shall be entitled
to
collect the shortfall from the Owner or any other person liable for the time
being therefor.
|
2.5
|
Application
of Earnings received by
Mortgagee
|
Any
moneys received by the Mortgagee in respect of the Earnings shall:
| 2.5.1 |
if
received by the Mortgagee, or in the hands of the Mortgagee, prior
to the
occurrence of an Event of Default be retained by the Mortgagee and
shall
be paid over by the Mortgagee to the Owner at such times, in such
amounts
and for such purposes and/or shall be applied by the Mortgagee in
or
towards satisfaction of any sums from time to time accruing due and
payable by the Owner under the Security Documents or any of them
or by
virtue of payment demanded thereunder, in each case as the Mortgagee
may
in its absolute discretion determine;
and
|
| 2.5.2 |
if
received by the Mortgagee, or in the hands of the Mortgagee, after
the
occurrence of an Event of Default, be applied by the Mortgagee in
the
manner specified in clause 2.3 and/or clause 2.5.1, as the Mortgagee
may
in its absolute discretion
determine.
|
|
2.6
|
Application
of Insurances received by
Mortgagee
|
Subject
to clause 2.3, any moneys received by the Mortgagee in respect of the Insurances
(other than in respect of recovery under any loss of earnings insurance or
in
respect of a Total Loss) shall:
5
| 2.6.1 |
if
received by the Mortgagee, or in the hands of the Mortgagee, after
the
occurrence of a Default but prior to the occurrence of an Event of
Default, be retained by the Mortgagee and shall be paid over by the
Mortgagee to the Owner at such times, in such amounts and for such
purposes and/or shall be applied by the Mortgagee in or towards
satisfaction of any sums from time to time accruing due and payable
by the
Owner under the Security Documents or any of them or by virtue of
payment
demanded thereunder, in each case as the Mortgagee may in its absolute
discretion determine; and
|
| 2.6.2 |
if
received by the Mortgagee, or in the hands of the Mortgagee, after
the
occurrence of an Event of Default, be applied by the Mortgagee in
the
manner specified in clause 2.3 and/or clause 2.6.1, as the Mortgagee
may
in its absolute discretion
determine.
|
|
2.7
|
Use
of Owners name
|
The
Owner
covenants and undertakes with the Mortgagee to do or permit to be done each
and
every act or thing which the Mortgagee may from time to time require to be
done
for the purpose of enforcing the Mortgagee’s rights under this Deed and to allow
its name to be used as and when required by the Mortgagee for that
purpose.
|
2.8
|
Reassignment
|
Upon
payment and discharge in full to the satisfaction of the Mortgagee of the
Outstanding Indebtedness and the Master Swap Agreement Liabilities, the
Mortgagee shall, at the request and cost of the Owner, re-assign the Earnings,
the Insurances and any Requisition Compensation to the Owner or as it may
direct.
|
3
|
Continuing
security and other matters
|
|
3.1
|
Continuing
security
|
The
security created by this Deed shall:
| 3.1.1 |
be
held by the Mortgagee as a continuing security for the payment of
the
Outstanding Indebtedness and the performance and observance of and
compliance with all of the covenants, terms and conditions contained
in
the Security Documents, express or implied, and that the security
so
created shall not be satisfied by any intermediate payment or satisfaction
of any part of the amount hereby and thereby secured (or by any settlement
of accounts between the Owner or any other person who may be liable
to the
Mortgagee in respect of the Outstanding Indebtedness or any part
thereof
and the Mortgagee);
|
| 3.1.2 |
be
in addition to, and shall not in any way prejudice or affect, and
may be
enforced by the Mortgagee without prior recourse to, the security
created
by any other of the Security Documents or by any present or future
Collateral Instruments, right or remedy held by or available to the
Mortgagee or any right or remedy of the Mortgagee thereunder;
and
|
| 3.1.3 |
not
be in any way prejudiced or affected by the existence of any of the
other
Security Documents or any such Collateral Instrument, rights or remedies
or by the same becoming wholly or in part void, voidable or unenforceable
on any ground whatsoever or by the Mortgagee dealing with, exchanging,
varying or failing to perfect or enforce any of the same, or giving
time
for payment or performance or indulgence or compounding with any
other
person liable.
|
|
3.2
|
Rights
additional
|
All
the
rights, powers and remedies vested in the Mortgagee hereunder shall be in
addition to and not a limitation of any and every other right, power or remedy
vested in the Mortgagee under the Loan Agreement, this Deed, the other Security
Documents or any Collateral Instrument or at law
6
and
all
the rights, powers and remedies so vested in the Mortgagee may be exercised
from
time to time and as often as the Mortgagee may deem expedient.
|
3.3
|
No
enquiry
|
The
Mortgagee shall not be obliged to make any enquiry as to the nature or
sufficiency of any payment received by it under the Mortgage and/or this Deed
or
to make any claim or take any action to collect any moneys hereby assigned
or to
enforce any rights or benefits hereby assigned to the Mortgagee or to which
the
Mortgagee may at any time be entitled under the Mortgage and/or this
Deed.
|
3.4
|
Obligations
of Owner and Mortgagee
|
The
Owner
shall remain liable to perform all the obligations assumed by it in relation
to
the Assigned Property and the Mortgagee shall be under no obligation of any
kind
whatsoever in respect thereof or be under any liability whatsoever in the event
of any failure by the Owner to perform it obligations in respect
thereof.
|
3.5
|
Discharge
of Mortgage
|
Notwithstanding
that this Deed is expressed to be supplemental to the Mortgage it shall continue
in full force and effect after any discharge of the Mortgage.
|
4
|
Powers
of Mortgagee to protect security and remedy
defaults
|
|
4.1
|
Protective
action
|
The
Mortgagee shall, without prejudice to its other rights, powers and remedies
under any of the Security Documents, be entitled (but not bound) at any time,
and as often as may be necessary, to take any such action as it may in its
discretion think fit for the purpose of protecting or maintaining the security
created by this Deed and the other Security Documents, and all Expenses
attributable thereto shall be payable by the Owner on demand.
|
4.2
|
Remedy
of defaults
|
Without
prejudice to the generality of the provisions of clause 4.1, if the Owner fails
to comply with the provisions of clause 6.1.1(a) of the Deed of Covenant, the
Mortgagee shall become forthwith entitled (but not bound) to effect and
thereafter to maintain all such insurances upon the Ship as in its discretion
it
may think fit in order to procure the compliance with such provisions or
alternatively, to require the Ship (at the Owner’s risk) to remain in, or to
proceed to and remain in, a port designated by the Mortgagee until such
provisions are fully complied with and the Expenses attributable to the exercise
by the Mortgagee of any such powers shall be payable by the Owner on
demand.
|
5
|
Powers
of Mortgagee on Event of
Default
|
|
5.1
|
Powers
|
At
any
time after the occurrence of an Event of Default the Mortgagee shall forthwith
become entitled (but not bound) as and when it may see fit, to exercise in
relation to the Assigned Property or any part thereof all or any of the rights,
powers and remedies possessed by it as assignee and/or chargee of the Assigned
property (whether at law, by virtue of this deed or otherwise) and in particular
(without limiting the generality of the foregoing):
| 5.1.1 |
to
require that all policies, contracts, certificates of entry and other
records relating to the Insurances (including details of and
correspondence concerning outstanding claims)
|
7
be
delivered forthwith to such adjusters and/or brokers and/or other insurers
as
the Mortgagee may nominate;
| 5.1.2 |
to
collect, recover, compromise and give a good discharge for, all claims
then outstanding or thereafter arising under the Insurances or any
of them
or in respect of the Earnings or Requisition Compensation or any
part
thereof, and to take over or institute (if necessary using the name
of the
Owner) all such proceedings in connection therewith as the Mortgagee
in
its absolute discretion thinks fit, and, in the case of the Insurances,
to
permit any brokers through whom collection or recovery is effected
to
charge the usual brokerage
therefor;
|
| 5.1.3 |
to
discharge, compound, release or compromise claims in respect of the
Earnings, Insurances or Requisition Compensation or any part thereof
which
have given or may give rise to any charge or lien or other claim
on the
Earnings, Insurances or Requisition Compensation or any part thereof
or
which are or may be enforceable by proceedings against the Earnings,
Insurances or Requisition Compensation or any part thereof;
and
|
| 5.1.4 |
to
recover from the Owner on demand all Expenses incurred or paid by
the
Mortgagee in connection with the exercise of the powers (or any of
them)
referred to in this clause 5.1.
|
|
6
|
Attorney
|
|
6.1
|
Appointment
|
By
way of
security, the Owner hereby irrevocably appoints the Mortgagee to be its attorney
generally for and in the name and on behalf of the Owner, and as the act and
deed or otherwise of the Owner to execute, seal and deliver and otherwise
perfect and do all such deeds, assurances, agreements, instruments, acts and
things which may be required for the full exercise of all or any of the rights,
powers or remedies conferred hereby or which may be deemed proper in or in
connection with all or any of the purposes aforesaid. The power hereby conferred
shall be a general power of attorney under the Powers of Xxxxxxxx Xxx 0000,
and
the Owner ratifies and confirms, and agrees to ratify and confirm, any deed,
assurance, agreement, instrument, act or thing which the Mortgagee may execute
or do pursuant thereto. Provided always that such power shall not be exercisable
by or on behalf of the Mortgagee until the happening of any Event of
Default.
|
6.2
|
Exercise
of power
|
The
exercise of such power by or on behalf of the Mortgagee shall not put any person
dealing with the Mortgagee upon any enquiry as to whether any Event of Default
has happened, nor shall such person be in any way affected by notice that no
such Event of Default has happened, and the exercise by the Mortgagee of such
power shall be conclusive evidence of the Mortgagee’s right to exercise the
same.
|
6.3
|
Filings
|
The
Owner
hereby irrevocably appoints the Mortgagee to be its attorney in its name and
on
its behalf and as its act and deed or otherwise of it to agree the form of
and
to execute and do all deeds, instruments, acts and things in order to file,
record, register or enrol this Deed in any court, public office or elsewhere
which the Mortgagee may in its discretion consider necessary or advisable,
now
or in the future, to ensure the legality, validity, enforceability or
admissibility in evidence thereof.
|
7
|
Further
assurance
|
The
Owner
hereby further undertakes at its own expense from time to time to execute,
sign,
perfect, do and (if required) register every such further assurance, document,
act or thing as in the opinion of the Mortgagee may be necessary or desirable
for the purpose of more effectually
8
mortgaging
and charging the Assigned Property or perfecting the security constituted or
intended to be constituted by this Deed.
|
8
|
Costs
and indemnities
|
|
8.1
|
Costs
|
The
Owners shall pay to the Mortgagee on demand on a full indemnity basis all
expenses or liabilities of whatever nature (including legal fees, fees of
insurance advisers, printing, out-of-pocket expenses, stamp duties, registration
fees and other duties or charges) together with any value added tax or similar
tax payable in respect thereof, incurred by the Mortgagee in connection with
the
exercise or enforcement of, or preservation of any rights under, this Deed
or
otherwise in respect of the Outstanding Indebtedness, the Master Swap Agreement
Liabilities and the security therefor, or in connection with the preparation,
completion, execution or registration of this Deed.
|
8.2
|
Mortgagee’s
indemnity
|
The
Owner
hereby agrees and undertakes to indemnify the Mortgagee against all losses,
actions, claims, expenses, demands, obligations and liabilities whatever and
whenever arising which may now or hereafter be incurred by the Mortgagee or
by
any manager, agent, officer or employee for whose liability, act or omission
the
Mortgagee may be answerable in respect of, in relation to, or in connection
with
anything done or omitted in the exercise or purported exercise of the powers
contained in this Deed or otherwise in connection with such powers or with
this
Deed or with the Ship, its Earnings, Requisition Compensation and Insurances
or
otherwise howsoever in relation to, or in connection with, any of the matters
dealt with in this Deed.
|
9
|
Remedies
cumulative and other
provisions
|
|
9.1
|
No
implied waivers; remedies
cumulative
|
No
failure or delay on the part of the Mortgagee to exercise any right, power
or
remedy vested in it under this Deed shall operate as a waiver thereof, nor
shall
any single or partial exercise by the Mortgagee of any right, power or remedy
nor the discontinuance, abandonment or adverse determination of any proceedings
taken by the Mortgagee to enforce any right, power or remedy preclude any other
or further exercise thereof or proceedings to enforce the same or the exercise
of any other right, power or remedy, nor shall the giving by the Mortgagee
of
any consent to any act which by the terms of this Deed requires such consent
prejudice the right of the Mortgagee to give or withhold consent to the doing
of
any other similar act. The remedies provided in this Deed are cumulative and
are
not exclusive of any remedies provided by law.
|
9.2
|
Delegation
|
The
Mortgagee shall be entitled, at any time and as often as may be expedient,
to
delegate all or any of the powers and discretions vested in it by this Deed
in
such manner, upon such terms, and to such persons as the Mortgagee in its
absolute discretion may think fit.
|
9.3
|
Incidental
powers
|
The
Mortgagee shall be entitled to do all acts and things incidental or conducive
to
the exercise of any of the rights, powers or remedies possessed by it as
mortgagee of the Ship (whether at law, under this Deed or otherwise) and in
particular (but without prejudice to the generality of the foregoing) upon
becoming entitled to exercise any of its powers under clause 8.1 of the
Mortgage, the Mortgagee shall be entitled to discharge any cargo on board the
Ship (whether the same shall belong to the Owner or any other person) and to
enter into such other arrangements respecting the Ship, the insurances,
management, maintenance, repair, classification and employment in all respects
as if the Mortgagee was the owner of the Ship, but without being
9
responsible
for any loss incurred as a result of the Mortgagee doing or omitting to do
any
such acts or things as aforesaid.
|
10
|
Notices
|
The
provisions of clause 17.1 of the Loan Agreement shall apply mutatis mutandis
in
respect of any certificate, notice, demand or other communication given or
made
under this Deed, save that references therein to “this Agreement”, the
“Borrower” and the “Bank” shall be construed as being references to this Deed,
the Owner and the Mortgagee, respectively.
|
11
|
Counterparts
|
This
Deed
may be entered into in the form of two counterparts, each executed by one of
the
parties, and, provided both the parties shall so execute this Deed, each of
the
executed counterparts, when duly exchanged or delivered, shall be deemed to
be
an original but, taken together, they shall constitute one
instrument.
|
12
|
Law
and jurisdiction
|
|
12.1
|
Law
|
This
Deed
is governed by and shall be construed in accordance with English
law.
|
12.2
|
Submission
to jurisdiction
|
For
the
benefit of the Mortgagee, the parties hereto irrevocably agree that any legal
action or proceedings in connection with this Deed may be brought in the English
courts, or in the courts of any other country chosen by the Mortgagee, each
of
which shall have jurisdiction to settle any disputes arising out of or in
connection with this Deed. The Owner irrevocably and unconditionally submits
to
the jurisdiction of the English courts and the courts of any country chosen
by
the Mortgagee and irrevocably designates, appoints and empowers Cheeswrights
at
present of Xxxxxxxx Xxxxx, 000 Xxxxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX, Xxxxxxx
to
receive, for it and on its behalf, service of process issued out of the English
courts in any legal action or proceedings arising out of or in connection with
this Deed. The submission to such jurisdiction shall not (and shall not be
construed so as to) limit the right of the Mortgagee to take proceedings against
the Owner in any other court of competent jurisdiction nor shall the taking
of
proceedings in any one or more jurisdictions preclude the taking of proceedings
in any other jurisdiction, whether concurrently or not.
The
parties further agree that only the courts of England and not those of any
other
State shall have jurisdiction to determine any claim which the Owner may have
against the Mortgagee arising out of or in connection with this
Deed.
|
12.3
|
Contracts
(Rights of Third Parties) Xxx
0000
|
Not
terms
of this Deed is enforceable under the Contracts (Right of Third Parties) Xxx
0000 by a person who is not party to this Deed.
IN
WITNESS whereof
this Deed has been duly executed as a deed the day and year first above
written.
10
Schedule
1
Forms
of Loss Payable Clauses
|
1
|
Hull
and machinery (marine and war
risks)
|
By
a
General Assignment dated [•1 2007 SOFFIVE
SHIPPING CORPORATION (the
“Owner”)
has
assigned to THE
ROYAL BANK OF SCOTLAND plc of
the
Shipping Business Centre, 0-00 Xxxxx Xxxxx Xxxxxx, Xxxxxx XX0X 0XX, Xxxxxxx
(the
“Mortgagee”)
all
the
Owner’s rights, title and interest in and to all policies and contracts of
insurance from time to time taken out or entered into by or for the benefit
of
the Owner in respect of m.v. Sophia
and
accordingly:
|
(a)
|
all
claims hereunder in respect of an actual or constructive or compromised
or
arranged total loss, and all claims in respect of a major casualty
(that
is to say any casualty the claim in respect of which exceeds $500,000
(or
the equivalent in any other currency) inclusive of any deductible)
shall
be paid in full to the Mortgagee or to its order;
and
|
|
(b)
|
all
other claims hereunder shall be paid in full to the Owner or to its
order,
unless and until the Mortgagee shall have notified the insurers hereunder
to the contrary, whereupon all such claims shall be paid to the Mortgagee
or to its order.
|
|
2
|
Protection
and indemnity risks
|
Payment
of any recovery which SOFFIVE
SHIPPING CORPORATION of
00
Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx of Liberia (the “Owner”)
is
entitled to make out of the funds of the Association in respect of any
liability, costs or expenses incurred by the Owner, shall be made to the Owner
or to its order, unless and until the Association receives notice to the
contrary from THE
ROYAL BANK OF SCOTLAND plc of
The
Shipping Business Centre, 0-00 Xxxxx Xxxxx Xxxxxx, Xxxxxx, XX0X 0XX, Xxxxxxx
(the “Mortgagee”)
in
which
event all recoveries shall thereafter be paid to the Mortgagee or its order;
provided always that no liability whatsoever shall attach to the Association,
its Managers or their agents for failure to comply with the latter obligation
until the expiry of two clear business days from the receipt of such
notice.
|
3
|
War
risks
|
It
is
noted that THE
ROYAL BANK OF SCOTLAND plc of
The
Shipping Business Centre, 0-00 Xxxxx Xxxxx Xxxxxx, Xxxxxx XX0X 0XX, Xxxxxxx
(the
“Mortgagee”)
is
interested as first mortgagee in the subject matter of this insurance. Save
as
hereinafter provided, all claims (whether in respect of actual, constructive,
arranged or compromised total loss or otherwise) which, but for this Loss
Payable Clause, would be payable to SOFFIVE
SHIPPING CORPORATION of
00
Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx of Liberia (the “Owner”)
shall
be
payable to the Mortgagee, provided always that unless and until notice in
writing to the contrary has been received by the Association, claims (other
than
total loss claims) not exceeding Five hundred thousand United States Dollars
(US$500,000) (or the equivalent in any other currency) in respect of any one
claim shall be paid direct to the Owner or to its order.
|
4
|
Loss
of earnings
|
By
a
General Assignment dated [•1 2007 SOFFIVE
SHIPPING CORPORATION of
00
Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx of Liberia (the “Owner”)
has
assigned to THE
ROYAL BANK OF SCOTLAND plc of
The
Shipping Business Centre, 0-00 Xxxxx Xxxxx Xxxxxx, Xxxxxx, XX0X 0XX, Xxxxxxx
(the “Mortgagee”)
its
rights, title and interest in and to all policies and contracts of insurance
from time to time taken out or entered into by or for the benefit of the Owner
in respect of m.v. Sophia
and
her
earnings and accordingly all claims hereunder shall be paid in full to the
Safety Account designated [•] unless and until the Mortgagee shall have notified
the insurers hereunder to the contrary, whereupon all such claims shall be
paid
to the Mortgagee or its order.
11
Schedule
2
Form
of Notice of Assignment of Insurances
(For
attachment by way of endorsement to the Policy)
SOFFIVE
SHIPPING CORPORATION
of 00
Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx of Liberia the owner of the m.v Sophia
HEREBY
GIVES NOTICE that by a Deed of Assignment dated [•] and entered into by us with
THE
ROYAL BANK OF SCOTLAND plc of
The
Shipping Business Centre, 0-00 Xxxxx Xxxxx Xxxxxx, Xxxxxx, XX0X 0XX, Xxxxxxx
there has been assigned by us to THE
ROYAL BANK OF SCOTLAND plc as
first
mortgagees of the said vessel all insurances in respect thereof, including
the
insurances constituted by the Policy whereon this notice is
endorsed.
|
|
|
|
Signed
|
|
|
For
and on behalf of
|
|
|
SOFFIVE
SHIPPING CORPORATION
|
|
|
Dated:
[•]
|
|
12
|
EXECUTED
as a DEED
|
)
|
|||
|
by
|
)
|
|||
|
for
and on behalf of
|
)
|
|
||
|
SOFFIVE
SHIPPING CORPORATION
|
)
|
Attorney-in-Fact
|
||
|
in
the presence of:
|
)
|
|||
|
|
||||
|
Witness
|
||||
|
Name:
|
||||
|
Address.
|
||||
|
Occupation:
|
||||
|
EXECUTED
as a DEED
|
)
|
|||
|
by
|
)
|
|||
|
for
and on behalf of
|
)
|
|
||
|
THE
ROYAL BANK OF SCOTLAND
|
)
|
Attorney-in-Fact
|
||
|
in
the presence of:
|
)
|
|||
|
|
||||
|
Witness
|
||||
|
Name:
|
||||
|
Address.
|
||||
|
Occupation:
|
||||
13
Schedule
8
Form
of Manager’s Undertaking
50
Private
& Confidential
Manager’s
Undertaking
|
To:
The
Royal Bank of Scotland plc
|
|
|
The
Shipping Business Centre
|
|
|
0-00
Xxxxx Xxxxx Xxxxxx
|
|
|
Xxxxxx
XX0X 0XX
|
|
|
Xxxxxxx
|
|
|
From:
|
Safety
Management Overseas S.A.
|
|
Edificio
Torre Universal
|
|
|
Piso
12 Xxxxxxx Xxxxxxxx Xxxx
|
|
|
X.X.
Xxx 0000 Xxxxxx
|
|
|
Xxxxxxxx
of Panama
|
|
20
November 2007
Dear
Sirs
Multicurrency
loan of up to $45,000,000 to Soffive Shipping Corporation
|
1
|
Loan
Agreement
|
We
understand that under a Loan Agreement (the “Loan
Agreement”) dated
19
November 2007 between (1) yourselves The Royal Bank of Scotland plc (the
“Bank”
which
expression includes the Bank’s successors and assigns) and (2) Soffive Shipping
Corporation (the “Borrower”)
the
Bank
has agreed to make a multicurrency loan of up to $45,000,000 (the “Loan”)
to
the
Borrower and that it is a condition to the Bank’s agreement to make the Loan to
the Borrower that we, Safety Management Overseas S.A. (the “Manager”),
enter
into this letter of undertaking (the “Letter”)
in
favour
of the Bank.
Words
and
expressions defined in the Loan Agreement shall, unless otherwise specified
herein, have the same meanings when used herein.
|
2
|
Confirmation
of appointment
|
We
hereby
confirm that we have been appointed as the manager of m.v. Sophia
(the
“Ship”)
registered
under Cyprus flag at the Port of Lirnassol pursuant to a management agreement
(the “Management
Agreement”) dated
19
April 2007 made between ourselves and the Borrower and that we have accepted
out
appointment thereunder in accordance with the terms and conditions
thereof.
1
|
3
|
Representation
and warranty
|
|
3.1
|
We
hereby represent and warrant that the copy of the Management Agreement
set
out in Appendix 1 to this Letter is a true and complete copy of the
Management Agreement, that the Management Agreement constitutes valid
and
binding obligations of the Manager enforceable in accordance with
its
terms and that there have been no amendments or variations thereto
or
defaults thereunder by the Manager or, to the best of the Manager’s
knowledge and belief, the Borrower.
|
|
3.2
|
We
hereby confirm that the representations and warranties set out in
clauses
8.2.9, 8.2.10 and 8.2.11 of the Loan Agreement are true and correct
in all
respects.
|
|
4
|
Undertakings
|
The
Manager undertakes with the Bank that throughout the Security Period (as such
term is defined in the General Assignment dated 20 November 2007 (the
“General
Assignment”) executed
by the Borrower in favour of the Bank):
|
4.1
|
the
Manager will not agree or purport to agree to any amendment or variation
of the Management Agreement without the prior written consent of
the
Bank;
|
|
4.2
|
the
Manager will procure that any sub-manager appointed by it pursuant
to the
provisions of the Management Agreement will, on or before the date
of such
appointment, enter into an undertaking in favour of the Bank in
substantially the same form (mutatis mutandis) as this
Letter;
|
|
4.3
|
the
Manager will not, without the prior written consent of the Bank,
take any
action or institute any proceedings or make or assert any claim on
or in
respect of the Ship or its policies and contracts of insurance (which
expression includes all entries of the Ship in a protection and indemnity
or war risks association) which are from time to time during the
Security
Period (as such term is defined in the General Assignment) in place
or
taken out or entered into by or for the benefit of the Borrower (whether
in the sole name of the Borrower or in the joint names of the Borrower
and
the Bank or otherwise) in respect of the Ship and her Earnings (as
such
term is defined below) or otherwise howsoever in connection with
the Ship
and all benefits thereof (including claims of whatsoever nature and
return
of premiums) (together the “Insurances”) or all moneys whatsoever from
time to time due or payable to the Borrower during the Security Period
(as
such term is defined in the General Assignment) arising out of the
use or
operation of the Ship including (but without limiting the generality
of
the foregoing) all freight, hire and passage moneys, income arising
under
pooling arrangements, compensation payable to the Borrower in the
event of
requisition of the Ship for hire, remuneration for salvage and towage
services, demurrage and detention moneys, and damages for breach
(or
payments for variation or termination) of any charterparty or other
contract for the employment of the Ship (the “Earnings”)
or any other property or other assets of the Borrower which the Bank
has
previously advised the Manager are subject to any Encumbrance or
right of
set-off in favour of the Bank by virtue of any of the security documents
executed in favour of the Bank pursuant to the Loan
Agreement;
|
|
4.4
|
the
Manager does hereby subordinate any claim that it may have against
the
Borrower or otherwise in respect of the Ship and its Earnings, Insurances
and Requisition Compensation (as such term is defined in the General
Assignment) to the claims of the Bank under the Loan Agreement and
the
other Security Documents and undertakes to exercise no right to which
it
may be entitled in respect of the Borrower and/or the Ship and/or
its
Earnings and/or Insurances and/or Requisition Compensation in competition
with the Bank;
|
|
4.5
|
the
Manager will discontinue any such action or proceedings or claim
which may
have been taken, instituted or made or asserted, promptly upon notice
from
the Bank to do so;
|
|
4.6
|
the
Manager will promptly notify the Bank if at any time the amount owed
by
the Borrower to the Manager pursuant to the Management Agreement
(whether
in respect of the Manager’s
|
2
remuneration
or disbursements or otherwise) exceeds US$100,000 or the equivalent in other
currencies; and
|
4.7
|
the
Manager will provide the Bank with such information concerning the
Ship as
the Bank may from time to time reasonably
require.
|
|
5
|
Insurance
assignment
|
|
5.1
|
By
way of security for the aggregate of the Loan and interest accrued
and
accruing thereon, the Expenses (as such term is defined in the General
Assignment), the Master Swap Agreement Liabilities (as such term
is
defined in the General Assignment) and all other sums of money from
time
to time owing by the Borrower to the Bank, whether actually or
contingently, under the Security Documents, the Master Swap Agreement
or
any of them to which the Borrower is or is to be a party (the
“Outstanding
Indebtedness”)
the Manager with full title guarantee hereby irrevocably and
unconditionally assigns and agrees to assign to the Bank all of the
Manager’s rights, title and interest in and to and the benefit of the
Insurances.
|
|
5.2
|
The
Manager hereby undertakes to procure that a duly completed notice
in the
form set out in Appendix 2 to this Letter is given to all insurers
of the
Ship and to procure that such notice is promptly endorsed on all
policies
and entries in respect of the Insurances and agrees promptly to authorise
and/or instruct any broker, insurer or association with or through
whom
Insurances may be effected to endorse on any policy or entry or otherwise
to give effect to such loss payable clause as may be stipulated by
the
Bank.
|
|
5.3
|
The
Bank shall, at the Manager’s cost, re-assign to the Manager all the
Manager’s right, title and interest in the Insurances upon the Outstanding
Indebtedness being discharged in full to the satisfaction of the
Bank.
|
|
5.4
|
Any
moneys in respect of the Insurances which would (but for the assignment
contained in clause 5.1 above) be payable to the Manager shall be
applied
in accordance with clause 2.3 of the General Assignment and/or (as
the
case may be) clause 2.6 of the General
Assignment.
|
|
6
|
Law
and jurisdiction
|
|
6.1
|
The
agreement constituted by this Letter shall be governed by and construed
in
accordance with English law.
|
|
6.2
|
The
Manager agrees, for the benefit of the Bank, that any legal action
or
proceedings arising out of or in connection with this letter against
the
Manager or any of its assets may be brought in the English courts.
The
Manager irrevocably and unconditionally submits to the jurisdiction
of
such courts and whoever irrevocably designates, appoints and empowers
Cheeswrights at present of Xxxxxxxx Xxxxx, 000 Xxxxxxxxxx Xxxxxx,
Xxxxxx
XX0X 0XX, Xxxxxxx to receive, for it and on its behalf, service of
process
issued out of the English courts in any such legal action or proceedings.
The submission to such jurisdiction shall not (and shall not be construed
so as to) limit the rights of the Bank to take any proceedings against
the
Manager in the courts of any other competent jurisdiction nor shall
the
taking of proceedings in any one or more jurisdictions preclude the
taking
of proceedings in any other jurisdiction, whether concurrently or
not.
|
|
6.3
|
No
term of this Letter is enforceable under the Contracts (Rights of
Third
Parties) Xxx 0000 by a person who is not a party to this Letter or
to whom
this Letter is not addressed.
|
|
Yours
faithfully
|
|
|
|
|
|
For
and on behalf of
|
|
|
SAFETY
MANAGEMENT OVERSEAS S.A.
|
|
3
Appendix
1
Copy
of the Management Agreement
4
Appendix
2
Notice
of Assignment
We,
SAFETY
MANAGEMENT OVERSEAS S.A., the
managers of m.v. Sophia,
HEREBY
GIVE NOTICE
that by a first assignment dated [•] 2007 and entered into by us with
THE
ROYAL BANK OF SCOTLAND plc there
has
been assigned by us to the said The Royal Bank of Scotland plc as first
assignees all of our right, title and interest in and to the insurances in
respect of the said Ship including the insurances constituted by the Policy
whereon this notice is endorsed.
|
|
|
|
SIGNED
|
|
|
for
and on behalf of
|
|
|
SAFETY
MANAGEMENT OVERSEAS S.A.
|
|
|
Dated:
[•]
|
|
5
Schedule
9
Form
of Master Swap Agreement
51
(Multicurrency-Cross
Border)
ISDA®
International
Swaps & Derivatives Association, Inc.
MASTER
AGREEMENT
Dated
19
November 2007
The
Royal Bank of Scotland plc and Soffive Shipping
Corporation
have
entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming those
Transactions.
Accordingly,
the parties agree as follows:-
| 1. |
Interpretation
|
(a) Definitions.
The
terms defined in Section 14 and in the Schedule will have the meanings therein
specified for the purpose of this Master Agreement.
(b) Inconsistency.
In the
event of any inconsistency between the provisions of the Schedule and the other
provisions of this Master Agreement, the Schedule will prevail. In the event
of
any inconsistency between the provisions of any Confirmation and this Master
Agreement (including the Schedule), such Confirmation will prevail for the
purpose of the relevant Transaction.
(c) Single
Agreement.
All
Transactions are entered into in reliance on the fact that this Master Agreement
and all Confirmations form a single agreement between the parties (collectively
referred to as this "Agreement"), and the parties would not otherwise enter
into
any Transactions.
| 2. |
Obligations
|
| (a) |
General
Conditions.
|
(i) Each
party will make each payment or delivery specified in each Confirmation to
be
made by it, subject to the other provisions of this Agreement.
(ii) Payments
under this Agreement will be made on the due date for value on that date in
the
place of the account specified in the relevant Confirmation or otherwise
pursuant to this Agreement, in freely transferable funds and in the manner
customary for payments in the required currency. Where settlement is by delivery
(that is, other than by payment), such delivery will be made for receipt on
the
due date in the manner customary for the relevant obligation unless otherwise
specified in the relevant Confirmation or elsewhere in this
Agreement.
(iii) Each
obligation of each party under Section 2(a)(i) is subject to (1) the
condition precedent that no Event of Default or Potential Event of Default
with
respect to the other party has occurred and is continuing, (2) the
condition precedent that no Early Termination Date in
1
respect
of the relevant Transaction has occurred or been effectively designated and
(3) each other applicable condition precedent specified in this
Agreement.
(b) Change
of Account.
Either
party may change its account for receiving a payment or delivery by giving
notice to the other party at least five Local Business Days prior to the
scheduled date for the payment or delivery to which such change applies unless
such other party gives timely notice of a reasonable objection to such
change.
(c) Netting.
If on
any date amounts would otherwise be payable:-
(i) in
the
same currency; and
(ii) in
respect of the same Transaction,
by
each
party to the other, then, on such date, each party's obligation to make payment
of any such amount will be automatically satisfied and discharged and, if the
aggregate amount that would otherwise have been payable by one party exceeds
the
aggregate amount that would otherwise have been payable by the other party,
replaced by an obligation upon the party by whom the larger aggregate amount
would have been payable to pay to the other party the excess of the larger
aggregate amount over the smaller aggregate amount.
The
parties may elect in respect of two or more Transactions that a net amount
will
be determined in respect of all amounts payable on the same date in the same
currency in respect of such Transactions, regardless of whether such amounts
are
payable in respect of the same Transaction. The election may be made in the
Schedule or a Confirmation by specifying that subparagraph (ii) above will
not
apply to the Transactions identified as being subject to the election, together
with the starting date (in which case subparagraph (ii) above will not, or
will
cease to, apply to such Transactions from such date). This election may be
made
separately for different groups of Transactions and will apply separately to
each pairing of Offices through which the parties make and receive payments
or
deliveries.
(d) Deduction
or Withholding for Tax.
(i)
Gross-Up.
All
payments under this Agreement will be made without any deduction or withholding
for or on account of any Tax unless such deduction or withholding is required
by
any applicable law, as modified by the practice of any relevant governmental
revenue authority, then in effect. If a party is so required to deduct or
withhold, then that party ("X") will:-
(1)
promptly notify the other party ("Y") of such requirement;
(2)
pay
to the relevant authorities the full amount required to be deducted or withheld
(including the full amount required to be deducted or withheld from any
additional amount paid by X to Y under this Section 2(d)) promptly upon the
earlier of determining that such deduction or withholding is required or
receiving notice that such amount has been assessed against Y;
(3)
promptly forward to Y an official receipt (or a certified copy), or other
documentation reasonably acceptable to Y, evidencing such payment to such
authorities; and
(4)
if
such Tax is an Indemnifiable Tax, pay to Y, in addition to the payment to which
Y is otherwise entitled under this Agreement, such additional amount as is
necessary to ensure that the net amount actually received by Y (free and clear
of Indemnifiable Taxes, whether assessed against X or Y) will equal the full
amount Y would have received had no such deduction or withholding been required.
However, X will not be required to pay any additional amount to Y to the extent
that it would not be required to be paid but for:-
(A) the
failure by Y to comply with or perform any agreement contained in Section
4(a)(i), 4(a)(iii) or 4(d); or
2
(B) the
failure of a representation made by Y pursuant to Section 3(f) to be accurate
and true unless such failure would not have occurred but for (I) any action
taken by a taxing authority, or brought in a court of competent jurisdiction,
on
or after the date on which a Transaction is entered into (regardless of whether
such action is taken or brought with respect to a party to this Agreement)
or
(II) a Change in Tax Law.
(ii)
Liability.
If:-
(1)
X is
required by any applicable law, as modified by the practice of any relevant
governmental revenue authority, to make any deduction or withholding in respect
of which X would not be required to pay an additional amount to Y under Section
2(d)(i)(4);
(2)
X
does not so deduct or withhold; and
(3)
a
liability resulting from such Tax is assessed directly against X,
then,
except
to
the extent Y has satisfied or then satisfies the liability resulting from such
Tax, Y will promptly pay to X the amount of such liability (including any
related liability for interest, but including any related liability for
penalties only if Y has failed to comply with or perform any agreement contained
in Section 4(a)(i), 4(a)(iii) or 4(d)).
(e) Default
Interest; Other Amounts.
Prior
to the occurrence or effective designation of an Early Termination Date in
respect of the relevant Transaction, a party that defaults in the performance
of
any payment obligation will, to the extent permitted by law and subject to
Section 6(c), be required to pay interest (before as well as after judgment)
on
the overdue amount to the other party on demand in the same currency as such
overdue amount, for the period from (and including) the original due date for
payment to (but excluding) the date of actual payment, at the Default Rate.
Such
interest will be calculated on the basis of daily compounding and the actual
number of days elapsed. If, prior to the occurrence or effective designation
of
an Early Termination Date in respect of the relevant Transaction, a party
defaults in the performance of any obligation required to be settled by
delivery, it will compensate the other party on demand if and to the extent
provided for in the relevant Confirmation or elsewhere in this
Agreement.
| 3. |
Representations
|
Each
party represents to the other party (which representations will be deemed to
be
repeated by each party on each date on which a Transaction is entered into
and,
in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that:-
| (a) |
Basic
Representations.
|
(i)
Status.
It is
duly organised and validly existing under the laws of the jurisdiction of its
organisation or incorporation and, if relevant under such laws, in good
standing;
(ii)
Powers.
It has
the power to execute this Agreement and any other documentation relating to
this
Agreement to which it is a party, to deliver this Agreement and any other
documentation relating to this Agreement that it is required by this Agreement
to deliver and to perform its obligations under this Agreement and any
obligations it has under any Credit Support Document to which it is a party
and
has taken all necessary action to authorise such execution, delivery and
performance;
(iii)
No
Violation or Conflict.
Such
execution, delivery and performance do not violate or conflict with any law
applicable to it, any provision of its constitutional documents, any order
or
judgment of any court or other agency of government applicable to it or any
of
its assets or any contractual restriction binding on or affecting it or any
of
its assets;
(iv) Consents.
All
governmental and other consents that are required to have been obtained by
it
with respect to this Agreement or any Credit Support Document to which it is
a
party have
3
been
obtained and are in full force and effect and all conditions of any such
consents have been complied with; and
(v) Obligations
Binding.
Its
obligations under this Agreement and any Credit Support Document to which it
is
a party constitute its legal, valid and binding obligations, enforceable in
accordance with their respective terms (subject to applicable bankruptcy,
reorganisation, insolvency, moratorium or similar laws affecting creditors'
rights generally and subject, as to enforceability, to equitable principles
of
general application (regardless of whether enforcement is sought in a proceeding
in equity or at law)).
(b) Absence
of Certain Events.
No
Event of Default or Potential Event of Default or, to its knowledge, Termination
Event with respect to it has occurred and is continuing and no such event or
circumstance would occur as a result of its entering into or performing its
obligations under this Agreement or any Credit Support Document to which it
is a
party.
(c) Absence
of Litigation.
There
is not pending or, to its knowledge, threatened against it or any of its
Affiliates any action, suit or proceeding at law or in equity or before any
court, tribunal, governmental body, agency or official or any arbitrator that
is
likely to affect the legality, validity or enforceability against it of this
Agreement or any Credit Support Document to which it is a party or its ability
to perform its obligations under this Agreement or such Credit Support
Document.
(d) Accuracy
of Specified Information.
All
applicable information that is furnished in writing by or on behalf of it to
the
other party and is identified for the purpose of this Section 3(d) in the
Schedule is, as of the date of the information, true, accurate and complete
in
every material respect.
(e) Payer
Tax Representation.
Each
representation specified in the Schedule as being made by it for the purpose
of
this Section 3(e) is accurate and true.
(f) Payee
Tax Representations.
Each
representation specified in the Schedule as being made by it for the purpose
of
this Section 3(f) is accurate and true.
| 4. |
Agreements
|
Each
party agrees with the other that, so long as either party has or may have any
obligation under this Agreement or under any Credit Support Document to which
it
is a party:-
(a) Furnish
Specified Information.
It will
deliver to the other party or, in certain cases under subparagraph (iii) below,
to such government or taxing authority as the other party reasonably
directs:-
(i)
any
forms, documents or certificates relating to taxation specified in the Schedule
or any Confirmation;
(ii)
any
other documents specified in the Schedule or any Confirmation; and
(iii)
upon reasonable demand by such other party, any form or document that may be
required or reasonably requested in writing in order to allow such other party
or its Credit Support Provider to make a payment under this Agreement or any
applicable Credit Support Document without any deduction or withholding for
or
on account of any Tax or with such deduction or withholding at a reduced rate
(so long as the completion, execution or submission of such form or document
would not materially prejudice the legal or commercial position of the party
in
receipt of such demand), with any such form or document to be accurate and
completed in a manner reasonably satisfactory to such other party and to be
executed and to be delivered with any reasonably required
certification,
in
each
case by the date specified in the Schedule or such Confirmation or, if none
is
specified, as soon as reasonably practicable.
4
(b) Maintain
Authorisations.
It will
use all reasonable efforts to maintain in full force and effect all consents
of
any governmental or other authority that are required to be obtained by it
with
respect to this Agreement or any Credit Support Document to which it is a party
and will use all reasonable efforts to obtain any that may become necessary
in
the future.
(c) Comply
with Laws.
It will
comply in all material respects with all applicable laws and orders to which
it
may be subject if failure so to comply would materially impair its ability
to
perform its obligations under this Agreement or any Credit Support Document
to
which it is a party.
(d) Tax
Agreement.
It will
give notice of any failure of a representation made by it under Section 3(f)
to
be accurate and true promptly upon learning of such failure.
(e) Payment
of Stamp Tax.
Subject
to Section 11, it will pay any Stamp Tax levied or imposed upon it or in respect
of its execution or performance of this Agreement by a jurisdiction in which
it
is incorporated, organised, managed and controlled, or considered to have its
seat, or in which a branch or office through which it is acting for the purpose
of this Agreement is located ("Stamp Tax Jurisdiction") and will indemnify
the
other party against any Stamp Tax levied or imposed upon the other party or
in
respect of the other party' s execution or performance of this Agreement by
any
such Stamp Tax Jurisdiction which is not also a Stamp Tax Jurisdiction with
respect to the other party.
| 5. |
Events
of Default and Termination
Events
|
(a) Events
of Default.
The
occurrence at any time with respect to a party or, if applicable, any Credit
Support Provider of such party or any Specified Entity of such party of any
of
the following events constitutes an event of default (an "Event of Default")
with respect to such party:-
(i) Failure
to Pay or Deliver.
Failure
by the party to make, when due, any payment under this Agreement or delivery
under Section 2(a)(i) or 2(e) required to be made by it if such failure is
not
remedied on or before the third Local Business Day after notice of such failure
is given to the party;
(ii) Breach
of Agreement.
Failure
by the party to comply with or perform any agreement or obligation (other than
an obligation to make any payment under this Agreement or delivery under Section
2(a)(i) or 2(e) or to give notice of a Termination Event or any agreement or
obligation under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied with or
performed by the party in accordance with this Agreement if such failure is
not
remedied on or before the thirtieth day after notice of such failure is given
to
the party;
(iii)
Credit
Support Default.
(1)
Failure by the party or any Credit Support Provider of such party to comply
with
or perform any agreement or obligation to be complied with or performed by
it in
accordance with any Credit Support Document if such failure is continuing after
any applicable grace period has elapsed;
(2)
the
expiration or termination of such Credit Support Document or the failing or
ceasing of such Credit Support Document to be in full force and effect for
the
purpose of this Agreement (in either case other than in accordance with its
terms) prior to the satisfaction of all obligations of such party under each
Transaction to which such Credit Support Document relates without the written
consent of the other party; or
(3)
the
party or such Credit Support Provider disaffirms, disclaims, repudiates or
rejects, in whole or in part, or challenges the validity of, such Credit Support
Document;
(iv)
Misrepresentation.
A
representation (other than a representation under Section 3(e) or (f)) made
or
repeated or deemed to have been made or repeated by the party or any Credit
Support Provider of such party in this Agreement or any Credit Support Document
proves to have been
5
incorrect
or misleading in any material respect when made or repeated or deemed to have
been made or repeated;
(v) Default
under Specified Transaction.
The
party, any Credit Support Provider of such party or any applicable Specified
Entity of such party (1) defaults under a Specified Transaction and, after
giving effect to any applicable notice requirement or grace period, there occurs
a liquidation of, an acceleration of obligations under, or an early termination
of, that Specified Transaction, (2) defaults, after giving effect to any
applicable notice requirement or grace period, in making any payment or delivery
due on the last payment, delivery or exchange date of, or any payment on early
termination of, a Specified Transaction (or such default continues for at least
three Local Business Days if there is no applicable notice requirement or grace
period) or (3) disaffirms, disclaims, repudiates or rejects, in whole or in
part, a Specified Transaction (or such action is taken by any person or entity
appointed or empowered to operate it or act on its behalf);
(vi) Cross
Default.
If
"Cross Default" is specified in the Schedule as applying to the party, the
occurrence or existence of (1) a default, event of default or other similar
condition or event (however described) in respect of such party, any Credit
Support Provider of such party or any applicable Specified Entity of such party
under one or more agreements or instruments relating to Specified Indebtedness
of any of them (individually or collectively) in an aggregate amount of not
less
than the applicable Threshold Amount (as specified in the Schedule) which has
resulted in such Specified Indebtedness becoming, or becoming capable at such
time of being declared, due and payable under such agreements or instruments,
before it would otherwise have been due and payable or (2) a default by such
party, such Credit Support Provider or such Specified Entity (individually
or
collectively) in making one or more payments on the due date thereof in an
aggregate amount of not less than the applicable Threshold Amount under such
agreements or instruments (after giving effect to any applicable notice
requirement or grace period);
(vii)
Bankruptcy.
The
party, any Credit Support Provider of such party or any applicable Specified
Entity of such party:-
(1)
is
dissolved (other than pursuant to a consolidation, amalgamation or merger);
(2)
becomes insolvent or is unable to pay its debts or fails or admits in writing
its inability generally to pay its debts as they become due; (3) makes a general
assignment, arrangement or composition with or for the benefit of its creditors;
(4) institutes or has instituted against it a proceeding seeking a judgment
of
insolvency or bankruptcy or any other relief under any bankruptcy or insolvency
law or other similar law affecting creditors' rights, or a petition is presented
for its winding-up or liquidation, and, in the case of any such proceeding
or
petition instituted or presented against it, such proceeding or petition (A)
results in a judgment of insolvency or bankruptcy or the entry of an order
for
relief or the making of an order for its winding-up or liquidation or (B) is
not
dismissed, discharged, stayed or restrained in each case within 30 days of
the
institution or presentation thereof; (5) has a resolution passed for its
winding-up, official management or liquidation (other than pursuant to a
consolidation, amalgamation or merger); (6) seeks or becomes subject to the
appointment of an administrator, provisional liquidator, conservator, receiver,
trustee, custodian or other similar official for it or for all or substantially
all its assets; (7) has a secured party take possession of all or substantially
all its assets or has a distress, execution, attachment, sequestration or other
legal process levied, enforced or sued on or against all or substantially all
its assets and such secured party maintains possession, or any such process
is
not dismissed, discharged, stayed or restrained, in each case within 30 days
thereafter; (8) causes or is subject to any event with respect to it which,
under the applicable laws of any jurisdiction, has an analogous effect to any
of
the events specified in clauses (I) to (7) (inclusive); or (9) takes any action
in furtherance of, or indicating its consent to, approval of, or acquiescence
in, any of the foregoing acts; or
(viii)
Merger
Without Assumption.
The
party or any Credit Support Provider of such party consolidates or amalgamates
with, or merges with or into, or transfers all or substantially all its
6
assets
to, another entity and, at the time of such consolidation, amalgamation, merger
or transfer:-
(1)
the
resulting, surviving or transferee entity fails to assume all the obligations
of
such party or such Credit Support Provider under this Agreement or any Credit
Support Document to which it or its predecessor was a party by operation of
law
or pursuant to an agreement reasonably satisfactory to the other party to this
Agreement; or
(2)
the
benefits of any Credit Support Document fail to extend (without the consent
of
the other party) to the performance by such resulting, surviving or transferee
entity of its obligations under this Agreement.
(b) Termination
Events.
The
occurrence at any time with respect to a party or, if applicable, any Credit
Support Provider of such party or any Specified Entity of such party of any
event specified below constitutes an Illegality if the event is specified in
(i)
below, a Tax Event if the event is specified in (ii) below or a Tax Event Upon
Merger if the event is specified in (iii) below, and, if specified to be
applicable, a Credit Event Upon Merger if the event is specified pursuant to
(iv) below or an Additional Termination Event if the event is specified pursuant
to (v) below:-
(i)
Illegality.
Due to
the adoption of, or any change in, any applicable law after the date on which
a
Transaction is entered into, or due to the promulgation of, or any change in,
the interpretation by any court, tribunal or regulatory authority with competent
jurisdiction of any applicable law after such date, it becomes unlawful (other
than as a result of a breach by the party of Section 4(b)) for such party (which
will be the Affected Party):-
(1)
to
perform any absolute or contingent obligation to make a payment or delivery
or
to receive a payment or delivery in respect of such Transaction or to comply
with any other material provision of this Agreement relating to such
Transaction; or
(2)
to
perform, or for any Credit Support Provider of such party to perform, any
contingent or other obligation which the party (or such Credit Support Provider)
has under any Credit Support Document relating to such Transaction;
(ii)
Tax
Event.
Due to
(x) any action taken by a taxing authority, or brought in a court of competent
jurisdiction, on or after the date on which a Transaction is entered into
(regardless of whether such action is taken or brought with respect to a party
to this Agreement) or (y) a Change in Tax Law, the party (which will be the
Affected Party) will, or there is a substantial likelihood that it will, on
the
next succeeding Scheduled Payment Date (I) be required to pay to the other
party
an additional amount in respect of an Indemnifiable Tax under Section 2(d)(i)(4)
(except in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) or (2)
receive a payment from which an amount is required to be deducted or withheld
for or on account of a Tax (except in respect of interest under Section 2(e),
6(d)(ii) or 6(e)) and no additional amount is required to be paid in respect
of
such Tax under Section 2(d)(i)(4) (other than by reason of Section 2(d)(i)(4)(A)
or (B));
(iii)
Tax
Event Upon Merger.
The
party (the "Burdened Party") on the next succeeding Scheduled Payment Date
will
either (1) be required to pay an additional amount in respect of an
Indemnifiable Tax under Section 2(d)(i)(4) (except in respect of interest under
Section 2(e), 6(d)(ii) or 6(e)) or (2) receive a payment from which an amount
has been deducted or withheld for or on account of any Indemnifiable Tax in
respect of which the other party is not required to pay an additional amount
(other than by reason of Section 2(d)(i)(4)(A) or (B)), in either case as a
result of a party consolidating or amalgamating with, or merging with or into,
or transferring all or substantially all its assets to, another entity (which
will be the Affected Party) where such action does not constitute an event
described in Section 5(a)(viii);
(iv)
Credit
Event Upon Merger.
If
"Credit Event Upon Merger" is specified in the Schedule as applying to the
party, such party ("X"), any Credit Support Provider of X or any applicable
Specified Entity of X consolidates or amalgamates with, or merges with or into,
or transfers all or
7
substantially
all its assets to, another entity and such action does not constitute an event
described in Section 5(a)(viii) but the creditworthiness of the resulting,
surviving or transferee entity is materially weaker than that of X, such Credit
Support Provider or such Specified Entity, as the case may be, immediately
prior
to such action (and, in such event, X or its successor or transferee, as
appropriate, will be the Affected Party); or
(v)
Additional
Termination Event.
If any
"Additional Termination Event" is specified in the Schedule or any Confirmation
as applying, the occurrence of such event (and, in such event, the Affected
Party or Affected Parties shall be as specified for such Additional Termination
Event in the Schedule or such Confirmation).
(c) Event
of Default and Illegality.
If an
event or circumstance which would otherwise constitute or give rise to an Event
of Default also constitutes an Illegality, it will be treated as an Illegality
and will not constitute an Event of Default.
| 6. |
Early
Termination
|
(a) Right
to Terminate Following Event of Default.
If at
any time an Event of Default with respect to a party (the "Defaulting Party")
has occurred and is then continuing, the other party (the "Non-defaulting
Party") may, by not more than 20 days notice to the Defaulting Party specifying
the relevant Event of Default, designate a day not earlier than the day such
notice is effective as an Early Termination Date in respect of all outstanding
Transactions. If, however, "Automatic Early Termination" is specified in the
Schedule as applying to a party, then an Early Termination Date in respect
of
all outstanding Transactions will occur immediately upon the occurrence with
respect to such party of an Event of Default specified in Section 5(a)(vii)(1),
(3), (5), (6) or, to the extent analogous thereto, (8), and as of the time
immediately preceding the institution of the relevant proceeding or the
presentation of the relevant petition upon the occurrence with respect to such
party of an Event of Default specified in Section 5(a)(vii)(4) or, to the extent
analogous thereto, (8).
| (b) |
Right
to Terminate Following Termination Event.
|
(i)
Notice.
If a
Termination Event occurs, an Affected Party will, promptly upon becoming aware
of it, notify the other party, specifying the nature of that Termination Event
and each Affected Transaction and will also give such other information about
that Termination Event as the other party may reasonably require.
(ii)
Transfer
to Avoid Termination Event.
If
either an Illegality under Section 5(b)(i)(1) or a Tax Event occurs and there
is
only one Affected Party, or if a Tax Event Upon Merger occurs and the Burdened
Party is the Affected Party, the Affected Party will, as a condition to its
right to designate an Early Termination Date under Section 6(b)(iv), use all
reasonable efforts (which will not require such party to incur a loss, excluding
immaterial, incidental expenses) to transfer within 20 days after it gives
notice under Section 6(b)(i) all its rights and obligations under this Agreement
in respect of the Affected Transactions to another of its Offices or Affiliates
so that such Termination Event ceases to exist.
If
the
Affected Party is not able to make such a transfer it will give notice to the
other party to that effect within such 20 day period, whereupon the other party
may effect such a transfer within 30 days after the notice is given under
Section 6(b)(i).
Any
such
transfer by a party under this Section 6(b)(ii) will be subject to and
conditional upon the prior written consent of the other party, which consent
will not be withheld if such other party's policies in effect at such time
would
permit it to enter into transactions with the transferee on the terms
proposed.
(iii)
Two
Affected Parties.
If an
Illegality under Section 5(b)(i)(1) or a Tax Event occurs and there are two
Affected Parties, each party will use all reasonable efforts to reach agreement
within 30 days after notice thereof is given under Section 6(b)(i) on action
to
avoid that Termination Event.
8
(iv)
Right
to Terminate.
If:-
(1)
a
transfer under Section 6(b)(ii) or an agreement under Section 6(b)(iii), as
the
case may be, has not been effected with respect to all Affected Transactions
within 30 days after an Affected Party gives notice under Section 6(b)(i);
or
(2)
an
Illegality under Section 5(b)(i)(2), a Credit Event Upon Merger or an Additional
Termination Event occurs, or a Tax Event Upon Merger occurs and the Burdened
Party is not the Affected Party,
either
party in the case of an Illegality, the Burdened Party in the case of a Tax
Event Upon Merger, any Affected Party in the case of a Tax Event or an
Additional Termination Event if there is more than one Affected Party, or the
party which is not the Affected Party in the case of a Credit Event Upon Merger
or an Additional Termination Event if there is only one Affected Party may,
by
not more than 20 days notice to the other party and provided that the relevant
Termination Event is then continuing, designate a day not earlier than the
day
such notice is effective as an Early Termination Date in respect of all Affected
Transactions.
| (c) |
Effect
of Designation.
|
(i)
If
notice designating an Early Termination Date is given under Section 6(a) or
(b),
the Early Termination Date will occur on the date so designated, whether or
not
the relevant Event of Default or Termination Event is then
continuing.
(ii)
Upon
the occurrence or effective designation of an Early Termination Date, no further
payments or deliveries under Section 2(a)(i) or 2(e) in respect of the
Terminated Transactions will be required to be made, but without prejudice
to
the other provisions of this Agreement. The amount, if any, payable in respect
of an Early Termination Date shall be determined pursuant to Section
6(e).
| (d) |
Calculations.
|
(i) Statement.
On or
as soon as reasonably practicable following the occurrence of an Early
Termination Date, each party will make the calculations on its part, if any,
contemplated by Section 6(e) and will provide to the other party a statement
(1)
showing, in reasonable detail, such calculations (including all relevant
quotations and specifying any amount payable under Section 6(e)) and (2) giving
details of the relevant account to which any amount payable to it is to be
paid.
In the absence of written confirmation from the source of a quotation obtained
in determining a Market Quotation, the records of the party obtaining such
quotation will be conclusive evidence of the existence and accuracy of such
quotation.
(ii) Payment
Date.
An
amount calculated as being due in respect of any Early Termination Date under
Section 6(e) will be payable on the day that notice of the amount payable is
effective (in the case of an Early Termination Date which is designated or
occurs as a result of an Event of Default and on the day which is two Local
Business Days after the day on which notice of the amount payable is effective
(in the case of an Early Termination Date which is designated as a result of
a
Termination Event). Such amount will be paid together with (to the extent
permitted under applicable law) interest thereon (before as well as after
judgment) in the Termination Currency, from (and including) the relevant Early
Termination Date to (but excluding) the date such amount is paid, at the
Applicable Rate. Such interest will be calculated on the basis of daily
compounding and the actual number of days elapsed.
(e) Payments
on Early Termination.
If an
Early Termination Date occurs, the following provisions shall apply based on
the
parties' election in the Schedule of a payment measure, either "Market
Quotation" or "Loss", and a payment method, either the "First Method" or the
"Second Method". If the parties fail to designate a payment measure or payment
method in the Schedule, it will be deemed that "Market Quotation" or the "Second
Method", as the case may be, shall apply. The amount, if any, payable
9
in
respect of an Early Termination Date and determined pursuant to this Section
will be subject to any Set-off.
(i)
Events
of Default.
If the
Early Termination Date results from an Event of Default:-
(1)
First
Method and Market Quotation.
If the
First Method and Market Quotation apply, the Defaulting Party will pay to the
Non-defaulting Party the excess, if a positive number, of (A) the sum of the
Settlement Amount (determined by the Non-defaulting Party) in respect of the
Terminated Transactions and the Termination Currency Equivalent of the Unpaid
Amounts owing to the Non-defaulting Party over (B) the Termination Currency
Equivalent of the Unpaid Amounts owing to the Defaulting Party.
(2)
First
Method and Loss.
If the
First Method and Loss apply, the Defaulting Party will pay to the Non-defaulting
Party, if a positive number, the Non-defaulting Party's Loss in respect of
this
Agreement.
(3)
Second Method and Market Quotation.
If the
Second Method and Market Quotation apply, an amount will be payable equal to
(A)
the sum of the Settlement Amount (determined by the Non-defaulting Party) in
respect of the Terminated Transactions and the Termination Currency Equivalent
of the Unpaid Amounts owing to the Non-defaulting Party less (B) the Termination
Currency Equivalent of the Unpaid Amounts owing to the Defaulting Party. If
that
amount is a positive number, the Defaulting Party will pay it to the
Non-defaulting Party; if it is a negative number, the Non-defaulting Party
will
pay the absolute value of that amount to the Defaulting Party.
(4)
Second
Method and Loss.
If the
Second Method and Loss apply, an amount will be payable equal to the
Non-defaulting Party's Loss in respect of this Agreement. If that amount is
a
positive number, the Defaulting Party will pay it to the Non-defaulting Party;
if it is a negative number, the Non-defaulting Party will pay the absolute
value
of that amount to the Defaulting Party.
(ii)
Termination
Events.
If the
Early Termination Date results from a Termination Event:-
(1)
One
Affected Party.
If
there is one Affected Party, the amount payable will be determined in accordance
with Section 6(e)(i)(3), if Market Quotation applies, or Section 6(e)(i)(4),
if
Loss applies, except that, in either case, references to the Defaulting Party
and to the Non-defaulting Party will be deemed to be references to the Affected
Party and the party which is not the Affected Party, respectively, and, if
Loss
applies and fewer than all the Transactions are being terminated, Loss shall
be
calculated in respect of all Terminated Transactions.
(2)
Two
Affected Parties.
If
there are two Affected Parties:-
(A)
if
Market Quotation applies, each party will determine a Settlement Amount in
respect of the Terminated Transactions, and an amount will be payable equal
to
(I) the sum of (a) one-half of the difference between the Settlement Amount
of
the party with the higher Settlement Amount ("X") and the Settlement Amount
of
the party with the lower Settlement Amount ("Y") and (b) the Termination
Currency Equivalent of the Unpaid Amounts owing to X less (II) the Termination
Currency Equivalent of the Unpaid Amounts owing to Y; and
(B)
if
Loss applies, each party will determine its Loss in respect of this Agreement
(or, if fewer than all the Transactions are being terminated, in respect of
all
Terminated Transactions) and an amount will be payable equal to one-half of
the
difference between the Loss of the party with the higher Loss ("X") and the
Loss
of the party with the lower Loss ("Y").
10
If
the
amount payable is a positive number, Y will pay it to X; if it is a negative
number, X will pay the absolute value of that amount to Y.
(iii)
Adjustment
for Bankruptcy.
In
circumstances where an Early Termination Date occurs because "Automatic Early
Termination" applies in respect of a party, the amount determined under this
Section 6(e) will be subject to such adjustments as are appropriate and
permitted by law to reflect any payments or deliveries made by one party to
the
other under this Agreement (and retained by such other party) during the period
from the relevant Early Termination Date to the date for payment determined
under Section 6(d)(ii).
(iv)
Pre-Estimate.
The
parties agree that if Market Quotation applies an amount recoverable under
this
Section 6(e) is a reasonable pre-estimate of loss and not a penalty. Such amount
is payable for the loss of bargain and the loss of protection against future
risks and except as otherwise provided in this Agreement neither party will
be
entitled to recover any additional damages as a consequence of such
losses.
| 7. |
Transfer
|
Subject
to Section 6(b)(ii), neither this Agreement nor any interest or obligation
in or
under this Agreement may be transferred (whether by way of security or
otherwise) by either party without the prior written consent of the other party,
except that:-
(a) a
party
may make such a transfer of this Agreement pursuant to a consolidation or
amalgamation with, or merger with or into, or transfer of all or substantially
all its assets to, another entity (but without prejudice to any other right
or
remedy under this Agreement); and
(b) a
party
may make such a transfer of all or any part of its interest in any amount
payable to it from a Defaulting Party under Section 6(e).
Any
purported transfer that is not in compliance with this Section will be
void.
| 8. |
Contractual
Currency
|
(a) Payment
in the Contractual Currency.
Each
payment under this Agreement will be made in the relevant currency specified
in
this Agreement for that payment (the "Contractual Currency"). To the extent
permitted by applicable law, any obligation to make payments under this
Agreement in the Contractual Currency will not be discharged or satisfied by
any
tender in any currency other than the Contractual Currency, except to the extent
such tender results in the actual receipt by the party to which payment is
owed,
acting in a reasonable manner and in good faith in converting the currency
so
tendered into the Contractual Currency, of the full amount in the Contractual
Currency of all amounts payable in respect of this Agreement. If for any reason
the amount in the Contractual Currency so received falls short of the amount
in
the Contractual Currency payable in respect of this Agreement, the party
required to make the payment will, to the extent permitted by applicable law,
immediately pay such additional amount in the Contractual Currency as may be
necessary to compensate for the shortfall. If for any reason the amount in
the
Contractual Currency so received exceeds the amount in the Contractual Currency
payable in respect of this Agreement, the party receiving the payment will
refund promptly the amount of such excess.
(b) Judgments.
To the
extent permitted by applicable law, if any judgment or order expressed in a
currency other than the Contractual Currency is rendered (i) for the payment
of
any amount owing in respect of this Agreement, (ii) for the payment of any
amount relating to any early termination in respect of this Agreement or (iii)
in respect of a judgment or order of another court for the payment of any amount
described in (i) or (ii) above, the party seeking recovery, after recovery
in
full of the aggregate amount to which such party is entitled pursuant to the
judgment or order, will be entitled to receive immediately from the other party
the amount of any shortfall of the Contractual Currency received by such party
as a consequence of sums paid in such other
11
currency
and will refund promptly to the other party any excess of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency if such shortfall or such excess arises or results from any variation
between the rate of exchange at which the Contractual Currency is converted
into
the currency of the judgment or order for the purposes of such judgment or
order
and the rate of exchange at which such party is able, acting in a reasonable
manner and in good faith in converting the currency received into the
Contractual Currency, to purchase the Contractual Currency with the amount
of
the currency of the judgment or order actually received by such party. The
term
"rate of exchange" includes, without limitation, any premiums and costs of
exchange payable in connection with the purchase of or conversion into the
Contractual Currency.
(c) Separate
Indemnities.
To the
extent permitted by applicable law, these indemnities constitute separate and
independent obligations from the other obligations in this Agreement, will
be
enforceable as separate and independent causes of action, will apply
notwithstanding any indulgence granted by the party to which any payment is
owed
and will not be affected by judgment being obtained or claim or proof being
made
for any other sums payable in respect of this Agreement.
(d) Evidence
of Loss.
For the
purpose of this Section 8, it will be sufficient for a party to demonstrate
that
it would have suffered a loss had an actual exchange or purchase been
made.
| 9. |
Miscellaneous
|
(a) Entire
Agreement.
This
Agreement constitutes the entire agreement and understanding of the parties
with
respect to its subject matter and supersedes all oral communication and prior
writings with respect thereto.
(b) Amendments.
No
amendment, modification or waiver in respect of this Agreement will be effective
unless in writing (including a writing evidenced by a facsimile transmission)
and executed by each of the parties or confirmed by an exchange of telexes
or
electronic messages on an electronic messaging system.
(c) Survival
of Obligations.
Without
prejudice to Sections 2(a)(iii) and 6(c)(ii), the obligations of the parties
under this Agreement will survive the termination of any
Transaction.
(d) Remedies
Cumulative.
Except
as provided in this Agreement, the rights, powers, remedies and privileges
provided in this Agreement are cumulative and not exclusive of any rights,
powers, remedies and privileges provided by law.
| (e) |
Counterparts
and Confirmations.
|
(i)
This
Agreement (and each amendment, modification and waiver in respect of it) may
be
executed and delivered in counterparts (including by facsimile transmission),
each of which will be deemed an original.
(ii)
The
parties intend that they are legally bound by the terms of each Transaction
from
the moment they agree to those terms (whether orally or otherwise). A
Confirmation shall be entered into as soon as practicable and may be executed
and delivered in counterparts (including by facsimile transmission) or be
created by an exchange of telexes or by an exchange of electronic messages
on an
electronic messaging system, which in each case will be sufficient for all
purposes to evidence a binding supplement to this Agreement. The parties will
specify therein or through another effective means that any such counterpart,
telex or electronic message constitutes a Confirmation.
(f) No
Waiver of Rights.
A
failure or delay in exercising any right, power or privilege in respect of
this
Agreement will not be presumed to operate as a waiver, and a single or partial
exercise of any right, power or privilege will not be presumed to preclude
any
subsequent or further exercise, of that right, power or privilege or the
exercise of any other right, power or privilege.
(g) Headings.
The
headings used in this Agreement are for convenience of reference only and are
not to affect the construction of or to be taken into consideration in
interpreting this Agreement.
12
| 10. |
Offices;
Multibranch Parties
|
(a) If
Section 10(a) is specified in the Schedule as applying, each party that enters
into a Transaction through an Office other than its head or home office
represents to the other party that, notwithstanding the place of booking office
or jurisdiction of incorporation or organisation of such party, the obligations
of such party are the same as if it had entered into the Transaction through
its
head or home office. This representation will be deemed to be repeated by such
party on each date on which a Transaction is entered into.
(b) Neither
party may change the Office through which it makes and receives payments or
deliveries for the purpose of a Transaction without the prior written consent
of
the other party.
(c) If
a
party is specified as a Multibranch Party in the Schedule, such Multibranch
Party may make and receive payments or deliveries under any Transaction through
any Office listed in the Schedule, and the Office through which it makes and
receives payments or deliveries with respect to a Transaction will be specified
in the relevant Confirmation.
| 11. |
Expenses
|
A
Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees
and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document
to
which the Defaulting Party is a party or by reason of the early termination
of
any Transaction, including, but not limited to, costs of
collection.
| 12. |
Notices
|
(a) Effectiveness.
Any
notice or other communication in respect of this Agreement may be given in
any
manner set forth below (except that a notice or other communication under
Section 5 or 6 may not be given by facsimile transmission or electronic
messaging system) to the address or number or in accordance with the electronic
messaging system details provided (see the Schedule) and will be deemed
effective as indicated:-
(i)
if in
writing and delivered in person or by courier, on the date it is
delivered;
(ii)
if
sent by telex, on the date the recipient' s answerback is received;
(iii)
if
sent by facsimile transmission, on the date that transmission is received by
a
responsible employee of the recipient in legible form (it being agreed that
the
burden of proving receipt will be on the sender and will not be met by a
transmission report generated by the sender's facsimile machine);
(iv)
if
sent by certified or registered mail (airmail, if overseas) or the equivalent
(return receipt requested), on the date that mail is delivered or its delivery
is attempted; or
(v)
if
sent by electronic messaging system, on the date that electronic message is
received, unless the date of that delivery (or attempted delivery) or that
receipt, as applicable, is not a Local Business Day or that communication is
delivered (or attempted) or received, as applicable, after the close of business
on a Local Business Day, in which case that communication shall be deemed given
and effective on the first following day that is a Local Business
Day.
(b) Change
of Addresses.
Either
party may by notice to the other change the address, telex or facsimile number
or electronic messaging system details at which notices or other communications
are to be given to it.
13
| 13. |
Governing
Law and Jurisdiction
|
(a) Governing
Law.
This
Agreement will be governed by and construed in accordance with the law specified
in the Schedule.
(b) Jurisdiction.
With
respect to any suit, action or proceedings relating to this Agreement
("Proceedings"), each party irrevocably:-
(i)
submits to the jurisdiction of the English courts, if this Agreement is
expressed to be governed by English law, or to the non-exclusive jurisdiction
of
the courts of the State of New York and the United States District Court located
in the Borough of Manhattan in New York City, if this Agreement is expressed
to
be governed by the laws of the State of New York; and
(ii)
waives any objection which it may have at any time to the laying of venue of
any
Proceedings brought in any such court, waives any claim that such Proceedings
have been brought in an inconvenient forum and further waives the right to
object, with respect to such Proceedings, that such court does not have any
jurisdiction over such party.
Nothing
in this Agreement precludes either party from bringing Proceedings in any other
jurisdiction (outside, if this Agreement is expressed to be governed by English
law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments Xxx 0000 or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) Service
of Process.
Each
party irrevocably appoints the Process Agent (if any) specified opposite its
name in the Schedule to receive, for it and on its behalf, service of process
in
any Proceedings. If for any reason any party's Process Agent is unable to act
as
such, such party will promptly notify the other party and within 30 days appoint
a substitute process agent acceptable to the other party. The parties
irrevocably consent to service of process given in the manner provided for
notices in Section 12. Nothing in this Agreement will affect the right of either
party to serve process in any other manner permitted by law.
(d) Waiver
of Immunities.
Each
party irrevocably waives, to the fullest extent permitted by applicable law,
with respect to itself and its revenues and assets (irrespective of their use
or
intended use), all immunity on the grounds of sovereignty or other similar
grounds from (i) suit, (ii) jurisdiction of any court, (iii) relief by way
of
injunction, order for specific performance or for recovery of property, (iv)
attachment of its assets (whether before or after judgment) and (v) execution
or
enforcement of any judgment to which it or its revenues or assets might
otherwise be entitled in any Proceedings in the courts of any jurisdiction
and
irrevocably agrees, to the extent permitted by applicable law, that it will
not
claim any such immunity in any Proceedings.
| 14. |
Definitions
|
As
used
in this Agreement:-
"Additional
Termination Event"
has the
meaning specified in Section 5(b).
"Affected
Party"
has the
meaning specified in Section 5(b).
"Affected
Transactions"
means
(a) with respect to any Termination Event consisting of an Illegality, Tax
Event
or Tax Event Upon Merger, all Transactions affected by the occurrence of such
Termination Event and (b) with respect to any other Termination Event, all
Transactions.
"Affiliate"
means,
subject to the Schedule, in relation to any person, any entity controlled,
directly or indirectly, by the person, any entity that controls, directly or
indirectly, the person or any entity directly or indirectly under common control
with the person. For this purpose, "control" of any entity or person means
ownership of a majority of the voting power of the entity or
person.
14
"Applicable
Rate"
means:-
(a) in
respect of obligations payable or deliverable (or which would have been but
for
Section 2(a)(iii)) by a Defaulting Party, the Default Rate;
(b) in
respect of an obligation to pay an amount under Section 6(e) of either party
from and after the date (determined in accordance with Section 6(d)(ii)) on
which that amount is payable, the Default Rate;
(c) in
respect of all other obligations payable or deliverable (or which would have
been but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default
Rate;
and
(d) in
all
other cases, the Termination Rate.
"Burdened
Party"
has the
meaning specified in Section 5(b).
"Change
in Tax Law"
means
the enactment, promulgation, execution or ratification of, or any change in
or
amendment to, any law (or in the application or official interpretation of
any
law) that occurs on or after the date on which the relevant Transaction is
entered into.
"consent"
includes a consent, approval, action, authorisation, exemption, notice, filing,
registration or exchange control consent.
"Credit
Event Upon Merger"
has the
meaning specified in Section 5(b).
"Credit
Support Document"
means
any agreement or instrument that is specified as such in this Agreement.
"Credit
Support Provider"
has the
meaning specified in the Schedule.
"Default
Rate"
means a
rate per annum equal to the cost (without proof or evidence of any actual cost)
to the relevant payee (as certified by it) if it were to fund or of funding
the
relevant amount plus 1% per annum.
"Defaulting
Party"
has the
meaning specified in Section 6(a).
"Early
Termination Date"
means
the date determined in accordance with Section 6(a) or 6(b)(iv).
"Event
of Default"
has the
meaning specified in Section 5(a) and, if applicable, in the Schedule.
"Illegality"
has the
meaning specified in Section 5(b).
"Indemnifiable
Tax"
means
any Tax other than a Tax that would not be imposed in respect of a payment
under
this Agreement but for a present or former connection between the jurisdiction
of the government or taxation authority imposing such Tax and the recipient
of
such payment or a person related to such recipient (including, without
limitation, a connection arising from such recipient or related person being
or
having been a citizen or resident of such jurisdiction, or being or having
been
organised, present or engaged in a trade or business in such jurisdiction,
or
having or having had a permanent establishment or fixed place of business in
such jurisdiction, but excluding a connection arising solely from such recipient
or related person having executed, delivered, performed its obligations or
received a payment under, or enforced, this Agreement or a Credit Support
Document).
"law"
includes any treaty, law, rule or regulation (as modified, in the case of tax
matters, by the practice of any relevant governmental revenue authority) and
"lawful" and "unlawful" will be construed accordingly.
"Local
Business Day"
means,
subject to the Schedule, a day on which commercial banks are open for business
(including dealings in foreign exchange and foreign currency deposits) (a)
in
relation to any obligation under Section 2(a)(i), in the place(s) specified
in
the relevant Confirmation or, if not so specified, as otherwise agreed by the
parties in writing or determined pursuant to provisions contained, or
15
incorporated
by reference, in this Agreement, (b) in relation to any other payment, in the
place where the relevant account is located and, if different, in the principal
financial centre, if any, of the currency of such payment, (c) in relation
to
any notice or other communication, including notice contemplated under Section
5(a)(i), in the city specified in the address for notice provided by the
recipient and, in the case of a notice contemplated by Section 2(b), in the
place where the relevant new account is to be located and (d) in relation to
Section 5(a)(v)(2), in the relevant locations for performance with respect
to
such Specified Transaction.
"Loss"
means,
with respect to this Agreement or one or more Terminated Transactions, as the
case may be, and a party, the Termination Currency Equivalent of an amount
that
party reasonably determines in good faith to be its total losses and costs
(or
gain, in which case expressed as a negative number) in connection with this
Agreement or that Terminated Transaction or group of Terminated Transactions,
as
the case may be, including any loss of bargain, cost of funding or, at the
election of such party but without duplication, loss or cost incurred as a
result of its terminating, liquidating, obtaining or reestablishing any hedge
or
related trading position (or any gain resulting from any of them). Loss includes
losses and costs (or gains) in respect of any payment or delivery required
to
have been made (assuming satisfaction of each applicable condition precedent)
on
or before the relevant Early Termination Date and not made, except, so as to
avoid duplication, if Section 6(e)(i)(1) or (3) or 6(e)(ii)(2)(A) applies.
Loss
does not include a party's legal fees and out-of-pocket expenses referred to
under Section 11. A party will determine its Loss as of the relevant Early
Termination Date, or, if that is not reasonably practicable, as of the earliest
date thereafter as is reasonably practicable. A party may (but need not)
determine its Loss by reference to quotations of relevant rates or prices from
one or more leading dealers in the relevant markets.
"Market
Quotation"
means,
with respect to one or more Terminated Transactions and a party making the
determination, an amount determined on the basis of quotations from Reference
Market-makers. Each quotation will be for an amount, if any, that would be
paid
to such party (expressed as a negative number) or by such party (expressed
as a
positive number) in consideration of an agreement between such party (taking
into account any existing Credit Support Document with respect to the
obligations of such party) and the quoting Reference Market-maker to enter
into
a transaction (the "Replacement Transaction") that would have the effect of
preserving for such party the economic equivalent of any payment or delivery
(whether the underlying obligation was absolute or contingent and assuming
the
satisfaction of each applicable condition precedent by the parties under Section
2(a)(i) in respect of such Terminated Transaction or group of Terminated
Transactions that would, but for the occurrence of the relevant Early
Termination Date, have been required after that date. For this purpose, Unpaid
Amounts in respect of the Terminated Transaction or group of Terminated
Transactions are to be excluded but, without limitation, any payment or delivery
that would, but for the relevant Early Termination Date, have been required
(assuming satisfaction of each applicable condition precedent after that Early
Termination Date is to be included. The Replacement Transaction would be subject
to such documentation as such party and the Reference Market-maker may, in
good
faith, agree. The party making the determination (or its agent) will request
each Reference Market-maker to provide its quotation to the extent reasonably
practicable as of the same day and time (without regard to different time zones)
on or as soon as reasonably practicable after the relevant Early Termination
Date. The day and time as of which those quotations are to be obtained will
be
selected in good faith by the party obliged to make a determination under
Section 6(e), and, if each party is so obliged, after consultation with the
other. If more than three quotations are provided, the Market Quotation will
be
the arithmetic mean of the quotations, without regard to the quotations having
the highest and lowest values. If exactly three such quotations are provided,
the Market Quotation will be the quotation remaining after disregarding the
highest and lowest quotations. For this purpose, if more than one quotation
has
the same highest value or lowest value, then one of such quotations shall be
disregarded. If fewer than three quotations are provided, it will be deemed
that
the Market Quotation in respect of such Terminated Transaction or group of
Terminated Transactions cannot be determined.
"Non-default
Rate"
means a
rate per annum equal to the cost (without proof or evidence of any actual cost)
to the Non-defaulting Party (as certified by it) if it were to fund the relevant
amount.
"Non-defaulting
Party"
has the
meaning specified in Section 6(a).
16
"Office"
means a
branch or office of a party, which may be such party's head or home
office.
"Potential
Event of Default"
means
any event which, with the giving of notice or the lapse of time or both, would
constitute an Event of Default.
"Reference
Market-makers"
means
four leading dealers in the relevant market selected by the party determining
a
Market Quotation in good faith (a) from among dealers of the highest credit
standing which satisfy all the criteria that such party applies generally at
the
time in deciding whether to offer or to make an extension of credit and (b)
to
the extent practicable, from among such dealers having an office in the same
city.
"Relevant
Jurisdiction"
means,
with respect to a party, the jurisdictions (a) in which the party is
incorporated, organised, managed and controlled or considered to have its seat,
(b) where an Office through which the party is acting for purposes of this
Agreement is located, (c) in which the party executes this Agreement and (d)
in
relation to any payment, from or through which such payment is
made.
"Scheduled
Payment Date"
means a
date on which a payment or delivery is to be made under Section 2(a){i) with
respect to a Transaction.
"Set-off'”
means
set-off, offset, combination of accounts, right of retention or withholding
or
similar right or requirement to which the payer of an amount under Section
6 is
entitled or subject (whether arising under this Agreement, another contract,
applicable law or otherwise) that is exercised by, or imposed on, such
payer.
"Settlement
Amount"
means,
with respect to a party and any Early Termination Date, the sum
of:-
(a) the
Termination Currency Equivalent of the Market Quotations (whether positive
or
negative) for each Terminated Transaction or group of Terminated Transactions
for which a Market Quotation is determined; and
(b) such
party's Loss (whether positive or negative and without reference to any Unpaid
Amounts) for each Terminated Transaction or group of Terminated Transactions
for
which a Market Quotation cannot be determined or would not (in the reasonable
belief of the party making the determination) produce a commercially reasonable
result.
"Specified
Entity"
has the
meaning specified in the Schedule.
"Specified
Indebtedness"
means,
subject to the Schedule, any obligation (whether present or future, contingent
or otherwise, as principal or surety or otherwise) in respect of borrowed
money.
"Specified
Transaction"
means,
subject to the Schedule, (a) any transaction (including an agreement with
respect thereto) now existing or hereafter entered into between one party to
this Agreement (or any Credit Support Provider of such party or any applicable
Specified Entity of such party) and the other party to this Agreement (or any
Credit Support Provider of such other party or any applicable Specified Entity
of such other party) which is a rate swap transaction, basis swap, forward
rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any
of
these transactions), (b) any combination of these transactions and (c) any
other
transaction identified as a Specified Transaction in this Agreement or the
relevant confirmation.
"Stamp
Tax"
means
any stamp, registration, documentation or similar tax.
"Tax"
means
any present or future tax, levy, impost, duty, charge, assessment or fee of
any
nature (including interest, penalties and additions thereto) that is imposed
by
any government or other taxing
17
authority
in respect of any payment under this Agreement other than a stamp, registration,
documentation or similar tax.
"Tax
Event"
has the
meaning specified in Section 5(b).
"Tax
Event Upon Merger"
has the
meaning specified in Section 5(b).
"Terminated
Transactions"
means
with respect to any Early Termination Date (a) if resulting from a Termination
Event, all Affected Transactions and (b) if resulting from an Event of Default,
all Transactions (in either case) in effect immediately before the effectiveness
of the notice designating that Early Termination Date (or, if "Automatic Early
Termination" applies, immediately before that Early Termination
Date).
"Termination
Currency"
has the
meaning specified in the Schedule.
"Termination
Currency Equivalent"
means,
in respect of any amount denominated in the Termination Currency, such
Termination Currency amount and, in respect of any amount denominated in a
currency other than the Termination Currency (the "Other Currency"), the amount
in the Termination Currency determined by the party making the relevant
determination as being required to purchase such amount of such Other Currency
as at the relevant Early Termination Date, or, if the relevant Market Quotation
or Loss (as the case may be), is determined as of a later date, that later
date,
with the Termination Currency at the rate equal to the spot exchange rate of
the
foreign exchange agent (selected as provided below) for the purchase of such
Other Currency with the Termination Currency at or about 11:00 a.m. (in the
city
in which such foreign exchange agent is located) on such date as would be
customary far the determination of such a rate for the purchase of such Other
Currency for value on the relevant Early Termination Date or that later date.
The foreign exchange agent will, if only one party is obliged to make a
determination under Section 6(e), be selected in good faith by that party and
otherwise will be agreed by the parties.
"Termination
Event"
means
an Illegality, a Tax Event or a Tax Event Upon Merger or, if specified to be
applicable, a Credit Event Upon Merger or an Additional Termination
Event.
"Termination
Rate"
means a
rate per annum equal to the arithmetic mean of the cost (without proof or
evidence of any actual cost) to each party (as certified by such party) if
it
were to fund or of funding such amounts.
"Unpaid
Amounts"
owing
to any party means, with respect to an Early Termination Date, the aggregate
of
(a) in respect of all Terminated Transactions, the amounts that became payable
(or that would have become payable but for Section 2(a)(iii)) to such party
under Section 2(a)(i) on or prior to such Early Termination Date and which
remain unpaid as at such Early Termination Date and (b) in respect of each
Terminated Transaction, for each obligation under Section 2(a)(i) which was
(or
would have been but for Section 2(a)(iii)) required to be settled by delivery
to
such party on or prior to such Early Termination Date and which has not been
so
settled as at such Early Termination Date, an amount equal to the fair market
value of that which was (or would have been) required to be delivered as of
the
originally scheduled date for delivery, in each case together with (to the
extent permitted under applicable law) interest, in the currency of such
amounts, from (and including) the date such amounts or obligations were or
would
have been required to have been paid or performed to (but excluding) such Early
Termination Date, at the Applicable Rate. Such amounts of interest will be
calculated on the basis of daily compounding and the actual number of days
elapsed. The fair market value of any obligation referred to in clause (b)
above
shall be reasonably determined by the party obliged to make the determination
under Section 6(e) or, if each party is so obliged, it shall be the average
of
the Termination Currency Equivalents of the fair market values reasonably
determined by both parties.
IN
WITNESS WHEREOF
the
parties have executed this document on the respective dates specified below
with
effect from the date specified on the first page of this document.
|
The
Royal Bank of Scotland plc
|
Soffive
Shipping Corporation
|
|||
18
|
By:
|
By:
|
|||
|
Name:
|
Name:
|
|||
|
Title:
|
Title:
|
|||
|
Date:
|
Date:
|
|||
19
THIS
IS AN IMPORTANT DOCUMENT: YOU SHOULD TAKE INDEPENDENT
LEGAL
ADVICE BEFORE SIGNING AND SIGN ONLY IF YOU WANT TO BE
LEGALLY
BOUND BY THE TERMS OF THIS DOCUMENT
ISDA
International
Swaps and Derivatives Association, Inc.
SCHEDULE
to
the
MASTER
AGREEMENT
dated
19
November 2007
between
THE
ROYAL BANK OF SCOTLAND
plc
("Party A")
and
SOFFIVE
SHIPPING CORPORATION
("Party
B")
Part
1. Termination Provisions
| (a) |
"Specified
Entity"
means in relation to Party A for the purpose
of:-
|
| Section 5(a) (v) |
Not
Applicable
|
| Section 5(a) (vi) |
Not
Applicable
|
| Section 5(a) (vii) |
Not
Applicable
|
| Section 5(b) (iv) |
Not
Applicable
|
and
in
relation to Party B for the purpose of:-
| Section 5(a) (v) |
Affiliates
of Party B
|
| Section 5(a) (vi) |
Affiliates
of Party B
|
| Section 5(a) (vii) |
Affiliates
of Party B
|
| Section 5(b) (iv) |
Affiliates
of Party B
|
| (b) |
"Specified
Transaction"
shall have the meaning specified in Section
14.
|
| (c) |
The
"Cross
Default"
provisions of Section 5(a)(vi): –
|
will
not
apply to Party A
will
apply to Party B
If
such
provisions apply:-
"Specified
Indebtedness"
will
have the meaning specified in Section 14 of this Agreement.
"Threshold
Amount"
means
zero.
|
(d)
|
The
"Credit
Event upon Merger"
provisions of Section 5(b)(iv): –
|
will
apply to Party A and
will
apply to Party B
1
|
(e)
|
The
"Automatic
Early Termination"
provisions of Section 6(a): –
|
will
not
apply to Party A and
will
not
apply to Party B
|
(f)
|
Payments
on Early Termination.
For the purpose of Section 6(e) of this
Agreement:-
|
| (i) |
Market
Quotation will apply.
|
| (ii) |
The
Second Method will apply.
|
|
(g)
|
"Termination
Currency"
means such currency of any Transaction in respect of which an Early
Termination Date has been designated or is deemed to occur as may
be
selected by the party which is not the Defaulting Party or the Affected
Party (as the case may be), or where there are two Affected Parties
such
currency as may be agreed between them, if such currency is freely
available, and otherwise United States
Dollars.
|
| (h) |
Additional
Termination Event
will apply.
|
The
following events shall constitute Additional
Termination Events
in
relation to Party B only:-
|
(i)
|
Party
B or any Credit Support Provider of Party B consolidates or amalgamates
with, or merges into, or transfers all or substantially all its assets
to,
another entity ("the
Transferee")
and such action does not constitute a "Merger
Without Assumption"
described in Section 5(a)(viii) of this Agreement, but any policy
in
effect at the time (including any policy relating to lending or credit
limits) of Party A would not permit Party A to enter into a Transaction
or
Transactions with the Transferee on the terms (other than applicable
rates) of the Transactions then in effect under this
Agreement;
|
|
(ii)
|
any
circumstances arise which, in the reasonable opinion of Party A,
give
grounds for belief that Party B or any Credit Support Provider of
Party B
may not, or may be unable to, perform its obligations under this
Agreement
or any Credit Support Document;
|
|
(iii)
|
Party
B, or any Credit Support Provider of Party B, fails to give adequate
assurances of its ability to perform its obligations under this Agreement
or under any Credit Support Document on or before the third Business
Day
after a written request to do so has been given to Party B by Party
A;
and
|
|
(iv)
|
The
prepayment, repayment or cancellation by Party B in whole of the
Loan
Facility.
|
For
the
purpose of each of the Additional Termination Events set out above, Party B
shall be the Affected Party.
2
Part
2.
Tax Representations
|
(a)
|
Payer
Representations.
For the purpose of Section 3(e) of this Agreement, Party A will make
the
following representation and Party B will make the following
representation:-
|
It
is not
required by any applicable law, as modified by the practice of any relevant
governmental revenue authority, of any Relevant Jurisdiction to make any
deduction or withholding for or on account of any Tax from any payment (other
than interest under Section 2(e), 6(d)(ii) or 6(e) of this Agreement) to be
made
by it to the other party under this Agreement. In making this representation,
it
may rely on (i) the accuracy of any representations made by the other party
pursuant to Section 3(f) of this Agreement, (ii) the satisfaction of the
agreement contained in Section 4(a)(i) or 4(a)(iii) of this Agreement and the
accuracy and effectiveness of any document provided by the other party pursuant
to Section 4(a)(i) or 4(a)(iii) of this Agreement and (iii) the satisfaction
of
the agreement of the other party contained in Section 4(d) of this Agreement,
provided that it shall not be a breach of this representation where reliance
is
placed on clause (ii) and the other party does not deliver a form or document
under Section 4(a)(iii) by reason of material prejudice to its legal or
commercial position.
|
(b)
|
Payee
Representations.
For the purpose of Section 3(f) of this Agreement, Party A and Party
B
make no representations.
|
3
Part
3. Agreement to Deliver Documents
For
the
purpose of Sections 4(a)(i) and (ii) of this Agreement, each party agrees to
deliver the following documents, as applicable.
Documents
to be delivered are:-
|
Party
required to
deliver
document
|
Form/Document/Certificate
|
Date
by which to be
delivered
|
Covered
by
Section
3(d)
Representation
|
|||
|
Party
A & B
|
Signing
Authority being evidence of authority, incumbency and specimen
signature
of each person executing any document on its behalf in connection
with
this Agreement.
|
On
the signing of this Agreement and, if requested, any
Confirmation
|
Yes
|
|||
|
Party
B
|
A
most recent copy of the Party's Annual Report and Accounts.
|
On
demand in respect of those which became publicly available prior
to the
date of this Agreement and, in respect of statements not publicly
available at the date of this Agreement, as soon as possible and,
in any
event, in each case within one hundred and eighty days of the end
of the
financial year to which they relate
|
Yes
|
|||
|
Party
B
|
Certified
Resolution of the Board of Directors approving this Agreement and
the
arrangements contemplated herein.
|
On
the signing of this Agreement
|
Yes
|
|||
|
Party
B
|
The
power of attorney (if any) of Party B under which this Agreement
and/or
any Confirmation is to be executed on behalf of Party B.
|
On
the signing of this Agreement
|
Yes
|
|||
|
Party
B
|
A
copy of the Articles of Incorporation and By-laws and Certificate
of
Incorporation (or equivalent constitutional documents) of Party
B.
|
On
the signing of this Agreement
|
Yes
|
|||
|
Party
B
|
Copies
of any statutory and/or regulatory consents, approvals and authorisations
necessary for Party B to enter into and perform this Agreement
and the
Transactions contemplated by this Agreement.
|
On
the signing of this Agreement
|
Yes
|
4
|
Party
required to
deliver
document
|
Form/Document/Certificate
|
Date
by which to be
delivered
|
Covered
by
Section
3(d)
Representation
|
|||
|
Party
B
|
The
Credit Support Document(s) referred to in Part 4(f) of the Schedule
to
this Agreement duly executed by the parties thereto.
|
On
the signing of this Agreement
|
Yes
|
|||
|
Party
B
|
Such
legal opinions in form and substance satisfactory to Party A as Party
A
may require.
|
|||||
|
Party
B
|
Confirmation
in form and substance satisfactory to Party A that all conditions
precedent to the Loan Facility have been satisfied
|
On
the signing of this Agreement
|
Yes
|
|||
|
Party
B
|
A
copy of the written acceptance by Party B's Process Agent of its
appointment to receive for Party B and on its behalf service of process
in
any Proceedings under this Agreement.
|
Any
copy
documents to be provided under Sections 4(a)(i) and/or 4(a)(ii) of this
Agreement by Party B or any Credit Support Provider of Party B shall be
certified by a director or officer of Party B or by a director or officer of
the
relevant Credit Support Provider, as the case may be, as being true, complete,
accurate and in full force and effect at the date of this
Agreement.
5
Part
4. Miscellaneous
| (a) |
Addresses
for Notices.
For the purpose of Section 12(a) of this
Agreement:-
|
Notices
or communications to Party A (other than for Section 5 or 6 Notices) to be
sent
to the address listed in the Confirmation provided by Party A or if prior to
this Confirmation being received, to:-
|
Address:
|
c/o
RBS Global Banking & Markets
|
|
000
Xxxxxxxxxxx
|
|
|
Xxxxxx,
XX0X 0XX
|
|
|
Attention:
|
Swaps
Administration
|
|
Fax:
|
x00
(0)00 0000 0000
|
|
Telephone:
|
x00
(0)00 0000 0000
|
Address
for notices or communications to Party A for Section 5 or 6:-
|
Address:
|
c/o
RBS Global Banking & Markets
|
|
000
Xxxxxxxxxxx
|
|
|
Xxxxxx,
XX0X 0XX
|
|
|
Attention:
|
Head
of Legal, Global Banking & Markets
|
|
Fax:
|
x00
(0)00 0000 0000
|
Address
for notices or communications to Party B:-
|
Address:
|
x/x
00 Xxxxxxxxx Xxxxxx
|
|
000
00 Xxxxx
|
|
|
Xxxxxx,
Xxxxxx
|
|
|
Attention:
|
[●]
|
|
Fax:
|
x00
000 00 00 000
|
|
(b)
|
Process
Agent. For the purpose of Section 13(c) of this
Agreement:-
|
Party
A
appoints as its Process Agent –
Not
Applicable
Party
B
appoints as its Process Agent –
Cheeswrights of Xxxxxxxx Xxxxx, 000
Xxxxxxxxxx
Xxxxxx, Xxxxxx XX0X 0XX, Xxxxxxx.
| (x) |
Offices.
The provisions of Section 10(a) will apply to this
Agreement.
|
| (d) |
Multibranch
Party.
For the purpose of Section 10(c) of this
Agreement:-
|
Party
A
is not a Multibranch Party.
Party
B
is not a Multibranch Party.
|
(e)
|
Calculation
Agent.
The Calculation Agent is Party A unless otherwise specified in a
Confirmation in relation to the relevant Transaction. The failure
of Party
A to perform its obligations as Calculation Agent hereunder shall
not be
construed as an Event of Default or Termination
Event.
|
|
(f)
|
Credit
Support Document.
Party A provides no Credit Support Documents. Party B's obligations
to
Party A under this Agreement shall be secured by the Security
Documents.
|
6
|
(g)
|
Credit
Support Provider.
Credit Support Provider is not applicable in relation to Party A
and in
relation to Party B means each party that executes and/or has obligations
under the Security Documents.
|
|
(h)
|
Governing
Law.
This Agreement will be governed by and construed in accordance with
the
laws of England.
|
|
(i)
|
Netting
of Payments.
Sub-paragraph (ii) of Section 2(c) of this Agreement will apply to
all
Transactions hereunder unless otherwise agreed in writing between
the
parties.
|
| (j) |
"Affiliate"
will have the meaning specified in Section 14 of this
Agreement.
|
7
Part
5. Other Provisions
|
(a)
|
2000
ISDA Definitions.
The 2000 Definitions published by ISDA (the "Definitions") are
incorporated by reference herein. Any terms used and not otherwise
defined
herein which are contained in the Definitions shall have the meaning
set
forth therein.
|
|
(b)
|
Set-Off.
The following shall be added as Section
6(f):
|
Any
amount (the "Early Termination Amount") payable to one party (the Payee) by
the
other party (the Payer) under Section 6(e), in circumstances where there is
a
Defaulting Party or one Affected Party in the case where a Termination Event
under Section 5(b)(iv) or (v) has occurred, will, at the option of the party
("X") other than the Defaulting Party or the Affected Party, be reduced by
its
set-off against any amounts (the "Other Agreement Amount") payable (whether
at
such time or in the future or upon the occurrence of a contingency) by the
Payee
to the Payer (irrespective of the currency, place of payment or booking office
of the obligation) under any other agreement(s) between the Payee and the Payer
or instrument(s) or undertaking(s) issued or executed by one party to, or in
favour of, the other party (and the Other Agreement Amount will be discharged
promptly and in all respects to the extent it is so set-off). X will give notice
as soon as reasonably practicable to the other party of any set-off effected
under this Section 6(f).
For
this
purpose, either the Early Termination Amount or the Other Agreement Amount
(or
the relevant portion of such amounts) may be converted by X into the currency
in
which the other is denominated at the rate of exchange at which such party
would
be able, acting in a reasonable manner, in good faith and with the consultation
of the other party, to purchase the relevant amount of such
currency.
If
an
obligation is unascertained, X may, in good faith, estimate that obligation
and
set-off in respect of the estimate, subject to the relevant party accounting
to
the other when the obligation is ascertained.
Nothing
in this Section 6(f) shall be effective to create a charge or other security
interest. This Section 6(f) shall be without prejudice and in addition to any
right of set-off, combination of accounts, lien or other right to which any
party is at any time otherwise entitled (whether by operation of law, contract
or otherwise).
|
(c)
|
Relationship
Between Parties.
Each Party will be deemed to represent to the other party on the
date on
which it enters into a Transaction that (absent a written agreement
between the parties that expressly imposes affirmative obligations
to the
contrary for that Transaction):-
|
|
(i)
|
Non-Reliance.
It is acting for its own account, and it has made its own independent
decisions to enter into that Transaction and as to whether that
Transaction is appropriate or proper for it based upon its own judgement
and upon advice from such advisers as it has deemed necessary. It
is not
relying on any communication (written or oral) of the other party
as
investment advice or as a recommendation to enter into that Transaction;
it being understood that information and explanations related to
the terms
and conditions of a Transaction shall not be considered investment
advice
or a recommendation to enter into that Transaction. No communication
(written or oral) received from the other party shall be deemed to
be an
assurance or guarantee as to the expected results of that
Transaction.
|
|
(ii)
|
Assessment
and Understanding.
It is capable of assessing the merits of and understanding (on its
own
behalf or through independent professional advice), and understands
and
accepts, the terms, conditions and risks of that Transaction. It
is also
capable of assuming, and assumes, the risks of that
Transaction.
|
|
(iii)
|
Status
of Parties.
The other party is not acting as a fiduciary for or an adviser to
it in
respect of that Transaction.
|
8
|
(d)
|
Tape
Recording.
Each party to this Agreement acknowledges and agrees to the tape
recording
of conversations between the parties to this Agreement whether by
one or
other or both of the parties and that such tape recordings may be
submitted in evidence to any court or legal proceedings for the purpose
of
establishing any matters relating to this
Agreement.
|
|
(e)
|
Additional
Representation.
The following additional clause (g) shall be added at the end of
Section
3.
|
| "(g) |
No
Agency. It is entering into this Agreement and each Transaction
as principal (and not as agent or in any other capacity, fiduciary
or otherwise)."
|
|
(f)
|
Contracts
(Rights of Third Parties) Xxx 0000.
No
term of this Agreement is enforceable by a person who is not a party
to
it.
|
|
(g)
|
Confirmations.
Party A shall promptly send to Party B a confirmation of each Transaction
between them, and Party B shall promptly confirm the accuracy of
that
Confirmation by fax or any other means agreed by the parties. Failure
to
confirm the accuracy within 10 Business Days of being sent the relevant
Confirmation will be deemed to be a confirmation of accuracy by Party
B.
|
|
(h)
|
Loan
Facility.
Section 14 of this Agreement is amended by the incorporation of the
following definition:-
|
"Loan
Facility"
means
the secured loan facility agreement dated 19 November 2007 on the terms and
subject to the conditions of which Party A has agreed to make available to
Party
B a loan facility of up to US$45,000,000 (Forty five million US
Dollars).
Capitalised
terms used but not defined shall have the meaning given to them in the Loan
Facility.
References
in this Agreement to the Loan Facility or to any Security Document are to be
interpreted as references to the Loan Facility or to that Security Document
as
amended, supplemented, novated or replaced from time to time.
|
(1)
|
Security.
Party B irrevocably and unconditionally confirms to Party A that
the
obligations of Party B to Party A under or pursuant to this Agreement
shall form part of the Indebtedness and that the performance by Party
B of
those obligations shall be secured by the Security
Documents.
|
|
(j)
|
Process
Agent.
Party B undertakes to notify Party A by no fewer than ten days' written
notice to Party A, in the event that the details of the Process Agent
contained in Part 4 (b) are changed or amended in any
way.
|
9
Part
6. Foreign Exchange Transactions and Currency Option
Transactions
| (a) |
FX
Transactions and Currency Option
Transactions
|
This
Part
6 concerns FX Transactions and Currency Option Transactions as defined in the
1998 FX and Currency Option Definitions published by the International Swaps
and
Derivatives Association, Inc., the Emerging Markets Traders Association and
The
Foreign Exchange Committee (the "1998 FX Definitions") as well as any other
Transaction agreed by the parties to be an FX Transaction or a Currency Option
Transaction. In the event of any inconsistency with any other part of this
Agreement this Part 6 shall prevail.
| (b) |
Scope –
Future and Outstanding
Transactions
|
As
of the
date that this Agreement is effective (and unless agreed otherwise in relation
to any specific Transactions) it shall apply both to:
|
(i)
|
FX
Transactions and Currency Option Transactions outstanding between
the
parties as of such date; and,
|
|
(ii)
|
FX
Transactions and Currency Option Transactions entered into by the
parties
on and after such date.
|
| (c) |
Definitions
|
In
addition to the 2000 ISDA Definitions, this Agreement, and each FX Transaction
and Currency Option Transaction to which it relates, shall be subject to and
incorporate the 1998 FX Definitions except that in the event of inconsistency:
(A) the 1998 FX Definitions as amended herein shall prevail over the 2000 ISDA
Definitions; and (B) this Part 6 shall prevail over both the 2000 ISDA
Definitions and the 1998 FX Definitions.
| (d) |
Confirmations
|
For
the
avoidance of doubt, the parties agree that Confirmations need not follow the
form recommended in the 1998 FX Definitions but may be in such other form and
be
exchanged by such other means (including an electronic messaging system) as
may
be acceptable to the parties. In the event that any Confirmation refers to,
or
purports to incorporate, any other master agreement or market terms, such
reference or purported incorporation shall be disregarded, unless the parties
have expressly agreed otherwise in an amending agreement described as such
and
complying with Section 9(b) of this Agreement (and, notwithstanding Section
1(b)
of this Agreement, in this respect Confirmations shall not prevail over this
Agreement). Confirmations previously issued in respect of FX Transactions and
Currency Option Transactions referred to in paragraph (b)(i) of this Part 6
shall be Confirmations for the purpose of this Agreement.
| (e) |
Payment
of Premiums for Currency Option
Transactions
|
|
(i)
|
Unless
otherwise agreed in writing by the parties, the Premium for any Currency
Option Transaction shall be paid on its Premium Payment
Date.
|
| (ii) |
If
the Premium is not paid on its Premium Payment Date, the Seller may
elect:
|
| (A) |
to
accept a late payment of such
Premium;
|
|
(B)
|
to
give written notice of such non-payment and, if such payment shall
not be
received within two (2) Local Business Days of such notice, treat
the
related Currency Option Transaction as void;
or
|
10
|
(C)
|
to
give written notice of such non-payment and, if such payment shall
not be
received within two (2) Local Business Days of such notice, treat
such
nonpayment as an Event of Default under Section 5(a)(i) of this
Agreement.
|
If
the
Seller elects to act under either (A) or (B) above, the Buyer shall pay all
out-of- pocket costs and actual damages incurred in connection with such late
Premium or void Currency Option Transaction, including, without limitation,
interest on such Premium at the prevailing market rate and any other costs
and
expenses incurred by the Seller in covering its obligation (including without
limitation a delta hedge) with respect to such Currency Option
Transaction.
| (f) |
Netting
Discharge and Termination of Currency Option
Transactions
|
Unless
otherwise agreed, any Call or any Put written by a party will automatically
be
cancelled and discharged, in whole or in part, as applicable, against a Call
or
a Put, respectively written by the other party, such cancellation and discharge
to occur automatically upon the payment in full of the last Premium payable
in
respect of such Currency Option Transactions in accordance with standing payment
instructions provided that such cancellation and discharge may only occur in
respect of Currency Option Transaction:
| (i) |
each
being with respect to the same Put Currency and the same Call
Currency;
|
| (ii) |
each
having the same Expiration Date and Expiration
Time;
|
|
(iii)
|
each
being of the same style (i.e. both being either American style, European
style or Bermudan style);
|
| (iv) |
each
having the same Strike Price;
|
| (v) |
neither
of which shall have been exercised by delivery of a Notice of Exercise;
and
|
| (vi) |
both
of which were entered into by the same Offices of Party A and Party
B;
|
and,
upon
the occurrence of such cancellation and discharge, neither party shall have
any
obligation to the other party in respect of the relevant Currency Option
Transaction or, as the case may be, parts thereof so terminated and discharged.
In the case of a partial termination or discharge of a Currency Option
Transaction (i.e. where the relevant Currency Option Transactions are for
different amounts of the Currency Pair) the remaining portion of such Currency
Option Transaction shall continue to be a Currency Option Transaction for all
purposes of this Agreement.
| (g) |
Payments
on Early Termination
|
For
the
purposes of Section 6(e) of this Agreement in the case of FX Transactions and
Currency Option Transactions only it shall be deemed that no Market Quotation
can be determined.
11
Schedule
10
Form
of Master Agreement Security Deed
52
Private
& Confidential
Dated
19 November 2007
SOFFIVE
SHIPPING CORPORATION (1)
and
THE
ROYAL BANK OF SCOTLAND plc (2)
XXXXXX
XXXX
|
Contents
|
||||
|
Clause
|
Page
|
|||
|
1
|
Definitions
|
1
|
||
|
2
|
Restrictions
|
2
|
||
|
3
|
First
fixed charge
|
3
|
||
|
4
|
Further
documentation etc
|
3
|
||
|
5
|
Representations
|
4
|
||
|
6
|
Notices
|
4
|
||
|
7
|
Supplemental
|
4
|
||
|
8
|
Law
and jurisdiction
|
5
|
THIS
SECURITY DEED
is made
on the 19th
day of
November 2007 BETWEEN:
|
(1)
|
SOFFIVE
SHIPPING CORPORATION,
a
corporation incorporated in the Republic of Liberia having its registered
office at 00 Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxx (the "Owner");
and
|
|
(2)
|
THE
ROYAL BANK OF SCOTLAND plc,
a
company incorporated in Scotland whose registered office is at 00
Xx.
Xxxxxx Xxxxxx, Xxxxxxxxx XX0 0XX, Xxxxxxxx, acting for the purposes
of
this Deed through its branch at The Shipping Business Centre, 0-00
Xxxxx
Xxxxx Xxxxxx, Xxxxxx, XX0X 0XX, Xxxxxxx (the "Bank").
|
WHEREAS
|
(A)
|
By
a loan agreement dated 19 November 2007 and made between (i) the
Owner as
borrower and (ii) the Bank as lender (the "Loan
Agreement"),
the Bank agreed to make available to the Owner upon the terms and
conditions therein described a multicurrency loan of up to Forty
five
million Dollars ($45,000,0000) or the Equivalent Amount in an Optional
Currency or Optional Currencies;
|
|
(B)
|
The
Owner has entered into or may enter into one or more Transactions
(as such
term is defined in the 1992 ISDA Master Agreement dated 19 November
2007
between the Owner and the Bank (the "Master
Swap Agreement"))
as evidenced by one or more Confirmations (as such term is defined
in the
Master Agreement) which are governed by the Master Swap Agreement;
and
|
|
(C)
|
It
is a condition precedent to the Bank advancing the loan under the
Loan
Agreement that the Owner as security for, inter alia, its obligations
under the Loan Agreement shall execute this
Deed.
|
NOW
THIS DEED WITNESSETH AND IT IS HEREBY AGREED as follows:
| 1 |
Definitions
|
|
1.1
|
In
this Deed, unless the context otherwise requires, the following
expressions shall have the following
meanings:
|
"Expenses"
means
the aggregate at any relevant time (to the extent that the same have not been
received or recovered by the Bank) of:
|
(a)
|
all
losses, liabilities, costs, charges, expenses, damages and outgoings
of
whatever nature suffered, incurred or paid by the Bank in connection
with
the exercise of the powers referred to in or granted by the Loan
Agreement, the Master Swap Agreement, this Deed or any of the other
Security Documents or otherwise payable by the Owner;
and
|
|
(b)
|
interest
on all such losses, liabilities, costs, charges, expenses, damages
and
outgoings from the date on which the same were suffered, incurred
or paid
by the Bank until the date of receipt or recovery thereof (whether
before
or after judgment) at a rate per annum calculated in accordance with
clause 3.4 of the Loan Agreement (as conclusively certified by the
Bank);
|
"Loan"
means
the sum of up to Forty five million Dollars ($45,000,000) or the Equivalent
Amount in an Optional Currency or Optional Currencies first referred to in
Recital (A) hereto advanced or to be advanced (as the context may require)
or
the principal amount of such sum outstanding at any relevant time;
"Loan
Agreement"
means
the loan agreement referred to in recital (A) hereto as the same may from time
to time hereafter be supplemented and/or amended;
1
"Master
Swap Agreement"
means
the ISDA Master Swap Agreement (including all Transactions thereunder) referred
to in recital (B) hereto as the same may from time to time hereafter be
supplemented and/or amended;
"Master
Swap Liabilities"
means,
at any relevant time, all liabilities actual or contingent, present or future
of
the Owner to the Bank under the Master Swap Agreement at such time;
"Outstanding
Indebtedness"
means
the aggregate of the Loan and interest accrued and accruing thereon, the Master
Swap Liabilities, the Expenses and all other sums of money from time to time
owing by the Owner to the Bank whether actually or contingently, under the
Loan
Agreement, the Master Swap Agreement, the other Security Documents or any of
them;
"Secured
Property"
means
all rights, title, interest and benefits whatsoever of the Owner under or in
connection with the Master Swap Agreement including, without limitation, all
moneys payable by the Bank to the Owner thereunder (including without limitation
any payment pursuant to termination provisions thereunder) and all claims for
damages in respect of any breach by the Bank of the Master Swap
Agreement;
"Security
Documents"
means
any such document as is defined in the Loan Agreement as a Security Document
(including this Deed and, where the context so admits, the Loan Agreement
itself) or as may from time to time be executed by any person as security for
or
as a guarantee of the Outstanding Indebtedness or any part thereof as the same
may hereafter be supplemented and/or amended (whether or not any such documents
also secures moneys from time to time owing pursuant to any other document
or
agreement), and references to the "Security
Documents"
shall
mean all or any of them as the context so requires;
"Security
Interest"
means a
mortgage, charge (whether fixed or floating) pledge, lien, hypothecation,
encumbrance, assignment, trust arrangement, title retention or other distress,
execution, attachment, arrangement or process of any kind having the effect
of
conferring security; and
"Security
Period"
means
the period commencing on the date of this Deed and terminating upon discharge
of
the security created by the Security Documents by payment of all moneys payable
thereunder.
|
1
2
|
For
the purposes of this Deed an amount shall be deemed to be outstanding
and
to be due and payable to the Bank if the Bank is then entitled to
demand
payment of that amount, notwithstanding that it has not yet served
a
demand.
|
|
1
3
|
Clause
1.1 (Purpose) and clause 1.2 (Definitions) of the Loan Agreement
shall
apply with any necessary modifications for the purposes of this
Deed.
|
|
2
|
Restrictions
|
During
the Security Period the Owner shall not without the prior written consent of
the
Bank, assign or attempt to assign any right (present, future or contingent)
relating to the Secured Property and the Owner irrevocably and unconditionally
confirms to the Bank that no right (present, future or contingent) relating
to
the Secured Property shall be capable of being assigned to, or exercised by,
a
person other than the Owner without the Bank's prior written
consent.
|
2
1
|
In
this clause references to assignment includes the creation, or permitting
to arise, of any form of beneficial interest or Security Interest
and
every other kind of disposition.
|
|
2.2
|
An
act or transaction which is contrary to, or inconsistent with, this
clause
shall be void as regards the Bank.
|
2
|
3
|
First
fixed charge
|
|
3.1
|
The
Owner with full title guarantee, hereby charges and agrees to charge
and
releases and agrees to release to the Bank as a continuing security
for
payment of the Outstanding Indebtedness, by way of first fixed charge,
the
Secured Property.
|
|
3.2
|
Upon
the occurrence of a Default the charge shall become enforceable and
the
Bank shall be entitled then or at any later time or times to appropriate
all or any part of the Secured Property in or towards discharge of
the
then Outstanding Indebtedness or any part thereof, and may do so
notwithstanding that any maturity date attached to any part or parts
of
the Secured Property may not yet have
arrived.
|
|
3.3
|
A
certificate signed by a director or other senior officer of the Bank
and
which states that on a specified date and (if the certificate also
states
this) at a specified time the Bank exercised its rights under this
clause
to appropriate a specified amount of Secured Property in the discharge
of
a specified amount of the Outstanding Indebtedness shall be conclusive
evidence that:
|
| 3 3.1 |
the
Bank's
liabilities in respect of the specified amount of Secured Property;
and
|
| 3 3.2 |
the
specified amount of Outstanding Indebtedness,
|
were
extinguished and discharged on the specified date and, if so stated, at the
specified time.
|
4
|
Further
documentation etc.
|
|
4.1
|
The
Owner shall execute forthwith any document which the Bank may specify
for
the purpose of:
|
| 4 1 1 |
supplementing
the rights which this Deed confers on the Bank in relation to the
Secured
Property; or
|
| 4.1.2 |
creating
a mortgage of the Secured Property to replace or supplement the charge
created in clause 3 above; or
|
| 4.1.3 |
registering
or otherwise perfecting this Deed or any mortgage created under clause
4.1.2 above; or
|
| 4 1 4 |
ensuring
or confirming the validity of anything done or to be done under this
Deed.
|
|
4.2
|
Any
such document shall be in the terms specified by the Bank and, in
the case
of a mortgage of the Secured Property, those terms may include a
provision
entitling the Bank, on or after a Default, to appropriate, or otherwise
deal with, the Secured Property for the purpose of discharging the
Outstanding Indebtedness.
|
|
4.3
|
The
Owner shall also forthwith do any act and execute any document (including
a document which amends or replaces this Deed) which the Bank specifies
for the purpose of enabling or assisting the Bank to comply, in relation
to the Secured Property and/or the Outstanding Indebtedness, with
any
requirement (legally binding or not) applicable to the Bank and,
in
particular, the requirements of any banking supervisory authority
with
regard to netting of cash
collateral.
|
|
4
4
|
For
the purpose of securing performance of the Owner's obligations under
clauses 4.1 to 4.3, the Owner irrevocably appoints the Bank as its
attorney, on its behalf and in its name or otherwise to sign or execute
any document which, in the opinion of the Bank, the Owner is obliged,
or
could be required, to sign or execute under any of the said clauses,
which
the Bank considers necessary or convenient for or in connection with
any
exercise or intended exercise of any rights which the Bank has under
this
Deed or any other purpose connected with this
Deed.
|
3
|
4.5
|
The
Bank may appoint any person or persons as its substitute under that
power
of attorney referred to in clause 4.4 and may also delegate that
power of
attorney to any person or persons.
|
|
5
|
Representations
|
|
5.1
|
The
Owner represents and warrants to the Bank as
follows:
|
| 5.1.1 |
the
Owner is the sole legal and beneficial owner of the Secured Property
and
has good marketable title to it;
|
| 5.1.2 |
no
third party has or will have any interest, right or claim of any
kind in
relation to any of the Secured
Property;
|
| 5.1.3 |
the
Owner has the corporate power, arid has taken all necessary corporate
action to authorise the execution of this Deed, the Loan Agreement and the
Master Swap Agreement; and
|
| 5.1.4 |
nothing
in this Deed will or might result in the Owner contravening any law
or
regulation which is now in force or which has been published but
not yet
brought into force or any contractual or other obligation which the
Owner
now has to a third party.
|
|
6
|
Notices
|
Clause
17
(Notices and other matters) of the Loan Agreement will apply to this Deed
mutatis mutandis as if references to the Loan Agreement were references to
this
Deed save that references therein to the "Borrower" shall be construed as
references to the Owner.
|
7
|
Supplemental
|
|
7.1
|
This
Deed, including the charge created by clause 3, shall remain in force
as a
continuing security until the Security Period has
ended.
|
|
7.2
|
The
rights of the Bank under this Deed will not be discharged or prejudiced
by:
|
| 7.2.1 |
any
kind of amendment or supplement to the other Security
Documents;
|
| 7.2.2 |
any
arrangement or concession, including a rescheduling, which the Bank
may
make in relation to any of the Loan Agreement, the Master Swap Agreement
and the other Security Documents, or any action by the Bank and/or
the
Owner and/or any other party thereto which is contrary to the terms
of the
Loan Agreement, the Master Swap Agreement and the other Security
Documents;
|
| 7.2 3 |
any
release or discharge, whether granted by the Bank or effected by
the
operation of any law, of all or any of the obligations of the Owner
and/or
any other party thereto under any of the Loan Agreement, the Master
Swap
Agreement and the other Security
Documents;
|
| 7 2 4 |
any
change in the ownership and/or control of the Owner and/or any other
party
thereto and/or merger, demerger or reorganisation involving the Owner
and/or any other party thereto; and
|
| 7.2.5 |
any
event or matter which is similar to, or connected with, any of the
foregoing,
|
and
the
rights of the Bank under this Deed do not depend on the Loan Agreement, the
Master Swap Agreement or any of the Security Documents being or remaining
valid.
|
7.3
|
Nothing
in this Deed excludes or restricts any right of counterclaim, set-off,
right to net payments, or any other right or remedy which the Bank
would
have had other than under the general law, the Loan Agreement, the
Master
Swap Agreement and the other Security
Documents.
|
4
|
8
|
Law
and jurisdiction
|
|
8.1
|
Law
|
This
Agreement is governed by and shall be construed in accordance with English
law.
|
8.2
|
Submission
to jurisdiction
|
For
the
benefit of the Bank, the parties hereto irrevocably agree that any legal action
or proceedings in connection with this Deed may be brought in the English
courts, or in the courts of any other country chosen by the Bank, each of which
shall have jurisdiction to settle any disputes arising out of or in connection
with this Deed. The Owner irrevocably and unconditionally submits to the
jurisdiction of the English courts and the courts of any country chosen by
the
Bank and irrevocably designates, appoints and empowers Cheeswrights at present
of Xxxxxxxx Xxxxx, 000 Xxxxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX, Xxxxxxx to receive,
for it and on its behalf, service of process issued out of the English courts
in
any such legal action or proceedings arising out of or in connection with this
Deed. The submission to such jurisdiction shall not (and shall not be construed
so as to) limit the right of the Bank to take proceedings against the Owner
in
any other court of competent jurisdiction nor shall the taking of proceedings
in
any one or more jurisdictions preclude the taking of proceedings in any other
jurisdiction, whether concurrently or not.
The
parties further agree that only the Courts of England and not those of any
other
State shall have jurisdiction to determine any claim which the Owner may have
against the Bank arising out of or in connection with this Deed.
|
8.3
|
Contracts
(Rights of Third Parties) Xxx
0000
|
No
term
of this Agreement is enforceable under the Contracts (Rights of Third Parties)
Xxx 0000 by a person who is not a party to this Agreement.
IN
WITNESS
whereof
the Owner has caused this Deed to be duly executed the day and year first above
written.
5
|
EXECUTED
as a DEED
|
)
|
|
|
by
|
)
|
|
|
the
duly authorised attorney of
|
)
|
|
|
SOFFIVE
SHIPPING CORPORATION
|
)
|
|
|
for
it and on its behalf
|
)
|
|
|
in
the presence of:
|
)
|
|
|
ACCEPTED
|
)
|
|
|
by
|
)
|
|
|
the
duly authorised attorney of
|
||
|
THE
ROYAL BANK OF SCOTLAND plc
|
)
|
|
|
for
it and on its behalf
|
||
|
in
the presence of:
|
)
|
6
Private
& Confidential
Manager's
Undertaking
|
To:
|
The
Royal Bank of Scotland plc
|
|
The
Shipping Business Centre
|
|
|
0-00
Xxxxx Xxxxx Xxxxxx
|
|
|
Xxxxxx
XX0X 0XX
|
|
|
Xxxxxxx
|
|
|
From:
|
Safety
Management Overseas S.A.
|
|
Edificio
Torre Universal
|
|
|
Piso
12 Xxxxxxx Xxxxxxxx Xxxx
|
|
|
X.X.
Xxx 0000 Xxxxxx
|
|
|
Xxxxxxxx
of Panama
|
20
November 2007
Dear
Sirs
Multicurrency
loan of up to $45,000,000 to Soffive Shipping Corporation
|
1
|
Loan
Agreement
|
We
understand that under a Loan Agreement (the "Loan
Agreement")
dated
19 November 2007 between (1) yourselves The Royal Bank of Scotland plc (the
"Bank"
which
expression includes the Bank's successors and assigns) and (2) Soffive Shipping
Corporation (the "Borrower")
the
Bank has agreed to make a multicurrency loan of up to $45,000,000 (the
"Loan")
to the
Borrower and that it is a condition to the Bank's agreement to make the Loan
to
the Borrower that we, Safety Management Overseas S.A. (the "Manager"),
enter
into this letter of undertaking (the "Letter")
in
favour of the Bank.
Words
and
expressions defined in the Loan Agreement shall, unless otherwise specified
herein, have the same meanings when used herein.
|
2
|
Confirmation
of appointment
|
We
hereby
confirm that we have been appointed as the manager of m.v. Sophia
(the
"Ship")
registered under Cyprus flag at the Port of Limassol pursuant to a management
agreement (the "Management
Agreement")
dated
19 April 2007 made between ourselves and the Borrower and that we have accepted
out appointment thereunder in accordance with the terms and conditions
thereof.
|
3
|
Representation
and warranty
|
|
3.1
|
We
hereby represent and warrant that the copy of the Management Agreement
set
out in Appendix 1 to this Letter is a true and complete copy of the
Management Agreement, that the Management Agreement constitutes valid
and
binding obligations of the Manager enforceable in accordance with
its
terms and that there have been no amendments or variations thereto
or
defaults thereunder by the Manager or, to the best of the Manager's
knowledge and belief, the Borrower.
|
1
|
3.2
|
We
hereby confirm that the representations and warranties set out in
clauses
8.2.9, 8.2.10 and 8.2.11 of the Loan Agreement are true and correct
in all
respects.
|
|
4
|
Undertakings
|
The
Manager undertakes with the Bank that throughout the Security Period (as such
term is defined in the General Assignment dated 20 November 2007 (the
"General
Assignment")
executed by the Borrower in favour of the Bank):
|
4.1
|
the
Manager will not agree or purport to agree to any amendment or variation
of the Management Agreement without the prior written consent of
the
Bank;
|
|
4.2
|
the
Manager will procure that any sub-manager appointed by it pursuant
to the
provisions of the Management Agreement will, on or before the date
of such
appointment, enter into an undertaking in favour of the Bank in
substantially the same form (mutatis mutandis) as this
Letter;
|
|
4.3
|
the
Manager will not, without the prior written consent of the Bank,
take any
action or institute any proceedings or make or assert any claim on
or in
respect of the Ship or its policies and contracts of insurance (which
expression includes all entries of the Ship in a protection and indemnity
or war risks association) which are from time to time during the
Security
Period (as such term is defined in the General Assignment) in place
or
taken out or entered into by or for the benefit of the Borrower (whether
in the sole name of the Borrower or in the joint names of the Borrower
and
the Bank or otherwise) in respect of the Ship and her Earnings (as
such
term is defined below) or otherwise howsoever in connection with
the Ship
and all benefits thereof (including claims of whatsoever nature and
return
of premiums) (together the "Insurances") or all moneys whatsoever
from
time to time due or payable to the Borrower during the Security Period
(as
such term is defined in the General Assignment) arising out of the
use or
operation of the Ship including (but without limiting the generality
of
the foregoing) all freight, hire and passage moneys, income arising
under
pooling arrangements, compensation payable to the Borrower in the
event of
requisition of the Ship for hire, remuneration for salvage and towage
services, demurrage and detention moneys, and damages for breach
(or
payments for variation or termination) of any charter party or other'
contract for the employment of the Ship (the "Earnings")
or any other property or other assets of the Borrower which the Bank
has
previously advised the Manager are subject to any Encumbrance or
right of
set-off in favour of the Bank by virtue of any of the security documents
executed in favour of the Bank pursuant to the Loan
Agreement;
|
|
4.4
|
the
Manager does hereby subordinate any claim that it may have against
the
Borrower or otherwise in respect of the Ship and its Earnings, Insurances
and Requisition Compensation (as such term is defined in the General
Assignment) to the claims of the Bank under the Loan Agreement and
the
other Security Documents and undertakes to exercise no right to which
it
may be entitled in respect of the Borrower and/or the Ship and/or
its
Earnings and/or Insurances and/or Requisition Compensation in competition
with the Bank;
|
|
4.5
|
the
Manager will discontinue any such action or proceedings or claim
which may
have been taken, instituted or made or asserted, promptly upon notice
from
the Bank to do so;
|
|
4.6
|
the
Manager will promptly notify the Bank if at any time the amount owed
by
the Borrower to the Manager pursuant to the Management Agreement
(whether
in respect of the Manager's remuneration or disbursements or otherwise)
exceeds US$100,000 or the equivalent in other currencies;
and
|
|
4.7
|
the
Manager will provide the Bank with such information concerning the
Ship as
the Bank may from time to time reasonably
require.
|
2
|
5
|
Insurance
assignment
|
|
5.1
|
By
way of security for the aggregate of the Loan and interest accrued
and
accruing thereon, the Expenses (as such term is defined in the General
Assignment), the Master Swap Agreement Liabilities (as such term
is
defined in the General Assignment) and all other sums of money from
time
to time owing by the Borrower to the Bank, whether actually or
contingently, under the Security Documents, the Master Swap Agreement
or
any of them to which the Borrower is or is to be a party (the
"Outstanding
Indebtedness")
the Manager with full title guarantee hereby irrevocably and
unconditionally assigns and agrees to assign to the Bank all of the
Manager's rights, title and interest in and to and the benefit of
the
Insurances.
|
|
5.2
|
The
Manager hereby undertakes to procure that a duly completed notice
in the
form set out in Appendix 2 to this Letter is given to all insurers
of the
Ship and to procure that such notice is promptly endorsed on all
policies
and entries in respect of the Insurances and agrees promptly to authorise
and/or instruct any broker, insurer or association with or through
whom
Insurances may be effected to endorse on any policy or entry or otherwise
to give effect to such loss payable clause as may be stipulated by
the
Bank.
|
|
5.3
|
The
Bank shall, at the Manager's cost, re-assign to the Manager all the
Manager's right, title and interest in the Insurances upon the Outstanding
Indebtedness being discharged in full to the satisfaction of the
Bank.
|
|
5.4
|
Any
moneys in respect of the Insurances which would (but for the assignment
contained in clause 5.1 above) be payable to the Manager shall be
applied
in accordance with clause 2.3 of the General Assignment and/or (as
the
case may be) clause 2.6 of the General
Assignment.
|
|
6
|
Law
and jurisdiction
|
|
6
1
|
The
agreement constituted by this Letter shall be governed by and construed
in
accordance with English law.
|
|
6.2
|
The
Manager agrees, for the benefit of the Bank, that any legal action
or
proceedings arising out of or in connection with this letter against
the
Manager or any of its assets may be brought in the English courts.
The
Manager irrevocably and unconditionally submits to the jurisdiction
of
such courts and whoever irrevocably designates, appoints and empowers
Cheeswrights at present of Xxxxxxxx Xxxxx, 000 Xxxxxxxxxx Xxxxxx,
Xxxxxx
XX0X 0XX, Xxxxxxx to receive, for it and on its behalf, service of
process
issued out of the English courts in any such legal action or proceedings.
The submission to such jurisdiction shall not (and shall not be construed
so as to) limit the rights of the Bank to take any proceedings against
the
Manager in the courts of any other competent jurisdiction nor shall
the
taking of proceedings in any one or more jurisdictions preclude the
taking
of proceedings in any other jurisdiction, whether concurrently or
not.
|
|
6
3
|
No
term of this Letter is enforceable under the Contracts (Rights of
Third
Parties) Xxx 0000 by a person who is not a party to this Letter or
to whom
this Letter is not addressed.
|
|
Yours
faithfully
|
|
______________________________________
|
|
For
and on behalf of
|
|
SAFETY
MANAGEMENT OVERSEAS S.A.
|
3
Appendix
1
Copy
of the Management Agreement
4
Appendix
2
Notice
of Assignment
We,
SAFETY
MANAGEMENT OVERSEAS S.A.,
the
managers of m.v. Sophia,
HEREBY
GIVE NOTICE that by a first assignment dated [•]
2007 and entered into by us with THE
ROYAL BANK OF SCOTLAND plc
there
has been assigned by us to the said The Royal Bank of Scotland plc as first
assignees all of our right, title and interest in and to the insurances in
respect of the said Ship including the insurances constituted by the Policy
whereon this notice is endorsed.
|
_______________________________
|
|
SIGNED
|
|
for
and on behalf of
|
|
SAFETY
MANAGEMENT OVERSEAS S.A.
|
|
Dated:
[•]
|
5
Private
& Confidential
Manager's
Undertaking
|
To:
|
The
Royal Bank of Scotland plc
|
|
The
Shipping Business Centre
|
|
|
0-00
Xxxxx Xxxxx Xxxxxx
|
|
|
Xxxxxx
XX0X 0XX
|
|
|
Xxxxxxx
|
|
|
From:
|
Safety
Management Overseas S.A.
|
|
Edificio
Torre Universal
|
|
|
Piso
12 Xxxxxxx Xxxxxxxx Xxxx
|
|
|
X.X.
Xxx 0000 Xxxxxx
|
|
|
Xxxxxxxx
of Panama
|
20
November 2007
Dear
Sirs
Multicurrency
loan of up to $45,000,000 to Soffive Shipping Corporation
| 1 |
Loan
Agreement
|
We
understand that under a Loan Agreement (the "Loan
Agreement")
dated
19 November 2007 between (1) yourselves The Royal Bank of Scotland plc (the
"Bank"
which
expression includes the Bank's successors and assigns) and (2) Soffive Shipping
Corporation (the "Borrower")
the
Bank has agreed to make a multicurrency loan of up to $45,000,000 (the
"Loan")
to the
Borrower and that it is a condition to the Bank's agreement to make the Loan
to
the Borrower that we, Safety Management Overseas S.A. (the "Manager"),
enter
into this letter of undertaking (the "Letter")
in
favour of the Bank.
Words
and
expressions defined in the Loan Agreement shall, unless otherwise specified
herein, have the same meanings when used herein.
| 2 |
Confirmation
of appointment
|
We
hereby
confirm that we have been appointed as the manager of m.v. Sophia
(the
"Ship")
registered under Cyprus flag at the Port of Limassol pursuant to a management
agreement (the "Management
Agreement")
dated
19 April 2007 made between ourselves and the Borrower and that we have accepted
out appointment thereunder in accordance with the terms and conditions
thereof.
| 3 |
Representation
and warranty
|
|
3
1
|
We
hereby represent and warrant that the copy of the Management Agreement
set
out in Appendix 1 to this Letter is a true and complete copy of the
Management Agreement, that the Management Agreement constitutes valid
and
binding obligations of the Manager enforceable in accordance with
its
terms and that there have been no amendments or variations thereto
or
defaults thereunder by the Manager or, to the best of the Manager's
knowledge and belief, the Borrower.
|
1
|
3.2
|
We
hereby confirm that the representations and warranties set out in
clauses
8.2.9, 8.2.10 and 8.2.11 of the Loan Agreement are true and correct
in all
respects.
|
| 4 |
Undertakings
|
The
Manager undertakes with the Bank that throughout the Security Period (as such
term is defined in the General Assignment dated 20 November 2007 (the
"General
Assignment")
executed by the Borrower in favour of the Bank):
|
4.1
|
the
Manager will not agree or purport to agree to any amendment or variation
of the Management Agreement without the prior written consent of
the
Bank;
|
|
4.2
|
the
Manager will procure that any sub-manager appointed by it pursuant
to the
provisions of the Management Agreement will, on or before the date
of such
appointment, enter into an undertaking in favour of the Bank in
substantially the same form (mutatis mutandis) as this
Letter;
|
|
4.3
|
the
Manager will not, without the prior written consent of the Bank,
take any
action or institute any proceedings or make or assert any claim on
or in
respect of the Ship or its policies and contracts of insurance (which
expression includes all entries of the Ship in a protection and indemnity
or war risks association) which are from time to time during the
Security
Period (as such term is defined in the General Assignment) in place
or
taken out or entered into by or for the benefit of the Borrower (whether
in the sole name of the Borrower or in the joint names of the Borrower
and
the Bank or otherwise) in respect of the Ship and her Earnings (as
such
term is defined below) or otherwise howsoever in connection with
the Ship
and all benefits thereof (including claims of whatsoever nature and
return
of premiums) (together the "Insurances")
or all moneys whatsoever from time to time due or payable to the
Borrower
during the Security Period (as such term is defined in the General
Assignment) arising out of the use or operation of the Ship including
(but
without limiting the generality of the foregoing) all freight, hire
and
passage moneys, income arising under pooling arrangements, compensation
payable to the Borrower in the event of requisition of the Ship for
hire,
remuneration for salvage and towage services, demurrage and detention
moneys, and damages for breach (or payments for variation or termination)
of any charter party or other contract for the employment of the
Ship (the
"Earnings")
or any other property or other assets of the Borrower which the Bank
has
previously advised the Manager are subject to any Encumbrance or
right of
set-off in favour of the Bank by virtue of any of the security documents
executed in favour of the Bank pursuant to the Loan
Agreement;
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|
4.4
|
the
Manager does hereby subordinate any claim that it may have against
the
Borrower or otherwise in respect of the Ship and its Earnings, Insurances
and Requisition Compensation (as such term is defined in the General
Assignment) to the claims of the Bank under the Loan Agreement and
the
other Security Documents and undertakes to exercise no right to which
it
may be entitled in respect of the Borrower and/or the Ship and/or
its
Earnings and/or Insurances and/or Requisition Compensation in competition
with the Bank;
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|
4
5
|
the
Manager will discontinue any such action or proceedings or claim
which may
have been taken, instituted or made or asserted, promptly upon notice
from
the Bank to do so;
|
|
4
6
|
the
Manager will promptly notify the Bank if at any time the amount owed
by
the Borrower to the Manager pursuant to the Management Agreement
(whether
in respect of the Manager's remuneration or disbursements or otherwise)
exceeds US$100,000 or the equivalent in other currencies;
and
|
|
4.7
|
the
Manager will provide the Bank with such information concerning the
Ship as
the Bank may from time to time reasonably
require.
|
2
|
5
|
Insurance
assignment
|
|
5.1
|
By
way of security for the aggregate of the Loan and interest accrued
and
accruing thereon, the Expenses (as such term is defined in the General
Assignment), the Master Swap Agreement Liabilities (as such term
is
defined in the General Assignment) and all other sums of money from
time
to time owing by the Borrower to the Bank, whether actually or
contingently, under the Security Documents, the Master Swap Agreement
or
any of them to which the Borrower is or is to be a party (the
"Outstanding
Indebtedness")
the Manager with full title guarantee hereby irrevocably and
unconditionally assigns and agrees to assign to the Bank all of the
Manager's rights, title and interest in and to and the benefit of
the
Insurances.
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|
5.2
|
The
Manager hereby undertakes to procure that a duly completed notice
in the
form set out in Appendix 2 to this Letter is given to all insurers
of the
Ship and to procure that such notice is promptly endorsed on all
policies
and entries in respect of the Insurances and agrees promptly to authorise
and/or instruct any broker, insurer or association with or through
whom
Insurances may be effected to endorse on any policy or entry or otherwise
to give effect to such loss payable clause as may be stipulated by
the
Bank.
|
|
5.3
|
The
Bank shall, at the Manager's cost, re-assign to the Manager all the
Manager's right, title and interest in the Insurances upon the Outstanding
Indebtedness being discharged in full to the satisfaction of the
Bank.
|
|
5.4
|
Any
moneys in respect of the Insurances which would (but for the assignment
contained in clause 5.1 above) be payable to the Manager shall be
applied
in accordance with clause 2.3 of the General Assignment and/or (as
the
case may be) clause 2.6 of the General
Assignment.
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|
6
|
Law
and jurisdiction
|
|
6.1
|
The
agreement constituted by this Letter shall be governed by and construed
in
accordance with English law.
|
|
6.2
|
The
Manager agrees, for the benefit of the Bank, that any legal action
or
proceedings arising out of or in connection with this letter against
the
Manager or any of its assets may be brought in the English courts.
The
Manager irrevocably and unconditionally submits to the jurisdiction
of
such courts and whoever irrevocably designates, appoints and empowers
Cheeswrights at present of Xxxxxxxx Xxxxx, 000 Xxxxxxxxxx Xxxxxx,
Xxxxxx
XX0X 0XX, Xxxxxxx to receive, for it and on its behalf, service of
process
issued out of the English courts in any such legal action or proceedings.
The submission to such jurisdiction shall not (and shall not be construed
so as to) limit the rights of the Bank to take any proceedings against
the
Manager in the courts of any other competent jurisdiction nor shall
the
taking of proceedings in any one or more jurisdictions preclude the
taking
of proceedings in any other jurisdiction, whether concurrently or
not.
|
|
6
3
|
No
term of this Letter is enforceable under the Contracts (Rights of
Third
Parties) Xxx 0000 by a person who is not a party to this Letter or
to whom
this Letter is not addressed.
|
|
Yours
faithfully
|
|
_____________________________
|
|
For
and on behalf of
|
|
SAFETY
MANAGEMENT OVERSEAS S.A.
|
3
Appendix
1
Copy
of the Management Agreement
4
Appendix
2
Notice
of Assignment
We,
SAFETY
MANAGEMENT OVERSEAS S.A.,
the
managers of m.v. Sophia,
HEREBY
GIVE NOTICE that by a first assignment dated [•] 2007 and entered into by us
with THE
ROYAL BANK OF SCOTLAND plc
there
has been assigned by us to 'the said The Royal Bank of Scotland plc as
first
assignees all of our right, title and interest in and to the insurances
in
respect of the said Ship including the insurances constituted by the Policy
whereon this notice is endorsed.
|
____________________________________
|
|
SIGNED
|
|
for
and on behalf of
|
|
SAFETY
MANAGEMENT OVERSEAS S.A.
|
|
Dated:
[•]
|
5
|
)
|
||
|
by
XXXXXX XXXXXXXXXXX
|
)
|
_________________________________
|
|
for
and on behalf of
|
)
|
Attorney-in-fact
|
|
SOFFIVE
SHIPPING CORPORATION
|
)
|
|
|
SIGNED
|
)
|
|
|
by
XXXX XXXXX
|
)
|
_________________________________
|
|
)
|
Attorney-in-fact
|
|
|
THE
ROYAL BANK OF SCOTLAND plc
|
)
|
1