LIONO SHIPPING CO. SNOOPY SHIPPING CO. CINDERELLA SHIPPING CO. LUFFY SHIPPING CO.
Exhibit 4.18
LIONO SHIPPING CO.
SNOOPY SHIPPING CO.
CINDERELLA SHIPPING CO.
LUFFY SHIPPING CO.
as joint and several Borrowers
THE BANKS AND FINANCIAL INSTITUTIONS
listed in Schedule 1
as Lenders
and
as Agent, Mandated Lead Arranger
and Security Trustee
relating to
a senior secured term loan facility of up to US$40,750,000
to provide finance secured on
four bulk carrier vessels named “MAGIC THUNDER”, “MAGIC NEBULA”,
“MAGIC ECLIPSE” and “MAGIC TWILIGHT”
Index
| Clause | Page | |
|
Interpretation
|
1
|
|
|
2
|
Facility
|
24
|
|
3
|
Position of the Lenders
|
24
|
|
4
|
Drawdown
|
25
|
|
5
|
Interest
|
26
|
|
6
|
Interest Periods
|
28
|
|
7
|
Default Interest
|
29
|
|
8
|
Repayment and Prepayment
|
30
|
|
9
|
Conditions Precedent
|
34
|
|
10
|
Representations and Warranties
|
35
|
|
11
|
General Undertakings
|
39
|
|
12
|
Corporate Undertakings
|
46
|
|
13
|
Insurance
|
47
|
|
14
|
Ship Covenants
|
54
|
|
15
|
Security Cover
|
60
|
|
16
|
Payments and Calculations
|
62
|
|
17
|
Application of Receipts
|
64
|
|
18
|
Application of Earnings
|
65
|
|
19
|
Events of Default
|
68
|
|
20
|
Fees and Expenses
|
73
|
|
21
|
Indemnities
|
74
|
|
22
|
No Set-Off or Tax Deduction
|
77
|
|
23
|
Illegality, etc.
|
80
|
|
24
|
Increased Costs
|
80
|
|
25
|
Set-Off
|
82
|
|
26
|
Transfers and Changes in Lending Offices
|
83
|
|
27
|
Variations and Waivers
|
88
|
|
28
|
Notices
|
91
|
|
29
|
Joint and Several Liability
|
94
|
|
30
|
Supplemental
|
95
|
|
31
|
Bail-In
|
96
|
|
32
|
Law and Jurisdiction
|
96
|
|
Schedules
|
||
|
Schedule 1 Lenders and Commitments
|
98
|
|
|
Schedule 2 Drawdown Notice
|
99
|
|
|
Schedule 3 Condition Precedent Documents
|
100
|
|
|
Part A
|
100
|
|
|
Part B
|
102
|
|
|
Schedule 4 Mandatory Cost Formula
|
104
|
|
|
Schedule 5 Transfer Certificate
|
106
|
|
|
Schedule 6 Power of Attorney
|
110
|
|
|
Schedule 7 Form of Compliance Certificate
|
111
|
|
|
Execution
|
||
|
Execution Pages
|
112
|
|
THIS AGREEMENT is made on ______ July 2021
BETWEEN
| (2) |
THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1 (Lenders and Commitments), as Lenders;
|
| (3) |
HAMBURG COMMERCIAL BANK AG acting through its office at Xxxxxxx-Xxxxxxxxx-Xxxxx 00, 00000 Xxxxxxx, Xxxxxxx, as Agent;
|
| (4) |
HAMBURG COMMERCIAL BANK AG acting through its office at Xxxxxxx-Xxxxxxxxx-Xxxxx 00, 00000 Xxxxxxx, Xxxxxxx, as Mandated Lead Arranger;
|
| (5) |
HAMBURG COMMERCIAL BANK AG acting through its office at Xxxxxxx-Xxxxxxxxx-Xxxxx 00, 00000 Xxxxxxx, Xxxxxxx, as Security Trustee.
|
| (A) |
The Lenders have agreed to make available to the Borrowers a secured term loan facility of up to US$40,750,000 in four advances as follows:
|
| (i) |
an advance in an amount of up to the lesser of (AA) US$10,750,000 and (BB) 50 per cent. of the Initial Market Value of Ship A;
|
| (ii) |
an advance in an amount of up to the lesser of (AA) US$10,000,000 and (BB) 50 per cent. of the Initial Market Value of Ship B;
|
| (iii) |
an advance in an amount of up to the lesser of (AA) US$10,000,000 and (BB) 50 per cent. of the Initial Market Value of Ship C; and
|
| (iv) |
an advance in an amount of up to the lesser of (AA) US$10,000,000 and (BB) 50 per cent. of the Initial Market Value of Ship D,
|
for the purpose of partly financing the Ships’ Initial Market Value (as defined below).
IT IS AGREED as follows:
| 1 |
INTERPRETATION
|
| 1.1 |
Definitions
|
“Account” means each of the Earnings Accounts, the Liquidity Account, the Dry Dock
Reserve Account and the Retention Account and, in the plural, means all of them.
“Account Bank” means Hamburg Commercial Bank AG, acting
in such capacity through its office at Xxxxxxx-Xxxxxxxxx-Xxxxx 00, 00000 Xxxxxxx, Xxxxxxx, or any successor.
“Account Pledge” means, in relation to each Account, a pledge agreement creating
security in respect of that Account in the Agreed Form and, in the plural, means all of them.
“Advance” means each of Advance A, Advance B, Advance C and Advance D and, in the plural, means all of them.
“Advance A” means the principal amount of the borrowing by the Borrowers under
this Agreement in respect of Ship A or, as the context may require, the principal amount outstanding of such Advance in respect of that Ship under this Agreement.
“Advance B” means the principal amount of the borrowing by the Borrowers under
this Agreement in respect of Ship B or, as the context may require, the principal amount outstanding of such Advance in respect of that Ship under this Agreement.
“Advance C” means the principal amount of the borrowing by the Borrowers under this Agreement in respect of
Ship C or, as the context may require, the principal amount outstanding of such Advance in respect of that Ship under this Agreement.
“Advance D” means the principal amount of the borrowing by the Borrowers under this Agreement in respect of
Ship D or, as the context may require, the principal amount outstanding of such Advance in respect of that Ship under this Agreement.
“Agency and Trust Agreement” means the agency and trust agreement executed or to
be executed between the Borrowers and the Creditor Parties in the Agreed Form.
“Agent” means Hamburg Commercial Bank AG, acting in such capacity through its office at Xxxxxxx-Xxxxxxxxx-Xxxxx 00, X-00000 Xxxxxxx, Xxxxxxx, or any successor of it appointed under clause 5 of the Agency and Trust
Agreement.
“Aggregate Insurable Amount” has the meaning given to it in Clause 13.16 (Mortgagee’s interest and additional perils insurances).
“Agreed Form” means in relation to any document, that document in the form approved in writing by the Agent
(acting on the instructions of the Majority Lenders) or as otherwise approved in accordance with any other approval procedure specified in any relevant provisions of any Finance Document.
“Approved Broker” means each of Arrow, Clarksons, Maersk Brokers and Xxxx Xxxxxxxx
(or any affiliate of such person through which valuations are commonly issued) and, in the plural, means all of them.
“Approved Flag” means, in relation to a Ship, the Republic of the Xxxxxxxx Islands
flag or such other flag as the Agent may approve (in its sole and absolute discretion) as the flag on which that Ship is or, as the case may be, shall be registered.
2
“Approved Flag State” means, in relation to a Ship, the Republic of the Xxxxxxxx
Islands or any other country in which the Agent may approve that that Ship is or, as the case may be, shall be registered.
| (a) |
Pavimar S.A. a corporation incorporated and existing in the Republic of the Xxxxxxxx Islands whose registered address is at Trust Company
Complex, Ajeltake Road, Ajeltake Island, Majuro, Xxxxxxxx Islands MH96960;
|
| (b) |
Castor Ships;
|
| (c) |
or any other company which the Agent (acting on the instructions of the Majority Lenders) may approve from time to time as the commercial and/or
technical manager of that Ship.
|
“Approved Manager’s Undertaking” means, in relation to each Ship, a letter of
undertaking including, inter alia, an assignment of each Approved Manager’s rights, title and interest in the Insurances of that Ship executed or to be executed by that Approved Manager in favour of the
Security Trustee in the Agreed Form agreeing certain matters in relation to that Approved Manager serving as manager of that Ship and subordinating its rights against that Ship and the Borrower which is the owner thereof
to the rights of the Creditor Parties under the Finance Documents and, in the plural, means all of them.
“Article 55 BRRD” means Article 55 of Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms.
“Assignable Charter” means, in relation to a Ship, any time charterparty, consecutive voyage charter or
contract of affreightment in respect of such Ship having a duration (or capable of exceeding a duration) of 12 months or more and any guarantee of the obligations of the charterer under such charter or any bareboat charter in respect of that Ship
and any guarantee of the obligations of the charterer under such bareboat charter, entered or to be entered into by the Borrower which is the owner thereof and a charterer or, as the context may require, bareboat charterer and, in the plural, means
all of them.
“Availability Period” means, in relation to each Advance, the period commencing on the date of this Agreement
and ending on:
| (a) |
30 August 2021 (or such later date as the Agent may, with the authorisation of the Lenders, agree with the Borrowers); or
|
| (b) |
if earlier, the date on which the Total Commitments are fully borrowed, cancelled or terminated.
|
3
| (c) |
in relation to the United Kingdom, the UK Bail-In Legislation.
|
“Basel III” means, together:
| (a) |
the agreements on capital requirements, a leverage ratio and liquidity standards contained in “Basel III: A global regulatory framework for more resilient banks and banking systems”,
“Basel III: International framework for liquidity risk measurement, standards and monitoring” and “Guidance for national authorities operating the countercyclical capital buffer” published by the Basel Committee on Banking Supervision in
December 2010, each as amended, supplemented or restated;
|
| (b) |
the rules for global systemically important banks contained in “Global systemically important banks: assessment methodology and the additional loss absorbency requirement - Rules
text” published by the Basel Committee on Banking Supervision in November 2011, as amended, supplemented or restated; and
|
| (c) |
any further guidance or standards published by the Basel Committee on Banking Supervision relating to “Basel III”.
|
“Borrower” means each of Borrower A, Borrower B, Borrower C and Borrower D, and,
in the plural, means all of them.
“Borrower A” means Liono Shipping Co., a corporation incorporated and existing in
the Republic of the Xxxxxxxx Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Xxxxxxxx Xxxxxxx XX00000.
“Borrower B” means Snoopy Shipping Co., a corporation incorporated and existing in
the Republic of the Xxxxxxxx Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Xxxxxxxx Xxxxxxx XX00000.
“Borrower C” means Cinderella Shipping Co., a corporation incorporated and
existing in the Republic of the Xxxxxxxx Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Xxxxxxxx Xxxxxxx XX00000.
“Borrower D” means Luffy Shipping Co., a corporation incorporated and existing in the Republic of the Xxxxxxxx
Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Xxxxxxxx Xxxxxxx XX00000.
“Business Day” means a day (other than a Saturday or Sunday) on which banks are
open for general business:
| (a) |
in Hamburg and London regarding the fixing of any interest rate which is required to be determined under this Agreement or any Finance Document;
|
4
| (b) |
in Hamburg, Athens and New York in respect of any payment which is required to be made under a Finance Document; and
|
| (c) |
in Hamburg, Athens and Limassol regarding any other action to be taken under this Agreement or any other Finance Document.
|
“Cash Shortfall” has the meaning given to it in Clause 11.19 (Minimum
Liquidity and Additional Minimum Liquidity).
“Castor Ships” means Castor Ships S.A., a corporation incorporated and existing
in the Republic of the Xxxxxxxx Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Xxxxxxxx Xxxxxxx XX00000;
| (a) |
in relation to a Security Party (other than the Corporate Guarantor and Castor Ships) or a Borrower, a change in:
|
| (i) |
the ultimate beneficial ownership of any of the shares in that Security Party; or
|
| (ii) |
the ultimate control of the voting rights attaching to any of those shares; or
|
| (iii) |
the legal ownership of any of those shares; and
|
| (b) |
| (c) |
For the purpose of sub-paragraphs (b) above “control” means the power (whether by way of ownership of shares, proxy, contract,
agency or otherwise) to:
|
| (i) |
cast, or control the casting of, more than 50 per cent. of the maximum number of votes that might be cast at a general meeting of the Corporate Guarantor; or
|
| (ii) |
appoint or remove all, or the majority, of the directors or other equivalent officers of the Corporate Guarantor; or
|
| (iii) |
give directions with respect to the operating and financial policies of the Corporate Guarantor with which the directors or other equivalent officers of the Corporate
Guarantor are obliged to comply; and/or
|
For the purpose of paragraph (b) above “acting in concert” means a group of persons who, pursuant to an agreement or understanding (whether formal or informal), actively co-operate, through the acquisition directly or indirectly of shares in the Corporate
Guarantor by any of them, either directly or indirectly, to obtain or consolidate control of the Corporate Guarantor.
“Charterparty Assignment” means, in relation to a Ship, an assignment of the
rights of the Borrower who is the owner of that Ship under any Assignable Charter relative thereto and any guarantee of such Assignable Charter executed or to be executed by that Borrower in favour of the Security Trustee in the Agreed Form and, in
the plural, means all of them.
5
“Commitment” means, in relation to a Lender, the amount set opposite its name in
Schedule 1 (Lenders and Commitments), or, as the case may require, the amount specified in the relevant Transfer Certificate, as that amount may be reduced, cancelled or
terminated in accordance with this Agreement (and “Total Commitments” means the aggregate of the Commitments of all the Lenders).
“Compliance Certificate” means a certificate in the form set out in Schedule 7 (Form of Compliance Certificate ) (or in any other form which the Agent approves or requires) to be provided at the times and in the manner set out in Clause 11.21 (Compliance Certificate).
“Corporate Guarantee” means a guarantee of the obligations of the Borrowers under
this Agreement and the other Finance Documents to which each Borrower is a party, in the Agreed Form.
“Corporate Guarantor” means Castor Maritime Inc., a corporation incorporated in
the Republic of the Xxxxxxxx Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Xxxxxxxx Xxxxxxx XX00000.
“Correction Rate” means, at any relevant time in relation to an Applicable Lender,
the amount (expressed as a rate per annum) by which that Lender’s Cost of Funding exceeds LIBOR.
“Cost of Funding” means, in relation to a Lender, the rate per annum determined by
that Lender to be the rate at which deposits in Dollars are offered to that Lender by leading banks in the Relevant Interbank Market at that Lender’s request at or about the Specified Time on the Quotation Date for an Interest Period and for a
period equal to that Interest Period and for delivery on the first Business Day of it, or, if that Lender uses other ways to fund deposits in Dollars, such rate as determined by that Lender to be the Lender’s cost of funding deposits in Dollars for
that Interest Period, such determination being conclusive and binding in the absence of manifest error.
“Creditor Party” means the Agent, the
Security Trustee, the Mandated Lead Arranger, any Lender, whether as at the date of this Agreement or at any later time and, in the plural, means all of them.
“Debt Service” means, in relation to a Ship, any sums to be incurred by the Borrower owning that Ship in
respect of the payment of principal of, and any interest to be accrued on, the Advance to which that Ship relates and any accrued costs and expenses attributable to that Advance pursuant to this Agreement.
6
| (b) |
| (i) |
from performing its payment obligations under the Finance Documents; or
|
| (ii) |
and which (in either such case) is not caused by, and is beyond the control of, the Party or, if applicable, any Security
Party whose operations are disrupted.
“Drawdown Date” means, in respect of each Advance, the date requested by the
Borrowers for that Advance to be borrowed, or (as the context requires) the date on which that Advance is actually borrowed.
“Drawdown Notice” means a notice in the form set out in Schedule
2 (Drawdown Notice) (or in any other form which the Agent approves or reasonably requires).
“Dry Dock Reserve Account” means an account in the joint names of the Borrowers
with the Account Bank designated “Cinderella Shipping Co. et al – Dry Dock Account”, or any other account (with that or another office of the Account Bank) which replaces this account and is designated by the Agent as the Dry Dock Reserve Account
for the purposes of this Agreement.
“Dry Docking Reserve Amount” has the meaning given to it in Clause
11.20 (Dry Docking Reserve Amount).
“Earnings” means, in relation to a Ship, all moneys whatsoever which are now, or later become, payable
(actually or contingently) to the Borrower owning that Ship or the Security Trustee and which arise out of the use or operation of that Ship, including (but not limited to):
| (a) |
except to the extent that they fall within paragraph (b);
|
| (i) |
all freight, hire and passage moneys;
|
| (ii) |
compensation payable to that Borrower or the Security Trustee in the event of requisition of a Ship for hire;
|
| (iii) |
remuneration for salvage and towage services;
|
| (iv) |
demurrage and detention moneys;
|
| (v) |
damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of that Ship; and
|
7
| (vi) |
all moneys which are at any time payable under any Insurances in respect of loss of hire; and
|
“Earnings Account” means, in relation to a Ship, an account in the name of the
Borrower owning that Ship with the Account Bank designated “name of relevant Borrower - Earnings Account”, or any other account (with that or another office of the Account Bank)
which replaces such account and is designated by the Agent as that Earnings Account for the purposes of this Agreement.
“EEA Member Country” means any member state of the European Union, Iceland, Liechtenstein and Norway.
“Environmental Claim” means:
| (a) |
any claim by any governmental, judicial or regulatory authority which arises out of an Environmental Incident or an alleged Environmental Incident or which relates to any
Environmental Law; or
|
| (b) |
any claim by any other person which relates to an Environmental Incident or to an alleged Environmental Incident,
|
and “claim” means a claim for damages, compensation, fines, penalties or any
other payment of any kind whether or not similar to the foregoing; an order or direction to take, or not to take, certain action or to desist from or suspend certain action; and any form of enforcement or regulatory action, including the arrest or
attachment of any asset.
| (a) |
any release of Environmentally Sensitive Material from that Ship; or
|
“Environmental Law” means any law, regulation, convention and agreement relating
to pollution or protection of the environment, to the carriage of Environmentally Sensitive Material or to actual or threatened releases of Environmentally Sensitive Material.
8
“Environmentally Sensitive Material” means oil, oil products and any other substance (including any chemical,
gas or other hazardous or noxious substance) which is (or is capable of being or becoming) polluting, toxic or hazardous.
“EU Bail-In Legislation Schedule” means the document described as such and published by the LMA from time to time.
“Event of Default” means any of the events or circumstances described in Clause 19.1 (Events of Default).
| (a) |
“FATCA Deduction” means a deduction or withholding from a payment under a Finance
Document required by FATCA.
“FATCA Exempt Party” means a Party that is entitled to receive payments free from
any FATCA Deduction.
“Final Repayment Date” means, in relation to an
Advance, the date falling on the earlier of (i) the date falling on the fifth anniversary of the Drawdown Date in respect of that Advance and (ii) 30 August 2026.
| (a) |
this Agreement;
|
| (b) |
the Agency and Trust Agreement;
|
| (c) |
the Account Pledges;
|
| (d) |
the Corporate Guarantee;
|
| (e) |
any Subordination Agreement;
|
| (f) |
any Subordinated Debt Security;
|
| (g) |
the Mortgages;
|
| (h) |
the General Assignments;
|
| (i) |
any Charterparty Assignments;
|
| (j) |
the Approved Manager’s Undertakings;
|
9
| (k) |
the Side Letter; and
|
“Financial Indebtedness” means, in relation to a person (the “debtor”), any actual or contingent liability of the debtor:
| (a) |
for principal, interest or any other sum payable in respect of any moneys borrowed or raised by the debtor;
|
| (b) |
under any loan stock, bond, note or other security issued by the debtor;
|
| (c) |
under any acceptance credit, guarantee or letter of credit facility made available to the debtor;
|
| (f) |
under receivables sold or discounted (other than any receivables to the extent that they are sold on a non-recourse basis); or
|
“Financial Year” means, in relation to each of the Borrowers and the Corporate
Guarantor, each period of one year commencing on 1 January in respect of which its individual or, as the case may be, consolidated accounts are or ought to be prepared.
“General Assignment” means, in relation to a Ship, a general assignment of (inter alia) the Earnings, the Insurances and any Requisition Compensation relative to that Ship in the Agreed Form and, in the plural, means all of them.
“Group” means the Corporate Guarantor and its direct and indirect subsidiaries
from time to time, including, without limitation, the Borrowers and “member of the Group” shall be construed accordingly.
10
“Initial Market Value” means, in relation to each Ship, the Market Value thereof
calculated in accordance with the valuation relative thereto referred to in paragraph 4 of Schedule 3 (Condition Precedent Documents), Part B.
“Interest Period” means each period determined in accordance with Clause 6 (Interest Periods) or selected in accordance with Clause 7 (Default Interest).
“Interpolated Screen Rate”
means, in relation to an Interest Period, the rate which results from interpolating on a linear basis between:
| (a) |
the applicable Screen Rate for the longest period (for which that Screen Rate is available) which is less than that Interest Period; and
|
| (b) |
the applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds that Interest Period,
|
“ISM Code” means the International Safety Management Code (including the
guidelines on its implementation), adopted by the International Maritime Organisation as the same may be amended or supplemented from time to time (and the terms “safety management system”, “Safety Management Certificate” and “Document of Compliance” have the same meanings as are given to them in the ISM Code).
“ISPS Code” means the International Ship and Port Facility Security Code as
adopted by the International Maritime Organisation, as the same may be amended or supplemented from time to time.
“ISSC” means a valid and current International Ship Security Certificate issued
under the ISPS Code.
“Lender” means, subject to Clause 26.6 (Lender
re-organisation), a bank or financial institution listed in Schedule 1 (Lenders and Commitments) and acting through its branch indicated in Schedule 1 (Lenders and Commitments) (or through another branch notified to the Agent under Clause 26.15 (Change of lending office)) or its transferee,
successor or assign.
11
“LIBOR” means, for an Interest Period:
| (b) |
(if no Screen Rate is available for that Interest Period), the applicable Interpolated Screen Rate for that Interest Period; or
|
at or about the Specified Time on the Quotation Date for that Interest Period for a period equal to that Interest Period and for delivery on the
first Business Day of it and, if any such rate is below zero, LIBOR will be deemed to be zero.
“Liquidity Account” means, an account in the joint name of the Borrowers with the
Account Bank designated “Cinderella Shipping Co. et al – Liquidity Account”, or any other account (with that or another office of the Account Bank) which replaces such account and
is designated by the Agent as that Liquidity Account for the purposes of this Agreement.
“Loan” means the principal amount for the time being outstanding under this Agreement.
“LSW 1189” means the London Standard Wording for marine insurances which
incorporates the German Direct Mortgage Clause.
“Major Casualty” means, in relation to a Ship, any casualty to that Ship in
respect of which the claim or the aggregate of the claims against all insurers, before adjustment for any relevant franchise or deductible, exceeds $500,000 or the equivalent in any other currency;
| (a) |
before an Advance is made, Lenders whose Commitments total 66 2/3 per cent. of the Total Commitments;
and
|
| (b) |
after an Advance is made, Lenders whose Contributions total 66 2/3 per cent. of the Loan.
|
“Mandated Lead Arranger” means Hamburg Commercial Bank AG, acting in such capacity through its office at Xxxxxxx-Xxxxxxxxx-Xxxxx 00, X-00000 Xxxxxxx, Xxxxxxx, or any successor.
“Mandatory Cost” means the percentage rate per annum calculated by the Agent in
accordance with Schedule 4 (Mandatory Cost Formula).
12
“Market Value” means, in relation to each Ship, the market value thereof
determined in accordance with Clause 15.3 (Valuation of Ships).
“Material Adverse Change” means any event or series of events which, in the
opinion of the Majority Lenders, is likely to have a Material Adverse Effect.
| (a) |
the business, property, assets, liabilities, operations or condition (financial or otherwise) of a Borrower and/or any Security Party taken as a whole;
|
| (b) |
the ability of a Borrower and/or any Security Party to (i) comply with or perform any of its obligations or (ii) discharge any of its liabilities, under any Finance Document as they
fall due; or
|
| (c) |
the validity, legality or enforceability of any Finance Document.
|
| (a) |
| (b) |
in respect of each of Advance B, Advance C and Advance D, an amount up to the lesser of (i) $10,000,000 and (ii) 50 per cent. of the Initial Market Value of the Ship
to which that Advance relates.
|
“Minimum Liquidity” has the meaning given in Clause 11.19 (Minimum Liquidity and Additional Minimum Liquidity).
“Mortgage”
means, in relation to each Ship, the first preferred or, as the case may be, priority ship mortgage on that Ship in the Agreed Form and, in the plural, means all of them.
“Mortgaged Ship” means a Ship which is subject to a Mortgage at the relevant time
and, in the plural, means all of them.
“Negotiation Period” has the meaning given in Clause 5.10
(Negotiation of alternative rate of interest).
“Notifying Lender” has the meaning given in Clause 21.2
(Break Costs), Clause 23.1 (Illegality) or Clause 24.1 ( Increased costs
) as the context requires.
“Participating Member State” means any member state of the European Union that has
the Euro as its lawful currency in accordance with legislation of the European Union relating to Economic and Monetary Union.
“Permitted Holder” the person disclosed in the Side Letter as being the person having control (as such term is
defined in paragraph (c) of the definition of “Change of Control”) of the Corporate Guarantor as at the date of this Agreement;
13
| (a) |
Security Interests created by the Finance Documents;
|
| (b) |
liens for unpaid master’s and crew’s wages in accordance with usual maritime practice;
|
| (c) |
liens for salvage;
|
| (d) |
liens arising by operation of law for not more than one month’s prepaid hire under any charter in relation to a Ship not prohibited by this Agreement;
|
| (a) |
any Finance Document;
|
| (b) |
| (c) |
any other document contemplated by or referred to in any Finance Document; and
|
| (a) |
England and Wales;
|
| (b) |
the country under the laws of which the company is incorporated or formed;
|
| (c) |
a country in which the company has the centre of its main interests or which the company’s central management and control is or has recently been exercised;
|
| (d) |
a country in which the overall net income of the company is subject to corporation tax, income tax or any similar tax;
|
14
| (a) |
any transaction or matter contemplated by, arising out of, or in connection with a Pertinent Document; or
|
| (b) |
any statement relating to a Pertinent Document or to a transaction or matter falling within paragraph (a),
|
and covers any such transaction, matter or statement, whether entered into, arising or made at any time before the signing of this Agreement or on
or at any time after that signing.
“Potential Event of Default” means an event or circumstance which, with the giving
of any notice, the lapse of time, a determination of the Majority Lenders and/or the satisfaction of any other condition, would constitute an Event of Default.
“Prepayment Date” has the meaning given in Clause 15.2 (Prepayment; provision of additional security).
“Quotation Date” means, in relation to any Interest Period (or any other period
for which an interest rate is to be determined under any provision of a Finance Document), the day on which quotations would ordinarily be given by leading banks in the Relevant Interbank Market for deposits in the currency in relation to which
such rate is to be determined for delivery on the first day of that Interest Period or other period.
“Reference Banks” means, subject to Clause 26.18 (Replacement of a
Reference Bank), together, the Hamburg branch of Hamburg Commercial Bank AG, the head office of any other bank which is a Lender at the relevant time (unless such Lender has advised the Agent in writing that it
does not wish to be a Reference Bank) and any of their respective successors.
“Relevant Nominating Body” means any applicable central bank, regulator or other supervisory authority or a group of them, or any working group or committee sponsored or chaired by, or constituted at the request of, any of them or
the Financial Stability Board.
“Relevant Person” has the meaning given in Clause 19.9 (Relevant Persons).
“Repayment Date” means a date on which a repayment is required to be made under
Clause 8 (Repayment and Prepayment).
15
| (a) |
formally designated, nominated or recommended as the replacement for a Screen Rate by:
|
| (i) |
the administrator of that Screen Rate (provided that the market or economic reality that such benchmark rate measures is the same as that measured by that Screen Rate); or
|
| (ii) |
any Relevant Nominating Body,
|
and if replacements have, at the relevant time, been formally designated, nominated or recommended under both paragraphs, the
“Replacement Benchmark” will be the replacement under paragraph (ii) above;
| (b) |
in the opinion of the Lenders, generally accepted in the international or any relevant domestic syndicated loan markets as the appropriate successor to a Screen Rate; or
|
| (c) |
in the opinion of the Lenders, an appropriate successor to a Screen Rate.
|
“Requisition Compensation” includes all compensation or other moneys payable by reason of any act or event such
as is referred to in paragraph (b) of the definition of “Total Loss”.
“Resolution Authority”
means any body which has authority to exercise any Write-down and Conversion Powers.
“Retention Account” means an account in the joint names of the Borrowers with the Account Bank designated”
Liono Shipping Co., Snoopy Shipping Co., Cinderella Shipping Co. and Luffy Shipping Co. – Retention Account”, or any other account (with that or another office of the Account Bank) which replaces this account and is
designated by the Agent as the Retention Account for the purposes of this Agreement.
“Screen Rate” means the London interbank
offered rate administered by the ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate) for Dollars for the relevant period displayed on pages LIBOR01 or LIBOR02 of the Reuters screen (or any
replacement Reuters page which displays that rate) or on the appropriate page of such other information service which publishes that rate from time to time in place of Reuters. If such page or service ceases to be available, the Agent may specify
another page or service displaying the relevant rate after consultation with the Borrowers.
| (a) |
the methodology, formula or other means of determining that Screen Rate has, in the opinion of the Lenders, materially changed;
|
| (i) |
| (A) |
the administrator of that Screen Rate or its supervisor publicly announces that such administrator is insolvent; or
|
16
provided that, in each case, at that time, there is no successor administrator to continue to provide that Screen Rate;
| (iii) |
the supervisor of the administrator of that Screen Rate publicly announces that such Screen Rate has been or will be permanently or indefinitely discontinued; or
|
| (iv) |
the administrator of that Screen Rate or its supervisor announces that that Screen Rate may no longer be used; or
|
| (i) |
the circumstance(s) or event(s) leading to such determination are not (in the opinion of the Lenders) temporary; or
|
| (ii) |
that Screen Rate is calculated in accordance with any such policy or arrangement for a period no less than 15 Business Days; or
|
| (d) |
in the opinion of the Lenders, that Screen Rate is otherwise no longer appropriate for the purposes of calculating interest under this Agreement.
|
“Secured Liabilities” means all liabilities which the Borrowers, the Security Parties or any of them have, at
the date of this Agreement or at any later time or times, under or in connection with any Finance Document or any judgment relating to any Finance Document; and for this purpose, there shall be disregarded any total or partial discharge of these
liabilities, or variation of their terms, which is effected by, or in connection with, any bankruptcy, liquidation, arrangement or other procedure under the insolvency laws of any country.
“Security Cover Ratio” means, at any relevant time, the aggregate of (i) the
aggregate of the Market Value of the Mortgaged Ships, (ii) the Dry Docking Reserve Amount standing to the credit of the Dry Dock Reserve Account and (iii) the net realisable value of any additional security provided at that time under Clause 15 (Security Cover), at that time expressed as a percentage of the Loan.
| (a) |
a mortgage, charge (whether fixed or floating) or pledge, any maritime or other lien or any other security interest of any kind;
|
| (b) |
the rights of a plaintiff under an action in rem; and
|
17
| (a) |
the Corporate Guarantor;
|
| (b) |
Castor Ships;
|
| (c) |
Pavimar S.A.; and
|
| (d) |
any other person (except a Creditor Party and any other manager which is not a member of the Group) who, as a surety or mortgagor, as a party to
any subordination or priorities arrangement, or in any similar capacity, executes a document falling within the final paragraph of the definition of “Finance Documents”.
|
“Security Period” means the period commencing on the date of this Agreement and
ending on the date on which the Agent notifies the Borrowers, the Security Parties and the other Creditor Parties that:
| (a) |
all amounts which have become due for payment by a Borrower or any Security Party under the Finance Documents have been paid;
|
| (b) |
no amount is owing or has accrued (without yet having become due for payment) under any Finance Document;
|
| (c) |
“Security Trustee” means Hamburg Commercial Bank AG,
acting in such capacity through its office at Xxxxxxx-Xxxxxxxxx-Xxxxx 00, X-00000, Xxxxxxx, Xxxxxxx, or any successor of it appointed under clause 5 of the Agency and Trust Agreement.
“Side Letter” means a letter dated on or about the date of this Agreement specifying the person having control
(as such term is defined in paragraph (c) of the definition of “Change of Control”) of the Corporate Guarantor as at the date of this Agreement to be executed by the Agent, the Borrowers and the Corporate Guarantor in the Agreed Form;
“Ship A” means the Kamsarmax bulk carrier vessel of 83,375 dwt currently registered in the ownership of
Borrower A with IMO number 9442407 under the Xxxxxxxx Islands flag in accordance with the laws of the relevant Approved Flag State with the name “MAGIC THUNDER”.
18
“Ship B” means the Kamsarmax bulk carrier vessel of 80,281 dwt currently
registered in the ownership of Borrower B with IMO number 9471264 under the Xxxxxxxx Islands flag in accordance with the laws of the relevant Approved Flag State with the name “MAGIC NEBULA”.
“Ship C” means
the Panamax bulk carrier vessel of 74,940 dwt currently registered in the ownership of Borrower C with IMO number 9597331 under the Xxxxxxxx Islands flag in accordance with the laws of the relevant Approved Flag State with the name “MAGIC ECLIPSE”.
“Ship D” means the Kamsarmax bulk carrier vessel of 80,283 dwt currently registered in the ownership of
Borrower D with IMO number 9545285 under the Xxxxxxxx Islands flag in accordance with the laws of the relevant Approved Flag State with the name “MAGIC TWILIGHT”.
“Specified Time” means 11.00 a.m. London time.
“Subordinated Creditor” means a Borrower, a Security Party or any other person who
becomes a Subordinated Creditor in accordance with this Agreement.
“Subordinated Debt” in relation to a Subordinated Creditor, has the meaning given
to it in the Subordination Agreement entered into by that Subordinated Creditor.
“Subordinated Debt
Security” means a document creating a Security Interest in relation to any Subordinated Debt in the Agreed Form.
“Subordination Agreement” means a subordination agreement entered into or to be
entered into by a Subordinated Creditor, a Borrower, a Security Party and the Security Trustee in the Agreed Form.
| (a) |
actual, constructive, compromised, agreed or arranged total loss of that Ship;
|
| (c) |
any condemnation of that Ship by any tribunal or by any person or person claiming to be a tribunal; and
|
| (a) |
in the case of an actual loss of that Ship, the date on which it occurred or, if that is unknown, the date when that Ship was last heard of;
|
19
| (b) |
in the case of a constructive, compromised, agreed or arranged total loss of that Ship, the earlier of:
|
| (i) |
the date on which a notice of abandonment is given to the insurers; and
|
| (c) |
in the case of any other type of total loss, on the date (or the most likely date) on which it appears to the Agent that the event constituting the total loss occurred.
|
“UK Bail-In Legislation” means Part 1 of the United Kingdom Banking Act 2009 and any other law or regulation applicable in the United Kingdom relating to the resolution of unsound or
failing banks, investment firms or other financial institutes or their affiliates (otherwise than through liquidation, administration or other insolvency proceedings).
“Underlying Document” means any Assignable Charter.
“US GAAP” means generally accepted accounting principles in the Unites States.
| (a) |
a Borrower which is resident for tax purposes in the US; or
|
| (b) |
a Borrower or a Security Party some or all whose payments under the Finance Documents are from sources within the US for US federal income tax purposes.
|
| (b) |
in relation to any other applicable Bail-In Legislation other than the UK Bail-In Legislation:
|
20
| (ii) |
| 1.2 |
Construction of certain terms
|
In this Agreement:
“administration notice” means a notice appointing an administrator, a notice of
intended appointment and any other notice which is required by law (generally or in the case concerned) to be filed with the court or given to a person prior to, or in connection with, the appointment of an administrator;
“approved” means, for the purposes of Clause 13 (Insurance), approved in writing by the Agent at its discretion;
“asset” includes every kind of property, asset, interest or right, including any present, future or contingent
right to any revenues or other payment;
“company” includes any partnership, joint venture and unincorporated association;
“consent” includes an authorisation, consent, approval, resolution, licence, exemption, filing, registration,
notarisation and legalisation;
“contingent liability” means a liability which is not certain to arise and/or the
amount of which remains unascertained;
“document” includes a deed; also a letter or fax;
“excess risks” means, in relation to a Ship, the proportion of claims for general
average, salvage and salvage charges not recoverable under the hull and machinery policies in respect of the Ship in consequence of its insured value being less than the value at which the Ship is assessed for the purpose of such claims;
“expense” means any kind of cost, charge or expense (including all legal costs,
charges and expenses) and any applicable value added or other tax;
“gross negligence” means a form of negligence which is distinct from ordinary
negligence, in which the due diligence and care which are generally to be exercised have been disregarded to a particularly high degree, in which the plainest deliberations have not been made and that which should be most obvious to everybody has
not been followed;
“law” includes any order or decree, any form of delegated legislation, any treaty or international convention
and any regulation or resolution of the Council of the European Union, the European Commission, the United Nations or its Security Council;
21
“legal or administrative action” means any legal proceeding or arbitration and any
administrative or regulatory action or investigation;
“liability” includes every kind of debt or liability (present or future, certain or contingent), whether
incurred as principal or surety or otherwise;
“obligatory insurances” means, in relation to a Ship, all insurances effected, or
which the Borrower owning that Ship is obliged to effect, under Clause 13 (Insurance ) or any other provision of this Agreement or another Finance Document;
“person” includes any individual, any partnership, any company; any state, political sub-division of a state
and local or municipal authority; and any international organisation;
“policy” in relation to any insurance, includes a slip, cover note, certificate of entry or other document
evidencing the contract of insurance or its terms;
“protection and indemnity risks” means the usual risks covered by a protection and indemnity association managed in London, including pollution risks and the proportion (if any) of any sums payable to any other person or persons in case
of collision which are not recoverable under the hull and machinery policies by reason of the incorporation in them of clause 1 of the Institute Time Clauses (Hulls) (1/10/82) or clause 8 of
the Institute Time Clauses (Hulls) (1/11/1995) or the Institute Amended Running Down Clause (1/10/71) or any equivalent provision;
“regulation” includes any regulation, rule, official directive, request or
guideline (whether or not having the force of law) of any governmental, intergovernmental or supranational body, agency (monetary or otherwise), department, central bank, regulatory, self-regulatory or other authority or organisation;
“successor” includes any person who is entitled (by assignment, novation, merger or otherwise) to any person’s
rights under this Agreement or any other Finance Document (or any interest in those rights) or who, as administrator, liquidator or otherwise, is entitled to exercise those rights; and in particular references to a successor include a person to
whom those rights (or any interest in those rights) are transferred or pass as a result of a merger, division, reconstruction or other reorganisation of it or any other person;
“tax” includes any present or future tax, duty, impost, levy or charge of any kind which is imposed by any
state, any political sub-division of a state or any local or municipal authority (including any such imposed in connection with exchange controls), and any connected penalty, interest or fine; and
“war risks” includes the risk of mines and all risks excluded by clause 29 of the
International Hull Clauses (1/11/02 or 1/11/03), clause 24 of the Institute Time Clauses (Hulls)(1/11/95) or clause 23 of the Institute Time Clauses (Hulls) (1/10/83).
22
| 1.3 |
Meaning of “month”
|
A period of one or more “months” ends on the day in the relevant calendar month numerically corresponding to
the day of the calendar month on which the period started (“the numerically corresponding day”), but:
and “month” and “monthly” shall be construed accordingly.
| 1.4 |
Meaning of “subsidiary”
|
A company (S) is a subsidiary of another company (P) if:
| (b) |
P has direct or indirect control over a majority of the voting rights attaching to the issued shares of S; or
|
| (c) |
P has the direct or indirect power to appoint or remove a majority of the directors of S; or
|
| (d) |
P otherwise has the direct or indirect power to ensure that the affairs of S are conducted in accordance with the wishes of P,
|
and any company of which S is a subsidiary is a parent company of S.
| 1.5 |
General Interpretation
|
In this Agreement:
| (a) |
references to, or to a provision of, a Finance Document or any other document are references to it as amended or supplemented, whether before the date of this Agreement or otherwise;
|
| (b) |
references to, or to a provision of, any law include any amendment, extension, re-enactment or replacement, whether made before the date of this Agreement or otherwise;
|
| (c) |
words denoting the singular number shall include the plural and vice versa; and
|
| (d) |
| 1.6 |
Headings
|
In interpreting a Finance Document or any provision of a Finance Document, all clause, sub-clause and other headings in that and any other Finance
Document shall be entirely disregarded.
23
| 2 |
FACILITY
|
| 2.1 |
Amount of facility
|
Subject to the other provisions of this Agreement, the Lenders shall make available to the Borrowers a senior secured term loan facility of up to
$40,750,000, in four Advances, Advance A, Advance B, Advance C and Advance D for the purpose stated in the preamble to this Agreement.
| 2.2 |
Lenders’ participations in Advances
|
Subject to the other provisions of this Agreement, each Lender shall participate in each Advance in the proportion which, as at the relevant
Drawdown Date, its Commitment bears to the Total Commitments.
| 2.3 |
Purpose of Advances
|
The Borrowers undertake with each Creditor Party to use each Advance only for the purpose stated in the preamble to this Agreement.
| 3 |
POSITION OF THE LENDERS
|
| 3.1 |
Interests several
|
The rights of the Lenders under this Agreement are several.
| 3.2 |
Individual right of action
|
Each Lender shall be entitled to xxx for any amount which has become due and payable by the Borrowers to it under this Agreement without joining the
Agent, the Security Trustee or any other Lender as additional parties in the proceedings.
| 3.3 |
Proceedings requiring Majority Lender consent
|
Except as provided in Clause 3.2 (Individual right of action), no Lender may commence proceedings against
the Borrowers or any Security Party in connection with a Finance Document without the prior consent of the Majority Lenders.
| 3.4 |
Obligations several
|
The obligations of the Lenders under this Agreement are several; and a failure of a Lender to perform its obligations under this Agreement shall not
result in:
| (a) |
the obligations of the other Lenders being increased; nor
|
| (b) |
a Borrower, any Security Party, any other Lender being discharged (in whole or in part) from its obligations under any Finance Document;
|
and in no circumstances shall a Lender have any responsibility for a failure of another Lender to perform its obligations under this Agreement.
24
| 4 |
DRAWDOWN
|
| 4.1 |
Request for an Advance
|
Subject to the following conditions, the Borrowers may request an Advance to be borrowed by ensuring that the Agent receives a completed Drawdown
Notice not later than 11.00 a.m. (Hamburg time) three Business Days prior to the relevant Drawdown Date.
| 4.2 |
Availability
|
The conditions referred to in Clause 4.1 (Request for an Advance) are that:
| (a) |
| (b) |
each Advance shall not exceed the relevant Maximum Advance Amount;
|
| (c) |
all Advances shall be drawn down on the same Drawdown Date;
|
| (d) |
any undrawn portion of the Total Commitments in respect of an Advance to occur, upon the determination of the Initial Market Value of the Ship to which that Advance relates, shall be
automatically cancelled as at the Drawdown Date of that Advance; and
|
| (e) |
the aggregate amount of the Advances shall not exceed the Total Commitments.
|
| 4.3 |
Notification to Lenders of receipt of a Drawdown Notice
|
The Agent shall promptly notify the Lenders that it has received a Drawdown Notice and shall inform each Lender of:
| (a) |
the amount of the Advance to which that Drawdown Notice relates and the relevant Drawdown Date;
|
| (b) |
the amount of that Lender’s participation in that Advance; and
|
| (c) |
the duration of the first Interest Period in respect of that Advance.
|
| 4.4 |
Drawdown Notice irrevocable
|
A Drawdown Notice must be signed by a duly authorised signatory of the Borrowers; and once served, a Drawdown Notice cannot be revoked without the
prior consent of the Agent, acting on the authority of the Lenders.
| 4.5 |
Lenders to make available Contributions
|
Subject to the provisions of this Agreement, each Lender shall, on and with value on each Drawdown Date, make available to the Agent for the account
of the Borrowers the amount due from that Lender on that Drawdown Date under Clause 2.2 (Lenders’ participations in Advances).
| 4.6 |
Disbursement of Advance
|
Subject to the provisions of this Agreement, the Agent shall on each Drawdown Date pay to the Borrowers the amounts which the Agent receives from
the Lenders under Clause 4.5 (Lenders to make available Contributions ) and that payment to the Borrowers shall be made:
25
| (a) |
to the account which the Borrowers specify in the Drawdown Notice; and
|
| (b) |
in like funds as the Agent received the payments from the Lenders.
|
The payment by the Agent under this Clause 4.6 ( Disbursement of Advance )
shall constitute the making of the Advance and the Borrowers shall at that time become indebted, as principal and direct obligors, to each Lender in an amount equal to that Lender’s participation in the Advance.
| 5 |
INTEREST
|
| 5.1 |
Payment of normal interest
|
Subject to the provisions of this Agreement, interest on each Advance in respect of each Interest Period relative to that Advance shall be paid by
the Borrowers on the last day of that Interest Period.
| 5.2 |
Normal rate of interest
|
Subject to the provisions of this Agreement, the rate of interest on each Advance in respect of an Interest Period relative to that Advance shall be
the aggregate of (i) the Margin, (ii) the Mandatory Cost (if any), (iii) LIBOR for that Interest Period and (iv) if a Lender (the “Applicable Lender”) notifies the Agent at least 5 Business Days before the
start of that Interest Period that its Cost of Funding exceeds LIBOR (including the amount of such excess) on the Quotation Date for that Interest Period, additionally in respect of that Applicable Lender’s Contribution in the relevant Advance, the
Correction Rate applicable to the Applicable Lender for that Interest Period.
| 5.3 |
Payment of accrued interest
|
In the case of an Interest Period of longer than three months (subject to the prior agreement of the Agent in accordance with Clause 6.2(b)) (Duration of normal Interest Periods) accrued interest shall be paid every three months during that Interest Period and on the last day of that Interest Period.
| 5.4 |
Notification of Interest Periods and rates of normal interest
|
The Agent shall notify the Borrowers and each Lender of:
| (a) |
each rate of interest; and
|
| (b) |
the duration of each Interest Period,
|
as soon as reasonably practicable after each is determined.
| 5.5 |
Obligation of Reference Banks to quote
|
A Reference Bank which is a Lender shall use all reasonable efforts to supply the quotation required of it for the purposes of fixing a rate of
interest under this Agreement unless that Reference Bank ceases to be a Lender pursuant to Clause 26.18 (Replacement of a Reference Bank).
26
| 5.6 |
Absence of quotations by Reference Banks
|
If any Reference Bank fails to supply a quotation, the Agent shall determine the relevant LIBOR on the basis of the quotations supplied by the other
Reference Bank(s) but if two or more of the Reference Banks fail (or, if at any time there is only one Reference Bank, that Reference Bank fails) to provide a quotation, the relevant rate of interest shall be set in accordance with the following
provisions of this Clause 5 (Interest).
| 5.7 |
Market disruption
|
The following provisions of this Clause 5 (Interest ) apply if:
| 5.8 |
Notification of market disruption
|
The Agent shall promptly notify the Borrowers and each of the Lenders stating the circumstances falling within Clause 5.7
(Market disruption) which have caused its notice to be given.
| 5.9 |
Suspension of drawdown
|
If the Agent’s notice under Clause 5.8 (Notification of market disruption) is served before an Advance is
made:
| (a) |
in a case falling within Clause 5.7(a) (Market disruption), the Lenders’ obligation to advance that Advance; and
|
| (b) |
in a case falling within Clause 5.7(b) (Market disruption), the Affected Lender’s obligation to participate in that Advance,
|
shall be suspended while the circumstances referred to in the Agent’s notice continue.
| 5.10 |
Negotiation of alternative rate of interest
|
27
| 5.11 |
Application of agreed alternative rate of interest
|
Subject to Clause 27.4 (Replacement of Screen Rate), any alternative interest
rate or an alternative basis which is agreed during the Negotiation Period shall take effect in accordance with the terms agreed.
| 5.12 |
Alternative rate of interest in absence of agreement
|
If an alternative interest rate or alternative basis is not agreed within the Negotiation Period, and the relevant circumstances are continuing at
the end of the Negotiation Period, then the procedure provided for in Clause 5.10(b) (Negotiation of alternative rate of interest) shall
be repeated at the end of the interest period set by the Agent pursuant to that Clause.
| 5.13 |
Notice of prepayment
|
If the Borrowers do not agree with an interest rate set by the Agent under Clause 5.12 (Alternative rate of
interest in absence of agreement), the Borrowers may give the Agent not less than five Business Days’ notice of their intention to prepay the Loan at the end of the interest period set by the Agent.
| 5.14 |
Prepayment; termination of Commitments
|
A notice under Clause 5.13 (Notice of prepayment) shall be irrevocable; the Agent shall promptly notify the
Lenders of the Borrowers’ notice of intended prepayment; and:
| (a) |
on the date on which the Agent serves that notice, the Total Commitments shall be cancelled; and
|
| 5.15 |
Application of prepayment
|
| 6 |
INTEREST PERIODS
|
| 6.1 |
Commencement of Interest Periods
|
The first Interest Period applicable to an Advance shall commence on the Drawdown Date in respect of that Advance and each subsequent Interest
Period shall commence on the expiry of the preceding Interest Period.
28
| 6.2 |
Duration of normal Interest Periods
|
Subject to Clauses 6.3 (Duration of Interest Periods for Instalments ) and 6.4 (Non-availability of matching deposits for Interest Period selected), each Interest Period in respect of each Advance shall be:
| (a) |
3 months; or
|
| 6.3 |
Duration of Interest Periods for Instalments
|
In respect of an amount due to be repaid under Clause 8 (Repayment and Prepayment)
on a particular Repayment Date, an Interest Period in respect of the Advance to which that Repayment Date relates shall end on that Repayment Date.
| 6.4 |
Non-availability of matching deposits for Interest Period selected
|
If, after the Borrowers have proposed and the Lenders have agreed an Interest Period longer than three months, any Lender notifies the Agent by
11.00 a.m. (Hamburg time) on the third Business Day before the commencement of the Interest Period that it is not satisfied that deposits in Dollars for a period equal to the Interest Period will be available to it in the Relevant Interbank Market
when the Interest Period commences, the Interest Period shall be of three months.
| 7 |
DEFAULT INTEREST
|
| 7.1 |
Payment of default interest on overdue amounts
|
The Borrowers shall pay interest in accordance with the following provisions of this Clause 7 (Default Interest) on any amount payable by the Borrowers under any Finance Document which the Agent, the Security Trustee or the other designated payee does not receive on or before the relevant date, that is:
| (a) |
the date on which the Finance Documents provide that such amount is due for payment; or
|
| (b) |
if a Finance Document provides that such amount is payable on demand, the date on which the demand is served; or
|
| (c) |
if such amount has become immediately due and payable under Clause 19.4 (Acceleration of Loan), the date on which it became immediately due
and payable.
|
| 7.2 |
Default rate of interest
|
Interest shall accrue on an overdue amount from (and including) the relevant date until the date of actual payment (as well after as before
judgment) at the rate per annum determined by the Agent to be 2.50 per cent. above:
| (a) |
29
| (b) |
| 7.3 |
Calculation of default rate of interest
|
| (a) |
the rate applicable to the overdue principal amount immediately prior to the relevant date (but only for any unexpired part of any then current Interest Period applicable to it);
|
| (i) |
LIBOR; or
|
| 7.4 |
Notification of interest periods and default rates
|
The Agent shall promptly notify the Lenders and the Borrowers of each interest rate determined by the Agent under Clause 7.3
(Calculation of default rate of interest) and of each Interest Period selected by the Agent for the purposes of paragraph 7.3(b) (Calculation of default rate of interest)
of that Clause; but this shall not be taken to imply that the Borrowers are liable to pay such interest only with effect from the date of the Agent’s notification.
| 7.5 |
Payment of accrued default interest
|
Subject to the other provisions of this Agreement, any interest due under this Clause shall be paid on the last day of the Interest Period by
reference to which it was determined; and the payment shall be made to the Agent for the account of the Creditor Party to which the overdue amount is due.
| 7.6 |
Compounding of default interest
|
Any such interest which is not paid at the end of the Interest Period by reference to which it was determined shall thereupon be compounded.
| 8 |
REPAYMENT AND PREPAYMENT
|
| 8.1 |
Amount of Instalments
|
The Borrowers shall repay:
| (a) |
Advance A, by:
|
| (i) |
20 equal consecutive quarterly instalments, each in the amount of $283,000 (each an “Instalment A” and, together, the “Instalments A”); and
|
30
| (ii) |
a balloon instalment in the amount of $5,090,000 (the “Balloon Instalment A”); and
|
| (b) |
Advance B, by:
|
| (i) |
20 equal consecutive quarterly instalments (each an “Instalment B” and, together, the “Instalments B”), each in the amount of $299,000; and
|
| (ii) |
a balloon instalment (the “Balloon Instalment B”) in the amount of $4,020,000,
|
| (c) |
Advance C, by:
|
| (i) |
20 equal consecutive quarterly instalments (each an “Instalment C” and, together, the “Instalments C”), each in the amount of $273,000; and
|
| (ii) |
a balloon instalment (the “Balloon Instalment C”) in the amount of $4,540,000,
|
| (d) |
Advance D, by:
|
| (i) |
20 equal consecutive quarterly instalments (each an “Instalment D” and, together, the “Instalments
D” and, together with the Instalments A, the Instalments B and the Instalments C, the “Instalments” and each an “Instalment”), each in the amount of
$299,000; and
|
| (ii) |
a balloon instalment (the “Balloon Instalment D” and, together with the Balloon Instalment A, the Balloon Instalment B and the
Balloon Instalment C the “Balloon Instalments” and each a “Balloon Instalment”) in the amount of $4,020,000,
|
Provided that, if the amount advanced in respect of an Advance is less than the Maximum Advance Amount
relating to that Advance, the aggregate amount of the Instalments and the Balloon Instalment in respect of that Advance shall be reduced by an amount equal to the undrawn amount on a pro rata basis.
| 8.2 |
Repayment Dates
|
The first Instalment in respect of each Advance shall be repaid on the date falling three months after the Drawdown Date in respect of that Advance,
each subsequent Instalment shall be repaid at three-monthly intervals thereafter and the last Instalment in respect of that Advance, shall be repaid together with the Balloon Instalment in respect of that Advance, latest on the relevant Final
Repayment Date.
| 8.3 |
Final Repayment Date
|
On the Final Repayment Date, in respect of the last Advance to be drawn down pursuant to this Agreement, the Borrowers shall additionally pay to the
Agent for the account of the Creditor Parties all other sums then accrued or owing under any Finance Document.
| 8.4 |
Voluntary prepayment
|
Subject to the following conditions, the Borrowers may prepay the whole or any part of the Loan on the last day of an Interest Period.
| 8.5 |
Conditions for voluntary prepayment
|
The conditions referred to in Clause 8.4 (Voluntary prepayment) are that:
31
| (a) |
a partial prepayment shall be in an amount equal to an Instalment or a higher integral multiple thereof;
|
| (d) |
the Borrowers are in compliance with Clause 8.10 (Amounts payable on prepayment) on or prior to the date of prepayment.
|
| 8.6 |
Optional facility cancellation
|
The Borrowers shall be entitled, upon giving to the Agent not less than five Business Days’ prior written notice, to cancel, in whole or in part
(and, if in part, by an amount not less than a multiple integral amount of an Instalment (or such other amount acceptable to the Agent in its sole discretion)), the undrawn balance of the Total Commitments (the “Cancellation
Notice”) which notice shall be irrevocable and shall, at the option of the Borrowers, specify whether such cancellation will be applied against a specific Advance, in which case the Borrowers will specify the Advance against which that
cancellation should be applied. A failure by the Borrowers to make such a designation, in circumstances where all Advances have been made, shall result in the cancellation being applied against all Advances proportionately. Upon such cancellation
taking effect on expiry of a Cancellation Notice the several obligations of the Lenders to make their respective Commitments available in relation to the portion of the Total Commitments to which such Cancellation Notice relates shall terminate.
| 8.7 |
Cancellation Notice or Prepayment Notice
|
The Agent shall notify the Lenders promptly upon receiving a Cancellation Notice or Prepayment Notice, and shall provide, in the case of a
Prepayment Notice, any Lender which so requests with a copy of any document delivered by the Borrowers under Clause 8.5(c) (Conditions for voluntary prepayment).
| 8.8 |
Mandatory prepayment
|
| (a) |
The Borrowers shall be obliged to prepay the Relevant Amount if a Ship:
|
| (i) |
32
“Relevant Amount” means an amount equal to the greater of:
| (i) |
the Advance to which the Ship being sold or which has become a Total Loss relates; and
|
| 8.9 |
Effect of Prepayment Notice and Cancellation Notice
|
Neither a Prepayment Notice nor a Cancellation Notice may be withdrawn or amended without the consent of the Agent, given with the authorisation of
the Majority Lenders, and:
| (b) |
in the case of a Cancellation Notice, the amount cancelled shall be permanently cancelled and may not be borrowed.
|
| 8.10 |
Amounts payable on prepayment
|
A prepayment shall be made together with accrued interest (and any other amount payable under Clause 21 (Indemnities) or otherwise) in respect of the amount prepaid and, if the prepayment is not made on the last day of an Interest Period together with any sums payable under Clause 21.2 (Break Costs) but without premium or penalty.
| 8.11 |
Application of partial prepayment or cancellation
|
Each partial prepayment shall be applied:
| 8.12 |
No reborrowing
|
No amount prepaid or cancelled may be (re)borrowed.
33
| 9 |
CONDITIONS PRECEDENT
|
| 9.1 |
Documents, fees and no default
|
Each Lender’s obligation to contribute to an Advance is subject to the following conditions precedent:
| (a) |
| (b) |
that, on the Drawdown Date but prior to the making of the Advance, the Agent receives;
|
| (i) |
| (ii) |
in the case of the first Drawdown Notice to be served under this Agreement, the structuring fee payable pursuant to Clause 20.1(a) (Structuring and
commitment fees);
|
| (iii) |
payment of any commitment fee payable pursuant to Clause 20.1(b) (Structuring and commitment fees); and
|
| (iv) |
payment of any expenses payable pursuant to Clause 20.2 (Costs of negotiation, preparation etc.) which are due and payable on the Drawdown
Date to which that Drawdown Notice relates;
|
| (c) |
that both at the date of each Drawdown Notice and at the relevant Drawdown Date:
|
| (i) |
no Event of Default or Potential Event of Default has occurred or would result from the borrowing of the relevant Advance;
|
| (iii) |
none of the circumstances contemplated by Clause 5.7 (Market disruption) has occurred and is continuing; and
|
| (iv) |
there has been no Material Adverse Change; and
|
34
| 9.2 |
Waiver of conditions precedent
|
If the Majority Lenders, at their discretion, permit an Advance to be borrowed before certain of the conditions referred to in Clause 9.1 (Documents, fees and no default ) are satisfied, the Borrowers shall ensure that those conditions are satisfied within five Business Days after the relevant Drawdown Date (or
such longer period as the Agent may, with the authorisation of the Majority Lenders, specify).
| 10 |
REPRESENTATIONS AND WARRANTIES
|
| 10.1 |
General
|
Each Borrower represents and warrants to each Creditor Party as follows.
| 10.2 |
Status
|
Each Borrower is duly incorporated, validly existing and in good standing under the laws of the Republic of the Xxxxxxxx Islands and no Borrower or
Security Party is a US Tax Obligor.
| 10.3 |
Share capital and ownership
|
Each Borrower is authorised to issue 500 registered shares of no par value, all of which shares have been issued, and the legal title and beneficial
ownership of all those shares is held, free of any Security Interest or other claim, by the Corporate Guarantor.
| 10.4 |
Corporate power
|
Each Borrower has the corporate capacity, and has taken all corporate action and obtained all consents necessary for it:
| (a) |
to execute the Underlying Documents to which it is a party and to maintain its Ship in its ownership under the applicable Approved Flag;
|
| (b) |
to execute the Finance Documents to which that Borrower is a party; and
|
| (c) |
to borrow under this Agreement and to make all the payments contemplated by, and to comply with, those Finance Documents to which that Borrower is a party.
|
| 10.5 |
Consents in force
|
All the consents referred to in Clause 10.4 (Corporate power) remain in force
and nothing has occurred which makes any of them liable to revocation.
| 10.6 |
Legal validity; effective Security Interests
|
The Finance Documents to which each Borrower is a party, do now or, as the case may be, will, upon execution and delivery (and, where applicable,
registration as provided for in the Finance Documents):
| (a) |
constitute that Borrower’s legal, valid and binding obligations enforceable against that Borrower in accordance with their respective terms; and
|
35
subject to any relevant insolvency laws affecting creditors’ rights generally.
| 10.7 |
No third party Security Interests
|
Without limiting the generality of Clause 10.6 (Legal validity; effective Security
Interests), at the time of the execution and delivery of each Finance Document to which each Borrower is a party:
| (a) |
that Borrower will have the right to create all the Security Interests which that Finance Document purports to create; and
|
| 10.8 |
No conflicts
|
The execution by each Borrower and each other Security Party of each Finance Document and each Underlying Document to which it is a party, and the
borrowing by that Borrower (together with the other Borrower) of the Loan (or any part thereof), and its compliance with each Finance Document and each Underlying Document to which it is a party:
| (a) |
will not involve or lead to a contravention of:
|
| (i) |
any law or regulation; or
|
| (ii) |
the constitutional documents of that Borrower or other Security Party; or
|
| (iii) |
any contractual or other obligation or restriction which is binding on that Borrower or other Security Party or any of its assets, and
|
| (b) |
will not have a Material Adverse Effect; and
|
| (c) |
is for the corporate benefit of that Borrower or each other Security Party.
|
| 10.9 |
No withholding taxes
|
All payments which each Borrower is liable to make under the Finance Documents to which it is a party may be made without deduction or withholding
for or on account of any tax payable under any law of any Pertinent Jurisdiction.
| 10.10 |
No default
|
No Event of Default or Potential Event of Default has occurred.
36
| 10.11 |
Information
|
All information which has been provided in writing by or on behalf of the Borrowers or any Security Party to any Creditor Party in connection with
any Finance Document satisfied the requirements of Clause 11.5 (Information provided to be accurate); all audited and unaudited accounts and financial statements which have been so provided satisfied the
requirements of Clause 11.7 (Form of financial statements) and are true, correct and not misleading and present fairly and accurately the financial position of the Borrowers the
Corporate Guarantor or the Group (as the case may be); and there has been no change in the financial position or state of affairs of either Borrower, the Corporate Guarantor or the Group (or any member thereof) from that disclosed in the latest of
those accounts which is likely to have a Material Adverse Effect.
| 10.12 |
No litigation
|
No legal or administrative action involving either Borrower or any Security Party (including action relating to any alleged or actual breach of the
ISM Code or the ISPS Code) has been commenced or taken or, to either Borrower’s knowledge, is likely to be commenced or taken which would, in either case, be likely to have a Material Adverse Effect.
| 10.13 |
Each of the Underlying Documents constitutes valid, binding and enforceable obligations of the
parties thereto in accordance with its terms and:
| (a) |
| (b) |
| 10.14 |
Compliance with certain undertakings
|
At the date of this Agreement, the Borrowers are in compliance with Clauses 11.2 (Title
and negative pledge), 11.4 (No other liabilities or obligations to be incurred), 11.9 (Consents), 11.13 (Principal place of
business), 13 (Insurance), 14.3 (Repair and classification ) and 14.10 (Compliance with
laws etc).
| 10.15 |
No rebates etc.
|
There is no agreement or understanding to allow or pay any rebate, premium, commission, discount or other benefit or payment (howsoever described)
to a Borrower or a third party in connection with the purchase by that Borrower of its Ship, other than as disclosed to the Agent in writing on or prior to the date of this Agreement.
| 10.16 |
Taxes paid
|
Each Borrower has paid all taxes applicable to, or imposed on or in relation to that Borrower, its business or the Ship owned by it.
| 10.17 |
ISM Code and ISPS Code compliance
|
All requirements of the ISM Code and the ISPS Code as they relate to the Borrowers, the Corporate Guarantor, the Approved Managers and the Ships
have been complied with.
37
| 10.18 |
No Money laundering
|
| 10.19 |
No immunity
|
No Borrower nor any of its assets is entitled to immunity on grounds of sovereignty or otherwise from any legal action or proceeding (including,
without limitation, suit, attachment prior to judgement, execution or other enforcement).
| 10.20 |
Choice of law
|
The choice of the laws of England to govern this Agreement and those other Finance Documents which are expressed to be governed by the laws of
England, the laws of Germany to govern the Account Pledges and the laws of the applicable Approved Flag State to govern the Mortgages, constitutes a valid choice of law and the submission by the Borrowers or, as the case may be, the relevant
Security Parties thereunder to the jurisdiction of the Courts of England and, in the case of each Account Pledge, Germany or, in the case of the Mortgages, the applicable Approved Flag State is a valid submission and does not contravene the laws of
England or, in the case of each Account Pledge, Germany or, in the case of the Mortgages, the applicable Approved Flag State or the laws of any other Pertinent Jurisdiction, will be applied by the courts of any Pertinent Jurisdiction if this
Agreement or those other Finance Documents or any claim thereunder comes under their jurisdiction upon proof of the relevant provisions of the laws of England or, in the case of each Account Pledge, Germany or, in the case of the Mortgages, the
applicable Approved Flag State.
| 10.21 |
Pari passu ranking
|
The obligations of each Borrower and Security Party under the Finance Documents to which it is a party are direct, general and unconditional
obligations and rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors except for obligations mandatorily preferred by law applying to companies generally.
| 10.22 |
Repetition
|
The representations and warranties in this Clause 10 (General)
shall be deemed to be repeated by the Borrowers:
| (a) |
on the date of service of each Drawdown Notice;
|
| (b) |
on each Drawdown Date; and
|
38
| (c) |
as if made with reference to the facts and circumstances existing on each such day.
| 11 |
GENERAL UNDERTAKINGS
|
| 11.1 |
General
|
Each Borrower undertakes with each Creditor Party to comply with the following provisions of this Clause 11 (General Undertakings) at all times during the Security Period except as the Agent, acting with the authorisation of the Majority Lenders, may otherwise permit in writing.
| 11.2 |
Title and negative pledge
|
Each Borrower will:
| (b) |
not create or permit to arise any Security Interest (except for Permitted Security Interests) over any other asset, present or future.
|
| 11.3 |
No disposal of assets
|
Neither Borrower will transfer, lease or otherwise dispose of:
| (a) |
all or a substantial part of its assets, whether by one transaction or a number of transactions, whether related or not; or
|
| (b) |
any debt payable to it or any other right (present, future or contingent right) to receive a payment, including any right to damages or compensation,
|
but paragraph (a) does not apply to any charter of a Ship.
| 11.4 |
No other liabilities or obligations to be incurred
|
Neither Borrower will incur any liability or obligation (including, without limitation, any Financial Indebtedness or any obligations under a
guarantee) except:
| (a) |
liabilities and obligations under the Finance Documents and the Underlying Documents to which it is or, as the case may be, will be a party; and
|
39
| 11.5 |
Information provided to be accurate
|
All financial and other information, including but not limited to factual information, exhibits and reports, which is provided in writing by or on
behalf of a Borrower under or in connection with any Finance Document will be true, correct and not misleading and will not omit any material fact or consideration.
| 11.6 |
Provision of financial statements
|
Each Borrower will send or procure that there are sent to the Agent:
| 11.7 |
Form of financial statements
|
| (a) |
| (c) |
fully disclose or provide for all significant liabilities of each Borrower, the Corporate Guarantor and the Group and each of its subsidiaries.
|
| 11.8 |
Shareholder and creditor notices
|
Each Borrower will send the Agent promptly upon its request copies of all communications which are despatched to that Borrower’s shareholders or
creditors or any class of them.
40
| 11.9 |
Consents
|
Each Borrower will maintain in force and promptly obtain or renew, and will promptly send certified copies to the Agent of, all consents required:
| (a) |
for that Borrower to perform its obligations under any Finance Document or any Underlying Document to which it is a party;
|
| (b) |
for the validity or enforceability of any Finance Document or any Underlying Document to which it is a party;
|
| (c) |
for that Borrower to continue to own and operate the Ship owned by it,
|
and that Borrower will comply with the terms of all such consents.
| 11.10 |
Maintenance of Security Interests
|
Each Borrower will:
| (a) |
at its own cost, do all that it reasonably can to ensure that any Finance Document validly creates the obligations and the Security Interests which it purports to create; and
|
| 11.11 |
Notification of litigation
|
Each Borrower will provide the Agent with details of any legal or administrative action involving that Borrower, the Ship owned by it, the Earnings
or the Insurances in respect of that Ship, any Security Party or the Approved Managers, as soon as such action is instituted or it becomes apparent to that Borrower that it is likely to be instituted, unless it is clear that the legal or
administrative action cannot have a Material Adverse Effect, and each Borrower shall procure that all reasonable measures are taken to defend any such legal or administrative action.
| 11.12 |
No amendment to Underlying Documents
|
The Borrowers will not waive or fail to enforce, the Underlying Documents to which it is a party or any of its provisions and promptly notify the
Agent of any amendment or supplement to any Underlying Document.
| 11.13 |
Principal place of business
|
Each Borrower will maintain its place of business, and keep its corporate documents and records, at the address of Castor Ships as indicated in
Clause 28.2 (Addresses for communications); and no Borrower will establish, or do anything as a result of which it would be deemed to have, a place of business in any country other than Greece.
41
| 11.14 |
Confirmation of no default
|
Each Borrower will, within two Business Days after service by the Agent of a written request, serve on the Agent a notice which is signed by an
officer of that Borrower and which:
| (a) |
states that no Event of Default or Potential Event of Default has occurred; or
|
| (b) |
states that no Event of Default or Potential Event of Default has occurred, except for a specified event or matter, of which all material details are given.
|
The Agent may serve requests under this Clause 11.14 (Confirmation of no default)
from time to time but only if asked to do so by a Lender or Lenders having Contributions exceeding 10 per cent. of the Loan or (if no Advances have been made) Commitments exceeding 10 per cent. of the Total Commitments; and this Clause 11.14 (Confirmation of no default) does not affect the Borrowers’ obligations under Clause 11.15 (Notification of
default).
| 11.15 |
Notification of default
|
Each Borrower will notify the Agent as soon as that Borrower becomes aware of:
| (a) |
the occurrence of an Event of Default or a Potential Event of Default; or
|
| (b) |
any matter which indicates that an Event of Default or a Potential Event of Default may have occurred,
|
and will keep the Agent fully up-to-date with all developments.
| 11.16 |
Provision of further information
|
Each Borrower will, as soon as practicable after receiving the request, provide the Agent with any additional financial or other information
relating:
| (a) |
to that Borrower, the Ship owned by it, the Earnings or the Insurances; or
|
| (b) |
to any other matter relevant to, or to any provision of, a Finance Document,
|
which may be reasonably requested by the Agent, the Security Trustee or any Lender at any time.
| 11.17 |
Provision of copies and translation of documents
|
Each Borrower will supply the Agent with a sufficient number of copies of the documents referred to above to provide one copy for each Creditor
Party; and if the Agent so requires in respect of any of those documents, the Borrowers will provide a certified English translation prepared by a translator approved by the Agent.
| 11.18 |
“Know your customer” checks
|
If:
| (a) |
the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement;
|
42
| (b) |
any change in the composition of the shareholders of the Borrowers or any Security Party (other than Castor Ships) after the date of this Agreement; or
|
| (c) |
a proposed assignment or transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer,
|
obliges the Agent or any Lender (or, in the case of paragraph (c), any prospective new Lender) to comply with “know your customer” or similar
identification procedures in circumstances where the necessary information is not already available to it, the Borrowers shall promptly upon the request of the Agent or the Lender concerned supply, or procure the supply of, such documentation and
other evidence as is reasonably requested by the Agent (for itself or on behalf of any Lender) or the Lender concerned (for itself or, in the case of the event described in paragraph (c), on behalf of any prospective new Lender) in order for the
Agent, the Lender concerned or, in the case of the event described in paragraph (c), any prospective new Lender to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws
and regulations pursuant to the transactions contemplated in the Finance Documents.
| 11.19 |
Minimum Liquidity and Additional Minimum Liquidity
|
| (a) |
Subject to paragraph (c) below, the Borrowers shall maintain in the Liquidity Account:
|
| (i) |
credit balances in an aggregate amount of not less than $350,000 in respect of each Mortgaged Ship ($1,400,000 in aggregate) (“Minimum Liquidity”) commencing from the Drawdown Date and at all times thereafter throughout the remainder of the Security Period;
|
| (ii) |
in addition to the amount required to be maintained under paragraph (a) of this Clause 11.19 (Minimum Liquidity and Additional
Minimum Liquidity), an aggregate amount of not less than $250,000 in respect of each Mortgaged Ship ($1,000,000 in aggregate, the “Additional Minimum Liquidity”) commencing from the Drawdown
Date and at all times thereafter up to the Repayment Date of the fourth Instalment in relation to each Advance, at which time, the Additional Minimum Liquidity shall be released upon written request to or to the order of the Borrowers
(following the full repayment of the fourth Instalment in respect of each Advance) subject to the terms of paragraph (c) below.
|
| (b) |
The Liquidity Account shall be secured under the applicable Account Pledge and remain blocked.
|
| (A) |
no Event of Default has occurred at the relevant time; and
|
| (B) |
that part of the Additional Minimum Liquidity which is released from the Liquidity Account (the “Released Amount”) pursuant to
this Clause 11.19 (Minimum Liquidity and Additional Minimum Liquidity) is utilised by the relevant Borrower only for the purpose of paying the Debt Service; and
|
43
| (C) |
that Borrower provides the Agent with the most recent quarterly management accounts evidencing such Cash Shortfall.
|
| (d) |
In this Clause 11.19 (Minimum Liquidity and Additional Minimum Liquidity):
|
“Cash Shortfall” means, in relation to a Ship during a Relevant Period, the amount by which the aggregate
Operating Expenses and the Debt Service of that Ship exceed the aggregate Earnings of that Ship, in each case, during the Relevant Period, as determined by the Majority Lenders, in their sole and absolute discretion;
“Operating Expenses” means, in relation to a Ship, the aggregate expenditure incurred by the Borrower which
is the owner of that Ship in chartering, operating, crewing, insuring, maintaining, repairing and generally trading that Ship including management fees and commissions as evidenced by the most recent quarterly
management accounts as provided by the relevant Borrower to the Agent pursuant to paragraph (c) of this Clause 11.19 (Minimum Liquidity and Additional Minimum Liquidity);
“Relevant Period” means each 3-month period during the Security Period, the first of which shall commence on
the Drawdown Date and end 3 months thereafter with each subsequent period commencing at 3-monthly intervals thereafter.
| 11.20 |
Dry Docking Reserve Amount
|
| (a) |
Each Borrower undertakes with each Creditor Party that, from the date falling three months after the Drawdown Date and at quarterly intervals thereafter during the Security Period, in
respect of each Mortgaged Ship, an amount of $20,000 per Ship ($80,000 in aggregate) (collectively, the “Dry Docking Reserve
Amount”) is deposited to the Dry Dock Reserve Account.
|
| (b) |
The Dry Dock Reserve Account shall be secured under the Account Pledge and, subject to paragraph (d) below, remain blocked thereon.
|
| (c) |
| (B) |
no Event of Default or Potential Event of Default having occurred and being continuing at the relevant time or resulting from the release of the Dry Docking Reserve
Amount.
|
Upon completion of each of the dry docking and special survey referred to in paragraph (c) above, the
Borrowers shall promptly deliver to the Agent evidence satisfactory to it that such dry docking and special survey has been completed.
44
| 11.21 |
Compliance Certificate
|
| 11.22 |
No Money laundering
|
| (a) |
Each Borrower:
|
| (ii) |
| (b) |
Each Borrower:
|
| (ii) |
will promptly inform the Agent by written notice, if it is not or ceases to be the beneficiary and will provide in writing the name and address of the beneficiary.
|
| (c) |
45
| 12 |
CORPORATE UNDERTAKINGS
|
| 12.1 |
General
|
Each Borrower also undertakes with each Creditor Party to comply with the following provisions of this Clause 12 (Corporate Undertakings) at all times during the Security Period except as the Agent, acting with the authorisation of the Majority Lenders, may otherwise permit in writing.
| 12.2 |
Maintenance of status
|
Each Borrower will maintain its separate corporate existence and remain in good standing under the laws of the Republic of the Xxxxxxxx Islands.
| 12.3 |
Negative undertakings
|
Neither Borrower will:
| (a) |
change the nature of its business or carry on any business other than the ownership, chartering and operation of the Ship owned by it;
|
| (i) |
pay any dividend or make any other form of distribution if:
|
| (A) |
an Event of Default or a Potential Event of Default has occurred and is continuing at the relevant time; or
|
| (B) |
an Event of Default will result from the payment of a dividend or the making of any other form of distribution,
|
provided that if there is a Cash Shortfall and the Borrowers have utilised a Released Amount pursuant to paragraph (c) of Clause
11.19 (Minimum Liquidity and Additional Minimum Liquidity), the Borrowers shall only be permitted to declare or pay a dividend or make any other form of distribution if:
| (A) |
no Event of Default or a Potential Event of Default has occurred and is continuing at the relevant time; or
|
| (B) |
no Event of Default will result from the payment of a dividend or the making of any other form of distribution; and
|
| (c) |
effect any form of redemption, purchase or return of its issued shares;
|
| (d) |
repay any Subordinated Debt;
|
| (e) |
provide any form of credit or financial assistance (including any guarantee or indemnity) to:
|
46
| (i) |
a person who is directly or indirectly interested in that Borrower’s share or loan capital; or
|
| (ii) |
any company in or with which such a person is directly or indirectly interested or connected,
|
or enter into any transaction with or involving such a person or company on terms which are, in any respect, less favourable to that Borrower than
those which it could obtain in a bargain made at arms’ length;
| (f) |
enter into any material agreement other than:
|
| (i) |
the Finance Documents and the Underlying Documents; or
|
| (ii) |
any other agreement expressly allowed under any other term of this Agreement;
|
| (g) |
open or maintain any account with any bank or financial institution except accounts with the Agent, the Account Bank and the Security Trustee for the purposes of the Finance
Documents;
|
| (h) |
issue, allot or grant any person a right to any shares in its capital or repurchase or reduce its issued shares and/or number of shares it is authorised to issue;
|
| (i) |
change its Financial Year;
|
| (k) |
allow a Change of Control; or
|
| (l) |
enter into any form of amalgamation, merger or de-merger, acquisition, divesture, split-up or any form of reconstruction or reorganisation.
|
| 12.4 |
The Borrowers shall provide the Agent on or
before the date of this Agreement with a list of each member of the Group at the date of this Agreement and
shall promptly advise the Agent in writing of any amendments to such list.
| 13 |
INSURANCE
|
| 13.1 |
General
|
Each Borrower also undertakes with each Creditor Party to comply with the following provisions of this Clause 13 (Insurance) at all times during the Security Period except as the Agent, acting with the authorisation of the Majority Lenders, may otherwise permit in writing.
| 13.2 |
Maintenance of obligatory insurances
|
Each Borrower shall keep the Ship owned by it insured at the expense of that Borrower against:
| (a) |
fire and usual marine risks (including hull and machinery and excess risks);
|
47
| (b) |
war risks (including, without limitation, protection and indemnity war risks with a separate limit not less than hull value of the relevant Ship);
|
| 13.3 |
Terms of obligatory insurances
|
Each Borrower shall effect such insurances in such amounts in such currency and upon such terms and conditions
(including, without limitation, any LSW 1189 or any other, in the opinion of the Security Trustee, comparable mortgage clause) as shall from time to time be approved in writing by the Security Trustee in its sole
discretion, but in any event as follows:
| (a) |
in Dollars;
|
| (b) |
| (i) |
an amount which is equal to 120 per cent. of the aggregate of:
|
| (A) |
the Advance relating to the Ship owned by it: and
|
| (B) |
the aggregate principal amount secured by Permitted Security Interests over that Ship which have a prior ranking to the Security Interests created by the Finance Documents; and
|
| (ii) |
the Market Value of that Ship;
|
| (d) |
in relation to protection and indemnity risks in respect of the full value and tonnage of that Ship;
|
| (e) |
in relation to war risks insurance, extended to cover piracy and terrorism where excluded under the fire and usual marine risks insurance;
|
| (f) |
on approved terms and conditions;
|
| (g) |
such other risks of whatever nature and howsoever arising in respect of which insurance would be maintained by a prudent owner of a vessel similar to that Ship; and
|
| (h) |
through approved brokers and with approved insurance companies and/or underwriters which have a Standard & Poor’s rating of at least BBB- or a comparable rating by any other
rating agency acceptable to the Security Trustee (acting on the instructions of the Majority Lenders) or, in the case of war risks and protection and indemnity risks, in approved war risks and protection and indemnity risks associations
which are members of the International Group of Protection and Indemnity Clubs.
|
48
| 13.4 |
Further protections for the Creditor Parties
|
In addition to the terms set out in Clause 13.3 (Terms of obligatory insurances),
each Borrower shall and shall procure that:
| (d) |
the obligatory insurances shall name the Security Trustee as sole loss payee with such directions for payment as the Security Trustee may specify;
|
| (h) |
the obligatory insurances shall provide that the Security Trustee may make proof of loss if that Borrower fails to do so; and
|
49
| 13.5 |
Renewal of obligatory insurances
|
Each Borrower shall:
| (a) |
at least 14 days before the expiry of any obligatory insurance effected by it:
|
| (ii) |
seek the Security Trustee’s approval to the matters referred to in paragraph (i);
|
| (b) |
at least 7 days before the expiry of any obligatory insurance, renew that obligatory insurance in accordance with the Security Trustee’s approval pursuant to paragraph (a); and
|
| 13.6 |
Copies of policies; letters of undertaking
|
Each Borrower shall ensure that all approved brokers provide the Security Trustee with pro forma copies of all cover notes and policies relating to
the obligatory insurances which they are to effect or renew and of a letter or letters of undertaking in a form required by the Security Trustee and including undertakings by the approved brokers that:
| (a) |
| (b) |
they will hold such policies, and the benefit of such insurances, to the order of the Security Trustee in accordance with the said loss payable clause;
|
| (c) |
they will advise the Security Trustee immediately of any material change to the terms of the obligatory insurances;
|
50
| 13.7 |
Copies of certificates of entry; letters of undertaking
|
Each Borrower shall ensure that any protection and indemnity and/or war risks associations in which the Ship owned by that Borrower is entered
provides the Security Trustee with:
| (a) |
a certified copy of the certificate of entry for that Ship;
|
| (b) |
a letter or letters of undertaking in such form as may be required by the Security Trustee;
|
| 13.8 |
Deposit of original policies
|
Each Borrower shall ensure that all policies relating to obligatory insurances effected by it are deposited with the approved brokers through which
the insurances are effected or renewed.
| 13.9 |
Payment of premiums
|
Each Borrower shall punctually pay all premiums or other sums payable in respect of the obligatory insurances effected by it and produce all
relevant receipts when so required by the Security Trustee.
| 13.10 |
Guarantees
|
Each Borrower shall ensure that any guarantees required by a protection and indemnity or war risks association are promptly issued and remain in
full force and effect.
| 13.11 |
Compliance with terms of insurances
|
Each Borrower shall not do or omit to do (nor permit to be done or not to be done) any act or thing which would or might render any obligatory
insurance invalid, void, voidable or unenforceable or render any sum payable under an obligatory insurance repayable in whole or in part; and, in particular it shall:
| (b) |
not make any changes relating to the classification or classification society or manager or operator of the Ship owned by it approved by the underwriters of the obligatory insurances;
|
51
| 13.12 |
Alteration to terms of insurances
|
Each Borrower shall neither make nor agree to any alteration to the terms of any obligatory insurance or waive any right relating to any obligatory
insurance.
| 13.13 |
Settlement of claims
|
No Borrower shall settle, compromise or abandon any claim under any obligatory insurance for Total Loss or for a Major Casualty, and shall do all
things necessary and provide all documents, evidence and information to enable the Security Trustee to collect or recover any moneys which at any time become payable in respect of the obligatory insurances and shall do all things necessary to
ensure such collection or recovery is made.
| 13.14 |
Provision of copies of communications
|
Each Borrower shall provide the Security Trustee upon request, copies of all written communications between that Borrower and:
| (a) |
the approved brokers;
|
| (b) |
the approved protection and indemnity and/or war risks associations; and
|
| (c) |
the approved insurance companies and/or underwriters, which relate directly or indirectly to:
|
| (i) |
that Borrower’s obligations relating to the obligatory insurances including, without limitation, all requisite declarations and payments of additional premiums or calls;
|
| (iii) |
a claim under any Insurances.
|
| 13.15 |
Provision of information and further undertakings
|
In addition, each Borrower shall promptly provide the Security Trustee (or any persons which it may designate) with any information which the
Security Trustee (or any such designated person) requests for the purpose of:
| (a) |
obtaining or preparing any report from an independent marine insurance broker as to the adequacy of the obligatory insurances effected or proposed to be effected; and/or
|
52
| (b) |
and that Borrower shall:
and that Borrower shall, forthwith upon demand, indemnify the Security Trustee in respect of all fees and other expenses incurred by or for the
account of the Security Trustee in connection with any such report as is referred to in paragraph (a).
| 13.16 |
Mortgagee’s interest and additional perils insurances
|
The Security Trustee shall be entitled from time to time to effect, maintain and renew all or any of the following insurances in such amounts, on
such terms, through such insurers and generally in such manner as the Majority Lenders may from time to time consider appropriate:
| (iii) |
| (A) |
the Advance relating to the Ship owned by it: and
|
| (B) |
the aggregate principal amount secured by Permitted Security Interests over that Ship which have a prior ranking to the Security Interests created by the Finance Documents,
|
53
(the aggregate of (A) and (B) being the “Aggregate Insurable Amount”);
and the Borrowers shall upon demand fully indemnify the Security Trustee in
respect of all premiums and other expenses which are incurred in connection with, or with a view to, effecting, maintaining or renewing any such insurance
or dealing with, or considering, any matter arising out of any such insurance.
| 13.17 |
Review of insurance requirements
|
The Security Trustee shall be entitled to review the requirements of this Clause 13 (Insurance)
from time to time in order to take account of any changes in circumstances after the date of this Agreement which are, in the opinion of the Agent (acting on the instructions of the Majority Lenders), significant and capable of affecting the
Borrowers, each Ship and its Insurances (including, without limitation, changes in the availability or the cost of insurance coverage or the risks to which the Borrower owning that Ship may be subject) and the Borrowers shall upon demand fully
indemnify the Agent in respect of all fees and other expenses incurred by or for the account of the Agent in appointing an independent marine insurance broker or adviser to conduct such review.
| 13.18 |
Modification of insurance requirements
|
The Security Trustee shall notify the Borrowers of any proposed modification under Clause 13.17 (Review of
insurance requirements) to the requirements of this Clause 13 (nsurance) which the Security Trustee reasonably considers appropriate in the circumstances, and such
modification shall take effect on and from the date it is notified in writing to the Borrowers as an amendment to this Clause 13 (Insurance) and shall bind the Borrowers
accordingly.
| 13.19 |
Compliance with mortgagee’s instructions
|
The Security Trustee shall be entitled (without prejudice to or limitation of any other rights which it may have or acquire under any Finance
Document) to require a Ship to remain at any safe port or to proceed to and remain at any safe port designated by the Security Trustee until the Borrower owning that Ship implements any amendments to the terms of the obligatory insurances and any
operational changes required as a result of a notice served under Clause 13.18 (Modification of insurance requirements).
| 14 |
SHIP COVENANTS
|
| 14.1 |
General
|
Each Borrower also undertakes with each Creditor Party to comply with the following provisions of this Clause 14 (Ship Covenants) at all times during the Security Period except as the Agent, acting with the authorisation of the Majority Lenders, may otherwise permit in writing.
54
| 14.2 |
Ship’s name and registration
|
Each Borrower shall keep the Ship owned by it registered in its name under an Approved Flag; shall not do, omit to do or allow to be done anything
as a result of which such registration might be cancelled or imperilled; and shall not change the name or port of registry of that Ship.
| 14.3 |
Repair and classification
|
Each Borrower shall, and shall procure that each Approved Manager shall, keep the Ship owned by that Borrower in a good and safe condition and state
of repair, sea and cargo worthy in all respects:
| (a) |
consistent with first-class ship ownership and management practice;
|
and the Agent shall be given power of attorney in the form attached as Schedule 6 (Power of Attorney) to
act on behalf of that Borrower in order to, inspect the class records and any files held by the classification society and to require the classification society to provide the Agent or any of its nominees with any information, document or file, it
might request and the classification society shall be fully entitled to rely hereon without any further inquiry.
| 14.4 |
Classification society undertaking
|
Each Borrower shall instruct the classification society referred to in Clause 14.3 (Repair and classification) (and procure that the classification society undertakes with the Security Trustee) in relation to its Ship:
| (c) |
to notify the Security Trustee immediately in writing if the classification society:
|
| (i) |
receives notification from that Borrower or any person that that Ship’s classification society is to be changed; or
|
55
| (d) |
following receipt of a written request from the Security Trustee:
|
| 14.5 |
Modification
|
Neither Borrower shall make any modification or repairs to, or replacement of, its Ship or equipment installed on it which would or might materially
alter the structure, type or performance characteristics of that Ship or materially reduce its value.
| 14.6 |
Removal of parts
|
Neither Borrower shall remove any material part of its Ship, or any item of equipment installed on that Ship unless the part or item so removed is
forthwith replaced by a suitable part or item which is in the same condition as or better condition than the part or item removed, is free from any Security Interest or any right in favour of any person other than the Security Trustee and becomes
on installation on that Ship the property of that Borrower and subject to the security constituted by the relevant Mortgage Provided that a Borrower may install equipment owned by a third party if the
equipment can be removed without any risk of damage to the Ship owned by it.
| 14.7 |
Surveys
|
Each Borrower shall submit the Ship owned by it regularly to all periodical or other surveys which may be required for classification purposes and,
if so required by the Security Trustee provide the Security Trustee, with copies of all survey reports.
| 14.8 |
Inspection
|
Each Borrower shall permit the Security Trustee (by surveyors or other persons appointed by it for that purpose) to board the Ship owned by that
Borrower at all reasonable times to inspect its condition or to satisfy themselves about proposed or executed repairs and shall afford all proper facilities for such inspections at the Borrowers’ expense, and if the inspector or surveyor appointed
by the Security Trustee under this Clause is of the opinion that there are any technical, commercial or operational actions being undertaken or omitted to be undertaken by the Borrower which is the owner of that Ship or the relevant Approved
Manager which adversely affect the operation or value of that Ship, the Borrowers shall forthwith (at their expense) on the Security Trustee’s demand remedy such action or inaction and provide the Security Trustee with evidence that it has taken
such remedial action.
| 14.9 |
Prevention of and release from arrest
|
Each Borrower shall promptly discharge:
| (a) |
all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against the Ship owned by it, the Earnings or the Insurances;
|
56
| (b) |
all taxes, dues and other amounts charged in respect of that Ship, the Earnings or the Insurances; and
|
| (c) |
all other outgoings whatsoever in respect of that Ship, the Earnings or the Insurances,
|
and, forthwith upon receiving notice of the arrest of that Ship, or of its detention in exercise or purported exercise of any lien or claim, that
Borrower shall procure its release by providing bail or otherwise as the circumstances may require.
| 14.10 |
Compliance with laws etc.
|
Each Borrower shall:
| 14.11 |
Provision of information
|
Each Borrower shall promptly provide the Security Trustee with any information which it requests regarding:
| (a) |
the Ship owned by it, its employment, position and engagements;
|
| (b) |
the Earnings and payments and amounts due to the master and crew of that Ship;
|
| (c) |
any expenses incurred, or likely to be incurred, in connection with the operation, maintenance or repair of that Ship and any payments made in respect of that Ship;
|
| (d) |
any towages and salvages; and
|
| (e) |
its compliance, each Approved Manager’s compliance and the compliance of that Ship with the ISM Code and the ISPS Code,
|
and, upon the Security Trustee’s request, provide copies of any current charter relating to that Ship, of any current charter guarantee and copies
of that Borrower’s or the relevant Approved Manager’s Document of Compliance, Safety Management Certificate and the ISSC.
| 14.12 |
Notification of certain events
|
Each Borrower shall:
57
| (a) |
before entering into:
|
| (i) |
any demise charter for any period in respect of its Ship; or
|
| (ii) |
any other Assignable Charter,
|
notify the Agent and provide copies of any draft charter relating to its Ship and, if applicable, any draft charter guarantee and that Borrower
shall be entitled to enter into such charter Provided that:
| (D) |
the relevant Borrower provides certified true and complete copies of the charter relating to its Ship and of any current charter guarantee, if any, immediately after its execution;
|
| (F) |
| (b) |
immediately notify the Security Trustee by letter, of:
|
58
| (ii) |
its entry into any time or consecutive voyage charter in respect of that Ship for a term which exceeds, or which by virtue of any optional extensions may exceed, six months;
|
| (iii) |
any casualty which is or is likely to be or to become a Major Casualty;
|
| (iv) |
any occurrence as a result of which the Ship owned by it has become or is, by the passing of time or otherwise, likely to become a Total Loss;
|
| (v) |
any requirement, condition or recommendation made by any insurer or classification society or by any competent authority which is not immediately complied with;
|
| (vi) |
any arrest or detention of that Ship, any exercise or purported exercise of any lien on that Ship or its Earnings or any requisition of that Ship for hire;
|
| (vii) |
any intended dry docking of that Ship;
|
| (viii) |
any Environmental Claim which exceeds $1,000,000 and made against that Borrower or in connection with that Ship, or any Environmental Incident;
|
| (ix) |
any claim for breach of the ISM Code or the ISPS Code being made against that Borrower, any Approved Manager or otherwise in connection with that Ship;
|
| (x) |
its intention to de-activate or lay up its Ship; or
|
| (xi) |
any other matter, event or incident, actual or threatened, the effect of which will or could lead to the ISM Code or the ISPS Code not being complied with,
|
and that Borrower shall keep the Security Trustee advised in writing on a regular basis and in such detail as the Security Trustee shall require of
that Borrower’s, any Approved Manager’s or any other person’s response to any of those events or matters.
| 14.13 |
Restrictions on chartering, appointment of managers etc.
|
Neither Borrower shall, in relation to the Ship owned by it:
| (a) |
enter into any charter in relation to that Ship under which more than two months’ hire (or the equivalent) is payable in advance;
|
| (b) |
charter that Ship otherwise than on bona fide arm’s length terms at the time when that Ship is fixed;
|
| (c) |
appoint a manager of that Ship other than the Approved Managers or agree to any alteration to the terms of any Approved Manager’s appointment; or
|
| 14.14 |
Notice of Mortgage
|
Each Borrower shall keep the Mortgage relative to its Ship registered against that Ship as a valid first preferred or, as the case may be, priority
mortgage, carry on board that Ship a certified copy of that Mortgage and place and maintain in a conspicuous place in the navigation room and the Master’s cabin of that Ship a framed printed notice stating that that Ship is mortgaged by that
Borrower to the Security Trustee.
59
| 14.15 |
Sharing of Earnings
|
Neither Borrower shall enter into any agreement or arrangement for the sharing of any Earnings (other than (i) any profit sharing agreement with a
charterer which takes effect above an agreed minimum charter hire rate payable to the relevant Borrower under a charter to which that Borrower is a party and (ii) any pool agreement, in either case, on bona fide arm’s length terms).
| 14.16 |
ISPS Code
|
Each Borrower shall comply with the ISPS Code and in particular, without limitation, shall:
| (a) |
procure that the Ship owned by it and the company responsible for that Ship’s compliance with the ISPS Code comply with the ISPS Code; and
|
| (b) |
maintain for that Ship an ISSC; and
|
| (c) |
notify the Agent immediately in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC.
|
| 15 |
SECURITY COVER
|
| 15.1 |
Minimum required security cover
|
Clause 15.2 (Prepayment; provision of additional security) applies if the Agent notifies the Borrowers that
the Security Cover Ratio is below 130 per cent.
| 15.2 |
Prepayment; provision of additional security
|
If the Agent serves a notice on the Borrowers under Clause 15.1 (Minimum required
security cover), the Borrowers shall prepay such part at least of the Loan as will eliminate the shortfall on or before the date falling 14 Business Days after the date on which the Agent’s notice is served under Clause 15.1 (Minimum required security cover) (the “Prepayment Date”) unless at least five calendar days before the Prepayment Date the Borrowers have provided, or ensured that a third
party has provided, additional security which, in the opinion of the Majority Lenders, has a net realisable value at least equal to the shortfall and is documented in such terms as the Agent may, with the authorisation of the Majority Lenders,
approve or require.
| 15.3 |
Valuation of Ships
|
| (i) |
as at a date not more than 30 days previously;
|
| (ii) |
with or without physical inspection of that Ship (as the Agent may require); and
|
60
| (b) |
If a Borrower disagrees with the valuation obtained by the Agent in accordance with paragraph (a) above, it shall be entitled to obtain a second valuation from an Approved Broker
selected by the Borrowers and appointed by the Agent, and prepared in accordance with sub-paragraphs (i) to (iii) of paragraph (a) above. In that case the Market Value of the Mortgaged Ship shall be the arithmetic mean of the two valuations
issued provided that if the Borrowers do not elect to appoint an Approved Broker within 14 days after the Agent’s request to receive a valuation of a Mortgaged Ship, the Market Value of that
Mortgaged Ship shall be that shown in the sole valuation obtained by the Agent in accordance with paragraph (a) above.
|
| 15.4 |
Value of additional vessel security
|
The net realisable value of any additional security which is provided under Clause 15.2 (Prepayment; provision of
additional security) and which consists of a Security Interest over a vessel shall be that shown by a valuation complying with the requirements of Clause 15.3 (Valuation of
Ships).
| 15.5 |
Valuations binding
|
Any valuation under Clause 15.2 (Prepayment; provision of additional security), 15.3 (Valuation of Ships) or 15.4 (Value of additional vessel security) shall be binding and conclusive as regards the Borrowers, as shall be any valuation which the Majority
Lenders make of any additional security which does not consist of or include a Security Interest.
| 15.6 |
Provision of information
|
The Borrowers shall promptly provide the Agent and any Approved Broker or expert acting under Clause 15.3 (Valuation of Ships) or 15.4 (Value of additional vessel security)with any information which the Agent or that Approved Broker or expert may
request for the purposes of the valuation; and, if the Borrowers fail to provide the information by the date specified in the request, the valuation may be made on any basis and assumptions which that Approved Broker or the Majority Lenders (or the
expert appointed by them) consider prudent.
| 15.7 |
Payment of valuation expenses
|
Without prejudice to the generality of the Borrowers’ obligations under Clauses 20.2 (Costs
of negotiation, preparation etc.), 20.3 (Costs of variations, amendments, enforcement etc.) and 21.3 (Other breakage costs), the Borrowers shall, on demand,
pay the Agent the amount of the fees and expenses of any Approved Broker or expert instructed by the Agent under this Clause and all legal and other expenses incurred by any Creditor Party in connection with any matter arising out of this Clause Provided that so long as no Event of Default has occurred which is continuing the Borrowers shall not be obliged to pay any such fees and expenses in respect of more than two sets of valuations of each Ship in
any calendar year (in addition to the set of valuations to determine the Initial Market Value of each Ship obtained prior to the Drawdown Date).
61
| 15.8 |
Frequency of valuations
|
The Borrowers acknowledge and agree that the Agent may commission valuation(s) of either Ship at such times as the Agent
(acting on the instructions of the Lenders) shall deem necessary and, in any event, not less than once during each 6-month period of the Security Period.
| 16 |
PAYMENTS AND CALCULATIONS
|
| 16.1 |
Currency and method of payments
|
All payments to be made by the Lenders or by either Borrower under a Finance Document shall be made to the Agent or to the Security Trustee, in the
case of an amount payable to it:
| (a) |
by not later than 11.00 a.m. (New York City time) on the due date;
|
| (d) |
in the case of an amount payable to the Security Trustee, to such account as it may from time to time notify to the Borrowers and the other Creditor Parties.
|
| 16.2 |
Payment on non-Business Day
|
If any payment by either Borrower under a Finance Document would otherwise fall due on a day which is not a Business Day:
| (a) |
the due date shall be extended to the next succeeding Business Day; or
|
| (b) |
if the next succeeding Business Day falls in the next calendar month, the due date shall be brought forward to the immediately preceding Business Day,
|
and interest shall be payable during any extension under paragraph (a) at the rate payable on the original due date.
| 16.3 |
Basis for calculation of periodic payments
|
All interest and commitment fee and any other payments under any Finance Document which are of an annual or periodic nature shall accrue from day to
day and shall be calculated on the basis of the actual number of days elapsed and a 360-day year.
| 16.4 |
Distribution of payments to Creditor Parties
|
Subject to Clauses 16.5 (Permitted deductions by Agent), 16.6 (Agent only
obliged to pay when monies received ) and 16.7 (Refund to Agent of monies not received):
62
| 16.5 |
Permitted deductions by Agent
|
Notwithstanding any other provision of this Agreement or any other Finance Document, the Agent may, before making an amount available to a Lender,
deduct and withhold from that amount any sum which is then due and payable to the Agent from that Lender under any Finance Document or any sum which the Agent is then entitled under any Finance Document to require that Lender to pay on demand.
| 16.6 |
Agent only obliged to pay when monies received
|
Notwithstanding any other provision of this Agreement or any other Finance Document, the Agent shall not be obliged to make available to either
Borrower or any Lender any sum which the Agent is expecting to receive for remittance or distribution to that Borrower or that Lender until the Agent has satisfied itself that it has received that sum.
| 16.7 |
Refund to Agent of monies not received
|
If and to the extent that the Agent makes available a sum to a Borrower or a Lender without first having received that sum, that Borrower or (as the
case may be) the Lender concerned shall, on demand:
| (a) |
refund the sum in full to the Agent; and
|
| 16.8 |
Agent may assume receipt
|
Clause 16.7 (Refund to Agent of monies not received) shall not affect any
claim which the Agent has under the law of restitution, and applies irrespective of whether the Agent had any form of notice that it had not received the sum which it made available.
| 16.9 |
Creditor Party accounts
|
Each Creditor Party shall maintain accounts showing the amounts owing to it by the Borrowers and each Security Party under the Finance Documents and
all payments in respect of those amounts made by the Borrowers and any Security Party.
| 16.10 |
Agent’s memorandum account
|
The Agent shall maintain a memorandum account showing the amounts advanced by the Lenders and all other sums owing to the Agent, the Security Trustee and each Lender from the Borrowers and each Security Party under the Finance Documents and all payments in respect of those amounts made by the Borrowers and any Security Party.
63
| 16.11 |
Accounts prima facie evidence
|
If any accounts maintained under Clauses 16.9 (Creditor Party accounts) and 16.10 (Agent’s memorandum account) show an amount to be owing by a Borrower or a Security Party to a Creditor Party, those accounts shall be prima facie evidence that that amount is owing to that
Creditor Party.
| 17 |
APPLICATION OF RECEIPTS
|
| 17.1 |
Normal order of application
|
Except as any Finance Document may otherwise provide, any sums which are received or recovered by any Creditor Party under or by virtue of any
Finance Document shall be applied:
| (a) |
FIRST: in or towards satisfaction of any amounts then due and payable under the Finance Documents in the following order and proportions:
|
| (ii) |
secondly, in or towards satisfaction pro rata of any and all amounts of interest or default interest payable to the Creditor Parties under the Finance Documents; and
|
| (iii) |
thirdly, in or towards satisfaction of the Loan;
|
| (c) |
THIRDLY: any surplus shall be paid to the Borrowers or to any other person appearing to be entitled to it.
|
| 17.2 |
Application by any covered bond Lender
|
If and to the extent that any Lender includes the Loan and/or a Mortgage in its covered bond register, any enforcement proceeds recovered under the
Finance Documents and attributable to it under the relevant Finance Document shall, notwithstanding the provisions of Clause 17.1(a) (Normal order of application), be applied by
it first to the part of the Loan that corresponds to that Lender’s Contribution registered in its covered bond register and thereafter in the following order:
64
| (a) |
firstly, in or towards satisfaction of the amounts set out under Clause 17.1(a)(i) (Normal order of application);
|
| (b) |
| (c) |
thirdly, in or towards satisfaction of any part of the Loan that corresponds to any unregistered part of that Lender’s contribution.
|
| 17.3 |
Variation of order of application
|
The Agent may, with the authorisation of the Majority Lenders, by notice to the Borrowers, the Security Parties and the other Creditor Parties
provide for a different manner of application from that set out in Clause 17.1 (Normal order of application ) (but not, for the avoidance of doubt, that set out in Clause 17.2 (Application by any covered bond Lender)) either as regards a specified sum or sums or as regards sums in a specified category or categories.
| 17.4 |
Notice of variation of order of application
|
The Agent may give notices under Clause 17.3 (Variation of order of application) from time to time; and
such a notice may be stated to apply not only to sums which may be received or recovered in the future, but also to any sum which has been received or recovered on or after the third Business Day before the date on which the notice is served.
| 17.5 |
Appropriation rights overridden
|
This Clause 17 (Application of Receipts) and any notice which the Agent gives
under Clause 17.3 (Variation of order of application ) shall override any right of appropriation possessed, and any appropriation made, by either Borrower or any Security Party.
| 18 |
APPLICATION OF EARNINGS
|
| 18.1 |
Payment of Earnings
|
Each Borrower undertakes with each Creditor Party that, throughout the Security Period (and subject only to the provisions of the General Assignment
to which it is a party):
| (a) |
it shall maintain the Accounts with the Account Bank;
|
| (b) |
it shall ensure that all Earnings of the Ship owned by it are paid to the Earnings Account for that Ship;
|
| (c) |
| (d) |
the Dry Docking Reserve Amount required pursuant to Clause 11.20 (Dry Docking Reserve Amount) shall be maintained in the Dry Dock Reserve
Account.
|
| 18.2 |
Monthly retentions to Retention Account
|
The Borrowers undertake with each Creditor Party to ensure that, on and from the date falling one month after each Drawdown Date and at monthly
intervals thereafter during the Security Period, there are transferred in respect of each Advance drawn on that Drawdown Date to the Retention Account out of the Earnings received in the relevant Earnings Account during the preceding month:
65
| (a) |
| (b) |
the relevant fraction of the aggregate amount of interest on that Advance which is payable on the next due date for payment of interest under this Agreement,
|
and the Borrowers irrevocably authorise the Agent to make those transfers (in its sole discretion and without any obligation) if the Borrowers fail
to do so.
The “relevant fraction”, in relation to paragraph (b), is a fraction of which the numerator is 1 and the
denominator the number of months comprised in the then current Interest Period (or if the current Interest Period in respect of that Advance ends after the next due date for payment of interest under this Agreement, the number of months from the
later of the commencement of the current Interest Period in respect of that Advance or the last due date for payment of interest to the next due date for payment of interest in respect of that Advance under this Agreement).
| 18.3 |
Shortfall in Earnings
|
If the aggregate Earnings received in the Earnings Accounts are insufficient at any time for the required amount to be transferred to the Retention
Account under Clause 18.2 (Monthly retentions to Retention Account), the Borrowers shall immediately pay the amount of the insufficiency into the Retention Account.
| 18.4 |
Application of retentions
|
Until an Event of Default or a Potential Event of Default occurs, the Agent shall, to the extent there are sufficient funds standing to the credit
of the Retention Account, on each Repayment Date in respect of an Advance and on each due date for the payment of interest in respect of that Advance under this Agreement distribute to the
Lenders in accordance with Clause 16.4 (Distribution of payments to Creditor Parties) so much of the then balance on the Retention Account as equals:
| (a) |
| (b) |
in discharge of the Borrowers’ liability for that Instalment or that interest.
| 18.5 |
Interest accrued on the Accounts
|
Any credit balance on each Account shall bear interest at the rate from time to time offered by the Agent to its customers for Dollar deposits of
similar amounts and for periods similar to those for which such balances appear to the Agent likely to remain on that Account.
66
| 18.6 |
Release of accrued interest
|
Interest accruing under Clause 18.5 (interest accrued on the Accounts) shall be credited to the relevant
Account and may be released to a Borrower pursuant to Clause 18.10 (Restriction on withdrawal).
| 18.7 |
Location of Accounts
|
Each Borrower shall promptly:
| (a) |
comply with any requirement of the Agent as to the location or re-location of the Accounts (or any of them); and
|
| 18.8 |
Debits for fees, expenses etc.
|
The Agent shall be entitled (but not obliged) from time to time to debit any Earnings Account without prior notice in order to discharge any amount
due and payable under Clauses 20 (Fees and Expenses ) or 21 (Indemnities ) to a Creditor Party or payment of which any Creditor Party
has become entitled to demand under Clauses 20 (Fees and Expenses) or 21 (Indemnities).
| 18.9 |
Borrowers’ obligations unaffected
|
The provisions of this Clause 18 (Application of Earnings) (as distinct from
a distribution effected under Clause 18.4 (Application of retentions)) do not affect:
| (a) |
the liability of the Borrowers to make payments of principal and interest on the due dates; or
|
| (b) |
any other liability or obligation of the Borrowers or any Security Party under any Finance Document.
|
| 18.10 |
Restriction on withdrawal
|
| (a) |
During the Security Period no sum may be withdrawn by a Borrower from the Liquidity Account, the Dry Dock Reserve Account or the Retention Account (other than interest
pursuant to Clause 18.6 (Release of accrued interest) and/or any sums withdrawn in accordance with, and pursuant to, the terms of Clauses 11.19(c) (Minimum Liquidity
and Additional Minimum Liquidity) and/or 11.20(d) (Dry Docking Reserve Amount)), provided that no Event of Default or Potential Event of Default has occurred which is continuing, without the
prior written consent of the Agent.
|
67
| 19 |
EVENTS OF DEFAULT
|
| 19.1 |
Events of Default
|
An Event of Default occurs if:
| (a) |
any Borrower or any Security Party fails to pay when due or (if so payable) on demand any sum payable under a Finance Document or under any document relating to a Finance Document
unless:
|
| (i) |
its failure to pay is caused by administrative or technical error or a Disruption Event; and
|
| (ii) |
payment is made within three Business Days; or
|
| (i) |
any Financial Indebtedness of a Relevant Person is not paid when due; or
|
68
| (v) |
any Security Interest securing any Financial Indebtedness of a Relevant Person becomes enforceable; or
|
| (g) |
any of the following occurs in relation to a Relevant Person:
|
| (i) |
a Relevant Person becomes, in the opinion of the Majority Lenders, unable to pay its debts as they fall due; or
|
| (ii) |
any assets of a Relevant Person are subject to any form of execution, attachment, arrest, sequestration or distress or any form of freezing order; or
|
| (iii) |
any administrative or other receiver is appointed over any asset of a Relevant Person; or
|
| (iv) |
an administrator is appointed (whether by the court or otherwise) in respect of a Relevant Person; or
|
| (vi) |
a provisional liquidator is appointed in respect of a Relevant Person, a winding up order is made in relation to a Relevant Person or a winding up resolution is passed by a Relevant
Person; or
|
69
| (h) |
any Borrower ceases or suspends carrying on its business or a part of its business which, in the opinion of the Majority Lenders, is material in the context of this Agreement; or
|
| (i) |
it becomes unlawful in any Pertinent Jurisdiction or impossible:
|
| (ii) |
for the Agent, the Security Trustee or the Lenders to exercise or enforce any right under, or to enforce any Security Interest created by, a Finance Document; or
|
| (k) |
it appears to the Majority Lenders that, without their prior consent, a Change of Control has occurred or probably has occurred after the date of this Agreement in respect of a
Security Party; or
|
70
| (m) |
a Relevant Person rescinds or purports to rescind or repudiates or purports to repudiate a Finance Document or evidences an intention to rescind or repudiate a Finance Document;
|
| (n) |
the security constituted by a Finance Document is in any way imperilled or in jeopardy; or
|
| (o) |
any other event occurs or any other circumstances arise or develop including, without limitation:
|
| (i) |
a change in the financial position, state of affairs or prospects of any Borrower, the Corporate Guarantor or any other Security Party; or
|
| (ii) |
any accident or other event involving any Ship or another vessel owned, chartered or operated by a Relevant Person (other than Castor Ships); or
|
| (iii) |
the threat or commencement of legal or administrative action involving a Borrower, a Ship, any of the Approved Managers or any Security Party; or
|
which constitutes a Material Adverse Change.
| 19.2 |
Actions following an Event of Default
|
On, or at any time after, the occurrence of an Event of Default:
| (a) |
the Agent may, and if so instructed by the Majority Lenders, the Agent shall:
|
| (i) |
serve on the Borrowers a notice stating that all or part of the Commitments and of the other obligations of each Lender to the Borrowers under this Agreement are cancelled; and/or
|
71
| 19.3 |
Termination of Commitments
|
On the service of a notice under Clause 19.2(a)(i) (Actions following an Event of
Default), the Commitments and all other obligations of each Lender to the Borrowers under this Agreement shall be cancelled.
| 19.4 |
Acceleration of Loan
|
On the service of a notice under Clause 19.2(a)(ii) (Actions following an Event of Default), all or, as the
case may be, the part of the Loan specified in the notice together with accrued interest and all other amounts accrued or owing from the Borrowers or any Security Party under this Agreement and every other Finance Document shall become immediately
due and payable or, as the case may be, payable on demand.
| 19.5 |
Multiple notices; action without notice
|
The Agent may serve notices under Clauses 19.2(a)(i) (Actions following an Event of Default) or 19.2(a)(ii)
(Actions following an Event of Default) simultaneously or on different dates and it and/or the Security Trustee may take any action referred to in Clause 19.2 (Actions following an Event of Default) if no such notice is served or simultaneously with or at any time after the service of both or either of such notices.
| 19.6 |
Notification of Creditor Parties and Security Parties
|
The Agent shall send to each Lender, the Security Trustee and each Security Party a copy or the text of any notice which the Agent serves on the
Borrowers under Clause 19.2 (Actions following an Event of Default); but the notice shall become effective when it is served on the Borrowers, and no failure or delay by the
Agent to send a copy or the text of the notice to any other person shall invalidate the notice or provide any Borrower or any Security Party with any form of claim or defence.
| 19.7 |
Creditor Party rights unimpaired
|
Nothing in this Clause shall be taken to impair or restrict the exercise of any right given to individual Lenders under a Finance Document or the
general law; and, in particular, this Clause is without prejudice to Clause 3.1 (Interests several).
| 19.8 |
Exclusion of Creditor Party liability
|
No Creditor Party, and no receiver or manager appointed by the Security Trustee, shall have any liability to a Borrower or a Security Party:
except that this does not exempt a Creditor Party or a receiver or manager from liability for losses shown to have been directly and mainly caused
by the dishonesty or the wilful misconduct of such Creditor Party’s own officers and employees or (as the case may be) such receiver’s or manager’s own partners or employees.
72
| 19.9 |
Relevant Persons
|
In this Clause 19 (Events of Default), a “Relevant Person” means a Borrower, the Corporate Guarantor, any Security Party and any member of the Group.
| 19.10 |
Interpretation
|
In Clause 19.1(f) (Events of Default) references to an event of default or a
termination event include any event, howsoever described, which is similar to an event of default in a facility agreement or a termination event in a finance lease; and in Clause 19.1(g) (Events of Default) “petition” includes an application.
| 20 |
FEES AND EXPENSES
|
| 20.1 |
Structuring and commitment fees:
|
| 20.2 |
Costs of negotiation, preparation etc.
|
The Borrowers shall pay to the Agent on its demand the amount of all legal and other expenses incurred by the Agent or the Security Trustee in
connection with the negotiation, preparation, execution or registration of any Finance Document or any related document or with any transaction contemplated by a Finance Document or a related document.
| 20.3 |
Costs of variations, amendments, enforcement etc.
|
The Borrowers shall pay to the Agent, on the Agent’s demand, for the account of the Creditor Party concerned, the amount of all legal and other
expenses incurred by a Creditor Party in connection with:
| (a) |
| (i) |
| (ii) |
73
| (c) |
There shall be recoverable under paragraph (d) the full amount of all legal expenses, whether or not such as would be allowed under rules of court
or any taxation or other procedure carried out under such rules.
| 20.4 |
Documentary taxes
|
The Borrowers shall promptly pay any tax payable on or by reference to any Finance Document, and shall, on the Agent’s demand, fully indemnify each
Creditor Party against any claims, expenses, liabilities and losses resulting from any failure or delay by the Borrowers to pay such a tax.
| 20.5 |
Certification of amounts
|
A notice which is signed by two officers of a Creditor Party, which states that a specified amount, or aggregate amount, is due to that Creditor
Party under this Clause 20 (Fees and Expenses) and which indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or aggregate
amount, is due shall be prima facie evidence that the amount, or aggregate amount, is due.
| 21 |
INDEMNITIES
|
| 21.1 |
Indemnities regarding borrowing and repayment of Loan
|
The Borrowers shall fully indemnify the Agent and each Lender on the Agent’s demand and the Security Trustee on its demand in respect of all claims,
expenses, liabilities and losses which are made or brought against or incurred by that Creditor Party, or which that Creditor Party reasonably and with due diligence estimates that it will incur, as a result of, or in
connection with:
| (b) |
the receipt or recovery of all or any part of the Loan or an overdue sum otherwise than on the last day of an Interest Period or other relevant period;
|
74
| (d) |
and in respect of any tax (other than tax on its overall net income (and a FATCA Deduction)) for which a Creditor Party is liable in connection with
any amount paid or payable to that Creditor Party (whether for its own account or otherwise) under any Finance Document.
| 21.2 |
Break Costs
|
If a Lender (the “Notifying Lender”) notifies the Agent that as a consequence of receipt or recovery of all
or any part of the Loan (a “Payment”) on a day other than the last day of an Interest Period applicable to the sum received or recovered the Notifying Lender has or will, with effect from a specified date,
incur Break Costs:
| (a) |
| (b) |
the Borrowers shall, within five Business Days of the Agent’s demand, pay to the Agent for the account of the Notifying Lender the amount of such Break Costs; and
|
In this Clause 21.2 (Break Costs), “Break Costs” means, in relation to a Payment the amount (if any) by which:
exceeds
| 21.3 |
Other breakage costs
|
Without limiting its generality, Clause 21.1 (Indemnities regarding borrowing and
repayment of Loan) covers any claim, expense, liability or loss, including (without limitation) a loss of a prospective profit, incurred by a Lender in borrowing, liquidating or re-employing deposits from third parties acquired, contracted
for or arranged to fund, effect or maintain all or any part of its Contribution and/or any overdue amount (or an aggregate amount which includes its Contribution or any overdue amount) other than claims, expenses, liabilities and losses which are
shown to have been directly and mainly caused by the gross negligence or wilful misconduct of the officers or employees of the Creditor Party concerned.
75
| 21.4 |
Miscellaneous indemnities
|
The Borrowers shall fully indemnify each Creditor Party severally on their respective demands, without prejudice to any of their other rights under
any of the Finance Documents, in respect of all claims, expenses, liabilities and losses which may be made or brought against or sustained or incurred by a Creditor Party, in any country, as a result of or in connection with:
| (b) |
investigating any event which the Creditor Party concerned reasonably believes constitutes an Event of Default or Potential Event of Default;
|
| (c) |
acting or relying on any notice, request or instruction which the Creditor Party concerned reasonably believes to be genuine, correct and appropriately authorised; or
|
| (d) |
any other Pertinent Matter,
|
other than claims, expenses, liabilities and losses which are shown to have been directly and mainly caused by the dishonesty, gross negligence or
wilful misconduct of the officers or employees of the Creditor Party concerned.
| 21.5 |
Environmental Indemnity
|
Without prejudice to the generality of Clause 21.4 (Miscellaneous indemnities),
this Clause 21.5 (Environmental Indemnity) covers any claims, demands, proceedings, liabilities, taxes, losses, liabilities or expenses of every kind which arise, or are asserted, under or in connection with
any law relating to safety at sea, the ISM Code or the ISPS Code, any Environmental Law.
| 21.6 |
Currency indemnity
|
If any sum due from a Borrower or any Security Party to a Creditor Party under a Finance Document or under any order, award or judgment relating to
a Finance Document (a “Sum”) has to be converted from the currency in which the Finance Document provided for the Sum to be paid (the “Contractual Currency”) into
another currency (the “Payment Currency”) for the purpose of:
| (a) |
making, filing or lodging any claim or proof against a Borrower or any Security Party, whether in its liquidation, any arrangement involving it or otherwise; or
|
| (b) |
obtaining an order, judgment or award from any court or other tribunal in relation to any litigation or arbitration proceedings; or
|
| (c) |
enforcing any such order, judgment or award,
|
76
the Borrowers shall as an independent obligation, within three Business Days of demand, indemnify the Creditor Party to whom that Sum is due against
any cost, loss or liability arising when the payment actually received by that Creditor Party is converted at the available rate of exchange back into the Contractual Currency including any discrepancy between (A) the rate of exchange actually used
to convert the Sum from the Payment Currency into the Contractual Currency and (B) the available rate of exchange.
In this Clause 21.6 (Currency
indemnity), the “available rate of exchange” means the rate at which the Creditor Party concerned is able at the opening of business (London time) on the Business Day after it receives the Sum to
purchase the Contractual Currency with the Payment Currency.
Each Borrower waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency other than that in which
it is expressed to be payable.
If any Creditor Party receives any Sum in a currency other than the Contractual Currency, the Borrowers shall indemnify in full the Creditor Party
concerned against any cost, loss or liability arising directly or indirectly from any conversion of such Sum to the Contractual Currency.
This Clause 21.6 (Currency indemnity) creates a separate liability of that
Borrower which is distinct from its other liabilities under the Finance Documents and which shall not be merged in any judgment or order relating to those other liabilities.
| 21.7 |
Certification of amounts
|
A notice which is signed by two officers of a Creditor Party, which states that a specified amount, or aggregate amount, is due to that Creditor
Party under this Clause 21 and which indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or aggregate amount, is due shall be prima
facie evidence that the amount, or aggregate amount, is due.
| 21.8 |
Sums deemed due to a Lender
|
For the purposes of this Clause 21 (Indemnities), a sum payable by the
Borrowers to the Agent or the Security Trustee for distribution to a Lender shall be treated as a sum due to that Lender.
| 22 |
NO SET-OFF OR TAX DEDUCTION
|
| 22.1 |
No deductions
|
All amounts due from the Borrowers under a Finance Document shall be paid:
| (a) |
without any form of set-off, counter-claim, cross-claim or condition; and
|
| (b) |
free and clear of any tax deduction except a tax deduction which a Borrower is required by law to make.
|
| 22.2 |
Grossing-up for taxes
|
If, at any time, a Borrower is required by law, regulation or regulatory requirement to make a tax deduction from any payment due under a Finance
Document:
| (a) |
that Borrower shall notify the Agent as soon as it becomes aware of the requirement;
|
77
| 22.3 |
Indemnity and evidence of payment of taxes
|
The Borrowers shall fully indemnify each Creditor Party on the Agent’s demand in respect of all claims, expenses, liabilities and losses incurred by
any Creditor Party by reason of any failure of the Borrowers (or either of them) to make any tax deduction or by reason of any increased payment not being made on the due date for such payment in accordance with Clause 22.2
(Grossing-up for taxes). Within 30 days after making any tax deduction, the Borrowers or, as the case may be, the relevant Borrower shall deliver to the Agent any receipts, certificates or other documentary
evidence satisfactory to the Agent that the tax had been paid to the appropriate taxation authority.
| 22.4 |
Exclusion of tax on overall net income
|
In this Clause 22 (No Set-Off or Tax Deduction) “tax deduction” means any deduction or withholding from any payment due under a Finance Document for or on account of any present or future tax except:
| (a) |
tax on a Creditor Party’s overall net income; and
|
| (b) |
a FATCA Deduction.
|
| 22.5 |
FATCA Information
|
| (a) |
Subject to paragraph (c) below, each Party shall, within ten Business Days of a reasonable request by another Party:
|
| (i) |
confirm to that other Party whether it is:
|
| (A) |
a FATCA Exempt Party; or
|
| (B) |
not a FATCA Exempt Party; and
|
78
| (i) |
any law or regulation;
|
| (ii) |
any fiduciary duty; or
|
| (iii) |
any duty of confidentiality.
|
| (i) |
where the Lender knows or has reason to know that a Borrower is a US Tax Obligor and the relevant Lender is a Party as at the date of this Agreement, the date of this Agreement;
|
| (iii) |
the date of a request from the Agent,
|
supply to the Agent:
| (iv) |
a withholding certificate on US Internal Revenue Service Form W-8 or Form W-9 (or any successor form) (as applicable); or
|
| (v) |
any withholding statement and other documentation, authorisations and waivers as the Agent may require to certify or establish the status of such Lender under FATCA.
|
The Agent shall provide any withholding certificate, withholding statement, documentation, authorisations and waivers it receives from a Lender
pursuant to this paragraph (e) to the Borrowers, to the extent required for compliance with FATCA or any other law or regulation, and shall be entitled to rely on any such withholding certificate, withholding statement, documentation,
authorisations and waivers provided without further verification. The Agent shall not be liable for any action taken by it under or in connection with this paragraph (e).
79
| 22.6 |
FATCA Deduction
|
| 23 |
ILLEGALITY, ETC.
|
| 23.1 |
Illegality
|
This Clause 23 (Illegality, etc.) applies if a Lender (the “Notifying Lender”) notifies the Agent that it has become, or will with effect from a specified date, become:
| (a) |
unlawful or prohibited as a result of the introduction of a new law, an amendment to an existing law or a change in the manner in which an existing law is or will be interpreted or
applied; or
|
| (b) |
contrary to, or inconsistent with, any regulation,
|
for the Notifying Lender to perform, maintain or give effect to any of its obligations under this Agreement in the manner contemplated by this
Agreement or to fund or maintain the Loan.
| 23.2 |
Notification of illegality
|
The Agent shall promptly notify the Borrowers, the Security Parties, the Security Trustee and the other Lenders of the notice under Clause 23.1 (Illegality) which the Agent receives from the Notifying Lender.
| 23.3 |
Prepayment; termination of Commitment
|
On the Agent notifying the Borrowers under Clause 23.2 (Notification of illegality), the Notifying Lender’s
Commitment shall be immediately cancelled; and thereupon or, if later, on the date specified in the Notifying Lender’s notice under Clause 23.1 (Illegality) as the date on which
the notified event would become effective the Borrowers shall prepay the Notifying Lender’s Contribution on the last day of the then current Interest Period in accordance with Clauses 8.10 (Amounts payable on
prepayment ) and 8.11(a) (Application of partial prepayment or cancellation).
| 24 |
INCREASED COSTS
|
| 24.1 |
Increased costs
|
This Clause 24 (Increased Costs) applies if a Lender (the “Notifying Lender”) notifies the Agent that the Notifying Lender considers that as a result of:
80
the Notifying Lender (or a parent company of it) has incurred or will incur an “increased cost”.
| 24.2 |
Meaning of “increased cost”
|
| (b) |
a reduction in the amount of any payment to the Notifying Lender under this Agreement or in the effective return which such a payment represents to the Notifying Lender or on its
capital;
|
| (d) |
a liability to make a payment, or a return foregone, which is calculated by reference to any amounts received or receivable by the Notifying Lender under this Agreement,
|
but not an item attributable to a change in the rate of tax on the overall net income of the Notifying Lender (or a parent company of it) or an item
covered by the indemnity for tax in Clause 21.1 (Indemnities regarding borrowing and repayment of Loan) or by Clause 22
(No Set-Off or Tax Deduction) or a FATCA Deduction required to be made by a Party.
81
For the purposes of this Clause 24.2 (Meaning of “increased cost”) the
Notifying Lender may in good faith allocate or spread costs and/or losses among its assets and liabilities (or any class of its assets and liabilities) on such basis as it considers appropriate.
| 24.3 |
Notification to Borrowers of claim for increased costs
|
The Agent shall promptly notify the Borrowers and the Security Parties of the notice which the Agent received from the Notifying Lender under Clause
24.1 (Increased costs).
| 24.4 |
Payment of increased costs
|
The Borrowers shall pay to the Agent, within 5 days on the Agent’s demand, for the account of the Notifying Lender the amounts which the Agent from
time to time notifies the Borrowers that the Notifying Lender has specified to be necessary to compensate the Notifying Lender for the increased cost.
| 24.5 |
Notice of prepayment
|
If the Borrowers are not willing to continue to compensate the Notifying Lender for the increased cost under Clause 24.4 (Payment of increased costs), the Borrowers may give the Agent not less than 14 days’ notice of their intention to prepay the Notifying Lender’s Contribution at the end of an Interest Period.
| 24.6 |
Prepayment; termination of Commitment
|
A notice under Clause 24.5 (Notice of prepayment) shall be irrevocable; the Agent shall promptly notify the
Notifying Lender of the Borrowers’ notice of intended prepayment; and:
| (a) |
on the date on which the Agent serves that notice, the Commitment of the Notifying Lender shall be cancelled; and
|
| 24.7 |
Application of prepayment
|
| 25 |
SET-OFF
|
| 25.1 |
Application of credit balances
|
Each Creditor Party may without prior notice to the Borrowers but with prior notice to the Agent:
| (b) |
for that purpose:
|
| (i) |
break, or alter the maturity of, all or any part of a deposit of that Borrower;
|
82
| (ii) |
convert or translate all or any part of a deposit or other credit balance into Dollars; and
|
| (iii) |
enter into any other transaction or make any entry with regard to the credit balance which the Creditor Party concerned considers appropriate.
|
| 25.2 |
Existing rights unaffected
|
No Creditor Party shall be obliged to exercise any of its rights under Clause 25.1 (Application
of credit balances); and those rights shall be without prejudice and in addition to any right of set-off, combination of accounts, charge, lien or other right or remedy to which a Creditor Party is entitled (whether under the general law
or any document).
| 25.3 |
Sums deemed due to a Lender
|
For the purposes of this Clause 25 (Set-Off), a sum payable by the Borrowers to the Agent or the Security
Trustee for distribution to, or for the account of, a Lender shall be treated as a sum due to that Lender; and each Lender’s proportion of a sum so payable for distribution to, or for the account of, the Lenders shall be treated as a sum due to
such Lender.
| 25.4 |
No Security Interest
|
This Clause 25 (Set-Off) gives the Creditor Parties a contractual right of set-off only, and does not
create any equitable charge or other Security Interest over any credit balance of either Borrower.
| 26 |
TRANSFERS AND CHANGES IN LENDING OFFICES
|
| 26.1 |
Transfer by Borrowers
|
Neither Borrower may assign or transfer any of its rights, liabilities or obligations under any Finance Document.
| 26.2 |
Transfer by a Lender
|
| (a) |
Subject to this Clause 26 (Transfers and Changes in Lending Offices), a Lender (the “Transferor
Lender”) may at any time, with the Borrowers’ prior consent or approval, cause:
|
| (i) |
its rights in respect of all or part of its Contribution; or
|
| (ii) |
its obligations in respect of all or part of its Commitment; or
|
| (iii) |
a combination of (a) and (b); or
|
| (iv) |
all or part of its credit risk under this Agreement and the other Finance Documents,
|
to be syndicated to or (in the case of its rights) assigned, pledged or transferred to, or (in the case of its obligations) pledged or assumed by,
any other bank or financial institution or to a trust, fund or other entity, provided such other entity is regularly engaged in, or established for the purpose of, making, purchasing or investing in loans, securities or other financial assets (a “Transferee Lender”) by delivering to the Agent a completed certificate in the form set out in Schedule 5 (Transfer Certificate) with any modifications approved or required
by the Agent (a “Transfer Certificate”) executed by the Transferor Lender and the Transferee Lender.
However, any rights and obligations of the Transferor Lender in its capacity as Agent or Security Trustee will have to be dealt with separately in
accordance with the Agency and Trust Agreement.
83
| (c) |
The consent of a Borrowers to an assignment or transfer must not be withheld solely because the assignment or transfer may result in an increase to any Mandatory Cost.
|
| 26.3 |
Transfer Certificate, delivery and notification
|
As soon as reasonably practicable after a Transfer Certificate is delivered to the Agent, it shall (unless it has reason to believe that the
Transfer Certificate may be defective):
| (a) |
sign the Transfer Certificate on behalf of itself, the Borrowers, the Security Parties, the Security Trustee and each of the other Lenders;
|
| (b) |
on behalf of the Transferee Lender, send to each Borrower and each Security Party letters or faxes notifying them of the Transfer Certificate and attaching a copy of it; and
|
| (c) |
send to the Transferee Lender copies of the letters or faxes sent under paragraph (b) above.
|
| 26.4 |
Effective Date of Transfer Certificate
|
A Transfer Certificate becomes effective on the date, if any, specified in the Transfer Certificate as its effective date Provided that it is signed by the Agent under Clause 26.3 (Transfer Certificate, delivery and notification) on or before that date.
| 26.5 |
No transfer without Transfer Certificate
|
Except as provided in Clause 26.17 (Security over Lenders’ rights), no
assignment or transfer of any right or obligation of a Lender under any Finance Document is binding on, or effective in relation to, either Borrower, any Security Party, the Agent or the Security Trustee unless it is effected, evidenced or
perfected by a Transfer Certificate.
| 26.6 |
Lender re-organisation
|
However, if a Lender enters into any merger, de-merger or other reorganisation as a result of which all its rights or obligations vest in another
person (the “successor”), the successor shall become a Lender with the same Commitment and Contribution as were held by the predecessor Lender only upon receipt by the Agent of a notice to this effect and
evidence that all rights and obligations have automatically and by operation of law vested in the successor by virtue of the merger, de-merger or other reorganisation, without the need for the execution and delivery of a Transfer Certificate; the
Agent shall in that event inform the Borrowers and the Security Trustee accordingly.
| 26.7 |
Effect of Transfer Certificate
|
A Transfer Certificate takes effect in accordance with English law as follows:
84
| (b) |
the Transferor Lender’s Commitment is discharged to the extent specified in the Transfer Certificate;
|
| (c) |
the Transferee Lender becomes a Lender with the Contribution previously held by the Transferor Lender and a Commitment of an amount specified in the Transfer Certificate;
|
The rights and equities of either Borrower or any Security Party referred to above include, but are not limited to, any right of set off and any
other kind of cross-claim.
| 26.8 |
Maintenance of register of Lenders
|
During the Security Period the Agent shall maintain a register in which it shall record the name, Commitment, Contribution and administrative
details (including the lending office) from time to time of each Lender holding a Transfer Certificate and the effective date (in accordance with Clause 26.4 (Effective Date of Transfer Certificate)) of the
Transfer Certificate; and the Agent shall make the register available for inspection by any Lender, the Security Trustee and the Borrowers during normal banking hours, subject to receiving at least three Business Days’ prior notice.
85
| 26.9 |
Reliance on register of Lenders
|
The entries on that register shall, in the absence of manifest error, be conclusive in determining the identities of the Lenders and the amounts of
their Commitments and Contributions and the effective dates of Transfer Certificates and may be relied upon by the Agent and the other parties to the Finance Documents for all purposes relating to the Finance Documents.
| 26.10 |
Authorisation of Agent to sign Transfer Certificates
|
The Borrowers, the Security Trustee, each Lender irrevocably authorises the Agent to sign Transfer Certificates on its behalf. The Borrower and
each Security Party irrevocably agree to the transfer procedures set out in this Clause 26 (Transfers and Changes in Lending Offices) and to the
extent the cooperation of the Borrowers and/or any Security Party shall be required to effect any such transfer, the Borrowers and such Security Party shall take all necessary steps to afford such cooperation Provided
that this shall not result in any additional costs to the Borrowers or such Security Party.
| 26.11 |
Registration fee
|
In respect of any Transfer Certificate, the Agent shall be entitled to recover a registration fee of $2,500 from the Transferor Lender or (at the
Agent’s option) the Transferee Lender.
| 26.12 |
Sub-participation; subrogation assignment
|
A Lender may sub-participate or include in a securitisation or similar transaction all or any part of its rights and/or obligations under or in
connection with the Finance Documents without the Borrowers’ prior consent and without serving a notice thereon; the Lenders may assign without the Borrowers’ prior consent and without serving a notice thereon all or any part of the rights referred
to in the preceding sentence to an insurer or surety who has become subrogated to them.
| 26.13 |
Sub-division, split, modification or re-tranching
|
Any Lender may, in its sole discretion, sub-divide, split, sever, modify or re-tranche its Contribution into one or more parts subject to the
overall cost of its Contribution to the Borrowers remaining unchanged, if such changes are necessary in order to achieve a successful execution of a securitisation, syndication or any other capital market exit in respect of its Contribution (or any
applicable part thereof).
| 26.14 |
Disclosure of information
|
86
| (i) |
| (c) |
| 26.15 |
Change of lending office
|
A Lender may change its lending office by giving notice to the Agent and the change shall become effective on the later of:
| (a) |
the date on which the Agent receives the notice; and
|
| (b) |
the date, if any, specified in the notice as the date on which the change will come into effect.
|
| 26.16 |
Notification
|
On receiving such a notice, the Agent shall notify the Borrowers and the Security Trustee; and, until the Agent receives such a notice, it shall be
entitled to assume that a Lender is acting through the lending office of which the Agent last had notice.
| 26.17 |
Security over Lenders’ rights
|
In addition to the other rights provided to Lenders under this Clause 26 (Transfers
and Changes in Lending Offices), each Lender may without consulting with or obtaining consent from, either Borrower or any Security Party, at any time charge, assign or otherwise create a Security Interest in or over (whether by way of
collateral or otherwise) all or any of its rights under any Finance Document to secure obligations of that Lender including, without limitation:
| (a) |
any charge, assignment or other Security Interest to secure obligations to a federal reserve or central bank; and
|
87
except that no such charge, assignment or Security Interest shall:
| 26.18 |
Replacement of a Reference Bank
|
If any Reference Bank ceases to be a Lender or is unable on a continuing basis to supply quotations for the purposes of Clause 5 (Interest) then, unless the Borrowers, the Agent and the Majority Lenders otherwise agree, the Agent, acting on the instructions of the Majority Lenders, and after consulting the Borrowers, shall appoint another
bank (whether or not a Lender) to be a replacement Reference Bank; and, when that appointment comes into effect, the first-mentioned Reference Bank’s appointment shall cease to be effective.
| 26.19 |
Securitisation
|
Each Borrower shall, and the Borrowers shall procure that each Security Party will, assist the Agent and/or any Lender in achieving a successful
securitisation (or similar transaction) in respect of the Loan and the Finance Documents and such Security Party’s reasonable costs for providing such assistance shall be met by the relevant Lender. The Borrowers, if
requested by the Agent, shall provide documentation evidencing the purchase price of each Ship when acquired by the relevant Borrower.
| 26.20 |
No additional costs
|
If a Transferor Lender assigns or transfers any of its rights or obligations under the Finance Documents and as a result of circumstances existing
at the date the assignment or transfer occurs, a Borrower or a Security Party would be obliged to make a payment to the Transferee Lender under Clause 26.2 (Transfer by a Lender)
or under that clause as incorporated by reference or in full in any other Finance Document, then the Transferee Lender is only entitled to receive payment under that clause to the same extent as the Transferor Lender would have been if the
assignment or transfer had not occurred.
| 27 |
VARIATIONS AND WAIVERS
|
| 27.1 |
Required consents
|
| (a) |
| (b) |
Any instructions given by the Majority Lenders will be binding on all the Creditor Parties.
|
88
| (c) |
| (i) |
| (ii) |
on behalf of any Creditor Party, any amendment or waiver permitted by any other provision of this Clause 27 (Variations and Waivers).
|
| 27.2 |
Exceptions
|
| (a) |
Subject to Clause 27.4 (Replacement of Screen Rate), an amendment or waiver that has the effect of changing or which relates to:
|
| (i) |
| (ii) |
an extension to the date of payment of any amount under the Finance Documents;
|
| (iii) |
a reduction in the Margin or a reduction in the amount of any payment of principal, interest fees, commission or other amount payable under any of the Finance Documents;
|
| (iv) |
an increase in or an extension of any Lender’s Commitment;
|
| (v) |
any provision which expressly requires the consent of all the Lenders;
|
| (vii) |
any release of any Security Interest, guarantee, indemnities or subordination arrangement created by any Finance Document;
|
| (viii) |
any change of the currency in which the Loan is provided or any amount is payable under any of the Finance Documents;
|
| (ix) |
any change to the Screen Rate pursuant to Clause 27.4 (Replacement of Screen Rate);
|
| (x) |
an extension of the Availability Period; or
|
| (xi) |
may not be effected without the prior written consent of all Lenders.
| (b) |
89
| 27.3 |
Exclusion of other or implied variations
|
Except for a document which satisfies the requirements of any of Clauses 27.1 (Required consents), 27.2 (Exceptions) and 27.4 (Replacement of Screen Rate), no document, no act, course of conduct, failure or neglect to act, delay or acquiescence on the part of the Creditor Parties or any of them (or any person
acting on behalf of any of them) shall result in the Creditor Parties or any of them (or any person acting on behalf of any of them) being taken to have varied, waived, suspended or limited, or being precluded (permanently or temporarily) from
enforcing, relying on or exercising:
| (a) |
a provision of this Agreement or another Finance Document; or
|
| (b) |
an Event of Default; or
|
| (c) |
a breach by a Borrower or a Security Party of an obligation under a Finance Document or the general law; or
|
| (d) |
any right or remedy conferred by any Finance Document or by the general law,
|
and there shall not be implied into any Finance Document any term or condition requiring any such provision to be enforced, or such right or remedy
to be exercised, within a certain or reasonable time.
| 27.4 |
Replacement of Screen Rate
|
| (a) |
If a Screen Rate Replacement Event has occurred in relation to the Screen Rate the Agent (acting on the instructions of all Lenders) shall be entitled to:
|
| (i) |
replace the Screen Rate with a Replacement Benchmark;
|
| (iii) |
amend this Agreement for the purpose of any of:
|
| (A) |
providing for the use of a Replacement Benchmark;
|
| (B) |
aligning any provision to the use of that Replacement Benchmark;
|
| (D) |
implementing market conventions applicable to that Replacement Benchmark;
|
90
| (E) |
providing for appropriate fallback (and market disruption) provisions for that Replacement Benchmark; and
|
| (F) |
adjusting the pricing in accordance with paragraph (ii) above.
|
| 27.5 |
Deemed consent
|
With respect to:
| (a) |
the replacement of the Screen Rate with a Replacement Benchmark in accordance with sub-paragraph (a)(i) of Clause 27.4 (Replacement
of Screen Rate) (and the designation of such benchmark as permitted under sub-paragraphs (b) and (c) of the definition of “Replacement Benchmark”);
|
| (b) |
the adjustment of pricing in accordance with sub-paragraph (a)(ii) of Clause 27.4 (Replacement of Screen Rate);
|
| (c) |
any amendment of any Finance Document as contemplated in sub-paragraph (a)(iii) of Clause 27.4 (Replacement of Screen Rate);
and
|
| (d) |
any other amendment, variation, waiver, suspension or limit requested by a Borrower or any Security Party which requires the approval of all Lenders or the Majority
Lenders (as the case may be),
|
the Agent shall provide each Lender with written notice of such request accompanied by such detailed background information as may
be reasonably necessary (in the opinion of the Agent) to determine whether to approve such action. A Lender shall be deemed to have approved such action if such Lender fails to object to such action by written notice to the Agent within 10 days of
that Lender’s receipt of the Agent’s notice or such other time as the Agent may state in the relevant notice as being the time available for approval of such action.
| 28 |
NOTICES
|
| 28.1 |
General
|
Unless otherwise specifically provided, any notice under or in connection with any Finance Document shall be given by letter or fax; and references
in the Finance Documents to written notices, notices in writing and notices signed by particular persons shall be construed accordingly.
91
| 28.2 |
Addresses for communications
|
A notice by letter or fax shall be sent:
| (c) |
to the Agent and Security Trustee:
|
|
| |
||
| for general matters: |
Hamburg Commercial Bank AG
|
|
|
UB 25 Shipping
|
||
|
Shipping Clients Domestic/International
|
||
|
Xxxxxxx-Xxxxxxxxx-Xxxxx 00
|
||
|
00000 Xxxxxxx
|
||
| Xxxxxxx |
|
Attention: Minas Peramatzis
|
||
|
Fax No: x00 000 0000-000
|
| for credit administrative matters: |
Hamburg Commercial Bank XX
|
|
|
Xxxxxxx-Xxxxxxxxx-Xxxxx 00
|
||
|
00000 Xxxxxxx
|
||
| Xxxxxxx | ||
|
Fax No: x00 00 0000 00000
|
or to such other address as the relevant Party may notify the Agent or, if the relevant Party is the Agent or the Security Trustee, the Borrowers,
the Lenders and the Security Parties.
| 28.3 |
Effective date of notices
|
| (a) |
a notice which is delivered personally or posted shall be deemed to be served, and shall take effect, at the time when it is delivered; and
|
| (b) |
a notice which is sent by fax shall be deemed to be served, and shall take effect, two hours after its transmission is completed.
|
| 28.4 |
Service outside business hours
|
| (a) |
on a day which is not a business day in the place of receipt; or
|
92
| (b) |
on such a business day, but after 5 p.m. local time,
|
the notice shall (subject to Clause 28.5 (Illegible notices)) be deemed to be
served, and shall take effect, at 9 a.m. on the next day which is such a business day.
| 28.5 |
Illegible notices
|
Clauses 28.3 (Effective date of notices) and 28.4 (Service outside business hours) do not apply if the recipient of a notice notifies the sender within one hour after the time at which the notice would otherwise be deemed to
be served that the notice has been received in a form which is illegible in a material respect.
| 28.6 |
Valid notices
|
A notice under or in connection with a Finance Document shall not be invalid by reason that its contents or the manner of serving it do not comply
with the requirements of this Agreement or, where appropriate, any other Finance Document under which it is served if:
| (b) |
in the case of incorrect and/or incomplete contents, it should have been reasonably clear to the party on which the notice was served what the correct or missing particulars should
have been.
|
| 28.7 |
Electronic communication
|
| (a) |
Any communication from the Agent or the other Creditor Parties made by electronic means will be sent unsecured and without electronic signature, however, the Borrowers may request the
Agent and the other Creditor Parties at any time in writing to change the method of electronic communication from unsecured to secured electronic mail communication.
|
| (b) |
The Borrowers hereby acknowledge and accept the risks associated with the use of unsecured electronic mail communication including, without limitation, risk of delay, loss of data,
confidentiality breach, forgery, falsification and malicious software. The Agent and the other Creditor Parties shall not be liable in any way for any loss or damage or any other disadvantage suffered by the Borrowers resulting from such
unsecured electronic mail communication.
|
| (c) |
If the Borrowers (or any of them) or any other Security Party wish to cease all electronic communication, they shall give written notice to the Agent and the other Creditor Parties
accordingly after receipt of which notice the Parties shall cease all electronic communication.
|
| (d) |
For as long as electronic communication is an accepted form of communication, the Parties shall:
|
| (i) |
notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and
|
| (ii) |
notify each other of any change to their respective addresses or any other such information supplied to them; and
|
93
in case electronic communication is sent to recipients with the domain <domain with ending>, the parties shall without undue delay inform each
other if there are changes to the said domain or if electronic communication shall thereafter be sent to individual e-mail addresses.
| (e) |
Each Borrower undertakes and declares that any documents to fulfil the disclosure of the financial circumstances according to Sec. 18 of the German Banking Act (KWG) that were or are
hereinafter submitted to the Hamburg Commercial Bank AG electronically or on data carriers through the Borrowers or any other Security Party or any of them or a third party are complete and correct. It further agrees and declares that:
|
| (i) |
it is irrelevant whether such documents were submitted with or without signature;
|
| (ii) |
documents submitted to Hamburg Commercial Bank AG electronically or on data carriers according to Sec. 18 of the German Banking Act (KWG) have the same legal significance as documents
with signature in paper form; and
|
| (iii) |
until written revocation, the declaration under this Clause 28.7 (Electronic communication) shall remain valid.
|
| 28.8 |
English language
|
Any notice under or in connection with a Finance Document shall be in English.
| 28.9 |
Meaning of “notice”
|
In this Clause 28 (Notices), “notice”
includes any demand, consent, authorisation, approval, instruction, waiver or other communication.
| 29 |
JOINT AND SEVERAL LIABILITY
|
| 29.1 |
General
|
All liabilities and obligations of the Borrowers under this Agreement shall, whether expressed to be so or not, be several and, if and to the extent
consistent with Clause 29.2 (No impairment of Borrower’s obligations), joint.
| 29.2 |
No impairment of Borrower’s obligations
|
The liabilities and obligations of a Borrower shall not be impaired by:
| (a) |
this Agreement being or later becoming void, unenforceable or illegal as regards the other Borrower;
|
| (b) |
any Lender or the Security Trustee entering into any rescheduling, refinancing or other arrangement of any kind with the other Borrower;
|
| (c) |
any Lender or the Security Trustee releasing the other Borrower or any Security Interest created by a Finance Document; or
|
| (d) |
any combination of the foregoing.
|
94
| 29.3 |
Principal debtors
|
Each Borrower declares that it is and will, throughout the Security Period, remain a principal debtor for all amounts owing under this Agreement and
the Finance Documents and neither Borrower shall in any circumstances be construed to be a surety for the obligations of the other Borrower under this Agreement.
| 29.4 |
Subordination
|
Subject to Clause 29.5 (Borrowers’ required action), during the Security Period, neither Borrower shall:
| (b) |
take or enforce any form of security from the other Borrower for such an amount, or in any other way seek to have recourse in respect of such an amount against any asset of the other
Borrower; or
|
| (c) |
set off such an amount against any sum due from it to the other Borrower; or
|
| (d) |
prove or claim for such an amount in any liquidation, administration, arrangement or similar procedure involving the other Borrower or other Security Party; or
|
| (e) |
exercise or assert any combination of the foregoing.
|
| 29.5 |
Borrowers’ required action
|
If during the Security Period, the Agent, by notice to a Borrower, requires it to take any action referred to in paragraphs (a) to (d) of Clause 29.4 (Subordination), in relation to the other Borrower, that Borrower shall take that action as soon as practicable after receiving the Agent’s notice.
| 30 |
SUPPLEMENTAL
|
| 30.1 |
Rights cumulative, non-exclusive
|
The rights and remedies which the Finance Documents give to each Creditor Party are:
| (a) |
cumulative;
|
| (b) |
may be exercised as often as appears expedient; and
|
| (c) |
shall not, unless a Finance Document explicitly and specifically states so, be taken to exclude or limit any right or remedy conferred by any law.
|
| 30.2 |
Severability of provisions
|
If any provision of a Finance Document is or subsequently becomes void, unenforceable or illegal, that shall not affect the validity, enforceability
or legality of the other provisions of that Finance Document or of the provisions of any other Finance Document.
95
| 30.3 |
Counterparts
|
A Finance Document may be executed in any number of counterparts.
| 30.4 |
Third party rights
|
A person who is not a Party has no right under the Contracts (Rights of Third
Parties) Xxx 0000 to enforce or to enjoy the benefit of any term of this Agreement.
| 30.5 |
Benefit and binding effect
|
The terms of this Agreement shall be binding upon, and shall enure to the benefit of, the Parties and their respective (including subsequent)
successors and permitted assigns and transferees.
| 31 |
BAIL-IN
|
Notwithstanding any other term of any Finance Document or any other agreement, arrangement or understanding between the
parties to a Finance Document, each Party acknowledges and accepts that any liability of any party to a Finance Document under or in connection with the Finance Documents may be subject to Bail-In Action by the relevant Resolution Authority and
acknowledges and accepts to be bound by the effect of:
| (a) |
any Bail-In Action in relation to any such liability, including (without limitation):
|
| (i) |
a reduction, in full or in part, in the principal amount, or outstanding amount due (including any accrued but unpaid interest) in respect of any such liability;
|
| (ii) |
a conversion of all, or part of, any such liability into shares or other instruments of ownership that may be issued to, or conferred on, it; and
|
| (iii) |
a cancellation of any such liability; and
|
| (b) |
a variation of any term of any Finance Document to the extent necessary to give effect to any Bail-In Action in relation to any such liability.
|
| 32 |
LAW AND JURISDICTION
|
| 32.1 |
English law
|
This Agreement and any non-contractual obligations arising out of or in connection with it shall be governed by, and construed in accordance with,
English law.
| 32.2 |
Exclusive English jurisdiction
|
Subject to Clause 32.3 (Choice of forum for the exclusive
benefit of the Creditor Parties), the courts of England shall have exclusive jurisdiction to settle any Dispute.
| 32.3 |
Choice of forum for the exclusive benefit of the Creditor Parties
|
Clause 32.2 (Exclusive English jurisdiction) is for the exclusive benefit of the
Creditor Parties, each of which reserves the right:
96
| (a) |
to commence proceedings in relation to any Dispute in the courts of any country other than England and which have or claim jurisdiction to that Dispute; and
|
| (b) |
to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in England or without commencing proceedings in England.
|
Neither Borrower shall commence any proceedings in any country other than England in relation to a Dispute.
| 32.4 |
Process agent
|
Each Borrower irrevocably appoints Hill Xxxxxxxxx Services (London) Limited, at its registered office for the time being presently at The Xxxxxxxxx
Xxxxx, 00 Xxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX, Xxxxxxx to act as its agent to receive and accept on its behalf any process or other document relating to any proceedings in the English courts which are connected with a Dispute.
| 32.5 |
Creditor Party rights unaffected
|
Nothing in this Clause 32 (Law and Jurisdiction) shall exclude or limit any
right which any Creditor Party may have (whether under the law of any country, an international convention or otherwise) with regard to the bringing of proceedings, the service of process, the recognition or enforcement of a judgment or any similar
or related matter in any jurisdiction.
| 32.6 |
Meaning of “proceedings” and “Dispute”
|
In this Clause 32 (Law and Jurisdiction), “proceedings”
means proceedings of any kind, including an application for a provisional or protective measure and a “Dispute” means any dispute arising out of or in connection with this Agreement (including a dispute
relating to the existence, validity or termination of this Agreement) or any non-contractual obligation arising out of or in connection with this Agreement.
THIS AGREEMENT has been entered into on the date stated at the beginning of this Agreement.
97
SCHEDULE 1
|
Lender
|
Lending Office
|
Commitment
(US Dollars)
|
|||
|
Xxxxxxx-Xxxxxxxxx-Xxxxx 00
00000 Xxxxxxx
Xxxxxxx
|
$40,750,000
|
||||
98
SCHEDULE 2
|
To:
|
|
|
|
Xxxxxxx-Xxxxxxxxx-Xxxxx 00
|
|
|
00000 Xxxxxxx
|
|
|
Xxxxxxx
|
|
|
Attention: Loans Administration
|
[●] 2021
DRAWDOWN NOTICE
| 1 |
We refer to the loan agreement (the “Loan Agreement”) dated [] and made between ourselves, as joint and several Borrowers, the Lenders referred
to therein, and yourselves as Agent, Mandated Lead Arranger, Security Trustee in connection with a facility of up to US$40,750,000. Terms defined in the Loan Agreement have their defined meanings when used in this Drawdown Notice.
|
| 2 |
We request to borrow as follows:
|
| (a) |
| (b) |
Drawdown Date: [●];
|
| (c) |
Duration of the first Interest Period shall be [●] months; and
|
| (d) |
Payment instructions: account in our name and numbered [●] with [●] of [●].
|
| 3 |
We represent and warrant that:
|
| (a) |
the representations and warranties in Clause 10 (Representations and Warranties) of the Loan Agreement would
remain true and not misleading if repeated on the date of this Drawdown Notice with reference to the circumstances now existing; and
|
| (b) |
no Event of Default or Potential Event of Default has occurred or will result from the borrowing of that Advance.
|
| 4 |
This Drawdown Notice cannot be revoked without the prior consent of the Majority Lenders.
|
| 5 |
[Name of Signatory]
for and on behalf of
Liono Shipping Co.
Snoopy Shipping Co.
Cinderella Shipping Co. and
Luffy Shipping Co.
99
SCHEDULE 3
The following are the documents referred to in Clause 9.1(a) (Documents, fees
and no default) required before service of the Drawdown Notice.
| 1 |
A duly executed original of:
|
| (a) |
this Agreement;
|
| (b) |
the Corporate Guarantee;
|
| (c) |
the Agency and Trust Agreement;
|
| (d) |
any Subordination Agreement;
|
| (e) |
any Subordinated Debt Security;
|
| (f) |
the Side Letter; and
|
| (g) |
the Account Pledges.
|
| 4 |
The original of any power of attorney under which any Finance Document is executed on behalf of a Borrower, the Corporate Guarantor or any other Security Party.
|
| 5 |
Copies of all consents which either Borrower, the Corporate Guarantor or any other Security Party requires to enter into, or make any payment under, any Finance Document.
|
| 6 |
The originals of any mandates or other documents required in connection with the opening or operation of the Accounts.
|
| 7 |
100
| 11 |
Documents establishing that each Ship is managed by the relevant Approved Manager on terms acceptable to the Lenders.
|
| 12 |
If the Agent so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the
Agent at the Borrowers’ expense.
|
101
The following are the documents referred to in Clause 9.1(b) (Documents, fees and no default)
required before each Drawdown Date. In Part B of this Schedule 3 (Condition Precedent Documents), the following definitions have the following meanings:
| (a) |
“Relevant Borrower” means the Borrower which is or is to become the owner of the Relevant Ship; and
|
| (b) |
“Relevant Ship” means the Ship which is relevant to the Advance being borrowed on the relevant Drawdown Date.
|
| 2 |
Documentary evidence that:
|
| (a) |
the Relevant Ship is definitively and permanently registered in the name of the Relevant Borrower under an Approved Flag in accordance with the laws of the applicable Approved Flag
State;
|
| (b) |
the Relevant Ship is in the absolute and unencumbered ownership of the Relevant Borrower save as contemplated by the Finance Documents;
|
| (e) |
the Relevant Ship is insured in accordance with the provisions of this Agreement and all requirements therein in respect of insurances have been complied with; and
|
| 3 |
In relation to an Approved Manager and the Relevant Ship:
|
| (a) |
the Approved Manager’s Undertaking relative thereto; and
|
102
| (i) |
if the Borrowers request such valuation but fail to select the second Approved Broker within the Drawdown Request Period, then the Initial Market Value
of the Relevant Ship shall be that shown in the sole valuation obtained by the Agent; or
|
| (ii) |
if the Borrowers do select a second Approved Broker within the Drawdown Request Period, the Initial Market Value of the Relevant Ship in such circumstances shall be the arithmetic
mean of both valuations Provided even further that if the difference between such two valuations is greater than 15 per cent., a third valuation shall
be commissioned from a third Approved Broker appointed and selected by the Agent (prepared in accordance with Clause 15.3 (Valuation of Ships))
and the Initial Market Value of the Relevant Ship in such circumstances shall be the arithmetic mean of all three valuations.
|
| 5 |
Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of the relevant Approved Flag State and such other relevant jurisdictions as the
Agent may require.
|
| 6 |
A favourable opinion from an independent insurance consultant acceptable to the Agent on such matters relating to the insurances for the Relevant Ship as the Agent may require.
|
| 8 |
If the Agent so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the
Agent at the Borrowers’ expense.
|
| 9 |
| 10 |
A recent survey report (or comparable inspection report satisfactory to the Agent ) in respect of each Relevant Ship.
|
| 11 |
Copies of any memorandum of agreement in respect of a Relevant Ship (and any addenda thereto) or, as the case may be, shipbuilding contracts of a Relevant Ship.
|
Each of the documents specified in paragraphs 3 and 4 of Part A shall be notarised or legalised by a competent authority acceptable to the
Agent and every other copy document delivered under this Schedule shall be certified as a true and up to date copy by the secretary (or equivalent officer) of the relevant Borrower.
103
SCHEDULE 4
| 4 |
The Additional Cost Rate for any Lender lending from a lending office in the United Kingdom will be calculated by the Agent as follows:
|
per cent. per annumWhere:
| E |
is designed to compensate Lenders for amounts payable under the Fees Rules and is calculated by the Agent as being the average of the most recent rates of charge supplied by the
Reference Banks to the Agent pursuant to paragraph 6 below and expressed in pounds per £1,000,000.
|
| 5 |
For the purposes of this Schedule:
|
| (c) |
“Fees Rules” means the rules on periodic fees contained in the FSA Supervision Manual 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;
|
104
| (e) |
“Tariff Base” has the meaning given to it in, and will be calculated in accordance with, the Fees Rules.
|
| (a) |
the jurisdiction of its lending office; and
|
| (b) |
any other information that the Agent may reasonably require for such purpose.
|
Each Lender shall promptly notify the Agent in writing of any change to the information provided by it pursuant to this paragraph.
| 10 |
105
SCHEDULE 5
The Transferor and the Transferee accept exclusive responsibility for ensuring that this Certificate and the transaction to which it relates comply with all legal and
regulatory requirements applicable to them respectively.
| To: |
Hamburg Commercial Bank AG for itself and for and on behalf of each Borrower, each Security Party, the Security Trustee, each Lender, as defined in the Loan
Agreement referred to below.
|
[●]
| 1 |
This Certificate relates to a Loan Agreement (the “Loan Agreement”) dated [●] and made
between (1) Liono Shipping Co., Snoopy Shipping Co., Cinderella Shipping Co. and Luffy Shipping Co. (together, the “Borrowers”) as joint and several Borrowers, (2) the banks and financial institutions
named therein as Lenders, (3) Hamburg Commercial Bank AG as Agent, (4) Hamburg Commercial Bank AG as Mandated Lead Arranger and (5) Hamburg Commercial Bank AG
as Security Trustee for a loan facility of up to US$40,750,000.
|
| 2 |
In this Certificate, terms defined in the Loan Agreement shall, unless the contrary intention appears, have the same meanings and:
|
“Relevant Parties” means the Agent, each Borrower, each Security
Party, the Security Trustee, each Lender;
“Transferor” means [full name] of [lending office]; and
“Transferee” means [full name] of [lending office].
| 3 |
The effective date of this Certificate is [●] Provided that this Certificate shall not come
into effect unless it is signed by the Agent on or before that date.
|
| 4 |
[The Transferor assigns to the Transferee absolutely all rights and interests (present, future or contingent) which the Transferor has as Lender under or by virtue of the Loan
Agreement and every other Finance Document in relation to [●] per cent. of its Contribution, which percentage represents $[●].
|
106
| 8 |
The Transferor:
|
| (a) |
warrants to the Transferee and each Relevant Party that:
|
| (i) |
the Transferor has full capacity to enter into this transaction and has taken all corporate action and obtained all consents which are in connection with this transaction; and
|
| (ii) |
this Certificate is valid and binding as regards the Transferor;
|
| (b) |
warrants to the Transferee that the Transferor is absolutely entitled, free of encumbrances, to all the rights and interests covered by the assignment in paragraph 4 above; and
|
| 9 |
The Transferee:
|
| (a) |
confirms that it has received a copy of the Loan Agreement and each of the other Finance Documents;
|
| (b) |
agrees that it will have no rights of recourse on any ground against either the Transferor, the Agent, the Mandated Lead Arranger, the Security Trustee, any Lender in the event that:
|
| (i) |
any of the Finance Documents prove to be invalid or ineffective;
|
| (ii) |
either Borrower or any Security Party fails to observe or perform its obligations, or to discharge its liabilities, under any of the Finance Documents;
|
| (d) |
warrants to the Transferor and each Relevant Party that:
|
| (i) |
it has full capacity to enter into this transaction and has taken all corporate action and obtained all consents which it needs to take or obtain in connection with this transaction;
and
|
| (ii) |
this Certificate is valid and binding as regards the Transferee; and
|
| (e) |
confirms the accuracy of the administrative details set out below regarding the Transferee.
|
107
|
[Name of Transferor]
|
[Name of Transferee]
|
|
By:
|
By:
|
|
Date:
|
Date:
|
Agent
Signed for itself and for and on behalf of itself
as Agent and for every other Relevant Party
Hamburg Commercial Bank AG
By:
Date:
108
Administrative Details of Transferee
Name of Transferee:
Lending Office:
Contact Person
(Loan Administration Department):
Telephone:
Fax:
Contact Person
(Credit Administration Department):
Telephone:
Fax:
Account for payments:
This Transfer Certificate alone may not be sufficient to transfer a proportionate share of the Transferor’s interest in the security constituted by the Finance Documents
in the Transferor’s or Transferee’s jurisdiction. It is the responsibility of each Lender to ascertain whether any other documents are required for this purpose.
Paragraph 4 deals with assignment of rights and can be used together with paragraph 5 if the parties have agreed to a combination of assignment of rights and transfer of
obligations.
Paragraph 5 deals with transfer of obligations and should be removed if the parties have agreed to an assignment only.
109
SCHEDULE 6
Know all men by these presents that [Liono Shipping Co.] [Snoopy Shipping Co.] [Cinderella Shipping Co.] [Luffy Shipping Co.] (the “Company”),
a corporation incorporated in the Republic of the Xxxxxxxx Islands and having its registered address at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Xxxxxxxx Xxxxxxx XX00000 irrevocably and by way of security appoints Hamburg Commercial Bank AG (the “Attorney”) of Xxxxxxx-Xxxxxxxxx-Xxxxx 00, X-00000 Xxxxxxx, Xxxxxxx its attorney, to act in the name of the Company and to exercise any right,
entitlement or power of the Company in relation to [name of classification society] (the “Classification Society”) and/or to the classification records of any vessel owned, controlled or operated by the
Company including, without limitation, such powers or entitlement as the Company may have to inspect the class records and any files held by the Classification Society in relation to any such vessel and to require the Classification Society to
provide to the Attorney or to any of its nominees any information, document or file which the Attorney may request
Ratification of actions of attorney. For the avoidance of doubt and without limiting the generality of the above, it is confirmed
that the Company hereby ratifies any action which the Attorney takes or purports to take under this Power of Attorney and the Classification Society shall be entitled to rely hereon without further enquiry.
Delegation. The Attorney may exercise its powers hereunder through any officer or through any nominee and/or may sub-delegate to
any person or persons (including a receiver and persons designated by him) all or any of the powers (including the discretions) conferred on the Attorney hereunder, and may do so on terms authorising successive
sub-delegations.
This Power of Attorney was executed by the Company as a Deed on [date].
|
EXECUTED as a DEED by
|
)
|
|
[Liono] [Snoopy] [Cinderella] [Luffy] Shipping Co.
|
)
|
|
acting by President or Secretary
|
)
|
|
)
|
In the presence of:
110
SCHEDULE 7
|
To:
|
Hamburg Commercial Bank XX
|
|
Xxxxxxx-Xxxxxxxxx-Xxxxx 00
|
|
|
X-00000 Xxxxxxx
|
|
|
Xxxxxxx
|
[●] 2021
Dear Sirs
We refer to a loan agreement dated [●] (the “Loan Agreement”) made between
(amongst others) yourselves and ourselves in relation to a term loan facility of up to $40,750,000.
Words and expressions defined in the Loan Agreement shall have the same meaning when used in this compliance certificate.
Each Borrower represents that no Event of Default or Potential Event of Default has occurred as at the date of this certificate [except for the following matter or event
[set out all material details of matter or event]]. In addition as of [●], each Borrower confirms compliance with the minimum liquidity requirements set out in Clause 11.19 (Minimum Liquidity and Additional Minimum Liquidity) [,] [and] the minimum security cover requirement set out in Clause 15.1 (Minimum required security cover) [and][list
here any other financial covenants which are applicable to the relevant transaction], of the Loan Agreement for the [6-month] period ending on the date of this certificate.
We now certify that, as at [●]:
| (a) |
the aggregate of the Minimum Liquidity standing to the credit of the Liquidity Account is $[●];
|
| (b) |
the Security Cover Ratio is above 130 per cent.; and
|
This certificate shall be governed by, and construed in accordance with, English law.
|
|
|
|
Name: [●]
|
|
|
Title: [senior officer]
|
LIONO SHIPPING CO.
SNOOPY SHIPPING CO.
CINDERELLA SHIPPING CO.
LUFFY SHIPPING CO.
111
|
BORROWERS
|
|
|
SIGNED by
|
)
|
|
)
|
|
|
Its attorney-in-fact
|
)
|
|
for and on behalf of
|
)
|
|
LIONO SHIPPING CO.
|
)
|
|
in the presence of:
|
)
|
|
SIGNED by
|
)
|
|
)
|
|
|
Its attorney-in-fact
|
)
|
|
for and on behalf of
|
)
|
|
SNOOPY SHIPPING CO.
|
)
|
|
in the presence of:
|
)
|
|
SIGNED by
|
)
|
|
)
|
|
|
Its attorney-in-fact
|
)
|
|
for and on behalf of
|
)
|
|
CINDERELLA SHIPPING CO.
|
)
|
|
in the presence of:
|
)
|
|
SIGNED by
|
)
|
|
)
|
|
|
Its attorney-in-fact
|
)
|
|
for and on behalf of
|
)
|
|
LUFFY SHIPPING CO.
|
)
|
|
in the presence of:
|
)
|
|
LENDERS
|
|
|
SIGNED by
|
)
|
|
)
|
|
|
for and on behalf of
|
)
|
|
)
|
|
|
in the presence of:
|
)
|
112
|
AGENT
|
|
|
SIGNED by
|
)
|
|
)
|
|
|
for and on behalf of
|
)
|
|
)
|
|
|
in the presence of:
|
)
|
|
MANDATED LEAD ARRANGER
|
|
|
SIGNED by
|
)
|
|
)
|
|
|
for and on behalf of
|
)
|
|
)
|
|
|
in the presence of:
|
)
|
|
SECURITY TRUSTEE
|
|
|
SIGNED by
|
)
|
|
)
|
|
|
for and on behalf of
|
)
|
|
)
|
|
|
in the presence of:
|
)
|
113
