Private & Confidential
LOAN AGREEMENT
FOR A
US$53,250,000 LOAN
TO
FIGARO SHIPPING LTD
MAGIC STAR SHIPPING CO. LTD
XXXX SHIPPING LTD
VAGUE SHIPPING LTD
ZOOM SHIPPING LTD
AND
OCEAN VILLAGE MARITIME S.A.
PROVIDED BY
THE BANKS SET OUT IN SCHEDULE 1
AGENT, SECURITY AGENT, SWAP PROVIDER AND ACCOUNT BANK
NATIONAL BANK OF GREECE S.A.
[XXXXXX XXXX LOGO]
CONTENTS
CLAUSE PAGE
------ ----
1 Purpose and definitions............................................... 1
2 The Total Commitment and the Advances................................. 15
3 Interest and Interest Periods......................................... 17
4 Repayment and prepayment.............................................. 19
5 Fees, commitment commission and expenses.............................. 21
6 Payments and taxes; accounts and calculations......................... 22
7 Representations and warranties........................................ 25
8 Undertakings.......................................................... 29
9 Conditions............................................................ 33
10 Events of Default..................................................... 34
11 Indemnities........................................................... 38
12 Unlawfulness and increased costs...................................... 39
13 Security, set-off and pro-rata payments............................... 40
14 Accounts.............................................................. 42
15 Assignment, transfer and lending office............................... 44
16 Agent and Security Agent.............................................. 46
17 Notices and other matters............................................. 47
18 Governing law and jurisdiction........................................ 49
Schedule 1 The Banks and their Commitments................................. 51
Schedule 2 Form of Drawdown Notice......................................... 52
Schedule 3 Documents and evidence required as conditions precedent to the
Loan being made......................................................... 54
Schedule 4 Form of Transfer Certificate.................................... 63
Schedule 5 Form of Mortgage................................................ 67
Schedule 6 Form of Deed of Covenant........................................ 68
Schedule 7 Form of Manager's Undertaking................................... 69
Schedule 8 Form of Master Swap Agreement................................... 70
THIS AGREEMENT is dated 24 July 2003 and made BETWEEN:
(1) FIGARO SHIPPING LTD, MAGIC STAR SHIPPING CO. LTD, XXXX SHIPPING LTD,
VAGUE SHIPPING LTD, ZOOM SHIPPING LTD, and OCEAN VILLAGE MARITIME
S.A., as joint and several Borrowers;
(2) NATIONAL BANK OF GREECE S.A. as Agent, Security Agent, Account Bank
and Swap Provider; and
(3) THE BANKS whose names are set out in schedule 1 as Banks.
IT IS AGREED as follows:
1 PURPOSE AND DEFINITIONS
1.1 PURPOSE
This Agreement sets out the terms and conditions upon and subject to
which the Banks agree, according to their several obligations, to make
available to the Borrowers jointly and severally, in up to two (2)
Advances, a loan of up to $53,250,000 for the purpose of refinancing
the Existing Indebtedness and financing part of the cost of the
construction and acquisition of the Newbuilding.
1.2 DEFINITIONS
In this Agreement, unless the context otherwise requires:
"ACCOUNTS" means, together, the Operating Accounts and the Retention
Account and "ACCOUNT" means any of them;
"ACCOUNT BANK" means National Bank of Greece S.A. of 00 Xxxxxx Xxxxxx,
000 00 Xxxxxx, Xxxxxx acting for the purposes of this Agreement
through its branch at 0 Xxxxxxxxxxx Xxxxxx & Xxxx Xxxxxxx, 000 00
Xxxxxxx, Xxxxxx (or of such other address as may last have been
notified to the other parties to this Agreement pursuant to clause
17.1.3) or such other bank as may be designated by the Agent as the
Account Bank for the purposes of this Agreement and includes its
successors in title;
"ADVANCE" means each borrowing of a proportion of the Total Commitment
by the Borrowers or (as the context may require) the principal amount
of such borrowing and means:
(a) in relation to the Ships (other than the Newbuilding), the
Refinancing Advance;
(b) in relation to the Newbuilding, the Newbuilding Advance;
and "ADVANCES" means either or both of them;
"AGENCY AGREEMENT" means the agency agreement executed or (as the
context may require) to be executed between the Banks, the Agent, the
Security Agent, the Account Bank and the Swap Provider in such form as
the Agent may require in its sole discretion;
"AGENT" means National Bank of Greece S.A. of 00 Xxxxxx Xxxxxx, 000 00
Xxxxxx, Xxxxxx acting for the purposes of this Agreement through its
branch at 0 Xxxxxxxxxxx Xxxxxx & Xxxx Xxxxxxx, 000 00 Xxxxxxx, Xxxxxx
(or of such other address as may last have been notified to the other
parties to this Agreement pursuant to clause 17.1.3) or such other
person as may be appointed as agent by the Banks and the Swap Provider
pursuant to the relevant provisions of the Agency Agreement;
"AVAILABLE COMMITMENT" means, in relation to a Bank, the amount of its
Commitment less the amount of its Contribution;
1
"BALLOON INSTALMENT" means:
(a) in respect of the Refinancing Advance, the Refinancing Balloon as
defined in clause 4.1.1 as the same may be reduced pursuant to
the terms of this Agreement; and
(b) in respect of the Newbuilding Advance, the Newbuilding Balloon as
defined in clause 4.1.2 as the same may have been increased by
any Deferred Amounts pursuant to clause 4.4 or reduced pursuant
to the terms of this Agreement;
"BANKS" means the banks listed in schedule 1 and includes their
respective successors in title and Transferee Banks and "BANK" means
any of them;
"BANKING DAY" means a day on which dealings in deposits in Dollars are
carried on in the London Interbank Eurocurrency Market and (other than
Saturday or Sunday) on which banks are open for business in London,
Piraeus and New York City (or any other relevant place of payment
under clause 6);
"BORROWED MONEY" means Indebtedness in respect of (i) money borrowed
or raised and debit balances at banks, (ii) any bond, note, loan
stock, debenture OR similar debt instrument, (iii) acceptance or
documentary credit facilities, (iv) receivables sold or discounted
(otherwise than on a non-recourse basis), (v) deferred payments for
assets or services acquired, (vi) finance leases and hire purchase
contracts, (vii) swaps, forward exchange contracts, futures and other
derivatives, (viii) any other transaction (including without
limitation forward sale or purchase agreements) having the commercial
effect of a borrowing or raising of money or of any of (ii) to (vii)
above and (ix) guarantees in respect of Indebtedness of any person
falling within any of (i) to (viii) above;
"BORROWERS" means, together, the Figaro Borrower, the Magic Borrower,
the Xxxx Borrower, the Vague Borrower, the Zoom Borrower and the Ocean
Borrower and "BORROWER" means any of them;
"BORROWERS GROUP" means the Borrowers and their Related Companies;
"BORROWERS' SECURITY DOCUMENTS" means, at any relevant time, such of
the Security Documents as shall have been executed by any of the
Borrowers at such time;
"BUILDER" means STX Shipbuilding Co., Ltd. (formerly known as Daedong
Shipbuilding Co., Ltd.) of Korea and includes its successors in title;
"CASUALTY AMOUNT" means:
(a) in relation to each of the Ships (other than the Newbuilding),
$300,000 or the equivalent in any other currency; or
(b) in relation to the Newbuilding, $500,000 or the equivalent in any
other currency;
"CLASSIFICATION" means, in relation to each Ship, the highest class
available for a vessel of her type with the relevant Classification
Society or such other classification as the Agent shall, at the
request of a Borrower, have agreed in writing shall be treated as the
Classification in relation to such Borrower's Ship for the purposes of
the relevant Ship Security Documents;
"CLASSIFICATION SOCIETY" means Lloyd's Register of Shipping or such
other classification society which the Agent shall, at the request of
a Borrower, have agreed in writing shall be treated as the
Classification Society in relation to such Borrower's Ship for the
purposes of the relevant Ship Security Documents;
"CODE" means the International Safety Management Code for the Safe
Operation of Ships and for Pollution Prevention constituted pursuant
to Resolution A. 741 (18) of the International Maritime Organisation
and incorporated into the Safety of Life at Sea Convention and
includes any amendments or extensions thereto and any regulation
issued pursuant thereto;
2
"COMMITMENT" means, in relation to each Bank the amount set out
opposite its name in the column headed "COMMITMENT" in schedule 1
and/or, in the case of a Transferee Bank, the amount transferred as
specified in the relevant Transfer Certificate, as reduced in each
case by any relevant term of this Agreement;
"COMPULSORY ACQUISITION" means requisition for title or other
compulsory acquisition, requisition, appropriation, expropriation,
deprivation, forfeiture or confiscation for any reason of a Ship by
any Government Entity or other competent authority, whether de jure or
de facto, but shall exclude requisition for use or hire not involving
requisition of title;
"CONFIRMATION" shall have, in relation to any continuing Designated
Transaction, the meaning ascribed to it in the Master Swap Agreement;
"CONTRACT" means the shipbuilding contract dated 23 May 2001 made
between Liquimar Tankers Management Inc. ("LIQUIMAR") as buyer and the
Builder as builder as novated by a novation agreement dated 12 March
2002 made between the Builder, Liquimar and the Ocean Borrower and as
it may be further amended and supplemented from time to time with the
prior written consent of the Security Agent, relating to the
construction and sale by the Builder and to the purchase by the Ocean
Borrower of the Newbuilding;
"CONTRACT PRICE" means the price payable by the Ocean Borrower to the
Builder pursuant to the terms of the Contract, being Thirty four
million five hundred thousand Dollars ($34,500,000) as the same be
adjusted pursuant to the terms of the Contract;
"CONTRIBUTION" means, in relation to each Bank, the principal amount
of the Loan owing to such Bank at any relevant time;
"CREDITORS" means, together, the Agent, the Security Agent, the
Account Bank, the Swap Provider and the Banks and "CREDITOR" means any
of them;
"DEED OF COVENANT" means:
(a) in relation to the Figaro Ship, the Figaro Deed of Covenant; or
(b) in relation to the Magic Ship, the Magic Deed of Covenant; or
(c) in relation to the Xxxx Ship, the Xxxx Deed of Covenant; or
(d) in relation to the Vague Ship, the Vague Deed of Covenant; or
(e) in relation to the Zoom Ship, the Zoom Deed of Covenant; or
(f) in relation to the Newbuilding, the Ocean Deed of Covenant,
and "DEEDS OF COVENANT" means any or all of them;
"DEFAULT" means any Event of Default or any event or circumstance
which with the giving of notice or lapse of time or the satisfaction
of any other condition (or any combination thereof) would constitute
an Event of Default;
"DEFERRED AMOUNT" means either of the repayment instalments which may
have been deferred pursuant to clause 4.4 and "DEFERRED AMOUNTS" means
either or both of them;
"DELIVERY" means the delivery of the Newbuilding by the Builder and
the acceptance of the Newbuilding by the Ocean Borrower pursuant to
the Contract;
"DELIVERY DATE" means the date upon which Delivery occurs;
3
"DELIVERY TRANCHE" means a tranche of the Newbuilding Advance in the
amount of up to $25,875,000;
"DESIGNATED TRANSACTION" means a Transaction which fulfils the
following requirements:
(a) it is entered into by the Borrowers pursuant to the Master Swap
Agreement with the Swap Provider as contemplated by clause 2.9;
and
(b) its purpose is the hedging of the Borrowers' exposure under this
Agreement to fluctuations of LIBOR arising from the funding of
the Loan (or any part thereof) for a period expiring no later
than the final Repayment Date for the Loan or the relevant part
thereof;
"DOC" means a document of compliance issued to an Operator in
accordance with rule 13 of the Code;
"DOLLARS" and "$" mean the lawful currency of the United States of
America and in respect of all payments to be made under any of the
Security Documents mean funds which are for same day settlement in the
New York Clearing House Interbank Payments System (or such other US
dollar funds as may at the relevant time be customary for the
settlement of international banking transactions denominated in US
dollars);
"DRAWDOWN DATE" means any date, being a Banking Day falling during the
relevant Drawdown Period, on which an Advance is, or is to be, made
available;
"DRAWDOWN NOTICE" means, in relation to each Advance, a notice
substantially in the terms of schedule 2 in respect of such Advance;
"DRAWDOWN PERIOD" means, in relation to each Advance, the period
commencing on the date of this Agreement and ending on the relevant
Termination Date or the period ending on such earlier date (if any)
(a) on which the aggregate amount of the Advances is equal to the
Total Commitment or (b) on which the Total Commitment is reduced to
zero pursuant to clauses 4.3, 10.2 or 12 or (c) in the case of the
Newbuilding Advance, on which Delivery occurs;
"EARLY TERMINATION DATE" shall have, in relation to any continuing
Designated Transaction, the meaning ascribed to it in the Master Swap
Agreement;
"EARNINGS" means all moneys whatsoever from time to time due or
payable to a Borrower during the Security Period arising out of the
use or operation of such Borrower's Ship including (but without
limiting the generality of the foregoing) all freight, hire and
passage moneys, income arising under pooling arrangements,
compensation payable to such Borrower in event of requisition of such
Borrower's Ship for hire, remuneration for salvage and towage
services, demurrage and detention moneys, and damages for breach (or
payments for variation or termination) of any charterparty or other
contract for the employment of such Ship;
"ENCUMBRANCE" means any mortgage, charge (whether fixed or floating),
pledge, lien, hypothecation, assignment, trust arrangement or security
interest or other encumbrance of any kind securing any obligation of
any person or any type of preferential arrangement (including without
limitation title transfer and/or retention arrangements having a
similar effect);
"ENVIRONMENTAL CLAIM" means:
(a) any and all enforcement, clean-up, removal or other governmental
or regulatory action or order or claim instituted or made
pursuant to any Environmental Law or resulting from a Spill;
(b) any claim made by any other person to a Spill;
4
"ENVIRONMENTAL INCIDENT" means any Spill:
(a) from any Fleet Vessel or
(b) from any other vessel in circumstances where:
(i) any Fleet Vessel or its owner, operator or manager may be
liable for Environmental Claims arising from the Spill
(other than Environmental Claims arising and fully satisfied
before the date of this Agreement); and/or
(ii) any Fleet Vessel may be arrested or attached in connection
with any such Environmental Claims;
"ENVIRONMENTAL LAWS" means all laws, regulations and conventions
concerning pollution or protection of human health or the environment;
"EVENT OF DEFAULT" means any of the events or circumstances described
in clause 10.1;
"EXISTING INDEBTEDNESS" means the aggregate principal amount owing by
the Borrowers (other than the Ocean Borrower) to the National Bank of
Greece S.A. pursuant to a loan agreement dated 11 April 2003 and made
between (1) the Borrowers (other than the Ocean Borrower) and (2) the
National Bank of Greece S.A.;
"FIGARO BORROWER" means Figaro Shipping Ltd of 00/00 Xxxxxxxx
Xxxxxxxxx, Xxxxxx Xxxxxx, Xxxxxxxx, Xxxxx and includes its successors
in title;
"FIGARO DEED OF COVENANT" means the deed of covenant collateral to the
Figaro Mortgage executed or (as the context may require) to be
executed by the Figaro Borrower in favour of the Security Agent in the
form set out in schedule 6;
"FIGARO MANAGEMENT AGREEMENT" means the agreement dated 11 April 2003
in respect of the Figaro Ship made between the Figaro Borrower and the
Manager or any other agreement previously approved in writing by the
Agent between the Figaro Borrower and the Manager providing (inter
alia) for the Manager to manage the Figaro Ship;
"FIGARO MORTGAGE" means a first priority Maltese statutory mortgage of
the Figaro Ship executed or (as the context may require) to be
executed by the Figaro Borrower in favour of the Security Agent in the
form set out in schedule 5;
"FIGARO OPERATING ACCOUNT" means an interest bearing Dollar account of
the Figaro Borrower opened or (as the context may require) to be
opened with the Account Bank and includes any sub-accounts thereof and
any other account designated in writing by the Agent to be a Figaro
Operating Account for the purpose of this Agreement;
"FIGARO SHIP" means the vessel m.v. Alexandros owned by the Figaro
Borrower and registered through the Registry under the laws and flag
of the Flag State;
"FLAG STATE" means, in the case of each Ship, Malta, or such other
state or territory designated in writing by the Agent, at the request
of a Borrower, as being the "FLAG STATE" of such Borrower's Ship for
the purposes of the Security Documents;
"FLEET VESSEL" means each of the Ships and any other vessel owned,
operated, managed or crewed by any member of the Borrowers' Group;
"GOVERNMENT ENTITY" means and includes (whether having a distinct
legal personality or not) any national or local government authority,
board, commission, department, division, organ, instrumentality, court
or agency and any association, organisation or institution of which
any of the foregoing is a member or to whose jurisdiction any of the
foregoing is subject or in whose activities any of the foregoing is a
participant;
5
"INDEBTEDNESS" means any obligation for the payment or repayment of
money, whether as principal or as surety and whether present or
future, actual or contingent;
"INSURANCES" means all policies and contracts of insurance (which
expression includes all entries of a Ship in a protection and
indemnity or war risks association) which are from time to time during
the Security Period in place or taken out or entered into by or for
the benefit of the relevant Borrower (whether in the sole name of such
Borrower, or in the joint names of such Borrower and the Agent or
otherwise) in respect of such Borrower's Ship and her Earnings or
otherwise howsoever in connection with such Borrower's Ship and all
benefits thereof (including claims of whatsoever nature and return of
premiums);
"INTEREST PAYMENT DATE" means the last day of an Interest Period;
"INTEREST PERIOD" means, in relation to either Advance or, as the case
may be, the Loan, each period for the calculation of interest in
respect of such Advance or the Loan ascertained in accordance with
clauses 3.2 and 3.3;
"LIBOR" means in relation to any amount and for any period the offered
rate (if any) for deposits of the currency in question for such amount
and for such period which is:
(a) the rate, for such period, appearing on page 3750 of the Telerate
screen at or about 11:00 a.m. London time on the Quotation Date
(or, if the Agent shall have made a determination pursuant to
clause 3.6, such later time (not being later than 1:00 p.m.
(London time) on the first day of such period) as the Agent may
determine); or
(b) if the relevant page is not displayed on the Telerate screen or
the Telerate screen is not operating at the relevant time or if
no such offered rate appears on the Telerate screen, the rate
quoted to the Agent by the Reference Bank at the request of the
Agent as the Reference Bank's offered rate for deposits of the
currency in question in an amount approximately equal to the
amount in relation to which LIBOR is to be determined for a
period equivalent to such period to prime banks in the London
Interbank Market at or about 11 a.m. London time on the Quotation
Date (or, if the Agent shall have made a determination pursuant
to clause 3.6, such later time (not being later than 1:00 p.m.
(London time) on the first day of such period) as the Agent may
determine);
"LOAN" means the aggregate principal amount owing to the Banks under
this Agreement at any relevant time;
"LTC CONTRACT" means a time charterparty entered into between the
Ocean Borrower as owner and a third party charterer (which is not a
Related Company of the Ocean Borrower or of any other Security Party
and which is acceptable to the Banks in their sole discretion) in
respect of the Newbuilding having a term of at least twenty-four (24)
months and with such charterhire and otherwise on such terms and
conditions as shall be in all respects acceptable to the Banks in
their sole discretion;
"LTC CONTRACT ASSIGNMENT" means the first priority specific assignment
of the LTC Contract executed or (as the context may require) to be
executed by the Ocean Borrower in favour of the Security Agent in such
form as the Security Agent may require;
"LTC TRANCHE" means a tranche of the Newbuilding Advance in the amount
of up to $1,725,000;
"MAGIC BORROWER" means Magic Star Shipping Co. Ltd of 00/00 Xxxxxxxx
Xxxxxxxxx, Xxxxxx Xxxxxx, Xxxxxxxx, Xxxxx and includes its successors
in title;
"MAGIC DEED OF COVENANT" means the deed of covenant collateral to the
Magic Mortgage executed or (as the context may require) to be executed
by the Magic Borrower in favour of the Security Agent in the form set
out in schedule 6;
6
"MAGIC MANAGEMENT AGREEMENT" means the agreement dated 11 April 2003
in respect of the Magic Ship made between the Magic Borrower and the
Manager or any other agreement previously approved in writing by the
Agent between the Magic Borrower and the Manager providing (inter
alia) for the Manager to manage the Magic Ship;
"MAGIC MORTGAGE" means a first priority Maltese statutory mortgage of
the Magic Ship executed or (as the context may require) to be executed
by the Magic Borrower in favour of the Security Agent in the form set
out in schedule 5;
"MAGIC OPERATING ACCOUNT" means an interest bearing Dollar account of
the Magic Borrower opened or (as the context may require) to be opened
with the Account Bank and includes any sub-accounts thereof and any
other account designated in writing by the Agent to be a Magic
Operating Account for the purpose of this Agreement;
"MAGIC SHIP" means the vessel m.v. Aristotelis owned by the Magic
Borrower and registered through the Registry under the laws and flag
of the Flag State;
"MAJORITY BANKS" means at any relevant time:
(a) when no more than two Banks are party to this Agreement, all
Banks; and
(b) when more than two Banks are party to this Agreement, Banks (i)
the aggregate of whose Contributions exceeds seventy per cent
(70%) of the Loan or (ii) (if no principal amounts are
outstanding under this Agreement) the aggregate of whose
Commitments exceeds seventy per cent (70%) of the Total
Commitment;
"MANAGEMENT AGREEMENT" means:
(a) in relation to the Figaro Ship, the Figaro Management Agreement;
or
(b) in relation to the Magic Ship, the Magic Management Agreement; or
(c) in relation to the Xxxx Ship, the Xxxx Management Agreement; or
(d) in relation to the Vague Ship, the Vague Management Agreement; or
(e) in relation to the Zoom Ship, the Zoom Management Agreement; or
(f) in relation to the Newbuilding, the Ocean Management Agreement,
and "MANAGEMENT AGREEMENTS" means any or all of them;
"MANAGER" means Capital Ship Management Corp. of Panama, Republic of
Panama or any other person appointed by a Borrower, with the prior
written consent of the Agent, as the manager of such Borrower's Ship
and includes its successors in title;
"MANAGER'S UNDERTAKINGS" means, collectively, all of the manager's
undertakings and assignments executed or (as the context may require)
to be executed by the Manager in favour of the Security Agent in
substantially the form set out in schedule 7 (or such other form as
the Agent in its sole discretion may require) and, singly, each a
"MANAGER'S UNDERTAKING";
"MARGIN" means:
(a) in relation to the Refinancing Advance, one point four per cent
(1.4%) per annum; and
(b) in relation to the Newbuilding Advance, one point three seven
five per cent (1.375%) per annum;
7
"MASTER SWAP AGREEMENT" means the agreement made or (as the context
may require) to be made between the Swap Provider and the Borrowers
comprising an ISDA Master Agreement (including the Schedule thereto)
in the form set out in schedule 8 and includes any Designated
Transactions from time to time entered into and any Confirmations (as
defined therein) from time to time exchanged thereunder and governed
thereby;
"MONTH" means a period beginning in one calendar month and ending in
the next calendar month on the day numerically corresponding to the
day of the calendar month on which it started, provided that (a) if
the period started on the last Banking Day in a calendar month or if
there is no such numerically corresponding day, it shall end on the
last Banking Day in such next calendar month and (b) if such
numerically corresponding day is not a Banking Day, the period shall
end on the next following Banking Day in the same calendar month but
if there is no such Banking Day it shall end on the preceding Banking
Day and "months" and "monthly" shall be construed accordingly;
"MORTGAGE" means:
(a) in relation to the Figaro Ship, the Figaro Mortgage; or
(b) in relation to the Magic Ship, the Magic Mortgage; or
(c) in relation to the Xxxx Ship, the Xxxx Mortgage; or
(d) in relation to the Vague Ship, the Vague Mortgage; or
(e) in relation to the Zoom Ship, the Zoom Mortgage; or
(f) in relation to the Newbuilding, the Ocean Mortgage,
and "MORTGAGES" means any or all of them;
"MORTGAGED SHIP" means, at any relevant time, any Ship which is at
such time subject to a Mortgage and/or the Earnings, Insurances and
Requisition Compensation (as defined in the relevant Ship Security
Documents) of which are subject to an Encumbrance pursuant to the
relevant Security Documents and a Ship shall for the purposes of this
Agreement be deemed to be a Mortgaged Ship as from whichever shall be
the earlier of (a) the drawdown of the relevant Advance and (b) the
date that the Mortgage of that Ship shall have been executed and
registered in accordance with this Agreement until whichever shall be
the earlier of (i) the payment in full of the amount required to be
paid by the Borrowers pursuant to clause 4.3 following the sale or
Total Loss of such Ship and (ii) the date on which all moneys owing
under the Security Documents have been repaid in full;
"NEWBUILDING" means a 70,500 dwt crude/product tanker vessel known as
Hull No. 1099 to be constructed by the Builder in accordance with the
provisions of the Contract and to be registered on Delivery in the
ownership of the Ocean Borrower through the Registry under the laws
and flag of the Flag State;
"NEWBUILDING ADVANCE" means an Advance of up to $27,600,000
(comprising the Delivery Tranche and the LTC Tranche) which is to be
made available to the Borrowers in relation to the financing in part
of the Contract Price;
"NEWBUILDING BALLOON" shall have the meaning given to it in clause
4.1.2;
"XXXX BORROWER" means Xxxx Shipping Ltd of 00/00 Xxxxxxxx Xxxxxxxxx,
Xxxxxx Xxxxxx, Xxxxxxxx, Xxxxx and includes its successors in title;
"XXXX DEED OF COVENANT" means the deed of covenant collateral to the
Xxxx Mortgage executed or (as the context may require) to be executed
by the Xxxx Borrower in favour of the Security Agent in the form set
out in schedule 4;
8
"XXXX MANAGEMENT AGREEMENT" means the agreement dated 11 April 2003 in
respect of the Xxxx Ship made between the Xxxx Borrower and the
Manager or any other agreement previously approved in writing by the
Agent between the Xxxx Borrower and the Manager providing (inter alia)
for the Manager to manage the Xxxx Ship;
"XXXX MORTGAGE" means a first priority Maltese statutory mortgage of
the Xxxx Ship executed or (as the context may require) to be executed
by the Xxxx Borrower in favour of the Security Agent in the form set
out in schedule 5;
"XXXX OPERATING ACCOUNT" means an interest bearing Dollar account of
the Xxxx Borrower opened or (as the context may require) to be opened
with the Account Bank and includes any sub-accounts thereof and any
other account designated in writing by the Agent to be a Xxxx
Operating Account for the purpose of this Agreement;
"XXXX SHIP" means the vessel m.v. Aktor owned by the Xxxx Borrower and
registered through the Registry under the laws and flag of the Flag
State;
"OCEAN BORROWER" means Ocean Village Maritime S.A. of 53rd Street,
Ubanizacion Obarrio, Swiss Tower, 16th Floor, Panama, Republic of
Panama and includes it successors in title;
"OCEAN DEED OF COVENANT" means the deed of covenant or, as the case
may be, general assignment collateral to the Ocean Mortgage
(containing (inter alia) an assignment by the Ocean Borrower of all
its rights, title and interest in and to the earnings, insurances and
requisition compensation of the Newbuilding in favour of the Security
Agent) executed or (as the context may require) to be executed by the
Ocean Borrower in favour of the Security Agent in such form as the
Agent (acting on the instructions of the Majority Banks) may require
in its absolute discretion;
"OCEAN MANAGEMENT AGREEMENT" means the agreement made or (as the
context may require) to be made between the Ocean Borrower and the
Manager previously approved in writing by the Agent between the Ocean
Borrower and the Manager providing (inter alia) for the Manager to
manage the Newbuilding;
"OCEAN MORTGAGE" means a first priority statutory mortgage or a first
preferred mortgage, as the case may be, of the Newbuilding executed or
(as the context may require) to be executed by the Ocean Borrower in
favour of the Creditors or any of them in such form as the Agent
(acting on the instructions of the Majority Banks) may require in its
absolute discretion;
"OCEAN OPERATING ACCOUNT" means any interest bearing Dollar account of
the Ocean Borrower opened or (as the context may require) to be opened
with the Account Bank and includes any sub-accounts thereof and any
other account designated in writing by the Agent to be an Ocean
Operating Account for the purpose of this Agreement;
"OPERATING ACCOUNT" means
(a) in relation to the Figaro Ship, the Figaro Operating Account; or
(b) in relation to the Magic Ship, the Magic Operating Account; or
(c) in relation to the Xxxx Ship, the Xxxx Operating Account; or
(d) in relation to the Vague Ship, the Vague Operating Account; or
(e) in relation to the Zoom Ship, the Zoom Operating Account; or
(f) in relation to the Newbuilding, the Ocean Operating Account,
and "OPERATING ACCOUNTS" means any or all of them;
9
"OPERATOR" means any person who is from time to time during the
Security Period (as defined in each Mortgage) concerned in the
operation of a Ship and falls within the definition of "Company" set
out in rule 1.1.2 of the Code;
"PERMITTED ENCUMBRANCE" means any Encumbrance in favour of the
Creditors or any of them created pursuant to the Security Documents
and Permitted Liens;
"PERMITTED LIENS" means any lien on a Ship for master's, officer's or
crew's wages outstanding in the ordinary course of trading, any lien
for salvage and any Ship repairer's or outfitter's possessory lien for
a sum not (except with the prior written consent of the Agent)
exceeding $300,000;
"POLLUTANT" means and includes oil and its products, any other
polluting, toxic or hazardous substance and any other substance whose
release into the environment is regulated or penalised by
Environmental Laws;
"QUOTATION DATE" means, in respect of any period in respect of which
LIBOR falls to be determined under this Agreement, the second Banking
Day before the first day of such period;
"REFERENCE BANK" means the London Branch of National Bank of Greece
S.A. situated at 00 Xx. Xxxx Xxx, Xxxxxx XX0X 0XX, Xxxxxxx;
"REFINANCING ADVANCE" means an Advance of up to $25,650,000 which is
to be made available to the Borrowers in relation to the refinancing
of the Existing Indebtedness;
"REFINANCING BALLOON" shall have the meaning given to it in clause
4.1.1;
"REGISTRY" means such registrar, commissioner or representative of the
relevant Flag State who is duly authorised and empowered to register
the relevant Ship, the relevant Borrower's title to such Ship and the
relevant Mortgage under the laws and flag of the relevant Flag State
through the relevant Registry;
"REGULATORY AGENCY" means the Government Entity or other organisation
in the Flag State which has been designated by the government of the
Flag State to implement and/or administer and/or enforce the
provisions of the Code;
"RELATED COMPANY" of a person means at any relevant time, any person,
company or other entity which is at such time ultimately beneficially
owned by the same financial interests as the Borrowers at the date of
this Agreement;
"RELEVANT JURISDICTION" means any jurisdiction in which or where any
Security Party is incorporated, resident, domiciled, has a permanent
establishment, carries on, or has a place of business or is otherwise
effectively connected;
"REPAYMENT DATES" means, subject to clauses 4.4 and 6.3:
(a) in the case of the Refinancing Advance, the date falling six (6)
months after the Drawdown Date of such Advance and each of the
dates falling at six (6) monthly intervals thereafter up to and
including the date falling forty eight (48) months after such
Drawdown Date; and
(b) in the case of the Newbuilding Advance, the date falling six (6)
months after the Drawdown Date of such Advance, and each of the
dates falling at six (6) monthly intervals thereafter up to and
including the date falling one hundred and twenty (120) months
after such Drawdown Date;
"RESTRICTED COMPANY" means the Borrowers, their Related Companies and
the other Security Parties and their respective Related Companies;
10
"RETENTION ACCOUNT" means an interest-bearing Dollar account of the
Borrowers opened or (as the context may require) to be opened jointly
by the Borrowers with the Account Bank and includes any sub-accounts
thereof and any other account designated in writing by the Agent to be
a Retention Account for the purposes of this Agreement;
"RETENTION ACCOUNT PLEDGE" means the first priority pledge executed or
(as the context may require) to be executed by the Borrowers in favour
of the Security Agent in respect of the Retention Account in such form
as the Agent may require in its sole discretion;
"RETENTION AMOUNT" means, in relation to any Retention Date, such sum
as shall be the aggregate of:
(a) one-sixth (1/6th) of the repayment instalment falling due for
payment pursuant to clause 4.1 (as the same may have been reduced
by any prepayment) on the next Repayment Date for the relevant
Advance after the relevant Retention Date unless such instalment
has been deferred pursuant to clause 4.4; and
(b) the applicable fraction (as hereinafter defined) of the aggregate
amount of interest falling due for payment in respect of each
part of the relevant Advance during and at the end of each
Interest Period for such Advance current at the relevant
Retention Date and, for this purpose, the expression "APPLICABLE
FRACTION" in relation to each Interest Period shall mean a
fraction having a numerator of one and a denominator equal to the
number of Retention Dates falling within the relevant Interest
Period;
"RETENTION DATES" means, in relation to each Advance, the date falling
thirty (30) days after the Drawdown Date of such Advance and each of
the dates falling at monthly intervals after such date and prior to
the final Repayment Date of such Advance;
"SECURITY AGENT" means National Bank of Greece S.A. of 00 Xxxxxx
Xxxxxx, 000 00 Xxxxxx, Xxxxxx acting for the purposes of this
Agreement through its branch at 0 Xxxxxxxxxxx Xxxxxx & Xxxx Xxxxxxx,
000 00 Xxxxxxx, Xxxxxx (or of such other address as may last have been
notified to the other parties to this Agreement pursuant to clause
17.1.3) or such other person as may be appointed as security agent and
trustee by the Banks, the Agent, the Swap Provider and the Account
Bank pursuant to the relevant provisions of the Agency Agreement;
"SECURITY DOCUMENTS" means this Agreement, the Master Swap Agreement,
the Mortgages, the Deeds of Covenant, the Retention Account Pledge,
the Manager's Undertakings, the Agency Agreement, the LTC Contract
Assignment and any other documents as may have been or shall from time
to time after the date of this Agreement be executed to guarantee
and/or secure all or any part of the Loan, interest thereon and other
moneys from time to time owing by the Borrowers pursuant to this
Agreement (whether or not any such document also secures moneys from
time to time owing pursuant to any other document or agreement);
"SECURITY PARTY" means the Borrowers, the Manager or any other person
who may at any time be a party to any of the Security Documents (other
than the Creditors);
"SECURITY REQUIREMENT" means the amount in Dollars (as certified by
the Agent whose certificate shall, in the absence of manifest error,
be conclusive and binding on the Borrowers and the Banks) which is at
any relevant time (a) when there is no Swap Exposure, One hundred and
seventeen point six per cent (117.6%) of the Loan and (b) when there
is Swap Exposure, One hundred and eleven point eleven per cent
(111.11%) of the aggregate of (i) the Loan and (ii) the Swap Exposure
at such time;
"SECURITY VALUE" means the amount in Dollars (as certified by the
Agent whose certificate shall, in the absence of manifest error, be
conclusive and binding on the Borrowers and the Banks) which, at any
relevant time, is the aggregate of (i) the market value of the
Mortgaged Ships as most recently determined in accordance with clause
8.2.2 and (ii) the market value of any additional security for the
time being actually provided to any of the Creditors pursuant to
clause 8.2;
11
"SHIPS" means, together, the Figaro Ship, the Magic Ship, the Xxxx
Ship, the Vague Ship, the Zoom Ship and the Newbuilding and "SHIP"
means any of them;
"SHIP SECURITY DOCUMENTS" means:
(a) in respect of the Figaro Ship, the Figaro Mortgage, the Figaro
Deed of Covenant and the relevant Manager's Undertaking; or
(b) in respect of Magic Ship, the Magic Mortgage, the Magic Deed of
Covenant and the relevant Manager's Undertaking; or
(c) in respect of Xxxx Ship, the Xxxx Mortgage, the Xxxx Deed of
Covenant and the relevant Manager's Undertaking; or
(d) in respect of Vague Ship, the Vague Mortgage, the Vague Deed of
Covenant and the relevant Manager's Undertaking; or
(e) in respect of Zoom Ship, the Zoom Mortgage, the Zoom Deed of
Covenant and the relevant Manager's Undertaking; or
(f) in respect of the Newbuilding, the Ocean Mortgage, the Ocean Deed
of Covenant and the relevant Manager's Undertaking;
"SMC" means a safely management certificate issued in respect of a
Ship in accordance with rule 13 of the Code;
"SPILL" means any actual or threatened emission, spill, release or
discharge of a pollutant into the environment;
"SUBSIDIARY" of a person means any company or entity directly or
indirectly controlled by such person, and for this purpose "CONTROL"
means either the ownership of more than fifty per cent (50%) of the
voting share capital (or equivalent rights of ownership) of such
company or entity or the power to direct its policies and management,
whether by contract or otherwise;
"SWAP EXPOSURE" means, as at any relevant time, in the absence of
manifest error, the amount certified by the Swap Provider to the Agent
to be the aggregate net amount in Dollars which would be payable by
the Borrowers to the Swap Provider under (and calculated in accordance
with) section 6(e) (Payments on Early Termination) of the Master Swap
Agreement if an Early Termination Date had occurred at the relevant
time in relation to all continuing Designated Transactions;
"SWAP PROVIDER" means National Bank of Greece S.A. of 00 Xxxxxx
Xxxxxx, 000 00 Xxxxxx, Xxxxxx acting for the purposes of this
Agreement through its branch at 0 Xxxxxxxxxxx Xxxxxx & Xxxx Xxxxxxx,
000 00 Xxxxxxx, Xxxxxx (or of such other address as may last have been
notified to the other parties to this Agreement pursuant to clause
17.1.3) and includes its successors in title;
"TAXES" includes all present and future taxes, levies, imposts,
duties, fees or charges of whatever nature together with interest
thereon and penalties in respect thereof and "TAXATION" shall be
construed accordingly;
"TERMINATION DATE" means (a) in the case of the Refinancing Advance,
17 July 2003 and (b) in the case of the Newbuilding Advance, 31 March
2004, or, in each case, such later date as the Agent (acting on the
instructions of the Majority Banks) in its absolute discretion may
agree in writing;
"TOTAL COMMITMENT" means, at any relevant time, the total of the
Commitments of all the Banks at such time as reduced by any relevant
term of this Agreement;
12
"TOTAL LOSS" in relation to a Ship means:
(a) actual, constructive, compromised or arranged total loss of
such Ship; or
(b) the Compulsory Acquisition of such Ship; or
(c) the hijacking, theft, condemnation, capture, seizure,
arrest, detention or confiscation of such Ship (other than
where the same amounts to the Compulsory Acquisition of such
Ship) by any Government Entity, or by persons acting or
purporting to act on behalf of any Government Entity, unless
such Ship be released and restored to the relevant Borrower
from such hijacking, theft, condemnation, capture, seizure,
arrest, detention or confiscation within thirty (30) days
after the occurrence thereof;
"TRANSACTION" has the meaning given to it in the Master Swap
Agreement;
"TRANSFEREE BANK" has the meaning ascribed thereto in clause 15.3;
"TRANSFEROR BANK" has the meaning ascribed thereto in clause 15.3;
"TRANSFER CERTIFICATE" means a certificate in substantially the form
set out in schedule 4;
"UNDERLYING DOCUMENTS" means, together, the Contract, the LTC Contract
and the Management Agreements and "UNDERLYING DOCUMENT" means any of
them;
"VAGUE BORROWER" means Vague Shipping Ltd of 00/00 Xxxxxxxx Xxxxxxxxx,
Xxxxxx Xxxxxx, Xxxxxxxx, Xxxxx and includes its successors in title;
"VAGUE DEED OF COVENANT" means the deed of covenant collateral to the
Vague Mortgage executed or (as the context may require) to be executed
by the Vague Borrower in favour of the Security Agent in the form set
out in schedule 6;
"VAGUE MANAGEMENT AGREEMENT" means the agreement dated 11 April 2003
in respect of the Vague Ship made between the Vague Borrower and the
Manager or any other agreement previously approved in writing by the
Agent between the Vague Borrower and the Manager providing (inter
alia) for the Manager to manage the Vague Ship;
"VAGUE MORTGAGE" means a first priority Maltese statutory mortgage of
the Vague Ship executed or (as the context may require) to be executed
by the Vague Borrower in favour of the Security Agent in the form set
out in schedule 5;
"VAGUE OPERATING ACCOUNT" means an interest bearing Dollar account of
the Vague Borrower opened or (as the context may require) to be opened
with the Account Bank and includes any sub-accounts thereof and any
other account designated in writing by the Agent to be a Vague
Operating Account for the purpose of this Agreement;
"VAGUE SHIP" means the vessel m.v. Agamemnon owned by the Vague
Borrower and registered through the Registry under the laws and flag
of the Flag State;
"ZOOM BORROWER" means Zoom Shipping Ltd of 00/00 Xxxxxxxx Xxxxxxxxx,
Xxxxxx Xxxxxx, Xxxxxxxx, Xxxxx and includes its successors in title;
"ZOOM DEED OF COVENANT" means the deed of covenant collateral to the
Zoom Mortgage executed or (as the context may require) to be executed
by the Zoom Borrower in favour of the Security Agent in the form set
out in schedule 6;
"ZOOM MANAGEMENT AGREEMENT" means the agreement dated 11 April 2003 in
respect of the Zoom Ship made between the Zoom Borrower and the
Manager or any other agreement previously approved in writing by the
Agent between the Zoom Borrower and the Manager providing (inter alia)
for the Manager to manage the Zoom Ship;
13
"ZOOM MORTGAGE" means a first priority Maltese statutory mortgage of
the Zoom Ship executed or (as the context may require) to be executed
by the Zoom Borrower in favour of the Security Agent in the form set
out in schedule 5;
"ZOOM OPERATING ACCOUNT" means an interest bearing Dollar account of
the Zoom Borrower opened or (as the context may require) to be opened
with the Account Bank and includes any sub-accounts thereof and any
other account designated in writing by the Agent to be a Zoom
Operating Account for the purpose of this Agreement; and
"ZOOM SHIP" means the vessel m.v. Achilleas owned by the Zoom Borrower
and registered through the Registry under the laws and flag of the
Flag State.
1.3 Headings
Clause headings and the table of contents are inserted for convenience
of reference only and shall be ignored in the interpretation of this
Agreement.
1.4 CONSTRUCTION OF CERTAIN TERMS
In this Agreement, unless the context otherwise requires:
1.4.1 references to clauses and schedules are to be construed as references
to clauses of, and schedules to, this Agreement and references to this
Agreement include its schedules;
1.4.2 references to (or to any specified provision of) this Agreement or any
other document shall be construed as references to this Agreement,
that provision or that document as in force for the time being and as
amended in accordance with terms thereof, or, as the case may be, with
the agreement of the relevant parties;
1.4.3 references to a "REGULATION" include any present or future regulation,
rule, directive, requirement, request or guideline (whether or not
having the force of law) of any agency, authority, central bank or
government department or any self-regulatory or other national or
supra-national authority;
1.4.4 words importing the plural shall include the singular and vice versa;
1.4.5 references to a time of day are to London time;
1.4.6 references to a person shall be construed as references to an
individual, firm, company, corporation, unincorporated body of persons
or any Government Entity;
1.4.7 references to a "GUARANTEE" include references to an indemnity or
other assurance against financial loss including, without limitation,
an obligation to purchase assets or services as a consequence of a
default by any other person to pay any Indebtedness and "GUARANTEED"
shall be construed accordingly; and
1.4.8 references to any enactment shall be deemed to include references to
such enactment as re-enacted, amended or extended.
1.5 MAJORITY BANKS
Where this Agreement provides for any matter to be determined by
reference to the opinion of the Majority Banks or to be subject to the
consent or request of the Majority Banks or for any action to be taken
on the instructions in writing of the Majority Banks, such opinion,
consent, request or instructions shall (as between the Banks) only be
regarded as having been validly given or issued by the Majority Banks
if all the Banks shall have received prior notice of the matter on
which such opinion, consent, request or instructions are required to
be obtained and the relevant majority of Banks shall have given or
issued such opinion, consent, request or instructions but so that (as
between the Borrowers and the Banks) the Borrowers shall be
14
entitled (and bound) to assume that such notice shall have been duly
received by each Bank and that the relevant majority shall have been
obtained to constitute Majority Banks whether or not this is in fact
the case.
1.6 BANKS' COMMITMENT
For the purposes of the definition of "MAJORITY BANKS" in clause 1.2
and the relevant provisions of the Agency Agreement, references to the
Commitment of a Bank shall, if the Total Commitment has, at any
relevant time, been reduced to zero, be deemed to be a reference to
the Commitment of that Bank immediately prior to such reduction to
zero.
2 THE TOTAL COMMITMENT AND THE ADVANCES
2.1 AGREEMENT TO LEND
The Banks, relying upon each of the representations and warranties in
clause 7, agree to lend to the Borrowers, jointly and severally, in up
to two (2) Advances upon and subject to the terms of this Agreement
the principal sum of up to $53,250,000. The obligation of each Bank
under this Agreement shall be to contribute that proportion of each
Advance which, as at the Drawdown Date of such Advance, its Commitment
bears to the Total Commitment. The Loan will be granted in freely
converted currency in accordance with the provisions of the decision
number 187/1/19.10.1978 of the Credits Sub-Committee of the Greek
Currency Committee published in the Greek Government Gazette (Section
A issue No. 195(978)).
2.2 OBLIGATIONS SEVERAL
The obligations of the Banks under this Agreement are several
according to their respective Commitments and/or Contributions; the
failure of any Bank to perform such obligations or the failure of the
Swap Provider to perform its obligations under the Master Swap
Agreement shall not relieve any other Creditor or the Borrowers or any
of them of any of their respective obligations or liabilities under
this Agreement or, as the case may be, the Master Swap Agreement nor
shall any Creditor be responsible for the obligations of any Bank
(except for its own obligations, if any, as a Bank) or the Swap
Provider nor shall any Bank be responsible for the obligations of any
other Bank or the Swap Provider under this Agreement or the Master
Swap Agreement.
2.3 INTERESTS SEVERAL
Notwithstanding any other term of this Agreement (but without
prejudice to the provisions of this Agreement relating to or requiring
action by the Majority Banks) the interests of the Creditors are
several and the amount due to any Creditor is a separate and
independent debt. Each Creditor shall have the right to protect and
enforce its rights arising out of this Agreement and it shall not be
necessary for any other Creditor to be joined as an additional party
in any proceedings for this purpose.
2.4 DRAWDOWN
Subject to the terms and conditions of this Agreement, each Advance
shall be made to the Borrowers following receipt by the Agent from the
Borrowers of a Drawdown Notice not later than 10 a.m. (Greek time) on
the third Banking Day before the proposed Drawdown Date for such
Advance which shall be a Banking Day falling within the relevant
Drawdown Period. A Drawdown Notice shall be effective on actual
receipt by the Agent and, once given, shall, subject as provided in
clause 3.6.1, be irrevocable.
2.5 TIMING AND LIMITATION OF ADVANCES
2.5.1 The aggregate amount of the Advances shall not exceed $53,250,000.
15
2.5.2 (a) The refinancing Advance shall be made solely for the purpose of
refinancing the Existing Indebtedness; and
(b) the Newbuilding Advance shall be made solely for the purpose of
paying part of the Contract Price for the Newbuiiding and shall
only be made available on the Delivery Date.
2.5.3 Each Advance shall be made in accordance with clause 6.2 and the
amount of each Advance shall be as follows:
(a) the amount of the Refinancing Advance shall not exceed the lesser
of (i) $25,650,000 and (ii) the Existing Indebtedness; and
(b) the aggregate amount of the Newbuilding Advance shall not exceed
the lesser of (i) $27,600,000, (ii) eighty per cent (80%) of the
Contract Price and (iii) eighty per cent (80%) of the market
value of the Newbuilding (as determined pursuant to the valuation
obtained as condition precedent to the drawdown of such Advance
at the Delivery Date) and:
(i) the Delivery Tranche shall not exceed the lesser of (a)
$25,875,000, (b) seventy-five per cent (75%) of the Contract
Price and (c) seventy-five per cent (75%) of the market
value of the Newbuilding (as determined pursuant to the
valuation obtained as condition precedent to the drawdown of
such Advance at the Delivery Date); and
(ii) the LTC Tranche shall not exceed the lesser of (a)
$1,725,000, (b) five per cent (5%) of the Contract Price and
(c) five per cent (5%) of the market value of the
Newbuilding (as determined pursuant to the valuation
obtained as condition precedent to the drawdown of such
Advance at the Delivery Date).
2.5.4 The LTC Tranche may only be drawn down simultaneously with the
Delivery Tranche.
2.5.5 The Newbuilding Advance may not be drawn down unless the Refinancing
Advance has been drawn down.
2.6 AVAILABILITY
Upon receipt of a Drawdown Notice complying with the terms of this
Agreement, the Agent shall promptly notify each Bank and, subject to
the provisions of clause 8.3.15, each Bank shall make available to the
Agent its portion of the relevant Advance for payment by the Agent in
accordance with clause 6.2. The Borrowers acknowledge that payment of
the Newbuilding Advance to the Builder shall satisfy the obligation of
the Banks to lend that Advance to the Borrowers under this Agreement.
2.7 TERMINATION OF TOTAL COMMITMENT
Any part of the Total Commitment which remains undrawn and uncancelled
by its relevant Termination Date shall thereupon be automatically
cancelled.
2.8 APPLICATION OF PROCEEDS
Without prejudice to the Borrowers' obligations under clause 8.1.3,
none of the Creditors shall have any responsibility for the
application of the proceeds of the Loan by the Borrowers.
2.9 SWAP TRANSACTIONS
2.9.1 If, at any time during the Security Period (as defined in the Ship
Security Documents), the Borrowers wish to enter into interest rate
swap transactions so as to hedge all or any part of their exposure
under this Agreement to interest rate fluctuations, they shall advise
the Swap
16
Provider in writing; Provided that at no time shall the Borrowers be
obliged to enter into any such interest rate swap transactions.
2.9.2 Any such swap transaction shall be concluded with the Swap Provider
under the Master Swap Agreement provided however that no such swap
transaction shall be concluded unless the Swap Provider first agrees
to it in writing. For the avoidance of doubt, other than the Swap
Provider's agreement in writing referred to in the preceding sentence
no prior approval is required by the Borrowers from all or any of the
Banks, the Agent, the Security Agent or the Account Bank before
concluding any such swap transaction. If and when any such swap
transaction has been concluded, it shall constitute a Designated
Transaction, and the Borrowers shall sign a Confirmation with the Swap
Provider and advise the Banks through the Agent promptly after
concluding any Designated Transaction.
3 INTEREST AND INTEREST PERIODS
3.1 NORMAL INTEREST RATE
The Borrowers shall pay interest on each Advance or, as the case may
be, the Loan in respect of each Interest Period relating thereto on
each Interest Payment Date (or, in the case of Interest Periods of
more than six (6) months, by instalments, the first instalment six (6)
months from the commencement of the Interest Period and the subsequent
instalments at intervals of six (6) months or, if shorter, the period
from the date of the preceding instalment until the Interest Payment
Date relative to such Interest Period) at the rate per annum
determined by the Agent to be the aggregate of (a) the Margin and (b)
LIBOR for such Interest Period.
3.2 SELECTION OF INTEREST PERIODS
The Borrowers may by notice received by the Agent not later than 10
a.m. (Greek time) on the third Banking Day before the beginning of
each Interest Period specify whether such Interest Period shall have a
duration of one (1), three (3), six (6), nine (9) or twelve (12)
months or such other shorter period as the Borrowers may select and
the Agent (acting on the instructions of the Majority Banks) may, in
its absolute discretion, agree.
3.3 DETERMINATION OF INTEREST PERIODS
Every Interest Period shall be of the duration specified by the
Borrowers pursuant to clause 3.2 but so that:
3.3.1 the initial Interest Period in respect of each Advance shall commence
on the date such Advance is made and each subsequent Interest Period
in respect of such Advance shall commence on the last day of the
previous Interest Period in respect of such Advance;
3.3.2 if any Interest Period would otherwise overrun a Repayment Date for an
Advance, then, in the case of the last Repayment Date for such
Advance, such Interest Period shall end on such Repayment Date, and in
the case of any other Repayment Date or Repayment Dates for such
Advance, such Advance shall be divided into parts so that there is one
part in the amount of the repayment instalment due on each Repayment
Date for such Advance failing during that Interest Period and having
an Interest Period ending on the relevant Repayment Date for such
Advance and another part in the amount of the balance of such Advance
having an Interest Period ascertained in accordance with clause 3.2
and the other provisions of this clause 3.3; and
3.3.3 if the Borrowers fail to specify the duration of an Interest Period in
accordance with the provisions of clause 3.2 and this clause 3.3 such
Interest Period shall have a duration of six (6) months or such other
period as shall comply with this clause 3.3.
3.4 DEFAULT INTEREST
17
If the Borrowers fail to pay any sum (including, without limitation,
any sum payable pursuant to this clause 3.4) on its due date for
payment under any of the Security Documents, the Borrowers shall pay
interest on such sum on demand from the due date up to the date of
actual payment (as well after as before judgment) at a rate determined
by the Agent pursuant to this clause 3.4. The period beginning on such
due date and ending on such date of payment shall be divided into
successive periods of not more than six (6) months as selected by the
Agent each of which (other than the first, which shall commence on
such due date) shall commence on the last day of the preceding such
period. The rate of interest applicable to each such period shall be
the aggregate (as determined by the Agent) of (a) two per cent (2%)
per annum, (b) the Margin and (c) LIBOR for such period. Such interest
shall be due and payable on the last day of each such period as
determined by the Agent and each such day shall, for the purposes of
this Agreement, be treated as an Interest Payment Date, provided that
if such unpaid sum is an amount of principal which became due and
payable by reason of a declaration by the Agent under clause 10.2.2 or
a prepayment pursuant to clauses 4.3, 8.2.1 or 12.1, on a date other
than an Interest Payment Date relating thereto, the first such period
selected by the Agent shall be of a duration equal to the period
between the due date of such principal sum and such Interest Payment
Date and interest shall be payable on such principal sum during such
period at a rate of two per cent (2%) above the rate applicable
thereto immediately before it shall have become so due and payable.
If, for the reasons specified in clause 3.6.1, the Agent is unable to
determine a rate in accordance with the foregoing provisions of this
clause 3.4, each Bank shall promptly notify the Agent of the cost of
funds to such Bank and interest on any sum not paid on its due date
for payment shall be calculated at a rate determined by the Agent to
be two per cent (2%) per annum above the aggregate of the Margin and
the cost of funds to such Bank.
3.5 NOTIFICATION OF INTEREST PERIODS AND INTEREST RATE
The Agent shall notify the Borrowers and the Banks promptly of the
duration of each Interest Period and of each rate of interest (or, as
the case may be default interest) determined by it under this clause
3.
3.6 MARKET DISRUPTION; NON-AVAILABILITY
3.6.1 If and whenever, at any time prior to the commencement of any Interest
Period:
(a) the Agent shall have determined (which determination shall, in
the absence of manifest error, be conclusive) that adequate and
fair means do not exist for ascertaining LIBOR during such
Interest Period;
(b) that, where applicable, the Reference Bank does not supply the
Bank with a quotation for the purpose of calculating LIBOR; or
(c) the Agent shall have received notification from Banks with
Contributions aggregating not less than one-third of the Loan or
(prior to the Drawdown Date of the first Advance to be drawn
down) the Total Commitment, that deposits in Dollars are not
available to such Banks in the London Interbank Market in the
ordinary course of business in sufficient amounts to fund the
Loan or their Contributions for such Interest Period.
the Agent shall forthwith give notice (a "DETERMINATION NOTICE")
thereof to the Borrowers and to each of the Banks and the Swap
Provider. A Determination Notice shall contain particulars of the
relevant circumstances giving rise to its issue. After the giving of
any Determination Notice the undrawn amount of the Total Commitment
shall not be borrowed until notice to the contrary is given to the
Borrowers by the Agent.
3.6.2 During the period of ten (10) days after any Determination Notice has
been given by the Agent under clause 3.6.1, each Bank shall certify an
alternative basis (the "ALTERNATIVE BASIS") for maintaining its
Contribution. The Alternative Basis may at each Bank's sole and
unfettered discretion (without limitation) include alternative
interest periods, alternative currencies or alternative rates of
interest but shall include a margin above the cost of funds to such
Bank equivalent to the Margin. Each Alternative Basis so certified
shall be binding upon the Borrowers, and shall take effect in
accordance with its terms from the date
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specified in the Determination Notice until such time as the Agent
notifies the Borrowers that none of the circumstances specified in
clause 3.6.1 continues to exist whereupon the normal interest rate
fixing provisions of this Agreement shall apply.
4 REPAYMENT AND PREPAYMENT
4.1 REPAYMENT
4.1.1 The Borrowers shall repay the Refinancing Advance by eight (8)
instalments, one such instalment to be repaid on each of the relevant
Repayment Dates for such Advance. Subject to the provisions of this
Agreement, the amount of each of the first two instalments shall be
$2,960,000, the amount of each of the third to the seventh instalments
shall be $2,470,000 and the amount of the final instalment shall be
$7,380,000 (comprising a repayment instalment of $2,470,000 and a
balloon instalment of $4,910,000 (the "REFINANCING BALLOON")). If less
than $25,650,000 is drawn down in respect of the Refinancing Advance,
the amount of such repayment instalments (including the Refinancing
Balloon) shall be reduced proportionately.
4.1.2 (i) In the event that the LTC Tranche is not drawn down, the Borrowers
shall repay the Newbuilding Advance by twenty (20) instalments.
Subject to the provisions of this Agreement, the amount of each such
instalment, other than the final Instalment, shall be $880,000 and the
amount of the final instalment shall be $9,155,000 (comprising a
repayment instalment of $880,000 and a balloon instalment of
$8,275,000 (the "NEWBUILDING BALLOON")). If less than $25,875,000 is
drawn down in respect of the Newbuilding Advance, the amount of such
repayment instalments (including the Newbuilding Balloon) shall be
reduced proportionately.
(ii) In the event that the LTC Tranche is drawn down, the Borrowers
shall repay the Newbuilding Advance by twenty (20) instalments.
Subject to the provisions of this Agreement, the amount of each of the
first four instalments shall be $1,311,250, the amount of each of the
fifth to the nineteenth instalments shall be $880,000 and the amount
of the final instalment shall be $9,155,000 (comprising a repayment
instalment of $880,000 and the Newbuilding Balloon). If more than
$25,875,000 but less than $27,600,000 is drawn down in respect of the
Newbuilding Advance, the amount of such repayment instalments and the
Newbuilding Balloon shall be reduced proportionately.
4.2 VOLUNTARY PREPAYMENT
The Borrowers may prepay the Loan or an Advance in whole or part (such
part being in an amount of $100,000 or any larger sum which is an
integral multiple of $100,000) on any Interest Payment Date relating
to the part of the Loan to be repaid without premium or penalty
subject always to their obligations under clause 4.5.
4.3 PREPAYMENT ON TOTAL LOSS AND SALE OR
4.3.1 Before drawdown
On the Newbuilding becoming a Total Loss (or suffering damage or being
involved in an incident which in the opinion of the Agent may result
in the Newbuilding being subsequently determined to be a Total Loss)
before the Newbuilding Advance is drawn down, the obligation of the
Banks to advance the Newbuilding Advance shall immediately cease and
the Total Commitment shall be reduced by the amount of the Newbuilding
Advance.
4.3.2 After drawdown
On the date one hundred and twenty (120) days after that on which a
Mortgaged Ship became a Total Loss or immediately prior to the
completion of the sale of a Mortgaged Ship or, if earlier, on the date
upon which the insurance proceeds in respect of such Total Loss are,
or Requisition Compensation (as defined in the relevant Ship Security
Documents) is,
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received by the relevant Borrower (or the Security Agent pursuant to
the Security Documents), the Borrowers shall prepay such proportion of
the Loan as the Agent shall require.
4.3.3 For the purpose of this Agreement, a Total Loss shall be deemed to
have occurred:
(a) in the case of an actual total loss of a Ship on the actual date
and at the time such Ship was lost or, if such date is not known,
on the date on which such Ship was last reported;
(b) in the case of a constructive total loss of a Ship, upon the date
and at the time notice of abandonment of such Ship is given to
the insurers of such Ship for the time being;
(c) in the case of a compromised or arranged total loss of a Ship, on
the date upon which a binding agreement as to such compromised or
arranged total loss has been entered into by the insurers of such
Ship;
(d) in the case of Compulsory Acquisition, on the date upon which the
relevant requisition of title or other compulsory acquisition
occurs; and
(e) in the case of hijacking, theft, condemnation, capture, seizure,
arrest, detention or confiscation of a Ship (other than where the
same amounts to Compulsory Acquisition of such Ship) by any
Government Entity, or by persons purporting to act on behalf of
any Government Entity, which deprives the relevant Borrower of
the use of such Ship for more than thirty (30) days, upon the
expiry of the period of thirty (30) days after the date upon
which the relevant hijacking, theft, condemnation, capture,
seizure, arrest, detention or confiscation occurred.
4.4 NEWBUILDING ADVANCE - DEFERRAL OPTION
4.4.1 Subject to the other provisions of this clause 4.4, the Borrowers may,
at any time after the date falling twenty-four (24) months after the
Drawdown Date of the Newbuilding Advance, elect to defer the payment
in full (but not in part) of up to two (2) of the relevant repayment
instalments (other than the final instalment) of the Newbuilding
Advance referred to in clause 4.1.2 which are non-consecutive.
4.4.2 Any repayment instalment which has been deferred pursuant to this
clause 4.4, shall be added to, and repaid together with, the
Newbuilding Balloon.
4.4.3 If any repayment instalment shall be deferred pursuant to this clause
4.4, the date on which such instalment would have been due in
accordance with clause 4.1 but for the exercise by the Borrowers of
such deferral option, shall be deemed not to be a Repayment Date.
4.4.4 The deferral option shall be exercisable by a written irrevocable
notice from the Borrowers to the Agent (a "DEFERRAL NOTICE"),
specifying the relevant repayment instalment to be deferred and the
Borrowers shall send such Deferral Notice to the Agent not later than
fifteen (15) Banking Days prior to the Repayment Date immediately
preceding the date on which the repayment instalment to be deferred
would, but for such deferral, have been payable.
4.4.5 The instalment referred to in a Deferral Notice shall only be deferred
pursuant to clause 4.4.1 if (a) the Deferral Notice is received by the
Agent not later than the relevant date specified in clause 4.4.4, (b)
no Default shall have occurred, (c) the Agent (acting on the
instructions of the Majority Banks) shall determine in its sole
discretion that (i) at the time of receipt of the Deferral Notice by
the Agent, the freight rates then available in the market for vessels
of the same type and specification as the Newbuilding are less than
what is required by the Borrowers in order to service their principal
and interest payments in respect of the Newbuilding Advance under this
Agreement and to pay the operating expenses of the Newbuilding, in
each case as at such time and (ii) that such rates are likely to
remain at such levels for the foreseeable future and (d) the Agent
confirms in writing to the Borrowers its agreement to the deferral
referred to in the relevant Deferral Notice.
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4.5 AMOUNTS PAYABLE ON PREPAYMENT
Any prepayment of all or part of the Loan under this Agreement shall
be made together with:
4.5.1 accrued interest on the amount to be prepaid to the date of such
prepayment;
4.5.2 any additional amount payable under clause 6.6.1 or 12.2; and
4.5.3 all other sums payable by the Borrowers to the Creditors under this
Agreement or any of the other Security Documents including, without
limitation, any accrued commitment commission payable under clause
5.1.3 and any amounts payable under clause 11.
4.6 NOTICE OF PREPAYMENT; REDUCTION OF REPAYMENT INSTALMENTS
No prepayment may be effected under clause 4.2 unless the Borrowers
shall have given the Agent at least ten (10) days, prior written
notice of their intention to make such prepayment. Every notice of
prepayment shall be effective only on actual receipt by the Agent,
shall be irrevocable, shall specify the amount to be prepaid, the
Advance in respect of which such prepayment is made and shall oblige
the Borrowers to make such prepayment on the date specified. No amount
prepaid may be reborrowed. Any amount prepaid pursuant to clauses 4.2,
4.3 or 8.2.1 shall be applied in reducing the relevant repayment
instalments and the relevant Balloon Instalment under clause 4.1 in
inverse order of their due dates for payment. The Borrowers may not
prepay the Loan or any part thereof save as expressly provided in this
Agreement.
4.7 CANCELLATION OF TOTAL COMMITMENT
The Borrowers may, at any time before the relevant Termination Date,
by notice to the Bank (effective only on actual receipt), cancel with
effect from a date not less than fifteen (15) days after the receipt
by the Bank of such notice the whole or any part of the Total
Commitment relating to any undrawn and uncancelled part of the Total
Commitment which has not been the subject of a Drawdown Notice already
sent to the Bank. Any such notice of cancellation shall be
irrevocable, once given and shall specify which Advance the
cancellation relates to.
4.8 UNWINDING OF DESIGNATED TRANSACTIONS
On or prior to any repayment or prepayment of all or part of the Loan
(including, without limitation, pursuant to clause 4.3 following a
Total Loss, pursuant to clauses 4.2 or 8.2.1(a) or any other
provision of this Agreement), the Borrowers shall upon the request of
the Agent wholly or partially reverse, offset, unwind, cancel, close
out, net out or otherwise terminate one or more of the continuing
Designated Transactions so that the notional principal amount of the
continuing Designated Transactions thereafter remaining does not and
will not in the future (taking into account the scheduled
amortisation) exceed the amount of the Loan as reducing from time to
time thereafter pursuant to clause 4.1.
5 FEES, COMMITMENT COMMISSION AND EXPENSES
5.1 FEES
The Borrowers shall pay to the Agent:
5.1.1 for its own account, on the first Drawdown Date and at yearly
intervals thereafter, an agency fee of $5,000 per annum;
5.1.2 for distribution to the Banks pro rata according to their respective
Commitments, an arrangement fee of $159,750 which has been paid on 30
May 2003; and
5.1.3 for distribution to the Banks pro rata according to their respective
Commitments, on each of the dates falling at three (3) monthly
intervals after the date of this Agreement until the last
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day of the Drawdown Period for the Newbuilding Advance and on the last
day of such Drawdown Period, commitment commission computed from 26
May 2003 (in the case of the first payment of commitment commission)
and from the date of the preceding payment of commission (in the case
of each subsequent payment), at the rate of zero point three per cent
(0.3%) per annum on the daily undrawn amount of the Newbuilding
Advance.
The fees referred to in clauses 5.1.1 and 5.1.2 and the commitment
commission referred to in clause 5.1.3 shall be payable by the
Borrowers, whether or not any part of the Total Commitment is ever
advanced and shall be, in each case, non-refundable.
5.2 EXPENSES
The Borrowers shall pay to the Agent on a full indemnity basis on
demand all expenses (including legal, printing and out-of-pocket
expenses) incurred by the Creditors or any of them:
5.2.1 in connection with the negotiation, preparation, execution and, where
relevant, registration of the Security Documents and of any amendment
or extension of or the granting of any waiver or consent under, any of
the Security Documents and the syndication of the Loan; and
5.2.2 in contemplation of, or otherwise in connection with, the enforcement
of, or preservation of any rights under, any of the Security
Documents, or otherwise in respect of the moneys owing under any of
the Security Documents,
together with interest at the rate referred to in clause 3.4 from the
date on which such expenses were incurred to the date of payment (as
well after as before judgment).
5.3 VALUE ADDED TAX
All fees and expenses payable pursuant to this clause 5 shall be paid
together with value added tax or any similar tax (if any) properly
chargeable thereon. Any value added tax chargeable in respect of any
services supplied by the Creditors or any of them under this Agreement
shall, on delivery of the value added tax invoice, be paid in addition
to any sum agreed to be paid hereunder.
5.4 STAMP AND OTHER DUTIES
The Borrowers shall pay all stamp, documentary, registration or other
like duties or taxes (including any duties or taxes payable by any of
the Creditors) imposed on or in connection with any of the Underlying
Documents, the Security Documents or the Loan and shall indemnify the
Creditors or any of them against any liability arising by reason of
any delay or omission by the Borrowers to pay such duties or taxes.
6 PAYMENTS AND TAXES; ACCOUNTS AND CALCULATIONS
6.1 NO SET-OFF OR COUNTERCLAIM
The Borrowers acknowledge that in performing their respective
obligations under this Agreement, the Banks will be incurring
liabilities to third parties in relation to the funding of amounts to
the Borrowers, such liabilities matching the liabilities of the
Borrowers to the Banks and that it is reasonable for the Banks to be
entitled to receive payments from the Borrowers gross on the due date
in order that each of the Banks is put in a position to perform its
matching obligations to the relevant third parties. Accordingly all
payments to be made by the Borrowers under any of the Security
Documents shall be made in full, without any set-off or counterclaim
whatsoever and, subject as provided in clause 6.6.1, free and clear of
any deductions or withholdings, in Dollars on the due date to the
account of the Agent at such bank in such place as the Agent may from
time to time specify for this purpose. Save as otherwise provided in
this Agreement or any relevant Security Documents such payments shall
be for the account of all Banks and the Agent shall distribute such
payments in like funds as are received by the Agent
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to the Banks rateably in accordance with their respective Commitment
or Contribution, as the case may be.
6.2 PAYMENT BY THE BANKS
All sums to be advanced by the Banks to the Borrowers under this
Agreement shall be remitted in Dollars on the relevant Drawdown Date
for the relevant Advance to the account of the Agent at such bank as
the Agent may have notified to the Banks and shall be paid by the
Agent to the account specified in the relevant Drawdown Notice for
such Advance.
6.3 NON-BANKING DAYS
When any payment under any of the Security Documents would otherwise
be due on a day which is not a Banking Day, the due date for payment
shall be extended to the next following Banking Day unless such
Banking Day falls in the next calendar month in which case payment
shall be made on the immediately preceding Banking Day.
6.4 CALCULATIONS
All interest and other payments of an annual nature under any of the
Security Documents shall accrue from day to day and be calculated on
the basis of actual days elapsed and a 360 day year.
6.5 CERTIFICATES CONCLUSIVE
Any certificate or determination of the Agent as to any rate of
interest or any other amount pursuant to and for the purposes of any
of the Security Documents shall, in the absence of manifest error, be
conclusive and binding on the Borrowers and on the Banks.
6.6 GROSSING-UP FOR TAXES - BY THE BORROWERS
6.6.1 If at any time the Borrowers or any of them are required to make any
deduction or withholding in respect of Taxes from any payment duly
under any of the Security Documents for the account of any Creditor or
if the Agent or the Security Agent is required to make any deduction
or withholding from a payment to another Creditor or withholding in
respect of Taxes from any payment due under any of the Security
Documents, the sum due from the Borrowers or any of them in respect of
such payment shall be increased to the extent necessary to ensure
that, after the making of such deduction or withholding, the relevant
Creditor receives on the due date for such payment (and retains, free
from any liability in respect of such deduction or withholding), a net
sum equal to the sum which it would have received had no such
deduction or withholding been required to be made and the Borrowers
shall indemnify each Creditor against any losses or costs incurred by
it by reason of any failure of the Borrowers or any of them to make
any such deduction or withholding or by reason of any increased
payment not being made on the due date for such payment. The Borrowers
shall promptly deliver to the Agent any receipts, certificates or
other proof evidencing the amounts (if any) paid or payable in
respect of any deduction or withholding as aforesaid.
6.6.2 For the avoidance of doubt, clause 6.6.1 does not apply in respect of
sums due from the Borrowers to the Swap Provider under or in
connection with the Master Swap Agreement as to which sums the
provisions of section 2(d) (Deduction or Withholding for Tax) of the
Master Swap Agreement shall apply.
6.7 GROSSING-UP FOR TAXES - BY THE BANKS
If at any time a Bank is required to make any deduction or withholding
in respect of Taxes from any payment due under any of the Security
Documents for the account of the Agent or the Security Agent, the sum
due from such Bank in respect of such payment shall be increased to
the extent necessary to ensure that, after the making of such
deduction or withholding, the Agent or, as the case may be, the
Security Agent receives on the due date for such payment
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(and retains free from any liability in respect of such deduction or
withholding) a net sum equal to the sum which it would have received
had no such deduction or withholding been required to be made and each
Bank shall indemnify the Agent and the Security Agent against any
losses or costs incurred by it by reason of any failure of such Bank
to make any such deduction or withholding or by reason of any
increased payment not being made on the due date for such payment.
6.8 LOAN ACCOUNT
Each Bank shall maintain, in accordance with its usual practice, an
account or accounts evidencing the amounts from time to time lent by,
owing to and paid to it under the Security Documents. The Agent shall
maintain a control account (which shall be the "Account Current"
referred to in each Mortgage (provided in the case of the Ocean
Mortgage the same is an account current mortgage)) showing the
Advances and other sums owing by the Borrowers under the Security
Documents. The control account shall, in the absence of manifest
error, be conclusive as to the amount from time to time owing by the
Borrowers under the Security Documents.
6.9 AGENT MAY ASSUME RECEIPT
Where any sum is to be paid under this Agreement to the Agent for the
account of another person, the Agent may assume that the payment will
be made when due and may (but shall not be obliged to) make such sum
available to the person so entitled. If it proves to be the case that
such payment was not made to the Agent, then the person to whom such
sum was so made available shall on request refund such sum to the
Agent together with interest thereon sufficient to compensate the
Agent for the cost of making available such sum up to the date of such
repayment and the person by whom such sum was payable shall indemnify
the Agent for any and all loss or expense which the Agent may sustain
or incur as a consequence of such sum not having been paid on its due
date.
6.10 PARTIAL PAYMENTS
If, on any date on which a payment is due to be made by the Borrowers
under any of the Security Documents, the amount received by the Agent
from the Borrowers falls short of the total amount of the payment due
to be made by the Borrowers on such date then, without prejudice to
any rights or remedies available to the Agent, the Security Agent and
the Banks under any of the Security Documents, the Agent shall apply
the amount actually received from the Borrowers in or towards
discharge of the obligations of the Borrowers under the Security
Documents in the following order, notwithstanding any appropriation
made, or purported to be made, by the Borrowers:
6.10.1 first, in or towards payment, on a pro-rata basis, of any unpaid costs
and expenses of the Agent and the Security Agent under any of the
Security Documents;
6.10.2 secondly, in or towards payment of any fees payable to the Agent
under, or in relation to, the Security Documents which remain unpaid;
6.10.3 thirdly, in or towards payment to the Banks, on a pro rata basis, of
any accrued commitment commission payable under clause 5.1.3 which
shall have become due but remains unpaid;
6.10.4 fourthly, in or towards payment to the Banks, on a pro rata basis, of
any accrued interest in respect of the Loan which shall have become
due but remains unpaid;
6.10.5 fifthly, in or towards payment to the Banks, on a pro rata basis, of
any principal in respect of the Loan which shall have become due but
remains unpaid;
6.10.6 sixthly, in or towards payment to the Banks, on a pro rata basis, for
any loss suffered by reason of any such payment in respect of
principal not being effected on an interest Payment Date relating to
the part of the Loan repaid and which amounts are so payable under
this Agreement;
24
6.10.7 seventhly, in or towards payment to the relevant person of any other
sum which shall have become due under any of the Security Documents
(other than the Master Swap Agreement) but remains unpaid (and, if
more than one such sum so remains unpaid, on a pro rata basis); and
6.10.8 eighthly, in or towards payment to the Swap Provider of any sums owing
to it under the Master Swap Agreement.
The order of application set out in this clause 6.10.2 to 6.10.8 shall
be varied by the Agent if the Majority Banks so direct, without any
reference to, or consent or approval from, the Borrowers.
7 REPRESENTATIONS AND WARRANTIES
7.1 CONTINUING REPRESENTATIONS AND WARRANTIES
The Borrowers jointly and severally represent and warrant to each
Creditor that:
7.1.1 Due incorporation
each of the Borrowers and each of the other Security Parties are duly
incorporated and validly existing in good standing under the laws of
their respective countries of incorporation as limited liability
companies and have power to carry on their respective businesses as
they are now being conducted and to own their respective property and
other assets;
7.1.2 Corporate power
each of the Borrowers has power to execute, deliver and perform its
respective obligations under the Underlying Documents and the relevant
Borrowers' Security Documents to which it is or is to be a party and
to borrow the Total Commitment and each of the other Security Parties
has power to execute and deliver and perform its obligations under the
Security Documents to which it is or is to be a party; all necessary
corporate, shareholder and other action has been taken to authorise
the execution, delivery and performance of the same and no limitation
on the powers of any Borrower to borrow will be exceeded as a result
of borrowing an Advance or, as the case may be, the Loan;
7.1.3 Binding obligations
the Security Documents constitute or will, when executed, constitute
valid and legally binding obligations of the relevant Security Parties
enforceable in accordance with their respective terms;
7.1.4 No conflict with other obligations
the execution and delivery of, the performance of their obligations
under, and compliance with the provisions of, the Underlying Documents
and the Security Documents by the relevant Security Parties will not
(i) contravene any existing applicable law, statute, rule or
regulation or any judgment, decree or permit to which any of the
Borrowers or any other Security Party is subject, (ii) conflict with,
or result in any breach of any of the terms of, or constitute a
default under, any agreement or other instrument to which any of the
Borrowers or any other Security Party is a party or is subject or by
which it or any of its property is bound, (iii) contravene or conflict
with any provision of the constitutional documents of any of the
Borrowers or any other Security Party or (iv) result in the creation
or imposition of or oblige any of the Borrowers or any other Security
Party to create any Encumbrance (other than a Permitted Encumbrance)
on any of the undertakings, assets, rights or revenues of any of the
Borrowers or any other Security Party;
25
7.1.5 No litigation
no litigation, arbitration or administrative proceeding is taking
place, pending or, to the knowledge of the officers of any of the
Borrowers (having made the enquiry), threatened against any of the
Borrowers or any of their Related Companies or any other Security
Party which could have a material adverse effect on the business,
assets or financial condition of any of the Borrowers or any of their
Related Companies or any other Security Party;
7.1.6 No filings required
save for the registration of the Mortgages in the relevant register
under the laws of the relevant Flag State through the relevant
Registry, it is not necessary to ensure the legality, validity,
enforceability or admissibility in evidence of the Underlying
Documents or any of the Security Documents that they or any other
instrument be notarised, filed, recorded, registered or enrolled in
any court, public office or elsewhere in any Relevant Jurisdiction or
that any stamp, registration or similar tax or charge be paid in any
Relevant Jurisdiction on or in relation to the Underlying Documents or
the Security Documents and each of the Underlying Documents and the
Security Documents is in proper form for its enforcement in the courts
of each Relevant Jurisdiction;
7.1.7 Choice of law
the choice of English law to govern the Underlying Documents and the
Security Documents (other than the Mortgages and the Retention Account
Pledge) and the choice of (i) Maltese law to govern the Mortgages
(other than the Ocean Mortgage), (ii) Greek law to govern the
Retention Account Pledge and (iii) the law of the Flag State of the
Newbuilding to govern the Ocean Mortgage, and the submissions by the
Security Parties to the non-exclusive jurisdiction of the English
courts are valid and binding;
7.1.8 No immunity
none of the Borrowers nor any other Security Party nor any of their
respective assets is entitled to immunity on the grounds of
sovereignty or otherwise from any legal action or proceeding (which
shall include, without limitation, suit, attachment prior to
judgement, execution or other enforcement); and
7.1.9 Consents obtained
every consent, authorisation, licence or approval of, or registration
with or declaration to, governmental or public bodies or authorities
or courts required by any Security Party to authorise, or required by
any Security Party in connection with, the execution, delivery,
validity, enforceability or admissibility in evidence of each of the
Underlying Documents and the Security Documents to which it is or is
to be a party or the performance by each Security Party of its
obligations under the Security Documents or the Underlying Documents
to which it is or is to be a party has been obtained or made and is in
full force and effect and there has been no default in the observance
of any of the conditions or restrictions (if any) imposed in, or in
connection with, any of the same.
7.2 INITIAL REPRESENTATIONS AND WARRANTIES
The Borrowers jointly and severally further represent and warrant to
each Creditor that:
7.2.1 Pari passu
the obligations of the Borrowers under this Agreement are direct,
general and unconditional obligations of the Borrowers and rank at
least pari passu with all other present and future unsecured and
unsubordinated Indebtedness of the Borrowers;
26
7.2.2 No default under other Indebtedness
none of the Borrowers nor any of their Related Companies nor any other
Security Party is (nor would with the giving of notice or lapse of
time or the satisfaction of any other condition or combination thereof
be) in breach of or in default under any agreement relating to
Indebtedness to which it is a party or by which it may be bound;
7.2.3 Information
the information, exhibits and reports furnished by any Security Party
to the Agent in connection with the negotiation and preparation of the
Security Documents are true and accurate in all material respects and
not misleading, do not omit material facts and all reasonable
enquiries have been made to verify the facts and statements contained
therein; there are no other facts the omission of which would make any
fact or statement therein misleading;
7.2.4 No withholding Taxes
no Taxes are imposed by withholding or otherwise on any payment to be
made by any Security Party under the Underlying Documents or the
Security Documents or are imposed on or by virtue of the execution or
delivery by the Security Parties of the Underlying Documents or the
Security Documents or any other document or instrument to be executed
or delivered under any of the Security Documents;
7.2.5 No Default
no Default has occurred and is continuing;
7.2.6 The Ships
each Ship will on the Drawdown Date of the Advance relevant to such
Ship be:
(a) in the absolute ownership of the relevant Borrower who will on
and after such Drawdown Date be the sole, legal and beneficial
owner of such Ship;
(b) permanently or, as the case may be, provisionally registered
through the offices of the relevant Registry as a Ship under the
laws and flag of the relevant Flag State;
(c) operationally seaworthy and in every way fit for service; and
(d) classed with the relevant Classification free of all requirements
and recommendations of the relevant Classification Society;
7.2.7 Ships' employment
no Ship is nor will on or before the Drawdown Date of the Advance for
such Ship be subject to any charter or contract or to any agreement to
enter into any charter or contract which, if entered into after the
date of the relevant Ship Security Documents would have required the
consent of the Agent or, as the context may require, the Security
Agent and on or before the Drawdown Date of the Advance for such Ship,
there will not be any agreement or arrangement whereby the Earnings
(as defined in the relevant Ship Security Documents) of such Ship may
be shared with any other person;
7.2.8 Freedom from Encumbrances
none of the Ships, nor their Earnings, Insurances or Requisition
Compensation (each as defined in the relevant Ship Security Documents)
nor the Accounts nor any other properties or rights which are, or are
to be, the subject of any of the Security Documents nor any part
27
thereof will be, on the Drawdown Date of the Advance for the relevant
Ship, subject to any Encumbrance;
7.2.9 Environmental Matters
to the best of the knowledge and belief of the Borrowers and their
respective officers (having made due enquiry)
(a) all Environmental Laws applicable to any Fleet Vessel have been
complied with and all consents, licences and approvals required
under such Environmental Laws have been obtained and complied
with;
(b) no Environmental Claim has been made or threatened or pending
against any member of the Borrowers' Group or any Fleet Vessel
and not fully satisfied; and
(c) there has been no Environmental incident,
7.2.10 No material adverse change
there has been no material adverse change in the financial position of
the Borrowers or the Manager or any of them or the consolidated
financial position of the Borrowers, the Manager and their Related
Companies, from that described by the Borrowers to the Agent during
the negotiation of this Agreement; and
7.2.11 Copies true and complete
the copies of the Underlying Documents delivered or to be delivered to
the Agent pursuant to clause 9.1 are, or will when delivered be, true
and complete copies of such documents; and such documents constitute
valid and binding obligations of the parties thereto enforceable in
accordance with their respective terms and there will have been no
amendments or variations thereof or defaults thereunder.
7.3 REPETITION OF REPRESENTATIONS AND WARRANTIES
On and as of each Drawdown Date and (except in relation to the
representations and warranties in clause 7.2) on each Interest Payment
Date, the Borrowers shall:
(a) be deemed to repeat the representations and warranties in clauses
7.1 and 7.2 as if made with reference to the facts and
circumstances existing on such day; and
(b) be deemed to further represent and warrant to each of the
Creditors that the then latest audited financial statements
delivered to the Agent (if any) have been prepared in accordance
with generally accepted international accounting principles and
practices which have been consistently applied and present fairly
and accurately the financial position of each of the Borrowers
and the Manager and the consolidated financial position of their
respective Related Companies as at the end of the financial
period to which the same relate and the results of the operations
of each of the Borrowers, the Manager and their respective
Related Companies for the financial period to which the same
relate and, as at the end of such financial period, none of the
Borrowers nor the Manager nor any of their respective Related
Companies had any significant liabilities (contingent or
otherwise) or any unrealised or anticipated losses which are not
disclosed by, or reserved against or provided for in, such
financial statements.
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8 UNDERTAKINGS
8.1 GENERAL
The Borrowers undertake with each Creditor that, from the date of this
Agreement and so long as any moneys are owing under any of the
Security Documents and while all or any part of the Total Commitment
remains outstanding, they will:
8.1.1 Notice of Default
promptly inform the Agent of any occurrence of which any of them
becomes aware which might adversely affect the ability of any Security
Party to perform its obligations under any of the Security Documents
or the Underlying Documents to which it is or is to be a party and,
without limiting the generality of the foregoing, will inform the
Agent of any Default forthwith upon becoming aware thereof and will
from time to time, if so requested by the Agent, confirm to the Agent
in writing that, save as otherwise stated in such confirmation, no
Default has occurred and is continuing;
8.1.2 Consents and licences
without prejudice to clauses 7.1 and 8.3.15, obtain or cause to be
obtained, maintain in full force and effect and comply in all material
respects with the conditions and restrictions (if any) imposed in, or
in connection with, every consent, authorisation, licence or approval
of governmental or public bodies or authorities or courts and do, or
cause to be done, all other acts and things which may from time to
time be necessary or desirable under applicable law for the continued
due performance of all the obligations of the Security Parties under
each of the Security Documents and the Underlying Documents;
8.1.3 Use of proceeds
use the Advances exclusively for the purposes specified in clauses 1.1
and 2.5;
8.1.4 Pari passu
ensure that their obligations under this Agreement shall, at all
times, rank at least pari passu with all their other present and
future unsecured and unsubordinated Indebtedness with the exception of
any obligations which are mandatorily preferred by law and not by
contract;
8.1.5 Financial statements
prepare or cause to be prepared financial statements of each of the
Borrowers and the Manager and consolidated financial statements of the
Borrowers, the Manager and their respective Related Companies in
accordance with generally accepted international accounting principles
and practices consistently applied in respect of each financial year
and cause the same to be reported on by their respective auditors and
prepare unaudited financial statements of each of the Borrowers and
the Manager and unaudited consolidated financial statements of the
Borrowers, the Manager and their respective Related Companies for each
financial half year on the same basis as the annual statements and
deliver as many copies of the same as the Agent may reasonably require
as soon as practicable but not later than one hundred and fifty (150)
days (in the case of audited financial statements) or ninety (90) days
(in the case of unaudited financial statements) after the end of the
financial period to which they respectively relate;
8.1.6 Delivery of reports
deliver to the Agent as many copies as the Agent may reasonably
require, at the time of issue thereof for all the Banks of every
report, circular, notice or like document issued by any Security Party
or any other Restricted Company to its respective shareholders or
creditors generally;
29
8.1.7 Provision of further information
provide the Agent with such financial or other information concerning
the Borrowers, the other Security Parties and the other Restricted
Companies or any of them and their respective affairs as the Agent,
any Bank or the Swap Provider (acting through the Agent) may from time
to time reasonably require, and keep the Agent advised regularly of
all major financial developments in relation to the Borrowers, the
other Security Parties and their Related Companies or any of them
including, without limitation, in respect of new Borrowed Money and
the sale and acquisition of assets;
8.1.8 Obligations under Security Documents
duly and punctually perform each of the obligations expressed to be
assumed by them under the Security Documents;
8.1.9 Compliance with Code
and will procure that any Operator will, comply with and ensure that
the Ships and any Operator complies with the requirements of the Code,
including (but not limited to) the maintenance and renewal of valid
certificates pursuant thereto throughout the Security Period;
8.1.10 Withdrawal of DOC and SMC
and will procure that any Operator will, immediately inform the Agent
if there is any threatened or actual withdrawal of such Operator's DOC
or the SMC in respect of any of the Ships;
8.1.11 Issuance of DOC and SMC
and will procure that any Operator will, promptly inform the Agent
upon the issue to any of the Borrowers or any Operator of a DOC and to
any of the Ships of an SMC or the receipt by any of the Borrowers or
any Operator of notification that its application for the same has
been refused; and
8.1.12 Charters
without prejudice to the rights of the Agent under the relevant Ship
Security Documents for each Ship (i) deliver to the Agent, a certified
copy of each charter of any Ship of eighteen (18) months or over, (ii)
forthwith on the Agent's request (acting on the instructions of the
Majority Banks) execute (1) a specific assignment (in such form as the
Agent may require) of any such charter in favour of the Security Agent
and (2) any notice of assignment required in connection therewith and
promptly procure the acknowledgement of any such notice of assignment
by the relevant charterer and (iii) pay all legal and other costs
incurred by the Agent in connection with any such specific charter
assignments.
8.2 SECURITY VALUE MAINTENANCE
8.2.1 Security shortfall
If at any time the Security Value shall be less than the Security
Requirement, the Agent (acting on the instructions of the Majority
Banks) may give notice to the Borrowers requiring that such deficiency
be remedied and then the Borrowers shall either:
(a) prepay within a period of fourteen (14) days of the date of
receipt by the Borrowers of the Agent's said notice such sum in
Dollars as will result in the Security Requirement after such
prepayment (taking into account any other repayment of the Loan
made between the date of the notice and the date of such
prepayment) being equal to the Security Value; or
30
(b) within fourteen (14) days of the date of receipt by the Borrowers
of the Agent's said notice constitute to the satisfaction of the
Agent such further security for the Loan as shall be acceptable
to the Banks having a value for security purposes (as determined
by the Agent in its absolute discretion) at the date upon which
such further security shall be constituted which, when added to
the Security Value, shall not be less than the Security
Requirement as at such date.
The provisions of clauses 4.5 and 4.6 shall apply to prepayments under
clause 8.2.1(a).
8.2.2 Valuation of Mortgaged Ships
Each of the Mortgaged Ships shall, for the purposes of this clause
8.2, be valued as and when the Agent shall in its absolute discretion
require, by two independent firms of shipbrokers, appointed by the
Agent in its sole discretion (each such valuation to be made without,
unless required by the Agent, physical inspection, and on the basis of
a sale for prompt delivery for cash at arms' length on normal
commercial terms as between a willing buyer and a willing seller
without taking into account the benefit of any charterparty or other
engagement concerning such Mortgaged Ship). The arithmetic mean of
such valuations shall constitute the value of such Mortgaged Ship for
the purposes of this clause 8.2, provided however that if the two
valuations in respect of a Mortgaged Ship vary by more than fifteen
per cent (15%), the Agent acting in its sole discretion shall appoint
a third independent firm of shipbrokers to value such Mortgaged Ship
on the same basis as the other two (2) valuations and, in that case,
the arithmetic mean of the three valuations shall constitute the value
of such Mortgaged Ship for the purposes of this clause 8.2.
The value of each Mortgaged Ship determined in accordance with the
provisions of this clause 8.2 shall be binding upon the parties hereto
until such time as any further such valuations shall be obtained.
8.2.3 Information
The Borrowers undertake with the Creditors to supply to the Agent and
to any such shipbrokers such information concerning the Mortgaged
Ships and their condition as such shipbrokers may reasonably require
for the purpose of making any such valuations.
8.2.4 Costs
All costs in connection with the Agent obtaining any valuation of each
of the Mortgaged Ships referred to in clause 8.2.2, and any valuation
either of any additional security for the purposes of ascertaining the
Security Value at any time or necessitated by the Borrowers electing
to constitute additional security pursuant to clause 8.2.1(b), shall
be borne by the Borrowers.
8.2.5 Valuation of additional security
For the purpose of this clause 8.2, the market value of any additional
security provided or to be provided to the Agent shall be determined
by the Agent in its reasonable discretion without any necessity for
the Agent assigning any reason thereto.
8.2.6 Documents and evidence
In connection with any additional security provided in accordance with
this clause 8.2, the Agent shall be entitled to receive such evidence
and documents of the kind referred to in schedule 3 as may in the
Agent's opinion be appropriate and such favourable legal opinions as
the Agent shall in its absolute discretion require.
8.3 NEGATIVE UNDERTAKINGS
The Borrowers undertake with each Creditor that, from the date of this
Agreement and so long as any moneys are owing under the Security
Documents and while all or any part of the Total
31
Commitment remains outstanding, they will not, without the prior
written consent of the Agent (acting on the instructions of the
Majority Banks):
8.3.1 Negative pledge
permit any Encumbrance (other than a Permitted Encumbrance) to
subsist, arise or be created or extended over all or any part of their
respective present or future undertakings, assets, rights or revenues
to secure or prefer any present or future Indebtedness or other
liability or obligation of any of the Borrowers or any other person;
8.3.2 No merger
and will procure that no other Restricted Company will, without the
prior written consent of the Agent (acting on the instructions of the
Majority Banks), merge or consolidate with any other person;
8.3.3 Disposals
and will procure that no other Restricted Company will, without the
prior written consent of the Agent (acting on the instructions of the
Majority Banks), sell, transfer, abandon, lend or otherwise dispose of
or cease to exercise direct control over any part (being either alone
or when aggregated with other disposals failing to be taken into
account pursuant to this clause 8.3.3 material in the opinion of the
Agent in relation to the undertakings, assets, rights and revenue of
such Restricted Company) of their present or future undertaking,
assets, rights or revenues (otherwise than by transfers, sales or
disposals for full consideration in the ordinary course of trading)
whether by one or a series of transactions related or not;
8.3.4 Other business
undertake any business other than the ownership and operation of the
Ships and the chartering of the Ships to third parties;
8.3.5 Acquisitions
acquire any further assets other than the Ships and rights arising
under contracts entered into by or on behalf of the Borrowers in the
ordinary course of their businesses of owning, operating and
chartering the Ships;
8.3.6 Other obligations
and will procure that no other Restricted Company will, without the
prior written consent of the Agent (acting on the instructions of the
Majority Banks), incur any obligations except for obligations arising
under the Underlying Documents or the Security Documents or contracts
entered into in the ordinary course of their business of owning,
operating and chartering the Ships;
8.3.7 No borrowing
and will procure that no other Restricted Company will, without the
prior written consent of the Agent (acting on the instructions of the
Majority Banks), incur any Borrowed Money except for Borrowed Money
pursuant to the Security Documents;
8.3.8 Repayment of borrowings
and will procure that no other Restricted Company will, without the
prior written consent of the Agent (acting on the instructions of the
Majority Banks), repay or prepay the principal of, or pay interest on
or any other sum in connection with any of their Borrowed Money except
for Borrowed Money pursuant to the Security Documents;
32
8.3.9 Guarantees
and will procure that no other Restricted Company will, without the
prior written consent of the Agent (acting on the instructions of the
Majority Banks), issue any guarantees or indemnities or otherwise
become directly or contingently liable for the obligations of any
person, firm, or corporation except pursuant to the Security Documents
and except for guarantees or indemnities from time to time required in
the ordinary course by any protection and indemnity or war risks
association with which a Ship is entered, guarantees required to
procure the release of such Ship from any arrest, detention,
attachment or levy or guarantees or undertakings required for the
salvage of a Ship);
8.3.10 Loans
and will procure that no other Restricted Company will, without the
prior written consent of the Agent (acting on the instructions of the
Majority Banks), make any loans or grant any credit (save for normal
trade credit in the ordinary course of business) to any person or
agree to do so;
8.3.11 Sureties
and will procure that no other Restricted Company will, without the
prior written consent of the Agent (acting on the instructions of the
Majority Banks), permit any Indebtedness of any Restricted Company to
any person (other than the Creditors pursuant to the Security
Documents) to be guaranteed by any person (save for guarantees or
indemnities from time to time required in the ordinary course by any
protection and indemnity or war risks association with which a Ship is
entered, guarantees required to procure the release of such Ship from
any arrest, detention, attachment or levy or guarantees or
undertakings required for the salvage of a Ship);
8.3.12 Share capital and distribution
purchase or otherwise acquire for value any shares of their capital or
declare or pay any dividends or distribute any of their present or
future assets, undertakings, rights or revenues to any of their
shareholders;
8.3.13 Subsidiaries
form or acquire any Subsidiaries;
8.3.14 Change of management of the Ships - change of names
appoint any person to manage the Ships or any of them other than the
Manager or change the name of any of the Borrowers or the Manager; or
8.3.15 Designated Transactions
enter into any derivative transactions other than Designated
Transactions.
9 CONDITIONS
9.1 DOCUMENTS AND EVIDENCE
The obligation of each Bank to make its Commitment available shall be
subject to the condition that the Agent, or its duly authorised
representative, shall have received:
9.1.1 not later than two (2) Banking Days before the day on which the
Drawdown Notice for the first Advance is given, the documents and
evidence specified in Part 1 of schedule 3 in form and substance
satisfactory to the Agent;
33
9.1.2 on or prior to the Drawdown Date for the Refinancing Advance, the
documents and evidence specified in Part 2 of schedule 3 in form and
substance satisfactory to the Agent; and
9.1.3 on or prior to the Drawdown Date for the Newbuilding Advance, the
documents and evidence specified in Part 3 of schedule 3 in relation
to the Delivery Tranche and those specified in Part 4 of schedule 3 in
relation to the LTC Tranche, in each case in form and substance
satisfactory to the Agent.
9.2 GENERAL CONDITIONS PRECEDENT
The obligation of the Banks to make either Advance shall be subject to
the further conditions that, at the time of the giving of the Drawdown
Notice for such Advance, and at the time of the making of such
Advance:
9.2.1 the representations and warranties contained in clauses 7.1, 7.2 and
7.3(b), are true and correct on and as of each such time as if each
was made with respect to the facts and circumstances existing at such
time; and
9.2.2 no Default shall have occurred and be continuing or would result from
the making of the relevant Advance.
9.3 WAIVER OF CONDITIONS PRECEDENT
The conditions specified in this clause 9 are inserted solely for the
benefit of the Banks and may be waived by the Agent in whole or in
part and with or without conditions.
9.4 FURTHER CONDITIONS PRECEDENT
Not later than five (5) Banking Days prior to each Drawdown Date and
not later than five (5) Banking Days prior to each Interest Payment
Date, the Agent (acting on the instructions of the Majority Banks) may
request and the Borrowers shall, not later than two (2) Banking Days
prior to such date, deliver to the Agent on such request further
relevant certificates and/or favourable opinions as to any or all of
the matters which are the subject of clauses 7, 8, 9 and 10.
10 EVENTS OF DEFAULT
10.1 EVENTS
There shall be an Event of Default if:
10.1.1 NON-PAYMENT: any Security Party fails to pay any sum payable by it
under any of the Security Documents at the time, in the currency and
in the manner stipulated in the Security Documents (and so that, for
this purpose, sums payable on demand shall be treated as having been
paid at the stipulated time if paid within three (3) Banking Days of
demand); or
10.1.2 MASTER SWAP AGREEMENT: (a) an Event of Default (in each case as
defined in the Master Swap Agreement) has occurred and is continuing
with the Borrowers as the Defaulting Party (as defined in the Master
Swap Agreement) under the Master Swap Agreement or (b) an Early
Termination Date has occurred or been or become capable of being
effectively designated under the Master Swap Agreement by the Swap
Provider or (c) the Master Swap Agreement is terminated, cancelled,
suspended, rescinded or revoked or otherwise ceases to remain in full
force and effect for any reason other than by the mutual agreement of
the parties there; or
10.1.3 BREACH OF INSURANCE AND CERTAIN OTHER OBLIGATIONS: any of the
Borrowers or, as the context may require, the Manager fails to obtain
and/or maintain the Insurances (as defined or to be defined in, and in
accordance with the requirements of, the Ship Security Documents) for
any of the Mortgaged Ships or if any insurer in respect of such
Insurances cancels the Insurances or disclaims liability by reason, in
either case, of mis-statement in any proposal for the Insurances or
for any other failure or default on the part of any of the
34
Borrowers or the Manager or any other person or if any of the
Borrowers commits any breach of or omits to observe any of the
obligations or undertakings expressed to be assumed by them under
clauses 8.2 or 8.3; or
10.1.4 BREACH OF OTHER OBLIGATIONS: any Security Party commits any breach of
or omits to observe any of its obligations or undertakings expressed
to be assumed by it under any of the Security Documents (other than
those referred to in clauses 10.1.1, 10.1.2 and 10.1.3 above) and, in
respect of any such breach or omission which in the opinion of the
Agent (following consultation with the Banks) is capable of remedy,
such action as the Agent (acting on the instructions of the Majority
Banks) may require shall not have been taken within fourteen (14) days
of the Agent notifying the relevant Security Party of such default and
of such required action; or
10.1.5 MISREPRESENTATION: any representation or warranty made or deemed to be
made or repeated by or in respect of any Security Party in or pursuant
to any of the Security Documents or in any notice, certificate or
statement referred to in or delivered under any of the Security
Documents is or proves to have been incorrect or misleading in any
material respect; or
10.1.6 CROSS-DEFAULT: any Indebtedness of any Security Party or any other
Restricted Company is not paid when due or any Indebtedness of any
Security Party or any other Restricted Company becomes (whether by
declaration or automatically in accordance with the relevant agreement
or instrument constituting the same) due and payable prior to the date
when it would otherwise have become due (unless as a result of the
exercise by the relevant Security Party or any other Restricted
Company of a voluntary right of prepayment), or any creditor of any
Security Party or any other Restricted Company becomes entitled to
declare any such Indebtedness due and payable or any facility or
commitment available to any Security Party or any other Restricted
Company relating to Indebtedness is withdrawn, suspended or cancelled
by reason of any default (however described) of the person concerned
unless the relevant Security Party or other Restricted Company shall
have satisfied the Agent that such withdrawal, suspension or
cancellation will not affect or prejudice in any way the relevant
Security Party's or other Restricted Company's ability to pay its
debts as they fall due and fund its commitments, or any guarantee
given by any Security Party or other Restricted Company in respect of
indebtedness is not honoured when due and called upon; or
10.1.7 LEGAL PROCESS: any judgment or order made against any Security Party
or other Restricted Company is not stayed or complied with within
seven (7) days or a creditor attaches or takes possession of, or a
distress, execution, sequestration or other process is levied or
enforced upon or sued out against, any of the undertakings, assets,
rights or revenues of any Security Party and is not discharged within
seven (7) days; or
10.1.8 INSOLVENCY: any Security Party or any other Restricted Company becomes
insolvent or stops or suspends making payments (whether of principal
or interest) with respect to all or any class of its debts or
announces an intention to do so; or
10.1.9 REDUCTION OR LOSS OF CAPITAL: a meeting is convened by any Security
Party or other Restricted Company for the purpose of passing any
resolution to purchase, reduce or redeem any of its share capital; or
10.1.10 WINDING UP: any petition is presented or other step is taken for the
purpose of winding-up any Security Party or any other Restricted
Company or an order is made or resolution passed for the winding up of
any Security Party or other Restricted Company or a notice is issued
convening a meeting for the purpose of passing any such resolution; or
10.1.11 ADMINISTRATION: any petition is presented or other step is taken for
the purpose of the appointment of an administrator of any Security
Party or any other Restricted Company or the Agent believes that any
such petition or other step is imminent or an administration order is
made in relation to any Security Party or any other Restricted
Company; or
35
10.1.12 APPOINTMENT OF RECEIVERS AND MANAGERS: any administrative or other
receiver is appointed of any Security Party or any other Restricted
Company or any part of its assets and/or undertaking or any other
steps are taken to enforce any Encumbrance over all or any part of the
assets of any Security Party or other Restricted Company; or
10.1.13 COMPOSITIONS: any steps are taken, or negotiations commenced, by any
Security Party or any other Restricted Company or by any of its
creditors with a view to the general readjustment or rescheduling of
all or part of its indebtedness or to proposing any kind of
composition, compromise or arrangement involving such company and any
of its creditors; or
10.1.14 ANALOGOUS PROCEEDINGS: there occurs, in relation to any Security Party
or other Restricted Company, in any country or territory in which any
of them carries on business or to the jurisdiction of whose courts any
part of their assets is subject, any event which, in the reasonable
opinion of the Agent, appears in that country or territory to
correspond with, or have an effect equivalent or similar to, any of
those mentioned in clauses 10.1.7 to 10.1.13 (inclusive) or any
Security Party or other Restricted Company otherwise becomes subject,
in any such country or territory, to the operation of any law relating
to insolvency, bankruptcy or liquidation; or
10.1.15 CESSATION OF BUSINESS: any Security Party or any other Restricted
Company suspends or ceases or threatens to suspend or cease to carry
on its business; or
10.1.16 SEIZURE: all or a material part of the undertaking, assets, rights or
revenues of, or shares or other ownership interests in, any Security
Party or any other Restricted Company are seized, nationalised,
expropriated or compulsorily acquired by or under the authority of any
government; or
10.1.17 INVALIDITY: any of the Security Documents shall at any time and for
any reason become invalid or unenforceable or otherwise cease to
remain in full force and effect, or if the validity or enforceability
of any of the Security Documents shall at any time and for any reason
be contested by any Security Party which is a party thereto, or if any
such Security Party shall deny that it has any, or any further,
liability thereunder; or
10.1.18 UNLAWFULNESS: it becomes impossible or unlawful at any time for any
Security Party, to fulfil any of the covenants and obligations
expressed to be assumed by it in any of the Security Documents or for
a Creditor to exercise the rights or any of them vested in it under
any of the Security Documents or otherwise; or
10.1.19 REPUDIATION: any Security Party repudiates any of the Security
Documents or does or causes or permits to be done any act or thing
evidencing an intention to repudiate any of the Security Documents; or
10.1.20 ENCUMBRANCES ENFORCEABLE: any Encumbrance {other than Permitted Liens)
in respect of any of the property (or part thereof) which is the
subject of any of the Security Documents becomes enforceable; or
10.1.21 MATERIAL ADVERSE CHANGE: there occurs, in the opinion of the Agent
(following consultation with the Banks), a material adverse change in
the financial condition of any Security Party or any other Restricted
Company or the consolidated financial position of the Borrowers, the
Manager and their respective Related Companies by reference to the
financial position of such Security Party or other Restricted Company
or, as the case may be, the consolidated financial position of the
Borrowers, the Manager and their respective Related Companies as
described by any Borrower or any Security Party or any other
Restricted Company to the Agent in the negotiation of this Agreement;
or
10.1.22 ARREST: any Ship is arrested, confiscated, seized, taken in execution,
impounded, forfeited, detained in exercise or purported exercise of
any possessory lien or other claim or otherwise taken from the
possession of the relevant Borrower and the relevant Borrower shall
fail to procure the release of such Ship within a period of fourteen
(14) days thereafter; or
36
10.1.23 REGISTRATION: the registration of any Ship under the laws and flag of
the relevant Flag State is cancelled or terminated without the prior
written consent of the Agent (following consultation with the Banks)
or, if the Newbuilding is only provisionally registered on the
Delivery Date and is not permanently registered under the laws and
flag of the relevant Flag State within ninety (90) days after the
Drawdown Date of the Newbuilding Advance or if such registration of
such Ship is not renewed at least forty-five (45) days prior to the
expiry of such registration; or
10.1.24 UNREST: the Flag State of any Ship becomes involved in hostilities or
civil war or there is a seizure of power in such Flag State by
unconstitutional means if, in any such case, such event could in the
opinion of the Agent (following consultation with the Banks)
reasonably be expected to have a material adverse effect on the
security constituted by any of the Security Documents; or
10.1.25 ENVIRONMENTAL INCIDENTS: there is an Environmental Incident which
gives rise, or may give rise, to Environmental Claims which could, in
the opinion of the Agent be expected to have a material adverse effect
(i) on the business, assets, operations, property or financial
condition of any Security Party or the Borrowers' Group taken as a
whole or (ii) on the security constituted by any of the Security
Documents or the enforceability of that security in accordance with
its terms; or
10.1.26 P&I: any Borrower or any other person fails or omits to comply with
any requirements of the protection and indemnity association or other
insurer with which a Ship is entered for insurance or insured against
protection and indemnity risks (including oil pollution risks) to the
effect that any cover (including, without limitation, any cover in
respect of liability for Environmental Claims arising in jurisdictions
where such Ship operates or trades) is or may be liable to
cancellation, qualification or exclusion at any time; or
10.1.27 MATERIAL EVENTS: any other event occurs or circumstance arises which,
in the opinion of the Agent (following consultation with the Banks),
is likely materially and adversely to affect either (i) the ability of
any Security Party to perform all or any of its obligations under or
otherwise to comply with the terms of any of the Security Documents or
(ii) the security created by any of the Security Documents; or
10.1.28 ACCOUNTS: moneys are withdrawn from any of the Accounts other than in
accordance with clause 14; or
10.1.29 BREACH OF MINISTERIAL DECISION: in case the Flag State of the
Newbuilding is Greece, the Ocean Borrower commits any breach of or
varies the Ministerial Decision (as defined in the Ocean Mortgage) or
cancels the Ministerial Decision without the previous written consent
of the Agent (acting on the instructions of the Majority Banks) which
consent the Agent shall have full liberty to withhold.
10.2 ACCELERATION
The Agent may, if so requested by the Majority Banks, without
prejudice to any other rights of the Banks, at any time after the
happening of an Event of Default by notice to the Borrowers declare
that:
10.2.1 the obligation of each Bank to make its Commitment available shall be
terminated, whereupon the Total Commitment shall be reduced to zero
forthwith; and/or
10.2.2 the Loan and all interest and commitment commission accrued and all
other sums payable under the Security Documents have become due and
payable, whereupon the same shall, immediately or in accordance with
the terms of such notice, become due and payable.
10.3 DEMAND BASIS
If, pursuant to clause 10.2.2, the Agent declares the Loan to be due
and payable on demand, the Agent may (and if so instructed by the
Majority Banks shall) by written notice to the
37
Borrowers (a) call for repayment of the Loan on such date as may be
specified whereupon the Loan shall become due and payable on the date
so specified together with all interest and commitment commission
accrued and all other sums payable under this Agreement or (b)
withdraw such declaration with effect from the date specified in such
notice.
10.4 POSITION OF SWAP PROVIDER
Neither the Agent nor the Security Agent shall be obliged, in
connection with any action taken or proposed to be taken under or
pursuant to the foregoing provisions of this clause 10, to have any
regard to the requirements of the Swap Provider except to the extent
that the Swap Provider is also a Bank.
11 INDEMNITIES
11.1 MISCELLANEOUS INDEMNITIES
The Borrowers shall on demand indemnify each Creditor, without
prejudice to any of such Creditor's other rights under any of the
Security Documents, against any loss (including loss of Margin) or
expense which such Creditor shall certify as sustained or incurred by
it as a consequence of:
11.1.1 any default in payment by the Borrowers of any sum under any of the
Security Documents when due;
11.1.2 the occurrence of any other Event of Default;
11.1.3 any prepayment of the Loan or part thereof being made under clause
4.3, 8.2.1(a) or 12.1 or any other repayment or prepayment of the
Loan or part thereof being made otherwise than on an Interest Payment
Date relating to the part of the Loan prepaid or repaid;
11.1.4 either Advance not being made for any reason (excluding any default by
the Agent or any Bank) after the Drawdown Notice for such Advance has
been given; or
11.1.5 the exercise of the deferral option by the Borrowers pursuant to
clause 4.4 in respect of a relevant repayment instalment,
including, in any such case, but not limited to, any loss or expense
sustained or incurred by the relevant Creditor in maintaining or
funding its Contribution or, as the case may be, Commitment or any
part thereof or in liquidating or re-employing deposits from third
parties acquired to effect or maintain its Contribution or, as the
case may be, Commitment or any part thereof or any other amount owing
to such Creditor.
11.2 CURRENCY INDEMNITY
If any sum due from any of the Borrowers under any of the Security
Documents or any order or judgment given or made in relation thereto
has to be converted from the currency (the "FIRST CURRENCY") in which
the same is payable under the relevant Security Document or under such
order or judgment into another currency (the "SECOND CURRENCY") for
the purpose of (a) making or filing a claim or proof against the
Borrowers (b) obtaining an order or judgment in any court or other
tribunal or (c) enforcing any order or judgment given or made in
relation to any of the Security Documents, the Borrowers shall
indemnify and hold harmless each Creditor from and against any loss
suffered as a result of any difference between (i) the rate of
exchange used for such purpose to convert the sum in question from the
first currency into the second currency and (ii) the rate or rates of
exchange at which the relevant Creditor may in the ordinary course of
business purchase the first currency with the second currency upon
receipt of a sum paid to it in satisfaction, in whole or in part, of
any such order, judgment, claim or proof. Any amount due from the
Borrowers under this clause 11.2 shall be due as a separate debt and
shall not be affected by judgment being obtained for any other sums
due under or in respect of any of the Security Documents and the term
"RATE OF EXCHANGE" includes any premium and costs of
38
exchange payable in connection with the purchase of the first currency
with the second currency.
11.3 ENVIRONMENTAL INDEMNITY
The Borrowers shall indemnify each Creditor on demand in respect of
all costs, claims, expenses, losses, demands, liabilities, penalties
and fines of whatever nature including, without limitation those
arising under Environmental Laws which may be incurred or made against
such Creditor at any time, relating to, or arising directly or
indirectly in any manner or for any cause or reason whatsoever out of
an Environmental Claim made or asserted against such Creditor if such
Environmental Claim would not have been brought against such Creditor
if it had not entered into any of the Security Documents and/or been
involved in any of the transactions contemplated by the Security
Documents.
11.4 CENTRAL BANK OR EUROPEAN CENTRAL BANK RESERVE REQUIREMENTS INDEMNITY
The Borrowers shall on demand promptly indemnify the Banks against any
cost incurred or loss suffered by any of them as a result of complying
with the minimum reserve requirements of the relevant national central
bank or the European Central Bank and/or with respect to maintaining
required reserves with the relevant national central bank to the
extent that such compliance relates to a Bank's Commitment and/or
Contribution or the Loan or part thereof or deposits obtained by it to
fund or maintain the whole or part of the Loan.
12 UNLAWFULNESS AND INCREASED COSTS
12.1 UNLAWFULNESS
If it is or becomes contrary to any law or regulation for any Bank to
contribute to an Advance or to maintain its Commitment or fund its
Contribution, such Bank shall promptly, through the Agent, give notice
to the Borrowers whereupon (a) such Bank's Commitment shall be reduced
to zero and (b) the Borrowers shall be obliged to prepay such Bank's
Commitment either (i) forthwith or (ii) on a future specified date not
being earlier than the latest date permitted by the relevant law or
regulation together with interest and commitment commission accrued to
the date of prepayment and all other sums payable by the Borrowers
under this Agreement and/or, if requested by the Agent, the Master
Swap Agreement which relate specifically to that portion of the Loan
being prepaid.
12.2 INCREASED COSTS
If the result of any change in, or in the interpretation or
application of, or the introduction of, any law or any regulation,
request or requirement (whether or not having the force of law, but,
if not having the force of law, with which the relevant Bank or, as
the case may be, its holding company habitually complies), including
(without limitation) those relating to Taxation, capital adequacy,
liquidity, reserve assets, cash ratio deposits and special deposits,
is to:
12.2.1 subject any Bank to Taxes or change the basis of Taxation of any Bank
with respect to any payment under any of the Security Documents (other
than Taxes or Taxation on the overall net income, profits or gains of
such Bank imposed in the jurisdiction in which its principal or
lending office under this Agreement is located); and/or
12.2.2 increase the cost to, or impose an additional cost on, any Bank or its
holding company in making or keeping such Bank's Commitment available
or maintaining or funding all or part of such Bank's Contribution;
and/or
12.2.3 reduce the amount payable or the effective return to any Bank under
any of the Security Documents; and/or
39
12.2.4 reduce any Bank's or its holding company's rate of return on its
overall capital by reason of a change in the manner in which it is
required to allocate capital resources to such Bank's obligations
under any of the Security Documents; and/or
12.2.5 require any Bank or its holding company to make a payment or forgo a
return on or calculated by reference to any amount received or
receivable by such Bank under any of the Security Documents; and/or
12.2.6 require any Bank or its holding company to incur or sustain a loss
(including a loss of future potential profits) by reason of being
obliged to deduct all or part of its Commitment or the Loan from its
capital for regulatory purposes,
then and in each such case (subject to clause 12.3):
(a) such Bank shall notify the Borrowers in writing of such event
promptly upon its becoming aware of the same; and
(b) the Borrowers shall on demand made at any time whether or not
such Bank's Contribution has been repaid, pay to the Agent for
the account of such Bank the amount which such Bank specifies (in
a certificate setting forth the basis of the computation of such
amount but not including any matters which such Bank or its
holding company regards as confidential) is required to
compensate such Bank and/or (as the case may be) its holding
company for such liability to Taxes, cost, reduction, payment,
forgone return or loss.
For the purposes of this clause 12.2 "HOLDING COMPANY" means the
company or entity (if any) within the consolidated supervision of
which a Bank is included.
12.3 EXCEPTION
Nothing in clause 12.2 shall entitle any Bank to receive any amount in
respect of compensation for any such liability to Taxes, increased or
additional cost, reduction, payment, foregone return or loss to the
extent that the same is the subject of an additional payment under
clause 6.6.1.
13 SECURITY, SET-OFF AND PRO-RATA PAYMENTS
13.1 APPLICATION OF MONEYS
All moneys received by any Creditor under or pursuant to any of the
Security Documents and expressed to be applicable in accordance with
the provisions of this clause 13, shall, if received by a Creditor
other than the Agent and the Security Agent, be paid to the Agent for
application, and if received by the Agent or the Security Agent shall
be applied by the Agent and/or the Security Agent (as the case may
be), in the following manner:
13.1.1 first, in or towards payment of all unpaid costs and expenses which
may be owing to the Creditors or any of them under any of the Security
Documents;
13.1.2 secondly, in or towards payment of any unpaid fees and commitment
commission payable to the Creditors or any of them;
13.1.3 thirdly, in or towards payment of any arrears of interest owing in
respect of the Loan or any part thereof;
13.1.4 fourthly, in or towards repayment of the Loan outstanding (whether the
same is due and payable or not and on a pro rata basis);
13.1.5 fifthly, in or towards payment to any Bank for any loss suffered by
reason of any such payment in respect of principal not being effected
on an Interest Payment Date relating to the part of the Loan repaid;
40
13.1.6 sixthly, in or towards payment to any Creditor of any other sums owing
to it under any of the Security Documents (other than the Master Swap
Agreement); and
13.1.7 seventhly, in or towards payment to the Swap Provider of any sums
owing to it under the Master Swap Agreement; and
13.1.8 eighthly, the surplus (if any) shall be paid to the Borrowers or to
whomsoever else may be entitled to receive such surplus.
13.2 SET-OFF
13.2.1 Each Borrower authorises each Creditor (without prejudice to any of
such Creditor's rights at law, in equity or otherwise), at any time
and without notice to the Borrowers or any of them, to apply any
credit balance to which the Borrowers or any of them is then entitled
standing upon any account of the Borrowers or any of them with any
branch of such Creditor in or towards satisfaction of any sum due and
payable from the Borrowers to such Creditor under any of the Security
Documents. For this purpose, each Creditor is authorised to purchase
with the moneys standing to the credit of such account such other
currencies as may be necessary to effect such application. No Creditor
shall be obliged to exercise any right given to it by this clause
13.2.
13.2.2 Without prejudice to its rights hereunder, each Creditor may at the
same time as, or at any time after, any Event of Default shall occur
under this Agreement or the Borrowers' default (or the Borrowers
becoming an Affected Party (as defined in the Master Swap Agreement))
under the Master Swap Agreement, in each case where such Event of
Default or, as the case may be, default is continuing, set-off any
amount due now or in the future from the Borrowers to such Creditor
under this Agreement against any amount due from the Swap Provider to
the Borrowers under the Master Swap Agreement and apply the second
amount in discharging the first amount. The effect of any set-off
under this sub-clause 13.2.2 shall be effective to extinguish or, as
the case may require, reduce the liabilities of the Swap Provider
under the Master Swap Agreement.
Each Creditor shall notify the Borrowers through the Agent forthwith
upon the exercise or purported exercise of any right of set-off giving
full details in relation thereto and the Agent shall inform the other
Creditors.
Nothing in this clause 13.2 shall be effective to create a charge or
other security interest.
13.3 PRO RATA PAYMENTS
13.3.1 If at any time any Bank (the "RECOVERING BANK") receives or recovers
any amount owing to it by the Borrowers under this Agreement by direct
payment, set-off or in any manner other than by payment through the
Agent pursuant to clause 6.1 or 6.10 (not being a payment received
from a Transferee Bank or a sub-participant in such Bank's
Contribution or any other payment of an amount due to the Recovering
Bank for its sole account pursuant to clauses 3.6, 5, 6.6.1, 11.1,
11.2, 12.1, or 12.2) the Recovering Bank shall, within two (2) Banking
Days of such receipt or recovery (a "RELEVANT RECEIPT") notify the
Agent of the amount of the Relevant Receipt. If the Relevant Receipt
exceeds the amount which the Recovering Bank would have received if
the Relevant Receipt had been received by the Agent and distributed
pursuant to clause 6.1 or 6.10 (as the case may be) then:
(a) within two (2) Banking Days of demand by the Agent, the
Recovering Bank shall pay to the Agent an amount equal (or
equivalent) to the excess;
(b) the Agent shall treat the excess amount so paid by the Recovering
Bank as if it were a payment made by the Borrowers and shall
distribute the same to the Banks (other than the Recovering Bank)
in accordance with clause 6.10; and
(c) as between the Borrowers and the Recovering Bank the excess
amount so re-distributed shall be treated as not having been paid
but the obligations of the Borrowers
41
to the other Banks shall, to the extent of the amount so
re-distributed to them, be treated as discharged.
13.3.2 If any part of the Relevant Receipt subsequently has to be wholly or
partly refunded by the Recovering Bank (whether to a liquidator or
otherwise) each Bank to which any part of such Relevant Receipt was so
re-distributed shall on request from the Recovering Bank repay to the
Recovering Bank such Bank's pro-rata share of the amount which has to
be refunded by the Recovering Bank.
13.3.3 Each Bank shall on request supply to the Agent such information as the
Agent may from time to time request for the purpose of this clause
13.3.
13.3.4 Notwithstanding the foregoing provisions of this clause 13.3, no
Recovering Bank shall be obliged to share any Relevant Receipt which
it receives or recovers pursuant to legal proceedings taken by it to
recover any sums owing to it under this Agreement with any other party
which has a legal right to, but does not, either join in such
proceedings or commence and diligently pursue separate proceedings to
enforce its rights in the same or another court (unless the
proceedings instituted by the Recovering Bank are instituted by it
without prior notice having been given to such party through the
Agent).
13.4 NO RELEASE
For the avoidance of doubt it is hereby declared that failure by any
Recovering Bank to comply with the provisions of clause 13.3 shall not
release any other Recovering Bank from any of its obligations or
liabilities under clause 13.3.
13.5 NO CHARGE
The provisions of this clause 13 shall not, and shall not be construed
so as to, constitute a charge by a Bank over all or any part of a sum
received or recovered by it in the circumstances mentioned in clause
13.3.
13.6 FURTHER ASSURANCE
The Borrowers jointly and severally undertake that the Security
Documents shall both at the date of execution and delivery thereof and
so long as any moneys are owing under any of the Security Documents be
valid and binding obligations of the respective parties thereto and
rights of each Bank enforceable in accordance with their respective
terms and that they will, at their expense, execute, sign, perfect and
do, and will procure the execution, signing, perfecting and doing by
each of the other Security Parties of, any and every such further
assurance, document, act or thing as in the reasonable opinion of the
Majority Banks may be necessary or desirable for perfecting the
security contemplated or constituted by the Security Documents.
13.7 CONFLICTS
In the event of any conflict between this Agreement and any of the
other Borrowers' Security Documents, the provisions of this Agreement
shall prevail.
14 ACCOUNTS
14.1 GENERAL
The Borrowers jointly and severally undertake with each Creditor that
they will:
14.1.1 on or before the Drawdown Date for the first Advance open each of the
Accounts; and
14.1.2 procure that all moneys payable to each Borrower in respect of the
Earnings of such Borrower's Ship and any moneys payable to such
Borrower by the Swap Provider pursuant to the Master Swap Agreement
shall, unless and until the Agent (acting on the instructions of the
Majority
42
Banks) directs to the contrary pursuant to the relevant clause of the
Ship Security Documents, be paid to the Operating Account relevant to
such Borrower (in the case of Earnings of such Borrower's Ship) or to
any Operating Account (in the case of moneys payable to such Borrower
pursuant to the Master Swap Agreement) Provided however that if any of
the moneys paid to any Operating Account are payable in a currency
other than Dollars, the Account Bank shall (and the Borrowers hereby
irrevocably instruct the Account Bank to) convert such moneys into
Dollars at the Account Bank's spot rate of exchange at the relevant
time for the purchase of Dollars with such currency and the term "SPOT
RATE OF EXCHANGE" shall include any premium and costs of exchange
payable in connection with the purchase of Dollars with such currency.
14.2 OPERATING ACCOUNTS: WITHDRAWALS
Unless and until a Default shall occur and the Agent (acting on the
instructions of the Majority Banks) shall direct to the contrary, each
Borrower shall be entitled to withdraw any moneys standing to the
credit of the Operating Account relating to its Ship, provided always
that, prior to any Borrower making a withdrawal from such Borrower's
Operating Account, the Borrowers shall have first transferred to the
Retention Account on each Retention Date falling prior to the date of
such withdrawal, the whole of the Retention Amount or Retention
Amounts for such Retention Date or, as the case may be, Retention
Dates.
14.3 RETENTION ACCOUNT: CREDITS AND WITHDRAWALS
14.3.1 The Borrowers hereby jointly and severally undertake with each
Creditor that they will, from the date of this Agreement and so long
as any moneys are owing under the Security Documents, on each
Retention Date, pay to the Account Bank for credit to the Retention
Account for such Retention Date, the Retention Amount for such
Retention Date provided however that, to the extent that there are
moneys standing to the credit of the Operating Accounts (or any of
them) as of the relevant Retention Date such moneys shall, up to an
amount equal to the Retention Amount, be transferred to the Retention
Account on that Retention Date (and the Borrowers hereby irrevocably
authorise the Account Bank to effect each such transfer) and to that
extent the Borrowers' obligations to make the payments referred to in
this clause 14.3.1 shall have been fulfilled upon such transfer being
effected and shall be strictly without prejudice to the obligations of
each of the Borrowers to make any such payment to the extent that the
aforesaid transfer by the Account Bank is insufficient to meet the
same.
14.3.2 Unless and until there shall occur an Event of Default (whereupon the
provisions of clause 14.4 shall apply), all Retention Amounts credited
to the Retention Account together with interest from time to time
accruing or at any time accrued thereon shall be applied by the
Account Bank (and the Borrowers hereby irrevocably authorise the
Account Bank so to apply the same) upon each Repayment Date in respect
of the relevant Advance, and on each day that interest is payable
pursuant to clause 3.1, in or towards payment to the Agent of the
instalment then falling due for repayment or (as the case may be) the
amount of interest then due. Each such application by the Account Bank
shall constitute a payment in or towards satisfaction of the
Borrowers' corresponding payment obligations under this Agreement but
shall be strictly without prejudice to the obligations of each of the
Borrowers to make any such payment to the extent that the aforesaid
application by the Account Bank is insufficient to meet the same.
14.3.3 Unless the Agent (acting on the instructions of the Majority Banks)
otherwise agrees in writing and subject to clause 14.3.2, none of the
Borrowers shall be entitled to withdraw any moneys from the Retention
Account at any time from the date of this Agreement and so long as any
moneys are owing under the Security Documents.
14.4 APPLICATION OF ACCOUNTS
At any time after the occurrence of an Event of Default, the Agent may
(and on the instructions of the Majority Banks shall), without notice
to the Borrowers, instruct the Account Bank to apply all moneys then
standing to the credit of the Accounts or any of them (together with
interest
43
from time to time accruing or accrued thereon) in or towards
satisfaction of any sums due to the Creditors or any of them under the
Security Documents in the manner specified in clause 13.1.
14.5 CHARGING OF ACCOUNT
The Retention Account and all amounts from time to time standing to
the credit thereof shall be subject to the security constituted and
the rights conferred by the Retention Account Pledge.
15 ASSIGNMENT, TRANSFER AND LENDING OFFICE
15.1 BENEFIT AND BURDEN
This Agreement shall be binding upon, and enure for the benefit of,
the Creditors and the Borrowers and their respective successors in
title.
15.2 NO ASSIGNMENT BY BORROWERS
None of the Borrowers may assign or transfer any of its rights or
obligations under this Agreement.
15.3 TRANSFERS BY BANKS
Subject to the prior written consent of the Agent and the Borrowers
(such consent in the case of the Borrowers not to be unreasonably
withheld and the request for which shall be promptly responded to by
the Borrowers), any Bank (the "TRANSFEROR BANK") may at any time cause
all or any part of its rights, benefits and/or obligations under this
Agreement and the Security Documents to be transferred to any other
bank or financial institution (a "TRANSFEREE BANK") by delivering to
the Agent a Transfer Certificate duly completed and duly executed by
the Transferor Bank and the Transferee Bank. No such transfer is
binding on, or effective in relation to, the Borrowers or the Agent
unless (i) it is effected or evidenced by a Transfer Certificate which
complies with the provisions of this clause 15.3 and is signed by or
on behalf of the Transferor Bank, the Transferee Bank and the Agent
(on behalf of itself, the Borrowers and the other Creditors) and (ii)
such transfer of rights under the other Security Documents has been
effected and registered. Upon signature of any such Transfer
Certificate by the Agent, which signature shall be effected as
promptly as is practicable after such Transfer Certificate has been
delivered to the Agent, and subject to the terms of such Transfer
Certificate, such Transfer Certificate shall have effect as set out
below.
The following further provisions shall have effect in relation to any
Transfer Certificate:
15.3.1 a Transfer Certificate may be in respect of a Bank's rights in respect
of all, or part of, its Commitment and shall be in respect of the same
proportion of its Contribution;
15.3.2 a Transfer Certificate shall only be in respect of rights and
obligations of the Transferor Bank in its capacity as a Bank and shall
not transfer its rights and obligations as the Agent, or in any other
capacity, as the case may be and such other rights and obligations may
only be transferred in accordance with any applicable provisions of
this Agreement;
15.3.3 a Transfer Certificate shall take effect in accordance with English
law as follows:
(a) to the extent specified in the Transfer Certificate, the
Transferor Bank's payment rights and all its other rights (other
than those referred to in paragraph 15.3.2 above) under this
Agreement are assigned to the Transferee Bank absolutely, free of
any defects in the Transferor Bank's title and of any rights or
equities which the Borrowers had against the Transferor Bank;
(b) the Transferor Bank's Commitment is discharged to the extent
specified in the Transfer Certificate;
44
(c) the Transferee Bank becomes a Bank with a Contribution and/or a
Commitment of the amounts specified in the Transfer Certificate;
(d) the Transferee Bank becomes bound by all the provisions of this
Agreement and the Security Documents which are applicable to the
Banks generally, including those about pro-rata sharing and the
exclusion of liability on the part of, and the indemnification
of, the Agent in accordance with the provisions of the Agency
Agreement and to the extent that the Transferee Bank becomes
bound by those provisions, the Transferor Bank ceases to be bound
by them;
(e) an Advance or part of an Advance which the Transferee Bank makes
after the Transfer Certificate comes into effect ranks in point
of priority and security in the same way as it would have ranked
had it been made by the Transferor Bank, assuming that any
defects in the Transferor Bank's title and any rights or equities
of any Security Party against the Transferor Bank had not
existed; and
(f) the Transferee Bank becomes entitled to all the rights under this
Agreement which are applicable to the Banks generally, including
but not limited to those relating to the Majority Banks and those
under clause 3.6, 5 and 12 and to the extent that the Transferee
Bank becomes entitled to such rights, the Transferor Bank ceases
to be entitled to them;
15.3.4 the rights and equities of the Borrowers or of any other Security
Party referred to above include, but are not limited to, any right of
set-off and any other kind of cross-claim; and
15.3.5 the Borrowers, the Account Bank, the Security Agent, the Banks and the
Swap Provider hereby irrevocably authorise and instruct the Agent to
sign any such Transfer Certificate on their behalf and undertake not
to withdraw, revoke or qualify such authority or instruction at any
time. Promptly upon its signature of any Transfer Certificate, the
Agent shall notify the Borrowers, the Transferor Bank and the
Transferee Bank.
15.4 RELIANCE ON TRANSFER CERTIFICATE
15.4.1 The Agent shall be entitled to rely on any Transfer Certificate
believed by it to be genuine and correct and to have been presented or
signed by the persons by whom it purports to have been presented or
signed, and shall not be liable to any of the parties to this
Agreement and the Security Documents for the consequences of such
reliance.
15.4.2 The Agent shall at all times during the continuation of this Agreement
maintain a register in which it shall record the name, Commitments,
Contributions and administrative details (including the lending
office) from time to time of the Banks holding a Transfer Certificate
and the date at which the transfer referred to in such Transfer
Certificate held by each Bank was transferred to such Bank, and the
Agent shall make the said register available for inspection by any
Bank or any Borrower during normal banking hours upon receipt by the
Agent of reasonable prior notice requesting the Agent to do so.
15.4.3 The entries on the said register shall, in the absence of manifest
error, be conclusive in determining the identities of the Commitments,
the Contributions and the Transfer Certificates held by the Banks from
time to time and the principal amounts of such Transfer Certificates
and may be relied upon by the Agent and the other Security Parties for
all purposes in connection with this Agreement and the Security
Documents.
15.5 TRANSFER FEES AND EXPENSES
If any Bank causes the transfer of all or any part of its rights,
benefits and/or obligations under the Security Documents, it shall pay
to the Agent on demand all costs, fees and expenses (including, but
not limited to, legal fees and expenses), and all value added tax
thereon, verified by the Agent as having been incurred by it in
connection with such transfer.
45
15.6 DOCUMENTING TRANSFERS
If any Bank assigns all or any part of its rights or transfers all or
any part of its rights, benefits and/or obligations as provided in
clause 15.3, the Borrowers jointly and severally undertake,
immediately on being requested to do so by the Agent and at the cost
of the Transferor Bank, to enter into, and procure that the other
Security Parties shall (at the cost of the Transferor Bank) enter
into, such documents as may be necessary or desirable to transfer to
the Transferee Bank all or the relevant part of such Bank's interest
in the Security Documents and all relevant references in this
Agreement to such Bank shall thereafter be construed as a reference to
the Transferor Bank and/or its Transferee Bank (as the case may be) to
the extent of their respective interests.
15.7 SUB-PARTICIPATION
A Bank may sub-participate all or any part of its rights and/or
obligations under the Security Documents without the consent of, or
notice to, the Borrowers but with the prior written consent of the
Agent (such consent not to be unreasonably withheld).
15.8 LENDING OFFICE
Each Bank shall lend through its office at the address specified in
schedule 1 or, as the case may be, in any relevant Transfer
Certificate or through any other office of such Bank selected from
time to time by it through which such Bank wishes to lend for the
purposes of this Agreement. If the office through which a Bank is
lending is changed pursuant to this clause 15.8, such Bank shall
notify the Agent promptly of such change and the Agent shall notify
the Borrowers, the Security Agent, the Account Bank, the Swap Provider
and the other Banks.
15.9 DISCLOSURE OF INFORMATION
A Bank may disclose to a prospective assignee, transferee or to any
other person who may propose entering into contractual relations with
such Bank in relation to this Agreement such information about the
Borrowers as such Bank shall consider appropriate.
16 AGENT AND SECURITY AGENT
16.1 APPOINTMENT OF THE AGENT
The terms and basis on which the Agent has been appointed by the Banks
and the Swap Provider as agent are set out in the Agency Agreement
including, among other things, the manner in which any decision to
exercise any right, powers, discretion or authority or to carry out
any duty are to be made between the Banks and the Agent or, as the
case may be, the Swap Provider and the Agent.
16.2 APPOINTMENT OF THE SECURITY AGENT
The terms and basis on which the Security Agent has been appointed by
the Agent, the Banks, the Swap Provider and the Account Bank as
security agent and trustee are set out in the Agency Agreement
including, among other things, the manner in which any decision to
exercise any right, powers, discretion or authority or to carry out
any duty are to be made between the Agent and the Security Agent or,
as the case may be, the Banks and the Security Agent or, as the case
may be, the Swap Provider and the Security Agent or, as the case may
be, the Account Bank and the Security Agent.
46
17 NOTICES AND OTHER MATTERS
17.1 NOTICES
Every notice, request, demand or other communication under this
Agreement or (unless otherwise provided therein) under any of the
other Security Documents shall:
17.1.1 be in writing delivered personally or by first-class prepaid letter
(airmail if available) or facsimile transmission or other means of
telecommunication in permanent written form;
17.1.2 be deemed to have been received, subject as otherwise provided in the
relevant Security Document, in the case of a letter, when delivered
personally or three (3) days after it has been put in to the post and,
in the case of a facsimile transmission or other means of
telecommunication in permanent written form, at the time of despatch
(provided that if the date of despatch is not a business day in the
country of the addressee or if the time of despatch is after the close
of business in the country of the addressee it shall be deemed to have
been received at the opening of business on the next such business
day); and
17.1.3 be sent:
(a) to the Borrowers or any of them at:
c/o Capital Ship Management Corp.
0 Xxxxxxxx Xxxxxx
Xxxxxxx 000 00
Xxxxxx
Fax no: x00 000 000 0000
Attn: Mr. Syntychakis
(b) to the Agent, the Account Bank and the Security Agent at:
National Bank of Greece S.A.
0 Xxxxxxxxxxx Xxxxxx & Xxxx Xxxxxxx
000 00 Xxxxxxx
Xxxxxx
Fax No: x00 000 000 0000
Attn: Corporate Manager
(c) in the case of a Bank, to its address or fax number specified in
schedule 1 or in any relevant Transfer Certificate; and
(d) in the case of the Swap Provider, to its address or fax number
specified in paragraph (a) of Part 3 of the Schedule to the
Master Swap Agreement,
or to such other address and/or numbers as is notified by one party to
the other parties under this Agreement.
17.2 NOTICES THROUGH THE AGENT
Every notice, request, demand or other communication under this
Agreement to be given by the Borrowers to any other party other than
the Swap Provider shall be given to the Agent for onward transmission
as appropriate and if it is to be given to the Borrowers it shall
(except as otherwise provided in the Security Documents) be given to
the Agent.
17.3 NO IMPLIED WAIVERS, REMEDIES CUMULATIVE
47
No failure or delay on the part of a Creditor to exercise any power,
right or remedy under any of the Security Documents shall operate as a
waiver thereof, nor shall any single or partial exercise by such
Creditor of any power, right or remedy preclude any other or further
exercise thereof or the exercise of any other power, right or remedy.
The remedies provided in the Security Documents are cumulative and are
not exclusive of any remedies provided by law.
17.4 ENGLISH LANGUAGE
All certificates, instruments and other documents to be delivered
under or supplied in connection with any of the Security Documents
shall be in the English language or shall be accompanied by a
certified English translation upon which the Creditors or any of them
shall be entitled to rely.
17.5 BORROWERS' OBLIGATIONS
17.5.1 Joint and several
Notwithstanding anything to the contrary contained in any of the
Security Documents, the agreements, obligations and liabilities of the
Borrowers herein contained are joint and several and shall be
construed accordingly. Each of the Borrowers agrees and consents to be
bound by the Security Documents to which it is, or is to be, a party
notwithstanding that the other Borrowers which are intended to sign or
to be bound may not do so or be effectually bound and notwithstanding
that any of the Security Documents may be invalid or unenforceable
against the other Borrowers, whether or not the deficiency is known to
any of the Creditors.
17.5.2 Borrowers as principal debtors
Each Borrower acknowledges and confirms that it is a principal and
original debtor in respect of all amounts which may become payable by
the Borrowers in accordance with the terms of this Agreement or any of
the other Security Documents and agrees that the Creditors may also
continue to treat it as such, whether or not any Creditor is or
becomes aware that such Borrower is or has become a surety for the
other Borrowers.
17.5.3 Indemnity
The Borrowers hereby agree jointly and severally to keep the Creditors
fully indemnified on demand against all damages, losses, costs and
expenses arising from any failure of any Borrower to perform or
discharge any purported obligation or liability of any other Borrower
which would have been the subject of this Agreement or any other
Security Document had it been valid and enforceable and which is not
or ceases to be valid and enforceable against any other Borrower on
any ground whatsoever, whether or not known to a Creditor including,
without limitation, any irregular exercise or absence of any corporate
power or lack of authority of, or breach of duty by, any person
purporting to act on behalf of any other Borrower (or any legal or
other limitation, whether under the Limitation Acts or otherwise or
any disability or death, bankruptcy, unsoundness of mind, insolvency,
liquidation, dissolution, winding up, administration, receivership,
amalgamation, reconstruction or any other incapacity of any person
whatsoever (including, in the case of a partnership, a termination or
change in the composition of the partnership) or any change of name or
style or constitution of any Security Party)).
17.5.4 Liability unconditional
None of the obligations or liabilities of the Borrowers under this
Agreement or any other Security Document shall be discharged or
reduced by reason of:
(a) the death, bankruptcy, unsoundness of mind, insolvency,
liquidation, dissolution, winding-up, administration,
receivership, amalgamation, reconstruction or other incapacity of
any person whatsoever (including, in the case of a partnership, a
48
termination or change in the composition of the partnership) or any
change of name or style or constitution of a Borrower or any other
person liable;
(b) the Agent (acting on the instructions of the Majority Banks)
granting any time, indulgence or concession to, or compounding
with, discharging, releasing or varying the liability of, a
Borrower or any other person liable or renewing, determining,
varying or increasing any accommodation, facility or transaction
or otherwise dealing with the same in any manner whatsoever or
concurring in, accepting, varying any compromise, arrangement or
settlement or omitting to claim or enforce payment from a
Borrower or any other person liable; or
(c) anything done or omitted which but for this provision might
operate to exonerate the Borrowers or any of them.
17.5.5 Recourse to other security
The Creditors shall not be obliged to make any claim or demand or to
resort to any Security Document or other means of payment now or
hereafter held by or available to it for enforcing this Agreement or
any of the Security Documents against any Borrower or any other person
liable and no action taken or omitted by any Creditor in connection
with any such Security Document or other means of payment will
discharge, reduce, prejudice or affect the liability of the Borrowers
under this Agreement and the Security Documents to which any of them
is, or is to be, a party.
17.5.6 Waiver of Borrowers' rights
Each Borrower agrees with each Creditor that, from the date of this
Agreement and so long as any moneys are owing under any of the
Security Documents and while all or any part of the Commitment remains
outstanding, it will not, without the prior written consent of the
Agent (acting on the instructions of the Majority Banks):
(a) exercise any right of subrogation, reimbursement and indemnity
against the other Borrower or any other person liable under the
Security Documents;
(b) demand or accept repayment in whole or in part of any
Indebtedness now or hereafter due to such Borrower from any other
Borrower or from any other person liable or demand or accept any
guarantee, indemnity or other assurance against financial loss or
any document or instrument created or evidencing an Encumbrance
in respect of the same or dispose of the same;
(c) take any steps to enforce any right against any other Borrower or
any other person liable in respect of any such moneys; or
(d) claim any set-off or counterclaim against any other Borrower or
any other person liable or claiming or proving in competition
with any Creditor in the liquidation of any other Borrower or any
other person liable or have the benefit of, or share in, any
payment from or composition with, any other Borrower or any other
person liable or any other Security Document now or hereafter
held by any Creditor for any moneys owing under this Agreement or
for the obligations or liabilities of any other person liable but
so that, if so directed by the Agent, it will prove for the whole
or any part of its claim in the liquidation of any other Borrower
or other person liable on terms that the benefit of such proof
and all money received by it in respect thereof shall be held on
trust for the Banks and applied in or towards discharge of any
moneys owing under this Agreement in such manner as the Agent
(acting on the instructions of the Majority Banks) shall deem
appropriate.
18 GOVERNING LAW AND JURISDICTION
18.1 LAW
49
This Agreement is governed by, and shall be construed in accordance
with, English law.
18.2 SUBMISSION TO JURISDICTION
The Borrowers jointly and severally agree, for the benefit of each
Creditor, that any legal action or proceedings arising out of or in
connection with this Agreement against the Borrowers or any of them or
any of their respective assets may be brought in the English courts.
Each of the Borrowers irrevocably and unconditionally submits to the
jurisdiction of such courts and irrevocably designates, appoints and
empowers Curzon Maritime Ltd at present of St. Clare House, 30/33
Xxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX, Xxxxxxx to receive for it and on its
behalf, service of process issued out of the English courts in any
such legal action or proceedings. The submission to such jurisdiction
shall not (and shall not be construed so as to) limit the right of a
Creditor to take proceedings against any of the Borrowers in the
courts of any other competent jurisdiction nor shall the taking of
proceedings in any one or more jurisdictions preclude the taking of
proceedings in any other jurisdiction, whether concurrently or not.
The parties further agree that only the courts of England and not
those of any other State shall have jurisdiction to determine any
claim which any of the Borrowers may have against any Creditor arising
out of or in connection with this Agreement.
18.3 NOTICES THROUGH THE AGENT
Every notice, request, demand or other communication under this
Agreement to be given by the Borrowers or any of them to any other
party shall be given to the Agent for onward transmission as
appropriate and to be given to the Borrowers or any of them shall
(except as otherwise provided in this Agreement) be given through the
Agent.
18.4 CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999
No term of this Agreement is enforceable under the Contracts (Rights
of Third Parties) Xxx 0000 by a person who is not a party to this
Agreement.
IN WITNESS whereof the parties to this Agreement have caused this Agreement to
be duly executed on the date first above written.
50
SCHEDULE 1
THE BANKS AND THEIR COMMITMENTS
<TABLE>
---------------------------------------------------------------------------------------------------
NAME LENDING OFFICE ADDRESS FOR NOTICES COMMITMENT ($)
---------------------------------------------------------------------------------------------------
NATIONAL BANK OF 00 Xxxxxx Xxxxxx 2 Bouboulinas Street & Akti Miaouli 26,625,000
GREECE S.A. 102 32 Athens 000 00 Xxxxxxx
Xxxxxx Xxxxxx
Fax No: x00 000 000 0000
Att: Xx. Xxxxx Xxxxxxxx/
Xx. Xxxxxxxxxxxx Xxxxxxxxx
---------------------------------------------------------------------------------------------------
EMPORIKI BANK OF 114 Kolokotroni & 15 II 114 Kolokotroni & 15 26,625,000
GREECE S.A. Xxxxxxxxxx Xxxxxx XX Xxxxxxxxxx Xxxxxx
000 00 Xxxxxxx 000 00 Xxxxxxx
Xxxxxx Fax No: x00 000 000 0000
Att: Ms. Xxxxxxxxx Margelou
---------------------------------------------------------------------------------------------------
</TABLE>
51
SCHEDULE 2
FORM OF DRAWDOWN NOTICE
(referred to in clause 2.4)
[_____] 2003
To: National Bank of Greece S.A.
0 Xxxxxxxxxxx Xxxxxx & Xxxx Xxxxxxx
000 00 Xxxxxxx
Xxxxxx
U.S.$53,250,000 LOAN
LOAN AGREEMENT DATED [_________] 2003
We refer to the above Loan Agreement and hereby give you notice that we wish to
draw down the [Refinancing Advance] [Newbuilding Advance comprising of the
[Delivery Tranche] [Delivery Tranche and the LTC Tranche]] namely $[_] on
[______] 2003 and select [a first Interest Period in respect thereof of [_]
months] [the first interest period in respect hereof to expire on [_] 2003]. The
funds should be credited to [NAME AND NUMBER OF ACCOUNT] with [DETAILS OF BANK
IN NEW YORK CITY].
We confirm that:
(a) no event or circumstance has occurred and is continuing which constitutes a
Default;
(b) the representations and warranties contained in clauses 7.1, 7.2 and 7.3(b)
of the Loan Agreement, are true and correct at the date hereof as if made
with respect to the facts and circumstances existing at such date; and
(c) the borrowing to be effected by the drawdown of the [Refinancing]
[Newbuilding] Advance will be within our corporate powers, has been validly
authorised by appropriate corporate action and will not cause any limit on
our borrowings (whether Imposed by statute, regulation, agreement or
otherwise) to be exceeded; and
(d) there has been no material adverse change in our financial position or in
the financial position of the Manager or in the consolidated financial
position of ourselves, the Manager and our Related Companies, from that
described by us to the Agent and the Banks in the negotiation of the Loan
Agreement.
Words and expressions defined in the Loan Agreement shall have the same meanings
where used herein.
--------------------------
For and on behalf of
FIGARO SHIPPING LTD
52
----------------------------
For and on behalf of
MAGIC STAR SHIPPING CO. LTD
----------------------------
For and on behalf of
XXXX SHIPPING LTD
----------------------------
For and on behalf of
VAGUE SHIPPING LTD
----------------------------
For and on behalf of
ZOOM SHIPPING LTD
----------------------------
For and on behalf of
OCEAN VILLAGE MARITIME S.A.
53
SCHEDULE 3
DOCUMENTS AND EVIDENCE REQUIRED AS CONDITIONS PRECEDENT TO THE LOAN BEING
MADE
(referred to in clause 9.1)
PART 1
1 CONSTITUTIONAL DOCUMENTS
Copies, certified by an officer of each Security Party as true,
complete and up to date copies of all documents which contain or
establish or relate to the constitution of that Security Party;
2 CORPORATE AUTHORISATIONS
copies of resolutions of the directors and stockholders of each
Security Party approving such of the Underlying Documents and the
Security Documents to which such Security Party is, or is to be, party
and authorising the signature, delivery and performance of such
Security Party's obligations thereunder, certified (in a certificate
dated no earlier than the date of this Agreement) by an officer of
such Security Party as:
(a) being true and correct;
(b) being duly passed at meetings of the directors of such Security
Party and of the stockholders of such Security Party duly
convened and held;
(c) not having been amended, modified or revoked; and
(d) being in full force and effect,
together with originals or certified copies of any powers of attorney
issued by any Security Party pursuant to such resolutions;
3 SPECIMEN SIGNATURES
copies of the signatures of the persons who have been authorised on
behalf of each Security Party to sign such of the Underlying Documents
and the Security Documents to which such Security Party is, or is to
be, party and to give notices and communications, including notices of
drawing, under or in connection with the Security Documents, certified
(in a certificate dated no earlier than the date of this Agreement) by
an officer of such Security Party as being the true signatures of such
persons;
4 CERTIFICATE OF INCUMBENCY
a list of directors and officers of each Security Party specifying the
names and positions of such persons, certified (in a certificate dated
no earlier than to the date of this Agreement) by an officer of such
Security Party to be true, complete and up to date;
5 BORROWERS' CONSENTS AND APPROVALS
a certificate (dated no earlier than the date of this Agreement) from
an officer of each of the Borrowers that no consents, authorisations,
licences or approvals are necessary for that Borrower to authorise or
are required by that Borrower in connection with the borrowing by that
54
Borrower of the Loan pursuant to this Agreement or the execution,
delivery and performance of that Borrowers' Security Documents;
6 OTHER CONSENTS AND APPROVALS
a certificate (dated no earlier than the date of this Agreement) from
an officer of each Security Party (other than the Borrowers) that no
consents, authorisations, licences or approvals are necessary for such
Security Party to guarantee and/or grant security for the borrowing by
the Borrowers of the Total Commitment pursuant to this Agreement and
execute, deliver and perform the Security Documents insofar as such
Security Party is a party thereto;
7 CERTIFIED CONTRACT AND MANAGEMENT AGREEMENTS
a copy, certified (in a certificate dated no earlier than the date of
this Agreement) as a true and complete copy by an officer of each of
the Borrowers of the Contract and each of the Management Agreements
(other than the Ocean Management Agreement); and
8 FEES
evidence that the fee due under clause 5.1.2 has been paid in full.
55
PART 2
DOCUMENTS AND EVIDENCE REQUIRED AS CONDITIONS PRECEDENT
TO THE REFINANCING ADVANCE BEING MADE
1 DRAWDOWN NOTICE
the relevant Drawdown Notice duly executed;
2 CONDITIONS PRECEDENT
evidence that the conditions precedent set out in Parts 1 and 2 of
schedule 3 remain fully satisfied;
3 UPDATED CORPORATE AUTHORISATIONS/CERTIFICATES OF INCUMBENCY
a list of directors and officers of each Security Party specifying the
names and positions of such persons and copies of the signatures of
the persons who have been authorised on behalf of each such Security
Party to sign such of the Security Documents to which such Security
Party is, or is to be, party and to give notices and communications,
including notices of drawing, under or in connection with the Security
Documents, certified (in a certificate dated no earlier than five (5)
Banking Days prior to the relevant Drawdown Date) by an officer of
such Security Party to be, in the case of the list of directors, true,
complete and up to date and, in the case of the specimen signatures,
true signatures of such persons or a certificate by an officer of such
Security Party that the list provided in respect of such Security
Party pursuant to paragraph (d) of Part 1 of this schedule, and that
the specimen signatures provided in respect of the Security Party
pursuant to paragraph (c) of Part 1 of this schedule, remain true,
complete and up to date;
4 BORROWERS' OPINIONS
(a) an opinion of Ganados & Associates, special legal advisers
on matters of Maltese law, to the Agent; and
(b) an opinion of Xxxxxx Xxxxxx & Asvat, special legal advisers
on matters of Panamanian law, to the Agent;
5 SHIP CONDITIONS (IN RELATION TO ALL SHIPS OTHER THAN THE NEWBUILDING)
evidence that all the Ships for which the Refinancing Advance is to be
made:
(a) Registration and Encumbrances
are permanently or provisionally registered in the name of
the relevant Borrower under the laws and flag of the
relevant Flag State through the relevant Registry and that
such Ships and their Earnings, Insurances and Requisition
Compensation (as defined in the relevant Ship Security
Documents) are free of Encumbrances;
(b) Classification
maintain the relevant Classification free of all
requirements and recommendations of the relevant
Classification Society; and
(c) Insurance
are insured in accordance with the provisions of the
relevant Ship Security Documents and all requirements of
such Ship Security Documents in respect of such insurance
have been complied with (including without limitation,
confirmation from the protection
56
and indemnity association or other insurer with which such
Ships are or are to be, entered for insurance or insured
against protection and indemnity risks (including oil
pollution risks) that any necessary declarations required by
the association or insurer for the removal of any oil
pollution exclusion have been made and that any such
exclusion does not apply to such Ships);
6 MASTER SWAP AGREEMENT
the Master Swap Agreement duly executed;
7 RETENTION ACCOUNT PLEDGE
the Retention Account Pledge, (together with the other documents to be
delivered to the Security Agent pursuant thereto) duly executed;
8 SECURITY DOCUMENTS
the Ship Security Documents for all Ships (other than the Newbuilding)
duly executed;
9 MORTGAGE REGISTRATION
evidence that the Mortgages over all Ships (other than the
Newbuilding) have been permanently registered against such Ships under
the laws and flag of the relevant Flag State through the relevant
Registry;
10 NOTICES OF ASSIGNMENT
duly executed notices of assignment in the forms prescribed by the
relevant Ship Security Documents for all Ships (other than the
Newbuilding);
11 MANAGER'S CONFIRMATION
the managers of all Ships (other than the Newbuilding) have confirmed
in writing that the representations and warranties set out in clause
7.2.9 and 7.2.10 are true and correct;
12 BORROWERS' PROCESS AGENT
a letter from each Borrower's agent for receipt of service of
proceedings referred to in clause 18.2 accepting its appointment under
the said clause and under each of the other Security Documents in
which it is or is to be appointed as such Borrower's agent;
13 MANAGER'S PROCESS AGENT
a letter from the Manager's agent for receipt of service of
proceedings referred to in clause 7.1.2 of the Manager's Undertakings
for all Ships (other than the Newbuilding) accepting its appointment
under the said clause;
14 INSURANCE OPINION
an opinion from insurance consultants to the Agent on the insurances
effected or to be effected in respect of all Ships (other than the
Newbuilding) upon and following the relevant Drawdown Date;
15 SMC/DOC
in respect of all Ships (other than the Newbuilding) a copy, certified
(in a certificate dated no earlier than five (5) Banking Days prior to
the date of this Agreement) as a true and complete
57
copy by an officer of the relevant Borrower of either (a) the DOC
issued to the Operator and the SMC for such Borrower's Ship or (b) an
application for the issuance of the DOC to the Operator and/or the SMC
for such Borrowers Ship;
16 EXISTING INDEBTEDNESS
evidence that all moneys due to the National Bank of Greece S.A. under
the loan agreement dated 11 April 2003 have been repaid or, as the
case may, be paid in full and that the relevant security parties have
been fully discharged from their obligations thereunder;
17 REGISTRATION FORMS
such statutory forms duly signed by the Borrowers and the other
Security Parties as may be required by the Agent to perfect the
security contemplated by the Security Documents;
18 BANK ACCOUNTS
evidence that the Operating Accounts and the Retention Account have
been opened together with mandate forms in respect thereof duly
executed;
19 FURTHER MATTERS/OPINIONS
any such other matter or further opinion as may be required by the
Agent; and
20 FEES
evidence that any fees due pursuant to clause 5.1.1 and any commitment
commission due pursuant to clause 5.1.3 have been paid in full.
58
PART 3
DOCUMENTS AND EVIDENCE REQUIRED AS CONDITIONS PRECEDENT TO THE DELIVERY TRANCHE
BEING MADE
1 DRAWDOWN NOTICE
the relevant Drawdown Notice duly executed;
2 CONDITIONS PRECEDENT
evidence that the conditions precedent set out in Parts 1 and 2 of
schedule 3 remain fully satisfied;
3 UPDATED CORPORATE AUTHORISATIONS/CERTIFICATES OF INCUMBENCY
a list of directors and officers of each Security Party specifying the
names and positions of such persons and copies of the signatures of
the persons who have been authorised on behalf of each such Security
Party to sign such of the Security Documents to which such Security
Party is, or is to be, party and to give notices and communications,
including notices of drawing, under or in connection with the Security
Documents, certified (in a certificate dated no earlier than five (5)
Banking Days prior to the relevant Drawdown Date) by an officer of
such Security Party to be, in the case of the list of directors, true,
complete and up to date and, in the case of the specimen signatures,
true signatures of such persons or a certificate by an officer of such
Security Party that the list provided in respect of such Security
Party pursuant to paragraph (d) of Part 1 of this schedule, and that
the specimen signatures provided in respect of the Security Party
pursuant to paragraph (c) of Part 1 of this schedule, remain true,
complete and up to date;
4 NO CLAIM
evidence satisfactory to the Agent that the Builder (and any other
party who may have a claim pursuant to the Contract) has no claims
against the Newbuilding or the Ocean Borrower and that there have been
no breaches of the terms of the Contract or any default thereunder;
5 NEWBUILDING CONDITIONS
evidence that the Newbuilding:
(a) Registration and Encumbrances
is permanently or provisionally registered in the name of the
relevant Borrower under the laws and flag of the relevant Flag
State through the relevant Registry and that such Ship and its
Earnings, Insurances and Requisition Compensation (as defined in
the relevant Ship Security Documents) are free of Encumbrances;
(b) Classification
maintains the relevant Classification free of all requirements
and recommendations of the relevant Classification Society; and
(c) Insurance
is insured in accordance with the provisions of the relevant Ship
Security Documents and all requirements of such Ship Security
Documents in respect of such insurance have been complied with
(including without limitation, confirmation from the protection
and indemnity association or other insurer with which such Ship
is, or is to be, entered for insurance or insured against
protection and indemnity risks (including oil pollution
59
risks) that any necessary declarations required by the
association or insurer for the removal of any oil pollution
exclusion have been made and that any such exclusion does not
apply to such Ship);
6 NO ENCUMBRANCE
evidence that there is no Encumbrance of any kind created or permitted
by any person on or relating to the Contract other than Permitted
Encumbrances;
7 FEES AND COMMISSIONS
evidence that any fees and commitment commission payable from the
Borrowers to the Agent pursuant to the terms of clause 5.1 or any
other provision of the Security Documents have been paid in full;
8 COMMERCIAL INVOICE IN RESPECT OF THE NEWBUILDING
a commercial invoice or any other similar document addressed by the
Builder to the Ocean Borrower in respect of the payment in full of the
Contract Price under the Contract;
9 BUILDERS' CERTIFICATE
the Builders' Certificate for the Newbuilding duly executed and
delivered;
10 NO CLAIM
the Agent having no evidence that the Builder or any other party who
may have a claim pursuant to the Contract has any claims against the
Newbuilding or the Ocean Borrower and that there have been no breaches
of the terms of the Contract or any default thereunder;
13 SECURITY DOCUMENTS
the Ocean Mortgage, the Ocean Deed of Covenant and the Ocean Manager's
Undertaking each duly executed and delivered;
14 NOTICES OF ASSIGNMENT
duly executed notices of assignment in the forms prescribed by the
Ocean Deed of Covenant and the relevant Manager's Undertakings;
15 MORTGAGE REGISTRATION
evidence that the Ocean Mortgage has been registered against the
Newbuilding through the Registry under the laws and flag of the Flag
State;
16 OCEAN BORROWER'S PROCESS AGENT
a copy, certified as a true copy by the Ocean Borrower's solicitors or
other person acceptable to the Agent of a letter from the Ocean
Borrower's agent for receipt of service of proceedings referred to in
each of the Ocean Mortgage and the Ocean Deed of Covenant in which it
is or is to be appointed as the Ocean Borrower's agent;
17 SECURITY PARTIES' PROCESS AGENT
a copy, certified as a true copy by the Borrowers' solicitors or other
person acceptable to the Agent of a letter from each Security Party's
agent for receipt of service of proceedings referred
60
to in each Security Document to which the relevant Security Party is a
party, accepting its appointment under each of the relevant Security
Documents;
18 INSURANCE OPINION
an opinion from insurance consultants to the Agent, on the insurances
effected or to be effected in respect of the Newbuilding upon and
following the Drawdown Date of the Newbuilding Advance;
19 APPLICATION FOR DOC AND SMC
a certified copy of the DOC and either (i) a certified copy of the SMC
for the Newbuilding or (ii) evidence satisfactory to the Agent that
the Operator has applied for an SMC for the Newbuilding to be issued
pursuant to the Code within any applicable time limit;
20 PANAMANIAN OPINION
an opinion of Xxxxxx Xxxxxx & Asvat, special legal advisers on matters
of Panamanian law-to the Agent;
21 FLAG STATE OPINIONS
an opinion of special legal advisers on matters of the law of the Flag
State, to the Agent;
22 FURTHER OPINIONS
such further opinions as the Agent may require; and
23 VALUATION
a valuation of the Newbuilding pursuant to clause 8.2.2 dated not more
than Fifteen (15) Banking Days before the Delivery Date;
24 FURTHER CONDITIONS PRECEDENT
such further conditions precedent as the Agent may require.
61
PART 4
DOCUMENTS AND EVIDENCE REQUIRED AS CONDITIONS PRECEDENT TO THE LTC TRANCHE BEING
MADE
1 DRAWDOWN NOTICE
the relevant Drawdown Notice duly executed;
2 LTC CONTRACT
a certified copy of the LTC Contract together with evidence
satisfactory to the Agent that the LTC Contract has been duly executed
by the parties thereto and that the Newbuilding has been accepted by
the charterer under the XXX Xxxxxxxx;
0 XXX XXXXXXXX ASSIGNMENT
the LTC Contract Assignment together with the notices and
acknowledgements in the forms prescribed thereto, each duly executed;
and
4 CORPORATE AUTHORISATIONS
copies of resolutions of the directors and stockholders of the Ocean
Borrower approving the LTC Contract Assignment and authorising the
signature, delivery and performance of the Ocean Borrower's
obligations thereunder, certified (in a certificate dated no earlier
than the date of this Agreement) by an officer of the Ocean Borrower
as:
(a) being true and correct;
(b) being duly passed at meeting of the directors of the Ocean
Borrower and of the stockholders of the Ocean Borrower duly
convened and held;
(c) not having been amended, modified or resolved; and
(d) being in full force and effect together with originals or
certified copies of any powers of attorney issued by the Ocean
Borrower pursuant to such resolutions.
62
SCHEDULE 4
FORM OF TRANSFER CERTIFICATE
(refer to in clause 15.3)
TRANSFER CERTIFICATE
BANKS ARE ADVISED NOT TO EMPLOY TRANSFER CERTIFICATES OR OTHERWISE TO ASSIGN OR
TRANSFER INTERESTS IN THE LOAN AGREEMENT WITHOUT FURTHER ENSURING THAT THE
TRANSACTION COMPLIES WITH ALL APPLICABLE LAWS AND REGULATIONS, INCLUDING THE
FINANCIAL SERVICES XXX 0000 AND REGULATIONS MADE THEREUNDER AND SIMILAR STATUTES
WHICH MAY BE IN FORCE IN OTHER JURISDICTIONS
To: NATIONAL BANK OF GREECE S.A. as agent on its own behalf and on behalf of
the Borrowers, the Banks, the Account Bank, the Swap Provider and the
Security Agent defined in the Loan Agreement referred to below.
[Date]
Attention: [_]
This certificate (TRANSFER CERTIFICATE") relates to a loan agreement dated [_]
2003 (the "LOAN AGREEMENT") and made between (1) Figaro Shipping, Ltd., Zoom
Shipping Ltd., Vague Shipping Ltd., Xxxx Shipping Ltd., Magic Star Shipping Co.
Ltd. and Ocean Village Maritime S.A. (the "BORROWERS"), (2) the banks and
financial institutions defined therein as banks (the "BANKS") and (3) the
National Bank of Greece S.A. as Agent, Security Agent, Swap Provider and Account
Bank in relation to a loan of up to $53,250,000. Terms defined in the Loan
Agreement shall, unless otherwise defined herein, have the same meanings herein
as therein.
In this Certificate:
the "TRANSFEROR" means [FULL NAME] of [LENDING OFFICE]; and
the "TRANSFEREE" means [FULL NAME] of [LENDING OFFICE].
1 The Transferor with full title guarantee assigns to the Transferee
absolutely all rights and interests (present, future or contingent) which
the Transferor has as a Bank under or by virtue of the Loan Agreement and
all the Security Documents in relation to [_] per centum ([_]%) of the
[Contribution] [Commitment] of the Transferor (or its predecessors in
title) details of which are set out below:
--------------------------------------------------------------------------------
TRANSFEROR'S
[CONTRIBUTION]
[COMMITMENT]
DATE [OF ADVANCE] AMOUNT [OF ADVANCE] [TO ADVANCE] MATURITY DATE
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
63
2 By virtue of this Transfer Certificate and clause 15 of the Loan Agreement,
the Transferor is discharged [entirely from its Available Commitment which
amounts to $[_____]] [from [_____] per centum ([_____]%) of its Available
Commitment, which percentage represents $[_____]].
3 The Transferee hereby requests the Agent (on behalf of itself, the
Borrowers, the Account Bank, the Security Agent, the Swap Provider and the
Banks) to accept the executed copies of this Transfer Certificate as being
delivered pursuant to and for the purposes of clause 15.3 of the Loan
Agreement so as to take effect in accordance with the terms thereof on
[date of transfer].
4 The Transferee:
4.1.1 confirms that it has received a copy of the Loan Agreement and the
other Security Documents together with such other documents and
information as it has required in connection with the transaction
contemplated thereby;
4.1.2 confirms that it has not relied and will not hereafter rely on the
Transferor, the Agent, the Account Bank, the Banks, the Swap Provider
or the Security Agent to check or enquire on its behalf into the
legality, validity, effectiveness, adequacy, accuracy or completeness
of the Loan Agreement, any of the Security Documents or any such
documents or information;
4.1.3 agrees that it has not relied and will not rely on the Transferor,
the Agent, the Account Bank, the Banks, the Swap Provider or the
Security Agent to assess or keep under review on its behalf the
financial condition, creditworthiness, condition, affairs, status or
nature of the Borrowers, or any other Security Party (save as
otherwise expressly provided therein);
4.1.4 warrants that it has power and authority to become a party to the
Loan Agreement and has taken all necessary action to authorise
execution of this Transfer Certificate and to obtain all necessary
approvals and consents to the assumption of its obligations under the
Loan Agreement and the Security Documents; and
4.1.5 if not already a Bank, appoints (i) the Agent to act as its agent and
(ii) the Security Agent to act as its security agent and trustee, as
provided in the Loan Agreement and the Security Documents and agrees
to be bound by the terms of the Loan Agreement and the Security
Documents.
5 The Transferor:
5.1 warrants to the Transferee that it has full power to enter into this
Transfer Certificate and has taken all corporate action necessary to
authorise it to do so;
5.2 warrants to the Transferee that this Transfer Certificate is binding
on the Transferor under the laws of England, the country in which the
Transferor is incorporated and the country in which its lending office
is located; and
5.3 agrees that it will, at its own expense, execute any documents which
the Transferee reasonably requests for perfecting in any relevant
jurisdiction the Transferee's title under this Transfer Certificate or
for a similar purpose.
6 The Transferee hereby undertakes with the Transferor and each of the other
parties to the Loan Agreement and the other Security Documents that it will
perform in accordance with its terms all those obligations which by the
terms of the Loan Agreement and the other Security Documents will be
assumed by it after delivery of the executed copies of this Transfer
Certificate to the Agent and satisfaction of the conditions (if any)
subject to which this Transfer Certificate is expressed to take effect.
7 By execution of this Transfer Certificate on their behalf by the Agent and
in reliance upon the representations and warranties of the Transferee, the
Borrowers, the Agent, the Security Agent, the Swap Provider, the Account
Bank and the Banks accept the Transferee as a party to the
64
Loan Agreement and the Security Documents with respect to all those rights
and/or obligations which by the terms of the Loan Agreement and the
Security Documents will be assumed by the Transferee (including those about
pro-rata sharing and the exclusion of liability on the part of, and the
indemnification of, the Agent and the Security Agent as provided by the
Loan Agreement) after delivery of the executed copies of this Transfer
Certificate to the Agent and satisfaction of the conditions (if any)
subject to which this Transfer Certificate is expressed to take effect.
8 None of the Transferor, the Agent, the Security Agent, the Swap Provider,
the Account Bank or the Banks:
8.1 makes any representation or warranty nor assumes any responsibility with
respect to the legality, validity, effectiveness, adequacy or
enforceability of the Loan Agreement or any of the Security Documents or
any document relating thereto; or
8.2 assumes any responsibility for the financial condition of the Borrowers or
any of them or any other Security Party or any party to any such other
document or for the performance and observance by the Borrowers or any of
them or any other Security Party or any party to any such other document
(save as otherwise expressly provided therein) and any and all such
conditions and warranties, whether express or implied by law or otherwise,
are hereby excluded (except as aforesaid).
9 The Transferor and the Transferee each undertake that they will on demand
fully indemnify the Agent in respect of any claim, proceeding, liability or
expense which relates to or results from this Transfer Certificate or any
matter concerned with or arising out of it unless caused by the Agent's
gross negligence or wilful misconduct, as the case may be.
10 The agreements and undertakings of the Transferee in this Transfer
Certificate are given to and for the benefit of and made with each of the
other parties to the Loan Agreement and the Security Documents.
11 This Transfer Certificate shall be governed by, and construed in accordance
with, English law.
TRANSFEROR TRANSFEREE
By: By:
------------------------------ ------------------------------------
Dated: Dated:
-------------------------- --------------------------------
AGENT
Agreed for and on behalf of itself as Agent, the Borrowers, the Security Agent,
the Swap Provider, the Account Bank and the Banks.
NATIONAL BANK OF GREECE S.A.
By:
----------------------------------
Dated:
-------------------------------
NOTE: The execution of this Transfer Certificate alone may not transfer a
proportionate share of the Transferor's interest in the security constituted by
the Security Documents in the Transferor's or Transferee's jurisdiction. It is
the responsibility of the Transferee to ascertain whether any other documents
are required to perfect a transfer of such a share in the Transferor's interest
in such security in any such jurisdiction and, if so, to seek appropriate advice
and arrange for execution of the same.
65
THE SCHEDULE
Outstanding Contribution: $______
Commitment: $______
Portion Transferred: ______%
ADMINISTRATIVE DETAILS OF TRANSFEREE
Name of Transferee: _______________
Lending Office: _______________
Contact Person _______________
(Loan Administration Department): _______________
Telephone: _______________
Telefax No: _______________
Contact Person _______________
(Credit Administration Department): _______________
Telephone: _______________
Telefax No: _______________
66
SCHEDULE 5
FORM OF MORTGAGE
67
Form No. 9A
MORTGAGE (BODY CORPORATE)
<TABLE>
------------------------------------------------------------------------------------------------------------------------------------
Official No. Name of Ship Home Port No. Year and Whether a Sailing, Power of Engines,
Port of Registry Stream or Motor Ship if any
------------------------------------------------------------------------------------------------------------------------------------
VALLETTA
------------------------------------------------------------------------------------------------------------------------------------
Metres Centimetres
----------------------------------------------------------------------- Gross Tonnage
Length (Article 2(8)) and as described in more detail in
--------------------------------------------- the Certificate of the Surveyor and
Breadth (Reg 2 (3)) the Register.
--------------------- Net Tonnage
Moulded Depth Amidships to Upper Deck (Reg 2 (2))
------------------------------------------------------------------------------------------------------------------------------------
WHEREAS (a) there is a Deed of Trust dated _______ 2003 (hereinafter referred to as the "Deed of Trust") in pursuance of which
NATIONAL BANK OF GREECE S.A. a banking institution registered in Greece and acting through its office at 0 Xxxxxxxxxxx Xxxxxx & Xxxx
Xxxxxxx, 000 00 Xxxxxxx, Xxxxxx (hereinafter sometimes referred to as the "Mortgagee" which expression shall include its successors
and assigns) was appointed as security agent and trustee by the banks (including the Mortgagee) acting as lenders listed in
Schedule 1 to the Loans Agreement (as defined below) (hereinafter referred to as the "Banks"), the Mortgagee as Agent (the "Agent");
Account Bank (the "Account Bank") and Swap Provider (the "Swap Provider" and, together with the Banks, the Agent and the Account
Bank; the "Secured Creditors") for the purpose, inter alia, of receiving, registering, discharging, assigning and enforcing any
security for the benefit of all and any beneficiaries as may from time to time be entitled to benefit by virtue of and in accordance
with the provisions of the Deed of Trust, and WHEREAS there is an Account _____ between (1)___, a limited liability company
incorporated and existing under the laws of the Republic of Malts having its registered office at 00/00, Xxxxxxxx Xxxxxxxxx, Xxxxxx
Xxxxxx, Xxxxxxxx, Xxxxx (hereinafter sometimes called the "Mortgagor") and (2) the Banks regulated by a (1) loan agreement dated
2003 made between (i) the Mortgagor and others as joint and several borrowers (together, the "Borrowers"), (ii) the Banks and (iii)
the Mortgagee as Agent, Security Agent, Swap Provider and Account Bank, (2) and ISDA Master Agreement dated __________________ 2003
made between the Mortgagor and the Swap Provider (hereinafter as the same may from time to time be supplemented, varied and/or
amended called the "Master Agreement") including any Schedule thereto and all Transactions and/or Confirmations (as the said
expressions are defined, in the Master Agreement) supplemental thereto and (3) a deed of covenant bearing even date herewith
collateral to this Mortgage made between the Mortgagor and the Mortgagee (as security agent and trustee) (which said Loan Agreement
and Deed of Covenant as the same may from time to time be supplemented, varied and/or amended are hereinafter called the "Loan
Agreement" and the "Deed of Covenant" respectively) and WHEREAS pursuant to the Loan Agreement and the Master Agreement the
Mortgagor has agreed to execute and does hereby execute this Mortgage and the Deed of Covenant in favour of the Mortgagee as
security agent and trustee for the purposes of securing (a) the repayment by the Mortgagor to the Mortgagee and/or the Secured
Creditors of all sums for the time being and from time to time owing to the Mortgagee and/or the Secured Creditors by the Borrowers
whether by way of principal, interest or otherwise including all sums due or to become due to the Mortgagee and/or the Secured
Creditors (whether actually, contingently, presently and/or in the future) under the Loan Agreement the Master Agreement and the
Deed of Covenant or any of them and all costs, charges, expenses or other moneys and where applicable interest thereon connected
with or for the purpose of creating, preserving, maintaining, administering, protecting, enforcing or attempting to enforce this
security, in the manner and at the time set forth in the Loan Agreement, the Master Agreement, and the Deed of Covenant or any of
them and (b) the due and punctuality, performance and fullfilment of all obligations of the Borrowers to the Mortgagee and/or the
Secured Creditors under and pursuant to the Loan Agreement and the Master Agreement and of the Mortgagor under the Deed of Covenant
and WHEREAS the amount of principal and interest or other moneys due to the Mortgagee and/or the Secured Creditors at any given time
can be ascertained by reference to the Loan Agreement, the Master Agreement and the Deed of Covenant and/or to the books of account
(or other accounting records) of the Mortgagee and/or ___________ ___________ by the mortgagee pursuant to the Loan Agreement, the
Master Agreement and the Deed of Covenant or any of them, which amount the Mortgagor accepts as conclusive and binding_
and shall __________ __________ _________ amount due by the Mortgagor to the Mortgagee and/or the Secured Creditors as aforesaid and
WHEREAS the Mortgagor is prohibited from transferring or ___________ ___________ ___________ ___________ without the prior
written consent of the Mortgagee;
Now we ____(b) of the premises ___________ ___________ __________ for ourselves and our successors, covenant with the said (c)
______ and (d) ________ assigns, to pay to him or them or it the sums for the time being due on this security, whether by way
by principal or interest ___________, at the times and manner aforesaid, __________ and for the purpose of better occurring to the
said (c) ______ the payment of such sums as last aforesaid, we hereby mortgage to the said (c) _____ all the shares of which we are
the Owners in the Ship above particularly described, and in ____ boats and appurtenances.
Lastly, we for ourselves and our successors, covenant with the said (c) ______ and (d) _____ assigns that we have power to
mortgage in manner aforesaid the above mentioned shares, and that the same are free from incumbrances (e) ___________
Executed this ___________ day of ___________ Two Thousand and Three in the presence of (g) ______________________
----------------------------------
Signature of Witness Signature/s (f) ______ for and on behalf of (b)
------------------------------------------------------------------------------------------------------------------------------------
____________________________________________________________________________________________________________________________________
NOTE _______________________________________________________________________________________________________________________________
NOTE _______________________________________________________________________________________________________________________________
M.S.:(R) 13 PTO
</TABLE>
SCHEDULE 6
FORM OF DEED OF COVENANT
PRIVATE & CONFIDENTIAL
DATED __________ 2003
[FIGARO SHIPPING LTD.] [MAGIC STAR SHIPPING CO. LTD]
[XXXX SHIPPING LTD] [VAGUE SHIPPING LTD.]
[ZOOM SHIPPING LTD] (1)
AND
NATIONAL BANK OF GREECE S.A. (2)
----------
DEED OF COVENANT
RELATING TO M.V. [ALEXANDROS] [ARISTOTELIS] [AKTOR]
[AGAMEMNON] [ACHILLEAS]
----------
[LOGO OF XXXXXX XXXX]
CONTENTS
CLAUSE PAGE
------ ----
1 Definitions...............................................................2
2 Mortgage and assignment...................................................6
3 Covenant to pay...........................................................7
4 Continuing security and other matters.....................................7
5 Covenants.................................................................8
6 Powers of Mortgagee to protect security and remedy defaults..............15
7 Powers of Mortgagee on Event of Default..................................16
8 Application of moneys....................................................18
9 Remedies cumulative and other provisions.................................19
10 Costs and indemnity......................................................20
11 Attorney.................................................................20
12 Further assurance........................................................21
13 Notice...................................................................21
14 Counterparts.............................................................22
15 Severability of provisions...............................................22
16 Law, and jurisdiction....................................................22
Schedule 1 Forms of Loss Payable Clauses......................................24
Schedule 2 Form of Notice of Assignment of Insurances.........................26
Schedule 3 Power of Attorney..................................................27
THIS DEED OF COVENANT is dated _________ 2003 and made BETWEEN:
(1) [FIGARO SHIPPING LTD.] [MAGIC STAR SHIPPING CO. LTD] [XXXX SHIPPING LTD]
[VAGUE SHIPPING LTD] [ZOOM SHIPPING LTD], a company incorporated in Malta
whose registered office is at 00/00 Xxxxxxxx Xxxxxxxxx, Xxxxxx Xxxxxx,
Xxxxxxxx, Xxxxx (the "OWNER"); and
(2) NATIONAL BANK OF GREECE S.A., of 00 Xxxxxx Xxxxxx, 000 00 Xxxxxx, Xxxxxx,
acting for the purpose of this Deed through its branch at 0 Xxxxxxxxxxx
Xxxxxx & Akti Miaoull, 185 35 Piraeus, Greece (the "MORTGAGEE").
WHEREAS:
(A) the Owner is the sole, absolute and unencumbered, legal and beneficial
owner of all shares in the Ship described in clause 1.2;
(B) by an agreement (the "LOAN AGREEMENT") dated _________ 2003 and made
between (1) the Owner and [Magic Star Shipping Co. Ltd, Xxxx Shipping Ltd,
Vague Shipping Ltd, Zoom Shipping Ltd and Ocean Village Maritime S.A.]
[Figaro Shipping Ltd, Xxxx Shipping Ltd, Vague Shipping Ltd, Zoom Shipping
Ltd and Ocean Village Maritime S.A.] [Figaro Shipping Ltd, Magic Star
Shipping Ltd, Vague Shipping Ltd, Zoom Shipping Ltd and Ocean Village
Maritime S.A.] [Figaro Shipping Ltd, Magic Star Shipping Co. Ltd, Xxxx
Shipping Ltd, Zoom Shipping Ltd and Ocean Village Maritime S.A.] [Figaro
Shipping Ltd, Magic Star Shipping Co. Ltd, Xxxx Shipping Co Ltd, Vague
Shipping Ltd and Ocean Village Maritime S.A.] as borrowers (therein and
herein together referred to as the "BORROWERS"), (2) National Bank of
Greece S.A. as arranger, (3) National Bank of Greece S.A. as agent,
security agent, swap provider and account bank and (4) the banks and
financial institutions referred to in schedule 1 thereto as lenders (the
"BANKS"), the Banks agreed (inter alia) to advance by way of loan to the
Borrowers jointly and severally, upon the terms and conditions therein
contained, the principal sum of up to Fifty three million two hundred and
fifty thousand Dollars ($53,250,000);
(C) by a master swap agreement dated as of _________ 2003 (the "MASTER SWAP
AGREEMENT") and made between the Borrowers and National Bank of Greece S.A.
as Swap Provider, the Swap Provider agreed the terms and conditions upon
which it would enter into (inter alia) interest rate swap transactions with
the Borrowers in respect of the Loan whether in whole or in part as the
case may be from time to time;
(D) pursuant to clause 2.1 of the agency agreement dated _________ 2003 (the
"AGENCY AGREEMENT") made between the Mortgagee and the Secured Creditors,
each of the Secured Creditors has appointed the Mortgagee as its security
agent and trustee and pursuant to a Trust Deed dated _________ 2003 and
executed by the Mortgagee (as trustee) in favour of the Secured Creditors,
the Mortgagee agreed to hold, receive, administer and enforce this Deed as
security agent and trustee of the Secured Creditors;
(E) the Owner has executed in favour of the Mortgagee a statutory Maltese
mortgage of even date herewith in account current form constituting a first
priority mortgage of all shares in the said Ship; and
(F) this Deed is supplemental to the Loan Agreement and the Mortgage and to the
security thereby created and is the [Figaro] [Magic] [Xxxx] [Vague] [Zoom]
Deed of Covenant referred to in the Loan Agreement but shall nonetheless
continue in full force and effect notwithstanding any discharge of the
Mortgage.
NOW THIS DEED WITNESSES AND IT IS HEREBY AGREED as follows:
1
1 DEFINITIONS
1.1 DEFINED EXPRESSIONS
Words and expressions defined in the Loan Agreement shall, unless the
context otherwise requires or unless otherwise defined herein, have
the same meanings when used in this Deed.
1.2 DEFINITIONS
In this Deed, unless the context otherwise requires:
"AGENCY AGREEMENT" means the agency agreement dated _____________ 2003
made between the Mortgagee and the Secured Creditors mentioned in
recital (D) above;
"APPROVED BROKERS" means such firm of insurance brokers, appointed by
the Owner, as may from time to time be approved in writing by the
Mortgagee for the purposes of this Deed;
"BANKING DAY" means a day on which dealings in deposits in Dollars are
carried on in the London Interbank Eurocurrency Market and (other than
Saturday or Sunday) on which banks are open for business in London,
Piraeus and New York City (or any other relevant place of payment
under the Loan Agreement);
"CASUALTY AMOUNT" means Three hundred thousand Dollars ($300,000) (or
the equivalent in any other currency);
"COLLATERAL INSTRUMENTS" means notes, bills of exchange, certificates
of deposit and other negotiable and non-negotiable instruments,
guarantees, indemnities and other assurances against financial loss
and any other documents or instruments which contain or evidence an
obligation (with or without security) to pay, discharge or be
responsible directly or indirectly for, any indebtedness or
liabilities of the Owner or any other person liable and includes any
documents or instruments creating or evidencing a mortgage, charge
(whether fixed or floating), pledge, lien, hypothecation, assignment,
trust arrangement or security interest of any kind;
"DEFAULT" means any Event of Default or any event or circumstance
which with the giving of notice or lapse of time or the satisfaction
of any other condition (or any combination thereof) would constitute
an Event of Default;
"EARNINGS" means all moneys whatsoever from time to time due or
payable to the Owner during the Security Period arising out of the use
or operation of the Ship including (but without limiting the
generality of the foregoing) all freight, hire and passage moneys,
income arising under pooling arrangements, compensation payable to the
Owner in the event of requisition of the Ship for hire, remuneration
for salvage and towage services, demurrage and detention moneys,
damages for breach (or payments for variation or termination) of any
charterparty or other contract for the employment of the Ship;
"ENCUMBRANCE" means any mortgage, charge (whether fixed or floating),
pledge, lien, hypothecation, assignment, trust arrangement or security
interest or other encumbrance of any kind securing any obligation of
any person or any type of preferential arrangement (including without
limitation title transfer and/or retention arrangements having a
similar effect);
"EXPENSES" means the aggregate at any relevant time (to the extent
that the same have not been received or recovered by the Mortgagee or
any Receiver) of:
(a) all losses, liabilities, costs, charges, expenses, damages and
outgoings of whatever nature (including, without limitation,
Taxes, repair costs, registration fees and insurance premiums)
suffered, incurred or paid by the Mortgagee or any Receiver in
connection with the exercise of the powers referred to in or
granted by this Deed or otherwise payable by the Owner in
accordance with clause 10; and
2
(b) interest on all such losses, liabilities, costs, charges,
expenses, damages and outgoings from the date on which the same
were suffered, incurred or paid by the Mortgagee or any Receiver
until the date of receipt or recovery thereof (whether before or
after judgment) at a rate per annum calculated in accordance with
clause 3.4 of the Loan Agreement (as conclusively certified by
the Mortgagee or such Receiver, as the case may be);
"INSURANCES" means all policies and contracts of insurance (which
expression includes all entries of the Ship in a protection and
indemnity or war risks association) which are from time to time during
the Security Period in place or taken out or entered into by or for
the benefit of the Owner (whether in the sole name of the Owner or in
the joint names of the Owner and the Mortgagee or otherwise) in
respect of the Ship and her Earnings or otherwise howsoever in
connection with the Ship and all benefits thereof (including claims of
whatsoever nature and return of premiums);
"LOAN" means the aggregate principal amount advanced and/or to be
advanced by the Banks to the Borrowers pursuant to the Loan Agreement
or, as the context may require, the amount thereof at any time
outstanding;
"LOAN AGREEMENT" means the agreement dated _________ 2003 mentioned in
recital (B) hereto;
"LOSS PAYABLE CLAUSES" means the provisions regulating the manner of
payment of sums receivable under the Insurances which are to be
incorporated in the relevant insurance documents, such provisions to
be in the forms set out in schedule 1 or in such other forms as may
from time to time be agreed in writing by the Mortgagee;
"MANAGEMENT AGREEMENT" means the agreement dated _________ 2003 made
between the Owner and the Manager or any other agreement previously
approved in writing by the Agent between the Owner and the Manager
providing (inter alia) for the Manager to manage the Ship;
"MANAGER" means Capital Ship Management Corp. of Panama, or any other
person appointed by the Owner, with the prior written consent of the
Mortgagee, as the manager of the Ship and includes its successors in
title;
"MASTER SWAP AGREEMENT" means the agreement referred to in recital (C)
hereto;
"MASTER SWAP AGREEMENT LIABILITIES" means at any relevant time all
liabilities, actual or contingent, present or future, owing to the
Swap Provider under the Master Swap Agreement;
"MORTGAGE" means the statutory mortgage mentioned in recital (E);
"MORTGAGED PROPERTY" means:
(a) the Ship;
(b) the Insurances;
(c) the Earnings; and
(d) any Requisition Compensation;
"MORTGAGEE" includes the successors in title and assignees of the
Mortgagee;
"NOTICE OF ASSIGNMENT OF INSURANCES" means a notice of assignment in
the form set out in schedule 2 or in such other form as may from time
to time be required or agreed in writing by the Mortgagee;
"OPERATING ACCOUNT" means an interest bearing Dollar account of the
Owner opened or (as the context may require) to be opened by the Owner
with the Account Bank and with account
3
number _______________________ and includes any sub-accounts thereof
and any other account designated in writing by the Agent to be an
Operating Account for the purposes of this Deed;
"OUTSTANDING INDEBTEDNESS" means the aggregate of the Loan and
interest accrued and accruing thereon, the Master Swap Liabilities,
the Expenses and all other sums of money from time to time owing to
the Secured Creditors, whether actually or contingently, under the
Loan Agreement and the other Security Documents or any of them;
"OWNER" includes the successors in title of the Owner;
"PORT OF REGISTRY" means the Port of Valletta or such other port of
registry approved in writing by the Mortgagee which the Ship is, or is
to be registered on, or at any relevant time hereafter,
"RECEIVER" means any receiver and/or manager appointed pursuant to
clause 7.2;
"REQUISITION COMPENSATION" means all sums of money or other
compensation from time to time payable during the Security Period by
reason of the Compulsory Acquisition of the Ship;
"SECURED CREDITORS" means, together, the Agent, the Swap Provider, the
Account Bank and the Banks and "SECURED CREDITOR" means any of them;
"SECURITY DOCUMENTS" means the Loan Agreement, the Master Swap
Agreement, the Mortgage, this Deed, the Manager's Undertaking and any
other such document as is defined in the Loan Agreement as a Security
Document or as may have been or may hereafter be executed to guarantee
and/or secure all or any part of the Loan, interest thereon and other
moneys from time to time owing by the Borrowers pursuant to the Loan
Agreement or the Master Swap Agreement (whether or not any such
document also secures money from time owing pursuant to any other
document or agreement);
"SECURITY PERIOD" means the period commencing on the date hereof and
terminating upon discharge of the security created by the Security
Documents by payment of all moneys payable thereunder;
"SHIP" means the vessel [Alexandros] [Aristotelis] [Aktor] [Agamemnon]
[Achilleas] registered at the Port of Valletta under Official Number
[4100] [4108] [4131] [8185] and includes any share or interest therein
and her engines, machinery, boats, tackle, outfit, equipment, spare
gear, fuel, consumable or other stores, belongings and appurtenances
whether on board or ashore and whether now owned or hereafter acquired
and also any and all additions, improvements and replacements
hereafter made in or to such vessel or any part thereof or in or to
her equipment and appurtenances aforesaid;
"TAXES" includes all present and future taxes, levies, imposts,
duties, fees or charges of whatever nature together with interest
thereon and penalties in respect thereof and "TAXATION" shall be
construed accordingly; and
"TOTAL LOSS" means;
(a) actual, constructive, compromised or arranged total loss of the
Ship; or
(b) the Compulsory Acquisition of the Ship; or
(c) the hijacking, theft, condemnation, capture, seizure, arrest,
detention or confiscation of the Ship (other than where the same
amounts to the Compulsory Acquisition of the Ship) by any
Government Entity, or by persons acting or purporting to act on
behalf of any Government Entity, unless the Ship be released and
restored to the Owner from such hijacking, theft, condemnation,
capture, seizure, arrest, detention or confiscation within thirty
(30) days after the occurrence thereof.
1.3 INSURANCE TERMS
4
In clause 5.1.1:
1.3.1 "EXCESS RISKS" means the proportion (if any) of claims for general
average, salvage and salvage charges and under the ordinary collision
clause not recoverable in consequence of the value at which the Ship
is assessed for the purpose of such claims exceeding her insured
value;
1.3.2 "PROTECTION AND INDEMNITY RISKS" means the usual risks (including oil
pollution and freight, demurrage and defence cover covered by a United
Kingdom protection and indemnity association or a protection and
indemnity association which is managed in London (including, without
limitation, the proportion (if any) of any sums payable to any other
person or persons in case of collision which are not recoverable under
the hull and machinery policies by reason of the incorporation therein
of clause 8 of the Institute Time Clauses (Hulls) (1/11/95) or the
Institute Amended Running Down Clause (1/10/71) or any equivalent
provision); and
1.3.3 "WAR RISKS" includes those risks covered by the standard form of
English marine policy with Institute War and Strikes Clauses
Hulls-Time (1/11/95) attached or similar cover.
1.4 CONSTRUCTION OF MORTGAGE TERMS
In the Mortgage:
1.4.1 references to "INTEREST" shall be construed as references to interest
covenanted to be paid in accordance with clause 3.1.2 and any interest
specified in paragraph (b) of the definition of "EXPENSES" in clause
1.2;
1.4.2 references to "PRINCIPAL" shall be construed as references to all
moneys (other than interest) for the time being comprised in the
Outstanding Indebtedness;
1.4.3 the term "ACCOUNT CURRENT" means an account or accounts maintained by
the Mortgagee, in accordance with its usual practice, evidencing the
amounts from time to time lent by, owing to and paid to it under the
Security Documents. Such account or accounts shall, in the absence of
manifest error, be conclusive as to the amount from time to time owing
by the Owner to the Mortgagee under the Security Documents and any
certificate from the Mortgagee as to the amount owing by the Owner
under the Security Documents shall be conclusive in the absence of
manifest error, and the sum specified in any such certificate shall be
the certain and liquidated sum owing by the Owner to the Mortgagee;
and
1.4.4 the expression "ALL SUMS FOR THE TIME BEING OWING AND FROM TIME TO
TIME OWING BY THE MORTGAGOR" means the whole of the Outstanding
Indebtedness.
1.5 HEADINGS
Clause headings and the table of contents are inserted for convenience
of reference only and shall be ignored in the interpretation of this
Deed.
1.6 CONSTRUCTION OF CERTAIN TERMS
In this Deed, unless the context otherwise requires:
1.6.1 references to clauses and schedules are to be construed as references
to clauses of, and schedules to, this Deed and references to this Deed
include its schedules;
1.6.2 references to (or to any specified provision of) this Deed or any
other document shall be construed as references to this Deed, that
provision or that document as in force for the time being and as
amended in accordance with the terms thereof, or, as the case may be,
with the agreement of the relevant parties;
1.6.3 words importing the plural shall include the singular and vice versa;
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1.6.4 references to a person shall be construed as references to an
individual, firm, company, corporation, unincorporated body of persons
or any Government Entity;
1.6.5 references to a "GUARANTEE" shall include references to an indemnity
or other assurance against financial loss including, without
limitation, an obligation to purchase assets or services as a
consequence of a default by any other person to pay any Indebtedness
and "GUARANTEED" shall be construed accordingly; and
1.6.6 references to statutory provisions shall be construed as references to
those provisions as replaced or amended or re-enacted from time to
time.
1.7 CONFLICT WITH LOAN AGREEMENT
This Deed shall be read together with the Loan Agreement but in case
of any conflict between the two instruments, the provisions of the
Loan Agreement shall prevail.
2 MORTGAGE AND ASSIGNMENT
2.1 MORTGAGE AND ASSIGNMENT
By way of security for payment of the Outstanding Indebtedness the
Owner with full title guarantee hereby mortgages and charges to and in
favour of the Mortgagee all its rights, title and interest present and
future in and to the Mortgaged Property and, without prejudice to the
generality of the foregoing, hereby assigns and agrees to assign to
the Mortgagee absolutely all its rights, title and interest in and to
the Earnings, the Insurances and any Requisition Compensation and all
its benefits and interests present and future therein Provided however
that:
2.1.1 Earnings
the Earnings shall be payable to the Operating Account until such time
as a Default shall occur and the Mortgagee shall direct to the
contrary whereupon the Owner shall forthwith, and the Mortgagee may at
any time thereafter, instruct the persons from whom the Earnings are
then payable to pay the same to the Mortgagee or as it may direct and
any Earnings then in the hands of the Owner's brokers or other agents
shall be deemed to have been received by them for the use and on
behalf of the Mortgagee;
2.1.2 Insurances
unless and until a Default shall occur (whereupon all insurance
recoveries, other than any moneys payable under any loss of earnings
insurance, shall be receivable by the Mortgagee and applied in
accordance with clause 8.1 or clause 8.4 (as the case may be)):
(a) any moneys payable under the Insurances other than any moneys
payable under any loss of earnings insurance, shall be payable in
accordance with the terms of the relevant Loss Payable Clause and
the Mortgagee will not in the meantime give any notification to
the contrary to the insurers as contemplated by the Loss Payable
Clauses; and
(b) any insurance moneys received by the Mortgagee in respect of any
major casualty (as specified in the relevant Loss Payable Clause)
shall, unless prior to receipt or whilst such moneys are in the
hands of the Mortgagee there shall have occurred a Default
(whereupon such insurance monies shall be applied in accordance
with clause 8.1 or clause 8.4 (as the case may be)), be paid over
to the Owner upon the Owner furnishing evidence satisfactory to
the Mortgagee that all loss and damage resulting from such
casualty has been properly made good and repaired, and that all
repair accounts and other liabilities whatsoever in connection
with the casualty have been fully paid and discharged by the
Owner, provided however that the insurers with whom the fire and
usual marine risks insurances are effected may, in the case of a
major casualty, and with the previous consent in writing of the
Mortgagee, make payment on account of repairs in the course of
being effected; and
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(c) any moneys payable under any loss of earnings insurance shall be
payable in accordance with the terms of the relevant Loss Payable
Clause and shall be subject to such provisions of this clause 2
as shall apply to Earnings and the Mortgagee will not give any
notification to the insurers as contemplated in such Loss Payable
Clause unless and until the Mortgagee shall have become entitled
under clause 2.1.1 to direct that the Earnings be paid to the
Mortgagee.
2.2 NOTICE
The Owner hereby covenants and undertakes with the Mortgagee that it
will from time to time upon the written request of the Mortgagee give
written notice (in such form as the Mortgagee shall reasonably
require) of the assignment herein contained to the persons from whom
any part of the Mortgaged Property is or may be due.
2.3 USE OF OWNER'S NAME
The Owner covenants and undertakes with the Mortgagee to do or permit
to be done each and every act or thing which the Mortgagee may from
time to time require to be done for the purpose of enforcing the
Mortgagee's rights under this Deed and to allow its name to be used as
and when required by the Mortgagee for that purpose.
2.4 REASSIGNMENT
Upon payment and discharge in full to the satisfaction of the
Mortgagee of the Outstanding Indebtedness, the Mortgagee shall, at the
request and cost of the Owner, re-assign the Earnings, the Insurances
and any Requisition Compensation to the Owner or as it may direct.
3 COVENANT TO PAY
3.1 In consideration of the advance by the Banks to the Borrowers on or
before the date hereof of the total principal sum of Twenty five
million six hundred and fifty thousand Dollars ($25,650,000) (receipt
of which sum the Owner hereby acknowledges) and the agreement of the
Banks to advance the additional sum of up to Twenty seven million six
hundred thousand Dollars ($27,600,000) to the Borrowers in accordance
with the provisions of the Loan Agreement, the Owner hereby covenants
with the Mortgagee:
3.1.1 to repay the Loan by the instalments and on the dates referred to and
otherwise in the manner and upon the terms set out in the Loan
Agreement;
3.1.2 to pay interest on the Loan, and on any overdue interest or other
moneys payable under the Loan Agreement, at the rate or rates from
time to time applicable thereto in the manner and upon the terms set
out in the Loan Agreement; and
3.1.3 to pay all other moneys payable by the Owner under the Security
Documents or any of them at the times and in the manner therein
specified.
4 CONTINUING SECURITY AND OTHER MATTERS
4.1 CONTINUING SECURITY
The security created by the Mortgage and this Deed shall:
4.1.1 be held by the Mortgagee as a continuing security for the payment of
the Outstanding Indebtedness and the performance and observance of and
compliance with all of the covenants, terms and conditions contained
in the Security Documents, express or implied and the security so
created shall not be satisfied by any intermediate payment or
satisfaction of any part of the amount hereby and thereby secured (or
by any settlement of accounts between the Owner or any other person
who may be liable to the Mortgagee or the Secured
7
Creditors or any of them in respect of the Outstanding Indebtedness or
any part thereof and the Mortgagee);
4.1.2 be in addition to, and shall not in any way prejudice or affect, and
may be enforced by the Mortgagee without prior recourse to, the
security created by any of the other Security Documents or by any
present or future Collateral Instruments, right or remedy held by or
available to the Mortgagee or the Secured Creditors or any right or
remedy of the Mortgagee or the Secured Creditors thereunder; and
4.1.3 not be in any way prejudiced or affected by the existence of any of
the other Security Documents or any such Collateral Instrument, rights
or remedies or by the same becoming wholly or in part void, voidable
or unenforceable on any ground whatsoever or by the Mortgagee dealing
with, exchanging, varying or failing to perfect or enforce any of the
same, or giving time for payment or performance or indulgence or
compounding with any other person liable.
4.2 RIGHTS ADDITIONAL
All the rights, remedies and powers vested in the Mortgagee hereunder
shall be In addition to and not a limitation of any and every other
right, power or remedy vested in the Mortgagee or the Secured
Creditors under the Loan Agreement, this Deed, the other Security
Documents or any such Collateral Instrument or at law and that all the
powers so vested in the Mortgagee or the Secured Creditors may be
exercised from time to time and as often as the Mortgagee or the
Secured Creditors may deem expedient.
4.3 NO ENQUIRY
Neither the Mortgagee nor any Receiver shall be obliged to make any
enquiry as to the nature or sufficiency of any payment received by it
under the Mortgage and/or this Deed or to make any claim or take any
action to collect any moneys hereby assigned or to enforce any rights
or benefits hereby assigned to the Mortgagee or to which the Mortgagee
may at any time be entitled under the Mortgage and/or this Deed.
4.4 OBLIGATIONS OF OWNER AND MORTGAGEE
The Owner shall remain liable to perform all the obligations assumed
by it in relation to the Mortgaged Property and the Mortgagee shall be
under no obligation of any kind whatsoever in respect thereof or be
under any liability whatsoever in the event of any failure by the
Owner to perform its obligations in respect thereof.
4.5 DISCHARGE OF MORTGAGE
Notwithstanding that this Deed is expressed to be supplemental to the
Mortgage it shall continue in full force and effect after any
discharge of the Mortgage.
5 COVENANTS
5.1 The Owner hereby covenants with the Mortgagee and undertakes
throughout the Security Period:
5.1.1 Insurance
(a) Insured risks, amounts and terms
to insure and keep the Ship insured free of cost and expense to
the Mortgagee and in the sole name of the Owner or, if so
required by the Mortgagee, in the joint names of the Owner and
the Mortgagee (but without liability on the part of the Mortgagee
for premiums or calls):
8
(i) against fire and usual marine risks (including excess risks)
and war risks, on an agreed value basis, in such amounts
(but not in any event less than whichever shall be the
greater of the market value of the Ship for the time being
and of an amount which, when aggregated with the equivalent
insurance of all other Mortgaged Ships shall be equal to at
least One hundred and thirty per cent (130%) of (A) the Loan
and (B) the Swap Exposure for the time being) and upon such
terms as shall from time to time be approved in writing by
the Mortgagee;
(ii) against protection and indemnity risks (including pollution
risks for the highest amount in respect of which cover is or
may become available for ships of the same type, size, age
and flag as the Ship and a freight, demurrage and defence
cover) for the full value and tonnage of the Ship (as
approved in writing by the Mortgagee) and upon such terms as
shall from time to time be approved in writing by the
Mortgagee; and
(iii) in respect of such other matters of whatsoever nature and
howsoever arising in respect of which insurance would be
maintained by a prudent owner of the Ship,
and to pay to the Mortgagee the cost (as conclusively certified
by the Mortgagee) of (aa) any mortgagee's interest insurance
(including, if the Mortgagee shall so require, mortgagee's
interest insurance - additional perils (pollution) coverage)
which the Mortgagee may from time to time effect in respect of
the Ship upon such terms and in such amounts (not exceeding when
aggregated with the equivalent insurance effected in connection
with all other Mortgaged Ships, One hundred and fifteen per cent
(115%) of (A) the Loan and (B) the Swap Exposure for the time
being) as it shall deem desirable; and (bb) any other insurance
cover which the Mortgagee may from time to time effect in respect
of the Ship and/or in respect of its interest or potential third
party liability as mortgagee of the Ship as the Mortgagee shall
deem desirable having regard to any limitations in respect of
amount or extent of cover which may from time to time be
applicable to any of the other insurances referred to in this
clause 5.1.1(a);
(b) Approved brokers, insurers and associations
to effect the insurances aforesaid in such currency as the
Mortgagee may approve and through the Approved Brokers (other
than the said mortgagee's interest insurance which shall be
effected through brokers nominated by the Mortgagee) and with
such insurance companies and/or underwriters as shall from time
to time be approved in writing by the Mortgagee; provided however
that the insurances against war risks and protection and
indemnity risks may be effected by the entry of the Ship with
such war risks and protection and indemnity associations as shall
from time to time be approved in writing by the Mortgagee;
(c) Fleet liens, set-off and cancellation
if any of the insurances referred to in clause 5.1.1(a) form part
of a fleet cover, to procure that the Approved Brokers shall
undertake to the Mortgagee that they shall neither set off
against any claims in respect of the Ship any premiums due in
respect of other vessels under such fleet cover or any premiums
due for other insurances, nor cancel the insurance for reason of
non-payment of premiums for other vessels under such fleet cover
or of premiums for such other insurances, and shall undertake to
issue a separate policy in respect of the Ship if and when so
requested by the Mortgagee;
(d) Payment of premiums and calls
punctually to pay all premiums, calls, contributions or other
sums payable in respect of all such insurances and to produce all
relevant receipts or other evidence of payment when so required
by the Mortgagee;
9
(e) Renewal
at least fourteen (14) days before the relevant policies,
contracts or entries expire, to notify the Mortgagee of the names
of the brokers and/or the war risks and protection and indemnity
associations proposed to be employed by the Owner or any other
party for the purposes of the renewal of such insurances and of
the amounts in which such insurances are proposed to be renewed
and the risks to be covered and, subject to compliance with any
requirements of the Mortgagee pursuant to this clause 5.1.1, to
procure that appropriate instructions for the renewal of such
insurances on the terms so specified are given to the Approved
Brokers and/or to the approved war risks and protection and
indemnity associations at least ten (10) days before the relevant
policies, contracts or entries expire, and that the Approved
Brokers and/or the approved war risks and protection and
indemnity associations will at least seven (7) days before such
expiry (or within such shorter period as the Mortgagee may from
time to time agree) confirm in writing to the Mortgagee as and
when such renewals have been effected in accordance with the
instructions so given;
(f) Guarantees
to arrange for the execution and delivery of such guarantees or
indemnities as may from time to time be required by any
protection and indemnity or war risks association;
(g) Hull policy documents, notices, loss payable clauses and brokers'
undertakings
to deposit with the Approved Brokers (or procure the deposit of)
all slips, cover notes, policies, certificates of entry or other
instruments of insurance from time to time issued in connection
with such of the insurances referred to in clause 5.1.1(a) as are
effected through the Approved Brokers and procure that the
interest of the Mortgagee shall be endorsed thereon by
incorporation of the relevant Loss Payable Clause and, where the
Insurances have been assigned to the Mortgagee, by means of a
Notice of Assignment of Insurances (signed by the Owner and by
any other assured who shall have assigned its interest in the
Insurances to the Mortgagee) and that the Mortgagee shall be
furnished with pro forma copies thereof and a letter or letters
of undertaking from the Approved Brokers in such form as shall
from time to time be required by the Mortgagee;
(h) Associations' loss payable clauses, undertakings and certificates
to procure that any protection and indemnity and/or war risks
associations in which the Ship is for the time being entered
shall endorse the relevant Loss Payable Clause on the relevant
certificate of entry or policy and shall furnish the Mortgagee
with a copy of such certificate of entry or policy and a letter
or letters of undertaking in such form as shall from time to time
be required by the Mortgagee;
(i) Extent of cover and exclusions
to take all necessary action and comply with all requirements
which may from time to time be applicable to the Insurances
(including, without limitation, the making of all requisite
declarations within any prescribed time limits and the payment of
any additional premiums or calls) so as to ensure that the
Insurances are not made subject to any exclusions or
qualifications to which the Mortgagee has not given its prior
written consent and are otherwise maintained on terms and
conditions from time to time approved in writing by the
Mortgagee;
(j) Correspondence with brokers and associations
to provide to the Mortgagee, at the time of each such
communication, copies of all written communications between the
Owner and the Approved Brokers and approved war risks and
protection and indemnity associations which relate to compliance
with requirements from time to time applicable to the Insurances
including, without limitation,
10
all requisite declarations and payments of additional premiums or
calls referred to in clause 5.1.1(i);
(k) Independent report
if so requested by the Mortgagee, but at the cost of the Owner,
to furnish the Mortgagee from time to time with a detailed report
signed by an independent firm of marine insurance brokers
appointed by the Mortgagee dealing with the insurances maintained
on the Ship and stating the opinion of such firm as to the
adequacy thereof;
(l) Collection of claims
to do all things necessary and provide all documents, evidence
and information to enable the Mortgagee to collect or recover any
moneys which shall at any time become due in respect of the
Insurances;
(m) Employment of Ship
not to employ the Ship or suffer the Ship to be employed
otherwise than in conformity with the terms of the Insurances
(including any warranties express or implied therein) without
first obtaining the consent of the insurers to such employment
and complying with such requirements as to extra premium or
otherwise as the insurers may prescribe; and
(n) Application of recoveries
to apply all sums receivable under the Insurances which are paid
to the Owner in accordance with the Loss Payable Clauses in
repairing all damage and/or in discharging the liability in
respect of which such sums shall have been received;
5.1.2 Ship's name and registration
not to change the name of the Ship and to keep the Ship registered as
a Maltese ship at the Port of Registry and not to do or suffer to be
done anything, or omit to do anything the doing or omission of which
could or might result in such registration being forfeited or
imperilled or closed or which could or might result in the Ship being
required to be registered otherwise than as a Maltese ship at the Port
of Registry and not to register the Ship or permit its registration
under any other flag or at any other port without the prior written
consent of the Mortgagee and if the said registration of the Ship is
for a limited period, to renew the registration of the Ship at least
forty-five (45) days prior to the expiry of such registration and to
provide evidence of such renewal to the Mortgagee at least thirty (30)
days prior to such expiry;
5.1.3 Repair
to keep the Ship in a good and efficient state of repair and procure
that all repairs to or replacement of any damaged, worn or lost parts
or equipment are effected in such manner (both as regards workmanship
and quality of materials) as not to diminish the value of the Ship;
5.1.4 Modification; removal of parts; equipment owned by third parties
not without the prior written consent of the Mortgagee to, or suffer
any other person to:
(a) make any modification to the Ship in consequence of which her
structure, type or performance characteristics could or might be
materially altered or her value materially reduced; or
(b) remove any material part of the Ship or any equipment the value
of which is such that its removal from the Ship would materially
reduce the value of the Ship without replacing
11
the same with equivalent parts or equipment which are owned by
the Owner free from Encumbrances; or
(c) install on the Ship any equipment owned by a third party which
cannot be removed without causing damage to the structure or
fabric of the Ship;
5.1.5 Maintenance of class; compliance with regulations
to maintain the Classification as the class of the Ship and to comply
with and ensure that the Ship at all times complies with the
provisions of the Maltese Merchant Shipping Act, Cap. 234 and all
regulations and requirements (statutory or otherwise) from time to
time applicable to vessels registered at the Port of Registry or
otherwise applicable to the Ship;
5.1.6 Surveys
to submit the Ship to continuous surveys and such periodical or other
surveys as may be required for classification purposes and to supply
to the Mortgagee copies of all survey reports issued in respect
thereof;
5.1.7 Inspection
to ensure that the Mortgagee, by surveyors or other persons appointed
by it for such purpose, may board the Ship at all reasonable times for
the purpose of inspecting her and to afford all proper facilities for
such inspections and for this purpose to give the Mortgagee reasonable
advance notice of any intended drydocking of the Ship (whether for the
purpose of classification, survey or otherwise);
5.1.8 Prevention of and release from arrest
promptly to pay and discharge all debts, damages, liabilities and
outgoings whatsoever which have given or may give rise to maritime,
statutory or possessory liens on, or claims enforceable against, the
Ship, her Earnings or Insurances or any part thereof and, in the event
of a writ or libel being filed against the Ship, her Earnings or
Insurances or any part thereof, or of any of the same being arrested,
attached or levied upon pursuant to legal process or purported legal
process or in the event of detention of the Ship in exercise or
purported exercise of any such lien or claim as aforesaid, to procure
the release of the Ship, her Earnings and Insurances from such arrest,
detention attachment or levy or, as the case may be, the discharge of
the writ or libel forthwith upon receiving notice thereof by providing
bail or procuring the provision of security or otherwise as the
circumstances may require;
5.1.9 Employment
not to employ the Ship or permit her employment in any manner, trade
or business which is forbidden by international law, or which is
unlawful or illicit under the law of any relevant jurisdiction, or in
carrying illicit or prohibited goods, or in any manner whatsoever
which may render her liable to condemnation in a prize court, or to
destruction, seizure, confiscation, penalty or sanctions and, in the
event of hostilities in any part of the world (whether war be declared
or not), not to employ the Ship or permit her employment in carrying
any contraband goods, or enter or trade to or to continue to trade in
any zone which has been declared a war zone by any Government Entity
or by the Ship's war risks insurers unless the prior written consent
of the Mortgagee is obtained and such special insurance cover as the
Mortgagee may require shall have been effected by the Owner and at its
expense;
5.1.10 Information
promptly to furnish the Mortgagee with all such information as it may
from time to time require regarding the Ship, her employment, position
and engagements, particulars of all towages and salvages, and copies
of all charters and other contracts for her employment, or otherwise
howsoever concerning her;
12
5.1.11 Notification of certain events
to notify the Mortgagee forthwith by facsimile thereafter confirmed by
letter of:
(a) any damage to the Ship requiring repairs the cost of which will
or might exceed the Casualty Amount;
(b) any occurrence in consequence of which the Ship has or may become
a Total Loss;
(c) any requisition of the Ship for hire;
(d) any requirement or recommendation made by any insurer or the
Classification Society or by any competent authority which is
not, or cannot be, complied with in accordance with its terms;
(e) any arrest or detention of the Ship or any exercise or purported
exercise of a lien or other claim on the Ship or the Earnings or
Insurances or any part thereof;
(f) any petition or notice of meeting to consider any resolution to
wind up the Owner (or any event analogous thereto under the laws
of the place of its incorporation);
(g) the occurrence of any Default; and
(h) the occurrence of any Environmental Claim against the Owner, the
Ship, any other Relevant Party or any other Relevant Ship or any
incident, event or circumstances which may give rise to any such
Environmental Claim;
5.1.12 Payment of outgoings and evidence of payments
promptly to pay all tolls, dues and other outgoings whatsoever in
respect of the Ship and her Earnings and Insurances and to keep proper
books of account in respect of the Ship and her Earnings and, as and
when the Mortgagee may so require, to make such books available for
inspection on behalf of the Mortgagee, and to furnish satisfactory
evidence that the wages and allotments and the insurance and pension
contributions of the Master and crew are being promptly and regularly
paid and that all deductions from crew's wages in respect of any
applicable tax liability are being properly accounted for and that the
Master has no claim for disbursements other than those incurred by him
in the ordinary course of trading on the voyage then in progress;
5.1.13 Encumbrances
not without the prior written consent of the Mortgagee (and then only
subject to such conditions as the Mortgagee may impose) to create or
purport or agree to create or permit to arise or subsist any
Encumbrance (other than Permitted Liens) over or in respect of the
Ship, any share or interest therein or in any other part of the
Mortgaged Property otherwise than to or in favour of the Mortgagee;
5.1.14 Sale or other disposal
not without the prior written consent of the Mortgagee (and then only
subject to such conditions as the Mortgagee may impose) to sell, agree
to sell, transfer, abandon or otherwise dispose of the Ship or any
share or interest therein;
5.1.15 Chartering
not without the prior written consent of the Mortgagee (which the
Mortgagee shall have full liberty to withhold) and, if such consent is
given, only subject to such conditions as the Mortgagee may impose, to
let the Ship:
13
(a) on demise charter for any period;
(b) by any time or consecutive voyage charter for a term which
exceeds or which by virtue of any optional extensions therein
contained may exceed thirteen (13) months' duration;
(c) on terms whereby more than two months' hire (or the equivalent)
is payable in advance;
(d) below the market rate prevailing at the time when the Ship is
fixed or other than on arms' length terms;
5.1.16 Sharing of Earnings
not without the prior written consent of the Mortgagee (and then only
subject to such conditions as the Mortgagee may impose) to enter into
any agreement or arrangement whereby the Earnings may be shared with
any other person;
5.1.17 Payment of Earnings
to procure that the Earnings are paid to the Operating Account
pursuant to clause 14.1 of the Loan Agreement (or to such other
account as the Mortgagee may from time to time agree) and to procure
that the same are paid to the Mortgagee at all times if and when the
same shall be or shall have become so payable in accordance with the
Security Documents after the Mortgagee shall have directed pursuant to
clause 2.1.1 that the same shall be no longer receivable by the Owner
and that any Earnings which are so payable and which are in the hands
of the Owner's brokers or agents are duly accounted for and paid over
to the Mortgagee forthwith on demand;
5.1.18 Repairers' liens
not without the prior written consent of the Mortgagee to put the Ship
into the possession of any person for the purpose of work being done
upon her in an amount exceeding or likely to exceed the Casualty
Amount unless such person shall first have given to the Mortgagee in
terms satisfactory to it, a written undertaking not to exercise any
lien on the Ship or the Earnings for the cost of such work or
otherwise;
5.1.19 Manager
not without the prior written consent of the Mortgagee to appoint any
manager of the Ship other than the Manager or to terminate, or amend
the terms of, the Management Agreement;
5.1.20 Notice of Mortgage
to place and at all times and places to retain a properly certified
copy of the Mortgage and this Deed (which shall form part of the
Ship's documents) on board the Ship with her papers and cause such
certified copy of the Mortgage and this Deed to be exhibited to any
and all persons having business with the Ship which might create or
imply any commitment or encumbrance whatsoever on or in respect of the
Ship (other than a lien for crew's wages and salvage) and to any
representative of the Mortgagee and to place and keep prominently
displayed in the navigation room and in the Master's cabin of the Ship
a framed printed notice in plain type reading as follows:
"NOTICE OF MORTGAGE
This Ship is subject to a first priority mortgage and deed of covenant
in favour of [HERE INSERT NAME OF MORTGAGEE] of [HERE INSERT ADDRESS
OF MORTGAGEE]. Under the said mortgage and deed of covenant, neither
the Owner nor any charterer nor the Master of this Ship has any right,
power or authority to create, incur or permit to be imposed upon this
Ship any commitments or encumbrances whatsoever other than for crew's
wages and salvage"
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and in terms of the said notice it is hereby agreed that save and
subject as otherwise herein provided, neither the Owner nor any
charterer nor the Master of the Ship nor any other person has any
right, power or authority to create, incur or permit to be imposed
upon the Ship any lien whatsoever other than for crew's wages and
salvage;
5.1.21 Conveyance on default
where the Ship is (or is to be) sold in exercise of any power
contained in this Deed or otherwise conferred on the Mortgagee, to
execute, forthwith upon request by the Mortgagee, such form of
conveyance of the Ship as the Mortgagee may require;
5.1.22 Anti-drug abuse
without prejudice to clause 5.1.9, to take all necessary and proper
precautions to prevent any infringements of the Anti-Drug Abuse Act of
1986 of the United States of America or any similar legislation
applicable to the Ship in any jurisdiction in or to which the Ship
shall be employed or located or trade or which may otherwise be
applicable to the Ship and/or the Owner and, if the Mortgagee shall so
require, to enter into a "Carrier Initiative Agreement" with the
United States Customs Service and to procure that the same agreement
(or any similar agreement hereafter introduced by any Government
Entity of the United States of America) is maintained in full force
and effect and performed by the Owner;
5.1.23 Compliance with Environmental Laws
to comply with, and procure that all Environmental Affiliates of the
Owner comply with, all Environmental Laws including, without
limitation, requirements relating to xxxxxxx and establishment of
financial responsibility and to obtain and comply with, and procure
that all Environmental Affiliates of the Owner obtain and comply with,
all Environmental Approvals;
5.1.24 Injunction order
to appear, if and when requested by the Mortgagee, before the relevant
courts of the Republic of Malta and consent to an injunction order
restraining the owner from selling, transferring, mortgaging or in any
other way charging or dealing in the Ship pursuant to Section 37 of
the Maltese Merchant Shipping Act, Cap. 234;
5.1.25 to execute, whenever required by the Mortgagee, an instrument of
mortgage amending the Mortgage in terms of Section 45A of the Maltese
Merchant Shipping Act, Cap. 234; and
5.1.26 Survey reports
to deliver to the Mortgagee on the date falling five years after the
date of this Deed and on each of the dates falling at twelve (12)
months thereafter a report prepared by surveyors or inspectors
appointed by the Mortgagee in relation to the seaworthiness and safe
operation of the Ship, to produce evidence to the Mortgagee that any
recommendations made in such reports have been complied with or will
be complied with in accordance with their terms, in full and
thereafter to procure that such recommendations are so complied with.
6 POWERS OF MORTGAGEE TO PROTECT SECURITY AND REMEDY DEFAULTS
6.1 PROTECTIVE ACTION
The Mortgagee shall, without prejudice to its other rights, powers and
remedies under any of the Security Documents, be entitled (but not
bound) at any time, and as often as may be necessary, to take any such
action as it may in its discretion think fit for the purpose of
protecting or maintaining the security created by this Deed and the
other Security Documents, and all Expenses attributable thereto shall
be payable by the Owner on demand.
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6.2 REMEDY OF DEFAULTS
Without prejudice to the generality of the provisions of clause 6.1:
6.2.1 if the Owner fails to comply with any of the provisions of clause
5.1.1 the Mortgagee shall be entitled (but not bound) to effect and
thereafter to maintain all such insurances upon the Ship as in its
discretion it may think fit in order to procure the compliance with
such provisions or alternatively, to require the Ship (at the Owner's
risk) to remain in, or to proceed to and remain in a port designated
by the Mortgagee until such provisions are fully complied with;
6.2.2 if the Owner fails to comply with any of the provisions of clauses
5.1.3, 5.1.5 or 5.1.6, the Mortgagee shall be entitled (but not bound)
to arrange for the carrying out of such repairs, changes or surveys as
it may deem expedient or necessary in order to procure the compliance
with such provisions; and
6.2.3 if the Owner fails to comply with any of the provisions of clause
5.1.8 the Mortgagee shall be entitled (but not bound) to pay and
discharge all such debts, damages, liabilities and outgoings as are
therein mentioned and/or to take any such measures as it may deem
expedient or necessary for the purpose of securing the release of the
Ship in order to procure the compliance with such provisions,
and the Expenses attributable to the exercise by the Mortgagee of any
such powers shall be payable by the Owner to the Mortgagee on demand.
7 POWERS OF MORTGAGEE ON EVENT OF DEFAULT
7.1 POWERS
Upon the happening of any Event of Default, the Mortgagee shall become
forthwith entitled by notice given to the Owner in accordance with the
provisions of clause 10.2 of the Loan Agreement to declare the
Outstanding Indebtedness to be due and payable immediately or in
accordance with such notice, whereupon the Outstanding Indebtedness
shall become so due and payable and (whether or not the Agent shall
have given any such notice) the Mortgagee shall become forthwith
entitled, as and when it may see fit, to put into force and exercise
in relation to the Mortgaged Property or any part thereof all or any
of the rights, powers and remedies possessed by it as mortgagee of the
Mortgaged Property (whether at law, by virtue of the Mortgage and this
Deed or otherwise) and in particular (without limiting the generality
of the foregoing):
7.1.1 to take possession of the Ship;
7.1.2 to require that all policies, contracts, certificates of entry and
other records relating to the Insurances (including details of and
correspondence concerning outstanding claims) be delivered forthwith
to such adjusters and/or brokers and/or other insurers as the
Mortgagee may nominate;
7.1.3 to collect, recover, compromise and give a good discharge for, all
claims then outstanding or thereafter arising under the Insurances or
any of them or in respect of any other part of the Mortgaged Property,
and to take over or institute (if necessary using the name of the
Owner) all such proceedings in connection therewith as the Mortgagee
in its absolute discretion thinks fit, and, in the case of the
Insurances, to permit the brokers through whom collection or recovery
is effected to charge the usual brokerage therefor;
7.1.4 to discharge, compound, release or compromise claims in respect of the
Ship or any other part of the Mortgaged Property which have given or
may give rise to any charge or lien or other claim on the Ship or any
other part of the Mortgaged Property or which are or may be
enforceable by proceedings against the Ship or any other part of the
Mortgaged Property;
7.1.5 to sell the Ship or any share or interest therein with or without
prior notice to the Owner, and with or without the benefit of any
charterparty, and free from any claim by the Owner (whether
16
in admiralty, in equity, at law or by statute) by public auction or
private contract, at such place and upon such terms as the Mortgagee
in its absolute discretion may determine, with power to postpone any
such sale, and without being answerable for any loss occasioned by
such sale or resulting from postponement thereof and with power, where
the Mortgagee purchases the Ship, to make payment of the sale price by
making an equivalent reduction in the amount of the Outstanding
Indebtedness in the manner referred to in clause 8.1;
7.1.6 to manage, insure, maintain and repair the Ship, and to employ, sail
or lay up the Ship in such manner and for such period as the
Mortgagee, in its absolute discretion, deems expedient accounting only
for net profits arising from any such employment; and
7.1.7 to recover from the Owner on demand all Expenses incurred or paid by
the Mortgagee in connection with the exercise of the powers (or any of
them) referred to in this clause 7.1.
7.2 RECEIVER
7.2.1 Appointment
At any time after the Outstanding Indebtedness shall have become due
and payable in accordance with a notice given by the Mortgagee to the
Owner pursuant to clause 10.2 of the Loan Agreement, the Mortgagee
shall be entitled (but not bound) by writing under its Common Seal or
under the hand of any Director or officer of the Mortgagee to appoint
any person or persons to be a receiver and/or manager of the Mortgaged
Property or any part thereof (with power to authorise any joint
receiver and/or manager to exercise any power independently of any
other joint receiver and/or manager) and may from time to time fix his
remuneration, and may remove any receiver and/or manager so appointed
and appoint another in his place. Any receiver and/or manager so
appointed shall be the agent of the Owner and the Owner shall be
solely responsible for his acts or defaults and for his remuneration,
and such receiver and/or manager so appointed shall have all powers
conferred by the Law of Property Xxx 0000 without the restrictions
contained in sections 93 and 103 of that Act and, in addition, power
on behalf of and at the cost of the Owner (notwithstanding any
liquidation of the Owner) to do or omit to do anything which the Owner
could do or omit to do in relation to the Mortgaged Property or any
part thereof and in particular (but without prejudice to the
generality of the foregoing) any such receiver and/or manager may
exercise all the powers and discretions conferred on the Mortgagee by
the Mortgage and this Deed.
7.2.2 Remuneration
Any Receiver shall be entitled to remuneration appropriate to the work
and responsibilities involved, upon the basis of charging from time to
time adopted by the Receiver in accordance with the current practice
of his firm, without being limited to the maximum rate specified in
section 109(6) of the Law of Property Xxx 0000.
7.2.3 Liability of mortgagee in possession
Neither the Mortgagee nor any Receiver shall be liable as mortgagee in
possession in respect of all or any of the Mortgaged Property to
account or be liable for any loss upon realisation or for any neglect
or default of any nature whatsoever in connection therewith for which
a mortgagee in possession may be liable as such.
7.3 DEALINGS WITH MORTGAGEE OR RECEIVER
Upon any sale of the Ship or any share or interest therein by the
Mortgagee pursuant to clause 7.1.5 or pursuant to clause 11.1, or by
any Receiver, the purchaser shall not be bound to see or enquire
whether the Mortgagee's power of sale has arisen in the manner
provided in this Deed and the sale shall be deemed to be within the
power of the Mortgagee (or the Receiver, as the case may be) and the
receipt of the Mortgagee (or the Receiver, as the case may be) for the
purchase money shall effectively discharge the purchaser who shall not
be concerned with the manner of application of the proceeds of sale or
be in any way answerable therefor and the sale
17
shall operate to divest the Owner of all rights, title and interest of
any nature whatsoever in the Ship and to bar any such interest of the
Owner and all persons claiming through or under the Owner.
8 APPLICATION OF MONEYS
8.1 APPLICATION
All moneys received by the Mortgagee or any Receiver in respect of:
8.1.1 sale of the Ship or any share or interest therein;
8.1.2 recovery under the Insurances (other than under any loss of earnings
insurance and any such sum or sums as may have been received by the
Mortgagee in accordance with the relevant Loss Payable Clause in
respect of a major casualty as therein defined and paid over to the
Owner as provided in clause 2.1.2(b) or which fail to be otherwise
applied under clause 8.4);
8.1.3 Requisition Compensation; and
8.1.4 in respect to the employment of the Ship pursuant to the provisions of
clause 7.1.6,
shall be held by it upon trust in the first place to pay or make good
the Expenses and the balance shall:
(a) in the case of moneys received in respect of sale of the Ship or
recovery under the Insurances in relation to a Total Loss of the
Ship or Requisition Compensation:
(i) if no Default has occurred, be applied in making such
prepayment as the Agent may require in accordance with
clause 4.3 of the Loan Agreement and any payments required
pursuant to clause 4.4 of the Loan Agreement and the
balance, if any, shall be paid to the Owner; or
(ii) if a Default has occurred and is continuing but no Event of
Default has occurred be retained by the Mortgagee until such
time as such Default is remedied and no other Default has
occurred and is continuing (whereupon such moneys shall be
applied in making such prepayment as the Agent may require
in accordance with clause 4.3 of the Loan Agreement and any
payments required pursuant to clause 4.4 of the Loan
Agreement and the balance, if any, shall be paid to the
Owner) and/or shall be applied by the Mortgagee in or
towards satisfaction of any sums due and payable by the
Owner under the Security Documents or any of them by virtue
of payment demanded thereunder, in each case as the
Mortgagee (acting on the instructions of the Majority Banks)
may in its absolute discretion determine; and
(b) if an Event of Default has occurred, be applied by the Mortgagee
in the manner specified in clause 13.1 of the Loan Agreement
and/or sub-clause 8.1.4(a)(ii) above, as the Mortgagee (acting on
the instructions of the Majority Banks) may in its absolute
discretion determine.
8.2 SHORTFALLS
In the event that the balance referred to in clause 8.1 is
insufficient to pay in full the whole of the Outstanding Indebtedness,
the Mortgagee or the Receiver, as the case may be, shall be entitled
to collect the shortfall from the Owner or any other person liable for
the time being therefor.
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8.3 APPLICATION OF EARNINGS RECEIVED BY MORTGAGEE OR RECEIVER
Any moneys received by the Mortgagee or any Receiver in respect of the
Earnings shall:
8.3.1 if received by the Mortgagee, or in the hands of the Mortgagee, prior
to the occurrence of an Event of Default, be retained by the Mortgagee
and shall be paid over by the Mortgagee, to the Operating Account at
such times, in such amounts and for such purposes and/or shall be
applied by the Mortgagee, in or towards satisfaction of any sums from
time to time accruing due and payable by the Owner under the Loan
Agreement, this Deed, the Mortgage or any of the other Security
Documents or any of them or by virtue of payment demanded thereunder,
in each case as the Mortgagee (acting on the instructions of the
Majority Banks), may in its absolute discretion determine; and
8.3.2 if received by the Mortgagee or any Receiver, or in the hands of the
Mortgagee or any Receiver, after the occurrence of an Event of
Default, be applied by the Mortgagee or any Receiver, in the manner
specified in clause 8.1.4(b) and/or clause 8.3.1, as the Mortgagee or
any Receiver (acting on the instructions of the Majority Banks), may
in its absolute discretion determine.
8.4 APPLICATION OF INSURANCES RECEIVED BY MORTGAGEE OR RECEIVER
Any moneys received by the Mortgagee or any Receiver in respect of the
Insurances (other than in respect of recovery under any loss of
earnings insurance or in respect of a Total Loss) shall:
8.4.1 if received by the Mortgagee, or in the hands of the Mortgagee, after
the occurrence of a Default but prior to the occurrence of an Event of
Default, be retained by the Mortgagee, and shall be paid over by the
Mortgagee, to the Owner at such times, in such amounts and for such
purposes and/or shall be applied by the Mortgagee, in or towards
satisfaction of any sums from time accruing due and payable by the
Owner under the Loan Agreement, this Deed, the Mortgage, the Security
Documents or any of them or by virtue of payment demanded thereunder,
in each case as the Mortgagee (acting on the instructions of the
Majority Banks), may in its absolute discretion determine; and
8.4.2 if received by the Mortgagee or any Receiver, or in the hands of the
Mortgagee or any Receiver, after the occurrence of an Event of
Default, be applied by the Mortgagee or such Receiver, in the manner
specified in clause 8.1.4(b) and/or clause 8.4.1, as the Mortgagee or
any Receiver (acting on the instructions of the Majority Banks), may
in its absolute discretion determine.
9 REMEDIES CUMULATIVE AND OTHER PROVISIONS
9.1 NO IMPLIED WAIVERS; REMEDIES CUMULATIVE
No failure or delay on the part of the Mortgagee or the Secured
Creditors or any of them to exercise any right, power or remedy vested
in it under the Loan Agreement, this Deed, the Mortgage or any of the
other Security Documents shall operate as a waiver thereof, nor shall
any single or partial exercise by the Mortgagee of any right, power or
remedy nor the discontinuance, abandonment or adverse determination of
any proceedings taken by the Mortgagee to enforce any right, power or
remedy preclude any other or further exercise thereof or proceedings
to enforce the same or the exercise of any other right, power or
remedy nor shall the giving by the Mortgagee of any consent to any act
which by the terms of this Deed requires such consent prejudice the
right of the Mortgagee to withhold or give consent to the doing of any
other similar act. The remedies provided in the Loan Agreement, this
Mortgage and the other Security Documents are cumulative and are not
exclusive of any remedies provided by law.
9.2 DELEGATION
The Mortgagee shall be entitled, at any time and as often as may be
expedient, to delegate all or any of the powers and discretions vested
in it by the Mortgage and this Deed (including the power vested in it
by virtue of clause 11) or any of the other Security Documents in such
19
manner, upon such terms, and to such persons as the Mortgagee in its
absolute discretion may think fit.
9.3 INCIDENTAL POWERS
The Mortgagee shall be entitled to do all acts and things incidental
or conducive to the exercise of any of the rights, powers or remedies
possessed by it as mortgagee of the Ship (whether at law, under the
Mortgage and/or this Deed or otherwise) and in particular (but without
prejudice to the generality of the foregoing), upon becoming entitled
to exercise any of its powers under clause 7.1, the Mortgagee shall be
entitled to discharge any cargo on board the Ship (whether the same
shall belong to the Owner or any other person) and to enter into such
other arrangements in respect of the Ship, her insurances, management,
maintenance, repair, classification and employment in all respects as
if the Mortgagee was the owner of the Ship, but without being
responsible for any loss incurred as a result of the Mortgagee doing
or omitting to do any such acts or things as aforesaid.
10 COSTS AND INDEMNITY
10.1 COSTS
The Owner shall pay to the Mortgagee on demand on a full indemnity
basis all expenses or liabilities of whatsoever nature (including
legal fees, fees of insurance advisers, printing, out-of-pocket
expenses, stamp duties, registration fees and other duties or charges)
together with any value added tax or similar tax payable in respect
thereof, incurred by the Mortgagee in connection with the enforcement
of, or preservation of any rights under, the Mortgage, this Deed or
otherwise in respect of the Outstanding Indebtedness and the security
therefor or in connection with the preparation, completion, execution
or registration of the Loan Agreement, the Mortgage or this Deed or
any of the other Security Documents.
10.2 MORTGAGEE'S AND RECEIVER'S INDEMNITY
The Owner hereby agrees and undertakes to indemnify the Mortgagee and
any Receiver against all losses, actions, claims, expenses, demands,
obligations and liabilities whatever and whenever arising which may
now or hereafter be incurred by the Mortgagee or any such Receiver, or
by any manager, agent, officer or employee for whose liability, act or
omission it or he may be answerable, in respect of, in relation to, or
in connection with anything done or omitted in the exercise or
purported exercise of the powers contained in the Mortgage, this Deed,
or otherwise in connection therewith and herewith or with any part of
the Mortgaged Property or otherwise howsoever in relation to, or in
connection with, any of the matters dealt with in the Mortgage or this
Deed.
11 ATTORNEY
11.1 POWER
By way of security, the Owner hereby irrevocably appoints the
Mortgagee and any Receiver, jointly and also severally, to be its
attorney generally for and in the name and on behalf of the Owner, and
as the act and deed or otherwise of the Owner to execute, seal and
deliver and otherwise perfect and do all such deeds, assurances,
agreements, instruments, acts and things which may be required for the
full exercise of all or any of the rights, powers or remedies
conferred by the Mortgage, this Deed, the Loan Agreement or any of the
other Security Documents, or which may be deemed proper in or in
connection with all or any of the purposes aforesaid (including,
without prejudice to the generality of the foregoing the power to
sell, transfer and otherwise dispose of or deal with the Ship, the
execution and delivery of a xxxx of sale of the Ship and to apply for
the closure of the Maltese Registry in respect of the Ship in
accordance with Section 28 of the Merchant Shipping Act, Cap. 234 of
Malta and to pay all such fees, make all such declarations and receive
all such certificates, including the deletion certificate as may be
necessary and the power to procure at any time from the Registrar
General of Shipping in Malta copies duly authenticated by him of the
Security Documents or any of them). The power hereby conferred shall
be a general power of attorney under the Powers of
20
Xxxxxxxx Xxx 0000, and the Owner ratifies and confirms, and agrees to
ratify and confirm, any deed, assurance, agreement, instrument, act or
thing which the Mortgagee or the Receiver may execute or do pursuant
thereto. Provided always that such power shall not be exercisable by
or on behalf of the Mortgagee until the happening of an Event of
Default. The parties hereto declare that the mandate hereby granted is
so granted in the interest of the Mortgagee and as part of its
security.
11.2 EXERCISE OF POWER
The exercise of such power by or on behalf of the Mortgagee or any
Receiver shall not put any person dealing with the Mortgagee or the
Receiver upon any enquiry as to whether any Event of Default has
happened, nor shall such person be in any way affected by notice that
no such Event of Default has happened, and the exercise by the
Mortgagee or the Receiver of such power shall be conclusive evidence
of the Mortgagee's or such Receiver's right to exercise the same.
11.3 FILINGS
The Owner hereby irrevocably appoints the Mortgagee and any Receiver
jointly and also severally to be its attorney in its name and on its
behalf of the Owner and as its act and deed or otherwise of it, to
agree the form of and to execute and do all deeds, instruments, acts
and things in order to file, record, register or enrol this Deed and
the Mortgage in any court, public office or elsewhere which the
Mortgagee may in its discretion consider necessary or advisable, now
or in the future, to ensure the legality, validity, enforceability or
admissibility in evidence thereof and any other assurance, document,
act or thing required to be executed by the Owner pursuant to clause
12.
11.4 POWER OF ATTORNEY IN SCHEDULE 3
In order to assist the Mortgagee to obtain the full benefit of this
clause 11, the Owner irrevocably and unconditionally undertakes to
execute in favour of, and deliver to, the Mortgagee a power of
attorney in the form set out in schedule 3.
12 FURTHER ASSURANCE
The Owner hereby further undertakes at its own expense from time to
time to execute, sign, perfect, do and (if required) register every
such further assurance, document, act or thing as in the opinion of
the Mortgagee may be necessary or desirable for the purpose of more
effectually mortgaging and charging the Mortgaged Property or
perfecting the security constituted or intended to be constituted by
the Mortgage and this Deed or contemplated by the Loan Agreement.
13 NOTICES
Every notice, request, demand or other communication under this Deed
shall:
13.1.1 be in writing delivered personally or by first-class prepaid letter
(if available) or facsimile transmission or other means of
telecommunication in permanent written form;
13.1.2 be deemed to have been received in the case of a letter, when
delivered personally or three (3) days after it has been put in to the
post and, in the case of a facsimile transmission or other means of
telecommunication in permanent written form, at the time of despatch
(provided that if the date of despatch is not a business day in the
country of the addressee or if the time of despatch is after the close
of business in the country of the addressee it shall be deemed to have
been received at the opening of business on the next such business
day); and
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13.1.3 be sent:
(a) to the Owner at:
Capital Ship Management Corp.
0 Xxxxxxxx Xxxxxx
Xxxxxxx 000 00
Xxxxxx
Fax no: x00 000 000 0000
Attention: Mr Syntychakis
(b) to the Mortgagee at:
National Bank of Greece S.A.
0 Xxxxxxxxxxx Xxxxxx & Akti Xxxxxxx
Xxxxxxx 000 00
Xxxxxx
Fax no: x00 000 000 0000
Attention: Xxxxx Xxxxxxxx/Xxxxxxxxxxxx Xxxxxxxxx
or to such other address and/or numbers as is notified by one party to
the other party under this Deed.
14 COUNTERPARTS
This Deed may be entered into in the form of two counterparts, each
executed by one of the parties, and, provided both the parties shall
so execute this Deed, each of the executed counterparts, when duly
exchanged or delivered, shall be deemed to be an original but, taken
together, they shall constitute one instrument.
15 SEVERABILITY OF PROVISIONS
Each of the provisions in this Deed are severable and distinct from
the others, and if at any time one or more such provisions is or
becomes invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions of this Deed shall not in
any way be affected or impaired thereby.
16 LAW, AND JURISDICTION
16.1 LAW
This Deed is governed by, and shall be construed in accordance with,
English law.
16.2 SUBMISSION TO JURISDICTION
For the benefit of the Mortgagee, the parties hereto irrevocably agree
that any legal action or proceedings in connection with the Mortgage
and/or this Deed may be brought in the English courts or in the courts
of any other country chosen by the Mortgagee, each of which shall have
jurisdiction to settle any disputes arising out of or in connection
with the Mortgage and/or this Deed. The Owner irrevocably and
unconditionally submits to the jurisdiction of the English courts and
the courts of any country chosen by the Mortgagee and irrevocably
designates, appoints and empowers Curzon Maritime Ltd at present of
Xx. Xxxxx Xxxxx, 00/00 Xxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX, to receive,
for it and on its behalf, service of process issued out of the English
courts in any legal action or proceedings arising out of or in
connection with the Mortgage and/or this Deed. The submission to such
jurisdiction shall not (and shall not be construed so as to) limit the
right of the Mortgagee to take proceedings against the Owner in any
other court of competent jurisdiction nor shall the taking of
proceedings in any one or more
22
jurisdictions preclude the taking of proceedings in any other
jurisdiction, whether concurrently or not. The parties further agree
that only the courts of England and not those of any other State shall
have jurisdiction to determine any claim which the Owner may have
against the Mortgagee arising out of or in connection with the
Mortgage and/or this Deed.
16.3 MALTESE LEGAL PROCEEDINGS
If any legal action or proceedings arising out of or in connection
with the Mortgage or this Deed is begun in Malta any writ, judgement,
notice of proceedings or other legal process shall sufficiently be
served on the Owner if served or delivered to any one director of the
Owner or Xx Xxxx Xxxxxxxxx of 00/00 Xxxxxxxx Xxxxxxxxx, Xxxxxx Xxxxxx,
Xxxxxxxx, Xxxxx who the Owner hereby nominates as its attorney in
Malta for those purposes. The Owner covenants with the Mortgagee not
to revoke its appointment of such director or person as its legal
representative in Malta for the purposes aforesaid and in the event of
such director's or person's resignation or in any case where such
director or person is unable to fulfil such capacity to procure that
the Mortgagee is informed in writing forthwith, that another suitable
person resident in Malta is appointed legal representative in such
director's or person's place and that the Mortgagee is informed
promptly of the name and address of such substitute.
16.4 CONTRACTS (RIGHTS OF THIRD PARTIES ACT) 1999
No term of this Deed is enforceable under the Contracts (Rights of
Third Parties Act) 1999 by a person who is not a party to this Deed.
IN WITNESS whereof this Deed has been duly executed as a deed the day and year
first above written.
23
SCHEDULE 1
FORMS OF LOSS PAYABLE CLAUSES
1 HULL AND MACHINERY (MARINE AND WAR RISKS)
By a Deed of Covenant dated _____________ 2003, [FIGARO SHIPPING LTD.]
[MAGIC STAR SHIPPING CO. LTD] [XXXX SHIPPING LTD] [VAGUE SHIPPING
LTD.] [ZOOM SHIPPING LTD], a company incorporated under the laws of
Malta whose registered office is at 00/00 Xxxxxxxx Xxxxxxxxx, Xxxxxx
Xxxxxx, Xxxxxxxx, Xxxxx (the "OWNER") has assigned to NATIONAL BANK OF
GREECE S.A., of 00 Xxxxxx Xxxxxx, 000 00 Xxxxxx, Xxxxxx, acting
through its branch at 0 Xxxxxxxxxxx Xxxxxx & Xxxx Xxxxxxx, 000 00
Xxxxxxx, Xxxxxx (the "MORTGAGEE") all the Owner's rights, title and
interest in and to all policies and contracts of insurance from time
to time taken out or entered into by or for the benefit of the Owner
in respect of m.v. [Alexandros] [Aristotelis] [Aktor] [Agamemnon]
[Achilleas] and accordingly:
1.1 all claims hereunder in respect of an actual or constructive or
compromised or arranged total loss, and all claims in respect of
a major casualty (that is to say any casualty the claim in
respect of which exceeds US$300,000 (or the equivalent in any
other currency) inclusive of any deductible) shall be paid in
full to the Mortgagee or to its order; and
1.2 all other claims hereunder shall be paid in full to the Owner or
to its order, unless and until the Mortgagee shall have notified
the insurers hereunder to the contrary, whereupon all such claims
shall be paid to the Mortgagee or to its order.
2 WAR RISKS
It is noted that NATIONAL BANK OF GREECE S.A., of 00 Xxxxxx Xxxxxx,
000 00 Xxxxxx, Xxxxxx, acting through its branch at 0 Xxxxxxxxxxx
Xxxxxx & Xxxx Xxxxxxx, 000 00 Xxxxxxx, Xxxxxx (the "MORTGAGEE") is
interested as first mortgagee in the subject matter of this insurance.
Save as hereinafter provided, all claims (whether in respect of
actual, constructive, arranged or compromised total loss or otherwise)
which, but for this Loss Payable Clause would be payable to [FIGARO
SHIPPING LTD.] [MAGIC STAR SHIPPING CO. LTD] [XXXX SHIPPING LTD]
[VAGUE SHIPPING LTD.] [ZOOM SHIPPING LTD], a company incorporated
under the laws of Malta whose registered office is at 00/00 Xxxxxxxx
Xxxxxxxxx, Xxxxxx Xxxxxx, Xxxxxxxx, Xxxxx (the "OWNER") shall be
payable to the Mortgagee, provided always that unless and until notice
in writing to the contrary has been received by the Association,
claims (other than total loss claims) not exceeding US$300,000 (or the
equivalent in any other currency) in respect of any one claim shall be
paid direct to the Owner or to its order.
3 PROTECTION AND INDEMNITY RISKS
Payment of any recovery which [FIGARO SHIPPING LTD.] [MAGIC STAR
SHIPPING CO. LTD] [XXXX SHIPPING LTD] [VAGUE SHIPPING LTD.] [ZOOM
SHIPPING LTD], a company incorporated under the laws of Malta whose
registered office is at 00/00 Xxxxxxxx Xxxxxxxxx, Xxxxxx Xxxxxx,
Xxxxxxxx, Xxxxx (the "OWNER") is entitled to make out of the funds of
the Association in respect of any liability, costs or expenses
incurred by the Owner, shall be made to the Owner or to its order,
unless and until the Association receives notice to the contrary from
NATIONAL BANK OF GREECE S.A., of 00 Xxxxxx Xxxxxx, 000 00 Xxxxxx,
Xxxxxx, acting through its branch at 0 Xxxxxxxxxxx Xxxxxx & Xxxx
Xxxxxxx, 000 00 Xxxxxxx, Xxxxxx (the "MORTGAGEE") in which event all
recoveries shall thereafter be paid to the Mortgagee or its order;
provided always that no liability whatsoever shall attach to the
Association, its Managers or their agents for failure to comply with
the latter obligation until the expiry of two (2) clear business days
from the receipt of such notice.
24
4 LOSS OF EARNINGS
By a Deed of covenant dated _______________ 2003 [FIGARO SHIPPING
LTD.] [MAGIC STAR SHIPPING CO. LTD] [XXXX SHIPPING LTD] [VAGUE
SHIPPING LTD.] [ZOOM SHIPPING LTD] of 00/00 Xxxxxxxx Xxxxxxxxx, Xxxxxx
Xxxxxx, Xxxxxxxx, Xxxxx (the "OWNER") has assigned to NATIONAL BANK OF
GREECE S.A., of 00 Xxxxxx Xxxxxx, 000 00 Xxxxxx, Xxxxxx, acting
through its branch at 0 Xxxxxxxxxxx Xxxxxx & Xxxx Xxxxxxx, 000 00
Xxxxxxx, Xxxxxx (the "MORTGAGEE") its rights, title and interest in
and to all policies and contracts of insurance from time to time taken
out or entered into by or for the benefit of the Owner in respect of
m.v. [Alexandros] [Aristotelis] [Aktor] [Agamemnon] [Achilleas] and
accordingly all claims hereunder shall be paid in full to [HERE INSERT
DETAILS OF THE OPERATING ACCOUNT] unless and until the Mortgagee shall
have notified the insurers hereunder to the contrary, whereupon in
either case all such claims shall be paid to the Mortgagee or its
order.
25
SCHEDULE 2
FORM OF NOTICE OF ASSIGNMENT OF INSURANCES
(For attachment by way of endorsement to the Policy)
[FIGARO SHIPPING LTD.] [MAGIC STAR SHIPPING CO. LTD] [XXXX SHIPPING LTD] [VAGUE
SHIPPING LTD.] [ZOOM SHIPPING LTD], a company incorporated under the laws of
Malta, whose registered office is at 00/00 Xxxxxxxx Xxxxxxxxx, Xxxxxx Xxxxxx,
Xxxxxxxx, Xxxxx, the Owner of the m.v. [Alexandros] [Aristotelis] [Aktor]
[Agamemnon] [Achilleas] HEREBY GIVES NOTICE that by a Deed of Covenant dated
_____________ 2003 and entered into by us with NATIONAL BANK OF GREECE S.A., of
00 Xxxxxx Xxxxxx, 000 00 Xxxxxx, Xxxxxx, acting through its branch at 0
Xxxxxxxxxxx Xxxxxx & Xxxx Xxxxxxx, 000 00 Xxxxxxx, Xxxxxx as mortgagee of the
said vessel all insurances in respect thereof, including the insurances
constituted by the Policy whereon this notice is endorsed.
-----------------------------------
Signed
For and on behalf of
[FIGARO SHIPPING LTD.] [MAGIC STAR SHIPPING CO. LTD] [XXXX SHIPPING LTD] [VAGUE
SHIPPING LTD.] [ZOOM SHIPPING LTD]
Dated: _________________ 2003
26
SCHEDULE 3
POWER OF ATTORNEY
By these presents, the undersigned [FIGARO SHIPPING LTD.] [MAGIC STAR SHIPPING
CO. LTD] [XXXX SHIPPING LTD] [VAGUE SHIPPING LTD.] [ZOOM SHIPPING LTD] of 00/00
Xxxxxxxx Xxxxxxxxx, Xxxxxx Xxxxxx, Xxxxxxxx, Xxxxx, does hereby nominate and
appoint NATIONAL BANK OF GREECE S.A., of 00 Xxxxxx Xxxxxx, 000 00 Xxxxxx,
Xxxxxx, acting for the purpose of this Deed through its branch at 0 Xxxxxxxxxxx
Xxxxxx & Xxxx Xxxxxxx, 000 00 Xxxxxxx, Xxxxxx as our Special Attorney and
authorise it to apply for the closure of the Maltese Register of the m.v.
[Alexandros] [Aristotelis] [Aktor] [Agamemnon] [Achilleas] in terms of Section
28 of the Merchant Shipping Act, Cap. 234, in our name and on our behalf and to
pay all such fees, make all such declarations and receive all such certificates,
including the Deletion Certificate, as may be necessary for the proper
fulfilment of the above mandate.
We further authorise our Attorney to request and obtain from the Registrar of
Shipping copies certified by the said Registrar of any documents that may be
filed with the said Registrar.
Our Attorney is authorised to delegate all its power hereunder in writing.
This mandate is granted in the interest of and as part of the security of
NATIONAL BANK OF GREECE S.A. and is irrevocable.
This the _____ day of ___________ 2003
----------------------------------
for and on behalf of
[FIGARO SHIPPING LTD.] [MAGIC STAR SHIPPING CO. LTD] [XXXX SHIPPING LTD] [VAGUE
SHIPPING LTD.] [ZOOM SHIPPING LTD]
In the presence of:
27
SIGNED, SEALED and DELIVERED )
as a DEED )
by )
for and on behalf of ) -----------------------------------
) Attorney-in-Fact
[FIGARO SHIPPING LTD.] )
[MAGIC STAR SHIPPING CO. LTD] )
[XXXX SHIPPING LTD] )
[VAGUE SHIPPING LTD.] )
[ZOOM SHIPPING LTD] )
in the presence of: )
-----------------------------
Witness:
Name:
Address:
Occupation:
SIGNED, SEALED and DELIVERED ) -----------------------------------
as a DEED ) Authorised Signatory
by )
for and on behalf of )
NATIONAL BANK OF GREECE S.A. ) -----------------------------------
in the presence of: ) Authorised Signatory
-----------------------------
Witness:
Name:
Address:
Occupation:
28
SCHEDULE 7
FORM OF MANAGER'S UNDERTAKING
69
Private & Confidential
MANAGER'S UNDERTAKING
To: National Bank of Greece S.A.
Xxxxxxxxxxx 0 & 0 Xxxx Xxxxxxx
000 00 Xxxxxxx
Xxxxxx
(as Security Agent)
From: Capital Ship Management Corp.
Panama
Republic of Panama
2003
Dear Sirs
US$53,250,000 LOAN TO FIGARO SHIPPING LTD, MAGIC STAR SHIPPING CO. LTD, XXXX
SHIPPING CO. LTD, VAGUE SHIPPING LTD, ZOOM SHIPPING LTD AND OCEAN VILLAGE
MARITIME S.A.
1 LOAN AGREEMENT AND MASTER SWAP AGREEMENT
1.1 We understand that under a loan agreement (the "LOAN AGREEMENT") dated
________ 2003 and made between (1) [Figaro Shipping Ltd.] [Magic Star
Shipping Co. Ltd.] [Xxxx Shipping Ltd] [Vague Shipping Ltd] [Zoom
Shipping Ltd,] [Ocean Village Maritime S.A.] (the "OWNER") and [Magic
Star Shipping Co. Ltd, Xxxx Shipping Ltd, Vague Shipping Ltd, Zoom
Shipping Ltd and Ocean Village Maritime S.A.] [Figaro Shipping Ltd,
Xxxx Shipping Ltd, Vague Shipping Ltd, Zoom Shipping Ltd and Ocean
Village Maritime S.A.] [Figaro Shipping Ltd, Magic Star Shipping Ltd,
Vague Shipping Ltd, Zoom Shipping Ltd and Ocean Village Maritime S.A.]
[Figaro Shipping Ltd, Magic Star Shipping Co. Ltd, Xxxx Shipping Ltd,
Zoom Shipping Ltd and Ocean Village Maritime S.A.] [Figaro Shipping
Ltd, Magic Star Shipping Co. Ltd, Xxxx Shipping Co Ltd, Vague Shipping
Ltd and Ocean Village Maritime S.A.] as borrowers (therein and herein
together referred to as the "BORROWERS"), (2) National Bank of Greece
S.A. as Agent (in such capacity the "AGENT"), Security Agent (in such
capacity the "SECURITY AGENT"), Swap Provider (in such capacity the
"SWAP PROVIDER") and Account Bank (in such capacity the "ACCOUNT
BANK") and (3) the banks and financial institutions referred to in
schedule 1 thereto as lenders (the "BANKS" and, together with the
Agent, the Swap Provider and the Account Bank, the "SECURED
CREDITORS"), the Banks agreed (inter alia) to advance by way of loan
to the Owner, upon the terms and conditions therein contained, the
principal sum of up to Fifty three million two hundred and fifty
thousand Dollars ($53,250,000) (the "LOAN") and that it is a condition
precedent to the Banks making the Loan available to the Borrowers that
we, Capital Ship Management Corp. (the "MANAGER"), enter into this
letter of undertaking (the "LETTER") in favour of the Security Agent.
1.2 We also understand that under a master swap agreement dated as
of ___________ 2003 (the "MASTER SWAP AGREEMENT") and made between the
Borrowers and the Swap Provider, the Swap Provider agreed the terms
and conditions upon which it would enter into (inter alia) interest
rate swap transactions with the Borrowers in respect of the Loan
whether in whole or in part as the case may be from time to time.
1.3 Words and expressions defined in the Loan Agreement shall, unless
otherwise specified herein, have the same meanings when used herein.
1
2 CONFIRMATION OF APPOINTMENT
We hereby confirm that we have been appointed as the manager of m.v.
[Alexandros] [Aristotelis] [Aktor] [Agamemnon] [Achilleas] [__] (the
"SHIP") registered under the flag of [Malta] [__] in the ownership of
the Owner pursuant to a management agreement (the "MANAGEMENT
AGREEMENT") dated __________ 2003 and made between ourselves and the
Owner and that we have accepted our appointment thereunder in
accordance with the terms and conditions thereof.
3 REPRESENTATION AND WARRANTY
We hereby represent and warrant that the copy of the Management
Agreement set out in Appendix 1 to this Letter is a true and complete
copy of the Management Agreement, that the Management Agreement
constitutes valid and binding obligations of the Manager enforceable
in accordance with its terms and that there have been no amendments or
variations thereto or defaults thereunder by the Manager or, to the
best of the Manager's knowledge and belief, by the Borrower.
4 UNDERTAKINGS
The Manager undertakes with the Security Agent that throughout the
Security Period (as such term is defined in the [deed of covenant
dated ____________ 2003 (the "DEED OF COVENANT")] [general assignment
dated 2003 (the "GENERAL ASSIGNMENT")] and executed by the Owner in
favour of the Security Agent):
4.1 the Manager will not agree or purport to agree to any amendment or
variation of the Management Agreement without the prior written
consent of the Security Agent;
4.2 the Manager will procure that any sub-manager appointed by pursuant to
the provisions of the Management Agreement or otherwise will, on or
before the date of such appointment enter into an undertaking in
favour of the Security Agent in substantially the same form (mutatis
mutandis) as this Letter;
4.3 the Manager will not, without the prior written consent of the
Security Agent, take any action or institute any proceedings or make
or assert any claim on or in respect of the Ship or its policies and
contracts of insurance (which expression includes all entries of the
Ship in a protection and indemnity or war risks association) which are
from time to time during the Security Period (as such term is defined
in the [Deed of Covenant] [General Assignment]) in place or taken out
or entered into by or for the benefit of the Owner (whether in the
sole name of the Owner or in the joint names of the Owner and the
Security Agent or otherwise) in respect of the Ship and her Earnings
(as such term is defined below) or otherwise howsoever in connection
with the Ship and all benefits thereof (including claims of whatsoever
nature and return of premiums) (the "Insurances") or any moneys
whatsoever from time to time due or payable to the Owner during the
Security Period (as such term is defined in the [Deed of Covenant]
[General Assignment]) arising out of the use or operation of the Ship
including (but without limiting the generality of the foregoing) all
freight, hire and passage moneys, income arising under pooling
arrangements, compensation payable to the Owner in event of
requisition of the Ship for hire, remuneration for salvage and towage
services, demurrage and detention moneys, damages for breach (or
payments for variation or termination) of any charterparty or other
contract for the employment of the Ship (the "EARNINGS") or any other
property or other assets of the Owner which the Security Agent has
previously advised the Manager are subject to any Encumbrance (as such
term is defined in the [Deed of Covenant] [General Assignment]) or
right of set-off in favour of the Security Agent by virtue of any of
the security documents executed in favour of the Security Agent or any
of the Secured Creditors pursuant to the Loan Agreement and/or the
Master Swap Agreement or otherwise;
4.4 the Manager will discontinue any such action or proceedings or claim
which may have been taken, instituted or made or asserted, promptly
upon notice from the Security Agent to do so;
2
4.5 the Manager does hereby subordinate any claim that it may have against
the Owner or otherwise in respect of the Ship and its Earnings,
Insurances and Requisition Compensation (as such term is defined in
the [Deed of Covenant] [General Assignment]) to the claims of the
Security Agent or the Secured Creditors or any of them under the Loan
Agreement, the Master Swap Agreement and the other Security Documents
(as such term is defined in the [Deed of Covenant] [General
Assignment]) and undertakes not to exercise any right to which it may
be entitled in respect of the Owner and/or the Ship and/or its
Earnings and/or Insurances and/or Requisition Compensation in
competition with the Security Agent and/or the Secured Creditors;
4.6 the Manager will promptly notify the Security Agent if at any time the
amount owed by the Owner to the Manager pursuant to the Management
Agreement (whether in respect of the Manager's remuneration or
disbursements or otherwise) exceeds Twenty thousand United States
Dollars (US$20,000) or the equivalent in other currencies; and
4.7 the Manager will provide the Security Agent with such information
concerning the Ship as the Security Agent may from time to time
reasonably require.
5 INSURANCE ASSIGNMENT
5.1 By way of security for the repayment of the aggregate of the Loan and
interest accrued and accruing thereon, the Master Swap Liabilities (as
such term is defined in the [Deed of Covenant] [General Assignment],
the Expenses (as such term is defined in the [Deed of Covenant]
[General Assignment]) and all other sums of money from time to time
owing by the Owner to the Security Agent and/or the Secured Creditors
or any of them, whether actually or contingently, under the Loan
Agreement, the Master Swap Agreement and the other Security Documents
(as such term is defined in the [Deed of Covenant] [General
Assignment]) or any of them to which the Owner is or is to be a party
(the "OUTSTANDING INDEBTEDNESS"), the Manager with full title
guarantee hereby irrevocably and unconditionally assigns and agrees to
assign to the Security Agent all of the Manager's rights, title and
interest in and to all the benefit of the Insurances.
5.2 The Manager hereby undertakes to procure that a duly completed notice
in the form set out in Appendix 2 to this Letter is given to all
insurers of the Ship and to procure that such notice is promptly
endorsed on all policies and entries in respect of the Insurances and
agrees promptly to authorise and/or instruct any broker, insurer or
association with or through whom Insurances may be effected to endorse
on any policy or entry or otherwise to give effect to such loss
payable clause as may be stipulated by the Security Agent.
5.3 The Security Agent shall, at the Manager's cost and request, re-assign
to the Manager all the Manager's right, title and interest in the
Insurances upon the Outstanding Indebtedness being paid and discharged
in full to the satisfaction of the Security Agent.
5.4 Any moneys in respect of the Insurances which would (but for the
assignment contained in clause 5.1 above) be payable to the Manager
shall be applied in accordance with clause [8.1 of the Deed of
Covenant] [[__] of the General Assignment] and/or clause [8.4 of the
Deed of Covenant] [[__] of the General Assignment].
6 ACKNOWLEDGEMENT
The Manager hereby acknowledges that it has seen and has reviewed the
Loan Agreement and the other Security Documents and agrees to abide by
and to observe the provisions thereof insofar as the same are
applicable to it as therein provided.
7 LAW AND JURISDICTION
7.1 The agreement constituted by this Letter is governed by, and shall be
construed in accordance with, English law.
7.2 The Manager agrees, for the benefit of the Security Agent, that any
legal action or proceedings arising out of or in connection with this
Letter against the Manager or any of its assets may be
3
brought in the English courts. The Manager irrevocably and
unconditionally submits to the jurisdiction of such courts and
irrevocably designates, appoints and empowers Curzon Maritime Ltd at
present of Xx. Xxxxx Xxxxx, 00/00 Xxxxxxxx Xxxxxx/Xxxxxx XX0X 0XX,
Xxxxxxx to receive for it and on its behalf, service of process issued
out of the English courts in any such legal action or proceedings. The
submission to such jurisdiction shall not (and shall not be construed
so as to) limit the rights of the Security Agent to take any
proceedings against the Manager in the courts of any other competent
jurisdiction nor shall the taking of proceedings in any one or more
jurisdictions preclude the taking of proceedings in any other
jurisdiction, whether concurrently or not.
7.3 No term of this Letter is enforceable under the provisions of the
Contracts (Rights of Third Parties) Xxx 0000 by a person who is not a
party to this Letter or to whom this Letter is not addressed.
Yours faithfully,
------------------------------
For and on behalf of
CAPITAL SHIP MANAGEMENT CORP.
4
APPENDIX 1
COPY OF THE MANAGEMENT AGREEMENT
5
APPENDIX 2
NOTICE OF ASSIGNMENT
We, CAPITAL SHIP MANAGEMENT CORP., the managers of the motor vessel [Alexandros]
[Aristotelis] [Aktor] [Agamemnon] [Achilleas] [_] HEREBY GIVE NOTICE that by a
first assignment dated _____________________ 2003 and entered into by us with
NATIONAL BANK OF GREECE S.A. there has been assigned by us to the said NATIONAL
BANK OF GREECE S.A. as first assignees all of our right, title and interest in
and to the insurances in respect of the said Ship including the insurances
constituted by the Policy whereon this notice is endorsed.
---------------------------
SIGNED
for and on behalf of
CAPITAL SHIP MANAGEMENT CORP.
Dated 2003
---------------
6
SCHEDULE 8
FORM OF MASTER SWAP AGREEMENT
70
(MULTICURRENCY-CROSS BORDER)
ISDA(R)
International Swaps & Derivatives Association, Inc.
MASTER AGREEMENT
dated as of ___ July 2003
(1) National Bank of Greece S.A. and (2) Figaro Shipping Ltd, Magic Star
Co. Ltd, Xxxx Shipping Ltd, Vague Shipping Ltd, Zoom Shipping Ltd and Ocean
Village Maritime S.A.
have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming those
Transactions.
Accordingly, the parties agree as follows:-
1. INTERPRETATION
(a) DEFINITIONS. The terms defined in Section 14 and in the Schedule will have
the meanings therein specified for the purpose of this Master Agreement.
(b) INCONSISTENCY. In the event of any inconsistency between the provisions of
the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purpose of the relevant Transaction.
(c) SINGLE AGREEMENT. All Transactions are entered into in reliance on the fact
that this Master Agreement and all Confirmations form a single agreement between
the parties (collectively referred to as this "Agreement"), and the parties
would not otherwise enter into any Transactions.
2. OBLIGATIONS
(a) GENERAL CONDITIONS.
(i) Each party will make each payment or delivery specified in each
Confirmation to be made by it, subject to the other provisions of this
Agreement.
(ii) Payments under this Agreement will be made on the due date for value
on that date in the place of the account specified in the relevant
Confirmation or otherwise pursuant to this Agreement, in freely
transferable funds and in the manner customary for payments in the required
currency. Where settlement is by delivery (that is, other than by payment),
such delivery will be made for receipt on the due date in the manner
customary for the relevant obligation unless otherwise specified in the
relevant Confirmation or elsewhere in this Agreement.
(iii) Each obligation of each party under Section 2(a)(i) is subject to (1)
the condition precedent that no Event of Default or Potential Event of
Default with respect to the other party has occurred and is continuing, (2)
the condition precedent that no Early Termination Date in respect of the
relevant Transaction has occurred or been effectively designated and (3)
each other applicable condition precedent specified in this Agreement.
(b) CHANGE OF ACCOUNT. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.
(c) NETTING. If on any date amounts would otherwise be payable:-
(i) in the same currency; and
(ii) in respect of the same Transaction,
by each party to the other, then, on such date, each party's obligation to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party, replaced by an obligation upon the party by whom the larger aggregate
amount would have been payable to pay to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.
The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be made
in the Schedule or a Confirmation by specifying that subparagraph (ii) above
will not apply to the Transactions identified as being subject to the election,
together with the starting date (in which case subparagraph (ii) above will not,
or will cease to, apply to such Transactions from such date). This election may
be made separately for different groups of Transactions and will apply
separately to each pairing of Offices through which the parties make and receive
payments or deliveries.
(d) DEDUCTION OR WITHHOLDING FOR TAX.
(i) GROSS-UP. All payments under this Agreement will be made without any
deduction or withholding for or on account of any Tax unless such deduction
or withholding is required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, then in effect. If
a party is so required to deduct or withhold, then that party ("X") will:-
(1) promptly notify the other party ("Y") of such requirement;
(2) pay to the relevant authorities the full amount required to be
deducted or withheld (including the full amount required to be
deducted or withheld from any additional amount paid by X to Y under
this Section 2(d)) promptly upon the earlier of determining that such
deduction or withholding is required or receiving notice that such
amount has been assessed against Y;
(3) promptly forward to Y an official receipt (or a certified copy),
or other documentation reasonably acceptable to Y, evidencing such
payment to such authorities; and
(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to the
payment to which Y is otherwise entitled under this Agreement, such
additional amount as is necessary to ensure that the net amount
actually received by Y (free and clear of Indemnifiable Taxes, whether
assessed against X or Y) will equal the full amount Y would have
received had no such deduction or withholding been required. However,
X will not be required to pay any additional amount to Y to the extent
that it would not be required to be paid but for:-
(A) the failure by Y to comply with or perform any agreement
contained in Section 4(a)(i),4(a)(iii) or 4(d); or
(B) the failure of a representation made by Y pursuant to Section
3(f) to be accurate and true unless such failure would not have
occurred but for (I) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or after the
date on which a Transaction is entered into (regardless of
whether such action is taken or brought with respect to a party
to this Agreement) or (II) a Change in Tax Law.
2 ISDA(R) 1992
(ii) LIABILITY. IF:-
(1) X is required by any applicable law, as modified by the practice
of any relevant governmental revenue authority, to make any deduction
or withholding in respect of which X would not be required to pay an
additional amount to Y under Section 2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed directly against
X,
then, except to the extent Y has satisfied or then satisfies the liability
resulting from such Tax, Y will promptly pay to X the amount of such
liability (including any related liability for interest, but including any
related liability for penalties only if Y has failed to comply with or
perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)).
(e) DEFAULT INTEREST; OTHER AMOUNTS. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after judgment) on the overdue amount to the other party on
demand in the same currency as such overdue amount, for the period from (and
including) the original due date for payment to (but excluding) the date of
actual payment, at the Default Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. If, prior to
the occurrence or effective designation of an Early Termination Date in respect
of the relevant Transaction, a party defaults in the performance of any
obligation required to be settled by delivery, it will compensate the other
party on demand if and to the extent provided for in the relevant Confirmation
or elsewhere in this Agreement.
3. REPRESENTATIONS
Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered into
and, in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that:-
(a) BASIC REPRESENTATIONS.
(i) STATUS. It is duly organised and validly existing under the laws of the
jurisdiction of its organisation or incorporation and, if relevant under
such laws, in good standing;
(ii) POWERS. It has the power to execute this Agreement and any other
documentation relating to this Agreement to which it is a party, to deliver
this Agreement and any other documentation relating to this Agreement that
it is required by this Agreement to deliver and to perform its obligations
under this Agreement and any obligations it has under any Credit Support
Document to which it is a party and has taken all necessary action to
authorise such execution, delivery and performance;
(iii) NO VIOLATION OR CONFLICT. Such execution, delivery and performance do
not violate or conflict with any law applicable to it, any provision of its
constitutional documents, any order or judgment of any court or other
agency of government applicable to it or any of its assets or any
contractual restriction binding on or affecting it or any of its assets;
(iv) CONSENTS. All governmental and other consents that are required to
have been obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party have been obtained and are in full
force and effect and all conditions of any such consents have been complied
with; and
(v) OBLIGATIONS BINDING. Its obligations under this Agreement and any
Credit Support Document to which it is a party constitute its legal, valid
and binding obligations, enforceable in accordance with their respective
terms (subject to applicable bankruptcy, reorganisation, insolvency,
moratorium or similar laws affecting creditors' rights generally and
subject, as to enforceability, to equitable principles of general
application (regardless of whether enforcement is sought in a proceeding in
equity or at law)).
3 ISDA(R) 1992
(b) ABSENCE OF CERTAIN EVENTS. No Event of Default or Potential Event of Default
or, to its knowledge, Termination Event with respect to it has occurred and is
continuing and no such event or circumstance would occur as a result of its
entering into or performing its obligations under this Agreement or any Credit
Support Document to which it is a party.
(c) ABSENCE OF LITIGATION. There is not pending or, to its knowledge, threatened
against it or any of its Affiliates any action, suit or proceeding at law or in
equity or before any court, tribunal, governmental body, agency or official or
any arbitrator that is likely to affect the legality, validity or enforceability
against it of this Agreement or any Credit Support Document to which it is a
party or its ability to perform its obligations under this Agreement or such
Credit Support Document.
(d) ACCURACY OF SPECIFIED INFORMATION. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.
(e) PAYER TAX REPRESENTATION. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(e) is accurate and true.
(f) PAYEE TAX REPRESENTATIONS. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(f) is accurate and true.
4. AGREEMENTS
Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party:-
(a) FURNISH SPECIFIED INFORMATION. It will deliver to the other party or, in
certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs:-
(i) any forms, documents or certificates relating to taxation specified in
the Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any Confirmation; and
(iii) upon reasonable demand by such other party, any form or document that
may be required or reasonably requested in writing in order to allow such
other party or its Credit Support Provider to make a payment under this
Agreement or any applicable Credit Support Document without any deduction
or withholding for or on account of any Tax or with such deduction or
withholding at a reduced rate (so long as the completion, execution or
submission of such form or document would not materially prejudice the
legal or commercial position of the party in receipt of such demand), with
any such form or document to be accurate and completed in a manner
reasonably satisfactory to such other parry and to be executed and to be
delivered with any reasonably required certification,
in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.
(b) MAINTAIN AUTHORISATIONS. It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority that
are required to be obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party and will use all reasonable efforts to
obtain any that may become necessary in the future.
(c) COMPLY WITH LAWS. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.
(d) TAX AGREEMENT. It will give notice of any failure of a representation made
by it under Section 3(f) to be accurate and true promptly upon learning of such
failure.
(e) PAYMENT OF STAMP TAX. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated,
4 ISDA(R) 1992
organised, managed and controlled, or considered to have its seat, or in which a
branch or office through which it is acting for the purpose of this Agreement is
located ("Stamp Tax Jurisdiction") and will indemnify the other party against
any Stamp Tax levied or imposed upon the other party or in respect of the other
party's execution or performance of this Agreement by any such Stamp Tax
Jurisdiction which is not also a Stamp Tax Jurisdiction with respect to the
other party.
5. EVENTS OF DEFAULT AND TERMINATION EVENTS
(a) EVENTS OF DEFAULT. The occurrence at any time with respect to a party or, if
applicable, any Credit Support Provider of such party or any Specified Entity of
such party of any of the following events constitutes an event of default (an
"Event of Default") with respect to such party:-
(i) FAILURE TO PAY OR DELIVER. Failure by the party to make, when due, any
payment under this Agreement or delivery under Section 2(a)(i) or 2(e)
required to be made by it if such failure is not remedied on or before the
third Local Business Day after notice of such failure is given to the
party;
(ii) BREACH OF AGREEMENT. Failure by the party to comply with or perform
any agreement or obligation (other than an obligation to make any payment
under this Agreement or delivery under Section 2(a)(i) or 2(e) or to give
notice of a Termination Event or any agreement or obligation under Section
4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed by the party
in accordance with this Agreement if such failure is not remedied on or
before the thirtieth day after notice of such failure is given to the
party;
(iii) CREDIT SUPPORT DEFAULT.
(1) Failure by the party or any Credit Support Provider of such party
to comply with or perform any agreement or obligation to be complied
with or performed by it in accordance with any Credit Support Document
if such failure is continuing after any applicable grace period has
elapsed;
(2) the expiration or termination of such Credit Support Document or
the failing or ceasing of such Credit Support Document to be in full
force and effect for the purpose of this Agreement (in either case
other than in accordance with its terms) prior to the satisfaction of
all obligations of such party under each Transaction to which such
Credit Support Document relates without the written consent of the
other party; or
(3) the party or such Credit Support Provider disaffirms, disclaims,
repudiates or rejects, in whole or in part, or challenges the validity
of, such Credit Support Document;
(iv) MISREPRESENTATION. A representation (other than a representation under
Section 3(e) or (f)) made or repeated or deemed to have been made or
repeated by the party or any Credit Support Provider of such party in this
Agreement or any Credit Support Document proves to have been incorrect or
misleading in any material respect when made or repeated or deemed to have
been made or repeated;
(v) DEFAULT UNDER SPECIFIED TRANSACTION. The party, any Credit Support
Provider of such party or any applicable Specified Entity of such party (1)
defaults under a Specified Transaction and, after giving effect to any
applicable notice requirement or grace period, there occurs a liquidation
of, an acceleration of obligations under, or an early termination of, that
Specified Transaction, (2) defaults, after giving effect to any applicable
notice requirement or grace period, in making any payment or delivery due
on the last payment, delivery or exchange date of, or any payment on early
termination of, a Specified Transaction (or such default continues for at
least three Local Business Days if there is no applicable notice
requirement or grace period) or (3) disaffirms, disclaims, repudiates or
rejects, in whole or in part, a Specified Transaction (or such action is
taken by any person or entity appointed or empowered to operate it or act
on its behalf);
(vi) CROSS DEFAULT. If "Cross Default" is specified in the Schedule as
applying to the party, the occurrence or existence of (1) a default, event
of default or other similar condition or event (however
5 ISDA(R) 1992
described) in respect of such party, any Credit Support Provider of such
party or any applicable Specified Entity of such party under one or more
agreements or instruments relating to Specified Indebtedness of any of them
(individually or collectively) in an aggregate amount of not less than the
applicable Threshold Amount (as specified in the Schedule) which has
resulted in such Specified Indebtedness becoming, or becoming capable at
such time of being declared, due and payable under such agreements or
instruments, before it would otherwise have been due and payable or (2) a
default by such party, such Credit Support Provider or such Specified
Entity (individually or collectively) in making one or more payments on the
due date thereof in an aggregate amount of not less than the applicable
Threshold Amount under such agreements or instruments (after giving effect
to any applicable notice requirement or grace period);
(vii) BANKRUPTCY. The party, any Credit Support Provider of such party or
any applicable Specified Entity of such party:-
(1) is dissolved (other than pursuant to a consolidation, amalgamation
or merger); (2) becomes insolvent or is unable to pay its debts or
fails or admits in writing its inability generally to pay its debts as
they become due; (3) makes a general assignment, arrangement or
composition with or for the benefit of its creditors; (4) institutes
or has instituted against it a proceeding seeking a judgment of
insolvency or bankruptcy or any other relief under any bankruptcy or
insolvency law or other similar law affecting creditors' rights, or a
petition is presented for its winding-up or liquidation, and, in the
case of any such proceeding or petition instituted or presented
against it, such proceeding or petition (A) results in a judgment of
insolvency or bankruptcy or the entry of an order for relief or the
making of an order for its winding-up or liquidation or (B) is not
dismissed, discharged, stayed or restrained in each case within 30
days of the institution or presentation thereof; (5) has a resolution
passed for its winding-up, official management or liquidation (other
than pursuant to a consolidation, amalgamation or merger); (6) seeks
or becomes subject to the appointment of an administrator, provisional
liquidator, conservator, receiver, trustee, custodian or other similar
official for it or for all or substantially all its assets; (7) has a
secured party take possession of all or substantially all its assets
or has a distress, execution, attachment, sequestration or other legal
process levied, enforced or sued on or against all or substantially
all its assets and such secured party maintains possession, or any
such process is not dismissed, discharged, stayed or restrained, in
each case within 30 days thereafter, (8) causes or is subject to any
event with respect to it which, under the applicable laws of any
jurisdiction, has an analogous effect to any of the events specified
in clauses (1) to (7) (inclusive); or (9) takes any action in
furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the foregoing acts; or
(viii) MERGER WITHOUT ASSUMPTION. The party or any Credit Support Provider
of such party consolidates or amalgamates with, or merges with or into, or
transfers all or substantially all its assets to, another entity and, at
the time of such consolidation, amalgamation, merger or transfer:-
(1) the resulting, surviving or transferee entity fails to assume all
the obligations of such party or such Credit Support Provider under
this Agreement or any Credit Support Document to which it or its
predecessor was a party by operation of law or pursuant to an
agreement reasonably satisfactory to the other party to this
Agreement; or
(2) the benefits of any Credit Support Document fail to extend
(without the consent of the other party) to the performance by such
resulting, surviving or transferee entity of its obligations under
this Agreement.
(b) TERMINATION EVENTS. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any event specified below constitutes an Illegality if the
event is specified in (i) below, a Tax Event if the event is specified in (ii)
below or a Tax Event Upon Merger if the event is specified in (iii) below, and,
if specified to be applicable, a Credit Event
6 ISDA(R) 1992
Upon Merger if the event is specified pursuant to (iv) below or an Additional
Termination Event if the event is specified pursuant to (v) below:-
(i) ILLEGALITY. Due to the adoption of, or any change in, any applicable
law after the date on which a Transaction is entered into, or due to the
promulgation of, or any change in, the interpretation by any court,
tribunal or regulatory authority with competent jurisdiction of any
applicable law after such date, it becomes unlawful (other than as a result
of a breach by the party of Section 4(b)) for such party (which will be the
Affected Party):-
(1) to perform any absolute or contingent obligation to make a payment
or delivery or to receive a payment or delivery in respect of such
Transaction or to comply with any other material provision of this
Agreement relating to such Transaction; or
(2) to perform, or for any Credit Support Provider of such party to
perform, any contingent or other obligation which the party (or such
Credit Support Provider) has under any Credit Support Document
relating to such Transaction;
(ii) TAX EVENT. Due to (x) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or after the date on which
a Transaction is entered into (regardless of whether such action is taken
or brought with respect to a party to this Agreement) or (y) a Change in
Tax Law, the party (which will be the Affected Party) will, or there is a
substantial likelihood that it will, on the next succeeding Scheduled
Payment Date (1) be required to pay to the other party an additional amount
in respect of an Indemnifiable Tax under Section 2(d)(i)(4) (except in
respect of interest under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive a
payment from which an amount is required to be deducted or withheld for or
on account of a Tax (except in respect of interest under Section 2(e),
6(d)(ii) or 6(e)) and no additional amount is required to be paid in
respect of such Tax under Section 2(d)(i)(4) (other than by reason of
Section 2(d)(i)(4)(A) or (B));
(III) TAX EVENT UPON MERGER. The party (the "Burdened Party") on the next
succeeding Scheduled Payment Date will either (1) be required to pay an
additional amount in respect of an Indemnifiable Tax under Section
2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
6(e)) or (2) receive a payment from which an amount has been deducted or
withheld for or on account of any Indemnifiable Tax in respect of which the
other party is not required to pay an additional amount (other than by
reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of a
party consolidating or amalgamating with, or merging with or into, or
transferring all or substantially all its assets to, another entity (which
will be the Affected Party) where such action does not constitute an event
described in Section 5(a)(viii);
(iv) CREDIT EVENT UPON MERGER. If "Credit Event Upon Merger" is specified
in the Schedule as applying to the party, such party ("X"), any Credit
Support Provider of X or any applicable Specified Entity of X consolidates
or amalgamates with, or merges with or into, or transfers all or
substantially all its assets to, another entity and such action does not
constitute an event described in Section 5(a)(viii) but the
creditworthiness of the resulting, surviving or transferee entity is
materially weaker than that of X, such Credit Support Provider or such
Specified Entity, as the case may be, immediately prior to such action
(and, in such event, X or its successor or transferee, as appropriate, will
be the Affected Party); or
(v) ADDITIONAL TERMINATION EVENT. If any "Additional Termination Event" is
specified in the Schedule or any Confirmation as applying, the occurrence
of such event (and, in such event, the Affected Party or Affected Parties
shall be as specified for such Additional Termination Event in the Schedule
or such Confirmation).
(c) EVENT OF DEFAULT AND ILLEGALITY. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not constitute an Event
of Default.
7 ISDA(R) 1992
6. EARLY TERMINATION
(a) RIGHT TO TERMINATE FOLLOWING EVENT OF DEFAULT. If at any times an Event of
Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all outstanding Transactions. If, however,
"Automatic Early Termination" is specified in the Schedule as applying to a
party, then an Early Termination Date in respect of all outstanding Transactions
will occur immediately upon the occurrence with respect to such party of an
Event of Default specified in Section 5(a)(vii)(l), (3), (5), (6) or, to the
extent analogous thereto, (8), and as of the time immediately preceding the
institution of the relevant proceeding or the presentation of the relevant
petition upon the occurrence with respect to such party of an Event of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).
(b) RIGHT TO TERMINATE FOLLOWING TERMINATION EVENT.
(i) NOTICE. If a Termination Event occurs, an Affected Party will, promptly
upon becoming aware of it, notify the other party, specifying the nature of
that Termination Event and each Affected Transaction and will also give
such other information about that Termination Event as the other party may
reasonably require.
(ii) TRANSFER TO AVOID TERMINATION EVENT. If either an Illegality under
Section 5(b)(i)(l) or a Tax Event occurs and there is only one Affected
Party, or if a Tax Event Upon Merger occurs and the Burdened Party is the
Affected Party, the Affected Party will, as a condition to its right to
designate an Early Termination Date under Section 6(b)(iv), use all
reasonable efforts (which will not require such party to incur a loss,
excluding immaterial, incidental expenses) to transfer within 20 days after
it gives notice under Section 6(b)(i) all its rights and obligations under
this Agreement in respect of the Affected Transactions to another of its
Offices or Affiliate so that such Termination Event ceases to exist.
If the Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day period,
whereupon the other party may effect such a transfer within 30 days after
the notice is given under Section 6(b)(i).
Any such transfer by a party under this Section 6(b)(ii) will be subject to
and conditional upon the prior written consent of the other party, which
consent will not be withheld if such other party's policies in effect at
such time would permit it to enter into transactions with the transferee on
the terms proposed.
(iii) TWO AFFECTED PARTIES. If an Illegality under Section 5(b)(i)(1) or a
Tax Event occurs and there are two Affected Parties, each party will use
all reasonable efforts to reach agreement within 30 days after notice
thereof is given under Section 6(b)(i) on action to avoid that Termination
Event.
(iv) RIGHT TO TERMINATE. If:-
(1) a transfer under Section 6(b)(ii) or an agreement under Section
6(b)(iii), as the case may be, has not been effected with respect to
all Affected Transactions within 30 days after an Affected Party gives
notice under Section 6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon Merger
or an Additional Termination Event occurs, or a Tax Event Upon Merger
occurs and the Burdened Party is not the Affected Party,
either party in the case of an Illegality, the Burdened Party in the case
of a Tax Event Upon Merger, any Affected Party in the case of a Tax Event
or an Additional Termination Event if there is more than one Affected
Party, or the party which is not the Affected Party in the case of a Credit
Event Upon Merger or an Additional Termination Event if there is only one
Affected Party may, by not more than 20 days notice to the other party and
provided that the relevant Termination Event is then
8 ISDA(R) 1992
continuing, designate a day not earlier than the day such notice is
effective as an Early Termination Date in respect of all Affected
Transactions.
(c) EFFECT OF DESIGNATION.
(i) If notice designating an Early Termination Date is given under Section
6(a) or (b), the Early Termination Date will occur on the date so
designated, whether or not the relevant Event of Default or Termination
Event is then continuing.
(ii) Upon the occurrence or effective designation of an Early Termination
Date, no further payments or deliveries under Section 2(a)(i) or 2(e) in
respect of the Terminated Transactions will be required to be made, but
without prejudice to the other provisions of this Agreement. The amount, if
any, payable in respect of an Early Termination Date shall be determined
pursuant to Section 6(e).
(d) CALCULATIONS.
(i) STATEMENT. On or as soon as reasonably practicable following the
occurrence of an Early Termination Date, each party will make the
calculations on its part, if any, contemplated by Section 6(e) and will
provide to the other party a statement (1) showing, in reasonable detail,
such calculations (including all relevant quotations and specifying any
amount payable under Section 6(e)) and (2) giving details of the relevant
account to which any amount payable to it is to be paid. In the absence of
written confirmation from the source of a quotation obtained in determining
a Market Quotation, the records of the party obtaining such quotation will
be conclusive evidence of the existence and accuracy of such quotation.
(ii) PAYMENT DATE. An amount calculated as being due in respect of any
Early Termination Date under Section 6(e) will be payable on the day that
notice of the amount payable is effective (in the case of an Early
Termination Date which is designated or occurs as a result of an Event of
Default and on the day which is two Local Business Days after the day on
which notice of the amount payable is effective (in the case of an Early
Termination Date which is designated as a result of a Termination Event).
Such amount will be paid together with (to the extent permitted under
applicable law) interest thereon (before as well as after judgment) in the
Termination Currency, from (and including) the relevant Early Termination
Date to (but excluding) the date such amount is paid, at the Applicable
Rate. Such interest will be calculated on the basis of daily compounding
and the actual number of days elapsed.
(e) PAYMENTS ON EARLY TERMINATION. If an Early Termination Date occurs, the
following provisions shall apply based on the parties' election in the Schedule
of a payment measure, either "Market Quotation" or "Loss", and a payment method,
either the "First Method" or the "Second Method". If the parties fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that "Market Quotation" or the "Second Method", as the case may be, shall apply.
The amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.
(i) EVENTS OF DEFAULT. If the Early Termination Date results from an Event
of Default:-
(1) FIRST METHOD AND MARKET QUOTATION. If the First Method and Market
Quotation apply, the Defaulting Party will pay to the Non-defaulting
Party the excess, if a positive number, of (A) the sum of the
Settlement Amount (determined by the Non-defaulting Party) in respect
of the Terminated Transactions and the Termination Currency Equivalent
of the Unpaid Amounts owing to the Non-defaulting Party over (B) the
Termination Currency Equivalent of the Unpaid Amounts owing to the
Defaulting Party.
(2) FIRST METHOD AND LOSS. If the First Method and Loss apply, the
Defaulting Party will pay to the Non-defaulting Party, if a positive
number, the Non-defaulting Party's Loss in respect of this Agreement.
(3) SECOND METHOD AND MARKET QUOTATION. If the Second Method and
Market Quotation apply, an amount will be payable equal to (A) the sum
of the Settlement Amount (determined by the
9 ISDA(R) 1992
Non-defaulting Party) in respect of the Terminated Transactions and
the Termination Currency Equivalent of the Unpaid Amounts owing to the
Non-defaulting Party less (B) the Termination Currency Equivalent of
the Unpaid Amounts owing to the Defaulting Party. If that amount is a
positive number, the Defaulting Party will pay it to the
Non-defaulting Party; if it is a negative number, the Non-defaulting
Party will pay the absolute value of that amount to the Defaulting
Party.
(4) SECOND METHOD AND LOSS. If the Second Method and Loss apply, an
amount will be payable equal to the Non-defaulting Party's Loss in
respect of this Agreement. If that amount is a positive number, the
Defaulting Party will pay it to the Non-defaulting Party; if it is a
negative number, the Non-defaulting Party will pay the absolute value
of that amount to the Defaulting Party.
(ii) TERMINATION EVENTS. If the Early Termination Date results from a
Termination Event:-
(1) ONE AFFECTED PARTY. If there is one Affected Party, the amount
payable will be determined in accordance with Section 6(e)(i)(3), if
Market Quotation applies, or Section 6(e)(i)(4), if Loss applies,
except that, in either case, references to the Defaulting Party and to
the Non-defaulting Party will be deemed to be references to the
Affected Party and the party which is not the Affected party,
respectively, and, if Loss applies and fewer than all the Transactions
are being terminated, Loss shall be calculated in respect of all
Terminated Transactions.
(2) TWO AFFECTED PARTIES. If there are two Affected Parties:-
(A) if Market Quotation applies, each party will determine a
Settlement Amount in respect of the Terminated Transactions, and
an amount will be payable equal to (I) the sum of (a) one-half of
the difference between the Settlement Amount of the party with
the higher Settlement Amount ("X") and the Settlement Amount of
the party with the lower Settlement Amount ("Y") and (b) the
Termination Currency Equivalent of the Unpaid Amounts owing to X
less (II) the Termination Currency Equivalent of the Unpaid
Amounts owing to Y; and
(B) if Loss applies, each party will determine its Loss in
respect of this Agreement (or, if fewer than all the Transactions
are being terminated, in respect of all Terminated Transactions)
and an amount will be payable equal to one-half of the difference
between the Loss of the party with the higher Loss ("X") and the
Loss of the party with the lower Loss ("Y").
If the amount payable is a positive number, Y will pay it to X; if it
is a negative number, X will pay the absolute value of that amount to
Y.
(iii) ADJUSTMENT FOR BANKRUPTCY. In circumstances where an Early
Termination Date occurs because "Automatic Early Termination" applies in
respect of a party, the amount determined under this Section 6(e) will be
subject to such adjustments as are appropriate and permitted by law to
reflect any payments or deliveries made by one party to the other under
this Agreement (and retained by such other party) during the period from
the relevant Early Termination Date to the date for payment determined
under Section 6(d)(ii).
(iv) PRE-ESTIMATE. The parties agree that if Market Quotation applies an
amount recoverable under this Section 6(e) is a reasonable pre-estimate of
loss and not a penalty. Such amount is payable for the loss of bargain and
the loss of protection against future risks and except as otherwise
provided in this Agreement neither party will be entitled to recover any
additional damages as a consequence of such losses.
10 ISDA(R) 1992
7. TRANSFER
Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of the
other party, except that:-
(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to any
other right or remedy under this Agreement); and
(b) a party may make such a transfer of all or any part of its interest in any
amount payable to it from a Defaulting Party under Section 6(e).
Any purported transfer that is not in compliance with this Section will be void.
8. CONTRACTUAL CURRENCY
(a) PAYMENT IN THE CONTRACTUAL CURRENCY. Each payment under this Agreement will
be made in the relevant currency specified in this Agreement for that payment
(the "Contractual Currency"). To the extent permitted by applicable law, any
obligation to make payments under this Agreement in the Contractual Currency
will not be discharged or satisfied by any tender in any currency other than the
Contractual Currency, except to the extent such tender results in the actual
receipt by the party to which payment is owed, acting in a reasonable manner and
in good faith in converting the currency so tendered into the Contractual
Currency, of the full amount in the Contractual Currency of all amounts payable
in respect of this Agreement. If for any reason the amount in the Contractual
Currency so received falls short of the amount in the Contractual Currency
payable in respect of this Agreement, the party required to make the payment
will, to the extent permitted by applicable law, immediately pay such additional
amount in the Contractual Currency as may be necessary to compensate for the
shortfall. If for any reason the amount in the Contractual Currency so received
exceeds the amount in the Contractual Currency payable in respect of this
Agreement, the party receiving the payment will refund promptly the amount of
such excess.
(b) JUDGMENTS. To the extent permitted by applicable law, if any judgment or
order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any excess of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such party.
The term "rate of exchange" includes, without limitation, any premiums and costs
of exchange payable in connection with the purchase of or conversion into the
Contractual Currency.
(c) SEPARATE INDEMNITIES. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the party
to which any payment is owed and will not be affected by judgment being obtained
or claim or proof being made for any other sums payable in respect of this
Agreement.
(d) EVIDENCE OF LOSS. For the purpose of this Section 8, it will be sufficient
for a party to demonstrate that it would have suffered a loss had an actual
exchange or purchase been made.
11 ISDA(R) 1992
9. MISCELLANEOUS
(a) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.
(b) AMENDMENTS. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or electronic messages on an electronic messaging system.
(c) SURVIVAL OF OBLIGATIONS. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.
(d) REMEDIES CUMULATIVE. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.
(e) COUNTERPARTS AND CONFIRMATIONS.
(i) This Agreement (and each amendment, modification and waiver in respect
of it) may be executed and delivered in counterparts (including by
facsimile transmission), each of which will be deemed an original.
(ii) The parties intend that they are legally bound by the terms of each
Transaction from the moment they agree to those terms (whether orally or
otherwise). A Confirmation shall be entered into as soon as practicable and
may be executed and delivered in counterparts (including by facsimile
transmission) or be created by an exchange of telexes or by an exchange of
electronic messages on an electronic messaging system, which in each case
will be sufficient for all purposes to evidence a binding supplement to
this Agreement. The parties will specify therein or through another
effective means that any such counterpart, telex or electronic message
constitutes a Confirmation.
(f) NO WAIVER OF RIGHTS. A failure or delay in exercising any right, power or
privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.
(g) HEADINGS. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.
10. OFFICES; MULTIBRANCH PARTIES
(a) If Section 10(a) is specified in the Schedule as applying, each party that
enters into a Transaction through an Office other than its head or home office
represents to the other party that, notwithstanding the place of booking office
or jurisdiction of incorporation or organisation of such party, the obligations
of such party are the same as if it had entered into the Transaction through its
head or home office. This representation will be deemed to be repeated by such
party on each date on which a Transaction is entered into.
(b) Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.
(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a Transaction
will be specified in the relevant Confirmation.
11. EXPENSES
A Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document
12 ISDA(R) 1992
to which the Defaulting Party is a party or by reason of the early termination
of any Transaction, including, but not limited to, costs of collection.
12. NOTICES
(a) EFFECTIVENESS. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:-
(i) if in writing and delivered in person or by courier, on the date it is
delivered;
(ii) if sent by telex, on the date the recipient's answerback is received;
(iii) if sent by facsimile transmission, on the date that transmission is
received by a responsible employee of the recipient in legible form (it
being agreed that the burden of proving receipt will be on the sender and
will not be met by a transmission report generated by the sender's
facsimile machine);
(iv) if sent by certified or registered mail (airmail, if overseas) or the
equivalent (return receipt requested), on the date that mail is delivered
or its delivery is attempted; or
(v) if sent by electronic messaging system, on the date that electronic
message is received, unless the date of that delivery (or attempted
delivery) or that receipt, as applicable, is not a Local Business Day or
that communication is delivered (or attempted) or received, as applicable,
after the close of business on a Local Business Day, in which case that
communication shall be deemed given and effective on the first following
day that is a Local Business Day.
(b) CHANGE OF ADDRESSES. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.
13. GOVERNING LAW AND JURISDICTION
(a) GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.
(b) JURISDICTION. With respect to any suit, action or proceedings relating to
this Agreement ("Proceedings"), each party irrevocably:-
(i) submits to the jurisdiction of the English courts, if this Agreement is
expressed to be governed by English law, or to the non-exclusive
jurisdiction of the courts of the State of New York and the United States
District Court located in the Borough of Manhattan in New York City, if
this Agreement is expressed to be governed by the laws of the State of New
York; and
(ii) waives any objection which it may have at any time to the laying of
venue of any Proceedings brought in any such court, waives any claim that
such Proceedings have been brought in an inconvenient forum and further
waives the right to object, with respect to such Proceedings, that such
court does not have any jurisdiction over such party.
Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments Xxx 0000 or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) SERVICE OF PROCESS. Each party irrevocably appoints the Process Agent (if
any) specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any
13 ISDA(R) 1992
reason any party's Process Agent is unable to act as such, such party will
promptly notify the other party and within 30 days appoint a substitute process
agent acceptable to the other party. The parties irrevocably consent to service
of process given in the manner provided for notices in Section 12. Nothing in
this Agreement will affect the right of either party to serve process in any
other manner permitted by law.
(d) WAIVER OF IMMUNITIES. Each party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and assets
(irrespective of their use or intended use), all immunity on the grounds of
sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order for specific performance or for
recovery of property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.
14. DEFINITIONS
As used in this Agreement:-
"ADDITIONAL TERMINATION EVENT" has the meaning specified in Section 5(b).
"AFFECTED PARTY" has the meaning specified in Section 5(b).
"AFFECTED TRANSACTIONS" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.
"AFFILIATE" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.
"APPLICABLE RATE" means:-
(a) in respect of obligations payable or deliverable (or which would have been
but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;
(b) in respect of an obligation to pay an amount under Section 6(e) of either
party from and after the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable, the Default Rate;
(c) in respect of all other obligations payable or deliverable (or which would
have been but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default
Rate; and
(d) in all other cases, the Termination Rate.
"BURDENED PARTY" has the meaning specified in Section 5(b).
"CHANGE IN TAX LAW" means the enactment, promulgation, execution or ratification
of, or any change in or amendment to, any law (or in the application or official
interpretation of any law) that occurs on or after the date on which the
relevant Transaction is entered into.
"CONSENT" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.
"CREDIT EVENT UPON MERGER" has the meaning specified in Section 5(b).
"CREDIT SUPPORT DOCUMENT" means any agreement or instrument that is specified as
such in this Agreement.
"CREDIT SUPPORT PROVIDER" has the meaning specified in the Schedule.
"DEFAULT RATE" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.
14 ISDA(R) 1992
"DEFAULTING PARTY" has the meaning specified in Section 6(a).
"EARLY TERMINATION DATE" means the date determined in accordance with Section
6(a) or 6(b)(iv).
"EVENT OF DEFAULT" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.
"ILLEGALITY" has the meaning specified in Section 5(b).
"INDEMNIFIABLE TAX" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but for a present or former connection
between the jurisdiction of the government or taxation authority imposing such
Tax and the recipient of such payment or a person related to such recipient
(including, without limitation, a connection arising from such recipient or
related person being or having been a citizen or resident of such jurisdiction,
or being or having been organised, present or engaged in a trade or business in
such jurisdiction, or having or having had a permanent establishment or fixed
place of business in such jurisdiction, but excluding a connection arising
solely from such recipient or related person having executed, delivered,
performed its obligations or received a payment under, or enforced, this
Agreement or a Credit Support Document).
"LAW" includes any treaty, law, rule or regulation (as modified, in the case of
tax matters, by the practice of any relevant governmental revenue authority) and
"lawful" and "unlawful" will be construed accordingly.
"LOCAL BUSINESS DAY" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, if not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located and, if
different, in the principal financial centre, if any, of the currency of such
payment, (c) in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for performance
with respect to such Specified Transaction.
"LOSS" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be its
total losses and costs (or gain, in which case expressed as a negative number)
in connection with this Agreement or that Terminated Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost
of funding or, at the election of such party but without duplication, loss or
cost incurred as a result of its terminating, liquidating, obtaining or
re-establishing any hedge or related trading position (or any gain resulting
from any of them). Loss includes losses and costs (or gains) in respect of any
payment or delivery required to have been made (assuming satisfaction of each
applicable condition precedent) on or before the relevant Early Termination Date
and not made, except, so as to avoid duplication, if Section 6{e)(i)(1) or (3)
or 6(e)(ii)(2)(A) applies. Loss does not include a party's legal fees and
out-of-pocket expenses referred to under Section 11. A party will determine its
Loss as of the relevant Early Termination Date, or, if that is not reasonably
practicable, as of the earliest date thereafter as is reasonably practicable. A
party may (but need not) determine its Loss by reference to quotations of
relevant rates or prices from one or more leading dealers in the relevant
markets.
"MARKET QUOTATION" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document
with respect to the obligations of such party) and the quoting Reference
Market-maker to enter into a transaction (the "Replacement Transaction") that
would have the effect of preserving for such party the economic equivalent of
any payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition precedent
by the parties under Section 2(a)(i) in respect of such Terminated Transaction
or group of Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have
15 ISDA(R) 1992
been required after that date. For this purpose, Unpaid Amounts in respect of
the Terminated Transaction or group of Terminated Transactions are to be
excluded but, without limitation, any payment or delivery that would, but for
the relevant Early Termination Date, have been required (assuming satisfaction
of each applicable condition precedent after that Early Termination Date is to
be included. The Replacement Transaction would be subject to such documentation
as such party and the Reference Market-maker may, in good faith, agree. The
party making the determination (or its agent) will request each Reference
Market-maker to provide its quotation to the extent reasonably practicable as of
the same day and time (without regard to different time zones) on or as soon as
reasonably practicable after the relevant Early Termination Date. The day and
time as of which those quotations are to be obtained will be selected in good
faith by the party obliged to make a determination under Section 6(e), and, if
each party is so obliged, after consultation with the other. If more than three
quotations are provided, the Market Quotation will be the arithmetic mean of the
quotations, without regard to the quotations having the highest and lowest
values. If exactly three such quotations are provided, the Market Quotation will
be the quotation remaining after disregarding the highest and lowest quotations.
For this purpose, if more than one quotation has the same highest value or
lowest value, then one of such quotations shall be disregarded. If fewer than
three quotations are provided, it will be deemed that the Market Quotation in
respect of such Terminated Transaction or group of Terminated Transactions
cannot be determined.
"NON-DEFAULT RATE" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it) if
it were to fund the relevant amount.
"NON-DEFAULTING PARTY" has the meaning specified in Section 6(a).
"OFFICE" means a branch or office of a party, which may be such party's head or
home office.
"POTENTIAL EVENT OF DEFAULT" means any event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.
"REFERENCE MARKET-MAKERS" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria that
such party applies generally at the time in deciding whether to offer or to make
an extension of credit and (b) to the extent practicable, from among such
dealers having an office in the same city.
"RELEVANT JURISDICTION" means, with respect to a party, the jurisdictions (a)
in which the party is incorporated, organised, managed and controlled or
considered to have its seat, (b) where an Office through which the party is
acting for purposes of this Agreement is located, (c) in which the party
executes this Agreement and (d) in relation to any payment, from or through
which such payment is made.
"SCHEDULED PAYMENT DATE" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.
"SET-OFF" means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.
"SETTLEMENT AMOUNT" means, with respect to a party and any Early Termination
Date, the sum of:-
(a) the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and
(b) such party's Loss (whether positive or negative and without reference to any
Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not (in
the reasonable belief of the party making the determination) produce a
commercially reasonable result.
"SPECIFIED ENTITY" has the meaning specified in the Schedule.
16 ISDA(R) 1992
"SPECIFIED INDEBTEDNESS" means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.
"SPECIFIED TRANSACTION" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter entered
into between one party to this Agreement (or any Credit Support Provider of such
party or any applicable Specified Entity of such party) and the other party to
this Agreement (or any Credit Support Provider of such other party or any
applicable Specified Entity of such other party) which is a rate swap
transaction, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions), (b) any combination of
these transactions and (c) any other transaction identified as a Specified
Transaction in this Agreement or the relevant confirmation.
"STAMP TAX" means any stamp, registration, documentation or similar tax.
"TAX" means any present or future tax, levy, impost, duty, charge, assessment or
fee of any nature (including interest penalties and additions thereto) that is
imposed by any government or other taxing authority in respect of any payment
under this Agreement other than a stamp, registration, documentation or similar
tax.
"TAX EVENT" has the meaning specified in Section 5(b).
"TAX EVENT UPON MERGER" has the meaning specified in Section 5(b).
"TERMINATED TRANSACTIONS" means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either case) in effect
immediately before the effectiveness of the notice designating that Early
Termination Date (or, if "Automatic Early Termination" applies, immediately
before that Early Termination Date).
"TERMINATION CURRENCY" has the meaning specified in the Schedule.
"TERMINATION CURRENCY EQUIVALENT" means, in respect of any amount denominated in
the Termination Currency, such Termination Currency amount and, in respect of
any amount denominated in a currency other than the Termination Currency (the
"Other Currency"), the amount in the Termination Currency determined by the
party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Market Quotation or Loss (as the case may be), is determined as of
a later date, that later date, with the Termination Currency at the rate equal
to the spot exchange rate of the foreign exchange agent (selected as provided
below) for the purchase of such Other Currency with the Termination Currency at
or about 11:00 a.m. (in the city in which such foreign exchange agent is
located) on such date as would be customary for the determination of such a rate
for the purchase of such Other Currency for value on the relevant Early
Termination Date or that later date. The foreign exchange agent will, if only one
party is obliged to make a determination under Section 6(e), be selected in good
faith by that party and otherwise will be agreed by the parties.
"TERMINATION EVENT" means an Illegality, a Tax Event or a Tax Event Upon Merger
or, if specified to be applicable, a Credit Event Upon Merger or an Additional
Termination Event.
"TERMINATION RATE" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.
"UNPAID AMOUNTS" owing to any party means, with respect to an Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for Section
2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under Section
2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be
settled by delivery to such party on or prior to such Early Termination Date and
which has not been so settled as at such Early Termination Date, an amount equal
to the fair market
17 ISDA(R) 1992
value of that which was (or would have been) required to be delivered as of the
originally scheduled date for delivery, in each case together with (to the
extent permitted under applicable law) interest, in the currency of such
amounts, from (and including) the date such amounts or obligations were or would
have been required to have been paid or performed to (but excluding) such Early
Termination Date, at the Applicable Rate. Such amounts of interest will be
calculated on the basis of daily compounding and the actual number of days
elapsed. The fair market value of any obligation referred to in clause (b) above
shall be reasonably determined by the party obliged to make the determination
under Section 6(e) or, if each party is so obliged, it shall be the average of
the Termination Currency Equivalents of the fair market values reasonably
determined by both parties.
IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.
National Bank of Greece X.X. Xxxxxx Shipping Ltd
(Name of Party) (Name of Party)
By: By:
----------------------------------- ----------------------------------
Name: Name:
Title: Title:
Date: Date:
Magic Star Shipping Co. Ltd
(Name of Party)
By:
----------------------------------
Name:
Title:
Date:
Xxxx Shipping Ltd
(Name of Party)
By:
----------------------------------
Name:
Title:
Date:
Vague Shipping Ltd
(Name of Party)
By:
----------------------------------
Name:
Title:
Date:
18 ISDA(R) 1992
Zoom Shipping Ltd
(Name of Party)
By:
----------------------------------
Name:
Title:
Date:
Ocean Village Maritime S. A.
(Name of Party)
By:
----------------------------------
Name:
Title:
Date:
19 ISDA(R) 1992
1
ISDA
INTERNATIONAL SWAP DEALERS ASSOCIATION INC.
SCHEDULE
TO THE MASTER AGREEMENT
dated as of ___________________________
between NATIONAL BANK OF GREECE S.A. ("PARTY A") and FIGARO SHIPPING LTD, MAGIC
STAR SHIPPING CO. LTD, XXXX SHIPPING LTD, VAGUE SHIPPING LTD, ZOOM SHIPPING LTD
and OCEAN VILLAGE MARITIME S.A. (collectively, "PARTY B")
PART 1. TERMINATION PROVISIONS
(a) "SPECIFIED ENTITY" means in relation to Party A for the purpose of: -
Section 5(a)(v) None
Section 5(a)(vi) None
Section 5(a)(vii) None
Section 5(b)(iv) None
and in relation to Party B for the purpose of:-
Section 5(a)(v) None
Section 5(a)(vi) None
Section 5(a)(vii) None
Section 5(b)(iv) None
(b) "SPECIFIED TRANSACTION" will have the meaning specified in Section 14 of
this Agreement
(c) The "CROSS DEFAULT" provisions of Section 5(a)(vi)
will not apply to Party A
will apply to Party B
2
"SPECIFIED INDEBTEDNESS" will have the meaning specified in Section 14 of this
Agreement
"THRESHOLD AMOUNT" means with respect to Party B
USD 500.000
(d) The "CREDIT EVENT UPON MERGER" provisions of Section 5(b)(iv)
will not apply to Party A
will apply to Party B
(e) The "AUTOMATIC EARLY TERMINATION" provision of Section 6(a)
will not apply to Party A
will apply to Party B
(f) PAYMENTS ON EARLY TERMINATION". For the purpose of Section 6(e) of this
Agreement: -
(i) Loss will apply.
(ii) the First Method will apply
(g) "TERMINATION CURRENCY" means the currency selected by the party which is not
the Defaulting Party or the Affected Party, or otherwise, United States Dollars.
(h) "ADDITIONAL TERMINATION EVENT"
will not apply
PART 2. AGREEMENT TO DELIVER DOCUMENTS.
For the purpose of Sections 4(a) (i) and (ii) of this Agreement, each party
agrees to deliver the following documents as applicable; -
(A) TAX FORMS, DOCUMENTS OR CERTIFICATES TO BE DELIVERED ARE; -
PARTY REQUIRED TO FORM/DOCUMENT/ DATE BY WHICH
DELIVER DOCUMENT CERTIFICATE TO BE DELIVERED
------------------- ------------------------- ---------------------
Party A and Party B Evidence of authority and On or prior to
specimen signature of execution of
each person executing this Agreement
on its behalf
3
Party B A copy of the annual On request, as soon
Report containing audited as publicly available
Financial statements for
the most Recently ended
financial year
(b) Other documents to be delivered are:
(c)
PARTY REQUIRED TO FORM/DOCUMENT/ DATE BY WHICH COVERED BY
DELIVER DOCUMENT CERTIFICATE TO BE DELIVERED SECTION 3(D)
------------------- ------------------------- --------------- ------------
REPRESENTATION
Party B A copy of the annual as publicly Yes
Report containing audited available
Financial statements for
the most Recently ended
financial year
PART 3.
(a) Addresses for Notices. For the purpose of Section 12(a) of this Agreement: -
Address for notices or communications to Party A; -
Address: 0 Xxxxxxxxxxx Xxxxxx & Xxxx Xxxxxxx, 000 00 Xxxxxxx, Xxxxxx
Attention: Xx. X. Xxxxxxxx / Xx. X. Xxxxxxxxx
Facsimile No. x00 000 0000000 Telephone No: x00 000 0000000
Address for notices or communication to Party B: c/o Capital Ship Management
Corp.
Address: 0 Xxxxxxxx Xxxxxx, Xxxxxxx 000 00, Xxxxxx
Attention: Mr. Syntychakis
Facsimile No.: x00 000 000 0000 Telephone No.: __________
(b) "PROCESS AGENT" For the purpose of Section 13(c) of this Agreement
Party A appoints as Process Agent None
Party B appoints as Process Agent Curzon Maritime Ltd
Address: Xx. Xxxxx Xxxxx, 00/00 Xxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX, Xxxxxxx
(x) OFFICES. For Party A, offices in Athens and London
(d) MULTIBRANCH PARTY. For the purpose of Section 10(c) of this Agreement: _
Party A is a Multibranch Party, Party B is not a Multibranch Party
4
(e) CALCULATION AGENT -The Calculation Agent is Party A unless otherwise
specified in a Confirmation in relation to the relevant Transaction
(f) CREDIT SUPPORT DOCUMENT. None
(g) CREDIT SUPPORT PROVIDER: None
(h) GOVERNING LAW: This Agreement will be governed by and construed in
accordance with English Law
(i) JURISDICTION: as specified in Section 13 of this Agreement
(j) NETTING OF PAYMENTS. Subparagraph (ii) of Section 2(c) of this Agreement
will not apply to any Transaction or group(s) of Transactions (in each case with
effect from the date of this Agreement) except as mutually agreed by Party A and
Party B and detailed in the relevant Confirmation(s) evidencing A Transaction or
group(s) of Transactions, as the case may be.
(k) "AFFILIATE" will have the meaning specified in Section 14 of this Agreement
SIGNED by XXXXXX XXXXX ) /s/ Xxxxxx Xxxxx
for and on behalf of ) ---------------------------------------
FIGARO SHIPPING LTD ) Attorney-in-fact
SIGNED by XXXXXX XXXXX ) /s/ Xxxxxx Xxxxx
for and on behalf of ) ---------------------------------------
MAGIC STAR SHIPPING CO. LTD ) Attorney-in-fact
SIGNED by XXXXXX XXXXX ) /s/ Xxxxxx Xxxxx
for and on behalf of ) ---------------------------------------
XXXX SHIPPING LTD ) Attorney-in-fact
SIGNED by XXXXXX XXXXX ) /s/ Xxxxxx Xxxxx
for and on behalf of ) ---------------------------------------
VAGUE SHIPPING LTD ) Attorney-in-fact
SIGNED by XXXXXX XXXXX ) /s/ Xxxxxx Xxxxx
for and on behalf of ) ---------------------------------------
ZOOM SHIPPING LTD ) Attorney-in-fact
SIGNED by XXXXXX XXXXX ) /s/ Xxxxxx Xxxxx
for and on behalf of ) ---------------------------------------
OCEAN VILLAGE MARITIME S.A. ) Attorney-in-fact
SIGNED by XXXXXXX XXXXXX ) /s/ Xxxxxxx Xxxxxx
and by XXXXX XXXXXXXX ) ---------------------------------------
for and on behalf of ) Authorised Signatory
NATIONAL BANK OF GREECE S.A. )
as Agent, Security Agent, Swap )
Provider and Account Bank ) /s/ Xxxxx Xxxxxxxx
) ---------------------------------------
) Authorised Signatory
SIGNED by XXXXXXX XXXXXX ) /s/ Xxxxxxx Xxxxxx
and by XXXXX XXXXXXXX ) ---------------------------------------
for and on behalf of ) Authorised Signatory
NATIONAL BANK OF GREECE S.A. )
as Bank )
) /s/ Xxxxx Xxxxxxxx
) ---------------------------------------
) Authorised Signatory
SIGNED by SERAFEIM KRYEMBARDIS ) /s/ Serafeim Kryembardis
for and on behalf of ) ---------------------------------------
EMPORIKI BANK OF GREECE S.A. ) Authorised Signatory
as Bank
71
