6-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

DATED: January 13, 2020

Commission File No. 001-33811

 

 

NAVIOS MARITIME PARTNERS L.P.

 

 

7 Avenue de Grande Bretagne, Office 11B2

Monte Carlo, MC 98000 Monaco

(Address of Principal Executive Offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  ☒            Form 40-F  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes  ☐            No  ☒

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes  ☐            No  ☒

 

 

 


This Report on Form 6-K is hereby incorporated by reference into the Registration Statement on Form F-3, File No. 333-215529, of Navios Maritime Partners L.P. (the “Company”).

On December 12, 2019, the Company entered into a new credit facility with ABN Amro Bank N.V. (the “ABN Credit Facility”) of up to $23.5 million in order to finance the purchase of five container vessels. The ABN Credit Facility matures on September 30, 2020 and bears interest at LIBOR plus 400 basis points per annum. As of December 31, 2019, the full available amount has been drawn under the ABN Credit Facility. A copy of the ABN Credit Facility is attached as Exhibit 4.1 to this report and is incorporated by reference herein.

In connection with the acquisition of four bulk carrier vessels, on December 16, 2019, the Company entered into a credit facility with Dory Funding DAC (the “Dory Credit Facility”), of up to $37.0 million. As of December 31, 2019, the full available amount has been drawn under the Dory Credit Facility. The Dory Credit Facility terminates on the third anniversary of the date of the first draw down under the Dory Credit Facility and initially bears interest at LIBOR plus 475 basis points per annum. A form of the Dory Credit Facility is attached as Exhibit 4.2 to this report and is incorporated by reference herein.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

NAVIOS MARITIME PARTNERS L.P.
By:  

/s/ Angeliki Frangou

  Angeliki Frangou
  Chief Executive Officer

Date: January 13, 2020


EXHIBIT INDEX

 

Exhibit
No.

  

Exhibit

4.1    Facility Agreement, dated as of December 12, 2019, by and among Navios Maritime Partners L.P., as borrower, ABN Amro Bank N.V., as agent and security trustee, and the banks and financial institutions listed therein, as lenders.
4.2    Form of Amended and Restated Facility Agreement, dated as of December 16, 2019, by and among Camelia Shipping Inc., Anthos Shipping Inc., Azalea Shipping Inc. and Amaryllis Shipping Inc., as borrowers, Navios Maritime Operating L.L.C. and Navios Maritime Partners L.P., as guarantors, Dory Funding DAC, as agent and security agent, and the financial institutions listed therein, as lenders.
EX-4.1

Exhibit 4.1

Date 12th December 2019

NAVIOS MARITIME PARTNERS L.P.

as Borrower

- and –

THE BANKS AND FINANCIAL INSTITUTIONS

listed in Schedule 1

as Lenders

- and -

ABN AMRO BANK N.V.

as Agent and as Security Trustee

 

 

FACILITY AGREEMENT

 

 

INCE

PIRAEUS


INDEX

 

Clause        Page  

1

  INTERPRETATION      4  

2

  FACILITY      23  

3

  POSITION OF THE LENDERS      23  

4

  DRAWDOWN      23  

5

  INTEREST      25  

6

  INTEREST PERIODS      27  

7

  DEFAULT INTEREST      27  

8

  REPAYMENT AND PREPAYMENT      30  

9

  CONDITIONS PRECEDENT      32  

10

  REPRESENTATIONS AND WARRANTIES      33  

11

  GENERAL UNDERTAKINGS      36  

12

  CORPORATE UNDERTAKINGS      41  

13

  INSURANCE      43  

14

  SHIP’S COVENANTS      47  

15

  SECURITY COVER      52  

16

  PAYMENTS AND CALCULATIONS      53  

17

  APPLICATION OF RECEIPTS      56  

18

  APPLICATION OF EARNINGS, LOCATION OF ACCOUNTS      56  

19

  EVENTS OF DEFAULT      58  

20

  EXPENSES      62  

21

  INDEMNITIES      63  

22

  NO SET-OFF OR TAX DEDUCTION      65  

23

  ILLEGALITY, ETC      66  

24

  INCREASED COSTS      66  

25

  SET-OFF      68  

26

  TRANSFERS AND CHANGES IN LENDING AND BOOKING OFFICES      68  

27

  VARIATIONS AND WAIVERS      75  

28

  NOTICES      76  

29

  PARALELL DEBT      78  

30

  SUPPLEMENTAL      79  

31

  LAW AND JURISDICTION      79  


SCHEDULE 1  LENDERS AND COMMITMENTS

     78  

SCHEDULE 2  DRAWDOWN NOTICE

     79  

SCHEDULE 3  CONDITION PRECEDENT DOCUMENTS

     80  

SCHEDULE 4  TRANSFER CERTIFICATE

     83  

SCHEDULE 5  FORM OF COMPLIANCE CERTIFICATE

     87  

SCHEDULE 6  SHIP AND THIRD PARTY MANAGER DETAILS

     88  


THIS AGREEMENT is made on 12th December 2019

BETWEEN

 

(1)

NAVIOS MARITIME PARTNERS L.P., as Borrower;

 

(2)

THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1, as Lenders;

 

(3)

ABN AMRO BANK N.V., as Agent; and

 

(4)

ABN AMRO BANK N.V., as Security Trustee.

BACKGROUND

 

(A)

The Lenders have agreed to make available to the Borrower a loan in an amount not exceeding the lesser of (i) twenty three million five hundred thousand Dollars ($23,500,000) and (ii) 50% of the aggregate Fair Market Value of the Ships (determined in accordance with the provisions contained in Schedule 3, Part B (Paragraph 5) and not earlier than 30 days before the Drawdown Date), in a single advance, for the purpose of enabling the Borrower to on-lend the same to the Shareholder to finance the acquisition of all the shares in each Guarantor.

 

(B)

The Lenders have agreed to share pari passu in the security to be granted to the Security Trustee pursuant to this Agreement.

IT IS AGREED as follows:

 

1

INTERPRETATION

 

1.1

Definitions. Subject to Clause 1.5, (General Interpretation) in this Agreement (including in the above recitals):

Account Bank” means ABN AMRO Bank N.V. acting through its branch at Gustav Mahlerlaan 10, 1082 PP Amsterdam, The Netherlands, or such other bank as may be designated by the Agent as the Account Bank for the purposes of this Agreement and which is of a rating acceptable to the Lenders, in their sole discretion;

Account Security Deed” means a deed creating security (i) in respect of the Retention Account and (ii) in respect of the Earnings Account of each Guarantor, in the agreed form;

Actual Transfer Date” means, in relation to each Guarantor, the day on which all the shares in each Guarantor are actually transferred by the Seller to the Shareholder pursuant to the terms of the SPA;

Affected Lender” has the meaning given in Clause 5.7 (Market disruption);

Affiliate” means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company;

Agency and Trust Deed” means the agency and trust deed dated the same date as this Agreement and made between the same parties;

Agent” means ABN AMRO Bank N.V., duly incorporated under the laws of Netherlands, having its registered office at Gustav Mahlerlaan 10, 1082 PP Amsterdam, The Netherlands, acting for the purposes of this Agreement through its office at Gustav Mahlerlaan 10, 1082 PP Amsterdam, The Netherlands, (or of such other address as may last have been notified to the Borrower) or any successor of it appointed under clause 5 (Appointment of a new Servicing Bank) of the Agency and Trust Deed;

 

4


Agreed Form” means, in relation to any document, that document in the form approved in writing by the Agent or as otherwise approved in accordance with any other approved procedure specified in any relevant provision of any Finance Document;

Approved Broker” means each of (i) H. Clarkson & Co. Ltd. of St Magnus House, 3 Lower Thames Street, London EC3R 6HE, England, (ii) Arrow Sale & Purchase (UK) Limited of Harbour House, Chelsea Harbour, London SW10 0XE, England, (iii) SSY Valuation Services Limited of Lloyds Chambers, 1 Portsoken Street, London E1 8PH, England, (iv) Fearnleys of P.O. Box 1158 Sentrum, 0107 Oslo, Norway, (v) Maersk Broker K/S, Midtermolen 1, 2100 Copenhagen, Denmark, (vi) Braemar Seascope Limited of One Strand, Trafalgar Square, London WC2N 5HR, England, (vii) E.A. Gibson Shipbrokers Ltd., Audrey House, 16-20 Ely Place, London EC1N 6SN, England, (viii) BRS of 11 Boulevard Jean Mermoz, 92200 Neuilly-sur-Seine, France and (ix) Howe Robinson Partners of 3rd Floor, 40 Gracechurch St, London EC3V 0BT, United Kingdom, or such other reputable, independent and first class firm of shipbrokers specialising in the valuation of vessels of the relevant type requested by the Borrower and agreed upon and appointed by the Agent at its sole discretion;

Approved Flag” means the Republic of Liberia, the Republic of Marshall Islands, the Republic of Cyprus, the Republic of Panama or such other flag as the Agent may, with the authorisation of all the Lenders, in their absolute discretion, approve as the flag on which a Ship may be registered;

Approved Flag State” means the Republic of Liberia, the Republic of Marshall Islands, the Republic of Cyprus, the Republic of Panama or any other country in which the Agent may with the authorisation of all the Lenders, approve that a Ship be registered;

Approved Manager” means, in relation to each Ship, Navios Shipmanagement Inc., a corporation incorporated under the laws of the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 or any other company Affiliate of the Approved Manager and/or of Angeliki Frangou which the Agent may, with the authorisation of the Majority Lenders, approve from time to time as the technical and/or commercial manager of a Ship (such approval not to be unreasonably withheld);

Availability Period” means the period commencing on the date of this Agreement and ending on the earliest of (a) 31 December 2019 and (b) any date on which (i) the aggregate of the Loan is equal to the Total Commitments or (ii) the Total Commitments are reduced to zero; or, in each case, such later date as the Agent may, with the authorisation of all the Lenders, agree with the Borrower;

Basel III” means:

 

  (a)

the agreements on capital requirements, a leverage ratio and liquidity standards contained in “Basel III: A global regulatory framework for more resilient banks and banking systems”, “Basel III: International framework for liquidity risk measurement, standards and monitoring” and “Guidance for national authorities operating the countercyclical capital buffer” published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated;

 

  (b)

the rules for global systemically important banks contained in “Global systemically important banks: assessment methodology and the additional loss absorbency requirement - Rules text” published by the Basel Committee on Banking Supervision in November 2011, as amended, supplemented or restated; and

 

  (c)

any further guidance or standards published by the Basel Committee on Banking Supervision relating to “Basel III”;

 

5


Basel IV means any amendment, replacement or refinement of Basel III known or to be known as “Basel IV”;

Borrower” means Navios Maritime Partners L.P., a limited partnership formed in the Marshall Islands and having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH96960;

Business Day” means a day (other than a Saturday and a Sunday) on which commercial banks are open in Athens, Piraeus, Amsterdam and Rotterdam and, in respect of a day on which:

 

  (a)

LIBOR is to be determined, also in London; and

 

  (b)

a payment is required to be made under a Finance Document in Dollars, also in New York City;

Change of Control Event” means the occurrence after the date of this Agreement of any of the following:

 

  (a)

the Permitted Owners sell any shares in the Borrower which would reduce the proportion of issued shares owned by them in aggregate in the Borrower to below 20%; or

 

  (b)

the Borrower issues further shares which would reduce the proportion of issued shares in the Borrower owned by the Permitted Owners in aggregate to below 20%;

Charter Assignment” means, in relation to any Extended Employment Contract over a Ship, the assignment thereof in the Agreed Form;

Code” means the US Internal Revenue Code of 1986, as amended, and the regulations promulgates and rulings issued thereunder;

Commitment” means in relation to a Lender, the amount set opposite its name in the second column of Schedule 1, or, as the case may require, the amount specified in the relevant Transfer Certificate, as that amount may be reduced, cancelled or terminated in accordance with this Agreement (and “Total Commitments” means the aggregate of the Commitments of all the Lenders);

Compliance Certificate” means a certificate in the form set out in Schedule 5 (or in any other form which the Agent, acting with the authorisation of all the Lenders, approves or requires);

“Confidential Information” means all information relating to a Security Party, the Group, the Finance Documents or the Loan of which a Creditor Party becomes aware in its capacity as, or for the purpose of becoming, a Creditor Party or which is received by a Creditor Party in relation to, or for the purpose of becoming a Creditor Party under, the Finance Documents or the Facility from either:

 

  (a)

any member of the Group or any of its advisers; or

 

  (b)

another Creditor Party, if the information was obtained by that Creditor Party directly or indirectly from any member of the Group or any of its advisers,

 

6


in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information but excludes information that:

 

  (i)

is or becomes public information other than as a direct or indirect result of any breach by that Creditor Party of Clauses 26.16 to 26.23 (inclusive) (Confidentiality); or

 

  (ii)

is identified in writing at the time of delivery as non-confidential by any member of the Group or any of its advisers; or

is known by that Creditor Party before the date the information is disclosed to it in accordance with paragraphs (a) or (b) above or is lawfully obtained by that Creditor Party after that date, from a source which is, as far as that Creditor Party is aware, unconnected with the Group and which, in either case, as far as that Creditor Party is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality

Contractual Currency” has the meaning given in Clause 21.4 (Currency indemnity);

Contribution” means, in relation to a Lender, the part of the Loan which is owing to that Lender;

CRD IV” means:

 

  (a)

Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending regulation (EU) No. 648/2012;

 

  (b)

Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC; and

 

  (c)

any other law or regulation which implements Basel III;

CRR” means Regulations (EU) No. 575/2013 of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending regulation (EU) No. 648/2012

Creditor Party” means the Agent, the Security Trustee, or any Lender, whether as at the date of this Agreement or at any later time;

Dollars”, “USD”, “US$” and “$” mean the lawful currency for the time being of the United States of America;

Drawdown Date” means the date requested by the Borrower for the Loan to be made, or (as the context requires) the date on which the Loan is actually made;

Drawdown Notice” means a notice in the form set out in Schedule 2 (or in any other form which the Agent approves or reasonably requires);

Earnings” means, in relation to a Ship, all moneys whatsoever which are now, or later become, payable (actually or contingently) to the Borrower or a Guarantor owning such Ship or the Security Trustee and which arise out of the use or operation of such Ship, including (but not limited to):

 

  (a)

except to the extent that they fall within paragraph (b):

 

  (i)

all freight, hire and passage moneys;

 

7


  (ii)

compensation payable to the Borrower or the Guarantor which owns that Ship or a Security Party in the event of requisition of that Ship for hire;

 

  (iii)

remuneration for salvage and towage services;

 

  (iv)

demurrage and detention moneys;

 

  (v)

damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of that Ship; and

 

  (vi)

all moneys which are at any time payable under any Insurances relating to that Ship in respect of loss of hire; and

 

  (b)

if and whenever that Ship is employed on terms whereby any moneys falling within paragraphs (i) to (vi) are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to that Ship;

Earnings Account” means, in relation to each Guarantor, an account in the name of such Guarantor with the Account Bank designated “[name of relevant Guarantor] - Earnings Account”, or any other account (with that or another office of the Account Bank or with a bank or financial institution other than the Account Bank) which is designated by the Agent as such account in relation to that Guarantor for the purposes of this Agreement;

EBITDA” means the aggregate amount of combined pre-tax profits of the Group before extraordinary or exceptional items, interest, depreciation and amortisation as shown, at any relevant time, by the Latest Accounts ;

Environmental Claim” means:

 

  (a)

any claim by any governmental, judicial or regulatory authority which arises out of an Environmental Incident or an alleged Environmental Incident or which relates to any Environmental Law; or

 

  (b)

any claim by any other person which relates to an Environmental Incident or to an alleged Environmental Incident,

and “claim” means a claim for damages, compensation, fines, penalties or any other payment of any kind whether or not similar to the foregoing; an order or direction to take, or not to take, certain action or to desist from or suspend certain action; and any form of enforcement or regulatory action, including the arrest or attachment of any asset;

Environmental Incident” means:

 

  (a)

any release of Environmentally Sensitive Material from a Ship; or

 

  (b)

any incident in which Environmentally Sensitive Material is released from a vessel other than a Ship and which involves a collision between a Ship and such other vessel or some other incident of navigation or operation, in either case, in connection with which a Ship is actually or potentially liable to be arrested, attached, detained or injuncted and/or a Ship and/or the Borrower and/or a Guarantor and/or the Approved Manager and/or the Third Party Manager or any operator or manager of a Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action; or

 

  (c)

any other incident in which Environmentally Sensitive Material is released otherwise than from a Ship and in connection with which a Ship is actually or potentially liable to be arrested and/or where the Borrower and/or a Guarantor and/or the Approved Manager and/or the Third Party Manager and/or any operator or manager of a Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action;

 

8


Environmental Law” means any law relating to pollution or protection of the environment, to the carriage of Environmentally Sensitive Material or to actual or threatened releases of Environmentally Sensitive Material;

Environmentally Sensitive Material” means oil, oil products and any other substance (including any chemical, gas or other hazardous or noxious substance) which is (or is capable of being or becoming) polluting, toxic or hazardous;

Event of Default” means any of the events or circumstances described in Clause 19.1 (Events of Default);

Existing Indebtedness” means the outstanding Financial Indebtedness of the Seller under the Existing Loan Agreement on the Drawdown Date;

Existing Loan Agreement” means the loan agreement dated 13 December 2013 (as amended and/or supplemented from time to time) and entered into between (inter alios) (i) the Seller and (ii) the Agent in respect of a loan facility of up to US$40,000,000 for the purposes therein specified;

Extended Employment Contract” means, in respect of a Ship, any time charterparty, contract of affreightment or other contract of employment of such Ship (including the entry of a Ship in any pool) which has a tenor exceeding twelve (12) months (including any options to renew or extend such tenor);

Fair Market Value” means, in relation to a Ship, its market value determined in accordance with Clause 15.3 (Valuation of Ship);

FATCA” means:

 

  (a)

sections 1471 to 1474 of the Code or any associated regulations;

 

  (b)

any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of any law or regulation referred to in paragraph (a) above; or

 

  (c)

any agreement pursuant to the implementation of any treaty, law or regulation referred to in paragraphs (a) or (b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction.

FATCA Application Date” means:

 

  (a)

in relation to a “withholdable payment” described in section 1473(1)(A)(i) of the Code (which relates to payments of interest and certain other payments from sources within the US), 1 July 2014;

 

  (b)

in relation to a “passthru payment” described in section 1471(d)(7) of the Code not falling within paragraph above, the first date from which such payment may become subject to a deduction or withholding required by FATCA;

FATCA Deduction” means a deduction or withholding from a payment under a Finance Document required by or under FATCA;

 

9


FATCA Exempt Party” means a party to a Finance Document that is entitled to receive payments free from any FATCA Deduction;

Finance Documents” means collectively:

 

  (a)

this Agreement;

 

  (b)

the Agency and Trust Deed;

 

  (c)

the Guarantees;

 

  (d)

the General Assignments;

 

  (e)

the Mortgages;

 

  (f)

the Account Security Deed;

 

  (g)

any Charter Assignments;

 

  (h)

the Manager’s Undertakings;

 

  (i)

the Shares Pledges;

 

  (j)

the Insurances Assignments; and

 

  (k)

any other document (whether creating a Security Interest or not) which is executed at any time by the Borrower or any other person as security for, or to establish any form of subordination or priorities arrangement in relation to, any amount payable to the Creditor Parties under this Agreement or any of the other documents referred to in this definition including, without limitation, any co-assured assignments of Insurances in respect of a Ship and any further undertakings and assignments of Insurances in respect of a Ship by any manager or sub-manager of a Ship;

(and a “Finance Document” means each or, as the context may require, any of them);

Financial Indebtedness” means, in relation to a person (the “debtor”), a liability of the debtor:

 

  (a)

for principal, interest or any other sum payable in respect of any moneys borrowed or raised by the debtor;

 

  (b)

under any loan stock, bond, note or other security issued by the debtor;

 

  (c)

under any acceptance credit, guarantee or letter of credit facility or dematerialised equivalent made available to the debtor;

 

  (d)

under a financial lease, a deferred purchase consideration arrangement or any other agreement having the commercial effect of a borrowing or raising of money by the debtor;

 

  (e)

under any foreign exchange transaction, any interest or currency swap or any other kind of derivative transaction entered into by the debtor or, if the agreement under which any such transaction is entered into requires netting of mutual liabilities, the liability of the debtor for the net amount; or

 

  (f)

under a guarantee, indemnity or similar obligation entered into by the debtor in respect of a liability of another person which would fall within paragraphs (a) to (e) if the references to the debtor referred to the other person

 

10


Financial Year” means, each period of 12 months ending on 31 December other than in the case of the first year which may be such shorter period commencing from the date of incorporation of the relevant company or corporation or limited partnership or such other date as the Majority Lenders may agree (such agreement not to be unreasonably withheld);

General Assignment” means, in relation to a Ship, a general assignment of its Earnings, Insurances and Requisition Compensation in the Agreed Form (and “General Assignments” means all of them collectively);

Group” means at any relevant time the Borrower and its Subsidiaries;

Group Member” means any member of the Group;

Guarantee” means each guarantee and indemnity to be executed by the relevant Guarantor in favour of the Security Trustee in the Agreed Form (and “Guarantees” means all of them collectively);

Guarantor” means each of the following corporations, each of which is incorporated in the Marshall Islands, and has its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH96960:

 

  (a)

Cronus Shipping Corporation (“Guarantor A”)

 

  (b)

Dionysus Shipping Corporation (“Guarantor B”)

 

  (c)

Leto Shipping Corporation (“Guarantor C”);

 

  (d)

Oceanus Shipping Corporation (“Guarantor D”); and

 

  (e)

Prometheus Shipping Corporation (“Guarantor E”);

and “Guarantors” means all of them;

Holding Company” means, in relation to a company or corporation or limited partnership, any other company or corporation or limited partnership in respect of which it is a Subsidiary;

IACS” means the International Association of Classification Societies;

IAPPC” means, in relation to a Ship, a valid international air pollution prevention certificate for such Ship issued pursuant to the MARPOL Protocol;

Indebtedness” means any obligation howsoever arising (whether present or future, actual or contingent, secured or unsecured as principal, surety or otherwise) for the payment or repayment of money;

Insurances” means, in relation to a Ship:

 

  (a)

all policies and contracts of insurance, including entries of that Ship in any protection and indemnity or war risks association, which are effected in respect of that Ship, its Earnings or otherwise in relation to it; and

 

  (b)

all rights and other assets relating to, or derived from, any of the foregoing, including any rights to a return of a premium;

 

11


Insurances Assignment” means, in respect of each of Ship A, Ship C and Ship E, an assignment of its Insurances executed or to be executed by any co-assured (other than the relevant Owner) in favour of the Security Trustee in such form as the Security Trustee may require in its sole discretion, and in the plural means all of them;

Interest Expense” means, for any relevant financial year, the aggregate interest paid or payable by the Group and any member thereof on any Indebtedness during such period;

Interest Period” means a period determined in accordance with Clause 6 (Interest Periods);

ISM Code” means the International Safety Management Code (including the guidelines on its implementation), adopted by the International Maritime Organisation as the same may be amended or supplemented from time to time (and the terms “safety management system”, “Safety Management Certificate” and “Document of Compliance” have the same meanings as are given to them in the ISM Code);

ISPS Code” means the International Ship and Port Facility Security Code as adopted by the International Maritime Organisation (as the same may be amended and supplemented from time to time);

ISSC” means a valid and current international ship security certificate issued under the ISPS Code;

Latest Accounts” means, as at the date of calculation or, as the case may be, in respect of an accounting period, the annual audited consolidated financial statements of the Borrower or the quarterly unaudited consolidated financial statements of the Borrower, in each case, which the Borrower is obliged to deliver to the Agent pursuant to Clause 11.6 (Provisions of financial statements);

Lender” means, subject to Clause 26.6 (Lender re-organisation; waiver of Transfer Certificate):

 

  (a)

a bank or financial institution listed in Schedule 1 and acting through its branch indicated in Schedule 1 (or through another branch notified to the Agent under Clause 26.14 (Change of lending or booking office)) unless it has delivered a Transfer Certificate or Certificates covering the entire amounts of its Commitment and its Contribution; and

 

  (b)

the holder for the time being of a Transfer Certificate;

LIBOR” means, in relation to any period for which an interest rate is to be determined under any provision of a Finance Document:

 

  (a)

the applicable Screen Rate; or

 

  (b)

if no Screen Rate is available for that period, the rate per annum determined by the Agent to be the arithmetic mean (rounded upwards to 4 decimal places) of the rates as supplied to the Agent at its request, quoted by each Reference Bank to leading banks in the London Interbank Market;

as of 11:00 am London time on the Quotation Day for dollars and for a period comparable to the Interest Period of the Loan, that part of the Loan or that Unpaid Sum and if any such rate is less than zero LIBOR shall be deemed to be zero;

Liquidity” means:

 

  (a)

cash in hand legally and beneficially owned by any Group Member; and

 

12


  (b)

cash deposits legally and beneficially owned by any Group Member and which are deposited with (A) the Account Bank or (B) any other bank or financial institution,

which in each case is at the free and unrestricted disposal of the relevant Group Member by which it is owned including any funds held with any bank from time to time to satisfy minimum liquidity requirements;

Loan” means the principal amount which has been advanced under this Agreement and which is outstanding for the time being;

Major Casualty” means, in relation to a Ship, any casualty to such Ship in respect of which the claim or the aggregate of the claims against all insurers, before adjustment for any relevant franchise or deductible, exceeds $500,000 or the equivalent in any other currency;

Majority Lenders” means:

 

  (a)

before the Loan has been made, Lenders whose Commitments total 66.67 per cent. or more of the Total Commitments; and

 

  (b)

after the Loan has been made, Lenders whose Contributions total 66.67 per cent. or more of the Loan;

Management Agreement” means, in respect of each Ship, the management agreement dated 16 November 2007 (as amended and/or otherwise up-dated from time to time) made between the Borrower (on behalf of each Owner) and the Approved Manager in such form and substance acceptable to the Agent acting with the authorisation of the Majority Lenders;

Manager’s Undertaking” means a letter of undertaking in respect of each Ship from the Approved Manager and, in respect of each of Ship A, Ship C and Ship E, the Third Party Manager, each in the Agreed Form (and “Managers Undertakings” means all of them collectively);

Margin” means 4.00 per cent. (4%) per annum;

MARPOL Protocol” means Annex VI (Regulations for the Prevention of Air Pollution from Ships) to the International Convention for the Prevention of Pollution from Ships 1973 (as amended in 1978 and 1997);

Maturity Date” means 30 September 2020;

Maximum Loan Amount” means the lesser of (i) twenty three million five hundred thousand Dollars ($23,500,000) and (ii) 50% of the aggregate Fair Market Value of the Ships evidenced by the valuations received by the Borrower under Clause 9.1 (Documents, fees and no default);

Minimum Liquidity” means, at any relevant time, the aggregate amounts required under clause 12.77 of this Agreement to be standing to the credit of the Earnings Accounts and/or the Retention Account;

Mortgage” means, in relation to a Ship, the first preferred mortgage on the Ship under the relevant Approved Flag including, if appropriate, any deed of covenant collateral thereto, in the Agreed Form (and “Mortgages” means all of them collectively);

Negotiation Period” has the meaning given in Clause 5.10 (Negotiation of alternative rate of interest);

 

13


Net Debt” means, as at the date of calculation or, as the case may be, for any accounting period, the total debt of the Group less cash (which shall have the meaning given thereto under US GAAP meaning both restricted and freely available cash) as at that date or for that period as shown in the Latest Accounts;

Net Worth” means, at any relevant time, the Total Assets less Total Liabilities;

Notifying Lender” has the meaning given in Clause 23.1 (Illegality) or 24.1 (Increased Costs) as the context requires;

Owner” means, in respect of each Ship, the Guarantor which is at any relevant time the owner thereof;

Payment Currency” has the meaning given in Clause 21.4 (Currency indemnity);

Permitted Owners” means any one or more of Navios Maritime Holdings Inc., Navios Maritime Partners L.P., Mrs Angeliki Frangou and their respective Affiliates;

Permitted Security Interests” means:

 

  (a)

Security Interests created by the Finance Documents;

 

  (b)

liens for unpaid master’s and crew’s wages in accordance with usual maritime practice;

 

  (c)

liens for salvage;

 

  (d)

liens arising by operation of law for not more than 2 months’ prepaid hire under any charter in relation to a Ship not prohibited by this Agreement;

 

  (e)

liens for master’s disbursements incurred in the ordinary course of trading and any other lien arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of a Ship, provided such liens do not secure amounts more than 60 days overdue (unless the overdue amount is being contested by the relevant Owner in good faith by appropriate steps) and subject, in the case of liens for repair or maintenance, to Clauses 14.13(h) (Restrictions on chartering, appointments of managers etc.);

 

  (f)

any Security Interest created in favour of a plaintiff or defendant in any proceedings or arbitration as security for costs and expenses while the relevant Owner is actively prosecuting or defending such proceedings or arbitration in good faith by appropriate steps;

 

  (g)

Security Interests arising by operation of law in respect of taxes which are not overdue for payment or in respect of taxes being contested in good faith by appropriate steps and in respect of which appropriate reserves have been made; and

 

  (h)

any right of pledge and/or set off created pursuant to the general banking conditions (algemene bankvoorwaarden) of ABN AMRO Bank NV;

Pertinent Document” means:

 

  (a)

any Finance Document;

 

  (b)

any policy or contract of insurance contemplated by or referred to in Clause 13 (Insurance) or any other provision of this Agreement or another Finance Document;

 

14


  (c)

any other document contemplated by or referred to in any Finance Document; and

 

  (d)

any document which has been or is at any time sent by or to the Agent or the Security Trustee in contemplation of or in connection with any Finance Document or any policy, contract or document falling within paragraphs (b) or (c);

Pertinent Jurisdiction”, in relation to a company, means:

 

  (a)

England and Wales;

 

  (b)

the country under the laws of which the company is incorporated or formed;

 

  (c)

a country in which the company has the centre of its main interests or in which the company’s central management and control is or has recently been exercised;

 

  (d)

a country in which the overall net income of the company is subject to corporation tax, income tax or any similar tax;

 

  (e)

a country in which assets of the company (other than securities issued by, or loans to, related companies) having a substantial value are situated, in which the company maintains a permanent place of business, or in which a Security Interest created by the company must or should be registered in order to ensure its validity or priority; and

 

  (f)

a country the courts of which have jurisdiction to make a winding up, administration or similar order in relation to the company or which would have such jurisdiction if their assistance were requested by the courts of a country referred to in paragraphs (b) or (c);

Pertinent Matter” means:

 

  (a)

any transaction or matter contemplated by, arising out of, or in connection with a Pertinent Document; or

 

  (b)

any statement relating to a Pertinent Document or to a transaction or matter falling within paragraph (a);

and covers any such transaction, matter or statement, whether entered into, arising or made at any time before the signing of this Agreement or on or at any time after that signing;

Potential Event of Default” means an event or circumstance which, with the giving of any notice, the lapse of time, a determination of the Majority Lenders and/or the satisfaction of any other condition, would constitute an Event of Default;

Quotation Date” means, in relation to any Interest Period (or any other period for which an interest rate is to be determined under any provision of a Finance Document), the day on which quotations would ordinarily be given by leading banks in the London Interbank Market for deposits in the currency in relation to which such rate is to be determined for delivery on the first day of that Interest Period or other period;

Reference Banks” means the branch of ABN AMRO Bank N.V. at Gustav Mahlerlaan 10, 1082 PP Amsterdam, The Netherlands and the London branch of ABN AMRO Bank N.V. or such other banks as may be appointed by the Agent in consultation with the Borrower;

Relevant Person” has the meaning given in Clause 19.9 (Relevant Persons);

Repayment Date” means a date on which a repayment of the Loan is required to be made under Clause 8.1 (Repayment of Loan);

 

15


Requisition Compensation” includes all compensation or other moneys payable by reason of any act or event such as is referred to in paragraph (b) of the definition of “Total Loss”;

Restricted Countries” means any country or region subject to Sanctions at the relevant time, as notified from time to time to the Borrower by the Agent, which, as of the date of this Agreement, are Cuba, Iran, North Korea, Sudan, Syria, the region of Crimea;

Restricted Person” means a person that is:

 

  (a)

listed on, or owned or controlled by a person listed on any Sanctions List;

 

  (b)

located in, incorporated under the laws of, or owned or controlled by, or acting on behalf of, a person located in or organised under the laws of a country or territory that is the target of country-wide Sanctions;

 

  (c)

located, domiciled, resident or incorporated in a Restricted Country; or

 

  (d)

otherwise a target of Sanctions;

Retention Account” means an account in the name of the Borrower with the Account Bank designated “ Navios Maritime Partners LP. - Retention Account”, which is designated by the Agent as such account for the purposes of this Agreement;

Sanctions” means any economic or trade sanctions laws, regulations, embargoes or restrictive measures administered, enacted or enforced by:

 

  (a)

the United States government;

 

  (b)

the United Nations;

 

  (c)

the European Union or any of its Member States including, without limitation, the Netherlands;

 

  (d)

the United Kingdom;

 

  (e)

any country to which any Security Party or any other member of the Group or any of their Affiliates is bound; or

 

  (f)

the respective governmental institutions and agencies of any of the foregoing, including without limitation, the Office of Foreign Assets Control of the US Department of Treasury (“OFAC”), the United States Department of State, and Her Majesty’s Treasury (“HMT”) (together “Sanctions Authorities” and each, “Sanctions Authority”);

Sanctions List” means the “Specially Designated Nationals and Blocked Persons” list issued by OFAC, the “Consolidated List of Financial Sanctions Targets and Investment Ban List” issued by HMT, or any similar list issued or maintained or made public by any of the Sanctions Authorities;

Screen Rate” means the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate) for dollars for the relevant period displayed on pages LIBOR01 or LIBOR02 of the Reuters screen (or any replacement Reuters page which displays that rate), or on the appropriate page of such other information service which publishes that rate from time to time in place of Reuters. If such page or service ceases to be available, the Agent may specify another page or service displaying the appropriate rate after consultation with the Borrower;

 

16


Secured Liabilities” means all liabilities which the Borrower, the Security Parties or any of them have, at the date of this Agreement or at any later time or times, under or in connection with any Finance Document or any judgment relating to any Finance Document; and for this purpose, there shall be disregarded any total or partial discharge of these liabilities, or variation of their terms, which is effected by, or in connection with, any bankruptcy, liquidation, arrangement or other procedure under the insolvency laws of any country;

Security Interest” means:

 

  (a)

a mortgage, charge (whether fixed or floating) or pledge, any maritime or other lien or any other security interest of any kind;

 

  (b)

the security rights of a plaintiff under an action in rem; and

 

  (c)

any arrangement entered into by a person (A) the effect of which is to place another person (B) in a position which is similar, in economic terms, to the position in which B would have been had he held a security interest over an asset of A; but this paragraph (c) does not apply to a right of set off or combination of accounts conferred by the standard terms of business of a bank or financial institution;

Security Party” means the Borrower, the Guarantors, the Shareholder and any other person (except a Creditor Party) who, as a surety or mortgagor, as a party to any subordination or priorities arrangement, or in any similar capacity, executes a document falling within the last paragraph of the definition of “Finance Documents” (other than the Third Party Manager);

Security Period” means the period commencing on the date of this Agreement and ending on the date on which the Agent notifies the Borrower, the Security Parties and the Lenders that:

 

  (a)

all amounts which have become due for payment by the Borrower or any Security Party under the Finance Documents have been paid;

 

  (b)

no amount is owing or has accrued (without yet having become due for payment) under any Finance Document;

 

  (c)

neither the Borrower or any Security Party has any future or contingent liability under Clause 20 (Expenses), 21 (Indemnities) or 22 (No set-off or tax deduction) or any other provision of this Agreement or another Finance Document;

Security Trustee” means ABN AMRO Bank N.V., duly incorporated under the laws of Netherlands, having its registered office at Gustav Mahlerlaan 10, 1082 PP Amsterdam, The Netherlands (or of such other address as may last have been notified to the Borrower) or any successor of it appointed under clause 5 (Appointment of a new Servicing Bank) of the Agency and Trust Deed;

Seller” means Navios Europe Inc., a corporation incorporated in the Marshall Islands and having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH96960;

Shareholder” means, Navios Maritime Operating L.L.C. a company formed in the Marshall Islands and having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH96960;

Shares Pledge” means, in relation to each Guarantor, a deed creating security in respect of the issued share capital of that Guarantor executed or to be executed by the Shareholder in favour of the Security Trustee in the Agreed Form and “Shares Pledges” means all of them;

 

17


Ship” means each of Ship A, Ship B, Ship C, Ship D and Ship E and “Ships” means all of them;

SMC” means a safety management certificate issued in respect of a Ship in accordance with Rule 13 of the ISM Code;

SPA” means the Share Purchase Agreement dated 26 November 2019 pursuant to which all the issued and outstanding shares in each Guarantor (the “Shares”) will be transferred by the Seller as seller of the Shares to the Shareholder as buyer of the Shares;

Subsidiary” has the meaning given in Clause 1.4 (Meaning of “Subsidiary”);

Total Loss” means, in relation to a Ship:

 

  (a)

actual, constructive, compromised, agreed or arranged total loss of such Ship;

 

  (b)

requisition for title or other compulsory acquisition including, if that ship is not released therefrom within the Relevant Period, capture, appropriation, forfeiture, seizure, detention, deprivation or confiscation howsoever for any reason (but excluding requisition for use or hire) by or on behalf of any government entity or other competent authority or by pirates, hijackers, terrorists or similar persons; “Relevant Period” means for the purposes of this definition either (i) ninety (90) days or, (ii) if relevant underwriters confirm in writing (in terms satisfactory to the Agent) prior to the end of such ninety (90) day period that such capture, seizure, detention or confiscation will be fully covered (subject to any applicable deductible) by the relevant Owner’s war risks insurance if continuing for a further period exceeding ten (10) calendar months, the shorter of twelve (12) months and such period at the end of which cover is confirmed to attach; and

 

  (c)

any arrest, capture, seizure or detention of such Ship (including any hijacking or theft) unless it is within 90 days redelivered to the full control of the Owner owning such Ship;

Total Assets” means, as at the date of calculation or, as the case may be, for any accounting period, the total assets (based on book values) (which shall have the meaning given thereto under US GAAP) of the Borrower as at that date or for that period as shown in the Latest Accounts.

Total Liabilities” means, as at the date of calculation or, as the case may be, for any accounting period, the total liabilities (which shall have the meaning given thereto under US GAAP) of the Borrower as at that date or for that period as shown in the Latest Accounts;

“Total Loss Date” means, in relation to a Ship:

 

  (a)

in the case of an actual loss of such Ship, the date on which it occurred or, if that is unknown, the date when such Ship was last heard of;

 

  (b)

in the case of a constructive, compromised, agreed or arranged total loss of such Ship, the earliest of:

 

  (i)

the date on which a notice of abandonment is given to the insurers; and

 

  (ii)

the date of any compromise, arrangement or agreement made by or on behalf of the Borrower owning such Ship with such Ship’s insurers in which the insurers agree to treat such Ship as a total loss; and

 

18


  (c)

in the case of any other type of total loss, on the date (or the most likely date) on which it appears to the Agent that the event constituting the total loss occurred;

Transfer Certificate” has the meaning given in Clause 26.2 (Transfer by a Lender); and

Trust Property” has the meaning given in clause 3.1 (Definition of “Trust Property”) of the Agency and Trust Deed; and

US GAAP” means the generally accepted accounting principles applied from time to time in the United States of America.

Words and expressions defined in Schedule 6 (Ship and Third Party Manager Details) when used in this Agreement shall have the meanings given to them in Schedule 6 (Ship and Third Party Manager Details) as if the same were set out in full in this clause 1.1 (Definitions).

 

1.2

Construction of certain terms. In this Agreement:

administration notice” means a notice appointing an administrator, a notice of intended appointment and any other notice which is required by law (generally or in the case concerned) to be filed with the court or given to a person prior to, or in connection with the appointment of an administrator;

approved” means, for the purposes of Clause 13 (Insurance), approved in writing by the Agent;

asset” includes every kind of property, asset, interest or right, including any present, future or contingent right to any revenues or other payment;

company” includes any partnership, joint venture and unincorporated association;

consent” includes an authorisation, consent, approval, resolution, licence, exemption, filing, registration, notarisation and legalisation;

contingent liability” means a liability which is not certain to arise and/or the amount of which remains unascertained;

a Potential Event of Default is “continuing” if it has not been remedied or waived and an Event of Default is “continuing” if it has not been waived;

document” includes a deed; also a letter or fax;

excess risks” means, in relation to a Ship, the proportion of claims for general average, salvage and salvage charges not recoverable under the hull and machinery policies in respect of the Ship in consequence of its insured value being less than the value at which the Ship is assessed for the purpose of such claims;

expense” means any kind of cost, charge or expense (including all legal costs, out-of-pocket expenses, charges and expenses) and any applicable value added or other tax;

law” includes any order or decree, any form of delegated legislation, any treaty or international convention and any regulation or resolution of the Council of the European Union, the European Commission, the United Nations or its Security Council;

legal or administrative action” means any legal proceeding or arbitration and any administrative or regulatory action or investigation;

liability” includes every kind of debt or liability (present or future, certain or contingent), whether incurred as principal or surety or otherwise;

 

19


months” shall be construed in accordance with Clause 1.3 (Meaning of “month”);

obligatory insurances” means, in relation to a Ship, all insurances effected or which the relevant Owner is obliged to effect in respect of each Ship, under Clause 13 (Insurance) or any other provision of this Agreement or another Finance Document;

parent company” has the meaning given in Clause 1.4 (Meaning of “Subsidiary”);

person” includes any company; any state, political sub-division of a state and local or municipal authority; and any international organisation;

policy”, in relation to any insurance, includes a slip, cover note, certificate of entry or other document evidencing the contract of insurance or its terms;

protection and indemnity risks” means the usual risks covered by a protection and indemnity association managed in London, including pollution risks and the proportion (if any) of any sums payable to any other person or persons in case of collision which are not recoverable under the hull and machinery policies by reason of the incorporation in them of clause 6 of the International Hull Clauses (01/11/02 or 01/11/03), clause 8 of the Institute Time Clauses (Hulls) (1/11/1995 or 1/10/83) or the Institute Amended Running Down Clause (1/10/71) or any equivalent provision;

regulation” includes any present or future regulation, rule, directive, requirement, request or guideline (whether or not having the force of law) of any government entity, central bank or any self-regulatory or other supra-national authority (including, without limitation any present or future regulation, rule, directive, requirement, request or guideline (whether or not having the force of law) of any government entity, central bank or any self-regulatory or other supra-national authority (including, without limitation, any regulation implementing or complying with (1) the “International Convergence of Capital Measurement and Capital Standards, a Revised Framework” published by the Basel Committee on Banking Supervision in June 2004, in the form existing on the date of this Agreement (“Basel II”) and/or (2) Basel III and/or (3) Basel IV and/or (4) any other law or regulation which, at any time and from time to time, implements and/or amends and/or supplements and/or re-enacts and/or supersedes, whether in whole or in part, Basel II and/or Basel III and/or Basel IV (including CRD IV and CRR), and whether such implementation, application or compliance is by any government entity, a lender or any company affiliated to it);

tax” includes any present or future tax, duty, impost, levy or charge of any kind which is imposed by any state, any political sub-division of a state or any local or municipal authority (including any such imposed in connection with exchange controls), and any connected penalty, interest or fine; and

war risks” includes the risk of mines and all risks excluded by clause 29 of the International Hull Clauses (1/11/02) or clause 24 of the Institute Time Clauses (Hulls) (1/11/1995) or clause 23 of the Institute Time Clause (Hulls) (1/10/83).

 

1.3

Meaning of “month”. A period of one or more “months” ends on the day in the relevant calendar month numerically corresponding to the day of the calendar month on which the period started (“the numerically corresponding day”), but:

 

  (a)

on the Business Day following the numerically corresponding day if the numerically corresponding day is not a Business Day or, if there is no later Business Day in the same calendar month, on the Business Day preceding the numerically corresponding day; or

 

  (b)

on the last Business Day in the relevant calendar month, if the period started on the last Business Day in a calendar month or if the last calendar month of the period has no numerically corresponding day;

 

20


and “month” and “monthly” shall be construed accordingly.

 

1.4

Meaning of Subsidiary.Subsidiary” of a person means any company or entity directly or indirectly controlled by such person, and for this purpose “control” means the ownership of more than fifty per cent (50%) of the voting share capital (or equivalent rights of ownership) of such company or entity.

 

1.5

General Interpretation. In this Agreement:

 

  (a)

references to, or to a provision of, a Finance Document or any other document are references to it as amended or supplemented, whether before the date of this Agreement or otherwise;

 

  (b)

references to, or to a provision of, any law include any amendment, extension, re-enactment or replacement, whether made before the date of this Agreement or otherwise;

 

  (c)

words denoting the singular number shall include the plural and vice versa; and

 

  (d)

Clauses 1.1 to 1.5 apply unless the contrary intention appears.

 

1.6

Headings.

In interpreting a Finance Document or any provision of a Finance Document, all clause, sub-clause and other headings in that and any other Finance Document shall be entirely disregarded.

 

1.7

Bail-in

Notwithstanding any other term of any Finance Document or any other agreement, arrangement or understanding between the Parties, each Party acknowledges and accepts that any liability of any Party to any other Party under or in connection with the Finance Documents may be subject to Bail-In Action by the relevant Resolution Authority and acknowledges and accepts to be bound by the effect of:

 

  (a)

any Bail-In Action in relation to any such liability, including (without limitation):

 

  (i)

a reduction, in full or in part, in the principal amount, or outstanding amount due (including any accrued but unpaid interest) in respect of any such liability;

 

  (ii)

a conversion of all, or part of any such liability into shares or other instruments of ownership that may be issued to, or conferred on, it; and

 

  (iii)

a cancellation of any such liability; and

 

  (b)

a variation of any term of any Finance Document to the extent necessary to give effect to any Bail-In Action in relation to any such liability.

In this clause:

Article 55 BRRD” means Article 55 of Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms;

Bail-In Action” means the exercise of any Write-down and Conversion Powers;

 

21


Bail-In Legislation” means:

 

  (a)

in relation to an EEA Member Country which has implemented, or which at any time implements, Article 55 BRRD, the relevant implementing law or regulation as described in the EU Bail-In Legislation Schedule from time to time; and

 

  (b)

in relation to any state other than such an EEA Member Country or (to the extent that the United Kingdom is not such an EEA Member Country) the United Kingdom, any analogous law or regulation from time to time which requires contractual recognition of any Write-down and Conversion Powers contained in that law or regulation;

EEA Member Country” means any member state of the European Union, Iceland, Liechtenstein and Norway.

EU Bail-In Legislation Schedule” means the document described as such and published by the Loan Market Association (or any successor person) from time to time.

Resolution Authority” means any body which has authority to exercise any Write-down and Conversion Powers.

UK Bail-In Legislation” means (to the extent that the United Kingdom is not an EEA Member Country which has implemented, or implements, Article 55 BRRD) Part I of the United Kingdom Banking Act 2009 and any other law or regulation applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (otherwise than through liquidation, administration or other insolvency proceedings); and

Write-down and Conversion Powers” means:

 

  (a)

in relation to any Bail-In Legislation described in the EU Bail-In Legislation Schedule from time to time, the powers described as such in relation to that Bail-In Legislation in the EU Bail-In Legislation Schedule;

 

  (b)

in relation to any other applicable Bail-In Legislation:

 

  (i)

any powers under that Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers;

 

  (ii)

any similar or analogous powers under that Bail-In Legislation; and

 

  (c)

in relation to any UK Bail-In Legislation:

 

  (i)

any powers under that UK Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that UK Bail-In Legislation that are related to or ancillary to any of those powers; and

 

  (ii)

any similar or analogous powers under that UK Bail-In Legislation.

 

22


2

FACILITY

 

2.1

Amount of facility. Subject to the other provisions of this Agreement, the Lenders shall make available to the Borrower a loan facility in an aggregate amount not exceeding the Maximum Loan Amount for the purpose of enabling the Borrower to on-lend the same to the Shareholder to finance the acquisition of all the shares in each Guarantor.

 

2.2

Lenders’ participations in Loan. Subject to the other provisions of this Agreement, each Lender shall participate in the Loan in the proportion which, as at the Drawdown Date, its Commitment bears to the Total Commitments.

 

2.3

Purpose of Loan. The Borrower undertakes with each Creditor Party to use the Loan only for the purpose stated in the preamble to this Agreement.

 

3

POSITION OF THE LENDERS

 

3.1

Interests several. The rights of the Lenders under this Agreement are several.

 

3.2

Individual right of action. Each Lender shall be entitled to sue for any amount which has become due and payable by the Borrower to it under this Agreement without joining the Agent, the Security Trustee or any other Lender as additional parties in the proceedings.

 

3.3

Proceedings requiring Majority Lender consent. Except as provided in Clause 3.2 (Individual right of action), no Lender may commence proceedings against the Borrower or any Security Party in connection with a Finance Document without the prior consent of the Majority Lenders.

 

3.4

Obligations several. The obligations of the Lenders under this Agreement are several; and a failure of a Lender to perform its obligations under this Agreement shall not result in:

 

  (a)

the obligations of the other Lenders being increased; nor

 

  (b)

the Borrower, any Security Party, any other Lender being discharged (in whole or in part) from its obligations under any Finance Document;

and in no circumstances shall a Lender have any responsibility for a failure of another Lender to perform its obligations under this Agreement.

 

4

DRAWDOWN

 

4.1

Request for Loan. Subject to the following conditions, the Borrower may request the Loan to be made by ensuring that the Agent receives a completed Drawdown Notice not later than 11.00 a.m. (Rotterdam time) 3 Business Days prior to the intended Drawdown Date.

 

4.2

Availability. The conditions referred to in Clause 4.1 (Request for Loan) are that:

 

  (a)

the Drawdown Date has to be a Business Day during the Availability Period;

 

23


  (b)

the amount of the Loan shall not exceed the amount set out in Clause 2.1 (Amount of facility); and

 

  (c)

all applicable conditions precedent set out in Clause 9.1 (Documents, fees and no default) shall have been fulfilled.

 

4.3

Notification to Lenders of receipt of the Drawdown Notice. The Agent shall promptly notify the Lenders that it has received the Drawdown Notice and shall inform each Lender of:

 

  (a)

the amount of the Loan and the Drawdown Date;

 

  (b)

the amount of that Lender’s participation in the Loan; and

 

  (c)

the duration of the Interest Period.

 

4.4

Drawdown Notice irrevocable. The Drawdown Notice must be signed by a director or an authorised signatory of the Borrower; and once served, the Drawdown Notice cannot be revoked without the prior consent of the Agent, acting on the authority of the Majority Lenders.

 

4.5

Lenders to make available Contributions. Subject to the provisions of this Agreement, each Lender shall, on and with value on the Drawdown Date, make available to the Agent the amount due from that Lender under Clause 2.2 (Lender’s participation in Loan).

 

4.6

Disbursement of Loan. Subject to the provisions of this Agreement, the Agent shall on the Drawdown Date pay to the Borrower for on-payment to the Shareholder the amounts which the Agent receives from the Lenders under Clause 4.5 above; and that payment to the Borrower shall be made:

 

  (a)

to the account which the Borrower specifies in the Drawdown Notice; and

 

  (b)

in the like funds as the Agent received the payments from the Lenders.

 

4.7

Disbursement of Loan to third party. A payment by the Agent under Clause 4.6 (Disbursement of Loan) above shall constitute the making of the Loan and the Borrower shall thereupon become indebted, as principal and direct Security Party, to each Lender in an amount equal to that Lender’s Contribution.

 

4.8

Use of proceeds

 

  (a)

the Creditor Parties shall have no responsibility for the Borrower’s use of the proceeds of the Loan.

 

  (b)

the Borrower shall not, and shall procure that no Security Party or other Group Member or any affiliate of any of them shall, permit or authorise any other person to, directly or indirectly, use, lend, make payments of, contribute or otherwise make available, all or any part of the proceeds of the Loan or other transactions contemplated by this Agreement to fund or facilitate trade, business or other activities: (i) involving or for the benefit of any Restricted Person; or (ii) in any other manner that could result in the Borrower, any other Security Party or a Creditor Party being in breach of any Sanctions or becoming a Restricted Person.

 

4.9

Cancellation. If any part of the Commitment has not been drawn down under this Agreement at the end of the Availability Period, such undrawn portion shall, on the day following the last day of the applicable Availability Period, be permanently and irrevocably cancelled; it is hereby agreed that any undrawn portion of any part of the Total Commitments at the end of the Availability Period shall, on the day following the last day of the Availability Period, be permanently and irrevocably cancelled.

 

24


5

INTEREST

 

5.1

Payment of normal interest. Subject to the provisions of this Agreement, interest on the Loan shall be paid by the Borrower on the last day of the Interest Period.

 

5.2

Normal rate of interest. Subject to the provisions of this Agreement, the rate of interest on the Loan in respect of an Interest Period shall be the aggregate of (a) the Margin and (b) LIBOR for that Interest Period.

 

5.3

Payment of accrued interest. In the case of an Interest Period of longer than 3 months, accrued interest shall be paid every 3 months during that Interest Period and on the last day of that Interest Period.

 

5.4

Notification of Interest Periods and rates of normal interest. The Agent shall notify the Borrower and each Lender of:

 

  (a)

each rate of interest; and

 

  (b)

the duration of each Interest Period;

as soon as reasonably practicable after each is determined.

 

5.5

Obligation of Reference Banks to quote. A Reference Bank which is a Lender shall use all reasonable efforts to supply any quotation required of it for the purposes of fixing a rate of interest under this Agreement.

 

5.6

Absence of quotations by Reference Banks. If any Reference Bank fails to supply a quotation when it is required to do so, the Agent shall determine the relevant LIBOR on the basis of the quotations supplied by the other Reference Bank or Banks; but if 2 or more of the Reference Banks fail to provide a quotation, the relevant rate of interest shall be determined by the Agent.

 

5.7

Market disruption. The following provisions of this Clause 5 (Interest) apply if:

 

  (a)

no Screen Rate is available for an Interest Period and 2 or more of the Reference Banks do not before 1.00 p.m. (London time) on the Quotation Date provide quotations to the Agent in order to fix LIBOR; or

 

  (b)

at least 1 Business Day before the start of an Interest Period, Lenders having Contributions together amounting to more than 50 per cent. of the Loan (or, if no part of the Loan has been drawn, Lenders having Commitments amounting to more than 50 per cent. of the aggregate of the Total Commitments) notify the Agent that by reason of changes affecting the London Interbank Market, adequate and fair means do not exist for determining the rate of interest on the Loan (or part of it) for that Interest Period at or about 1.00 p.m. (London time) on the Quotation Date for the Interest Period; or

 

  (c)

at least 1 Business Day before the start of an Interest Period, the Agent is notified by a Lender (the “Affected Lender”) that for any reason it is unable to obtain Dollars in the London Interbank Market in order to fund its Contribution, as the case may be (or any part of it) during that Interest Period.

 

5.8

Notification of market disruption. The Agent shall promptly notify the Borrower and each of the Lenders stating the circumstances falling within Clause 5.7 (Market Disruption) which have caused its notice to be given.

 

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5.9

Suspension of drawdown. If the Agent’s notice under Clause 5.8 (Notification of market disruption) above is served before the Loan is to be made:

 

  (a)

in a case falling within Clauses 5.7(a) or (b) (Market disruption), the Lenders’ obligations to make the Loan;

 

  (b)

in a case falling within Clause 5.7(c) (Market disruption), the Affected Lender’s obligation to participate in the Loan,

(i) in the case of Clause 5.9(a), shall be made on the basis of an alternative interest rate and interest period which the Lenders or (as the case may be) the Affected Lender may select as cost of funding of the Lenders or (as the case may be) the Affected Lender, in Dollars or in any available currency of their or its Contribution plus the Margin and Clauses 5.10 (Negotiation of alternative rate of interest), 5.11 (Application of agreed alternative rate of interest), 5.12 (Alternative rate of interest in absence of agreement) and 5.13 (Notice of prepayment) shall apply; and (ii) in the case of Clause 5.9(b), shall be suspended while the circumstances referred to in the Agent’s notice continue and thereafter Clauses 5.10 (Negotiation of alternative rate of interest), 5.11 (Application of agreed alternative rate of interest), 5.12 (Alternative rate of interest in absence of agreement) and 5.13 (Notice of prepayment) shall apply.

 

5.10

Negotiation of alternative rate of interest. If the Agent serves a notice under Clause 5.8, the Borrower, the Agent and the Lenders or (as the case may be) the Affected Lender shall use reasonable endeavours to agree, within the 30 days after the date on which the Agent serves its notice under Clause 5.8 (Notification of market disruption) (the “Negotiation Period”), an alternative interest rate or (as the case may be) an alternative basis for the Lenders or (as the case may be) the Affected Lender to fund or continue to fund their or its Contribution during the Interest Period concerned.

 

5.11

Application of agreed alternative rate of interest. Any alternative interest rate or an alternative basis which is agreed during the Negotiation Period shall take effect in accordance with the terms agreed.

 

5.12

Alternative rate of interest in absence of agreement. If an alternative interest rate or alternative basis is not agreed within the Negotiation Period, and the relevant circumstances are continuing at the end of the Negotiation Period, then the Agent shall, with the agreement of each Lender or (as the case may be) the Affected Lender, set an interest period and interest rate representing the cost of funding of the Lenders or (as the case may be) the Affected Lender in Dollars or in any available currency of their or its Contribution plus the Margin; and the procedure provided for by this Clause 5.12 shall be repeated if the relevant circumstances are continuing at the end of the interest period so set by the Agent.

 

5.13

Notice of prepayment. If the Borrower does not agree with an interest rate set by the Agent under Clause 5.12 (Alternative rate of interest in absence of agreement), the Borrower may give the Agent not less than 15 Business Days’ notice of their intention to prepay at the end of the interest period set by the Agent (in the case where a notice has been served under Clause 5.8 (Notification of market disruption) after the Loan has been made available) or the Borrower may notify the Agent of their intention not to proceed with the relevant drawdown (in the case where a notice has been served under Clause 5.8 (Notification of market disruption) prior to making the Loan).

 

5.14

Prepayment; termination of Commitments. A notice under Clause 5.13 (Notice of prepayment) above shall be irrevocable; the Agent shall promptly notify the Lenders or (as the case may require) the Affected Lender of the Borrower’s notice of intended prepayment; and:

 

  (a)

on the date on which the Agent serves that notice, the Total Commitments or (as the case may require) the Commitment of the Affected Lender so far as they relate to the Loan shall be cancelled; and

 

26


  (b)

on the last Business Day of the interest period set by the Agent, the Borrower shall prepay (without premium or penalty) the Loan or, as the case may be, the Affected Lender’s Contribution, together with accrued interest thereon at the applicable rate plus the Margin.

 

5.15

Application of prepayment. The provisions of Clause 8 (Repayment and prepayment) shall apply in relation to the prepayment.

 

6

INTEREST PERIODS

 

6.1

Interest Periods. The first Interest Period shall commence on the Drawdown Date and shall terminate simultaneously with the then current Interest Period and thereafter each subsequent Interest Period shall commence on the expiry of the preceding Interest Period and each Interest Period shall be:

 

  (a)

3 months; or

 

  (b)

such other period as the Agent may, with the authorisation of all the Lenders, agree with the Borrower;

provided that in respect of an amount due to be repaid under Clause 8.1 (Repayment of Loan) on a particular Repayment Date, an Interest Period relating to the Loan shall end on that Repayment Date.

 

6.2

Non-availability of matching deposits for Interest Period selected. If, after the Borrower has selected and the Lenders have agreed an Interest Period longer than 3 months, any Lender notifies the Agent by 11.00 a.m. (Rotterdam time) on the third Business Day before the commencement of that Interest Period that it is not satisfied that deposits in Dollars for a period equal to that Interest Period will be available to it in the London Interbank Market when that Interest Period commences, that Interest Period shall be of 3 months.

 

7

DEFAULT INTEREST

 

7.1

Payment of default interest on overdue amounts. The Borrower shall pay interest in accordance with the following provisions of this Clause 7 on any amount payable by the Borrower under any Finance Document which the Agent, the Security Trustee or the other designated payee does not receive on or before the relevant date, that is:

 

  (a)

the date on which the Finance Documents provide that such amount is due for payment; or

 

  (b)

if a Finance Document provides that such amount is payable on demand, the date on which the demand is served; or

 

  (c)

if such amount has become immediately due and payable under Clause 19.4 (Acceleration of liabilities), the date on which it became immediately due and payable.

 

7.2

Default rate of interest. Interest shall accrue on an overdue amount from (and including) the relevant date until the date of actual payment (as well after as before judgment) at the rate per annum determined by the Agent to be 2 per cent. above:

 

  (a)

in the case of an overdue amount of principal, the higher of the rates set out at Clauses 7.3(a) and (b); or

 

27


  (b)

in the case of any other overdue amount, the rate set out at Clause 7.3(b) (Calculation of default rate of interest).

 

7.3

Calculation of default rate of interest. The rates referred to in Clause 7.2 (Default rate of interest) above are:

 

  (a)

the rate applicable to the overdue principal amount immediately prior to the relevant date (but only for any unexpired part of any then current Interest Period applicable to it);

 

  (b)

the Margin plus, in respect of successive periods of any duration (including at call) up to 3 months which the Agent may select from time to time:

 

  (i)

LIBOR; or

 

  (ii)

if the Agent determines that Dollar deposits for any such period are not being made available to any Reference Bank by leading banks in the London Interbank Market in the ordinary course of business, a rate from time to time determined by the Agent by reference to the cost of funds to the relevant Lenders from such other sources as the Agent (after consultation with the Reference Bank) may from time to time determine.

 

7.4

Notification of interest periods and default rates. The Agent shall promptly notify the Lenders and the Borrower of each interest rate determined by the Agent under Clause 7.3 (Calculation of default rate of interest) above and of each period selected by the Agent for the purposes of paragraph (b) of that Clause; but this shall not be taken to imply that the Borrower is liable to pay such interest only with effect from the date of the Agent’s notification.

 

7.5

Payment of accrued default interest. Subject to the other provisions of this Agreement, any interest due under this Clause shall be paid on the last day of the period by reference to which it was determined; and the payment shall be made to the Agent for the account of the Creditor Party to which the overdue amount is due.

 

7.6

Compounding of default interest. Any such interest which is not paid at the end of the period by reference to which it was determined shall thereupon be compounded.

 

7.7

Replacement of Screen Rate.

 

  (a)

An amendment or waiver which relates to the rights or obligations of the Agent, the Security Agent or a Reference Bank (each in their capacity as such) may not be effected without the consent of the Agent, the Security Agent or that Reference Bank.

 

  (b)

Subject to (a) above, if a Screen Rate Replacement Event has occurred in relation to any Screen Rate for a currency which can be selected for the Loan, any amendment or waiver which relates to:

 

  (i)

providing for the use of a Replacement Benchmark in relation to that currency in place of (or in addition to) the affected Screen Rate; and

 

  (ii)

 

  (A)

aligning any provision of any Finance Document to the use of that Replacement Benchmark;

 

  (B)

enabling that Replacement Benchmark to be used for the calculation of interest under this Agreement (including, without limitation, any consequential changes required to enable that Replacement Benchmark to be used for the purposes of this Agreement);

 

28


  (C)

implementing market conventions applicable to that Replacement Benchmark;

 

  (D)

providing for appropriate fallback (and market disruption) provisions for that Replacement Benchmark; or

 

  (E)

adjusting the pricing to reduce or eliminate, to the extent reasonably practicable, any transfer of economic value from one party to another as a result of the application of that Replacement Benchmark (and if any adjustment or method for calculating any adjustment has been formally designated, nominated or recommended by the Relevant Nominating Body, the adjustment shall be determined on the basis of that designation, nomination or recommendation),

may be made with the consent of the Agent (acting on the instructions of the Majority Lenders) and the Borrower.

In this Clause 7.7 (Replacement of Screen Rate):

Relevant Nominating Body” means any applicable central bank, regulator or other supervisory authority or a group of them, or any working group or committee sponsored or chaired by, or constituted at the request of, any of them or the Financial Stability Board.

Replacement Benchmark” means a benchmark rate which is:

 

  (a)

formally designated, nominated or recommended as the replacement for a Screen Rate by:

 

  (i)

the administrator of that Screen Rate (provided that the market or economic reality that such benchmark rate measures is the same as that measured by that Screen Rate); or

 

  (ii)

any Relevant Nominating Body,

and if replacements have, at the relevant time, been formally designated, nominated or recommended under both paragraphs, the “Replacement Benchmark” will be the replacement under paragraph (ii) above;

 

  (b)

in the opinion of the Majority Lenders and the Borrower, generally accepted in the international or any relevant domestic syndicated loan markets as the appropriate successor to a Screen Rate; or

 

  (c)

in the opinion of the Majority Lenders and the Borrower, an appropriate successor to a Screen Rate.

Screen Rate Replacement Event” means, in relation to a Screen Rate:

 

  (a)

the methodology, formula or other means of determining that Screen Rate has, in the opinion of the Majority Lenders materially changed;

 

  (b)

 

  (iii)

 

29


  (A)

the administrator of that Screen Rate or its supervisor publicly announces that such administrator is insolvent; or

 

  (B)

information is published in any order, decree, notice, petition or filing, however described, of or filed with a court, tribunal, exchange, regulatory authority or similar administrative, regulatory or judicial body which reasonably confirms that the administrator of that Screen Rate is insolvent,

provided that, in each case, at that time, there is no successor administrator to continue to provide that Screen Rate;

 

  (iv)

the administrator of that Screen Rate publicly announces that it has ceased or will cease, to provide that Screen Rate permanently or indefinitely and, at that time, there is no successor administrator to continue to provide that Screen Rate;

 

  (v)

the supervisor of the administrator of that Screen Rate publicly announces that such Screen Rate has been or will be permanently or indefinitely discontinued; or

 

  (vi)

the administrator of that Screen Rate or its supervisor announces that that Screen Rate may no longer be used; or

 

  (c)

in the opinion of the Majority Lenders and the Agent, that Screen Rate is otherwise no longer appropriate for the purposes of calculating interest under this Agreement.

 

8

REPAYMENT AND PREPAYMENT

 

8.1

Repayment of Loan. The Borrower shall repay the Loan by:

 

  (a)

three (3) consecutive three-monthly instalments, each in an amount equal to $1,000,000; and

 

  (b)

a balloon instalment in an amount equal to $20,500,000.

 

8.2

Repayment Dates. The first instalment shall be repaid on the earlier of (a) 30 March 2020 and (b) three (3) months following the Drawdown Date and the third instalment and the balloon instalment shall be repaid on the Maturity Date.

 

8.3

Final Repayment Date. On the final Repayment Date, the Borrower shall additionally pay to the Agent for the account of the Creditor Parties all other sums then accrued or owing under any Finance Document.

 

8.4

Voluntary prepayment. Subject to the following conditions, the Borrower may prepay the whole or any part of the Loan on the last day of an Interest Period.

 

8.5

Conditions for voluntary prepayment. The conditions referred to in Clause 8.4 are that:

 

  (a)

a partial prepayment shall be in an amount of $500,000 or a higher integral multiple of $500,000;

 

  (b)

the Agent has received from the Borrower at least 10 Business Days’ prior written notice specifying the date on which the prepayment is to be made;

 

30


  (c)

the Borrower has provided evidence satisfactory to the Agent that any consent required by the Borrower or any Security Party in connection with the prepayment has been obtained and remains in force, and that any requirement relevant to this Agreement which affects the Borrower or any Security Party has been complied with; and

 

  (d)

the amount of the instalment by which the Loan shall be prepaid, including the balloon instalment, under Clause 8.1(Repayment of Loan) on any such scheduled repayment dates (as reduced by any earlier operation of this Clause 8.5, Clause 8.13 (Conditions of cancellation of Commitments) and Clause 8.16 (Adjustments of scheduled repayments)) shall be reduced in inverse order of maturity, in order of maturity or pro rata at the Borrower’s option.

 

8.6

Effect of notice of prepayment. A prepayment notice may not be withdrawn or amended without the consent of the Agent, given with the authorisation of the Majority Lenders, and the amount specified in the prepayment notice shall become due and payable by the Borrower on the date for prepayment specified in the prepayment notice.

 

8.7

Notification of notice of prepayment. The Agent shall notify the Lenders promptly upon receiving a prepayment notice, and shall provide any Lender which so requests with a copy of any document delivered by the Borrower under Clause 8.5(c) (Conditions for voluntary prepayment).

 

8.8

Mandatory prepayment. The Borrower shall be obliged to prepay the portion of the Loan specified in Clause 8.9 (Amounts of mandatory prepayments):

 

  (a)

if a Ship is sold or refinanced by any bank or financial institution, on or before the date on which the sale is completed by delivery of such Ship to the relevant buyer or the funds under the refinancing arrangement are drawn down respectively; or

 

  (b)

if, after delivery (if applicable), a Ship becomes a Total Loss, on the earlier of the date falling 120 days (or such longer period as the Agent, acting on the instructions of the Majority Lenders, may agree (such consent not to be unreasonably withheld)) after the Total Loss Date and the date of receipt by the Security Trustee of the proceeds of insurance relating to such Total Loss.

 

8.9

Amounts of mandatory prepayments. The amount of the Loan to be prepaid in the circumstances contemplated in Clause 8.8 (Mandatory prepayment) above is the greatest of:

 

  (a)

the amount of the sale or Total Loss proceeds payable in respect of such sale or Total Loss or the amount which is being prepaid due to the refinancing of any part of the Loan by any bank or financial institution;

 

  (b)

an amount that, if the ratio set out in Clause 15.1 (Minimum required security cover) were applied immediately following the making of such prepayment, the Borrower would not be obliged to provide additional security or prepay part of the Loan under that Clause; and

 

  (c)

an amount so that if the ratio of (i) the aggregate of the Fair Market Value (determined as provided in Clause 15.3 (Valuation of a Ship)) of the Ships plus the net realisable value of any additional security previously provided under Clause 15 (Security cover) to (ii) the Loan is the same after such prepayment is made as it was before such prepayment is made.

 

8.10

Mandatory prepayment – Loan. The Borrower shall be obliged to prepay the whole Loan, and any undrawn part of the Total Commitment shall be cancelled upon:

 

  (a)

the circumstances referred to in Clause 23 (Illegality etc) arising, and in accordance with that Clause; or

 

  (b)

there occurs any Change of Control Event.

 

31


8.11

Amounts payable on prepayment. A prepayment shall be made together with accrued interest (and any other amount payable under Clause 21 (Indemnities) or otherwise) in respect of the amount prepaid and, if the prepayment is not made on the last day of an Interest Period applicable thereto, together with any sums payable under Clause 21.1(c) (Indemnities) but without premium or penalty.

 

8.12

Voluntary cancellation of Commitments. Subject to the following conditions, the Borrower may cancel the whole or any part of the Total Commitment.

 

8.13

Conditions for cancellation of Commitments. The conditions referred to in Clause 8.12 (Voluntary cancellation of Commitments) above are that:

 

  (a)

a partial cancellation shall be $500,000 or a higher integral multiple of $500,000;

 

  (b)

the Agent has received from the Borrower at least 10 Business Days’ prior written notice specifying the amount of the Total Commitments to be cancelled and the date on which the cancellation is to take effect; and

 

  (c)

the amount of the instalments by which the Loan shall be repaid, including the balloon instalment, under Clause 8.1 (Repayment of Loan) on any such scheduled repayment dates (as reduced by any earlier operation of this Clause 8.13, Clause 8.5 (Conditions for voluntary prepayment) and Clause 8.16 (Adjustments of scheduled repayments)) shall be reduced pro rata.

 

8.14

Effect of notice of cancellation. The service of a cancellation notice given under Clause 8.13(b) (Conditions for cancellation of Commitments) shall cause the amount of the Total Commitments specified in the notice to be permanently cancelled, following which the Commitment of each Lender shall be reduced pro rata.

 

8.15

No re-borrowing. No amount prepaid or cancelled under Clauses 8.4 (Voluntary prepayment), 8.8 (Mandatory prepayment) and 8.12 (Voluntary cancellation of Commitments) may be re-borrowed.

 

8.16

Adjustment of scheduled repayments. If the Total Commitment has been partially reduced or cancelled under this Agreement and/or any part of the Loan is prepaid (other than under Clause 8.1 (Repayment of Loan), Clause 8.4 (Voluntary prepayment) and Clause 8.12 (Voluntary cancellation of Commitments)) before any scheduled repayment date and/or the aggregate amount advanced to the Borrower is less than the Maximum Loan Amount, the amount of the instalment by which the Loan shall be repaid, including the balloon instalment, under Clause 8.1 (Repayment of Loan) on any such scheduled repayment dates (as reduced by any earlier operation of this Clause 8.16) shall be reduced pro rata unless the Agent agrees otherwise in writing.

 

9

CONDITIONS PRECEDENT

 

9.1

Documents, fees and no default. Each Lender’s obligation to contribute to the Loan is subject to the following conditions precedent:

 

  (a)

that on or before the date of execution of this Agreement, the Agent receives the documents described in Part A of Schedule 3 in form and substance satisfactory to the Agent and its lawyers;

 

  (b)

that, on or before the Drawdown Date in respect of the Loan to be made available hereunder, but prior to the making of the Loan, the Agent receives the documents described in Part B of Schedule 3 in form and substance satisfactory to it and its lawyers;

 

32


  (c)

that, on or before the Drawdown Date, the Agent receives any fees and expenses that are due and payable under Clause 20 (Expenses);

 

  (d)

that both at the date of the Drawdown Notice and the Drawdown Date:

 

  (i)

no Event of Default or Potential Event of Default has occurred and is continuing or would result from the borrowing of the Loan;

the representations and warranties in Clause 10 (Representations and Warranties) and those of the Borrower or any Security Party which are set out in the other Finance Documents would be true and not misleading if repeated on each of those dates with reference to the circumstances then existing; and

none of the circumstances contemplated by Clause 5.7 (Market disruption) has occurred and is continuing;

 

  (e)

that, if the ratio set out in Clause 15.1 (Minimum required security cover) were applied immediately following the making of the Loan, the Borrower would not be obliged to provide additional security or prepay part of the Loan under that Clause; and

 

  (f)

that the Agent has received, and found to be acceptable to it, any further opinions, consents, agreements and documents in connection with the Finance Documents which the Agent may, with the authorisation of the Majority Lenders, request by notice to the Borrower prior to the Drawdown Date.

 

9.2

Waiver of conditions precedent. If the Majority Lenders, at their discretion, permit the Loan to be borrowed before certain of the conditions referred to in Clause 9.1 (Documents, fees and no default) are satisfied, the Borrower undertakes to ensure that such conditions are satisfied within such period and on such terms as the Agent may specify in writing.

 

9.3

Conditions Subsequent. The Borrower undertakes to deliver or to cause to be delivered to the Agent on, or as soon as practicable after, the Drawdown Date the additional documents and other evidence listed in Part C (Conditions Subsequent) of Schedule 3.

 

10

REPRESENTATIONS AND WARRANTIES

 

10.1

General. The Borrower represents and warrants to each Creditor Party as follows.

 

10.2

Status.

 

  (a)

The Borrower is duly formed and validly existing under the laws of the Republic of Marshall Islands as a limited partnership; and

 

  (b)

each Guarantor is duly incorporated and validly existing under the laws of the Republic of the Marshall Islands.

 

10.3

Share capital and ownership. The legal title and ownership of all the issued shares in each Guarantor is held by the Shareholder and the ultimate beneficial ownership of all the issued shares in each Guarantor is held by the Borrower, free of any Security Interest or other claim other than any Permitted Security Interests.

 

33


10.4

Corporate power. The Borrower and each Security Party has the corporate capacity, and has taken all corporate action and obtained all consents necessary for it:

 

  (a)

to execute the Finance Documents to which the Borrower and/or the relevant Security Party is a party; and

 

  (b)

in the case of the Borrower, to make all the payments contemplated by, and to comply with, the Finance Documents to which it is a party.

 

10.5

Consents in force. All the consents referred to in Clause 10.4 (Corporate power) above remain in force and nothing has occurred which makes any of them liable to revocation.

 

10.6

Legal validity; effective Security Interests. The Finance Documents to which the Borrower or a Security Party is a party, do now or, as the case may be, will, upon execution and delivery (and, where applicable, registration as provided for in the Finance Documents):

 

  (a)

constitute that Borrower’s or that Security Party’s legal, valid and binding obligations enforceable against that Borrower or that Security Party in accordance with their respective terms; and

 

  (b)

create legal, valid and binding Security Interests enforceable in accordance with their respective terms over all the assets to which they, by their terms, relate;

subject to any relevant insolvency laws affecting creditors’ rights generally.

 

10.7

No third party Security Interests. Without limiting the generality of Clause 10.6 (Legal validity; effective Security Interests), at the time of the execution and delivery of each Finance Document:

 

  (a)

the Borrower or the relevant Security Party which is party to that Finance Document will have the right to create all the Security Interests which that Finance Document purports to create; and

 

  (b)

no third party will have any Security Interest (except for Permitted Security Interests) or any other interest, right or claim over, in or in relation to any asset to which any such Security Interest, by its terms, relates.

 

10.8

No conflicts. The execution by the Borrower and each Security Party of each Finance Document to which it is a party and (in the case of the Borrower, the Approved Manager and the Third Party Manager) the Management Agreement, and the borrowing by the Borrower of the Loan and each Security Party’s compliance with each Finance Document to which it is a party will not involve or lead to a contravention of:

 

  (a)

any law or regulation; or

 

  (b)

the constitutional documents of the Borrower or any Security Party; or

 

  (c)

any contractual or other obligation or restriction which is binding on the Borrower or any of the assets of the Borrower and the Security Parties.

 

10.9

No withholding taxes. All payments which the Borrower or any Security Party is liable to make under the Finance Documents to which it is a party may be made without deduction or withholding for or on account of any tax payable under any law of any Pertinent Jurisdiction.

 

10.10

No default. No Event of Default or Potential Event of Default has occurred and is continuing.

 

34


10.11

Information. All information which has been provided in writing by or on behalf of the Borrower or any Security Party to any Creditor Party in connection with any Finance Document satisfied the requirements of Clause 11.5 (Information provided to be accurate); all audited and unaudited accounts which have been so provided satisfied the requirements of Clause 11.7 (Form of financial statements); and there has been no material adverse change in the financial position or state of affairs of the Borrower or any Security Party from that disclosed in the latest of those accounts.

 

10.12

No litigation. No legal or administrative action involving the Borrower or any Security Party (including action relating to any alleged or actual breach of the ISM Code, the ISPS Code or the MARPOL Protocol) has been commenced or taken or, to the Borrower’s knowledge, is likely to be commenced or taken which, in either case, would be likely to have a material adverse effect on that Borrower’s or that Security Party’s financial position or profitability.

 

10.13

Validity and completeness of documents. The Management Agreement constitutes valid, binding and enforceable obligations of the relevant Owner, the Borrower, the Approved Manager and the Third Party Manager in accordance with its terms and:

 

  (a)

the copy of the Management Agreement and the SPA delivered to the Agent before the date of this Agreement is a true and complete copy; and

 

  (b)

no amendments or additions to the Management Agreement or the SPA have been agreed nor has the relevant Owner, the Borrower, the Approved Manager or the Third Party Manager waived any of their respective rights under the Management Agreement.

 

10.14

Compliance with certain undertakings. At the date of this Agreement, the Borrower and each of the Security Parties are in compliance with Clauses 11.2 (Title; negative pledge), 11.4 (No other liabilities or obligations to be incurred), 11.5 (Information provided to be accurate), 11.9 (Consents), 11.13 (Principal place of business), 11.14 (Confirmation of no default) and 11.15 (Notification of Default).

 

10.15

Taxes paid. The Borrower and each Security Party have paid all taxes applicable to, or imposed on or in relation to that Borrower, that Security Party, its business or the Ships.

 

10.16

Compliance. All requirements of the ISM Code, the ISPS Code and the MARPOL Protocol as they relate to the Borrower, the Approved Manager, the Third Party Manager and each other Security Party and the Ships have been complied with.

 

10.17

No money laundering. Without prejudice to the generality of Clause 2.3 (Purpose of Loan), in relation to the borrowing by the Borrower of the Loan, the performance and discharge of its obligations and liabilities under the Finance Documents, and the transactions and other arrangements effected or contemplated by the Finance Documents to which the Borrower is a party, the Borrower confirms (i) that it is acting for its own account, (ii) that it will use the proceeds of the Loan for its own benefit, under its full responsibility and exclusively for the purposes specified in this Agreement and (iii) that the foregoing will not involve or lead to contravention of any law, official requirement or other regulatory measure or procedure implemented to combat “money laundering” (as defined in Article 1 of the Directive 2015/849/EC of the Council of the European Communities).

 

10.18

No immunity. No Borrower or Security Party benefits from any immunity from suit.

 

10.19

Disclosure of material facts. The Borrower is not aware of any material facts or circumstances which have not already been disclosed to the Agent and which might, if disclosed to the Agent, adversely affect the decision of the Lenders to make the Loan available to the Borrower.

 

10.20

Pari Passu. The obligations of the Borrower under the Finance Documents to which it is a party rank at least pari passu with all other unsecured indebtedness of the Borrower, other than indebtedness mandatorily preferred by law.

 

35


10.21

Governing law and enforcement. The choice of law as the governing law of any Finance Document will be recognised and enforced in the jurisdiction of incorporation of the Borrower and each relevant Security Party, and any judgment obtained in England in relation to any such Finance Document will be recognised and enforced in the jurisdiction of incorporation of the Borrower and each relevant Security Party.

 

10.22

No filing or stamp tax. Under the laws of all Pertinent Jurisdiction relating to the Borrower and each relevant Security Party it is not necessary that the Finance Documents be filed, recorded or enrolled with any court or other authority in that jurisdiction (save for the Mortgages which are to be recorded in accordance with the requirements of the relevant Approved Flag State registry) or that any stamp, registration or similar tax be paid on or in relation the Finance Documents or the transactions contemplated by the Finance Documents.

 

10.23

Sanctions. No Security Party nor other Group Member nor any director, officer, agent, employee of any Security Party or other Group Member or any person acting on behalf of any Security Party or other Group Member, is a Restricted Person nor acts directly or indirectly on behalf of a Restricted Person.

 

10.24

Repetition. Each representation and warranty in this Clause 10 (Representations and Warranties) (other than this Clause 10.24) is deemed to be repeated by the Borrower by reference to the facts and circumstances then existing on each date during the Security Period.

 

11

GENERAL UNDERTAKINGS

 

11.1

General. The Borrower undertakes with each Creditor Party to comply and shall procure that each Guarantor shall also comply (as applicable), with the following provisions of this Clause 11 at all times during the Security Period, except as the Agent may, with the authorisation of the Majority Lenders, otherwise permit.

 

11.2

Title; negative pledge. The Borrower shall procure that each Guarantor will:

 

  (a)

hold the legal title to and the entire beneficial interest in the Ship owned by it, such Ship’s Insurances and Earnings, free from all Security Interests and other interests and rights of every kind, except for those created by the Finance Documents and the effect of assignments contained in the Finance Documents and except for Permitted Security Interests;

 

  (b)

not create or permit to arise any Security Interest (except for Permitted Security Interests) over any asset which is the subject matter of a Finance Document or over any of its shares;

 

  (c)

not create or permit to arise, any Security Interest (except for Permitted Security Interests) over any other asset, present or future; and

 

  (d)

procure that its liabilities under the Finance Documents to which it is a party do and will rank at least pari passu with all its other present and future unsecured liabilities, except for liabilities which are mandatorily preferred by law.

 

11.3

No disposal of assets. The Borrower shall procure that no Guarantor shall transfer, lease or otherwise dispose of:

 

  (a)

all or a substantial part of its respective assets, whether by one transaction or a number of transactions, whether related or not; or

 

36


  (b)

any debt payable to it or any other right (present, future or contingent right) to receive a payment, including any right to damages or compensation,

but paragraph (a) does not apply to any charter of a Ship to which Clause 14.3 (Repair and classification) applies.

 

11.4

No other liabilities or obligations to be incurred. The Borrower shall procure that no Guarantor shall incur any liability or obligation except liabilities and obligations:

 

  (a)

under the Finance Documents to which it is a party;

 

  (b)

reasonably incurred in the ordinary course of the Borrower’s business of owning, operating, managing and/or chartering of ships and other ship-related business; and

 

  (c)

incurred in relation to or in connection with, the financing of ships owned or to be acquired by, members of the Group.

 

11.5

Information provided to be accurate. All financial and other information which is provided in writing by or on behalf of the Borrower under or in connection with any Finance Document will be true and not misleading and will not omit any material fact or consideration.

 

11.6

Provision of financial statements. The Borrower will provide the Agent or shall procure that the Agent is provided with:

 

  (a)

as soon as possible, but in no event later than 180 days after the end of each of its Financial Years, annual audited (prepared in accordance with US GAAP by a firm of accountants acceptable to the Agent) consolidated balance sheet and profit and loss accounts of the Borrower (commencing with the Financial Year ending 31 December 2019), together with updated details (in a form acceptable to the Agent) of all off-balance sheet and time-charter hire commitments of each of the Ships and any other ship from time to time (whether before or after the date of this Agreement) owned, managed or crewed by, or chartered to, any Group Member;

 

  (b)

as soon as possible, but in no event later than 90 days after the end of each three month accounting period, commencing with the first financial quarter ending 31 March 2020, the Borrower’s unaudited consolidated balance sheet and profit and loss accounts for that 3 month period certified as to their correctness by its chief financial officer; and

 

  (c)

such further financial information about the Borrower, the Guarantors, the Ships (including, but not limited to, present and future revenues, charter arrangements, Financial Indebtedness, employment details, operating expenses and projected capital expenditure) as the Agent may require.

 

11.7

Form of financial statements. All accounts (audited and unaudited) delivered under Clause 11.6 (Provision of financial statements) above will:

 

  (a)

be prepared in accordance with all applicable laws and US GAAP;

 

  (b)

fairly represent the state of affairs of the Group at the date of those financial statements and of its profit for the period to which those financial statements relate; and

 

  (c)

fully disclose or provide for all significant liabilities of the Group.

 

37


11.8

Shareholder notices. The Borrower will send to the Agent, at the same time as they are despatched, copies of all communications which are despatched to the Borrower’s shareholders or any class of them related to matters which could be considered material in the context of this Agreement and the other Finance Documents, unless publicly announced or filed with a securities exchange.

 

11.9

Consents. The Borrower will, and shall procure that each Security Party will, maintain in force and promptly obtain or renew, and will promptly send certified copies to the Agent of, all consents required:

 

  (a)

for the Borrower and each Security Party to perform its obligations under any Finance Document to which it is a party;

 

  (b)

for the Approved Manager to perform its obligations under the Management Agreement;

 

  (c)

for the validity or enforceability of any Finance Document to which it is a party;

 

  (d)

for the Shareholder, with effect from the Actual Transfer Date relating to the shares in respect of each Guarantor, to acquire, register in its name and own the shares in the Guarantor to be owned by it under the terms of the SPA; and

 

  (e)

for the Borrower and the Approved Manager each to perform its obligations under the Management Agreement,

and the Borrower will, and shall procure that the Security Parties shall, comply with the terms of all such consents.

 

11.10

Maintenance of Security Interests. The Borrower will:

 

  (a)

at its own cost, do all that it reasonably can to ensure that each Finance Document validly creates the obligations and the Security Interests which it purports to create; and

 

  (b)

without limiting the generality of paragraph (a), at its own cost, promptly register, file, record or enrol any Finance Document with any court or authority in all Pertinent Jurisdictions, pay any stamp, registration or similar tax in all Pertinent Jurisdictions in respect of any Finance Document and give any notice or take any other step which to the best of its knowledge is or has become, or which, in the opinion of the Majority Lenders, is or has become necessary or desirable for any Finance Document to be valid, enforceable or admissible in evidence or to ensure or protect the priority of any Security Interest which any Finance Document creates.

 

11.11

Notification of litigation. The Borrower will provide the Agent with details of any legal or administrative action involving the Borrower, the Approved Manager and any other Security Party (to the best of its knowledge), the SPA, any Ship, the Management Agreement, the Earnings or the Insurances as soon as such action is instituted or it becomes apparent to the Borrower that it is likely to be instituted, unless it is clear that the legal or administrative action cannot be considered material in the context of any Finance Document.

 

11.12

Amendments to Management Agreement. The Borrower will ensure that neither the relevant Owner nor the Borrower or the Approved Manager or the Third Party Manager will, without the prior written consent of the Agent acting on the instructions of the Majority Lenders (such consent not to be unreasonably withheld), agree to any material amendment or supplement to, or waive any breach in relation to, the Management Agreement.

 

11.13

Principal place of business. The Borrower will maintain its place of business, and keep its corporate documents and records at the address stated in the definitions to this Agreement; and it will not establish, or do anything as a result of which it would be deemed to have, a place of business in any country other than the Republic of Marshall Islands.

 

38


11.14

Confirmation of no default. The Borrower will, within 2 Business Days after service by the Agent of a written request, serve on the Agent a notice which is signed by a duly authorised director of the Borrower and which states that no Event of Default or Potential Event of Default has occurred.

The Agent may serve requests under this Clause 11.14 from time to time but only if asked to do so by a Lender or Lenders having Commitments exceeding 10 per cent of the Total Commitments; and this Clause 11.14 does not affect the Borrower’s obligations under Clause 11.15 (Notification of default).

 

11.15

Notification of default. The Borrower will notify the Agent as soon as it becomes aware of the occurrence of an Event of Default or a Potential Event of Default and will keep the Agent fully up-to-date with all developments.

 

11.16

Provision of further information. The Borrower will, as soon as practicable after receiving the request, provide the Agent with any additional financial or other information relating:

 

  (a)

to it, the Security Parties, the Ships, the Earnings or the Insurances; or

 

  (b)

to any other matter relevant to, or to any provision of, a Finance Document or a Management Agreement;

which may be requested by the Agent, the Security Trustee or any Lender at any time.

 

11.17

Provision of copies and translation of documents. The Borrower will supply the Agent with a sufficient number of copies of the documents referred to above to provide a copy for each Creditor Party and, if the Agent so requires in respect of any of those documents, it will provide a certified English translation prepared by a translator approved by the Agent.

 

11.18

Sanctions. Promptly upon becoming aware of them, provide to the Agent the details of any inquiry, claim, action, suit, proceeding or investigation pursuant to Sanctions by any Sanctions Authority against a Security Party, any of the direct or indirect owners of a Security Party, any Affiliate of a Security Party, any of their joint ventures or any of their respective directors, officers, employees, agents or representatives, as well as information on what steps are being taken with regards to answer or oppose the same.

 

11.19

Money laundering. Promptly upon the Agent’s request, the Borrower will supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent in order for each Creditor Party to carry out and be satisfied with the results of all necessary “know your client” or other checks which it is required to carry out in relation to the transactions contemplated by the Finance Documents and to the identity of any parties to the Finance Documents (other than Creditor Parties) and their directors and officers.

 

11.20

“Know your customer” checks. If:

 

  (a)

the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement;

 

  (b)

any change in the status of the Borrower or any Security Party after the date of this Agreement; or

 

  (c)

a proposed assignment or transfer by a Lender of any of its rights and obligations under this Agreement; or

 

39


  (d)

any anti-money laundering or anti-terrorism financing laws and regulations applicable to the Agent or any Lender

obliges the Agent or any Lender (or, in the case of paragraph (c), any prospective new Lender) to comply with “know your customer” or similar identification procedures in circumstances where the necessary information is not already available to it, the Borrower shall promptly upon the request of the Agent or the Lender concerned supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself or on behalf of any Lender) or the Lender concerned (for itself or, in the case of the event described in paragraph (c), on behalf of any new prospective new Lender) in order for the Agent, the Lender concerned or, in the case of the event described in paragraph (c), any prospective new Lender to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

 

11.21

Class records

The Borrower shall arrange for the Agent to have access electronically to the class records of each Ship by either (i) arranging for the relevant classification society to give the Agent direct access to such class records or (ii) designating the Agent as a user or administrator of the Borrower’s electronic accounts with the relevant classification society.

 

11.22

Insurance opinion

The Borrower shall provide the Agent on request, at the Borrower’s cost, with an opinion from insurance consultants on the insurances effected or to be effected in respect of each Ship, confirming that each Ship is insured on terms approved by the Agent or, if such insurance opinion has been obtained by the Agent, shall reimburse the Agent for the cost of such opinion.

 

11.23

Sanctions

The Borrower shall:

 

  (a)

not be, and shall procure that each other Group Member and each Affiliate of any of them and any director, officer, agent, employee or person acting on behalf of the foregoing is not, a Restricted Person and does not act directly or indirectly on behalf of a Restricted Person;

 

  (b)

not, and shall procure that no other Group Member or any Affiliate of any of them shall, use any revenue or benefit derived from any activity or dealing with a Restricted Person in discharging any obligation due or owing to the Creditor Parties;

 

  (c)

procure that no proceeds from any activity or dealing with a Restricted Person are credited to any bank account held with any Creditor Party in its name or in the name of any other member of the Group or any Affiliate of any of them;

 

  (d)

and shall procure that each other Group Member and any Affiliate of any of them will, to the extent permitted by law, promptly upon becoming aware of them, supply to the Creditor Parties details of any claim, action, suit, proceedings or investigation against it with respect to Sanctions by any Sanctions Authority; and

 

  (e)

not, and shall procure that no other member of the Group or any Affiliate of any of them will, directly or indirectly, make available any proceeds of the Loan to fund or facilitate trade, business or other activities (i) involving or for the benefit of any Restricted Person or (ii) in any other manner that could result in either Borrower or a Creditor Party being in breach of any Sanctions or becoming a Restricted Person, or permit or authorise any other person to do either of (i) or (ii) above.

 

40


11.24

Anti-bribery

The Borrower shall ensure that neither they nor any of their respective Affiliates, officers, directors, employees or agents acting on its behalf will offer, give, insist on, receive or solicit any illegal payment or improper advantage to influence the action of any person in connection with any of its business.

 

11.25

Money Laundering

The Borrower shall:

 

  (a)

provide the Agent with information, certificates and any documents required by the Agent to ensure compliance with any law, official requirement or other regulatory measure or procedure implemented to combat money laundering; and

 

  (b)

notify the Agent as soon as it becomes aware of any matters evidencing that a breach of any law, official requirement or other regulatory measure or procedure implemented to combat money laundering may or is about to occur or that the person(s) who have or will receive the commercial benefit of this Agreement have changed after the date of this Agreement.

 

12

CORPORATE UNDERTAKINGS

 

12.1

General. The Borrower also undertakes with each Creditor Party to comply and shall procure that each Guarantor will also comply (as applicable) with the following provisions of this Clause 12 at all times during the Security Period except as the Agent may, with the authorisation of the Majority Lenders, otherwise consent.

 

12.2

Maintenance of status. The Borrower will maintain and shall procure that each Guarantor will also maintain its separate corporate existence under the laws of the Republic of Marshall Islands.

 

12.3

Negative undertakings. The Borrower shall procure that no Guarantor will, and in respect of (b) to (d) below, the Borrower will not:

 

  (a)

carry on any business other than the owning, operating, managing and/or chartering of ships and other ship-related business;

 

  (b)

pay any dividend or make any other form of distribution or effect any form of redemption, purchase or return of share capital unless:

 

  (i)

the Borrower is not in breach of any of their respective obligations under this Agreement and the other Finance Documents and no Event of Default or Potential Event of Default has occurred; and

 

  (ii)

the Borrower is in compliance with Clause 12.4 and will, following any such payment of dividend or other form of distribution or redemption, purchase or return of share capital, be in compliance with Clause 12.4;

 

  (c)

provide any form of credit or financial assistance to:

 

  (i)

a person who is directly or indirectly interested in the Borrower’s share or loan capital; or

 

  (ii)

any company in or with which such a person is directly or indirectly interested or connected;

 

41


or enter into any transaction with or involving such a person or company on terms which are, in any respect, less favourable to the Borrower than those which it could obtain in a bargain made at arms’ length;

 

  (d)

without the prior written consent of the Agent, acting on the instructions of the Majority Lenders (such consent not to be unreasonably withheld), enter into any form of amalgamation, merger or de-merger, name change or any form of reconstruction or reorganisation, which would (in the case of the Borrower) give rise to a Change of Control Event; and

 

  (e)

in relation to the Earnings of the Ship owned by it, open or maintain any account with any bank or financial institution except accounts with the Account Bank, the Agent or the Security Trustee for the purposes of the Finance Documents.

 

12.4

Financial covenants of the Borrower. At all times during the Security Period, by reference to the Latest Accounts, the Borrower ensure that:

 

  (a)

at no time shall the Liquidity of the Group be less than $500,000 multiplied by the number of vessels owned by any member of the Group;

 

  (b)

the Net Debt divided by the Total Assets (adjusted for market values of vessels calculated in accordance with Clause 15.3 (Valuation of Ship)) less cash (which shall have the meaning given thereto under US GAAP meaning both restricted and freely available cash) shall be at all times less than 75%;

 

  (c)

the ratio of EBITDA to Interest Expense shall at all times be at least 2 to 1; and

 

  (d)

the Net Worth shall at all times be equal to or more than USD135,000,000.

 

12.5

Compliance Check. Compliance with the undertakings contained in Clause 12.4 (Financial covenants) shall be determined by reference to (i) the unaudited consolidated accounts for each consecutive quarter period in each Financial Year of the Borrower and commencing with the first financial quarter of ending 31 March, 2020 and (ii) the audited consolidated accounts for each Financial Year of the Borrower and commencing with the Financial Year ending 31 December 2019, each delivered to the Agent pursuant to Clause 11.6 (Provision of financial statements) of this Agreement. Unless and until the Agent (acting with the authorisation of the Majority Lenders) otherwise agrees in writing, at the same time as it delivers those consolidated accounts (audited and unaudited) for each consecutive quarter and Financial Year, the Borrower shall deliver to the Agent a Compliance Certificate, signed by the chief financial officer of the Borrower, evidencing calculations and compliance with the financial covenants.

 

12.6

Change in accounting expressions and policies. If, by reason of change in format or US GAAP or other relevant accounting policies, the expressions appearing in any accounts and financial statements referred to in Clause 11.6 (Provision of financial statements) alter from those in the accounts and financial statements for the Group for the Financial Year ended 31 December 2019, the relevant definitions contained in Clause 1.1 (Definitions) and the provisions of Clause 12.4 (Financial covenants) shall be deemed modified in such manner as the Agent, acting with the authorisation of the Majority Lenders, shall require to take account of such different expressions but otherwise to maintain in all respects the substance of those provisions.

 

12.7

Minimum Liquidity. The Borrower shall ensure and procure that the Guarantors ensure, that the aggregate balance standing to the credit of the Earnings Accounts shall at all times be no less than $3,750,000.

 

42


13

INSURANCE

 

13.1

General. The Borrower also undertakes with each Creditor Party to comply with the following provisions of this Clause 13, and ensure that the Guarantors comply with the same, at all times until the last day of the Security Period except as the Agent may, with the authority of the Majority Lenders, otherwise permit.

 

13.2

Maintenance of obligatory insurances. The Borrower shall procure that each Guarantor shall ensure that the Ship owned by it is insured at its expense against:

 

  (a)

fire and such other risks as are usually contained within a standard marine insurance policy and/or increased value and disbursements policy covering the hull and machinery of such Ship;

 

  (b)

war risks;

 

  (c)

protection and indemnity risks; and

 

  (d)

any other risks against which the Security Trustee considers, having regard to practices and other circumstances prevailing at the relevant time, it would in the opinion of the Security Trustee be reasonable for the Guarantor to insure and which are specified by the Security Trustee by notice to the Borrower and the relevant Guarantor.

 

13.3

Terms of obligatory insurances. The Borrower shall procure that each Guarantor shall effect such insurances in respect of its Ship:

 

  (a)

in Dollars and/or such currencies as agreed with the Security Trustee;

 

  (b)

in the case as specified in Clause 13.2 (Maintenance of obligatory insurances), cover is to be on an agreed value basis in an amount at least the greater of (i) such amount as when added to the insured value of the other Ships is 120 per cent. of the Loan and (ii) the Fair Market Value of that Ship;

 

  (c)

in the case of oil pollution liability risks, for an aggregate amount equal to the highest level of cover from time to time available under a standard protection and indemnity entry with an international group protection and indemnity club (currently $1,000,000,000 in relation to any one event);

 

  (d)

in relation to protection and indemnity risks in respect of each Ship’s gross tonnage;

 

  (e)

on approved terms; and

 

  (f)

through approved brokers and with approved insurance companies and/or underwriters or, in the case of war risks and protection and indemnity risks, in approved war risks and protection and indemnity risks associations.

 

13.4

Further protections for the Creditor Parties. In addition to the terms set out in Clause 13.3 (Terms of obligatory insurances), the Borrower shall procure that the obligatory insurances shall:

 

  (a)

whenever the Security Trustee requires, name (or be amended to name) the Security Trustee as an additional named assured for its rights and interests, warranted no operational interest and with full waiver of rights of subrogation against the Security Trustee, but without the Security Trustee thereby being liable to pay (but having the right to pay) premiums, calls or other assessments in respect of such insurance;

 

  (b)

name the Security Trustee as loss payee with such directions for payment as the Security Trustee may specify;

 

43


  (c)

provide that all payments by or on behalf of the insurers under the obligatory insurances to the Security Trustee shall be made without set-off, counterclaim or deductions or condition whatsoever;

 

  (d)

provide that such obligatory insurances shall be primary without right of contribution from other insurances which may be carried by the Security Trustee or any other Creditor Party; and

 

  (e)

provide that the Security Trustee may make proof of loss if the Borrower or the Guarantor fails to do so.

 

13.5

Renewal of obligatory insurances. The Borrower shall procure that each Guarantor shall:

 

  (a)

before the expiry of any obligatory insurance effected by it:

 

  (i)

notify the Security Trustee of the brokers (or other insurers) and any protection and indemnity or war risks association through or with whom that Security Party proposes to renew that obligatory insurance and of the proposed terms of renewal; and

 

  (ii)

obtain the Security Trustee’s approval to the matters referred to in paragraph (i);

 

  (b)

as soon as practicable but in any event before the expiry of any obligatory insurance effected by it, renew that obligatory insurance in accordance with the Security Trustee’s approval pursuant to paragraph (a); and

 

  (c)

procure that the approved brokers and/or the war risks and protection and indemnity associations with which such a renewal is effected shall promptly after the renewal notify the Security Trustee in writing of the terms and conditions of the renewal.

 

13.6

Copies of policies; letters of undertaking. The Borrower shall procure that each Guarantor shall ensure that all approved brokers provide the Security Trustee as soon as practicable with pro forma copies of all policies relating to the obligatory insurances which have been effected or renewed and of a letter or letters or undertaking in a form required by the Security Trustee and that:

 

  (a)

they will have endorsed on each policy, immediately upon issue, a loss payable clause and a notice of assignment complying with the provisions of Clause 13.4 (Further protections for the Creditor Parties);

 

  (b)

they will hold such policies, and the benefit of such insurances, to the order of the Security Trustee in accordance with the said loss payable clause;

 

  (c)

they will advise the Security Trustee immediately of any material change to the terms of the obligatory insurances;

 

  (d)

they will notify the Security Trustee, before the expiry of the obligatory insurances, in the event of their not having received notice of renewal instructions from the relevant Guarantor or its agents and, in the event of their receiving instructions to renew, they will promptly notify the Security Trustee of the terms of the instructions; and

 

  (e)

they will not set off against any sum recoverable in respect of a claim relating to the Ship owned by the relevant Guarantor under such obligatory insurances any premiums or other amounts due to them or any other person whether in respect of any of the Ships or otherwise, they waive any lien on the policies, or any sums received under them, which they might have in respect of such premiums or other amounts, and they will not cancel such obligatory insurances by reason of non-payment of such premiums or other amounts, and will arrange for a separate policy to be issued in respect of the Ships forthwith upon being so requested by the Security Trustee.

 

44


13.7

Copies of certificates of entry. The Borrower shall procure that each Guarantor shall ensure that for any protection and indemnity and/or war risks associations in which a Ship is entered the Security Trustee will be provided with:

 

  (a)

a certified copy of the certificate of entry for that Ship;

 

  (b)

a letter or letters of undertaking in such form as may be required by the Security Trustee;

 

  (c)

where required to be issued under the terms of insurance/indemnity provided by the relevant Guarantor’s protection and indemnity association, a certified copy of each United States of America voyage quarterly declaration (or similar document or documents) made by the relevant Guarantor in relation to the Ship owned by it in accordance with the requirements of such protection and indemnity association; and

 

  (d)

a certified copy of each certificate of financial responsibility for pollution by oil or other Environmentally Sensitive Material issued by the relevant certifying authority in relation to the relevant Ship.

 

13.8

Deposit of original policies. The Borrower shall procure that each Guarantor shall ensure that all policies issued and relating to obligatory insurances are deposited by the relevant Guarantor with the approved intermediaries or other approved parties through which the insurances are effected or renewed.

 

13.9

Payment of premiums. The Borrower shall procure that each Guarantor shall punctually pay all premiums or other sums payable in respect of the obligatory insurances terms and conditions, and produce all relevant receipts when so required by the Security Trustee.

 

13.10

Guarantees. The Borrower shall procure that each Guarantor shall ensure that any guarantees required by a protection and indemnity or war risks association are promptly issued and remain in full force and effect.

 

13.11

Compliance with terms of insurances. The Borrower shall procure that each Guarantor shall not do or omit to do (or permit to be done or not to be done) any act or thing which would or might render any obligatory insurance invalid, void, voidable or unenforceable or render any sum payable under an obligatory insurance repayable in whole or in part; and, in particular:

 

  (a)

the relevant Guarantor shall take all necessary action and comply with all requirements which may from time to time be applicable to the obligatory insurances, and (without limiting the obligation contained in Clause 13.6(c) (Copies of policies; letters of undertaking)) ensure that the obligatory insurances are not made subject to any exclusions or qualifications to which the Security Trustee has not given its prior approval;

 

  (b)

a Guarantor shall not make any changes relating to the classification or classification society or manager or operator of the Ship owned by it approved by the underwriters of the obligatory insurances;

 

  (c)

the relevant Guarantor shall, make (and promptly supply copies to the Agent of) all quarterly or other voyage declarations which may be required by the protection and indemnity risks association in which its Ship is entered to maintain cover for trading to the United States of America and Exclusive Economic Zone (as defined in the United States Oil Pollution Act 1990 or any other applicable legislation); and

 

  (d)

a Guarantor shall not employ its Ship, nor allow such Ship to be employed, otherwise than in conformity with the terms and conditions of the obligatory insurances, without first obtaining the consent of the insurers and complying with any requirements (as to extra premium or otherwise) which the insurers specify.

 

45


13.12

Alteration to terms of insurances. The Borrower shall procure that each Guarantor shall not make or agree to any alteration to the terms of any obligatory insurance nor waive any right relating to any obligatory insurance.

 

13.13

Settlement of claims. The Borrower shall procure that no Guarantor shall settle, compromise or abandon any claim under any obligatory insurance for Total Loss or for a Major Casualty, and shall do all things necessary and provide all documents, evidence and information to enable the Security Trustee to collect or recover any moneys which at any time become payable in respect of the obligatory insurances.

 

13.14

Provision of copies of communications. The Borrower shall and shall procure that each Guarantor shall, promptly upon request by the Agent provide the Security Trustee, copies of all written communications which are material in the context of the Borrower’s and the Guarantor’s ’s obligations under the Finance Documents between it and:

 

  (a)

the approved brokers or insurers; and

 

  (b)

the approved protection and indemnity and/or war risks associations; and

 

  (c)

the approved insurance companies and/or underwriters, which relate directly or indirectly to:

 

  (i)

the relevant Guarantor’s obligations relating to the obligatory insurances including, without limitation, all requisite declarations and payments of additional premiums or calls; and

 

  (ii)

any credit arrangements made between the relevant Guarantor and any of the persons referred to in paragraphs (a) or (b) relating wholly or partly to the effecting or maintenance of the obligatory insurances.

 

13.15

Provision of information. In addition, the Borrower shall and shall procure that each Guarantor shall, promptly provide the Security Trustee (or any persons which it may designate) with any information which the Security Trustee (or any such designated person) requests for the purpose of:

 

  (a)

obtaining or preparing any report from an independent marine insurance broker or consultant as to the adequacy of the obligatory insurances effected or proposed to be effected; and/or

 

  (b)

effecting, maintaining or renewing any such insurances as are referred to in Clause 13.16 (Mortgagee’s interest insurance) or dealing with or considering any matters relating to any such insurances;

and the Borrower shall, forthwith upon demand, indemnify the Security Trustee in respect of all fees and other expenses incurred by or for the account of the Security Trustee in connection with any such report as is referred to in paragraph (a) above.

 

13.16

Mortgagee’s interest insurance. The Security Trustee (acting on behalf of all the Lenders) shall be entitled, at the Borrower’s cost, from time to time to effect, maintain and renew a mortgagee’s interest and pollution risks insurance policy (including additional perils (pollution) cover) in an amount equal to at least 120% of the Loan such terms, through such insurers and generally in such manner as the Security Trustee may from time to time consider appropriate.

 

46


13.17

Review of insurance requirements. The Majority Lenders shall be entitled to review the requirements of this Clause 13 (Insurance) from time to time in order to take account of any changes in circumstances after the date of this Agreement which are, in the opinion of the Majority Lenders, significant and capable of affecting the Borrower or an Owner or any Ship and its or their insurance (including, without limitation, changes in the availability or the cost of insurance coverage or the risks to which an Owner may be subject), and may appoint insurance consultants in relation to this review at the cost of the Borrower.

 

13.18

Modification of insurance requirements. The Security Trustee shall notify the Borrower and the relevant Owner of any proposed modification under Clause 13.17 (Review of insurance requirements) to the requirements of this Clause 13 which the Majority Lenders reasonably consider appropriate in the circumstances, and such modification shall take effect on and from the date it is notified in writing to the Borrower as an amendment to this Clause 13 and shall bind the Borrower and the relevant Owner accordingly.

 

13.19

Compliance with mortgagee’s instructions. The Security Trustee shall be entitled (without prejudice to or limitation of any other rights which it may have or acquire under any Finance Document) to require a Ship to remain at any safe port or to proceed to and remain at any safe port designated by the Security Trustee until the relevant Guarantor implements any amendments to the terms of the obligatory insurances and any operational changes required as a result of a notice served under Clause 13.18 (Modification of insurance requirements).

 

13.20

Assured and Co-Assured. If persons other than the relevant Guarantor and/or Security Trustee are named as assureds or co-assureds in the insurance policy of the relevant Ship, the Borrower shall procure that these persons assign their insurances to the Security Trustee upon such terms and conditions as the Security Trustee may require.

 

14

SHIP’S COVENANTS

 

14.1

General. The Borrower also undertakes with each Creditor Party to procure that each Guarantor comply in relation to its Ship, with, the following provisions of this Clause 14 at all times until the last day of the Security Period except as the Agent, with the authority of the Majority Lenders, may otherwise permit (such permission not to be unreasonably withheld in the case of Clause 14.13(b) (Restriction on chartering, appointment of managers etc.).

 

14.2

Ship’s name and registration. The Borrower shall procure that each Guarantor shall keep the Ship owned by it registered in its name under an Approved Flag free of any Security Interest other than a Permitted Security Interest; and shall not do, omit to do or allow to be done anything as a result of which such registration might be cancelled or imperilled; and shall not, without the prior written consent of the Security Trustee change the name or port of registry of the Ship owned by it.

 

14.3

Repair and classification. The Borrower shall procure that each Guarantor shall keep the Ship owned by it in a good and safe condition and state of repair:

 

  (a)

consistent with first-class ship ownership and management practice;

 

  (b)

so as to maintain that Ship’s class with Lloyds Register of Shipping or Germanischer Lloyd AG (or such other first-class classification society which is a member of IACS acceptable to the Agent, such acceptance not to be unreasonably withheld or delayed) free of overdue recommendations and conditions affecting that Ship’s class that have not been complied with in accordance with their terms; and

 

47


  (c)

so as to comply with all laws and regulations applicable to vessels registered at ports in the relevant Approved Flag State or to vessels trading to any jurisdiction to which that Ship may trade from time to time, including but not limited to the ISM Code, the ISPS Code and the MARPOL Protocol.

 

14.4

Classification society undertaking. The Borrower shall procure that each Guarantor shall instruct the classification society referred to in Clause 14.3(b) (Repair and classification) (and procure that the classification society undertakes with the Security Trustee):

 

  (a)

to send to the Security Trustee, following receipt of a written request from the Security Trustee, certified true copies of all original class records held by the classification society in relation to the Ship owned by the relevant Guarantor;

 

  (b)

to allow the Security Trustee (or its agents), at any time and from time to time, to inspect the original class and related records of that Guarantor and its Ship at the offices of the classification society and to take copies of them;

 

  (c)

to notify the Security Trustee immediately in writing if the classification society:

 

  (i)

receives notification from the relevant Guarantor or any person that the Ship’s classification society is to be changed; or

 

  (ii)

becomes aware of any facts or matters which may result in or have resulted in a change, suspension, discontinuance, withdrawal or expiry of the Ship’s class under the rules or terms and conditions of the relevant Guarantor’s or its Ship’s membership of the classification society;

 

  (d)

following receipt of a written request from the Security Trustee:

 

  (i)

to confirm that the relevant Guarantor is not in default of any of its contractual obligations or liabilities to the classification society and, without limiting the foregoing, that it has paid in full all fees or other charges due and payable to the classification society; or

 

  (ii)

if the relevant Guarantor is in default of any of its contractual obligations or liabilities to the classification society, to specify to the Security Trustee in reasonable detail the facts and circumstances of such default, the consequences thereof, and any remedy period agreed or allowed by the classification society.

 

14.5

Modification. The Borrower shall procure that no Guarantor shall make any modification or repairs to, or replacement of, the Ship owned by it or equipment installed on its Ship which would or might materially alter the structure, type or performance characteristics of that Ship or materially reduce its value.

 

14.6

Removal of parts. The Borrower shall procure that no Guarantor shall remove any material part of the Ship owned by it, or any item of equipment installed on, the Ship unless the part or item so removed is forthwith replaced by a suitable part or item which is in the same condition as or better condition than the part or item removed, is free from any Security Interest or any right in favour of any person other than the Security Trustee and becomes on installation on the Ship the property of that Guarantor and subject to the security constituted by the Mortgage, relative to the Ship Provided that a Guarantor may install equipment owned by a third party if the equipment can be removed without any material risk of damage to the Ship.

 

14.7

Surveys. The Borrower shall procure that each Guarantor shall submit the Ship owned by it regularly to all periodical or other surveys which may be required for classification purposes and, if so required by the Security Trustee, provide the Security Trustee, with copies of all survey reports.

 

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14.8

Inspection. The Borrower shall procure that each Guarantor shall permit and facilitate the Security Trustee (by surveyors or other persons appointed by it for that purpose) to board the Ship owned by it at all reasonable times to inspect its condition or to satisfy themselves about proposed or executed repairs (at the Borrower’s or the relevant Guarantor’s cost) and shall afford all proper facilities for such inspections, at the cost of the Borrower or the Guarantor for one such inspection per Ship in each calendar year and otherwise at the Agent’s cost.

 

14.9

Prevention of and release from arrest. The Borrower shall procure that each Guarantor shall promptly discharge:

 

  (a)

all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against its Ship, its Earnings or its Insurances;

 

  (b)

all taxes, dues and other amounts charged in respect of its Ship, its Earnings or its Insurances; and

 

  (c)

all other outgoings whatsoever in respect of its Ship, the Earnings or the Insurances;

and, forthwith upon receiving notice of the arrest of a Ship, or of its detention in exercise or purported exercise of any lien or claim, the Borrower shall procure that the relevant Guarantor shall procure its release by providing bail or otherwise as the circumstances may require.

 

14.10

Compliance with laws etc. The Borrower shall procure that each Guarantor shall:

 

  (a)

comply, or procure compliance with the ISM Code, the ISPS code, the MARPOL Protocol and Environmental Laws and all other laws or regulations relating to the Ship owned by it, its ownership, operation and management or to the business that Guarantor;

 

  (b)

comply, and will use best endeavours to procure that each Security Party and each other Group Member will, comply in all respect with all Sanctions;

 

  (c)

not employ the Ship owned by it nor allow its employment in any manner contrary to any law or regulation in any relevant jurisdiction including but not limited to the ISM Code, the ISPS code and the MARPOL Protocol; and

 

  (d)

in the event of hostilities in any part of the world (whether war is declared or not), not cause or permit its Ship to enter or trade to any zone which is declared a war zone by any government or by its Ship’s war risks insurers unless the prior written consent of the Security Trustee has been given and the relevant Guarantor has (at its expense) effected any special, additional or modified insurance cover which the Security Trustee may require.

 

14.11

Provision of information. The Borrower shall procure that each Guarantor shall promptly provide the Security Trustee with any information which it requests regarding:

 

  (a)

the Ship owned by it, its employment, position and engagements;

 

  (b)

the Earnings and payments and amounts due to its Ship’s master and crew;

 

  (c)

any expenses incurred, or likely to be incurred, in connection with the operation, maintenance or repair of its Ship and any payments made in respect of that Ship;

 

  (d)

any towages and salvages;

 

49


  (e)

that Guarantor’s, the Approved Manager’s, the Third Party Manager’s (if applicable) or its Ship’s compliance with the ISM Code, the ISPS Code and the MARPOL Protocol;

and, upon the Security Trustee’s request, provide copies of any current charter relating to any Ship, of any current charter guarantee and copies of the relevant Guarantor’s or the Approved Manager’s or the Third Party’s Manager Document of Compliance.

 

14.12

Notification of certain events. The Borrower shall procure that each Guarantor shall immediately notify the Security Trustee by fax, confirmed forthwith by letter, of:

 

  (a)

any casualty which is or is likely to be or to become a Major Casualty;

 

  (b)

any occurrence as a result of which the Ship has become or is, by the passing of time or otherwise, likely to become a Total Loss;

 

  (c)

any requirement or recommendation made by any insurer or classification society or by any competent authority which is not complied with within the relevant specified time limit or, in the absence of such time limit, promptly;

 

  (d)

any arrest or detention of a Ship, any exercise or purported exercise of any lien on a Ship or its Earnings or any requisition of that Ship for hire;

 

  (e)

any Environmental Claim made against a Guarantor or the Approved Manager or in connection with any Ship or any Environmental Incident;

 

  (f)

any claim for breach of the ISM Code, the ISPS Code or the MARPOL Protocol being made against an Owner or the Approved Manager or the Third Party Manager or otherwise in connection with any Ship; or

 

  (g)

any other matter, event or incident, actual or threatened, the effect of which will or could lead to the ISM Code, the ISPS Code or the MARPOL Protocol not being complied with;

and the Borrower shall and shall procure that each Guarantor shall keep the Security Trustee advised in writing on a regular basis and in such detail as the Security Trustee shall require of the Borrower’s, the relevant Owner’s, the Approved Manager’s, the Third Party Manager’s or any other person’s response to any of those events or matters.

 

14.13

Restrictions on chartering, appointment of managers etc. The Borrower shall procure that no relevant Guarantor shall:

 

  (a)

let the Ship owned by it on demise charter for any period;

 

  (b)

enter into any time or consecutive voyage charter in respect of the Ship owned by it for a term which exceeds, or which by virtue of any optional extensions may exceed, 12 months;

 

  (c)

enter into any charter in relation to its Ship under which more than 2 months’ hire (or the equivalent) is payable in advance;

 

  (d)

charter its Ship otherwise than on bona fide arm’s length terms at the time when that Ship is fixed;

 

50


  (e)

appoint a manager of its Ship other than the entities advised to the Agent at the date of this Agreement as the Approved Manager or Third Party Manager of each Ship, provided that the Creditor Parties consent to the change of management of each ship to either entity being the Approved Manager and the Third Party Manager in respect of each Ship at the date of this Agreement on the condition that such Approved Manager or Third Party Manager deliver to the Agent, to the Agent’s satisfaction (i) a certified true copy of the Management Agreement, (ii) a Manager’s Undertaking in the Agreed Form and (iii) in relation to such Approved Manager or Third Party Manager, items 1, 2, 3, 4, 6, 7, 8 and 9 included in Schedule 3, Part A of this Agreement and items 2(f) and 3(b) included in Schedule 3, Part B of this Agreement;

 

  (f)

agree to any alteration to the material terms of the Management Agreement relating to its Ship or to any other terms of the Approved Manager’s and the Third Party Manager’s appointment;

 

  (g)

de-activate or lay up its Ship for more than 30 days; or

 

  (h)

put its Ship into the possession of any person for the purpose of work being done upon it in an amount exceeding or likely to exceed $500,000 (or the equivalent in any other currency), which amount shall exclude dry-docking costs, unless the Agent (acting with authorisation of the Majority Lenders) has given prior approval in writing.

 

14.14

Notice of Mortgage. The Borrower shall procure that each Guarantor shall keep the relevant Mortgage registered against the Ship owned by it as a valid first priority mortgage, carry on board that Ship a certified copy of the relevant Mortgage and place and maintain in a conspicuous place in the navigation room and the Master’s cabin of that Ship a framed printed notice stating that that Ship is mortgaged by the relevant Guarantor to the Security Trustee; and

 

14.15

Sharing of Earnings. The Borrower shall not, and shall procure that no Owner shall, enter into any agreement or arrangement for the sharing of any Earnings other than any time or voyage charters with profit sharing clauses.

 

14.16

ISPS Code. The Borrower shall procure that each Guarantor shall comply with the ISPS Code and in particular, without limitation, shall:

 

  (a)

procure that its Ship and the company responsible for such Ship’s compliance with the ISPS Code comply with the ISPS Code; and

 

  (b)

maintain for its Ship an ISSC; and

 

  (c)

notify the Agent immediately in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC.

 

14.17

Charters etc. The Borrower shall (i) deliver to the Agent a certified copy of each Extended Employment Contract upon its execution, (ii) forthwith on the Agent’s request procure that the relevant Guarantor executes (a) a Charter Assignment in respect thereof and (b) any notice of assignment required in connection therewith and use reasonable commercial efforts to procure the acknowledgement of any such notice of assignment by the relevant charterer (provided that any failure to procure the same shall not constitute an Event of Default) and (iii) pay all legal and other costs incurred by the Agent in connection with any such Charter Assignments forthwith following the Agent’s demand.

 

14.18

Inventory of Hazardous Material. The Borrower shall procure that (if not already in place) immediately following completion of its next dry-docking but in no event later than the date required by the applicable regulation, each Ship shall hold at all times during the Facility Period an Inventory of Hazardous Material or equivalent document,

where “Inventory of Hazardous Material” means a statement of compliance issued by the relevant classification society which includes a list of any and all materials known to be potentially hazardous utilised in the construction of a Ship also referred to as “List of Hazardous Materials”.

 

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14.19

Sustainable Vessel dismantling. The Borrower confirms that as long as it is in a lending relationship with ABN AMRO BANK N.V. it will ensure that any Ship controlled by it or sold to an intermediary with the intention of being scrapped, is recycled at a recycling yard which conducts its recycling business in a socially and environmentally responsible manner, in accordance with the provisions of The Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, 2009 and/or the EU Ship Recycling Regulation,

where “EU Ship Recycling Regulation” means Regulation (EU) No 1257/2013 of the European Parliament and of the Council of 20 November 2013 on ship recycling and amending Regulation (EC) No 1013/2006 and Directive 2009/16/EC (Text with EEA relevance).

 

14.20

Inspection Reports. The Borrower shall provide to the Agent, upon the Agent’s request from time to time, an inspection report in respect of each Ship which is subject to a Mortgage, in a form and substance, and from a marine surveyor, acceptable to the Agent.

 

15

SECURITY COVER

 

15.1

Minimum required security cover. Clause 15.2 (Provision of additional security; prepayment) applies if the Agent notifies the Borrower that:

 

  (a)

the aggregate of the Fair Market Values (determined as provided in Clause 15.3 (Valuation of Ship)) of the Ships subject to a Mortgage; plus

 

  (b)

the net realisable value of any additional security previously provided under this Clause 15;

is below 140% of the Loan.

 

15.2

Provision of additional security; prepayment. If the Agent serves a notice on the Borrower under Clause 15.1 (Minimum required security cover), the Borrower shall, within 1 month after the date on which the Agent’s notice is served, either:

 

  (a)

provide, or ensure that a third party provides, additional security which, in the opinion of the Majority Lenders, has a net realisable value at least equal to the shortfall and is documented in such terms as the Agent may, with the authorisation of the Majority Lenders, approve or require; or

 

  (b)

prepay and/or cancel, in accordance with Clause 8 (Repayment and Prepayment), such part (at least) of the Loan as will eliminate the shortfall.

 

15.3

Valuation of Ship. The Fair Market Value of a Ship at any date is that shown as the average of valuations prepared by two Approved Brokers selected and appointed by the Agent:

 

  (a)

as at a date not more than 30 days previously;

 

  (b)

with or without physical inspection of that Ship (as the Agent may require); and

 

  (c)

on the basis of a sale for prompt delivery for cash on normal arm’s length commercial terms as between a willing seller and a willing buyer, free of any existing charter or other contract of employment.

 

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Valuations shall be obtained by the Borrower and addressed to the Agent:

 

  (a)

prior to (but dated no more than 30 days prior to) the Drawdown Date;

 

  (b)

at six-monthly intervals commencing on 31 March 2020; and

 

  (c)

(in addition to (a) and (b) above) at any other time as the Agent shall require (in its absolute discretion).

 

15.4

Value of additional vessel security. The net realisable value of any additional security which is provided under Clause 15.2 (Provision of additional security; prepayment) and which consists of a Security Interest over a vessel shall be that shown by a valuation complying with the requirements of Clause 15.3 (Valuation of Ship).

 

15.5

Valuations binding. Any valuation under Clause 15.2 (Provision of additional security; prepayment), 15.3 (Valuation of Ship) or 15.4 (Value of additional vessel security) shall be binding and conclusive as regards the Borrower, as shall be any valuation which the Majority Lenders make of any additional security which does not consist of or include a Security Interest.

 

15.6

Provision of information. The Borrower shall promptly provide the Agent and any Approved Broker or expert acting under Clause 15.3 (Valuation of Ship) or 15.4 (Value of additional vessel security) with any information which the Agent or the Approved Broker or expert may request for the purposes of the valuation; and, if the Borrower fails to provide the information by the date specified in the request, the valuation may be made on any basis and assumptions which the Approved Broker or the Majority Lenders (or the expert appointed by them) consider prudent.

 

15.7

Payment of valuation expenses. Without prejudice to the generality of the Borrower’s obligations under Clauses 20 (Expenses) and 21 (Indemnities), the Borrower shall, on demand, pay the Agent the amount of the fees and expenses of any Approved Broker instructed under this Clause 15.

 

16

PAYMENTS AND CALCULATIONS

 

16.1

Currency and method of payments. All payments to be made by the Lenders or by the Borrower under a Finance Document shall be made to the Agent or to the Security Trustee, in the case of an amount payable to it:

 

  (a)

by not later than 11.00 a.m. (New York City time) on the due date;

 

  (b)

in same day Dollar funds settled through the New York Clearing House Interbank Payments System (or in such other Dollar funds and/or settled in such other manner as the Agent shall specify as being customary at the time for the settlement of international transactions of the type contemplated by this Agreement);

 

  (c)

in the case of an amount payable by a Lender to the Agent or by the Borrower to the Agent or any Lender, to such account as the Agent may from time to time notify to the Borrower and the other Creditor Parties for this purpose; and

 

  (d)

in the case of an amount payable to the Security Trustee, to such account as it may from time to time notify to the Borrower and the other Creditor Parties.

 

16.2

Payment on non-Business Day. If any payment by the Borrower or a Security Party under a Finance Document would otherwise fall due on a day which is not a Business Day:

 

  (a)

the due date shall be extended to the next succeeding Business Day; or

 

  (b)

if the next succeeding Business Day falls in the next calendar month, the due date shall be brought forward to the immediately preceding Business Day;

 

53


  (c)

and interest shall be payable during any extension under paragraph (a) at the rate payable on the original due date.

 

16.3

Basis for calculation of periodic payments. All interest and commitment fee and guarantee fee and any other payments under any Finance Document which are of an annual or periodic nature shall accrue from day to day and shall be calculated on the basis of the actual number of days elapsed and a 360 day year.

 

16.4

Distribution of payments to Creditor Parties. Subject to Clauses 16.5 (Permitted deductions by Agent), 16.6 (Agent only obliged to pay when monies received) and 16.7 (Refund to Agent of monies not received):

 

  (a)

any amount received by the Agent under a Finance Document for distribution or remittance to a Creditor Party shall be made available by the Agent to that Creditor Party by payment, with funds having the same value as the funds received, to such account as the Creditor Party may have notified to the Agent not less than 3 Business Days previously; and

 

  (b)

amounts to be applied in satisfying amounts of a particular category which are due to the Lenders generally shall be distributed by the Agent to each Lender pro rata to the amount in that category which is due to it.

 

16.5

Permitted deductions by Agent. Notwithstanding any other provision of this Agreement or any other Finance Document, the Agent may, before making an amount available to a Lender, deduct and withhold from that amount any sum which is then due and payable to the Agent from that Lender under any Finance Document or any sum which the Agent is then entitled under any Finance Document to require that Lender to pay on demand.

 

16.6

Agent only obliged to pay when monies received. Notwithstanding any other provision of this Agreement or any other Finance Document, the Agent shall not be obliged to make available to the Borrower, any Lender any sum which the Agent is expecting to receive for remittance or distribution to that Borrower, to that Lender until the Agent has satisfied itself that it has received that sum.

 

16.7

Refund to Agent of monies not received. If and to the extent that the Agent makes available a sum to the Borrower or a Lender, without first having received that sum, the Borrower or (as the case may be) the Lender concerned shall, on demand:

 

  (a)

refund the sum in full to the Agent; and

 

  (b)

pay to the Agent the amount (as certified by the Agent) which will indemnify the Agent against any funding or other loss, liability or expense incurred by the Agent as a result of making the sum available before receiving it.

 

16.8

Agent may assume receipt. Clause 16.7 (Refund to Agent of monies not received) shall not affect any claim which the Agent has under the law of restitution, and applies irrespective of whether the Agent had any form of notice that it had not received the sum which it made available.

 

16.9

Creditor Party accounts. Each Creditor Party shall maintain accounts showing the amounts owing to it by the Borrower and each Security Party under the Finance Documents and all payments in respect of those amounts made by the Borrower and any Security Party.

 

16.10

Agent’s memorandum account. The Agent shall maintain a memorandum account showing the amounts advanced by the Lenders and all other sums owing to each Creditor Party from the Borrower and each Security Party under the Finance Documents and all payments in respect of those amounts made by the Borrower and any Security Party.

 

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16.11

Accounts prima facie evidence. If any accounts maintained under Clauses 16.9 (Creditor Party Accounts) and 16.10 (Agent’s memorandum account) show an amount to be owing by the Borrower or a Security Party to a Creditor Party, those accounts shall be prima facie evidence that that amount is owing to that Creditor Party in the absence of manifest error.

 

16.12

FATCA Information

 

  (a)

Subject to subclause (c) below, each party to a Finance Document shall, within ten Business Days of a reasonable request by another party to the Finance Documents:

 

  (i)

confirm to that other party whether it is a FATCA Exempt Party or is not a FATCA Exempt Party;

 

  (ii)

supply to the requesting party such forms, documentation and other information relating to its status under FATCA as the requesting party reasonably requests for the purposes of such requesting party’s compliance with FATCA; and

 

  (iii)

supply to the requesting party such forms, documentation and other information relating to its status as the requesting party reasonably requests for the purposes of the requesting party’s compliance with any other law, regulation, or exchange of information regime.

 

  (b)

If a party to any Finance Document confirms to another party pursuant to subclause (a) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not, or has ceased to be a FATCA Exempt Party, that party shall notify that other party and the Agent reasonably promptly.

 

  (c)

Subclause (a) above shall not oblige any Creditor Party to do anything, and Subclause (a) (iii) above shall not oblige any other party to a Finance Document to do anything, which would or might in its reasonable opinion constitute a breach of any law or regulation, any policy of that Creditor Party, any fiduciary duty or any duty of confidentiality.

 

  (d)

If a party to any Finance Document fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with subclause (a)(i) or (ii) above (including, where paragraph (c) above applies), then such party shall be treated for the purposes of the Finance Documents (and payments under them) as if it is not a FATCA Exempt Party until such time as the party in question provides the requested confirmation, forms, documentation or other information.

 

16.13

FATCA Deduction

 

  (a)

A party to any Finance Document may make any FATCA Deduction it is required to make by FATCA, and any payment required in connection with that FATCA Deduction, and no party to any Finance Document shall be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction.

 

  (b)

A party to any Finance Document shall promptly, upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate or the basis of such FATCA Deduction) notify the party to whom it is making the payment and, in addition, shall notify the Borrower, the Agent and the other Creditor Parties.

 

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17

APPLICATION OF RECEIPTS

 

17.1

Normal order of application. Except as any Finance Document may otherwise provide, any sums which are received or recovered by any Creditor Party under or by virtue of any Finance Document shall be applied:

 

  (a)

FIRST: in or towards payment pro rata of any unpaid fees, costs and expenses of the Agent and the Security Trustee and the other Creditor Parties under the Finance Documents;

 

  (b)

SECONDLY: in or towards payment pro rata of any accrued interest due but unpaid under this Agreement;

 

  (c)

THIRDLY: in or towards payment pro rata of any principal due but unpaid under this Agreement;

 

  (d)

FOURTHLY: in or towards payment pro rata of any other amounts due but unpaid under any Finance Document;

 

  (e)

FIFTHLY: in retention of an amount equal to any amount not then due and payable under any Finance Document but which the Lender, by notice to the Borrower and the Security Parties, states in its opinion will or may become due and payable in the future and, upon those amounts becoming due and payable, in or towards satisfaction of them in accordance with the provisions of Clause 17.1 (Normal order of application) (a), (b), (c) and (d); and

 

  (f)

SIXTHLY: any surplus shall be paid to the Borrower or to any other person entitled to it.

 

17.2

Variation of order of application. The Agent may, with the authorisation of the Lenders, by notice to the Borrower, the Security Parties and the other Creditor Parties provide for a different manner of application from that set out in Clause 17.1 (Normal order of application) either as regards a specified sum or sums or as regards sums in a specified category or categories.

 

17.3

Notice of variation of order of application. The Agent may give notices under Clause 17.2 (Variation of order of application) from time to time; and such a notice may be stated to apply not only to sums which may be received or recovered in the future, but also to any sum which has been received or recovered on or after the third Business Day before the date on which the notice is served.

 

17.4

Appropriation rights overridden. This Clause 17 and any notice which the Agent gives under Clause 17.2 (Variation of order of application) shall override any right of appropriation possessed, and any appropriation made, by the Borrower or any Security Party.

 

18

APPLICATION OF EARNINGS, LOCATION OF ACCOUNTS

 

18.1

Payment of Earnings. The Borrower undertakes with each Creditor Party to ensure that, throughout the Security Period (subject only to the provisions of the Mortgages and the General Assignments), all the Earnings in respect of a Ship are paid to the Earnings Account applicable to the Guarantor which is the owner of such Ship;

 

18.2

Application of Earnings. The Borrower undertakes with each Creditor Party that money from time to time credited to, or for the time being standing to the credit of, an Earnings Account shall, unless and until an Event of Default or Potential Event of Default shall have occurred (whereupon the provisions of Clause 17.1 (Normal order of application) shall be and become applicable), be available for application in the following manner:

 

  (a)

FIRSTLY: in or towards meeting the costs, fees and expenses payable by the Borrower under the Finance Documents;

 

56


  (b)

SECONDLY: in or towards making the transfers to the Retention Account pursuant to Clause 18.3 (Monthly retentions); and

 

  (c)

THIRDLY: in or towards meeting the costs and expenses from time to time incurred by or on behalf of the Borrower or the Guarantors in connection with the operation of the Ships.

 

18.3

Monthly retentions. The Borrower undertakes with each Creditor Party to ensure that, throughout the Security Period on the same day in each month, there is transferred to the Retention Account:

 

  (a)

one-third of the repayment instalment in respect of the Loan falling due under Clause 8.1 (Payment of Earnings) on the next Repayment Date; and

 

  (b)

the relevant fraction of the aggregate amount of interest on the Loan which is payable on the next due date for payment of interest.

Where:

relevant fraction” is a fraction of which the numerator is 1 and the denominator the number of months comprised in the then current Interest Period (or, if current Interest Period ends after the next date for payment of interest under this Agreement, the number of months from the later of the commencement of the current Interest Period or the last due date for payment of interest to the next date for payment of interest under this Agreement).

 

18.4

Shortfall in Earnings. If the aggregate Earnings received in the Earnings Accounts are insufficient in any month for the required amount to be transferred to any Retention Account under Clause 18.3 (Monthly retentions), the Borrower shall make up the amount of the insufficiency by payment in Dollars to the Retention Account.

 

18.5

Application of retentions. Until an Event of Default or a Potential Event of Default occurs, the Account Bank shall on each Repayment Date and on each due date for the payment of interest under this Agreement pay to the Agent, for the Agent to distribute to the Lenders in accordance with Clause 16.4 so much of the then balance on the Retention Account as equals:

 

  (a)

the repayment instalment due on that Repayment Date; or, as the case may be,

 

  (b)

the amount of interest payable on that interest payment date

in discharge of the Borrower’s liability for that repayment instalment or that interest.

 

18.6

Location of accounts. The Borrower shall promptly:

 

  (a)

comply, and procure that the Guarantors s comply, with any requirement of the Agent as to the location or re-location of the Earnings Accounts, the Retention Account or any of them, provided that those accounts must at all times be with the Account Bank; and

 

  (b)

execute, and procure that the Guarantors execute, any documents which the Agent specifies to create or maintain in favour of the Security Trustee a Security Interest over the Earnings Accounts and the Retention Account.

 

18.7

Borrower’s obligations unaffected. The provisions of this Clause 18 do not affect:

 

  (a)

the liability of the Borrower to make payments of principal and interest on the due dates; or

 

  (b)

any other liability or obligation of the Borrower or any Security Party under any Finance Document.

 

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19

EVENTS OF DEFAULT

 

19.1

Events of Default. An Event of Default occurs if:

 

  (a)

any Security Party fails to pay any sum payable by it under any of the Finance Documents at the time, in the currency and in the manner stipulated in the Finance Documents (and so that, for this purpose, sums payable (i) under clauses 5.1 and 8.1 shall be treated as having been paid at the stipulated time if (aa) received by the Agent within two (2) days of the dates therein referred to and (bb) such delay in receipt is caused by administrative or other delays or errors within the banking system and (ii) on demand shall be treated as having been paid at the stipulated time if paid within three (3) Business Days of demand); or

 

  (b)

any breach occurs of Clause 9.3 (Conditions Subsequent), 11.2 (Title; negative pledge), 11.3 (No disposal of assets), 11.24 (Sanctions), 12.2 (Maintenance of status), 12.3 (Negative Undertakings), 12.4 (Financial covenants) or 15.2 (Provision of additional security; prepayment) of this Agreement; or

 

  (c)

any breach by the Borrower or any Security Party occurs of any provision of a Finance Document (other than a breach covered by paragraphs (a) or (b)) which, in the reasonable opinion of the Majority Lenders, is capable of remedy, and such default continues unremedied 15 days after written notice from the Agent requesting action to remedy the same; or

 

  (d)

(subject to any applicable grace period specified in any Finance Document) any breach by the Borrower or any Security Party occurs of any provision of a Finance Document (other than a breach falling within paragraphs (a), (b) or (c)); or

 

  (e)

any representation, warranty or statement made or repeated by, or by an officer of, the Borrower or a Security Party in a Finance Document or in the Drawdown Notice or any other notice or document relating to a Finance Document is untrue or misleading in a material respect when it is made or repeated; or

 

  (f)

any of the following occurs in relation to any Financial Indebtedness (exceeding $10,000,000 in respect of the Borrower and $1,000,000 for all other Relevant Persons) of a Relevant Person:

 

  (i)

any Financial Indebtedness of a Relevant Person is not paid when due; or

 

  (ii)

any Financial Indebtedness of a Relevant Person becomes due and payable prior capable of being declared due and payable prior to its stated maturity date as a consequence of any event of default; or

 

  (iii)

any overdraft, loan, note issuance, acceptance credit, letter of credit, guarantee, foreign exchange or other facility, or any swap or other derivative contract or transaction, relating to any Financial Indebtedness of a Relevant Person ceases to be available or becomes capable of being terminated as a result of any event of default, or cash cover is required, or becomes capable of being required, in respect of such a facility as a result of any event of default; or

 

  (iv)

an event of default howsoever described (or any event which with the giving of notice, lapse of time, determination of materiality or fulfillment of any other applicable condition or any combination of the foregoing would constitute such an event of default) occurs under any document relating to Financial Indebtedness of a Relevant Person; or

 

58


  (v)

any Security Interest securing any Financial Indebtedness of a Relevant Person becomes enforceable; or

 

  (g)

any of the following occurs in relation to a Relevant Person:

 

  (i)

a Relevant Person becomes, in the reasonable opinion of the Majority Lenders, unable to pay its debts as they fall due; or

 

  (ii)

any assets of a Relevant Person are subject to any form of execution, attachment, arrest, sequestration or distress, or any form of freezing order, in respect of a sum of, or sums aggregating, $10,000,000 or more in respect of the Borrower and $1,000,000 or more for all other Relevant Persons or the equivalent in another currency and, in respect of a Relevant Person other than a Security Party, the same is not lifted within 30 days; or

 

  (iii)

any administrative or other receiver is appointed over any asset of a Relevant Person; or

 

  (iv)

an administrator is appointed (whether by the court or otherwise) in respect of a Relevant Person; or

 

  (v)

any formal declaration of bankruptcy or any formal statement to the effect that a Relevant Person is insolvent or likely to become insolvent is made by a Relevant Person or by the directors of a Relevant Person or, in any proceedings, by a lawyer acting for a Relevant Person; or

 

  (vi)

a provisional liquidator is appointed in respect of a Relevant Person, a winding up order is made in relation to a Relevant Person or a winding up resolution is passed by a Relevant Person; or

 

  (vii)

a resolution is passed, and administration notice is given or filed, an application or petition to a court is made or presented or any other step is taken by (a) a Relevant Person, (b) the members or directors of a Relevant Person, (c) a holder of Security Interests which together relate to all or substantially all of the assets of a Relevant Person, or (d) a government minister or public or regulatory authority of a Pertinent Jurisdiction for or with a view to the winding up of that or another Relevant Person or the appointment of a provisional liquidator or administrator in respect of that or another Relevant Person, or that or another Relevant Person ceasing or suspending business operations or payments to creditors, save that this paragraph does not apply to a fully solvent winding up of a Relevant Person other than the Borrower or a Guarantor which is, or is to be, effected for the purposes of an amalgamation or reconstruction previously approved by the Agent and effected not later than three months after the commencement of the winding up; or

 

  (viii)

an administration notice is given or filed, an application or petition to a court is made or presented or any other step is taken by a creditor of a Relevant Person (other than a holder of Security Interests which together relate to all or substantially all of the assets of a Relevant Person) for the winding up of a Relevant Person or the appointment of a provisional liquidator or administrator in respect of a Relevant Person in any Pertinent Jurisdiction, unless the proposed winding up, appointment of a provisional liquidator or administration is being contested in good faith, on substantial grounds and not with a view to some other insolvency law procedure being implemented instead and either (a) the application or petition is dismissed

 

59


  or withdrawn within 30 days of being made or presented, or (b) within 30 days of the administration notice being given or filed, or the other relevant steps being taken, other action is taken which will ensure that there be no administration and (in both cases (a) or (b)) the Relevant Person will continue to carry on business in the ordinary way and without being the subject of any actual, interim or pending insolvency law procedure; or

 

  (ix)

a Relevant Person or its directors take any steps (whether by making or presenting an application or petition to a court, or submitting or presenting a document setting out a proposal or proposed terms, or otherwise) with a view to obtaining, in relation to that or another Relevant Person, any form of moratorium, suspension or deferral of payments, reorganisation of debt (or certain debt or arrangement with all or a substantial proportion (by number or value) of creditors or of any class of them or any such moratorium, suspension or deferral of payments, reorganisation or arrangement is effected by court order, by the filing of documents with a court, by means of a contract or in any other way at all; or

 

  (x)

any meeting of the members or directors, or of any committee of the board or senior management, of a Relevant Person is held or summoned for the purpose of considering a resolution or proposal to authorise or take any action of a type described in paragraphs (iv) to (ix) or a step preparatory to such action, or (with or without such a meeting) the members, directors or such a committee resolve or agree that such an action or step should be taken or should be taken if certain conditions materialise or fail to materialise; or

 

  (xi)

in a Pertinent Jurisdiction other than England, any event occurs, any proceedings are opened or commenced or any step is taken which, in the opinion of the Agent is similar to any of the foregoing; or

 

  (h)

any Security Party is in breach of or fails to observe any law, requirement, measure or procedure implemented to combat “money laundering” as defined in Article 1 of the Directive 2015/849/EC of the Council of the European Communities; or

 

  (i)

the Borrower or any Security Party ceases or suspends carrying on its business or a part of its business which, in the opinion of the Majority Lenders, is material in the context of this Agreement or the other Finance Documents; or

 

  (j)

it becomes unlawful or impossible:

 

  (i)

for the Borrower or any Security Party to discharge any liability under a Finance Document or to comply with any other obligation which the Majority Lenders consider material under a Finance Document; or

 

  (ii)

for the Agent, the Security Trustee or the Lenders to exercise or enforce any right under, or to enforce any Security Interest created by, a Finance Document; or

 

  (k)

any consent necessary to enable a Guarantor to own, operate or charter its Ship or to enable the Borrower or any Security Party to comply with any provision which the Majority Lenders consider material of a Finance Document, the SPA or the Management Agreement (as applicable) is not granted, expires without being renewed, is revoked or becomes liable to revocation or any condition of such a consent is not fulfilled; or

 

  (l)

it appears to the Majority Lenders that, after the date of this Agreement and without their prior consent a change has occurred in the legal or beneficial ownership of any of the shares in a Guarantor; or

 

60


  (m)

any provision which the Majority Lenders acting reasonably consider material of a Finance Document proves to have been or becomes invalid or unenforceable, or a Security Interest created by a Finance Document proves to have been or becomes invalid or unenforceable or such a Security Interest proves to have ranked after, or loses its priority to, another Security Interest or any other third party claim; or

 

  (n)

the security constituted by a Finance Document is in any way imperilled or in jeopardy and if, in the opinion of the Majority Lenders, capable of remedy, such event or circumstance continues unremedied 14 days after written notice from the Agent to the Borrower or relevant Security Party requesting action to remedy the same; or

 

  (o)

any other event occurs or any other circumstances arise or develop including, without limitation:

 

  (i)

a change in the financial position, state of affairs or prospects of any Relevant Person; or

 

  (ii)

any accident or other event involving any Ship or another vessel owned, chartered or operated by a Relevant Person; or

 

  (iii)

any litigation or proceedings are commenced or threatened against a Relevant Person,

in the light of which the Majority Lenders reasonably consider that:

 

  (iv)

there is a significant risk that the Borrower or any Security Party is, or will later become, unable to discharge its liabilities under the Finance Documents as they fall due; or

 

  (v)

such event represents a material adverse change to the business of the Borrower or such Security Party.

 

19.2

Actions following an Event of Default.

On, or at any time after, the occurrence of an Event of Default:

 

  (a)

the Agent may, and if so instructed by the Majority Lenders, the Agent shall:

 

  (i)

serve on the Borrower a notice stating that all or part of the Commitments and of the other obligations of each Lender to the Borrower under this Agreement are cancelled; and/or

 

  (ii)

serve on the Borrower a notice stating that all or part of the Loan together with accrued interest and all other amounts accrued or owing under this Agreement are immediately due and payable or are due and payable on demand; and/or

 

  (iii)

take any other action which, as a result of the Event of Default or any notice served under paragraph (i) or (ii), the Agent and/or the Lenders are entitled to take under any Finance Document or any applicable law; and/or

 

  (b)

the Security Trustee may, by notice to the Borrower, exercise any or all of its rights, remedies, powers or discretions under the Finance Documents.

 

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19.3

Termination of Commitments. On the service of a notice under Clause 19.2(a)(i) (Actions following an Event of Default), the Commitments and all other obligations of each Lender to the Borrower under this Agreement shall be cancelled.

 

19.4

Acceleration of liabilities. On the service of a notice under Clause 19.2(a)19.2(a)(ii) (Actions following an Event of Default), the Loan, all accrued interest and all other amounts accrued or owing from the Borrower or any Security Party under this Agreement and every other Finance Document shall become immediately due and payable or, as the case may be, payable on demand.

 

19.5

Multiple notices; action without notice. The Agent may serve notices under Clause 19.219.2(a)(i) (Actions following an Event of Default), or 19.2(a)(ii) simultaneously or on different dates and it and/or the Security Trustee may take any action referred to in Clause 19.2 (Actions following an Event of Default), if no such notice is served or simultaneously with or at any time after the service of both or either of such notices.

 

19.6

Notification of Creditor Parties and Security Parties. The Agent shall send to each Creditor Party and each Security Party a copy or the text of any notice which the Agent serves on the Borrower under Clause 19.2 (Actions following an Event of Default); but the notice shall become effective when it is served on the Borrower, and no failure or delay by the Agent to send a copy or the text of the notice to any other person shall invalidate the notice or provide the Borrower or any Security Party with any form of claim or defence.

 

19.7

Lenders’ rights unimpaired. Nothing in this Clause shall be taken to impair or restrict the exercise of any right given to individual Lenders under a Finance Document or the general law; and, in particular, this Clause is without prejudice to Clause 3.1 (Interests several).

 

19.8

Exclusion of Creditor Party liability. No Creditor Party, and no receiver or manager appointed by the Security Trustee, shall have any liability to the Borrower or a Security Party:

 

  (a)

for any loss caused by an exercise of rights under, or enforcement of a Security Interest created by, a Finance Document or by any failure or delay to exercise such a right or to enforce such a Security Interest; or

 

  (b)

as mortgagee in possession or otherwise, for any income or principal amount which might have been produced by or realised from any asset comprised in such a Security Interest or for any reduction (however caused) in the value of such an asset;

except that this does not exempt a Creditor Party or a receiver or manager from liability for losses shown to have been directly and mainly caused by the dishonesty or the wilful misconduct of such Creditor Party’s own officers and employees or (as the case may be) such receiver’s or manager’s own partners or employees.

 

19.9

Relevant Persons. In this Clause 19 a “Relevant Person” means the Borrower, a Guarantor and any other Security Party (other than an Approved Manager that is not a Subsidiary of the Borrower) and any of their Subsidiaries.

 

19.10

Interpretation. In Clause 19.119.1(f) (Events of Default) references to an event of default or a termination event include any event, howsoever described, which is similar to an event of default in a facility agreement or a termination event in a finance lease; and in Clause 19.1(g) (Events of Default) petition” includes an application.

 

20

EXPENSES

 

20.1

Upfront fee. The Borrower shall pay to the Agent for the account of the Lenders pro rata in accordance with their Commitments, on the Drawdown Date, a non-refundable upfront fee of $100,000.

 

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20.2

Costs of negotiation, preparation etc. The Borrower shall pay to the Agent on its demand the amount of all expenses incurred by the Agent or the Security Trustee in connection with the negotiation, preparation, execution or registration of any Finance Document or any related document or with any transaction contemplated by a Finance Document or a related document (including without limitation, any travel expenses).

 

20.3

Costs of variations, amendments, enforcement etc. The Borrower shall pay to the Agent, on the Agent’s demand, for the account of the Creditor Party concerned the amount of all expenses incurred by a Creditor Party in connection with:

 

  (a)

any amendment or supplement to a Finance Document, or any proposal for such an amendment to be made;

 

  (b)

any consent or waiver by the Lenders, the Majority Lenders or the Creditor Party concerned under or in connection with a Finance Document, or any request for such a consent or waiver;

 

  (c)

the valuation of any security provided or offered under Clause 15 (Security Cover) or any other matter relating to such security; or

 

  (d)

any step taken by the Creditor Party concerned with a view to the protection, exercise or enforcement of any right or Security Interest created by a Finance Document or for any similar purpose (including without limitation any litigation cost).

There shall be recoverable under paragraph (d) the full amount of all legal expenses, whether or not such as would be allowed under rules of court or any taxation or other procedure carried out under such rules.

 

20.4

Documentary taxes. The Borrower shall promptly pay any tax payable on or by reference to any Finance Document, and shall, on the Agent’s demand, fully indemnify each Creditor Party against any claims, expenses, liabilities and losses resulting from any failure or delay by the Borrower to pay such a tax.

 

20.5

Certification of amounts. A notice which is signed by 2 officers of a Creditor Party, which states that a specified amount, or aggregate amount, is due to that Creditor Party under this Clause 20 and which indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or aggregate amount, is due shall be prima facie evidence that the amount, or aggregate amount, is due.

 

21

INDEMNITIES

 

21.1

Indemnities regarding borrowing and repayment of Loan. The Borrower shall fully indemnify each Creditor Party on the Agent’s demand and the Security Trustee on its demand in respect of all claims, expenses, liabilities and losses which are made or brought against or incurred by that Creditor Party, or which that Creditor Party reasonably and with due diligence estimates that it will incur, as a result of or in connection with:

 

  (a)

the Loan not being borrowed on the date specified in the Drawdown Notice for any reason other than a default by the Lender claiming the indemnity;

 

  (b)

the receipt or recovery of all or any part of the Loan or an overdue sum otherwise than on the last day of an Interest Period or other relevant period;

 

  (c)

any failure (for whatever reason) by the Borrower to make payment of any amount due under a Finance Document on the due date or, if so payable, on demand (after giving credit for any default interest paid by the Borrower on the amount concerned under Clause 7 (Default Interest));

 

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  (d)

the occurrence and/or continuance of an Event of Default or a Potential Event of Default and/or the acceleration of repayment of the Loan or any part of it under Clause 19 (Events of Default); and

 

  (e)

any tax (other than tax on its overall net income) for which a Creditor Party is liable in connection with any amount paid or payable to that Creditor Party (whether for its own account or otherwise) under any Finance Document.

 

21.2

Breakage costs. Without limiting its generality, Clause 21.1 (Indemnities regarding borrowing and repayment of Loan) covers any claim, expense, liability or loss, including a loss of a prospective profit, incurred by a Lender:

 

  (a)

in liquidating or employing deposits from third parties acquired or arranged to fund or maintain all or any part of its Contribution and/or any overdue amount (or an aggregate amount which includes its Contribution or any overdue amount); and

 

  (b)

in terminating, or otherwise in connection with, any interest and/or currency swap or any other transaction entered into (whether with another legal entity or with another office or department of the Lender concerned) to hedge any exposure arising under this Agreement or that part which the Lender concerned determines is fairly attributable to this Agreement of the amount of the liabilities, expenses or losses (including losses of prospective profits) incurred by it in terminating, or otherwise in connection with, a number of transactions of which this Agreement is one.

 

21.3

Miscellaneous indemnities. The Borrower shall fully indemnify each Creditor Party severally on their respective demands in respect of all claims, expenses, liabilities and losses which may be made or brought against or incurred by a Creditor Party, in any country, as a result of or in connection with:

 

  (a)

any action taken, or omitted or neglected to be taken, under or in connection with any Finance Document by the Agent, the Security Trustee or any other Creditor Party or by any receiver appointed under a Finance Document; or

 

  (b)

any other Pertinent Matter;

other than claims, expenses, liabilities and losses which are shown to have been directly and mainly caused by the dishonesty or wilful misconduct of the officers or employees of the Creditor Party concerned.

Without prejudice to its generality, this Clause 21.3 covers any claims, expenses, liabilities and losses which arise, or are asserted, under or in connection with any law relating to safety at sea, the ISM Code, the ISPS Code, the MARPOL Protocol or any Environmental Law.

 

21.4

Currency indemnity. If any sum due from the Borrower or any Security Party to a Creditor Party under a Finance Document or under any order or judgment relating to a Finance Document has to be converted from the currency in which the Finance Document provided for the sum to be paid (the “Contractual Currency”) into another currency (the “Payment Currency”) for the purpose of:

 

  (a)

making or lodging any claim or proof against the Borrower or any Security Party, whether in its liquidation, any arrangement involving it or otherwise; or

 

  (b)

obtaining an order or judgment from any court or other tribunal; or

 

64


  (c)

enforcing any such order or judgment;

the Borrower shall indemnify the Creditor Party concerned against the loss arising when the amount of the payment actually received by that Creditor Party is converted at the available rate of exchange into the Contractual Currency.

In this Clause 21.4 the “available rate of exchange” means the rate at which the Creditor Party concerned is able at the opening of business (Rotterdam time) on the Business Day after it receives the sum concerned to purchase the Contractual Currency with the Payment Currency.

This Clause 21.4 creates a separate liability of the Borrower which is distinct from their other liabilities under the Finance Documents and which shall not be merged in any judgment or order relating to those other liabilities.

 

21.5

Certification of amounts. A notice which is signed by 2 officers of a Creditor Party, which states that a specified amount, or aggregate amount, is due to that Creditor Party under this Clause 21 and which indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or aggregate amount, is due shall be prima facie evidence that the amount, or aggregate amount, is due.

 

21.6

Sums deemed due to a Lender. For the purposes of this Clause 21, a sum payable by the Borrower to the Agent or the Security Trustee for distribution to a Lender shall be treated as a sum due to that Lender.

 

22

NO SET-OFF OR TAX DEDUCTION

 

22.1

No deductions. All amounts due from the Borrower under a Finance Document shall be paid:

 

  (a)

without any form of set-off, cross-claim or condition; and

 

  (b)

free and clear of any tax deduction except a tax deduction which the Borrower is required by law to make.

 

22.2

Grossing-up for taxes. If the Borrower is required by law to make a tax deduction from any payment (other than a FATCA Deduction):

 

  (a)

the Borrower shall notify the Agent as soon as it becomes aware of the requirement;

 

  (b)

the Borrower shall pay the tax deducted to the appropriate taxation authority promptly, and in any event before any fine or penalty arises;

 

  (c)

the amount due in respect of the payment shall be increased by the amount necessary to ensure that each Creditor Party receives and retains (free from any liability relating to the tax deduction) a net amount which, after the tax deduction, is equal to the full amount which it would otherwise have received.

 

22.3

Evidence of payment of taxes. Within 1 month after making any tax deduction, the Borrower concerned shall deliver to the Agent documentary evidence satisfactory to the Agent that the tax had been paid to the appropriate taxation authority.

 

22.4

Exclusion of tax on overall net income. In this Clause 22 “tax deduction” means any deduction or withholding for or on account of any present or future tax except tax on a Creditor Party’s overall net income.

 

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23

ILLEGALITY, ETC

 

23.1

Illegality. This Clause 23 applies if a Lender (the “Notifying Lender”) notifies the Agent that it has become, or will with effect from a specified date, become:

 

  (a)

unlawful or prohibited as a result of the introduction of a new law, an amendment to an existing law or a change in the manner in which an existing law is or will be interpreted or applied; or

 

  (b)

contrary to, or inconsistent with, any regulation,

for the Notifying Lender to maintain or give effect to any of its obligations under this Agreement in the manner contemplated by this Agreement.

 

23.2

Notification of illegality. The Agent shall promptly notify the Borrower, the Security Parties, and each of the Creditor Parties of the notice under Clause 23.1 (Illegality) which the Agent receives from the Notifying Lender.

 

23.3

Prepayment; termination of Commitment. On the Agent notifying the Borrower under Clause 23.2 (Notification of illegality), the Notifying Lender’s Commitment shall terminate; and thereupon or, if later, on the date specified in the Notifying Lender’s notice under Clause 23.1 (Illegality) as the date on which the notified event would become effective the Borrower shall prepay the Notifying Lender’s Contribution in accordance with Clause 8 (Repayment and Prepayment).

 

23.4

Mitigation. If circumstances arise which would result in a notification under Clause 23.1 (Illegality) then, without in any way limiting the rights of the Notifying Lender under Clause 23.3 (Prepayment, termination of Commitment), the Notifying Lender shall use reasonable endeavours to transfer its obligations, liabilities and rights under this Agreement and the Finance Documents to another office or financial institution not affected by the circumstances but the Notifying Lender shall not be under any obligation to take any such action if, in its opinion, to do would or might:

 

  (a)

have an adverse effect on its business, operations or financial condition; or

 

  (b)

involve it in any activity which is unlawful or prohibited or any activity that is contrary to, or inconsistent with, any regulation; or

 

  (c)

involve it in any expense (unless indemnified to its satisfaction) or tax disadvantage.

 

24

INCREASED COSTS

 

24.1

Increased costs. This Clause 24 applies if a Lender (the “Notifying Lender”) notifies the Agent that the Notifying Lender considers that as a result of:

 

  (a)

the introduction or alteration after the date of this Agreement of a law or an alteration after the date of this Agreement in the manner in which a law is interpreted or applied (disregarding any effect which relates to the application to payments under this Agreement of a tax on the Lender’s overall net income); or

 

  (b)

complying with any regulation (including any which relates to capital adequacy or liquidity controls or which affects the manner in which the Notifying Lender allocates capital resources to its obligations under this Agreement) which is introduced, or altered, or the interpretation or application of which is altered, after the date of this Agreement, the Notifying Lender (or a parent company of it) has incurred or will incur an “increased cost”.

 

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24.2

Meaning of “increase cost”. In this Clause 24, “increased cost” means, in relation to a Notifying Lender:

 

  (a)

an additional or increased cost incurred as a result of, or in connection with, the Notifying Lender having entered into, or being a party to, this Agreement or a Transfer Certificate, of funding or maintaining its Commitment or Contribution or performing its obligations under this Agreement, or of having outstanding all or any part of its Contribution or other unpaid sums;

 

  (b)

a reduction in the amount of any payment to the Notifying Lender under this Agreement or in the effective return which such a payment represents to the Notifying Lender or on its capital;

 

  (c)

an additional or increased cost of funding all or maintaining all or any of the advances comprised in a class of advances formed by or including the Notifying Lender’s Contribution or (as the case may require) the proportion of that cost attributable to the Contribution; or

 

  (d)

an additional or increased cost of funding all or maintaining all or any part the Notifying Lender’s Contributions or other unpaid sums or (as the case may require) the proportion of that cost attributable to the Contributions or other unpaid sums; or

 

  (e)

a liability to make a payment, or a return foregone, which is calculated by reference to any amounts received or receivable by the Notifying Lender under this Agreement;

but not an item attributable to a change in the rate of tax on the overall net income of the Notifying Lender (or a parent company of it) or an item covered by the indemnity for tax in Clause 21.1 (Indemnities regarding borrowing any repayment of Loan) or by Clause 22 (No Set-Off or Tax Deduction).

For the purposes of this Clause 24.2 the Notifying Lender may in good faith allocate or spread costs and/or losses among its assets and liabilities (or any class of its assets and liabilities) on such basis as it considers appropriate.

 

24.3

Notification to Borrower of claim for increased costs. The Agent shall promptly notify the Borrower and the Security Parties of the notice which the Agent received from the Notifying Lender under Clause 24.1 (Increased Costs).

 

24.4

Payment of increased costs. The Borrower shall pay to the Agent, on the Agent’s demand, for the account of the Notifying Lender the amounts which the Agent from time to time notifies the Borrower that the Notifying Lender has specified to be necessary to compensate the Notifying Lender for the increased cost.

 

24.5

Notice of prepayment; cancellation. If the Borrower is not willing to continue to compensate the Notifying Lender for the increased cost under Clause 24.4 (Payment of increased costs), the Borrower may give the Agent not less than 14 days’ notice of their intention to:

 

  (a)

prepay the Notifying Lender’s Contribution at the end of an Interest Period; and/or

 

  (b)

cancel the Notifying Lender’s Available Commitment.

 

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24.6

Prepayment; termination of Commitment. A notice under Clause 24.5 (Notice of prepayment; cancellation) shall be irrevocable; the Agent shall promptly notify the Notifying Lender of the Borrower’s notice of intended prepayment and/or cancellation; and:

 

  (a)

on the date on which the Agent serves that notice, the Available Commitment of the Notifying Lender shall be cancelled;

 

  (b)

on the date specified in its notice of intended prepayment, the Borrower shall prepay (without premium or penalty) the Notifying Lender’s Contribution, together with accrued interest thereon at the applicable rate plus the Margin.

 

25

SET-OFF

 

25.1

Application of credit balances. Each Creditor Party may, following the occurrence of an Event of Default which is continuing, without prior notice:

 

  (a)

apply any balance (whether or not then due) which at any time stands to the credit of any account in the name of the Borrower at any office in any country of that Creditor Party in or towards satisfaction of any sum then due from the Borrower to that Creditor Party under any of the Finance Documents; and

 

  (b)

for that purpose:

 

  (i)

break, or alter the maturity of, all or any part of a deposit of the Borrower;

 

  (ii)

convert or translate all or any part of a deposit or other credit balance into Dollars; and

 

  (iii)

enter into any other transaction or make any entry with regard to the credit balance which the Creditor Party concerned considers appropriate.

 

25.2

Existing rights unaffected. No Creditor Party shall be obliged to exercise any of its rights under Clause 25.1 (Application of credit balances); and those rights shall be without prejudice and in addition to any right of set-off, combination of accounts, charge, lien or other right or remedy to which a Creditor Party is entitled (whether under the general law or any document).

 

25.3

Sums deemed due to a Creditor Party. For the purposes of this Clause 25, a sum payable by the Borrower to the Agent or the Security Trustee for distribution to, or for the account of, any Creditor Party shall be treated as a sum due to that Creditor Party; and each Creditor Party’s proportion of a sum so payable for distribution to, or for the account of, the Creditor Parties shall be treated as a sum due to such Creditor Party.

 

25.4

No Security Interest. This Clause 25 gives the Creditor Parties a contractual right of set-off only, and does not create any equitable charge or other Security Interest over any credit balance of the Borrower.

 

26

TRANSFERS AND CHANGES IN LENDING AND BOOKING OFFICES

 

26.1

Transfer by Borrower. The Borrower may not, without the consent of the Agent, given on the instructions of all the Lenders transfer any of its rights, liabilities or obligations under any Finance Document.

 

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26.2

Transfer by a Lender. Subject to Clause 26.4 (Effective Date of Transfer Certificate), a Lender (the “Transferor Lender”) may, (i) if such transfer is to any bank or financial institution affiliated to a Lender or if such transfer is made while an Event of Default is continuing, without the consent of the Borrower or (ii) if such transfer is to any arm’s length bank or financial institution, with the prior consent of the Borrower, (such consent not to be unreasonably withheld or delayed) at any time, cause:

 

  (a)

its rights in respect of all or part of its Contribution; or

 

  (b)

its obligations in respect of all or part of its Commitment; or

 

  (c)

a combination of (a) and (b);

to be (in the case of its rights) transferred to, or (in the case of its obligations) assumed by, another bank or financial institution (a “Transferee Lender”) by delivering to the Agent a completed certificate in the form set out in Schedule 4 with any modifications approved or required by the Agent (a “Transfer Certificate”) executed by the Transferor Lender and the Transferee Lender.

However any rights and obligations of the Transferor Lender in its capacity as Agent or Security Trustee will have to be dealt with separately in accordance with the Agency and Trust Deed.

 

26.3

Transfer Certificate, delivery and notification. As soon as reasonably practicable after a Transfer Certificate is delivered to the Agent, it shall (unless it has reason to believe that the Transfer Certificate may be defective):

 

  (a)

sign the Transfer Certificate on behalf of itself, the Borrower, the Security Parties and each of the Creditor Parties;

 

  (b)

on behalf of the Transferee Lender, send to the Borrower and each Security Party letters or faxes notifying them of the Transfer Certificate and attaching a copy of it;

 

  (c)

send to the Transferee Lender copies of the letters or faxes sent under paragraph (b) above.

 

26.4

Effective Date of Transfer Certificate. A Transfer Certificate becomes effective on the date, if any, specified in the Transfer Certificate as its effective date, Provided that it is signed by the Agent under Clause 26.3 (Transfer Certificate, delivery and notification) on or before that date.

 

26.5

No transfer without Transfer Certificate. No assignment or transfer of any right or obligation of a Lender under any Finance Document is binding on, or effective in relation to, the Borrower, any Security Party, the Agent or the Security Trustee unless it is effected, evidenced or perfected by a Transfer Certificate.

 

26.6

Lender re-organisation; waiver of Transfer Certificate. However, if a Lender enters into any merger, de-merger or other reorganisation as a result of which all its rights or obligations vest in another person (the “successor”), the Agent may, if it sees fit, by notice to the successor and the Borrower and the Security Trustee waive the need for the execution and delivery of a Transfer Certificate; and, upon service of the Agent’s notice, the successor shall become a Lender with the same Commitment and Contribution as were held by the predecessor Lender.

 

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26.7

Effect of Transfer Certificate. A Transfer Certificate takes effect in accordance with English law as follows:

 

  (a)

to the extent specified in the Transfer Certificate, all rights and interests (present, future or contingent) which the Transferor Lender has under or by virtue of the Finance Documents are assigned to the Transferee Lender absolutely, free of any defects in the Transferor Lender’s title and of any rights or equities which the Borrower or any Security Party had against the Transferor Lender;

 

  (b)

the Transferor Lender’s Commitment is discharged to the extent specified in the Transfer Certificate;

 

  (c)

the Transferee Lender becomes a Lender with the Contribution previously held by the Transferor Lender and a Commitment of an amount specified in the Transfer Certificate;

 

  (d)

the Transferee Lender becomes bound by all the provisions of the Finance Documents which are applicable to the Lenders generally, including those about pro-rata sharing and the exclusion of liability on the part of, and the indemnification of, the Agent and the Security Trustee and, to the extent that the Transferee Lender becomes bound by those provisions (other than those relating to exclusion of liability), the Transferor Lender ceases to be bound by them;

 

  (e)

any part of the Loan which the Transferee Lender advances after the Transfer Certificate’s effective date ranks in point of priority and security in the same way as it would have ranked had it been advanced by the Transferor Lender, assuming that any defects in the transferor’s title and any rights or equities of the Borrower or any Security Party against the Transferor Lender had not existed;

 

  (f)

the Transferee Lender becomes entitled to all the rights under the Finance Documents which are applicable to the Lenders generally, including but not limited to those relating to the Majority Lenders and those under Clause 5.7 (Market disruption) and Clause 20 (Expenses), and to the extent that the Transferee Lender becomes entitled to such rights, the Transferor Lender ceases to be entitled to them; and

 

  (g)

in respect of any breach of a warranty, undertaking, condition or other provision of a Finance Document or any misrepresentation made in or in connection with a Finance Document, the Transferee Lender shall be entitled to recover damages by reference to the loss incurred by it as a result of the breach or misrepresentation, irrespective of whether the original Lender would have incurred a loss of that kind or amount.

The rights and equities of the Borrower or any Security Party referred to above include, but are not limited to, any right of set off and any other kind of cross-claim.

 

26.8

Maintenance of register of Lenders. During the Security Period the Agent shall maintain a register in which it shall record the name, Commitment, Contribution and administrative details (including the lending office) from time to time of each Lender holding a Transfer Certificate and the effective date (in accordance with Clause 26.4 (Effective Date of Transfer Certificate) of the Transfer Certificate; and the Agent shall make the register available for inspection by any Creditor Party and the Borrower during normal banking hours, subject to receiving at least 3 Business Days prior notice.

 

26.9

Reliance on register of Lenders. The entries on that register shall, in the absence of manifest error, be conclusive in determining the identities of the Lenders and the amounts of their Commitments and Contributions and the effective dates of Transfer Certificates and may be relied upon by the Agent and the other parties to the Finance Documents for all purposes relating to the Finance Documents.

 

26.10

Authorisation of Agent to sign Transfer Certificates. The Borrower and each Creditor Party irrevocably authorise the Agent to sign Transfer Certificates on its behalf.

 

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26.11

Registration fee. In respect of any Transfer Certificate, the Agent shall be entitled to recover a registration fee of $1,000 from the Transferor Lender or (at the Agent’s option) the Transferee Lender.

 

26.12

Sub-participation; subrogation assignment. A Lender may sub-participate all or any part of its rights and/or obligations under or in connection with the Finance Documents without the consent of, or any notice to, the Borrower, any Security Party, or the other Creditor Parties; and the Lenders may assign, in any manner and terms agreed by the Majority Lenders, the Agent and the Security Trustee, all or any part of those rights to an insurer or surety who has become subrogated to them.

 

26.13

Disclosure of information. A Lender may disclose to a potential Transferee Lender or sub-participant any information which the Lender has received in relation to the Borrower, any Security Party or their affairs under or in connection with any Finance Document, unless the information is clearly of a confidential nature.

Without prejudice to the above, the Borrower irrevocably authorises each Creditor Party to give, divulge and reveal from time to time information and details relating to its accounts, the Finance Documents and the facilities granted pursuant thereto to any authorities, each Creditor Party’s head office, branches and affiliates, any other parties to the Finance Documents and any person regarding any funding, operational arrangement or other transaction in relation thereto, including without limitation, for purposes in connection with any enforcement or assignment or transfer of any of the Creditor Parties’ rights and obligations. This authorisation shall survive and continue in full force and effect for the benefit of each Creditor Party notwithstanding the repayment, cancellation or termination of the Loan or any part thereof and/or the termination of one or more types of banker-customer relationships between any Security Party and the relevant Creditor Party.

 

26.14

Change of lending or booking office. A Lender may, at its own cost, change its lending or booking office, as the case may be, by giving notice to the Agent and the change shall become effective on the later of:

 

  (a)

the date on which the Agent receives the notice; and

 

  (b)

the date, if any, specified in the notice as the date on which the change will come into effect,

provided that the Borrower shall bear no additional obligations as a result of such change in lending office.

On receiving such a notice, the Agent shall notify the Borrower and the Security Trustee; and, until the Agent receives such a notice, it shall be entitled to assume that a Lender is acting through the lending or booking office, as the case may be, of which the Agent last had notice.

 

26.15

Replacement of Reference Bank. If any Reference Bank ceases to be a Lender or is unable on a continuing basis to supply quotations for the purposes of Clause 5 (Interest) then, unless the Borrower, the Agent and the Majority Lenders otherwise agree, the Agent, acting on the instructions of the Majority Lenders, and after consulting the Borrower, shall appoint another bank (whether or not a Lender) to be a replacement Reference Bank; and, when that appointment comes into effect, the first-mentioned Reference Bank’s appointment shall cease to be effective.

 

26.16

Confidential Information Each Creditor Party agrees to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent permitted by Clause 26.17 (Disclosure of Confidential Information) and Clause 26.18 (Disclosure to numbering service providers), and to ensure that all Confidential Information is protected with security measures and a degree of care that would apply to its own confidential information.

 

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26.17

Disclosure of Confidential Information In this Clause, “Representative” means any delegate, agent, manager, administrator, nominee, attorney, trustee or custodian.

Any Creditor Party may disclose:

 

(a)

to any of its Affiliates and any of its or their officers, directors, employees, professional advisers, insurers, reinsurers and insurance brokers, auditors, partners and Representatives such Confidential Information as that Creditor Party shall consider appropriate if any person to whom the Confidential Information is to be given pursuant to this paragraph is informed in writing of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by requirements of confidentiality in relation to the Confidential Information;

 

(b)

to any person:

 

  (i)

to (or through) whom it assigns or transfers (or may potentially assign or transfer) all or any of its rights and/or obligations under one or more Finance Documents and to any of that person’s Affiliates, Representatives and professional advisers;

 

  (ii)

with (or through) whom it enters into (or may potentially enter into), whether directly or indirectly, any sub-participation in relation to, or any other transaction under which payments are to be made or may be made by reference to, one or more Finance Documents and/or one or more Security Parties and to any of that person’s Affiliates, Representatives and professional advisers;

 

  (iii)

appointed by any Creditor Party or by a person to whom sub-paragraph (a) or (b) above applies to receive communications, notices, information or documents delivered pursuant to the Finance Documents on its behalf;

 

  (iv)

who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in sub-paragraph (a) or (b) above;

 

  (v)

to whom information is required or requested to be disclosed by (i) any governmental, banking, taxation or other regulatory authority or similar body, or the rules of any relevant stock exchange; or (ii) pursuant to any applicable law or regulation; or (iii) by any court of competent jurisdiction; and (iv) in connection with and for the purposes of any litigation, arbitration or other proceedings or dispute.

 

  (vi)

to whom or for whose benefit that Creditor Party charges, assigns or otherwise creates a Security Interest (or may do so);

 

  (vii)

who is a Party; or

 

  (viii)

with the consent of the Borrower;

 

72


in each case, such Confidential Information as that Creditor Party shall consider appropriate if:

 

  (1)

in relation to sub-paragraphs (i), (ii) and (iii) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking except that there shall be no requirement for a Confidentiality Undertaking if the recipient is a professional adviser and is subject to professional obligations to maintain the confidentiality of the Confidential Information;

 

  (2)

in relation to sub-paragraph (iv) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking or is otherwise bound by requirements of confidentiality in relation to the Confidential Information they receive and is informed that some or all of such Confidential Information may be price-sensitive information;

 

(c)

to any person appointed by that Creditor Party or by a person to whom sub-paragraph (a) or (b) above applies to provide administration or settlement services in respect of one or more of the Finance Documents including without limitation, in relation to the trading of participations in respect of the Finance Documents, such Confidential Information as may be required to be disclosed to enable such service provider to provide any of the services referred to in this sub Clause if the service provider to whom the Confidential Information is to be given has entered into a confidentiality agreement substantially in the form of the LMA Master Confidentiality Undertaking for Use With Administration/Settlement Service Providers or such other form of confidentiality undertaking agreed between the Borrower and the relevant Creditor Party;

 

(d)

to any rating agency (including its professional advisers) such Confidential Information as may be required to be disclosed to enable such rating agency to carry out its normal rating activities in relation to the Finance Documents and/or the Security Parties.

 

26.18

Disclosure to numbering service providers

 

(a)

Notwithstanding any other term of any Finance Document or any other agreement between the Parties to the contrary (whether express or implied) any Creditor Party may disclose to any national or international numbering service provider appointed by that Creditor Party to provide identification numbering services in respect of this Agreement, the Facility and/or one or more Security Parties the following information:

 

  (i)

names of Security Parties;

 

  (ii)

country of domicile of Security Parties;

 

  (iii)

place of incorporation or formation (as the case may be) of Security Parties;

 

  (iv)

date and governing law of this Agreement;

 

  (v)

the name of the Agent;

 

  (vi)

date of each amendment and restatement of this Agreement;

 

  (vii)

amount of the Loan and the Total Commitments;

 

  (viii)

currency of the Loan;

 

  (ix)

type of Loan;

 

  (x)

ranking of Loan;

 

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  (xi)

final Repayment Date;

 

  (xii)

changes to any of the information previously supplied pursuant to paragraphs (i) to (xi) above; and

 

  (xiii)

such other information agreed between such Creditor Party and the Borrower,

to enable such numbering service provider to provide its usual syndicated loan numbering identification services.

 

(b)

The Parties acknowledge and agree that each identification number assigned to this Agreement, the Loan and/or one or more Security Parties by a numbering service provider and the information associated with each such number may be disclosed to users of its services in accordance with the standard terms and conditions of that numbering service provider.

 

(c)

Each Security Party represents that none of the information set out in paragraphs (a) to (m) of Clause 26.18(a) above is, nor will at any time be, unpublished price-sensitive information.

 

(d)

The Agent shall notify the Borrower and the other Creditor Parties of:

 

  (i)

the name of any numbering service provider appointed by the Agent in respect of this Agreement, the Facility and/or one or more Security Parties; and

 

  (ii)

the number or, as the case may be, numbers assigned to this Agreement, the Facility and/or one or more Security Parties by such numbering service provider.

 

26.19

Disclosure to administration/settlement services providers. Notwithstanding any other term of any Finance Document or any other agreement between the Parties to the contrary (whether express or implied), any Creditor Party may disclose to any person appointed by:

 

(a)

that Creditor Party;

 

(b)

a person to (or through) whom that Creditor Party assigns or transfers (or may potentially assign or transfer) all or any of its rights and/or obligations under one or more Finance Documents or which succeeds (or which may potentially succeed) it as Agent or Security Trustee under this Agreement; and/or

 

(c)

a person with (or through) whom that Creditor Party enters into (or may potentially enter into) any sub-participation in relation to, or any other transaction under which payments are to be made, or may be made, by reference to, one or more Finance Documents and/or one or more Security Parties,

to provide administration or settlement services in respect of one or more of the Finance Documents including without limitation, in relation to the trading of participations in respect of the Finance Documents, such Confidential Information as may be required to be disclosed to enable such service provider to provide any of the services referred to in this Clause if the service provider to whom the Confidential Information is to be given has entered into a confidentiality agreement substantially in the form of the LMA Master Confidentiality Undertaking for use with Administration/ Settlement Services Providers or such other form of confidentiality undertaking agreed between the Borrower and the relevant Creditor Party.

 

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26.20

Entire agreement Clauses 26.16 to 26.23 (inclusive) (Confidentiality) constitute the entire agreement between the Parties in relation to the obligations of the Creditor Parties under the Finance Documents regarding Confidential Information and supersedes any previous agreement, whether express or implied, regarding Confidential Information.

 

26.21

Inside information Each of the Creditor Parties acknowledges that some or all of the Confidential Information is or may be price-sensitive information and that the use of such information may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and each of the Creditor Parties undertakes not to use any Confidential Information for any unlawful purpose.

 

26.22

Notification of disclosure Each of the Creditor Parties agrees (to the extent permitted by law and regulation) to inform the Borrower:

 

(a)

of the circumstances of any disclosure of Confidential Information made pursuant to sub-paragraph (e) of Clause 26.17 (Disclosure of Confidential Information) except where such disclosure is made to any of the persons referred to in that paragraph during the ordinary course of its supervisory or regulatory function; and

 

(b)

upon becoming aware that Confidential Information has been disclosed in breach of Clauses 26.16 to 26.23 (inclusive) (Confidentiality).

 

26.23

Continuing obligations The obligations in Clause 26.16 to 26.23 (inclusive) (Confidentiality) are continuing and, in particular, shall survive and remain binding on each Creditor Party for a period of twelve (12) months from the earlier of:

 

(a)

the date on which all amounts payable by the Security Parties under or in connection with this Agreement have been paid in full and all Commitments have been cancelled or otherwise cease to be available; and

 

(b)

the date on which such Creditor Party otherwise ceases to be a Creditor Party.

 

27

VARIATIONS AND WAIVERS

 

27.1

Variations, waivers etc. by Majority Lenders. Subject to Clause 27.2 (Variations, waivers etc. requiring agreement of all Lenders), a document shall be effective to vary, waive, suspend or limit any provision of a Finance Document, or any Creditor Party’s rights or remedies under such a provision or the general law, only if the document is signed, or specifically agreed to by letter or fax, by the Borrower, by the Agent on behalf of the Majority Lenders, by the Agent and the Security Trustee in their own rights, and, if the document relates to a Finance Document to which a Security Party is party, by that Security Party.

 

27.2

Variations, waivers etc. requiring agreement of all Lenders. However, as regards the following, Clause 27.1 (Variations, waivers etc. by Majority Lenders) applies as if the words “by the Agent on behalf of the Majority Lenders” were replaced by the words “by or on behalf of every Lender”:

 

  (a)

a change in the Margin or in the definition of LIBOR;

 

75


  (b)

a change to the date for, the amount of, any payment of principal, interest, fees, or other sum payable under this Agreement;

 

  (c)

a change to any Lender’s Commitment;

 

  (d)

an extension of Availability Period;

 

  (e)

a change to the definition of “Majority Lenders” or “Finance Documents”;

 

  (f)

a change to the preamble or to Clause 2 (Facility), 3 (Position of the Lenders), 4 (Drawdown), 5.1 (Payment of normal interest), 10.23 (Sanctions), 11.23 (Sanctions), 17 (Application of Receipts), 18 (Application of Earnings, Location of Accounts) or 31 (Law and Jurisdiction);

 

  (g)

a change to this Clause 27;

 

  (h)

any release of, or material variation to, a Security Interest, guarantee, indemnity or subordination arrangement set out in a Finance Document; and

 

  (i)

any other change or matter as regards which this Agreement or another Finance Document expressly provides that each Lender’s consent is required.

 

27.3

Exclusion of other or implied variations. Except for a document which satisfies the requirements of Clauses 27.1 (Variations, waivers etc. by Majority Lenders) and 27.2 (Variations, waivers etc. requiring agreement of all Lenders), no document, and no act, course of conduct, failure or neglect to act, delay or acquiescence on the part of the Creditor Parties or any of them (or any person acting on behalf of any of them) shall result in the Creditor Parties or any of them (or any person acting on behalf of any of them) being taken to have varied, waived, suspended or limited, or being precluded (permanently or temporarily) from enforcing, relying on or exercising:

 

  (a)

a provision of this Agreement or another Finance Document; or

 

  (b)

an Event of Default; or

 

  (c)

a breach by the Borrower or a Security Party of an obligation under a Finance Document or the general law; or

 

  (d)

any right or remedy conferred by any Finance Document or by the general law;

and there shall not be implied into any Finance Document any term or condition requiring any such provision to be enforced, or such right or remedy to be exercised, within a certain or reasonable time.

 

27.4

Co-operation on potential restructuring of facilities. Provided the Lenders have provided their consent to the relevant tax enhancement structure (upon such terms as are acceptable to the Lenders), the Lenders will provide reasonable co-operation for such changes as are necessary (at the Borrower’s costs) relating to such tax enhancement transaction.

 

28

NOTICES

 

28.1

General. Unless otherwise specifically provided, any notice under or in connection with any Finance Document shall be given by letter or fax or electronic message; and references in the Finance Documents to written notices, notices in writing and notices signed by particular persons shall be construed accordingly.

 

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28.2

Addresses for communications. A notice shall be sent:

 

(a)    to the Borrower:    7 Avenue de Grande BretagneOffice 11B2
      Monte Carlo, MC 98000 Monaco
      Fax no: +377 97 98 21 41
(b)    to a Lender:    At the address below its name in Schedule 1 or (as the case may require) in the relevant Transfer Certificate.
(c)    to the Agent and the Security Trustee Gustav Mahlerlaan 10,
      1082 PP Amsterdam
      The Netherlands
     

Attn: Global Transportation & Logistics

Fax no: +31 (0) 10 401 53 23

or to such other address as the relevant party may notify to the Agent or, if the relevant party is the Agent or the Security Trustee, the Borrower, the Lenders and the Security Parties.

 

28.3

Effective date of notices. Subject to Clauses 28.4 (Service outside business hours) and 28.5 (Illegible notices):

 

  (a)

a notice which is delivered personally or posted shall be deemed to be served, and shall take effect, at the time when it is delivered;

 

  (b)

 

  (c)

a notice which is sent by fax or electronic message shall be deemed to be served, and shall take effect, 2 hours after its transmission is completed.

 

28.4

Service outside business hours. However, if under Clause 28.3 (Effective date of notices) a notice would be deemed to be served:

 

  (a)

on a day which is not a business day in the place of receipt; or

 

  (b)

on such a business day, but after 5 p.m. local time;

the notice shall (subject to Clause 28.5 (Illegible notices)) be deemed to be served, and shall take effect, at 9 a.m. on the next day which is such a business day.

 

28.5

Illegible notices. Clauses 28.3 (Effective date of notices) and 28.4 (Service outside business hours) do not apply if the recipient of a notice notifies the sender within 1 hour after the time at which the notice would otherwise be deemed to be served that the notice has been received in a form which is illegible in a material respect.

 

28.6

Valid notices. A notice under or in connection with a Finance Document shall not be invalid by reason that its contents or the manner of serving it do not comply with the requirements of this Agreement or, where appropriate, any other Finance Document under which it is served if:

 

(a)

the failure to serve it in accordance with the requirements of this Agreement or other Finance Document, as the case may be, has not caused any party to suffer any significant loss or prejudice; or

 

77


(b)

in the case of incorrect and/or incomplete contents, it should have been reasonably clear to the party on which the notice was served what the correct or missing particulars should have been.

 

28.7

English language. Any notice under or in connection with a Finance Document shall be in English.

 

28.8

Meaning of “notice”. In this Clause 28, “notice” includes any demand, consent, authorisation, approval, instruction, waiver or other communication.

 

29

PARALELL DEBT

 

29.1

Parallel Debt

Notwithstanding any other provision of the Finance Documents, the Borrower hereby irrevocably and unconditionally undertakes to pay to the Security Trustee, as creditor in its own right and not as representative of the other Creditor Parties, sums equal to and in the currency of each amount payable by the Borrower and any Security Party to any Creditor Party under any Finance Document as and when that amount falls due for payment under the relevant Finance Document or would have fallen due but for any discharge resulting from failure of another Creditor Party to take appropriate steps, in insolvency proceedings affecting that Borrower, to preserve its entitlement to be paid that amount (the “Parallel Debt”).

The Security Trustee shall have its own independent right to demand payment of the amounts payable by the Borrower under this Clause 29.1, irrespective of any discharge of the Borrower and/or any Security Party’s obligation to pay those amounts to the other Creditor Parties resulting from failure by them to take appropriate steps, in insolvency proceedings affecting that Borrower and/or any Security Party, to preserve their entitlement to be paid those amounts.

Any amount due and payable by the Borrower to the Security Trustee under this Clause 29.1 shall be decreased to the extent that the other Creditor Parties have received (and are able to retain) payment in full of the corresponding amount under the other provisions of the Finance Documents and any amount due and payable by the Borrower and/or a Security Party to the other Creditor Parties under those provisions shall be decreased to the extent the Security Trustee has received (and is able to retain) payment in full of the corresponding amount under this Clause 29.1.

The Borrower and the Creditor Parties acknowledge that, in respect of the Parallel Debt, the Security Trustee acts in its own name and not as representative of the Creditor Parties or any of them.

 

78


30

SUPPLEMENTAL

 

30.1

Rights cumulative, non-exclusive. The rights and remedies which the Finance Documents give to each Creditor Party are:

 

  (a)

cumulative;

 

  (b)

may be exercised as often as appears expedient; and

 

  (c)

shall not, unless a Finance Document explicitly and specifically states so, be taken to exclude or limit any right or remedy conferred by any law.

 

30.2

Severability of provisions. If any provision of a Finance Document is or subsequently becomes void, unenforceable or illegal, that shall not affect the validity, enforceability or legality of the other provisions of that Finance Document or of the provisions of any other Finance Document.

 

30.3

Counterparts. A Finance Document may be executed in any number of counterparts.

 

30.4

Third party rights. A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Agreement.

 

31

LAW AND JURISDICTION

 

31.1

English law. This Agreement shall be governed by, and construed in accordance with, English law.

 

31.2

Exclusive English jurisdiction. Subject to Clause 31.3 (Choice of forum for the exclusive benefit of the Creditor Parties), the courts of England shall have exclusive jurisdiction to settle any disputes which may arise out of or in connection with this Agreement.

 

31.3

Choice of forum for the exclusive benefit of the Creditor Parties. Clause 31.2 (Exclusive English jurisdiction) is for the exclusive benefit of the Creditor Parties, each of which reserves the right:

 

  (a)

to commence proceedings in relation to any matter which arises out of or in connection with this Agreement in the courts of any country other than England and which have or claim jurisdiction to that matter; and

 

  (b)

to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in England or without commencing proceedings in England.

The Borrower shall not commence any proceedings in any country other than England in relation to a matter which arises out of or in connection with this Agreement.

 

31.4

Process agent. The Borrower irrevocably appoints Hill Dickinson LLP at present of Broadgate Tower, 20 Primrose Street, London EC2A 2EW, England to act as its agent to receive and accept on its behalf any process or other document relating to any proceedings in the English courts which are connected with this Agreement.

 

31.5

Creditor Party rights unaffected. Nothing in this Clause 31 (Law and Jurisdiction) shall exclude or limit any right which any Creditor Party may have (whether under the law of any country, an international convention or otherwise) with regard to the bringing of proceedings, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction.

 

79


31.6

Meaning of “proceedings”. In this Clause 31, “proceedings” means proceedings of any kind, including an application for a provisional or protective measure.

THIS AGREEMENT has been entered into on the date stated at the beginning of this Agreement.

 

80


EXECUTION PAGE

 

SIGNED by /s/ GEORGIOS PANAGAKIS    )      
for and on behalf of    )      
NAVIOS MARITIME PARTNERS L.P.    )      
in the presence of:    )    /s/ Francisco Tazelaar   
SIGNED by /s/ ROBIN LLOYD PARRY    )      
And by /s/ STAVROULA MYLONA    )      
for and on behalf of    )      
ABN AMRO BANK N.V. as Agent and    )      
Security Trustee    )   

 

  

 

in the presence of:    )    /s/ R. PARRY    S.MYLONA
SIGNED by /s/ ROBIN LLOYD PARRY    )      
And by /s/ STAVROULA MYLONA    )      
for and on behalf of    )      
ABN AMRO BANK N.V.    )      
as a Lender    )   

 

  

 

in the presence of:    )    /s/ R. PARRY    S.MYLONA

 

81

EX-4.2

EXHIBIT 4.2

Private and Confidential

DATED 24 SEPTEMBER 2019 (AS AMENDED AND RESTATED ON 16 DECEMBER 2019)

 

(1)

EACH OF THE ENTITIES LISTED IN SCHEDULE 1 PART I

(as joint and several Borrowers)

 

(2)

NAVIOS MARITIME OPERATING L.L.C.

(as HoldCo)

 

(3)

NAVIOS MARITIME PARTNERS L.P.

(as NMP)

 

(4)

THE FINANCIAL INSTITUTIONS LISTED IN SCHEDULE 1 PART II

(as Lenders)

 

(5)

DORY FUNDING DAC

(as Agent)

 

(6)

DORY FUNDING DAC

(as Security Agent)

FACILITY AGREEMENT

SECURED TERM LOAN FACILITY OF UP TO US$37,000,000

EXECUTION VERSION

 

LOGO    reedsmith.com

 

-i-


CONTENTS

 

CLAUSE

  

1.

  DEFINITIONS AND INTERPRETATION      1  

2.

  THE FACILITY      26  

3.

  PURPOSE      27  

4.

  CONDITIONS OF UTILISATION      27  

5.

  UTILISATION      28  

6.

  REPAYMENT      29  

7.

  PREPAYMENT AND CANCELLATION      29  

8.

  INTEREST      31  

9.

  INTEREST PERIODS      32  

10.

  CHANGES TO THE CALCULATION OF INTEREST      32  

11.

  FEES      33  

12.

  TAX GROSS UP AND INDEMNITIES      33  

13.

  INCREASED COSTS      38  

14.

  OTHER INDEMNITIES      40  

15.

  MITIGATION BY THE LENDERS      42  

16.

  COSTS AND EXPENSES      43  

17.

  JOINT AND SEVERAL LIABILITY      44  

18.

  GUARANTEE AND INDEMNITY      46  

19.

  REPRESENTATIONS AND WARRANTIES      49  

20.

  INFORMATION UNDERTAKINGS      55  

21.

  FINANCIAL COVENANTS      59  

22.

  GENERAL UNDERTAKINGS      59  

23.

  VESSEL UNDERTAKINGS      65  

24.

  INSURANCE UNDERTAKINGS      70  

25.

  ACCOUNTS      75  

26.

  SECURITY SHORTFALL      76  

27.

  EVENTS OF DEFAULT      78  

28.

  CHANGES TO THE LENDERS      83  

29.

  CHANGES TO THE OBLIGORS      87  

30.

  ROLE OF THE AGENT AND THE SECURITY AGENT      87  

31.

  APPLICATION OF PROCEEDS      102  

32.

  CONDUCT OF BUSINESS BY THE FINANCE PARTIES      104  

33.

  SHARING AMONG THE FINANCE PARTIES      104  

34.

  PAYMENT MECHANICS      105  

35.

  SET-OFF      108  

36.

  CONTRACTUAL RECOGNITION OF BAIL-IN      108  

37.

  NOTICES      109  

38.

  CALCULATIONS AND CERTIFICATES      111  

39.

  PARTIAL INVALIDITY      111  

40.

  REMEDIES AND WAIVERS      111  

41.

  AMENDMENTS AND WAIVERS      111  

42.

  CONFIDENTIALITY      114  

43.

  COUNTERPARTS      117  

 

-ii-


44.

  GOVERNING LAW      117  

45.

  ENFORCEMENT      118  

SCHEDULE 1 THE ORIGINAL PARTIES

     119  

PART I THE OBLIGORS

     119  

PART II THE ORIGINAL LENDER

  

PART III AGENT AND SECURITY AGENT

  

SCHEDULE 2 CONDITIONS PRECEDENT

  

PART I CONDITIONS PRECEDENT TO UTILISATION

  

PART II CONDITIONS SUBSEQUENT

  

SCHEDULE 3 UTILISATION REQUEST

  

SCHEDULE 4 FORM OF TRANSFER CERTIFICATE

  

SCHEDULE 5 FORM OF ASSIGNMENT AGREEMENT

  

SCHEDULE 6 TIMETABLES

  

SCHEDULE 7 NOTIONAL VESSEL TRANCHE AMOUNTS

  

SCHEDULE 8 DETAILS OF VESSELS

  

SCHEDULE 9 SCREEN RATE CONTINGENCY PERIODS

  

SCHEDULE 10

  

SCHEDULE 11

  

SCHEDULE 12 NMP FINANCIAL COVENANTS

  

SCHEDULE 13 EXAMPLE BUDGET

  

 

-iii-


THIS AGREEMENT is dated 24 September 2019 (as amended and restated on 16 December 2019)

BETWEEN:

 

(1)

EACH OF THE ENTITIES listed in Part I of Schedule 1 (The Original Parties) as joint and several borrowers (together the “Borrowers” and each a “Borrower”);

 

(2)

NAVIOS MARITIME OPERATING L.L.C., a limited liability company formed under the laws of the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH 96960 (“HoldCo”);

 

(3)

NAVIOS MARITIME PARTNERS L.P., a limited partnership formed under the laws of the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH 96960 (“NMP”);

 

(4)

THE FINANCIAL INSTITUTIONS listed in Part II of Schedule 1 (The Original Parties) as lenders (“Original Lenders”);

 

(5)

DORY FUNDING DAC as agent of the Finance Parties (“Agent”); and

 

(6)

DORY FUNDING DAC as security agent for the Finance Parties (“Security Agent”).

BACKGROUND

The Lenders have agreed to make available to the Borrowers a loan facility in an amount equal to the Maximum Loan Amount for the purposes of financing the acquisition of the Vessels.

IT IS AGREED as follows:

 

1.

Definitions and Interpretation

 

1.1

Definitions

In this Agreement:

Account” means each of the Earnings Accounts and any other account opened, made or established in accordance with Clause 25 (Accounts).

Account Bank” means, in relation to any Account, Hamburg Commercial Bank AG, or any other bank or financial institution approved by the Agent (with the prior written consent of the Majority Lenders).

Account Holder” means, in relation to any Account, each Obligor in whose name that Account is held.

Accounts Security” means, in relation to an Account, a deed or other instrument granted by the Account Holder in favour of the Security Agent conferring Security over that Account in the agreed form.

Affiliate” means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company.

Applicable VTL Percentage” means, as from the second anniversary of the Utilisation Date, 110%.

 

- 1 -


Approved Brokers” means the London offices of any of Braemar ACM, Clarksons, Fearnley Shipping, Galbraiths, Maersk Broker or Howe Robinson (or any Affiliate of such persons through which valuations are commonly issued), or any independent international sale and purchase broker approved by the Agent (acting on the instructions of the Majority Lenders) from time to time (and “Approved Broker” means any one of them).

Approved Commercial Manager” means, in relation to a Vessel, Navios Shipmanagement Inc., or any other management company as the Agent may, with the authorisation of the Majority Lenders, approve in writing from time to time in respect of that Vessel.

Approved Flag” means Panamanian flag or any other flag as the Agent may, with the authorisation of all Lenders, approve in writing as the flag under which a Vessel may be registered, provided that, for the avoidance of doubt, no flag under which a Vessel may be registered may be changed from one Approved Flag to another Approved Flag without the consent of the Agent (with the authorisation of all Lenders).

Approved Manager” means each Approved Technical Manager and each Approved Commercial Manager.

Approved Sub-Manager” means, in relation to an Approved Manager, any sub-manager appointed by an Approved Manager with the approval of the Agent, with the authorisation of the Majority Lenders, pursuant to Clause 23.17 (Management Agreement).

Approved Technical Manager” means, in relation to a Vessel, Navios Shipmanagement Inc., or any other management company as the Agent may, with the authorisation of the Majority Lenders, approve in writing from time to time in respect of that Vessel.

Assignment Agreement” means an agreement substantially in the form set out in Schedule 5 (Form of Assignment Agreement) or any other form agreed between the relevant assignor and assignee.

Auditor” means a certified public auditor or audit firm seated in an EEA Member Country, the United Kingdom (if not an EEA Member Country) or the United States of America and licensed by the relevant national authorities.

Availability Period” means the period from and including the date of this Agreement to and including 30 September 2019 (or such later date as the Agent may agree acting on instructions of the Majority Lenders).

Available Commitment” means a Lender’s Commitment minus:

 

  (a)

the amount of its participation in the outstanding Loan; and

 

  (b)

in relation to any proposed Utilisation, the amount of its participation in such Utilisation that is due to be made on or before the proposed Utilisation Date.

Available Facility” means the aggregate for the time being of each Lender’s Available Commitment.

Bail-In Action” means the exercise of any Write-down and Conversion Powers.

Bail-In Legislation” means:

 

  (a)

in relation to an EEA Member Country which has implemented, or which at any time implements, Article 55 of Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms, the relevant implementing law or regulation as described in the EU Bail-In Legislation Schedule from time to time; and

 

- 2 -


  (b)

in relation to any other state other than such an EEA Member Country or (to the extent that the United Kingdom is not such an EEA Member Country) the United Kingdom, any analogous law or regulation from time to time which requires contractual recognition of any Write-down and Conversion Powers contained in that law or regulation.

Balloon Instalment” has the meaning given to that term in Clause 6.1(b) (Repayment Instalments).

Beneficial Owner” has the meaning given to that term in Rule 13d-3 and Rule 13d-5 under the United States Exchange Act. The terms “Beneficially Owns” and “Beneficially Owned” shall have correlative meanings.

Break Costs” means the amount (if any) by which:

 

  (a)

the interest (excluding the Margin) which a Lender should have received for the period from the date of receipt of all or any part of its participation in the Loan or Unpaid Sum to the last day of the current Interest Period in respect of that Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period;

exceeds:

 

  (b)

the amount which that Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank in the Relevant Interbank Market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period.

Business Day” means a day (other than a Saturday or Sunday) on which banks are open for general business in Athens, London, Dublin and New York.

Cash” means, at any time with respect to any person, cash in hand or at a bank and (in the latter case) credited to an account in the name of that person and to which that person alone is beneficially entitled and for so long as:

 

  (a)

that cash is repayable within thirty (30) days after the relevant date of calculation;

 

  (b)

repayment of that cash is not contingent on the prior discharge of any other indebtedness of that person or of any other person whatsoever or on the satisfaction of any other condition other than any such conditions under Transaction Security referred to in paragraph (c) below;

 

  (c)

there is no Security over that cash except for Transaction Security; and

 

  (d)

the cash is freely and (except as mentioned in paragraphs (a) and (c) above) immediately available to be applied in repayment or prepayment of the Loan.

Change of Control” means:

 

  (a)

in respect of NMP:

 

- 3 -


  (i)

the Permitted Holders cease to be the Beneficial Owners, directly or indirectly, of Voting Stock representing 15% or more of the voting power of the total outstanding Voting Stock of NMP; or

 

  (ii)

NMP ceases to be listed on the New York Stock Exchange or another stock exchange which is of equivalent repute to the New York Stock Exchange (as determined by the Agent (acting on the instructions of the Lenders));

 

  (b)

in respect of HoldCo:

 

  (i)

a sale, lease or transfer of all or substantially all of HoldCo’s assets to any person or group whether in a single transaction or a series of transactions; or

 

  (ii)

any time during which and for any reason NMP ceases to beneficially own and control, directly, 100% of the capital stock or other equity interests of HoldCo; or

 

  (c)

in respect of a Borrower:

 

  (i)

a sale, lease or transfer of all or substantially all of that Borrower’s assets to any person or group whether in a single transaction or a series of transactions; or

 

  (ii)

any time during which and for any reason, HoldCo fails to legally and beneficially own, directly, one hundred per cent. (100%) of the capital stock or other equity interests of that Borrower.

Charged Property” means the shares in each of the relevant Obligors and all of the assets of the relevant Obligors which from time to time are, or are expressed or intended to be, the subject of the Security Documents.

Charter” means, in respect of a Vessel, any time charter or other contract of employment between the relevant Borrower owning that Vessel and any charterer, which exceeds or is capable of exceeding thirteen (13) months (including by virtue of optional extensions).

Charter Assignment” means the first priority assignment of any Charter in the agreed form.

Classification” means, in respect of a Vessel, the classification with the Classification Society specified in Schedule 8 (Details of Vessels) or such other classification with a Classification Society as the Agent may, with the authorisation of the Majority Lenders, approve in writing.

Classification Society” means, in relation to a Vessel, the classification society specified in Schedule 8 (Details of Vessels), or such other classification society being a member of the International Association of Classification Societies as the Agent may, with the authorisation of the Majority Lenders approve in writing.

Code” means the US Internal Revenue Code of 1986 as amended.

Commercial Management Agreement” means, in relation to a Vessel, any commercial management agreement entered into or to be entered into (as applicable) between the relevant Borrower and an Approved Commercial Manager in form and substance acceptable to the Agent (acting on the instructions of the Majority Lenders).

Commitment” means:

 

- 4 -


  (a)

in relation to an Original Lender, the amount set opposite its name under the heading “Commitment” in Part I of Schedule 1 (The Original Parties) and the amount of any other Commitment transferred to it under this Agreement; and

 

  (b)

in relation to any other Lender, the amount of any Commitment transferred to it under this Agreement,

to the extent not cancelled, reduced or transferred by it under this Agreement.

Confidential Information” means all information relating to any Obligor, any Affiliate of any Obligor, the Finance Documents or the Loan of which a Finance Party becomes aware in its capacity as, or for the purpose of becoming, a Finance Party which is received by a Finance Party in relation to, or for the purpose of becoming a Finance Party under, the Finance Documents or the Loan from either:

 

  (a)

any Obligor or any of its advisers; or

 

  (b)

another Finance Party, if the information was obtained by that Finance Party directly or indirectly from any Obligor or any of its advisers, in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information but excludes information that:

 

  (i)

is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of Clause 42 (Confidentiality); or

 

  (ii)

is identified in writing at the time of delivery as non-confidential by any Obligor or any of its advisers; or

 

  (iii)

is known by that Finance Party before the date the information is disclosed to it in accordance with (a) or (b) or is lawfully obtained by that Finance Party after that date, from a source which is, as far as that Finance Party is aware, unconnected with any Obligor and which, in either case, as far as that Finance Party is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality.

Confidentiality Undertaking” means a confidentiality undertaking substantially in a recommended form of the LMA from time to time.

Consent and Implementation Agreement” means the agreement dated of even date herewith between, inter alia, (i) each of the Sellers, (ii) each of the Borrowers, (iii) the existing financiers of the Sellers, (iv) the Agent, (v) the Security Trustee and (vi) the Lenders in relation to the implementation of the transfer of the Vessels under the MOAs and application of the proceeds of Utilisation hereunder.

Corresponding Debt” means any amount, other than a Parallel Debt, which an Obligor owes to a Finance Party under or in connection with the Finance Documents.

Default” means an Event of Default or any event or circumstance specified in Clause 27 (Events of Default) which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an Event of Default.

Delegate” means any delegate, agent, attorney, co-trustee or other person appointed by the Security Agent.

 

- 5 -


Disruption Event” means either or both of:

 

  (a)

a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Facility (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties; or

 

  (b)

the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party preventing that, or any other Party:

 

  (i)

from performing its payment obligations under the Finance Documents; or

 

  (ii)

from communicating with other Parties in accordance with the terms of the Finance Documents,

and which (in either such case) is not caused by, and is beyond the control of, the Party whose operations are disrupted.

DOC” means, in relation to the ISM Company, a valid Document of Compliance issued for the ISM Company by the Administration (as defined in the ISM Code) under paragraph 13.2 of the ISM Code.

Dollars” and “US$” mean the lawful currency, for the time being, of the United States of America.

Earnings” means, in relation to a Vessel, all moneys whatsoever which are now, or later become, payable (actually or contingently) to the Borrower owning that Vessel or the Security Agent and which arise out of the use or operation of the Vessel owned by it including (but not limited to):

 

  (a)

all freight, hire and passage moneys, money or compensation payable for the provision of services by or from a Vessel or under any charter commitment, compensation payable to that Borrower or the Security Agent in the event of requisition of a Vessel for hire, general average consolidation, 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 a Vessel;

 

  (b)

all moneys which are at any time payable under Insurances in respect of loss of earnings; and

 

  (c)

if and whenever a Vessel is employed on terms whereby any moneys falling within paragraphs (a) or (b) is pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to a Vessel.

Earnings Accounts” means:

 

  (a)

an account in the name of Borrower A held with the Account Bank;

 

  (b)

an account in the name of Borrower B held with the Account Bank;

 

  (c)

an account in the name of Borrower C held with the Account Bank;

 

- 6 -


  (d)

an account in the name of Borrower D held with the Account Bank,

or any other account opened or established with that office of the Account Bank or another office of the Account Bank which is designated by the Agent as an “Earnings Account” for the purposes of this Agreement and “Earnings Account” means any of them.

EEA Member Country” means any member state of the European Union, Iceland, Liechtenstein and Norway.

Environment” means humans, animals, plants and all other living organisms including the ecological systems of which they form part and the following media:

 

  (a)

air (including, without limitation, air within natural or man-made structures, whether above or below ground);

 

  (b)

water (including, without limitation, territorial, coastal and inland waters, water under or within land and water in drains and sewers); and

 

  (c)

land (including, without limitation, land under water).

Environmental Approval” means any present or future permit, ruling, variance or other authorisation required under Environmental Law.

Environmental Claim” means any claim, proceeding, formal notice or investigation by any governmental, judicial or regulatory authority or any other person which arises out of an Environmental Incident or an alleged Environmental Incident or which relates to any Environmental Law and, for this purpose, “claim” includes a claim for damages, compensation, contribution, injury, fines, losses and penalties or any other payment of any kind, including in relation to clean-up and removal, whether or not similar to the foregoing; an order or direction to take, or not to take, certain action or to desist from or suspend certain action; and any form of enforcement or regulatory action, including the arrest or attachment of any asset.

Environmental Incident” means:

 

  (a)

any release, emission, spill or discharge into a Vessel or into or upon the air, sea, land or soils (including the seabed) or surface water of Environmentally Sensitive Material within or from a Vessel; or

 

  (b)

any incident in which Environmentally Sensitive Material is released, emitted, spilled or discharged into or upon the air, sea, land or soils (including the seabed) or surface water from a vessel other than a Vessel and which involves a collision between a Vessel and such other vessel or some other incident of navigation or operation, in either case, in connection with which a Vessel is actually or potentially liable to be arrested, attached, detained or injuncted and/or a Vessel and/or any Obligor and/or any operator or manager of a Vessel is at fault or allegedly at fault or otherwise liable to any legal or administrative action; or

 

  (c)

any other incident in which Environmentally Sensitive Material is released, emitted, spilled or discharged into or upon the air, sea, land or soils (including the seabed) or surface water otherwise than from a Vessel and in connection with which a Vessel is actually or potentially liable to be arrested and/or where any Obligor and/or any operator or manager of a Vessel is at fault or allegedly at fault or otherwise liable to any legal or administrative action, other than in accordance with an Environmental Approval.

 

- 7 -


Environmental Law” means any present or future law or regulation relating to pollution or protection of human health or the Environment, to conditions in the workplace, to the carriage, generation, handling, storage, use, release or spillage of Environmentally Sensitive Material or to actual or threatened releases of Environmentally Sensitive Material.

Environmentally Sensitive Material” means and includes all contaminants, oil, oil products, toxic substances and any other substance (including any chemical, gas or other hazardous or noxious substance) which is (or is capable of being or becoming) polluting, toxic or hazardous.

EU Bail-In Legislation Schedule” means the document described as such and published by the Loan Market Association (or any successor person) from time to time.

Event of Default” means any event or circumstance specified as such in Clause 27 (Events of Default) or any other event or circumstance described as such in any other provision of a Finance Document.

Facility” means the term loan facility made available under this Agreement as described in Clause 2.1 (The Facility).

Facility Office” means:

 

  (a)

in respect of a Lender, the office or offices notified by a Lender to the Agent in writing on or before the date it becomes a Lender (or, following that date, by not less than five (5) Business Days’ written notice) as the office or offices through which it will perform its obligations under this Agreement; and

 

  (b)

in respect of any other Finance Party, the office in the jurisdiction in which it is resident for tax purposes.

Facility Period” means the period from and including the date of this Agreement to and including the date on which the Total Commitments have been reduced to zero and all Secured Liabilities have been fully paid and discharged.

FATCA” means:

 

  (a)

sections 1471 to 1474 of the Code or any associated regulations;

 

  (b)

any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of any law or any regulation referred to in paragraph (a) above; or

 

  (c)

any agreement pursuant to the implementation of any treaty, law or regulation referred to in paragraphs (a) or (b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction.

FATCA Application Date” means:

 

  (a)

in relation to a “withholdable payment” described in section 1473(1)(A)(i) of the Code (which relates to payments of interest and certain other payments from sources within the US), 1 July 2014; or

 

  (b)

in relation to a “passthru payment” described in section 1471(d)(7) of the Code not falling within paragraph (a) above, the first date from which such payment may become subject to a deduction or withholding required by FATCA.

 

- 8 -


FATCA Deduction” means a deduction or withholding from a payment under a Finance Document required by FATCA.

FATCA Exempt Party” means a Party that is entitled to receive payments free from any FATCA Deduction.

Fee Letter” means any letter or letters dated on or about the date of this Agreement between (i) the Agent or the Security Agent and (ii) the Borrowers setting out any of the fees referred to in Clause 11 (Fees).

Finance Document” means:

 

  (a)

this Agreement;

 

  (b)

any Security Document;

 

  (c)

the Consent and Implementation Agreement;

 

  (d)

any Fee Letter;

 

  (e)

any Transfer Certificate;

 

  (f)

any Assignment Agreement; or

 

  (g)

any other document designated as a Finance Document by the Agent and any Obligor party to it.

Finance Party” means the Agent, the Security Agent or a Lender (together the “Finance Parties”).

Financial Indebtedness” means any indebtedness for or in respect of:

 

  (a)

moneys borrowed;

 

  (b)

any amount raised by acceptance under any acceptance credit facility or dematerialised equivalent;

 

  (c)

any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;

 

  (d)

any redeemable preference share issues which mature prior to the date which is 6-months after the Termination Date or are otherwise classified as borrowings under GAAP;

 

  (e)

the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with GAAP, be treated as a finance or capital lease;

 

  (f)

receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);

 

  (g)

any amount raised under any other transaction (including any forward sale or purchase agreement) of a type not referred to in any other paragraph of this definition having the commercial effect of a borrowing;

 

  (h)

any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative transaction, only the marked to market value (or, if any actual amount is due as a result of the termination or close out of that derivative transaction, that amount) shall be taken into account);

 

- 9 -


  (i)

any counter-indemnity obligation in respect of a guarantee, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution in respect of an underlying liability of an entity which is not a member of the Group but which liability would fall within one of the other paragraphs of this definition; and

 

  (j)

the amount of any liability in respect of any guarantee in respect of any of the items referred to in paragraphs (a) to (i) above.

Financial Quarter” means each period of three (3) months ending on a Quarter Date.

GAAP” means US GAAP or generally accepted accounting principles in the jurisdiction of incorporation of the relevant Obligor, including IFRS.

General Assignment” means, in relation to a Borrower, any assignment of the Earnings, Insurances and Requisition Compensation in respect of the Vessel owned by that Borrower, entered into by that Borrower in favour of the Security Agent in the agreed form.

Group” means the Borrowers and HoldCo and their respective Subsidiaries for the time being.

Guarantees” means

the guarantees and indemnities in Clause 18 (Guarantee and indemnity)

(and “Guarantee” means any of them).

Guarantors” means, together, HoldCo and NMP.

Holding Company” means, in relation to a person, any other person in respect of which it is a Subsidiary.

IAPPC” means a valid and current International Air Pollution Prevention Certificate.

IFRS” means international accounting standards within the meaning of the IAS Regulation 1606/2002 to the extent applicable to the relevant financial statements.

Insolvency Event” in relation to an entity means that the entity:

 

  (a)

is dissolved (other than pursuant to a consolidation, amalgamation or merger);

 

  (b)

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;

 

  (c)

makes a general assignment, arrangement or composition with or for the benefit of its creditors;

 

  (d)

institutes or has instituted against it, by a regulator, supervisor or any similar official with primary insolvency, rehabilitative or regulatory jurisdiction over it in the jurisdiction of its incorporation or organisation or the jurisdiction of its head or home office, 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 by it or such regulator, supervisor or similar official;

 

- 10 -


  (e)

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 is instituted or presented by a person or entity not described in (d) and:

 

  (i)

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

 

  (ii)

is not dismissed, discharged, stayed or restrained in each case within thirty (30) days of the institution or presentation thereof;

 

  (f)

has a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger);

 

  (g)

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 (other than, for so long as it is required by law or regulation not to be publicly disclosed, any such appointment which is to be made, or is made, by a person or entity described in (d));

 

  (h)

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 thirty (30) days thereafter;

 

  (i)

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 (a) to (h); or

 

  (j)

takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts.

Insurances” means, in relation to a Vessel:

 

  (a)

any policy and contract of insurance including entries of that Vessel in any protection and indemnity or war risk association, effected in relation to that Vessel and that Vessel’s Earnings after the date of this Agreement; and

 

  (b)

all rights and other assets relating to, or derived from, any such policies and contracts of insurance (including any rights to a return for a premium.

Interest Period” means, in relation to the Loan, each period determined in accordance with Clause 9 (Interest Periods) and, in relation to an Unpaid Sum, each period determined in accordance with Clause 8.3 (Default interest).

Interpolated Screen Rate” means, in relation to the Loan, the rate (rounded to the same number of decimal places as the two relevant Screen Rates) which results from interpolating on a linear basis between:

 

- 11 -


  (a)

the applicable Screen Rate for the longest period (for which that Screen Rate is available) which is less than the Interest Period of the Loan; and

 

  (b)

the applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds the Interest Period of the Loan,

each as of the Specified Time for the currency of the Loan.

ISM Code” means the International Safety Management Code for the Safe Operation of Ships and for Pollution Prevention (including the guidelines on its implementation), adopted by the International Maritime Organisation, as the same may be amended or supplemented from time to time (and the terms “safety management system”, “Safety Management Certificate” and “Document of Compliance” have the same meanings as are given to them in the ISM Code).

ISM Company” means, at any given time, the company responsible for a Vessel’s compliance with the ISM Code.

ISPS Code” means the International Ship and Port Facility Security Code adopted by the International Maritime Organisation (as the same may be amended, supplemented or superseded from time to time).

ISSC” means a valid and current International Ship Security Certificate issued under the ISPS Code.

Joint Venture” means any joint venture entity, whether a company, unincorporated firm, undertaking, association, joint venture or partnership or any other entity.

Legal Reservations” means:

 

  (a)

the principle that equitable remedies may be granted or refused at the discretion of a court and the limitation of enforcement by laws relating to insolvency, reorganisation and other laws generally affecting the rights of creditors;

 

  (b)

the time barring of claims under the Limitation Acts, the possibility that an undertaking to assume liability for or to indemnify a person against non-payment of UK stamp duty may be void and defences of set-off or counterclaim;

 

  (c)

the limitation of the enforcement of the terms of leases of real property by laws of general application to those leases;

 

  (d)

similar principles, rights and remedies under the laws of any Relevant Jurisdiction; and

 

  (e)

any other matters which are set out as qualifications or reservations as to matters of law of general application in any legal opinions supplied to the Agent by its appointed legal counsel under this Agreement.

Lender” means:

 

  (a)

any Original Lender; and

 

  (b)

any bank, financial institution, trust, fund or other entity which has become a Party in accordance with Clause 28 (Changes to the Lenders), which in each case has not ceased to be a Party in accordance with the terms of this Agreement.

 

- 12 -


LIBOR” means, in relation to the Loan or any part of it:

 

  (a)

the applicable Screen Rate; or

 

  (b)

(if no Screen Rate is available for the Interest Period of the Loan or any part of it) the Interpolated Screen Rate for the Loan;

 

  (c)

if:

 

  (i)

no Screen Rate is available for Dollars; or

 

  (ii)

no Screen Rate is available for the Interest Period of the Loan or any part of it and it is not possible to calculate the Interpolated Screen Rate for the Loan or part of it,

the Reference Bank Rate,

as in the case of paragraphs (a) and (c) above the Specified Time on the Quotation Day for Dollars and for a period equal in length to the Interest Period of the Loan, or part of it and, if any such rate is below 0.25% per annum, LIBOR shall be deemed to be 0.25% per annum.

Limitation Acts” means the Limitation Act 1980, and the Foreign Limitation Periods Act 1984.

Loan” means each of the four loan advances to be made to the Borrowers pursuant to Clause 5.1 (Delivery of Utilisation Request) or, as the context requires, the aggregate principal amount outstanding under the Facility for the time being.

Major Casualty” means, in relation to a Vessel, any casualty to that Vessel in respect of which the claim or the aggregate of the claims against all insurers, inclusive of any franchise or deductible, exceeds or may exceed the Major Casualty Amount.

Major Casualty Amount” means, in relation to a Vessel, US$500,000 or the equivalent in any other currency.

Majority Lenders” means a Lender or Lenders whose Commitments aggregate at least 662/3% of the Total Commitments or, if the Total Commitments have been reduced to zero, aggregated at least 662/3% of the Total Commitments immediately prior to the reduction.

Management Agreements” means any Technical Management Agreement and any Commercial Management Agreement.

Manager’s Undertaking” means, in relation to a Vessel, the letter(s) of undertaking from each Approved Manager in favour of the Security Agent, in the agreed form.

Margin” means:

 

  (a)

for the period commencing on the Utilisation Date and ending on (and including) the date falling 12 months after the Utilisation Date, 4.75% per annum;

 

  (b)

for the period commencing from (but not including) the date falling 12 months after the Utilisation Date and ending on (and including) the date falling 24 months after the Utilisation Date, 6.0% per annum;

 

- 13 -


  (c)

for the period commencing from (but not including) the date falling 24 months after the Utilisation Date until (and including) the Termination Date, 7.0% per annum.

Market Value” means, in relation to a Vessel, the value of that Vessel as determined in accordance with Clause 26.2 (Valuation of Vessels).

Material Adverse Effect” means a material adverse effect on:

 

  (a)

the business, operations, property or financial condition of the Obligors taken as a whole; or

 

  (b)

the ability of the Obligors (taken as a whole) to perform their payment obligations under any Finance Document; or

 

  (c)

subject to the Legal Reservations and Perfection Requirements, the validity or enforceability of, or the effectiveness or ranking of any Security granted or purported to be granted pursuant to any of, the Finance Documents in a manner which would be materially adverse to the interests of the Finance Parties under the Finance Documents taken as a whole and, if capable of remedy, is not remedied within 20 Business Days of the earlier of (i) the relevant Obligor becoming aware of the issue or (ii) the giving of notice of the issue by the Agent; or

 

  (d)

the rights or remedies of any Finance Party under any of the Finance Documents.

Maximum Loan Amount” means US$37,000,000.

MOA” means, in relation to each Vessel, the memorandum of agreement specified in Schedule 8 (Details of Vessels) between the relevant Seller and the relevant Borrower relating to the sale and purchase of such Vessel.

Mortgage” means, in relation to a Vessel, the first priority or first preferred ship mortgage (as the case may be) granted or to be granted (as the context so requires) over that Vessel by the relevant Borrower in favour of the Security Agent in the agreed form.

Mortgaged Vessel” means, at any relevant time, any Vessel which is or purports to be subject to a Mortgage and/or whose Earnings, Insurances and Requisition Compensation are or purport to be subject to Security under the Finance Documents.

New Lender” has the meaning given to that term in Clause 28 (Changes to the Lenders).

NMP Group” means NMP and its Subsidiaries for the time being.

Notional Vessel Tranche” means, in respect of any Vessel, the proportion of the Loan allocated to that Vessel based on its allocated contribution to the Maximum Loan Amount relative to the aggregate Maximum Loan Amount in relation to all Vessels (which shall be as set out in Schedule 7 (Notional Vessel Tranche Amounts), as reduced by any repayments (whether Repayment Instalments or otherwise) or prepayments from time to time in accordance with the terms of this Agreement.

Obligors” means each Borrower and each Guarantor and “Obligor” means any one of them.

OFAC” means the Office of Foreign Assets Control of the US Department of the Treasury.

Operating Expenses” means, in relation to a Vessel, expenses properly and reasonably incurred by the Borrower owning that Vessel in connection with the ownership, operation, commercial and technical management, employment, maintenance, repair and insurance of that Vessel, excluding dry docking costs, but including insurance premiums and reimbursements.

 

- 14 -


Original Jurisdiction” means, in relation to an Obligor, the jurisdiction under whose laws that Obligor is incorporated as at the date of this Agreement.

Parallel Debt” has the meanings given in Clause 30.29 (Parallel Debt).

Participating Member State” means any member state of the European Union that adopts or has adopted the euro as its lawful currency in accordance with legislation of the European Union relating to Economic and Monetary Union.

Party” means a party to this Agreement (together the “Parties”).

Perfection Requirements” means the making or the procuring of the appropriate registration, filings, endorsements, notarisations, stampings or notifications of the Security Documents as specifically contemplated by the relevant Security Document or by any legal opinion delivered to the Agent.

Permitted Holders” means (i) Navios Maritime Holdings Inc., a Marshall Islands corporation (“Holdings”) and any of its Subsidiaries (but only for so long as it continues to be a Subsidiary of Holdings); (ii) Angeliki Frangou; (iii) for the individual named in (ii) above, each of her spouse, siblings, ancestors, descendants (whether by blood, marriage or adoption, and including stepchildren) and the spouses, siblings, ancestors and descendants thereof (whether by blood, marriage or adoption, and including stepchildren) of such natural persons, the beneficiaries, estates and legal representatives of any of the foregoing, the trustee of any bona fide trust of which any of the foregoing, individually or in the aggregate, are the majority in interest beneficiaries or grantors, and any corporation, partnership, limited liability company or other person in which any of the foregoing, individually or in the aggregate, own or control a majority in interest; and (iv) all Affiliates controlled by the persons named in clauses (ii) and (iii) above.

Permitted Intercompany Loans” means any loans from HoldCo to any Borrower, provided that, in each case, such loan (i) does not require cash pay interest to be paid prior to the Termination Date, and (ii) is subordinated and subject to Transaction Security in form and substance acceptable to the Agent (acting on the instructions of the Majority Lenders).

Permitted Maritime Lien” means, in relation to a Vessel:

 

  (a)

unless an Event of Default is continuing, any ship repairer’s or outfitter’s possessory lien in respect of that Vessel for an amount not exceeding the Major Casualty Amount or the equivalent in any other currency;

 

  (b)

any lien on that Vessel for master’s, officer’s or crew’s wages outstanding in the ordinary course of its trading and in accordance with usual maritime practice; or

 

  (c)

liens for salvage.

Permitted Security” means, in relation to a Vessel, any Security over that Vessel which is:

 

  (a)

granted by the Finance Documents;

 

  (b)

a Permitted Maritime Lien; or

 

  (c)

approved in writing by the Agent (on behalf of the Majority Lenders).

 

- 15 -


Permitted Transaction” means:

 

  (a)

any disposal required, Financial Indebtedness incurred, guarantee, indemnity or Security or Quasi-Security given, or other transaction arising, under the Relevant Documents;

 

  (b)

transactions (other than (i) any sale, lease, license, transfer or other disposal and (ii) the granting or creation of any Security or the incurring or permitting to subsist of Financial Indebtedness) conducted in the ordinary course of trading on arm’s length terms; or

 

  (c)

any charter of a Vessel expressly permitted under the terms of the Finance Documents.

Quarter Date” means 31 March, 30 June, 30 September and 31 December of each calendar year.

Quasi-Security” has the meaning given to that term in Clause 22.9 (Negative pledge).

Quotation Day” means, in relation to any period for which an interest rate is to be determined, two (2) Business Days before the first day of that period unless market practice differs in the Relevant Interbank Market in which case the Quotation Day will be determined by the Agent in accordance with market practice in the Relevant Interbank Market (and if quotations would normally be given by leading banks in the Relevant Interbank Market on more than one day, the Quotation Day will be the last of those days).

Receiver” means a receiver or receiver and manager or administrative receiver of the whole or any part of the Security Property.

Reference Bank Rate” means the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Agent at its request by the Reference Banks as the rate at which the relevant Reference Bank could borrow funds in the Relevant Interbank Market in Dollars for the relevant period, were it to do so by asking for and then accepting interbank offers for deposits in reasonable market size in that currency and for that period.

Reference Banks” means the principal London offices of Barclays Bank PLC, Lloyds Bank plc and HSBC Bank plc, or such other banks as may be appointed by the Agent in consultation with the Borrowers.

Related Fund” in relation to a fund (the “first fund”), means a fund which is managed or advised by the same investment manager or investment adviser as the first fund or, if it is managed by a different investment manager or investment adviser, a fund whose investment manager or investment adviser is an Affiliate of or under common control of the investment manager or investment adviser of the first fund.

Related Party” means any member of the Group or any of their respective Affiliates (or any direct or indirect shareholder (or equivalent), officer, employee or director of any member of the Group or any of their respective Affiliates or direct or indirect shareholders (or equivalent), provided that, for the purposes of this definition and with respect to NMP only, ‘shareholder’ shall include only those shareholders owning 5% or more of shares in NMP.

Relevant Document” means:

 

  (a)

any Finance Document;

 

  (b)

any Management Agreement;

 

- 16 -


  (c)

each MOA;

 

  (d)

each Charter; and

 

  (e)

any other document designated as such by the Agent and any Obligor.

Relevant Interbank Market” means the London interbank market.

Relevant Jurisdiction” means, in relation to an Obligor:

 

  (a)

its Original Jurisdiction;

 

  (b)

any jurisdiction where any asset subject to or intended to be subject to the Transaction Security to be created by it is situated;

 

  (c)

any jurisdiction where it conducts business; and

 

  (d)

any jurisdiction whose laws govern the perfection of any of the Security Documents entered into by it.

Relevant Nominating Body” means any applicable central bank, regulator or other supervisory authority or a group of them, or any working group or committee sponsored or chaired by, or constituted at the request of, any of them or the Financial Stability Board.

Repayment Instalment” has the meaning given to that term in Clause 6.1 (Repayment Instalments).

Repeating Representations” means each of the representations set out in Clause 19 (Representations and warranties), other than Clauses 19.8 (Insolvency), 19.9 (No filing or stamp taxes) and 19.13 (No proceedings pending or threatened) and any representation in any other Finance Document which is expressed to be a “Repeating Representation” or is otherwise expressed to be repeated.

Replacement Benchmark” means a benchmark rate which is:

 

  (a)

formally designated. nominated or recommended as the replacement for a Screen Rate by:

 

  (i)

the administrator of that Screen Rate (provided that the market or economic reality that such benchmark rate measures is the same as that measured by that Screen Rate); or

 

  (ii)

any Relevant Nominating Body,

and if replacements have, at the relevant time, been formally designated, nominated or recommended under both paragraphs, the “Replacement Benchmark” will be the replacement under paragraph (ii) above;

 

  (b)

in the opinion of the Majority Lenders and the Borrowers, generally accepted in the international or any relevant domestic syndicated loan markets as the appropriate successor to that Screen Rate; or

 

  (c)

in the opinion of the Majority Lenders and the Borrowers, an appropriate successor to a Screen Rate.

 

- 17 -


Representative” means any delegate, agent, manager, administrator, nominee, attorney, trustee or custodian.

Requisition Compensation” means, in relation to a Vessel:

 

  (a)

any and all compensation or other monies payable by reason of any act or event such as is referred to in paragraph (b) or (c) of the definition of “Total Loss” relating to that Vessel; and

 

  (b)

all claims, rights and remedies of the relevant Borrower against the government or official authority or person or persons claiming to be or to represent a government or official authority or other entity in relation to (a) above.

Resolution Authority” means any body which has authority to exercise any Write-down and Conversion Powers.

Restricted Person” means a person that is:

 

  (a)

listed on, or owned or controlled by a person listed on any Sanctions List;

 

  (b)

located in, incorporated under the laws of, or owned or controlled by, or acting on behalf of, a person located in or organised under the laws of a Sanctioned Country; or

 

  (c)

otherwise a target of Sanctions (being a person with whom a US person or other national under the jurisdiction of a Sanctions Authority would be prohibited or restricted by law from engaging in trade, business or other activities or against whom Sanctions are otherwise directed).

Sanctioned Country” means a country or territory that is, or whose government is, the subject of Sanctions broadly prohibiting dealings with such government, country or territory, including, without limitation, as at the date of this Agreement, Cuba, Iran, North Korea and Syria.

Sanctions” means any economic or trade sanctions, laws, embargoes, regulations, freezing provisions, prohibitions or other restrictions relating to trading, doing business, investment, exporting, financing or making assets available (or other activities similar to or connected with any of the foregoing):

 

  (a)

imposed by law or regulation of the United Kingdom, the Council of the European Union or any of its Member States, the United Nations or its Security Council or the government of the United States of America, whether or not any Obligor or any Affiliate is legally bound to comply with the foregoing;

 

  (b)

the respective governmental institutions and agencies of any of the foregoing, including without limitation, OFAC, the United States Department of State, Her Majesty’s Treasury and the Office of Financial Sanctions Implementation (OFSI) (together, the “Sanctions Authorities”); or

 

  (c)

otherwise imposed by any law or regulation by which any Obligor or any Affiliate of any of them is bound or, as regards a regulation, compliance with which is reasonable in the ordinary course of business of any Obligor or any Affiliate of any of them.

Sanctions List” means the “Specially Designated Nationals and Blocked Persons” list issued by OFAC, the “Consolidated List of Financial Sanctions Targets in the UK. Status: Asset Freeze Targets” issued by OFSI, or any similar list of persons or entities whose assets are frozen, issued or maintained and made public by any of the Sanctions Authorities that has the effect of prohibiting transactions with such persons, as updated.

 

- 18 -


Screen Rate” means the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate) for the relevant currency and period displayed on pages LIBOR01 or LIBOR02 of the Bloomberg screen (or any replacement Bloomberg page which displays that rate) or on the appropriate page of such other information service which publishes that rate from time to time in place of Bloomberg. If such page or the service ceases to be available, the Agent may specify another page or service displaying the relevant rate after consultation with the Borrowers.

Screen Rate Replacement Event” means, in relation to a Screen Rate:

 

  (a)

the methodology, formula or other means of determining that Screen Rate has, in the opinion of the Majority Lenders and the Borrowers materially changed;

 

  (b)

 

  (i)

 

  (A)

the administrator of that Screen Rate or its supervisor publicly announces that such administrator is insolvent; or

 

  (B)

information is published in any order, decree, notice, petition or filing, however described, of or filed with a court, tribunal, exchange, regulatory authority or similar administrative, regulatory or judicial body which reasonably confirms that the administrator of that Screen Rate is insolvent,

provided that, in each case, at that time, there is no successor administrator to continue to provide that Screen Rate;

 

  (ii)

the administrator of that Screen Rate publicly announces that it has ceased or will cease, to provide that Screen Rate permanently or indefinitely and, at that time, there is no successor administrator to continue to provide that Screen Rate;

 

  (iii)

the supervisor of the administrator of that Screen Rate publicly announces that such Screen Rate has been or will be permanently or indefinitely discontinued; or

 

  (iv)

the administrator of that Screen Rate or its supervisor announces that that Screen Rate may no longer be used; or

 

  (c)

the administrator of that Screen Rate determines that that Screen Rate should be calculated in accordance with its reduced submissions or other contingency or fallback policies or arrangements and either:

 

  (i)

the circumstance(s) or event(s) leading to such determination are not (in the opinion of the Majority Lenders and the Borrowers) temporary; or

 

  (ii)

that Screen Rate is calculated in accordance with any such policy or arrangement for a period no less than the period opposite that Screen Rate in Schedule 9 (Screen rate contingency periods); or

 

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  (d)

in the opinion of the Majority Lenders and the Borrowers, that Screen Rate is otherwise no longer appropriate for the purposes of calculating interest under this Agreement.

Secured Liabilities” means all present and future obligations and liabilities (whether actual or contingent and whether owed jointly or severally or in any other capacity whatsoever) of each Obligor to any Finance Party under or in connection with any Finance Document.

Secured Party” means each Finance Party, from time to time party to this Agreement, any Receiver or any Delegate (together the “Secured Parties”).

Security” means a mortgage, charge, pledge, lien or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect.

Security Documents” means:

 

  (a)

any Mortgage;

 

  (b)

any General Assignment;

 

  (c)

any Accounts Security;

 

  (d)

any Charter Assignment;

 

  (e)

any Guarantee;

 

  (f)

any Manager’s Undertaking;

 

  (g)

any Share Charge;

 

  (h)

any Subordination and Assignment Agreement; and

 

  (i)

any other document as may be executed to guarantee and/or secure any amounts owing to the Finance Parties under any Finance Document.

Security Property” means:

 

  (a)

the Transaction Security expressed to be granted in favour of the Security Agent as trustee for the Secured Parties and all proceeds of that Transaction Security;

 

  (b)

all obligations expressed to be undertaken by an Obligor to pay amounts in respect of the Secured Liabilities to the Security Agent as trustee for the Finance Parties and secured by the Transaction Security together with all representations and warranties expressed to be given by an Obligor or any other person in favour of the Security Agent as trustee for the Finance Parties;

 

  (c)

the Security Agent’s interest in any turnover trust created under the Finance Documents; and

 

  (d)

any other amounts or property, whether rights, entitlements, choses in action or otherwise, actual or contingent, which the Security Agent is required by the terms of the Finance Documents to hold as trustee on trust for the Secured Parties.

Seller” means, in relation to each Vessel, the person specified as such in Schedule 8 (Details of Vessels).

 

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Share Charges” means:

 

  (a)

each share security deed granted or to be granted (as the context so requires) by HoldCo in favour of the Security Agent over all of the issued shares in each Borrower,

in each case in the agreed form (and each a “Share Charge”).

Specified Time” means a time determined in accordance with Schedule 6 (Timetables).

Subordination and Assignment Agreement” means the deed of subordination and assignment made or to be made (as the context so requires) between the Borrowers, HoldCo and the Security Agent in the agreed form.

Subsidiary” means any company or entity directly or indirectly controlled by such person and for this purpose ‘control’ means the ownership of more than fifty per cent. (50%) of the voting share capital (or equivalent rights of ownership) of such company or entity.

Tax” means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same).

Technical Management Agreement” means, in relation to a Vessel, any technical management agreement entered into or to be entered into (as applicable) between the relevant Borrower and an Approved Technical Manager in form and substance acceptable to the Agent (acting on the instructions of the Majority Lenders).

Termination Date” means the date falling on the third anniversary of the Utilisation Date.

Total Commitments” means the aggregate of the Commitments.

Total Loss” means, in relation to a Vessel:

 

  (a)

any actual, constructive, compromised, agreed or arranged total loss of that Vessel;

 

  (b)

any expropriation, confiscation, requisition or acquisition of that Vessel, whether or not for consideration (full, partial or nominal), which is effected by any government or official authority or by any person or persons claiming to be or to represent a government or official authority (a “Compulsory Acquisition”);

 

  (c)

any hijacking, theft, condemnation, capture, seizure, arrest (of a nature covered by insurances), detention or confiscation of that Vessel not falling within the definition of “Compulsory Acquisition”, or by persons allegedly acting or purporting to act on behalf of any government entity, unless (i) the Vessel is released and restored to the Borrower owning that Vessel within ninety (90) days after such incident, or (ii) if relevant underwriters confirm in writing (in customary terms) prior to the end of such ninety (90) day period that such capture, seizure, detention or confiscation will be fully covered by the relevant Borrower’s war risks insurance, the shorter of twelve (12) months and such period for which cover is confirmed to attach.

Total Loss Date” means any date in respect of which a Total Loss shall be deemed to have occurred, being: (i) in the event of the destruction or other actual total loss of a Vessel, the date of such loss, or if such date is unknown, on the date such Vessel was last reported; (ii) in the event of a constructive, agreed or compromised total loss of a Vessel, the date of determination of such total loss; (iii) in the case of any event referred to in paragraph (c) of the definition of “Total Loss”, on the date that is six (6) months (or in the case of any of the foregoing events resulting from an act of piracy covered by insurance, twelve (12) months) after the occurrence of such event.

 

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Transaction Security” means the Security created or evidenced or expressed to be created or evidenced under the Security Documents.

Transfer Certificate” means a certificate substantially in the form set out in Schedule 4 (Form of Transfer Certificate) or any other form agreed between the Agent and the Borrowers.

Transfer Date” means, in relation to an assignment or a transfer, the later of:

 

  (a)

the proposed Transfer Date specified in the relevant Assignment Agreement or Transfer Certificate; and

 

  (b)

the date on which the Agent executes the relevant Assignment Agreement or Transfer Certificate.

Unpaid Sum” means any sum due and payable but unpaid by an Obligor under any Finance Document.

US Tax Obligor” means:

 

  (a)

an Obligor which is resident for tax purposes in the United States of America; or

 

  (b)

an Obligor some or all of whose payments under the Finance Documents are from sources within the US for US federal income tax purposes.

Utilisation” means the utilisation of the Facility.

Utilisation Date” means the date of Utilisation, being the date on which Utilisation is to be made.

Utilisation Request” means a notice substantially in the form set out in Schedule 3 (Utilisation Request).

Valuation” means, in relation to a Vessel, a valuation prepared:

 

  (a)

as at a date not more than 15 days previously;

 

  (b)

by an Approved Broker selected or appointed by the Agent;

 

  (c)

with or without physical inspection of the Vessel (as the Agent may require);

 

  (d)

on the basis of an “as is, where is” sale for prompt delivery for cash on normal arm’s length commercial terms as between a willing seller and a willing buyer, free of any existing charter or other contract of employment,

and, if required by the Agent, after deducting the estimated amount of the usual and reasonable expenses which would be incurred in connection with the sale.

VAT” means:

 

  (a)

any tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112); and

 

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  (b)

any other tax of a similar nature, whether imposed in a member state of the European Union in substitution for, or levied in addition to, such tax referred to in paragraph (a) above, or imposed elsewhere.

Vessels” means each vessel described in Schedule 8 (Details of Vessels) (and each a “Vessel”) except to the extent it has been sold or has become a Total Loss.

Voting Stock” means, in respect of any person as of any date, the capital stock or other equity interests of such person that is at the time entitled to vote in the election of the board of directors (or equivalent) of such person.

VTL Coverage” has the meaning given to such term in Clause 26.1 (Additional security).

Write-down and Conversion Powers” means:

 

  (a)

in relation to any Bail-In Legislation described in the EU Bail-In Legislation Schedule from time to time, the powers described as such in relation to that Bail-In Legislation in the EU Bail-In Legislation Schedule; and

 

  (b)

in relation to any other applicable Bail-In Legislation:

 

  (i)

any powers under that Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers; and

 

  (ii)

any similar or analogous powers under that Bail-In Legislation.

 

1.2

Construction

 

  (a)

Unless a contrary indication appears, a reference in this Agreement to:

 

  (i)

the “Account Bank”, the “Agent”, any “Finance Party”, any “Lender”, any “Obligor”, any “Party”, any “Secured Party”, the “Security Agent” or any other person shall be construed so as to include its successors in title, permitted assigns and permitted transferees to, or of, its rights and/or obligations under the Finance Documents and, in the case of the Security Agent, any person for the time being appointed as Security Agent or Security Agents in accordance with the Finance Documents;

 

  (ii)

an “agency” of a state includes any local or other authority, self-regulating or other recognised body or agency, central or federal bank, department, government, legislature, minster, ministry, self-regulating organisation, official or public or statutory person (whether autonomous or not) or, or of the government of, that state or political sub-division in or of that state;

 

  (iii)

a document in “agreed form” is a document which is previously agreed in writing by or on behalf of any Obligor party to it and the Agent or, if not so agreed, is in the form and substance specified by the Agent (acting on the instructions of all Lenders);

 

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  (iv)

approved” means approved in writing by the Agent, acting on the instructions of the Majority Lenders;

 

  (v)

assets” includes present and future properties, revenues and rights of every description;

 

  (vi)

authorisation” means an authorisation, consent, approval, resolution, licence or exemption by a person by whom the same is required by law;

 

  (vii)

disposal” includes a sale, transfer, assignment, grant, lease, licence, declaration of trust or other disposal, whether voluntary or involuntary, and “dispose” will be construed accordingly;

 

  (viii)

the “equivalent” of an amount specified in a particular currency (“specific currency amount”) shall be construed as a reference to the amount of the other relevant currency which can be purchased with the specific currency amount in the London foreign exchange market at 11 a.m. on the date the calculation falls to be made for spot delivery, as conclusively determined by the Agent (with the relevant exchange rate of such purchase being the “Agent’s spot rate of exchange”);

 

  (ix)

excess risks” means, in relation to a Vessel, the proportion (if any) of claims for general average, salvage and salvage charges not recoverable under the hull and machinery insurances in respect of that Vessel in consequence of the value at which a Vessel is assessed for the purpose of such claims exceeding its insured value;

 

  (x)

a “Finance Document” or “Relevant Document” or any other agreement or instrument is a reference to that Finance Document or Relevant Document or other agreement or instrument as amended, novated, supplemented, extended or restated from time to time;

 

  (xi)

guarantee” means any guarantee (other than in Clause 18 (Guarantee and indemnity)), letter of credit, bond, indemnity or similar assurance against loss, or any obligation, direct or indirect, actual or contingent, to purchase or assume any indebtedness of any person or to make an investment in or loan to any person or to purchase assets of any person where, in each case, such obligation is assumed in order to maintain or assist the ability of such person to meet its indebtedness;

 

  (xii)

indebtedness” includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent;

 

  (xiii)

month” means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month, except that:

 

  (1)

if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in which that period is to end if there is one, or if there is not, on the immediately preceding Business Day;

 

  (2)

if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month; and

 

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  (3)

the above rules will only apply to the last month of any period;

 

  (xiv)

obligatory insurances” means all insurances effected, or which any Borrower is required to effect, under Clause 24.2 (Maintenance of obligatory insurances) or any other provision of any Finance Document;

 

  (xv)

a “person” includes any individual, firm, company, corporation, government, state or agency of a state or any association, trust, joint venture, consortium or partnership (whether or not having separate legal personality);

 

  (xvi)

a “policy” in relation to any insurance, includes a slip, cover note, certificate of entry or other document evidencing the contract of insurance or its terms;

 

  (xvii)

protection and indemnity risks” means the usual risks covered by a protection and indemnity association that is a member of the International Group of P&I Clubs, including pollution risks and the proportion (if any) of any sums payable to any other person or persons in case of collision which are not recoverable under the hull and machinery policies by reason of the incorporation in them of clause 6 of the International Time Clauses (Hulls)(1/11/02 or 1/11/03) or clause 8 of the Institute Time Clauses (Hulls) (1/10/83) or the Institute Amended Running Down Clause (1/10/71) or any equivalent provision;

 

  (xviii)

a “regulation” includes any regulation, rule, official directive, request or guideline (whether or not having the force of law but if not having the force of law one with which the relevant party at whom it is directed would customarily comply) of any governmental, intergovernmental or supranational body, agency, department or of any regulatory, self-regulatory or other authority or organisation;

 

  (xix)

war risks” includes the risk of mines and all risks excluded by clause 29 of the Institute Hull Clauses (1/11/02 or 1/11/03) or clause 24 of the Institute Time clauses (Hulls) (1/11/1995) or clause 23 of the Institute Time Clauses (Hulls) (1/10/83);

 

  (xx)

words importing the plural shall include the singular and vice versa and words importing a gender shall include every gender;

 

  (xxi)

a provision of law is a reference to that provision as amended or re-enacted; and

 

  (xxii)

a time of day is a reference to London time.

 

  (b)

Section, Clause and Schedule headings are for ease of reference only.

 

  (c)

Unless a contrary indication appears, a term used in any other Finance Document or in any notice given under or in connection with any Finance Document has the same meaning in that Finance Document or notice as in this Agreement.

 

  (d)

A Default (other than an Event of Default) is “continuing” if it has not been remedied or waived and an Event of Default is “continuing” if it has not been remedied or waived.

 

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  (e)

Where the Agent or the Security Agent is referred to as acting “reasonably” or “in a “reasonable manner” or as coming to an opinion or determination that is “reasonable” (or any similar or analogous wording is used), this shall mean that the Agent and the Security Agent shall be acting or coming to an opinion or determination on the instructions of the Lenders or the Majority Lenders (as the case may be) acting reasonably or in a reasonable manner and the Agent and the Security Agent shall be under no obligation to determine the reasonableness of such instructions or whether in giving such instructions the Lenders or the Majority Lenders (as the case may be) are acting reasonably or in a reasonable manner

 

  (f)

Where acceptability to or satisfaction of the Agent or the Security Agent is referred to in relation to a matter not affecting the personal interests of the Agent or Security Agent (including, for the avoidance of doubt, any satisfaction or determination in relation to conditions precedent) this shall mean the acceptability to or satisfaction of the Lenders or the Majority Lenders (as the case may be) as notified by it to the Agent or Security Agent.

 

  (g)

In respect of paragraphs (e) and (f) above, the Agent and the Security Agent shall not be responsible for any liability occasioned or by any delay or failure on the part of the Lenders or the Majority Lenders (as the case may be) to give any such instructions or direction or to form any such opinion.

 

1.3

Third Party Rights

 

  (a)

Unless expressly provided to the contrary in a Finance Document a person who is not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 (the “Third Parties Act”) to enforce or to enjoy the benefit of any term of this Agreement.

 

  (b)

Notwithstanding any term of any Finance Document the consent of any person who is not a Party is not required to rescind or vary this Agreement at any time.

 

  (c)

Any Receiver, Delegate or any person described in Clause 1.1 (Definitions) may, subject to this Clause 1.3(c) and the Third Parties Act, rely on any Clause of this Agreement which expressly confers rights on it.

 

1.4

Conflict

In the event of conflict between the provisions of this Agreement and any other Finance Documents, unless a contrary intention appears the provision of this Agreement shall prevail.

 

2.

The Facility

 

2.1

The Facility

Subject to the terms of this Agreement, the Lenders shall make available to the Borrowers a term loan facility in an aggregate amount not exceeding the Maximum Loan Amount (as adjusted in accordance with the terms of this Agreement).

 

2.2

Finance Parties’ rights and obligations

 

  (a)

The obligations of each Finance Party under the Finance Documents are several. Failure by a Finance Party to perform its obligations under the Finance Documents does not affect the obligations of any other Party under the Finance Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents.

 

  (b)

The rights of each Finance Party under or in connection with the Finance Documents are separate and independent rights and any debt arising under the Finance Documents to a Finance Party from an Obligor shall be a separate and independent debt.

 

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  (c)

A Finance Party may, except as otherwise stated in the Finance Documents, separately enforce its rights under the Finance Documents.

 

3.

Purpose

 

3.1

Purpose

Each Borrower shall apply all amounts borrowed by it under the Facility only for the purpose of financing the acquisition cost of the Vessels.

 

3.2

Monitoring

No Finance Party is bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.

 

4.

Conditions of Utilisation

 

4.1

Conditions precedent

The Borrowers may not deliver an Utilisation Request and the Lenders will not be obliged to comply with Clause 5.4 (Lenders’ participation):

 

  (a)

unless the Agent, or its duly authorised representative, has received all of the documents and other evidence listed in Part I of Schedule 2 (Conditions Precedent to Utilisation) in form and substance satisfactory to the Agent. The Agent shall notify the Obligors and the Lenders promptly upon being so satisfied; and

 

  (b)

on the date of the Utilisation Request and on the proposed Utilisation Date:

 

  (i)

no Default is continuing or would result from the proposed Utilisation;

 

  (ii)

all representations and warranties under any of the Finance Documents made or to be made by an Obligor are true and accurate as at that date with reference to the facts and circumstances then existing;

 

  (iii)

the provisions of Clause 10.3 (Alternative basis of interest or funding) do not apply; and

 

  (iv)

no Vessel has been the subject of a Total Loss;

 

  (c)

the Utilisation requested is for an amount equal to the Maximum Loan Amount; and

 

  (d)

the Agent is satisfied that the Utilisation requested shall not exceed the Total Commitments.

 

4.2

Waiver of Conditions Precedent

If the Agent, acting upon the instructions of all Lenders (which authorisation the relevant Lenders shall have full power to withhold), permits Utilisation of the Facility before certain of the conditions referred to in Clause 4.1 are satisfied, the Borrowers shall ensure that such conditions are satisfied with five (5) Business Days after the Utilisation Date (or such longer period as the Agent may, with the authorisation of all Lenders, specify) and any failure of the Borrowers to do so within that period shall constitute an immediate Event of Default.

 

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4.3

Conditions subsequent

The Borrowers undertake to deliver or to cause to be delivered to the Agent the relevant additional documents and other evidence listed in Part II of Schedule 2 (Conditions Subsequent), such documents and evidence to be delivered within thirty days after the Utilisation Date except for the documents and evidence in paragraphs (1) to (4) of Part II of Schedule 2 (Conditions Subsequent) which are to be delivered within ten (10) Business Days of the Utilisation Date.

 

5.

Utilisation

 

5.1

Delivery of Utilisation Request

The Borrowers may utilise the Facility by delivery to the Agent of a duly completed Utilisation Request not later than the Specified Time (or such shorter period as the Agent may agree, acting on the instructions of the Lenders) in respect of four advances, with each advance to be made to the Borrowers in an amount equal to the amount of the respective Notional Vessel Tranche.

 

5.2

Completion of Utilisation Request

The Utilisation Request is irrevocable and will not be regarded as having been duly completed unless:

 

  (a)

the proposed Utilisation Date is a Business Day within the Availability Period;

 

  (b)

the currency and amount of the Utilisation comply with Clause 5.3 (Currency and amount); and

 

  (c)

it specifies the account and bank to which the proceeds of the Loan are to be credited.

 

5.3

Currency and amount

 

  (a)

The currency specified in an Utilisation Request must be Dollars.

 

  (b)

The amount of the proposed Utilisation must be an amount which is equal to the Maximum Loan Amount.

 

  (c)

There shall be no more than one Utilisation.

 

5.4

Lenders participation

 

  (a)

If the conditions set out in this Agreement have been met, each Lender shall make its participation in the Loan available by the Utilisation Date through its Facility Office.

 

  (b)

The amount of each Lender’s participation in the Utilisation will be equal to the proportion borne by its Available Commitment to the Available Facility immediately prior to making the Utilisation. No Lender is obliged to participate in the Utilisation if, as a result, its share in the Loan then outstanding or in respect of which the Utilisation Request has been issued would exceed its Commitment.

 

  (c)

The Agent shall notify each Lender of the amount of the Utilisation and the amount of its participation in the Utilisation by the Specified Time.

 

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5.5

Disbursement

The Agent shall, on the Utilisation Date, apply the proceeds of Utilisation in accordance with the terms of the Consent and Implementation Agreement.

 

6.

Repayment

 

6.1

Repayment Instalments

 

  (a)

Subject to the provisions of this Agreement, the Borrowers shall repay the Notional Vessel Tranches by 8 equal consecutive quarterly instalments in an aggregate amount of US$925,000 (such aggregate amount to be applied pro rata to the outstanding principal amount of the Notional Vessel Tranches) commencing on 30 September 2020 and thereafter on each subsequent Quarter Date (each instalment a “Repayment Instalment”).

 

  (b)

The balance of each Notional Vessel Tranche shall be repaid by the Borrowers in full as a balloon repayment on the Termination Date, together with all other amounts then due and outstanding under the Finance Documents (the “Balloon Instalment”).

 

6.2

No Reborrowing

Amounts of the Loan which are repaid or prepaid shall not be available for reborrowing.

 

7.

Prepayment and cancellation

 

7.1

Illegality

If, in any applicable jurisdiction, it becomes unlawful for any Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain its participation in the Loan or any part of the Loan or it becomes unlawful for any Affiliate of a Lender for that Lender to do so: