Exhibit 10.16
[EUROBANK LOGO]
EFG Eurobank Ergasias S.A.
Messrs.
CAPITAL SHIP MANAGEMENT CORP.,
3 lassonos Str.,
Piraeus, 185 37
24th May 2005
Dear Sirs,
Further to our recent discussions, we are pleased to set out below the terms
and conditions of a non-amortizing eurodollar credit facility (the "FACLLITY"),
which we, EFG Eurobank Ergasias S.A. (the "BANK"), are prepared in principle and
subject to satisfactory documentation (of a loan agreement and of any security
documents as the Bank may require in its sole and absolute discretion, as per
below) to arrange.
PURPOSE: To provide funds to the Borrower for general corporate
purposes.
BORROWER: Capital Ship Management Corp. of Panama, the management
company of the group vessels.
AMOUNT: USD 60,000,000 (US Dollars sixty million).
DRAWDOWN: In 1 (one) tranche, subject to satisfaction of all
conditions precedent, and in any event not later than
30th June 2005.
FINAL MATURITY: At the earlier of:
o 12 (twelve) months from Drawdown, or
o 1 (one) month from the date when a holding
company that will beneficially own the group
vessels (the "HOLDING COMPANY") is
successfully listed in the NYSE or NASDAQ.
AMORTIZATION: Through bullet payment on Final Maturity.
OPTIONAL PREPAYMENT: Prepayment of the Facility may be made without premium or
penalty at the end of the relative interest period in
minimum amounts of USD 1,000,000 (US Dollars one
million). Any amounts prepaid may not be re-borrowed.
INTEREST RATE: Interest will be payable on rollover dates or quarterly
in arrears, whichever is earlier, at the rate of 0.50%
(zero point five percent) per annum over the London
Interbank Offer Rate (LIBOR) for maturities of 1 (one), 2
(two) or 3 (three) months, or any other period acceptable
to the Bank.
ARRANGEMENT FEE: Flat fee of USD 90,000 (US Dollars ninety thousand), to
be paid to the Bank upon Drawdown.
SECURITY: Such security to be provided (in favour of the Facility)
prior to Drawdown and/or thereafter, as the Bank may
require in its sole and absolute discretion.
The Bank shall advise the Borrower of any such required
security before the finalization of the relevant Facility
documentation.
COVENANTS: a) The Borrower shall not carry on any other business
than the management and/or operation of ocean-going
vessels. Any material change in the Borrower's business
to require the prior consent of the Bank.
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[LOGO]
b) No change of beneficial ownership and management of
the Borrower to be effected throughout the Facility
period without the prior written consent of the Bank.
c) Borrower (incl. related companies) to provide the Bank
with financial statements and interim information
pertaining to its performance.
d) Borrower (incl. related companies} to provide and/or
disclose any information on its activities including
financial standing, commitments and operations as the
Bank may reasonably request from time to time.
DOCUMENTATION: The Facility will be subject to the negotiation,
execution and exchange of loan documentation
satisfactory, in all respects, to the parties thereto,
including the Facility Agreement. The Facility Agreement
will incorporate clauses currently standard in the
eurocurrency loan market for transactions of this type.
In particular, the Facility Agreement will incorporate,
inter alia, the following:
a) Conditions precedent.
b) Representations and warranties.
c) Events of default (including among other things,
cross-default, cessation of business, material adverse
change, change in control, unlawfulness).
d) Reimbursement of increased costs to the Bank
(resulting from the imposition of, or changes in the
administration or interpretation of, capital ratio or
reserve requirements on contingent liabilities or other
measures imposed by the regulatory authorities).
TRANSFERABILITY: The Bank reserves the right to transfer, assign, or sell
part or whole of the Facility to its affiliates or,
subject to the Borrower's consent, to a third Financial
Institution, at the expense of the Borrower.
GOVERNING LAW: The laws of Greece.
LEGAL EXPENSES: All expenses incurred by the Bank in connection with the
preparation, negotiation and execution of the Facility
documents will be paid by the Borrower.
We are happy to offer you the Facility. If the above terms and conditions meet
with your approval, please indicate your acceptance by signing and returning the
enclosed copy of this letter by 30th May 2005, at which time the offer will
expire.
Sincerely yours,
/s/ Lambros Theodorou /s/ Athanassios Doudoulas
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Lambros Theodorou Athanassios Doudoulas
Deputy General Manager Account Manager
